Amendment No. 1 to the Agreement with Living Arts Trust, Inc. d/b/a O Cinema 2011a - 3 G (cS7
AMENDMENT NO. 1
TO THE MANAGEMENT AGREEMENT
BETWEEN
THE CITY OF MIAMI BEACH, FLORIDA
AND
LIVING ARTS TRUST, INC. D/B/A 0 CINEMA
FOR THE MANAGEMENT & OPERATION
OF A PORTION OF THE BYRON-CARLYLE THEATER
This Amendment No. 1 (Amendment) to the Management Agreement, dated
October 24, 2014 (the Agreement), by and between the CITY OF MIAMI BEACH,
FLORIDA, a municipal corporation, organized and existing under the laws of the State of
Florida, having its principal place of business at 1700 Convention Center Drive, Miami
Beach, Florida 33139 (the City), and LIVING ARTS TRUST, INC. d/b/a 0 CINEMA, a
Florida nonprofit corporation, having its principal place of bssiness at 90 NW 29th Street,
Miami, Florida 33127 (0 Cinema), is entered into thisTV day of (srt.wit-n7 2019
(Effective Date).
RECITALS
•
WHEREAS, on October 24, 2014, pursuant to City Commission Resolution No.
2014-28729, the City and 0 Cinema entered into a Management Agreement
(Agreement), for the management and operation of a portion of the City-owned Byron
Carlyle Theater (Facility), located at 500 71st Street, Miami Beach, Florida 33141; and
WHEREAS, the Initial Term of the Agreement ends October 31, 2019 and the
City has the option to renew with single or multi-year terms, which Renewal Term(s) are
not to exceed a total of five (5) years, by providing 0 Cinema with not less than 365 days
written notice prior to the expiration date of the Initial Term; and
WHEREAS, pursuant to the Agreement, 0 Cinema is responsible for all
maintenance, minor repairs, janitorial expenses, and 72% of the costs of utilities at the
Theater (representing 0 Cinema's proportionate share of the Facility), while the City is
responsible for all major repairs, capital improvements, and 28% of the charges for
utilities at the Theater; and
WHEREAS, as compensation for use of the Facility, the Agreement requires 0
Cinema to pay minimum annual rent of$5,000, or 10% of certain revenues, whichever is
greater (Use Fee) and, in addition to rent, 0 Cinema contributes $2,500 annually to
defray the City's cost for major repairs and capital improvements to the Facility (Capital
Contribution); and
WHEREAS, 0 Cinema has requested that the City modify several terms in the
Agreement, including: an extension of the term of the Agreement by two years; an
annual City subsidy to 0 Cinema of $100,000, less utility costs, and maintenance and
repairs of HVAC, Septic, Sewer, safety systems, roof, and elevator systems at the
Facility; waiver of the Use Fee and the Capital Contribution; and modification of certain
performance benchmarks; and
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WHEREAS, on July 13, 2018, the Finance and Citywide Projects Committee
(FCWPC) recommended that the City fund the additional amounts necessary to
accommodate 0 Cinema's requests related to its Agreement, provided that 0 Cinema
expand its programming for seniors, family, and children and add a City board
representative; and
WHEREAS, on July 20, 2018, the FCWPC recommended that the City
Commission appropriate $150,000 from the FY 2018/2019 general fund in order to fulfill
0 Cinema's request for a subsidy and to cover the cost of the City assuming
maintenance and repairs; and
WHEREAS, on September 26, 2018, the City Commission adopted the FY
2018/19 budget pursuant to Resolution No. 2018-30512, which included an
enhancement of $150,000 from the FY 2018/2019 general fund for 0 Cinema's subsidy
request per the recommendation of the FCWPC; and
WHEREAS, 0 Cinema proposed incorporating certain public benefits into an
amendment of the Agreement: "Celebrate Miami Beach," an annual event highlighting
Miami Beach's culture and history, offered at no charge to the community; 200 free
tickets for senior citizens offered no less than once per quarter and/or four times per
year; 200 free tickets for youth offered no less than once per quarter and/or four times
per year; 100 free and/or discounted tickets offered annually through the Miami-Dade
County Golden Ticket program for seniors ages 62 and over, and the Miami-Dade
County Culture Shock $5 ticket program for youth ages 13-22 to select films and events;
and increased discount for 'Miami Beach Resident Day' from 10% to 20% at least 12
times per year, for a minimum of one film screening per month; and
WHEREAS, in addition to the enhanced public benefits, 0 Cinema has
requested that the amendment eliminate the existing requirement for a marketing
expenditure of $50,000 annually, and in return, 0 Cinema has proposed an annual
benchmark of 20,000 attendees, and the submission by 0 Cinema of an annual report of
marketing efforts completed and proposed for that year; and
WHEREAS, at the September 14, 2018 FCWPC meeting, the Committee
