096-1998 LTC
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
http:\\ci.miami-beach.f1.us
L.T.C. No. 96-1998
LETTER TO COMMISSION
June 19, 1998
TO: Mayor Neisen O. Kasdin and
Members of the City Commission
FROM: Sergio Rodriguez
City Manager
SUBJECT: SECOND UPDATE ON LOEWS STRUCTURAL PEER REVIEW AND
PRESS RELEASE FOR LOEWS
On June 16, 1998, the Administration issued LTC # 88-1998, which advised the Commission that
a meeting would be held on Friday, June 19, 1998 to review the various reports related to the Loews
structural peer review and to arrive at collective recommendations for corrective work on the
structural system of the hotel.
At the City Commission Meeting of June 17, 1998, Commission Dermer expressed a desire to be
present at this meeting. Other Commissioners advised that they also wanted to attend. The
Administration then cancelled the Friday meeting which had been scheduled for 3 :30 p.m. in order
to provide proper advertising. The meeting is now scheduled for Monday June 22, 1998, at 3 :00
p.m., in the Mayor's conference room.
Loews has submitted a press release (attached) which explains that they acknowledge that limited
remedial work is necessary, that they will perform that work and that they will bear the costs.
The Administration has also received a signed copy of Mr. Gopman's June 16, 1998 letter and is
enclosing it for your information.
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Attachments
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JUN. 19.1998 4:22PM
LOEWS HOTELS
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'1Ic::~ PftlltlOI!:NT 01' PUBLIC R"~"'TIQ"*
LO~S HOTELS ~ THE CITY OF MIAMI BEACH
ANNO C:E RESULTS 9F TWO INIlRPENDENT REVIEWS
REGARDING TaE STRUCTURAL ENGINEERING ntiJGN
OF LOEWS MTAMl BEACH HOTEL
No Changes AnticiDated in the hotel's proiected Soft Openinv Date
NEW YORK, NY _ June 19, 1998 - further to two independent reviews of the 'ttuctuTal de~ign of
Loews Miami Beach Hotel, additional work will be necessary to the structural design of the building.
Basoo on the scope of the remedial work identified I and, subject to the permitting proce.ss, it is
anticipated that the soft opening date in October will not be impacted.
The two reviews were brought about in re~ponse to concerns raised by the recent inquiry of four
projects which had been designed by Riva Timmons Klein, which has been under scrutiny since it was
revealed that one of the firm's projects near Dadeland had structural flaws.
The remedial work necessary is il1limited, isolated areas of rhe buildini with the lateral wind system
and their frames, which are required considering the possibility of a major hurricane.
Through the peer reviews, a system of repairs has been iclentified to correct
the framing sYlitem~ to ensure that it complies with the current South Florida Building Codes.
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JUN. 19.1998 4:23PM
LOEWS HOTELS
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To provide an additional measure of assurance, Loews Hotels has also retained Chicago-based Wlss
Janney Elstner Associates, Inc., to conduct a peer review of the desIgn plans and specifications for
the remedial work.
"We are confident that the changes being made as a result of these reviews will ensure that all
appropriate codes and requirements are met," said Marc Shapiro, Senior Vice President of Facilities
for Loews Hotels. "Now that W5 have determined what chanies need to be made. we can now rnove
forward on making the remediations in a timely manner, and to opening the hotel this Fall. We are
also appreciative of the City of Miami Beach's efforts to initiate the peer review, and for their support
throughout the process. And, we are also grateful for the work that Herbert Gopman has done in
c.onducting his analysis as well."
The anticipated costs, which will be assumed by the developer, are estimated to range between one to
two million dollars. The two independent reports were conducted by a local firm, Gopman &
A.ssociates, which was hired by [he City of Miami Beach, and by Ysrael A. Seinuk. which was
retained by Loews Hotels.
Located on Collins Avenue and 16th Street, Loews Miami Beach Hotel is a public/private partnership
with the City of Miami Beach. 'The 800-room project includes the restoration of the landmark: St.
Moritz Hotel, and construction of a new 17-story tower.
NHtI
CONTACT: Debra Kelman
(212) 521-2833
Taryn Schneider
(305) 604-3S95
..
GOPM~N
Design
...
Inspection
CONSUL~ING ENGINEERS, INC.
Investigation
20895 E. Dixie Hwy. · No. Miami Beach, FL 33180
Dade: (305) 932-5911
Reports
Mr. Phil Azan
City of Miami Beach
Building Department
1700 Convention Center Drive
Miami Beach, FL 33139
RE: Loews Hotel
Dear Mr. Azan:
This is the conclusion to our investigation of the wind resisting system of the Loews hotel.
Our investigation was based on current requirements of the South Florida Building code which
adopts the wind load criteria of AS.C.E. 7-93. The actual values used came from the final
determinations as arrived from the wind tunnel tests results of Rowan-Williams-Davis and Irwin
of Guelph, Ontario.
Calculations made for our determinations came from two different sources, one from a consultant
we retained, using a three dimensional analysis different from our use, and an in house analysis
using the commonly used three dimensional analysis known as E-tabs. In both cases, the final
results agreed that the wind frames at column lines 3, 4 and 6 were significantly underdesigned, in
some cases greater than four times the allowable design values when considering the allowable
capacities of the piles under the frames. The frames themselves below the fourth level were
significantly underdesigned to the extent of twice their allowable values. The structural wind
system does work above the fourth level, there is a very large decrease in building stiffness below
the fourth level. The comparison made was as follows:
The top habitable floor has a drift ratio ofL/188, or a drift in inches of 11.03". The 4th floor has a
drift ratio ofL/196 or a drift in inches of 4.8". Although these exceed the comfort level of the
building, and in all likelihood the building will be evacuated, it is likely that the building cladding
will be affected prior to any structural failure. Our normal design comfort level (not a code
requirement) is from L/300 to L/400, depending on the feeling of the design engineer.
Additionally, we checked the wind resistance at wind forces of75 miles per hour (considered
maximum summer winds), the wind frames were found to be capable of sustaining these forces,
however some of the pile caps were still suspect as there appeared to be a lack of sufficient piles
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in some of the smaller caps of the transfer frames.
Since our analysis was based on interaction, that is to say there would be a load distribution to the
thin frames of the building, there still exists the probability that these thinner frames cannot accept
the distribution since they have not been properly reinforced. The distributed forces would return
to the stiffer frames, imposing even more load than our analysis shows.
In concluding our report, the investigation shows a lack of design for frames located at lines 3,4
and 6 from the 4th level down, these include the columns, beams, piles and pile caps.
In order to more equally distribute the forces taken by the building and not allow a torsional
distribution to other frames and thus overload them, it is suggested that the concentration of
repairs be made within the vicinity of frame lines 3, 4 and 6. .
To further expand on this last comment, our analysis shows that the Shearwalls remaining at the
lower levels defined as Shearwalls l, 2 and 3 on the West side near the retail area, are also
deficient in reinforcing. This condition is probably correctable by eliminating the excessive
torsional forces thrown into the structure from the defective wind frames 3, 4 and 6. If a
correction can be focused in the East area, another analysis would probably show the West side to
be sufficient.
This report was taken from an analysis dealing with wind forces and their resisting elements only.
It would be advisable to perform additional investigations on various other elements such as the
gravity structures, floor slabs, cladding, etc.
Please be advised that this office neither warrants nor guarantees any portion of the foregoing
structure either implied or written in this report.
Respectfully Submitted,
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CITY OF MIAMI BEACH
OFFICE OF THE CITY ATTORNEY
Interoffice Memorandum
To:
MURRAY H. DUBBIN
CITY ATTORNEY
Date: June 11, 1998
From: Lawrence A. Levy
First Assistant City Attorney
Subject: Loews Hotel and Convention Center Hotel Garage
This is in response to your memo dated June 4, 1998 concerning the article in the Miami
Daily Business Review on that date and certain issues which have been raised in connection
therewith. In response to the specific questions raised, I would advise you of the following:
1. With respect to the City's liability, if any, for the problem, I have reviewed the Ground Lease
for the Loews Hotel and, while we do not have any direct liability, any additional amounts
spent to correct structural problems would appear to fall within the definition of
"Development Cost Overruns" which are defined to mean "the amount of actual Hotel
Construction Costs (as defined in the Hotel Development Agreement) in excess of
$110,000,000), which excess shall in no event exceed $11,000,000." This is significant
because Section 3.3 of the Ground Lease provides for distributions of net cash flow after debt
service and percentage rent to the Miami Beach Redevelopment Agency ("RDA"). As part
of the net cash flow after debt service, the third tier is that one hundred percent (100%) of
the cash flow is to the Tenant (i.e., Loews) until the Tenant receives a "fifteen percent (15%)
per annum cumulative (not compounded) return on funds provided by Tenant to meet
Development Costs Overruns..." Beginning with the fourth tier of distribution of the net
cash flow after debt service, the Owner (i.e., the RDA) begins to share in the cash flow and
receive percentage rent. Thus, it would appear that unanticipated amounts that are spent to
fix any structural problems in the Hotel will eventually affect the City's return on its
investment.
