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598-2013 RDA Reso RESOLUTION NO. 598-2013 A RESOLUTION OF THE CHAIRPERSON AND MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY ADOPTING AND APPROPRIATING THE OPERATING BUDGET FOR THE CITY CENTER REDEVELOPMENT AREA,THE ANCHOR SHOPS AND PARKING GARAGE AND THE PENNSYLVANIA AVENUE SHOPS AND PARKING GARAGE FOR FISCAL YEAR 2013/14 WHEREAS, the proposed City Center Redevelopment Area Budget has been prepared to coincide with the overall City budget process; and WHEREAS, the proposed City Center Redevelopment Area Budget reflects anticipated construction project costs in addition to operating and debt service costs for the fiscal year; and WHEREAS, the proposed budgets for the Anchor Shops and Parking Garage and the Pennsylvania Avenue Shops and Garage have been included as separate schedules to the City Center Redevelopment Area Budget, reflecting projected revenues and operating expenses for the fiscal year; and WHEREAS, the Executive Director recommends approval of the proposed Fiscal Year 2013/14 budgets for the City Center Redevelopment Area, as well as for the Anchor Shops and Parking Garage and the Pennsylvania Avenue Shops and Garage; and NOW,THEREFORE, BE IT DULY RESOLVED BY THE CHAIRPERSON AND MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY,that the Chairperson and Members hereby adopt and appropriates the operating budget for the City Center Redevelopment Area, the Anchor Shops and Parking Garage and the Pennsylvania Avenue Shops and Garage for Fiscal Year 2013/14, as follows: City Center Redevelopment Area $43,000,000 Anchor Garage Parking Operations $3,130,000 Anchor Garage Retail Operations $857,000 Pennsylvania Avenue Garage Parking Operations $961,000 Pennsylvania Avenue Garage Retail Operations $550,000 PASSED AND ADOPTED THIS SEPTEMBER 30TH DAY OF 2013. HAIR RSON ATTEST: �� 'ry l,j .INCORP )ORATE 'Z APPROVED AS TO FORM&LANGUAGE &FOR CUTION SECRETARY �; �f KB:MS: `�--- edev IFr� ent Agen D e T:WGENDA\2013\September 301RDA BUDGET RESO 2013_14dac.doc en I COUf1Sel MIAMI BEACH REDEVELOPMENT AGENCY ITEM SUMMARY Condensed Title: A Resolution of the Chairperson and Members of the Miami Beach Redevelopment Agency adopting and appropriating the operating budgets for the City Center Redevelopment Area, the Anchor Shops and Parking Garage and the Pennsylvania Avenue Shops and Garage for Fiscal Year 2013/14. Key Intended Outcome Supported: Improve the City's overall financial health and maintain overall bond rating Supporting Data(Surveys, Environmental Scan, etc.): One of the City's Key Intended Outcomes is to ensure well designed and well maintained capital projects and infrastructure. In keeping with this goal, approximately 53 percent or$19.5 million of the proposed Budget for City Center is being allocated towards capital expenditures including new capital projects, renewal and replacement,and maintenance of existing RDA capital infrastructure. Item Summa /Recommendation: The proposed budget for the City Center Redevelopment Area for Fiscal Year 2013/14 has been prepared to coincide with the overall City budget process, and is being presented to assist in providing a comprehensive overview of the district. Additionally, the revenues and expenses associated with the operations of the Anchor Shops and Parking Garage as well as the Pennsylvania Avenue Shops and Garage are presented as separate schedules so as to eliminate any perception that proceeds from the Facility's operations are pooled with TIF and other Trust Fund revenues. Based on the 2013 Certification of Taxable Value from the Property Appraiser's Office,the preliminary value of property in City Center is projected to increase by 7.3% over 2012. However, as in previous years, the City has received correspondence from the County, advising of the finalization of the tax roll for the prior year,which in the case of FY 2011/12, reflects a slight decrease from the preliminary valuation for the same year and will result in a corresponding adjustment/reduction in