2009-27177 ResoRESOLUTION NO. 2009-27177
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, WAIVING BY 5/7tns VOTE THE
COMPETITIVE BIDDING REQUIREMENT, FINDING SUCH WAIVER TO
BE IN THE BEST INTEREST OF THE CITY, AND APPROVING AND
AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE THE
CONCESSION AGREEMENT BETWEEN THE CITY AND 1 WASHINGTON
AVENUE CORP. (SMITH AND WOLLENSKY RESTAURANT) FOR THE
USE OF AN APPROXIMATELY 581 SQUARE FOOT PAVED AREA IN
SOUTH POINTE PARK (ADJACENT TO THE RESTAURANT) FOR AN
OUTDOOR DINING AREA; WITH THE TERM OF SAID AGREEMENT
COMMENCING ON OCTOBER 1, 2009, AND TERMINATING ON
NOVEMBER 6, 2025
WHEREAS, the Administration has been negotiating with 1 Washington Avenue
Corp., as owner of the Smith and Wollensky Restaurant in South Pointe Park (hereinafter
S&W or Concessionaire), on a concession agreement for an outdoor dining area; and
WHEREAS, on April 14, 2009, the Finance and Citywide Projects Committee
discussed the proposed concession agreement and made recommendations to the
Administration regarding operational conditions and financial terms; and
WHEREAS, at its May 13, 2009 meeting, the City Commission discussed the
proposed concession agreement and directed the Administration to continue negotiations
with Concessionaire; and
WHEREAS, on June 3, 2009, the Mayor and City Commission adopted Resolution
No. 2009-27098, approving an interim agreement with S&W to operate the aforestated
concession; the letter agreement is scheduled to terminate on September 30, 2009; and
WHEREAS, on July 21, 2009, the Finance and Citywide Projects Committee
discussed and approved the proposed terms of the concession agreement; and
WHEREAS, accordingly, the City and Concessionaire have negotiated the attached
Concession Agreement for the use of an approximately 581 square foot paved area, for
outdoor dining by S&W.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission hereby waive by 5/7tns vote the competitive bidding requirement, finding such
waiver to be in the best interest of the City, and approving and authorizing the Mayor and
City Clerk to execute the attached Concession Agreement between the City and 1
Washington Avenue Corp. (Smith and Wollensky Restaurant) for the use of an
approximately 581 square foot paved area in South Pointe Park (adjacent to the
restaurant) for an outdoor dining area; with the term of said Agreement commencing on
October 1, 2009, and terminating on November 6, 2025.
PASSED and ADOPTED this 9th day of September, 2009.
ATTEST:
~~
Robert Parcher, CITY CLERK
atti Her era ower, MAYOR
JMG\HMFWP\RLR\rlr
F:\RHCD\$ALL\ECON\$ALL\ASSET\SOPTPARK\S & W Concession Agreement.RES.doc
APPROVED AS TO
FORM ~ LANGUAGE
COMMISSION ITEM SUMMARY
n..-J.........1 T:~I...
V NIIVCi11.7GM I IHi-i.
A Resolution waiving by 5/7 s vote the competitive bidding requirement and approving and authorizing the Mayor and City Clerk to execute
the Concession Agreement between the City and 1 Washington Avenue Corp., for use of property in South Pointe Park adjacent to the
Smith & Wollensk Restaurant buildin for the mana ement and o eration of an outdoor dinin area.
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 Ma or and Cit Commission a rove the Concession A reement?
Item Summary/Recommendation•
BACKGROUND
On July 27, 2005, the Mayor and City Commission adopted Resolution No. 2005-25978, approving the design and construction of the
South Pointe Park improvements. The improvements included a change to the cutwalk, and included a paved area identified for use as an
outdoor dining area south of the cutwalk behind Smith and Wollensky (S&W). S&W had previously operated an outdoor dining area on the
then-existing 10-foot wide cutwalk.
