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Resolution 2025-33910RESOLUTION NO. 2025-33910 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE AT ITS JULY 16, 2025 MEETING, PURSUANT TO REQUEST FOR PROPOSALS (RFP) 2023-115-KB, FOR THE REDEVELOPMENT OF THE CITY-OWNED PROPERTY LOCATED AT 1940 PARK AVENUE, KNOWN AS THE BARCLAY (THE "PROJECT"); APPROVING THE TERM SHEET FOR THE PROJECT, ATTACHED AS AN EXHIBIT TO THE COMMISSION MEMORANDUM ACCOMPANYING THIS RESOLUTION; DIRECTING THE ADMINISTRATION TO NEGOTIATE A LONG- TERM GROUND LEASE WITH 1940 BARCLAY PARTNERS, LLC, CONSISTENT WITH THE APPROVED TERM SHEET, PROVIDING THAT THE FINAL AGREEMENT SHALL BE SUBJECT TO THE PRIOR APPROVAL OF THE MAYOR AND CITY COMMISSION; AND REFERRING THE PROJECT AND ASSOCIATED AGREEMENT TO THE PLANNING BOARD, IN ACCORDANCE WITH THE CITY CHARTER AND CITY CODE. WHEREAS, on April 6, 2022, the Mayor and City Commission accepted the recommendation of the Finance and Economic Resiliency Committee ("FERC") to direct the Administration to develop a Request for Proposals(RFP)for the redevelopment of the City-owned property located at 1940 Park Avenue, known as the Barclay (the "Property"); and WHEREAS, the Property is a contributing historic structure within the Museum Local Historic District and the Miami Beach Architectural District, and has been subject to prior unsafe structure determinations; and WHEREAS, on November 16, 2022, the City Commission authorized the issuance of RFP 2023-115-KB for the redevelopment of the Property (the "RFP"), seeking proposals that would balance historic preservation with adaptive reuse, financial feasibility, and public benefit; and WHEREAS, in response to the RFP, the City received a sole proposal from The Barclay Partners LLC, now known as 1940 Barclay Partners, LLC (the "Developer"); and WHEREAS, on March 21, 2023, the Evaluation Committee appointed by the City Manager convened to evaluate the proposal received, with members including representatives of Facilities and Fleet Management, Capital Improvement Projects, Housing and Community Services, and Economic Development; and WHEREAS, on, September 13, 2023, the City Commission unanimously directed the Administration to pursue separate, simultaneous discussions with the Developer, as weil as with the Housing Authority, despite the latter not submitting a formal RFP proposal, in order to fully evaluate alternative redevelopment approaches; and WHEREAS, on March 22, 2024, following review at multiple meetings, the FERC recommended that the City Commission award the RFP to the Developer, based on the Developer's revised proposal dated March 13, 2024 (Option No. 2), and further recommended that the City Commission authorize the Administration to negotiate the Project with the Developer; and WHEREAS, on April 3, 2024, via Resolution No. 2024-32977, the Mayor and City Commission accepted the recommendation of the FERC, authorized negotiations toward a development and ground lease agreement, required that final material terms be subject to subsequent Commission approval, and referred the Project and any related amendments to land development regulations to the FERC, the Land Use and Sustainability Committee, and the Planning Board, in compliance with the City Charter and the City Code; and WHEREAS, on July 16, 2025, the FERC reviewed an updated proposal dated June 16, 2025 from the Developer, and unanimously recommended that the City Commission approve a Term Sheet to guide finalization of a long-term ground lease; and WHEREAS, the Administration and the Developer have prepared a Term Sheet attached to the Commission Memorandum accompanying this Resolution as Exhibit "A," which memorializes the key terms of the Project and provides for: i. Ground Lease Structure: Triple-net obligations, with the Developer assuming responsibility for all operating expenses, taxes, insurance, and maintenance. ii. Term: Initial 51-year term with two 24-year extensions (up to 99 years total), subject to the Developer remaining in good standing and not in default. iii. Historic Preservation: Preservation or reconstruction of the building's exterior fa ades and public interior features, including the historic lobby; salvage and reuse of original materials where feasible; and Historic Preservation Board ("HPB") review and approval for any demolition or new construction. iv. Zoning and Design Compliance: Adherence to the existing Governmental Use (GU) zoning standards, with no requests for additional floor area ratio (FAR) or height, and full compliance with applicable City Code requirements. v. Housing Affordability: Primarily market-rate units, with additional public benefits including: o Senior Residential Units: A minimum of seven (7) senior residential units reserved for households earning at or below 80% of Area Median Income (AMI), with at least one household member aged 62 or older. o Restricted Residential Units: At least 15% of total residential units designated as "Restricted Residential Units," offered at either market rent or affordable to households earning up to 160% of AMI (whichever is less), enforceable by restrictive covenant for the full 99-year lease term. Monthly rent for these units shall not exceed 30% of gross household income at 160% AMI, consistent with FERC's policy recommendations. o Transient Use Restriction. All residential units will be subject to a minimum lease term of twelve (12) months, with short-term and transient rentals expressly prohibited. vi. Financial Compensation to the City: o $2 Million Rent Payment. A$2 million ground lease payment to the City upon the Developer's possession of the Property, without any recurring rent or revenue- sharing obligations. 2 o No City Subsidy. The Project is entirely privately financed and does not require City subsidy or capital contribution. vii. Project Milestones 8 Timing: Strict deadlines for HPB and Planning Board approvals, building permits, construction commencement, and substantial completion. Failure to meet milestones may trigger remedies in favor of the City, including termination and liquidated damages. viii.Additional City Protections: o Non-subordination: City ownership remains senior to any financing. o "AS-IS" Property Acceptance: Developer accepts the Property strictly "as-is", assuming all environmental and resiliency-related costs. o Termination Rights: City retains termination rights in the event of Developer default, while the Developer's termination rights are lirnited and require reimbursement of City-incurred costs. WHEREAS, the Administration has determined that the Term Sheet appropriately balances the preservation of a historically significant structure, the provision of new housing opportunities, the safeguarding of City interests, and the creation of a financially feasible and enforceable public-private partnership; and WHEREAS, the Administration therefore recommends that the City Commission approve the Term Sheet, authorize the negotiation of a definitive ground lease agreement with the Developer consistent with the approved terms, and refer the Project and related agreements to the Planning Board for review as required by the City Charter and City Code. 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 accept the recommendation of the Finance and Economic Resiliency Committee at its July 16, 2025 meeting, pursuant to Request for Proposals (RFP) 2023-115-KB, for the redevelopment of the City-owned property located at 1940 Park Avenue, known as the Barclay (the "Project"); approving the Term Sheet for the Project, attached as an Exhibit to the Commission Memorandum accompanying this Resolution; directing the Administration to negotiate a long-term Ground Lease with 1940 Barclay Partners, LLC, consistent with the approved Term Sheet, providing that the final agreement shall be subject to the prior approval of the Mayor and City Commission; and referring the Project and associated agreement to the Planning Board, in accordance with the City Charter and City Code. PASSED and ADOPTED THIS /7 day of 7'PI' " 2025. ATTEST: r-4-n- Steven Meiner, Mayor Rafael E. Granado, City Clerk APPROVED AS TO FORM &LANGUAGE 8 FOR EXECUTION f•ti-,, ih`. fo,f z.f c cy ano,ey oace v,Q........;;= 3 ch 2 ;_ Resolutions -C7 {{item.number}} MIAMI BEACH TO: FROM: DATE: TITLE: COMMISSION MEMORANDUM Honorable Mayor and Members of the City Commission Eric Carpenter, City Manager � �elk.