Resolution 2022-32053 RESOLUTION NO. 2022-32053
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, FOLLOWING A DULY ADVERTISED
PUBLIC HEARING, APPROVING THE AMENDED AND RESTATED
GROUND LEASE AGREEMENT (THE "GROUND LEASE") BETWEEN
THE CITY OF MIAMI BEACH AND CFC-MB I, LLC, AN ARIZONA
LIMITED LIABILITY COMPANY, FOR THE COLLINS PARK ARTIST
WORKFORCE HOUSING PROJECT (THE "PROJECT"), SAID GROUND
LEASE MODIFYING, ON A LIMITED BASIS, THE REQUIRED MIX OF
INCOME-ELIGIBLE TENANTS OF THE WORKFORCE HOUSING UNITS
AT THE COLLINS PARK ARTIST WORKFORCE HOUSING PROJECT,
PROVIDED THAT ALL OF THE WORKFORCE HOUSING UNITS FOR
THE PROJECT SHALL BE RENTED SOLELY TO ELIGIBLE
INDIVIDUALS WITH HOUSEHOLDS EARNING 120% OR LESS OF THE
AREA MEDIAN INCOME FOR MIAMI-DADE COUNTY, CONSISTENT
WITH ALL APPLICABLE REQUIREMENTS RELATING TO
WORKFORCE HOUSING AS PROVIDED IN CHAPTER 58 OF THE CITY
CODE; APPROVING THE LEASE AGREEMENT (THE "FIRST FLOOR
SUBLEASE") BETWEEN CFC-MB I, LLC (SUBLESSOR)AND THE CITY
OF MIAMI BEACH (SUBLESSEE) FOR THE FIRST FLOOR RETAIL
SPACE WITHIN THE PROJECT; AND FURTHER, AUTHORIZING THE
MAYOR AND CITY CLERK TO EXECUTE THE FINAL NEGOTIATED
AGREEMENTS.
WHEREAS, the City is the owner of the property located at 224 23rd Street within
the Collins Park Cultural District(the "Property") and pursuant to an awarded competitive
solicitation process, the City intends to redevelop the Property as a mixed-use residential
workforce housing development that prioritizes housing for income-eligible artists,
educators, and other members of the Miami Beach workforce (the "Collins Park Artist
Workforce Housing Project" or"Project"); and
WHEREAS, the Miami City Ballet("Ballet"), South Florida's premier classical ballet
company, is a not-for-profit charitable cultural organization, headquartered in close
vicinity of the Property, at 2200 Liberty Avenue; and
WHEREAS, on September 14, 2016, the Mayor and City Commission adopted
Resolution No. 2016-29547, selecting The Concourse Group to identify public-private
partnership (P3) opportunities to alleviate the cost and other burdens on the City
associated with the development of workforce housing projects on City land including the
Property; and
WHEREAS, on January 18, 2019, the City issued Invitation to Negotiate (ITN)
2019-099-KB, with a focus on attracting artists and area educators to the City and
encouraging proposers to incorporate dormitory space for the Ballet into the Project; and
WHEREAS, on July 17, 2019, the Mayor and City Commission adopted Resolution
No. 2019-30908, authorizing simultaneous negotiations with both ITN proposers, and
following the withdrawal of Atlantic Pacific Communities, LLC, the City Commission
directed negotiation with the sole remaining proposer, Servitas, LLC ("Servitas" or
"Developer"); and
WHEREAS, the Developer, in collaboration with Community Finance Corporation,
a not-for-profit corporation that exists to facilitate capital projects for governmental entities
throughout the United States, has proposed a public-private partnership with the City that
would advance the City's policy objectives of developing workforce housing, with
preferential consideration for income-eligible artists, educators, and first responders, by
securing the financing for the Project through sources other than the City and thereby
freeing fiscal resources of the City for other governmental uses; and
WHEREAS, the Lessee would finance the design and construction of the Project
through the issuance of tax-exempt project revenue bonds(which would be non-recourse
to the City, with principal and interest payable solely from Project revenues); and
WHEREAS, on September 23, 2020, the Finance and Economic Resiliency
Committee reviewed the Developers proposed terms negotiated with the City
Administration and unanimously recommended that the City proceed with the Project; and
WHEREAS, in recognition of the potential for neighborhood placemaking, the
Finance and Economic Resiliency Committee also recommended that the City retain the
ability, at its option,to lease the first floor space and to utilize any surplus Project revenues
generated from the housing component in order to subsidize the City's costs to house a
cultural partner in such space; and
WHEREAS, on October 18, 2020, the Mayor and City Commission adopted
Resolution No, 2020-31435, accepting the Finance and Economic Resiliency
Committee's recommendations, approving the Project Term Sheet, directing negotiation
of a Development Agreement and Ground Lease, and referring the Project for review by
the Planning Board; and
WHEREAS, on November 17, 2020, the Planning Board unanimously passed
Resolution PB20-0407, transmitting the proposed Development Agreement and Ground
Lease to the City Commission with a favorable recommendation, in accordance with the
requirements of Section 1.03(b)(4) of the City Charter and the City's Land Development
Regulations; and
WHEREAS, on January 13, 2021, the Mayor and City Commission approved
Resolution No. 2021-31553, authorizing the Development Agreement with the Developer;
Resolution No. 2021-31554, authorizing the Ground Lease for the Project, with the City's
option to enter into a master sublease for the first floor leasable space (the "Ground Floor
Sublease"), subject to City payment of first floor rent, in order for the City to curate an
appropriate street-level cultural activation compatible with the Collins Park Cultural
District; and Resolution No. 2021-31555, authorizing a waiver of the minimum and
average unit size requirements for up to ten (10) studio units in the Project and of the City
Code's parking requirements with respect to the Project; and
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WHEREAS, the Development Agreement includes standard contract protections
in favor of the City, including a broad indemnification of the City, payment and
performance bonds for construction, City to be named as an additional insured on
required policies of insurances, and other contract protections reflecting City's limited
participation as lessor of the Property; and
WHEREAS, as approved in Resolution Nos. 2021-31553 and 2021-31554, the
Development Agreement and the Ground Lease each require the Project to maintain a
unit mix(Target Unit Mix)with 50% of the units(40 units)to be rented to eligible residents
with household income levels of 80% or less of the Area Median Income for Miami-Dade
County (AMI) and the remaining 50% (40 units) of the units for eligible residents with
household income levels at 120% or less of the AMI; and
WHEREAS, on June 6, 2021, the Historic Preservation Board ("HPB")
unanimously approved a Certificate of Appropriateness for the Project's design and,
subsequently, the Developer submitted a building permit application in September 2021;
and
WHEREAS, post-pandemic economic conditions have borne witness to significant
increases in overall construction costs, with recent pricing estimates of hard costs for the
Project arriving at approximately 53% higher than was forecasted when the City
Commission approved the Development Agreement and the Ground Lease in January
2021; and
WHEREAS, to partially address the increase in construction costs, Servitas has
reduced its hard cost budget by over$1,000,000 through value engineering; and
WHEREAS, to further address the increased Project cost, Servitas has proposed
to create a subordinated debt tranche that will be repaid using rental revenues remaining
after payment of the senior debt each period; and
WHEREAS, to ensure the Project's ability to pay the subordinated debt and
maintain the necessary debt service coverage ratio (DSCR) required by the senior debt,
Servitas seeks to create an increase in rental property revenues by adjusting, on a limited
basis, the proposed unit mix for the housing program to provide 100% of the units (80
units) at 120% AMI; and
WHEREAS, Servitas' proposed tenant income eligibility rate adjustment would
continue to satisfy requirements for workforce housing projects as defined in Chapter 58
of the City Code and would provide annual cash flow sufficient to ensure the economic
viability of the Project; and
WHEREAS, the proposed Amended and Restated Ground Lease stipulates that
when the annual budget for the Project is developed each year, the City and Servitas
shall, if possible, modify the unit mix by reallocating units from 120% or less AMI units to
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100%or less AMI and/or 80% or less AMI units to approach the Target Unit Mix as closely
as possible taking into account the Project's economics as of the date each such Annual
Budget is developed, including without limitation the Project's ability to repay the senior
and subordinated bonds, to cover all operating expenses, and to pay ground lease rent
to the City while maintaining the DSCR of the bond documents; and
WHEREAS, the Administration recognizes that the inflationary pressures which
have raised Project construction costs have occurred through no fault of the Developer,
and further, Servitas proposes a measured strategy of adding a limited amount of
subordinated debt and adjustment to the Project's tenant income eligibility and unit mix in
order to close a development financing gap and ensure Project stability following
completion of construction; and
WHEREAS, the amount of subordinated debt that can be assumed by the Project
without jeopardizing the Project's ability to maintain the required DSCR does not entirely
cover the financing deficit faced by the Project; and
WHEREAS, the Development Agreement stipulates that the Developer shall not
be obligated to pay any fees for the Project that can currently be waived under the City
Code and further provides that the City may, in its sole and absolute discretion, adopt
amendments to the City Code that permit the waiver or refund of all or a portion of City
fees for the Project; and
WHEREAS, the Developer and the Administration are exploring applicable fee
reductions or waivers that may require later administrative or legislative approval,
including without limitation, reductions or waivers of concurrency, mobility, sustainability
and other fees applicable to construction projects in the City; and
WHEREAS, the Developer has agreed to cap its developer fee at a cost to the
Developer of approximately $600,000 and, in exchange, the City has agreed to fund a
deficit in permitting costs of up to $532,451; and
WHEREAS, in order to curate an appropriate street-level activation compatible
with the Collins Park Cultural District, the City Commission also incorporated the Finance
and Economic Resiliency Committee's recommendation to utilize surplus Project
revenues generated by the residential housing component in order to subsidize the City's
rental costs associated with the First Floor Sublease;
WHEREAS, pursuant to the terms of the Ground Lease, the City provided timely
notice of intent to invoke its option to lease back the 2,248 square foot ground floor retail
space (the "Premises") and the parties have negotiated the First Floor Sublease,
providing, among other provisions, the following terms and conditions:
• The Initial Term is five (5) years, with seven (7) Renewal Terms of five (5) years
each, exercised at the City's option; and
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• Annual Rent is $26.00 per square foot, as provided for in the Ground Lease, with
three months free rent in Lease Year 1 and two percent (2%) annual escalations
thereafter; and
• In the event the City Commission does not appropriate sufficient funding for the
rental payments, the City may terminate the Ground Floor Sublease on 90 days'
notice; and
• The City may use the space for uses specific to City business or enter into a lease
agreement or management agreement with Eligible Subtenants that are 501(c)(3)
not-for-profit and tax-exempt entities, preferably with a cultural or performing arts
purpose, and subject to Landlord's reasonable consent; and
• Landlord will provide and bear the cost of all utilities (e.g., water and sewer service
and garbage collection)except for electricity, telephone, cable, and intemet, which
are the responsibility of the City (or the City's subtenant); and
• Landlord shall bear costs and expenses for all repair, maintenance, and
replacement of the building (including the Premises) including, without limitation,
all HVAC, plumbing, electrical, glass, security, and structural components and
systems and all appliances, fixtures, and other appurtenances contained in or
serving the Premises except as may be damaged by an act or omission of gross
negligence or willful misconduct by Tenant or any Eligible Subtenants; and
WHEREAS, in furtherance of the Project's public purpose, which provides
significant community benefits and promotes the City's stated strategic goals, the
Administration recommends that the Mayor and City Commission authorize the execution
of an Amended and Restated Ground Lease for the Collins Park Artist Workforce Housing
Project and a First Floor Sublease with the City as Sublessee; and
WHEREAS, given the prioritization of workforce and affordable housing in the
City's 2040 Comprehensive Plan and the City's 2019 Strategic Plan: Through the Lens of
Resilience, which includes the explicit objective of elevating the Collins Park Cultural
District, the City Commission desires to ensure the success of the Project, the City's first
workforce housing development project, including activating the ground floor with cultural
arts programming.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that, (1)the City, as lessor,
is hereby authorized to enter into the Amended and Restated Ground Lease with CFC-
MB I, LLC, an Arizona limited liability company, for the Collins Park Artist Workforce
Housing Project(the"Project"), said Agreement modifying, on a limited basis,the required
mix of income-eligible tenants of the workforce housing units at the Project, provided that
all of the workforce housing units for the Project shall be rented solely to eligible
individuals with households earning 120% or less of the area median income for Miami-
Dade County, consistent with all applicable requirements relating to workforce housing
as provided in Chapter 58 of the City Code; (2) the City, as sublessee, is hereby
authorized to enter into the First Floor Sublease with CFC-MB I, LLC for the first floor of
the Project; and (3) the Mayor and City Clerk are hereby authorized to execute the final
negotiated agreements.
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PASSED and ADOPTED THIS 073 day of Feb.-(4124.7 2022.
ATTEST:
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RAFAEL E. GRANADO, CITY CLERK DAN GELBER, MAYOR
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9 APPROVED AS TO
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FORM & LANGUAGE
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City Attorney 7" Dote
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Resolutions - R7 A
MIAMI BEACH
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Alina T. Hudak, City Manager
DATE: February 23, 2022
4:02 p.m. Public Hearing
SUBJECT:A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, FOLLOWING A DULYADVERTISED PUBLIC
HEARING, APPROVING THE AMENDED AND RESTATED GROUND
LEASE AGREEMENT (THE "GROUND LEASE") BETWEEN THE CITY OF
MIAMI BEACH AND CFC-MB I, LLC, AN ARIZONA LIMITED LIABILITY
COMPANY, FOR THE COLLINS PARK ARTIST WORKFORCE HOUSING
PROJECT (THE "PROJECT"), SAID GROUND LEASE MODIFYING, ON A
LIMITED BASIS, THE REQUIRED MIX OF INCOME-ELIGIBLE TENANTS
OF THE WORKFORCE HOUSING UNITS AT THE COLLINS PARK ARTIST
WORKFORCE HOUSING PROJECT, PROVIDED THAT ALL OF THE
WORKFORCE HOUSING UNITS FOR THE PROJECT SHALL BE RENTED
SOLELY TO ELIGIBLE INDIVIDUALS WITH HOUSEHOLDS EARNING
120% OR LESS OF THE AREA MEDIAN INCOME FOR MIAMI-DADE
COUNTY, CONSISTENT WITH ALL APPLICABLE REQUIREMENTS
RELATING TO WORKFORCE HOUSING AS PROVIDED IN CHAPTER 58
OF THE CITY CODE; APPROVING THE LEASE AGREEMENT (THE "FIRST
FLOOR SUBLEASE") BETWEEN CFC-MB I, LLC (SUBLESSOR) AND THE
CITY OF MIAMI BEACH (SUBLESSEE) FOR THE FIRST FLOOR RETAIL
SPACE WITHIN THE PROJECT; AND FURTHER, AUTHORIZING THE
MAYOR AND CITY CLERK TO EXECUTE THE FINAL NEGOTIATED
AGREEMENTS.
RECOMMENDATION
Approval of the resolution authorizing an Amended and Restated Ground Lease Agreement
(the "Ground Lease") for the Collins Park Artist Workforce Housing Project and the First Floor
Sublease with the City as Sublessee.
BACKGROUND/HISTORY
The City is the owner of the property located at 224 23rd Street, within the Collins Park Cultural
District (the "Property"), the current site of a 21-space public parking lot. Pursuant to an awarded
competitive solicitation process, the City intends to redevelop the Property as a mixed-use
residential workforce housing development that prioritizes housing for income-eligible artists,
Page 35 of 272
educators, and other members of the Miami Beach workforce (the "Collins Park Artist
Workforce Housing Project' or"Project").
On September 14, 2016, the Mayor and City Commission adopted Resolution No. 2016-
29547, selecting The Concourse Group to identify public-private partnership ("P3")
opportunities to alleviate the cost, and other burdens, on the City associated with the
development of workforce housing projects on City-owned property.
On January 18, 2019, the City issued Invitation to Negotiate (ITN) 2019-099-KB, with a
workforce housing development requirement, focused on attracting artists and area educators to
the City and encouraging proposers to incorporate dormitory space for the Miami City Ballet,
Inc. (the "Ballet") in the Project. The Ballet, South Florida's premier classical ballet company, is
a not-for-profit charitable cultural organization, headquartered in close vicinity of the Property, at
2200 Liberty Avenue.
On July 17, 2019, the Mayor and City Commission adopted Resolution No. 2019-30908,
authorizing simultaneous negotiations with both ITN proposers, Atlantic Pacific Communities,
LLC and Servitas, LLC. Following the withdrawal from negotiations of Atlantic Pacific
Communities, LLC, the City Commission directed negotiation with the sole remaining proposer,
Servitas, LLC ("Servitas" or"Developer").
On September 23, 2020, the Finance and Economic Resilience Committee (the "FERC")
reviewed the proposed terms negotiated between the Developer and the City Administration,
and unanimously recommended that the City proceed with the Project.
On October 18, 2020, the Mayor and City Commission adopted Resolution No, 2020-31435,
accepting the FERC's recommendation, approving the Project term sheet, directing negotiation
of a Development Agreement and Ground Lease, and referring the Project for review by the
Planning Board.
On November 17, 2020, the Planning Board unanimously passed Resolution PB20-0407,
transmitting the proposed Development Agreement and Ground Lease to the City Commission
with a favorable recommendation, in accordance with the requirements of Section 1.03(b)(4) of
the City Charter and the Citys Land Development Regulations.
On January 13, 2021, the Mayor and City Commission adopted Resolution No. 2021-31553,
approving, following second reading/public hearing, the Development Agreement with the
Developer; Resolution No. 2021-31554, approving the Ground Lease for the Project; and
Resolution No. 2021-31555, approving a waiver of the minimum and average unit size
requirements for up to ten (10) studio units in the Project and of the City Code's parking
requirements with respect to the Project. (Note: ultimately no units were designed below the
minimum and average unit size requirement.)
ANALYSIS
Project Update
Following the City Commission's final approval of the Development Agreement and Ground Lease in
Page 36 of 272
January 2021, the parties executed the Development Agreement. On June 6, 2021, the Historic
Preservation Board ("HPB") unanimously approved a Certificate of Appropriateness for the Project's
design. Following issuance of the HPB development order, in September 2021, Servitas submitted
plans for a building pemit application to the Building Department. The City and Developer are
nearing completion of the permit review and comment process and anticipate that the building permit
will be issued soon.
Assuming timely issuance of a Building Department permit, Servitas anticipates that financial dosing
for the Project will occur approximately four to five weeks after receiving approval by the City
Commission of the proposed Amended and Restated Ground Lease, described further below. The
Project's financial closing is a critical juncture as it serves to confirm completion of several milestones
including building permit issuance, delivery of all loan documents necessary for bond issuance to
fund Project construction, execution of the Ground Lease, execution of First Floor Sublease and the
Ballet's lease for the dormitory space, execution of the guaranteed ,maximum price (GMP)agreement
with the general contractor for the Project, and delivery of physical possession of the Property. The
Developer anticipates breaking ground approximately 7-10 business days following financial closing.
Economic Climate and Construction Costs
Post-pandemic economic conditions have borne witness to vigorous development activity throughout
the country and significant increases in overall construction costs. The construction industry is facing
historic price escalation in materials, supply chain disruption, delayed delivery and logistical
concerns, a shortage of available labor, and increase in labor costs. According to the most recent
Construction Inflation Alert published in September 2021 by the Associated General Contractors of
America (AGC), "The construction industry is in the midst of a period of exceptionally steep and fast-
rising costs for a variety of materials, compounded by major supply-chain disruptions. Owners need
to recognize that significant adjustments are probably appropriate regarding the price or delivery date
of projects that were awarded or commenced early in the pandemic...when conditions at suppliers
were far different." Upon review of the AGC's data on historical and recent changes in producer price
indexes for construction materials, building types and subcontractor segments, it comes as no
surprise that the Project's economic viability has been adversely impacted by recent industry and
economic trends.
Although final construction pricing is not yet complete, recent overall pricing estimates of materials
and hard costs by the Project's general contractor are 53% higher than anticipated when financial
projections were presented to the City Commission at the time of Ground Lease approval in January
2021. See Exhibit A(Revised Proforma dated February 16, 2022).
December 2020 February 2022 Percent Change
Proforma Proforma
Project Hard Costs. $15,094,400 $23,094,965 +53%
Estimated Bond Issuance $27,454,260 $37,354,127 +36%
Value Engineering Measures and Subordinated Debt Proposal
To help address the increase in construction costs, Servitas has taken a two-pronged approach.
First, Semites has worked with the contractor to identify cost savings via appropriate value
engineering measures and has successfully reduced the hard cost estimate by over $1,000,000.
Second, Servitas has proposed to create a subordinated debt tranche, to be issued at the time of
Page 37 of 272
initial bond issuance and repaid after payment of the senior debt each period. This repayment
structure will allow the Project to yield positive cash flow and maintain the requisite debt service
coverage ratio (DSCR) of 1.2. The DSCR is the metric that lenders use to gauge the ability of a
borrower to extinguish debt and essentially consists of the ratio of a borrower's net revenue to total
debt service.
Tenant Income Eligibility and Unit Mix Adjustment
Per the terms of the Development Agreement and Ground Lease, the Developer's business decision
to issue additional, subordinated debt does not require City Commission approval. However,
supplemental debt financing and value engineering alone cannot compensate entirely for the adverse
impact increased development costs has had on the economic viability of the Project. To help close
the gap, Servitas and the Administration are proposing an adjustment to the required leasing rate and
tenant income eligibility structure for the Property.
As approved in City Commission Resolution Nos. 2021-31553 and 2021-31554, the Development
Agreement and the Ground Lease currently require the Project to maintain an even split among the
80 housing rental units, with 50% (40 units) to be provided at rates applicable to eligible tenants
earning 120% or less of the area median income (AMI)[I] for Miami-Dade County, and 50% (40
units) provided for eligible tenants earning 80% or less AMI. Servitas now requests that the Ground
Lease be amended and restated to provide for 100% (80 units) at 120% AMI, representing an
increase of 40 units devoted to the higher AMI category.
The adjustment to the tenant income-eligibility and unit mix contemplated in the proposed Mended
and Restated Ground Lease would maintain the workforce housing character of the Project as
required in ITN 2019-099-KB and consistent with applicable requirements relating to workforce
housing as provided in Chapter 58 of the City Code. The income eligibility rate adjustment would
also provide annual cash flows sufficient to ensure the economic viability of the Project. Despite the
proposed adjustment to the nix of income-eligible tenants, the monthly rent for all the workforce
housing units would not exceed 30% of the applicable AMI, as provided in the approved
Development Agreement and the Ground Lease.
The proposed Amended and Restated Ground Lease stipulates that as the annual budget for the
Project is developed each year, the City and CFC-MB I, LLC (the "Lessee")will, if possible, modify
the unit mix by reallocating units from 120% or less AMI to 100% or less AMI and/or 80% or less AMI
to approach the unit nix that was originally contemplated when the Ground Lease was approved in
January 2021. The reallocation of units will take into account the Project's economics when the
Annual Budged is developed, including consideration of the Project's ability to repay the senior and
subordinated bonds, cover all operating expenses, and pay ground lease rent to the City while
maintaining the DSCR of the bond documents.
According to Servitas, if approved, the adjusted rental rates would not affect occupancy levels and
would remain attractive to potential renters, when compared with average rental rates in the
immediate market area. Servitas also believes that the resulting cash flow will more quickly reduce
the proposed subordinate debt tranche and sustain the anticipated cash flow inuring to the City(and
the Ballet, as approved by the City Commission in January 2021). Because the City Commission
approved the Ground Lease, whose terms stipulated the 50/50 rental mix, it is necessary for the City
Commission to approve the proposed change and other minor revisions of the Ground Lease.
Contribution to the Project
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Despite the prioritization of workforce housing by Miami-Dade County and the City and enactment of
incentives in the City Code, for several reasons, market conditions do not encourage workforce
housing development in'Miami Beach. Some of the underlying reasons for this indude the high costs
associated with permitting, construction, and South Florida real estate, united profit margins on
account of restricted rental revenues tied to AMI, and the inability of legislative efforts to make
projects financially attractive. Therefore, it is imperative to promote policies that lower development
costs in order to achieve the public need for housing.
The unit nix adjustment and resulting increase to revenue coupled with the amount of subordinated
debt that can be assumed by the Project without jeopardizing the Project's ability to maintain the
required DSCR, does not entirely cover the financing deficit faced by the Project. In recognition of
the high development costs for non-market rate housing projects, the Development Agreement and
Ground Lease explicitly state that the Developer shall not be obligated to pay any City fees for the
Project that can currently be waived under the City Code and the City may, in its sole and absolute
discretion, adopt amendments to the City Code that permit the waiver or refund of all or part of City
fees for the Project.
As a result of increasing construction costs and fluctuating interest rates in the bond market, the
Developer and the Administration have exercised flexibility in order to promote the financial viability of
the Project. Both parties have been agile and diligent in identifying cost savings and exploring
multiple avenues for relevant and applicable fee reductions or waivers as may require current or
future administrative or legislative approval including, but not limited to, reductions or waivers of
concurrency, mobility, sustainability and other fees applicable to construction projects in the City. The
Project will already benefit from incentives for workforce housing currently existing in the City Code
(e.g., related to parking requirements, mobility fee reductions, and waiver of employment training
fees).As partners in this endeavor to promote workforce housing development and to ensure Project
feasibility, the Developer has agreed to cap its developement fee which results in a significant
reduction to what they would be entitled to under the existing agreement, and, in exchange, the City
has agreed to fund a shortfall in permitting costs of up to$532,451 prior to Certificate of Occupancy
of the building in a future fiscal year, if additional workforce housing fee waivers are not identified.
Principal Purpose of Amended and Restated Ground Lease
The principal purpose of the Mended and Restated Ground Lease is to allow for the change to the
rental unit nix described above. The document also revises the approved Ground Lease by adding
an exhibit reflecting the procedures to be followed each year to ensure compliance with workforce
housing and unit nix requirements, as the same may be modified from time to time. Further, as
detailed in the preceding section, the Amended and Restated Ground Lease provides for the addition
of the City Contribution. Although it will increase the City's financial responsibility above what was
originally approved, the Project is in jeopardy without this commitment by the City.And if the Project
does not move forward, the Development Agreement requires that the City reimburse the Developer
for its pre-development costs in the amount of up to $800,000, which would be a higher cost to the
City without yielding a single unit of workforce housing, dormitory housing or first floor space for
cultural activation. See Exhibit B (Amended and Restated Ground Lease).
First Floor Sublease
As approved by the City Commission on January 13, 2021, the Ground Lease provides the City with
the option to enter into a master sublease for the ground floor leasable space (the "First Floor
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Sublease"), subject to City payment of ground floor rent, for the City to curate an appropriate street-
level activation compatible with the Collins Park Ms and Culture District. In recognition of the
potential for neighborhood placemaking, the FERC recommended in favor of the Ground Lease and
suggested that the City retain the ability, at its option, to program the ground floor space. Upon
approving the Ground Lease, the City Commission accepted the FERC's endorsement and
incorporated another recommendation to utilize any surplus Project revenues generated by the
housing component in order to subsidize the City's costs in renting the first floor space.
Based on the identified next steps, and pursuant to the Development Agreement's October 1, 2021
deadline for the City to provide notice of intent to invoke its option to lease back the ground floor
retail space, the City provided Servitas with timely notice and the parties undertook negotiations for
the First Floor Sublease. See Exhibit C (First Floor Sublease).
Key Terms—First Floor Sublease
CFC-MB I, LLC, an Arizona limited liability company, a
Sublessor/ wholly owned affiliate of Community Finance, Corporation,
Landlord an Arizona not-for-profit corporation, the same entity as the
Ground Lease Lessee.
Sublessee I Tenant City of Miami Beach
2,248 sq. ft. of ground floor retail space fronting on 23rd
Premises Street, to be delivered by Landlord as a baseline shell with
minimal building systems.
Initial Term Five(5)years
Seven (7) renewal periods of five (5)years each, exercised
Renewal Terms at the City's option.
$26 per square foot annually per the Ground Lease, or
Rent $62,634 annually / $5,219 monthly, with three (3) months
free rent in Lease Year 1, and 2% annual escalations
thereafter.
In the event the City Commission does not appropriate
City Termination sufficient funding for the rental payments, City may
teminate on 90 days'notice.
Uses specific to City business or subleased/managed by-
not-for-profit/tax-exempt entities existing and operating
Eligible Subtenants under 501(c)(3), preferably with a cultural or performing
/Uses arts purpose and subject to Landlord's consent, which shall
not be unreasonably withheld.
Landlord will provide and bear the cost of all utilities (e.g.,
water and sewer service and garbage collection) except for
Utilities electricity, telephone, cable, and intemet, which are the
City's responsibility.
Landlord will provide and bear costs for maintenance and
janitorial service for common areas and janitorial service to
Janitorial and the Premises consistent with the same level of janitorial
Services services provided for commercial office space. The
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Landlord also provides Services including trash removal,
landscaping, pest control, and building security.
Landlord shall bear costs and expenses for all repair,
maintenance, and replacement of the Building (including
the Premises) including, without limitation, all HVAC,
plumbing, electrical, glass, security, and structural
Repairs and components and systems and all appliances, fixtures, and
Maintenance other appurtenances contained in or serving the Premises
as may be damaged by an act or omission of gross
negligence or willful misconduct by Tenant or any Eligible
Subtenants.
The Ground Lease specifies that, throughout the entire term of the Ground Lease, the City shall
receive, as rent under the Ground Lease, 100%of the net revenues of the workforce housing project,
after payment of all operating expenses, debt service, and reserve requirements (the "Net Available
Cash Flow"). With original approval of the Ground Lease via Resolution No. 2021-31554, the City
Commission directed that all Net Available Cash Flow, if any, shall be distributed each year as
follows:first, to reimburse the City for all Project Costs; second, to the Ballet, as a grant from the City
to offset the Ballet's annual rental charges for its use of the dormitory housing; and third, if the
Ballet's annual rental obligation has been fully reimbursed, to cover any rental obligations of the City
in connection with the First Floor Sublease.
In addition to an annual rental payment by the City as master sublessee, the buildout of the first floor
leased Premises will entail additional costs for tenant improvements in order to sublease the space to
a chosen cultural arts tenant. The Development Agreement requires Servitas to deliver the Premises
as a baseline shell, with specified requirements for a minimum number of base systems and finishing.
The City will encounter additional costs related to the buildout, preparation, and continued operation
of the Premises for its intended use (such as a nonprofit cultural arts partner, to be determined by the
City Commission)and it is conceivable that the future tenant may not contribute significant funding to
the tenant improvements or to offset rental costs.
[1] The term"AM I" refers to the household income for the median, or middle, household in a region
as detemvned by the U.S. Department of Housing and Urban Development (HUD) on an annual
basis.
SUPPORTING SURVEY DATA
The Concourse Group study (2016), an exhibit to the Invitation to Negotiate for the Project, noted
that 53% of Miami-Dade County residents are cost-burdened when it comes to housing and most
spend greater than 30% of income on rent. The Mayor and City Commission have identified the need
for workforce and affordable housing in the City as a key objective in the City's 2019 Strategic
Plan Through the Lens of Resilience with a management objective to "support affordable,
compatible workforce housing through public and private partners for key industries, including the
use of development incentives." In addition, in the City's 2019 Strategic Plan, the City has committed
to support, develop, coordinate, and promote performance, visual, and other cultural arts within the
City, including elevating the Collins Park Cultural District, where the proposed project is to be
located. The CiWs 2040 Comprehensive Plan prioritizes workforce housing, with the express goal
Page 41 of 272
"to encourage redevelopment that provides workforce and affordable housing" within the City.
FINANCIAL INFORMATION
Notwithstanding all costs related to the Sublease and future programming of the first floor retail
space, the City remains a limited financial contributor to the development of the Project, with certain
Project costs advanced or funded by the City to be reimbursed to the City either at Financial Closing,
or from the Project's net revenues, prior to any distribution of-net revenues to any other party. The
strategy presented in the proposed Amended and Restated Ground Lease would preserve the
viability of the Project and ensure that the rental housing revenues will generate surplus revenue
(after payment of all operating expenses, maintenance reserves, and debt service reserves) for the
benefit of the City. Contingent upon the scale and scope of the City Commission's preferences and
direction regarding cultural arts programming of the first floor, there will be costs associated with the
buildout and preparation for occupancy of the leased premises.
CONCLUSION
The Administration recognizes that the inflationary pressures, which have increased Project
construction costs, have resulted through no fault of the Developer. To fill the large gap in
construction financing and in order to ensure a stable financial model upon construction
completion, Servitas and the Administration have negotiated a measured strategy that provides
for adding a limited amount of subordinated debt and an adjustment to the Project's tenant
income eligibility and unit mix consistent with all applicable requirements for workforce housing
within the City Code. Upon completion of development of the Project, the City's option to lease
the ground floor retail space will enable the City Commission to further shape the Collins Park
Cultural District campus with a tenant and uses of their choosing.
The Administration therefore recommends that the Mayor and City Commission approve the
resolution authorizing an Amended and Restated Ground Lease for the Collins Park Artist
Workforce Housing Project, authorizing the Administration to execute a First Floor Sublease
with the City as Sublessee.
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
Strategic Connection
Mobility-Support affordable, compatible workforce housing.
Legislative Tracking
Economic Development
ATTACHMENTS:
Description
o Exhibit A: Proforrma dated 2-16-2022
Page 42 of 272
❑ Exhibit B-Amended and Restated Ground Lease
❑ Exhibit C - First Floor Sublease
❑ Resolution
Page 43 of 272
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GROUND LEASE AGREEMENT
between
CITY OF MIAMI BEACH
as Lessor
and
CFC-MB I,LLC
as Lessee
DATED AS OF ,2022
Page 48 of 272
TABLE OF CONTENTS
Page
Section 1. Definitions 2
Section 2. Term 10
Section 3. Rent 11
Section 4. Financing of the Project Error! Bookmark not defined.
Section 5. Taxes and Assessments 12
Section 6. Utility Services 12
Section 7. Payments for the Lessee by the Lessor 13
Section 8. Compliance by the Lessee with Laws and Ordinances 13
Section 9. Quiet Enjoyment; Environmental Warranty 13
Section 10. Construction of Improvements 14
Section 11. Operation of the Project 20
Section 12. Security Interest 24
Section 13. Assignment of Lease 26
Section 14. Maintenance of Property 26
Section 15. Annual Budget Error! Bookmark not defined.
Section 16. Indemnification Agreement 28
Section 17. Insurance 29
Section 18. Police Services 31
Section 19. Damage and Destruction 31
Section 20. Condemnation 33
Section 21. Estoppel Certificates 34
Section 22. Access to Premises 35
Section 23. Property Subject to Zoning 35
Section 24. Events of Default and Remedies 35
Section 25. Expiration or Termination 37
Section 26. Mortgaging of the Leasehold 38
Section 27. Option to Purchase 43
Section 28. Notices 44
Section 29. Submission of Matters to the Lessor for Approval 45
Section 30. Holding Over by the Lessee 46
Section 31. Environmental Matters 46
Section 32. Property Condition 46
Section 33. Leasehold Condominium 47
Section 34. Release of Portions of the Property 47
Section 35. Miscellaneous 48
Section 36. Books and Records; Audit Rights 51
EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY
EXHIBIT B CITY DEVELOPMENT AGREEMENT
EXHIBIT C DEVELOPER ASSIGNMENT
EXHIBIT D TENANT CERTIFICATION PROCEDURES
Page 49 of 272
GROUND LEASE AGREEMENT
This GROUND LEASE AGREEMENT(this "Ground Lease"),made and entered into as of the
day of 202_, is between CITY OF MIAMI BEACH, a Florida municipal corporation(the
"Lessor"), and CFC- MB I, LLC (the "Lessee"), a single—member limited liability company
organized and existing under the laws of the State of Arizona and wholly-owned affiliate of
Community Finance Corporation, a not-for-profit corporation of the State of Arizona.
