Resolution 2024-33346 RESOLUTION NO. 2024-33346
A RESOLUTION OF THE MAYOR AND CITY COMMISSION AUTHORIZING
THE INCURRENCE BY THE MIAMI BEACH REDEVELOPMENT AGENCY
(AGENCY) OF UP TO $92,500,000 IN AGENCY INDEBTEDNESS IN
ACCORDANCE WITH THE REQUIREMENTS OF CHAPTER 163, PART III,
FLORIDA STATUTES, AS AMENDED, IN CONNECTION WITH A GRANT
AGREEMENT TO BE ENTERED INTO BY AND AMONG THE AGENCY, MB
MIXED USE INVESTMENT HOLDINGS, LLC AND PUBLIC FINANCE
AUTHORITY SUBSTANTIALLY IN THE FORM ATTACHED TO THIS
RESOLUTION TO FACILITATE THE EXPEDITIOUS DEVELOPMENT OF THE
MIAMI BEACH CONVENTION CENTER HEADQUARTER HOTEL.
WHEREAS, on January 26,1993, Miami-Dade County (the "County") adopted Resolution
No.R-14-93, which, (i) found the City Center RDA to be a "blighted area" within the meaning of
Part III of Chapter 163, Florida Statutes, and (ii) delegated to the City of Miami Beach (the "City'),
pursuant to Section 163.410, Florida Statutes, certain powers conferred upon the County
Commission as the governing body of Miami-Dade County by Part III of Chapter 163, Florida
Statutes, with regard to the Redevelopment Area, so that the City Commission, either directly or
through its duly designated community redevelopment agency, could exercise such powers; and
WHEREAS, On February 3, 1993, the City adopted Resolution No. 93-20709, which
established a community redevelopment agency (the "Miami Beach Redevelopment Agency" or
the "Agency" or"RDA")as an independent legal entity in accordance with Part III of Chapter 163,
Florida Statutes, and declared the members of the City Commission as the members of the
Agency; and
WHEREAS, On February 12, 1993, the City adopted Resolution No. 93-20721, which
adopted the Agency's City Center/Historic Convention Village Redevelopment and Revitalization
Area Plan (the "Redevelopment Plan") for the redevelopment and revitalization of the
Redevelopment Area; and
WHEREAS, the County and the City then approved and entered into the Interlocal
Cooperation Agreement (the "Interlocal Agreement"), executed on November 16, 1993 by which
the County delegated to the City certain redevelopment powers granted by the Act, including but
not limited to the creation of the Redevelopment Area and implementation of the Plan; and
WHEREAS, on November 19, 2014, the City adopted Resolution No. 2014-28835, which
adopted an amendment to the Redevelopment Plan defining the Miami Beach Convention Center
Renovation and Expansion Project to include a new Convention Center Headquarters Hotel (the
"Convention Center Hotel");
WHEREAS, on April 13, 2016, the Mayor and City Commission established the Mayor's
Ad Hoc Blue Ribbon Steering Committee (the "Committee") on the Convention Center Hotel
chaired by Commissioner Ricky Arriola and Vice-chaired by Commissioner Kristen Rosen-
Gonzalez; and
WHEREAS, at the February 14, 2018 City Commission meeting, the Mayor and City
Commission directed the Administration to prepare a Request for Proposals for development of
a Convention Center Hotel on alternative parcel sites; and
WHEREAS, on May 16, 2018, the Mayor and City Commission approved Resolution No.
2018-30310, authorizing the issuance of a Request for Proposals for the Convention Center Hotel
for a lease of the approximately 2.6-acre site located adjacent to the Convention Center on a time
frame to be able to place the referendum item on the November 6, 2018 ballot; and
WHEREAS, on May 17, 2018, the City issued Request for Proposals No. 2018-238-KB
(the"RFP")for the Development of a Convention Headquarter Hotel Adjacent to the Miami Beach
Convention Center; and
WHEREAS, on June 14, 2018, the City received a responsive proposal (the"Miami Beach
Connect proposal") from MB Mixed Use Investment, LLC (the "Developer"), a joint venture
between Turnberry and Terra Group; and
WHEREAS, on July 2, 2018, the Mayor and City Commission approved Resolution No.
2018-30378, authorizing the Administration to negotiate a Development and Ground Lease
Agreement, including a Room Block Agreement (collectively, the "Lease") with the Developer,
with said Lease subject to prior approval by the Mayor and City Commission before the final
execution thereof; and
WHEREAS, on July 25, 2018, the Mayor and City Commission adopted Resolution No.
2018-30425, approving the Lease between the City and the Developer approving the construction
and development of the Miami Beach Convention Center Hotel (or the "Hotel Project") at the site
(the "Site") defined in the Hotel Lease; and
WHEREAS, on November 6, 2018, more than sixty percent (60%) of the voters voting
thereon in a City-wide referendum approved of the Lease as required by Section 1.03(b)(3)of the
City Code; and
WHEREAS, on December 9, 2019, the city approved the Grand Hyatt Hotel brand
pursuant to Section 13.3 of the Hotel lease; and
WHEREAS, on March 4, 2020, the City and the Developer entered into an early access
agreement(the "Early Access Agreement" or"EAA")to grant access to the Developer to the Site
and to certain other areas, including certain portions of the Facility, so that the Developer may
perform certain pre-construction activities(the"Early Work")that would accelerate the timeline for
construction of the Hotel Project; and
WHEREAS, on March 13, 2020, the Hotel developer notified the City it was asserting a
Force Majeure event and an Economic Force Majeure event with respect to the COVID-19
pandemic; and
WHEREAS, on April 14, 2022, pursuant to the Early Access Agreement, the contractor
for the Hotel Developer mobilized on the Site and commenced the initial phases of the Early Work
within the parking lot; and
WHEREAS, on November 16, 2023, the Developer notified the City that it was asserting
an Economic Force Majeure event due to impaired access to financial markets for development
of projects in the United States similar to the Grand Hyatt Hotel project, delaying the Developer's
ability to raise the capital necessary for the full construction of the hotel project; and
2
WHEREAS, on November 17, 2023, LTC 515-2023 advised the Mayor and City
Commission that the Hotel Developer needed additional time to secure the remaining
approximately 12% of their capital raise for the Hotel project; and
WHEREAS, during discussions among RDA staff and the Developer, the Developer
requested a $75 million capital contribution in the form of a grant from the RDA to cover the
approximately 12% financing deficit; and
WHEREAS on March 13, 2024, the RDA Board gave direction to RDA staff to negotiate
with the Developer public benefits and how to close the financial gap without using City funds and
come back with a recommendation on how to deliver the long-delayed hotel; and
WHEREAS, on or around March 25, 2024 the RDA engaged PFM Financial Advisors LLC,
the RDA's financial advisor, to provide financial advisory services related to the proposed
partnership towards the development of a Convention Center Hotel and also engaged Squire
Patton Boggs, the RDA's bond counsel, to provide bond counsel support services; and
WHEREAS, on April 9, 2024, the early site work Certificate of Completion was issued,
making the site available for the commencement of the vertical construction upon site possession
by the Hotel developer; and
WHEREAS, PFM's review of project's financial proforma revealed that the project would
not be able to proceed without the requested capital from the RDA; and
WHEREAS, during several rounds of negotiations, RDA staff and the Developer
discussed several approaches to providing future financial return to the RDA; and
WHEREAS, the grant agreement includes a public benefits package that will extend for
22 years after the hotel's opening and is valued by the Developer at approximately $42.8 million
over that period; and
WHEREAS, the grant agreement includes Subordinated Participation Payments (Annual
Participation Fee) starting at $500,000 beginning five (5) years after opening and continuing for
fifty(50)years and escalating at 3.0% each year and would total approximately$56.4 million over
the 50-year period; and
WHEREAS, the grant agreement also includes a one-time transfer fee of 2.0% of gross
sales proceeds less debt and closing costs upon an arm's length sale to a third party that results
in a change of control; and
WHEREAS, the grant agreement contains provisions ensuring that the grant will be
payable exclusively from available RDA funds, and that no payments shall paid or guaranteed by
the City or the County; and
WHEREAS over the first 30 years, the Convention Center Hotel is estimated to generate
approximately $188 million in lease and surcharge payments to the City, an estimated $751
million in taxes allocated to the RDA, City, and County, and an estimated $514 million in property
taxes supporting the school district and state sales taxes; and
WHEREAS, the grant agreement constitutes indebtedness of the RDA, and pursuant to
Part Ill of Chapter 163, Florida Statutes, and the Interlocal Cooperation Agreement between the
3
RDA, the City, and the County, such indebtedness must be duly authorized by the County and
the City; and
WHEREAS, at its meeting on October 16, 2024, the Miami-Dade County Board of County
Commissioners (the "Board") approved the Sixth Amendment to the Interlocal Cooperation
Agreement between the RDA, City of Miami Beach, and Miami-Dade County, authorizing, among
other things, the execution of the grant agreement by and among the RDA, the Developer, and
Public Finance Authority to facilitate the capital contribution necessary to enable the expeditious
development of the Convention Center Headquarter Hotel project; and
WHEREAS, on October 16, 2024, the Board also approved the form of grant agreement
by and among the RDA, the Developer, and Public Finance Authority, a copy of which is attached
to this Resolution.
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 approve authorize the incurrence by the Miami Beach Redevelopment Agency
(Agency)of up to $92,500,000 in agency indebtedness in connection with the grant agreement to
be entered into by and among the Agency, MB Mixed Use Investment Holdings, LLC and Public
Finance Authority, substantially in the form attached to this Resolution, to facilitate the expeditious
development of the Miami Beach Convention Center Headquarter Hotel.
PASSED AND ADOPTED this .30 day of October 2024.
ATTEST:
NOV Q 5 2024Steven Meiner, Mayor
Rafael E. Granado, City Clerk
(Sponsored by Vice Mayor Alex J. Fernandez and
Commissioner Tanya Bhatt)
's INLOR? ORATED,: APPROVED AS TO
% .. FORM &LANGUAGE
&FOR EXECUTION
CJK� z2)-2r z�
City Attorney Date
4
Resolutions - R7 A
MIAMI BEACH
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Eric Carpenter, City Manager
DATE: October 30, 2024 10:00 a.m. Public Hearing
TITLE: A RESOLUTION OF THE MAYOR AND CITY COMMISSION AUTHORIZING THE
INCURRENCE BY THE MIAMI BEACH REDEVELOPMENT AGENCY (AGENCY)
OF UP TO $92,500,000 IN AGENCY INDEBTEDNESS IN ACCORDANCE WITH
THE REQUIREMENTS OF CHAPTER 163, PART III, FLORIDA STATUTES. AS
AMENDED, IN CONNECTION WITH A GRANT AGREEMENT TO BE ENTERED
INTO BY AND AMONG THE AGENCY, MB MIXED USE INVESTMENT HOLDINGS,
LLC AND PUBLIC FINANCE AUTHORITY SUBSTANTIALLY IN THE FORM
ATTACHED TO THIS RESOLUTION TO FACILITATE THE EXPEDITIOUS
DEVELOPMENT OF THE MIAMI BEACH CONVENTION CENTER
HEADQUARTER HOTEL. JOINT CITY COMMISSION AND RDA
RECOMMENDATION
It is recommended that the Miami Beach City Commission adopt the resolution.
BACKGROUND/HISTORY
City Center Redevelopment Area ("City Center RDA" or "RDA")
On January 26,1993, the Miami-Dade County (the "County") Board of County Commissioners
adopted Resolution No.R-14-93, which, (i) found the City Center RDA to be a "blighted area"
within the meaning of Part III of Chapter 163, Florida Statutes, and (ii) delegated to the City of
Miami Beach (the"City"), pursuant to Section 163.410, Florida Statutes, certain powers conferred
upon the County Commission as the governing body of Miami-Dade County by Part III of Chapter
163, Florida Statutes,with regard to the Redevelopment Area, so that the City Commission, either
directly or through its duly designated community redevelopment agency, could exercise such
powers.
On February 3, 1993, the City adopted Resolution No. 93-20709, which established a community
redevelopment agency (the "Miami Beach Redevelopment Agency" or the "Agency") as an
independent legal entity in accordance with Part III of Chapter 163, Florida Statutes, and declared
the members of the City Commission as the members of the Agency.
On February 12, 1993, the City adopted Resolution No. 93-20721, which adopted the Agency's
City Center/Historic Convention Village Redevelopment and Revitalization Area Plan (the
"Redevelopment Plan"), as amended for time to time, for the redevelopment and revitalization of
the City Center/Historic Convention Village Redevelopment and Revitalization Area (the
"Redevelopment Area").
The County and the City then approved and entered into the Interlocal Cooperation Agreement,
executed on November 16, 1993, by which the County delegated to the City certain
Page 1346 of 2497
redevelopment powers granted by the Act, including but not limited to the creation of the
Redevelopment Area and implementation of the Plan.
In 2014, the County and the City adopted Resolutions R-1110-14 and 2014-28835, respectively,
approving an amendment to the Redevelopment Plan to define the Miami Beach Convention
Center Renovation and Expansion Project (the"Convention Center Project")for the Miami Beach
Convention Center (the "Convention Center"), which includes the construction of a convention
center headquarters hotel (the "Convention Center Hotel"), and to authorize the use of Agency
Trust Fund revenues as a funding source for the Convention Center Project.
See Exhibit A for more detail on the five (5) amendments to the Interlocal Agreement.
Miami Beach Convention Center
Located in the heart of the Redevelopment Area, the newly renovated Convention Center is a
state-of-the-art, flexible special event and exhibition space that welcomes more than 600,000
visitors annually hosting 75-90 regional, national, and international events. Following the recently
completed $640 million renovation, the MBCC is recognized for its excellence as a destination of
choice, creating significant economic impact for the City of Miami Beach and the region. The
MBCC campus encompasses 1.4 million square feet of indoor space, inclusive of four (4)
exhibition halls totaling approximately 500,000 square feet, a grand ballroom of approximately
61,000 square feet, a pre-function area of approximately 18,000 square feet, 84 meeting rooms,
and four (4) junior ballrooms, with approximately nine (9) acres of public green space, an 800-
space rooftop parking facility, and approximately $10 million of public art.
Convention Center Hotel
On November 19, 2014, the City adopted Resolution No. 2014-28835, which adopted an
amendment to the Redevelopment Plan defining the Miami Beach Convention Center Renovation
and Expansion Project to include a new Convention Center Headquarters Hotel (the "Convention
Center Hotel").
On April 13, 2016, the Mayor and City Commission established the Mayor's Ad Hoc Blue Ribbon
Steering Committee (the"Committee") on the Convention Center Hotel chaired by Commissioner
Ricky Arriola and Vice-chaired by Commissioner Kristen Rosen-Gonzalez.
On February 14, 2018, the Mayor and City Commission considered the Committee's report
regarding potential options for a Convention Center Hotel development, including options with
respect to a proposed Hotel's location, size, height, and related issues such as traffic mitigation,
and the like. At the February 14, 2018 City Commission meeting, the Mayor and City Commission
directed the Administration to prepare a Request for Proposals for development of a Convention
Center Hotel on alternative parcel sites.
On May 16, 2018, the Mayor and City Commission approved Resolution No. 2018-30310,
authorizing the issuance of a Request for Proposals for the Convention Center Hotel for a lease
of the approximately 2.6-acre site located adjacent to the Convention Center on a time frame to
be able to place the referendum item on the November 6, 2018 ballot.
On May 17, 2018, the City issued Request for Proposals No. 2018-238-KB (the "RFP") for the
Development of a Convention Headquarter Hotel Adjacent to the Miami Beach Convention
Center.
On June 7, 2018, the City Manager, via Letter to Commission (LTC) No. 323-2018, appointed an
Evaluation Committee (the "Committee").
Page 1347 of 2497
On June 14, 2018, the City received a responsive proposal (the"Miami Beach Connect proposal")
from MB Mixed Use Investment, LLC (the "Developer"), a joint venture between Turnberry and
Terra Group.
On June 21, 2018, the Evaluation Committee convened to consider the responsive proposal and
conduct oral presentations, and favorably recommended proceeding with the Miami Beach
Connect proposal.
On July 2, 2018, the Mayor and City Commission approved Resolution No. 2018-30378,
authorizing the Administration to negotiate a Development and Ground Lease Agreement,
including a Room Block Agreement(collectively, the"Lease")with the Developer, with said Lease
subject to prior approval by the Mayor and City Commission before the final execution thereof.
On July 13, 2018, the Administration submitted the proposed Lease for the Finance and Citywide
Projects Committee's review and input, in accordance with the requirements of Section 82-
37(a)(1) of the City Code.
On July 17, 2018, the Mayor and City Commission approved Agenda Item R7A, approving the
Lease on first reading, following a public hearing.
On July 25, 2018, the Mayor and City Commission adopted Resolution No. 2018-30425,
approving the Lease between the City and the Developer approving the construction and
development of the Miami Beach Convention Center Hotel (or the "Hotel Project") at the site (the
"Site") defined in the Hotel Lease.
On November 6, 2018, more than sixty percent (60%) of the voters voting thereon in a City-wide
referendum approved of the Lease as required by Section 1.03(b)(3) of the City Code.
On December 9, 2019, the city approved the Grand Hyatt Hotel brand pursuant to Section 13.3
of the Hotel lease.
On March 4, 2020, the City and the Developer entered into an early access agreement(the"Early
Access Agreement" or "EAA") to grant access to the Developer to the Site and to certain other
areas, including certain portions of the Facility, so that the Developer may perform certain pre-
construction activities (the "Early Work")that would accelerate the timeline for construction of the
Hotel Project.
On March 13, 2020, the Hotel developer notified the City it was asserting a Force Majeure event
and an Economic Force Majeure event with respect to the COVID-19 pandemic.
On February 4, 2022, in accordance with Sections 2(a) and 11(g) of the Third Amendment to the
Management Agreement with Live Nation, the City provided formal notice to Live Nation advising
of the City's intent to recapture possession of the Rehearsal Room on June 1, 2022, and of the
expected commencement of construction of the Facility Improvements and Hotel Project.
On February 8, 2022, the City hand delivered formal notice to Live Nation confirming the
construction commencement date of June 1, 2022.
On April 14, 2022, pursuant to the Early Access Agreement,the contractor for the Hotel Developer
mobilized on the Site and commenced the initial phases of the Early Work within the parking lot.
On May 25, 2022, the City approved a 5th Amendment to the Management Agreement with Live
Nation to provide for the closure of the Fillmore Miami Beach at the Jackie Gleason Theater during
the construction and development of the Miami Beach Convention Center Hotel; and further
approved a first amendment to the Early Access Agreement between the City of Miami Beach
Page 1348 of 2497
and the Developer to clarify the Developer's existing responsibility to pay for Live Nation's costs
and expenses resulting from the temporary closure of the Fillmore during the Early Work Phase.
On August 31, 2023, the completed Jackie Gleason Theater was turned back over to Live Nation
by the Hotel Developer, and events recommenced in early October 2023.
On April 9, 2024, the early site work Certificate of Completion was issued, making the site
available for the commencement of the vertical construction upon site possession by the Hotel
developer.
Convention Center Hotel Force Majeure and Request for Capital Contribution
On November 16, 2023, the Developer notified the City that it was asserting an Economic Force
Majeure event due to impaired access to financial markets for development of projects in the
United States similar to the Grand Hyatt Hotel project, delaying the Developer's ability to raise the
capital necessary for the full construction of the hotel project. See attached as Exhibit B.
On November 17, 2023, LTC 515-2023 advised the Mayor and City Commission that the Hotel
Developer needed additional time to secure the remaining approximately 12% of their capital raise
for the Hotel project. Attached as Exhibit C.
During discussions among RDA staff and the Developer, the Developer requested a $75 million
capital contribution in the form of a grant from the RDA to cover the approximately 12% financing
deficit. The Developer stated that the project could not proceed without this additional capital
contribution due to increased construction and interest costs. The Developer has noted that the
total project cost has grown from $360 million to approximately$600million. The Developer's pro
forma was unable to generate return thresholds acceptable to equity investors leaving a deficit of
$75 million.
At the March 13, 2024 RDA meeting, the RDA Board gave the following direction:
• RDA staff to discuss/negotiate with the Developer public benefits.
• RDA staff to negotiate with the Developer on how to close the financial gap without using
City funds and come back with a recommendation on how to deliver the long-delayed
hotel.
• RDA staff to come back with proposals and recommendations on additional public benefits
during the May 15, 2024 RDA Board meeting.
