2011-27701 Reso RESOLUTION NO, 2011 -27701
A RESOLUTION OF THE MAYOR AND THE CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, APPROVING AND AUTHORIZING
THE MAYOR AND CITY CLERK TO EXECUTE AMENDMENT NO. 2 TO
THE MANAGEMENT AGREEMENT BETWEEN THE CITY OF MIAMI
BEACH, FLORIDA AND ALTOS DEL MAR SCULPTURE PARK, INC.
(ADMSP) FOR THE OPERATION OF A SCULPTURE PARK IN ALTOS
DEL MAR PARK; SAID AMENDMENT MODIFYING THE DEADLINE TO
OBTAIN A FULL BUILDING PERMIT FOR CONSTRUCTION OF THE
SCULPTURE PARK PROPOSED IMPROVEMENTS, FROM MAY 13,
2011, TO MARCH 31, 2012; AND FURTHER REQUIRING ADMSP TO
PROVIDE PROOF TO THE CITY COMMISSION BY SEPTEMBER 14,
2011, THAT FUNDING FOR ARCHITECTURAL AND ENGINEERING
SERVICES FOR DESIGN AND DEVELOPMENT OF THE PROPOSED
IMPROVEMENTS HAS BEEN SECURED.
WHEREAS, on October 17, 2007, the Mayor and City Commission approved the
issuance of Request for Proposals No. 02 -07/08 to establish a Cultural Arts Themed and /or
Other Passive Recreational Activities Program in Altos Del Mar Park, located on Collins
Avenue, between 76th and 77th Streets (the RFP); and
WHEREAS, on July 16, 2008, the Mayor and City Commission accepted the
recommendation of the City Manager and authorized the Administration to enter into
negotiations with the successful proposer, Altos Del Mar Sculpture Park, Inc, a not -for-
profit Florida corporation (ADMSP); and
WHEREAS, on June 3, 2009, the City Commission adopted Resolution No. 2009-
27100, which approved and authorized the Mayor and City Clerk to execute a Management
Agreement with ADMSP for the establishment, operation, and maintenance of a cultural
arts themed program, to be known as the "Altos del Mar Sculpture Park" (the Agreement)
WHEREAS, on April 14, 2010, the City Commission approved Amendment No. 1
of the Management Agreement, via Resolution No. 2010- 27371, which defined the
"Possession Date," and further provided that ADMSP's obligations under the Agreement
with respect to maintenance and general liability coverage would not commence until such
Possession Date; and
WHEREAS, on March 5, 2011, ADMSP requested that the City grant it an
extension of time obtain a Full Building Permit for the Proposed Improvements (as said
term is Defined in the Agreement), from May, 13, 2011, to February 13, 2012, because it
had not been able to secure the necessary architectural and engineering (NE) services, for
design of such improvements on a pro -bono basis, and would therefore have to raise funds
to pay for these services; and
WHEREAS, on May 4, 2011, ADMSP submitted a letter to the City explaining in
more detail the reason for its extension request, and amended its original request (within
which to obtain a Full Building Permit) to March 31, 2012; and
WHEREAS, the Neighborhoods and Community Affairs Committee reviewed
ADMSP's request at its May 5, 2011 meeting, and unanimously recommended in favor of
the extension until March 31, 2012, and further recommended that ADMSP provide the City
with proof that it had obtained sufficient funds to pay for the required NE services, by
September 14, 2011; and
WHEREAS, the proposed Amendment was presented to the Mayor and City
Commission at its regularly scheduled meeting on June 1, 2011; the City Commission
deferred the item to its meeting of July 13, 2011, and requested that the Amendment be re-
drafted to include the following:
1. A general release by ADMSP waiving any defenses or claims against the City;
2. Further defining the "necessary funding" for the A/E services required by ADMSP to
design and develop the Proposed Improvements as requiring a minimum amount of
$120,000 (see Section 9.7.8.1 of the Amendment);
3. Add language that ADMSP's evidence of funding for the Proposed Improvements must
be verified by the City's Chief Financial Officer, and further defining the type of
evidence required; and
4. Include (in the Recitals) an acknowledgement by ADMSP that, absent ADMSP's
obtaining the City's consent to its request for extension of time to obtain its final Full
Building Permit (as contained in and subject to the terms of the proposed Amendment),
ADMSP will be in default under the Agreement.
