First Addendum to Development Agreement
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FIRST ADDENDUM TO DEVELOPMENT AGREEMENT
THIS FIRST ADDENDUM TO DEVELOPMENT AGREEMENT is made as of this
day of , 2007 (this "First Addendum") by and between the CITY OF
MIAMI BEACH, FLORIDA ("Owner" or "City"), a municipal corporation duly organized and
existing under the laws of the State of Florida, and NEW WORLD SYMPHONY, a not-for-
profit Florida corporation ("Developer") (the Owner and Developer, each a "Party" and
collectively, the "Parties").
RECITALS
A. Owner and Developer entered into an Agreement of Lease ("Lease") dated as of
January 5,2004, pursuant to which Owner leased to Developer certain real property described in
Exhibit "A" attached hereto and made a part hereof (the "Land").
B. Concurrently therewith, Owner and Developer also entered into a Development
Agreement ("Development Agreement") dated as of January 5, 2004, setting forth, among other
things, the Owner's and Developer's respective responsibilities and agreement to coordinate and
cooperate in the planning, scheduling and approval of the development, design and construction
of an automobile parking garage (the "Garage") to be located on land adjacent to the Land, and a
performance, educational and internet broadcast facility, together with certain related amenities,
facilities and other infrastructure improvements on the Land ("Developer's Improvements"), as
set forth in the Development Agreement.
C. The Development Agreement provided that Owner would develop certain
unspecified "Infrastructure Improvements" as a condition of Developer's obligation to construct
the Developer's Improvements, and that specific Infrastructure Improvements would be
identified in the future, subject to the Owner obtaining the City Commission's approval. The
Infrastructure Improvements have now been identified, subject to the required approvals.
D. The Development Agreement also contemplated that Owner might develop a park
("Park") or another similar public amenity on real property defined in the Development
Agreement as the "Adjacent Property" and re-defined herein as the "Park Project Zone." A Park
has been envisioned for the Park Project Zone for some time, and is a part of the City's District
Master Plan.
E. Following the execution of the Lease and Development Agreement, the Parties
have worked together to define the processes and refine the scope for implementing the
Developer's plans for the Developer's Improvements on the Land and the City's overall vision
for enhancing the development of the Park and the areas surrounding the Park and the Land, for
the use and enjoyment by all residents of and visitors to the City of Miami Beach and by all
visitors to the Project (as that term is re-defined herein). The Parties now wish to enter into this
First Addendum in order to memorialize their agreements regarding their respective obligations
for implementing the foregoing.
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NOW THEREFORE, it is hereby mutually covenanted and agreed by and between the
Parties hereto that this First Addendum is made in consideration of the terms, covenants and
conditions hereinafter set forth.
I. Capitalized Terms; Recitals. All capitalized terms not defined herein shall have
the meanings given to them in the Development Agreement. For convenience, the original
Article I, entitled "Definitions," of the Development Agreement is attached hereto as
Exhibit "B." Hereafter, all references to the Development Agreement shall mean the
Development Agreement as modified and augmented by this First Addendum, unless the context
indicates otherwise. The Recitals are incorporated herein by reference.
2. Additional and Revised Definitions. Article 1, entitled "Definitions," is amended
by adding or revising the following definitions:
(a) "Additional Improvements" means certain improvements to City owned
real property planned for and included only within Zone 1 and Zone 2, as described in subsection
(cc) herein (but excluding Developer's Improvements and the Garage). The Additional
Improvements may include streetscaping, landscaping, utilities, graphics, lighting, adjustments to
curb lines, sidewalks, hardscape, streetscape furniture, and the design, development, engineering
and construction of such improvements all as may be determined for each Zone in accordance
with the applicable approval process and approved budget. As of the date hereof, the parties
acknowledge and agree that the City has budgeted an amount not to exceed $6.4 million for the
Additional Improvements. Notwithstanding the preceding sentence, in the event that the final
cost for design, development and construction of the Additional Improvements is less than the
not to exceed amount of $6.4 million, then the Parties agree that such additional amount(s) shall
be applied toward design, development and construction of the Park Project and, accordingly,
shall be added to the Final Park Project Budget. The Additional Improvements in Zones 1 and 2,
and the improvements planned for Zones 4 and 5 are, together, the "Infrastructure
Improvements" addressed in Article 23 of the Development Agreement.
(b) "Change" means any proposed or approved material addition, deletion, or
revision in the Work, or an adjustment in the Guaranteed Maximum Price, or the Completion
Date or other construction timetable, issued on or after the Guaranteed Maximum Price has been
agreed to.
(c) "Change Order" means a document which is signed by Developer,
Contractor, Owner, and the Architect (if required), and authorizes a Change.
(d) "Development Site" is amended to mean Zones 1 and 2, and in the event
the Park Project is approved by the City, Zone 3 as well.
(e) "Design-to Park Project Budget" means the preliminary total costs
budgeted by the City for the Park Project, which is the preliminary estimate of costs, including
estimated hard and soft construction costs, anticipated as of the date hereof, to be incurred in
connection with the design, development and construction of the Park Project. As of the date
hereof, the parties acknowledge and agree that the City has budgeted an amount not to exceed
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$13,810,000 for Zones 3.1,3.2 and 3.3, and an additional $1,150,000 for Zone 3.4, for a total of
$14,960,000 for the entire Park Project.
(f) "Final Completion" means the date when all Work has been fully
completed in accordance with the GMP Contract, the approved Final Plans and Specifications,
the Development Agreement and this First Addendum, and a final Certificate for Payment
approved by the Owner has been issued by the Architect; all further subject to Developer's
compliance with the provisions of Section 14(b).
(g) "Final Garage Budget" means the final budget, as mutually agreed to by
the Parties, and as approved by the City Commission prior to establishment between Developer
and its Contractor of the Guaranteed Maximum Price, and representing the final hard and soft
construction costs approved in connection with the design, development and construction of the
Garage, as reflected in the Preliminary Garage Budget.
(h) "Final Park Project Budget" means the final budget, as mutually agreed to
by the Parties, and as approved by the City Commission prior to establishment between
Developer and its Contractor of the Guaranteed Maximum Price, and representing the final hard
and soft construction costs approved in connection with the design, development and
construction of the Park Project. Notwithstanding the preceding sentence, in the event that the
Additional Improvements are designed, developed and constructed for less than the "not to
exceed $6,400,000" amount, then any unused funds shall be applied by the Parties toward the
design, development and construction of the Park Project, and, accordingly, shall be added to the
Final Park Project Budget.
(i) "GMP Contract" means the guaranteed maximum pnce ("Guaranteed
Maximum Price") executed between Developer and the Contractor.
(j) "Garage" means the public municipal parking garage comprising Zone I. 1
to be designed, developed and constructed by Developer for Owner and funded as set forth in
Section 13 hereof, and operated by Owner at its sole cost and expense on City-owned property
adjacent to the Land, legally described in Exhibit "C." It is anticipated that the Garage will
have six (6) stories, including five (5) stories of covered parking plus open rooftop parking, and
ground-floor retail space along 17th Street and Pennsylvania Avenue. Owner shall be responsible
for operation and management of the Garage, including the leasing and management operations
of the retail portion of the Garage.
(k) "Garage Design Costs" shall include but not limited to all costs, fees and
expenses associated with the preparation, design, engineering, planning, work, input and analysis
by Developer and all of its agents, employees, contractors, consultants and professionals,
including but not limited to the Architectural Consultant, with respect to the overall design,
management and construction administration for the Garage.
(1) "Park" means the public park facility that is proposed to be developed
within the Park Project Zone pursuant to this First Addendum.
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(m) "Park Project" means all of the improvements to be designed, developed
and constructed within Zone 3- the Park Project Zone (including Zones 3.1, 3.2, 3.3 and 3.4), in
accordance with the provisions of this First Addendum.
(n) "Park Project Concept Plan" means the design of the Park Project
prepared by the Architectural Consultant, in consultation with the Developer and the City
Manager, and to be submitted for the review of the City Commission, pursuant to the provisions
of Section 10 and the Program described in Exhibit "D" hereof.
(0) "Park Project Costs" means all costs, fees and expenses incurred in
connection with the design, development and construction of the Park Project, all of which costs,
fees and expenses are and shall be at the sole cost and expense of the Owner.
(p) "Park Project Design" means the final design of the Park Project approved
by the Design Review Board ("DRB"), and based upon the approved Park Project Concept Plan,
to be submitted to the City Commission pursuant to the provisions of Section 1 0 and the Program
described in Exhibit "D" hereof.
(q) "Park Project Design Costs" shall include but not limited to all costs, fees
and expenses associated with the preparation, design, engineering, planning, work, input and
analysis by Developer and all of its agents, employees, consultants and professionals, including
but not limited to the Architectural Consultant, with respect to: (i) the Park Project Concept Plan
and any modifications thereof including, (1) the modifications to the draft Basis of Design
Report, as may be requested by the City, in accordance with the Program described in Exhibit
"D," and (2) the Final Basis of Design Report; (ii) the "Design-to" Park Project Budget; (iii) the
Preliminary Park Project Budget; (iv) Owner's approval process, all subject to Sections 10(t) and
(g)hereof; and (v) all construction administration and management fees.
(r) "Preliminary Additional Improvements Budget" means the total costs
budgeted by the City for the Additional Improvements, as mutually agreed to by the Parties and
as approved by the City Commission, which is the preliminary estimate of costs, including
estimated hard and soft construction costs ("Additional Improvements Costs"), anticipated as of
the date hereof to be incurred in connection with the design, development and construction of the
Additional Improvements. As of the date hereof, the Parties acknowledge and agree that the City
has budgeted an amount not to exceed $6,400,000 for the Additional Improvements.