Michael Meyer has advised me that the Development Cost Overruns are already substantial
and some of those may be submitted to arbitration in accordance with the Ground Lease and
Hotel Development Agreement. Any amount over $11,000,000 is Loew's responsibility.
With regard to whether the City is a contracting party with Riva Klein & Partners, Inc., the
answer is in the negative. The signatories to the structural engineering contract are Riva
Klein & Partners, Inc. and the 8t. Moritz Hotel Corp. Jack 8. Adler signed as a senior vice
president of St. Moritz and Antonio 1. Riva signed as president of the structural engineering
firm.
2. You asked whether Tishman was involved; I presume you mean in a review of the structural
engineering work. I have reviewed the November 1, 1996 agreement by and among the
RDA, the City and Tishman Hotel Corporation and the only thing that I have found in the
scope of their work that relates to engineering is in Exhibit A to the Tishman Agreement,
Item A. (1 ) calls for Tishman to "review plans and specifications developed by the
Architectural/Engineering teams and advise on practical alternates that may service time
and/or money." The text that follows describes these reviews as including the analysis of
systems, materials and equipment to take advantage of current conditions in the construction
market, preparation of budgets of systems, assemblies, equipment and materials, and where
appropriate, development of bidding alternates on materials, construction techniques,
fabrication and insulation methods. My review of the description of services in Exhibit A
indicates that the thrust of the contract is toward review and advice on monetary items,
construction methods, and project scheduling. I do not see any indication in the Agreement
that devolves upon Tishman an express duty to review the accuracy or adequacy of the
structural engineer's work. A copy ofthe entire Tishman Agreement is attached hereto.
3. With regard to Commissioner Smith's inquiry of June 3, 1998, I would advise you that the
agreement with Tishman does not provide for liability for negligent supervision.
With regard to your question as to whether it should provide for such liability, I would advise
you that (1) upon a showing of proper facts, the RDA and City would always have an action
against Tishman for negligent supervision and/or breach of contract even without such a
provision, and (2) that any attempt to include such a provision may change Tishman's pricing
for its services. However, in the final analysis, it would appear to me that the inclusion of
such a provision is a business decision to be made by the Manager and/or the City
Commission.
Finally, with regard to your question as to whether the Tishman Agreement requires liability
insurance coverage, there is no such provision in the current contract and, again, I would
submit to you that the inclusion of such a provision would probably result in a higher price
for the services rendered, since the cost of such insurance would in all likelihood be passed
through to the RDA. Michael Meyer has advised me that Tishman has only obtained liability
insurance on one project, and that the insurance premium was about 12.5% of the insurance
obtained.
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F'\'\ nUlLEVL,I{O'Ttl'.LOEWSHOT.MHD
AGREEMENT BY AND BETWEEN
THE MIAMI BEACH REDEVELOPMENT AGENCY;
THE CITY OF MIAMI BEACH, FLORIDA;
AND
TISHMAN HOTEL CORPORATION
THIS AGREEMENT (the "Agreement") is dated as of November I, 1996 and is
by and between the MIAMI BEACH REDEVELOPMENT AGENCY (the "RDA"); the CITY
OF MIAMI BEACH, FLORIDA (the "City") (the RDA and the City collectively are referred to
herein as ,!'RDNCity"); and TISHMAN HOTEL CORPORATION, a Florida corporation
("Tishmah").
IN EXCHANGE for the mutual promises set forth herein, and other good and
valuable consideration, the receipt and adequacy of which is hereby conclusively acknowledged, the
parties agree as follows:
1. SCOPE OF SERVICES.
Tishman shall perform, in a professional and diligent manner, on behalf and
for the benefit of the RDNCity, the services described in Exhibit "A", which exhibit is attached
hereto and incorporated herein, as well as all other services reasonably inferable therefrom, provided,
however, that nothing in this Agreement is intended to impose on Tishman any responsibilities of
Loews Hotels Holding Corporation, its affiliates or consultants concerning the Hotel or Public
Garage. Those services shall be performed, as applicable, with regard to both (a) the Loews Miami
Beach Hotel project to be developed at or near 16th Street and Collins Avenue in Miami Beach,
Florida (the "Hotel") and (b) that certain public parking garage project to be developed at or near
16th Street between Collins and Washington Avenues in Miami Beach, Florida (the "Public
Garage") (collectively, the Hotel and Public Garage are referred to herein as the "Project"). In the
performance of its services in connection with this Agreement, Tishman shall take into account the
anticipated construction of the African-American owned hotel immediately to the south of the Hotel,
so that the construction of the Hotel and Public Garage may be reasonably integrated with the
African-American hotel when built. ~
Tishman and the RDNCity may negotiat~ in the future the engagement of
Tishman to serve as project manager in connection with the construction of the African-American
owned hotel immediately to the south of the Hotel.
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1. SCOPE OF SERVICES.
Tishman shall perform, in a professional and diligent manner, on behalf and
for the benefit of the RDNCity, the services described in Exhibit "A", which exhibit is attached
hereto and incorporated herein, as well as all other services reasonably inferable therefrom, provided,
however, that nothing in this Agreement is intended to impose on Tishman any responsibilities of
Loews Hotels Holding Corporation, its affiliates or consultants concerning the Hotel or Public
Garage. Those services shall be performed, as applicable, with regard to both (a) the Loews Miami
Beach Hotel project to be developed at or near 16th Street and Collins Avenue in Miami Beach,
Florida (the "Hotel") and (b) that certain public parking garage project to be developed at or near
l6th Street between Collins and Washington Avenues in Miami Beach, Florida (the "Public
Garage") (collectively, the Hotel and Public Garage are referred to herein as the "Project"). In the
performance of its services in connection with this Agreement, Tishman shall take into account the
anticipated construction of the African-American owned hotel immediately to the south of the Hotel,
so that the construction of the Hotel and Public Garage may be reasonably integrated with the
African-American hotel when built.
Tishman and the RDNCity may negotiat~ in the future the engagement of
Tishman to serve as project manager in connection with the construction of the African-American
owned hotel immediately to the south of the Hotel.
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2. TERM.
The term of this Agreement will begin on November I, 1996. Unless this
Agreement is terminated sooner pursuant to the terms of this Agreement, Tishman will cease to
render services under this Agreement after it has performed all services required under this
Agreement.
3. COMPENSATION.
a. Phase I
For services it renders pursuant to Phase I (defIned below) of this Agreement,
Tishman shall be paid a monthly fee of Thirty Three Thousand Dollars ($33,000.00). "Phase I" is
defined as any period of time during the term of this Agreement during which development and/or
construction work is being performed simultaneously on the Hotel and Public Garage.
".
b. Phase II
For services it renders pursuant to Phase II (defmed below) of this Agreement,
Tishman shall be paid a monthly fee of Nineteen Thousand Dollars ($19,000.00). "Phase II" is
defmed as any period of time during the term of this Agreement during which development and/or
construction work on the Hotel is being performed but development and/or construction work on the
Public Garage is not being performed.
c. Expenses
Tishman shall be reimbursed on a monthly basis for all reasonable out-of-
pocket expenses related to the Project, upon presentation by Tishman to the RDAlCity of
documentation of such expenses, satisfactory to the RDAlCity. Out-of-pocket expenses which may
be reimbursed include, but are not limited to, telephone hook up at the site trailer (which shall be
provided by the RDAlCity); rental charges for word processing, telephone and facsimile equipment;
cost of office supplies; long distance and mobile phone calls; blueprinting; and all travel related
expenses, provided, however, that all travel related expenses shall be in accordance \vith the
RDAlCity's travel procedures.
d. Manner of Pavment
The first of Tishman's monthly payments will be due within 7 days of
execution of this Agreement by all parties, and subsequent payments will be due on or about each
30 day anniversary thereafter.
2
e. Force Maieure
In the event of a temporary stoppage of work concerning the Hotel and/or the
Public Garage, including, without limitation, a stoppage of work due to force majeure, the
RDAlCity, each in its sole discretion, will have the right to direct Tishman to stop rendering services
and, in such event, Tishman will stop rendering services concerning the Hotel and/or the Public
Garage, as directed by the RDAlCity. During such time in which Tishman is temporarily not
rendering services, no compensation will be due Tishman concerning the Hotel and/or Public
Garage, as applicable. The RDAlCity, each in its sole discretion, can request additional services
from Tishman, pursuant to Section 19, "Additional Services", of this Agreement.
4. TERlvnNA TION.
The RDAlCity or Tishman can, each in its sole discretion, terminate this
Agreement at any time, with four (4) weeks WTitten notice. In the event of such termination,
Tishman'~. fee will be prorated as of the date of the termination notice, plus four (4) weeks. This
,
Section 4 (Termination) shall not apply in the case in which the RDAlCity terminates this
Agreement because Tishman has defaulted under the terms of this Agreement.
