2009-27094 ResoRESOLUTION NO. 2009-27094
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, APPROVING ON SECOND READING (AND
FINAL APPROVAL), FOLLOWING A DULY NOTICED PUBLIC HEARING,
A LEASE AGREEMENT BETWEEN THE CITY AND DAMIAN J. GALLO 8~
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; AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE 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, on September 6, 2006, the City Commission adopted Resolution No.
2006-26282 approving a Second Amendment and Assignment of a Lease Agreement with
Vidal Tan Soon, Inc. to Damian J. Gallo & Associates commencing September 15, 2006
and expiring April 14, 2009 for 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, 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 public bidding process, a Planning Department analysis, and
an independent appraisal to determine the value of the leasehold interest, as well as a
public hearing to obtain citizen input; and
WHEREAS, on May 13, 2009, pursuant to Resolution No. 2009-27073, the Mayor
and City Commission approved the Lease Agreement on first reading; waived by 5/7tns
vote, the competitive bidding and appraisal requirements; and set the public hearing on
June 3, 2009, for second reading and final approval of the Lease Agreement; and
WHEREAS, said public hearing was held on June 3, 2009.
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 second reading (and final approval), following a duly
noticed public hearing, 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 authorizing the Mayor and City Clerk to execute the Lease
Agreement.
PASSED and ADOPTED this 3rd day of June, 2009.
ATTEST:
Yea Perak
Robert Parcher, CITY CLERK
atti Her era ower, MAYOR
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APPROVED A3 TO
FORM & LANGUAGE
~ FOR EXECUTION
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City Oats
COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution approving, on second reading, following a duly noticed public hearing, 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 and
waiving by 5/7th vote the competitive bidding and appraisal requirements as required by Section 82-39.
_Key Intended Outcome Supported:
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 lease agreement?
Item Summary/K@COmmenaatl0n:
SECOND READING & PUBLIC HEARING
Subject space is one of four retail ground floor units in the City-owned building at 1701 Meridian Avenue purchased In 2001 to
address the City's ongoing need for administrative office expansion. When the City purchased the building, Vidal Tan Soon, Inc.
had been an existing tenant of the subject retail space since 1994. 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);
• Security Deposit: Upon execution of the Agreement, the Tenant will furnish the City a Security Deposit in the sum of
$6,000.
• 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 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, 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;
Section 82-39 further provides for the waiver of the competitive bidding and appraisal requirements, by 5/7th5 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.
On May 13, 2009, pursuant to Resolution No. 2009-27073, the Mayor and City Commission approved the Lease Agreement on first
reading; waived by 5/7thg vote the competitive bidding and appraisal requirements; and set the public hearing on June 3, 2009, for
second reading and final approval of the Lease Agreement.
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
Anna Parekh ext. 6471
Sign-Offs:
/1
Department Director Assistant Ci M Hager City Ma nager
AP HF JMG
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AGEPIDA ITEM r'\~
~!- ~ a~ ~ ~ ~~ ~ DATE .3 _
m MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City Commission
FROM: Jorge M. Gonzalez, City Manager
DATE: June 3, 2009
sua~ECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING ON SECOND READING (AND FINAL
APPROVAL), FOLLOWING A DULY NOTICED PUBLIC HEARING, 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 76717T" 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 AND
AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE THE LEASE
AGREEMENT.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
KEY INTENDED OUTCOMES SUPPORTED
To ensure well-maintained facilities.
ANALYSIS
The subject leaseable space is one of four retail ground floor units in the City-owned
building at 1701 Meridian Avenue (a.k.a. 775 17th Street) purchased in 2001 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.
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.
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. The annual rent to the City is $72,105.44 or
$6,008.79 per month.
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
of the spectrum being more realistic in today's environment. It was suggested that due to
2
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.
On May 13, 2009, pursuant to Resolution No. 2009-27073, the Mayor and City
Commission approved the Lease Agreement on first reading; waived by 5/7tns vote, the
competitive bidding and appraisal requirements; and set the public hearing on June 3,
2009, for second reading and final approval of the Lease Agreement. At the same meeting
the City Commission also adopted Resolution No. 2009-27071 allowing Gallo to assume
the lease of tenant, Dade County Federal Credit Union, which ceased its Miami Beach
operations effective May 1, 2009. Gallo's assumption of the additional space allows for the
expansion of its operations.
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 second reading (and final approval), following a
duly noticed public hearing, 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 City Code and authorize the Mayor and City Clerk to execute the
Lease Agreement.
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