(s) "Preliminary Garage Budget" means the total costs budgeted by the City
for the Garage, as mutually agreed to by the Parties and as approved by the City Commission,
which is the preliminary estimate of costs, including estimated hard and soft construction costs
("Garage Costs"), anticipated as of the date hereof to be incurred in connection with the design,
development and construction of the Garage. As of the date hereof, the Parties acknowledge and
agree that the City has budgeted an amount not to exceed $15,210,135 for the Garage.
(t) "Preliminary Park Project Budget" means the total cost budgeted by the
City for the Park Project, as mutually agreed to by the Parties and as shall be approved by the
City Commission concurrently with the approval of the Park Project Concept Plan (pursuant to
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the provisions of Section 10 and the Program described in Exhibit "D" hereof), which is the
preliminary estimate of costs, including estimated hard and soft construction costs, anticipated as
of the date thereof to be incurred in connection with the design, development and construction of
the Park Project, including the sound system. The Parties acknowledge and agree that the
Preliminary Park Project Budget shall be established in accordance with the dollar amounts set
forth in the "Design to" Park Project Budget, in the amount of $14,960,000.
(u) "Program" means the procedure the Parties shall follow in connection with
obtaining City approval of the Park Project Design, as described on Exhibit "D," attached hereto.
(v) "Project" means the Developer's Improvements, the Additional
Improvements proposed to be designed and constructed in Zones 1 and 2, and the Garage; in
other words, all improvements of every kind to be located in Zones 1 and 2.
(w) "Project Site" means Zones 1 and 2.
(x) "Substantial Completion" means the date when the Work or designated
portion thereof (which the Owner agrees to accept separately) is sufficiently complete in
accordance with the applicable portions of the GMP Contract and the approved Final Plans and
Specifications, the Development Agreement and this First Addendum, so the Owner can occupy
or utilize the Work for its intended use, and subject further to Developer's compliance with the
provisions of Section 14(tt~) hereof.
(y) "Unavoidable Delays" means delays due to strikes, slowdowns, lockouts,
acts of God, inability to obtain labor or materials reasonably within the originally contracted for
price range, war, enemy action, civil commotion, fire, casualty, severe weather conditions,
eminent domain, a court order which actually causes a delay (unless resulting from disputes
between or among the Parties alleging an Unavoidable Delay, present or former employees,
officers, members, partners or shareholders of such alleging Party or Affiliates, or present or
former employees, officers, partners, members or shareholders of such Affiliates of such alleging
Party), the application of any Requirement, or another cause beyond such Party's control or
which, if susceptible to control by such Party, shall be beyond the reasonable control of such
Party. Such Party shall use reasonable good faith efforts to notify the other Party not later than
twenty (20) Calendar Calendar Days after such Party knows of the occurrence of an
Unavoidable Delay. Failure to provide timely notice, as set forth herein, shall not be deemed a
waiver by the Party alleging an Unavoidable Delay. In no event shall (i) any Party's financial
condition other than due to a material increase in the costs of labor or materials, or inability to
fund or obtain funding or financing, constitute an "Unavoidable Delay" (except for an
Institutional Lender's inability to fund, which inability is not caused by Developer) with respect
to such Party, (ii) nor shall any delay arising from a Party's default under this Development
Agreement or any of the Construction Agreements, constitute an "Unavoidable Delay" with
respect to such Party's obligations hereunder. The times for performance set forth in this
Development Agreement and First Addendum (other than for monetary obligations of a Party)
shall be extended to the extent performance is delayed by Unavoidable Delay.
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(z) "Work" means the construction and services required by the applicable
portion of the GMP Contract for the Garage, the Additional Improvements, and the Park Project,
and includes all other labor, materials, equipment and services provided or to be provided by the
Contractor to fulfill its obligations.
(aa) "Zone" or "Zones" mean the geographical areas in which the three (3)
primary components of the Project and the Park are located, and the proposed improvements
(including, without limitation, the proposed Additional Improvements and Infrastructure
Improvements) within each geographical area. The Zones are generally but not legally described
below and are identified on the sketch attached hereto as Exhibit "E."
(i) Zone 1 - Parking Garage Zone, which means the real property
owned by Owner and generally described as the land bounded on the North by 17th
Street, on the East by the Land, on the South by Lincoln Lane and on the West by
Pennsylvania A venue.
(ii) Zone 2 - Symphony Campus Zone, which means the real property
owned by Owner and generally described as the land bounded on the North by 17th
Street, on the East by the realigned Drexel A venue, on the South by Lincoln Lane and on
the West by the Garage Property.
(iii) Zone 3 - Park Project Zone, which means the two parcels of real
property owned by Owner and generally described as follows: (A) the land bounded on
the North by 1 ih Street, on the East by Washington Avenue, on the South by Lincoln
Lane and on the West by the realigned Drexel Avenue (Zones 3.1, 3.2 and 3.3); and (B) a
portion of land surrounding part of the City's Theater of Performing Arts ("TOP A") and
bounded on the north by _, on the south by 1 ih Street, on the east by Washington
Avenue and on the west by (Zone 3.4).
(iv) Zone 4 - Lincoln Lane Improvement Zone, which means the real
property owned by Owner and generally described as that portion of Lincoln Lane
bordered on the West by Pennsylvania A venue and on the East to Washington A venue.
(v) Zone 5 - Pennsylvania Avenue Improvement Zone, which means
the real property owned by Owner and generally described as that portion of
Pennsylvania A venue bordered on the North by 1 ih Street and on the South by Lincoln
Lane.
3. Amendment or Replacement of Certain Sections of Development Agreement.
(a) The following section or subsections in the Development Agreement are
deleted in their entirety and replaced with the following:
(b) Section 2.9, "Confirmation of Land Development Regulations," IS
amended by deleting it in its entirety and replacing it with the following:
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"The zoning district classification of Zones 1, 2 and 3 is CCC, as defined
in the Land Development Regulations."
( c) Section 2.1 O(b), "Required Development Permits," is deleted in its entirety
and replaced with the following:
"To the best of Owner's knowledge and belief, other than pertaining to
Zone 1, Zones 2.2 and 2.3 and Zone 3, there are no reservations and/or dedications of land for
public purposes that are proposed under the terms of this Development Agreement."
(d) Section 2.11, "Developer's Right of Termination," is amended as follows:
(e) Notwithstanding anything to the contrary contained herein, Developer shall
have the right to be released from its liability and to terminate this Development Agreement and
the Ground Lease prior to the Possession Date because (a) changes to the Project Design and/or
Preliminary Plans and Specifications required by the DRB, or any other Governmental
Authority (including the City, acting solely in its regulatory capacity), render the Project
economically unfeasible in the reasonable business judgment of Developer, or (b) the Project
cannot meet concurrency requirements under Section 163.3180, Florida Statutes (1997), or the
costs of concurrency mitigation and/or Environmental Remediation on the Project Site are, in the
reasonable business judgment of Developer, economically unfeasible, or (c) Developer, after
good faith efforts, has been unable to obtain a Building Permit for the Project pursuant to the
Plans and Specifications submitted by Developer, or (d) Owner and Developer cannot come to a
mutual agreement regarding the Parties' respective shares of costs and other obligations relative
to , Environmental Remediation of the Project Site, if required, or (e) the City Commission,
acting on behalf of Owner solely in its proprietary capacity (and not in its regulatory capacity or
on behalf of any other Governmental Authority), imposes requirements or restrictions upon the
Project and/or the Park Project which, in Developer's reasonable business judgment, irnpose an
undue burden on Developer or render the Project economically unfeasible, or (f) the City
Commission does not approve the Grant, as set forth in Section 12 hereof, and the Parties do not
execute a Grant Agreement. In the event of termination of this Development Agreement and the
Ground Lease pursuant to subsections (a) through (d) of this Section 2.12, Developer shall
reimburse Owner for Owner's share of all-Garage Costs, Additional Improvements Costs and
Park Project Costs incurred through the termination date and, following Owner's receipt of
payment in cleared funds of all sums due hereunder, each Party shall bear its own costs and
expenses incurred in connection with this Development Agreement and First Addendum and the
Ground Lease, and neither Party shall have any further liability to the other. Notwithstanding the
preceding sentence, Developer shall have no duty to reimburse Owner for Owner's share of
Garage Costs, Additional Improvements Costs, and Park Project Costs, as referenced above, in
the event Developer terminates the Development Agreement and the Ground Lease pursuant to
subsections (e) or (f) hereof: however. in such event, Owner shall reimburse Developer for all
Garage Costs, Additional Improvements Costs and Park Proiect Costs incurred by Developer on
Owner's behalf through the tennination date, and following Developer's receipt of payment in
cleared funds of all sums due hereunder, each Party shall bear its own other costs and expenses
incurred in connection with this Development Agreement and First Addendum and the Ground
Lease, and neither Party shall have any further liability to the other.7
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ill-Section 6.1 "Developer's Contributions" IS deleted III its entirety and
replaced with the following:
Section 6.1 Developer's and Owner's Contributions. Developer shall
provide all of the funds necessary to complete Construction of Developer's Improvements in
Zone 2.1. Owner shall provide all of the funds necessary to complete Construction of (i) all
improvements within Zone 1, including the Garage and the Additional Improvements to be
located in Zones 1.2 and 1.3 of the Parking Garage Zone, and (ii) the Additional Improvements
in Zones 2.2 and 2.3, subject to the other provisions of the Development Agreement and this
First Addendum. As to the retail portion of the Garage, Developer shall only be responsible for
delivering to Owner, and Owner shall only be responsible for funding, a vanilla shell retail space,
as defined in Exhibit "F", attached hereto. Owner shall be responsible for all leasing and
management operations of the Garage, including the retail portion of the Garage.
