2010-27420 Reso2010-27420
RESOLUTION NO. ,
I 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 STRANG .ADAMS,
1 P.A., FOR USE OF APPROXIMATELY 858 SQUARE FEET OF CITY-
OWNED PROPERTY, LOCATED AT 1130 WASHINGTON AVENUE, 3RD
FLOOR EAST, MIAMI BEACH, FLORIDA; SAID LEASE .HAVING AN
INITIAL TERM OF THREE YEARS AND TWENTY ONE DAYS, 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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1 WHEREAS, on October 21 2008 the Finance & Cit ide Pro'ects Committee
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(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
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WHEREAS, Strang Adams, P.A., has expressed interest in leasing office space in
a portion of the 3rd Floor of the Building; and
WHEREAS, the City and Tenant have negotiated the proposed Lease Agreement,
said proposed Lease Agreement having an initial term of three (3) years and twenty one
(21) days, commencing June 10, 2010 and ending June 30, 2013, 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
f public property, requires a competitive bidding process, a Planning Department analysis,
nd~an independent appraisal to determine the value of the leasehold interest, as well as
vo {(2) readings of the proposed lease, with the second (and final) reading followed by an
dvertised .public hearing to obtain citizen input; and
WHEREAS, on May 12, 2010, pursuant to Resolution No. 20010-27396, the Mayor
end ICity Commission approved the Lease Agreement on first reading; waived by 5/7th vote,
he .competitive bidding and appraisal requirements; and set the public hearing on June 9,
'.010, for second reading and final approval of the Lease Agreement; and
WHEREAS, said public hearing was held on June 9, 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
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Com~rnission hereby approve on second reading (and final approval), following a duly
noticed public hearing, a Lease Agreement between the City and Strang , P.A., for use of
approximately 858 square feet of City-owned property, located at 1130 Washington
Ave ~ ue, 3rd Floor East, Miami Beach, Florida; said Lease having an initial term of three
years and twenty one days, 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 June, 2010
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ATTEST:
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.Robert Parcher, CITY CLERK Matti Herrera. Bower, MAYOR
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APPROVED AS TO
~~ FORM & LANGUAGE
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Condensed Title:
COMMISSION ITEM SUMMARY
A Resolutiori approving, on second reading, following a duly~noticed public hearing, a Lease Agreement between the City
and Strang Adams, P.A., for use of 858 SF ofCity-owned property located at 1130 Washington Avenue, 3~d Floor East, for a
term of three years and twenty one days, with two additional three year renewal terms.
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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: j
Should the City Commission approve the lease aareement?
Item Summa' /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 at competitive market rates. The City and Rubin & Rickman have
negotiated i proposed lease agreement for use of office space at Historic City Hall with the following terms:
• ~ Square Footage: 858 per updated 2009 City survey;
• ;Term: Three years and twenty orie days with two additional three year renewal terms;
• ~ Rerit: $23.78 PSF, $20,403.24 annually;
~ ~o Base Rent: $9,498.06. annual) a able month)
~ y p y y @ $791.50, with 3% annual increase;
o Additional Rent: $10,905.18 annually, payable monthly @ $908.77 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
E $3,400.54 (equal to two months of Rent and Additional Rent costs).
A prior appr
of current e
Building.
Section 82-
City Commi
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industry sta
On May 12,
on first read
9, 2010, foi
discussed ti
isal;found comparable per square foot (p'sf) rents in the nearby area at approximately $25 psf. However, in light
onomic conditions, the Commission has previously approved comparable psf rents for other tenants in the
provides for the waiver of the competitive bidding and appraisal requirements, by 5/7ths vote of the Mayor and
ion, upon a finding by the Mayor and City Commission that the public interestwould be served by waiving such
the March 10, 2009 meeting of the F&CPC, the Committee determined that it was in the public's best interest
etitive bidding and staff should proceed in leasing available space in the Building according to market rates and
ands.
?010, pursuant to Resolution No.20010-27396, the Mayor and City Commission approved the Lease Agreement
~g; waived by 5/7'hs vote, the competitive bidding and appraisal requirements; and set the public hearing on June
second reading and final approval of the Lease Agreement. Subsequently, on May 20,' 2010, the F&CPC
e proposed lease agreement and recommended its approval.
mmendation:
~ Finance & Citywide Projects Committee October 21, 2008, March 10, 2009, and Mav 20' 2010.