discussed the planned public solicitation for redevelopment of the Byron Carlyle Theater
and the condition of the Facility; and
WHEREAS, the City's Property Management Department indicated it was in the
process of obtaining costs of required repairs to render the Facility code compliant and
to conduct an indoor air quality test, as the FCWPC stated this was a priority for the well-
being of the visitors to the Facility and 0 Cinema staff; and
WHEREAS, subsequent to the September 14, 2018 FCWPC meeting, the City's
Building Official reviewed the Electrical and Structural 50 Year Re-certification reports
and determined that the deficiencies identified must begin to be remedied right away in
order to maintain compliance if the Facility is to remain occupied; and
WHEREAS, the costs associated with the remedial work are estimated at
approximately $2.44 million; and
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WHEREAS, at the December 12, 2018 City Commission meeting, City staff
advised that during the remainder of the Initial Term, electrical grounding work (including
repairs to breakers) will have to be prioritized; the projection room would have to be kept
fire safe, by only leaving the materials used for a certain projection at the time, and
periodic inspections of the Facility should be conducted when major rain events occur;
and
WHEREAS, 0 Cinema would have to cooperate with the City in providing access
to the Facility in connection with any required work and periodic inspections; and
WHEREAS, in light of the condition of the Facility, the Administration could not
recommend approving any of the renewal options, but recommended assisting 0
Cinema with identifying a possible space in North Beach, including possibly extending
the Initial Term, on a month to month basis, in the City Manager's sole discretion, should
conditions permit; and
WHEREAS, on December 12, 2018, pursuant to City Commission Resolution
No. 2018-30657, the Mayor and City Commission approved the essential terms of the
proposed Amendment No. 1 to the Agreement (accompanying the City Commission
Memorandum), without the exercise of the renewal options, as follows:
1) the removal of the renewal terms and, subject to the City Manager's approval, in
his sole discretion, the City may extend the Initial Term, on a month to month
basis; otherwise, the Agreement term will expire on October 31, 2019;
2) the payment to 0 Cinema, during the remainder of the Initial Term, of a subsidy
in the gross amount of$100,000, less a minimum utility payment (estimated to be
$22,000 per year), resulting in an annual net subsidy of$78,000, subject to a true
up payment to the City for utility usage exceeding 0 Cinema's proportionate
share (72%) of the utility expenses at the end of the Contract Year, and subject
to funding appropriation and approval by the City Commission;
3) the assumption, by the City, of the responsibility for maintenance and repairs of
the Facility, at an annual cost of approximately $50,000, subject to funding
appropriation and approval by the City Commission;
4) the waiver of the annual use fee, having a value of approximately $12,000;
5) the waiver of the annual capital contribution of$2,500; and
6) the modification of the annual benchmark requirements, incorporating a
requirement to provide programming for youth and seniors.
NOW THEREFORE, in consideration of the mutual promises and conditions
contained herein, and other good and valuable consideration, the sufficiency of which is
hereby acknowledged, the City and 0 Cinema hereby agree to amend the Agreement as
follows:
1. ABOVE RECITALS.
The above recitals are true and correct and are incorporated as part of this
Amendment.
2. MODIFICATIONS.
The Agreement is hereby modified (deleted items struck-through and inserted
items underlined) as follows:
Page 3 of 9
(a) Subsection 2.2 is deleted in its entirety and replaced with the following:
2.2 Renewal Term(s). Upon the Expiration Date of the Initial Term, at the
City Manager's sole and absolute discretion, the City may extend this Agreement on a
month-to-month basis and the Agreement may be terminated by either party upon thirty
(30) days written notice.
Notwithstanding the foregoing, the City and 0 Cinema acknowledge that
Amendment No. 1 to the Agreement was executed in furtherance of 0 Cinema's
management and operation of the Facility, during the remainder of the Term, as long as
the City's Building Official deems the Theater safe for use and occupancy. In the event
that any part of the Theater is deemed unfit for occupancy by the City's Building Official,
or is taken by governmental authority for public use, or under any statute, or by right of
eminent domain, the term hereby granted and all rights of 0 Cinema hereunder shall
immediately cease and terminate.