following:
ffi(g} Section 6.2 "Fees" is deleted in its entirety and replaced with the
Permit Fees. Developer assumes payment responsibility for any and all
Permits, now or hereafter, required to be obtained from the City or any other Governmental
Authority for the construction of Developer's Improvements in Zone 2.1, including without
limitation, building permit applications, inspection, certification, impact and connection fees that
the City may levy by or through its Public Works Department (including, without limitation,
water and sewer fees) and those fees, to the extent applicable, listed in the City of Miami Beach
Building Department Fee Schedule, or the most current edition adopted by the City, which fee
schedule is hereby incorporated by reference and made a part of this Agreement (collectively, the
"Fees"). Owner shall be responsible for all Fees associated with the Garage, the Additional
Improvements, the Park Project, and the Infrastructure Improvements; the amounts of all such
Fees will be included in the applicable budgets.
f:gillll Sections 23.3 and 23.4 of the Development Agreement, entitled "Adjacent
Property" and "Park," are deleted in their entirety and replaced with the pertinent provisions of
this First Addendum.
f!illil Section 10.1 (f) is deleted in its entirety and replaced with the following:
If there is more than one Recognized Mortgagee, only the three (3) most
senior in lien Recognized Mortgagees, to the exclusion of all other Recognized Mortgagees, shall
be recognized as having rights under this Article 10, unless one of such senior priority
Recognized Mortgagees has designated in writing to Owner a Recognized Mortgagee whose
Mortgage is junior in lien to exercise such right.
4. City's Obligations Regarding Infrastructure Improvements. The City has refined
its plans for the construction and development of certain public improvements to City-owned
property located within Zones 1,2,3,4 and 5.
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(a) The Additional Improvements to City-owned property in Zone 1 and
Zone 2 (but specifically excluding the Developer's Improvements to be constructed by
Developer within Zone 2.1 - the Symphony Campus), together with the improvements to City-
owned property in Zones 4 and 5 are designated to be the "Infrastructure Improvements" referred
to in Article 23 of the Development Agreement. Upon timely completion of performance of all
of Owner's obligations regarding the Infrastructure Improvements, Owner shall have satisfied in
full all of its obligations under Section 23.1 of the original Development Agreement.
(b) The Additional Improvements planned in Zone 1 and Zone 2 constitute
portions of the "Infrastructure Improvements" referred to in Section 23 of the original
Development Agreement and designated in this Addendum. The City's planned improvements
within Zones 4 and 5 are not included within the definition of "Additional Improvements" but
are included within the definition of "Infrastructure Improvements."
(c) Because the coordinated construction, development and use of the Project
and the Additional Improvements will provide mutual benefits to both parties by enhancing the
availability and use of all of the Developer's Improvements as well as other property owned by
the City, Owner has requested, and Developer has agreed, that Developer shall cause to be
designed, developed and constructed, at Owner's sole cost and expense, the Additional
Improvements in accordance with the Plans and Specifications and the Preliminary Additional
Improvements Budget.
5. Zones 1 and 2. Sections 23.2.2 and 23.2.3 of the Development Agreement are
deleted in their entirety and replaced with the following:
(a) Garage Costs; Additional Improvements Costs. Owner's obligation to
fund the design, development and construction of the public improvements within Zone 1 and
Zones 2.2 and 2.3 is described below, subject to the provisions in Section 13 herein:
(i) Owner will fund an amount not to exceed $15,210,135 for the
Garage Costs, as reflected in the Preliminary Garage Budget. Owner will fund an amount
not to exceed $6,400,000 for the Additional Improvements Costs, as reflected in t4e
Preliminary Additional Improvements Budget. The Garage Costs and Additional
Improvements Costs shall be inclusive of, but not be limited to, the City's total funding
contributions for Concurrency Requirements, the City's Prevailing Wage Ordinance, if
applicable, and all costs in connection with all zoning, permit matters, and requirements
imposed by Governmental Authorities, subject to the other terms of the Development
Agreement as they pertain to Zones 1,2.2 and 2.3.
(ii) The Parties agree that the design, development and construction of
the Additional Improvements planned for Zones 1.2, 1.3, 2.2 and 2.3, shall be included
within the definition of "Project" and "Project Site", respectively, and therefore included
within the scope of Owner's obligation to fund and Developer's submissions and
performance of its obligations pertaining to design, development and construction, under
the original Development Agreement.
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(iii) Owner shall pay to Developer the Garage Costs and the Additional
Improvements Costs in the manner set forth in Section 13 herein.
(b) Zone 2.2. The construction of the Developer's Improvements within Zone
2.1 of the Symphony Campus Zone will require the displacement, re-routing and rebuilding
(such work, collectively, "Realignment") of that portion of Drexel Avenue that is between
Lincoln Lane and 1 ih Street in Miami Beach ("Drexel") in Zone 2.2. Owner has agreed that the
Drexel A venue Realignment is part of the Additional Improvements for which Owner is
responsible, and that such work constitutes the public improvements within Zone 2.2, and
Developer has agreed to perform such Drexel A venue Realignment on Owner's behalf at
Owner's sole cost and expense.
6. Zone 4 - the Lincoln Lane Improvement Zone. The design, development and
construction of all improvements planned for Zone 4, and all costs in connection therewith,
including but not limited to fees due to Architectural Consultant, are solely the responsibility of
Owner. Zone 4 is a part of the aesthetically integrated project contemplated in this First
Addendum, and the Parties agree to coordinate, cooperate and consult with one another in the
planning, design, development and construction (including, without limitation, commencement
of construction) of all Zone 4 improvements.
7. Zone 5 - the Pennsylvania Avenue Improvement Zone. The design, development
and construction of all improvements planned for Zone 5, and all costs in connection therewith,
including, but not limited to fees due to Architectural Consultant, are solely the responsibility of
Owner. Zone 5 is a part of the aesthetically integrated project contemplated by this First
Addendum, and the Parties agree to coordinate, cooperate and consult with one another in the
planning, design, development and construction (including, without limitation, commencement
of construction) of all Zone 5 improvements.
8. Development of Park Proiect.
(a) Owner has determined to develop the Park Project as contemplated herein,
and the Parties hereby agree that Developer will serve as developer of the Park Project on behalf
of Owner and shall cause the Park Project to be designed, developed and constructed on behalf
of the Owner and at the sole cost and expense of the Owner, subject to the terms and conditions
as set forth herein. Developer will select, at its sole discretion, all contractors, including a
general contractor, and all subcontractors, consultants and other Persons (each a "Contractor"
and collectively, "Contractors") Developer deems necessary to complete the Park Project in
accordance with the provisions of this First Addendum and the Development Agreement.
(b) Developer's obligations pertaining to the Park Project are limited to the
design, development and construction of the improvements located or to be located within the
Park Project Zone, subject to the provisions of Section 13 herein, and specifically exclude any
obligation or responsibility or liability whatsoever for any other property or Zone, unless
otherwise provided in the Development Agreement, or agreed to in writing by the Parties.
9. Park Proiect Design.
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(a) Developer and Owner wish to enhance the benefits to the City, the Owner
and the Developer of an integrated vision and design for the development of the Project and the
Park Project, and therefore Developer, with Owner's consent, has selected Gehry Partners, LLC,
as the architectural consultant for the Park Project. Gehry Partners, LLC, and all necessary
specialists and consultants who Gehry Partners, LLC requires to complete the Park Project
Design, including but not limited to specialists and consultants in the areas of acoustics,
performance venues, architecture and engineering, shall be referred to hereafter as "Architectural
Consultant." Owner further acknowledges that Developer has selected, with Owner's consent,
Hines Interests Limited Partnership to act on behalf of Developer as the Project and Park Project
construction manager.
(b) Owner and Developer acknowledge and agree that the design,
development and construction of the Project and the Park Project as an aesthetically integrated
project in accordance with the single design vision of the Architectural Consultant will maximize
the benefits of the Project and the Park Project to the City of Miami Beach. Accordingly, Owner
and Developer further acknowledge and agree that the completion of the design, construction and
development of the Park Project pursuant to the terms and provisions of this First Addendum and
in accordance with the Park Project Design is integral to the current design, construction and
development of the Project and that the Owner's election not to proceed with the Park Project (as
further described in Sections 10(c) and 10(d) and Section 11(a) below) may materially and
adversely affect Developer's ability to meet its projected time frames for design, construction
and development of the Project.
(c) Any delays in Developer's ability to meet the Schedule and/or the
Construction Commencement Date and/or the completion date for the Project, and/or any other
deadline for the Project, which delays arise from Owner's election not to proceed with the Park
Project, shall be treated as an "Unavoidable Delay" pursuant to the Development Agreement and
this First Addendum, and shall be further subject to subsection 15(b )(iii) hereof.
10. Procedure for Park Proiect Design Approval.
(a) The approved Park Project's Fmal Basis of Design Report to be obtained
pursuant to the Program described in Exhibit "D" shall be the approved Park Project Concept
Plan referred to herein.