TIF revenues totaling$168,000 for 2013/14 vs$3.5 million for 2012/13. Additional sources of revenue include an estimated$5.4 million in Resort Tax contributions;a'/2 mill levy in the amount of$1.8 million,to be set aside for the Children's Trust pursuant to an Interlocal Agreement, dated August 16,2004 between the RDA,the City of Miami Beach and Miami-Dade County;and an estimated$25,000 in interest income. The proposed FY 2013/14 City Center Redevelopment Area Budget of$43,000,000 is$94,000 less than the proposed budget recommended by the Executive Director on September 11,2011. This decrease is a result of a reduction in the Citywide millage rate of .0275 by the Mayor and Commission at its workshop held September 23, 2013. In order to address the existing and future obligations of the Redevelopment Area, it is recommended that the Redevelopment Agency adopt the attached Resolution which establishes the operating budgets for the City Center Redevelopment Area,the Anchor Shops and Parking Garage and the Pennsylvania Avenue Shops and Garage for FY 2013/14. Advisory Board Recommendation: N.A. Financial Information: Source of Amount Account Funds: 1 $43,000,000 City Center Redevelopment Area Fund 2 $ 3,995,000 Anchor Shops and Parking Garage Operations 3 $ 1,511,000 Pennsylvania Avenue Shops and Garage Operations OBPI Total $48,506,000 Financial Impact Summary: City Clerk's Office Legislative Tracking: Max Sklar, Georgette Daniels and John Woodruff Sign-Offs: RDA Budget Assistant Executive .Qoo qdin otor Director Director RDA Dir�ector RDA M A S J KGB JLM v T: A 1 September 30AWudget 2013_14 SUM.doc V r AGENDA ITEM /AAIAMIBE9-30- � SATE i ® MIAMI BEACH City of Miami Heath, 1700 Convention Center Drive,Miami Beach, Florida 33139,www.miamibeachfl.gov REDEVELOPMENT AGENCY MEMORANDUM TO: Chairperson and Members of the Miami B ach Rede lopment Agency FROM: Jimmy L. Morales, Executive Director DATE: September 30, 2013 SUBJECT: A RESOLUTION OF THE CHAIRPERSO AND MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY, ADOPTING AND APPROPRIATING THE OPERATING BUDGETS FOR THE CITY CENTER REDEVELOPMENT AREA'THE ANCHOR SHOPS AND PARKING GARAGE AND THE PENNSYLVANIA AVENUE SHOPS AND GARAGE FOR FISCAL YEAR 2013/14. ADMINISTRATION RECOMMENDATION Adopt the Resolution. ANALYSIS The proposed budget for the City Center Redevelopment Area(RDA)for Fiscal Year 2013/14 has been prepared to coincide with the overall City budget process, and is being presented today to assist in providing a comprehensive overview of the district. Please refer to Attachment A for the proposed budget details. Revenues Based on the 2013 Certification of Taxable Value from the Property Appraiser's Office, the preliminary value of property in City Center is projected to increase by 7.3%over 2012, marking the third year in a row values have increased; values seem to be back on the rise, following two years of decline. However, as in previous years, the City has received correspondence from the County, advising of the finalization of the tax roll for the prior year,which in the case of FY 2011/12, reflects a slight decrease from the preliminary valuation for the same year and will result in a corresponding adjustment/reduction in TIF revenues totaling $168,000 for 2013/14 versus$3.5 million for 2012/13. Additional sources of revenue include an estimated $5.4 million in Resort Tax contributions;a'/2 mill levy in the amount of$1.8 million, to be set aside for the Children's Trust pursuant to an Interlocal Agreement, dated August 16, 2004 between the RDA, the City of Miami Beach and Miami-Dade County; and an estimated $25,000 in interest income. Expenditures Project-related expenses account for approximately$28 million, which includes $4.2 million to be allocated for community policing initiatives in the City Center to continue providing enhanced levels of staffing and services throughout the area, and $4.9 million.for maintenance of RDA capital September 30, 2013 Redevelopment Agency Memorandum Operating Budget for City Center for FY 2013114 