(b) Subsection 4.2.4 of the Agreement is hereby modified as follows:
4.2.4 Annual Benchmarks. Every Contract Year (or year, throughout the Term
of the Agreement, 0 Cinema shall achieve the following benchmarks:
• operate a minimum of 5-days a week, 48 weeks a year schedule;
• present no less than 500 Events throughout the year;
• serve an anticipated -0,000 20,000 visitors per year;
• increase attendance by 5% annually over prior years;
• highlight and market 0 Cinema Miami Beach as part of 0 Cinema's annual
marketing budget, which budget shall not be less than $50K and provide by
June 1 of each year: (1) a comprehensive annual report of completed marketing
efforts over the past year and (2) a detailed plan for 0 Cinema's marketing
strategy over the upcoming year;
• provide Miami Beach residents with discounted-quality cinematic offerings
(20% discount) at least 12 times per year, for a 'minimum of one film
screening per month;
• present an annual event, "Celebrate Miami Beach," highlighting Miami Beach's
culture and history, including a film screening, post-film discussion, and
reception, all provided with free admission for the community;
• provide no less than 200 free tickets for seniors for select screenings. In
addition, 0 Cinema will work with local senior centers, senior housing facility,
and the City's Parks & Recreation Department to offer free special screenings
throughout the year for seniors (aged 62 and over) no less than once per
quarter and/or four times per year;
• provide no less than 200 free tickets for youth throughout Miami Beach for
select screenings. In addition, 0 Cinema will work with Parks & Recreation
Department and area schools to offer free special screenings throughout the
year for students (up to age 18) no less than once per quarter and/or four times
per year;
• provide no less than 100 free and/or discounted tickets offered annually through
the Miami-Dade County Golden Ticket program for seniors ages 62 and over,
and provide no less than 100 free and/or discounted tickets offered annually
through the Miami-Dade County Culture Shock $5 ticket program for youth ages
13-22 to select films and events.
Page 4 of 9
(c) Subsection 5.3.3 of the Agreement is hereby modified as follows:
5.3.3 negotiate, execute in its name as agent for the City, deliver, and
administer any and all contracts in connection with the management, maintenance,
promotion and operation of the Facility; provided that if any such contract has a term that
extends beyond the remaining Term, such contract shall provide that it is automatically
assigned to City as of the expiration or termination date of this Agreement and that the
City Manager may terminate any such agreement at any time. without cause and/or
liability to the City. upon not less than ten (10) days written notice.
(d) Subsection 5.3.5 of the Agreement is hereby deleted in its entirety and
replaced with the following:
5.3.5 0 Cinema warrants and represents to City that, prior to the Effective Date,
O Cinema inspected the Facility, and 0 Cinema hereby accepts the Facility "as-is,
where-is and with all faults."
(e) Subsection 5.3.15 is hereby modified as follows:
5.3.15 (Resident Ticket Program) 0 Cinema shall operate a discount ticket
program available only to City of Miami Beach residents (meaning individuals who
permanently reside in the City of Miami Beach), by which a twenty ten percent
(20%49%) discount off of the full face value pricing shall be made available to such City
of Miami Beach residents ("Resident Tickets") for a minimum of one film screening per
month. 0 Cinema reserves the right to require proof of City residency including, but not
limited to, government photo ID, utility bill, school ID or other similarly credible indicia of
residency. For these purposes, the foregoing Resident Tickets. shall be subject to the
following rules: 1) All tickets shall be sold on a first come, first served basis and shall be
available at the Facility box office; 2) The type and location of seating for all tickets shall
be determined by 0 Cinema, in its sole discretion, but shall include a full range of all
ticket prices; and 3) 0 Cinema shall have the right to promulgate additional reasonable
rules concerning such sales so long as same are consistent with the terms hereof to
assure the efficient operation of the program and compliance with these terms and
conditions;
(f) Subsection 6.1 of the Agreement is hereby deleted in its entirety.
(g) Subsection 6.2.4 of the Agreement is hereby deleted in its entirety.
(h) Section 9 is hereby deleted in its entirety and replaced with the following:
SECTION 9. LIMITED FUNDING BY CITY.
