99-23372 RESO
RESOLUTION NO. 99-23372
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, APPROVING ON
SECOND READING, THE DEVELOPMENT AGREEMENT, IN
ACCORDANCE WITH THE REQUIREMENTS OF THE FLORIDA
LOCAL GOVERNMENT DEVELOPMENT AGREEMENT ACT,
BETWEEN THE CITY OF MIAMI BEACH AND PELICAN
DEVELOPMENT, L.L.c., FOR DEVELOPMENT OF THE SITE
LOCATED AT 10TH STREET AND COLLINS AVENUE AND
APPROVING THE LEASE AGREEMENT BETWEEN THE CITY OF
MIAMI BEACH AND PELICAN DEVELOPMENT, L.L.c., TO
LEASE SAID SITE FOLLOWING A PUBLIC HEARING HELD IN
ACCORDANCE WITH THE PROVISIONS OF SECTIONS 82-36
THROUGH 82-40 OF THE CODE OF THE CITY AND PROVIDING
AND EFFECTIVE DATE.
WHEREAS, on January 5, 1998, pursuant to the authorization of the Mayor and City
Commission, the Administration issued a Request for Proposals for the development of public-
private parking facilities in the area south of Dade Boulevard (the "RFP"); and
WHEREAS, the City issued the RFP in order to solicit qualified development teams to bid
on certain publicly-owned sites identified in the RFP and/or to propose the development of parking
on privately owned property; and
WHEREAS, on April 6, 1998, the City received proposals from five (5) different
development teams for various sites throughout the South Beach area; and
WHEREAS, on June 30, 1998, an Evaluation Committee appointed by the City Manager
and approved by the Mayor and City Commission, heard presentations from five teams; and
WHEREAS, in accordance with the criteria identified in the RFP, the Evaluation Committee
ranked the proposals and provided their recommendations to the City Manager; and
WHEREAS, on July 15, 1998, the City Commission adopted Resolution No.98-22857,
authorizing the Administration to negotiate with an entity owned by Wayne, Suzette, Chapman and
David Ducote (n/k/a Pelican Development L.L.c.), with regard to the site located between 10th Street
and Collins Avenue; and
WHEREAS, on September 17, 1999, after a duly noticed public hearing held pursuant to
the Florida Local Government Development Agreement Act, Section 163.3220, et. seq., Florida
Statutes, the Mayor and City Commission approved the proposed development agreement by and
between Park One Development L.L.c. (the "Developer") and the City (the "Development
Agreement"), on first reading and set a second public hearing on the Development Agreement for
September 22, 1999, and also set said date for a hearing pursuant to Sections 82-36 through 82-40
of the Code of the City with respect to the proposed agreement of lease by and between the
Developer and the City (the "Lease"); and
WHEREAS, the public hearing on September 22, 1999 was open and continued to October
6, 1999 and then to October 20, 1999; and
WHEREAS, pursuant to the requirements of Section 82-39 ofthe Code ofthe City, the City
obtained an independent appraisal of the fair market or rental value of its property; and
WHEREAS, on August 24, 1999, after a duly noticed public hearing held pursuant to
Sections 142-421 through 142-425 of the Code of the City, the Planning Board reviewed the
proposed private use of the land owned by the City and zoned GU government use district, and in
connection with such review the Planning Department prepared an analysis using the criteria set
forth in Section 82-38 of the Code of the City; and
WHEREAS, the aforesaid public hearings on the Development Agreement and the Lease
have been duly noticed and held and the Mayor and City Commission hereby find and determine that
it is in the best interest of the City to enter into the Development Agreement and the Lease.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, as follows:
1. It is hereby determined and declared that the matters set forth in the recitals are true and
correct and they are hereby incorporated as part of this Resolution.
2. The Mayor and City Commission hereby approve the Development Agreement on second
reading and approve the Lease Agreement substantially in the form attached hereto, and authorize
the Mayor and City Clerk to execute said documents.
3. This Resolution shall take effect immediately upon its adoption.
PASSED and ADOPTED this 20th day of October, 1999.
