256-96 RDA
RESOLUTION NO. 256-96
A RESOLUTION OF THE CHAIRMAN AND MEMBERS OF THE MIAMI
BEACH REDEVELOPMENT AGENCY (THE "RDA") AUTHORIZING THE
CHAIRMAN AND SECRETARY TO EXECUTE THE PROMISSORY NOTE
ATTACHED HERETO AND INCORPORATED HEREIN, PURSUANT TO
WHICH THE RDA WILL BE ABLE TO BORROW UP TO TWENTY
MILLION DOLLARS ($20,000,000.00) FROM THE CITY OF MIAMI
BEACH, FLORIDA UNDER A LINE OF CREDIT, AND AUTHORIZING
THE RDA TO BORROW MONIES PURSUANT TO THAT LINE OF
CREDIT.
WHEREAS, the Miami Beach Redevelopment Agency (the "RDA") has entered into an
agreement with MB Redevelopment, Inc., an entity affiliated with Loews Hotels Holding
Corporation, which requires the RDA to fund certain monies in connection with the Loews Miami
Beach Hotel project (the "Hotel") and the public parking garage project (the "Public Garage") at 16th
Street between Collins and Washington Avenues; and
WHEREAS, a portion of the monies for such funding were proposed to be obtained in
connection with a Section 108 guaranteed loan in the amount often million dollars ($10,000,000.00)
from the U.S. Department of Housing and Urban Development; and
WHEREAS, as of the current date, neither the City of Miami Beach, Florida (the "City")
nor the RDA has received those funds; and
WHEREAS, construction on the Hotel has already started and construction on the Public
Garage is expected to begin shortly; and
WHEREAS, it is the desire of the City and the RDA that development and construction of
the Hotel and Public Garage proceed expeditiously; and
WHEREAS, the City desires to provide a line of credit in the amount of twenty million
dollars ($20,000,000.00) to the RDA, for a period of eighteen (18) months, in order to allow the
RDA to meet its funding obligations concerning the Hotel, the Public Garage and other projects,
such as the African-American owned hotel project; and
WHEREAS, the RDA desires to borrow money pursuant to that line of credit; and
WHEREAS, the RDA expects to have sufficient bonding capacity to issue bonds in
approximately eighteen (18) months in order to repay any amounts owed pursuant to the promissory
note, attached hereto and incorporated herein; and
WHEREAS, the promissory note, which is attached hereto and incorporated herein, contains
the terms of the line of credit.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE CHAIRMAN AND
MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY that:
Section 1. The Chairman and Secretary are authorized to execute the promissory
note which is attached hereto and incorporated herein, pursuant to which the RDA is able to borrow
up to twenty million dollars ($20,000,000.00) from the City under a line of credit.
Section 2.
The RDA is authorized to borrow monies pursuant to that line of
credit.
Section 3.
This Resolution shall take effect immediately upon its adoption.
PASSED and ADOPTED this 20th day of November
,1996.
ATTEST:
J<olu-t<f p~
SECRETARY
AIT\kw
f:lattoltacalresos\20mill.rda
Attachment
FORM APPROVED
REDEVELOPMENT AGENCY
GENERAL COUNSEL
By 1t1 Yf/)~
Date Ilf~ 31/?~
2
Miami Beach
Redevelopment Agency
1700 Convention Center Drive
Miami Beach, Florida 33139
Telephone: (305) 673-7193
Fax: (305) 673-7772
REDEVELOPMENT AGENCY MEMORANDUM NO.. 96-33
To:
Chairman Seymour Gelber and
Directors of the Redevelopment Agency
November 20, 1996
From:
Jose Garcia-Pedrosa
Executive Director
Subject:
Authorization Qf a Loan from the City of Miami Beach tQ the Redevelopment
Agency of a $20 Million Line of Credit fQr a Period of Not More Than Eighteen
Months
Administrative Recommendation
The Administration recQmmends the Chairman and DirectQrs of the RedevelQpment Agency approve
the ResQlution authQrizing the Redevelopment Agency to borrow up to $20 million pursuant tQ a line
of credit to be available from the City Qf Miami Beach for a period of nQt mQre than eighteen
months.
