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HomeMy WebLinkAbout2004-25483 Reso RESOLUTION NO: 2004-25483 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING AN AMENDMENT TO THAT CERTAIN LEASE AGREEMENT BETWEEN THE CITY OF MIAMI BEACH (TENANT) AND GLORIA MILLER-ROSENTHAL (LANDLORD), IN THE MONTHLY AMOUNT OF $10,500, FOR THE PROPERTY LOCATED AT 1833 BAY ROAD, MIAMI BEACH, FLORIDA, THAT IS BEING USED FOR CERTAIN POLICE DEPARTMENT OPERATIONS AND FOR THE PARKING DEPARTMENT SIGN DIVISION, INCLUDING EXTENDING THE TERM OF SAID AGREEMENT, ON A MONTH-TO-MONTH BASIS, DURING WHICH TIME DEVELOPMENT OF ALTERNATE FACILITIES TO RELOCATE THE RESPECTIVE POLICE AND PARKING DEPARTMENT OPERATIONS ARE BEING COMPLETED; AND FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE SAID AMENDMENT TO LEASE AGREEMENT WHEREAS, on January 31, 2001, the Mayor and City Commission adopted Resolution No.2001-24250 approving a Lease Agreement between the City of Miami Beach (Tenant) and Gloria Mil~er-Rosenthal (Landlord) for the use of the property located at 1833 Bay Road, Miami Beach, Florida (the Property) to house certain Police Department Operations and the Parking Department's Sign Division; and WHEREAS, the lease has a term of three years, commencing on February 1,2001, and expiring at midnight on January 31,2004; and WHEREAS, in accordance with the direction received at the Finance and Citywide Projects Committee meeting of November 20, 2003, Police Department operations housed at the Property will be relocated to the first floor, north wing, of Historic City Hall and the Administration is seeking to relocate the Parking Department Sign Division to an alternate City-owned facility; and WHEREAS, improvements to the Historic City Hall site are estimated to be completed by March 2004, which extends beyond the termination date of the Lease Agreement; and WHEREAS, in light of the foregoing, the City Administration has been negotiating with the Landlord to extend the term of the lease on a month-to-month basis to allow for the respective build-outs to be completed and relocation to occur; and WHEREAS, an agreement has been reached between the Landlord and the City whereby the City would, effective February 1,2004, continue to lease the Property on a month-to-month basis. A true copy of the Amendment to Lease Agreement being attached and made a part hereof; NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission herein approve the attached Amendment to that certain Lease Agreement between the City of Miami Beach and Gloria Miller-Rosenthal, in the monthly amount of $10,500, for the property located at 1833 Bay Road, Miami Beach, Florida, that is being used for certain Police Department operations and for the Parking Department Sign Division, including extending the term of said Agreement, on a month-to-month basis, during which time development of alternate facilities to relocate the respective Police and Parking Department operations are being completed; and further authorizing the Mayor and City Clerk to execute said Amendment to Lease A.~ reement. /"l×t PASSED AND ADOPTED THIS 4th day of Febr~ irytl CITY CLERK | OR JD:rd T:'~AG ENDA~004\FEB0404\CONSEN'r'~1833BAY. R ES.DOC APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION City Attorney Date CI'IY OF MIAMI BEACH COIVMISSlON ITEM SUMMARY Condensed Title: A Resolution approving an Amendment to that certain Lease Agreement between the City of Miami Beach (Tenant) and Gloria Miller-Rosenthal (Landlord), in the monthly amount of$10,500, for the property located at 1833 Bay Road, Miami Beach, Florida, that is being used for certain Police Department Operations and for the Parking Department Sign Division, including extending the term of said Agreement, on a month-to- month basis, during which time development of alternate facilities to relocate the respective Police and Parking Department Operations are being completed; and further authorizing the Mayor and City Clerk to execute said Amendment to Lease Agreement Issue: Shall the City Commission approve the Amendment to the Lease Agreement? Item Summary/Recommendation: The Administration has been negotiating with the Landlord, an agreement has been reached, and the City would, effective February 1, 2004, continue to lease the Property on a month-to-month basis on the following terms and conditions: · The Leased Premises, contains 6,464 square feet divided equally between the first and second floors, together with the surrounding land and parking areas. The City agrees to pay the Landlord, the sum of $10,500 per month. · The City and/or Landlord may terminate or discontinue the use of the first floor space or the second floor space or may terminate the entire month-to-month tenancy upon giving the