2004-25574 Reso
RESOLUTION NO. 2004-25574
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE
ADMINISTRATION TO ISSUE A REQUEST FOR QUALIFICATIONS
("RFQ"), FOR PROFESSIONAL ARCHITECTURAL AND
ENGINEERING SERVICES RELATED TO THE PREPARATION OF
AN ENVIRONMENTAL ASSESSMENT (EA) REPORT, AS
REQUIRED BY THE FEDERAL TRANSIT ADMINISTRATION FOR
A PROPOSED JOINT DEVELOPMENT BETWEEN THE CITY OF
MIAMI BEACH AND AR&J SOBE, LLC (AlK/A
POTAMKIN/BERKOWITZ) FOR THE DEVELOPMENT OF THE
PROJECT, PRESENTLY REFERRED TO AS "5TH AND ALTON",
BOUNDED BY LENOX AVENUE ON THE EAST, ALTON ROAD ON
THE WEST, 6TH STREET ON THE NORTH AND 5TH STREET ON
THE SOUTH, IN MIAMI BEACH: PROVIDED FURTHER THAT SAID
RFQ SHALL ONLY BE ISSUED IF THE ADMINISTRATION IS
UNSUCCESSFUL IN NEGOTIATING AND ENGAGING A
CONSULTANT FROM THE CITY'S ROTATING LIST OF AlE
CONSULTANTS, FOR AN AMOUNT NOT TO EXCEED $25,000,
FOR THE SCOPE OF WORK CONTEMPLATED IN THE
PROPOSED RFQ AND SET FORTH IN THIS RESOLUTION.
WHEREAS, on June 7,2000, the Mayor and City Commission adopted Resolution
No. 2000-23963, designating the area bounded by 6th Street to the north, 5th Street to the
south, Alton Road to the west and Lenox Avenue to the east, as a Brownfield area to
promote the environmental restoration and economic redevelopment of the area; and
WHEREAS, in July 2002, the Administration began meeting with representatives of
the site generally located on 5th Street and Alton Road. owned by the Potamkin family, to
review a preliminary site plan for a five (5) level mixed-use retail complex. including over
900 parking spaces; and
WHEREAS, one of the proposed commercial uses for the project included a
supermarket and, to that end, Publix issued a letter of intent to lease a ground floor area in
the complex; and
WHEREAS, in accordance with the City Commission's directive and the
community's identified needs, the City's interest in the project development was primarily
focused on achieving the public benefit of locating a supermarket, exploring transit and
excess parking opportunities, and developing a gateway project at one of the City's main
arterial entryways; and
WHEREAS, this project has been the subject of much discussion due to (1) its
pivotal location at the entrance to Miami Beach from the MacArthur Causeway, (2) due to
transportation/concurrency issues that will affect ingress/egress to the site, and (3)
massing/height issues related to the project; and
WHEREAS, to that end, the Developer has been working with the City's design
review and planning staff in redesigning the project to be of the highest quality,
commensurate with its prominent location; and
WHEREAS, on April 5, 2004, the Developer and its project team and City staff met
with the Federal Transit Administration (FT A) in Atlanta to review FT A funding
requirements; and the FTAexpressed favorable comments in its initial review of the project
and indicated the City would need to place emphasis on the transit elements of the project,
focusing on their location, cost and use, and transit user profiles to determine the project's
eligibility for FT A funding; and the parties will explore to what degree the Federal funding
restrictions apply to the privately funded, non-transit portion of the project; and
WHEREAS, the FTA funding has an extensive community and stakeholder
participation process, culminating in the mandatory submittal of an Environmental
Assessment (EA) Report identifying potential social, economic or environmental impacts
that may arise as a result of the project, and measures to mitigate these potential impacts;
and
WHEREAS, FT A eligibility will be determined as a joint development project and
must reflect the project as a transit oriented development including the City's park and ride
spaces and certain transit elements will be incorporated, owned and paid for by the City,
including items such as transit station pedestrian connections and access links between
transit services and the project (Leo expanded right of way area fronting Alton, 6th Street
and 5th Streets), safety and security equipment, vertical access links (Leo elevators and
ramps), transit information center, signage, etc.; and
WHEREAS, as the parties continued to address outstanding and relevant issues,
many areas of uncertainty continued to arise affecting the success of the negotiations.
