232-96 RDA
RESOLUTION NO. 232-96
A RESOLUTION OF THE CHAIRMAN AND MEMBERS OF THE MIAMI
BEACH REDEVELOPMENT AGENCY AUTHORIZING AND DIRECTING
THE CHAIRMAN AND SECRETARY TO EXECUTE THE ATTACHED
FOURTH AMENDMENT TO THAT CERTAIN LETTER OF INTENT BY
AND BETWEEN THE MIAMI BEACH REDEVELOPMENT AGENCY, THE
CITY OF MIAMI BEACH, FLORIDA, ST. MORITZ HOTEL
CORPORATION AND LOEWS HOTELS HOLDING CORPORATION,
PERT AINING TO THE DEVELOPMENT OF A CONVENTION CENTER
HOTEL AND PUBLIC PARKING GARAGE, EXTENDING THE DATE FOR
EXECUTION OF THE AGREEMENTS AND INCREASING THE AGENCY'S
POTENTIAL LIABILITY.
WHEREAS, St. Moritz Hotel Corporation ("SMHC") was the winning bidder in response
to the Convention Center Hotel Request for Proposals; and
WHEREAS, the Miami Beach Redevelopment Agency (the "RDA"), the City of Miami
Beach, Florida (the "City"), SMHC and Loews Hotels Holding Corporation ("LHHC") executed a
Letter ofIntent (the "La!") pertaining to, among other things, the development of an approximately
800 room hotel (the "Hotel") at and near 16th Street east of Collins Avenue, Miami Beach and an
approximately 800 car public garage (the "Garage") at or near 16th Street between Collins and
Washington Avenues, Miami Beach; and
WHEREAS, negotiations are proceeding on numerous agreements relating to the
development of the Hotel and Garage; and
WHEREAS, the LOI originally provided, among other things, that ifthe agreements for the
development ofthe Hotel and Garage and related matters were not executed by the RDA and SMHC
prior to December 15,1995, the RDA may be responsible to reimburse SMHC for certain design
expenses for the development of the Hotel and the Garage; and
WHEREAS, the RDA, the City, SMHC and LHHC executed certain amendments to the
LOI, extending, among other things, the date referenced in the preceding paragraph; and
WHEREAS, due to, among other things, the work and time involved in connection with the
negotiation of numerous agreements, a bond issuance, bank financing and property acquisition, the
RDA, the City, SMHC and LHHC would like to execute the attached Fourth Amendment to the LOI
to, among other things, extend to July 31, 1996 the date by which the agreements must be executed
and when liability for reimbursement of design expenses might apply; and
WHEREAS, SMHC is continuing to incur certain design expenses regarding the Hotel and
has requested an increase in the Agency's potential liability; and
WHEREAS, Section 12(h) ofthe LOI, as amended, provides that the LOI, as amended, may
be modified by a written agreement executed by both of SMHC and the RDA.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE CHAIRMAN AND
MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY as follows:
1. The Chairman and Secretary are authorized and directed to execute the attached
Fourth Amendment to that certain Letter of Intent by and between the Miami Beach Redevelopment
Agency, the City of Miami Beach, Florida, St. Moritz Hotel Corporation and Loews Hotels Holding
Corporation.
2. This Resolution shall take effect immediately upon its passage.
PASSED AND ADOPTED this 7th day of
,1996.
ATTEST:
~t~ r~
SECRETARY
AIT/kw
c:\wpwin60\resos\4amdagmt.rda
FORM APPROVED
REDEVElOPMENT AGENCY
GENER~NS)} .
By 11!~
Date 5-~' 96
2
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. 96-6
February 7, 1996
Chairman and Members of the Board
of the Redevelopment Agency
Jose Garcia-Pedrosa @l
Executive Director . #
A RESOLUTION OF THE') HAIRMAN AND MEMBERS OF THE MIAMI
BEACH REDEVELOPMENT ~GENCY AUTHORIZING AND DIRECTING THE
CHAIRMAN AND SECRETARY TO EXECUTE THE ATTACHED FOURTH
AMENDMENT TO THAT CERTAIN LETTER OF INTENT BY AND BETWEEN
THE MIAMI BEACH REDEVELOPMENT AGENCY, THE CITY OF MIAMI
BEACH, FLORIDA, ST. MORITZ HOTEL CORPORATION AND LOEWS
HOTELS HOLDING CORPORATION, PERTAINING TO THE DEVELOPMENT
OF A CONVENTION CENTER HOTEL AND PARKING GARAGE,
EXTENDING THE DATE FOR EXECUTION OF THE AGREEMENTS AND
INCREASING THE AMOUNT OF THE AGENCY' S POTENTIAL
LIABILITY.
RECOMMENDATION:
Approve the Resolution.
BACKGROUND:
The negotiations with Loews for the convention hotel have proceeded
in a positive and orderly manner. Since the signing of the Letter
of Intent, a number of major milestones have occurred. The timing
of the negotiations, while somewhat longer than discussed, has
proceeded with deliberate objectives. Most importantly, a
conscious decision was made to have the City's team draft all
documents, putting us in a proactive rather than reactive position.
The strategy also involved negotiating and achieving agreement on
business terms before critical documents were drafted.
1
S()UTIl V()I~r:
Iledevel()pment Uistnet
CIIT CI:~r:l?
l?edevel()pment Uistriet
AGENDA ITEM 2-A
February 7, 1996
The ground lease, unique in its complexity, has required
negotiations on a paragraph by paragraph basis. At over 130 pages,
it was the most critical document because it spans the full term of
99 years and also set the tone for the Hotel Development Agreement,
the Garage Development Agreement and numerous other side agreements
which will be entered into.
In December, a major negotiating meeting was held in New York,
during which the entire ground lease was covered, leaving less than
twenty outstanding issues. Subsequent telephone conferences have
narrowed that list significantly, and a major negotiation session
of January 22 through 24, 1996, settled most remaining issues and
made major inroads into the Hotel Development Agreement.
An additional marathon negotiating session is scheduled for mid-to-
late February to complete the hotel development agreement, garage
development agreement and to make major progress in other
documents.
ANALYSIS:
1. STATUS OF DOCUMENTS
The City's Negotiating Team and Administration's objective has
been to aggressively pursue closure to the documents.
Notwithstanding this, the City's position, while anxious to
meet time deadlines, is that we must be satisfied that the
documents adequately protect the City's interest. It is
anticipated by all parties that documents can be completed by
mid-April, so that we can close when all aspects of the
project have been concluded to the City's satisfaction.
2. GMP
A second controlling factor in this initiative has been
introduced by the securing of financing. As a condition of
closure, the banks are requiring a guaranteed maximum price
(GMP) contract from the general contractor which is not
unusual. This is prudent and protects the city as well as
Loews. Given the need to rework plans, Loews projects the
lock-in date to be May I, 1996. Loews cannot meet the bank's
2
requirements until the GMP is secured. The Negotiating Team
believes that the May 1st date is optimistic and will be
pursued. This would allow an extension of closing to May 24,
1996, to accommodate the public hearing process.
3. EISENBERG LAWSUIT
The third controlling factor is the timing of settlement of
the Eisenberg lawsuit which is of critical importance to Loews
and the Banks. The City's legal advisors are aiming for
settling the case by mid-April.
4. Finally, several other cleanup actions on the part of the City
remain which must be dealt with prior to closing, including:
a) An agreement by Dade County to waive County impact fees.
A meeting must be set up with County Commission Chairman
Arthur Teele, Jonathan Tisch, the Mayor and the City
Manager to discuss this. Follow-up action must be taken
by the County Commission. Resolution of this issue will
take at least one month after an initial meeting occurs,
due to County agenda schedules which further emphasizes
the need for a meeting at the earliest possible date.
b) Eminent domain proceedings must move forward to acquire
the privately owned parcels needed for the garage site.
The City Attorney's Office has elected to utilize the
County Attorney's Office as its outside counsel. This
process will also take at least two months to resolve.
Due to the time the City needs to implement its actions, the above
factors all combine to require a reasonable extension of the L.O.I.
The Negotiating Team suggests that only one extension occur and
henceforth is recommending an extension to July 31, 1996 as the
outside date; with full and mutual expectation that a closing can
realistically occur by the end of May, 1996. The Agency must bear
in mind that this cannot happen until the City resolves its
responsibilities.
Because Loews has incurred the significant liability of
architectural drawings, legal fees, bank fees and other numerous
costs, it is the recommendation of the Negotiating Team that the
liability cap be increased from $1.6 million to $3.8 million,
3
commensurate with Loews additional outlays for architectural and
engineering fees.
CONCLUSION
There is no doubt that significant and meaningful commitments have
been made since the signing of the original Letter of Intent.
. The developer has laid out over $3 million (soon to reach $3.8
million) for architectural and engineering services.
. The developer has diligently pursued and obtained design
review approval for the hotel and garage.
. The developer has participated in good-faith negotiations,
resulting in closure on 90% of issues in the major critical
documents.
. The developer has paid out substantial amounts in bank fees to
obtain financing commitments.
. The developer has engaged in an aggressive marketing and pre-
booking effort, resulting in hundreds of thousands of room
nights committed.
. Many of these activities on the part of the developer were
done voluntarily at this time because of the developer's
desire to meet the City's need to obtain a convention hotel at
the earliest possible date. The Negotiating Team recognizes
that any liability to be paid on the part of the City can only
occur if the City defaults, which, hopefully, will not be the
case.
. As a result of this progress, the project can break ground
shortly after closing, resulting in a construction start
twelve months earlier than normally possible if the developer
had not taken the risk to proceed with drawings.
The Negotiating Team wishes to emphasize that, while it is aware of
time constraints, the Agency must know that the Negotiating team
will not sacrifice safety of the City's position or compromise
quality.
4
The RDA should approve the Resolution.
JGP:HSM/jph
5
RESOLUTION NO.
96-21884
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA AUTHORIZING AND DIRECTING
THE MAYOR AND CITY CLERK TO EXECUTE THE ATTACHED
FOURTH AMENDMENT TO THAT CERTAIN LETTER OF INTENT BY
ANDBETWEENTHE~BEACHREDEVELOPMENTAGENCY,THE
CITY OF MIAMI BEACH, FLORIDA, ST. MORITZ HOTEL
CORPORATION AND LOEWS HOTELS HOLDING CORPORATION,
PERTAINING TO THE DEVELOPMENT OF A CONVENTION CENTER
HOTEL AND PUBLIC PARKING GARAGE, EXTENDING THE DATE FOR
EXECUTION OF THE AGREEMENTS AND INCREASING THE AGENCY'S
POTENTIAL LIABILITY.
