HomeMy WebLinkAbout2005-25899 Reso
RESOLUTION NO. 2005-25899
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, IN ACCORDANCE WITH
THE REQUIREMENTS OF SECTIONS 163.3220 - 163.3243,
FLORIDA STATUTES, ALSO REFERRED TO AS THE "FLORIDA
LOCAL GOVERNMENT DEVELOPMENT AGREEMENT ACT",
APPROVING, ON SECOND READING, A DEVELOPMENT
AGREEMENT BETWEEN THE CITY OF MIAMI BEACH AND AR&J
SOBE, LLC (a/kla POTAMKIN/BERKOWITZ) FOR THE
DEVELOPMENT OF THE PROJECT, PRESENTLY REFERRED TO
AS "5TH AND ALTON" , CONTAINING ~PPROXIMA TEL Y 179,000
SQUARE FEET OF RETAIL AREA; A SUPERMARKET; AN
APPROXIMATELY 1081 SPACE PARKING GARAGE; PARK-AND-
RIDE TRANSIT FACILITY, INCLUDING AN INTERMODAU
TRANSPORTATION COMPONENT; AND SURROUNDING
STREETSCAPE AND PUBLIC INFRASTRUCTURE TO SERVE THE
PROJECT, BOUNDED BY LENOX AVENUE ON THE EAST,
ALTON ROAD ON THE WEST, 6th STREET ON THE NORTH AND
5th STREET ON THE SOUTH, IN MIAMI BEACH.
WHEREAS, on June 7,2000, the Mayor and City Commission adopted Resolution
No. 2000-23963, designating the area bounded by 6th Street to the North, 5th Street to the
South, Alton Road to the West and Lenox Avenue to the East, as a Brownfield area to
promote the environmental restoration and economic redevelopment of the area; and
WHEREAS, since July 2002, the Administration has been meeting with
representatives of the site, generally located on 5th Street and Alton Road, owned by the
Potamkin family, to address a joint development opportunity and to review a preliminary
site plan for a five (5) level mixed-use retail complex, including a public parking garage and
a supermarket (the Project); and
WHEREAS, in accordance with the City Commission's directive and the
community's identified needs, the City's interest in the Project's development was primarily
focused on achieving the public benefit of locating a supermarket, exploring transit and
excess parking opportunities, and developing a gateway project at one of the City's main
arterial entryways; and
WHEREAS, over the past two (2) years, the Project has been reviewed on several
occasions by various City Committees including the Finance & Citywide Projects
Committee, Transportation and Parking Committee, Design Review Board and Historic
Preservation Board; and
WHEREAS, having taking into consideration the recommendations from these
Committees, the parties have reached agreement on a majority of the substantive terms
and conditions that would govern the City's joint participation, including the identification of
Federal Transit Administration (FT A) funding, as a potential source for the City's capital
contribution to the Project; and
WHEREAS, on April 5, 2004, the Developer, AR&J SOBE, LLC, and its Project team
and City staff met with the FT A in Atlanta to review FT A funding requirements; the FT A
expressed favorable comments in its initial review of the Project and indicated the City
would need to place emphasis on the transit elements of the Project, focusing on their
location, cost and use, and transit user profiles to determine the Project's eligibility for FT A
funding; and
WHEREAS, in addition, as reported in May 2005 to the City Commission, the City
and Developer have continued to address other issues including: Floor Area Ratio (FAR),
Alley Vacation, Park and Ride Transit Facility components, Art in Public Places, Planning
Board - Conditional Use and rising construction costs; and
WHEREAS, as part of the ongoing negotiations, many areas of uncertainty
continued to arise, affecting the ongoing Project negotiations; namely: (1) the FT A funding
requirements and pending approval by FT A; and (2) the rising cost of construction, and its
impact on the City's financial contribution to the Project; and
WHEREAS, these issues were discussed by the Finance Committee on October 26,
2004, and resolved as set forth below:
. FT A: Since the outcome of the FT A funding eligibility will not be confirmed until
sometime in the future, the Developer is facing timing constraints to determine
whether or not to proceed with the City, or independently, in the proposed Project.
The Finance Committee recommended that the City commit to proceed with the
Project irrespective of FT A funding eligibility. In other words, if FT A deems the
project is not wholly or in part eligible, the City will be committing non FT A funding,
preferably South Pointe RDA funds, in order to guarantee the City's participation in
the Project from the onset;
· Construction Cost Estimates: As to the rising cost of construction, on August 25,
2004 and September 14, 2004, the Developer submitted a take-off analysis of the
estimated construction cost of the parking component of the proposed Project,
which was prepared by the Developer's consultant Moss and Associates. The
Developer also conducted an area analysis and calculated a percentage cost per
square foot, which yielded a higher value for the garage. The Developer's analysis
reflected a revised construction cost estimate of $20,741/per space (based on
percentage allocation) and $18,025/per space based on the Moss Take-off analysis;
The City had previously negotiated a $14,500/per space cost contribution to the
project, which represented a $7,250,000 capital contribution based on 500 spaces.
The new cost estimates submitted by the Developer represent an over 24-43%
increase in the City anticipated contribution to the Project;
The City engaged its Program Manager, URS, to review and perform an
independent analysis of the Moss and Associates Take-off analysis (submitted by
the Developer) and of the construction costs submitted. As a result, URS submitted
revised construction cost estimates and reallocations, as deemed necessary, and
URS determined the per space cost, without any alteration to the proposed Project
design, would be approximately $16,262/per space; and
WHEREAS, the Finance Committee discussed the reality of rising construction costs
and felt it was appropriate to modify the City's capital cost contribution accordingly, due to
the Developer's guarantee to assume any construction cost overruns; and
WHEREAS, the rise in costs is mitigated by the Developer's guarantee to assume
the construction risk associated with any future cost increases or construction change
orders not dictated by the City and/or any FT A requirement; and
WHEREAS, based on the revised construction cost estimates and Developer's
assumption of the aforestated risks, the Finance Committee recommended committing to
the revised City capital contribution to the Project of $9,500,000, as cited above; and
WHEREAS, City and Developer will jointly operate and maintain the Park and Ride
Transit Facility; and
WHEREAS, annual operating expenses of the garage will be shared by Developer
and City; further, net revenues or operating losses will be shared on a pro-rata basis based
on the ownership of spaces; and
WHEREAS, the Agreement contains provisions for post-construction termination by
Developer, in which event City shall be reimbursed its contribution plus four percent (4%)
annual simple interest or the Fair Market Value of its portion of the Project; and
WHEREAS, City and Developer agree that the City's contribution to the Project is
fifty-six percent (56%) of the cost of the Project, and further agree that fifty-six percent
(56%) shall be the formula applied to determine Fair Market Value in the event of
termination; and
WHEREAS, the Developer has requested a waiver of the Art in Public Places
contribution pursuant to the provisions of the Art in Public Places Ordinance; and
WHEREAS, on December 8, 2004 the Mayor and City Commission set the first
public hearing to consider the aforestated Development Agreement, on First Reading; and
WHEREAS, on April 20, 2005, the Mayor and City Commission heard and
considered testimony at a public hearing and further approved the afore stated
Development Agreement on first reading; and
WHEREAS, on April 20, 2005, the Mayor and City Commission set the Second (and
final) Public Hearing to consider the Development Agreement for May 18, 2005; and
WHEREAS, the Administration recommends that the Mayor and City Commission
approve the Development Agreement on Second Reading.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that in accordance with the
requirements of Sections 163.3220 - 163.3243, Florida Statutes, also referred to as the
"Florida Local Government Development Agreement Act", the Mayor and City Commission
hereby approve, at the second of two duly noticed Public Hearings, the attached
Development Agreement between the City of Miami Beach and AR&J Sobe, LLC (A1K/A
Potamkin/Berkowitz) for the development of the Project, presently referred to as "5th and
Alton", containing approximately 179,000 square feet of retail area; a supermarket; an
approximately 1070 space parking garage; park-and-ride transit facility, including an
intermodal/transportation component; and surrounding streetscape and public
infrastructure to serve the Project, bounded by Lenox Avenue on the East, Alton Road on
the West, 6th Street on the North and 5th Street on the South, in Miami Beach.
PASSED AND ADOPTED this 18th day of May, 2005.
ATTEST:
CITY CLERK
-', ::~R6~rij)<U"~her '
~fPM~
David Dermer
JMG/TH/rar
T :\AGENDA \2005\Apr2005\RegularlPotamkin,RES,doc
APPROVED AS TO
FORM & LANGUAGE
& FOR CUTION
-#r
CITY OF MIAMI BEACH
COMMISSION ITEM SUMMARY
~
Condensed Title:
In accordance with the requirements of Sections 163.3220 - 163,3243, Florida Statutes, also referred to as the
"Florida Local Government Development Agreement Act", it is recommended that the Mayor and City Commission
approve at the second of two duly noticed Public Hearings, a Development Agreement between the City of Miami
Beach and AR&J SObe, LLC (a/k1a Potamkin/Berkowitz) for the Development of the Project, presently referred to as
"5th and Alton", containing approximately 179,000 square feet of retail area, a supermarket and an approximate 1081
space parking garage and associated transit facility, including a transit dedicated component, an integrated parking
garage, vertical transportation, ramps, ventilation, etc, , and surrounding streetscape and public infrastructure to serve
the project, bounded by Lenox Avenue on the East, Alton Road on the West, 6th Street on the North and 5th Street
on the South, in Miami Beach,
Issue:
Shall the Mayor and City Commission approve the Development Agreement, upon second and final public hearing?
Item Summary/Recommendation:
Concurrent with the negotiations, the Potamkin/Berkowitz group has received approval to implement a sign age
overlay district to permit effective signage for the Supermarket and for the retail tenants within the Project and the
project has also received DRB/HP approval. While support for the Project is generally widespread, comments have
been made concerning the economic viability of the parking operation and ingress/egress challenges to the site, The
parties will continue to seek further community outreach with area businesses/residents as part of the FT A
Environmental Assessment process, A Resolution to vacate the alley located on the site was approved by the City
Commission on February 23, 2005,
Related to the Development Agreement, is the required contribution from the Project to Art in Public Places (AiPP),
The present AiPP Ordinance requires all City projects to make a financial contribution to support ongoing and future
operations and acquisitions of the City's AiPP program. The most common application for the Ordinance has been to
City projects that are City-owned and constructed, however, the Ordinance also pertains to Capital Construction
Projects where the City is a partner, therefore this project falls under the Ordinance. A decision will need to be made
as to whether or not to waive the Project's AiPP contribution, The Developer has continually maintained that he will
not entertain funding any portion of the AiPP fee, if a waiver is not granted. Instead, Developer has committed to
install a major piece of art at the entrance of the project, and Mr. and Mrs, Alan Potamkin have represented that they
have promised gifts to the Bass Museum,
Other salient points further addressed in the memo, listed here, include the following: the Developer has the right to
terminate the Agreement, City staff analysis indicate the Garage will likely require operational subsidies from the
Parking Enterprise in the first few years, the Project may have difficulty in securing full funding from the FTA,
Developer has the right to lease up to 150 "City" spaces for its operational requirements, City is purchasing 535
parking spaces, of which, 438 are considered excess parking. In the event of a restaurant locating in the project, the
City and Developer have agreed to Joint Ownership of approximately 14 spaces for Code purposes. All other issues
raised at 15t Reading have been addressed.
The Administration recommends that the Mayor and City Commission approve the Development Agreement on
second and final public hearinQ,
Advisory Board Recommendation:
Finance & Citywide Proiects Committee: December 22, 2003: September 14. 2004 - engage the City's own
consultant to review and analyze the newly submitted construction costs estimates; October 26. 2004 - due to rising
construction costs, modify the City's capital cost contribution accordingly, due to the Developer's guarantee to
assume any construction cost overruns; February 14. 2005 - recommendation to proceed in finalizing the
Development Agreement.