9.1 Upon execution of this Amendment, during the remainder of the Term for
each Contract Year, the City may provide funding to 0 Cinema, contingent upon funding
appropriation and approval by the City Commission during the City's budgetary process
during each fiscal year, in an amount not to exceed $100,000.00 for a Contract Year,
which shall be reduced by $22,000.00, representing 0 Cinema's minimum utility use fee
("Minimum Utility Payment") for the shared utilities (as are defined in Section 20),
resulting in a net subsidy to 0 Cinema of $78,000.00 ("City Contribution(s)"), payable in
Page 5 of 9
quarterly installments annually, with the first payment, in the amount of $19,500.00, due
October 1; $19,500.00 due on January 1; $19,500.00 due on April 1; and $19,500.00
due on July 1. If the Agreement is extended on a month-to-month basis, the City
Contribution payments will be payable in monthly installments, in the amount of
$6,500.00 per month. If the Agreement is terminated before the end of the Contract
Year, the City will be obligated to provide funding for only the pro rata portion of time
within the Contract Year prior to the effective date of the termination. If the Agreement
terminates prior to completion of a period for which an installment payment of the City
Contribution has been provided, 0 Cinema will refund to the City the pro rata portion of
the payment applicable to the portion of the installment period after the effective date of
the termination.
0 Cinema shall submit an invoice for each payment of such City Contribution and
also submit the corresponding reports due for that particular quarter. The City will pay
the invoice within forty-five (45) days from receipt of the invoices. Notwithstanding the
foregoing, the City, in its sole discretion, may condition payment of the City Contribution
upon 0 Cinema providing the requisite reports under this Agreement including, without
limitation, those reports set forth in Sections 5 and 12 of this Agreement.
If at such time the City occupies that area of the Facility not currently occupied by
0 Cinema, depicted as "City of Miami Beach" in Exhibit A, then the City agrees to revisit
with 0 Cinema the structure of the Minimum Utility Payment.
9_2 Annual True Up. Notwithstanding the foregoing, in the event that
the cost of 0 Cinema's share of the utility bills for the Contract Year, based upon 0
Cinema's Proportionate Use (72%) of the Theater, exceeds the Minimum Utility
Payment, then 0 Cinema will reimburse the City for the overage amount received during
the applicable Contract Year within forty-five (45) days from the end of the fourth quarter.
Conversely, in the event that the cost of 0 Cinema's share of the utility bills for the
Contract Year, based upon 0 Cinema's Proportionate Use (72%) of the Theater, falls
short of the Minimum Utility Payment, then the City will reimburse 0 Cinema for the
underage amount from the applicable Contract Year within forty-five (45) days from the
end of the fourth quarter.
9.3. Notwithstanding the foregoing, the costs associated with the City
Contribution shall be subject to funding appropriation and approval by the City
Commission during the City's annual budget approval process. Any references to City
Contributions, payments, or reimbursements are based on a full Contract Year and
subject to budgetary funding approvals for the Fiscal Year covering said Contract Year.
As such, any event which creates a shortened Contract Year, such as a default or
termination for convenience, shall be prorated accordingly.
9.4. Except as set forth in this Section 9, and other costs which the City has
expressly agreed to pay under the terms of this Agreement, the City will have no other
funding or other payment obligations with respect to the Facility or its Operating
Expenses or its operations. Additionally, 0 Cinema and City have entered into this
Agreement with the expectation and belief that, as of the Effective Date, no
governmental body will impose any ad valorem taxes upon the Facility nor any sales,
income, excise or other taxes. Notwithstanding the preceding sentence, the City makes
no representation to 0 Cinema, either expressed or implied, that any or all of such taxes
may or may not be imposed at any time during the Term of the Agreement.
