149-1998 LTC
CIT'V OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
http:\\cLmiami-beach,fl.us
L T C N 149-1998
. . . o.
LETTER TO COMMISSION
October 21, 1998
TO: Mayor Neisen O. Kasdin and
Members of the City Co ission
FROM: Sergio Rodriguez
City Manager
SUBJECT: STATUS OF 16TH STREET GARAGE
Attached, please find a status report prepared by Tishman on the 16th Street garage as requested at
the October 7, 1998 City CommissionlRDA meeting. The contractor, developer, project architect,
owner's representative and City staff have been meeting daily to address all pending issues affecting
the opening date ofthe garage. These meetings have enabled us to closely monitor any impediments
and prioritize action necessary to effectuate the opening ofthe garage prior to the hotel's completion
date. As we reported at the Commission Meeting today, Beauchamp, the contractor, is targeting a
substantial completion (TCO) date of October 30, 1998; however, Loews (developer), Zyscovich
(project architect), Tishman ( owner's representative) and City staff do not believe that Beauchamp
will be able to obtain the TCa within the projected time frame and feel a more realistic date of
November 15, 1998 is likely.
Please advise if you would like a more detailed briefing and/or if you have any questions.
SR:CMC/jph
r>>Y
Attachment
c: Murray Dubbin, City Attorney
Lawrence Levy, First Assistant City Attorney
-rBHMAN
FROM: Michael Meyer
TO: Christina CUelVO
Assistant City Manager
City of Miami Beach
Miami Beach. Fl.
FAX#: (305) 673-7782
DATE: October 20, 1998
PAGES: S
Following is fax re Garage construction....
cc: Kent Bonde
David Cates
Pat D' Addio
Bernard Zyscovich
Larry Levy
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Tishm<1n
Hold
Corporation
October 20, 1998
Ms. Christina Cuervo
Assistant City Manager
City of Miami Beach
Miami Beach, FL
Dear Christina,
At your request, I am writing to clarifY some of the issues and questions raised about the Garage construction
during the most recent Commission hearing
Project BackgroUnd
Construction on the 16th StreetGarage broke ground on June 2 1997, following a competitive bidding process
which resulted in the award ofa lump sum contract to Beauchamp Construction Company. Pursuant to the
terms oCthe garage development agreement, St. Moritz Hotel Corp. (Loews) was designated as the developer
charged with direct management of the project on behalf of the owner, the Redevelopment Agency. This
arrangement was negotiated as a result of the heightened sensitivity Loews had about the risk they would incur if
the Garage were not to be completed in time for the hotel opening. As developer, Loews could coordinate the
construction and maintain a greater degree of control. Tishman was later retained by the Redevelopment Agency
to serve as an Owner's Representative to provide, as Murray nubbin's memo of October 7 to the Mayor and
Commission summarizes, "review and advice on monetary items, construction methods, and project
scheduling". Loews was further charged with the role of leasing agent for the retail space in the garage out of a
mutual concern ~etween the Redevelopment Agency and Loews for the caliber of tenants that would locate
across from the hotel.
Project Status
I called a meeting on September 9. Harry Mavrogenes' last day on the job and your first, to review issues and
coordinate the transition with Loews and the Redevelopment Agency. During that meeting Harry signed change
order number 57 which had been heavily negotiated by Loews, Tishman. and Beauchamp representatives to
close-out all open change orders to that date in time. We anticipated a small number of change orders after that
point to complete some remaining work but it was seen as mostly mop-up and not a threat to the remaining
$228,000 contingency. Part ofthe settlement of the change order involved an extension of the contractual
completion date of October 2, 1998 by two weeks to October 16. The contract provides that the contractor has
30 days after obtaining of the temporary certificate (TeO) of completion date to complete punch list items and
obtain a Certificate of Occupancy (CO) after which time $1,000 a day in liquidated damages must be paid by the
Tishm:m Hotel COlpOtation 666 Fifth Avt:nue. New York, NY 10103.0256 (212) 399-3600 Fax (212) 262-0037
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contractor until the CO is granted.
