96-22212 RESORESOLUTION NO. 96-22212
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA (THE "CITY") AUTHORIZING THE
CITY TO LEND THE MIAMI BEACH REDEVELOPMENT AGENCY
TWENTY MILLION DOLLARS ($20,000,000.00), PURSUANT TO THE
PROMISSORY NOTE ATTACHED HERETO AND INCORPORATED
HEREIN.
WHEREAS, the Miami Beach Redevelopment Agency (the "RDA") has entered int.> a 'a
agreement with MB Redevelopment, Inc., an entity affiliated with Loews Hotels Holdin!;
Corporation, which requires the RDA to fund certain monies in connection with the Loews Mi an ,i
Beach Hotel project (the "Hotel") and the public parking garage project (the "Public Garage") at 161 ih
Street between Collins and Washington Avenues; and
WHEREAS, a I~ortion of the monies for such funding were proposed to be obtaine:l i~
connection with a Section 108 guaranteed loan in the amount often million dollars ($10,000,0013.0()
from the U.S. Department of Housing and Urban Development; and
WHEREAS, as of the current date, neither the City of Miami Beach, Florida (the "Ci ty')
nor the RDA has received those funds; and
WHEREAS, construction on the Hotel has already started and construction on the Publi:
Garage is expected to begin shortly; and
WHEREAS, it is the desire of the City and the RDA that development and construction c f
the Hotel and Public Garage proceed expeditiously; and
WHEREAS, the City desires to provide a line of credit in the amount of twenty mil [io ~
dollars ($20,000,000.00) to the RDA, for a period of eighteen (18) months, in order to allow th ,~
RDA to meet its funding obligations concerning the Hotel, the Public Garage and other proje ct~,
such as the African-American owned hotel project; and
WHEREAS, the RDA desires to borrow money pursuant to that line of credit; and
WHEREAS, the RDA expects to have sufficient bonding capacity to issue bond:;
approximately eighteen (18) months in order to repay any amounts owed pursuant to the promissor
note, attached hereto and incorporated herein; and
WHEREAS, the promissory note, which is attached hereto and incorporated herein, cont; tin;
the terms of the line of credit.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA that:
Section 1. The City is authorized to lend the RDA the amount of twenty millio ~
dollars ($20,000,000.00) under a line of credit, pursuant to the terms of the promissory note attac:he ]
hereto and incorporated herein.
Section 2. This Resolution shall take effect immediately upon its adoption.
PASSED and ADOPTED this 20th
ATTEST:
CITY CLERK
day of November ,1996.
AITXkw
f:Xatto\taca~resos~20mill.res
Attachment
FO::?M APPROVED
Date /¢2~/9~ ,
CITY OF MIAMI BEACH ",
CITY HALL 1'700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
OFFICE OF THE CITY MANAGER
COMMISSION MEMORANDUM NO. "']
TELEPHONE: (3(:~5),!i~7:3-7010
FAX: (3(~5)!i;7:3-T'/82
November 20, 1996
To:
Mayor Seymour Gelber and
Members of the City Commission
From:
Subject:
Jose Garcia-Pedrofl
City Manager
Authorization of a $20 million Line of Credit to the Redevelopment Agency fc,r ~
Period of Not More Than Eighteen Months
Administrative Recommendation
The Administration recommends that the Mayor and City Commission approve the Resolutic :a
authorizing a $20 million line of credit to be available to the Miami Beach Redevelopment Age'~nc 'y
for a period of not more than eighteen months.
Background
The Administration was assured by the Housing and Urban Development CrIUD) Department, >v, .r
a year ago that a Section 108 Block Grant Loan for $10 million would be available for the Lce~ s
Hotel Project. Since that time the City has received repeated assurances that these funds woul.:! Ice
available to the City in time for the closing of the Project. The closing date for the Project came ar :1
went with additional assurances of the availability of the funds but with no documents from I-i[U )
on the loan. The City finally received the proposed loan documents from HUD at the end ot la :;t
week and they contain numerous sections and compliance issues that will be almost impossibh; ~ .,r
the City to comply with due to the advanced stage of the Project.
