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267-97 RDA Incomplete I RESOLUTION NO. A RESOLUTION OF THE CHAIRMAN AND MEMBERs OF THE MlAMr BEACHREDEVELOPl\1ENT AGENCY (THE "AGEN~ AUTHORIZING THEAGENey TO ACQUIRE THE SHORE CREST HOTEL LEASEHOLD INTEREST; AUIlIORIZING THE AGENCY TO PAY$3J. MILLION FOR SUCH ACQUISmoN; AUTHORIZING TBE CHAI:Rl\1::ANAND SECRETARY TO.EXEcUl:E THE SIIORECREST OPTION AGREEMENT AITACBED HERETO.~ INCORPORATED~; AND AUTHoRIZING THE TAKlNG OF:ALLINCIDENTAL ACITONS; BUT ALL OFTHE ABOVE SUBJECrrO'TElEPRIORAPPRQV AL OF THE EXECUTIVE DIREcrOR . AND GENERAL COUNSEL OF THE AGENCY. 267-97 "WlIEREAS. on March 5" 1997" the Miami Beach Redevelopment Agency (the "Agency")" the CityofJ.\.fiamiBeach (the."'CityJ7 RDP Royal Palm Hotel Limited Company ("RDJ?") and RDP Shorecrest Hotel Limited Company entered into that certain. . . Letter offutent (the .~OY'). which sets fo:tth" among other things. the general teno.s of proposed definitive agreements concernmg the development and operation of an African-AmericanOVJIted convention hOlel (the "Hotel") on the Royal Palm Hotel property. which. is 'o""Ded by the Agency. and the Shorecrest Hotel property. which is to be owned by theAgency; and WHEREAS" the LOr contemplates that the Agency will become the owner o~ among other P~Perty. the leasehold interest pertaining to the Shorecrest Hotel property (the "Leaseholdj; and . WHEREAS, the LOr :further contemplates that the Agency will acquire the Leasehold by 'virtue. of the assignment from RDP or an affiliated entity to the Agency of a purchase ~ 'sale agreement pertaining to the Leasehold and the conslIID.ImItion of that agreeme:o.tbetween the Agency. as purchaser; ,and the seller; and WlIEREAs~ the agreement to purchase the Leasehold provides for a closing on Or before March 3171997 and there are no regularly scheduled Agency Board meetings in March after the M~ 19 meeting; and WHEREAS~ there are various conclit:ions to the closing on the acquisition of the Leasehold which must be met by the seller; and WHEREAs, the Agency and RDP have negotiated the teJ:I:r:1S of that certain Sho:rec.rest Option Agreemen~ attached hereto and incorporated herein; and WHEREAS" the acquisition of the Leasehold and the development of the hotel are parts of and are consistent with the City Center Historic Convention Village j " Redevelopment and Revif~ f17;>tion Pian and will eliminate slum and blight in the City Center Historic Convention Village Redevelopment and Revitalization Area; and WHREAS, the acquisition of the Leasehold and the development of the Hotel are necessary, are public purposes and will benefit the public by, among other things, increasing the number of convention quality hotel rooms in the City, assisting the City in attracting conventions and increasing the utilization of the Convention Center, increasing tourism. and improving the economy; and WHEREAS, the acquisition of the Leasehold and the development of the Hotel are authorized by Chapter 163 of the Florida Statutes. NOW, THEREFORE, BE IT nUL Y RESOLVED BY THE ClIAIRMAN AND MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY as follows: 1. Subject to the ExecUtive Director and General Counsel of the Agency being satisfied that all preconditions to the closing on the acquisition of the Leasehold have been met by the seller: a The Agency is authorized to acquire the Leasehold.. b. The Agency is authorized to expend up to $3.1 million for the acquisition of the LeaseholcL c. The Agency is authorized to take an assignment ofRDP's agreement to purchase the Leasehold. d.. The Chairman and Secretary are authorized to execute the Shorecrest Option Agreement attached hereto and incorporated herein. 2. The Executive Director and General Counsel of the Agency, and their respective staffs and consultants, are authorized to take all other incidentaL actions in connection with this resolution. 3. The Chairman. and Members hereby find that the acquisition of the Leasehold and the development of the Hotel are necessary, are public purposes, '\Nill benefit the public, and are parts of and are consistent with the City Center Historic Convention Village Redevelopment and Revitafi'l-"ttion Plan. 4. The Chairman and Members hereby find that the acquisition of the Leasehold and the development of the Hotel are authorized by Chapter 163, Florida Statutes. 