YfL10R
ATTEST:
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,
CITY CLERK
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
SR/CMC/rar
T: \AGENDA \ 1999\OCT2099\REGULAR \P ARKONE. RES
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City ~mey Datt
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CITY OF MIAMI BEACH
PLANNING DEPARTMENT
To: Christina M. Cuervo
Assistant City Manager
Dean Grandin ~
Planning and Zoning Direc~
ffi
From:
Date:
Subject:
June 1,1999
Analysis of Possible Lease of the City Owned Property at Collins
Avenue and 10th Street (Site 3) for a Parking Garage.
(Ordinance 92-2783)
Pursuant to your request, this memorandum serves to provide an analysis of the lease of
City Owned Property at the subject property.
Ordinance 92-2783 of the City of Miami Beach requires that any proposed sale or lease
of city-owned land be analyzed from a planning perspective in order that the City
Commission and the public are fully apprised of all conditions relating to the proposed sale
or lease. What follows, herein, are each of the eight criteria prescribed in said ordinance
and a response to each:
1. Whether or not the proposed use is in keeping with City goals and objectives
and conforms to the City Comprehensive Plan.
The City has owned the property in question, at Collins Avenue and 10th Street, for
many years. The site has been used as a Municipal surface parking lot. The Future
Land Use Map of the City's Comprehensive Plan designates the site as P, Parking.
Because of the City's policy to encourage the creation of parking facilities, the
leasing of this lot for the purpose of creating a parking garage and accessory
ground floor retail space would conform to the land use designation contained in the
Comprehensive Plan. As an alternate plan, the applicant also contemplates using
a privately owned adjacent parcel on the 11th Street side of the City's parcel.
2. The impact on adjacent property, including the potential positive or negative
impacts such as diminution of open space, increased traffic, noise level or
enhanced property values, improved development patterns and provision of
necessary services. Based on the proposed use of the property, the City shall
1
determine the potential impact of the project on City utilities and other
infrastructure needs and the magnitude of costs associated with needed
infrastructure improvements. Should it become apparent that further
evaluation of traffic impact is needed, the proponent shall be responsible for
obtaining a traffic impact analysis from a reputable traffic engineer.
The proposed development of the site, in conjunction with private property, will
result in a 419 space parking structure with accessory retail space of approximately
5,700 square ,feet. The creation of a multi-level parking garage will enhance the
parking supply in an area of high demand. The retail component will further
enhance the Collins Avenue commercial corridor.
A traffic analysis must be performed to assess the impact of the proposed
development on the surrounding area.
3. A determination as to whether or not the proposed use is in keeping with a
public purpose and community needs, such as expanding the City's revenue
base, reducing City costs, creating jobs, creating a significant revenue stream
and improving the community's overall quality of life.
The proposed development will result in an increased number of public parking
spaces. The accessory retail space will expand the City's revenue base and create
jobs, including those jobs created during the construction phase.
4. Determination as to whether or not the development is in keeping with the
surrounding neighborhood, will block views, or create other environmental
intrusions, and evaluation of the design and aesthetic considerations of the
project.
The proposed development will be approximately 55 feet in height (five floors); as
such a height variance to exceed the required height by five feet is required. While
the proposed development is generally compatible with the pattern of development
in the surrounding area, the Board of Adjustment may not grant approval of the
variances thereby reducing the size of the project and number of spaces. This
project will also require approval from the Joint Historic Preservation / Design
Review Board and will also require concurrency review as part of that process..
The Joint Board will likely require the project to meet the maximum height
requirements for the surrounding district.
2
5. The impact on adjacent properties, whether or not there is adequate parking,
street, and infrastructure needs.
The proposed project will increase the number of public parking spaces, this will
have a positive effect to the surrounding area. Furthermore, the parking spaces
created for the retail use will be available during non-business hours for other uses
in the area. Any infrastructure deficiencies will be address at the time of
concurrency determination, at which time the appropriate mitigation, if required, will
be performed..
6. A determination as to whether or not alternatives are available for the
proposed disposition, including assembly of adjacent properties, and whether
the project could be accomplished under a private-ownership assembly.
