2010-27454 Reso2010-27454
RESOLUTION NO.
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, APPROVING ON FIRST READING, A
LEASE AGREEMENT BETWEEN THE CITY AND JON KRUTCHIK, FOR
USE OF APPROXIMATELY 1,802.89 SQUARE FEET OF CITY-OWNED
PROPERTY, LOCATED AT 1701 MERIDIAN AVENUE, UNIT 2 (A/K/A 767
17T" STREET), MIAMI BEACH, FLORIDA; SAID LEASE HAVING AN
INITIAL TERM OF FOUR YEARS AND 364 DAYS,. WITH ONE
ADDITIONAL FIVE YEAR RENEWAL TERM, AT THE CITY'S SOLE
DISCRETION; WAIVING BY 5/7THS VOTE, THE COMPETITIVE BIDDING
AND APPRAISAL REQUIREMENTS, AS REQUIRED BY SECTION 82-39
OF THE MIAMI BEACH CITY CODE; REFERRING THE LEASE TO THE
FINANCE AND CITYWIDE PROJECTS COMMITTEE FOR DISCUSSION;
FURTHER SETTING A PUBLIC HEARING ON SEPTEMBER 15, 2010,
FOR THE SECOND READING (AND FINAL APPROVAL) OF THE LEASE
AGREEMENT
WHEREAS, on October 17, 2001 the City Commission adopted Resolution No.
2001-24661, authorizing the purchase of 1701 Meridian Avenue Building (a/k/a 777
Building) with the intention of preserving the retail environment on the ground floor of the
property; and
WHEREAS, on March 10, 2009, the Finance & Citywide Projects Committee
(F&CPC) recommended that any commercial leases (including renewals and/or
extensions) for use of space at the Building be handled as it is in the private sector and not
through a competitive bid process; and
WHEREAS, Jon Krutchik has expressed interest in leasing ground floor retail space
in the Building; and
WHEREAS, the City and Tenant have negotiated the proposed Lease Agreement,
said proposed Lease Agreement having an initial term of four (4) years and 364 days,
commencing October 1, 2010 and ending September 30, 2013, with one additional five (5)
year renewal term, 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 recomme~,d that the Mayor and City
Commission approve the attached Lease Agreement on first reading, refer the Lease to the
F&CPC for discussion, and hereby set the public hearing on September 15, 2010, 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 5Rtns 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 between the City and
Jon Krutchik, for use of approximately 1,802.89 square feet ofCity-owned property, located
at 1701 Meridian Avenue, Unit 2 (a/k/a 767 17th Street), Miami Beach, Florida for an initial
term of four years and 364 days, with one additional five year renewal term, at the City's
sole discretion, and waiving by 5/7ths vote, the competitive bidding and appraisal
requirements, as required by Section 82-39 of the Miami Beach City Code; referring the
Lease to the Finance and Citywide Projects Committee for discussion, and further setting a
public hearing on September 15, 2010, for the second reading (and final approval) of the
Lease Agreement.
PASSED and ADOPTED this 14th day of July, 2010.
ATTEST:
~~ ~
Robert Parcher, CITY CLERK Matti Herrera Bower, MAYOR
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F:~RHCD~$ALL~ECON\$ALLIASSET~777-17th StreetUVlassage EnvyWlassage Envy Lease Agreement.1st Reading.RES.doc
APPROVED AS TO
FORM LANGUAGI
8~ FC)Hl~XECUTION
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Condensed Title:
COMMISSION ITEM SUMMARY
Request for approval for a Lease Agreement between the City and Jon Krutchik, for use of 1,802.89 SF of City-owned
property located at 1701 Meridian Avenue, Unit 2 (a/k/a 767 17th Street), for a term of 4 years and 364 days, with one
additional five year renewal term, waiving by 5/7ths vote the competitive bidding and appraisal requirements as required by
Section 82-30, referring the Lease to the Finance Committee for discussion, and setting a public hearing on September 15,
2010, for second reading and final approval of the Lease.
Kev Intended Outcome Suaported:
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 ~rcecommenaaiion:
FIRST READING
On October 17, 2001, the City Commission adopted Resolution No. 2001-24661, authorizing the purchase of the 1701
Meridian Avenue Building with the intention of preserving the retail environment on the ground floor of the property. On
March 10, 2009, the Finance & Citywide Projects Committee (F&CPC) recommended that any commercial leases (including
renewals and/or extensions) for use of space at the Building be handled as it is in the private sector and not through a
competitive bid process. The City and Mr. Krutchik have negotiated a proposed lease for use of ground floor retail space at
767 17th Street, with the following terms:
• Sauare Footage: 1,802.89 per updated 2007 survey;
• Term: Four years and 364 days, with one additional five year renewal term;
• Rent: $40.00 PSF, $72,115.60 annually;
o Base Rent: $49,763.08 annually, payable monthly @ $4,146.92, with 3% annual increase;
o Additional Rent: $22,352.52 annually, payable monthly @ $1,862.71 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
$18,028.89 (equal to three months of Rent and Additional Rent costs).
The average PSF cost of other ground floor Tenants in the Building is $42.00. Because of a sizeable tenant improvement
that will be required that exceeds the tenant credit the City and the proposed tenant have agreed to, and in light of current
retail market conditions, the proposed psf is recommended.
Section 82-39 provides for the waiver of the competitive bidding and appraisal requirements, by 5Rths vote of the Mayor and
City Commission, upon a finding by the Mayorand City Commission that the public interestwould be served by waiving such
conditions. A Planning Department analysis finds that the use of this space is consistent with the land use designation
contained in the Comprehensive Plan. It is recommended that the Mayor and Commission approve the proposed lease per
the negotiated terms on first reading and refer to the Finance and Citywide Projects Committee prior to a second reading
public hearing.
Adviso Board Recommendation:
Finance & Citywide Projects Committee, October 21, 2008 and March 10. 2009.
Financial Information:
Source of Funds: Amount Account
n/a L1 n/a
Financial Impact Summary:
ci GIerK'S Vmce Le ~siative TracKin
Anna Parekh, extension 7193
Si n-Offs:
Anna Parekh, Department Director Hitda M. na ez, Assistant City Ma Jorge M. Gonzalez, City Manager
AP HF JMG
T:WGENDA\2010Uu1y 14\Regular\Krutchik Lease Agreement.1st Reading.SUM.doc
m MIAMIBEACH
AGENDA. ITEM ~ ~ F
DATE 7'~y /D
m MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bowerand Members of the City Commission
FROM: Jorge M. Gonzalez, City Manager
DATE: July 14, 2010
FIRST READING
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMIS90N OF THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING ON FIRST READING, A LEASE
AGREEMENT BETWEEN THE CITY AND JON KRUTCHIK, FOR USE OF
APPROXIMATELY 1,802.89 SQUARE FEET OF CITY-OWNED PROPERTY,
LOCATED AT 1701 MERIDIAN AVENUE, UNIT 2 (A/K/A 767 17T" STREET),
MIAMI BEACH, FLORIDA; SAID LEASE HAVING AN INITIALTERM OF FOUR
YEARS AND 364 DAYS, WITH ONE ADDITIONAL FIVE YEAR RENEWAL
TERM, AT THE CITY'S SOLE DISCRETION; WANING BY 5/7THS VOTE, THE
COMPETITIVE BIDDING AND APPRAISAL REQUIREMENTS, AS REQUIRED
BY SECTION 82-39 OF THE MIAMI BEACH CITY CODE; REFERRING THE
LEASE TO THE FINANCE AND CITYWIDE PROJECTS COMMITTEE FOR
DISCUSSION; FURTHER SETTING A PUBLIC HEARING ON SEPTEMBER 15,
2010, 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
On October 17, 2001, the City Commission passed Resolution No. 2001-24661 authorizing the
purchase of the building at 1701 Meridian Avenue (a.k.a. 777 Building) in orderto address the City's
ongoing need for administrative office space expansion. At the time, the preservation of a retail
environment on the ground floor of the property was considered and it was determined that retention
of the retail space was conducive to maintaining and enhancing the pedestrian character of the
linkage between Lincoln Road Mall and the Civic/Convention Center area.
At the October 21, 2008 meeting of the Finance 8~ Citywide Projects Committee (F8~CPC), and
subsequently at their meeting of March 10, 2009, and following a comprehensive review of the City's
office space use, the Committee agreed with City staff s recommendation that usage of the ground
floor pf 1701 Meridian Avenue Building remain a primary' use for commercial retail space.
Additionally, the Committee recommended that any commercial leases (including renewals and/or
extensions) for use of space at the Building be handled as it is in the private sector and not through
a competitive bid process.
