LTC 241-2003
CITY OF MIAMI BEACH
Office of the City MaJ;lager
Letter to Commission No. 0/"'-1 ) - bCCJ3
m
To:
Mayor David Dermer and Date: October 6, 2003
Members of the City Commission
Jorge M. Gonzalez a ~
City Manager qv-- 0
NEW WORLD SYM HONY
DEVELOPMENT AND LEASE AGREEMENT AMENDMENTS
From:
Subject:
Pursuant to Commissioner Steinberg's request, below you will find the changes made to
the Development Agreement and the Lease Agreement negotiated with the New World
Symphony during the September 10, 2003 City Commission meeting.
The following amendments have been incorporated into the Development
Aareement:
1. Amended definition of City Hall Parking Expansion to reflect a parking capacity of
450-600 instead of 800 parking spaces.
2. Amended definition of "unavoidable delay" in Development Agreement and Ground
Lease as follows:
"Unavoidable Delays" means delays due to strikes, slowdowns, lockouts, acts of
God, inability to obtain labor or materials, war, enemy action, civil commotion, fire,
casualty, catastrophic weather conditions, eminent domain, a court order which actually
causes a delay (unless resulting from disputes between or among the party alleging an
Unavoidable Delay, present or former employees, officers, members, partners or
shareholders of such alleging party or Affiliates (or present or former employees, officers,
partners, members or shareholders of such Affiliates) of such alleging party), the
application of any Requirement, or another cause beyond such party's control or which, if
susceptible to control by such party, shall be beyond the reasonable control of such party.
Such party shall ,Ilotify the other partynotlaterthan twenty (20}days after such party
knows of the occurrence of an Unavoidable Delay, In noevent shall (i)any party's financial
condition or inability to fund or obtain funding or financing constitute an "Unavoidable
Delay" (except for an Institutional Lender's inability to fund, which inability is not caused by
Developer) with respect to such party and (ii) any delay arising from a party's (or its
Affiliate's) default under this Development Agreement or any of the Construction
Agreements constitute an "Unavoidable Delay" with respect to such party's obligations
hereunder. The times for performance set forth in this Development Agreement (other than
for monetary obligations of a party) shall be extended to the extent performance is delayed
by Unavoidable Delay, except as otherwise expressly set forth in this Development
Agreement.
3. Amended Section 2.2(1) to add:
"maximize public parking and minimize any net loss...", as follows:
-.-.---.----.---.--
Deleted: use reasonable good faith
efforts to
..-
Deleted: ; provided, however, that
either party's failure to notify the other
of the occurrence of an event
constituting an Unavoidable Delay
shall not alter. detract from or negate
its character as an Unavoidable Delay
or otherwise result in the loss of any
benefit or right granted to the delayed
party under this Development
Agreement
October 6, 2003
LTC - NWS - Development and Lease Agreement Amendments
Page 2 of 8
Section 2.2 Proiect Concept Plan Approval
Developer shall submit for review and approval of the Mayor and City Commission
at a regularly scheduled meeting, such Project Concept Plan altematives as Developer and
City mutually agree as deemed necessary. Each submitted Project Concept Plan
alternative shall show, in sufficient detail, the layout and siting. includinq without limitation
preliminary elevations. of the Project, including, but not limited to all buildings or structures,
size of buildinq footprints. number of stories. heiqhts, number of parkinq spaces,
streetscape, infrastructure improvements and other improvements and appurtenances
proposed upon the Project Site. Developer agrees that its Architect will use its best efforts
to (i) maximize public parkinq and minimize anY_I1(3t loss_ Qf ~ubU~ parkil1g _withil1_tbe _ ... fi);;!eted: m~",-"."~_===:J
Development Site; (ii) enhance pedestrian linkages between 1 i Street and Lincoln Road;
and (Hi) optimize compatibilities with existing area, scale and architecture. The Project
Concept Plan alternative review process shall commence with Developer's submission of
all such alternatives to Owner, through its City Manager, no later than February 10, 2004.
