97-22316 RESO
RESOLUTION NO.
97-22316
A RESOLUTION OF THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH APPROVING, AND
AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE, THE ATTACHED LETTER OF INTENT
BETWEEN THE CITY, THE MIAMI BEACH
REDEVELOPMENT AGENCY, RDP ROYAL PALM HOTEL
LIMITED COMPANY AND RDP SHORECREST HOTEL
LIMITED COMPANY REGARDING THE OWNERSHIP,
DEVELOPMENT AND OPERATION OF A CONVENTION
HOTEL.
WHEREAS, RDP Royal Palm Hotel Limited Company ("RDP Royal Palm") was selected
as thl': winning bidder in response to Request for Proposals Number 45-95/96 ("RFP") to develop,
ov n and operate an African-American owned convention center hotel in Miami Beach; and
WHEREAS, representatives of the Redevelopment Agency ("RDA"), the City of Miami
Bt acl1 (the "City"), RDP Royal Palm and RDP Shorecrest Hotel Limited Company (collectively,
Rl)P Royal Palm and RDP Shorecrest Hotel Limited Company are referred to as "RDP") have been
en5aged in negotiations for a number of months regarding, among other things, the development,
ovnership and operation of the proposed hotel; and
WHEREAS, the development of the hotel is a part of and is consistent with the City Center
Hi stcric Convention Village Redevelopment and Revitalization Plan and will eliminate slum and
bI ght in the City Center Historic Convention Village Redevelopment and Revitalization Area; and
WHEREAS, the development ofthe hotel is a public purpose and will benefit the public by,
an lorg other things, increasing the number of convention quality hotel rooms in the City, assisting
thl: City in attracting conventions and increasing the utilization of the Convention Center, increasing
to' lrism and improving the economy; and
WHEREAS, the development of the hotel as described in the attached letter of intent
en: ,,01") is authorized by Chapter 163 of the Florida Statutes; and
WHEREAS, repl'esentatives of the RDA, the City and RDP, subject to the approval of the
Rl)A and the City, have negotiated the terms of the LOI attached hereto.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
o lMMISSION OF THE CITY OF MIAMI BEACH as follows:
1. The attached LOI between the RDA, the City and RDP is hereby approved.
2. The Mayor and City Commission hereby find that the development of the hotel is a
public purpose, will benefit the public, and is a part of and is consistent with the City
Center Historic Convention Village Redevelopment and Revitalization Plan.
3. The Mayor and City Commission hereby find that the development of the Hotel is
authorized by Chapter 163, Florida Statutes.
4. The Mayor and City Clerk are authorized to execute the attached LOI.
5. The Chief Negotiator, City Manager and City Attorney, and their respective staffs
and outside consultants, are authorized to negotiate and document the definitive
agreements relating to the LOI and take all other actions in connection therewith.
6. This resolution shall take effect immediately upon adoption.
PASSED and ADOPTED this
APPROVED AS TO
FORM & LANGUAGe
& FOREXECunON
A' ~TEST:
_i~ok6-P~~
CJ TY CLERK
All kw
f\at )\tac,l\resos\aaloiexe.res
2-,;J.r 11
Date
2
I. ;IT'( HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
[~ITY OF MIAMI 'BEACH
COMMISSION MEMORANDUM NO. I 50 -~7
Tl.:
Mayor Seymour Gelber and
Members of the City Commission
DATE: March 5, 1997
Sli JB.rECT:
Jose Garcia_ped7!lro.
City Manager
l
RESOLUTI~'APPROVING A LETTER OF INTENT AMONG THE RDP
ROYAL PALM HOTEL LTD. CO. AND RDP SHORECREST HOTEL LTD.
CO. (COLLECTIVELY RDP), THE CITY OF MIAMI BEACH AND THE
MIAMI BEACH REDEVELOPMENT AGENCY FOR THE OWNERSHIP,
DEVELOPMENT AND OPERATION OF AN AFRICAN AMERICAN
OWNED HOTEL AT 1535 AND 1545 COLLINS AVENUE.
FlitO\f:
RECOMMENDATION:
AIlprove the Resolution.
B,'~CKGROUND:
St 1ff and consultants for the Redevelopment Agency (RDA) and Commission have negotiated a
pr )posed letter of intent (LOI) (attached hereto) for a 425- room hotel comprised of258 hotel rooms
ar d ] 67 hotel suites.
01 Jlme 5, 1996, the RDA selected the RDP Royal Palm Hotel Ltd. Company, after an exhaustive
pl blic review process, to negotiate the terms under which RDP would develop, own and operate a
cc nvention hotel on the Royal Palm property and optionally on the adjacent Shorecrest property.
A the time, the developer had the Shorecrest Hotel under contrac~ and the successful proposal
cc ntemplated development of both sites operated under uniform management. Thus, the City did
n( t rave site control on all of the land.
Fllrnany months, the City's negotiators and staff, working in harmony with Don Peebles, the
d( veloper on the LOI, struggled to put the deal together under a structure oftwo separate ownerships
oj la ld for one hotel development.
Ir th;: last two weeks, by unanimous consent, the chief negotiator for the RD A and Mr. Peebles came
tc a eonclusion that the single-site ownership was preferable and Mr. Peebles agreed to transfer his
c(nt"act interest in the Shorecrest to the RDA (fee and leasehold).
AGENDA ITEM
Rl~
3-5..U
DATE
As a result of the agreement, the RDA and Peebles moved rapidly to a mutually acceptable LOI.
Th~ lOI, before the RDA and City Commission, therefore contemplates complete site control in the
hald~ of the RDA, as is the case with the Loews Hotel.
Th.~ FDA made a commitment to all RFP respondents that its funding obligation would be limited
to $10 million. The RDA has agreed to subordinate its right to receive rent under certain
cir~umstances to the first $10 million in financing relating to the project.
In: smuch as the cost of acquisition of the Royal Palm was $5.5 million, and the previously agreed
up m price of the Shorecrest, by Peebles is also $5.5 million, the total acquisition costs would be $11
minicln. The additional costs over $10 million will be borne by Peebles and not be a cost burden of
tht Clty or the RDA. It has been mutually agreed between the RDA and Peebles that Peebles will
co ne up with any additional costs over the $10 million that relate to acquisition of the Shorecrest.
Tl e LOI covers, among other things, the rent that the RDA will receive from the developer, the
de leloper's financial involvement, outside funding, questions of sale of the hotel, operations, quality
of the flag, parking and use of the RDA's parking garage.
Tl e 1,01 follows the basic format of the Loews agreement except that the Loews agreement never
re'luired subordination of the right to receive rent by the City.
It,hculd be noted that the signing of the LOI is just one step in moving forward. It is the blueprint
fo' H.e definitive agreements. If the next documents to be agreed upon are unacceptable, the LOI
st: te:; that there is no further obligation on the part of the City/RDA subject to possible design
de ve opment expense reimbursement.
A"~AL YSIS:
Fd1cwing are criteria major points in the LOI. The document is attached, and a presentation will
be made at the City Commission/Miami Beach Redevelopment Agency meeting.
D Room count: 425 units total (258 hotel rooms/167 hotel suites).
D Lease term: 100 years.
D Rent to RDA: $490,000 per year plus incentive rent up to $200,000 per year.
D RDA funding: capped at $10 million.
[ Cost of project: $59.9 million.
[ Mortgage by private lenders: $31 million.
D RDA owns both sites.
D Parking: 118 spaces on site, 153 spaces to be provided in RDA-owned garage at 16th Street.
D Commitment of room block for Convention Center usage.
o Flag: Crowne Plaza franchise, management by Hospitality Partners.
o Completion: personally guaranteed by equity partners.
D Quality standards to be approved by Tishman Hotel Corporation.
D Design development to commence with LOI signing and with a $600,000 cap on
reimbursement should the deal not go through due to the City's withdrawal.
D RDA to approve plans and specifications.
o Restrictive covenant limiting property to hotel use during the life of the RDA.
D Radius restrictions.
D Real estate taxes to be paid by developer.
D Mandatory purchase of Agency's interest in the land at 25th year.
D HAMP's or similar quality operator for restaurant.
C )l',[CLUSION:
TJ Ie 'City CommissionlRedevelopment Agency should approve the Resolution.
J(rP/~~Ph
A tachment
RESOLUTION NO.
264-97
A RESOLUTION OF THE CHAIRMAN AND MEMBERS OF
THE MIAMI BEACH REDEVELOPMENT AGENCY
APPROVING, AND AUTHORIZING THE CHAIRMAN AND
SECRETARY TO EXECUTE, THE A TT ACHED LETTER OF
INTENT BETWEEN THE CITY OF MIAMI BEACH, THE
MIAMI BEACH REDEVELOPMENT AGENCY, RDP ROYAL
PALM HOTEL LIMITED COMPANY AND RDP
SHORE CREST HOTEL LIMITED COMPANY REGARDING
THE OWNERSHIP, DEVELOPMENT AND OPERATION OF
A CONVENTION HOTEL.
WHEREAS, RDP Royal Palm Hotel Limited Company ("RDP Royal Palm") was selected
as t le winning bidder in response to Request for Proposals Number 45-95/96 ("RFP") to develop,
OWl and operate an African-American owned convention center hotel in Miami Beach; and
WHEREAS, representatives of the Redevelopment Agency ("RDA"), the City of Miami
BeG ch (the "City"), RDP Royal Palm and RDP Shorecrest Hotel Limited Company (collectively,
RD ) Koyal Palm and RDP Shorecrest Hotel Limited Company are referred to as "RDP") have been
eng Iged in negotiations for a number of months regarding, among other things, the development,
oWler:;hip and operation of the proposed hotel; and
WHEREAS, the development of the hotel is a part of and is consistent with the City Center
His or.c Convention Village Redevelopment and Revitalization Plan and will eliminate slum and
blig 1t . n the City Center Historic Convention Village Redevelopment and Revitalization Area; and
WHEREAS, the development of the hotel is a public purpose and will benefit the public by,
am( ng other things, increasing the number of convention quality hotel rooms in the City, assisting
the :ity in attracting conventions and increasing the utilization of the Convention Center, increasing
tOUllsm and improving the economy; and
WHEREAS, the development of the hotel as described in the attached letter of intent
("Ll)1') is authorized by Chapter 163 of the Florida Statutes; and
WHEREAS, representatives of the RDA, the City and RDP, subject to the approval of the
RD. \. and the City, have negotiated the terms of the Lor attached hereto.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE CHAIRMAN AND
MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY as follows:
1. The attached Lor between the RDA, the City and RDP is hereby approved.
2. The Chairman and Members hereby find that the development of the hotel is a public
purpose, will benefit the public, and is a part of and is consistent with the City Center
Historic Convention Village Redevelopment and Revitalization Plan.
3. The Chairman and Members hereby find that the development of the Hotel is
authorized by Chapter 163, Florida Statutes.
4. The Chairman and Secretary are authorized to execute the attached LO!.
5. The Chief Negotiator, Executive Director and General Counsel, and their respective
staffs and outside consultants, are authorized to negotiate and document the definitive
agreements relating to the LOI and take all other actions in connection therewith.
