2009-27073 ResoRESOLUTION NO. 2009-27073
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, APPROVING ON FIRST READING, A
LEASE AGREEMENT BETWEEN THE CITY AND DAMIAN J. GALLO &
ASSOCIATES, INC. (D/B/A PERMIT DOCTOR), FOR USE OF 1,802.89
SQUARE FEET OF CITY-OWNED PROPERTY, LOCATED AT 1701
MERIDIAN AVENUE, UNIT 2 (A/K/A 767 17T" STREET), MIAMI BEACH,
FLORIDA; SAID LEASE HAVING AN INITIAL TERM OF THREE YEARS,
WITH AN ADDITIONAL THREE YEAR RENEWAL TERM, AT THE CITY'S
SOLE DISCRETION; WAIVING BY 5/7THS VOTE, THE COMPETITIVE
BIDDING AND APPRAISAL REQUIREMENTS, AS REQUIRED BY
SECTION 82-39 OF THE MIAMI BEACH CITY CODE; FURTHER SETTING
A PUBLIC HEARING ON JUNE 3, 2009, FOR THE SECOND READING
(AND FINAL APPROVAL) OF THE LEASE AGREEMENT
WHEREAS, on October 17, 2001 the City Commission adopted Resolution No.
2001-24661, authorizing the purchase of 1701 Meridian Avenue with the intention of
preserving the retail environment on the ground floor of the property; and
WHEREAS, the City has been leasing to the Vidal Tan Soon, Inc. a portion of the
City-owned property, located at 1701 Meridian Avenue, Unit 2 (a.k.a. 775 17th Street),
Miami Beach, Florida, under the terms and conditions of that certain Lease Agreement,
dated April 15,2004; and
WHEREAS, Vidal Tan Soon, inc. closed its business and thereafter requested that
the Mayor and City Commission approve a Second Amendment and Assignment of the
Lease Agreement to Damian J. Gallo & Associates, Inc., commencing on September 15,
2006 and expiring on April 14, 2009 for the 1802.89 square feet of City-owned property
which was currently under their leasehold; and
WHEREAS, at the meeting of September 6, 2006, the City Commission adopted
Resolution No. 2006-26282, approving the Second Amendment and Assignment of the
Lease Agreement to Damien J. Gallo & Associates, Inc.; and
WHEREAS, Damien J. Gallo & Associates has requested a new lease for those
premises, for an initial term of three years, commencing July 1, 2009 and ending June 30,
2012, with one additional three year renewal term to continue providing building plan and
permit processing services in their current space; and
WHEREAS, Section 82-39 of the Miami Beach City Code, governing the sale/lease
of public property, requires a competitive bidding process, a Planning Department analysis,
and an independent appraisal to determine the value of the leasehold interest, as well as
two (2) readings of the proposed lease, with the second (and final) reading followed by an
advertised public hearing to obtain citizen input; and
WHEREAS, the Administration would hereby recommend that the Mayor and City
Commission approve the attached Lease Agreement on first reading, and hereby set the
public hearing on June 3, 2009, for second reading and final approval of the Agreement;
and
WHEREAS, Section 82-39 of the City Code further provides for the waiver of the
competitive bidding and appraisal requirements, by 5/7ths vote of the Mayor and City
Commission, for leases of City land, upon a finding by the Mayor and City Commission that
the public interest would be served by waiving such conditions; the Administration would
also hereby recommend that the Mayor and City Commission approve said waiver.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission hereby approve on first reading, a Lease Agreement between the City and
Damian J. Gallo & Associates, Inc. (d/b/a Permit Doctor) for use of 1802.89 square feet of
City-owned property, located at 1701 Meridian Avenue, Unit 2 (a/k/a 767 17th Street),
Miami Beach, Florida for an initial term of three years, with an additional three year renewal
term, at the City's sole discretion, and waiving by 5/7ths vote, the competitive bidding and
appraisal requirements, as required by Section 82-39 of the Miami Beach City Code;
further setting a public hearing on June 3, 2009, for the second reading (and final approval)
of the Lease Agreement.