There are few opportunities to develop a parking structure in the Collins Avenue /
Ocean Drive area without utilizing City owned land. Assembly of adjacent property
in this historic district area for the purpose of creating parking structures is not
feasible.
7. Within the constraints of public objectives, the department should examine
financial issues such as job generation, providing housing opportunities, and
the return to the City for its disposition of property.
The proposed development will increase the job base of the City. No housing
opportunities will be created.
8. Such other items as the Planning Department may deem appropriate in
analysis of the proposed disposition.
Planning Staff has concluded that the lease of the subject site for the purpose of
creating a parking structure with accessory retail space would not have a negative
impact to the City.
DJG/JGG
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CITY OF MIAMI BEACH
NOTICE OF INTENT TO CONSIDER
AGREEMENT OF LEASE AND DEVELOPMENT AGREEMENT
AT PUBLIC HEARINGS
(OPENED AND CONTINUED TO OCTOBER 20, 1999 at 2:30 P.M.)
NOTICE IS HEREBY GIVEN that a public hearing will be held by the City Commission of the City
of Miami Beach, Florida, on Wednesday, September 22,1999 at 2:00 p.m., or as soon thereafter
as possible, in the City Commission Chambers, Third Floor, City Hall, 1700 Convention Center
Drive, Miami Beach, Florida, in accordance with Sections 82-36 through 82-40 of the Code of the
City of Miami Beach, Florida, to consider and enter into a proposed agreement oflease (the "Lease")
between Park One Devt:.1opment L.L.c. and the City of Miami Beach and that the second of two
public hearings will be held by the City Commission of the City of Miami Beach, Florida on
Wednesday, September 22, 1999 at 2:01 p.m.' or as soon thereafter as possible, in the City
Commission Chambers, Third Floor, City Hall, 1700 Convention Center Drive, Miami Beach,
Florida, to consider and enter into a proposed development agreement (the "Development
Agreement") between Park One Development L.L.c. and the City of Miami Beach in accordance
with the requirements of the Florida Local Government Development Agreement Act for property
comprised of approximately 21,140 square feet located on Collins Avenue, between 10th Street and
11th Street (approximately 100 feet south of the southeast corner of 11 th Street), Miami Beach,
Florida. The Project shall consist of a parking garage of approximately 270 parking spaces and not
to exceed 5,000 square feet of retail space. The Project shall be approximately 50 feet in height with
a Floor Area Ratio not to exceed 2.0.
The foregoing information is provided pursuant to the requirements of Sections 82-36 through 82-40
of the Code of the City of Miami Beach, Florida and Section 163.3225, Fla. Stat.
Inquiries concerning the proposed Lease and Development Agreement should be directed to the
Office of the City Clerk, (305) 673-7411. Copies of the proposed Lease and Development
Agreement are available for inspection, and may be obtained pursuant to ~119.07, Fla. Stat., during
normal business hours in the Office of the City Clerk, City Hall, First Floor, 1700 Convention Center
Drive, Miami Beach, Florida.
All persons are invited to appear at this meeting or be represented by an agent, or to express their
views in writing addressed to the City of Miami Beach City Commission c/o the City Clerk, 1700
Convention Center Drive, First Floor, Miami Beach, Florida 33139.
Pursuant to Section 286.0105, Fla. Stat., the City hereby advises the public that: If a person decides
to appeal any decision made by the City Commission with respect to any matter considered at this
meeting or hearing, such person must insure that a verbatim record of the proceedings is made,
which record includes the testimony and evidence upon which the appeal is to be based. This notice
does not constitute consent by the City for the introduction or admission of otherwise inadmissible
or irrelevant evidence, nor does it authorize challenges or appeals not otherwise allowed by law.
In accordance with the Americans with Disabilities Act of 1990, all persons needing special
accommodation to participate in this proceeding should contact the City Clerk's Office no later than
four days prior to the proceeding, telephone (305) 673-7411 for assistance; if hearing impaired,
telephone Florida Relay Service numbers (800) 955-8771 (TDD) or (800) 955-8770 (VOICE), for
assistance.