5. Ibis resolution sbaII take effect immediately upon adoption. PASSED AND ADOPTED this 19th day of March, 1997. CHAIRMAN ATTEST: Robd' fOA~ SECRETARY APPROVED ItS TO FORM & LANGUAGE & FOR EXECUnON ~ Miami Beach Redevelopment Agency 1700 Convention Center Drive Miami Beach, Florida 33139 Telephone: (305) 673-7193 Fax: (305) 673-7772 DATE: TO: FROM: SUBJECT: REDEVELOPMENT AGENCY MEMORANDUM NO. 97-9 March 19, 1997 Chair.man and Members of the Board of the Miami Beach Redevelopment Agency Jose G~rCia~pedrosa. ,.Jl. /;~, Execut~ve D~rector .If A RESOLUTION OF T~ CHAIRMAN AND MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY (THE"AGENCY") AUTHORIZING THE AGENCY TO ACQUIRE THE SHORE CREST HOTEL LEASEHOLD INTEREST; AUTHORIZING THE AGENCY TO PAY $3.1 MILLION FOR SUCH ACQUISITION; AUTHORIZING THE CHAIRMAN AND SECRETARY TO EXECUTE THE SHORE CREST OPTION AGREEMENT ATTACHED HERETO AND INCORPORATED HEREIN; AND AUTHORIZING THE TAKING OF ALL INCIDENTAL ACTIONS; BUT ALL OF THE ABOVE SUBJECT TO THE PRIOR APPROVAL OF THE EXECUTIVE DIRECTOR AND GENERAL COUNSEL OF THE AGENCY. ADMINISTRATION RECOMMENDATION: Approve the Resolution. BACKGROUND On March 5, 1997, the Miami Beach Redevelopment Agency (the "Agency"), the City of Miami Beach (the "City"), RDP Royal Palm Hotel Limited Company ("RDP") and RDP Shorecrest Hotel Limited Company executed a Letter of Intent ( "LOI") pertaining to the development and operation of the Royal Palm Crowne Plaza Resort, an African-American owned convention center hotel in Miami Beach. Under the terms of the LOI, the Agency's total funding obligation towards the project is $10 Million, of which $5.5 Million has been spent to acquire the fee title to the Royal Palm property. The remaining $4.5 Million will be used to acquire the Shorecrest Hotel property and the leasehold interest pertaining to the Shorecrest. 5 SUUTIl VUI~r: l2edevel()pment I)lstrict Clff CI:~TI:I2 l2edevel()pment l)istJict RESOLDnON NO_ A RESOLUlTON OF THE CHA..l:&."\fAJ.'V AND ME."IBERs OF THE MlA.Mr BEACH REDEVELOPME~iT AGENCY (THE "AGENCY") AUTHORIZING THE AGENcY TO ACQUll.U: THE SHORECREST HOTEL LEASEHOLD lNTEREST; AUTRORlZl1'iG THE AGENCY TO PAY$3-1 MILLION FOR SUCH ACQUISlTIoN; AUTHORIZING TIIE CHAIR.i\1:AN" A!'l"D SECRETARY TO,EXEclJ J.E THE SB:ORECREST OPTION AG:REEl\1:ENr ATTACHED HERETO'M"D INCORPORATED lIEREIN; AND ADTf..f:ORIZl:N"G TIrE TAKING OF ALLINCID~TAL ACITONS; BUT ALL OF THE ABOVE SUBJEcTTO'THE PRIORAPPROV AL OF THE EXEctJTIVE DIRECTOR AND GEJ.'IfERAL COUNSEL OF THE AGENcy. WlIEREAs. on. March 5" 1997, the Miami Beach Redevelopment Agency (the ~AgencY"J, the City of Miami Beach (the ,~ityj. RDP ROYal Palm Hotel Limited Company ("R,DP") and RDP Shorecrest Hotel Limited Company entered into that certain Letter ofID.tent. (the ....LOl). which sets forth,. among other things. the general. tenus of proposed definitive agreements concerning the development and operation of an Afric::an.-Americ:an owned convention hotel (the "Hotel") on the Royal Palm Hotel property, which. is . owned by the Agency. and the Shorecresr Hotel property. which is to be owned by theA.:."oency; and 'WHEREAS, the LOr contemplates that the Agency will become the owner oJ; amongoth~ property. the leasehold interest Pertaining to the Sho~ Hotel property (the~ehold); and ' WB'EREAs, the LOI :further contemplates that the Agency VlJ.l1 acquire the Leasehold by'virtneof the ~ from RD1' or au afliliamd eatityto the Agency of a purchase andsaIe agreement Pertaining to the Leasehold and the CODStIl:IlInm:ion of that agreement 'between the Agency, as purchaser; ,and the seller; and WB'EREAs. the agreement to purchase the Leasehold provides for a closing. on or befure Marclt 31, .1997 and there are no Tegw",-Iy schednled Ageocy Board meetings in March after the March 19 meeting; and W'HEREAs~ there are various conditions to the closing on the acquisition. of the Leasehold which must be met by the seller; and W'HEREAs, the Agency and RDP have negotiated the teDllS of that certain Shorecrest Option Agreement. attached. hereto and mcoIporated herein; and \VB:ERE.As. the acquisition of the Leasehold and the development of the hotel are parts of and are consistem 'With the City Center Historic Convention Village ~'l 4. The Chairman and Members hereby find that the acquisition of the Leasehold and the development of the Hotel are author...zed by Chapter 163, Florida Stal:utes. 5. Ibis resolution shall take effect immediately upon adoption.. P_<\SSED AND ADOPTED this day of March. 1997. CHAJRJ.'