Transportation and ParkinQ Committee - February 2, 2004, March 1, 2004, September 27, 2004
Desian Review Board & Historic Preservation Board - August 17, 2004 - Project Approved
AiPP - January 18. 2005 - motion to grant the requested waiver; February 15. 2005 - motion granting the waiver was
reconsidered and the Committee recommended that the requested waiver not be granted,
Financial Information:
Source of Amount Account Approved
Funds: 1
I I 2
Finance Dept. Total
islative Trackin
n-Ofts:
Department Director
T:\AGENDA\2005\May1805\RegularlPotamkin, SUM, doc
AGENDA ITEM R 7/3
DATE ~ -/ g-o~
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
www.miamibeachfl.gov
To:
From:
COMMISSION MEMORANDUM
Mayor David Dermer and
Members of the City com~iSSirn
Jorge M. Gonzalez ~ I ~ ~D r
City Manager ~
Date: May 18, 2005
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, IN ACCORDANCE WITH THE
REQUIREMENTS OF SECTIONS 163.3220 - 163.3243, FLORIDA
STATUTES, ALSO REFERRED TO AS THE "FLORIDA lOCAL
GOVERNMENT DEVELOPMENT AGREEMENT ACT", APPROVING, ON
SECOND READING, A DEVELOPMENT AGREEMENT BETWEEN THE
CITY OF MIAMI BEACH AND AR&J SOBE, llC (a1k1a
POTAMKIN/BERKOWITZ) FOR THE DEVELOPMENT OF THE PROJECT,
PRESENTLY REFERRED TO AS "5TH AND ALTON", CONTAINING
APPROXIMATELY 179,000 SQUARE FEET OF RETAil AREA; A
SUPERMARKET; AN APPROXIMATELY 1081 SPACE PARKING
GARAGE; PARK-AND-RIDE TRANSIT FACILITY, INCLUDING AN
INTERMODAUTRANSPORTATION COMPONENT; AND SURROUNDING
STREETSCAPE AND PUBLIC INFRASTRUCTURE TO SERVE THE
PROJECT, BOUNDED BY lENOX AVENUE ON THE EAST, ALTON
ROAD ON THE WEST, 6th STREET ON THE NORTH AND 5th STREET
ON THE SOUTH, IN MIAMI BEACH.
ADMINISTRATION RECOMMENDATION
Subject:
Adopt the Resolution.
ChanQes Based on Comments at First ReadinQ
On April 20, 2005, the Mayor and City Commission heard and considered testimony related
to this Development Agreement, and further, approved the Development Agreement on
first reading. During the discussion, a number of issues were raised, that the City
Commission directed the Administration to resolve with the Developer before second
reading. These issues and their resolution are as follows:
· The Developer will pay for the removal of metered parking as necessary to
accommodate the design and operation of the facility, and the City will pay for the
condominium costs as an offset.
· A small number of parking spaces will be retained in joint ownership between the City
and Developer in order to address any Code Required Parking issue that may arise in
the event of a change of use that increases the parking requirement.
· Language has been added to clarify the intent of the parties that Developer is to
execute/issue checks in accordance with the mutually approved budget.
May 18, 2005
City Commission Memorandum
Potamkin/Berkowitz - Development Agreement
Page 2 of 19
· Developer currently has a Right of First Refusal. Language has been added to provide
an option that defines Market Value as the price offered by the prospective buyer.
· The Supermarket is limited to ten years even though all parties have indicated that if a
supermarket/grocery comes into the project the lease would most likely be for a longer
term. Language has been added that allows for a longer term should the City bring a
grocery into the project subsequent to the failure of the initial grocery.
· The Developer has agreed to provide a letter specifying its commitment to not attempt
to require the City to provide a "shuttle service" to and from the garage.
· The following language has been added to the definition of Fair Market Value: "The Fair
Market Value of the City Spaces shall first be determined by including land value, and
then, as provided in the Agreement, such value shall be multiplied by the Fraction to
adjust for the fact that the City does not have an interest in fee title to the Land".
· The language in section 2.6 (d) has been reworked to make it easier to follow.
· The "Completion Deadline" date has been extended from September 1, 2007 to March
1, 2008 to reflect the passage of time since the date was originally agreed upon. This
was an oversight and should have been revised prior to First Reading.
ANALYSIS
On June 7, 2000, the Mayor and City Commission adopted Resolution No. 2000-23963
designating the area bounded by 6th Street to the North, 5th Street to the South, Alton Road
to the West and Lenox Avenue to the East (also known as the "Potamkin Site"), as a
Brownfield area to promote the environmental restoration and economic redevelopment of
the area.
Since July 2002, the Administration has been meeting with representatives of the site
generally located on 5th Street and Alton Road, owned by the Potamkin family, to address a
joint development opportunity and to review a preliminary site plan for a five (5) level
mixed-use retail complex, including over 900 parking spaces and a supermarket. In
accordance with the City Commission's directive and the community's identified needs, the
City's interest in the project development was primarily focused on achieving the public
benefit of locating a supermarket, exploring transit and excess parking opportunities, and
developing a gateway project at one of the City's main arterial entryways.
Over the past two (2) years, the proposed project has been reviewed on several occasions
by various City Committees including Finance and Citywide Projects Committee,
Transportation and Parking Committee, Design Review Board and Historic Preservation
Board. With the recommendations from these meetings, the parties have reached
agreement on the substantive terms and conditions that would govern the City's joint
participation, including the identification of Federal Transit Administration (FT A) funding, as
a potential contributing source, for the City's capital contribution to the project.
May 18, 2005
City Commission Memorandum
Potamkin/Berkowitz - Development Agreement
Page 3 of 19
While support for the Project is generally widespread, at both the Transportation and
Parking, and Finance and Citywide Projects Committee, the public raised some concerns
on the economic viability of the parking operation and ingress/egress challenges to the site.
The parties will continue to seek further community outreach with area businesses/
residents as part of the FTA Environmental Assessment process. It should be noted,
however, that a Pro Forma done by the City's Parking Department (discussed below) does
indicate that the garage will likely require operating subsidies in its first few years.
Concurrent with the negotiations, the Potamkin/Berkowitz group has received approval to
implement a signage overlay district to permit effective signage for the Supermarket and for
the retail tenants within the Project and the project has also received DRB/HP approval.
As reported in May 2004 to the City Commission, the City and Developer have continued to
address other issues including: Floor Area Ratio (FAR), Alley Vacation, Termination Rights,
Park and Ride Transit Facility components, Art in Public Places, Planning Board -
Conditional Use, FTA funding eligibility and rising construction costs.
Due to the extended negotiations regarding the terms of the Development Agreement, the
Alley vacation (Resolution No. 2005-25827) was considered and approved by the City
Commission on February 23, 2005 independent of the Development Agreement
(Attachment "A"). The City does retain an option to obligate Developer to include the
Transit Facility Dedication area and finishes, at City expense, in the event the Development
Agreement is not approved. The Alley vacation contains the following reverter conditions:
i. In the event Developer does not enter into a supermarket lease (as defined in the
proposed Development Agreement) on or before eighteen (18) months atter the
Effective Date of the Agreement or Construction Commencement, whichever comes
first;
ii. In the event Developer does not commence construction ofthe Project on or before
September 1, 2006;
iii. In the event the Project is substantially modified from the Project approved by the
Historic Preservation Board and Design Review Board, as referenced in the
respective Board Orders issued in August 2004; and
As part of the ongoing negotiations, many areas of uncertainty continued to arise affecting
the success of the negotiations; namely, (1) the FT A requirements and pending approval
by FTA and (2) the rising cost of construction, and its impact on the City's contribution to
the project. These issues were discussed by the Finance and Citywide Projects
Committee on October 26, 2004 and resolved as set forth below:
May 18, 2005
City Commission Memorandum
Potamkin/Berkowitz - Development Agreement
Page 4 of 19
Maior Issues:
Federal Transit Administration (FT A)
On April 5, 2004, the Developer and its project team, and the Administration met with the
Federal Transit Administration (FT A) in Atlanta to review FT A funding requirements. The
FT A expressed favorable comments in its initial review of the project and indicated the City
would need to place emphasis on the transit elements of the project, focusing on their
location, cost and use, and transit user profiles to determine the project's eligibility for FTA
funding. Additionally, the parties would need to explore to what degree the Federal funding
restrictions apply to the privately funded, non-transit portion of the project.
Furthermore, the FTA funding has an extensive community and stakeholder participation
process, culminating in the mandatory submittal of an Environmental Assessment (EA)
Report identifying potential social, economic or environmental impacts that may arise as a
result of the project, and measures to mitigate these potential impacts. It is anticipated that
this process will span a 3-4 month period.
To address the FTA issues, it was deemed to be in the parties' mutual best interest to
commence and conduct the required FTA Environmental Assessment (EA). On May 26,
2004 the Mayor and City Commission passed Resolution No. 2004-25574 to establish an
RFQ for the professional architectural and engineering services related to the preparation
of the Environmental Assessment report, as required by the Federal Transit Administration.
RFQ 38-03/04 was issued on July 30, 2004. Only one response was received and the
Evaluation Committee met on October 26, 2004 and recommended rejecting all bids and
re-advertising a new RFQ. The new RFQ received three proposals. On January 26, 2005
the Evaluation Committee reviewed the new responses and ranked the firm of HDR
Engineering first, URS Corporation second and Geotech Environmental third. On April 20,
2005, subsequent to approval of the Development Agreement at First Reading, the City
Commission authorized the administration to proceed with negotiations with the top ranked
firm.
FT A eligibility will be determined as a joint development project and must reflect the project
as a transit oriented development. As part of the City improvements, in addition to the
City's park and ride spaces, certain transit elements will be incorporated, owned and paid
for by the City, including items such as transit station pedestrian connections and access
links between transit services and the project (Le. expanded right of way area fronting
Alton, 6th Street and 5th Street), safety and security equipment, vertical access links (Le.
elevators and ramps), transit information center, signage, etc.
While the City has incorporated the aforementioned transit elements, FT A will review the
Agreement and assess the City's control and availability of the transit facility to render an
eligibility decision. The Development Agreement, on file in the City Clerk's Office, reflects
the Developer's required restrictions on the use of the garage to assure sufficient parking
for the retail area. As such, FTA will scrutinize the ultimate control and availability of
May 18, 2005
City Commission Memorandum
Potamkin/Berkowitz - Development Agreement
Page 5 of 19
parking for transit users to determine eligibility for federal funding. With the additional
language incorporated by the Developer, FTA funding eligibility may be limited.
Since the outcome of the FT A funding eligibility will not be confirmed until sometime in the
future, the Developer faced timing constraints to determine whether or not to proceed with
the City, or independently, in the proposed joint venture. The Finance and Citywide
Projects Committee recommended that the City should commit to proceed with the project
irrespective of FTA funding eligibility. In other words, if FTA deems the project is not
wholly or in part eligible, the City will be committing non FT A funding, preferably
South Pointe RDA funds, in order to guarantee the City's participation in the project
from the onset.
We have attempted to incorporate language expressing the intent of the parties to provide
public transit parking, to mitigate any such FT A scrutiny. However, by the mere inclusion of
any use restrictions, as required by Developer, full FT A funding eligibility for this project can
no longer be assured. Therefore, the Agreement reflects, the City's commitment to
proceed with the project, regardless of award of FTA funding for the City's capital
participation.