WITNESSETH:
WHEREAS, the Lessor is the owner of certain property (the "Property') owned by the
Lessor as more particularly described in Exhibit "A" attached hereto, incorporated in and by
reference made a part hereof; and
WHEREAS, the Lessor and the Lessee(each a"Party," and together the "Partied')desire
for the Lessee to develop,acquire,construct,furnish,equip, and operate a mixed use development
with residential workforce housing, dormitory-style housing, and cultural or retail uses on the
Property,along with associated site development and various related amenities and improvements
on the Property(the "Project'); and
WHEREAS, the Lessor desires to lease the Property to the Lessee for the purpose of
developing, constructing, and operating the Project for the use and benefit of local workforce and
the students and other persons participating in dance education and other cultural program
offerings of the Miami City Ballet, Inc., South Florida's premier classical ballet company; and
WHEREAS,the Miami Dade County Industrial Development Authority(the "Issuer")has
determined to issue its Industrial Development Revenue Bonds (CFC—MB I, LLC- Collins Park
Housing Project), Series 2022A (the "Series 2022A Bonds") and its Industrial Development
Revenue Bonds, (CFC—MB I, LLC-Collins Park Housing Project), Series 2022B (Taxable) (the
"Series 2022B Bonds"), and its Industrial Development Revenue Bonds (CFC-MB I, LLC
Housing Project),Series 2022C(Subordinate)(the"Series 2022C Bonds") together with the Series
2022A and 2022B Bonds, the "Series 2022 Bonds") under and pursuant to the terms of a Trust
Indenture (the "Indenture") dated as of I ] 1, 2022 between the Issuer and Zions
Bancorporation,National Association, as Trustee (the "Trustee") and to lend the proceeds of the
Series 2021 Bonds to the Lessee for the purpose of financing the costs of acquiring, constructing,
furnishing,and equipping the Project under and pursuant to the terms of a Loan Agreement of even
date herewith between the Issuer and the Lessee;and
NOW,THEREFORE, in consideration of the premises,the rental to be paid hereunder,the
mutual covenants and agreements herein set forth by each Party to be kept and performed,and for
other good and valuable consideration,the receipt,adequacy, and sufficiency of which are hereby
expressly acknowledged by each Party, the Parties do hereby mutually covenant and agree as
follows:
The Lessor does hereby let the Property unto the Lessee, subject only to Permitted
Encumbrances (as defined herein),and the Lessee does hereby take and hire the Property from the
Lessor, subject to Permitted Encumbrances.
Page 50 of 272
TOGETHER WITH all appurtenances, rights, privileges, and easements benefiting,
belonging, or pertaining thereto, and together with the buildings, structures, and improvements
erected or to be erected thereon.
TO HAVE AND TO HOLD the Property for the term set forth herein unless this Ground
Lease shall be sooner terminated as hereinafter provided.
This Ground Lease and all rights of the Parties hereunder are expressly subject to the
provisions as hereinafter set forth, all of which the Parties respectively agree to keep, abide by,
and perform during the Term.
Section 1. Definitions. The following terms as used in this Ground Lease Agreement,
shall have the following meanings,unless the context indicates otherwise:
"Additional Bonds" means any additional notes, bonds, or other instruments issued and
secured under the Indenture,other than the Series 2022 Bonds.
"Annual Budget" has the meaning given in the Loan Agreement.
"Annual Period" means the twelve (12) month period commencing on January 1 of each
calendar year and ending on December 31 of such calendar year.
"Architect" shall have the meaning ascribed to it in the City Development Agreement.
"Architects Agreement' means that certain Agreement for Design Services dated
, 2022, between the Developer, as owner, and the Architect, as architect, pursuant to
which the Architect has agreed to provide certain architectural and engineering services in
connection with the construction of the Project, and any amendments thereof and/or supplements
thereto.
"AMP' means the area median income for Miami-Dade County established from time to
time by the U.S. Department of Housing and Urban Development.
"Artists" shall mean any person earning 120% or less of the then-applicable area median
income (AMI) for Miami-Dade County (as such AMI is determined from time to time in
accordance with Chapter 58 of the City Code), and who is either (1) actively involved in the
practice of creative arts, including,without limitation, in the area of music, dance, drama or other
performing arts; creative writing; painting, sculpture, photography, or other fine arts; graphic
arts/web design; craft arts; industrial design; costume design; fashion design; and film, television,
radio and/or print production; or (2) an employee of a non-profit or governmentally owned
museum or other cultural organization works with, displays, or promotes the creative arts
"Area Educators" means any person earning 120% or less of the then-applicable area
median income(AMI) for Miami-Dade County (as such AMI is determined from time to time in
accordance with Chapter 58 of the City Code), who is employed as a teacher or teacher's aide at
any public or private school within the City of Miami Beach (including, without limitation, any
teacher or teacher's aide employed within the City of Miami Beach in any day care/early childhood
education program), on a full-time or part-time basis.
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"Asset Management Agreement" means (i) the Initial Asset Management Agreement and
(ii) any management or similar agreement between the Lessee and any successor Asset Manager
to be responsible for the management and operation of the Premises, as the same may be amended
and/or supplemented from time to time in accordance with the provisions hereof, thereof, and of
the Indenture, and subject to the consent of the Lessor, in accordance with Section 11 of this
Ground Lease.
"Asset Manager" means, initially, Servitas Management Group, LLC, a limited liability
company organized under the laws of the State, and thereafter, any other approved management
company employed by the Lessee to manage the Project,subject to the consent of the City Manager
in accordance with Section 11 of this Ground Lease.
"Assigned Agreements" means, collectively, the Construction Agreements, Occupancy
Agreements and the Asset Management Agreement.
"Assignment of Contracts and Agreements" means the Assignment of Contracts and
Agreements of even date herewith by the Lessee in favor of the Trustee, as the same may be
amended and/or supplemented from time to time as permitted by the Indenture.
"Building Equipment" means all installations incorporated in, located at or attached to
and used or usable in the operation of, or in connection with, the Premises and shall include, but
shall not be limited to, machinery, apparatus, devices, motors, engines, dynamos, compressors,
pumps, boilers and burners, heating, lighting, plumbing, ventilating, air cooling and air
conditioning equipment; chutes, ducts, pipes, tanks, fittings, conduits and wiring; incinerating
equipment; elevators and hoists; washroom, toilet and lavatory plumbing equipment; window
washing hoists and equipment; and all additions or replacements thereof, excluding,however,any
personal property which is owned by subtenants, licensees, concessionaires or contractors of the
Lessee, or any personal property of the Lessee that has not been purchased with any of Bond
proceeds or Revenues of the Project.
"Bond Documents" has the meaning given in the Loan Agreement.
"Bonds" means, collectively,the Series 2022 Bonds and any Additional Bonds.
"Borrower" means the Lessee.
"Borrower Documents"has the meaning given in the Loan Agreement.
"Business Day"means any day other than a Saturday,a Sunday,or a day on which banking
institutions in the State are authorized or obligated by law to close.
"City" means the City of Miami Beach, Florida.
"City Development Agreement"means that certain Development Agreement between the
City of Miami Beach and the Developer and joined to by Lessee, dated ,20_, governing
the development of the Project, recorded in Official Records Book , Page_of the Public
Records of Miami-Dade County, Florida, a copy of which is attached hereto as Exhibit "B" and
incorporated by reference herein.
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"City Manager"means the chief administrative officer of the Lessor.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commencement Date" means I 1, 2022.
"Construction Documents," means the City Development Agreement, the Development
Agreement between Servitas and Lessee, the General Construction Contract, Architect's
Agreement, and the other contracts, if any, relating to the construction thereof between the
Developer, the General Contractor, the Architect, or the Borrower and construction professionals
or suppliers of materials and Equipment.
"Consumer Price Index" means the Consumer Price Index For All Urban Consumers
(CPI-U);U.S.City average(1982-84=100),published by the Bureau of Labor Statistics of the U.S.
Department of Labor.
"Corporation" means Community Finance Corporation, a non-profit corporation duly
organized and existing under the laws of the State of Arizona, and its successors and assigns.
"County" means Miami-Dade County, Florida.
"Debt Service Reserve Fund" has the meaning given in the Loan Agreement.
"Default Rate" means the lower of(a) a rate of interest equal to five percent (5%) per
annum above the highest annual prime rate(or base rate)published from time to time in The Wall
Street Journal under the heading "Money Rates" or any successor index representing the rate in
effect for corporate loans at large U.S. money center commercial banks (whether or not such rate
has actually been charged by any such banks)or if such rate is no longer published,then the highest
annual rate charged from time to time at a large U.S. money center commercial bank, selected by
the City, on short term, unsecured loans to its most creditworthy large corporate borrowers or(b)
the highest rate permitted by applicable law.
"Developer" means Servitas, LLC, a limited liability company organized and existing
under the laws of Texas, which is registered and authorized to do business in the State, and its
permitted successors and assigns.
"Developer Assignment" has the meaning given in the Loan Agreement. A copy of the
Developer Assignment is attached hereto as Exhibit"C".
"Development Agreement"means that certain agreement by and between the Lessee and
Developer for the design and construction of the Improvements.
"Dormitory Housing" means up to thirty-two (32) beds of dormitory-style housing
(utilizing an entire floor or a portion of two floors) for Miami City Ballet dancers, students and
other program participants,and MCB personnel only,as such term may be further described in the
City Development Agreement.
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"Eligible Residents" (or individually, an "Eligible Resident") means, for the Workforce
Housing Units, eligible individuals earning 120% or less of the AMI (or as defined by the then
applicable ordinance governing workforce housing), consistent with all applicable requirements
relating to workforce housing as provided in Chapter 58 of the City CodeThe following acceptance
priorities shall be applied to otherwise income eligible individuals: (i)Artists practicing in Miami-
Dade County;City of Miami Beach employees,including,without limitation,City of Miami Beach
law enforcement personnel and firefighters; Area Educators and nurses employed within the City
of Miami Beach; and veterans who are either employed within the City of Miami Beach or whose
last place of residence was within the City of Miami Beach (collectively, "Tier 1"); (ii) workers
employed within the City of Miami Beach in the hospitality and entertainment industries ("Tier
2"); and (iii) workers employed within Miami-Dade County, with priority for workers employed
within the City of Miami Beach ("Tier 3"). For purposes of the Dormitory Housing for MCB,
"Eligible Residents" shall mean persons participating in an official dance education or other
program offered by the MCB, as well as the MCB on-premises dormitory staff without regard to
AMI.
"Environmental Reports"means the following reports provided by the City to Lessor and
Developer: Phase 1 Environmental Site Assessment Report by Langan Engineering, dated
December 21, 2012 for 340 23rd St, Miami Beach, Florida and Phase 2 Environmental Site
Assessment Report by Langan Engineering, dated February 19, 2014 for 340 23rd St, Miami
Beach, Florida.
"Event of Default" has the meaning given in Section 24 hereof.
"Equipment" means all machinery, equipment, fixtures, appliances, furniture, and any
other personal property of any kind or description owned by the Lessee and incorporated within
or for the exclusive benefit of the Project.
"Expenses" has the meaning given in the Loan Agreement.
"Fixed Charges Coverage Ratio" has the meaning given in the Loan Agreement.
"GAAP"means those principles of accounting set forth in pronouncements of the Financial
Accounting Standards Board and its predecessors or pronouncements of the American Institute of
Certified Public Accountants or those principles of accounting that have other substantial
authoritative support and are applicable in the circumstances as of the date of application, as such
principles are from time to time supplemented and amended.
"General Construction Contract'means the Construction Contract of even date herewith
between the Developer and the General Contractor pursuant to which the General Contractor has
agreed to construct the Project.
"General Contractor" means Moss & Associates, LLC, a limited liability company
organized and existing under the laws of the State of Florida and licensed to do business in the
State, and its permitted successors and assigns.
"Governmental Authorities" means those governmental offices with jurisdiction over the
design and construction of the Improvements.
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"Governmental Requirements"means any law,enactment,statute,code,order,ordinance,
rule, regulation,judgment, decree, writ, injunction, franchise, permit, certificate, license, or other
similar requirement of any Governmental Authority, now existing or hereafter enacted, adopted,
promulgated, entered, or issued, affecting the Premises or the construction and/or operation of the
Project thereon.Notwithstanding anything to the contrary in this Ground Lease,the Lessee retains
its right to challenge Governmental Requirements in accordance with all other applicable
Governmental Requirements.
"Ground Lease"means this Ground Lease Agreement,as the same may be amended and/or
supplemented from time to time in accordance with the provisions hereof.
"Improvements" means any building (including footings and foundations), Building
Equipment,and other improvements and appurtenances of every kind and description now existing
or hereafter erected, constructed, or placed upon the Property (whether temporary or permanent),
and any and all alterations and replacements thereof, additions thereto and substitutions therefor.
"Indenture" means the Trust Indenture of even date herewith between the Issuer and the
Trustee, as the same may be amended and/or supplemented from time to time in accordance with
the provisions thereof.
"Independent Counsel" means an attorney or firm of attorneys duly admitted to practice
law before the highest court of any state of the United States and not in full-time employment of
the Lessee, the Lessor, or the Transferee.
"Initial Asset Management Agreement"means the Asset Management Agreement of even
date herewith between the Lessee and the Asset Manager, as the same may be amended and/or
supplemented from time to time in accordance with the provisions thereof and of the Indenture.
"Issuer" means the Miami Dade County Industrial Development Authority and its
successors and assigns.
"Lease Year"means each twelve(12)month period commencing on the first day of January
of a calendar year and ending on the last day of December of the such calendar year;provided the
first Lease Year shall commence on the Commencement Date and end on December 3I, 2023.
"Leasehold Estate" shall have the meaning given in Section 2(b)hereof.
"Lessee" means CFC- MB I, LLC, a single—member limited liability company organized
under the laws of the State of Arizona, whose sole member is the Corporation, and its successors
and assigns.
"Lessor" or "City" means City of Miami Beach, a Florida municipal corporation, having
its principal offices at 1700 Convention Center Drive, Miami Beach, Florida 33139, and its
successors and assigns. In all respects hereunder,Lessor's obligations and performance is pursuant
to Lessor's position as the owner of the Property acting in its proprietary capacity. In the event
Lessor exercises its regulatory authority as a governmental body, the exercise of such regulatory
authority and the enforcement of any rules, regulations, laws and ordinances (including through
the exercise of the Lessor's building,fire,code enforcement,police department or otherwise)shall
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be deemed to have occurred pursuant to Lessor's regulatory authority as a governmental body and
shall not be attributable in any manner to Lessor as a party to this Ground Lease or in any way
deemed in conflict with, or a default under, the Lessor's obligations hereunder.
"Lessor Representative" means the Person or Persons designated by the Lessor to serve as
the Lessor's representatives in connection with the design, acquisition, construction, furnishing,
equipping, and operation of the Project. The initial Lessor Representatives of the Lessor shall be
the City's Office of Capital Improvements Director or his or her designee("FPCRepresentative"),
with respect to construction and permitting related matters, and City's Property Management
Director or his or her designee, with respect to leasing,management, and operations matters.
"Loan Agreement" means the Loan Agreement of even date herewith between the Issuer
and the Lessee,as the same may be amended and/or supplemented from time to time in accordance
with the provisions of the Indenture.
"Master MCB Sublease"means the lease between the Lessee and Miami City Ballet dated
as of ( ], as the same may be amended and/or supplemented from time to time in
accordance with the provisions thereof, which Master Sublease is intended to provide the Miami
City Ballet with the exclusive right to use and occupy the Dormitory Housing.
"Maximum Annual Debt Service" has the meaning given in the Loan Agreement.
"Miami City Ballet" or "MCB" shall mean Miami City Ballet, Inc., a not-for-profit
charitable cultural organization headquartered at 2200 Liberty Ave.,Miami Beach, Florida 33139.
"Mortgagee Lease" means a lease of the Premises entered into between a Permitted
Leasehold Mortgagee, as lessee, and the Lessor, as lessor, as a result of a termination hereof by
reason of any Event of Default for the remainder of the Term effective as of the date of termination
hereof, at the same Rent and upon the same terms, provisions, covenants, and agreements as
contained in this Ground Lease and subject to no additional exceptions or encumbrances other than
Permitted Encumbrances and to the rights, if any, of the parties then in possession (actual or
constructive) of any part of the Premises.
"Net Available Cash Flow,"with respect to each Lease Year,means the amount of Project •
Proceeds available to be distributed to the Lessor with respect to such Lease Year in accordance
with the provisions of Section 510(b)or(c)of the Indenture,which amounts are intended to be the
annual surplus or net revenues of the Project, after the payment of all operating expenses and
satisfaction of all debt service and maintenance reserve and other requirements, as set forth in the
Indenture.
"Occupancy Agreements" means, collectively, the leases, rental agreements, license
agreements or other similar agreements for the use of individual residential workforce housing
units within the Project. All Occupancy Agreements for the Workforce Housing Units (i) shall
have initial terms of twelve(12) months and(ii) shall not be subject to sub-leasing.
"Operating Account" has the meaning given in the Loan Agreement.
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"Opinion of Counsel' means an opinion in writing of Independent Counsel who or that is
reasonably acceptable to all recipients thereof and who or that may be counsel to the Lessee, the
Lessor, or the Transferee.
"Outstanding Bonds" or "Bonds Outstanding" and "Outstanding" have the meaning
given in the Loan Agreement to the term"Outstanding Bonds".
"Permitted Leasehold Mortgage" has the meaning given in Section 26 hereof.
"Permitted Leasehold Mortgagees" means, collectively, the holders of the indebtedness
secured by the Permitted Leasehold Mortgages or any agent or fiduciary therefor and any designee
thereof for the purpose of taking title to the Lessee's interests in this Ground Lease or entering into
a Mortgagee Lease (each, a "Permitted Leasehold Mortgagee").
"Permitted Encumbrances" has the meaning given in the Loan Agreement.
"Plans and Specifications" means the plans and specifications for the design,
development, and construction of the Project, including fully detailed drawings showing the
location,character, dimensions,details,and specifications of the work to be done, and comprising
all of the written directions, provisions, and requirements for the Project, including detailed
technical requirements as to labor, materials, supplies, equipment, and standards to which such
work is to be performed, prepared by the Architect for the Project, in each case, consistent with
the approved Project Concept Plan. As used in this Ground Lease, the "Plans and Specifications"
include, without limitation, the Preliminary Plans and Specifications, the Final Plans and
Specifications, the Permit Plans and Specifications, and any approved modifications thereto, as
approved or deemed approved by the City Manager (or the City Manager's designee) in
accordance with the provisions of Section 10(e) hereof and as amended from time to time by the
Lessee with the consent of the Lessor, a copy of which is or will be on file with the Lessor.
"Premises" means the Project and the Property.
"Primary Leasehold Mortgage" means the leasehold mortgage which is a senior/first lien
on Lessee's interest in this Ground Lease and the leasehold interest created hereby and the Project,
which shall be evidenced by,and the Lessor shall be able to rely absolutely on,a title report current
as of the time of any determination and prepared by a generally recognized title insurance company
doing business in Miami-Dade County,Florida,or upon a certificate of Lessee,signed and verified
by a duly authorized representative of the Lessee.
"Primary Leasehold Mortgagee" means the Permitted Leasehold Mortgagee who is the
holder of the Primary Leasehold Mortgage, initially the Trustee.
"Project" means the approximately 73,000 square foot, 7-story housing facility on the
Property including dormitory housing intended to be occupied by the MCB, first floor City space
and associated site development and various related amenities and improvements, and all
Equipment.
"Property"means the land located in the City as more particularly described in Exhibit"A"
attached hereto, incorporated in and by reference made a part hereof.
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"Refinanced Trustee Mortgage" means any amendment, modification, or replacement of
the Trustee Mortgage resulting from the refinancing of the Bonds.
"Renewal Term"shall have the meaning ascribed to it in Section 2(a)of this Ground Lease.
"Rent" means the annual rental payable by the Lessee to the Lessor in accordance with
Section 3 hereof.
"Repair and Replacement Fund" has the meaning given in the Loan Agreement.
"Revenues" has the meaning given in the Loan Agreement.
"Schedule of Performance" means the construction schedule set forth in the Construction
Contract.
"Series 2022 Bond" or "Series 2022 Bonds" means any or all of the Series 2022A Bonds
or the Series 2022B Bonds.
"Series 2022A Bond" or "Series 2022A Bonds" means any or all of the Sr 1
Miami-Dade County Industrial Development Authority Industrial Development Revenue Bonds
(CFC-MB I, LLC-Collins Park Housing Project), Series 2022A issued under the Indenture.
"Series 2022B Bond" or "Series 2022B Bonds" means any or all of the $1
Miami-Dade County Industrial Development Authority Industrial Development Revenue Bonds
(CFC- MB I, LLC- Collins Park Housing Project), Series 2022B (Taxable) issued under the
Indenture.
"Series 2022C Bond"or "Series 2022C Bonds"means any and all of the $3,000,000.00
Miami-Dade County Industrial Development Authority Industrial Development Revenue Bonds
(CFC-MB I, LL Collins Park Workforce Housing Project), Series 2022C (Subordinate) issued
under the Indenture.
"State" means the State of Florida.
"Substantial Completion" means:
(i) the Project, including all life safety systems, shall have been substantially
completed in accordance with the Plans and Specifications and applicable laws and as
required by the Construction Documents;
(ii) all required occupancy permits for the Project shall have been issued and
the Project shall be reasonably capable of being occupied for its intended purposes;
(iii) a punch list of any unfinished items relating to the Project shall have been
prepared by the Developer and shall have been approved by the Lessor Representative;and
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(iv) all Governmental Authorities shall have given any necessary approval to
occupancy of the Project on a temporary basis pending the occurrence of final completion
thereof.
"Surplus Fund" means the fund of that name created in accordance with the provisions of
the Indenture.
"Tenant Certification Procedures" means those procedures which the Lessee shall be
obligated to follow to certify that the Project is in compliance with the restrictions of the Lease
relating to rent restrictions and tax-exempt status,those procedures are attached hereto as Exhibit
«D„
"Term" shall have the meaning given in Section 2(a) hereof.
"Termination Date" means the date bn which the Term ends by termination or expiration
hereof.
"Trustee" means Zions Bancorporation, National Association, as Trustee under the
Indenture, and its successors and assigns in such capacity.
"Trustee Mortgage" means the Leasehold Mortgage and Assignment of Rents and
Subleases,of even date herewith by the Lessee in favor of the Trustee,as the same may be amended
and/or supplemented from time to time in accordance with the provisions of the Indenture.
"Trustee Security Interests" shall have the meaning given in Section 12(a) hereof.
"Unit Mix" shall mean, the allocation of Workforce Housing Units at the Project among
AMI percentage categories.
"Workforce Housing Units"shall have the meaning ascribed to it in the City Development
Agreement.
Section 2. Grant of Lease; Term.
(a) Subject to the terms and conditions of this Ground Lease, the Lessor, as of the
Commencement Date, demises and leases the Property to Lessee, and Lessee leases and takes
possession from Lessor, the Property, for the Term, for the development and construction of the
Project, and operation of the Premises.
(b) The initial term of the leasehold estate of the Lessee in the Property created
hereunder(the"Leasehold Estate")shall commence on the Commencement Date and shall expire
on February 28'h of the last Lease Year prior to the 50th anniversary of the Commencement Date
("Initial Term"). Provided that the Lessee is in good standing and not in default of the Ground
Lease, the Term of this Ground Lease may be extended for two consecutive periods of twenty
years each (each, a "Renewal Term") on mutual agreement of Lessor and Lessee, on the same
terms and conditions as set forth in this Ground Lease(collectively,the Initial Term and Renewal
Term(s),the"Term").
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(c) On the Commencement Date, Lessor and Lessee shall execute a memorandum of
lease in such form as will enable the memorandum to be recorded in the Public Records of Miami-
Dade County, in each case, setting forth the Commencement Date and the Expiration Date,
determined according to this Ground Lease.On the Termination Date,the Lessee and Lessor shall
be released from,and relieved of,all of its obligations hereunder and under any other agreements
relating to the Project to which the Lessor and the Lessee are then a party without any further
action on the part of the Lessor or the Lessee. Lessor and Lessee hereby agree to assist and
cooperate as necessary to effectuate or accomplish any assignments under this Section.
Section 3. Rent. (a) The Lessee covenants and agrees to pay to the Lessor throughout
the Term as Rent an annual amount equal to the Net Available Cash Flow.
(b) The Rent shall be payable in respect of each Lease Year within thirty (30) days of
receipt by the Lessee and the Trustee of the annual financial statements and Audit Report(as such
term is defined in the Loan Agreement) for the corresponding Annual Period of the Lessee
provided to the Trustee in accordance with the provisions of the Loan Agreement and the
satisfaction of any additional conditions precedent to the distribution of the Net Available Cash
Flow as provided in Section 510(c) and (d) of the Indenture. Lessee shall cause the Accountant
(as such term is defined in the Loan Agreement) to furnish a copy of the annual financial
statements and Audit Report to Lessor at the same time as such annual financial statements and
audit report are delivered to the Trustee pursuant to the terms of the Loan Agreement. It is
contemplated that such annual financial statements and audit reports will be produced within one
hundred eighty(180) days after the end of each Annual Period.
(c) If the Net Available Cash Flow for a Lease Year shall be zero (0) or a negative
amount, no Rent shall be paid to the Lessor hereunder for such Lease Year, and it is understood
that the Lessor shall have no liability or obligation,express or implied,to contribute or to pay the
Lessee for any such deficit in Net Available Cash Flow.
(d) For purposes hereof, the Lessor agrees that the Lessee may, in each Lease Year,
charge, or cause to be charged,Rent for the units comprising the Project sufficient to comply with
all of the covenants and agreements of the Lessee contained in the Bond Documents, provided,
however, the maximum rent charged to tenants of the Workforce Housing Units shall comply
with the provisions of Section 11(c) of this Ground Lease.
(e) Payment of all Rent and all other sums due to the Lessor under this Ground Lease
shall be made payable to the Lessor and delivered to the Lessor at the address shown in Section 28
hereof or at such other place as the Lessor may notify the Lessee in writing from time to time.
Section 4. Financine of the Project. The Lessee shall, at its own cost and expense,
obtain all financing required for the design,,acquisition, construction, furnishing, equipping, and
operation of the Project, including the issuance of the Series 2022 Bonds. The Lessee agrees to
provide the Lessor with copies of all material information and documentation relating to any form
of proposed financing. The Lessee agrees that except for the financing contemplated by the Bond
Documents, all financing relating to the design, acquisition, construction, furnishing, equipping,
and operation of the Project,or any amendment,renewal,refinancing,or refunding of same during
the Term shall be subject to the prior approval of the Lessor, which approval shall not be
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unreasonably withheld. In no event shall any financing approved by the Lessor hereunder be
modified so as to increase the principal amount outstanding or the term or amortization period of
the financing except with respect to an increase in number of Workforce Housing units
contemplated hereby.
Section 5. Taxes and Assessments. (a) It is hereby determined and declared by the
Lessor and the Lessee that nothing contained in this Ground Lease is intended to change the degree
to which the interest or estate of the Lessee created by this Ground Lease is subject to ad valorem
property taxes; however, to the extent assessed,this Lessee shall bear and pay to the public officer
charged with the collection thereof,before the same shall become delinquent,and shall indemnify,
save, and hold harmless the Lessor from the payment of, any and all taxes, assessments, license
fees, excises, imposts, fees, and charges of every sort, nature and kind (collectively, "Taxes" and
each, a"Tax")that during the Term are or might be levied, assessed, charged, or imposed upon or
against the Premises or tin, interest or estate of the Lessee or the Lessor in and to the Property. If
the Lessor subsequently sells or transfers fee simple title to the Property and such sale or transfer
alone results in the levy, assessment, charge, or imposition of ad valorem taxes against the
Premises or causes the Property to become subject to such levy,assessment,charge,or imposition,
the successor Lessor shall be responsible for the payment of such Taxes,and the Lessee shall have
no liability therefor.
(b) Notwithstanding the Lessee's agreement to pay for any taxes or assessments in
accordance with Section 5(a) above, the Lessor agrees to use its best efforts to assist the Lessee
in attempting to secure an exemption from ad valorem property taxation with respect to the
Premises (including, without limitation, modifications to the Ground Lease or the Term thereof,
if necessary). In furtherance of the foregoing, if, following review by the Miami-Dade County
Property Appraiser, it is determined that a longer duration of the Term is necessary in order to
secure the exemption from ad valorem for the Project, then the City Manager may, by written
notice to the Lessee, exercise one or both of the options to renew for the Renewal Term, and in
such event, the Term shall be conclusively deemed to have been renewed and extended, for the
duration of the Initial Term and the applicable Renewal Term(s).
(c) If the imposition of any Tax shall be deemed by the Lessee or the Lessor to be
improper, illegal, or excessive, the Lessee may, in its own name, dispute and contest the same
and,in such event and to the extent permitted by law,any such Tax need not be paid until adjudged
to be valid; provided,however, the Lessee shall first notify the Lessor in writing of such dispute
and contest and shall comply with the requirements of the Bond Documents concerning the
contest of Taxes. Unless so contested, any Tax shall be paid by the Lessee within the time
provided by law, and if contested, any such Tax shall be paid before the imposition of a lien on
the Premises with respect thereto.
Section 6. Utility Services. The Lessee shall make application,obtain and pay, and be
solely responsible, for all utilities required, used,or consumed on the Premises, including,but not
limited to gas, water (including water for domestic uses and for fire protection), telephone,
electricity,cable(if any),interne,sewer service,storm-water services,garbage collection services,
or any similar service (collectively, the "Utility Services" and each, a "Utility Service"). In the
event that any charge for any Utility Service supplied to the Premises shall not be paid by the
Lessee to the applicable Utility Service supplier when due, then the Lessor shall be permitted, ten
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, (10) days after written notice to the Lessee, but shall not be required to, pay such charge for and
on behalf of the Lessee, with any such amount paid by the Lessor being repaid by the Lessee to
the Lessor within twenty (20) days after demand therefor by the Lessor.
Section 7. Payments for the Lessee by the Lessor. If the Lessee shall fail to procure
the insurance required to be procured by the Lessee under this Ground Lease or shall fail to pay
any premium of insurance, Tax, or any other sum in this Ground Lease required to be paid by the
Lessee (other than Rent), the Lessor may, after expiration of the applicable cure period and after
notifying the Lessee and the Trustee, at the Lessor's option, elect to follow one of the options
provided in Section 24(b)hereof or may,without declaring an Event of Default,procure on behalf
of the Lessee any such insurance, and pay on behalf of the Lessee any such payment or payments
as may be necessary. Any sum(s) so paid or expended by the Lessor on behalf of the Lessee shall
immediately be reimbursed and paid by the Lessee to the Lessor within forty-five (45) days after
demand therefor by the Lessor as Expenses under the Bond Documents. Notwithstanding anything
to the contrary herein,in the event Lessor makes any payments pursuant to this Section,and Lessee
fails to reimburse Lessor for such amounts as provided herein,then such failure to make payment
to Lessor shall constitute an Event of Default pursuant to Section 24 of this Ground Lease.
Section 8. Compliance by the Lessee with Governmental Requirements. At all
times during the Term,the Lessee shall conform to, obey,and comply in all material respects with
all Governmental Requirements that in any way are applicable to this Ground Lease or the use or
operation of the Premises or any repair, replacement, demolition, renovation, construction,
restoration,or excavation being done on or to the Premises. The Lessee, in its own name and at its
sole cost and expense,shall have the right to contest the validity of any Governmental Requirement
contemplated under this Section. The Lessee shall use its best efforts not to use the Premises or
any part thereof;or to suffer or to permit the Premises or any part thereof to be used, in any manner
that would constitute a legal nuisance or an unreasonable annoyance to any resident,employee,or
visitor to the Project or for any hazardous purpose, or for any other purpose that is inconsistent
with the use restrictions set forth in Section II of this Ground Lease or the Project restrictions as
set forth in the City Development Agreement. In the event, at any time during the Term, or
thereafter, as the result of the Lessee's acts or omissions to act during the Term, any addition,
alteration, change, or repair or other work of any nature, structural or otherwise, shall be lawfully
required or ordered by an applicable Governmental Authority or become necessary on account of
any Governmental Requirement then in effect, or on account of any other reason with respect to
the Premises, the entire expense thereof,regardless of when the same shall be incurred or become
due, shall be paid by the Lessee and, in no event, shall the Lessor be called upon to contribute
thereto or do or pay for any work of any nature whatsoever on or relating to the Premises.
Section 9. Quiet Enjoyment; Environmental Warranty.
(a) Ouiet Enjoyment. The Lessor represents and warrants that it owns fee simple,
marketable title to the Property subject to no restrictions, liens, or other encumbrances other than
Permitted Encumbrances. The Lessor further covenants and agrees that,throughout the Term, the
Lessee may peaceably and quietly enjoy the Property subject, however, to zoning and land use
restrictions, Permitted Encumbrances, and the Lessee's fulfillment of the covenants and
agreements contained herein.
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(b) Environmental Warranty. The Lessor, represents, warrants and covenants to the
Lessee that:
(i) as of the date hereof, to Lessor's knowledge and without independent
investigation or inquiry, the Property is in full compliance with all Environmental Laws
(as defined in Section 31(b));
(ii) as of the date hereof, to Lessor's knowledge and without independent
investigation or inquiry, and except as disclosed in the Environmental Reports, (A) there
are no Hazardous Materials (as defined in Section 31(b)) that have been spilled, disposed
of,or otherwise released at,on,under or about the Property,that are or have been migrating
to or from the Property, or otherwise are located on the Property, regardless of source, and
(B) there are no Hazardous Materials that originated at or otherwise are related to or have
affected the Property and have caused or threatened to cause any environmental
contamination or otherwise have caused or threatened to cause any liability under any
Environmental Laws; (C)there are no,and to the Lessor's knowledge,never have been any
underground storage tanks, above-ground storage tanks, wastewater impoundments, or
areas used for waste treatment, storage, or disposal activities at, on, in, or under the
Property; and(D)there are no activities or conditions that exist,and to Lessor's knowledge,
have ever existed and remain unresolved at,on, in,under, or otherwise associated with the
Property that violate any Environmental Laws or could reasonably be expected to result in
any claim or liability under any Environmental Laws.
Section 10. Construction of Improvements.
(a) The Project shall be developed and constructed in accordance with, and subject to
all requirements set forth in,the City Development Agreement,which provisions are incorporated
by reference as if fully set forth herein. As of the Commencement Date,Lessee expressly assumes
all of the obligations of the Developer under the City Development Agreement (except for any
obligations which have been fully satisfied or performed by the Developer prior to the
Commencement Date). In addition to the foregoing, the Lessee shall enter into a Development
Agreement with Servitas, LLC, as Developer, which shall contemplate the Developer's entering
into the Construction Contract and the Architect's Agreement for the development of the Project,
in accordance with the City Development Agreement.
(b) Lessee's Security for Performance. As security for the Lessee's performance
hereunder as it relates to the design and construction of the Project,the Lessee grants to the Lessor
a security interest in the Construction Documents as provided in,and subject to the provisions of,
Section 12(a)hereof,which Construction Documents have been assigned by Developer pursuant
to the Developer Assignment.
, (c) Default in Construction. In the event the Developer, the General Contractor, or the
Architect shall fail to perform in accordance with the provisions of any of the Construction
Documents to which it is a party in connection with the design, acquisition, construction,
furnishing,and/or equipping of the Project,the Lessee shall exercise all of the rights and remedies
available to the Lessee in each such Construction Document(s)in consultation with the Lessor. If
an Event of Default shall occur and be continuing or if the Lessee shall default under the
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Development Agreement, the Lessor may, subject to the rights of the Trustee and the provisions
of Sections 12(a) and 36(i) hereof, assert the rights of the Lessee under the terms of the
[Development Agreement], the Construction Contract, and the Architect's Agreement.