Analysis
The desire of the City for this loan was because of cash flow to the Redevelopment Agency and tie
bondable revenues for the Project. The City has sufficient cash reserves to loan the Agency the fmc s
it will need for both the Loews Project and the second hotel project without impairing its abili'.7 ! o
meet its obligations over the next year and a half. The advantage of the arrangement is twofold. Tte
City will loan these funds to the Agency at a rate, New York prime, in excess of the rate that .s
currently being eamed on its investments. This will increase the rate of return that is earned by tl'e
City on its cash management reserves. Additionally, the funds necessary to complete both of tt'e
Agenda Item__
Date
t I-.?, o-q
hotel projects will be available without the burden of the record keeping and compliance issues 1:ha I:
come with the loan from HUD.
The ability of the Agency to issue the Tax Increment Bonds necessary to repay the City will likewist:,
be improved by the lapse of time covered by this "bridge loan" from the City. This improvement ,.vii
come in both of the revenue streams pledged to the repayment of the Tax Increment Bonds. Pfio
to the issuance of the long term financing to repay the City, another year of the taxable values of the
property in the redevelopment area will be known. An increase in this value will translate inh,
additional bondable revenues available and additional debt capacity for the Agency. A much lm'ge
increase will be available from the resort tax. With the signing of the development agreement for th,...',
convention center hotel (the Loews Project), the additional 1% tax on room rents took effect.
1% tax should generate $2.7 million in additional resort tax for this fiscal year. Added to this amc,un 't
is the growth in the tax, estimated at a 7% rate, which will produce an additional $1 million in re:!~ot't
tax. The current estimates for resort tax collections for this fiscal year are $14.4 million, an incre.as,,.~:
of $3.7 million for the year. This increase in resort tax would be enough, by itself, to provide th,.:,'
bondable revenues for the approximately $25 million in Tax Increment Bonds necessary to repa:.'
the City next year. The due date on the loan to the Agency will be in no more than eighteen month
which will allow sufficient time to elapse for these bonds to be issued.
Conclusion
As the intemal financing of the short term loan to the Redevelopment Agency will provide additiona
revenues to the City and eliminate the compliance issues associated with the Section 108 Loan,
~nanc'.~ should be approve&
JGP/RJN/cp
RESOLUTION NO. 256-96
A RESOLUTION OF THE CHAIRMAN AND MEMBERS OF THE MIAMI
BEACH REDEVELOPMENT AGENCY (THE "RDA") AUTHORIZING THE
CHAIRMAN AND SECRETARY TO EXECUTE THE PROMISSORY NOTE
ATTACHED HERETO AND INCORPORATED HEREIN, PURSUANT TO
WHICH THE RDA WILL BE ABLE TO BORROW UP TO TWENTY
MILLION DOLLARS ($20,000,000.00) FROM THE CITY OF MIAMI
BEACH, FLORIDA UNDER A LINE OF CREDIT, AND AUTHORIZING
THE RDA TO BORROW MONIES PURSUANT TO THAT LINE OF
CREDIT.
WHEREAS, the Miami Beach Redevelopment Agency (the "RDA") has entered into
agreement with MB Redevelopment, Inc., an entity affiliated with Loews Hotels HoMin!g
Corporation, which requires the RDA to fund certain monies in connection with the Loews Mi an i
Beach Hotel project (the "Hotel") and the public parking garage project (the "Public Garage") at t61
Street between Collins and Washington Avenues; and
WHEREAS, a portion of the monies for such funding were proposed to be obtained in
connection with a Section 108 guaranteed loan in the amount often million dollars ($10,000,00C .01 ,)
from the U.S. Department of Housing and Urban Development; and
WHEREAS, as of the current date, neither the City of Miami Beach, Florida (the "C: ty )
nor the RDA has received those funds; and
WHEREAS, construction on the Hotel has already started and construction on the PtCbl c
Garage is expected to begin shortly; and
WHEREAS, it is the desire of the City and the RDA that development and constmctic.n
the Hotel and Public Garage proceed expeditiously; and
WHEREAS, the City desires to provide a line of credit in the amount of twenty mi; .licn
dollars ($20,000,000.00) to the RDA, for a period of eighteen (18) months, in order to allov~ fie
RDA to meet its funding obligations concerning the Hotel, the Public Garage and other proj ;:el ;,
such as the African-American owned hotel project; and
WHEREAS, the RDA desires to borrow money pursuant to that line of credit; and
WHEREAS, the RDA expects to have sufficient bonding capacity to issue bonC.s n
approximately eighteen (18) months in order to repay any amounts owed pursuant to the promi~, so: 'y
note, attached hereto and incorporated herein; and
WHEREAS, the promissory note, which is attached hereto and incorporated herein, conmi;,:ts
the tenns of the line of credit.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE CHAIRMAN AND
MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY that:
Section 1. The Chairman and Secretary are authorized to execute the promissory
note which is attached hereto and incorporated herein, pursuant to which the RDA is able to borrow
up to twenty million dollars ($20,000,000.00) from the City under a line of credit.
