570-2010 RDA Reso570-2010
RESOLUTION NO.~ ,
A RESOLUTION OF THE CHAIRPERSON AND MEMBERS OF THE
MIAMI .BEACH REDEVELOPMENT AGENCY (RDA), APPROVING
TIIE RENEWAL OPTION OF THE MANAGEMENT AND LEASING
AGREEMENT WITH THE MIAMI BEACH COMMUNITY
DEVELOPMENT CORPORATION (MBCDC), IN ASSOCIATION
WITH FELENSTEIN KONIVER STERN REALTY GROUP (FKS) FOR
THE MANAGEMENT OF THE RETAIL COMPONENT OF THE
ANCHOR SHOPS AND PARKING GARAGE (ANCHOR SHOPS); SAID
RENEWAL TERM, PROVIDING FOR AN ADDITIONAL THREE (3)
YEAR TERM, COMMENCING RETROACTIVELY ON MAY 1, 2010,
(UPON EXPIRATION OF THE INITIAL TERM) AND ENDING ON
APRIL 30, 2013; FURTHER APPROVING AN AMENDMENT TO THE
SCOPE TO ELIMINATE LEASING AND TO REMOVE FELENSTEIN
KONIVER STERN REALTY GROUP AS A CONTRACTOR; AND
AUTHORIZING THE EXECUTIVE DIRECTOR AND CITY CLERK TO
EXECUTE THE AGREEMENT.
WHEREAS, on May 30, 2003, the RDA approved a Management and Leasing
Agreement ,with Miami Beach Development Corporation (MBCDC), in association with
Felenstein Koniver Stern Realty Group (FKS);~~as the successful proposer pursuant to RFP
No. 05-02/03, for the management and leasing of the retail component of the Anchor
Shops and Parking Garage (Anchor Shops); and
WHEREAS, the initial term of the Agreement was for a period of three (3) years,
commencing on May 1, 2003, and expiring on April 30, 2006, and
WHEREAS, on March 8, 2006, the RDA approved a one (1) year renewal option,
as provided. for in the Agreement, which extended the term until April 30, 2007; and
WHEREAS, on May 17, 2007, the RDA Board approved a waiver of competitive
bidding, and authorized the execution of a new Management and Leasing Agreement with
MBCDC and FKS, having an initial term of three (3) years, commencing retroactively on
May 1, 2007, and ending on April 30, 2010, with an option to renew, at the RDA's sole
discretion, for an additional three (3) year term, subject and pursuant to the terms and
conditions set forth in the Agreement; and
WHEREAS, on December 9, 2009, the City Commission approved the execution
of a separate Listing Agreement with the Koniver Stern Group (KSG) to provide leasing
services for City-owned properties; and
WHEREAS, since the Anchor Shops remain 100% leased at the present time,
with the shortest remaining lease term coinciding with the end of the proposed renewal
term, the Administration recommends amending the scope in the Management and
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Leasing Agreement to eliminate leasing; and to add the Anchor Shops to KSG's scope
under its'Listing Agreement; and
WHEREAS, MBCDC continues to provide a valuable service to the RDA, not
only responding to issues concerning the Anchor Shops,. but also to issues'concerning the
neighborhood as a whole; and
WHEREAS, ,approving the renewal option with MBCDC, will allow for a seamless
continuation in the management of the Anchor Shops by a proven team that has local
presence and undecstands'the.ncture of the community, which in turn prov:,ides for greater
responsiveness, to the needs of the tenants as well as ensures that the retail space is
maintained in good condition. '
NOW,'THEREFORE, BE IT DULY RESOLVED BY THE CHAIRPERSON` AND
MEMBERS OF THE MIAMI BEACH REDEVELOPMENTAGENCY, -that the Chairperson
and Members hereby approve the renewal of the Management and Leasing Agreement
with the~Miami $each .Development Corporation (MBC'DC) and' Felensteir Koniver Stern
Realty Group (FKS), for the management, and leasing of the retail component of the
Anchor Shops and Parking Garage (Anchor Shops}; said renewal term, providing for an
additional three (3) year term, commencing retroactively on May 1, 2010, (upon expiration
of the inifial term), and ending on April 30, 2013; further approving an amendment to the
scope to eliminate leasing and to remove Felenstein Koniver Stern Realty Group as a
.contractor; an authorizing the Executive Director and City Clerk to execute the Agreement.
