2009-27071 ResoRESOLUTION NO. 2009-27071
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, APPROVING A CONSENT TO
ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT AND A
SECOND AMENDMENT TO THAT CERTAIN LEASE AGREEMENT BY
AND BETWEEN THE CITY AND MIAMI BEACH FEDERAL CREDIT
UNION, DATED JULY 30, 2003 (AS AMENDED ON JANUARY 11, 2006),
FOR THE LEASE OF 1,268.87 SQUARE FEET OF CITY-OWNED
PROPERTY, LOCATED AT 775 17TH STREET, UNIT 4, MIAMI BEACH,
FLORIDA, WHICH PROVIDES FOR DADE COUNTY FEDERAL CREDIT
UNION (AS TENANT/ASSIGNOR) TO ASSIGN ITS LEASEHOLD
INTEREST TO DAMIAN J. GALLO & ASSOCIATES, INC. (AS THE NEW
TENANT/ASSIGNEE); FURTHER AUTHORIZING THE MAYOR AND CITY
CLERK TO EXECUTE SAME
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, on July 30, 2003, the Mayor and City Commission entered into a
Lease Agreement with Dade County Federal Credit Union (as amended on January 11,
2006), for 1,268.87 square feet of City-owned property, located at 775 17th Street, Unit 4,
Miami Beach, Florida, which Lease expires on January 31, 2011; and
WHEREAS, Dade County Federal Credit Union (hereinafter Tenant/Assignor) has
requested that the City consent to an assignment and assumption of the Lease Agreement
(as amended) to Damien J. Gallo & Associates, Inc. (hereinafter new Tenant/Assignee);
and
WHEREAS, concurrent with approval and execution of the attached Consent to
Assignment and Assumption of Lease Agreement, a Second Amendment to the Lease
Agreement is also necessary to update language and Tenant/Assignee's current
obligations for the leased premises; and
WHEREAS, the Administration would hereby recommend that the Mayor and City
Commission approve the attached Consent to Assignment and Assumption of Lease
Agreement and Second Amendment to the Lease Agreement.
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 the attached Consent to Assignment and Assumption of
Lease Agreement and Second Amendment to that certain Lease Agreement by and
between the City and Miami Beach Federal Credit Union, dated July 30, 2003 (as amended
and assigned), for the lease of approximately 1268.87 square feet ofCity-owned property,
located at 775 17th Street, Miami Beach, Florida, which provides for Dade County Federal
Credit Union (as Tenant/Assignor) to assign its leasehold interest to Damian J. Gallo &
Associates, Inc. (as the new Tenant/Assignee) and further authorizing the Mayor and City
Clerk to execute same.
PASSED and ADOPTED this 13th day of May, 2009.
ATTEST:
Robert Parcher, CITY CLERK
atti Her era ower, AYOR
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APPROVED AS TO
FORM. & LANGUAGE
~ FOR,EXECUTION
~ G p9
Date
COMMISSION ITEM SUMMARY
(_nnrloncorl Ti+In•
vRequest for Consent of Assignment, Assumption and a Second Amendment of the City's Lease Agreement with Dade County
Federal Credit Union for a portion of the City-owned property located at 1701 Meridian Avenue.
Ke Intended Outcome Su orted:
Increase resident satisfaction with the level of services and facilities.
Supporting Data (Surveys, Environmental Scan, etc.): Approximately 40% of retail businesses surveyed rank Miami Beach
as one of the best places to do business and 61% of the same group would recommend Miami Beach as a place to do
business.
Issue:
Should the City approve the Assignment, Assumption, and a Second Amendment of an existing Lease Agreement in order to
replace an existing retail tenant in the 1701 Meridian building, and allowing for the adjacent retail tenant to expand its
o erations?
i[em summa -rcecommenaaiwn:
In 2001 the City Commission authorized the purchase of 1701 Meridian Avenue to address the City's ongoing need for
administrative office expansion. At that time, preservation of a retail environment on the ground floor of the property was
determined to be 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 planning analysis of City-owned property which
indicates that it is feasible for the first floor of 1701 Meridian to remain as commercial retail space. Among its leases with retail
operators at 1701 Meridian Avenue (a.k.a. 775 17th Street), the City has been leasing to Dade County Federal Credit Union
(DCFCU) a retail space for use as a federal credit union under the terms and conditions of a Lease Agreement, dated July 30,
2003 (as amended and assigned on January 11, 2006). Several months ago, DCFCU determined that it must close the Miami
Beach branch due to economic circumstances and initially requested a cancellation of its lease. The Administration explored
several options to prevent the loss of a retail tenant and to preserve a credit union presence. Unfortunately, due to security
reasons and operating costs, DCFCU could neither maintain a reduced schedule, nor the automatic teller machine on site.
