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RESOLUTION NO. 2003-25401
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, APPROVING AND
AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A
FIRST AMENDMENT TO THE INTERIM MANAGEMENT
AGREEMENT WITH PROFESSIONAL COURSE MANAGEMENT
II, LTD. (PCM II) TO PROVIDE PROFESSIONAL SERVICES FOR
THE MANAGEMENT OF THE CITY'S NORMANDY SHORES
AND PAR 3 GOLF COURSES; SAID AMENDMENT PROVIDING
FOR A RENT ABATEMENT OF THE MONTHLY RENT AND
EQUIPMENT LEASING PAYMENTS DUE TO THE CITY,
RETROACTIVE AS OF MAY 1, 2003; ELIMINATING THE
REQUIREMENT OF MAINTAINING AND OPERATING THE PAR
3 GOLF COURSE; AND EXTENDING THE TERM OF THE
AGREEMENT FROM SEPTEMBER 30, 2003, AS ORIGINALLY
STIPULATED, TO APRIL 30, 2004, OR IMMEDIATELY UPON
THE CLOSURE OF THE NORMANDY SHORES GOLF COURSE
FOR PLANNED CONSTRUCTION/ RENOVATIONS, WHICH
EVER OCCURS FIRST.
WHEREAS, on September 5, 2001, the Mayor and City Commission
approved an Interim Management Agreement with Professional Course
Management II, Ltd., (PCM II) to provide the professional services for the
management and operation of the City's Normandy Shores and Par 3 Golf
Courses to commence on October 1, 2001, and conclude on September 30,
2003, or immediately upon the closure of the Normandy Shores golf course
for planned construction; and
WHEREAS, at the time the Interim Agreement was entered into, it
was understood that the Bayshore Golf Course would be closed for
construction and Normandy Shores would remain open until the
improvements to Bayshore were completed; and
WHEREAS, salient points of this Agreement included a rent payment
to the City of $6,000 per month; PCM II would operate and maintain the Par
3 Golf Course; and pay the City for approximately 75% of the annual cost of
the maintenance equipment expense until such time as the equipment would
be relocated to the Bayshore Course when it reopened, whereupon the total
cost for the lease/purchase will be the responsibility of the City; and
WHEREAS, as the term of the this Agreement is due to conclude on
September 30, 2003, and the final scope of improvements for the Normandy
Shores Golf Course and clubhouse are still pending, PCM II has offered to
extend the term through April 30, 2004, if the City agrees to abate the
monthly rent of $6,000 and the equipment lease payment of $3,100 per
month, and relive it of the Par 3 operation; all effective retroactively to May 1,
2003; and
WHEREAS, if at the conclusion of this agreement there is a positive
balance at that time the City and PCM II have agreed to negotiate a revenue
sharing that is fair and equitable to both parties; and
WHEREAS, PCM II has also offered to manage the Normandy Shores
golf course, effective May 1, 2004, until the time the golf course closes for
construction free of charge conditioned upon the City paying all operational
expenses; and
WHEREAS, PCM II has made significant improvements and is
maintaining the Normandy Shores Golf Course to the satisfaction of the
citizens and the Administration and is willing to extend this agreement, thus
insuring continuity of professional management of the golf course now and
when it reopens following the improvements; and
WHEREAS, the City of Miami Beach Golf Advisory Board
unanimously recommended approval of this action at its meeting of May 3,
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 a first Amendment to the
Interim Management Agreement with Professional Course Management II,
Ltd., to provide professional services for the management of the City's
Normandy Shores and Par 3 Golf Courses; said Amendment providing for a
rent abatement of the monthly rent and equipment leasing payments due to
the City, retroactive as of May 1, 2003; eliminating the requirement of
maintaining the Par 3 Golf Course; and extending the term of the Agreement
from September 30, 2003,as originally stipulated, to April 30, 2004 or
immediately upon the closure of the Normandy Shores Golf Course for
planned construction/ renovations, which ever occurs first.
PASSED and ADOPTED this
25th
November
2003.
