Loading...
99-23105 RESO RESOLUTION NO. 99-23105 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, AUTHORIZING THE MAYOR TO EXECUTE THE LEASE BETWEEN 711 DECO, INC. AND THE CITY OF MIAMI BEACH DATED JUNE 20, 1997, AND DIRECTING THE CITY MANAGER TO IDENTIFY FUNDING OF APPROXIMATELY $60,000 FROM THE ULTIMATE USER DEPARTMENT, SEEKING SUBSEQUENT APPROPRIATION AUTHORIZATION, TO PAY THE CITY'S NET COST OF BUILDING OUT APPROXIMATELY 3,000 SQUARE FEET OF SPACE LEASED BY THE CITY AT 701-725 5TH STREET IN THE CITY OF MIAMI BEACH, FLORIDA; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Miami Beach, Florida (the "City"), heretofore entered into an agreement dated November 7, 1995 (the "Development Agreement"), with West Side Partners, Ltd., a Florida limited partnership ("West Side"), East Coastline Development, Ltd., a Florida limited partnership, 404 Investments, Ltd., a Florida limited partnership, Azure Coast Development, Ltd., a Florida limited partnership, Beachwalk Development Corporation, a Florida corporation, Porto fino Real Estate Fund, Ltd., a Florida limited partnership, St. Tropez Real Estate Fund, Ltd., a Florida limited partnership, and Sun & Fun, Inc., a Florida corporation (collectively the "Porto fino Entities") and the Miami Beach Redevelopment Agency ("RDA"); and WHEREAS, said Development Agreement provided for a lease of3,OOO square feet of space in the South Pointe Redevelopment Area to be leased to the City, to be used for municipal purposes or for community meeting space, for $1.00 per year, plus common area maintenance after the third lease year, for a term of 40 years; and WHEREAS, such provision survived the termination of the Development Agreement on June 20, 1998; and WHEREAS, the City has received a lease (a copy of which is attached hereto), for 3,000 square feet of space at 701-725 5th Street in the City of Miami Beach (the "Premises"), that conforms to the terms set forth in the Development Agreement; and WHEREAS, it is necessary to execute said lease; and WHEREAS, it is necessary to appropriate funds to build out the Premises. NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AS FOLLOWS: nAGENDA\1999\MARI799\REGULAR\APPROP1.RF...,> Marchll,1999(12:33pm) Section 1. The Mayor is hereby authorized to execute said lease. Section 2. The City Manager is hereby directed to identify funding of approximately $60,000 from the ultimate user department seeking subsequent appropriation authorization, to pay the City's net cost of building out 3,000 square feet of space leased by the City at 701-725 5th Street in the City of Miami Beach. PASSED and ADOPTED this 17th day of 1J!#Ch MAYOR ,1999. ATTEST: APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION 1A1~ ~ T:\AGENDAII999\MARI79?\REGULAR\APPROPI.RES MBn:hll,1999(12:33pm) 2 February 3, 1999 Michel Kadosh 711 5th Street Miami Beach, FL 33139 Marla Dumas City of Miami Beach Miami Beach, FL. 33139 Per our last meeting, this is to confirm my offer to buy back the city lease for the office at 711 5th Street (Decoplaza) for $180,000. Please note in its current state it will take approximately $1001000 to make it rentable. I'm prepared to purchase the lease as is. The offer equals the purchase price that I paid for the fee simple interest in the property on a square foot basis. The monthly expenses are as follows: R.E. Taxes $1000' Maintenance 460 Insurance 360 Management Fee 187.50 TOT AUIVJONTHL y. $2007.50 .. .... -. . ..;.~~.....,.~~~ Michel Kadosh NET PRESENT VALUE OF 701 5TH STREET LEASE: Lease Year Rental Value * CAM Charges * Net Value (based on $15/sf) Year 3 ** Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 1 0 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30 Year 31 Year 32 Year 33 Year 34 Year 35 Year 36 Year 37 Year 38 Year 39 Year 40 $45,000 $46,350 $47,741 $49,173 $50,648 $52,167 $53,732 $55,344 $57,005 $58,715 $60,476 $62,291 $64,159 $66,084 $68,067 $70,109 $72,212 $74,378 $76,609 $78,908 $81 ,275 $83,713 $86,225 $88,811 $91,476 $94,220 $97,047 $99,958 $102,957 $106,045 $109,227 $112,504 $115,879 $119,355 $122,936 $126,624 $130,423 $134,335 NET PRESENT VALUE OF LEASE: LESS: Build-out Cost: NET LEASE VALUE: $0 $24,210 $24,936 $25,684 $26,455 $27,249 $28,066 $28,908 $29,775 $30,669 $31,589 $32,536 $33,512 $34,518 $35,553 $36,620 $37,718 $38,850 $40,015 $41,216 $42,452 $43,726 $45,038 $46,389 $47,781 $49,214 $50,690 $52,211 $53,777 $55,391 $57,052 $58,764 $60,527 $62,343 $64,213 $66,139 $68,124 $70,167 $45,000 $22,140 $22,804 $23,488 $24,193 $24,919 $25,666 $26,436 $27,229 $28,046 $28,888 $29,754 $30,647 $31,566 $32,513 $33,489 $34,493 $35,528 $36,594 $37,692 $38,823 $39,987 $41,187 $42,423 $43,695 $45,006 $46,356 $47,747 $49,179 $50,655 $52,174 $53,740 $55,352 $57,012 $58,723 $60,484 $62,299 $64,168 $411,151.09 -$60.000.00 $351,151.09 * Rental Value and CAM Charges are escalated at a rate of 3% annually. ** Lease commenced in June 1997 for a term of 40 years. This analysis is based on the remaining 38 year term of the lease Le. June 1999-2037. clchrist/701 lease NET PRESENT VALUE OF 701 5TH STREET LEASE: Lease Year Rental Value. CAM Charges. Net Value (based on $20/sf) Year 3.. Year 4 YearS Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30 Year 31 Year 32 Year 33 Year 34 Year 35 Year 36 Year 37 Year 38 Year 39 Year 40 $60,000 $61,800 $63,654 $65,564 $67,531 $69,556 $71,643 $73,792 $76,006 $78,286 $80,635 $83,054 $85,546 $88,112 $90,755 $93,478 $96,282 $99,171 $102,146 $105,210 $108,367 $111,618 $114,966 $118,415 $121,968 $125,627 $129,395 $133,277 $137,276 $141,394 $145,636 $150,005 $154,505 $159,140 $163,914 $168,832 $173,897 $179,114 NET PRESENT VALUE OF LEASE: LESS: Build-out Cost: NET LEASE VALUE: $0 $24,210 $24,936 $25,684 $26,455 $27,249 $28,066 $28,908 $29,775 $30,669 $31,589 $32,536 $33,512 $34,518 $35,553 $36,620 $37,718 $38,850 $40,015 $41,216 $42,452 $43,726 $45,038 $46,389 $47,781 $49,214 $50,690 $52,211 $53,777 $55,391 $57,052 $58,764 $60,527 $62,343 $64,213 $66,139 $68,124 $70,167 $60,000 $37,590 $38,718 $39,879 $41,076 $42,308 $43,577 $44,884 $46,231 $47,618 $49,046 $50,518 $52,033 $53,594 $55,202 $56,858 $58,564 $60,321 $62,131 $63,994 $65,914 $67,892 $69,928 $72,026 $74,187 $76,413 $78,705 $81,066 $83,498 $86,003 $88,583 $91,241 $93,978 $96,797 $99,701 $102,692 $105,773 $108,946 $681,663.03 -$60.000.00 $621,663.03 . Rental Value and CAM Charges are escalated at a rate of 3% annually. .. Lease commenced in June 1997 for a term of 40 years. This analysis is based on the remaining 38 year term of the lease Le. June 1999-2037. clchrist/701 lease , . LEASE AGREEMENT LEASE AGREEMENT Florida Florida, following This Lease is made by and between 711 Deco, Inc., a corporation ("Landlord"), and the City of Miami Beach, a Florida municipal corporation ("Tenant"), on the terms and conditions: 1. Definitions. The terms provided herein shall be defined for purposes of this Lease as follows: 1.1. Building" means the building located at 701-725 5th Street, Miami Beach, Florida 33139, more particularly identified according to its legal description as: Lots 7 and 10; and Lots 8 and 9, less the South 10' of Lots 8 and 9, Block 57 Ocean Beach Addition #3, according to the plat thereof recorded in Plat Book 2, Page 81 of the Public Records of Dade County, Florida. The Building includes all land, interests appurtenant thereto. improvements, rights and 1.2. "Insurance" means the casual ty and cormnercial general liability insurance coverage maintained by Landlord to protect the Building as provided in Section 30 herein. 