WHEREAS, St. Moritz Hotel Corporation ("SMHC") was the winning bidder in response
to the Convention Center Hotel Request for Proposals; and
WHEREAS, the Miami Beach Redevelopment Agency (the "RDA"), the City of Miami
Beach, Florida (the "City"), SMHC and Loews Hotels Holding Corporation ("LHHC") executed a
Letter ofIntent (the "LOI") pertaining to, among other things, the development of an approximately
800 room hotel (the "Hotel") at and near 16th Street east of Collins Avenue, Miami Beach and an
approximately 800 car public garage (the "Garage") at or near 16th Street between Collins and
Washington A venues, Miami Beach; and
WHEREAS, negotiations are proceeding on numerous agreements relating to the
development of the Hotel and Garage; and
WHEREAS, the LOI originally provided, among other things, that if the agreements for the
development of the Hotel and Garage and related matters were not executed by the RDA and SMHC
prior to December 15, 1995, the RDA may be responsible to reimburse SMHC for certain design
expenses for the development of the Hotel and the Garage; and
WHEREAS, the RDA, the City, SMHC and LHHC executed certain amendments to the
LOI, extending, among other things, the date referenced in the preceding paragraph; and
WHEREAS, due to, among other things, the work and time involved in connection with the
negotiation of numerous agreements, a bond issuance, bank financing and property acquisition, the
RDA, the City, SMHC and LHHC would like to execute the attached Fourth Amendment to the LOI
to, among other things, extend to July 31, 1996 the date by which the agreements must be executed
and when liability for reimbursement of design expenses might apply; and
WHEREAS, SMHC is continuing to incur certain design expenses regarding the Hotel and
has requested an increase in the Agency's potentialliability; and
WHEREAS, Section 12(h) of the LOI, as amended, provides that the LOI, as amended, may
be modified by a written agreement executed by both ofSMHC and the RDA.
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 authorized and directed to execute the attached Fourth
Amendment to that certain Letter of Intent by and between the Miami Beach Redevelopment
Agency, the City of Miami Beach, Florida, St. Moritz Hotel Corporation and Loews Hotels Holding
Corporation.
2. This Resolution shall take effect immediately upon its passage.
PASSED AND ADOPTED this 7th day of
February
, 1996.
RoW (JtAA-~
CITY CLERK
ATTEST:
AIT/kw
c:\wpwin60\resos\4amdagrnt.res
FORM APPROVED
By~
Date 1. ~ 5~ ?b
2
CITY OF
MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
TO:
FROM:
SUBJECT:
COMMISSION MEMORANDUM NO. ~
Mayor Seymour Gelber and
Memben of the City Commission
Jose Garcia-Pedrosa _" '. 1. "J .
City Manager _If/!
I .
A RESOLUT~N OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING AND
DIRECTING THE MAYOR AND CITY CLERK TO EXECUTE THE
ATTACHED FOURTH AMENDMENT TO THAT CERTAIN LETTER OF
INTENT BY AND BETWEEN THE MIAMI BEACH REDEVELOPMENT
AGENCY, THE CITY OF MIAMI BEACH, FLORIDA, ST. MORITZ
HOTEL CORPORATION AND LOEWS HOTELS HOLDING
CORPORATION, PERTAINING TO THE DEVELOPMENT OF A
CONVENTION CENTER HOTEL AND PARKING GARAGE, EXTENDING
THE DATE FOR EXECUTION OF THE AGREEMENTS AND
INCREASING THE AMOUNT OF THE AGENCY I S POTENTIAL
LIABILITY.
DATE: February 7, 1996
RECOMMENDATION:
Approve the Resolution.
BACKGROUND:
The negotiations with Loews for the convention hotel have
proceeded in a positive and orderly manner. Since the signing
of the Letter of Intent, a number of major milestones have
occurred. The timing of the negotiations, while somewhat longer
than discussed, has proceeded with deliberate objectives. Most
importantly, a conscious decision was made to have the City'S
team draft all documents, putting us in a proactive rather than
reactive position.
The strategy also involved negotiating and achieving agreement
on business terms before critical documents were drafted.
1
RIB
-rl-qL
AGENDA ITEM
DATE
The ground lease, unique in its complexity, has required
negotiations on a paragraph by paragraph basis. At over 130
pages, it was the most critical document because it spans the
full term of 99 years and also set the tone for the Hotel
Development Agreement, the Garage Development Agreement and
numerous other side agreements which will be entered into.
In December, a major negotiating meeting was held in New York,
during which the entire ground lease was covered, leaving less
than twenty outstanding issues. Subsequent telephone
conferences have narrowed that list significantly, and a major
negotiation session of January 22 through 24, 1996, settled most
remaining issues and made major inroads into the Hotel
Development Agreement.
An additional marathon negotiating session is scheduled for mid-
to-late February to complete the hotel development agreement,
garage development agreement and to make major progress in other
documents.
ANALYSIS:
1. STATUS OF DOCUMENTS
The City's Negotiating Team and Administration's objective
has been to aggressively pursue closure to the documents.
Notwithstanding this, the City's position, while anxious to
meet time deadlines, is that we must be satisfied that the
documents adequately protect the City's interest. It is
anticipated by all parties that documents can be completed
by mid-April, so that we can close when all aspects of the
project have been concluded to the City's satisfaction.
2. GMP
A second controlling factor in this initiative. has been
introduced by the securing of financing. As a condition of
closure, the banks are requiring a guaranteed maximum price
(GMP) contract from the general contractor which is not
unusual. This is prudent and protects the city as well as
Loews. Given the need to rework plans, Loews projects the
lock-in date to be May 1, 1996. Loews cannot meet the
2
bank's requirements until the GMP is secured. The
Negotiating Team believes that the May 1st date is
optimistic and will be pursued. This would allow an
extension of closing to May 24, 1996, to accommodate the
public hearing process.
3. EISENBERG LAWSUIT
The third controlling factor is the timing of settlement of
the Eisenberg lawsuit which is of critical importance to
Loews and the Banks. The City's legal advisors are aiming
for settling the case by mid-April.
4. Finally, several other cleanup actions on the part of the
City remain which must be dealt with prior to closing,
including:
a) An agreement by Dade County to waive County impact
fees. A meeting must be set up with County Commission
Chairman Arthur Teele, Jonathan Tisch, the Mayor and
the City Manager to discuss this. Follow-up action
must be taken by the County Commission. Resolution of
this issue will take at least one month after an
initial meeting occurs, due to County agenda schedules
which further emphasizes the need for a meeting at the
earliest possible date.
b) Eminent domain proceedings must move forward to
acquire the privately owned parcels needed for the
garage site. The City Attorney's Office has elected
to utilize the County Attorney's Office as its outside
counsel. This process will also take at least two
months to resolve.
Due to the time the City needs to implement its actions, the
above factors all combine to require a reasonable extension of
the L.O.I. The Negotiating Team suggests that only one
extension occur and henceforth is recommending an extension to
July 31, 1996 as the outside date; with full and mutual
expectation that a closing can realistically occur by the end of
May, 1996. The Commission must bear in mind that this cannot
happen until the City resolves its responsibilities.
3
Because Loews has incurred the significant liability of
architectural drawings, legal fees, bank fees and other numerous
costs, it is the recommendation of the Negotiating Team that the
liability cap be increased from $1.6 million to $3.8 million,
commensurate with Loews additional outlays for architectural and
engineering fees.
CONCLUSION
There is no doubt that significant and meaningful commitments
have been made since the signing of the original Letter of
Intent.
. The developer has laid out over $3 million (soon to reach
$3.8 million) for architectural and engineering services.
. The developer has diligently pursued and obtained design
review approval for the hotel and garage.
. The developer has participated in good.faith negotiations,
resulting in closure on 90% of issues in the major critical
documents.
. The developer has paid out substantial amounts in bank fees
to obtain financing commitments.
. The developer has engaged in an aggressive marketing and
pre-booking effort, resulting in hundreds of thousands of
room nights committed.
. Many of these activities on the part of the developer were
done voluntarily at this time because of the developer's
desire to meet the City's need to obtain a convention hotel
at the earliest possible date. The Negotiating Team
recognizes that any liability to be paid on the part of the
City can only occur if the City defaults, which, hopefully,
will not be the case.
. As a result of this progress, the project can break ground
shortly after closing, resulting in a construction start
twelve months earlier than normally possible if the
developer had not taken the risk to proceed with drawings.
4
The Negotiating Team wishes to emphasize that, while it is aware
of time constraints, the Agency must know that the Negotiating
team will not sacrifice safety of the City's position or
compromise quality.
The RDA should approve the Resolution.
JGP:HSM/jph
5
FOURTH AMENDMENT
This is a Fourth Amendment (the "Fourth Amendment" ), dated as of February 7, 1996, to
that certain Letter ofIntent (the "LOI"), dated as of May 3, 1995, a copy of which is attached hereto
as Exhibit "A" and incorporated herein, as amended by that certain Amendment to the LOI (the
"Amendment"), dated as of December 6, 1995, a copy of which is attached hereto as Exhibit"B" and
incorporated herein, as further amended by that certain Second Amendment to the LOI (the "Second
Amendment"), dated as of January 10, 1996, a copy of which is attached hereto as Exhibit "C" and
incorporated herein, and as further amended by that certain Third Amendment to the LOI (the "Third
Amendment"), dated as of January 24, 1996, a copy of which is attached hereto as Exhibit "D" and
incorporated herein. The Fourth Amendment, the Third Amendment, the Second Amendment, the
Amendment and the LOI are by and between the Miami Beach Redevelopment Agency, a public
body corporate and politic (the "RDA"); the City of Miami Beach, Florida, a Florida municipal
corporation (the "City"); St. Moritz Hotel Corporation, a Florida corporation ("SMHC"); and Loews
Hotels Holding Corporation, a Delaware corporation ("LHHC"). The LOI, as amended by the Third
Amendment, the Second Amendment and the Amendment, is referred to herein as the "LOI, as
amended. "
RECITALS
WHEREAS, SMHC was the winning bidder in response to the Convention Center Hotel
Request for Proposals; and
WHEREAS, the RDA, the City, SMHC and LHHC executed the LOI, pertaining to, among
other things, the development of an approximately 800 room hotel (the "Hotel") at and near 16th
Street east of Collins Avenue, Miami Beach and an approximately 800 car public garage (the
"Garage") to be located at or near 16th Street between Collins and Washington Avenues, Miami
Beach; and
WHEREAS, negotiations are proceeding on numerous agreements relating to the
development of the Hotel and Garage; and
WHEREAS, the LOI originally provided, among other things, that if the agreements for the
development of the Hotel and Garage and related matters were not executed by the RDA and SMHC
prior to December 15, 1995, the RDA may be responsible to reimburse SMHC for certain design
expenses for the development of the Hotel and the Garage; and
WHEREAS, the RDA, the City, SMHC and LHHC executed the Amendment, the Second
Amendment and the Third Amendment, extending, among other things, the date referenced in the
preceding paragraph; and
WHEREAS, due to, among other things, the work and time involved in connection with the
negotiation of numerous agreements, a bond issuance, bank financing and property acquisition, the
RDA, the City, SMHC and LHHC would like to amend the LOI, as amended, to extend further the
time by which agreements must be executed and liability for reimbursement of design expenses
might apply; and
WHEREAS, SMHC is continuing to incur certain design expenses regarding the Hotel; and
WHEREAS, Paragraph 12(h) of the LOI, as amended, provides that the LOI, as amended,
may be modified by a written agreement executed by both of SMHC and the RDA.
NOW THEREFORE, in exchange for the mutual promises contained herein, and other
good and valuable consideration, the receipt and adequacy of which is hereby conclusively
acknowledged, the parties agree as follows:
I. ABOVE RECITALS.
The above recitals are true and correct and are incorporated as a part of this
Fourth Amendment.
