Resolution 2023-32728RESOLUTION NO. 2023-32728
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, AUTHORIZING THE ADMINISTRATION TO DRAFT
AND EXECUTE THE NECESSARY DOCUMENTATION RELATED TO A
$1,500,000 LOAN BY THE CITY TO MIAMI MUSIC FESTIVAL, INC. DBA MIAMI
BEACH CLASSICAL MUSIC FESTIVAL (FESTIVAL) TO BE FUNDED FROM
THE PROCEEDS OF THE G.O. BOND FOR ARTS AND CULTURE, WHICH
LOAN SHALL ENABLE THE CITY TO MAINTAIN A SECURITY INTEREST IN
THE EQUIPMENT TO BE PURCHASED WITH THE LOAN PROCEEDS AND
ENSURE THE FESTIVAL COMPLIES WITH ITS PUBLIC BENEFIT
REQUIREMENTS.
WHEREAS, on July 20, 2022, the Mayor and Commission approved Resolution 2022-
32261, authorizing a special election, submitting to the electorate of the City of Miami Beach
the question asking whether the City shall be authorized to issue general obligation bonds, not
exceeding $159,000,000, to improve facilities for resiliency of arts and cultural institutions
throughout the City, including museums, performance venues, artistic playgrounds,
senior/cultural centers, botanical garden, aquatic sculpture park, and related artist/workforce
housing; and.
WHEREAS, on November 8, 2022, the voters of the City of Miami Beach approved the
issuance of a General Obligation Bond for Arts & Culture (the "Bond") in the not to exceed
amount of $159 million; and
WHEREAS, the final list of projects included a $3 million allocation for Miscellaneous Arts
& Culture Projects, to be vetted at a future date; and
WHEREAS, on February 1, 2023, the Mayor and Commission adopted Resolution 2023-
32485, approving the Administration's recommendation to allocate up to $1.5 million from the
Miscellaneous Arts & Culture Projects Category to the renovation of the Collins Park Rotunda
as a performing arts venue; and
WHEREAS, projection mapping is a technological innovation that can transform all
surfaces in a given space including walls, stages, buildings, and roads — into interactive display
surfaces for choreographed video presentations and adds a new dimension to musical and
other performances; and
WHEREAS, on February 22, 2023, the Mayor and Commission adopted Resolution
2023-32509 approving the acquisition by the City of projection mapping projectors and related
production equipment ("Equipment") to allow for the transformation of City venues and facilities
into immersive performance experiences (the "Project") utilizing funds up to the amount
remaining in the Miscellaneous Arts & Culture Category, such equipment to be used initially by
Miami Music Festival, Inc. dba the Miami Beach Classical Music Festival (the "Festival") for
programming during public performances and activations, and further, referring the item to the
G.O. Bond Oversight Committee (the "Committee") for its consideration of the amount to be
allocated for such equipment acquisition; and
WHEREAS, the Committee reviewed the Project at its March 30, 2023 meeting and made
a motion recommending funding in the amount of $1.5 million; and
WHEREAS, on March 31, 2023, the Finance and Economic Resiliency Committee (the
"FERC") heard input from staff and various grantees regarding Tranche 1 of the Bond and
considered recommendations made by the Administration; and
WHEREAS, the FERC made several recommendations regarding Tranche 1, including
a suggestion that the Festival should provide a revenue share to the City; and
WHEREAS, on April 28, 2023, the City Commission adopted Resolution No. 2023-32592
accepting the FERC's recommendations and approving Tranche 1 in the not -to -exceed amount
of $101,700,000; and
WHEREAS, on May 17 and June 28, 2023, the first and second public readings of the
bond issuance resolution were held, and the issuance was approved; and
WHEREAS, Tranche 1 of the Bond was issued on July 27, 2023; and
WHEREAS, after considering various factors, including the length of time it would take
for the City to acquire the Equipment, the possible exposure of the City if the Festival's use of
the equipment resulted in any injury to persons or property damage, as well as the additional
need to find suitable storage for the Equipment, the Administration determined that making the
funds available to the Festival to enable it to purchase the Equipment directly would be a better
approach; and
WHEREAS, the Administration concluded the best mechanism for funding the Festival's
purchase of the Equipment would be a loan secured by a lien (i.e., a purchase money security
interest pursuant to Section 679.1031, Florida Statutes) on the Equipment, and;
WHEREAS, the existence of a purchase money security interest will protect the
Equipment against judgment creditors and the City can seek repayment (or repossession of the
Equipment) if the Festival does not comply with its public benefit obligations, and;
WHEREAS, the City could require the payment of the accrued interest (or an
appropriate portion thereof) as a way to secure a revenue share; and
WHEREAS, the loan would be forgivable at the end of fifteen (15) years — the
approximate end of the useful life of the equipment — so long as the Festival has fully complied
with its obligations.