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 and authorize the Mayor and City Clerk to execute the
attached Amendment No. 2 to the Management Agreement between the City of Miami
Beach, Florida, and Altos Del Mar Sculpture Park, Inc. for the Operation of a Sculpture
Park in Altos Del Mar Park; said Amendment modifying the deadline to obtain a Full
Building Permit for construction of the Sculpture Park Proposed Improvements, from May
13, 2011, to March 31, 2012; and further requiring ADMSP to provide proof to the City
Commission by September 14, 2011, that funding for architectural and engineering
services for design and development of the proposed improvements has been secured.
PASSED AND ADOPTED this /34)day of J1 , 2011.
02 1
ATTEST: MAYOR
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CITY CLERK
APPROVED AS TO
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COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution of the Mayor and the City Commission of the City of Miami Beach, Florida, authorizing Amendment No. 2 to the
Management Agreement between the City of Miami Beach, Florida and Altos Del Mar Sculpture Park, Inc. for the Operation of a
Sculpture Park in Altos Del Mar Park; said amendment modifying the deadline to obtain a building permit for construction of the
sculpture park proposed improvements from May 13, 2011, to March 31, 2011; and further requiring ADMSP to provide proof to the City
Commission by September 14, 2011, that funding for architectural and engineering services has been secured.
Key Intended Outcome Supported:
Increase satisfaction with family friendly recreational activities.
Supporting Data (Surveys, Environmental Scan, etc.): The 2009 Community Satisfaction Survey shows that 73.3% of residents
and 58.7 % of businesses feel the City has the "right amount" of cultural events available. Residents also attend cultural activities (such
as art shows, film festivals and live performances) 10.61 times per year on average. The same survey shows that residents attend
museums on average 6.85 times per year. However, 29.3% of residents also feel the City has "too few" museums.
Issue:
Shall the City Commission approve an amendment to the Management Agreement Between the City and ADMSP
Item Summary /Recommendation:
On October 17, 2007, the Mayor and City Commission approved the issuance of Request for Proposals No. 02 -07/08 to establish a
Cultural Arts Themed and /or Other Passive Recreational Activities Program in Altos Del Mar Park, located on Collins Avenue, between
76th and 77th Streets (the RFP) The Administration negotiated a Management Agreement with ADMSP whereby they would design,
develop, operate and maintain a sculpture park within a portion of Altos Del Mar Park (to be known as the Altos Del Mar Sculpture
Park), in accordance with its response to the RFP On June 3, 2009, the City Commission adopted Resolution No. 2009 -27100 which
approved and authorized the Mayor and City Clerk to execute a Management Agreement with ADMSP. On April 14, 2010, the City
Commission approved Amendment No 1 of the Management Agreement by adopted Resolution No. 2010 - 27371. The Amendment
defined the "Possession Date" and further provided that ADMSP's obligations under the agreement with respect to maintenance and
general liability coverage shall not commence until the possession date.