CONSTRUCTION COST ESTIMATES
As to the rising cost of construction, on August 25, 2004 and September 14, 2004, the
Developer submitted a take-off analysis of the estimated construction cost of the parking
component of the proposed project, which was prepared by the Developer's consultant
Moss and Associates. The Developer also conducted an area analysis and calculated a
percentage cost per square foot, which yielded a higher value for the garage. The
Developer's analysis reflected a revised construction cost estimate of $20,741/per space
(based on percentage allocation) and $18,025/per space based on the Moss Take-off
analysis.
The City had previously negotiated a $14,500/per space cost contribution to the project,
which represented a $7,250,000 capital contribution based on 500 spaces. The new cost
estimates submitted by the Developer represent an over 24-43% increase in the City
anticipated contribution to the project.
As a result, these findings were reported informally to the Finance and Citywide Projects
Committee on September 15, 2004 and the Committee concurred with the Administration's
recommendation to engage the City's own consultant to review and analyze the newly
submitted construction costs estimates.
The City engaged URS Corporation to review and perform an independent analysis of the
Moss and Associates Take-off analysis and of the construction costs submitted. As a
result, URS submitted revised construction cost estimates and reallocations, as deemed
necessary, and URS determined the per-space cost, without any alteration to the proposed
project design, would be approximately $16,262/per space.
May 18, 2005
City Commission Memorandum
Potamkin/Berkowitz - Development Agreement
Page 6 of 19
On October 15, 2004, the City and the Developer met to review the revised construction
cost estimates and URS' findings. At this meeting, the parties agreed that based on URS'
revised estimate of $16,262/per space and the increased number of spaces in the project
(i.e. 1070 total spaces at the time of proposal; City allocation is 50%, or 535 spaces), the
City's capital contribution to the project would be as follows:
Developer Request
$8,700,170
395,327
333,333
$9,428,830
$9,500,000
535 spaces @ $16,262/per space
Additional Transit Components
(elevator pit and shaft to Alton Road and Bus Stop)
Lost Value
(due to City requested set back on Alton representing loss of 1,000sf)
TOTAL
The Finance and Citywide Projects Committee discussed the reality of rising construction
costs and felt it was appropriate to modify the City's capital cost contribution accordingly,
due to the Developer's guarantee to assume any construction cost overruns. The rise in
costs is mitigated by the Developer's guarantee to assume the construction risk associated
with any future cost increases or construction change orders not dictated by the City and/or
any FT A requirement.
Based on the revised construction cost estimates and Developer guarantee, the Finance
and Citywide Projects Committee agreed to commit to the revised City capital contribution
to the project of $9,500,000 as cited above, which in turn results in a per-space cost of
$16,395.
FundinQ for Park and Ride Transit Facilitv:
As described above, the City has negotiated to contribute $16,395/space within the garage
(i.e. also referred to as Transit Facility). It is anticipated that the Transit Facility will contain
approximately 1081 spaces within which the City will own 535 spaces to serve the public
transit uses and supermarket, and Developer will own 546 spaces serve the retail and
supermarket uses. Additionally, the City will fund an additional amount and own the transit
elements referenced above.
Funding for the City's Transit Facility Contribution will be provided by available FTA
funding, to the extent eligible ($6,475,000 available and an additional $1.38 million
awarded in 2005) and/or South Pointe RDA funds. FT A funding requires a minimum 20%
match by the City, for the FTA approved components, if any.
Floor Area Ratio (FAR) and Required ParkinQ
As reported on March 17, 2004, a prior review of the Developer's architectural schematics
indicated that a portion of the excess public parking might result in the project exceeding
the permissible FAR of 2.0. Further plan revisions have resulted in a zoning compliant
project and an increase in the number of City spaces. A provision in the Development
May 18,2005
City Commission Memorandum
Potamkin/Berkowitz - Development Agreement
Page 7 of 19
Agreement has been negotiated giving the City a fixed number of spaces (535 spaces as
described below) to purchase within the project, subject to finalizing the ultimate project
uses. A potential issue that arose immediately prior to First Reading that is addressed in
the Agreement is how to address the required parking in the event that a restaurant (or
other more intensive use) locates in the Project. It has been provided for in the current
Agreement by allowing for joint-ownership of approximately fourteen (14) of the City's 535
spaces. This would happen only in the situation where a more intensive use enters the
project, and only for the purpose of meeting the code required spaces. If this situation
does not materialize, then the spaces are owned solely by the City. The Developer has
agreed to be responsible for any tax implications that Joint Ownership may cause.
Additionally, the Developer has agreed that a restaurant would not be permitted to validate
parking. The Agreement also provides for the Developer to retain a priority right to
purchase up to 150 additional spaces on a monthly basis to meet operational
parking deficiencies from the City's Excess Parking inventory. Again, this clause
may reduce or limit FTA funding eligibility.
Ownership Retail Required Supermarket Excess Parking Total
Parking Required Parking
Developer 468 78 0 546
City 0 97 424 521
Joint 14 0 0 14
Total 482 175 424 1081
Park and Ride Transit Facilitv Operations and Management:
The Park and Ride Transit Facility will be operated and maintained through the joint efforts
of the City and the Developer. The City will provide the operating personnel for the Transit
Facility through its contract for attendants and cashiers. The Developer will provide for the
acquisition and coordination of all maintenance and other operating services.
It is expected that revenues will be generated through the use of the Transit Facility by the
public, both hourly and on a permit basis, as well as from customers of the retail spaces.
Additionally, the Developer will make an annual contribution to revenue of approximately
$290,000 to offset the retail validation program (# of spaces x 12 months x $55 per month).
This amount will escalate at an annual rate of 2.5% beginning after the third year of
operation. It is anticipated that additional revenues may be earned through the use of the
facility, by the public, decal parkers, valet operators in the evening after retail operating
hours, or parking for special events, during peak nighttime hours. A Pro Forma prepared by
the Parking Department is included as Attachment "B" to this memorandum.
The Pro Forma prepared by the Parking Department indicates that the Garage operation is
projected to require operating subsidies in its first few years. The Pro Forma is based on a
reasonable analysis of the information available to us presently and assumes a similar rate
structure and usage pattern to other system facilities. As has been discussed with the
Developer, there may be alternate rate structures and operating methods that may produce
a different result as more experience is gained with this specific facility and operating
relationship with the Developer. While early pro forma analysis may predict revenue
May 18, 2005
City Commission Memorandum
Potamkin/Berkowitz - Development Agreement
Page 8 of 19
shortfalls, a long-term parking shortfall and increased demand in the South Beach and
South of Fifth areas is expected.
It is both parties' intent to make maximum and efficient use of the structure. As this facility
has very complicated operational characteristics and it has a unique location to best serve
as a potential park and ride facility at the entrance to the City, we will need to monitor the
operations and revenue and expenses closely, and routinely make the appropriate
modifications to the operations and rate structure.
The annual operating expenses of the garage (381 ,886s.f.) will be shared by the Developer
and the City. The portion of expenses for the operation and maintenance of the retail
common areas (29,611 s.f.) will be paid solely by the Developer. Net revenues will be
shared on a pro-rata basis based on the ownership of spaces (City 49.5%/Developer
50.5%). Should the Transit Facility operating expenses exceed the total revenues earned
from all parking spaces, including the annual contribution towards revenue from the
Developer, the resulting loss will also be shared on a pro-rata basis based on the
ownership of spaces.
Art in Public Places
Related to the Development Agreement, is the required contribution from the Project to Art
in Public Places (AiPP). The present AiPP Ordinance requires all City projects to make a
financial contribution to support ongoing and future operations and acquisitions of the
City's AiPP program. The most common application for the Ordinance has been to City
projects that are City-owned and constructed, however, the Ordinance also pertains to
Capital Construction Projects where the City is a partner, therefore this project falls under
the Ordinance. This project is the first instance where a public/private joint development will
come under the AiPP Ordinance, which was revised in 2001 to include such agreements.
At the time of the revision, it was contemplated that those projects where the City was the
landowner, such as Lincoln Place and The Lincoln, would be affected. In this instance,
however, the City is not, and will not be the landowner. The City is essentially acquiring an
interest in certain elements of the project through a condominium instrument.
The Developer has requested a waiver of the AiPP obligation pursuant to the provisions of
the Ordinance. A decision will need to be made as to whether or not to waive the Project's
AiPP contribution. The Developer has continually maintained that he will not entertain
funding any portion of the AiPP fee, if a waiver is not granted. In consideration of this
request for waiver, the Developer is committing to install a major piece of art at the
entrance of the project (as depicted in the Project Concept Plan) by local artist Romero
Britto, which the Developer has valued at $500,000. Furthermore, Mr. and Mrs. Alan
Potamkin have represented that they have promised gifts to the Bass Museum with a
declared value of $600,000, and Developer has requested these donated works be
considered as part of the waiver request. The estimated AIPP contribution would have
been approximately $490,000, based on an estimated $32,000,000 project cost. If the
Project were developed without public participation, no Art in Public Places contribution
would be required.
May 18, 2005
City Commission Memorandum
Potamkin/Berkowitz - Development Agreement
Page 9 of 19
As referenced in the Development Agreement and above, the City has advised that the
proposed project constitutes a public joint development, and that the AIPP 1 %% will apply
to the Project construction cost. If the AIPP is not waived, according to the Developer, it
will render this transaction economically infeasible and he has stated that he will not
contribute to the fee.
On January 18, 2005, the Developer made a presentation to the AiPP Committee, which
adopted a motion approving the waiver conditioned upon the Developer working with the
AiPP Committee to select the appropriate artist and location of artwork. On February 4,
2005, the Cultural Arts Council approved a motion requesting that the AiPP Committee
reconsider their recommendation to waive the 1.5% AiPP requirement for this project, and
further that CAC representatives attend the AiPP Committee's reconsideration. The motion
further stated that the Cultural Arts Council opposed waiving the AiPP requirement. This
issue was discussed at the'February 14, 2005 Finance and Citywide Projects Committee
meeting; however, following the Finance and Citywide Projects Committee meeting, the
AiPP Committee reconsidered this item on February 15, 2005, pursuant to the request of
the Cultural Arts Council, and voted to recommend denial of the waiver and further moved
to ask the City Commission to direct the Developer to work with the AiPP Board to select
the appropriate artist and location of artwork. The Committee was concerned that the
purpose of the revisions to the Ordinance was to build the AiPP fund, and that this request
would set a precedent for future requests that would be contrary to the original intent of the
revisions. The Developer expressed his intent, as reflected in the attached agreement, to
proceed with the Britto artwork and waiver request despite AiPP's motions.
On April 20, 2005, the Mayor and City Commission heard and considered testimony related
to the requested waiver of the Art in Public Places contribution during the public hearing for
the first reading of the Development Agreement. As part of the resolution approving the
Development Agreement on first reading, the Mayor and City Commission directed the
Administration to prepare a resolution waiving the AiPP contribution to be considered
concurrent with the second reading of the Development Agreement. A resolution
approving the AiPP waiver is a companion item on this agenda and is offered for the
Commission's consideration.
Development Agreement and Declaration of Condominium
The attached Development Agreement sets forth the parameters and terms and conditions
pursuant to which the Developer will proceed with construction of the Project and the City
will provide capital contributions. The Declaration of Condominium reflects the terms under
which the parties will operate upon completion of the project.
The salient terms of the Development Agreement and the Declaration of Condominium (the
"Declaration") negotiated between the parties are summarized below. Specific issues
concerning this transaction are elaborated on below, due to the complex nature of the
relevant agreements, and to highlight areas of importance to the City Commission.
