First Amendment to Lease Agreement with Murano Two, Ltd. FIRST AMENDMENT TO LEASE AGREEMENT
This First Amendment (the "First Amendment") to that certain Lease Agreement, dated
as of the 9th day of April, 2003, originally by and among Murano Two, Ltd. (as predecessor in
interest),the City of Miami Beach and the Miami Beach Redevelopment Agency , is entered into
this (a-day of &A 2018, by and among the Murano Grande At Portofino Condominium
Association, Inc., (hereinafter called the "Murano Grande"), the Murano Grande At Portofino
Master Condominium Association, Inc. (hereinafter called the "Master Association"), the City of
Miami Beach, a municipal corporation of the State of Florida (the "City"), and the Miami Beach
Redevelopment Agency, a Florida public agency organized and existing pursuant to the
Community Redevelopment Act of 1969 (Chapter 163, Part III, Florida Statutes, as amended)
("Agency") (collectively, the City and Agency are hereinafter referred to as "Tenant").
RECITALS
WHEREAS,the Murano Grande at Portofino is a condominium located at 400 Alton Rd,
Miami Beach, FL 33139 developed by Murano Two, Ltd., the developer of the condominium as
evidenced in the Declaration of Murano Grande at Portofino, a condominium, recorded in
Official Records Book 21134 at Page 3930-4041 of the Public Records of Miami-Dade County,
Florida("Murano Declaration of Condominium").
WHEREAS, on March 31, 2003,the Murano Grande at Portofino project was developed
by Murano Two, Ltd., as evidenced in the Declaration of Covenants, Restrictions and Easements
for Murano Grande at Portofino Project, recorded in Official Records Book 21134 at Page 3878
of the Public Records of Miami-Dade County, Florida("Master Covenants").
WHEREAS, the Master Association owns and is charged with, among other things,
managing and maintaining the "Common Properties", as defined in Paragraph 1.1(i) of the
Master Covenants.
WHEREAS, on or about April 9, 2003, Murano Two, Ltd. entered into a 101-year lease
agreement with Tenant(the"Murano Lease") for the leasing of parking spaces, laundry, lavatory
and shower facilities, a trash room and a maintenance room all located within the "City Unit" as
more particularly described in the Murano Lease and intended for use by third party beneficiary,
Miami Beach Marina Associates, LTD. ("Marina").
WHEREAS, on or about April 9, 2003, Murano Three, Ltd., entered into a 101-year
lease agreement with Tenant ("Icon Lease") for the leasing of parking spaces, office space and
an electric room all located within the"City Unit" as set forth in the Icon Lease and intended for
use by third party beneficiary,Marina.
WHEREAS, the Murano Grande and Icon Condominium Association Inc. ("Icon"),
joined by Master Association, filed separate lawsuits for damages and eviction under two
separate leases for the "City Units" contained within the Murano Grande parking garage and
Icon parking garage against the City, the RDA and the Marina, in consolidated Case Nos. 2015-
11069 CA43 and 2014-023217 CA43, in the Eleventh Judicial Circuit in and for Miami-Dade
County(collectively the"Lawsuit").
WHEREAS, the City and the RDA filed a third-party complaint/counterclaim in the
Lawsuit seeking declaratory action pursuant to the Declaratory Judgment Act, 86.111, Fla. Stat.
seeking to determine, inter alfa,that pursuant to the Master Covenants, the Master Association is
the City and RDA's "Landlord"under both the Murano Lease and the Icon Lease.
WHEREAS, on or about April 27, 2017, the Court entered an Order on The City Of
Miami Beach and Miami Beach Redevelopment Agency's Amended Motion for Summary
Judgment as to the Counterclaim/Third Party Complaint for Declaratory Relief finding that"the
Master Association is the sole Landlord under the [Murano Lease]" and "the Master Association
is the sole Landlord under the Icon Lease."
WHEREAS, the Murano Grande, Icon and Master Association appealed the Court's
April 27, 2017 Order to the Third District Court of Appeals, Murano Grande at Portofino
Condominium Association, Inc., et al., v. The City of Miami Beach et. al., Appellate Case No:
3d17-2356 (the"Appeal").
WHEREAS, through the Appeal, the Associations also appealed the Court's Order on
Tenant's Motion to Dismiss First Amended Complaint rendered on October 5, 2017, as amended
on October 13, 2017; the Court's Order Denying Associations' Amended Motion for Summary
Judgment rendered on October 20, 2016; and Order Denying Associations' Motion for
Rehearing or Alternative Motion for Entry of Corrected Order and Clarification rendered on May
30, 2017.