6. This resolution shall take effect immediately upon adoption.
PASSED and ADOPTED this 5th
March
AT rEST:
1)() ~ d--- P IM-~
SEI ~RETARY
A1T\k,
f:\atto\ lca\n.sos\aaloiexe.rda
APPROVED AS TO
FORM & lANGUAGE
& FOR execunoN
:? -aG-~1
Do1e
2
Miami Be ,ach
Redevelo !:>ment Agency
1700 Con I(ention Center Drive
Miami Be,:lch, Florida 33139
Telephon,~: ,:305) 673-7193
Fax: (305 i 6n-7772
fQ
REDEVELOPMENT AGENCY MEMORANDUM NO. 97-6
DA"E:
March 5, 1997
TO:
Chairman and Members of the Board
of the Redevelopment Agency
Jose Garcia_pedrlLoa
Executive Director
RESOLUTION IpROVING A LETTER OF INTENT AMONG THE RDP
ROYAL PALM HOTEL LTD. CO. AND RDP SHORE CREST HOTEL LTD.
CO. (COLLECTIVELY RDP), THE CITY OF MIAMI BEACH AND THE
MIAMI BEACH REDEVELOPMENT AGENCY FOR THE OWNERSHIP,
DEVELOPMENT AND OPERATION OF AN AFRICAN AMERICAN
OWNED HOTEL AT 1535 AND 1545 COLLINS AVENUE.
FR(!IMI:
SUEJECT:
RE( OJ\1MENDA TION:
Appl ov~ the Resolution.
BAC KGROUND:
Staff and consultants for the Redevelopment Agency (RDA) and Commission have negotiated a
prop<se:i letter of intent (LOI) (attached hereto) for a 425- room hotel comprised of258 hotel rooms
and ] 67 hotel suites.
On ltne 5, 1996, the RDA selected the RDP Royal Palm Hotel Ltd. Company, after an exhaustive
publi: review process, to negotiate the terms under which RDP would develop, own and operate a
conwnLon hotel on the Royal Palm property and optionally on the adjacent Shorecrest property.
At th~ tlme, the developer had the Shorecrest Hotel under contract and the successful proposal
contenj:lated development of both sites operated under uniform management. Thus, the City did
not h~ve site control on all of the land.
For r laLY months, the City's negotiators and staff, working in hannony with Don Peebles, the
deve! >pcr on the LOI, struggled to put the deal together under a structure of two separate ownerships
of lan:i for one hotel development.
S()lJTtj f)()I~
l?eiI(J4~vel()pment Uistrict
CIIT Cf:/'laf:l?
l?edevel()pment Uistrict
In tie List two weeks, by unanimous consent, the chief negotiator for the RDA and Mr. Peebles came
to a~onc1usion that the single-site o\Vnership was preferable and Mr. Peebles agreed to transfer his
contract interest in the Shorecrest to the RDA (fee and leasehold).
As G result of the agreement, the RDA and Peebles moved rapidly to a mutually acceptable LO!.
The LOI, before the RDA and City Commission, therefore contemplates complete site control in the
hane s (if the RDA, as is the case with the Loews Hotel.
The {DA made a commitment to all RFP respondents that its funding obligation would be limited
to $[ 0 million. The RDA has agreed to subordinate its right to receive rent under certain
cirCl m:.tances to the first $10 million in financing relating to the project.
Inasll1u~h as the cost of acquisition of the Royal Palm was $5.5 million, and the previously agreed
upor price of the Shorecrest, by Peebles is also $5.5 million, the total acquisition costs would be $11
milli m. The additional costs over $10 million will be borne by Peebles and not be a cost burden of
the ( it) or the RDA. It has been mutually agreed between the RDA and Peebles that Peebles will
coml up with any additional costs over the $10 million that relate to acquisition of the Shorecrest.
The :"(11 covers, among other things, the rent that the RDA will receive from the developer, the
deve operIs fmancial involvement, outside funding, questions of sale of the hotel, operations, quality
ofth: flag, parking and use of the RDAls parking garage.
The] ,or follows the basic format of the Loews agreement except that the Loews agreement never
required subordination of the right to receive rent by the City.
It she ul(l be noted that the signing of the LOI is just one step in moving forward. It is the blueprint
for tl e clefinitive agreements. If the next documents to be agreed upon are unacceptable, the LOI
state: that there is no further obligation on t~ part of the City/RDA subject to possible design
deve: opment expense reimbursement.
ANALYSIS:
Folla wilg are criteria major points in the LO!. The document is attached, and a presentation will
be m. Ldc at the City CommissionlMiami Beach Redevelopment Agency meeting.
D Room count: 425 units total (258 hotel rooms/167 hotel suites).
D Lease term: 100 years.
D Rent to RDA: $490,000 per year plus incentive rent up to $200,000 per year.
D RDA funding: capped at $10 million.
D Cost of project: $59.9 million.
o Mortgage by private lenders: $31 million.
D RDA owns both sites.
D Parking: 118 spaces on site, 153 spaces to be provided in RDA-owned garage at 16th Street.
D =ommitment of room block for Convention Center usage.
D Flag: Crowne Plaza franchise, management by Hospitality Partners.
D <:::ompletion: personally guaranteed by equity partners.
D '~uality standards to be approved by Tishman Hotel Corporation.
o :Jesign development to commence with Lor signing and with a $600,000 cap on
reimbursement should the deal not go through due to the City's withdrawal.
D RDA to approve plans and specifications.
D lR.estrictive covenant limiting property to hotel use during the life of the RDA.
D Radius restrictions.
D Real estate taxes to be paid by developer.
D Iv1andatory purchase of Agency's interest in the land at 25th year.
D JIAMP's or similar quality operator for restaurant.
C01\CLUSION:
The ( :ity CommissionlRedevelopment Agency should approve the Resolution.
~:tbv
JGPIl IS\.1:jph
AttaclI11:ent
LET T E R
o F
I N TEN T
Subject:
Royal Palm/Shorecrest Crowne
Plaza Hotel
Parties:
RDP Royal Palm Hotel Limited Company
and
RDP Shorecrest Hotel Limited Company
( collectively, "RDP")
City of Miami Beach (the "City")
Miami Beach Redevelopment Agency
(the " Agency" )
Date:
March 5, 1997
RECITATIONS:
A. In February 1993, the City Center/Historic Convention
V:.llage Redevelopment and Revitalization Area was officially
established by the adoption of a Redevelopment Plan (the
"Hedevelopment Plan"). The Redevelopment Plan was the result of
the combined efforts of the City of Miami Beach (the "City"), the
M:.ami Beach Redevelopment Agency (the "Agency"), Metropolitan Dade
County and the State of Florida. The Redevelopment Plan represents
the effort and commitment of the Agency and the City to foster the
development of convention quality hotels, ancillary improvements
and facilities, and necessary linkages to the Miami Beach
Convention Center (the "Convention Center" ) . Pursuant to the
Redevelopment Plan, the Agency has acquired the Royal Palm Hotel
which has a street address of 1545 Collins Avenue, Miami Beach,
F:.orida and which it has agreed to make available for a convention
hotel which will serve as a part of the Redevelopment Plan.
B. The City and the Agency also have decided to make a
substantial commitment to provide the African-American community
w:. th an opportunity in the hospi tali ty industry. In connection
w:_th that commitment, the Agency has agreed to make available the
Royal Palm Hotel and additional financial incentives for an
African-American owned hotel.
C. In furtherance of the Redevelopment Plan and the commitment
to the African-American community referred to in the preceding
pa.ragraph, the Agency published Request for Proposals Number 45-
Execution Copy
9596 (the "RFP"), entitled "City Center/Historic Convention Village
Redevelopment and Revitalization Area African-American Hotel
Development Opportunity", dated December 27, 1995 and amended on
January 2, 1996, January 3, 1996 and March 5, 1996. The RFP sought
bids for the development and operation of a convention hotel owned
by African-Americans.
D. On June 5, 1996, after a public review process, the Agency
selected RDP Royal Palm Hotel Limited Company (which, along with
RDP Shorecrest Hotel Limited Company shall hereinafter collectively
be referred to as "RDP") from among the groups that submitted
proposals pursuant to the RFP and directed representatives of the
A~rency to negotiate the terms under which RDP would develop, own
and operate the convention hotel referred to above (the "Hotel") in
accordance with the requirements of the RFP. This letter sets
forth the understanding reached as a result of such negotiations.
1 . THE HOTEL:
The Hotel will consist of the following: (i) restored portions
o1~ the Royal Palm Hotel, and a new tower to be developed to the
eilst of the Royal Palm Hotel, as' per ~he plans and specifications
approved by the joint Design Review and Historic Preservation
Boards on December 3, 1996, as said plans and specifications may be
anended and approved, together comprising approximately two hundred
f :_fty-eight (258) hotel rooms ( hereinafter collectively referred to
all the "RP Hotel") and (ii) restored portions of the Shorecrest
Hotel which has a street address of 1535 Collins Avenue, Miami
Beach, Florida and a new tower to be developed to the east of the
Sllorecrest Hotel, as per the plans and specifications approved by
the joint Design Review and Historic Preservation Boards on
December 3, 1996, as said plans and specifications may be amended
and approved, together comprising approximately one hundred sixty-
seven (167) hotel suites (hereinafter collectively referred to as
the "Shorecrest Hotel"). The Shorecrest Hotel will be operated in
conjunction with the RP Hotel as the Hotel. The Hotel will be a
first class, upscale property with suitable convention, conference
and meeting space and appropriate amenities meeting the standards
0:: the Crowne Plaza chain and those standards set forth in the
Ground Lease (as hereinafter defined). It will be developed based
U!Jon the concept presented in RDP's response to the RFP, dated
April 1, 1996, subject to the definitive agreements to be entered
into between the Agency and/or the City (as applicable) and RDP
(collectively, the "Agreements"), the form and substance of which
shall be acceptable to RDP's lender, RDP, the Agency and the City.
~)P shall be obligated to develop, design, construct, furnish and
e'iuip the Hotel in accordance with plans established pursuant to
the Agreements which shall include approximately one hundred
eighteen (118) on-site parking spaces. The Hotel shall be
constructed in accordance with all applicable zoning, building,
2
Execution Copy
environmental, safety and other governmental laws, rules and
n:gulations.
2. COSTS OF THE HOTEL:
The preliminary estimated budget for the development of the
Hotel is as follows:
2.1 Uses of Funds.
Land $ 10,900,000
Construction Cost $ 29,468,300
Indirect Fees $ 1,960,600
Indirect Costs $ 890,300
FF&E $ 5,027,900
General & Admin. $ 550,000
Financing Costs $ 922,000
Start-Up Costs $ 2,080,000
Construction Interest $ 1,733,800
Fee $ 1,717,200
Contingency $ 4,747,300
Total $ 59,997,400
3 . FUNDING OF THE HOTEL:
3.1 Sources of Funds.
Developer Equity
C. Barker $ 2,304,831
D. Peebles $ 2,106,469
J. Thompson $ 2,210,175
HCF Group $ 278,200
FF&E Loan/Contingency
Crowne FF&E Loan $ 5,000,000
Hospitality Partners
FF&E Contingency Loan $ 530,690
Donohoe Loan $ 1,000,000
Partner Contingency Loan $ 1,000,000
Working Capital Revolving Loan $ 425,000
Deferred Construction
Management & Development
Management Fees
Deferred Construction
Management Fees $ 1,320,000
Deferred Development
Management Fees $ 1,366,500
First Mortgage Loan $ 31,000,000
Agency Interest $ 10,000,000
Mezzanine Financing $ 1, 455,535
Total $ 59,997,400
3
Execution Copy
3.2 Provider and Form of Completion Guarantee. The Class
A Members (the Guarantors defined hereinbelow) of RDP shall
provide personal guarantees running to the City and the Agency
which will irrevocably and unconditionally guarantee the
successful completion and opening of the Hotel. These
personal guarantees shall be joint and several and shall be
provided by R. Donahue Peebles, Cecile Barker, Jeffrey Earl
Thompson, Peter Calin and HCF, Inc. (collectively, the
"Guarantors"). From the date of execution of the Agreements
until the Opening Date, Guarantors shall furnish updated
financial statements to the City and the Agency annually and
any material adverse change in the aggregate financial
condi tion of the Guarantors, including as reflected in the
statements or any of them, which change has a material adverse
effect on the completion or opening of the Hotel, shall be
deemed a default under the Agreements.
