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HomeMy WebLinkAbout2003-25383 Reso RESOLUTION NO. 2003-25383 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN OPERATION AND MANAGEMENT AGREEMENT, BY AND BETWEEN THE CITY OF MIAMI BEACH, FLORIDA, AND PROFESSIONAL COURSE MANAGEMENT II, LTD., FOR THE COMPREHENSIVE MANAGEMENT AND OPERATIONS OF THE CITY'S MIAMI BEACH GOLF CLUB, CLUBHOUSE AND RELATED FACILITIES, IN ACCORDANCE WITH REQUEST FOR PROPOSALS (RFP) NO. 125-99/00; SAID AGREEMENT HAVING AN INITIAL TERM OF THREE (3) YEARS, COMMENCING ON OCTOBER 1, 2003, AND EXPIRING SEPTEMBER 30, 2006, WITH AN OPTION TO RENEW FOR AN ADDITIONAL TWO (2) ONE YEAR TERMS, ON A YEAR-TO-YEAR BASIS, AS PROVIDED IN THE AGREEMENT. WHEREAS, for the past several years the City has been in the process of reconstructing the former Bayshore Golf Course, now known as the Miami Beach Golf Club, and its clubhouse and related facilities, and an integral component of this comprehensive revitalization has been the selection of a new professional golf course management firm to operate the course, as the City's representative when reconstruction was completed; and WHEREAS, in August of 2000 the City initiated a request for proposals process, seeking qualified firms for the comprehensive management and operation of the City's Golf Courses, Clubhouses and Related Facilities (RFP No.125-99/00); and WHEREAS, on November 29, 2000, the Mayor and City Commission accepted the recommendation of the City Manager and authorized the Administration to enter into negotiations with Professional Course Management II, LTD., (PCM), as the top ranked proposer pursuant to RFP No. 125-99/00; and WHEREAS, prior to opening, the Administration entered into an interim professional services agreement with PCM to manage the City's golf courses until completion of said courses; and WHEREAS, as authorized by the Mayor and City Commission, and as the Miami Beach Golf Club is now substantially complete and functionally operative, the Administration has negotiated the attached Management and Operation Agreement, for the comprehensive management and operation of the Miami Beach Golf Club, and its clubhouse, pro shop, and related facilities, to be entered into between the City and PCM; and -'" WHEREAS, the initial Agreement shall be for a three (3) year term, commencing on October 1, 2003, and concluding on September 30, 2006, with the option to renew for an additional two (2) one year terms, on a year- to-year basis; and WHEREAS, the City of Miami Beach Golf Advisory Board unanimously recommended approval of this Agreement at its meeting of September 2, 2003. NOW, THEREFORE, BE IT DULY RESOLVED THAT THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH hereby approve and authorize the Mayor and City Clerk to execute the attached Management and Operation Agreement, by and between the City of Miami Beach and Professional Course Management II, Ltd., for the comprehensive management and operations of the City's Miami Beach Golf Club, and its clubhouse and related facilities, in accordance with Request For Proposals (RFP) No. 125-99/00; said Agreement shall have an initial term of three (3) years, commencing on October 1, 2003, and expiring September 30, 2006, with an option to renew for an additional two (2) one year terms, on a year-to-year basis, as provided in the Agreement. PASSED and ADOPTED this 15th October 2003. JJ:tJ~~ CITY CLERK F:\$ALL\Previous\KEVIN\Commission 2003\Oct.15-03\PCM_MBGC Mgl. Agml. Reso.10-6-03.doc APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION iW1i~ .~ ~ CllY OF MIAMI BEACH COMIIIISSION ITEM SUMMARY to ~ Condensed Title: A resolution executing a Management Agreement between the City of Miami Beach and Professional Course Management II, ltd. for the com prehensive management and operations of the Miam i Beach Golf Club, clubhouse and related facilities in accordance with request for proposals (RFP) no. 125-99/00 for an initial term of three (3) years, commencing on October 1,2003, and expiring September 30,2006, with an option to renew for an additional two (2) one year terms, on a year-to-year basis, as provided in the Agreement. Issue: Shall the City enter into a Management Agreement with Professional Course Management II, ltd., for the comprehensive management of the Miami Beach Golf Club and related facilities, including the maintenance of the Par 3 aolf course? Item