__ September 17, 2025 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE AT ITS JULY 16, 2025 MEETING, PURSUANT TO REQUEST FOR PROPOSALS (RFP) 2023-115-KB, FOR THE REDEVELOPMENT OF THE CITY-OWNED PROPERTY LOCATED AT 1940 PARK AVENUE (THE BARCLAY) (THE "PROJECT"); APPROVING THE TERM SHEET FOR THE PROJECT, ATTACHED AS AN EXHIBIT TO THE COMMISSION MEMORANDUM ACCOMPANYING THIS RESOLUTION; DIRECTING THE ADMINISTRATION TO NEGOTIATE A GROUND LEASE WITH 1940 BARCLAY PARTNERS, LLC, CONSISTENT WITH THE TERM SHEET, WITH THE FINAL TERMS OF THE AGREEMENT SUBJECT TO THE PRIOR APPROVAL OF THE MAYOR AND CITY COMMISSION; AND REFERRING THE PROPOSED PROJECT AND ASSOCIATED AGREEMENT TO THE PLANNING BOARD FOR REVIEW, IN ACCORDANCE WITH THE REQUIREMENTS OF THE CITY CHARTER AND CITY CODE. RECOMMENDATION The Administration recommends that the Mayor and City Commission adopt the Resolution accepting the recommendation of the Finance and Economic Resiliency Committee to approve the Term Sheet for the redevelopment of the Barclay property (attached as an Exhibit), and direct the Administration to negotiate a Ground Lease with 1940 Barclay Partners, LLC, consistent with the approved Term Sheet. The terms of the final, negotiated Ground Lease will be subject to the prior approval of the Mayor and City Commission. Additionally, the proposed Project and associated Ground Lease should be referred to the Planning Board for review, in accordance with the City Charter and City Code. BACKGROUND/HISTORY RFP 2023-115-KB. On November 16, 2022, the City Commission authorized the issuance of Request for Proposals (RFP) 2023-115-KB for the redevelopment of the City-owned property located at 1940 Park Avenue (the Barclay). One proposal was received from The Barclay Partners, LLC, now known as 1940 Barclay Partners, LLC (the "Developer"). The Evaluation Committee, appointed by the City Manager, scored the proposal 87 out of 100 points, in accordance with the RFP criteria. On September 13, 2023, the City Commission directed staff to engage in parallel discussions with the Developer and the Housing Authority of the City of Miami Beach ("Housing Authority"), which entity had not submitted an RFP response but later expressed interest as an equity partner in the redevelopment. On March 22, 2024, the Finance and Economic Resiliency Committee (FERC) recommended awarding the RFP to the Developer, contingent upon a minimum $6 million upfront payment to the City, equivalent to the Miami Beach Redevelopment Agency's (RDA) original acquisition cost. RFP Award. On April 3, 2024, via Resolution No. 2024-32977, the Mayor and City Commission approved the FERC recommendation, authorized negotiations, and referred the Project (including any necessary Land Development Regulations (LOR) amendments) for review by FERC, the Land Use and Sustainability Committee (LUSC), and the Planning Board. FERC Review. On September 20, 2024, FERC reviewed a revised project proposal dated May 30, 2024, and recommended it favorably with conditions, including: (i) an earlier milestone for payment of a portion of the upfront payment and (ii) consideration of rent limitations for the market­ rate units. Subsequently, the Developer prepared proposed Comprehensive Plan and City Code amendments to accommodate height and FAR increases but later requested an indefinite deferral due to anticipated lack of Committee support. Most recently, on July 16, 2025, FERC reviewed the Developer's updated proposal dated June 16, 2025, and voted unanimously to recommend that the City Commission approve a Term Sheet based on the revised project terms. The Term Sheet is attached to this Memorandum as Exhibit A and forms the basis of the Administration's recommendation. ANALYSIS The Developer's current proposal, as memorialized in the Term Sheet (Exhibit A). may be evaluated according to four components that have guided the City Commission's discussion of the Project: 1.Historic Preservation •The Barclay Plaza Hotel remains a contributing structure within both the Museum Local Historic District and the Miami Beach Architectural District. •The Developer has indicated that, due to current structural conditions, full demolition of the existing Barclay structure will likely be required. •In 2014, the Miami-Dade County Unsafe Structures Board issued an emergency demolition order for the Barclay. However, pursuant to a recorded 2023 Compliance Agreement with the Board, the demolition order has not been enforced by the Building Official, pending the outcome of this RFP. •The RFP solicitation referenced an August 2021 feasibility study by MC Harry Associates, which concluded that the building envelope and all major systems required full replacement. The RFP also stipulated that any modifications or improvements to the building, including exterior alterations, changes to public interior spaces such as the lobby, and any attached or detached additions, would require a Certificate of Appropriateness from the Historic Preservation Board (HPB). •Accordingly, the Term Sheet requires the Developer to substantially retain and preserve the exterior walls, public interior spaces, and all architecturally or historically significant features, where feasible. HPB approval is required for all new construction, including attached or detached additions and rooftop structures. If full or partial demolition is ultimately unavoidable, the Term Sheet further requires, at a minimum, the following: i.Reconstruction of the original fa9ades along Park Avenue and Washington Avenue; ii.Rebuilding of historically significant interior lobby elements; and iii.Salvage, preservation, and reuse of original architectural materials, where possible. 2.Zoning and Design Compatibility •The current design proposal has been reduced in scale and no longer includes requests for additional FAR or building height beyond what is permitted under the GU zoning designation. •While the revised design is more compatible with the surrounding historic district, it remains subject to full compliance review for setbacks, unit sizes, parking, landscaping, resiliency standards, and other applicable requirements under the City Code. •The Developer has indicated an intention to seek waivers, variances, and/or exemptions from certain requirements, potentially including Payment in Lieu of Parking and Art in Public Places contributions. These requests will be detailed for City Commission consideration during preparation of the Ground Lease. 3.Housing Affordability •Earlier iterations of the project included workforce and affordable housing units supported by FAR and height incentives. The current proposal, however, is predominantly market-rate. •Senior Residential Units. The City will require at least seven (7) units reserved for households earning at or below 80% AMI, with at least one household member 62 years or older. These units will be coordinated with the Housing Authority's voucher program. •Restricted Residential Units. To expand affordability commitments, the City seeks to require that a minimum of 15% of market-rate units (no fewer than 15 units) be designated as Restricted Residential Units. These units must be offered at the lesser of market rate rent or levels affordable to households earning up to 160% AMI, enforceable by a restrictive covenant for the full 99-year Ground Lease. Monthly rent for these units shall not exceed 30% of gross monthly income for a household at 160% AMI, consistent with the recommendation of the City's Finance and Economic Resiliency Committee (FERC). •Integration and Quality Requirements. All Restricted and Senior units must (i) include a mix of unit types and sizes, (ii) be distributed across multiple floors, and (iii) be indistinguishable in design and finish from market-rate units. •Transient Use Restriction. All residential units will be subject to a minimum lease term of 12 months. Short-term and transient rentals are expressly prohibited. 4.Finar.cial Compensation to the City •$2 Million Rent Payment. The Developer will provide a $2 million ground lease payment. Upon the Possession Date (when Developer takes control of the property). •No City Subsidy. Notably, the Project will be privately financed and does not require any City subsidy. While the proposal does not include recurring rent or revenue sharing, it relieves the City of the ongoing costs of maintaining a deteriorating structure and restores the Property to the tax rolls. •Policy Rationale. Given the critical need for rental housing in Miami Beach, the Administration recommends forgoing annual rent in exchange for the activation of a blighted property and the delivery of new rental housing, without requiring City financial assistance. Additional Term Sheet Components 1.Ground Lease Structure •Triple-net lease: Developer assumes all operating expenses, taxes, insurance, and maintenance. •Term: 51 years initial, plus two 24-year extensions (up to 99 years total), exercisable only if the Developer is not in default. 2.Retail and Public Benefits Commitments •A minimum of 1,000 sq. ft. of ground-floor retail with activated frontage to enhance street-level activity. •Public benefits explicitly include: new long-term attainable housing, retail activation, resiliency and sustainability measures, landscaping enhancements, and improved safety and lighting at a currently blighted site. 3.Project Milestones and Timing •The Term Sheet establishes strict milestones for: HPB/Planning Board approvals, building permit issuance, construction commencement, and substantial completion. •These provisions ensure the project moves forward expeditiously. Failure to meet deadlines may trigger City remedies, including termination and liquidated damages. 4.City Protections •Non-subordination: City's ownership remains senior to any financing. •AS-IS property acceptance: Developer assumes all environmental and resiliency­ related costs. •Termination rights: City may terminate upon Developer default; Developer termination rights are limited and require reimbursement of City-incurred costs. FISCAL IMPACT STATEMENT While the proposal does not include recurring rent or revenue-sharing, it provides: •A $2 million one-time payment •Relief from ongoing maintenance costs •Activation of a deteriorating, underutilized public asset •Future ad valorem tax revenues and economic activity. The Developer is not requesting any City subsidies or grants, making the proposal fiscally neutral with potential long-term benefits. 