Financial Information:
Sourcejof Funds: Amount Account
n/a i ~ 1 n/a
Financial Impact Summary:
Cit Clerk's Office Le islative Trackin
Anna Parekh, extension 7193
Sign-Offs: {
De t~ Director Assistan it Mana er Cit Mana er
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SUBJf
F Miami Beach, '1700 Convention Center Drive, Miami Beach, Florida 331'39, www.miamibeachfl.gov
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COMMISSION MEMORANDUM
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~ Mayor Matti Herrera Bower and Members of the Cit ommission
Jorge M. Gonzalez, City- Manager
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June 9, 20.10 ~ SEC ND .READING & PUBLIC HEARING
CT: ' A:RESOLUTION.: OF THE MAYOR D CITY COMMISSION OF THE CITY OF MIAMI
i BEACH; FLORIDA, APPROVING ON FIRST READING, A' LEASE AGREEMENT
BETWEEN THE CITY AND STRAND ADAMS, P.A., FOR USE OF APPROXIMATELY
858 SQUARE FEET OFCITY-OWNED PROPERTY, LOCATED AT 1130 WASHINGTON
1 AVENUE, 3RD FLOOR EAST, MIAMI BEACH, FLORIDA; SAID LEASE HAVING AN
i:INITIAL TERM OF THREE YEARS AND TWENTY ONE DAYS,. WITH TWO ADDITIONAL
THREE YEAR RENEWAL TERMS, AT THE CITY'S SOLE DISCRETION; WAIVING BY
5/7THS VOTE; THE COMPETITIVE$IDDING AND APPRAISAL.REQUIREMENTS, AS
~-REQUIRED BY SECTION 82-39 OF THE MIAMI BEACH CITY CODE; FURTHER
SETTING A PUBLIC HEARING.ON JUNE 9, 2010, FOR THE SECOND READING (AND
FINAL APPROVAL) OF THE LEASE AGREEMENT
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INISTRATION RECOMMENDATION
t the Resolution.
NDED:OUTCOMES SUPPORTED
resident satisfaction with the level of services and facilities.
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e October 21, 2008.meeting .of the Finance & Citywide Projects Committee (F&CPC), and
equently at their meeting of March 10, 2009, and following a comprehensive review of the
office~space use; it was determinedthat Historic City Hall would not be fully re-occupied by
offices, resulting in leasable space availability. for non-City uses. The Committee directed the
nistration to advertise and market the available leasable space, a total of approximately 14,194
re feet, ihcluding the ground floor, but exclusive of the second floorspace utilized by the Clerks
:Courts. .
meeting, the Committee also approved the Administration's recommendation That the process
weloping lease agreements-based on supply and demand. be utilized for.-the leasing. and
parcy,of these'available spaces, and that any,future commercial leases (including renewals
it extensions) for use of space at Historic City Hall. be handled as it is in the private sector and
~roiagh a competitive bid' .process, with: the Administration ensuring that market rates are
tiated and operating expenses included. All leases would continue to require City Commission
>vaf per City Code...
marketed. the location using typical real estate marketing tools. However, based on the
ations of the real. estate market in this economic environment, the City requested an appraisal,
I was performed by Bondarenko & Associates, Inc. to determine the market rent value; with a
;d appraisa( provided, on July 7, 2009, to reflect changing conditions.. The resulting markef
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Commission Memorandum
Strange Adams
June 9, 2010
Paget of 4
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rental rates of $25-$30 PSF were determined to be based on gross rent,~full service. The $25 PSF
`market rent for floors 1 - T was set as an average, with a premium for the 8t" 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.
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On April 26, 2010; Koniver Stern Group, the City's contracted real estate broker, presented the City
with ~a L'etter of Intent (LOI) on behalf of Strang Adams, P.A., a South Florida law firm, who
expressed an° interest in a portion of the 3rd Floor that is currently vacant and available. I<oniver
Stern recommended that the City consider the proposed lease terms based on the City's ability to
secure a viable tenant during this economic time, and at a competitive PSF rate, fora lower level
flooriwith no views. Additionally, this provides a tenant for the vacant half of the floor, allowing the
City }to lease up the entire floor. The tenant is also investing a minimum of $8,500.00 in tenant
i}mprovements which will be beneficial to the City as it remains an improvement to a portion of a floor
thaf wasionly partially complete (in exchange for a rent credit). This portion of the 3rd Floor requires
build out. Property Management estimated that it would cost the City $49,226.00 to build out this
portion of the 3rd Floor:
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The Administration .proceeded to negotiate a proposed' lease agreement for City Commission
pproval: A summary of theproposed lease terms are as follows:
TENANT: Strang Adams, P.A., a. Florida corporation.