1.3. "Lease Term" means the period beginning with the Effective Date and terminating on a date forty years after the Effective Date. 1.4. "Lease Year" means the consecutive twelve calendar month period cormnencing on the Effective Date and each consecutive twelve calendar month periods thereafter during the Lease Term. 1.5. "Operating Costs" means the costs of maintaining the Building (excluding costs related to the residential portion of the Building), including but not limited to landscaping, repairs, line painting, paving and resurfacing, lighting, maintenance of heating and air conditioning systems serving the Building, electricity, sewer and water not separately metered and paid by individual tenants, insurance, sign maintenance, sanitary control, removal of trash, rubbish, garbage and other refuse, cost of security if any is provided, reasonable sums as operating reserves, depreciation on machinery and equipment used in maintenance, janitorial services, service and maintenance agreements for the Building, attorneys' fees, the cost of personnel, and a reasonable management fee. It is the intent of the parties that this Lease be a "triple net" lease (cormnencing with the fourth Lease Year) and, accordingly, the definition of "Operating Costs" is to be given its broadest reasonable interpretation. 1.6. "Sales Tax" means all Florida state, county, and/or municipal sales, use, or similar taxes, and all local option surtaxes assessed upon or in relation to Rent and all other considerations due and payable to Landlord by Tenant or any other person actually occupying, using, or entitled to use the Premises at the tax rates in effect from time to time during the Lease Term. 1.7. "Taxes" means the annual real property ad valorem taxes, special assessments, or similar governmental charges assessed upon the Building. 1.8. "Tenant's Percentage Share" means Tenant's percentage allocated share of Operating Costs, Taxes, and Insurance paid by Landlord for the Building which are chargeable to Tenant on a proportionate basis in accordance with this Lease. For all purposes of this Lease, Tenantl~p centage Share is 26%. ~,oOO 2. Lease of Premises. Landlo does hereby lease to Tenant the Premises described on Exhibit A (the "Premises"), known as 731 5th Street, Miam Beach, Florida. The Premises constitutes approximately, rentable square feet of floor space. Landlord has made no representations as to the actual square footage and Tenant hereby acknowledges that it has inspected the Premises and agrees that the Base Rent under this Lease is not based on the actual square footage of the Premises and will not be adjusted based on any measurements. 3. Term. This Lease shall be and remain in effect for the entire period of the Lease Term unless sooner terminated as provided herein. Notwithstanding anything to the contrary conJained herein, from and after the expiration of the third (3 r) Lease Year, Tenant shall have the right, for any reason and/or for no reason, and in Tenant's sole and absolute discretion, to terminate this Lease, provided that Tenant delivers to Landlord at least ninety (90) days prior written notice of such termination. 4. Rent. 4.1. Base Rent. Beginning with the Effective Date, Tenant shall pay to Landlord base rent ("Base Rent") in the amount of one dollar ($1.00) per year for each year during the Lease Term. h 4.2. Operating Costs and Taxes. Commencing on the fourth (4t ) Lease Year, Tenant shall, in addition to the Base Rent, pay to Landlord Tenant's Percentage Share of the Operating Costs and Taxes in monthly installments on the first (1st) day of each month during the Lease Term, in such amounts as are, from time to time, estimated by Landlord for each Lease Year beginning at the -2- commencement of the fourth Lease Year. Estimates shall be revised from time to time on the basis of the actual Operating Costs and Taxes for the preceding year. Should the Operating Costs and Taxes be underestimated, Tenant shall pay any deficiency promptly following written notice from Landlord and if Landlord shall overestimate the actual Operating Costs and Taxes for the preceding year, the overage shall be credited against the next due monthly payments of Tenant's Percentage Share pursuant to this Section 4.2. 4.3. Sales Tax. Tenant shall pay all applicable Sales Tax, if any, as may be due with respect to all payments of Base Rent, Tenant's Percentage Share of Operating Costs and Taxes and other charges due from Tenant under this Lease. To the extent that Tenant is exempt under applicable law from the obligation to pay Sales Tax, Tenant shall provide Landlord with Tenant's tax exempt identification number or similar evidence of such exemption, whereupon Tenant shall not be obligated to pay any applicable sales tax. 4.4. Rent. Base Rent, charges for Operating Costs and Taxes, for each Lease Year or portion thereof, and other charges as otherwise provided herein, plus all Sales Tax applicable thereto from time to time, are hereinafter referred to as "Rent." 5. Payment. 5.1. Delivery. Base Rent shall be payable in advance in annual installments with the first installment, including Sales Tax, being due upon Tenant's execution of this Lease, and thereafter each installment shall be due on the first day of each consecutive Lease Year during the Lease Term. Tenant's Percentage Share of Operating Costs and Taxes, including Sales Tax, shall be payable monthly as provided in Section 4.2 above. Rent payments shall be by check made payable to 1th &. SUi Dt=L:O 8e:r:p., and, unless instructed otherwise by Landlord, delivered to: /) 7th &- ~th Deco Corp. -=1111)(:(0 lnc. & Gne South ['ointe Drive '-i\\ WCtSh\l'lrrK::::n AV0IVL Miami Beach, Florida 33139 ,J' . - ~\ 5.2. Delinquency. The Rent is delinquent if not received by Landlord on the date when due as specified above. If such Rent is not received by Landlord by the fifth day after the due date, in addition to all other rights and remedies that Landlord may exercise, Landlord may further assess Tenant a late charge of 5% of the Rent per month for each month or part thereof until such Rent is paid. ///1/ ~ -:r~ ITXW Ille. 6. Security Deposit. There is no Security Deposit required under this Lease and any reference to same hereinafter provided shall be deemed deleted. -3- 7. Acceptance of Premises II As Is II . Tenant has inspected the Premises before executing this Lease and Tenant's execution of this Lease shall constitute unconditional agreement that the Premises are accepted in their liAs IslI condition and that Landlord has made no representation or warranty to Tenant as to the condition of the Premises. 8. Use and Care. 8.1. Use. The Premises shall be occupied and used by Tenant solely for public meeting space and/or municipal offices. Tenant shall not use or permit the use of the Premises for any purpose, except as permitted herein, without the prior written consent of Landlord which consent may be withheld in Landlord's sole discretion. 8.2. Operating Standards. Tenant shall operate its business in a dignified manner and in accordance with high standards of operation. Tenant will (i) replace promptly at its own expense with glass of like kind and quality any plate or window glass which is cracked or broken; (ii) replace doors or door hardware of the Premises which may for any reason become cracked or broken; (iii) maintain the Premises in a clean, orderly and sanitary condition and free of insects, rodents, vermin, and other pests; (iv) not permit undue accumulation of garbage, trash, rubbish or other refuse in the Premises; and (v) keep such refuse in proper containers at the Premises until normal pickup. 8.3. Applicable Law. At all times, Tenant shall fully and promptly comply with all laws, local ordinances, orders and regulations of any lawful authority having jurisdiction over the Premises, including without limitation, those relating to the environment, cleanliness, safety, occupation, and use of the Premises. 