2. MODIFICATIONS.
a) Paragraph 11 of the LOI, as amended, entitled "Design Development Expense
Reimbursement", is changed as follows (underlines indicate additions; strike-outs indicate deletions):
11. Design Development Expense Reimbursement
The parties acknowledge that SMHC will, of necessity, incur significant out-
of-pocket costs for professional architectural design, engineering and other technical
advice and services in connection with the design, construction and permitting of the
Hotel ("Design Costs") prior to the execution ofthe Agreements. In consideration
of the foregoing, and in order to insure the timely consummation of the transactions
contemplated hereby, SMHC and the Agency have agreed that such costs will be
subject to reimbursement as follows:
(a) if the Agency or the City, as applicable, has not, prior to Fcbma:r,' 8, 1996
July 31. 1996, entered into binding agreements to raise the funds necessary to meet
its obligations as contemplated by Paragraph 2(b)(3) and Paragraphs 3(a) and (b),
then the Agency shall, no later than Fcbrtlttry 22, 1996 August 14. 1996, pay to
SMHC the Qualified Design Costs (as hereinafter defined). upon submission by
SMHC to the Agency of written documentation verifying that such Qualified Design
Costs have been incurred;
2
(b) if SMHC has not by Febftlttry 8, 1996 July 31. 1996 entered into binding
financial commitments to obtain the first mortgage financing as contemplated by
Paragraph 2(b)(1), SMHC shall bear all Design Costs incurred by it; and
(c) if the Agreements are not in final form acceptable to the parties for execution
by Fcbrua:ry 8, 1996 July 31. 1996, for any reason whatsoever, including the mutual
failure ofSMHC and the Agency (or the City, as the case may be) to obtain financing
commitments pursuant to (a) and (b) above, SMHC shall bear one half of the
Qualified Design Costs and the Agency shall, no later than Febru8:l')' 22, 1996 Au~ust
14. 1996, reimburse SMHC for one half of the Qualified Design Costs. upon
submission by SMHC to the A~ency of written documentation verifying that such
Qualified Desi~n Costs have been incurred.
The term "Qualified Design Costs" shall mean Design Costs in an amount not to
exceed $1,600,000, $3.800.000.; l'rervided, ftOwc-,;cr, that ifbet-Nccn Jul) 15, 1995
find Augu3t 1, 1995 thc Agency notifie3 SMIIC that it -.". i3ftC3 SMIIC to 3u3pcnd
furthcr dC3ign v..ork, Qualificd Dcgign COgt3 3fl.all not exceed $1,000,000.
b) Paragraph 12(t) of the LOr, as amended, entitled "Termination" is modified
as follows:
The reference to "February 8,1996" is changed to "July 31,1996."
3. OTHER PROVISIONS.
The other provisions of the LOI, as amended, are unchanged.
4. RATIFICATION.
The RDA, the City, SMHC and LHHC ratify their agreement with the terms
of the LOI, as amended, as modified by this Fourth Amendment.
5. GOVERNING LAW.
This Fourth Amendment shall be governed by and construed in accordance
with the laws of the State of Florida, without reference to principles of conflict of laws.
6. HEADINGS.
Headings in this Fourth Amendment are only for convenience, are not a
substantive part ofthis Fourth Amendment or the LOI, as amended, and do not affect the meaning
of any provision of this Fourth Amendment or the LOI, as amended.
3
IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment to be
executed by their appropriate officials.
ATTEST:
~b~a r~
By:
Robert Parcher, Secretary
Date: ~~
ATTEST:
Rt)~~ {J~
Robert Parcher, City Clerk
Date: j '/1'
By:
ATTEST:
By:
I'.
.;, -'" '.\
Gary w. Garson, Esq.
Print Name
Date: February 13, 1996
ATTEST:, \
By:
,
,< .... ,.;- \ -----'
Gary w. Garson, Esq.
Print Name
Date: February 13, 1996
AIT: kw:c:wpwin60\ait\smhclhhc.4am
Date:
r Gelber, ChairmWlDEVELOPMENT AGENPy
GENERAL COUNSEL
By /!Ii ~
By:
APPRC' .
LEGAL D~PI
Date: By ~ /;:IiJIi1i -
ST. MORITZ HOTEL CORPORATION Date
By:
ck S. Adler, Vice president
Print Name and Title
Date: February 13, 1996
LOEWS HOTELS HOLDING CORPORATION
By:
Date: February 13, 1996
4
. I
. \
LETI'ER OF nrrEl'n:
May~, 1995
Re: Loews ~ami Beach Hotel
In February 1993, the City Center/Historic Convention village
Redevelopment and Revitalization Area was officially est.ablished by
the adoption of a Redevelopment plan (the "Redevelopment Plan").
The Redevelopment plan was the resul t of the combined effort of. t.he
City of Miami Beach (the "City"), Miami Beach Redevelopment Agency
(the "Agency"), Met.ropolit.an Dade Count.y and the State of Florida.
The Redevelopment Plan. represents the effort and commitment. of t.he
Agency and the Cit.y to foster the development of convention quality
h?tels, ancillary improvements and facilities, and necessary
linkages t:o the Convent.ion Center. Pursuant to this Plan, the
Agency has acquired the land, ~'1own as Site I-A, which it has
agreed to make available for a convention headquarters hot.el which
will serve as the cornerstone of the Redevelopment Plan.
In furtherance of the Redevelopment Plan, the City published
a Request for Proposal ("RFpn) dated November 29, 1993.
In a resolution dated July 21, 1994, after a public ~eview
process, the Agency selected St. Moritz Hotel Corp. ("SMECn) from
among the groups which submitt.ed proposals pursuant. to the REP and
directed representatives of the Agency to negotiate the terms under
which SMEC would develop, construct, own and operate the convention
headquarters hotel referred co above {the "Hotel"} in accordance
wit.h the requirements of the RFI? This letter sets forth the
understanding reached as a result: of such negotiations.
1.. The Hot.el
The Hotel will be an approximately aOO-room headquarters
convention hotel to be constructed on sice I-A described in tbe
REP. The Hotel will be a first class, upscale property with
suitable convention, conference and meeting space and appropriate
amenities meeting the standards of the Loews Hotel chain and those
standards set forth in the Ground Lease {as hereinafter defined} .
It will be developed based upon the concept presented in SMHC's
response to the RFP, dat.ed Marcb 7, 1994, subject to the definitive
agreements to be entered into between the Agency and/or City (as
applicable) and SMEC (collectively, the "Agreements"), the form and
substance of which shall be acceotable to SMHC's lender, SMEC, the
Agency I the City and their respective counsel. SMHC shall be
obligated to develop, construct, furnish and equip the Hotel in
accordance with plans established pursuant to the Agreements which
shall include approximately 190 on-site parking spaces. The Hot.el
shall be cor..structed in accordance wit.h all applicable zoning,
00': (0.751 .DOCS.IC.U.a1.l511'Q1OS_tl~tON.
1
EXHIBIT nAil
building, environmental, safety and other governmental laws, rules
and regulations.
2. Costs and Financinq of the Hotel
The preliminary estimated budget for the development of the
Hotel, and the financing sources, are as follows:
a _ COSTS
3.
4.
5.
6.
~.
Hard costs, such as excavation,
construction, building materials,
contractor fees, etc.
2.
Hotel furniture and equipment
Soft costs such as architectural and
design fees, consultants, legal
fees, hotel operator technical ser-
vices and pre-opening costs and
services, developer fees, site manage-
ment fees, pre-opening insurance,
and initial working capital
Financing costs such as construction
interest, commitment fees, other
bank costs and fees, legal fees,
etc.
Subtotal:
Operating deficit guarantee .
Mortgage debt service guarantee
Total:
DO', [IH 'sa. 00C3 . KIAl.S OUS 111DOS_DIS"l:lUBtl'ncer.
2
$ 66,400,000
1.9,500,000
J.7,600,000
6,500,000
$TIO, 000,000
10,000,000
15,000,000
$135 r 000 , 000
b. SOURCES
~.
2.
3.
$ 66,000,000
First mortgage
Initial equity provided by SMHC,
which will be funded prior to first
mortgage funding
15,000,000
Agency's share of project costs
(exclusive of land valued at
$24,000,000 and other Agency and/or
City Actions described below) ,
which will be funded as described
below
29,000.000
WO.OOO.OOO
subtotal:
4_
Operating deficit guarantee provided
by SMHC'S parent, Loews corporation,
for the benefit of and as required
by first mortgage ~ender
10,000,000
s.
Mortgage debt service guarantee
provided by SMHC's parent, Loews
corporation, for the benefit of and
as required by first mortgage
lender
S135. 000 ,000
J.5,000.000
Total:
c- FUNDING OF AGENCY'S S~
At the time of, or prior to, the execution of the
Agreements, the Agency will have taken all action required by
law to authorize, and will have sold and issued, in the manner
to be set forth in the Agreements, $29,000,000 of bonds or
will have incurred other debt resulting in net available funds
of $29,000,000 (whiCh bonds or debt may be restricted to uses
permitted by law, noW or at the time of such funding), less
the net atIlount of U. S. Department of Housing and Urban
Development Section 106 loan proceeds available for
development of the Hotel (which funds the Agency shall use its
good faith efforts to obtain, and which funds shall not be
restricted to the construction of the public areas of the
Hotel) .
The Agreements will provide that such funds shall be
disbursed to SMHC's construction lender on or abouc the
commencement of construction, together with SMHC' 6 Funded
Equity (as hereinafter definedl. and shall be applied in
accordance with applicable lawS. The application of funds in
accordance with applicable laws shall be supported by
j
DO': (04751.COC::S .l1LU.O:USIMJiK)S_t)I~CIC.
appropriate cocumentatio:::. The public areas of the Hotel
shall be owned and operated in accordance with all applicable
laws.
3. AqencV and/or City Actions
At the time of, or prior to, the execution of the Agreements,
the Agency a~d/or City, as applicable, will have taken all action
required by law to authorize, and will have sold and issued, in the
manner to be set forth in the Agreements, bonds in a suffic~ent
amount, or. will have incur::-ed other debt in a sufficient amounc, co
ensure that che following actions will be substantially completed
prior to the opening date of the Hotel as defined in the Hotel
Management Agreement (as hereinafter defined) (the "Hotel Opening
Date"). The Agreements will include a timetable commitment for cae
completion of these actions as well as a requirement that they be
implemented 'in coordination with SMHC.
(a) Municioal Garaae: As provided in Section 4 of this
letter.
(b) Site Improvements and Broadwalk: The Agency and/or
city shall provide up to $3,000,000 which shall be applied
solely to the cost of legally permissible exte:::-ior
improvements to the public areas and public access areas
relating to the gotel and .to that portion of the construction
of an Agency and/or City owned and maintained exterrsion of the
exiscing boardwalk or broadwalk (subject to applicable
environmental laws) on or immediately east of Site I-A.
The Agency and/or City shall also be responsible
maintenance of the beachfront adjacent to the Hotel
construction and maintenance of the boardwalk or broadwalk
2~st Street to the northern boundary of Lummus Park.
In addition, the AgenCY and/or city shall use good faith.
efforts to cause the implemencation and completion of the
previously planned S~ace of Florida streetscape improvements on
Collins Avenue . (AJ.A) from Lincoln Road to ~Sth Street and
connecting to Ocean Drive, so that these improvements are completed
prior to the Hotel Open.iDg Date. SMHC will work with the Agency
and/or City in this regard.
for
and
from
The Agency and/or City shall perform the foregoing actions in
accordance with the standards set forth in the Agreements.