F:\ATfOlLEVLIPARK1NGIPUB-PRIVlllJTH\2NDHEARI
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
http:\\ci.miami-beach.fl.us
COMMISSION MEMORANDUM NO. l?~ -'ij
TO:
Mayor Neisen O. Kasdin and
Members of the City C mmission
DATE: October 20,1999
FROM:
Sergio Rodriguez
City Manager
SUBJECT:
A RESOLU ION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, APPROVING ON SECOND
READING, THE DEVELOPMENT AGREEMENT, IN ACCORDANCE
WITH THE REQUIREMENTS OF THE FLORIDA LOCAL GOVERNMENT
DEVELOPMENT AGREEMENT ACT, BETWEEN THE CITY OF MIAMI
BEACH AND PELICAN DEVELOPMENT, L.L.c., FOR DEVELOPMENT
OF THE SITE LOCATED AT 10TH STREET AND COLLINS AVENUE AND
APPROVING THE LEASE AGREEMENT BETWEEN THE CITY OF
MIAMI BEACH AND PELICAN DEVELOPMENT, L.L.c., TO LEASE SAID
SITE FOLLOWING A PUBLIC HEARING HELD IN ACCORDANCE WITH
THE PROVISIONS OF SECTIONS 82-36 THROUGH 82-40 OF THE CODE
OF THE CITY AND PROVIDING AN I EFFECTIVE DATE.
RECOMMENDATION:
Adopt the Resolution.
Current Status
The only outstanding issue that remains is the term for the Lease, i.e. 40 years plus 1, 10 year
extension option or 50 years.
As a further point of clarification, the Administration has reviewed the July 21, 1999, Commission
meeting tape and has determined that the City Commission adopted the "City's position of a 50 year
term" as recommended in the commission memorandum, i.e., a 40 year term with one 10 year
extension option. Park One (n/k/a Pelican Development, LLC) continues to disagree with the City's
interpretation and believes a straight 50 year term was the Commission's desire.
The parties have reached agreement on all other outstanding issues which are highlighted in this
memorandum.
BACKGROUND:
On January 5, 1998, the City of Miami Beach issued RFP 20-97/98, seeking proposals for the
development of Public-Private Parking facilities. On April 6, 1998, proposals from five (5) different
AGENDA ITEM R 'l D
DATE _, 0- 20 - '[9
Park One Development, L L. C
October 20, 1999
Page 2
development teams were submitted and evaluated by an Evaluation Committee. On July 15, 1998,
the City Commission authorized negotiations commence with four (4) ofthe proposed development
projects as follows:
Site 1: Municipal Parking Systems
Site 2: Municipal Parking Systems
Site 3: Park One, Inc.
Site 4: Lincoln Place
-Michigan and 17th Street
-Lenox Avenue and 17th Street
-Collins Avenue and 10th Street
- Washington Avenue and 16th Street
On September 10, 1998, the City issued RFP 111-97/98, to evaluate the four (4) municipal surface
parking lots proposed for the development of Public-Private Parking facilities. On September 23,
1998, the City Commission authorized the Administration to contract with HNTB to conduct such
an evaluation of the proposed developments. On February 3, 1999, the City Commission referred
Phase I ofHNTB's report and recommendations, regarding the proposed Public-Private Development
Proposals, to the Finance and Citywide Projects Committee, which met on February 25, 1999.
On March 3, 1999, the City Commission accepted the Finance and Citywide Projects Committee's
report to phase the development projects and directed the Administration to begin negotiations for
Site 1 and Site 4 and to begin discussions with Site 3 to try to work out the differences and allow for
possible agreement on tenus that can be presented back to the Committee. On April 14, 1999, the
City Commission directed the Administration to negotiate with Park One for the 10th Street Public-
Parking Garage site while stating that the City was not waiving its rights to proceed on its own,
should the negotiations be unsuccessful.
On May 26, 1999, after further recommendations from the City not to enter into the proposed
agreement with Park One, the Commission directed the Administration to negotiate the terms of a
Development and Lease Agreement and to present the negotiated terms at the June 9, 1999
Commission Meeting. On June 9, 1999, the City Commission directed staff to convene further
negotiations with Park One in order to reach closure on the financial issues. On June 23, 1999, the
re-negotiated terms were presented to the City Commission, at which time the resolution was
deferred pending the outcome of the KTKL litigation.