At;:;r ~~
CITY CLERK
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FORM & LANGUAGE
& FOR EXECUTIOH
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CITY OF MIAMI BEACH
COMMISSION ITEM SUMMARY
m
Condensed Title:
A Resolution amending the interim management agreement with Professional Course Management II, Ltd.,
to provide professional services for the Normandy Shores and Par 3 golf courses by abating the monthly
rent and equipment lease payments, eliminating the maintenance of the Par 3 golf course and extending
the term of the agreement through April 30, 2004 or until the Normandy Shores golf course undergoes
construction, which ever occurs first.
Issue:
The current interim management agreement between the City of Miami Beach and Professional Course
Management II, Ltd., for the management of the Normandy Shores Golf Course was originally to terminate
on September 30, 2003. At the time the interim agreement was entered into it was understood that the
Bayshore Golf Course would be closed for construction and Normandy Shores would remain open until the
improvements to Bayshore were completed. It was further understood that Normandy Shores Golf Course
would then close for renovations immediately following the reopened Bayshore Course. The final scope of
improvements for the Normandy Shores Golf Course and clubhouse are still under discussion. Due to the
uncertainty of the golf course's future improvements and to ensure continuity of operations PCM has
agreed to amend the existing agreement term to extend to April 30, 2004, if the City will abate the rent and
lease payments begin on May 1, 2003 through the extended term of the agreement ending on April 30,
2004 and eliminate the reauirement to maintain the Par 3 coif course under this acreement.
Item Summary/Recommendation:
Approve the Resolution amending the interim management agreement with Professional Course
Management II Ltd., to ensure continuity of professional services for the Normandy Shores Golf Course is
maintained until the course is closed for renovations.
Financial Information:
Source of
Funds:
D
Finance Dept.
Ci Clerk's Office Le islative Trackin
Kevin Smith
AGENDA ITEM c..") H
DATE 1/~3
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
www_miamibeachfl.gov
To:
From:
Subject:
COMMISSION MEMORANDUM
Date: November 25, 2003
Mayor David Dermer and
Members of the City Commission
Jorge M. Gonzalez J rr- ()
City Manager
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, APPROVING AND AUTHORIZING THE
MAYOR AND CITY CLERK TO EXECUTE A FIRST AMENDMENT TO THE
INTERIM MANAGEMENT AGREEMENT WITH PROFESSIONAL COURSE
MANAGEMENT II, LTD. TO PROVIDE PROFESSIONAL SERVICES FOR
THE MANAGEMENT OF THE CITY'S NORMANDY SHORES AND PAR 3
GOLF COURSES; SAID AMENDMENT PROVIDING FOR A RENT
ABATEMENT OF THE MONTHLY RENT AND EQUIPMENT LEASING
PAYMENTS DUE TO THE CITY, RETROACTIVE AS OF MAY 1, 2003;
ELIMINATING THE REQUIREMENT OF MAINTAINING AND OPERATING
THE PAR 3 GOLF COURSE, AND EXTENDING THE TERM OF THE
AGREEMENT FROM SEPTEMBER 30, 2003, AS ORIGINALLY
STIPULATED, TO APRIL 30, 2004, OR IMMEDIATELY UPON THE
CLOSURE OF THE NORMANDY SHORES GOLF COURSE FOR
PLANNED CONSTRUCTIONI RENOVATIONS, WHICH EVER OCCURS
FIRST.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
ANALYSIS
On September 5, 2001, the Mayor and City Commission approved an interim management
agreement with Professional Course Management II to provide the professional services for
the management of the City's Normandy Shores and Par 3 golf courses to commence on
October 1, 2001 and conclude on September 30, 2003, or immediately upon the closure of
the Normandy Shores golf course for planned construction.
At the time the interim agreement was entered into it was understood that the Bayshore Golf
Course would be closed for construction and Normandy Shores would remain open until the
improvements to Bayshore were completed. It was further understood that Normandy Shores
Golf Course would then close for renovations immediately following the reopened Bayshore
Course.
Commission Memorandum
November 25, 2003
PCM II, LTD. Interim Agreement Amendment
Page 2
It was projected that the Bayshore Golf Course would be closed on October 1, 2001, in
anticipation of the impending construction and to eliminate the substantial expense of having
to operate and maintain the golf course with a new operator.