5. DEFAULTS.
Tishman shall be in default of this Agreement if Tishman fails to fulfill in a
timely manner or othernrise violates any of the provisions of this Agreement or if Tishman is placed
either in voluntary or involuntary bankruptcy, becomes insolvent, changes its majority ownership
(except as provided in Section 9 "Assignment"), or makes an assignment for the benefit of creditors.
In the event of such default, the RDAlCity shall be entitled to pursue all available legal and equitable
remedies.
6. CONFLICTS OF INTEREST.
Tishman agrees that neither it nor any entity which has "Common
Ownership" (as defined below) with Tishman will engage in any business relationship, enter into any
contract, or take or fail to take any action that would, in the sole discretion of the General Counsel
of the RDA and City Attorney, create a conflict of interest on the part of Tishman with regard to its
obligations under this Agreement. As used in this Agreement, an entity has "Common Ownership"
with Tishman if at least 10% of that entity is owned by an individual or entity which also owns at
least 10% of Tishman. If Tishman is uncertain as to whether its actions or inaction would cause a
conflict of interest, Tishman agrees to consult in advance with the General Counsel and City
Attorney who shall render an opinion subject to acceptance by the RDA Board/City Commission.
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7. O\VNERSHIP INTEREST.
Tishman agrees that neither it nor any entity which has Common Ownership
with Tishman will, for a period of nine (9) years from the date of this Agreement, obtain any
o\Vl1ership interest in or enter into any contractual or other business relationship with respect to the
Project except on behalf of or as a consultant to the RDNCity.
8. A TTORl"\TEYS' FEES AND COSTS.
In the event of any arbitration and/or litigation arising out of this Agreement,
the losing party shall pay the prevailing party's reasonable attorneys' fees and costs, at the trial and
all appellate levels.
9. ASSIGNMENT.
Except as provided in this Section 9 "Assignment", Tishman shall not assign,
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transfer or sub-contract this Agreement, any portion of this Agreement, or any work under this
Agreement without the prior written consent of the RDAlCity. Tishman shall have the right to
assign this Agreement to:
(a) any affiliate ("Affiliate") of Tishman who has the same parent as Tishman; or
(b) any entity ("Entity") in which Tishman's parent directly or indirectly O"MlS stock,
partnership or other equity interests and to which all or substantially all of the
development, construction and hotel consulting and/or management agreements to
which Tishman is a party are assigned or otherwise transferred,
provided that, with regard to (a) and (b) above, (i) officers of Tishman participate actively in the
senior management of the day-to-day business of the Affiliate or Entity, and (ii) the Affiliate or
Entity possesses at least the same construction, hotel, development and fInancial consulting
capabilities as Tishman currently has.
IO. PERt\1ITTED ASSIGNEES.
This Agreement is binding upon and inures to the benefit of permitted
assignees, consistent with Section 9 "Assignment" above.
11. EXCLUSIVE ARBITRATION AND/OR LITIGATION VENUE.
The exclusive venue for any arbitration and/or litigation between the parties,
arising out of or in connection with this Agreement, shall be Dade County, Florida.
4
12. ENTIRE AGREEMENT.
Except for that certain agreement dated as of May 15, 1996 by and between
the RDA, the City and Tishman concerning an African-American owned hotel project and a public
parking garage project, this document embodies the entire Agreement and understanding between
the parties hereto, and there are no other agreements or understandings, oral or written, that are not
merged herein and superseded hereby. The parties to this Agreement hereby confirm that certain
agreement by and between the RDA, the City, and Tishman, dated as of May 15, 1996, concerning
pre-construction matters relating to the Loews Hotels Holding Corporation Miami Beach Hotel
project and a public parking garage project has terminated.
13. NO MODIFICATION.
No change in the terms of this Agreement shall be valid unless made in
writing, signed by both parties hereto, and approved by the RDA/City Board.
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14.
GOVERNING LAW.
TIlls Agreement shall be governed by and construed in accordance with the
laws of the State of Florida.
15. LIMITATION OF LIABILITY.
The RDA/City desires to enter into this Agreement only if in so doing the
RDA/City can place a limit on the RDA/City's liability for any cause of action for money damages
due to an alleged breach by the RDA and/or the City of this Agreement, so that their liability for any
such breach never exceeds the sum of Six Htmdred Forty Two Thousand Dollars ($642,000.00).
Accordingly, and notwithstanding any other term or condition of this Agreement, except as set forth
in Section 16 (Exception to Limitation of Liability), Tishman and the RDA/City hereby agree that
neither the RDA nor the City shall be liable to Tishman for damages in an amount in excess of Six
Hundred Forty Two Thousand Dollars ($642,000.00), which amount shall be reduced by the amount
actually paid by the RDA/City to Tishman pursuant to this Agreement, for any action or claim for
breach of contract arising out of the performance or non-performance of any obligations imposed
upon the RDA and/or the City by this Agreement.
16. EXCEPTION TO LIMITATION OF LIABILITY.
Section 15 (Limitation of Liability) and Section 17 (Statutory Limitation of
Liability) shall not apply where Tishman seeks indemnification from the RDA/City and all of the
following criteria are present: (a) Tishman seeks indemnification from the RDA/City for losses
suffered by Tishman as a result of a lawsuit filed by a third party against Tishman relating to the
Project, (b) Tishman acted at the direction of the RDA/City, (c) Tishman was not negligent or
grossly negligent, and (d) Tishman did not perform with willful misconduct.
5
17. STATUTORY LIMITATION OF LIABILITY.
Nothing contained in this Agreement is in any way intended to be a waiver
of the limitation placed upon the RDA and/or the City's liability as set forth in Florida Statutes,
Section 768.28.
18. HEADINGS.
The headings in this Agreement are only for convenience, are not a
substantive part of this Agreement and shall not affect the meaning of any provision of this
Agreement.
19. ADDITIONAL SERVICES.
Tishman shall provide to the City and/or RDA, but only at the \vritten request
of the City or RDA, each in its sole discretion, additional services (defined below) regarding
,
development, construction, hospitality, fmancial or other matters concerning the Project.
"Additional services" are defined as those services that are not encompassed in (a) Exhibit "A",
attached hereto and incorporated herein, including, without limitation, services performed in
connection with arbitration and/or litigation and services to be performed in connection with a
casualty, or (b) that certain agreement, dated as of May l5, 1996, by and between the City, the
RDA and Tishman concerning an African-American owned hotel project and a public parking garage
project. For such additional services, Tislunan shall be paid at the standard hourly rate of the
respective Tishman employee, multiplied by 2.4.
20. INSURANCE AND INDEMNIFICATION.
The RDA/City shall insert a clause in each agreement with the general contractor and
each subcontractor concerning the Public Garage, which requires the general contractor or the
subcontractor, as applicable, to (a) name Tislunan as an additional insured under all insurance
policies relating to the Public Garage and (b) defend, indemnify and hold Tishman harmless from
all claims, demands, actions, suits and costs of any nature (including attorneys' fees and
disbursements) arising out of the general contractor's or subcontractor's involvement in the work
concerning the Public Garage.
The remainder of this page intentionally left blank.
6
IN \HTNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their appropriate officials, as of the date first entered above.
FOR REDEVELOPMENT AGENCY: REDEVELOPMENT AGENCY
By:
1~lc-u+ PeuctR
Robert Parcher, Secretary
By:
Seymo Gelber, Chairman
NPROvEo AS TO
FORM & LANGUAGe
,'zj 31 ~ l, & FOR EXECunON
ATTEST:
Date:
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Date:
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FOR CITY OF MIAMI BEACH:
CITY OF MIAMI BEACH ~f",
, Genere' COtJ~:
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Dote
By:
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Robert Parcher, City Clerk
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ATTEST:
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TISHMAN HOTEL CORPORATIONCity flY Oaf
FOR TISHMAN:
ATTEST:
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EXHIBIT A
PROJEcr MANAGEMENT
DESCRIPTION OF SERVICES
The falJowing services relate to both the Hotel and the Public Garage. However, as applied to the
Public Garage, the fullowing services are based UPOn the premise of. single lump sum CODt:lact being
awarded [0 a single general contractor On a non-liIst track basis, with the exception of demolition
work.
PRECONSTRUcnON lHASE
During the Pr_on phase, the goal of the Project Manager is to assist the Owner in the design
development process throughout cooceptUaJ, schematic and working d",wing production. By means
of continuous interaction with the Owner and the Architect, =ctive input is provided through
design and aystems review, value engineering, estimating, budgeting and scheduling.
The SCOpe of services to be provided during the Preconstructinn phase includes the fullowing:
A Plan Review. Value Enspneering and Budgeting
(I) Review plans and specifications developed by the ArchitecturallEngineering teams
and advise en practical alternates that may 5en'ice time and/or money. This
continuous activity is performed by TishnJan's in-house staff of Architectural,
Structural, Mechani~ Electrical, and Construction specialists throughout the
deveJoPJDent of the design drawings and specifications. These reviews generally
include:
(a) The analysis ofS)'Stems (mcluding components), materials, and equipment to
take advantage of current conditions in the construction market.