On March 5, 2011, the City received a letter from ADMSP (See attached Exhibit A), advising the City that it would not be able to obtain
a Full Building Permit for the Proposed Improvements by May 13, 2011, as currently stipulated in the Agreement, and requested an
extension of certain contractually required deadlines. Subsequently, on May 4, 2011, ADMSP submitted another letter (Exhibit B)
explaining in more detail the reason for the extension request. The letter also amends the original request within which to obtain a Full
Building Permit to March 31, 2012. The Neighborhoods and Community Affairs Committee considered ADMSP's request at its May 5,
2011, meeting. ADMSP explained that it is now in a position to raise $120,000 to pay for the A/E services, but is in need of additional
time to secure these funds and obtain a Full Building Permit. The Committee unanimously recommended in favor of the extension until
March 31, 2012, and that ADMSP provide the City with proof that they have obtained sufficient funds to pay for the A/E services by the
September Commission meeting. This item was presented to the Mayor and City Commission at its regularly scheduled meeting on
June 1, 2011. The Administration was directed to bring this item back to the July 13, 2011, City Commission meeting with the following
amendments: 1) A general release by ADMSP waiving any defenses or claims against the City; 2) Further defining the "necessary
funding" for the A/E services required by ADMSP to design and develop the Proposed Improvements as requiring a minimum amount
of $120,000 (see Section 9.7.8.1 of the Amendment); 3) Add language that ADMSP's evidence of funding for the Proposed
Improvement must be verified by the City's Chief Financial Officer, and further defining the type of evidence required; and 4) Include (in
the Recitals) as acknowledgement by ADMSP that, failing to obtain the City's consent to ADMSP's request for extension of time to
obtain its final Full Building Permit, as contained in and subject to the terms of the proposed Amendment, ADMSP will be in Default
under the Agreement. Based on the aforestated direction, the City Attorney's Office has drafted the attached Amendment No. 2 to the
Management Agreement for your review and consideration. A draft has been provided to ADMSP.
Advisory Board Recommendation:
The Neighborhoods and Community Affairs Committee reviewed this request at their May 5, 2011 meeting and unanimously recommended
in favor of the requested amendment.
Financial Information:
Source of Funds: Amount Account Approved
1
Financial Impact Summary:
City Clerk's Office Legislative Tracking:
Max Sklar, Ext 6116
Sign - Offs:
Department Director Assi t i Manager City Manager
41*!0 j , , T3vir
AGENDA ITEM Ri F
M IAMIBEACH DATE 7 -►3 - I I
m' MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City Commission
FROM: Jorge M. Gonzalez, City Manager
DATE: July 13, 2011
SUBJECT: A RESOLUTION OF THE MAYOR AND THE CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, APPROVING AND AUTHORIZING THE MAYOR AND CITY CLERK
TO EXECUTE AMENDMENT NO. 2 TO THE MANAGEMENT AGREEMENT BETWEEN
THE CITY OF MIAMI BEACH, FLORIDA AND ALTOS DEL MAR SCULPTURE PARK, INC.
(ADMSP) FOR THE OPERATION OF A SCULPTURE PARK IN ALTOS DEL MAR PARK;
SAID AMENDMENT MODIFYING THE DEADLINE TO OBTAIN A BUILDING PERMIT FOR
CONSTRUCTION OF THE SCULPTURE PARK PROPOSED IMPROVEMENTS FROM
MAY 13, 2011, TO MARCH 31, 2012; AND FURTHER REQUIRING ADMSP TO PROVIDE
PROOF TO THE CITY COMMISSION BY SEPTEMBER 14, 2011, THAT FUNDING FOR
ARCHITECTURAL AND ENGINEERING SERVICES FOR DESIGN AND DEVELOPMENT
OF THE PROPOSED IMPROVEMENTS HAS BEEN SECURED.
BACKGROUND
On October 17, 2007, the Mayor and City Commission approved the issuance of Request for Proposals
No. 02 -07/08 to establish a Cultural Arts Themed and /or Other Passive Recreational Activities Program
in Altos Del Mar Park, located on Collins Avenue, between 76th and 77th Streets (the RFP). On July 16,
2008, the Mayor and City Commission accepted the recommendation of the City Manager and
authorized the Administration to enter into negotiations with the successful proposer, Altos Del Mar
Sculpture Park, Inc, a not - for - profit Florida corporation (ADMSP). The Administration negotiated a
Management Agreement with ADMSP whereby IT would design, develop, operate and maintain a
sculpture park within a portion of Altos Del Mar Park (to be known as the Altos Del Mar Sculpture Park),
in accordance with its response to the RFP. On June 3, 2009, the City Commission adopted Resolution
No. 2009 - 27100, which approved and authorized the Mayor and City Clerk to execute the Management
Agreement with ADMSP. The Agreement has an initial term of ten (10) years, with two (2) additional five
(5) year renewal options, at the City's sole and absolute discretion. The initial term of the Agreement
commenced on June 3, 2009, and expires on June 3, 2019.