3.3 Fundinq of Aqency's Share. The Agency's total funding
obligation shall be ten million dollars ($10,000,000)
allocated as follows:
Shorecrest Hotel Land
$ 5,500,000
$ 4,500,000
$10,000,000
RP Hotel Land
4 . MUNICIPAL GARAGE:
4.1 Aqency or City to Build Garaqe. The Agency or City
shall be responsible for the construction and maintenance (for
so long as the Hotel is operated as a hotel or the parking
spaces are required for the use of such hotel by RDP under
applicable law) of a municipal garage ("Garage") on an Agency-
owned site within an area bounded by washington and Collins
Avenues between 15th and 17th Streets. The Agency and/or the
City shall perform the foregoing actions in accordance with
the standards set forth in the Agreements. The Agency and/or
the City anticipates the Garage will be open by the Opening
Date (defined hereinbelow); however, if the Garage is not
substantially completed and ready for use by the Opening Date
then, in that event, the Agency and/or the City shall make one
hundred fifty three (153) parking spaces available elsewhere
within a radius of one thousand two hundred (1,200) feet of
the Hotel ("Temporary Parking") for the Hotel until the Garage
is substantially completed and ready for use. The Agency or
the City shall be responsible for the additional expenses, if
any, related to the Temporary Parking.
4.2 Hotel Use. Approximately one hundred fifty three
(153) parking spaces shall be available for priority use (as
4
Execution Copy
defined below) by the Hotel in the Garage (including
provisions for Hotel valet parking arrangements). Hotel user
parking rates shall be established by the garage operator,
subject to the Agency's or the City's approval, provided,
however, charges to RDP for valet parking shall not exceed
fifty (50%) percent of the self-park rate and charges for
Hotel employee parking shall not exceed the lower of (i) the
monthly parking rate, (ii) fifty (50%) percent of the self-
parking rate or (iii) the contract parking rate. RDP shall
utilize the available parking spaces at the Garage prior to
utilizing other off-site parking facilities. The Agency or
the City, as applicable, shall incorporate the provisions of
this subparagraph 4.2 and subparagraph 4.3 hereinbelow in any
and all operation and management agreements with garage
operators relating to the Garage.
4.3 Priority Use. "Priority use" shall mean the garage
operator shall set aside solely for Hotel use such number of
the allocated parking spaces as Hotel Operator shall request
from time to time upon not less than twenty-four (24) hours
prior notice to the garage operator.
4.4 Hotel Garaqe Rent. RDP shall pay annual rent, payable
monthly, equal to one hundred thirty seven thousand seven
hundred dollars ($137,700) for the use of the parking spaces
in the Garage as described in this Letter of Intent, subject
to subparagraph 4.5 hereinbelow (the "Garage Rent").
4.5 Facility Usaqe Payment. In consideration of RDP's
agreement to utilize the Garage, as provided above, RDP shall
be paid monthly a percentage of the annual gross revenues of
the Garage as follows (the "Facility Usage payment"):
(i) Eleven and four tenths percent (11.4%) of the
annual gross revenues with respect to the first one
million two hundred thousand dollars ($1,200,000) of gross
revenues; and
(ii) Seven and six tenths percent (7.6%) of those
annual gross revenues that exceed one million two hundred
thousand dollars ($1,200,000);
provided, however, the first one hundred thirty seven thousand
seven hundred dollars ($137,700) resulting from the
application of subparagraph 4.5 (i) hereinabove to annual
gross revenues shall be applied as a credit against the Garage
Rent each year.
4.6 Limitation on Losses. In the event that as of any
given year cumulative Garage Rent payments made by RDP from
the date of commencement of RDP' s use of the Garage or
5
Execution Copy
Temporary Parking less the cumulative Facility Usage Payments
received by RDP from the date of such commencement exceed the
sum of two hundred seventy-five thousand dollars ($275,000),
the Facility Usage Payment for that year will be the greater
of one hundred thirty-seven thousand seven hundred dollars
($137,700) and the amount calculated in accordance with
subparagraph 4.5 hereinabove.
4.7 Enforceabilitv. Appropriate provisions will be made,
by a recorded, non-exclusive easement or other covenant, to
ensure the enforceability of the Hotel's rights to the Garage.
5. GROUND LEASE:
The land comprising the RP Hotel and the Shorecrest Hotel
( :::ollectively, the "Land"), which is more fully described on Exhibit
~~ attached hereto and made a part hereof as if fully set forth
h:!rein, will be leased to RDP by the Agency or the City, as
a;:>plicable, (the "Lessor") pursuant to a ground lease (the "Ground
L:!ase") having the following provisions:
5.1 Title. The execution of the Agreements by RDP will be
conditioned upon fee title to the Land being good, marketable
and insurable subject only to matters reasonably acceptable to
RDPi provided, however, that the Lessor is not responsible for
ti tle matters pertaining to the Shorecrest Hotel land that
affect or encumber that land as of the date of assignment from
RDP to the Lessor or Lessor's affiliate of any contract to
purchase that land. After execution of the Agreements and the
recording of the Ground Lease, the Lessor will not further
encumber such title to the Land except with respect to those
matters (such as utility easements and non-monetary reciprocal
easement agreements) reasonably approved by RDP and which do
not adversely affect the operation or development of the Hotel
as called for herein. The Land will be leased to RDP on an
"as is" basis at the time of execution of the Ground Lease.
5.2 Term. One hundred (100) years.
5.3 Base Rent. RDP shall pay to the Lessor base rent in
the amount of $220,000.00 per year, payable monthly (the "Base
Rent" ), commencing on the opening date of the Hotel (the
"Opening Date"). The Base Rent shall be increased at the
beginning of the tenth (10th), fifteenth (15th) and twentieth
(20th) years from the Opening Date based upon the increase in
the GDP implicit price deflator index. In no event shall the
Base Rent during any period be less than the Base Rent during
any prior period.
5.4 Additional Rent. In addition to the Base Rent, RDP
shall also pay to the Lessor additional rent in the amount of
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$270,000.00 per year, payable monthly (the llAdditional Rent"),
commencing on the Opening Date. The Additional Rent shall be
increased at the beginning of the tenth (the), fifteenth
(15th) and twentieth (20th) years from the Opening Date based
upon the increase in the GDP implicit price deflator index. In
no event shall the Additional Rent during any period be less
than the Additional Rent during any prior period.
5.5 Incentive Rent. In addition to the Base Rent and the
Additional Rent, RDP shall also pay to the Lessor incentive
rent equal to twenty (20%) percent of that amount of the
annual gross revenues from the operation of the Hotel that
exceeds seventeen million nine hundred thousand dollars
($17,900,000) per year, payable thirty (30) days after year-
end (the "Incentive Rent"). The Incentive Rent shall be capped
at two hundred thousand dollars ($200,000) per year; provided,
however, that any Incentive Rent over two hundred thousand
dollars ($200,000) per year shall not be carried forward.
5.6 Subordination of Rental Payments.
5.6.1 Subordination of Rent. In the event of a
default, rental payments to be made by RDP to the Lessor
under the Ground Lease shall be subordinated, as provided
hereinbelow, only to debt service on the first ten million
dollars ($10,000,000) of a thirty one million dollar
($31,000,000) loan (the "Loan"). Notwithstanding anything
to the contrary, the aforesaid subordination of rental
payments shall not, and does not, mean that the
proprietary interest of the Agency in the Land is
subordinate to anything, including but not limited to the
Loan, is encumbered or subject to being extinguished.
5.6.2 Default bv RDP.
A. In the event of a default under the Ground
Lease by RDP, the Lessor shall have the right
to, among other remedies, terminate the Ground
Lease subject to the Lender's (defined in
subparagraph 5.9.2 hereinbelow) cure rights as
set forth hereinbelow in subparagraph 5.6.2 B.
B. In the event of a default under the Ground
Lease by RDP, Lender shall have the right to,
among other remedies, cure any monetary and/or
non-monetary defaults within time periods to
be agreed upon among the parties or foreclose
the first mortgage (the "Mortgage"); provided,
however, that if Lender files a foreclosure
action within sixty (60) days and is
diligently prosecuting the foreclosure, the
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Lessor may not terminate the Ground Lease.
While prosecuting the foreclosure action as
discussed above, Lender is required to make
RDP's monthly rental payments only to the
extent sufficient funds are received by Lender
from operating income from the Hotel after
deducting a sum equal to the amount necessary
to pay monthly debt service on the Loan with
regard to a principal amount of ten million
dollars ($10,000,000), less the amount of
principal paid to date, and operating
expenses.
c. In the event of a default under the Mortgage,
the Ground Lease shall not be in default so
long as (i) Lender gives the Lessor written
notice of said default within ten (10) days
after Lender becomes aware of same; and (ii)
the Ground Lease is not otherwise in default.
D. Throughout this Letter of Intent, for purposes
of calculating the amount of principal
outstanding under the first ten million
dollars ($10,000,000) of the Loan to which
rent payments are subordinate, the application
of proceeds from the sale or lease of Hamp's
Restaurant shall not be included and the ten
million dollars ($10,000,000) to which rent
payments are subordinate shall be assumed to
be reduced, commencing on the Opening Date, by
amortization on a mortgage basis on a twenty-
five (25) year term at the interest rate of
the Loan.
5.6.3 Lender As Tenant Under the Ground Lease. If
Lender becomes the tenant under the Ground Lease, then, in
that event:
A. Lender shall be obligated to pay the Lessor
all current rental payments due under the
Ground Lease and comply with all other
covenants and conditions of the Ground Lease
during the period Lender is the tenant.
B. The amount of unpaid rent existing as of the
time Lender becomes the tenant (the
"Reinstatement Date"), including accrued
interest (at the default rate specified in the
Mortgage), attorneys' fees, costs and other
expenses due the Lessor under the Ground Lease
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(the "Back Rent"), shall be due and payable by
Lender to the Lessor as follows:
(i) During the period in which any part of
the first ten million dollars ($10,000,000) in
principal is outstanding under the original loan,
the Agency shall be paid Back Rent monthly to the
extent funds are available from operating income
from the Hotel after deducting a sum equal to the
debt service on the Loan with regard to a
principal amount equal to ten million dollars
($10,000,000) less the principal of the Loan
actually paid, to date, and operating expenses
(which includes current rent) of the Hotel.
