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HomeMy WebLinkAbout2003-25332 Reso RESOLUTION NO. 2003-25332 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING IN SUBSTANTIAL FORM, AS ATTACHED HERETO, ON SECOND PUBLIC READING, IN ACCORDANCE WITH THE REQUIREMENTS OF SECTIONS 163.3220 - 163.3243 FLORIDA STATUTES, ALSO REFERRED TO AS THE FLORIDA LOCAL GOVERNMENT DEVELOPMENT AGREEMENT ACT, A DEVELOPMENT AGREEMENT BETWEEN THE CITY OF MIAMI BEACH AND THE NEW WORLD SYMPHONY, A NOT-FOR-PROFIT FLORIDA CORPORATION, FOR THE DESIGN, DEVELOPMENT AND CONSTRUCTION OF THE SURFACE PARKING LOTS, BOUNDED BY 17TM STREET TO THE NORTH, NORTH LINCOLN LANE TO THE SOUTH, WASHINGTON AVENUE TO THE EAST AND PENNSYLVANIA AVENUE TO THE WEST, FOR DESIGN, DEVELOPMENT AND CONSTRUCTION OF AN APPROXIMATELY 50,000 SQUARE FOOT EDUCATIONAL, PERFORMANCE AND INTERNET BROADCAST FACILITY WITH AN EXTERIOR SCREEN ("SOUNDSPACE"), AND AN APPROXIMATELY 320-SPACE (+/-) PUBLIC PARKING GARAGE FACILITY; FURTHER APPROVING SAID DEVELOPMENT AGREEMENT SUBJECT TO AND CONTINGENT UPON THE PARTIES' RESPECTIVE BOND COUNSEL'S REVIEW OF THE AGREEMENT AND THE GROUND LEASE AGREEMENT BETWEEN THE PARTIES; SAID REVIEW TO BE ON AN EXPEDITED BASIS. WHEREAS, concurrent with completion of the first phase of the 17th Street Master Plan study by Zyscovich, Inc., in October, 2001, (Master Plan), the Administration has been in negotiations with the New World Symphony (NWS) regarding its proposed lease of an approximately 50,000 square foot parcel of land, to be identified on a portion of the 17th Street Surface Parking Lots, to accommodate the development and construction of an approximately 50,000 square foot educational, performance, and internet broadcast facility with an exterior screen, and an adjacent 320-space (+/-) public parking garage; and WHEREAS, concurrent with the negotiation of the aforestated Development Agreement, the City and the NWS have also negotiated a Ground Lease Agreement regarding NWS' proposed lease of an approximately 50,000 square foot educational, performance and internet broadcast facility with an exterior screen, referred to as "SoundSpace"; and WHEREAS, concurrent with the negotiations, the NWS has and continues with its outreach initiative, scheduling meetings with various Citywide committees to advise on the Symphony's expansion plans and to obtain community input relative to the proposed Project; and WHEREAS, since January, 2003, NWS has presented its plans and proposed terms before the Cultural Arts Council, the Lincoln Road Marketing Association, the Convention Center Advisory Board, the Tuesday Morning Breakfast Club, the Parking and Transportation Committee, the Land Use and Development Committee and the Finance and Citywide Projects Committee; and WHEREAS, on July 2nd , 2003, the City Commission voted to expand the scope of the Development Agreement to encompass the east surface lot as well, in order to provide the NWS' Architect, Gehry Partners, with greater flexibility in the design of the Project; and WHEREAS, on July 16, 2003, the Finance and Citywide Projects Committee voted to support the Project subject to certain conditions, including: 1. the Development Agreement defines the minimum level of investment by the NWS relative to the hard construction costs of the Project; 2. that the Project's Architect will endeavor to maximize the number of parking places in the design and layout; and 3. that further consideration be given to the City's proposed level of investment in NWS' parking component; and WHEREAS, the Agreement defines the minimum level of investment by the NWS relative to the hard construction costs of the Project as $40 Million, inclusive of furnishings, fixtures and equipment; and WHEREAS, pursuant to an analysis of comparable parking structures, the City has determined that its maximum contribution associated with the construction of the estimated 320-space parking facility, shall not exceed $12,250 per space plus 12.5% for soft costs (inclusive of any Prevailing Wage requirements and all site development costs, permit and concurrency fees), subject to annual CPI escalations; and WHEREAS, on July 30, 2003, following a duly noticed Public Hearing, the Development Agreement was approved by the City Commission on first reading; and WHEREAS, the Administration would herein recommend that the Mayor and City Commission approve the attached Development Agreement, in substantial form, subject to and contingent upon the parties' respective bond counsel's review of said Agreement and the Ground Lease Agreement. NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby approve in substantial form, as attached hereto, on second public reading, in accordance with the requirements of Sections 163.3220-163.3243, Florida Statutes, also referred to as the Florida Local Government Development Agreement Act, the attached Development Agreement between the City of Miami Beach and the New World Symphony, a Florida not-for-profit corporation, for the design, development and construction of the surface parking lots, bounded by 17~ Street to the north, North Lincoln Lane to the south, Washington Avenue to the east and Pennsylvania Avenue to the west, for construction of an approximately 50,000 square foot educational, performance, and internet broadcast facility with an exterior screen ("Soundspace"), and an approximately 320-space (+/-) public parking garage facility; further approving said Development Agreement and the Ground Lease Agreement between the parties, subject to and contingent upon the parties' respective bond counsel's review of the Agreement, said review to be on an expedited basis. PASSED and ADOPTED this lOth day of September. 2003. / V~- MAYOR AT'lEST: . ,, CITY CLERK JMG:CMC:kob T:V~,gend a~003~spe03~NWS_DevA~lreement_res.doc FORM & LANGUAGE &l:O~ EXI~GUllOH Condensed Title: CITY OF MIAMi ~EACH COMMISSION ITEM SUMMARY IA Resolut on approving in substantial form on second and final reading, the proposed Development Agreement between the City of Miami Beach and New World Symphony, a not-for-profit organization, for the development of the surface parking lot bounded by 17th Street to the north, North Lincoln Lane to the. south, Wash ngton Avenue to the east and Pennsylvania Avenue to the west; further approving said Development Agreement subject to and contingent upon the parties' respective bond counsel review and approval of the Ground Lease Agreement. Issue: Concurrent with completion of the first phase of the 17th Street Master Plan study (Master Plan) by Zyscovich, Inc., in October, 2001, the Administration has been in negotiations with the New World Symphony (NWS) regarding its proposed lease of a portion of the 17tn Street Surface Parking Lot to accommodate its Soundspace design concept (the Project). In accordance with the provisions of Ordinance No. 92-2783 (Shapiro Ordinance), the lease of any City- owned property for a period of more than five years, including option years is subject a public hearing process, a planning analysis, a public bidding requirement and appraisal requirements. The Development Agreement was approved