LTC 195-2012 Log Cabin Nursery m MIAMI BEACH
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OFFICE OF THE CITY MANAGER" V
NO.; 195 -2012 j 2012 JUL 30 PM 2: 09.
LETTER TO CONWISS16NV'5 O ff ICE
TO: Mayor Matti H. Bower and Members of the City Commission
FROM: Kathie G. Brooks, Interim City Manager /�c 4;�/
DATE: July 17, 2012
SUBJECT: LOG CABIN NURSERY
The purpose of this Letter to the Commission (LTC) is to inform the Mayor and City Commission
of the status of the tenancy of the Log Cabin Training Center, operated on City -owned land by
Sunrise Community, Inc., at 8128 Collins Avenue, and to provide some background and history
on the tenancy. The current Lease Agreement commenced on August 1, 2006 for an initial three
year term with two additional options for three years each, at the sole discretion of the City
Manager. The first option was exercised in 2009 and expires on July 31, 2012. When the tenant
requested to exercise the second option, a default condition existed but has since been
remedied. The Administration is processing approval of the renewal option for the final available
term through July 31, 2015.
BACKGROUND
The City established and maintained the Log Cabin Training Center from 1975 through 2005 as a
service designed to provide vocational training and support for developmentally disabled adults.
The Log Cabin Training Center housed three programs: Adult Day Training (ADT), Supported
Employment (SE), and Supported Independent Living (SIL). A separate entity and facility, the
adjacent Log Cabin Nursery, served as a sheltered work site to provide employment to the clients
of the training center. In this way, the clients were able to implement the training they'were
receiving in the same proximity.
In 2005, after issuing a Request for Proposals (RFP) for an entity to assume the administration
and management of the Log Cabin Training Center and its various programs, the City ultimately
entered into a Lease Agreement with Sunrise Community, Inc. ( "Sunrise ") for the scope of
services requested in the RFP and included specific language to ensure that existing
programming and services .remained consistent. The Lease with Sunrise for the Log Cabin
Training Center commenced on September 1, 2005 and was expected to expire July 31, 2009.
However, on July 1, 2007, Log Cabin merged with Sunrise. The Log Cabin Board of Directors
were absorbed by Sunrise, but remained the governing authority over the nursery's sheltered
work program in order to sustain the independence of client and provider.
On April 22, 2009 the City Commission approved Amendment No. 1 to Lease Agreement which
granted a renewal term and further amended the Lease to include the training center (formerly
part of a separate lease with Sunrise), increase the base rent, and expand the use and
possession of the premises to include the classroom building and 500 square feet of land in the
demised premises. This first renewal term is for a period of three years commencing August 1,
2009 and expiring July 31, 2012. As mentioned above, the Lease contains one remaining
renewal term for three years at the sole discretion of the City Manager.
However, on or about May 9, 2011, Log Cabin submitted a hand - written note advising the City i
that, due to reductions in State funding, it would have to cease operations on June 30, 2011.
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Log Cabin Nursery LTC
July 17, 2012
Page 2 of 3
Furthermore, Log Cabin indicated it would send a formal letter to the City requesting early
termination of the Lease Agreement.
On June 21, 2011, Log Cabin submitted a letter to the City withdrawing its request for early
termination. Additionally, on June 21, 2011, Log Cabin submitted a Letter of Intent to the City
detailing a proposed recovery plan including a partnership with a for - profit landscaping related
company for the management of the nursery operations.
On June 28, 2011, staff met with representatives of Log Cabin to discuss the proposed recovery
plan. Staff advised Log Cabin that subleases and /or assignments, as well as for - profit
operations, were prohibited under the Lease Agreement due to the requirements stipulated in the
RFP. Staff further stressed that the tenant could not use the site for purposes other than those
included in its response to the RFP.
Notwithstanding the fact that the Log Cabin was informed that a sublease or assignment to a for -
profit entity was not permitted, on March 22, 2012, Log Cabin provided the City with an
agreement between Log Cabin and A1A Sod, Sand & Soil, Inc. ( "AIIK), which had been dated
August 2011, and was entitled "Agreement ". This Agreement stated that Al would operate the
nursery at the Log Cabin Nursery and that all revenues from products supplied by A1A would be
the sole and exclusive property of A1A. Furthermore, the document stated that A1A would pay
specified utility costs to Log Cabin as well as specified payments for labor provided by Log Cabin
as part of its Supported Employment program. All profits earned after the aforementioned
operational costs would be kept by Al A.
On April 2, 2012, in accordance with the Lease Agreement, Log Cabin requested that the City
agree to the second (and final) renewal term for an additional period of three (3) years
commencing August 1, 2012 and expiring July 31, 2015.
On May 7, 2012, staff met with representatives of Log Cabin to discuss the Agreement with A1A
as well as the services currently being provided by Log Cabin. The City advised Log Cabin that
the Agreement with Al was not acceptable to the City.
On May 14, 2012, the City sent a Notice of Default to Log Cabin explaining that its agreement
with A1A is a violation of the Lease Agreement, as is its failure to comply with the Supported
Independent Living program which requires that a minimum of five clients are served. The City
instructed Log Cabin to take the appropriate measures to cure these defaults within 30 days.
Furthermore, in light of the default conditions, on May 14, 2012, the City sent a Notice of Non -
Renewal to Log Cabin advising the tenant that the City would not renew the Lease Agreement.
On May 18, 2012, Log Cabin provided the City with a proposed Consignment Agreement
between Log Cabin and A1A which purported to replace the previous, disallowed Agreement with
A1A. On June 6, 2012, the City sent a letter to Log Cabin advising them that the proposed
Consignment Agreement is not acceptable to the City as a cure for the default of the Lease and i
that Log Cabin had failed to provide evidence that the second condition of default, whereby they
are not serving at least five (5) clients in their Supported Independent Living program, had been
cured. Furthermore, the City advised Log Cabin that the Notice of Default dated May 14, 2012
remained in full force and effect and that they had until June 15, 2012 to cure the aforementioned
defaults.
On June 14, 2012, Log Cabin delivered a letter to the City advising that it had cancelled the
Agreement with A1A. Log Cabin also advised the City that it is currently supporting twenty -three
people in the Supported Independent Living program. Furthermore, Log Cabin requested, in light
of the fact that it had taken the necessary steps to cure the defaults cited in the City's Notice of
Default, that the City grant a renewal of the Lease Agreement.
On June 27, 2012, City staff inspected the Log Cabin with representatives of Log Cabin site and
verified that A1A Sod, Sand & Soil, Inc. had ceased operations and vacated the property.
Log Cabin Nursery LTC
July 17, 2012
Page 3 of 3
On July 16, 2012, the City mailed an "Amendment No. 2 to the Lease Agreement" to Log Cabin
granting the second (and final) renewal term for a period of three years commencing August 1,
2012 and expiring July 31, 2015. This Amendment No. 2 is expected to be acknowledged by the
tenant and then, finally, by me by July 31, 2012.
JMG \HMF\AP \MM
F:IRHCDI$ALLIECOM$ALLOSSETILog CabinlLog Cabin Enterprises - LTC (7- 16- 12).docx
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