(ii) After the first ten million dollars
($10,000,000) (including payments prior to
default) in principal has been paid to Lender, the
Lender's obligations to pay Back Rent under the
Ground Lease shall be subject only to the payment
of operating expenses on a monthly basis.
(iii) Back Rent will continue to accrue with
interest until paid in full.
5.6.4 Sale of the Hotel bv Lender. Upon a sale of
the Hotel (as described in Paragraph 1 hereinabove) by Lender,
the net sale proceeds, to the extent same are available, shall
be applied in the following order:
( i ) to repay Lender for amounts owed on the
first ten million dollars ($10,000,000) in principal
less principal paid to date plus all accrued interest
thereon;
(ii) to repay the Lessor for amounts owed in
connection with Back Rent;
(iii) to repay Lender for amounts
connection with any remaining principal
accrued interest, costs and expenses;
owed
plus
in
all
(iv) to pay Lessor all accrued interest on Back
Rent; and
(v) to pay to Lessor the amount of the Purchase
Price (defined in subparagraph 5.10.1 hereinbelow).
A. The term "net sale proceeds" as used in
this subparagraph 5.6.4 shall mean, with
respect to an arms-length transaction with
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an unrelated third party, the amount of
the selling price minus brokerage
commissions, tax and other prorations and
all reasonable and customary closing
costs.
B. The new amount to which the Lessor's
interest in the rental payments under the
Ground Lease shall be subordinate after
the sale of the Hotel by Lender shall
never exceed the balance on the original
first ten million dollar ($10,000,000)
subordinated amount after deducting all
principal payments received by Lender up
to the time of the sale.
5.6.5 Refinancinq Not Related to a Default. The net
proceeds from any refinancing not related to a default by RDP
shall be applied in the following order:
(i) to the City or the Agency, as applicable,
to pay the Purchase Price (as defined in subparagraph 5.10
hereinbelow) to buyout the Agency's or the City's, as
applicable, interest in the Landi and
(ii) to RDP if any funds are remaining.
A. The new amount to which the Lessor's
interest in the rental payments under the
Ground Lease shall be subordinate after
refinancing shall never exceed the balance
on the original first ten million dollar
($10,000,000) subordinated amount after
deducting all principal payments received
by Lender prior to the time of the
refinancing.
B. The term "net proceeds" as used in this
subparagraph 5.6.5 shall mean the new loan
amount after refinancing minus the
outstanding loan balance and interest
owing before refinancing minus reasonable
refinancing transaction expenses and
brokerage commissions.
5.7 Real Estate Taxes. RDP shall pay all ad valorem real
estate taxes and personal property taxes concerning the Hotel
levied by the City and other governmental authorities in
accordance with law. RDP will be entitled to the benefit of
any tax abatements and reductions as are, or may become
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available, under applicable law, as if it were the fee owner
of the land.
5.8 Environmental Indemnitv.
5.8.1 The Agency or the City as Lessor, as
applicable, will provide an indemnity to RDP, reasonably
satisfactory to RDP, with respect to the remediation, as
described in the Agreements, of environmental matters
affecting the Land and the improvements thereon which
exist prior to the execution of the Ground Lease.
5.8.2 RDP will provide an indemnity to the Agency
and/or the City, reasonably satisfactory to both of them,
with respect to the remediation, as described in the
Agreements, of environmental matters affecting the Land
and the improvements thereon arising from and after the
execution of the Ground Lease.
5.8.3 No limitations of liability will apply with
respect to the foregoing indemnities.
5.9 Financinq. Any financing secured by the Ground Lease
or Hotel, and any refinancings thereof, will be provided by an
institutional lender subject to the approval of the Agency
and/or the City.
5.9.1 The term "institutional lender" means a person
which, at the time it becomes an institutional lender, is
a state or federally chartered savings bank, savings and
loan association, credit union, commercial bank or trust
company or a foreign banking institution (in each case
whether acting individually or in a fiduciary or
representative (such as an agency) capacity); an insurance
company organized and existing under the laws of the
United States or any state thereof or a foreign insurance
company (in each case whether acting individually or in a
fiduciary or representative (such as an agency) capacity);
an institutional investor such as a publicly held real
estate investment trust, an entity that qualifies as a
"REMIC" under the Internal Revenue Code of 1986, as
amended, or other public or private investment entity (in
each case whether acting as principal or agent); a
brokerage or investment banking organization (in each case
whether acting individually or in a fiduciary or
representative (such as an agency) capacity) as principal
or agent); an employees' welfare, benefit, pension or
retirement fund; an institutional leasing company; any
governmental agency or entity insured by a governmental
agency or any combination of institutional lenders;
provided that each of the above entities shall qualify as
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an institutional lender only if (at the time it becomes an
institutional lender) it shall (i) have assets of not less
than $100,000,000 adjusted for inflation and (ii) not be
an affiliate of RDP (it being further agreed that none of
the standards set forth in this definition shall be
applicable to participants or co-lenders in a loan secured
by a mortgage which is held by an institutional lender
(whether acting individually or in a fiduciary or
representative (such as an agency) capacity). The term
"institutional lender" also includes an affiliate of an
institutional lender as described in this subparagraph
5.9.1.
5.9.2 RDP shall obtain a binding loan commitment
from an institutional lender (the "Lender") in the amount
of no less than thirty one million dollars ($31,000,000)
for the construction of the Hotel. A copy of the executed
loan commitment shall be delivered to the Agency and the
City no later than sixty (60) days after the execution of
this Letter of Intent. All of the terms and conditions of
said loan commitment shall be in form and substance
reasonably satisfactory to the Agency and the City.
5.9.3 All lenders shall be required to send copies
of all default notices or other notices relating to the
failure to keep the Loan in good standing, which are sent
pursuant to a loan document or security document to RDP or
the Guarantors, to the City and the Agency.
5.9.4 All lenders shall comply with all reasonable
estoppel requests of the City and the Agency.
5.10
Purchase of Aqency's Interest.
5.10.1 The Ag~ncy or the City, as applicable, each at
its sole option and each in its sole discretion, may
require RDP to purchase or make Installment Payments
(defined in subparagraph 5.10.5 hereinbelow) toward the
purchase of the Agency's interest in the Land at the
purchase price of ten million dollars ($10,000,000) plus
the required return (referred to in subparagraphs 5.10.3
and 5.10.4 hereinbelow) (the "Purchase Price") at the time
of each refinancing, which refinancing shall occur on or
prior to the beginning of the fifth (5th), tenth (10th)
and twenty-fifth (25th) years after the Opening Date, and
every ten (10) years thereafter, to the extent refinancing
proceeds exist after paying off outstanding debt and
payment of transaction expenses and commissions.
Alternatively, RDP voluntarily may purchase all or part of
the Agency's interest in the Land at any time in accordance
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with the formula set forth in subparagraphs 5.10.3, 5.10.4
and 5.10.5 hereinbelow.
A. The Agency or the City, as applicable, each at
its sole option and each in its sole
discretion, may also require RDP to purchase,
or make Installment Payments (defined in
subparagraph 5.10.5 hereinbelow) towards the
purchase of, the Agency's interest in the Land
any time that RDP voluntarily refinances the
Hotel to the extent that net proceeds as
defined in subparagraph 5.6.5 B are available.
B. Notwithstanding anything in this subparagraph
5.10.1 to the contrary, provided that RDP has
not previously purchased the Agency's
interest, RDP shall purchase the Agency's
interest in the Land in its entirety and at
the full Purchase Price, less any Installment
Payments (defined in subparagraph 5.10.5
hereinbelow) previously made by RDP, at the
end of the twenty-fifth (25th) year after the
Opening Date; unless the Agency or the City as
applicable, each at its sole option and each
in its sole discretion, notifies RDP, in
writing, that the Agency or the City is
rescheduling this purchase of its interest as
aforesaid to a later date, which later date
shall be decided upon solely by the Agency or
the City. In the event the Agency or the City
reschedules this purchase as aforesaid, then,
in that event only, there shall be no further
subordination of the Lessor's interest in the
rental payments under the Ground Lease.
5.10.2 RDP must pay the entire Purchase Price upon
the occurrence of (i) any sale of the Hotel (as
hereinafter defined), subject to the provisions of
subparagraph 6.3 hereinbelow and Paragraph 12 hereinbelow,
or (ii) the expiration of twenty-five (25) years from the
Opening Date subject to the provisions of subparagraph
5.10.1 B hereinabove, whichever occurs first.
5.10.3 Purchase Price if Paid Within Ten (10) Years
from the Openinq Date. For the ten (10) year period
commencing with the Opening Date, the Purchase Price shall
be calculated as follows:
A. The amount required for the Agency to achieve
an eight percent (8%) per year average return,
from the Opening Date to the date of payment
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by RDP, calculated as a return on the amount
of five million five hundred thousand dollars
($5,500,000) or, as of the date of any
Installment Payments, such lesser amount after
deducting any Installment Payments made
(provided, however, that each Installment
Payment shall be counted only once for
purposes of this subparagraph 5.10.3 and
subparagraph 5.10.4 hereinbelow), and giving
RDP a credit for all Base and fifty-five
percent (55%) of any Incentive Rent paid; PLUS
B. The sum of five and a half million dollars
($5,500,000); PLUS
c. The amount required for the Agency to achieve
an eight percent (8%) per year average return,
from the Opening Date to the date of payment
by RDP, calculated as a return on the amount
of four million five hundred thousand dollars
($4,500,000) or, as of the date of any
Installment Payments, such lesser amount after
deducting any Installment Payments made
(provided, however, that each Installment
Payment shall be counted only once for
purposes of this subparagraph 5.10.3 and
subparagraph 5.10.4 hereinbelow), and giving
RDP a credit for all Additional Rent paid and
forty-five percent (45%) of any Incentive Rent
paid, provided, however, that any Incentive
Rent paid after the amounts referenced in
subparagraph 5.10.3 A hereinabove have been
paid shall be credited at one hundred percent
(100%); PLUS
D. The sum of four and a half million dollars
($4,500,000).
5.10.4 Purchase Price if Paid After Ten (10) Years
from the Openinq Date. For the period after ten (10) years
have elapsed from the Opening Date, the Purchase Price
shall be calculated as follows:
A. The sum of the amounts stated in subparagraphs
5.10.3 A, Band D hereinabove; PLUS
B. The amount required for the Agency to achieve
a ten percent (10%) per year average return,
from the Opening Date to the date of payment
by RDP, calculated as a return on the amount
of four million five hundred thousand dollars
($4,500,000) or, as of the date of any
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Installment Payments, such lesser amount after
deducting any Installmer..t Payments made
(provided, however, that each Installment
Payment shall be counted only once for
purposes of subparagraph 5.10.3 hereinabove
and this subparagraph 5.10.4) and giving RDP
a credit for all Additional Rent paid and
forty-five percent (45%) of any Incentive Rent
paid, provided, however, that any Incentive
Rent paid after the amounts referenced in
subparagraph 5. 10.3 A hereinabove have been
paid shall be credited at one hundred percent
(100%).
5.10.5 Installment Payments. Installment payments
("Installment Payments") towards the Purchase Price can be
made only in the following manner and subject to the
following conditions:
A. All Installment Payments are non-refundable.
B. All rental payments under the Ground Lease
shall continue to be due and payable by RDP
notwithstanding the fact that Installment
Payments have been made until such time as the
Purchase Price has been paid in full. At the
time of final payment of the Purchase Price in
full, RDP shall receive a credi t for
Installment Payments made along with the
appropriate credit for all Ground Lease rent
paid, as applicable, as provided above.
c. Proceeds of each Installment Payment will be
applied to the Purchase Price in the same
order as listed for the amounts stated in
subparagraphs 5.10.3 A, B, C and D.
