C7L-Authorize Condominiumization Of City-Owned Property At 1661 Pennsylvania AveCOMMISSION ITEM SUMMARY
Condensed Title:
Resolution authorizing the City Manager and the City Attorney's Office to proceed with the process of
condominiumizing the City-owned property located at 1661 Pennsylvania Avenue, Miami Beach, Florida.
Ke Intended Outcome Su orted:
Ensure well-maintained facilities.
Supporting Data (Surveys, Environmental Scan, etc.):
The 2007 Community Satisfaction Survey noted 82% of North Beach residents rated recent capital
ro·ects com leted as "excellent" or" ood" com ared to 89% of residents ci ide
Issue:
Should the City of Miami Beach proceed with the condominiumization of the Pennsylvania Avenue
ara e?
Item Summary/Recommendation:
On October 10, 2010, the City completed the construction of the Pennsylvania Avenue Garage, located at
1661 Pennsylvania Avenue. This project included 550 public parking spaces, as well as approximately 7,655
square feet of retail space available for lease. Through the City's broker, a potential private tenant for the retail
space was identified, and on April 13, 2011, the Mayor and City Commission of the City of Miami Beach
approved a retail lease agreement between the City and Penn 17, LLC, for use of the ground floor retail
space .. So as not to jeopardize the tax exempt status of the parking garage, the Administration recommends
separating the retail area of the building from the garage portion of the building via a condominiumization
process, similar to what has been structured for other City-owned facilities containing retail and/or commercial
tenants, including 1701 Meridian Avenue and 1130 Washington Avenue. The private tenant is responsible for
paying any real estate taxes assessed for their space,
The City Attorney's office is in the process of finalizing the necessary forms to proceed with the
condominiumization of the retail space, pursuant to which the City would retain full ownership of the
condominium unit; the Mayor and Commissioners will serve as the condominium association board.
Advisory Board Recommendation:
I n/a
Financial Information:
Source of Amount Account Approved
Funds: 1 n/a
D 2
3
4
OBPI Total
Financial Impact Summary:
Ci Clerk's Office Le islative Trackin
ent Bonde, Asset Management Ext #6363
Si n-Offs:
Department Director Assistant City Manager City Manager
AP HF JMG
an11\consent\Condominiumization 1661 Penn Ave.doc
MIAMI BEACH AGENDA ITEM __ G_7_f-__
DATE (-/(-/2-181
MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
TO:
FROM:
DATE:
SUBJECT:
COMMISSION MEMORANDUM
Mayor Matti Herrera Bower and Members of the City Commission
Jorge M. Gonzalez, City Manager J1( January 11, 2012
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, AUTHORIZING THE CITY MANAGER AND CITY ATTORNEY'S
OFFICE TO PROCEED WITH, AND TAKE ANY AND ALL REQUIRED ACTIONS
RELATIVE TO THE CONDOMINIUMIZATION OF THE CITY-OWNED PROPERTY
LOCATED AT 1661 PENNSYLVANIA AVENUE, MIAMI BEACH, FLORIDA.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
BACKGROUND
On October 10, 2010, the City completed construction of the Pennsylvania Avenue Garage, located
at 1661 Pennsylvania Avenue. This project included 550 public parking spaces, as well as
approximately 7,655 square feet of retail space available for lease. Through the City's broker, a
potential private tenant for the retail space was identified, On April 13, 2011, the Mayor and City
Commission approved the execution of a retail lease agreement between the City and Penn 17,
LLC, for use of the ground floor retail space.
ANALYSIS
As a municipal parking facility, the structure should remain exempt from having to pay property
taxes, comparable to other municipally-owned parking facilities and buildings that serve a public
purpose. However, because of the commercial retail space on the premises, the entire structure can
be deemed to be subject to property taxes. So as to ensure the continued tax exempt status of the
municipal parking garage, the retail portion of the building needs to be separated via a
condominiumization process. This process has been implemented in the past for other City-owned
facilities that also contain retail and/or commercial tenants, including 1701 Meridian Avenue and
1130 Washington Avenue. Under this process, property taxes are levied only for the
retail/commercial portions, which in some cases have been subdivided to accommodate tenant
needs; the retail tenants are responsible for the payment of property taxes. The retail tenant for
1661 Pennsylvania Avenue is, likewise, responsible for any property taxes levied for their retail
space.
The City retains full ownership of the condominium unit(s), with the Mayor and Commissioners
serving as the condominium association board.
It should also be noted that in the past, the City has used outside counsel to prepare and submit the
necessary Declaration of Condominium applications to file with the State of Florida. This time,
however, the City Attorney's office has been able to complete this work in-house at a significant cost
savings for the City. It is anticipated that the only cost associated with filing this application will
involve the filing and recording fees (estimated at $1 0,000).
182
January 11, 2011
City Commission Memorandum-Condominiumization -1661 Penn garage
Page 2 of2
CONCLUSION
The condominiumization of the 1661 Pennsylvania Avenue Garage will ensure that the public
parking garage portion of the building remains tax exempt.
JMG/HF/AP/kob
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183
RESOLUTION NO:--------
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE
ADMINISTRATION AND CITY ATTORNEY'S OFFICE TO PROCEED
WITH, AND TAKE ANY AND ALL REQUIRED ACTIONS RELATIVE TO
THE CONDOMINIUMIZA TION OF THE CITY -OWNED PROPERTY
LOCATED AT 1661 PENNSYLVANIA AVENUE, MIAMI BEACH,
FLORIDA.
WHEREAS, the City is the owner of the Pennsylvania Avenue municipal
parking garage located at 1661 Pennsylvania Avenue; and
WHEREAS, in addition to containing 550 parking spaces that serve a public
purpose, the garage building also includes approximately 7,655 square feet of ground
floor retail space; and
WHEREAS, on April 13, 2011, the Mayor and City Commission of the City of
Miami Beach approved a retail lease agreement between the City and Penn 17, LLC,
involving said retail space, for a term of nine (9) years and 364 days, commencing on
October 13, 2011 and terminating on October 12, 2021; and
WHEREAS, the conversion of said retail space to condominium status is
recommended in order to maintain (and/or otherwise support) some or all of the tax
exempt status of the facility.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission
hereby authorize the Administration and City Attorney's Office to proceed with,
and take any and all required actions relative to the condominiumization of the
City-owned property located at 1661 Pennsylvania Avenue, Miami Beach, Florida.
PASSED and ADOPTED this 11th day of January, 2012
ATTEST:
CITY CLERK
JMG/HF/AP/~
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184
MAYOR
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION