Resolution 2022-32217 RESOLUTION NO. 2022-32217
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA,APPROVING A FIRST AMENDMENT
TO THE AGREEMENT OF LEASE ("GROUND LEASE") BETWEEN THE
CITY, AS OWNER, AND CLPF — LINCOLN, LLC ("CLPF"), AS TENANT,
INVOLVING THE PROJECT LOCATED AT 1691 MICHIGAN AVENUE
•
(PROJECT SITE); SAID AMENDMENT, AMONG OTHER TERMS,
CLARIFYING THAT CERTAIN INDIRECT NON-CONTROLLING
INTERESTS IN TENANT MAY BE HELD THROUGH INVESTMENT
FUNDS AND PUBLICLY TRADED COMPANIES THAT ARE
ORGANIZED UNDER THE LAWS OF THE UNITED STATES OR ANY
STATE THEREOF, PROVIDED THAT ALL OFFICE OF FOREIGN ASSET
CONTROL ("OFAC") REGULATIONS ARE SATISFIED; AND
APPROVING THE SALE OF THE IMPROVEMENTS LOCATED AT THE
PROJECT SITE FROM CLPF TO 1691 MICHIGAN AVENUE PROPERTY
OWNER, L.P. ("PROPOSED BUYER"),_FOR THE TOTAL SALES PRICE
OF$92,500,000, SUBJECT TO THE ADMINISTRATION'S SUCCESSFUL
COMPLETION OF ITS EVALUATION OF THE PROPOSED BUYER IN
ACCORDANCE WITH ARTICLE 10 OF THE GROUND LEASE, AND
PAYMENT TO THE CITY OF ITS REASONABLE COSTS INCURRED IN
CONNECTION WITH THE PROPOSED SALE INCLUDING, WITHOUT
LIMITATION, REIMBURSEMENT OF THE CITY'S DUE DILIGENCE
COSTS; AND FURTHER AUTHORIZING THE MAYOR AND CITY CLERK
TO EXECUTE THE AMENDMENT AND ANY AND ALL CLOSING
DOCUMENTS RELATED TO THE SALE.
WHEREAS, on January 5, 1998, the City issued RFP No. 20-97/98, seeking proposals
for the development of Public-Private Parking Facilities; and
WHEREAS, on July 7, 1999, the Mayor and City Commission adopted Resolution No.
99-23236, approving the Agreement of Lease and the Development Agreement between the City
and Lincoln Plaza Partners, LLC, for the development of a mixed-use project, located at Michigan
and Jefferson Avenue, between Lincoln Lane and 17th Street (the "Land"); and
WHEREAS, an Agreement of Lease was executed between the City, as Owner/ground
lessor, and Lincoln Plaza Partners LLC, a Florida limited liability company, as Tenant/ground
lessee, dated September 1, 1999 ("Ground Lease"), under which Ground Lease Tenant agreed
to develop a commercial project, consisting of an office building, a parking garage, and ground
floor retail space (collectively the "Project"), which Project is currently located at 1691 Michigan
Avenue, and commonly referred to as "The Lincoln" (the Land and Project shall be collectively
referred to herein as the "Premises"); and
WHEREAS, pursuant to the Ground Lease, Tenant leases the Land from the City and
Tenant holds ownership and title to the Project, and upon the expiration of the Ground Lease,
ownership of, and title to the Project automatically vests in the City, without the payment of
consideration therefor; and
WHEREAS, the Ground Lease has an initial term of 50 years, expiring September 30,
2052, plus two automatic renewal options for 20 years each (unless the Tenant is in default or
notifies the City within the last twenty-four(24)months of the end of the term in question, indicated
they will not exercise their option); and
WHEREAS, on December 20, 2000, the Mayor and City Commission adopted Resolution
No. 2000-24220, approving the sale of the Project and the Assignment and Assumption of the
Ground Lease from Lincoln Plaza Partners, LLC to LNR Jefferson, LLC, which entity later
changed its name to The Lincoln, LLC; and
WHEREAS, on or about July 18, 2006, The Lincoln LLC sold the Project and assigned its
leasehold interest in the Land to Lincoln Miami Beach Investments, LLC, a Delaware limited
liability company; and
WHEREAS, on November 17, 2006, Lincoln Miami Beach Investment, LLC changed its
name to 01K Lincoln Miami Beach Investment, LLC, and thereafter, on June 17, 2009, merged
with 1691 Michigan Ave Investment LP, a Delaware limited liability partnership; and
WHEREAS, on February 12, 2014, the Mayor and City Commission approved Resolution
No. 2014-28486,authorizing the Mayor and City Clerk to execute Amendment No. 1 to the Ground
Lease(the "Original First Amendment"), modifying the Scope of Use under the Ground Lease by
reducing the minimum number of parking spaces required for the parking garage facility,from 700
to 645 spaces; increasing the minimum number of parking spaces required to be maintained at
all times for use by the general public from 100 to 155 parking spaces; and further increasing the
monthly parking spaces for members of the general public from 50 to 75, in connection with the
development of a miniature golf project at the sixth floor of the garage with the subtenant, City
Middle, LLC; and
WHEREAS, the miniature golf project was never developed; therefore, the Original First
Amendment was never executed; and
WHEREAS, on January 13, 2016, the Mayor and City Commission adopted Resolution
No. 2016-29268, declining the Owner's Reciprocal Right of First Refusal and approving the sale
of the Project to CLPF-Lincoln, LLC, a Delaware limited liability company ("Tenant"), subject to
the Administration's successful completion of its evaluation of the proposed purchaser; and
WHEREAS, the Ground Lease was further assigned to Tenant by an Assignment and
Assumption of Ground Lease dated April 8, 2016 (the Ground Lease, as amended and assigned,
shall be referred to as the "Lease"); and
WHEREAS, on April 5, 2022, the Tenant provided notice to the City ("Offer Notice") of its
desire to sell its leasehold interest in the Premises to a third party and offering the City, as required
by Section 36.2 of the Ground Lease, the right to purchase the Tenant's leasehold interest for the
sum of $92,500,000 and upon other terms specified in the notice (the "Right of First Offer
Transaction"); and
WHEREAS, on May 4, 2022, the Mayor and City Commission adopted Resolution No.
2022-32136, declining the Right of First Offer Transaction and further rescinding Resolution No.
2014-28486 (i.e., the Resolution pursuant to which the Mayor and City Commission had approved
the Original First Amendment for the purpose of authorizing the development of a mini golf project
which ultimately was not developed); and
WHEREAS, on May 17, 2022, the.City provided Tenant with a countersigned Offer Notice
rejecting the Right of First Offer as authorized by Resolution 2022-32136; and
WHEREAS, on June 7, 2022, the City received written notice from Tenant pursuant to
Section 10.5 of the Ground Lease requesting the City's consent to a proposed sale of one hundred
percent (100%) of Tenant's leasehold interest to 1691 Michigan Avenue Property Owner, L.P., a
Delaware limited partnership that will be owned by a fund managed by Starwood Capital Group,
one of the world's leading private real estate firms,with approximately$115 billion in assets under
its management (the "Proposed Buyer"); and
WHEREAS, pursuant to Section 10.6(b)of the Ground Lease, if the sale is consummated,
its effectiveness will be subject to delivery of certain documents to the City, including an
assignment and assumption agreement in form and substance satisfactory to the City; and
WHEREAS, the Proposed Buyer has requested that the Ground Lease be amended
pursuant to a First Amendment to Agreement of Lease: said amendment, among other terms, (a)
clarifying that certain non-controlling interests in Tenant may be owned by foreign
instrumentalities indirectly through investment funds and publicly traded companies that are
organized under the laws of the United States or any State thereof provided that all Office of
Foreign Asset Control Regulations are satisfied, (b) allowing for the creation of mezzanine debt
in connection with financing or refinancing transactions, and (c) eliminating provisions that
temporarily excuse the payment of percentage rent by a transferee following a foreclosure; and
WHEREAS, the City Manager does not object to the terms proposed to be included in the
First Amendment to Agreement of Lease and, subject to the Administration's successful
completion of its evaluation of the Proposed Buyer, the City Manager recommends approving
Tenant's sale of one hundred percent (100%) of its leasehold interest in the Project to the
Proposed Buyer for the total sales price of$92,500,000 and on such other terms as are not less
favorable to Tenant as those that were included in the Offer Notice.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission hereby approves a first amendment to the Agreement of Lease between the City of
Miami Beach and CLPF— Lincoln, LLC: (a) clarifying that certain non-controlling interests in
Tenant may be owned by foreign instrumentalities indirectly through investment funds and
publicly traded companies that are organized under the laws of the United States or any State
thereof provided that all Office of Foreign Asset Control Regulations are satisfied, (b) allowing
for the creation of mezzanine debt in connection with financing or refinancing transactions, and
(c) eliminating provisions that temporarily excused the payment of percentage rent by a
transferee following a foreclosure; and further approves the sale of the Tenant's leasehold
interest in the Project from CLPF—Lincoln, LLC to 1691 Michigan Avenue Property Owner, L.P.