The City Commission further requested that Larry Herrup, an independent Certified Public
Accountant and Chairman of the City's Budget Advisory Committee, review the financial projections
presented by the City and alternatively by Park One. Larry Herrup reviewed the City's projections
and Park One's projections. Larry Herrup presented his findings at the July 21, 1999 meeting to the
City Commission.
On July 21, 1999, the City Commission approved 1) the Settlement Agreement between the City of
Miami Beach and KTKL and 2) the negotiated terms with Park One, Inc.; authorizing the
Administration to finalize a Development Agreement and Lease Agreement. On September 17,
1999, the City Commission considered the Development Agreement on first reading and set the
public hearing on September 22, 1999, which was opened and continued to October 6, and then to
October 20, 1999. To facilitate the negotiations, the City Attorney engaged the firm of Bloom &
Minsker to assist and draft the attached Ground Lease Agreement and Development Agreement.
Park One Development, L L C
October 20, J 999
Page 3
Planning Analysis
Pursuant to the provisions of City Ordinance 92-2783 (the "Shapiro Ordinance"), the lease of any
City-owned property for a period of five years or more, including option periods, is subject to the
following conditions:
. a Planning Department analysis
. a public hearing to obtain citizen input
. an advertised public bidding process
. an independent appraisal to determine the fair market or rental value of the property
Said Ordinance further provides that except for the public hearing and the Planning Department
analysis, the above referenced conditions may be waived by a 517ths vote ofthe City Commission
upon a finding that the public interest would be served by waiving such conditions. A public hearing
has been scheduled on this date and the Planning Department analysis of the proposed Lease
Agreement is attached for City Commission consideration (see Exhibit 1). As previously stated, this
lease was negotiated based upon a publicly advertised RFP for which an appraisal has been procured;
therefore no waivers are requested at this time.
Approval Timelines:
August 24, 1999
September 14, 1999
October 20, 1999
-Review by Planning Board
-Approval of Development Agreement on First Reading
-Final approval of Development Agreement and Lease Agreement
Development Reeulations:
In accordance with the Florida Local Government Development Agreement Act, the City of Miami
Beach and Park One Development LLC, are entering into a Development Agreement to address,
among other things:
· the proposed development at the site
· the development regulations applicable to the site
· the improvements to be constructed by the developer (tenant)',
. the timeframe by which the developer (tenant) shall obtain all building permits and complete
construction, subject to unavoidable delays.
The City Commission has held the first of two public hearings to enter into a Development
Agreement. This resolution will approve the Development Agreement on second hearing and final
public hearing.
The subject City land is presently zoned Government Use (GU). The proposed public-private
development represents private or joint government/private uses in the GU district. Pursuant to
Section 142-423 of the City Code, any such uses require review by the Planning Board prior to
approval by the City Commission. On August 24, 1999, Park One presented their proposed
development project to the Planning Board, outlining the uses and setting forth the applicable
Park One Development. L L. C.
October 20, 1999
Page 4
development regulations. There were no objections to the proposed project expressed by the Board
at this meeting.
Pursuant to Section 142-425 of the City Code, the City Commission must confirm the development
regulations that apply as a result of such proposed private or joint government/private use to be the
average of the requirements in the surrounding districts, as determined by the Planning and Zoning
Director. The Planning and Zoning Director has determined that the development regulations for
MXE will apply to this site and said development regulations are confirmed in the Development
Agreement.
APPRAISALS:
The appraisals of the Public-Private Parking projects were completed on March 19, 1999, by J. B.
Alhale & Associates Inc., and are based on the highest and best use of the property as of March 15,
1999.
Site 1: Michigan Site 2: Site 3: Site 4: Washington
& 17th St. Lenox & 171h St. Collins & 10th St. & 161h St.
Appraised Value: $5,070,000 $2,800,000 $2,600,000 $3,900,000
Highest & Best
Use @ 3/15/99
Proposed Less than highest TBD Less than highest Site has limitations
Development: and best use and best use affecting ability to
develop the highest
and best use
without additional
land.
