194-95 RDA
RESOLUTION NO. 194-95
A RESOLUTION OF THE MIAMI BEACH REDEVELOPMENT
AGENCY AUTHORIZING THE CHAIRMAN AND
SECRETARY TO EXECUTE THE ATTACHED PROMISSORY
NOTE PROVIDING FOR A LOAN FROM THE CITY OF MIAMI
BEACH, FLORIDA TO THE MIAMI BEACH
REDEVELOPMENT AGENCY IN THE AMOUNT OF
$12,000,000.00 TO PAY CERTAIN EXPENSES TO BE
INCURRED BY THE AGENCY WITH RESPECT TO THE
ACQUISITION OF THE ROYAL PALM AND SHORECREST
HOTELS, WHICH ARE REDEVELOPMENT PROJECTS
WITHIN THE CITY LIMITS.
WHEREAS, in connection with the acquisition by the Miami Beach Redevelopment
Agency ("Agency") of certain property described as the Royal Palm and Shorecrest Hotels,
which are redevelopment projects within the geographic limits of the City of Miami Beach
(the "City"), the Agency may incur expenses for which the Agency requires the City to lend
the Agency funds ; and
WHEREAS, the Agency intends to repay this loan not later than January 18, 1996
as provided in the promissory note attached hereto as Exhibit "A"
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MIAMI BEACH
REDEVELOPMENT AGENCY that the Chairman and Secretary are authorized to execute
the promissory note attached hereto as Exhibit "A" providing for a loan from the City of
Miami Beach to the Miami Beach Redevelopment Agency in the amount of $12,000,000,00
to pay certain expenses to be incurred by the Agency with respect to the acquisition of the
Royal Palm and Shorecrest Hotels, which are redevelopment projects within the City limits.
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PASSED and ADOPTED THIS 18th day of
Janl\lary
1995.
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ATTEST:
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SECRETARY
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FORM APPROVED
REDE..V;JELOPM GENCY~
GENER SEL
BY" /'7"-; -b dY
l 1;2 96"
Date
Miami Beach
Redevelopment Agency
1700 Convention Center Drive
Miami Beach, Florida 33139
Telephone: (305) 673-7193
Fax: (305) 673-7772
REDEVELOPMENT AGENCY MEMORANDUM NO.
95-06
January 18, 1995
To:
Chairman and Members of the Board of
the Miami Beach Redevelopment Agency
From:
Roger M. Carlton (\ A I . II J
Executive Directo~~
Subject:
Loan of up to $12 Million from the City of Miami Beach to Acquire the
Sheraton/HCF Hotel Site
Administrative Recommendation
The Administration recommends that the Board of Directors approve a resolution authorizing the
Chairman to enter into the loan agreement with the City.
Background
The initial issuance of Tax Increment Revenue Bonds for the Redevelopment Agency provided
the funds necessary for the acquisition of the site for the Loews Hotel site. As negotiations have
continue for both the Loews hotel and for the Sheraton/HCF hotel it has become apparent that
the City should gain site control over the second hotel site as well, The Redevelopment Agency
could issue, with the concurrence of the City and the County, another series of Tax Increment
Bonds to finance this acquisition and subsequently issue a third series of bonds for the amount
necessary to fund the negotiated amount resulting from the hotel negotiations.
The downside of issuing three series instead of borrowing the funds from the City and repaying
the City from the Tax Increment Bonds which will be issued for the final negotiated amount plus
the City loan is that the costs incurred by the Agency in issuing multiple series of bonds would be
disproportionately high. Even with the interest to be paid to the City on the loan, the total costs to
be incurred by the Agency will be less by borrowing the funds than it would be in issuing a third
series of bonds.
S()UTt1 I)()I~
Vedevel()pment UI~tr1ct
CIfl" CI:~V
Vedevel()pment UlitI1ct
AGENDA ITEM 3-A
January 18, 1995
Analysis
The loan agreement with the City will call for interest to be charged to the Agency at the prime
lending rate, reset monthly, on the amount of funds advanced by the City, The payments to the
City will be interest only monthly until the loan is repaid or, at the option of the Agency, no
payment will be made and the interest will be capitalized into the permanent financing expected in
approximately nine months. This option to capitalize interest costs is necessary as the Agency is
anticipated to have net revenue, after payments on the first series of Tax Increment Revenue
Bonds, of approximately $550,000 for operations for the year. The total interest costs of this loan
are anticipated to be approximately $500,000 for this year and the Agency would not be able to
function if payments were mandated monthly.
Conclusion
Since the loan from the City will provide the funds necessary to acquire the site of the
Sheraton/HCF hotel on a timely basis and a lower net cost than the issuance of additional series of
Tax Increment Bonds, the Board of Directors should approve the loan of up to $12 million from
the City.
RMC/RJN/cp
PROMISSORY NOTE
$12,000,000.00
MIAMI BEACH, FLORIDA
']"u...~0',1.'~ , 1995
FOR VALUE RECEIVED, the undersigned, the Miami Beach Redevelopment Agency, a
Florida municipal corporation ("Maker"), promises to pay to the order of the City of Miami Beach,
a Florida municipal corporation ("Payee"), at its offices at 1700 Convention Center Drive, Miami
Beacn, Florida or at such other address in the United States of America as may be specified in writing
from time to time by holder hereof, the principal sum of TWELVE MILLION AND NOll 00
DOLLARS ($12,000,000,00) (the "Loan"), or such lesser principal amount as is outstanding, payable
together with interest thereon from the date hereof at the rate of PRIME per annum upon the unpaid
balance from time to time outstanding until maturity, same being payable, in lawful money of the
United States of America, as follows:
The entire principal balance of the Loan together with all accrued and
unpaid interest on the Loan shall be due and payable in full on January
18, 1996.
The rate of PRIME per annum, as referenced above, shall be adjusted each month and shall
be the PRIME rate as of the first business day of the month, The principal of this Note may be
prepaid in whole or in part at any time and from time to time without penalty or premium,
By virtue of this Note and subject to the conditions of this Note, Payee is creating a line of
credit in favor of Maker and Maker may draw upon this line of credit as often as it chooses as long
as the outstanding principal balance under this Note does not exceed Twelve Million and NOll 00
Dollars ($12,000,000.00) at any given time,
If default is made under this Note which default continues for a period of thirty (30) days
following written notice to the Maker, then at the option of the holder hereof, the entire outstanding
principal sum, together with all accrued and unpaid interest shall become immediately due and
payable.
Presentment for payment, demand, notice of dishonor, protest and notice of protest are hereby
waived by all makers and endorsers hereof, together with all other requirements to hold each of them
liable as Makers and endorsers,
BY:
T AGENCY,
ATTEST:
'/~k,c~ t . (~o---
Richard Brown, Secretary
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FORM APPROVED
REDEVELOP . T AGENCY ~... .
GENER C01J1\JSEL (
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