namely, (1) the FTA requirements and pending approval by FTA, and (2) the rising cost of
construction, and its impact on the City's contribution to the project; and
WHEREAS, it was deemed to be in the parties' mutual best interest to commence
and conduct the required FT A Environmental Assessment (EA) and evaluate the ability to
apply for additional funding through FT A's competitive grant application process; and
WHEREAS, the City will be assured if the project qualifies as an FT A eligible funded
project, that it may seek to maximize the grant funding available for the City's
improvements, since FT A regulations will apply to the public portion of the project, at a
minimum; and
WHEREAS, pursuing this course should also minimize the uncertainty surrounding
the FT A restrictions that may apply and most issues will be raised and addressed before
any final City Commission action is taken as to the project; and
WHEREAS, the Administration proposed to first negotiate with a consultant from the
City's rotating list of architectural and engineering consultants, for an amount not to exceed
$25,000, for professional architectural and engineering services related to the preparation
of the Environmental Assessment (EA) report, as required by the Federal Transit
Administration; and
WHEREAS, if the Administration is unsuccessful in negotiating and engaging a
consultant from the City's rotating list, then the Administration will issue the RFQ for the
services contemplated in the Resolution.
NOW, THEREFORE, BE IT DULY RESOLVED BYTHE MAYOR AND THE CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the City Commission
hereby authorize the Administration to issue a Request for Qualifications ("RFQ"), for
professional architectural and engineering services related to the preparation of an
Environmental Assessment (EA) report, as required by the Federal Transit Administration
for a proposed Joint Development between the City of Miami Beach and AR&J Sobe, LLC
(a/k/a Potamkin/Berkowitz) for the development of the project, presently referred to as "5th
and Alton", bounded by Lenox Avenue on the east, Alton Road on the west, 6th Street on
the north and 5th Street on the south, in Miami Beach; provided further that said RFQ shall
only be issued if the Administration is unsuccessful in negotiating and engaging a
consultant from the City's rotating list of NE consultants, for an amount not to exceed
$25,000, for the scope of work contemplated in the proposed RFQ and set forth in this
Resolution,
PASSED and ADOPTED this26th day of May
ATTEST:
~c rlU~
CITY CLERK
JMG/CMC/rar
T:\AGENDA\2004\May2604\Regular\Potamc;inEAConsultant.RES.doc
APPROVED AS 1'0
FORM & lANGUAGE
& FOR EXECUTION
4tj~ '-2<Y-fJ'(
C Altom Date
CllY OF MIAMI BEACH
COMVIISSION ITEM SUMMARY
m
Condensed Title:
A Resolution authorizing the Administration to issue an RFQ to select a consultant, only if unsuccessful in
negotiating and engaging a consultant from the City's rotating list of AlE consultants for an amount not to
exceed $25,000, to prepare an Environmental Assessment Report as required by the FT A for a proposed
Joint Development between the City of Miami Beach and AR&J SOBE, LLC (a/k1a Potamkin/Berkowitz) for
the development of the project, presently referred to as "5th and Alton", containing approximately 179,000
square feet of retail area and a supermarket and an approximate 943 space parking garage facility,
including an intermodalltransportation component, an integrated parking garage, vertical transportation,
ramps, ventilation, etc., and surrounding streetscape and public infrastructure to serve the project,
bounded by Lenox Avenue on east, Alton Road on west, 6th Street on north and 5th Street on the south, in
Miami Beach,
Issue:
Shall the Mayor and City Commission authorize issuance of an RFQ to select a consultant, only if
unsuccessful in negotiating and engaging a consultant for an amount not to exceed $25k, to conduct a
Environmental Assessment Report as required by the FT A, for a proposed Joint Development between the
City of Miami Beach and AR&J SOBE, LLC (a/k1a Potamkin/Berkowitz) for the development of the project,
presentlv referred to as "5th and Alton?
Item Summa /Recommendation:
An accompanying item recommends withdrawal of consideration of the Development Agreement. As the
parties continued to address outstanding and relevant issues, many areas of uncertainty continued to arise
affecting the success of the negotiations for the joint development of the project. Namely, (1) the FTA
requirements and pending approval by FTA and (2) the rising cost of construction, and its impact on the
City's contribution to the project. Accordingly, it was deemed to be in the parties' mutual best interest to
commence and conduct the required FT A Environmental Assessment and evaluate the ability to apply for
additional funding through FTA's competitive grant application process. Thereby, the City will be assured if
the project qualifies as an FTA eligible funded project, that it may seek to maximize the grant funding
available for the City's improvements, since FT A regulations will apply to the public portion of the project, at
a minimum. Therefore, roceedin with the EA is recommended at this time.