D. The foregoing subparagraph 5.10.5 C
hereinabove applies to Installment Payments
made within ten (10) years from the Opening
Date. If Installment Payments are made after
ten (10) years from the Opening Date, then, in
that event, the references to subparagraph
5.10.3 are deemed to mean 5.10.4 to account
for the increased average return from eight
percent (8%) to ten percent (10%) on the four
and a half million dollars ($4,500,000).
E. Upon payment in full of the Purchase Price,
the Lessor shall transfer by Special Warranty
Deed all of its right, title and interest in
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the Land to RDP and the Lessor shall terminate
the Ground Lease. The conveyances to RDP
shall be subject to any state of facts a
survey may reveal and to permitted exceptions
and other matters described in the Ground
Lease and other matters which RDP may consent
to in writing. Each party shall pay its own
attorneys' fees. All transfer taxes, title
charges, recording fees, survey charges and
other expenses incurred in connection with the
purchase shall be paid by RDP; provided,
however, that the Lessor shall pay all
documentary stamp taxes and surtax, if any,
payable in connection with the purchase.
F. A document evidencing receipt of any
Installment Payments made by RDP shall be
recorded in the Public Records of Dade County,
Florida, which document shall be subject to
review and approval by the Agency prior to
recordation.
5.11 Riqht of First Offer. In the event the Agency
shall desire to offer for sale all of its interest in the
Land, RDP shall have a right to make the first offer to
purchase such interest upon the same terms and conditions as
said interest is to be offered to others, except for the
purchase price which shall not be one of the terms and
conditions of the proposed offer notice. Once the Agency has
given RDP a notice of offer, RDP shall have forty-five (45)
days thereafter to make its offer to purchase said interest at
RDP's offering price or decline to purchase said interest. If
RDP has made an offer within said forty-five (45) day period,
the Agency can either accept RDP's offer or proceed to
negotiate and sell its interest in the Land to a third party
at a higher amount, under terms and conditions which are no
less favorable than those contained in the original offer
notice to RDP. If RDP has declined to make an offer within
that forty-five (45) day period, then, in that event, for the
next one hundred and eighty (180) days (subject to extensions
not to exceed, in the aggregate, sixty (60) days) after the
expiration of the aforesaid forty-five (45) day period, the
Agency can sell to a third party at any price under terms and
conditions which are no less favorable than those contained in
the original offer notice to RDP. The Agency shall not sell
less than its entire interest in the Land.
5.12 Declaration of Covenants and Restrictions.
Restrictive covenants shall be recorded against the land
comprising the Hotel requiring the Hotel to be operated
exclusively as a convention center hotel meeting the quality
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standards specified in subparagraph 5.13 hereinbelow as well
as forbidding the future sale of hotel rooms as either (i)
condominium units, (ii) cooperative units or (iii) time-share
uni ts ; provided, however, RDP shall be allowed to form a
condominium comprising two (2) units consisting of Hamp's
Restaurant and the remainder of the Hotel improvements. These
restrictive covenants shall also forbid the separate sale of
either the RP Hotel or the Shorecrest Hotel. These restrictive
covenants shall become effective at the date of execution of
the Ground Lease and shall remain in effect until the earlier
to occur of (i) the termination of the Redevelopment Plan
(without regard to any extension thereof) or (ii) the
termination of the convention center agreement referenced in
Paragraph 10 hereinbelow.
5.13 Quality Standards. RDP will be required to
operate the Hotel as a first class, upscale convention center
hotel, including high-quality banquet, convention and meeting
services and facilities, multiple food and beverage outlets,
room service, bell service, laundry and valet services, a
health and fitness facility, and such other services as are
generally provided by comparable upscale convention center
hotels of national repute, consistent with the Hotel's physical
facilities. In any event, the quality of the Hotel operations
and facilities (consistent with the Hotel's physical facilities
as they then exist) will meet the quality standards which have
been developed from the system in effect for the Crowne Plaza
Hotels as measured by the "Crowne Plaza Inspection and Grading
System" (the "Measuring System").
5 .13.1 The pass/fail scores and the cure periods
stated in the Measuring System shall be modified by the
Lessor so that the required level of quality is higher
than that stated in the Measuring System. The quality
standards achieved by the Hot~l must comply with the new
pass/fail scores and cure periods set by the Lessor.
5.13.2 Any future changes in the Crowne Plaza quality
standards and the Measuring System as applied to the Hotel
by this Letter of Intent must be approved by the Lessor
prior to their being applicable to the Hotel.
5.13.3 The failure to operate the Hotel as required
above will constitute an event of default under the Ground
Lease and, if not cured, the Lessor will be entitled to
enforce this provision with appropriate remedies,
including termination and/or cure rights. Notwithstanding
the foregoing, Hotel Operator (as defined hereinbelow)
will not be required to fund monies for the replacement of
furniture and equipment in order to meet the foregoing
standard. The foregoing shall not be deemed to diminish
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RDP's obligation to maintain the Hotel consistent with the
physical facilities (including FF&E) of the Hotel pursuant
to the Agreements.
5.14 The provisions of subparagraph 7.8 hereinbelow
entitled Management Personnel shall also be incorporated in
the Ground Lease.
5.15 Condominium Provisions. The Ground Lease shall
contain the required provisions under Section 718.401, Florida
Statutes (1995) to submit the leasehold to a condominuum
regime.
5.16
and such
parties.
The Agreements will include customary provisions
other provisions mutually satisfactory to the
6 . AGENCY APPROVAL RIGHTS:
The Agreements will provide the following approval rights for
the Agency:
6.1 Plans.
6.1.1 The Agreements will include plans and
specifications (the "Plans") for the construction of the
Hotel, a pre-construction budget and development budget
which will have been approved by the Agency and RDP
jointly as part of the negotiation of the Agreements. The
budgets will include all of RDP's (and its affiliates')
development fees, reimbursables, payments to affiliates
and such other items reasonably requested by the Agency.
The Agreements will include a timetable for submission and
approval of final plans. RDP will provide to the Agency a
critical-path schedule prior to the st~rt of construction.
6.1.2 The Agency will have the right to approve
material changes, additions and alterations contained in
the final plans to the extent such final plans deviate
from what was contemplated by the approved Plans. Any
objections by the Agency to material changes, additions
and alterations will be reasonable and specific, and, at
the Agency's option, may include alternate choices which
would not result in extra cost as compared to the original
cost without said changes, additions and alterations.
Notwi thstanding the Agency's approval of any plans or
specifications and changes thereto, RDP will be required
to comply with all applicable laws with respect to the
design, construction and operation of the Hotel,
including, without limitation, the obtaining of any
required consents and permits required under applicable
laws.
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6.1.3 The Agency's approval rights will not cover
areas of interior design and decor except to the extent
reflected in Finish Schedules contained in the approved
Preliminary Plans. The Agency will have the right to
inspect the Hotel during construction and to have an on-
site representative at its sole cost and expense. RDP
will not commence construction on any portion of the Hotel
until any required approval of applicable final plans has
been obtained from the Agency.
6.1.4 The Agency, in its proprietary capacity, has
approved the preliminary plans and specifications for the
RP Hotel and the Shorecrest Hotel which were approved by
the joint Design Review and Historic Preservation Boards
in December 3 , 1996 . The Agency, in its proprietary
capacity, has also approved the preliminary estimated
budgets for the RP Hotel and the Shorecrest Hotel as
described in Paragraph 2 hereinabove.
6.2 Financial Statements. RDP shall not be required to
provide the Agency with any financial statements so long as
(i) the Base Rent under the Ground Lease is fully paid, (ii)
the Additional Rent under the Ground Lease is fully paid;
(iii) the Incentive Rent under the Ground Lease is fully paid
if any was due; and (iv) the Ground Lease is not otherwise in
default. In all other circumstances, RDP will deliver to the
Agency monthly unaudited and annual audited financial
statements for the Hotel and the Agency will be provided
annually with an information copy of a projected income
statement reflecting the budget for the upcoming year.
Notwithstanding anything to the contrary, in all cases the
Agency will be provided annually with a statement of gross
revenues (which will contain, without limitation, occupancy
and average daily rate information) and an annual statement of
FF&E reserve expendi tures and repair and maintenance
expenditures. All financial statements will be prepared in
accordance with the Uniform System of Accounts for Hotels (8th
Revised Edition) ("USAH"). All financial statements and books
of account relating to the operation of the Hotel and/or
determination of rent will be available for audit and
examination. The Agency and its representatives shall have,
during normal business hours and upon reasonable advance
notice, access to inspect (but not photocopy) the books and
records of RDP and Hotel Operator pertaining to the operation
of the Hotel, which books and records shall be kept at the
Hotel. The Agency shall have the right to cause an audit by
any recognized accounting firm of such books and records to be
made at any time (but not more frequently than one (1) time in
any twelve (12) month period), at the Agency's expense (a copy
of which shall be delivered to RDP). Such right to inspection
and audit may be exercised at any time within three (3) years
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after the end of the lease year to which such books and
records relate, and RDP and Hotel Operator shall maintain all
such books and records for at least such period of time and,
if any dispute between the parties has ari'sen and remains
unresolved at the expiration of such period of time, for such
further period of time until the resolution of such dispute.
The Agency will have the right to challenge any expenditure
that is not properly calculated, which represents an overhead
cost properly chargeable to the management company's home
office (including subsidiaries and affiliates of the
management company), or any costs fraudulently incurred. In
the event the Agency's audit shows that the Agency's share of
Incentive Rent has been understated by three (3%) percent or
more, then RDP will pay to the Agency the reasonable cost of
such audit in addition to any deficiency payment required.
6.3 Sale of the Hotel.
6.3.1 Sale Defined. A "sale" under this
subparagraph 6.3 shall be deemed to mean any transfer by
operation of law or otherwise by RDP of a fifty percent
(50%) or more interest in the Hotel or the Ground Lease or
any transfer by operation of law or otherwise by any of
the Class A members, Class B members or any other members
of RDP of fifty percent (50%) or more of the interests, in
the aggregate, in RDP.
6.3.2 The Hotel and/or RDP's interest in the Ground
Lease may not be sold to a non-African-American buyer at
any time within five (5) years after the Opening Date.
After such five (5) year period, RDP may sell the Hotel
and/or its interest in the Ground Lease to a non-African-
American buyer provided that the Agency's entire interest
in the Land has been previously or is simultaneously
purchased by RDP.
6.3.3 Subject to Paragraph 12 hereinbelow, RDP may
sell the Hotel and/or its interest in the Ground Lease to
an African-American buyer, approved by the Agency, without
RDP purchasing the Agency's interest in the Land.
6.3.4 When Transfer Not A Sale. The following
events shall not constitute a sale under subparagraph 6.3
hereinabove:
A. A transfer of any of the interests of the
Class A Members, Class B Members or other
members of RDP of their interests in RDP to
any other Class A Member, Class B Member or
other member of RDP or to a family member,
trust, or other entity required or desirable
for estate planning purposes or to an entity
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with regard to which the majority interest is
controlled by an existing principal of RDP.
