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2010-27555 Reso 2010 -27555 RESOLUTION NO. A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING, FOLLOWING A DULY NOTICED PUBLIC HEARING, A LEASE AGREEMENT BETWEEN THE CITY AND SYANNA, LLC. (TENANT), FOR THE LEASE OF APPROXIMATELY 2216 SQUARE FEET OF CITY OWNED PROPERTY, LOCATED AT 22 WASHINGTON AVENUE, MIAMI BEACH, FLORIDA, FOR THE PURPOSE OF AN OUTDOOR CAFE ASSOCIATED WITH THE RESTAURANT TO BE OPERATED BY THE TENANT AT 816 COMMERCE STREET, WHICH IS DIRECTLY ADJACENT TO AND WEST OF THE SUBJECT CITY PROPERTY; SAID LEASE HAVING AN INITIAL TERM OF FIVE YEARS, WITH AN OPTION TO RENEW FOR FOUR YEARS AND 364 DAYS, AT THE CITY'S SOLE DISCRETION; FURTHER WAIVING BY 5 /7THS VOTE, THE COMPETITIVE BIDDING AND APPRAISAL REQUIREMENTS, AS REQUIRED BY SECTION 82 -39 OF THE MIAMI BEACH CITY CODE. WHEREAS, the City and Syanna, LLC. have negotiated a five (5) year lease, with an option to renew for an additional four (4) years and three hundred sixty four (364) days, at the City's sole discretion, for the use of approximately 2,216 square feet of vacant City -owned property located at 22 Washington Avenue for an outdoor cafe associated with the Tenant's operation of a restaurant located at 816 Commerce Street, (which is directly adjacent to and west of the Property); and WHEREAS, Section 82 -37 of the Miami Beach City Code, governing the sale /lease of public property for a term of ten (10) years or less requires review by the Finance and Citywide Projects Committee, and City Commission approval accompanied by a public hearing; and WHEREAS, Section 82 -39 of the City Code further provides for the waiver of the competitive bidding and appraisal requirements, by 5 /7ths vote of the 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, and the Administration would hereby recommend that the Mayor and City Commission approve said waiver; and WHEREAS, on November 3, 2010, the Finance and Citywide Projects Committee recommended approval of the proposed Lease Agreement, subject to the Tenant scheduling a meeting to review its proposed site plan with the South of Fifth Neighborhood Association prior to approval of the Lease Agreement by the Mayor and City Commission. 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, following a duly noticed public hearing, a Lease Agreement between the City and Syanna, LLC., (Tenant) for use of approximately 2,216 square feet of City -owned property, located at 22 Washington Avenue, Miami Beach, Florida, for the purpose of an outdoor cafe associated with restaurant to be operated by the Tenant at 816 Commerce Street, which is directly adjacent to and west of the subject City property; said lease having an initial term of five (5) years, with an option to renew for four years and 364 days, at the City's sole discretion; and, further waiving by 5 /7ths vote, the competitive bidding and appraisal requirements, as required by Section 82 -39 of the Miami Beach City Code; authorizing the Mayor and City Clerk to execute the Lease Agreement. PASSED and ADOPTED this 17th day of November, 2010. ATTEST: k ik t 19 4A dtilt- . Robert Parcher, CITY CLERK M • ' i errera- %ower, MAY • R JMG \HMFWP \KOB T:IAGENDAI20101Noveber 171RegularlSyanna Lease Res.doc APPROVED AS TO FORM & LANGUAGE FOR EXECUTION City Attome , COMMISSION ITEM SUMMARY Condensed Title: Resolution approving and authorizing the Mayor and City Clerk to execute a Lease Agreement, after a duly noticed public hearing, between the City and Syanna, LLC., Inc. for the lease of approximately 2,216 sf of City -owned property at 22 Washington Avenue for an outdoor cafe, for an initial term of five years, with an option to renew for an additional four years and 364 days; waiving by 517 vote the competitive bidding and appraisal requirements. Key Intended Outcome Supported: Increase resident satisfaction with the level of services and facilities. Supporting Data (Surveys, Environmental Scan, etc.): Approximately 40% of retail businesses surveyed, rank Miami Beach as one of the best places to do business and 61 % of the same group would recommend Miami Beach as a place to do business. The Tenant's request to Lease 22 Washington Avenue supports the Survey's findings. Issue: I Should the City approve the lease agreement? Item Summary/Recommendation: PUBLIC HEARING The City has received an offer from Syanna, LLC.,(Syanna) to lease a City -owned 2,216 square foot vacant parcel located at 22 Washington Avenue (Subject or City -owned Parcel), which is adjacent and east of 816 Commerce Street, a privately owned two -story commercial building. The City -owned parcel is a remaining portion of an undeveloped platted lot which is the residual lot in connection with the expansion of Washington Avenue. Due to its limited size and shape, the property serves little more than to provide access to 816 Commerce Street. The proposal to lease the space is from a restaurateur who proposes to place tables and chairs on the City -owned site to supplement the interior seating in the adjacent, privately -owned restaurant. Previously, in 2006, the City Commission approved a Lease Agreement with Manpriya, Inc. for use of the same site, and the lease was fully executed; however, the project was never developed. In 2009, the City Commission approved a Lease Agreement with Moon Thai South Beach, Inc., for use of the site as an out -door cafe. The financial lease terms approved were substantially the same as a previous lease agreement, with an initial base rent of $25 per square foot or 3% of sales. A list of operational conditions were recommended by the local neighborhood association and subsequently approved by the City Commission and incorporated into the lease. As had occurred previously, the proposed tenant failed to develop the site for its intended use and the lease terminated for non - payment of rent. The proposed Lease with Syanna provides for an initial term of five (5) years with one renewal option term for four (4) years and 364 days. Given the extent of Syanna's proposed investment to improve the City's property, the Administration is recommending an eight (8) month rent abatement eriod upon commencement of the proposed lease term, which will allow the Tenant time to develop the site, start up its p p P P P p operations, and establish cash flow in order to start remitting rent. The total value of the proposed lease payments during the initial five -year period is $269,613.34. Rent during the renewal term will be subject to a review of Syanna's annual operating results, upon which a determination will be made whether to charge a percentage of gross receipts or to continue to assess a fixed annual rent to be escalated annually based on CPI or other acceptable indices. At no time will the base rent during the renewal period be Tess than $35 per square foot. The balance of the terms and conditions, including but not limited to, limitations on use, plan approvals and hours of operation, are the same as those previously approved for the Moon Thai Lease following extensive community input. Section 82 -37 of the Miami Beach City Code, governing the sale /lease of public property for a term of ten (10) years or less requires review by the Finance and Citywide Projects Committee (F &CPC), and City Commission approval accompanied by a public hearing. Furthermore, Section 82 -39 provides for the waiver of competitive bidding, by 5 /7ths vote of the Mayor and City Commission. At its November 3, 2010 meeting, the F &CPC discussed and recommended approval of the proposed lease agreement, said lease having an initial term 5 years, with an option to renew for 4 years and 364 days at the City's sole discretion, with the operational conditions previously approved for the site. Advisory Board Recommendation: Finance and Citywide Projects Committee: November 3, 2010. Financial Information: Source of Amount Account Funds: n/a 1 N/A Financial Impact Summary: City Clerk's Office Legislative Tracking: Anna Parekh, Ext 7260 Sign -Offs: Department Director - - si -tan Ci Manager Ci ► ana • - ►d1 Ali 41 i . .� _ Alb AP HF' J %/� � I 7�`�irt /PM 1 JMG Irrg' "� P . ip7W'/t7 TAAGENDAl2010Wov 171RegularlSyanna Lease mmary.doc M I AM I BEAC AGENDA ITEM P DATE 11-1-2-10 Ira MIAMIBEACH City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov COMMISSION MEMORANDUM TO: Ma • Ma i H. Bower and M- b rs of the City Commission � ' , , FROM: .tor• - M. Gonzalez, City Ma 4 DATE: November 17, 2010 PUBLIC HEARING SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING, FOLLOWING A DULY NOTICED PUBLIC HEARING, A LEASE AGREEMENT BETWEEN THE CITY AND SYANNA, LLC. (TENANT), FOR THE LEASE OF APPROXIMATELY 2,216 SQUARE FEET OF CITY -OWNED PROPERTY, LOCATED AT 22 WASHINGTON AVENUE, MIAMI BEACH, FLORIDA, FOR THE PURPOSE OF AN OUTDOOR CAFE ASSOCIATED WITH THE RESTAURANT TO BE OPERATED AT 816 COMMERCE STREET, WHICH IS DIRECTLY ADJACENT TO AND WEST OF THE SUBJECT CITY PROPERTY; SAID LEASE HAVING AN INITIAL TERM OF FIVE YEARS, WITH AN OPTION TO RENEW FOR FOUR YEARS AND 364 DAYS, 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. ADMINISTRATION RECOMMENDATION Adopt the Resolution. KEY INTENDED OUTCOMES SUPPORTED To ensure well- maintained facilities. BACKGROUND