Adviso Board Recommendation:
Finance & Citywide Projects Committee - December 22, 2003 - Referred to full Commission.
2, 2004 and March 1, 2004 June 7, 2004 meetin is scheduled
Financial Information:
Source of
Funds:
D
Finance Dept.
n-Offs:
Department Director
T:\AGENDA\2004\May2604\Regular\PotamkinEAConsultant.SUM.doc
AGENDA ITEM R?C
DATE 5-l'-OL/
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
www.miamibeachfl.gov
To:
From:
Subject:
COMMISSION MEMORANDUM
Date: May 26, 2004
Mayor David Dermer and
Members of the City Commission
Jorge M, Gonzalez ().~.
City Manager VI'" 0
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, AUTHORIZING THE ADMINISTRATION
TO ISSUE REQUEST FOR QUALIFICATIONS "RFQ" TO SELECT A
CONSULTANT, ONLY IF UNSUCCESSFUL IN NEGOTIATING AND
ENGAGING A CONSULTANT FROM THE CITY'S ROTATING LIST OF AlE
CONSULTANTS FOR AN AMOUNT NOT TO EXCEED $25,000, TO
PREPARE AN ENVIRONMENTAL ASSESSMENT (EA) REPORT AS
REQUIRED BY THE FEDERAL TRANSIT ADMINISTRATION FOR A
PROPOSED JOINT DEVELOPMENT BETWEEN THE CITY OF MIAMI
BEACH AND AR&J SOBE, LLC (AlKlA POT AMKIN/BERKOWITZ) FOR
THE DEVELOPMENT OF THE PROJECT, PRESENTLY REFERRED TO
AS "5TH AND ALTON", CONTAINING APPROXIMATELY 179,000
SQUARE FEET OF RETAIL AREA AND A SUPERMARKET AND AN
APPROXIMATELY 943 SPACE PARKING GARAGE FACILITY,
INCLUDING AN INTERMODALI TRANSPORTATION COMPONENT, AN
INTEGRATED PARKING GARAGE, VERTICAL TRANSPORTATION,
RAMPS, VENTILATION, ETC., AND SURROUNDING STREETSCAPE AND
PUBLIC INFRASTRUCTURE TO SERVE THE PROJECT, BOUNDED BY
LENOX AVENUE ON THE EAST, ALTON ROAD ON THE WEST, 6TH
STREET ON THE NORTH AND 5th STREET ON THE SOUTH, IN MIAMI
BEACH.
RECOMMENDATION
Adopt the Resolution.
ANALYSIS
On June 7, 2000, the Mayor and City Commission adopted Resolution No. 2000-23963
designating the area bounded by 6th Street to the North, 5th Street to the South, Alton Road
to the West and Lenox Avenue to the East, as a Brownfield area to promote the
environmental restoration and economic redevelopment of the area.
In July 2002, the Administration began meeting with representatives of the site generally
located on 5th Street and Alton Road, owned by the Potamkin family, to review a
preliminary site plan for a five (5) level mixed-use retail complex, including over 900 parking
spaces, One ofthe proposed commercial uses forthe project included a supermarket and,
to that end, Publix issued a letter of intent to lease a ground floor area in the complex. In
accordance with the City Commission's directive and the community's identified needs, the
City's interest in the project development was primarily focused on achieving the public
May 26, 2004
City Commission Memorandum
Potamkin/Berkowitz
Page 2 of 4
benefit of locating a supermarket, exploring transit and excess parking opportunities, and
developing a gateway project at one of the City's main arterial entryway.
The proposed site contains approximately three (3) acres, and a vacation of the public alley
would be required for the project to proceed. This project has been the subject of much
discussion due to (1) its pivotal location at the entrance to Miami Beach from the MacArthur
Causeway, (2) due to transportation/concurrency issues that will affect ingress/egress to
the site, and (3) massing/height issues related to the project. To that end, the developer
has been working with the City's design review and planning staff in redesigning the project
to be of the highest quality, commensurate with its prominent location,
On October 25, 2002, the Finance and Citywide Projects Committee discussed this
proposal to determine the City's interest in the project. The Committee made a motion to
authorize the Administration to move forward and fine tune negotiations with the project
developers; exploring the following: the vacation of the public alley, determination of the
relative value of said alley, the possibility of participating in the project as a partner in
building and/or operating the garage portion of the development, and the availability of
grants and other resources for funding construction of any City participation,
The attached term sheet reflects the updated terms negotiated by the parties and was
presented to the Finance and Citywide Projects Committee on December 22, 2003, The
Committee referred the item to the full Commission for action and the Committee's
comments from that meeting are incorporated in the attached term sheet in bold and italics.
