307-98 RDA
RESOLUTION NO.
307-98
A RESOLUTION OF THE CHAIRMAN AND MEMBERS OF THE
MIAMI BEACH REDEVELOPMENT AGENCY, APPROVING THE
PROPOSED PARKING RATE STRUCTURE AND OPERATING
BUDGET FOR FISCAL YEAR 1998/99, AS SUBMITTED BY QUIK
PARK OF FLORIDA, INC., FOR THE OPERATION OF THE
PAmilNGCOMPONENTOFTHEANCHORSHOPSANDPAmilNG
AT SOUTH BEACH, IN ACCORDANCE WITH THE TERMS AND
CONDITIONS OF THE GARAGE FACILITY MANAGEMENT
AGREEMENT DATED JULY 15, 1998, BETWEEN THE AGENCY
AND QUIK PARK OF FLORIDA,INC.
WHEREAS, on July 1, 1998, in accordance with the Garage Easement Agreement between
the Miami Beach Redevelopment Agency and MB Redevelopment, Inc" the Redevelopment
Agency adopted a Resolution authorizing the execution of a Management Agreement with Quik
Park of Florida, Inc" for the operation of the garage component of the Anchor Shops at South
Beach and Parking; and
WHEREAS, under the terms of the Management Agreement, Quik Park must submit, for
approval by the Redevelopment Agency, an annual budget for the operation of the garage
component; and
WHEREAS, the Redevelopment Agency must also establish parking rates for the garage
component, which are consistent with the structure identified in Section 6( c) of the Easement
Agreement, and which are are comparable/competitive to rates charged by other hotel garages and
comparable facilities, and that encourage use when spaces committed to the hotels are not required,
NOW THEREFORE, BE IT DULY RESOLVED BY THE CHAIRMAN AND
MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY that the Chairman and
Members of the Miami Beach Redevelopment Agency approve the proposed parking rate structure
and operating budget for FY 1998/99, as submitted by Quik Park of Florida, Inc" for the operation
of the parking component of the Anchor Shops at South Beach, in accordance with the terms and
conditions of the Garage Facility Management Agreement, dated July 15, 1998, between the
Agency and Quik Park of Florida, Inc.
PASSED and ADOPTED this 21st day of
October
, 1998.
ATTEST:
~t flU~~~
SECRETARY ~r~
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
I1JJ1
CHAIRMAN
I"W6/if
n,.-:",.
Exhibit A
lof2
Anchor Shops & Parking
Projected Operatin&: Expenses (Quik Park)
A. Payroll:
(1) Manager @ 528.84/wk X 52 weeks
(3) Asst Managers @ 350.00/wk X 52 weeks
(1) Asst Manager @ 375,OO/wk X 52 weeks
(6) Cashiers @ 6.001hr X 40hrs X 52 weeks
(2) Porters @ 7,OO/hr X 40 hrs X 52 weeks
$ 27,500.00
54,600.00
19,500,00
74,880,00
29,120.00
Sub-Total:
$205,600.00
B. Employee Benefits:
(i) Vacation Eligible after completing 1 year
(ii) Holiday Eligible after 90 days; pro-rated (3) holidays
(iii) Sick Pay Eligible after 90 days; accrued @ 1/2 day/month
$ 1,058.00
2,690.00
3,559,00
Total:
$212,907.00
Payroll Taxes
Workers Comp
HealthIW elfare
Uniforms
Tickets
Signage Maintenance
Telephone
Utilities
Sweeping Maintenance
Professional Services
Liability Insurance
Security
Management Fee
Courier Services
Sanitation
Water
Sewer
Storm Water
Supplies
Miscellaneous
23,339,00
12,519,00
17,130.00
3,900,00
3,500,00
2,400.00
1,900,00
30,000,00
2,340,00
5,200.00
22,500.00
100,755.00
40,000.00
8,500,00
2,100,00
2,500,00
1,000.00
1,700,00
3,900.00
2,800.00
Total Expenses:
$501,290.00
Payroll Taxes:
Workers Comp:
Health & Welfare:
Uniforms:
Tickets:
Signage:
Telephone:
Utilities:
Sweeping:
Professional Services:
Liability Insurance:
Security:
Management fee:
Courier:
Sanitation:
Utilities:
Supplies:
Exhibit A
20f2
Anchor Shops & Parking
Summary of Expenses (Quik Park)
Calculated @ 11.15%
Function of payroll- $5.88 per $100.00 of payroll
Eligible @ 90 days:
(1) Manager @ $85,65 X 10 months = $856.50
(4) Asst. Mgr @ $85.65 X 10 months = $3,426.00
(6) Cashiers @ $185.57 X 10 months = $11,134,20
(2) Porters @ $85,65 X 10 months = $1,713.00
8 employees @ $5,00 X 52 weeks
5 Management @ $7,00 X 52 weeks
Estimated use 200m; $350.00/20m
Related restriction signs; maintenance
$400.00 Installation