Background
The Agency was assured by the Housing and Urban Development (RUD) Department over a year
ago that a Section 108 Loan for $10 milliQn would be available for the LQews Hotel PrQject. Since
that time the Agency has received repeated assurances that these funds would be available to the City
in time for the closing of the Project. The closing date for the PrQject carne and went with additional
assurances Qf the availability of the funds but with no documents from HUD on the loan. The
Agency finally received the proposed loan dQcuments frQm HUD at the end of last week and they
contain numerous sections and compliance issues that will be almost impossible for the Agency to
comply with due to the advanced stage of the Project.
Analysis
The desire of the Agency for this loan was because of cash flow to the Redevelopment Agency and
the bondable revenues for the Project. The City has sufficient cash reserves tQ loan the Agency the
funds it will need fQr both the Loews Project and the second hotel project without impairing its
ability to meet its obligations over the next year and a half. The advantage Qf the arrangement is
twofold. The Agency will receive these funds from the City without incurring the costs of such a
financing on a conventional basis. This will lower the effective borrowing cost of the Agency.
S()UTti V()I~
l?edevel()pment UlstJ1ct
Cln-' CI:~l?
vedevel()pment Uistlict
AGENDA lTEN 3-B
NOVEMBER 20, 1996
Additionally, the funds necessary to complete both Qfthe hotel projects will be available without the
burden of the record keeping and compliance issues that come with the loan from HUD.
The ability of the Agency to issue the Tax Increment Bonds necessary to repay the City will likewise
be improved by the lapse of time covered by this "bridge lQan" from the City. This improvement
will come in both of the revenue streams pledged tQ the repayment of the Tax Increment Bonds.
Prior to the issuance of the long term financing to repay the City, another year Qfthe taxable values
of the property in the redevelopment area will be known. An increase in this value will translate into
additional bondable revenues available and additional debt capacity for the Agency. A much larger
increase will be available from the reSQrt tax. With the signing of the development agreement for the
convention center hotel (the LQews Project), the additional 1 % tax on room rents tOQk effect. This
1 % tax shQuld generate $2.7 million in additional resort tax for this fiscal year. Added to this amount
is the growth in the tax, estimated at a 7% rate, which will produce an additional $1 million in resort
tax. The current estimates for resort tax collections fQr this fiscal year are $14.4 million, an increase
of$3.7 million for the year. lbis increase in reSQrt tax would be enough, by itself, to provide the
bQndable revenues for the approximately $25 million in Tax Increment Bonds necessary to repay
the City next year. The due date on the loan to the Agency will be in no more than eighteen months
which will allow sufficient time to elapse for these bonds to be issued.
Conclusion
As the internal financing of the shQrt term loan to the RedevelQpment Agency will provide additional
revenues to the City and eliminate the compliance issues associated with the Section 108 Loan, this
financing should be approved.
~
JGP/R.JN/cp
RESOLUTION NO. 96-22212
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA (THE "CITY") AUTHORIZING THE
CITY TO LEND THE MIAMI BEACH REDEVELOPMENT AGENCY
TWENTY MILLION DOLLARS ($20,000,000.00), PURSUANT TO THE
PROMISSORY NOTE ATTACHED HERETO AND INCORPORATED
HEREIN.
WHEREAS, the Miami Beach Redevelopment Agency (the "RDA") has entered into an
agreement with MB Redevelopment, Inc., an entity affiliated with Loews Hotels Holding
Corporation, which requires the RDA to fund certain monies in connection with the Loews Miami
Beach Hotel project (the "Hotel") and the public parking garage project (the "Public Garage") at 16th
Street between Collins and Washington Avenues; and
WHEREAS, a portion of the monies for such funding were proposed to be obtained in
connection with a Section 108 guaranteed loan in the amount often million dollars ($10,000,000.00)
from the U.S. Department of Housing and Urban Development; and
WHEREAS, as of the current date, neither the City of Miami Beach, Florida (the "City")
nor the RDA has received those funds; and
WHEREAS, construction on the Hotel has already started and construction on the Public
Garage is expected to begin shortly; and
WHEREAS, it is the desire of the City and the RDA that development and construction of
the Hotel and Public Garage proceed expeditiously; and
WHEREAS, the City desires to provide a line of credit in the amount of twenty million
dollars ($20,000,000.00) to the RDA, for a period of eighteen (18) months, in order to allow the
RDA to meet its funding obligations concerning the Hotel, the Public Garage and other projects,
such as the African-American owned hotel project; and
WHEREAS, the RDA desires to borrow money pursuant to that line of credit; and
WHEREAS, the RDA expects to have sufficient bQnding capacity to issue bonds in
approximately eighteen (18) months in order to repay any amQunts owed pursuant to the promissory
note, attached hereto and incorporated herein; and
WHEREAS, the promissory note, which is attached hereto and incorporated herein, contains
the terms of the line of credit.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA that:
Section 1. The City is authorized to lend the RDA the amount of twenty million
dollars ($20,000,000.00) under a line of credit, pursuant to the tenns of the promissory note attached
hereto and incorporated herein.