on first reading by a 6-tol vote at a Public Hearing held on July 30, 2003. This Resolution calls for approval of the Development Agreement on second and final reading. A separate Resolution calls for approval of a Lease Agreement between the City and the NWS and authorizes the City Commission to waive, by 5/7th vote, the competitive bidding and appraisal requirements. Item Summary/Recommendation: IThe Administration recommends approving, on second and final reading the proposed Development Agreement between the City of Miami Beach and New World Symphony. Advisory Board Recommendation: Cultural Arts Council - March 7, 2003 Lincoln Road Marketing Association - March 11, 2003 and July 8, 2003 Convention Center Advisory Board - April 29, 2003 Transportation and Parking Committee - May 13 and June 3, 2003 Land Use and Development Committee- July 14, 2003 Finance and Citywide Projects Committee -April 21, June 17 and July 16, 2003 Town Hall Meeting - July 29, 2003 City Commission Public Hearing - July 30, 2003 -'inancial Information: Amount to be expended: Source of i~ ~ ~1,,.~ ~ n-Offs: T:~AGENDA~2003\Septl0\regular~NWS_Agreement_suml~dc~ CITY OF MIAMI BEACH CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139 · ~ www.d.miami-beach.fi.us ~ To: From: Subject: COMMISSION MEMORANDUM Date: September 10, 2003 Mayor David Dermer and Members of the City Commission Jorge M. Gonzalez~~..,~/"'"'~' City Manager A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING IN SUBSTANTIAL FORM, AS ATTACHED HERETO, ON SECOND PUBLIC READING, IN ACCORDANCE WITH THE REQUIREMENTS OF SECTIONS 163.3220 - 163.3243 FLORIDA STATUTES, ALSO REFERRED TO AS THE FLORIDA LOCAL GOVERNMENT DEVELOPMENT AGREEMENT ACT, A DEVELOPMENT AGREEMENT BETWEEN THE CITY OF MIAMI BEACH AND THE NEW WORLD SYMPHONY, A NOT-FOR-PROFIT FLORIDA CORPORATION, FOR THE DESIGN, DEVELOPMENT AND CONSTRUCTION OF THE SURFACE PARKING LOTS, BOUNDED BY 17TM STREET TO THE NORTH, NORTH LINCOLN LANE TO THE SOUTH, WASHINGTON AVENUE TO THE EAST AND PENNSYLVANIAAVENUE TO THE WEST, FOR CONSTRUCTION OF AN APPROXIMATELY 50,000 SQUARE FOOT EDUCATIONAL, PERFORMANCE AND INTERNET BROADCAST FACILITY WITH AN EXTERIOR SCREEN ("SOUNDSPACE"), AND AN APPROXIMATELY 320-SPACE (+/-) PUBLIC PARKING GARAGE FACILITY; FURTHER APPROVING SAID DEVELOPMENT AGREEMENT SUBJECT TO AND CONTINGENT UPON THE PARTIES' RESPECTIVE BOND COUNSEL'S REVIEW OF THE AGREEMENT AND THE GROUND LEASE AGREEMENT BETWEEN THE PARTIES, SAID REVIEW TO BE ON AN EXPEDITED BASIS. ADMINISTRATION RECOMMENDATION Adopt the Resolution ANALYSIS Concurrent with completion of the first phase of the 17~ Street Master Plan study (Master Plan) by Zyscovich, Inc., in October, 2001, the Administration has been in negotiations with the New World Symphony (NWS) regarding its proposed lease of a portion of the 17t~ Street Surface Parking Lot to accommodate its Soundspace design concept (the Project). As envisioned, the proposed 50,000 square foot facility will provide state-of-the-art communication and media capabilities with a 700-seat (+/-) performance space, classroom/educational, rehearsal and broadcast space. In addition to providing a world- renowned, state-of-the-art facility, another focal point for the community, and the basis for considering the facility's location on this site, is that it will incorporate giant video screen(s) on one or more facades of the building, allowing the public to view live and recorded broadcasts from around the world. The Master Plan contemplates situating the facility on the west surface lot, just to the north of the existing NWS Theater on Lincoln Road. On March 11,2003, the NWS announced its hiring of world renowned architect, Frank Gehry September 10, 2003 City Commission Memorandum NWS - Development Agreement Page 2 of 6 of Gehry Partners, to design the Project. Frank Gehry will lead a consulting team that will also include Zyscovich Architects, Nagata Acoustics, Theatre Project Consultants and Donnell Consultants. On January 8, 2003, the Administration referred an item to the Finance and Citywide Projects to specifically address several issues, including but not limited to, the lay-out and design of the proposed facility; the consideration for the ground lease; the amount of the City's contribution towards the design and construction of the parking structure to partially serve the facility's needs; the timing for the construction of replacement parking that will be displaced by the project (City Hall expansion lot); and the configuration and use of the east surface lot. On April 21, 2003, the Administration presented a summary of preliminary terms to the Finance and Citywide Projects Committee, which has served as a basis for negotiations towards a Development and Lease Agreement. At the time, certain key issues identified above were addressed as follows: · Design: the lay-out and design of the proposed facility has not been finalized pending Frank Gehry's review of the site and presentation of optimal siting alternatives. To this end, It should be noted that Gehry Partners will conduct a design workshop at a specially scheduled meeting of the City Commission to present preliminary design options. · Rental: the consideration for the ground lease was discussed and the NVVS proposes non-monetary contributions comprised of direct economic benefits, with an estimated value of approximately $5.7 Million consisting of the following: · Educational contributions- $250,000 · Free public presentations- $280,000 · Smart Card discount program for residents - $4.9 Million · Programming of the projection screens - $200,000 · Free concert for the City- $50,000 Additional indirect economic impacts, include job creation, cultural economic benefits and visitor attraction and spending, in lieu of rental payments. · Brid.qe Tender House: NWS' design team will explore options for relocating the Bridge Tender House from its present location in front of the Wolfsonion Building to a location near or on the development site. NWS will also pay for two full-time positions to staff the facility at an estimated value of $70,000 to $80,000, inclusive of benefits. · Parking Cost: the amount of the City's contribution towards the design and construction of the parking structure to serve the facility's needs, in whole or in part, was discussed and the concept of the City capping its contribution at a fixed total cost and NWS assuming responsibility for any overage due to design or construction risk was supported; · Construction Sequencing: the timing for the construction of replacement parking that will be displaced by the project (City Hall expansion lot) was also discussed and the Administration purported that negotiations contemplated replacement parking being built prior to any displacement on the surface lots; and · Adjacent Lot: the configuration and use of the east surface lot was also discussed September 10, 2003 City Commission Memorandum NWS - Development Agreement Page 3 of 6 and members of the public expressed concern regarding displacing ancillary parking that serves the 300 and 400 block of Lincoln Road. The Committee passed a motion