ANALYSIS
On April 30, 2010, Koniver Stern Group, the City's contracted real estate broker, presented the City
Commission Memorandum
Jon Krutchik
July 14, 2010
Page 2 of 6
with the first of several Letters of Intent (LOI) on behalf of Jon Krutchik, a potential Massage Envy
Spa franchisee, who expressed an interest in the ground floor retail space located at 1701 Meridian
Avenue, Unit 2 (a/k/a 76717th Street), formerly occupied by Permit Doctorwhich is currently vacant
and available. Koniver 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. The average PSF rate for ground floor retail in the Building is $42.00. The prospective tenant
has offered to pay $40.00 PSF, which the Administration and the City's Broker are recommending
due to the fact that the prospective tenant will be undertaking significant renovations to upgrade the
current condition of the retail space. The proposed tenant improvement rent credit is less than the
cost of the build-out which the proposed tenant will be ultimately responsible to perform in order to
comply with its master franchisor agreement. While preliminary estimates of the franchisee's
requirements for start-up costs are $296,000, the Administration recommends that a one year rent
abatement credit ($72,115.60) be granted. The minimum projected hard construction costs are
$81,000. The subject lease is contingent on the proposed tenant securing and producing a fully
executed franchise agreement with Massage Envy. While the first reading identifies the tenant as an
individual, it is anticipated that prior to second and final reading of the lease, the tenant will be a
corporate entity.
The Administration proceeded to negotiate a proposed lease agreement for City Commission
approval. A summary of the proposed lease terms are as follows:
TENANT: Jon Krutchik (on first reading)
DEMISED PREMISES: 1,802.89 SF on the ground floor of the 777 Building, located at 1701
Meridian Avenue, Unit 2 (a/k/a 767 17th Street).
TERM: Initial term of four (4) years and 364 days, with one (1) additional five (5) year
renewal option, at the City's sole discretion.
LEASE COMMENCEMENT DATE: October 2, 2010.
RENT COMMENCEMENT DATE: October 1, 2011.
RENT: $40.00 PSF; $72,115.60 annually;
BASE RENT: $49,763.08 annually, payable in monthly installments of
$4,146.92. Base Rent shall be increased annually, commencing on the third
anniversary of the Commencement Date of the Lease and on each
anniversary Commencement Date thereafter, in increments of three (3%)
percent per year.
ADDITIONAL RENT: $22,352.52 annually, payable in monthly installments
of $1,862.71. 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 four (4) parking spaces. Rates for said spaces are subject to change,
and are currently $70 per month plus applicable sales tax.
SECURITY DEPOSIT: Prior to the execution of the Lease, Tenant will furnish the City with a
Security Deposit in the sum of $18,028.89 (equal to three months Rent and
Commission Memorandum
Jon Krutchik
July 14, 2010
Page 3 of 6
Additional Rent costs).
USES: The Demised Premises shall be used by the Tenant solely for the purposes
of operating a massage therapy clinic. The Demised Premises shall be open
a minimum of five days a week QVlonday-Friday) from 10:OOAM to 5:OOPM.
IMPROVEMENTS: Tenant agrees to make certain improvement to the Demised Premises in the
minimum amount of $81,000.00 (an amount greaterthan one year's Rent) in
exchange for a one year credit against Rent.
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: 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. Tenant's property taxes payments are included within
Additional Rent costs.
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, furnishings and HVAC system.
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 renewal option periods, requires the following:
1) a public bidding process;
2) Planning Department analysis (see attached Exhibit A);
3) an independent appraisal to determine the value of the leasehold interest
4) two (2) readings of the proposed lease; and
Commission Memorandum
Jon Krutchik
July 14, 2010
Page 4 of 6
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 seNed by waiving such conditions.
The proposed lease terms are within the range of comparable spaces in the area, and reflect the
current economic reality. Tenant's use is consistent with prior uses on the ground floor of the
Building and the surrounding commercial area. Given the economic environment that has produced
a high inventory of vacant retail space in the 33139 zip code, the Administration recommends that a
lease agreement with Jon Krutchik, for use of the ground floor commercial retail space with the
proposed terms, as delineated herein, be approved on first reading. Additionally, the Administration
recommends that the City Commission waive by 5/7ths vote, the competitive bidding and appraisal
requirements, as required by Section 82-39 of the Miami Beach City Code, refer the Lease
Agreement to the next available F&CPC meeting for discussion prior to second reading, and set a
public hearing on September 15, 2010, for the second reading (and final approval) of the Lease
Agreement.
JMG/HMF/AP/RR
T:WGENDA~2010Uu1y 14U2egularU(rutchik Lease Agreement.lst Reading.MEM.doc
Commission Memorandum
Jon Krutchik
Ju-y 14, 2010
Page 5 of 6
EXHIBIT A
~ MIAMI BEACH
.PLANNING DEPARTMENT
INTEROFFICE MEMORANDUM
To: Anna Parekh, Real Estate, Housing & Comm. Development, Director
FROM: Richard G. Lorber, Acting Planning Director ~ ~~ ~ ~GL
DATE: July 14, 2010
SUSPECT: Analysis of Proposed Lease Agreement for Jon Krutchik.
1a1 Floor, 1701 Meridian Avenue, Unit 2 (a.k.a. 767 17th Street)
Pursuant to your request, this memorandum will serve as a planning analysis of the
proposed lease agreement between the City and Jon Krutchik (Tenant), for the use of
approximately 1,802.89 square feet of retail space on the 18t floor of the City-owned
building located at 1701 Meridian Avenue, Unit 2 (a.k.a. 767 17th Street), said lease
agreement for an initial term of four (4) years and 364 days, with one (1) additional five
(5) year renewal option, at the City's sole discretion.
' i
Section 82-38 of the Code of the City of Miami Beach. requires that any proposed sale or
lease of City-owned land be analyzed from a .planning perspective so that the City
Commission and the public are fully apprised of all conditions relating to the proposed
sale or lease. The following is an analysis of the criteria delineated in ,the Code:
1. Whether • or not the proposed use is in keeping with city goats and
objectives and conforms to the city-comprehensive plan.
Consistent -The property is located within the CD-3 high intensity commercial
future land use category, and surrounded generally by the CD-3 high intensity
commercial future land use category. The proposed use is for retail space for massage
therapy clinic. The lease agreement between the City and the proposed tenant is
consistent with the future land use category description contained in the Comprehensive
Plan.
~I
2. The impact on adjacent property, including the potential positive or
negative impacts such as diminution of open space, increased t~afftc, noise level
or enhanced property values, Improved development patterns and provision of
necessary services. Based on the proposed use of the property, the city shall
determine the potential Impact of the project on city utilities and other
infrastructure needs and the magnitude of costs associated with needed
infrastructure improvements. Should it become apparent that further evaluation
of traffic impact is needed, the proponent shall be responsible for obtaining a
traffic impact analysis from a reputable traffic engineer.
Consistent -The property subject to the lease is in the existing 1701 Meridian
Avenue building, and previously was used as retail space. There would be no
diminution of open space as no new construction is being proposed. No additional utility
or infrastructure is expected to be necessary.
Commission Memorandum
Jon Krutchik
July 14, 2010
Page 6 of 6
Proposed Lease -Jon Krutchik.
1 sr Floor, 1701 Meridian Avenue, Unit 2
July 14, 2010
Page 2
3. A determination as to whether or not the proposed use is in keeping with a
public purpose and community needs, such as expanding the city's revenue base,
creating jobs, creating a significant revenue stream, and improving the
community's overall quality of life.
Consistent -The proposal will accrue approximately $72,115.60 per year in rent,
plus operating expenses to the City, and there is a potential to create additional jobs.
The revenue stream generated will also help defray the cost of maintenance needs of
the Building.
4. Determination as to whether or not the development is in keeping with the
surrounding neighborhood, will block views or create environmental intrusions,
and evaluation of the design and aesthetic considerations of the project.
Consistent - The surrounding neighborhood consists of the 17~' Street
commercial corridor and the City of Miami Beach City Hail. This massage therapy clinic
on the 1gt floor of the building will not be out of character with the surrounding uses.
View and environmental considerations are not applicable.
6. The Impact on adjacent properties, whether or not ther® Is adequate
parking, street and infrastructure needs.
Consistent -The previous use on this property was also retail space, therefore,
there should be no negative impact on adjacent properties. As this use was formerly a
retail space, and is adjacent to a parking garage, there are no issues vvith respect to
required parking. No further infrastructure needs are anticipated.
I
6. A determination as to whether or not alternatives are available for the
proposed disposition, including assembly of adjacent properties, and whether the
project could be accomplished under a private ownership assembly.
