99-23266 RESO
RESOLUTION NO. 99-23266
A RESOLUTION OF THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING
A SETTLEMENT BETWEEN K.T.K.L. CORPORATION, AND
THE CITY OF MIAMI BEACH, AND AUTHORIZING THE
EXECUTION OF ANY AND ALL NECESSARY
SETTLEMENT DOCUMENTS.
WHEREAS, K.T.K.L. CORPORATION (hereinafter "KTKL") filed suit against the CITY
OF MIAMI BEACH (hereinafter "CITY") in that certain case pending in the Circuit Court in and
for Dade County, Florida, under Circuit Court Case No. 97-2687 CA-03, entitled K.T.K.L.
COl:poration v. City of Miami Beach; and
WHEREAS, KTKL and the CITY (the "Parties") desire to settle the outstanding claims to
avoid further costs and risks of litigation and the City Attorney and the City Manager recommend
that it is in the best interest of the City to resolve this case and to approve the terms of the Parties'
settlement as set forth in the attached Memorandum.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA:
Section 1:
That the City Commission approves the terms of the settlement as set forth
in the attached Memorandum, which is attached hereto and incorporated
herein by reference.
Section 2:
That the City Commission hereby authorizes all necessary City personnel to
execute any and all documents necessary to consummate and effectuate the
terms of the Parties' settlement.
PASSED and ADOPTED this 21st day of
July
,1999.
J:T: V
^AJA~ QA~
CITY CLERK
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MAYOR
F:\A TTO\DIXR\RESO\KTKL. WPD
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
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JUN-30-1999 12:05
CITY ATTORNEY MIAMI BEACH
K. T.K.L.
MEMORANDUM
305 673 7002
P.02/05
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Date: June23,1999 ~
K.T.K.L. representative: .
Subject: KTKL v. Y 0 MI BEACH
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THE STATEMENTS AND INFORMATION CONTAINED IN THIS MEMORANDUM
ARE COMMUNICATED IN THE CONTEXT OF SETTLEMENT NEGOTIATIONS
AND MAY NOT BE USED BY ANY PARlY FOR ANY OTHER PURPOSE INCLUDING
BUT NOT LIMITED TO ANY LEGAL PROCEEDING.
The following is KTKL's offer to settle the above litigation.
I. The City is to retain ownership of the subject real property and KTKL relinquishes any claim
to an option forrepurcbose. . ?()M~
2. The City to complete construction and obtain a fmal CO withi~ months from the date of
full execution and Commission acceptance hereof (barring a natural disaster, or other provision of a force
majeure clause.' If the parking garage final CO is not issued within the time frame provided by this
agreement the City will pay to KTKL the sum of $3,000.00 per month for each month commencing on the
first business day of the 25th month after the date of the execution of this agreement (July 10th, 1999) until
such time as the City secures a final CO. The sums paid to KTKL, under the paragraph 2, shall not
constiMe expenses in determining net revenue after the Garage obtains its fInal CO.
3. KTKL has 28 spaces on the ground floor of the parking garage; KTKL agrees to lease back to
the City _ number of its 28 spaces for the full term (30 years) of the lease provisions as provided in
paragraph 17 .19D of Purchase and Sale Agreement, dated November 18, 1993 between K.. T .K.L.
Corporation, a Florida corporation and the City of Miami Beach. The lease described herein shall
commence on the issuance of the final CO, described in paragraph 2 above.
4. In the event K.T.K.L. leases back to the City less than the total 28 spaces, then the term and
date of commencement ofKTKL's rights to remaining parking spaces and/or dumpster space shall
lThe City will provide the boilerplate terminology for the force majeure clause.
Additionally, the time within which the garage is to be completed will be extended only by that
amount of time directly attributed to the delay; the amount delay is to be agreed upon by the
parties or if the parties cannot agree, the Court will reserve jurisdiction over the settlement and
the parties the purposes of enforcement and in the event of enforcement the prevailing party will
be entitled to reasonable attorneys fees and costs. The City shall provide K.T.K.L. with prompt
notice of delay.
1((7(
JUN-30-1999 12:05 CITY ATTORNEY MIAMI BEACH 305 673 7802 P.03/05
COIomence on the issuance of the final CO described in paragraph 2 above. K.T.K.L. shall be given
possession of any parking spaces not leased to the City, immediately upon the garage being completed and
opened to the public for use. K.T.K.L. shall lease to the City no less than 25 spaces; KTKL shall have 60
days from the date of the acceptance of this offer within which to elect in writing to have the City, build out
the dumpster room (at the sole cost of the City) or retain the 3 spaces, failing such wrine:n notice the
requirement of the construction of the dumpster room is waived and the 3 spaces will be leased to the City on
the same: basis as the 25 spaces.