'("Proposed Buyer"), for the total sales price of$92,500,000, subject to the Administration's
successful completion of its evaluation of the Proposed Buyer in accordance with article 10 of
the Ground Lease, and payment to the city of its reasonable costs incurred in connection with
the proposed sale including, without limitation, reimbursement of the city's due diligence costs;
and further authorizes the Mayor and City Clerk to execute the amendment and any and all
closing documents related to the sale.
PASSED and ADOPTED this 20 day of July, 2022.
,4<2z__Z____
Dan Gelber, Mayor
c.___ /i
ATTEST:
Aft 2 5 2922
Rafa E. Granado, City Clerk _0 B4gPe"
01',,,,
`s� APPROVED AS TO
iNtORP•ORATED FORM & LANGUAGE
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t &FOR EXECUTION
City Attorney Date
Resolutions C7 F
MIAMI BEACH
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Alina T. Hudak, City Manager
DATE: July 20, 2022
SUBJECT:A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORI DA,APPROVING A FIRST AMENDMENT TO THE
AGREEMENT OF LEASE ("GROUND LEASE") BETWEEN THE CITY, AS
OWNER, AND CLPF — LINCOLN, LLC ("CLPF"), AS TENANT, INVOLVING
THE PROJECT LOCATED AT 1691 MICHIGAN AVENUE (PROJECT SITE);
SAID AMENDMENT, AMONG OTHER TERMS, CLARIFYING THAT
CERTAIN INDIRECT NON-CONTROLLING INTERESTS IN TENANT MAY
BE HELD THROUGH INVESTMENT FUNDS AND PUBLICLY TRADED
COMPANIES THAT ARE ORGANIZED UNDER THE LAWS OF THE UNITED
STATES OR ANY STATE THEREOF, PROVIDED THAT ALL OFFICE OF
FOREIGN ASSET CONTROL ("OFAC") REGULATIONS ARE SATISFIED;
AND\ APPROVING THE SALE OF THE IMPROVEMENTS LOCATED AT
THE PROJECT SITE FROM CLPF TO 1691 MICHIGAN AVENUE
PROPERTY OWNER, L.P. ("PROPOSED BUYER"), FOR THE TOTAL
SALES PRICE OF $92,500,000, SUBJECT TO THE ADMINISTRATION'S
SUCCESSFUL COMPLETION OF ITS EVALUATION OF THE PROPOSED
BUYER IN ACCORDANCE WITH ARTICLE 10 OF THE GROUND LEASE,
AND PAYMENT TO THE CITY OF ITS REASONABLE COSTS INCURRED
IN CONNECTION WITH THE PROPOSED SALE INCLUDING, WITHOUT
LIMITATION, REIMBURSEMENT OF THE CITY'S DUE DILIGENCE
COSTS;AND FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE THE AMENDMENT AND ANY AND ALL CLOSING DOCUMENTS
RELATED TO THE SALE.
SUPPORTING SURVEY DATA
n/a
FINANCIAL INFORMATION
n/a
Applicable Area
South Beach
Is this a"Residents Right Does this item utilize G.O.
Page 221 of 1502
to Know" item. pursuant to Bond Funds?
City Code Section 2-14?
No No
Legislative Tracking
Facilities and Fleet Management
ATTACHMENTS:
Description.
o Memo
• Exhibit A
• Reso
Page 222 of 1502
MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139,
www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Honorable Mayor Dan Gelber and Members of the City Commission
FROM: Alina T. Hudak, City Manager
DATE: July 20, 2022
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING A FIRST AMENDMENT TO THE
AGREEMENT OF LEASE ("GROUND LEASE") BETWEEN THE CITY, AS
OWNER,AND CLPF—LINCOLN,LLC("CLPF"),AS TENANT,INVOLVING THE
PROJECT LOCATED AT 1691 MICHIGAN AVENUE (PROJECT SITE); SAID
AMENDMENT, AMONG OTHER TERMS, CLARIFYING THAT CERTAIN
INDIRECT NON-CONTROLLING INTERESTS IN TENANT MAY BE HELD
THROUGH INVESTMENT FUNDS AND PUBLICLY TRADED COMPANIES
THAT ARE ORGANIZED UNDER THE LAWS OF THE UNITED STATES OR
ANY STATE THEREOF, PROVIDED THAT ALL OFFICE OF FOREIGN ASSET
CONTROL ("OFAC") REGULATIONS ARE SATISFIED; AND\ APPROVING
THE SALE OF THE IMPROVEMENTS LOCATED AT THE PROJECT SITE
FROM CLPF TO 1691 MICHIGAN AVENUE PROPERTY OWNER, L.P.
("PROPOSED BUYER"), FOR THE TOTAL SALES PRICE OF $92,500,000,
SUBJECT TO THE ADMINISTRATION'S SUCCESSFUL COMPLETION OF ITS
EVALUATION OF THE PROPOSED BUYER IN ACCORDANCE WITH ARTICLE
10 OF THE GROUND LEASE, AND PAYMENT TO THE CITY OF ITS
REASONABLE COSTS INCURRED IN CONNECTION WITH THE PROPOSED
SALE INCLUDING, WITHOUT LIMITATION, REIMBURSEMENT OF THE
CITY'S DUE DILIGENCE COSTS;AND FURTHER AUTHORIZING THE MAYOR
AND CITY CLERK TO EXECUTE THE AMENDMENT AND ANY AND ALL
CLOSING DOCUMENTS RELATED TO THE SALE.
BACKGROUND
On January 5, 1998, the City issued RFP No. 20-97/98, seeking proposals for the development
of Public-Private Parking Facilities. On July 7, 1999, the Mayor and City Commission adopted
Resolution No. 99-23236, approving the Agreement of Lease and the Development Agreement
between the City and Lincoln Plaza Partners, LLC, for the development of a mix-use project,
located at Michigan and Jefferson Avenue, between Lincoln Lane and 17th Street(the"Land").
An Agreement of Lease was executed between the City, as Owner/ground lessor, and Lincoln
Plaza Partners LLC, a Florida limited liability company, as Tenant/ground lessee, dated
September 1, 1999 ("Ground Lease"), under which Ground Lease Tenant agreed to develop a
commercial project, consisting of an office building, a parking garage, and ground floor retail
space(collectively the"Project"),which Project is currently located at 1691 Michigan Avenue, and
commonly referred to as"The Lincoln"(the Land and Project will be collectively referred herein to
Page 223 of 1502
Commission Memorandum
1691 Michigan Avenue
Page 2 of 4
as the "Premises"). Pursuant to the Ground Lease, Tenant leases the land from the City and
Tenant holds ownership and title to the Project, and upon the expiration of the Ground Lease,
ownership of, and title to the Project automatically vests in the City, without the payment of
consideration.
The Ground Lease has an initial term of 50 years, expiring September 30, 2052, plus two
automatic renewal options for 20 years each, unless the Tenant is in default or notifies the City
within the last twenty-four (24) months of the end of the term in question, indicated they will not
exercise their option.
On Dedember 20, 2000, the Mayor and City commission adopted Resolution No. 2000-24220,
approving the Sale and Assignment and Assumption of the Ground Lease from Lincoln Plaza
Partners,LLC to LNR Jefferson, LLC. On October 5,2005, LNR Jefferson, LLC changed its name
to The Lincoln, LLC.
On or about July 18, 2006, The Lincoln LLC sold the Project and assigned its leasehold interest
in the Land to Lincoln Miami Beach Investments, LLC, a Delaware limited liability company.
On November 17, 2006, Lincoln Miami Beach Investment, LLC changed its name to 01K Lincoln
Miami Beach Investment, LLC, and thereafter,on June 17,2009, merged with 1691 Michigan Ave
Investment LP, a Delaware limited liability partnership.
On February 12, 2014, the Mayor and City Commission approved Resolution No. 2014-28486,
authorizing the Mayor and City Clerk to execute Amendment No. 1 to the Ground Lease,
modifying the Scope of Use under the Ground Lease by reducing the minimum number of parking
spaces required for the parking garage facility, from 700 to 645 spaces; increasing the minimum
number of parking spaces required to be maintained at all times for use by the general public from
100 to 155 parking spaces; and further increasing the monthly parking spaces for members of the
general public from 50 to 75, in connection with the development of a miniature golf project at the
sixth floor of the garage with the subtenant, City Middle, LLC. City Middle, LLC never developed
the miniature golf project; therefore, Amendment No. 1 was never executed.
On January 13, 2016, the Mayor and City Commission adopted Resolution No. 2016-29268,
declining the Owner's Reciprocal Right of First Refusal and approving the sale of the Project to
CLPF-Lincoln, LLC, a Delaware limited liability company ("Tenant"), subject to the
Administration's successful completion of its evaluation of the proposed purchaser. The Ground
Lease was further assigned to Tenant by an Assignment and Assumption of Ground Lease dated
April 8, 2016 (the Ground Lease, as amended and assigned, shall be referred to as the"Lease").
The Project contains three principal uses:(i)a parking garage with 709 parking spaces,(ii)43,166
square feet of ground retail space, and (iii) 118,658 square feet of office space.