ADMSP would be responsible for all costs associated with design, development, construction, operation,
and maintenance of the Sculpture Park including, without limitation, construction of all Proposed
Improvements. ADMSP retained the services of ArquitectonicaGEO to create the proposed Sculpture
Park Design. ADMSP confirmed that a capital investment of $2.5 million is needed upfront, and $1.7
million is needed for operating costs yearly. Under the terms of the Agreement, ADMSP would be
responsible for all ongoing maintenance of the Sculpture Park, including the Proposed Improvements. It
would also be responsible for operation and management of the Park for its intended purposes. ADMSP
is currently still meeting with potential sponsors /donors to fund these expenses.
On April 14, 2010, the City Commission approved Amendment No. 1 of the Management Agreement
pursuant to Resolution No. 2010 - 27371. The Amendment defined the "Possession Date," and further
provided that ADMSP's obligations under the Agreement with respect to maintenance and general
liability coverage would not commence until such Possession Date.
Altos Del Mar Sculpture Park
July 13, 2011
Page 2 of 3
On March 5, 2011, the City received a letter from ADMSP (See attached Exhibit A), advising the City that
it would not be able to obtain a Full Building Permit for the Proposed Improvements by May 13, 2011, as
currently stipulated in the Agreement. The letter requests that the deadline within which to pull a Full
Building Permit be extended to February 13, 2012, and provides an explanation for the request.
Subsequently, on May 4, 2011, ADMSP submitted another letter (Exhibit B) explaining in more detail the
reason for the extension request. The letter also amends the original request within which to obtain a
Full Building Permit to March 31, 2012.
The Neighborhoods and Community Affairs Committee considered ADMSP's request at its May 5, 2011,
meeting. ADMSP explained that the architectural and engineering (A/E) services for this project were
originally to be provided pro -bono but, due to the economic recession, it has been unable to secure
these services pro -bono. ADMSP stated that it is now in a position to raise $120,000 to pay for the A/E
services, but is in need of additional time to secure these funds and obtain a Full Building Permit. The
Committee unanimously recommended in favor of the extension until March 31, 2012, and also
recommended that ADMSP provide the City with proof that they have obtained sufficient funds to pay for
the A/E services by the September Commission meeting. As such, the Administration has included the
September 14, 2011 Commission meeting as a deadline for ADMSP to provide proof of funding to the
City for the A/E services.
This item was presented to the Mayor and City Commission at its regularly scheduled meeting on June
1, 2011. The Administration was directed to bring this item back to the July 13, 2011, City Commission
meeting with the following amendments:
1. A general release by ADMSP waiving any defenses or claims against the City;
2. Further defining the "necessary funding" for the A/E services required by ADMSP to design and
develop the Proposed Improvements as requiring a minimum amount of $120,000 (see Section
9.7.8.1 of the Amendment);
3. Add language that ADMSP's evidence of funding for the Proposed Improvement must be verified by
the City's Chief Financial Officer, and further defining the type of evidence required; and
4. Include (in the Recitals) as acknowledgement by ADMSP that, failing to obtain the City's consent to
ADMSP's request for extension of time to obtain its final Full Building Permit, as contained in and
subject to the terms of the proposed Amendment, ADMSP will be in Default under the Agreement.
Please refer to Attachment A ( "Amendment No. 2 to the Management Agreement Between the City of
Miami Beach and Altos Del Mar Sculpture Park, Inc. for the Operation of a Sculpture Park in Altos del
Mar Park pursuant to Request for Proposals No. 02/07 -08 ").