May 18,2005
City Commission Memorandum
Potamkin/Berkowitz - Development Agreement
Page 10 of 19
The important milestones and aspects in the Development Agreement include:
. Developer
AR&J SOBE, LLC
(Limited Liability Company comprised of Jeff Berkowitz,
Alan Potamkin and Robert Potamkin)
. City Unit
City Spaces (including City Supermarket Spaces and City
Non-Supermarket Spaces, City Elevator, City Common
Area and City Transit Dedication Area).
. Developer Unit
Developer spaces (including Developer Retail Spaces
and Developer Supermarket Spaces), Retail Area and
Developer common areas.
. Project Concept Plan
The project as currently approved by DRB/HPB contains
approximately, 179,000 square feet of retail area; a
supermarket; an approximately 1081 space parking
garage; park-and-ride transit facility, including an
intermodall transportation component; and surrounding
streetscape and public infrastructure to serve the project,
bounded by Lenox Avenue on the east, Alton Road on
the west, 6th Street on the north and 5th Street on the
south, in Miami Beach.
· Effective Date
Date Development Agreement is approved and signed.
. Outside Date
Earlier of 18 months from Effective Date or
Commencement of Construction.
. Building Permit Application
32 weeks from approval of Development
Agreement/Effective Date.
· Construction Commencement
No later than 60 days from issuance of building permit or
18 months from Effective Date.
· Construction Completion
Earlier of 24 months following Construction
Commencement date or March 1, 2008, subject to
unavoidable delays. *
· Termination Rights
(Prior to Construction Commencement)
No later than 18 months from Effective Date, Developer
can terminate Agreement if for various reasons project,
as designed, is not viable.
City can terminate if Developer has not obtained building
permit or commenced construction before September 1 ,
2006. However, once Developer has provided
*
Date modified since First Reading due to the time that has passed since the former date was
agreed upon.
May 18, 2005
City Commission Memorandum
Potamkin/Berkowitz - Development Agreement
Page 11 of 19
Construction Application Notice (i.e. Developer's notice of
procuring loan), City will have 45 days thereafter to
exercise such termination.
. AiPP
Developer is requesting a waiver of applicability of City's
AiPP Ordinance, as specified in the City Code 82-536
through 82-612. In consideration, the Developer is
proposing to provide an entryway art work by Romero
Britto valued by the Developer at $500,000 and additional
representation by Mr. and Mrs. Alan Potamkin that they
have promised gifts with a declared value of $600,000 to
the Bass Museum of Art. In accordance with the City's
AiPP Ordinance, the Developer presented their request
for waiver to the AiPP Board on January 18, 2005. The
AiPP Board recommended approval of the waiver
conditioned upon the Developer working with the Board to
identify an appropriate piece of artwork for this specific
site. On February 15, 2005, the AiPP Board reconsidered
the item and voted to recommend denial of the waiver.
The Developer has stated his intent is to proceed with the
Britto artwork despite AiPP's motion. (Section 5,1). On
April 20, 2005, the City Commission, as part of the
approval of the Development Agreement at First Reading,
directed the Administration to prepare a Resolution for
consideration at Second Reading to waive the AiPP fee.
. FT A Requirements
An ongoing issue between the City and Developer has
been compliance with and determination of eligibility by
FT A. On October 26, 2004, one of the key provisions
addressed by the Finance and Citywide Projects
Committee was whether the City will proceed with the
project irrespective of FTA funding eligibility. Therefore,
the Agreement provides that City and Developer will
cooperate to apply and comply with FTA requirements.
However, the City's obligation to proceed with this
Agreement is no longer contingent upon approval by
FTA. Therefore, City shall be obligated to commit
alternate funds to project (tentatively contemplated to
be South Pointe RDA funds).
. Construction Staging
Staging for the project will be confined to project site and
construction workers will park off-site to minimize adverse
impacts on neighboring residential areas.
. Alley Vacation
Alley Vacation was approved by the City Commission on
February 23, 2005, subject to a reverter in the earlier
event that construction does not commence and/or if a
supermarket Lease is not secured and a restrictive
covenant memorializing same will be recorded by
Developer. If City terminates Development Agreement or
decides not to proceed with project, but Developer
proceeds with substantially the same project, Alley
May 18, 2005
City Commission Memorandum
Potamkin/Berkowitz - Development Agreement
Page 12 of 19
Vacation will still be effective in exchange for Public
Benefits.
. City's Obligation to Fund
During construction, even if Developer defaults, City is
committed to fund project so long as the lender is
funding. In the event offoreclosure, lender is obligated to
repay City full capital contribution and a return of 4%.
. Condominium
City cover the majority of costs of establishing the project
as a condominium in order to ensure City units may be
tax exempt. Costs of establishing condo are estimated at
total of $30K and documentary stamp costs to be incurred
at time of conveyance of City units are estimated at total
of $90K.
. Public Benefits
As specified in the Alley Vacation Agreement, Developer
agrees to include a grocery store with not less than
40,000 sf with a minimum term of 10 years, which will
obligate tenant to initially open for business. If grocery
ceases to operate, Developer shall use diligent and good
faith efforts to pursue a new lease with a new grocery
store and if Developer is unsuccessful, City shall at its
option be entitled to locate another grocery tenant subject
to same terms and conditions. This provision shall
terminate upon expiration of grocery lease but not earlier
than 10 years. However, if the initial grocery store fails
prior to the end of the 10 year period and the City is
successful in attracting a grocery store to occupy the
space, the Developer has agreed to honor a lease
requirement by the grocery that extends beyond the initial
10 year term.
. Developer Default during
Construction
If Developer defaults during construction, City's remedies
are: 1) enforce specific performance by Developer, 2)
recover damages equal to City's Capital Contribution
together with interest.
. City's Transit Facility Contribution
City shall fund a fixed cost of $16,395.03 per parking
spaces for 535 parking spaces ("City Spaces") plus an
additional amount of $395,327 for the City Elevator and
"Transit Facility Dedication Area Finishes" (a not to
exceed 20% contingency is factored into the
Agreement Definition) plus $333,333 for the "Transit
Facility Dedication Area", for a total City contribution of
$9,500,000. The Developer has assumed all construction
risk and is responsible for any cost overruns in
connection with the project.
Important to note, the City will fund construction
draws concurrent with Developer's lender
Disbursements. The City will have a guarantee from
Developer and Owner to complete construction,
May 18, 2005
City Commission Memorandum
Potamkin/Berkowitz - Development Agreement
Page 13 of 19
however City will not have a lien or security interest
in Project until substantial completion is achieved, at
which time Developer will convey City spaces, City
Elevator and Transit Facility Dedication Area to City.
. Construction Guarantee
Alan Potamkin, Robert Potamkin and Jeffrey Berkowitz
jointly and severally, will guarantee Developer's
performance as provided for in the Development
Agreement.
. Hazardous Materials
City assumes no liability or obligation pursuant to the
Brownfield Site Rehabilitation Agreement. Additionally,
City assumes no liability for any environmental
contamination associated with the construction of the
Project. Liability will only be applied prospectively based
on respective parties responsibility.
The important milestones and aspects in the Declaration of Condominium include:
. Condominium Declaration
The Declaration sets forth the intention and
understanding of the parties relative to the future
operation of the Garage ("the Transit Facility").
City and Developer agree Garage will be available for
public parking purposes, subject to Developer's rights to
reserve and/or limit access to Developer Spaces.
. Operation, Maintenance, Repair
& Replacement
o City will operate Garage and Developer will maintain
Garage in first class condition.
o City shall initially purchase and install all parking
equipment (estimated cost $646,466 not including
security cameras, monitors and recorders) and
Developer will reimburse City half of the initial cost,
amortized over 10 years utilizing the 10 year T -bill rate,
on annual basis over 10 year period.
o Parking in Garage will be a) validated parking (limited to
2 hours), b) decal/access card parking for retail space
employees, c) decal access card parking for transit
users and other third parties, d) special event permit
parking, and e) timed ticket parking.
o Parking rates will be established by mutual agreement,
on a sliding scale, to discourage long term parking.
· Full Occupancy
120 days after the earlier of a) one year after substantial
completion or b) 90% of the Retail Space is initially
occupied.
May 18, 2005
City Commission Memorandum
Potamkin/Berkowitz - Development Agreement
Page 14 of 19
. Public Passes
Upon Full Occupancy, parties will meet quarterly to
determine extent of decal/access cards to be provided
based on parking operation experience within Garage.
. Parking Garage Spaces
The Parking Garage will contain approximately 1081
spaces broken down as follows:
Developer
City
546 spaces
535 spaces
1,081 spaces
Developer
468 required spaces for retail
78 required Supermarket spaces
546 Developer spaces
City
438 excess spaces
97 required supermarket spaces
535 City spaces
. Required Parking Spaces
As described above, 643 spaces (Developer spaces and
City supermarket spaces) are code required parking for
the project, as currently contemplated. In the event that a
restaurant locates in the project, it is anticipated that the
Developer's parking requirement will increase by up to 14
spaces. The parties have agreed to Joint Ownership of
these spaces for the purposes of meeting the Code.
Developer
Joint
City
546 spaces
14 spaces
521 spaces
1 081 spaces
The Declaration provides the Developer with a priority
right to purchase 150 additional Public Passes (Le.
excess spaces) to satisfy operational needs, at a cost of
$55/month, subject to a 2.5% annual adjustment
commencing following the third anniversary of Full
Occupancy.
. Validated Parking
Customers, employees and occupants of retail space
shall be entitled to park in Garage free of charge.
Customers will be limited to a two (2) hour validation
period. Any restaurant will not be permitted to provide
validation to its customers.
The Developer will contribute approximately
$290,OOO/annually (approximately $55/space per month
for retail required spaces), subject to a 2.5% annual
adjustment commencing following the third anniversary of
Full Occupancy in consideration for such use and
validation.
May 18, 2005
City Commission Memorandum
Potamkin/Berkowitz - Development Agreement
Page 15 of 19
. Garage Management & Operation
. Termination Rights
(After Construction Completion)
. Parking Deficiency
· Fair Market Value (FMV)
· Revenues/Expenses of Garage
City and its subcontractors will manage and operate
garage and City cannot delegate this responsibility to
another third party unless said third party operates more
than % of the City garages.
The Agreement also provides the Developer with a Right
of Termination Post Construction. This Right is contained
in Section 4{c){viii) of the Exhibit E, Material Provision of
Declaration (Page 84 of the attached Development
Agreement). During the first 18 months after Full
Occupancy, the Developer has the right to terminate the
Agreement at his sole discretion and for any reason that
the Developer determines is reasonable. Following 18
months, the Developer retains the Right to Terminate the
Agreement at his sole discretion, but must follow a
specific series of steps aimed at resolving any issues
causing the Developer to want to terminate the
Agreement. In the end, however, the Developer retains
the sole right to determine that the relationship is not
working and to terminate the Agreement.
In the event of termination under this Section, the City will
receive its contribution plus four percent (4%) annual
simple interest or the FMV of its portion of the project as
determined in the Agreement. A schedule showing this
payment is attached as Attachment A to the memo.
Retail customers are unable to find available parking
spaces and the parties are unable to resolve the
operational conflict.
The parties have agreed to a formula and process that
determines the Project's FMV. Essentially, the City's
contribution to the Project comes to fifty-six percent (56%)
of the cost of the Garage portion of the Project, including
land. In the event the Agreement is Terminated, the FMV
of the City's portion, or excess parking spaces, will be
determined by a specified appraisal procedure. This
"Market" value, as established by the appraisals, will then
be multiplied by 56% to determine the FMV due to the
City. The FMV formula is referred to in the "Termination
Rights", "Right of First Refusal", and "Condemnation"
Sections.