8.4. Environmental. Tenant shall not cause or permit any Hazardous Material to be brought upon, kept or used in or about the Premises or the Building by Tenant, its agents, employees, contractors or invitees, without the prior written consent of Landlord, which consent may be withheld in Landlord's sole discretion. If Tenant breaches the obligations stated in the preceding sentence, or if the presence of Hazardous Material on the Premises or at the Building caused or permitted by Tenant results in contamination of the Premises or the Building, or if contamination of the Premises or the Building by Hazardous Material otherwise occurs for which Tenant is legally liable to Landlord for damage resulting therefrom, then Tenant shall indemnify, defend and hold Landlord harmless from any and all claims, judgments, damages, penalties, fines, costs, liabilities or losses (including, without limitation, diminution in value of the Premises or the Building, damages for the loss or restriction on use of rentable or usable space or of any amenity of the Premises or the Building, damages arising from any adverse impact -4- on marketing of space, and sums paid in settlement of claims, attorneys' fees, consultant fees and expert fees) which arise during or after the Lease Term as a result of such contamination. This indemnification of Landlord by Tenant includes, without limitation, costs incurred in connection with any investigation of site conditions or any clean-up, remedial, removal or restoration work required by any federal, state or local governmental agency or political subdivision because of Hazardous Material present in the soil or ground water on or under the Premises. Without limiting the foregoing, if the presence of any Hazardous Material on the Premises or at the Building caused or permitted by Tenant results in any contamination of the Premises or the Building, Tenant shall promptly take all actions at its sole expense as are necessary to return the Premises and the Building to the condition existing prior to the introduction of any such Hazardous Material to the Premises or the Building i provided that Landlord's approval of such actions shall first be obtained, which approval shall not be unreasonably withheld so long as such actions would not potentially have any material adverse long-term or short-term effect on the Premises or the Building. Landlord shall have the right at all reasonable times to inspect the Premises and to conduct tests and investigations to determine whether Tenant is in compliance with this Section of the Lease, the costs of all such inspections, tests and investigations to be borne by Tenant. Tenant's obligations pursuant to the indemnity contained in this Section shall survive the termination of the Lease. As used herein, the term "Hazardous Material" means any hazardous or toxic substance, material or waste which is or becomes regulated by any local governmental authority, the State of Florida or the United States Government. 9. Abandonment. In the event that at any time during the Lease Term, Tenant abandons the Premises, Tenant shall be in default hereunder, and Landlord may exercise any and all of its rights and remedies hereunder on account of a Tenant default. 10. Hold Over. If Tenant remains in possession of the Premises after the termination of this Lease and without the execution of a new lease, Tenant shall be deemed to be occupying the Premises as a tenant at sufferance at a rent equal to double the then "fair market rentable value" of the Premises as such fair market rentable value is reasonably determined by Landlord based upon comparable rentals in the Building at such time for other ground floor space. 11. Parkinq. Tenant acknowledges that there is limited on-site parking facilities located at the Building which are allocated among the tenants. Tenant shall have three (3) spaces marked for its use at the Building. Notwithstanding this allocation, Landlord assumes no responsibility for enforcing the use of the allocated or unallocated parking spaces. Tenant shall be responsible to pay Landlord for the use of said spaces, in -5- addition to Base Rent, at the standard building parking rates in effect from time to time. 12. Signs. Tenant will not place or permit to be placed or maintained on any exterior door, wall or window of the Premises any sign, awning or canopy, or advertising matter or other thing of any kind, and will not place or maintain any decoration, letter or advertising matter on the glass of any window or door, nor will any illuminated sign be placed in the window display area of the Premises without first obtaining Landlord's consent, which consent may be withheld in Landlord's sole discretion. Tenant shall at all times keep all signs in good condition and proper operating order in accordance with all applicable government regulations. No signs or other equipment shall be erected on the roof of the Building. 13. Repair and Maintenance. Landlord agrees to repair and maintain in good order and condition, ordinary wear and tear excepted, the roof, roof drains, outside walls, foundations and structural portions (both interior and exterior) and the air conditioning and heating systems of the Building. Notwithstanding the preceding covenant, however, Tenant shall be responsible for; (i) repair of damage caused by Tenant, its employees, agents, contractors, customers, licensees or invitees; (ii) interior repainting and redecoration; and (iii) compliance with the operating standards set forth in Section 8.2. Landlord shall not be liable for any damages caused by or growing out of any breakage, leakage, or defective condition of the electric wiring, air conditioning or heating pipes and equipment, water, closets, plumbing, appliances, other equipment, or facilities serving the Premises. Neither Landlord nor Landlord's agents or servants shall be liable for any damage caused by or growing out of any defect, latent or patent, in the Premises. In no event shall Landlord be liable for damages or injuries arising from failure to make repairs, nor shall Landlord be liable for damages or injuries arising from defective workmanship or materials in making any such repairs. Landlord shall have no obligation to repair until a reasonable time after the receipt by Landlord of written notice from Tenant of the need for repairs. Tenant waives the provision of any law, or any right Tenant may have under common law, permitting Tenant to make repairs at Landlord's expense. The costs of such repair or maintenance obligations of Landlord shall be included in and constitute "Operating Costs". 14. Tenant Alterations. 14.1. Conforming Alterations. Tenant shall not make any al terations to the Premises which require the issuance of a building permit ("Alterations") without the prior written consent of Landlord, which consent may be withheld in Landlord's sole discretion. Tenant shall obtain, and provide copies to Landlord of, all appropriate governmental permits and approvals at Tenant's expense prior to the beginning of the work on the Alterations. Tenant shall prepare and submit to Landlord for -6- approval three complete sets of plans, drawings and specifications, in sufficient detail required to obtain a building permit, covering the Alterations ("Plans"). If Landlord or Landlord's architect notifies Tenant of any objections to the Plans, Tenant shall make the necessary revisions to Landlord IS reasonable satisfaction and promptly resubmit the Plans after such notice. Tenant shall give Landlord notice of any items to be removed from the Premises as a result of the Alterations. If Landlord does not wish to take possession of such items, Tenant shall remove the items at its sole cost and expense. 14.2. Removal. Upon termination of this Lease for any reason, all fixtures and built-in equipment used in the Premises, supplied and installed at the sole cost and expense of Tenant, shall be the property of Landlord. During the Lease Term, such property shall be subject to Landlord's lien rights and remedies provided by law. 15. Loss of Property. Landlord shall not be liable for any loss of any property of Tenant from the Premises or for any damages to any property of Tenant brought onto the Premises. Landlord, without liability to Tenant, shall have the right and may at any time close the Premises whenever the same may become necessary in compliance with any law, order, regulation or direction of any lawful authority or the agents, officers or representatives thereof, or in the event of any public disturbance or like circumstance which, in the judgment of Landlord, may appear proper or advisable. 16. Access to Premises. During normal business hours, Landlord, its agents and representatives, may enter the Premises for the purposes of inspection, making emergency repairs, replacements, alterations or additions to the Premises, or to exhibit the Premises to prospective tenants, purchasers or other persons. 