164-1999 LTC
"
CITY OF
MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
OFFICE OF THE CITY MANAGER
TELEPHONE: (305) 673-7010
FAX: (305) 673-7782
164-1999
L.T.C. No.
LETTER TO COMMISSION
DATE: July 26, 1999
TO: Mayor and Members
of the City Commissi n
SUBJECT: ROYAL P
FROM: Sergio Rodriguez
City Manager
Attached please find correspondence from Don Peebles requesting that his request for deferral of rent
payments be removed from Commission consideration. Separately, the City/Agency is also in
receipt of correspondence, attached hereto, notifying the City/Agency of default in connection with
RDP Royal Palm Hotel Limited Partnership's Development Agreement. The correspondence
specifically cites a default in connection with Section 6.4 of the Development Agreement which
states:
"The City shall make reasonable efforts to provide for expedited handling of all
review board hearings and/or permit requests made to it by Developer relating to the
Construction of the Proj ect."
The City Attorney's Office is reviewing this correspondence and preparing a response denying any
such claim of default.
Please be advised that all future communications with Don Peebles, in connection with this project,
should be directed through the City Attorney's Office. If you have any questions, please contact me.
SR/C~brar
F:\CMGRISALLIRARILTClROYP ALM.DEF
attachments
c: Murray Dubbin, City Attorney
Christina M. Cuervo, Assistant City Manager
Mathew Schwartz, Assistant City Manager
Janet Gavarrete, Assistant City Manager
Ronnie Singer, Assistant City Manager
Lawrence Levy, First Assistant City Attorney
Kent Bonde, Redevelopment Coordinator
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ROl) ROYAL PAl,;,\,{ HOTEL, LP
100 SE Second Stn:d, Suite 4650
Mlaml,fL 33131
Tel: 305-995-5330 Fax: 305-995-5340
July 20, 1999
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VIA (1'ACSTMILE 8f,J.TS MAll,
Ms. Christina Cuervo
Assistant City Managa
City of Miami Beach
1700 Convention Center Drive
Mi,uni Beach, FL 33139
Rc: Roved Palm Crnwlle Plaza Hotel
Dear Christina:
As you a.re aware, you and your tea.m have been working diligently with us since
Decemher, 1998 to negotia.te an agreement that woul(~ among other things, modify the
Le<lsc and provide for a deferral of a pOliion of the ground rent for the above-referenced
project.
Two weeks ago it appeared that we had reached a tentative agreement to conclude our
negotiations and the City auministmtiun submitted an outline ofthat agreement to tht::
City Comm.issionfhr its July 14, 1999 meeting. Fillal action on the approval was
deferred until the July 21, 1999 Commission meeting. As a result of the C0l11111is::ion's
decision to defer the matter, we have had a.n opportunity to discuss further the proposed
agreement with our lenders and counsel.
You will recall that one ofthe last issues to be resolved in our discussions related to
environmental damages incun'ed by us as a result of contaminated soil on the property.
The proposed agreement provided fi)r RDP Royal Palm Hotd, Limited P<lrtnership to
waive its rights to nearly $1,000,000 in Environmental Damages (as defined in th,:
Lease); l':nvironmt:.'lltal Damages that are expressly covered under the City's
inuemni fication as set fOlth in Section 35.3 of Ollr Lease. For your reference, T hav!::
enclosed a copy of this sedion (see subsections 35.3 (b) and (c)), ac; well as the section of
the Lease that defines "Environmenta! Damages". As you can see, there is no ambiguity
as lo the City's liability ill this marter.
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Page 2
Upon fhrther discussion with our contractors, consulLan1s and Holla.nd Knight, our legal
counsel, we are convinced that the City is fully liable lor these damages and we expect ta
be fully reimbursed by thc Agency. Thus, upon rcllection, it would bl:: imprudent ::or us
to proceed with further negotiations with the City that involves a waivcr of these ciaims.
Th(;re!ore, 1 must request thal Administration remove the praposcd agreement fron the
July 21, 1999 CODlmission meeting.
With regard 10 the environmt.iltal indemllity, our counsel will be communicating v'jth the
City directly in all effort to achieve a prompt resolution to this maUer and will be
submitting additional documentation confirming our damages relative to the second soil
contamination. T am disappointed that we have not yet belm able to reach a ll1utuaily
aeceptahle resolution of all issues pert.1.ining to the Royal Palm project.
I appreciate all o[your tiroe and elTort in advancing negotiations thus far, and loo~
10rward to continuing to work with you on thi!'i and other matters in tlJe future.
