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2009-27239 ResoRESOLUTION NO. 2009-27239 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING ON FIRST READING, A LEASE AGREEMENT IN THE CITY STANDARD LEASE FORM AND SUBJECT TO THE NEGOTIATED TERMS IN EXHIBIT "A" TO THIS RESOLUTION, BETWEEN THE CITY AND MIAMI BEACH CINEMATHEQUE (CINEMATHEQUE) FOR USE OF APPROXIMATELY 2,523 SQUARE FEET OF CITY-OWNED PROPERTY, LOCATED AT 1130 WASHINGTON AVENUE, 1ST FLOOR, MIAMI BEACH, FLORIDA; SAID LEASE HAVING AN INITIAL TERM OF THREE (3) YEARS, WITH TWO ADDITIONAL THREE YEAR RENEWAL TERMS, AT THE CITY'S SOLE DISCRETION; FURTHER WAIVING BY 5/7THS VOTE, THE COMPETITIVE BIDDING AND APPRAISAL REQUIREMENTS (AS REQUIRED BY SECTION 82-39 OF THE MIAMI BEACH CITY CODE) FINDING SUCH WAIVER TO BE IN THE BEST INTEREST OF THE CITY; AND SETTING A PUBLIC HEARING ON DECEMBER 9, 2009, FOR THE SECOND READING (AND FINAL APPROVAL) OF THE LEASE AGREEMENT WHEREAS, on October 21, 2008, the Finance & Citywide Projects Committee (F&CPC) acknowledged that the City-owned Historic City Hall building (the "Building") was not needed for City offices and instructed the Administration to advertise, market and negotiate leases for available spaces within the Building; and WHEREAS, Cinematheque has expressed interest in leasing office space on the southern portion of the ground floor of the Building; and WHEREAS, on September 3, 2009, the F&CPC approved the proposed lease, said proposed lease having an initial term of three (3) years, commencing January 1, 2010 and ending December 31, 2012, with two (2) additional three (3) year renewal terms, at the City's sole discretion; 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 December 9, 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 5/7cns 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 in the City standard lease form and subject to the negotiated terms in Exhibit "A" to this resolution, between the City and Cinematheque, for use of approximately 2,523 square feet of City-owned property, located at 1130 Washington Avenue, 1 St floor, Miami Beach, Florida: said lease having an initial term of three (3) years, with two additional three year renewal terms, at the City's sole discretion; further waiving by 5/7tns vote, the competitive bidding and appraisal requirements (as required by Section 82-39 of the Miami Beach City Code) finding such waiver to be in the best interest of the City; and further setting a public hearing on December 9, 2009, for the second reading (and final approval) of the Lease Agreement. PASSED and ADOPTED this 14th day of October, 2009. ATTEST: ~ , Robert Parcher, CITY CLERK Matti Herre a o er, M YO JMG\HMFWP APPROVED AS TO FORM 8~ LANGUAGE ~ R EXECUTION ._ .. - jd ah COMMISSION ITEM SUMMARY Condensed Title: Request for approval for a Lease Agreement between the City and Miami Beach Cinematheque, a 501(c)3 not-for-profit organization, for use of 2,523 SF of City-owned property located at 1130 Washington Avenue, 1St floor, for a term of three years, with two additional three year renewal terms, waiving by 5/7ths vote the competitive bidding and appraisal requirements as required by Section 82-30 and setting a public hearing on December 9, 2009, for second reading and public hearing. 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 Ci Commission a rove the lease a reement? item summa iRecommendation: FIRST READING On October 21, 2008, the Finance & Citywide Projects Committee (F&CPC) acknowledged that the City- owned Historic City Hall building (the "Building") was not needed for City offices and instructed the Administration to advertise, market and negotiate leases for available spaces within the building. On September 3, 2009, the F&CPC approved the proposed lease. The Administration recommends the following terms: • Square Footage: 2,523 sf per updated 2009 City survey; • Term: Three years with two additional three year renewal terms; annual escalator. • Base Rent: $20 per sf -- $23,135.91 annually, payable monthly @ $1,928; • Additional Rent: $27,324.09 annually, payable monthly @ $2,277, to offset City's operating expenses and insurance costs; tenant pays for electricity. • Security Deposit: The Administration recommends $4,205 (equivalent of one month's rent) payable ten days prior to second reading; and an additional $4,205 payable prior to Lease Commencement. However, the Tenant requests a waiver. Commission direction is requested. Section 82-39 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 meeting of the F&CPC, the Committee determined that it was in the public's best interest to forgo competitive bidding and staff should proceed in leasing available space in the Building according to market rates and industry standards. A Planning Department analysis finding that the use of this space is consistent with the land use designation contained in the Comprehensive Plan is bein developed and will be completed prior to second reading Adviso Board Recommendation: Finance & Ci ide Projects Committee, October 21, 2008, March 10, 2009 and Se tember 3, 2009 Financial Information: Source of Funds: Amount Account n/a 1 n/a Financial Impact Summary: City Clerk's Office Legislative Tracking: ~ Anna Parekh, extension 7193 1 Sign-Offs: Department Director Assist n City anager City Man er AP H ~. -.