B. A transfer of the leasehold to a purchaser at
a foreclosure sale.
C. A deed in lieu of foreclosure of the
leasehold.
D. A sale by a lender who acquires title to the
leasehold at a foreclosure sale and
subsequently sells the leasehold to a bona
fide purchaser for value; provided however,
the restriction in subparagraph 6.3.5
hereinbelow shall remain applicable to this
subsequent sale.
6.3.5 Additional Restriction on Sale.
Notwithstanding the provisions of subparagraph 6.3.4
hereinabove, the Hotel or RDP's interest in the Ground
Lease may not be sold in whole or in part under any
circumstances to a foreign government or instrumentality
thereof or an entity controlled, directly or indirectly,
thereby without the approval of the Agency, in the Agency's
sole discretion.
6.3.6 The entire contents of this subparagraph 6.3
hereinabove are a material inducement for the City and the
Agency to enter into this Letter of Intent and the
Agreements with RDP.
6.3.7 Notwithstanding anything to the contrary, RDP
may not sell the Hotel and/or its interest in the Ground
Lease by selling individual hotel room condominium units,
cooperative units or time-share units.
6.3.8 Subject only to the provisions of subparagraph
11.4, the sale of Hamp's Restaurant will not be subject to
the Agency's approval.
6.4 New Manaqement Company. The Agency will have the
right to approve a new hotel operator (including the sale or
transfer of a fifty (50%) percent or greater interest in the
current Hotel Operator) if the new hotel operator is not a
"permitted operator" which is defined as a hotel operator which
(i) is not controlled, directly or indirectly, by a foreign
government or instrumentality thereof or an entity controlled,
directly or indirectly, thereby; (ii) has been engaged in the
operation or management of hotels for at least the previous
five (5) years and has operated or managed during such five
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(5) year period at least three (3) first-class hotels; and
(iii) has a national marketing operation under a hotel chain
which has a national marketing operation under a national
hotel flag. The Agency shall receive ninety (90) days prior
written notice regarding a change to any new hotel operator.
If the Agency does not approve the new hotel operator, then,
in that event, RDP shall not enter into a contract with that
new hotel operator. The new hotel operator shall also be
subject to the radius restriction contained in subparagraph
7.7 hereinbelow. At all times, the Hotel shall have only one
(1) hotel operator; i. e., the RP Hotel and the Shorecrest
Hotel shall be managed by the same hotel operator.
6.5 Riqht to Cure. The Agency will have the right to cure
defaults by RDP under any mortgage, the Hotel Management
Agreement, the Agreements and such other agreements as the
parties may agree upon, and all such agreements will so
provide.
7 . HOTEL MANAGEMENT AGREEMENT:
Pursuant to a management agreement (the "Hotel Management
AlJreement" ), the Hotel will be operated by Hospi tali ty Partners
("Hotel Operator") as a first class, upscale convention property in
the Crowne Plaza Hotels chain in accordance with the following
p]~ovisions :
7 . 1 Manaqement. The Hotel will be managed by Hotel
Operator as part of the Crowne Plaza Hotels chain in
accordance with the standards set forth in the Ground Lease,
Hotel Management Agreement and Agreements. Hotel Operator
will have exclusive authority to operate the Hotel in the name
and for the account of RDP.
7.2 Subordination. All manaaement fees are subordinate to
the payment of all rents due under the Ground Lease.
7.3 Pre-Openinq Services. Hotel Operator will provide
required services to RDP to prepare the Hotel for opening,
including among other things, (i) recruiting, training and
employing (in the name of RDP) Hotel staff; (ii) pre-opening
marketing and advertising; (iii) negotiating contracts for
stores, concessions, leases, supplies and similar items; (iv)
assistance in obtaining necessary licenses and permits; and
(v) assistance in purchasing initial operating supplies.
7.4 Term. Five (5) years from the Opening Date (with
appropriate commencement of pre-Opening Services prior to this
date) with subsequent five (5) year renewal periods unless
canceled upon sixty (60) days notice prior to the end of any
five (5) year period by either RDP or the Hotel Operator;
provided however, the Hotel Management Agreement shall not be
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canceled, without Agency approval, if (i) the Agency's entire
interest in the Land with agreed upon return is not purchased
in full pursuant to subparagraph 5.10 hereinabove or (ii) the
Ground Lease is in default. Notwithstanding the foregoing,
RDP may cancel the Hotel Management Agreement for cause or as
may otherwise be provided in the Hotel Management Agreement.
7.5 Operatinq Deficits. As long as the Hotel Management
Agreement is in effect, the Hotel Operator will fund operating
deficits (defined hereinbelow) of the Hotel up to an aggregate
amount of one million dollars ($1,000,000).
7.5.1 "Operating Deficits" is defined as Hotel
Revenue (calculated in accordance with USAH) from all
sources from the operation of the Hotel less normal
operating expenses (excluding depreciation), debt service
and all of the rents due under the Ground Lease in so far
as such deductions are in excess of Hotel Revenue.
7.5.2 The amount that the Hotel Operator will fund
to cover operating deficits in anyone (1) year is a
maximum of two hundred thousand dollars ($200,000).
7.5.3 Any amounts funded by the Hotel Operator under
this subparagraph 7.5 hereinabove will be repaid by RDP
with interest at ten (10%) percent from the next available
net cash flow from the Hotel after the payment of all of
the rents due under the Ground Lease.
7.6 FF&E Reserve. RDP will be required to establish a
reserve for replacement and additions to furniture and
equipment initially funded at three ( 3 % ) percent of Hotel
Revenue in the first fiscal year, increasing to four (4%)
percent in the second fiscal year and five (5%) percent in the
third fiscal year and each fiscal year thereafter. The FF&E
Reserve will be held in a segregated account and such funds
shall be used only for replacements and additions as
aforesaid.
7.7 Radius Restriction. Without the prior consent of the
Agency, Hotel Operator will not operate a hotel of comparable
quality consisting of six hundred (600) or more rooms and
forty thousand (40,000) or more square feet of meeting space
within the area comprised of Dade County, Florida, north to
and including the City of Fort Lauderdale, Florida (the
"Territory"); provided, however, for ten (10) years from the
date of execution of the definitive Agreements, in addition to
the restriction indicated above, the restriction shall include
a full service hotel of three hundred (300) or more rooms and
the Territory under this subparagraph 7.7 shall be comprised
of Dade County, Florida east of Biscayne Bay excluding Key
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Biscayne, Florida. This radius restriction will terminate or
exclude certain properties as described below, as applicable,
upon the occurrence of any of the following events:
(i) if Hotel Operator purchases or is purchased by
an entity already owning two (2) or more hotels as part of
a chain (a "Hotel Chain"), then, in that event, this
radius restriction shall not be applicable to any hotels
comprising a portion of the Hotel Chain at the time Hotel
Operator is acquired or acquires the Hotel Chain;
(ii) the purchase of the Agency's interest in the
Hotel, including the land and improvements, by RDP; and
(iii) the termination of the Redevelopment plan
(without regard to any extension thereof).
7.8 Manaqement Personnel. At all times, twenty-five (25%)
percent of the management personnel of the Hotel and twenty-
five (25%) percent of the supervisory staff of the Hotel must
be of African-American origin.
7.9 The Hotel Operator shall not have the right to
terminate the Hotel Management Agreement in the event of a
default by RDP under the Ground Lease or the Agreements so
long as the Agency, Lender or other third party assumes RDP's
current obligations. However, the Agency and/or the Lender can
terminate the Hotel Management Agreement at no cost and
without liability in the event of a default by RDP under the
Ground Lease and/or the Agreements.
8. INTENTIONALLY OMITTED.
9. FRANCHISE AGREEMENT:
9.1 Franchise Affiliation. RDP shall enter into a
"Franchise Affiliation" with Holiday Inn's Franchising, Inc.
for a Crowne Plaza Resort ("Crowne Plaza") which shall also be
referred to as the "Hotel flag." This affiliation cannot be
changed or terminated by RDP without the written approval of
the Agency; provided,' however, RDP may cancel this affiliation
for cause; provided further, however; the selection of any new
franchisor shall be subject to the approval of the Agency.
9.2 Radius Restriction. without the prior consent of the
Agency, Crowne Plaza will not own, operate or grant an
additional franchise to any hotel consisting of six hundred
(600) or more rooms and forty thousand (40,000) or more square
feet of meeting space within the area comprised of Dade
County, Florida, north to and including the City of Fort
Lauderdale, Florida ( the "Territory"); provided, however, for
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ten (10) years from the date of execution of the definitive
Agreements, in addition to the restriction indicated above,
the restriction shall include a full service hotel of three
hundred ( 300) or more rooms and the Territory under this
subparagraph 9.2 shall be comprised of Dade County, Florida
east of Biscayne Bay excluding Key Biscayne, Florida. This
radius restriction will terminate or exclude certain
properties as described below, as applicable, upon the
occurrence of any of the following events:
(i) if Crowne Plaza purchases or is purchased by an
entity already owning two (2) or more hotels as part of a
chain (a "Hotel Chain"), then, in that event, this radius
restriction shall not be applicable to any hotels
comprising a portion of the Hotel Chain at the time Crowne
Plaza is acquired or acquires the Hotel Chain;
(ii) the purchase of the Agency's interest in the
Hotel, including the land and improvements, by RDP;
(iii) the termination of the Redevelopment Plan
(without regard to any extension thereof);
(iv) to the extent Crowne Plaza is operating or
franchising any properties in the Territory as of the date
of this Letter of Intent, such properties shall be
excluded from this radius restriction; and
(v) replacements or substitutions of any properties
presently located within the Territory.
9.3 Quality Standard. The quality standards stated in
subparagraph 5.13 hereinabove are incorporated by reference in
this Paragraph 9.
9.4 Crowne Plaza shall not have the right to terminate the
Franchise Agreement in the event of a default by RDP under the
Ground Lease or the Agreements so long as the Agency, lender
or other third party assumes RDP's current obligations.
However, the Agency and/or the lender can terminate the
Franchise Agreement at no cost and without liability to the
Agency or the Lender in the event of a default by RDP under
the Ground Lease and/or the Agreements.
10. CONVENTION CENTER:
RDP will enter into an agreement with the City pursuant to
which the improvements pertaining to the Hotel will be operated
exclusively as a hotel, with appropriate amenities, and rooms will
be made available to support Convention Center events according to
the following formula: The Hotel will block out three hundred
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fifty (350) rooms per day for up to a maximum of fourteen (14) days
out of every month. The Hotel may release any blocked rooms for
which a contract has not been received by the Greater Miami
Convention & Visitors Bureau two (2) years in advance of a
pa.rticular month. Thus, for example, the rooms blocked for the
month of December 2000 would have a release date of December 1,
1998. The Hotel will participate in bidding for lodging for city
wide meetings on a competitive basis. The agreement will also
provide for joint marketing arrangements between the Hotel and the
City and for the designation of the Hotel as a primary supplier of
hotel services to support the Convention Center. The agreement
will further provide that the Hotel will be operated exclusively as
a hotel during term of the agreement as well as forbidding the
future sale of hotel rooms as either (i) condominium units, (ii)
cooperative units or (iii) time-share units. The term of the
aqreement shall be twenty-five (25) years from the Opening Date;
provided however, the agreement shall terminate upon the earlier to
occur of (i) the termination of the Redevelopment Plan (without
rl~gard to any extensions thereof) or (ii) the City's failure to
ma.intain the Convention Center at its present location in at least
i1:s present size with no material adverse change in its condition
o]~ no plans for an imminent renovation if there exists a material
change in its condition.