Section 2. The RDA is authorized to borrow monies pursuant to that line ot
credit.
Section 3. This Resolution shall take effect immediately upon its adoption.
PASSED and ADOPTED this 20oh
ATTEST:
SECRETARY
AITIw
f:~alloXtacaXresos~.Omill.rda
Attachment
day of November , 1996.
FORM APPROVED
REDEVELOPMEN]' AGENCY
GENERAL COUNSEL
Date I J//~ ~/,~
Miami Beach
Redevelopment Agency
1700 Convention Center Drive
Miami Beach, Florida 33139
Telephone: (305) 673-7193
Fax: (305) 673-7772
REDEVELOPMENT AGENCY MEMORANDUM NO.' 96-33
November 20, 1996
To:
Chairman Seymour Gelber and
Directors of the Redevelopment Agency
From:
Jose Garcia-Pedrosa
Executive Director
Subject:
Authorization of a Loan from the City of Miami Beach to the Redevelopment
Agency of a $20 Million Line of Credit for a Period of Not More Than Eightee a
Months
Administrative Recommendation
The Administration recommends the Chairman and Directors of the Redevelopmerit Agency apprav,,'
the Resolution authori:rjng the Redevelopmerit Agency to borrow up to $20 million pursuant to a
of credit to be available from the City of Miami Beach for a period of not more than eighteen
months.
Background
The Agency was assured by the Housing and Urban Development (HUD) Department over a 3 'ca ':
ago that a Section 108 Loan for $10 million would be available for the Loews Hotel Project. Si:ao,:
that time the Agency has received repeated assurances that these funds would be available to the (:it.,
in time for the closing of the Project. The closing date for the Project came and went with additic,na l
assurances of the availability of the funds but with no documents from HUD on the loan.
Agency finally received the proposed loan documents from HUD at the end of last week and
contain numerous sections and compliance issues that will be almost impossible for the Agenc:.t t~:
comply with due to the advanced stage of the Project.
Analysis
The desire of the Agency for this loan was because of cash flow to the Redevelopment Agency
the bondable revenues for the Project. The City has sufficient cash reserves to loan the Agency the
funds it will need for both the Loews Project and the second hotel project without impairing. it:;
ability to meet its obligations over the next year and a hale The advantage of the arrangemeEt i:;
twofold. The Agency will receive these funds from the City without incurring the costs of such
financing on a conventional basis. This will lower the effective borrowing cost Of the Agency.
$CUTI DCINTE
! edevelcpment District
Cll CI:NIEI
t MJeveleoment Uisbit
~3ElqD~I~I~I3-B
~YY4El~3ER 20, 1996
Additionally, the funds necessary to complete both of the hotel projects will be available without
burden of the record keeping and compliance. issues that come with the loan from HUE).
The ability of the Agency to issue the Tax Increment Bonds necessary to repay the City will likewis.:::
be improved by the lapse of time covered by this "bridge loan" from the City. This improvemen
will come in both of the revenue slxearns pledged to the repayment of the Tax Increment Bonds
Prior to the issuance of the long term financing to repay the City, another year of the taxable value:.;
of the property in the redevelopment area will be known. An increase in this value will translate into,
additional bondable revenues available and additional debt capacity for the Agency. A much lm'ge:'
increase will be available from the resort tax. With the signing of the development agreement for
convention center hotel (the Loews Project), the additional 1% tax on room rents took effect.
1% tax should generate $2.7 million in additional resort tax for this fiscal year. Added to this amc,un
is the growth in the tax, estimated at a 7% rate, which will produce an additional $1 million in re::~or:
tax. The current estimates for resort tax collections for this fiscal year are $14.4 million, an incre,as,.,
of $3.7 million for the year. This increase in resort tax would be enough, by itself, to provide th,.,
bondable revenues for the approximately $25 million in Tax Increment Bonds necessary to re?a:'
the City next year. The due date on the loan to the Agency will be in no more than eighteen mor.~tlx;
which will allow sufficient time to elapse for these bonds to be issued.
Conclusion
As the internal icing of the short term loan to the Redevelopmerit Agency will provide additic.,na.
revenues to the City and eliminate the compliance issues associated with the Section 108 Loan, .:'hi:
icing should be approved.