(b) Preparation of budgets of systems, assemblies, equipment and materials.
(c) Where appropriate, development of bidding altema!es on materials,
constniction techniques, fabrication and installation methods.
(2) Review design for adaptability to Staged construction, and early commitment for
purchase and fabrication of long-lead items.
(3) Review of design with respect to new and innovative developments wbich may
produce savings in time and/or money while maintaining or improving quality.
Page 1
labor-saving off-site fabrication and pre-assembly of building systems.
(5) Investigate., analyze and advise Owner of existing and projected labor availability in
key trades and review design to minimize allocation of work to less readily available
trades.
(6) Advise Owner of projected startS and CUITent pricing throughout the local area.
(7) Review the specifications for conformance with current trade practices and
appropriate allocation of equipment purchases and work assignments.
(8) Review that alternate systems, components. materials and techniques are fully
identified and specified so as to permit proper bidder response.
(9) ..~. Upon completion offinal plans and specifications, review same for completeness and
feasibility and ease of coordinated construction and coordinate all project related
permitting.
(10) Coofirm the Project's budget by developing with our own in-house estim~ring staff
a detailed independent cost review utilizing current market ~erience, current
subcontract cost and labor availability data. necessity for overtime, and forecasts of
escalation and contraction expiration and their effect through scheduled completion
of construction.
B. Project Planning
. Develop and utilize a project implementation plan to analyze requirements which may impact
the Project cost prior to bidding. Detail all such conditions in the bidding documentS before
the actual work commences in the field.
C. Proiect Scheduling
(1) Develop bar chart and milestone schedules which will highlight critical Owner's
decisions, identify long-lead items, and provide for their advance procurement.
(2) Identify requirements for off-hours work, overtime work programs, and shutdowns
so that such requirements may be addressed in the bid documentS.
(3) IdentifY opponunities for "fast-tracking"/accderaring the overall Project schedule and
evaluate costs and benefits of such strategies.
D. Bidding.
(1) Advise on jurisdictional assignments, labor agreement obligations, trade restrictions
Page :2
and local work practices.
(2) Review independent purchase bid packages on early purchase items. Confirm
inclusion in major trade i.nsta.llation packages all requirements for special receipt,
handling, and installation of materials and equipment to be furnished by others.
(3) Review complete list of bid packages for all materials and work, coordinated to
provide full assignment and responsibility for the work.
(4) Review and advise on bid format and instructions for each trade for proper response
to B~ Bids as well as specific alternate bids and competitive unit price.
E. Program Bidders List and Assist in Promotin2 Bidder Interest
(1),.,. Confirm the availability, reputation and capacity for reliable performan~ bondability
and such other data for the inclusion of Contractors on the Bid List.
(2) Participate in the interview of qualified contractors to induce and confirm their
interest in the bidding for effective competition.
(3) Review the recommended Bidders List for each major element of the work for
Owner's approval.
(4) Assist in the response to questions raised during bid period, including required pre-bid
conferences.
F. Bid Evaluation
(1) Evaluate Base Bids, Alternate Proposals. Unit Prices, and such other data as may be
pertinent.
(2) Review all cost proposals in relation to known local and current market for similar
work. TIShman's extensive in-house cost data and recent buyout information will be
utilized.
(3) Participate in meetings with bidders to discuss and understand their bids and proposed
approach so that they fit within the coordinated construction schedule. These
meetings will cover Project logistics, manpower and sequence of operation.
(4) Make a complete independent evaluation for Owner of the bids and post-bid
di.scussio~ COntractor selection, alternates to be accepted. unit prices to be included,
and make other recommendations as may be appropriate.
CONSTRUcnON PHA~
Page 3
The construction phase involvement of the Project Manager consists of a presence on-site to
represent the Owner in all matters relating to the consnucOon of the Project.
Specific activities to be provided are as follows:
(1) Provide an experienced field staff responsible for day-to-day administration of the
Project.
(2) Review and verifY General Contractor's construction cost estimates and aid in the
development ofUDit prices to be included in both base building and tenant fit-up work.
(3) Advise the Owner with respect to CODSttUction cost deviations frOIl1 base line budgets.
(4) Review all General. Contractor change orders to see if such change orders and the
;y' charges in connection therewith are appropriate.
(5) Review as appropriate all General ContraCtor's applications to Owner for progress
paymentS and final payment and make recommendations to the Owner with respect
to payment thereof:
(6) Review and advise Owner with respect to trade payment breakdowns.
(7) Review and advise Owner on Cost apportionment between Owner and Owner's
tecants on base building work and building standard fit-up work.
(8) Review as appropriate, General Contractor's progress schedules and advise Owner
with respect thereto and the impact of such schedules on Owner's other scheduled
activities or requirements.
(9) Review and advise Owner...nth respect to General Contractor's procedures for the
receipt, processing, approval and return of shop drawings, catalogs and samples.
(10) Monitor regulatory inspections and the adequacy of the General Contractor's
personnel and equipment and the: availability of necessary materials and supplies and
advise Owner of such action as may be necessary to maintain the progress schedule.
(11) NotifY CNmer or other quality control consultantS of any work which is believed not
to be in compliance with the plans and other contract dOCUIIlents.
(12) Attend job meetings with General Contractor. Owner, Architect and others as
nc:cessmy to coordinate work and resolve conflicts and provide r~ort.5 as a.ppropriate
with n.eces<>ary conune.nts on the iteti1s covered in the meetings.
(13) Recommend and, upon Owner's approval, retain on behalf of Owner such special
P.ge 4
consultants or inspectors as may be needed.
(14) Upon Owner's request, represent Owner in resolving conflicts or disputes with
General Contractor and suppliers.
POST CONSTRUcnON PHASE
Proiect Close-out
(1) HIe any notices of completion, certificates of occupancy, and acceptances.
(2) Oversee turnover of systems. waivers, guarantees and warranties, and as-built
drawings. Ensure training is performed.
(3). Make recommendations for fiBaI payment when all puncblists are complete, proper
documentation is turned over, and final waiver of lien is signed.
Page 5
AGREEMENTBYANDBET~EN
THE MIAMI BEACH REDEVELOPMENT AGENCY;
THE CITY OF MIAMI BEACH, FLORIDA;
AND
TISHMAN HOTEL CORPORATION
THIS AGREEMENT (the "Agreement") is dated as of November 1, 1996 and is
by and between the MIAMI BEACH REDEVELOPMENT AGENCY (the "RDA"); the CITY
OF MIAMI BEACH, FLORIDA (the "City") (the RDA and the City collectively are referred to
herein as "RDA/City"); and TISHMAN HOTEL CORPORATION, a Florida corporation
("Tishman").
IN EXCHANGE for the mutual promises set forth herein, and other good and
valuable consideration, the receipt and adequacy of which is hereby conclusively acknowledged, the
parties agree as follows:
1. SCOPE OF SERVICES.
Tishman shall perform, in a professional and diligent manner, on behalf and
for the benefit of the RDA/City, the services described in Exhibit "A", which exhibit is attached
hereto and incorporated herein, as well as all other services reasonably inferable therefrom, provided,
however, that nothing in this Agreement is intended to impose on Tishman any responsibilities of
Loews Hotels Holding Corporation, its affiliates or consultants concerning the Hotel or Public
Garage. Those services shall be performed, as applicable, with regard to both (a) the Loews Miami
Beach Hotel project to be developea at or near 16th Street and Collins Avenue in Miami Beach,
Florida (the "Hotel") and (b) that certain public parking garage project to be developed at or near
16th Street between Collins and Washington Avenues in Miami Beach, Florida (the "Public
Garage") (collectively, the Hotel and Public Garage are referred to herein as the "Project"). In the
performance of its services in connection with this Agreement, Tishman shall take into account the
anticipated construction of the African-American owned hotel immediately to the south of the Hotel,
so that the construction of the Hotel and Public Garage may be reasonably integrated with the
African-American hotel when built.
Tishman and the RDA/City may negotiate in the future the engagement of
Tishman to serve as project manager in connection with the construction of the African-American
owned hotel immediately to the south of the Hotel.
2. TERM.
The term of this Agreement will begin on November 1, 1996. Unless this
Agreement is terminated sooner pursuant to the terms of this Agreement, Tishman will cease to
render services under this Agreement after it has performed all services required under this
Agreement.