PASSED and ADOPTED this 13th day of May, 2009.
ATTEST:
~L~~~
Robert Parcher, CITY CLERK atti Herre a ower, MAYOR
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5'1509
COMMISSION ITEM SUMMARY
Condensed Title:
Request for Approval for a Lease Agreement between the City and Damien J. Gallo & Associates, Inc. for use of 1802.89 SF of
City-owned property located at 1701 Meridian Avenue, Unit 2, for a term of three years, with an additional three year renewal term,
waiving by 5/7ths vote the competitive bidding and appraisal requirements as required by Section 82-30 and setting a public
hearing on June 3, 2009 for second reading and public hearing.
Key Intended Outcome Supported:
To Ensure Well-Maintained Facilities
Supporting Data (Surveys, Environmental Scan, etc.): 83% of residents surveyed felt that recent capital improvement projects
were either excellent or good.
Issue:
Should the Ci a rove the lease a reement?
Item 5ummarv/R@COmmentlatlOn:
FIRST READING
In 2001, the City Commission authorized the purchase of 1701 Meridian Avenue to address the City's ongoing need for
administrative office expansion. Also in consideration was the preservation of a retail environment on the ground floor of the
property. When the City purchased the building, Vidal Tan Soon, Inc. had been an existing tenant of retail space since 1994.
When Vidal Tan Soon, Inc. closed its business operations, the Mayor and City Commission approved a Second Amendment and
Assignment of the Lease Agreement to Damian J. Gallo & Associates, Inc. (d/b/a The Permit Doctor, and hereinafter referred to as
"Gallo"), effective September 15, 2006, and expiring on April 14, 2009. The assigned lease governed approximately 1,700 square
feet of City-owned property. The square footage was corrected to1802.89 per a 2008 City survey. Gallo will continue to lease
space at the same location on a month-to-month basis until a new lease is fully approved by the City Commission. The proposed
new lease will incorporate the following terms:
• Square Footage: 1802.89 per updated 2008 City survey.
• Rent: Tenant has agreed to a rent increase from the currently paid $37.40 per SF to $40 per SF, including Common Area
Maintenance (which includes maintenance, real estate taxes, and insurance);
• Use and Possession: The leased Premises would be used for the purpose of providing a variety of services relating to
building development, including building plan and permit processing services. The Tenant hereby represents and warrants
to the City that it shall in noway, whether express or implied, give the impression that Tenant is in any way acting as an
agent and/or representative of the City of Miami Beach, nor that, by virtue of the Agreement, does the Tenant derive any
special benefit and/or consideration from the City (acting in its regulatory capacity) with regard to Tenant's provision of plan
and permit processing services to third parties;
• Security Deposit: Upon execution of the Agreement, the Tenant will furnish the City a Security Deposit in the sum of
$6,000.
Section 82-39 further provides for the waiver of the competitive bidding and appraisal requirements, by 5/7ths vote of the Mayor
and City Commission, upon a finding by the Mayor and City Commission that the public interest would be served by waiving such
conditions. At the March 10, 2009 of the Finance and Citywide Projects Committee, the Committee determined that it was in the
public's best interest to forgo competitive bidding and staff should proceed in leasing the identified leaseable space in 1701
Meridian according to market rates and industry standards.
A Planning Department analysis finds that the use of this area as retail space is consistent with the land use designation contained
in the Comprehensive Plan (attached).
