Resolution 2025-33515RESOLUTION NO.2025-33515
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH,FLORIDA,(1)WAIVING ON A 5/7TH VOTE AND PURSUANT TO
SECTION 82-587(C)OF THE CITY CODE,THE REQUIRED ART IN PUBLIC
PLACES ("AIPP")CONTRIBUTION AND APPROPRIATION FOR THE
CONVENTION CENTER HOTEL PROJECT (THE "PROJECT")BEING
DEVELOPED PURSUANT TO THE DEVELOPMENT AND GROUND LEASE
AGREEMENT WITH MB MIXED USE INVESTMENT,LLC ("THE
DEVELOPER");(2)APPROVING THE ACCEPTANCE OF A FINANCIAL
GUARANTEE BOND IN LIEU OF THE ART IN PUBLIC PLACES ("AIPP")
CONTRIBUTION;AND (3)GRANTING THE DEVELOPER A ONE-YEAR
PERIOD FROM SITE POSSESSION TO COORDINATE WITH THE
ADMINISTRATION AND THE ART IN PUBLIC PLACES COMMITTEE ON A
SATISFACTORY PROPOSAL FOR PUBLIC ART INSTALLATION(S)WITHIN
THE HOTEL GROUNDS WHICH INSTALLATIONS SHALL BE SUBJECT TO
THE APPROVAL OF THE CITY COMMISSION.
WHEREAS,on July 25,2018,the Mayor and City Commission adopted Resolution No.
2018-30425,approving the Lease between the City of Miami Beach (the "City')and MB Mixed
Use Investment Holdings,LLC (the "Developer),approving the construction and development of
the Miami Beach Convention Center Hotel (the "Hotel Project")at the site (the "Site")located at
the northeast corner of Convention Center Drive and 17th Street as defined in the 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")to grant access to the Developer to the Site and to
certain other areas,so that the Developer could 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 Developer notified the City they were 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 Hotel
Developer's contractor mobilized on the Site and commenced the initial phases of the Early Work;
and
WHEREAS,on May 25,2022,the City approved a Fifth 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 of the Early Work Phase;and further approved a First
Amendment to the Early Access Agreement between the City 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;and
WHEREAS,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;and
WHEREAS,on November 16,2023,the Developer notified the City that they were
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,which
delayed their ability to raise the capital necessary for the full construction of the hotel project;and
WHEREAS,on November 17,2023,LTC 515-2023 advised the Mayor and City
Commission that the Developer needed additional time to secure the remaining 12%of their
capital raise for the Hotel project;and
WHEREAS,during discussions among the Redevelopment Agency ("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 12%financing deficit,stating that the project could not proceed without this
additional capital contribution due to increased construction and interest costs;and
WHEREAS,a prior Declaration of Official Intent is a legal mechanism that allows an issuer
to use its own funds initially for project expenses and later reimburse itself with the proceeds from
the sale of tax-exempt G.O.bonds;and
WHEREAS,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;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,following various meetings of the Miami-Dade Board of County
Commissioners (BCC),the City Commission and the RDA Board at which the grant agreement
among the RDA,the Developer and the Public Finance Authority was discussed,approved,and
modified,a grant agreement providing for up to $92,500,000 in funding to allow for the expeditious
development of the Hotel Project was approved by the BCC,the City Commission and the RDA
Board,with the final necessary approval occurring at the November 20,2024 meeting of the BCC;
and
WHEREAS,the Developer has successfully secured executed term sheets with the lender
for the construction loan and is now finalizing the loan documents with the selected lender,the
bond documents for the RDA grant are substantially complete,all debt and equity sources for the
full construction cost are expected to be secured by the end of March 2025,with loan closing and
site possession to follow;and
WHEREAS,the hotel is expected to open in late 2027;and
WHEREAS,Section 2.16 of the Development and Ground Lease Agreement stipulates
that the Developer shall comply with the City's Art In Public Places (AIPP)program requirements
under Section 82-536 through 82-612 of the City Code,as applicable,and shall contribute to the