expressing their support for the proposed project and directing Administration to proceed with their efforts of securing a lease with the New World Symphony at a rental rate of one dollar a year plus the in kind economic impacts the City will receive by the completion of said project for a long term lease, contingent on the following: all displaced parking being replaced and additional parking lots/garages being built to accommodate increased parking necessities; the City will operate all new garages as part of the City of Miami Beach Parking Program; and, review by the Transportation and Parking Committee, and the Land Use and Development Committee. Concurrent with the negotiations, the NVVS has and continues with its outreach initiative, scheduling meetings with various Citywide committees to advise on the Symphony's expansion plans and to obtain community input. On July 29, 2003 a town hall meeting was held at the Lincoln Theater where the Project was well received. On June 17, 2003, the Administration provided the Finance and Citywide Projects Committee with an updated term sheet, at which time the cost of parking remained to be negotiated, and it was reported that the intent was to have a Development Agreement drafted in time for the first reading at the Public Hearing which was held during the July 30, 2003 Commission meeting. Commissioner Smith recommended that the Agreement contain a "drop-dead date" provision, requiring that in the event the Project fails to proceed within a specified time frame from the date the NWS takes possession of the site, the site reverts back to the City. In addition, the NVVS should provide evidence annually of its ongoing financial capacity to operate and maintain the Project. Additionally, the Committee asked for the following items: an update concept plan/sketch of the proposed facility and adjacent parking, incorporating the modified parking plan for the east lot with an th t enhanced pedestrian linkage and greenway between 17 Stree and Lincoln Road, a design reflecting compatibility with the area scale and architecture, further community outreach with the area hotels and Lincoln Road businesses/property owners, and an operating pro-forma for Soundspace. From a parking capacity perspective, the NVVS in conjunction with City staff, prepared a parking capacity overview that provided a review of the existing conditions, projected future parking capacity and construction sequencing. The following chart summarizes the most current expectations revising the projected number of spaces at the 17th Street surface lots and reducing the number of projected spaces at City Hall Expansion Garage due to the potential Intermodal Component. The chart does not project the future development of the P-Lot. September 10, 2003 City Commission Memorandum NWS - Development Agreement Page 4 of 6 Parking Lots Existing Number Proposed Number Proposed Number Spaces Spaces (Iow end) Spaces (high end) 17th Street 508 320 400 Surface Lots City Hall 152 450 600 Expansion Garage Total 660 770 1,000 Less: 660 660 Existing spaces: Net Gain of spaces: 110 340 At the City Commission meeting on July 2, 2003, during the setting of the aforementioned Public Hearing, the Commission voted to expand the area scope of the Development Agreement, to encompass both surface lots, thereby providing Frank Gehry, the project architect and designer, a greater degree of flexibility in the design and layout of Soundspace, the parking facility, the green space and other aspects of the proposed Project. Since this time, the Administration has been working with the NWS to finalize the Development and Lease Agreements, addressing the following issues: Pursuant to an analysis of comparable parking structures, the City has determined that its maximum contribution associated with the construction of NWS' estimated 320-space parking facility, shall not exceed $12,250 per space plus 12.5% for soft costs (inclusive of any Prevailing Wage requirements and all site development costs, permit and concurrency fees), subject to annual CPI escalations. NWS will pay for any incremental costs associated with Garage design and construction, thereby mitigating the City's construction risk. If ground floor commercial accessory use/retail space is required, the parties agree to meet and negotiate respective responsibilities. On the July 2 Commission Agenda, there was a referral item to the Planning Board concerning a proposed amendment to the "CCC" Development Regulations to allow for waiver of Development Regulations for parking so no encumbrance of Garage is required. The legislative intent is that all parking displaced by the Project shall be replaced and required parking will be provided. Consideration for this waiver will be NWS' funding for public parking costs in excess of the City's cap. The Planning Board meeting was held on July 29, 2003, where the proposed amendment was not approved. The item was subsequently brought to the City Commission on July 30, 2003, for the first of two public hearings. The Commission voted to open and continue the first hearing to September 10, 2003. On August 26, 2003, the Planning Board did not reach discussion on this item. The actual waiver will be considered at a subsequent meeting. In accordance with the provisions of Ordinance No. 92-2783 (Shapiro Ordinance), the lease of any City-owned property for a period of more than five years, including option years is subject a public hearing process, a planning analysis, a public September 10, 2003 City Commission Memorandum NWS - Development Agreement Page 5 of 6 bidding requirement and appraisal requirements. The Development Agreement was approved on first reading at a Public Hearing held on July 30, 2003. This Resolution calls for approval of the Development Agreement on second and final reading. A separate Resolution calls for approval of a Lease Agreement between the City and the NWS and authorizes the City Commission to waive, by 5/7th vote, the competitive bidding and appraisal requirements. In order for the NWS' plans to proceed, the City must proceed with the construction of the City Hall expansion garage. To this end, on July 30, 2003, the City Commission authorized an amendment to the existing Agreement between URS Corporation-Southern and the City of Miami Beach to provide program management services for the design and construction of a multi-purpose municipal garage facility to be constructed in the parking lot adjacent to City Hall, in an amount not to exceed $1,003,882. CIP is also placing an item on the September 10 Commission Agenda, requesting authorization to proceed with an RFQ for programming and design aspects of the parking facility. To the extent that the City Hall Expansion Garage is not completed by May 1,2007, NWS has requested the ability to proceed with the construction of its Project. Section 3.2(b) of the Agreement defines the minimum level of investment by the NWS relative to the hard construction costs of the Project as $40 Million, inclusive of furnishings, fixtures and equipment. It should noted that during the Public Hearing on July 