Resolution 2021-31808 2021-31808
RESOLUTION NO._
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, DEDICATING ALL INCREMENTAL REVENUES
RECEIVED BY THE CITY FROM THE SMITH & WOLLENSKY RESTAURANT
OPERATION, PURSUANT TO THE AMENDED AND RESTATED LEASE
AGREEMENT ("LEASE AMENDMENT") AND CONCESSION AGREEMENT
WITH 1 WASHINGTON AVENUE CORP. D/B/A SMITH & WOLLENSKY
RESTAURANT, WITH ALL REVENUES RECEIVED IN EXCESS OF 2021
REVENUES TO BE ALLOCATED FOR PUBLIC SAFETY PURPOSES IN
SOUTH POINTE PARK AND THE SURROUNDING SOUTH OF FIFTH
NEIGHBORHOOD FOR A MINIMUM OF FIVE (5)YEARS OR LONGER, AS MAY
BE DETERMINED BY THE CITY COMMISSION, SUBJECT TO AND
CONTINGENT UPON THE APPROVAL OF THE LEASE AMENDMENT BY A
MAJORITY OF THE VOTERS VOTING IN A CITY-WIDE REFERENDUM
PURSUANT TO SECTION 1.03(B)(1) OF THE CITY CHARTER.
WHEREAS, Smith & Wollensky is a renowned steakhouse with locations in New York,
Boston, Chicago, Columbus, Houston, Miami Beach, Las Vegas, London, and most recently,
Taipei, and the restaurant has been a destination and staple in Miami Beach for several decades;
and
WHEREAS, 1 Washington Avenue Corp. d/b/a Smith & Wollensky ("Smith & Wollensky")
has been the long-term operator for the Smith & Wollensky restaurant located at the City owned
property at 1 Washington Avenue, Miami Beach, Florida (the "Premises"); and
WHEREAS, the Premises consists of a two-story building, constructed in 1987, and
renovated in 1997 and 2017, measuring approximately 24,010 square feet on a 0.56-acre
waterfront site overlooking the Park bay walk, Government Cut, and ocean access inlet that
connects Biscayne Bay to the Atlantic Ocean; and
WHEREAS, the Existing Lease has an initial 20-year term and provides for two (2) 10-
year renewal options: the first renewal term commenced on November 7, 2005 and expired on
November 6, 2015, and subsequently, Smith & Wollensky exercised the second and final renewal
term, commencing on November 7, 2015 that expires over four years from now, on November 6,
2025; and
WHEREAS, in addition to the Existing Lease, Smith & Wollensky has an existing
concession agreement with the City, which allows a food and beverage concession area
located south of the Premises along the cutwalk ("Existing Concession Agreement") that is
intended to run concurrently with the Existing Lease, and the concession area is approximately
581 square feet ("Existing Concession Area"); and
WHEREAS, Smith & Wollensky has proposed a lease amendment to extend the term of
the Existing Lease; upgrade and improve the restaurant facility (including any improvements
required to obtain the 40-year certification for the building); update the financial terms of the
Existing Lease, including increasing the base rent and percentage rent, based on appraised fair
market value; and negotiate other public benefits to the City (the "Lease Amendment");
WHEREAS, additionally, Smith & Wollensky has proposed a new concession agreement
to extend the term of the concession for an additional nine (9) years, commencing on January 1,
2022; increase the concession area; and increase the base rent for the concession area (the "New
Concession Agreement");
WHEREAS, Smith & Wollensky has agreed to the following price proposal for the
restaurant Lease Amendment: the greater of $50 per square foot base rent ($1,042,550) or 9
percent of gross revenues from the Premises, to be phased in between 2022 and 2025, with a 2.5
percent annual escalator on the minimum guarantee for each year of the term; and
WHEREAS, additionally, Smith &Wollensky has agreed to the following price proposal for
the New Concession Agreement: the greater of $400,000 or 10 percent of gross revenues from
the concession area, to be phased in between 2022 and 2025, with a 2.5 percent annual escalator
on the minimum guarantee for each year of the term; and
WHEREAS, notwithstanding the phased rent ramp up period discussed above, the City
will immediately realize the benefits of increased rent from Smith & Wollensky; and
WHEREAS, at the June 23, 2021 City Commission Meeting, the Mayor and City