4. Municipal Garaae
(a) Aaencv or City to Build Garaqe: The Agency or City
shall be responsible for the construction and maincenance (for
so long as the land subj ect to the Ground Lease and the
improvements thereon are operaced as a hotel or the pa:::-king
4
PO':(O.7S..DOCS.~'O~~SlHEMOS_O~~.
spaces a=e required for c.he use of such land a...."'ld the
irnprovemeat:.s c.hereon by Si"!HC under applicable law} of an
approximately aOO-car municipal garage ("Garage") on a City-
owned site within an area bounded by Washingcon and Colli~s
Avenues between 15th and 17ch Streets, including extension of
16th Street:. leading to che Hotel main entrance across Collins
Avenue. The Agency and/or City shall perform the foregoi~g
accions in accordance wit.h the s::andards set. fo=th in t.~e
Agreements. SMHC shall act as developer of the Garage for a
fee of 3~ of the project cost, plus out-of-pocket ~xpenses,
pursuanc to a development. agreemenc. mutually satisfactory to
the parc.ies. In addition, a."'lY retail or accessory uses
included in the Garage structure will be compatible with a."'ld
enhance the Hotel and its vicinity in accordance wic.h the
standards set forth in the Agreements. The Garage will be
completed and ready for use noC. later than the anticipated
Hotel Opening Date. The Agency and/or City shall not, for so
long as the Hotel is operated as a hotel, increase the height
of the Garage so as to adversely affect the useful enjoyment
of the hotel swimming pool.
(b) Garaae OPerator: The Agency or City shall designate
the operator of the Garage, which designee shall be selected
from a list of nationally recognized garage operators mutually
satisfactory to the AgenCY and/or City and SMEC, and which
operator shall be subject to the awproval of SMHC.
(c) Hotel Use: Approximately 560 parking spaces shall
be available for priority use (as defined below) by the Hotel
(including provisions for Hotel valet parking arrangements) .
Hotel user parking rates shall be established by the-garage
operator, subject to the Agency'S or City'S approval,
provided, however charges to SMHC for valet parking sl'-..all not
exceed 50% of t:he self-park rate and charges for Hotel
employee parking shall not exceed the lower of (i) monthly
parking rate, (ii) 50% of self-parking rat:e or (iii) contract:
parking rate. SMHC shall utilize the available parking spaces
at the Garage prior to utilizing other off-site parking
facilities.
"Priority use" shall mean the garage operator shall set
aside solely for Bot:el use such number of the allocated
parking spaces as Hotel ODerator shall reauest from time to
time upon not less chan 24 hours prior no~ice to the garage
operator.
(d) Hotel Garacre Rent: SMRC shall pay annual rent,
payable monthly, e~al co $500,000 for the use of the 560
priority Hotel. parking sPaces, subject to paragraph (el, belo>l
(the "Garage Rent") .
5
DO':(047S..00cs.~.041S1~_or~~.
(e) Facility Usaae Payment: In consideration of S~~C's
agreement to utilize the Garage on a requirements basis, as
provided above, SMHC shall be paid monthly a percentage of t!':e
annual gross revenues of the garage as follows (the "Facility
Usage paymeneft), the first $500,000 of which shall be applied
as a credit against ehe Garage Rene each year:
{i} 41.7~ of annual gross revenues with res?ec~ to
ehe first $1,200,000 of gross revenues; and
(ii) 28% of annual gross revenues in excess of
$1,200,000.
(f) Limitation on Losses: In the event cumulative
Garage Rent payments less the cumulative Facility Usage
Payments made by SMHC exceed $1,000,000, the Facility Usage
payr.tent will be the greater of $500,000 and the amount
calculated in accordance with subparagraph (e) above.
(g) Street Extension: The City shall extend 16th Street
from Washington Avenue to Collins Avenue.
(h) Enforceabilitv: Appropriate provision will be made,
by easement or other covenant, to ensure the enforceability of
the Hotel's rights to the Garage. The Agency will ensure that
the development of so-called Phase B, the area on the north
side of 16th Street, will be compatible with and enhance the
Hotel and its vicinity.
s. Ground Lease
The land comprising Site I-A, on which the Hotel will be
constructed, will be leased to SMHC by the Agency pursuant to a
ground lease (the uGround Lease-) having the following provisions:
(a) Title: The execucion of the Agreements by SMHC will
be conditioned upon fee title to the land being satisfactory
to SMHC. Afcer execution of the AgreeJI1ents, the Agency will
not further encumber such title to the land exceot with
respect to those 'matters (such as utility easements ind non-
monetary reciprocal easement agreements) reasonably approved
by SMHC and which do not adversely affect the operation or
development of the Hotel as called for herein. Title to the
existing improvements on the land will be conveyed to SMHC on
an ftas is. basis at the time of execution of the Ground Lease.
(b) Term: 99 years
$500,000 per year commencing on the
Base R~~t shall be increased every 10
opening Date in the same proportion as
in the then appraised fair market value
(c) Base Rent:
Hotel Opening Date.
years from the Hotel
the increase, if any,
6 \
DO', [O.7sa.DOCS.~aOllS1~_D~0K.
of the land (on a vacant and unimproved basis) bears co a base
value of $24,000,000, subject to a cap for each escalation
equal to the applicable change in the GDP implicit price
deflat.or index. In. no event shall Base Rent during an
escalation period be less t.han the Base Rent. during the prior
period.
(d) Additional Rent: Net Cash Flow after Debt Service
(as hereinafter defined) shall be distributed annually
pursuant to the following Tiers:
Tier~. ~oo~ to SMEC until funded operating shortfall
reserve (up to ~~O million) plus interest at
~5% per annum as calculated from the later to
occur of the date such amounts are funded and
the Hotel Opening Date (cumulative and
compounded) is repaid.
Tier 2. ~OO% to SMHC until SMHC receives a ~5% 'per
annum cumulative (not compounded) preferred
return on the $15 million initial equity as
calculated from the later to occur of the date
such amounts are funded and the Hotel Opening
Dace (the "Funded Equity.) .
Tier 3. ~OO% to SMHC as interest at ~5% per annum
cumulative (not compounded) on funds provided
by SMHC to meeC developm.ent cost overruns,
subject to a cap of $1~,000,OOO, and up co $5
million of additional operating shortfalls, as
calculated from the later to occur of the date
such amounts are funded and the Eotel Opening
Date.
Tier 4. 80% to SMHC and 20\' to the Agency until SMHC
has (i) received 25% Internal Rate of Return
(as such tertn is defined in the Agreements,
hereinafter referred to as .IR.~") (cumulative
and cotnpounded return on and return of), on
its Funded Equity ($l5,OOO,000) as calculated
from the later to occur of the dace such
amounts are funded and the Hotel Opening Date,
noe including the shortfall reserve, actually
funded and (ii) been repaid cost overruns and
operating shortfalls referred to ~ Tier 3.
Tier 5.
20~ to SMHC and 80~ to the Agency until
Agency has received (as caJ.culated from
Hotel opening Date and including Base Rent
Additional Rent actually paid) an 8%
(cumulative and compounded return on
the
the
and
IRR
and
7
DO" [004 7 S. . OOCS . MDJ. aausl K1l2'OS _DIS':-2JlIO'nOlll.
return of) itS land at a fixed value of
$24,000,000.
Tier 6.
85% to SMHC, 15~ co the Agency.
(e) Non-Subordination: The Ground Lease will not be
subordinated to the first: mortgage or to any other financing
agreements.
(f) Real Estate Taxes: The Hotel, including the land,
will be subject to ad valorem real estate caxes levied by the
City and other governmental authorities in accordance with
law. SMHC will be entitled to the benefit of any tax
abatements and reductions as are, or may become available
under applicable law, as if it were the fee owner of the la:ld.
(g) Environmental Indemnity: The Agency will provide an
indemnity to SMHC with resoect to the remediation, as
described in the Agreements, of environmental matters
affecting the land and the improvements thereon which exist
prior to the execution of the Ground Lease, except as to those
matters disclosed to SMHC in the environmental audits provided
to or obtained by SMHC prior to the execution of the
Agreements.
SMHC will provide an indemnity to. the Agency with respect
to the remediation, as described l.n the Agreements, of
environmental matters affecting the land and the improvements
thereon arising from and after the execution of the Ground
Lease and/or relating to the mitigation of the environmental
matters disclosed to SMHC in the environmental audits provided
to or obtained by SMnC prior to the execution of the
Agreements.
No limitations of liability will apply with respect to
the foregoing indemnities.
(h) Financinq: Any financing secured by the. Ground
Lease or Hotel, and any refinancings thereof, will be provided
by institutional financing sources or, subj ect to the "Deemed
Debt.- provisions herein, an affiliate of SMHC. Without
obtaining the Agency'S consent, the principal amount of the
initial financing or any refinancing of the Hotel shall not
exceed Deemed Debt, as hereinafter defined~ The Agency will
not be call~d upon co subordinate it:s interest under the
Ground Lease in connection with any financing or refinancing.
Loews Corporation (or an entit:.y acceptable to the first
mortgage lender (s) and the Agency) shall furnish a completion
guaranty for the benefit of the construction lender and the
Agency.
8
DO"(~7S'.OOCS.~'OllSl~_D~CN.
(i) Pu~chase Ootior.; while the Agency's Tax Inc~emenc
Revenue Bonds, Series 1993 (tr.e "Bonds") nave not been
retired, SMHC will have an option to purchase the land at a
price equal to the greater of (1) the then appraised fair
market value of the Agency's interest in the land based upon
an arm's length sale to a third parry buyer not affiliated
with SMHC taking into account the tr.en current state of title
as well as the continued existence of the Ground Lease and tr.e
Hotel Management Agreement as then in effect, or (2) t"e
amount dete~ned as follows:
a. ror all fiscal years uncil Additional Rent payments
have reached Tier 5: an amount to return co the
Agency an 8% IRR (which calculation will include
Base Rent and Additional Rent payments made to th.e
Agency) on the land value fixed a~ $24,000,000.
b. For fiscal years in wh~ch Additional Rent is be~g
paid at Tier 5, but not Tier G: an amount equal to
the greater of (i) an amount to return to the
Agency an 8% IRR (which calculation will include
Base Rent and Additional Rent payments made to the
AgenCY) on the land value fixed at $24,000,000 or
(ii) a ten times multiple of the average Base Rent
and Additional Rent paid to the AgenCY during the
prior three full fiscal years.
c. For fiscal years in which Additional Rent is being
paid at Tier 6, an amount equal to a ten times
multiple of the lesser of (i) average Base Rent and
Addi tional Rent paid to the Agency during the prior
three fiscal years, or (iil average BaSe Rent and
Tier G Additional Rent which would have been
payable to the AgenCY during the prior three full
fiscal years determined as if payments were due in
Tier G for each of such three fiscal years.
