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GIGI Lease Exhibit B Letter Of Intent GIGI LEASE "EXHIBIT B" LETTEROFINTENT PLACEHOLDER INSERT - PENDING FROM KONIVER STERN iir siA‘ 1. r lc 01 N V Li\ fl D ? 1 GROUP g '4 % RETAIL REAL ESTATE & BROKERAGE April 4. 2011 Amir Ben-Zion Pennsylvania 17 LLC 5700 Collins Ave. PH A Miami Beach, FL 33140 Re: Pennsylvania Avenue Garage 1661 Pennsylvania Avenue Miami Beach, FL 33139 (the Property) Dear Amir: On behalf of the City of Miami Beach (City), as owner of the above referenced Property, I am pleased to present the following Letter of Intent (L01), setting forth the substantive business terms under which the City would enter into a lease agreement (the Lease) with Pennsylvania 17 LLC (Tenant), for the Premises (as described below). Notwithstanding the preceding, this LOl is subject to and conditioned upon the following: 1. approval of the LOI by the Mayor and City Commission; 2. approval of the Pre-Lease Due Diligence Review Period Agreement (as described below) by the Mayor and City Commission, and execution of same by Tenant and the City; and 3. approval, in substantial form, of the Lease by the Mayor and City Commission, and execution of the final negotiated Lease by Tenant and the City. Property: Pennsylvania Avenue Garage, 1661 Pennsylvania Avenue, Miami Beach, Florida. Premises: Approximately 7,000 sq ft of ground floor retail space on the Property, to be leased in "AS IS" "WHERE IS" condition. Tenant: Pennsylvania Avenue LLC, DBA Gigi. Use: The main/primary use of the Premises shall be for the operation of a high quality restaurant, similar in menu/service to Gigi Restaurant (located at 3470 North Miami Avenue, Miami, Florida), as well as secondary ancillary uses for a high quality bakery, small bar/cafe, and book & gift shop. 1665 Washington Avenue, Penthouse Miami Beach, Florida 33139 Telephone (305) 532-6100 Fax (305) 532-6101 Additional Area (Dry Storage): Tenant has identified an additional unused space underneath the garage ramp of the Property as possible space for dry storage (the Additional Area). Tenant, at Tenant's sole cost and expense, shall build-out the entire Additional Area in order to make said Area usable for its intended purpose, which will include, without limitation, installing door access and pouring flooring. The square footage for Tenant's portion of the Additional Area shall be included (as additional square footage) in the Premises above, and shall also be included for purposes of calculating Tenant's payment of any additional real estate taxes and insurance charges (on that additional square footage), but not for purposes of calculating (additional) Base Rent. In consideration of this, the Tenant shall utilize fifty (50%) percent of the Additional Area (a minimum of 500 SF), and shall allow the balance to be used by the City, at no charge to City. Outdoor Seating (Sidewalk Cafe): Subject to City approval and (if approved) Tenant's compliance with all applicable government requirements including, without limitation, the City's Sidewalk Cafe Ordinance (as same may be amended from time to time), Tenant shall be entitled to use an outside area adjacent to and fronting the Premises (as further determined by the City's Public Works Director) for use as an outdoor sidewalk cafe. Tenant acknowledges that any such outdoor seating area must be approved, and subject to annual renewal, by the City pursuant to the City's Sidewalk Cafe Permit procedures, and shall not be as a matter of right under the Lease. Further, any such Sidewalk Cafe Permit will be issued as a revocable license consistent with other sidewalk cafe permits in the City, and there will be the standard fees and costs associated with that Permit (in addition to the Rent and other charges described in this LO!). Flood Panels: Tenant acknowledges that in the event the City determines, in its sole and reasonable discretion, that a condition arises that requires the installation of flood panels on the Premises, then Tenant will assume sole and immediate responsibility for installation of same. Once the City determines (also in its sole and reasonable discretion) that the condition necessitating the installation has passed, Tenant shall also assume sole and immediate responsibility for removal and storage of the flood panels. Tenant Investment: As an added inducement to have City enter into the Lease, Tenant covenants and agrees that it will invest, or cause to be invested, no less than $1,200,000 in hard construction costs on/to the Premises including, without limitation, the following fixed, non-removable improvements: grease trap; HVAC units and distribution; plumbing installed and distributed for kitchen and bathrooms; completed bathrooms for not less than 200 patrons; and electrical system installed with distribution. As a condition of issuance of the Temporary Certificate of Occupancy (TCO) for the Premises, Tenant shall first certify to the City that it has, in fact, expended not less