17. Utilities. Tenant shall procure for its own account and shall pay the cost of all charges for electricity, water, sewer, telephone, gas (if applicable) and any other items of utilities consumed on or at the Premises. In the event it becomes necessary for Landlord to pay any of the costs of such utilities, then any such amount is hereby agreed and declared to be Rent and shall be due and payable on the first day of the following month. Landlord shall not be liable in the event of any interruption in the supply of any utilities. Tenant agrees that it will not install any equipment which will exceed or overload the capacity of any utility facilities serving the Premises and that if any equipment installed by Tenant shall require additional utility facilities, the same shall be installed at Tenant's expense in accordance with plans and specifications approved in advance in writing by Landlord. 18. Destruction. In the event the Premises or the Building are partially or totally destroyed by fire, flood or -7- other casualty through no fault of Tenant, provisions shall apply: the following 18.1. Destruction of Premises. In the event that the Premises are destroyed fully or partially by such casualty, Landlord shall cause the Premises to be restored to the prior existing condition provided that the same can be reasonably accomplished as determined by Landlord within 180 days. Due allowance shall be made for a reasonable time necessary for Landlord to adjust the loss with the insurance companies insuring the Premises at the time of-the casualty, and due allowance is to be made for delay occasioned by strikes, lock-outs, permitting and other conditions beyond the control of Landlord. In the event the Premises cannot be reasonably repaired and restored within 180 days, then Landlord shall have the option, at Landlord's sole discretion, to either rebuild the Premises (provided that the same shall be completed in any event within one (1) year following the casualty, subject to acts of God or other causes beyond Landlord's reasonable control) or Landlord, at its sole option, may relocate the Tenant to different space within the Redevelopment Area (being the area south of 6th Street in the City of Miami Beach) in accordance with the terms of Section 38.11 of this Lease upon notice to Tenant. Tenant shall have no right to possession of the Premises during the period Landlord is making the repairs nor shall Tenant have any right to any proceeds of Landlord's casualty insurance. 18.2. Destruction of the Buildinq. In the event that 50% or more of the rentable square feet of the Building is destroyed by such casualty, Landlord may, at its option, elect to relocate Tenant within the "Redevelopment Area" (being the area south of 6th Street in the City of Miami Beach) in accordance with the terms of Section 38.11 of this Lease within 180 days after such event. 18.3. Rent Abatement. Should the Premises, or portion thereof, be rendered untenantable by reason of damage or destruction thereof by fire, wind, flood, or other casualty not caused by or the responsibility of Tenant, the Rent shall abate in proportion to the areas of the Premises rendered untenantable from the date of such event up to the date of the restoration of the Premises, or termination of this Lease at Landlord's option. Landlord, its agents, servants and employees and contractors shall have the right to enter upon the Premises and remain thereon for the purpose of restoring the Premises. 19. Condemnation. If the Premises, or any part thereof, shall be appropriated and taken for any public use by virtue of eminent domain or condemnation proceedings, or if by reason of any law or ordinance the use of the Premises for the purposes provided for in this Lease shall be unlawful, Landlord shall have the right to terminate this Lease upon 30 days written notice to Tenant, and the Rent shall be paid only through the date that Tenant surrenders possession of the Premises. Any Rent paid in -8- advance beyond such date shall be returned by Landlord to Tenant. Landlord shall have the right to all proceeds received as a result of such eminent domain or condemnation proceedings; provided that Tenant shall be entitled to seek such separate award as may be designated for Tenant's loss of this leasehold provided further that Tenant's award does not reduce the damages payable to Landlord. A sale by Landlord to any authority having the power of eminent domain, either under threat of condemnation or while condemnation proceedings are pending, shall be deemed a taking under the power of eminent domain for all purposes under this Section. 20. Assignment and Sublet. Tenant shall not, directly or indirectly, (i) sublet the Premises or permit the use of the same or any part thereof by anyone other than Tenant or (ii) assign or in any other manner transfer this Lease or any estate, interest or benefit therein, without the prior written consent of Landlord which consent may be withheld in Landlord's sole discretion. 21. Default. The happening of anyone or more of the following events shall constitute a default under this Lease on the part of Tenant: 21.1. Tenant fails to pay the Base Rent by the fifth day of the Lease Year in question or any other Rent as required under this Lease when due, or any cost, expense, or tax due in addition thereto. 21.2. Tenant fails to fully and promptly perform any act required of it hereunder or to otherwise comply with any term or provision hereof. 21.3. The filing by or on behalf of Tenant of any voluntary petition or pleading to declare Tenant a bankrupt, the filing of any involuntary petition to declare Tenant bankrupt if not discharged within 60 days thereof, or the adjudication in bankruptcy of Tenant under any bankruptcy law or act. 21.4. The appointment by any court or under any law of a receiver, trustee, or other custodian of the property, assets or business of Tenant. The assignment by Tenant of all or any part of its property or assets for the benefit of its creditors. The levy of execution, attachment or other taking of property, assets or the leasehold interest of Tenant by process of law or otherwise in satisfaction of any judgement, debt or claim. 22. Remedies of Landlord. In the event of a default by Tenant, Landlord, at Landlord's option, may elect to do one or more of the following: 22.1. Terminate this Lease and re-enter the Premises and remove all persons and property from the Premises, either by -9- summary proceedings or by any other suitable action or proceeding at law, or otherwise; or 22.2. Seek any other remedy available at law or equity. 22.3. If Landlord elects to terminate this Lease: (1) Landlord shall give notice of such termination, which shall take effect three days after such notice is given, or such greater number of days as is set forth in such notice, fully and completely as if the effective date of such termination were the date originally set forth in this Lease for the expiration of the Lease Term; (2) Tenant shall quit and peacefully surrender the Premises to Landlord, without any payment by Landlord for doing so, on or before the effective date of termination; and (3) All Rent, including accelerated Rent, shall become due and shall be paid up to the effective date of termination, together with such expenses, including attorneys I fees, as Landlord shall incur in connection with such termination. 