The RDA engaged with PFM Financial Advisors LLC ("PFM"), the RDA's financial advisor, to
provide financial advisory services related to the proposed partnership towards the development
of a Convention Center Hotel. These services included review of project financial pro forma,
capacity to complete project, structure of a RDA capital contribution, and potential mechanisms
to recapture the capital contribution. The RDA also engaged Squire Patton Boggs, the RDA's
bond counsel, to provide bond counsel support services. The Developer and RDA executed an
agreement for the Developer to fund all legal and financial advisory expenses related to the
negotiations for the capital contribution.
The Developer has requested that the RDA provide a grant in a par amount of up to $75 million.
As contemplated following RDA Board direction the grant could be funded from available
cashflows generated within the RDA and would be subordinate to the RDA's outstanding Series
2015A Miami Beach Redevelopment Agency Tax Increment Revenue Bonds ("Series 2015A
Bonds") and any bonds issued to refund those bonds. In addition, the RDA would be permitted
to issue other bonds on parity with the Series 2015A Bonds and incur other obligations that would
be on parity with the obligations to make grant payments for the benefit of the Developer subject
to satisfaction of certain debt coverage ratios.As of the end of Fiscal Year(FY) 2023,the amount
Page 1349 of 2497
of outstanding Series 2015A Bonds is $271,875,000. This grant would be funded by projected
annual surpluses from the RDA.
The RDA is budgeted to have a $9.5 million surplus in FY 2024. The RDA is limited in its ability
to utilize any surplus by amendments to the Interlocal Cooperation Agreement with Miami-Dade
County. The intention of this limitation was to provide for early retirement of the Series 2015A
Bonds. This would allow for the subsequent termination (or expiration) of the RDA.
On February 21, 2024, the City Commission approved a referral to the City's Finance and
Economic Resiliency Committee ("FERC")to review the potential refunding of outstanding Series
2015A Bonds.
On April 19, 2024, the RDA Administration presented a refinancing opportunity to achieve debt
service savings.The FERC unanimously approved a recommendation to the RDA to proceed with
the refunding of the Series 2015A bonds. RDA staff has met with County staff to discuss the
opportunity.
On October 16, 2024, the Miami-Dade County Board of County Commissioners approved the
refunding and the Sixth Amendment to the Interlocal Cooperation Agreement between the RDA,
City of Miami Beach, and Miami-Dade County, authorizing, among other things, the form and
execution of the grant agreement by and among the RDA, the Developer, and Public Finance
Authority to move forward for the Convention Center Hotel project.
ANALYSIS
The RDA, City, and County have made significant investments in the development of the
Convention Center campus including the recent renovation of the Miami Beach Convention
Center. The Convention Center serves as a local and regional economic driver. Although the
award-winning Convention Center is already very active, the RDA has an interest in the
Convention Center realizing its full potential by securing events, conferences and tradeshows that
attract visitors from beyond the region, contribute to maintaining or enhancing hotel average daily
rates (ADR) and revenue per available room (RevPar), and enhance the business climate.
Although Miami Beach is home to approximately 21,000 hotel rooms, major events and shows
would be more likely to select the Convention Center as a host venue if a headquarter hotel was
positioned on the Convention Center campus. The 800-room Convention Center Hotel project will
maximize Convention Center activations curated to further support the small business community,
enhance the tourism and hospitality industry, and generate significant resort tax, property tax and
convention development tax revenue.
Over the first 30 years, the Convention Center Hotel is estimated to generate approximately$188
million in lease and surcharge payments to the City, an estimated $751 million in taxes allocated
to the RDA, City, and County, and an estimated $514 million in property taxes supporting the
school district and state sales taxes. This totals over$1.266 billion in payments over the next 30
years.
However, PFM's review of project's financial proforma revealed that the project would not be able
to proceed without the requested capital from the RDA. For additional detail, see PFM's memo
dated May 4, 2024 regarding Convention Center Hotel Project Financing Considerations
(attached as Exhibit D).
Page 1350 of 2497
PFM believes that the return objectives included in the Developer's pro
forma are reasonable and standard for the project-types, and we can
confirm that the Project as currently designed cannot achieve these
return metrics without additional sources of capital in the form of a grant.
Grant Agreement
The RDA's finance team has sought to structure such a grant to maximize the forecasted available
cashflows and be amortized as quickly as possible to minimize the added interest expense from
the Developer's financing, which would be expected to be serviced solely from the available
cashflows of the RDA, based on the priorities described above. The Developer's bonds will be
issued by a conduit issuer of bonds, the Public Finance Authority ("PFA"), and the Developer will
seek a private placement bond issuer (the "Developer Bonds") for the principal amount of $75.0
million. The RDA would pay the issuer of the Developer Bonds or its Trustee via an annual grant
sufficient to cover the principal and interest on the Developer Bonds. The PFA was created for
the purpose of issuing tax-exempt and taxable conduit bonds for public and private entities
nationwide for projects that are important to the community.The PFA is sponsored by the National
Association of Counties, the National League of Cities, the Wisconsin Counties Association, and
the League of Wisconsin Municipalities. The proposed grant agreement with the RDA, PFA, and
the Developer is attached as Exhibit E.
The current estimated structure would start grant payments in FY 2025 and continue for five (5)
years with total estimated payments of$85.6 million. The agreement between the Developer, the
RDA, and the issuer of the Developer Bonds would limit the total grant amount payments
(covering principal and interest) to a maximum $92.5 million. The total grant payments would be
locked in at the time of the issuance of the Developer Bonds. The RDA Financial Projection
including the estimated grant payment schedule is attached as Exhibit F.
The Developer has agreed that the public benefits package and the RDA Subordinated
Participation Payments shall be extended by five (5) years for each $3.0 million more than $86.2
million that the RDA will pay pursuant to the Grant Agreement.
The grant agreement contains provisions ensuring that the grant will be payable exclusively from
available RDA funds, and that no payments shall paid or guaranteed by the City or the County.
The.grant agreement constitutes indebtedness of the RDA, and pursuant to Part III of Chapter
163, Florida Statutes, and the Interlocal Cooperation Agreement between the RDA, the City, and
the County, such indebtedness must be duly authorized by the County and the City.
The RDA Administration met with the developer's team on several occasions to discuss possible
public benefits and certain provisions that could provide future financial return to the RDA as
further described below.
Public Benefits
In addition to the public benefits (lease payments, property tax revenue, etc.)anticipated from the
development of the Convention Center Hotel, the grant agreement includes a public benefits
package that will extend for 22 years after the hotel's opening and is valued by the Developer at
approximately $42.8 million over that period.
Public benefits package as negotiated includes the following:
• Waiver of Junior Ballroom Rental Fees
• Waiver of Conference Room Fees
• Public Safety Office
• Reimbursement for Hotel Rooms During Weather Emergencies
Page 1351 of 2497
• Complimentary Rooms for Official Delegations
• Miami Beach Senior High School (MBSHS) Culinary Arts Program
These public benefits would be accessible to the RDA, City, and County.
Participation Payments
During several rounds of negotiations, RDA staff and the Developer discussed several
approaches to providing future financial return to the RDA. These discussions included
participation in annual net cash flow to the extent that the project is more successful than what is
shown in the pro-forma, a one-time transfer fee, and additional financial considerations.
The final terms include:
• Subordinated Participation Payments (Annual Participation Fee) starting at $500,000
beginning five (5) years after opening and continuing for fifty (50) years and escalating at
3.0% each year. See attached Exhibit G showing the Subordinated Participation
Payments schedule.
o 50% of the Subordinated Participation Payments will be paid by the Developer to
the RDA and the remaining 50% will be paid to the County.
o Subordinated Participation Payments to RDA are subordinate to debt service but
have priority over any distributions of equity.
o Subordinated Participation Payments would total approximately$56.4 million over
the 50-year period with payment starting at$500,000 in payment year 1 and ending
at approximately $2.1 million by year 50. The RDA and County's respective 50%
share of the payment would total approximately $28.2 million over the 50-year
period.
o Developer may buyout the Subordinated Participation Payments by providing a
lump-sum payment determined by a net present value calculation discounting the
remaining Subordinated Participation Payments at the 10-year Treasury rate in
effect at the time of the buyout.
o Any Annual Participation Fee payment due to the RDA after the termination of the
RDA shall be made fifty percent (50%) to the City and fifty percent (50%) to the
County.
• One-time transfer fee of 2.0% of gross sales proceeds less debt and closing costs upon
an arm's length sale to a third party that results in a change of control.
o Any one-time transfer fee payment due after the termination of the RDA shall be
made fifty percent (50%) to the City and fifty percent (50%) to the County.
FISCAL IMPACT STATEMENT
NA
Does this Ordinance require a Business Impact Estimate?
(FOR ORDINANCES ONLY)
The Business Impact Estimate (BIE) was published on . See BIE at:
https://www.miamibeachfl_gov/city-hall/city-clerk/meeting-notices/
FINANCIAL INFORMATION
Page 1352 of 2497
CONCLUSION
The Administration recommends that the City Commission approve the resolution and authorize
the incurrence by the Miami Beach Redevelopment Agency (Agency) of up to $92,500,000 in
agency indebtedness in connection with the grant agreement to be entered into by and among
the Agency, MB Mixed Use Investment Holdings, LLC and Public Finance Authority, substantially
in the form attached to this Resolution, to facilitate the expeditious development of the Miami
Beach Convention Center Headquarter Hotel.
Following approval of the Sixth Amendment to the Interlocal Cooperation Agreement by the RDA
Board and the City Commission, and execution of the grant agreement, the Developer will take
steps toward achieving financial closing and coordinate with staff to meet all requirements to take
possession of the Site. Following possession, the Developer will break ground and commence
vertical construction of the Convention Center Hotel which is anticipated to be completed in 2027
Applicable Area
Citywide
Is this a "Residents Right to Know" item, Is this item related to a G.O. Bond
pursuant to City Code Section 2-17? Project?
No No
Was this Agenda Item initially requested by a lobbyist which, as defined in Code Sec. 2-481,
includes a principal engaged in lobbying? Yes
If so, specify the name of lobbyist(s)and principal(s): Brian May, David Martin, Jeff Sachs, Eric
Singer, and Raphael Andrade
Department
Finance & Economic Development
Sponsor(s)
Commissioner Tanya K. Bhatt
Commissioner Alex Fernandez
Co-sponsor(s)
Page 1353 of 2497
CITY CENTER REDEVELOPMENT AREA (CITY CENTER RDA) OVERVIEW
On January 26,1993, Miami-Dade County (the "County") adopted Resolution No.R-14-93, which, (i)
found the City Center RDA to be a "blighted area" within the meaning of Part III of Chapter 163,
Florida Statutes, and (ii)delegated to the City of Miami Beach, pursuant to Section 163.410, Florida
Statutes, certain powers conferred upon the County Commission as the governing body of Dade
County by Part III of Chapter 163, Florida Statutes, with regard to the Redevelopment Area, so that
the City Commission, either directly or through its duly designated community redevelopment
agency, could exercise such powers.
On February 3, 1993, the City adopted Resolution No. 93-20709, which established a community
redevelopment agency (the "Miami Beach Redevelopment Agency" or the "Agency") and declared
the members of the City Commission as the members of the Agency.
On February 12, 1993, the City adopted Resolution No. 93-20721, which adopted the Agency's City
Center/Historic Convention Village Redevelopment and Revitalization Area Plan (the
"Redevelopment Plan")for the redevelopment and revitalization of the Redevelopment Area.
The County and the City then approved and entered into the Interlocal Cooperation Agreement,
executed on November 16, 1993 by which the County delegated to the City certain redevelopment
powers granted by the Act, including but not limited to the creation of the Redevelopment Area and
implementation of the Plan.
The 332-acre City Center/Historic Convention Village Redevelopment and Revitalization Area
established in 1993, provided the funding mechanism to foster the development of a new convention
hotel development (ultimately the Loews hotel) within proximity of the Miami Beach Convention
Center and established the necessary link between the City's many core area civic, cultural and
entertainment uses in order to create the fabric of a true urban downtown.
First Amendment
The Board of Miami-Dade County Commissioners through Resolution No. R-889-03, and the City
Commission, through Resolution No. 2003-25241, also approved an amendment to the Interlocal
Agreement to delegate to the City the power to implement the community policing initiatives.
Second Amendment
The Board, through Resolution No. R-958-04, and the City Commission, through Resolution No.
2004-25560, also approved a second amendment to the Interlocal Agreement whereby (i) the
County, City,and Agency agreed that.:the Agency would remit one and one-half percent(1,5%)of the
Tax Increment Revenue paid to the Agency for said fiscal year to the County to defray administrative
costs for oversight and processing Agency related items and 1.5% as a contribution to the City. After
debt service and all other obligations related to the bonds or future indebtedness issued by the
Agency and approved by the County was satisfied for the fiscal year, and (ii) the County approved
the Agency's issuance of refunding bonds in an amount not to exceed a principal amount of
$101,090,000 to refinance all or a portion of the outstanding principal amount of bonds issued with
respect to the Redevelopment Area.
Page 1354 of 2497
Third Amendment
The Board, through Resolution No. R-512-14, and the City Commission, through Resolution No.
2014-28835, also approved an amendment to the Redevelopment Plan and Interlocal Agreement to
provide a share of funding for the Miami Beach Convention Center("Convention Center")Renovation
and Expansion Project:
Amended the Plan to include the Convention Center Renovation and Expansion Project and further
amended the Interlocal Agreement as follows:
• Extended the life of the Redevelopment Area from 2023 to 2044;
• Authorized the issuance of tax increment revenue bonds in one or more series by the RDA in an
amount not to exceed $430,000,000 for purposes of refunding current outstanding debt, funding
eligible community redevelopment project costs, including up to $275 million for the Convention
Center Renovation and Expansion Project, and any reserves and costs of issuance;
• Provided for an ongoing adequate operating and maintenance subsidy for the Miami Beach
Convention Center, in addition to the existing $4.5 million per year and annual year-end revenue
sharing that the City currently receives from Convention Development Taxes (CDT)through 2048
—as of 2026 if there are sufficient CDT funds, these are repaid to the RDA with CDT funds;
• Provided for ongoing funding of City operations in the RDA with a cap in growth of 3% or CPI
whichever is less;
• Limited capital projects to previously appropriated projects and the following capital projects:
Bass Museum Space Interior Expansion, Convention Center Lincoln Road Connectors, 17th St
Improvement Penn to Wash, and Lincoln Road from Washington Avenue to Lennox Avenue
• Established that from FY 2023 until FY 2044,the County will receive a refund of City Center Agency
operating expenses based on its proportion of revenues contributed to the Trust Fund; and
• Established that from FY 2015 through FY 2022, any funding not used for debt service and
operating expenses will go into a fund to be used for shortfalls and eventually prepayment of debt
and from FY 2023 any remaining funding will be used to extinguish debt early.
Fourth Amendment
• Provided the $6,914,221 million in funding for the Convention Center project to address the
impacts from Hurricane Irma and the August 2017 rain bomb. These events impacted the facility
and created delays which severely challenged the City's ability to deliver the facility at the level
required by Art Basel Miami Beach and have created costs impacts.
Due to these delays, Hurricane Irma had a direct impact of at least three (3) weeks on the
Convention Center construction including one (1)week of storm preparation and demobilization,
one (1) week of storm clean-up, loss of power and additional delays due to a widely displaced
workforce returning to work two to three weeks after the storm, Also significant was the impact
of Hurricane Irma on the work being performed by Florida Power&Light ("FPL") on the electrical
upgrades needed for the renovated Convention Center.
• Provided that the refund of City Center Agency operating expenses to the County (see above)
begin in FY 2018 instead of FY 2023 and for the City to receive a similar pro-rata share
Page 1355 of 2497
between FY 2018 and FY 2022. This is approximately $5-6 million per year initially for the
County and $6-7 million per year for the City.
• Provided for the City and County to each contribute, from the pro rata distribution of excess Trust
Fund revenues, $1.5 million a year of year to the County for beach re-nourishment between FY
2018 and 2023.
Under the proposed amendment, the City funding for beach re-nourishment will be limited to
projects in Miami Beach, while the County share may be used within Miami Beach and adjacent
jurisdictions.
• Provided discretion to the City to fund,from excess Trust Fund revenues, up to an additional$20
million for the Lincoln Road capital project. Any such amounts would serve to supplement the
$20 million previously appropriated for the Lincoln Road Project from excess RDA tax increment
revenues.
Fifth Amendment
• The Fifth Amendment to the RDA Interlocal Cooperation Agreement was approved by Miami-
Dade County on March 15, 2022 via Resolution No. 256-22 and was executed April 5, 2022 via
Resolution No. 2022-32014. The Fifth Amendment allows for$27.1 million in excess RDA Trust
Fund revenues to be accessed by the City to fund the City's financial obligation related to the
Final Settlement Agreement for the Miami Beach Convention Center (MBCC) expansion and
renovation project. Additionally, the Fifth Amendment clarified that the County's portion of the
beach renourishment funds ($1.5 million), outlined in the Fourth Amendment, can be used for
beach renourishment activities at any beaches in the County(not just within Miami Beach).
Page 1356 of 2497
I T! P 5 TOA1/'=T. S OFF-ICE
iVIB Mixed Use Investment,LLC
3310 Mary Street
Suite 302
Miami, Florida 33133
VIA UPS OVERNIGHT
November 16,2023
City Manager
City of Miami Beach, Florida
1700 Convention Center Drive,4th Floor
Miami Beach, Florida 33139
Re: Development and Ground Lease Agreement (the "Lease") by and between the CITY OF MIAMI
BEACH,FLORIDA,a municipal corporation(the"City")and MB MIXED USE INVESTMENT,LLC,
a Florida limited liability company(the"Lessee");capitalized terms not defined in this letter shall have
the meanings ascribed such terms in the Lease
Dear City Manager,
Economic and political conditions and events have materially impaired access to financing markets by
developers for development of projects in the United States similar to the Hotel Project. Despite our diligent
efforts to obtain financing, such conditions are delaying, hindering and preventing Lessee's ability to obtain a
Construction Loan Commitment for the full construction cost of the Hotel Project, which as a result of current
economic conditions has increased to nearly $600 Million. Lessee remains fully committed to cornrnence
construction and complete the Hotel Project,and Lessee has in fact already invested more than $20 Million of
its own equity to make the site shovel ready for the commencement of vertical construction as soon as suitable
financing has been obtained. Therefore,while we are hoping that the current liquidity crisis will not significantly
delay obtaining a Construction Loan Commitment for the full construction cost of the Hotel Project,Lessee must
notify the City of a claim of any Economic Force Majeure Event within twenty-one(21)days or forever forfeit
the right to make such claim. Therefore,in accordance with the requirements of the Lease,Lessee hereby notifies
the City that Lessee is asserting an Economic Force Majeure Event due to such conditions.Lessee shall diligently
attempt to resolve or otherwise mitigate such delay, shall diligently attempt to remove,resolve,or otherwise seek
to mitigate such delay and will keep the City advised with respect thereto.
Sincerely,
MB MIXED USE INVESTMENT,LLC,a
Florida limited liability company
By: MB Mixed Use Inv- tment
Holdings Mem L a/f lgrida limited
liability co . asr/:.J/•wi
AY
vid i la rti ,M nager
cc: City Attorney
City of Miami Beach, Florida
1700 Convention Center Drive,4th Floor
Miami Beach,Florida 33139
GLG 4553-6278-7347 v6
Page 1357 of 2497
RA I A/V\ EACH
OFFICE OF THE CITY MANAGER
LTC# 515-2023 LETTER TO COMMISSION
TO: Honorable Mayor Dan Gelber and Members of the City Commission
FROM: Aline T. Hudak, City Maria, -I
DATE: November 17, 2023
SUBJECT: Convention Center Hotel Project—Grand Hyatt Miami Beach
The purpose of this Letter to the Commission ("LTC") is to advise you on the status of the Grand
Hyatt Convention Center Hotel (Hotel)project.
The Developer, MB Mixed Use Investment, LLC, (MBMU)has notified the City that additional time
is necessary to secure the remaining 12% of its construction loan commitment for the $600 Million
project. Accordingly, the Developer has reserved its right, in accordance with the terms of the
Development and Ground Lease Agreement, to extend the date of formal possession.
The Developer has invested over$20 Million of its own equity in the project and is fully committed
to pursuing the remaining financing with all deliberate speed to enable it to commence vertical
construction as soon as it achieves financial closing.