other party sixty (60) days prior written notice of its intentions. In the event that either party terminates the use of one of the two floors of the Leased Premises, the monthly rental shall be reduced accordingly to $5,250 per month. In addition thereto, if only one floor is being leased, the City shall be entitled to use only one-half of the surrounding land and parking spaces. The Administration deems that the negotiated rate is below that of current market value, the proposed amendment extending the Lease Agreement on a month-to-month basis would provide the City an opportunity to complete improvements at the alternate City-owned facilities and relocate the Police Department operations and the Parking Department's Sign Division, and recommends approval of same. OPTION: City also retains the rights to purchase the property for $986,000 for a six month period, landlord retains the right to market the Property during said time with the City reserving the right to match any viable offer made to Landlord. Advisory Board Recommendation: I N/A Financial Information: Source of Amount Account Approved Funds: I $63,000 Parking Department (12 months) 2 $15,750 Police Department (3 months) 3 4 Finance Dept. Total $78,750 City Clerk's Office Legislative Tracking: I Christina Cuervo/Joe Damien Sign-Offs: Department Director Assistant City Manager City Manager T:~AG ENDA~004\Feb0404~Consent\1833BAY SUM.doc A E.DA,TEM DATE CITY OF MIAMI BEACH CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139 www.miamibeachfl.gov COMMISSION MEMORANDUM To: From: Subject: Mayor David Dermer and Date: February 4, 2004 Members of the City Commission CityJorge M. Gonzalez Manager A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING AN AMENDMENT TO THAT CERTAIN LEASE AGREEMENT BETWEEN THE CITY OF MIAMI BEACH (TENANT) AND GLORIA MILLER-ROSENTHAL (LANDLORD), IN THE MONTHLY AMOUNT OF $10,500, FOR THE PROPERTY LOCATED AT 1833 BAY ROAD, MIAMI BEACH, FLORIDA, THAT IS BEING USED FOR CERTAIN POLICE DEPARTMENT OPERATIONS AND FOR THE PARKING DEPARTMENT SIGN DIVISION, INCLUDING EXTENDING THE TERM OF SAID AGREEMENT, ON A MONTH-TO-MONTH BASIS, DURING WHICH TIME DEVELOPMENT OF ALTERNATE FACILITIES TO RELOCATE THE RESPECTIVE POLICE AND PARKING DEPARTMENT OPERATIONS ARE BEING COMPLETED; AND FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE SAID AMENDMENT TO LEASE AGREEMENT ADMINISTRATION RECOMMENDATION: Adopt the Resolution. ANALYSIS On January 31,2001, the Mayor and City Commission adopted Resolution No.2001-24250 approving a Lease Agreement between the City of Miami Beach (Tenant) and Gloria Miller- Rosenthal (Landlord) for continuing the use of the property located at 1833 Bay Road, Miami Beach, Florida (the Property). The leased Property, includes the first floor (approximately 3232 square feet) currently housing the City's Parking Department Sign Division, the second floor (approximately 3232 square feet) which have been used to accommodate certain Police Department operations, and the use of the rear yard (approximately 4,000+ square feet). The lease has a term of three years, commencing on February 1, 2001, and expiring at midnight on January 31, 2004, subject to funding availability, and contains a provision which allows the City to terminate the lease with a ninety (90) day notice if funding for the lease of the Property is no longer available. In accordance with the direction received at the Finance and Citywide Projects Committee meeting of November 20, 2003, Police Department operations housed at the Property will be relocated to the first floor, north wing, of Historic City Hall. The ultimate relocation of the Parking Department Sign Division has not yet been determined but can remain on site at a proportionate rate. It is estimated that improvements to the Historic City Hall site will be completed by March 2004, which will extend beyond the termination date of the current Lease Agreement. In light of the foregoing, the City Administration has been negotiating with the Landlord. An Agreement has been reached, and the City would, effective February 1,2004, continue to lease the Property on a month-to-month basis on the following terms and conditions: The City and Landlord acknowledge that the Leased Premises, which contains two floors, contains 6,464 square feet divided equally between the first and second floors, together with the surrounding land and parking areas. The City agrees to pay the Landlord, as compensation for use of the Leased Premises, the sum of Ten Thousand ($10,000) Dollars per month, plus Five Hundred ($500) Dollars per month which represents the increase in real property taxes and insurance (as reported by Landlord) for the years 2001 through 2003. The City and/or Landlord may, at their