22.4. No receipts of monies by Landlord from Tenant after termination of this Lease shall reinstate, continue, or extend the Lease Term, affect any notice previously given by Landlord to Tenant, or operate as a waiver of the right of Landlord to enforce the payment of Rent. 22.5. If Landlord shall terminate this Lease, shall be entitled to apply any sums then held by pursuant to any of the provisions of this Lease. Landlord Landlord 22.6. In the event of any re-entry and/or dispossession by summary proceedings or otherwise without termination of this Lease: (1) All Rent shall become due and shall be paid up to the time of such re-entry and/or dispossession, together with such expenses, including attorneys' fees, as Landlord shall incur in connection with such re-entry and/or dispossession by summary proceedings or otherwise; (2) All Rent for the remainder of the Lease Term may be accelerated and due in full; and (3) Landlord may relet all or any part of the Premises, either in the name of Landlord or otherwise, for a term or terms which may, at Landlord's option, be equal to, less than, or greater than the period which would otherwise have constituted the balance of the Lease Term. In connection with such reletting: -10- (4) Tenant or Tenant's representative shall pay, as additional Rent, to Landlord, as they are incurred by Landlord, such reasonable expenses as Landlord may incur in connection with reletting, including, without limitation, legal expenses, attorneys' fees, brokerage conunissions, and expenses incurred in altering, repairing, and putting the Premises in good order and condition and in preparing the Premises for reletting; (5) Tenant or Tenant's representative shall pay to Landlord, in monthly installments on the due dates for Rent payments for each month of the balance of the Lease Term, the amount by which any Rent payment exceeds the net amount, if any, of the rents for such period collected on account of the reletting of the Premises; any suit brought to collect such amount for any month or months shall not prejudice in any way the rights of Landlord to collect the deficiency for any subsequent month or months by a similar action or proceeding; (6) At Landlord's option exercised at any time, Landlord shall be entitled to recover inunediately from Tenant, in addition to any other proper claims, but in lieu of and not in addi tion to any amount which would thereafter become payable under the preceding subsection, a sum equal to the amount by which (a) the sum of the Rent for the balance of the Lease Term, discounted at a reasonable rate selected by Landlord to its then- present worth, exceeds (b) the net rental value of the Premises, discounted at the same rate to its then-present worth, for the balance of the Lease Term. In determining such net rental value of the Premises, the rent realized by any reletting of the Premises, if such reletting is upon terms (other than rental amounts) generally comparable to the terms of this Lease, shall be deemed to be such net rental value; and (7) At Landlord's option, Landlord may make such alterations and decorations in or upon the Premises as Landlord, in Landlord's sole judgment, considers advisable and necessary for the purpose of reletting the Premises; the making of such alterations and decorations shall not operate or be construed to release Tenant from liability under this Section; the cost of all such alterations and decorations shall be paid by Tenant to Landlord as additional Rent~ (8) Landlord shall have, receive, and enjoy as Landlord's sole and absolute property, any and all sums collected by Landlord as rent or otherwise upon reletting the Premises after Landlord shall resume possession of the Premises as provided by this Lease, including, without limitation, any amounts by which the sum or sums so collected shall exceed the continuing liability of Tenant under this Lease. If Landlord shall have accelerated Rent payments and collected same from Tenant, and subsequently shall have relet the Premises, then Landlord, after deducting all costs related to reletting, including, but not limited to, those described or anticipated in this Section, shall pay to Tenant the amount remaining which is -11- collected as Rent for each month, to the extent Landlord shall have previously received the Rent for such month from Tenant. (9) Landlord and Tenant agree that after the cormnencement of suit for possession of the Premises or after final order or judgment for the possession of the Premises, Landlord may demand, receive, and collect any monies due or coming due without in any manner affecting such suit, order, or judgment. All such monies collected shall be deemed to be payments on account of the use and occupation of the Premises, or, at the election of Landlord, on account of Tenant's liability under this Lease. (10) The words "re-enter" and "re-entry", as used in this Section, are not and shall not be restricted to their technical legal meaning, but are used in the broadest sense. (11) Tenant waives all rights of redemption which may otherwise be provided by any legal requirement in the event that Landlord shall, because of the occurrence of a default by Tenant, obtain possession of the Premises under legal proceedings, or pursuant to present or future law or to the terms and conditions of this Lease. (12) Landlord, in addition to other rights and remedies it may have, shall have the right to (a) keep in place and use all of the furniture, fixtures, and equipment in the Premises, including that which is owned by or leased to Tenant, and (b) to remove all or any part of Tenant's property from the Premises and any property removed may be stored in any public warehouse or elsewhere at the cost of and for the account of Tenant. Landlord shall not be responsible for the care or safekeeping of such property, whether in transport, storage or otherwise. Tenant waives any and all claim against Landlord for loss, destruction. damage or injury which may be occasioned by any of the aforesaid acts. Tenant shall be liable to Landlord for costs incurred by Landlord in connection with any storage, transport or other acts anticipated in this Section and shall hold harmless and indemnify Landlord from all loss, damage, cost, expense and liability in connection therewith. Landlord shall also have the right to relinquish possession of all or any portion of such furniture, fixtures, equipment and other property to any person ("Claimant") claiming to be entitled to possession thereof who presents to Landlord a copy of any instrument represented to Landlord by Claimant to have been executed by Tenant (or any predecessor of Tenant) granting Claimant the right under various circumstances to take possession of such furniture, fixtures, equipment or other property, without the necessity on the part of Landlord to inquire into the authenticity of instrument's copy of Tenant's or Tenant's predecessor's signature thereon and without the necessity of Landlord making any nature of investigation or inquiry as to the validity of the factual or legal basis upon which Claimant purports to act i and Tenant agrees to indemnify and hold Landlord harmless form all cost, -12- expense, loss, damage and liability incident to Landlord's relinquishment of possession of all or any portion of such furniture, fixtures, equipment or other property to Claimant. No re-entry or taking possession of the Premises by Landlord shall be construed as an election on Landlord's part to terminate this Lease unless a written notice of such intention is given to Tenant. Notwithstanding any such re-letting without termination, Landlord may at all times thereafter elect to terminate this Lease for such previous default. Any such re-entry shall be allowed by Tenant without hindrance, and Landlord shall not be liable in damages for any such re-entry, or guilty of trespass or forcible entry. (13) Landlord shall be entitled, without notice or bond, to the issuance of pre-judgment writs of replevin, pre- judgment distress writs, attachment writs, break open orders, orders authorizing the locking of the Premises to protect Landlord's lien on personal property, fixtures and equipment, and such other orders as may be issued by a court of law or equity. Landlord shall have the right to take possession as allowed under Florida law. The remedies described herein are cumulative and in addition to and without waiver of all remedies allowed Landlord by this Lease or by case law, common law and statute now or hereinafter in effect. Tenant agrees that the rights and remedies granted Landlord are commercially reasonable. 