Rather than facing a full acceleration of the existing lease terms, DCFCU entered into discussions with tenant, Damian J. Gallo
& Associates, Inc. (d/b/a The Permit Doctor), which is interested in expanding its leasable space. Both tenants, as well as the
Administration, agreed to propose a consent to assignment and assumption of the DCFCU lease to the tenant. A second
amendment to the Lease Agreement is necessary to update lease language and the assignor's current obligations.
An assignment, assumption, and amendment to the existing lease was negotiated and, if approved by the City Commission,
Damian J. Gallo & Associates, Inc., will take over the DCFCU space and will lease an additional 1268.87 square feet of City-
owned property commencing on June 1, 2009, through the lease expiration date of January 31, 2011. Damien J. Gallo &
Associates, Inc. has agreed to the terms of the assignment and assumption and the terms of the second amendment as
follows:
• Square Footage -Adjust from 1350 SF to 1268.87 SF per a 2008 survey;
• Common Area Maintenance (CAM) -Amend to $13.60 per SF (increased from $13.16 per SF), for maintenance, real
estate taxes, and insurance;
• Parking -Amended to reflect current parking rate of $70 per space at tenant's additional expense;
• Use and Possession -Demised Premises shall be used for the purpose of providing building plan and permit processing
services Tenant 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;
• Security Deposit -Tenant shall furnish the City a Security Deposit in the sum of $5,000, which was not required of the
existing tenant;
• Rent Amount -Increase base rent from original Lease Agreement rate of $37,800.00 per year to current base rent of
$41,305 per year plus $13.60 per SF for CAM, for a total annual rent of $58,558 which represents $46.15 per SF including
CAM.
This item was deferred at the April 22, 2009 Commission Meeting.
Board Recommendation:
Financial Information:
Source of Amount Account
Funds: n/a ~
Financial Impact Summary:
Cit Clerk's Office Le islative Trackin
Ana Cecilia Velasco extension 6727
Si n-Offs:
artment Director Assistan na er Ci M er
AP HF JMG
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A(aENaA ITEM G?T
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City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, voww.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City Commission
FROM: Jorge M. Gonzalez, City Manager
DATE: May 13, 2009
SUBJECT: A RESOLUTION APPROVING A CONSENT TO ASSIGNMENT AND ASSUMPTION OF
LEASE AGREEMENT AND A SECOND AMENDMENT TO THAT CERTAIN LEASE
AGREEMENT BY AND BETWEEN THE CITY AND MIAMI BEACH FEDERAL CREDIT
UNION, DATED JULY 30, 2003 (AS AMENDED ON JANUARY 11, 2006), FOR THE
LEASE OF 1,268.87 SQUARE FEET OFCITY-OWNED PROPERTY, LOCATED AT 775
17TH STREET, MIAMI BEACH, FLORIDA, WHICH PROVIDES FOR DADE COUNTY
FEDERAL CREDIT UNION (AS TENANT/ASSIGNOR) TO ASSIGN ITS LEASEHOLD
INTEREST TO DAMIAN J. GALLO & ASSOCIATES, INC. (AS THE NEW
TENANT/ASSIGNEE); FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE SAME.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
BACKGROUND
At its October 17, 2001 meeting, the City Commission passed Resolution No. 2001-24661
authorizing the purchase of 1701 Meridian Avenue to address the City's ongoing need for
administrative office expansion. Also inconsideration was the preservation of a retail environment
on the ground floor of the property. At that time, it was determined that retention of the retail
component would be conducive to maintaining and enhancing the pedestrian character of the
linkage between Lincoln Road Mall and the Civic/Convention Center area. Staff has recently
conducted a space plan of City-owned buildings approved by the Finance and Citywide Projects
Committee which indicates that the usage of the first floor of 1701 Meridian was to remain a primary
use for commercial retail space.