This item was deferred at the April 22, 2009 Commission
Adviso Board Recommendation:
Financial Information:
Source of Amount Account
Funds: n/a 1 n/a
Financial Impact Summary:
Ci Clerk's Office Le islative Trackin
Ana Cecilia Velasco extension 6727
Si n-Offs:
Department Director A si ity ana r City Man
AP HF JMG
T.~IAGENDA120091May 131Regu/arIGALLO Lease Agreement SUM.doc
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AGENDA ITE14A R7~
DATE 5~~~-~9
m MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, veww.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti H. Bower and Members of the Cit ommission
FROM: Jorge M. Gonzalez, City Manager
DATE: May 13, 2009 FIRST READING
suB~ECT: A RESOLUTION APPROVING ON FIRST READING, A LEASE AGREEMENT
BETWEEN THE CITY AND DAMIAN J. GALLO & ASSOCIATES, INC. (D/B/A
PERMIT DOCTOR), FOR USE OF 1,802.89 SQUARE FEET OF CITY-OWNED
PROPERTY, LOCATED AT 1701 MERIDIAN AVENUE, UNIT 2 (A/K/A 76717x"
STREET), MIAMI BEACH, FLORIDA; SAID LEASE HAVING AN INITIAL TERM
OF THREE YEARS, WITH AN ADDITIONAL THREE YEAR RENEWAL TERM,
AT THE CITY'S SOLE DISCRETION; WAIVING BY 5/7THS VOTE, THE
COMPETITIVE BIDDING AND APPRAISAL REQUIREMENTS, AS REQUIRED
BY SECTION 82-39 OF THE MIAMI BEACH CITY CODE; FURTHER SETTING A
PUBLIC HEARING ON JUNE 3, 2009, FOR THE SECOND READING (AND
FINAL APPROVAL) OF THE LEASE AGREEMENT
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
BACKGROUND
On October 17, 2001, the City Commission passed Resolution No. 2001-24661 authorizing
the purchase of the building at 1701 Meridian Avenue (a.k.a. 775 17th Street) in order to
address the City's ongoing need for administrative office expansion. At the time, the
preservation of a retail environment on the ground floor of the property was considered and
it was determined that retention of the retail space was conducive to maintaining and
enhancing the pedestrian character of the linkage between Lincoln Road Mall and the
Civic/Convention Center area. Staff recently conducted a space plan which indicates that
the usage of the first floor of 1701 Meridian remains a primary use for commercial retail
space.
When the City purchased the building, Vidal Tan Soon, Inc. had been an existing retail
tenant since 1994. When Vidal Tan Soon, Inc. closed its business operations, the Mayor
and City Commission adopted Resolution No. 2006-26282 approving a Second
Amendment and Assignment of the Lease Agreement to Damian J. Gallo & Associates,
Inc. (d/b/a The Permit Doctor, and hereinafter referred to as "Gallo"), effective September
15, 2006, and expiring on April 14, 2009. The assigned lease governed approximately
1,700 square feet of City-owned property and the rent had been adjusted over the term
with CPI increases to the current rental rate of $37.40 per SF, including CAM costs.
ANALYSIS
Gallo has remained in the space on a month-to-month tenancy and has requested a new
lease for an initial term of three years commencing June 1, 2009, and ending May 31,
2012, with one additional three year renewal term. The Tenant will continue providing a
variety of services relating to building development, including building plan and permit
processing services (i.e. certificates of completion, certificates of occupancy, violation
remediation, plan review, processing and expediting services, inspection management,
special and 40 year inspections, roof inspections, lien searches, fire and building
compliance, permit administration, occupancy load calculations, special event permitting,
and recording services) in its current space, and has agreed to the terms outlined below.
Furthermore, a separate agenda item to be considered by the Commission on May 13,
2009, would allow Gallo to assume the lease of tenant, Dade County Federal Credit Union,
which is ceasing its Miami Beach operations effective June 1, 2009. Gallo's assumption of
the additional space will allow for the expansion of its operations.
Summary of Terms:
Square Footage: 1802.89 per updated 2008 City survey.
Rent: Tenant has agreed to increase the rent from the current rate of $37.40 per SF,
including CAM, to $40 per SF, including CAM.