In the meantime, construction site work continues pursuant to the Early Access Agreement to
ensure the property is shovel ready when the developer is able to secure the remaining 12% of
financing required. The foundation permit for the project has been issued and the vertical permit
will be issued by early 2024. The Early Access Agreement work is 95% complete with only minor
scopes of work remaining within the rights-of-way which will be prosecuted after the Art Basel Fair
ends. The Jackie Gleason Theater work was completed and turned over to Live Nation late August,
and events have recommenced since early October.
For more information, please contact me or Maria Hemandez via cellphone at (786) 371-3168 or
at mariahernandez@miamibeachfl.gov.
RD I MH
Page 1358 of 2497
pfrn May 4, 2024
Memorandum
To: City of Miami Beach
Miami Beach Redevelopment Agency
From: PFM Financial Advisors LLC
RE: Convention Center Hotel Project Financing Considerations
Introduction
The following memo is intended to inform and support the City of Miami Beach (the"City")and the Miami
Beach Redevelopment Agency(the"RDA")on certain financing considerations related to the Convention
Center Hotel project (the "Project"). The Project contemplates an 800-key hotel to be developed under
a Development and Ground Lease Agreement(the"Lease")that was executed on July 31,2018 between
the City and MB Mixed Use Investment, LLC (the"Developer").
The capital raise associated with the Project is currently estimated to be $589 million.' The Developer
intends to finance the capital raise with a construction loan of$400M (68%) and equity. The Developer
has indicated that it cannot raise sufficient equity to finance the balance of the Project and has requested
a$75 million grant from the RDA to fund a budget gap.
PFM Review
PFM has reviewed the Developer's pro-forma analysis to confirm the operating assumptions that support
the analysis. From an operating perspective,the pro-forma assumptions with respect to hotel occupancy,
Annual Daily Rate (ADR) and revenue per available room (RevPAR) are consistent with data for
comparable hotels as of year-end 2022, with the application of those general assumptions in Year 1 of
operation in 2027. The pro-forma assumes an annual growth rate of approximately 4% to the ADR
through stabilization in 2030 with occupancy at approximately 80% at stabilization which is consistent
with occupancy levels pre-COVID. These assumptions are generally consistent with what other
convention hotels are experiencing. "Many convention centers reported strong booking pace for 2023,
which supported demand and strong RevPar for associated hotels"2.
The market environment for the development of"Big Box" hotels (hotels that are 800+ keys) has been
challenged in recent years due to increased interest rates and inflationary pressures on construction
costs. There are multiple examples of local communities that have aided in the financing of hotel projects,
'"MBCC Hotel Financial Model-3.21.24"
2"U.S.Big Box Hotel Trends&Recovery"-JLL Hotels Research,November 2023
1 of 3
Page 1359 of 2497
11111
including the Savannah-Georgia Convention Center Authority for a hotel that will complement the
expansion of their convention center,the Indianapolis City-County Council to support an 800-room Signia
by Hilton Indianapolis and the Georgia World Congress Center Authority to support a 1,000-room Signia
by Hilton Atlanta.3 PFM is also aware of proposed convention center hotels requiring financial assistance
in Raleigh, NC and New Orleans, LA.
PFM has independently reviewed the pro-forma provided by the Developer to analyze the projected return
requirements through metrics such as the Stabilized Yield on Cost, Levered IRR and Cap Rate, among
others. The Developer has stated that the limiting factor in its ability to raise equity for the Project is the
equity yield,which is calculated as the projected equity distributions for the annual period of April 2029—
March 2030 divided by the total equity contribution (also referred to as the cash on cash return). PFM
believes that the return objectives included in the Developer's pro forma are reasonable and standard for
the project-types. The Developer will not be able to achieve financial close without some form of financial
assistance, as the cash on cash return is projected to be 12.6% in FY2030.
The Developer has requested that the RDA provide a grant in a par amount of up to $75 million, which
will enable the Developer to meet its stated equity yield requirement. The grant could be funded from
available cashflows generated within the RDA and would be subordinate to the RDA's outstanding 2015
Bonds. PFM has also reviewed the plan of finance provided by the developer's investment banking team
and finds it to be suitable for this type of investment.The City's finance team would seek to structure such
a grant to be paid solely from available cashflows and be amortized as quickly as possible in order to
minimize the added interest expense from their financing, which would also be serviced solely from the
available cashflows of the RDA.
Additional Considerations
The RDA has been successful in negotiating for financial consideration over time in return for providing
a grant. In addition to in-kind benefits, the RDA will receive subordinated participating payments from
annual pet operating income and a transaction fee under a.capital event.
Conclusion
The City previously entered into a Lease with the Developer for an 800-key hotel. Market conditions,
including rising interest rates and inflationary pressures on construction costs, have resulted in a
challenging environment to develop a Big Box hotel without public subsidy. The Developer has requested
a $75 million grant from the RDA in order to plug a budget gap in its capital raise. The Developer has
"2023: A Year of New Challenges and Opportunities for Hoteliers"—Hotel&Leisure Advisors
2 of 3
Page 1360 of 2497
41111
agreed to provide financial considerations over time to the RDA in return for a potential grant to achieve
financial close.
3 of 3
Page 1361 of 2497
GRANT AGREEMENT
by and among
MIAMI BEACH REDEVELOPMENT AGENCY,
MB MIXED USE INVESTMENT HOLDINGS, LLC;
and
PUBLIC FINANCE AUTHORITY
for
MIAMI BEACH CONVENTION CENTER HOTEL
Dated as of , 2024
Pag1 f497
ARTICLE I
DEFINITIONS 3
ARTICLE II
GRANT
Section 2.01. Grants 6
Section 2.02. Condition Precedent to Release of Grant Funds 7
ARTICLE III
CONVENTION CENTER HOTEL
Section 3.01. Compliance with Lease Agreement 7
Section 3.02. Public Benefit Commitments 7
Section 3.03. No Warranty by Agency 7
ARTICLE IV
AUTHORIZATION FOR GRANT; AGENCY PAYMENTS
Section 4.01. Agency Authorization of Grant; Potential Reduction to Grant Amount 7
Section 4.02. Payment Obligations of Agency 8
Section 4.03. Security for Payments 8
Section 4.04. Issuance of Additional Parity Obligations or Additional Agency Bonds 8
Section 4.05. Issuance of Refunding Bonds 9
Section 4.06. Further Disclaimer 9
Section 4.07 Semi-Annual.Installment Payment Schedule 9
ARTICLE V
REPORTING 9
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01. [RESERVED] 9
Section 6.02. The Parent's Representations, Warranties and Covenants 9
Section 6.03. The Issuer's Representations, Warranties and Covenants 12
Section 6.04. The Agency's Representations, Warranties and Covenants 13
ARTICLE VII
INDEMNIFICATION OF ISSUER; LIMITED OBLIGATION OF ISSUER
Section 7.01. Indemnification 15
Section 7.02. Non-Liability of Issuer 17
Section 7.03. Issuer's Performance 18
ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.01. Event of Default 19
Pag2497
Section 8.02. Remedies 19
Section 8.03. Liens, Security Interests 19
ARTICLE IX
GENERAL PROVISIONS
Section 9.01. Non-liability of Agency Officials 19
Section 9.02. Force Majeure 20
Section 9.03. Notices 20
Section 9.04. Time 20
Section 9.05. Entire Agreement 20
Section 9.06. Amendment 20
Section 9.07. Waivers 21
Section 9.08. Indemnification of Agency 21
Section 9.09. Additional Indemnification of Agency, City and County 21
Section 9.10. Severability 21
Section 9.11. Compliance With State and Other Laws 22
Section 9.12. [RESERVED] 22
Section 9.13. Public Entity Crimes Notice 22
Section 9.14. Incorporation by Reference 22
Section 9.15. Order of Precedence 22
Section 9.16. Counterparts 22
Section 9.17. Independent Contractor 22
Section 9.18. Retention of Records/Audit 23
Section 9.19. Non-Merger 24
Section 9.20. Exemption of City 24
Section 9.21. Parties to Agreement; Successors and Assigns 24
Section 9.22. Venue; Applicable Law 24
Section 9.23. Recordation 24
Section 9.24. Further Assurances 24
Section 9.25. Construction 25
Section 9.26. Headings 25
Section 9.27. Further Authorizations 25
Section 9.28. [RESERVED] 25
Section 9.29. Survival 25
Section 9.30 Estoppel
Certificate 25
•
EXHIBIT A LEGAL DESCRIPTION OF HOTEL PARCEL
EXHIBIT B IN-KIND PUBLIC BENEFIT COMMITMENTS
GRANT AGREEMENT
THIS GRANT AGREEMENT (this "Agreement") is made as of this day of
, 2024 (the "Effective Date"), among the MIAMI BEACH REDEVELOPMENT
AGENCY, a public agency and body corporate created pursuant to Section' 163.356, Florida
Statutes (the "Agency"), MB MIXED USE INVESTMENT HOLDLNGS, LLC, a Florida
limited liability company (the "Parent") and PUBLIC FINANCE AUTHORITY, a unit of
2
Pag3497
government and a body corporate and politic of the State of Wisconsin(the "Issuer"), pursuant to
the authority of Section 66.0301, 66.0303 and 66.0304, Wisconsin Statutes, as amended (the
"Act").
WITNESSETH :
WHEREAS, the Issuer is authorized by the Act to issue revenue bonds to finance a project,
including but not limited to, any capital project; and
WHEREAS, the Act further authorizes the Issuer to expend the proceeds of such revenue
bonds to make grants for the purpose of supporting economic activities; and
WHEREAS, the Agency has been duly created and established to transact business and
exercise powers under and pursuant to Community Redevelopment Act of 1969, as amended,
being Chapter 163,Part III, Florida Statutes,as amended(together with other applicable provisions
of law, the "Redevelopment Act"), in order to achieve the purposes of redevelopment under the
Redevelopment Act; and
WHEREAS, all requirements of law have been complied with in the creation of the
Agency,the adoption and amendment of a redevelopment plan(the"Redevelopment Plan")under
the Redevelopment Act for that portion of the City of Miami Beach (the "City") described in the
Redevelopment Plan and known as the "City Center/Historic Convention Village Redevelopment
and Revitalization Area" (the "Redevelopment Area") and the creation and funding of the "City
Center/Historic Convention Village Redevelopment and Revitalization Trust Fund" (the "Trust
Fund") in accordance with the Redevelopment Act; and
WHEREAS, Miami-Dade County, a political subdivision of the State of Florida, whose
address is 111 NW 1st Street, Miami,Florida 33128, Attention: County Mayor(the"County")and
the City adopted Resolutions R-1110-14 and 2014-28835, respectively, approving an amendment
to the Redevelopment Plan to define the Convention Center Renovation and Expansion Project
(the "Convention Center Project") for the Miami Beach Convention Center (the "Convention
Center"), which includes the construction of a convention center headquarters hotel (the
"Convention Center Hotel"), and to authorize the use of Agency Trust Fund revenues as a funding
source for the Convention Center Project; and
WHEREAS, the Agency has served as a prominent funding mechanism for the
transformative renovation of the Convention Center, which is an important economic asset of the
entire County and the City; and
•
WHEREAS, completion of the Convention Center Hotel as part of the Convention Center
Project is essential to ensuring the viability of the Convention Center as a destination for high-
profile and high-economic-impact events and to ensuring the success of the Redevelopment Area
and implementation of the Redevelopment Plan; and
WHEREAS, the City, through Resolution 2018-30425, approved a development and
ground lease agreement (the "Lease Agreement") between the City and MB Mixed Use
3
Pag4497
Investment, LLC, a Florida limited liability company [owned and controlled by]t Parent (the
"Developer") for the development and operation of the Convention Center Hotel contemplated by
the Redevelopment Plan at the location defined in the Lease Agreement (the "Hotel Parcel"); and
WHEREAS, the Developer has timely completed the design of the Convention Center
Hotel in accordance with the Lease Agreement, and the Developer has also timely completed the
preparation of the Hotel Parcel for vertical construction, including the demolition and
reconfiguration of existing buildings,at a total cost of more than$25 Million funded by Developer
equity, which amount exceeds, by more than two-and-a-half times, the Initial Lessee Minimum
Equity Contribution required by the Lease Agreement; and
WHEREAS, the Hotel Parcel is ready for the commencement of construction of the
Convention Center Hotel upon the closing of construction financing; and
WHEREAS, due to widespread market conditions, the cost to construct the Convention
Center Hotel has increased by more than $200 Million since the award of the Lease Agreement;
and
WHEREAS, upon closing of all debt and equity for the construction of the Convention
Center Hotel, there will remain a funding gap of approximately $75 Million in present value that
cannot be met reasonably by current debt and equity markets; and
WHEREAS, Section 163.370(2)(c)(3) of the Redevelopment Act authorizes the Agency to
support the construction of "public areas of major hotels that are constructed in support of
convention centers, including meeting rooms, banquet facilities, parking garages, lobbies, and
passageways" (collectively, "Public Areas"); and
WHEREAS, the Convention Center Hotel will include Public Areas, such as, without
limitation, more than 100,000 square feet of meeting space, and the cost to construct the Public
Areas is budgeted to exceed $75 Million in present value; and
WHEREAS, the Issuer will finance a grant (the "Grant") to be made by the Issuer to the
Parent to finance the portion of the costs of the Convention Center Hotel attributable to the Public
Areas, through the issuance of tax exempt and/or taxable revenue bonds to be issued by the Issuer
(the"Series 2024 Bonds"); and
WHEREAS, in order to secure the repayment of the Series 2024 Bonds, the Agency shall
be obligated to pay to the Issuer from revenues deposited into the Trust Fund (the "Trust Fund
Revenues") in the manner and subject to the priority of payment and availability of Trust Fund
Revenues set forth herein, the amounts set forth in the Semi-Annual Installment Payment
Schedule, as described herein; and
To be revised prior to execution to reflect final organizational structure reflective of financing arrangements and tax
considerations (e.g., indirect ownership as a result of new intermediate entities for preferred equity or mezzanine
financing)in accordance with the Lease Agreement.
4
Page f 8497
WHEREAS,the Convention Center Hotel is located within the territorial boundaries of the
City, the County, and the Redevelopment Area; and
WHEREAS, the Issuer, based on the representations of the Agency and the Parent, but
without independent investigation, has found and determined that the financing of the Convention
Center Hotel will promote significant economic, cultural and community development
opportunities, including the creation and retention of employment, the stimulation of economic
activity, and the promotion of the Convention Center and businesses within the Redevelopment
Area; and
WHEREAS, the execution and delivery of this Agreement, and the issuance of the Series
2024 Bonds pursuant to a Trust Indenture dated as of , 2024 (the "Bond Indenture") by and
between the Issuer and [TRUSTEE]2, as trustee (the "Bond Trustee"), pursuant to the provisions
of the Act, have been in all respects duly and validly authorized by a resolution (the "Bond
Resolution") duly adopted and approved by the governing board of the Issuer; and
WHEREAS, the execution and delivery of this Agreement has been approved by the
Agency pursuant to its Resolution No. -2024(the"Agency Resolution")adopted on ,
2024; and
WHEREAS, the Agency, City, and County entered into an interlocal cooperation
agreement on November 16, 1993, as subsequently amended (the"Interlocal Agreement"),which,
among other matters, authorizes the Agency to issue new Agency Indebtedness (as defined by the
Interlocal Agreement) subject to the approval of the Board of County Commissioners of the
County; and
WHEREAS, the obligation of the Agency to make the Payments (as defined below)
pursuant to this Agreement constitutes "Agency Indebtedness" under the Interlocal Agreement,
and the execution and delivery of this Agreement has been approved by the County pursuant to its
Resolution R- -24(the"County Resolution")adopted on ,2024 and by the City pursuant
to its Resolution No. 2024- , adopted on , 2024.
NOW, THEREFORE, in consideration of the mutual undertakings and agreements herein,
and for $10.00 and other valuable consideration, the receipt and sufficiency of which are
acknowledged, the Agency, the Parent and the Issuer represent, warrant, covenant and agree as
follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the meaning set opposite each:
"Act"means Section 66.0301, 66.0303 and 66.0304, Wisconsin Statutes, as amended.
Bond Trustee to be identified prior to this Agreement's execution.
5
PagM046497
"Affiliates" means, regarding any Person, any other Person directly or indirectly
Controlling, Controlled by or under common Control with such Person. When used in reference
to Developer,for so long as Parent(or any of its Affiliates)holds an interest, directly or indirectly,
in Developer, "Affiliate" shall include any Person Controlling, Controlled by, or under common
Control with Parent.
"Agency" has the meaning set forth in the first paragraph of this Agreement. Upon the
expiration(sunset)of the Miami Beach Redevelopment Agency,the term"Agency"as used in this
Agreement shall refer to the successor(s)-in-interest of the Agency; provided, however, that any
obligation of Parent to indemnify the City as a successor in interest to the Agency (including,
without limitation,the obligations set forth in Section 7.01)after the expiration of the Agency shall
apply only to the extent that the Agency is sued or suffers a Liability in its own name (and shall
not apply to suits or other Liabilities suffered by the City in its own name).
"Agency Bonds" means the tax increment revenue bonds heretofore and hereafter issued
by the Agency pursuant to the Agency Bonds Resolution from time to time payable from and
secured by Trust Fund Revenues,as may be outstanding from time to time,including the Agency's
Tax Increment Revenue and Revenue Refunding Bonds, Series 2015A (City Center/Historic
Convention Village) outstanding as of the Effective Date.
"Agency Bonds Resolution" means Resolution No. 619-2015 adopted by the Board on
October 14,2015,as such resolution may be amended or supplemented from time to time,together
with any resolutions that may hereafter be adopted by the Board for the issuance of Agency Bonds.
"Agency Resolution" means Resolution No. - adopted by the Board on
[DATE], 2024, as such resolution may be amended or supplemented from time to time.
"Agreement" means this Grant Agreement dated , 2024, by and among the Issuer,
the Parent and the Agency,as may be amended or supplemented from time to time pursuant to this
Agreement.
"Annual Fee" shall have the meaning as defined in Section 3.02(a) of this Agreement.
"Annual Fee Commencement Date" shall have the meaning as defined in Section 3.02(a)
of this Agreement.
"Anticipated Total Payment Amount" shall have the meaning as defined in Section 4.02 of
this Agreement.
"Authori-ed Signatory" means any officer, director or other Person designated by
resolution of the Board of Directors of the Issuer(whether such resolution is adopted in connection
with the issuance of the Series 2024 Bonds or otherwise) or by the Issuer's Bylaws as an
`Authorized Signatory' empowered to, among other things, execute and deliver on behalf of the
Issuer this Agreement, the Indenture, and the Series 2024 Bonds.
"Available Cash Flow" shall have the meaning as defined in Section 3.02(b) of this
Agreement.
6
Page f 497
"Board" means the board of the Agency, being the chairperson and the other members of
the board.
"Bond Indenture"means the Trust Indenture dated as of , 2024, by and between the
Bond Trustee and the Issuer, as may be amended or supplemented from time to time as permitted
by the provisions of the Bond Indenture.
"Bond Trustee"means [to comej3, as trustee for the Bonds.
"Bonds" means the Series 2024 Bonds and any refunding bonds that may be issued from
time to time pursuant to the terms of the Bond Indenture.
"City" means the City of Miami Beach,Florida.
"Code" means the Internal Revenue Code of 1986, as amended from time to time, and the
regulations promulgated thereunder.
"Completion of Construction" shall have the meaning set forth in the Lease Agreement.
"Control," "Controlling" or "Controlled" shall mean the possession, directly or
indirectly,of the power to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities,by contract, by governmental requirements or
otherwise, or the power to elect in excess of fifty percent(50%)of the directors,managers,general
partners or other Persons exercising similar authority with respect to such Person (it being
acknowledged that a Person shall not be deemed to lack Control of another Person even though
certain decisions may be subject to "major decision"consent or approval rights of limited partners,
shareholders or members, as applicable). For avoidance of doubt, if a Person(for purposes of this
definition, "Person A") cannot elect in excess of fifty percent (50%) of the directors, managers,
general partners or other Persons exercising similar authority with respect to a Person(for purposes
of this definition, "Person B")without the consent or approval of another Person or Persons, then
Person A shall not be deemed to Control Person B.
"Convention Center Hotel" shall have the meaning set forth in the recitals.
"Convention Center Hotel Project" shall mean the construction of an approximately 800-
room convention center hotel, inclusive of Public Areas, on the Hotel Parcel within the
Redevelopment Area being financed in part with the Grant and more particularly described in the
Lease Agreement.
