2013-28444 Reso RESOLUTION NO. 2013-28444
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE
FINANCE AND CITYWIDE PROJECTS COMMITTEE AND APPROVING AND
AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AMENDMENT
NO. 1 TO THE LEASE BETWEEN THE CITY AND MASSAGE PARTNERS, INC.
("TENANT"), DATED SEPTEMBER 15, 2010, FOR THE PREMISES LOCATED
AT 1701 MERIDIAN AVENUE, UNIT 2 (A/K/A 767 17TH STREET), MIAMI
BEACH, FLORIDA; SAID AMENDMENT TO THE LEASE CONCERNING: 1) THE
ADDITIONAL USE OF THE LEASED PREMISES AS A NAIL SALON; 2) THE
NON-EXCLUSIVE, REVOCABLE USE OF THE COMMON AREA RESTROOMS
LOCATED ON THE SECOND FLOOR OF THE 1701 MERIDIAN AVENUE OFFICE
BUILDING FOR TENANT'S NAIL SALON CUSTOMERS; AND 3) THE RENTAL
RATE TO BE PAID BY TENANT FOR THE USE OF SAID COMMON AREA
RESTROOMS
WHEREAS, on September 15, 2010, the Mayor and City Commission passed Resolution No.
2010-27488, approving a Lease Agreement between the City and Massage Partners, Inc.
("Tenant") for the use of approximately 1802.89 square feet of City-owned property, located at
1701 Meridian Avenue, Unit 2 (a/k/a 767 17th Street), Miami Beach, Florida ("Leased Premises");
said Lease having a term of nine (9) years and 364 days, commencing on December 2, 2010, and
ending on November 30, 2020; and
WHEREAS, as stated in Section 7 of the Lease, the Leased Premises shall be used by the
Tenant only for the purpose(s) of providing therapeutic massage services, facials, and any other
products or services authorized pursuant to Tenant's Franchise Agreement with Massage Envy
Franchising, LLC ("Franchisor"); and
WHEREAS, the Tenant has requested permission from the City to expand the use of the
Leased Premises to include nail salon services in a small portion of the space ("Proposed Nail
Salon Space") located at the front of the Leased Premises and separated by partition walls from
the space from which the Tenant currently provides massage services; and
WHEREAS, the Franchisor has stated it cannot approve the sharing of restrooms by its
franchisees with other businesses (i.e. the proposed nail salon); and
WHEREAS, subsequent to numerous discussions between the City Administration and the
Tenant, it was determined that a separate restroom is also required by the City in order for the
Proposed Nail Salon Space to obtain the applicable business tax receipt(s); and
WHEREAS, the Leased Premises do not contain a separate restroom which can be utilized by
the nail salon customers; and
WHEREAS, the Tenant has requested approval to use of the common area restrooms located
on the 2nd Floor of the 1701 Meridian Avenue office building ("Common Area Restrooms") for its
nail salon customers; and
WHEREAS, the additional nail salon use and the use of the Common Area Restrooms was
discussed at the September 19, 2013 Finance and Citywide Projects Committee meeting, and
WHEREAS, the Committee recommended in favor of allowing the nail salon use; and
WHEREAS, the Committee recommended in favor of allowing the non-exclusive, revocable
use of the Common Area Restrooms for the Tenant's nail salon customers, subject to Tenant
escorting any patrons of the nail salon to the Common Area Restrooms during times when the
1701 Meridian office building is not open to the public; and
WHEREAS, the Committee recommended the Common Area Restrooms, containing
approximately 248 square feet, should be subject to the $6.00 PSF common area maintenance
charge which the office tenant's currently pay; in the amount of $1,488 per year (248 sf x $6.00),
payable in monthly installments of$124.
NOW, THEREFORE, BE IT DULY RESOLVED THAT THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission
hereby accept the recommendation of the Finance and Citywide Projects Committee and approve
and authorize the Mayor and City Clerk to execute Amendment No. 1 to the Lease between the
City and Massage Partners, Inc. ("Tenant"), dated September 15, 2010, for the premises located at
1701 Meridian Avenue, Unit 2 (a/k/a 767 17th Street), Miami Beach, Florida; said amendment to the
lease concerning: 1) the additional use of the Leased Premises as a nail salon; 2) the non-
exclusive, revocable use of the common area restrooms located on the 2nd Floor of the 1701
Meridian Avenue office building for Tenant's nail salon customers; and 3) the rental rate to be paid
by Tenant for the use of said common area restrooms.