$ 125,OO/month X 12 months
Electric projected @ $2,500.00/month X 12 months
$195.00 X 12 months
Banking, payroll, payables, accounting charges
$100,00 X 52 weeks
$27.98 per space
$8.65/hour X 240 hours X 52 weeks
As per agreement
Wells Fargo @ $715.00/month
$175.00/month - 2 pick-ups/wk
7th Street Garage Actuals for (water, sewer & storm water)
Office/cleaning related - $75.00/week X 52 weeks
Daily Rates
1 Hour
2 Hours
6 Hours
24 Hours
Monthly Rate -
Night Rates - (FrilSat/Sun)
9:00 P.M, - 6:00 A.M,
Anchor Shops & Parking
Proposed Parkinl: Rate Structure
$2.00
$4.00
$10,00
$18,00
$100.00 (Flat)
$10,00 (Flat)
Exhibit B
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Exhibit 0
Projected Operations for the 16th Street Garage
Period
12/111998
Annual 9/30/1999
~ - ---~--_._-------- ---'-----------.-.-
Parking revenues $1,909,900 $1,672,300 (1)
Less: sales tax 116,600 102,100
-~-----
Parking Revenues net of tax 1,793,300 1,570,200
Excess payment to Loews @ 28% 132,500 70,000
Net Parking Revenues 1,660,800 1,500,200
Retail Space 290,000 96,700 (2)
Total Net Revenues 1,950,800 1,596,900
Debt Service 1,050,000 1,050,000
Operating Expenses 501,000 417,500
Net Income $399,800 _$129,400
(1) Forecast revenues assume a $9.00 flat rate for the highest number of spaces used
for valet parking in any 24 hour period.
(2) Forecast is based on existing leases and assumes a 6 month build out period.
Miami Beach
Redevelopment Agency
1700 Convention Center Drive
Miami Beach, Florida 33139
Telephone: (305) 673- 7295
Fax: (305) 673- 7772
REDEVELOPMENT AGENCY MEMORANDUM NO. 98- '-\ 3
October 21,1998
TO: Chairman and Members of the Board
of the Miami Beach Redevelopment Agency
FROM: Sergio Rodriguez
Executive Director
SUBJECT: A RESOLUTION OF THE CHAIRMAN AND MEMBERS OF THE MIAMI
BEACH REDEVELOPMENT AGENCY, APPROVING THE PROPOSED
PARKING RATE STRUCTURE AND OPERATING BUDGET FOR FISCAL
YEAR 1998/99, AS SUBMITTED BY QUIK PARK OF FLORIDA, INC.,
FOR THE OPERATION OF THE PARKING COMPONENT OF THE
ANCHOR SHOPS AND PARKING AT SOUTH BEACH, IN ACCORDANCE
WITH THE TERMS AND CONDITIONS OF THE GARAGE FACILITY
MANAGEMENT AGREEMENT DATED JULY 15, 1998, BETWEEN THE
AGENCY AND QUIK PARK OF FLORIDA,INC.
RECOMMENDATION
Adopt the Resolution
BACKGROUND
On July 1, 1998, in accordance with the Garage Easement Agreement between the RDA and MB
Redevelopment, Inc., ("Loews"), the RDA adopted a resolution authorizing the execution of
a Management Agreement between Quik Park of Florida, Inc., and the RDA, for the operation
of the garage component of the Anchor Shops at South Beach and Parking ("16th Street Garage").
Quik Park was selected on the basis of the company's extensive experience in running hotel-related
parking and valet operations. The Agreement was subsequently executed on July 15, 1998. The
Agreement stipulates that Quik Park provides its services to operate the garage and sets forth,
among other things: duties and responsibilities; management; quality standards, equipment,
accounting methods, operating budget, reimbursable expenses, term of contract, and management
fees (negotiated at $40,000 annually).
S()UJti V()I,-..TI:
Vedevel()pment [)istrict
Agenda I tern
4
Vede~ Date
36
l D-2\-<:1 ~
Under the terms of the Management Agreement, Quik Park must submit for approval by the RDA,
a proposed annual budget for the operation of the garage. The RDA must also establish parking
rates for the facility.
ANAL YSIS
In order to establish a proposed rate structure for the substantially completed, 803-car 16th Street
Garage, four important factors were considered: 1) the amount of debt service to be covered by the
operation of the facility; 2) the revenue sharing obligations with Loews and Crowne Plaza; 3) the
anticipated operating costs; and 4) setting rates which are comparable/competitive to rates charged
by other hotel garages and comparable facilities and that encourage use when spaces committed to
the hotels are not required.
