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2002-24734 Reso of..~ # RESOLUTION NO. 2OU2~l~ A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, WHICH PROVIDES FOR THE DISMISSAL WITH PREJUDICE OF LITIGATION STYLED GAZIT (MERIDIAN). INC. v. CITY OF MIAMI BEACH, 11 TH JUDICIAL CIRCUIT COURT CASE NO. 00-30164 CA 24, AND FURTHER AUTHORIZING THE MAYOR, CITY CLERK AND ALL NECESSARY CITY PERSONNEL TO EXECUTE SUCH OTHER DOCUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS RESOLUTION; FURTHER APPROPRIATING $5,745,000 FROM THE PARKING ENTERPRISE FUND BALANCE, REPRESENTING THE BALANCE OF THE PURCHASE PRICE REQUIRED PURSUANT TO THE CONTRACT FOR PURCHASE AND SALE BETWEEN GAZIT (MERIDIAN), INC. AND THE CITY OF MIAMI BEACH FOR THE ACQUISITION OF THE PROPERTY LOCATED AT 1701 AND 1721 MERIDIAN AVENUE; APPROPRIATING $90,000 FROM THE PARKING ENTERPRISE FUND BALANCE FOR ASSOCIA TED CLOSING COSTS; APPROPRIATING $50,000 FROM THE GENERAL FUND OPERATING CONTINGENCY TO PERFORM THE NECESSARYREP AIRS REQUIRED AT THE BUILDING UPON ACQUISITION; FURTHER APPROPRIATING $70,000 FROM ACCOUNT #370-8000-361130 TO PURCHASE A REMOTE TELEPHONE SHELF, COMPUTER SERVER, AND THE WIRING NECESSARY TO EFFECTUATE THE CAPITAL IMPROVEMENT OFFICE RELOCATION TO THE BUILDING; FURTHER APPROPRIATING $150,000 FROM THE GENERAL FUND OPERATING CONTINGENCY FOR OPERATING COSTS TO OPERATE AND MAINTAIN THE BUILDING FOR THE REMAINDER OF FY 2002; AND FURTHER AUTHORIZING THE CITY TO EXTEND THE EXISTING MAINTENANCE AND SERVICE AGREEMENTS FOR THE BALANCE OF FY 2002. WHEREAS, on October 17,2001, the Mayor and City Commission of the City of Miami Beach passed Resolution No. 2001-24661 which authorized the execution of the Agreement for Purchase and Sale for the City's purchase of the property located at 1701 and 1721 Meridian Avenue, Miami Beach, Florida which is also known as 777 17th Street (the Equity One Building and parking lot located adjacent thereto )(the "Subject Property"); and WHEREAS, Resolution No. 2001-24661 also authorized the City Manager to negotiate the terms of the Settlement Agreement whereby the owner of the Subject Property Gazit (Meridian), Inc. J ... ., dismissed with prejudice its pending lawsuit in Gazit (Meridian). Inc. vs. City of Miami Beach, 11 th Judicial Circuit Court Case No. 00-30164 CA 24 and further approve the execution of such other documents as they may be necessary to effectuate the intent of Resolution No. 2001-24661; and WHEREAS, via Resolution No. 2001-24661, the City Commission also appropriated $350,000 from the City of Miami Beach Parking Enterprise Fund further required deposit under the Purchase and Sale Agreement, which included an additional $25,000 for due diligence expenses; and WHEREAS, based upon the Administration's comprehensive report relative to the benefits in acquiring the Subject Property as well as favorable input received from the public as a result of the January 10, 2002 public workshop, the Mayor and City Commission deem it in the best interest of the City to purchase the Subject Property and to appropriate $5,745,000 from the Parking Enterprise Fund balance therefore, representing the balance of the purchase price required pursuant to the Contract for Purchase and Sale between Gazit (Meridian), Inc. and the City of Miami Beach for the acquisition of the Subject Property and further appropriating $90,000 from the Parking Enterprise Fund balance for associated closing costs; and further appropriating $50,000 from the General Fund Operating Contingency to perform the necessary repairs required at the Subject Property upon acquisition; and further appropriating $70,000 from Account # 370-8000-361130 to purchase a remote telephone shelf, computer server, and the wiring necessary to effectuate the Capital Improvement Office relocation to the building on the Subject Property; and further appropriating $150,000 from the General Fund Operating Contingency for operating costs to operate and maintain the building on the Subject Property for the remainder ofFY 2002; and WHEREAS, the Mayor and City Commission further find that it is advisable to extend the existing Maintenance and Service Agreement for the Subject Property for the balance ofFY 2002. I I . , ~ NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA as follows: 1. The Mayor and City Clerk are hereby authorized to execute a Settlement Agreement between Gazit (Meridian), Inc. and the City of Miami Beach, Florida, which shall provide for the dismissal with prejudice of the litigation styled Gazit (Meridian). Inc. v. City of Miami Beach, 11th Judicial Circuit Court Case No. 00-30164 ca 24. 2. That the Mayor and City Commission hereby authorize the appropriation of $5,745,000 from the Parking Enterprise Fund balance, representing the balance of the purchase price required pursuant to the Contract for Purchase and Sale between Gazit (Meridian), Inc. and the City of Miami Beach for the acquisition of the Subject Property located at 1701 and 1721 Meridian Avenue, Miami Beach, Florida. 3. That the Mayor and City Commission hereby authorize the appropriation of$90,000 from the Parking Enterprise Fund balance for associated closing costs relative to the Purchase and Sale Agreement. 4. That the Mayor and City Commission hereby authorize the appropriation of$50,000 from the General Fund Operating Contingency to perform the necessary repairs required at the Subject Property upon its acquisition. 5. That the Mayor and City Commission hereby authorize the appropriation of$70,000 from Account # 370-8000-361130 to purchase a remote telephone shelf, computer server, and the wiring necessary to effectuate the Capital Improvement Office relocation to the building on the Subject Property. 6. That the Mayor and City Commission hereby authorize the appropriation of$150,000 from the General Fund Operating Contingency for operating costs to operate and maintain the ~ . building on the Subject Property for the remainder ofFY 2002. 7. That the Mayor and City Commission hereby authorize the City to extend the existing Maintenance and Service Agreements at the Subject Property for the balance ofFY 2002. 8. The Mayor, City Clerk and City Attorney or their respective designees are hereby authorized to take all necessary action and execute such documents as may be necessary to carry out the purpose and intent of this Resolution. PASSED and ADOPTED THIS ATTEST: ~.e~ CITY CLERK F:\A TTOILEVLIRESO&ORDIGAZITMER.WPD APPROVED AS 10 FORM & LANGUAGE & FOR EXECunoN ~--z't'.."~ .,. -' . t ., RESOLUTION NO. 2001-24661 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA AUTHORIZING THE EXECUTION OF TIlE PURCHASE AND SALE AGREEMENT, SUBSTANTIALLY IN TIlE FORM ATfACHED HERETO, FOR THE PURCHASE OF THE PROPERTY LOCATED AT 1701 MERIDIAN AVENUE (THE "SUBJECT PROPERTY" A/KJA 77717TH STREETlfHE EQUITY ONE BUILDING AND PARKING LOT) AND AUTHORIZING THE CITY MANAGER TO NEGOTIATE THE TERMS OF A SETTLEMENT AGREEMENT BETWEEN GAZIT (MERIDIAN) INC. AND THE CITY OF MIAMI BEACH WHICH PROVIDES FOR THE DISMISSAL WITH PREJUDICE OF LITIGATION STYLED GAZIT O\'fERlDIAN) INC. v. CITY OF MIAMI BEACIl, 11TH JUDICIAL CIRCUIT COURT CASE NO. 00-30164 CA 24, AND FURTHER AUTHORIZING THE MAYOR, CITY CLERK AND ALL NECESSARY CITY PERSONNEL TO EXECUTE SUCH OTHER DOCUMENTS AS MAY BE NECESSARY TO EFFEcruATE THE INTENT OF nus RESOLUTION. WHEREAS, Gazit (Meridian) Inc. has heretofore asserted claims against the City of Miami Beach which are set forth in a complaint filed in the Circuit Court for the Eleventh Judicial Circuit Court in and for Miami-Dade County, Florida styled Gmt ()Aeridi8l'l) Inc. v. City of Miami Beach, Circuit Court Case No. 00-30164 CA 24, pertaining to the property located at 1701 Meridian Avenue, Miami Beach, Florida which is also known as 777 17th Street (the Equity One building and parking lot located adjacent thereto) (the "subject property"); and WHEREAS, the parties wish to settle the above-referenced litigation via (a) a Settlement Agreement which will provide that Gazit (Meridian) Inc. shall dismiss with prejudice its pending lawsuit in the above referenced case and (b) a Purchase and Sale Agreement whereby the City will purchase the subject property; and WHEREAS, the City Commission wishes to execute the attached Purchase and Sale Agreement and to authorize the City Manager to negotiate the tenns of a Settlement Agreement as referenced above. ~ WHEREAS, an appropriation of$350,000 from the City of Miami Beach Parking Enterprise Fund is required for the deposit under the Purchase and Sale Agreement, which includes $25,000 for due diligence expenses. NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA as follows: 1. That the City Commission hereby authorizes the execution of the Purchase and Sale Agreement, substantially in the fonn attached hereto, which provides for the City's purchase of the subject property. 2. That the City Commission hereby authorizes the City Manager to negotiate the tenns of a Settlement Agreement whereby Gazit (Meridian), Inc. dismisses with prejudice its pending lawsuit in Gazit (]vferidian) Inc. v. Ci\y of Miami Beach, 11th Judicial Circuit Court Case No. 00- 30164 CA 24. 3. That the City Commission further approves the execution of such other documents as may be necessary to effectuate the intent of this Resolution. 4. That the City Commission hereby appropriates $350,000 from the City of Miami Beach Parking Enterprise Fund for the required deposit under the Purchase and Sale Agreement, which includes an additional $25,000 for due diligence expenses. PASSED and ADOPTED TInS 17th ~f Ottobet MAYOR 2001. ATTEST: _~f~ CITY CLERK P:IA 1TO\nJIlN\IlESOSIGAZrrt.B2.AGR APPROVEDM'ft) . I t ~-I?~ t!)1 ... - . ~ OFFICE OF THE CITY ATTORNEY ~ t/J/(iomi 7/a1m F LOA D A MURRAY H. DUBBIN City Attorney Tdephone: Tdecopy: (305) 673-7470 (305) 673-7002 COMMISSION MEMORANDUM SUBJECf: Mayor Neisen O. Kasdin and Members of the City Commission MurrayH. Dobbin ._I~\.\V City Attorney ~~ ~- . RESOLUTION kHORlZING THE CITY MANAGER TO NEGOTIATE THE TERMS FOR THE PURCHASE OF THE PROPERTY LOCATED AT 1701 MERIDIAN AVENUE, A/KIA 777 17m STREET (THE EQmTY ONE BIDLDING AND PARKING LOT) AND AUmORlZING TIlE CITY MANAGER TO NEGOTIATE THE TERMS OF A SETTLEMENT AGREEMENT RELATIVE TO LITIGATION STYLED GAZIT (MERIDIAN) INC. V. CITY OF MIAMI BEACH, 11TH JUDICIAL CIRCUIT COURT CASE NO. 00-30164 CA 24. DATE: October 17 2001 TO: FROM: The City Attorney's Office submits the above referenced Resolution for consideration by the Mayor and City Commission. This Resolution authorizes the City Manager to negotiate the terms of a Purchase and Sale Agreement relative to the property located at 1701 Meridian Avenue (a!kaI 777 17th Street/the Equity One building and parking lot) and further authorizes the CitY Manager to negotiate the terms of a Settlement Agreement between Gazit (Meridian) Inc. and the City of Miami Beach for the dismissal with prejudice of litigation styled Gazit (Meridian) Inc. v. City of Miami Beach, 11th Judicial Circuit Court Case No. 00-31064 CA 24. The Resolution also authorizes the Mayor, City Clerk, and other necessary City personnel to execute the negotiated Settlement Agreement and Purchase and Sale Agreement after further consideration and approval by the City Commission of such negotiated terms. .............-.