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 .mi amibeachfl.gov/city-ha ll/cit y-clerk/me eting-notices / FINANCIAL INFORMATION CONCLUSION Applicable Area Is this a "Residents Right to Know" item, pursuant to City Code Section 2-17? Is this item related to a G.O. Bond Project? Was this Agenda Item initially requested by a lobbyist which, as defined in Code Sec. 2-481, includes a principal engaged in lobbying? Department Sponsor(s) Co-sponsor( s) Condensed Title Previous Action (For City Clerk Use Only) DRAFT DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL The Barclay Redevelopment Ground Lease - Proposed Term Sheet Draft – September 11, 2025 Capitalized terms used in this Term Sheet and not defined, or with fuller definitions to be provided in the definitive documents, shall be defined in the Transaction Documents (as defined below). 1. Overview of Transaction Structure and Project a. City Ownership of Property. The City of Miami Beach, Florida (the “City”) is the fee simple owner of the property located at 1940 Park Avenue, Miami Beach, Florida (the “Property”). The Property, commonly known as The Barclay, is a contributing historic structure located within the City-designated Museum Local Historic District. b. Developer and RFP Process. 1940 Barclay Partners, LLC, a Delaware limited liability company (the “Developer”), is a joint venture composed of a subsidiary of Legacy Real Estate Development, LLC, a Delaware limited liability company, and ABK Barclay LLC, a _________ limited liability company. Developer was selected pursuant to the City’s Request for Proposals Bid Package 2023-115-KB (as amended, the “RFP”) for the redevelopment of the Property. On April 3, 2024, the Miami Beach City Commission, consisting of six elected Commissioners and an elected Mayor (the “City Commission”), formally authorized the City Administration to commence negotiations for a development and ground lease agreement with the Developer in connection with the proposed redevelopment (the “RFP Award”). c. Project Description and Components. Subject to the Developer obtaining all required entitlements, permits, and regulatory approvals, Developer shall, at its sole cost and expense, redevelop the Property into a residential mixed-use project (the “Project”), and shall hold a leasehold interest in the Property through a long-term ground lease with the City. Developer, at its sole cost and expense, shall be solely responsible for the design, financing, permitting, construction, operation, and as applicable, maintenance of the Project. The Project shall include, without limitation, the following elements: (i) Residential Component. A multifamily residential component consisting of approximately 71,950 gross square feet, which shall be counted toward the maximum floor area ratio (FAR) permitted under the City Code) (the “Residential Component”), subject to further refinement and description in the Ground Lease. The Residential Component shall at all times be operated solely as a multifamily rental project and shall not at any time be converted into any form of ownership program, including without limitation, a condominium regime. The Residential Component shall comply with the following requirements, as conditions of the City’s proprietary approval: (a)No Short-Term Rentals. As defined by Chapter 114 of the City Code, short-term or transient rentals shall be strictly prohibited. DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL Page 2 (b)Minimum Lease Terms.All leases shall have a minimum duration of twelve (12) consecutive months. (c)No Co-Living or Micro Units. No units shall be smaller than 400 square feet in size. (d)Restricted Residential Units. A minimum of fifteen percent (15%) of the total residential apartment units shall be designated as “Restricted Residential Units”. The Restricted Residential Units shall be (i) marketed and leased at the lesser of (a) market rate rent 1 or (b) rents affordable to households earning no more than one hundred sixty percent (160%) of the applicable Area Median Income (AMI) for Miami-Dade County, as published annually by the U.S. Department of Housing and Urban Development (or its successor agency), and (ii) restricted throughout the full term of the Ground Lease, including all extensions (up to 99 years). Monthly rent for the Restricted Residential Units shall not exceed 30% of gross monthly income for a household earning 160% AMI, consistent with the recommendation of the City’s Finance and Economic Resiliency Committee (FERC). The foregoing restriction shall be evidenced by a restrictive covenant made by Developer in favor of the City and recorded in the Public Records of Miami-Dade County, Florida and shall run with the land for the term of the Ground Lease. (e)Senior Residential Units.A minimum of seven (7) units shall be designated as “Senior Residential Units” and reserved for households: (i) with incomes at or below 80% of AMI for Miami-Dade County; and (ii) with at least one household member aged 62 years or older. The Senior Residential Units are intended to be administered in conjunction with the Housing Choice Voucher Program and in partnership with the Housing Authority of the City of Miami Beach. The foregoing restriction shall be evidenced by a restrictive covenant made by Developer in favor of the City and recorded in the Public Records of Miami-Dade County, Florida and shall run with the land for the term of the Ground Lease. (f)Integration Requirements. The Restricted Residential Units and the Senior Residential Units shall: i. Include a mix of unit types and unit sizes; 1 Determination of Market Rate Rent. As will be further defined in the Development Agreement and Ground Lease, the “Market Rate Rent” for purposes of leasing the Restricted Residential Units shall be determined annually through a market analysis conducted by the Developer (or its designated operator). This analysis shall identify and evaluate no fewer than three comparable multifamily rental properties located within a one-half (½) mile radius of the Property, with lease transactions occurring within the preceding six (6) months. The comparables shall reflect similar unit types in terms of location, size, condition, and amenities. Documentation justifying any proposed adjustments and the resulting Market Rate Rent shall be available, upon request by the City, to confirm that the rate reflects fair market value and complies with applicable regulatory requirements. DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL Page 3 ii. Be distributed throughout multiple floors of the building(s); iii. Be developed at a Class A Level.[OPEN AND SUBJECT TO FURTHER NEGOTIATION] (ii)Retail Component.A ground floor retail component consisting of approximately (but not less than) 1,000 square feet of commercial space (the “Retail Component”), to be more fully described in the Ground Lease. The Retail Component shall include an activated street liner with uses such as retail, restaurant, personal service, professional office, or similar active ground floor uses. Provided, however, exceptions to the activation requirement shall be permitted for utility infrastructure (to the extent not reasonably or functionally located elsewhere), pedestrian and vehicular access points, including stairs and ramps, and alleys, emergency access points, or loading facilities. Design of the Retail Component shall be subject to review and approval by all applicable City boards and departments, including design and planning review staff, and the Historic Preservation Board, as applicable. (iii)Ancillary Uses. The Project may also include other supporting elements, including but not limited to all elements required by applicable codes, amenity spaces for residents, leasing office, onsite parking, and/or valet parking services for residents and visitors. (iv)Public Benefits Components.In addition to the foregoing, the Project shall incorporate the following public benefits (collectively, the “Public Benefits Components”): (a) Provide the City and area with a Project that will activate, revitalize, enhance and bring new life and energy to the surrounding area; (b) Create new rental housing opportunities for Miami Beach residents; (c) Provide long-term attainable housing by restricting 15% of the units to rents affordable to households earning no more than 160% AMI (or market rent, if lower), for the duration of the 99-year Ground Lease; (d) Provide long-term attainable housing by restricting a minimum of 7 units to rental by households (i) with incomes at or below 80% of AMI for Miami- Dade County; and (ii) with at least one household member aged 62 years or older; (e) Create new retail uses to enhance pedestrian activity and serve the community; (f) Further the City's sustainability and resiliency efforts for new development; (g) Improve lighting and increased public safety for the area; (h) Create temporary and construction jobs and long-term permanent jobs post- construction; DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL Page 4 (i) Increase the tax base and increase ad valorem and other tax revenue to the City; (j) Provide new landscaping and beautification of the site and perimeter area surrounding the Project; (k) Foster a