Provided, however, that (xl the purchaSe price. with
respect to the exercise of the purchase option after December
1, 200" shall be computed pursUant to (i) (2) above (without
regard to (i) (1) above) if at least 122 days prior to the
exercise of such option, SMHC shall have given the AgenCY
notice of intent to exercise its purchase option and
unconditionallY prepaid rent under the Ground Lease in an
amount sufficient to redeem the Bonds in accordance with their
terms prior to the exercise of such purc~~se option, which
amount shall upon exercise of such purchase option be credited
against the purcnase price thereof, and (y) the purchase price
with respect to the exercise of the purchase option at any
time after the holders of che Bonds have been pa~d in full all
principal of and interest thereon and the Bonds have be"'''-
retired (other than as a result of (xl above) shall be
9
00" (04.7SI.DCCS_KLUIOll..S111D'QS-O~oeI.
.- --- - ~_...--
computed pursuant to (i) (2) above (without regard to (i) (11
above) an~ the requirements of (x) above 6hall not apply to
the exerc~se of such purchase option.
The parties acknowledge that clause (1) of chis paragraph
(i) has been included based upon the present interpretation of
Sect.ion 144(c) (2) of the Internal Revenue Code (the "Code") in
relation to the Bonds by counsel to the Agency. The pa=ties
agree chaC such clause (1) shall not apply if at any time SMHC
provides an opinion of cax counsel knowledgeable with respect
to the tax aspects of cax-exempt bonds, in form and substance
satisfactory to the Agency and its counsel, co the effect that
the exercise of the purchase option at the price determined
pursuant to clause (2) will not adversely affect the exclusion
from grosS income for federal income tax purposes of interest
on the Bonds.
In the event, within 12 months following the exercise by
SMRC of the purchase opcion (tbe date of exercise being called
ehe "Exercise Date"), SMYC shall consummate the sale of the
Hotel to an unaffiliated third party (a "Post-Option Sale")
wi th whom SM!:IC had reached an agreement: in principle,
evidenced in writing, at any time during the 6-month period
prior to the EJcercise Date. the post-Option saJ.e shal-l be
deemed to have taken place on the Exercise Date and the Net
proceeds shall be distributed as Net: proceeds. in accordance
with paragraph 7, subject to a credit in favor of SMHC in an
amount equal to the option purchase price theretofore paid to
the Agency.
(j) Lease and Transfer of Hote Public as. In
consideration of (1) the varioUS taxes generated, and. to be
generated, by the ownership and operation of the Hotel,. (2)
the support of the Convention center by the Hotel pursuant to.
the agreement described in paragraph (1) below and (3) $MHC
providing the Funded Equity ($15,000,000), the AgenCY shall
(p.,) lease to SMHC for a term coterminouS with the Ground Lease
aJ.l of the public areas of the Hotel owned by the AgenCY and
(8) upon consummation of the purchase option described in
subparagraph (il above, t~sfer all of its right, title and
interest in the !lotel, including the public areas thereof, to
SMHC.
(k) Riqht of First Refusal. In the event the Agency
shall desire to accept an offer for sale of al.l. of its
interest in the land and the Hocel, including the public areas
of the Hotel, SMHC shall have a right to purchase such
interest upon the same terms and conditions as the same are
offered and in accordance with the Agreements. The Agency
shall not sell less than its entire interest in the land and
the Hqtel.
10
DO" (O"4.'7S'.1XlCS.MU180:u.s]~_D~rOL'l.
(1) Cor.vention Cente~: SMHC will enter into an
agreement with the City oursuant to which the improvements
will be operated as a hotel and rooms will be made available
to support Convention Center eventS according to.a forr.~la to
be negotiated. The formula will cove~ the number of rooms
committed, rate structure, and timing of release of rooms f=om
the C~ty's rights pursuant to such agreement. This ag=eemenc
will also provide for joint marketing arrangements between t.he
Hotel and the City and for the designation of the Hotel as a
primary supplier of hotel services to support the Convention
Center. The term of the agreement shall expire upon the
earlier to occur of (1) termination of the Redevelopm~~t Plan
(without regard to any extensions thereof) or (2) the City's
failure to maintain the Convention Cente~ at its present
location in at least its present size.
em) The Agreements will include customary provisions and
such other provisions mutually satisfactory to the parties.
6. Definition of Net Cash Flow after Debt Service
"Net Cash Flow after Debt Service" will be defined as DRotel
Operating Profit. after deduction of Debt Service.
"Hotel Operating Profit. will be defined as -total revenue from
operation of the Hotel from. and after t:he Hotel Opening Date
("Botel Revenue-) less all costs and expenses incurred in owning,
maintaining, conducting and operating the Hotel, other than Debt
Service, depreciation and amortization. These costs would include,
without limitation, all operating costs, such as wages and
benefits, the cost of goods, supplies, utilities and services,
repairs and maintenance, the Base Rent, all j{ote~ Operator fees and
payments, capita]. additions and improvements (other than those
funded through the reserve for additions to furnishings and
equipment, and except that no deduction shal~ be permitted for
capital additions and improvements which under the Agreements
require the consent of. the Agency, unless such consent has been
obta:Lned or is deemed to have been obtained), all iIlS1.)IaD.ce
premiums, paymentS under equipment ~eases, rea~ estate taxes and
assessments, and all payments into the reserve for additions,
substitutions and replacements to furnishings and equipment.
"Oebt Servicec will be defined as all payments in respect of
principal and interest: on "Deemed Debt."
.Oeemed Debt. will be defined as the principal amount of
$66,000,000 for so long as SMEC is the owner of the Eote~ and after
a sa~e of the Hotel by SMRC, the principa~ amount equal to the
greater of $66,000,000 or the actua~ principa~ amount not to exceed
75~ of the sale price (including assumed debt). To the extent
amounts of oeemed oebt are not he~d by an institutiona~ fin~~cing
source, debt service shall be calculated assuming interest payments
~~
co,; (1)475' .lX)C$. KV-1' 01.151 H2HOS _DIS'TlUJIO'nOd.
at the Citibank, N .A. prime rate and principal payments in
accordance with a 20 year amoctization schedule.
7. Apolication of Ne"t Proceeds from Sale of the Hotel
In the event of a sale oc refinancing, Net Proceeds would be
determined as if such Net Proceeds were Net Cash Flow in the year
of the sale or refinancing and will be distri~uted to SMHC or.i~s
successor and the Agency in accordance with the various Tiers, as
if such Net Proceeds were Additional Rent as provided in Pa=agraph
S(d). For purposes of calculating Net Proceeds, the gross proceeds
received from such sale will be deemed to include any amounts
received by an affiliated hotel operator for the transfer of ~y
interest of such hotel operator in the Hotel Management Agreement.
Subsequent to any sale or refinancing, Net Cash Flow would continue
to be distributed in the same manner as prior to the sale or
refinancing, but after taking into account the distribution of Net
Proceeds in payment of the various Tiers under Additional Rent to
SMHC or its successor and the Agency, as set forth above.
"Net Proceeds" will be defined as the proceeds from a sale
less debt repaid and all. reasonable and customary transaction
costs.
For purposes of this paragraph 7, a sale shall be deemed to
mean any transfer by operation of law or ot)lerwise by SMHC of a
greater than ~O% interest in the Hotel or the Ground Lease or any
transfer, by operation of law or otherwise, by SMHC's parent, of a
greater than ~O% equity. interest in SMHC, in either case to a
person who is not a controlled affiliate of the Loews Hotels chain.
Any transfer to a controlled affiliate of the Loews Hotels chain
will not constitute a sale. In addition, with respect to any
mortgage held by an institutional financing source, provision will
be made so that (i) the transfer to a purchaser at a foreclosure
sale, (ii) a deed in lieu of foreclosure or other transfer to a
mortgagee, or (iii) a sale by such mortgagee would not constitute
a sale.
8 . AgenCV APproval Riahts
The Agreements will provide the following approval rights for
the Agency:
(a) plans: The Agreements will include preliminary
plans and specifications resulting from the expenditure of
Design Costs described in paragraph 11 (the "Preliminary
Plans") for the construction of the Hotel, a pre-construction
budget and development budget which wil.l have been approved by
the Agency and SMHC jointly as part of the negotiation of the
Agreements. The budgets will include all of SHEe's (and its
affiliates') deV'elopment fees, reimbursables, payments to
affiliates and such other items reasonably requested by the
12
00', (0475. _OOC:S.~SOlU1MDtOS_D~ICJI'.
Agency. The Agreements will include a timetable for
submission and approval of final plans. SMHC will provide to
the AgencY a critical-path schedule prior to the start of
construct.ion.
The l'gency will have the right to approve material
changes, additions and alterations contained in the final
plans to the extent such final plans do not substantially
comply with the approved Preliminary Plans. The AgenCY may
not obj~ct to changes required to comply with applicable laws
in sO far as such objection relates to cost overruns. l'ny
objections by the Agency to material changes, additions and
alterations will be reasonable and specific, and, at the
l'gency's option, may include alternate choices which would not
re~ult in extra cost. If the AgenCY validly and appropriately
ob~ects to a change proposed by SMHC and such objection is
upheld following binding arbitration, if any, SMHC may. to the
extent permissible under applicable laWS, nevertheless
implement the change. but any resulting budget overrun would
not be reimbursable as Additional Rent or othentiSe, except as
provided for in the Agreements. If the Agency approves a
change but at a justified lower cost than proposed by SMHC.
only the cost approved by the AgenCY (or as established
fqllowing bind.U1g arbitration) will be included in SME:C's
allowed overrun (see "Addi.tional Rent"). Notwithstanding the
l'gency's approval of any planS or specifications and changes
thereto, SMHC will be r~ired to comply with all applicable
laWS with respect to the construction and operation of the
Rotel, includ.U1g, withOUt limitation, the obtaining of any
required consents and permitS required under applicable laws.
The Agenr:y's approval rights will not cover areas of
interior design and decor except to the extent reflected in
the approved preliminary Plans. The Agency' will have the
right to inspect the project during construction and to have
an on-site representative at its sole cost and expense. SMHC
will not commence construction on a portion of the Rotel until
any required approval. of applicable final. plans has been
obtained fz::o(U the Agency,
(b) Financial s!:atements, SMHC will deliver to the
Agency monthly unaudited and annual audited financial
statements. In addition, the Agency will be provided annually
with an information copy of a projected income statement
reflecting the budget for the upcoming yeu. All financial
statementS will be prepared in accordance with the Uniform
system of AccountS for Botels (8th Revised Edition) ("USAR") -
AJ.l financial statementS and boOks of account relating to
operation of the Botel and/or determination of rent will be
available .for audit and examination- The AgenCY will have the
right to challenge anY expenditure that is not proper1Y
calculated, which represents an overhead cost properlY
13
DO':[~7sa.:OCS.~'O~I~_DI~~.
chargeable to the management company's home office (includi~g
subsidia:-ies aDd affiliates of the management company) as
opposed to the Hotel, or any costs fraudulently incurred.
provision will be made to attempt to ensure confidential
treatment of all information relating to competitive or
propriet.ary information. In the event the Agency's audit
shows that the Agency's share of Additional Rent has been
understated by 3% or more, then S~~C will pay to the Agency
the cost of such audit in addition to any deficiency payment
required.