(b) The Developer shall use the Design-to Park Project Budget as the cost
basis as described and approved in the Park Project Concept Plan. The costs, fees and expenses
for such design and preparation work shall not exceed the dollar amount allotted for such work
as set forth in the Design-to Park Project Budget. Following approval of the Park Project
Concept Plan pursuant to the Program described in Exhibit "D," Developer and the City
Manager, on behalf of the Owner, acting in a proprietary and not regulatory capacity, shall meet
to commence the preliminary review process. Developer shall comply with the schedule of
approvals outlined in the Program described in Exhibit "D."
(c) In the event the City Commission does not select and approve a Park
Project Concept Plan, or it elects not to proceed with the Park Project, immediately thereafter the
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Owner shall notify the Developer in writing in accordance with Article 20 of the Development
Agreement, of the Owner's intent to terminate those portions of this First Addendum which
relate to the Park Project, specifically Zone 3. Within thirty (30) Calendar Days after
Developer's receipt of the Owner's notice of intent to terminate the applicable portions of this
First Addendum, the Owner shall reimburse Developer for Park Project Design Costs incurred
by Developer, which Park Project Design Costs shall not exceed the sum of $1,110,000 (unless
Owner consents to an increase in writing)and which amount is deemed and agreed by the Parties
to be the total allowable reimbursement to Developer for all costs incurred as a result of such
action or inaction by the City to select and approve a Park Project Concept Plan, or election by
the City not to proceed with the Park Project. Following Developer's receipt of payment in
cleared funds of all sums due hereunder, those portions of this First Addendum pertaining to the
Park Project shall terminate and shall thereafter shall have no force or effect, and neither Party
shall have any further rights or obligations to the other pertaining to the Park Project under the
Development Agreement and this First Addendum except as set forth herein.
(d) Notwithstanding Owner's election not to select and approve a Park Project
Concept Plan, or not to proceed with the Park Project, Owner's funding obligations associated
with Zones 1 and 2 will remain in full force and effect in accordance with the Development
Agreement and this First Addendum. Termination of such portions of this First Addendum
regarding the Park Project shall not in any respect operate to terminate, modify, amend or affect
any other of the respective rights and obligations of the Parties under this First Addendum, the
Development Agreement or the Ground Lease, all of which shall continue to be in full force and
effect.
(e) Upon the City Commission's approval of a Park Project Concept Plan, the
Developer and the Architectural Consultant shall prepare a more detailed design, during the
course of which design process the Owner, Developer and Architectural Consultant shall consult
together as often as necessary. Within 150 Calendar Days following the City Comrnission's
approval of the Park Project Concept Plan, the Architectural Consultant and Developer shall
submit a more fully developed project design to the Owner for review and approval. This further
developed project design shall include, but not be limited to, fully detailed landscape drawings,
detailed sidewalk and streets cape improvements, public walkways, entertainment venue details,
projection and sound equipment details and specifications, utility improvements and any other
improvement related to the Park Project (the "Preliminary Plans and Specifications").
(f) The Preliminary Plans and Specifications submitted to the Owner within
the 150 Calendar Day design period shall be reviewed by the Owner's City Manager within 60
Calendar Days from receipt of said Preliminary Plans and Specifications. If the originally
submitted Preliminary Plans and Specifications are consistent with the approved Park Project
Concept Plan, but Owner rejects the Preliminary Plans and Specifications and requires the
Architectural Consultant to revise or redesign the Preliminary Plans and Specifications, then, ffi
the event Owner electsregardless of whether or not Owner elects to proceed with the Park
Project, Owner shall be obligated to reimburse Developer for the cost(s) of such revision(s)
and/or redesign(s) and said costs shall be in addition to the "cap" on the Park Project Design
Costs as referenced in subsection 1 O( c) hereof.
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(g) Upon obtaining the Owner's approval of the Preliminary Plans and
Specifications, Developer shall submit an application for approval of the Preliminary Plans and
Specifications to the City's DRB. Developer shall pursue approval of the application to the DRB
with the assistance of the Owner acting diligently and in good faith.
(h) Upon receipt of the DRB's approval of the Preliminary Plans and
Specifications (the "Park Project Design"), the Architectural Consultant shall prepare Final Plans
and Specifications for construction of the Park Project consistent with the approved Park Project
Design. The Final Plans and Specifications shall be submitted to the Owner within 180 Calendar
Days from receipt of the DRB's approval of the Park Project Design. The Final Plans and
Specifications shall be reviewed by the Owner's City Manager solely for consistency with the
Park Project Design (as the same shall have been approved by the DRB). The City Manager shall
have 60 Calendar Days from receipt of the Final Plans and Specifications to review the Final
Plans and Specifications. If the originally submitted Final Plans and Specifications are consistent
with Owner's approved Preliminary Plans and Specifications and the Park Project Design, but
Owner rejects the Final Plans and Specifications and requires Developer to revise or redesign the
Final Plans and Specifications, then, in the event regardless of whether or not Owner elects not
to proceed with the Park Project, Owner shall be obligated to reimburse Developer for the cost(s)
of such revision(s) and/or redesign(s) and said costs shall be in addition to the "cap" on the Park
Proj ect Design Costs as referenced in subsection 1 O( c) hereof.
11. Final Park Proiect Budget. Prior to Developer's execution of the GMP Contract
for construction of the Park Project, Developer shall submit to Owner's City Manager, who shall
submit same for review and approval by the City Commission, a proposed Final Park Project
Budget. If such proposed Final Park Project Budget is materially inconsistent with the
Preliminary Park Project Budget, then the proposed Final Park Project Budget shall be
accompanied by a memorandum in writing in sufficient detail to explain all such material
inconsistencies. Approval or disapproval or modification of the Final Park Project Budget shall
be governed by the provisions governing the Plans and Specifications, as applicable, as set forth
in Section 10 above. Informational copies of any material modifications to the Final Park Project
Budget shall be promptly delivered to Owner's City Manager.
(a) Notwithstanding anything to the contrary contained herein, :f, upon
revie',.'l, but prior to approval, of the Final Park Project Budget, Ovmer, through its City
Commission, determines, in the exercise of O','lller's reasonable discretion and judgment, that
the Park Project Design and/or the Final Plans and Specifications, exceed the budget acceptable
to the City, or the Park Project Design and/or Final Plans and Specifications (as approved by
the City) render the Park Project economically unfeasible, O"vner and Developer shall first make
reasonable, good faith efforts to value engineer the Park Project Design so that the cost to
construct a revised Park Project design acceptable to Ovmer does not exceed a budgetod amount
that is also acceptable to O"vner. If, after value er.gineering the Park Project Design, OVlller, in
its reasonable discretion and judgment, elects not to approve a revised design that is within a
budgeted amount that is acceptable to Ovmer, then Owner shall not be deemed to have approved
a Final Park Project Budget and may, accordingly, tern1inate those portions of this First
j\ddendum pertaining to the Park Project. \Vithin thirty (30) Calendar Days after Developer's
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receipt of the Owner's notice of intent to terminate the Park Project pursuant to this subsection,
tho O'Nnor shall reimburse Developer in full f-or all Park Project Costs incurred by De','elopor up
to the date of termination, including without limitation those Park Project Design Costs
associated 'Nith the "cap" of $1,110,000, as referenced in subseetion 1 O( c) hereof, and
(notwithstanding such "cap") the costs associated with the revision(s) and/or redesign(s) of the
Park Project Design pursuant to subsections 10(f) and (h) hereof. Not\'/ithstanding the preceding
sentence, hmvever, OV.'ller shall have no obligation to reimburse Developer for any additional
costs incurred by Developer as a result of value engineering the Park Project Design and/or such
other revisions neoessitated and/or undertakoo by the Parties pursuant to this subseotion 11(a).
Following Developer's reoeipt of payment in cleared funds of all sums due hereunder, those
portions ofthis First Addendum pertaining to the Park Projeot shall terminate and shall thereafter
shall have no force or effect, and neither Party shall have any further rights or obligations to the
other pertaining to the Park Project under the Development .Agreement and this First Addendum.
(a)Notwithstanding anything to the contrary contained herein, if, upon review, but
prior to approval, of the Final Park Project Budget, Owner, through its City Commission,
determines, in the exercise of Owner's discretion and iudgment, that the Park Proiect Design
and/or the Final Plans and Specifications (although already approved by the Owner as set forth in
subsections 10(e), (f), (g) and (h) hereof), exceed the budget acceptable to the Owner, Owner
may elect to: (1) value engineer the Park Proiect to get it back to an acceptable amount (2) add
more money to the Park Budget or (3) terminate the Park Proiect. To the extent Owner desires
to value engineer the Park Proiect, the Architectural Consultant shall suggest value engineering,
scope reductions or other cost savings options to achieve an acceptable Park Proiect Budget. The
Architectural Consultant shall revise the design to incorporate the value engineered options
approved by the Owner at no additional cost to the Owner unless one or more of the following
events causes the estimated Final Park Proiect Budget to exceed the budget acceptable to the
City, in which case the cost of such revisions shall be borne by the Owner: (i) an inordinate
increase in the cost of labor and materials caused as a result of unfavorable market conditions;
(ii) Owner initiated scope changes; and/or (iii) Owner's decision to reduce the previously
established Park Proiect Budget.
