197A-95 RDA
RESOLUTION NO.
197A-95
THE CHAIRMAN AND MEMBERS OF THE MIAMI BEACH
REDEVELOPMENT AGENCY RATIFY THE ACTIONS OF
THE MAYOR AND MEMBERS OF THE CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA IN PAYING
ARTHUR ANDERSEN & CO. LLP THE SUM OF $90,000
AND IN EXCHANGING RELEASES WITH ARTHUR
ANDERSEN & CO. LLP, IN FULL AND FINAL SETTLEMENT
OF ARTHUR ANDERSEN & CO. LLP'S CLAIM FOR FEES
AND EXPENSES IN CONNECTION WITH THE
CONVENTION CENTER HOTEL PROJECTS.
WHEREAS, the City of Miami Beach (the "City") retained Arthur Andersen & Co.
LLP ("Arthur Andersen") to render certain services in connection with the request for
proposals process regarding the development of two convention center hotels in Miami
Beach; and
WHEREAS, in connection with the performance of such services to the City, the City
entered into a contract (the "Contract") with Arthur Andersen for the performance of
consulting services; and
WHEREAS, a dispute has arisen regarding the amount of money owed to Arthur
Andersen pursuant to the Contract and in connection with the hotel projects; and
WHEREAS, the City and Arthur Andersen tlave agreed on a full and final settlement
of Arthur Andersen's claims for fees and expenses in connection with the convention
center hotel projects and the Contract.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE CHAIRMAN AND
MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY that the
Redevelopment Agency ratifies the actions of the Mayor and Members of the City
Commission of the City of Miami Beach, Florida in authorizing and directing the
Administration to do the following:
1. Pay Arthur Andersen the sum of $90,000; and
2. Execute a release in favor of Arthur Andersen and obtain a release in favor
of the City of Miami Beach and the Miami Beach Redevelopment Agency
from Arthur Andersen,
in full and final settlement of Arthur Andersen's claim for fees and expenses in connection
with the convention center hotel projects.
PASSED and ADOPTED this 5th
April
,1995.
ATTEST:
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SECRETARY
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Miami Beach
Redevelopment Agency
1700 Convention Center Drive
Miami Beach, Florida 33139
Telephone: (305) 673.7193
Fax: (305) 673-7772
REDEVELOPMENT AGENCY MEMORANDUM NO. 95-20
DATE: APRIL 5, 1995
TO: CHAIRMAN SEYMOUR GELBER
MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY
FROM:
LAURENCE FEINGOLD
GENERAL COUNSEL
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ROGER M. CARLTON
EXECUTIVE DIRECTOR
SUBJECT: SETTLEMENT OF MATTER INVOLVING ARTHUR ANDERSEN
Recommendation:
The General Counsel and Executive Director recommend that the Miami Beach
Redevelopment Agency (the "Agency") ratify the actions of the City Commission in closing
out the Arthur Andersen & Co., SC ("Arthur Andersen") contract for the negotiated sum of
$90,000.00 and the exchange of a general release between the City and Arthur Andersen,
in full and final settlement of Arthur Andersen's claim for services and related costs for the
convention hotel bid solicitation and selection process.
Analysis:
Pursuant to that certain Consultant Agreement (the "Agreement"), dated July 31,
1993, between the City and Arthur Andersen, Arthur Andersen rendered certain services
to the City in connection with the Convention Center Hotel Request for Proposals. A
discussion has arisen over the amount of money in fees and costs owed to Arthur
Andersen in accordance with that Agreement. In connection with the City Commission
meeting of January 4, 1995, the City Attorney distributed Commission Memorandum No.
40-95 (copy attached) generally stating that of the $120,730 claimed by Arthur Andersen
in its most recent invoice (attached as Exhibit "B" to the Commission Memorandum) only
a portion of the fees and costs claimed should be paid and treated as work outside the
scope of the Agreement.
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AGENDA ITEM 2-C
April 5, 1995
Subsequent to that meeting, the City Attorney and City Administration conducted
several meetings with Arthur Andersen and its counsel to attempt to resolve the matter.
Arthur Andersen pointed out that, in between the production of its first tier report and the
selection committee interviews, the City Attorney and City Administration called on Arthur
Andersen numerous times to provide additional analysis and information in what was a
very complicated request for proposal process involving numerous financial analyses.
Arthur Anderson has estimated that its time spent from the production of the first tier report
to the date of the selection committee interviews amounts to fees of $39,111 (see Exhibit
"C" to the Commission Memorandum). The City Attorney and City Administration agree
that Arthur Andersen did perform work outside the scope of the original Agreement in the
period between the preparation of the first tier report and the Selection Committee
interviews.
Arthur Andersen is claiming that it is owed $195,730 by the City - $120,730 as listed
on the invoice attached as Exhibit "B" to the Commission Memorandum and an additional
$50,000 plus $25,000 to be paid to Arthur Andersen upon signing contracts regarding the
first and second convention center hotels, respectively, as listed on Appendix B, Step 1\1
to the Agreement. Based on the numerous discussions and meetings held between the
City and Arthur Andersen in the past several weeks, Arthur Andersen has stated that it is
willing to settle in full for the amount of $90,000. However, Arthur Andersen has stated
that, in the event that a settlement cannot be reached and it is necessary to proceed to
arbitration in accordance with Paragraph 11 of Appendix A to the Agreement, it will seek
the full $195,730.
The City Attorney and City Administration agree that Arthur Andersen should be
paid $68,211 ($29,100 from the invoice attached as Exhibit "B" to the Commission
Memorandum and $39,111 for additional work performed as indicated in Exhibit "C" to the
Commission Memorandum). If this matter is not resolved, arbitration will ensue pursuant
to the Agreement and the City will incur certain expenses. Moreover, although the City
Attorney is confident in his position on the legal issues involved, the issue of what decision
will be reached by an arbitrator or arbitrators always involves some uncertainty.
Accordingly, the General Counsel and Executive Director recommend that the Agency
ratify the actions of the City Commission in paying Arthur Andersen an additional $21,789
for a total of $90,000 and obtaining a general release, in exchange for a full and final
settlement of the matter. This amount is $105,000 less than the amount that would be
claimed by Arthur Andersen under the arbitration provision of the Agreement.
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Enclosure
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