__J V h ,~ ~ ~ ~ ~ ~~~ ~ AGENDA ITEM ~~ j y ~ DATf ~4' l - c9 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: October 14, 2009 FIRST READING SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING ON FIRST READING, A LEASE AGREEMENT IN THE CITY STANDARD LEASE FORM AND SUBJECT TO THE NEGOTIATED TERMS IN EXHIBIT "A" TO THIS RESOLUTION, BETWEEN THE CITY AND MIAMI BEACH CINEMATHEQUE (CINEMATHEQUE) FOR THE USE OF APPROXIMATELY 2,523 SQUARE FEET OF CITY-OWNED PROPERTY, LOCATED AT 1130 WASHINGTON AVENUE, 1ST FLOOR, MIAMI BEACH, FLORIDA; SAID LEASE HAVING AN INITIAL TERM OF THREE (3) YEARS, WITH TWO ADDITIONAL THREE YEAR RENEWAL TERMS, AT THE CITY'S SOLE DISCRETION; FURTHER WAIVING, BY 5/7THS VOTE, THE COMPETITIVE BIDDING AND APPRAISAL REQUIREMENTS (AS REQUIRED BY SECTION 82-39 OF THE MIAMI BEACH CITY CODE) FINDING SUCH WAIVER TO BE IN THE BEST INTEREST OF THE CITY; AND SETTING A PUBLIC HEARING ON DECEMBER 9, 2009, FOR THE SECOND READING (AND FINAL APPROVAL) OF THE LEASE AGREEMENT. ADMINISTRATION RECOMMENDATION Adopt the Resolution. KEY INTENDED OUTCOMES SUPPORTED Increase resident satisfaction with the level of services and facilities. BACKGROUND At the October 21, 2008 and March 10, 2009 meetings of the Finance & Citywide Projects Committee (F&CPC), and following a comprehensive review of the City's office space use, it was determined that Historic City Hall would not be fully re-occupied by City offices, resulting in leasable space availability for non-City uses. The Committee directed the Administration to advertise and market the available leasable space, a total of approximately 14,194 sq. ft., including the ground floor, but exclusive of the second floor space utilized by the Clerks of the Courts. At the meeting, the Committee also approved the Administration's recommendation that the process of developing lease agreements based on supply and demand be utilized for the leasing and occupancy of these available spaces at Historic Old City Hall, and that any future commercial leases (including renewals and/or extensions) for use of space at Historic City Hall be handled as it is in the private sector and not through a competitive bid process, with the administration ensuring that market rates are negotiated and operating expenses included. All leases would continue to require City Commission approval per City Code. PROPOSED USE The Miami Beach Film Society, Inc./Miami Beach Cinematheque (hereinafter referred to as "Cinematheque") is anot-for-profit, 501 (c) 3 organization that currently operates a 50-seat cinema on Commission Memorandum THE MIAMI BEACH CINEMATHEQUE October 14, 2009 Page 2 of 5 Espanola Way. Earlier this year, they approached the City regarding available space at Old City Hall for purposes of relocating their current cinema, in a desire to locate the cinema in an area that is more visible and can accommodate additional patrons and parking. The Cinematheque's proposed use of the space provides for a use that offers diversity in the immediate area, and provides potential foot traffic. In addition to its current programming schedule, the Cinematheque will be expanding present operations to include several daytime activities. Additionally, the Cinematheque has proposed the creation of a photographic arts gallery and film museum with changing exhibitions from international sources and from its own archive, which includes one of the world's most complete collections of film history related memorabilia. One of the museum attractions would be the "made in Miami Beach Movie Tour," which would originate at the space with a digital presentation, and continue around the city visiting the famous movie locations. They propose to also provide matinee screenings of films and other special events, all supplemented by the Cinematheque's concession and coffee service, which would remain open throughout the day and evening. LEASE TERMS At the September 3, 2009, F&CPC meeting, staff presented a lease for consideration involving the southern portion of the first floor of the building with Cinematheque for the relocation of its current cinema. This 2,523 square foot portion of the first floor is the space previously occupied by the Parking Department, and was therefore not completely redone with the rest of the building's renovation. Partial demolition occurred after the Parking Department vacated the space. The Cinematheque proposed abase rent of $20 per square foot to include Insurance, Common Area Maintenance and Operating Expenses. Since the space is separately metered, they would assume the cost for