(b )If Owner elects to terminate those portions of this First Addendum pertaining
to the Park Project pursuant to subsection 11(a) hereof, then within thirty (30) Calendar Days
after Developer's receipt of the Owner's notice of intent to terminate the Park Proiect, the Owner
shall reimburse Developer in full for all Park Proiect Costs incurred by Developer through the
termination date, including without limitation those Park Proiect Design Costs associated with
the "cap" of $1,1 10,000, as referenced in subsection 10(c) hereof, and (notwithstanding such
"cap") the costs associated with the revision(s) and/or redesign(s) of the Park Proiect Design
pursuant to subsections 10(f) and (h) hereof. Following Developer's receipt of payment in
cleared funds of all sums due hereunder, those portions of this First Addendum pertaining to the
Park Proiect shall terminate and shall thereafter shall have no force or effect, and neither Party
shall have any further rights or obligations to the other pertaining to the Park Proiect under the
Development Agreement and this First Addendum.
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f:!:tlW Notwithstanding anything contained in this First Addendum or the
Development Agreement, the Parties acknowledge and agree that, if and when approved by the
City Commission, (i) the Final Park Project Budget shall represent the total amount of funding
which the Owner has determined to make available for the development, design, and
construction of the Park Project and, accordingly, the Final Park Project Budget shall not be
exceeded and/or increased without the express authorization of the City Commission. The
Developer shall not be liable to Owner or any Contractor or other third party for payment of any
portion of the costs, fees or expenses properly incurred by Developer on behalf of Owner in
connection with the Park Project provided such costs, fees or expenses are within, and in
accordance with, the Final Park Project Budget. Moreover, Developer shall have no obligation
or duty whatsoever to incur costs or expenses which would cause the Park Project Design Costs
to exceed the Final Park Project Budget.
~ Except as otherwise set forth in this Addendum to the contrary, the general
procedures and requirements set forth in the Development Agreement pertaining to the
construction of the Garage and Developer's Improvements shall apply to construction by
Developer of the Additional Improvements and the Park Project, including but not limited to
Sections 2.5(e), (f) and (g); [Section 3.3] Section 3.3; Article 4; Sections 5.3 and 5.4; and as
otherwise applicable to construction in general. [Trish: Please Rate my references. There is
BO Seetion 3.2.1 in Dj'1. and I dOB't think 3.4 applies]
12. Grant-In-Aid; Reimbursement Agreement. The Parties agree that it is in the best
interests of the City, its residents, the Owner and the Developer for the Project to be built and
operated as envisioned in the Ground Lease and the Development Agreement. Consequently, in
full understanding and acknowledgement that each Party's agreement to perform its respective
obligations is expressly conditioned upon the other Party's agreement to perform its obligations,
and the obligation of each to perform is mutually contingent upon the other's performance, and
that but for the agreement and performance of each, this First Addendum could not succeed, the
Parties agree as follows:
(a) Owner hereby grants to Developer and agrees to pay to Developer a grant-
in-aid ("Grant") in the aggregate sum of $15,000,000 in accordance with the general terms and
conditions described in Exhibit "G" attached hereto,_and subject further to execution of a Grant
Agreement memorializing said term and specifying the manner and timelines for payment of the
Grant. Receipt of the Grant is critical to the success of the Project. The Grant is made and shall
be used for the sole purpose of defraying a portion of the Developer's capital expenses of
developing and constructing the Developer's Improvements. The Grant and all sums paid or to
be paid thereunder are not and shall not be deemed to be part of or included within, but are
separate and apart and in addition to, any and all other financial obligations of Owner
contemplated in the Ground Lease or the Development Agreement as amended by this First
Addendum.
13. Funding. Owner's funding of costs of the Garage, the Additional Improvements
and the Park Project, as applicable, shall be in accordance with the terms of this First Addendum
and the approved final budgets for said improvements, and shall be made as follows:
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(a) All costs and fees attributable to work performed by Developer on behalf
of Owner shall be identified, tracked, accounted for, invoiced and paid separately from
Developer's Improvements costs, in a manner that clearly distinguishes Owner's costs from
Developer's Improvements costs. Owner shall have the right to make payment by check or wire
transfer to the Developer.
(b) Within thirty (30) Calendar Days after the Parties' execution of this First
Addendum, Owner shall fund directly to Developer in a lump sum payment all of the costs, fees
and expenses incurred through and including the execution date of this First Addendum by
Developer on the Owner's behalf in connection with Zones 1 and 3, as detailed on Exhibit "H"
attached hereto.
(c) Section 23.2.2(v) of the original Development Agreement is_deleted in its
entirety and replaced with the following provision, which shall govern the funding, appropriation
and disbursement process for the Garage, Park Project, and Additional Improvements.
Following approval of this First Addendum by the City Commission, and execution thereof by
the Parties, Owner shall appropriate (or cause to be appropriated) funds for the respective design,
development and construction of the aforestated improvements as follows:
(i) the funding process associated with design costs for the Garage,
Park Project, and Additional Improvements, respectively, shall be appropriated and
commence within thirty (30) Calendar Calendar Days after the Parties' execution of this
First Addendum;
(ii) the funding process associated with construction of the Garage
shall be appropriated and commence no earlier than October 1, 2008;
(iii) the funding process associated with construction of the Park
Project shall be appropriated and commence no earlier than October 1, 2009;
(iv) the funding process associated with construction of the Additional
Improvements shall be appropriated and commence no earlier than October 1, 2007; and
(v) the funding process for the Grant-in-Aid (if said Grant is approved
by the City Commission) shall commence and be appropriated no earlier than October 1,
2009.
Except for the funding disbursements for the Grant (which shall be governed separately),
Developer shall be entitled to be paid by the Owner periodic progress payments ("partial
payments"), not more frequently than once per month, for the following portions of the Work
(for the Garage, Additional Improvements, and Park Project, respectively) completed and
acceptable to the Owner:
(i) For soft costs associated with the design, development and
construction of the Garage, the Additional Improvements and the Park Project, including
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but not limited to the Work of the Architectural Consultant and other consultants and
professionals, and associated with the Work under the applicable budget then in effect,
and
(ii) For hard costs associated with the design, development and
construction of the Garage, the Additional Improvements, and the Park Project, including
but not limited to the portions of the Work performed under the applicable budget then in
effect.
(iii) Partial payments shall be in an amount equal to the amounts paid
by Developer for such portions of the Work.
(iv) Such partial payments of hard costs shall constitute advances
against the GMP Contract until final payment is made and accepted. No partial payment
approved nor made shall constitute an acceptance of any Work completed not in
accordance with the approved final Plans and Specifications and/or the Final approved
budgets.
(v) The Developer may make applications for periodic progress
payments during construction by submitting to the Owner on or before the fifth (5th) day
of each month (but not more often than once a month) an itemized application for
payment ("Requisition") for those items properly payable hereunder. Each Requisition
shall be submitted in a form acceptable to both Parties, and shall be accompanied by
evidence of proper application of all prior payments, including without limitation, as to
hard costs, an unconditional partial waiver of lien, from the General Contractor and each
subcontractor, in form and substance satisfactory to the Owner, covering the full amount
of all past payments for direct construction costs through the date of such waiver of lien,
and an unconditional final waiver of lien in form and substance satisfactory to the Owner,
from each subcontractor who, as of the most recent payment, had completed the work
covered by its subcontract, covering the full amount due each subcontractor, and a
consent of surety. Developer shall also furnish such other supporting evidence as Owner
may reasonably require to establish the cost or value of the improvements and equipment
for which each hard costs payment is to be and has been made.
(vi) Each Requisition for hard costs shall be based upon the most
recent schedule of values submitted by the General Contractor. The schedule of values
shall allocate the entire Guaranteed Maximum Price among the various portions of the
Work. The schedule of values shall be prepared in such form and supported by such data
to substantiate its accuracy as the Owner may reasonably require. This schedule, unless
objected to by the Owner, shall be used as a basis for reviewing the Developer's
Requisition. Requisitions shall show the percentage completion of each portion of the
Work as of the end of the period covered by the Requisition.
(d) The Owner, within thirty (30) Calendar days after receipt of the
Requisition, will pay an approved Requisition to the Developer for such amount as the Owner
determines to be properly due, and if it objects to and withholds funding for any item or amount,
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shall state in writing the reasons for such action. The Developer, after receipt of an objection to
funding, shall disprove or cure such objection or the Parties shall otherwise work in good faith to
resolve such objection. Each claim, question, difficulty or dispute which cannot be resolved by
mutual agreement of the Owner and Developer shall be resolved in accordance with the
procedure set forth in Exhibit "I" attached hereto.
14. Substantial Completion; Final Completion. The construction of individual
improvements within a Zone or other portion of the Garage or Additional Improvements or the
Park Project may go forward and be completed in accordance with different schedules, Permits
and Approvals. Therefore, the portions of Work within a Zone or portion of the Garage, or
Additional Improvements, or the Park Project which have been permitted by different Permits
and Approvals shall be deemed to have been completed in substantial accordance with the
approved Final Plans and Specifications thereof, as they may be modified from time to time upon
mutual agreement of the Parties, notwithstanding that minor adjustments may be required by
Developer or minor errors or omissions may require correction, provided that such adjustments
and corrections are made within a reasonable amount of time after discovery of same. Owner
shall be solely responsible for all costs, fees and expenses properly incurred by Developer in
connection with this Section. As such portion of Work under such Permits and Approvals is
completed, Developer shall submit to Owner the final "as built" approved Final Plans and
Specifications for such portions of Work within a Zone or other portion of the Garage or
Additional Improvements or Park Project, and any additional costs properly incurred by
Developer which may be due and owing shall be paid in full by Owner to Developer within
thirty (30) Calendar Days after such submittal. All payments shall be made in cleared U.S.
funds.