PASSED and ADOPTED this 9th day of June, 2010.
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' MIAMI BEACH REDEVELOPMENT AGENCY
AGENDAITEM SUMMARY
Condensed Title:
AResolution of the Chairperson ana Members of the RDA, authorizing the execution of a;renewal option of the Management
Agreement with. Miami Beach Development Corporation (MBCDC) and Felenstein KoniverStern'Realtyeroup (FKS), for"the
management and leasing of the retail component of the Anchor Shops and Parking Garage; said renewal Perm, providing for
an additional..three (3) year term,"commencing retroactively on May T, 2010 (upon: expiration of the initial term)"and ending on
April 30,-201.3; further approving an amendmentto the scope 4o eliminate leasing .and to" remove FKS as a contractor.
Kev Intended Outcome Supported:
increase resident satisfaction with. the level of services and facilities. '
Supporting Data (Surveys, Environmental Scan, etc.): ~ "
Approximately40%: of retail businesses surveyed; -rank Miami Beach as one of the best places to do'bus'iness and 61 % of
the same group would recommend Miami Beach as a place to do business.
..Issue: ~ .. _ '
Should the RDA approve the renewal. option and the amendment to the Agreement as proposed?
Item 5ummarv/Recommendation:
On May 30; 2003, the RDA. Board approved a Management and Leasing Agreement with the Miami' Beach Development
' Corporation (MBCDC), in association with"Felenstein Koniver Stern Realty Group (FKS), as the successful proposer pursuant
to RFP,No. 05-02/03, for the management and leasing of the retail component of the Anchor Shops and Parking Garage
`(Anchor Shops). The initial term of the Agreement was for a period of three (3) years,. commencingon .May 1, 2003, and
expiring on'April 30, 2006, with-a one {1) year renewal;option..The option was exercised and, subsequently, on May 17, 2007,
the. RDA Board approved,a waiver of competitive bidding, and authorized the execution of a-new Management and Leasing
Agreement with MBCDC and FKS; having an initial term of three (3) years, and ending on April 30, 2010, with an option to
renew, at the' RDA's sole discretion, for an additional three (3) year term, subject and pursuant to therterms and conditions
set forth in the Agreement..
Appro^Ving the renewal option with-MBCDC will allow for a seamless continuation of the management of the Anchor Shops by
„a team which has, local presence .and understands "the history and operations of existing tenants, which facilitates
responsiveness to the tenants as well as ensures" that the retail space is maintained in good condition: In light of the
reduction in Asset Management staffing. during the current budget year, this contract provides for the necessary tenant
support and oversight; On December 9, 2009, the City Commission approved the execution ofa separate Listing Agreement
} with the.Koniver Stern Group (KSG) to:provide leasing servicesfor City-owned properties. Since the Anchor Shops remain
? 100% leased at this dime, with the shortest remaining lease term coinciding with the end of the proposed renewal term, the
Administration is recommendirig amending the scope inahe Management and Leasing Agreement to eliminateleasing; and to
add-the Anchor Shops to KSG's scope under its Listing Agreement. '
_ ~ • ' 'The Administration therefore recommends approval of the renewal option commencing retroactively on May 1, 2010 and
ending on April"30, 2013, with no further renewal options remaining; and further amending_the scope of the Agreement to
- ~ eliminate leasin and FKS' as a contractor.