(d) Commencement of Construction. The Lessee shall commence and pursue to
completion the design, acquisition, construction, furnishing, and equipping of the Project on the
Property and associated site development on the Project outside the boundaries of the Property,
in accordance with the Construction Documents and in accordance with the Schedule of
Performance.
(e) Construction Approvals by the Lessor. Prior to commencing any excavation,
construction, paving, or any other work associated with the Property or the Project, the Lessee
shall deliver to the Lessor for its approval three(3)sets of the proposed Plans and Specifications.
The right of approval of the Lessor with respect to the Plans and Specifications shall include,but
not be limited to,the compatibility of the exterior appearance of any improvement with the public
activities of the Lessor on adjacent portions of the Project. The Lessor shall approve or reject the
proposed Plans and Specifications in accordance with the requirements of the City Development
Agreement. Failure to approve or reject any proposed Plans and Specifications within the time
periods specified in the City Development Agreement shall be deemed approved by the Lessor.
The Lessor agrees not to withhold unreasonably the approval required by this subsection and the
City Development Agreement.Approval of submissions or resubmissions by the Lessor shall not
relieve the Lessee from the obligation to obtain all other necessary approvals and permits required
by all Governmental Authorities or from complying in all material respects with the Plans and
Specifications,the Construction Documents, and all applicable building codes and ordinances.
(f) Modifications to Plans and Specifications. Once the Plans and Specifications shall
be submitted to and approved by the Lessor or the proposed Plans and Specifications shall be
deemed approved in accordance with subsection (e) of this Section, no changes or material
changes, modifications, or alterations to the Plans and Specifications may be made without the
prior written consent of the Lessor, which consent shall not be unreasonably withheld,
conditioned, or delayed. The Plans and Specifications must at all times continue to comply with
the requirements of this Ground Lease. If the Lessee seeks to make a change, modification or
alteration to the Plans and Specifications,the Lessee shall provide a written request to the Lessor,
seeking approval of the change, modification or alteration. The Lessor shall either approve the
proposed changes to the Plans and Specifications or specify the particular changes with
reasonable detail,if possible,which must be made to such document(s)for them to be reasonably
acceptable to the Lessor, in accordance with the requirements of the City Development
Agreement.The Lessee shall incorporate such revisions as are reasonably acceptable to the Lessee
and submit the same for the Lessor's approval or rejection, within the timeframes specified in the
City Development Agreement. If Lessor does not notify the Lessee in writing within the
applicable timeframes of any changes the Lessor desires to be made to the proposed changes to
the Plans and Specifications, then such change or modification shall be deemed approved.
(g) Construction According to Approved Plans. All construction activities must be
coordinated with the appropriate departments of the Lessor. A mandatory pre-construction
meeting shall be conducted by the Lessee prior to the start of any construction activities for the
purpose of reviewing security procedures, utility coordination, access to the Property, and
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construction coordination issues. The meeting shall be attended, at a minimum, by the Lessor
Representative (FPC Representative), the Lessee, the Developer, and the General Contractor's
project manager and superintendent. All building materials for the Project must be new and of
good quality in accordance with the Construction Documents and the Plans and Specifications.
The Lessor reserves the right, at the Lessor's sole cost and expense, to monitor the Lessee's
construction of the Project from its inception, and the Lessor shall be permitted to participate in
all construction meetings contemplated by the Construction Documents and to receive all reports
of the Independent Engineer(as defined in the Loan Agreement);provided that the failure of the
Lessor Representative (FPC Representative) to attend any such construction meeting of which
they, he, or she shall have been notified shall not cause a delay in the holding thereof on the
scheduled date thereof. At a minimum, the following restrictions must be placed upon
construction activities, and the Lessee shall provide for the incorporation of these restrictions in
the Construction Documents:
(i) access to the construction site shall be limited to those involved with the
work;
(ii) for construction activities requiring access to the Lessor's drives and parking
areas, access shall be restricted to those times approved by the Lessor,which approval will
not be unreasonably withheld;
(iii) construction activities shall not unreasonably interfere with entry or exit to
the Project, Project parking or drives,or pedestrian circulation paths or walks without prior
written consent from the Lessor;
(iv) the Lessee shall notify the Lessor in writing at least seventy-two (72) hours
in advance when coordination meetings requiring the Lessor's participation shall be
required;
(v) the Lessee shall provide an eight foot(8')high chain link security fence(or
higher, if required to comply with any Governmental Requirements, and which fence may
not contain razor or barbed wire) with lockable gates at the perimeter of the construction
site and staging area.
(vi) the Lessee, throughout the construction period, shall be responsible for the
enforcement of discipline and good order among the workers on the site;
(vii) Project toilet facilities and parking areas shall not be used by construction
personnel;
(viii) signage, which shall be subject to the prior written approval of the Lessor
Representative (FPC Representative), shall be provided and maintained at all entrances to
the Project to direct deliveries, construction personnel, etc. to the construction site;
(ix) the Lessee and the Lessee's contractors shall not bury or burn or otherwise
dispose of construction debris on the Property or on any other portion of the Project; and
(x) any other requirements set forth in the City Development Agreement.
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(h) Payment of Bills for Construction.The Lessee covenants and agrees to pay or cause
to be paid, currently as they become due and payable in accordance with the terms of the
Construction Documents and the Bond Documents, all bills for labor, materials, insurance, and
bonds,and all fees of architects, engineers,contractors,and subcontractors and all other costs and
expenses incident to any construction in or on the Premises; provided, however, that the Lessee
may, in good faith, in its own name, dispute and contest any such bill, fee, cost, or expense, and
in such event, any such item need not be paid until adjudged to be valid. Unless so contested by
the Lessee, all such items shall be paid by the Lessee within the time provided by law, and if
contested, any such item shall be paid before the issuance of an execution on a final judgment
with respect thereto. The Lessee shall provide the Lessor Representative (FPC Representative)
with copies of each Application for Payment(and all supporting documentation)submitted by the
General Contractor,each Certificate of Payment issued by the Architect prior to payment thereof,
and evidence of payment of each such Application for Payment.
(i) All Liens and Rights are Subordinate to the Lessor. Except for the rights of the
Trustee and/or any other Permitted Leasehold Mortgagee, including, without limitation, their
respective rights referenced in Sections 10(b), 12(a), 26, and 34 hereof, the Lessee's rights, as
well as the rights of any other person or entity, including, but not limited to, any mortgagee,
architect, independent contractor, assignee, sublessee, sub-contractor, prime or general
contractor, mechanic, laborer, materialman, or other lien or claim holder, shall always be and
remain subordinate, inferior, and junior to the Lessor's title, interest, and estate in the Property
the Premises, and this Ground Lease. The Lessee shall not create or permit to be created or to
remain, and shall discharge, any lien, encumbrance, or charge levied on account of any
mechanic's, laborer's, or materialman's lien, or any security agreement, conditional bill of sale,
title retention agreement, chattel mortgage, or otherwise (a "Lien") that might or does constitute
a lien, encumbrance, or charge upon the Premises, or any part thereof, or the income therefrom,
having a priority or preference over or ranking on a parity with the estate, rights,or interest of the
Lessor in the Premises or any part thereof;or the income therefrom.Nothing in this Ground Lease
shall be deemed or construed in any way as constituting the consent or request of the Lessor,
express or implied, by inference or otherwise, to the filing of any Lien against the Premises by
any contractor, subcontractor, laborer, materialman, architect, engineer, or other Person for the
performance of any labor or the furnishing of any materials or services for or in connection with
the Premises or any part thereof.
(j) Completion of Construction by the Lessor. The Lessor acknowledges that the
Lessee has collaterally assigned to the Trustee all of the Lessee's right,title,interest,and remedies
in and to the Construction Documents pursuant to the Assignment of Contracts and Agreements,
and has secondarily assigned the same to the City,subject to the rights of the Trustee.The Lessee
covenants and agrees that in the event (i) the Lessee shall abandon or fail to complete the
construction of Improvements undertaken by the Lessee in accordance with all material
requirements hereof, (ii) such failure shall not be solely the result of the occurrence of an Event
of Default, and (iii) the Trustee notifies the Lessor in writing of its election not to complete
construction of such Improvements pursuant to the terms of the Assignment of Contracts and
Agreements, the Lessor may, at its option (but without any obligation so to do and without
prejudice to any other rights the Lessor may have under this Ground Lease) complete the
acquisition, construction, furnishing, and equipping of the Project as an expense of the Project
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and, as nearly as practicable and proper, according to the Plans and Specifications previously
approved or deemed approved by the Lessor.
(k) Title to the Improvements. The title to all Improvements now or hereafter located
on the Property including those to be constructed in accordance with the Plans and Specifications
and the Construction Documents shall be vested in the Lessee until the expiration of the Term or
earlier termination of this Ground Lease and payment in full of any then Outstanding Bonds, at
which time all title to and ownership of said Improvements shall automatically and immediately
• vest (without the necessity of any further action being taken by the Lessee or the Lessor or any
instrument being executed and delivered by the Lessee to the Lessor) in the Lessor.
(1) Architects, Engineers, Contractors, Specialists, and Consultants. The Lessee shall
require, or cause the Developer or the General Contractor to require, any architects, engineers,
contractors, subcontractors, specialists, and consultants engaged in connection with the design,
acquisition, construction, furnishing, and equipping of the Project to perform their respective
obligations under the terms of the Construction Documents to be licensed in accordance with
Florida law and to obtain and maintain payment and performance bonds pursuant to subsection (o)
of this Section, and as required by the City Development Agreement.
(m) Permits, Laws, and Ordinances. The Lessee shall as a construction expense,
comply and cause its contractors and subcontractors to comply in all material respects with all
Governmental Requirements of all Governmental Authorities that may now or hereafter, from
time to time, be established and that are or shall be applicable to the Lessee as they relate to the
Project,including without limitation,the Americans With Disabilities Act of 1990,and shall take,
as otherwise provided herein, all action necessary to cause the Project to comply in all material
respects with all provisions of the Construction Documents,the Loan Agreement,and this Ground
Lease applicable to the Lessee.
(n) Construction Site. The Lessee shall cause the Developer to confine its operations
to the Property and shall prohibit the Developer from storing any material or equipment on
property of the Lessor outside the boundaries of the Property, except as approved in writing and
subject to such conditions as may be specified and approved by the Lessor. The Lessee shall
protect all work and shall at all times keep and cause its contractors to keep the construction site
reasonably clean and free from waste materials and rubbish.
(o) Payment and Performance Bonds.The Lessee shall provide or cause to be provided
to the Lessor payment and performance bonds in a form and from a surety approved by the Lessor,
in accordance with the Construction Documents,to include requiring the General Contractor and
appropriate subcontractors to provide payment and performance bonds. The bonds shall be dual
obligee surety bonds payable in favor of the Trustee,as primary obligee,and in favor of the Lessee
and the Lessor as additional obligees.
(p) Reports and Information. The Lessee shall provide the Lessor with copies of all
material documents and correspondence provided to or generated by the Lessee in connection
with the performance of the Construction Documents including those related to the satisfaction
of the items in the Schedule of Performance and shall provide the Lessor with monthly progress
reports in a form reasonably satisfactory to the Lessor demonstrating compliance with the
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construction requirements of the Plans and Specifications and the Construction Documents and
this Ground Lease for the previous month. In addition, the Schedule of Performance must be
updated at least monthly to assure the Lessor that construction of the Project will be complete in
sufficient time to allow for occupancy thereof on or before October 1, 2023. The Lessee shall
deliver or cause to be delivered to the Lessor Representative (FPC Representative) copies of all
soil reports, surveys, hazardous wastes or toxic materials reports, feasibility studies, and other
similar written materials prepared for the Lessee pursuant to the Construction Documents or the
Bond Documents with respect to the Property or the Project within ten (10) days after receipt by
the Lessee.
(q) Substantial Completion of the Project.As soon as practicable(however,in no event
to exceed six (6) calendar months) after the Substantial Completion of the Project, the Lessee
shall furnish to the Lessor Representative:
(i) one complete set of final "as-built" Plans and Specifications of the
completed Project in digital auto-CAD format;
(ii) a current, accurate, properly labeled, and certified (by the hereafter stated
surveyor or engineer), "as-built" plat of survey prepared by a Florida registered land
surveyor or professional engineer depicting to scale the location of the completed Project,
as the same have been constructed; and
(iii) one complete set of operations and maintenance manuals for all systems,
equipment, furniture, and fixtures relating to the Project of the Project; and
(iv) any other documentation that may be required pursuant to the City
Development Agreement.
(r) Failure to Provide Project on Schedule. If the Lessee shall not deliver the number
of residential units contemplated in the Construction Documents in accordance with the Schedule
of Performance for the Project, the Lessee shall be liable for the incremental costs of providing
housing for Eligible Residents who shall have entered into Occupancy Agreements to occupy
residential units within the Project, but who shall not be permitted to occupy such units on or
before the guaranteed date of delivery thereof(collectively, the "Affected Residents" and each,
an "Affected Resident"), to the extent required by the relevant Occupancy Agreement.
Incremental costs means the sum of:
(i) the cost of alternative housing for each Affected Resident;
(ii) the cost of any necessary and reasonable storage facilities for possessions
of each Affected Resident; and
(iii) any necessary and reasonable moving services for each Affected Resident
from such housing to the Project; or
(iv) as an alternative to (i) through (iii), and at the election of each Affected
Resident, a daily amount equal to his or her daily rent under his or her lease, sublease,
license, rental, or other similar agreement.
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If any Workforce Housing Units shall not be delivered for occupancy on time as described
above, Lessee shall exercise its good-faith diligent efforts to coordinate the execution of
Occupancy Agreements with the date for Substantial Completion of the Project, so as to
minimize costs and disruption to Eligible Residents.
Section 11. Operation of the Project.
(a) Use of Premises. Throughout the Term of this Ground Lease, Lessee shall use the
Premises solely for the Project purposes as set forth in the City Development Agreement, which
purposes shall be limited to the operation of the Workforce Housing Units, Dormitory Housing,
and ground-floor cultural or retail uses,provided,however,that in no event shall any such ground
floor cultural or retail uses include any of the Prohibited Uses, as set forth in Section 11(1) below.
(b) Lessee's Obligation to Continuously Operate. Upon completion of construction of
the Project, the Lessee shall continuously operate the Premises to serve Eligible Residents (with
the exception of the ground floor cultural or retail uses) and shall enter into the Initial Asset
Management Agreement.
(c) All Workforce Housing Units shall be marketed and rented solely to Eligible
Residents. The Project intends ultimately to achieve a Unit Mix that includes not less than fifty
percent (50%) of such units rented to Eligible Residents earning AMI of 80% or less, and the
remaining units rented to Eligible Residents earning between 80% and 120% AMI (the "Target
Unit Mix"). The monthly rent for the Workforce Housing Units shall not exceed the rent limit
by number of bedrooms in unit and household income for the AMI category applicable to the
Workforce Housing Units in question, as determined from time to time. The current projected
annual budgets reflected in the pro forma for the Project, anticipate a need for the a Unit Mix at
the time of opening to be 100% of the Workforce Housing Units (i.e., all 80 units)as 120% AMI
units. When the Annual Budget is developed in respect of each Annual Period,Lessor and Lessee
shall, if possible, modify the Unit Mix by reallocating units from 120%AMI units to 100% AMI
and/or 80%AMI units to approach the Target Unit Mix as closely as possible,while ensuring, as
of the date each such Annual Budged is developed, the Project's ability to repay the Series 2022
Bonds, to cover all operating expenses and meet the debt service coverage requirements of
Section 510 of the Indenture for disbursement of the Rent. The restrictions relating to the
Workforce Housing Units shall extend for the duration of the Term,notwithstanding the durations
otherwise identified in Chapter 58 of the City Code.During the Term,Lessee shall strictly adhere
to the Workforce Housing Unit Compliance Procedures set forth in Exhibit"D", attached hereto
and incorporated herein by this reference.
(d) The following acceptance priorities shall be applied to otherwise income-eligible
individuals who apply for Workforce Housing Units shall be as follows:
(i) Tier 1 —Artists practicing in Miami-Dade County; City of Miami Beach
employees, including,without limitation,City of Miami Beach law enforcement personnel
and firefighters;Area Educators and nurses employed within the City of Miami Beach;and
veterans who are either employed within the City of Miami Beach or whose last place of
residence was within the City of Miami Beach;
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(ii) Tier 2—workers employed within the City of Miami Beach in the hospitality
and entertainment industries; and
(iii) Tier 3 — Any other workers employed within Miami-Dade County, with
priority for income-eligible workers employed within the City of Miami Beach.
(e) Any Workforce Housing Unit remaining vacant for at least sixty (60) consecutive
days may be offered and leased to any other Eligible Resident in a subsequent tier.
(f) Prohibited Uses.
(i) With respect to the Workforce Housing Units, any rentals for a period of
less than six months and one day shall be strictly prohibited.
(ii) With respect to the ground-floor cultural or commercial retail uses, in no
event shall the ground-floor space be rented for any of the following purposes:
(A) the sale,as its principal business purpose,of any merchandise which
such Person in the course of its normal business practice, purchases at
manufacturers'clearances or purchases of ends-of-runs,bankruptcy stock, seconds,
or other similar merchandise;
(B) the sale of insurance salvage stock, fire sale stock, merchandise
damaged by or held out to be damaged by fire;
(C) a bankruptcy sale or going-out-of-business sale or liquidation sale
or any similar sale;
(D) the sale of medical marijuana or paraphernalia incidental thereto;
(E) coinbox entertainment (pinball, video games, moving pictures
operated by coins);
(F) casino gambling, or games of chance or reward;
(G) any unlawful or illegal business,use or purpose,or for any business,
use or purpose which is immoral or disreputable (including "adult entertainment
establishments"and"adult"bookstores) or extra-hazardous;
(H) any purpose that constitutes a nuisance of any kind (public or
private);
(I) check cashing facilities;
(J) pawn shops;
(K) the sale of firearms;
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(L) tattoo parlors, fortune tellers,psychics, palm readers, body piercing
shops;
(M) political offices;
(N) military recruiting;
(0) consular, legation or any other offices of foreign governments;
(P) tire sales;
(Q) the sale of animals or birds of any kind and/or products of a nature
typically sold in pet shops;
(R) the sale of major appliances as a primary business;
(S) any "Private Use" as defined in this Section. "Private Use" means
(a)the conduct of any activity or activities constituting a trade or business(or group
of trades or businesses)carried on by any person or entity other than Lessee,a state
or local governmental unit or a 501(c)(3)organization or(b) any unrelated trade or
business (as defined in Section 513(a) of the Code) or any business not related to
the exempt purpose of Lessee, a state or local government or a 501(c)(3)
organization. Private Use shall also include, without limitation, the Initial Asset
Management Agreement, and the lease or rental of the Premises or any part thereof
to,third parties that are not organizations described in Section 501(c)(3)of the Code
using the Premises in a manner substantially related to their and Lessee's exempt
purpose. The amount of Private Use is measured over the remaining term of the
lease based on the portion of the total square footage of the Premises subject to the
Private Use arrangement and the portion of time the Private Use takes place as
compared to the aggregate time the Premises actually are used for all purposes. A
lease or rental of the Premises that is not an unrelated trade or business activity is
not a Private Use if the term of such lease or rental is(i) not more than one hundred
(100) days (including any renewal options) if the compensation under the lease or
other arrangement is determined, or redetermined at the time of any renewal, at
generally applicable, fair market value rates but use pursuant to such leases is not
reasonably available to natural Persons not engaged in a trade or business, or (ii)
not more than fifty (50) days (including any renewal options) if the compensation
under the lease or other arrangement is determined, or redetermined at the time of
any renewal, in a negotiated arm's length transaction and compensation under the
lease is at fair market value; and
(T) in any manner that will violate any approvals of applicable
Governmental Authorities, Certificate of Occupancy or certificate of use for the
Premises, or which will violate any Governmental Requirements (collectively, the
"Prohibited Uses").
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(g) Such Prohibited Uses shall be reviewed and amended on terms mutually agreeable
to the City and Lessee not less than once each twenty (20) years. Lessee shall ensure that the
provisions of this Section 11 are incorporated as a material term in the Asset Management
Agreement,to ensure the Asset Manager's compliance with all applicable use restrictions set forth
herein. Lessee shall further cause for the Operating Plan (as defined in paragraph (1) below) to
be developed consistent with the use restrictions set forth in this Section 11.
(h) Management of Improvements. The Lessee shall not modify, amend, or renew the
Initial Asset Management Agreement or enter into any other Asset Management Agreement with
a new Asset Manager for the Project without the City Manager's prior written consent, which
consent shall not be unreasonably withheld.
(i) Administration of Funds. The Lessee and the Lessor agree that at all times while
the Bonds are Outstanding, all gross revenues of the Project shall be deposited with the Trustee
and administered in accordance with the terms of the Indenture.
(j) Fixed Charges Coverage Ratio. Commencing on the first full Annual Period
following Substantial Completion of the Project, the Lessee shall use commercially reasonable
efforts to operate the Project such that the Fixed Charges Coverage Ratio shall at all times be not
less than 1.20. Beginning with the Annual Period ending December 31, 2024, the Lessee shall
deliver to the Lessor a certificate disclosing the Fixed Charges Coverage Ratio as of the end of
each Annual Period,at the time of the delivery of the Lessee's annual audited financial statements
pursuant to subsection(k)below,calculated based upon the relevant information reflected in such
annual audited financial statements.Notwithstanding the foregoing or any other provisions in this
Ground Lease to the contrary,the Lessee's failure to maintain a Fixed Charges Coverage Ratio of
not less than 1.20 shall not constitute an "Event of Default" hereunder.
(k) Annual Audited Financial Statements.The Lessee shall, not later than one hundred
eighty (180) days following the end of each Annual Period commencing with the Annual Period
ending December 31,2024,provide to the Lessor its annual audited financial statements,prepared
by an independent auditor in accordance with GAAP. Additionally, at the time of the Lessee's
delivery of its annual audited financial statements, the Lessee shall provide a certificate to the
Lessor setting forth the Fixed Charges Coverage Ratio for such Annual Period, calculated based
upon the relevant information reflected in such annual audited financial statements.
(1) Operating Plan. The Lessee and the Asset Manager agree to work with the Lessor
to establish an operating plan, which shall address, among other matters, standard forms of
occupancy agreements; the priority of Eligible Residents in accordance with the tiers for the
booking of Eligible Residents as provided in Section 11(d)of this Ground Lease;the process and
record-keeping requirements for verification of income-eligibility and other requirements for
Eligible Residents, along with a lottery system or other process for the selection and placement
of Eligible Residents within each of the priority tiers set forth in Section 11(d) of this Ground
Lease, subject to the City Manager's approval of such selection process to ensure that the
placements of Eligible Residents are made fairly and equitably and free of favoritism or individual
bias; use of the Lessor's trademarks and service marks for purposes of advertising or marketing
the Project to Eligible Residents; details concerning the management and operation of the
Premises, including with respect to the provision of custodial/janitorial services, landscaping,
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maintenance/repairs of the Improvements, security services, utilities, resident complaints,
coordination of services with master sublessees, and the like; hours of operation for the Ground
Floor retail or cultural uses; and the use of the Lessor's online resources for purposes of
advertising and marketing the Project to Eligible Residents (collectively, the "Operating Plan").
The Operating Plan shall be subject to City'Manager approval, with such approval not to be
unreasonably withheld. Lessor and the Lessee mutually agree to review such Operating Plan on
not less than an annual basis in consultation with the Asset Manager, and such Operating Plan
may be revised from time to time at the mutual agreement of the Lessee and the Asset Manager,
subject to the approval of the City Manager as provided herein.
(m) Reserved.
(n) Parking. The Lessor shall provide access to up to fifty-eight(58)monthly parking
passes at the City garage facility located at 340 23`d Street ("Collins Park Garage"), with the
monthly parking passes available for purchase by the residents of the Workforce Housing Units,
at the then applicable City rate, on a first-come-first-served basis, so long as the Collins Park
Garage is operated by the City and open to the public. In the event of damage or other casualty
or force majeure event requiring the closure of the Collins Park Garage, either on a temporary
basis or otherwise, Lessor shall exercise diligent,good-faith efforts to identify an alternative City
public parking facility to accommodate the residents,subject to availability.
(o) Coordination of Services with MCB pursuant to Master MCB Sublease. Lessee
shall be responsible for coordination with MCB of any property-management related services in
connection with Miami City Ballet's use of the Dormitory Housing,in accordance with the Master
MCB Sublease, including, without limitation, the provision of adequate maintenance or repairs,
lighting, security (including, without limitation, any specific security arrangements that may be
required for the protection of minors utilizing the Dormitory Housing), resident complaints, or
other property-management related services.
(p) Lessor's Priority Right to Ground Floor Master Sublease. Prior to any rental or
occupancy of the ground floor portion of the Premises ("Ground Floor"), the Lessor shall have
the exclusive,priority right to enter into a Ground Floor Master Sublease, in order to activate the
Ground Floor for cultural purposes, at the Lessor's sole discretion, either directly through
Lessor's personnel or a third-party vendor providing management services to Lessor for the
Ground Floor activations, or via a sub-sublease to a cultural organization or other entity, for
cultural programming within the Ground Floor. Subject to mutual agreement between Lessor and
Lessee, Lessee anticipates that the initial annual rental charges to the Lessor for the Ground Floor
Master Sublease, inclusive of common area maintenance and utility charges, shall approximate
$62,634. In the event Lessor elects to not enter into a Ground Floor Master Sublease or any
extension thereto, Lessor shall provide Lessee with at least one hundred and eighty (180) days
prior written notice of Lessor's election to waive its priority rights to rent the Ground Floor, to
permit Lessee appropriate time to market the Ground Floor.The subsequent leasing of the Ground
Floor shall be subject to receipt by Lessee of Opinion of Bond Counsel (as defined in the Loan
Agreement).
Section 12. Security Interest.
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(a) Pledge, Assignment, and Grant of Security. As security for the Lessee's
performance of its obligations hereunder and subject to the rights of the Trustee,the Lessee hereby
assigns and pledges to the Lessor, and hereby grants to the Lessor a security interest in, all of the
Lessee's right, title, and interest in and to the Assigned Agreements, including,without limitation:
(i) all rights of the Lessee to receive moneys due and to become due under or pursuant to the
Assigned Agreements; (ii)all rights of the Lessee to receive proceeds of any insurance, indemnity,
warranty, or guaranty with respect to the Assigned Agreements; (iii) claims of the Lessee for
damages arising out of or for breach of or default under the Assigned Agreements; and (iv) the
right of the Lessee to terminate the Assigned Agreements, to perform thereunder, and to compel
performance and otherwise exercise all remedies thereunder. The Lessor acknowledges that,
pursuant to the Assignment of Contracts and Agreements, the Lessee will grant to the Trustee
security interests in various items of collateral including, but not limited to, the Assigned
Agreements and certain rights and remedies with respect thereto (collectively, the "Trustee
Security Interests"). Any and all security interests ;granted to the Lessor by the Lessee as security
for the performance by the Lessee's of its obligations under this Ground Lease(including, but not
limited to,the security interest granted in this Section) shall be subject to the provisions of Section
36(i) hereof and subordinate in all respects to the Trustee Security Interests.
(b) Further Action and Documents. The Lessee agrees that from time to time, at the
expense of the Lessee, the Lessee will promptly execute and deliver all further instruments and
documents, and take all further action,that may be necessary or desirable,or that the Lessor may
reasonably request, in order to perfect and protect any pledge, assignment, or security interest
granted or purported to be granted hereby or to enable the Lessor to exercise and enforce its rights
and remedies hereunder with respect to any Assigned Agreements.
(c) Financing Statements.The Lessee hereby authorizes the Lessor to file one or more
financing and/or continuation statements, and amendments thereto, relating to all or any part of
the Assigned Agreements without the signature of the Lessee where permitted by law. A
photocopy or other reproduction of this Ground Lease or any financing statement covering the
Assigned Agreements or any part thereof shall be sufficient as a financing statement where
permitted by law.
(d) Lessor Appointed Attorney-in-Fact. The Lessee hereby irrevocably appoints the
Lessor the Lessee's attorney-in fact,with full authority in the place and stead of the Lessee and in
the name of the Lessee or otherwise,if an Event of Default shall have occurred and be continuing,
to take any action and to execute any instrument that the Lessor may deem necessary or advisable
to accomplish the purposes of this Ground Lease, subject in all cases to the rights of the Trustee
and the provisions of the Bond Documents,including,without limitation,the obligation to deposit
all project revenues with the Trustee, including,without limitation:
(i) to obtain insurance required to be paid to the Lessor pursuant to Section 17
hereof in the event the Lessee shall fail to obtain such insurance;
(ii) to ask, demand, collect, sue for, recover, compromise, receive, and give
acquittance and receipts for moneys due and to become due under or in connection with
the Assigned Agreements; and
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(iii) to file any claims or take any action or institute any proceedings that the
Lessor may deem necessary or desirable to enforce compliance with the terms and
conditions of any Assigned Agreement or the rights of the Lessor with respect to any of
the Assigned Agreements.
(iv) Nothing contained herein shall be construed as modifying the flow of funds
and uses under the Indenture.
(e) Lessor May Perform. If the Lessee shall fail to perform any agreement contained
herein, the Lessor may itself perform, or cause performance of, such agreement, and the
reasonable expenses of the Lessor incurred in connection therewith shall be payable by the Lessee
to the Lessor within forty-five(45) days after demand therefor by the Lessor as Expenses.
(f) Lessor's Duties.The powers conferred on the Lessor hereunder are solely to protect
its interest in the Assigned Agreements and shall not impose any duty upon it to exercise any such
powers.The Lessor shall have no duty to take any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Assigned Agreements.
Section 13. Assignment of Lease. Except as otherwise provided in Section 26 hereof,
the Lessee and its successors and assigns, shall not have the right to assign, transfer or sublease
this Ground Lease or any interest herein or any right or privilege appurtenant hereto or to sublease
the Premises or any portion thereof, unless the written consent of the Lessor, by and through the
City Commission at its sole and absolute discretion, shall first be had and obtained. Any
assignment or transfer for which consent is required but which is nevertheless made without such
written consent shall be void ab initio. Any other provisions hereof to the contrary
notwithstanding, the Lessee shall, without the consent or approval of the Lessor,have the right, in
the ordinary course of business, to enter into the Master MCB Sublease, the Occupancy
Agreements in accordance with the criteria set forth in the Asset Management Agreement,and the
sublease of the Ground Floor in accordance with Section 11(p) hereof.
Section 14. Maintenance of Property. The Lessee shall, at all times during the Term,
at the Lessee's sole cost and expense, keep and maintain the Premises and all adjoining areas out
to the perimeter pavement, and appurtenances and every part thereof, and any and all buildings,
other structures or Improvements that may exist on, in, or be made a part of the Premises, in good
order and condition, ordinary wear and tear excepted, and make all necessary repairs thereto,
interior and exterior, structural and nonstructural, ordinary and extraordinary, and foreseen and
unforeseen. -The Lessee shall be required to follow any maintenance schedule proposed by the
Developer. In the event the Lessee shall fail to perform any of its obligations as required hereunder,.
after notice and right to cure pursuant to the terms and provisions of Section 24(a) hereof, the
Lessor may (but shall not be required to) perform and satisfy same, and the Lessee hereby agrees
to reimburse the Lessor for the reasonable cost thereof promptly upon demand as an Expense under
the Bond Documents. The Parties agree that it shall be the Lessee's sole responsibility at all times
during the Term to maintain the Premises in a first-class condition. All required maintenance and
repair during the Term shall be complete when the Premises shall be surrendered to the Lessor.
Section 15. Annual Budget. (a)Not later than one hundred twenty (120) days prior to
the commencement of each Annual Period,the Lessee shall develop in good faith, in its discretion
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and after consultation with the Lessor, a line-item operating and capital budget for the Project for
each Annual Period or partial Annual Period (collectively, the "Annual Budgets" and each, an
"Annual Budget"), in accordance with Section 8.07 of the Loan Agreement, provided that for the
first Annual Period, Lessor shall develop such budget on or before the date that is not less than one
hundred twenty (120) days prior to the. date on which Lessor intends to begin to market the
Workforce Housing Units to prospective renters. The Annual Budget shall set forth among other
matters, those items usually contained in budgets of similar nature, including, but not limited to,
the following:
(i) the categories of anticipated Revenues and the projected amounts of each
category of such Revenues;
(ii) the amounts to be deposited to the Repair and Replacement Fund and any
other reserve fund established under the Indenture during such Annual Period and the
amounts contained therein as of the first day of such Annual Period;
(iii) all anticipated capital expenditures;
(iv) the projected reasonable amounts of all Expenses;
(v) sufficient information to explain the basis for the budgeted Revenues,
capital expenditures, and Expenses; and
(vi) the amount of projected Revenues sufficient to comply with any applicable
covenants contained in the Bond Documents.
(b) The Annual Budget shall reflect all anticipated Expenses paid, incurred,or accrued
or to be paid, incurred, or accrued by the Lessee or on behalf the Lessee by another Person, such
as(by way of example)the Asset Manager under the Asset Management Agreement. The Annual
Budget shall include any input provided by a budget oversight committee consisting of a
representative of the Lessee, Asset Manager, Lessor and MCB (for so long as MCB is in good
standing under the Master MCB Sublease for the Dormitory Housing) ("Budget Oversight
Committee").
(c) Following review and input by the Budget Oversight Committee, the Lessee shall
submit to the Lessor's City Manager for the City Manager's approval a proposed Annual Budget
not later than ninety (90) days prior to the commencement of each Annual Period(provided, for
the first Annual Period, Lessor shall submit such budget on or before the date that is not less than
ninety (90) days prior to the date on which Lessor intends to begin to market the Workforce
Housing Units to prospective renters). The City Manager(or the City Manager's designee) shall
give the Lessee notice of its approval of the Annual Budget as submitted or of its disapproval of
one or more of the matters contained therein not later than sixty (60) days prior to the
commencement of such Annual Period, or, if later, sixty (60) days after the Lessor shall have
provided the proposed Annual Budget to the Lessee. If the Lessor shall fail to give notice of
approval or disapproval in a timely manner,then the Annual Budget as submitted shall be deemed
approved by the Lessor. If the Lessor shall give notice of its disapproval, the Lessee and Lessor
promptly, in good faith; shall develop an Annual Budget on which they both may agree. In the
event that the Lessee and the Lessor fail to reach agreement not later than thirty (30) days prior
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to the commencement of an Annual Period for any reason,the Annual Budget for the then current
Annual Period, as increased for all Expenses (other than salaries and payroll expenses) by the
increase, if any, in the Consumer Price Index shall be implemented for the next Annual Period
until agreement is reached on a new Annual Budget. For the avoidance of doubt,in no event shall
salaries and payroll expenses be increased until such time as the Parties have reached agreement
on a new Annual Budget. If the proposed Annual Budget has not been approved prior to the
beginning of the Annual Period and contains provisions regarding the modification of rents for
the Annual Period, those rents shall be applied to the Project for the applicable Annual Period.
(d) From time to time during or in respect to an Annual Period, the Lessee shall have
the right to modify the Annual Budget in accordance with the Bond Documents, which
amendment shall be subject to the Lessor's prior written consent unless: (i) the amendment shall
be to reflect the receipt of insurance or condemnation proceeds; (ii) the amendment shall be for
an amount in respect to a line item(A)that does not increase or decrease,when added to all other
changes to that line item, either the original amount of that line item or an increased amount
approved by the City Manager(or the City Manager's designee) and then in effect by more than
ten percent (10%), and (B) that does not increase the original total amount of Expenses or an
increased amount approved in writing by the Lessor and then in effect by more than five (5)
percent (5%) or (iii) the amendment shall be necessary to preserve life or property. An Annual
Budget for an Annual Period,as so amended, shall,after such amendment,be the Annual Budget
for such Annual Period.Following any such modification of an Annual Budget,whether the same
requires Lessor's approval or not,Lessee shall submit the Annual Budget as so modified to Lessor
for its records.