than the required aforestated amount(s) for hard construction costs. Construction Escrow and Guaranties- Following Lease execution, and issuance by the City of Tenant's Full Building Permit, and prior to commencement of construction, Tenant shall deposit, in cash or through a Letter of Credit (in a form reasonably acceptable to and approved by the City), construction funds, in the amount of the cost of the work (as such amount is set forth in the construction contract between Tenant and its General Contractor) for the build-out of the Premises for the intended Use(s), which will be deposited into Tenant's attorney's escrow account to guarantee the diligent and timely prosecution of construction. At its sole cflscretion, the City may also require that Tenant's General Contractor (G.C.) furnish the City with a Construction Completion Guaranty, and/or require Tenant's G.C. to furnish a Payment and Performance Bond (in a form reasonably acceptable to and approved by the City), guaranteeing the performance of the G.C. under the construction contract. The City shall be named as a dual obligee under such Bond. Term: Nine (9) years and 364 days. Initial Base Rent: Year 1: $75.00 psf. Increases: Three (3%) percent, per year commencing with Year 3 of the Lease. Additional Rent: Tenant shall pay its proportionate share of Common Area Maintenance share of (CAM), real estate taxes, and insurance for the Property (which is projected to be $10.00 psf for Year 1 of the Lease). Percentage Rent: In addition to the annual Base Rent and Additional Rent, Tenant shall also pay an annual Percentage Rent of two percent (2%) of gross sales in excess of $8,000,000. Should sales exceed $9,000,000, the Percentage Rent shall increase to three (3%) 3 percent above $9,000,000. Tenant shall report sales annually on the anniversary date of the Rent Commencement Date. Lease Commencement Date: The earlier of: (i) end of the six (6) month term of the Pre-Lease Agreement (as set forth below), (ii) or issuance by the City of a Full Building Permit. Rent Commencement Date: The earlier of: (i) 180 days from the Lease Commencement Date or; (ii) 90 days from the issuance of a Temporary Certificate of Occupancy (TCO) or Tenant's opening for business, whichever is earlier. Prepaid Rent: One month of Base Rent ($43,750), due upon Lease execution Minimum Security Deposit: Three (3) months Base Rent ($131,250), due upon Lease execution. Pre-Lease Due Diligence Review Period: It is the intent of Landlord and Tenant for Tenant to be granted a Pre-Lease Due Diligence Period based upon the following terms, which will be memorialized in a written agreement (the Pre-Lease Agreement) to be entered into between the parties, following approval of this LOI by the Mayor and City Commission: • As a condition of the City's approval and execution of the Pre-Lease Agreement, and concurrent therewith, Tenant shall tender to the City a $25,000 deposit, which will only be refundable if, after good-faith, diligent efforts, Tenant is unable to obtain a Full Building Permit for the Premises by the end of the term of said Agreement (as set forth below). In that event, Tenant shall not be obligated to enter into the Lease; provided, however, that Tenant may elect to waive the aforestated condition and proceed to enter into the Lease, in which case the $25,000 security for the Pre-Lease Agreement shall be credited toward Tenant's Minimum Security Deposit. • The Pre-Lease Agreement shall be for a maximum term of six (6) months, which shall commence (following approval of this LOl by the Mayor and City 4 Commission) upon execution of the Agreement by the parties hereto; provided, however, that in the event Tenant obtains its Full Building Permit prior to the end of the maximum six (6) month term, then the Pre- Lease Agreement shall automatically terminate and the parties shall proceed to execute the Lease ; the Lease Commencement Date shall be deemed to have commenced as of the date of issuance of the Full Building Permit. • Tenant shall be deemed to have made its "good faith, due diligence efforts" under the Pre-Lease Agreement if it satisfies the following conditions during the term of the Agreement, or with the timeline expressly provided therein: (i) contract with a Florida certified and licensed architect/engineer to prepare any and all required plans and specifications for the proposed Uses on the Premises including, without limitation, such construction documents as required by the City's Building Department in order to process and review Tenant's Building Permit application; and (ii) submit a complete application (including the required plans, drawings, and construction documents) for a Building Permit, and obtain a Building Permit process number from the City's Building Department no later than four (4) months from the commencement of the term of the Pre-Lease Agreement. • City shall agree to sign within a reasonable period of time, all documents that are required of it as Landlord/Owner in Tenant's pursuit of a Building Permit. • Time is of the essence and it shall be a requirement of the Tenant to notify the City if for any reason it deems that it cannot construct its proposed facility. • In consideration of Tenant's diligent pursuit of a Full Building Permit for the Premises and the expense of funds anticipated by Tenant in said pursuit, City agrees to accept only back-up contracts during the term of the Pre-Lease Agreement, and will, in good faith, continue to negotiate the Lease anticipated in this LOI. Sole Broker(s): Koniver Stern Group and City Realty Group International (Jon Jacobs, Realtor). Contingency: The terms of this LOI shall be subject to approval by the City Commission. 