Concurrent with the negotiations, the Developer has obtained Planning Board
recommendation to implement a signage overlay district to permit effective signage for the
Supermarket and for the retail tenants within the Project. On April 14, 2004, the City
Commission opened and continued the public hearing to today's date. On April 13, 2004,
the project was presented at a joint HP/DRB meeting and was continued and will be
reviewed again on May 18, 2004.
Additionally, the Developer continues with its outreach initiative, scheduling meetings with
various Citywide committees to present the proposed project schematics and to obtain
community input. Since January 2004, the Developer has presented its plans before the
Finance and Citywide Projects Committee and the Transportation and Parking Committee
(T&P) on two occasions; the Tuesday Morning Breakfast Club, the Flamingo Park
Neighborhood Association and other committees. The parties will continue to seek further
community outreach with area businesses/residents.
At the March 1,2004 T&P meeting, the T&P moved to defer any action until such a time as
all the studies are completed (concurrency and traffic impact). It is anticipated that the
T&P will review this study with the benefit of a City Consultant analysis at its meeting on
June 7, 2004.
Over the past year, the City Administration has worked diligently with the project
developers to negotiate terms that would serve in the mutual best interest of the parties.
May 26, 2004
City Commission Memorandum
Potamkin/Berkowitz
Page 3 of 4
Many issues remain outstanding and are required to finalize negotiations:
. Declaration of Restrictions and Reciprocal Easement Agreement ("DR&REAn) that
will govern the parties and the operation and management of the transit facility
within the project.
. Final operating proforma for the operation and management of the garage within the
project.
. Clarification of all Federal Transportation Administration (FT A) funding requirements
and restrictions. A meeting was held with FT A on April 5, 2004 in Atlanta, and is
further reported on below.
Federal Transit Administration (FTA)
On April 5, 2004, the Developer and its project team, City staff and I met with the Federal
Transit Administration (FTA) in Atlanta to review FTA funding requirements. The FTA
expressed favorable comments in its initial review of the project and indicated the City
would need to place emphasis on the transit elements of the project, focusing on their
location, cost and use, and transit user profiles to determine the project's eligibility for FT A
funding. Additionally, the parties will explore to what degree the Federal funding
restrictions apply to the privately funded, non-transit portion of the project.
Furthermore, the FTA funding has an extensive community and stakeholder participation
process, culminating in the mandatory submittal of an Environmental Assessment (EA)
Report identifying potential social, economic or environmental impacts that may arise as a
result of the project, and measures to mitigate these potential impacts, The Scope of
Services for the consultant are listed in the attached Exhibit "An. It is anticipated that this
process will span a 3-4 month period.
FT A eligibility will be determined as a joint development project and must reflect the project
as a transit oriented development. As part of the City improvements, in addition to the
City's park and ride spaces, certain transit elements will be incorporated, owned and paid
for by the City, including items such as transit station pedestrian connections and access
links between transit services and the project (Le, expanded right of way area fronting
Alton, 6th Street and 5th Streets), safety and security equipment, vertical access links (Leo
elevators and ramps), transit information center, signage, etc.
Planninq Board - Conditional Use
The Potamkin site is 50 feet away from the RM-1 Residential District (600 Lenox) and 70
feet from a residential use (1050 6th Street) and therefore Section 130-69.5 of the City
Code will apply, requiring Conditional Use approval by the Planning Board to operate past
midnight. The City and Developer, will jointly schedule a future item for consideration by
the Planning Board to address this issue, as it is contemplated that the Transit Facility will
be operational 24/7 prior to finalizing negotiations,
Sec. 130-69.5. Additional requirements.
In addition to any other requirements regarding parking garages and parking
lots contained herein, and except where a parking garage or lot is accessory
May 26, 2004
City Commission Memorandum
Potamkin/Berkowitz
Page 4 of 4
to a residential use and located on the same lot, all parking garages and lots
located within 100 feet of a residential use or district that intend to operate
after midnight, shall obtain conditional use approval from the planning board
before obtaining a building permit or occupational license.
CONCLUSION
As the parties continued to address outstanding and relevant issues, many areas of
uncertainty continued to arise affecting the success of the negotiations. Namely, (1) the
FT A requirements and pending approval by FTA and (2) the rising cost of construction, and
its impact on the City's contribution to the project. Accordingly, it was deemed to be in the
parties' mutual best interest to commence and conduct the required FT A Environmental
Assessment (EA) and evaluate the ability to apply for additional funding through FTA's
competitive grant application process. Thereby, the City will be assured if the project
qualifies as an FT A eligible funded project, that it may seek to maximize the grant funding
available for the City's improvements, since FT A regulations will apply to the public portion
of the project, at a minimum.