In anticipation of the re-opening of the park, the Administration began negotiations with S&W on a Concession Agreement for the outdoor
dining area. On April 14, 2009, the Finance & Citywide Projects Committee (F&CPC) discussed the proposed Concession Agreement and
directed staff to further negotiate the financial terms. On May 13, 2009, the Mayor and City Commission discussed the outdoor dining
area, and directed the Administration to reestablish negotiations with S&W to facilitate a mechanism for the outdoor dining area. On July
~I 21, 2009, the F&CPC discussed and approved the terms of the Concession Agreement as follows:
KEY CONCESSION AGREEMENT PROVISIONS:
TERM: Commencing on October 1, 2009, and terminating on November 6, 2025.
FEE: Initial Minimum Guarantee of $80,000 with $20,000 increments every five years and/or 10% of annual gross receipts,
whichever is greater.
USES : Placement of tables and chairs as approved following ADA compliance review; only on the paved area south of the
cutwalk located on the south side of S&W's restaurant building for use as an outdoor dining area ancillary to the restaurant.
CONDITIONS: The outdoor seating would be subject to the following conditions:
• S&W must submit a site plan. Site plan must be reviewed and approved by relevant City departments prior to use;
• S&W must clean and maintain the cutwalk area (between the demised premises of the lease and the paved area that is the location
of the outdoor dining area), to include daily cleaning, litter control, pressure cleaning (as per the specifications provided by the Park
contractor); and
• S&W to identify a queuing area for guests and provide, at its own cost and expense, S&W staff to maintain the cutwalk clear of
patrons waiting for seating; provide signage on the demised premises and on the paved area, advising patrons that they should
remain clear of the cutwalk; provide stanchions or other appropriate barrier on the demised premises to demarcate the area where
patrons can wait in the demised premises.
INDEMNIFICATION & INSURANCE:
To be provided prior to use and approved by the City Attorney's Office and the Risk Management Division.
The Administration recommends waiver of the competitive bid requirement and approval of the Concession Agreement.
Adviso Board Recommendation:
Finance & Citywide Projects Committee on April 14, 2009 and July 21, 2009.
Financial Information:
Source of Amount Account
Funds: n/a ~
Financial Impact Summary:
Ci Clerk's Office Le islative Trackin :
Ana Cecilia Velasco extension 6727
Sign-Offs:
Department Director Assista t City Manager City Manager
AP HF JMG
/~ AGENDA fTEM
~r DATE 9 7_~ 1
m MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, vaww.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City Commission
FROM: Jorge M. Gonzalez, City Manager
PATE: September 9, 2009
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, WAIVING BY 5/7tt,g VOTE THE COMPETITIVE
BIDDING REQUIREMENT, FINDING SUCH WAIVER TO BE IN THE BEST
INTEREST OF THE CITY, AND APPROVING AND AUTHORIZING THE MAYOR
AND CITY CLERK TO EXECUTE THE CONCESSION AGREEMENT BETWEEN
THE CITY AND 1 WASHINGTON AVENUE CORP. (SMITH AND WOLLENSKY
RESTAURANT) FOR THE USE OF AN APPROXIMATELY 581 SQUARE FOOT
PAVED AREA IN SOUTH POINTE PARK (ADJACENT TO THE RESTAURANT)
FOR AN OUTDOOR DINING AREA; WITH THE TERM OF SAID AGREEMENT
COMMENCING ON OCTOBER 1, 2009, AND TERMINATING ON NOVEMBER 6,
2025,
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
KEY INTENDED OUTCOMES SUPPORTED
To ensure well-maintained facilities.
ANALYSIS
During the design of the South Pointe Park improvements, provisions were included for design of an
area south and adjacent to the cutwalk which could become a concession area for auxiliary dining in
conjunction with the restaurant operations. 1 Washington Avenue Corp. (hereinafter referred to as
"S&W") has agreed to confine the outdoor dining to the gray paved area as shown on the
Hargreaves Associates Recommended Design prepared for the Design Review Board (DRB)
Meeting and not pursue DRB approval for the five-foot area of the cutwalk which is depressed to the
same level of the grey paved area. The existing conditions are shown on the Smith & Wollensky
Outdoor Seating Plan, which has been approved by the City's ADA inspector and is attached hereto
as Attachment A, resulting in a capacity for 36 chairs as shown.