- Agenda Item J? 7 P . Date /o-/7-o( 1700 Convention Center Drive - Fourth Floor - M18mi Bta. -, '. !, << '. ". " AGREEMENT FOR PURCHASE AND SALE THIS AGREEMENT, is dated this ~ day of October, 2001, and is entered into by and between the City of Miami Beach, Florida, a municipal corporation organized and existing under the laws of the State of Florida and/or assigns (the "Buyer") whose address is 1700 Convention Center Drive. Miami Beach, Florida 33139 and GAZIT (MERIDIAN), INC. a Florida Corporation, (the "Seller"). whose address is care of Alan J. Marcus 20803 Biscayne Blvd. Suite 301 Aventura, FL 33180 1. DESCRIPTION OF PROPERTY: Seller agrees to sell and Buyer agrees to purchase, under the terms and conditions set forth in this Agreement. all right, title and interest of the Seller in and to the following: A. The parcel or parcels of real property, known as the Equity One office building located at 1701 Meridian Avenue. Miami Beach, Florida 33139 consisting of approximately 36,000 square feet of improvements and the adjacent parking lot containing approximately 17,500 square and any improvements situated on such parcels, together with any and all easements, covenants and other rights appurtenant to such parcels and owned by Seller, the legal description of which is (hereinafter the "Real Property"): See exhibit -A- attached hereto B. Any and all transferable licenses. permits, certificates of occupancy, and other approvals in effect at the Closing Date and necessary for the current use and operation of the Real Property or the personal property, any and all transferable warranties, architectural or engineering plans and specifications and tests and studies, development rights that exist and are in Seller's possession, as of the Closing Date and relate to the Real or Personal Property. c. All furniture, fumishings, fixtures, equipment and other tangible personal property that is affixed to and/or located at the Real Property which is owned by Seller on the Closing Date and used in connection with the management. operation or repair of the Real Property excluding all tangible personal property owned by tenants of the Real Property (collectively "Personal Property"); D. Intangible Property (collectively "Intangible Property") consisting of (i) any and all Leases and Contracts in effect on the Closing Date, (ii) any and all refundable security deposits and other deposits and interest thereon, if required by law (iii) any and all transferable licenses, permits. licenses, certificates of occupancy, and other approval in effect at the Closing Date and necessary for the current use and operation of the real property or the personal property, (iv) any and all transferable warranties. architectural or engineering plans and specifications and tests and studies, development rights that exist and are in Seller's possession, as of the Closing Date and relate to the Real or Personal Property. \\C_H\SYS\A1TO\LEVL\Ral Est8le\Gult Bullding\GlZitbullding ContrllCt LAL Revision 10022..oI.doc .. . - E. Real Property, Personal Property and Intangible Property may sometimes be herein collectively referred to as the .Property" 2. PURCHASE PRICE: The total purchase price of the Property is 56,050,000.00 (U.S.) payable in certified funds or by wire transfer, as follows: Deposit paid to Alan J. Marcus Trust Account within Two (2) days of the Effective Date: $ 302.500.000 Wire transfer of funds required at closing: $5.747.500.00 ; $6.050.000.00 TOTAL PURCHASE PRICE: ; Subject to adjustments and prorations provided for in this Agreement. The deposits to be paid by Buyer shall be held by ALAN J. MARCUS, ESQUIRE TRUST ACCOUNT and shall be refundable to Buyer only as set forth herein. Interest on the deposits to be paid by Buyer shall follow the principal of said deposits. Such deposits, together with the interest accrued thereon, are hereinafter referred to as the "Earnest Money Deposit." 3. ACCEPTANCE: Seller shall have seven (7) business days from receipt of a fully executed Agreement from Buyer to accept or reject same. Until such time as this Agreement has been fully executed by Seller, this Agreement shall not be binding. 4. FACSIMILE: EFFECTIVE DATE' Facsimile copies of this Agreement, signed and initialed in counterpart, shall be considered for all purposes, including delivery, as originals. The Effective Date of this Agreement will be (a) the date when the last one of Buyer and Seller has signed this offer, or (b) if changes in this offer (after signature) have been made and initialed by the parties, the date when the last one of Buyer or Seller has initialed those changes. 5. INSPECTIONS AND CONDITION OF PROPERTY' A. Buyer shall have until November 30, 2001 to complete its due diligence inspection of the Real Property (the "Inspection Perioer,. Within two (2) business days of the Effective Date, Seller shall make available to Buyer (i) copies of all leases, lease proposals. renewals or other agreements or correspondence amending or modifying the foregoing; (ii) income and expense statements for the past three years; (iii) a current rent roll; (iv) a list of alt personal property; (v) copies of all management, leasing and service contracts; (vi) Seller's title insurance policy and survey; and (vii) copies of Seller's most recent environmental report applicable to the Property. B. During the Inspection Period, Buyer may conduct such inspections, at Buyer's sole expense, as Buyer may deem necessary to ascertain the physical condition 2 \\C_H\SYS\ATTO\LEVL\Rcal Estate\GRit Bulldina\Glzitbuildinl ContrIl:t LAL Rnision 1G-22-Gl.doc ~ , of the Real Property. However, Buyer shall arrange for any such inspections by appointment only coordinated with the Seller. C. In the event the Real or Personal Property is not acceptable to Buyer for any reason whatsoever, in Buyer's sole and absolute discretion Buyer shall provide written notice of same to Seller, at Seller's address, prior to the expiration of the Inspection Period. In such event, this Agreement shall be terminated and shall be of no further force and effect and Buyer and Seller shall each be released of all obligations hereunder and Buyer shall be refunded the Earnest Money Deposit without further notice. Failure of Buyer to deliver notice to Seller as required herein shall constitute waiver of Buyer's right to give such notice and shall be deemed acceptance of the Real and Personal Property by Buyer in its as is, where is condition. D. Buyer shall (i) complete its Inspection Period; (Ii) not disturb or interfere with the operation, management or use of the Property by Seller, Seller's agents, any tenant of the Property or by any such tenant's customers, invitee or guests; and (iii) not damage or affect the physical structure of the Property. Buyer shall be responsible for any and all losses, damages, charges and other costs associated with such inspections and studies, and Buyer covenants and agrees to return the Property to the same condition as existed prior to such inspections and studies. Buyer agrees not to allow any liens to arise against the Property as a result of such inspections and studies and agrees to indemnify and hold Seller harmless from and against any and all claims, charges, actions, costs, suits, damages, injuries, or other liabilities which arise, either directly or indirectly, from Buyer's or its agent's or employee's entry onto the Property prior to Closing. E. Upon 24 hour notice, Buyer may have access to all of the original documents concerning the Property referenced in Paragraph A. of this Paragraph 5, located at the Seller's principal office at 1696 NE Miami Gardens Drive, 2nd floor, North Miami Beach, Fl33179. F. Buyer acknowledges that Buyer is purchasing the Property in -AS IS, WHERE IS" Condition and Buyer further acknowledges that Seller has made no warranties or representations, express or implied, in respect to the real and personal property except as set forth herein and further, Buyer has been given the opportunity and has made or will make, as set forth herein, an independent investigation of the Property and Buyer acknowledges that an unqualified standard of caveat emptor applies to the transaction under this Agreement. 6. TERMINATION AFTER INSPECTION PERIOD: Buyer shall have the right to terminate this Agreement at any time between December 1, 2001 and December 20, 2001, for any reason, or for no reason, upon payment of $15,000.00 to Seller. In such case, the amount of $15,000.00 shall be deducted from the Earnest Money Deposit, and the balance of the Earnest Money Deposit shall be immediately returned to Buyer, and this Agreement shall be terminated and shall be of no further force and effect and Buyer and Seller shall each be released of all obligations hereunder. 3 \\C_H\SVS\ATTO\LEVL\RcIl! Estatc\Gazit Bulldlng\GlIZltbuilding Contract LAL Revision IO-n-ol.doc , to -. 7. CLOSING: A. The closing for delivery of the deed and payment of the balance of the purchase price shall take place at Seller's attorney's office. or at such other place as the parties may mutually agree upon. at 9:00 a.m., Eastern Standard Time on December 21, 2001, or such other date as the parties may mutually agree upon. B. Possession of the Property shall be transferred by Seller to Buyer simultaneously with the closing of title, subject to tenants' right of possession. 8. FINANCING: This is an all cash transaction. 9. SELLER'S REPRESENTATIONS AND WARRANTIES: A. Seller represents and warrants to Buyer that as of the Effective Date, the person executing this Agreement on behalf of Seller is duly authorized to do so, that Seller has full right and authority to enter into this Agreement. and this Agreement constitutes a valid and legally binding obligation of Seller, enforceable against Seller in accordance with its terms. B. Seller is duly organized, validly existing and in good standing, and authorized to do business within the State of Florida. C. Seller has good, marketable and insurable fee simple title to the Property. D. There are no actions, suits, claims, condemnation proceedings, or other matters pending, or, to the Seller's best knowledge and belief, threatened against Seller that could affect Seller's ability to perform its obligations under this Agreement. E. All documents and records delivered to Buyer are true and correct, to Seller's best knowledge and belief. F. There are no payments for work andlor improvements to the Property which are unpaid or will become due or owing at Closing. G. There are no contracts, commitments, etc. concerning the use and/or operation of the Property, except as disclosed to Buyer or that exist in the ordinary course of business. H. There are no existing notices of violation of any State. County or City statutes, laws, ordinances or regulations with respect to the Property. 10. BUYER'S REPRESENTATIONS AND WARRANTIES: Buyer represents and warrants to Seller that the following are true, accurate and complete as of the Effective Date: A. Buyer is a municipal corporation duly organized and existing under the laws of the State of Florida. 4 \\C_H\SYS\ATI'O\LEVL\ReaI Eslate\GlIZtt Buildinl\GlIZi1buildlna Contract LAL Revision lo.22-o1.doc ':. - B. Each of the persons executing this Agreement on behalf of Buyer is duly authorized to do so. Buyer has full right and authority to enter into this Agreement and to complete the transaction contemplated herein. This Agreement constitutes a valid and legally binding obligation of Buyer, enforceable against Buyer in accordance with its terms. C. There are no actions, suits, claims or other matters pending, or, to the Buyer's best knowledge and belief, or threatened against Buyer that could affect Buyer's ability to perform its obligations under this Agreement. D. Buyer has sufficient funds and worthy credit available to consummate the Closing of the transaction described in this Agreement. 11. LIMITATIONS ON FUTURE LEASES AND RENTALS: Subsequent to the Effective Date of this Agreement, Seller shall not, without Buyer's prior written consent, enter into any leases or contracts except for (i) contracts to be completed or that are to terminate at or before closing, or (ii) service contracts that are terminable on not less than 60 days notice. Buyer shall have five (5) days to approve any proposed leases. In the event Buyer does not provide written consent to the proposed lease of contract, Buyer's silence shall be deemed a refusal to consent to said lease or contract. 12. CONDITION OF PROPERTY AT CLOSING: Seller shall be obligated to maintain the Property in the same condition as of the Effective Date, reasonable wear and tear excepted. 