Not applicable -This is a City-owned property, of which this proposed use is a
small portion of the available space. No assembly of land is necessary, nor would such
be under private ownership. .
i
7. Within the constraints of public objectives, the department should examine
financial issues such as job generation, providing housing opportunities, and the
return to the city for its disposition of property.
i
The proposed lease agreement will help to defray the cost of maintenance of the
building. No housing opportunities will be created. I,
8. Such other issues as the Planning Department may deem appropriate in
analysis of the proposed disposition.
Not applicable -The Planning Department has no other isstaes it-deems
appropriate to analyze for this proposal. i
RGUMAB
F:\PLAN\$ALL\GEN_CORR\I NTEROFFUCrutchik.doc
LEASE AGREEMENT
THIS LEASE AGREEMENT, made this 15th day of September, 2010, by and
between the CITY OF MIAMI BEACH, a Florida municipal corporation, (hereinafter referred
to as "City" or "Landlord"), and JON KRUTCHIK, a married man, (hereinafter referred to as
"Tenant"). ,~
1. Demised Premises.
The City, in consideration of the rentals hereinaft r e ed to be paid and of the
covenants, conditions and agreements to be k pt n ormed by the Tenant,
hereby leases, lets and demises to the Tena Tenan a Eby leases and hires
from the City, those certain premises re after referre o s the "Demised
Premises" and more fully described as II s:
1,802.89 square feet of City-ow rope. ( "Building"),ated
at 1701 Meridian Avenue, Unit { 7 17th Street), Miami
Beach, Florida, 3313 d as mores ec' cally delineated in "Exhibit
1 ", attached hereto a orated h et
~~. \ ~.
2. Term. ~,
2.1 Tenant al a 'tied to ~ d to h e Demised Premises for an
initial of fou ( years rt 364 days, commencing on the 2"d day of
Oc , 2010 (th 4" ommen ¢ ent Date"), and ending on the 30th day of
Sept r, 201 .; F _ urpos f this Lease Agreement, and including,
without ' f , }~ ° ctr ~ rein, a "contract year"~shall be defined as
.: rtai a ~' d comme ~~ n the 1 St day of October,i and ending on the
a f S t ber.
2.2 Provided a ant i 'n- ood standing and free from default(s) under Section
18 hereof, upo written notice from Tenant, which notice shall be
_~ ubmitted t t a City Manager no earlier than one hundred twenty (120)
~! s, but i a ~ case no later than sixty (60) days prior to the expiration of
t ~ 'tia a ,this Lease may be extended for one (1)iadditional five (5)
yea re a ', I term. Any extension, if approved, shall be memorialized in
writing d signed by the parties hereto (with the City hereby designating the
City Manager as the individual authorized to execute such extensions on its
behalf).
In the event that the City Manager determines, in his sole discretion, not to
extend or renew this Lease Agreement (upon expiration of the initial term or
any renewal term), the City Manager shall notify Tenant of same in writing,
which notice shall be provided to Tenant within fifteen (15) business days of
the City Manager's receipt of Tenant's written notice.
1
I
3. Rent.
3.1 Base Rent: i
Tenant's payment of Rent, as defined in this Section 3, shall commence on
October 1, 2011 (the "Rent Commencement Date") and,~thereafter, on each
first day of subsequent months. i
~I
3.1.1 Throughout the Term herein, the Base Renfi for the Demised
Premises shall be Forty Nine Thousand Se n Hundred Sixty Three
Dollars and 08/100 ($49,763.08) per a ,payable in monthly
installments of Four Thousand One n ed Forty Six Dollars and
92/100 ($4,146.92). n
3.1.2 The Base Rent amount pu n`f to this. tion 3.1 shall be
increased annually, comm, c g on the thir a iversary of the
Commencement Date f e Lease and c anniversary
Commencement Date t er after, in in ments of,th %) percent
per year. i~~j
Y ~
3.2 Additional Rent:
In addition to the Ba s set fo ' 1 • Section 3.1~, Tenant shall also
pay the following Addi provi elow:
e.
3.2.1 O e ,a#n Ex ens ~ ~ ~~~~ ~~
t the T ein, eth perating Expenses for the
ised a ises s ll'y a Seven Thousand Two Hundred Eleven
ollars an M 6/100 °~ , 11.56) per year, payable in monthly
in allure 'x Hun r Dollars and 96/100, ($600.96), for its
p p ~ rt re rating Expenses" which are defined as
,~~'"~~ foll s: ~
rati `' enses" shall mean the following costs and expenses
inc r din o . rating, repairing, and maintaining the Common
Faci '#i (ash reinafter defined) and shall include, without limitation,
Ovate ~ rvice to the Building, sewer service to the Building, trash
rem a from the Building, costs incurred for gardening and
la S ping, repairing and maintaining elevator(s), painting, janitorial
e 'ces (except for areas within the Demised Premises), lighting,
aning, striping, policing, removing garbage and other refuse and
trash, removing ice and snow, repairing and maintaining sprinkler
systems, water pipes, air-conditioning systems, temperature control
systems, and security systems, fire alarm repair and maintenance and
other equipment in the common areas and the exterior and structural
portions of the Building, paving and repairing, patching and
maintaining the parking areas and walkways, and 'cleaning adjacent
areas, management fees and the City's employment expenses to
employees furnishing and rendering any services to the common
areas, together with an additional administration', charge equal to
fifteen percent (15%) of all other expenses included in the annual
2
common area expenses, provided by the City for the common or joint
use and/or benefit of the occupants of the Building, their employees,
agents, servants, customers and other invitees. '
"Common Facilities" shall .mean all Building areas, spaces,
equipment, as well as certain services, available for use by or for the
benefit of Tenant and/or its employees, agents, servants, volunteers,
customers, guests and/or invitees.
Tenant agrees and understands that the $ incurred for Operating
Expenses may increase or decrease d, such, Tenant's pro-rata
share of Operating Expenses shall i r s or decrease accordingly.
3.2.2 Property Taxes:
The Property Tax Payment at a payable by r~'_ h t, in accordance
with Section 11 herein. T e 09 Property Tax P nt is Thirteen
Thousand Five Hundr -' hteen Do rs and 36/1 13,518.36),
payable in monthly inst nts o O Thousand a Hundred
Twenty Six Dollars and 53 1,. ' 6.53). '
3.2.3 Insurance:
The Additional ~ tt _ o inclu ~ Want's pro-rata share toward
estimated insura ~ cost " c d to i u the whole of the Building,
pay ~ monthl a tal e e undyed ,Thirty Five Dollars
a 0 135.2 . , h' insura coverage is in addition to the
r~ ranee q fired pu ~ nt to Section 10, which shall be obtained at
enant's so xpense ' responsibility. '
~~.. ~aa
3.3 Sales e ~ ~ ~~~~,,~. ~I
Co rren wit # the paym ~t..,df the Base Rent and. Additional Rent as
pro ' e ere Want shall also pay any and all sums for all applicable
tax(es), `rt din out limitation, sales and use taxes and Property Taxes,
imposed, 'ed o essed against the Demised Premises, or any other
`` charge or p ~ ent re uired by any governmental authority', having jurisdiction
ere over, v n though the taxing statute or ordinance may purport to
ose su t x against the City. i
3.4 En .,. m t. i
Tenan grees to pay the Base Rent, Additional Rent, and any other
amounts as may be due and payable by Tenant under this~Agreement, at the
time and in the manner provided herein, and should said rents and/or other
additional amounts due herein provided, at any time remain due and unpaid
for a period of fifteen (15) days after the same shall become due, the City
may exercise any or all options available to it hereunder, which options may
be exercised concurrently or separately, or the City may~lpursue any other
remedies enforced by law.
4. Location for Payments. ~
All rents or other payments due hereunder shall be paid to the City at the following
3
address: !
City of Miami Beach
Revenue Manager
1700 Convention Center Drive, 3rd Floor '~
Miami Beach, Florida 33139 ~,
or at such other address as the City may, from time to time, designate in writing.
5. Parkin
Tenant may request, from the City's Parking Depart a ,the use of no more than
four (4) parking spaces, if available, within the Mu c ~I' rking Garage. Rates for
said spaces are subject to change, and are cur rn Se +~ ($70.00) Dollars per
~,
month, plus applicable sales and use tax p _, ace.