11. SHORECREST HOTEL:
11.1 One Operator and One Flaq. Both the RP Hotel and
the Shorecrest Hotel shall, without interruption, be operated
by the same Hotel Operator and under the same Hotel flag.
11.2 Convention Center Aqreement. Shorecrest LC shall
enter into a Convention Center Agreement as described in
Paragraph 10 hereinabove for the purpose of including the
Shorecrest Hotel as part of that agreement.
11.3 RDP and Jefferson Plaza, L.P. Aqreement Executed
on October 9, 1996 and Supersedinq the Prior May 29, 1996
Aqreement ("Constructa Aqreement"). The Constructa Agreement
regarding the property just south of the Shorecrest Hotel
shall be consistent with the ownership and operation of the
Hotel as outlined in this Letter of Intent and as otherwise
required by the Agency. The following matters relating to the
Constructa Agreement are to be included in the resulting
access easement to be recorded in the Public Records of Dade
County, Florida:
11.3.1 The term "room service" as used in the
Constructa Agreement shall mean food delivered to Hotel
rooms from the Hotel kitchen which shall be paid for
separately by Hotel guests.
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11.3.2 The term "laundry services" as used in the
Constructa Agreement shall mean dry cleaning services
provided to guests on a chargeable basis.
11.3.3 RDP and the Hotel Operator reserve the right
to limit access to Hotel services and amenities by
Constructa condominium unit owners during such times when
Hotel occupancy is at such a level that, in the sole
judgment of RDP or the Hotel Operator, additional demand
for Hotel services by Constructa condominium unit owners
will compromise the quality of services rendered to Hotel
guests and/or violate any existing laws or ordinances.
11.3.4 Constructa condominium unit owners must
present identification cards any time they desire to use
the Hotel services and amenities and they must otherwise
comply with all security and use requirements established
by RDP and/or the Hotel Operator.
11.3.5 The Constructa condominium association or the
developer of the Constructa condominium shall pay all
association fees, assessments, expenses and costs of any
kind related to any space it leases or purchases that is
located on RDP property.
11.4 Hamp's Jazz Club and Restaurant ("Hamp's"). RDP
Shorecrest Hotel Limited Company shall enter into a lease
agreement or purchase agreement with Hamp' s Entertainment,
LLC, one (1) of whose owners is Lionel Hampton, to lease or
purchase approximately twelve thousand (12,000) square feet of
retail space in the Shorecrest Hotel for the operation of
Hamp's under the following terms and conditions:
11.4.1 Commencement. Hamp's shall open for business
within one hundred twenty (120) days of the Opening Date.
11.4 .2 Lease Execution. The lease agreement or
purchase agreement with Hamp's shall be executed no later
than the earlier of (i) one hundred twenty (120) days
after the date of execution of this Letter of Intent; or
(ii) the date of execution of the Agreements.
11.4.3 Substitution for Hamp's. RDP may substitute
another comparable destination type restaurant for Hamp's,
subject to approval by the Agency, within one hundred
twenty (120) days of execution of this Letter of Intent.
11.5 Title to Shorecrest Hotel Land. The acquisition
of the Shorecrest Hotel by the Agency or the City, as
applicable, shall be subject to the following:
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A. If RDP assigns all of its interest in its
contracts (the "Contracts") to purchase the
Shorecrest Hotel land and the Shorecrest Hotel
ground lease (the "Property") to the Agency or the
City, as applicable, then, in that event, the
Agency or the City, as applicable, shall
consummate the transactions contemplated in the
Contracts as the Buyer.
B. If RDP does not assign its interest in the
Contracts as aforesaid, then, in that event, RDP
shall consummate the transactions contemplated in
the Contracts and subsequently sell the Property
to the Agency or the City, as applicable.
C. The Agency or the City, as applicable, shall take
title to the Property no later than at the time of
execution of the definitive Agreements.
D. The total funding obligation of the Agency (the
"Shorecrest Purchase Price") for the acquisition
of the Property shall be four million five hundred
thousand dollars ($4,500,000) and RDP shall pay
all costs and expenses in connection with the
acquisition of the Property that exceed the
Shorecrest Purchase Price.
E. At the real estate closing for the acquisition of
the Property, RDP shall provide the balance owing
after deducting the Agency's funding obligation
for the acquisition of the Property.
F. After the acquisition of the Property by the
Agency or the City, as applicable, in the event
the present negotiations between the Agency and
RDP involving this Letter of Intent and the
subsequent definitive Agreements terminate on a
permanent basis, then, in that event, as further
defined in an agreement to be negotiated among the
Agency, the City and RDP, the Agency or the City,
as applicable, shall, at the option of RDP, either
( i ) pay to RDP the monies it funded for the
purchase of the Property in excess of the
Shorecrest Purchase Price and keep the Property;
or (ii) transfer the Property to RDP in exchange
for payment by RDP to the Agency or the City, as
applicable, of the Shorecrest Purchase Price.
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12. AFRICAN-AMERICAN OWNERSHIP:
Consistent with (i) the Agency's and the City's decision to make
a substantial commitment to provide the African-American community
with a significant opportunity in the hospitality industry and (ii)
the intent of the Request for Proposals issued by the Agency,
oiflnership of the Hotel (i. e., both hotels) shall at all times
during the life of the Agreements be as follows:
A. During the first five (5) year period after the
Opening Date, the beneficial ownership of the Hotel
shall be over fifty percent (50%) owned by African-
Americans pursuant to Section V of the Request for
Proposals issued by the Agency.
B. Thereafter, the beneficial ownership of the Hotel
shall be over fifty percent (50%) owned by African-
Americans if the Agency's entire interest in the Land
with agreed upon return has not been purchased in full
pursuant to subparagraph 5.10 hereinabove; provided
however, if the Agency's interest in the Land with
agreed upon return has been purchased in full as
aforesaid, then, in that event, there shall be no
requirement for African-American ownership of any
portion of the Hotel.
c. The new amount to which the Agency's interest in the
rental payments under the Ground Lease shall be
subordinate after any transfer of ownership as
aforesaid in this Paragraph 12 shall never exceed the
balance on the original first ten million dollar
($10,000,000) subordinated amount after deducting all
principal payments received by Lender up to the time
of transfer of ownership as aforesaid in this
Paragraph 12.
D. Notwithstanding anything contained in this Paragraph
12 to the contrary, the Agency's entire interest in the
Land with the agreed upon return must be purchased in
full pursuant to subparagraph 5.10 hereinabove at the
expiration of twenty-five (25) years from the Opening
Date by the then owner of the Hotel.
E. If the provisions of this Paragraph 12 are declared
invalid by a court of competent jurisdiction, then, in
that event, the remaining provisions of this Letter of
Intent are intended to be severable from these
provisions and will be unaffected by such invalidity
and this Letter of Intent is to be interpreted as if
these provisions were never contained in same.
Notwithstanding the provisions of this subparagraph
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12. E and except for the provisions of paragraph 13
and subparagraph 15.13, this Letter of Intent is non-
binding as provided in subparagraph 15.7.
13. DESIGN DEVELOPMENT EXPENSE REIMBURSEMENT:
The parties to this Letter of Intent acknowledge that RDP will,
o E necessity, incur significant out-of-pocket costs for
professional architectural design, engineering and other technical
advice and services in connection with the design, construction and
p~rmitting of the Hotel ("Design Costs") prior to the execution of
t1e Agreements. In consideration of the foregoing, and in order to
i1sure the timely consummation of the transactions contemplated
h~reby, RDP and the Agency have agreed that such costs will be
slbject to reimbursement as follows:
A. If RDP has not, within sixty (60) days from the date
of execution of this Letter of Intent, entered into
binding financial commitments consistent with this
Letter of Intent to obtain the first mortgage
financing as contemplated by subparagraph 5.9
hereinabove, RDP shall bear all Design Costs incurred
by it.
B. If, by the date of execution of the definitive
Agreements, either RDP or the Agency does not have
ready and available its share of the debt funding or
equity, then, in that event (i) if RDP has not
complied as aforesaid, it shall be responsible for one
hundred percent (100%) of the Design Cost; and (b) if
the Agency has not complied as aforesaid, it shall be
responsible for one hundred percent (100%) of the
Qualified Design Costs.
C. If the Agreements are not in final form acceptable to
the parties for execution by October 15, 1997, for any
reason whatsoever, including the inability of both the
Agency and RDP to meet their respective equity and
debt commitments, RDP shall bear one half of the
Qualified Design Costs and the Agency shall no later
than November 15, 1997, reimburse RDP for one half of
the Qualified Design Costs.
D. All time periods stated in this Paragraph 13 shall be
extended for the period of delay if said delay is
caused by force majeure or lawsuits filed by third
persons not a party to this Letter of Intent.
The term "Qualified Design Costs" shall mean Design Costs in an
anount not to exceed six hundred thousand dollars ($600,000).
Q.lalified Design Costs shall not include any monies spent by RDP
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?rior to June 6, 1996 and shall not include any monies spent by RDP
towards deposits under the Shorecrest Hotel Contracts.
14. PERMIT FEES AND EXPEDITED PROCESSING:
14.1 Permit Fees. The Agency agrees hereby to assume
payment responsibility for any and all permits, now or
hereafter, required to be obtained from the City for the
construction of the Hotel which include, without limitation,
building permit applications, inspection, certification,
impact and connection fees that the City may levy by or
through its Public Works Department (including, without
limitation, water and sewer fees) and those fees listed on
Exhibit B attached hereto and made a part hereof as if fully
set forth herein and in the City of Miami Beach Building
Department Fee Schedule, as amended through September 16, 1992
by Ordinance Number 92-2796, or the most current edition
adopted by the City, which fee schedule is hereby incorporated
by reference and made a part of this Agreement. The Agency
shall remain responsible for payment of said fees
notwithstanding any and all modifications or changes in price
structure as imposed by the City. The Agency will cooperate
with RDP in an effort to persuade Metropolitan Dade County to
waive its fees relating to the Hotel but does not assume
responsibility for those fees in the event Metropolitan Dade
County refuses to grant any or all such waivers. To the
extent that Metropolitan Dade County does not waive its water
and sewer impact fee, the Agency will pay that fee subject to
being reimbursed by RDP over a twenty-five (25) year term at
eight percent (8%) per annum interest.
14.2 Expedited Processinq. The City shall make
reasonable efforts to provide for expedited handling of all
permit requests and/or review board hearings relating to the
construction of the Hotel.
15. GENERAL:
15.1 Disputes. Any controversy or claim arising out of
any of the Agreements (or the breach thereof) shall be decided
by litigation except for controversies or claims specifically
relating to development or construction matters and arising
during the development of the Hotel ("Construction Claims").
Construction Claims shall be settled by an expedited binding
arbi tration regime to be negotiated by the Agency and RDP,
which will include, among other things, the appointment of a
qualified arbitrator and an alternative qualified arbitrator
prior to execution of the Agreements.