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 authorizes the Administration to draft and finalize documentation
evidencing a $1,500,000 loan with interest of 1.5% per annum by the City to Miami Music
Festival, Inc. dba Miami Beach Classical Music Festival to be funded from the proceeds of the
G.O. Bond for Arts and Culture, which loan shall enable the City to maintain a security interest
in the equipment to be purchased with the loan proceeds and ensure the Festival complies with
its public benefit requirements and allow for a simple mechanism for receiving a revenue share;
and further, authorizes the City Manager and City Clerk to execute such loan documents.
PASSED and ADOPTED this 14 day j of 2023.
'I', .\
-0
Dan Gelber, Mayor
ATTEST:
SEP 2 0 2023
Rafael E. Granado, City Clerk
:.IN,ORP ORATED:1
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
915r2M
0tv Ano—v POW Dote
MIAMI BEACH
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Alina T. Hudak, City Manager
DATE: September 13, 2023
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, AUTHORIZING THE ADMINISTRATION TO
DRAFT AND EXECUTE THE NECESSARY DOCUMENTATION RELATED
TO A $1,500,000 LOAN BY THE CITY TO MIAMI MUSIC FESTIVAL, INC.
DBA MIAMI BEACH CLASSICAL MUSIC FESTIVAL (FESTIVAL) TO BE
FUNDED FROM THE PROCEEDS OF THE G.O. BOND FOR ARTS AND
CULTURE, WHICH LOAN SHALL ENABLE THE CITY TO MAINTAIN A
SECURITY INTEREST IN THE EQUIPMENT TO BE PURCHASED WITH
THE LOAN PROCEEDS AND ENSURE THE FESTIVAL COMPLIES WITH
ITS PUBLIC BENEFIT REQUIREMENTS.
BACKGROUND/HISTORY
At the July 20, 2022 Commission meeting, the Mayor and Commission approved Resolution
2022-32261, authorizing a special election, submitting to the electorate of the City of Miami
Beach the question asking whether the City shall be authorized to issue general obligation
bonds, not exceeding $159,000,000, to improve facilities for resiliency of arts and cultural
institutions throughout the City, including museums, performance venues, artistic playgrounds,
senior/cultural centers, botanical garden, aquatic sculpture park, and related artist/workforce
housing.
On November 8, 2022, the voters of the City of Miami Beach approved the issuance of a
General Obligation Bond for Arts & Culture (the "Bond") in the not to exceed amount of $159
million. The final list of projects included a $3 million allocation for Miscellaneous Arts & Culture
Projects, to be vetted at a future date.
On February 1, 2023, the Mayor and Commission adopted Resolubon 2023-32485, approving
the Administration's recommendation to allocate up to $1.5 million from the Miscellaneous Arts
& Culture Projects Category to the renovation of the Collins Park Rotunda as a performing arts
venue.
Projection mapping is a technological innovation that can transform all surfaces in a given space
including walls, stages, buildings, and roads — into interactive display surfaces for
choreographed video presentations. The use of projection mapping adds a new dimension to
musical and other performances by enabling the event producer to create a visually immersive
Page 604 of 2938
experience for audiences. On February 22, 2023, the Mayor and Commission adopted
Resolution 2023-32509 approving the acquisition by the City of projection mapping projectors
and related production equipment ("Equipment") to allow for the transformation of City venues
and facilities into immersive performance experiences (the "Project"), utilizing funds up to the
amount remaining in the Miscellaneous Arts & Culture Category, such equipment to be used
initially by Miami Music Festival, Inc. dba the Miami Beach Classical Music Festival (the
"Festival") for programming during public performances and activations, and further, referring
the item to the G.O. Bond Oversight Committee (the "Committee") for its consideration of the
amount to be allocated for such equipment acquisition.
