2010-27354 ResolutionRESOLUTION NO. 2010-27354
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 MDGLCC
FOUNDATION, INC., FOR USE OF APPROXIMATELY 2,543 SQUARE
FEET OFCITY-OWNED PROPERTY, LOCATED AT 1130 WASHINGTON
AVENUE, 1sT FLOOR NORTH, 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, MDGLCC Foundation, Inc. has expressed interest in leasing office
space on the north side of the first floor of the Building; and
WHEREAS, on September 3, 2009, the F&CPC was provided preliminary
information regarding MDGLCC's interest in leasing space in the Building; and
WHEREAS, on October 14, 2009, the Mayor and City Commission instructed the
Administration to prepare a lease agreement for City Commission review and approval;
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 February 3, 2010, pursuant to Resolution No. 2010-27332, the
Mayor and Cit~r Commission approved the attached Lease Agreement on first reading;
waived by 5/7~ S vote, the competitive bidding and appraisal requirements; and set the
public hearing on March 10, 2010, for second reading and final approval of the Lease
Agreement; and
WHEREAS, said public hearing was held on March 10, 2010.
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 MDGLCC Foundation,
Inc., for use of approximately 2,543 square feet of City-owned property, located at 1130
Washington Avenue, 1St Floor North, Miami Beach, Florida for 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 10th day of March, 2010.
ATTEST:
~~~ ~~~
Robert Parcher, CITY CLERK Matti He era Bower, MAYOR
F:\RHCD\,$ALLIECON\$ALLIASSET\OLDCITIIGAY 8 LESBIAN\MDGLCC Lease Agreement.2nd Reading.RES.doc
APPROVED AS TO
FORM & LANGUAGB
8~ 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 MDGLCC Foundation, Inc., snot-for-profit organization, for use of 2,543 SF of City-owned property located at 1130
Washington Avenue, 1s1 Floor North, for a term of three years, with two additional three year renewal terms.
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 Ci Commission a rove the lease a reement?
item sum
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 was provided preliminary
information regarding MDGLCC's interest in leasing space in the Building, but the Administration did not request a
recommendation from the F&CPC at that time. On October 14, 2009, the City Commission instructed the Administration to
prepare a lease agreement for City Commission review and approval. The City and MDGLCC have negotiated a proposed
lease with the following terms:
• Sauare Footage: 2,543 SF per updated 2009 City survey;
• Term: Three years with two additional three year renewal terms;
• Rent: $20 PSF; $50,860/year
• Base Rent: $23,319.31 annually, payable monthly @ $1,943.28, with 3% annual increase;
• Additional Rent: $27,540.69 annually, payable monthly @ $2,295.05, to offset City's operating expenses and
insurance costs. Tenant pays for electricity separately;
• Security Deposit: The Administration recommends $4,238.33 (equivalent of one month's rent) payable upon
execution of the Agreement; and an additional $4,238.33 payable ten days prior to the Commencement Date of the
Agreement.
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 bywaiving 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 February 3, 2010, pursuant to Resolution No. 2010-27332, The Mayor and City Commission approved the Lease
Agreement on first reading; waived by 5/7`"5 vote, the competitive bidding and appraisal requirements; and set the public
hearing on March 10, 2010, for second reading and final approval of the Lease Agreement. Approval is recommended.
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:
extension 7
Department Director Assista 'ty Hager City Manager
AP HF ~ JMG
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AGENDA ITEM ~~~
DATE 3'l0-l~
Im 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: March 10, 2010 SE OND READING & PUBLIC HEARING
SUBJECT: 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 MDGLCC FOUNDATION, INC., FOR USE OF
APPROXIMATELY 2,543 SQUARE FEET OFCITY-OWNED PROPERTY, LOCATED AT
1130 WASHINGTON AVENUE, 1sT FLOOR NORTH, 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 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 befully 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 square feet, 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 anyfuture 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
Staff has marketed the location using typical real estate marketing tools. However, based on the
fluctuation of the current real estate market in this economic environment, the City requested an
appraisal, which was performed by Bondarenko & Associates, Inc. to determine the market rent
value; with a revised appraisal provided on July 7, 2009 to reflect further changing conditions. The
resulting market renta- rates of $25-$30 PSF were determined to be based on gross rent, full
service. The $25 PSF market rent for floors 1 - 7 was set as an average, with a premium for the 8`n
Floor penthouse set at $30 PSF. The highest and best use for the entire building was deemed to be
"office", with the notation that the ground floor potential use as retail commercial is not practical due
to the restrictions of the historic designation of the building.