6. Security Deposit /Guaranty. i "~
6.1 Upon execution of this Agreement T a.• shat sh the City wi a Security
Deposit, in the amount of Eighteen Tho my Eight Dollars and 89/100
($18,028.89). Said Security osit shall se ~ e t` secure Tenant's performance in
accordance with the provis ~ o is Agree e . In the event Tenant fails to
perform in accordance with o ' ' ns, th -' may retain said Security
Deposit, as well as pursue any all er al re ~ 'es provided herein, or as
may be provided licable
The parties r ~ and ac~~~ wledg . 6tb t the foregoing condition~is intended to be a
condition _ quent to a City's a `r val of this Agreement. Accordingly, in the
event that t doe o isfy th ~ restated, then the City Manager or his
designee ma „~ ith er demand or notice, terminate this
A eme itho be' g prejudic o any remedies which may be available to
~ ~~ or br ~tt f co t.
6.2 on execution f is t' ment, Tenant shall execute and deliver to City the
u nty, in the f attac d as Exhibit 6.2 hereto.
7. Use `~" d ossess' n f Demised Premises.
7.1 The d Premises shall be used by the Tenant solely for the purpose(s)
of ope ing a massage therapy clinic. Said Premises shall be open for
operation a minimum of five (5) days a week, with minimum hours of
operation being as follows:
Monday -Friday: _:00 AM to _:00 PM
Saturday _:00 AM to _:00 PM
Sunday _:00 AM to _:00 PM
i
Tenant shall not otherwise modify the days or hours of operation without the
prior written approval of the City Manager. Nothing herein contained shall be
construed to authorize hours contrary to the laws governing such operations.
4
i
7.2 It is understood and agreed that the Demised Premises shall be used by the
Tenant during the Term of this Agreement only for the above
purpose(s)/use(s), and for no other purpose(s) and/or use(s) whatsoever.
Tenant will not make or permit any use of the Demised Premises that,
directly or indirectly, is forbidden bylaw, ordinance or government regulation,
or that may be dangerous to life, limb or property. Tenant may not commit
(nor permit) waste on the Demised Premises; nor permit the use of the
Demised Premises for any illegal purposes; nor commit a nuisance on the
Demised Premises. In the event that the Tenant us the'Demised Premises
(or otherwise allows the Demised Premises to u d)Ifor any purpose(s)
not expressly permitted herein, or permits and r ows any prohibited use(s)
as provided herein, then the City may d a 's Ag~'reement in default
pursuant to Section 18 or, without noti a en `t, strain such improper
use by injunction or other legal actin ~ ~
8. Improvements.
8.1
8.2
8.3
Tenant accepts the Demised ' es i , ''` present "ASS` condition
and may construct or cause to b ed, such interior and exterior
improvements and Hance tot ~ mised Premises, as reasonably
necessary for it to c rt ' permitte u (s), as set ;forth in Section 7;
provided, however, th t n fors h ;' provem'ents shall be first
submitted to the City Ma a er fo is r wn onsent, which consent, if
granted at II be at h Ci §' e ' s e and absolute discretion.
Addition all ap mprove nts shall be made at Tenant's
sole se an a ponsib ' All permanent (fixed) improvements to the
De i Premise s all rem `n he property of the City upon termination
and/ a iratio of gree t. Upon termination ahd/or expiration of
this Agr , na and non-permanent trade fixtures may
be ove ay a Tenan he Demised Premises, provided that they
ca ~ d } moved without damage to the Demised Premises. Tenant
will pe no to attach to the Demised Premises arising from,
connecte ith, r elated to the design and construction of any
improveme t _ More er, such construction shall be accomplished through
a e use of li sed, reputable contractors who are acceptable to the City.
and _ l ermits and or licenses required for the installation of
i r e n shall be the sole cost and responsibility ofl Tenant.
i
Notwit anding Subsection 8.1, upon termination and/or expiration of this
Agreement, and at City's sole option and discretion, any or all alterations or
additions made by Tenant to or in the Demised Premises shall, upon written
demand by the City Manager, be promptly removed by Tenant, at its
expense and responsibility, and Tenant further hereby agrees, in such event,
to restore the Demised Premises to their original condition prior to the
Commencement Date of this Agreement.
The above requirements for submission of plans and the use of specific
contractors shall not apply to improvements (which term, for purposes of this
Subsection 8.3 only, shall also include improvements as necessary for
5
8.4
Tenant's maintenance and repair of the Demised Premises) which do not
exceed Five Hundred ($500.00) Dollars, provided that the work is not
structural, and provided that it is permitted by applicable law.
Tenant Improvements.
Tenant agrees to make certain improvements (Tenant Improvements) to the
Demised Premises (valued by the parties at approximately Eight One
Thousand Dollars and 00/100 ($81,000.00), as delineated in "Exhibit 8.4",
attached hereto and incorporated herein (the Te t Improvements). The
Tenant Improvements shall be made in acc ce (with the following
timeline: ~
• Tenant shall obtain a building ~V" "t no' than ninety (90) days
from the Commencement a of this A ' ent;
• Tenant shall comme ~ king the Tenant Imp v ents no later
than forty five (45) d rom the d the building "e it is issued
(the "Building Permit t " ; an
i
• Tenant Im o ; ents shat ~ mpleted, and Tenant shall obtain
final appro City's B ' d Department for said Tenant
Improvemen o e none u .red eighty (180) days from
the Building P r it Da
9.
9.1
9.2
Failure the ti~ and compt"ete the Ten
withi t time a od sp i d shall constitute an
ant Improvements
event of default
The an a and/or his authorized representatives, shall have the right
to ente p th re ised Premises at all reasonable times for the purpose
of inspec game, venting waste; making such repairs as the City may
consider n ssary; and for the purpose of preventing fire, theft or
ndalism. i City agrees that, whenever reasonably possible, it shall use
e onabl ~ . rts to provide notice (whether written or verbal), unless the
n o nt the Demised Premises is an emergency, as deemed by the
City ' -~ er, in his sole discretion, which if not immediately addressed
could c se property damage, loss of life or limb, or othe ~ injury to persons.
Nothing herein shall imply any duty on the part of the City to do any work that
under any provisions of this Agreement the Tenant may be required to
perform, and the performance thereof by the City shall not constitute a
waiver of the Tenant's default. ~
If the Tenant shall not be ersonall resent too en an I ermit en
P Y p p p try into
the Demised Premises at any time, for any reason, and any entry thereon
shall be necessary or permissible, the City Manager, and%or his authorized
representatives, may enter the Demised Premises by master key, or may
6
forcibly enter the Demised Premises without renderiri,g the City or such
agents liable therefore.
9.3 Tenant shall furnish the City with duplicate keys to all locks including exterior
and interior doors prior to (but no later than by) the Commencement Date of
this Agreement. Tenant shall not change the locks to the Demised Premises
without the prior written consent of the City Manager, and in the event such
consent is given, Tenant shall furnish the City with duplicate keys to said
locks in advance of their installation. ,~
10. Tenant's Insurance.
10.1 Tenant shall, at its sole expense and res n ili ply with all insurance
requirements of the City. It is agree a parti ' t Tenant shall not
occupy the Demised Premises ti proof of the o wing insurance
coverages have been reviewed n pproved by the Ci isk Manager:
10.1.1 Comprehensive Genera i ility, ' minimum a nt of One
Million ($1,000,000) Dollars~(s___ ' o adjustment for inflation) per
occurrence for ily injury an r erty damage. The City of Miami
Beach must b as an ad ' icy al insured on this policy.
10.1.2 Workers Comp tion rr mp Liability coverage in
acc _ e with F a t> r it ents.
10.1.3 ~ I isk pr "' an 9 `~ ualty insurance, written at a minimum of
ghty (80% rcent o e lacement cost value and with replacement
t end - e t cove 'rt all leasehold improvements installed in
t u,` a is +`~mr . or on behalf of Tenant and including
wit itation a f;..T Want's personal property in the Demised
emi s 'ncluding, without limitation, inventory, trade fixtures, floor
v ing ~ niture, and other property removable by Tenant under
th ~ visio this Agreement).
10.2 roof of the ~ overages must be provided by submitting original certificates
' suranc the City's Risk Manager and Asset Manager respectively. All
p ie s s rovide thirty (30) days written notice of cancellation to both the
City ~~ is anager and Asset Manager (to be submitted to the addresses
set fo in Section 27 hereof). All insurance policies shall be issued by
companies authorized to do business under the laws of the State of Florida
and must have a rating of B+:VI or better perA.M. Best's Key Rating Guide,
latest edition, and certificates are subject to the approval: of the City's Risk
Manager.
11. Property Taxes and Assessments.
For the purposes of this- Section and other provisions of this Agreement:
11.1 The term "Property Taxes" shall mean (i) real estate taxes, assessments,
and special assessments of any kind which may be imposed upon the
7
Demised Premises, and (ii) any expenses incurred by the City in obtaining a
reduction of any such taxes or assessments.
11.2 The term "Property Tax Year" shall mean the period of twelve (12) calendar
months, beginning on January 1St of each year.