5. The City agrees to waive the require:ment that KTKL pay rent in the amount of $5,000.00 per
year for the first 10 years and further agrees to waive the requirement that KTKL pay rent in the amount
$5000.00 per year for the second 10 years and further agrees to waive the provision that would have required
that the rental during the second 10 year period be increased by five (5%) percent annually or the available
consumer price index (CPI) at that time which ever would have been greater; further the City will agree to
waive the payment requirement at the end of the twentieth (20th) year as set forth in paragraph 17 .19Diii) of
the Purchase and Sale Agreement (through the 30 year).
6. The City agrees to pay to KTKL as rental for each space from the total of 28 spaces which
KTKL leases back to the City a sum which will be prorated on a per space basis, from the Gross Revenue of
the garage, less the cost of operation (any provision for a management fee shall not be considered part of the
"cost of operation"), all taxes (including State or County Sales and Ad Valorem taxes, if any, but excluding
income taxes of any kind whatsoever), utilities, maintenance, and the actual interest on the borrowed funds
for the Garage constrUction (based upon the pro rata share of the City of Miami Beach's Parking Revenue
Bonds Series 1997, which were issued at for sale not to exceed 5.125% per annum, or based on such other
Garage financing sources not to exceed 5.125% amortized on the same basis as under the Miami Beach
Parking Revenue Bonds Series 1997) allocated to the 10th Street Garage (defmed as "net revenues"); for the
first fiscal year, said rental shall be estimated at $1,500.00 per space per year payable quarterly. At the end
of the first fiscal year, after completion of the City aruma! audit the City's "net revenues" for the 10th Street
garage shall be adjusted so that KTKL will receive the amount that reflects the City's actual pro rated "net
revenues" per space from the date of the completion of the 10 th Street Garage and said figure shall be used
as the estimated rental for the: second year. Each year after the completion of the City annual audit, the
City's "net revenues" per space rental shall be adjusted accordingly. Notwithstanding the foregoing the
minimum sum to be paid per space shall be $1,000.00 per annum. Interest referred to herein is simple
interest and not compound interest. The Garage financing for the purpose of calulation of net revenue in this
agreement shall not exceed $4,000,000.00.
7. All terms of the agreement for KTKL's lease afthe 28 reserved parking spaces within the
;1/}{
JUN-30-1999 12:06
CITY ATTORNEY MIAMI BEACH
305 673 7882 P.84/85
. parking garage not in conflict with the provisions herein shall survive and be binding upon the parties. In the
event of a conflict, this agreement shall govern and control.
~
SEE ;1l00E#DL/H I 47/AI!IIED
8.
15
and attorney's fees) in conne
.th its attempt to seek specific performance of
on (to be submitted within 10 of
not exceed in the amount of $75,000.00 and s
acceptance of this offer), said monies shall be 0 K ir attorney Ira Elegant, within lO
days of acceptance of the veri . n; in the event there is an issue on s
a portlon which is acceptable within the period aforesaid; the remaining balance, . y,
e.
9. The net revenue hereunder, shall not be reduced by bulk, special, handicapped,
complimentary, administrative, residential or any other special price advantage parking which may be
created or issued by the City or its assigns during the term of this agreement.
10. The action presently pending in the Dade County Circuit Coun, Case No.97-2687 CA03, shall
be dismissed with prejudice with a stipulation and order of approval, with retention of jurisdiction over
tbe parties aDd the subject matter for enforcement.
II. After "net revenue" has been determined by the City Audit and a copy provided to KTKL
together with any backup material and profit and loss statements specific to the subject garage, the parties
shall agree, at KTKL's sole option, upon the present day value of the remaining net revenue stream to be
paid to KTKL for the balance of the term of the lease using the then current prime rate as the (capitalization)
discount rate plus 3% per year or CPI2 which ever is less. If the parties cannot agree upon the present day
2For the purpose of this paragraph 11, "CPI" shall mean the Consumers' Price Index-- The
United States City Average All Items and Commodity Groups, issued by the Department of
Labor Statistics of the United States Department of Labor. For the purposes of this paragraph,
the base shall be January, 1999. A fraction shall be utilized for the purposes of this paragraph _
1 I. The numerator of the fraction shall be the index figure of the month in which the notice is
given and th~ denominator of which shall be the basic standard index figure of such price index
for the month of January, 1999. The product of such multiplication should give rise to an
increase in the sum to be paid but not a decrease. An example of such computation would
assume that the index for the month the notice is given is 16.0. The income stream, as described,
would be multiplied by a fraction, the numerator of which is 160.0 and the denominator of which
is the basic index figure for the month of January, 1999. or 14.0. The product arrived at would
be the payment due hereunder, as descried and calculated in paragraph 11.