S&W has engaged in numerous conversations with the City regarding the cutwalk improvements
adjacent to its restaurant operation and how its outdoor cafe operation may continue to operate on
the as-built site. On April 14th, 2009, the Finance & Citywide Projects Committee (F&CPC)
recommended that staff re-review the proposed Concession Agreement and modify the terms. Staff
and S&W were not able to come to terms. However, at the May 13, 2009 City Commission meeting,
staff was directed to reopen discussions with S&W based on imposing the operational conditions
and to come to a reasonable accommodation with the rent.
On June 3, 2009, the City Commission approved a Letter Agreement for S&W's temporary use of
the outdoor concession area, commencing on June 4, 2009, and automatically terminating on
September 30, 2009. A Concession Agreement is now being proposed to govern the site after
September 30tH
PROJECTIONS FOR CONCESSION AGREEMENT:
While considering the use and the payment structure for the outdoor dining area, the Administration
proposed several options to the owner/operator of S&W, including a proposal to increase the
percentage rent for the indoor area of the restaurant, which is governed by a 1985 Lease Agreement
in effect through 2025. The payment structure under that Lease Agreement is a minimum
guaranteed rent of $30,000 per year, with percentage of gross payments structured as follows: 2.5%
of sales up to $2,500,000; 3% of sales from $2.5M to $3M; and 3.5% of sales above $3M. S&W did
not consider an amendment of that rent structure to be a feasible option. S&W's gross sales for
2008 were $13,312,023. The City received a total of $438,420 in percentage rent for the interior
space.
As discussed during the April 14th F&CPC meeting, following numerous meetings between Staff and
S&W regarding the outdoor seating area, a concession fee often percent (10%) of gross revenues
was agreed to by S&W. At that time, it was proposed that additional seating be approved for a
portion of the depressed five-foot cutwalk which is otherwise not usable by pedestrians. This
resulted in calculations being based upon 50 chairs, versus the resulting capacity of 36 chairs.
The Administration initially requested a $100,000 minimum guaranteed rent from the owner/operator
of S&W, based upon a projection that this would amount to ten percent of the projected gross
revenues for the outdoor cafe area. City staff projected gross receipts to be approximately
$1,000,000 per year, based upon 50 chairs producing an average of $50 per meal, for two seating's
per day, during 200 good weather days. S&W neither confirmed nor rejected staff s projections for
gross receipts. However, they requested that due to general economic uncertainties, the minimum
guaranteed rent and several operational issues, which are outlined below, be conservatively based
below staffs projection of ten percent of $1,000,000. Therefore, based on a 50-chair capacity, a
recommendation was made that the minimum guaranteed rent commence at $80,000 for the first
four years, and that it would increase thereafter. As you are aware, the existing restriction on
placement of chairs and tables on the depressed section of the cutwalk has resulted in a total
capacity of 36 chairs in the paved area.
S&W has agreed to pay ten (10%) of annual gross receipts, with an initial minimum guaranteed
concession fee of $80,000 annually, which will increase by $20,000 every five years. S&W has
requesting that the term of the concession agreement be coterminous with the term of the restaurant
Lease Agreement, which expires on November 6, 2025. Therefore, the negotiated minimum
guarantee for the outdoor cafe area would be paid as follows:
October 1, 2009 through September 30, 2014: $ 80,000
October 1, 2014 through September 30, 2019: $100,000
October 1, 2019 through September 30, 2024: $120,000
October 1, 2024 through November 6, 2025: $140,000
On July 21, 2009, the F&CPC reviewed and approved the attached term sheet (Attachment B); said
terms having been negotiated with S&W, and subsequently have been incorporated into the
proposed Concession Agreement:
OPERATIONAL ISSUES:
The Concession Agreement is intended to provide for the manner in which the outdoor seating area
can operate. The following issues were discussed and are presented for consideration.
2
1) Maintenance schedule to keep the cutwalk area clean.