3. COMPENSATION.
a. Phase I
For services it renders pursuant to Phase I (defmed below) of this Agreement,
Tishman shall be paid a monthly fee of Thirty Three Thousand Dollars ($33,000.00). "Phase I" is
defined as any period of time during the term of this Agreement during which development and/or
construction work is being performed simultaneously on the Hotel and Public Garage.
b. Phase II
F or services it renders pursuant to Phase II (defmed below) of this Agreement,
Tishman shall be paid a monthly fee of Nineteen Thousand Dollars ($19,000.00). "Phase II" is
defmed as any period of time during the term of this Agreement during which development and/or
construction work on the Hotel is being performed but development and/or construction work on the
Public Garage is not being performed.
c. Expenses
Tishman shall be reimbursed on a monthly basis for all reasonable out-of-
pocket expenses related to the Project, upon presentation by Tishman to the RDAlCity of
documentation of such expenses, satisfactory to the RDAlCity. Out-of-pocket expenses which may
be reimbursed include, but are not limited to, telephone hook up at the site trailer (which shall be
provided by the RDAlCity); rental charges for word processing, telephone and facsimile equipment;
cost of office supplies; long distance and mobile phone calls; blueprinting; and all travel related
expenses, provided, however, that all travel related expenses shall be in accordance with the
RDAlCity's travel procedures.
d. Manner of Pavment
The first of Tishman's monthly payments will be due within 7 days of
execution of this Agreement by all parties, and subsequent payments will be due on or about each
30 day anniversary thereafter.
2
e. Force Maieure
In the event ofa temporary stoppage of work concerning the Hotel and/or the
Public Garage, including, without limitation, a stoppage of work due to force majeure, the
RDA/City, each in its sole discretion, will have the right to direct Tishman to stop rendering services
and, in such event, Tishman will stop rendering services concerning the Hotel and/or the Public
Garage, as directed by the RDA/City. During such time in which Tishman is temporarily not
rendering services, no compensation will be due Tishman concerning the Hotel and/or Public
Garage, as applicable. The RDA/City, each in its sole discretion, can request additional services
from Tishman, pursuant to Section 19, "Additional Services", of this Agreement.
4. TERMINATION.
The RDA/City or Tishman can, each in its sole discretion, terminate this
Agreement at any time, with four (4) weeks written notice. In the event of such termination,
Tishman's fee will be prorated as of the date of the termination notice, plus four (4) weeks. This
Section 4 (Termination) shall not apply in the case in which the RDAlCity terminates this
Agreement because Tishman has defaulted under the terms of this Agreement.
5. DEFAULTS.
Tishman shall be in default of this Agreement if Tishman fails to fulfill in a
timely manner or otherwise violates any of the provisions of this Agreement or if Tishman is placed
either in voluntary or involuntary bankruptcy, becomes insolvent, changes its majority ownership
(except as provided in Section 9 "Assignment"), or makes an assignment for the benefit of creditors.
In the event of such default, the RDAlCity shall be entitled to pursue all available legal and equitable
remedies.
6. CONFLICTS OF INTEREST.
Tishman agrees that neither it nor any entity which has "Common
Ownership" (as defined below) with Tishman will engage in any business relationship, enter into any
contract, or take or fail to take any action that would, in the sole discretion of the General Counsel
of the RDA and City Attorney, create a conflict of interest on the part of Tishman with regard to its
obligations under this Agreement. As used in this Agreement, an entity has "Common Ownership"
with Tishman if at least 10% of that entity is owned by an individual or entity which also owns at
least 10% of Tishman. If Tishman is uncertain as to whether its actions or inaction would cause a
conflict of interest, Tishman agrees to consult in advance with the General Counsel and City
Attorney who shall render an opinion subject to acceptance by the RDA Board/City Commission.
3
7. OWNERSHIP INTEREST.
Tishman agrees that neither it nor any entity which has Common Ownership
with Tishman will, for a period of nine (9) years from the date of this Agreement, obtain any
ownership interest in or enter into any contractual or other business relationship with respect to the
Project except on behalf of or as a consultant to the RDAlCity.
8. ATTORNEYS' FEES AND COSTS.
In the event of any arbitration and/or litigation arising out of this Agreement,
the losing party shall pay the prevailing party's reasonable attorneys' fees and costs, at the trial and
all appellate levels.
9. ASSIGNMENT.
Except as provided in this Section 9 "Assignment", Tishman shall not assign,
transfer or sub-contract this Agreement, any portion of this Agreement, or any work under this
Agreement without the prior written consent of the RDAlCity. Tishman shall have the right to
assign this Agreement to:
(a) any affiliate ("Affiliate") of Tishman who has the same parent as Tishman; or
(b) any entity ("Entity") in which Tishman's parent directly or indirectly owns stock,
partnership or other equity interests and to which all or substantially all of the
development, construction and hotel consulting and/or management agreements to
which Tishman is a party are assigned or otherwise transferred,
provided that, with regard to (a) and (b) above, (i) officers of Tishman participate actively in the
senior management of the day-to-day business of the Affiliate or Entity, and (ii) the Affiliate or
Entity possesses at least the same construction, hotel, development and fInancial consulting
capabilities as Tishman currently has.
10. PERMITTED ASSIGNEES.
This Agreement is binding upon and inures to the benefit of permitted
assignees, consistent with Section 9 "Assignment" above.
ll. EXCLUSIVE ARBITRATION AND/OR LITIGATION VENUE.
The exclusive venue for any arbitration and/or litigation between the parties,
arising out of or in connection with this Agreement, shall be Dade County, Florida.
4
12. ENTIRE AGREEMENT.
Except for that certain agreement dated as of May 15, 1996 by and between
the RDA, the City and Tishman concerning an African-American owned hotel project and a public
parking garage project, this document embodies the entire Agreement and understanding between
the parties hereto, and there are no other agreements or understandings, oral or written, that are not
merged herein and superseded hereby. The parties to this Agreement hereby confirm that certain
agreement by and between the RDA, the City, and Tishman, dated as of May 15, 1996, concerning
pre-construction matters relating to the Loews Hotels Holding Corporation Miami Beach Hotel
project and a public parking garage project has terminated.
13. NO MODIFICATION.
No change in the terms of this Agreement shall be valid unless made in
writing, signed by both parties hereto, and approved by the RDAlCity Board.
14. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Florida.
15. LIMITATION OF LIABILITY.
The RDAlCity desires to enter into this Agreement only if in so doing the
RDAlCity can place a limit on the RDAlCity's liability for any cause of action for money damages
due to an alleged breach by the RDA and/or the City of this Agreement, so that their liability for any
such breach never exceeds the sum of Six Hundred Forty Two Thousand Dollars ($642,000.00).
Accordingly, and notwithstanding any other term or condition of this Agreement, except as set forth
in Section 16 (Exception to Limitation of Liability), Tishman and the RDAlCity hereby agree that
neither the RDA nor the City shall be liable to Tishman for damages in an amount in excess of Six
Hundred Forty Two Thousand Dollars ($642,000.00), which amount shall be reduced by the amount
actually paid by the RDAlCity to Tishman pursuant to this Agreement, for any action or claim for
breach of contract arising out of the performance or non-performance of any obligations imposed
upon the RDA and/or the City by this Agreement.
16. EXCEPTION TO LIMITATION OF LIABILITY.
Section 15 (Limitation of Liability) and Section 17 (Statutory Limitation of
Liability) shall not apply where Tishman seeks indemnification from the RDAlCity and all of the
following criteria are present: (a) Tishman seeks indemnification from the RDAlCity for losses
suffered by Tishman as a result of a lawsuit filed by a third party against Tishman relating to the
Project, (b) Tishman acted at the direction of the RDAlCity, (c) Tishman was not negligent or
grossly negligent, and (d) Tishman did not perform with willful misconduct.
5
l7. STATUTORY LIMITATION OF LIABILITY.
Nothing contained in this Agreement is in any way intended to be a waiver
of the limitation placed upon the RDA and/or the City's liability as set forth in Florida Statutes,
Section 768.28.
l8. HEADINGS.
The headings in this Agreement are only for convenience, are not a
substantive part of this Agreement and shall not affect the meaning of any provision of this
Agreement.
19. ADDITIONAL SERVICES.
Tishman shall provide to the City and/or RDA, but only at the written request
of the City or RDA, each in its sole discretion, additional services (defined below) regarding
development, construction, hospitality, financial or other matters concerning the Project.
"Additional services" are defined as those services that are not encompassed in (a) Exhibit "A",
attached hereto and incorporated herein, including, without limitation, services performed in
connection with arbitration and/or litigation and services to be performed in connection with a
casualty, or (b) that certain agreement, dated as of May 15, 1996, by and between the City, the
RDA and Tishman concerning an African-American owned hotel project and a public parking garage
project. For such additional services, Tishman shall be paid at the standard hourly rate of the
respective Tishman employee, multiplied by 2.4.
20. INSURANCE AND INDEMNIFICATION.
The RDNCity shall insert a clause in each agreement with the general contractor and
each subcontractor concerning the Public Garage, which requires the general contractor or the
subcontractor, as applicable, to (a) name Tishman as an additional insured under all insurance
policies relating to the Public Garage and (b) defend, indemnify and hold Tishman harmless from
all claims, demands, actions, suits and costs of any nature (including attorneys' fees and
disbursements) arising out of the general contractor's or subcontractor's involvement in the work
concerning the Public Garage.