30, pertaining to the first reading of the Development Agreement, certain members of the public insisted that the NWS should consider locating its project on the surface parking lot located on the west side of the Theater of the Performing Arts. Bernard Zyscovich informed the Commission that this alternative site was not viable for a number of reasons including: · Logistically, it would not work for the New World Symphony as instruments and other equipment would have to be transported between the Lincoln Theater and the new facility. The NWS requires Sound Space to be adjacent to Lincoln Theater. · From an urban perspective it would not work, as one of the main objectives is to create a linkage between the Convention Center and Lincoln Road. Putting Sound Space on the TOPA lot would not achieve this objective. · From an architectural standpoint, Frank Gehry would not be interested in pursuing project that would be constrained between the Convention Center's loading area and the back wall of TOPA. A letter has since been received from Frank Gehry, which further elaborates on the constraints of the alternate site. A copy of this letter will be submitted under separate cover. The City Commission voted six-to-one to approve the Development Agreement on first reading. Since the Ground Lease and Development Agreements have undergone extensive negotiation and numerous revisions up until the submission deadline for this Commission Agenda, it should be noted that the Agreements are being submitted in substantial form, September 10, 2003 City Commission Memorandum NWS - Development Agreement Page 6 of 6 pending final review and approval by the respective parties' bond counsels. This includes a compliance review of the Parking Revenue and Convention Development Tax (CDT) Bond provisions, of which a portion of the proceeds were used to fund the construction of the surface lots. CONCLUSION The Term Sheet summarizing the terms of the Development Agreement is attached to this memorandum as well as an updated economic impact statement. The Administration recommends approval of the Development Agreement in substantial form, as attached hereto, on Second and Final Reading; further approving this Development Agreement subject to and contingent upon the parties' respective bond counsel review and approval of the Agreement. JMG/~C:KOB~ T:~AGENDA~2003~septl 0~.egular~NWS_Agrreme nt_mem.doc Attachment EXHIBIT C Soundspace Impact Statement Revised August 2003 The creation and operation of Soundspace will provide significant benefits to the City of Miami Beach and its citizens. As described below, the returns to Miami Beach, in terms of revenues, jobs, publicity, education, culture, and business opportunities will far outweigh its investment in land, additional parking and, should it be realized, the costs of creating and operating a surrounding park. Soundspace will also provide the New Wodd Symphony with unique opportunities to expand its educational and cultural activities to benefit every citizen of Miami Beach. The most significant of these opportunities include: Soundspace Smart Card Corresponding with the opening of Soundspace, the link with residents of Miami Beach and the cultural community will be a "Smart Card". Working together, the City of Miami Beach and NWS will create a redemption and distribution system for these cards. All cardholders will have frequent, discounted access to selected Soundspace presentations and other Miami Beach cultural venues. The Smart Card program will be publicized prominently in the opening season of Soundspace in hopes that it would become a new and efficient way to promote and track increased attendance for NWS and other Miami Beach cultural organizations. NWS currently presents, and will continue to present over 16 free concerts and 36 paid- admission concerts annually. Soundspace will allow NWS to expand its offerings to the public, including the development of a series of short presentations, ranging from 15 to 20 minutes to as long as an hour, that will combine local live music making with electronic transmissions from all major music centers in this country and around the world. Internet2 also makes it possible to broadcast musical events from other parts of the world that would not necessarily use NWS fellows and coaches. Assuming each presentation could be repeated eight times per weekend over ten weekends of the season, this totals 80 new events in the inaugural season of Soundspace. NWS might charge $5 per adult admission to these presentations, but they would be free to Smart Card holders, providing Miami Beach residents up to $280,000 in value annually. Each Smart Card will also hold $50 of value that can be applied for discounts to select ticketed Soundspace offerings. Given the current population, this puts $4.9 million directly into the hands of Miami Beach residents. NWS will work with the appropriate City of Miami Beach departments to incorporate similar discounts to other select cultural organizations to enhance the value of the Smart Card for a citywide marketing effort with trackable annual performance measures. NWS in the Schools NWS currently offers mentoring opportunities to students in Miami Beach schools with programs such as the Music Mentor Program, In-School Performances and Instrumental Coaching Sessions. Area elementary and middle schools often host In-School Performances while NWS fellows frequently coach students at Miami Beach Senior High. The use of Internet2 by NWS in master classes and concert settings provides students with greater accessibility to artists and composers around the world. In preparation for the opening of Soundspace, NWS proposes to meet with representatives of every Miami Beach school to develop customized educational programs for the benefit of their students. Using the worldwide reach of Internet2, Soundspace will provide Miami Beach students with greater access to artists and teachers from around the world. Skill- based instrumental training, broader work in the social context of artistic activity, and exposure to cutting edge technology will stimulate the imaginations of each and every student in the Miami Beach school system. These activities will take place in Soundspace as well as in the individual schools. The commitment of NWS resources for these programs will exceed $250,000 annually. Video Programming for Park NWS is prepared to provide regular video programming for the park throughout the year. This programming will take many formats, from broadcasting entire NWS concerts and portions of concerts, to special events and other creative video presentations. Programming for the park will also feature other cultural organizations, local to international, and can include anything from dance to film to other forms of musical and visual art presentation. The commitment of NWS resources for this programming will be at least $200,000 annually. The City of Miami Beach will work with NWS to develop specific seasonal events programming by other Miami Beach cultural organizations, at their expense, particularly for the summer season, whether or not such