2010-27487 Reso2010-27487
RESOLUTION NO. ~'~
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, APPROVING ON SECOND READING (AND
FINAL APPROVAL), FOLLOWING A DULY NOTICED PUBLIC HEARING,
A LEASE AGREEMENT BETWEEN THE CITY AND LEONARDO SALON,
INC.., FOR USE OF APPROXIMATELY 1,326.78 SQUARE FEET OFCITY-
OWNED PROPERTY, LOCATED AT 1701 MERIDIAN AVENUE, UNIT 1
(A/K/A 765 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; '~ AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE THEE LEASE AGREEMENT
~, WHEREAS, on1 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 b;id process; and
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WHEREAS, Leonardo Salon, Inc. has expressed interest in leasing ground floor
retail space in the Building; and
~ WHEREAS, the CCity 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 2, {2010 and ending September 30, 2015, with one additional five (5)
year renewal term, at the City's sole discretion; and
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~ WHEREAS, Section 82-39 of the Miami Beach City Code, governing the sale/lease
of public property, requires a competitive bidding process, a Planning Department analysis,
and; an independent appraisal to determine the value of the leasehold interest, as well as
two'~(2) readings of the proposed lease, with the second (and final) reading followed by an
advertised public hearing to obtain citizen input; and
WHEREAS, on July 14, 2010, pursuant to Resolution No. 2010-27453, the Mayor
and jCity Commission approved the Lease Agreement on first reading; waived by 5/7tns
vote, the competitive bidding and appraisal requirements; and set the public hearing on
September 15, 2010, for second reading and final approval of the Lease Agreement; and
WHEREAS, said public hearing was held on September 15, 2010.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission hereby approve on second reading (and final approval), following a duly
noticed public hearing, a Lease Agreement between the City and Leonardo Salon, Inc., for
use of approximately 1,326.87 square feet. of City-owned property, located at 1701
Meridian Avenue, Unit 1 (a/k/a 765 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; authorizing the Mayor and City Clerk to execute the Lease Agreement.
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PASSED and ADOPTED this 15th day of September, 2010.
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ATTEST:
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Robert Parcher,
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;ITY CLERK atti Herrer Bower, MAYOR
-17th Street\Leonardo Salon\Leonardo Lease Agreement.2nd Reading.RES.doc
:. APPROVED AS TO
:" FORM & LANGUAGE
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COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution approving, on second reading, following a duly noticed public hearing, a lease agreement between the City and
Leonardo Salon, Inc., for use of 1;,326.78 SF ofCity-owned property located at 1701 Meridian Avenue, Unit 1 (a/k/a 76517
Street), for a term of 4 years and 364 days, with one additional five year renewal term.
I(e Intended Outcome Su orted:
Increase resident satisfaction with the level of services and facilities.
Supporting Data (Surveys, Environmental Scan, etc.):
Approximately 40% of retail businesses surveyed, rank Miami Beach as one of the best places to do business and 61 % of
the same group would recommend Miami Beach as a place to do business.
Issue• ':
Should the Ci Commission a 'rove the lease a reement?
Item Summary/Recommendation:
SECOND READING & PUBLIC HEARING
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 Leonardo Salon have negotiated a proposed lease for renovation and use of
ground floor retail space at 765 17th Street that recently became vacant. The terms are as follows:
• Square Footage: 1,326.78 per updated 2007 survey;
• Term: Four years and 364 days, with one additional five year renewal term;
• Rent: $43.00 PSF, $57,051.54 annually;
o Base Rent: $40,600.86 annually, payable monthly @ $3,383.41, with 3% annual increase;
o Additional Rent: $16,450.68 annually, payable monthly @ $1,370.89 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
$'14,262.54 (equal to thre `months of Rent and Additional Rent costs).
The average PSF cost of other ground floor Tenants in the Building is $42.00.