It is understood and agreed that the above described Index is now being published monthly by
the Bureau of Labor Statistics of the United States Department of Labor. Should it be published
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value figure, the detennination shall be made by the Court, after motion, notice and hearing_ Upon 12
months prior written notice, after the end of the fourth year oflease payments, KTKL, at it's sole option, may
elect to require the aforesaid present day value of the net revenue stream figure to be paid to KTKL be paid
in full satisfaction of the lease obligation. Closing shall take place within 60 days of said notice in the
offices of the City Attorney.
12. The Court shall retain jurisdiction to enforce all terms and conditions of this settlement offer
upon its acceptance and the surviving terms and provisions of the Purchase and Sale Agreement. if any. In
the event of a conflict or disagreement between this agreement and the Purchase and Sale Agreement, this
Agreement shall control.
13. This agreement shall be binding upon the parties, their successors and assigns.
14. This offer shall remain effective until July 30th, in order to provide the City sufficient time to
secure Commission approval, necessary signatures of acceptenceand Court approval. The action shall stand
abated until the aforesaid occurs or July 30 whichever first occurs.
at other intervals. the new Index hereinabove provided for shall be arrived at from the Index or
Indices published by said Bureau most closely approximating the months in question. Should
said Bureau of Labor Statistics change the manner of computing such Index, the Bureau shall be
requested to furnish a conversion factor designed to adjust the new Index to the one previously in
use. An adjustment to the new Index shall be made on the basis of such conversion factor.
Should the publication of such Index be diScontinued by said Bureau of Labor Statistics, then
such other Index as may be published by such Bureau most nearly approximating said
discontinued Index shall be used in making the adjustments therein provided for. Should said
Bureau discontinue the publication of Index approximating the Index herein contemplated, then
such Index as may be published by another United States Governmental Agency which most
nearly approximates the Index herein first above referred to, shall govern and be substituted as
the Index to be used, subject to the application of an appropriate conversion factor to be ..
fwnished by the Governmental Agency publisyhing the adopted Index. If such Governmental
Agency shall not furnish such conversion factor, then the parties shaH agree upon a conversion
factor of a new Index, and I the event an agreement cannot be reached as to such conversion
factor or such new index, then the parties hereto agree to submit the matter to the Court
hereunder. The selection of a new Index approximating as nearly as possible the index
hereinabover contemplated, which new Index may be one published by a Governmental Agency,
or one published by a private agency and generally accepted and approved as an Index reflecting
the contemplated fluctuation in the purchsing power of the United States dollar, if utilized. Such
an Index selected shall be by agreement of the parties hereunder. In the event of any controversy
arising regarding the property payment called for in paragraph 11, the same shall be submitted to
the Court for adjudication.
TOTAL P.05
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ADDENDUM I
July 1, 1999
City of Miami Beach
1700 Convention Center Drive
Miami Beach FL 33139
Attention Robert Dixon
Gentlemen:
1((
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Per our recent conversations, please find signed agreement
between KTKL and City of Miami Beach.
This agreement is predicated~~pon the City and KTKL being'able
to resolvr He ~^iSR acal~ l.ith attorneys' fees and expenses
by July $, 1999. If this is not resolved~ that time, KTKL,
at its option may void this agreement. 4 /Ie.
We are able to justify an amount in excess of this figure and
will present to you the required backup on July~1~1999 as the
lengthy process of assimilating portions of thi~/information
is presently in storage.
Hopefully this entire matter can be amicably resolved during
the period outlined above.
Sinc~rely yours,
~~ rY1L
for KTKL -j'-
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OFFICE OF THE CITY ATTORNEY
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MURRAY H. DUBBIN
City Attorney
Telephone:
Telecopy:
(305) 673-7470
(305) 673-7002
COMMISSION MEMORANDUM NO. 5l'i -04
DATE: JULY 21,1999
TO: MAYOR NEISEN KASDIN
MEMBERS OF THE CITY COMMISSION
FROM: MURRAY H. DUBBIr;j,1 . 11,0 t iV
CITY ATTORNEY IIIJ !Z[UW'
SUBJECT: K.T.K.L. CORPORATION V. CITY OF MIAMI BEACH
SETTLEMENT ISSUES
This matter has been discussed at the Executive Session of July 20, 1999.
A Resolution regarding the above captioned Settlement will be provided at the City
Commission Meeting July 21, 1999 for review.
MHD:lm
Enc!.
Agenda Item
RlG
7-2-\-9t)
Date
1700 Convention Center Drive -- Foura~ floor -- Miami Bea