13. CONDITIONS PRECEDENT TO CLOSING A. Conditions Precedent for Buyer: The obligation of Buyer to purchase the Property from Seller under this Agreement is, subject to the satisfaction, at Closing, of each of the following: (i) The representations and warranties made by Seller in this Agreement shall be true, accurate and complete in all material respects on and as of the Closing Date with the same force and effect as if such representations and warranties were made on and as of such date. (ii) Seller shall have performed all covenants and obligations required by this Agreement to be performed by Seller on or before Closing. (lIi) Title to the property shall conform with the requirements of Paragraph 18 herein and Buyer shall have received a written commitment for title insurance, as described in Paragraph 18, indicating that an owner's title insurance policy in accordance with the provisions of Paragraph 18 will be issued after the date of Closing and compliance with any requirements contained therein. (iv) Seller shall have furnished a written estoppel letter from the tenants set forth in Paragraph 19 of this Agreement or an affidavit executed by Seller in lieu thereof. s \\C_H\SYS\A TTO\LEVL\Re8l Estate\Oazit 8uilding\OllZitbuildlng Contract LAL Revision I G-22-oI.doc . . .. ~ , " (v) Seller shall have executed a settlement agreement (the "Settlement Agreement"), in form and substance satisfactory to Buyer, for the dismissal with prejudice of litigation styled Gazit (Meridian) Inc. v. City of Miami Beach 11111 Judicial Circuit Court Case No. 00-31064 CA 24. B. Conditions Precedent for Seller: The obligation of Seller to sell the Property to Buyer under this Agreement is, subject to the satisfaction, at closing, of each of the following: (i) The representations and warranties made by Buyer in this Agreement shall be true, accurate and complete in all material respects on and as of the Closing Date with the same force and effect as if such representations and warranties were made on and as of such date. (ii) Buyer shall have performed all covenants and obligations required by this Agreement to be performed by Buyer on or before Closing. (ili) Buyer shall have executed the Settlement Agreement, in form and substance satisfactory to Seller, for the dismissal with prejudice of litigation styled Gazlt (Meridian). Inc. v. City of Miami Beach. 11th Judicial Circuit Court Case No. 00-31064 CA 24, which Settlement Agreement shall provide for, among other things, the payment of $450,000 from Buyer to Seller for Seller's legal costs and expenses in the above-styled case. 14. CLOSING' DELIVERIES AT CLOSING: The closing of the transaction contemplated in this Agreement ("Closing") shall take place on the date set forth in Paragraph 6 of this Agreement. A. At, or prior to, the time of Closing, Seller shall deliver to Buyer the fonowing items in form and substance reasonably acceptable to Buyer: (i) Statutory Warranty Deed. (iI) Bill of Sale with respect to any Personal Property included in the sale. (iii) Mechanics' Lien Affidavit. (Iv) No Lien Affidavit (v) Title Affidavit. (vi) Assignment of Leases, Rents and Security Deposits. (vii) Assignment of Contracts, if any. (viii) FIRPTA Affidavit. 6 \\C_H\SYS\A 1i"O\LEVL\Real ESbIIe\Gazit Bullding\Gazitbuikling Conlnlct tAL Revision lo-22-ol.doc . . ~ (ix) Title evidence as set forth in Paragraph 18. (x) A corporate resolution and an incumbency certificate to evidence the Seller's capacity and authority to consummate Closing, and if required, true and correct copies of Articles of Incorporation and bylaws, including all amendments thereto; and a current Certificate of Good Standing; (xi) A completed IRS Form 1099 S. (xii) Evidence of payment of the current tax year's ad valorem real property taxes and personal property taxes. (xiii) All keys in Seller's possession to all entrance doors to, any equipment and utility rooms located in, and all others locks in, the Property, appropriately marked for identification, and combinations to all safes and combination locks, if any, within the Property. (xiv) To the extent In Seller's possession or under Seller's control, all plans and specifications for the building and all other improvements comprising a part of the Property (including, without limitation, for all architectural, structural, mechanical, plumbing and electrical components), Including the sepias of all such plans, if any, and operating manuals. (xv) Such other documents as may be reasonably required in order to carry out the purchase and sale. B. At the time of closing, Buyer shall deliver or cause to be delivered to Seller the following items in form and substance reasonably acceptable to Seller: (I) The earnest Deposit to be credited against Purchase Price. (ii) A resolution of the Mayor and City Commission authorizing the purChase and an incumbency certificate to evidence Buyer's capacity and authority to consummate Closing. (iii) Acceptance of Assignment of Contracts. (Iv) Acceptance of the Assignment of Leases and Security Deposits. (v) The balance of the Purchase Price and such other funds necessary to pay all Closing and other costs and adjustments to be paid by Buyer under this Agreement (to be delivered by wire transfer), C. Each party agrees to execute and deliver at Closing a settlement statement setting forth the charges, adjustments and credits to each party and to execute and deliver such other documents and take such actions as either party or the 7 \\C_H\SVS\A TfO'ILEVL\Real Estate\Oazit BuildlnB'Oaltbuildinl Contract LAL Revision 10022-Ol.cIoc ~ - Escrow Agent might reasonably request to consummate the transaction herein contemplated. Q. At Closing, the Escrow Agent shall (a) disburse all funds, then (b) record, among the appropriate Public Records, all documents to be recorded. and then (c) deliver all original documents and copies thereof, to the appropriate parties. 15. RISK OF LOSS: Risk of loss prior to closing shall be borne by Seller. A. If between the time of execution of this Agreement and the time of closing, the Property is damaged by fire or other casualty the following shall apply, at Seller's option: (i) Upon receipt of applicable insurance proceeds, Seller shall have the obligation to repair or replace the damaged improvements built upon the Real Property. If Buyer requires, Seller shall make such repairs or replacements and this Agreement shall continue in full force and effect and the Seller shall be entitled to extend the closing for a reasonable additional period of time so as to enable Seller to complete such repairs or replacements; or (ii) Buyer may notify Seller that Buyer would rather that Seller not repair or replace any such loss or damage and Seller shall assign all right to and in any and all proceeds received from insurance or in satisfaction of any claims or actions in connection with such loss or damage and upon such assignment Buyer shall close without any purchase price reduction, (iii) In the event the cost of repairs is in excess of $100,000.00 Seller shall have the right to cancel this Agreement in which event, this Agreement shall be deemed canceled and of no further force or effect. Buyer shall be refunded its deposit monies, without further notice, and the parties shall be released and discharged of all claims and obligations hereunder. B. CONDEMNATION: In the event that all or any substantial portion of the Real Property is condemned or taken by eminent domain prior to Closing, Buyer may, at its option, either: (i) terminate this Agreement by written notice thereof to Seller within five (5) days after Seller notifies Buyer of the condemnation and receive an immediate refund of the Deposit, and all interest accrued thereon or (ii) proceed to close the transaction contemplated herein pursuant to the terms hereof, in which event Seller shall deliver to Buyer at the Closing any proceeds actually received by Seller attributable to the Real Property from such condemnation or eminent domain proceeding, net of any costs associated with such condemnation or eminent domain proceeding, or an assignment of Seller's rights against the condemning authority, and there shall be no reduction in the purchase price. In the event Buyer fails to timely deliver written notice of termination as described in (i) above, Buyer shall be deemed to have elected to proceed in accordance with (ii) above. 8 \\C_H\SVS\ATTO\LEVL\ReaI Estatc\Gazit Buildlna\Gazilbulldinl Contract LAL Revision lo-n-Ol.doc ". ;a 16. EXPENSES OF CLOSING: A. Seller shall pay the following costs incurred in this sale: (i) Seller's attomeys fees and costs; (ii) The cost of recording any releases or corrective title instruments; and (iii) The costs of delivery of the. Evidence of Title, as required in Paragraph 18B, herein. B. Buyer shall pay the fallowing costs incurred in this sale: (i) Buyer's attorney's fees and costs: (ii) The costs of recording the deed of conveyance; (iii) The cost of a certified survey (if Buyer so requires) certified to the benefit of the Buyer and the Title Insurer; (iv) Any documentary stamp or transfer taxes, including surtax, imposed in connection with the sale of the Property. (v) All Title Insurance Premiums; (vi) Any other costs and expenses in connection with the purchase. 17. SPECIAL ASSESSMENTS' PRORATIONS AND CREDITS: A. SPECIAL ASSESSMENT LIENS. Certified, confirmed, and ratified special assessment liens as of the date of closing (and not as of the Effective Date) are to be paid by Seller. Pending liens as of the date of closing will be assumed by Buyer, provided, however, that when the improvement resulting in the assessment has been substantially completed as of the Effective Date, the pending lien will be considered as certified, confirmed, or ratified and Seller will at Closing be charged an amount equal to the last estimate by the public body, of the assessment for the improvement. 8. Prorations: Current ad valorem real estate taxes, based on the latest tax bill then available; personal property taxes, rents, maintenance fees and other similar customarily pro ratable items shall be prorated as of the Closing Date with Buyer being responsible for and being credited with those on the day of Closing. All current year's ad valorem real property taxes and all personal property taxes shall be paid by Seller prior to the Closing Date. Seller shall be credited for all rents paid through the Closing Date. Any rents that have accrued, but are unpaid and not past due as of the date of Closing shall not be prorated. Upon collection of such rent by either party, the party collecting such rent shall make the appropriate proration and distribute same with 10 days of receipt. The provisions of the Paragraph are intended to survive Closing. 9 \\C_IMYS\ATTO\LEVL\ReaJ Escare\OllZit Bulldlng\Oaitbuilding Contract LAL Revision lo-n.Ql.doc ~. .I C. Credits: Buyer shall be credited with the amount of any prepaid rents paid to Seller by tenants of the Property for periods subsequent to the Closing date and with the amount of any deposits for tenants of the Property, including rental, cleaning, utility, key, damage and other deposits. D. Buyer shall have the right to satisfy any items that may exist at Closing from the closing proceeds to be paid to Seller. 18. EVIDENCE OF TITLE: Seller has herewith supplied Buyer with copies of Schedules A and B from Commonwealth Land Title Insurance Company Mortgagee's Policy (Policy No. F02-204760, together with hard copies of the exceptions to the title policy and the boundary survey mentioned therein. All exceptions contained in said policy shall be Permitted Exceptions. except for those dealing with existing encumbrances. Wrthin thirty (30) days of Buyer's' receipt of the documents described above, Buyer shall, at its own expense, obtain a commitment for an owner's title insurance policy (hereinafter referred to as the .Commitment") written on a title insurance company which is authorized and registered to issue title insurance. in the State of Florida (the "Title Company.) evidencing that Seller is vested with fee simple, good and marketable title to the Property, free and clear of all liens, encumbrances, exceptions or qualifications whatsoever save and except for (a) those exceptions specified as "Permitted Exceptions. in Exhibit "B. hereto and (b) those exceptions to title which are to be discharged by Seller at or before the closing thereof. Legible copies of all exceptions set forth on the Commitment shall be attached to it. The Commitment shall also evidence that upon the execution. delivery and recordation of the Deed to be delivered pursuant to the provisions of this Contract and the satisfaction of all requirements specified in the Commitment, Buyer shall acquire fee simple, good and marketable title to the Property, subject only to the Permitted Exceptions. Seller shall comply with all reasonable requirements set forth in Buyer's title commitment applicable to Seller (including delivery of a .gap. affidavit in addition to the other documents described in the Commitment) and Buyer shall comply with all requirements set forth in the Commitment applicable to Buyer. If Buyer or its attorneys shall determine the Commitment does not meet the requirements specified above, or that the title to the Property is unmarketable for reasons other that the existence of Permitted Exception or exceptions which