' "Adviso Board Recommendation:
'° N.A. . '' k ,
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~. ; Financial Information: i
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~` City Clerk s Office Legislative Tracking: ' •
Sian-Offs:
' ~: RHGD Director. ~ As 'taut Director Executive Director
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~IVIIAMIBEACH ~ ,
' :City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida.33139, veww.miamibeaehf4l.gov
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' ~ REDEVELQPMENT AGENCY MEMORANDUM
_ ~ To: Chairman and Members of the Miami Beach Redevelopment Agency '
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FROM:. Jorge M. Gonzalez, Executive Director
` DATE:. June 9; 2010 ~ '
-SUBJECT: A RESOLUTION OF THE CHAIRPERSON AND 'MEMBERS OF THE MIAMI
BEACH REDEVELOPMENT AGENCY (RDA), APPROVING THE RENEWAL
OPTION OF THE MANAGEMENT AND-.LEASING AGREEMENT WITH THE.
MIAMI BEACH COMMUNITY DEVELOPMENT CORPORATION (MBCDC), IN
' ~ ASSOCIATIONWITHfELENSTEIN KONIVERSTERN REALTY:GROUP{FKS)
'.FOR THE.MANAGEMENT OF THE RETAIL COMPONENT OF THE ANCHOR
` ` SHOPS AND PARKING GARAGE (ANCHOR SHOPS); SAID RENEWAL TERM,
. - ~ - PROVIDLNG FOR AN ADDITIONAL THREE (3) YEAR TERM,.COMMENCING
' ~ ~ -- ~ ~ ,RETROACTIVELY ON MAY .1, 2010,. (UPON EXPIRATION.OF THE INITIAL
' " TERM) AND ENDLNG ON APRIL 30, 2013; FURTHER APPROVING AN
` ~.. AMENDMENT TO THE SCOPE TO ELIMINATE LEASING AND. TO REMOVE .
~FELENSTEIN KONIVER STERN REALTY.GROUP AS A CONTRACTOR; AND "
AUTHORIZING THE EXECUTIVE. DIRECTOR AND CITY CLERK TO EXECUTE
- :THE AGREEMENT... i
ADMINISTRATLO~N RECOMMENDATION ~ t
w.
~- Adopt the Resolution
. BACKGROUND
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~ . On May 30; 2003,~the RDA $oard approved. a Management and Leasing Agreement withthe ~ '
Miami:Beach Development Corporation (MBCDC), in association~with Felenstein Koniver
Stern Realty Group (FKS) (collectively MBCDC/FKS), as the successful proposer pursuant `
to RFP No: 05-02/03; for the management and leasing. of the retail componenfifof the Anchor
t -Shops and Parking Garage (Anchor Shops).
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.~ The.~initial term of the Agreement was for a period of three (3) years, commencing on May 1,
2003, ~ and expiring on Apnl 30; 2006. On March 8, 2006, subsequent to the
recomrneridation of the Finance and Citywide Projects Committee, thet RDA Board
~ authorized a one (1) yearrenewal option, as provided for in the Agreement, which extended
the term until April 30, 2007.. I
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On May 17, 2007, pursuant to the recommendation of the Finance and Citywide, Projects
=: ~ ` Committee FCWPC ,the. RDA Board a
~,: ~ ( ) pproved a .waiver of competitive ibidding, and
'authorized the execution of a new Management and Leasing Agreement"with MBCDC and
• ~~ ~ ' FKS, having-an initial term of three (3) years, commencing retroactively on May 1, 2007 .
and. ending on April 30, 2010, vvith an option to renew, at the RDA's sole discretion, for an .
additional three (3) year term; subject and pursuant to the terms and conditions set forth in
,the Agreement: Exercising the renewal option vvill extend MBCDC's contract until April 30,
201.3. _ _
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. ' June 9, 2010 -
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~~ Redevelopment Agency Memorandum
Anchor Shops Management and Leasing Agreement
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Page 2 of 4 . ~
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°~ ~ ~ The Board s decision to waive competitive bidding was based on the fact that since the
termination of the Master Lease Agreement between Loews and the RDA in November,
- 1999, there were two (2) RFP processes initiated'for the management and op4eration of the'
~ Anchor Shops;. both of which generated very. little interest. from. property management/ .