mixed-use environment that supports a live, work, and play lifestyle within the Project; (l) Provide general economic stimulus to the City; and (m)Create catalytic impact that encourages future development of surrounding areas. d.Transaction Documents. The transaction will be contractually structured as a ground lease governing the design, entitlement, and construction phases of the Project as well as the long-term ground lease of the Property by Developer for the Permitted Use (the “Ground Lease”). City, in its City’s sole discretion, may elect to contractually structure the transaction to include a separate development agreement solely governing the design, entitlement and construction phases of the Project (the “Development Agreement”). The Ground Lease and, if applicable, the Development Agreement shall collectively be referred to herein as the “Transaction Documents” and/or “definitive agreements.” e.Charter and Code Compliance. Pursuant to Section 1.03(b)(4) of the City Charter, the Project does not require voter referendum approval. The Ground Lease must comply with the procedural requirements set forth in Chapter 82, Article II (Sections 82-36 through 82- 40) of the City Code. An independent appraisal of the fair market or rental value of the Property must be obtained by the City, at Developer’s sole cost and expense, in accordance with Section 82-39(b) of the City Code and Resolution No. 2019-30853. Such appraisal shall include a determination of the value of the property based on proposed and possible uses including, without limitation, the highest and best use(s) of the Property by the proposed lessee in accordance with Section 82-39(b) of the City Code. Developer shall reasonably cooperate with the City in connection with the preparation of the appraisal, including without limitation, delivering any documentation or information requested by the appraiser. f.Exclusivity of Rights. Developer shall have exclusive development rights for the Property. Provided, however, the City reserves the right to grant similar privileges and rights to other lessees or developers on unrelated City-owned properties, and to take any and all actions permitted under federal, state, and local laws. g.Concept Plan Approval. The City Commission shall review and approve a concept-level site and design plan for the Project (the “Concept Plan”) as part of its approval of the Transaction Documents. The Concept Plan, consistent with the Developer’s proposal approved by the City Commission with this Term Sheet, shall be included as an exhibit to the Transaction Documents. The design of the Project shall remain subject to further review by the City’s Historic Preservation Board (“HPB”) and any other applicable board, department and/or agencies having jurisdiction. DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL Page 5 h.Modifications During Entitlements. Any changes to the Project arising from entitlements, City discretionary review, or as mutually agreed by the parties, shall be formally documented in the Transaction Documents and/or amendments thereto, as applicable. 2. Development Agreement, if any (if the City elects not to have a separate Development Agreement, Section 2.c. below shall be incorporated into the Ground Lease) a.Term. The Development Agreement shall be effective during the design, permitting, and construction phases of the Project. Upon “Substantial Completion” of the Project (as defined in the Transaction Documents), the Development Agreement shall expire, and Developer’s ongoing rights and obligations shall be governed exclusively by the Ground Lease. b.Effective Date.The effective date of the Transaction Documents (the “Effective Date”) shall be the latest of the following to occur: (i) the parties’ mutual execution and delivery of the Development Agreement, if any; (ii) the parties’ mutual execution and delivery of the Ground Lease; and (iii) formal approval of the Development Agreement, if any, and the Ground Lease by the City Commission in accordance with the City Code. For purposes of determining the timeline for Project commencement and related milestones, the Effective Date shall be specified in a written notice to proceed issued by the City but shall not be earlier than the latest to occur of (i) through (iii) above. c.Transfer & Assignment.Prior to Substantial Completion, Developer shall not assign, transfer, or otherwise convey its right, title, or interest in the Development Agreement or the Property, whether directly or indirectly, without the prior written consent of the City, which may be granted or withheld in the City’s sole and absolute discretion except for the purposes of integrating passive financial partners to be further discussed in the Transaction Documents. d.Negotiation of Final Terms. The terms contained in this Term Sheet shall serve as a framework for the parties’ good faith negotiation of the definitive Development Agreement, if any. The parties acknowledge and agree that the final Development Agreement, if any, shall contain additional terms, conditions, covenants, and obligations not set forth herein, consistent with the City’s customary practices. 3. Ground Lease a.Term. The Ground Lease shall have a total term not to exceed ninety-nine (99) years, consisting of (i) an initial lease term of fifty-one (51) years, and (ii) two (2) additional, consecutive, dependent twenty-four (24)-year extension options. Each extension may be exercisable by Developer (or its permitted successors or assigns) in its sole and absolute discretion, provided that Developer is not in material default under the Ground Lease (beyond applicable notice and cure periods), nor has any condition occurred, which with the passage of time and/or notice, would constitute a material default. b.Effective Date and Possession.The Ground Lease shall become upon the latter of: (i) the parties’ mutual execution and delivery of the Ground Lease (and the Development DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL Page 6 Agreement, if any), and (ii) approval thereof by the City Commission in accordance with City Code. Possession of the Property and commencement of the Ground Lease term shall occur on the “Possession Date,” as defined in Section 4 below. c.Ground Lease Payments.Developer shall pay to the City a one-time, non-refundable upfront lease payment in the amount of Two Million Dollars ($2,000,000.00) (the “Ground Lease Payment”), which shall be due and payable on the “Possession Date & Construction Loan Closing Date”, as further described in Section 4 below. If all or any portion of the Ground Lease Payment is not timely paid when due, Developer shall be in default and the City shall have the right to immediately terminate the Transaction Documents. d.Operating Expenses.The Ground Lease shall be a “triple net” (net-net-net) lease, and Developer shall be solely responsible for all costs and expenses related to the operation, maintenance, repair, and management of the Project, including, without limitation, real estate taxes, utilities, insurance, assessments and common area maintenance charges. e.Permitted Uses. Permitted uses under the Ground Lease shall include residential, retail (including but not limited toretail shop, restaurant, office, personal service,or other similar active ground floor uses)[PROHIBITED USES TO BE STIPULATED IN THE TRANSACTION DOCUMENTS, OPEN AND SUBJECT TO FURTHER NEGOTIATION]non-public parking, and other ancillary or accessory uses customarily associated with mixed-use multifamily developmentsincluding but not limited to amenities and leasing office, subject to the terms of the Transaction Documents (which shall include prohibited uses customary for City properties) and compliance with all applicable laws. Any other proposed use shall require the prior written consent of the City, in its proprietary capacity, and shall be memorialized in the definitive agreements. f.Transfer & Assignment. Following Substantial Completion, Developer shall be permitted to assign its interests, rights, and obligations under the Ground Lease in connection with certain “Permitted Transfers” (as shall be defined in the Ground Lease and shall include certain permitted transferees having the requisite assets, net worth and experience to operate the Project, as shall be further described in the Ground Lease). No other transfer shall be permitted without the prior written consent of the City, which may be granted or withheld in the City’s sole and absolute discretion. In no event shall any sale or transfer of any interests, rights or obligations of Developer under the Ground Lease or in the Project be permitted to a “Foreign Instrumentality” (as defined in the Ground Lease). Any proposed transferee of any ownership interest in Developer or any portion of the Project must satisfy the “Acceptable Owner Criteria” and be confirmed as such by the City in accordance with Exhibit A attached hereto. [Note: Parties to continue to discuss but may integrate Lincoln Lane Ground Lease Language] g.Further Negotiations. As with the Development Agreement, if any, the parties acknowledge that the terms and conditions of the Ground Lease shall be negotiated in good faith and finalized in a definitive written instrument. This Term Sheet is not intended to, and does not, set forth all final provisions that will be included in the executed Ground