"County" means Miami-Dade County, Florida_
"Debt Service" means, as of any applicable date of determination, the sum of all scheduled
interest payments on any then-existing secured financing obtained by Parent or its direct or indirect
subsidiaries, including, without limitation, Developer, in respect of the Convention Center Hotel
Project, calculated at the non-default rate.
3 Bond trustee to be identified prior to this Agreement's execution.
7
Pag 8497
"Debt Service Coverage Ratio" means, as of any applicable date of determination, the
meaning assigned such term(or equivalent term) in any then-applicable secured financing(s) (and
if more than one,the seniormost)obtained by Parent or its direct or indirect subsidiaries, including,
without limitation, Developer, in respect of the Convention Center Hotel Project, and if there is no
such term (or equivalent term) in any such financing, then such term shall mean, as of any
applicable date of determination, a ratio in which(a) the numerator is Net Operating Income as of
the applicable date of determination, and (b) the denominator is the aggregate amount of Debt
Service that would be payable during the succeeding twelve (12)-month period.
"Debt Service Requirement" shall have the meaning set forth in the Agency Bonds
Resolution.
"Deferred Fee Amount" shall have the meaning as defined in Section 3.02(b) of this
Agreement.
"Developer" means MB Mixed Use Investment, LLC, a Florida limited liability company.
Upon the assignment of the Lease Agreement to a successor tenant under the terms thereof, the
term"Developer" as used in this Agreement shall mean such successor tenant.
"Direct Grant" means the grant made by the Agency, if any, directly to the Parent in
accordance with Section 2.01 hereof.
"DSC Threshold" shall have the meaning as defined in Section 3.02(a) of this Agreement.
"Effective Date" shall have the meaning as defined on the first page hereof.
"Emergency Equity" shall have the meaning as defined in Section 3.02(a) of this
Agreement.
"Equity Participant" shall have the meaning as defined in Section 3.02(a) of this
Agreement.
"Executive Director"means the Executive Director of the Agency.
"Fee Payment Period" shall have the meaning as defined in Section 3.02(a) of this
Agreement.
"Fiscal Year"means the period commencing on October 1,and continuing to and including
the next September 30, or such other annual period as may be prescribed by law or by the Agency -
in accordance with law.
"Funded Grant Amount" shall have the meaning as defined in Section 4.01 of this
Agreement.
"Grant"means the grant of the portion of the Series 2024 Bond proceeds by the Issuer to
the Parent applied for the costs related to the Public Areas of the Convention Center Hotel as
authorized pursuant to the terms of this Agreement.
8
Pagp f§497
"Grant Funds Holdback" shall have the meaning as defined in Section 4.01 of this
Agreement.
"Grant Funds Reserve" shall have the meaning as defined in Section 4.01 of this
Agreement.
"Hotel Distributions" shall have the meaning as defined in Section 3.02(a) of this
Agreement.
"Hotel Operator" shall have the meaning set forth in the Lease Agreement.
"Hotel Parcel" shall mean the real property described on Exhibit A attached hereto.
"In-Kind Public Benefits" shall have the meaning as defined in Section 3.02(e) of this
Agreement.
"Issuer" shall have the meaning set forth on the first page hereof.
"Issuer Indemnified Persons" means collectively, (i) the Sponsors, (ii) the Members and
(iii) each and all of Issuer's, the Sponsors' and the Members' respective past, present and future
directors, board members, governing members, trustees, commissioners, elected or appointed
officials, officers, employees, Authorized Signatory, attorneys, contractors, subcontractors, agents
and advisers (including, without limitation, counsel and financial advisers) and each of their
respective heirs, successors and assigns.
"Joint Exercise Agreement" means the Amended and Restated Joint Exercise of Powers
Agreement Relating to the Public Finance Authority, dated September 28, 2010 by and among
Adams County, Wisconsin, Bayfield County, Wisconsin,Marathon County, Wisconsin, Waupaca
County, Wisconsin and the City of Lancaster, Wisconsin, as such agreement may be amended
from time to time.
"Lease Agreement" means the Development and Ground Lease Agreement dated July 31,
2018,by and between the City, as lessor, and the Developer, as lessee, pursuant to which the City
is leasing the Hotel Parcel to the Developer.
"Loan to Value Ratio" means, as of any applicable date of determination, the meaning
assigned such term(or equivalent term)in any then-applicable secured financing(and if more than
one, the seniormost) obtained by Parent or its direct or indirect subsidiaries, including, without
limitation, Developer, and if there is no such term (or equivalent term) in any such financing, then
such term shall mean,as of any applicable date of determination,a ratio in which(a)the numerator
is equal to the outstanding principal amount of then-existing secured financing obtained by Parent
or its direct or indirect subsidiaries, including, without limitation, Developer, and (b) the
denominator is the fair market value of the Convention Center Hotel (for avoidance of doubt,
including, without limitation, the value of Developer's leasehold estate under the Lease
Agreement), as determined by an appraisal reasonably acceptable to the Agency, plus any cash
collateral or letter of credit provided to the applicable lender as additional security for the
financing.
9
Pag6497
"LTV Threshold" shall have the meaning as defined in Section 3.02(a) of this Agreement.
"Management Agreement" shall have the meaning set forth in the Lease Agreement.
"Maximum Annual Debt Service" shall mean, at any time and with respect to all of the
Agency Bonds,the greatest Debt Service Requirement in the then current or any succeeding Fiscal
Year.
"Maximum Annual Payments" means, at any time and with respect to the Payments and
Parity Obligations,the greatest amount of payments required to be made by the Agency in the then
current or any future Fiscal Year.
"Maximum Total Payment Amount" shall have the meaning as defined in Section 4.02 of
this Agreement.
"Member" means the parties to the Joint Exercise Agreement and any political subdivision
that has been designated in the past, or from time to time in the future is designated, as a member
of the Issuer pursuant to the Joint Exercise Agreement.
"Net Operating Income" means, as of any date of determination, all income and revenues
Developer receives or that is due to Developer of any nature, including, but not limited to, rents,
additional rents(including,without limitation any common area maintenance charges),room rents,
parking revenues, proceeds of rent loss and/or business interruption insurance, performance test
cure payments under the Management Agreement, and vending machine receipts, all on a trailing
twelve (12) month period, less the customary and necessary expenses incurred of operating the
Convention Center Hotel during the trailing twelve (12) month period which are paid by or on
behalf of Developer or accrued by Developer(for avoidance of doubt, excluding capital expenses,
Debt Service, any payment or expense which is reimbursable by insurance or by any third party,
any non-cash charges such as depreciation and amortization, and federal, state or local income or
similar taxes).
"Opening of the Convention Center Hotel"means the date that the Hotel is actually opened
to the public for paying guests after the issuance of all licenses, permits, certificates, approvals,
and/or permissions required for the operation of the Convention Center Hotel under applicable
laws;provided, however, that such date shall be no later than one hundred twenty(120) days after
the date that the Convention Center Hotel receives its certificate of occupancy. Parent shall
provide the Agency and the County with written notice of the date of the Opening of the
Convention Center Hotel within fifteen(15) days of the date thereof.
"Operating Expenses" means:
(a) operating expenses of the Convention Center Hotel Project other than payments
made to Developer, Parent or Affiliates of either;
(b) wages and benefits paid and payable to the Hotel Operator's full time or part-time
on-site or off-site management employees and full or part-time non-management employees; and
10
Page f497
(c) management fees, at prevailing market rates, provided, any management fees
payable to Developer,Parent or Affiliates of Developer or Parent shall not be included for purposes
of calculating Operating Expenses in the event Available Cash Flow is insufficient to cover
Operating Expenses and pay amounts due to the Agency hereunder at any time; provided, further,
however, that the management fees payment to the Hotel Operator shall in no event be excluded
from such calculation of Operating Expenses except to the extent that such fees exceed market
fees for the applicable brand.
"Parent"shall have the meaning as defined on the first page hereof. Upon the assignment
of this Agreement to a Successor by Parent or by any Successor, the term "Parent" as used in this
Agreement shall be deemed to include any Successor to whom such assignment is made.
"Parent Representative" means David Martin or Aly-khan Merali, or any other person
authorized by Parent to act on behalf of the Parent with respect to this Agreement.
"Parity Obligations"means additional obligations of the Agency hereafter incurred by the
Agency which are payable from Trust Fund Revenues on a parity with the obligation of the Agency
to make the Payments.
"Payments" means the payments that the Agency is obligated to make to the Issuer
hereunder from the Trust Fund Revenues as provided in Section 4.02 of this Agreement.
"Person" means any corporation, unincorporated association or business, limited liability
company; business trust, real estate investment trust, common law trust, or other trust, general
partnership, limited partnership, limited liability limited partnership, limited liability partnership,
joint venture, or two or more persons having a joint or common economic interest, nominee, or
other entity, or any individual (or estate of such individual); and shall include any governmental
authority.
"Pledged Funds"shall have the meaning set forth in the Agency Bonds Resolution.
"Priority Debt" shall have the meaning as defined in Section 102(a) of this Agreement.
"Project Budget" shall mean $589,372,907.00, which represents the total estimated cost
to develop and construct the Convention Center Hotel Project, inclusive all soft costs, hard costs,
and financing costs.
"Public Areas Factor" shall have the meaning as defined in Section 4.01(a) of this
Agreement.
"Public Benefits" shall have the meaning as defined in Section 3.02 of this Agreement.
"Redevelopment Act" means the Community Redevelopment Act of 1969, as amended,
being Chapter 163, Part III, Florida Statutes, as amended, and other applicable provisions of law.
"Redevelopment Area" means the "City Center/Historic Convention Village
Redevelopment and Revitalization Area" located within the City and found by the City to be a
11
Pag 2497
"blighted area"within the meaning of the Act and as described in the Redevelopment Plan, which
geographic boundaries may be changed from time to time as permitted by the Redevelopment Act
"Redevelopment Plan" means the redevelopment plan for the Redevelopment Area
originally adopted by the Agency by Resolution No. 128-93 adopted on February 12, 1993 and
approved by the City by Resolution No. 93-20721 adopted on February 12, 1993 and by the County
by Resolution No. 317-93 adopted on March 30, 1993, as the same has been and may be amended
from time to time.
"Redevelopment Projects" means the particular community redevelopment projects
undertaken by the Agency pursuant to the Redevelopment Plan within the Redevelopment Area in
accordance with the Redevelopment Act, including the Convention Center Hotel Project.
"Semi-Annual Installment" shall have the meaning as defined in Section 4.02 and
scheduled as set forth in Exhibit C of this Agreement.
"Semi-Annual Installment Due Date"shall have the meaning as defined in Section 4.02 of
this Agreement.
"Series 2024 Bonds"means the Public Finance Authority[BOND CAPTION] Series 2024,
being issued pursuant to the terms of the Bond Indenture.
"Sponsor"means the National League of Cities, the National Association of Counties, the
Wisconsin Counties Association, the League of Wisconsin Municipalities, and any other Person
that holds itself out, or is identified by the Issuer, as an organization sponsoring the Issuer.
"Subordinate Debt" shall have the meaning as defined in Section 3.02(a) of this
Agreement.
"Successor"shall mean any assignee of Parent and any successor to such assignee.
"Transfer"shall have the meaning set forth in the Lease Agreement.
"Transfer Fee" shall have the meaning as defined in Section 3.02(d)of this Agreement.
"Trust Fund" means the "City Center/Historic Convention Village Redevelopment and
Revitalization Trust Fund" established by Ordinance No. 93-2836 adopted by the City on
February 24, 1993, and by Ordinance No. 93-28 enacted by the County on April 27, 1993, in
accordance with the Redevelopment Act.
""frust Fund Revenues" means the revenues derived from the Redevelopment Area and
received by the Agency for deposit into the Trust Fund pursuant to Section 163.387, Florida
Statutes, as amended, Ordinance No. 93-2836 adopted by the City on February 24, 1993, as
amended from time to time,including Ordinance No.2014-3901 adopted by the City on November
8,2014,and Ordinance No. 93-28 enacted by the County on April 27, 1993, as amended from time
• to time, including Ordinance No. 14-133 enacted by the County on December 16, 2014.
12
Pag 8497
"Underbudget Amount" shall have the meaning as defined in Section 4.01(b) of this
Agreement.
Other capitalized terms not defined in this Article shall have the meanings assigned to them
elsewhere in this Agreement.
All pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine, neuter, singular or plural, as appropriate. The words "herein," "hereof," "hereunder,"
"hereinafter," and words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or Subsection hereof. The terms "include" and "including" and words
of similar import shall each be construed as if followed by the phrase "without limitation". This
Agreement will be interpreted without interpreting any provision in favor of or against either party
by reason of the drafting of such provision.
ARTICLE II
GRANT; TERM OF AGREEMENT; ASSIGNMENT TO PURCHASERS OF HOTEL
Section 2.01. Grants. Subject to the terms and conditions set forth herein, the Issuer
hereby agrees to pay to the Parent, solely from the proceeds of the Series 2024 Bonds, the Grant
in the amount of$75 Million,which shall be disbursed to Parent by Bond Trustee as contemplated
in Section 4.01 and used by the Parent solely for the purpose of financing a portion of the costs of
constructing the Public Areas of the Convention Center Hotel. The remaining proceeds of the
Series 2024 Bonds in excess of the amount required to fund the Grant shall be applied to pay the
costs of issuance for the Series 2024 Bonds. Notwithstanding the foregoing,prior to the sale of the
Series 2024 Bonds, the Agency, at its sole option, may elect to fund a portion of the Grant from
legally available funds then held by it by providing a written notice to the Issuer and the Parent of
such amount. Such amount shall be paid by the Agency directly to the Trustee or another financial
institution acceptable to the Parent prior to the issuance of the Series 2024 Bonds to be held in
escrow until the Series 2024 Bonds are issued, at which time such amount shall be disbursed to
the Parent as contemplated in Section 4.01 (and for the avoidance of doubt, shall be included in
the Grant Funds Holdback in the same manner as the bond proceeds). The amount paid by the
Agency("Direct Grant") shall reduce, dollar for dollar,the amount of the Grant to be funded from
the Series 2024 Bonds. For example, in the event that the Direct Grant is $7,000,000.00, then the
amount funded from the Series 2024 Bonds would be reduced to$68,000,000, as further described
in Section 4.01.
Section 2.02. Condition Precedent to Release of Grant Funds and to Agency's
Obligation to make the Payments. Prior to the release of the Grant proceeds by the Issuer to the
Developer,Agency shall have confirmed that the"Possession Date"as described in Section 4.1(b)
of the Lease Agreement has occurred, or is occurring simultaneously, as evidenced in writing by
the City to the Developer. Furthermore,notwithstanding any other provision herein to the contrary,
Agency's obligation to make the Payments shall not become effective until (a)Agency shall have
confirmed that the Possession Date has occurred or is occurring simultaneously with the
effectiveness of such obligation and (b) the Series 2024 Bonds have been issued and delivered.
13
Pag4497
Section 2.03. Term of Agreement; Construction Commencement. The term of this
Agreement shall run from its execution until the date all obligations of Parent to the Agency
pursuant this Agreement shall have been fully satisfied. On or before the date that is nine (9)
months from the Effective Date, the Parent or the Developer, as appropriate, shall: (a) obtain all
development approvals and building permits needed for construction of the Convention Center
Hotel and submit the same to the County; and (b) shall commence construction of the Convention
Center Hotel and thereafter diligently pursue the construction of the Convention Center Hotel until
completion thereof. For purposes of this Agreement, "commence construction" shall mean the
later of: (i) the filing of the notice of commencement under Florida Statutes, Section 713.13; or
(ii)the visible start of construction work on the Convention Center Hotel, including on-site utility,
excavation of soil stabilization work (but specifically excluding any necessary testing,
environmental remediation or ceremonial groundbreaking). In order to meet the definition of
"commence construction"the filing of the notice of commencement and visible start of work must
occur after the Parent or Developer has secured the necessary building permits for the work and
issued the notice to proceed to its prime contractor for the improvements.
Section 2.04. Required Assignment of this Agreement. For so long as any obligations
of Parent to the Agency, the City, and the County expressly set forth in this Agreement remain
unsatisfied, in connection with any Transfer of the Convention Center Hotel Project (i.e., the
leasehold estate under the Lease Agreement), or any Transfer of Parent's interests in Developer,
(i) the Parent shall provide written notice to the Agency, the City, and the County of the Transfer
and(ii)the Parent and/or Developer shall cause the transferee(s)to assume all obligations of Parent
under this Agreement (or, in the case of a Transfer of less than 100% of Parent's interests, shall
cause the transferee(s) to execute a joinder to this Agreement in form and substance reasonably
acceptable to the Agency) in accordance with the provisions of Section 9.21 of this Agreement.
Any failure to comply with the provisions of this Section 2.04 shall constitute a default under the
Lease Agreement, and if such failure continues for a period of forty-five (45) days after written
notice thereof by City to Developer specifying such failure, such default shall be an Event of
Default under the Lease Agreement, but, for avoidance of doubt, shall be subject to all rights of
lenders under the Lease Agreement, including, without limitation, the rights to receive notice of
default, opportunity to cure and new lease rights.
ARTICLE HI
CONVENTION CENTER HOTEL
Section 3.01. Compliance with Lease Agreement. The Parent hereby agrees that it shall
cause the Developer (a) to comply with all provisions of the Lease Agreement; and (b) to take all
other actions necessary so that Parent is in full compliance with all provisions of this Agreement.
Section 3.02. Public Benefit Commitments. As an inducement to the Agency to enter
into this Agreement for the benefit of the Convention Center Hotel, and to further the goals of the
Agency, the Parent shall provide, or cause the Developer or Hotel Operator, as applicable, to
provide, the following public benefits (the "Public Benefits") with respect to the Convention
Center Hotel:
14
Pagg497
(a) Commencing on the fifth(5`h)anniversary of the Opening of the Convention
Center Hotel (the "Annual Fee Commencement Date") and continuing for a period of fifty
(50) years (the "Fee Payment Period") thereafter, the Parent shall pay to the Agency and
the County an annual participation fee in the amount of$500,000.00 (the "Annual Fee")
with fifty percent (50%) of the Annual Fee being paid to the Agency4 and fifty percent
(50%) of the Annual Fee being paid to the County. The Annual Fee will escalate by three
percent (3%) on the first anniversary of the Annual Fee Commencement Date (i.e., the
sixth (6th) anniversary of the Opening of the Convention Center Hotel) and annually
thereafter. Parent shall pay the Annual Fee in equal monthly installments, in advance,with
the amount of the monthly installment to be determined by dividing the applicable Annual
Fee into twelve (12). Payment of the Annual Fee shall not be subordinate to, and, for the
avoidance of doubt, the Agency's and County's right to receive the Annual Fee shall be
superior to, the rights of any equity participants in Developer, Parent, any Affiliate of
either, any other so-called "equity participant" or "capital participant" in the Convention
Center Hotel or any successors in interest of any of the foregoing (collectively, "Equity
Participants")to receive distributions of earnings, capital or otherwise out of, or associated
with, the Convention Center Hotel (collectively, "Hotel Distributions"); provided,
however, that payment of the Annual Fee shall remain subordinate to the payment of
management fees to the Hotel Operator even in the event that the Hotel Operator or
Affiliate thereof is or becomes an Equity Participant, except to the extent that such
management fees exceed market fees for the applicable brand. Parent shall cause all Equity
Participants with direct ownership of Parent (and, in the event of a partial assignment of
ownership of Parent's interest in Developer, shall cause all Equity Participants with direct
ownership of such assignee)to execute a written agreement with Parent acknowledging the
terms of this Agreement, including without limitation, the subordination of such Equity
Participants' rights to receive Hotel Distributions in accordance with the provisions of this
Section 3.02(a), and shall provide a true and correct copy of each such written agreement
to Agency and County. In addition,the Agency's and County's right to receive the Annual
Fee shall not be subordinate to debt other than secured debt (subject to the limitations set
forth in the next sentence). The Parent, the County,and the Agency acknowledge and agree
that should secured financing obtained by Parent or any of its direct or indirect subsidiaries,
including, without limitation, Developer, that is closed on or after the Annual Fee
Commencement Date exceed an aggregate Loan to Value Ratio of 75% (the "LTV
Threshold") or cause the aggregate Debt Service Coverage Ratio to be less than 1.2x (the
"DSC Threshold") as of the date of closing of any such secured financing, then the portion
of the aggregate Debt Service allocable to the amount of such financing that exceeds the
LTV Threshold or that causes the Debt Service Coverage Ratio to fall below the DSC
Threshold, as applicable (such portion, the "Subordinate`Debt," and the balance of such
financing, the "Priority Debt"), shall be subordinate to the payments of the Annual Fee to
the Agency and County. For the avoidance of doubt, the Annual Fee paid to the Agency
and County is independent of, and supplemental to, the lease payments made by the
Developer to the City under the Lease Agreement.