programming actually includes NWS. Concerts for the City With the opening of Soundspace, NWS would be pleased to provide at least one full orchestra concert annually for the direct benefit of the City of Miami Beach. Whether this takes the form of a holiday concert for Miami Beach residents, a special concert for City employees, or is part of a major joint promotional and/or fundraising event for Miami Beach's cultural arts program(s), the possibilities are endless. Based on fees NWS commands for performances while on tour, each such concert is worth at least $50,000 to the City. Bridge Tender House As currently envisioned, the Bridge Tender House is to serve as a central place for the public to obtain information about, and/or purchase tickets to events being held by Miami Beach-based cultural organizations. NWS' architect will explore options for locating the Bridge Tender House on or near the development site. Regardless of the selected location, NWS will provide the necessary professional staff to operate the Bridge Tender House during regular opening hours, to be mutually decided upon with the City. NWS will work with the City and other cultural organizations to identify a corps of volunteers that could serve as additional support staff. Assuming the Bridge Tender House is open from noon to midnight seven says a week, two full-time positions would be valued at $70,000 to $80,000 annually, inclusive of benefits. All other operating expenses of the Bridge Tender House - utilities, maintenance, insurance, etc. - will remain the City's responsibility. Leveraging NWS Investment in its Technology Infrastructure There are multiple opportunities for the City to utilize NWS' planned technology infrastructure in ways that would directly benefit the City and its employees. These opportunities could include: · Using Soundspace as a venue for City employees to participate in remote seminars or other professional development sessions at least two to four times annually without the payment of any rental fee (direct out-of-pocket costs incurred in connection with such uses shall be paid by the City). An example of this might be having the City's Fire and Police Departments participate in training courses provided by the federal Department of Homeland Security without the City having to incur the expense of sending personnel to another city. Another example would be providing broader participation to City employees at conferences around the country, again without the cost of travel, hotels and per diem for each person. These opportunities will be subject to the scheduling needs of NWS. Since these are opportunities that must be explored, their value cannot be quantified at the present time. · Using Soundspace as an enhancement to the Convention Center and incorporating it into the Convention Center's marketing materials as appropriate. Clients desiring or requiring sophisticated Internet and video capabilities will have the opportunity to rent Soundspace. This will increase opportunities for the Convention Center to attract more business that either might go elsewhere, or require significantly higher costs for equipment rental. The value to the city can be measured in terms of additional convention business. · Upgrading the City's IT infrastructure capacity at far less than market value. NWS could make available to the City the extremely high bandwidth capacity planned for Soundspace. This capacity will be measured in multi-gigabits, possibly at the OC12 or higher level. This will provide an opportunity for the City to link its IT system to the Internet via NWS' connection. While there would still be investment by the City for its own equipment and making the connections to NWS, the bandwidth costs will be a fraction of what they otherwise would be if the City were to purchase the same capacity on its own. At current costs, this capacity is easily valued in excess of $100,000 annually. Soundspace will also provide other direct and indirect benefits to the City of Miami Beach. These include: Economic Impact · NWS will invest a minimum of $40 million in the construction of Soundspace. The construction phase will generate additional jobs and income for the local community. NVVS will partner with the City of Miami Beach to explore, develop, purchase, and maintain appropriate RIMS II Multipliers from the US Department of Commerce, Bureau of Economic Analysis in order to calculate the annual impact this project will have on the local economy. Using published multiplier statistics for estimating economic value based on local spending, NWS' current operating expenditures of $7.3 million supports close to 300 full-time equivalent jobs in the Miami-Dade County region generating personal income of nearly $7 million, and over $300,000 in direct local government revenue each year. Much of this impact accrues directly to Miami Beach. Once constructed, Soundspace will increase NWS' operating budget by close to $2 million annually, creating over 75 new jobs and nearly $2 million in personal income for Miami-Dade and increasing government revenues proportionately. These figures do not include the impact of audience ancillary spending, which is discussed below. NWS already brings over 20,000 visitors to Miami Beach each year to experience live concerts. While a certain amount of concert activity will shift from the Lincoln Theatre to Soundspace, overall concert activity will increase. NWS expects the new facility to have a positive affect on concert attendance, by drawing more local residents and an increased number of visitors. To be designed by a world-renowned architect, the facility itself will become a destination for many people. According to the "2001 Profile of Visitors to Greater Miami and the Beaches," published by the Greater Miami Convention and Visitors Bureau, South Beach ranks as the #1 destination for all visitors to South Florida. Using statistics published by the GMCYB, a modest increase of 10,000 visitors could generate in excess of $2 million in additional visitor spending on lodging, meals, transportation, entertainment and shopping per year, more than half of which would likely be spent directly on Miami Beach. American's for the Arts June 2002 publication "Arts & Economic Prosperity" identified cultural tourists as being far more lucrative to local markets than traditional tourists - they spend nearly 40% more, are more inclined to use hotels and stay longer, and are more likely to shop. Using these figures, the 10,000 additional visitors cited above could generate significantly more additional visitor spending than as calculated using GMCVB statistics. · The national American's for the Arts study cited above was based on in-depth market research in 91 communities nationwide, including Miami-Dade County. According to the Miami-Dade County Cultural Affairs Council, the 128 Miami-Dade based, non-profit cultural organizations generate economic activity - including the value of voluntary services and capital expenditures - of $2.69 for each dollar they spend. Using this multiplier, Soundspace should generate nearly $100 million