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SED PREMISES: 858 Sf on the east half of the 3rd floor of Historic City Hall, located at 1130
Washington Avenue. `
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I: ' Initial term of three{3) years and twenty one (21) days; with two (2) additional
1 three (3) year renewal options, at the City's sole discretion.
E„COMMENCEMENT DATE: June 10, 2010.
' COMMENCEMENT DATE: December 1, 2010.
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~ $23.78 PSF; $20,403:24 annually;
~ .- BASE RENT: $9,498.06 annually, payable in monthly installments of
$791.50. Base Rent (excludes Operating. Expenses, Property Taxes and
Lnsurance) shall be increased annually, on the anniversary of the
Commencement Date,,in' increments of three (3%) percent per year.
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ADDITIONAL RENT: $10,905.18 annually; payable in monthly installments
of $908.77. Any increase in Operating Expenses and Insurance vvilfresult in
` an increase to Tenant's proportionate share.
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ING: Tenant may request, from the City's Parking Department, the use of no more
! than two (2) parking spaces. Rates for said spaces are subject to change,
and are currently $70 per month plus applicable sales tax.
RITY DEPOSIT: Prior. to. the execution of the Lease, Tenant will furnish the City with a
. .Security Deposit in the sum of $3,400.54 (equal to two months Rent and
i. - Additional Rent costs).
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~mmission Memorandum
~ang Adams
ne 9, 2010
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The Demised Premises shall be used by the Tenant as office for providing
legal services. The Demised Premises shall be open a minimum of five days
a week (Monday-Friday) from 9:OOAM to 5:OOPM.
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VSURANCE
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Tenant agrees to make certain improvement to the Demised Premises in the
minimum. amount of $8,500.00 in exchange fora 10 week credit against
Rent, in addition to the standard three month credit against Rent.
Tenant shall comply with the following insurance requirements throughout
the Term:
Comprehensive Generaf Liability in the minimum amount of $1,000,000 per
occurrence for. bodily injury and property damage. The City of Miarni 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.
PERTY 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/orfhe 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.
Notvvithstandingtha 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.
Tenant retains sole responsibility for all utilities (riot included as part of
Operating 'Expenses) including janitorial, Internet and telephone services.
Tenant shall be responsible for day-to-day .maintenance and repairs of the
Demised Premises, including, without limitation, all fixtures, appurtenances,
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Commission Memorandum
Strang. Adams
' ~ , June 9, 2010
Page 4 of 4
! equipment and furnishings.
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Section 82-39 of the Miami Beach Gity 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
i 5) a public hearing to obtain citizen input.
.Section 82-39 further provides for the waiver of the competitive bidding Arid appraisal requirements,
by 5/7tns'vote of the :Mayor and-City Commission, upon a finding by the Mayorand City-Commission
' i~hat 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
` liand'-use designation contained in the Comprehensive Plan.
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On May 12, 2010,-the Mayor and City Commission adopted Resolution No. 2010-27396,. approving
the proposed lease .agreement on first reading; waived by 5/7ms vote, the"competitive bidding -and
appraisal requirements;. and set a public hearing on June 9, 2010, for second reading (and final
approval) of the lease agreement..Additionally, the City Commission-referred the proposed lease
agreement to the F&CPC for discussion., Subsequently, on May 20, 201.0, the F&CPC discussed the
~ roposed agreement and recommended.that the City Commission approve the lease..
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The proposed lease terms are within the range of comparable spaces, in the area, and reflect the
' current'economicreallty. This tenant's use is consistent with the uses envisioned for Historic City
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Based on the aforementioned; the Administration recommends that-the Mayor and City Commission
approve~on second and final reading, following a duly noticed ..public hearing, the lease agreement
betweeri the City and Strang. Adams, P.A., for use of the east portion of the 3rd .Floor with the f
proposed terms, as delineated herein.
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Should the City Commission approve this lease, and the lease for. use of the 4tn Floor, which is also
on this agenda, only the 5th Floor of Historic City Hall will remain available for lease.
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