11.3 Tenant shall pay, as Additional Rent pursuant to Section 3.2, for such
Property Tax Year an amount ("Property Tax Payment") equal to Tenant's
pro-rata share of Property Taxes (if any) for such roperty Tax Year; said
pro-rata share to be determined by the City b se upon the ratio of the
Demised Premises to the tax lot. If a Prop_.rSy ax Year ends after the
expiration or termination of the term oft ' r ment, the Property Tax
Payment therefore shall be prorated to ,. sp ~` o that portion of such
Property Tax Year occurring within th of this A e ent. The Property
Tax Payment shall be payable by T n° immediately . receipt of notice
from the City. A copy of the tax ' ~s r other evidence o u taxes issued
by the taxing authorities, toget er ith the Ci computatio o e Property
Tax Payment, will be made avai to Te n nce received the taxing
authorities, if requested by Tenan . hall pay any difference in the
amount between the ~ ated~prope t es and the actual property taxes
to the City immediat „~+\ \eceipt o _ est for said payment from the
City.
12.
Tenant shall n ae`F' ht to ~ r suble~~t#.r~Demised Premises, in whole
'
or in part, w a t the pn r ritten ent of the City Manager, which consent, if
granted at a~1 hall be at th City n ger's sole and absolute discretion. Such
written cons 's not m of righ d the City is not obligated to give such
consent. If gra "" pr ~ he making of any assignment or sublease
wi ot~r~ use arrom any o ' ~ ligations under this Agreement.
13. / {f5eration, M~ttt~,nan~e brad Reoair.
13.1 Tenant sha ~ solel~'responsible for the operation, maintenance and repair
g f the De ~ d Premises. Tenant shall, at its sole expense and
onsibili maintain the Demised Premises, and all fixtures and
a e ~ s therein, and shall make all repairs thereto, as and when
nee ' r t" reserve them in good working order and condition. Tenant shall
be res sible for all interior walls and the interior and exterior of all windows
and doors, as well as immediate replacement of any and all plate glass or
other glass in the Demised Premises which may become broken, using glass
of the same or better quality.
The City shall be responsible for the maintenance of the roof, the exterior of
the Building, the structural electrical and plumbing (other than plumbing
surrounding any sink(s) and/or toilet(s), including such sink(s) and toilet(s)
fixture(s), within the Demised Premises), the common areas and the chilled
water supply system. The City shall maintain and/or repair those items that it
is responsible for, so as to keep same in proper working condition.
8
If the City provides a separate air-conditioning unit for the Demised
Premises, Tenant agrees and understands that Tenant shall be solely
responsible for the maintenance, repair and replacement of the
heating/ventilation/air-conditioning (HVAC) equipment servicing the Demised
Premises, at Tenant's sole expense.
Tenant further agrees and understands that, if the City provides a separate
HVAC unit for the Demised Premises, the City, at its sole discretion, may
require that Tenant obtain, at any time during the erm of this Agreement,
and continuously maintain in good standing, at T a s expense, throughout
the Term of this Agreement, a maintenance a .: r air contract, approved by
the City, with a service company previous) a r ed in writing by the City,
providing for the preventative maintenan d re ~° i .fall HVAC equipment
servicing the Demised Premises. In vent that ~ ity notifies Tenant
that it will require Tenant to co ~ for said mai a nce and repair
services, Tenant shall provide t e ity, in writing, withi (10) business
days, the name(s) and teleph a umber(s)~service com ~ , ies) for the
City's review and approval. ,,a t sh r p vide a copy a current,
enforceable and fully executed m 'rt n and repair contract, no later
than ten (10) busines a s after rec ' t the City's approval of the service
company, as proof o 'etQa complia ith this provision.
13.2 All damage or injury of n kin Derr1>;~,~e Premises, and including
without lim' its fixtur ~"`, la n s, and equipment (if any),
or to th ures, s appurt ces, and equipment, if any,
except age c s d by th oss negligence and/or willful misconduct of
the i ,shall be th sole ' ii ation of Tenant, and shall be repaired,
resto r rep) _ mptly y Tenant, at its sole expense and to the
satisfac ` e
~. r
13.3 A h fo repairs, restorations and replacements shall be in quality
and cl s qua o better than the original work or installations and shall
a be done i q od a orkmanlike manner.
13.4 Tenant fa Is~ o make such repairs or restorations or replacements, the
e may ade by the City, at the expense of Tenant, and all sums
s an ~ enses incurred by the City shall be collectable by the City and
sha b id by Tenant within three (3) days after submittal of a bill or
statem t therefore.
13.5 It shall be Tenant's sole obligation and responsibility to insure that any
renovations, repairs and/or improvements made by Tenant to the Demised
Premises comply with all applicable building codes and life safety codes of
governmental authorities having jurisdiction.
13.6 Tenant Responsibilities for Utilities (not included within Operating Expenses)
Tenant is solely responsible for, and shall promptly pay when due all charges
for electricity, gas, cable, telephone, Internet, janitorial garage service and
any other utility service provided to the Demised Premises, including, without
9
limitation, all hook-up fees and impact fees, NOT included as an Operating
Expense (pursuant to Subsection 3.2.1).
In addition to other rights and remedies hereinafter reserved to the City, upon
the failure of Tenant to pay for such utility services (as contemplated in this
Subsection 13.6) when due, the City may elect, at its sole discretion, to pay
same, whereby Tenant agrees to promptly reimburse the City upon demand.
In no event, however, shall the City be liable, wh er to Tenant or to third
parties, for an interruption or failure in the suppl y utilities or services to
the Demised Premises.
13.7 TENANT HEREBY ACKNOWLEDGE~E N ~~~ REES THAT THE
DEMISED PREMISES ARE BEING~,S DINT t ~ RESENT "AS IS"
CONDITION.
14. Governmental Regulations.
Tenant covenants and agrees to fulfil n co y ith all statutes, rdinances,
rules, orders, regulations, and requireme s and all governmental bodies,
including but not limited ederal, St e, Miami-Dade County, and City
governments, and any and l t departm and bureaus applicable to the
Demised Premises, and sha s with n fulfill all rules, orders, and
regulations for the prevention o ,all Te _ is o xpense and responsibility.
Tenant shall pay expens `s, la' s i ~ a ies, and damages that may
be imposed be ,~~ h failure a ant to c ly with this Section, and shall
indemnify a Id har t s the from all liability arising from each non-
complianc
15. Liens.
T~rf~rtt ran of p mi any mechatYi~! laborers, or materialman's liens to stand
g st th a 'se r ises or improvements for any labor or materials to Tenant
claimed to v bee f fished to Tenant's agents, contractors, orsub-tenants,
i onnection wi ork o character performed or claimed to have performed
id Premises, o impr ements by or at the direction or sufferance of the
Te rt ~ provided o ever, Tenant shall have the right to contest the validity or
amou any su t' n or claimed lien. In the event of such contest, Tenant shall
give the r r s able security as may be demanded by the City to insure
payment t rev nd prevent sale, foreclosure, or forfeiture of the Premises or
improvement y reasons of such non-payment. Such security need not exceed one
and one half (1'h) times the amount of such lien or such claim of lien. Such security
shall be posted by Tenant within ten (10) days of written notice from the City, or
Tenant may "bond off' the lien according to statutory procedures. Tenant will
immediately pay any judgment rendered with all proper costs and charges and shall
have such lien released or judgment satisfied at Tenant's own expense.
16. Intentionally Omitted.
10
17. Condemnation.
17.1 If at any time during the Term of this Agreement (including any renewal term
hereunder) all or any part or portion of the Demised Premises is taken,
appropriated, or condemned by reason of Eminent Domain proceedings,
then this Agreement shall be terminated as of the date of such taking, and
shall thereafter be completely null and void, and neither of the parties hereto
shall thereafter have any rights against the other by reason of this
Agreement or anything contained therein, exce that any rent prepaid
beyond the date of such taking shall be prorate o uch date, and Tenant
shall pay any and all rents, additional rents, u ' ' arges, and/or other costs
for which it is liable under the terms of this r m nt, up to the date of such
taking.
17.2 Except as hereunder provided, Te n hall not be en ' # to participate in
the proceeds of any award ma he City in any suc inent Domain
proceeding, excepting, howe r a enant sh have the ri t ~ claim and
recover from the condemnin a: hori b m not from th City, such
compensation as may be separat ~- d or recoverable by Tenant in
Tenant's own right o ount of an n all damage to Tenant's business
by reasons of the co ~d 'on and f o on account of any cost or loss
which Tenant might in~ _ 9 Ten furniture and fixtures.