(a) When the Developer determines that there has been achieved Substantial
Completion of Work constituting a portion of the Work for the Garage or the Additional
Improvements or the Park Project, which the Owner agrees to accept separately, the Developer
shall submit to Owner, for Owner's acceptance and approval:
(i) A Temporary Certificate of Occupancy (TCO) or Temporary
Certificate of Completion (TCC), as applicable, for the Work duly issued by the
Governmental Authority having jurisdiction thereof;
(ii) The Architect's Certificate of Substantial Completion stating that
on the basis of observations and inspections, the referenced Work (for the Garage or the
Additional Improvements or the Park Project, as applicable) has been substantially
completed in accordance with the applicable contract documents and the approved Final
Plans and Specifications in all material respects; stating the responsibilities of Owner and
Developer (if any) for security, maintenance, utilities, damage to the Work, and
insurance; listing all Work yet to be completed to satisfy the requirements under the
applicable contract documents and approved Final Plans and Specifications, for Final
Completion. The failure to include any items of corrective Work on such list shall not
alter the responsibility of Developer to complete all of the Work in accordance with the
GMP Contract, the approved Final Plans and Specifications, or the Development
Agreement and this First Addendum; and
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(iii) A Requisition for payment for such Work.
Upon receipt of the foregoing, and Owner's approval of the Certificate of
Substantial Completion, Owner shall pay the Requisition in accordance with the provisions of
this Addendum.
(b) When the Developer has received from the Contractor: a Final
Contractor's Affidavit and Final Lien Waivers in accordance with Chapter 713, Florida Statutes;
a written notice that the Work is ready for final inspection and acceptance; and a final application
for payment, Developer and Architect will promptly make such inspection, and when Developer
determines that Final Completion of the Work has been achieved, the Developer shall submit to
Owner, for Owner's acceptance and approval:
(i) A Final Certificate of Occupancy (CO) or Final Certificate of
Completion (CC), as applicable, for the Work duly issued by the Governmental Authority
having jurisdiction thereof;
(ii) The Architect's Certificate of Final Completion, approved by the
Developer, stating that on the basis of observations and inspections, the referenced Work
(for the Garage or the Additional Improvements or the Park Project, as applicable) has
been fully performed and all such Work has been completed in accordance with the
applicable contract documents and the approved Final Plans and Specifications in all
material respects, and that the entire balance found to be due the Contractor and noted in
the final Certificate is due and payable;
(iii) A final Requisition for payment;
(iv) Copies of all agreements, Permits, and Licenses, and all insurance
policies or certificates, if any, pertaining to the completed Work;
(v) All manufacturers,' suppliers' and subcontractors' warranties duly
assigned to the Owner (the "Warranties), and all maintenance and operating instructions
if any, pertaining to the completed Work.
( c) Upon receipt of the foregoing, and Owner's approval of the Certificate of
Final Completion, Owner shall pay the Final Requisition in accordance with the provisions of
this Addendum. Developer's acceptance of final payment from Owner shall constitute a waiver
of all claims by Developer against the City, except those previously made in strict accordance
with the applicable provisions of the Development Agreement and this First Addendum and
identified by Developer as unsettled at the time of acceptance of final payment.
(d) Following Substantial Completion, Owner's entry into possession of any
portion of the Garage or the Additional Improvements or the Park Project, as evidenced by the
use thereof by Owner (the date such use first occurs being the "Possession Date" as to the
portion occupied), will constitute acknowledgment by Owner that the occupied portion is in the
condition in which Developer was required to deliver it under the terms of the GMP Contract and
the Development Agreement, as amended by this First Addendum, and that Developer has
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performed all of its obligations relating to the design, development and construction thereof;
provided, however that Owner's entry into possession of any of the aforestated project
components shall not be deemed a waiver of any rights Owner may have against Contractors
pursuant to subsection 14( e) hereof.
(e) Notwithstanding anything contained in the Development Agreement or
this First Addendum, the making of final payment shall not constitute a waiver of claims by
Owner for: (i) faulty or defective Work appearing after Owner's approval of Architect's
Certificate of Final Completion; (b) failure of the Work to be in strict accordance with the
requirements of the GMP Contract, or the approved Final Plans and Specifications, eF--the
Development ,^.greemont and this First ,^.ddondum, discovered after completion of the Work; and
(c) terms of all Warranties required by the applicable contract documents. Notwithstanding the
preceding sentence, however, Owner agrees that in the event of discovering any defective Work
in construction from the approved Final Plans and Specifications, including latent defects.
Developer shall have no liability for any defective Work, and Owner acknowledges and agrees
that it will look solely to the Contractors, subcontractors and suppliers and/or the Warranties for
relief in connection with any claim arising from any defects. Accordingly, Developer hereby
acknowledges and agrees that Owner is intended to be a third party beneficiary to Developer's
agreement(s) with Contractors and other aforestated parties and shall, accordingly, comply with
the provisions of Section 19 hereof.
(f) Developer shall cause its construction manager, Hines Interests Limited
Partnership, to fully cooperate with and assist Owner in resolution of any issues with regard to
Owner's claims for defects, Warranty issues, and/or other post-construction issues contemplated
in subsection 14( e) above, as they may arise. Construction manager's fees and costs shall be
bourne by Owner, provided however that construction manager shall continue to charge Owner
the same rates and fees that it consistent with rates and fees that are charged to Developer for
construction management of the Project and Park Project.
(g) All Warranties shall commence on the date of Final Substantial
Completion of the Work or designated portion thereof, unless otherwise provided in the CO or
CC.
15. Changes to Work; Change Orders; Owner Consent. The Parties understand that
during the construction phase of the Garage, the Additional Improvements and the Park Project,
situations may arise that would require Gfhanges to be made to the Work, the approved Final
Plans and Specifications, the completion date, the Final Park Project Budget, the Final Garage
Budget, the Final Additional Improvements Budget, or other similar matters ("Changes").
Changes shall be dealt with in the following two (2) ways.
(a) Draw Against Contingency. The Final Park Project Budget, the Final
Garage Budget and the Final Additional Improvements Budget each will include a construction
contingency reserve ("Owner's Contingency"), which shall be in addition to any construction
contingency reserve included within the Guaranteed Maximum Price ("Contractor's
Contingency"). The Owner's Contingency amount will not be disclosed to third parties. The
proposed Contractor's Contingency shall be in an amount which the Developer believes, in its
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best judgment, is reasonable to cover construction-related costs which were not specifically
foreseeable or quantifiable as of the date the Guaranteed Maximum Price was established,
including but not limited to the following: correction of minor defects or omissions in the Work
not caused by the Developer's negligence; cost overruns due to the default of any subcontractor
or supplier; minor changes caused by unforeseen or concealed site conditions; and minor
changes in the Work not involving adjustment in the Guaranteed Maximum Price or extension of
the completion date and not inconsistent with the approved Final Plans and Specifications and
the Development Agreement, as amended by this First Addendum.
(i) Draws may be charged against the Contractor's Contingency only
with the Owner's written consent, which shall not be unreasonably withheld or delayed.
The Contractor's Contingency excludes, and shall not be used for, costs incurred to
demobilize and remobilize due to suspensions ordered by the Owner, or for Owner-
requested Changes to the scope of the Work, all of which are to be treated only by
Change Order.
(ii) Draws may be charged against the Owner's Contingency only with
the Owner's written consent. which shall not be unreasonably withheld or delayed.
Wfiii) Upon making a draw against either the Owner's or the
Contractor's Contingency, the Developer shall increase the relevant budgeted line items
by the amount of the draw, and decrease the respective Contingency line item
accordingly. The Developer shall maintain records satisfactory to the Owner to document
each draw against each Contingency.
fiv) Any remaining amounts in the Contractor's Contingencv
remammg after Final Completion shall be divided equally between Owner and
Developer.
(b) Change Orders. As material site issues and/or Unavoidable Delays arise,
the Developer shall coordinate the processing of Change Orders and will negotiate, for final
approval and execution by Owner, all Change Orders with Contractor. Developer shall submit a
proposed Change Order to Owner within a reasonable period of time prior to commencement of
Work relating to any proposed Change that is not properly eligible for payment from the
Contingency. Requests for any Change Order shall be submitted on a change order form
acceptable to Owner, signed by Developer, the General Contractor, and, if required by Owner,
also by the Architectural Consultant, and shall include a written description of the proposed
Change, the justification therefore, and supporting documentation. At its option, Owner may
require Developer to provide additional evidence satisfactory to Owner of the cost and time
necessary to complete the proposed Change. The appropriate budget and/or Project Schedule, as
applicable, will be revised, as necessary, to reflect approved Change Orders.
(i) In the event, by reason of Una'.'oidablo Delays or otherv;ise, the Owner
requests a Change to the scope of \V ork or systems, kinds or quality of materials, finishes
or equipment; or the O'Nner orders an acceleration or resequcncing of '\V ork; or the
O'.vner requiros scope changes to be made to tho Park Project, the /...dditional
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Improvements or the Garage after the Guaranteed Maximum Price has been established,
all costs pertaining to or associated \vith making such Changes shall be the sole
responsibility of O'.vner and may not and shall not be funded from the Contractor's
Contingency ('.:'.'ith the exception of Changes due to delays, including '.vithout limitation
Unavoidable Delays, which shall not require Ovmer to appro'/e, or otherwise result in, a
Change Order for an increase in costs, but shall only require, if approved, a Change Order
for an extension of the timos f-or performanee set forth in the Development Agreement
and this First /\.ddendum; all as further set forth in subsection 15(b )(iii) hereof).
