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317-99 RDA RESOLUTION 317-99 A RESOLUTION OF THE CHAIRMAN AND MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY, APPROPRIATING $74,638 FROM AVAILABLE 1998 TAX INCREMENT REVENUE BONDS IN ORDER TO FUND MECHANICAL PERMIT FEES AND WATER AND SEWER HOOK- UP FEES FOR THE ROYAL PALM CROWNE PLAZA RESORT PROJECT IN ACCORDANCE WITH SECTION 6.3(a) OF THE HOTEL DEVELOPMENT AGREEMENT BETWEEN THE MIAMI BEACH REDEVELOPMENT AGENCY AND RDP ROYAL PALM LIMITED PARTNERSHIP. WHEREAS, On May 28, 1998, the Miami Beach Redevelopment Agency ("Redevelopment Agency") and RDP Royal Palm Hotel Limited Partnership ("Developer") executed the Lease Agreement, the Hotel Development Agreement and other related agreements for the development and operation of the Royal Palm Crowne Plaza Resort in Miami Beach, Florida; and WHEREAS, in accordance with Section 6.3(a) of the Hotel Development Agreement, the Redevelopment Agency is responsible for paying any and all permit fees required to be obtained from the City of Miami Beach for the construction of the hotel, which include without limitation, all building permit applications, inspection and certification fees and impact and connection fees that the City levies through its Public Works and Building Departments; and WHEREAS, funding needs to be appropriated from time to time in order to pay said permit fees as 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 authorize the appropriation of $74,638 from available 1998 Tax Increment Revenue Bonds in order to fund mechanical permit fees and water and sewer hook-up fees for the Royal Palm Crowne Plaza Resort project in accordance with Section 6.3(a) of the Hotel Development Agreement between the Miami Beach Redevelopment Agency and RDP Royal Palm Limited Partnership. PASSED AND ADOPTED this 14th day of April, 1999 ~E CHAIRMAN ~r p~~ SECRETARY APPROVED AS 10 FORM & LANGUAGE & FOR EXECunON T:\Agenda\ 1999\Apr 14\royalp.res ~.!~ ~ Cl!:lerot Counsel EXHIBIT ,~ Exhibit 6.3(a) FEES BUILDING PERMIT Alternations & Repairs A \mings & Canopies Concrete Slab (Other Than Paving) Demolition Of Building Elevator Hoistway Construction Fence And/Or WaIls Landscaping New Building And/Or Additions New Building Other Painting Parking Area Lighting Paving Roofing (Including Re-Roofmg) Signs Swimming Pools Windows, Exterior Doors, Storefronts & Fixed Glass CERTIFICATE OF OCCUPANCY Certificate Of Completion Final Certificate Of Occupancy Temporary Certificate Of Occupancy ELECTRlCAL PERMIT FEE Combinations Equipment Outlets Or Permanent Connections Fire Detections Systems Fixtures GeneratorsfTransformers, Commercial Heating Equipment & Strip Heaters Machine Outlets Or Permanent Connectors Master Televisions, Intercom, Burglar Alarm, Telephone & Radio Plummold Rough Wiring Outlets Services Signs Special Purpose Outlets (Commercial) Streamers Or Festoon Lights Swimming Pool Lighting Switchboards W6-MI9626I 0.084/09120196 .ji, ;-{: ~~ '~1 1 .J ,/1 . }1! ~, u.;.a ~: .,....: if, t'".,. ~< " j. Welding Machine Outlets MECHANICAL PERMIT FEE Air Conditioning & Refrigeration Amusement Rides And Devices Boilers And Pressure Vessels Duct Work Elevators, Escalators & Other Lifting Apparatus Furnaces And Heating Equipment Internal Combustion Engines Storage Tanks For Flammable Liquids OTHER FEES: Fire Processing Fees Interim General And Proprietary Fees Marine Structure Fees Miami Beach Training Fees Parking Impact Fees Radon Fees Zoning Processing PLUMBING PERMITTING FEES: Condensate Drains Drainage Fire Control Systems Minimum Plumbing Fee Per Permit Miscellaneous Natural Gas And Liquefied Petroleum Rough & Set Fixtures Septic/Settling Tanks, Oil Interceptors And Grease Traps Sewers Stonn & Sanitary Utility And/Or Collector Lines Temporary Toilets Water And Gas Mains Water Heaters (Electrical Or Gas) Water Piping Water/Sewage Treatment Plants & LiftlPlumbing Stations PREWSE PERMIT: Initial And Final Premise Permit Fee !:' . TELEPHONE SYSTEM: W6-MI9626I 0.084/09120196 =. Section 6.2 Developer's Contributions. Developer has provided the Funded Equity. Developer shall also provide all of the funds necessary to complete Construction of the Project. Section 6.3 ~. (a) Citv Permit Fees. Agency agrees hereby to assume payment responsibility for any and all Permits, now or hereafter, required to be obtained from the City for the construction of the Hotel, which include, without limitation, building permit applications, inspection, certification, impact and connection fees that the City may levy by or through its Public Works Department (including, without limitation, water and sewer fees) and those fees listed on Exhibit 63(a) attached hereto and incorporated by reference herein and in the City of Miami Beach Building Department Fee Schedule, as amended through September 16, 1992 by Ordinance Number 92-2796, or the mQSt current edition adopted by the City, which fee schedule is hereby incorporated by reference and made a part of this Agreement (collectively, the "Fees"). Agency