The remainder of this page intentionally left blank.
6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their appropriate officials, as of the date first entered above.
FOR REDEVELOPMENT AGENCY: REDEVELOPMENT AGENCY
CITY OF MIAMI BEACH~
. Generc' Coum..::
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By:
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TISHMAN HOTEL CORPORATION ., Dc
ATTEST:
By:
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Robert Parcher, Secretary
By:
Date: I 2-1 31 ~ 1.0
Date:
FOR CITY OF MIAMI BEACH:
ATTEST:
By:
Ko~>rfM~
Robert Parcher, City Clerk
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Date:
Date:
FOR TISHMAN:
ATTEST:
By: (~cy~
Secret
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EXHIBIT A
PROJECT MANAGEMENT
DESCRIPTION OF SERVICES
The fcHewing seMees relate to both the Hotel and the Public Garage. However, as applied to the
Publie Garage, the fullowing SClVices are besed upon the premise of. single lump sum contract being
awarded to a single genera] COntractor on a non-M track basis, ,..;u, the exception of demolition
work:.
PRECONSTRUCITON PRAsE
During the Preconstroction phase, the goal of the Prqjecr Maoager is to assist the Owner in the design
development process througbout conceptual, schematic: and worlcing drawing production. By means
of continuous interaction with the Owner and the Architect, constructive input is provided through
design and systems review, value engineering, estim.ting. budgetiDg and scheduling.
The SCOpe of services to be provided during the Preconstruction phase includes the fuDowing:
A Plan Review. Value Enspneering: and Budsretin2
(I) Review plans and specifications developed by the ArchitecturaJlEngineering teams
and advise cn practical alternates that may service time and/or money. This
continuous activity is performed by Tishman' s in-house staff of Architectural,
Stru~ Mechanical. Electrical. and Construction specialists throughout the
devdoPIDent of the design drawings and SJlCCi1ications. These r..;ews generally
include:
(a) The analysis ofsystcms (mc1uding COI11ponents). materials, and equipment to
take advantage of current conditions in the construction market.
(b) Preparation of budgetS of systems, assemblies, equipment and materials.
(c) Where appropriate, development of bidding alternates on materials,
constniction techniques, fabrication and installation methods.
(2) Review design for adaptability to staged CODstIUction, and early commitment for
purc:base and fabrication oflong-]ead items.
(3) Rev;ew of design with respect to new and innovative devdopments which may
produce savings in time and/or money while maintaining or improving quality.
Page 1
labor-saving off-site fabrication and pre-assembly of building systems.
(5) Investigate, analyze and advise Owner of existing and projected labor availability in
key trades and review design to minimize allocation of work to less readily available
trades.
(6) Advise Owner of projected starts and current pricing throughout the local area.
(7) Review the specifications for conformance with current trade practices and
appropriate allocation of equipment purchases and work assignments.
(8) Review that alternate systems, components, materials and techniques are fully
identified and specified so as to permit proper bidder response.
(9) Upon completion offinal plans and specifications, review same for completeness and
feas10ility and ease of coordinated construction and coordinate all project related
permitting.
(10) Confirm the Project's budget by developing with our own in-house estim::.ting staff
a detailed independent cost review utilizing current market ~erience, current
subcontract cost and labor availability data, necessity for overtime, and forecastS of
escalation and contraction expiration and their effect through scheduled completion
of construction.
B. Proiect Planning
. Develop and un1ize a project imple1Tlenntlon plan to analyze requirements which may impact
the Project cost prior to bidding. Detail all such conditions in the bidding documentS before
the actUal work commences in the field.
C. Prqject Scheduling
(1) Develop bar chart and milestone schedules which will highlight critical Owner's
decisions., identify long-lead items, and provide for their advance procurement.
(2) Identify requirements for off-hours work, overtime work programs, and shutdoVlIls
so that such requirements may be addressed in the bid documentS.
(3) Identify opportunities for "fast-tracking"taccderaring the overall Project schedule and
evaluate' costs and benefits of such strategies.
D. Biddin~
(1) Advise on jurisdictional assignments, labor agreement obligations, trade restrictions
Page 2
and local work practices.
(2) Review independent purchase bid packages on early purchase items. Confirm
inclusion in major trade installarion packages all requirements for special receipt,
handling, and installation of materials and equipment to be furnished by others.
(3) Review complete list of bid packages fur all materials and work, coordinated to
provide full assignment and responsibility for the work.
(4) Review and advise on bid format and instructions for each trade for proper response
to B~ Bids as well as specific alternate bids and competitive unit price.
E. Program Bidders List and Assist in Promotin2 Bidder Interest
(1) Confirm the availability, reputation and capacity for reliable pcrforman~ bondability
and such other data for the-inclusion of Contractors on the Bid List.
(2) Participate in the interview of qualified contractors to induce and confirm their
interest in the bidding for effective competition.
(3) Review the recommended Bidders List for each major element of the work for
Owner's approval.
(4) Assist in the response to questions raised during bid period, including required pre-bid
conferences.
F. Bid Evaluation
(1). Evaluate Base B~ Alternate Proposals, Unit Prices, and such other data as may be
pertinent.
(2) Review all cost proposals in relation to knO'WD local and current market for similar
work. TIShman's ~ensive in-house cost data and recent buyout information will be
Uf11i7...n
(3) Participate in meetings with bidders to discuss and undet-stand their bids and proposed
approach so that they fit within the coordinated construction schedule. These
meetings will cover Project logistics, manpower and sequence of operation.
(4) Make a complete independent evaluation for Owner of the bids and post-bid
discussio~ contractor selection, alternates to be accepted, unit prices to be included,
and make other recommendations as may be appropriate.
CONSTRUCTION PHASE
Page 3
The construction phase involvemeDt of the Project Manager consists of a presence on-site to
represent the Owner in all matters relating to the constrUction of the Project.
Specific activities to be provided are as follows:
(1) Provide an experienced field staff responsible for day-to-day administration of the
Project.
(2) Review and verify General Contractor's construction cost estimates and aid in the
devdopment ofunit prices to be included in both base building and tenant fit-up work.
(3) Advise the Qwnerwith respect to constrUction cost deviations from base line budgets.
(4) Review all Gene:iGl Contractor change orders to see if such change orders and the
charges in connection therewith are appropriate.
(5) Review as appropriate all General ContraCtor's applications to Owner for progress
paymentS and final payment and make recoInIPCD.dations to the Owner with respect
to payment thereof:
(6) Review and advise Owner with respect to trade payment breakdowns.
(7) Review and advise Owner on Cost apportionment betWeen Owner and Owner's
tenants on base building worle and building standard fit-up work.
(8) Review as appropriate, General ContraCtor's progress schedules and advise Owner
with respect thereto and the impact of such schedules on Owner's other scbPliuled
activities or requirements.
(9) Review and advise Owner with respect to General Contractor's procedures for the
receipt. processing, approval and return of shop drawings, catalogs and samples.
(10) Monitor regulatory inspections and the adequacy of the General Contractor's
personnel and equipment and the availability of necessary materials and ~pplies and
advise Owner of such action as may be necessary to maintain the progress schedule.
(11) Notify Owner or other quality control consultantS of any work which is believed not
to be in compliance with the plans and other contract documents.
(12) Attend job meetings with General Contractor, Owner, Architect and others as
necessary to coordinate work and resolve conflicts and provide r9'orts as appropriate
with necessary comments on the iterl1s covered in the meetings.
(13) Recommend and, upon Owner's approval, retain on behalf of Owner such' special
p.ge 4
consultants or inspectors as may be needed.
(14) Upon Owner's request, represent Owner in resolving conflicts or disputes with
General Contractor and suppliers.
POSTCONSTRUC1aONPBASE
Proiect Close-out
(1) File any notices of completion, certificates of occupancy. and acceptances.
(2)' Oversee turnover of systems. waivers, guarantees and warranties, and as-built
drawings. Ensure training is performed.
(3) Make recommendations for final payment when all puncblists are complete, proper
documentation is turned over, and final waiver of lien is signed.
Pag. 5
RESOLUTION NO.
255-96
A RESOLUTION OF THE CHAIRMAN AND MEMBERS OF
THE MIAMI BEACH REDEVELOPMENT AGENCY
AUTHORIZING THE CHAIRMAN AND SECRETARY TO
EXECUTE THE AGREEMENT, ATTACHED HERETO AND
INCORPORATED HEREIN, BY AND BETWEEN THE CITY
OF MIAMI BEACH, THE MIAMI BEACH
REDEVELOPMENT AGENCY AND TISHMAN HOTEL
CORPORATION, PERTAINING TO PROJECT
MANAGEMENT SERVICES REGARDING THE
DEVELOPMENT AND CONSTRUCTION OF THE LOEWS
MIAMI BEACH HOTEL PROJECT AND THE 16TH STREET
PUBLIC PARKING GARAGE PROJECT.