ANALYSIS
On April 5, 2022, the Tenant provided notice to the City ("Offer Notice") of its desire to sell its
leasehold interest in the Premises to a third party and offering the City, as required by Section
36.2 of the Ground Lease, the right to purchase the Tenant's leasehold interest for the sum of
$92,500,000 and upon other terms specified in the notice (the"Right of First Offer Transaction").
Pursuant to Section 36.2(b)of the Lease, Tenant cannot consummate any offer from a third party
Page 224 of 1502
Commission Memorandum
1691 Michigan Avenue
Page 3 of 4
to purchase the Tenant's interest in the Premises until the earlier to occur of: (i)the expiration of
45 days following Owner's receipt of the Offer Notice, or(ii)receipt by Tenant of a notice by Owner
declining to consummate the Right of First Offer Transaction.
On May 5, 2022 the Mayor and City Commission adopted Resolution No. 2022-32136, declining
the Owner's Reciprocal Right of First Refusal involving the sale of the project and rescinding
Resolution No. 2014-28486 (i.e., the Resolution pursuant to which the Mayor and City
Commission had approved the Original First Amendment for the purpose of authorizing the
development of a mini golf project which ultimately was not developed).
On May 17, 2022, the City provided Tenant with a countersigned Offer Notice rejecting the Right
of First Offer as authorized by Resolution 2022-32136.
Pursuant to Section 10.5 of the Lease, a proposed transfer and/or sale of the Project requires
written notice to the City, as Owner, with the identity of the transferor, transferee, nature of the
transaction, percentage of interest conveyed and such other information requested by the City .
("Notice of Sale"). The City has sixty (60) days from receipt of the Notice of Sale to consent to
the sale.
On May 25, 2022, the City received written notice from Tenant pursuant to Section 10.5 of the
Ground Lease requesting the City's consent to a proposed sale of one hundred percent (100%)
of Tenant's ownership interest in the Project to SCG Global Holdings, L.L.C., a Delaware limited
liability company, or its affiliated designee. A copy of the May 25, 2022 notice is attached hereto
as Exhibit "A". Upon the Administration's request to clarify the ultimate proposed buyer, Tenant
provided an updated notice, dated June 7, 2022, identifying 1691 Michigan Avenue Property
Owner, L.P., a Delaware limited partnership, as the proposed Buyer ("Proposed Buyer"),
represented to be an enity that will be owned by a fund managed by Starwood Capital Group
("SCG"). A copy of the June 7, 2022 notice is attached hereto as Exhibit"B". SCG is one of the
world's leading private real estate firms, with approximately $115 billion in assets under its
management and is headquartered in the City of Miami Beach.
SCG has requested that the Lease be amended pursuant to a First Amendment to Agreement of
Lease ("First Amendment")to, among other terms, (a)clarify that certain non-controlling interests
in Tenant may be owned by foreign instrumentalities indirectly through investment funds and
publicly traded companies that are organized under the laws of the United States or any State
thereof subject to compliance with Office of Foreign Asset Control ("OFAC") Regulations and (b)
allow for the creation of mezzanine debt in connection with financing or refinancing transactions.
The Administration does not object to these requested modifications, provided (i) that all OFAC
Regulations are satisfied and (ii)that certain provisions that temporarily excuse the payment of
percentage rent by a transferee following a foreclosure be eliminated from the Lease. A copy of
the proposed First Amendment is attached hereto as Exhibit"C".
Page 225 of 1502
Commission Memorandum
1691 Michigan Avenue
Page 4 of 4
Pursuant to Section 10.6(b) of the Lease, if the sale is approved and consummated, its
effectiveness will be subject to delivery of certain documents to the City, including an assignment
and assumption agreement relating to the Lease in form and substance satisfactory to the City.
CONCLUSION
Based upon the foregoing, it is recommended that the Mayor and City Commission adopt the
Resolution approving the First Amendment to Agreement of Lease, and, upon approval of the
First Amendment, approving the sale of the Project by CLPF — Lincoln, LLC to SCG Global
Holdings, LLC (Proposed Buyer), for the total purchase price of $92,500,000, subject to the
Administration's successful completion of its evaluation of the proposed buyer in accordance with
Article 10 of the Agreement of Lease between the City(Owner)and CLPF—Lincoln, LLC(Tenant),
and payment to the City of its reasonable costs incurred in connection with the proposed sale
including,without limitation, reimbursement of the City's due diligence costs and reasonable legal
costs; and further authorizing the Mayor and City Clerk to execute the First Amendment and
authorizing the City Manager to execute any and all closing documents related to the sale.
Attachments
Resolution
Exhibit"A"—May 25, 2022 Notice of Sale from Tenant
Exhibit"B"—June 7, 2022 Notice of Sale from Tenant
Exhibit"C"—First Amendment
Page 226 of 1502
FAILURE TO RESPOND TO THIS REQUEST WITHIN THE TIME PERIOD PROVIDED IN
THE LEASE AGREEMENT BETWEEN CITY OF MIAMI BEACH, FLORIDA AND 1691
MICHIGAN AVE INVESTMENT LP SHALL CONSTITUTE AUTOMATIC APPROVAL OF
THE MATTERS DESCRIBED HEREIN WITH RESPECT TO SECTION 10.3, 10.5 AND 10.6
OF SUCH LEASE AGREEMENT.
May 25,2022
Sent Via UPS
City of Miami Beach
City Manager
1700 Convention Center Drive
Miami Beach, Florida 33139
City of Miami Beach
City Attorney
1700 Convention Center Drive
Miami Beach, Florida 33139
Bloom & Minsker
25 SE 2"d Ave
Suite 450
Miami, Florida 33131-1546
Attention: Joel N. Minsker, P.A.
Re: Lease Agreement (as previously assigned, the "Lease") between CITY OF MIAMI BEACH,
FLORIDA, a municipal corporation duly organized and existing under the laws of the State of Florida
("Landlord"), and CLPF — Lincoln, LLC, a Delaware limited liability company (successor in interest
to 1691 Michigan Ave Investment LP) ("Tenant"), dated September 1, 1999, with respect to the
property located at 1691 Michigan Avenue, Miami Beach, Florida (the "Premises"); capitalized terms
used but not otherwise defined herein have the meanings given such terms in the Lease. For reference
a copy of the Offer Notice is attached hereto as Exhibit A.
Dear Sir or Madam:
If Landlord declines to accept that certain Offer Notice sent by Tenant on April 5, 2022 pursuant to Section
36.2(a) of the Lease, then Tenant hereby requests Landlord's consent to a proposed Sale of Tenant's
interest in the Lease pursuant to Sections 10.3(c) and 10.5(a) of the Lease. Please note the following
information about the potential third party purchaser of Tenant's interest in the Lease: (i) the name of the
proposed purchaser is SCG Global Holdings, L.L.C., a Delaware limited liability company, or its affiliated
designee, and the proposed purchaser's address is c/o Starwood Capital Group Global, L.P., 591 West
Putnam Avenue, Greenwich, CT 06830, (ii) the Tenant's name is CLPF — Lincoln, LLC, and Tenant's
address is c/o Clarion Partners, 230 Park Avenue, 12th Floor, New York, NY 10169, and (iii) the
contemplated Sale is for one hundred percent(100%) of the leasehold interest under the Lease.
Page 227 of 1502
The proposed purchaser is a subsidiary of Starwood Capital Group, one of the world's leading private real
estate firms, with approximately $115 billion in assets under management. The firm has raised over $70
billion of capital and has sponsored 16 private opportunistic real estate funds, 16 co-investments, and 8
public companies since its inception. Over the past 30 years, the firm has invested in over $200 billion of
assets, including properties within virtually every major real estate asset class. The firm has acquired over
100 million square feet of office properties since inception and currently owns a portfolio of approximately
48 million square feet globally. Over the past five years, the firm has been one of the most active and
aggressive purchasers of office assets in the United States. During this period, the firm acquired over $7
billion of office assets comprising over 20 million square feet across 32 transactions. Specific to
Starwood's experience in Florida, since 2015 they have acquired 4.3 million square feet of office properties
totaling nearly $900 million in the state (for more information, please see www.starwoodcapital.com). The
proposed purchaser hereby certifies that it is a Permitted Buyer pursuant to Section 10.3(c) of the Lease.
Pursuant to Section 10.3(c)(A) of the Lease, attached please find a letter from the Chief Financial Officer of
the Funds of Starwood XII Management GP, L.L.C., which certifies as to the net worth of the proposed
purchaser and affiliated entities attached as Exhibit B (the"Financial Confidential Information").
