2003-25436 Reso
RESOLUTION NO. 2003-25436
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE CITY
MANAGER TO DECLINE IN WRITING THE RIGHT OF FIRST
OFFER TRANSACTION, AS REQUIRED PURSUANT TO THE
TERMS OF SECTION 36.2 OF THE AGREEMENT OF LEASE
("LEASE") BETWEEN THE CITY OF MIAMI BEACH, FLORIDA
("OWNER") AND PELICAN DEVELOPMENT, LLC ("TENANT"),
DATED AS OF DECEMBER 1, 1999; FURTHER AUTHORIZING
THE CITY MANAGER AND CITY ATTORNEY TO
APPROVE/DISAPPROVE THE SALEITRANSFER OF TENANT'S
LEASEHOLD INTEREST IN THE PROJECT, AS REQUIRED
UNDER THE TERMS OF SECTION 10.5 OF THE AGREEMENT OF
LEASE, UPON COMPLETION OF THE CITY'S EVALUATION OF
INFORMATION IN CONNECTION WITH THE PROPOSED
TRANSFER OF THE PROJECT AND THE PROPOSED
PURCHASER.
WHEREAS, on December 30, 1997, the City of Miami Beach issued Request for
Proposals No. 20-97/98, seeking proposals forthe development of Public-Private Parking
facilities (the RFP); on April 6, 1998, proposals from five (5) different development teams
were submitted and evaluated by an Evaluation Committee; and on July 15, 1998, the City
Commission authorized negotiations with four (4) of the proposed development projects;
and
WHEREAS, as a result of said negotiations, on October 20,1999, the Mayor and
City Commission adopted Resolution No. 99-23372, approving an Agreement of Lease (the
Lease) and the Development Agreement between the City of Miami Beach and Pelican
Development LLC, for development of the site located at 10lh Street and Collins Avenue;
and
WHEREAS, in accordance with Article 10 of the Lease, "Sale of the Project,
Transfer and Subletting", Pelican Development LLC is requesting the City's approval of the
proposed sale and assignment of Pelican Development LLC's 100% interest in the
leasehold to Ocean Blvd II LLC, an Indiana limited liability company and/or its permitted
assigns; and
WHEREAS, in accordance with the Lease, Section 10.5, "Required Notices",
Pelican Development LLC has provided the City, as owner, with notice of the proposed
sale; and
WHEREAS, this section of the Lease further provides that the City, as part of its
approval process, may within ten (10) business days, request additional information in
connection with the proposed sale/transfer of the Project, to evaluate the proposed
purchaser of the Project; and
WHEREAS, the Offer Notice was received on November 25, 2003, giving the City
until January 9, 2004, to approve or disapprove the proposed sale/transfer; and
WHEREAS, the next City Commission meeting is scheduled for January 14, 2004,
which is beyond the compliance date for the City to approve/disapprove the sale/transfer of
Tenant's leasehold interest in the Project, as required under the terms of the Lease;
therefore it is necessary to delegate authority to approve/disapprove the sale/transfer of the
Tenant's leasehold interest, upon completion of the City's evaluation of information in
connection with the proposed transfer, to the City Manager and the City Attorney; and
WHEREAS, in accordance with Section 36.2 of the Lease, "Owner's Reciprocal
Right of First Refusal", the City also has the right to elect in writing within 45 days, to
consummate the Right of First Offer Transaction, at the same price and upon such other
material terms set forth in the Offer Notice; and
WHEREAS, the Offer Notice is summarized as follows:
Owner: City of Miami Beach
Tenant: Pelican Development LLC
Proposed Transferee: Ocean Blvd II LLC (Mark A. Siffin,
Managing Member)
Purchase Price: $12,000,000
Management Agreement: Park One will operate and manage
garage for an initial five year term,
subject to subsequent one year
renewals; and
WHEREAS, the Pelican Development LLC project consists of total building area of
129,661 s.f., with 344 parking spaces and 6,740 s.f. of retail space sub-leased to E. Levy
Corporation Inc., a surf and bathing suit apparel retail store; and
WHEREAS, based upon the Purchase Price of $12,000,000, equating to
approximately $34,884/space, which exceeds recent comparable sales (Le., the New
World Symphony proposed Development Agreement and Ground Lease terms include that
the City will fund a maximum of $12,250/per space plus 12.5% for soft costs), the
Administration is not prepared to recommend that the City exercise the Reciprocal Right of
First Offer Transaction; and
WHEREAS, according to the Purchase and Sale Agreement, the Buyer is not
permitted to meet with the City without Seller's prior consent; and
WHEREAS, it is purported that the purchaser, who also owns 1036-1052 Ocean
Drive (the former Ocean Promenade and Adrian Hotel), is purchasing the Project, at the
proposed purchase price, to provide parking mitigation for the proposed Ocean Drive
Project; and
WHEREAS, in the City's request for information, the Administration has advised
Seller that any parking mitigation achieved through Section 130-36 "Off-site Facilities"
requires a unity of title or restrictive covenant in lieu of unity of title, which can only be
granted by the Property Owner, (i.e. the City of Miami Beach), and which is not addressed
in this transaction.
