2004-25506 Reso
RESOLUTION NO. 2004-25506
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, WAIVING, BY 5/7THS VOTE, THE
COMPETITIVE BIDDING REQUIREMENT, FINDING SUCH WAIVER TO
BE IN THE BEST INTEREST OF THE CITY, AND AUTHORIZING THE
MAYOR AND CITY CLERK TO EXECUTE A CONCESSION AGREEMENT
BY AND BETWEEN THE CITY OF MIAMI BEACH AND PENROD
BROTHERS, INC., FOR THE MANAGEMENT AND OPERATION OF A
CONCESSION IN THAT PORTION OF PIER PARK SEAWARD OF THE
FOOTPRINT OF THE PENROD'S RESTAURANT, LOCATED AT ONE
OCEAN DRIVE, MIAMI BEACH, FLORIDA; SAID AGREEMENT HAVING
AN INITIAL TERM OF TWO (2) YEARS, SEVEN (7) MONTHS AND SIX (6)
DAYS, COMMENCING RETROACTIVELY ON OCTOBER 1, 2003, AND
EXPIRING ON MAY 6, 2006, WITH AN OPTION TO RENEW TO RUN
CONCURRENTLY WITH THE TERM OF THAT CERTAIN LEASE
AGREEMENT ENTITLED, "LEASE AGREEMENT BETWEEN THE CITY
OF MIAMI BEACH AND PENROD BROTHERS, INC. FOR A PIER PARK
RESTAURANT FACILITY"; PROVIDED FURTHER THAT SAID
CONCESSION AGREEMENT IS TERMINABLE BY THE CITY WITHOUT
CAUSE AND FOR CONVENIENCE, UPON 180 DAYS WRITTEN NOTICE
TO PENROD'S
WHEREAS, on October 2, 1985, the Mayor and City Commission adopted
Resolution No. 85-18222, approving a Concession Agreement, dated November 7, 1985,
between the City and Penrod Brothers, Inc. (Penrod's) for the rental of beach equipment,
water recreation equipment and food and beverage service at Pier Park, Oceanfront Park,
and Lummus Park, and the respective beachfront areas seaward thereof, for a period of
fifteen (15) years (the Penrod's Concession Agreement); and
WHEREAS, on October 2, 1985, the Mayor and City Commission also adopted
Resolution No. 85-18223, approving a Lease Agreement, dated November 7, 1985,
between the City and Penrod's for the development, construction and operation of a
restaurant and associated uses at Pier Park for a term of twenty (20) years, with two (2)
additional ten (10) year options automatically renewable at Penrod's discretion (the Pier
Park Restaurant Lease Agreement); and
WHEREAS,. the Penrod's Concession Agreement, as amended, was scheduled to
expire on November 4, 2000; however on October 18, 2000, the Mayor and City
Commission, in order to allow for the issuance of a Request for Proposals (RFP) for the
future operation of beachfront concessions on the beaches seaward of Lummus Park,
Ocean Terrace and North Shore Open Space Park, approved an amendment to said
Concession Agreement, providing, in part, for a one year extension; to expire on November
4,2001; and
WHEREAS, said RFP did not include the portion of Pier Park, or the beaches
seaward thereof; and
WHEREAS, said RFP was awarded to Boucher Brothers Miami Beach LLC, as the
successful proposer, and a new concession agreement was approved by the Mayor and
City Commission and became effective on November 5, 2001; and
WHEREAS, the Boucher Brothers' concession agreement did not include the
portion of Pier Park and the beaches seaward thereof formerly addressed within the
Penrod's Concession Agreement, including the immediate area directly adjacent to the Pier
Park Restaurant Lease Premises; and
WHEREAS, Penrod's subsequently entered into discussions with the City and (as it
had always serviced that area through the Penrod's Concession Agreement) requested
that the City permit it to continue servicing patrons in the portion of the Pier Park area east
of its restaurant and the beaches seaward thereof; and
WHEREAS, in response to Penrod's request, the Administration reviewed the
matter and concluded that, as Penrod's was the original developer and long term Lessee of