ADMSP CORRESPONDENCE
Staff contacted ADMSP to discuss the direction given to staff at the June 1, 2011 Commission Meeting,
and provided a draft of the proposed Amendment. On June 30, 2011, the City received correspondence
from Peter Saile, Board Member of ADMSP, Inc., who provided ADMSP's comments to the attached
Amendment No. 2 to the Management Agreement between the City and ADMSP (Attachment B). In
summary, ADMSP:
• Does not want to include language acknowledging that ADMSP would be in default of the
Management Agreement if we did not agree to the extension.
• Does not want to be required to provide a sworn statement certifying that, under penalty of
perjury, they have obtained the necessary funding for the required A/E services.
• Does not want to be required to have funds raised for A/E to be deposited in a separate account
be used solely and exclusively for the deposit and /or withdrawal of funds for the payment of the
required A/E services.
Altos Del Mar Sculpture Park
July 13, 2011
Page 3 of 3
• Wants to delete the City's right to review bank statements, financial statements and /or other
records of ADMSP at any time and is, instead, proposing language that gives the City the right to
request a statement from ADMSP's accountant.
Staff contacted Mr. Saile on July 1 and again on July 6 to discuss their comments. ADMSP
conceptually agrees to providing proof they have obtained the necessary funds for the A/E services, but
does not agree to providing the City with sworn affidavits. They believe they are being treated unfairly by
9 9
the City.
Based the June 1, 2011 direction from the City Commission, the City Attorney's Office drafted the
attached Amendment No. 2 to the Management Agreement for your review and consideration. However,
as noted, at this time ADMSP has not agreed to all of the proposed changes. They will be attending the
Commission meeting to speak on their concerns.
CONCLUSION
Pursuant to the direction of the Neighborhoods and Community Affairs Committee on May 5, 2011, and
to subsequent direction from the Mayor and Commission at the June 1, 2011 Commission meeting, the
City Attorney's Office has worked with staff to develop the attached, proposed Amendment to the
Management Agreement between the City and Altos Del Mar Sculpture Park, Inc. This proposed
Amendment incorporates the requirements of ADMSP in response to their request for an extension of the
deadline for ADMSP to obtain the full building permits, including a September 14, 2011 deadline for
ADMSP to provide proof of funding for A/E services. As ADMSP has indicated that they are not in
agreement with the language in the proposed Amendment, direction from the City Commission is
requested.
Attachments
T \AGENDA\2011 \7 -13 -11 \ADMSP Mgmt Agmnt Amendment 2 Memo.doc RTF
ATTACHMENT B
PETER SAILE
Chairman of the Board of Directors
ALTOS DEL MAR SCULPTURE PARK, INC.
a Florida not - for - profit Public Charity
East of Collins Ave. between 76 and 77 Streets, Miami Beach
Phone 786-290-7109
peter@altosdelmarsculpturepark.com
www .altosdelmarsculpturepark.com
www.admsp.com
ADMSP, 7701 Collins Avenue, Miami Beach, FL 33141
City Manager of Miami Beach
Mr. Jorge M. Gonzalez
City Hall
1700 Convention Center
Miami Beach, FL 33139
March 05, 2011
Altos Del Mar Sculpture Park - management agreement
Dear City Manager,
Reference is made to the management agreement between the City of Miami Beach and
Altos del Mar Sculpture Park ('ADMSP') dated June 18, 2009. We are pleased that
ADMSP has observed all benchmarks in a timely manner to date. However, we are now
forced to request a first extension of time (from May 13, 2011 to February 13, 2012) to
meet the upcoming building - permit benchmark. We are expecting a construction period
of nine months, so we would expect that, even with this revised schedule, we should be
able to open the Altos Del Mar Sculpture Park to the public on December 9, 2012.