WHEREAS, the City of Miami Beach (the "City"), the Miami Beach Redevelopment
Agency (the "RDA") and MB Redevelopment, Inc., an affiliate of Loews Hotels Holding
Corporation, have executed agreements pertaining to the development and construction of the Loews
Miami Beach Hotel project (the "Hotel") and the 16th Street public parking garage project (the
"Public Garage"); and
WHEREAS, construction has commenced with regard to the Hotel and will commence in
the near future concerning the Public Garage; and
WHEREAS, the combined development costs of these projects, not including land
acquisition, is over $120,000,000.00; and
\VIIEREAS, these construction projects ure :;igr...ificu."1t in terms of their cost, size, impact
on the local economy and other matters; and
WHEREAS, the RDA needs to take steps to ensure that development and construction are
proceeding consistent with the agreements, including, but not limited to, in accordance with the
agreed upon quality standards pertaining to the Hotel; and
WHEREAS, the RDA administration believes that it would be in the best interests of the
RDA to hire an experienced construction firm to represent the interests ofthe RDA in connection
with the development and construction of the Hotel and Public Garage; and
WHEREAS, the administration has negotiated the agreement, which is attached hereto and
incorporated herein, by and between the City, the RDA and Tishman Hotel Corporation
(ltTishmanlt), for the provision by Tishman to the City and the RDA of project management services
in connection with the development and construction of the Hotel and Public Garage; and
WHEREAS, Tishman is a prominent and sophisticated corporation in the construction and
hospitality fields; and
WHEREAS, Tishman is well suited to serve as project manager on these projects because,
among other things, Tishman has significant knowledge concerning these projects due to its
representation of the City and the RDA for approximately the last two years in connection with,
among other things, the negotiation of detailed agreements, and the review of plans and
specifications concerning the Hotel and Public Garage.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE CHAIRMAN AND
MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY that:
1. The Chairman and Secretary are authorized to execute the agreement, attached hereto
and incorporated herein, by and between the City, the RDA and Tishman Hotel Corporation,
pertaining to project management services regarding the development and construction of the Loews
Miami Beach Hotel project and the 16th Street public parking garage project.
2. This Resolution shall take effect immediately upon its adoption.
PASSED and ADOPTED this 20th
November
, 1996.
ATTEST:
sg~1y f~
AllIkw
f:\atto\taca \resos\tishownr. rda
FORM APPROVED
REDEVELOPMENT AGENCY
GENERAL COUNSEL
By.~/~
Date /c1/~/!6
2
Miami Beach
Redevelopment Agency
1700 Convention Center Drive
Miami Beach, Florida 33139
Telephone: (305) 673-7193
Fax: (305) 673-7772
REDEVELOPMENT AGENCY MEMORANDUM NO. 96-32
DATE: November 20, 1996
TO: Chair.man and Members of the Board
of the Miami Beach Redevelopment Agency
FROM: Jose Garcia-Pedrosa
Executive Director
SUBJECT: A RESOLUTION OF T CHAIRMAN AND MEMBERS OF THE MIAMI
BEACH REDEVELOPMENT AGENCY AUTHORIZING THE CHAIRMAN AND
SECRETARY TO EXECUTE THE AGREEMENT, ATTACHED HERETO AND
INCORPORATED HEREIN, BY AND BETWEEN THE CITY OF MIAMI:
BEACH, THE MIAMI: BEACH REDEVELOPMENT AGENCY AND TISHMAN
HOTEL CORPORATION PERTAINING TO PROJECT MANAGEMENT
SERVICES REGARDING THE DEVELOPMENT AND CONSTRUCTION OF
THE LOEWS M:IAMI: BEACH HOTEL PROJECT AND THE 16TH STREET
PUBLIC PARKING GARAGE PROJECT.
ADMINISTRATION RECOMMENDATION:
It is recommended that the City Commission and the Redevelopment
Agency approve the resolution.
BACKGROUND :
Pursuant to the executed contract agreements by and between the
City of Miami Beach, (the "City"), the Miami Beach Redevelopment
Agency (the "RDA") and MB Redevelopment, Inc., an affiliate of
Loews Hotels Holding Corporation, construction has commenced on
the Loews Miami Beach Hotel project and is expected to begin on the
16th Street public parking garage project by early next year.
The combined development costs of these projects, not including
land acquisition is over $120,000,000. Due to the magnitude and
importance of the projects, the RDA needs to take steps to ensure
that the development and construction of the projects proceed in
accordance with the terms of the agreements, including, but not
limited to, the agreed upon quality standards pertaining to the
Hotel.
S()UTti P()I~
~edevel()pment [)lstJict
Cln' C~~I)
l)edevel()pment [)istrict
AGENDA ITEM 3-A
NOVEMBER 20, 1996
ANALYSIS
The RDA administration believes that it would be in the best
interests of the RDA to hire an experienced construction firm to
represent the interests of the RDA in connection with the
development and construction of the two projects. To this end,
the administration has negotiated the attached agreement between
the City, the RDA and Tishrnan Hotel Corporation ("Tishrnan"), for
Tishrnan to provide project management services, representing the
City and the RDA.
Tishrnan is well suited to serve in this capacity due to its
extensive background in the hospitality industry, as well as its
intimate knowledge concerning these specific projects, and its
representation of the City and the RDA for approximately the last
two years in connection with, among other things, the negotiation
of detailed agreements, and the review of plans and specifications
concerning the hotel and public garage.
A key success factor on the Loews transaction was the depth and
breadth of Tishrnan's technical expertise that could be tapped into
at any time. Tishman Construction is an internationally renowned
construction firm almost 100 years old which has built scores of
hotels and garages and, therefore, is fully prepared to handle any
contingency. There are many project management firms, but few with
comparable experience, and none with the project knowledge that
enables them to effectively deal with Loews, Lehrer, McGovern,
Bovis, Inc. (LMB), and general contractors to reduce the risk of
unfavorable substitutions and changes and budget or schedule
overruns.
The fee paid to Tishrnan is different during the two phases of the
construction proj ect. During the period of both the Hotel and
Garage, the monthly fee will be $33,000. For the duration of the
project in which only the Hotel will be under construction, the
monthly fee will be $19,000.
The Administration anticipates that the total hotel and garage
construction phase will last twenty-two months. The current
schedule anticipates a sixteen month schedule for the garage with
an additional six months of Hotel construction only. The total fee
to be paid for this twenty-two month schedule is $642,000. There
will also be a provision in the agreement for additional services
at the option of the City and the RDA. The contract terms reached
with Tishrnan are well within industry standards and represent a
reduction from Tishman's typical fees and their original proposal.
The contract may be terminated by the City/RDA at its sole
discretion with a four (4) week notice.
CONCLUSION
The Administration recommends authorizing execution of the contract
with Tishman Hotel Corporation. Over the course of the past two
years, Tishman has built a track record of professionalism,
success, and integrity. Tishman has consistently been right on the
mark in flagging problems. They have deservedly earned the trust
of the City.
~
JGP/HM:kob
Attachments
)
RESOLUTION NO.
96-22207
A RESOLUTION OF THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA
AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE THE AGREEMENT, ATTACHED HERETO AND
INCORPORATED HEREIN, BY AND BETWEEN THE CITY
OF MIAMI BEACH, THE MIAMI BEACH
REDEVELOPMENT AGENCY AND TISHMAN HOTEL
CORPORATION, PERTAINING TO PROJECT
MANAGEMENT SERVICES REGARDING THE
DEVELOPMENT AND CONSTRUCTION OF THE LOEWS
MIAMI BEACH HOTEL PROJECT AND THE 16TH STREET
PUBLIC PARKING GARAGE PROJECT.
WHEREAS, the City of Miami Beach (the "City"), the Miami Beach Redevelopment
Agency (the "RDA") and MB Redevelopment, Inc., an affiliate of Loews Hotels Holding
Corporation, have executed agreements pertaining to the development and construction of the Loews
Miami Beach Hotel project (the "Hotel") and the 16th Street public parking garage project (the
"Public Garage"); and
WHEREAS, construction has commenced with regard to the Hotel and will commence in
the near future concerning the Public Garage; and
WHEREAS, the combined development costs of these projects, not including land
acquisition, is over $120,000,000.00; and
',VI-IEREAS, these construction projects are significant in terms of their cost, size, impact
on the local economy and other matters; and
WHEREAS, the City needs to take steps to ensure that development and construction are
proceeding consistent with the agreements, including, but not limited to, in accordance with the
agreed upon quality standards pertaining to the Hotel; and
WHEREAS, the City administration believes that it would be in the best interests of the City
to hire an experienced construction firm to represent the interests of the City in connection with the
development and construction of the Hotel and Public Garage; and
WHEREAS, the administration has negotiated the agreement, which is attached hereto and
incorporated herein, by and between the City, the RDA and Tishman Hotel Corporation
(ltTishmanlt), for the provision by Tishman to the City and the RDA of project management services
in connection with the development and construction of the Hotel and Public Garage; and
WHEREAS, Tishman is a prominent and sophisticated corporation in the construction and
hospitality fields; and
WHEREAS, Tishman is well suited to serve as project manager on these projects because,
among other things, Tishman has significant knowledge concerning these projects due to its
representation of the City and the RDA for approximately the last two years in connection with,
among other things, the negotiation of detailed agreements, and the review of plans and
specifications concerning the Hotel and Public Garage.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA that:
1. The Mayor and City Clerk are authorized to execute the agreement, attached hereto
and incorporated herein, by and between the City, the RDA and Tishman Hotel Corporation,
pertaining to project management services regarding the development and construction of the Loews
Miami Beach Hotel project and the 16th Street public parking garage project.