(e) The Lessee shall operate the Project and make expenditures in connection with the
Project in accordance with the Annual Budget.
(f) For each month within an Annual Period,the Lessee shall submit to the Lessor not
later than thirty (30) days after the end of such month, a Budget Reconciliation Statement.
Section 16. Indemnifrcation Agreement. Subject to the limitations set forth in Section
36(1) of this Ground Lease,the Lessee hereby releases and agrees to indemnify and hold harmless
the Lessor and all of its trustees,officers,employees,directors,agents,and consultants(hereinafter
collectively referred to as the "Indemnitees")of and from any and all claims, demands, liabilities,
losses, costs, or expenses for any loss including but not limited to bodily injury(including death),
personal injury,property damage, expenses,and reasonable attorneys' fees to the extent due to any
negligent act or omission on the part of the Lessee, its agents, employees, or others (other than the
agents and employees of the Lessor, if any)working at the direction of the Lessee or on its behalf,
or due to the application of any pertinent federal, State, or local law, rule, or regulation or the
violation of by the Lessee, its agents, employees, or others (other than the agents and employees
of the Lessor, if any)working at the direction of the Lessee of any such federal, State,or local law,
rule, or regulation. This indemnification extends to the successors and assigns of the Lessee, and
this indemnification survives the expiration or termination of this Ground Lease and the dissolution
or, to the extent allowed by law, the bankruptcy of the Lessee. This indemnification does not
extend beyond the scope hereof and the Construction Documents and the work undertaken
thereunder, and does not extend to claims exclusively between the Parties arising from the terms
or regarding the interpretation hereof. Lessee shall cause for the Initial Asset Management
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Agreement (and any subsequent Asset Management Agreement), the Master MCB Sublease, and
Occupancy Agreements,and any vendor agreement between Lessee and any third-party involving
services in excess of$50,000 to release,indemnify and hold harmless the Indemnitees in the same
manner, and to the same extent, as Lessee has agreed to release, indemnify and hold harmless the
lndemnitees in accordance with this Section.
Section 17. Insurance. (a) General. It is the intent of the Parties that all risk of loss
relating to the Project be shifted from Lessee to insurance to the maximum extent practicable.
Accordingly, unless the Lessor shall otherwise agree in its sole discretion to maintain insurance
for the Project, the Lessee shall maintain, or cause to be maintained, insurance covering the risks
enumerated in items(i)through(vi)below. Such insurance shall be written on an occurrence basis
unless the Lessor shall otherwise consent in writing. Each policy shall provide that such insurance
shall be primary coverage without reduction or right of offset or contribution on account of any
insurance provided by the Lessor to itself or its officers,officials,or employees,that such insurance
shall not be altered or cancelled without thirty(30)days'written notice to the Lessor and that,with
the exception of professional liability and workers' compensation coverage, such policies shall
name the Lessor as an additional insured. The insurance policies purchased by the Lessee must be
issued by a company authorized to conduct business in the State and by a company acceptable to
the Lessor and that has a Best Policyholders Rating of"A"or better and with a financial size rating
of Class VIII or larger.Notwithstanding anything else herein contained,the rights of the Lessor to
any insurance policies covering the Premises or the Project (or any portion thereof) and any and
all proceeds paid or payable thereunder shall be in all respects junior and subordinate to the rights
of the Trustee under the Bond Documents or any other Primary Leasehold Mortgage.
(i) Construction Insurance Requirements.
(A) During the construction period,the Lessee shall cause the Developer
to cause the General Contractor to obtain and maintain in full force and effect: (1)
All Risk and Builder's Risk - Completed Value Form Property Insurance in
accordance with the Loan Agreement and this Ground Lease, and (2) payment and
performance bonds for labor and materials with respect to the Construction
Contract in accordance with the Loan Agreement this Ground Lease (and/or City
Development Agreement, as applicable).
(B) During the construction period, the Lessee shall cause the General
Contractor and the Architect to maintain professional liability (errors and
omissions) coverage for claims or damages arising from professional services
provided. Such policies shall include prior acts coverage sufficient to cover the
services under the applicable agreement, the limits of which shall not be less than
$5,000,000 per claim/$5,000,000 annual aggregate with a deductible or self-insured
retention amount not greater than. $500,000 per claim. Such insurance shall be
maintained during the term of such service provider's services, and for a period
equal to the statute of repose after completion of the services.
(ii) General Liability. Comprehensive general liability insurance providing
insurance (with deductible provisions not to exceed Twenty-Five Thousand Dollars
($25,000) per occurrence) covering all claims for bodily injury and property damage,
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including not less than One Million Dollars ($1,000,000)per occurrence and Two Million
Dollars ($2,000,000) in the aggregate, to include personal and advertising injury, general
aggregate, products and completed operations aggregate insurance beginning at the
completion of each Project component, and contract liability to cover all insurable
obligations under this Ground Lease.
(iii) Automobile.Commencing on the date any vehicle shall be acquired or hired
by the Lessee for use with respect to the Project, automobile liability insurance providing
insurance (with deductible provisions not to exceed Twenty-Five Thousand Dollars
($25,000) per occurrence) to the extent of not less than a combined single limit of One
Million Dollars ($1,000,000) per accident covering liability arising out of the use of any
Lessee vehicle or such vehicles used in conjunction with the Project,whether owned, non-
owned,or hired,and including personal injury protection and uninsured motorist protection
in the minimum statutory limits where required by law.
(iv) Workers'Compensation. Commencing on the date the first employee of the
Lessee shall be hired, workers' compensation coverage or other similar coverage covering
all of the Lessee's employees on the Premises, as required by the laws of the State,
including, with respect to workers' compensation insurance, Coverage B-Employer's
liability limits of: bodily injury by accident- Five Hundred Thousand Dollars ($500,000)
each accident; and bodily injury by disease - Five Hundred Thousand Dollars ($500,000)
each employee (and, in this regard, the Lessee shall require all subcontractors performing
work on the Project to provide an insurance certificate showing proof of workers'
compensation insurance);
(v) Fidelity Bonds. From and after Substantial Completion of the Project, the
Lessee shall maintain fidelity bonds or employee dishonesty insurance in the amount of
One Million Dollars ($1,000,000) for all officers, agents, and employees of the Lessee
(including, without limitation, all officers, agents, and employees of the Asset Manager)
with the responsibility of handling any revenues generated from the operation of the
Project.
(vi) Umbrella Coverage. Additional umbrella or excess liability coverage in the
amount of Ten Million Dollars ($10,000,000) in the aggregate, which shall include all
coverages required by(ii), (iii),and (iv)hereof.
• (vii) Commercial Property Insurance. From and after Substantial Completion of
the Project, Lessee shall maintain commercial property insurance in an amount of the
insurable value of all Improvements located on the Premises under an "all risk" form,
including damage by water,flood,tornado,hurricane and earthquake in an amount not less
than the replacement cost value of the Improvements and include coverage for business
interruption insurance (also referred to as "business income" or"loss of rents" insurance)
covering loss of revenues and other income by the Lessee by reason of total or partial
suspension of, or interruption in,the operation of the Project caused by covered damage to
or destruction of the Project in an amount not less than the Maximum Annual Debt Service
on the Bonds plus twelve (12) months' budgeted expenses (other than interest on the
Bonds) minus those expenses avoided as a result of and during the period of interruption.
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(b) Loss Payable Clauses. The contracts of insurance required by this Section shall
contain standard loss payable clauses in favor of any Permitted Leasehold Mortgagee,the Lessor,
and the Lessee as their respective interests may appear.
(c) Delivery of Insurance Certificates. Upon the commencement hereof and at each
policy renewal date, the Lessee shall furnish to the Lessor at the address set forth in Section 28
hereof an insurance certificate or renewal certificate evidencing all insurance required to be
carried by the Lessee in accordance with this Ground Lease, listing the Lessor,Trustee and Issuer
as the certificate holders. The insurance certificate must document that the liability insurance
coverage purchased by the Lessee includes contractual liability coverage to insure the indemnity
agreement as stated herein.
(d) Evidence of Payment of Premiums. The Lessee shall, within twenty (20) days of
, payment, furnish to the Lessor duplicate receipts or satisfactory evidence of the payment of all
premiums on any and all insurance required to be carried by the Lessee in accordance with this
Ground Lease.
Section 18. Police Services.The Premises shall be subject,at all times during the Term,
to the jurisdiction of the Lessor's police department.
Section 19. Damage and Destruction.
(a) Repair of Damaged Improvements. Should any Improvements be damaged or
destroyed by fire or any other casualty (collectively, a "Casualty") whatsoever during the Term,
the Lessee,except as hereafter provided in this subsection,shall,at its sole cost and expense,within
(i) ninety (90) days after receiving insurance proceeds with respect to any such Casualty or (ii)
within one hundred eighty (180) days from the date of such Casualty, commence the work of
repair, reconstruction, restoration, or replacement of the Improvements ("Reconstruction Work")
and shall prosecute the Reconstruction Work with all reasonable dispatch, so as to fully complete
such Reconstruction Work as expeditiously as reasonably possible consistent with the nature and
extent of the Casualty,with such Improvements to be repaired,reconstructed,or restored as nearly
as practicable to the same condition as prior to such Casualty. Anything in this Ground Lease to
the contrary notwithstanding, the period of time within which the Lessee shall be hereinabove
obligated to complete the Reconstruction Work shall be extended for the period of any delay in
said completion not within the reasonable control of the Lessee.
(b) To the extent any Primary Leasehold Mortgagee exercises any right or option to
retain and apply any portion of the proceeds of any insurance (or condemnation awards) toward
payment in full of the sum secured by the Primary Leasehold Mortgage, Lessee shall diligently
and expeditiously undertake to secure and close on Leasehold Mortgage loans to finance the
Reconstruction Work,and thereafter,to commence and fully complete such Reconstruction Work
as expeditiously as reasonably possible consistent with the nature and extent of the Casualty.
(i) Notwithstanding the foregoing,if,during the last ten(10)years of the Initial
Term or any Renewal Term, the Improvements are totally destroyed or so damaged as to
render them unusable, then (i) Lessee or the Lessor may terminate this Ground Lease by
delivery of written notice of such termination to the other Party not later than sixty (60)
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days after the occurrence of such Casualty,whereupon this Ground Lease will terminate as
of the date of such casualty. Upon such termination, the insurance proceeds shall be
payable as follows (subject in all cases to the requirements and rights of any Primary
Leasehold Mortgage): (A)first,to pay the principal balance of all indebtedness secured by
any Permitted Leasehold Mortgage then in effect, plus all interest accrued or to accrue on
such sums through the date of payment or redemption of such indebtedness, plus any other
direct out-of-pocket expenses incurred by the Lessee in connection with the casualty not
paid from the Operating Account which shall be directly paid to such Permitted Leasehold
Mortgagee and (B) second, the balance, if any, to the Lessor. If neither the Lessor nor
Lessee timely elect to terminate this Ground Lease in accordance with this Section,Lessee
shall restore the Premises in accordance with Section 19(a) hereof.
(c) Waiver of Subrogation. Where permitted by law, each Party hereby waives all
rights of recovery by subrogation or otherwise (including claims related to deductible or self-
insured retention clauses, inadequacy of limits of any insurance policy,insolvency of any insurer,
limitations or exclusions of coverage), against the other Party, and its respective officers, agents,
or employees.
(d) Inadequacy of Insurance Proceeds. Lessee shall use diligent, good faith efforts to
satisfy all conditions of any Permitted Leasehold Mortgage to permit release and disbursement of
such proceeds towards the costs of the Reconstruction Work. Notwithstanding anything to the
contrary set forth in this Ground Lease, Lessee's liability hereunder to timely commence and
•
complete restoration of the damaged or destroyed Improvements shall be absolute, irrespective
of whether the insurance proceeds received, if any,are adequate to pay for such restoration.
(e) No Lessor Obligation to Provide Property Insurance. Lessee acknowledges and
agrees that Lessor shall have no obligation to provide any property insurance on any
Improvements or for the Premises. If Lessor does provide any property insurance coverage,
Lessee acknowledges that such insurance shall be for the sole benefit of the Lessor and Lessee
shall have no right or claim to any such proceeds.
(t) Compliance. Lessee's compliance with the requirements of this Section 19 shall
not relieve the Lessee of its liability, or be construed to relieve or limit, Lessee of any
responsibility, liability, or obligation imposed under any other portion of this Ground Lease, or
by law, including any indemnification obligations which Lessee owes to Lessor.
(g) Right to Examine. The Lessor reserves the right, upon reasonable notice, to
examine the original or true copies of policies of insurance (including binders, amendments,
exclusions, riders and applications), or applicable portions of any master insurance policy, to
determine the true extent of coverage. The Lessee agrees to permit such inspection and make
available such policies or portions thereof at the offices of the Lessor.
(h) Personal Property. Any personal property of the Lessee or of others placed in the
Premises shall be at the sole risk of the Lessee or the owners thereof, and the Lessor shall not be
liable for any loss or damage thereto for any cause except as a result of the gross negligence or
willful misconduct of the Lessor or its employees, agents or contractors.
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(i) The Lessor and the Lessee specifically agree that, except as otherwise provided in
this Ground Lease, damage to or destruction of any Improvements on or within the Property at
any time during the Term,by fire or any other Casualty whatsoever, shall not work a termination
hereof or authorize the Lessee or those claiming by, through or under the Lessee to quit or
surrender possession of the Property or any part thereof, and shall not release the Lessee in any
way from its liability to pay the Lessor the Rent herein provided for,or from any of the provisions
hereof.
(j) Termination Prior to Completion of Reconstruction Work. In the event of the
termination hereof before the expenditure of the full amount of such insurance proceeds for the
Reconstruction Work, any unexpended balance thereof, including any interest previously earned
by such balance, shall, subject to paragraph (k) below, inure to and become the sole property of
the Lessor.
(k) Indenture Shall Control. Notwithstanding anything else herein contained, the
provisions of the Indenture shall control in all respects the receipt, handling, and application of
any and all insurance proceeds, it being acknowledged and agreed that the Trustee or such other
Primary Leasehold Mortgagee,as their respective interests may appear,shall have a first and prior
security interest therein.
Section 20. Condemnation.
(a) General. The term "condemnation" as used in this Ground Lease means the taking
or appropriation of property, or any interest therein, in exercise of the power or right of eminent
domain or such taking for public or quasi-public use or any state of facts relating to the taking or
appropriation of property that, without an actual taking or appropriation, shall result in direct or
consequential damages to the Project or to the Property or the leasehold interest therein. Such term
shall also be deemed to include to the extent not otherwise defined in this paragraph, a temporary
taking of the Property and/or the Project or any part thereof or the Improvements thereon for a
period of one year or more,and the taking of the leasehold interest created therein.
(b) Total Condemnation. If all of the Project and the Property (or such substantial
portion thereof as shall, in the Lessor's sole discretion, make it economically unfeasible to
continue to operate the remaining portion for the purpose herein) shall be so condemned, this
Ground Lease shall terminate on the date title to the Property shall vest in the condemnor;
provided,however, that such termination shall be without prejudice to the rights of the Lessor to
recover just and adequate compensation from any such condemnor. If this Ground Lease shall be
terminated as provided in this subsection, the Lessee shall pay the Rent for the year in which the
Property shall have been taken, up to the date of such termination. The Rent shall be payable
within sixty (60) days after the date this Ground Lease shall be terminated.
(c) Division of Award - Total Condemnation. Subject to the controlling terms and
conditions of the Indenture relating to the administration of condemnation proceeds, if the
Property and the Project shall be totally condemned as provided in subsection (b) above, the
condemnation proceeds shall be paid as follows:
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•
(i) the Lessee first shall be entitled to receive such portion of the condemnation
proceeds as shall equal the principal balance of all indebtedness secured by any Permitted
Leasehold Mortgage then in effect, plus all interest accrued or to accrue on such sums
through the date of payment or redemption of such indebtedness, l�us any other direct out-
of-pocket expenses incurred by the Lessee in connection with the condemnation not paid
from the Operating Account which shall be directly paid to such Permitted Leasehold
Mortgagee; and
(ii) the Lessor shall then be entitled to receive the balance of the condemnation
proceeds.
(d) Partial Condemnation.In the event of a taking of less than a total taking as provided
in subsection (b) above, this Ground Lease shall terminate as to the condemned portion of the
Property on the date title to the condemned portion of the Property shall vest in the condemnor;
provided,however, that such termination shall be without prejudice to the rights of the Lessor to
recover just and adequate compensation from any such condemnor. The provisions hereof shall
remain in full force and effect as to the portion of the Property not condemned.
(e) Division of Award- Partial Condemnation. Subject to the controlling terms and
conditions of the Indenture relating to the administration of condemnation proceeds, if the
Property and the Project shall be partially condemned as provided in subsection (d) above, the
condemnation proceeds shall be paid as follows:
(i) the Lessee first shall be entitled to receive such portion of the condemnation
proceeds as shall equal the principal balance of all indebtedness secured by any Permitted
Leasehold Mortgage then in effect, plus all interest accrued or to accrue on such sums
through the date of payment or redemption of such indebtedness,plus any other direct out-
of-pocket expenses incurred by the Lessee in connection with the condemnation not paid
from the Operating Account which shall be directly paid to such Permitted Leasehold
Mortgagee; and
(ii) the Lessor shall then be entitled to receive the balance of the condemnation
proceeds.
Section 21. Estoppel Certificates.
(a) Upon the request of any Permitted Leasehold Mortgagee or any Person who may
be permitted to take an assignment of this Ground Lease or who may become a Permitted
Leasehold Mortgagee, the Lessor and the Lessee shall execute, acknowledge, and deliver to the
other promptly upon request,in a form reasonably satisfactory to the requesting party,a certificate
certifying as to the following:
(i) Validity of Lease:that this Ground Lease is unmodified and in full force and
effect (or, if there have been modifications, that this Ground Lease is in full force and
effect, as modified, and stating the modifications);
(ii) Payment of Rent:the dates through which the Rent under this Ground Lease
• shall have been paid;
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(iii) Amount of Rent Due: the amount of any Rent then payable; and
(iv) Defaults by the Lessee: that no notice has been given by the Lessor to the
Lessee of any failure to comply under this Ground Lease that has not been cured and to the
best of its knowledge and belief, and without any independent inquiry or investigation
thereof, no Event of Default exists (or, if there has been any notice given or an Event of
Default exists, describing the same).
(b) Certificates from the Lessor and the Lessee pertaining to the same matters may be
relied upon by any Person who may be permitted to take an assignment of this Ground Lease or
who may become a Permitted Leasehold Mortgagee in accordance with the terms of this Ground
Lease.
Section 22. Access to Premises. The Lessor and its authorized representatives, agents,
employees,and attorneys may,but shall be under no duty to,enter the Premises at reasonable times
and hours, subject to the rights of tenants in possession, if any, to inspect the Property in order to
determine whether the Lessee is complying with its undertakings, duties, and obligations under
this Ground Lease, to make such necessary repairs, additions, improvements, changes, or
alterations to the Premises as the Lessor may elect to make in accordance with the terms and
• provisions hereof(the Lessor agreeing to provide five (5) Business Days' prior written notice of
its intent to make such necessary repairs, additions, improvements, changes, or alterations to the
Premises, except in the case of an emergency where no such prior notice shall be required), and to
exhibit the same to prospective purchasers,operators,mortgagees,or tenants of the Premises. Such
entry, inspection and repairs, additions, improvements, changes, or alterations as the Lessor may
make of the Premises shall not constitute an eviction of the Lessee in whole or in part, and the
Rent shall in no way abate by reason of loss or interruption of the business of the Lessee or
otherwise while such work is being done. The Lessor agrees to employ its reasonable efforts to
minimize any interruption to the business operations of the Lessee resulting from the Lessor's (or
its designated representatives') work in or on the Premises. Nothing herein contained, however,
shall be deemed or construed to impose upon the Lessor any obligation or liability whatsoever for
care, supervision, repair, improvement, additions,change, or alteration to the Premises other than
as herein expressly provided. Further, nothing in this Section shall be construed to permit the
Lessor to make any material changes, improvements,and/or alterations to the Premises,including,
without limitation, any demolition or removal thereof if such action would violate any restrictions
imposed upon the Lessee with respect to the same under any Bond Document.
Section 23. Property Subject to Zoning. The Lessee takes the Property subject to all
zoning regulations and ordinances now or hereafter in force including, but not limited to, those as
to building line and setback.
Section 24. Events of Default and Remedies.
(a) Events of Default Defined. The following shall be "Events of Default" under this
Ground Lease, and the term "Event of Default" means, whenever it is used herein, any one or
more of the following events:
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(i) The Lessee shall fail to pay the Rent or any other amounts due to the Lessor
at the times specified herein.
(ii) The Lessee shall fail to perform or cause to be performed any other term,
covenant,condition,or provision hereof,other than as referred to in(i)above and to correct
such failure within thirty (30) days after written notice specifying such shall have been
given to the Lessee by the Lessor. In the case of any such failure that cannot with due
diligence be corrected within such thirty (30) day period, but can be wholly corrected
within a period of time not materially detrimental to the rights of the Lessor, it shall not
constitute an Event of Default if corrective action shall be instituted by the Lessee within
the applicable period and diligently pursued until the failure shall be corrected in
accordance with and subject to any reasonable directions or limitations of time established
in writing by the Lessor.
(iii) The Lessee shall be adjudicated a bankrupt.
(iv) A permanent receiver shall be appointed for the Lessee's interest in the
Premises and such receiver shall not be removed within ninety (90) days after notice from
the Lessor to the Lessee to obtain such removal.
(v) The Lessee shall voluntarily take advantage of any debtor relief proceedings
under any present or future law whereby the Rent or any part thereof shall be reduced or
payment thereof deferred or shall become subject to any such involuntary proceedings and
said involuntary proceedings shall not be dismissed within ninety (90) days after notice
from the Lessor to the Lessee to obtain such dismissal.
(vi) The Lessee shall make a general assignment for benefit of creditors.
(vii) Any of the Lessee's interest in the Premises under this Ground Lease shall
be levied upon or attached under process against the Lessee, and the same shall not be
satisfied or dissolved within ninety (90) days after notice from the Lessor to the Lessee to
obtain satisfaction or dissolution thereof.
(b) Remedies. Subject to the provisions of Section 26(t) and 36(i) hereof, upon the
occurrence of an Event of Default, the Lessor may pursue one of the following remedies:
(i) Terminate this Ground Lease immediately upon written notice thereof to
the Lessee, and thereafter, without legal process, enter upon and take possession and
control of the Premises to the complete exclusion of the Lessee. The Lessor may also
demand, collect, and retain all rents due from tenants occupying the Premises, and the
Lessor may otherwise treat and occupy the Premises as if this Ground Lease had expired
pursuant to the terms hereof. The failure of the Lessor to exercise such rights after one or
more Events of Default shall not be a waiver of the rights of the Lessor upon the occurrence
of any subsequent Event of Default; or
(ii) As the Lessee's attorney-in-fact pursuant to the provisions of Section 12 of
this Ground Lease, without terminating this Ground Lease, re-let the Premises upon
obtaining the written consent of the Primary Leasehold Mortgagee. Such re-letting may be
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accomplished without advertisement and by private negotiations for such term or terms
and at such rental or rentals as the Lessor in its sole discretion may deem proper and
advisable, with the right to make alterations and repairs to the Premises. Upon each such
reletting:
(A) the Lessee shall be immediately liable to pay to the Lessor, in
addition to any sums due hereunder, the reasonable cost and expenses of such
reletting and of such alterations and repairs incurred by the Lessor; and
(B) subject to applicable law, rents received by the Lessor from such
reletting shall be applied: First, to the payment of any costs and expenses of such
re-letting and of such alteration and repair; Second, so long as the Series 2022
Bonds are Outstanding, to the Trustee for deposit in the Revenue Fund or, if the
Series 2022 Bonds have been paid in full, to the payment of Rent due and unpaid
under this Ground Lease; and Third,the residue,if any,shall be held by the Lessor,
in escrow, and applied to the payment of the Rent as the same shall become due
under this Ground Lease at the termination hereof. The Lessor shall in no event be
liable to the Lessee for any interest on said residue.
Section 25. Expiration or Termination.
(a) Extinguishment of the Lessee's Rizhts. Upon the termination or expiration hereof
from any cause, all rights and interests of the Lessee, and all persons whomsoever claiming by,
through or under the Lessee (with the exception of any outstanding Occupancy Agreements and
the rights of the Primary Leasehold Mortgagee to enter into a Mortgagee Lease pursuant to Section
26 hereof), shall immediately cease and terminate, and the Premises, including all Improvements
(including, without limitation, all buildings, improvements, engines, machinery, dynamos,
generators, boilers, furnaces, elevators, fire escapes, and all lifting, lighting, heating, cooling,
refrigerating, air conditioning, ventilating, gas, electric and plumbing apparatus, appliances and
fixtures, as well as other fixtures attached to or within the Premises), and all personal property
(other than that which is owned by tenants of the Project) located thereon, shall thence forward
constitute and belong to and be the absolute property of the Lessor or the Lessor's successors and
assigns,without further act or conveyance, and without liability to make such compensation to the
Lessee or to anyone whomsoever, and free and discharged from all and every lien, encumbrance,
claim, and charge of any character created or attempted to be created by the Lessee at any time.
The Lessee agrees, at the expiration or termination hereof, to surrender unto the Lessor, all and
singular the Premises with then existing Improvements constructed and located thereon and
therein, in the same condition as when the construction of such Improvements was completed,
only natural and normal wear and tear excepted, unless the Lessee shall be relieved of the Lessee's
obligation to repair,reconstruct,restore, or replace damaged or destroyed Improvements pursuant
to Section 19(a) hereof.
(b) Prepaid Items Assiened. Upon the expiration of the Term, or upon the prior
termination hereof from any cause, all expense items prepaid by the Lessee with respect to
constructing, operating, maintaining, and protecting the Premises, including, but not limited to,
prepaid insurance premiums, any tax and utility deposits,shall inure to the benefit of and become
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the property of the Lessor and to this extent the Lessee does hereby transfer, assign, and convey
any such prepaid expense items to the Lessor.
(c) Amounts Remaining in Funds and Accounts. Upon the expiration of the Term, or
upon the prior termination hereof from any cause, and subject, in the event of termination before
the expiration of the Term of this Ground Lease, to the rights interests of the Trustee and/or any
Permitted Leasehold Mortgagee,any amounts remaining in any fund, account, or reserve created
in connection with the maintenance of the Property, or the management of the Project shall inure
to the benefit of and become the property of the Lessor,and to this extent,the Lessee does hereby
transfer, assign, and convey any such funds to the Lessor.
Section 26. Mortaaaina of the Leasehold.
(a) The Lessee, and every permitted successor and assign of the Lessee, shall have the
right in addition to any other rights granted in this Ground Lease to secure one or more financings ,
or re-financings and may enter into a Primary Leasehold Mortgage in favor of a Primary Leasehold
Mortgagee, and may otherwise encumber its interest in this Ground Lease, with the Lessor's
consent, under any one or more leasehold deeds of trust or other security instrument pledging all
or part of the Leasehold Estate to or for the benefit of a Permitted Leasehold Mortgagee,upon the
condition that all rights acquired under any such financing or re-financing shall be subject to each
of the provisions set forth in this Ground Lease and to all rights and interests of the Lessor herein
(a"Permitted Leasehold Mortgage"),and provided, further that:
(i) any such secured financing of the Project exclusively secures debt of the
Lessee with respect to the Project;
(ii) any Permitted Leasehold Mortgage or other encumbrance executed by the
Lessee in connection with a Permitted Leasehold Mortgage or otherwise will not extend to
or be a lien or encumbrance upon Lessor's interest in the Ground Lease or Property or in
any rights appurtenant to Lessor's interests;
(iii) any Permitted Leasehold Mortgage or other encumbrance executed by the
Lessee in connection with a Permitted Leasehold Mortgage shall at all times, without the
necessity of for the execution of any further documents, be subject and subordinate to the
interest of the Lessor in the Premises, and the rights of the Lessor in the Premises and
arising out of the Ground Lease shall not be affected by any Permitted Leasehold
Mortgagee, nor shall the Lessor be deprived in any other way of its rights in the Premises
or under this Ground Lease, except to the extent provided in this Section or in any
subordination, non-disturbance and recognition agreement between the Lessor and the
Primary Leasehold Mortgagee that is consistent with the terms of this Ground Lease; and
(iv) Lessee shall at all times remain liable hereunder for the payment of Rent
and the performance of all covenants and conditions of this Ground Lease as provided in
this Ground Lease.
Subject to the provisions of subsection (k) below, the Lessor may enter into a Refinanced
Trustee Mortgage. If, from time to time, the Lessee or the Lessee's successors and assigns shall,
with the consent of the Lessor, encumber this Ground Lease with a Primary Leasehold Mortgage,
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and if the holder thereof shall deliver to the Lessor an executed counterpart of such Primary
Leasehold Mortgage, together with each assignment thereof certified by such holder to be true
together with written notice specifying the name and address of such holder and the pertinent
recording data with respect to such Primary Leasehold Mortgage, the Lessor agrees that, anything
in this Ground Lease to the contrary notwithstanding, from and after the date of receipt by the
Lessor of such notice and for the term (duration) of such Primary Leasehold Mortgage, the
following provisions shall apply:
(b) Consent to Amendment. There shall be no cancellation or surrender of this Ground
Lease(except upon the expiration of the Term),or modification of this Section,or other provisions
of this Ground Lease intended for the benefit of the Primary Leasehold Mortgagee. by the Lessor
or the Lessee without the prior written consent of the Primary Leasehold Mortgagee,which consent
shall not be unreasonably withheld. Notwithstanding the foregoing (but, in any event, subject to
the Primary Leasehold Mortgagee's curative rights set forth in subsections (d) and (e) hereof),
nothing herein shall be deemed to prohibit the Lessor from terminating this Ground Lease in
accordance with its terms or exercising its option to purchase as provided for in this Ground Lease,
if any. There shall be no material modification in the Primary Leasehold Mortgage or related
documentation without the Lessor's prior,written consent, which consent will not be unreasonably
withheld, so long as Lessor's interests in the Ground Lease and the Property are not adversely
affected thereby.
(c) Notices to Permitted Leasehold Mortgagee. The Lessor, upon serving the Lessee
with any notice of an Event of Default, failure to comply, or termination, shall simultaneously
serve a copy of such notice on the Primary Leasehold Mortgagee. If the Lessor shall serve the
Lessee with a notice of a failure to comply with any term, covenant, condition, or provision
hereof, the Primary Leasehold Mortgagee shall then have the same period after service of the
notice on it as is given to the Lessee hereunder to remedy or cause to be remedied such failure,
and the Lessor shall accept performances by or at the instigation of the Primary Leasehold
Mortgagee as if it had been done by the Lessee. Any notice required to be given to the Primary
Leasehold Mortgagee shall be posted in the United States mail, postage prepaid, certified, return
receipt requested (and wired by telegraphic means or transmitted by facsimile transmission) and
addressed to the Primary Leasehold Mortgagee at the address and to the attention of the person
designated to the Lessor by such Primary Leasehold Mortgagee to receive copies of such notices
and shall be deemed to have been served as of the date the said notice is received or refused by
such Primary Leasehold Mortgagee.
(d) Curative Rights of Permitted Leasehold Mortgagees. In addition to the rights
granted to any Primary Leasehold Mortgagee under this Section, the Primary Leasehold
Mortgagee shall have an additional period of ninety(90) days to remedy or cause to be remedied
any Event of Default of which it shall have received notice; provided,however, in no event shall
Primary Leasehold Mortgagee, its successors, assigns, nominee, or any purchaser be required to
cure the following Events of Default: (a) any bankruptcy of the Lessee; (b) the Lessee's
insolvency; and (c) the failure of the Lessee to perform financial covenants contained in this
Ground Lease that are personal to the Lessee.
(e) Limitation Upon Termination Rights of the Lessor. If the Lessor shall elect to
terminate this Ground Lease upon the occurrence of an Event of Default, the Primary Leasehold
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Mortgagee shall also have the right to postpone and extend the date of termination as fixed by the
provisions hereof for a period of not more than six (6) months from the expiration of the ninety
(90)day period specified in subsection(c)hereof,provided that the Primary Leasehold Mortgagee
shall pay the Rent and other charges required to be paid under this Ground Lease during such
period and comply with the other terms of the Ground Lease in all material respects,and provided
further,that the Primary Leasehold Mortgagee shall forthwith take steps necessary to acquire the
Lessee's interest and estate in this Ground Lease by foreclosure of its Permitted Leasehold
Mortgage, or otherwise, and shall prosecute such action to completion with due diligence. If at
the end of the six (6) month period, the Primary Leasehold Mortgagee hereof shall be actively
engaged in steps to acquire or sell the Lessee's interest in this Ground Lease, the time for the
Primary Leasehold Mortgagee to comply with the provisions of this subsection shall be extended
for such period as shall be reasonably necessary to complete these steps with reasonable diligence
and continuity.
(f) Assignment. The Lessor agrees that in the event of any foreclosure under any
Permitted Leasehold Mortgage, either by judicial proceedings or under power of sale contained
therein all right, title, and interest encumbered by such Permitted Leasehold Mortgage may,
without the consent of the Lessor, be assigned to and vested in the purchaser at such foreclosure
sale subject and subordinate, however, to the rights, title, and interests of the Lessor; and,
notwithstanding that the Lessor's consent to said assignment shall not have been obtained, any
such assignee shall be vested by virtue of such assignment with any and all rights of the party
whose estate was encumbered by such Permitted Leasehold Mortgage as though the Lessor had
consented thereto. Any Permitted Leasehold Mortgagee, assignee or subsequent foreclosure
purchaser must comply with, and shall be subject to, all terms, covenants and conditions of the
Ground Lease.
(g) Mortgagee Leases. The Lessor agrees that in the event of a termination hereof by
reason of the occurrence of any Event of Default, and subject to the rights herein granted to
Leasehold Mortgagees, the Primary Leasehold Mortgagee shall have the option, but not the
obligation,to enter into a Mortgagee Lease,with the Primary Leasehold Mortgagee,as lessee,for
the remainder of the Term with the same covenants, conditions and agreements (except for any
requirements which have been fully satisfied by Lessee or Lessor prior to termination);provided:
(i) The Primary Leasehold Mortgagee shall enter into a Mortgagee Lease
within the six(6) month period specified in subsection (e) of this Section, with Lessor's
obligation to enter into a Mortgagee Lease conditioned upon, on the date the Mortgagee
Lease is executed, (A) Lessor receiving payment of all Rent due hereunder through the
date of such Mortgagee Lease; (B) all monetary defaults having been cured; (C) all non-
monetary defaults susceptible to cure having been remedied and cured or Primary
Leasehold Mortgagee, as lessee,having commenced such cure and continuing to diligently
complete the cure; and (D) the Lessor receiving payment of all expenses, including
reasonable attorneys' fees and disbursements and court costs, incurred by the Lessor in
connection with such Event of Default, the termination of this Ground Lease and the
preparation of the new Mortgagee Lease together with interest thereon at the Default Rate
from the due date or the date expended by the Lessor, as the case may be, to the date of
actual payment by the Primary Leasehold Mortgagee.
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(ii) Lessor's delivery of the Mortgagee Lease shall be (a) made without
representation or warranty of any kind or nature whatsoever either express or implied; (b)
Primary Leasehold Mortgagee,as lessee, shall take such Premises"as-is" in its then current
condition; and (c) upon execution and delivery of such Mortgagee Lease, Primary
Leasehold Mortgagee,as lessee,at its sole cost and expense,shall be responsible for taking
such action as shall be necessary to cancel and discharge this Ground Lease and to remove
Lessee from the Premises.