Revenue Sharing Obligations
Under the terms of the easement agreement with Loews for use of the garage, Loews is entitled to
the use of 560 spaces for which the RDA receives an up-front annual use fee of $550,000, in
addition to paying parking charges for their use of spaces at a rate not to exceed 50 percent of the
established self-park rate for each space used for valet operations. Under a separate easement
agreement between the RDA and RDP Royal Palm Hotel, Ltd., ("Crowne Plaza"), a similar formula
was applied. For use of 174 spaces, Crowne Plaza will pay $156,600 annually up-front as a use fee,
in addition to parking charges for each space used at the same rate as Loews, The hotels are required
to provide 24 hour notice to reserve the spaces for their use for valet parking of hotel guests or for
events, The 69 remaining spaces plus any spaces not reserved by the hotels will be available for
public parking.
The Easement Agreements also provide for Loews and Crowne Plaza to share in the gross revenue
stream generated by the garage on the basis of a two-tiered system. In the first tier, the hotels receive
a percentage of gross revenue, up to their respective annual use fees, calculated as 41.7 percent of
the first $1,320,000 in gross revenues for Loews and 13,05 percent of the first $1,200,000 in gross
revenues for Crowne Plaza. In the second tier, Loews receives 28 percent of gross revenues in
excess of $1 ,320,000 and Crowne Plaza receives 6.46 percent of gross revenues over $1.2 million,
In essence, the first-tier is intended as a credit against the annual use fee,
Proposed Operating Costs and debt service
The Administration has worked closely with Quik Park to develop a first-year's operating budget
which is consistent with actual and budgeted expenditures at the 7th Street Garage. Of all the
City's parking facilities, the 7th Street Garage was deemed to be the best comparable for use in
developing the proposed budget for the 16th Street facility. The first year's debt service to be
covered by the operations of the garage has been estimated at $1,050,514. A copy of the proposed
budget is included as Attachment ''A /I to this package.
Proposed Rate Structure
The Administration has developed a rate structure in accordance with the parameters established in
the Garage Easement Agreement that will provide sufficient gross revenues to cover operating and
maintenance costs, debt service and revenue sharing obligations. Consideration was also given to
providing competitive short-term daily rates and weekend and evening flat rates to encourage
public use of available spaces when shopping, dining, doing business or attending events in the
area. The proposed rate structure, included as Attachment "B" to this package, calls for a rate
of $2.00 for the first hour, $4.00 for up to 2 hours, $10,00 for up to 6 hours and $18.00 for up to 24
hours. In order to arrive at the daily self-park rate, two factors were considered: the parking rates
charged by select hotels in the area, including the Loews Hotel, and the rates needed to be charged
to the Loews and the Crowne Plaza for use of the spaces in the garage.
Revenue Projections
Pursuant to the terms of the Easement Agreements, the RDA cannot charge Loews or Crowne
Plaza more than 50 percent of the established self-park rate (per space) for use of their spaces, Over
the course of the last two months, Loews and the Administration have been trying to reach an
understanding in interpreting the "self-park" rate as defined in the Agreement. Based on a
preliminary breakeven analysis performed in-house, it was determined that the rate needed to be
charged to Loews should be $9,00 per space, which would be 50 percent of the daily self-park
rate of $18.00. Loews contends that they should be paying 50 percent of the hourly rate and not
necessarily 50 percent of the daily self-park rate, Both Loews and the Administration agree
however, that due to the logistical complications in tracking usage of the spaces on an hourly basis,
paying a flat rate for the highest number of spaces used per day, coupled with an access card system
would be the most viable solution. Since an agreement had not been reached at the time this report
was prepared, revenue projections were prepared assuming a $9.00 flat rate charged to Loews,
With input received from the Parking Department and Quik Park, assumptions were also made with
respect to usage/occupancy of the facility, In addition, revenue from existing retail leases in the
Anchor Shops was also factored in.
Based on the projections, which are included as Attachment "D", it is estimated that the garage
can generate $1,793,300 in gross revenues net of sales tax in the first 12 months of operation, or
$1,570,200, based on 10 months from December I, 1998, through the end of the City's fiscal year.
The projected revenues in the 12-month and 10-month breakdowns, which are based on conservative
occupancy levels, meet breakeven requirements for the facility.
Until an agreement is reached with Loews on a rate to be charged for their spaces, the revenue
projections cannot be relied upon as final. However, given the anticipated opening date of the
garage, it is imperative that the City set the parking rates as provided in the Agreement with Quik
Park so that parking can be available immediately upon opening,
CONCLUSION
The opening of the Loews Hotel has been delayed to the end of November. The opening of the 16th
Street Garage, originally scheduled for October 16th is also experiencing delays, and based upon
information provided by the developer and the contractor, is now scheduled to open by mid-
November. The Administration has been working diligently to monitor and press the contractor to
meet its deadlines and performance requirements, In anticipation of the opening of the garage, it
is important to set the parking rates in order to start generating income for the facility. Under the
terms of the Easement Agreement and the Parking Operator Agreement, the RDA has the sole and
absolute discretion to adjust the rates as usage patterns in the garage are established.
The Administration recommends that the Redevelopment Agency Board approve the attached
Resolution approving the proposed parking rate structure and operating budget for FY 98/99,
submitted by Quik Park of Florida, Inc.,
tpv
SR:CMC:kob
Attachment