-1AN A 1lEST: SECRETARY APPROVED AS TO FORM & LANGUAGe & FOR EXeCUnON ~ 9' SHORECRESTOPTIONAGREEMENT This Shore crest Option Agreement is made and entered into as of the _ day of ,1997, by and among RDP ROYAL PALM HOTEL LIMITED COMPANY, a Florida limited liability company ("RP"); and the MIAMI BEACH REDEVELOPMENT AGENCY, a Florida public body corporate and politic ("Agency"). BACKGROUND 1. In February 1993, the City CenterlHistoric Convention Village Redevelopment and Revitalization Area in Miami Beach, Florida, was officially established by the adoption of a Redevelopment Plan (the "Redevelopment Plan"). The Redevelopment Plan represents the effort and commitment of the Agency to foster the development of convention quality hotels, ancillary improvements and facilities, and necessary linkages to the Miami Beach Convention Center. Pursuant to the Redevelopment Plan, the Agency has acquired the Royal Palm Hotel (the "Royal Palm Hotel Property") located at 1545 Collins Avenue, Miami Beach, Florida. 2. The Agency has decided to provide the Mrican-American community with an opportunity in the hospitality industry by making available the Royal Palm Hotel and additional financial incentives for an Mrican-American owned hotel (the "Hotel"). 3. In furtherance of the Redevelopment Plan, the Agency published Request for Proposals No. 45-9596 (the "RFP") seeking bids for the development and operation of a convention hotel to be owned by African-Americans. 4. On June 5, 1996, after a public review process, the Agency selected RP from among the groups which submitted responses to the RFP and directed representatives of the Agency to negotiate the terms under which RP would develop, own and operate the convention hotel in accordance with the requirements of the RFP. 5. As part of RP's response to the RFP, RP offered to cause the property lying immediately to the south of the Royal Palm Hotel Property commonly known as the Shorecrest Hotel (the "Shorecrest Hotel Property") having a street address of 1535 Collins Avenue, Miami Beach, Florida, to be developed as part of the Hotel. An affiliate of RP entered into contracts to acquire the fee title, and the ground lessor and ground lessee interests in the Shore crest Hotel Property. 6. The Agency has offered financial incentives to RP in connection with the development of the Hotel. A portion of the Agency's funding towards the development of the Hotel was used to acquire the fee title to the Royal Palm Hotel Property, which property is to be leased on a long term basis pursuant to a ground lease (the "Ground Lease") to RP. The cost of acquiring the Royal Palm Hotel Property by the Agency was approximately $5.5 million. 7. Since June 5, 1996, RP and the Agency have been involved in extensive negotiations to structure agreements whereby the Hotel would be developed by RP. During the course of those negotiations, it became apparent to all parties that it is in the best interest of the Agency that the Agency acquire the fee title and leasehold interests in the Shore crest Hotel Property, terminate the existing ground lease (the "Existing Ground Lease") on said property, and lease the Shorecrest Hotel Property to RP as part of the Ground Lease. The General Counsel of the Agency has determined that the acquisition of the interests in the Shore crest Hotel Property and the leasing 2 of the Shore crest Hotel Property to RP as part of the Ground Lease is not a material modification of RP's bid in response to the RFP. 8. Simultaneous with the execution of this Agreement, RP has caused to be assigned to the Agency all of its right, title and interest in the agreement described in Exhibit A attached hereto and made a part hereof (the "Leasehold Contract"), which agreement is the purchase and sale agreement relating to the acquisition of the leasehold interest (the "Leasehold Interest") under the Existing Ground Lease, and the Agency has closed on the transaction contemplated by said Leasehold Contract and has acquired the Leasehold Interest. 9. Litigation is pending relating to the agreement (the "Fee Contract") described in Exhibit "B" attached hereto and made a part hereof concerning the acquisition of the fee title and the lessor's interest in the Existing Ground Lease (collectively, the "Fee Interests"), 10. In the event of a favorable outcome or settlement of said litigation, RP intends to cause the Fee Interests to be conveyed to the Agency. 11. The Agency and RP, as of the date hereof, have not yet finalized all of the definitive agreements which are contemplated by the parties relative to the ownership, operation and development of the Hotel. 12. The principals of RP have consistently expressed an intention and desire to develop the Shorecrest Hotel Property as a separate and distinct non-convention hotel in the event RP is unable to reach agreement with the Agency regarding the 3 ownership, operation and development of the Hotel to be constructed on both the Royal Palm Hotel and Shore crest Hotel Properties. 