Pursuing this course should also minimize the uncertainty surrounding the FTA restrictions
that may apply and minimize the potential need to include a Termination clause in the
pending agreement between the parties, Thereby, most issues will be raised and
addressed before any final Commission action is taken.
Therefore, the Administration in a separate item, is recommending withdrawing the
approval of the Development Agreement on May 26, 2004, This resolution authorizes the
issuance of an RFQ to engage a consultant only if the Administration is unsuccessful in
negotiating and engaging a consultant from the City's rotating list of AlE consultants for an
amount not to exceed $25,000, to prepare the EA. Upon conclusion, if approved by FT A, a
Development Agreement and DR&REA, the approval of the alley vacation and pertinent
review requirements including Section 82-37 through 82-39 of the City Code, and
consideration of the waiver of the AIPP requirements will be presented to the City
Commission. It is anticipated that this process may take between 6 months - 9 months to
complete.
JMG/C~brar
T:\AGENDA\2004\May2604\Regular\PolamkinEAConsultanI.MEM.doc
POT AMKIN - TERM SHEET
April 14, 2004
Incorporates comments based on Finance Committee Meeting of December 22,
2003
Owner(s): City of Miami Beach ("City") and AR&J SOBE, LLC.
(Potamkin/Berkowitz - Entity to be formed)
Developer: AR&J SOBE, LLC, ("AR&J")
Developer AlE (Designers): Robin Bosco with Todd Tragash
Developers Corporate Status: TBD
Project Description: Subject to the approval of the appropriate Boards
after public hearing, Developer shall construct the
Project depicted on the Project Concept Plans
attached hereto, which Project, shall contain
approximately 179,000 square feet of Retail Area and
Supermarket and a Transit Facility.
Development Site: Parcel bounded by Lenox Avenue on East, Alton
Road on West, 6th Street on North and Fifth Street on
the South, Miami Beach, defined as "Development
Site" and collectively includes: "Retail Area",
"Supermarket" & "Transit Facility".
. "Retail Area" is defined as approximately
134,000 sf of retail/commercial area on the 1 s ,
3rd and 4th levels within the Project.
. "Transit Facility" is the facility containing the
Transit Elements (including, but not limited to,
the vertical transportation, ramps, ventilation,
etc., surrounding streetscape and public
infrastructure to serve the facility),
approximately 486 parking spaces to serve the
Public and Supermarket ("City Park & Ride
Spaces) and approximately 457 parking
spaces required to serve the Retail Area
("Retail Spaces") within the Project. City Park
& Ride Spaces consisting of "Public Spaces"
which are excess above required parking, and
"Supermarket Spaces" which are spaces
required the supermarket to serve. The Transit
Facility consists of City Park & Ride Spaces,
Retail Spaces and Transit Elements.
. "Supermarket" is approximately 45,000 sf area
on the ground level which will be opened as a
supermarket, pursuant to a long term lease.
City Improvements: AR&J will convey a condominium or air rights interest
so that title to the Transit Elements and an undivided
Potamkin Term Sheet
April 14, 2004
Page 2
486 parking spaces (the City Park & Ride Spaces),
which spaces will be constructed in accordance with
all Code requirements, (e.g. roadways), together with
any public improvements, which will be owned by the
City of Miami Beach.
AR&J Improvements:
AR&J will own the Retail Area, Supermarket and
Retail Spaces, as well as the underlying land and all
common areas (reciprocal access easements).
[Finance Committee asked if restrictions can be
placed on retail tenants and/or quality of tenant
mix. Use restrictions in Public Privates to be
incorporated into Agreement]
Alley
In accordance with its procedures governing same,
City will vacate and convey fee simple title, free of any
encumbrances or rights to possession by any party, to
AR&J to the alley containing approximately 7,800 sf
within the Development Site to the Project to enable
development of the Project within a contiguous parcel
and as consideration for the public benefits described
herein.
Neighboring Property:
The deed shall contain a right of reverter, providing
that the Alley shall be reconveyed to the City, if for
any reason, AR&J does not commence construction
by August 31, 2004, the Project is not developed, or it
is not completed by June 20, 2007.