15. 2 Liability. Subject to subparagraph 5.8.3
hereinabove, the Agreements will incorporate provisions with
respect to the limitation of RDP' s, the Agency's and the
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City's liability thereunder, as applicable, mutually
acceptable to the parties, with the same providing for
reasonable damages, but no punitive damages; provided however,
the liability of the Agency and the City, together and in the
aggregate, and the liability of RDP, shall not exceed two
million dollars ($2,000,000) under all the Agreements, in the
aggregate.
15.3 Definitive Aqreements. Upon execution of this
Letter of Intent by RDP, the approval of the terms hereof by
the appropriate Agency and City bodies and the execution of
this Letter of Intent by the appropriate Agency and City
officials, the Agency's counsel will draft the Agreements
(other than the Hotel Management Agreement, agreements to
which the Agency or City is not a party and other agreements
as the parties may agree). The Agreements will contain, among
other things, representations, warranties, conditions,
covenants and indemnities and the like typical in similar
transactions, subject to the terms hereof. Furthermore, the
parties to this Letter of Intent recognize that due to the
complexity of the structure of these transactions, not all of
the major legal issues have been covered by this Letter of
Intent. The consummation of the transactions contemplated
hereby is conditioned upon the negotiation and execution of
the Agreements with terms, provisions and conditions mutually
acceptable to RDP, the Agency and the City as well as the
obtaining of all necessary financing and the satisfaction of
the parties with all other agreements and matters necessary or
desirable with respect to the transactions contemplated
hereby. The parties shall comply with all applicable laws,
statutes, regulations and requirements and performance by the
Agency, the City and RDP under this Letter of Intent and the
Agreements shall be subject thereto. The following is a list
of the Agreements contemplated by this Letter of Intent (said
list is not meant to be inclusive of all required agreements
and additional agreements will be executed by the parties to
this Letter of Intent as required):
LIST OF AGREEMENTS
A. GROUND LEASE
B. UNITY OF TITLE AGREEMENT
C. HOTEL MANAGEMENT AGREEMENT
D. ASSET MANAGEMENT AGREEMENT
E. FRANCHISE AGREEMENT
F. CONSTRUCTA AGREEMENT
G. HOTEL DEVELOPMENT AGREEMENT
H. PERSONAL IRREVOCABLE AND UNCONDITIONAL
GUARANTEES
I. CONVENTION CENTER AGREEMENT
J. ATTORNMENT AGREEMENT
K. RETAIL SPACE MASTER LEASE
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L. BILL OF SALE
M. DECLARATION OF COVENANTS AND RESTRICTIONS
N. GARAGE EASEMENT AGREEMENT
O. TITLE COMPANY RECORDING LETTER OF
DIRECTION (RP HOTEL)
P. TITLE COMPANY RECORDING LETTER OF
DIRECTION (SHORECREST HOTEL)
15.4 Cross-Defaul t. All of the Agreements to which the
parties to this Letter of Intent are parties will contain
cross-default provisions triggered by a default under any of
the Agreements.
15.5 Assiqnment by Aqency. In the event the Agency
ceases to exist, the Agreements will provide that the rights
granted to the Agency will inure to the benefit of the City
and the City will be bound to perform the obligations therein.
15.6 Termination. This Letter of Intent may be
terminated by either party if the Agreements have not been
executed by October 31, 1997.
15.7 Non-bindinq. Except for Paragraph 13 hereinabove
and subparagraph 15.13 hereinbelow which the parties to this
Letter of Intent intend to be binding, (i) no party shall have
any legally binding obligation to any other party under this
Letter of Intent until such time as the Agreements are
executed by all parties thereto; and (ii) no party will have
any liability whatsoever under this Letter of Intent to any
other party for failure to perform in accordance with this
Letter of Intent, if any party decides to terminate this
Letter of Intent or for any other reason related to this
Letter of Intent.
15.8 Amendments. This Letter of Intent may be amended
only by a written agreement executed by both of RDP and the
Agency.
15.9 Governinq Law and Venue. This Letter of Intent,
the Agreements and their interpretation, validity and
performance, shall be governed by the laws of the State of
Florida, both substantive and remedial, without regard to
principles of conflict of laws. The venue for any litigation
arising out of this Letter of Intent or the Agreements shall
be the Eleventh Judicial Circuit, Dade County, Florida, if in
state court, the U.S. District Court, Southern District of
Florida, if in federal court, and Dade County, Florida, for
expedited arbitration.
15.10 prevailinq Waqe. Construction of the Hotel shall
be subject to full compliance with the City of Miami Beach
33
Execution Copy
Prevailing Wage Ordinance, Miami Beach City Code, Section 31A-
27.
15.11 "Approval" or "Consent". The use of the terms
"approval" or "consent" in this Letter of Intent shall always be
deemed to mean "reasonable approval" or "reasonable consent"
except where specifically provided otherwise.
15.12 Counterparts. This Letter of Intent may be
executed in counterparts and all such counterparts, when taken
together, shall constitute this Letter of Intent.
15.13 Soil Borinqs. After the execution of this Letter
of Intent, RDP shall be allowed to proceed with soil boring
tests on the Hotel Land and RDP hereby agrees to indemnify,
defend and hold harmless the City and the Agency from any and
all liability and costs arising, directly or indirectly, out
of its making these soil boring tests. Other than these soil
boring tests, RDP shall not be allowed to do any other work
involving actual physical movement of earth or materials on
the Hotel Land without the express written permission of the
Executive Director of the Agency. .
15.14 City as Successor to Aqency. When and if the
Agency ceases to exist, the City shall succeed to all of the
rights and responsibilities of the Agency set forth in this
Letter of Intent.
15.15 Successors and Assiqns. All references to any of
the parties to this Letter of Intent shall include their
permitted successors and permitted assigns.
15.16 Attorneys' Fees. In the event litigation arises
solely under Paragraph 13 hereinabove and/or subparagraph
15.13 hereinbelow, and not otherwise, then, in that event, the
prevailing party shall be entitled to recover its attorneys'
fees and court costs, including those involving appeals and/or
post-judgment proceedings, if any.
AOREED AND ACKNOWLEDGED:
/-",
COMPANY
Dated: March 5, 1997
(Signatures continued on the following page...)
34
Execution Copy
/,... "'\,
RDP SHORECREST HOTE;' LIMITED COMPANY
( (.J' ,/ J'
. " i \ 'I \...'\.... "-
By: . c ~I......./ "-
Na~e: . Dona ue Peebles
Title: ~naging ember
.ii"
Dated: March 5, 1997
NT AGf=~Y
(~LA~{~.
Seym Gelber
it e: Chairman
'/ ~ ~
At+"~st: Ow>>o- kk-
Name: Robert Parcher
Title: Secretary
Dated: March 5, 1997
APPROVED AS TO
FORM & lANGUAGE
& FOR EXeCUnON
A:?PRO'VED:
CITY OF MIAMI BEACH b ,~
/ /~/ 6>f! -
"
jHM~ ~5/'J)
, r~.nt A/;Jen~ Dote
Gene'nl COP' \'
Dated: March 5, 1997
Attest:
ymour Gelber
ll~a- r~
APPROVED AS TO
FORM & lANGUAGE
& FOR EXECUTION
,/~~"')
.A::?ZPR.VVED
( /,
.... ./dL /r;,
;z." - ...'-' "-
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3.1 AND 3.2 ONLY: 1I4f11t': ~2.
Dated: March - ";> 1997
Dated: March L,- 1997
~ ,
Dated: March 5- , 1997
Dated: March ~- , 1997
P)}E
~.. ~
J~~~EY' 'J;:~t/~seN ."
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ame:
Title:
-
Dated: March
s;- , 1997
J:\WORK\CLIENTS\CITY.JNM\LOI.19
35
Execution Copy
EXHIBIT "A"
LEGAL DESCRIPTION
RP HOTEL
The South 12.65 feet (measured along the lot line) of Lots
7 and 14, all of Lots 6 and 15 and the North 10.7 feet
(measured along the lot line) of Lots 5 and 16, all in
Block 56, of FISHER'S FIRST SUBDIVISION OF ALTON BEACH,
according to the plat thereof, as recorded in Plat Book 2,
at Page 77, of the Public Records of Dade County, Florida,
together with that certain parcel of land lying East and
adjacent to the above described parcel; said parcel
bounded on the South by the South line of the above
described parcel extended Easterly; bounded on the North
by the North line of the above described parcel extended
Easterly; bounded on the East by the Erosion Control Line
of the Atlantic Ocean and bounded on the West by the East
line of the above mentioned Block 56 (also commonly known
as the Royal Palm Hotel). Said lands containing 0.9941
acres more or less.
SHORECREST HOTEL
The South 40.00 feet (measured along the lot line) of Lots
5 and 16 and the North one-half of Lots 4 and 17, all in
Block 56, of FISHER'S FIRST SUBDIVISION OF ALTON BEACH,
according to the plat thereof, as recorded in Plat Book 2,
at Page 77, of the Public Records of Dade County, Florida,
together with that certain parcel of land lying East and
adjacent to the above described parcel; said parcel
bounded on the South by the South line of the above
described parcel extended Easterly; bounded on the North
by the North line of the above described parcel extended
Easterly; bounded on the East by the Erosion Control Line
of the Atlantic Ocean and bounded on the West by the East
line of the above mentioned Block 56 (also commonly known
as the Shorecrest Hotel). Said lands containing 0.8849
acres more or less.
All lands described above located, lying and being in Section 34,
Township 53 South, Range 42 East, in the City of Miami Beach, Dade
County, Florida.
EXHIBIT liB"
FEES
BlILDING PERMIT
Alterations & repairs
Awnings & canopies
Concrete slab (other than paving)
Demolition of building
Elevator hoistway construction
Fence and/or walls
Landscaping
New building and/or additions
New building other
painting
Parking area lighting
Paving
Roofing (including re-roofing)
Signs
Swimming pools
windows, exterior doors, storefronts & fixed glass
CERTIFICATE OF OCCUPANCY
Certificate of completion
Final certificate of occupancy
Temporary certificate of occupancy
EI.ECTRICAL PERMIT FEE
Combinations
Equipment outlets or permanent connections
Fire detections systems
Fixtures
Generators/transformers, commercial heating equipment & strip
heaters
Machine outlets or permanent connectors
Master televisions, intercom, burglar alarm, telephone & radio
Plummold
Rough wiring outlets
Services
Signs
Special purpose outlets (commercial)
Streamers or festoon lights
Swimming pool lighting
Switchboards
welding machine outlets
MECHANICAL PERMIT FEE
Air conditioning & refrigeration
Amusement rides and devices
Boilers and pressure vessels
Duct work
Elevators, escalators & other lifting apparatus
Furnaces and heating equipment
Internal combustion engines
Storage tanks for flammable liquids
O~?HER FEES
Fire processing fees
Interim general and proprietary fees
Marine structure fees
Miami Beach training fees
Parking impact fees
Radon fees
zoning processing
PLUMBING PERMITTING FEES
Condensate drains
Drainage
Fire control systems
Minimum plumbing fee per permit
Miscellaneous
Natural gas and liquefied petroleum
Rough & set fixtures
Septic/settling tanks, oil interceptors and grease traps
Sewers
Storm & sanitary utility and/or collector lines
Temporary toilets
Water and gas mains
Water heaters (electrical or gas)
Water piping
Water/sewage treatment plants & lift/plumbing stations
PREMISE PERMIT
Initial and final premise permit fee