(iii) The Primary Leasehold Mortgagee, as lessee under the Mortgagee Lease,
shall perform and observe all covenants contained in the Mortgagee Lease on the Lessee's
part to be performed during such period of time commencing with the date of the execution
of the Mortgagee Lease and terminating dpon the abandonment or surrender of possession
of the Premises under the said Mortgagee Lease.
(iv) The Primary Leasehold Mortgagee, as lessee under the Mortgagee Lease
shall have the same right, title and interest in and to the Premises and the right to use the
Improvements thereon as the Lessee had under this Ground Lease.
(h) Agreement Between the Lessor and the Primary Leasehold Mortgagee.The Lessor,
upon request, shall execute, acknowledge, and deliver to the Primary Leasehold Mortgagee an
estoppel and recognition agreement, in form reasonably satisfactory to the Primary Leasehold
Mortgagee and the Lessor, by and among the Lessor, the Lessee, and the Primary Leasehold
Mortgagee agreeing to all of the provisions of this Section.
(i) Limitation on Liability of the Permitted Leasehold Mortgagees. Notwithstanding
any other provision hereof, the Lessor agrees that any Permitted Leasehold Mortgagee permitted
under this Ground Lease shall in no manner or respect whatsoever be(i) liable or responsible for
any of the Lessee's obligations or covenants under this Ground Lease(nor shall any rights of such
Permitted Leasehold Mortgagee be contingent on the satisfaction of such obligations or
covenants),or(ii)required to cure any Event of Default,provided;however,that if such Permitted
Leasehold Mortgagee shall become the owner of the Leasehold Estate or shall become the lessee
under a Mortgagee Lease, then such Permitted Leasehold Mortgagee shall be responsible and
liable for all obligations and covenants accruing during such Permitted Leasehold Mortgagee's
tenure as owner of the Leasehold Estate or as lessee under a Mortgagee Lease. Notwithstanding
the foregoing, the liability of a Permitted Leasehold Mortgagee with respect to its obligations
under this Ground Lease or any Mortgagee Lease shall be "non-recourse" and, accordingly, the
Lessor's source of satisfaction of such obligations shall be limited to the Net Available Cash Flow
and to the Lessee's interest in the Project,and the Lessor shall not seek to obtain payment through
any judicial process or otherwise from any person or entity comprising such Permitted Leasehold
Mortgagee or from any assets of such. Permitted Leasehold Mortgagee other than the Net
Available Cash Flow and the Lessee's interest in the Project.
(j) No Waiver of Lessee's Obligations or Lessor's Rights.Nothing contained herein or
in any Permitted Leasehold Mortgage shall be deemed or construed to relieve Lessee from the
full and faithful observance and performance of its covenants, conditions and agreements
contained in this Ground Lease,or from any liability for the non-observance or non-performance
thereof, or to require, allow or provide for the subordination to the lien of such Permitted
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Leasehold Mortgage or to any Permitted Leasehold Mortgagee of any estate,right,title or interest
of the Lessor in or to the Ground Lease, Premises or Property, nor shall the Lessor be required to
join in such mortgage financing or be liable for same in any way. Lessor's interest in the Property
and this Ground Lease, as the same may be modified, amended or renewed, will not at any time
be subject or subordinate to (a) any mortgage now or hereafter placed upon Lessee's interest in
this Ground Lease, or(b) any other liens or encumbrances hereafter affecting Lessee's interest in
this Ground Lease. Lessor represents and warrants to Lessee that no mortgages currently exist
against its fee interest in the Property, and acknowledges that this Ground Lease shall not be
subordinate to any future mortgage against the fee interest in the Property._Notwithstanding
anything to the contrary contained in this Ground Lease, if all or any portion of the interest of
Lessor in the Property or this Ground Lease shall be acquired by reason of foreclosure of any
mortgage,security agreement, lien or other encumbrance or other proceedings brought to enforce
the rights of the holder(s)thereof,by deed in lieu of foreclosure or by any other method, and as a
result any Person succeeds to such int;rests of City, this Ground Lease and the rights of Lessee
hereunder shall continue in full force and effect and shall not be terminated or disturbed except
as otherwise expressly permitted by the terms of this Ground Lease.
(k) Refinanced Trustee Mortgage. No consent or approval of the Lessor shall be
required for any Refinanced Trustee Mortgage, provided, however,that the Lessor's prior written
consent shall be required for:
(i) The issuance of any Additional Bonds the proceeds of which are not used
to refund or defease any Outstanding Bonds or to pay the cost of issuance thereof, or
(ii) The restructuring, refunding or defeasance of any Outstanding Bonds that
would:
(A) increase the aggregate principal balance of the Bonds outstanding
immediately prior to the effective date of such restructuring, refunding or
defeasance;
(B) extend the final maturity date of the Bonds or other indebtedness
secured by the Trustee Mortgage beyond the final maturity date of the Bonds
outstanding immediately prior to the effective date of such restructuring, refunding
or defeasance; or
(iii) Any restructuring,refunding or refinancing of the Bonds,the result of which
would require the Lessee to materially increase the rental payments of Eligible Residents.
(I) Bankruptcy. If either the Lessee or the Lessor files for bankruptcy protection:
(i) If this Ground Lease is rejected by the Lessee or the Lessee's trustee in a
bankruptcy proceeding, as between the Lessor and any Permitted Leasehold Mortgagee(in
order of priority, if there is more than one Permitted Leasehold Mortgagee), such rejection
shall be deemed an assignment of the Ground Lease to such Permitted Leasehold
Mortgagee unless the Leasehold Mortgagee shall reject such deemed assignment in a notice
sent to Lessor"within thirty(30)days after the later to occur of: (i)the rejection or deemed
•
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rejection of the Ground Lease by the Lessee or the Lessee's trustee; and (ii) the approval
of such rejection by the bankruptcy court.
(ii) If this Ground Lease is rejected by the Lessor or the Lessor's trustee in a
bankruptcy proceeding, this Ground Lease shall not be terminated without the written
consent of the Permitted Leasehold Mortgagee. If the Lessor or the Lessor's trustee
proposes to sell the Property free and clear of the interest of the Lessee under this Ground
Lease,the Lessee and the Permitted Leasehold Mortgagee shall be entitled to notice of any
such sale of the Property by the Lessor or the Lessor's trustee.The Lessee and the Permitted
Leasehold Mortgagee shall also have the right to contest such sale and to sue for adequate
protection of its respective interests hereunder.
Section 27. Option to Purchase. Throughout the Term, the Lessor, at its sole
discretion, shall have the right and option to purchase the Lessee's right, title, and interest in and
to the Project, this Ground Lease, and the applicable Occupancy Agreements (collectively, the
"Optioned Property").
(a) Exercise Notice. The Lessor may exercise such option to purchase the Lessee's
right, title and interest in and to the Optioned Property by delivering written notice (the "Exercise
Notice") of such exercise to the Lessee, which Exercise Notice shall either state that the entirety
of the Project is being purchased or identify with a metes and bounds description or lot and block
description of the Optioned Property that Lessee desires to purchase.
(b) Purchase Price. If the option to purchase shall be exercised,the purchase price(the
"Option Price") of the Lessee's right, title, and interest in and to the Optioned Property shall be
equal to (i) the principal balance of all indebtedness secured by any Permitted Leasehold
Mortgage then in effect,if any,plus(ii)any premium payable upon the prepayment or redemption
of such indebtedness, if any,gm(iii) all interest accrued or to accrue on such sums through the
date of payment or redemption of such indebtedness, if any, plus (iv) any reasonable costs of
defeasing or redeeming the Bonds, as applicable, plus(v)all recording fees for satisfaction of the
Lessee's loans relating to the Project, if any, >l lus(vi)all transfer taxes in connection with the sale
of the Optioned Property and all recording fees in connection with recording of any deed and
assignment, plus (vii) any unpaid fees and/or other compensation due to the Lessee hereunder,
plus (viii) all other expenses incurred by the Lessee in connection with the Closing (as defined
herein) not paid from the Operating Account. This provision for the Lessor's option shall not be
in derogation of the Lessor's power of eminent domain, subject to payment in full of any then
outstanding debt under the Leasehold Mortgage.
(c) Closing. The closing of the transfer of the Lessee's right,title and interest in and to
the Optioned Property (the "Closing") shall be held on or before the date that is ninety (90) days
after the date of the Exercise Notice, on such date and at such time and place as the Lessor and
the Lessee shall agree. At Closing upon payment of the Option Price, title to the Project shall be
conveyed by a limited warranty deed in recordable form executed by the Lessee, title to the
Equipment shall be conveyed by a bill of sale containing limited warranties of title, this Ground
Lease shall terminate as to the Optioned Property and the Lessee's interest in applicable
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Occupancy Agreements shall be conveyed by an assignment thereof containing limited warranties
of title. If the Optioned Property shall be less than the entire Premises, then the Lessor and the
Lessee shall execute an amendment to this Ground Lease at such closing amending the definition
of the Premises.
(d) Title.The Optioned Property shall be conveyed free and clear of all loans,and shall
be subject only to the applicable Occupancy Agreements, to Permitted Encumbrances, and to all
matters occurring subsequent to the date hereof that would be disclosed by an accurate survey,
title search,and inspection of the Premises.
(e) Release of Lessee. Upon the transfer of all of the Lessee's interest in the Optioned
Property pursuant to this Section, the Lessee shall be released from, and relieved of, all of its
obligations hereunder without any further action on the part of the Lessor or the Lessee.
Section 28. Notices.
(a) All notices, certificates, demands, requests, or other communications hereunder
shall be sufficiently given and shall be deemed given when mailed by certified mail, postage
prepaid, return receipt requested, or by personal delivery addressed as follows (email addresses
are included for convenience only):
If to the Lessee: CFC-MB I, LLC
333 N. Wilmot Road, Suite 227
Tucson, Arizona 85711
Tel: (520) 623-3377 EXT. 122
Fax: (520) 624-1728
Attention: Gary Molenda
Email: gmolenda@bdfc.com
With a copy to:
Lewis Roca Rothgerber Christie LLP
201 East Washington Street, Suite 1200
Phoenix, Arizona 85004-2595
Attention: Bryant D. Barber, Esq.
Email: bbarber@lewisroca.com
If to the Lessor: City of Miami Beach, City Hall
1700 Convention Center Drive
Miami Beach,Florida 33139
Attn: City Manager
with a copy to: City of Miami Beach, City Hall
1700 Convention Center Drive
Miami Beach, Florida 33139
Attn: City Attorney
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If to the Trustee:
Zions Bancorporation,National Association
7390 N Academy Boulevard
Colorado Springs, CO 80920
Attention: Vladimir Munoz
Email: Vladimir.Munoz azionsbank.com
(b) Receipt of notices, certificates, or other communications hereunder shall occur
upon actual delivery to any Person at any location where such Person may be found, or to an
officer, agent, or employee of such Person at the address of such Person set forth above, subject
to change as provided hereinabove. An attempted delivery in accordance with the foregoing,
acceptance of which shall be refused or rejected,shall be deemed to be and shall constitute receipt;
and an attempted delivery in accordance with the foregoing by mail,electronic means,messenger,
or courier service (whichever shall be chosen by the sender) that is not completed because of
changed address of which no notice shall have been received by the sender in accordance with
this provision prior to the sending of the notice, certificate,or other communication shall also be
deemed to be and constitute receipt. Any Person named in this Section may, by notice given to
each of the others, designate any additional or different addresses to which subsequent notices,
certificates, demands,requests, or other communications shall be sent.
(c) Notwithstanding anything contained herein to the contrary, any notice required to
be given by the Lessor or the Lessee hereunder shall be deemed to have been given and shall be
effective as of the date such notice is received or refused reflected on said notice. All notices,
certificates, demands, requests, or other communications made by either Party to the other that
are required or permitted by the provisions hereof shall be in writing.
Section 29. Submission of Matters to the Lessor for Approval. Except as to the
extent expressly provided for herein to the contrary, any matter that is required to be submitted to
and/or consented to or approved in writing by the Lessor or any matter that is required to be
submitted to the Lessor that may become effective if not denied, rejected, or disapproved by the
Lessor, as required under this Ground Lease, shall be submitted to the applicable Lessor
Representative by hand or mailed by United States certified or registered mail return receipt
requested or sent by national-recognized overnight courier,to the address of the Lessor designated
for the giving of notice to the Lessor under Section 28 hereof and shall either be accepted,affirmed,
or approved or denied, rejected, or disapproved by the Lessor within sixty (60) days after receipt
unless a shorter period of time is expressly stated elsewhere herein. If the Lessor shall fail so to
accept, affirm, or approve or deny, reject, or disapprove within such sixty (60) day or other such
shorter period as provided for herein, the Lessor's approval shall be assumed to have been
unconditionally granted and the Lessee shall have the right to proceed on such matter so submitted.
The Lessor shall inform the Lessee in writing of its acceptance, affirmation, or approval or denial,
rejection, or disapproval of such submitted matter by United States certified or registered mail,
return receipt requested, or sent by national-recognized overnight courier, to the address of the
Lessee designated for the giving of notice to the Lessee in Section 28 hereof. Any review by the
Lessor of any matter submitted to the Lessor is for the Lessor's own convenience and purpose only.
By undertaking such review, the Lessor shall not have any liability to the Lessee or any other
person, including, without limitation,the insurers and lenders of the Lessee.
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Section 30. Holding Over by the Lessee. The Lessee shall not use or remain in
possession of the Premises after the termination hereof Any holding over, or continued use or
occupancy by the Lessee after the termination hereof, without the written consent of the Lessor,
shall not constitute a tenant-at-will interest in behalf of the Lessee, but the Lessee shall become a
tenant-at-sufferance and liable for Rent and all other expenses,obligations, and payments in effect
for the immediately preceding year of the Tenn. There shall be no renewal whatsoever hereof by
operation of law.
Section 31. Environmental Matters.
(a) The Lessee covenants,represents,and warrants that the Lessee's use of the Premises
shall not and will not involve the use, storage, generation, or disposal of Hazardous Materials in
violation of any Environmental Laws, and that Lessee shall not cause or permit any Hazardous
Materials to be brought, used, stored, generated, or disposed on or about the Premises by Lessee,
its agents, employees, contractors, subcontractors, or invitees, unless such use shall be in
compliance with all laws, including, without limitation, Environmental Laws and with all
governmental authorities.
(b) For purposes of this Ground Lease, the term "Hazardous Materials" means
asbestos, asbestos-containing materials, materials presumed by law to contain asbestos,
polychlorinated biphenyls("PCBs"),petroleum,petroleum byproducts(including but not limited
to, crude oil, diesel oil, fuel oil, gasoline, lubrication oil, oil refuse, oil mixed with other waste,
oil sludge, and all other liquid hydrocarbons, regardless of specific gravity), natural or synthetic
gas products,radioactive materials,and/or any hazardous or toxic substance,chemical or material,
or any other environmentally regulated substance or material, waste, pollutant or contaminant,
defined as such or regulated by any Environmental Laws. "Environmental Laws" means any
federal,state or local statute,law,ordinance,code,common law,rule,regulation,order or decree,
regulating, relating to or imposing liability or standards of conduct concerning the protection of
the environment, natural resources, health and safety, and/or activities involving any asbestos,
asbestos-containing materials, materials presumed by law to contain asbestos, PCBs, petroleum,
petroleum byproduct (including but not limited to, crude oil, diesel oil, fuel oil, gasoline,
lubrication oil,oil refuse,oil mixed with other waste,oil sludge,and all other liquid hydrocarbons,
regardless of specific gravity) natural•or synthetic gas products, radioactive materials, and/or
hazardous or toxic substances, chemicals or materials, or any other waste, materials,pollutant or
contaminant that is regulated to protect the environment, as may now or at any time hereafter be
in effect, including without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act, the Resource Conservation and Recovery Act, the Clean Air
Act, the Clean Water Act, the Toxic Substances Control Act, the Emergency Planning and
Community Right-To-Know Act, and the Occupational Safety and Health Act.
Section 32. Property Condition. THE LESSOR AND THE LESSEE
ACKNOWLEDGE AND AGREE THAT, EXCEPT AS EXPRESSLY PROVIDED IN
SECTION 9 HEREOF, NEITHER THE LESSOR OR ANY OF ITS TRUSTEES,
OFFICERS, AGENTS, EMPLOYEES, OR REPRESENTATIVES MAKES OR HAS
MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR
CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY OR
ANY PORTION THEREOF,THE PROPERTY'S PHYSICAL CONDITION,INCOME TO
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BE DERIVED OR EXPENSES TO BE INCURRED WITH RESPECT TO THE
PROPERTY,THE PROPERTY'S FITNESS OR SUITABILITY FOR ANY PARTICULAR
USE, OR ANY OTHER MATTER OR THING RELATING TO OR AFFECTING THE
SAME, AND THERE ARE NO ORAL AGREEMENTS, WARRANTIES, OR
REPRESENTATIONS COLLATERAL TO OR AFFECTING THE PROPERTY OR ANY
PORTION THEREOF,EXCEPT AS MAY BE EXPRESSLY SET FORTH HEREIN,AND
THAT THE LESSEE HAS INSPECTED THE PROPERTY AND LEASES THE
PROPERTY "AS IS AND WHERE IS."
Section 33. Lessor's Contribution to the Project. Lessor hereby agrees that it will use
reasonable efforts to garner support for an amendment to Chapter 133 of the City Code to exempt
workforce and affordable housing projects developed within the City of Miami Beach from the
"sustainability fee"contemplated in Chapter 133 (the"Sustainability Fee"). If unsuccessful in its
efforts to secure the elimination or reduction of the Sustainability Fee before the Project applies
for a Temporary Certificate of Occupancy(TCO), Certificate of Occupancy(CO)or Certificate of
Completion (CC) (or is otherwise required to pay or post a bond pursuant to the requirements of
Section 133-7(a)at such time),the Lessor hereby agrees to make direct payment equal to the lesser
of(a)the total Sustainability Fee charged against the Project plus one hundred thousand and 00/100
dollars ($100,00.00) or (b) five hundred thirty-two thousand four hundred fifty-one and 00/100
dollars ($532,451.00) less the amount of any reduction in concurrency, mobility, or Art in Public
Places fees(the lesser of(a)and(b)is referred to as the"Lessor Contribution"). In consideration
of the Lessor's agreement to seek the amendment to Chapter 133 and make the Lessor Contribution
if necessary, Lessee agrees to cause the Developer (a) to limit the "Developer Fee" identified in
the Development Agreement to no more than one million three hundred ninety-five thousand and
00/100 dollars ($1,395,000.00) regardless of the total cost of the Project and (b) to reduce the
Developer Fee by one hundred thousand and 00/100 dollars ($100,000.00) if Chapter 133 of the
City Code is amended such that the Project is exempt from the Sustainability Fee in its entirety.
Section 34. Leasehold Condominium. Lessee shall have the right to create a leasehold
condominium for the Project, if such condominium structure is deemed necessary to secure or
preserve any exemption from ad valorem taxes, provided that at the time of creation of said
leasehold condominium,the declaration of condominium(the"Declaration")is in compliance with
Chapter 718, Florida Statutes, as amended, and the provisions of this Ground Lease and the Bond
Documents; and further subject to the City Manager's approval of the form and substance of the
Declaration. Lessee shall reimburse Lessor, as part of the Expenses, for all reasonable costs of
Lessor's review of the proposed Declaration,including,but not limited to reasonable fees and costs
of Lessor's outside counsel. The leasehold condominium shall be limited to three (3) units,
consisting of the Ground Floor condominium unit,the Dormitory Housing condominium unit, and
one (1) condominium unit comprising all of the Workforce Housing Units. The Rent shall be
based upon the Revenues derived from the operations of each of the three units. The provisions
of this Ground Lease related to transfers or assignments of the Ground Lease shall apply to any
transfer or assignment of each of the three(3)units,respectively, in the same manner as applicable
to a transfer or assignment of the Ground Lease.
Section 35. Release of Portions of the Property. The Parties also agree that any
portion of the Property may, from time to time, upon the written agreement of the Parties, be
released from the terms of this Ground Lease; subject,however,to the terms and conditions of the
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Bond Documents or, if the Bonds are no longer Outstanding, the applicable requirements of any
other Primary Leasehold Mortgagee.
Section 36. Miscellaneous.
(a) No Waiver of Rights by the Lessor. No failure of the Lessor to exercise any power
given the Lessor hereunder or to insist upon strict compliance by the Lessee with its undertakings,
duties and obligations hereunder, and no custom or practice of the Parties at variance with the
provisions hereof shall constitute a waiver of the Lessor's right to demand exact compliance with
the provisions contained in this Ground Lease.
(b) Rights are Cumulative. All rights, powers, and privileges conferred herein upon
both Parties shall be cumulative.
(c) Provisions are Binding Upon Assigns and are Real Covenants. It is mutually
covenanted, understood and agreed by and between the Parties,that each of the provisions hereof
shall apply to, extend to, be binding upon and inure to the benefit or detriment of not only the
Parties, but also the respective legal representatives, successors and assigns of the Parties, and
shall be deemed and treated as real covenants running with the Property during the Term. The
Parties further acknowledge and agree that the Trustee and any other Permitted Leasehold
Mortgagee and their respective successors and assigns shall be deemed third party beneficiaries
hereunder, but solely with respect to the enforcement of any rights or interests expressly granted
hereunder to such Permitted Leasehold Mortgagees. Whenever a reference to either of the Parties
is made, such reference shall be deemed to include the legal representatives, successors and
assigns of said Party,the same as if in each case expressed.
(d) Applicable Law; Venue. This Ground Lease has been prepared and entered into by
the Parties with the intention that the law of the State, exclusive of the State's rules governing
• choice of law,shall govern its construction.
(e) All Genders and Numbers Included. Whenever the singular or plural number, or
masculine, feminine, or neuter gender is used in this Ground Lease, it shall equally apply to,
extend to, and include the other.
(f) Invalidity of Provision or Part Thereof. In the event any provision, or any portion
of any provision hereof shall be held invalid,the other provisions hereof and the remaining portion
of said provision, shall not be affected thereby and shall continue in full force and effect.
(g) Time is of the Essence.All time limits stated in this Ground Lease are of the essence
hereof.
(h) Section Captions are to be Disregarded. The captions of the numbered sections
hereof are for purposes of identification and convenience only and are to be completely
disregarded in construing this Ground Lease.
(i) Subordination.Except with respect to the Lessor's interest in the Ground Lease and
the Lessor's fee interest in the Property,which interests shall not be subordinated to the rights of
the Lessee, Permitted Leasehold Mortgagee, Trustee, or Bondholders, the Lessor agrees that the
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financing of the design, acquisition, construction, furnishing, and equipping of the Project will
directly benefit the Lessor's operations and the Lessor agrees that its interest in and to the rents,
revenues, issues and profits relating to the operation of the Project, including, without limitation,
all insurance proceeds, reserve funds and gross revenues, as well as any and all rights to any and
all contracts, agreements and other instruments in connection with the design, acquisition,
construction, equipping, installation, and operation of the Project, including, without limitation,
all Assigned Agreements shall be junior and subordinate to the interest of the Trustee in any such
Assigned Agreements as granted or provided in any of the Bond Documents (collectively, the
"Bond Collateral"). So long as any of the indebtedness created, evidenced, or secured by any of
the Bond Documents shall remain outstanding and unpaid,the Lessor shall not exercise any rights
or remedies with respect to the Bond Collateral without obtaining the prior written consent of the
Trustee or any other Primary Leasehold Mortgagee succeeding to the interests of the Trustee.
(j) Entire Agreement Contained Herein. The making, execution and delivery hereof
by the Lessee has not been induced by any representations, statements, covenants or warranties
by the Lessor except for those contained in this Ground Lease.This Ground Lease constitutes the
full, complete and entire agreement between the Parties; no agent, employee, officer,
representative or attorney of the Parties has authority to make, or has made, any statement,
agreement,representation or contemporaneous agreement,oral or written, in connection herewith
modifying, adding to or changing the provisions.hereof. No amendment hereof shall be binding
unless such amendment shall be in writing, signed by both Parties and approved by the Primary
Leasehold Mortgagee or Permitted Leasehold Mortgagee, as applicable, and attached to,
incorporated in and by reference made a part hereof.
(k) No Partnership or Agency. Nothing in this Ground Lease is intended, or shall in
any way be construed, so as to create any form of partnership or agency relationship between the
Parties. The Parties hereby expressly disclaim any intention of any kind to create any partnership
or agency relationship between themselves. Nothing in this Ground Lease shall be construed to
make either Party liable for any of the indebtedness of the other, except as specifically provided
herein.
(I) Limitation of Liability. Notwithstanding anything herein to the contrary, the
liability of the Lessee hereunder(including, but not limited to its indemnity obligations) shall be
limited to the Lessee's interest in the Premises and the rents, issues and surplus related thereto
and, accordingly, the Lessor's sole source of satisfaction of such obligations shall be limited to
such assets,and the Lessor shall not seek to obtain payment from any person or entity comprising
the Lessee or from any assets of the Lessee other than those described herein, notwithstanding
the survival of any obligation of the Lessee beyond the Term.
(m) Recordation of Memorandum of Lease. The Lessor and the Lessee agree that the
Parties shall execute, seal,acknowledge,and deliver simultaneously with the execution hereof, in
recordable form, a memorandum of lease setting forth the basic terms hereof.
(n) Counterparts. This Ground Lease may be executed simultaneously in two or more
counterparts, each of which shall be deemed original and all of which,when taken together, shall
constitute one in the same document. The signature of any Party to any counterpart shall be
deemed a signature too, and may be appended to, any other counterpart.
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(o) Preservation of Tax Exemption. The Lessor shall not take any action with respect
to the Project that would adversely affect the exemption, if any, of interest on any Bonds from
gross income for federal income tax purposes or would otherwise result in a breach of any
representations, conditions, or covenants of the Lessee as set forth in the Bond Documents.
(p) , Language Construction. The language in all parts hereof shall be construed, in all
cases, according to its fair meaning, and not for or against either Party. The Parties acknowledge
that each Party and its counsel have reviewed and revised this Ground Lease and that the normal
rule of construction to the effect that any ambiguities are to be resolved against the drafting Party
shall not be employed in the interpretation hereof.
(q) City Manager's Delezated Authority. Notwithstanding any provision to the
contrary in this Ground Lease, nothing herein shall preclude the City Manager from seeking
direction from or electing to have the City Commission determine any matter arising out of or
related to this Ground Lease, including,without limitation,any approval contemplated under this
Ground Lease, any proposed amendment or modification to this Ground Lease, or any separate
agreement relating to the Premises or otherwise referenced in this Ground Lease.
(r) Nondiscrimination. Lessee, Asset Manager, and its employees, agents and
representatives shall not discriminate against any employee, applicant for employment, vendor,
Eligible Resident or invitee because of actual or perceived race, color, national origin, religion,
sex, intersexuality,gender identity,sexual orientation,marital and familial status, age,disability,
ancestry, height, weight, domestic partner status, labor organization membership, familial
situation, or political affiliation. Further, Lessee shall comply with the City of Miami Beach
Human Rights Ordinance,set forth in Chapter 62 of the City Code,as may be amended from time
to time, prohibiting discrimination in employment, housing, public accommodations, and public
services on account of actual or perceived race,color,national origin,religion,sex,intersexuality,
gender identity, sexual orientation, marital and familial status, age, disability, ancestry, height,
weight, domestic partner status, labor organization membership, familial situation, or political
affiliation.
(s) Independent Legal Counsel.The Parties mutually acknowledge that they each have
had the opportunity to be represented by independent legal counsel in negotiations leading up to
and in executing this Ground Lease.
(t) . Electronic Signatures. The Parties agree that the electronic signature of a Party
hereto shall be as valid as an original signature of such Party and shall be effective to bind such
Party. The Parties further agree that any electronically signed document (including this Ground
Lease) shall be deemed (i) to be "written" or "in writing," (ii) to have been signed, and (iii) to
constitute a record established and maintained in the ordinary course of business and an original
written record when printed from electronic files. Such paper copies or"printouts," if introduced
as evidence in any judicial, arbitral, mediation, or administrative proceeding, shall be admissible
as between the Parties to the same extent and under the same conditions as other original business
records created and maintained in documentary form.Neither Party shall contest the admissibility
of true and accurate copies of electronically signed documents on the basis of the best evidence
rule or as not satisfying the business records exception to the hearsay rule. For purposes hereof,
"electronic signature" shall include images of manually executed signatures transmitted by
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facsimile or other electronic format(including,without limitation,"pdf',"tiP'or"jpg") and other
electronic signatures (including, without limitation, DocuSign and AdobeSign). The use of
electronic signatures and electronic records (including, without limitation, any contract or other
record created, generated, sent, communicated, received, or stored by electronic means;
"transmitted by electronic means" means sent in the form of a facsimile or sent via the internet as
a"pdf' (portable document format)or other replicating image attached to an e mail message;and
"electronically signed document" means a document transmitted by electronic means and
containing, or to which there is affixed, an electronic signature.
(u) Lessor's Failure to Perform. If the Lessor shall fail to perform, or cause to be
performed, any term, covenant, condition, or provision imposed upon it hereunder, and to correct
such failure within ten (10) Business Days after written notice specifying such is given to the
Lessor by the Lessee, the Lessee shall have the right to perform such term, covenant, condition,
or provision on behalf of the Lessor.
• Section 37. Books and Records:Audit Rights.
(a) Lessee shall at all times during the Term of this Ground Lease keep and maintain
(separate from any of Lessee's other books, records and accounts), and shall cause the Asset
Manager to keep and maintain, accurate and complete records pertaining to the Premises related
thereto, including,without limitation, books of account reflecting the Revenues and Expenses and
such other matters referenced in this Ground Lease, in accordance with the GAAP with such
exceptions as may be provided for in this Ground Lease, and provided that Lessee (and the Asset
Manager)may make such reasonable modifications in such books of account as are consistent with
standard practice in accounting for its operations under management contracts generally. Lessor
and its representatives shall have, during normal business hours and upon reasonable advance
notice, access to inspect the books and records of Lessee and the Asset Manager pertaining to the
Revenues and Expenses of the Premises, including,without limitation, books of account properly
reflecting the operations of the Premises, which books and records shall be kept at its principal
place of business. Lessor shall have the right to cause an audit by Lessor's internal auditors (in
accordance with GAAP)of such books and records to be made at any time(but not more frequently
than one(1)time in any twelve (12) month period, as an Expense of the Project(a copy of which
shall be delivered to Lessee). Such right of inspection and audit may be exercised at any time
within three(3)years after the end of the Lease Year to which such books and records relate, and
Lessee and Asset Manager shall maintain all such books and records for at least such period of
time and, if any dispute between the Parties has arisen and remains unresolved at the expiration of •
such period of time, for such further period of time until the resolution of such dispute.
Notwithstanding anything to the contrary contained herein, in the event that Lessor determines to
have such audit performed by its external auditors, Lessor shall pay the fees and expenses or said
external auditors.
(b) If, upon any audit by Lessor as described above of the books or records of Lessee
or Asset Manager, (i) an error (which shall mean a mistake in calculation of Revenues, an
accounting error, but shall exclude any error based on assertions that Lessee or Asset Manager
acted imprudently or unwisely in connection with the collection of the Revenues)shall be revealed
which results in there being due to Lessor Net Available Cash Flow for any Lease Year for which
Annual Financial Statements are being audited pursuant to this Section, the amounts of any such
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underpayments of Net Available Cash Flow which may be disclosed by such audit, together with
interest thereon at the Default Rate from the date(s)on which such underpayment(s) should have
been paid until the date of payment thereof, shall be paid to Lessor from amounts in the Surplus
Fund under the Indenture in accordance with the following year's Annual Budget which allows
for the Project to achieve the necessary Fixed Charges Coverage Ratio or(ii) an error(as defined
in clause(i)above)shall be revealed which resulted in an overpayment by Lessee to Lessor of Net
Available Cash Flow, Lessor shall remit the amount of such overpayment (less the cost of such
audit)to Lessee within thirty(30)days after the completion of such audit. If Lessor does not notify
Lessee of any error in the calculation of Net Available Cash Flow within three (3) years after the
end of any Lease Year, then Lessor shall be deemed to have conclusively waived any and all
objections with respect to any Net Available Cash Flow payments with respect to such Lease Year.
(c) Notwithstanding any of the foregoing provisions of this Section, so long as Lessor
is the City or any instrumentality of the City, the following provisions shall be applicable to the
books and records of the Project, the Annual Financial Statements, the Annual Budget and any
other documents (collectively, the "Project Documents") required to—be delivered or made
available to Lessor under this Ground Lease:
(i) All Project Documents shall be made available to Lessor and its
representatives as provided above.
(i) If a copy of any Project Document is made by Lessor or any of its
representatives and delivered to Lessor's offices and Lessee believes that such Project
Document may contain proprietary or confidential information of the Lessee that is exempt
from public records disclosure under Florida law, there shall be attached to the front of the
first page of such Project Document a sheet of paper bearing the legend set forth below in
capital letters and in a type size not less than that provided below:
THE ATTACHED DOCUMENT CONTAINS BUSINESS OR FINANCIAL
INFORMATION. THE ATTACHED DOCUMENT SHALL BE SUBJECT TO PUBLIC
RECORDS DISCLOSURE, SOLELY IN ACCORDANCE WITH APPLICABLE LAW.
(e) Promptly following receipt of a request under any Governmental Requirement for
the release of a copy of any Project Document, Lessor shall send notify Lessee of such request,
but neither Lessor nor any Indemnitees shall incur any liability to Lessee if Lessor fails to provide
any such notice.
(f) Neither Lessor nor any Indemnitee shall incur any liability to Lessee in the event
any Project Document is stolen, misplaced or otherwise released in violation of the foregoing
provisions of this Section.
(g) The obligations of Lessee and Lessor under this Section shall survive the Expiration
of the Term.
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[The remainder of this page is intentionally left blank]
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IN WITNESS WHEREOF,the Lessor and the Lessee have caused this GROUND LEASE
AGREEMENT to be duly executed in duplicate counterparts each of which shall be deemed to be
an original,the day and year first above written.
LESSOR:
Signed, sealed and delivered CITY OF MIAMI BEACH, FLORIDA, a
in the presence of: Florida municipal corporation
By:
Print Name: , City Manager
Print Name:
ATTEST Approved for form and legal sufficiency
By: By:
City Clerk City Attorney
STATE OF FLORIDA )
MIAMI-DADE COUNTY
I, the undersigned Notary Public in and for said County in said State, hereby certify that
,City Manager of the City of Miami Beach, a Florida municipal corporation,
is signed to the foregoing Ground Lease Agreement, and who is known to me, acknowledged
before me on this day that, being informed of the contents of the Ground Lease Agreement, she,
as such officer and with full authority,executed the same voluntarily for and as the act of the City
of Miami Beach.
Commission Expires:
Notary Public
Commission Number:
Signature Page to r u d Lease
a a Agreement
LESSEE
CFC-MB I, LLC, an Arizona limited liability company
By: Community Finance Corporation, an Arizona
nonprofit corporation, its sole member
By:
Name: Michael S. Hammond
Its: President
STATE OF §
COUNTY §
I, the undersigned Notary Public in and for said County in said State, hereby certify that
Michael Hammond whose name as President of CFC- MB I LLC, a Florida limited liability
company, is signed to the foregoing Ground Lease Agreement, and who is known to me,
acknowledged before me on this day that, being informed of the contents of the Ground Lease
Agreement, he, as such officer and with full authority, executed the same voluntarily for and as
the act of said CFC- MB I LLC.
GIVEN UNDER MY HAND AND OFFICIAL,NOTARIAL SEAL this day of
,2022.
(SEAL)
Notary Public
My commission expires:
Signature Page to Ground Lease Agreement
Page 104 of 272
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
Lots 7, 9 and 11, less the northern 10 feet for right-of-way, and the northern 25 feet of Lots 10
and 12, Block 2, Miami Beach Improvement Company Subdivision, as recorded in Plat Book 5,
Page 7 of the Public Records of Miami-Dade County,Florida.