15,000 sf vacant lot on Alton Road between 6th Street
and 7th Street, at 633 Alton Road. City will have a
purchase option for this parcel at $1,000,000, or
$66.67/sf., which option shall be exercised, if at all,
and the transaction closed within three years from the
Date of Commission approval of the Development
Agreement. Thereafter, the City shall have the option
to purchase at the then market value and/or a right of
first refusal to acquire the Neighboring Property.
City's intent is to exercise option if transportation
planning analysis warrants acquisition.
Pending development of the Neighboring Property by
the City following its acquisition, if at all, the Parties
may use said Property for overflow parking, Prior to
the City's acquisition, the Neighboring Property may
be utilized for construction staging.
Potamkin Term Sheet
April 14, 2004
Page 3
Legal Descriptions:
Proiect Cost/Responsibilities:
AR&J Project Cost:
City Project Cost:
City Funding Sources:
Actual legal facility description(s) for Retail Area,
Transit Facility (Leo Public Spaces, Supermarket
Spaces, Retail Spaces and transit elements), and
Supermarket, collectively the "Project", to be finalized
upon completion of the improvements - "as builts".
Retail Area, Supermarket and Retail Spaces,
AR&J shall be contributing land and constructing
improvements within the Project having a value of not
less than $32,000,000,
City Park & Ride Spaces and Transit Elements.
City will fund $14,500/per parking space inclusive of
soft costs (including but not limited to any Prevailing
Wage Requirements and all site development costs,
permit and concurrency fees, if applicable), or
$7,047,000 (plus costs of the Transit Elements), as a
maximum contribution from City for the City
improvements, AR&J will design and construct the
entire Transit Facility.:..-.CMB shall own/operate the
City improvements, which shall be operated as a
public municipal park & ride transit facility together
with the 457 Retail Spaces,
AR&J will comply with all requirements of funding
sources provided by City for construction of the City
Improvements, (Leo 486 Public and Supermarket
Spaces and the Transit Components). AR&J shall, if
such requirements prove too onerous at AR&J's sole
discretion, have the right to terminate the Agreement
within 18 months of the effective date. [Finance
Committee felt all Issues must be resolved at
onset. However, as cited in the memo, given the
complex nature of the transaction and the
unknown FTA requirements, an 18 month initial
termination date is being contemplated.} However,
in consideration of the Public Benefits, including initial
development of the Supermarket, the City shall
convey the Alley to AR&J subject to reverter and
conditions for vacation.
Potamkin Term Sheet
April 14, 2004
Page 4
Cost to City Capped:
Park and Ride Transit Center:
City to Manage and Operate
Garage:
Annual AR&J Contribution:
Patron Parking:
Developer is responsible for cost overruns. The City
of Miami Beach will be responsible for the capital cost
of the park and ride spaces at a cost not to exceed
$14,500/space, for an estimated total of $7,047,000
(plus the actual costs of any Transit Elements). The
Developer has asked that the City share on a
proportionate basis with recent increases in steel
prices which is adversely impacting projected
construction cost estimates. 100% of the risk of cost
overruns for construction and development of the
Transit Facility, including the related vertical
transportation, vehicular ramps, pedestrian
connections, access links and transit elements, etc.
shall be that of AR&J, The cost to the City is fixed
and capped.
The City of Miami Beach shall be responsible for
managing and operating the garage (a/k/a "Transit
Facility") at City parking garage rates in accordance
with a set of guidelines and standards to be mutually
agreed upon in writing by the parties, but of a quality
and consistency no less than that which is utilized by
the City of Miami Beach in operating and managing
other garages owned or operated by it. AR&J shall
be responsible for providing security for the Project,
including the Transit Facility, janitorial, repair and
maintenance services, all in accordance with a budget
to be mutually agreed upon. AR&J acknowledges
that the City is self-insured. Notwithstanding that fact,
the City shall contribute its pro rata share of the cost
of Liability Insurance (minimum of $5,000,000) and
Defense coverage to cover AR&J in connection with
any claims, including attorneys fees, arising out of
operation of the Parking and Transit Center,
AR&J or its Tenants will contribute a minimum of
$290,000 annually toward the Transit Facility's
operating budget in consideration for Retail Area daily
use upon a validated basis, subject to annual
escalations commencing in the 4th year of operation.
In consideration of the annual contribution by AR&J,
an agreed upon quantity of parking will be assured for
the employees and customers of Project's tenants,
including the Supermarket, and they shall be
Potamkin Term Sheet
April 14, 2004
Page 5
Garage Operating Budget:
Owner(s) Fund Any Deficit:
Division of profits:
Parking Requirements:
Proiect Construction:
permitted to park within the Transit Facility without
incurring an additional fee on a permit or validated
basis during store operating hours.