(i) In the event, by reason of Unavoidable Delays or otherwise, the
Owner requests a Change to the scope of Work or systems, kinds or quality of materials,
finishes or equipment; or the Owner orders an acceleration or resequencing of Work; or
the Owner requires scope changes to be made to the Park Proiect, the Additional
Improvements or the Garage after the Guaranteed Maximum Price has been established
(all of the foregoing, individually or collectively, "Sco?e Changes"), all costs pertaining
to or associated with making such Scope Changes shall be the sole responsibility of
Owner, and shall include those costs incurred when the Owner's Change Order regarding
a portion of the Park Proiect, the Additional Improvements or the Garage causes
additional costs to be incurred in connection with another portion of the Development
Site. Scope Changes may not and shall not be funded from the Contractor's
Contingency, but shall be funded by Owner either from the Owner's Contingency or from
other funds of Owner. Notwithstanding anything herein to the contrary, Owner's
responsibility to pay the foregoing costs is not and shall not be conditioned upon whether
there are sufficient funds, or any funds, in Owner's Contingency to pay such costs.
Owner's obligation to fund such costs in accordance with this Section 15 shall be in
addition to and not part of its obligation to fund the scheduled amounts contained in the
GMP contracts for the Park, the Garage, and the Additional Improvements.
(ii) Change Orders submitted to Owner in accordance with this
Section 15 shall be reviewed and approved by Owner in a timely and reasonable manner.
Developer shall at all times maintain, for inspection by Owner, a full set of working
drawings of the Improvements.
(iii) No Damages for Delay, No claim for damages or any claim, other
than for an extension of time, shall be made or asserted against Owner by reason of any
delay including, without limitation, Unavoidable Delays and/or any delays in the design,
development and construction of the Project which may arise as a result of Owner's
election not to proceed with the Park Project. Developer (and including without
limitation its Contractor and all of Developer's agents, employees, contractors,
consultants and professionals, including without limitation Architectural Consultant)
shall not be entitled to claim, nor shall Owner have any obligation to fund, a Change
Order, and/or other claims(s) or request(s) for an increase to the Final Budgets, or other
payment or compensation of any kind from Owner, for direct, indirect, consequential,
impact or other costs, expenses or damages, arising because of delay, disruption,
interference or hindrance from any cause whatsoever, including but not limited to
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Unavoidable Delays and/or any delays in the design, development and construction of the
Project which may arise as a result of Owner's election not to proceed with the Park
Project. Provided, however, that this subsection shall not precludeinc1udc recovery of
damages by Developer for actual delays due solely to fraud, bad faith or active
interference on the part of Owner. Otherwise, Developer shall be entitled only to
extensions of time for performance as the sole and exclusive remedy for delay(s), in
accordance with and to the extent specifically provided above.
16. Casualty Damage/Destruction of Park Proiect/Park Proiect Zone.
Following the Park Project Zone Possession Date, in the event the Park Project and/or the
Park Project Zone shall be damaged or destroyed, in whole or in any material way, as determined
by Owner, by fire, hurricane, flood or other casualty (hereinafter, collectively referred to as the
"damaged property"), Owner, at its sole option and discretion, shall have the right to elect not to
repair or restore the damaged property.
(a) Notwithstanding the foregoing, in the event
(i) Owner elects not to restore or repair the damaged property; and
(ii) Developer gives written notice to Owner within sixty (60)
Calendar Days of the casualty that Developer is willing to repair/restore the damaged
property with its own funds; and
(iii) Within six (6) months following such notice, Developer proves, to
Owner's sole satisfaction and discretion, that it has adequate funds immediately available
to effect the repair/restoration; and
(iv) Owner and Developer, each acting in its reasonable discretion,
agree within sixty (60) Calendar Days after Owner deems that Developer has
demonstrated that it has adequate funds to effect the repair/restoration, to the conditions,
timing, plans, procedures, contractors, subcontractors, disbursement mechanisms and
other matters with respect to the repair/restoration,
Developer shall be entitled to effect the repair/restoration with its own funds. Developer
shall commence and complete such repair/restoration within a reasonable period of time.
(b) Further, in the event neither Owner nor Developer elects to repair or
restore the damaged property, as set forth above, Owner shall remove all above-ground
improvements and debris from the Park Project Zone, and return the Park Project Zone to a safe
and sightly condition with a reasonably level grade, within a reasonable period of time.
17. Miscellaneous.
(a) Compliance with Comprehensive Plan. The Owner has adopted and
implemented the Comprehensive Plan. The Owner hereby finds and declares that the provisions
of this First Addendum and the Development Agreement dealing with the Land and the Park
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Project Zone and the approval of any Park Project Design shall be consistent with the Owner's
adopted Comprehensive Plan and Land Development Regulations, subject to all applicable
Requirements, Permits and Approvals.
(b) Counterparts. To facilitate execution, the Parties hereto agree that this
First Addendum may be executed in counterparts as may be required and it shall not be
necessary that the signature of, or on behalf of, each Party, or that the signatures of all persons
required to bind any Party, appear on each counterpart; it shall be sufficient that the signature of,
or on behalf of, each Party, or that the signatures of the persons required to bind any Party,
appear on one or more of such counterparts. All counterparts shall collectively constitute a
single First Addendum.
(c) References. All references in the Development Agreement to the
"Agreement" shall hereafter mean and refer to the Development Agreement as amended by this
First Addendum. If there is a contradiction between the terms of the Development Agreement
and this First Addendum, then the terms of this First Addendum shall control. Facsimile
signatures appearing hereon shall be deemed an original.
(d) Effect of First Addendum. Except as modified herein, the Development
Agreement remains in full force and effect. In the event of any conflict or ambiguity between
the Development Agreement and this First Addendum, this First Addendum shall control.
18. Exhibits. The following exhibits are attached to this First Addendum and made a
part hereof.
19. Third Party Beneficiary. Developer and Owner agree and acknowledge that with
respect to the design, development and construction of the Garage, Additional Improvements,
and the Park Project, Owner is an intended third party beneficiary in any contract entered into
between 1) Developer and Architect (but excluding Architectural Consultant); 2) Developer
and Contractors, including without limitation the GMP Contract and/or any contracts entered
into with any respective subcontractors and/or sub consultants of Architect and Contractors
(excluding Architectural Consultant). Accordingly, Developer herein represents to Owner that
its agreement(s) with 1) Architect, 2) Contractor, and 3) with any respective subcontractors
and/or subconsultants of Architects and Contractors (excluding Architectural Consultant), shall
incorporate the terms and conditions of the Development Agreement, as amended by this First
Addendum, and Developer shall assume sole and absolute responsibility for binding Architect,
Contractor, and their applicable respective sub consultants and subcontractors (excluding
Architectural Consultant) to same as if Owner were a party to those agreements.
[Signatures commence on following page]
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EXECUTION BY OWNER
IN WITNESS WHEREOF, Owner and Developer intending to be legally bound have
executed this First Addendum to Development Agreement as of the day and year first above
written.
WITNESSES:
CITY OF MIAMI BEACH, FLORIDA, a
municipal corporation of the State of Florida
Print Name:
By:
ATTEST:
Print Name:
By:
[SEAL]
STATE OF FLORIDA )
)ss:
COUNTY OF MIAMI-DADE )
The' foregoing instrument was acknowledged before me this day of
by , as Mayor, and , as
City Clerk of the CITY OF MIAMI BEACH, FLORIDA, a municipal corporation of the State
of Florida, on behalf of such municipal corporation. They are personally known to me or
produced valid Florida driver's licenses as identification
My commission expires:
Notary Public, State of Florida
Print Name:
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EXECUTION BY DEVELOPER
WITNESSES:
THE NEW WORLD SYMPHONY, a not-for-
profit Florida corporation
Print Name:
By:
Howard Herring, President and CEO
Print Name:
ATTEST:
By:
, Secretary
[CORPORATE SEAL]
STATE OF FLORIDA )
)ss:
COUNTY OF MIAMI-DADE )
The foregoing instrument was acknowledged before me this _ day of
, by Howard Herring, as President and CEO, and , as Secretary,
of THE NEW WORLD SYMPHONY, a not-for-profit Florida corporation, on behalf of such
corporation. They are personally known to me or produced valid Florida driver's licenses as
identification.
My commission expires:
Notary Public, State of Florida
Print Name:
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List of Exhibits
Exhibit "A" Legal Description of Land
Exhibit "B" Article 1 - Definitions from Original Development Agreement
Exhibit "C" Legal Description of Garage Property
Exhibit "D" Procedure for Obtaining Park Project Approval
Exhibit "E" Sketch of Improvement Zones
Exhibit "F" Definition of Vanilla Shell Retail Space
Exhibit "G" Terms of Payment of Grant-in-Aid
Exhibit "H" Costs, Fees and Expenses Incurred by Developer Through
2007, in connection with the Park Project and the Garage Project
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Exhibit "I" Dispute Resolution Procedures
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Exhibit "F"
Definition of Vanilla Shell Retail Space
V anilla Shell Retail Space" shall mean a construction space prepared by the Developer for the
O'Nner which shall include (i) concrete slab floor broom sv;ept, (ii) weathertight space including
all storefront, glass '.vindo\vs, insulated exterior ,valls and concrete ceiling slab, (iii) no demising
'.valls between retail spaoes or interior partitions shall be installed, (iy) one exterior door per
retail space, (y) central electrical room with one retail eleotrical service (vi) one 3" empty
electrical cORduit from the demising line of each retail space to the central electrical room,
(yii) one 2" empty electrical oonduit from the deminsing line of each retail space to the central
fire alarm room, (yiii) fire protection main line installed above the typical ceiling elevation of
eaoh retail spaee and oapped, (ix) a 2" diameter domestic water line '.vith shut offval'/8 installed
abo';e the typioal eeiling elevation of each retail space, (x) a 1" capped sanitary sewer stub out in
one location to each retail space capped, (xii) retail tenants' HV,^..C condenser Uflits and
installation of HV}..C piping for this equipment, (xii) no gas service shall be brought to any retail
space, (xiii) no grease trap shall be provided for any retail spaoe, (xi'.') normal fresh air and
exhaust air grilles shall be designed f-or each retail spaee with blank off plates, (xv) no large
kitchen exhaust duct or path shall be provided from any retail space to the exterior of the garage.