Section 2.
This Resolution shall take effect immediately upon its adoption.
PASSED and ADOPTED this 20th day of November
,1996.
~ 6 W-t~ rM-~
R
A TrEST:
CITY CLERK
AfN<w
(:\oaIollecalreoosI2Omill.....
Attachment
FORM APPROVED
lEG~
By 11~
Date 1(113/9'
2
CITY HALL t700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
CITY OF MIAMI BEACH
OFFICE OF THE CITY MANAGER
TELEPHONE: (305) 673-7010
FAX: (305) 673-nl2
COMMISSION MEMORANDUM NO.
(,
November 20, 1996
To:
Mayor Seymour Gelber and
Members Qf the City CommissiQn
From:
Jose GarCia-pedrosaj,J
City Manager f/ 1
Subject:
Authorization of a $20 million Line Qf Credit to the Redevelopment Agency for a
PeriQd ofNQt More Than Eighteen Months
Administrative Recommendation
The Administration recommends that the Mayor and City Commission apprQve the Resolution
authorizing a $20 million line of credit tQ be available to the Miami Beach Redevelopment Agency
for a period of not more than eighteen months.
Back&I'ound
The AdministratiQn was assured by the HQusing and Urban Development (HUD) Department Qver
a year agQ that a Section 108 Block Grant LQan fQr $10 lI\illion WQuld be available fQr the Loews
Hotel Project. Since that time the City has received repeated assurances that these funds would be
available to the City in time for the closing of the Project. The closing date for the Project came and
went with additional assurances of the availability of the funds but with no documents frQm HUD
on the loan. The City finally received the proposed loan documents from HUD at the end of last
week and they contain numerous sections and compliance issues that will be almost impossible for
the City to comply with due to the advanced stage Qf the Project.
Analysis
The desire of the City fQr this loan was because Qf cash flow to the Redevelopment Agency and the
bondable revenues for the Project. The City has sufficient cash reserves to loan the Agency the funds
it will need for both the Loews Project and the second hotel project without impairing its ability to
meet its obligations over the next year and a half. The advantage of the arrangement is twofQld. The
City will loan these funds to the Agency at a rate, New York prime, in excess of the rate that is
cmrently being earned on its investments. This will increase the rate of return that is earned by the
City on its cash management reserves. Additionally, the funds necessary to complete both of the
Agenda Item R. L~
Date l \- ~o-'H...
---.
hotel projects will be available withQut the burden of the record keeping and compliance issues that
come with the loan frQm HUD.
The ability of the Agency to issue the Tax Increment Bonds necessary to repay the City will likewise
be improved by the lapse Qftime covered by this "bridge loan" from the City. This improvement will
come in both of the revenue streams pledged tQ the repayment Qfthe Tax Increment Bonds. Prior
tQ the issuance of the IQng tenn financing tQ repay the City, another year of the taxable values of the
prQperty in the redevelopment area will be known. An increase in this value will translate into
additional bondable revenues available and additiQnal debt capacity fQr the Agency. A much larger
increase will be available frQm the resort tax. With the signing of the development agreement for the
convention center hotel (the LQews PrQject), the additional 1 % tax on room rents took effect. This
1 % tax should generate $2.7 milliQn in additiQnal resort tax for this fiscal year. Added to this amount
is the growth in the tax, estimated at a 7% rate, which will produce an additional $1 million in resort
tax. The current estimates for resort tax CQllections for this fiscal year are $14.4 million, an increase
of $3.7 milliQn for the year. This increase in resort tax would be enough, by itself, to provide the
bondable revenues for the apprQximately $25 million in Tax Increment Bonds necessary to repay
the City next year. The due date Qn the loan tQ the Agency will be in no more than eighteen months
which will allow sufficient time to elapse for these bonds to be issued.