Commission approved the Lease Amendment on first reading, and a second reading/public
hearing of the Lease Amendment and approval of the New Concession Agreement is scheduled
to come before the Mayor and City Commission at the July 28, 2021 City Commission Meeting;
and
WHEREAS, provided that the Lease Amendment is approved by a majority of the voters
in a City-wide referendum, the Lease Amendment and New Concession Agreement, in the
aggregate, is expected to generate the following additional revenues over the first 5 years
following the Commencement Date, compared to 2021 Existing Lease and Existing Concession
Agreement revenues:
2022: $350,000;
2023: $600,000;
2024: $850,000;
2025: $1,030,000;
2026: $1,080,000; and
WHEREAS, the South of Fifth neighborhood, particularly in the vicinity of South Pointe
Park, has recently experienced increased crime, nuisance activity, and over-crowding that is
impacting the quality of life for the City's residents and visitors, requiring the need for public
resources to be dedicated to the area; and
WHEREAS, in an effort to address the crime and nuisance activity, and to improve the
quality of life in the South of Fifth neighborhood, the Mayor and City Commission desire to
dedicate all incremental revenues received from the Lease Amendment and the New Concession
Agreement, with all revenues received in excess of the 2021 revenues to be allocated for public
safety purposes in the South Pointe Park and the surrounding South of Fifth neighborhood for a
minimum of five (5) years or longer, as may be determined by the City Commission.
2
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 dedicate all the incremental revenues received by the City from the Smith &
Wollensky Restaurant Operation, pursuant to the Amended and Restated Lease Agreement
("Lease Amendment") and Concession Agreement with 1 Washington Avenue Corp. D/B/A Smith
& Wollensky Restaurant, with all revenues received in excess of the 2021 revenues to be
allocated for public safety purposes in the South Pointe Park and the surrounding South of Fifth
neighborhood for a minimum of five (5) years or longer, as may be determined by the City
Commission, subject to and contingent upon the approval of the Lease Amendment by a majority
of the voters voting in a City-wide referendum pursuant to Section 1.03(b)(1) of the City Charter.
PASSED and ADOPTED THIS o9/ day of JI ,V 2021.
ATTEST:
Dan Gelber, Mayor
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Rafael E. Granado, ity Clerk
.....'..`\if..•. APPROVED AS TO
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CNY AllY Dale
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Resolutions - R7 H
MIAMI BEACH
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
F ROM: Rafael Paz,Acting City Attorney
DATE: July 28, 2021
SUBJECT:A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, DEDICATING ALL INCREMENTAL
REVENUES RECEIVED BY THE CITY FROM THE SMITH & WOLLENSKY
RESTAURANT OPERATION, PURSUANT TO THE AMENDED AND
RESTATED LEASE AGREEMENT ("LEASE AMENDMENT") AND
CONCESSION AGREEMENT WITH 1 WASHINGTON AVENUE CORP. D/B/A
SMITH & WOLLENSKY RESTAURANT, WITH ALL REVENUES RECEIVED
IN EXCESS OF 2021 REVENUES TO BE ALLOCATED FOR PUBLIC
SAFETY PURPOSES IN SOUTH POINTE PARK AND THE SURROUNDING
SOUTH OF FIFTH NEIGHBORHOOD FOR A MINIMUM OF FIVE (5) YEARS
OR LONGER, AS MAY BE DETERMINED BY THE CITY COMMISSION,
SUBJECT TO AND CONTINGENT UPON THE APPROVAL OF THE LEASE
AMENDMENT BYA MAJORITY OF THE VOTERS VOTING IN A CITY-WIDE
REFERENDUM PURSUANT TO SECTION 1.03(B)(1) OF THE CITY
CHARTER.
ANALYSIS
The attached Resolution was prepared at the request of Mayor Dan Gelber, the sponsor of this
item, for consideration at the July 28, 2021 City Commission meeting.
SUPPORTING SURVEY DATA
n/a
Applicable Area
South Beach
Is this a "Residents Right Does this item utilize G.O.
to Know" item, pursuant to Bond Funds?
City Code Section 2-14?
Yes No
Legislative Tracking
Office of the City of Attorney
Page 1492 of 2012
Sponsor
Mayor Dan Gelber
ATTACHMENTS:
Description
D Reso- Smith & Wollensky Incremental Revenues
Page 1493 of 2012