13. RP would not have been assigned the Leasehold Contract to the Agency and RP will not agree to cause the Fee Interests to be conveyed to the Agency without the Agency agreeing to enter into this Agreement providing for, inter alia, an option in favor of RP to acquire from the Agency the Leasehold Interest for the purposes described in' the preceding Section, on terms hereinafter set forth, in the event the Agency and RP are unable to reach mutually acceptable agreements relating to the ownership, operation and development of the Hotel. 14. The Agency consistently has expressed its willingness to institute eminent domain litigation and proceedings to acquire the Shorecrest Hotel Property in connection with the development of a convention hotel if it deems such to be necessary. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: 1. Recitals. The foregoing recitals are true and correct and incorporated herein. 2. Acquisition of the Leasehold Interest. Simultaneous with the execution and delivery of this Agreement and the execution and delivery of the assignment of the Leasehold Contract to the Agency, the Agency has acquired the Leasehold Interest. The Agency expended the sum of $3,100,000.00 towards the purchase price of the 4 Leasehold Interest at closing ("Agency's Funding") and RP expended the sum of $[approx. $956,500] ("RP's Contribution"). 3. Ootion to Purchase the Leasehold Interest. In consideration of the payment of RP's Contribution and for other good and valuable consideration, the Agency hereby grants to RP the option (the "Option") to purchase the Leasehold Interest on the terms and conditions set forth in the Terms of Purchase and Sale attached hereto and made a part hereof as Exhibit C (the "Purchase Terms"). In the event, on or before October 31, 1997, the Agency and RP are unable or unwilling for any reason whatsoever in the sole and absolute discretion of each of the parties hereto to execute and deliver mutually acceptable written agreements relating to the ownership, operation and development of the Royal Palm Hotel and Shore crest Hotel Properties as a single convention hotel complex as contemplated by the RFP including, without limitation, the ground lease, the terms of subordination of ground rent payments due the Agency in favor of RP's first mortgage holder, a garage agreement, a development agreement and convention center agreement, RP shall have the right to exercise the Option.. The Option shall be exercised by RP, if at all, by written notice to the Agency, in accordance with the notice provisions contained in the Purchase Terms not later than November 30, 1997 at 5:00 p.m. (the "Option Period"). If the Option is not exercised in the manner described above, the Agency shall repay to RP an amount equal to RP's Contribution on or before December 7, 1997, whereupon the parties shall have no further rights or obligations hereunder. Said payment shall 5 accrue interest from December 7, 1997 to the date of payment at the rate of 14% per annum. 4. Fee Interest. RP shall, in good faith, attempt to specifically enforce the Fee Contract and acquire the Fee Interests. Simultaneous with the acquisition of the Fee Interests by RP, RP shall convey the Fee Interests to the Agency for a mutually acceptable purchase price. The Agency reserves the right, however, to institute eminent domain litigation and proceedings with regard to the Fee Interests at such time as the Agency, in its sole and absolute discretion, believes that further delays in RP acquiring the Fee Interests pursuant to the Fee Contract jeopardize the timely completion of the Hotel by RP. 5. RecordinllS. Simultaneous with the execution of this Agreement, the parties shall execute and deliver a Memorandum of Option setting forth the basic terms of the Option in a form reasonably acceptable to the parties hereto. The Memorandum of Option shall be recorded by the Agency among the Public Records of Dade County, Florida, simultaneous with and immediately after the recording of the instrument assigning the Leasehold Interest to the Agency. The Agency hereby covenants and agrees that until the earlier to occur of: (i) the Agency and RP entering into all the definitive agreements described in Section 3, above; (ii) the expiration of the Option Period without exercise of the Option by RP and after repayment ofRP's Contribution to RP, or (Hi) the acquisition of the Leasehold Interest from the Agency by RP after exercise of the Option, it shall not record or cause to be recorded among the Public Records of Dade County, Florida, any instrument or document affecting the title to the 6 Shore crest Hotel Property, including any amendments, modifications or a termination of the Existing Ground Lease, without the prior written consent of RP, which consent may be withheld by RP in its sole and absolute discretion. 