2016-29289 Reso RESOLUTION NO. 2016-29289
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING AND AUTHORIZING THE
ADMINISTRATION TO NEGOTIATE A LEASE AGREEMENT, CONSISTENT
WITH THE ESSENTIAL TERMS SET FORTH IN THIS RESOLUTION, BETWEEN
THE CITY OF MIAMI BEACH, AS TENANT, AND BEACH TOWER, LLC, AS
LANDLORD, FOR USE OF APPROXIMATELT 3,349 RENTABLE SQUARE FEET
OF PROPERTY, LOCATED AT 1688 MERIDIAN AVENUE, SUITE 801, MIAMI
BEACH, FLORIDA, TO BE USED AS ADMINISTRATIVE OFFICES FOR THE
CITY'S TRANSPORTATION DEPARTMENT; SAID LEASE AGREEMENT
HAVING AN INITIAL TERM OF SIXTY-THREE (63) MONTHS, COMMENCING ON
MARCH 1, 2016, AND ENDING ON MAY 31, 2021, WITH TWO (2) THREE (3)
YEAR RENEWAL OPTIONS, AT THE CITY'S OPTION; AND UPON
SUCCESSFUL NEGOTIATIONS, AUTHORIZING THE MAYOR AND CITY CLERK
TO EXECUTE SAID LEASE AGREEMENT.
WHEREAS, the Transportation Department currently consists of approximately thirteen (13)
employees and all of the staff does not currently fit in the space they occupy within the Public
Works Department; and
WHEREAS, as vacant positions are filled and/or other positions are created, finding office
space for these new employees in existing City facilities is virtually impossible, not to mention they
would not be located with the rest of the department staff; and
WHEREAS, the current space they occupy does not provide an ideal work environment for the
Transportation Department staff; and
WHEREAS, due to the lack of available City-owned office space, the Administration
determined it was necessary to lease office space from a third party landlord; and
WHEREAS, the criteria established by the Administration for the required office space
included the following: 1) approximately 3,000—4,000 rentable square feet, 2) an existing buildout
which met the needs of the Transportation Department and would enable a quick occupancy, 3)
fair market terms & conditions and 4) close proximity to the City Hall complex; and
WHEREAS, the City's Real Estate Office actively searched for office space which met the
established criteria and, due to the importance of being located in close proximity to the City Hall
complex, the search was focused on three (3) multi-tenant office buildings located at the corner of
17th Street and Meridian Avenue; and
WHEREAS, after touring several spaces, and receiving multiple proposals, the Administration
determined the space which best meets the established criteria is located at 1688 Meridian
Avenue, and contains approximately 3,349 rentable square feet; and
•
WHEREAS, the Administration negotiated terms and conditions for a five (5) year lease,
between the City and Beach Tower, LLC, a Delaware limited liability company (Landlord),
containing the following proposed lease terms:
TENANT: City of Miami Beach
LANDLORD: Beach Tower, LLC
PREMISES: 1688 Meridian Avenue, Suite 801
Miami Beach, Florida 33139
SIZE: Approximately 3,349 rentable square feet
TERM: Sixty-three (63) months
RENT ABATEMENT: Three (3) months
LEASE
COMMENCEMENT DATE: March 1, 2016
LEASE
EXPIRATION DATE: May 31, 2021
RENEWAL OPTIONS: Tenant shall have two (2) renewal options for three (3) years each,
at the Tenant's option, at fair market rent.
INITIAL BASE RENT: $29.95 per square foot (estimated to be $100,303 annually; $8,359
monthly) on a triple net (NNN) basis.
BASE RENT INCREASES: Three percent (3%) annually
OPERATING EXPENSES: In addition to Base Rent, Tenant shall pay its pro rata share of
maintenance, insurance and real estate taxes which are estimated
at $13.04 PSF in 2016. Increases in controllable Operating
Expenses shall be capped at no more than five percent (5%)
above the previous year.
TENANT
IMPROVEMENTS: Landlord will provide an allowance of $15.00 per rentable square
foot ($50,235) to be used towards improvements to the Premises.
SECURITY DEPOSIT: None
USE: Administrative offices; and
WHEREAS, the Administration recommends that the City Commission approve and authorize
the Administration to negotiate a lease agreement, based upon the essential terms set forth in this
Resolution.
NOW, THEREFORE, BE IT DULY RESOLVED THAT THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission
hereby approve and authorize the Administration to negotiate a lease agreement between the City
of Miami Beach, as Tenant, and Beach Tower, LLC, as Landlord, for use of approximately 3,349
rentable square feet of property, located at 1688 Meridian Avenue, Suite 801, Miami Beach,
Florida, to be used as administrative offices for the City's Transportation Department; said lease
having an initial term of sixty-three (63) months, commencing on March 1, 2016, and ending on
May 31, 2021, with two (2) three (3) year renewal options, at the City's option; and upon successful
negotiations, authorize the Mayor and City Clerk to execute said lease agreement.