Vanilla Shell Retail Space" shall mean a construction space prepared by the Developer for the
Owner which shall include (i) concrete slab floor broom swept, (ii) weathertight space including
all storefront, glass windows, insulated exterior walls and concrete ceiling slab, (iii) no demising
walls between retail spaces or interior partitions shall be installed, (iv) one exterior door per
retail space, (v) central electrical room with one retail electrical service (vi) one 3" empty
electrical conduit from the demising line of each retail space to the central electrical room,
(vii) one 2" empty electrical conduit from the deminsing line of each retail space to the central
fire alarm room, (viii) fire protection main line installed above the typical ceiling elevation of
each retail space and capped, (ix) a 2" diameter domestic water line with shut off valve installed
above the typical ceiling elevation of each retail space, (x) a 4" capped sanitary sewer stub out in
one location to each retail space capped, (xi) a dedicated location on the roof of the Garage for
retail tenants' HV AC condenser units and an obstruction-free path from this dedicated location to
each retail space for tenants' installation of HV AC piping for this equipment provided that
Owner shall have the option to add by Change Order HV AC condenser units if the specifications
and costs are identified so as not to impair the critical path for the Garage, (xii) no gas service
shall be brought to any retail space, (xiii) no grease trap shall be provided for any retail space,
(xiv) normal fresh air and exhaust air grilles shall be designed for each retail space with blank off
plates, (xv) no large kitchen exhaust duct or path shall be provided from any retail space to the
exterior of the garage.
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Exhibit "G"
General Terms and Conditions for Grant-in-Aid (Grant)
(Note: These terms and conditions are subject to execution by the Parties of a Grant Agreement)
Owner shall pay the Grant to Developer, by check or wire transfer as follows:
· Owner will provide $15 million in supplemental funding for the NWS Campus
Expansion Project as it is needed.
· Developer must expend $135 million towards the Campus Expansion Project
(Developer's Improvements) before Owner is obligated to release any Grant
funds.
· Qualifying expenditures for Grant funding include fees for Architect,
Architectural Consultant and their respective sub consultants; fees for the
construction manager, Hines Interest Limited Partnershipsl; fees for Permits and
Approvals: fees fort Prolect related Project engineerin& tests, and borings; and
fees for Contractors and Project construction costs.
-Developer must demonstrate evidence, to Owner's reasonuble satisfaction, that the
Project is fully funded and in balance before O'vVner is obligated to release any
Grant funds (i.e., if the Projeot cost exceeds S 150 million, then Developer \-vill
need to shov+' the source of the funding abO'/0 the $150 million).
· In the event the costs of the Campus' Expansion Proiect are anticipated by
Developer to exceed $150 million, Developer must provide evidence reasonably
satisfactory to Owner of the source( s) of funding above $150 million
· Grant funds will be available no earlier than October 1, 2009, and will be
provided on an "as-needed" basis.
-O'Nner and De'.'eloper '.vill split, fifty/fifty, any unspent Grant funds (if any).
· Owner and Developer will split fifty/fifty any unspent Grant funds (if any), and in
such event the City shall fund to Developer its fifty percent share of such unspent
funds within 60 calendar days after Developer certifies that all Campus Expansion
proiect expenses have been identified.
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. Developer will provide Owner with 180 Calendar Days advanced notice of
Developer's intent to begin drawing funds on the Grant. Developer will follow-
up with a second 60 Calendar Days advanced notice so Owner may institute its
internal disbursement process in a timely manner. All draws against the Grant
shall be made pursuant to the procedures set forth in Section 13 of the First
Addendum.
. Developer agrees to provide Owner with an Option to purchase the Lincoln
Theater; at a price to be determined through a comparison of the City appraisal, a
Developer appraisal, and such further negotiations as the Parties may deem
necessary. This option will be valid through December 31, 2007.
. Public Benefits (to be provided by Developer as further consideration for the
Grant) will be developed and agreed upon mutually between the Parties, prior to
the Possession Date.
. Developer is also pursuing a grant-in-aid, in the aggregate sum of $30,000,000,
from Miami-Dade County ("the County Grant") for the purpose of defraying a
portion of the Developer's capital expenses of developing and constructing the
Developer's Improvements. Receipt of the County Grant is critical to the success
of the Project. Developer agrees that in the event it is not able to obtain the
County Grant, which commitment is reasonably satisfactory to Developer and to
Owner, and such inability to obtain the County Grant causes Developer to
terminate the Ground Lease and Development Agreement pursuant to Section
2.11 of the Development Agreement, then Developer shall become obligated to
and shall promptly reimburse Owner for its share of costs through the date of
termination, as provided in this First Addendum. Developer shall not undertake
any design work on the Garage or the Park, with the exception of such work
already completed and referred to in Exhibit H, until after the County Grant is
secured.
. In the event the County agrees to timely make the County Grant but, prior to the
Commencement of Construction of the Project, Developer terminates the Ground
Lease and the Development Agreement for any reason other than as permitted in
Section 2.1l( e) and (t) of the Development Agreement, then, in addition to any
and all remedies Owner may have as a result of such termination, if any,
Developer agrees to promptly reimburse Owner for all of its share of costs
through the date of termination, without demand by Owner.
. Owner's obligation to fund all or any portion of the Grant is subject to and
contingent upon such funding continuing to be allowed and permissible pursuant
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to applicable Florida law, as same may be amended from time to time. In the
event that Owner's performance and obligation to Developer with respect to the
Grant is rendered impossible by applicability oflaw(s), then the Parties agree that
Owner's obligation shall be extinguished, and that neither Party shall have any
further liability to the other with respect to this Grant.
· The Parties agree that Ovmer shall be eHtitled to place and maintain a dedicatory
plaque on the exterior portion of the NV/S Campus Expansion building, vihioh
plaque shall acknowledge the City of Miami Beach's oontribution to the facility
and the Project; pro','ided, hov:6ver, that in no event shall such dedicatory plaque
be placed (i) without the mutual agreement of the Parties as to the location, and
size, design, and such other specifications to the plaque as the Parties may deem
necessary; (ii) the plaque is not intended, nor at any time shall it be used for
commercial or sponsorship purposes, or on behalf of a non City of Miami Beach
affiliated third parties; and (iii) O'.vner shall be solely responsible for all costs
related to the design, de':610prnent, fabrication, installation, and maintenance of
said plaque, including replacement of same (due to damage or otherwise).
· The Parties agree that Owner shall be entitled to appropriate, mutually agreeable
permanent recognition for its contributions to the NWS Campus Expansion
Proiect in accordance with such recognition provided to other donors to the
Proiect.
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Exhibit "I"
Resolution of Disputes:
1) To prevent all disputes and litigation, with respect to the Garage, Additional
Improvements, Park Project and Infrastructure Improvements, it is agreed by the parties hereto
that the Architect shall decide all questions, claims, difficulties and disputes of whatever nature
which may arise relative to the technical interpretation of the approved Final Plans and
Specifications and fulfillment of the applicable portions of the GMP Contract, as to the
character, quality, amount and value of any Work done and materials furnished, or proposed to
be done or furnished under or, by reason of, the GMP Contract, and Architect's estimates and
decisions upon all claims, questions, difficulties and disputes shall be final and binding to the
extent provided in Paragraph 2 below. Any claim, question, difficulty or dispute which cannot
be resolved by mutual agreement of Owner and Developer shall be submitted to Architect in
writing within twenty-one (21) Calendar Days. Unless a different period of time is set forth
herein, Architect shall notify Owner and Developer in writing of Architect's decision within
twenty-one (21) Calendar Days from the date of the submission of the claim, question, difficulty
or dispute, unless Architect requires additional time to gather information or allow the parties to
provide additional information. All nontechnical administrative disputes shall be determined
mutually by representatives of the Owner and Developer pursuant to the time periods provided
herein. During the pendency of any dispute and after a determination thereof, Owner,
Developer, and Architect shall act in good faith to mitigate any potential damages including
utilization of construction schedule changes and alternate means of construction.
2) In the event the determination of a dispute under this Exhibit "I" is unacceptable
to either Party hereto, the Party objecting to the determination must notify the other Party in
writing within ten (10) Calendar Days of receipt of the written determination. The notice must
state the basis of the objection and must be accompanied by a statement that any contract price
adjustment claimed is the entire adjustment to which the objecting Party has reason to believe it
is entitled to as a result of the determination. Within sixty (60) Calendar Days after Final
Completion of the Work, the Parties shall participate in mediation to address all objections to any
determinations hereunder and to attempt to prevent litigation. The mediator shall be mutually
agreed upon by the Parties. Should any objection not be resolved in mediation, the parties retain
all their legal rights and remedies provided under State law. A Party objecting to a determination
specifically waives all of its rights provided hereunder, including its rights and remedies under
State law, if said Party fails to comply in strict accordance with the requirements of this Exhibit
"I".
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