:;;~@)
R. Donahue Peebles
Managing Member
RDPlgj
cc: Simon Cruz, Commissioner, City of Miami Beach
David Demler, Commissioner, City of Miami Beach
Susan GoUlieb, Commissioner, City of Miami Beach
Nancy Liebman, Commissioner, City ofMiumi Beach
Martin Shapiro, Commissioner, City of Miami Beach
Jose SmitlJ, Commissioner, City of Miami Beach
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manufacture, processing, distribution, use, treatment, storage, disposhl, tr.lllSPOri or handling of
Hazardous Material:); and
(ii) all Requirements pertaining to the protection of th: health and safety of
employees or the public;
-
(c) "Environment" shall mean soil, surface waters, ground waters, land, stream
sediments, surface or subsurface strata and ambient air;
.i
(d) "Envirorunental Condition" shall mean any condition with re5pecuo the Premises,
whether or not yet discovered, which' could or does result in any Environmental Damages,
including any condition resulting from the operation of Tenant's business or the operation of the
business of any subtenant or occupant of the Premises or that of any otl':er property Owne:r or
operator in the vicinity of the Premises or any activity or operation formc:rly conducted by any
PerSOll on or off the Premises;
i
,
(e) "Environmental Damages" shall mean all claims, judgmenr::, damages (including
punitive damages), losses, penalties, fines, liabilities (including strict lial:.iIity), encumbranc:es,
liens, costs and expenses of investigation and defense of any claim, wtlerher or nor such is
ultimately defeated, and of any settlement or judgment, of whatever kind 01 nature, contingent or
otherwise, marured or unmatured, foreseeable or unforeseeable, any of wbi:h are incurred at any
time as a result of the assessment, monitoring, remediation or mitigatioD of an Environmental
Condition (and shall include any damages for the failure to do so), includirg, without limitation,
fees incurred for the services of attorneys, consultants, contractors, expert), laboratories and all
other costs incurred in connection with investigation and remediation, including the preparation
. of any feasibility srudies or reports and the perfonnance of any remedial, abatement, conuinment,
closure, restoration or monitoring work;
(f) "Permit" shall mean any environmental permit, license, ipproval, consent or
aurhorization issued by a federal, scate or local governmental or quasi-go\ernmental entity;
- .". (g) "Release" shall mean any releasing, seeping. spilling, lealcin.~, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or dumping of a
Hazardous Material into the Environment; and
(h) "Threat of Release" shall mean a substantial likelihood of a Release wbieh requires
action to prevent or mitigate damage to the Environment which may result from such Release.
I
Section 35.2. Use of Hazardous Materials.
Tenant shall not cause or permit any Hazardous Materia.l to be brought on, kept or us<:d,
in or about the Premises except as necessary or useful.to Tenarit's business aDd in compliance with
aU Environmental Laws.
A:\JNM\CMB\G LEAS F.. I 5(EXECl.rrION. 1)\10-16.97 127
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Section 35.3. Indernnific;\rioQ.
(a) Tenant hercby indemnifies and holds hannless the Owner Inde1l1lified Parties from
and against any and aH Envirorunental Damages to the Premises during the: tenn of this Lease,
except to the cxtent any such EnvirOrunental Damage is caused, pennitted, aHowed, suffered or
contributed to, directly or indirectly, by any of the Owner Indemnified Parties prior to the
Commencement Dare. Such Obligation of Tcnant shaH include the bunlen aod expellSe of
defending aH claims. suirs and adntinistrative proceedings (with counsel reasonably satisfactory
to Owner), eVen if soch claims. suits or proceedings are groundless, fals,. or fraudulen~ and
conducting all negotiations of any description, and paying and discharging, when and as the same
become due, any and aH jUdgments, penalties or other sums due against any of the Owner
Indemnified Parties. Tenant's obligations shall not apply with respect to EnvirolllIlen<aJ Damages
reSUlting from Environmental Conditioos existing in the Land prior to t1:e execution hereof
(regardless of whether the same were caused by any of the Owner Indemnified Parties). Without
limiting the foregoing, if the presence Or Release on Or from the Prnnises cau;ed or Permitted by
T enam reSUlt' in contamination of the Prcmi.<es, T enan[ shaH promptly talce a; I actions at its sole
cOS[ and expense as are necessary to remediate the Premises in compliance "ith Environmental
Laws in effect from time to time and to comply with any requirement" Imposed by any
Governmental Authorities; provided that Owner's approval of such actions shaH first be obtained,
which approval shall not be unreasonably withheld.
(b) Owner hereby indemnifies and ho Ids hannless the Tenant lndenlDified Parties from
and against any and all Environmental Damages resulting from Environmen<aJ Conditions existing
prior to the Commencement Date, but only in the Land and specificaJy excluding the
Improvements. Such obligation of Owner shaH include the burden and expem e of defending all
claims, suits and administrative proceedings (with counsel reasonably satisfactory to Tenant), eVen
if such claims, suits or proceedings are groundless, false Or fraudulent, and cooducting all
negotiatious of any description, and paying and discharging, when and as the same become due,
aoy and all jUdgments, penalties or other sums due against any of the Tenant lmlemnificd Parties.