18. Default.
18.1
At tk,~e qty's option, any of thel~o~owing shall constitute an Event of Default
1 The i~`~ Rent, Addi't=rei~~Rent, or any other amounts as may be due
d p ale by Tenant under this Agreement, or any installment
e of, i ~t paid promptly when and where due, and Tenant shall
no ~ e cu uch failure within five (5) days after receipt of written
\ noti om th City specifying such default;
18.1.2\ The~eyhised Premises shall be deserted, abandoned, or vacated;
18.1.3 ~~nt shall fail to comply with any material term, provision, condition
covenant contained herein other than the payment of rent and shall
not cure such failure within thirty (30) days after the receipt of written
notice from the City specifying any such default; or such longer period
of time acceptable to the City, at its sole discretion;
18.1.4 Receipt of notice of violation from any governmental authority having
jurisdiction dealing with a law, code, regulation, ordinance or the like,
which remains uncured for a period of thirty (30) days from its
issuance, or such longer period of time as may be acceptable and
approved in writing by the City Manager, at his sole discretion;
11
18.1.5 Any petition is filed by or against Tenant under any section or chapter
of the Bankruptcy Act, as amended, which remains pending for more
than sixty (60) days, or any other proceedings now or hereafter
authorized by the laws of the United States or of any state for the
purpose of discharging or extending the time for payment of debts;
19
19.1
18.1.6 Tenant shall become insolvent;
18.1.7 Tenant shall make an assignment for benef~of creditors;
18.1.8 A receiver is appointed for Tenant b a court and shall not be
dissolved within thirty (30) days the a `r; r
18.1.9 The leasehold interest is levie~q nder ex u ' n.
Rights on Default.
Rights on Default: ~ H ~/
In the event of any default by Tena ro 'ded herein, City shall have the
option to do any oft Ilowing, in d' ` n to and not in limitation of, any
other remedy permitt or by thi a .Bement;
19.1.1 Terminate this A men , n 'ch e ~ Tenant shall immediately
surr the Dem P m` to ty, but if Tenant shall fail to
d s may, o furthe ice, and without prejudice to
n "` other r `` dy theµ may have for possession or arrearages in
nt or da a es for b e ch of contract, enter upon. the Demised
'~~ P mises n el or r ve Tenant and its effects in accordance
' ~ xw' Bin or prosecution or any claim for damages
the for. ,and Tena ees to indemnify and hold harmless the City
all nd damage which the City may suffer by reasons of such
eme t urination, whether through inability to re-let the Demised
19. Decl re the entire amount of the Base Rent and Additional Rent
whic ,z uld become due and payable during the remainder of the
to this Agreement to be due and payable immediately, in which
v Tenant agrees to pay the same at once, together with all rents
~, refore due, at the address of the City, as provided in the Notices
section of this Agreement; provided, however, that such payment
shall not constitute a penalty, forfeiture, or liquidated damage, but
shall merely constitute payment in advance of the rents for the
remainder of said term and such payment shall be considered,
construed and taken to be a debt provable in bankruptcy or
receivership.
19.1.3 Enter the Demised Premises as the agent of Tenant, by force if
necessary, without being liable to prosecution or any claim for
damages therefore; remove Tenant's property there from; and re-let
12
the Demised Premises, or portions thereof, for such terms and upon
such conditions which the City deems, in its sole discretion, desirable,
and to receive the rents therefore, and Tenant shall pay the City any
deficiency that may arise by reason of such re-letting, on demand at
any time and from time to time at the office of the City; and for the
purpose of re-letting, the City may (i) make any repairs, changes,
alterations or additions in or to said Demised Premises that may be
necessary or convenient; (ii) pay all costs and expenses therefore
from rents resulting from re-letting; and (iii) Want shall pay the City
any deficiency as aforesaid.
19.1.4 Take possession of any personal p p caned by Tenant on said
Demised Premises and sell the at 'c or private sale, and
apply same to the payment of ue, hol enant liable for the
deficiency, if any. .,
19.1.5 It is expressly agreed nd nderstoo by and be ~ the parties
hereto that any installme s: f rent ~ ing under the ovisions of
this Agreement which shall t a"' when due shall bear interest at
the maximum Irate of i t per annum then prevailing in
Florida from t ~ a when the a was payable by the terms
hereof, until th s s be pa b Tenant. Any failure on the
City's behalf to e f ce t ' 'on s of constitute a waiver of
this 'ion with - pe t to c ruals of past due rent. In
a 'tt` a will b ~ charg Fifty ($50.00) Dollars for any
a ents fitted the due date.
19.1.6 \.f enant ~ efault ~~1~iaking any payment of monies to any
p r u s may be required hereunder, the City
/~''' ma a uch expe ~ ' t the City shall not be obligated to do so.
._
... Wan on the City's paying such expense, shall be obligated to
rt ith i urse the City for the amount thereof. All sums of money
-. pa a by ~ nt to the City hereunder shall be deemed as rent for
use f t e De sed Premises and collectable by the City from Tenant
as re t, nd shall be due from Tenant to the City on the first day of
the o h following the payment of the expense by the City.
19.1.7 ~ h ~ fights of the City under this Agreement shall be cumulative but
t restrictive to those given by law and failure on the part of the City
to exercise promptly any rights given hereunder shall not operate to
waive or to forfeit any of the said rights.
19.2 Default by City:
The failure of the City to perform any of the covenants, conditions and
agreements of this Agreement which are to be performed by the City and the
continuance of such failure for a period of thirty (30) days after notice thereof
in writing from Tenant to the City (which notice shall specify the respects in
which Tenant contends that the City failed to perform any such covenant,
conditions and agreements) shall constitute a default by the City, unless
13
such default is one which cannot be cured within thirty (30) days because of
circumstances beyond the City's control, and the City within such thirty (30)
day period shall have commenced and thereafter shall continue diligently to
prosecute all actions necessary to cure such defaults.
However, in the event the City fails to perform within the initial thirty (30) day
period provided above, and such failure to perform prevents Tenant from
operating its business in a customary manner and causes an undue hardship
for Tenant, then such failure to perform (regardless circumstances beyond
its control) as indicated above, shall constitute de ult by the City.
19.3 Tenant's Rights on Default:
If an event of the City's default shall o `' ,Tea to the fullest extent
permitted by law, shall have the ri t pursue and all remedies
available at law or in equity, in di the right to for and collect
damages, including reasonable ~tt ney fees and cost , t , erminate this
Agreement; provided howev t Tenant pressly ac o .edges and
agrees that any recovery by Ten all b i "' ed to the amo set forth in
Section 32 of this Agreement.
20.
20.1 Tenant shall be liable he all c t and charges, expenses,
reasonable , ney's f a _ ~ ich may be incurred or
sustaine , by re s enan reach of any of the provisions
of thi emen . y sum d a the City under the provisions of this item
sh stitute a e against h interest of the Tenant and the Demised
Prem' ~ a nd a of nt's p rty situated thereon to the same extent
and on e ' ' ras : g quent rent would constitute a lien on said
...pre • es ~ operty.
20. If Tena s all a time be in default hereunder, and if the City shall deem
it necess en an attorney to enforce the City's rights and Tenant's
obligations _ eund ,Tenant will reimburse the City for the reasonable
xpenses inured thereby, including, but not limited to, court costs and
e onable _ rney's fees, whether suit be brought or not and if suit be
b u t, enant shall be liable for expenses incurred at both the trial
an p I e levels.
21. Indemnification Against Claims.
21.1 Tenant shall indemnify and save the City harmless from and against any and
all claims or causes of action (whether groundless or otherwise) by or on
behalf of any person, firm, or corporation, for personal injury or property
damage occurring upon the Demised Premises or upon any other land or
other facility or appurtenance used in connection with the Demised
Premises, occasioned in whole or in part by any of the following:
21.1.1 An act or omission on the part of Tenant, or any employee, agent,
14
contractor, invitee, guest, assignee, sub-tenant or subcontractor of
Tenant;
21.1.2 Any misuse, neglect, or unlawful use of the Demised Premises by
Tenant, or any employee, agent, contractor, invitee, guest, assignee,
sub-tenant or subcontractor of Tenant;
21.1.3 Any breach, violation, or non-performance of any undertaking of
Tenant under this Agreement;
v.
21.1.4 Anything growing out of the use or pancy of the Demised
Premises by Tenant or anyone hold' g iming to hold through or
under this Agreement.
21.2 Tenant agrees to pay all damage ~ e Demised ' es and/or other
facilities used in connection the wi ,caused by Tenan r ny employee,
agent, contractor, guest, or in =" of Tenan
22. Signs and Advertising_
Without the prior written con of the City ger, which consent, if given at all,
shall be at the City Manager e d absolut di retion, Tenant shall not permit
the painting and display of a ' i ues, I ~ e ' g or advertising material of
any kind on or near the Demise emi dditi ;' signage shall comply with
signage standard lished e I with all applicable building
codes, and an tt}er-~~ 'cipal, tate a ederal laws.