(e) Sale of the Hote~: A sale (as defined below) of the
Hocel or SMHC's interest in the Ground Lease shall be subjecc
t.o t.he Agency's approval. For purposes of t.his paragraph
8 (e), a saJ.e shall be deemed to mean any cransfer by operation
of law or otherwise by SMHC of a greater t.ban 50~ interest in
the Hotel or t.he Ground Lease or a.T'lY transfer, by operation of
law or otherwise, by $MEe's parent, of a greater than 50%
equity interest in SMHC, in either case to a person who is not.
a controlled affiliate of the L-oeWS Hotels chain. Any
transfer to a controlled affiliate of the LoewS Hotels chain
will noe constitute a sale. In addition, with respect to any
mortgage held by an institutional financing source, provision
will be made so that {i} the transfer to a purchaser at a
foreclosur~ sale, (ii) a deed in lieu of foreclosure or other
transfer to a mort:gagee, or (iii) a sale by such mortgagee
would not constitute a sale.
The Agency reserves the righe to disapprove the sale of
the Hotel to a foreign government or instrUme~tality thereof
or an entity controlled thereby-
Notwithstanding the foregoing, a sale of the Hotel to a
Qualified Purchaser (as hereinafter defined) shall be deemed
reasonable and not require the consent of the Agency.
A "Qualified Purchaser" for purposes of this section
shall mean a purchaser that: (i.) is (a) a permitt"ed Operator,
as hereinafter defined, or (b) a financial i.nstitution
(including, but not limited to, banks, life insurance
companies, or pension funds) or an institutional investor in
real property or interests in real. property (such as a REIT,
R.EMIC or other public or private investment fund), which has
engaged a Permitted Operator; {ii} is not a foreign gove:r:nment
or instrumentality tbereof or an entity controlled thereby;
and (iii) agrees to be bound by all the terms and conditions
of all the Agreements-
(d) New Manaqement Comp~ny' The AgenCY will have the
right to approve a neW hotel operator (including the sale or
transfer of more than a 50% interest in the current Hotel
Operator) . The AgenCY reserves the right to disapprove a
14:
DO" t ()4 7S. .DOCS. KUU 0 u.sll1Sl<'S _Dtsnu:wrtOJl' .
hotel operator controlled by a fo=eign government or
inscrumencality thereof.
Notwithstanding the foregoing, a change in the Hocel
Operator shall be deemed reasonable and not require consent of
the AgenCY if the. resulting hotel operator is a permitted
Operator. A 'permitted operator' for the purposes of this
section is an entity which (il is not a foreign government or
instrumentality thereof or an entity controlled thereby; and
(iil together with its affiliateS, (a) has been engaged in the
operation or management of hotelS for at least five years and
has operated 0:;- managed during such 5 -year period at:. least one
convention hotel (i.e., 600 or more rooms and 40,000 or more
square feet of meeting space) which meetS the quality
standards set forth in the Ground Lease, and (b) has a
national marJ<:eting operation under a national flag or has
-entered into an agreement with a hotel chain which has a
national marketing operation under a national flag.
(e) Biqht to Cure: The Agency will have the righc to
cure defaults by SMRC under any mortgage, the Hotel Management
Agreement and such other agreements as the parties may agree
upon, and all such agreemencs will so provide.
(f) }\.poroval Notice.:;.: (1.) Neither the Agency nor SMRC
shall unreasonably delay, witbbold or condition any requested
approval required under anY of the AgreementS or this Letter
of Intent. If a reques~ by SMHC relates to the approval of
certain ma~ters to be mutually agreed upon by the parties,
such as the sale of the Hotel or change in the Hotel Operator
as aforesaid, and the AgenCY fans to respond with.U1 the
provided time period, then after the expiration of such time
period SMRC may resubmit its request to the Agency, and
prov:i.ded such request (and the envelope in which such request
is transmitted) conspicuouslY bears the followi.og legend, the
matter stated in the .request shall be deemed approved: by the
J\.gency if the AgeD.CY shall fai.l to disapprove such second.
request within 3'0 days after receipt thereof:
'FAILURE TO RESPOND TO TllIS REQU"....sT WITHIN 3 0 DJ\.YS SIlALL
CONSTI'rOTE A1J'l'OMATIC APPROVAL 01.' T!lll MATTERS DESCRIBED HEREIN
WITH RESPEcT TO pJlRAGllAPIl OF nm (NAME OF AGREEMENT]
~
DATED ' BETWEEN [DESCRIBE ?~~TIES].
(2) It is contemplated that the Agreements will provide
for an expedited approval process during the period prior to
the Hote~ Opening Date.
(3) If the J\.genCY's or sMHC' s approval is required under
=y of the Agreements, upon disapproval of a request, ,:he
disapproving partY will provide written reasons support~ng
such party's disapproval of such matter to the other party.
~5
00': (04 7S' . oocs .M:t;Ulousll'1D'OS _ cISt1IDlTCtOl'l.
Each party shall deliver to the other party its approval 0=
disapproval of any request for approval pursuant to the
Agreements within the applicable time period. If a party does
not provide a response to a request for an approval wi thin the
time period set forth in the Agreements (whether such approval
request requires a single or double notice), such request
shall be deemed approved.
9. Hotel Manaaement Aqreemenj;,
Pursuant t.o a management agreement (the "Hotel Management
Agreement"), the Hotel will be operated by an affiliace of Leews
Hotels, Inc. ("lIotel Operator") as a first class, upscale
convention property in the LeeWS Hotels chain in accordance with
the following provisions:
(a) Manaoement: The Hotel will be managed by Hot.el
operator as part of the LeeWS Hotels chain in accordance with
the standards set forth in the Ground Lease. Hotel Operator
will have exclusive authority to operate t.he Eotel in the name
and for the account of SMHC.
(b) Technical services: Hotel ?perator will provide
technical services to assist SMlIC ,n the construction,
furnishing and equipping of the Hotel. These services will
include, among other things, (i) review and approval of
architecturaL plans, plans for design and decor and plans for
furnishing all of which will be subject to Hotel Operator's
approval to ensure that the Hotel will meet the standards set
forth in the Ground Lease; (ii) develop criteria for furniture
and equipment and assistance in obtaining sources of supply;
and (iii) assistance in coordinating purchases and
installation of furnishings and equipment - lIotel Operator
will be paid a one-time fee of $300,000 by SMlIC for providing
technical services, plus reimbursement of actual costs (which
will not include executive time) in providing technical
services during the pre-opening period. These costS and fees
are included in the estimated budget referred to in Paragraph
8 of this letter.
(c) Pre-90enip<1 services: Hotel Operator will provide
required services to SMRC to prepare the lIotel for opening,
including among other things. (ll recruiting, training and
employing (in the ""me of SM!lC) Hotel staff; (ii) pre-opening
marketing and advertising; (iii) negotiating contracts for
stores, concessions, leases, supplies and similar items; (iv)
assistance in obtaining necessary licenses and permitS; and
(v) assistance in purchasing initiaL operating supplies.
lIotel Operator will be reimbursed by SMliC for the c.ost of
providing these pre-opening services, including execut,ve and
staff time. and out-of-pocket expenses. These costs and fees
~6
OO"(047S..DOCS.~80~1S1~_O~~.
are included in the estimated budgec, referred to in paragaph
a of this letter.
(d) Term: 30 years, with four renewal options of 15
years each and one final renewal option of 9 years. The Hotel
Operacor may not, without the consent of the Agency, exercise
a renewal option unless the Agency has received an 8%' per
annum cumulative (not compounded) return (i.e., Base Rent and
Additional Rent) on the land value fixed at $24,000,000;
provided, however, that the foregoing requirement will cease
to be applicable once the Agency bas received an 8% IRR
(including Base Rent and Additional Rent actually paid) on the
land value (fixed at $24,000,000) - Hotel Operator will have
the right to cure any shortfall with respect to the reauired
8% cumulacive return by direct payment to the Agency, with any
such direct payment being deemed Additional Rent.
(e) ~anaqemenc Fee:
,
~. Base Fee: 3% of Hotel Revenue (calculated in
accordance with USAH) .
2. Group Marketinq Fee: ~.25% of Hotel Revenue.
The Group Marketing Fee represents payment for chain wide
advertising and marketing services provided by the Loews
home office, including overhead expenses of regional
sales offices. These services will include a central
sales and marketing operation supported by regional sales
offices and nationwide corporate advertising, marketing
and promotion progralI1S. The Hotel Operator will provide
tbese services to the Hotel on the same basis as it
provides similar services to other hotels in its chain.
3. Reservation Fee~: The cost of centralized
reserVation services provided by the gotel Operator (or
through a third party service provider) shall be
allocated.. to t:.he Hotel on a pass-through basis with no
mark-up, but in no event shall ~he cost per booking
increase by more than the system-wide increase charged to
other hotels in the chain.
4 . Franchise Fee: Upon the execution of a neW'
management agreement with a new hotel operator , such
hotel franchisor's usual and customary franchise fee, not
to exceed 2% of rooms revenue.
In addition, Hotel Operator shall be reimbursed for out-
of-pocket expenditures reasonably and properly incurred in the
course of the management and operation of the gotel, as to be
set forth in more detail in tbe Hotel Management Agreement.
This would include, among ocher things, travel and
17
pO, I (o.ns:. .tlOCS.KI:UI0l1S1)C2;)40S_D~0JC'.
entertair.ment, teleohor:e al'1d och~r incidental expenses of
employees in performing services actually and specifically
incurred in connection with the Hocel. In no event will ouC-
of-pocket expenditures include regula= overhead expenses oE
Hotel Operacor's corporace facilities or compensacion of home
office employees.
Notwithstanding the provisions of subparagraphs (e) (1)
and (e) (2) above, in the event a management agreement shall be
entered into with a new hotel operator, the combined Base Fee
and Group Marketing Fee shall not exceed 4.25% of Hotel
Revenues.
(f) pualitv Standard: Hotel Operator will be required
to operate che Hotel as a first class, upscale convention
center hotel, including high-quality banquet, conv~~tion and
meeting services and facilities, multiple-food and beve=age
outlets, room service, bell service, laundry and valet
services, a health and fitness facility, and such other
services as are generallY provided by comparable upscale
convention center hotels of national repute, consistent with
the Hotel's physical facilities, and in any event, the quality
of the Hotel operations and facilities (consistent with the
Hot.el's physical facilities as they then exist) will be
comparable to not less than 3 or more t.han 5 convention center
hotels (or such other comparable. hotels which the parties
shall mutually select pursuant to the Agreements) to be agre~d
on by the parties. The comparable convention center hotels
will be reestablished by agreement between the parties every
~o years. The failure to operate the Botel as required above
will constitute an event of default under the Ground Lease
and, if not cured, the Agency will be encit~ed to enforce this
provision with appropriate remedies , i.!lc~uding termination
and/or =e rights. Notwit:hst:anding t:he foregoing, Hot:e~
Operator will not be required to fund monies other than those
required to be in t:he FF&B Reserve for the replacement of
fuxniture and equipment necessary to meet the foregoing
standard. The foregoi.!lg shal,~ not be deemed to diminish
SMHC'S ob~igation to maintain the Hotel consistent with the
physica~ faci~ities of the Hote~ as constructed pursuant to
the Agreements.
(g) FF&E Reserve: Hotel Operator will be required to
establish a reserve for rep~acement and additiOns to furniture
and equipment initially funded at 1.% of Hote~ Revenue in the
first fiscal year, increasing to 2% in the second fiscal year,
3'" in the third fiscal year and .,. i.!l the fourth and each
fisca~ year thereafter. The FF&E Reserve will be he~d in a
segregated account and such funds shall onl.y be used for
replacements and additions as aforesaid.
