Letter of Agreement - Penn 17, LLC .
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OFFICE OF THE CITY ATTORNEY
F L 0 R ! DA
JOSE SMITH % ,y ' Telephone: (305) 673 -7470
City Attorney Facsimile: (305) 673 -7002
May 17, 2011
Amir Ben -Zion
Penn 17, LLC
5700 Collins Ave, PH A
Miami Beach, FL 33140
Re: Pennsylvania Avenue Garage
1661 Pennsylvania Avenue
Miami Beach, Florida 33139 (Property)
PRE -LEASE AGREEMENT BETWEEN CITY OF MIAMI BEACH, FLORIDA AND PENN
17, LLC
Dear Mr. Ben -Zion:
The following Letter Agreement (which may also be referred to herein as the Pre -Lease
Agreement) shall confirm and memorialize the understanding between the City of Miami Beach ,
Florida (hereinafter City or Landlord) and Penn 17, LLC (hereinafter Gigi or Tenant), with regard
to the Pre -Lease Due Diligence Period agreed to between the parties pursuant to that certain
Letter of Intent, dated April 4, 2011, as executed by Tenant on April 5, 2011, and approved by
the Mayor and City Commission on April 13, 2011, pursuant to Resolution No. 2011 -27647 (the
LOI). A copy of the LOI is attached and incorporated as Exhibit "A" to this Agreement.
Commencing retroactively from the date of approval of the LOI by the City, or April 13, 2011,
and continuing until 5:00 PM Eastern Standard time on October 13, 2011 (the Due Diligence
Period), Tenant and its agents shall make reasonable, diligent, good faith efforts to obtain a
Building Permit for the intended Use of the Premises (as such terms--'Use" and "Premises"- -
are defined in the LOI) by no later than the expiration of the Due Diligence Period (or 5:00 PM
EST on October 13, 2011; such date hereinafter referred to as the Expiration Date). For
purposes of this Letter Agreement, a "Building Permit" shall mean a "Full Building Permit," as
defined. in the City's Land Development Regulations; issued by the City's Building Department;
and which allows building or structures to be erected, constructed, altered, moved, converted,
extended, enlarged, or used for any purpose, in conformity with applicable codes and
ordinances.
In consideration of the City's granting of the aforestated Due Diligence Period, Tenant shall,
concurrent with its execution of this Letter Agreement, tender to City a Pre -Lease Deposit, in the
1700 Convention Center Drive -- Fourth Floor -- Miami Beach, Florida 33139
amount of $25,000, which will only be refunded to Tenant if, after making reasonable, diligent,
good faith efforts, Tenant is unable to obtain a Building Permit for the Premises by the
Expiration Date.
Tenant shall be deemed to have made "reasonable, diligent, good faith efforts " under this
Agreement if it satisfies the following conditions during the Due Diligence Period (and further,
where provided below, during the express timeline within such Period):
1. Tenant shall enter into a contract with a Florida certified and licensed architect /engineer
(the A/E Contract) which shall include, at a minimum, services for the preparation of
detailed plans and specifications (including any layouts, architectural, mechanical,
structural, and other plans, drawings, and /or construction documents which may be
reasonably required by the City's Building Department in order to process and review
Tenant's Building Permit application) for any and all proposed improvements and /or
alterations to the Premises for Tenant's proposed Use (including, without limitation,
those certain improvements /alterations specified as part of Tenant's Investment, as
such term is defined in the LOI). Tenant shall provide the City Manager with a fully
executed copy of the A/E contract as evidence of satisfaction of this condition.
2. Following execution of the A/E Contract, Tenant shall (i) submit a complete application
for a Building Permit to the City's Building Department (which application shall include,
without limitation, any required plans, drawings and /or other construction documents
referenced in subsection (1) above); AND, concurrent therewith, (ii) obtain a Building
Permit Process Number from the City's Building Department, no later than four (4)
months from the commencement date of the Due Diligence Period (Le. no later
than August 13, 2011). Tenant shall provide the City Manager with the Building Permit
Process Number as evidence of satisfaction of this condition.