are to be discharged by Seller at or before the closing hereof, the Buyer shall notify Seller of that fact in writing within ten (10) days after Buyer's receipt of the Commitment. Such written notice shall specify those liens, encumbrances, exceptions or qualifications to title which are not; (I) Permitted Exceptions; (ii) contemplated by this Contract to be discharged by Seller at or before closing. Or (iii) reasonably acceptable to Buyer despite not being either Permitted Exceptions or dischargeable at closing; any such liens, encumbrances, exceptions or qualifications being hereinafter referred to as "Title Defects. .. Seller, without any obligation on its part to bring lawsuits or expend more than $5.000.00 shall have sixty (60) days following its receipt of written notice of the existence of Title Defects in which to cure or eliminate the Title Defects to the satisfaction of the Title Company In such manner as to permit the Title Company to either endorse the Commitment so as to delete the Title Defects therefrom or issue a new Commitment which specifically provides affirmative insurance over or against those Title Defects specified by Buyer. and which otherwise meets the requirements of this Paragraph. If 10 \\C _H\SYS\A TTO\LEVL\Real EstaIe\Gazlt Buildins\Qazltbuilcllnc Contrllct tAL Revilion Io-n-ol.doc . . , Seller shall in fact cure or eliminate the Title Defects, the Closing shall take place on the date specified in this Agreement, or if such date has passed, within thirty (30) days after the end of said sixty (60) day period. If Seller is unable to cure or eliminate the Title Defects within the time allowed, or is unwilling to cure any Title Defect because it would require the expenditure of money in excess of $5.000.00 (in which event the Seller shall immediately provide the Buyer with written notice of that fact and the curative period shall terminate as of the date of said notice), Buyer may elect to terminate this Agreement within thirty (30) days following the expiration of the sixty (60) day curative period (or earlier termination of said curative period) by giving written notice of termination to Seller or, alternatively, Buyer must close its purchase of the Property and accept the conveyance of the Property subject to the Title Defects, in which event the closing shall take place on the date specified in this Agreement' without reduction in the Purchase Price, or in the event such date has passed within thirty (30) days after the end of said sixty (60) day period. If, by giving written notice to Seller within the time allowed, Buyer elects to terminate this Agreement because of the existence of uncured title Defects, Buyer shall have as its sole remedy the return of the Earnest Money Deposit and, upon the disbursement thereof to Buyer, this Agreement and all rights and obligations of the parties hereunder shall terminate and be null and void except those which expressly survive termination of this Agreement. 19. TENANT ESTOPPEL LETTERS: Seller shall deliver to Buyer, prior to Closing, an estoppel certificate (hereinafter the "Estoppel Certificate") signed by each tenant of the Property indicating the amount of rent paid. the date last paid, the amount of security deposits, any prepaid rents, etc. Buyer shall, within five (5) days of the Effective Date, supply such form acceptable to Buyer for Seller's use. In lieu of an estoppel certificate, Seller may supply an Affidavit attesting to the items set forth in the Estoppel Certificate. 20. ASSIGNMENT: This Agreement may be assigned to an affiliate of the Buyer without the consent of Seller. This Agreement may not be assigned to any other buyer without approval of Seller, unless said buyer is qualified, in Seller's sole discretion, said approval not to be unreasonably withheld. Any such assignment shall indicated acceptance of the assignment by the assignee. 21. DEFAULT: Should Buyer fail to purchase on the date on which title is to close in accordance with this Agreement, or fail to perform any of Buyer's other obligations under this Agreement and such default is not cured within 10 days after written notice to Buyer, Seller may, at Seller's option, cancel this Agreement by written notice to Buyer. In such event, Buyer's deposits and all other sums paid to Seller (including any interest earned thereon) shall be retained by Seller as liquidated and agreed damages for Buyer's default, and this Agreement shall terminate. Seller has removed the Property from the market and has incurred indirect expenses relative to sales, advertising and the like, and Buyer recognizes that no other method could determine the precise damage resulting and retention of all sums then paid as liquidated and agreed damages shall be Seller's sole remedy in the event of Buyer's default. If this Agreement is so canceled, Seller may sell the Property to any third party as though this Agreement had never been made (without any obligation to account to Buyer for any part of the proceeds of such sale). Buyer agrees not to file any action against Seller seeking the return of any portion II ". ... of said deposits or seek any reduction in the amount of the liquidated and agreed upon damages if this Agreement is terminated for Buyer's default. Should Seller defauft under this Agreement or fails to perform any of Seller's other obligations under this Agreement and such default is not cured within 10 days after written notice to Seller, Buyer's sole and exclusive remedy shall be to (i) obtain a refund of all deposits made, whereupon this Agreement shall terminate and neither party shall have any liability to the other, or (ii) bring an action for specific performance, without waiving Buyer's right to damages incurred as a result of Seller's breach. 22. ESCROW AGENT. A. The Escrow Agent joins in the execution of this Agreement for the express purposes of acknowledging receipt of the Earnest Money Deposit (subject to clearance) lodged by Buyer with Escrow Agent hereunder and agreeing to be bound by the provisions set forth in this Agreement with respect to the Earnest Money Deposit. and perform such duties as set forth herein. B. The Earnest Money Deposit shall be held in trust by Escrow Agent, in an interest-bearing account separate and apart from all other funds of, or held by, Escrow Agent. C. Escrow Agent undertakes to perform only such duties as are expressly set forth in this Agreement. Escrow Agent shall not be deemed to have any implied duties or obligations under or related to this Agreement. Escrow Agent is the law firm representing Seller. In the event of a dispute between the parties, the parties consent to Escrow Agent continuing to represent Seller, notwithstanding that Escrow Agent shall continue to have the duties provided for in this Agreement. D. Escrow Agent may (a) act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine; (b) assume the validity and accuracy of any statement or assertion contained in such a writing or instrument; and (c) assume that any person purporting to give any writing, notice, advice or instructions in connection with the provisions of this Agreement has been duly authorized to do so. Escrow Agent shall not be liable in any manner for the sufficiency or correctness as to form, manner of execution, or validity of any instrument deposited in escrow, nor as to the identity, authority, or right of any person executing any instrument; Escrow Agent's duties under this Agreement are and shall be limited to those duties specifically provided in this Agreement. E. The parties to this Agreement do and shall indemnify Escrow Agent and hold it harmless from any and all claims, liabilities, losses, actions, suits or proceedings at law or in equity, or other expenses, fees, or charges of any character or nature, including attorneys' fees and costs, which it may incur or with which it may be threatened by reason of its action as Escrow 12 \\C _H\SVS\A TTO\LEVL\Rcal Estale\OllZit Building\GlZllbulldinl ConlrllCt LAL Revision 1 ()'22-O I.doc: - Agent' under this Agreement, except for such matters which are the result of Escrow Agenfs gross negligence or willful malfeasance. Escrow Agent shall be vested with a lien on all property deposited under this Agreement for the purpose of such indemnification, and for any other expenses, fees or charges of any character or nature, which may be incurred by Escrow Agent in its capacity as escrow agent. Escrow Agent has and shall have the right, regardless of any instructions, to hold the property deposited in escrow until and unless said additional expenses, fees and charges shall be fully paid. F. If the parties (including Escrow Agent) shall be in disagreement about the interpretation of this Agreement, or about their respective rights and obligations, or about the propriety of any action contemplated by Escrow Agent, Escrow Agent may, but shall not be required to, file an action in interpleader to resolve the disagreement; upon filing such action, Escrow Agent shall be released from all obligations under this Agreement. Escrow Agent shall be indemnified for all costs and reasonable attorneys' fees, including those for appellate matters and for paralegals and similar persons, incurred in its capacity as escrow agent in connection with any such interpleader action; Escrow Agent may represent itself in any such interpleader action and charge its usual and customary legal fees for such representation, and the court shall award such attorneys' fees, including those for appellate matters and for paralegals and similar persons, to Escrow Agent from the losing party. Escrow Agent shall be fully protected in suspending all or part of its activities under this Agreement until a final judgment in the interpleader action is received. G. Escrow Agent may consult with counsel of its own choice, including counsel within its own firm, and shall have full and complete authorization and protection in accordance with the opinion of such counsel. Escrow Agent shall otherwise not be liable for any mistakes of fact or errors of judgment, or for any acts or omissions of any kind unless caused by its gross negligence or willful misconduct. H. Escrow Agent may resign upon fIVe (5) days' written notice to Seller and Purchaser. If a successor escrow agent is not appointed jointly by Seller and Purchaser within the five (5) day period, Escrow Agent may petition a court of competent jurisdiction to name a successor. I. The provisions of this section shall survive the Closing and also the cancellation of this Agreement. 23. MISCELLANEOUS PROVISIONS: A. All written notices and demands provided under this Agreement shall be hand 13 \\C _H\SYS\A TTO'ILEVL\Real Estatc\Gazlt Building\GlIZItbuilding Contnct LAL Revision 10022-OI.doc ,. delivered or sent via certified or registered mail, return receipt requested, or by Federal Express or other air carrier service. All notices and demands shall be deemed properly addressed if addressed as follows and if mailed. shall be deemed given upon being deposited in the United States mail, postage prepaid: To Seller: To Buyer: Alan J. Marcus. Esquire 20803 Biscayne Blvd. Suite 301 Aventura, Florida 33180 City of Miami Beach 1700 Convention Center Drive Miami Beach, FL 33139 Attn: City Manager (with a copy to the City Attorney at the same address) B. This Agreement supersedes and any all prior understandings and agreements between Seller, its agents and representatives and Buyer. It is mutually understood and agreed that this Agreement represents the entire understanding between Buyer and Seller. No representations or inducements made prior to the signing of this Agreement, which are not expressly included in this Agreement or imposed by law, shall be of any force or effect. C. Neither this Agreement nor a memorandum thereof shall be recorded in the office of the Clerk in any Circuit Court of the State of Florida. or in any other Public Records of the State of Florida. Any recording of same by Buyer shall be considered a breach of this Agreement. D. The acceptance of the deed by Buyer at the Closing of this transaction shall be acknowledgment by Buyer of the full performance by Seller of all of its agreements and responsibilities hereunder, and no performance of any agreement, obligation, responsibility or representation of Seller shall survive the closing of this transaction, except those specifically provided for by statute and those specifically stated in this Agreement to survive the closing. E. Time shall be of the essence with regard to perfonnance pursuant to this Agreement. F. Any disputes arising in connection with this Agreement shall be settled according to Florida law and venue for any action in connection with this Agreement shall be in Miami-Dade County. Florida. G. No modification of this Agreement shall be valid unless in writing and signed by both parties. H. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and said counterparts shall constitute but one and the same instrument which may be sufficiently evidenced by one such counterpart. I. Should any part, clause, provision or condition of this Agreement be held to be 14 \\C_H\SYS\A1TO\LEVL\Rcal Eshlle\OlIZit Buildlng\Oazitbulldlnl Contrll:t tAL Revision IO-22-Ol.doc ~ void. invalid or inoperative, the parties agree that such invalidity shall not affect any other part, clause, provision or condition thereof, and that the remainder of this Agreement shall be effective as though such void part. clause, provision, or condition had not been contained herein. J. In the event of any litigation arising from this Agreement the prevailing party shall be entitled to recover attorney's fees and costs incurred therewith. 24. BROKERAGE: Seller and Buyer hereby acknowledge, represent and warrant to each other that no broker or finder has been employed by either Seller or Buyer in connection with the sale and purchase transaction contemplated in this Agreement. Seller and Buyer each warrant to the other that no commissions are payable by Seller or Buyer to any broker or finder in connection with this Agreement or the transaction contemplated herein. and Seller and Buyer each agrees to indemnify, defend, save and hold the other harmless from and against the payment of any further commissions or fees or claims for commissions or fees by virtue of any acts or actions undertaken by them, respectively; it being expressly agreed that the foregoing agreement of indemnification shall expressly survive any closing or closings under this Agreement. 25. RADON GAS. Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to person who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your county health unit. 26. FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT. The Foreign Investment in Real Property Tax Act (FIRPTA), IRe 1443, requires that every purchase of U.S. real property must, unless an exemption applies, deduct and withhold from Seller's proceeds ten percent (10%) of the gross sales price. The primary exceptions which might be applicable are: (a) Seller provided Buyer with an affidavit under penalty of perjury, that Seller is not a .foreign persons," as defined in FIRPTA, or (b) Seller provides Buyer with a "qualifying statement, "as defined in FIRPTA. issued by the Internal Revenue Service. Seller and Buyer agree to execute and deliver as appropriate, any instrument, affidavit and statement, and to perform any acts reasonably necessary to carry out the provisions of FIRPTA and regulations promulgated thereunder. IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below. (f\ I L '\ , SELLER: Executed by Seller on Jl1A.-1l-, 2001. IS \\C_H\SYS\A TTO\LEVL\Real Estate\Gazit Buildlng\QazitbuildinB COllb'llCt LAL Revision I [)"22-OI.doc: J: :~R: I~j~ ~ B~er on NEISEN ~DIN. MAYOR Ol!Ta.. U',2001. ~rROYEDMlO FQRM&LANGUAGE a FOR EXECUTION ~~;;r-~ ESCROW AGENT: Executed by Escrow Agent on ~, 2001. M1 ~UAM r ALAN J. MARCUS ESCROW AGENT 16 \\C_H\SYS\AnO\LEVL\RnI EstICc\OIzit BulldlnJ\Qazitbuildq Conlrllct LAL Revision Io.n..ol.doc . . . . Gazlt Meridian Legal Descriptions Exhibit A Parcell Folio 02-3234-007-0410 Lot 1 and the South ~ of Lot 2, Block 22, AMENDED PLAT OF GOLF COURSE SUBDIVISION OF ALTON BEACH REAL TV COMPANY, according to the Plat thereof, as recorded in Plat Book 6. at Page 26, of the Public Records of Miami Dade County, Florida and the thirty foot (30') Bridal Path adjacent thereof. And Parcel II Folio 02-3234-007-0420 Lot 3 and the North ~ of Lot 2, Block 22, AMENDED PLAT OF GOLF COURSE SUBDIVISION OF ALTON BEACH REAL TV COMPANY, according to the Plat thereof, as recorded in Plat Book 6, at Page 26, of the Public Records of Miami Dade County, Florida and the thirty foot (30') Bridal Path adjacent thereof. 17 \\C_H\SYS\A TTO\LEVL\Real Estatc\Oazit Buildiq\Oazitbuildinl Contnlct LAL Revision 10-22-01 ,doc 01/24/02 .09:21 FAX 3056654921 IaJ 002 QUINLIVAN APPRAISAL A PnOFESS1:0NAJ. AssOCL\::rxOJl' RBAL ESTATE APPllAXSERS Be CONSULTANTS 5730 S.W. 74TH STREET. SlJl.TE 300 SoUTH MxA..'IX, Fr.oRIDA 33143 J. MAaK QUINLXVAN, MAl Sr"'TE-c~ GJuran.u. ArPJLUSBJl8 HZ 0000112 1"ELBPB:ONE (305) 603-0611 FAX (305) 665-4921 THO~lAS F. MAoENJDmIBJI, MAI STA'1'2-CJUlT%PIllD GJ!l9lDL\L APPa.usBIlS HZ 00006~ January 24, 2002 Debora J. Turner, First Assistant City Attorney Office of the City Attorney City of Miami Beach 1700 Convention Center Drive Miami Beac~ Florida 33139 . Dear Ms. Turner: In accordance with your request and authorization, I have prepared this Letter Update Appraisal covering the following described property: Equity One Building located at 1701 Meridian Avenue, Miami Beach, Florida. The purpose of this Letter Update Appraisal is to estimate the Market Value of the Leased Fee Interest of the described property as of January 23,2002, being the date of most recent inspection. The original report, as referenced by our file number 01-173, had a valuation date of October 8, 2001. This Letter Update is not intended to be a stand-alone document and incorporates by reference the original report and should only be used in conjunction with said original report. The original report should be referred to for a description and identification of the property; defmitions of value and property interest appraised, pertinent facts about the area and the. subject property; comparable data and the results of the investigations and analyses undertaken; as well as the assumptions and limiting conditions set forth in the valuation of the subject property. The scope oft~s assignment entailed an updated income analysis and a sales search of the subject market area for any new comparable land and building sales which would be pertinent to tbe valuation of the subject property, as well as a review of the previously submitted appraisal report and reinspection of the subject property and surrounding neighborhood to ascertain any conditions which would alter the appraisal problem, applicable approaches to value, the description of improvements or the highest and best use of the subject property. 01/2~/02 ~9:21 FAX 3056654921 . @J 003 Debora J. Turner, First Assistant City Attorney City of Miami Beach January 24, 2002 Page 2 An investigation and inspection ofthe subject property revealed no changes in ownership or physical condition of the building improvements. After a review of the subject neighborhood. current market conditions and the original appraisal. the appraisal problem, approaches to value and highest and best use analysis in the original report are still applicable. From an extensive sale search in the area for both commercial land and office building sales, no new sales considered comparable the subject property were located. Related to the rental income from the subject property, the appraiser has reviewed a rent roll dated January 8, 2002. A copy of the rent roll is attached. The rent roll indicates the following current income and occupancy. Anticipated Monthly Rental Income CAM $ 28,859.40 $ 14.977.48 Total Monthly Income $ 43,836.88 x 12 Months Total Annual Income $526,042.56 Total Rentable Area 28,780 Square Feet Occupied Area 22,189 Square Feet Vacant 1 st Floor - Retail 2nd Floor - Offices 1,350 Square Feet 5,242 Square Feet VacartcY Rate 22.9% The total monthly income as of the date of the previous appraisal (October 8. 2001) was $45,469.25. There has been a slight decline in income and a decrease in the occupancy rate since the previous appraisal. The occupancy rate has decreased from 82% to 77.1 %. While the occupancy rate has decreased slightly in the subject building over this time period, the building owner has indicated that he has not intentionally leased space, especially the ground floor retail space, since the City of Miami Beach was interested in acquiring the building and eventually occupying space in the building. 01124/02 .09:22 FAX 3056654921 , ~004 Debora J. Turner, Fint Assistant City Attorney City of Miami Beach January 24, 2002 Page 3 According the RealData Information Services. the office vacancy rate in Miami Beach as of year end 2001. was approximately 22% - slightly higher in older buildings. The increase in vacancy rate has been due to the collapse of the tech companies. the events of September 11.2001 and its aftermath and the contraction of entertainment companies on South Beach. Vacancy rates are expected to continue to rise as new office buildings become completed. However, the rental rates in new buildings will be considerably higher. making Class C buildings as the subject building more affordable. On the positive side, interest rates are at their lowest level in two decades creating higher cash flows. Based on the above data, it is my opinion that there has been no significant change in value from the previous appraisal report. Accordingly, it is my opinion that., as of January 23, 2002, the subject property has a Market Value as follows: OFFICE BUILDING PARKING LOT TOTAL $3,850,000 52.200.000 S6,050,000 Respectfully submitted, JMQ/vw (OJ-173U) 01/24/02 D9:22 FAX 3056654921 . IaI ODS CERTIFICATION OF VALUE :~~I~r~~z~;~~:{jrf1~~g~}:~~~~~~!~~~j;irj~1t:[:;;;~;;.~i::'ji};~;:;.::;i!.;~i:::;:\::::.;:~ ';':':~~~":.~, :.,......'..::., ..:;....,... -. : .' ::::;:.~~::,~;.~.::;:;.~:~;];;;~~:;~;~....,:~~~...~:~:..~~~..t..t~~: :::;...~.'." -. >.-. p-. ';:~.":..~~)i}~~~J[~~:~~~[~.'Jl;~~~~:f:~~~J;~~i;:~: The undersigned hereby certifies that, to the best of my knowledge and belief: (A) The statements offact contained in the report are true and correct. (B) The reported analyses, opinions and conclusions are limited only by the assumptions and limiting conditions set forth, and are my personal, unbiased professional analyses, opinions and conclusions. (c) I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest or bias with respect to the parties involved. (0) I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. (E) My engagement in this assignment was not contingent upon developing or reporting predetermined results. (F) The appraisers compensation for completing this assignment is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. Furthennore, the appraisal assignment was not based on a requested minimum valuation, a specific valuation or the approval of a loan. ( G) The appraiser's analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice, and the requirements of the State of Florida for state-certified appraisers. (H) Use of this report is subject to the requirements of the State of Florida relating to review by the Real Estate Appraisal Subcommittee of the Florida Real Estate Commission. (I) J. Mark Quinlivan has made a personal inspection of the property that is the subject of this report. (1) No one provided significant professional assistance to the person signing this report. QUINLIVAN APPRAISAL 1 01/~4/02 '09:23 FAX 3056654921 ~006 (K) The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in confonnity with the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute. (L) The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. As of the date of this report, J. Mark Quinlivan has completed the requirements under the continuing education program for The Appraisal Institute. Based on the inspection of the property and the investigation and analyses undertaken, subjectto the assumptions and limiting conditions set forth in the Addendum of this report, I have formed .the opinion, as of January 23,2002, the subject property has a Market Value of: OFFICE BUILDING PARKING LOT TOTAL $3,850,000 $2.200.000 $6,050,000 QUINLIVAN APPRAISAL 2 . ..c u c U ~ co c OJ co -- a:l ""C -- 1- -- OJ E ~ co ....., -- -- N ~ co (!) \.l- e ~ -- u c: 0 -- . ....., u CO c:: E I-t I- ~ c:: c: CO I----t -- ~ -0 -- Q) L.. 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Information Property East Side of Meridian Avenue . 1701 Office Building (75x234) Meridian Ave. - Lot Size 17,550 s.f. 36,502 s.f. . 