Commission Memorandum
MDGLCC Foundation, Inc.
March 10, 2010
Page 2 of 6
The MDGLCC Foundation, Inc. d/b/a the Miami Dade Gay and Lesbian Chamber of Commerce
(hereinafter referred to as "MDGLCC") is anot-for-profit, 501(c)3 organization that currently operates
its business at 3510 Biscayne Boulevard, Suite 205, Miami, Florida. Last year, they approached the
City regarding available space at Historic City Hall for purposes of relocating its operations, in
addition to developing a visitor center in an area that is more suitable to its base. MDGLCC's
proposed use of the space provides for a use that offers diversity and provides potential foot traffic
in the immediate area.
During a discussion on other proposed leases for Historic City Hall on September 3, 2009, the
Administration provided the F&CPC an update of the status of its discussions with MDGLCC. As
reported to the Committee, MDGLCC proposed developing a Welcome Center in the north section
of the first floor in the space that was then occupied by the Miami Design Preservation League.
MDGLCC proposed a rate of $20 PSF, which was below the range for that type of space and
average market rent of $25 PSF. Although the $20 PSF was below the appraised rate of $25 PSF,
and represents a reduction in revenue of $12,715 a year to the City, the Administration was
agreeable to the reduced rent to $20 PSF due to MDGLCC's non-profit status and proposed use.
Additionally, the Administration proposed atwo-month rent abatement, a savings of approximately
$8,500 that (combined with the $20 PSF reduced rent) would result in a total benefit to MDGLCC of
more than $21,000 a year, comparable to the support provided to other City-funded Chambers.
The Administration discussed with MDGLCC an initial term of three years with one renewal term of
three years. However, because MDGLCC and the City had not reached agreement on terms, the
Administration informed the F&CPC that it would continue negotiations and bring the proposed
lease terms back to the F&CPC. The update provided to the F&CPC was for informational purposes
only and the Administration did not request the F&CPC to make a recommendation at that time.
Nonetheless, the F&CPC suggested that MDGLCC ex~lore the possibility of sharing space with the
Miami Design Preservation League (MDPL) in the 10t Street Auditorium Building. On October 2,
2009, representatives of the City, MDPL and MDGLCC conducted a site visit to the 10th Street
Auditorium Building to access the F&CPC suggestion. At the conclusion of the site visit, all three
parties determined that there was not sufficient office space within the Building to accommodate
both MDPL's and MDGLCC's operational needs.
At the October 14, 2009 City Commission meeting, during its discussion of agenda item R9E
("Discussion Regarding How Miami Gay And Lesbian Chamber of Commerce Can Receive
Operational Support As The Other Chambers That Miami Beach Supports"), the Commission
discussed the lease terms discussed by the F&CPC on September 3, 2009, including not only office
use, but also a visitor's center and potential retail. Additionally, the City Commission recommended
a three-month rent abatement and instructed the Administration to prepare a lease for City
Commission review and approval. The proposed lease was presented to they Commission on first
reading on February 3, 2010.
LEASE TERMS
The following represents the lease terms negotiated by the City with MDGLCC for use of the space:
TENANT: MDGLCC Foundation, Inc., a Florida not-for-profit corporation.
DEMISED PREMISES: 2,543 SF on the north side of the 1St Floor of Historic City Hall, located at
1130 Washington Avenue.
TERM: Initial term of three (3) years, with two (2) additional three (3) year renewal
options, at the City's sole discretion.
Commission Memorandum
MDGLCC Foundation, Inc.
March 10, 2010
Page 3 of 6
COMMENCEMENT DATE: April 1, 2010.
RENT: $20.00 PSF; $50,860/year
Base Rent: $23,319.31 annually, payable in monthly installments of
$1,943.28. Base Rent (excludes Operating Expenses, Property Taxes and
Insurance) shall be increased annually, on the anniversary of the
Commencement Date, in increments of three (3%) percent per year.
Additional Rent: $27,540.69 annually, payable in monthly installments of
$2,295.05. Any increase in Operating Expenses and Insurance will result in
an increase to Tenant's proportionate share.