Summarv/Recommendation: The Administration and Professional Course Management II, Ltd., have successfully reached consensus on a management agreement, in a form substantially attached, for the comprehensive management and operations of the Miami Beach golf course, clubhouse and related facilities in accordance with request for proposals (RFP) no. 125-99/00. The Agreement shall have an initial term of three (3) years, commencing on October 1, 2003, and expiring September 30,2006, with an option to renew for an additional two (2) one year terms, on a year-to-year basis. All revenues collected from the operation of the Golf Course and related facilities shall be deposited into a City account and operating expenses will be paid from revenue generated. The City shall pay the Golf Course Manager during the initial term and Renewal Term, if any, the amounts described in (a) below. (a) The annual management fee for the performance of the services hereunder with respect to the Fiscal Year for the first year of the initial management term shall be $137,500 + 9% incentive if earned as stipulated in the agreement with adjustments as follows: (i) Year 2 - $125,000 + 10 % incentive if earned; (ii) Year 3 - $125,000 + 10 % incentive if earned; Renewal Term(s) $125,000 + 10 % incentive if earned. Adviso Board Recommendation: Recommended for approval by the Miami Beach Golf Advisory Board at its regularly scheduled meeting of Se tember 2,2003. Financial Information: Source of Amount Account Approved Funds: 1 $137,500 + 10% Parks and Recreation FY 03/04 incentive bonus if General Fund Budget earned. 4 2 ~ 3 4 Fihance Dept. Total City Clerk's Office Legislative Tracking: I Si n-Offs: Department Director T:\AGENDA\2003\oct1503\regular\PC AGENDA ITEM DATE 11I If) ~ 1;>03 . CITY OF MIAMI BEACH CITY HAll 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139 www.ci.miam>-beach.fl.us To: From: Subject: COMMISSION MEMORANDUM Date: October 15, 2003 Mayor David Dermer and Members of the City Commission Jorge M. Gonzalez \ rJIV~ City Manager U 0 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN OPERATION AND MANAGEMENT AGREEMENT, BY AND BETWEEN THE CITY OF MIAMI BEACH, FLORIDA, AND PROFESSIONAL COURSE MANAGEMENT II, LTD., FOR THE COMPREHENSIVE MANAGEMENT AND OPERATIONS OF THE CITY'S MIAMI BEACH GOLF CLUB, CLUBHOUSE AND RELATED FACILITIES, IN ACCORDANCE WITH REQUEST FOR PROPOSALS (RFP) NO. 125-99/00; SAID AGREEMENT HAVING AN INITIAL TERM OF THREE (3) YEARS, COMMENCING ON OCTOBER 1, 2003, AND EXPIRING SEPTEMBER 30, 2006, WITH AN OPTION TO RENEW FOR AN ADDITIONAL TWO (2) ONE YEAR TERMS, ON A YEAR- TO-YEAR BASIS, AS PROVIDED IN THE AGREEMENT. ADMINISTRATION RECOMMENDATION: Adopt the Resolution. ANALYSIS For the past several years the City has been in the process of reconstructing of the Bayshore Golf Course, clubhouse and related facilities. An integral component of this comprehensive revitalization has been the selection of a new professional golf course management firm to operate the course, as the City's representative when reconstruction was completed. In August of 2000 the City initiated the RFP process for the Comprehensive Management and Operation of the City's Golf Courses, Clubhouses and Related Facilities. On November 29, 2000, the Mayor and City Commission accepted the recommendation of the City Manager and authorized the Administration to enter into negotiations with Professional Course Management II, LTD., (PCM) for these services. City Commission Memorandum October 15, 2003 PCM Miami Beach Golf Club Management Agreement Page 2 The reconstruction of the Bayshore Golf Course, subsequently renamed the Miami Beach Golf Club, began in December of 2001 , and was opened on December 17, 2002. Prior to opening the Administration entered into an interim professional services agreement with PCM to manage the golf course until the long term agreement was completed. Attached is the long-term Management Agreement, as proposed in RFP NO. 125-99/00, for the Comprehensive Management and Operation of the City's Miami Beach Golf Course, Clubhouse and Related Facilities to be entered into between the City of Miami Beach and Professional Course Management II, LTD., (PCM). Below is a listing of the salient points of the proposed agreement: 1. Execution Date: Date of adoption by the City Commission. 2. Commencement Date: October 1,2003. 