28,780 s.f. 6,592 s.f 22.90/0 $1,054,000 $27,049.85 Building Size Rentable Space Currently Vacant Vacancy Rate Assessed Value Taxes . . . . . . . Information mm Property East Side of Meridian Avenue . 1721 Meridian Ave. - Vacant Land . (75x234) 17,550 s.f. $1,053,000 $27,024.20 40 parking spaces Lot Size Assessed Value Taxes . . . . Property Condition ~>M>~';P )ot 8,267 sf roof area 1 ,057 sf contains m ois tu re $2;5,000 repair.estim ate survey perform ed by Trem co Incorp. 11/06/01 moisture survey perform ed by RT-A rcon nc 11/05/01 Asbestos abated in large part no friable asbestos noted HVAC good condition ADA minor im provem ents needed Structural 40 yr recertification reviewed , Square 2001 Lease Expiration Tenant Base 2001 CAM Suite # Footage Expiration w/Options Rent/psf per sf Steve's Beauty Salon 1 1,400 $22.29 $6.60 7/1/06 7/1/11 Vidal Tan Salon 2 1,700 $21.67 $6.56 4/14/04 4/14/09 Roma Waxing 3 1,350 $20.68 $6.50 11/30/02 Vacant 3a 1,350 EDAW 200 886 $16.06 $10.57 6/30/04 6/30/06 Vacant 201 3,214 RT Travel 202 872 $13.13 $10.38 6/30/04 6/30/08 Vacant 203-4 2,028 Gambro 300 6,700 $9.59 $10.14 12/31/05 12/31/10 Raben 400 2,950 $20.42 $0.00 2/28/04 2/27/09 Hospice Foundation 401 1,440 $9.58 $8.94 7/31/02 7/31/06 South Beach Medical 402-403 2,090 $12.00 $10.30 9/30/02 9/30/05 Playground Maps PH 2,800 $21.36 $10.90 8/31/05 8/31/10 Total 28,780 Tenant Information Cum ulatlve Vacancies Cum ulatlve Vacancies Cum ulative % Va ca nt w/options exe rcised Cum ulative % Vacant wIno options exercised 23% 28% 28% 28% 35% 46% 46% 46% 62% 95% 100% 6,592 7,942 7,942 7,942 10,032 13,230 13,230 13,230 17,880 27,380 28,780 23% 40% 40% 62% 95% 100% 6,592 11,472 11,472 17,880 27,380 28,780 Leases e x piring Current 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 nated term n 2004 can be the 2nd floor expiring ice and aggregate paym ent of $30,000. easable space on *1,758 sq. ft. of with 60..day not $80,830 67,280 27,645 23,530 14,470 6,245 $220,000 Gazit Bldg. Operating Expenses .~':;:;~~X1;;:::!!:::" Util itie s Taxes Contract Service Maintenance Agrmts (fire,elevator,a/c,security,waste mgt., ndsg, etc.) Maintenance Staff Insurance Misc. repairs and supplies . . City of Miami Beach ~-t:m Current and Future Space Requirements City Administrative Office Space Available sq footage Occupied sq foota ge Useable sq foota ge Users Current 3.885 - 6,000 16.262 67,000 3,600 147 67,000 9.600 20 rs) 6370 sij (Information Technology wI (CAC, ACE, Union Arts/Cultura with 6.000+1- Affa Interna IT Training Credit Groups (Parking Current City Adm inistrative Office Space: Old City Hall 1130 W ashington Avenue Police (Information Technology) 1100 W ashington Avenue 555 17th Street sij City Hal 1700 Convention 67,869 67.869 rive o Center & Recreation Avenue - 9.885 5,000 159,731 10,218 149,513 & office facilities. Parks 2111 Total 5,000 169.616 Washington Less: Private & County uses. Total City Occupied Office Space eased County court . . for eased out to private users and 7,048 170 sf ncludes 3 .Occupled sf City Administrative Office Space Increm enta I Current Needs: Future Needs: To ta I CIP Office 5,000 2,000 Inform ation Technology 1,565 4,700 Human Resources 2,000 Building & Planning 3,000 Neighborhood Services 2,000 2,000 Economic Development 2,000 Grants M anagem ent 1,000 Finance/Licens ing 1,-000 1,000 Pension Offices 3,000 County/State Offices 1,400 Police 2,500 Parking 2,300 2,200 Total 19,865 18,800 38,665 Office Space Needs: 19,865 18,800 38,665 To be met at: A vail. sf 9,885 9,885 Gazit 6,592 22,188 28,780 S h 0 rtfa II (Ex ce 55) 3,388 (3,388) 0 - . · ""r-'''''ttJ'-'-'I '-' ~'-' I ~ '-I\" '-1'-1'-1 \. I-I'--IIUIUII Yf,s. ~lm'fIii!!(;@@i"AW,':'m,'i,>;~:':;:,:,:'i::';-;;::: _A' Vacancy* (with no Vacancy. (if Leases options % options % expiring: exersized) Proposed City Office Users Vacant exercised) Vacant Proposed City Office Users Current 6,592 CIP Office/Credit Union 23% 6,592 23% CIP Office/Credit Union 2002 4,880 Pension Offices, Parkina 17% 1,350 5% Pension Offices 2003 2004 6,408 CIP, Parkina/Pension/Police 22% 2005 9,500 Inform ation Technoloav/Police 33% 2,090 7% ParkinQ/Police 2006 1,400 County/State Offices 5% 2,326 8% ParkinQ/CIP Office 2007 2008 872 3% C IP Office 2009 4,650 16% Pension/P arkina/Police 2010 9,500 33% Inform ation Technoloav/Police 2011 1,400 5% County/State Offices 2012 2013 2014 Total 28,780 100% 28,780 Meridian Proposed Users at Gazit and 555 B dg 555 17th St. s.f. Proposed User 1,620 Economic Development 4,380 Human Resources 6,000 GAZlT Su ite s.f. Proposed User 1 1,400 County/State Offices 2 1,700 UncI & Gen Pension 3 1,350 Police & Fire Pension 3a 1,350 . Credit Union 200 886 CIP Office 201 3,214 CIP Office 202 872 CIP Office 203-4 2,028 CIP Office 300 6,700 Information Technology 400 2,950 Parking 401 1,440 Parking 402-403 2,090 Parking PH 2,800 Police 28,780 34,780 Prog. Space: Total Appraised Value - . Appraised by J. Mark Quinlivan 10/08/2001 . Office Building $3,850,000 . Parking Lot 2,200,000 . Total $6,050,000 . Updated Appraisal 10/17/2001 (post 9/11) reflected no change in value Appraised Value vs. Negotiated Settlement and Financing Plan Negotiated Settlement Funding Source Office Building $3,850,000 Loan from Parking Fund to General Fund Parking Lot 2,200,000 Parking Fund Settlement Costs: 450,000 City Center RDA Total $6,500,000 Financing Plan Loan repayment terms . General Fund will repay Parking Fund $3,850,000 from Net Operating Income from Building Amortized over 9 years . Interest rate assumed at 30/0 but will be set annually to match the City's interest rate of retu rn . . 9 Year Pro-forma - 1701 & 1721 Meridian Avenue YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 Office Buildina Gross Revenue $ 648,617 645,920 697,995 705,070 715,821 794,801 822,952 835,417 861,016 Less ooeratina exoenses $(220,000) (226,600l (233,3981 (240,400) (247,612) (255,040) (262,692) (270,572\ (278.689\ Net operating Income $ 428,617 $ 419,320 $ 464,597 $ 464,670 $ 468,209 $ 539,761 $ 560,260 $ 564,845 $ 582,327 Less Debt Service P & I $(428,617) $(419,320) $(464,597) $(464,670) $(468,209) $(539,761 ) ${560,260l $(564,845) $(578,320) NET CASH FLOW $ - $ - $ - $ - $ - $ - $ - $ - $ 4,007 Cost of Gazit Building $3,850,000 639,000 $4,489,000 Principal Interest 620/0 38% Existing Tenants $2,763,000 City 1,726,000 Lease Comparison Buy vs. · If the City had to rent the additional space needed over a 9 year period it would conservatively cost $2.8million Cash flow savings of approx. $1.1 million over 9 yr acquisition period. City gains a fixed asset appraised at $3.85 Million (01) with 28,780 sf of useable space. . . Benefits of Acquisition - -=M""~"1<Ng~"'~~;~::,7:_,'_:;';;"',-:~"""""",,,_,,--, · Secures final lot on City controlled block · City gains an asset instead of paying ongoing rent for additional office space . Gradual transition to City Office Use . Tenants provide sufficient revenues to cover acquisition and operating cost Benefits of Acquisition Property tax will continue to be assessed and collected (until the facility is City occupied). . .. Efficiency gain through co-location of City ad m i n istrative fu nctions Settlement of Ongoing Litigation . . Community Support . The Budget Advisory and the Parking and Transportation Committees have reviewed this plan and have indicated their support for the acquisition of this building. 01/16/2882 13:29 \ . 3858654175 ~lEDC p~Ge 82 . II' . II '.. - - ..-..-..:: - NORTH BEACH DEVELOPMENT CORPORATION OF MIAMI BEAQf INC. / NORTH BEACH DEVELOPMENT CORPORATION Resolution of the Board of Directors Passed unanimously on January 15, 2002 The Board of Directors of the North Beach Development Corporation strongly supports the City Administration and City Commission in their plans to pmchase the Equity One property located at 1701/1721 Meridian Avenue. This parcel is in a strategic location to provide more space that is key to the efficient operations of the departments in City Hall. . Signed, 1 300 71ST. STREET SUI T E ~02 M I A M I BEACH F LOR IDA 33141 TEL: (305) 865.4141 FAX: (305) 865.4175 Building and Sustaining Community -- Unique, Vibrant, Diverse June 1,2000 Mr. Jorge Gonzalez City Manager City of Miami Beach 1700 Convention Center Drive Miami Beach, FI33139 / Dear Mr. Gonzalez; On behalf of Miami Beach Community Development Corporation (MBCDC), We strongly support the City of Miami Beach purchasing the Equity One Building located next door the City Hall. Sincerely, t Roberto Datorre JO Asmundsson Jeff Donnelly Michael Kinerk Linda Polansky Claire and Don Tomlin Ada L1erandi Colleen Martin David Sine Daniel Weiss Don Worth Randall Robinson Sincerely, MIAMI BEACH COMMUNITY DEVELOPMENT CORPORATION 945 Pennsylvania Ave. . Miami Oeach, Rorida 33130 . Phone 305538-0090 · Fax 305538-2863 MAR-06-2002 14:46 CITY ATTORNEY MIAMI BEACH 305 673 7002 P.02/04 1 , GAZIT (MERIDIAN), INC., a Florida corporation, IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT, IN AND FOR MIAMI- DADE COUNTY, FLORIDA GENERAL JURISDICTION DMSION CASE NO. 00-30164 CA 24 Plaintiff, vs. CITY OF MIAMI BEACH, a Florida municipal corporation, Defendant I SETTLSMENT AGREEMENT AND VOLUNTARY DISMISSAL The Plaintiff' GAZIT (Meridian). Inc.("GAZIT"), and the Defendant CITY of MIAMI BEACH (DCITY") and the respective counsel for the parties hereby stipulate and agree that they have amicably settled the above captioned action and all causes of action arising therefrom or relating thereto and agree to a voluntary dismissal oftbis cause pursuantto Rule 1.420(a)(1), Fla.R.Civ.P. with prejudice and state as follows: PlaintiffGAZIT and Defendant CITY bave entered into an Agrecmentfor Purchase and Sale .. for the property which is the subject matter of this action; each of the parties have met their respective obligations and conditions as set forth in the Agreement for Purchase and Sale. Closing will take place on February 1 t 2002. A copy of the Agreement for Purchase and Sale is attached and made part hcreofby reference. The CITY and GAZIT have agreed that. in addition to the acquisition of the subject property, the total compensation of 56,500,000.00 to be paid to Plaintiff GAZIT also includes the full and MAR-06-2002 14:47 CITY ATTORNEY MIAMI BEACH 305 673 7002 P.03/04 CASE NO. 00-30164CA24 complete compensation for an costs, expenses, including attorneys fees, in the above styled cause and in the proceedings on the Petition for Writ of Certiorari. including appraisals. Upon the execution by all parties of this Settlement Agreement and upon the closing of the sale. GAZIT releases and discharges the CITY from all claims, demands. agreements, obligations, dues, debts, rights or causes of action, however arising, existing at any time up to and including the date of this Settlement Agreement and Voluntary Dismissal. Further the CITYrele8:Ses and discharges GAZIT for all claims, demands, agreements, obligations, dues, debts, rights or causes of action, however arising, only with respect to the property which is the subject matter oftbis action, with the exception of any obligations, claims, agreements. dues, debts, or causes of action that specifically arise from the Agreement for Purchase and Sale of the subject property. I I II II II :\ il II The acquisition of the subject property has mooted all issues in the above cause. This settlement does not affect the validity of the City's affirmative defenses. The parties acknowledge that there has been no determination in this cause of the constitutionality of the Harris Act, nor the issue of the ripeness and timeliness ofPlaintitrs claim, nor the existence of any inordinate burden, nor a determination of the applicability of sovereign immunity. Further, the parties agree that they will jointly move the Court in this cause to request that any orders pretiously entered in this cause be vacated with the exception of the order approving the Settlement Agreement and the dismissal of this cause With prejudice. Plaintiff' GAZIT and its counsel together with the CITY shall jointly file this Settlement Agreement pursuant to Rule 1.420( a)(B) and such action shall constitute a voluntary dismissal of the complaint and the action in the above styled cause with. prejudice. 