electricity. While the proposed base rent is lower than the appraised base rent for this building (appraisal provided at the September 3, 2009 Finance Committee meeting), the proposed lease was recommended as it would provide for an active use in that space, while acknowledging the non-profit status of the organization and the benefits it provides to the community. This lease would be subject to the standard three percent escalator, annually. Additionally, at F&CPC, the Administration recommended an initial term of three (3) years, with two renewal terms of three (3) years each. It was initially proposed and presented to Committee that the City would assume responsibility for the demolition of interior walls, with Cinematheque retaining responsibility for the build out, which was estimated by Cinematheque at $50,000. The City's estimated demolition cost was $6,500. At that time, the Cinematheque requested, and staff supported, atwo-month Tenant Improvement Credit. The F&CPC recommended approving the lease agreement, but modified the lease terms to require the Cinematheque to provide a minimum number of daylight hours of operation. In addition, the Committee removed the City's responsibility for the demolition of the interior walls and, instead, increased the tenant improvement credit to three (3) months. Based on these recommendations, the proposed lease commencement date would be March 1, 2010, with a rent commence date of June 1, 2010. The Cinematheque subsequently clarified that the minimum operating hours will be from 11:00 a.m. to 10:30 p.m., for a minimum of six days per week. The lease, which will be in a form acceptable to the City Attorney, will include the terms outlined in the attached Summary of Terms, attached hereto and marked Exhibit A. Subsequent to the meeting, and in the process of finalizing the lease document, the Administration advised Cinematheque of the amount required for the security deposit. As you know, security deposits are industry standards and, in this case, would further protect the City as this space is being removed as an available asset for the City to actively market for at least six months. Therefore, the Administration proposes a $8,410 security deposit, payable in two installments: the first installment of $4,205 would be due and payable ten days prior to the City Commission's second reading of the proposed lease (presently anticipated to be on December 9, 2009); the second installment of $4,205 would be due and payable prior to the Lease Commission Memorandum THE MIAMI BEACH CINEMATHEQUE October 14, 2009 Page 3 of 5 Commencement Date. The issue of a security deposit was not discussed at the Finance Committee. The Cinematheque is requesting a waiver of the entire security deposit. The Administration does not recommend a waiver. CONCLUSION The viability of securing a commercial retailer for this is space is limited, as the historic designation of the building precludes any retailerfrom placing signage on the facade of the building, and the main entrance is not directly onto the street, but through the lobby. The appraisal secured by the City finds the highest and best use to be designated "Office." The proposed use provides for an activity that promotes pedestrian traffic in the area. The tenant's proposed build-out supports the recommended tenant improvement credit, and the base rent, while lower than that identified in the most recent appraisal, is sufficient to cover all CAM expenses. 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 (to be provided under separate cover); 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 5/7~'S 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. The Administration requests the City Commission's direction on the issue of the security deposit, and pending resolution of that matter, approval of a lease agreement in a form acceptable to the City Attorney for Cinematheque's proposed use of space with terms as outlined in Exhibit A. JMG/HMF/AP T:\AGENDA\2009\October 14\Regular\Cinematheque Lease 1st Reading.MEM.doc Commission Memorandum THE MIAMI BEACH CINEMATHEQUE October 14, 2009 Page 4 of 5 EXHIBIT A SUMMARY OF TERMS: Tenant: Miami Beach Film Society, Inc. /Miami Beach Cinematheque, a 501(c)3 not-for-profit organization. Tenant's Current Address: 512 Espanola Way Miami Beach, Florida (mailing address: P.O. Box 19-1876 MB, FL 33119) Leased Premises: 2,523 square feet at 1130 Washington Avenue, 1St Floor South Term: Three (3) years, with two (2) additional three (3) year renewal options, at the City's option. Lease Commencement: March 1, 2010 Rent Commencement: June 1, 2010. Base Rent: $20 psf ($4,205 per month during the first lease year) - includes Insurance and Common Area Maintenance. Security Deposit: $8,410 security deposit, payable in two installments: the first installment of $4,205 due and payable ten days prior to the City Commission's second reading of the proposed lease (presently