~8
OO"(G47S..DOCS.~.OLlS)~S_OI~~OK.
(h) Radius Restriction: without the prior consent 0:
the Agency. Hotel Operator- ",ill not operate a convention
property (i.e., 600 or more rooms and 40,000 or more souare
feet of meeting space; hereinafter. a .convention hotel'
(including any meeting space available to Hotel Operator
pursuant to any license or shared facilities agreements or
otherwise)) within the area ('Territory.) comprised of Dade
county north to and including the city of Ft. Lauderdale,
provided however. . that this provision ",ill in no event be more
restrictive (or shall no longer be applicable, as the case may
be) than any radius restriction (or lack of restriction)
regarding any other hotel co'" or hereafter located in the area
north of 5th Street and south of 44th Street receiving in
exceSS of $5.000,000 in value of Agency or City funds (or
funds controlled thereby. including taX benefits). The
Hotel's radius restriction ",ill terminate or exclude certain
properties as described belD'" , as applicable. upOn the
occurrence of.any of the following eventS:
(i) if the Hotel is acquired by a purchaser ~ho is
part of a hotel chain (i.e., t>lO or more hotels) or SMliC
purchases a hotel chain and in either event such chain
has one or more properties in the Te=itory. then such
properties shall be excluded from the radius restriction;
(ii) the purchase of the Agency'S interest in the
Hot-el, including t.he land, by SMEC; and"
(iii) the termination of the Redevelopment Plan
(without regard to any extension thereof) .
J.O. site I-B
The AgenCY will enter into an agreement: with SMHC with regard
to Site 1- B (L e., the lot presentlY owned by the Agency and the
second lot if subsequentlY acquired by the Agency) providing
development on each lot will conform to applicable zoning laws and
requestS for prOpOsals applicable to such development and such
other matters as the parties maY determine: if any, by mutually
acceptable agreement.
~~. :Qesian DeV'elooment. ExPense ReimbursemenJ;.
The parties acknowledge that SMHC ~ill. of necessity, incur
significant out-of-pOcket costs for professional architectural
design, engineering and other technical advice and services in
. connection ",ith the design. construction and permitting of the
Hotel ('Design costs") prior to the execUtion of the Agreements.
In consideration of the foregoing, and in order to i"sure the
timely consummation of the transactions contemplated herebY, SMHC
and the Agency have agreed that sue!:. costS will be subj ect to
reimbursement as followS:
~9
DO':1~7SI_COCS.~I0L1S1MEHOs_ot~t~.
(a) if the Agency or the city, as applicable, baS not,
prior to December 15, 1995. entered into binding agreements to
raise the funds necessary to meet its obligations as
contemplated by Paragraph 2 (b) (3) and paragraphs 3 (a) and (b).
then the Agency shall, no ~ater than December 31/ 1995, pay to
SMliC the Qualified Design Costs (as hereinafter defined);
(b) if SMHC has not by December 15, 1995 entered into
binding financial commitments to obtain the first mortgage
financing as contemplated by Paragraph 2 (b) (1). sMliC shall
bear all Design Costs incurred by iti and
(c) if the Agreements are not in final form acceptable
to the parties for execution by December 15, 1995, for any
reason whatsoever, including the mutual failure of SMHC and
the Agency' (or the City, as the case may be) to obtain
financing commitmencs pursuant to (a) and (b) above / SMIlC
sb.al~ bear one half of the Qualified Design Costs and the
AgencY shall, nO later than December 31, J.995, reimburse SMHC
for one half of the Qualified Design Costs. .
The term 'Qualified Design costs' shall mean Design Costs in
an amount not to exceed $1,600,000; prov:i.ded, however, that if
betWeen July 15. 1995 and August 1, 1995 the AgenCY notifies SMHC
that it wishes SMRC to suspend funher design work, Qualified
Design Costs shall not exceed $~,OQO,OOO.
~2. General
(a) l\rbitration: AnY controversy or claim relating to a:ny
of the l\greements (or the breach thereof) will be settled by
arbitration in accordance with standardS and methodo~ogy to be
negotiated between the AgenCY and SMHC. The AgenCY and SMHC will
negotiate an expedited arbitration regime with respect to pre-Rote~
Opening matters, which regime may include the advance appointment
of a qualified arbitrator.
(b) Li?bilitX: The Agreements wi~l incorporate provisions
with respect to the limitation of SMRC'S, the Agency's and the
City's liabUity thereunder. as app~icable, mutuallY acceptable to
the parties, with the same providing for reasonable damages, but no
punitive damages.
(cl Definitive Aareements: Upon execution of this Letter of
Intent by SMliC and approva~ of the terms hereof by the appropriate
Agency and city bodies, the Agency' s counsel will draft the
Agreements (other than the Hote~ Management Agreement, agreementS
to which the AgenCY or city is not a party and other agreements. as
the pa-~ies may agree). The Agreements wi~~ contain. among other
things, representations, warranties, . conditions, covenants. and
indemnities and the like typica~ in simi~ar transactions, subJect
to the te:=s hereof. The consummation of the transactions
20
00': (047SI.OOC:S.KIUIOu.s! t15l'OS_t)I~oer.
. ,
contemplated hereby is conditioned upon the negotiation and
execution of the Agreements with terms, provisions and conditions
mutually acceptable to SMHC, the Agency and the City as well as the
obtaining of all necessary financing and the satisfaction of the
parties with all other agreements and matters necessary or
desirable with respect to the transactions contemplated hereby.
The parties shall comply with all applicable laws, statutes,
regulations and requirements and performance by the Agency, the
City and SMHC under t~is Letter of Intent and the Agreements shall
be subject thereto." .
(d) Structure of Lessee: The entity constituting lessee and
developer will be ME Redevelopment, Inc., HCV, Inc., VRA, Inc. SMR
Redevelopment, Inc. and/or THR Redevelopment, Inc. or partnerships
of which one or more of the foregoing will be general partners.
The Agency and SMHC will cooperate in structuring the transactions
contemplated hereby accordingly.
(e) Assignment by Agency: In the event the Agency ceases to
exist, the Agreements will provide that the rights granted to the
Agency will inure to the benefit of the City and the City will be
bound to perform the obligations therein.
(f) Termination: Subject to the terms of Paragraph 11, this
Letter of Intent may be terminated by either party if the
Agreements have not ~een completed by December 15, 1995.
(g) Non-binding: Subject to the terms of Paragraph 11,
neither party shall have any legally binding obligation to the
other until such time as the Agreements are executed by all parties
thereto.
(h) This Letter of Intent may be amended by a written
agreement executed by both of SMHC and the Agency.
AGREED AND ACKNOWLEDGED:
MIAMI BEACH
S/31c;.r
Date
s/~hs
Date
..
CONTINUED ON FOLLOWING PAGE]
21
:
Jo.2PROVED AS VIU(: _ _'
BY'V~~
- Laurence Feingo ,
General counsel
~ / JP/qo
Dat!-e .
'A:2l?ROVED:
c;tA/
Laurence Fe' gold,
city At.~orney
:.
By
tlO', to~ 7S' .tlOCS.)(CU.IOUSll'lD'05-g~CIIl.
5'13195
Date
)1 ~ (Cf~
Dat.e
~/J.r.j-/'lC
Dal:.e ' ,
22
FO~~OVED .
~~
~~ f0i)-
AMENDMENT
This is an Amendment (the "Amendment" ), dated as of December 6, 1995, to that certain
Letter ofIntent (the "LOlli), dated as of May 3,1995, a copy of which is attached hereto. Both the
Amendment and the LOI are by and between the Mami Beach Redevelopment Agency, a public body
corporate and politic (the "RDA"); the City ofMami Beach, Florida, a Florida municipal corporation
(the "City"); St. Moritz Hotel Corporation, a Florida corporation ("SMHC"); and Loews Hotels
Holding Corporation, a Delaware corporation ("LllliC").
RECITALS
WHEREAS, SMHC was the winning bidder in response to the Convention Center Hotel
Request for Proposals; and
WHEREAS, the RDA, the City, SMHC and ilfHC executed the LOr, pertaining to, among
other things, the development of an approximately 800 room hotel (the "Hotel") at and near 16th
Street east of Collins Avenue, Miami Beach and an approximately 800 car garage (the "Garage") to
be located at or near 16th Street between Collins and Washington Avenues, Miami Beach; and
WHEREAS, negotiations are proceeding on numerous agreements relating to the
development of the Hotel and Garage; and
WHEREAS, the LOI provides, among other things, that if the agreements for the
development of the Hotel and Garage and related matters are not executed by the RDA and SMHC
prior to December 15, 1995, the RDA or the City may be responsible to reimburse S:MHC for certain
design expenses for the development of the Hotel and the Garage; and
WHEREAS, due to, among other things, the work and time involved in connection with the
negotiation of numerous agreements, a bond issuance, bank financing and property acquisition, the
RDA, the City, SMHC and LHHC would like to amend the LOr to extend the time by which
agreements must be executed and liability for reim.bursement of design expenses might apply; and
WHEREAS, Paragraph 12(h) of the LOI provides that the LOr may be amended by a written
agreement executed by both of SMHC and the RDA.
NOW THEREFORE, in exchange for the mutual promises contained herein, and other good
and valuable consideration, the receipt and adequacy of which is hereby conclusively acknowledged,
the parties agree as follows:
1. ABOVE RECITALS.
The above recitals are true and correct and are incorporated as a part of this
Amendment.
EXHIBIT "B"
2. MODIFICATIONS.
a) Paragraph 11 of the LOI, entitled "Design Development Expense
Reimbursement", is amended as follows:
1) All references to "December 15, 1995" are changed to "January II,
1996. "
2) All references to "December 31, 1995" are changed to "January 31,
1996. "
b) Paragraph 12(f) of the LOI, entitled "Tennination" is amended as follows:
The reference to "December 15, 1995" is changed to "January 11, 1996."
3. OTHER PROVISIONS OF LOI.
The other provisions of the LOI are unchanged.
4. RATIFICATION OF LOI.
The RDA, the City, SMHC and LHHC ratify their agreement with the terms
of the LOr. as modified by this Amendment.
s. GOVERNING LAW.
TIlls Amendment shall be governed by and construed in accordance with the
laws of the State of Florida., without reference to principles of conflicts oflaw.
6. HEADINGS.
Headings in this Amendment are only for convenience, cu:e not a substantive
part of this Amendment or the LOI and do not affect the meaning of any provision of this Amendment
or the LOr.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their appropriate officials.
MITAMU BEACH REDEVELOPMENT AGENCY
By:
By:
2
~ Chairman
FORM APPROVED
REDEVELOPMENT AGENCY
B;1Y;i~
Date 11/31;:;
Date:
A TrEST:
By:
Date:
I>-he) ~s
, I
ATTEST:
't L
c n ~
By: ~ 3() l; -'
GeJy lj ,C~(:sor'
Print Name
Date:
I ZI) ~(
ATTEST:, .6
. \.., ~'
. .
'. ;
" ! .-----
By: )L~_c,
./~
G-c"ll-J \,-il.r"r'
rint Name
Date:
Il/7 kr
AIT:kw:c:wpwin60\aillm1hc1hhc.amd
CITY OF ML\MI BEACH
By:
Date:
er, Mayor FORM APPROVED
LEGAL 91PT.