WHEREAS, this First Amendment to Lease Agreement is being executed as part of a
settlement between the parties in the Lawsuit to settle all claims as provided for in the written
Settlement Agreement executed by the parties simultaneously herewith; to define the Master
Association as the "Landlord" under the Murano Lease, as Ordered by the Court; and to further
clarify the Tenant's and Landlord's obligations pursuant to the Murano Lease.
NOW THEREFORE, in consideration of the leased "City Unit", the mutual covenants
hereinafter contained, and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Murano Grande, the Master Association, the City, and the
Agency agree as follows:
1. The above recitals are true and correct and are incorporated as part of this First
Amendment.
2, Except as set forth herein, the terms defined in the Murano Lease shall have the same
meaning when used in this First Amendment.
3. In the event of a discrepancy between the terms, obligations, conditions and/or covenants
contained in this First Amendment and the Murano Lease, then the terms, obligations,
conditions and/or covenants contained in this First Amendment shall control.
4. Except as expressly amended hereby in this First Amendment, the Murano Lease shall
continue in full force and effect in accordance with the provisions thereof.
5. Notwithstanding any provision to the contrary in the Murano Lease, the term "Landlord"
in the Murano Lease shall mean the "Murano Grande At Portofino Master Condominium
Association, Inc."
6. PARAGRAPH 2: The first paragraph in Paragraph 2 of the Murano Lease is DELETED
in its entirety and is REPLACED with the following:
"This Lease shall be for a term (the "Term") of one hundred one (101) years, unless
sooner terminated or extended as provided herein. The Term commenced (the
"Commencement Date") on December 11,2003"
7. PARAGRAPH 2: The following clause, in the second paragraph of Paragraph 2 of the
Murano Lease is DELETED in its entirety:
..."for a single installment of base rent equal to $101.00 plus any applicable sales tax
thereon(if any) due and payable when the option is exercised,"...
8. PARAGRAPH 4: The following is DELETED from Paragraph 4(b)(ii):
"In addition to Base Rent, Tenant shall and hereby agrees to pay to Landlord each month
a sum equal to any sales tax, tax on rentals, and any other charges, taxes and/or
impositions now in existence or hereafter imposed based upon the privilege of renting the
space leased hereunder or upon the amount of Rent and any other charges collected
therefor; provided, however, to the extent that Tenant is exempt under applicable law
from the obligation to pay sales tax, Tenant shall provide Landlord with Tenant's tax
exempt identification number or other appropriate evidence of such exempt ion,
whereupon Tenant shall not be obligated to pay any such sales tax. Nothing herein shall,
however, be taken to require Tenant to pay any part of any federal or state taxes on
income imposed upon Landlord."
9. PARAGRAPH 4: The second sentence of the fourth paragraph in Paragraph 4(b)(ii) is
DELETED in its entirety and is REPLACED with the following:
"The term "lease year" as used in this Lease shall mean a twelve (12) consecutive month
period, the first lease year commencing on the Commencement Date and subsequent
lease years commencing each anniversary thereof."
10. PARAGRAPH 6: In Paragraph 6(b), the following is DELETED in its entirety and
REPLACED with the following:
"Tenant shall provide 24-hour security for the City Unit and the Marina throughout the
entire Term of this lease and all extensions, at Tenant's sole cost and expense."
11. PARAGRAPH 7: In the first sentence of Paragraph 7(a),the term"Maintenance Costs"is
DELETED and REPLACED with the term"Additional Rent".
12. PARAGRAPH 9: Section 9(c) of Paragraph 9 is DELETED in its entirety.
13. PARAGRAPH 10: Paragraph 10, titled ADDITIONAL RENT, is DELETED in its
entirety and is REPLACED with the following:
10. ADDITIONAL RENT:
(a) Subject to adjustment as further provided in paragraph 10(b) below, commencing on
October 1, 2018, and for the remainder of the Term, Tenant shall, during each year, pay
to Landlord, as "Additional Rent", the annual sum of $95,550.00. For the period from
October 1, 2018 to December 31, 2018, Tenant shall pay to Landlord a reduced sum of
$23,887.50. All Additional Rent payments shall be due and payable to Landlord, with
notice via email or in accordance with Article 26, on a quarterly basis, on January 1,
April 1, July 1 and October 1, of each lease year of the Term. Any failure on the
Landlord to timely provide Tenant with Notice of its Additional Rent payments shall not
be deemed a waiver of the Landlord's right to demand payment for Additional Rent
under this Lease. Notwithstanding the Commencement Date or any provision to the
contrary in this Lease, for purposes of Additional Rent, the lease year shall commence on
January 1 of each year, and any amounts due at the end of the Term shall be prorated
accordingly.