The City Manager shall have forty five (45) Business Days to review the Project Concept
Plan alternatives. The City Manager may, as part of its review, request the submittal of
additional Project Concept Plan alternatives and/or request modifications to the submitted
alternatives. Upon conclusion of its review, and prior to consideration of all Project
Concept Plan alternatives by the Mayor and City Commission, the City Manager shall
submit all Project Concept Plan alternatives to the Planning Board, for its review and
recommendation which recommendation shall be no later than four (4) months from the
City Manager's approval of Developer's re-submitted Project Concept Plan alternatives, if
applicable. Notwithstanding the preceding sentences, final approval of the selected Project
Concept Plan (such approved alternative, "Project Design") will rest with the City
Commission. In the event that Developer fails to make its submissions timely, City may, at
its sole option and discretion (i) grant Developer a good faith extension for said
submittal(s), or (ii) declare an "Event of Defaulf' pursuant to Article 19 herein, except that,
as to said Event under this Section 2.2 only, Developer agrees to (i) waive any rights it may
have to dispute the Event of Default under Article 22 and, (H) Developer agrees if the Event
of Default cannot be reasonable remedied within thirty (30) days of notice of same from the
City, the maximum cure period allowed by the City shall be ninety (90) days from the initial
notice to Developer. Additionally, should the City Commission fail to select and approve
one of the Project Concept Plan alternatives by the date which is twelve (12) months from
the Planning Board's recommendation of same or October 1, 2005, whichever is later, then
this Development Agreement and the Ground Lease shall automatically terminate and be
of no further force or effect, unless the City Commission deems to grant an extension, atits
sole discretion. In the event of automatic termination of this Development Agreement and
the Ground Lease pursuant to this Section 2.2, each Party shall bear its own costs and
expenses incurred in connection with this Development Agreement and the Ground Lease
and neither Party shall have any further liability to the other.
4. Inserted definition of Preliminary Evaluation 2.3(c) as follows:
Section 2.3 Desiqn of the ProiectlPreliminarv Plans and Specifications.
.(c) Preliminary Design Review Evaluation.
After obtaininq Owner's approval of the Preliminary Plans and Specifications,
as contemplated in subsection (b) above. Developer shall submit an application for a
preliminary evaluation from the DRB. pursuant to the requirements of Section 118-253 of
. Formatted: Font: Not Bold
. Deleted: panguage to be inserted]
October 6, 2003
LTC - NWS - Development and Lease Agreement Amendments
Page 3 of 8
the Miami Beach City Code, as same may be amended from time to time. The preliminary
ORB evaluation shall be for informational purposes only, and shall not constitute a bindinq
ORB approval.
5. Amended Section 2.5(d)(b) to require City Commission approval of alternate
replacement parking instead of approval by Owner, as follows.
Section 2.5 Conditions Precedentto Developer's Commencement of Construction ofthe
Proiect.
(d) Developer shall not Commence Construction of the Project, or any portion
thereof, unless and until: (a) Owner has completed construction and begun operation of
the City Hall Parking Expansion; or (b) altemate replacement parking acceptable to~
City Commission has been identified by Developer; or (c) May 30, 2007, whichever
occurs earlier.
l~ete<!:~~".,-___________J
6. Amended Section 5.5 by removing comma as follows:
Section 5.5 Construction Staoino.
Construction Staging for the Project will be confined to the Project Site. All workers
on the Project Site will park their vehicles at an off-site location, as not to materially impact
users of the 1 th Street Parking Garage,orotheradjacentpublicparkinglots. TheParties --{ Deleted: ,
shall agree upon one or more reasonable off-site locations.
7. Amended Section 3.2(b) that "Developer shall invest or cause to be invested not
less than Fifty Million Dollars instead of Forty Million Dollars."
Section 3.2 Proiect Budoet
(b) Developer hereby covenants and agrees that Developer shall invest or cause
to be invested, not less than Fifty Million Dollars ($50,000.000)jn hard constructioncosts,
including costs of fumishings, fixtures, and equipment (FFE), and machinery for the
Project. The foregoing investment amount shall be exclusive of any financial contributions
by the City including, without limitation, the Garage (Garage Costs) and/or Infrastructure
Improvements, as the latter may be mutually agreed upon by Owner and Developer.