Common Area Maintenance (CAM) costs: Amended to $13.60 per SF (increased from
current $12.65 per SF) to reflect current costs, and which includes payment of
maintenance, real estate taxes, and insurance.
Security Deposit: Tenant shall furnish the City a Security Deposit in the sum of $6,000.
Use and Possession: The leased premises will be used for the purpose of providing
building plan and permit processing services (i.e. certificates of completion, certificates of
occupancy, violation remediation, plan review, processing and expediting services,
inspection management, special and 40 year inspections, fire and building compliance,
permit administration, occupancy load calculations, special event permitting, and recording
services). These services may require the Tenant to interact, from time to time, with City of
Miami Beach officials and employees, acting in their regulatory capacity. The Tenant
represents and warrants to the City that it will in noway, whether express or implied, give
the impression that it is in any way acting as an agent and/or representative of the City of
Miami Beach, nor that, by virtue of this Agreement. It derives any special benefit and/or
consideration from the City.
Review of Comparable Market Analysis:
A review of nearby available space revealed that the asking price for ground floor retail
space at 1680 Meridian Avenue is $30 per SF NNN. Retail space at 1560 Lenox Avenue is
being marketed at $38-$40 per SF Gross.
Additionally, City staff consulted area real estate brokers who focus on this market
(including the Lincoln and Alton Road corridors) regarding realistic area comparables in the
current market and were informed that the realistic range for rents in the retail portion of
the 1701 Meridian Avenue building could run from $35-$45 per SF NNN, with the lower end
2
of the spectrum being more realistic in today's environment. It was suggested that due to
the absence of tourist traffic in the area, the focus on leasing any new space should remain
local service oriented, such as the City's current retail tenants. Therefore, the proposed
rent of $40 per SF Gross for Gallo is within the range of market rates, and the use of the
retail space is feasible for market and area conditions.
CONCLUSION
Section 82-39 of the Miami Beach City Code, governing the sale/lease of public property,
provides that the lease of any City-owned property, including option periods, requires the
following:
1) a public bidding process;
2) Planning Department analysis (see attached);
3) an independent appraisal to determine the value of the leasehold
interest
4) two (2) readings of the proposed lease; and
5) a public hearing to obtain citizen input.
Section 82-39 further provides for the waiver of the competitive bidding and appraisal
requirements, by 5/7ths vote of the Mayor and City Commission, upon a finding by the
Mayor and City Commission that the public interest would be served by waiving such
conditions. At the March 10, 2009 of the Finance and Citywide Projects Committee, the
Committee determined that it was in the public's best interest to forgo competitive bidding
and staff should proceed in leasing the identified leaseable space in 1701 Meridian
according to market rates and industry standards.
A Planning Department analysis finds that the use of this area as retail space is consistent
with the land use designation contained in the Comprehensive Plan (attached).
Based on the aforementioned, the favorable experience and payment history with the
current Tenant, and the current market conditions, the Administration recommends that the
Mayor and City Commission approve, on first reading, the Lease Agreement by and
between the City and Damian J. Gallo & Associates, Inc. (D/B/A Permit Doctor), for the
lease of 1,802.89 square feet of City-owned property, located at 1701 Meridian, Miami
Beach, Florida, for an initial term of three years, with one additional three year renewal
term, at the City's sole discretion; waiving by 5/7ths vote, the competitive bidding and
appraisal requirements, as required by Section 82-39 of the Miami Beach City Code; and
further setting a public hearing on June 3, 2009 for the second reading (and final approval)
of the Lease Agreement.
This item was deferred from the April 22, 2009 Commission Meeting.