in economic activity during its construction and first year of operation and over $5 million annually thereafter. While recognizing that Miami Beach is already a well-established tourist destination, it is instructive to note that the activities of the Guggenheim Museum in Bilbao generated a four-fold increase in direct tourist expenditures, area GDP and jobs for the Basque Country in 1997, the year the facility opened, and this increased level of economic impact has been sustained each succeeding year. Bilbao has now become a major tourist destination. Given the number of visitors to South Florida and the percentage that cite South Beach as their #1 destination, even a modest increase in the number of visitors to South Florida will provide substantial and direct benefits to the economy of Miami Beach. It is not difficult to argue that South Beach will see its share of domestic and international visitors increase substantially more than cited above once a signature building is constructed. If a park is constructed to surround a Soundspace fitted with a giant exterior screen, the local economy will receive a further boost, as park activities and screen broadcasts will draw more and more people to the northern edge of the Art Deco District, directly benefiting the merchants and restaurants in the Lincoln Road area. Publicity The work of an internationally recognized architect designing a signature building should generate articles in the top 50 American and the top 100 international daily newspapers, as well as coverage by all major feature, news, travel, and lifestyle magazines. With each national and international article about Soundspace, Miami Beach will increase its market penetration. This coverage will begin with the announcement of the architect and continue for at least a decade after completion of the building. Press coverage for new music presentation formats will be equally powerful with major musical figures joining New World fellows and guest artists through Internet2 transmissions. Examples of cultural marketing enhancing city and/or regional tourism include the Philadelphia Art Museum, MassMOCA, Boston Museum of Fine Art, and the Guggenheim Museum in Bilbao, Spain. Culture Existing and new Miami Beach arts organizations will have the opportunity to use Soundspace, thereby expanding and enriching their cultural activities. The Lincoln Theatre will also become a more accessible venue for other arts organizations, contributing to the City's reputation as a major arts-friendly community. By shifting certain concert activity to Soundspace, NWS will free up prime dates within the calendar for use by other arts organizations. NWS regularly limits or turns away dozens of organizations each year, from the Miami Symphony Orchestra, the Miami Film Festival and the Florida Philharmonic, to many independent organizations, who at present cannot get some or all of the dates they want due to NVVS activities. NVVS would be pleased to work with the City of Miami Beach to offer reduced rental rates at the Lincoln Theatre for small or emerging arts organizations as part of the City's cultural facilities management program. Business The City of Miami Beach and the Convention Center will have access to Soundspace for an agreed number of events per year. No other city government or convention center will have access to media as powerful as Internet2. NWS, the City, the Convention Center, and the Greater Miami Convention & Visitors Bureau can work together to market the destination bringing leaders in all fields to selected events in the Soundspace facility. Convention related events could be staged each year to promote the Center to potential clients and/or add value to the conventions that choose Miami Beach. The first use allows the Convention Center to increase its visibility without the cost of staff travel. The second addresses the ever increasing demand for high speed, high quality communications, branding the Miami Beach Convention Center one of the most unique in America. NWS will collaborate with the City of Miami Beach, Convention Center, and the Greater Miami Convention & Visitors Bureau to create a strategic business plan to incorporate Soundspace into future convention proposals. Summary NWS will invest at least $40 million in the building and development of Soundspace, and increase its operating budget by an estimated $2 million annually. Rapid improvement in technology will require steady high-cost capital and operating investment. Standard economic analysis demonstrates that the impact these investments will have on the local economy will be significant. This commitment of resources by a cultural institution is unprecedented in Miami Beach. If NWS is to make the most of this opportunity going forward, we need the City of Miami Beach to be a full contributing partner. The returns to Miami Beach, in terms of revenues, jobs, publicity, education, culture, and business opportunities will far outweigh its investment in land, additional parking and, should it be realized, the costs of creating and operating a surrounding park. il ATTACHMENT 4 - OPERATING PROFORMA I I Itl ~ ~1 o o _o o1~1 o o o o o olol oll oll I o~e[ ~ ~'~' ~'~' ~' ~ I 568 OwnedLandlord: Developer/Tenant: Developer NE (Designers): Developers Corporate Status: Development Site: Project Site: Legal Descriptions: Project Description: TERM SHEET Revised September 3, 2003 City of Miami Beach New World Symphony (NWS) Frank Gehry (collaborating w/Bernard Zyscovich) Key Man Clause has been included (Section 26.20 of Development Agreement) 501 (c)(3) the two (2) surface parking lots, bounded by 17th street to the north, North Lincoln Lane to the south, Washington Avenue to the east and Pennsylvania Avenue to the west, defined as "Development Site" and collectively includes: "Land", "Garage Property" and "Adjacent Property". · "Land" is defined as land and air rights under Ground Lease for Soundspace project. · "Garage Property" is the land under the public garage facility within the Project. · "Adjacent Property" is the undeveloped portion of the site adjacent to the Land and Garage Property. · "Premises" is collectively the Land and Tenant Improvements. · "Landlord's Improvements" are defined as Garage, Infrastructure Improvements and City Hall Parking Expansion collectively. · "Project" is defined as Developer's Improvements and the Garage. Defined as Land and Garage Property. Actual legal description(s) for Soundspace and Public Garage ("Project") to be finalized upon approval of Project Design. (Recitals of Development and Lease Agreement). Approximately 50,000 sf. footprint for "Soundspace", an approximately 700 seat educational, performance & internet broadcast facility with an exterior screen ("Tenant Improvements"). (Programming of screen addressed in Section 6.5 of Lease) Approximately 320+ space parking garage facility ("Garage Property"). Designers will look aggressively at ability to add additional floor of parking in an effort to mitigate any net loss of parking in surface lots. (Section 2.2 of Dev. Agrmt.) Designers will provide Project Concept