Please note, to facilitate Landlord's evaluation of the proposed purchaser, Starwood Capital Group is
willing to disclose to Landlord the Financial Confidential Information; provided, however, by accepting
such Financial Confidential Information, Landlord agrees: (i) except as required by applicable law,
regulation or legal process, to maintain in confidence and not disclose the Financial Confidential
Information, or any part thereof, to any third party other than to Landlord's independent certified public
accounting firm ("Landlord's CPA") it being understood Landlord's CPA shall be informed by Landlord of
the confidential nature of such information and shall be directed by Landlord to treat such information
confidentially, (ii) to take the same measures to maintain the confidentiality of the Financial Confidential
Information as Landlord does with respect to its own proprietary and confidential information; and (iii) not
to use any Financial Confidential Information for any purpose other than to evaluate whether or not to
consent to the proposed Sale of Tenant's interest in the Lease. If the proposed Sale is not consummated, or
any time upon request of Starwood Capital Group for any reason, Landlord will return to Starwood Capital
Group or destroy all written Financial Confidential Information (except as may be required for regulatory
purposes).
Pursuant to Section 10.6(b) of the Lease, attached as Exhibit C hereto please find a proposed form of
Assignment and Assumption of Ground Lease (the "Assumption of Lease"). Please confirm the
Assumption of Lease is acceptable for the consummation of the Sale to the proposed purchaser.
In the event that Landlord consents to the proposed Sale of Tenant's interest in the Lease as described
above and approves the Assumption of Lease attached hereto, Tenant kindly requests that Landlord
promptly provide a written statement to Tenant of such consent and approval by countersigning in the
applicable signature block below.
If you have any questions or need additional information,feel free to contact us at Clarion Partners.
[Signature Page Attached]
Page 228 of 1502
Sincerely,
CLPF—LINCOLN,LLC,
a Delaware limited liability company
By: Clarion Lion Properties Fund Holdings,L.P.,
a Delaware limited partnership
Its: Sole Member
By: CLPF-Holdings,LLC,
a Delaware limited liability company
Its: General Partner
By: Clarion Lion Properties Fund Holdings REIT,
LLC, a Delaware limited liability company
Its: Sole Member
By: Clarion Lion Properties Fund,LP,
a Delaware limited partnership
Its: Managing Member
By: Clarion Partners LPF GP, LLC, a
Delaware limited liability company
Its: General Partner
By: Clarion Partners,LLC,
a New York limited liability company
Its: Sole Member
By:
Vj
Name: Katie Vaz
Title: Authorized Signatory
Page 229 of 1502
WITH COPIES TO:
City of Miami Beach SCG Global Holdings, L.L.C.
City Manager c/o Starwood Capital Group Global. L.P.
1700 Convention Center Drive 591 West Putnam Ave
Miami Beach, Florida 33139 Greenwich, CT 06830
Attention: Andrew Coren
City of Miami Beach Nelson Mullins Broad &Cassel
City Attorney 1905 NW Corporate Blvd.
1700 Convention Center Drive Suite 310
Miami Beach, Florida 33139 Boca Raton, FL 33431
Attention: David Itskovich
Bloom & Minsker
25 SE 2nd Ave
Suite 450
Miami, FL 33131-1546
Attention:Joel N. Minsker, P.A.
Page 230 of 1502
The undersigned hereby certifies to Landlord that it is a Permitted Buyer pursuant to Section 10.3(c)of the
Lease.
SCG GLOBAL HOLDINGS, L.L.C.,
a Delaware limited liability company
By:
Name: Andrew Goren
Title: Managing Director
Page 231 of 1502
The City of Miami Beach, Florida does hereby consent to the proposed Sale of Tenant's interest in the Lease
as described above and approves the form of Assumption of Lease attached hereto.
CITY OF MIAMI BEACH, FLORIDA,
a municipal corporation of the State of Florida
By:
Name:
Title:
Page 232 of 1502
EXHIBIT A
OFFER NOTICE
Page 233 of 1502
•
FAILURI. TO RESPOND TO THIS REouv,o- ‘VITITIN THE TIME PERIOD
PRO-VI DEI) IN THE LEASE AGREEMENT BETWEI:N CITY OP BEACH,
FLORIDA A'st) GEN' — LINCOLN, LI,C D:NIA: CONSTITUTE AUTOMATIC
• APPIZOVAL OF THE MATTERS DESCRIBED liEREEN: WITH RESPEC"F TO
SECTION 36.2 OF SIX.'I LEASE AC;REEMENT.
Al•ril
sew rps„„d hut Doiver,.
City oi'Mitimi Beach,
City Maottgei:
i 700 Ct-nvelitien Center
Florida 33139
City or Miami leach
Ci . Attorney
]7(Tin conv,:00tion Lenter Drive
Miami Beach. Florid.,;33:39
Suite-7.g
1401 firicIte!if's.v.enue
Florida 31 I31
Attention:Joel N. tylinsIter, P.A.
Re: Lease Agreement (as aniend.eti and assigned, the "Letts:2") between CITY OF MIAMI
FLORIDA. a municipal corporation duly organized and existing under the laws of
the State ol' Florida (-Owner"), and CLPF •• Lincoln. EEC; a Delaware limited liability
company (litecessor :a interest to 69! N.cichigan Ave investment LI)) 0:---pcmini"), dated
September I, 999, kvitli respect to the property located at 1691 Michit...:an Avenue. Miami
BclIch• Florda ttile.-Promises");caPiu!1::( not oti1er-vi5e defined herein have
the n:!eaniri:•?,s. t2iven terms in the Lease
Dear Sir or Madam:
Piti-suarit to Ariicic 36.2(a)or the Lease,Tenant hereby notilles C.twner that Tentatt desires to sell
its leasehold interest(tithe Premises. This notice constitutes an Offer Notice described in Article
36.2(a) of the Lease. Pursuant to Article 36.2(b)of the Lease, Tenant will not consummate any
offer from a third party to purchase the Premises until the earlier to occur ol(i)the expiration 01'45
days followinl,.Owner's receila of this 011e:•7-•lotice,or(ii)receipt by'I enant of a notice by Owner
di_cit trQIOct uturmtle Ow Right.ofiiOffer Transaction. in covent that Owner elects not
to C.OrISIlt111.11:1te c RiOIT af rclialr, kindly roltio.sts that Oit rue:.promptly
provizir writtc•fl ;,.taierut:r: tO 'lent ) ol stub inti:rtion by coonterigning in the applicable
signature block beici%\
•
Page 234 of 1502
•
nit ti! Cie tert:1‘.: :hi,
• -
2. pliku on a cii.tif
it: less that, sixty fat r.or the
date Ten.m:. execnte,- C put '' s•Tti: uwacr.
Purchiatcr of th:s cut late the-s-tile
•t.c,
3. l)eetit ;tie At the des ccc..Tenaot situ l caao.ey to the Owner(i"!all client:I:Cs right,title
and httere,:t.in and to the Premises oy a peei;i ssarranty deed and(ii)al;ot rentini's right,
title and interest in an to this Lease by cut assignment pi ICaSe. ihc turn: SUCII deed and
,issiviment ieasc shall be mutually areepi able tt-i Tenant.and Omer but shall not in any
es.e.:ti provide ror any represerdationa Teritild oche: titan a represinatit::that Tenant has
ot dieretoino:traasferrcd oc assirne,i ne items traritirCrP.,1: i.her;::bY arid
*1:".1d satties ctaitained in a special warranty deed. '1‘?nant's
iivere,t in Inc Pretnise arid lit, 1 he eon\eyad to 0v.:ic, siir:Cc ticnil liCtiS
cne ' ()Owl. inattere 1.•e:t te,:tuly the tide tnereto and fliy mate or 1•acts cc
surs reveai tea; it: ii c.ises :o :eaati; :s otfli'4ritions unde:.Section 2.2 of the •
Lease! still!' also exe;.:;te C;.,S1.0:11itrik !iit!.!.1 CSLIte
cit -11) ;L: ;
- At the closiii;.;ot•the pure•pibe, all Rental Impositions SIUll be
prorate.i throuthi the date oi• a:kJ Oy the party entitied 11 Owner
.aeahries to at: mit anrcaCser tr..s cc'Yccat 01•Cer Tran,,a,:tion, the cxpe.0.eS wili `0,;
cuy. mria-iiy prorated ti:; rtner rcai :ra..tactions in Miaini-Dade Connt>.
reeeten-:2; a:2-edit %vit.: rte:re::t LeThints taafer
c:sistine !east:is rOt tenant h.dtic.:ma it.co:tat.
5. I...Nit:v:1m',• I iach part) Ali title charges, recordira lees,
survey chart:es aiid Other expenm,:s incurred in connection with the purcimse shall be paid
or Owner. Tenant shall pay transfer taxes fireleding documentary stamp taxes and Miami-
Dade County siirtax)payable in connection with the purchase. rr cp.vner declines to be the •
:.ttttcltnse: 0111115 Right of First Otter Transaction,then in.2 sale transaction la a third party
purchaser. (i) emial shall pay traosi..ir taxes (including documentary stain!) taxes and
vliami-Dade County sui•tast)and U'C I cent alit CctS relatina to any tile clearmi:.documents
itccossary to currs:ummate the sate. i•ci.idats recs,any rees and expensesreq,lired
to he tid to Owner inr its consen:, ;3tOker:1•5_,...;.! cut,:ziss'ion dde tU th.z broker ttred in
dna trmtsaction.acid 50%oresc...ok% toe third party purchaser shall pay fees and
premium Cr titie insurance,st:a.-ey chaftes and of escrow fees. •
if Van itilVC nfly(1110.5;i0n5 or need ackiitional inii,,nrattion, reel free to c:oritat.:',us a:214-775-7668.