(b) Commencing on January 1, 2019, Additional Rent shall be adjusted annually,
effective as of January 1 of each lease year, based on the percentage of change reflected
in the Consumer Price Index for All Urban Consumers (CPI-U): Miami-Fort. Lauderdale,
FL West, Palm Beach ("CPI"). The annual CPI adjustment shall be determined by
multiplying the base Additional Rent then being paid, by a fraction, the numerator of
which shall be the CPI for October of the year immediately preceding the year of
adjustment (January 1), and the denominator of which shall be the CPI for the October of
two years immediately preceding (example: October 2018/October 2017). Landlord shall
notify the Tenant of the annual CPI increase in November, with Tenant to commence the
adjusted Additional Rent payments in January of the next year (e.g. notice in November
2019 and increased Additional Rent payment to commence January 2020). Should the
CPI become unavailable, the calculation shall be in accordance with whatever
replacement standard is established by the US Department of Labor to measure the
annual rate of inflation. If no agreement is reached on the reasonable mutually agreeable
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substitute, such a dispute shall be submitted to binding arbitration. Additional Rent
payments shall continue to be paid until the Landlord notifies the Tenant of the new
adjusted Additional Rent. The new Additional Rent shall be payable retroactively to the
effective date of the new adjustment date, within forty—five (45) days from receipt of an
invoice from the Landlord of the new annual Additional Rent amount. Notwithstanding
the foregoing, in no event shall the annual Additional Rent amount be less than the lowest
annual Additional Rent amount assessed for the five preceding years (example: year 1
$100,000, year 2 $105,000, year 3 $110,000, year 4 $105,000, year 5 $100,025; year 6
with CPI $95,000; however,year 6 Additional Rent amount shall be$100,000).
Additional Rent due by reason of this paragraph for the final months of this Lease is due
and payable even though it may not be calculated until subsequent to the termination date
of this Lease; and shall be prorated according to that portion of said calendar year that
this Lease was actually in effect.
(c) Commencing on October 1, 2018, on a monthly basis, the Tenant shall commence
direct payment for all storm water charges directly related to the City Unit (calculated as
70 ERU * Monthly ERU Cost) which shall be directly bill to the Tenant and paid for
directly by the Tenant. Until such time as the Tenant commences direct payment of storm
water charges, or in the event that after October 1, 2018, the Tenant fails to issue the
direct payment of the storm water charges, and the Murano Grande incurs these storm
water.charges, which the Parties acknowledge are incurred on behalf of the Landlord,
Landlord shall bill the Tenant for such amount, in which event, payment from Tenant
shall be due within ten (10) business days of said invoicing. In the event Tenant fails to
remit payment when due, the Landlord shall have the right to commence eviction
proceedings as provided for under the Lease.
(d) Notwithstanding any provision to the contrary contained in this Lease, the
Additional Rent, as defined in this Paragraph 10, shall be the only amounts due and
payable by Tenant to the Landlord pursuant to this Lease.
(e) Landlord shall have no obligation to provide Tenant with documentation to support
the charges that may or may not by incurred by the Landlord in connection with the
Additional Rent due by Tenant to Landlord under this Lease.
14. PARAGRAPH 15. The third and fourth sentence in the first paragraph of Paragraph 15 is
AMENDED as follows:
"The cost of repair and maintenance of all utility systems solely serving the City Unit
shall be the sole responsibility of Tenant, but only to the extent such utilities are
separately metered or submetered. As of the date of this First Amendment, the Parties
acknowledge that the water and electric utilities for the City Unit are separately metered
or submetered. Any utility bill that is billed directly to the Landlord or Murano Grande
for utilities servicing the City Unit, Landlord shall bill the sub-Tenant, with a copy to the
Tenant via e-mail or regular mail, directly for the separately metered or submetered
utilities on a monthly basis. With regard to the water utility servicing the City Unit, the
parties agree that the rate of consumption to be charged to the Tenant and Tenant's
subtenant shall be the average consumption rate multiplied by the consumption calculated
on the water submeter. In the event that the sub-Tenant fails to issue the utilities payment
to the Landlord within thirty (30) days, the Landlord shall have the right to discontinue
the separately metered or submetered utilities services to the Tenant and the City Unit.