Agreement to be revised prior to execution to reflect the Agency's portion of the Annual Fee may be made payable
to the City, at the City's request.
15
Pag6497
(b) In the event that the Parent fails to pay any installment of the Annual Fee in
any year after the Annual Fee Commencement Date due to insufficient cash flow after
payment of all Operating Expenses including Debt Service (other than allocable to any
Subordinate Debt) and after payment of all amounts payable to the City under the Lease
Agreement, but specifically excluding any payments to Parent, Developer, or their
Affiliates (such available funds after payment of all such costs and expenses, the
"Available Cash Flow"), such unpaid installments of the Annual Fee shall be deferred (as
such amount may increase or decrease from time to time, the "Deferred Fee Amount").
Payment of the Deferred Fee Amount shall be made from Available Cash Flow. Such
Deferred Fee Amount shall be and continue to remain superior to any Hotel Distributions
to any Equity Participants at any time when a Deferred Fee Amount balance exists.
Notwithstanding the foregoing, the Agency and County acknowledge and agree in the
event that Debt Service (other than allocable to any Subordinate Debt) cannot be covered
from Available Cash Flow as payments become due as a result of a Force Majeure Event
(as defined in the Lease Agreement),and an existing subordinated Equity Participant at the
time of such shortfall funds such shortfall with a contribution of equity (as opposed to a
loan) ("Emergency Equity"),the Emergency Equity shall be returned to such subordinated
Equity Participant(s)with priority over the Annual Fee and any Deferred Fee Amount then
existing until such time as such equity is repaid in full_ Any installment(s) of the Annual
Fee that are not paid as a result of the preference for the return of Emergency Equity shall
be added to the Deferred Fee Amount. Once the Emergency Equity has been returned,
payments of installments of the Annual Fee and of the Deferred Fee Amount shall be paid
from Available Cash Flow with priority over any distributions to any Equity Participants.
The entire outstanding Deferred Fee Amount then existing shall be paid upon the closing
of any sale, assignment or transfer of the Convention Center Hotel(i.e.,the leasehold estate
under the Lease Agreement), directly or indirectly to a third party that results in a change
of Control; provided, however, that in the event of any Transfer of the Convention Center
Hotel (i.e., the leasehold estate under the Lease Agreement), and/or of direct or indirect
ownership interests in Developer, in each case directly or indirectly resulting from
foreclosure and/or deed/assignment-in-lieu of foreclosure, all obligations with respect to
the payments of the Annual Fee (including the payment of any Deferred Fee Amounts)
shall be extinguished, this clause (b) shall no longer be applicable. To the extent any
foreclosure proceeds exceed the aggregate of the corresponding foreclosure judgment, any
and all accrued interest thereon, and any and all other Priority Debt, including, without
limitation, outstanding principal balances, accrued and unpaid interest, and all other
accrued amounts due thereunder,then such excess shall be paid according to the following
order of priority: first, to the Agency and County up to the amount of the sum of(i) any
accrued and unpaid Deferred Fee Amount,(ii)any other amounts due to the Agency and/or
County under this Agreement, and (iii) an amount equal to the net present value of the
remaining payments of the Annual Fee that would have accrued after the date of the
foreclosure sale utilizing the 10-year Treasury rate in effect as of such date; second, to any
outstanding principal balances, accrued and unpaid interest, and all other accrued amounts
due under any Subordinate Debt obtained by Parent or any of its direct or indirect
subsidiaries (including, without limitation, Developer); third, to any preferred equity
investor in Parent or any of its direct or indirect subsidiaries, including, without limitation,
Developer, up to the amount of any outstanding preferred equity investment, including,
16
Pag2?497
without limitation, accrued and unpaid interest thereon; and fourth, the balance to the
Parent or its applicable direct or indirect subsidiaries, including, without limitation,
Developer, that was foreclosed upon (including the repayment of any Emergency Equity
contributed by Parent or its applicable direct or indirect subsidiary). Notwithstanding the
foregoing, the Agency and/or County may, in their sole discretion, agree to subordinate its
interest to a lender providing Subordinate Debt.
(c) The Parent and/or Developer and/or any of its affiliates shall have the right
to buy out payments of the Annual Fee by providing a lump-sum payment equal to the net
present value of the remaining payments of the Annual Fee utilizing the 10-year Treasury
rate in effect at the time of the buyout; provided, however, that no such buyout may occur
prior to tenth (10th) anniversary of the Annual Fee Commencement Date, and, provided,
further, no such buyout may occur prior to the fifteenth (15`h) anniversary of the Annual
Fee Commencement Date unless it in connection with the sale, assignment or transfer of
the Convention Center Hotel, directly or indirectly to a third party that results in a change
of Control.
(d) In the event of an arm's length sale, assignment or transfer of (i) the
Convention Center Hotel (i.e., the leasehold estate under the Lease Agreement)to a third
party or (ii) direct or indirect ownership interests in Developer to a third party that results
in a change of Control of Developer, the seller in such transaction (whether the seller is
Parent or an Affiliate of Parent) shall pay to the Agency and County a one-time transfer
fee which shall be divided fifty percent (50%) to the Agency5 and fifty percent (50%) to
the County (the "Transfer Fee") in an amount equal to two percent (2%) of the gross sale
proceeds of the sale,assignment or transfer less(i)the outstanding balance to payoff in full
any existing Priority Debt and (ii)all transaction costs. Notwithstanding the foregoing,the
Transfer of the Convention Center Hotel and/or of direct or indirect ownership interests in
Developer, in each case directly or indirectly, resulting from a foreclosure and/or
deed/assignment-in-lieu of foreclosure shall not be deemed a Transfer subject to the
Transfer Fee, and upon any such Transfer all obligations with respect to the Transfer Fee
shall be extinguished and this clause (d) shall no longer be applicable, and the In-Kind
Public Benefits(as defined below)set forth on Exhibit B shall be extended for an additional
period of five(5)years. For avoidance of doubt, the Transfer Fee shall be applicable only
to the Transfer, directly or indirectly, of the first to occur of the leasehold estate under the
Lease Agreement or of a Controlling interest in Developer, and once paid, this clause (d)
shall no longer be applicable. In the event of a Transfer that results in a change of Control
of Developer, but such Transfer is less than 100% of the ownership interests, the Transfer
Fee shall be adjusted to reflect the amount the Transfer Fee would have been if such
Transfer had been for 100% of the ownership interests (by way of example, in the event of
a Transfer of 75% of the ownership interests, the sales price shall be grossed up 33.33%
for purposes of calculating the Transfer Fee).
(e) For the time period commencing upon the Opening of the Convention
Center Hotel and during each year of the twenty-two (22) years following the Opening of
Agreement to be revised prior to execution to reflect the Agency's portion of the Transfer Fee will be made payable
to the City.
17
Pag8497
the Convention Center Hotel, unless extended in accordance with Section 3.02(b) or
Section 4.02 of this Agreement (the"Public Benefit Period"), the Parent shall provide, or
shall cause the Developer to provide, the additional in-kind public benefits described in the
attached Exhibit B (the"In-Kind Public Benefits"), in each case subject to availability and
force majeure. In the event that the Agency or County, in any calendar year, is unable to
utilize any portion of the reimbursable room nights,junior ballroom rentals or conference
rooms as a result of unavailability or force majeure,then such unused portion(but no more
than 50% of the then remaining room nights,junior ballroom and conference room rentals)
may be utilized by the Agency and County only in the following calendar year. The City
and/or County are intended beneficiaries of some of the In-Kind Public Benefits as set forth
in Exhibit B, attached hereto and incorporated herein by this reference. Notwithstanding
anything to the contrary stated herein, the parties hereto irrevocably and expressly agree
that the County and the City are intended third party beneficiaries of this Agreement for
the limited purpose(s) outlined in this Section 3.02(e), and that the County and City shall
have the right to seek to enforce the provisions of Section 2.03, Section 2.04, Section 3.02,
Section 4.02, Section 4.07, and Exhibit B all hereof in their absolute discretion
(collectively, `Beneficiary Rights"). For the avoidance of doubt, the County and the City
(i)are entitled to enforce any rights and/or obligations in conformity with this Section, and
(ii)may commence an appropriate legal or equitable action to enforce performance of this
Agreement in the manner outlined in this Section. The parties hereto acknowledge that the
provisions of this section are the basis for the bargain for the transaction contemplated in
this Agreement. Notwithstanding anything to the contrary contained herein, the parties
hereto agree that the Beneficiary Rights will not be amended, revised, or altered without
the County's prior written consent. It is expressly agreed and by this statement specifically
intended by the parties hereto that nothing within this Agreement shall be construed as
indicating any intent by either party to benefit any other entity or person not a party
signatory to this Agreement by any provision or to entitle any such third party to any right
of action on account hereof except for the County and the City.
(f) For purposes of this subparagraph 3.02(e), the term "force majeure" shall
be interpreted by reference to the definition of "Force Majeure Event" in the Lease
Agreement. For the avoidance of doubt, if there is a weather event that would otherwise
constitute force majeure, for so long as the hotel remains in a physical and operational state
(and is legally permitted)to accommodate guests,the Agency shall nevertheless be entitled
to use its "weather emergency" room allotment, immediately before, during, and
immediately following the weather event subject to availability.
(g) Upon the termination of the Agency, all rights of the Agency pursuant to A
this Agreement(including the right to receive the Public Benefits described in this Section
3.02) will be transferred fifty percent (50010) to the City and fifty percent (50%) to the
County in accordance with applicable law.
(h) For the avoidance of doubt, neither the Parent nor the Developer nor any
other person or entity shall be required to provide or maintain the Public Benefits in any
manner that would violate applicable laws or regulations.
18
Pag 8497
Section 3.03. No Warranty by Agency. Nothing contained in this Agreement or any
other document attached hereto or contemplated hereby shall constitute or create any duty on or
warranty by the Agency regarding: (a) the accuracy or reasonableness of the Convention Center
Hotel Project budgets; (b) the feasibility or quality of the construction documents for the
Convention Center Hotel Project; (c) the quality or condition of the work; or (d) the competence
or qualifications of any third party furnishing services, labor or materials in connection with the
construction of the Convention Center Hotel. The Parent and the Issuer acknowledge that they
have not relied and will not rely upon any experience, awareness or expertise of the Agency, or
any City or Agency inspector, regarding the aforesaid matters.
ARTICLE IV
ACKNOWLEDGMENT OF GRANT; AGENCY PAYMENTS
Section 4.01. Acknowledgment of Grant; Potential Reduction to Funded Grant
Amount; Disbursements by Bond Trustee. The Agency acknowledges that the Issuer will issue
the Series 2024 Bonds in order to fund the Grant to the Parent in an amount equal to
$75,000,000.00 (the "Funded Grant Amount"), less the amount of the Direct Grant, if any. The
Parent acknowledges that, as of the Effective Date of this Agreement, it is anticipated that the cost
to construct the Convention Center Hotel will equal or exceed the amount of the Project Budget,
and the cost to construct the Public Areas will equal or exceed the Funded Grant Amount. The
Underbudget Amount (as defined below) shall reduce the final amount of the Grant (and Direct
Grant, if applicable) in accordance with the below provisions of this Section 4.01. The Bond
Trustee shall disburse to Parent or Developer the full amount of the Funded Grant Amount upon
submission of a requisition in the manner established under the Bond Indenture in order to fund
the amount of actual hard and soft costs (including, without limitation, financing costs) of
development and construction solely of the Public Areas. Parent shall deliver, or cause Developer
to deliver, to one or more lender(s) providing secured financing to Parent or its direct or
indirect subsidiaries (including, without limitation, Developer) the Funded Grant Amount
(inclusive of the amount of the Direct Grant, if any) to hold in one or more reserves (collectively,
the "Grant Funds Reserve") for further disbursement for payment of costs of developing and
constructing the Convention Center Hotel Project, including,without limitation,hard and soft costs
thereof. One or more such lenders shall restrict loan availability in an aggregate amount equal
initially to the Funded Grant Amount (such restricted loan funds, the "Grant Funds
Holdback"). The Grant Funds Holdback shall reduce by a percentage equal to the Public Areas
Factor of each dollar disbursed from the Grant Funds Reserve and of each dollar disbursed from
unrestricted loan funds and of each dollar of equity investment disbursed by the provider of any
preferred equity investment, in each case in connection with the development and construction of
the Convention Center Hotel Project. The Bond Indenture shall include provisions consistent with
the foregoing. By way of example, if the Public Areas Factor is equal to 25%, then after the first
$100 Million has been spent on the construction of the Convention Center Hotel Project, the Grant
Funds Holdback shall have been reduced from $75 Million to $50 Million, and the Grant Funds
Holdback may be released upon the expenditure of$300 Million towards the construction of the
Convention Center Hotel Project.
(a) Within sixty (60) days after issuance of a final certificate of occupancy for
the Convention Center Hotel, the Parent shall submit to the Agency a final reconciliation
19
Pag6497
of the actual hard and soft costs (including, without limitation, financing costs) to develop
and construct the Convention Center Hotel and Public Areas of the Convention Center
Hotel(inclusive of all hard and soft costs, financing costs,and other costs incorporated into
the Project Budget) in the form required by the construction lender for the Convention
Center Hotel or in a different form reasonably satisfactory to the Agency as required to
reasonably verify that such actual costs of the Convention Center Hotel Project and the
Public Areas equal or exceed the amounts of the Project Budget and of the Funded Grant
Amount,respectively. The Agency acknowledges and agrees that the Public Areas will be
constructed as part of the larger Convention Center Hotel Project,and the methodology for
verifying the actual costs of construction of the Public Areas shall be to multiply the actual
costs of construction of the Convention Center Hotel Project by the percentage of such
construction costs that are attributable to Public Areas (such percentage,the"Public Areas
Factor"). The Parent and Agency agree that, based on the approved plans for the
Convention Center Hotel Project as of the Effective Date, the Public Areas Factor is
[28.62%], and the Public Areas Factor shall not be subject to revision except to the extent
the plans for the Convention Center Hotel Project are revised after the Effective Date and
the Agency reasonably concludes that such revisions are likely to reduce the cost to
construct the Public Areas relative to the cost to construct the balance of the Convention
Center Hotel Project. For the avoidance of doubt, the Parent may request that any such
documentation provided to the Agency in accordance with this paragraph be treated as
confidential,and exempt from public disclosure, to the extent that a valid exemption exists
pursuant to Chapter 119, Florida Statutes, and the Agency shall honor such claim to the
extent authorized by applicable law.
(b) Within ninety(90)days after issuance of a final certificate of occupancy for
the Convention Center Hotel, the Parent shall pay to the Agency an amount equal to the
Underbudget Amount, as a repayment of a portion of the Funded Grant Amount not
required by the Parent for its intended purpose (i.e., to facilitate the expeditious
development of the Convention Center Hotel) due to cost savings (whether or not
anticipated), the amount calculated as the greater of the following: (a) the amount of the
Project Budget minus the actual hard and soft costs (including, without limitation,
financing costs during construction)to develop and construct the Convention Center Hotel
or (b) the Funded Grant Amount minus the actual hard and soft costs (including, without
limitation, financing costs during construction) to develop construct the Public Areas of
the Convention Center Hotel (the amount so calculated,the "Underbudget Amount"). Any
such calculation resulting in a negative number shall be equal to zero. The Parent shall
provide written notice to the Agency advising of the Underbudget Amount and confirming
payment of the Underbudget Amount to the Agency. Parent's failure to pay the
Underbudget Amount, if any, as required by this subsection 4.01(b) shall constitute a
default under the Lease Agreement, and if such failure continues for a period of thirty(30)
days after written notice thereof by City to Developer specifying such failure, such default
shall be an Event of Default under the Lease Agreement,but, for avoidance of doubt, shall
be subject to all rights of lenders under the Lease Agreement, including,without limitation,
the rights to receive notice of default, opportunity to cure and new lease rights.
Section 4.02. Payment Obligations of Agency. The Agency hereby agrees to pay to the
Bond Trustee by federal funds wire, in semi-annual installments (each, a "Semi-Annual
20
Pagmtny8 f497
Installment"), due and payable on or before and of each calendar year (the due date
of such Semi-Annual Installment, the "Semi-Annual Installment Due Date"), commencing
, 2025 and ending on , 20 , the amount due in accordance with the
payment schedule set forth in the Semi-Annual Installment Payment Schedule,as described herein,
from available Trust Fund Revenues as set forth in Section 4.03 hereof. The Parent and the Agency
acknowledge that, as of the Effective Date, the sum of the Payments, which include the Funded
Grant Amount plus the cost of issuance and interest accruing during the scheduled repayment term
is anticipated to equal the amount of$86,200,000.00 (the "Anticipated Total Payment Amount"),
but in any event shall not exceed the amount of$92,500,000.00 (the "Maximum Total Payment
Amount"). The Agency shall not have any liability for the Payments in excess of the Maximum
Total Payment Amount, payable in the Semi-Annual Installments stated in the Semi-Annual
Installment Payment Schedule, as described herein, due on each Semi-Annual Installment Due
Date, and, except as expressly provided in this Agreement, the Semi-Annual Installments as set
forth in the Semi-Annual Installment Payment Schedule, as described herein, shall not be subject
to reduction,offset or repayment. The Parent and the Agency acknowledge that the total Payments
due from the Agency pursuant to this Agreement may vary from the Anticipated Total Payment
Amount (but will not exceed the Maximum Total Payment Amount) based on changes in the
interest rate and other applicable financing costs between the Effective Date and the date that the
Issuer issues the Bonds. In the event the actual sum of the Payments exceeds the Anticipated Total
Payment Amount, then for each $3,000,000.00 paid by the Agency above the Anticipated Total
Payment Amount, the Public Benefits required to be provided by the Parent and/or the Developer
pursuant to Section 3.02 above, including the Annual Fee and the In-Kind Public Benefits, shall
be extended for a period of five (5) years. The County may require and all parties hereto agree to
cooperate fully and execute any and all supplementary documents and to take all additional actions
which may be necessary or appropriate to give full force and effect to the basic terms and intent of
the immediately preceding sentence. At the earlier of(i) such time as the Bonds shall have been
retired and all principal amounts paid in full or (ii) the Payments have been paid in full by the
Agency (taking into account any credit for any Underbudget Amount), the obligation of the
Agency to pay the Payments shall terminate. Each Semi-Annual Installment shall be applied by
the Bond Trustee to pay the principal of and interest on the Bonds when due, the annual fees of
the Issuer and the Bond Trustee when due, and for such other purposes as shall be authorized
pursuant to the Bond Indenture.
The Issuer and the Parent hereby certify that the interest rate on the Series 2024 Bonds
shall not exceed the maximum interest rate permitted under Section 215.84, Florida Statutes, as
amended.
Section 4.03. Security for Payments. The obligation of the Agency to make the
Payments as set forth in Section 4.02 shall be secured by and payable exclusively from available
Trust Fund Revenues, on a basis subordinate to the Agency Bonds, in the order of priority as set
forth in Section 3.04D(4) of the Agency Bond Resolution. Such obligation to pay the Payments
shall constitute a "subordinated obligation" of the Agency as described in Section 304G of the
Agency Bond Resolution and shall be junior, inferior and subordinate in all respects to Agency
Bonds as to lien and source and security for payment from the Pledged Funds and in all other
respects.
21
Pag2497
Section 4.04. Issuance of Additional Parity Obligations or Additional Agency Bonds.
The Agency covenants and agrees that it will not issue or incur any additional Parity Obligations
or additional Agency Bonds except as provided in this Section 4.04. Additional Parity Obligations
or Agency Bonds may be issued or incurred by the Agency if the aggregate of the Trust Fund
Revenues (not including any portion thereof which may be attributable to investment earnings)
received by the Agency during the immediately preceding Fiscal Year were at least equal to (1)
one hundred fifty percent (150%) of the Maximum Annual Debt Service on the Agency Bonds
issued and then outstanding and the additional Agency Bonds then proposed to be issued, plus (2)
one hundred percent(100%) of the Maximum Annual Payments with respect to(A)the Payments,
(B) any Parity Obligations then outstanding or otherwise due and payable and (C) the additional
Parity Obligations then proposed to be issued or incurred.