An allocation of operating expenses based on the parties'
proportionate ownership of Garage and the expense
allocation formula for garage vs. retail has been agreed to
by the parties.
Developer shall establish and submit an annual operating
budget 60 days prior to end of each calendar year,
subject to City's approval.
May 18, 2005
City Commission Memorandum
Potamkin/Berkowitz - Development Agreement
Page 16 of 19
. Taxes
. City Supermarket Spaces
(if supermarket ceases to exist)
. Insurance
. Condemnation
· Developer's Right of First Refusal
Developer shall pay all taxes on Developer Unit (including
Joint spaces, if applicable) and City will pay all taxes on
City Unit. Developer will cooperate with City to obtain
exemption from real estate taxes. If the City Unit or any
portion thereof is taxed, the City will be responsible for
said payment. It is anticipated that the City
supermarket spaces will be taxed, at the City's
expense.
Developer has agreed that if the supermarket would
cease to exist, Developer will pay taxes associated
with the required spaces for any alternate proposed
use in the supermarket retail area, unless the
exemption for the City's non-supermarket spaces is
eliminated.
City Supermarket Spaces will have a 10 year useful life.
If Supermarket ceases to exist prior to 10 years, and a
substitute supermarket cannot be located, then for
balance of the remaining 10 years, the LandlordlT enant
will be required to (1) pay the monthly $55/fee, as
adjusted by CPI, for the number of the parking spaces
required by Zoning, or (2) buy back spaces at City's cost
plus a return equal to the City's actual earnings over the
period of time remaining in the 10 years. (e.g. If the
supermarket ceases in the 6th year and can not be
replaced, and option #2 is exercised, the Developer
would utilize the CMS's average yield for the 1 st 6 years
(say 6%) and apply it to the last 4 years of the useful life.
Example-CMS Cost plus (6% times 4). After the 10 year
useful life has expired, if the supermarket use ceases and
is not replaced, there are no further obligations on
Developer's part to replace/or to pay for the replacement
user's code required parking.
Developer will procure insurance and City will share cost
of insurance to the facility.
City shall not be entitled to share in any portion of
Condemnation Award, except to the extent of the Fair
Market Value (FMV) calculation, as defined above, but
not less than the City's Capital Investment. The City does
have the right to be present during condemnation
proceedings and the right to discuss such with the
Developer.
City shall offer Developer Right of First Refusal at the
greater of 1) the value of the arms length offer multiplied
by the FMV fraction or 2) City's Transit Facility
Contribution plus 4% return or 3) FMV, as defined above.
May 18, 2005
City Commission Memorandum
Potamkin/Berkowitz - Development Agreement
Page 17 of 19
The Right of First Refusal shall not apply to any
conveyance by the City to a successor governmental
authority.
. City's Right of First Offer
In the event Developer sells property, City shall have 10
business days to elect in writing whether to pursue
transaction, and an additional 30 days to negotiate terms.
Termination RiQhts
Due to the complex nature ofthis transaction, the Agreement includes an initial termination
date, in which either party may terminate the Development Agreement. This specific
Termination Rights are addressed in Articles 2.11 and 2.12 of the Agreement and pertain
generally to "pre-construction" issues that arise between the execution of the Development
Agreement and the Commencement of Construction. Qualifying events generally relate to
economic viability of the project for the Developer, and issues regarding Public Purpose for
the City.
The Agreement also provides the Developer with a Right of Termination Post Construction.
This Right is contained in Section 4(c)(viii) of the Exhibit E, Material Provision of
Declaration (page 84 of the Development Agreement). During the first 18 months after Full
Occupancy, the Developer has the right to terminate the Agreement at his sole discretion
and for any reason that the Developer determines is reasonable. Following 18 months, the
Developer retains the Right to Terminate the Agreement at his sole discretion, but must
follow a specific series of steps aimed at resolving any issues causing the Developer to
want to terminate the Agreement. These include meetings to discuss operational
alternatives, which may include limited ticket parking, increased timed ticket parking rates,
and a reduced number of public passes. In the end, however, the Developer retains the
sole right to determine that the relationship is not working and to terminate the Agreement,
but not before all other options have been attempted, including the developers leasing of
150 public passes for a minimum of 30 days.
The parties have agreed to a formula and process that determines the Project's Fair
Market Value (FMV). Essentially, the City's contribution to the Project comes to fifty-six
percent (56%) of the cost ofthe Garage portion of the Project, including land. In the event
the Agreement is Terminated, the FMV ofthe City's portion, or excess parking spaces, will
be determined by a specified appraisal procedure. This "Market" value, as established by
the appraisals, will then be multiplied by 56% to determine the FMV due to the City. The
FMV formula is referred to in the "Termination Rights", "Right of First Refusal", and
"Condemnation" Sections.
In the event of termination under this Section, the City will receive its contribution plus four
percent (4%) annual simple interest or the Fair Market Value of its portion of the project as
determined in the Agreement. A schedule showing this payment is attached as
Attachment "C" to the memo. This schedule demonstrates how the City's discount (the
portion of value attributable to land) was calculated. Thirty percent (30%) of the project's
Floor Area Ration (FAR) is surplus parking, therefore, 30% was applied to the land value.
May 18, 2005
City Commission Memorandum
Potamkin/Berkowitz - Development Agreement
Page 18 of 19
This value was then applied on a per space basis, resulting in a land value per space of
$11,413, and a total per space value of $29,238. Therefore, the City's is contributing 56%
of the total value (cost) per space. Add itionally, Attachment A shows the value of the City's
contribution per year per the "floor" of 4% simple interest and the corresponding per space
value for that year after factoring in the City's discount. The Administration has also
provided projected market value for an excess parking space, with 6% growth in the first
four years and 3% growth subsequently. Based on these estimates it is likely that in the
event of termination, the payment to the City will trigger the Fair Market Value calculation
rather than the floor of 4%.
PlanninQ Board - Conditional Use
The Potamkin site is 50 feet away from the RM-1 Residential District (600 Lenox) and 70
feet from a residential use (1050 6th Street) and therefore Section 130-69.5 of the City
Code will apply, requiring Conditional Use approval by the Planning Board to operate past
midnight. The City and Developer will jointly schedule a future item for consideration by
the Planning Board to address this issue, as it is contemplated that the Transit Facility will
be operational 24/7.
Sec. 130-69.5. Additional requirements.
In addition to any other requirements regarding parking garages and parking
lots contained herein, and except where a parking garage or lot is accessory
to a residential use and located on the same lot, all parking garages and lots
located within 100 feet of a residential use or district that intend to operate
after midnight, shall obtain conditional use approval from the planning board
before obtaining a building permit or occupational license.
Finance and Citywide Proiects Committee - February 14. 2005
On February 14, 2005, a Special Finance and Citywide Projects Committee meeting was
held to review the terms presented herein, the application for alley vacation and the
outstanding issues. The Committee recommended the parties proceed to finalize
negotiations. At this meeting, the Administration summarized the terms of the Agreement
and the Declaration of Condominium, and further discussed the request for the Art in
Public Places waiver. There were some concerns raised about the possibility that the
project may be deemed ineligible for FTA funding, and discussion of the potential use of
South Pointe RDA funds in that instance. Further discussion ensued regarding the
Developer's termination rights, including a discussion of the legal issues involved in using
public funds for the public purpose of building the proposed garage. There was sentiment
from the Committee that there was concern about the termination rights, but that overall
the project and Development Agreement appeared to be a "win-win" for both the Developer
and the City, given the value obtained in acquiring 535 City-owned public parking spaces
without land costs at the entrance to the City.
May 18, 2005
City Commission Memorandum
Potamkin/Berkowitz - Development Agreement
Page 19 of 19
CONCLUSION
Although this project is based on a complicated Development Agreement, there are many
compelling reasons supporting approval on first reading. The City has no land cost
associated with the construction of a park and ride facility at the entrance to the City, which
represents a discount of 44%, and risk is eliminated by the Developer's Guaranteed
Maximum Price. Also, the Developer is constructing the project, rather than the City, and
the City will operate the facility. The City expects to utilize a portion of Federal Transit
Administration funding that has been awarded to the City. This project will activate the
western end of Fifth Street, redevelop a designated brownfield, create over 500 jobs, and
attract retail stores that do not currently exist in Miami Beach, as well as secure a five-year
community request through the establishment of a supermarket in that neighborhood.
Ultimately, the City will have a facility that accomplishes the items previously listed, with a
risk-free investment with secured delivery of the project. If at some point in the future the
Developer exercises his termination rights, the end result will be the return of the City's
investment plus a minimum of 4% interest, a more likely return based on fair market value,
and the facility and the majority of the identified benefits will still be in place.
Therefore, in accordance with the requirements of Sections 163.3220 - 163.3243, Florida
Statutes, also referred to as the Florida Local Government Development Agreement Act, it
is recommended that the Mayor and City Commission approve at the second of two duly
noticed Public Hearings, a Development Agreement between the City of Miami Beach and
AR&J Sobe, LLC (A1K1A Potamkin/Berkowitz) for the Development ofthe Project, presently
referred to as "5th and Alton", containing approximately 179,000 square feet of retail area,
a supermarket; an approximate 1081 space parking garage; park-and-ride transit facility,
including an intermodal/transportation component, and surrounding streetscape and public
infrastructure to serve the project, bounded by Lenox Avenue on East, Alton Road on
West, 6th Street on North and 5th Street on the South, in Miami Beach.
JMGITH/KC/rar
T:\AGENDA\2005\May1605\Regular\Potamkin, MEM,doc
Attachments: A - Resolution No. 2005-25827
B - Pro Forma
C - Fair Market Value
D - Development Agreement - Under Separate Cover
Attachment '''A'',
RESOLUTION NO. 2005-25827
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, FOLLOWING A DULY NOTICED PUBLIC HEARING
TO HEAR PUBLIC COMMENT ON SAME, APPROVING AND AUTHORIZING THE
VACATION OF AN ALLEY, CONTAINING APPROXIMATELY 7,800 SQUARE FEET
AND LOCATED ADJACENT TO THE PROPOSED AR & J SOBE, LLC (AlKJA
POTAMKINIBERKOWlTZ) PROJECT AT 5TH STREET AND ALTON ROAD, IN
, FAVOR OF THE APPUCANT (AND DEVELOPER OF THE PROJECT), AR & J
SOBE, LLC; WAIVING, BY snms VOTE, THE COMPETITIVE BIDDING AND
APPRAISAL REQUIREMENTS, PURSUANT TO ARTICLE II, SECTION 82-36
THROUGH 82-40 OF THE MIAMI BEACH CITY CODE, FINDING SUCH WAIVER
TO BE IN THE BEST INTEREST OF THE CITY; PROVIDED FURTHER THAT THE
CITY'S APPROVAL OF THE AFORESTATED VACATION IS SUBJECT TO AND
CONTINGENT UPON AR & J SOBE, LLC'S SATISFACTION OF THE CONDmONS
SET FORTH IN THIS RESOLUTION, AND COMPLIANCE WITH THE TERMS AND
CONDmONS OF THE A'ITACHED VACATION AGREEMENT; AUTHORIZING
THE MAYOR AND CITY CLERK TO EXECUTE THE ATIACBED VACATION
AGREEMENT AND ANY AND ALL DOCUMENTS TO EFFEcruATE THE
VACATION, INCLUDING A QUITCLAIM DEED, SUBJECT TO FINAL REVIEW OF
SAME BY THE CITY ATTORNEY'S OFFICE.