Conclusion
As the internal financing of the short term loan to the Redevelopment Agency will provide additional
revenues to the City and eliminate the compliance issues associated with the Section 108 Loan, this
financ~ should be approved.
JGP/RJN/cp
PROMISSORY NOTE
$20,000,000.00
MIAMI BEACH, FLORIDA
November 20, 1996
FOR VALUE RECEIVED, the undersigned, the Miami Beach Redevelopment Agency, a
public body corporate and politic ("Maker"), promises to pay to the order of the City of Miami
Beach, Florida, a Florida municipal corporation ("Payee"), at its offices at 1700 Convention Center
Drive, Miami Beach, Florida or at such other address in the United States of America as may be
specified in writing from time to time by holder hereof, the principal sum of TWENTY MILLION
AND NOll 00 DOLLARS ($20,000,000.00) (the "Loan"), or such lesser principal amount as is
outstanding, payable together with interest thereon from the date hereof at the rate of PRIME per
annum upon the unpaid balance from time to time outstanding until maturity, same being payable,
in lawful money of the United States of America, as follows:
The entire principal balance of the Loan together with all accrued and
unpaid interest on the Loan shall be due and payable in full on April
17, 1998.
The rate of PRIME per annum, as referenced above, shall be adjusted each month and shall
be the PRIME rate as stated in The Wall Street Journal on the first business day of the month. The
principal of this Note may be prepaid in whole or in part at any time and from time to time without
penalty or premium.
By virtue of this Note and subject to the conditions of this Note, Payee is creating a line of
credit in favor of Maker and Maker may draw upon this line of credit as often as it chooses as long
as the outstanding principal balance under this Note does not exceed Twenty Million and NOll 00
Dollars ($20,000,000.00) at any given time.
If default is made under this Note which default continues for a period of thirty (30) days
following written notice to the Maker, then at the option of the holder hereof, the entire outstanding
principal sum, together with all accrued and unpaid interest shall become immediately due and
payable.
Presentment for payment, demand notice of dishonor, protest and notice for protest are
hereby waived by all makers and endorsers hereof, together with all other requirements to hold each
of them liable as Makers and endorsers.
Any and all amounts payable under this Note shall be secured solely by Net Trust Fund
Revenues, as defined in Miami Beach Redevelopment Agency Resolution No. 150-94, adopted
January 5, 1994 (that resolution, as supplemented by Resolution No. 245-96, adopted June 5, 1996,
and as further supplemented from time to time, is referred to herein collectively as the "Resolution").
Such security, as referred to in the preceding sentence, is junior, inferior and subordinate in all
respects to the bonds issued from time to time pursuant to the Resolution as to lien on and source
and security for payment from the Net Trust Fund Revenues, and in all other respects.
MIAMI BEACH REDEVELOPMENT AGENCY,
a public body corporate and politic
BY:
ATTEST:
() '{ _PcwL
~er, Secretary
A1T\kw
f:latto\tacalagreemtn\promnote.$20
FORM APPROVED
REDEVELOPMENT AGENCY
GENERAL COUNSEl
By 11/ UP/L
Date -lJ,1'l<9.{
2
ADDENDUM TO PROMISSORY NOTE
Notwithstanding anything to the contrary contained in this Promissory Note, the
date on which this Promissory Note shall be due and payable is hereby extended from April
17, 1998 to August 1, 1998, and all other conditions of this Promissory Note shall remain
in full force and effect.
CITY OF MIAMI BEACH
#fk
Neisen O. Kasdin, Mayor
BY:
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
ATTEST:
~d- ftU~
Robert Parcher, City Clerk
~tyk[f<~Lt- ~
The Miami Beach Redevelopment Agency hereby agrees to the extension of the
maturity date of the foregoing Promissory Note to August 1, 1998 and agrees that all other
conditions of this Promissory Note shall remain in full force and effect.
MIAMI BEACH REDEVELOPMENT AGENCY
t~1
Neisen O. Kasdin, Chairman
BY:
ATTEST:
APPROVED AS TO
FORM & LANGUAGE
& FOR EXeCUnON
Ij/f~ff- i 1919'f
topment Agency Dote
Generol r.('\!"'~~l
~1' p~
Rohert Par':her, Secretary
F; \ATIO\LEVL\RESOloORD\2 OMILL .ADD