PASSED and ADOPTED this /0 day of Fe rear 2016.
ATTEST:
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COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution Approving And Authorizing The Administration To Negotiate A Lease Agreement Between The City, As
Tenant, and Beach Tower, LLC, As Landlord, For The Use Of Approximately 3,349 Rentable Square Feet Of Property,
Located At 1688 Meridian Avenue, Miami Beach, Florida, For The City's Transportation Department, For An Initial Term Of
Sixty-three(63) Months, Commencing March 1, 2016 And Ending May 31, 2021,With Two (2) Renewal Options For Three
(3) Years Each, At The City's Option; And Upon Successful Negotiations, Authorizing The Mayor And City Clerk To
Execute Said Lease Agreement.
Key Intended Outcome Supported:
N/A
Supporting Data(Surveys, Environmental Scan,etc.):
N/A
Item Summary/Recommendation:
The Administration submitted a similar matter to the Mayor and City Commission at its December 9, 2015 meeting. The
previous matter involved a new lease agreement at 1680 Meridian Avenue for the use of 3,792 square feet,to be used by
the City's Transportation Department, for a period of three (3) years, with one (1) renewal option for three (3) years. The
Mayor and City Commission approved and authorized the Administration to negotiate and finalize said lease agreement.
Subsequent to the December 9, 2015 meeting, the landlord at 1680 Meridian Avenue advised the Administration that it
was moving forward with an alternate prospect and was not going to consummate a lease with the City. Accordingly, the
Administration continued its search for office space.
The criteria established by the Administration for the required office space included the following: 1)approximately 3,000—
4,000 rentable square feet, 2) an existing buildout which met the needs of the Transportation Department and would
enable a quick occupancy, 3) fair market terms & conditions and 4) close proximity to the City Hall complex. It was of
particular importance to identify space in close proximity to the City Hall complex in order to allow the employees to utilize
parking in the City Hall parking garage and 17th Street parking garage.
Subsequently, the Office of Real Estate negotiated terms and conditions for a new lease at 1688 Meridian Avenue
(adjacent to the previously selected building). Prior to execution, the fully negotiated lease agreement shall be subject to
Legal review and approval.
A summary of the proposed lease terms are as follows:
SIZE: Approximately 3,349 rentable square feet
TERM: Sixty-three(63)months
RENT ABATEMENT: Three(3)months
COMMENCEMENT DATE: March 1,2016
EXPIRATION DATE: May 31, 2021
RENEWAL OPTIONS: Two(2)renewal options for three(3)years each,at Tenant's option.
INITIAL BASE RENT: $29.95 per square foot (estimated to be $100,303 annually; $8,359 monthly) on a
triple net(NNN)basis.
BASE RENT INCREASES: Three percent(3%)annually
OPERATING EXPENSES: In addition to Base Rent, Tenant shall pay its pro rata share of maintenance,
insurance and real estate taxes.
TENANT IMPROVEMENTS: Landlord will provide an allowance of$15.00 per rentable square foot ($50,235) to
be used towards improvements to the Premises.
The Administration recommends that the Mayor and City Commission adopt the Resolution.
Advisory Board Recommendation:
N/A
Financial Information:
Amount Account
Source of Fu.*%/ 1 $143,974 FY 2015/16 Fund 106.9615.000349 3o
7"J Funding for future years is subject to budget appropriation.
Finan • I I.- .act Summary: The Base Rental Rate is $29.95 PSF, triple net, with three percent (3%) annual increases,
and Operating Expenses estimated at $13.04 PSF during Year 1. Over the initial five (5) year term of the lease, the
aggregate Gross Rent is projected to be$750,875.