the upland Pier Park Restaurant, it would be in the best interest of the City to have the
same operator (Penrod's) continue to provide concession services and operations, as were
formerly provided by Penrod's when it controlled the subject area pursuant to the Penrod's
Concession Agreement; and
WHEREAS, the Administration has successfully negotiated the attached
Concession Agreement with Penrod Brothers for the operation and management of a
concession for lounging equipment rentals and food and beverage sales, in the portion of
Pier Park seaward of the footprint of the Pier Park Restaurant Lease Premises; and
WHEREAS, the Concession Agreement is for an initial term of two (2) years, seven
(7) months and six (6) days, commencing retroactively on October 1, 2003, and expiring
on May 6, 2006, with an option to renew to run concurrent with the term of the Pier Park
Restaurant Lease Agreement; and
WHEREAS, said Concession Agreement is terminable for convenience by the City,
at its discretion, and without cause, upon 180 days written notice to Penrod's; and
WHEREAS, the Administration would recommend that the Mayor and City
Commission further waive, by 517ths vote, the competitive bidding requirement, finding such
waiver to be in the best interest of the City, and approve the attached Concession
Agreement.
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 waive, by 5Jihs vote, the competitive bidding requirement, finding such
waiver to be in the best interest of the City, and approve and authorize the Mayor and City
Clerk to execute the attached Concession Agreement by and between the City and Penrod
Brothers, Inc., for the management and operation of a concession in that portion of Pier
Park seaward of the footprint of the Penrod's Restaurant, located at One Ocean Drive,
Miami Beach, Florida; said Agreement having an initial term of two (2) years, seven (7)
months and six (6) days, commencing retroactively on October 1, 2003, and expiring on
May 6, 2006, with an option to renew to run concurrently with the term ofthat certain Lease
Agreement entitled, "Lease Agreement between the City of Miami Beach and Penrod
Brothers, Inc. for a Pier Park Restaurant Facility"; provided further that said Concession
Agreement is terminable by the City without cause and for convenience, upon 180 days
written notice to Penrod's.
D THIS 25th day of Febru
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CIlY OF MIAMI BEACH
CONMISSION ITEM SUMMARY
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Condensed Title:
A Resolution, Waiving, By 5/7ths Vote, the Competitive Bidding Requirement, Authorizing A Concession
Agreement Between The City And Penrod Brothers, For The Operation Of A Concession In Pier Park
Seaward Of The Footprint Of The Penrod Pier Park Restaurant; Commencing Retroactively On October 1,
2003, And Expiring On May 6,2006, With An Option To Renew To Run Concurrently With The Term OfThe
Existing Pier Park Restaurant Lease Agreement; Said Concession Agreement Is Terminable By The City
Without Cause And For Convenience, With 180 Day Notice
A Resolution Authorizing A Third Amendment To The Lease Agreement Between The City And Penrod
Brothers For The Pier Park Restaurant Facility", Located At One Ocean Drive; Said 3rd Amendment
Increasing The Percentage Rent Due To The City And Correcting Scrivener's Errors In Exhibits "A" (Site
Plan And "B" Le al Descri tion To The Lease A reement
Issue:
Shall the City Commission approve 1) the Concession Agreement, and 2) a Third Amendment to the Lease
A reement with Penrod Brothers for the Pier Park Locations?