The Agency need not comply with the above paragraph in the issuance of additional
Agency Bonds if and to the extent the Agency Bonds to be issued are refunding Agency Bonds,
that is, delivered in lieu of, in substitution for or for the redemption of Agency Bonds previously
issued under the Agency Bond Resolution, if the Agency shall cause to be delivered a certificate
of the Executive Director of the Agency setting forth (i) the Maximum Annual Debt Service (X)
with respect to the Agency Bonds outstanding immediately prior to the date of authentication and
delivery of such refunding Additional Agency Bonds, and (Y) with respect to the Agency Bonds
to be outstanding immediately thereafter, and(ii)that the Maximum Annual Debt Service set forth
pursuant to (Y) above is no greater than that set forth pursuant to (X) above.
Section 4.05. Issuance of Refunding Bonds. The Issuer may issue bonds to refund all
or a portion of the Series 2024 Bonds or any Bonds issued to refund all or a portion of the Series
2024 Bonds or other series of Bonds pursuant to the terms of the Bond Indenture only upon the
written agreement of all parties hereto to the issuance of such refunding bonds. As a condition for
the issuance of any such refunding bonds, the parties hereto shall enter into an amendment to the
Semi-Annual Installment Payment Schedule to reflect the semi-annual debt service payments with
respect to the Bonds outstanding, but in no event shall the revised payments exceed the payments
set forth in the Semi-Annual Installment Payment Schedule (as the same maybe have been
amended) immediately prior to the issuance of any such refunding bonds.
Section 4.06. Further Disclaimer. The Payments shall not be deemed to constitute a
debt, liability, or obligation of the City, the County, the Agency, or of the State of Florida or any
political subdivision thereof within the meaning of any constitutional or statutory limitation, or a
pledge of the faith and credit or taxing power of the City, the County, the Agency, or of the State
of Florida or any political subdivision thereof. The Agency shall not be obligated to pay the
Payments or any installments except from available Trust Fund Revenues provided for that
purpose as set forth herein, and neither the faith and credit nor the taxing power of the City, the
County, the Agency or of the State of Florida or any political subdivision thereof is pledged to the
payment of the Payments or any Semi-Annual Installment thereof. The Issuer, the Developer or
any person, firm or entity claiming by, through or under the Issuer or the Developer, or any other
person whomsoever, shall never have any right, directly or indirectly, to compel the exercise of
the ad valorem taxing power, or any other taxing power, of the City, the County, the Agency, or
of the State of Florida or any political subdivision thereof for the Payments or any Semi-Annual
Installment thereof. For the avoidance of doubt, the Agency has no taxing power.
'22
PagM497
Section 4.07. Semi-Annual Installment Payment Schedule. The Agency and County
shall reasonably approve the form of Semi-Annual Installment Payment Schedule prior to the
execution of the bond purchase agreement. Following the issuance of the Bonds, Issuer, Parent,
and Agency shall deliver the Semi-Annual Installment Payment Schedule to County substantially
in the form previously approved by County;provided,however,for the avoidance of doubt,County
shall have no approval rights with respect to the Semi-Annual Installment Payment Schedule
following the issuance of the Bonds.
ARTICLE V
REPORTING
The Agency hereby covenants and agrees that it will comply with and carry out all of the
provisions of the Disclosure Dissemination Agent Agreement dated as of December 15, 2015
between the Agency and Digital Assurance Certification LLC, and any Disclosure Dissemination
Agent Agreement subsequently entered into by the Agency with respect to the Agency Bonds
(collectively, the "Disclosure Agreement") while any Payments are due and payable.
Notwithstanding any other provision of this Agreement, failure of the Agency to comply with the
Disclosure Agreement does not constitute a default by the Agency hereunder or with respect to the
Series 2024 Bonds.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01. [RESERVED]
Section 6.02. The Parent's Representations,Warranties and Covenants. The Parent's
representations, warranties and covenants are made as of the date of this Agreement and as of the
date of delivery of the Series 2024 Bonds to the Agency and initial purchasers and survive the
issuance of the Bonds. The Parent's representations, warranties and covenants remain operative
and in full force and effect until termination of this Agreement pursuant to this Agreement's terms.
The Parent hereby makes the following representations,warranties and covenants, as the basis for
the undertakings on the part of the Parent herein contained:
(a) [The Parent is a limited liability company duly organized and validly
existing under the laws of the State of Florida, is authorized to do business and is in good
standing under the laws of the State of Florida, and is not in violation of any provisions of
its Articles of Organization, its operating agreement, or any laws of the State of Florida or
the Constitution of the State of Florida relevant to the transactions contemplated hereby or
in connection with the issuance of the Bonds.]6
(b) The Parent has full legal power and authority to execute and deliver this
Agreement and full company power and authority to approve the execution and delivery
6 Parent's representations in Section 6.02(a) to be updated prior to execution to reflect any changes to the corporate
stnicture due to financing and tax considerations(e.g.,changing domicile to Delaware or changing tax classification).
23
Pag497
of the Series 2024 Bonds and of the Bond Indenture, and has, by proper company action,
duly authorized the execution and delivery of such instruments.
(c) Neither the execution and delivery of this Agreement or the execution and
delivery by the Developer of the Lease Agreement, the consummation of the transactions
contemplated hereby and thereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement or the Lease Agreement conflict with or result in a breach of
the terms, conditions, or provisions of any company restriction or any agreement or
instrument to which the Parent or the Developer is now a party or by which either is bound,
or constitutes a default under any of the foregoing, or results in the creation or imposition
of any prohibited lien, charge, or encumbrance whatsoever upon any of the property or
assets of the Parent or the Developer under the terms of any instrument or agreement.
(d) Any certificate with respect to any material factual or financial matters
signed by a Parent Representative and delivered to the Issuer or the Agency in connection
with this Agreement or the Lease Agreement shall be deemed a representation and warranty
by the Parent as to the statements made therein.
(e) Neither the Parent nor the Developer is in breach of or in default under any
constitutional provision, applicable law (including, without limitation, the Redevelopment
Act)or administrative rule or regulation of the State of Florida, the United States, or of any
department, division, agency or instrumentality of either thereof or any applicable court or
administrative decree or order, or the Lease Agreement, note, ordinance, resolution,
indenture,contract, agreement or other instrument to which the Parent or the Developer, as
applicable, is a party or to which the Parent or the Developer, as applicable, or any property
or assets of the Parent or the Developer, as applicable, is otherwise subject or bound which
in any material way,directly or indirectly, affects the Parent's entering into this Agreement
or the Developer entering into the Lease Agreement, or the validity thereof, the validity or
adoption of the resolution authorizing Parent to enter into this Agreement or the Developer
to enter into the Lease Agreement, the execution and delivery of this Agreement,the Lease
Agreement or other instruments contemplated thereby to which the Parent or the
Developer, as applicable, is a party, and compliance with the provisions of each thereof
will not conflict with or constitute a breach of or default under any constitutional provision,
applicable law (including, without limitation, the Redevelopment Act) or administrative
rule or regulation of the State of Florida,the United States, or of any department, division,
agency or instrumentality of either thereof, or any applicable court or administrative decree
or order, or any agreement, note, ordinance, resolution, indenture, contract, agreement or
other instrument to which,the P-arent or the Developer, as applicable, is a party or to which
the Parent or the Developer, as applicable, or any of the property or assets of the Parent or
Developer is otherwise subject or bound.
(f) The conduct of the Parent's operations and the condition of any property it
owns does not and will not cause a violation of any federal laws, rules or ordinances or
environmental protection regulations of the Environmental Protection Agency and any
applicable local or State of Florida law, rule or regulation of common law or any judicial
interpretation thereof relating primarily to environment or hazardous materials.
24
Pag 8497
(g) The Parent shall not amend,supplement,or restate or permit this Agreement
to be amended excepted as permitted in the Bond Indenture.
(h) This Agreement will constitute the legal, valid and binding agreement of
the Parent enforceable against the Parent in accordance with its terms, including, without
limitation, by the Bond Trustee for the benefit of the owners of the Bonds, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally,
and subject, as to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(i) No written information, exhibit or report prepared by the Parent or the
Developer in connection with this Agreement and the issuance of the Series 2024 Bonds
(including, without limitation, any financial statements, whether audited or unaudited, and
any other financial information provided in connection therewith) contains any untrue
statement of a material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(j) There are no actions, suits or proceedings of any type whatsoever pending
or, to its knowledge, threatened in writing against or affecting it or its assets, properties or
operations which, if determined adversely to it or its interests,would have an adverse effect
in any material respect upon its financial condition,assets,properties or operations,or upon
its ability to perform its obligations under this Agreement, or upon the validity or
enforceability of any or all of this Agreement or the Lease Agreement, and to its best
knowledge, after reasonable diligence, it is not in default with respect to any order or
decree of any court or any order, regulation or decree of any federal, state, municipal or
other governmental agency, which default would adversely affect in any material respect
its operations or its properties or its ability to perform it obligations under this Agreement.
(k) Neither the representations of the Parent contained herein nor any written
statement, furnished by or on behalf of the Parent to the Issuer, the Agency or the
purchasers of the Bonds in connection with the transactions contemplated hereby, contain
any untrue statement of a material fact or omit to state a material fact necessary to make
the statements contained herein or therein, in light of the circumstances under which they
were made, not misleading.
(I) The Parent (i) understands the nature of the structure of the transactions
related to this Agreement, and (ii) is familiar with all,.the provisions of the documents and
instruments related to the Convention Center Hotel, the Convention Center Hotel Project
and any financing to which the Parent, the Developer or the Issuer is a party or of which
the Parent or the Developer is a beneficiary.
(in) All representations of the Parent contained herein and all representations of
the Developer contained in the Lease Agreement, or in connection with the transactions
contemplated hereby or thereby, shall survive the expiration or termination of this
Agreement as representations of facts existing as of the date of the execution and delivery
of the instrument containing such representation.
25
Pagt73497
(n) The Parent shall not take any action to prevent, and shall cause the
Developer to diligently take all steps necessary to achieve, the Completion of Construction
in a timely manner and in accordance with all applicable requirements of law, including
requirements of any federal, state, county, city or other governmental authority having
jurisdiction over the Convention Center Hotel or its ownership, use and operation.
(o) Neither the developer fee for any other line item included in the Project
Budget includes any direct or indirect profit to the Developer, the Parent, or any Affiliate
of either and represents only actual overhead costs without any additional mark-up of any
kind.
(p) The Parent shall comply with all terms and conditions herein, including any
restrictions on the use of the proceeds of the Grant (and Direct Grant, if applicable).
Section 6.03. The Issuer's Representations, Warranties and Covenants. The Issuer's
representations, warranties and covenants are made as of the date of this Agreement and as of the
date of delivery of the Series 2024 Bonds to the Agency and initial purchasers and survive the
issuance of the Bonds. The Issuer's representations, warranties and covenants remain operative
and in full force and effect until termination of this Agreement pursuant to this Agreement's terms.
The Issuer hereby makes the following representations, warranties and covenants, as the basis for
the undertakings on the part of the Issuer herein contained:
(a) The Issuer is a unit of government and a body corporate and politic of the
State of Wisconsin, is authorized to do business and is in good standing under the laws of
the State of Florida, and is not in violation of any provisions of the Act, or any laws of the
State of Florida or the Constitution of the State of Florida relevant to the transactions
contemplated hereby or in connection with the issuance of the Bonds.
(b) The Issuer has full corporate power and authority to execute and deliver the
Bond Indenture and the Series 2024 Bonds, and has, by proper corporate action, duly
authorized the execution and delivery of such instruments.
(c) Neither the execution and delivery of this Agreement, the Series 2024
Bonds or the Bond Indenture, the consummation of the transactions contemplated hereby
and thereby, nor the fulfillment of or compliance with the terms and conditions of this
Agreement or the Bond Indenture conflict with or result in a breach of the terms,
conditions, or provisions of any corporate restriction or any agreement or instrument to
which the Issuer is now a party or by which it is bound, or constitutes a default under any
of the foregoing, or results in the creation or imposition of any prohibited lien, charge, or
encumbrance whatsoever upon any of the property or assets of the Issuer under the terms
of any instrument or agreement.
(d) Any certificate with respect to any material factual or financial matters
signed by an Authorized Signatory and delivered to the Parent or the Agency in connection
with this Agreement or the Bond Indenture shall be deemed a representation and warranty
by the Issuer as to the statements made therein.
26
Pag ?497
(e) The Issuer is not in breach of or in default under any constitutional
provision, applicable law (including, without limitation, the Act) or administrative rule or
regulation of the State of Florida, the United States, or of any department, division, agency
or instrumentality of either thereof or any applicable court or administrative decree or
order, or any agreement, note, ordinance, resolution, indenture, contract, agreement or
other instrument to which the Issuer is a party or to which the Issuer or any property or
assets of the Issuer is otherwise subject or bound which in any material way, directly or
indirectly, affects the Issuer's entering into this Agreement or the Bond Indenture, or the
validity thereof, the validity or adoption of the resolution authorizing Issuer to enter into
this Agreement and the Bond Indenture, the execution and delivery of this Agreement, the
Bond Indenture,the Series 2024 Bonds or other instruments contemplated thereby to which
the Issuer is a party, and compliance with the provisions of each thereof will not conflict
with or constitute a breach of or default under any constitutional provision, applicable law
(including, without limitation, the Act) or administrative rule or regulation of the State of
Florida, the United States, or of any department, division, agency or instrumentality of
either thereof,or any applicable court or administrative decree or order, or any Agreement,
note, ordinance,resolution, indenture,contract,agreement or other instrument to which the
Issuer is a party or to which the Issuer or any of the property or assets of the Issuer is
otherwise subject or bound.
(f) The Issuer shall not amend,supplement, or restate or permit this Agreement
to be amended excepted as permitted in the Bond Indenture.
(g) This Agreement, the Bond Indenture and the Series 2024 Bonds will
constitute the legal, valid and binding agreements of the Issuer enforceable against the
Issuer in accordance with their terms, including, without limitation, by the Bond Trustee
for the benefit of the owners of the Bonds, subject to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights generally, and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a proceeding
in equity or at law).
Section 6.04. The Agency's Representations, Warranties and Covenants. The
Agency's representations, warranties and covenants are made as of the date of this Agreement and
as of the date of delivery of the Series 2024 Bonds to the Parent and the Issuer and survive the
issuance of the Bonds. The Agency's representations, warranties and covenants remain operative
and in full force and effect until expiration or termination of this Agreement pursuant to this
Agreement's terms. The Agency hereby makes the following representations, warranties and
covenants, as the basis for the undertakings on the part of the Agency herein contained:
(a) The Agency is a community redevelopment agency duly organized and
validly existing under the laws of the State of Florida, is authorized to do business and is
in good standing under the laws of the State of Florida, and is not in violation of any
provisions of any laws of the State of Florida or the Constitution of the State of Florida
relevant to the transactions contemplated hereby.
27
Pag8497
(b) The Agency has full corporate power and authority to execute and deliver
this Agreement, and has, by proper corporate action, duly authorized the execution and
delivery of this Agreement.
(c) Neither the execution and delivery of this Agreement, the consummation of
the transactions contemplated hereby, nor the fulfillment of or compliance with the terms
and conditions of this Agreement conflict with or result in a breach of the terms,conditions,
or provisions of any corporate restriction or any agreement or instrument to which the
Agency is now a party or by which it is bound, or constitutes a default under any of the
foregoing, or results in the creation or imposition of any prohibited lien, charge, or
encumbrance whatsoever upon any of the property or assets of the Agency under the terms
of any instrument or agreement.
(d) Any certificate with respect to any material factual or financial matters
signed by the Executive Director and delivered to the Issuer or the Parent in connection
with this Agreement shall be deemed a representation and warranty by the Agency as to
the statements made therein.
(e) The Agency is not in breach of or in default under any constitutional
provision, applicable law (including, without limitation, the Redevelopment Act) or
administrative rule or regulation of the State of Florida, the United States, or of any
department, division, agency or instrumentality of either thereof or any applicable court or
administrative decree or order, or any agreement, note, ordinance, resolution, indenture,
contract, agreement or other instrument to which the Agency is a party or to which the
Agency or any property or assets of the Agency is otherwise subject or bound which in any
material way, directly or indirectly, affects the Agency's entering into this Agreement, or
the validity thereof, the validity or adoption of the resolution authorizing Agency to enter
into this Agreement, the execution and delivery of this Agreement or other instruments
contemplated thereby to which the Agency is a party, and compliance with the provisions
of each thereof will not conflict with or constitute a breach of or default under any
constitutional provision, applicable law (including,without limitation,the Redevelopment
Act)or administrative rule or regulation of the State of Florida,the United States, or of any
department, division, agency or instrumentality of either thereof, or any applicable court
or administrative decree or order, or any agreement, note, ordinance, resolution, indenture,
contract, agreement or other instrument to which the Agency is a party or to which the
Agency or any of the property or assets of the Agency is otherwise subject or bound.
(f) This Agreement constitutes the legal, valid and binding agreement of the ,.
Agency enforceable against the Agency in accordance with their terms, including, without
limitation, by the Bond Trustee for the benefit of the owners of the Bonds, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally,
and subject, as to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
For the avoidance of doubt, the Agency makes no representations or warranties with
respect to the Bonds or the Bond Indenture, including,without limitation, the exclusion from gross
28
Pag 8497
income for federal income tax purposes of interest on the Bonds or any state of local tax exemption
related to the Bonds or interest thereon.
ARTICLE VII
INDEMNIFICATION OF ISSUER; LIMITED OBLIGATION OF ISSUER
Section 7.01. Indemnification. The Parent hereby fully and forever and irrevocably
releases and,to the fullest extent permitted by law, agrees to defend, indemnify and hold harmless
the Issuer, each Issuer Indemnified Person, the Agency, and the Bond Trustee (collectively, the
"Indemnified Persons"), against any and all reasonable fees, costs and charges, losses, damages,
claims, actions, liabilities and expenses of any conceivable nature, kind or character (including,
without limitation, reasonable fees and expenses of attorneys, accountants, consultants and other
experts, litigation and court costs, amounts paid in settlement and amounts paid to discharge
judgments) to which the Indemnified Persons, or any of them, become subject under any statutory
law or regulation (including federal or state securities laws and regulations and federal tax laws
and regulations)or at common law or otherwise(collectively,"Liabilities"),arising out of or based
upon or in any way relating to any of the following, except to the extent caused by such
Indemnified Person's gross negligence or willful misconduct:
(a) the Bonds, the Bond Indenture, or this Agreement or the execution or
amendment hereof or thereof or in connection with transactions contemplated hereby or
thereby, including the issuance, sale or resale of the Bonds;
(b) the performance or observance by or on behalf of the Issuer of those things
on the part of the Issuer agreed to be performed or observed hereunder and under the Bond
Indenture;
(c) any act or omission (to the extent there is an affirmative duty to act) of the
Parent or the Developer or any of their respective affiliates or affiliated persons, agents,
contractors, servants, employees, tenants or licensees in connection with the Convention
Center Hotel Project, the operation of the Convention Center Hotel, or the condition,
environmental or otherwise, occupancy, use, possession, conduct or management of work
done in or about, or from the planning, design, acquisition, installation or construction of,
the Convention Center Hotel or any part thereof;
(d) any lien or charge upon payments by the Parent or the Developer to the
Issuer or the Bond Trustee hereunder, or any taxes (including, without limitation, all ad
valorem taxes and sales taxes), assessments, impositions and other charges imposed on the
Issuer or the Bond Trustee in respect of any portion of the Convention Center Hotel;
(e) any violation of any environmental laws with respect to, or the release of
any hazardous substances from, the Convention Center Hotel or any part thereof;
(f) the defeasance and/or redemption, in whole or in part, of the.Bonds;
(g) to the extent attributable to or provided by the Parent or the Developer, any
untrue statement or misleading statement or alleged untrue statement or alleged misleading
29
Pag6497
statement of a material fact contained in any offering or disclosure document or disclosure
or continuing disclosure document for the Bonds or any of the documents relating to the
Bonds, or any omission or alleged omission from any offering or disclosure document or
disclosure or continuing disclosure document for the Bonds of any material fact necessary
to be stated therein in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading;
(h) any investigation or formal or informal inquiry by any federal,state,or local
governmental or regulatory agency (including, but not limited to, the U.S. Securities &
Exchange Commission) with respect to the Bonds or the transactions contemplated by this
Agreement or in connection therewith;
(i) any third-party request to the Issuer for documents or information regarding
the Bonds, this Agreement or related documents or transactions pursuant to the Federal
Freedom of Information Act("FOIA")or any applicable public records act, in each case to
the extent not paid by the requesting party;
(j) the Bond Trustee's acceptance or administration of the trust of the Bond
Indenture, or the exercise or performance of any of its powers or duties thereunder or under
any of the documents relating to the Bonds to which it is a party;
(k) any audit, inquiry, investigation, or proceeding instituted or threatened by
any state or federal governmental entity, agency, board, commission, or regulatory body,
relating in any way to or arising in any way from the matters referred to in this Section 7.01;
or
(1) any injury to or death of any Person or damage to property in or upon the
Convention Center Hotel or growing out of or connected with the use, nonuse, condition
or occupancy of the Convention Center Hotel, except in the case of the foregoing
indemnification of the Issuer and the Indemnified Persons,to the extent such Liabilities are
caused by the willful misconduct of the Person(s) seeking indemnification.