shall remain responsible for payment of the Fees notwithstanding any and all modifications or changes in price structure as imposed by the City or any other Governmental Authority authorized to impose such Fees. Agency acknowledges that the Developer or an Affiliate has paid all applicable fees thus far in the interest of expediting the City of Miami Beach Design Review Board and City of Miami Beach Historic Preservation Board applications, and Agency agrees to reimburse Developer, promptly following the date hereof, for the Fees or any portion thereof paid by Developer or an Affiliate or for which Developer otherwise qualifies. (b) Non-Citv Permit Fees. Agency will cooperate with Developer in an effort to persuade Metropolitan Dade County to waive its fees relating to the Project. To the extent that Metropolitan Dade County does not waive the impact, connection and service fees now or hereafter imposed by 1-fiami Dade Water and Sewer Authority pursuant to Ordinance No. 88-112, Section 1, Subchapter 7, dated December 6, 1988, as updated (collectively, the "Connection Fees"), Agency shall pay the Connection Fees when due on behalf of Developer. Developer agrees to reimburse the Agency for the Connection Fees, together with interest thereon at eight percent (8%) per annum in three hundred (300) equal monthly installments of principal and interest commencing on the Hotel Opening Date; provided, however, in the event of a Sale of the Hotel requiring payment of the Purchase Price in full to Ovmer, Developer shall pay the entire outstanding balance plus all accrued interest due on the Connection Fees. Section 6.4 Expedited Processin~. The City shall make reasonable efforts to provide for expedited handling of all review board hearings and/or permit requests made to it by Developer relating to the Construction of the Project. A:\JNM\CMB\HTLDEV A.EX2(EXECUTION.2)\54-98 26 EXHIBIT B Section 35.3. Indemnification. (a) Tenant hereby indemnifies and holds harmless the Owner Indemnified Parties from and against any and all Environmental Damages to the Premises during the term of this Lease, except to the extent any such Environmental Damage is caused, permitted, allowed, suffered or contributed to, directly or indirectly, by any of the Owner Indemnified Parties prior to the Commencement Date. Such obligation of Tenant shall include the burden and expense of defending all claims, suits and administrative proceedings (with counsel reasonably satisfactory to Owner), even if such claims, suits or proceedings are groundless, false or fraudulent, and conducting all negotiations of any description, and paying and discharging, when and as the same become due, any and all judgments, penalties or other sums due against any of the Owner Indemnified Parties. Tenant's obligations shall not apply with respect to Environmental Damages resulting from Environmental Conditions existing in the Land prior to the execution hereof (regardless of whether the same were caused by any of the Owner Indemnified Parties). Without limiting the foregoing, if the presence or Release on or from the Premises caused or permitted by Tenant results in contamination of the Premises, Tenant shall promptly take all actions at its sole cost and expense as are necessary to remediate the Premises in compliance with Environmental Laws in effect from time to time and to comply with any requirements imposed by any Governmental Authorities; provided that Owner's approval of such actions shall first be obtained, which approval shall not be unreasonably withheld. (b) Owner hereby indemnifies and holds harmless the Tenant Indemnified Parties from and against any and all Environmental Damages resulting from Environmental Conditions existing prior to the Commencement Date, but only in the Land and specifically excluding the Improvements. Such obligation of Owner shall include the burden and expense of defending all claims, suits and administrative proceedings (with counsel reasonably satisfactory to Tenant), even if such claims, suits or proceedings are groundless, false or fraudulent, and conducting all negotiations of any description, and paying and discharging, when and as the same become due, any and all judgments, penalties or other sums due against any of the Tenant Indemnified Parties. (c) Notwithstanding anything to the contrary contained herein, Owner agrees to take such action as necessary to immediately remove the underground storage tank(s), if any, located on the Premises; to expeditiously undertake such further assessment, remediation, and monitoring of the soil and ground water impacted by the Release from such tank(s), if any, as required under applicable Environmental Laws; and to take such action as necessary to obtain a No Further Action determination from DERM or DEP, if required under Environmental Laws. Owner shall use reasonable efforts to undertake the work described in this Section 35.3(c) in such a manner as to minimize disruption to and to avoid delaying Tenant's plans to renovate and develop