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Attachments (1)
F:\RHCD\$ALL\ECON\$ALLWSSET\777-17th Street\Permit Doctor _ Damian Gallo\GALLO Lease Agreement.MEM.doc
m MIAMIBEACH
PLANNING DEPARTMENT
INTEROFFICE MEMORANDUM
TO: Anna Parekh, Real Estate, Housing & Comm. Development Director
FROM: Jorge G. Gomez, Planning Director~G~ ~ ~~~' ~~
DATE: April 2, 2009
suaJECT: Analysis of Proposed Lease Agreement between the City and Damian J. Gallo
& Associates, Inc. (D/B/A Permit Doctor) - 1701 Meridian Avenue
Pursuant to your request, this memorandum will serve as a planning analysis of the
proposed lease agreement between The City and Damian J. Gallo & Associates, Inc.(D/B/A
Uni-K Wax), for use approximately 1,802.89 s.f. of City-owned retail space located at 1701
Meridian Avenue, Unit 2 (a/k/a 767 17th Street), said lease having a term of three (3) years.
Section 82-38 of the Code of the City of Miami Beach requires that any proposed sale or
lease of City-owned land be analyzed from a planning perspective so that the City
Commission and the public are fully appraised of all conditions relating to the proposed sale
or lease. The following is an analysis of the criteria delineated in the Code:
Whether or not the proposed use is in keeping with city goals and objectives
and conforms to the city comprehensive plan.
Consistent -The subject property, 1701 Meridian Avenue, is an office building with
retail spaces on the ground floor. The Future Land Use Map of the City's
Comprehensive Plan designates the site as CD-3 Commercial High Intensity.
The Lease Agreement between the City and Damian J. Gallo & Associates, Inc., for
use of the retail space would be consistent with the land use designation contained
in the Comprehensive Plan.
2. The impact on adjacent property, including the potential positive or negative
impacts such as diminution of open space, increased traffic, noise level or
enhanced property values, improved development patterns and provision of
necessary services. Based on the proposed use of the property, the city shall
determine the potential impact of the project on city utilities and other
infrastructure needs and the magnitude of costs associated with needed
infrastructure improvements. Should it become apparent that further
evaluation of traffic impact is needed, the proponent shall be responsible for
obtaining a traffic impact analysis from a reputable traffic engineer.
Consistent -The property subject to the lease is a office bay within the first floor
level of the 777 office building. The property has been and is currently in use as an
office building and retail space. There would be no diminution of open space as no
new construction is being proposed. No additional utility or infrastructure is
necessary.
Proposed Lease -Damian J. Gallo & Associates, Inc.
Permit Docfor- 1701 Meridan Avenue.
April 2, 2009
Page 2
3. A determination as to whether or not the proposed use is in keeping with a
public purpose and community needs, such as expanding the city's revenue
base, creating jobs, creating a significant revenue stream, and improving the
community's overall quality of life.
Consistent -The retail lease generates an income stream for the City, and the
lounge provides jobs for local service workers. As long as this venue operates in a
responsible way, it has the potential to be an asset to this area of the City.
4. Determination as to whether or not the development is in keeping with the
surrounding neighborhood, will block views or create environmental
intrusions, and evaluation of the design and aesthetic considerations of the
project.
Consistent -The establishment is already in operation, and has not created
negative effects on the surrounding neighborhood. There have been no significant
code violations in the past four years.
5. The impact on adjacent properties, whether or not there is adequate parking,
street and infrastructure needs.
Consistent -The impact on adjacent properties should be minimal, as the facility is
already in use. Parking is available nearby. No further infrastructure needs are
anticipated.
6. A determination as to whether or not alternatives are available for the
proposed disposition, including assembly of adjacent properties, and whether
the project could be accomplished under a private ownership assembly.
Consistent -This criterion is not applicable as the establishment is already
operating within the subject space, and the proposed lease extends the term of the
lease.
7. Within the constraints of public objectives, the department should examine
financial issues such as job generation, providing housing opportunities, and
the return to the city for its disposition of property.
Consistent -The existing establishment slightly increases the job base of the City.
The proposed lease would be expected to maintain this level of job creation. No
housing opportunities are created by the proposed lease.
8. Such other issues as the Planning Department may deem appropriate in
analysis of the proposed disposition.
Planning Staff has not identified any further items.
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