As part of the settlement, Beauchamp agreed to certain milestones to complete the work - substantial completion
of the Garage and Collins retail by October 16, 16th street retail by October 24 and Washington retail by
November 1. During the meeting I expressed the concern that we would lose out leverage to get Beauchamp to
perform on a timely basis since this has been a problem throughout the course of the project. It was agreed that
Harry would sign the change order and you would hold it and release it upon demonstration of performance and
the correction of the dollar value of Beauchamp's total contract. Our report to the Commission was prepared
two weeks later and incorporated the milestone dates we believed we had locked-in. Since that time, the
Redevelopment Agency's project team has been frustrated by delays in the performance of work which was the
basis of Pat D' Addio's exasperated comments to the Commission the other week.
An added factor in the recent delay has been the emergence of several unforseen conditions at the time of the
settlement change order. Among the major items are ~
1. Sewer Line/Grease Traps
In late September, Redevelopment Agency staff and Tishman
became aware that the plumbing contractor had improperly
installed the sanitary sewers in the building.
Remediation work is now underway and expected to
be complete by October 23.
2. WJl1dow Permit
Beauchamp has failed to obtain a window permit.
3. Stonn Shutters!
Wmdow Dispute
Beauchamp proposes to substitute storm shutters
for impact glass. Beauchamp has failed to obtain a
storm shutter permit. The architect is reviewing the
contract issue,
4. Second Floor Retail
Waterproofing
A dispute has arisen on the interpretation of the
system type to be used and the permit required.
5. Signage
Loews was to order and install signage for the
building which will not be installed until October
29.
6. Elevator Start-Up
During the installation of the east elevator a missing
item was identified that could hold up future
certification, and therefore a steel beam needed to
be ordered and installed,
Schedule and Plan of Action
Daily project meetings with all project representatives have been instituted to coordinate and troubleshoot
problems on an expedited basis- Beauchamp believes they will be able to obtain a TeO for the parking or non -
retail portion of the Garage by October 30. The retail space has separate issues associated with it and will take
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longer to complete. but will not delay use of the garage for parking. However, Loews Tislunan) and
Redevelopment Agency staff as well as the architect do not believe that Beauchamp will be able to complete in
the time frame Beauchamp is projecting. We have broken the project down into three principal components and
have highlighted the principal tasks remaining by area along with our best estimate oCthe likelihood of obtaining
a TeO by certain dates.
PARKING AREA COWNS & 16th WASHINGTON RETAIL &
STREET RETAIL ANCHOR HOTEL
WatelprOOfingl SCCoDdmy pour wiJldoWs/Shutters Flood plain Varimce
Fire Alarm & Test Flood Barriers Restaurant tenant infulstIUCture
CableBmriers Railings
west & East Elevators
Railings
Security Booth DrywallICeiling Fire Alann Panel
Permanent P~
ScwcrlUtilitiesrrurnaround Rd./Sitework
wiudows/Shutterslflood Barriers
Ligbl Badllcs
Exterior Lighting with poles
L8Ddscaping
Telephone Ben South
Signage
In the best estimate oCthe Redevelopment Agency, Loews) Tishman and the architect's project s~ the
likelihood of certain completion milestones is as follows:
Probability olTCO PARKING AREA COLLINS &: 16th Sr. WASHINGTON SI.
by: RETAIL RETAIL &: ANCHOR
. HOTEL ...
November 1 25% 25% 0%
NovemberS 50% 50% 0%
November 1 S 75% 75% Oo/D
. Thi, COJllpOMnt oj ,he work is on hold becQwe of the jntensity ol,he undergrollnd work requi1V!d for a poten,ial re,taurall' ~tmtnlt and
IlTUclUraI ;!IUel involving the lllllonC buildi1lgJ. LoeW8 will adviJi! ICMdule.
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Conclusion
While we continue to apply pressure on the contractor on a daily basis we believe we will ocperience several
more weeks of delay. At this point, the removal of Beauchamp is not a realistic solution to the problem. This
was an option we had discussed internally earlier in the project but not recently since we felt the Garage was
close to the originally projected completion date and on budget and that a termination of the general contractor
would involve increased delay and cost However, we have a high degree of confidence that the remaining issues
can be resolved and work completed in time for the hotel opening. For that reason, the project staff and architect
do not think it prudent for the City to fast track the approval of a TeD from the Building Department as it would
reduce the limited leverage we have remaining and may result in compromises to quality and design that would
not be in the City's long term interest. This position should be re-considered if incompleteness of the Garage
were to jeopardize the hotel opening-
Mi 1 Meyer
Vice President
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