As reported on April 28, 1999, staff prepared a projected project cashflow analysis to reconcile the
fair market value and the base rent return to the City based upon the proposed value in use. As a
result of the less intensive proposed use for this site and the limited revenue potential of a parking
facility with minimal retail space, the property's value based on a "value in use" would be less than
the fair market value.
CONSULTANT RECOMMENDATIONS:
HNTB evaluated the proposals and recommended that the City should not sell its property and that:
. the City should strongly consider building a 100% public/municipal Garage at the lOth Street
site. The site should be constructed as soon as possible and prior to the other public/private
garages. The highest priority should be given to constructing the 10th Street garage.
· a supply/demand analysis indicated that the 10th Street site would likely experience the
greatest overall external demand for parking.
Park One Development, L L C.
October 20, 1999
Page 5
ANALYSIS:
Following City Commission direction on April 14, May 26, June 9, June 23, and July 21, to finalize
negotiations with Park One, the Administration and Park One have agreed on all terms.
The recommended negotiated terms of the proposed project are delineated below. Additional terms
negotiated since the first public hearing on September 14, are in bold for your easy reference.
TERMS:
Park One
Owner:
City of Miami Beach
Developer/Tenant:
Pelican Development LLC
Principals:
60% - Gravier Development, L.L.C.
(Wayne C. Ducote - 50%; David L. Ducote - 50%),
20% - Soeur et Frere, Inc.
(Suzette A. Ducote - 50%; Chapman C. Ducote - 50%),
20% - Mako Capital, L.L.C.
(Suzette A. Ducote - 100%)
Project Description:
270 spaces garage
Not to exceed 5,000 sfretail
Project Cost:
$4,177,000
Funded Equity:
$1,044,250
Lease Term:
40 years with 1, lO-year extension option.
Fee upon Execution:
Amount equal to City's out of pocket costs, not to exceed
$45,000.
Commencement Date:
Agreement execution date .
Construction/Permitting:
Subject to unavoidable delays.
Preliminary Plans and Specs:
DRBIHP Application:
No later than 8 weeks from commencement date.
No later than 4 weeks from approval of preliminary plans and specs
approvals.
No later than 8 weeks from DRBIHP approval
No later than 20 months from Construction Commencement or
December 31, 2001.
Building Permit:
Construction Completion:
Possession Date:
On or before January 10,2000.
Park One Development, L L C
October 20, 1999
Page 6
Security Deposit:
KTKL Settlement Agreement:
CO Date:
Rent during Possession
Date thru Construction Period:
Delay Date:
Base Rent at Delay Date:
Base Rent Adjustments:
Percentage Rent:
(as a percentage of gross revenues)
Re-appraisals:
Real Estate Taxes:
- Upon commencement, a $21,000 deposit will be provided
for damages in connection with the performance clause in the
KTKL Settlement Agreement.
- Upon possession, one year of base rent will be provided as
security deposit until CO date.
KTKL has exercised its option to retain 3 spaces for a
dumpster area. City will pay for cost of dumpster build-
out and will pay Park One the equivalent payment made
to KTKL for a period of up to 30 years for the lost spaces.
Earlier of date upon which TCO/CO is obtained.
$42,000/annually
(This fee represents the City's projected loss of revenue on
the site. Weare requiring developers to compensate City for
this loss during construction, or 22 months from possession
date. )
Earlier of CO Date or September 30,2001 from construction
commencement, not subject to unavoidable delays.
$75,000/annually
Base rent will be adjusted at the end of the 5th lease year and
every 5th lease year thereafter, based upon the lesser of 12%
or the cumulative CPI over the previous 5 year period.
At the earlier of (i) a sale of the project or (ii) once project
revenues exceed $1,090,000 or (iii) beginning in Year 9, and
every Lease Year thereafter, percentage rent of 2.5% of gross
revenues will be calculated in addition to base rent.
Percentage rent will be due and payable at the end of each
year.