ANALYSIS
Among its leases with retail operators at 1701 Meridian Avenue (a.k.a. 77517th Street), the City has
been leasing to Dade County Federal Credit Union (DCFCU) a retail space for use as a federal
credit union under the terms and conditions of that certain Lease Agreement, dated July 30, 2003
(as amended and assigned on January 11, 2006). DCFCU is currently paying $45.71 per SF,
including Common Area Maintenance costs.
Several months ago, DCFCU determined that it must close the Miami Beach branch due to
economic circumstances and initially requested a cancellation of its lease. The Administration
explored several options to prevent the loss of a retail tenant and to preserve a credit union
presence. Unfortunately, due to security reasons and operating costs, DCFCU could neither
maintain a reduced schedule, nor the automatic teller machine on site. Rather than facing a full
acceleration of the existing lease terms, DCFCU entered into discussions with tenant, Damian J.
Gallo & Associates, Inc. (d/b/a The Permit Doctor), which was interested in expanding its leaseable
space. Tenant Gallo provides 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). Both tenants, as well as the Administration, agreed to propose a consent to
assignment and assumption of the DCFCU lease to the tenant.
A Consent to Assignment and Assumption of Lease Agreement, and a Second Amendment to the
existing lease was negotiated and, if approved by the City Commission, Damian J. Gallo &
Associates, Inc., will take over the DCFCU space and will lease 1268.87 square feet of City-owned
property commencing on June 1, 2009, through the lease expiration date of January 31, 2011.
Pursuant to the Consent to Assignment & Assumption of Lease, DCFCU is assigning to Damian J.
Gallo & Associates, Inc., and Damian J. Gallo & Associates, Inc. is assuming from DCFCU, all of
DCFCU's rights, title, interest and obligations pursuant to the Lease Agreement.
Additionally, a Second Amendment to Lease Agreement has been negotiated and is necessary to
update lease language. The new tenant/assignee's obligations are amended as follows:
Sauare Footage: Amended to reflect corrected SF of 1268.87 (formerly shown as 1,350 SF) based
upon updated 2008 City survey;
Common Area Maintenance (CAM) costs: Amended to $13.60 per SF (increased from $13.16 per
SF) to reflect increased costs, and which includes payment of maintenance, real estate taxes, and
insurance;
Parking: Amended to reflect current parking rate of $70.00 per space (at tenant's additional
expense);
Security Deposit: Amended to reflect Tenant's requirement to furnish a Security Deposit in the sum
of $5,000, which was not required of the existing tenant; and
Use and Possession: Amended to reflect change in use from a federal credit union providing
financial services to an office providing a variety of services relating to building development,
including building plan and permit processing services. Additional language was also added stating
that Tenant warrants that it shall in no way, 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, Tenant derives 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. The City has agreed that no other retail tenant on the ground floor of the
building will be allowed to duplicate the use. However, the office spaces on the upper floors are not
included in this non-compete provision.
Improvements & Operation, Maintenance and Repair: Amended to reflect City's updated language.
All other terms of the Lease Agreement remain unchanged, including the current Rent Amount.
Damian J. Gallo & Associates, Inc. will continue paying the current base rent of $41,305. per year, or
$32.55 per SF plus CAM, which is being increased to $13.60 per SF, for a total rent of $46.15 per
SF. Therefore, the total annual rent, including CAM will be $58,558. Comparables for retail space in
this area demonstrate that the rate is favorable to the City.
CONCLUSION
Due to market conditions and the availability of other commercial retail space in the immediate area,
the opportunity to assign the Lease Agreement provides for a public benefit to the City. Therefore,
the Administration recommends that the Mayor and City Commission consent to an Assignment,
Assumption, and Second Amendment of the Lease Agreement by and between the City and Dade
County Federal Credit Union for the lease of 1268.87 square feet of City-owned property, located at
1701 Meridian, Miami Beach, Florida, to be assumed by Damien J. Gallo & Associates, Inc.
This item was deferred from the April 22, 2009 Commission Meeting.
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