It was projected that the Bayshore Golf Course project construction would begin late in 2001
and take approximately twelve (12) months to complete and while it was under construction
the Normandy Shores Golf Course would remain open for play by residents, tourists and day
guests and upon the reopening of the Bayshore course the Normandy Shores course would
close for renovations.
Salient points of this Agreement included:
A payment to the City of $6,000 per month, a total of $72,000 annually.
PCM would also operate and maintain the Par 3 Golf Course for the specified term of
the agreement.
The City will purchase or lease the necessary golf course maintenance equipment
and PCM II will pay the City for approximately 75% of the annual cost of this
maintenance equipment expense.
PCM will comply with the City's golf course maintenance standards as stipulated in
the Agreement.
As the term of this agreement concluded on September 30, 2003, and the final scope of
improvements for the Normandy Shores Golf Course and clubhouse are still under
discussion the administration of Professional Course Management has offered to extend the
term through April 30, 2004, if the City agrees to abate the monthly rent of $6.000 and the
equipment lease payment of $3,100 per month effective May 1, 2003 for the remainder of
the agreement.
o
o
o
o
In a recent meeting with the Administration PCM presented evidence that the Normandy
Shores Golf Course operation will loose money for F.Y. 02/03. Based on a preliminary year
end report PCM projects the operation will lose approximately $169,670 in F.Y. 03. If the
abatement for the period of May - September calculated at $45,500 is approved then PCM's
loss for this fiscal year will be $126,864. Although PCM does not have the final report for the
month of October, 2003, it is their opinion it will show a loss for the period. They anticipate a
modest positive income in November and depending on the season reducing their deficit in
the period of December, 2003 - April, 2004. It must also be clearly stated that if the
conditions upon which this income projection is developed change, such as another down
turn in the economy or a lessening demand for golf, PCM will still be responsible for all
expenses and assume all loss, including any operational deficit that may result from these
changes.
Additionally, PCM and the Administration have agreed to monitor the revenues and
expenditures of the Normandy Shores Golf Course through April 30, 2004, and if there is a
positive balance at that time the City and PCM have agreed to negotiate a sharing of the
proceeds. Professional Course Management has also offered to the manage the Normandy
Shores golf course effective May 1, 2004 until the time the golf course closes for
construction without assessing a management fee conditioned upon the City paying all
operational expenses.
Commission Memorandum
November 25, 2003
PCM II, LTD. Interim Agreement Amendment
Page 3
Professional Course Management has also requested that, due to the substantial
modifications made to the Par 3 golf course including the elimination of the 3rd green due to
the Hebrew Academy construction and soon the elimination of the majority of the 4th tee box,
fairway and green for the construction of the fire station and water tanks project they be
relieved of this responsibility. The opportunity to operate and charge for the use of the Par 3
under these circumstances is negated. The City has assumed the maintenance ofthe Par3
using staff from the Miami Beach Golf Club and the facility is now open for play, free of
charge for our residents to take advantage of. The cost of this is now being paid from the
Miami Beach Golf Club F.Y. 03/04 operational budget as approved by the City Commission
and this authorization will further clarify the reassignment.
Based on the fact the construction schedule and the closure of the Normandy Shore Golf
Course and clubhouse are yet to be determined and PCM is the management company
approved by the City Commission to manage the Normandy Shores Golf Course upon the
completion of the planned renovations, it is the Administration's opinion that it would be a
substantial challenge to issue a bid for the management of the Normandy Shores facility that
would result in a qualified firm responding for what most likely will be a very short period.
PCM has made significant improvements and is maintaining the Normandy Shores Golf
Course to the satisfaction of the citizens and the Administration and is willing to extend this
agreement, thus insuring continuity of professional management ofthe golf course now and
when it reopens following the improvements. It should also be noted that PCM is working
very successfully with the Administration to provide a very high level of professional
management at the Miami Beach Golf Club that is being received very positively by our
residents, tourists, hoteliers and day guests. Accordingly the Administration recommends
that the Mayor and City Commission approve the attached resolution.
JMG/RCMlKS
T:\AGENDA\2003\nov2503\consent\PCM_NORMANDY _Com. Memo_Ammendment_11-25-03.doc