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2011-27778 Reso RESOLUTION NO. 2011 -27778 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING AND AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT BETWEEN THE CITY OF MIAMI BEACH AND STRATEGIC ADVISORY GROUP (SAG) FOR CONSULTING SERVICES RELATIVE TO THE EXPANSION AND ENHANCEMENT OF THE MIAMI BEACH CONVENTION CENTER CAMPUS /DISTRICT, PURSUANT TO REQUEST FOR PROPOSALS (RFP) NO 33- 10/11, IN AN AMOUNT NOT TO EXCEED $175,000, INCLUDING ALL REIMBURSABLE EXPENSES. WHEREAS, on March 9, 2011, the Mayor and City Commission adopted Resolution No. 2011- 27620, which endorsed and supported, in concept, a project to renovate and expand the Miami Beach Convention Center, including an adjacent Convention Center hotel (the Project); and WHEREAS, the City Commission also authorized the City Manager to pursue private sector interest in the Project, including potential joint development alternatives, without being constrained by current zoning limitations for the site or by the current conceptual design; and WHEREAS, at its March 9, 2011 meeting, the Mayor and City Commission authorized the Administration to issue Request for Proposals No. 33 -10/11 for Consulting Services Relative to the Expansion and Enhancement of the Miami Beach Convention Center (MBCC) Campus /District (the RFP); and WHEREAS, on September 14, 2011, the City Commission passed Resolution No. 2011- 27738, authorizing the City Manager to negotiation with Strategic Advisory Group, as the recommended proposer pursuant to the RFP; and WHEREAS, the Administration negotiated a Professional Services Agreement with Strategic Advisory Group for consulting services relative to the expansion and enhancement of the Miami Beach Convention Center Campus /District; the Agreement is attached and incorporated as Exhibit "A" hereto. NOW, THEREFORE, BE IT 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 an Agreement between the City and Strategic Advisory Group (SAG) for consulting services relative to the expansion and enhancement of the Miami Beach Convention Center Campus /District, pursuant to Request For Proposals (RFP) No 33- 10/11, in an amount not to exceed $175,000, including all reimbursable expenses. PASSED AND ADOPTED THIS I ‘7'II DAY OF 0C4 2011. ATTEST: ,'1 j__ CITY CLERK /NC �A �.�� R . r r r • • AS TO ORP D R ATED, �t % FORM & LANGUAGE & FOR EXECUTION H 26 �/ ��' ttorney Da J Condensed Title: A Resolution approving and authorizing the mayor and city clerk to execute an agreement between the City and Strategic Advisory Group (SAG) for consulting services relative to the expansion and enhancement of the Miami Beach Convention Center campus /district, pursuant to RFP No 33 - 10/11 in an amount not to exceed $175,000, including all reimbursable expenses. Key Intended Outcome Supported: Improve the Convention Center Facility Supporting Data (Surveys, Environmental Scan, etc.): The 2009 Community Satisfaction Survey indicated that residents attended events at the convention center 2.7 times per year. Issue: Shall the Mayor and City Commission adopt the Resolution? Item Summary /Recommendation: At its March 9, 2011 meeting, the Mayor and City Commission authorized the Administration to issue a Request for Proposals (RFP) for Consulting Services Relative to the Expansion and Enhancement of the Miami Beach Convention Center (MBCC) Campus /District. Request for Proposals (RFP) No. 33 -10/11 was issued on May 24, 2011, and notices sent to over 67 firms, including a list of 21 firms provided by the Tourism and Cultural Arts and Development Department, and more than 30 firms that are members of the International Economic Development Council. After considering the review and recommendation of the Evaluation Committee, the City Manager exercised his due diligence by reviewing all the proposals and supporting documentation, and conducted question and answer sessions with the top three (3) firms' key personnel. Although all three (3) firms demonstrated excellent experience and qualifications, Strategic Advisory Group (SAG) was deemed the most qualified firm based on the vast experience as detailed in the attached Commission Memorandum. On September 14, 2011, via Resolution No. 2011 - 27738, the City Commission authorized the City Manager to negotiate with Strategic Advisory Group. A copy of the Professional Services Agreement is attached for your review. ADOPT THE RESOLUTION. Advisory Board Recommendation: On September 14, 2011, via Resolution No. 2011 - 27738, the City Commission authorized the City Manager to negotiate with Strategic Advisory Group Financial Information: Source of F nds: Amount Account Approved 1 175,000 City Center RDA 168- 1985- 000312 OBPI Total Financial Impact Summary: City Clerk's Office Legislative Tracking: Max Sklar, Ext. 6116 Sign - Offs: Departm nt Director As ant City Manager City M nager MS //Pr `. H JMG jT' END 011110- 19- 111SAG Consulta MBCC Summ.docx M I A .M AGENDA ITE 11 DATE /0 —0-0 - MIAMIBEACH 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 Com • sion FROM: Jorge M. Gonzalez, City Manager DATE: October 19, 2011 SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING AND AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT BETWEEN THE CITY OF MIAMI BEACH AND STRATEGIC ADVISORY GROUP (SAG) FOR CONSULTING SERVICES RELATIVE TO THE EXPANSION AND ENHANCEMENT