Folio Number: 02-3226-001-0460
A-1
Page 105 of 272
EXHIBIT B
CITY DEVELOPMENT AGREEMENT
•
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EXHIBIT C
DEVELOPER ASSIGNMENT
STATE OF FLORIDA )
DEVELOPER'S ASSIGNMENT
COUNTY OF MIAMI-DADE )
This DEVELOPER'S ASSIGNMENT, made and entered into as of the__th day of February,
2022 (this"Assignment"),by SERVITAS,LLC,a limited liability company organized and existing
under the laws of the State of Texas, in favor of CFC-CMB I LLC (the "Borrower"), a single
member limited liability company organized and existing under the laws of the State of Arizona
and duly qualified to do business in the State.
WITNESSETH:
WHEREAS, the Miami-Dade County Industrial Development Authority(the "Issuer") has
issued its Industrial Development Revenue Bonds (CFC — MB I, LLC- Collins Park Housing
Project), Series 2022A (the "Series 2022A Bonds") and its Industrial Development Revenue
Bonds, (CFC—MB I, LLC- Collins Park Housing Project), Series 2022B (Taxable) (the "Series
2022B Bonds"), and its Industrial Development Revenue Bonds (CFC-MB I, LLC Collins Park
Housing Project), Series 2022C (Subordinate) (the "Series 2022C Bonds") together with the
Series 2022A and 2022B Bonds, the "Series 2022 Bonds")under and pursuant to the terms of a
Trust Indenture (the "Indenture") dated as of [ 1 1, 2022 between the Issuer and Zions
Bancorporation, National Association, as Trustee (the "Trustee") to lend the proceeds of the
Series 2022 Bonds to the Borrower for the purpose, inter alia, of providing funds to finance
substantially all of the cost of the construction, furnishing and equipping of an approximately
73,000 square foot,7-story housing facility located at 224 23rd Street,in the City of Miami Beach,
in Miami-Dade County (the "Series 2022 Project"),which will be owned by Borrower; and
WHEREAS,the Borrower and the Developer have entered into a Development Agreement
(the "Development Agreement') of even date herewith pursuant to which the Developer has
agreed to develop the Project; and
WHEREAS,the Developer and Moss& Associates, LLC (the "General Contractor") have
entered into a Construction Services Agreement (the"General Construction Contract') of even
date herewith pursuant to which the General Contractor has agreed to construct the Project; and
WHEREAS, the Developer and PGAL, Inc. (the "Architect") have entered into a Design
Services Agreement (the "Architect's Agreement") of even date herewith pursuant to which the
Architect has agreed to provide certain architectural and engineering services in connection with
the construction of the Project, including the provision of certain Plans and Specifications therefor
(together with any and all amendments thereof and/or supplements thereto, the "Plans and
Specifications");
WHEREAS, in order to secure its obligations to the Developer under the General
Construction Contract, the General Contractor has executed and delivered to the Developer a
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•
General Contractor's Assignment(the"General Contractor's Assignment')of even date herewith
pursuant to which it has collaterally assigned to the Developer all of its right, title, and interest in
and to all contracts and/or agreements (whether entered into on or before the date hereof or
hereafter)between the General Contractor and any person or firm rendering services or supplying
material in connection with the design or construction of the Project, including,without limitation,
all construction, architectural, engineering, and landscaping or landscape improvement contracts
or agreements and all plans, specifications, and drawings prepared pursuant to such contracts or
agreements, and any amendments thereof and/or supplements thereto; and
WHEREAS, in order to secure its obligations under the Development Agreement, the
Developer wishes to assign to the Borrower all of its right, title, and interest in and to the
Construction Contract, the Architect's Agreement, and all other contracts and/or agreements
(whether entered into on or before the date hereof or hereafter) between the Developer or the
General Contractor and any person or firm rendering services or supplying material in connection r
with the development, design, or construction of the Project, including, without limitation, all
construction, architectural, engineering, and landscaping or landscape improvement contracts or
agreements and all plans, specifications, and drawings prepared pursuant to such contracts or
agreements, and any amendments thereof and/or supplements thereto; and
Now,THEREFORE,to induce the Borrower to enter into the Development Agreement and
to secure the performance by the Developer of its agreements under the Development Agreement,
and for and in consideration of the sum of One and No/I 00 Dollars ($1.00) paid by the Borrower
to the Developer this date, and for other valuable consideration, the receipt of which is
acknowledged, the Developer and the Borrower (collectively, the "Parties" and each, a "Party")
agree as follows:
Section 1. Creation of Security Interest: Description of the Development
Documents. The Developer hereby grants to the Borrower a present and continuing security
interest in the following collateral (the "Development Documents"), and in its expectancy to
acquire the Development Documents in the ordinary course of business:
(a) the General Construction Contract, and any amendments thereof and/or supplements
thereto;
(b) the General Contractor's Assignment;
(c) the Architect's Agreement, and any amendments thereof and/or supplements thereto;
(d) the Plans and Specifications;
(e) all those other contracts and/or agreements between the Developer or the General
Contractor and any person or firm rendering services or supplying material in connection with the
development,design,or construction of the Project,including,without limitation,all construction,
architectural,engineering,and landscaping or landscape improvement contracts or agreements and
all plans, specifications, and drawings prepared pursuant to such contracts or agreements,and any
amendments thereof and/or supplements thereto;
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(f) all surveys, building permits, fill permits, sewer connection or tap-in permits, water
connection or tap-in permits, curb-cut permits,certificates of occupancy, concurrency certificates,
entitlements,development rights,zoning and variance approvals,utility service bonds and/or cash
deposits, site improvement bonds and/or cash deposits, utility service agreements, site work
agreements with any governmental authority or public utility, and all other agreements, contracts,
contract rights, documents of title, choses in action, intangible property, permits, licenses,
approvals, consents, authorizations, plans, franchises, trademarks, project logos, building names,
insurance policies,bonds,escrow funds,easements,and exclusive agency licenses or leases of any
kind now existing or hereafter arising or created or entered into relating to the acquisition,
construction, renovation, or development of the property on which the Project is to be constructed
(the"Property") or any portion thereof;
(g) all warranties and guaranties covering any appliances and fixtures now or hereafter
located on or placed upon the Property,including without limitation,air conditioning,heating,and
other appliances and equipment;
(h) all accounts, books, records, and other property relating or referring to any of the
foregoing; and
(i) all proceeds of any and all of the foregoing and, to the extent not otherwise included,
all payments under insurance (whether or not the Borrower is the loss payee thereof), or any
indemnity, warranty, or guaranty, payable by reason of damage to, loss with respect to, or
otherwise with respect to, any of the foregoing.
Section 2. Present Assfnment; Enforcement. THIS INSTRUMENT IS A PRESENT
ASSIGNMENT OF THE DEVELOPER'S RIGHTS IN THE DEVELOPMENT DOCUMENTS The Borrower
shall have the right, power, and privilege (but shall be under no duty) immediately to exercise all
of the rights and privileges of the Developer. Notwithstanding the foregoing, until the earlier of
(i)the occurrence of a default or an event of default under the Development Agreement(an"Event
ofDefault')or the occurrence of an event or circumstance that with the lapse of time or the giving
of notice or both would constitute an Event of Default(a"Default Condition")or(ii) the date after
which the Developer shall have no further development responsibilities under the Development
Agreement(the"Termination Date"), the Developer may exercise such rights and privileges. In
the event of the occurrence of an Event of Default or a Default Condition, and in any event, after
the Termination Date, the Borrower may at its option, then or thereafter and subject to the
provisions of the Development Documents, do any one or more of the following as fully as the
Developer could do if personally present: make, control, or modify any of the Development
Documents upon such terms and for such periods of time and upon such conditions as the Borrower
may deem fit and proper; enforce or cancel any of the Development Documents now in effect or
hereafter in effect; collect, demand, sue for, attach, levy, recover and receive, compromise and
adjust, and execute and deliver receipts and releases for all amounts payable under the
Development Documents; from or out of any other funds of the Developer deposited with the
Borrower, pay and discharge all expenses or charges in the satisfaction of any obligation of the
Developer under any of the Development Documents or that it may be advisable for the Borrower
to pay or expend in order to prevent or cure a default under any of the Development Documents,
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including, but without limitation, reasonable attorneys' fees and costs for any other services that
may be required; and otherwise do whatsoever ought to be done with respect to the Development
Documents as fully as the Developer could do if personally present. The Borrower shall, after
payment of all of the foregoing charges and expenses, credit the net amount of income that it may
receive by virtue of this Assignment,if any,to any amounts due the Borrower from the Developer,
with all the rights, powers, privileges, and authority so created. The Borrower shall not, prior to
exercise or enforcement thereof by the Borrower,be deemed or construed to be obligated to appear
in or defend any action or proceeding relating to the Development Documents, to take any action
hereunder, or to expend any money or incur any expenses or perform or discharge any obligation,
duty, or liability under the Development Documents.
Section 3. Power of Attorney. The Developer does hereby irrevocably constitute and
appoint the Borrower the true and lawful attorney, coupled with an interest, of the Developer and
in the name, place, and stead of the Developer to undertake its enforcement rights under the
Development Documents and to collect and/or pay all amounts payable under the Development
Documents. This Assignment shall constitute a direction to and full authority to such other party
or parties to the Development Documents to render performance to or for the Borrower and/or to
pay all such amounts to the Borrower or its appointed agent. A written demand by the Borrower
on each such person for such performance and/or payment shall be sufficient to warrant such
person's rendering all future performance and/or make all future payments of such amounts
directly to the Borrower or its appointed agent without the necessity for further consent by the
Developer. Each such person shall be entitled to rely upon a written demand by the Borrower for
such performance and/or payment and shall be fully protected from any claims by the Developer
for all performance rendered and/or payments made to the Borrower or its appointed agent after
receipt of such written demand. The foregoing rights,powers,and privileges are to be irrevocable
and continuing, and shall be exclusive in the Borrower so long as any part of the Development
Agreement shall remain unperformed. Notwithstanding the foregoing, until the occurrence of an
Event of Default or a Default Condition, the Borrower shall take no action pursuant to the
foregoing rights, powers, and privileges.
Section 4. Authorization and Direction to General Contractor and Architect. The
Developer hereby authorizes and directs the General Contractor,the Architect,and all other parties
to the Development Documents upon receipt from the Borrower of written notice to the effect that
the Developer is in default under the Development Agreement or that the Termination Date has
occurred,to render performance to the Borrower,its appointed agent,or its assigns and to continue
so to do until otherwise notified by the Borrower.
Section 5 Representations and Warranties. The Developer hereby represents and
warrants to the Borrower that (a)the Developer is the sole owner of the"Owner's" interest under
the Development Documents (either as principal or assignee) and has the full and complete right,
title, and authority to sell, assign, transfer, and set over the same and to grant and confer upon the
Borrower the rights, interests, liens, power, and authorities herein granted and conferred; (b)the
Developer has not executed any prior assignment of the Development Documents; (c) the
Developer has not performed any act or executed any other instrument that might prevent the
Borrower from enjoying and exercising any of its rights and privileges evidenced hereby; (d)the
Developer has not executed or granted any modifications to any existing Development Documents
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except as previously disclosed to the Borrower in writing;(e) all existing Development Documents
are valid and in full force and effect; (f) there are no defaults or events of default now existing
under any of the Development Documents,and no event has occurred that with the passage of time
or the giving of notice, or both, would constitute such a default or event of default.
Section 6. No Additional Encumbrances.Amendments. etc. The Developer agrees that,
so long as any part of the Development Agreement shall remain unperformed, the Developer will
make no further assignment, pledge, or disposition either of the Development Documents or any
part of any thereof;nor will the Developer cancel or terminate any of the Development Documents
so as to effect directly or indirectly, proximately or remotely, a termination or diminution of the
obligations of the other party or parties thereunder; nor will the Developer, except to the extent
, required by the terms of any of the Development Documents, consent to an assignment of the
interest and estate of the other party or parties under any of the Development Documents; and any
such acts, if done or permitted to be done without the prior written consent of the Borrower, shall
be null and void and shall constitute an Event of Default.
Section 7. Performance of Developer's Obligations Under the Development
Documents; Further Assurances. The Developer covenants with the Borrower to observe and
perform all the obligations imposed upon it under the Development Documents and not to do or
permit to be done anything to impair the security thereof; to exercise any option or election
contained in or relating to any of the Development Documents that the Borrower shall require; at
the Borrower's request, to assign and transfer to the Borrower by specific assignment of
development documents, in the form of this Assignment any and all subsequent Development
Documents (it being understood and agreed that no such specific assignment shall be required for
such subsequent Development Documents to be covered by and included within this Assignment
as provided herein); and to execute and deliver at the request of the Borrower all such further
assurances and assignments in the rights and privileges covered by the Development Documents
as the Borrower shall from time to time require.
Section 8. Borrower Not Liable for Losses:Indemnification. The Borrower shall not be
liable for any loss sustained by the Developer resulting from any act or omission of the Borrower
in exercising its rights and remedies under this Assignment unless such loss is caused by the willful
misconduct and bad faith of the Borrower, nor shall the Borrower be obligated to perform or
discharge any obligation, duty, or liability under the Development Documents or under or by
reason of this Assignment or the exercise of rights or remedies hereunder. The Developer shall
and does hereby agree to indemnify the Borrower for, and to hold the Borrower harmless from,
any and all liability, loss,or damage that may or might be incurred under any of the Development
Documents or under or by reason of this Assignment or the exercise of rights or remedies
hereunder and from any and all claims and demands whatsoever that may be asserted against the
Borrower by reason of any alleged obligations or undertakings on its part to perform or discharge
any of the terms, covenants, or agreements contained in any of the Development Documents.
Should the Borrower incur any such liability under any of the Development Documents or under
or by reason of this Assignment or the exercise of rights or remedies hereunder or in defense of
any such claims or demands, the amount thereof, including costs, expenses, and reasonable
attorneys' fees, shall be secured hereby, and the Developer shall reimburse the Borrower therefor
immediately upon demand. This Assignment shall not, in and of itself, operate to place
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responsibility upon the Borrower for the carrying out of any of the terms and conditions of any of
the Development Documents.
Section 9. No Waiver by the Borrower. Nothing contained herein and no act done or
omitted by the Borrower pursuant to the powers and rights granted it hereunder shall be deemed
to be a waiver by the Borrower of its rights and remedies under the Development Agreement or a
waiver or curing of any Event of Default or Default Condition, and this Assignment is made and
accepted without prejudice to any of the rights and remedies possessed by the Borrower under the
terms of the Development Agreement. The right of the Borrower to enforce any other security for
the Development Agreement held by it may be exercised by the Borrower either prior to,
simultaneously with, or subsequent to any action taken by it hereunder.
Section 10. Borrower Deemed a Creditor of Other Parties to the Development
Documents. The Borrower shall be and is hereby deemed to be tl;:e creditor of the other party or
parties under the Development Documents in respect of any and all claims for damages,
assignments for the benefit of creditors, and bankruptcy, reorganization, insolvency, dissolution,
or receivership proceedings affecting such party or parties (without obligation on the part of the
Borrower, however, to file or make timely filings in such proceeding or otherwise to pursue
creditors' rights therein). The Developer hereby assigns to the Borrower any and all damages and
any and all money received in connection with such assignment for the benefit of creditors or in
any such bankruptcy, reorganization, insolvency, dissolution, or receivership proceeding with
option to the Borrower to apply such damages or any money received by the Borrower as such
creditor in reduction of any obligations owed to the Borrower under the Development Agreement
in such order as the Borrower, in its sole and absolute discretion, may determine. The Developer
hereby appoints the Borrower its attorney-in-fact to appear in any action and/or to collect any such
money or payment,it being understood and agreed that,until the occurrence of an Event of Default
or a Default Condition, the Borrower shall take no action pursuant to the foregoing appointment.
Section IL Effect of Waivers and Consents by the Borrower. The Borrower may,at any
time and from time to time, in writing (a) waive compliance by the Developer with any covenant
herein made by the Developer to the extent and in the manner specified in such writing;(b) consent
to the Developer's doing any act that hereunder the Developer is prohibited from doing,or consent
to the Developer's failing to do any act that hereunder the Developer is required to do,to the extent
and in the manner specified in such writing;or(c)release any part of the Development Documents
or any interest therein from this Assignment. No such act shall in any way impair the rights of the
Borrower hereunder except to the extent specifically agreed to by the Borrower in such writing.
Section 12. Borrower's Melts Not Impaired. The rights and remedies of the Borrower
hereunder shall not be impaired by any indulgence, including but not limited to (a) any renewal,
extension, or modification that the Borrower may grant with respect to the Development
Agreement, or (b) any surrender, compromise, release, renewal, extension, exchange, or
substitution that the Borrower may grant in respect of any of the Development Documents or any
part thereof or any interest therein.
Section 13. Addresses for Notices, etc.. All notices and other communications provided
for hereunder shall be in writing and shall be deemed given or furnished when mailed certified
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mail, return receipt requested,when transmitted electronically,or when personally delivered to the
Borrower do CFC—MB I, LLC do Community Finance Corp., 333 N. Wilmont Rd., Ste. 227,
Tucson,AZ 85711 Attention: Gary Molenda Email: gmolenda@bdfc.com and to the Developer at
5525 North MacArthur Boulevard, Suite 760, Irving,Texas 75038 (Attention: President) E-Mail:
rfigueroa@servitas.com. Either Party may change the address for said notice by appropriately
notifying the other Party in writing.
Section 14. Required Consents to Amendments. The Developer covenants and agrees
not to amend, modify,or supplement this Assignment,the Development Agreement, or any of the
Development Documents without the prior written consent of the Borrower and agrees not to
amend, modify, or supplement this Assignment, the General Construction Contract, or any of the
Development Documents in a way that would materially adversely affect the interest of the owners
of Series 2022 Bonds without the consent of the Trustee.
Section 15. Partial Invalidity/Severability. If any term, provision,covenant, or condition
of this Assignment shall be deemed invalid or unenforceable in any jurisdiction, the remainder of
this Assignment shall not be affected thereby, and each remaining term, provision, covenant, or
condition shall,as to such jurisdiction,be valid and enforced to the fullest extent permitted by law.
Section 16. Execution of Counterparts. This Assignment may be executed in several
counterparts, each of which shall be an original and all of which, when taken together, shall
constitute but one and the same instrument.
Section 17. Law Governing Construction of this Assignment; Defined Terms. This
Assignment has been prepared and entered into by the Parties with the intention that the law of the
State, exclusive of such state's rules governing choice of law, shall govern its construction.
Section 18. Language Construction. The language in all parts of this Assignment shall
be construed, in all cases, according to its fair meaning, and not for or against either Party. The
Parties acknowledge that each Party and its counsel have reviewed and revised this Assignment
and that the normal rule of construction to the effect that any ambiguities are to be resolved against
the drafting Party shall not be employed in the interpretation of this Assignment.
Section 19. Independent Legal Counsel. The Parties mutually acknowledge that they
each have had the opportunity to be represented by independent legal counsel in negotiations
leading up to and in executing this Assignment.
Section 20. Headings. The headings of the sections of this Assignment are solely for
convenience of reference, are not a part of this Assignment, and shall not be deemed to affect the
meaning, construction, or effect of any of its provisions.
Section 21. Successors and Assigns. All covenants,promises,and agreements contained
in this Assignment by or on behalf of or for the benefit of the Developer or the Borrower shall bind
and inure to the benefit of their respective successors and assigns,whether so expressed or not.
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Section 22. Relationship of the Parties. Nothing contained in this Assignment shall be
deemed or construed as creating an agency, partnership, or joint venture relationship between the
Developer and the Borrower.
Section 23. Patriot Act. Federal law requires all financial institutions to obtain, verify,
and record information that identifies each Person who opens an account. Accordingly,the Parties
acknowledge that the Trustee may require documentation from each non-individual Person such
as a business entity, a charity, a trust, or other legal entity verifying its formation as a legal entity
and that the Trustee may also request identifying information to sufficiently verify the identities
of individuals claiming authority to represent the entity.
Section 24. Specially Designated Nationals and Blocked Persons List. Each Party
certifies that: (a) it is not acting, directly or indirectly, for or on behalf of any person,group,entity
or nation named by any Executive Order or the:United States Treasury Department as a terrorist,
"Specially Designated National and Blocked Person," or other banned or blocked person, entity,
nation,or transaction pursuant to any law,order,rule,or regulation that is enforced or administered
by the Office of Foreign Assets Control; and (b) it is not engaged in this transaction, directly or
indirectly on behalf of, or instigating or facilitating this transaction,directly or indirectly on behalf
of, any such person, group, entity or nation. Each Party agrees to defend, indemnify, and hold
harmless the other Party from and against any and all claims, damages, losses,risks, liabilities and
expenses(including attorneys'fees and costs)arising from or related to any breach of the foregoing
certification.
Section 25. WAIVER OF STAY. IN THE EVENT OF A VOLUNTARY OR INVOLUNTARY
LIQUIDATION OR REORGANIZATION CASE BY OR AGAINST THE DEVELOPER UNDER
BANKRUPTCY,RECEIVERSHIP,OR OTHER INSOLVENCY LAW,THE DEVELOPER HEREBY AGREES
THAT THE BORROWER SHALL BE FREE TO PURSUE REMEDIES WITH RESPECT TO THE CONTRACTS
AND AGREEMENTS WITHOUT OPPOSITION OR INTERFERENCE BY THE DEVELOPER, THAT THE
BORROWER SHALL BE ENTITLED TO SEEK AND OBTAIN RELIEF FROM THE AUTOMATIC STAY
UNDER §362 OF THE FEDERAL BANKRUPTCY CODE WITHOUT OBJECTION BY THE DEVELOPER,
AND THAT ANY RIGHTS TO STAY, ENJOIN,OR OTHERWISE DELAY OR IMPEDE THE BORROWER'S
REMEDIES AGAINST THE CONTRACTS AND AGREEMENTS THAT MIGHT BE AVAILABLE TO THE
DEVELOPER, INCLUDING ANY RIGHTS UNDER §§105 AND 362 OF THE FEDERAL BANKRUPTCY
CODE,ARE HEREBY RELEASED AND WAIVED.
IN WITNESS WHEREOF, the Developer has caused this DEVELOPER'S ASSIGNMENT to be
executed as of the day and year first hereinabove written.
DEVELOPER:
WITNESSES:
SERVITAS,LLC
By
Denise Hauck, COO
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EXHIBIT D
WORKFORCE HOUSING UNITS
COMPLIANCE PROCEDURES
(e) Definitions. Defined terms used herein and not otherwise defined shall have the same
meanings as those set forth in the Ground Lease.
(d) Lessee's Obligation to Continuously Operate. Upon completion of construction of the
Project, the Lessee shall continuously operate all Workforce Housing Units to serve Eligible Residents.
The restrictions relating to the Workforce Housing Units shall extend for the duration of the Term,
notwithstanding the durations otherwise identified in Chapter 58 of the City Code. The Lessee shall cause
the Asset Manager to use its best efforts to maintain the highest possible occupancy rate at the Project at
all times.
(e) Acceptance Priorities. The following acceptance priorities shall be applied to otherwise
income-eligible individuals who apply for Workforce Housing Units(the"Acceptance Priorities"):
(i) Tier 1 — Artists practicing in Miami-Dade County; City of Miami Beach
employees, including, without limitation, City of Miami Beach law enforcement personnel and
firefighters; Area Educators and nurses employed within the City of Miami Beach; and Veterans
who are either employed within the City of Miami Beach or whose last place of residence was
within the City of Miami Beach;
(ii) Tier 2—Individuals employed within the City of Miami Beach in the hospitality
and entertainment industries; and
(iii) Tier 3—Any other individuals employed within Miami-Dade County,with priority
for income-eligible individuals employed within the City of Miami Beach.
(iv) Any Workforce Housing Unit remaining vacant for at least sixty (60)
consecutive days may be offered and leased to any other Eligible Resident in a
subsequent tiered Acceptance Priority.
(f) Unit Mix. All Workforce Housing Units shall be marketed and rented solely to Eligible
Residents and units will be classified only as 80%AMI units, 100%AMI units or 120% AMI units. The
Project intends ultimately to achieve the Target Unit Mix. The monthly rent for the Workforce Housing
Units shall not exceed the rent limit by number of bedrooms in unit and household income for the AMI
category applicable to the Workforce Housing Units in question, as determined from time to time. The
current projected annual budgets reflected in the pro forma for the Project, anticipate a need for the Unit
Mix at the time of opening to be 100% of the Workforce Housing Units (i.e., all 80 units) as 120%AMI
units.When the Annual Budget is developed in respect of each Annual Period,Lessor and Lessee shall,if
possible,modify the Unit Mix by reallocating units from 120%AMI units to 100%AMI and/or 80%AMI
units to approach the Target Unit Mix as closely as possible, while ensuring, as of the date each such
Annual Budged is developed, the Project's ability to repay the Series 2022 Bonds, to cover all operating
expenses and meet the debt service coverage requirements of Section 510 of the Indenture for disbursement
of the Rent. The restrictions relating to the Workforce Housing Units shall extend for the duration of the
Term,notwithstanding the durations otherwise identified in Chapter 58 of the City Code.
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(g) Documenting Eligible Resident Status.
5.1 The Lessee will obtain, complete and maintain on file a Resident Certification of
Eligibility, in substantially the form of Attachment A attached hereto, from each Eligible Resident dated
immediately prior to the initial occupancy by such eligible resident in the Workforce Housing Unit. The
Lessee will verify a household's income either by obtaining (i) a copy of a resident's federal income tax
return for the tax year immediately prior to the commencement of such resident's occupancy, (ii) an
employer's verification of such resident's current income or(iii) if the resident is unemployed or if the tax
return is unavailable,other satisfactory evidence of income for such year.
5.2 Not less than 90 days prior to the annual anniversary of each Occupancy
Agreement throughout the Term, the Lessee shall recertify each resident obtaining an Annual Resident
Recertification in substantially the form set forth in Attachment B attached hereto. If at the time of
recertification the Eligible Resident's household income exceeds the applicable income limit for the unit in
question,but is not more than 140% AMI, the Eligible Resident's rent shall be modified to be consistent
with the household's then present income and the unit shall be accordingly reclassified. If the recertification
demonstrates that any such resident's household income exceeds 140%AMI,the resident's residency must
terminate at expiration of the resident's Occupancy Agreement. In such event,the Lessee shall immediately
notify, in writing, each resident who is no longer an Eligible Resident of such fact, and that the resident
must vacate the unit upon termination of the Occupancy Agreement and the unit will become available for
another Eligible Resident. Each time a unit becomes available for rent to a new tenant, the Lessor and
Lessee shall review the then existing Unit Mix and shall either leave the unit in the same AMI income
category as existed when the prior Eligible Resident vacated or reclassify the unit into a different permitted
AMI income category (i.e., 80% AMI, 100% AMI or 120% AMI) to approach the Target Unit Mix as
closely as possible,while ensuring,as of the date each such determination is made, the Project's ability to
repay the Series 2022 Bonds, to cover all operating expenses and meet the debt service coverage
requirements of Section 510 of the Indenture for disbursement of the Rent.
5.3 The Lessee will maintain complete and accurate records pertaining to the Eligible
Residents and will permit any duly authorized representative of the City or the Trustee to inspect the books
and records of the Lessee pertaining to the Project, including, without limitation, those records pertaining
to the occupancy and incomes of the Eligible Residents residing in the Project. This paragraph is not
intended to create any additional duties of the City or the Trustee to inspect records.
5.4 The Lessee will prepare and submit to the City and the Trustee quarterly, on or
before the first day of January, April, July and October for each year, commencing on the first such date
following the date of commencement of operations, a Certification of Continuing Program Compliance in
substantially the form of Attachment C executed by the Lessee,stating(i)the percentage of the Workforce
Housing Units of the Project which were occupied by Eligible Residents(or held vacant and available for
occupancy by Eligible Residents)during such period,and(ii)either that no default has occurred under these
Compliance Procedures or that such a default has occurred in which event the certificate shall describe the
nature of such default and the procedures being taken by the Lessee to remedy the same.
(h) Monthly Rents. The monthly rent for the Workforce Housing Units shall not exceed the
rent limit by number of bedrooms in unit and household income for the AMI category applicable to the
Workforce Housing Units in question, as determined from time to time.
(i) Occupancy Agreements.
7.1 All Occupancy Agreements for the Workforce Housing Units shall have initial
terms of twelve(12)months,and no sub-leasing of Occupancy Agreements shall be permitted.
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7.2 Any renewal terms for a period of less than six months and one day shall be strictly
prohibited.
7.3 The Lessee agrees to inform all prospective Eligible Residents of the requirements
for annual recertification of income and of the provisions of Section 5.3 in writing at initial occupancy.
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Attachment A
RESIDENT CERTIFICATION OF ELIGIBILITY
RE: CFC—MB I, LLC Collins Park Housing Project known known as the Miami Beach
Ballet Apartments
The undersigned hereby(certify)(certifies)that:
1. This Resident Certification of Eligibility is being delivered in connection with the
undersigned's application for.,occupancy of Apartment# in the Miami Beach Ballet
Apartments in Miami Beach,Florida.
2. List all the occupants of the apartment, the relationship (if any) of the various
occupants,their ages,their employment and their employment address. If they are eligible to work
from home,please check the appropriate box.
Employment Eligible
Occupant Relationship Age Employment Address (Street, to Work
City, State, Zip from
Code) Home
(a)
(b) _ E
(c) ❑
(d)
(e) C
(1) ❑
3. The total anticipated income for each person listed in paragraph 2 above during the
12 month period commencing with the date occupancy will begin including:
full amount, before any payroll deductions, of wages, salaries, overtime, commissions,
fees,tips, and bonuses; net income from the operation of a business or profession or from
the rental of real or personal property (without deducting expenditures for business
expansion or amortization of capital indebtedness or any allowance for depreciation of
capital assets); interest and dividends (including income from assets excluded below); the
full amount of periodic payments from social security, annuities, insurance policies,
retirement funds, pensions, disability or death benefits and other similar types of periodic
payments including any lump sum payment for the delayed start of a periodic payment;
payments in lieu of earnings,such as unemployment and disability compensation,workers'
compensation and severance pay; all public assistance income; periodic and determinable
allowances such as alimony and child support payments,and regular contributions or gifts
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received from persons not residing in the dwelling; all regular and special pay and
allowances of members of the Armed Forces (whether or not living in the dwelling) who
are the head of the family or spouse; and any earned income tax credit to the extent that it
exceeds income tax liability;
but excluding:
income from employment of children(including foster children)under the age of 18 years;
payments received for the care of foster children or foster adults (usually individuals with
disabilities, unrelated to the tenant family, who are unable to live alone); lump sum
additions to family assets, such as inheritances, insurance payments (including payments
under health and accident insurance and workers' compensation), capital gains and
settlement for personal or property losses; amounts which are specifically for
reimbursement of medical expenses; amounts of educational scholarships paid directly to
the student or the educational institution, and amounts paid to a veteran for use in meeting
the costs of tuition, fees, books and equipment, but in either case only to the extent used
for such purposes; special pay to a serviceman head of a family who is away from home
and exposed to hostile fire; amounts received under training programs funded by HUD;
amounts received under Plan to Attain Self-Sufficiency; amounts for out-of-pocket
expenditures incurred in connection with other public assistance programs;resident service
stipend(not in excess of$200 per month);amounts from state or local employment training
programs; temporary, nonrecurring or sporadic income (including gifts); reparation
payments paid by a foreign government to persons who were persecuted during the Nazi
era; earnings in excess of$480 for each full-time student 18 years old or older(excluding
head of family and spouse); adoption assistance payments in excess of$480 per adopted
child; deferred periodic payments of supplemental social security income and benefits
received in a lump sum; refunds or rebates of property taxes paid on the unit; payments
from state agency to allow developmentally disabled family member to stay home;
relocation payments under Title II of the Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970; foster child care payments; the value of coupon
allotments for the purchase of food pursuant to the Food Stamp Act of 1964 which is in
excess of the amount actually charges for the allotments;and payments to volunteers under
the Domestic Volunteer Service Act of 1973; is as follows:
Anticipated Source of Income or
Occupant Annual Income Employer
(a) $
(b) $
(c) $
(d) $
(e) $
(0 $
TOTAL: $
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4. This Resident Certification of Eligibility is made with the knowledge that it will be
relied upon by the Owner to determine maximum income for eligibility to occupy the unit, and
Uwe declare that all information set forth herein is true, correct and complete and based upon
information I/we deem reliable and that the statement of total anticipated income contained in
paragraph 3 is reasonable and based upon such investigation as the undersigned deemed necessary.
5. -I/we will assist the Owner in obtaining any information or documents required to
verify the statements made therein, including either an income verification from my/our present
employer(s) or copies of federal tax returns for the immediately preceding calendar year.
6. Uwe acknowledge that I/we have been advised that the making of any
misrepresentation or misstatement (whether or not intentional) in this Resident Certification of
Eligibility will constitute a material breach of my/our agreement with the Owner to lease the unit
and will entitle the Owner to prevent my/our occupancy of the unit and will be cause for immediate
termination of such lease.
7. The undersigned hereby acknowledge and agree that no less than 30 days prior to
3 the expiration of the lease agreement of each year the undersigned and any other current residents
of such apartment will complete and deliver a new Resident Certification of Eligibility,in the form
then in use,to the Owner and that the undersigned's rent is subject to increase 30 days after written
notice is given to the undersigned stating that the undersigned has surpassed the initial qualifying
income AMI or will be given 30 days' notice to vacate if the undersigned no longer qualifies as an
Eligible Resident under the ground lease with the City of Miami Beach.
8. RESIDENTS STATEMENT: UWe certify that the statements are true and
complete to the best of my/our knowledge and belief and are given under penalty of perjury. In
the event this Income Certification is executed more than five(5) days prior to the date Uwe intend
to occupy the unit, I/we hereby agree to update and recertify the accuracy of the information herein
provided as of the date Uwe first occupy the unit:
(a) Date:
(b) Date:
(c) Date:
(d) Date:
(e) Date:
(f) Date:
[The signatures of all persons over the age of 18 years listed in Number 2 above are required]
9. Calculation of Eligible Income:
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a. Enter the amount entered for entire household in 3 above: $
b. Enter any additional income derived from assets not listed above
c. TOTAL ELIGIBLE INCOME (Line a+b) $_
10. The amount entered in 9(c):
a.. Qualifies the applicant(s) as an 80% Resident(s)
b. Qualifies the applicant(s) as a 120% Resident(s)
c. Does not qualify the applicant(s) as Eligible Residents
I I. Number of apartment unit assigned:
Bedroom size: Rent: $
Tenant-paid Utilities:
Water X Electric X
Trash_X Intemet/Cable _X
12. Method used to verify applicant(s)income:
Employer income verification or 2 consecutive months of payroll recordings
Social Security Administration verification
Copies of tax returns
Other( )
Signature of Asset Manager's Authorized Representative:
Date:
(Signature)
Name:
Title: '
EXECUTION OF ITEMS 18 AND 19
IS IS NOT NECESSARY.
Initials:
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18. If this income Certification was executed by me/us more than five (5)days prior to
my/our occupancy of the unit, I/we hereby update and recertify the accuracy of the information
herein provided as of ,20 and state:
(a) No additional information is required to be provided to make this Income
Certification true and correct on the date of this certification.
(b) The following information is provided to update the information previously
provided in the Income Certification:
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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(a) Date:
(b) Date:
(c) Date:
(d) Date:
(e) Date:
(f) Date:
19. ASSET MANAGER'S STATEMENT: The family or individual(s) named in
paragraph 2 of this Income Certification have, pursuant to paragraph 18 hereof, updated and
recertified the information heretofore provided as specifically set forth in paragraph 18 hereof.