Page 2 of 3 projects. On-going and planned capital projects in the City Center are projected to account for$18.4 million in the FY 2013/14 Budget, and include allocations for construction of the Collins Park Garage, the Bass Museum Interior Expansion and Lincoln Road Master Plan Study. This also includes $1.556 million as a transfer to cover prior capital fund balance deficits. An additional $287,000 is being proposed for capital renewal and replacement projects; including repairs and maintenance to certain City-owned projects and facilities, including the Anchor Garage and Colony Theater. Additionally, $305,000 in transfers to the Pennsylvania Avenue Shops and Garage are budgeted to offset the RDA's costs associated with the retail and parking operations. Administrative Expenses total $2 million, comprising a management fee of $1,043,000 which is allocated to the General Fund to pay for direct and indirect staff support for the RDA; $61,000 for actual operating expenses;approximately$629,000 set aside for on-going planning and consulting work related to the Convention Center expansion master plan; and$25,000 for capital renewal and replacement projects under $25,000. It should be noted that the Management Fee allocation is reflective of actual city resources applied to the operation of the RDA, as supported by the RSM McGladrey Cost Allocation Study, dated July 20,2009. It should further be noted that Administrative and Operating expenses only account for less than four percent(4%)of the total budget, which is well below the 20%threshold level established(and permitted)in the Interlocal Agreement between the City and the County. The current combined debt service on the 2005 Series Bonds and the Parity Bonds accounts for approximately$8.5 million annually. City Center also continues assuming debt service payments on the portion of the Gulf Breeze Loan used to pay for the Bass Museum expansion and renovation, and the portion of the Sunshine State Loan Program used for Lincoln Road improvements, which collectively account for approximately$1.3 million. Reserve line item expenditures include those items that, pursuant to the existing Bond Covenants, may only be expended once the annual debt service obligations have been met.These include the County's administrative fees, equivalent to 1.5% of its respective TIF payment; and the corresponding contribution to the City's General Fund, equivalent to 1.5% of the City's share of its TIF payment; and the remittance of the '/2 mill tax levy back to the Children's Trust. The revenues and expenses associated with operations of the newly opened Pennsylvania Avenue Shops and Garage and the Anchor Shops and Parking Garage are presented as separate schedules in order to eliminate any perception that proceeds from the facilities' operations are pooled with TIF and other Trust Fund revenues: Anchor Shops and Parking Garage Garage revenues at the Anchor Garage are projected at approximately$3.1 million,with operating expenses,(including depreciation, contractual revenue-sharing obligations with Loews and general fund administrative fees), of approximately$2.6 million and reserves of$72,000.The Anchor retail operations is expected to generate $857,000 in revenues, including interest, with operating expenses associated with the retail management contract, related reimbursable expenditures,and depreciation totaling $116,000, as well as projected reserves of$741,000. Pennsylvania Avenue Shops and Garage In consideration of the fact that the Pennsylvania Avenue Shops and Garage was built by the RDA on City-owned property, the operation of the facility has been structured in the form of a ground lease between the City and the RDA, providing terms for both the Garage and Retail operations. September 30, 2013 Redevelopment Agency Memorandum Operating Budget for City Center for FY 2013114 Page 3 of 3 The garage operations include base rent and an administrative fee, consistent with that of the Anchor Garage, Parking's operational fee, and revenue sharing between