City's Art in Public Places fund the total of 1.5%of the "construction cost"of the Hotel Project,as
such term is defined in Section 82-537 of the City Code,no later than date of execution of the
Hotel Project General Contract by Lessee and the Hotel Project General Contractor,as required
by the City Code;and
WHEREAS,the Developer plans to fulfill this obligation by offering specific artwork to be
installed in public areas of the hotel,instead of making a monetary contribution to the AIPP fund;
and
WHEREAS,the total value of the art installed shall meet or exceed the required 1.5%of
the construction cost,as confirmed through an appraisal;and
WHEREAS,in order to satisfy the AIPP possession condition in the Development and
Ground Lease Agreement,the Developer proposes to provide a financial guarantee bond in lieu
of the AIPP monetary contribution,which bond (or alternate form of guarantee acceptable to the
City)shall remain in place until such time as the Developer deeds the artwork to the City or pays
the amount of the required AIPP contribution (less the value of any artwork deeded to and
accepted by the City);and
WHEREAS,the proposed bond is presented in substantial form as Exhibit 1,attached to
the Commission Memorandum,and may be subject to final approval or modifications as
necessary.
NOW,THEREFORE,BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH,FLORIDA,that the Mayor and City
Commission hereby waive on a 5/7 vote and pursuant to Section 82-587(c)of the City Code,the
required AIPP contribution and appropriation for the Convention Center Hotel Project being
developed pursuant to the Development and Ground Lease Agreement with MB Mixed Use
Investment,LLC;(2)approve the acceptance of a financial guarantee bond in lieu of the AIPP
contribution;and (3)grant the Developer a one-year period from site possession to coordinate
with the administration and the AIPP Committee on a satisfactory proposal for public art
installation(s)within the hotel grounds which installations shall be subject to the approval of the
City Commission.
PASSED and ADOPTED this .2G day or Febray__,2025En
ATTEST:-ru
Rafael E.Granado,City Clerk
HAR 0 3 2025
Steven Meiner,Mayor
APPROVED AS TO
FORM &LANGUAGE
&F UTION
2)6 JoloDate
EXHIBIT A
FINANCIAL GUARANTEE BOND
Bond No.-----------
KNOW ALL MEN BY THESE PRESENTS:That we MB Mixed Use Investment,LLC,a Delaware Limited Liability
Company as Principal,and a
corporation duly authorized under the laws of the State of Florida to become surety on bonds and undertakings,
as Surety,are held and firmly bound unto the City of Miami Beach,a municipal corporation,as Obligee in the full
and juSt sum of Dollars,(lawful money Of
the United States of America (the "Penal Sum"),for which payment,well and truly to be made,the said Principal
and Surety bind themselves,their heirs,executors,successors,administrators and assigns,jointly and severally,
firmly by these presents.
WHEREAS,the said Principal and Obligee have entered into that certain Development &Ground Lease Agreement
dated July 312018 (the "Lease')and the Principal agrees to:(1)obtain approval by the City of Miami Beach
Commission,in accordance with the City of Miami Beach's Art in Public Places procedures,of Principal's proposed
donation of works of art in satisfaction of Principal's obligations under Section 2.16 of the Lease (the "Donated Art")
no later than April 1,2026 (the "First Deadline"),or pay to Obligee the amount of the Penal Sum,(less the value of
the Donated Art approved by the City of Miami Beach prior to the First Deadline)(the First Payment");and (2)to
the extent any Donated Art is approved by the City of Miami Beach prior to the First Deadline,Principal shall install
and obtain acceptance by the City of Miami Beach,in accordance with the City of Miami Beach's Art in Public
Places procedures,of the Donated Art no later than the earlier of (A)the issuance of a final certificate of occupancy
for the project required by the Lease and (B)April 1,2028 (the Second Deadline"),or pay to Obligee the amount
of the Penal Sum,less any sums previously paid to Obligee in satisfaction of Section 2.16 of the Lease and less
the value of the Donated Art accepted by the City of Miami Beach prior to the Second Deadline (the "Second
Payment").