Page 235 of 1502
Sincerely.
CLIT LINCOLN,
Dcimvare limited liability co:lin:my
By; Clarion 1.ion Preperties Furviitlinas, L.P.,
Delaware. limited partnership
Its: Sole Member
By: CL.PF-Holdings, LLC,
a Delaware limited liability company
Its:General Partner
13,..• Clarion Lion Propel-nes Fund lioldirins R111T,
LLC,a Delaware i;.n.ted liability company
its: Sole Member
•
By: Clarion Lion Properties Fund, 1..P,
a Delaware binned partranship
Managing Member
By: Clarion Partners LPF GP,LLC,
Deiaware limited liability company
Its: General Partner
Clarion Partners,LLC,
a Nev.. York limited liability company
Its: Sole Member
BY:•
•
N:;111,::: JOCLOQ•lb
Title: Authorized Signatory
WITI1 COPIES.10:
City Beat. 1
City limager
1700 Cnnventio:.Center Dri%:e
Miami Beaeh, 1 o:.ida 33139
City of Miami Beach
City Attorney
1700 Convention Center Drive
Mia:ni Florida 133139
•
•
3
Page 236 of 1502
70..;
31; I
\\,
•
•
•
•
Page 237 of 1502
•
Horida . !VOL ki;Nilt Ft:-st
;?.is IThi-ASI 1.1
OSI..1) I \\Thi.STILL L.0.. Si BiECT TO TI If:
PRO\ S j1 IN( I :)1:%if I \\ 1110'. 1 1-.i\-IITATON SI.:(.1.10ss.ti 1;1
OFI \\I I. \0 I II PROVISION(S14.1 ii'
"I DIJ111.S Or VIII: Pk()120:)1•:!) \I)TRANS:1(710
CITY. OF MiAMI BEACH, FLORIDA,
m;a:;.,!ipal CP:the.Sta e
City N‘larager
7/02 —
8: FOR
Page 238 of 1502
RESOLUTION NO. _ 2022-32136
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA AUTHORIZING THE CITY MANAGER TO DECLINE,
IN WRITING, THE RIGHT OF FIRST OFFER TRANSACTION, AS REQUIRED
PURSUANT TO THE TERMS OF SECTION 36.2 OF THE AGREEMENT OF •
LEASE (GROUND LEASE) BETWEEN THE CITY (OWNER) AND CLPF —
LINCOLN, LLC (TENANT), INVOLVING THE SALE OF THE PROJECT
LOCATED AT 1691 MICHIGAN AVENUE (THE LINCOLN) FOR THE TOTAL
PURCHASE PRICE OF $92,500,000; FURTHER, RESCINDING RESOLUTION
NO. 2014-28486, WHICH AUTHORIZED AN AMENDMENT TO THE GROUND
LEASE FOR THE PURPOSE OF DEVELOPING A MINIATURE GOLF PROJECT
AT THE LINCOLN WHICH WAS NEVER DEVELOPED.
WHEREAS, on January 5, 1998,the City issued RFP No.20-97/98, seeking proposals
for the development of Public-Private Parking Facilities;and
WHEREAS, on July 7, 1999, the Mayor and City Commission adopted Resolution No.
99-23236,approving the Agreement of Lease and the Development Agreement between the City
and Lincoln Plaza Partners, LLC, for the development of a mix-use project, located at Michigan
and Jefferson Avenue, between Lincoln Lane and 17t Street(the"Land");and
WHEREAS, an Agreement of Lease was executed between the City, as Owner/ground
lessor, and Lincoln Plaza Partners LLC, a Florida limited liability company, as Tenant/ground
lessee, dated September 1, 1999 ("Ground Lease"), under which Ground Lease Tenant agreed
to develop a commercial project, consisting of an office building, a parking garage, and ground
floor retail space (collectively the "Project'), which Project is currently located at 1691 Michigan
Avenue, and commonly referred to as "The Lincoln" (the Land and Project shall be collectively
referred to herein as the"Premises");and
WHEREAS, pursuant to the Ground Lease, Tenant leases the land from the City and
Tenant holds ownership and title to the Project, and upon the expiration of the Ground Lease,
ownership of, and title to the Project automatically vests in the City, without the payment of
consideration therefor; and
WHEREAS,the Ground Lease has an initial term of 50 years, expiring September 30,
2052, plus two automatic renewal options for 20 years each (unless the Tenant is in default or
notifies the City within the last twenty-four(24)months of the end of the term in question,indicated
they will not exercise their option);and
WHEREAS,on December 20,2000,the Mayor and City Commission adopted Resolution
No. 2000-24220, approving the sale of the Project and the Assignment and Assumption of the
Ground Lease from Lincoln Plaza Partners, LLC to LNR Jefferson, LLC, which entity later •
changed its name to The Lincoln, LLC;and
WHEREAS,on or about July 18, 2006,The Lincoln LLC sold the Project and assigned its
leasehold interest in the Land to Lincoln Miami Beach Investments, LLC, a Delaware limited
liability company;and
WHEREAS, on November 17, 2006, Lincoln Miami Beach Investment, LLC changed its
name to OIK Lincoln Miami Beach Investment, LLC, and thereafter, on June 17, 2009, merged
with 1691 Michigan Ave Investment LP, a Delaware limited liability partnership;and
Page 239 of 1502
WHEREAS,on February 12, 2014,the Mayor and City Commission approved Resolution
No.2014-28486,authorizing the Mayor and City Clerk to execute Amendment No. 1 to the Ground
Lease,.modifying the Scope of Use under the Ground Lease by reducing the minimum number of
parking spaces required'for the parking garage facility, from 700 to 645 spaces; increasing the
minimum number of parking spaces required to be maintained at all times for use by the general
public from 100 to 155 parking spaces; and further increasing the monthly parking spaces for
members of the general public from 50 to 75, in connection with the development of a miniature
golf project at the sixth floor of the garage with the subtenant, City Middle, LLC; and
WHEREAS,the miniature golf project was never developed;therefore,Amendment No. 1
was never executed; and
WHEREAS, on January 13, 2016, the Mayor and City Commission adopted Resolution
No. 2016-29268, declining the Owner's Reciprocal Right of First Refusal and approving the sale
of the Project to CLPF-Lincoln, LLC, a Delaware limited liability company ("Tenant"), subject to
the Administration's successful completion of its evaluation of the proposed purchaser;and
WHEREAS, the Ground Lease was further assigned to Tenant by an Assignment and
Assumption of Ground Lease dated April 8,2016(the Ground Lease, as amended and assigned,
shall be referred to as the"Lease");and
WHEREAS, The Project contains three principal uses: (i) a parking garage with 709
parking spaces, (II) 43,166 square feet of ground retail space, and (iii) 118,658 square feet of
office space; and
WHEREAS, on April 5, 2022, the City received an Offer Notice pursuant to Section 36.2
of the Lease, notifying the City that Tenant desires to sell its leasehold interest in the Premises;
and
WHEREAS, pursuant to Section 36.2(b) of the Lease, Tenant will not consummate any
offer from a third party to purchase the Tenant's estate in the Premises ("Right of First Offer
Transaction") until the earlier to occur: (i) the expiration of 45 days following Owner's receipt of
this Offer Notice,or(ii)receipt by Tenant of a notice by Owner declining to consummate the Right
of First Offer Transaction; and
WHEREAS, The Offer Notice contained the following information:
Owner of Ground Lease: City of Miami Beach
Seller: CLPF-Lincoln, LLC
Purchase Price: $92,500,000 cash transaction; and
WHEREAS, in accordance with Article 36.2 of the Lease, the City has until May 20, 2022
to elect,in writing,whether or not to consummate the Right of First Offer Transaction,at the same
price and upon such other material terms set forth in the Offer Notice("Offer");and
WHEREAS,the cost to reconstruct a facility of this size with a mixed-use concept will cost
approximately$36M, plus tenant Improvements and leasing fees; and
WHEREAS, considering that the Offer materially exceeds the cost to construct a City-
owned parking, office, and retail facility and that the Premises will revert back to the City at the
end of the Lease term,the City Manager recommends that the City decline the Right of First Offer
Transaction; and rescind Resolution No. 2014-28486, that approved Amendment No. 1 to the
Lease, for the purpose of developing a miniature golf project at The Lincoln which was never
developed; and
Page 240 of 1502
WHEREAS,following the City's rejection of the Right of First Offer Transaction, pursuant
to Section 10.5("Required Notices")of the Lease,the proposed transfer and/or sale of the Project
requires written notice to the City, as Owner, with the identity of the transferor, transferee, nature
of the transaction, percentage of interest conveyed and such other information requested by the
City("Notice of Sale"); and
WHEREAS, since the City will have sixty(60)days to respond to the Notice of Sale, the
City Administration will then submit the proposed sale of the Project for approval by the City
Commission, subject to/the City Administration conducting its due diligence, at the sole expense
of Tenant, to investigate whether or not the proposed purchaser qualifies as a"Permitted Buyer"
under Section 10.3 of the Lease.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission hereby authorize the City Manager to decline, in writing, the Right of First Offer
Transaction,as required pursuant to the terms of Section 36.2 of the Agreement of Lease(Ground
. Lease) between the City (Owner) and CLPF— Lincoln, LLC (Tenant), involving the sale of the
Project located at 1691 Michigan Avenue (The Lincoln) for the total purchase price of
$92,500,000;further,rescind Resolution No.2014-28486,which authorized an amendment to the
Ground Lease for the purpose of developing a miniature golf project at The"Lincoln which was
never developed. '
PASSED and ADOPTED this W day of May 2022.
