449-2003 RDA Reso
.'
RESOLUTION NO. 449-2003
A RESOLUTION OF THE CHAIRMAN AND MEMBERS OF THE
MIAMI BEACH REDEVELOPMENT AGENCY (RDA), ACCEPTING
THE RECOMMENDATION OF THE EXECUTIVE DIRECTOR
PERTAINING TO THE RANKING OF PROPOSALS RECEIVED
PURSUANT TO REQUEST FOR PROPOSALS (RFP) NO. 05-02/03,
FOR THE LEASING AND MANAGEMENT OF THE RETAIL
COMPONENT OF THE ANCHOR SHOPS AND PARKING GARAGE;
AND FURTHER AUTHORIZING THE ADMINISTRATION TO ENTER
INTO NEGOTIATIONS WITH MIAMI BEACH DEVELOPMENT
CORPORATION (MBCDC) AND FELENSTEIN KONIVER STERN
REALTY GROUP (FKS), FOR THE OPERATION OF THE FACILITY,
AND IF NEGOTIATIONS ARE NOT SUCCESSFUL, TO ENTER INTO
NEGOTIATIONS WITH THE URBAN RETAIL PROPERTIES
COMPANY.
WHEREAS, on July 31, 2002, the Redevelopment Agency authorized the
Administration to issue a Request for Proposals (RFP) for the management and leasing of
the retail component of the Anchor Shops and Parking Garage (Anchor Shops); and
WHEREAS, the existing Agreement with Miami Beach Development Corporation
(MBCDC) and Felenstein Koniver Stern Realty Groups (FKS) to manage the Anchor Shops
was initially set to expire on December 31, 2001; and
WHEREAS, in accordance with the renewal option therein, the Agreement was
extended for one year, with an expiration date of December 31, 2002; and
WHEREAS, since the Agreement does not provide for a second renewal option,
MBCDC and FKS have been managing the facility on a month-to-month basis at the
discretion of the Executive Director, until such time that the RFP process results in a new
management agreement; and
WHEREAS, on December 20, 2003, two proposals were received in response to
the RFP; one submitted by MBCDC in partnership with FKS, and the other by Boston and
Chicago-based Urban Retail Properties Company; and
WHEREAS, on February 25, 2003, an Evaluation Committee, recommended by the
Executive Director, with input from the RDA Board, convened to review selection criteria
and to decide whether to hear presentations by the respective proposers; and
WHEREAS since Committee Members had questions regarding both proposals, the
Committee decided to schedule a subsequent meeting to conduct a question and answer
session with the two firms; and
WHEREAS,. the Evaluation Committee reconvened on March 18,2003, to conduct
the question and answer session; and
Whereas, the Committee determined that the ranking would be based on the firm
with the highest number of points; and
WHEREAS, upon conclusion of the questions and answers, the Committee
deliberated and assigned scores to the proposers, with the firm of MBCDC and FKS
receiving the highest score of 452 points, and Urban Retail Properties receiving 421
Points; and
WHEREAS, The Committee adopted a motion recommending to the Executive
Director that negotiations proceed with MBCDC and FKS as the top-ranked firm; and, if
negotiations fail to produce an Agreement, to enter into negotiations with the Urban Retail
properties.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE CHAIRMAN AND
MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY, that the Chairman and
Members hereby accept the recommendation of the Executive Director, pertaining to the
ranking of the proposals received pursuant to Request for Proposals (RFP) No. 05-02/03,
for the Leasing and Management of the Retail Component of the Anchor Shops and
Parking Garage, and authorize the Administration to enter into negotiations with Miami
Beach Development Corporation (MBCDC) and Felenstein Koniver Stern Realty Group
(FKS), for the operation of the facility; and if negotiations are not successful, to enter into
negotiations with Urban Retail Properties Company.
PASSED and ADOPTED this 9th day of
,2003.
ATTE:f p~
-Q(JRETARY
T:\AGENDA\2003\April 9\RDA\MBCDC _Raso.doc
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
Al/ IM/)A//J-> L/~ j- r;J 3
~~o.
MAMI BEACH REDEVELOPMENT AGENCY
JlGENDA ITEM SUMMARY
m
Condensed Title:
Acceptance of the Executive Director's recommendation relative to the ranking of firms pursuant to RFP No. 05-
02/03 for the Leasing and Management of the Retail Component of the Anchor Shops and Parking Garage.
Issue:
Whether to approve the Executive Director's recommendation relative to the rankings of firms.