6. Reservation of Ril!'hts. Notwithstanding anything to the contrary, the Agency reserves the right, in its sole and absolute discretion, to initiate eminent domain litigation and proceedings, at any time and against any persons or entities including, but not limited to, RP with regard to the leasehold and/or the fee interests concerning the Shorecrest Hotel Property; provided, however, RP reserves the right to contest the Agency's right to prevail in said proceedings based upon, inter alia, this Agreement. 7. Miscellaneous. 7.1 This Agreement has been negotiated and executed in Florida; it shall be construed and governed in accordance with the laws of the State of Florida, without application of conflicts of laws principles. 7.2 In the event any term or provision of this Agreement is determined by appropriate judicial authority to be illegal or otherwise invalid, such provision shall be given its nearest legal meaning or be construed as deleted as such authority determines, and the remainder of this Agreement shall be construed to be in full force and effect. 7.3 In the event of any litigation between the parties under this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees. Wherever provision is made in this Agreement for "attorneys' fees," such term shall be 7 deemed to include attorneys' fees and court costs, whether or not litigation IS commenced, including those for appellate and post judgment proceedings. 7.4 Each party has participated fully in the negotiation and preparation of this Agreement with full benefit of counsel. Accordingly, this Agreement shall not be more strictly construed against either party. 7.5 Whenever used in this Agreement, the singular shall include the plural, the plural shall include the singular, any gender shall include every other and all genders, and captions and paragraph headings shall be disregarded. 7.6 The captions in this Agreement are for the convenience of reference only and shall not be deemed to alter any provision of this Agreement. 7.7 Any reference in this Agreement to time periods less than six (6) days shall, in the computation thereof, exclude Saturdays, Sundays, and legal holidays; any time period provided for in this Agreement which shall end on a Saturday, Sunday or legal holiday shall extend to 5:00 p.m. of the next full business day. 7.8 Except for the Letter of Intent between the Agency, RP and the City of Miami Beach dated March 5, 1997, this Agreement constitutes the entire agreement between the parties relating to the matters contained herein. This Agreement may not be changed, altered or modified except by an instrument in writing signed by the party against whom enforcement of such change would be sought. 7.9 All references in this Agreement to exhibits, schedules, paragraphs, subparagraphs and sections refer to the respective subdivisions of this Agreement, unless the reference expressly identifies another document. 8 7.10 All of the terms of this Agreement, shall be binding upon and shall inure to the benefit of the parties to this Agreement and their respective successors and assigns. 7.11 Typewritten or handwritten provisions which are inserted in or attached to this Agreement as addenda or riders and which bear the signature of the party against whom enforcement of that provision is sought shall control all printed or pretyped provisions of this Agreement with which they may be in conflict. 7.12 This Agreement may be executed in counterparts. 7.13 Time is of the essence in this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first written above. Signed, sealed and delivered in the presence of: RDP ROYAL PALM HOTEL LIMITED COMPANY, a Florida limited liability company By: 9 ATTEST: Robert Parcher, Secretary MIA3-470907.2 l\1IAMI BEACH REDEVELOPMENT AGENCY, a Florida public body corporate and politic By: Seymour Gelber, Chairman APPROVED AS TO FORM & LANGUAGE & FOR execunoN ~JL: . oment A9t"cv .", . '.~'." . J(!2/7? Dote 10 EXHIBIT "A" Purchase and Sale Agreement dated February 2, 1996, by and between JACOB 1535 PROPERTIES, INC. ("Seller") and R. DONAHUE PEEBLES, INC., and/or assigns ("Purchaser"), as amended by Amendment to Purchase and Sale Agreement dated March 7,1996, by Second Amendment to Purchase and Sale Agreement dated June 17, 1996 and by Third Amendment to Purchase and Sale Agreement dated December 6, 1996. 11 EXHIBIT "B" Purchase and Sale Agreement dated February 28, 1996, by and between Ignacio Andres Cardona and Gisela Lizama Cardona, Co-Trustees under Trust Agreement dated December 29, 1976 ("Seller"), and The R. Donahue Peebles Companies, Inc. and/or assigns ("Purchaser"), as amended by Amendment to Purchase and Sale Agreement dated March 29, 1996. 