(c) Notwithsranding anything to the contrary contained herein, OW",r agrees to talce
such action as .necessary to inunediarely remove the underground storage rank:(,), if any, located
on the Premises; to expeditiously Undertake such further assessment, remediation, and mOnitoring
of the soil and ground water Impacted by the Release from such tank(s), ifany, as required under
applicable EnVironmental Laws; and to talce such action as necessary [0 ob"in a No Further
Action determination from DERM or DEP, if required under Environmental Laws.
Owner shall use reasonable efforts to Undertake the work described in thj" Section 35.3(c)
in such a manner as [0 minimize disruption [0 and to avoid delaying Temar's !.Iaos to renovate
and develop che Premises.
Owner agrees that in connection wirh the work described in chis Sectio:l 35.3(c) it will
provide to Tenant all correspondence, repons, Studies and other documents eXCJanged between
A.Vl'ir.t\CMBlGLEASE.! 5(EXECllTION./)\IO_16_97 128
JUL 23 1999 13:13 FR HOLLRND KNIGHT LLP
305 789 7613 TO 7732~61886~1~305 P.01/03
L.aw Olfic:es
'"
HOLLAND & KNIGHT LLP
701 BrickeU AvcnU9
Suite 3000
P.O. Box 015441 (ZIP 33101-5441)
MianU, Florida 33131
305-314-8500
FAX 305-789-7799
FACSIMILE
TO:
Lawrence A Levy
NAME
COl\l.IP Ao.'lY /FIRM
Miami
CITY
(305) 673-7002
FAX NUMBER
Florida
STATE
TELEPHONE NUMBER
FROM:
Stuart K. Hoffman
NAJ.\1E
(305) 789-7732
TELEPHONE N"U'1vmER
3
TOTAL NUMBER OF PAGES andudinr Cover Sheet)
1!ESSAGE:
FOR THE RECORD:
DATE: 07/22/1999
URGENCY: r: SUPER RUSH
U RUSH
L) REGt}LAR
FAXED BY;
CLIElST #: 61886
AMOUNT:
MATTER;:: 1
CONFIRJ.VIED: 1': YES ! I NO
NAME:
TIME;
ML'\ I "~""07.. vI
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BooitDn
Fort Lauderdale
J:Jclc,toavillo:
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Melbo\m1tl
Mexico City
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Wllat Palm B'!lIl:h
If you did not receive all of
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JUL 23 1999 13:13 FR HOLLAND KNIGHT LLP 305 789 7613 TO 7732~61886~1~305 P.02/03
....
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Law Olfla:s
HOLLAND & KNIGlIT LLP
AlJantI
Boston
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Jacksonville
lakeland
Melbourne
Miami
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July 23, 1999
SIUART K. HOFFMAN
Direct Tclcpbooc and .fu No.
305-789-1732
lIw:.mec Addtess:
shol'l'nwl@hJcIaw.com
VIA FEDERAL EXPRESS
Miami Beach Redevelopment Agency
Executive Director
1700 Convention Center Drive
Miami Beach, Florida 33139
Miami Beach Redevelopment Agency
General Counsel
1700 Convention Center Drive
Miami Beach, Florida 33139
"
Miami Beach Redevelopment Agency
City Manager
1700 Convention Center Drive
Miami Beach, Florida 33139
Miami Beach Redevelopment Agency
City Attorney
1700 Convention Center Drive
Miami Beach, Florida 33139
~.........
Joel N. Minsker, Esq.
Bloom & Minsker, P.A.
1401 Brickell Avenue
Suite 700
Miami, Florida 33131
Re: Hotel Developmem: Agreement Between Miami Beach Redevelopment Agency
and RDP Royal Pahn Hotel Limited PartDership
Dear Ladies and Gentlemen:
This is a notice sent to you pursuant to Section 20.01 of the above-captioned Hotel
Development Agreement.
On behalf of RDP Royal Palm Hotel Limited Partnership, you are hereby advised
Chat the Miami Beach Redevelopment Agency is in default of the above-captioned Hotel
Development Agreement for failure to comply with its obligations under Section 6.4 of the
Agreemem which states as follows:
~~~ ~~ ~~~~ ~~.~~ r~ MULLAND KNIGHT LLP 305 789 7613 TO 7732~61886~1~305 P.03/03
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Miami Beach Redevelopment Agency
Joel N. Minsker, Esq.
July 23, 1999
Page 2
The City shall m.a.kc reasonable efforts to provide for expedited
handling of all review board hearings and/or permit requests
made to it by Developer relating to the Construction of the
Project. - /
As a result of the failure as the Agency and the City to comply with said Section
6.4, the development and construction of the Project has been delayed for fIfty eight (58)
days and it is anticipated that, under present circumstances, the delay may reach eighty
(80) or more days. This has resulted in substantial damages in construction costs. lost
revenues, additional interest and odIer soft costs.
Please be advised that the Tenant is in the process of determining its damages
incurred to date and will be providing that information to you under separate cover.
in an effort to encourage the City [0 comply
addition, the undersigned requested the assi
resolve the problem. However, the City an
cc:
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