2. This Resolution shall take effect immediately upon its adoption.
PASSED and ADOPTED this 20th
November
, 1996.
ATTEST:
~oLcu~ -pa,L~
CLERK
FOHM APPROVED
lEGAL ~
By IUI ij1J
Date J 6/ ~J '1 /:'
AI1\kw
f: lattoltaca Iresosltishownr. res
2
CITY OF
MIAMI
BEACH
~
~
CITY HALL 1700 CONVENTION CENTER DRIVE' MIAMI BEACH FLORIDA 33139
COMMISSION MEMORANDUM NO. ~
TO:
Mayor Seymour Gelber and
Memben of the City Commission
DATE: November 20. 1996
FROM:
Jose Garcia-Pedrosa
City Manager
SUB.JECf:
A RESOLUTIO THE MAYOR AND MEMBERS OF THE CITY
COMMISSION ORIZING THE MAYOR AND CITY CLERK TO
EXECUTE THE AGREEMENT, ATTACHED HERETO AND INCORPORATED
HEREIN, BY AND BETWEEN THE CITY OF MIAMI BEACH, THE
MIAMI BEACH REDEVELOPMENT AGENCY AND TISHMAN HOTEL
CORPORATION PERTAINING TO PROJECT MANAGEMENT SERVICES
REGARDING THE DEVELOPMENT AND CONSTROCTION OF THE LOEWS
MIAMI BEACH HOTEL PROJECT AND THE 16TH STREET PUBLIC
PARKING GARAGE PROJECT.
ADMINISTRATION RECOMMENDATION:
It is recommended that the City Commission and the Redevelopment
Agency approve the resolution.
BACKGROUND:
Pursuant to the executed contract agreements by and between the
City of Miami Beach, (the "City"), the Miami Beach Redevelopment
Agency (the "RDA") and MB Redevelopment, Inc., an affiliate of'
Loews Hotels Holding Corporation, construction has commenced on
the Loews Miami Beach Hotel project and is expected to begin op the
16th Street public parking garage project by early next year.
The combined development costs of these projects, not including
land acquisition is over $120,000,000. Due to the magnitude and
importance of the projects, the City needs to take steps to ensure
that the development and construction of the projects proceed in
accordance with the terms of the agreements, including, but not
limited to, the agreed upon quality standards pertaining to the
Hotel.
AGENDA ITEM r\ '1 fA.
DATE~
ANALYS:IS
The City administration believes that it would be in the best
interests of the City to hire an experienced construction firm to
represent the interests of the City and RDA in connection with the
development and construction of the two projects. To this end,
the administration has negotiated the attached agreement between
the Ci ty, the RDA and Tishman Hotel Corporation (" Tishman" ), for
Tishrnan to provide project management services, representing the
City and the RDA.
Tishrnan is well suited to serve in this capacity due to its
extensive background in the hospitality industry, as well as its
intimate knowledge concerning these specific projects, and its
representation of the City and the RDA for approximately the last
two years in connection with, among other things, the negotiation
of detailed agreements, and the review of plans and specifications
concerning the hotel and public garage.
A key success factor on the Loews transaction was the depth and
breadth of Tishman's technical expertise that could be tapped into
at any time. Tishman Construction is an internationally renowned
construction firm almost 100 years old which has built scores of
hotels and garages and, therefore, is fully prepared to handle any
contingency. There are many project management firms, but few with
comparable experience, and none with the project knowledge that
enables them to effectively deal with Loews, Lehrer, McGovern,
Bovis, Inc. (LMB), and general contractors to reduce the risk of
unfavorable substitutions and changes and budget or schedule
overruns.
The fee paid to Tishman is different during the two phases of the
construction project. During the period of both the Hotel and
Garage, the monthly fee will be $33,000. For the duration of the
project in which only the Hotel will be under construction, the
monthly fee will be $19,000.
The Administration anticipates that the total hotel and garage
construction phase will last twenty-two months. The current
schedule anticipates a sixteen month schedule for the garage with
an additional six months of Hotel construction only. The total fee
to be paid for this twenty-two month schedule is $642,000. There
will also be a provision in the agreement for additional services
at the option of the City and the RDA. The contract terms reached
with Tishrnan are well within industry standards and represent a
reduction from Tisbrnan's typical fees and their original proposal.
The contract may be terminated by the City/RDA at its sole
discretion with a four (4) week notice.
CONCLUSION
The Administration recommends authorizing execution of the contract
with Tishman Hotel Corporation. Over the course, of the past two
years, Tishman has built a track record of professionalism,
success, and integrity. Tishman has consistently been right on the
mark in flagging problems. They have deservedly earned the trust
of the City.
~
JGP/HM:kob
Attachments
JUN 19 '98 15:52
FRO'1 LOEWS HOTELS
TO 913056737782
P~E. 1302
DRAFT FOR. APPROVAL
LOEWS HOTELS AND mE CITY OF MIAMI BEACH
,ANNOUNCE RESULTS OF 1WO INDEPENDENT REVIEWS
REGARDING THE SfRUCTURAL ENGINEERING DESIGN
OF LOEWS MIAMI BEACH HOTEL
No Chan~ Anticipated in the hotel's p~jAMM Soft Openin, Date
NEW YORK, NY - June 19, 1998 - Further to two independent reviews of the sttuCUlral design of
Loews Miami B<:ach Hotel. additional work will be necessary to the ~ctural design of the buDding.
Based. on the scope of the remedial work identified, and, subject to the permitting process. it is
antidpated that the soft opening date in October will not be impacted.
'I'b~ two revicW$ W(:l"(: brought about in r~ponse to concerns raised by the recent inquiry of four
projects which bad been de$igned by Riva Timmons Klein, which has been under scrutiny since it was
revealed that one of the firm's projects near Dadeland had structUral flaws.
The remedial work necessary is In limited, isolated areas of the building with the ~ateraJ wind system
and their frames, whic:h are required considering the possibility of a major hurricane.
Through me peer reviews, a system of repairs has been identified to correct
the framing systems to ensure that it complies with the current South Florida Building Codes.
To provide an additional measure of assurance. Loews Hotels has also r(:tained Cbicago-based Wiss
Janney Elstner Associates. Inc.. to conduct a peer review of the design plans and specifications for
the remedial work.
- more -
JUN 19 '98 15;52
FROM LOEWS HOTELS
TO 913056737782
PFOE. 003
-2-
"Weare coDfident that the changes being made iI3 a result of these reviews will ensure that aU
appropriate codes. and requirements are met." said Marc Shapiro, Senior Vice Pregident of Fa<;ilities
for I..oews Hotels. "Now that we have determined what changes need to be made, we can now move
forward on making the remediatiOI1$ in a timely manner, and to opening the botel this Fall. We aro
also appreciative of the City of Miami Beach's efforts to initiate the peer review. and for their support
throughout the prOl;ClSS. And, we are also grateful for the work that Hetbett Gopman has done in
conducting his analysis as well. ·
The anticipattd costs, which will be assumed by the developer, are estimated to range between ODe to
two nrlIlion dollars. The two independent reports were conducted by a local firm, Gopman &.
Associates, which was hired by the City of Miami Beach, and by Ysrael A. Seinuk. which was
retained by Loews Hotels.
Located on Collins Avenue and 1&11 Street, Loews Miami Beach Hotel is a public/private partnership
with the City of Miami Beach. The SOO-room project includ~ the r~lOration of the landmark St.
Moritz Hotel, and construction of a new 17.story tower_
III
CONTACT: Debra Kelman
(212) 521-2833
** TOTAL PAGE.003 **
JUN 19 '98 15:52
FROM LOEWS HOTELS
TO
Those Concetned
FROM
Debra Kelman
DATE
June 19, 1998
SUB-'ECT
RELEASE
r---~-- --~ l
'I lE'. )1,
~-' -- -=-- -
TO 913056737782
PAGE. 12101
Attached is the draft of the release for your review. Please call with any comments or changes.
'Ib.aDk you.
Tbose C~
Jack Adler
Marc Shapiro
AI Cardenas
limy Mavrogenes
Bruce Rubin
,-~
--