Reasons for the Extension
ADMSP has not yet applied for our building permit because the engineering has not
been completed and parts of the architectural planning needs to be finalized. ADMSP
has been faced with delays by previously- committed and, therefore, expected pro bono
planning services which, due to the economic slow -down, are no longer available. Our
architect and coordinator of all technical planning jobs, Les Beilinson, has informed us
that an amount of $115,779.52 needs to be made available, so that the engineering
plans for the building - permit application can be completed (see attached e-mail from Les
Beilinson). Therefore, ADMSP needs the additional time to now raise this amount, since
the engineers cannot do the service pro bono at this time. ADMSP expects to come up
with this previously- unexpected capital requirement latest by May 15, 2011. The raising
of this capital is being handled by the professional public charity developer, Ms. Karen
Kintner. Once the capital is in place, it will take a maximum of three months to finalize
the building - permit application and approximately another six months to obtain the
permits. We trust that our engineers may be a little faster than three months to finalize
the otherwise -well- advanced plans.
Construction Funding
In the past month, ADMSP has explored the possibility of obtaining the unexpected
required funding for the engineering from our expected donors for the construction
funding. However, the facilitators for the construction funding of $5 million, Lennox
Securities, Inc., and American Trust (Switzerland), Inc., have advised us not to request
engineering costs from our potential construction funding sponsors, since this would
mean changing our ongoing application process for construction funding, which calls for
construction funding within four weeks from the date of obtaining the building permit.
Among our intended corporate sponsors for construction funding are companies such as
Verizon, Coca Cola, Adidas, Arttrust Invest, Wilmington Trust, CMI, BMW and
Mercedes.
We would appreciate your decision in favor of this first request by ADMSP for an
extension of time .Should you have any question, I am always available to you. I thank
you for your cooperation, and can assure you that we will realize ADMSP as planned.
I am sorry that our development is currently slower than expected, but we, as many
others, were not immune to the economic slow -down and the taxation benefit changes in
regards to donations, both of which we have experienced since we signed the
management agreement.
We are well on our way and are excited to develop ADMSP as planned.
Best regards,
Pete t'' Sc&..e,
Peter Saile
From: Les Beilinson [ mailto :Idb @beilinsonarchitectspa.com]
Sent: Monday, January 17, 2011 2:49 PM
To: 'Peter Saile'; 'Peter Saile'
Subject: RE: Necessary Costs to do the building eprmit application
Peter:
In response to your email below. The minimum fee in order to proceed would be:
Professional fee earned to
date: $76,500.00
Unpaid reimbursable expenses invoiced to date:
579,52
Retainers for structural, mechanical, civil, electrical, plumbing engineers, lighting designer,
coastal engineer: $38,700.00
Total: $115,779.52
Please let me know your schedule.
BE 1L 1 NSONI
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mammommwoommair
LES 0 BEILINSON A2A
LEE() AP
8101 BISCAYNE &', O7 STE 309310
MIAMI FLORIDA 331384864
305 559 1250 / 305 551 1140 FAX
BEIl1NSONARCMITECTSPA COM
AA C00182
www.beilinsonarchitectspa.com
Idbebeilinsonarchitectspa..com
PETER SAILE
Chairman of the Board of Directors
ALTOS DEL MAR SCULPTURE PARK, INC.
a Florida not - for - profit Public Charity
7701 Collins Avenue, Miami Beach, FL 33141
Phone 786 - 290 -7109
peter@altosdelmarsculpturepark.com
www .altosdelmarsculpturepark.com
www.admsp.com
Neighborhood /Community Affairs Committee
City of Miami Beach
Members:
Commissioner Jerry Libbin
Commissioner Edward L. Tobin
Commissioner Deede Weithorn
Alternate:
Commissioner Michael Gongora
Liaison:
Barbara Hawayek
City Hall
1700 Convention Center
Miami Beach, FL 33139
May 04, 2011
Altos Del Mar Sculpture Park ('ADMSP')
Request for extension of our building permit benchmark of May 13, 2011
Dear Commissioners Libbin, Tobin, Weithorn and Gongora,
Dear Ms. Hawayek,
Due to my absence from Miami Beach, I apologize that I am not able to join you at your
for ADMSP important committee meeting on May 05, 2010. I very much regret this, but I
was unable to change the dates of two related meetings on May 06, 2011 in London and
May 07, 2011 in Berlin.