Item Summarv/Recommendation:
On July 31, 2002, the Redevelopment Agency authorized the Administration to issue a Request for
Proposals (RFP) for the management and leasing of the retail component of the Anchor Shops and
Parking Garage (Anchor Shops). The RFP was issued on Friday, November 22, 2002. On December 20,
2002, two proposals were received in response to the RFP; one submitted by MBCDC in partnership with
FKS, and the other by Boston and Chicago-based Urban Retail Properties Company.
On March 18, 2003, an Evaluation Committee engaged the two firms in a question and answer session,
upon which the Committee deliberated and assigned scores to the firms. MBCDC and FKS received the
highest score with 454 points. Urban Retail Properties received 421 Points.
It should be noted, that Committee members were unanimous in awarding the highest score to the team of
MBCDC and FKS. The Committee further adopted a motion recommending to the Executive Director that
negotiations proceed with MBCDC and FKS as the top-ranked firm; and, if negotiations fail to produce an
Agreement, to enter into negotiations with the Urban Retail properties, under the condition that the
Company establishes a local presence and provides for daily on-site maintenance.
Advisory Board Recommendation:
IN/A
Financial Information:
Source of Amount Account Approved
Funds: 1
C 2
3
4
Finance Dept. Total
City Clerk's Office Legislative Tracking:
I Gus Lopez
Si n-Otfs:
Department Director Assistant City Manager
City Manager
GL
JG
CMC
T:\AGENDA \2003\april 9\rdalmbcdc_summary.doc
AGENDA ITEM
DATE
313
r-y-03
~
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
www.ci.miami.beach.fl.us
To:
From:
Subject:
REDEVELOPMENT AGENCY MEMORANDUM
Mayor David Dermer and Date: April 9, 2003
Members of the City Commission
Jorge M. Gonzalez ~ A ~
City Manager U fl./V- 0
A RESOLUTION OF THE CHAIRMAN AND MEMBERS OF THE MIAMI
BEACH REDEVELOPMENT AGENCY, ACCEPTING THE
RECOMMENDATION OF THE EXECUTIVE DIRECTOR PERTAINING
TO THE RANKING OF PROPOSALS RECEIVED PURSUANT TO
REQUEST FOR PROPOSALS (RFP) NO. 05-02/03, FOR THE LEASING
AND MANAGEMENT OF THE RETAIL COMPONENT OF THE ANCHOR
SHOPS AND PARKING GARAGE; AND FURTHER AUTHORIZING THE
ADMINISTRATION TO ENTER INTO NEGOTIATIONS WITH MIAMI
BEACH DEVELOPMENT CORPORATION (MBCDC) AND FELENSTEIN
KONIVER STERN REALTY GROUP (FKS), FOR THE OPERATION OF
THE FACILITY, AND IF NEGOTIATIONS ARE NOT SUCCESSFUL, TO
ENTER INTO NEGOTIATIONS WITH THE URBAN RETAIL
PROPERTIES COMPANY.
ADMINISTRATIVE RECOMMENDATION
Adopt the Resolution.
ANALYSIS
On July 31, 2002, the Redevelopment Agency authorized the Administration to issue a
Request for Proposals (RFP) for the management and leasing of the retail component of
the Anchor Shops and Parking Garage (Anchor Shops). The RFP was issued on Friday,
November 22,2002.
The existing Contract to manage the Anchor Shops is with Miami Beach Community
Development Corporation (MBCDC) and Felenstein Koniver Stern Realty Group, (FKS).
The Agreement was initially set to expire on December 31, 2001, however, in accordance
with the renewal option therein, the Agreement was extended for one year, with an
expiration date of December 31,2002. Since the Agreement does not provide for a second
renewal option, on January 8, 2003 MBCDC and FKS continue to manage the facility on a
month-to-month basis at the discretion of the Executive Director, until such time that the
RFP process results in a new management agreement.
In an effort to secure a broad response to the RFP, notices were issued to numerous local
and national property management/leasing firms, identified through organizations including
but not limited to, the Miami Beach Chamber Commerce, the Building Owners and
Managers Association (BOMA) and the Regional Council of Shopping Centers. While the
pre-bid conference was well attended by such firms as Trammell Crow, Scott Robins
Redevelopment Agency Memo
Request For Proposals (RFP) NO. 58-02/03, For the Leasing and Management
Of the Retail Component of the Anchor Shops and Parking Garage
April 9, 2003
Page 2 of 5
Companies, Comras Companies/LNR Property Corp, MBCDC and FKS, only two proposals
were received in response to the RFP. One was submitted by MBCDC in partnership with
FKS, and the other by Boston and Chicago-based Urban Retail Properties Company. The
proposals were received on December 20, 2002. It should be noted that when the RDA
first issued an RFP for the management and leasing of the Anchor Shops, in March, 2000,
it also received a low response, with only one proposal being submitted. A subsequent
survey of firms which requested the RFP but did not submit proposals, indicated that the
real incentive in managing and leasing a retail facility is the potential to earn leasing
commissions. Since the Anchor Shops are 100% leased, there was little interest in
submitting a proposal. Furthermore, with only 21,000 square feet of retail space, there was
little flexibility in being able to charge a significant management fee to make submitting a
proposal worthwhile.