Dan Gelber, Mayor
ATTEST: 1...yq
MAY 1 0 2022
Rafael E. iranado,\City Clerk _ •
IACORP ORATEDI
APPROVED AS TO
FORM&LANGUAGE
& FO EXECUTION
City Attorney III .- Dote
Page 241 of 1502
Resolutions-C7 G
MIAMI BEACH
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Aline T.Hudak,City Manager
DATE: May 4,2022
SUBJECT:A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA AUTHORIZING THE CITY MANAGER TO
DECLINE, IN WRITING, THE RIGHT OF FIRST OFFER TRANSACTION,
AS REQUIRED PURSUANT TO THE TERMS OF SECTION 36.2 OF THE
" AGREEMENT OF LEASE (GROUND LEASE) BETWEEN THE CITY
(OWNER)AND CLPF— LINCOLN, LLC (TENANT), INVOLVING THE SALE
OF THE PROJECT LOCATED AT 1691 MICHIGAN AVENUE(THE LINCOLN)
FOR THE TOTAL PURCHASE PRICE OF $92,500,000; FURTHER,
RESCINDING RESOLUTION NO. 2014-28486, WHICH AUTHORIZED AN
AMENDMENT TO THE GROUND LEASE FOR THE PURPOSE OF
DEVELOPING A MINIATURE GOLF PROJECT AT THE LINCOLN WHICH
WAS NEVER DEVELOPED.
SUPPORTING SURVEY DATA
n/a
FINANCIAL INFORMATION
n/a
Applicable Area
South Beach
Is this a"Residents Right Does this item utilize G.O.
to Know"item.pursuant to Bond Funds?
City Code Section 2-14?
No No
Legislative Tracking
Facilities and Fleet Management
ATTACHMENTS:
Description
o Memo
Page 309 of 1451
Page 242 of 1502
a Resolution
Eibit A
Page 310 of 1451
Page 243 of 1502
MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive,Miami Beach, Florida 33139,
www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Honorable Mayor Dan Gelber and Members of the City Commission
FROM: Aline T. Hudak,City Manager
DATE: May 4,2022
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH,FLORIDA AUTHORIZING THE CITY MANAGER
TO DECLINE, IN WRITING, THE RIGHT OF FIRST OFFER
TRANSACTION, AS REQUIRED PURSUANT TO THE TERMS OF
SECTION 36.2 OF THE AGREEMENT OF LEASE (GROUND LEASE)
BETWEEN THE CITY(OWNER)AND CLPF—LINCOLN, LLC(TENANT),
INVOLVING THE SALE OF THE PROJECT LOCATED AT 1691
MICHIGAN AVENUE (THE LINCOLN) FOR THE TOTAL PURCHASE
PRICE OF $92,500,000; FURTHER, RESCINDING RESOLUTION NO.
2014-28486,WHICH AUTHORIZED AN AMENDMENT TO THE GROUND
LEASE FOR THE PURPOSE OF DEVELOPING A MINIATURE GOLF
PROJECT AT THE LINCOLN WHICH WAS NEVER DEVELOPED.
BACKGROUND
On January 5, 1998, the City issued RFP No. 20-97/98, seeking proposals for the development
of Public-Private Parking Facilities. On July 7, 1999,-the Mayor and City Commission ad"dpted
Resolution No. 99-23236, approving the Agreement of Lease and the Development Agreement
between the City and Lincoln Plaza Partners, LLC, for the development of a mix-use project,
located at Michigan and Jefferson Avenue, between Lincoln Lane and 17th Street(the"Land").
An Agreement of Lease was executed between the City, as Owner/ground lessor, and Lincoln
Plaza Partners LLC, a Florida limited liability company, as Tenant/ground lessee, dated
September 1, 1999 ("Ground Lease"), under which Ground Lease Tenant agreed to develop a
commercial project, consisting of an office building, a parking garage, and ground floor retail
space(collectively the"Project"),which Project is currently located at 1691 Michigan Avenue,and
commonly referred to as"The Lincoln"(the Land and Project will be collectively referred herein to
as the "Premises"). Pursuant to the Ground Lease, Tenant leases the land from the City and
Tenant holds ownership and title to the Project, and upon the expiration of the Ground Lease,
ownership of, and title to the Project automatically vests in the City, without the payment of
consideration.
The Ground Lease has an initial term of 50 years, expiring September 30, 2052, plus two
automatic renewal options for 20 years each, unless the Tenant is in default or notifies the City
within the last twenty-four(24) months of the end of the term in question, indicated they will not
exercise their option.
Page 311 of 1451
Page 244 of 1502
Commission Memorandum
1691 Michigan Avenue
Page 2 of 3
On December 20, 2000, the Mayor and City commission adopted Resolution No. 2000-24220,
approving the Sale and Assignment and Assumption of the Ground Lease from Lincoln Plaza
Partners,LLC to LNR Jefferson,LLC. On October 5,2005,LNR Jefferson,LLC changed its name
to The Lincoln, LLC.
On or about July 18, 2006,The.Lincoln LLC sold the Project and assigned its leasehold interest
in the Land to Lincoln Miami Beach Investments, LLC,a Delaware limited liability company.
On November 17,2006,Lincoln Miami Beach Investment, LLC changed its name to OIK Lincoln
Miami Beach Investment,LLC,and thereafter,on June 17,2009,merged with 1691 Michigan Ave
Investment LP, a Delaware limited liability partnership.
On February 12, 2014, the Mayor and City Commission approved Resolution No. 2014-28486,
authorizing the Mayor and City Clerk to execute Amendment No. 1 to the Ground Lease,
modifying the Scope of Use under the Ground Lease by reducing the minimum number of parking
spaces required for the parking garage facility, from 700 to 645 spaces; increasing the minimum
number of parking spaces required to be maintained at all times for use by the general public from
100 to 155 parking spaces;and further increasing the monthly parking spaces for members of the
general public from 50 to 75,in connection with the development of a miniature golf project at the
sixth floor of the garage with the subtenant, City Middle, LLC. City Middle, LLC never developed
the miniature golf project;therefore, Amendment No. 1 was never executed.
On January 13, 2016, the Mayor and City Commission adopted Resolution No. 2016-29268,
declining the Owner's Reciprocal Right of First Refusal and approving the sale of the Project to
CLPF-Lincoln, LLC, a Delaware limited liability company ("Tenant"), subject to the
Administration's successful completion of its evaluation of the proposed purchaser. The Ground
Lease was further assigned to Tenant by an Assignment and Assumption of Ground Lease dated
April 8,2016(the Ground Lease,as amended and assigned,shall be referred to as the"Lease").
0
The Lincoln Project contains three principal uses: (i)a parking garage with 709 parking spaces,
(ii)43,166 square feet of ground retail space, and(iii)118,658 square feet of office space.
ANALYSIS
On April 5,2022,the City received an Offer Notice pursuant to Section 36.2 of the Lease,notifying
the City that Tenant desires to sell its leasehold interest in the Premises.
Pursuant to Section 36.2(b)of the Lease,Tenant will not consummate any offer from a third party
to purchase the Tenant's estate in the Premises("Right of First Offer Transaction")until the earlier
to occur. (i)the expiration of 45 days following Owner's receipt of this Offer Notice,or(ii)receipt
by Tenant of a notice by Owner declining to consummate the Right of First Offer Transaction.
The Offer Notice contained the following information:
Owner of Ground Lease: City of Miami Beach
Seller: CLPF-Lincoln, LLC
Purchase Price: $92,500,000 cash transaction
In accordance with Article 36.2 of the Lease,"Owner's Reciprocal Right of First Refusal",the City
Page 312 of 1451
Page 245 of 1502
Commission Memorandum
1691 Michigan Avenue
Page 3of3
also has the right to elect, in writing,whether to consummate the Right of First Offer Transaction,
at the same price and upon such other material terms set forth in the Offer Notice("Offer"). The
City has until May 20,2022 to exercise in writing whether or not to consummate the Right of First
Refusal.
The cost to reconstruct a facility of this size with a mixed-use concept will cost approximately
$36M, plus tenant improvement and leasing fees. Considering that the Offer materially exceeds
the cost to construct a City-owned parking,office,and retail facility and that the Project will revert
to the City at the end of the Lease term, the City Manager recommends that the City decline the
Right of First Offer Transaction.
