2009-272821 ResoRESOLUTION NO. 2009-27281
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 GEMCOR, INC., FOR
USE OF APPROXIMATELY 1,518 SQUARE FEET OF CITY-OWNED
PROPERTY, LOCATED AT 1130 WASHINGTON AVENUE, 6T" FLOOR,
MIAMI BEACH, FLORIDA; SAID LEASE HAVING AN INITIAL TERM OF
THREE YEARS, WITH TWO ADDITIONAL THREE YEAR RENEWAL
TERMS, AT THE CITY'S SOLE DISCRETION; AUTHORIZING THE
MAYOR AND CITY CLERK TO EXECUTE 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, GEMCOR, Inc. has expressed interest in leasing office space on the
6t" 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, on October 14, 2009, pursuant to Resolution No. 2009-27237, the
Ma~or and City Commission approved the Lease Agreement on first reading; waived by
5/7 vote, the competitive bidding and appraisal requirements; and set the public hearing
on December 9, 2009, for second reading and final approval of the Lease Agreement; and
WHEREAS, said public hearing was held on December 9, 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 GEMCOR, Inc., for use of
approximately 1,518 square feet of City-owned property, located at 1130 Washington
Avenue, 6th floor, Miami Beach, Florida; said Lease having an initial term of three years,
with two additional three year renewal terms, at the City's sole discretion; authorizing the
Mayor and City Clerk to execute the Lease Agreement.
PASSED and ADOPTED this 9th day of December, 2009.
ATTEST:
V ~(l2~(.LC~ ait ' ~~
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Robert Parcher, CITY CLERK
atti Herrera Bower, AYOR
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APPROVED AS T4
FORM ~ LANGUAGE
~ FOR EXECUTION
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COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution approving, on second reading, following a duly noticed public hearing, a Lease Agreement ~
between the City and GEMCOR, Inc. for use of 1,518 SF ofCity-owned property located at 1130 Washington
Avenue, 6th floor, for a term of three years, with two additional three year renewal terms.
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 Summary/Recommendation:
SECOND READING 8< PUBLIC HEARING
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 a lease with GEMCOR, Inc. for use of the 6th floor with the
following terms:
• Square Footage: 1,518 per updated 2009 City survey;
• Term: Three years with two additional three year renewal terms;
• Base Rent: $16,075.62 annually;
• Additional Rent: $19,293.84 annually to offset City's operating expenses and insurance costs;
• Security Deposit: Prior to execution of the Lease, the Tenant will furnish the City a Security Deposit
in the sum of $5,894.90 (equal to two months of Rent and Additional Rent costs).
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.
On October 14, 2009, pursuant to Resolution No. 2009-27237, the Mayor and City Commission approved the
Lease Agreement on first reading; waived by 5/7ths vote, the competitive bidding and appraisal requirements;
and set the public hearing on December 9, 2009, for second reading and final approval of the Lease
Adviso Board Recommendation:
.Finance & Citywide Projects Committee, October 21, 2008, March 10, 2009 and September 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, ext. 6471 ~
Sign-Offs:
Department Director Assist t ity anager ity Manager
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m MIAMIBEACH
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AGENDA ITEM I
DATE 2" ~~
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 ity Commission
FROM: Jorge M. Gonzalez, City Manager
DATE: December 9, 2009 SECOND READING Sti PUBLIC HEARING
SUB.IECT: 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 GEMCOR, INC., FOR USE OF APPROXIMATELY 1,518
SQUARE FEET OF CITY-OWNED PROPERTY, LOCATED AT 1130 WASHINGTON
AVENUE, 6T" FLOOR, MIAMI BEACH, FLORIDA; SAID LEASE HAVING AN INITIAL
TERM OF THREE YEARS, WITH TWO ADDITIONAL THREE YEAR RENEWAL TERMS,
AT THE CITY'S SOLE DISCRETION; AUTHORIZING THE MAYOR AND CITY CLERK
TO EXECUTE 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 meeting of the Finance & Citywide Projects Committee (F&CPC), and
subsequently at their meeting of March 10, 2009, 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 Clerk 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, 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.
ANALYSIS
At the September 3, 2009, F&CPC meeting, staff presented a lease for consideration involving the
6th floor of the building with GEMCOR, Inc., a long standing, established business in South Beach.
GEMCOR, Inc. was created in 1981 as a wholesale source to buy diamonds and jewelry items.
Commission Memorandum
GEMCOR, Inc.
December 9, 2009
Page 2 of 3
Staff recommended a rate of $23.30/sq. ft. for the 1,518 sq. ft. space. The rate includes Insurance,
Common Area Maintenance, Electricity, and Operating Expenses. The base rent is below market,
but addresses issues raised by the Tenant relating to costs for parking, which cannot be waived by
the City. A 10% rent escalator would apply upon each renewal. The Administration recommended
an initial term of three (3) years, with two renewal terms of three (3) years each. Athree-month rent
abatement was also recommended which is in keeping with current industry practices, and
competitive with what the market is offering at this time. GEMCOR further requested that a cap of
$1,000 per year be placed on all proportionate share operational expense increases each lease
year, including taxes.
The Committee recommended in favor of the lease as proposed, with the exception of the rent
abatement period. The Committee instead recommended a one (1) month rent abatement per year,
for the first three years. The Committee also recommended the inclusion of a tax stop to address
any potential year-over-year increases relating to taxes. As such, this lease will include a tax cap of
$3 per square foot for each year of the first term.
LEASE TERMS:
The proposed Lease for use of approximately 1,518 SF is for an initial term of three (3) years, with
two (2) additional three (3) year renewal options, at the City sole discretion. Base Rent is $23.30
PSF equal to an annual amount of $16,075.62, payable monthly in the amount of $1,339.63, with a
ten (10%) percent increase at the commencement of any renewal term. Additional Rent shall be in
the annual amount of $19,293.84, payable monthly in the amount of $1,607.82. Prior to execution of
the Lease, the Tenant will furnish the City a Security Deposit in the sum of $5,894.90 (equal to two
months of Rent and Additional Rent costs). The Leased Premises will be used by the Tenant solely
as an office, providing consulting, cost valuation and replacement service for the insurance industry.
As part of lease, the Tenant will have access to four (4) parking spaces in the adjacent garage at the
Tenant's cost. The City will 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, up to $1,000 per year.
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;
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 5/7thg 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.
A Planning Department analysis finds that the use of this area as office space is consistent with the
land use designation contained in the Comprehensive Plan.
On October 14, 2009, pursuant to Resolution No. 2009-27237, the Mayor and City Commission
approved the Lease Agreement on first reading; waived by 5/7th vote, the competitive bidding and
appraisal requirements; and set the public hearing on December 9, 2009, for second reading and
final approval of the Lease Agreement.
Commission Memorandum
GEMCOR, Inc.
December 9, 2009
Page 3 of 3
GEMCOR has been a local, family-owned business in our community since 1981. The lease terms
are within the range of comparable spaces in the area, and reflect the current economic reality. This
tenant's use is consistent with the uses envisioned for Historic City Hall.
Based on the aforementioned, the Administration recommends that the Mayor and City Commission
hereby approve on second and final reading, following a duly noticed public hearing, a Lease
Agreement between the City and GEMCOR, Inc., for use of approximately 1,518 square feet of City-
owned property, located at 1130 Washington Avenue, 6th floor, Miami Beach, Florida; said Lease
having an initial term of three years, with two additional three year renewal terms, at the City's sole
discretion; authorizing the Mayor and City Clerk to execute the Lease Agreement.
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