City Clerk's Office Legislative Tracking:
Max Sklar, ext.6116
Sign-Offs:
Department Director Assistant City Manager City M
MAS KGB JL
T:\AGENDA\2016\February\TCED\1688 Meridian\1688 Meridian SUM(Final).docx
AGENDA ITEM C 7 J
MIAMIBEACH
DATE 2-10-(C
MIAMI BEA H
City of Miami Beach, 1700 Convention Center Drive,Miami Beach, Florida 33139,www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Philip Levine and Members ,•f the City � ommission
FROM: _Jimmy L. Morales, City Manage ir
DATE: February 10, 2016
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, APPROVING AND
AUTHORIZING THE ADMINISTRATION TO NEGOTIATE A
LEASE AGREEMENT, CONSISTENT WITH THE ESSENTIAL
TERMS SET FORTH IN THIS RESOLUTION, BETWEEN THE
CITY OF MIAMI BEACH, AS TENANT, AND BEACH TOWER,
LLC, AS LANDLORD, FOR USE OF APPROXIMATELT 3,349
RENTABLE SQUARE FEET OF PROPERTY, LOCATED AT 1688
MERIDIAN AVENUE, SUITE 801, MIAMI BEACH, FLORIDA, TO
BE USED AS ADMINISTRATIVE OFFICES FOR THE CITY'S
TRANSPORTATION DEPARTMENT; SAID LEASE AGREEMENT
HAVING AN INITIAL TERM OF SIXTY-THREE (63) MONTHS,
COMMENCING ON MARCH 1, 2016, AND ENDING ON MAY 31,
2021, WITH TWO (2) RENEWAL OPTIONS FOR THREE (3)
YEARS, AT THE CITY'S OPTION; AND UPON SUCCESSFUL
NEGOTIATIONS, AUTHORIZING THE MAYOR AND CITY
CLERK TO EXECUTE SAID LEASE AGREEMENT.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
BACKGROUND
The Administration submitted a similar matter to the Mayor and City Commission
at its December 9, 2015 meeting. The previous matter involved a new lease
agreement at 1680 Meridian Avenue for the use of 3,792 square feet, to be used
by the City's Transportation Department, for a period of three (3) years, with one
(1) renewal option for three (3) years. The Mayor and City Commission
approved and authorized the Administration to negotiate and finalize said lease
agreement.
Subsequent to the December 9, 2015 meeting, the landlord at 1680 Meridian
Avenue advised the Administration that it was moving forward with an alternate
Commission Memorandum
New Lease Agreement— Transportation Department
February 10, 2016
Page 2 of 3
prospect and was not going to consummate a lease with the City. Accordingly,
the Administration continued its search for office space.
ANALYSIS
The criteria established by the Administration for the required office space
included the following: 1) approximately 3,000 —4,000 rentable square feet, 2) an
existing buildout which met the needs of the Transportation Department and
would enable a quick occupancy, 3) fair market terms & conditions and 4) close
proximity to the City Hall complex. It was of particular importance to identify
space in close proximity to the City Hall complex in order to allow the employees
to utilize parking in the City Hall parking garage and 17th Street parking garage.
Subsequently, the Office of Real Estate negotiated terms and conditions for a
new lease at 1688 Meridian Avenue (adjacent to the previously selected
building). Prior to execution, the fully negotiated lease agreement shall be
subject to Legal review and approval.
A summary of the proposed lease terms are as follows:
TENANT: City of Miami Beach
LANDLORD: Beach Tower, LLC
PREMISES: 1688 Meridian Avenue, Suite 801
Miami Beach, Florida 33139
SIZE: Approximately 3,349 rentable square feet
TERM: Sixty-three (63) months
RENT ABATEMENT: Three (3) months
LEASE
COMMENCEMENT DATE: March 1, 2016
LEASE
EXPIRATION DATE: May 31, 2021
RENEWAL OPTIONS: Tenant shall have two (2) renewal options for three
(3) years each, at the Tenant's option, at fair market
rent.
INITIAL BASE RENT: $29.95 per square foot (estimated to be $100,303
annually; $8,359 monthly) on a triple net (NNN)
basis.
Commission Memorandum
New Lease Agreement— Transportation Department
February 10, 2016
Page 3 of 3
BASE RENT INCREASES: Three percent (3%) annually
OPERATING EXPENSES: In addition to Base Rent, Tenant shall pay its pro
rata share of maintenance, insurance and real
estate taxes which are estimated at $13.04 PSF in
2016. Increases in controllable Operating Expenses
shall be capped at no more than five percent (5%)
above the previous year.
TENANT
IMPROVEMENTS: Landlord will provide an allowance of $15.00 per
rentable square foot ($50,235) to be used towards
improvements to the Premises.
SECURITY DEPOSIT: None
USE: Administrative offices
By comparison, on October 14, 2015, the City Commission approved a lease
agreement with Care Resource for approximately 2,000 square feet of office
space at 1701 Meridian Avenue at a gross rental rate of $33.56 per rentable
square foot on a triple net (NNN) basis.
CONCLUSION
The Administration recommends that the Mayor and City Commission adopt the
Resolution approving and authorizing the Administration to negotiate a lease
agreement, between the City and Beach Tower, LLC, for approximately 3,349
rentable square feet of space, located at 1688 Meridian Avenue, Suite 801,
Miami Beach, Florida; and upon successful negotiations, subject to Legal review
and approval, authorizing the Mayor and City Clerk to execute said lease
agreement.
J LM/KGB/MAS//M
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