Tenant shall be solely responsible for payment, and shall promptly pay, all charges for
telephone and cable utilities or services with respect to the City Unit."
15. PARAGRAPH 15. The following in the second paragraph of Paragraph 15 is
DELETED:
"If not separately metered and paid by Tenant, any consumption of electric current by
Tenant in excess of that considered by Landlord to be usual, normal and customary by all
tenants shall be paid for by Tenant as Additional Rent in an amount to be determined by
Landlord based upon Landlord's estimated cost of such excess electric current
consumption or based upon the actual cost thereof if such consumption is separately
metered."
16. PARAGRAPH 18. The following is DELETED from Paragraph 18(b):
(b) Tenant shall be responsible to pay as part of Additional Rent, its proportionate share
(equitably allocated) of any fire, windstorm, flood and extended casualty policies if
insurance is maintained for the benefit of the building as a whole."
17. PARAGRAPH 19. The following is DELETED from Paragraph 19(c):
"(c) If, at any time prior to the expiration of the term of this Lease, any ground or
underlying lease under which Landlord shall then be the lessee shall expire or be
terminated for any reason, Tenant agrees at the election and upon demand of any owner
of the Property, the Parking Garage or any structures appurtenant thereto, or if the holder
of mortgages in possession of the same, or of any lessee under any other ground or
underlying lease covering premises which include the City Unit, to attorn, from time to
time, to any such owner, holder or lessee upon the then executory term and conditions of
this Lease, for the remainder of the term of this Lease, provided that such owner, holder
or lessee, as the case may be, shall then be entitled to receive Maintenance Costs (as
defined herein). The foregoing provisions of this Paragraph 19(c) shall inure to the
benefit of any such owner, holder or lessee, shall apply notwithstanding that as a matter
of law, this Lease may terminate upon the expiration or termination of any, such ground
or underlying lease, shall be pelf-operative upon any rush demand, and no further
instrument shall be required to give effect to said provisions. Tenant, however, upon
demand of any such owner, holder or lessee, agrees to execute from time to time,
instruments in confirmation of the foregoing provisions of this Paragraph 19(u),
satisfactory to any such owner, holder or lessee acknowledging such attornment and
setting forth the terms and conditions of its use and occupancy of the City Unit. Nothing
contained in this Paragraph 19(o) shall be construed to impair any right otherwise
exercisable by any such owner,holder or lessee."
18. PARAGRAPH 19. In Paragraph 19, the term "Maintenance Costs" is DELETED and is
REPLACED with the term"Additional Rent".
19. PARAGRAPH 24: The following is DELETED in Paragraph 24(g):
..."and the City provides the Landlord with sufficient funds for the rebuilding of the City
Unit(whether by insurance proceeds, condemnation awards, or otherwise)"...
20. PARAGRAPH 24. The following language is ADDED at the end of Paragraph 24(g):
"If Landlord elects to repair or rebuild the Parking Garage, and the Tenant is otherwise in
compliance with the terms of this Lease and the City Unit cannot reasonably be used for
its intended purpose as reasonably determined by the authorities having jurisdiction,
Additional Rent shall be abated proportionately (based upon the ratio that the square
footage of the City Unit that is untenantable bears to the entire City Unit)from the date of
destruction or damage until the repairs have been substantially completed. Tenant agrees
that during any period of reconstruction or repair of the City Unit, it shall continue the
operation of its use within the City Unit to the extent practicable. If all or any part of the
City Unit shall be damaged by fire, flood, rising water or other casualty and the fire,
flood,rising water or other casualty is caused by the fault or neglect of Tenant or Tenant's
agents, guest, or invitees, Base Rent, Additional Rent and all other charges shall not
abate. To be rendered untenable, the condition must exist for more than thirty (30) days.