~ ~.' leasing firms. A subsequent survey of firms hat inquired about the RFPs but failed to submit
,~ ~ .; proposals, indicated. that the .real. incentive in managing and leasing a retail1 facility is the
i potential to-earn leasing commissions on new leases and/or renewals. Since the Anchor
` Shops were'1'00% leased, there was little interest in submitting proposals. Additionally, with
S only.21,000 square feet of retail-space, there was little flexibility in being able to charge.~a
significant management fee to make submitting a proposal worthwhile. Since the Anchor
• r Shops was fully leased, both the FCWPC and the RDA Board determined that an RFP was
i unlikely.to attract much interest. r
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. ~ -_ ANALYSIS ~
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.. Pursuant to the current Agreement, MBCDC receives a fee equivalent to:four `(4) percent of
annual lease revenues, which based upon FY 08/09 operating results,. totaled approximately
- j $28,400.. The fee partially funds hree management/administrative ,positions and on'e
- ' .maintenance position,•which is significantly less than what it would cost the RDA to hire~a
.single administrative position to assume the same scope of work involved! It should be
` noted; that this fee is well within the industry standard which generally ranges between 3% -
and 6% of grossrevenues. MBCDC's fee for FY 10/11 has been budgeted at+$29;000 (4% -
,. of gross revenues). ~~ .
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- ? • In addition, MBCDC bills the RDA monthly for direct costs associated with the upkeep and •
`maintenance of the Anchor Shops, which are paid on a reimbursable basis. These costs
' ~ include, but are not limited to, operating. supplies (including cleaning materials, light bulbs -
r . - ~ and other consumable ""and expendable items); minor. (non-structural) .repair .and
' maintenance costs; professional service contracts, including additional sanitation pick up;
P and,.other costs and expenses, pre-approved by the RDA, necessary for the operation of
the Facility. Pursuant to the operating statement for FY 08/09 for the Anchor Shops, actual
reimbursable expenses totaled $22,34.1, which came in $1;000 under budget for the year.;lt
.should also be noted that because. of °the flexibility associated with the reimbursable
~ provisions, that MBGDChas often times been able to address maintenance and cleanliness
;" , • problems that otherwise should have been addressed by the City. Reimbursable expenses •
for FY 2010/11 have been budgeted at $31,000, which includes a contingency cushion. ;
F . ~ The original Agreement also provided for a leasing commission to be paid to FKS to procure
and negotiate leases foi- any available space that :became available.. However, since the
. ~ inception of the contractual relationship between the RDA and MBCDC/FKS, no
• -commissions have ever been paid since the Anchor Shops have remained 100% leased
- . and any new leases that have - occurred were either the :result of lease renewals or
e • transfers not.. involving FKS. Additionally, on December 9, 2009, the Commission approved
>; the execufion of a separate Listing Agreement with.the Koniver Stern Group (KSG) to
• ~~ . ~:. provide leasing services for City-owned .properties. Staff is therefore recommending..
amending the scope in the Management and Leasing Agreement to eliminate leasing from
; the scope, and to add' the Anchor Shops to KSG's scope under its c ~ rrent Listing
Agreement. Since the Anchor Shops remain 100% leased, with"the shortest remaining lease
•~ term, terminating in 2013, the RDA does not anticipate having to pay leasing commissions at
this time.
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June 9, 2010 '.