Item Summa /Recommendation:
1) A Concession Agreement for the rental of lounging equipment and providing food and beverage service in
the Pier Park Concession Area, including the following: Term: Commencing retroactively on 10/01/03, and
ending on 05/06/06, with an option to renew to run concurrent with the term of the Pier Park Restaurant
Lease Agreement. Option: If there is no default, there are two (2) automatically renewable ten (10) year
options, unless Penrod Brothers advises the City, in writing, at least 6 months prior to the expiration of the
preceding term. In the event that the Pier Park Restaurant Lease Agreement option is not exercised by
Penrod Brothers, or the Lease Agreement is otherwise terminated, the Concession Agreement shall
automatically terminate. City Reserves right to terminate for convenience, at its discretion and without cause,
with 180 day notice. Remuneration: City to receive 5.5% of gross receipts from all sales and services within
the Leased Premises and the Pier Park Concession Area, effective October 1, 2003. Rate increases to 6.5%
upon Penrod's achieving a target revenue threshold of $12,818,026 (avg. of FY2002 & FY2003 gross
receipts). Retroactive Remuneration: City will receive retroactive remuneration of 5.5% of Gross Receipts,
for the period from 11/1/01- 09/30/03 totaling $767,533; $400,000 in cash over next 3 months, and $367,533
in capital improvements within the Concession Area and Pier Park (includes public restroom facility and
exterior park access signage). Penrod will also invest a minimum of $500,000, in additional capital
improvements within the Concession Area or the Pier Park Restaurant. In the event an economic downtum
Penrod Brothers may opt to irrevocably forfeit the Concession Area and revert from the proposed 5.5%
(6.5%) rate models, to the 3.5% rate provided in its original Pier Park Restaurant Lease Agreement, and the
new Concession Agreement would be null and void, as would the concurrent Third Amendment to the Lease
Agreement, and Penrod would restore the Park to the City's satisfaction.
2) The 3rd Amendment to Pier Park Restaurant Lease is required to amend the percentage rent provisions
consistent with the Concession Agreement and correct exhibits related to the footprint of Leased Premises.
The Administration recommends that the Ma or and Ci Commission Ado t the Resolutions.
Advisory Board Recommendation:
IN/A
Financial Information:
Source of Amount Account Approved
Funds: 1
D 2
3
4
Finance Dept. Total
Ci Clerk's Office Le islative Trackin
Christina Cuervo/Joe Damien
Sin -Off's: F:\DDHP\$ALL\A.SSEn1 OCEAN.DR\PenrodLeaseAmendConcessionAgreementSUM.doc
Department Director Assistant City Manager
AGENDA ITEM
DATE
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CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
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COMMISSION MEMORANDUM
TO: Mayor David Dermer and DATE: February 25, 2004
Members of the City com-(miSSion
FROM: Jorge M. Gonzalez (l J
City Manager \--
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, WAIVING, BY 5/7THS VOTE, THE COMPETITIVE
BIDDING REQUIREMENT, FINDING SUCH WAIVER TO BE IN THE BEST
INTEREST OF THE CITY, AND AUTHORIZING THE MAYOR AND CITY CLERK
TO EXECUTE A CONCESSION AGREEMENT BY AND BETWEEN THE CITY OF
MIAMI BEACH AND PENROD BROTHERS, INC., FOR THE MANAGEMENT AND
OPERATION OF A CONCESSION IN THAT PORTION OF PIER PARK SEAWARD
OF THE FOOTPRINT OF THE PENROD'S RESTAURANT, LOCATED AT ONE
OCEAN DRIVE, MIAMI BEACH, FLORIDA; SAID AGREEMENT HAVING AN
INITIAL TERM OF TWO (2) YEARS, SEVEN (7) MONTHS AND SIX (6) DAYS,
COMMENCING RETROACTIVELY ON OCTOBER 1, 2003, AND EXPIRING ON
MAY 6, 2006, WITH AN OPTION TO RENEW TO RUN CONCURRENTLY WITH
THE TERM OF THAT CERTAIN LEASE AGREEMENT ENTITLED, "LEASE
AGREEMENT BETWEEN THE CITY OF MIAMI BEACH AND PENROD
BROTHERS, INC. FOR A PIER PARK RESTAURANT FACILITY"; PROVIDED
FURTHER THAT SAID CONCESSION AGREEMENT IS TERMINABLE BY THE
CITY WITHOUT CAUSE AND FOR CONVENIENCE, UPON 180 DAYS WRITTEN
NOTICE TO PENROD'S
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE A THIRD AMENDMENT TO THAT CERTAIN LEASE AGREEMENT