If developer exercises extension option, the land will be re-
appraised, based upon the terms set forth in the Lease
Agreement, to determine the new base rent based upon the
value in use in the 39th year. The Base Rent will never be less
than the prior year's base rent.
Included and defined as Additional Rent in the event taxes are
abated or reduced. If taxes are reduced as a result of decline
in property values in the area, this provision will not apply.
Park One Development, L L C
October 20, 1999
Page 7
.
unlawful/illegal businesses or any use which is public
nUIsance
tatoo parlors, psychics, palm and tarot card readers,
body piercing shops or gambling casino
for any use involving ownership structure such as time
share, cooperative, etc.
Prohibited Uses:
.
.
Parking Rates:
Garage parking rates, including special event flat rates, shall
not be less than the City/Agency rates or greater than
comparable garage parking rates charged within the City
of Miami Beach.
Subordination:
City agrees to subordinate percentage rent to debt service
payments on first mortgage, but not the base rent (except in
the case of an affiliate mortgage).
Sale:
Sale of the project will be subject to City consent.
Right ofPirst Refusal:
City/Developer has the right of first refusal to purchase
other's interest in the Premises.
Environmental Matters:
Property is leased "as is" and developer is responsible for
remediation.
Financial Return to the City:
The financial return to the City consists of rent (base rent, percentage rent and additional rent) and
real estate taxes (the property is currently tax exempt).
As previously described, the fair market value ofthe land as of March 15, 1999, is $2,600,000, based
on the highest and best use. As a result of the less intensive proposed use for this site and the limited
revenue potential of a parking facility with minimal retail space, the property's value based on a
"value in use" would be less than the fair market value. Attached hereto, as Exhibit 2, is a 10 year
operating proforma prepared by Park One based upon 270 revenue-producing parking spaces and
Park One's operating costs.
City staff reviewed Park One's revised financial projections based on 270 spaces and as a result of
Park One's estimated higher operating costs, the negotiated base rent has been reduced to $75,000
a year. At the $75,000 base rent level, Park One is able to achieve a 10% return due to their higher
operating expenses including payroll, insurance and property taxes. Additionally, a percentage rent
of2.5% ofproject revenues has been negotiated once the project exceeds a project revenue threshold
of $1.090 million. At the $1.090 million project revenue threshold, Park One is achieving its
minimum desired return and the City can begin to receive a percentage share in project revenues.
Likewise, the project revenue threshold will allow the City to share in revenues if the project is
permitted for more than 270 spaces.
Park One Development, L L C
October 20, 1999
Page 8
Separately, the City has entered into a Settlement Agreement with KTKL. KTKL has exercised its
option to retain up to 3 spaces for a dumpster area. As a result the City's payment to KTKL is
reduced by these 3 spaces but the City will be obligated to make the same payment to Park One to
compensate for their loss of revenue. These costs were contemplated as part of the KTKL
Settlement Agreement.
Real Estate Taxes
The City will benefit from the projected annual real estate taxes that will be paid to the City. It is
projected that of an estimated total project hard cost of$3,074,275, the approximate total initial tax
bill will total $83,251, of which $23,053 will represent the City's portion.
The Lease Agreement further provides that any abatement or waiver of real estate taxes will be paid
as "Additional Rent" to the City in the event that tax exemptions are granted for the land and
improvements. The land is currently tax exempt but non-public uses on municipal land are subject
to ad-valorem taxes pursuant to State Statute. This Agreement provides that any change in law
would require the Developer to pay an amount equal to the taxes in the form of Additional Rent.
Sale, Assif:nment. Transfer & Subletting
The Lease Agreement provides that City consent will be required in the event of a sale, assignment,
transfer or sublease.
RECOMMENDATION:
Please note that the attached Development Agreement and Lease have been "redlined" to show
changes from the documents presented at the September 17tlt meeting of the City Commission in
order to expedite your review. Deleted material is indicated by a strike-through, and inserted text
is indicated by double underlining. A "clean" copy ofthe documents has been provided to the City
Clerk for inclusion in the official records of the City.
It is recommended that the Mayor and City Commission approve the Development Agreement and
Lease Agreement as recommended by the Administration and adopt the resolution attached hereto.
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