Section 82-39 provides for the waiver of the competitive bidding and appraisal requirements, by 5/7ths vote of the Mayor and
City Commission, upon a finding by~the Mayor and City Commission that the public interest would be served by waiving such
conditions. At the March 10, 2009 meeting of the F&CPC, the Committee determined that it was in the public's best interest
to forgo competitive bidding and staff should proceed in leasing available space in the Building according to market rates and
industry standards. ~,
On July 14, 2010, pursuant to Resolution No. 2010-27453, the Mayor and City Commission approved the lease agreement
on first reading; waived by 5/7chs vote, the competitive bidding and appraisal requirements; and set the public hearing on
September 15, 2010, for second reading and final approval of the lease agreement. Subsequently, on July 29,' 2010, the
F&CPC discussed the proposed lease agreement and recommended its a~~roval.
Adviso Board Recommendation:
Finance &.Citywide Projects Committee, March 10,.2009, and July 29. 2010.
Financial Information:
Source of Funds: Amount Account
n/a 1 n/a ~
Financial Im act Summa
Ci Clerk's Office Le islative Trackin
Anna Parekh, extension 7193
Sian-Offs•
Anna Parekh, Department Director Hilda .Fernandez, Assistant City Manager Jorge M. Gonzalez, City Manager
AP HF ` JMG
T:\AGENDA\2010\September 15\Regular\Leonardo Lease Agreement.2nd Reading.SUM.doc
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AGEai1DA ITEM 1"~ ` U
DATE 9`I S' ~y
m MIAMI
City of Miami Beach, 1700
EACH
Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the ' 'Commission
FROM: Jorge M. Gonzales City Manag
PATE: September 15, 2010 S OND READING & PUBLIC HEARING
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SUBJECT: A RESOLUTION OF THE MAYO D CITY COMM6SION OF THE CITY OF MIAMI BEACH,
FLORIDA, APPROVING ON SECOND READING (AND FINAL APPROVAL), FOLLOWING A
DULY NOTICED PUBLIC HEARING, A LEASE AGREEMENT BETWEEN THE CITY AND
LEONARDO SALON, INC., FOR USE OF APPROXIMATELY 1,326.78 SQUARE FEET OF CITY-
OWNED PROPERTY, LOCATED AT 1701 MERIDIAN AVENUE, UNIT 1 (A/K/A 765 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; AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE THE LEASE
~; AGREEMENT
ADMINISTRATION RECOMMENDATION
Adopt',the Resolution.
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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 order to address the City's ongoing need for
administrative ofi:lce space expansion. At the time, the preservation of a retail environment on the ground
floor of the propertywas considered and it was determined that retention of the retail space was conducive to
maintaining and enhancing t i e pedestrian character of the linkage between Lincoln Road Mall and the
Civic/C.onvenfion Center area.
At the October 21, 2008 meeting of the Finance & Citywide Projects Committee (F&CPC), and subsequently
at their meeting of March 10, 2009, and following a comprehensive review of the City's office space use, the
Committee agreed with City staffs recommendation that usage of the ground floor of 1701 Meridian Avenue
Building remain a primary used 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 June 8, 2010, Koniver Stern Group, the City's contracted real estate broker, presented the City with a
Letter of Intent (LOI) on behalf !of Leonardo Salon, Inc., who expressed an interest in the ground floor retail
space located at 1701, Meridian Avenue, Unit 1 (a/k/a 765 17th Street), formerly occupied by Steve's Hair
Salon which is currently vacant and available. Leonardo Salon is a Miami Beach based beauty salon
established in 2001 and currently operating at 70.1 Lincoln Road, #109. 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. , ~
Commission Memorandum
Leonardo Salon, Inc.
September 15, 2010
Page 2 of 3
The Administration proceeded to negotiate a proposed lease agreement for City Commission approval. A
summary of the proposed lease terms are as follows:
TENANT: Leonardo Salon, Inc., a Florida corporation.
DEMISED PREMISES: 1,326.78 SF on theground floor of the 777 Building, located at 1701 Meridian Avenue,
Unit 1 (a/k/a 765 17 h 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:
RENT COMMENCEMENT DATE:
RENT:
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PARKING:
SECURITY DEPOSIT:
USES:
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IMPROVEMENTS:
INSURANCE:
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October 2, 2010.
