LTC 075-2004 Loews Hotel Percentage Rent
CITY OF MIAMI BEACH
Office of the City Manager
Letter to Commission No. 075-2004
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From:
Mayor David Dermer and
Members of the City Commission
Jorge M. Gonzalez J A.--~
City Manager ~ D
Loews Hotel Percenta e Rent
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Date: ~i11f200<tv
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On September 20, 1996, the Miami Beach Redevelopment Agency (RDA) entered into a
Lease Agreement with Miami Beach Redevelopment, Inc., (MBRI), a fully owned subsidiary
of Loews Hotels. The Agreement defines the terms under which the RDA receives rent
revenues for the Loews Miami Beach Hotel. Loews' rent currently consists of a base rent of
$500,000 and percentage rent determined by a seven tier system. The tiers are prompted
primarily by alternating thresholds of internal rates of return, funded equity returns for
MBRI, and land value returns for the RDA.
Initial profit projections for the Loews, indicated that the hotel would not reach profitability
within its first few years of operation and, likewise, the RDA would not receive percentage
rent. However, Loews has far exceeded these expectations. On March 31, 2004, the
Redevelopment Agency received a check in the amount of $2,313,249 for lease year
2003. Prior years' percentage rents were as follow:
Year Incentive Rent Received
1999 $ 252,973
2000 $2,054,967
2001 $ - 0 - (Due to refinancing of MBRI's debt structure as
permitted in the Hotel Lease Agreement)
2002 $ 647,041
2003 $2,313,249
If you have any questions, please contact me.
JMG\C~K~
F:\DDHPISAlI\RDA\loews\incentive_rent04.l TC.doc
c: Christina M. Cuervo, Assistant City Manager
Kent Bonde, Redevelopment Coordinator
1601 Collins Avenue
Miami Beach Fl 33139
Hotel (305) 604-1601
Fax (305) 604-3999
www.loewshotels.com
March 30, 2004
Miami Beach Redevelopment Agency
Attn: Ms. Trish Walker
Director of Finance
City of Miami Beach
1700 Conference Circle Drive
Miami Beach, Fl. 33139
Re: Loews Miami Beach Hotel
Dear Ms. Walker,
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In accordance to the Lease Agreement with the Loews Miami Beach Hotel, this letter is
to advise you that the Annual Financial Statement for the 2003- Y ear Lease is available at
the Hotel in accordance with Section 28.1@.
In addition, in accordance with Section 3.3 @, Two Million Three Hundred Thirteen
Thousand Two Hundred Forty-Nine Dollars and 00 Cents ($2,313, 249.00) is due for the
2003 Percentage Rent.
If you have any questions, please do not hesitate to call us.
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Charlton Hines
Managing Director
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DATE I 03/30/2004 I CHECK NUMBER 100000658251
INVOICE NUMBER
INVOICE
DATE
VOUCHER
NUMBER
VOUCHER
DUE DATE
GROSS AMOUNT
DISCOUNT
NET AMOUNT
033004
03/30/2004 VCH0000097629
03./30/2004
$ 2,313,249.00
S 2,313,249.00
$ 2,313,249.00
1128
0000000468 MB REDEVELOPMENT (RENT)
TRUE WATERMARK IS VISIBLE IN THIS PAPER. HOLD UP TO A LIGHT SOURCE TO VIEW. THIS DOCUMENT HAS A COLORED BACKGROUND ON WHITE SECURITY PAPER.
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MIAMI BEACH REDEVELOPMENT AGENCY
1700 CONFERENCE CIRCLE DRIVE
MIAMI BEACH, FL 33139
ATTN: TRISH WALKER
I AMOUNT I
$ 2,313,249.00
. TO THE.
. ORDER
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