2 " MAR-06-2002 14:48 CITY ATTORNEY MIAMI BEACH 305 673 7002 P.04/04 . . CASE NO. 00-30164 CA 24 Both parties agrees that they will execute all documents necessary to effectuate the terms and conditions of this Settlement Agreement. Each partywiU bear its own costs and fees other than as GAZIT City of Miami Beach By: David Dermer, Mayor Attest: Counsel for Gazit (Meridian), Inc. By: Robert Parcher City Clerk Alan T. Dimond. Esq. (SEAL) Murray H. Dubbin, Esq. City of Miami Beach City Attomey Dawn Beighey Georgiades. Esq. Clifford A. Schulman, Esq. ~~,Wl'O 3 TOTAL P. 134 , . . . . 't GAZrr (Mcrictian). Jne. By.~lA.re~~ Counsel for Gazit (Meridian), Inc. ~i ,,~--: ~ Alan . Dimond, Esq. Clifford A SeJl1dman. Esq. c:,""T~"" ~e By; · K_'wh Robert PatOher City Clerk (SBAL) Murray H. Dobbin, EIq. City of,MiaJni b City Attorney (1 TOTA.. P. 04 CllY OF MIAMI BEACH COM1llISSION ITEM SUMMARY ~ Condensed Title: A Resolution authorizing execution of a Settlement Agreement between Gazit Meridian Inc. v. City of Miami Beach and appropriating $5,745,000 from the Parking Enterprise Fund balance, representing the balance of the Purchase Price required pursuant to the Contract for Sale and Purchase between Gazit Meridian, Inc. and the City of Miami Beach for the Acquisition of the property located at 1701 and 1721 Meridian Avenue; appropriating $90,000 from the Parking Enterprise Fund balance for associated closing costs; appropriating $50,000 from the General Fund Operating Contingency to perform the necessary repairs required at the building upon acquisition; further appropriating $70,000 from account # 370-8000-361130 to purchase a remote telephone shelf, computer server, and the wiring necessary to effectuate the capital improvement office relocation to the building; further appropriating $150,000 from the General Fund Operating Contingency for operating costs to operate and maintain the building for the remainder of FY2002; and further authorizing the City to extend the existing Maintenance and Service Agreements for the balance of FY2002. Issue: Should the City purchase the Equity One Building and enter into a Settlement Agreement relative to the Gazit Meridian, Inc. vs. the City of Miami Beach lawsuit. Item Summary/Recommendation: I Adopt the Resolution. Adviso Board Recommendation: Budget Advisory Committee: December 11, 2001 and January 8, 2002 - motion in support. Trans ortation & Parkin Committee: Janua 7, 2002 - motion in su ort. Financiallnfonnation: Amount to be expended: Finance Dept. $5,745,000 $90,000 $50,000 $70,000 $150,000 $6,105,000 Parking Enterprise Fund Parking Enterprise Fund General Fund Operating Contingency 370-8000-361130 General Fund Operating Contingency Source of Funds: ~ T:\AGENDA\2002\JAN3002IREGULARIGazitCity,SUM,doc AGENDAITEM R7 E DATE 1-3o-o~ CITY OF MIAMI BEACH CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139 www.ci.miami-beach.f1.us To: From: Subject: COMMISSION MEMORANDUM Mayor David Dermer and Date: January 30, 2002 Members of the City Commission Jorge M. Gonzalez 0 .A~ City Manager () t'v 0 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A SETTLEMENT AGREEMENT BETWEEN GAZIT MERIDIAN INC. AND THE CITY OF MIAMI BEACH WHICH PROVIDES FOR THE DISMISSAL WITH PREJUDICE OF LITIGATION STYLED GAZIT (MERIDIAN) INC. v. CITY OF MIAMI BEACH, 11 TH JUDICIAL CIRCUIT COURT CASE NO. 00-30164 CA 24, AND FURTHER AUTHORIZING THE MAYOR, CITY CLERK AND ALL NECESSARY CITY PERSONNEL TO EXECUTE SUCH OTHER DOCUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS RESOLUTION; FURTHER APPROPRIATING $5,745,000 FROM THE PARKING ENTERPRISE FUND BALANCE, REPRESENTING THE BALANCE OF THE PURCHASE PRICE REQUIRED PURSUANT TO THE CONTRACT FOR SALE AND PURCHASE BETWEEN GAZIT MERIDIAN, INC. AND THE CITY OF MIAMI BEACH FOR THE ACQUISITION OF THE PROPERTY LOCATED AT 1701 AND 1721 MERIDIAN AVENUE; APPROPRIATING $90,000 FROM THE PARKING ENTERPRISE FUND BALANCE FOR ASSOCIATED CLOSING COSTS; APPROPRIATING $50,000 FROM THE GENERAL FUND OPERATING CONTINGENCY TO PERFORM THE NECESSARY REPAIRS REQUIRED AT THE BUILDING UPON ACQUISITION; FURTHER APPROPRIATING $70,000 FROM ACCOUNT # 370-8000-361130 TO PURCHASE A REMOTE TELEPHONE SHELF, COMPUTER SERVER, AND THE WIRING NECESSARY TO EFFECTUATE THE CAPITAL IMPROVEMENT OFFICE RELOCATION TO THE BUILDING; FURTHER APPROPRIATING $150,000 FROM THE GENERAL FUND OPERATING CONTINGENCY FOR OPERATING COSTS TO OPERATE AND MAINTAIN THE BUILDING FOR THE REMAINDER OF FY2002; AND FURTHER AUTHORIZING THE CITY TO EXTEND THE EXISTING MAINTENANCE AND SERVICE AGREEMENTS FOR THE BALANCE OF FY2002. RECOMMENDATION Adopt the Resolution ANALYSIS On September 20, 2001, an executive session was held to discuss settlement options regarding the Gazit Meridian Inc. (the "Developer") vs. the City of Miami Beach lawsuit and the potential sale of the Gazit Meridian Building located at 1701 and 1721 Meridian Avenue alkla "777 17th Street/Equity One Building". In accordance with direction received at the executive session, staff performed due diligence relative to the building acquisition and negotiated a Settlement Agreement. On October 17, 2001, the results of the Administration's due diligence together with a negotiated Purchase and Sale Agreement for the purchase of the property and parking lot were approved by the Mayor and City Commission pursuant to Resolution No. 2001-24661. Together with said approval, the City appropriated $350,000 for the deposit and due diligence expenses. January 3D, 2002 City Commission Memorandum 777-17"' StreetlEquity One Building Page 20'6 On November 28, 2001, another Executive Session was held. An extension of the closing date was requested at City Commission direction to allow for public comment and a publicly noticed educational workshop. As such, the closing date was extended to February 1, 2002 and the Termination after Inspection Period was extended to January 31 , 2002. As part of the City's due diligence, an appraisal was ordered and prepared by J. Mark Quinlivan as of October 8, 2001, valuing the property as follows: . Office Building . Parking Lot Total $3,850,000 $2,200,000 $6,050,000 On October 17, 2001, the Mayor and City Commission asked the Administration to request an update to the appraisal report to reflect any adjustment to the building value as a result of the September 11, 2001 terrorist attacks. Said update letter is attached and reflects no change in value estimate. At the public workshop held on January 10, 2002, the Mayor and City Commission requested a further update to the October 8, 2001 appraisal report as a result of the impact of September 11, 2001 and incorporated current office vacancy factors. On January 24, 2002, Quinlivan provided an updated value of $6,050,000, again reflecting no change in value. The Settlement/Purchase and Sale Contract Provisions substantially include the following: Purchase Price: Inspection Period: Termination after Inspection Period: Closing: Condition Precedent: (Settlement Costs) BACKGROUND $6.05 million Expires November 30,2001 Agreement may be terminated between December 1, 2001 - December 20, 2001 upon payment of $15,000 (extended to January 31,2002). Closing shall take place on or before December 21,2001 (extended to February 1, 2002). Execution by Seller of a Settlement Agreement dismissing the outstanding lawsuit and provides for payment of an additional $450,000 from Buyer to Seller for legal costs and expenses associated with the lawsuit. January 30, 2002 City Commission Memorandum 777-11h Street/Equity One Building Page 3 of 6 On September 23, 1998, the Mayor and City Commission requested that the Administration provide a comprehensive report on City-owned property and capital expended to lease property from the private sector. On November 18, 1998 this matter was referred to the Finance and Citywide Projects Committee. On December 22, 1998 the Committee discussed the matter and recommended that the City seek altemative sites for the cultural organizations and other not-for-profit groups which leased space from the City. On March 17, 1999, the Administration ~roposed a Relocation Plan that contemplated the transfer of City offices to the 555-17 Street and Historic City Hall. In accordance therewith, and as a result of the City's acquisition of the Byron-Carlyle, the Cultural users at 555-1 ih Street were relocated to the Byron-Carlyle and the City appropriated funding to renovate the 555-1 ih Street building for its own use. At this time, if the proposed acquisition of the Equity One Building is consummated, . the City's office of Asset Management, Economic Development Division, Redevelopment Agency, Human Resources, Labor Relations, Risk Management can be relocated to 555- 17th Street. If the Equity One Building is not acquired, then the aforementioned users may not all be accommodated at the 555-1ih Street due to increased space requirements of the City offices and the need to retain the Credit Union at its present location. If the Equity One Street Building is acquired, it is proposed that the Credit Union be relocated to the vacant retail space at the eastern end of the building. As part of the $515,890 appropriation for the 55517th Street building approved on July 18, 2001 pursuant to Resolution 2001-24504, funding was allocated for interior improvements including roof replacement and telecommunications/data wiring. The most recent bid for roof and HV AC replacement came in $25,000 under estimated improvement cost. The Administration deems that aggregate funding appropriated for the 555-17th Street and the funding proposed in this resolution for improvements, combined, will be sufficient to effectuate the City office improvements at both the 555 and 777 17th Street buildings. Prooertv Condition: During its due diligence of the 777 1 ih Street building, the City procured an independent roof and an asbestos survey. The HV AC system was also inspected and ADA compliance was reviewed by Property Management. A summary of the results of these surveys is attached and reflect the following: . Of the 8,267 sf "roof' area, the area with moisture content represents only 1,052 sf of the total area. Being unable to determine if the moisture content is as a result of a failure of the roofs, HV AC or poor maintenance/warranty overview, it is estimated that $25,000 will need to be allocated to replace the moisture damaged roofs and insulations and for routine maintenance and repairs. . Small amounts of asbestos exist in the building. Abatement of asbestos is estimated to cost $9,582. Property Management does not recommend said abatement be performed at this time. Abatement will occur concurrent with future interior January 30, 2002 City Commission Memorandum 777-17h Street/Equity One Building Page 4 0(6 improvements. . HVAC equipment was found to be in reasonably fair condition. . Minor ADA improvements will be necessitated estimated not to exceed $25,000. . Telecommunications/data wiring needs at the 777 17th Street building are estimated at $70,000 and include a remote telephone shelf and computer server that will accommodate additional future City uses as they transition into the building. Parkina Lot The proposed acquisition of the property located at 1721 Meridian will continue to be utilized as a surface parking lot and currently contains approximately 40 spaces. This lot will be managed by the City's parking system. While private tenants in the building may be relocated to the 17th Street garage, some specific tenant needs will continue to be accommodated on a monthly permit basis at the surface lot. Public Workshop Presentation: Attached to this memorandum is the presentation presented at the public workshop held on January 10, 2002 containing pertinent property information, the property condition, tenant information and lease expirations, and estimated building operating expenses. The presentation also reflected the current and future City administrative office space requirements and the proposed users at the property and other City facilities. Favorable public comment was received during the workshop and, to date, no significant adverse public comment has been received. The presentation outlined the Appraised Value vs. the Negotiated Settlement and Financing Plan which is as follows: Neaotiated Settlement Office Building $3,850,000 Parking Lot $2,200,000 Settlement Costs $450.000 $6,500,000 Fundina Source Loan from Parking Enterprise Fund to General Fund Parking Enterprise Fund City Center RDA Benefits of Acauisition In addition to the advantages of settling ongoing litigation, the acquisition of the Equity One Building will allow the City to address its ongoing needs for administrative office expansion on a graduated basis. During the presentation