The City has received an offer to lease a City -owned 2,216 square foot vacant parcel located at 22 Washington Avenue, (Subject or City -owned Parcel), which is adjacent and east of 816 Commerce Street, a privately owned two -story commercial building. The City -owned parcel is a remaining portion of an undeveloped platted lot which is the residual lot in connection with the expansion of Washington Avenue. Due to its limited size and shape, the property serves little more than to provide access to 816 Commerce Street. The proposal to lease the space is from a restaurateur who proposes to place tables and chairs on the City -owned site to supplement the interior seating in the adjacent, privately -owned restaurant. The City has been approached by other restaurant operators in the past regarding the use of the site. In 2006, the City Commission approved a Lease Agreement with Manpriya, Inc. for use of the site, and the lease was fully executed; however, the project was never developed. In 2009, the City Commission approved a Lease Agreement with Moon Thai South Beach, Inc., for use of the site as an out -door cafe. The financial lease terms approved were substantially the Commission Memo 22 Washington Lease Agreement November 17, 2010 Page 2 of 4 same as a previous lease agreement, with an initial base rent of $25 per square foot or 3% of sales. A list of operational conditions were recommended by the local neighborhood association and subsequently approved by the City Commission and incorporated into the lease. As had occurred previously, the proposed tenant failed to develop the site for its intended use and the lease terminated for non - payment of rent. ANALYSIS This latest offer to lease the subject parcel comes from Syanna, LLC, ( Syanna or Tenant), who entered into a 10 -year lease at 816 Commerce Street in April, 2010, to establish a high -end eclectic restaurant specializing in international cuisine. Syanna's managing principal, Symcha Zilberman, has a food and beverage background, having owned and operated two 120 -seat restaurants in his native Venezuela, a French restaurant /bar and a deli. Syanna is investing approximately $800,000 to build out the interior space, which accommodates 45 ( + / -) seats, and is planning an additional $80,000 investment to landscape and improve the City -owned parcel to accommodate outdoor seating for an additional 46 seats, pursuant to the site plan attached, P p , should the lease be approved. The Tenant's current preliminary plans have been developed to generally conform to the site plan submitted by Moon Thai (the previous tenant), which was approved by the Planning Department. Due to the landscaping and hardscape requirements, and his proposed plan to address these requirements, the Tenant's usable space for tables and chairs is approximately 50% of the entire parcel. Any change to the site plan to add additional tables /chairs would require a lease amendment. In light of the prospective tenant's investment, they had requested a 15 -month rent abatement, and a reduced price per square foot. Financial Terms In order to develop a recommendation regarding this new lease proposal, staff obtained an appraisal for the site prepared by Bondarenko Associates. However, the appraisal found no comparables as there are no other outdoor seating areas in the vicinity. The subject site is not a sidewalk cafe, and therefore, current sidewalk cafe fees are not a reasonable market comparable. Based on the foregoing, the Administration has been able to negotiate the following proposed lease terms: Proposal Terms: Lease Term 5 Years Renewal Option 1 @ 4 years 364 days Area 2,216 total square feet Proposed Rent (initial term, assuming Nov 18tH — commencement date) Year 1: $20.00/sf Year 2: $25 /sf Years 3 -5: $30 /sf Security Deposit 3 months' security deposit $11,089 Given the extent of Syanna's proposed investment to improve the City's property, the Administration is recommending an eight (8) month rent abatement period upon commencement of the proposed lease term, which will allow the Tenant time to develop the site, start up its operations, and establish cash flow in order start remitting rent. This term acknowledges that permitting cannot occur until a lease has been executed, and as a result, the site improvements are likely not to be completed for at least two months. The total value of the Commission Memo 22 Washington Lease Agreement November 17, 2010 Page 3 of 4 proposed lease payments during the initial five -year period is $269,613.34 (Year 1 rent payments, including the abatement will be $14,773.34; Year 2 rent payments