JGP/RJN/cp
PROMISSORY NOTE
$20,000,000.00
MIAMI BEACH, FLORI]I}.a,,
November 20, 199t i
FOR VALUE RECEIVED, the undersigned, the Miami Beach Redevelopment Agency,
public body corporate and politic ("Maker"), promises to pay to the order of the City of Miam.
Beach, Florida, a Florida municipal corporation ("Payee"), at its offices at 1700 Convention Cente
Drive, Miami Beach, Florida or at such other address in the United States of America as ma)
specified in writing from time to time by holder hereof, the principal sum of TWENTY MILLI'I3I~..
AND NO/100 DOLLARS ($20,000,000.00) (the "Loan"), or such lesser principal amount as
outstanding, payable together with interest thereon from the date hereof at the rate of PRIME pe
annum upon the unpaid balance from time to time outstanding until maturity, same being payaisle
in lawful money of the United States of America, as follows:
The entire principal balance of the Loan together with all accrued and
unpaid interest on the Loan shall be due and payable in full on April
17, 1998.
The rate of pRIME per annum, as referenced above, shall be adjusted each month and sZ'aal [
be the PRIME rate as stated in The Wall Street Journal on the first business day of the month. 'Fh ~,'
principal of this Note may be prepaid in whole or in part at any time and from time to time wiff. ou I
penalty or premium.
By virtue of this Note and subject to the conditions of this Note, Payee is creating a line
credit in favor of Maker and Maker may draw upon this line of credit as often as it chooses as l..~n~i
as the outstanding principal balance under this Note does not exceed Twenty Million and NO/!
Dollars ($20,000,000.00) at any given time.
If default is made under this Note which default continues for a period of thirty (30) day
following written notice to the Maker, then at the option of the holder hereof, the entire outstanC.in:::
principal sum, together with all accrued and unpaid interest shall become immediately due .an,,
payable.
Presentment for payment, demand notice of dishonor, protest and notice for protest ar
hereby waived by all makers and endorsers hereof, together with all other requirements to hold eac:'t
of them liable as Makers and endorsers.
Any and all amounts payable under this Note shall be secured solely by Net Trust Fand
Revenues, as defined in Miami Beach Redevelopment Agency Resolution No. 150-94, adopted
January 5, 1994 (that resolution, as supplemented by Resolution No. 245-96, adopted June 5, 199(,
and as further supplemented fi'om time to time, is referred to herein collectively as the "Resolution"~.
Such security, as referred to in the preceding sentence, is junior, inferior and subordinate ir.~ all
respects to the bonds issued from time to time pursuant to the Resolution as to lien on and sourc.,'
and security for payment from the Net Trust Fund Revenues, and in all other respects.
ATTEST:
f:~attoXtaca~eemm~ptomnote.$20
MIAMI BEACH REDEVELOPMENT AGENCI,
a public body corporate and politic
BY: x · !
~lber, CFirnlan
FORM APPROVED
REDEVELOPMENT AGENCY
GENERAL COUNSEL
2
ADDENDUM TO PROMISSORY NOTE
Notwithstanding anything to the contrary contained in this Promissory Note, the
date on which this Promissory Note shall be due and payable is hereby extended from April
17, 1998 to August 1, 1998, and all other conditions of this Promissory Note shall remain
in full force and effect.
CITY OF MIAMI BEACH
Neisen O. Kasdin, Mayor
ATTEST:
APPROVED AS TO
FORM & LANGUAG[!!:
& FOR EXECUTICN
The Miami Beach Redevelopment Agency hereby agrees to the extension of the
maturity date of the foregoing Promissory Note to August 1, 1998 and agrees that all other
conditions of this Promissory Note shall remain in full force and effect.
MIAMI BEACH REDEVELOPMENT AGENCY
BY:
Neisen
O. Kasdin, Chairman
ATTEST:
Robert Par:;her, Secretary
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
;(~'~'~ Dot~" '..~-~',...:.
General Ce.-,~) ~:'~:'~:~:~"2~ :'Y' Oi:"'
), Fh.'.l~:~ PARC;~E. LF~ Clhr 31erk t,r city
r,i~z,~!m) se~ch,, F~; do he 'eby cerL;i'7
the etyave aqd ,'ore..~-9~ng is;:~ true: aF~{l
COpt~ Of the o~i,cjinal then:f>f on ril;,~ !n
l~l~ my hand and tt':e =~eal of said City
ROBERT PAR 3F ER