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 authorize the City Manager to decline in writing the Right of First Offer
Transaction, as required pursuant to the terms of Section 36.2 of the Agreement of Lease
("Lease") between the City of Miami Beach, Florida ("Owner") and Pelican Development,
LLC ("Tenant"), dated as of December 1, 1999; further authorizing the City Manager and
City Attorney to approve/disapprove the sale/transfer of Tenant's leasehold interest in the
Project, as required under the terms of Section 10.5 of the Lease, upon completion of the
City's evaluation of information in connection with the proposed sale/transferofthe Project
and the proposed Purchaser, including but not limited to consideration of Tenant's and/or
the proposed Purchaser's responses to the City's requests for information and the City
Manager's conveying and establishing the City's position that the Lease does not permit a
sublease in whole or in aggregate that is greater than twenty percent (20%) of the parking
on the Project, or 68 parking spaces, without the prior writte app al of the City.
PASSED and ADOPTED this 1(;1t.. dayof])g, AI 200{
ATTEST:
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CITY CLERK
JMG/CMC/rar
T:\AGENOA\2003\dec1003\regular\Pelican.RES.doc
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
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Pate
u-
CllY OF MIAMI BEACH
COM\llISSION ITEM SUMMARY
m
Condensed Title:
A Resolution authorizing the City Manager to decline in writing the Right of First Offer transaction as
required pursuant to the terms of Section 36.2 of the Agreement of Lease ("Lease") between City of Miami
Beach, Florida ("Owner") and Pelican Development, LLC ("Tenanf') dated as of December 1, 1999; further
authorizing the City Manager and City Attorney to approve/disapprove the transfer of Tenant's leasehold
interest in the project as required under the terms of Section 10.5 of the Agreement of Lease upon
completion of the City's evaluation of information in connection with the proposed transfer of the project
and the orooosed purchaser.
Issue:
Shall the City Commission authorize the City Manager to decline the Right of First Offer Transaction and
authorize the City Manager and City Attorney to approve/disapprove the transfer of the project and the
orooosed ourchaser?
Item Summary/Recommendation:
I Approve the Resolution.
Financial Information:
Source of
Funds:
D
Finance Dept.
Ci Clerk's Office Le islative Trackin
Christina M. Cuervo
Si n-Qffs:
Department Director
T:\AGENDA\2003\dec1003\regular\Pelican.SUM.doc
AGENDA ITEM
DATE
R7G-
1l.-lQ-D3
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH. FLORIDA 33139
www.miamibeachfl.gov
To:
From:
Subject:
COMMISSION MEMORANDUM
Mayor David Dermer and
Members of the City Commission
Jorge M. Gonzalez \. ~
City Manager 0 r ()
Date: December 10, 2003
A RESOLUTION OF THE MAYOR AND MEMBERS OF THE CITY
COMMISSION OF THE CITY OF MIAMI BEACH AUTHORIZING THE CITY
MANAGER TO DECLINE IN WRITING THE RIGHT OF FIRST OFFER
TRANSACTION AS REQUIRED PURSUANT TO THE TERMS OF
SECTION 36.2 OF THE AGREEMENT OF LEASE ("LEASE") BETWEEN
CITY OF MIAMI BEACH, FLORIDA ("OWNER") AND PELICAN
DEVELOPMENT, LLC ("TENANT") DATED AS OF DECEMBER 1,1999;
FURTHER AUTHORIZING THE CITY MANAGER AND CITY ATTORNEY
TO APPROVE/DISAPPROVE THE TRANSFER OF TENANT'S
LEASEHOLD INTEREST IN THE PROJECT AS REQUIRED UNDER THE
TERMS OF SECTION 10.5 OF THE AGREEMENT OF LEASE UPON
COMPLETION OF THE CITY'S EVALUATION OF INFORMATION IN
CONNECTION WITH THE PROPOSED TRANSFER OF THE PROJECT
AND THE PROPOSED PURCHASER.