23.
The term "C'i
for the time be
a
#u ng, `" sh
d obligation "o h
her agreeme
sale, or the
an eed to car
24.
;~a " as u in the Agreement means only the owner
aq b ' ontaining the Demised Premises, so that
of said lari ~~ building, or in the event of a lease of said
and hereby is entirely freed and relieved of all covenants
tl ereunder, and it shall be deemed and construed without
~e parties, or between the parties and the purchaser at
of th building, that the purchaser or Tenant has assumed
t alt covenants and obligations of the City hereunder.
24.1 If the Derfiised Premises shall be damaged by the elements or other casualty
not due to Tenant's negligence, or by fire, but are not thereby rendered
untenantable, as determined by the City Manager, in his sole discretion, in
whole or in part, and such damage is covered by the City's insurance, if any,
(hereinafter referred to as "such occurrence"), the City, shall, as soon as
possible after such occurrence, utilize the insurance proceeds to cause such
damage to be repaired and the Rent (Base Rent and Additional Rent) shall
not be abated. If by reason of such occurrence, the Demised Premises shall
be rendered untenantable, as determined by the City Manager, in his sole
discretion, only in part, the City shall as soon as possible utilize the insurance
proceeds to cause the damage to be repaired, and the Rent meanwhile shall
15
be abated proportionately as to the portion of the Demised Premises
rendered untenantable; provided however, that the City shall promptly obtain
a good faith estimate of the time required to render the Demised Premises
tenantable and if such time exceeds sixty (60) days, either party shall have
the option of canceling this Agreement.
24.2 If the Demised Premises shall be rendered wholly untenantable by reason of
such occurrence, the City shall have the option, but not the obligation, in its
sole discretion, to utilize the insurance proceeds to use such damage to be
repaired and the Rent meanwhile shall be aba , ' owever, the City shall
have the right, to be exercised by notice in wr' ' elivered to Tenant within
sixty (60) days from and after said occurre ct not to reconstruct the
destroyed Demised Premises, and ins h ve -'s Agreement and the
tenancy hereby created shall cease he date f id occurrence, the
Rent to be adjusted as of such to f the Demise emises shall be
rendered wholly untenantable, T r~ `shall have the right, a b exercised by
notice in writing, delivered to a ity within 'rty (30) day fr and after
said occurrence, to elect tot ate t s greement, th ent to be
adjusted accordingly.
24.3 Notwithstanding any a e- tained i
covered by the City's r en the
repair the damage, butt ity s t ~ 'se
days of the rence gi i ri # ,
repair, d` a nt ma time
Agre , and t e ent sh ~II a adjusted
25.
Tenant shall
Section 24, if the damage is not
~ shall have no obligation to
a - t in writing within thirty (30)
a e and of its decision not to
eafter, elect to terminate this
accordingly.
.x~~Ma~e Demised Premises and shall not be
~sessio a Demised Premises so long as Tenant
this Agreement.
26.
26.1 is mutual) venanted and agreed by and between the parties hereto that
failure f e City to insist upon the strict performance of any of the
c ' 'o enants, terms or provisions of this Agreement, or to exercise
any `" " erein conferred, will not be considered or construed as a waiver
or reli ishment for the future of any such conditions, covenants, terms,
provisions or options but the same shall continue and remain in full force and
effect.
26.2 A waiver of any term expressed herein shall not be implied by any neglect of
the City to declare a forfeiture on account of the violation of such term if such
violation by continued or; repeated subsequently and any express waiver
shall not affect any term other than the one specified in such waiver and that
one only for the time and in the manner specifically stated.
16
26.3 The receipt of any sum paid by Tenant to the City after breach of any
condition, covenant, term or provision herein contained shall not be deemed
a waiver of such breach, but shall be taken, considered and construed as
payment for use and occupation, and not as Rent, unless such breach be
expressly waived in writing by the City.
27. Notices.
The addresses for all notices required under this Agreement shall be as follows, or
at such other address as either party shall be in writing, ratify the other:
LANDLORD:
City ~
City of M
1700 Convenl
Miami Beath
With copy to:
Office of Real
TENANT:
/Director
of Miamil
1700 C}r~vi"o enter Drive
Miami Be lorida 33139
on
33139
With ,,._3 R ' o: Jon Krutchik
7 0 Stone Creek Way
South a .Ranches, Florida 33330
pment
~livered'~d~ receipt requested, or by certified mail with
and shall be effective upon receipt.
28.
greement c n ins a1t%f the agreements between the parties hereto, and it
ma ~ be modifie :~ any manner other than by agreement in writing signed by all
the p heret o their successors in interest. The terms, covenants and
conditio nt ':: herein shall inure to the benefit of and be binding upon the City
and Tena n eir. respective successors and assigns, except as may be
otherwise ex ` ssly provided in this Agreement.
29. Provisions Severable.
If any term or provision of this Agreement or the application thereof to any person or
circumstance shall, to any extent, be invalid or unenforceable, the remainder of this
Agreement, or the application of such term or provision to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be affected
thereby and each term and provision of this Agreement shall be valid and be
enforced to the fullest extent permitted by law.
17
30. Captions.
The captions contained herein are for the convenience and reference only and shall
not be deemed a part of this Agreement or construed as in any manner limiting or
amplifying the terms and provisions of this Agreement to which they relate.
31. Number and Gender.
Whenever used herein, the singular number shall include the plural and the plural
shall include the singular, and the use of one gender shall include all genders.
32. Limitation of Liability.
The City desires to enter into this Agreement only if i _50 oing the City can place a
limit on the City's liability for any cause of actin o~, ey damages due to an
alleged breach by the City of this Agreement, s its b ' for any such breach
never exceeds the sum of Ten Thousand 0,000.00) o rs. Tenant hereby
expresses its willingness to enter into thi 9. ement with T a 's recovery from
the City for any damage action for bre h contract to be lim o a maximum
amount of $10,000.00. Accordingly, d- twithstan g any other r condition
of this Agreement, Tenant hereby agre at th shall not be lia to Tenant
for damage in an amount in excess of $1 pf any action or claim for breach
of contract arising out of th ormance o no -performance of any obligations
imposed upon the City by ment. contained in this Section or
elsewhere in this Agreement ~ intend be a waiver of the limitation
placed upon the City's liability et fo in rida t utes, Section 768.28.
33.
Tenant shall a ~ r befo a last of the Term herein demised, or the sooner
terminatio ~'t reof, peac a ly and ~dxtly leave, surrender and yield upon to the
City the D t d Pr tl togeth ~r with any and all equipment, fixtures,
furnishings, a i , s r p, property, if any, located at or on the
D is mis a d used by ' nt in the maintenance, management or
ion D ed Premises, excluding any trade fixtures or personal
operty, if a hic be removed without material injury to the Demised
mises, free o ' iens," I ' sand encumbrances and rights of others orbroom-
togetherwi I struc ral changes, alterations, additions, and improvements
wh ' ay have be n made upon the Demised Premises, in good order, condition
and 'r, reas n le wear and tear excepted, subject, however, to the
subseq n ro si s of this Section. Any property which pursuant to the provisions
of this Sec ' a emovable by Tenant on or at the Demised Premises upon the
termination o is Agreement and is not so removed may, at the option of the City,
be deemed abandoned by Tenant, and either may be retained by the City as its
property or may be removed and disposed of at the sole cost of the Tenant in such
manner as the City may see fit. If the Demised Premises and personal property, if
any, be not surrendered at the end of the Term as provided in this Section, Tenant
shall make good the City all damages which the City shall suffer by reason thereof,
and shall indemnify and hold harmless the City against all claims made by any
succeeding tenant or purchaser, so far as such delay is occasioned by the failure of
Tenant to surrender the Demised Premises as and when herein required.
18
34. Time is of the Essence.
Time is of the essence in every particular and particularly where the obligation to
pay money is involved.
35. Venue:
This Agreement shall be deemed to have been made and shall be construed and
interpreted in accordance with the laws of the State of Florida. This Agreement shall
be enforceable in Miami-Dade County, Florida, and if legal action is necessary by
either party with respect to the enforcement of any and .the terms or conditions
herein, exclusive venue for the enforcement of sa all lie in Miami-Dade
County, Florida.