ENTITLED, "LEASE AGREEMENT BETWEEN THE CITY OF MIAMI BEACH AND
PENROD BROTHERS, INC. FORA PIER PARK RESTAURANT FACILITY", FOR
USE OF THE PROPERTY LOCATED AT ONE OCEAN DRIVE, MIAMI BEACH,
FLORIDA; SAID THIRD AMENDMENT INCREASING THE PERCENTAGE RENT
DUE TO THE CITY AND CORRECTING SCRIVENER'S ERRORS IN EXHIBITS
"A" (SITE PLAN) AND "B" (LEGAL DESCRIPTION) TO THE AGREEMENT
ADMINISTRATION RECOMMENDATION:
Adopt the Resolutions
ANALYSIS:
On October 2, 1985, the Mayor and City Commission adopted Resolution No. 85-18222, approving
a Concession Agreement, dated November 7, 1985, between the City of Miami Beach and Penrod
Brothers, Inc. (Penrod's) for the operation and management of beachfront concessions, including
rental of beach equipment, water recreation equipment, and food and beverage service at Pier Park,
Oceanfront Park, and Lummus Park, and the beaches seaward thereof.
Concurrently, on October 2, 1985, the Mayor and City Commission also adopted Resolution
No. 85-18223, approving a Lease Agreement, dated November 7, 1985, between the City and
Penrod's for the development, construction and operation of a restaurant and associated uses at
Pier Park for a term of twenty (20) years, with two (2) additional ten (10) year options automatically
renewable at Penrod's discretion (the Pier Park Restaurant Lease Agreement).
The Concession Agreement, which was amended on August 13, 1986, via Resolution No. 86-18539
(Amendment No.1), on September 4, 1986, via Resolution No. 86-18571 (Amendment No.2), and
April 20, 1988, via Resolution No. 88-19223 (Amendment No.3), was to expire on November 4,
2000. On October 18, 2000, the Mayor and City Commission adopted Resolution No. 2000-24137,
approving Amendment NO.4 to the Concession Agreement, extending its term for a period of one
year (terminating November 4, 2001), to allow for the issuance of a Request for Proposals (RFP) for
the future operation of beachfront concessions on the beaches seaward of Lummus Park, Ocean
Terrace, and North Shore Open Space Park.
On February 21,2001, the Mayor and City Commission authorized the Administration to issue RFP
No. 22-00101 for the management and operation of beachfront concessions limited to the beaches
seaward of Lummus Park, Ocean Terrace and North Shore Open Space Park (the RFP). As a result
of input received from local merchant associations, and the general public at various public
meetings and workshops, and because Penrod's leased the upland portion of Pier Park for a term of
forty (40) years, said RFP was issued without the inclusion of the beaches east of Pier Park and
Oceanfront Park, which had previously been included in the 1985 Concession Agreement with
Penrod's.
Responses to the RFP were received, evaluated and recommendations regarding same were
forwarded to the Mayor and City Commission. On October 17, 2001, the Mayor and City
Commission approved and awarded a new concession agreement to Boucher Brothers Miami
Beach LLC, as the successful proposer, which became effective on November 5, 2001. In
accordance with the provisions of the RFP, the Boucher Brother's concession agreement did not
include the beaches seaward of Pier Park, or those portions of the park east of, and immediately
adjacent to the Pier Park Restaurant Leased Premises formerly addressed under the 1985 Penrod's
Concession Agreement.
Penrod subsequently approached the City and entered into discussions regarding a request to
continue servicing patrons (as it had always serviced that area through the 1985 Concession
Agreement) in the portion of the Pier Park area east of its Pier Park Restaurant, as well as the
beaches seaward thereof. I n response to Penrod's request, the Administration reviewed the matter
and concluded that, since Penrod's was the original developer and long term Lessee of the upland
Pier Park Restaurant, it would be in the best interest of the City to have the same operator
(Penrod's) continue to provide concession services and operations, as were formerly provided by
Penrod's when it controlled the subject area pursuant to the 1985 Penrod's Concession Agreement.