the Premises. Owner agrees that in connection with the work described in rli'is Section 35.3(c) it will provide to Tenant all correspondence, reports, studies and other documents exchanged between A:VNM\CMB\GLEASE.EX2(EXECUTION.2)\5-4_98 127 Owner, its consultants, and DERM or DEP promptly after those documents are provided to or received from DERM or DEP. Section 35.4. Compliance. Tenant, at its sole cost and expense (except as otherwise provided in this Lease), shall comply and cause the Hotel Manager and all Subtenants to comply with all Environmental Laws with respect to the use and operation of the Premises. Section 35.5. Notices. If Tenant or Owner receives any notice of a Release, Threat of Release or Environmental Condition or a notice with regard to air emissions, water discharges, noise emissions, recycling, violation of any Environmental Law or any other environmental, health or safety matter affecting Tenant or the Premises (an "Environmental Complaint") independently or by notice from any Governmental Authority having jurisdiction over the Premises, including the EP A, or with respect to any litigation regarding Environmental Conditions at or about the Premises, then such party shall give prompt oral and written notice of same to the other party detailing all relevant facts and circumstances. Section 35.6. Owner's Remedies. Provided Tenant does not diligently commence to remediate the applicable Environmental Conditions promptly after becoming aware of the same and thereafter diligently pursue the completion thereof in a reasonable time (and in any event in accordance with Requirements), Owner shall have the right, but not the obligation, to enter onto the Premises or remediate the Premises in compliance with Environmental Laws in effect from time to time and to comply with any requirements imposed by any Governmental Authorities upon its obtaining knowledge of such matters independently or by receipt of any notice from any Person, including the EP A. Section 35.7. Defaults. Except to the extent the same is a matter for which Owner is responsible pursuant to Section 35.3(b) above or relates to an Environmental Condition caused, let, permitted, suffered, contributed to or allowed by an Owner Indemnified Party prior to the Commencement Date, the occurrence of any of the following events shall constitute an Event of Default under this Lease: (a) if the EPA or any other federal, state or local body or agency creates a lien upon the Premises which is not discharged by payment or bonding within. ninety (90) days; or (b) if the EPA or any other federal, state or local body or agency makes a claim (which shall mean, for the purposes of this Section 35.7, issuance of a warning notice, citation, notice of violation or administrative complaint) against Tenant (or any subtenant, licensee or other A:VNM\CMBIGLEASE.EX2(EXECUTION.2)15-4_98 128 THIS PAGE E~lENTIO~'ALL Y LEFT BLAl'fK :.. Miami Beach Redevelopment Agency 1700 Convention Center Drive Miami Beach, Florida 33139 Telephone: (305) 673- 7295 Fax: (305) 673- 7772 REDEVELOPMENT AGENCY MEMORANDUM NO. 99- ,g April 14, 1999 TO: Chairman and Members of the Miami Beach Redevelop nt Agency FROM: Sergio Rodriguez Executive Director SUBJECT: THE CHAIRMAN AND MEMBERS OF THE MIAMI BEACH RED LOPMENT AGENCY, APPROPRIATING $74,638 FROM AVAILABLE 1998 TAX INCREMENT REVENUE BONDS IN ORDER TO FUND MECHANICAL PERMIT FEES AND WATER AND SEWER HOOK- UP FEES FOR THE ROYAL PALM CROWNE PLAZA RESORT PROJECT IN ACCORDANCE WITH SECTION 6.3(a) OF THE HOTEL DEVELOPMENT AGREEMENT BETWEEN THE MIAMI BEACH REDEVELOPMENT AGENCY AND RDP ROYAL PALM LIMITED PARTNERSHIP. ADMINISTRATION RECOMMENDATION: Adopt the Resolution. BACKGROUND: Pursuant to Section 6.3( a) of the Development Agreement between the Miami Beach Redevelopment Agency (the RDA) and RDP Royal Palm Limited Partnership (the developer), the RDA is responsible for paying any and all permit fees required to be obtained from the City for the construction of the hotel, which include without limitation, all building permit applications, inspection and certification fees and impact and connection fees that the City levies through Public Works and the Building Department. A list of applicable Building Department fees is included with this memorandum. The RDA has been presented with two invoices by the deteloper, one ill the amount ofS25,240 for City water and sewer impact and connection fees and the other in the amount of $49,398 for mechanical permit fees. S()IJTJ-i V()I~T~ l?ede"'el{)pment [)istrict c: Agenda Item 3 B Vede"'t Date ~ -Ild -0 c; ANAL YSIS: To date, the RDA has paid $136,404.31 in City permit fees, which technically have not been appropriated. These fees include the main building, electrical, plumbing, fire and demolition permits. At the time the Development Agreement was approved by the RDA and the City Commission, the construction budget contained in the Development Agreement reflected a line item for Building Permit Fees estimated to be in the amount of$151,434. Taking into account the payments the RDA has made to date of $136,404.31 and the proposed additional costs presented herein of $25,240 and $49,398, the total costs to date will be $211,042.31, which exceeds the budget line item for Permit Fees by $59,608.31. Future additional fees will need to be paid and will include revised building permit fees, irrigation, roofing, certificate of occupancy, premise permit and other fees. In addition to permit fees, the RDA may be requested to assume further costs as a result of: 1) Parking impact fees that will be assessed to comply with parking requirements, per the contract, for the new 7-story replacement tower for the Royal Palm Hotel. 