A matrix summarizing the proposals submitted by the respective firms has been included
as Attachment A to this memorandum.
On February 25, 2003, an Evaluation Committee, recommended by the Executive Director,
with input from the RDA Board, convened to review selection criteria and to decide whether
to hear presentations by the respective proposers. The Committee was comprised of Joe
Damien (Committee Chair), Tim Voda of Regatta Management, Robert Warren, Property
Manager with Continental Fidelity and retail owner of The Frieze, Jill Ecklund, a Financial
Advisor and City resident, and Kent Bonde of the RDA. The selection/scoring criteria as
presented in the RFP included the following areas:
. The respondent's financial capability, proposed operating budget
and management fee. 30 Points
. The respondent's proposed methodology and approach to address
scope of services, maintenance and operating standards set forth in
the RFP. 25 Points
. The proposer's demonstrated experience in leasing and managing
retail facilities, particularly those located in urban environments
comparable to Miami Beach. 20 Points
. The capability and relevant experience of key staff to be assigned to
the management of the Anchor Shops. 15 Points
. Quality and number of references. 10 Points
Since Committee Members had questions regarding both proposals, the Committee
decided to schedule a subsequent meeting to conduct a question and answer session
with the two firms. This meeting occurred on March 18, 2003. Prior to inviting the firms
into the meeting, the Committee decided that the firm receiving the highest number of
points would be the firm recommended to manage the Anchor Shops. Following the
question and answer session, the Evaluation Committee deliberated and offered the
following observations regarding the respective firms:
Redevelopment Agency Memo
Request For Proposals (RFP) NO. 58-02/03, For the Leasing and Management
Of the Retail Component of the Anchor Shops and Parking Garage
April 9, 2003
Page 3 of 5
MBCDC/FKS
The strengths of this team lie in the extensive local and national retail leasing
experience of FKS coupled with the commercial property management experience of
MBCDC. Most importantly, the team has local presence and understands the nature of
the community, which in turn provides for greater responsiveness to the needs of the
tenants as well as ensures that the retail space is maintained in good condition. As the
incumbent management firm at the Anchor Shops, MBCDC not only has a solid relation
with its tenants, but has also been instrumental in various initiatives aimed at promoting
the facility as well improving area's image. These efforts include, but are not limited to,
developing extensive ad and other media campaigns, hosting a series of promotional
events at the Anchor Shops and spearheading the creation of the Anchor Shops'
Merchants Association, as a means of mutually addressing business and community
concerns as well as to fund promotional activities for the Anchor Shops. Additionally,
with its offices located within four blocks of the Anchor Shops, MBCDC conducts daily
and often-times multiple daily site visits to address tenant issues, maintenance and
cleaning.
MBCDC is proposing an annual Management Fee of $39,000, reflecting a $1,500
increase over its current Fee. The Fee provides for three managemenUadministrative
positions and one maintenance position. The Fee also includes base
administrative/overhead, accounting and insurance costs. Under the present
Agreement, direct costs associated with the upkeep and maintenance of the Anchor
Shops are reimbursed to the Contractor. These costs include, but are not limited to,
operating supplies including cleaning materials, light bulbs and other consumable and
expendable items; minor (non-structural) repair and maintenance costs; and, other
costs and expenses, pre-approved by the RDA, necessary for the operation of the
Project. It should be noted that the present Agreement did not provide for MBCDC to
undertake promotional initiatives on behalf of the tenants. Yet, as indicated previously,
MBCDC has committed and continues to commit, a significant amount of time and
manpower to promote the facility, at no additional cost to the RDA, other than sharing in
certain costs associated in running ads and printing of promotional materials.
The RFP did not provide the opportunity for respondents to propose a leasing
commission, as the one in place is competitive by industry standards. Furthermore,
since the Anchor Shops are 100% leased, with the shortest remaining lease term,
exceeding the three-year term of a new management agreement, the RDA does not
anticipate having to pay leasing commissions at this time. However, to the extent that
any of the retail spaces become vacant during the term of the Management Agreement,
the RDA shall pay a leasing commission based on the following:
An amount equal to the aggregate of the following percentages of the minimum rent
paid by the tenant to the RDA during the following years of the term of the lease:
Six (6%) percent of the Minimum Rent for years one (1) through five (5) of the term of
the lease; and
Redevelopment Agency Memo
Request For Proposals (RFP) NO. 58-02/03, For the Leasing and Management
Of the Retail Component of the Anchor Shops and Parking Garage
April 9, 2003
Page 4 of 5
Four (4%) percent of the Minimum Rent for years six (6) through ten (10) of the term of
the lease; and
Three (3%) percent of the Minimum Rent for the remaining years of the term of the
lease.