the City and the RDA.The Retail operations also include base rent and an administrative fee, as well as a retail lease rate based on 2010 retail market cap rates.The retail operations also include revenue sharing between the City and the RDA. Based on estimates of the garage's current-year operating results,and taking into consideration the successful execution of a lease agreement with Penn 17, LLC., for the entire retail space, the facility is anticipated to generate $1,500,000 in revenues in FY 2013/14, comprising $656,000 in parking revenues and $550,000 in retail income. However, since the facility is still anticipated to operate at a loss during FY 2013/14,the RDA plans to subsidize its operations through a transfer of $305,000 to the parking operations. Expenses for the facility are budgeted at $1.5 Million, comprising $900,000 in direct operating costs for the garage and $611,000 in lease term-related obligations. CONCLUSION The proposed FY 2013/14 City Center Redevelopment Area Budget of$43,000,000 is$94,000 less than the proposed budget recommended by the Executive Director on September 11, 2011. This decrease is a result of a reduction in the citywide millage rate of .0275 by the Mayor and Commission at its workshop held September 23, 2013. This millage reduction decreases the TIF revenues paid to the City Center Redevelopment Area by the City of Miami Beach. This reduction in revenues was offset by a reduction in the expenditure line "Reserve for Future Capital Projects." In order to address the existing and future obligations in the Redevelopment Area, it is recommended that the Redevelopment Agency adopt the attached Resolution, which establishes the operating budgets for the City Center Redevelopment Area, the Anchor Shops and Parking Garag and the Pennsylvania Avenue Shops and Garage for FY 2013/14. J LM/K /MS Attachment TAAGENDA\2013\September 30\RDA Budget memo 2013_14.doc Miami Beach Redevelopment Agency City Center Redevelopment Area Proposed FY 2013/14 Operating Budget FY 13/14 Budgeted FY 10/11 FY11112 FY 2012/13 Proposed Variance Actual Actual Adopted Budget From FY 12113 Revenues and Other Sources of Income Tax Increment-City $ 18,377,816 $ 18,337,693 $ 19,188,000 $ 19,934,000 $ 746,000 Proj Adjustment to City Increment (1,475,726) (1,756,457) (1,871,000) (94,000) 1,777,000 Tax Increment-County 16,047,879 14,291,236 14,818,000 15,992,000 1,174,000 Proj Adjustment to County Increment (1,262,384) (1,367,157) (1,636,000) (74,000) 1,562,000 50%Contribution from Resort Tax 4,492,075 4,925,168 4,684,000 5,386,000 702,000 '1/2 Mill Children's Trust Contribution 1,474,830 1,481,004 1,575,000 1,831,000 256,000 Interest Income 9,291 8,278 13,000 25,000 12,000 Fund Balance Reallocation:(Non-TIF) - - - - - Fund Balance Renewal and Replacement - - - - Other Income/Adjustments: - 5,196 - - - TOTAL REVENUES $ 37,663,781 $ 35,924,961 $ 36,771,000 $ 43,000,000 $ 6,229,000 Admin/Operating Expenses Management fee(salaries&benefits) $ 941,524 $ 952,889 $ 976,000 $ 1,043,000 $ 67,000 Salaries and Benefits $59,601 $65,000 155,000 90,000 Advertising&promotion - - - 50,000 50,000 Postage,printing &mailing 81 - 3,000 3,000 - Office supplies&equipment 2,548 2,269 4,000 4,000 - Other Operating 1,000 1,000 Meetings&conferences 12 - 1,000 1,000 - Dues&subscriptions 788 795 2,000 2,000 - Licences&Taxes - Audit fees 20,260 20,260 9,000 21,000 12,000 Professional&related fees 56,031 175,373 241,000 629,000 388,000 Repairs and Maintenance - 31,489 98,000 25,000 (73,000) Miscellaneous expenses 5,000 33,938 47,000 27,000 (20,000) Total Admin/Operating Expenses $ 1,026,244 $ 1,276,614 $ 1,446,000 $ 1,961,000 $ 515,000 Project Expenses Community Policing 168-1124 $ 2,754,374 $ 3,411,726 $ 3,741,000 $ 4,195,000 $ 454,000 Capital Projects Maintenance: - $ - Property Mgmt:168-9964 990,358 1,013,473 $1,143,000 1,176,000 33,000 Sanitation:168-9965 2,092,146 2,560,468 $2,593,000 3,020,000 427,000 Greenspace:168-9966 506,242 $763,000 832,000 69,000 NWS Project/Lincoln Park Complex Contingency - - - - - NWS