anticipated to be on December 9, 2009); the second installment of $4, 205 due and payable prior to the Lease Commencement Date Permitted Uses: Tenant will use the premises as a cinema and will be expanding its present operations to include the following daytime activities: • Screening of films • Educational Seminars • Photographic arts gallery • Film museum • "Made in Miami" movie tour • Exhibitions • Concessions • Library • Gift store Improvements/Build Out: Tenant renovations include remodeling the premise for cinema uses, including demolition and relocation of existing bathroom facilities. Tenant intends on salvaging and reusing the sprinklers, HVAC and fire alarm system as well as some trade fixtures including but not limited to doors and sinks. Tenant intends to renovate the premises in an environmental friendly manner and to reuse as many items as possible. Tenant may construct or cause to be constructed, such interior and exterior improvements to the Demised Premises, as reasonably necessary for it to carryon its permitted use(s); provided, however, that any plans for such improvements shall be first submitted to the City Manager for his prior received written approval, which approval, if granted at all, shall be at the City Manager's sole and absolute discretion. Tenant shall adhere to all building codes and requirements and will obtain any and all necessary review board approvals and permits. Parking: Tenant may request, from the City's Parking Department, the use of one (1) parking Commission Memorandum THE MIAMI BEACH CINEMATHEQUE October 14, 2009 Page 5 of 5 space per every 400 sf of leased space, if available, at Municipal Parking Garage G-2 located on 12th Street and Drexel. Rates for said spaces are subject to change, and are currently $70 per month plus applicable sales tax. Insurance: Comprehensive General Liability in the minimum amount of $1,000,000 per occurrence for bodily injury and property damage. The City of Miami Beach must be named as additional insured parties on this policy, subject to adjustment for inflation. Workers Compensation and Employers Liability coverage in accordance with Florida statutory requirements. All-Risks property and casualty insurance, written at a minimum of 80% of replacement cost value and with replacement cost endorsement, covering all of Tenant's personal property in the Demised Premises (including, without limitation, inventory, trade fixtures, floor coverings, furniture and other property removable by Tenant under the provisions of this Agreement) and all leasehold improvements installed in the Demised Premises by or on behalf of Tenant, subject to adjustment for inflation. Utilities Sz Services: Tenant retains sole responsibility for all utilities, including electricity, garbage service, janitorial, Internet and telephone. Hours of Operation: Minimum hours of operation will be 11:00 a.m. to 10:30 p.m., for a minimum of six days per week. Any change in the days or hours of operation requires the prior written consent of the City Manager. Common Area: Any increase to the CAM will result in a proportionate share increase to the base rent after the first year. Property Taxes: Property taxes for Property Tax Year 2009 are estimated at Zero Dollars ($0.00). Notwithstanding, the City makes no warranty or representation, that the Historic City Hall building, the Land, and/or the proposed lease premises will not be subject to ad valorem (or other) taxes in subsequent years. In the event Miami-Dade County assesses the property, Tenant shall pay its proportionate share of the property tax bill. Any property tax payment shall be payable by Tenant immediately upon receipt of notice from the City. Tax Stop. Notwithstanding, in the event the property is subject to Miami-Dade County property taxes, the City shall be responsible for payment of the Property Tax Payment up to an amount not to exceed Three Dollars ($3.00) per square foot (Tax Stop Amount) with Tenant to be responsible for anything in excess of that amount. Tenant shall promptly reimburse the City for its portion of the Property Tax Payment (if any) upon receipt of the City's invoice for same. Operating Expenses: Tenant shall be responsible for all operating costs and expenses related to ownership, maintenance and operation. Electricity is separately metered for this space and will be the responsibility of the Tenant. Sales Tax: Tenant shall pay any and all applicable sales and use tax, except when Tenant is not required to do as per Tenant's Non-Profit status. Maintenance Obligations: Tenant shall be responsible for day-to-day maintenance and repairs of the Demised Premises. The Tenant must supply and maintain, at its own cost and expense, all facilities (including, without limitation, the Demised Premises), equipment and furnishings. Other Obligations: Tenant must be open and operational a minimum number of hours per day (11:OOam - 10:30pm) and at least six days per week.