By1!1#! ~
Date lY.so!?5
<
ST. MORITZ HOTEL CORPORATION
By:
~ H ()
~J-II'\ 111/1:1" . {IX-If ! 1 r (!) .
Print Name and Title
Date:
I L-h/r(/
LOEWS HOTELS HOLDING CORPORATION
By:
~
~J-/'1- I H+rJ tl i~( H I Pro
Print Name and Title '
Date: / c' h ); (
3
The Letter of Intent is an Exhibit to this Amendment but has
intentionally been omitted to avoid duplication, as it is
already attached to the Fourth Amendment.
SECOND AMENDMENT
This is a Second Amendment ( the "Second Amendment" ), dated as of January 10, 1996,
to that certain Letter of Intent (the "LOI"), dated as of May 3, 1995, a copy of which is attached
hereto as Exhibit "A" and incorporated herein, as amended by that certain Amendment to the LOI
(the "Amendment"), dated as of December 6, 1995, a copy of which is attached hereto as Exhibit"B"
and incorporated herein. The Second Amendment, the Amendment and the LOr are by and between
the Miami Beach Redevelopment Agency, a public body corporate and politic (the "RDA"); the City
of Miami Beach, Florida, a Florida municipal corporation (the "City"); St. Moritz Hotel Corporation,
a Florida corporation ("SMHC"); and Loews Hotels Holding Corporation, a Delaware corporation
("LHHC"). The LOI, as amended by the Amendment, is referred to herein as the "LOr, as
amended. "
RECITALS
\VHEREAS, SMHC was the winning bidder in response to the Convention Center Hotel
Request for Proposals; and
'WHEREAS, the RDA, the City, SlvIHC and LHHC executed the LOr, pertaining to, among
other things, the development of an approximately 800 room hotel (the "Hotel") at and near 16th
Street east of Collins Avenue, Miami Beach and an approximately 800 car garage (the "Garage") to
be located at or near 16th Street between Collins and Washington Avenues, Miami Beach; and
WHEREAS, negotiations are proceeding on numerous agreements relating to the
development of the Hotel and Garage; and
\VHEREAS, the LOr originally provided, among other things, that if the agreements for the
development of the Hotel and Garage and related matters were not executed by the RDA and SlvIHC
prior to December 15, 1995, the RDA or the City may be responsible to reimburse SlvIHC for certain
design expenses for the development of the Hotel and the Garage; and
\VHEREAS, the RDA, the City, SMHC and LHHC executed the Amendment, extending,
among other things, the date referenced in the preceding paragraph to January 11, 1996; and
\VHEREAS, due to, among other things, the work and time involved in connection with the
negotiation of numerous agreements, a bond issuance, bank financing and property acquisition, the
RDA, the City, SMHC and LHHC would like to amend the LOI, as amended, to extend further the
time by which agreements must be executed and liability for reimbursement of design expenses
might apply; and
WHEREAS, Paragraph 12(h) of the LOI, as amended, provides that the LOr, as amended,
may be modified by a written agreement executed by both of SMHC and the RDA.
NOW THEREFORE, in exchange for the mutual promises contained herein, and other
good and valuable consideration, the receipt and adequacy of which is hereby conclusively
acknowledged, the parties agree as follows:
EXHIBIT "e"
1. ABOVE RECITALS.
The above recitals are true and correct and are incorporated as a part of this
Second Amendment.
2. MODIFICATIONS.
a) Paragraph 11 of the LOr, as amended, entitled "Design Development Expense
Reimbursement", is modified as follows:
1) All references to "January 11, 1996" are changed to "January 25,
1996."
2) All references to "January 31, 1996" are changed to "February 9,
1996."
b) Paragraph 12(t) of the LOI, as amended, entitled "Termination" is modified
as follows:
The reference to "January 11, 1996" is changed to "January 25, 1996."
3. OTHER PROVISIONS.
The other provisions of the LOI, as amended, are unchanged.
4. RATIFICATION.
The RDA, the City, Sl\1HC and LHHC ratify their agreement with the terms
of the LOI, as amended, as modified by this Second Amendment.
5. GOVERNING LAW.
This Second Amendment shall be governed by and construed in accordance
with the laws of the State of Florida, without reference to principles of conflicts oflaw.
6. HEADINGS.
Headings in this Second Amendment are only for convenience, are not a
substantive part of this Second Amendment or the LOI, as amended, and do not affect the meaning
of any provision of this Second Amendment or the LOI, as amended.
2
IN \VITNESS \VHEREOF, the parties hereto have caused this Second Amendment to be
executed by their appropriate officials.
ORITZ HOTEL CORPORATION
ATTEST:
By: U~ By:
hcl.-btletft, -I'flfer-tffi- Secretary
Robert Parcher,
Date: f I 2-2-/ 90 Date:
ATTEST:
QoWA.~ PdA~
By:
By:
~l..~Q~J~j;n..City Clerk
Robert Parcher,
Date: ~ :t-t-Iq(,tl
:~TES)J~
Qnl Y\). GrS:Of\
:J Print Name
Date: (07 ( 1b
....
By:
9/iIA Jh 1~
/ (
-Stl\\] tt-T+tlN ~\ -\tsck, PreS.
.
Print Name and Title
Date: -1/0 ( 1b
LOE\VS HOTELS HOLDING CORPORATION
:~E~T~
Ga.~ ~. GrsoV\
rint Name
By:
Date: ~
Date:
J(1719h
AIT: kw:c:wpwi n60\ait\smhclhhc.2am
FORM APPROVED
By 5t{~~r--
Date
..,
,)
The Letter of Intent is an Exhibit to this Second Amendment
but has intentionally been omitted to avoid duplication, as it
is already attached to the Fourth Amendment.
THIRD AMENDMENT
This is a Third Amendment ( the "Third Amendment" ), dated as of January 24, 1996, to that
certain Letter ofIntent (the "LOI"), dated as of May 3, 1995, a copy of which is attached hereto as
Exhibit "A" and incorporated herein, as amended by that certain Amendment to the LOI (the
"Amendment"), dated as of December 6, 1995, a copy of which is attached hereto as Exhibit "B" and
incorporated herein, and as further amended by that certain Second Amendment to the LOI (the
"Second Amendment"), dated as of January 10, 1996, a copy of which is attached hereto as Exhibit
"C" and incorporated herein. The Third Amendment, the Second Amendment, the Amendment and
the LOI are by and between the Miami Beach Redevelopment Agency, a public body corporate and
politic (the "RDA"); the City of Miami Beach, Florida, a Florida municipal corporation (the "City");
St. Moritz Hotel Corporation, a Florida corporation ("SMHC"); and Loews Hotels Holding
Corporation, a Delaware corporation ("LHHC"). The LOI, as amended by the Second Amendment
and the Amendment, is referred to herein as the "LOI, as amended."
RECIT ALS
WHEREAS, SMHC was the winning bidder in response to the Convention Center Hotel
Request for Proposals; and
WHEREAS, the RDA, the City, SMHC and LHHC executed the LOI, pertaining to, among
other things, the development of an approximately 800 room hotel (the "Hotel") at and near 16th
Street east of Collins Avenue, Miami Beach and an approximately 800 car garage (the "Garage") to
be located at or near 16th Street between Collins and Washington A venues, Miami Beach; and
WHEREAS, negotiations are proceeding on numerous agreements relating to the
development of the Hotel and Garage; and
WHEREAS, the LOI originally provided, among other things, that if the agreements for the
development of the Hotel and Garage and related matters were not executed by the RDA and SMHC
prior to December 15, 1995, the RDA or the City may be responsible to reiJl1burse SMHC for certain
design expenses for the development of the Hotel and the Garage; and
WHEREAS, the RDA, the City, SMHC and LHHC executed the Amendment, extending,
among other things, the date referenced in the preceding paragraph to January 11, 1996; and
WHEREAS, the RDA, the City, SMHC and LHHC executed the Second Amendment,
extending, among other things, the date referenced in the preceding paragraph to January 25, 1996;
and
WHEREAS, due to, among other things, the work and time involved in connection with the
negotiation of numerous agreements, a bond issuance, bank financing and property acquisition, the
RDA, the City, SMHC and LHHC would like to amend the LOI, as amended, to extend further the
time by which agreements must be executed and liability for reimbursement of design expenses
might apply; and
EXHIBIT "D"
WHEREAS, Paragraph 12(h) of the LOI, as amended, provides that the LOI, as amended,
may be modified by a written agreement executed by both of SMHC and the RDA.
NOW THEREFORE, in exchange for the mutual promises contained herein, and other
good and valuable consideration, the receipt and adequacy of which is hereby conclusively
acknowledged, the parties agree as follows:
1. ABOVE RECITALS.
The above recitals are true and correct and are incorporated as a part of this
Third Amendment.
2. MODIFICATIONS.
a) Paragraph 11 of the LOr, as amended, entitled "Design Development Expense
Reimbursement", is modified as follows:
1) All references to "January 25, 1996" are changed to "February 8,
1996."
2) All references to "February 9, 1996" are changed to "February 22,
1996".
b) Paragraph 12(f) of the LOr, as amended, entitled "Termination" is modified
as follows:
The reference to "January 25, 1996" is changed to "February 8, 1996."
3. OTHER PROVISIONS.
The other provisions.ofthe LOr, as amended, are unchanged.
4. RATIFICATION.
The RDA, the City, SMHC and LHHC ratify their agreement with the terms
of the LOI, as amended, as modified by this Third Amendment.
5. GOVERNING LAW.
This Third Amendment shall be governed by and construed in accordance
with the laws of the State of Florida, without reference to principles of conflicts of law.
2
6. HEADINGS.
Headings in this Third Amendment are only for convenience, are not a
substantive part of this Third Amendment or the LOI, as amended, and do not affect the meaning
of any provision of this Third Amendment or the LOI, as amended.
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be
executed by their appropriate officials.
ATTEST:
By XLlAK\ r~~
Robert Parcher, Secretary
Date: ~
ATTEST:
By: ~O~~ f~
Robert Parcher, City Clerk
Date ~
ATTESA"~ . .'6~ .
' ,\ If i
'\ ~j . IL-
By: \ I '!-/ ~~
./ /~J
. I
I
Gary w. Garson
Print Name
Date: 1/25/96
ATTEST: '
j'~ c,
I~ :
By: . .... "1 (,J
/ n
,j
r
~~-
Gary w. Garson
Print Name
Date:
1/25/96
AIT:kw:c :wpwin60\ait\smhclhhc.3 am
D
ymour Gelber, ChairmRfiDEVELOPMENT AGENCY
GENERAL COUNSEL
ByA/i ~
VI 9/~1.
FORM APPROVED
DEPT.
By 1J}j(lI~
Date V/9,/JL
ST. MORITZ HOTEL CORPORATION
Date:
By:
~~ '
ck S. Adler
Print Name and Title
Date: 1/25/96
LOEWS HOTELS HOLDING CORPORATION
By:
~J. q
Print Name and Title
Date: 1/25/96
3
The Letter of Intent is an Exhibit to this Third Amendment
but has intentionally been omitted to avoid duplication, as it
is already attached to the Fourth Amendment.