The Department of Capital Improvements Projects and the contractor responsible for the
construction of the keystone/tabby shell cutwalk has been consulted on the best practice to
ensure the best method for regular maintenance of the cutwalk. This schedule has been
incorporated into the proposed Concession Agreement as Exhibit 10.2. S&W will be
responsible for day-to-day maintenance and repairs of the Concession Area. S&W will also
supply, at its own cost and expense, all facilities equipment and furnishings required to
maintain and operate the concession area. Additionally, S&W will maintain the area within a
25 foot radius of its concession area, including the cutwalk, in a clean and sanitary manner.
2) Elimination of guaranteed special events permit.
S&W was notified of the removal of any reference to a guaranteed number of Special Events
in relation to the proposed Concession Agreement. S&W may apply according to the Special
Event Permit guidelines, and consistent with the operational plan for South Pointe Park,
which may limit the frequency of Special Event Permits in the park, when that operational
plan is considered and/or approved.
3) Create a queuing area for waiting customers.
S&W shall use reasonable measures to prevent patrons from congregating on the public
cutwalk and will provide queuing areas on the Restaurant's Demised Premises; signage
stating the limitation of the Demised Premises; and the use of planters or stanchions to
delineate a buffer between the Demised Premises and the cutwalk.
Furthermore, as part of the operating restrictions, S&W cannot place any speakers, or any other
device used to amplify sound, in or around the Concession Area. Additionally, S&W cannot use the
Concession Area as an outdoor entertainment or open air entertainment establishment. The hours
of operation for the Concession Area are consistent with the Restaurant's hours of operation.
CONCLUSION
The Administration recommends that the Mayor and City Commission waive the competitive bid
requirement and approve the Concession Agreement between the City and 1 Washington Avenue
Corp. for the maintenance and operation of a food and beverage concession in a portion of South
Pointe Park.
JMG\HFWP\RLR\rlr
Attachments (2)
F:\RHCD\$ALL\ECON\$ALUASSET\SOPTPARK\S & W Concession Agreement.MEM.doc
3
U
~ ~ U
wdo ~ r ~ Or~Cn~l-C.~
.. wouoa
ATTACHMENT A
rn ~
M Z w
W ~ M a ~ ~~
JO
~ CL
J¢
J LL Z
<S
m m a
4 ..
~ > •
~~
O O~ Q V O Q~
~
~~
^/ c
~ ~ ~ m ~ c
~ ~ m ~ O O Cs c~.
i- = N (~ O II ~ t0 tr'1
w ~ ~ E O~apQNh-
~j ~ ~ O r = N C7~
iV
~t
N ~
m J
Q
~
U
~ Q
W
0
~
~ ~ Y
_
~
~ '..? ~
Z
~
. v
y
.X
a~ ~
~
X
z
W w
t
~
+~ • "
W
Z C/)
~. ~ Z
f1. ~
®, ~
(,~ F-
Z
~~ Z W
~ H ~
X
W ~
Q
2
Nom.... 4g~.
~ ~
N
W
g
kiitllS
'JNIlSIX3
"'
o
w '~
w
~
~ ~ w w ~ O
m! ~
~ N ~
g ~ Z Q N
~ ~
~ w
_
`~
~
z ~
u~ O
z w
a ~
v
~
~ ~
,
J
4
i~-
W
W
2
V
ATTACHMENT B
CONCESSION AGREEMENT BETWEEN
THE CITY OF MIAMI BEACH AND
1 WASHINGTON AVE. CORP.
SUMMARY OF KEY TERMS
Property Owner: City of Miami Beach ("City")
Concessionaire: 1 Washington Ave. Corp.
Concession Area: One Washington Ave., Miami Beach, immediately south of the
cutwalk area as specifically delineated in Exhibit 2.1 of the
Concession Agreement. Concessionaire must adhere to any and all
governmental regulations, not limited to ADA maneuverability
requirements. The area does not include any portion of the 15' upper
level cutwalk or the 5' depressed cutwalk area.
Term: Coterminous with that certain Lease Agreement between the City
and Specialty Restaurant Corporation dated February 8, 1985, as
amended and assigned, which expires on November 6, 2025. The
Concession Agreement will commence October 1, 2009.