Project-Grant-in-Aid 15,000,000 - - - - Transfer to Penn Garage Parking 75,622 48,801 405,000 305,000 (100,000) Transfer to Penn Garage Retail 26,448 347,112 - - - Transfer to Renewal and Replacement - - 705,000 $67,000 (638,000) Transfer to Capital Projects 136,758 13,541,301 14,238,000 18,443,000 4,205,000 Total Project Expenses $ 21,075,706 $ 21,429,123 $ 23,588,000 $ 28,038,000 $ 4,450,000 Reserve and Debt Service Obligations Debt Service Cost-2005+Parity Bonds $ 8,393,254 $ 8,548,105 $ 8,415,000 $ 8,550,000 $ 135,000 Current Debt Service-Lincoln Rd Project 1,094,176 1,103,366 $785,000 825,000 40,000 Current Debt Service-Bass Museum 505,859 502,746 503,000 547,000 44,000 Reserve for County Admin Fee 221,782 193,861 198,000 239,000 41,000 Reserve for CMB Contribution 253,531 248,719 261,000 283,000 22,000 Reserve for Children's Trust Contribution 1,474,830 1,481,004 1,575,000 1,831,000 256,000 Reserve for Collins Park Parking Garage - 1,451,823 - - - Repayment-Prior Yr Fund Balance 2,946,246 - - 342,000 342,000 Reserve for Future Projects 384,000 384,000 Total Reserve and Debt Service $ 14,889,679 $ 13,529,624 $ 11,737,000 $ 13,001,000 $ 1,264,000 TOTAL EXPENSES AND OBLIGATIONS $ 36,991,628 $ 36,235,361 $ 36,771,000 $ 43,000,000 $ 6,229,000 REVENUES-EXPENSES $ 672,153 $ (310,400) $ - . $ - $ - Proposed FY 2013/14 Anchor Shops and Parking Garage Operating Budget FY 13/14 FY 10/11 FYI 1112 FY 2012113 Proposed Variance Revenues: Actual Actual Adopted Budget Parking Operations $ 2,368,000 $ 3,079,821 $ 3,049,000 $ 3,130,000 $ 81,000 Retail Leasing 714,150 615,016 $708,000 847,000 139,000 Interest Pooled Cash 39,216 13,897 $26,000 18,000 (8,000) TOTAL REVENUES $ 3,121,366 $ 3,708,734 $ 3,783,000 $ 3,995,000 $ 212,000 Operating Expenses: Parking Operations $ 1,652,841 $ 1,264,875 $ 2,025,000 $ 2,078,000 $ 53,000 Garage Use Fee(To Loews) 471,918 440,241 463,000 507,000 44,000 Garage Repairs and Maintenance - - - 37,000 37,000 Retail Leasing Property Management Fee 76,917 62,619 52,000 - (52,000) Retail Leasing Repair&Maintenance 32,000 32,000 Retail Internal Service Charges 96,274 66,109 35,000 19,000 (16,000) Retail Operations Depreciation 55,396 55,396 55,000 55,000 - Management Fee to General Fund 189,074 196,740 223,000 224,000 1,000 Parking Operations Manageement Fee 189,074 196,740 223,000 224,000 1,000 Retail Leasing Management Fee to GF - - 14,000 10,000 (4,000) Transfer to Renewal and Replacement 182,000 220,000 38,000 Transfer to Capital Projects - - Reserve for Future Capital-Parking Operations - 223,962 358,000 72,000 (286,000) Reserve for Future Capital-Retail Operations - - 376,000 741,000 365,000 TOTAL EXPENSES $ 2,542,420 $ 2,309,942 $ 3,783,000 $ 3,995,000 $ 212,000 REVENUES-EXPENSES $ 578,946 $ 1,398,792 $ - $ - $ - Proposed FY 2013/14 Pennsylvania Ave Shops and Garage Operating Budget FY 13/14 FY 10/11 FY11/12 FY 2012/13 Proposed Variance Revenues: Actual Actual Adopted Budget Parking Operations $ 478,583 $ 618,961 $ 520,000 $ 656,000 $ 136,000 Retail Leasing - 147,123 574,000 550,000 (24,000) Retail Transfer from RDA Operations - 347,112 - - - Parking Transfer from RDA Operations 102,070 346,000 405,000 305,000 (100,000) Interest Pooled Cash - 492 - - - TOTAL REVENUES $ 580,653 $ 1,459,688 $ 1,499,000 $ 1,511,000 $ .12,000 Operating Expenses: Parking Operations Expenditures $ 300,727 $ 723,029 $ 802,000 $ 822,000 $ 20,000 Parking Admin/Base Fee 73,768 45,368 53,000 55,000 2,000 Garage Ground Lease 23,552 23,552 23,000 23,000 - Parking Base Rent 23,552 23,552 $23,000 23,000 - Addt'i/Percentage Rent - - $0 - - Garage Management Fee - $47,604 $47,000 61,000 14,000 Retail Additional Base Rent - $15,592 $278,000 229,000 (49,000) Retail base Rent - $276,448 51,000 136,000 85,000 Retail Admin Fee - 11,137 - - - Depreciation $11,851 - - - Leasing Commissions - 303,400 - - - Admin Fee(GF) - 3,864 $53,000 51,000 (2,000) Contingency - - $192,000 134,000 (58,000) TOTAL EXPENSES $ 398,047 $ 1,461,845 $ 1,499,000 $ 1,511,000 $ 12,000 REVENUES-EXPENSES $ 182,606 $ (2,157) $ - $ - $ -