OF THE MIAMI BEACH CONVENTION CENTER CAMPUS /DISTRICT, PURSUANT TO REQUEST FOR PROPOSALS (RFP) NO 33 -10/11 IN AN AMOUNT NOT TO EXCEED $175,000, INCLUDING ALL REIMBURSABLE EXPENSES. ADMINISTRATION RECOMMENDATION Adopt the Resolution. FUNDING Funds are available in the City Center Redevelopment Agency Account Number 168 - 1985- 000312. BACKGROUND Discussions regarding enhancements to the Miami Beach Convention Center (MBCC or the Convention Center) have been ongoing for almost ten years, dating back to an October 2001 report from Convention Sports & Leisure (CSL) commissioned by the Greater Miami Convention and Visitors Bureau (GMCVB), in partnership with the City, which analyzed the status of convention and meeting facilities in Miami -Dade County, as well the competitive standing of these facilities. The CSL report concluded that, given the MBCC's geographic draw, no new facility should be planned elsewhere in Miami -Dade County but, instead, improvements to MBCC (including a multi - purpose general assembly /banquet hall) should be made to increase the marketability of the Convention Center and of the region. In 2004, the Building Better Communities General Obligation Bonds Program was approved Countywide, and included a total of $55 million for Convention Center enhancement and expansion. The availability of this funding prompted further discussion among interested stakeholders (e.g. representatives of the Convention Center Advisory Board, the Miami Beach Visitors and Convention Authority, the GMCVB, the Greater Miami and the Beaches Hotel Association, Miami -Dade County, the Convention Center managers [SMG and now Global Spectrum] and City staff) and subsequent updates to the CSL report. As a result, at the April 11, 2007 City Commission Meeting, the City Commission passed a motion supporting a proposed MBCC expansion (to include a ballroom, retrofit of space to accommodate new meeting rooms, and renovations to the northwest ballroom to create a "junior ballroom "), subject to the County funding all costs associated with the project, and the County managing the renovations/ construction process. In April 2008, a new plan of action was agreed upon between the City and County that would have the City and County, in conjunction with interested stakeholders, develop a long -term vision and Master Plan for this regional convention center. This Master Plan was intended to look "outside of the box" at r Consultant Services Re Expansion and Enhancement of MBCC Campus /District Strategic Advisory Group (SAG) October 19, 2011 Page 2 of 6 possibilities to make MBCC competitive in today's convention and meeting business climate. This would involve looking at existing and potential site amenities, physical renovations to the interior and exterior, expansion of exhibit space (to include necessary multi - purpose /ballroom space), technology upgrades, parking, etc. MASTER PLAN PROCESS Needs Assessment As part of the Master Plan development process, the GMCVB contracted with CSL to conduct a new study focused on, among other things: identifying current industry trends; competitive /comparable facility analysis; ys s, existing and projected utilization at the Convention Center; and a market demand analysis. CSL would also work jointly with a selected architectural firm, and with the stakeholders, in developing a proposed Master Plan that would incorporate research - driven improvements focused on making the Convention Center competitive and marketable. The CSL report identified the following needs: Multi - Purpose /Ballroom Space; Meeting Space; Unique Features (e.g. outdoor terrace); Destination Planning and Development of a Convention Center District; and Convention Center Headquarters Hotel. A competitive process was issued for the selection of the Master Plan architect to create a vision for the implementation of those needs, and others that might be identified. Arquitectonica was competitively selected as the Master Plan architect. An appointed Steering Committee established nine (9) goals for the Master Plan process. Using the information from the CSL report and input from the Steering Committee, Arquitectonica developed a preliminary Master Plan that recommended several specific enhancements for the facility, including: • Re- orient the entrance of the Convention Center to create a new facade with a main entrance • Add approximately 213,000 square feet of additional exhibit space; a 60,000 square foot multi- purpose ballroom; a 21,600 square foot junior ballroom; an additional 82,000 square feet of meeting rooms; and an approximately 1,500 space parking garage structure. • Add a 100,000- square -foot plaza and add outdoor meeting space (terraces) • Incorporate into the new facility (and update the existing facility with) the latest technologies; • Address "massing" issues with architectural designs that terrace the facility • Add "green" components to the new and existing space (to achieve LEED certification); and • Identify potential locations for an adjacent Convention Center hotel. As importantly, based on City Commission direction, Arquitectonica was to work within existing zoning restrictions for the expansion area. The result was a design that addressed the issues and needs identified by CSL and the Stakeholders, but did so with a design that compensated for the height limitations with a building expansion