WHEREAS, on June 7, 2000, the Mayor and City Commission adopted Resolution No. 2000-
23963, designating the area bounded by 6th Street to the North, Sib Street to the South, Alton Road to the
West, and Lenox Avenue to the East, as a Brownfield area to promote the environmental restoration and
economic redevelopment of the area; and
WHEREAS, since July 2002, the Administration has been meeting with representatives of the site
generally located on 5111 Street and Alton Road, owned by the Potamkin family, to address a joint
development opportunity and to review a preliminary site plan for a five (5) level mixed-use retail
complex, including approximately 1081 parking spaces and a supermarket (the Project); and
WHEREAS, in accordance with the City Commission's directive and the community's identified
needs, the City's interest in the l>roject development is primarily focused on achieving the respective
public benefits of locating a supermarket, exploring transit and excess parking opportwlities, and
developing a gateway project, at one of the City's main arterial entryways; and
WHEREAS, over the past two (2) years, the proposed Project has been reviewed on several
occasions by various City Committees including Finance & Citywide Projects Committee, Transportation
and Parking Committee, Design Review Board, and Historic Preservation Board; and
WHEREAS, the City is the holder of a public right-of-way easement and an alley adjacent to the
Project, containing approximately 7,800 square feet (the Alley); and
WHEREAS, in consideration of the public benefits being provided by Developer in the Project,
the Developer has made a request and submitted an application, in accordance with the City's Guidelines
for Vacation or Abandonment of Streets or Other Rights of Way, and pursuant to Section 82-36 through
82-40 of the City Code (Ordinance No. 92-2783), for vacation of the Alley; and
. WHEREAS, purs~t to Resolution No. 2005-25805, and as required by Section 82-37 of the
CIty Cod~, the Mayor and <?lty Commission held a duly noticed public hearing on February 23, 2005, to
hear pubhc comment reganimg the proposed Alley vacation; and
WHEREAS, additionally, as required by Section 82-38 of the City Code, a Planning Department
Analysis has been prepared with regard to the proposed Alley vacation; said analysis is attached and
incorporated as Exhibit "A" to this Resolution; and
WHEREAS, the Administration would recommend that the Mayor and City Commission
approve the requested Alley vacation in favor of the Developer, AR & J SOBE, LLC, subject to and
contingent upon the Developer's satisfaction of the following conditions:
1)
AR & J SOBE, LLC's full compliance with the tenDs and conditions of the Vacation
Agreement, by and between the City and AR & J SOBE, attached and incorporated as
Exhibit "B" hereto;
Irt addition to AR & J SOBE's compliance with the terms and conditions of the attached
Vacation Agreement, that the proposed Alley Vacation be subject to the following
possible reverter and/or reconveyance provisions:
(i) In the event Developer does not enter into a supermarket lease (as defined
in the attached Vacation Agreement) on or before eighteen (18) months
after the Effective Date of the Vacation Agreement or Commencement of
Construction, as defined therein, whichever comes rll'st;
(ii) Irt the event Developer does not Commence Construction of the Project on
or before September 1, 2006, subject to extension for Unavoidable
Delays;
(iii) In the event the Project is substantially modified from the Project
approved by the Historic Preservation Board and Design Review Board,
as referenced in the respective Board Orders issued in August 2004
(interior rcconfigmations to change, or reduce parking areas and/or
add/reconfigure leaseable space shall not be deemed a modification of the
Project approved as aforestated, except where any such interior
reconfigurations (i) may result in a change to the Project Floor Area Ratio
(F.A.R.) beyond that which is permitted as of the Effective Date of the
Vacation Agreement, and/or (ii) may result in a modification to the
Project exterior fa9adelelevations from those approved in the attached
August 2004 Board orders);
(iv) Provided City has timely exercised its option to purchase same, in the
event that Developer does not dedicate and convey the Transit Facility
Dedication Area to the City on or before the Commencement of
Construction.
2)
The City shall not be obligated to fund any costs of Developer's Project
construction costs (hard and/or soft costs) except if it elects to acquire the
Transit Facility Dedication Area and have Developer install the Transit
Facility Dedication Area Finishes (as defined in the Vacation Agreement)
and/or Elevator, as provided in the Vacation Agreement. In the event that
the cost of construction of the Transit Facility Dedication Area, Transit
Facility' Dedication Area Finishes, and (should the City so opt) the
Elevator exceed the City's contribution(s) for same, as set forth in this
Vacation Agreement, Developer shall be solely responsible for payment
of, and shall pay, all excess costs.
The amount to be paid by City at the time of dedication shall be the
maximum amount that Developer could be entitled to, but Developer
shall, within thirty (30) days after Substantial Completion of the Project,
provide to City a reconciliation of the actual hard and soft costs of the
Transit Facility Dedication Area Finishes and Elevator and a check for
any refund owed to City on account thereof.
The City shall fund its contribution to the Transit Facility Dedication
Area, Transit Facility Dedication Finishes, and (should it so opt) the
Elevator at the time of the dedication and conveyance of the Transit
Facility Dedication Area to the City, which will take place no later than
the Commencement of Construction of the Project and the issuance by the
City Manager of the recordable instrument(s) stating that the Conditions
provided for in Paragraph 4 of the Vacation Agreement have occurred,
such that no further reversion of the Alley to the City is possible; and
WHEREAS, the City's Public Works Department has received and reviewed the Developer's
application for vacation of the Alley, and has determined that the Developer has complied with the
submission requirements therein; and
WHEREAS, additionally, as permitted by Section 82-39 of the City Code, the Administration
would recommend that the Mayor and City Commission waive, by Snths vote, the competitive bidding
and appraisal requirements, finding that the public interest would be served by such waiver.
NOW, THEREFORE, BE IT DULY USOLVED BY THE, MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission, following a duly noticed public hearing to hear public comment on same, approve and
authorize the vacation of an Alley, containing approximately 7,800 square feet and located adjacent to the
proposed AR & J SOBE, LLC (aIkIa PotamkinlBerkowitz) Project at Sib Street and Alton Road, in favor of
the Applicant (and Developer of the Project), AR & J SOBE, U.C; waiving, by Snths vote, the
competitive bidding and appraisal requirements, pursuant to Article n, Section 82-36 through 82-40 of the
Miami Beach City Code, finding such waiver to be in the best interest of the City; provided further that the
City's approval of the aforestated Alley vacation is subject to and contingent upon AR & J SOBE, LLC's
satisfaction of the conditions set forth in this Resolution, and compliance with the terms and conditions of
the attached Vacation Agreement; authorizing the Mayor and City Clerk to execute the attached Vacation
Agreement and any and all documents to effectuate the Alley vacation, including a quit claim deed, subject
to final review of same by the City Attorney's office. ,
PASSED and ADOPTED this
23rd day of February, 200S
L
ATTEST:
~1fW r(u,~
CITY CLERK
F:\ano\AGUR\RESOS-ORD\Sth and Alton (potamkin) Vacation Rcso (Rmsed 2-22'()S),doc
APPROVED AS TO
FORM & LANGUAGE
& F R EXECUTION
4:4()~
Potamldn PlOtomla.AftachmentB.xJs
Attachment "8"
CITY OF MIAMI BEACH
PARKING DEPARTMENT
P&B OPERATING ASSUMPTlONS/COMPARISIONS
City's Developer'.
Share Share
49.5% 50.5%
REVENUE
TENANT CONTRIBUTION $ 290,000
TRANSIENT. 32 X 1,5 @ $1,00 X 365 $ 17,520
MONTHLY-138 x $60 x 12 $ 99,360
VALET -150 spaces x $45 x 12 (11p-7a) $ 181,000
VALIDATIONS
TOTAL REVENUE $ 587,880
EXPENSES
PAYROLL
PAYROLL TAXES
WORKERS COMP
HEAL THIWELFARE
UNIFORMS
PROF SVS
SUBTOTAL PARKING
A TT/SUPERVlSORS $ 280,525 $ 138,860 $ 141,665
TELEPHONE $ 3,000 $ 1 ,485 $ 1,515
UTILITIES/ELECTRICITY $ 45,600 $ 22,572 $ 23,028
R&M
MAl NT SALARIES $ . $ . $ -
JANITORIAL $ 60,000 $ 29,700 $ 30,300
LOT SWEEPING $ 18,000 $ 8,910 $ 9,090
LOT LIGHTING $ - $ .
ELEC REPAIRS $ 5.000 $ 2,475 $ 2,525
CLEANING SUPPLIES $ 5,000 $ 2,475 $ 2,525
HVAC MAINT/REP $ 4,500 $ 2,228 $ 2,273
SVS CONTRACTS
FIRE EXT $ 1,500 $ 743 $ 758
FIRE ALARM MONITORING $ 1,800 $ 891 $ 909
EMERGENCY GENERATOR $ 3,662 $ 1,813 $ 1,849
PRESSURE CLEANING $ - $ - $ -
EQUIPMENT RENTAL & REPAIRS $ - $ - $ -
LICENSE $ 400 $ 198 $ 202
TICKETS $ 8,000 $ 3,960 $ 4,040
SIGNAGE $ 1,000 $ 495 $ 505
COURIER SERVICE $ 6,716 $ 3,324 $ 3,392
PEST CONTROL $ 1,000 $ 495 $ 505
STORM WATER $ 4,600 $ 2,277 $ 2,323
WATER/SEWER $ 7,200 $ 3,564 $ 3,636
SECURITY $ 200.000 $ 99,000 $ 101,000
ELEVATOR MAl NT $ 3,000 $ 1,485 $ 1,515
FIRE SAFETY EQIP $ - $ - $ -
TRASH REMOVAL $ 3.500 $ , 1,733 $ 1,768
FIRE ALARM/SPR MONITORING $ 3,000 $ 1,485 $ 1,515
LIAB INS $ - $ - $ -
PRINTINGfTICKETS ETC, $ 8,000 $ 3,960 $ 4,040
MGT FEES $ 17 ,636 $ 8,730 $ 8,906
MARKETING $ 3,000 $ 1,485 $ 1,515
TOTAL EXPENSE $ 695,639 $ 344,342 $ 351,298
PROFIT/(LOSS) $ (107,759) $ (53,341) $ (54,418)
LOT LIGHTING INCLUDED IN UTILIllES
EQUIPMENT RENTAL & REPAIRS - N/A
MANAGEMENT FEE 3% OF GROSS
Attachment "C"
Column A Column B Column C
Fair Market Value Determination Total Space
Value must Projected Value.
$ 19,269,068 Cost for Entire Garage (Moss) CMB exceed this estimated market
$ 8,771,325 CMB Garage Contribution Base amount for FMV value for an excess
1,081 Total Parking Spaces Year Value to apply parking space
$ 17,825 Cost per Space 2005 $ 16,395 $ 29,2n
535 City Spaces 2006 $ 17,051 $ 30,448 $ 31,033
97 City Supermarket Spaces 2007 $ 17,707 $ 31,619 $ 32,895
438 Surplus Spaces 2008 $ 18,362 $ 32,790 $ 34,869
546 AR&J Spaces 2009 $ 19,018 $ 33,961 $ 36,961
2010 $ 19,674 $ 35,132 $ 38,070
248,842 Project FAR 2011 $ 20,330 $ 36,303 $ 39,212
74,653 Surplus Parking 2012 $ 20,986 $ 37,474 $ 40,389
30% Surplus Parking Share of FAR 2013 $ 21,641 $ 38,645 $ 41,600
2014 $ 22,297 $ 39,816 $ 42,848
2,67 Lot Size (Acres) 2015 $ 22,953 $ 40,988 $ 44,134
116,305 Lot Size (Sq Ft) 2016 $ 23,609 $ 42,159 $ 45,458
$ 175 Boymelgreen Comp Sale PSF 2017 $ 24,265 $ 43,330 $ 46,821
$ 20,353,375 Land Value 2018 $ 24,920 $ 44,501 $ 48,226
2019 $ 25,576 $ 45,672 $ 49,673
30% Surplus Parking Land Allocation 2020 $ 26,232 $ 46,843 $ 51,163
$ 6,106,013 Surplus Parking Land Value 2021 $ 26,888 $ 48,014 $ 52,698
$ 11,413 Land Value Per Space 2022 $ 27,544 $ 49,155 $ 54,279
2023 $ 28,199 $ 50,356 $ 55,907
2024 $ 28,855 $ 51,527 $ 57,584
$ 16,395 City Contribution per Space 2025 $ 29,511 $ 52,698 $ 59,312
2026 $ 30,167 $ 53,869 $ 61,091
$ 29,238 Value per Space 2027 $ 30,823 $ 55,040 $ 62,924
2028 $ 31,478 $ 56,211 $ 64,812
56% City Share of Space Value 2029 $ 32,134 $ 57,383 $ 66,756
44% City Discount 2030 $ 32,790 $ 58,554 $ 68,759
Years 1-4 6%
Years 5+ 3%
Column A represents the value of the City's investment with 4% annual simple interest.