ADMINISTRATION RECOMMENDATION:
Approve the attached Resolution.
ANALYSIS:
On December 30, 1997, the City of Miami Beach issued RFP 20-97/98, seeking proposals
for the development of Public-Private Parking facilities. On April 6, 1998, proposals from
five (5) different development teams were submitted and evaluated by an Evaluation
Committee and on July 15,1998, the City Commission authorized negotiations with four (4)
of the proposed development projects.
As a result of said negotiations, on October 20, 1999, the Mayor and City Commission
adopted Resolution No. 99-23372 approving the Agreement of Lease and the
Development Agreement between the CitX of Miami Beach and Pelican Development LLC,
for Development of the site located at 10 h Street and Collins Avenue.
In accordance with Article 10 of the Lease, Sale of the Project, Transfer and Subletting,
Pelican Development LLC is requesting the City's approval of the proposed sale and
assignment of Pelican Development LLC's 100% interest in the leasehold to Ocean Blvd II
LLC, an Indiana limited liability company and/or its permitted assigns. In accordance with
the Lease, Section 10.5 required notices, Pelican Development LLC has provided the City,
as owner, with notice ofthe proposed sale. This section ofthe Lease further provides that
the City, as part of its approval process may within 10 business days, request additional
December 10, 2003
City Commission Memorandum
Pelican Development, LLC
Page 2 of 3
information in connection with the proposed transfer of the project and to evaluate the
proposed purchaser of the project. Attached is a draft of the letter requesting information.
Since the Offer Notice was received on November 25, 2003, the Agreement provides that
the City must approve or disapprove of the proposed transfer within 45 days, or by January
9, 2004, which is prior to the next City Commission meeting date, scheduled for January
14, 2004. In order to comply with the contractual deadlines in a timely manner, the
subject resolution delegates authority to approve/disapprove the transfer ofTenant's
leasehold interest in the project as required under the terms of Section 10.5 of the
Agreement of Lease upon completion of the City's evaluation of information in connection
with the proposed transfer of the project and the proposed purchaser.
Additionally, in accordance with Section 36.2 of the Agreement of Lease, Owner's
Reciprocal Right of First Refusal, Owner has the right to elect in writing within 45 days after
Owner's receipt of the Offer Notice, to consummate the Right of First Offer Transaction at
the same price and upon such other material terms set forth in the Offer Notice.
The Offer Notice is summarized as follows:
Owner:
Tenant:
Proposed Transferee:
Purchase Price:
Management Agreement:
City of Miami Beach
Pelican Development LLC
Ocean Blvd II LLC (Mark A. Siffin, Managing Member)
$12,000,000
Park One will operate and manage garage for an initial five
year term, subject to subsequent one year renewals.
The Pelican Development LLC project consists of total building area of 129,661 s.f. with
344 parking spaces and 6,740 s.f. of retail space sub-leased to E. Levy Corporation Inc., a
surf and bathing suit apparel retail store.
Based upon the purchase price of $12,000,000, equating to approximately
$34,884/space, which exceeds recent comparable sales (i.e., the New World
Symphony terms include that the City will fund a maximum of $12,250/per space plus
12.5% for soft costs) and therefore, the Administration is not prepared to
recommend that the City exercise the Reciprocal Right of First Offer Transaction.
According to the Purchase and Sale Agreement, the Buyer is not permitted to meet with
the City of Miami Beach without Seller's prior consent. It is purported that the Purchaser,
who also owns 1036-1052 Ocean Drive (the former Ocean Promenade and Adrian Hotel),
is purchasing the subject project, at the proposed purchase price, to provide parking
mitigation for the proposed Ocean Drive Project. However, in the City's request for
information we have advised Seller that any parking mitigation achieved through Section
130-36 "Off-site Facilities" requires a unity of title or restrictive covenant in lieu of unity of
title, which can only be granted by the Property Owner, i.e. the City of Miami Beach, which
is not addressed in this transaction.