In determining "Net Revenues", both parties shall
agree on a reasonable operating budget for operating
the Transit Facility, which may include a reasonable
management fee for operating the garage. The annual
operating expenses of the garage (381 ,886sJ.) will be
shared by the Developer and the City. The portion of
expenses for the operation and maintenance of the
retail common areas (29,611 sJ.) will be paid solely
by the Developer.
The City and AR&J, on a proportionate basis, shall
guaranty against any operating loss and shall fund
any operating (including repair/replacement costs)
deficiencies for the Transit Facility on an annual
basis.
The City and AR&J shall share on a proportionate
ownership basis in any net profit realized from the
operation of the Transit Facility.
The Supermarket parking requirements will be
satisfied within the Supermarket Spaces, herein
defined, and City will provide the necessary
mechanism to comply with any regulatory parking
requirement for the Supermarket.
Initial Termination: For 18 months from effective date or upon a secure
construction financing commitment, the Developer
and the City may terminate said Agreement for any
reason.
Development Agreement Term: Not to exceed 10 years from effective date, and may
be mutually extended by parties. (Section _ of
Dev. Agrmt.)
Declaration of Restrictions and Reciprocal Easement Agreement:
The DR&REA will survive the Development
Agreement and govern the parties' joint ownership
and management of the project.
Potamkin Term Sheet
April 14, 2004
Page 6
Concurrency/Traffic Analysis:
Construction Staging:
Performance Bond:
Underground Utilities:
Constru ction/Perm itting:
Effective Date:
Initial Termination Date:
Vacation Date:
Project Concept Plan:
Preliminary Plans and Specs:
Plans and Specs:
Building Permit:
Construction Commencement:
Possession Date:
Construction Completion:
Environmental Matters:
Art in Public Places (AIPP):
AR&J will be obligated to perform a traffic analysis
and mitigate and meet all concurrency requirements
for the "Retail Area" and for the Supermarket, to the
extent they apply.
[Finance Committee stated Traffic Analysis is
required as part of Project)
Construction staging for the Project will be confined to
the Development Site or Adjacent Property (which will
be made available without charge for that purpose,
even if the City has exercised its option and has
acquired the Adjacent Property), thereby not
impacting adjacent residential areas.
Prior to commencement of construction, AR&J shall
cause G.C, to furnish City with payment and
performance bond (or a dual obligee rider with
AR&J's Lender) or Letter of Credit to provide a
Completion Guarantee for the Project. (Section _ of
Dev. Agrmt.)
Developer will relocate any underground utilities now
existing on the Development site, if necessary,
included in Developer's project costs. The City shall
provide Right of Way or other utility easements to
enable Developer to relocate any such underground
utilities off site.
Execution Date of Agreement
18 months from Effective Date
Upon Effective Date subject to reverter
Attached to Dev. Agreement as Exhibit
To be submitted within 6 months from Commencement Date for
DRB/HP approval. (Section _ of Development Agreement)
To be submitted 9 months from final DRB/HP approval. (Section
_ of Development Agreement)
18 months from DRB/HP approval
60 days from Building Permit.
Upon TCO
No later than 3 years from Effective Date, subject to unavoidable
delays. "Completion Deadline" as defined in Development
Agreement.
AR&J is responsible for any required environmental
remediation within the Development Site.
The City has advised that the proposed project
constitutes a public joint development, and that the
AIPP 1 Y2% will apply to the Project construction cost
(per proposed revisions to ordinance). Developer has
advised the City that it intends to install a major piece
Potamkin Term Sheet
April 14, 2004
Page 7
of Art selected by it at the entrance of the Project and
that if the AIPP is not waived, it will render this
transaction economically infeasible, Developer shall
seek a waiver of the AIPP requirement from the City
Commission, simultaneously with the approval of the
Development Agreement. Per AR&J, if the AIPP is
not waived, AR&J may terminate the City's right to
purchase the parking spaces and to operate the
Garage as a municipal lot.
Public Benefits:
Public Space in Project:
AR&J agrees to incorporate a municipal park and ride
transit center, with public intermodal/transportation
components to the Project to serve the Public (the
nature and scope of which shall be mutually agreed
upon by the Parties).
Public Benefits:
AR&J commits to enter into a long term lease with
and to construct an approximately 45,000 sf.
Supermarket on site.