The earlier of (i) 60 days from Lease Commence Date or, (ii) the date
Tenant opens for business.
$43.00 PSF; $57,051.54 annually;
BASE TRENT: $40,600.86 annually, payable in monthly installments of $3,383.41.
Base Rent shall be increased annually, on the anniversary of the Commencement
Date of the Lease, in increments of three (3%) percent per year.
ADDITIONAL RENT: $16,450.68 annually, payable in monthly installments of
$1,370.89. Any increase in Operating Expenses and Insurance will result in an
increa Ise to Tenant s proportionate share.
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Tenant may request from the City's Parking Department, the use of no more than
three (3) parking spaces. Rates for said spaces are subject to change, and are
currently $70 per month plus applicable sales tax.
Prior t ~ the execution of the Lease, Tenant will furnish the City with a Security Deposit
in the sum of $14,262.54 (equal to three months Rent and Additional Rent costs).
The Demised Premises shall be used by the Tenant solely for the purposes of
operating a beauty salon, including retail sales of related items. The Demised
Premises shall be open a minimum of five days a week (Tuesday-Saturday) from
10:OOAM to 7:OOPM.
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No significant improvement and/or build-out are anticipated.
Tenant 'Ishall comply with the following insurance requirements throughout the Term:
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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.
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All-Risks property and casualty insurance, written at a minimum of 80 /o of
replacement cost value and with replacement cost endorsement, covering all of
Tenant's personal property in the Demised Premises (including, without limitation,
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Commission Memorandum
Leonardo Salon, Inc.
September 15, 2010
Page 3 of 3
inve ~ tory, 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.
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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.
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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:
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1) a public bidding process;
2) Planning Department analysis;
3) an independent appraisal to determine the value of the leasehold interest
4) two (2) readings of the proposed lease; and
~ 5) a public hearing to obtain citizen input.
the
Section 82-39 further provides for the waiver of the competitive bidding and appraisal requirements, by 5/7
vote of the Mayor and City Commission, upon a finding by the Mayor and City Commission that the public
interest would be served by waiving such conditions.
A Planning Department analysis finds that the use of this area as commercial retail space is consistent with
the land use designation contained in the Comprehensive Plan.
On July 14, 2010, the Mayo ~ and City Commission adopted Resolution No. 2010-27453, approving the
proposed lease agreement on first reading; waived by 5/7tns vote, the competitive bidding and appraisal
requirements; and set a public hearing on September 15, 2010, for second reading (and final approval) of the
lease agreement. Additionally; the City Commission referred the proposed lease agreement to the F&CPC for
discussion. Subsequently, o'n July 29, 2010, the F&CPC discussed the proposed agreement and
recom 'mended that the City Clommission approve the lease. -
The ro osed lease terms are within h
p . p t e range of comparable spaces in the area, and reflect the current
economic reality. Tenant's usie is consistent with prior uses on the ground floor of the Building and the
surrounding commercial area. Based on the aforementioned; the Administration recommends that the Mayor
and City Commission approve ion second and final reading, following a duly noticed public hearing, the lease
agreement between the City and Leonardo Salon, Inc., for use of theground floor commercial retail space
with the proposed terms, as delineated herein.
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July 8, 2010
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RETAIL ~EAI ESTATE & BtAGE
Ms. Hilda M. Fernandez
Gty of Miami Beach
1700 Convention Cent i r Drive ~~
i Miami Beach, fL 33139
Re: 777 17th Street retail space for Leonardo Salon
Dear Hilda:
;Koniver -Stern endorses the .City of Miami, Beach moving forward with the above referenced
please. The reasons are: 1) the tenant is able to move in and .start operating with limited
renovations; 2) the tenant is an established tenant on Miami Beach for 10 years; 3) the retail
'space is. B/C space and (,currently the general retail market is not robust. We arerecommending
.the space to be leased at $43.00 .per square foot based upon .the location- being .an end-cap and
also being smaller in size.
Based on all these factors, Koniver .Stern recommends that. the City lease the .retail space at 777
17~' Street to Leonardo Salon.