Redevelopment Agency Memorandum
,Anchor Shops Management and Leasing Agreement i ;
Page 3 of 4
As the Property Manager for the Anchor Shops, MBCDC's scope of services includes, but is
not limited to: ~
- collecting and remitting lease revenues;
- providing a means of communication for retail tenants to address and/or resolve matters
.pertaining to their respective leases, such as, but not limited to, collection. issues and
maintenance or repair concerns;
- providing timely response to tenant issues and concerns;
- conducting daily on-site inspections to ensure that tenant spaces and common area
spaces are maintained to a standard consistent witha first class retail center;
• - coordinating with the City's Property Management Division on maintenance issues
affecting the facility.
- communicating and coordinating with tenants to secure their respective spaces, in the
event of a hurricane and/or any otl~r citywide emergency;
' - coordinating and facilitating any tenant improvements involving new and/or existing
.leases; '
- coordinating marketing and advertising efforts at tenant's expense;
- maintaining a system of accounting, bookkeeping and reporting that will accurately
reflect all income received and disbursements made in connection with the operation
and maintenance of the Anchor Shops;. ~
- affecting a good neighbor policy through involvement and coordination with local area
residents, businesses and business organizations.
' MBCDC is also responsible for coordinating with the City's Parking Department and the
City's Property Management Division to identify and track items in need of; replacement
and/or repair. Since the tenants are responsible for maintaining their own interior spaces,
MBCDC ensures that spaces are maintained appropriately and, if needed, provides
assistance to facilitate and/or expedite repairs. Additionally, any space which becomes
vacant falls under the responsibility of the MBCDC to maintain and show to prospective new
tenants (in consultation with our Listing Agent}
CONTRACT RENEWAL CONSIDERATIONS
While RHCD staff could conceivably assume these responsibilities in lieu: of renewing
MBCDC's contract, you may recall that our Asset Management staffing was reduced this
budget year. The Department only has two positions to monitor contract deliverables related
to 135 Agreements, including retail and commercial leases, concessions, settlements,
easements, management and development agreements, which in itself presents significant
challenges due to systematic constraints and the amount of time involved in addressing
compliance-related issues.
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A decision to shift this function in-house would only result in minimum cost savings (if any)
and would also likely impact the service level provided to the area as well as to the tenants
themselves.
A recent tenant surve conducted in advance of considerin MB
Y g CDC s renewal indicated
that MBCDC is generally very responsive to the tenants' needs and because of the long-
standing relation with MBCDC, as well as its local presence in the community, there is ~a
personal connection, as well. Without an additional staff position in-house to address
tenant-related issues (as well as monitor and coordinate maintenance-related concerns), it is
unlikely RHCD staff can be expected to provide the same level of responsiveness. It should
also be noted that this same survey identified major areas of concern as well, not with
June 9, 2010
Redevelopment Agency Memorandum
Anchor Shops Management and Leasing Agreement
Page 4 of 4
MBCDC, but with the City's ability to effectively cope with recurring problems associated with
the amount of homeless in the area, loitering cab drivers, cleanliness of the streets and
sidewalks in the area, lack of visible police presence and security in the area and use of the
stairwells and elevator lobbies of the garage as restroom facilities. ,
CONCLUSION
Approving the renewal option with MBCDC will allow for a seamless continuation in the
management of the Anchor Shops by a proven team that has local presence and
understands the nature of the community, which in turn provides for greater responsiveness
to the needs of the tenants as well as ensures that the retail space is maintained in good
condition. Additionally, with its offices located within four blocks of the Anchor Shops,
MBCDC can continue to conduct daily and often-times multiple daily site visits to addres's
tenant issues, maintenance and cleaning of the facility. Attempting to assume these
responsibilities in-house may impact the level. of tenant support and services, especially as a
result of reductions in Asset Management staffing. For these reasons, the Administration
recommends approving the renewal option, as well as amending the scope of the
Management and Leasing Agreement to eliminate leasing and to remove FKS as a
contractor. ~
AP: KOB
Cc: Hilda Fernandez, Assistant City Manager
Kent O. Bonde, Redevelopment Coordinator
T:Wgenda~2010Wune 9\RDAWIBCDC Memo.doa