The Committee reviewed the Project at its March 30, 2023 meeting and made a motion
recommending funding in the amount of $1.5 million.
On March 31, 2023, the Finance and Economic Resiliency Committee (the "FERC") heard
input from staff and various grantees regarding Tranche 1 of the Bond and considered
recommendations made by the Administration. The FERC made several recommendations
regarding Trwrhe 1, including a suggestion that O)e Festival should provide a revenue share to
the City.
On April 28, 2023, the City Commission adopted Resolution No. 2023-32592 accepting the
FERC's recommendations and approving Tranche 1 in the not -to -exceed amount of
$101,700,000.
On May 17 and June 28, 2023, the first and second public readings of the bond issuance
resolution were held, and the issuance was approved. Tranche 1 of the Bond was issued on
July 27, 2023.
The Administration initially contemplated that the City would purchase the Equipment then enter
into an equipment use agreement with the Festival. After considering various factors, including
the length of time it would take for the City to acquire the Equipment, the possible exposure of
the City if the Festival's use of the equipment resulted in any injury to persons or property
damage, as well as the additional need to find suitable storage for the Equipment, the
Administration determined that making the funds available to the Festival to enable it to
purchase the Equipment directly would be a better approach. Although the City is similarly
providing funds, via grants, to other arts and culture organizations and institutions that will receive
Bond funding to enable them to self -execute their projects, the Project presents some unique
challenges that makes the use of a grant structure undesirable.
First, whereas other projects consist of renovating and/or building new facilities and
incorporating equipment into existing brick -and -mortar facilities (e.g. the Colony Theater, the
Collins Workforce Housing Project and the Bass Museum of Art) or permanently placing works
of art at specific locations (e.g. artistic playgrounds and the aquatic sculpture garden), the
Project consists exclusively of equipment that is not intended to be stationary. Because the
Equipment will not become fixtures within existing facilities, the Administration identified the risk
that an unpaid creditor of the Festival could potentially seek to place a judgment lien on the
Festival's assets. Second, the FERC recommended that the Festival should be allowed to
use the Equipment for commercial purposes subject to the payment of a revenue share to the
C ity.
Page 605 of 2938
Following extensive discussions with the Office of the City Attorney, the Administration
concluded the best mechanism for funding the Festival's purchase of the Equipment would be a
loan secured by a lien (i.e., a purchase money security interest pursuant to Section 679.1031,
Florida Statutes) on the Equipment. Structuring the funding for the purchase of the Equipment
as a loan has several advantages over making the funds available pursuant to a grant
agreement:
First, the existence of a purchase money security interest will protect the Equipment against
judgment creditors.
Second, the City can seek repayment (or repossession of the Equipment) if the Festival does
not comply with its public benefit obligations.
Finally, the City could require the payment of the accrued interest (or an appropriate portion
thereof) as a way to secure a revenue share. If the Festival is unable to pay interest in any
given year due to insufficient net revenue, the City Commission could defer or waive all or a
portion of the interest due for such year. The loan would be forgivable at the end of fifteen (15)
years — the approximate end of the useful life of the equipment — so long as the Festival has
fully complied with its obligations.
._. . •:_ 1 •►
The Administration recommends the adoption of this resolution authori2ing the Administration to
draft and execute documentation evidencing a $1,500,000 loan with interest of 1.5% per annum
by the City to Miami Music Festival, Inc. dba Miami Beach Classical Music Festival to be funded
from the proceeds of the G.O. Bond for Arts and Culture, which loan shall enable the City to
maintain a security interest in the equipment to be purchased with the loan proceeds, ensure the
Festival complies with its public benefit requirements and allow for a simple mechanism for
receiving a revenue share. Pursuant to the terms of the loan agreement, the Festival will be
responsible for storing the Equipment in a secure, climate -controlled space and to procure
insurance for the Equipment satisfactory to the City.
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No
Yes
Strategic Connection
Prosperity - Market and promote Miami Beach as a world class arts, culture, and quality
entertainment destination.
Page 606 of 2938
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ATTACHMENTS:
Description
❑ Resolution
Page 607 of 2938