23. Cure of Tenant's Breach. If Tenant breaches any covenant or condition of this Lease, Landlord may, on reasonable notice to Tenant (except that no notice need be given in case of emergency), cure such breach at the expense of Tenant and the reasonable amount of all expenses, including attorneys' fees, incurred by Landlord in doing so (whether paid by Landlord or not) shall be deemed Rent payable on demand. 24. Mechanics' Liens. In accordance with the applicable provisions of the Florida Construction Lien Law, Florida Statutes 3713.10, no interest of Landlord whether personally or in the Premises shall be subject to liens for the Alterations or other improvements made by Tenant or caused to be made by Tenant under this Lease. Further, Tenant acknowledges that Tenant, with respect to the Alterations or other improvements made or caused to be made by Tenant under this Lease, shall promptly notify the contractor making such improvements to the Premises of this provision exculpating Landlord's liability for such liens. In the event that a claim of lien is filed against the Premises in connection with any work performed by or on behalf of Tenant, Tenant shall satisfy such claim within ten days from the date of filing. In the event that Tenant fails to satisfy such claim within such ten day period, Landlord may thereafter charge Tenant, as additional Rent, all costs incurred by Landlord in connection with the satisfaction of such claim, including attorneys' fees. Further, Tenant agrees to indemnify, defend and save Landlord harmless from and against any damage or loss incurred by Landlord as a result of any such claim of lien. -13- 25. Tenant Estoppel. Tenant shall from time to time, upon not less than five business days prior written notice given by Landlord, execute, acknowledge and deliver to Landlord a written statement certifying to such matters as Landlord may reasonably request, including that this Lease is unmodified and in full force and effect (or that the same is in full force and effect as modified, listing the instruments of modification), the dates to which the Rent and other charges have been paid, and whether or not, to the best of Tenant's knowledge, Landlord is in default, it being intended that any such statement delivered pursuant to this Section may be relied upon by a prospective purchaser of Landlord's interest, mortgagees of Landlord's interest, or assignee of any mortgage upon Landlord's interest in the Premises. 26. Relation of the Parties. The execution of this Lease or the performance of any act pursuant to the provisions thereof shall not be deemed or construed to have the effect of creating between Landlord and Tenant, the relationship of principal or agent or of partnership or of joint venture, and the relationship between them shall be that only of Landlord and Tenant. 27. Acts of God. Notwithstanding any other provision herein to the contrary, provided such cause is not due to the willful act or neglect of Landlord, Landlord shall not be deemed in default with respect to the performance of any of the terms, covenants and conditions of this Lease if the same should be due to any strike, lock-out, civil commotion, war-like operation, invasion, rebellion, hostilities, military or usurped power, sabotage, governmental regulations or controls, inability to obtain any materials, service or financing, through act of God or other cause beyond the control of Landlord. 28. Improvements. Notwithstanding any other provision herein to the contrary, Landlord shall not be responsible nor liable for any loss or damage to Tenants improvements and betterments to Premises. Further, Tenant shall not be entitled to any credit or diminution of the Rent herein reserved for any improvements made by Tenant. 29. Tenant Indemnity. Tenant shall to the fullest extent permitted by law indemnify and hold Landlord harmless from and against all claims, demands, and judgments for loss, damage or injury to property or person resulting or accruing by reason of the use and occupancy of the Premises. 30. Landlord Insurance. Landlord shall keep the Building insured against casualty damage caused by fire, flood, or wind, to the extent of 100% of replacement cost, excluding foundations. Tenant shall be liable for and pay, as Rent, Tenant's Percentage Share of the cost of the Insurance carried by Landlord related to the commercial space at the Building as -14- provided above. monthly payment time, estimated Term. Tenant shall pay for such Insurance along with of Rent in such amounts as are, from time to by Landlord for each Lease Year during the Lease 31. Waiver of Subrogation. All insurance carried by Landlord or Tenant covering losses arising out of destruction of or damage to the Building, the Premises, or their contents shall, to the extent reasonably obtainable without additional premium, provide for waiver of subrogation against Landlord, Tenant, and other tenants in the Building on the part of the insurance carrier. Should an additional premium be charged, the party benefiting from such waiver shall reimburse the party obtaining such waiver for the cost of such additional premium failing which there shall be no obligation to obtain the waiver of subrogation otherwise required hereunder. Evidence of the existence of such waiver will be furnished by either party to the other party on request. 32. Insurance Rate Adjustment. If, as the result of any act or neglect of Tenant, its invi tees, agents, employees, or representatives, or the nature of the business conducted in or at the Premises by Tenant, any insurance premium paid for by Landlord upon the Building shall be increased over the premium existing as of the date hereof, Tenant shall pay Landlord, as Rent, the increase in the premium of such insurance. 33. Ad Valorem Taxes. 33.1. Personal Property Tax. Tenant shall be liable for and shall pay all applicable taxes levied against its intangible and tangible personal property, including equipment, furniture, and fixtures. If such taxes for which Tenant is liable hereunder are levied against Landlord or the Building, and if Landlord elects to pay the same or if the assessed value of the Building is increased by inclusion of any such items and Landlord elects to pay such taxes based on such increase, Tenant shall pay Landlord, as Rent, upon demand that part of such taxes for which Tenant is liable hereunder. 33.2. Real Estate Tax. Tenant shall be liable for and shall pay, as Rent, Tenant's Percentage Share of the Taxes levied against the commercial space at the Building for each Lease Year during the Lease Term as provided above. In the event the last Lease Year is not a calendar year, Tenant's proportionate share of such Taxes shall be prorated. 33.3. Payment Procedures. Landlord shall estimate the Taxes provided in Section 33.2 for each year, and Tenant shall pay the same as Rent. After the actual amount of the Taxes or other charges is confirmed, a final computation will be made and delivered to Tenant. Tenant shall have 30 days to pay the balance, if any, of the actual amount. Landlord is not obligated to challenge any actual or proposed Taxes or other charges. -15- However, in the event that Landlord chooses to do so, Tenant shall pay Tenant's Percentage Share of such actual amount once a final determination is made together with the reasonable fees and costs (including the fees and costs of attorneys, accountants, appraisers and other professionals) incurred by Landlord in connection with the challenge thereof. 