Following the City's rejection of the Right of First Offer Transaction, pursuant to Section 10.5
("Required Notices")of the Lease,the proposed transfer and/or sale of the Project requires written
notice to the City, as Cwner, with the identity of the transferor, transferee, nature of the
transaction, percentage of interest conveyed and such other information requested by the City
("Notice of Sale"). The City will have sixty(60)days from receipt of the Notice of Sale to consent
to the sale. Following receipt of the Notice of Sale, the City Administration will submit the
proposed sale of the Project for approval by the City Commission, subject to the City
Administration'conducting its due diligence,at the sole expense of Tenant,'to investigate whether
or not the proposed purchaser qualifies as a"Permitted Buyer"under Section 10.3 of the Lease.
CONCLUSION
Based upon the foregoing, the City Manager recommends that the Mayor and City Commission
adopt the Resolution approving and authorizing the City Manager to decline, in writing, the
Owner's Right of First Refusal, relating to the purchase of The Lincoln for the total sales price of
$92,500,000.00, as required pursuant to the terms of Article 36.2 of the Agreement; and
rescinding Resolution No. 2014-28486, that authorized an amendment to the Lease, for the fl ,,..
purpose of developing a miniature golf project at The Lincoln which was never developed.
Attachments
Resolution
"A"Offer Notice from Tenant
Page 313 of 1451
Page 246 of 1502
Exhibit A
FAILURE TO RESPOND TO THIS REQUEST WITHIN THE TIME PERIOD
PROVIDED IN THE LEASE AGREEMENT BETWEEN CITY OF MIAMI BEACH,
FLORIDA AND CLPF — LINCOLN, LLC SHALL CONSTITUTE AUTOMATIC
APPROVAL OF THE MATTERS DESCRIBED HEREIN WITH RESPECT TO
SECTION 36.2 OF SUCH LEASE AGREEMENT.
April 5,2022
Sent Via UPS and Hand Delivery
City of Miami Beach
City Manager
1700 Convention Center Drive
Miami Beach,Florida 33139
City of Miami Beach
City Attorney
1700 Convention Center Drive
Miami Beach,Florida 33139
Bloom&Minsker
Suite 700
1401 Brickell Avenue
Miami,Florida 33131
Attention:Joel N.Iviinskcr,P.A. •
Re: Lease Agreement (as amended and assigned, the "Lease") between CITY OF MIAMI
BEACH, FLORIDA, a municipal corporation duly organized and existing under the laws of
. the State of Florida ("Owner"), and CLPF — Lincoln, LLC, a Delaware limited liability
company (successor in interest to 1691 Michigan Ave Investment LP) ("Tenant"), dated
September 1, 1999, with respect to the property located at 1691 Michigan Avenue, Miami
Beach,Florida(the"Premises");capitalized terms used but not otherwise defined herein have
the meanings given such terms in the Lease.
Dear Sir or Madam:
Pursuant to Article 36.2(a)of the Lease,Tenant hereby notifies Owner that Tenant desires to sell
its leasehold interest in the Premises. This notice constitutes an Offer Notice described in Article
36.2(a)of the Lease. Pursuant to Article 36.2(b)of the Lease,Tenant will not consummate any
offer from a third party to purchase the Premises until the earlier to occur of(i)the expiration of 45
days following Owner's receipt of this Offer Notice,or(ii)receipt by Tenant of a notice by Owner
declining to consummate the Right of First Offer Transaction. In the event that Owner elects not
to consummate the Right of First Offer Transaction,Tenant kindly requests that Owner promptly
provide a written statement to Tenant of such intention by countersigning in the applicable
signature block below.
Page 317 of 1451
Page 247 of 1502
Pursuant to Section 36.2(a)and Exhibit 36.2(a)of the Lease,the terms of this Offer Notice are as
follows:
I. Purchase Price-S92,500,000
2. Closing Date—The closing of the purchase shall take place on a date designated by Tenant,
but in any event not less than sixty(60)days nor more than ninety(90)days following the
date Tenant executes a purchase agreement with Owner. If Owner-declines to be the
purchaser of this Right of First Offer Transaction,Tenant will likely consummate the sale
to a third party at an earlier date.
3. Deed:'Title—At the closing,Tenant shall convey to the Owner(i)all of Tenant's right,title
and interest in and to the Premises by a special warranty deed and(II)all of Tenant's right,
title and interest in an to this Lease by an assignment of lease. The form of such deed and
assignment of lease shall be mutually acceptable to Tenant and Owner but shall not in any
event provide for any representations by Tenant other than a representation that Tenant has
not theretofore transferred or assigned the items being transferred or conveyed thereby and
representations and warranties customarily contained in a special warranty deed, Tenant's
Interest in the Premises and the Lease shall be conveyed to Owner subject to all liens
encumbrances and other matters then affecting the title thereto and any state of facts a
Survey may reveal(but itt all Cases subject to Tenant's obligations under Section 2.2 of the
Lease). Tenant shall also execute all other documents customarily used in real estate
transactions in Miami-Dade County,Florida.
4, Rent: Proralions—At the closing of the purchase,all Rental and/or Impositions shall be
prorated through the date of closing and paid by the party entitled thereto. If Owner
declines to be the purchaser of this Right of First Offer Transaction,the expenses will be
customarily prorated as in other real estate transactions in Miami-Dade County,Florida,
including buyer receiving a credit with respect to Tenant's post-closing obligations under
existing space leases for tenant inducement costs.
5. Expenses—Each;party shall pay its own attorneys'Fees. All title charges;-recording fees,
survey charges and other expenses incurred in connection with.the purchase shall be paid
by Owner. Tenant shall pay transfer taxes(including documentary stamp taxes and Miami-
Dade County surtax)payable in connection with the purchase. If Owner declines to be the.
purchaser of this Right of First Offer Transaction,then in a sale transaction to a third party
purchaser, (i) Tenant shall pay transfer taxes (including documentary stamp taxes and
Miami-Dade County surtax)and the recording fees relating to any title clearing documents
necessary to consummate the sale,Tenant's attorneys'fees,any fees and expenses required
to be paid to Owner for its consent,any brokerage commission due to the broker used in
the transaction,and 50%of escrow fees and(ii)the third party purchaser shall pay fees and
premium for title insurance,survey charges and 50%of escrow fees.
If you have any questions or need additional information,feel free to contact us)at 214.775-7668.
•
[Signature Page Attached)
2
Page 318 of 1451
Page 248 of 1502
Sincerely,
CLP? LINCOLN,LLC,
a Delaware limited liability company
By: Clarion Lion Properties Fund Holdings,L.P.,
a Delaware limited partnership
Its:Sole Member
By: CLPF-Holdings,LLC,
a Delaware limited liability company
Its:General Partner
By: Clarion Lion Properties Fund Holdings REIT,
LLC,a Delaware limited liability company
Its:Sole Member
By: Clarion Lion Properties Fund,LP, •
a Delaware limited partnership
Its: Managing Member
By: Clarion Partners LPF GP,LLC,a
Delaware limited liability company
Its: General Partner
By:. Clarion Partners,LLC,
a New York limited liability company
Its: Sole Member a•= e a
By:
�
Name: jon !b
Title: Authorized Signatory
WITH COPIES TO: •
City of Miami Beach
City Manager
1700 Convention Center Drive
Miami Beach,Florida 33139
City of Miami Beach
City Attorney
1700 Convention Center Drive
Miami Beach,Florida 33139
3
• Page 319 of 1451
Page 249 of 1502
Bloom&Minskcr
Suite 700
1401 Bricke'I Avenue
Miami, Florida 33131
Attention:Joel N. Minsker,P.A.
4
Page 320 of 1451
Page 250 of 1502
The City of Miami Beach, Florida does hereby elect NOT to consummate the Right of First Offer
Transaction set forth in this Offer Notice.
CITY OF MIAMI BEACH,FLORIDA,
a municipal corporation of the State of Florida
By:
Name:
Title: •
•
Page 321 of 1451
•
Page 251 of 1502
EXHIBIT B
PERMITTED BUYER CFO LETTER
Page 252 of 1502
STARWOOD XII MANAGEMENT GP, L.L.C.
2340 Collins Avenue
Miami Beach,FL 33139
May 23,2022
To Whom It May Concern:
I,James Allen,Chief Financial Officer of the Funds of Starwood XII Management GP,L.L.C.,
which manages, directly or indirectly, certain entities comprising the fund known as Starwood
Distressed Opportunity Fund XII("SOF-XII"),hereby certify to my actual knowledge, as of date
hereof that SOF-XII has a net worth in excess of $10 billion USD. Such net worth amount
includes, without limitation, uncalled capital commitments of the investors in SOF-XII in excess
' of$5 billion USD.
Respectfully,
STARWOOD XII MANAGEMENT GP,L.L.C.