5 Good Faith Negotiations: This LOI represents some of our undertakings regarding a possible future Lease and is not intended to create a legally binding obligation on either party. Such an obligation will be created only when a proposed Lease is approved by the Mayor and City Commission and both parties execute the final Lease, covering all of the rights and obligations of the parties, which is then delivered by and between us. If the Lease is not approved by the Mayor and City Commission, and/or not executed by the parties, then neither party will be liable to the other under this document or as a result of any preliminary negotiation; provided, however, that in the event of Tenant's non-compliance with the conditions of the Pre-Lease Agreement, the City shall be entitled to retain Tenant's $25,000 deposit. The foregoing LO1 is also predicated upon receipt of acceptable personal and corporate financial and business background information. Please sign in the space indicated below, if you are in agreement with the terms stated herein, provide the required financial information, and 1 will forward the City's draft Lease for your review upon final approval of the LO1 by the Mayor and City Commission. If you should have any questions, please do not hesitate to contact me at 305-532- 6100. Thank you. Lyle Stern Koniver Stern Group AGREED AND ACCEPTED BY TENANT/PENN 17 LLC: By: , Sig i 4 NN -- N -1. - M I ''-- • fk,. \ '::42 ' 1/ .C, P‘, 1 fA, ,„ 14 . ,,op STEVEN E MCNEFF Print Name/Title , Notary Public - State of Florida My Comm, Expires Oct 17, 2014 Date: \ 1.11S r ik ,,4ZtiP..4. Corprhission # EE 3023 , 4 7 6 12NE I THURSDAY, MARCH 31, 2011 NE MIAMIBEACH CI TY OF MIAMI BEACH PUBLIC HEARING NO TICE IS HEREBY GIVEN that a first reading and public hearing will be held by the City Commission of the City of Miami Beach on WE DNESDAY, April 13, 2011 at 11:30 A.M. or as soon thereafter as possible in the City Commission Chambers, Third Floor, City Hall, located at 1700 Convention Center Drive, Miami Beach, Florida 33139 to consider: - A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING, FOLLOWING A DULY NOTICED PUBLIC HEARING, THE FOLLOWING AGREEMENTS PERTAINING TO. THE PROPOSED LEASE AGREEMENT (THE LEASE), HAVING A TERM OF NINE(9) YEARS AND 364 DAYS, BETWEEN THE CITY AND PENNSYLVANIA AVENUE LLC, D /B /A GIGI, FOR THE USE OF APPROXIMATELY 7000 SQUARE FEET OF GROUND LEVEL RETAIL SPACE AT THE PENNSYLVANIA AVENUE GARAGE, 1661 PENNSYLVANIA AVENUE, MIAMI BEACH, FLORIDA, FOR A RESTAURANT (PRIMARY USE), WITH ANCILLARY USES TO INCLUDE A BAKERY, BAR/ CAFE, AND BOOK AND GIFT SHOP: 1.) A PRE -LEASE DUE DILLIGENCE REVIEW AGREEMENT; 2.) A LEI f ER OF INTENT (LOI), SE I I ING FORTH THE SUBSTANTIVE BUSINESS TERMS OF THE LEASE; AND 3.) A DRAFT, IN SUBSTANTIAL FORM, OF THE PROPOSED LEASE; AUTHORIZING THE CITY MANAGER TO EXECUTE THE PRE -LEASE DUE DILLIGENCE REVIEW AGREEMENT AND THE LOI, AND FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE THE FINAL • LEASE, BASED UPON THE BUSINESS TERMS IN THE LOI AND SUBJECT TO FINAL REVIEW BY THE CITY MANAGER AND CITY ATTORNEY'S OFFICE; . AND FURTHER WAIVING, BY 5 /7THS VOTE, THE COMPETITIVE BIDDING AND APPRAISAL REQUIRMENTS (AS PERMITTED PURSUANT TO SECTION 82 -39 OF THE CITY CODE), FINDING SUCH WAIVER TO BE IN THE BEST INTEREST OF THE CITY. Inquiries may be directed to the Department of Housing/ Community Development at (305) 673 -7260. All 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 Planning Department, 1700 Convention Center Drive, City Hall, Miami . Beach, Florida 33139. Copies of the proposed amendments are available in the Planning Department. Pursuant to Florida Stat. 286.0105, the City hereby advises the public that if a person decides to appeal any decision made by the Planning Board 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 must include 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. • In accordance with the Americans with Disabilities Act of persons needing special accommodation to participate in this proceeding should contact the Board's Administrator no later than four days prior to the proceeding at (305) 673 -7550 for assistance', if h,,,,.ing impaired telephone the Florida Relay Service numbers, (305) 673 -721'6 or 711 for assistance. AD #653 ` '