Plan(s) looking at optimal siting alternatives within the Development Site, utilizing its best efforts to (i) minimize any net loss of public parking within the Development Site, (ii) enhance pedestrian linkages between 17th Street and Lincoln Road, and (iii) optimize compatibility with existing area scale and architecture. (Section 2.2 of Dev. Agrmt.) Project Cost/Responsibilities: Soundspace: Parking: Parking Operations: Minimum Hard cost contribution of $40 million inclusive of F, F & E - NWS to design and construct on ground lease w/City. (Section 3.2.6 of Dev. Agrmt.) City will fund $12,250/per space plus 12.5% for soft costs (inclusive of any Prevailing Wage Requirements and all site development costs, permit and concurrency fees), subject to annual CPI escalations, (annual CPI capped at 5% after May 30, 2007, if building permit has not yet been obtained), as maximum contribution from City of Miami Beach for an estimated 320 spaces (with potential to maximize number of spaces). NWS will design and construct/CMB to own/operate as public municipal garage. NWS will pay for any incremental costs associated with Garage construction and design, thereby mitigating construction risk. (Section 23.2 of Development Agreement) City will own and operate garage at City set rates. Commercial Accessory Use: A stand alone garage with frontage on street may require that 1st floor frontage is occupied by commercial accessory use i.e. retail, etc. Parties Development Agreement Term: Ground Lease Term: Parking Requirements: Construction Sequencing Construction Staging: agree to evaluate optimal frontage uses when preliminary plans and specs are finalized and apportion the parties' responsibilities to build to the extent the frontage is not incorporated into the project. (Section 6.1 of Dev. Agrmt.) Not to exceed 10 years from commencement date, and may be mutually extended by parties. (Section 26.19 of Dev. Agrmt.) 55 years from completion; four 10 year renewal options (Article 2 of Lease Agreement) City will propose amendment to CCC Development Regulations to allow for waiver of Development Regulations for parking so no encumbrance of Garage is required. (Note: The Legislative intent is that all parking shall be replaced and required parking will be provided.) Consideration for waiver will be NWS' funding for public parking costs in excess of City cap. (Not included in either Agreement) Commencement: - Replacement parking must be built before displacement of either parking lot for construction of garage. The City Hall Expansion Garage, must be built and completed, or an alternate acceptable replacement parking location(s) must be identified, prior to NWS's commencement of Garage and Developer Improvements. However, if the City Hall Expansion Garage is not substantially complete by May 30, 2007, NWS may proceed with possession/construction of the Developer Improvements, conditioned on the NWS having obtained a building permit and having issued a notice to proceed to its Contractor, and the City would agree to identify an alternate acceptable replacement parking locations (for instance, by segregating spaces within the P-lot. (Section 23.1.3 of Dev. Agrmt.) Construction staging for the Project will be confined to the Project site and construction workers will park at off site location, thereby not impacting current users in 17th Street Garage or adjacent lots. (Section 5.5 of Dev. Agrmt.) Art in Public Places (AIPP): Public Space in Soundspace: Underground Utilities: Construction/Permitting: Commencement Date: Preliminary Master Plan: Project Concept Plan: Project Design: Preliminary Plans and Specs: Plans and Specs: Building Permit: Possession Date: Construction Completion: As the proposed Project constitutes private use on public land, the AIPP 1%% will apply to NWS project construction cost (per proposed revisions to Ordinance). However, as provided in the AIPP Ordinance, NWS may seek a waiver of all or a portion of the required appropriation from the City Commission. (Section 5.1 of Development Agreement) NWS agrees to create a public component to the facility which educates the public on its use and provides the public with a visitor attraction even when the facility is not being utilized or a performance is not programmed. (Section 5.1 of Development Agreement) Developer will relocate any underground utilities on the Development site, if necessary. Parties agree to design and construct certain "Infrastructure Improvements" such as streetscape, etc. to be mutually agreed upon by the parties. (Section 23.1.2 of Development Agreement) Execution Date of Agreement Attached to Dev. Agreement as Exhibit D NWS will submit alternative Project Concept Plan no later than February 10, 2004 to be reviewed by Planning Board and approved by City Commission; (Section 2.2 of Development Agreement) Approved alternative project concept plan to be approved the later of 12 months from Planning Board recommendation or October 1,2005. (Section 2.2 of Development Agreement) To be submitted within 16 months of approval of Project Design for DRB approval. (Section 2.3 of Development Agreement) To be submitted 14 months from DRB approval. (Section 2.4 of Development Agreement) One year from DRB approval but in any event no later than 7 years from Commencement Date (Section 4.3 of Lease and Section 2.4 of Development Agreement) City commences operation of City Hall Expansion Garage or May 30, 2007, whichever is earlier. (Section 2.5(d) of Development Agreement) No later than 10 years from Commencement Date, subject to unavoidable delays. "Completion Deadline" as defined in Development Agreement. Base Rent: $1/year. (Section 3.2 of Lease Agreement) Public Benefits: Real Estate Taxes: Bond/Finance Requirements: Change in Use: Prohibited Uses: Environmental Matters: NWS commits to provide the attached public benefits (Exhibit "C" to Lease Agreement) In the event Ad Valorem taxes are assessed, NWS will be obligated to pay as to Tenant Improvements but not as to Land (Section 3.3 of the Lease Agreement) Subject lots were improved utilizing County/City funding (TECCA; Convention Center and Parking Revenue Bonds). The proposed project is private use, and there is no adverse impact on the 'bond covenants and the tax exempt status of the bonds as there is no payment for use of the land. (Section 3.5 of Lease Agreement) If NWS ceases to operate Soundspace for the purposes contemplated under the Development Agreement and Ground Lease, or moves its principal place of business and operation from the City, an acceptable substitute public use will be mutually agreed upon by the parties or the facility will automatically revert to City, for public purpose use. (Article 6 of Lease Agreement) NWS shall in no way use the facility for any purpose/use that would impair status/integrity of this and other public funds initially used to improve the lots. (Section 6.4 of Lease Agreement) Any such change in use will be treated as a default under the Ground Lease. (Article 22 of Lease Agreement) Property is leased "as is" and NWS is responsible for any required environmental remediation