will be $55,400; Years 3, 4, and 5 rent payments will be $66,480 each year). Rent during the renewal term will be subject to a review of the Tenant's annual operating results, upon which a determination will be made whether to charge the Tenant a percentage of gross receipts or to continue to assess a fixed annual rent to be escalated annually based on CPI or other acceptable indices. At no time will the base rent during the renewal period be less than $35 per square foot. Operational Conditions As previously noted, during discussions with Moon Thai, substantial input was received from the community regarding certain conditions they wished to have included in the lease. These included, among other things, not permitting speakers or TVs in the outdoor cafe area; limiting delivery, valet, take -out, etc. operations to Commerce Street (not on Washington Avenue); no Special Event permits to be allowed; no outdoor bar counter, and a limit on the hours of operations. In addition to the rent terms negotiated with Syanna, the City has negotiated the same operating terms /conditions for this lease, as included with Moon Thai, as follows: 1) Tenant, at its sole cost and expense, will develop the City's property into the aforementioned outdoor cafe, and demolish and remove any improvements at Lease termination (at the City's discretion); 2) Tenant agrees to use the City's property solely as an outdoor cafe to serve the patrons and guests of the adjoining restaurant at 816 Commerce Street. Furthermore, Tenant agrees not to place any speakers in or around the Property and /or attach any speakers to the exterior of the restaurant building at 816 Commerce Street. The Planning Department analysis dated March 16, 2006 supports such use of the City's parcel and recommends the condition of use as stated above. The Planning Department condition of use is consistent with expressed City Commission concerns relating to the previous leases on this property and has been incorporated in order to mitigate those concerns; 3) Syanna must obtain approvals from the Planning Department and the City Administration in the design and layout of the outdoor cafe pavers, tables, chairs and umbrellas; 4) In addition to the above - referenced security deposit, Syanna agrees to provide a performance bond, or other similar instrument (e.g. irrevocable letter of credit, surety bond, etc.) acceptable to the City, in an amount equal to the estimated costs to construct the proposed improvements; 5) Any take -out, valet, taxi or sidewalk cafe must only utilize Commerce Street; these activities will not be allowed on Washington Avenue; deliveries to the business must be made from the alley south of the business. 6) No televisions will be permitted to be part of the outdoor cafe; 7) There shall be no bar counter allowed outside. Liquor and food operations involving the outdoor cafe shall only be done in conjunction with the adjacent restaurant operations and only when the interior kitchen is operational; 8) Tenant shall be permitted to apply for one (1) special event permit, (if needed), for the sole and express purpose of hosting a grand opening event for the restaurant. At no time thereafter, shall the Tenant be allowed to apply for a special events permit for the Demised Premises; 9) Tenant's operation will not interfere with pedestrian traffic; Commission Memo 22 Washington Lease Agreement November 17, 2010 Page 4 of 4 10) Tenant's hours of operation are currently established as follows: Sunday through Thursday 11:30am to 11:OOpm; Friday through Saturday 11:30am to midnight. 11) No bussing stations shall be permitted in the outdoor cafe area. At the November 3, 2010, meeting of the Finance and Citywide Projects Committee ( FCWPC), staff informed the Committee that the South of Fifth Street Neighborhood Association (SOFNA) was notified of the current Lease proposal and that certain concerns were raised by SOFNA members regarding Syanna's adherence to conditions previously requested by SOFNA. Staff confirmed that all conditions imposed on the previous tenants have been incorporated into the current Lease terms. The FCWPC recommended approval of the Lease terms as proposed, subject to a meeting between Syanna and SOFNA, to occur prior to the Lease being presented to Commission for approval. That meeting with representatives from SOFNA, the prospective Tenant and City staff occurred on November 9, 2010. SOFNA was supportive of the concept and only had one significant concern regarding the size of the Tenant's proposed umbrellas, as well as a welcomed suggestion to stage deliveries from the kitchen entrance