Lease. DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL Page 7 4. Possession and Conditions Precedent a.Possession Date. The Developer’s right to take possession of the Property (the “Possession Date”) shall commence immediately following the satisfaction of all conditions precedent, as reasonably determined by the City and further detailed in the Transaction Documents. Possession of the Property and the commencement of any construction or mobilization activities shall not occur prior to the full satisfaction of these conditions, which shall include, without limitation: (i) Issuance of all Required Approvals (as further described in Section 5 and the Transaction Documents); (ii) Delivery to the City of payment and performance bonds, in form and amount reasonably satisfactory to the City, naming the City as co-obligee, or such other financial security approved by the City Manager, in consultation with the City Attorney. The City acknowledges that a lender may be named as a co-obligee, as further described in the Transaction Documents; (iii) Delivery to the City of a comprehensive budget detailing the good faith projected costs to complete construction of the Project in accordance with the Transaction Documents; (iv) Delivery to the City of a schedule of performance of the Project utilizing the critical path method, setting forth the dates and times of delivery of the Project, including without limitation, the Project milestones set forth below; subject to reasonable extension for unavoidable delays and force majeure events (which may include specified delays attributable to (a) the City acting in its proprietary capacity and as owner of the Property, (b) certain specified global or national economic conditions that delay the Developer’s financing or construction of the Project and (c) unforeseen site conditions to the extent not reasonably capable of being identified prior to execution of the Transaction Documents, provided in each case (i) Developer provides prompt written notice of such delay, and (ii) with respect to (b) and (c) above, any resulting permitted delays are mutually agreed and identified prior to commencement of construction), as will be more particularly described in the Transaction Documents. (v) City’s approval of the general contractor/design builder for the Project, with such approval not to be unreasonably withheld so long as the contractor has bonding capacity equal to or exceeding $50 million and has achieved final completion of at least five (5) projects of similar size and scope in the U.S. within the last ten (10) years; (vi) Delivery to the City of the fully executed general construction contract for the Project with the approved general contractor/design builder reflecting a guaranteed maximum price that does not exceed the costs set forth in the budget; (vii) Delivery to the City of contingent assignments of the architect’s agreement and general construction contract, subject to a Developer default, beyond any applicable DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL Page 8 notice and cure periods, and further subject only to the rights of Developer’s mortgage lender and/or mezzanine lender, as shall be further defined in the Transaction Documents, pursuant to which the City shall have the right, without assuming Developer’s obligations, to enforce the architect’s and general contractor’s, as applicable, full and prompt performance under their respective agreements, subject only to payment by the City; (viii) Delivery to the City of contingent assignments of the architect’s agreement and general contract, subject to a default, beyond any applicable notice and cure periods of Developer, and further subject only to the rights of Developer’s mortgage lender and/or mezzanine lender as shall be further defined in the Transaction Documents, pursuant to which the City shall have the right, without assuming Developer’s obligations, to enforce the architect’s and general contractor’s, as applicable, full and prompt performance under their respective agreements, subject only to payment by the City; (ix) Delivery of evidence reasonably satisfactory to the City that Developer has secured sufficient financing for the Project and will contribute equity to complete construction of the Project in accordance with the Project budget and the Transaction Documents; and (x) Delivery to the City of the Ground Lease Payment when due. b.Commencement of Construction.Promptly following Developer’s satisfaction of the conditions precedent to possession and delivery of the Possession Date notice by the City, Developer shall commence construction (or cause its general contractor to do so) and thereafter, diligently and continuously pursue completion of the Project, in accordance with the Transaction Documents and all applicable laws, permits, and approvals, subject to the terms of the Transaction Documents and subject to reasonable extension for unavoidable delays and force majeure events, as further described above and more particularly described in the Transaction Documents. c.City Access and Monitoring. During construction, the City and its designated representatives shall have reasonable access and rights to the Project for the purpose of monitoring and inspecting construction activities. These rights shall be solely for the benefit of the City and shall be exercised in a manner that does not unreasonably interfere with or disrupt construction of the Project by the Developer or its general contractor. The City shall also have the right to receive updates with respect to construction progress, timeline, budget, and any changes thereto. These rights are in addition to, and shall not limit, the City’s rights in its governmental and/or regulatory capacity. 5. Project Approvals and Milestones a.Compliance with LDRs. The Project shall be subject to full compliance with all applicable sections of the City’s Land Development Regulations (the “LDRs”). Developer acknowledges that the City makes no representation or warranty regarding the approval of any proposed amendment(s) to the LDRs or Comprehensive Plan, as may be applicable. DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL Page 9 b.Zoning and Discretionary Approvals. The Project shall comply with all applicable zoning requirements, including, but not limited to, height and floor area ratio (FAR) restrictions. Developer may request certain discretionary approvals and/or amendments to the LDRs and Comprehensive Plan, subject to review and approval by the City Commission and all applicable boards in their regulatory capacity and sole discretion. These may include: (i)[Developer to identify the amendments it intends to seek ]; and (ii) c.Historic Preservation Requirements. Recognizing the historic and architectural significance of the existing structure on the Property, which is classified as contributing in the Historic Properties Database and located within the Museum Local Historic District and National Register Architectural District, Developer shall substantially retain and preserve the exterior walls and public interior spaces of the existing structure, as well as all architecturally and historically significant features. In addition to all new construction, including, but not limited to attached and detached additions, as well as roof-top additions, HPB approval shall be required. In the event Developer seeks to substantially demolish all or a portion of the existing structure, at a minimum, the following shall be required: (i) Reconstruction of the original façades facing Park Avenue and Washington Avenue; (ii) Rebuilding of historically significant interior lobby elements; and (iii) The salvage, preservation; and reuse of original architectural materials where possible. d.Definition of Required Approvals. The definition of “Required Approvals” shall include: (i) Approval by the City Commission of the Concept Plan, attached to the Transaction Documents; (ii) Approval by the City Manager of the Developer’s proposed plans and specifications, which approval will not be unreasonably withheld, conditioned, or delayed, provided such proposed plans substantially conform to the approved Concept Plan. Any material modifications made by or on behalf of the Developer to the approved Concept Plan, require further approval by the City Commission, in its sole discretion. The Transaction Documents shall set forth certain minimum elements to be incorporated within the Project, and any deviation from such minimum elements shall be deemed material; (iii) Developer, at its sole cost, is responsible for obtaining all governmental approvals for the design, development, and construction of the Project, including without limitation, the Historic Preservation Board (HPB) and, if applicable, the City’s DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL Page 10 Planning Board. Developer may seek waivers or variances from these boards, as well as amendments to the LDRs from the City Commission as set forth in Section 5.b. above, to accommodate the proposed design of the Project, subject to proprietary review and approval by the City as landlord; and (iv)Promptly following City Manager approval of the proposed plans and specifications (the “Approved Plans”), Developer shall submit the Approved Plans to HPB and, if applicable, Planning Board and diligently pursue all approvals. To the extent such boards require any revisions that materially deviate from the approved Concept Plan, such revisions shall require City Commission approval, in its sole discretion. e.Project Milestones.The following milestones shall be incorporated into the Transaction Documents, subject to reasonable extension for unavoidable delays and force majeure events, as further described above and more particularly described in the Transaction Documents. [THIS ENTIRE SUBSECTION 5.e AND ALL MILESTONES REMAIN OPEN AND SUBJECT TO FURTHER NEGOTIATION] Milestone Target Date Outside Date 1. HPB, City Commission, (and if applicable, Planning Board & any other Authorities Having Jurisdiction at the City required for Entitlement approvals) approval 8 months after Effective Date 12 months after Effective Date (plus 1 month to exhaust appeals) 2. Issuance of Building Permit 10 months after HPB (and if applicable, Planning Board) approval 14 months after HPB (and if applicable, Planning Board) approval. 