- Deleted: Forty Million Dollars
($40,000,000)
...-..-....-..--...-.-...--..-..-.-..-....-...--.-.--.-
8. Amended Section 6.1 regarding the retail portion of the garage
Section 6.1 Developer's Contributions.
Developer shall provide all of the funds necessary to complete Construction of
Developer's Improvements. Owner shall provide all of the funds necessary to complete
Construction of the Garage, subject to the provisions of Section 23.2.2 herein; provided,
however, that if the inclusion of a retail component to the Garage is required by the ORB,
or other Governmental Authority, then it is in the intent of the Parties that,ownershall not
be responsible for any costs for s:on~tru(;tion ot sai~ retl'lil p()rtLon... and the Parties shall use
best efforts to apportion such costs to a third party.
- Deleted: the
Deleted: and Developer shall
mutually agree upon the
~ ~_ _ ~~p.2.~i~~~~13'!"=,==..- ==
~ Deleted: between the Parties.
October 6, 2003
LTC - NWS - Development and Lease Agreement Amendments
Page 4 of 8
9. Amended "Infrastructure Improvements" definition as follows:
"Infrastructure Improvements" means work to be done by Owner at its sole cost and
expense as a condition of Developer's obligation hereunder to construct the Developer's
Improvements. Owner shall only be responsible for InfrastructureJmprovements as may .
be, agreedupon and approved .by the City Commission jnconnection with Develo-per's-
obligations to construct the Project and the Owner's obligations to construct and operate
the City Hall Parking Expansion.
10. Amended Section 23.2.1 to add that the Developer will maximize public parking and
minimize any net loss of parking and to include language that Developer will use best
efforts to expedite construction and completion of garage and that the intent of parties to
obtain TCO for Garage prior to completion of Developer's Improvements.
23.2.1 Developer shall design and construct, at Owner's cost and expense as
set forth in Section 23.2.2 below, the Garage to be located on the Garage Property, which
Garage shall be of sufficient capacity to accommodate approximately 320 cars.
Notwithstanding the preceding sentence, and as set forth in Section 2.2 herein, Developer
agrees that the design of the Garage will maximize public parkin!:! and minimize any net
loss of public parking within the Development Site and, at in minimum, shall consider the
incorporation of such design elements including but not limited to the addition of an extra
floor. Developer shall use best efforts to expedite the construction and completion of the
Garaqe. The Parties acknowledqe that the timinq of construction and completion of the
Garaqe is critical; therefore. Developer aqrees to and shall. as expeditiouslv as possible.
obtain Substantial Completion of the Garaqe prior to completion of Developer's
Improvements.
11. Section 23.3.1 that dealt with the "Adjacent Property" has been deleted in its
entirety.
12. Amended Section 23.4 will be amended as follows:
Section 23.4 Park.
Owner may develop the Park or, in the alternative, another similar public amenity,
including but not limited to, a pedestrian boulevard or promenade, utilizing all or a portion
of the Adjacent Property, all at the sole cost and expense of Owner. In the event Owner
does develop the Park, or other similar public amenity, Owner shall strive to operate and
maintain the Park or other public amenity at a municipal standard of quality that will ensure
its preservation as a unique and special natural resource for use and enjoyment by all
residents of and visitors to the City and to the Project. Owner will use all reasonable efforts
to advise Developer as to the design and configuration of the Parkorother public amenity"
which shall be pubjecttothereview and approval by theCity of the proposed location,
amenities, layout, design and construction schedule.
13. Amended Section 23.6 as follows:
Section 23.6 The Screen.
Developer shall design, construct and thereafter maintain the Screen, as defined in
Deleted: Work
~ Deleted: mutually
. Deleted: in writing
Deleted: and Developer
. Deleted: T
." ~~I~.~~~~~~y~.~..~~~~.~.