If the damage or destruction which has occurred to the City Unit is such that in the
reasonable opinion of Landlord such reconstruction or repair cannot be completed within
one hundred twenty (120) days of the happening of the damage or destruction, Landlord
may, at its option, terminate this Lease on notice to Tenant given within thirty (30) days
after such damage or destruction and Tenant shall immediately deliver vacant possession
of the City Unit in accordance with the terms of this Lease. In addition, if Landlord
undertakes the reconstruction or repair, and does not complete same within nine (9)
months after the date of the fire, rising water, flood or other casualty (not including the
time required to prepare plans for reconstruction, to obtain building permits, to receive
distribution of insurance proceeds, and to complete the likely contract bidding process
and all other relevant factors),then Tenant shall have.the right to terminate this Lease by
written notice to Landlord delivered within thirty (30) days after the expiration of such
nine (9) month period (or as extended), whereupon both parties shall be relieved of all
further obligations hereunder, except as otherwise expressly set forth herein.
Notwithstanding the foregoing, the parties recognize that high tides and king tides exist
as of the execution of this First Amendment and that temporary ponding of water (which
shall be defined as water of more than 2 inches in more than 20% of the parking spaces)
("Ponding Water") shall not trigger any abatement of Additional Rent hereunder. In
addition, the Landlord's obligation to maintain or repair the City Unit due to Ponding
Water shall be limited to the Landlord's routine maintenance and repair of the original
drainage system for the City Unit in accordance with the original design, materials and
• ' i
equipment. In the event Ponding Water persists in the City Unit for a period of 30 days or
more, Tenant's sole remedy shall be the right to terminate this Lease by written notice to
Landlord, whereupon both parties shall be relieved of all further obligations hereunder,
except as otherwise expressly set forth herein. In the event Ponding Water persists in the
City Unit for a period of less than 30 days, the Tenant shall have no right to abate the
payment of rent. To the extent the Landlord undertakes any maintenance or repair of the
drainage system impacting the City Unit as originally designed or the Landlord cannot
maintain or repair the City Unit as originally designed, and Ponding Water persists for a
period of more than 60 days, the Landlord shall have the right to terminate this Lease by
written notice to the Tenant, whereupon both parties shall be relieved of all further
obligations hereunder, except as otherwise expressly set forth herein."
21. PARAGRAPH 26: All notices and communications under this Lease shall be delivered
via regular mail and certified mail to the following persons:
Landlord:
General Manager
Murano Grande Master
450 Alton Road
Miami Beach, Florida 33139
General Manager
Murano Grande at Portofino
400 Alton Road
Miami Beach, 33139
Tenant:
Office of Real Estate
1755 Meridian Avenue, Suite 300
Miami Beach,FL 33139
City of Miami Beach Parking Department
1755 Meridian Avenue, Suite 200
Miami Beach,Florida 33139
22. The Parties acknowledge that the "Operational Standards" outlined in the Lease shall be
defined as "comparable to those in other indoor parking garages located in...south shore
of Miami Beach..."
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MURANO GRANDE AT PORTOFINO MURANO GRANDE AT PORTOFINO MASTER
CONDOMINIUM ASSOCIATION INC. CONDO 1 ;LUM A 0 IATION INC.
BY: 1r.oz---. . . B AIPM/ alliabow--
NAME: k4ifue 5—kA:._ NAME: T
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TITLE: ' 1 T TITLE• ire
ADDRESS: VIA/16tP))Ai4=c. 35t5
ADDRESS:45 )Ali-en .a M►a.rvti 'lO.- - -33139
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WITNESS: Gwilikatick Teliaj WITNESS: k''tone,-Des re.4.
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THE CITY OF MIAMI BEACI-y ?; ' \l' • 1' 'ItY OF MIAMI BEACH
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S .INCORP OATED -; �,r�
NAME: Mayor Dan Gelb 4.:76)...°• ,. '' , Rafael Granado
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TITLE: Mayor q�u� 2 ITLE: City Clerk
ADDRESS: 1700 Convention Center Blvd ADDRESS: 1700 Convention Center Blvd
Miami Beach,Fl 33139 Miami Beach,Fl 33139
APPROVED AS TO
FORM & LANGUAGE
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MIAMI BEACH REDS 'ELME": E1'1 ----- ; MgIl ACH REDEVELOPMENT
AGENCY - 4r, ' `"`' El €4
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By: V. B. 4 �. .,� �" Ili.
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NAME: Mayor Dan Gelber 14414% NAME:tri Rafael Granado
TITLE: Chairman TITLE: Secretary
ADDRESS: 1700 Convention Center Blvd ADDRESS: 1700 Convention Center Blvd
Miami Beach, Fl 33139 Miami Beach, Fl 33139
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