PASSED and ADOPTED this /j day of 44Zai 13.
ATTEST:
Rafael ran L CI MAYOR
TAAGENDA *Q r 16\ artners\ ssage Partners RESO(10-16-13).docx
: j°, P�
RA T E�: -
°� <
6
APPROVED AS TO
FORM &LANGUAGE
&FOR ECUTION
le?I
for t
COMMISSION ITEM SUMMARY
Condensed Title:
Resolution Accepting The Recommendation Of The Finance And Citywide Projects Committee To Execute An
Amendment To The Lease Between The City And Massage Partners, Inc., Located At 1701 Meridian Avenue,
Unit 2 (a/k/a 767 17th Street), Concerning: 1) The Additional Use Of The Leased Premises As A Nail Salon; 2)
The Non-Exclusive, Revocable Use Of The Common Area Restrooms Located On The 2nd Floor Of The 1701
Meridian Avenue Office Building For Tenant's Nail Salon Customers; And 3) The Rental Rate To Be Paid By
Tenant For The Use Of Said Restrooms.
Key Intended Outcome Supported:
Increase resident satisfaction with the level of services and facilities.
Supporting Data(Surveys, Environmental Scan, etc.):
Approximately 40% of retail businesses surveyed, rank Miami Beach as one of the best places to do business and
61%of the same group would recommend Miami Beach as a place to do business.
Item Summa /Recommendation:
On September 15, 2010, the Mayor and City Commission passed Resolution No. 2010-27488, approving a
Lease Agreement between the City of Miami Beach ("City") and Massage Partners, Inc. ("Tenant") for the use
of approximately 1802.89 square feet of City-owned property, located at 1701 Meridian Avenue, Unit 2 (a/k/a
767 17th Street), Miami Beach, Florida ("Leased Premises"); said lease having a term of nine (9) years and
364 days, commencing on December 2, 2010, and ending on November 30, 2020.
Pursuant to the Lease, the Leased Premises shall be used by Tenant solely for the purpose(s) of providing
therapeutic massage services, facials, and any other products or services authorized pursuant to Tenant's
Franchise Agreement with Massage Envy Franchising, LLC ("Franchisor"). The Tenant has requested
permission to expand the use of the Leased Premises to include nail salon services in a small portion of space
("Proposed Nail Salon Space") located at the front of the Leased Premises and separated by partition walls
from the space from which the Tenant currently provides massage services. Due to requirements of the
Franchisor and the City, the Tenant further requested approval to use of the common area restrooms located
on the 2nd Floor of the 1701 Meridian Avenue office building ("Common Area Restrooms") for its nail salon
customers.
At its September 19, 2013 meeting, the Finance and Citywide Projects Committee recommended in favor of
allowing the additional use as a nail salon. Additionally, the Committee was willing to allow the non-exclusive,
revocable use of the Common Area Restrooms, subject to Tenant escorting patrons to the Common Area
Restrooms during times when the 1701 Meridian office building is not open to the public. The Committee
recommended the Common Area Restrooms, containing approximately 248 square feet, should be subject to
the $6.00 PSF common area maintenance charge which the office tenant's currently pay; in the amount of
$1,488 per year(248 sf x$6.00), payable in monthly installments of$124.