3. Services to be provided: Subject to the terms ofthis Agreement, Golf Course Manager shall have the exclusive right, license, privilege, and duty to operate, manage, maintain, and promote the Golf Course and related facilities in a manner consistent with the City's policies and procedures and the operations of other similar first-class facilities. The scope of services required of the Golf Course Manager under the terms of this Agreement shall include but not be limited to: Overall Golf Course management in accordance with City golf policy: a. Pro shop operations b. Starter services c. Tee-time reservations d. Marshaling Services e. Cart rentals and operations f. Driving range operations g. Food and beverage service h. Grounds/buildings and equipment maintenance to City's specifications and manufacturers' specifications. i. Clubhouse maintenance and operation j. Development of golf training programs k. Booking of national and international golf tournaments I. Securing, execution and monitoring of agreements with Miami Beach hotels for use of the golf course, if approved by the City. m. Collection and accounting of all revenues. n. Payment and accounting of all expenses in a timely manner. o. Formulation and implementation of operating programs, business plans, and budgets. p. Handling of Golf Course and related facilities' personnel including employment, training, and terminations. q. Preparation of monthly and annual financial operating statements. City Commission Memorandum October 15, 2003 PCM Miami Beach Golf Club Management Agreement Page 3 r. Maintain the Golf Course buildings, equipment, utilities, and all appurtenances in conformity with City's specifications and manufacturers' specifications. s. Plan and carry out advertising and marketing program for the Golf Course and related facilities. 4. Term: The initial Agreement shall be for a three (3) year period commencing on October 1 , 2003, and conclude on September 30, 2006, with the option to renew for an additional two (2) one year terms, on a year-to-year basis. 5. Receipts and Disbursements: The Golf Course Manager shall establish and maintain in a bank designated by the City's Chief Financial Officer an operating bank account for the promotion, operation and management of the Golf Course and related facilities in the name of the City, with Golf Course Manager as agent and with signature authority in such employees of the Golf Course Manager as the Golf Course Manager shall determine. All revenues collected by the Golf Course Manager from the operation of the Golf Course and related facilities shall be deposited into such account and Operating Expenses shall be paid by Golf Course Manager as agent for the City from such account. All revenues collected by Golf Course Manager arising from operation of the Golf Course and related facilities are the sole property of the City, held in trust by Golf Course Manager for the City for application as provided herein. Any amounts remaining in said account upon termination of this Agreement for any reason, after payment of all outstanding Operating Expenses, shall be promptly paid by Golf Course Manager to the City. 6. Payment to Golf Course Manager: As consideration to the Golf Course Manager for providing the services herein specified during the initial term and any Renewal Term, the City shall pay the Golf Course Manager during the initial term and Renewal Term, if any, the amounts described in (a) below. (a) The annual management fee for the performance of the services hereunder with respect to the Fiscal Year for the first year of the initial management term shall be $137,500 (the "Management Fee"), which Management Fee shall be adjusted as follows: (i) Year 2 - $125,000; (ii) Year 3 - $125,000; (iii) Renewal Term Year 1 - $125,000; (iv) Renewal Term Year 2 - $125,000. The Management Fee shall be payable in equal monthly installments due on or before the last day of each month during the Fiscal Year, and the Golf Course Manager shall be entitled to draw such amounts from the account base management fee. City Commission Memorandum October 15, 2003 PCM Miami Beach Golf Club Management Agreement Page 4 7. Incentive Fee: In addition to the Management Fee, the Golf Course Manager shall be entitled to, and shall receive from the City, an annual incentive fee with respect to each Fiscal Year during the initial term and Renewal Term, if any, as follows: The Golf Course Manager will be paid the annual