12 EXHIBIT "C" TERMS OF PURCHASE AND SALE 1. PURCHASE AND SALE. Subject to the terms of this instrument, Seller agrees to sell to Purchaser and Purchaser agrees to purchase from Seller the following property (collectively, the "Property"): 1.1 The Leasehold Interest; 1.2 All buildings, structures and other improvements situated on the Shorecrest Hotel Property to the extent owned by Seller; 1.3 All deposits, licenses, permits, and contract rights pertaining to ownership and/or operation of the Improvements, or Leasehold Interest, if any; 1.4 All strips, gores, easements, privileges, rights-of-way, riparian and other water rights, rights to lands underlying any adjacent streets or roads, and other tenements, hereditaments and appurtenances, if any, pertaining to or accruing to the benefit of the owner of the Leasehold Interest. 2. CLOSING DATE. Subject to other provisions of this instrument for extension or termination, closing on the transaction described in this instrument (the "Closing") shall be held at the offices of the attorneys for Purchaser, Holland & Knight, 701 Brickell Avenue, Miami, Florida 33131, on or before December 31, 1997, on a date to be determined by Purchaser upon not less than ten (10) days' prior written notice to Seller (the "Closing Date"), In the event a portion of the Purchase Price is to be derived from institutional financing or refinancing, the requirements of the lending institution as to place, time of day and procedures for Closing, and for disbursement of mortgage proceeds, shall control, provided that disbursement shall occur on the day of Closing. 3. PURCHASE PRICE. 3.1 The total purchase prIce (the "Purchase Price") to be paid by Purchaser to Seller for the Property is Three Million One Hundred Thousand and No/100 Dollars ($3,100,000), in cash at Closing, subject to prorations and adjustments as provided herein, to be paid by cashier's check or by wire transfer. 4. TITLE. Purchaser shall obtain its own title evidence. Seller shall convey to Purchaser at closing, good and marketable and insurable title to the Leasehold Interest, with warranty of title limited to lawful claims of all persons claiming by, through or under Seller, free and clear of all liens, encumbrances, leases, tenancies, covenants, conditions, restrictions, rights-of-way, easements and other matters affecting title, except the following (the "Permitted Exceptions"): 4.1 Ad valorem real estate taxes for the year of closing; 4.2 All applicable zoning ordinances and regulations; 4.3 Rights, title or interest, if any, of the public to use as public beach or recreational area any part of the Property lying between the water abutting the Shore crest Hotel Property and the most inland of any of the following: (a) the natural line of vegetation; (b) the most extreme high water mark; (c) the bulkhead line; or (d) any other line which has been or which hereafter may be legally established as relating to such public use; 2 4.4 The Coastal Construction Control Line for Dade County, Florida; 4.5 Possible lack of title to any portion of the Shorecrest Hotel Property that lies easterly of the Erosion Control Line shown on Plat Book 105, page 62 of the Public Records of Dade County, Florida, and westerly of the mean high water line of the Atlantic Ocean; 4.6 Rights and easements of the United States government for commerce, navigation, recreation and fisheries in and to any portion of said land which has been created by artificial means or accreted to any portion so created and riparian rights, if any; and 4.7 Terms and conditions of the Existing Ground Lease. 5. SELLER'S REPRESENTATIONS. WARRANTIES AND COVENANTS. Seller represents and warrants to Purchaser and covenants and agrees with Purchaser as follows: 5.1 There are no agreements currently in effect which restrict the sale of the Leasehold Interest; 5.2 Seller has the right, power and authority to consummate the transactions contemplated herein; 5.3 At all times prior to and as of Closing, to the best of Seller's knowledge and belief, all of Seller's representations, warranties and covenants contained herein shall be true and correct; no representation or warranty by Seller contained herein contains any untrue statement of a material fact or omits to state a 3 material fact necessary in order to make the statements or information contained in them or herein not misleading. 6. CONDITIONS PRECEDENT. An express condition precedent to Purchaser's obligation to close this transaction is the truth and correctness of all of Seller's representations and warranties and the fulfillment of all of Seller's covenants at all times prior to and as of Closing. 