ADMSP's representatives on May 05, 2011
ADMSP will be represented by its CEO, Marlene Saile, Esq. and its General Counsel,
Isaac Jaroslawicz, Esq.
1/6
Initial(s).. .
Requested extension time
We are requesting an extension for the building permit benchmark from the City of Miami
Beach from May 13, 2011 to February 13, 2012.
It is important to know that this is our first extension request. That far, we have observed
all benchmarks in a timely manner. The extension to February 13, 2012 will still enable
us to open the Altos Del Mar Sculpture Park to the public on December 9, 2012, which
would be one year before the contractually agreed upon latest opening date.
Reasons for the Extension
ADMSP has not yet applied for the building permit due to the fact that the engineering
has not been completed and parts of the architectural planning needs to be finalized,
which will take approximately two months from the time of pre- paying these services.
Because of this, we cannot come up with the building permit by May 13, 2011.
ADMSP expected committed pro bono engineering planning services, which, due to the
economic slow -down are no longer available on a pro bono base to us. We now have to
replace the expected pro -bono services with pre paid services for which we are currently
raising US$ 120,000. ADMSP was not prepared for the replacement of pro bono
services with fully paid services. That far, we have been fully concentrated on the
funding negotiations for the construction costs and the following operations capital costs.
Since we have presented to our potential sponsorship sources that we need their funds
exclusively for construction costs and that we will need them not before we have
received the building permit from the City of Miami Beach, we decided not to approach
them with the request to finance the additional engineering costs too. We followed an
advice of our main brokers/facilitators for the construction funding of $5 million, Lennox
Securities, Inc., and American Trust (CH) Inc. They advised us not to request
engineering costs from our potential construction funding sponsors, since this would
mean changing our ongoing application process for construction funding, which calls for
construction funding within four weeks from the date of obtaining the building permit..
We believe that a change in our already ongoing construction funding negotiations would
have worked against us regarding the solicitation of the large construction capital
sponsorship for $ 5 million.
Therefore, ADMSP had to look for other sources to secure the additional engineering
costs and is currently in the process of raising the not expected cash for the engineering
and funds for other sponsorship projects from Verizon, which we newly approached
2/6
Initial(s)..
4
without limitation on construction funding in April of 2011. ADMSP is in good hopes that
Verizon may come up with a donation for the engineering planning costs in the second
half of May, 2011. The Verizon proposal is being managed and presented to Verizon by
our director, Stevie Jackman, who, after thirty years of executive service at the Verizon
headquarters in New York, is now working as a facilitator of art sponsorship programs.
Stevie Jackman knows the ins and outs at Verizon's headquarters. The ADMSP
sponsorship proposal is currently for consideration on the desk of Verizon's CEO, Ivan
Seidenberg, 140 West Street 29 Flr., New York, NY 10007
All corporate departments involved in the decision making process have been addressed
as follows:
Community Relations
140 West Street
New York, NY 10007
The Verizon Foundation
140 West Street 16 Fir
New York, NY 10007
Attn: Ms. Thalia Green
The Presidents Help Line
140 West Street 23 Fir
New York, NY 10007
Investor Relations
1 Verizon Way
Basking Ridge, NJ 07920 -1025
Lowell McAdam
1 Verizon Way
Basking Ridge, NJ 07920 -1025
Solicitation of individual donors
Additionally, we are now also soliciting individual donors. The raising of this capital is
3/6
Initial(s)..
being handled by our director of development, Julie Miro, in conjunction with the
professional public charity developer, Ms. Karen Kintner.
Finalization of engineering plans
Once the capital for the engineering costs is in place, we trust that our engineers may be
able to finalize the plans in two to three months.