2) Remediation of petroleum contamination found on site. 3) Potential concession of the garage use fee requested by the developer in order to leverage additional loan commitments to cover a shortfall in the construction budget that the developer claims is as a result of the 7-story tower replacement for the Royal Palm. Parking Impact fees The Royal Palm will require modification of the Development Agreement between the RDA and the RDP to provide additional spaces in the 16 Street Garage or the payment of parking impact fees. Based on the preliminary plans submitted, a total of 107 additional spaces will be needed to satisfy zoning requirements. Unless additional spaces can be identified in the 16th Street Garage and/or within 1,200 feet of the site, the RDA will have to pay the City parking impact fees equivalent to $5,000.00 per space, as provided in the Development Agreement. Upon submission of final plans this issue will be addressed. Petroleum Contamination On February 5, 1999, while excavating for the remaining pile caps on the north side ofthe property, the contractor uncovered an estimated 1,000 cubic yards of petroleum-contaminated soil. The developer directed the contractor to have the soil removed and iiicinerated. Pursuant to an indemnification clause in Section 35.3 of the Development Agreement, the developer has communicated that it will seek reimbursement for this expense, which is estimated at $40,600. In addition, the contractor has submitted a delay claim for a 16-day period to the developer in the amount of $100,000. It is anticipated that the developer will reject the claim. On March 24th an additional area of suspected petroleum-contaminated soil was uncovered under the Shorecrest. The amount and extent of the remediation was unknown at the time this report was written. However, the RDA can anticipate an additional claim for compensation and possibly, an additional delay claim by the contractor. Financial Concessions As a result of the unexpected demolition and replacement of the Royal Palm, the developer is claiming economic hardship due to the alleged increase in construction costs associated with the reconstruction of the 7-story tower as well as the construction delays associated with the protracted pre-development schedule for the hotel. In order to leverage additional financing for the project, the developer has approached the City/RDA requesting a deferral of annual ground lease payments for 25 years and abating payment of the Use Fee for its share of parking spaces in the 16th Street Garage. Since the RDA's debt service obligations preclude any concessions on payment of the ground lease, the Administration has informed the developer that the only option available for consideration is the abatement of the garage Use Fee in exchange for the RDA not paying the developer the facility Usage Fee. Under the terms of the Garage Easement Agreement with the developer, the RDA receives an annual "Use Fee" from the developer of $156,600. The agreement also provides for the developer to share in the gross revenue stream generated by the garage on the basis of a two-tiered system. In the first tier, the developer receives a "Usage Fee" equal to 13.05 percent of the first $1,200,000 in gross revenues net of taxes. In the second tier, the developer receives a Usage Fee equal to 6.46 percent of gross revenues in excess of $1 ,200,000. In essence, the first-tier is intended as a credit against the annual Use Fee paid by the developer. The developer will still be subject to paying parking charges for their use of spaces in the garage, at a rate not to exceed 50 percent of the established self-park rate for each space used for valet operations. The developer is considering its options at this point. CONCLUSIONS In accordance with the provisions of the Development Agreement, it is recommended that funds be appropriated from time to time to pay the necessary City permit fees for the Royal Palm Crowne Plaza project. Upon receipt of requests from the developer for payment of permit fees, the Administration will formalize the requests in the form of resolutions appropriating the required funds. In this case, the appropriation requested is for $74,638 to cover the City water and sewer impact and connection fees and the mechanical permit fees. SR/~OB ~ T:\agenda \ 1999\Aprlroyalp.mem