NOW,THEREFORE,THE CONDITION OF THE OBLIGATION IS SUCH,That if the said Principal shall timely pay
to Obligee the First Payment,if any,and the Second Payment,if any,then this obligation shall be void,otherwise
it shall be and remain in full force and effect.
The term of this bond is for a period beginning on the _day of
and ending on the 1day of April,2028
PROVIDED,that regardless of the number of years this bond remains in effect,in no event shall the aggregate
liability of the Surety under this bond exceed the penal sum of this bond.
THIS BOND may be terminated by either,
(a)release by Obligee,or
(b)cancellation by either Principal and Surety to be effected by (i)giving Sixty (60)days'notice
in writing by certified mail to:City Manager,City of Miami Beach,1700 Convention Center Drive,4"
Floor,Miami Beach,Florida,33139,and (ii)Principal providing Obligee with a replacement security,
in a form reasonably acceptable to Obligee,prior to the effectiveness of such cancellation.
The Surety shall notify the Company of its obligation,if any,hereunder within sixty (60)days of notice by Company
that the Principal has failed to perform its obligation hereunder.
IN WITNESS WHEREOF,the Principal and Surety have hereunto set their hands and affixed their seals this
____day of _
Principal
MIAMI 12320683.I 102232/305480
2/11/2025 8:23 AM
Surety
,Attorney-in-Fact
Resolutions -C7 D
MIAMI BEACH
COMMISSION MEMORANDUM
TO:Honorable Mayor and Members of the City Commission
FROM:Eric Carpenter,City Manager
DATE:February 26,2025
TITLE:A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH,FLORIDA,(1)WAIVING ON A 517TH VOTE AND PURSUANT TO
SECTION 82-587(C)OF THE CITY CODE,THE REQUIRED ART IN PUBLIC
PLACES ("AIPP")CONTRIBUTION AND APPROPRIATION FOR THE
CONVENTION CENTER HOTEL PROJECT (THE "PROJECT")BEING
DEVELOPED PURSUANT TO THE DEVELOPMENT AND GROUND LEASE
AGREEMENT WITH MB MIXED USE INVESTMENT,LLC ("THE DEVELOPER");
(2)APPROVING THE ACCEPTANCE OF A FINANCIAL GUARANTEE BOND IN
LIEU OF THE ART IN PUBLIC PLACES ("AIPP")CONTRIBUTION;AND (3)
GRANTING THE DEVELOPER A ONE-YEAR PERIOD FROM SITE POSSESSION
TO COORDINATE WITH THE ADMINISTRATION AND THE ART IN PUBLIC
PLACES COMMITTEE ON A SATISFACTORY PROPOSAL FOR PUBLIC ART
INSTALLATION(S)WITHIN THE HOTEL GROUNDS WHICH INSTALLATIONS
SHALL BE SUBJECT TO THE APPROVAL OF THE CITY COMMISSION.
RECOMMENDATION
Adopt the Resolution.
BACKGROUND/HISTORY
On July 25,2018,the Mayor and City Commission adopted Resolution No.2018-30425,
approving the Lease between the City of Miami Beach (the "City")and MB Mixed Use Investment
Holdings,LLC (the "Developer"),approving the construction and development of the Miami Beach
Convention Center Hotel (the "Hotel Project")at the site (the "Site")located at the northeast corner
of Convention Center Drive and 17th Street as 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")to grant access to the Developer to the Site and to certain other areas,so
that the Developer could perform certain pre-construction activities (the "Early Work")that would
accelerate the timeline for construction of the Hotel Project.
On March 13,2020,the Developer notified the City they were asserting a Force Majeure event
and an Economic Force Majeure event with respect to the COVID-19 pandemic.