34. Subordination. This Lease is subject and subordinate to any ground lease, mortgage, deed of trust, or any other hypothecation for security which may now or hereafter encumber or affect the real property on which the Building located, and to any and all advances made on the security thereof, and to all renewals, modifications, consolidations, replacements and extensions thereof. In confirmation of such subordination, Tenant shall promptly execute any certificate that Landlord may request. Tenant hereby constitutes and appoints Landlord as Tenant's attorney-in-fact to execute any such certificate or certificates for and on behalf of Tenant. At the option of Landlord, or any successor Landlord or the holder of any mortgage affecting the Building, Tenant agrees that neither the foreclosure of a mortgage affecting the Building nor the institution of any suit, action, surmnary or other proceeding against Landlord herein, or any successor Landlord, or any foreclosure proceeding brought by the holder of any such mortgage to recover possession of such property shall, by operation of law or otherwise, result in the cancellation or termination of this Lease or the applications of Tenant hereunder, and upon the request of any such Landlord, successor Landlord or the holder of such mortgage, Tenant covenants and agrees to execute an instrument in writing satisfactory to such Landlord, successor Landlord, or to the holder of such mortgage, or to the purchaser of the mortgaged premises in foreclosure, whereby Tenant attorns to such successor in interest. 35. Memorandum of Lease. If so requested by Landlord, Tenant shall execute a short form or memorandum of this Lease which may, in Landlord I s sole discretion, be recorded in the Public Records of Dade County, Florida, for the purpose of protecting Landlord I s estate from claims, including claims of lien, as provided in the Florida Statutes. Except as specifically provided above, this Lease shall not be recorded in such public records. 36. regard to by Tenant hereunder. Time of Essence. Time shall be of the essence with the payment of all Rent by Tenant, and the performance and Landlord of all of their respective obligations 37. Notices. Any notice, demand, request or other cormnunication required or permitted to be given under this Lease shall be in writing, signed by the party giving it and conclusively deemed to have been properly given to and received and to be effective (a) if sent by tested telex or cable, or -16- hand-delivered against receipt therefor, or by telecopy or other facsimile transmission, or by express mail service, on the day on which delivered, as the case may be, at the respective addresses set forth below, or if such day of delivery is not a business day, on the first business day thereafter, or (b) if sent by registered or certified mail, return receipt requested, postage prepaid, on the third day after the day on which deposited in any post office station or letter box, addressed at the respective addresses set forth below: As to Landlord: 711 Deco, Inc. 411 Washington Avenue Miami Beach, Florida 33139 Attn: Michael Kadosh Tel: 305 - 538 - 0398 t.J Fax: 3os-53'3'-Cj1-9 ( ~ I As to Tenant: City of Miami Beach, Florida 1700 Convention Center Drive Miami Beach, Florida 33139 Attn: City Manager Tel: (305) 673-7010 Fax: (305) 673 -7782 Any party hereto may, by giving written notice to the other party hereto, designate any other address in substitution of the foregoing address to which notice shall be given. 38. General Provisions. 38.1. Severability. If any provision of this Lease or the application thereof to any person or circumstances is held invalid, prohibited, or unenforceable for any reason, this Lease shall be ineffective only to such extent and the remaining provisions shall continue to be given full force and effect so far as possible. 38.2. No Waiver. The failure of a party to insist upon strict performance of any term, to claim any interest, or to exercise any power, right or option contained in this Lease, in anyone or more instances, shall not be construed to be or constitute in fact a waiver or relinquishment of that party's right to assert and enforce its rights regarding any such term, interest, right, power, or option in any future instance. 38.3. Entire Aqreement. This Lease, including all Exhibits referenced herein, represents the entire agreement of the parties and is intended as a complete and exclusive statement of the terms thereof. Any oral or written inducements, -17- representations, warranties, agreements or other communications made prior to the execution of this Lease shall be void and ineffective for all purposes. 38.4. Modification and Rescission. This Lease may be modified or rescinded only by a writing signed by the parties making specific reference hereto. 38.5. Governing Law. This Lease shall be construed and enforced in accordance with the laws of the State of Florida without regard to its conflicts or choice of laws. 38.6. Jurisdiction and Venue. In the event any disputes hereunder cannot be resolved amicably and litigation shall be commenced, Landlord and Tenant agree that venue and jurisdiction shall lie exclusively in the Circuit Court in and for Dade County, Florida. Each party hereby agrees to waive, to the fullest extent permitted by law, any defenses or challenges to such venue or personal or subject matter jurisdiction. 38.7. WAIVER OF TRIAL BY JURY. IT IS MUTUALLY AGREED BY AND BETWEEN LANDLORD AND TENANT THAT THE RESPECTIVE PARTIES HERETO SHALL AND THEY HEREBY DO WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BOUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER ON ANY MATTERS WHATEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, OR TENANT I S USE OR OCCUPANCY OF THE PREMISES. IN THE EVENT LANDLORD COMMENCES ANY PROCEEDING FOR POSSESSION OF THE PREMISES, TENANT WILL NOT FILE ANY COUNTERCLAIM OF WHATEVER NATURE OR DESCRIPTION IN ANY SUCH PROCEEDING. 38.8. Interpretation. Unless the context of this Lease indicates a contrary intent, words in the singular shall include the plural and vice-versa, and words in the masculine gender shall include the feminine or neuter genders as appropriate. Article headings are for convenience only and shall not in any way affect the interpretation of any provision of this Lease. 38.9. Radon Disclosure. The following disclosure is required to be furnished to Tenant under Florida law: "Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information.regarding radon and radon testing may be obtained from your county public health center." 38.10. Duplicate Originals. This Lease is fully executed by the parties in two original instruments, either of which may be introduced into evidence in any proceeding as conclusive proof of the text thereof. -18- 38.11. Relocation Rights. The Premises may be relocated within the Redevelopment Area (as defined above) from time to time during the Lease Term at the discretion of the Landlord upon at least sixty (60) days advance notice to the Tenant, provided that the cost of relocation and the replacement of any tenant improvements necessitated thereby (including any that need to be made to comply with applicable handicap requirements) shall be borne by the Landlord. The Premises shall always be located within a building equal to or better in quality than the Building as currently existing. IN WITNESS WHEREOF, this Lease has been executed and caused to be delivered in Dade County, Florida, to be effective in all respects as of June 20, 1997 (the "Effective Date") . WITNESSES: LANDLORD: 7tLC":~Af:::~ (fllj[jJliAl1l1 (0~ CJ111t~Q.JNt:lflC OU~N~6 WITNESSES: 711 Deco, Inc., A Florida corpo~ ~ / By: Name: . , . .