that had sizeable massing. Master Plan Report The Master Plan and Final Report was presented to the Steering Committee for its review and consideration at its February 4, 2011 meeting; the Steering Committee reviewed and endorsed the Master Plan and the Report. On February 24, 2011, the Finance and Citywide Projects Committee (the Finance Committee) met to consider the Master Plan Report (including the option of a Convention Center hotel). The City Manager, Arquitectonica, CSL and the Washington Economic Group (WEG) presented the Master Plan; research from CSL's 2009 strategic facilities analysis, as well as the result of economic impact findings from CSL and WEG. The Finance Committee recommended to conceptually endorse and in concept support the renovation and expansion of the Miami Beach Convention Center to address the needs identified (multi- use /ballroom space, more meeting rooms, upgrades to technology, outdoor venue, etc), including the development of an adjacent Convention Center Hotel. One of the reasons of the Finance Committee's support of the Plan "in concept" was to ensure that the City still had the flexibility and discretion to evaluate the project and explore options including, in particular, revisiting the massing and the design of the project without the constraint of current zoning restrictions in the project area. Consultant Services Re Expansion and Enhancement of MBCC Campus /District Strategic Advisory Group (SAG) October 19, 2011 Page 3 of 6 The Committee also supported the securing of a Consultant to assist the City in moving forward on the overall project concept. This Consultant is to conceptualize and recommend ideas and options to maximize the City's resources /assets and attract private investments to address identified needs, including but not limited to, the expansion and enhancement of the Convention Center, and the potential development of an adjacent Convention Center Hotel. The Consultant would also assist in identifying potential redevelopment options for public assets in the area surrounding the Convention Center campus to support the Convention Center project, and potential financing options for the development of the project(s) and other development concepts, including but not limited to Public /Private Partnerships (PPP). The Consultant is expected to provide transactional review, including sources of debt and equity, and is expected to identify creative development and financing structures. Any recommended financial plan developed by the Consultant is to detail the assumptions used in the recommended development, and include operating projections that are supported by market research, a financing plan and project schedule. The Consultant will also recommend development approaches and construction management and operation methodologies for the project(s) based on best practices. COMMISSION ACTION On March 9, 2011, consistent with the Finance and Citywide Projects Committee's recommendations, the Mayor and City Commission passed and adopted Resolution No. 2011- 27620, which endorsed and supported in concept the project to renovate and expand the Miami Beach Convention Center, including an adjacent Convention Center hotel, but did not approve the proposed master plan concept design. The Commission also authorized the City Manager to pursue private sector interest in the project, including potential joint development alternatives, without being constrained by current zoning limitations for the site or by the current conceptual design. In light of the economic impact of the project, the City Commission also directed the Administration to explore a broader economic development initiative for the area utilizing the City's assets to generate the greatest private investment, and maximize economic development opportunities in the Convention Center area (e.g. commercial, retail, and other mixed -use opportunities) project. Lastly, the Commission, at its March 9, 2011 meeting, ratified the Finance Committee's recommendation and authorized the City Manager to issue a competitive process to secure any consulting expertise required to assist with the project. During the May 20 -21, 2011, City Commission Retreat, the Commission further discussed and agreed to look at broader development opportunities in this area beyond the Convention Center concept plan, and expressed a desire to find ways to address the impact on traffic, mobility and to the surrounding neighborhoods. There was also a desire to maintain sensitivity for the historic district while maximizing green space. Based on the potential development opportunities (e.g. approximately 6.1 million s.f. of FAR), and the potential expansion project cost, it was again determined that assistance from a Consultant with experience and expertise in similar projects (including similar PPP's) would be beneficial in developing the most effective strategy to solicit the right mixed -use development team for the project, with a goal of ensuring the highest level of private- sector participation, and the best proposed design for the expansion project to address our Convention Center needs. At its March 9, 2011 meeting, the Mayor and City Commission authorized the Administration to issue a Request for Proposals (RFP) for Consulting Services Relative to the Expansion and Enhancement of the Miami Beach Convention Center (MBCC) Campus /District. Request for Proposals (RFP) No. 33 -10/11 was issued on May 24, 2011, and notices sent to over 67 firms, including a list of 21 firms provided by the Tourism and Cultural Arts and Development Department, and more than 30 firms that are members of the International Economic Development Council. The result of the aforementioned outreach was the receipt of seven (7) proposals. An evaluation committee met and evaluated all proposals, and subsequently recommended three firms based on the lowest aggregate score received: HVS Convention, Sports & Entertainment Facilities Consulting; HR & A Advisors, Inc.; and Strategic Advisory Consultant Services Re Expansion and Enhancement of MBCC Campus /District Strategic Advisory Group (SAG) October 19, 2011 Page 4 of 6 Group (SAG). Although all three (3) firms demonstrated excellent experience and qualifications, Strategic Advisory Group (SAG) was deemed the most qualified firm based on their experience with similar projects in Florida and throughout the Country in Convention Center and Convention Center Hotel Development, public private partnerships, capital structuring, tax - exempt asset financing, tax revenue projection and bond offering due diligence. SAG has a broad range of experience in overall transaction management with private sector investment, identifying potential private p ivate artners negotiating Y 9 p p p 9 9 partnerships, executing transactions, monitoring private partner progress, and communicating the project's costs and benefits (economic impact, jobs, taxes, etc.). On September 14, 2011, via Resolution No. 2011 - 27738, the City Commission authorized the City Manager to negotiate with Strategic Advisory Group. STRATEGIC ADVISORY GROUP (SAG) SAG was founded in 1998 by a senior management team executive of Ernst & Young's Consulting Practice and is comprised of professionals with experience ranging from 15 years to over 25 years. This team of experienced industry veterans have come together to help clients realize their potential, while maximizing return on investment and enhancing their competitive advantage. Firm professionals held senior management positions with Ernst & Young, KPMG, Arthur Andersen, Trammell Crow, Opus South, Marriott International and Starwood Capital. Jeff Sachs and Tom Reifert will both be key personnel from SAG assigned to this project. Mr. Sachs is a founding partner of SAG with over 20 years of consultancy experience. Prior to forming SAG, Mr. Sachs held management and practice leadership positions with Ernst & Young and KPMG Peat Marwick. Mr. Sachs received his Master's and Bachelor's Degrees from The University of Iowa. Mr. Reifert's career includes over 18 years of consultancy experience and hotel management experience. Prior to joining SAG, Mr. Reifert held management positions for Marriott International. Mr. Reifert received his Bachelor's degree from Iowa State University. SAG has also provided advisory and development fee services for single asset and mixed -use projects representing nearly $10 billion in value and 30 million square feet. Their partners have experience in fully integrated retail and mixed -use development projects, with expertise in the total commercial development process, ranging from concept creation to closeout and asset management. They have worked as the master developer on a project or in conjunction with a property owner that is in need of specific expertise. Scope of Work A copy of the Professional Services Agreement is attached for your review. Below is a summary of the scope of services to be performed by SAG. 1) Immersion Consultant will meet with the City to review the scope of services, and establish overall project goals. Consultant will also meet with project leadership to conceptualize the development strategy that best meets the objectives and constraints. As part of this process, Consultant will: a) Meet with project leadership b) Tour the convention center c) Tour the site and discuss available sites for development d) Tour surrounding area e) Review the "Needs Assessment and Master Plan" f) Review other information as appropriate 2) Serve as the City's primary advisor /Consultant Consultant will serve as the City's primary advisor /Consultant throughout the engagement. Consultant will: a) Provide project oversight b) Assist the City on how to best maximize the City's assets c) Inform the City on how to potentially generate the maximum private investment Consultant Services Re Expansion and Enhancement of MBCC Campus /District Strategic Advisory Group (SAG) October 19, 2011 Page 5 of 6 d) Update the City on the status of the project e) Facilitate stakeholder meetings with the hotel industry, neighbors and other concerned parties f) Assist the City with the resolution of any issues that may arise as the project progresses required Address other issues as re g) 3 Draft Mixed -Use Developer RFQ Consultant understands the City desires to create funding for convention Y center improvements 9 p by developing the City -owned area surrounding the convention center with commercial uses that create new revenues to the City. These incremental revenues could be used to fund potential convention center improvements and /or provide operating funds. The first step to realize the commercial mixed - use development will be to identify potential development partners through a RFQ process. Information