The Parent will also pay and discharge and will indemnify and hold harmless the
Indemnified Persons from any lien or charge upon payments by the Parent to the Indemnified
Persons hereunder. If any such lien or charge upon payments, taxes, assessments, impositions, or
other charges are sought to be imposed, the Issuer will give or cause to be given prompt notice to
the Parent,and the Parent shall have the sole right and duty to assume,and will assume,the defense
thereof, with full power to litigate, compromise, or settle the,same in its sole discretion.
In the event that any action or proceeding is brought against any Indemnified Persons with
respect to which indemnity may be sought hereunder, the Parent, upon written notice from the
Indemnified Persons, shall assume the investigation and defense thereof, including the
employment of counsel selected by the Parent with the consent of the Indemnified Persons,which
consent shall not be unreasonably withheld, and shall assume the payment of all expenses related
thereto, with full power to litigate, compromise or settle the same in its sole discretion; provided •
that the Indemnified Persons shall have the right to review and approve or disapprove any such
compromise or settlement, which shall not be unreasonably withheld. Each Indemnified Person
30
Pag f497
shall have the right to employ separate counsel in any such action or proceeding and participate in
the investigation and defense thereof. The Parent shall pay the reasonable fees and expenses of
such separate counsel; provided, however, that such Indemnified Persons may only employ
separate counsel at the expense of the Parent if in the judgment of such Indemnified Person a
conflict of interest exists by reason of common representation.
In no event shall Parent be liable for any special,consequential, treble or punitive damages
(but expressly excluding any consequential,punitive, special or other indirect damages if any third
party makes any claim or demand upon Indemnified Persons for damages on account of
consequential, punitive, special or other indirect damages).
The rights of any Indemnified Persons to indemnity hereunder and rights to payment of
fees and reimbursement of expenses shall survive the expiration or termination of this Agreement.
The provisions of this Section shall remain valid and in effect notwithstanding termination of this
Agreement.
INSOFAR AS ANY DOCUMENT OR INSTRUMENT ISSUED OR DELIVERED
IN CONNECTION WITH THE GRANT PURPORTS TO CONSTITUTE AN
UNDERTAKING BY, OR IMPOSE AN OBLIGATION UPON, THE PARENT TO
PROVIDE INDEMNIFICATION TO THE INDEMNIFIED PERSONS, THE
INDEMNIFICATION PROVISION OR PROVISIONS OF SUCH DOCUMENT SHALL
NOT BE DEEMED, INTERPRETED OR CONSTRUED IN ANY WAY AS A
MODIFICATION OF OR LIMITATION UPON THE PARENT'S OBLIGATIONS OR
THE RIGHTS OF THE INDEMNIFIED PERSONS UNDER THIS SECTION 7.01 AND
THE PROVISIONS OF THIS SECTION 7.01 SHALL IN EVERY RESPECT SUPERSEDE
THE INDEMNIFICATION PROVISIONS OF ANY SUCH OTHER DOCUMENT AND
SHALL APPLY THERETO AS IF FULLY SET FORTH THEREIN.
Section 7.02. Non-Liability of Issuer. Notwithstanding anything to the contrary in this
Agreement or any other document or instrument to which Issuer is a party, whether express or by
implication or construction or interpretation or otherwise, Developer, Parent and Agency each
acknowledges and agrees that NEITHER ISSUER NOR ANY ISSUER INDEMNIFIED PERSON
SHALL BE liable or obligated in any manner under this Agreement or otherwise to pay or cause
to be paid any fees, expenses or reimbursements or to make any other payments or advance funds
under this Agreement or otherwise, or incur or cause to be incurred any expense in pursuing any
course of action,in connection with the Convention Center Hotel Project or any other matter within
the scope of or contemplated by this Agreement or be liable(directly or indirectly) for any claims,
;proceedings, costs or expenses of any kind for any reason in connection with or in any way related
to this Agreement or any other document or instrument to which Issuer is a party related to the
Convention Center Hotel Project, its fmancing, development, operation, management or
otherwise, EXCEPT ONLY TO THE EXTENT that moneys are held by the Bond Trustee and
available therefor as expressly set forth hereunder and in accordance with the Bond Indenture, and
provided, that Issuer shall not be required to incur any expense or liability in pursuing any claim
against such moneys for the benefit of Parent or any other Person. Parent further acknowledges
and agrees that it must adhere to the provisions hereof and of the Bond Indenture in requesting
disbursements from Funded Grant Amount held by the Bond Trustee for the Grant and to the extent
that funds are available therefor under the priority of payments set forth in the Bond Indenture.
3I
Pag2497
Section 7.03. Issuer's Performance.
(a) None of the provisions of this Agreement or the Bond Indenture shall
require Issuer to expend or risk its own funds or otherwise to incur financial liability in the
performance of any of its duties or in the exercise of any of its rights or powers hereunder
or thereunder, unless payable from the Trust Estate (as defined in the Bond Indenture), or
unless Issuer shall first have been adequately indemnified to its satisfaction against the
cost, expense, and liability which may be incurred thereby. Issuer shall not be under any
obligation hereunder or under the Bond Indenture to perform any administrative service
with respect to the Bonds, the Grant, or the Convention Center Hotel (including, without
limitation, record keeping and legal services), it being understood that such services shall
be performed or provided by the Bond Trustee or the Parent. Issuer covenants that it will
faithfully perform at all times any and all covenants, undertakings, stipulations, and
provisions expressly contained in this Agreement, the Bond Indenture, and any and every
Bond executed, authenticated and delivered under the Bond Indenture;provided,however,
that Issuer shall not be obligated to take any action or execute any instrument pursuant to
any provision hereof unless and until it shall have (i) been directed to do so in writing by
the Parent, the Bond Trustee, or the Agency having the authority to so direct; (ii) received
from the Person requesting such action or execution assurance satisfactory to Issuer that
Issuer's expenses incurred or to be incurred in connection with taking such action or
executing such instrument have been or will be paid or reimbursed to Issuer; and (iii) if
applicable,received in a timely manner the instrument or document to be executed,in form
and substance satisfactory to Issuer.
(b) In complying with any provision herein or in the Bond Indenture, including
but not limited to any provision requiring Issuer to "cause" another Person to take or omit
any action, Issuer shall be entitled to rely conclusively (and without independent
investigation or verification) (i) on the faithful performance by the Bond Trustee, the
Agency, or the Parent, as the case may be, of their respective obligations hereunder and,
with respect to the Bond Trustee or the Parent, as the case may be, under the Bond
Indenture; and(ii)upon any written certification or opinion furnished to Issuer by the Bond
Trustee,Agency, or the Parent, as the case may be. In acting, or in refraining from acting,
under this Agreement, Issuer may conclusively rely on the advice of its counsel. Issuer
shall not be required to take any action hereunder or under the Bond Indenture that it
reasonably believes to be unlawful or in contravention hereof or thereof.
(c) Issuer acknowledges the limitations of the Bond Indenture and hereby
covenants and agrees, to the extent reasonably within its control,'to comply with all terms
and conditions herein and therein, including any restrictions on the use of the proceeds of
the Bonds or the Grant.
ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.01. Event of Default. An"Event of Default"under this Agreement shall consist
of the breach of any covenant, agreement, representation, provision, or warranty(that has not been
32
Pag1S497
cured prior to the expiration of any applicable grace period or notice and cure period contained in
this Agreement or such other documents, as applicable) contained in this Agreement; provided,
however, that it is expressly agreed by the parties that no failure by the Developer to comply with
the Lease Agreement shall constitute or give rise to an "Event of Default" hereunder, it being
acknowledged by each party hereto that the sole remedy for any such failure shall be as set forth
in the Lease Agreement
Section 8.02. Remedies. Upon the occurrence of any Event of Default by or with respect
to one of the parties hereto (the "Defaulting Party"), each of the other parties hereto (the "Non-
Defaulting Party")shall have the right(exercisable by the giving of written notice to the Defaulting
Party)to pursue all remedies available to the Non-Defaulting Party under applicable law as a result
of such Event of Default (provided however that so long as any Bonds are outstanding under the
Bond Indenture, termination of this Agreement shall not be a remedy available to the Non-
Defaulting Party), if the Defaulting Party fails to remedy such Event of Default within five (5)
days after its receipt of notice to remedy if such default relates to the payment of a sum of money
and, in all other cases, within thirty (30) days after its receipt of notice to remedy; provided,
however, that if such Event of Default be of a non-monetary nature and if it cannot reasonably be
remedied within said thirty(30)day period, then such thirty(30) day period shall be deemed to be
extended for such additional period as may reasonably be required to remedy the same if the
Defaulting Party shall promptly commence to remedy upon receipt of notice from the Non-
Defaulting Party and shall continue therewith with due diligence. Notwithstanding the foregoing,
upon the occurrence and continuance of an Event of Default by the Parent or the Issuer,the Agency
shall not have available as a remedy withholding or reducing the Semi-Annual Installment
Payments. The Agency hereby acknowledges that the Agency shall continue to have the obligation
to timely pay the Semi-Annual Installment Payments in full to the Bond Trustee regardless of the
occurrence or continuance of any Event of Default hereunder. Notwithstanding the foregoing, if
the Issuer or the Bond Trustee fails to make the Grant available to Parent as contemplated herein
and in the Bond Indenture,the Agency shall have the right to refrain from making the Semi-Annual
Installment Payments.
Section 8.03. No Acceleration. In no event shall the Payments be subject to acceleration
for any reason.
Section 8.04. Liens, Security Interests. The Agency and the Bond Trustee agree and
acknowledge that this Agreement does not create any lien on or security interest in the Convention
Center Hotel, including, without Iimitation, the leasehold estate under the Lease Agreement.
ARTICLE IX
GENERAL PROVISIONS
Section 9.01. Non-liability of Agency Officials. No member, official or employee of the
Agency shall be personally liable to the Parent, the Developer, to the Issuer or to any person or
entity with whom the Parent, the Developer or the Issuer shall have entered into any contract, or
to any other Person, in the event of any default or breach by the Agency, or for any amount which
may become due to the Parent, the Developer, the Issuer or any other person or entity under the
terms of this Agreement.
33
PagN54497
Section 9.02. Force Majeure. No party, to this Agreement shall be deemed in default
hereunder where such a default is based on a delay in performance as a result of a "Force Majeure
Event" as such term is defined in the Lease Agreement; provided, however, that the extension of
time granted for any delay caused by any of the foregoing shall not exceed the actual period of
such delay.
Section 9.03. Notices. All notices to be given hereunder shall be in writing and personally
delivered or delivered by an air courier service utilizing return receipts to the parties at the
following addresses (or to such other or further addresses as the parties may designate by like
notice similarly sent) and such notices shall be deemed given and received for all purposes under
this Agreement on the date actually received if sent by personal delivery or air courier service,
except that notice of a change in address shall be effective only upon receipt.
to Agency: Miami Beach Redevelopment Agency
1700 Convention Center Drive
Miami Beach, Florida 33139
Telephone: [( ) -_1
E-mail: ericcarpenter(miamibeachfl.goy
Attention: Executive Director
with copy to:
Miami Beach Redevelopment Agency
1700 Convention Center Drive
Miami Beach, Florida 33139
Tel: (305) 673-7470
E-mail: RicardoDopico@miamibeachfl.gov
Attention: General Counsel
to Parent: [ 1
[ 1
[ 1
Telephone: [( ) - 1
E-mail: [ ]
Attention: [ 1
to Issuer: [ 1
[ 1
[
Telephone: [( ) - ]
E-mail: [ 1
Attention: [ 1
to County: Miami-Dade County
111 NW 1st Street, 22nd Floor
Miami, FL 33128
Telephone: 305-375-5143
34
Pagg497
Email: David.Clodfelter@miamidade.gov
miainidade.gov
Attention: Chief Budget Officer& Director,
Office of Management& Budget
To City: City of Miami Beach
1700 Convention Center Drive
Miami Beach, FL 33139
Attention: City Manager
Section 9.04. Time. Time is of the essence in the performance by any party of its
obligations hereunder.
Section 9.05. Entire Agreement. This Agreement constitutes the entire understanding
and agreement between the parties and supersedes all prior negotiations and agreements between
them with respect to all or any of the matters contained herein.
Section 9.06. Amendment. This Agreement may be amended by the parties hereto only
upon the execution of a written amendment or modification signed by the parties. Notwithstanding
the foregoing, the Executive Director of the Agency is authorized to approve, in his or her sole
discretion, any"technical" changes to this Agreement. Such"technical" changes include without
limitation non-material modifications to legal descriptions and surveys, ingress and egress, and
easements and rights of way, as long as such modifications do not involve any financial obligation
or liability to the Agency or the City. For the avoidance of doubt, nothing herein shall preclude
the Executive Director, in his or her reasonable discretion, from seeking direction from the Board,
or electing to have the Board determine, any matter arising out of or related to this Agreement,
including,without limitation, the approval of any proposed"technical"changes to this Agreement.
Section 9.07. Waivers. Except as otherwise provided herein, all waivers, amendments or
modifications of this Agreement must be in writing and signed by all parties. Any failures or
delays by any party in insisting upon strict performance of the provisions hereof or asserting any
of its rights and remedies as to any default shall not constitute a waiver of any other default or of
any such rights or remedies. Except with respect to rights and remedies expressly declared to be
exclusive in this Agreement, the rights and remedies of the parties hereto are cumulative, and the
exercise by any party of one or more of such rights or remedies shall not preclude the exercise by
it, at the same or different times, of any other rights or remedies for the same default or any other
default by any other party.
Section 9.08. Indemnification of Agency. The indemnification in this Section 9.08,shall
not apply to any loss, claim, action, damage, injury, liability,cost and expense of whatsoever kind
or nature(including without limitation attorneys' fees and costs)related to any demands, suits and
actions covered in Section 7.01 herein.
The Parent shall indemnify, hold harmless and defend the Agency from and against any
loss, claim, action, damage, injury, liability, cost, and expense of whatsoever kind or nature
(including without limitation attorneys' fees and costs) related to any demands, suits and actions
of any kind brought against the Agency or other damages or losses incurred or sustained, or
claimed to have been incurred or sustained, by any person or entity arising out of or in connection
35
Pag a04 497
with any negligent act or omission or willful misconduct by the Developer or the Parent, or either
of their respective contractors, subcontractors, agents, officers, employees, representatives,
successors or assigns in connection with the Convention Center Hotel. The term"Agency"as used
in this Section 9.08 shall include all officers, Board members, employees, representatives, agents,
successors and assigns of the Agency, as applicable. These indemnification obligations shall
survive the expiration or termination of this Agreement. The term "Parent," "Developer" and
"Issuer" as used in this Section 9.08 shall include all officers, board members, members,
employees, representatives, agents, successors and assigns of the Parent, the Developer and the
Issuer, as applicable.
Section 9.09. Additional Indemnification of Agency, City, and County. The Parent
agrees to defend, indemnify and hold the Agency, the County, and the City, as well as their
respective officers, employees, agents and representatives (the "Agency Indemnified Parties")
harmless from and against any and all damage, liability, lien, loss,cost or expense("Loss")arising
or accruing from or resulting by reason of any and all claims of any person or entity relating to the
validity of this Agreement or of any action taken by the Agency Indemnified Parties with respect
to the negotiation or approval of(a) this Agreement or the Grant (and Direct Grant, if applicable)
and (b) any other document or legal instrument related in any way to this Agreement or the Grant
or Direct Grant, if applicable (but only to the extent such claim arises out of this Agreement or the
Grant or Direct Grant and specifically excluding any future documents or legal instruments
pertaining to the Lease Agreement, including, without limitation, estoppel certificates and
recognition agreements), except to the extent such Loss is caused by a breach of any contractual
obligation of any of the Indemnified Parties(including, without limitation, a breach by the Agency
of any funding obligation hereunder). The indemnity set forth in this Section 9.09 includes all costs
and expenses, including reasonable attorneys' and paralegals' fees and costs (including reasonable
fees and costs of the Agency's, the City's and the County's internal legal staff), at trial, appellate
and post judgment proceedings, whether by judgment, settlement or otherwise. The foregoing
indemnity obligations of Parent shall survive the expiration, full performance, or termination of
this Agreement.
Section 9.10. Severability. The invalidity, illegality or unenforceability of any one or
more of the provisions of this Agreement shall not affect any other provisions of this Agreement,
but this Agreement will be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
Section 9.11. Compliance With State and Other Laws. In the performance of this
Agreement, the Parent must comply with any and all applicable federal, state and local laws,rules
-and regulations, as the same exist and may be amended from time to time. Such laws,rules and
regulations include, but are not limited to, Chapter 119, Florida Statutes (the Public Records Act)
and Section 286.011, Florida Statutes, (the Florida Sunshine Law). If any of the obligations of
this Agreement are to be performed by a subcontractor, the provisions of this Section shall be
incorporated into and become a part of the subcontract.
Section 9.12. [RESERVED].
•
Section 9.13. Public Entity Crimes Notice. In conformity with the requirements of
Section 287.133, Florida Statutes, the parties agree as follows:
36
Pag0497
The parties are aware and understand that a person or affiliate who has been placed
on the State of Florida Convicted Vendor List, following a conviction for a public
entity crime, may not submit a bid on a contract to provide any goods or services
to a public entity; may not submit a bid on a contract with a public entity for the
construction or repair of a public building or public work; may not submit bids on
leases of real property to a public entity; may not be awarded or perform work as a
contractor, supplier, subcontractor, or consultant under a contract with any public
entity; and may not transact business with any public entity, in excess of
$35,000.00, for a period of 36 months from the date of being placed on the
Convicted Vendor List.
Section 9.14. Incorporation by Reference. All exhibits and other attachments to this
Agreement that are referenced in this Agreement are by this reference made a part hereof and are
incorporated herein.
Section 9.15. Order of Precedence. In the event of any conflict between or among the
provisions of this Agreement and those of any exhibit attached hereto or of any amendment, the
priority, in decreasing order of precedence shall be: first, any fully executed amendment; second,
provisions in this Agreement; and third, exhibits to this Agreement.
Section 9.16. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, and all of such counterparts together shall constitute
one and the same instrument. Facsimiled, scanned or photocopied signatures shall be deemed
equivalent to original signatures.
Section 9.17. Independent Contractor. In the performance of this Agreement,the Parent
will be acting in the capacity of an independent contractor and not as an agent, employee, partner,
joint venturer, or association of the Agency. The Parent, the Developer and their respective
employees or agents shall be solely responsible for the means, method, technique, sequences and
procedures utilized by the Parent and the Developer, as the case may be, in the performance of this
Agreement and the Lease Agreement.