( .. Title: ~"'/, ~ TENANT: _S\-e-\,e~ H~\z.... ~-P-~\O god.0jvt"2: City of Miami Beach, Florida, A Florida~iPal Corporation By: Name: ~~ d.'f) Ti tIe: M^II)c.rt... MIAMI/GORSONM/874939/$r3v031.DOC/9/17/97 APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION 11 /;tI~ City Attorney l::~!9~ -19- CITY OF MIAMI BEACH :ITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139 lttp:\\ci. miami-beach. fl. us COMMISSION MEMORANDUM NO. :::r:;rl- ~ 7 TO: Mayor Neisen O. Kasdin and Members of the City C DATE: March 17, 1999 FROM: Sergio Rodriguez City Manager SUBJECT: A RESOL ION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, AUTHORIZING THE MAYOR TO EXECUTE THE LEASE BETWEEN 711 DECO, INC. AND THE CITY OF MIAMI BEACH DATED JUNE 20,1997, AND DIRECTING THE CITY MANAGER TO IDENTIFY FUNDING OF APPROXIMATELY $60,000 FROM THE ULTIMATE USER DEPARTMENT, SEEKING SUBSEQUENT APPROPRIATION AUTHORIZATION, TO PAY THE CITY'S NET COST OF BUILDING OUT APPROXIMATELY 3,000 SQUARE FEET OF SPACE LEASED BY THE CITY AT 701-725 5TH STREET IN THE CITY OF MIAMI BEACH, FLORIDA; AND PROVIDING AN EFFECTIVE DATE. RECOMMENDATION: Adopt the Resolution. BACKGROUND: The City of Miami Beach entered into an agreement dated November 7,1995 (the "Development Agreement"), with West Side partners, Ltd., a Florida limited partnership ("West Side"), East Coastline Development Ltd., a Florida limited partnership, 404 Investments, Ltd., a Florida limited partnership, Azure Coast Development, Ltd., a Florida limited partnership, Beachwalk Development Corporation, a Florida corporation, Porto fino Real Estate Fund, Ltd., a Florida limited partnership, St. Tropez Real Estate Fund, Ltd., a Florida limited partnership, and Sun & Fun, Inc., a Florida corporation (collectively the "Portofino Entities") and the Miami Beach Redevelopment Agency (f1RDA"). The Development Agreement provided for approximately 3,000 square feet of space in the South Pointe Redevelopment Area to be leased to the City, to be utilized "solely for public meeting space and/or municipal offices." The lease effective date is June 20, 1997, and is for a term of 40 years at $1.00 per year, plus the proportionate share common area maintenance after the third lease year. The City has received a lease (a copy of which is attached hereto), for approximately 3,000 square feet of space at 701-725 5th Street in the City of Miami Beach (the "Premises"), that conforms to the terms set forth in the Development Agreement. AGENDA ITEM-B.Th DATE~ ANAL YSIS: Property Management has determined the lease area consists of 3, 156 square feet and will require a build-out of approximately $78,218 or $24.79/square foot. This includes a $20,000 contribution from West Side Partners evidenced in the letter dated October 15, 1998, signed by the parties to the 1998 Porto fino Settlement Agreement. The $20,000 contribution will be utilized to provide ADA accessible bathroom facilities and a HV AC to the premises. In addition, the lease provides for the City to pay CAM after the third lease year. The Landlord has advised that CAM is currently $8.04/square foot equating to annual cost of approximately $24,210 and will begin to accrue in June 2000. (See attached letter from 711 Deco, Inc.) The Administration has explored potential users for this facility and determined that there are restricted uses, as set forth in the lease. The lease restricts the use of the leased area to "solely for public meeting space and/or municipal offices." Therefore, not-for-profit or cultural institutions that the City is seeking to relocate are not eligible under the use limitations imposed by the lease. We have explored the potential to amend the eligible uses and the lessor is not willing to alter this provision of the Lease Agreement. Additionally, the site's use is restricted as a result of limited on- site parking; three spaces are provided. A. Potential Users of Space: Three municipal offices have been identified as potential users of the subject space: 1) Police and Fire Pension Office 2) Employee and Elected Officials Pension Office 3) Arts, Culture and Entertainment Police and Fire Pension Office: Police and Fire Pension Offices have been identified as potential future users of the space that could yield an annual cost savings to the City in excess of$30,000. The Police and Fire Pension Offices are currently leasing 2,500 square feet of space at $25/sq. ft. at 605 Lincoln Road, Suite 400, at an annual estimated lease cost of$58,000 including pro-rata pass through expenses. The Police and Fire Pension lease is for a term of ten years. However, the lease may be terminated at any time after five years, with a one-year notice, if the City relocates the offices to a City facility. The lease commenced in July 1996 and, therefore, the one-year notice to terminate cannot be issued prior to July 2001. The proposed relocation will result in annual cost savings in excess of$30,000 annually to the City (July 2002 and beyond), at which time the City is required to pay its proportionate share of CAM estimated at $24,2l0/annually. Pursuant to the Pension Plan, the City funds the administrative and operating costs of the Police and Fire Pension Board. Initial meetings with the Police and Fire Pension Board Administrator indicate that: (a) the Board would like to approve/disapprove the relocation, and (b) they have expressed concern regarding the limited parking and lack of security at the premises and in the area. If the Commission approves this proposed relocation alternative, the following course of action is recommended: . Meet with Police and Fire Pension and seek their concurrence to relocate as proposed. . Meet with Mera Rubell, the landlord, pursuant to the Police and Fire Pension's existing lease to explore earlier termination possibilities. Employee and Elected Officials Pension Office: The Employee and Elected Officials Pension Offices currently occupy approximately 460 square feet of space in City Hall on the third floor. It has been proposed to relocate this office to the storage area on the first floor of City Hall. Their space needs have increased to approximately 1,000 square feet and the Pension Board has voted to pay for the build-out of the storage area estimated at approximately $96,250, or $57/sq. ft. The remaining storage area will be built as common area meeting space. The possibility to relocate the Employee and Elected Officials Pension Office would need to be explored with the Pension Board as described above for the Police and Fire Pension Offices. Arts. Culture and Entertainment: A third alternate user may be the Arts, Culture and Entertainment (ACE) office currently located on the fourth floor of City Hall. ACE currently occupies 1,300 square feet. It has been proposed to relocate this office to 555 17th Street building or to Old City Hall. Furthermore, the Administration is desirous of co-locating ACE with the Cultural Arts Council staff, the Convention and Tourism Office and other culturally-oriented functions whose space needs and importance have outgrown their present location. The 5th Street location will give prominence and exposure to these important City functions. Limited Parkin2: As described above, the Landlord is providing three parking spaces on site. The City has also identified three on-street metered spaces that can be converted and restricted for City staff use. Additionally, there is a metered lot approximately one block away, adjacent to the 6th Street Community Center that could serve the parking needs of this site. B. Buyout Offer by Landlord: The City's alternative recourse relative to the proposed lease is to relinquish the City's lease rights in exchange for the $180,000 buyout price offered by the Landlord. Staff has prepared two scenarios (see attached) calculating the net present value (NPV) of the buyout offer vis- a-vis the value of the lease. The NPV is based upon the 40-year lease term, discounted at 8%, based upon the following market rental rate assumptions: Scenario 1 Scenario 2 . Assumed Beginning Rental Rate NPV Less: Net Build-out Cost to City Net Value $ 15/sq. ft. $ 411,151 $ 60.000 $ 351,151 $ 20/sq. ft. $ 681,663 $ 60.000 $ 621,663 Based on the aforementioned, it does not appear to be in the City's best interest to relinquish its lease rights based upon the significantly discounted buyout offer vis-a-vis the net value of the lease. While the City may never realize the true lease value based on market rates due to the use restrictions imposed in the lease and the limited on-site parking, the valuation scenarios of $15/sq. ft. and $20/sq. ft. are deemed fair in light of the current lease rates of $15.55 - $25.00/sq. ft. paid by the City's Parking Department and the Police and Fire Pension Office. FUNDING: It is recommended that the $80,000 total build-out cost be funded: $60,000 from the ultimate user department's budget and $20,000 from West Side Partners, as provided pursuant to the Portofino Settlement Agreement. Once the user department has been identified, legislation will be presented seeking authorization to appropriate funds to accomplish the build-out and to pay for future CAM charges. CONCLUSION: The Mayor and City Commission should adopt the Resolution. ~ SR/~h Attachment T:\AGENDA \ 1999\MARI799\REGULAR\L1BRARY. WPD