It is recommended that the Mayor and City Commission adopt the attached Resolution
declining in writing the Right of First Offer Transaction and further authorize the City
December 10, 2003
City Commission Memorandum
Pelican Development, LLC
Page 3 of 3
Manager and City Attorney to approve/disapprove the transfer of tenant's leasehold
interest in the project as required under the terms of section 10.5 of the agreement of lease
upon completion of the city's evaluation of information in connection with the proposed
transfer of the Project and the proposed Purchaser.
JMG/~rar
T:\AGENDA\2003\dec1003\regular\Pelican.MEM.doc
CITY OF MIAMI BEACH
~
1700 CONVENTION CENTER DRIVE, MIAMI BEACH, FLORIDA 33139
http:\\ci.mlaml-beach.fl.us
Office of the City Manager
Telephone (305) 673-7010
Facsimile (305) 673-7782
December 9, 2003
HAND.DELlVERED
Pelican Development, L.L.C.
Attention: Wayne Ducote
Re: Proposed Purchase and Sale Agreement of leasehold interest of Agreement of Lease
between the City of Miami Beach and Pelican Development, LLC, dated December 1, 1999
Dear Mr. Ducote:
Enclosed is a copy of our December 9, 2003, letter regarding Pelican Development, LLC's request
for our consent to the transfer of Tenant's leasehold interest in the referenced Agreement. This
matter is scheduled for City Commission consideration at its regularly scheduled meeting tomorrow.
This item is scheduled as a "time-certain" item at 11 :00 a.m.
Please acknowledge your receipt of this letter below. Thank you.
Sincerely,
)~60~
Jorge M. Gonzalez
City Manager
JMC/CMC/AP
Received by:
(signature)
(print name)
(title)
Date:
CITY OF MIAMI BEACH
~
1700 CONVENTION CENTER DRIVE, MIAMI BEACH, FLORIDA 33139
http:\\ci.miami-beach.fl.us
Office of the City Manager
Telephone (305) 673-7010
Facsimile (305) 673-7782
December 9, 2003
CERTIFIED MAIURETURN RECEIPT REQUESTED
Pelican Development, L.L.C.
c/o Tchoupitoulas Partners
601 Poydras Street, Suite 2011
New Orleans, Louisiana 70130
Attention: David L. Ducote
Re: Proposed Purchase and Sale Agreement of leasehold interest of Agreement of Lease
between the City of Miami Beach and Pelican Development, LLC, dated December 1, 1999
Dear Mr. Ducote:
We are in receipt of the written requestfor our consentto the transfer ofT enant's leasehold interest
in the referenced Agreement. Pursuantto Section 10.5 Required Notices ofthe Agreement, please
provide us with information regarding the proposed transferee, Ocean Blvd II LLC,
(hereinafter referred to as "Ocean Blvd") as follows (the relevant time period for all requests being
the immediate past five (5) years):
1. Please state in detail, the intentions of Ocean Blvd regarding this transfer and any
future subleases.
2. Definition of Ocean Blvd II LLC "and lor its permitted assigns". Does Ocean Blvd
intend to assign its interests in the leasehold interest in the future? If so, please detail the
circumstances. Our consent to the transfer, if granted, shall only be for a one time transfer to Ocean
Blvd II LLC and for no other entities.
3. Ocean Blvd's experience in the ownership, management, and operation, of parking
facilities. For each project, identify names of principals, general partners, etc., contact information
(address, telephone, fax, etc.) of the entities, location of facilities, number of parking spaces and
stories, any ancillary uses, estimated project costs and financing structure.
4. Qualifications of Ocean Blvd's management team. Include identification of all individuals
and entities, including the jurisdictions under which the entities are organized. Provide current
resumes of principal representatives involved, Articles of Incorporation, and Certificates of Good
Standing.
5. Financial disclosure attesting to the ability of Ocean Blvd as transferee. This
disclosure must include but not be limited to, past and current financial statements and recent
banking or financing references. Specific references and at least two preferred banking references
for each member of Ocean Blvd, along with express written permission to contact these references,
are required.
6. Financing plans. Describe how proposed transfer will be financed, including the source of
capital, amount and source of permanent financing, amount and source of operating capital.
Pelican Development LLC
December 9, 2003
Page 2 of 3
Provide a financial plan which includes a ten-year pro forma for the facility, reflecting revenues and
expenses including real estate taxes and debt service, including lease payments. Include letters of
commitment from financial institutions rated M or better, documenting Ocean Blvd's ability to
secure the necessary funds to operate the facility. Additionally, include letters of commitment from
bonding and insurance firms rated M or better, demonstrating Ocean Blvd's ability to obtain the
required bonds and insurance.