Advisory Board Recommendation:
Finance & Citywide Projects Committee: September 19, 2013
Financial Information:
Source of Amount Account
Funds: 1 n/a
Financial Impact Summary:
City Clerk's Office Legislative Tracking:
Max Sklar, ext. 6116
Sign-Offs:
De artme t j6i;pctg# Assistant Ci ana er City MhAper
MAS KGB J
JLM/KGB/MAS//MMM
TAAGENDA\2013\December 11\Massage Partners SUMM(10-16-13).docx
AGENDA ITEM
�
MIAMMEACH 2
DATE I � �
MIAMIBEACH
City of Miami Beath, 1700 Convention Center Drive,Miami Beach, Florida 33139,www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Philip Levine and Member of the City ommission
FROM: Jimmy Morales, City Manager
DATE: December 11, 2013
SUBJECT: A RESOLUTION OF THE MAYJ AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE
FINANCE AND CITYWIDE PROJECTS COMMITTEE PERTAINING TO AN
AMENDMENT TO THE LEASE BY AND BETWEEN THE CITY OF MIAMI
BEACH ("CITY") AND MASSAGE PARTNERS, INC. ("TENANT") DATED
SEPTEMBER 15, 20109 FOR THE PREMISES LOCATED AT 1701 MERIDIAN
AVENUE, UNIT 2 (A/K/A 767 17TH STREET), MIAMI BEACH, FLORIDA; AND
FURTHER APPROVING AND AUTHORIZING THE MAYOR AND CITY CLERK
TO EXECUTE SAID AMENDMENT TO THE LEASE CONCERNING: 1) THE
ADDITIONAL USE OF THE LEASED PREMISES AS A NAIL SALON; 2) THE
NON-EXCLUSIVE, REVOCABLE USE OF THE COMMON AREA
RESTROOMS LOCATED ON THE SECOND FLOOR OF THE 1701 MERIDIAN
AVENUE OFFICE BUILDING FOR TENANT'S NAIL SALON CUSTOMERS;
AND 3) THE RENTAL RATE TO BE PAID BY TENANT FOR THE USE OF
SAID COMMON AREA RESTROOMS
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
BACKGROUND
On September 15, 2010, the Mayor and City Commission passed Resolution No. 2010-27488,
approving a Lease Agreement between the City of Miami Beach ("City") and Massage Partners,
Inc. ("Tenant") for the use of approximately 1802.89 square feet of City-owned property, located
at 1701 Meridian Avenue, Unit 2 (a/k/a 767 17th Street), Miami Beach, Florida ("Leased
Premises"); said Lease having a term of nine (9) years and 364 days, commencing on
December 2, 2010, and ending on November 30, 2020.
As stated in Section 7 of the Lease Agreement, the Leased Premises shall be used by the
Tenant only for the purpose(s) of providing therapeutic massage services, facials, and any other
products or services authorized pursuant to Tenant's Franchise Agreement with Massage Envy
Franchising, LLC ("Franchisor"). Any additional uses shall be subject to the prior written
approval of the City Manager, in his sole and reasonable discretion. Furthermore, pursuant to
Subsection 8.C.2 of Tenant's Franchise Agreement, the Tenant shall not offer, sell, give away or
otherwise provide any services or products not authorized by the Franchisor.
The Tenant has requested permission from the City to expand the use of the Leased Premises
to include nail salon services in a small portion of space ("Proposed Nail Salon Space") located
at the front of the Leased Premises and separated by partition walls from the space from which
the Tenant currently provides massage services.
The Franchisor has stated it cannot approve the sharing of signage, entryways or restrooms by
its franchisees with other businesses. The Leased Premises contains a separate entryway for
Commission Memorandum
Massage Partners, Inc.—Retail Lease Amendment
December 11, 2013
Page 2 of 4
the Proposed Nail Salon Space as well as a separate area for window signage. However, the
Leased Premises do not contain a separate restroom which can be utilized by the nail salon
customers. Subsequent to numerous discussions between the Administration and the Tenant, it
was determined that a separate restroom is also required by the City in order for the Proposed
Nail Salon Space to obtain the applicable business licenses.
The Finance and Citywide Projects Committee (FCWPC) considered this request at the
November 9, 2012 meeting. The Committee asked that a standby letter of credit be issued for
the contractor's liens which were filed in regards to Tenant's initial buildout of the Leased
Premises. The Committee also asked staff to determine a proportionate share for use of the
common area restrooms located on the 2nd Floor of the 1701 Meridian Avenue office building
("Common Area Restrooms") and to determine the appropriate CAM fees to be charged and
bring it back to the Finance and Citywide Committee with the methodology used to calculate the
fees.
The request was brought back to the FCWPC on July 25, 2013. After discussing the matter,
Mayor Matti Bower expressed concern regarding the City's liability if there is access into a City
building when not occupied on the weekends. Commissioner Jorge Exposito suggested that
Massage Partners try to get a waiver from the Franchisor in order to use its restrooms.