October 6, 2003
LTC - NWS - Development and Lease Agreement Amendments
Page 5 of 8
the Ground Lease, at its sole cost and expense. The Parties shall define their respective
programming and operational responsibilities.with respect to the Screen in an exhibit to the
Ground Lease.
14. Amended Section 5.1 to add and clarify the following:
Section 5.1 Art in Public Places.
(a) Developer shall be solely responsible for the Project's compliance with the
City's Art in Public Places (AIPP) legislation, as codified in Chapter 82, Article VII, Sections
82-536 through 82-612 of the City Code, and as same may be amended. However, Owner
shall reimburse Developer for all funds required to be expended for compliance with AIPP
for the Garage. except for anv AIPP costs with respect to the Excess GaraQe Costs.
15. Amended Section 26.20 as follows:
Section 26.20 "Kev Man" Clause.
TheEarties herein acknowledge that Developer's selection ofGehryPartners,.LLP
as Developer's Architectural Consultant for the Project (hereinafter "Architectural
Consultant") is an integral and primary consideration toward Owner's decision and
incentive to approve and allow the design, development and construction of the Project on
its property, and to negotiate, execute and approve this Agreement and the Ground Lease.
Developer aqrees and acknowledqes that it is the intent of the Owner that the Proiect be
desiqned. recoqnized and accepted as a Frank Gehry buildinq. and Developer shall use its
best efforts to assure that the Architectural Consultant is retained. in whatever manner
necessary. to achieve that intent. The continuing, ongoing and active participation of the
Architectural Consultant is thereby required up to and including Substantial Completion. In
the event that the Architectural Consultant is no longer contractually associated with
Developer, or otherwise ceases to participate in the design, development, and construction
of the Project, then Developer shall immediately notify Owner, and Owner shall have prior
written approval as to any replacement architect or architectural consultant subsequently
offered by Developer.
16. Amended 23.1.2 to track language in definition for Infrastructure Improvements.
23.1.2 As an inducement to Developer to develop and construct the Project,
Owner shall, at Owner's sole cost and expense, design and construct such Infrastructure
Improvements, .as .aqreed to and approved by .the Citv Commission, for and relating to
Developer's design and construction of Developer's Improvements, as set forth herein.
Owner shall undertake and complete the design, development and construction of the
agreed upon Infrastructure Improvements, in such time, order and manner as Owner and
Developer may mutually agree upon. Owner shall not be obligated to fund and/or design,
develop and construct any Infrastructure Improvements that have not been agreed to in
writing by the City.
.- : '( Deleted: p
, Deleted: Ltd.
, Deleted: which
Deleted: shall be mutually agreed to
in writing
~.el~!d: ~~.~_,=-~~~~~.P..=.r_._
October 6, 2003
LTC - NWS - Development and Lease Agreement Amendments
Page 6 of B
The followina amendments have been incorporated into the Lease Aareement:
17. Amended 2.2(a)(iv) to 150 days instead 30 days
Section 2.2 Extension of Term.
(a) Provided Tenant is in good standing under the terms and conditions of
this Lease, and not in default herein, the Term of this Lease may be extended, at the
option of Tenant, for four (4) successive periods often (10) years each, each such period
being herein sometimes referred to as an "Extended Term," as follows:
(iv) In the event Tenant exercises its option under this Article, the
Parties agree in each such case to enter into a Lease amendment setting forth the terms of
such option within 150 days of exercise of such option by Tenant.
18. As it relates to the definition of "Institutional Lender" we have suggested the
following amendment, and NWS will respond if it agrees.
"Institutional Lender" means a Person which, at the time it becomes an
Institutional Lender, is a state or federally chartered savings bank, savings and loan
association, credit union, commercial bank or trust company or a foreign banking institution
[in each case whether acting individually or in a fiduciary or representative (such as an
agency) capacity]; an insurance company organized and existing under the laws of the
United States of America or any state thereof or a foreign insurance company (in each
case whether acting individually or in a fiduciary or representative (such as an agency)
capacity]; an institutional investor such as a publicly held real estate investment trust, an
entity that qualifies as a "REMIC" under the Internal Revenue Code of 1986, as amended. ..