I n light of the foregoing, negotiations were commenced for two separate concession agreements: 1)
one for the beaches seaward of the dunes east of Pier Park, and 2) one for the area east of the Pier
Park Restaurant Leased Premises (Concession Area).
A. BEACHFRONT CONCESSION AGREEMENT:
On November 28, 2001, the Mayor and City Commission adopted Resolution NO. 2001-
24678, waiving by 517ths vote, the competitive bidding requirement and authorizing the City
Administration and City Attomey's Office to negotiate and execute a new beachfront
concession agreement with Penrod's for the management and operation of beachfront
concessions on the beaches seaward of the dunes east of Pier Park, substantially in
accordance with the following terms and conditions. The beachfront concession agreement
provides for an annual concession fee to the City of the greater of:
1) $10,000, which is the maximum that is being charged to concessions east of
privately owned uplands, or
2) 15% of the gross receipts Penrod's derives from its beachfront concession
operations. (Note: food and beverage revenue will continue to be reported and
remitted by Penrod's through its currently existing Lease Agreement for the Pier Park
Restaurant, located at 1 Ocean Drive).
Additionally, all other provisions of the beachfront concession agreement are consistent with
other concession agreements associated with beaches seaward of privately owned upland
locations, and as such will require that Penrod's comply with all aspects of the City's Rules
and Regulations for Beachfront Concession Operations.
B. PIER PARK CONCESSION AGREEMENT:
The Administration has been negotiating with Penrod's on several outstanding issues
including:
the use of area between the footprint of the Pier Park Restaurant and the dune
(Concession Area),
the percentage of revenue to be paid to the City (both retroactively and in the future)
that the Concession Area be completely open and accessible to the public
Said negotiations have been successfully concluded, resulting in the attached Concession
Agreement, for the operation and management of a concession for lounging equipment
rentals and food and beverage sales, in the portion of Pier Park seaward of the footprint of
the Pier Park Restaurant Lease Premises, substantially with the following terms and
conditions:
1) Term:
The Concession Agreement is to run concurrent with the term of the Lease
Agreement for the Pier Park Restaurant Facility. Accordingly, this Concession
Agreement shall be for an initial term of two (2) years, seven (7) months and six (6)
days, commencing retroactively on the first day of October, 2003, and ending on the
sixth day of May, 2006, with an option to renew to run concurrent with the term ofthe
Pier Park Restaurant Lease Agreement.
2) Option:
Provided that the Penrod's as Concessionaire or Lessee under the Pier Park
Restaurant Lease Agreement, is not in default, this Concession Agreement shall
have two (2) ten (10) year options for renewal. Such options shall be considered
automatically renewed unless Penrod's advises the City Manager, in writing, at least
six (6) months prior to the expiration of the preceding term that it does not wish to
exercise the option.
Additionally, in the event that Penrod's, as Lessee under the Pier Park Restaurant
Lease Agreement, does not exercise its option to renew said Lease Agreement, or
said Lease Agreement is terminated, for any reason whatsoever, then this
Concession Agreement shall automatically terminate,.
3) Termination for Convenience:
Notwithstanding the initial term or option terms above, the Concession Agreement is
terminable for convenience by the City, at its discretion, and without cause, upon 180
days written notice to Penrod's.