Section 9.18. Retention of Records/Audit. The Parent and the Issuer agree:
(a) to establish and maintain books, records and documents (including
electronic storage media) sufficient to reflect all income and expenditures of funds
provided by the Agency under this Agreement;
(b) to retain, with respect to the Convention Center Hotel, all client records,
financial records, supporting documents, statistical records, and any other documents
(including electronic storage media) pertinent to this Agreement for a period of six years
after the date of final Payment by the Agency under this Agreement. If an audit has been
initiated and audit fmdings have not been resolved at the end of six years, the records shall
be retained until resolution of the audit findings or any litigation which may be based on
the terms of this Agreement, at no additional cost to the Agency;
(c) upon demand, at no additional cost to the Agency, to facilitate the
duplication and transfer of any records or documents during the required retention period;
37
Pag8497
(d) to assure that these records shall be subject at all reasonable times to
inspection, review, copying, or audit by personnel duly authorized by the Agency,
including but not limited to its auditors;
(e) at all reasonable times for as long as records are maintained, to allow
persons duly authorized by the Agency, including but not limited to its auditors, full access
to and the right to examine any of the Parent's, Developer's and/or the Issuer's contracts
and related records and documents, regardless of the form in which kept;
(f) to ensure that all related party transactions are disclosed to the Agency;
(g) to include the aforementioned audit, inspections, investigations and record
keeping requirements in all subcontracts and assignments of this Agreement and the
Interlocal Agreement;
(h) upon reasonable prior notice and during regular business hours, to permit
persons duly authorized by the Agency, including but not limited to its auditors, to inspect
and copy any records, papers, documents, facilities, goods and services of the Parent,
Developer and Issuer that are relevant to this Agreement, and to interview any employees
and subcontractor employees of the Parent or the Developer to assure the Agency of the
satisfactory performance of the terms and conditions of this Agreement. Following such
review, the Agency will deliver to the Parent, the Developer or the Issuer, as applicable, a
written report of its findings and request for development by the Parent, the Developer or
the Issuer, as applicable, of a corrective action plan where appropriate. The Parent and the
Issuer hereby agree to timely correct, or cause to be timely corrected, all deficiencies
identified in the corrective action plan;
(i) additional monies due as a result of any audit or annual reconciliation shall
be paid within 30 days of date of the Agency' s invoice; and
(j) should the annual reconciliation or any audit reveal that the Parent, the
Developer or the Issuer owe the Agency additional monies, and the Parent, the Developer
or the Issuer, as applicable, do not make restitution within 30 days from the date of receipt
of written notice from the Agency, the Agency shall be entitled to pursue any remedies
available to the Agency;provided however that the Agency shall in no event have the right
to terminate this Agreement or to reduce the amount or otherwise stop payment of the
Semi-Annual Installment Payments. No payment made by the Parent, the Developer or
the Issuer under this Section 9.18 shall constitute a waiver by the Parent, the Developer or
the Issuer of their right to later contest the validity or correctness of such payment.
Section 9.19. Non-Merger. None of the terms, covenants, agreements or conditions set
forth in this Agreement shall be deemed to be merged with any deed conveying title to the Hotel
Parcel, if applicable.
Section 9.20. Exemption of City and County. Neither this Agreement nor the
obligations imposed upon the Agency hereunder shall be or constitute an indebtedness of the City
or County within the meaning of any constitutional, statutory, or charter provisions related thereto,
38
Pag1 8497
nor shall this Agreement require the City or County to levy ad valorem taxes, make any payments
using City or County funds, or constitute a lien upon any properties of the City or County.
Section 9.21. Parties to Agreement; Successors and Assigns. This is an agreement
solely among the Issuer, the Agency, and the Parent. The execution and delivery hereof shall not
be deemed to confer any rights or privileges or obligations on any person not a party hereto (other
than the Bond Trustee, the Indemnified Persons and the Indemnified Parties) except as set forth
herein;provided,however,that the Parent shall assign this Agreement in its entirety after the Issuer
shall have issued the Bonds to a successor in interest in connection with a sale of the Convention
Center Hotel as contemplated in Section 2.04, above. Nothing herein is intended to modify any
requirements that Parent,Developer or any of their respective Affiliates must satisfy in connection
with any Transfer pursuant to the Lease Agreement, including without limitation compliance with
the provisions in Article V. Parent shall provide documentation in form and content acceptable to
the Executive Director of the Agency in his or her reasonable discretion that any such assignee has
the financial ability to meet the obligations proposed to be assigned and undertaken pursuant to
this Agreement, and that the proposed assignee has assumed Parent's obligations under this
Agreement. Any assignee shall enter into an assignment and assumption agreement with Parent
(or subsequent assignee) in form and content acceptable to the Executive Director of the Agency
in his or her reasonable discretion. This Agreement shall be binding upon the Parent and the
Parent's successors and assigns, and shall inure to the benefit of the Agency and the Issuer, and
their respective successors and assigns.
Section 9.22. Venue; Applicable Law. All legal actions arising out of or connected with
this Agreement must be instituted in the Circuit Court of Miami-Dade County, Florida, or in the
U.S. District Court for the Southern District of Florida, Miami Division. The laws of the State of
Florida shall govern the interpretation and enforcement of this Agreement. Each party shall be
responsible for its own attorneys' fees and costs in connection with any action to enforce the terms
of this Agreement and/or the other agreements attached hereto.
Section 9.23. Recordation. A notice setting forth the obligations of the Parent with
respect to Section 3.02 of this Agreement shall be recorded in the Public Records of Miami-Dade
County, Florida, within thirty (30) days of the Effective Date.
Section 9.24. Further Assurances. The Issuer and the Parent will, on request of the
Agency, and the Agency will, on request of the Issuer or the Parent:
(a) promptly correct any defect, error or omission herein or in any documents
executed in connection herewith;
(b) execute, acknowledge, deliver, procure, record or file such further
instruments and do such further acts necessary,desirable or proper to carry out the purposes
of this Agreement; and
(c) provide such certificates, documents, reports, information, affidavits and
other instruments and do such further acts necessary, desirable or proper to carry out the
purposes of this Agreement.
39
Pag6497
Section 9.25. Construction. All parties acknowledge that they have had meaningful input
into the terms and conditions contained in this Agreement. The Parent and the Issuer further
acknowledge that they have had ample time to review this Agreement and related documents with
counsel of its choice. Any doubtful or ambiguous provisions contained herein shall not be
construed against the party who drafted the Agreement.
Section 9.26. Headings. The captions and headings used in this Agreement are for
convenience only and do not in any way limit, amplify, or otherwise modify the provisions of this
Agreement.
Section 9.27. Further Authorizations. The parties acknowledge and agree that the
Executive Director, or his or her designee, is hereby authorized to execute any and all other
contracts and documents and otherwise take all necessary action in connection with this
Agreement.
Section 9.28. [RESERVED].
Section 9.29. Survival. The provisions of this Agreement and the Bond Indenture and
any other document in connection with the issuance of the Bonds and making of the Grant to which
Issuer is a party concerning (a) the tax-exempt status of the Bonds (including, but not limited to,
provisions concerning rebate); (b) the interpretation of this Agreement; (c) governing law,
jurisdiction and venue; (d) Issuer's right to rely on written representations of others contained
herein or in any other document or instrument issued or entered into in respect of the Bonds,
regardless of whether Issuer is a party thereto; (e) the indemnification rights and exculpation from
liability of Issuer and the Indemnified Persons; and (f) any other provision of this Agreement not
described or enumerated above that expressly provides for its survival, shall survive and remain in
full force and effect notwithstanding the payment or redemption in full,or defeasance of the Bonds,
the discharge of the Bond Indenture, and the termination or expiration of this Agreement.
Section 9.30. Estoppel Certificate. The parties agree from time to time, but no more
frequently than twice annually, within not more than 10 business days after receipt of written
request from the other party, to execute, acknowledge and deliver to the other party a statement
("Estoppel Certificate") in writing, certifying: (a) this Agreement is unmodified and in full force
and effect, or in full force and effect as modified, and stating the modification; (b) that there are
not, to that party's actual knowledge, any uncured defaults, or events which with the passage of
time would become a default, on the part of the other party, or specifying existing defaults; and(c)
any other matters required by lenders or preferred equity investors providing financing or
investment for the Convention Center Hotel Project. Any such Estoppel Certificate delivered
pursuant to this Section 9.30 may be relied upon by any prospective purchaser or mortgagee of all
or any portion of the Convention Center Hotel, or any prospective assignee of any such mortgagee,
or any ground lessor under any ground lease with respect to any portion of the Convention Center
Hotel.
[Remainder of page intentionally left blank]
40
Page f497
IN WITNESS WHEREOF, this Agreement is executed the day and year above written.
MIAMI BEACH REDEVELOPMENT
AGENCY, a public agency and body corporate
created pursuant to Section 163.356, Florida
Statutes
By
Name
Title
MB MIXED USE INVESTMENT HOLDINGS,
LLC, a Florida limited liability company
By
Name
Title
PUBLIC FINANCE AUTHORITY
By
Name
Title
The undersigned joins solely for purposes of
agreeing to Section 2.04 of this Agreement:
MB MIXED USE INVESTMENT, LLC, a
Florida limited liability company
By
Name
Title
Pag2497
EXHIBIT A
LEGAL DESCRIPTION OF HOTEL PARCEL
BEING A PARCEL OF LAND LYING IS SECTION 34, TOWNSHIP 53 SOUTH, RANGE 42 EAST, CITY OF MIAMI BEACH,
MIAMI-DADE COUNTY, FLORIDA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCE AT THE SOUTHEAST CORNER OF LOT 1. BLOCK 22, ACCORDING TO THE AMENDED PLAT OF GOLF
COURSE SUBDIVISION OF THE ALTON BEACH REALTY COMPANY. AS RECORDED IN PLAT BOOK 5, PAGE 26, OF THE
PUBUC RECORDS OF MIAMI-DADE COUNTY. FLORIDA; THENCE N88'00'53"E. ALONG THE EASTERLY PROLONGATION
OF THE NORTHERLY RIGHT OF WAY LINE OF 17TH STREET, SAID RIGHT OF WAY BEING 70 FEET IN WIDTH AS
SHOWN ON SAID PLAT BOOK 6, PAGE 26, A DISTANCE 368.16 FEET; THENCE NO2'04'00"W, ALONG THE EASTERN
EDGE OF AN EXISTING 15 FEET 'WIDE SIDEWALK LYING ON THE EAST SIDE OF CONVENTION CENTER DRIVE AS NOW
LAID OUT AND IN USE, A DISTANCE OF 39.94 FEET TO THE POINT OF BEGINNING; THENCE CONTINUE NO2'04'00"W
ALONG SAID EXISTING SIDEWALK, A DISTANCE OF 238.58 FEET TO THE BEGINNING OF A CURVE CONCAVE TO THE
SOUTHEAST HAVING A RADIUS OF 40.00 FEET. A CHORD WHICH BEARS N42'58'54"E; THENCE NORTHEASTERLY
ALONG THE ARC OF SAID CURVE A DISTANCE OF 62.90 FEET, THROUGH A CENTRAL ANGLE OF 90'05'48"; THENCE
N88'01'48"E A DISTANCE OF 13.05 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT "A"; THENCE
CONTINUE N88'01'48"E A DISTANCE OF 297.49 FEET; THENCE S01'56'26"E, TO THE INTERSECTION WITH SAID
EASTERLY PROLONGATION OF THE NORTHERLY RIGHT OF WAY OF 17TH STREET, A DISTANCE OF 316.50 FEET;
THENCE S88'00'53"W, ALONG SAID EASTERLY PROLONGATION OF THE NORTHERLY RIGHT OF WAY OF 17TH STREET,
A DISTANCE OF 309.96 FEET TO THE BEGINNING OF A CURVE CONCAVE TO THE NORTHEAST HAVING A RADIUS OF
40.00 FEET, A CHORD WHICH BEARS N47'O1'33"W; THENCE NORTHWESTERLY ALONG THE ARC SAID CURVE A
DISTANCE OF 62.78 FEET, THROUGH A CENTRAL ANGLE OF 89'55'08" TO THE POINT OF BEGINNING.
THE ABOVE DESCRIBED PARCEL CONTAINS 110,884 SQUARE FEET OR 2.55 ACRES MORE OR LESS.
TOGETHER WITH:
AN AIRSPACE PARCEL BEING A PARCEL OF LAND LYING IS SECTION 34, TOWNSHIP 53 SOUTH. RANGE 42 EAST.
CITY OF MIAMI BEACH, MIAMI-DADE COUNTY, FLORIDA, HAVING AS ITS LOWER BOUNDARY, A HORIZONTAL PLANE
AT ELEVATION 23.69 FEET (NORTH AMERICAN VERTICAL DATUM OF 1988), HAVING AS ITS UPPER BOUNDARY. A
HORIZONTAL PLANE AT ELEVATION 52.44 FEET (NORTH AMERICAN VERTICAL DATUM OF 1988). THE PERIMETRICAL
BOUNDARIES OF WHICH ARE MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGIN AT SAID POINT "A"; THENCE NO3'29'22"W A DISTANCE OF 53.99 FEET; THENCE N86'30'35"E A DISTANCE OF
30.00 FEET; THENCE S03'29'22"E A DISTANCE OF 54.78 FEET; THENCE 558'01'48"W A DISTANCE OF 30.01 FEET
TO THE POINT OF BEGINNING SAID POINT ALSO BEING POINT "A".
Pagfg497
EXHIBIT B
IN-KIND PUBLIC BENEFIT COMMITMENTS
1. Waiver of Junior Ballroom Rental Fees: Up to four(4) times in any twelve (12) calendar
month period, the Agency may reserve the Junior Ballroom (inclusive of access to available
pre-function space directly adjacent to the Junior Ballroom) for up to eight (8) consecutive
hours, but no less than four (4) consecutive hours, on a single day, plus usual and customary
move in/out time. Two (2) of said reservations may be made by the Agency on behalf of the
City and two (2) on behalf of the County. Such reservation shall be made in writing by
emailing the General Manager of the Convention Center Hotel directly no earlier than three
(3)months prior to the requested reservation date; provided,one(1)of the four(4)reservation
requests may be made no earlier than nine (9) months prior to the requested reservation date.
To the extent the requested date is available, all rental fees for the Junior Ballroom for such
date shall be waived. Audio-visual fees and other services shall be provided at cost. Gratuity
for Convention Center Hotel employees shall be charged at standard rates then in effect.
Banquet and catering services, shall be charged at a 20% discount off standard rates then in
effect.
2. Waiver of Conference Room Fees: The Agency may reserve breakout or board rooms at the
Convention Center Hotel (but specifically excluding any ballrooms) for Agency, City, or
County meetings for up to four (4) consecutive hours, on a single day. The total of all such
bookings shall not exceed twenty (20)per calendar month. Such reservation shall be made in
writing by emailing the General Manager of the Convention Center Hotel directly no earlier
than two (2) weeks prior the requested reservation date; provided, two (2) of the twenty (20)
bookings per month may be made no earlier than three(3)months and each such booking may
be for up to eight (8) consecutive hours plus usual and customary move in/out time. To the
extent the requested date is available, all rental fees for the use of the breakout or board rooms
shall be waived. Audio-visual fees and other services shall be provided at cost. Gratuity for
Convention Center Hotel employees shall be charged at standard rates then in effect. Banquet
and catering services shall be charged at a 20% discount off standard rates then in effect.
3. Public Safety Office: The Parent shall, or shall cause the Developer, or their successors to
provide the Agency with an additional approximately 250 sf within its first-floor retail area
for a City of Miami Beach Public Safety Office. This area shall be in addition to the area
allocated to the Visitor Center(approximately 1,000 square feet).
4< Reimbursement for Hotel Rooms During Weather Emergencies: Provided the
Convention Center Hotel is in a physical and operational state (and is legally permitted) to
accommodate guests, the Parent shall, or shall cause the Developer, or their successors to
provide up to 100 rooms each night for Agency, City, or County emergency personnel, as
further described below,working immediately before,during,and immediately after a weather
emergency as declared by local, state or national authorities. In such event, the County, City,
and Agency, as applicable, shall pay for their own emergency personnel's' rooms, and shall
be reimbursed, by the Parent, Developer, or their successors, one-hundred percent (100%) of
the costs associated with the rental of such rooms; however, all taxes (if applicable), fees, and
charges other than the base room rate shall remain due and payable. For the purposes of this
Pag4497
subparagraph, the term "emergency personnel" is limited to employees that: (i) show valid
employer-issued identification to the Agency-designated representative, as described herein,
confirming that they are active law enforcement or emergency and fire rescue personnel, and
(ii) appear on a written list of pre-approved employees, which list may be updated from time
to time, that's been respectively transmitted by the Agency's Executive Director or his or her
designee, the City Manager or his or her designee, and the County Mayor or his or her
designee, to the Agency-designated representative, as described herein. Bookings pursuant to
this public benefit shall be completed through an Agency-designated representative and shall
not be withheld, conditioned, or delayed. For the purposes of this paragraph, in the event that
the Agency no longer exists or is no longer operational, then the Agency-designated
representative's duties and responsibilities shall be transferred to a City-designated
representative and/or County-designated representative.
5. Complimentary Rooms for Official Delegations: Each calendar year, the Agency shall be
permitted to book up to 70 room nights with a waiver of the base room rate for the purpose of
hosting official visiting delegations (e.g., Sister City delegations)to the City or County.
6. MBSHS Culinary Arts Program: The Parent shall develop, or shall cause the Developer,
or their successors to develop and implement a program with the Miami Beach Senior High
School Culinary Arts Program, which may include interactive virtual meetings with students,
student site visits to the restaurants at the Convention Center Hotel, and such other activities
as the Convention Center Hotel and the Miami Beach Senior High School administration shall
agree upon. In addition, the Convention Center Hotel shall hold a job fair each year for junior
and senior high school students residing in the Miami-Dade County.
7. Broad Cooperation: The Parent shall use, or shall cause the Developer, or their successors
to use commercially reasonable efforts to accommodate other requests from the Agency.
Additionally, the Parent shall reasonably cooperate, or shall cause the Developer, or their
successors to reasonably cooperate and coordinate with the Agency and the Miami Beach
Convention Center to co-market and support events and initiatives.
MIAMI 11645 681.19 10223 2/3 05480
10/8/2024 11:10 AM
P-2
Pagg497
City Center RDA Financial Projection
Roll Total RDA Tax Current Annual Estimated Cumulative
Year FY Revenues Total Expenses Debt Service Projected Surplus Grant Payments Surplus After
New Grant
2023 2024 55,372,973 24,985,595 20,913,000 9,474,379 14,572,773
2024 2025 60,304,895 25,628,562 20,906,375 13,769,957 14,272,500 14,070,231
2025 2026 62,516,635 26,448,899 20,907,000 15,160,737 17,799,388 11,431,580
2026 2027 64,805,787 27,290,175 20,906,875 16,608,737 17,819,326 10,220,990
2027 2028 67,175,059 28,158,525 20,909,875 18,106,658 17,838,392 10,489,257
2028 2029 69,627,255 29,054,835 20,909,875 19,662,546 17,864,490 12,287,312
2029 2030 72,165,278 29,980,017 20,910,750 21,274,512 33,561,824
2030 2031 74,792,132 30,935,016 20,911,250 22,945,866 56,507,690
2031 2032 77,510,926 31,920,810 20,910,125 24,679,992 81,187,682
2032 2033 80,324,878 32,938,405 20,911,000 26,475,473 107,663,156
2033 2034 83,237,318 33,988,845 20,907,500 28,340,974 136,004,129
2034 2035 86,251,694 35,073,206 20,908,125 30,270,363 166,274,492
2035 2036 89,371,572 36,192,601 20,911,125 32,267,846 198,542,338
2036 2037 92,600,647 37,348,181 20,909,875 34,342,591 232,884,930
2037 2038 95,942,739 38,541,133 20,907,750 36,493,856 269,378,786
2038 2039 99,401,804 39,772,686 20,907,875 38,721,243 308,100,029
2039 2040 102,981,937 41,044,109 20,908,250 41,029,578 349,129,607
2040 2041 106,687,374 42,356,714 20,906,875 43,423,785 392,553,392
2041 2042 110,522,501 43,711,856 20,906,625 45,904,020 438,457,411
2042 2043 114,491,858 45,110,937 20,910,125 48,470,796 486,928,207
2043 2044 118,600,142 46,555,405 20,910,000 51,134,737 538,062,944
85,594,096
Page 1407 of 2497
10/18/2024
MBCC Hotel
RDA Participation Fee Analysis
Year Rent
1 $0
2 $0
3 $0
4 $0
5 $500,000
6 $515,000
7 $530,450
8 $546,364
9 $562,754
10 $579,637
11 $597,026
12 $614,937
13 $633,385
14 $652,387
15 $671,958
16 $692,117
17 $712,880
18 $734,267
19 $756,295
20 $778,984
21 $802,353
22 $826,424
23 $851,217
24 $876,753
25 $903,056
26 $930,147
27 $958,052
28 $986,793
29 $1,016,397
30 $1,046,889
31 $1,078,296
32 $1,110,645
33 $1,143,964
34 $1,178,283
35 $1,213,631
36 $1,250,040
37 $1,287,541
38 $1,326,168
39 $1,365,953
40 $1,496,931
41 $1,449,139
42 $1,492,613
43 $1,537,392
44 $1,583,513
45 $1,631,019
46 $1,679,949
47 $1,730,348
48 $1,782,258
49 $1,835,726
50 $1,890,798
51 $1,947,522
52 $2,005,948
53 $2,066,126
54 $2,128,110
$56,398,434
Page 1408 of 2497