On April 14,2022,pursuant to the Early Access Agreement,the Hotel Developer's contractor
mobilized on the Site and commenced the initial phases of the Early Work.
Page 409 of 1310
On May 25,2022,the City approved a Fifth 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 of the Early Work Phase;and further approved a First Amendment to the Early
Access Agreement between the City 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 November 16,2023,the Developer notified the City that they were 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,which delayed their ability to raise the
capital necessary for the full construction of the hotel project.On November 17,2023,LTC 515-
2023 advised the Mayor and City Commission that the Developer needed additional time to
secure the remaining 12%of their capital raise for the Hotel project.Notwithstanding,the
Developer has expended approximately $20 million in private funding to complete the Early Work.
During discussions among the Redevelopment Agency ("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 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 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 2015A4 Bonds")and any bonds issued to refund those bonds.
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.
Following various meetings of the Miami-Dade Board of County Commissioners ("BCC"),the City
Commission and the RDA Board at which the grant agreement among the RDA,the Developer
and the Public Finance Authority was discussed,approved,and modified,a grant agreement
providing for up to $92,500,000 in funding to allow for the expeditious development of the Hotel
Project was approved by the BCC,the City Commission and the RDA Board,with the final
necessary approval occurring at the November 20,2024 meeting of the BCC.
The Developer has successfully secured executed term sheets with the lender for the construction
loan and is now finalizing the loan documents with the selected lender.The bond documents for
the RDA grant are substantially complete.All debt and equity sources for the full construction cost
are expected to be secured by the end of March 2025.Loan closing and site possession will
follow.Test piles are scheduled to begin in March,followed by augercast pile foundation work in
April.The hotel is expected to open in late 2027.
ANALYSIS
Section 2.16 of the Development and Ground Lease Agreement stipulates that the Developer
shall comply with the City's Art In Public Places ("AIPP")program requirements under Section 82-
536 through 82-612 of the City Code,as applicable,and shall contribute to the City's AIPP fund
the total of 1.5%of the "construction cost"of the Hotel Project,as such term is defined in Section
82-537 of the City Code,no later than date of execution of the Hotel Project General Contract by
Lessee and the Hotel Project General Contractor,as required by the City Code.
Page 410 of 1310
The Developer plans to fulfill this obligation by offering specific artwork to be installed in public
areas of the hotel,instead of making a monetary contribution to the AIPP fund.The total value of
the art installed shall meet or exceed the required 1.5%of the construction cost,as confirmed
through an appraisal.
In order to satisfy the AIPP possession condition in the Development and Ground Lease
Agreement,the Developer proposes to provide a financial guarantee bond in lieu of the Al PP
monetary contribution,which bond (or alternate form of guarantee acceptable to the City)shall
remain in place until such time as the Developer deeds the artwork to the City or pays the amount
of the required AIPP contribution (less the value of any artwork deeded to and accepted by the
City).The proposed bond is presented in substantial form as Exhibit A,attached herein,and may
be subject to final approval or modifications as necessary.
FISCAL IMPACT STATEMENT
N/A
Does this Ordinance require a Business Impact Estimate?
(FOR ORDINANCES ONLY)
If applicable,the Business Impact Estimate (BIE)was published on:
See BIE at:https://www.miamibeachfl.gov/city-hall/city-clerk/meeting-notices/
FINANCIAL INFORMATION
CONCLUSION
The Administration recommends approving a financial guarantee bond in lieu of the AIPP
contribution and granting the Developer a one-year period from site possession to collaborate
with the Administration and the AIPP Committee to develop a satisfactory public art proposal for
installation(s)within the hotel grounds.The proposed art package,as endorsed by the AIPP
Committee,will then be presented to the City Commission for final approval.The financial
guarantee bond (or alternate form of guarantee acceptable to the City)shall remain in place until
the Developer deeds the artwork to the City or pays the amount of the required AIPP contribution
(less the value of any artwork deeded to and accepted by the City).
Applicable Area
Citywide
Is this a "Residents Right to Know"item,
pursuant to City Code Section 2-17?