7. -SELLER. 7.1 If any of Seller's representations and warranties are not true and correct or Seller's covenants are not fulfilled or all other conditions precedent are not met as of Closing (or earlier specified date, if any), or Seller fails to perform any of the terms and conditions herein contained or is otherwise in default hereunder, then Purchaser, at Purchaser's sole option, may elect to: 7.1.1 Waive the default or failure and close "as is"; or 7.1.2 Cancel the exercise of the Option by written notice to Seller given on or before the Closing Date, in which event Seller shall pay to RP, within ten (10) days of the receipt by Seller of such notice, an amount equal to RP's Contribution together with interest on said amount which shall accrue at the rate of ten (10%) percent per annum from the date of payment of RP's Contribution by Purchaser to Seller to acquire the Leasehold Interest. In the event Seller fails to timely pay to Purchaser RP's Contribution, interest shall accrue on RP's Contribution from the date of such default to the date of payment at the rate of fourteen (14%) percent per annum; 4 upon such payment, both parties shall be released from all further obligations under this Agreement; or 7.1.3 Seek specific performance of Seller's obligations hereunder. 7.2 In the event Purchaser fails to purchase the Leasehold Interest in accordance with the terms hereof, Seller shall pay to Purchaser an amount equal to RP's Contribution, together with any amounts due Purchaser pursuant to the Letter of Intent dated March 5, 1997, as it may be amended, between the parties; whereupon both parties shall be released from all further obligations under this Agreement. 8. PRORATIONS. All proratable items, including real estate taxes, shall be prorated as of the Closing Date. 9. IMPROVEMENT LIENS. Certified liens for governmental improvements or special assessments as of the Closing Date, if any, are the responsibility of the Seller and shall be paid at closing. 10. CLOSING COSTS. At the Closing, Purchaser shall pay the documentary stamps and surtax, if any, due on the assignment of Leasehold Interest. Each party shall bear the recording costs of any instruments received by that party, except that Seller shall pay the recording costs on documents necessary to clear title. Purchaser shall pay for its own title insurance policy and survey. 11. CLOSING. 11.1 Seller shall convey title to the Leasehold Interest, with limited warranty of title as described in Section 4, by good and sufficient assignment of lease 5 subject only to the Permitted Exceptions. Seller shall also deliver to Purchaser at the Closing: 11.1.1 a mechanic's lien affidavit, to the title insurer and Purchaser, in form acceptable to Purchaser's title insurer to delete the standard exception relating to such liens in Purchaser's leasehold title insurance policy; 11.1.2 an affidavit, to the Title Insurer and Purchaser, that, to Seller's knowledge, there are no unrecorded easements and that Seller has done nothing to change the state of facts shown on the Survey, in form acceptable to Purchaser's Title Insurer to delete the standard exceptions relating to such matters in Purchaser's leasehold title insurance policy; 11.1.3 a gap affidavit and indemnification agreement acceptable to Title Insurer for purposes of deleting the "gap" from Purchaser's title commitment and policy; 11.1.4 instruments necessary to clear title, if any, including those required under this Agreement to remove standard exceptions from the title policy; 11.1.5 appropriate assignments of deposits, licenses, easements, rights-of-way, contract rights, intangible rights and other property and rights included in this transaction; 11.1.6 appropriate restatements of Seller's covenants, representations and warranties as of the date of closing; 6 11.1.7 a non-foreign certificate and other documentation as may be appropriate and satisfactory to Purchaser to meet the non-withholding requirements under FIRPTA and any other federal statute or regulations; 11.1.8 an appropriate reporting form to be submitted with the deed at time of recordation; 11.1. 9 provided the Agency then holds title to the fee interest in the Shore crest Hotel Property, an amendment to the Existing Ground Lease, in form reasonably acceptable to Purchaser and Seller, containing provisions customarily contained in ground leases so as to permit institutional leasehold financing, on a nonsubordinated basis, of a hotel on the Shorecrest Hotel Property; and 11.1.10 an instrument, in form and content reasonably acceptable to Purchaser, reinstating the Existing Ground Lease if, at the time of closing, said Existing Ground Lease has been merged into the fee title in the Shore crest Hotel Property then owned by the Seller. 