provided in the RFQ will include, but is not limited, to: a) Sales- oriented information on the retail /restaurant, office, for -rent residential, for -sale residential, and hotel markets b) Site information i) Development potential (height restrictions, FAR, maps, aerial photos, etc.) ii) Adjacent land uses iii) Existing building information iv) Others as appropriate c) Minimum program components i) HQ hotel ii) Convention center expansion areas iii) Other d) Submittal requirements i) Experience ii) Financial background iii) Proposed program iv) Master plan concepts v) Absorption /Phasing vi) Cash flow models vii) Land purchase proposal (if any) viii) Tax impacts ix) Sources of debt and equity x) Development/funding commitment xi) Litigation history xii) References xiii) Others as appropriate 4) Short -List Development Teams Once the City has approved the RFQ, Consultant will manage the process to identify short -list candidates. Specifically, Consultant will: a) Identify potential developers /teams on a local, national and international level to contact regarding the project. b) Mail the RFQ to all potential developers /teams identified. Post the opportunity on Internet bid sites and advertise as required under Florida law. c) Conduct follow -up phone calls with key potential developers /teams to make certain they receive and understand the opportunity. d) Be available for site visits as requested. e) Coordinate a pre - proposal meeting to discuss the RFQ and answer any questions potential developers /teams may have. f) Respond to questions related to the RFQ. g) Evaluate the responses to the RFQ, including: providing advice on the process of evaluation and selection, checking proposal references and reviewing the reported success of other projects completed by the proposers. In addition, Consultant will perform due diligence procedures on Consultant Services Re Expansion and Enhancement of MBCC Campus /District Strategic Advisory Group (SAG) October 19, 2011 Page 6 of 6 revenue and expense projections, cost estimates, financing plan, and capital sources. Consultant will summarize, the salient points of each proposal in a matrix. h) Recommend a short -list of candidates to be interviewed. 5) Assist in the Selection of the Development Team a) Consultant will update the comparison matrix to address information learned during the RFQ process. b) Consultant will coordinate the interview process of the short- listed candidates. Consultant will actively participate in the interviews, providing expertise and advice to the City as needed and desired. Consultant will also submit a list if questions that should be asked to each proposer. c) Consultant will assist with the final selection of the developer /team and formulate and provide its recommendations to City Council and any other Council committees and sub - committees as required. 6) Negotiate Contract with Selected Developer /Team Once a development team is selected, Consultant will work with and assist the City and its legal team with negotiations, drafting and finalizing the formal agreements. Consultant will provide advice and consultation throughout the process. Consultant will be available for conference calls, will review and suggest revisions to the legal documents, and will ensure the spirit of the RFQ process is encompassed in the legal documents. 7) Create Convention Center Improvement Financial Plan a) Based on the selected development team proposal, development approach and phasing timeline, Consultant will project the revenues anticipated to be generated from the private development over a 30 -year period. b) Consultant will calculate the bonding capacity of the revenue streams, assuming various credit scenarios. This may include a phased approach with multiple bond issuances over time that utilize revenues to the public sector as each phase of the private development is developed over time. c) Consultant will align the bonding capacity with the needs identified in Step 3. d) Consultant will summarize the convention center improvements and funding plan in a written document and PowerPoint presentation. 8) Ongoing Tasks a) Consultant will provide periodic reports as requested by the City. b) Consultant will assist in other duties as they relate to this engagement and remain available throughout project development to answer questions and provide information and guidance as requested and needed. Fee and Project Timelines Consultant will bill professional fees based on the time spent on the project, multiplied by the hourly billing rates listed in Attachment A, up to an amount not to exceed $175,000, including all reimbursable expenses (e.g. travel, supplies, etc). The project timeline is also attached as Exhibit C to the Agreement (Attachment A). SAG currently anticipates being completed with the scope of services by June, 2012. CONCLUSION The Administration recommends that the Mayor and City Commission adopt the attached Resolution which approves and authorizes the Mayor and City Clerk to execute an agreement between the City and SAG for consulting services relative to the expansion and enhancement of the Miami Beach Convention Center Campus /District, pursuant to Request for Proposals (RFP) No 33 -10/11 in an amount not to exceed $175,000, including all reimbursable expenses. T:\AGENDA \2011 \10 -19 -11 \SAG Consultant MBCC Memo.docx