4) Financials:
The financial issues are addressed as three separate items: i) Financial
remuneration going forward from the commencement date of the Concession
Agreement; ii) Retroactive remuneration (in cash and capital improvements) for the
period from November 5, 2001 to September 30, 2003; and iii) Other capital
improvements to Concession Area andlor Leased Premises.
i) Remuneration:
Penrod's has agreed to remit to the City a rate of 5.5% of gross revenue
derived from all sales and services both within the Lease Premises and the
Pier Park Concession Area, effective as of October 1, 2003. Said rate shall
increase to 6.5% upon evidence of Penrod's achievement of a target
revenue threshold equal to the average of the fiscal year 2002, and fiscal
year 2003 annual gross receipts, said average has been calculated at
$12,818,026.
ii) Retroactive Remuneration:
Penrod's has agreed to the following retroactive remuneration payable to the
City, based on a 5.5% rate of Gross Receipts, for the period from November
1, 2001 through September 30, 2003, totaling $767,533, as bllows:
ii-a) $400,000 in cash, payable to the City in accordance with the
following schedule:
i. $100,000 already received by the City on February 6, 2004
ii. $100,000 no later than April 1 , 2004
iii. $100,000 no later than May 1, 2004
iv. $100,000 no later than May 31,2004
ii-b) The remaining balance of $367,533 is to be applied towards capital
improvements within the Concession Area and Pier Park, including
but not limited to design and construction of an outdoor public
restroom facility to service Pier Park patrons and exterior signage at
each entranceway to the Park to be approved by the City.
iii) Other Capital improvements:
Penrod's will also make capital improvements, in an amount not less than
$500,000, either within the Concession Area or within the Pier Park
Restaurant Leased Premises.
5) Reverter In The Event Of Economic Downtum:
I n the event there is a downturn in the economy that would directly create a financial
situation that could not be overcome using the proposed 6.5% rate model, Penrod's
may, with proper advance notice, to the City, opt to irrevocably forfeit the Concession
Area; revert to payment of its original 3.5% rate provided in its original Pier Park
Restaurant Lease Agreement. The new Concession Agreement entered into with
regard to the Concession Area would be null and void, as would be the concurrent
Third Amendment to the Lease Agreement; Penrod's would return to the legal
description under the original Lease Agreement (which only includes the footprint of
the Pier Park Restaurant); and the Concession Area would be restored by Penrod's
to a satisfactory condition, as determined by the City.
6) Operational and Land Use Issues:
a) No cover may be charged for patrons entering the Concession Area as said
area will remain and continue to be treated as public park property.
b) Amount of foliage, landscaping buffers, and number of lounging beds, chairs,
tables and other barriers has been reduced to ensure that there are clear
paths of access to the Concession Area, as well inclusion of adequate
sign age indicating that the Concession Area is part of Pier Park, and as such
is open and fully accessible to the public, whether or not a member of the
public wishes to partake in the concession services offered by Penrod's or
not. The intent of the parties is to modify, reduce andlor remove obstacles
and barriers that would limit public access and foster the perception of
"privatization" of the Concession Area and to ensure that the Pier Park
property remain accessible to the public from all sides. A detailed site plan is
attached to the Concession Agreement for the City's review and approval,
and Penrod's will be responsible to undertake any and all further corrective
work.
c) Storage areas and storage of equipment along the north property line of the
Park have been addressed and included as part of the aforementioned site
plan.
d) A comprehensive hurricane evacuation plan, including off-site storage of
chairs, tables, lounge chairs, and any and all temporary structures, has been
provided.
e) Signage at all frontages of the Concession Area (Ocean Drive, beachside,
north side by Bently Beach and south side on street end) shall be erected
indicating that it is a public park area and public beach access is available.
f) Consumption of alcohol within the Concession Area will be permitted, but
sale andlor dispensing of alcohol (Le. placement of bars or other dispensing
facilities) within the park will not be permitted.
g) A fee schedule detailing the proposed rates for lounge equipment rentals,
subject to the City's approval, will be submitted by Penrod's.
h) Any special events andlor film and print activities taking place within the
Concession Area will be subject to all applicable permitting requirements,
including the City's Special Event guidelines. Any revenues derived from
said activities, or any other business operations conducted within the
Concession Area, will be considered as part of the gross receipts pursuant to
the Concession Agreement and Lease Agreement, as amended.
7) Eventualitv of Non-Aareement to Business Terms:
In the event that this Concession Agreement is not approved, Penrod's has agreed,
at its sole cost and expense, to restore the area to a condition satisfactory to the
City, as a public park, within a time period established by the City.