In the event that Tenant satisfies the requirements in subsections (1) and (2) above, but is
unable to obtain a Building Permit by the Expiration Date, then Tenant shall be deemed to have
made reasonable, diligent, good faith efforts under this Agreement to obtain such Building
Permit and, upon written request to the City Manager, shall be entitled to return of its Pre -Lease
Deposit. Upon return of the Pre -Lease Deposit by the City, this Agreement shall automatically
terminate and be of no further force and effect, and Tenant shall not be obligated to enter into
the Lease for the Premises.
In the event that Tenant does not satisfy either or both of the aforestated conditions in
subsections (1) and (2), within the time period(s) provided herein, then Tenant shall be deemed
NOT to have complied with its obligation to make reasonable, diligent, good faith efforts under
this Agreement to obtain its Building Permit and, accordingly, the City shall be entitled to retain
Tenant's Pre -Lease Deposit as liquidated damages, without further notice, demand, and /or any
other action required. In such event, this Agreement shall automatically terminate and be of no
further force and effect, and Tenant shall not be obligated to enter into the Lease; provided,
however, that upon written notice to the City Manager (Tenant's Election Notice) - -which notice
must be delivered to the Manager no later than five (5) business days from the automatic
termination of the Pre -Lease Agreement or the Expiration Date, whichever is earlier -- Tenant
may elect to proceed to enter into the Lease (upon the same terms and conditions as set forth in
the LOI) and, in such event, the Pre -Lease Deposit shall be credited toward Tenant's Minimum
Security Deposit (as such term is defined in the LOI). Notwithstanding the preceding, or
Tenant's timely Election Notice, if Tenant does not execute the Lease within seven (7) calendar
days from the date of Tenant's Election Notice, then Tenant's election shall terminate and be of
no further force and effect; neither party shall be obligated to enter into the Lease; and the City
shall be entitled to retain the Pre -Lease Deposit as liquidated damages. (c)/
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OFFICE OF THE CITY ATTORNEY - 1700 CONVENTION CENTER DRIVE - MIAMI BEACH , FLORIDA 33139
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In the event that Tenant obtains its Building Permit on or before the Expiration Date, then this
Agreement shall automatically terminate and the parties shall proceed to enter into and execute
the Lease. In that case, the Lease Commencement Date (as such term is defined in the LOI)
shall be the date of issuance of the Building Permit, and the Pre -Lease Deposit shall be credited
toward Tenant's Minimum Security Deposit. Notwithstanding the preceding, if Tenant does not
execute the Lease within seven (7) calendar days from the date of issuance of the Building
Permit, then the City shall be entitled to retain the Pre -Lease Deposit as liquidated damages.
In Tenant's pursuit of its Building Permit, and upon reasonable prior written notice to the City
Manager requesting same, the City, at Tenant's sole cost and expense shall sign (within a
reasonable period of time), all documents that are required of it under applicable law as
Landlord and owner of the Premises (including, without limitation, owner's affidavits, etc.).
Further, in recognition of Tenant's commitment to diligently pursue its Building Permit, and
Tenant's anticipated expense of funds in pursuit thereof, the City agrees during the term of this
Agreement or the Due Diligence Period, whichever expires earlier, to accept only back -up offers
for lease(s) for all or a portion of the Premises, and will, in good faith, continue to negotiate the
final terms of the Lease for the Premises with Tenant (consistent with those terms and
conditions set forth in the LOI).
If the aforestated meets with your approval, please acknowledge and execute same in the
space provided below. Upon execution by the City Manager (on behalf of the City), we will
forward a fully executed copy to you for your records.
my yo
. (
Raul J. Aguila
Chief Deputy ity Attorney
I have read this Letter agreement and fully understanding same, agree to be bound by the terms
and conditions contained herein.
Tenant /fe , LL Landlord /City of Miami Beach
By: ∎��
By:
Tenan , SOn:1 tare • • e z- -
4
Ma -•er
Print Name Date
Date
RJA/ed
c: Hilda Fernandez, Assistant City Manager
Jorge Gomez, Assistant City Manager
Anna Parekh, Real Estate, Housing and Comm. Dev. Director
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OFFICE OF THE CITY ATTORNEY - 1700 CONVENTION CENTER DRIVE - MIAMI BEACH , FLORIDA 33139