PARKING: Tenant may request, from the City's Parking Department, the use of no more
than six (6) parking spaces. Rates for said spaces are subject to change,
and are currently $70 per month plus applicable sales tax.
SECURITY DEPOSIT: Tenant shall furnish the City with a Security Deposit, in the amount of
$8,476.66 (equal to two months Rent costs), payable in two installments. The
1 St installment shall be due upon execution of the Lease. The 2nd installment
shall be due ten days prior to the commencement of the Lease.
USES: The Demised Premises shall be used by the Tenant as office, retail and
visitor center space for the Miami-Dade Chamber of Commerce. The
Demised Premises shall be open a minimum of five days a week (Monday-
Friday) from 10:OOAM to 6:OOPM.
IMPROVEMENTS: No significant improvement and/or build-out are anticipated.
INSURANCE: Tenant shall comply with the following insurance requirements throughout
the Term:
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.
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
Commission Memorandum
MDGLCC Foundation, Inc.
March 10, 2010
Page 4 of 6
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 the preceding, 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.
UTILITIES: Tenant retains sole responsibility for all utilities (not included as part of
Operating Expenses) including electric, janitorial Internet and telephone
services.
MAINTENANCE
AND REPAIR: Tenant shall be responsible for day-to-day maintenance and repairs of the
Demised Premises, including, without limitation, all fixtures, appurtenances,
equipment and furnishings.
As reported during the first reading on February 3'd, subsequent to the October 14, 2009 City
Commission meeting, the MDGLCC inquired on their ability to use the adjacent terrace area (west of
the office space, on the exterior of the building). MDGLCC's proposed lease space has two doors
that exit immediately out to the terrace area. Please see attached "Exhibit A" for a diagram depicting
this area.
The MDGLCC proposed that it be allowed access and use of the terrace during its normal hours of
operation for "passive" uses, as would be available to any other tenant of the building. Passive uses
in no way would be deemed to include or allow any type of use of the terrace, which includes an
organized event, a third parry use, any amplified music, and/or the sale or consumption of alcohol.
The City has included language in Section 7.3 of the Lease Agreement which provides MDGLCC
with periodic limited, non-exclusive use of the terrace. This language is identical to language
included in the Miami Design Preservation League's Management Agreement for use of the
"breezeway" adjacent to the 10`h Street Auditorium. As provided for in the proposed lease, any
organized event, third party use, or use by MDGLCC that includes amplified music, and/or the sale
or consumption of alcohol, will require that the MDGLCC submit a Special Event Permit application
for the appropriate review and approval, including any approval to exceed the limit offive (5) special
event permits per year.
CONCLUSION
The viability of securing a commercial retailer for this is space is limited, as the historic designation
of the building precludes any retailer from 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." MDGLCC's use of the space as a chamber
of commerce, which brings together businesspeople and merchants to promote commercial
interests in the community, in addition to its proposed visitor center and retail component, should
encourage activity that increases pedestrian traffic in the area.
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:
Commission Memorandum
MDGLCC Foundation, Inc.
March 10, 2010
Page 5 of 6
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 5/7cns 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 February 3, 2010, pursuant to Resolution No. 2010-27332, the Mayor and City Commission
approved the Lease Agreement on first reading; waived by 5!7'"S vote, the competitive bidding and
appraisal requirements; and set the public hearing on March 10, 2010, for second reading and final
approval of the Lease Agreement.
The proposed 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.
CONCLUSION/RECOMMENDATION
Based on the aforementioned, the Administration recommends thatthe Mayorand City Commission
hereby approve on second and final reading, following a duly noticed public hearing, the Lease
Agreement between the City and MDGLCC Foundation, Inc.
JMG/HMF/AP/RR
T:\AGENDA\2010\March 10\Regular\MDGLCC Lease Agreement.2nd Reading.MEM.doc
Commission Memorandum
MDGLCC Foundation, Inc.
March 10, 2010
Page 6 of 6
EXHIBIT A
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I Inquiries may be directed to tl
Miami Beach, Florida~3139. This meeting may be continued and under such circumstances additipnal el
Jould not`be provided.
Robert E. Parcher, Gity
GYty of Miami Bea>rh
allowed by law. -
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