Page 6 of 9
•
(i) Subsection 11.3 of the Agreement is hereby deleted in its entirety and
replaced as follows:
11.3 Maintenance. The City hereby assumes, on behalf of 0 Cinema, the
responsibility for the maintenance (the City maintenance responsibility), and the repair
and replacement (at the City's sole discretion), of all improvements, fixtures, and
equipment at the Facility (collectively, the City repair responsibility). Notwithstanding the
foregoing, the costs associated with the maintenance and repair responsibilities shall be
subject to funding, appropriation and approval by the City Commission during the City's
annual budget approval process. Additionally, the City shall comply with the repair
responsibility through the City's existing agreements and in accordance with the same
standards, as the City provides for other City facilities. The City maintenance and repair
responsibilities shall not include those services or costs relating to or arising out of any
private event or activity at the Facility including, without limitation, services and costs
associated with the rental of the Facility, which additional services or costs shall remain
the responsibility of 0 Cinema. 0 Cinema agrees to keep and maintain the Facility, and
every part thereof, in good condition and order during the Term of the Agreement and
will not suffer or permit any strip or waste of the Facility. 0 Cinema shall comply with any
and all State, Miami-Dade County, and City laws, codes, rules, and regulations, etc. with
regard to its respective obligations.
0 Cinema shall provide the City with prompt notice of needed maintenance and
repair requests that are deemed to be within the City's responsibilities, and the City shall
have a reasonable time thereafter to commence said maintenance and/or repairs.
Except as expressly provided in this Agreement, it is understood by the parties hereto
that 0 Cinema shall not be responsible nor required to pay for any costs related to
capital improvements or infrastructure (i.e. including, but not limited to, roof, structural
elements and infrastructure, HVAC, plumbing and sewer lines, maior electrical, etc.) for
the Facility (collectively, capital improvements or repairs). 0 Cinema shall provide the
City with prompt notice of needed capital improvements or repairs, so that the City, in its
sole discretion, may prioritize and appropriate the funds necessary for any needed
capital improvements or repairs.
Consistent with the City's rights of entry contained in Subsection 8.1, 0 Cinema
will cooperate with the City in providing access to the Facility in connection with any
necessary work, repair, and periodic inspections (including in connection with any major
rain events) by the City, its agents, employees, and contractors at any time deemed
necessary by the City, upon providing 0 Cinema with 24 hours' notice. Throughout the
remainder of the Initial Term and any Renewal Periods, if any, 0 Cinema shall keep the
proiection room fire safe, by only keeping, in the projection room, those materials used
for the certain projection occurring at that time. 0 Cinema hereby waives all claims
against the City for compensation for loss or damage sustained by reason of any
interference with 0 Cinema's operations as a result of any work, repair or inspection
conducted by the City, its agents, employees, and/or contractors.
(j) Subsection 12.1.1 of the Agreement is hereby modified as follows:
12.1.1 0 Cinema shall keep full and accurate accounting books and records
relating to all Operating Revenues and Operating Expenses, all in accordance with
Page 7 of 9
generally accepted accounting principles. 0 Cinema shall give the City's authorized
representatives access to such books and records during reasonable business hours
and upon reasonable advance notice. All books and records shall be made available
on-site at the Facility or electronically. 0 Cinema shall keep and preserve for at least
three (3) years following each Fiscal Year, or for as long as such records are required to
be retained pursuant to Florida Public Records Law (whichever is longer), all sales slips,
rental agreements, purchase order, sales books, credit card invoices, bank books or
duplicate deposit slips, and other evidence of Operating Revenues and Operating
Expenses for such period. In addition, on or before June 1st of each Contract Year 120
days following each Fiscal Year, 0 Cinema shall furnish to the City a line item (i.e., by
categories) statement of Operating Costs and Operating Revenues (and profit or loss)
for the Facility for the preceding Fiscal Year, and including the number of tickets sold
and Events and other uses held, prepared in accordance with generally accepted
accounting principles certified as accurate by 0 Cinema's Chief Accounting Officer or
Chief Financial Officer.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
Page 8 of 9
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their appropriate officials, as of the date first entered above.
FOR CITY: CITY OF MIAMI :.EACH, FLORIDA
ATTEST:
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By: _�
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Rafael . ranado, City Clerk Jim u L. '•ra es, City Manager
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ORATED "
FOR 0 CINEMA: Oy?.,\-7...'....
: r•°°. N ,.L•'•IV`rkIG ARTS TRUST, INC. d/b/a 0
iii '.' �° •-••• . (�IN.EMA, a Florida nonprofit
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ATTEST: / I 0 , f '
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Print Name Print Name
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Date
•
F:\RHCD\$ALL\ECON\$ALL\ASSET\0 Cinema\Commission Meeting 12-12-18\O Cinema Mgmt Agmt Amendment(01-29-19).docx
APPROVED AS TO
FORM & LANGUAGE
Page 9 of 9 & FOR EXECUTION
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City Attorney q/1.044-- Date