located in the alley on the south side of 816 Commerce Street. The issue with the umbrellas, which currently do not conform to Planning requirements, are subject to review and direction from Planning as a condition of the lease. In addition, and in response to concerns from the residents, additional operating conditions have been delineated and are included in the lease (attached) as Exhibit B. These mirror similar restrictions for sidewalk cafes on public rights -of -way, and should present no operational issues for the new tenant. The hours of operation were discussed and concerns regarding noise were p g 9 raised. At present, operating hours end at midnight on Friday and Saturday. While speakers, TV's or live entertainment are not permitted in the lease area, crowd noise remains a concern. As the hours are comparable to nearby businesses, they will remain as proposed. However, the business has been advised of the City's noise ordinance, and the lease. CONCLUSION Based on the unique disposition of this undeveloped parcel of land, and its limited use due to the size and location, it has been determined that the parcel would not be subject to public bidding as it could only be used with any functionality by the adjacent property. The Administration therefore recommends in favor of finalizing the proposed Lease with Syanna, LLC., for use of the Demised Premises, located at 22 Washington Avenue, said Lease having an initial term of five (5) years, with an option to renew for four (4) years and three hundred and sixty four (364) days at the City's sole discretion, incorporating the previously referenced financial terms and operational conditions; and hereby waiving by 5 /7ths vote the competitive bidding and appraisal requirements as required by Section 82 -39 of the Miami Beach City Code. 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"40' . 1 .-.„ 1 .t.,i t A.'--: , ---) 1 • 3 r -- 7-' --- ‘1' - ... _ _ _ _ - ....... : i. • ! \ / ' • / • / • / r '• \ ; \ - ''' ,, - - 7.0M - ,•<..„\,.., _,.., 1,,,' • SYANNA - - 0' U / g b . i , 1 1 j ,,r; ,.1 2 816 COMMERCE AVENUE '' .g . f - A 0 :MIAMI BEACH, FLORIDA .rin? 71 l : E T I ''-'7' 0........■ Outdoor Dining Landscape Plan i I WI tV 1 ti z e\1 MIAMI BEACH CITY OF MIAMI BEACH NOTICE OF PUBLIC HEARING NOTICE IS HEREBY given that a first and only reading and public hearing will be held by the City Commission of the City of Miami Beach, in the Commission Chambers, 3rd floor, City Hall, 1700 Convention Center Drive, Miami Beach, Florida, on Wednesday, November 17, 2010 at 11:40 A.M Approving, Following A Duly Noticed Public Hearing, A Lease Agreement Between The City Of Miami Beach And Syanna, LLC, For Use Of Approximately 2,216 Square Feet Of City -Awned Property, Located At 22 Washington Avenue, Miami Beach, Florida; Said Lease Having An Initial Term Of Five (5) Years, With One Additional Four Year And Three Hundred Sixty Four (364) Day Renewal Term At The City's Sole Discretion, Further Waiving, By 5 /7ths Vote, The Competitive Bidding Requirement, As Required By Section 82 -39 Of The Miami Beach City Code; Further Authorizing The Mayor And City Clerk To Execute The Lease Agreement. Inquiries may be directed to the Real Estate, Housing & Community Development Department (305) 673- 7260. INTERESTED PARTIES are invited to appear at this meeting, or be represented by an agent, or to express their views in writing addressed to the City Commission, c/o the City Clerk, 1700 Convention Center Drive, 1st Floor, City Hall, Miami Beach, Florida 33139. This meeting may be opened and continued and, under such circumstances additional legal notice would not be provided. Robert E. Parcher City Clerk City of Miami Beach Pursuant to Section 286.0105, Fla. Stat., the City hereby advises the public that: if a person decides to appeal any decision made by the City Commission with respect to any matter considered at its meeting or its hearing, such person must ensure that a verbatim record of the proceedings is made, which record includes the testimony and 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 or irrelevant evidence, nor does it authorize challenges or appeals not otherwise allowed by law. To request this material in accessible format, sign language interpreters, information on access for persons with disabilities, and /or any accomr odatioc to review any document or participate in any city- sponsored proceeding, please contact (305) 604 -2489 (voice), (305) 673- 7218(TTY) five days in advance to initiate your request.TTY users may also call 711 (Florida Relay Service). 4) C ,3,' MONDAY, NOVEMBER 1, 2010 I 15A