incentive fee for the first Fiscal Year (10/1/03 to 9/30/04) of9% of all gross revenues over$1 ,875,000, derived from the Golf Course and related facilities operation. The incentive fee shall increase to 10% for the second Fiscal Year of operations, and 10% for the third Fiscal Year, and each Renewal Term, if any. Gross revenues shall not include gross revenues received by Golf Course Manager as a concessionaire for the food and beverage and pro shop facility (merchandise). Gross revenues will include the 5% concession fee paid by Golf Course Manager to the City for the use of the latter facilities. Golf Course Manager's annual incentive fee will be earned in full provided the "net operating income before debt service" as shown on the approved annual operating budget equals or exceeds $800,000 per year. Should the "net operating income before debt service" be less than $800,000, Golf Course Manager's annual incentive fee shall be reduced proportionately. By example, if the net operating income before debt service is $720,000 (10% less) then Golf Course Manager's annual incentive fee shall be reduced by 10%. In arriving at "net operating income before debt service," there shall be deducted from Golf Course and related facilities gross revenues the ordinary operating expenses as set forth in the annual operating budget approved by the City. Extraordinary operating expenses and/or non-budgeted capital improvements shall not be deducted from gross revenues in determining "net operating income before debt service." 8. Food, Beverage and Pro Shop Concessions: The Golf Course Manager shall also operate the food, beverage and pro shop concessions under the attached concession agreement. The Golf Course Manager shall be responsible for all costs related to personnel, products, materials, insurance and other related expenses; collect all revenues and remit to the City five percent (5%) of gross food and beverage and merchandise sales. Under the management of PCM, the Miami Beach Golf Club is projected to exceed the 2002 - 03 fiscal year revenue estimate of $2,281,000 by approximately $375,000 while the operating expenses are forecast to be within the allocated budget. The Miami Beach Golf Club budget, as approved, projected a deficit of approximately $800,969 which represents debt service for the year. Based on the forecast, the deficit will be reduced by more than 46%. This is a highly commendable achievement considering these results reflect twelve months of operating expenses and only 9Y2 months of revenue generation, (the Miami Beach Golf Club opened December 17,2002). City Commission Memorandum October 15, 2003 PCM Miami Beach Golf Club Management Agreement Page 5 In February the Administration was informed by the Golf Course Architect, Arthur Hills that the Miami Beach Golf Club has been nominated to be included in the Golf Digest magazine's Top 10 New Golf Courses in the United States for 2002. This rigorous analysis is a year long evaluation that will conclude in November with the selection being published in the last annual issue of Golf Digest. To be nominated in itself is a major honor and accomplishment because rarely will Golf Digest consider a reconstructed golf course in this category. In general they will only evaluate new developments in this competition. The fact that they selected the Miami Beach Golf Club as in this category speaks volumes to its quality and playability. The Miami Beach Golf Club continues to receive positive recognition in various media. Examples include two promotional pieces that recently appeared in golf magazines. The first piece was in Links Golf Magazine with a distribution of over 700,000 and the second in Florida Golf Central with a distribution of approximately 75,000. In addition, a video segment focusing on the environmental benefits of using paspalum sod on the golf course was taped to be shown on the National Geographic channel. PCM has worked in partnership with the City through the grow-in and opening of the Miami Beach Golf Club and has successfully demonstrated their ability to manage, operate and maintain the Club to the high standards envisioned by the Commission, Administration or residents and guests when this RFP was issued. Accordingly the Administration recommends that the Mayor and City Commission approve the attached resolution. JMG:RCM:KS ~GENDA\2003lo"'503Veg"""com.m.mO_PCM _ MBGC _Mgt._Agl..'oo /