Chairperson Deede Weithorn recommended Massage Partners work with their next door
neighbors, the Permit Doctor, to use their restrooms, and provide evidence to the City via an
affidavit. The Committee asked for direction from the Building Department to determine if the
use of the Common Area Restrooms is permitted under the Building Code. The Committee also
asked if the Building Code allows for Massage Partners to use the Permit Doctor's restrooms
via an agreement between the tenants.
The request was brought back to the FCWPC on September 19, 2013. The Committee was in
favor of allowing the additional use as a nail salon. Additionally, the Committee was willing to
allow the non-exclusive, revocable use of the Common Area Restrooms, subject to Tenant
escorting patrons to the Common Area Restrooms during times when the 1701 Meridian office
building is not open to the public. The Committee discussed the fees to be charged for the use
of the Common Area Restrooms and agreed upon $6.00 per square foot, for the 248 square
feet of restroom area, in the amount of $124 per month. The attached DRAFT Amendment to
the Lease, attached hereto and marked "Attachment 1", is subject to Legal and Regulatory
approvals as well as final approval by the Tenant.
ANALYSIS
The Tenant has requested to expand its product/service line to include a nail salon, which is a
natural extension of the current services provided. As previously stated, Section 7 of the Lease
Agreement specifically states the Leased Premises shall be used by the Tenant only for the
purpose(s) of providing therapeutic massage services, facials, and any other products or
services authorized pursuant to Tenant's Franchise Agreement with Massage Envy Franchising,
LLC ("the Franchisor"). Any additional uses shall be subject to the prior written approval of the
City Manager, in his sole and reasonable discretion. The Administration is agreeable to allowing
an additional use of the Leased Premises as a nail salon, subject to written approval by the City
Manager.
The use of the Common Area Restrooms is also required in order to comply with both the
Franchisor's stipulations and the requirements of the City. The Administration is also agreeable
to providing the Tenant the non-exclusive, revocable use of the Common Area Restrooms,
subject to the Tenant complying with any additional insurance requirements and/or regulatory
requirements.
Commission Memorandum
Massage Partners, Inc.—Retail Lease Amendment
December 11, 2013
Page 3 of 4
Calculation of Rent:
Tenant currently pays a base rental rate of $27.60 per square foot for the Leased Premises,
plus operating expenses at $4.00 per square foot, and also escrows funds for real estate taxes
at the current rate of$7.78 per square foot, and insurance costs at a rate of .90 per square foot.
Per Subsection 3.2.1 of the Lease Agreement, "Operating Expenses" shall mean the following
costs and expenses incurred in operating, repairing, and maintaining the Common Facilities (as
hereinafter defined) and shall include, without limitation, water service to the Building, sewer
service to the Building, trash removal from the Building, costs incurred for gardening and
landscaping, repairing and maintaining elevator(s), painting, janitorial services (except for areas
within the Leased Premises), lighting, cleaning, striping, policing, removing garbage and other
refuse and trash, removing ice a n d snow, repairing and maintaining sprinkler systems, water
pipes, air-conditioning systems, temperature control systems, and security systems, fire alarm
repair and maintenance and other equipment in the common areas and the exterior and
structural portions of the Building, paving and repairing, patching and maintaining the parking
areas and walkways, and cleaning adjacent areas, management fees and the City's
employment expenses to employees furnishing and rendering any services to the common
areas, together with an additional administration charge equal to fifteen percent (15%) of all
other expenses included in the annual common area expenses, provided by the City for the
common or joint use and/or benefit of the occupants of the Building, their employees, agents,
servants, customers and other invitees. Based on this definition, the Administration believes the
Tenant already pays for the common bathroom and its water and sewer expenses.
However, the FCWPC requested the Administration provide a methodology for calculating
additional fees for use of the 2nd floor restroom at its November 9, 2012 meeting. Currently, the
retail tenants at the 1701 Meridian Avenue building pay $4.00 PSF for operating expenses and
the office tenants pay $6.00 PSF. The difference is due to certain expenses which are not
passed through to the retail tenants, such as electricity since the retail tenants are separately
metered.