sole discretion, without cause, terminate or discontinue the use of the first floor space or the second floor space or may terminate the entire month-to-month tenancy upon giving the other party sixty (60) days prior written notice of its intentions. In the event that either party chooses to terminate the use of one of the two floors of the Leased Premises, then, in that event, the monthly rental shall be reduced accordingly to Five Thousand ($5,000) Dollars per month, plus Two Hundred Fifty ($250) Dollars per month for real property taxes and insurance. In addition thereto, if only one floor is being leased, the City shall be entitled to use only one-half of the surrounding land and parking spaces. Option to Purchase Due to the following conditions, the Administration deemed that it may be in the City's best interest to further consider the possibility of purchasing the property, an option already included in the current lease agreement: The Property is located adjacent to two (2) City-owned municipal parking lots, and combined with same may provide the City with enhanced opportunity to develop the site, either on its own or via a public/private venture. In the past the City has invested approximately $ 75,000 in improvements and upgrades to the property and the City has the opportunity to continue to take advantage of the improvements previously made. · There are certain accessibility upgrades that would be required if the City did purchase the building. As such, the City also negotiated an extended and more specific option to purchase which includes: The City reserving the right to purchase the property, for $986,000; the amount equal to the average between the Landlord's asking price of $1,050,000 and the appraised value (see attached appraisal) of $922,000 o within the next six (6) months; or o until such time as the City notifies Landlord in writing of its intention not to purchase; or until such time as the Landlord enters into a binding Purchase and Sale Contract for the sale of the Property with a pre-approved and qualified third party, with the City reserving the right to match the amount of said offer and purchase the Property, whichever occurs first. in the event the Landlord enters into a binding Purchase and Sale Contract for the sale of the Property with a pre-approved and qualified third party, and the City does not exercise its right to purchase the Property at that time and the Purchase and Sale is not consummated with said third party, the City's rights to purchase the Property shall continue as provided above. Except as herein modified, all terms and conditions of the original Lease, dated January 31, 2001, shall remain in full force and effect. In conclusion, the increased rental rate of $ 19.49 per square foot, as offered by the Landlord was reportedly due to increases in Ad Valorem Property Taxes and property insurance. However, the rate is still considered to be under that of the current market rate for similar space, which was determined to range from approximately $22.00 to $24.00 per square foot. Although the newly proposed rate of $19.49 per square foot is higher than that of the $16 per square foot rate (which was negotiated as the median of $15, $16, $17 per square foot for the prior 3 year term) provided in the current Lease, a review of the matter revealed the following: The City will continue to be provided the use of approximately 4,000 square feet of rear yard at no cost The City's ability to discontinue use on a "per floor basis", and reduce the rent proportionately, since the rental can be apportioned per floor Based on the above, the Administration deems that the aforementioned rate of $19.49 per square foot, which equates to ($10,500 per month) to be reasonable for the month-to- month extension. The City will not be responsible for any other lease related costs to the Landlord, including any costs for additional increases in Property Taxes. Funding to cover the proposed Lease payments will be made available in both the Police Department and Parking Department Fiscal Year 2003~2004 budgets. As stated above, the proposed Lease Agreement provides that the City may terminate the lease, with a sixty (60) day prior written notice. In light of the foregoing, the Administration deems that the negotiated rate is below that of current market value, the proposed amendment extending the Lease Agreement on a month-to-month basis would provide the City an opportunity to complete improvements at the alternate City-owned facilities and relocate the Police Department operations and the Parking Department's Sign Division, and recommends approval of same. JMG:CMC:JD:rlr T:~AGENDA~004\FEBO404\CONSENT~1833BAY MEM.DOC AMENDMENT TO LEASE AGREEMENT This Amendment to the Lease