Hours of Operation: Sunday -Thursday: 11:30AM - 12:OOAM
Friday -Saturday: 12:OOPM - 2:OOAM
Minimum Guarantee (MG): The annual MG will be as follows:
October 1, 2009 through September 30, 2014: $ 80,000
October 1, 2014 through September 30, 2019: $100,000
October 1, 2019 through September 30, 2024: $120,000
October 1, 2014 through November 6, 2025: $140,000
MG will be payable in 12 equal monthly installments on the first day
of each month.
Percentage of Gross (PG): For each contract year, in the event that the amount equal to 10%
(PG) of Concessionaire's gross receipts for Food and Beverage
Sales (FBS) exceeds the MG, then the Concessionaire shall also pay
to the City the difference between the PG amount and the MG no
later than 30 days after the end of each contract year during the term
of this Agreement.
Taxes; Impositions: Concessionaire shall be responsible for all Property Taxes and other
impositions in connection with the Concession Area, to the extent
that such Property Taxes and other impositions become due.
Operating Expenses: Concessionaire shall be responsible for all operating costs and
expenses related to ownership, maintenance and operation of the
Concession Area.
Sales Tax: Concessionaire shall pay any and all applicable sales and use tax.
5
Permitted Uses: Concessionaire shall use the Concession Area solely and exclusively
as outdoor dining to serve patrons and guests of the adjoining
restaurant at One Washington Avenue. Any change to the seating
chart requires City approval.
Concessionaire agrees not to place any speakers, or any other
device used to amplify sound, in or around the Concession Area.
Furthermore, Concessionaire shall in no manner use the Concession
Area as an outdoor entertainment or open air entertainment
establishment, and hereby acknowledges that such uses are
prohibited (whether as main or accessory uses).
Concessionaire shall provide alternate queuing areas within the
Demised Premises for patrons waiting to be seated in the
Concession Area.
It is understood and agreed that the Concession Area shall be used
by the Concessionaire during the term of this Agreement only for the
uses contemplated in the Concession Agreement, and for no other
purpose or use whatsoever.
Concessionaire shall use reasonable measures to contain patrons
from congregating on the public cutwalk and shall provide queuing
areas on the Restaurant's Demised Premises; signage stating the
limitation of the Demised Premises; and the use of planters or
stanchions to delineate a buffer between the Demised Premises.
Improvements -Required Approvals/Procedures:
Capital improvements contemplated for the Concession Area require
and are subject to the City's prior written consent. Plans for such
improvements are also subject to the City's review and approval in
writing.
Concessionaire s Insurance:
Comprehensive General Liability in the minimum amount of One
Million ($1,000,000.00) Dollars per occurrence for bodily injury and
property damage. This policy must also contain coverage for
premises operations, products and contractual liability.
Workers Compensation Insurance shall be required in accordance
with the laws of the State of Florida.
Automobile Insurance shall be provided covering all owned, leased,
and hired vehicles and non-ownership liability for not less than the
following limits:
Bodily Injury $1,000,000 per person
Bodily Injury $1,000,000 per accident
Property Damage $1,000,000 per accident
Concessionaire's Maintenance Obligations:
Concessionaire shall be responsible for day-to-day maintenance and
repairs of the Concession Area. Concessionaire must supply, at its
6
own cost and expense, all facilities, equipment and furnishings
required to maintain and operate the concession area.
In addition to Concessionaire's general maintenance obligations for
the Concession Area, the Concession Area and the immediately
surrounding twenty five (25) foot adjacent areas, shall at all times be
maintained in a clean and sanitary manner, and in a manner to be
consistent with the maintenance standards used for the cutwalk and
other adjacent park areas.
Force Majeure: Whenever a period of time is herein prescribed for the taking of any
action by City or Concessionaire (as applicable) the City or
Concessionaire (as applicable), shall not be liable or responsible for,
and there shall be excluded from the computation of such period of
time, any delays due to strikes, riots, acts of God, shortages of labor
or materials, war, or governmental laws, regulations, or restrictions in
the nature of a prohibition or moratorium, or any bona fide delay
beyond the reasonable control of City or Concessionaire (as
applicable). The foregoing shall not apply to any payments of money
due under the Concession Agreement.
7