Signature of Asset Manager's Authorized
Representative
Print Name:
Title:
Date:
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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INCOME VERIFICATION
(for employed persons)
The undersigned employee has applied for a rental unit located in a project financed by an
issuance of bonds issued by The Miami Dade County Industrial Development Authority. Every
income statement of a prospective tenant must be stringently verified. Please indicate below the
employee's current annual income from wages,overtime,bonuses,commissions or any other form
of compensation received on a regular basis.
Annual Wages
Overtime
Bonuses
Commissions
Total Current Income
I hereby certify that the statements above are true and complete to the best of my
knowledge.
Signature
Title
Date
I hereby grant you permission to disclose my income to Miami Beach Ballet Apartments in order
that they may determine my income eligibility for rental of an apartment located in their project
which has been financed under the by an issuance of bonds issued by The Miami-Dade County
Industrial Development Authority.
Date:
Signature:
Please send form to:
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[INCOME VERIFICATION SIGNATURE PAGE]
INCOME VERIFICATION
(for self-employed persons)
I hereby attach copies of my individual federal and state(if applicable) income tax returns for the
immediately preceding calendar year and certify that the information shown in such income tax
returns is true and complete to the best of my knowledge.
Date:
Signature:
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Attachment B
ANNUAL RESIDENT RECERTIFICATION
THE MIAMI BEACH BALLET APARTMENTS,
ANNUAL RESIDENT RECERTIFICATION
Project name:
Apartment#:
Resident name:
TO THE RESIDENT:
This form is a continuation of the City of Miami Beach, Florida Workforce Housing Program (the
"Program') which was previously discussed with you. In order to keep you on the qualifying list,
you will need to update the following information each year when you renew your lease. The
Owner is required by the Internal Revenue Code of 1986 and ground lease with the City to
maintain this information in order to maintain the Program.
Household Composition:
1) Please list all of those individuals residing in your apartment.
2) Please list the anticipated annual income of all occupants of your household who are 18 years
of age or older(if housemaker, or unemployed, etc.—please list as such).
ANTICIPATED
ANNUAL OCCUPATION/PLACE OF
NAME SS# AGE INCOME* EMPLOYMENT
1)
2)
3)
4)
5)
6)
7)
8)
9)
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DEFINITION OF INCOME
The full amount,before any payroll deductions,of wages,salaries,overtime,commissions,
fees,tips,and bonuses;net income from the operation of a business or profession or from the rental
of real or personal property (without deducting expenditures for business expansion or
amortization of capital indebtedness or any allowance for depreciation of capital assets); interest
and dividends (including income from assets excluded below); the full amount of periodic
payments from social security, annuities, insurance policies, retirement funds, pensions, disability
or death benefits and other similar types of periodic payments including any lump sum payment
for the delayed start of a periodic payment; payments in lieu of earnings, such as unemployment
and disability compensation, workers' compensation and severance pay; all public assistance
income; periodic and determinable allowances such as alimony and child support payments, and
regular contributions or gifts received from persons not residing in the dwelling; all regular and
special pay and allowances of members of the Armed Forces(whether or not living in the dwelling)
who are the head of the family or spouse; and any earned income tax credit to the extent that it
exceeds income tax liability;
but excluding:
income from employment of children (including foster children) under the age of 18 years;
payments received for the care of foster children or foster adults (usually individuals with
disabilities, unrelated to the tenant family, who are unable to live alone); lump sum additions to
family assets, such as inheritances, insurance payments (including payments under health and
accident insurance and workers' compensation), capital gains and settlement for personal or
property losses; amounts which are specifically for reimbursement of medical expenses; amounts
of educational scholarships paid directly to the student or the educational institution,and amounts
paid to a veteran for use in meeting the costs of tuition, fees, books and equipment, but in either
case only to the extent used for such purposes; special pay to a serviceman head of a family who
is away from home and exposed to hostile fire; amounts received under training programs funded
by HUD; amounts received under Plan to Attain Self-Sufficiency; amounts for out-of-pocket
expenditures incurred in connection with other public assistance programs;resident service stipend
(not in excess of$200 per month); amounts from state or local employment training programs;
temporary, nonrecurring or sporadic income (including gifts); reparation payments paid by a
foreign government to persons who were persecuted during the Nazi era; earnings in excess of
$480 for each full-time student 18 years old or older (excluding head of family and spouse);
adoption assistance payments in excess of$480 per adopted child; deferred periodic payments of
supplemental social security income and benefits received in a lump sum; refunds or rebates of
property taxes paid on the unit; payments from state agency to allow developmentally disabled
family member to stay home; relocation payments under Title II of the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970; foster child care payments; the
value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1964 which
is in excess of the amount actually charges for the allotments; and payments to volunteers under
the Domestic Volunteer Service Act of 1973.
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PLEASE HAVE ALL OCCUPANTS OVER THE AGE OF 18 SIGN THIS
CERTIFICATION.
Uwe acknowledge that Uwe have been advised that the making of any misrepresentation or
misstatement in this declaration will constitute a material breach of my/our agreement with the
Owner to lease the unit and will entitle the Owner to prevent or terminate my/our occupancy of
the unit by institution of an action for ejection or other appropriate proceedings.
Uwe declare under penalty of perjury that the foregoing is true and correct.
SIGNATURES: DATE:
1)
2)
3)
4)
5)
6)
ASSET MANAGER'S SIGNATURE:
•
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Attachment C
CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE
, 20
To: Zions Bancorporation N.A.
7390 N Academy Boulevard
Colorado Springs, CO 80920
Attention: Vladimir Munoz
Telephone: (719) 594-7458
Email: Vladimir.Munoz@zionsbank.com
The Miami-Dade County Industrial Development Authority
Re: The Miami-Dade County Industrial Development Authority Industrial
Development Revenue Bonds (CFC—MB I, LLC- Collins Park Housing Project),
Series 2022 (the"Bonds")
Ladies and Gentlemen:
The undersigned, an authorized representative for CFC—MB I LLC organized under the
laws of the State of Arizona, authorized to and conducting business in the State of Florida, (the
"Lessee"), hereby certifies, represents and warrants that:
I. The Lessee owns CFC—MB I, LLC Collins Park Housing Project(the"Project').
2. The undersigned and the Lessee have read and are thoroughly familiar with the
provisions of the Ground Lease Agreement, dated as of , 2022 by and between the City
of Miami Beach, as Lessor, and CFC- MB I, LLC as Lessee.
3. A review of the activities of the Lessee and of the Lessee's performance under the
Ground Lease and the Loan Agreement during the quarter ended has been made under the
supervision of the undersigned.
4. The Project's Initial Occupancy Date was ,2023.
5. As of the date of this Certificate,the following percentages of completed Workforce
Housing Units in the Project are(i)occupied by Eligible Residents by particular qualifying income
levels or (ii) currently vacant and being held available for occupancy by Eligible Residents and
have been so held continuously since the date an Eligible Resident vacated such unit,as indicated:
A. Total Number of Workforce Housing Units in the Project:
B. Total Number of Workforce Housing Units Occupied:
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C. Total Number of Workforce Housing Units rented to
individuals whose income is at or below 80% of AMI: .
D. Percentage of Qualifying Tenants(line"C" divided by line`B")
E. Total Number of Workforce Housing Units rented to
individuals whose income is at or below 120%of AMI: _
F. Percentage of Qualifying Tenants(line"E"divided by line`B")
G. Continuously held vacant for occupancy % Workforce Housing Units;
Nos. by Eligible Residents since last occupied by Eligible Residents
4'.
6. To the best knowledge of the undersigned,after due inquiry,all Workforce Housing
Units were rented or available for rental on a continuous basis during the immediately preceding
year to members of the general public,and the Lessee is not now and has not been in default under
the terms of the Section 1I of the Ground Lease.
7. Unless otherwise expressly provided herein or unless the context requires
otherwise, the capitalized terms used but not defined herein shall have the meaning assigned to
such terms in the Ground Lease.
Dated: ,20 .
CFC-MB I, LLC, an Arizona limited liability
company
By: Community Finance Corporation, an Arizona
nonprofit corporation, its sole member
By:
Name: Michael S. Hammond
Its: President
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LEASE
R
Between
CFC-MB I, LLC
(Landlord)
and
CITY OF MIAMI BEACH
(Tenant)
Page 132 of 272
TABLE OF CONTENTS
LEASE 1
RECITALS 1
DEFINITIONS 1
AGREEMENTS 7
Exhibit A-1 32
Exhibit A-2
Exhibit B 28
Exhibit C 30
Exhibit D 31
Exhibit E 32
Exhibit F 34
Page 133 of 272
LEASE
THIS LEASE ("Lease") is entered into as of , 2022, by and
between CFC-MB I, LLC, an Arizona limited liability company, a wholly-owned affiliate of
Community Finance Corporation, an Arizona not for profit corporation authorized to transact
business in the State of Florida,solely in its capacity as landlord("Landlord"),and City of Miami
Beach, a Florida municipal corporation, solely in its capacity as tenant ("Tenant" and together
with Landlord, each a "Party" and collectively, the "Parties"), each of which, intending to be
legally bound,and to bind their respective successors and assigns,hereby agree upon the following
terms and conditions, including the following defined terms:
RECITALS
Landlord is the owner of the Building and has a long-term leasehold estate itt the Land(as
hereinafter defined), pursuant to that certain Ground Lease dated as of
2022, by and between the City of Miami Beach, as the fee owner of the Land, and Landlord, as
lessee therein(the"Ground Lease"). Landlord and Tenant desire to enter this Lease,subject to all
the terms and conditions set forth herein and subject to the terms of the Ground Lease.
NOW,THEREFORE,in consideration of the mutual promises and covenants set forth herein
and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:
1. Definitions.
1.1 `Building": The building ("Building") to be located at the property having an
address of 224 23rd Street, Miami Beach, Florida and legally described on Exhibit A-1 attached
hereto and incorporated herein (the"Land").
1.2 "Premises" or "Leased Premises": Those areas of that portion of the Building
located on Floor 1 of the Building consisting of approximately 2,248 square feet, identified as
"Retail" on the Ground Floor layout contained in Exhibit A-2 attached hereto and incorporated
herein.
1.3 "Initial Term": Landlord and Tenant are entering into this Lease, subject to the
subletting and use restrictions contained herein,for an initial term of five(5)Lease Years following
the Initial Commencement Date of the Lease.
(a) The Lease shall start from the Initial Commencement Date. The first Lease
Year for the Initial Term shall commence on the January lst immediately after delivery of the
Premises to the Tenant, currently anticipated to be January 1, 2024. From there forward, each
Lease Year shall begin on January I'and end December 31 st of each calendar year.
(b) The term"Initial Commencement Date"shall mean the date on which the
Premises are delivered to the Tenant for occupancy.The term"Final Expiration Date"shall mean
the last day of the Initial Term or of any subsequent renewal term under this Lease. The term of
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this Lease (the "Term") shall commence on the Initial. Commencement Date and expire on
December 31 of the fifth Lease Year; provided, however, at Tenant's sole option, to be exercised
by notice in writing to Landlord upon not less than six (6) months prior to the expiration of the
then-current Term ("Tenant's Right to Extend"), Tenant may thereafter renew for seven (7)
additional and consecutive periods of five (5) Lease Years each (collectively, the "Extended
Terms", and each, an "Extended Term") on the same terms and conditions as set forth in this
Lease (as same may be amended), except Rent payable for the Premises during each Extended
Term shall be as set forth in Section 1.5 below,but shall not be less than the final year of the prior
Term. Tenant's written notice exercising an Extended Term shall constitute sufficient evidence of
such extension without any further action by the Parties. Thereafter, as used herein, the term
"Term" shall include the Initial Term and any Extended Term, as applicable.
1.4 "Rent Payment Date": All Rent shall be abated during the first three (3) full
calendar months of the Term (e.g., if the Initial Commencement Date is January 15, 2024, Rent
shall be abated through April 14, 2024). On the Initial Commencement Date, Tenant shall prepay
the first six (6) installments of Monthly Rent in the aggregate amount of$31,317.00, which shall
be applied to the six(6)payments of Monthly Rent commencing on the first(1st)day of the fourth
(4th) full calendar month after the Initial Commencement Date and the expiration of the three-
month Rent abatement period. Thereafter, all Rent shall be due and payable in monthly
installments (i) on the first(151) day of each month during the Term, in advance, commencing on
the first day of the tenth (I oth) full calendar month after Initial Commencement Date(the"Initial
Monthly Payment Date"). Rent shall be prorated for any partial calendar month during the Term.
If the Initial Commencement Date occurs on any day other than the first day of a calendar month,
the prorated Rent due for the partial calendar month prior to the Initial Monthly Payment Date
shall be due on the Initial Monthly Payment Date and shall be paid together with the Rent for the
calendar month in which the Initial Monthly Payment Date occurs.
1.5 "Rent": The rent("Rent")payable for the Premises shall be determined as follows
(if Tenant's Right to Extend is exercised, the renewal escalations shall continue reflecting a two
percent (2%) escalation amount).
Period Annual Rent Monthly Rent
1st Partial Lease Year* $62,634 $5,219.50
(prorated, as applicable)
1st Lease Year* $62,634 $5,219.50
prorated, as applicable)
2"d Lease Year $63,886 $5,323.83
3rd Lease Year $65,164 $5,430.33
4th Lease Year $66,467 $5,538.92
5th Lease Year $67,797 $5,649.75
6`h Lease Year $69,153 $5,762.75
7th Lease Year $70,536 $5,878.00
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8th Lease Year $71,946 $5,995.50
9th Lease Year $73,385 $6,115.42
10th Lease Year $74,853 $6,237.75
* If the first year of the Tenn is a partial calendar year consisting of six (6) months or less, then
the Monthly Rent shall be the l' Partial Lease Year Monthly Rent set forth above. If the first
year of the Term is a partial year consisting of more than six (6) months, then the Monthly Rent
shall be the 1st Lease Year Monthly Rent set forth above. For illustration purposes only, (x)if the
Initial Commencement Date occurs on or after July 1,2024 and before January 1,2025,then 2024
shall constitute the 1S1 Partial Lease Year and Monthly Rent shall be the ls` Partial Lease Year
Monthly Rent set forth above and 2025 shall constitute the l'Lease Year and the Monthly Rent
shall be the 1st Lease Year Monthly Rent set forth above and (y) if the Initial Commencement
Date occurs after December 31, 2023 and on or befog"e June 30, 2024, then 2024 shall constitute
the Pt Lease Year and Monthly Rent shall be the l'Lease Year Monthly Rent set forth above and
2025 shall constitute the 2"d Lease Year and Monthly Rent shall be the 2nd Lease Year Monthly
Rent set forth above.
(a) The Rent is deemed gross rent and represents the entire amount payable
each year as set forth above for use and occupancy of the Premises (including all Common Areas
(as defined below)and Amenities(as defined below),except those Amenities, if any, for which an
additional fee shall be charged as identified on Exhibit B attached hereto and incorporated herein).
Unless otherwise directed by Landlord in writing, Rent shall be made payable to Landlord and
sent to the following address:
CFC-MB I, LLC
[TBD]
(b) In the event that any payment for Rent due to Landlord from Tenant under
this Lease is not paid within five(5)business days of the date due,then interest shall accrue on the
unpaid balance until paid at a rate equal to ten percent(10%)per annum.
1.6 "Amenities": Tenant shall have the right to use on a non-exclusive basis, the
amenities listed on Exhibit B attached hereto and incorporated herein by reference (the
"Amenities"),which Amenities shall be provided at Landlord's sole cost and expense.
1.7 "Restricted Uses" and "Ffivetenants": The Premises can only be used by the City
for uses specific to City business or it may be subleased to and/or managed by, without Landlord's
approval but with prior written notice to Landlord, not-for-profit/tax exempt entities existing and
operating under 26 U.S.C. 501(c)3, preferably with a cultural or performing arts purpose, such
subtenants or managers hereinafter referred to as "Eligible Subtenants" and individually as an
"Eligible Subtenant." Tenant understands and agrees that no part of the Premises may be
subleased by Tenant to, or managed by, third parties other than Eligible Subtenants without prior
written approval from Landlord,which approval shall not be unreasonably withheld unless the use
by such third party would contravene the restrictions against Private Use specified in Section 18.1
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below, in which case Landlord may grant or withhold such approval in its sole and absolute
discretion.
1.8 "Other Tenants": Landlord shall have theiright but not the obligation to lease at
any time to individuals or entities, other than Tenant, all other spaces and areas of the Building
which are not the Premises, which shall be individually and collectively referred to herein as the
"Other Tenants."
1.9 "Common Areas":Tenant and Eligible Subtenants shall have the right,in common
with Other Tenants in the Building, to use all common areas of the Building and the Land,
including without limitation all common bathrooms, trash rooms, electrical rooms, mechanical
rooms, lobbies,hallways (including,without limitation, service hallway in rear of Premises), each
of which shall be located on the ground floor of the Building, and all stairways, elevators, off-
street loading areas and other exterior areas and those areas provided for the Amenities together
with reasonable access thereto to and from the Premises(collectively,the"Common Areas").No
area leased exclusively to any Other Tenant shall be included in the Common Areas, and none of
the Common Areas shall be leased exclusively to any Other Tenant. Notwithstanding the
foregoing, Landlord shall have the right to temporarily close the Amenities or Common Areas if
and to the extent reasonably necessary in connection with routine maintenance and repairs;
provided that in connection with any closure of the common bathrooms, reasonable alternative
bathrooms shall be provided by Landlord. Landlord may from time to time establish reasonable
rules regarding the use of the Common Areas which shall apply equally and uniformly to Tenant
and to Other Tenants,provided however, if Landlord reasonably determines that there has been a
violation of any of such rules by any Eligible Subtenant, Landlord shall promptly deliver written
notice of such violation to Tenant, and Tenant shall take such actions as Tenant shall deem
reasonable to address the violation and encourage future compliance by the violating Eligible
Subtenant with such rules in the future.
1.10 "Services": Services that shall be provided by the Landlord, shall consist of trash
removal services, Utilities, interior and exterior window washing, and facilities maintenance,
including all exterior areas of the Building (including landscaping and irrigation), and first class
janitorial services to the Premises consistent with the level of services provided for commercial
office space, specifically limited to trash disposal from waste bins, dusting of furniture and
fixtures, vacuuming of carpeted areas, mopping or sweeping of uncarpeted areas, and monthly
window cleaning. Should the Tenant or a Subtenant require additional specialized services,Tenant
shall be responsible for any additional charges incurred for such specialized services.
1.11 "Manager": As of the Effective Date, Landlord has retained Servitas Management
Group, LLC, as asset manager to provide property management services to the Building
("Manager"). At Landlord's direction,Manager will retain other subcontractors and agents(such
as janitorial services) on behalf of Landlord to perform work and services at the Building. All
references in this Lease to "Manager" refer to Manager on behalf of and as agent for Landlord,
unless the context clearly states otherwise and includes all successors and assigns of Servitas
Management Group, LLC. As of the first date upon which Tenant is entitled to obtain possession
to any portion of the Premises, and so long as the Building is then-owned or controlled by
Landlord,Landlord's property manager shall be Manager. As of the first date upon which Tenant
is entitled to obtain possession to any portion of the Premises,Manager shall provide for reasonable
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methods for reviewing and screening of staff of Manager permitted to work within the Premises
in order to ensure the safety and security of the Eligible Subtenants. Throughout the Term,
Landlord agrees to provide reasonable prior written notice to Tenant (of at least ninety (90) days)
of any proposed change, at any time and from time to time, during the Term of the property
management service provider at the Building.
1.12 "Effective Date" means the later of(a) the date of execution and delivery of this
Lease by the Parties and (b) the date on which the City Commission has approved the execution
and delivery of this Lease by Tenant.
1.13 "City Commission"means the governing and legislative body of the City of Miami
Beach, Florida.
1.14 "Utilities"means water(including water for domestic uses and for fire protection),
sewer service, garbage collection services, or any similar service,but specifically, for purposes of
Landlord's ongoing maintenance obligations under this Lease, excludes Tenant Utilities.
1.15 "Tenant Utilities" means telephone, electricity, cable TV and intemet services to
the Premises.
2. Use.
2.1 General. The definitions above(and the terms,provisions,agreements,and exhibits
included or referenced therein) and the Recitals shall be deemed incorporated in this Lease as if
fully restated herein.Subject to the terms and conditions herein stated, Landlord hereby leases to
Tenant the Premises for the Term. On the Initial Commencement Date, Landlord shall deliver the
Premises to Tenant in good working order, condition and repair,as hereinabove provided, and the
Premises shall be in compliance with all Laws, all at Landlord's expense.
2.2 Delivery of Premises. Landlord will provide Tenant with exclusive possession of
the designated Premises in accordance with the Work Standards and Specifications for Preparation
of Premises set forth on Exhibit C attached hereto and incorporated herein as well as the Delivery
Specifications set forth on Exhibit D attached hereto and incorporated herein.
2.3 Ground Lease. Notwithstanding anything to the contrary contained herein, this
Lease shall be subject and subordinate to the terms and conditions of the Ground Lease, as the
same may be amended.
3. Assignment and Subleasing.
3.1 During the Term, Tenant shall have the right, with prior written notice to
Landlord, to sublease portions or all of the Premises only to the Eligible Subtenants (each, a
"Sublease")provided that: (a) no Sublease term shall extend beyond any Expiration Date
of this Lease; provided,however, such Sublease may provide for renewal or extension terms
which shall become effective upon any Extension Term in accordance with this Lease; and
(b)Tenant shall keep Landlord informed throughout the Term of this Lease of the identity of each
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Eligible Subtenant. If a Sublease expires or is terminated prior to the expiration of the Term,Tenant
shall have the right to sublease the affected portion(s)of the Premises to new Eligible Subtenant(s)
for the remainder of the Term. Promptly following Landlord's request, Tenant shall deliver to
Landlord a copy of Tenant's form of sublease agreement(the "Sublease Agreement") and, at
any time Tenant materially modifies its form of Sublease Agreement, Tenant shall deliver to
Landlord a copy of such modified form of Sublease Agreement. Except as otherwise expressly set
forth herein, Tenant shall not assign this Lease, in whole or in part, without Landlord's prior
written consent, which shall not be unreasonably withheld provided that the assignee's use of the
Premises will not contravene the restrictions against Private Use specified in Section 18.1.
3.2 Except as set forth in this Lease, Landlord covenants and agrees that Landlord, for
itself, and each of its agents, contractors, employees, licensees or other related parties shall not
(and shall have no right to) directly interact, notify, communicate or otherwise deal with the
Eligible Subtenants or their use and occupancy of the Premises (other than communications
relating to routine operation and maintenance of the Premises or the Building, and/or in the event
of any Emergency (as hereinafter defined) as reasonably determined by Landlord or its agents,
contractors, employees, licensees or other related parties, as applicable), it being agreed by
Landlord that any and all such communication, notification, directive or other information from
Landlord or the other parties noted above shall be communicated only to Tenant, who shall then
communicate same to Eligible Subtenants, as appropriate. As used in this Lease, "Emergency"
shall be defined as any condition at or about the Premises or the Building, as applicable, which
presents a significant and imminent risk of loss of life or harm to the health or welfare of any
persons or a significant threat to property.
4. Agreements and Obligations.
4.1 Legal Compliance of Building. Landlord hereby represents and warrants to
Tenant that at all times during the Term, the Building (including the Premises) and Landlord's
operation or maintenance of same, shall be in material compliance with all applicable certificates
of occupancy, statutes, codes, regulations, rules and other governmental and quasi-governmental
restrictions and requirements (including laws regulating Hazardous Materials and life-safety
codes)(collectively,the"Laws")in effect as of the Effective Date.Throughout the Term,Landlord
shall keep and maintain the Building at Landlord's expense in a neat, orderly, good, operable and
safe condition and repair, and in compliance with all Laws,as may be amended from time to time,
and Landlord shall provide first class janitorial services to all of the Common Areas. To the
extent that such existing Laws are amended, or new Laws are enacted after the Effective
Date, Landlord shall comply with all such amended and/or new Laws, as applicable, at
Landlord's sole cost and expense.
4.2 Building Common Areas. Landlord shall ensure that the Building Common Areas
will be available from 8:00 a.m. to 12:00 a.m. seven (7) days per week and such other times as
may be requested by Tenant and reasonably approved by Landlord during the Term by Tenant
and its Eligible Subtenants, except in the case of damage or destruction or as otherwise provided
herein. Building Common Areas are not intended to include any area or space in the Premises
which is for the exclusive use of the Tenant hereunder. Tenant shall not be responsible for any
damage to the Common Areas except to the extent caused by the negligence or misconduct of
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Tenant. As used in this Section 4.2, "damage" shall not include ordinary wear and tear, latent
defects or damage by casualty or condemnation.
4.3 Building Repairs and Maintenance. Landlord shall be responsible at
Landlord's sole cost and expense for all repair, maintenance and replacement of the Building
(including the Premises) including, without limitation, all heat, air conditioning, ventilation,
plumbing, electrical, glass, security and structural components and systems and all appliances,
fixtures and other appurtenances contained in or serving the Premises throughout the Term except
as may be damaged by an act or omission of gross negligence or willful misconduct by Tenant or
any Eligible Subtenants, in which case the actual and reasonable cost and expense of such repair,
maintenance and replacement shall be borne by Tenant. As used in this Section 4.3, "damage"
shall not include ordinary wear and tear, latent defects or damage by casualty or condemnation.
Landlord shall provide at all times during the Term, at no cost to Tenant, all Utilities in good
working order and repair. Landlord shall bear the cost of all the Utilities throughout the Term.
Tenant shall pay for Tenant Utilities throughout the Term;provided that Landlord shall deliver the
Premises with fully functioning Tenant Utilities in good working order and repair serving the
Premises.
4.4 Indemnification. Landlord shall and does hereby indemnify,protect,defend and
hold Tenant and its directors, officers, agents, contractors, employees, and invitees (but
specifically excluding Eligible Subtenants and their guests and/or invitees) (the "Tenant
Indemnified Parties") against and from any and all claims, actual damages (but specifically
excluding all special, punitive, indirect and consequential damages unless the same are actually
assessed against a Tenant Indemnified Party by a third party), liabilities, obligations, losses,
causes of action, costs and expenses (including, but not limited to,reasonable attorneys' fees
and court costs) suffered or incurred by any or all of the Tenant Indemnified Parties and arising
from or as a result of(i) any breach or default in the performance of any obligation of
Landlord to,be performed pursuant to the terms of this Lease or (ii) act or omission which
constitutes willful misconduct or negligence by Landlord or any officer, agent,employee,guest
or invitee of Landlord.
4.5 Pest Control.
(a) Landlord has implemented and shall continue to implement and maintain a
pest control plan throughout the Building to prevent and remediate any infestation of pests in
accordance with applicable Laws and at its sole cost and expense. Tenant and Eligible Subtenants
will reasonably cooperate with Landlord's pest control plan.
4.6 Initial Inspection,Return of Premises and Final Inspection.
(a) Upon taking possession of the Premises, Tenant will make commercially
reasonable efforts to conduct an inspection of the Premises andhote any defects,damage or other
conditions observed on the provided inspection report to Landlord within twenty one (21) days
following the Initial Commencement Date(the"Premises Condition Report"or"PCR"),which
upon completion and return will become part of this Lease. Tenant will request Tenant's
representative to reasonably cooperate with and facilitate the completion of this process,however
the failure of Tenant to comply with the foregoing shall not be deemed a breach or default by
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Tenant under this Lease. Landlord's acceptance and approval of the PCR will be conclusive
evidence of such existing defects, damage, and conditions. Landlord agrees to have such defects,
damage or other conditions repaired or remedied at Landlord's expense within a reasonable time
after Landlord's receipt of the PCR. In addition to the foregoing, prior to the Initial
Commencement Date (or earlier date to the extent any portion of the Premises shall be occupied
by Tenant prior to the Initial Commencement Date), Tenant shall have the right to inspect the
Premises and to report to Landlord any defects, damage or other conditions observed by Tenant
and Landlord agrees to have such defects, damage or other conditions promptly repaired or
remedied to meet the Tenant's requirements at Landlord's expense.
(b) Upon the Expiration Date of the Term, Tenant shall return the Premises to
Landlord in as good condition as Tenant received same on the Initial Commencement Date,
customary and reasonable wear and tear,latent defects,and damage by casualty and condemnation
excepted. Within ten (10) business days after the Expiration Date of the Term, Landlord and
Tenant shall jointly inspect the Premises to determine the condition of the Premises. If the Premises
have not been returned to Landlord in at least as good condition as Tenant received same,
customary and reasonable wear and tear, latent defects, Force Majeure and damage by casualty
and condemnation excepted, Landlord shall repair the Premises to the condition required herein.
In the event that the Premises (or any portion thereof)are not surrendered to Landlord on or prior
to the date required hereunder for any reason other than casualty, condemnation or Force Majeure,
the provisions set forth in Section 19.9 herein below shall apply. As used herein,"Force Majeure"
means acts of God, labor disputes(whether lawful or not),material or labor shortages,restrictions
by any Governmental Authority,civil riots,floods,hurricanes,epidemics or pandemics(including,
but not limited to,COVID-19), and any other cause not within the reasonable control of Landlord
or Tenant, as the case may be (which shall expressly exclude the satisfaction of Landlord's or
Tenant's financial obligations).
4.7 Funding Condition. In the event that Tenant does not appropriate sufficient funds
for the lease of the Premises for any Lease Year,Tenant shall have the right to terminate this Lease
upon not less than ninety (90) days' prior written notice to Landlord, which notice shall specify
the effective date of termination, and thereafter, this Lease shall be null and void and the Parties
shall have no further obligations hereunder.
5. Default.
5.1 In the event Tenant fails to make any monetary payments when due as required by
this Lease, Landlord shall promptly notify Tenant of such breach in writing and Tenant shall have
ten(10)business days after receipt of such notice to cure such monetary breach.In the event Tenant
breaches any of its non-monetary obligations hereunder, Landlord shall promptly notify Tenant of
such breach in writing and Tenant shall have twenty(20) days after receipt of such notice to cure
such non-monetary breach,provided however,that in the event such breach is not reasonably able
to be cured within said twenty (20) day cure period, such cure period shall be extended for such
time as is reasonably necessary for Tenant to effect a cure as long as Tenant is diligently and
reasonably pursuing a cure of such breach. Should Tenant fail to cure any such monetary breach
within the ten (10) business day cure period noted above (except as hereinafter provided) or cure
any non-monetary breach within the twenty(20)day cure period(as same may be extended)noted
above, Landlord shall have all rights and remedies available under the Laws of the State of Florida.
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5.2 In the event Landlord shall breach any of its obligations hereunder, Tenant shall
promptly notify Landlord of such breach in writing and, except as otherwise provided in this
Section 5.2 and/or elsewhere in this Lease, Landlord shall have thirty (30) days after receipt of
such notice to cure such breach,provided, however, that(a) if there is imminent threat to persons
or property, Landlord shall use diligent effort to immediately cure such breach and (b) if there is
no such emergent threat, in the event such breach is not reasonably able to be cured within said
thirty(30)day cure period,but such cure has been commenced and is being diligently prosecuted,
such cure period shall be extended for such time as is reasonably necessary for Landlord to effect
such cure but no event shall such extension exceed sixty(60) days. In the event Landlord fails to
cure any such breach within the cure period, Tenant shall have all rights and remedies available
under the Laws of the State of Florida.
5.3 Notwithstanding Section 5.2, if Landlord fails or neglects to maintain, repair and
replace the Building (including the Premises) or to perform any of the other obligations required
of Landlord by the terms of this Lease in accordance with the provisions set forth herein within
sixty(60)days after receipt of written notice from Tenant of the necessity therefor or in the event
Landlord fails to provide janitorial services to the Building as required by this Lease, then Tenant
may, after proper notice and a thirty(30)day period to cure by Landlord, terminate this Lease, or,
at Tenant's option with respect to any failure by Landlord to perform its obligations with respect
to the Premises, Tenant shall have the right but not the obligation to cure any such failure on
Landlord's behalf and to offset the costs of such cure, together with interest at the Interest Rate
from the date such costs are incurred by Tenant, against any payment of Rent or other amounts
due to Landlord hereunder. The foregoing remedies shall be without prejudice to any other right
or remedy available to Tenant hereunder or under applicable law.
5.4 Notwithstanding any provisions in this Lease to the contrary, except as set forth in
Section 4.4 hereof, in no event shall Landlord or Tenant(or any Eligible Subtenant) be liable for
any special, consequential, indirect, punitive, or non-economic damages arising out of this Lease
or any use and occupancy of the Premises, in whole or in part.
6. Notices. Any notices required or permitted to be given hereunder shall be given in
writing and shall be delivered and effective (a) if delivered in person, when delivered; (b) if
delivered by certified mail, postage prepaid, return receipt requested, three (3) business days
after deposit with the United States Postal Service; or(c) if delivered by a commercial overnight
courier that guarantees next day delivery and requires a written receipt, signed by the addressee,
one(1)business day after deposit. Such notices shall be addressed as follows:
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Landlord: Tenant:
CFC-MB I, LLC City Manager
333 N. Wilmont Rd. City of Miami Beach
Ste. 227 1700 Convention Center Drive
Tucson, AZ 85711 Miami Beach, FL 33139
Attention: Gary Molenda Attention: Alina T. Hudak
Telephone: 305-673-7000
Email: alinahudak@miamibeachfl.gov
citymanager@miamibeachfl.gov
With a copy to:
Servitas Management Group LLC.
5525 N. MacArthur Blvd With a copy to:
Suite 760 Irving, Texas 75038 City Attorney
City of Miami Beach
1700 Convention Center Drive
Floor 4
Miami Beach, FL 33139
Attention: Rafael Paz
Telephone: 305-673-7470 x6277
Email: rafaelpaz@miamibeachfl.gov
7. Estoppel Certificates.Tenant shall, at any time, upon not less than thirty (30) days' prior
written request by Landlord, execute, acknowledge and deliver to Landlord a statement in writing,
certifying(i)that this Lease is unmodified and in full effect (or, if there have been modifications,
that this Lease is in full effect as modified, setting forth such modifications), (ii) the dates to
which Rent payable hereunder has been paid, (iii) that no default by either Landlord (to Tenant's
knowledge) or Tenant exists hereunder or, as applicable, specifying each such default, (iv) the
remaining Term hereof, and (v) such other matters as may reasonably be requested by Landlord
or Landlord's lender.Landlord shall,at any time,upon not less than thirty(30)days' prior written
request by Tenant execute, acknowledge and deliver to Tenant a statement in writing, certifying
(i) that this Lease is unmodified and in full effect (or, if there have been modifications, that
this Lease is in full effect as modified, setting forth such modifications), (ii) the dates to
which Rent payable hereunder has been paid, (iii) that no default by either Landlord or Tenant
exists hereunder or, as applicable, specifying each such default, (iv) the remaining Term
hereof, and (v) such other matters as may reasonably be requested by Tenant. It is intended that
any such statements may be relied upon by any lender, the recipient of such statements or
their assignees or by any prospective lender, purchaser, assignee or subtenant of Landlord or
Tenant, as the case may be.
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8. Insurance.
8.1 Tenant's Insurance. At all times during the Term, Tenant shall maintain
Comprehensive General Liability ("CGL") coverage of at least:
1) $1,000,000.00 per occurrence;
2) S2,000,000.00 general aggregate;
3) $2,000,000.00 products and completed operations;
4) $1,000,000.00 aggregate for personal injury; and
5) Umbrella/Excess Liability coverage providing Combined of
Liability coverage of at least$4,000,000.00(per occurrence and in the aggregate).