James Allen
•
Chief Financial Officer of the Funds
203-422-7711
Email: iallenAstarwood.com
Page 253 of 1502
EXHIBIT C
FORM OF ASSUMPTION OF LEASE AGREEMENT
ASSIGNMENT AND ASSUMPTION OF GROUND LEASE
RECORDING REQUESTED BY:
Mayer Brown LLP
214 North Tryon Street, Suite 3800
Charlotte,North Carolina 28202
Attn: David B.H. Saye, Esq
WHEN RECORDED
RETURN TO:
[Space Above for Recorder]
ASSIGNMENT AND ASSUMPTION OF GROUND LEASE
(1691 MICHIGAN AVENUE)
THIS ASSIGNMENT AND ASSUMPTION OF GROUND LEASE (this "Agreement") is
made and entered into as of , 2022 (the "Effective Date"), by and between CLPF —
LINCOLN, LLC, a Delaware limited liability company ("Assignor"), whose address is c/o Clarion
Partners, LLC, 230 Park Avenue, New York, NY 10169 and , a
("Assignee"),whose address is c/o . All
initial capitalized terms used but not otherwise defined herein shall have the respective meanings given to
them in the Purchase Agreement(as hereinafter defined).
RECITALS
A. Assignor and Assignee have entered into that certain Purchase and Sale Agreement dated
as of (as amended, the"Purchase Agreement"), pursuant to which, among other
things, Assignor has agreed to sell, assign, transfer, convey and deliver to Assignee, and Assignee has
agreed to purchase and accept from Assignor, all right, title and interest of Assignor in that certain
Ground Lease (as defined below) with respect to the real property located at 1691 Michigan Avenue,
Miami Beach, Florida, as legally described on Exhibit A attached hereto and by this reference made a part
hereof(the"Property").
B. Pursuant to the Purchase Agreement, Assignor has agreed to assign to Assignee all of
Assignor's right, title and interest in and to all of the Assignor's leasehold estate under that certain Lease
by and between City of Miami Beach, Florida a municipal corporation, as Owner/Landlord, and Lincoln
Plaza Partners, LLC, a Florida limited liability company, as Tenant, dated September 1, 1999; as
memorialized by that certain Agreement of Lease dated September 1, 1999 and recorded September 3,
Page 254 of 1502
1999 in the Public Records of Miami-Dade County, Florida (the "Official Records") Book 18770, Page
447; as assigned by Tenant to LNR Jefferson, LLC, a Florida limited liability company ("LNR"), in that
certain Assignment and Assumption Agreement recorded June 5, 2001 in Official Records Book 19700,
Page 3095; as consented to in that certain Consent to Assignment and Assumption by City of Miami
Beach Florida recorded May 17, 2001 in Official Records Book 19669, Page 1035; as assigned by LNR
to 1691 Michigan Ave Investments LP, a Delaware limited partnership ("1691 Michigan Ave")(formerly
known as Lincoln Miami Beach Investments, LLC, a Delaware limited liability company) in that certain
Assignment and Assumption of Ground Lease recorded July 20, 2006 in Official Records Book 24738,
Page 4073; as further assigned by 1691 Michigan Ave to Assignor in that certain Assignment and
Assumption of Ground Lease recorded April 15, 2016 in Official Records Book 30039, Page 4656
(collectively, and as heretofore modified, extended, renewed or replaced, the "Ground Lease"), in each
case with respect to the Property, and Assignee has agreed to assume such Ground Lease, as more
particularly set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth
and set forth in the Purchase Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, subject
to the terms and conditions set forth herein and in the Purchase Agreement,hereby agree as follows:
1. Assignment. Upon the terms and subject to the conditions of the Purchase Agreement, and in
reliance upon the representations, warranties, covenants and agreements set forth therein, effective as of
the Effective Date, Assignor hereby sells, assigns, transfers, sets over and delivers unto Assignee, as
lessee, all of Assignor's right, title and interest in and to all of the Assignor's leasehold estate and interest
under the Ground Lease, together with all the right, title, interest and estate of Assignor in and to the
Property and premises demised by and described in the Ground Lease, and all improvements and
appurtenances situated on or used, occupied and enjoyed in connection with the Ground Lease and the
land thereby demised, and all other rights of the Assignor under the Ground Lease("Sale").
2. Representations, Warranties and Covenants. Assignor represents and warrants to Assignee that
Assignor is the owner of the leasehold estate under the Ground Lease (the "Leasehold Estate") and other
interests being assigned hereby, and that such Leasehold Estate and other interests are free and clear of all
liens, charges and encumbrances other than the Ground Lease, the Leases (as defined in the Purchase
Agreement) and those items listed in Exhibit B attached hereto and incorporated herein by this reference
(the "Permitted Exceptions"), and subject to the Permitted Exceptions, Assignor will warrant and defend
title to the Leasehold Estate unto Assignee, its successors and assigns, against any person or entity
asserting any adverse claim by,through or under Assignor,but against none other.
3. Assumption. Assignee hereby accepts the assignment of the Ground Lease, and hereby assumes
and agrees to perform all of the duties and obligations of Assignor under the Ground Lease, and further
agrees to be liable and subject to all conditions and restrictions to which Assignor is subject to under said
Ground Lease.
4. Survival. The provisions of this Agreement shall survive the Closing.
5. Further Assurances. Assignor and Assignee hereby agree and covenant that they will,at any time
and from time to time after the date hereof, upon the reasonable request of the other party hereto,execute
and deliver such further instruments or documents of assignment, conveyance and transfer as may be
reasonably necessary to implement and effect the assignment and assumption of the Ground Lease
contemplated by this Agreement and the Purchase Agreement.
6. City's Required Consents.
Page 255 of 1502
•
•
(a) Rejection of Right of First Offer. On , the Mayor and City Commission
adopted City Resolution No. , attached hereto and made a part hereof as
Exhibit C, whereby the Mayor and City Commission authorized the City Manager to decline, in
writing, the Right of First Offer Transaction, as required pursuant to Section 36.2 of the Ground
Lease, and as further evidenced by the City Manager's letter, attached hereto and made a part
•hereof as Exhibit D.
(b) Consent to Sale to Assignee. Additionally, on _ , pursuant to Resolution No.
, the Mayor and City Commission also approved the Sale, subject to and
conditioned upon the City's successful completion of its evaluation of Assignee, in accordance
with Article 10 of the Ground Lease(the "City's Due Diligence"); and payment to the City of its
reasonable costs incurred in connection with the Sale including, without limitation,
reimbursement of the City's Due Diligence costs. The City's consent to the Sale shall not be
deemed a consent to any subsequent assignment or subletting,nor shall it be deemed or construed
to be a waiver of any of the restrictions or limitations on assignment and subletting set forth in the
Ground Lease.
•
7. Miscellaneous.
(a) This Agreement may not be amended or modified other than by an instrument in writing signed
by Assignor and Assignee and only if consented to by Owner.
(b) This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and
their respective successors and permitted assigns, and nothing herein, expressed or implied, shall
give or be construed to give any person or,entity,other than the parties hereto and such successors
and assigns,any legal or equitable rights hereunder.
(c) This Agreement shall be governed by, and construed in accordance with, the laws of the State of
Florida without giving effect to the choice of law principles thereof, including all matters of
construction,validity and performance.
(d) For the convenience of the parties hereto, this Agreement may be executed in any number of
counterparts, each such counterpart being deemed an original, and all such counterparts shall
together constitute the same agreement.
[REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
• Page 256 of 1502
IN WITNESS WHEREOF, the parties hereto have caused-this Agreement to be duly executed
effective as of the date first above written.
Signed, sealed and delivered ASSIGNEE:
in the presence of:
Name [Print]:
Name [Print]:
STATE OF )
)ss:
COUNTY OF
The foregoing instrument was acknowledged before me this _ day of , 2022 by
, as of . He/She is
personally known to me or has produced as identification.
Print Name:
[NOTARIAL SEAL]
Notary Public, State of
My commission expires:
Serial No., if any:
[Assignment and Assumption of Ground Lease]
Page 257 of 1502
Signed, sealed and delivered ASSIGNOR:
in the presence of:
CLPF—LINCOLN, LLC,
a Delaware limited liability company
Name [Print]:
By:
Name:
Title:
Name [Print]:
STATE OF )
)ss:
COUNTY OF )
The foregoing instrument was acknowledged before me this day of , 2022, by
, as of CLPF — Lincoln, LLC, a Delaware limited liability
company, on behalf of such limited liability company. He/She is personally known to me or has
produced as identification.
•
Print Name:
[NOTARIAL SEAL]
Notary Public, State of
•
My commission expires:
Serial No., if any:
[Assignment and Assumption of Ground Lease]
Page 258 of 1502
Exhibit A to Assignment and Assumption of Ground Lease
Legal Description of the Property
Page 259 of 1502
Exhibit B to Assignment and Assumption of Ground Lease
Permitted Exceptions
Page 260 of 1502
Exhibit C to Assignment and Assumption of Ground Lease
City Resolution No.
[See attached]
Page 261 of 1502
Exhibit D to Assignment and Assumption of Ground Lease
City Manager's Letter Declining the Right of First Offer under the Ground Lease
[See attached]
•
Page 262 of 1502