8) Lease Aareement Amendment:
In accordance with the financial terms agreed to in the Pier Park Concession
Agreement, the parties need to amend similar terms governing percentage rent in
the Pier Park Restaurant Lease Agreement. The Pier Park Restaurant Lease
Agreement is being concurrently amended as follows:
a) Penrod's shall remit to the City a rate of 5.5% of gross receipts derived from
all sales and services within the Pier Park Restaurant Leased Premises (as
well as the Pier Park Concession Area), retroactively effective as of October
1, 2003. Said rate shall increase to 6.5% upon evidence of Penrod Brother's
achievement of a target revenue threshold equal to the average of the fiscal
year 2002 and fiscal year 2003 annual gross receipts, said average has been
calculated at $12,818,026.
Additionally, the City and Penrod's wish to correct a long-standing scrivener's
error in the exhibits to the Pier Park Restaurant Lease Agreement
referencing the building footprint (site plan) and the legal description, to
correspond with the position of the building as actually constructed, but in no
way materially altering or expanding the square footage andlor size of the
Leased Premises; and
C. LEGAL ANALYSIS:
The City Attomey's Office has carefully scrutinized the attached Concession Agreement and
Third Amendment to Lease Agreement for compliance with the applicable Miami-Dade
County and City Charter provisions governing disposition of park property, as follows:
1) MIAMI-DADE COUNTY CHARTER (ARTICLE 6):
Article 6 of the Miami-Dade County Charter, entitled "Parks, Aquatic Preserves, and
Preservation Lands", generally requires that there shall be no permanent structures
or commercial advertising erected in a public park or private commercial use of a
public park or renewals, expansions, or extensions of existing leases, licenses, or
concessions to private parties of public park property, unless each such structure,
lease, license, renewal, expansion, extension, concession, or use shall be approved
by a majority vote of the voters in a County-wide referendum. Notwithstanding the
preceding sentence, however, Section 6.02 therein, entitled "Restrictions and
exceptions", provides that the provisions of Article 6 (including the aforestated
restrictions) shall not apply to "mini and neighborhood parks"; except that mini or
neighborhood parks may not be leased or sold unless a majority of the residents
residing in voting precincts any part of which is within 1 mile of the subject mini or
neighborhood park authorize such sale or lease by majority vote in an election.
Section 33H-3 of the Miami-Dade County Code defines a "mini park" as one "which
has small passive open space areas typically less than one acre in size... ." A
"neighborhood park" is defined as a park "which is typically from one (1) to ten (10)
acres in size and considered a walk-to facility...."
Pier Park, in its entirety, is approximately between 4-5 acres; the proposed
concession area contemplated herein is a little over an acre. For purposes of Article
6 of the County Charter, Pier Park falls within the County's definition of a
"neighborhood park." Thus, if the transaction was a sale or lease of the area it would
be subject to approval by a vote of residents residing in precincts with one mile. The
Concession Agreement in no way contemplates a sale or lease of Pier Park.
Penrod's is merely being given the right to operate a concession service, providing
beach rental and food and beverage services within a designated concession area in
an approximately one (1) acre portion of the Park. Additionally, the Concession
Agreement is terminable without cause and for the City's convenience, upon 180
days prior notice to Penrod's.
The proposed Third Amendment to Lease Agreement, only has the effect of (i)
memorializing the renegotiated financial terms between the parties, and (ii)
correcting a long standing scrivener's error in the legal description of the property.
No extension or expansion of the Lease Premises is involved, and the said Premises
continue to reflect the boundaries of the Restaurant facility, as constructed pursuant
to the original 1985 Lease Agreement. The 1985 Lease Agreement itself predates
the effective date of Article 6 of the County Charter. Article 6 states that it "shall not
be construed to illegally impair any previously existing valid written contractual
commitments or bid bonds or bonded indebtedness."