Column B represents the appraised value that a parking space must exceed to trigger Fair Market Value at the
time of termination.
Column C represents the projected market value of an excess parking space.
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
www,miamibeachfl,gov
COMMISSION MEMORANDUM
From:
Mayor David Dermer and
Members of the City comJliSSi
Jorge M. Gonzalez P. , (l
City Manager ~ V
Date: 5/18/2005
To:
Subject:
SUPPLEMENTAL INFORMATION FOR ITEM R7B (FIFTH AND ALTON
DEVELOPMENTAGREEMEND
Attached, please find additional amendments to the Development Agreement with AR&J
SOBE, Inc., for the project located at Fifth Street and Alton Road. These amendments
have been proposed in order to address any future code-required parking issues that may
arise due to the inclusion of a restaurant (or other more intensive use) within the project.
Paqes 7-8
In order to satisfy ownership/control of required parking spaces, this section specifies that
up to 30 of the proposed surplus parking spaces will be owned jointly by the City and the
Developer, each with 50% interest, although the City shall be deemed sole owner of these
spaces for purposes of construction funding, allocation of revenues and expenses,
condemnation, and Fair Market Value calculations. The Developer will be responsible for
the payment of any taxes that may be assessed on these 30 spaces. This represents an
increase of 16 spaces from the 14 spaces staff had agreed to with the Developer as of last
week. It should be noted that although the spaces proposed for joint-ownership were
already open for public use, the presence of a restaurant in the project theoretically
increases the revenue to the garage because the restaurant use is not subject to
validation.
Since this represents a last minute change that was not discussed prior to Monday, May
16, 2005, and since the need for the additional 16 spaces has not yet materialized, the
Administration recommends that the number of joint-owned spaces remain at 14 in number
and that the Developer and staff return with an amendment to the Development Agreement
to address the Code required parking prior to occupational license being issued for the
more intensive use.
Additionally, when this concept was originally agreed upon, language was added to the
Declaration section on pages 82 and 83 of the Draft Agreement distributed with the agenda
that established a separate rate for restaurant patrons. The staff and the Developer have
subsequently agreed that the rate to be established for restaurant patrons will be no less
than the rates charged by the City in its parking garages as established by the City
Commission from time to time. The Administration recommends that this provision be
approved by the Commission at Second Reading.
Paqe 62 (Section 22.20)
Pursuant to City Code, if more than one year has passed since the project receives its
initial certificate of occupancy for the Project, and a use with a higher code-required
Agenda Item R { R
Date 5 - \8 -OS
May 18,2005
City Commission Memorandum
Potamkin - Supplemental
Page 2 of 2
parking requirement begins operations in the project, rather than providing the additional
spaces on site, the Developer has the alternative of paying the Fee-In-Lieu of Providing
Parking. The attached amendment provides that, at any time in the future, the fee to be
paid shall be the current rate of $15,000 per space, whether or not the City has increased
the fee during the elapsed time.
The Administration recommends that the current rate of $15,000 be available for this
purpose for the initial six years following the issuance of the initial certificate of occupancy.
The Developer is requesting the current rate for a period of 11 years.
Paqe 83
Language has been added to this section that allows the Developer to reduce the number
of Public Passes by the number of spaces (currently contemplated to be 30) that are jointly
owned by the City and the Developer, which are referenced on pages 7-8. The Developer
has proposed that the use of these spaces for restaurant use is to be considered separate
and apart from the 150 spaces that the Developer can use in the event of a parking issue
that adversely affects the retail use of the facility.
As a separate issue, the developer has requested that the Commission Memo be revised
to reflect the following:
1. The City actually owns a portion of the land below the above-ground structure for
tax purposes. However, this ownership has no cash value since the City did not pay
for it. The City also does not have any control over this property.
2. With regard to the changes between First and Second Reading where the Market
Price is determined by the arm's-length offer of a third party (as opposed to the FMV
Method) the Developer has requested that it be clarified that the third party offer will
be subject to the FMV fraction and the actual amount presented to Developer will be
the third party offer reduced by 44%.
The negotiated language to address this comment raised at First Reading has the
effect of discounting the value of an arm's-length offer. Therefore, the
Administration's recommendation is to maintain the agreement where this matter is
concerned as it was presented at First Reading. This would mean that the
Developer's Right of First Refusal would be the greater of: the full amount of the
City's contribution, less specified deductions, without interest; or Fair Market Value
as defined in this agreement multiplied by the fraction plus the City's contribution for
the elevator.
JMGITH/kc
T:\AGENDA\2005lMay1805lRegularlPotamkin Supplemental, doc
Attachment
MAY. -17' 05(TUE) 13:24
BERKOWITZ DEVELOPMENT
TEL:305 859 8300
p, 001/005
unreasonably withheld and is deemed given in respect of Robin Bosco Architects and Planners,
Inc, and SrA Architectural Group).
"Brownfield Redevelopment Act~. means the Florida Brownfield Redevelopment Act,
Section 376.77, et. seq., Florida Statutes (1997).
"Buildjng Permit" means a "full bUilding permit" as such tenn is defmed in the Land
Development Regulations, issued by the Building Department of the City, which allows
buildings Of structures to be erected, constructed, altered, moved. convened, extended or
enlarged for any purpose, in conformity with applicable codes and ordinances.
"Business Day" or "business day" means a clay other than Saturday, Sunday or a clay on
which bonking institutions in the State of Florida are authorized or obligated by law or executive
order to be closed.
"City" means the City of Miami Beach, Florida, a muniCipal corporation duly organized
and existing under the laws of the State of Florida.
"City Code" means the Code of the City of Miami Beach, Florida, as amended through
the date hereof and as hereafter amended to the extent permitted herein or by applicable law.
I'City Commission" means the Mayor and City Commission of the City of Miami Beach,
Florida., the governing body of the City, or any successor commission, board or body in which
the general legislative power of the City shall be vested,
uCity Elevator" means the elevator and elevator bank to be conveyed to the City, located
at the northwest comer of the Improvements and comprising a part of the Transit Elements
(which will stop at aU floors of the Transit Facility), together with an easement from the Transit
Facility Dedication Area. to the City Elevator for use by the general public for ingress and egress
between such areQS, Developer shall perfonn routine day to day maintenance of the City
Elevator at its cost (such as sweeping and cleaning). Developer shall perform aU other
maintenance, repairs and replacement of the City Elevator, inclUding obtaining a service contract
for maintenance that is subject to City's reasonable approval, at the City's cost, bused on a. budget
reasonably approved by the City and subject to annual reconciliation, and this obligation shall
survive any tennination of this Agreement.
IlCity Improvements" means the City Spaces and the other Transit Elements. The City
Improvements EIre to be constructed by Developer as part of the Project.
"City Manager" meQllS the chief administrative officer of the City or his or her deSignee.
j
MrAM I 699472,16 7' 98217084
5/12/05 9:59 AM
(7)
MAY, -17' 05(TUE) 13:25
BERKOWITZ DEVELOPMENT
TEL:305 859 8300
P. 002/005
~/
Project) of the City Non-Supennarket Spaces shall be owned jointly by the City and the
ntvcloper as tenants in common) each as to an undivideli 50% interest (and Developer shall
retilin said 50% interest when it conveys said up to 30 spaces to City), but (i) tor purposes of
City's Transit Facility Contribution, the allocation of Revenues Wld Operating Expenses,
allocation of payment in the event of condemnation, determination of the purchase price in the
event of a sale and all similar purposes under the Declaration, City shall be deemed the sole
owner of such up to 30 spaces) (ii) Developer shall, to the extent an exemption from taxes would
otherwise be available in respect of said up to 30 spaces, pay any taxes in respect of said spaces
(otherwise, City shall pay taxes on said spaces)) (Hi) Developer may, at MY time convey its
interest in any or all of said up to 30 spaces to the City for no additional consideration, Md the
City shall accept such conveyance and (iv) such up to 30 spaces shall, at Developer's option, be
the last spaces to be reconveyed to Developer in the case of a condemnation, and if any of said
up to 30 spaces are at any time condemned, City shall, for no consideration, convey to
Developer, at Developer's option, an equivalent interest in other City Non-Supermarket Spaces
(or Supermarket Spaces, if there are no more .city Non-Supermarket Spaces) so that Developer
will continue to own, after the condemnation, if it so elects, up to the same number of spaces that
it owned prior to the condemnation as a 50% co~tenant. The provisions of the foregoing will be
incorporated into and implemented by the Declaration at the time of its preparation.
"City Non-Supermarket Splices" shall mean all of the City Spaces less the City
Supennarket Spaces.
"City Supermarket Spaces" shall mean that portion of the City Spaces equal to 97
parking spaces for the contemplated supermarket user,
"City's Consultant" means such Person as City may liesignate in writing; to Developer
from time to time.
"City's Transit Faeility Contribution" shall mean approximately $16,395.03 per
parking space (being calculated by t.'\king $8,771,340 and dividing Same by the actual number of
City Spaces) constituting the City Spaces plus an additional sum equal to the actual Hurd Costs
and Soft Costs incurred by Developer for the City Elevator plus an additional sum equal to the
actual Hard Costs and Soft Costs incurred by Developer for the Transit Facility Pedication Area
Finishes (but in no event to exceed $356,187.60 for the City Elevator and $118,204.80 for the
Transit Facility Dedication Area Finishes) plus the additional sum of $333,333 for the Transit
Facility Dedication Area, all of which shall be disbursed by City pursuant to Section 6.2 of this
Agreement.