CITY AND TENANT HEREBY KNOWINGLY A~T NALLY WAIVE THE
Y tY
37. No Dan Brous ~~`~~ af~ .
Tenant agre to use r ermit i Demised Premises the storage and/or use
of gasolin f el oils, di . ~ I, illumi ' f g oils, oil lamps, combustible powered
electricity pr _ ing g er _ turpe tr e, benzene, naphtha, propane, natural
gas, or other si il` #~ co able materials, or explosives of any kind,
o ~ su anc or. ing prohibi edim the standard policies of fire insurance
anie S e f Florida. Any such substances or materials found within
e Demised $ ises h I be immediately removed.
RIGHT TO TRIAL BY JURY IN ANY ACTIO ROCE ' _ G THAT THE CITY
AND TENANT MAY HEREIN AFTER IN T E AGAINST OTHER WITH
RESPECT TO ANY MATTER ARI OUT OF OR RE D TO THIS
AGREEMENT.
36. Radon is a naturally occurring radioactiv g t ,when it is accumulated in a
building in sufficient quan ' may pres f ealth risks to persons who are
exposed to it over time. Lev ~,.. on that a Federal and State guidelines
have been found in buildings i or `' . itiona ' f ation regarding Radon and
Radon testing may be obtaine 'fr' m o C P It Health Unit.
tt t shall inde n' and lYold the City harmless from any loss, damage, cost, or
exp n of the C ,including, without limitation, reasonable attorney's fees,
incurr ' '` a res : o ,arising from, or connected with the placement by Tenant of
any "ha r u tance" or "petroleum products" on, in or upon the Demised
Premises ~~ terms are defined by applicable Federal and State Statute, or
any environm tal rules and environmental regulations promulgated thereunder.
The provisions of this Section 37 shall survive the termination or earlier expiration of
this Agreement.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
19
IN WITNESS WHEREOF, the parties hereto have caused their names to be signed
and their seals to be affixed, all as of the day and year first above written, indicating their
agreement.
Attest:
Robert Parcher, CITY CLERK
Attest:
CITY OF MIAMI BEACH, FLORIDA
,~
/,- ~,,,
Matti H~r~e`ra Bower, MAYOR
/ ~...., s
j ~ 4'~
,,%,,' ~ 6JON KRUT~~#!K
/~ /}
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~- ~
Signature/Secretary Jon Krutchik
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Print {Vase ', ,`~~ ~~
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~' ,- CORPORATE~SEAt, ~'~
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F:~RHCD~$ALUECON~$ALLW~SSF~'T1777-17th StreetWlassage EnvyUCrutchik Lease Agreement.DRAFT.doc
20
EXHIBIT 1
Demised Premises
P.P.L. POD1
BPCt10G1110C11 ~.
~ UNIT 4
.,~.~
UNIT 3
I~
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UNIT 1
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F
m
;m • r
~ COMMON . r ;. ~•• ~.;. ~ t ; y °
ELEMENTS '' +' - :'R:..
AREA UNiT 1=1,326.78 S(F ^~~~-Z
AREA UNIT Z=1,602.89 S/F o~~
AREA UNIT 3=1,290.59 S/F scuE ctfr
- AREA UNIT 4:1,268.87 S/F
su~verats «o~
C:TALR OF flf1~i10a9MAll.9 1~ 8A4D M OgiGNAL ORAMINfS N0 HrSi MFOIWA710N OBTAW FllOY FEtD 9AtYEY
First Fioor Pian
Prepared by: 1701 MERIDIAN BUILDING CONDOMINIUM
+bi. ~ snd
s /yy.
679-TOGO
Pegs 4 of 9 '
Exhibit "B"
~nlae o/sT/YaOT
21
EXHIBIT 6.2
Lease Guaranty
Lease is herein defined to be that certain Lease Agreement dated September 15.2010, and entered into by
Jon Krutchik, as Tenant, and the City of Miami Beach, as Landlord with respect to certain Demised Premises
located at 1701 Meridian Avenue, Unit 2 (a/k/a 767 17th Street), Miami Beach, Florida, 33139.
In order to induce the Landlord to enter into the Lease, and for the Ten Dollarsd~0.00) in hand paid and other
good and valuable consideration, receipt and sufficiency of which is hereby a wledged, the undersigned,
individually, hereby irrevocably guarantees prompt payment when and as a 'all rents and other monetary
obligations, and the performance of all other obligations, required to, p d or performed by the Tenant
pursuant to the Lease for the entire Term and all extensions and r ~ !5 ereof and agrees to pay and
perform as a primary obliger all liabilities, obligations and duties a nt rs nt to the Lease, including,
without limitation, payment of Rent.
The undersigned expressly agrees that the validity and en rc ility of this Guaran + the obligations and
liability of the Guarantor hereunder shall in no way b er Hated, affected or impa reason of any
modification, indulgence, compromise, settlement, v `ati of terms, r wal ore extensi he Lease and
the undersigned hereby consents to any such modificat n newal a ~" nsion and shall a affected by
any termination of the Lease. Action or suit may be bro ht a' st a undersigned and reduced to final
judgment with or without first concurrently roceeding agar t e tenant under the Lease. This Guaranty
creates, joint and several, personal liabili to,, the undersig r payment and performance as herein
before stated, and the undersigned hereb v~~iv~s renounce..:. a~n c and all exemption rights under or by
virtue of the Laws of any state or the U rtSt~t a,~d furth 'ves all notice, demand, protest,
presentment, notice of demand, notice ofd a It, di~i epee, rotest, y~r ntment and nonpayment. Any
notices or communications to~ a Tenant u d~~ the e s I be erred to constitute notice or
communication to the unde,r~~gn ividually. algid rd~,~ n}~nrithout notice to or consent by the
undersigned, may at any ~neana`Yr~m ime to ti e, er into mo ifications, extensions, amendments or
other covenants respe g1tKe Lease ndl he unde i ed shall not be released thereby, but shall continue to
be fully liable for the y _ ent and perf nce of all "a ,pities, obligations, and duties of Tenant pursuant to
the Lease as so modif-~d, ended o rr} nded. The car and effect of this Guaranty shall not be affected by
the execution of other gu'a~a 'es s urin theme oblr ~ ' ns, liabilities and duties. This Guaranty shall be
cumulative of uch gua n and~e lia ' ' of alt~t guarantors of the Lease shall be joint and several.
The Landl d~;i~s~so~discre ' n s~iall be entitled to release, compromise or settle the obligations, liabilities,
and dins. o any on"e-gr~inQre o ii'i~i guarantors and such action shall not affect the right of Landlord, to
enfo #f~Lease again ' th Tetra d any other guarantors. If any party executing the Guarantee is a
core atia or partnership, a _the un a ned officer or partner hereby represents and warrants that the
Board Q~ ctors of such co q ~ tion o partners of such partnership, have authorized the execution on
its behalf d cknowledge tb~efit and consideration to the undersigned.
The undersign ree top c~asonable attorney's fees, plus expenses incurred by Landlord in the
enforcement of a r7t~it of n rd hereunder or in the defense of any action against Landlord hereunder.
This instrument shall ire' re the benefit of the Landlord under the Lease, its successors and assigns, and
shall bind the undersigne ,and heirs, successors and assigns. If more than one party has executed this
Guaranty, then the liability of all such parties who have signed below shall be joint and several.
This Guaranty is made and entered into this 15th day of September, 2010.
By: By.
Jon Krutchik
SS # SS #
22
EXHIBIT 8.4
Tenant Improvement(s)
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EXHIBIT 8.4
Tenant Improvement(s)
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EXHIBIT 8.4
Tenant Improvement(s)
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25
July 8, 2010
Ms. Hilda M. Fernandez
City of Miami Beach
1700 Convention Center Drive
Miami Beach, FL 33139
Re: 777 17t" Street retail space for Massage Envy
Dear Hilda:
Koniver Stern endorses the City of Miami Beach moving forward with the above referenced
lease. The reasons .are: 1) the tenant must be willing to pay for their required tenant specific
build-out since no cash tenant improvement. allowance is offered; 2) the retail space is B/C
space and currently the general retail market is not robust; 3) to better protect the City we
have outlined a construction deposit guaranty with staff. We are recommending the space to be
leased at $40 per square foot based upon the space size and location. We also recommend a 12
month rent abatement based upon the improvements the tenant will be making for the space.
We have been showing the space since January and have been .negotiating this proposal for
four months. Additionally, the tenant is currently leasing space in Miami Beach.
Based on all these factors, Koniver Stern recommends that the City lease the retail space at 777
17th Street to Massage Envy.
Thank you.
.__.. .
....r-~~
c ,.
~ ,:.
.!---
Lyle B. Stern
1665 Washington Avenue, Penthouse
Miami Beach, Florida 33139
T (305) 532-6100 F (305) 532-6101
www. ko n i ve rste rn g ro u p, co m