8.2 All of Tenant's insurance shall name Landlord and Landlord's lenders as
Additional Insureds. The Additional Insured Endorsement for CGL coverage shall state that the
coverage provided to the Additional Insureds is primary and non-contributory with any other
insurance available to the Additional Insureds. If the Additional Insured has insurance which is
applicable to the loss, such insurance shall be excess and noncontributory. To the extent available
from the applicable insurer,Landlord shall be given notice no less than thirty(30)days in advance
of any cancellation or non-renewal thereof. All of Tenant's insurance shall be provided by
companies having a Best rating of at least A- or better. Prior to the commencement of the Term,
Tenant shall provide to Landlord certificates of insurance to evidence Tenant's compliance with
the terms of Sections 8.1 and 8.2. A renewal certificate evidencing any insurance required to be
maintained by Tenant shall be provided no fewer than ten (10) days prior to the expiration of any
policy. If Tenant elects to exercise Tenant's Right to Extend for a period of time exceeding a
cumulative period of thirty (30) years or greater, Tenant shall maintain insurance that is
commercially reasonable for similar types of tenancies in existence at such time. Notwithstanding
anything to the contrary set forth in this Lease, Tenant shall have the right to self insure any loss
in lieu of maintaining any insurance required under this Lease.
8.3 Landlord's Insurance. At all times during the Term, Landlord will maintain in full
force and effect all-risk "special perils" insurance insuring the Building for the Building's full
replacement cost(excluding the foundation) and the contents thereof for its full replacement cost
(excluding personal property of Tenant or Eligible Subtenants or Other Tenants). In addition,
Landlord shall maintain in force during the entire Term of this Lease comprehensive general
liability insurance, including, without limitation, limits of at least $1,000,000.00 per occurrence
and$2,000,000.00 general aggregate addressing bodily injury and property damage,personal and
advertising injury, and products and completed operations, contractual liability coverage as
outlined in ISO Form CG 001 or its equivalent with excess umbrella liability coverage in an
amount of not less than $5,000,000.00 per occurrence and with an annual aggregate of not less
than $5,000,000.00. Prior to the commencement of the Term, Landlord shall provide to Tenant
certificates of such insurance to evidence Landlord's compliance with the terms of this Section
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8.3. All additional insured endorsements shall require that Tenant be given no less than thirty(30)
days' notice in advance of any cancellation, non-renewal or material modification thereof. All of
Landlord's insurance shall be provided by companies having a Best rating of at least A-or better.
A renewal certificate evidencing any insurance required to be maintained by Landlord shall be
provided no later than ten(10) days prior to the expiration of the policy.]
9. Damage or Destruction.
9.1 If the Building (including the Premises) is damaged or destroyed or
rendered partially or wholly untenantable for its accustomed use by fire or other casualty (such
an event hereinafter referred to as "Damage"), the Term of this Lease shall continue but all
Rent and other charges due from Tenant to Landlord hereunder shall abate from the first(1S`) day
of such Damage until such Damage shall have been repaired by Landlord, and further provided
that if within ninety (90) days after the date of such Damage, Landlord has not repaired such
Damage, then Tenant shall have the right to terminate this Lease by delivering written notice
thereof to Landlord and an additional thirty (30) days after the expiration of such ninety (90) day
period to complete such repairs. In the event that Landlord restores the Building before Tenant
has terminated the Lease,Tenant shall accept possession of the Premises as so restored and resume
payment of Rent.
9.2 In the event that Landlord undertakes any restoration or repair of the Building
following any damage as described above, Landlord shall use commercially reasonable efforts to
repair and restore the Building to a condition substantially the same, or better, than the condition
of the Building which existed immediately prior to such damage, at Landlord's expense. In
addition, in the event of such damage, Landlord shall take immediate action as may be reasonably
necessary to secure the damaged area(s) and protect against any further damage, injury or loss.
Landlord shall not be liable for any damage to or destruction of any personal property of Tenant
or any of the Eligible Subtenants. Landlord shall keep Tenant reasonably apprised of its restoration
schedule and shall provide Tenant with prior written notice at least sixty (60) ) days prior to the
anticipated delivery to Tenant of any restored areas of the Premises.
9.3 Notwithstanding anything to the contrary set forth herein, Landlord shall be
obligated to restore all Damage to the Premises and the Building to the extent required to be
restored by Landlord,as ground lessee,pursuant to the Ground Lease.
10. Condemnation. In the event that any portion of the Building (including the Premises) is
taken by any public authority under power of eminent domain or is conveyed under threat of such
taking, at Tenant's option, the Term of this Lease shall terminate (regardless of any notice and
cure periods afforded to Landlord as set forth in this Lease) and all Rent, fees and other payments
due and payable hereunder by the Tenant shall abate from the date of such act of eminent domain
or conveyance in lieu thereof, or this Lease shall not terminate, but Rent and all other charges
payable hereunder shall abate from the date of such act of eminent domain or conveyance in lieu
thereof, pro-rata, based upon the square footage of the Premises so taken or reduced for the
remainder of the Term.
11. Quiet Enjoyment. So long as Tenant shall not be in breach of Tenant's obligations under
this Lease beyond applicable notice and cure periods,Tenant shall be entitled to peaceful and quiet
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enjoyment of the Premises, undisturbed by Landlord or any person or entity claiming possession
through or under Landlord, subject to the terms of this Lease.
12. Utilities.
12.1 Landlord shall, as part of the initial construction of the Premises, provide for two
sub-meters for the measuring of electricity for the Premises, allowing for service to separate
portions of the Premises.
12.2 Upon reasonable prior written notice to Tenant (of at least 72 hours, provided,
however,no prior notice shall be required to be given in the event of any Emergency as reasonably
determined by Landlord, but Landlord shall use reasonable efforts to promptly provide telephonic
notice as soon as practicable after undertaking any of the actions set forth in this Section 12),
Landlord shall have the right to temporarily suspend any one or more of the Utilities or other services
to the Premises (other than security services to the Building or the Premises) in order to perform
maintenance and/or repair and/or protect the Building, Premises, Tenant and/or Eligible
Subtenants from risk or harm or loss; provided however that in the event any Essential Services
(as hereinafter defined) are not fully restored by Landlord within twenty-four (24) hours of
such suspension,Rent shall abate until such time as all Essential Services (as hereinafter defined)
are fully restored.
12.3 As used in this Section 12, "Essential Services" shall be deemed to mean the
electricity, gas, heating, ventilating and air conditioning, water, sewer and elevator services (but
only in the event of a complete interruption of elevator services) servicing the Premises.
12.4 In the event of any Force Majeure event, which event temporarily suspends any
Essential Services or security services to the Premises, and which event was not caused in whole
or in part by the actions or omissions of Landlord, all Rent and other charges due from Tenant to
Landlord hereunder shall abate from the fourth (4th) date of such suspension until full restoration
of all such Essential Services or security services; and further provided that if within thirty (30)
days after the date of such suspension, Landlord has not obtained the restoration of such Essential
Services then Tenant shall have the right, notwithstanding any provision to the contrary herein
(including Section 5.2 above), to terminate this Lease by delivering written notice thereof to
Landlord prior to Landlord's completion of such restoration work.
12.5 Notwithstanding any provision herein, if any suspension or interruption of Utilities
or other services (including,without limitation, Essential Services and/or security services) arises
in whole or in part by the actions or omissions of Landlord or Landlord's property manager, all
Rent and other charges due hereunder from Tenant to Landlord with respect to the Premises so
effected shall automatically abate from the first (151) day of such suspension or interruption until
full restoration of such Utilities and/or other services, regardless of any notice and cure periods
afforded to Landlord in this Lease, and further provided that if such Utilities and services are not
fully restored to all affected portions of the Premises within five(5)days after the commencement
of such suspension or interruption, Tenant shall have the right, inter cilia, to terminate this Lease,
effective immediately, as of the first day of such suspension, regardless of any notice and cure
periods afforded to Landlord in this Lease, and all Rent and other charges shall be pro-rated as of
the effective date of such termination on the basis of portions of the Premises so affected, or, at
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Tenant's option, Tenant shall have the right but not the obligation to undertake to restore such
Utilities or other services serving the Premises and to offset the costs thereof,together with interest
at the Interest Rate from the date such costs are incurred by Tenant, against any payment of Rent
or other amounts due to Landlord hereunder.
13. Landlord's Entry. Neither Landlord nor any of Landlord's agents, contractors,
employees, licensees, invitees or other related parties shall (and none of the foregoing have any
right to) enter the Premises and/or any portion thereof(leased hereunder, or otherwise subleased
to any Eligible Subtenant under a Sublease) without prior written notice to Tenant (and where
possible, a schedule shall be provided to Tenant for entry approval). Tenant or a designated
employee or agent of Tenant must be present at all times to accompany Landlord or any of
Landlord's agents,contractors, employees,licensees, invitees or other related parties, including as
a result of an event or on-going routine maintenance or cleaning (except(i) in the event Landlord
is responding to a written request for work or repair submitted by Tenant or any Eligible Subtenant:
and in each such case of entry, Landlord (or Landlord's agent)shall leave written notice detailing
the date and nature of work or repair undertaken by Landlord(or Landlord's agent); and(ii) in the
event of an Emergency as reasonably determined by Landlord, in which case Landlord shall notify
Tenant of such entry as soon as possible by telephone with a written notice promptly delivered
thereafter to Tenant, detailing the cause and nature of such entry). Notwithstanding the foregoing,
Landlord shall not be permitted to unreasonably disturb any Eligible Subtenant's use and
enjoyment of the Premises.
14. Security. Upon receipt of a record of all Eligible Subtenants who have Tenant's
authorization to be residing in the Premises, and therefore, should be allowed access to the
Building (the"Subtenant List") from Tenant, Landlord shall be responsible for keeping such list,
as modified by Tenant from time to time. Either Landlord or Tenant may call the police, fire
department or paramedics for any situation it deems requires legal intervention or an emergency
response. Landlord shall maintain and operate the existing key card access and entry system (the
"Key Card System"), or any replacement key card system that the Landlord may from time to
time reasonably decide to adopt, for use by Tenant and the Eligible Subtenants for entrance into
the Building and the Premises. Landlord shall issue to Tenant key cards for use with the Key Card
System (the "Key Cards"); Tenant shall be responsible for issuing Key Cards directly to the
Eligible Subtenants and shall use all commercially reasonable efforts to return the Key Cards to
Landlord at such time as Tenant or an Eligible Subtenant no longer has the right to have access to
the Building as provided herein. The cost of all replacements for lost Key Cards (as opposed to
non-functioning Key Cards) shall be borne by Tenant. Landlord shall throughout the Term keep
the Key Card System in good working order and repair at Landlord's expense. To the extent
provided in this Lease, Tenant shall be responsible for the conduct of Tenant and the Eligible
Subtenants within the Premises, but Tenant shall expressly have no obligations with respect to the
safety and security of the Building, except to the extent that such security and safety are
compromised by any gross negligence or willful misconduct of Tenant. Notwithstanding anything
to the contrary set forth in this Lease, Tenant, at Tenant's option and at Tenant's sole cost and
expense, may elect to utilize its own key card access and entry system for the Premises, in which
case, Tenant shall issue a key card to Landlord for its use in connection with the exercise of
Landlord's rights and obligations under this Lease.
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•
15. Modification of the Building. Tenant and Eligible Subtenants shall not construct,
demolish, or make any modification or cause any of the foregoing to be done to any part of the
Premises (individually and collectively, "Alterations") without the prior written consent of
Landlord which consent shall not be unreasonably withheld, conditioned or delayed, including
without limitation,in connection with Landlord's review and approval of Tenant's proposed plans
and specifications therefor.
16. Mechanic's Liens. -
16.1 Tenant shall not permit mechanic's or other liens to be placed upon the Building,
the Premises or Tenant's leasehold interest in connection with any work or service performed or
purportedly performed for which Tenant shall have contracted. If a lien is so placed, Tenant shall,
within twenty (20) days of notice from Landlord ofthe filing of the lien, fully discharge the lien
by settling the claim that resulted in the lien or by bonding or insuring over the lien in the manner
prescribed by the applicable lien law unless the Building is being refinanced or sold (to any party
other than Tenant)and Landlord notifies Tenant in writing of such impending refinance or sale, in
which case, such twenty (20) day period shall be shortened to ten (10) days from the date Tenant
receives such notice from Landlord. If Tenant fails to discharge or bond or insure over the lien in
the manner prescribed by the applicable lien law within said period, then, in addition to any other
right or remedy of Landlord,Landlord may bond or insure over the lien or otherwise discharge the
lien. Tenant shall reimburse Landlord for the actual and reasonable amount paid by Landlord to
bond or insure over the lien or discharge the lien, including, without limitation, reasonable
attorneys' fees (if and to the extent permitted by law) as additional rent within thirty (30) days
after receipt of an invoice from Landlord.
16.2 In the event that Landlord consents to any construction by Tenant as provided by
Section 15 of the Lease,Tenant hereby acknowledge and agrees, and shall cause any contractor or
subcontractor of Tenant to acknowledge and agree,that to the fullest extent permitted by applicable
Laws and subject to Landlord recording a notice of no liens in the public records of the County in
which the Premises are located pursuant to Chapter 713, Florida Statutes, all mechanic's lien and
other lien rights of any contractor or subcontractor and other parties retained by or on behalf of
Tenant or such contractor or subcontractor shall be junior and subordinate to the lien(s) of all of
Landlord's lender or lenders, and to the interest of any and all subsequent purchasers of the Land
or the Building, or both. Tenant shall require all contractors and subcontractors, or other party
retained by any contractor or subcontractor to subordinate, to the fullest extent permitted by
applicable Laws, its lien rights as provided in the preceding sentence.
17. Non-liability of Landlord.Provided Landlord shall have satisfied its obligations set forth
herein, including but not limited to providing limited security to the Premises during the Term as
set forth in Section 14 above, and so long as Landlord shall not have performed or undertaken any
actions or omissions of willful misconduct or gross negligence, Landlord shall not be liable for
any damage to the property of Tenant, the Eligible Subtenants, their invitees or of others located
in the Building, nor for the loss of or damage to any property of Tenant, the Eligible Subtenants
or their invitees.All property of Tenant and the Eligible Subtenants kept or stored in the Building
shall be so kept or stored at the risk of Tenant and such Eligible Subtenants only, subject to
Landlord's obligation to provide security services for the Building and the Premises.
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18. Tax Exempt Bond Compliance.
18.1 General Private Use Limits. As of the Effective Date, and all times thereafter
during the Lease Term (including any Extended Terms) but only so long as the Leased Premises
are subject to the lien of tax-exempt bonds (the "Bonds") and only as and to the extent required
by applicable Law, Tenant shall not assign or sublease any portion of the Leased Premises to
another party other than an Eligible Subtenant without Landlord's prior written consent as further
described above. The Leased Premises have been and will be used solely for activities directly
related to the exempt purposes of Tenant and the Eligible Subtenants. Tenant does not expect to
and shall not perform any act,enter into any agreement, or use or permit any portion of the Leased
Premises, to be used in any manner by an entity other than a state or local government or a
501(c)(3) organization (but only to the extent such organization is using the Leased Premises
exclusively in activities directly related to the exempt purposes of such organization), or for any
trade or business unrelated to the exempt purposes (as defined in Section 513/a) of the Internal
Revenue Code(the"Code"))of Tenant or such Eligible Subtenant. Thus,no portion of the Leased
Premises, in the aggregate,will be used for any"Private Use"as defined in this Section 18.1. For
purposes of this Lease, "Private Use" means (a) the conduct of any activity or activities
constituting a trade or business(or group of trades or businesses)carried on by any person or entity
other than Tenant, a state or local governmental unit or a 501(c)(3) organization or (b) any
unrelated trade or business (as defined in Section 513(a) of the Code) or any business not related
to the exempt purpose of Tenant, a state or local government or a 501(c)(3) organization. Private
Use shall also include,without limitation, Management Contracts (as defined below) entered into
with,and the lease or rental of the Leased Premises or any part thereof to,third parties that are not
organizations described in Section 501(c)(3) of the Code using the Leased Premises in a manner
substantially related to their and Tenant's exempt purpose. The amount of Private Use is measured
over the remaining term of the Lease based on the portion of the total square footage of the Leased
Premises subject to the Private Use arrangement and the portion of time the Private Use takes place
as compared to the aggregate time the Leased Premises actually are used for all purposes. A lease
or rental of the Leased Premises that is not an unrelated trade or business activity is not a Private
Use if the term of such lease or rental is (i) not more than one hundred (100) days (including any
renewal options) if the compensation under the lease or other arrangement is determined, or
redetermined at the time of any renewal, at generally applicable, fair market value rates but use
pursuant to such leases is not reasonably available to natural Persons not engaged in a trade or
business, or(ii)not more than fifty(50) days(including any renewal options)if the compensation
under the lease or other arrangement is determined,or redetermined at the time of any renewal, in
a negotiated arm's length transaction and compensation under the lease is at fair market value.
18.2 Service Contracts. So long as,the Leased Premises are subject to the lien of tax-
exempt Bonds, and only as and to the exteht required by applicable Law, Tenant represents,
warrants and covenants that Tenant has not entered into,does not expect to and will not enter into
any agreement(a"Management Contract")with any Person(a"Management Company") that
provides for such Management Company to manage, operate or provide services with respect to
any portion of the Leased Premises unless such Management Contact satisfies the requirements
set forth in IRS Revenue Procedure 2017-13, as may be amended by the IRS after the date hereof
(an "Eligible Management Contract"). Such rules shall not apply to contracts for janitorial,
maintenance, machine repair, billing services, or other incidental services, so long as such
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contracts are on commercially reasonable terms. Tenant shall have the right to enter into Eligible
Management Contracts without Landlord's consent.
18.3 Sectarian Use. So long as the Leased Premises are subject to the lien of tax-exempt
Bonds and only as and to the extent required by applicable law,Tenant has not and will not permit
any portion of the Leased Premises to be used primarily for sectarian instruction or study or as a
place of devotional activities or religious worship or as a facility used primarily in connection with
any part of a program of a school or department of divinity for any religious denomination or the
training of ministers, priests,rabbis or other similar Persons in the field of religion.
18.4 Ongoing Compliance. So long as the Leased Premises are subject to the lien of tax-
exempt Bonds and only as and to the extent required by applicable law, Tenant will promptly
respond to periodic requests for information by Landlord or its agents regarding the federal tax
status of Tenant and any actual or anticipated Private Use, including providing related
documentation to Landlord or its agents. Tenant will comply with reasonable requests to make
the Leased Premises available for a site visit by the IRS in connection with any examination of the
Bonds, which Bonds will be repaid from the rent collected by Landlord, subject to any notice
requirements applicable under the Lease.
18.5 Acknowledgement of Reliance. Tenant hereby acknowledges and understands that
Landlord will and is entitled to,rely on the representations made in this Section 18 in making their
own representations with respect to the Bonds and the use of the Leased Premises, and that
Landlord's counsel with respect to the Bonds will and are entitled to, rely on the representations
made in this Section 18, in rendering their respective opinions related to the Bonds.
18.6 Conflicts. In the event of any inconsistency between the provisions of this
Section 18 and any other provisions of the Lease, the provisions of this Section 18 shall prevail.
19. Miscellaneous.
19.1 This Lease shall be construed and enforced in accordance with the laws of the State
of Florida.
19.2 The captions of this Lease are for convenience only and are not to be construed as
part of this Lease and shall not be construed as defining or limiting in any way the scope or intent
of the provisions hereof. In the event any provision of this Lease is determined to be invalid or
unenforceable, such provision shall be deemed severed from the Lease and the remainder of the
Lease shall not be affected thereby.
19.3 This Lease represents the final and entire agreement between Tenant and Landlord
and supersedes all other communications, negotiations, representations and agreements by
Landlord and Tenant. This Lease may be amended only in writing signed by both Landlord and
Tenant.
19.4 In the event of a transfer of Landlord's interest in the Premises, if and to the extent
permitted pursuant to the Ground Lease, the transferee shall take subject to Tenant's interests in
this Lease and Tenant shall attorn to and recognize the transferee as Landlord under this Lease for
the balance of the Term provided such transferee shall assume Landlord's obligations hereunder
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and recognize Tenant's rights hereunder, and thereafter, this Lease shall continue as a direct lease
between Tenant and such transferee.All of the covenants,agreements,conditions and undertakings
contained in this Lease shall extend and inure to and be binding upon the parties hereto and their
permitted successors and assigns.
19.5 This Lease may be signed in separate counterparts, all of which, when signed and
delivered, shall constitute the same document. Subject to Section 19.17 below, a party's signature
on this Lease transmitted by that party by facsimile copy (including without limitation, via email
transmission)shall be binding on such party.
19.6 To the maximum extent permitted by law, Landlord and Tenant agree that all
actions or proceedings arising in connection with this Lease shall be tried and determined only in
the State and Federal courts located in the County of Miami-Dade, State of Florida. To the
maximum extent permitted by law Landlord and Tenant hereby expressly waive any right it may
have to assert the doctrine of forum non conveniens or to object to venue to the extent any
proceeding is brought in accordance with this Section 19.6.
19.7 TO THE MAXIMUM EXTENT PERMITTED BY LAW, LANDLORD AND
TENANT HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY
ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING ARISING UNDER
OR WITH RESPECT TO THIS LEASE AND/OR THE PREMISES, OR IN ANY
WAY CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE DEALINGS
OF LANDLORD AND TENANT WITH RESPECT TO THIS LEASE, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, LANDLORD AND TENANT HEREBY AGREE THAT ANY SUCH
ACTION, CAUSE OF ACTION, CLAIM, DEMAND OR PROCEEDING SHALL BE
DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT LANDLORD AND
TENANT,OR BOTH,MAY FILE A COPY OF THIS LEASE WITH ANY COURT OR OTHER
TRIBUNAL AS WRITTEN EVIDENCE OF THE CONSENT OF LANDLORD AND
TENANT TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
19.8 Landlord and Tenant represent and warrant to the other that neither of them has had
any dealings with any broker or agent in connection with the transactions contemplated hereby.
Landlord and Tenant covenant to pay,hold harmless and indemnify the other from and against any
and all costs,expenses or liability for any compensation,commissions and charges claimed by any
broker or agent, with respect to the transactions contemplated hereby or the negotiation thereof
and arising by virtue of the acts of the indemnifying party.
19.9 In the event that Tenant or any Eligible Subtenant or any licensee, user or other
occupant claiming possession by or through Tenant or any Eligible Subtenant remains in
possession or occupancy for a period of more than two(2)business days after the date the Premises
(or any portion thereof) are to be surrendered to Landlord as required hereunder, such continued
occupancy or possession shall not be deemed a holdover by Tenant with respect to the entire
Premises leased herein, but shall be deemed a tenancy at sufferance on the same terms and
conditions, but in lieu of Rent otherwise due and payable in the amount set forth herein, Tenant
shall pay Rent on a per diem basis (using a thirty (30) day month) for the Premises, calculated
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using a monthly rate equal to 150% of the then-current Monthly Rent. For avoidance of doubt,
the parties further agree that during any such tenancy created by the provisions of this Section
19.9, Rent will be due and payable on the entire Premises notwithstanding the fact that such
continued occupancy or possession affects less than all of the Premises. Notwithstanding the
foregoing, in no event shall Tenant be liable for any consequential, punitive, indirect, special or
non-economic damages as a result of any such holdover at the Premises, and the increased Rent
amounts set forth in this Section 19.9 shall be deemed liquidated damages for Landlord, and
Landlord's sole remedy in lieu of all others.
19.10 Landlord represents and warrants to Tenant that, as of the date Tenant is entitled to
obtain possession of any portion of the Premises, and thereafter, throughout the Term, any
"Hazardous Material" (as defined below) located in the Building and not caused by any act or
omission of Tenant or any officer, agent, employee, guest or invitee of Tenant shall be managed
in accordance with all applicable Laws. Landlord and Tenant agree that neither party shall
transport, use, store, maintain, generate, manufacture, handle, dispose, release or discharge any
Hazardous Material upon or about the Building, or permit any employees, agents, contractors,
invitees of Tenant, or other Eligible Subtenants of the Premises, to engage in such activities upon
or about the Building, except in accordance with applicable Laws. The term "Hazardous
Material" for purposes hereof shall mean any chemical, substance, material or waste or
component thereof which is now or hereafter listed, defined or regulated as a hazardous or toxic
chemical, substance, material or waste or component thereof by any federal, state or local
governing or regulatory body having jurisdiction, or which would trigger any employee or
community "right-to-know" requirements adopted by any such body. Notwithstanding the
foregoing, the parties agree that the use of customary consumer cleaning products, and computer
and office supplies by Landlord, Tenant or any Eligible Subtenant in non-reportable quantities
shall not be deemed "Hazardous Materials" for the purposes of this Section 19.10. Landlord
represents and warrants that to its actual knowledge,there are no Hazardous Materials at, in,about
or under the Building in violation of applicable Laws.
19.11 The failure of Landlord or Tenant to insist on strict compliance with any terms
hereof or to exercise any right or remedy shall not waive such terms or rights or remedies.
Waiver of any agreement regarding any breach by Landlord or Tenant shall not affect any
subsequent or other breach by such party unless so stated. No waiver by Landlord or Tenant of
any violation or provision of this Lease shall be effective unless expressed in writing and signed
by the party so waiving such violation or provision.
19.12 In the event of the sale or other transfer of Landlord's right,title and interest in this
Lease, the Premises, or the Building (except in the case of a sale-leaseback financing transaction
in which Landlord is the lessee), upon the express written assumption of this Lease by the
transferee, Landlord shall be released from all liability and obligations hereunder derived from this
Lease arising out of any act,occurrence or omission relating to the Premises or this Lease occurring
after the consummation of such sale or transfer. Tenant shall have no right to terminate this Lease
or to abate Rent nor to deduct from, nor setoff, nor counterclaim against Rent solely because of
any sale or transfer (including, without limitation, any sale-leaseback) by Landlord or its
successors or assigns.
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19.13 Any obligations of Landlord and Tenant accruing prior to the expiration of Term
of this Lease shall survive the expiration or earlier termination of the Lease, and Landlord and
Tenant shall promptly perform all such obligations whether or not any Terms of this Lease shall
have expired or this Lease has been terminated.
19.14 Nothing contained in this Lease shall be deemed or construed by the parties to this
Lease, or by any third party, to create the relationship of principal and agent, partnership,joint
venture,or any association between Landlord and Tenant,it being expressly understood and agreed
that neither the method of computation of rent nor any other provisions contained in this Lease nor
any acts of the parties to this Lease shall be deemed to create any relationship between Landlord
and Tenant other than the relationship of landlord and tenant.
•
19.15 Landlord and Tenant have jointly participated in the drafting of this Lease.
Accordingly, this Lease shall be construed neither for nor against Landlord or Tenant
notwithstanding the party which drafted same, but shall be given a fair and reasonable
interpretation in accordance with the meaning of its terms and the intent of the parties.
19.16 Except as expressly provided herein,each covenant, agreement,obligation or other
provision of this Lease to be performed by Landlord or Tenant (including, but not limited to,
Tenant's obligation to pay Rent) is a separate and independent covenant of such party, and is not
dependent on any other provision of this Lease.
19.17 Tenant represents and warrants as of the Effective Date that this Lease has been
duly authorized, executed and delivered by and on behalf of Tenant and constitutes the valid and
binding agreement of Tenant in accordance with its terms. Landlord represents and warrants that
this Lease has been duly authorized, executed and delivered by and on behalf of Landlord and
constitutes the valid and binding agreement of Landlord in accordance with its terms, and that no
third party consents to the terms and conditions of this Lease are required to be obtained by
Landlord prior to the validity, effectiveness or enforceability of this Lease(or if such consents are
required, Landlord has obtained all of same, without reservation or condition). Notwithstanding
anything to the contrary set forth herein, the Parties acknowledge and agree that this Lease shall
not be binding upon Tenant and the Effective Date shall not be deemed to have occurred until the
City Commission has approved the execution and delivery of this Lease by the Tenant.
19.18 As used herein, the term"business day"shall mean any day other than a Saturday,
Sunday, any federal or State of Florida authorized holiday.
19.19 Landlord represents and warrants to Tenant that as of the Effective Date:
(a) The execution and delivery of this Lease is not in violation of any law,
ordinance, agreement, provision or encumbrance to which Landlord, the Premises, the Building,
the Land or the Common Areas is or may be subject.
(b) Upon completion, the Land and the Building will be and will remain'in
compliance with all Laws (including Laws relating to the Hazardous Materials). Landlord has not
received any notice of non-compliance by the Land for its intended use as dormitories, related
facilities and/or residential facilities and, with respect to the Premises, for governmental,
performing arts and/or cultural purposes.
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(c) Landlord agrees that if it is determined that the ownership of the Building
must be held in separate condominium units in order to obtain various tax benefits including,
without limitation, exemption from ad valorem taxation for the Premises, Landlord shall create
such a condominium regime and Tenant shall reasonably cooperate in that regard at no cost or
expense to Tenant.
(d) The only party holding a mortgage,deed of trust or other voluntarily granted
lien instrument which encumbers Landlord's ground leasehold interest in the Building (or any
portion thereof) is Miami-Dade County Industrial Development Authority, and its successors or
assigns("Lender"), and Landlord has received no written notification as of the Effective Date that
Lender has assigned or sold its interest in such mortgage,deed of trust or lien instrument(in whole
or in part) to any other person or entity or that Landlord is in breach or default under any such
mortgage, deed of trust or lien instrument. Further, Landlord is not in breach or default of, and is
not aware of any matter, fact, event or condition which, with the giving of notice or passage of
time (or both) would be a breach or default under, any such mortgage, deed of trust or lien
instrument.
19.20 Notwithstanding any provision herein to the contrary, if any, Tenant shall
not be liable for any damage to the Premises or other portions of the Building caused by Other
Tenants or persons in the Building(other than the Eligible Subtenants but only as and to the extent
expressly set forth in this Lease, as applicable),tenants of adjacent property or the Building,or the
public, or cause by operations in construction of any private,public or quasi-public work.
19.21 In the event of a judicial or administrative proceeding or action by one party against
the other party with respect to the interpretation or enforcement of this Lease,the prevailing party
shall be entitled to recover its reasonable costs and expenses, including reasonable attorneys' fees
and expenses,whether at the investigative,pre-trial,trial or appellate level from the non-prevailing
party. The prevailing party shall be determined by the court based upon an assessment of which
patty's major argument or positions prevailed.
19.22 As used in this Lease,the words"abate", "reduce"and words of similar import and
construction which modify Tenant's obligations to pay Rent (and any other charges, costs,and
expenses due Landlord,if any)shall be interpreted as if followed by the words"without recapture"
in each instance.
19.23 All transactions with respect to the Eligible Subtenants' use and occupancy of the
Premises shall be between Tenant and the Eligible Subtenants.
19.24 The descriptive headings of the paragraphs of this Lease are inserted for
convenience only and shall not control or affect the meaning or construction of any provisions of
this lease. Words such as "herein", "hereinafter", "hereunder" when used in reference to this
Lease, refer to this Lease as a whole (including the Exhibits to this Lease) and not merely to a
subdivision in which such words,unless the context otherwise requires. The singular shall include
the plural and the masculine gender shall include the feminine and neuter, and vice versa, unless
the context otherwise requires. The word "including" shall not be restrictive and shall be
interpreted as if followed by the words"without limitation".
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19.25 To the extent permitted by applicable Law, the terms, conditions, covenants and
obligations set forth in this Lease(including,without limitation,the amount of Rent payable)shall
be kept confidential and shall not be disclosed by any party without the prior written consent of
the other party (which consent shall not be unreasonably withheld or delayed) except to those
officers, partners, employees, directors, attorneys, accountants, financial advisers, investors,
lenders or regulatory authorities who reasonably and legitimately need to know such information
for the purpose of assisting such party in connection with the leasing arrangements contemplated
herein, or except as may be required by judicial order or in order to comply with applicable Laws;
provided however that each party shall give the other party at least seven (7) business days prior
written notice of any intended or proposed disclosure of such confidential information as permitted
aforesaid.
19.26 Notwithstanding anything to the contrary set forth herein, nothing herein shall
preclude the Tenant's City Manager from seeking direction from or electing to have the City
Commission determine any matter arising out of or related to this Lease, including any approval
contemplated under this Lease (within the timeframe specified therefor as if the approval was
being determined by the City Manager), any proposed amendment or modification to this Lease
or any separate agreement relating to the Premises or otherwise referenced in this Lease.
[REMAINDER OF PAGE INTENTIONALLY BLANK;
SIGNATURES FOLLOW ON IMMEDIATELY SUCCEEDING PAGE]
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IN WITNESS WHEREOF, Landlord and Tenant have entered into this Lease as of the
Effective Date.
LANDLORD: TENANT:
CFC-MB I,LLC,an Arizona limited liability CITY OF MIAMI BEACH,FLORIDA, a
company Florida municipal corporation
By: COMMUNITY FINANCE
CORPORATION,an Arizona nonprofit By:
corporation, its sole member
Name:
Its:
By:
Name: Michael S. Hammond
Its:
ATTEST:
By:
City Clerk
Approved for form and legal sufficiency:
By:
City Attorney
23
Page 156 of 272
Exhibit A-I
Legal Description of the Land
Lots 7, 9 and 11, less the northern 10 feet for right-of-way, and the northern 25 feet of Lots
10 and 12, Block 2, Amended Map of THE OCEAN FRONT PROPERTY OF THE
MIAMI BEACH IMPROVEMENT COMPANY, as recorded in Plat Book 5 at Page 7, of
the Public Records.of Miami-Dade County,Florida.
Common Address: 224 23rd St.
Miami Beach, FL 33139-1714
Parcel: 02-3226-001-0460
Page 157 of 272
•
Exhibit A-2
The Premises
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Building Area Legend II ^�1. L. J kl r
RETAIL
▪CIRCULATION z,xesF
❑GYM 0.t 0 0 0 li p '
❑LOBBY I i
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RETAIL
❑STORAGE 2434'
2.
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GROUND FLOOR r•me
Page 158 of 272
Exhibit B
List of Amenities
Landlord at its expense will provide and keep in good working order, repair and condition
the following amenities (the "Amenities") for the exclusive or non-exclusive use of Tenant, and
its Subtenants, as applicable, with no additional cost to the Tenant except as noted herein:
1. Storage areas (which shall be under exclusive control of Tenant during such use), subject
to availability; and
2. Lockers for storage of delivery packages for 72 hours or less.
•
•
Page 159 of 272
Exhibit C
Work Standards and Specifications for Preparation of Premises
Landlord shall deliver the Premises to Tenant upon the Initial Commencement Date, in the
following conditions, ordinary wear and tear excepted:
• The entire Premises including Common Areas will be cleaned to professional standards.
• All Utilities and Tenant Utilities will be fully functioning as agreed in this Lease.
• Walls and flooring will be in new condition.
• All Amenities (as stated in Exhibit B) will be clean and functional and otherwise in the
condition required by this Lease.
Page 160 of 272
Exhibit D
Delivery Specifications
The Premises shall be delivered to Tenant by Landlord with the following specifications, together
with such modifications and additions requested by Tenant and reasonably approved by Landlord
in connection with the proposed use of the Premises:
1. All required structural elements, including columns, girders,beams, and joists.
2. Masonry or concrete exterior walls.
3. Floor: Concrete slab.
4. Egress Door: Egress will be provided per City Code requirements.
{
5. Electrical Service: Landlord shall provide two (2) empty conduits for electrical
service; Landlord to coordinate with Tenant or its subtenant(s) to confirm the size
of the panel. Distribution within the Premises to be by Tenant. Electrical panel by
Tenant.
6. Telephone: Landlord shall provide one(1) empty conduit from point of service to a
location within the tenant space.
7. Water: Landlord will bring domestic water and sanitary sewer lines to the tenantspace.
8. Storefront:. Landlord shall provide code-compliant storefront system (including
windows).
9. Heating, Ventilation and Air Conditioning: Landlord will provide a supply and
return line from the base building system stubbed into the tenant space and valved
off. Tenant will be required to provide its own A/C system.
10. Sprinkler System: Landlord to provide code-compliant sprinkler system for
original baseline shell design. Tenant will provide code-compliant sprinkler
system for finished space.
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