11.2 Seller and Purchaser shall each execute such other documents as are reasonably necessary to consummate this transaction. 12. BROKERS. The parties each represent and warrant to the other that no real estate broker, salesman or finder was involved in this transaction. If a claim for brokerage or similar fees in connection with this transaction is made by any broker, salesman or finder claiming to have dealt through or on behalf of one of the parties hereto, then that party shall indemnify, defend and hold the other party harmless from all liabilities, damages, claims, costs, fees and expenses whatsoever (including 7 reasonable attorneys' fees and court costs, including those for appellate matters and post judgment proceedings) with respect to said claim for brokerage. The provisions of this section shall survive the Closing or the termination or cancellation of the Option. 13. ASSIG NABILITY. The right to acquire the Leasehold Interest may be assigned by Purchaser to an entity in which R. Donahue Peebles has an interest. 14. . INSPECTIONS. Purchaser, and Purchaser's agents and contractors, shall have the right during the term hereof to enter upon the Property at all reasonable times for purposes of inspection and making tests and studies. Purchaser hereby agrees to and does indemnify, defend and hold Seller harmless from all liabilities, damages, claims, costs, or expenses whatsoever (including reasonable attorneys' fees and court costs) for bodily injury, death, or property damage resulting from any such inspection, test or study. The provisions of this Section shall survive the Closing. 15. NOTICES. Any notices required or permitted to be given hereunder shall be delivered by hand, mailed by certified or registered mail, return receipt requested, in a postage prepaid envelope, or delivered by a nationally recognized overnight delivery service, and addressed as described below; notices shall be deemed effective only upon receipt or refusal of delivery. Notices to Purchaser: RDP Royal Palm Hotel Limited Company 701 Brickell Avenue Suite 2040 Miami, FL 33131 8 With a copy to: Holland & Knight 701 Brickell Avenue, #3000 Miami, Florida 33131 Attn: Stuart K. Hoffman, Esq. Notices to Seller: Miami Beach Redevelopment Agency 1700 Convention Center Drive Miami Beach, FL 33139 Attn: Jose Garcia-Pedrosa, Executive Director With a copy to: Murray Dubbin, General Counsel City of Miami Beach 1700 Convention Center Miami Beach, FL 33139 16. RISK OF LOSS. 16.1 The Property shall be conveyed to Purchaser in its "as is" condition. Seller shall not remove any improvements from the Property between the date of this Agreement and Closing unless agreed to in writing by Purchaser. 16.2 Upon receipt of an offer or any notice or communication from any governmental or quasi-governmental body seeking to take under its power of eminent domain the Leasehold Interest, Seller shall promptly notify Purchaser of the receipt of same and shall send such communication, or a copy of it, to Purchaser. Upon receipt of such notice, Purchaser shall have the right to rescind the exercise of the Option by delivery of written notice to Seller within twenty (20) days of Purchaser's receipt of the communication from Seller, and the closing shall be extended, if necessary, to allow Purchaser said twenty (20) days. In the event Purchaser elects to rescind, then Purchaser shall receive a refund of the RP Contribution, in which case both parties shall be relieved of all further obligations hereunder. In the event Purchaser elects not 9 to rescind and closes on the acquisition of the Leasehold Interest, then Purchaser shall be entitled to all condemnation awards and settlements. Seller and Purchaser agree to cooperate with each other to obtain the highest and best price for the condemned property. 16.3 In the event that the Property is damaged or destroyed by fire or other casualty prior to Closing, then Purchaser shall be entitled to all insurance proceeds paid after Closing. Seller shall have no obligation to reconstruct. 17. RADON GAS NOTICE. Pursuant to Florida Statutes Section 404.056(8), Seller hereby makes, and Purchaser hereby acknowledges, the following notification: 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 persons 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 public health unit. (This notice does not in any way lessen Seller's representation and warranty regarding radon, above.) MIA3-471170.2 10