The term "Minimum Rent" shall exclude additional rent or other charges of any type or
nature whatsoever paid or payable by the tenant under the Lease, including amounts
payable on account of increases in real estate taxes, operating expenses, any
escalations, utility payments or other charges for any services. No leasing commissions
shall be paid for renewals, relocations, expansions, assignments or transfers of lease.
Urban Retail Properties
The Company's greatest strength lies in its size and professional resources. It employs
over 900 people and manages in excess of 32 million square feet in twenty-three states.
Properties include regional malls, strip shopping centers, community centers and mixed-
use projects. Five of these properties are in Florida, two of which are strip shopping
centers located in south Miami-Dade County. While the Proposal contains good
references, the Committee expressed concern regarding the Urban Retail's proposed
management team, its lack of local presence and its limited understanding of the Project
and the local market. The Committee's biggest reservation was the fact that the entire
Management Team is based in Boca Raton, which is not necessarily conducive to daily
site visits of the property. While the Company's proposal committed to daily site visits,
its Property Manager, at the meeting, indicated that site visits would be conducted on an
as-needed basis, and if required by the RDA, performed on a daily basis. An on-site
porter/maintenance person to serve as the "eyes-and-ears" for the Property Manager,
would be an additional expense to the RDA. It was further indicated that the Company
does not have any plans in the near future to establish a local presence in Miami or
Miami Beach.
When asked to comment on the viability of the tenant mix, the Management Team
Representatives indicated that pending further research, they were not familiar enough
with the Project to provide comment. The representatives had not been able to review
the rent roll provided in the RFP and not having the tenants' sales figures, could not
offer an assessment.
Urban Retail is proposing a Management Fee of $24,000 plus a $3,000 retainer for
marketing. The Fee was questioned by the Committee as being extremely low. The
Representatives indicated that Paul Grant, the Company's Executive Vice President,
was the person who came up with the proposed fee and that any
clarification/explanation could be provided in writing. Upon further analysis of the
Company's proposed budget, certain expenses, including insurance, professional
services, general and administrative and contingency costs, which collectively account
for $13,877, would be included as pass through expenses to the RDA. As such, if an
apple-to-apple comparison were made with MBCDC's Proposal, Urban Retail's
Redevelopment Agency Memo
Request For Proposals (RFP) NO. 58-02/03, For the Leasing and Management
Of the Retail Component of the Anchor Shops and Parking Garage
April 9, 2003
Page 5 of 5
Management Fee would actually be $40,877, which exceeds MBCDC's Fee of $39,000
by $1,877.
Upon conclusion of the deliberations, the Committee assigned scores to the proposers.
MBCDC and FKS received the highest score with 454 points. Urban Retail Properties
received 421 Points. The scores assigned by each Committee Member are as follows:
Committee Miami Beach Development Urban Retail
Member Corp/Felenstein Koniver Properties
Stern
Jose Damien 90 80
Jill Ecklund 92 86
Tim Voda 87 86
Robert Warren 95 86
Kent Bonde 90 83
Total Score 454 421
It should be noted, that Committee members were unanimous in awarding the highest
score to the team of MBCDC and FKS. Based on the scoring, MBCDC and FKS were
ranked first and Urban Retail Properties was ranked second. The Committee further
adopted a motion recommending to the Executive Director that negotiations proceed
with MBCDC and FKS as the top-ranked firm; and, if negotiations fail to produce an
Agreement, to enter into negotiations with the Urban Retail properties, under the
condition that the Company establishes a local presence and provides for daily on-site
maintenance.
CONCLUSION AND RECOMMENDATION
Based on MBCDC and FKS' extensive knowledge of the local retail market, coupled
with its current track record and proposed management plan for the Anchor Shops, the
Administration concurs with the recommendation of the Evaluation Committee. As such,
the Administration recommends entering into negotiations with MBCDC and FKS for the
leasing and management of the retail component of the Anchor Shops and Parking
Garage; and, to the extent that an Agreement cannot be reached, the Administration
only recommends pursuing negotiations with the Urban Retail Properties, under the
condition that the Company establishes a local presence and provides for daily on-site
maintenance.
JMG/CMC/KOB
Attachments
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