3. Possession Date and Construction Loan Closing 1 month after Building Permit issuance 6 months after Building Permit issuance, 4. Commencement of Construction 2 months after Building Permit issuance, 10 months after Building Permit issuance, 5. Substantial Completion and TCO issuance 24 months after Construction Commencement, 36 months after Construction Commencement, 6. Opening of the Residential Component 1 month after TCO issuance (TCO that includes the Residential Component), 3 months after TCO issuance (TCO that includes the residential component), DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL Page 11 Milestone Target Date Outside Date 7. Project Stabilization (as further defined in the Ground Lease) 18 months after TCO issuance, 36 months after TCO issuance, (i) Definitions of “Commencement of Construction,” “Substantial Completion,” and “TCO” (Temporary Certificate of Occupancy) shall be included in the Transaction Documents. (ii) Developer and the City acknowledge their mutual compelling interest in ensuring the timely redevelopment and activation of the Property and agree that time is of the essence in meeting the above milestones. Developer shall use diligent, good faith efforts to achieve each of the above milestones. The Project milestones will be subject to reasonable extension for unavoidable delays, weather/hurricane/tropical storm delays, “City Caused Delays” (______ for HPB, ________ for Planning Board Approval, _______ and more than 3 rounds of reviews for any City department during Building Permit Review), and force majeure events, as further described above and as more particularly described in the Development Agreement. 6. Project Costs and Financing a.Developer Responsibility. Developer shall be solely responsible for all costs and expenses in connection with the development, design, permitting, construction, operation, and maintenance of the Project, including any required demolition of existing improvements, asphalt paving, or other site preparation activities. All work shall be performed in compliance with applicable City Code provisions and other governing regulations. b.Community Outreach. Developer shall, in coordination with the City, design and implement a public information and community outreach program. At minimum, Developer shall install appropriate site signage and/or a fence wrap promoting the Project, in compliance with the City Code. Any City-led outreach shall be performed at the City’s expense. c.Project Financing.Developer shall be permitted to finance the Project solely through (i) a single senior mortgage loan from (which may be syndicated), provided that an Institutional Lender, as shall be defined in the Transaction Documents, serves as administrative agent/mortgagee; and, at Developer’s option, (ii) a single mezzanine loan secured by a pledge of the direct or indirect ownership interests in Developer, provided such mezzanine lender is also an Institutional Lender. At all times, the combined loan-to- cost ratio (with respect to construction financing) or loan-to-value ratio (with respect to permanent financing), shall not exceed ninety percent (90%), and Developer shall at all times maintain not less than ten percent (10%) equity interest in the Project, inclusive of Developer’s initial equity contribution to the Project. DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL Page 12 d.City’s Non-Subordination.In no event shall the City’s interest in the Property be subject or subordinated to any mortgage, mezzanine loan, or other liens or encumbrances hereafter affecting Developer’s interest in the Property. At all times, the City shall retain first priority for all monetary obligations due under the Ground Lease. e.City Contribution.The City’s contribution to the Project shall be strictly limited to making the Property available for lease. The City shall bear no responsibility for any other costs, expenses, or liabilities related to the development, financing, design, construction, operation, or maintenance of the Project. 7. Condition of Property; Environmental and Resiliency a.AS-IS Condition.Developer accepts the Property in its current, “AS IS, WHERE IS, and WITH ALL FAULTS” condition, including without limitation, latent or patent defects and any environmental conditions, and all, without representation or warranty of any kind, express or implied, or arising by operation of law. b.Environmental Reports.The City shall make available to Developer any existing environmental reports or assessments related to the Property and in the City’s possession. c.Resiliency Standards.The Project shall be designed and constructed in compliance with the City’s applicable resiliency standards, including but not limited to those set forth in Appendix C to the RFP, which shall be incorporated into the Transaction Documents. 8. Termination Rights a.Developer Termination Rights (Pre-Building Permit).Prior to the issuance of building permits, Developer shall have the right to terminate the Transaction Documents under the following conditions: (i) Any of the Required Approvals impose conditions rendering the Project economically unfeasible, in the reasonable business judgment of Developer; (ii) Project fails to meet concurrency requirements under Section 163.3180, Florida Statutes, or the costs of concurrency mitigation are, in the reasonable business judgment of Developer, economically unfeasible; (iii) Developer, after diligent, good faith efforts, has been unable to obtain necessary building permits pursuant to the Approved Plans; (iv) Developer, after diligent, good faith efforts, has been unable to secure adequate financing on financial terms that are commercially reasonable; or (v) Any material adverse change in national or global economic conditions that, in the Developer’s reasonable and good faith judgment, would materially and adversely affect the financial viability of the Project. (vi)Force Majeure DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL Page 13 b.City Reimbursement. In the event of termination by Developer, Developer shall reimburse the City for any reasonable, unreimbursed, third-party costs incurred, in accordance with the Reimbursement Agreement more particularly described in Section 11.d. herein. For the avoidance of doubt, Developer shall be credited for all amounts previously reimbursed to the City pursuant to the Reimbursement Agreement. c.City Termination Rights. The City shall not have the right to terminate for convenience. The City may terminate the Transaction Documents in the event of a default by Developer, beyond applicable notice and cure periods, as further detailed in the definitive agreements. d.Effect of Termination.In the event of termination of the Transaction Documents by Developer under subsection (a), or by the City pursuant to an uncured default by Developer: (i) Developer shall assign to the City (without any representation or warranty, express or implied) all right, title, and interests in and to the Approved Plans and any other non-privileged, non-confidential, or proprietary materials, information, and documents pertaining to the Project, developed by or on behalf of the Developer, and (ii) The City shall have no further financial or other obligation to the Developer. 9. Default [ENTIRE SECTION 9 REMAINS OPEN AND SUBJECT TO FURTHER NEGOTIATION] a.Developer Default.Developer shall be in default under the Transaction Documents if the Developer fails to comply with the terms thereof (beyond any applicable notice and cure periods therein), including, without limitation: (i) Failure to satisfy conditions precedent to possession of the Property; Failure to commence construction prior to the outside date for commencement of construction subject to any applicable and reasonable extensions for unavoidable delays, weather/hurricane/tropical storm delays, City Caused Delays, and force majeure events, as further described above and as more particularly described in the Transaction Documents. Occurrence of any unpermitted transfers; and (ii) Other material noncompliance. b.City Remedies.The City’s remedies for Developer default shall include, without limitation, termination of the Transaction Documents. The parties acknowledge and agree that the Transaction Documents will include reasonable and appropriate notice and cure periods and provisions in accordance with the City’s customary practices. c.Property Restoration. In the event of termination following the commencement of construction and prior to its completion, the City, at its sole option, may require that DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL Page 14 Developer, at its sole cost and expense, (i) demolish and/or remove any partially completed structures, improvements, and equipment. Developer shall also reimburse the City for any costs incurred as a result of Developer’s failure to complete construction in accordance with the Transaction Documents the terms and conditions of such restoration and reimbursement to be further described in the Transaction Documents. 