City receives Public Benefits, including the following:
a. Opportunity for City to address present and future
parking deficiencies at a key "gateway"
intersection at a fixed, competitive cost, without
having to condemn land at a prohibitive price,
b. Addresses parking deficiencies identified in
Alternatives Analysis in Parking Study.
c. Supermarket will be secured as an anchor tenant
based on a long term lease agreement (see
"Change in Use" below).
d. Potential to serve as a collector to alleviate traffic
congestion before entering the Historic District.
e. Project designlreduction in density.
f. Redevelopment of environmentally contaminated
Brownfield Site,
g. Project preserves the historical character of the
building located at the corner of 5th and Lenox.
[Finance Committee suggested a First Source
Hiring Agreement with Miami Beach residents}
h. Creation of 600+ Jobs for the community.
i. Public use of 100% of the parking spaces
(approximately 943 spaces) during high traffic
hours.
Potamkin Term Sheet
April 14, 2004
Page 8
Other:
Real Estate Taxes:
Each party will be responsible for their respective
portion in the event Ad Valorem taxes are assessed.
Change in Use:
If the Supermarket ceases to operate and to serve the
public, an acceptable substitute use will be mutually
agreed upon by the parties, failing which, at AR&J's
option, the Supermarket facility will automatically
revert to City, for retail uses only, at the same rental
rate and on the same terms and conditions which had
been extended to the Supermarket pursuant to its
Lease Agreement.
Termination Agreement:
If during the first 15 year period, operationally, the
project is not viable pursuant to specific criteria to be
established, or AR&J shall have the option to acquire
the City Park and ride spaces and Transit elements
based on the actual cost of said improvements and a
rate of return equivalent to the City's investment rate,
The Developer will be permitted to repay said
investment proportionately over a three (3) year
period, and the termination will be effective upon full
repayment any net income derived by the City over
the 15 year period may be utilized to offset the rate of
return. In the event condemnation,
Prohibited Uses:
AR&J shall in no way use the Project for any
purpose/use that would impair status/integrity of this
and other public funds initially used to construct
improvements.
Mutual Cooperation:
Both parties will agree, to cooperate fully in
maximizing the Benefits to which the project may be
entitled pursuant to the "Brownfield Recovery Act", the
Enterprise Zone Designation, and/or any other State,
Local or Federal program, including but not limited to
the waiver of impact fees relating to the Supermarket
and to the entire Garage. To the extent that such
benefits are available only to a municipality or
governmental entity (such as EDA grants or HUD
grants for infrastructure or utility relocation), the City
agrees to make application and to diligently pursue
maximizing the recovery of such available benefits on
behalf of AR&J, Any funds, which may be recovered
from any Federal, State or County program by the
City as for reimbursements or grants shall be remitted
to AR&J for use in constructing the Project. In
Potamkin Term Sheet
April 14, 2004
Page 9
addition, the City agrees to cooperate fully in
presenting and, if approved, in implementing a
signage overlay district to permit effective signage for
the Supermarket and for the retail tenants within the
Project.
Right of First Offer:
There are no sale right provisions contemplated in the
Agreement other than Termination due to operational
concerns.
Miscellaneous Issues:
Developer has indicated the need to address
Construction Loan lender issues, real estate tax
issues, depreciation issues, liability issues and
condemnation issues.
Requirements for Vacation of Alleys, Easements and City Rights-of-Way (submitted
separately)
Requlatorv Procedure for Conveyance of Alley:
The City of Miami Beach shall comply with Ordinance 92-2783 (aka Shapiro Ordinance)
adopted by the City Commission on June 17, 1992, and codified in the City Code as
Article II, entitled "Sale or Lease of Public Property", more specifically with Sections 82-
37 through 82-39, which require the following:
1) Public Hearinq.
Section 82-37 of the Miami Beach City Code requires that the City Commission
hold a public hearing, advertised not less than 15 days prior to the hearing, in
order to obtain citizen input into any proposed sale and/or lease.
2) Planninq Department Analysis.
Section 82-38 of the Miami Beach City Code requires that the Planning
Department prepare an analysis in order for the City Commission and the public
to be fully apprised of all conditions relating to the proposed sale of the property.
3) Advertised Public Biddinq Process and Appraisal.
Section 82-39 states that there shall be no sale of City property unless there has
been an advertised public bidding process and an independent appraisal of the
fair market value of the property.
(Note: In regard to any sale of City property, the conditions of only this section
may be waived upon a five-sevenths vote of the city commission upon a finding
by the City Commission that the public interest would be served by waiving such
conditions of bidding and/or appraisal for the disposition of the property.
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