No
Is this item related to a G.O.Bond
Project?
No
Was this Agenda Item initially requested by a lobbyist which,as defined in Code Sec.2-481,
includes a principal engaged in lobbying?No
Page 411 0f 1310
If so,specify the name of lobbyist(s)and principal(s):
Department
City Manager
Sponsor(s)
Co-sponsor(s)
Condensed Title
Convention Center Hotel -Financial Guarantee Bond in Lieu of AIPP Monetary Contribution.
CM
Previous Action (For City Clerk Use Only)
Page 412 of 1310
EXHIBIT A
FINANCIAL GUARANTEE BOND
[n][yo,
KNOW ALL MEN BY THESE PRESENTS:That we MB Mixed Use Investment,LLC,a Delaware Limited Liability
o rpa0\/qg Erin[pal,and a
corporation duly authorized under the laws of the State of Florida to become surety on bonds and undertakings,
as Surety,are held and firmly bound unto the City of Miami Beach,a municipal corporation,as Obligee in the full
and just sum of Dollars,($)lawful money of
the United States of America (the "Penal Sum"),for which payment,well and truly to be made,the said Principal
and Surety bind themselves,their heirs,executors,successors,administrators and assigns,jointly and severally,
firmly by these presents.
WHEREAS,the said Principal and Obligee have entered into that certain Development &Ground Lease Agreement
dated July31,2018[the "Lease')and the Principal agrees to:(1)obtain approval by the City of Miami Beach
Commission,in accordance with the City of Miami Beach's Art in Public Places procedures,of Principal's proposed
donation of works of art in satisfaction of Principal's obligations under Section 2.16 of the Lease (the "Donated Art")
no later than April 1,2026 (the "First Deadline"),or pay to Obligee the amount of the Penal Sum,(less the value of
the Donated Art approved by the City of Miami Beach prior to the First Deadline)(the First Payment");and (2)to
the extent any Donated Art is approved by the City of Miami Beach prior to the First Deadline,Principal shall install
and obtain acceptance by the City of Miami Beach,in accordance with the City of Miami Beach's Art in Public
Places procedures,of the Donated Art no later than the earlier of (A)the issuance of a final certificate of occupancy
for the project required by the Lease and (B)April 1,2028 (the "Second Deadline"),or pay to Obligee the amount
of the Penal Sum,less any sums previously paid to Obligee in satisfaction of Section 2.16 of the Lease and less
the value of the Donated Art accepted by the City of Miami Beach prior to the Second Deadline (the "Second
Payment").
NOW,THEREFORE,THE CONDITION OF THE OBLIGATION IS SUCH,That if the said Principal shall timely pay
to Obligee the First Payment,if any,and the Second Payment,if any,then this obligation shall be void,otherwise
it shall be and remain in full force and effect.
The term of this bond is for a period beginning on the _day Of
and ending on the 1day of April,2028.
PROVIDED,that regardless of the number of years this bond remains in effect.in no event shall the aggregate
liability of the Surety under this bond exceed the penal sum of this bond.
THIS BOND may be terminated by either,
(a)release by Qbligee.,or
(b)cancellation by either Principal and Surety to be effected by (i)giving Sixty (60)days'notice
in writing by certified mail to:City Manager,City of Miami Beach,1700 Convention Center Drive,4
Floor,Miami Beach,Florida,33139,and (ii)Principal providing Obligee with a replacement security,
in a form reasonably acceptable to Obligee,prior to the effectiveness of such cancellation.
The Surety shall notify the Company of its obligation,if any,hereunder within sixty (60)days of notice by Company
that the Principal has failed to perform its obligation hereunder.
IN WITNESS WHEREOF,the Principal and Surety have hereunto set their hands and affixed their seals this
_____day of _
Principal
MIAMI 12320683.1 102232/305480
2/11/2025 8.23 AM
Surety
Page 413 of 1310
.Attorney-in-Fact