10. Indemnification a.Developer Indemnity.The Transaction Documents shall contain such indemnity provisions as the City customarily requires for projects of this nature. In addition, except to the extent caused by the City’s gross negligence and/or willful misconduct, Developer shall indemnify, hold harmless, and defend the City for any claims, losses, damages, liabilities, fees, costs, and expenses (including reasonable attorneys’ fees, costs, and expenses) in connection with any legal challenges to the validity of the agreements or Project approvals, and/or Developer’s failure to perform or complete construction in accordance with the Transaction Documents, each at Developer’s sole cost and expense and using legal counsel reasonably acceptable to the City. This indemnity shall survive the expiration or earlier termination of the definitive agreements. b.Damages.Neither party shall be entitled to consequential, special, or punitive damages with respect to this Term Sheet or the definitive documents, provided this does not modify the Developer’s obligation to pay any applicable liquidated damages to be negotiated. 11. Miscellaneous a.Survey.The Developer shall procure a survey of the Property by a licensed surveyor reasonably approved by the City. Developer shall pay the costs of such survey, provided however, if prepared by the City’s Public Works Department, the Developer shall reimburse the City for its costs in accordance with the Reimbursement Agreement discussed in Section 11.d. b.Naming Rights.The Project will be named The Barclay. Any changes require the City and the Developer to agree. c.Preliminary Studies.By or before the first submission of the Transaction Documents and any requested discretionary approvals to the City Commission for its approval, Developer, at Developer’s sole cost and expense, shall provide the City with preliminary studies addressing traffic impacts and infrastructure capacity (i.e. water and sewer) analysis. d.Reimbursement Agreement. Developer shall reimburse or directly pay (at City’s option), on a monthly basis, the City’s reasonable out of pocket transactional and professional fees, costs, and expenses associated with negotiation and drafting of the definitive agreements and due diligence in development of the Project, including without limitation, reasonable fees for real estate appraisals and other required reports, the City’s outside counsel and paralegal fees; and any surveys, environmental assessments, title searches, and other reviews engaged by the City, in each case, in accordance with that certain Reimbursement Agreement dated as of May 29, 2024, by and between the City and 1940 Barclay Partners, DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL Page 15 LLC, which is and shall remain in full force and effect, as the same may be amended from time to time by the parties (the “Reimbursement Agreement”). [PARTIES TO DISCUSS] e.Art in Public Places.Unless participation is otherwise waived by the City Commission and such waiver is expressly set forth in the Transaction Documents, Developer shall comply with the City’s Art in Public Places (AiPP) requirements under Section 82-536 to 82-612 of the City Code, as applicable. Developer shall contribute to the City’s AiPP fund an amount equal to 1.5% of the Project’s “construction cost”, as such term is defined in Section 82-537 of the City Code, no later than the date of execution of the Project general construction contract between Developer and the Project general contractor, as required by the City Code. f.Prevailing Wage. Developer shall comply with Section 31-27 of the City Code which provides, in pertinent part, that in construction projects pursuant to a development agreement and/or ground lease with the City on City-owned land, the rate of wages and fringe benefits, or cash equivalent, for all laborers, mechanics and apprentices employed by any contractor or subcontractor on the work covered by the contract, shall not be less than the prevailing rate of wages and fringe benefit payments or cash equivalence for similar skills or classifications of work, as established by the Federal Register, in the City of Miami Beach, Florida. The details included in Appendix B of the RFP pertaining to this requirement shall be attached as an exhibit to the definitive agreements. g.Local Workforce Participation.Developer shall cause its contractor to comply with Section 31-40 of the City Code, requiring that the contractor, in any construction contract valued in excess of $1,500,000 for the construction of buildings or improvements on City- owned land, shall make reasonable efforts to promote employment opportunities for local Miami-Dade County residents and seek to achieve a project goal of thirty percent (30%) of all construction labor hours performed by Miami-Dade County and City of Miami Beach residents. The details included in Appendix B of the RFP pertaining to this requirement shall be attached as an exhibit to the definitive agreements. h.Legal Compliance.Developer shall comply with, all Federal, State, County, and City laws, ordinances, codes, rules, and regulations, and all orders and decrees of bodies or tribunals having jurisdiction or authority which, in any manner, may affect the Project, including, without limitation, the Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act, the EEOC Uniform Guidelines, and all EEO regulations and guidelines. i.Incorporation of RFP Terms. Whether or not included or referenced in this Term Sheet, all applicable terms and conditions in the RFP shall be incorporated into the definitive agreements. j.Negotiation Disclaimer.The parties acknowledge that this Term Sheet does not constitute a binding contract. All definitive terms, agreements, and conditions shall be negotiated by the parties and set forth in the final, negotiated and definitive agreements, subject to further approvals, as applicable. DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL Page 16 EXHIBIT “A” ACCEPTABLE OWNER DEFINITION [EXHIBIT REMAINS OPEN AND SUBJECT TO FURTHER NEGOTIATION] A. “Acceptable Owner” means any individual, corporation or other entity which satisfies, at a minimum, the following qualifications (collectively, the “Acceptable Owner Criteria”): 1. [The proposed transferee is not a Foreign Instrumentality; provided however, that up to forty-nine percent (49%) of the indirect equity interests of Developer may be owned by Foreign Instrumentalities provided that at least seventy percent (70%) of such indirect equity interests permitted to be owned by Foreign Instrumentalities must be owned by Specified Foreign Instrumentalities.] [Parties continuing to discuss]. 2. The proposed transferee must not be owned or Controlled by entities or individuals who have been convicted, or are presently under indictment, for felonies under the laws of any foreign or United States of America jurisdiction; provided, however, the foregoing shall not apply to any individuals or entities owning less than twenty percent (20%) equity interest in the proposed transferee, other than officers, directors, managers or others who have the power to direct and control the business and affairs of such proposed transferee. 3. The proposed transferee must not in its charter or organizational documents (defined as the articles of incorporation and bylaws for any corporation, the partnership agreement and partnership certificate for any partnership, the articles of organization and limited liability company operating agreement for any limited liability company, the trust agreement for any trust, and the constitution of the relevant government for any governmental entity, but expressly excluding any statements, positions, actions or allegations not contained in such charter organizational documents) expressly advocate or have as its stated purpose: (a) the violent overthrow of, or armed resistance against, the U.S. government; or (b) genocide or violence against any persons; or (c) discrimination, hatred, or animosity toward persons based solely on their race, gender, color, national origin, religion, age, disability, marital status, familial status, or sexual orientation. 4. Neither the proposed transferee nor any other person that controls the proposed transferee (or that will, following the proposed transfer, control the proposed transferee) will have violated any laws resulting in a forfeiture of such proposed transferee’s or other person’s entire interest in real property owned or managed by such transferee or other person. 