Funding in General
Immediately after signing the management agreement in June of 2009, the donation
capital market started to weaken and individual donors started to carefully weigh how
much and to whom to provide donations. Health related public charities, water
sponsoring programs, crime prevention programs and pure social service programs
became the main beneficiaries of the majorly reduced amount of available yearly
donations. Additionally, the new federal US administration cut several benefits for donors
of public chanties which, additionally to the lesser available donation capital, made it
much less unattractive to donate money.
The market changed so much that seasoned donation developers requested a larger
part of their income as fixed costs and a smaller part as success dependent
commissions. Prior to the change of the market it was the other way around, the major
income came from commissions. E.g., Arthur Hernandez, a man who has been in the
forefront of major sponsorship successes in Greater Miami, among other projects, he
was a part of the Adrienne Arsht staff, would have only been able to solicit individual
donors for us if ADMSP would have carried a substantial part of his operational costs,
since the period of closing a sponsor had become substantially longer than in previously
better times. Since this all happened after the signing of our agreement with the City, we
did not have the financial means yet to finance such substantial costs.
Construction Funding
ADMSP realized in the last quarter of 2009 that it would be better to work with large
institutional and corporate sponsors, which have different reasons than individual donors
to sponsor public charities such as:
+ Social Impact on Miami Beach's North Beach
4!6 Initial(s)..
+ Rights to use the ADMSP logo and marks in local advertising and
marketing programs
+ Naming rights to the different project parts
+ Official partner status of ADMSP
+ Comprehensive Marketing Campaigns utilizing ADMSP media, park
branding opportunities, promotional assets and hospitality.
We started our new institutional solicitation with the Knights of Malta, got early on a
conditional commitment for the full funding of construction costs and operations costs
due to our expected major social impact on Miami Beach's North Beach. Unfortunately,
the representative for this program, Konstantine Skandalis, experienced internal
problems and retired from the KOA and unfortunately, with the retirement of the KOA
official, the entire funding program for ADMSP ended in June of 2010
After this experience, ADMSP represented by me teamed up with professional
investment bankers specialized in large funding projects and through them we got well
developing contacts to important companies in different business areas. We feel
confident that we will get the funding for the construction, operations and the planned
endowment from one of the following sponsors.
Among our intended corporate sponsors for the $ 5 million construction funding are
companies such as Verizon, Coca Cola, Adidas, Arttrust Invest, Wilmington Trust, CMI,
BMW and Mercedes.
Our public image
ADMSP has developed into a respected and well organized community project with
many volunteers, with thousands of members from Florida, other US States and from
other countries at www.admsp.com and people who provided and provide pro bono
services. This team, our board of directors and 1 appreciate your decision in favor of this
first request by ADMSP for an extension of time.
The extension is needed
The extension request to February 13 is tightly calculated by our experts and represents
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Initial(s)..
the minimum extra time we need. In my extension request to the City Manager I
observed the new schedule calculated by our planning experts.
However, 1 would appreciate it, if you would consider to provide ADMSP with an
extension time for the building permit benchmark to March 31, 2012, if you deem
this to be acceptable.
I am asking this due to the new information I have received since I sent my request to
the City manager that the State building permit application period may take substantially
longer than the City building permit application. I want to make sure that ADMSP does
not become part of the group of other Miami Beach projects which have gotten multiple
extensions in the past. That's why a little bit more time will help.
Outlook
Should you have any question, I am always available to you upon my return from Europe
on May 12, 2011 and any time through my internationally working voice mail system at
305 -468 -6168 or under my EU direct phone line at 011 -49- 174 - 275 -2389.
I thank you for your understanding and cooperation. I assure you that my team and I will
do our absolutely best to develop and open ADMSP as planned.
At the end I want to express that 1 am sorry that our development at ADMSP is currently
slower than expected, but we, as many others, were not immune to the economic slow-
down and the taxation benefit changes in regards to donations, both of which we have
experienced since we signed the management agreement.
We are well on our way and are excited to open ADMSP almost one year earlier than
the agreed upon latest opening date in 2013.
Thank you for your attention and cooperation.
Be: - .ard- ,
.1/1 . L., w
Peter Saile
Chairman of ADMSP
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