within their respective portion of the project site. Notwithstanding anything to the contrary contained herein, the NWS shall have the right to terminate the agreement prior to the Possession Date and to terminate the Development Agreement and the Ground Lease prior to the Possession Date because the costs of remediation are, in the reasonable business judgment of the NWS, render the Project economically unfeasible. City will pay for remediation costs in connection with the garage property if parties cannot agree on respective remediation costs, then the Concurrency/Traffic Analysis: Right of First Refusal: Right to Mortgage: Sale, Assignment, Transfer & Subletting: Performance Rentals: Covenant to fund Operations: Agreement can terminate. (Article 31 of Lease Agreement) NWS will be obligated to perform a traffic analysis and mitigate and meet all concurrency requirements. Notwithstanding anything to the contrary contained herein, the NWS shall have the right to terminate the agreement prior to the Possession Date and to terminate the Development Agreement and the Ground Lease prior to the Possession Date, because the Project cannot meet concurrency requirements or the costs of concurrency mitigation are, in the reasonable business judgment of the NWS, render the Project economically unfeasible. (Section 2.6 of Development Agreement) City has the right of first refusal to purchase NWS's interest in the Premises. (To be inserted in Lease Agreement) NWS may mortgage its leasehold interest but cannot encumber City's fee simple interest. (Article 11 of Lease Agreement) No sale, assignment or transfer will be permitted, other than a foreclosure transfer. Subleases permitted only consistent with permitted uses and not permitted without prior written approval of City. (Article 10 of Lease Agreement) Facility may be rented for performances or events by other organizations/corporations without prior written consent of City. ("Sublease(s)" Definition in Lease Agreement) NWS will provide evidence annually of its ongoing financial capacity to operate and maintain Soundspace. NWS must also provide an annual budget prior to the beginning of each fiscal year with a rolling five year projection and an Annual Review by an independent financial professional, acceptable to City. NWS will provide an annual certified audited financial statement. (Proforma attached) (Section 6.3 of Lease Agreement) Performance Bond: Prior to commencement of construction, NWS shall cause G.C. to furnish City with payment and performance bond or Letter of Credit. (Section 2.4(f) & 2.4(g) of Development Agreement) F:\crngr~$ALL\CHRISTIN~IWS TERM SHEET 9-3-2003,doc CITY OF MIAMI BEACH Office of the City Manager Letter to Commission No. ~,~ To: From: Subject: Mayor David Dermer and Members of the City Commission Jorge M. Gonzalez ;,..,- ~----~' City Manager ~ / NEW WORLD sYMPHONY - ALTERNATE SITE - FRANK GEHRY LETTER Date: September 8, 2003 In connection with items R7F and R7G on the September 10, 2003 City Commission Agenda relative to the New World Symphony, attached please find a letter from Gehry Partners, LLP regarding the Alternative Site also known as TOPA Lot. The letter summarizes Frank Gehry's findings and the limitations imposed by the alternate site. If you have any questions, please contact me. JMG\~\rar F:~cmgr~$ALL',LTC -0 3\NW S GehryLetter$.CMC.rar.doc c: Christina M. Cuervo, Assistant City Manager David Kelsey Supplemental Information - 9/10/03 City Commission Agenda Agenda Item Date September 5, 2003 Howard Herring President and CEO New World Symphony 541 Uncotn Road Miami Beach, FL 33139 Via E-mail howardh@nws.org Gehry Partners, LLP Frank Gehry Jim Glymph Randy Jefferson Terry Bell Edwin Chan George Metzger Marc Salettc Craig Webb Dear Howard, After careful consideration of the documents ! received under the David Kelsey cover letter, ! must tell you that limitations of the alternate site make it unacceptable for the following reasons: 1. The visual impact of a structure sited within the Master Plan area is powerful. The building and surrounding developments will be visible from Lincoln Road, Washington Avenue, 17th Street, and the Convention Center. In contrast, the alternate site hides Soundspace from Washington Avenue and Lincoln Road. 2. The alternate site forces Soundspace between two buildings, restricting the number of facades, a needless limitation given the several areas we are considering on the Haster Plan site. 3. On the alternate site, access to the building would be constrained, an especially important fact in light of your desire to make the structure an integral part of the Niami Beach experience for residents and visitors. 4. There should be a rational nexus between Soundspace and Lincoln Road. The program for Soundspace calls for audiences to move directly from Lincoln Road to Soundspace performances. Such an impulse decision demands proximity. Likewise, we want the audience to spit[ onto Lincoln Road after performances. Such a natural flow of foot traffic demands near proximity. 5. There is a functional correlation between Soundspace and the Lincoln Theatre. As I understand the program, the Lincoln Theatre will still be in daily use for rehearsals. Hovement of musicians and instruments across a major thoroughfare to the alternate site makes little sense when the Master Plan site has only Lincoln Lane as a minor barrier. Soundspace is intended to be an extension of the New World Symphony campus. A similar consideration is the size of Soundspace as it is defined. At the further distance of the alternate site, the building will likely be forced to accommodate program functions currently housed in the Lincoln Theatre. Increased size will mean increased construction cost. 6. The screen on the side of Soundspace will be an integral part of the architecture as well as a focal point for the public space surrounding the building. On the alternate slte, such a grand public statement is impossible because there is no outdoor public viewing area. 22541 Beatrice Street, Los Angeles, California 90066 Tel: 310.482.3000 Fax: $I0.482.3006 Gehr~y Partners, LLP 7. We recognize that parking is a major issue in Miami Beach as it is in all urban areas. ! have reviewed the Master Plan and find that It addresses the future parking needs of the City. Ny experience tells me that the fears about parking indicated by the alternate site material are unwarranted. As you know from our past conversations, ! can only undertake a small fraction of the projects proposed to me. ! chose Soundspace because it is building that will influence the future of music, support the important work of the New World Symphony, and have a lasting impact on the City of Miami Beach. You and the City of Hiami Beach are about to make a major Investment in the project. You should give it every chance for success. That begins by giving me the latitude to select a building site as the Master Plan allows, not in a restricted area proposed in the alternate plan. 12541 aeatrice Street, Los Angeles, California 90066 Tel: 310.482.$000 Fax: 310.482.3006 oo-~ 0 ~r U'IU3 0 0 oo o 0 ct Z