5. The proposed transferee must not (nor any of the individuals or entities who own at least a twenty percent (20%) equity interest in such proposed transferee or are officers, directors, managers, or otherwise have the power to direct and control the business and affairs of such proposed transferee) have voluntarily filed or been discharged from bankruptcy, or have been the subject of an involuntary bankruptcy, reorganization, or insolvency proceedings (which was not dismissed within 90 days after the filing thereof) within the past five (5) years (bankruptcy filings by Affiliates shall not disqualify a proposed transferee, unless such Affiliates are any of the individuals or entities described in the parenthetical immediately above). DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL Page 17 B. Evaluation of the Acceptable Owner Criteria: Solely for the purpose of evaluating whether the proposed transferee has met the Acceptable Owner Criteria, the proposed transferee shall provide the following information to the Developer and certify that the information provided by the proposed transferee is true and correct and that the proposed transferee meets or exceeds the Acceptable Owner Criteria: 1. information sufficient for the City or any outside vendor engaged by the City to perform a due diligence investigation pursuant to Paragraph C below, including copies of any applicable operating licenses; 2. identification and summary description of its principals and its major real estate or other investments; 3. a list of all bankruptcies filed by such proposed transferee or to which such proposed transferee was a party-bankrupt, if any; and 4. such other evidence as is commercially reasonably necessary, as determined by Developer, to establish that the new entity proposed to be the Acceptable Owner meets the Acceptable Owner Criteria. C. With respect to any proposed transfer to a proposed transferee, City may, at its sole discretion, engage an outside vendor to perform a due diligence investigation at the Developer’s or such proposed transferee’s sole expense, which may include a search of civil, criminal, or bankruptcy proceedings in federal and state jurisdictions; regulatory filings; tax filings; lien, judgment and Uniform Commercial Code searches; business registrations, and the like; provided, however, that City’s right to conduct its own due diligence shall not expand or deemed to expand the Acceptable Owner Criteria or impose additional criteria with respect to whether a proposed transferee constitutes an Acceptable Owner. City shall be entitled to engage an independent accounting firm, the reasonable costs of which shall be borne by Developer or such proposed transferee, to review the information upon which the proposed transferee’s certifications were based, for the purpose of determining whether the certifications and/or information provided to the City is accurate and complete. Developer shall, or shall cause such proposed transferee to, reimburse City, upon demand, for any reasonable out-of-pocket costs incurred by City in connection with such transfer or proposed transfer to a proposed transferee, including the reasonable out-of-pocket costs of making inquiries and investigations into the conformance with the Acceptable Owner Criteria of such proposed transferee and the reasonable legal costs incurred, if any, in connection therewith capped at $10,000 in total for everything referenced in this section. D. Confirmation/Approval Process for Proposed Transferees: Regarding the City’s confirmation that a proposed transferee is an Acceptable Owner, or the City’s approval of a transfer that is not a Permitted Transfer, the parties hereby agree that: 1. When reviewing a potential Permitted Transfer for compliance with the Acceptable Owner criteria, the City Manager shall make a recommendation to the City DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL Page 18 Commission in reliance on the proposed transferee’s certification that the proposed transferee meets the Acceptable Owner Criteria (if a Permitted Transfer), along with the information provided by the proposed transferee and the results of any due diligence investigation performed by the City. If the City Manager does not recommend approval of the proposed transferee due to failure to meet the Acceptable Owner Criteria, the City Manager shall provide to Developer, upon Developer’s written request, specific written, commercially reasonable reasons for such action. 2. The City Commission shall not unreasonably withhold the City’s confirmation of a Permitted Transfer if the proposed transferee complies with the Acceptable Owner Criteria. 3. The City Manager may, but shall not be obligated to, make any recommendation for the City’s Approval of a transfer that is not a Permitted Transfer, and provided that any such transfer shall be subject to the prior written Approval of the City Commission, which may be granted, conditioned, or withheld by the City Commission in its sole discretion; and 4. If a proposed transfer requires the City’s confirmation or Approval, Developer shall deliver written notice to the City, which shall include (i) the name and address of the proposed transferee; (ii) the name and address of the proposed transferor; (iii) information describing the nature of the transaction; (iv) the percentage interest being conveyed; and (iv) the materials described in Paragraph B above. 5. The City shall have up to forty-five (45) days after the delivery of such written notice and complete information required under Paragraph B above, to determine whether, on a commercially reasonable basis, the proposed transferee meets the Acceptable Owner Criteria, and is a Permitted Transfer. The City shall have up to sixty (60) days after the delivery of such written notice and the information required under Paragraph B above whether to Approve in accordance herewith a transfer that is not a Permitted Transfer. 6. Provided that no Event of Default is then continuing, Developer’s request for confirmation that the proposed transferee meets the Acceptable Owner Criteria shall be deemed confirmed if the first correspondence from Developer to the City requesting such confirmation is in an envelope marked “PRIORITY” and contains a bold-faced, conspicuous (in a font size that is not less than fourteen (14)) legend at the top of the first page thereof stating that “THIS IS A REQUEST FOR CONFIRMATION OF A PERMITTED TRANSFER UNDER SECTION [___] OF THE GROUND LEASE, DATED AS OF [_________________], 2025, AND FAILURE TO RESPOND TO THIS REQUEST WITHIN SIXTY (60) DAYS WILL RESULT IN THE REQUEST BEING DEEMED CONFIRMED”and is accompanied by the complete information and documents required above and City fails to respond or to deny such request for confirmation in writing within such sixty (60) day period. Provided that no Event of Default is then continuing, Developer’s request for approval of a transfer that is not a Permitted Transfer shall be deemed Approved (except if the request includes a Foreign Instrumentality as a transferee) if the first correspondence from Developer to the City requesting such approval is in an envelope marked “PRIORITY” and contains a bold-faced, conspicuous (in a font size that is not less than fourteen (14)) legend at the top of the first page thereof stating that “THIS IS A REQUEST FOR APPROVAL OF A TRANSFER UNDER SECTION [___] OF THE DRAFT TERM SHEET– CERTAIN TERMS SUBJECT TO NEGOTIATION AND APPROVAL Page 19 GROUND LEASE, DATED AS OF [_________________], 2025, AND FAILURE TO RESPOND TO THIS REQUEST WITHIN NINETY (90) DAYS WILL RESULT IN THE REQUEST BEING DEEMED APPROVED, PROVIDED IF THE REQUEST INCLUDES A FOREIGN INSTRUMENTALITY AS A TRANSFEREE, THE CITY’S FAILURE TO RESPOND IN THE AFFIRMATIVE WITHIN NINETY (90) DAYS SHALL BE DEEMED A REJECTION OF THE REQUEST”and is accompanied by the information and documents required above and City fails to respond or to deny such request for Approval in writing within such ninety (90) day period. For the avoidance of doubt, if the City has not notified Developer, in writing, of the City Commission’s approval of a transfer that includes a Foreign Instrumentality as a transferee within the ninety (90) day period specified above, then such request shall be deemed rejected. 7. If the City notifies Developer, in writing, within the first thirty (30) days of such sixty (60) or ninety (90) day period, as applicable, that the information submitted is, on a commercially reasonable basis, incomplete, or insufficient (and specifies in what ways it is incomplete or insufficient), then Developer shall supplement such information , on a commercially reasonable basis, and the City shall then have thirty (30) days or sixty (60) days, respectively, after such supplemental information is provided to make its determination whether the proposed transferee meets the Acceptable Owner Criteria or to approve a transfer that is not a Permitted Transfer. 8. No confirmation by the City of a proposed transferee as an Acceptable Owner or its meeting of the Acceptable Owner Criteria shall have the effect of waiving or estopping the City from later claiming that said Acceptable Owner is no longer developing, operating, or maintaining the Project according to the terms of the Ground Lease. E. Interpretation: 1. All acts and omissions as well as rights and duties shall be done in a commercially reasonable manner, unless the standard of “sole discretion” is used. 2.The implied covenant of good faith and fair dealing under Florida law is expressly adopted.