(in each case whether acting as principal or agent); a brokerage or investment banking
organization [in each case whether acting individually or in a fiduciary or representative
(such as an agency) capacity as principal or agent]; an employees' welfare, benefit,
pension or retirement fund; an institutional leasing company; a financing subsidiary or
division of a New York Stock Exchange listed company; any governmental agency or entity
insured by a governmental agency or any combination of Institutional Lenders; provided
that each of the above entities shall qualify as an Institutional Lender only if (at the time it
becomes an Institutional Lender) it shall (a) have assets of not less than [One Hundred
Million Dollars ($100,000,000)] adjusted for inflation and (b) not be an Affiliate ofTenant (it
being further agreed that none of the standards set forth in this definition shall be
applicable to participants or co-lenders in a loan secured by a Mortgage which is held by an
Institutional Lender [whether acting individually or in a fiduciary or representative (such as
an agency) capacity],
19. Amended Section 6.1 (b) by deleting restaurants and clarifying the following:
Section 6.1 Use
(b) Scope of Use. In accordance with Tenant's obligations to meet and comply with the
maintenance and operating standards set forth in this Lease, including its obligation to
provide Public Benefits described on Exhibit C, Tenant shall, from and after the Project
Opening Date, operate the Premises as a multi-purpose facility for use by Tenant and third
parties (subject to Tenant's approval) for musical, cultural, artistic, educational and other
performances and events, education, interactive cultural experiences, office and
- -(Deleted: thirty (30) J
-.-.--..--..----
-_._._~_.._...._._...._.._....__..._...._..-
Deleted: . or other public or private
investment entity
, Deleted: The term "Institutional
" Lender" also includes an Affiliate of
an Institutional Lender as described in
this paragraph.
October 6, 2003
LTC - NWS - Development and Lease Agreement Amendments
Page 7 of 8
administrative use related to the uses of the Premises, meetings, rehearsals, recording,
multi-media activities, broadcasts, and appurtenant uses at Tenant's option, including but
not limited to,cafeterias for Tenant's students and staff and Landlord's emplovees,snack . .( Deleted: restaurants.
or coffee bars or similar facilities serving food and beverages, gift shops sellinq
merchandise would as customarilv be found in similar facilities, practice rooms,
performance halls, museum, meeting rooms, recording and broadcast facilities, outdoor
and indoor video screens, soundstages, classrooms, libraries, and such other uses as may
be contemplated in connection with providing Public Benefits. Tenant reserves the right to
close or restrict access to any portion of the Premises which are customarily restricted in
similar facilities (such as but not limited to office, administrative and maintenance areas, or
areas subject to subleases or licenses to use a portion of the Premises pursuant to this
Lease), or for reasons of public safety, or in connection with Alterations undertaken in
accordance with the provisions of this Lease, or to such extent as may, in the reasonable
opinion of Tenant's counsel, be legally necessary to prevent a dedication thereof or the
accrual of prescriptive rights to any Person or Persons.
20. Section 6.2 shall be amended to require the parties to negotiate an Operation and
Management Agreement for the screen as follows:
Section 6.2 Operations.
Tenant will bear sole responsibility for operating and maintaining the Premises and
shall retain all income derived therefrom. Similarly, the Landlord shall be solely responsible
for operating and maintaining the Garage, the City Hall Parking Expansion, the Adjacent
Property, and the Park (if applicable), and shall retain all income derived therefrom. Tenant
will collaborate with the City and other arts organizations with respect to their use of the
Screen in accordance with the Public Benefits set forth on Exhibit C. Prior to the issuance
of the Buildina Permit. the Parties shall neaotiate an aareement for the .manageill.!ill1.and
operation includina, without limitation, Jhe ~cheduHnga_n_dc.onJ~nt qf 'pr()gra_mm~n9..fort~e - .