Agreement, dated January 31, 2001, for the use of the property located at 1833 Bay Road, Miami Beach, Florida (Property) by and between the City of Miami Beach (Tenant) and Gloria Miller-Rosenthal (Landlord) is entered into this 4th day of February, 2004. WITNESSETH WHEREAS, on January 31,2001, Gloria Miller-Rosenthal (Landlord) and the City of Miami Beach (Tenant) entered into a Lease Agreement for the use of the property located at 1833 Bay Road, Miami Beach, Florida (the Property) to house certain City of Miami Beach Police Department Operations and the Parking Department Sign Division; and WHEREAS, the Lease Agreement has a term of three years, commencing on February 1,2001, and expiring at midnight on January 31, 2004; and WHEREAS, the City as Tenant is desirous of remaining on the Property, on a month-to-month basis, until such time as improvements to alternate City-owned facilities are completed to relocate its respective operations; and WHEREAS, it is estimated that said improvements and relocation schedule extend beyond the termination date of the Lease Agreement; and WHEREAS, in light of the foregoing, the Landlord and Tenant have mutually agreed to extend the term of the lease on a month-to-month basis to allow for the aforementioned improvements to be completed and allow adequate time for Tenant to relocate its respective operations, in accordance with the terms and conditions outlined herein. NOW, THEREFORE, the Lease Agreement is hereby amended as follows: The Tenant agrees that it will continue its lease effective February 1,2004, on a month-to- month basis subject to the following terms and conditions: 1) 2) 3) 4) The Tenant and Landlord acknowledge that the Leased Premises, which contains two floors, contains 6,464 square feet divided equally between the first and second floors, together with the surrounding land and parking areas. The Tenant agrees to pay the Landlord, as compensation for use of the Leased Premises, the sum of Ten Thousand ($10,000) Dollars per month, plus Five Hundred ($500) Dollars per month which represents the increase in real property taxes and insurance (as reported by Landlord) for the years 2001 through 2003. The Tenant and/or Landlord may, at their sole discretion, without cause, terminate or discontinue the use of the first floor space or the second floor space or may terminate the entire month-to-month tenancy upon giving the other party sixty (60) days prior written notice of its intentions. In the event that either party chooses to terminate one of the two floors of the Leased Premises, then, in that event, the monthly rental shall be reduced Page I accordingly to Five Thousand ($5,000) Dollars per month, plus Two Hundred Fifty ($250) Dollars per month for real property taxes and insurance. In addition thereto, if only one floor is being leased, the Tenant shall be entitled to use only one-half of the surrounding land and parking spaces. 5) Subject to the provisions of Paragraph 6, the Tenant is granted the right to purchase the Property, for $986,000, 1 ) within the next six (6) months; or 2) until such time as the Tenant notifies Landlord in writing of its intention not to purchase, whichever occurs first. 6) In the event the Landlord enters into a binding Purchase and Sale Contract for the sale of the Property with a pre-approved and qualified third party within the above option period, the Tenant is granted the right to match the amount proposed in such binding Contract and terms and conditions thereof and purchase the Property for such price and under such terms and conditions. If the Tenant does not exercise its right to purchase the Property at that time and the Purchase and Sale is not consummated with said third party, the Tenant's rights to purchase the Property shall continue as provided in 5.1 and 5.2 above. 7) Upon the Tenant's vacation of the Property, whether it vacates one floor at a time or both simultaneously, each floor will be redelivered to Landlord in the same condition same were leased, ordinary wear and tear excepted. 8) Unless specifically amended herein, all other terms and conditions of the Lease Agreement, dated January 31,2001, between the Landlord and Tenant shall remain in full force and effect. In the event there is a conflict between the provisions provided herein and the Lease Agreement, the provisions of this Amendment to the Lease Agreement shall govern. IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to the Lease Agreement to be executed by their duly authorized officials on the day first above ATTEST:indicated'CITY CLERK C~ ~)~B/IEACH'MAYOR FLORIDA WITNESS JMG:CMC:JD:rd T:~G EN DA~Pe~{~l~J BAYAM DAG R. Revised .doc FORM & LANGUAGE & FOR EXECUTION Page 2 GLORIA MILLER-ROSENTHAL ~I~_AN DLO RD)///