The additional rent for use of the Common Area Restrooms may be calculated based upon the
size of the restrooms, which is 104 square feet for the men's room and 144 square feet for the
women's room. The Administration recommends the combined square footage of 248 square
feet should be subject to the $6.00 PSF which the office tenant's currently pay. Accordingly, the
rent for the use of the bathrooms would be $1,488 per year (248 sf x $6.00), payable in monthly
installments of$124.
Outstanding Liens:
The Tenant performed extensive renovations to the space, and in consideration of the Tenant's
improvements, the City delayed rent commencement for one year after Lease commencement.
The Tenant improvements were conducted by Tenant's contractors, one of whom filed two
Claims of Lien against the leasehold interest in August 2012. The contractor claimed he was
owed $66,300.67 by the Tenant. The City placed the Tenant on notice of default. The Tenant
in turn filed a Contest of Lien. The City, pursuant to Section 15 of the Lease Agreement,
requested the Tenant provide the City with security in the amount of $99,451.00 immediately in
connection with the Claim of Lien. On October 31, 2012, the contractor informed the
Administration that negotiations were ongoing with Massage Partners and that the Tenant had
offered to pay $40,000 of the $$66,300.67. One June 26, 2013, the City received two Releases
and Satisfaction of Recorded Claims of Lien (attached hereto and marked "Attachment 2"). The
City Attorney's office has determined said Releases are acceptable to the City.
Commission Memorandum
Massage Partners, Inc.—Retail Lease Amendment
December 11, 2013
Page 4 of 4
Pending Lawsuit:
Tenant is sueing the adjacent tenant to the west of the Leased Premises, South Florida Salon
Group, Inc. ("SFSG") for specific damages relating to the rights to approximately 160 square
feet of space which are part of SFSG's lease with the City. The City was named as a party in
the initial Complaint. The City Attorney's office required that any allegations as to the City be
removed from the lawsuit. The City has since been removed and is no longer a party in the
lawsuit. The City Attorney's office has determined the revised Complaint (attached hereto and
marked "Attachment 3") is devoid of any allegations as to the City.
Use of Permit Doctor's Restrooms:
The Building Department will not allow Massage Partners to use an adjacent business' restroom
(Permit Doctor), even if the adjacent business agrees to such arrangement and provides an
affidavit.
Use of Common Area Restrooms on Second Floor:
The Building Department was not inclined to allow the use of the common area bathrooms of
the office building since they could not be accessed through internal, common space. However,
because the Chief Plumbing Inspector had already approved the use of the common area
restrooms the Building Official has said he will allow it.
The entrance to the office building is open/unlocked Monday — Friday 7:00 AM to 7:00 PM and
is closed on the weekends. The only persons with access to the building outside of these hours
are City employees with City-issued identification/access cards. The Tenant has said they will
only be open during Massage Envy hours which are Monday — Friday 8:00 AM to 10:00 PM and
Saturday/Sunday 9:00 AM to 9:00 PM.
Massage Partners has said they are willing to escort any patrons of the nail salon to the
common area restrooms during times when the 1701 Meridian office building is not open to the
public. Massage Partners has also offered to install a security camera in the lobby of the office
building. The camera would be connected to, and recorded by, Massage Partners' security
equipment in the Premises. The City is named as an additional insured on Tenant's liability
insurance
CONCLUSION AND RECOMMENDATION
From a business and practical standpoint, the Administration, as Landlord, has no objection to
the additional use of the Premises as a nail salon. The Adminstration recommends the Mayor
and City Commission accept the recommendation of the FCWPC to:
1. Allow the additional use of the Leased Premises as a nail salon
2. Allow the non-exclusive, revocable use of the Common Area Restrooms for the nail
salon patrons
3. Charge additional rent for use of the Common Area Restrooms in the amount of
$6.00 per square foot, payable in monthly installments of$124.
"Attachment 1" - DRAFT Amendment to the Lease
"Attachment 2" - Releases and Satisfaction of Recorded Claims of Lien
"Attac ent 3" - Revised Complaint
JLM/K /MAS/MMM
T.OGENDAT01310dober 161Massage PartnerslMassage Partners MEMO(10-16-13).docx
I
Attachment 1