Screen. The Parties aqree that there shall be no commercial advertisinq permitted for .
displav on the Screen. __. __ __ _ __ _ __ _ __ __ - - -- -- - - -- - -- - -- . -- -- - - -- -- - -- - - - -
21. Amend 10.2(d), by adding landlord's sole and absolute discretion and 10.2(d)(i)
Section 10.2 Restrictions on Transfer of the Tenant's Interest in the Premises
(d) Conditions of Consent to Transfer. Following a Recognized
Mortgagee's obtaining title to the Premises pursuant to a Foreclosure Transfer, a
Recognized Mortgagee may not Transfer the Premises to a third party ("Transferee")
without the prior written consent of Landlord, which consent shall be aiven, if at all, at
Landlord's sole and absolute discretion.
22. Amend Section 10.4 by deleting the last two (2) sentences.
Section 10.4 The Qualified Replacement Tenant.
Notwithstanding anything to the contrary contained in this Lease, in exercising its
remedies upon an Event of Default under Section 22.1 (b), Landlord may begin searching
for an appropriate entity to lease and utilize the Premises (the "Qualified Replacement
Tenant"). Landlord shall, however, not enter into any agreement with a Qualified
Replacement Tenant or in any other manner encumber the improvements, the leasehold
Deleted: Subject to the requirements
imposed by the Public Benefits set
forth on Exhibit C
~ Deleted:, Tenant will
Deleted: control
Deleted: . and each party will
othelWise retain control of its own
facilities
October 6, 2003
LTC - NWS - Development and Lease Agreement Amendments
Page 8 of 8
estate or enter into a substitute lease agreement for a period of nine (9) months after the
occurrence of the Event of Default (the "Search Period"). During the Search Period,
Tenant shall be permitted to solicit offers from Qualified Replacement Tenants. Each of
Landlord and Tenant shall negotiate with prospective Qualified Replacement Tenants
during the Search Period in order to produce the best offer for a new lease with Landlord
(the "Best Offer"). Any and all offers shall consist of a list of the qualifications of the
Qualified Replacement Tenant to utilize the Premises in a manner that would meet the
requirements of Section 10.2(d)(i) or (ii). In addition, the offer shall include the amount
such Qualified Replacement Tenant would agree to pay for the Building. ,
23. Amend 10.6 as follows:
Section 10.6Subleasing.
During the Lease Term or Extended Term, if applicable, Tenant shall not have the
right to enter into one or more Subleases havinQ a term of more than one (1) year,
includina renewal terms, without the prior written consent of the Landlord, which consent
shall not be unreasonably withheld or delayed. Tenant shall also not have the riahtto enter
into Subleases havina a term of less than one (1) year. includina renewal terms without the
prior written consent of the Landlord, which consent shall be aiven. if at all. at Landlord's
sole and absolute discretion. As to each Sublease: (i) the terms and conditions of each
Sublease shall be subject to and subordinate to this Lease; (ii) the use of the subleased or
licensed premises shall be solely for the Uses permitted under Section 6.1; (iii) the term of
the Sublease shall be for a period of time less than the Lease Term; and (iv) at the
commencement of each Lease Year, Tenant shall deliver to landlord a current list of all
Subtenants under Subleases. If requested by Landlord, Tenant shall provide to Landlord
copies of all Subleases and amendments thereto.
24. Amend Section 13.3 to delete any reference to the City's obligation to maintain the
City Hall Parking Expansion and adjacent property.
Section 13.3 Maintenance by Landlord.
As an inducement to Tenant to enter into this Lease, Landlord shall maintain the
Garage, jn ~90dconditio.n ancj re~air,irlclucjin~Lt~E'l rTlainte.nan_ce_ qfallland~c:<!~ing _and_ -'
other amenities.
JMG\~'\rar
F:'OT1gr\$AlL\I.. TC-03\NWS Dev&LeaseAgree Amend.CMC.rar.doc
c: Murray H. Dubbin, City Attorney
Christina M. Cuervo, Assistant City Manager
Raul Aguila, First Assistant City Attorney
Deleted: Tenant shall be
compensated up to the total cost and
expense to Tenant of the Building.
Thereafter, the remaining balance of
all payments made by the Qualified
Replacement Tenant to purchase the
Building shall be payable to Landlord.
Deleted: the City Hall Parking
Expansion, and the Adjacent Property