Thank you.
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Lyle B. Stern
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1665 Washington Avenue, Penthouse
Miami Beach, Florida 33139
T (305) 532-6100. F (305) 532-6101
www.koniversterngroup.co
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o ; ~ NLIAMI BEACH
~ CITY OF IVIIAMi BEACH
~` NOTICE OF PUBLIC HEAFi1NGS :.
~~ ~ _ -
~ p NOTICE IS HEREBY gNen that second readings and public hearings will be held by the Mayor and City Commission of the City Qf Miami Beach, Florida, in the
Q ~ Commission Chambers, 3rd floor, laity Ha11,1700 CenvenUon Center Drive, Miami Beach, Florida, on Wednesday, September 152010, to consider the following:
I,
~" 10125 a.m.
p ~ ; .Approving On Second Reading, Public Hearing; A Lease Agreement Between The City And David A. Wrubel, CPA,; P.A., For lJse Of Approximately 1,518 Square
N { ! Feet Of City=Owned Property, Located At 1130 Washington Avenue, 5th Floor, Miami Beach, Florida; Said Lease Having An Ihitial Term Of Three Years, With Two
~ ' ' Additional Three Year Renewal Terms, At The City's Sole Discretion.
~ £ I, Inquiries may be directed to the Real t-slate, Housing`& Community Developmem Department (305) 673- 7260.
.10:30 a.m. ,
Approving On Second Rleading, Public Hearing, A Lease Agreement Between fie City And t.eonardo Salon, Inc., Far Use Of
~ I Approximately 1,326.78 Square Feet
Of City-Owned Properly Copied At 1701 Meridian Avenue, Unit 1 (A/IVA 76517th Street), Miaml Bead, Florida; Said Lease Having An Initial Term Of Four Years
N And'364 Days, With One Additional Five Year Renewal Term, At The City's Sole Discretion. '
~ Inquiries may be directed to the Real Estate, Housing & Community Development Department (305) 673- 7260.
10•.35 a;m. I
Approving On Second Reading, Public Hearing, A Lease Agreement Between The City And Jor- Krutchik; For Use Of Appro>omatety 1,802.89 Square Feet Of City-
. Owned PropertX Lopted At 1701 Meridian Avenue, Unit 2 (A/tVA 76717th Street), Miami Beach~Rorida; Said Lease.Having Aq Initial Term Of Faur Years And
3fi4 Days, With One Add' Tonal Five Year Rknewal Term, At The City's Sole Discretion.
' Inquiries may be directed to the Real Eslate, Housing & Community Development Department (305) 673- 7260.
INTERESTED PARTIES are invfted'to appear at this. meeting, or be represented by an agent, or to express their views in writing addressed to the City Commission,
rJo the City Clerk, 1700 Convention Center Drive l st Floor, City Hatl, Miami Beach, Florida 33139: Copies of these ordinances are available for public inspection
during.normai business hours in the City Clerk's Offlce,1700 Convention Center Drive l st Floor, City Hall, and Miami Beach, Florida 33139 or via the City's web
. site at www.miamibeachtl.gov. This meeting may be codtinued and under such circumstances additional legal notice would not be provided.
Robert E Percher, City Gerk
Clay of Miami Beach.
Pursuant to Section 286.Q105; Fla. Stet, the City hereby advises the public thatrf a person decides in appeal any decision made by ttie City Commission
with respect to any matter~considered at its•meeting or iLs hearing, such person must ensure that a verbatim record of the proceedings is made, which record
inGudes the testimony ahd~ evidence upon which the appeal is to be based. This notice does not constitute consent by the City for the introduction or admission
of otherwise inadmissible orirrelev8nt evidence, nor does ft authorize challenges or appeals net otherwise allowed by law.
To request this material inaccessible format, sign language interpreters, information on access for persons with disabilities, and/or any accommodation to
review any document orparticipate inanycity-sponsoreii proceeding, please contact (305) 604-2489 (voice), (305)673-~218(TTY) five days in advance to initiate
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