at the public workshop on January 10, 2002, several benefits of acquisition were articulated as follows: . January 30, 2002 City Commission Memorandum 777-17h Street/Equity One Building Page 50f6 / . Secures final lot of City controlled block. . City gains an asset instead of paying ongoing rent for additional office space. . Allows gradual transition to City Office use. . Tenant revenue provides sufficient coverage to amortize approximately 2/3 of acquisition cost and ongoing operating costs. . Property tax will continue to be assessed and collected (until the facility is City occupied) . Efficiency gain through co-location of City Administration functions. Committee and Community Support To-date presentations to City committees and community boards expressing their support of the proposed acquisition have occurred as follows: . The Budget Advisory Committee (BAC) met on December 11, 2001 and January 8, 2002 and expressed their support of the building acquisition. . The Transportation and Parking Committee met on January 7, 2002 and expressed their support of the building acquisition. . MBCDC Board submitted the attached correspondence expressing their support of the building acquisition. . NBDC Board adopted the attached Resolution on January 15, 2002, strongly supporting the City's proposed building acquisition. . On January 29, 2002, the Business Resolution Task Force will meet and review the proposed building acquisition plan. CONCLUSION As is evidenced in the background section of this memorandum, since 1998, the City has continually been striving to minimize the costs related to the leasing of privately owned property to house City Departments and to locate affected Departments in city-owned facilities. As the attached presentation reflects, the City has the opportunity to acquire an asset which is attractive from a variety of perspectives and satisfy pressing administrative space requirements necessary to effectively and efficiently operate. Moreover, the attached operating pro-forma reflects that the cost of the asset will be fully amortized within the 9 year timeframe, based on the current leases and assuming extensions are exercised (exclusive of tenant improvement requirements). The alternative available to the City is to rent additional space over the same 9 year period which would conservatively cost $2.8 million, representing a $1.1 million additional cost to the City when compared to the option of purchasing the subject property. ~ 10 , .. January 30, 2002 City Commission Memorandum 777-1th Street/Equity One Building Page 60'6 Understandably, the City Commission's concern over public perception in expending tax payer dollars for the proposed acquisition is mitigated by virtue of the income stream that will be generated by the private tenants currently on site that will cover 62% of the acquisition cost and the expressed desire by many to renew their existing and soon to expire leases which may result in greater savings to the City. Additionally, the City will be acquiring an existing fixed asset rather than constructing a new asset that may be plagued with cost overruns and time delays. AII-in-all, said acquisition is sound both from a fiscal and operational perspective. If the Mayor and City Commission do not desire to proceed with the Settlement/Purchase and Sale Contract, it will be necessary to direct the Administration to cancel the contract together with the payment of the $15,000 Termination after Inspection Fee. If the Mayor and City Commission do desire to proceed with the Settlement/Purchase and Sale Contract, it is recommended that the Mayor and Members of the City Commission of the City of Miami Beach, authorize the Mayor and City Clerk to execute a settlement agreement between Gazit Meridian Inc. and the City of Miami Beach which provides for the dismissal with prejudice of litigation styled Gazit (Meridian) Inc. V. City of Miami Beach. 11th Judicial Circuit Court Case No. 00-30164 CA 24, and further authorizing the Mayor, City Clerk and all necessary City Personnel to execute such other documents as may be necessary to effectuate the intent of this Resolution; appropriate $5,745,000 from the Parking Enterprise Fund balance, representing the balance of the purchase price required pursuant to the Contract for Sale and Purchase between Gazit Meridian, Inc. and the City of Miami Beach for the acquisition of the property located at 1701 and 1721 Meridian Avenue; appropriate $90,000 from the Parking Enterprise Fund balance for associated closing costs; appropriate $50,000 from the General Fund operating contingency to perform the necessary repairs required at the building upon acquisition; appropriate $70,000 from account # 370-8000-361130 to purchase a remote telephone shelf, computer server, and the wiring necessary to effectuate the capital improvement office relocation to the building; appropriate $150,000 from the General Fund Operating Contingency for operating costs to operate and maintain the building for the remainder of FY2002; and further authorizing the City to extend the existing maintenance and service agreements for the balance of FY2002. JMG/C~rar T:IAGENDA\2002IJAN3002\REGULAR\GazitCity,CM,doc '" HJ-1 A Settlement Statement B. Type of Loan U.S. Department of Housing and Urban Development 2C02- Z'?7 St{ OMB No. 2502-0265 o 1. FHA o 4. VA o 2. FmHA 0 3. Conv. Unlns. o 5. Conv. Ins. 8. File Number GAZIT 7. loan Number 8. Mortg. Ins. Case Num. 10: C. NOTE:Thls fonn is furnished to give you a statement of actual settlement costs. Amounts paid to and by the settlement agent are shown. Items marked "(p.o.c.)" were paid outside the closing; they are shown here for infonnational purposes and are not Included in the totals. D. NAME OF BORROWER: Address of Borrower: CITY OF MIAMI BEACH, FLORIDA 1700 Convention Center Drive, Miami Beach, Rorida 33139 GAZIT (MERIDIAN) INC., a FlorIda CorporatIon clo Equity One Realty & Mgmt., 1696 N.E. Miami Gardens Dr., Miami, FlorIda 33179 TIN: E. NAME OF SEllER: Address of Seller: F. NAME OF lENDER: Address of lender: G. PROPERTY lOCA110N: H. SETTLEMENT AGENT: Place of Settlement: I. SETTLEMENT DATE: 1701 Meridian Avenue, Miami Beach, Florlda 33139 Aventura Title Insurance Corporation 20803 Blscayne Blvd., Suite 301, Aventura , Florida 33180 211/02 DISBURSEMENT DATE: 211/02 TIN: 65-0698414 Phone: 305-937-1800 J, Summary of borrower's transaction - K, Summary of seller's transaction 100, Gross amount due from borrower: 400. Gross amount due to seller: 101. Contract sales price 6,050,000.00 401. Contract sales price 6,050,000.00 102. Personal property 402.Personal~rty 103. Settlement charges to borrower (Une 1400) 79.659.25 403. 104. 404. 105. 405. Adjustments for items paid by seller in advance: Adjustments for items paid by seller in advance, 106. City/town taxes 107. County taxes 108. Assessments 109. 110. Reimbursement of leaal Fees 111. 112. 120. Gross amount due from borrower: 406. Cityltown taxes 407. County taxes 408. Assessments 409. 450,000.00 410. Reimbursement of Legal Fees 411. 412. 6,579,659.25 420. Gross amount due to seller: 450,000.00 200. Amounts paid or in behalf of borrower: 500. Reductions in amount due to seller: 6,500,000.00 201. Deposit or earnest money 202.Princlpalamountofnewloan(s) 203. ExIsting loan(s) taken subject to 204. PrIncipal amount of second mortgage 205. 206. 207. Principal amt of mortgage held by seller 208. 209. 302,500.00 501. Excess deposit (see instructions) 502. Settlement charges to seller (line 1400) 503. ExIsting loan(s) taken subject to 504. Payoff of first mortgage loan 505. Payoff of second mortgage loan 506. Deposits held by seller 507. Princlpal amt of mortgage held by sener 508. 509. 289.00 Adjustments for items unpaid by seller: Adjustments for items unpaid by seller. 210. City/town taxes 211. County taxes 212. Assessments 213. 214. Security Deposits 215. 216. Taxes: Parcell from 01/01/02 to 02101/02 217. Taxes: Parcel II from 01/01/02 to 02101/02 218. 219. 220. Total paid by/for borrower: 510. City/town taxes 511. County taxes 512. Assessments 513. 41,741.89514. Security Deposits 515. 2,165.91 516. Taxes: Parcell from 01/01/02 to 02101/02 2,163.95 517. Taxes: Parcel II from 01/01/02 to 02101/02 518. 519. 348,571.75 520. Total reductions In amount due seller: 41,741.89 2,165.91 2,163.95 300, Cash at settlement from/to borrower' 600. Cash at settlement to/from seller. 46,360.75 301. Gross amount due from borrower (line 120) 302. Less amount paid bylfor the borrower (line 220) 303. Cash ( 0 From 0 To ) Borrower: 6,579,659.25 601. Gross amount due to seller (line 420) (348,571.75) 602. Less total reductions In amount due seller (line 520) 6,231,087.50 603. Cash ( 0 To 0 From ) Seller: 6,500,000.00 (46,360.75) 6.453,639.25 Substitute FORn 1099 Seller Statement: The Infonnatlon contained In blocks E, G, H, and I and on line 401 Is Important tax Infonnatlon and Is being furnished to the IRS. If you are required to file a return, a negligence penalty or other sanction will be Imposed on you If this item Is required to be reported and the IRS detennlnes that It has not been reported. Seller Instructions: If this real estate was your princlpal residence, file Fonn 2119, Sale or Exchange of Principal Residence, for any gain, with your tax return; for other transections, complete the applicable parts of Fonn 4797, Fonn 6262 and/or Schedule 0 (Fonn 1040). 1\ /Z.-/. ~ . c;?:(-~ h) ~ J ~ ~L Seller's InltlaICs): I Doublel1m. L Se!t1ement chclrqes Borro"'er POC Seller POC HuliJ/.1 U.S. Department of Housing and Urban Development 700. Total Sales/Brokers Com. based on price 701. 0/0 to 702. % to 703. Commission paid at settlement 7~. to $6,050,000.00 @ %= Paid from Borrower's Funds at Settlement Page 2 Paid from Seller's Funds at Settlement ROO Items pClyablp. In conn0ct1on with loan BGrro: rr POC ::;,-1 Pl POC 801. loan origination fee %to 802. Loan discount %to 803. Appraisal fee to 8~. Credit report to 805. lender's Inspection fee to 806. Mortaage Insurance application fee to 807. Assumption Fee to 808. to 809. to 810. to 811. to I 90U Items reoulred by lemler to IJe paid In advdnce 8 ). I I FlUC::Jf II r ~)()C 901. Interest from to tm /day 902. Mortgage Insurance oremlum for months to 903. Hazard Insurance oremlum for years to 904. Flood Insurance premium for years to 905. years to . 1001. Hazard Insurance months @ oer month 1002. Mortgage Insurance months {jj} per month 1003. City property taxes months /If) oer month 1004. County property taxes months {jj} per month 1005. Annual assessments months /B) oer month 1006. Flood Insurance months fil oer month 1007. months IB) per month 1008. monthsft oer month 1009. Aggregate accounting adjustment 1100 Title c11,m105 Bn"/ 'l fJ()C ~( rPOC 1101. Settlement or closing fee 1102. Abstract or title search 1103. Title examination 11~. Title Insurance binder 1105. Document preparation 1106. Title Relatad Expenses 1107. Attorney's Fees (Includes above item numbers: 1108. Title Insurance (Includes above Item numbers: 1109. lender's covera e Premium: 1110. Owner's covera e Premium: 1111. Endorse: Florida Form 9 1112. 1113. to to Attorneys' TItle Insurance Fund, Inc. to to to to to 235.00 to. BLOOM & MINSKER 1,801.25 12Ul; GovprrlfllPnl ler,orclllHI ,~II[I 11 dnSr'~1 ( 11dr,11 's 1201. Recording fees Deed $15.00 Mortoaaels\ Releases 15.00 1202. City/county taxlstamps Deed $27,225.00 Mortoaaels\ 27,225.00 1203. State taxlstamps Deed $36,300.00 Mortoaoels\ 36.300.00 12~. 9 Satisfactions of NOVs to Clert of the Court 54.00 1205. City of MB Resolutions to Clerk of the Court 33.00 . 1301. Survey to 1302. Pest Inspect/on to 1303. Uen Seacrhes to A-1 Title ServIces, Inc. 480.00 13~. Misc. Courier, fax. etc.) to BLOOM & MINSKER 100.00 1305. to 1306. to 1307. to 1308. to 1309. ( Enter on lines 103 Section J and 502 Section K \ 79,659.251 289.001 to to I have carefully reviewed the HUD.1 SetUement Statement and to the best of my knowledge and belief, " Is a true and my account or by me In this transaction. I further certify that I have received a copy of the HUD-1 SaIUam S tamenl Borrower Seller Borrower Seller ~~Mf.._n__md"J;~;;'d.._.._m~_.-- As Its Authorlzad Representative Date WARNING: Ills a crime to knowingly make false statements to the United Stales on this or any other s1mOar form. Penallles upon conviction can Include a fine and imprisonment For details sea: TItle 18 U.S. Code Section 1001 and Section 1010. Doubl.Tlm. ~