2) MIAMI BEACH CHARTER (SECTION 1.03(b)):
Section 1.03(b) of the Miami Beach City Charter, entitled "Alienability of property",
provides that the "the only limitation concerning alienability of City-owned property is
the restriction of the sale, exchange, conveyance or lease of five (5) years or longer
(including option periods) of park, recreation, or waterfront property in the City of
Miami Beach while it is being used for such public purpose, unless such sale,
exchange, conveyance or lease is approved by a majority vote of the voters in a City-
wide referendum.
As the proposed Third Amendment to Lease Agreement does not contemplate any
sale, exchange, conveyance, or lease of the Lease Premises, beyond the rights
conveyed in the 1985 Lease Agreement, Section 1.03(b) of the City Charter does not
apply.
The proposed Concession Agreement does not contemplate a sale, exchange or
lease of the concession area. The sole determination is whether the Concession
Agreement is a "conveyance," as contemplated under Section 1.03(b) of the City
Charter.
The Agreement specifically states that neither a leasehold interest or any other
property interest is intended to be conveyed through the Concession Agreement.
The Agreement merely grants Penrod's the privilege andlor license to provide certain
services consistent with beachfront concession operations, as well as the sale of
food and beverages, upon the concession area. The Agreement further requires
Penrod's to acknowledge that said services must be provided within the context of a
public park and that, as such, the concession area is open and available to the
public. The transaction does not grant Penrod's any sort of property right typically
associated with a fee interest, created by either a sale or exchange of property, or a
leasehold interest. The rights granted by the Concession Agreement are more in
keeping with the rights granted pursuant to the issuance of a license and, like a
license, those rights are revocable upon 180 days notice to Penrod's.
Although Section 1 .03(b) of the City Charter does not define the term "conveyance",
Article II of the City Code, which governs the sale or lease of City property, and.
which sets forth stringent requirements to be complied with prior to the sale andlor
lease of City property (including but not limited to, competitive bidding; Planning
Department analysis, appraisal; and public hearing), does define the term. In Article
II, Section 82-36, which defines what constitutes a "sale" of City property for
purposes of applying the requirements of Article II, a sale is defined as "any
conveyance, transfer, gift, exchange or other transaction in which legal title
passes from the City to any person or entity... ." [Emphasis Supplied). Further,
Section 82-36 also specifically exempts concession agreements from compliance
with the City Code procedures governing salellease of City property. Finally,
Merriam-Webster's Colleoiate Dictionary (9th ed. 1991), defines a "conveyance" as
"an instrument by which title to property is conveyed... .".
Section 1.03(b) of the City Charter is intended to impose an additional level of
scrutiny, beyond the requirements for sale andlor lease of City property in Article II of
the City Code, with regard to the disposition of park and waterfront property in the
City. However, upon reading the definition of the term "conveyance" in Article II,
Section 82-36, as well as Webster's definition of a "conveyance", it is clear that the
type of "conveyance" intended to trigger the requirements of Section 1.03(b) is one
where the intent is that the City convey legal title or a leasehold interest of five (5)
years or more to another entity. The attached Concession Agreement does not rise
to the level prescribed by Section 1.03(b) of the Charter and is similar in nature to the
numerous beachfront concessions which exist and have existed in the past.
The Administration recommends that that the Mayor and City Commission waive by 517ths vote, the
competitive bidding requirements, finding such waiver to be in the best interest of the City, and 1)
approve a Concession Agreement by and between the City of Miami Beach and Penrod Brothers,
Inc., for the rental of lounging equipment and for providing food and beverage service in the Pier
Park Concession Area, Miami Beach, Florida, and 2) approve a third Amendment to the Lease
Agreement between the City of Miami Beach and Penrod Brothers, Inc. forthe restaurant property,
also located at One Ocean Drive, Miami Beach, Florida.
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F:\DDHP\$ALLIASSEl\ 1 OCEAN.DR\PENRODLEASEAMENDCONCESSIONAGREEMENT.MEM.DOC