7. Please inform us of the relevance of Article 4.6 (b) of the Purchase and Sale
Agreement. As you are aware, all communications between the public and govemmental agencies
are public information. Therefore, please explain this section of the transaction between the Buyer
and the Seller.
Furthermore, in regard to the existing operations, please provide us with the following information
regarding Pelican Development LLC:
8. Status of any and all sublease operations, including reported revenues.
9. A copy of the Enterprise Zone Program application for real property tax abatements,
as per the Purchase and Sale Agreement, Article 8.7 (b) and all relevant back-up information.
Additionally, we wish to inform you that any Buyer or transferee should not rely on the purchase of
the leasehold interest in order to comply with regulatory parking requirements or as parking
mitigation for another project. Therefore, we call your attention to the provisions of City Code Sec.
130-36 Off-site facilities, cited below, which requires property owner's approval of a unity of title or
restrictive covenant, which must be separately granted/approved by the City of Miami Beach, as
Owner. This letter and our future consent to the proposed transfer, if granted, is not intended
to, and shall !1Q! be deemed to be, consent regarding any parking requirements or parking
mitigation for this or any other project.
Sec. 130-36. Off-site facilities.
(a) All parking spaces required in this article shall be located on the same lot with the
building or use served, or within a distance not to exceed 500 feet from such lot, or 1 ,200 feet
(i) if located in the architectural district or a local historic district, or (ii) the parking lot is
operated on a valet basis as per section 130-35. The distance separation shall be measured
by following a straight line from the lot on which the main permitted use is located to the lot
where the parking lot or garage is located.
(b) Where the required parking spaces are not located on the same lot with the building
or use served and used as allowed in section 130-32, a unity of title or for nonadjacent lots,
either a unity of title or a restrictive covenant in lieu of unity of title for parking unification shall
be prepared for the purpose of insuring that the required parking is provided. Such unity of
title or restrictive covenant shall be executed by owners of the properties concerned,
approved as to form by the city attorney, recorded in the public records of the county as a
covenant running with the land and shall be filed with the application for a building permit.
(c) Temporary parking lot facilities shall be pursuant to section 130-68.
(Ord. No. 89-2665, ~ 7-3, eff. 10-1-89; Ord. No. 98-3108, ~~ 5(D), 6,1-21-98; Ord. No. 2002-
3346, ~ 1, 1-30-02)
Finally, there are two outstanding issues which we would like to address before a sale or transfer of
any leasehold interest is considered.
First, there is an outstanding $31.30 due for Florida sales tax on the leased premises. You will
recall that it was determined that only $21.88 per month is due for sales tax on the retail portion (five
percent) of the leased premises. However, because you had a credit for sales tax previously paid
which extended through a portion of October, there was $9.42 due for October 2003, and $21.88 for
Pelican Development LLC
December 9, 2003
Page 3 of 3
November 2003. Please remit the $31.30 at your convenience and remember to include $21.88
sales tax with future lease payments.
Second, there is the issue of the Replacement Reserve Account outlined in Section 16.5 (a) of the
Lease Agreement. Please provide evidence of the interest bearing reserve account for 122,921
square feet of parking garage space (including common areas). This account should include a
monthly deposit, beginning in December, 2002 for the month of November, 2002, in the amount of
$2,560.85.
If you require additional information from us, please let us know.
Sincerely,
, .)-" ---<
I ,- X . (" ') (~"--::>
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Jorge M. Gonzalez
City Manager
JMG/CMC/AP
F:IDDHP\$ALL IAnnalPelican DevelopmenllllrRequiredNotices.doc
cc: Murray Dubbin, City Attorney
Bloom & Minsker, P.L.
Suite 700
1110 Brickell Avenue
Miami, Florida 33131
Attn: Joel N. Minsker, Esq.
Greenberg, Traurig, PA
1221 Brickell Avenue
Miami, Florida 33131
Attn: Richard J. Giusto, Esq.
Ocean Blvd. II LLC
328 S. Walnut Street, Suite 2
Bloomington, IN 47401
Attn: Mark A. Siffin
Bose McKinney & Evans LLP
600 E. 96th Street, Suite 500
Indianapolis. IN 46240
Attn: Philip A. Nicely, Esq.
Dwyer & Cambre
Suite 707
3421 North Causeway Blvd.
Metairie, Louisiana 70002
Attn: Stephen I. Dwyer, Esq_