iiCommen~e Construction" or "Commencement of Construction" means the
commencement of major work (such as installing pilings or pouring foundations) for
construction of the Project in accordance with the Plans and Specifications. Any and all
preliminary site work (inclucling, without limitation) any environmental re-mediation and ancillary demolition Or site preparation work, including installation of forms for foundations)
shall not be deemed to be Commencement of Construction,
MIAMI 699472./6 71982170R4
5/17/05 9:59 AM
(8)
MAY, -17' 05 (TUE) 13: 25
BERKOWITZ DEVELOPMENT
TEL:305 859 8300
P. 003/005
./
./
,"'/
../
,../
/
NDn.$uperm~ket Spncea Sllf~11 be: owned joinUy py lhe City an" t~e nevBlcpor flB temmlS in
COmmo", cQCh "Ii ta tin \mdivicloa 50% intercllt (and Pevolopcr shall retain 8,i4 50% iPtot'Ord
when it conveys s~i~ lw.,1:a ~spftcell to C~ty)1 but (1) for P1.lfIUlse. of City's 1'rnnait FACility
Contrip\ltionl th~ 1l11ac~t1on 'Or llDvenues IlTld OpCTlltU1g ExpenscB. al1oclltion of p_ymen~ in the I ~11
event of con~emn,";oT11 dClenl1inliion of the Pl.lrchRSc price ;11 tbo event of" salD Rnd DJ) stmilar lX flP.4
purposes umler tbe: pel.llarlltioo. City I'hRll be deemed tho sale owner of B\1~h ~S'pace8. (H) "/4 II
Pavclopcl' Idlllll. to the extent tlll exempl;on fram JMea w0\11d otherwise be ~re.ln rellpect
of sRid ~pRceB. P~y DIlY JUKCS in resp~l pr slliq spaces {othorwisc. City ahaU pay taw (}"'\')'v,""
an said iipACeS).1iii) Pevcloper muy, ~t allY time convey its interl3Jlt in ,ny or an of ll'"tl ~ . I (
!IJUICCli fa the City for nil qQditional oonsic.1cruUoll. nnd the City shall ~cep' Iluch COJlVcyil'"ilc'C an~ ~I cAd ~
(Iv) "uch ~ 30,Bp"cca ah..n, ilt Pcvclopwa option. be the IMl "paces ~ 1:Ie fOcotlveye4 fa I'
Pt}vDlopcfT1,ltie C1l6C of ~ cQn~emlTla1iDn. ana if ilnY of. rlft.i~ UD to 3~lipncBB arc aJ any lime
cAndenmOQ. City all all. for no cAnaidctLltioTl. convey tCl Developer, at pevcloper'li ~Uan. an
equiv~llmt il1lcre~t in other City NQ"~SUpen11nrkef Spqces (or Sl.lpormtll'lcct Spaces, ifUlere lire no
mare City !\loll-SLJpermarJcet Sp~ces) so thflt Oevolopcl' will continqo to OWTh a~1!lJ the
cOlldeml1atior\.. if it ao (llacts, LIP tQ the IIltmc l1um1:Jer of SpacCliI that it owned prior tD t.l1c
condemnation as B SO% eowtonnnt. ThD provision5 of tho forcgoing will 13" inQOL'(.)orated intD Ifld
implementoQ by the Dec!nration ut the Jima ofiJa prep'ration.
"Cfty P<(on-S..pprmork.et $pneell" &hRlI mean all of the City ~pftCDa ie.. Ulc City
SLlptlllTlnr1cet Spaces.
"Clw Sup~rm"rl'c. Space." shall melln that portion of ~he City Spaceq equal to 97
parking spaoes for tho contemphnea /ilLlpermarket UAClt.
uClty'l CommltnutU XlIcanll tluoh Person as Ci~y may ~l3slgnate in writj118 to DDvclopcr
from time to time.
IiCity'lI Tramlil. 'aetllty Contrlb1ltloq" Ilhall meml appraximQ.tely $l6.J9S,03 per
piloong space (b~ing clillj;~hne4 hy taking $8.771.340 and dividing Sijme ~y the Acmft.l number of
Ci~ Sp~ces) conaJitl!ting tbe Cily SI1l:lce~ pl~lS Rn tl~dition'l-l Bum eqmu to Ute Qctl.llll JiIJrU Coats
anQ Soft Coals inCI.Jn"Dd 1;Jy PcvcloJler far the Clty fncv~tor plus un DilaitionltlllUm equaJ to the
iWtUal Hard Coats 411'f Soft CDa~ il1ClJrred t1y Developer for the Tnmsit fft.ciUt:Y Pc~icMian Area
Finhihca (bllt iu no evont fo ~xceCCl $.3S6,187.60 for th~ City elovntor 1U1~ $] 18.204.80 far tbl!l
TrlWlit Facility 'Oe41clltio1'l Area Finishes) plLJs the ad~it:h~!l~1 sum of $333>>333 tot tho Tnmait
F~ilifY Pedic~Uon J\rcllt nil Mwhich shull ba di~b~U'Scd by City pUl1l\.umt tel SeClion 6.2 of this
Agreement.
uComm&lnce Conlitruc~IQnn or lICommencenllmt of CnnNtrQctlon" mew tho
pommeneemtlnl of m~or work. (auch ftS inlitqUing pilings or pouring foundauollll) For
constmctiDQ of rhe PrajeOl ill llccordanco with the Phms and SpooiflCationll. Any Imd all
pre~il\1itJilTY sH~. worK (IncJl./ding. withollJ limitation, any ~nvjronme"tll r~medhltion and
MO!lllny ctemolltlon or sile prermmion wort" includmg installation of fOlms for fou.naatlons)
shall not be decmetJ to J;Je CommAAoomont of Construction,
MI^MI690472.1G 71!i111Z17ll114
5/12105 !):5!1 AM
($)
MAY, -17' 05(TUE) 13:26
BERKOWITZ DEVELOPMENT
TEL:305 859 8300
p, 004/005
(i) they are not in conflict with the laws and policies governing this
Development Agreement ant! clo !lot prevent development at the land uses, intensities) or
densities ill this Development Agreement; or
(ii) they are essential to the public henlth, safety, or welfare) and expressly
state that they shall apply to a development that is subject to a development agreement; or
(iii) they are specifically anticipated and provided for in this Development
Agreement; or
(iv) the City demonstrates that substantial changes have occurred in
pertillent conditions existing at the time ofapproval of Development Agreement; or
(v) this DevelopmenL Agr~ement is based all substantially inaccurate
information supplied by Developer.
Section 22.19 Survival.
Upon expiration or tem1ination of this Development Agreement for any reason, the
following provision shall nevertheless survive and remain in full force and effect (in a4dition to
any other tel1ns or provisions which specifically state that they shall survive, which shall survive
without being specifically recited in this Article): the provisions of Sections 2.8(b)(v) and (vi),
Section 5,3 as provided therein, Sections 17.2, 17.3, 17.4 and 17.7 to the extent applicable to
matters that survive temlinaLion, Section 18.1 and Article 23 of this Agreement) excluding
Section 23.18(b). Anything in this Agreement to the contrary notwithstanding, the Pl.ovisions
that survive termination after S\.lbstQntial Completion shall inure to the benefit oftbe Developer's
successors and assigns, whether or not they are pemlitted assignees under this Agreement.
Further, upon expiration or termination of this Development Agreement for any reason pliOT to
the conveyance of the Transit Fncility Dedication Area, the City shaH be deemed to have
irrevocably elected to have exerciseu its oplion to acquire the Transit Facility Dedication Areat
and to pay for same and the Transil Facility Dedication Area Finishes, as contemplated by the
Vacation Agreement and Vacation Resolution, which Vacation Resolution and Vacation
Agreement shall survive temlinatioll of this At,rreement and the Parties shall be bound thereby.
This provision shull survive temlination or expiralion ofthis Agreement.
Section 22.20 Impact Fee Payment for Additional Pnrldnl!.
(62)
MIAMI 699472.16 7198217084
5/12/059:59 AM
_ MA~~.!L OS (TUE) 13: 26
BERKOWITZ DEVELOPMENT
TEL:30S 859 8300
P. 005/005
pa1;.tt!rnl" at l~aat quar~~rly tw;\.t.h Q view tcwRrd mA~imh:LnQ IJI;j;'iiLga
r.van"e~ an~ pup~~a/t~an.i~ pa~ting consistent W~~A damonat~abls Ret~i~
Spac~ ~ar~i~9 ~e~an~1 p~ovideQ, however, the maxtmum numbar of
Qftcala/accesB cara~ to ~e allcw~d durine R~tail RQU~i a~~~l b~
oonlilil!ltent witn the city 11'1 POUClY 'j;o~ eCnelr City ow;\a~ C~ Q'ff.l~at~d.
garagee ~J1J.as~ t'levelopl!r a'PprQve~ of a cU,fferaot n~al' :l.n it.a! iole
d11:u:n~etion). pevelopflr shdl have A !:lont::Lnuin51 ~nQ oll-goin9 ~n:;'~Q:dty
riant over an~ne elme to (A~ ted~ce tne ~er of ~11C Pasle. by u
to 30 (~ne ptecise numbar to ease -On the nu ar o~ cit a aces t i
a~e ,on owned Py an Dave 0 e~ aa ten~n~a n common f.l.ch as
'0 an v a interelt) wttnO"t payme~~ of ~ny sum it a
'T.efltIiUranr-11'1 ope.r~U~ In tho ii.tail space ancl (El) p~rcllafie 11~ to 160
~11c paaasa (e~~lu~~va Q~ tne r~duction ~n pupl~a p~lpea ~mp1eme>>~e~
p~r.uant to tA) aeave, i~ any) for uae by the ae~A11 Sp.Of.l Qcaupant~,
t~ei~ Q~stoma~ft ~n4 employoa. qur~nij Rflt~il floura at ~ cest per ~uhl~c
paas ~~At ~D ~ha aaw~ as the ~o~e~t ~omparaDle r~te otfo~~d ~o t~tr4
partial! :In l:-tJ.e Ga;-aao. Dftvelo'Pe~ may I 'tt'Offi time 1;0 time ill'! nae~eci,
~u~ch.~' al~ or any ~~p11c pa~~e~ tha~ ~evelape~ ~~ ent1~1~d to
p~rohA.e and/or Bur~a~da~ ~ny or all ~uh~1o ~a~.e. that DevalOpe~ Bh~ll
QQva pu~cha.ed (upon s~+ren4er, thO~B ~l~o ~~aa8a that wa;& Be
a~rrenQe~ed ahall oupe a~a~n b8 availa~le fo~ aa18 tc t~e public). tf
at ~ny time, t~e OCQc r~quir8~ ~~;~ing falla belOW 643 pa+ki~ apaoel
py "i:r:tue t)~ ~ cb~ge in "HUll of tno centelllplatel1 .up8~:r1cet: '\.1.lSel: I
those par~ing .p~C8ft ~hat are no lenser nae4e4 to B~tiaty QQ4e ~hal1 b8
Dvail~~a for ~~~l1o/transi~ p~~king, subjeot to the ~imit~tiona
cg~t~in.d el~ewne~6 in tQi~ Deola.ation. Tbe ma~imum n~mP~~ o~ Pu~l~c
~~a~.a ~ha~ may pe outs~andins ~urin8 otne~ ~han Ret_il H~t8 pna+l be
rOAI3OX+alJly. in good faith an~ mutually A.~jp:ee~ upon Py the Pa+t.!eR,
aubjec~ to toe cther limi~a~ion~ $et for~h in tbis Ag~eement.
pecdl'l/~CCafl~ eo~cbl (inlJludinS thcafl tor 1;;~"J1li1it; \.I.fllSfS) an~ PfleC1111
event ~ermita w~ll ba oodea ~ep~~.tely to~ p~+~1ng 4~ring aetail ~o~:r~
an4 och6~ houra ~o m.~im;\.~. potent~~l Qa~age re~enuea ~hile asa~r!na ~t
the lama time re..~naply auftieiont and orde~ly ~~rk!~g ~Q~ ~hR ~a~ail
Sp~C8 cc~upan~.. It i~ the intent of th~a suppar~ar.ph that ~he Oi~y
a.n1S gevelcpef re"ion~ly ocoperate w1~h. e~ch other t.o impll3ment '"
~At~1na ope~~tiQn th~t p+omot~a u.e of th~ Q~~&~e ~a a t~~8~t
a~QaPB~h~e t_ci.ity, mB~imi~eB ~lle t~VenU&B of the Gar~g8 and a4drBa~B~
the Ci~y's opject1ve ~nd de~i~e to p~~v1~e a pBr~~n9 altafn4t~va that
lin~1 to o~~af modaa of ~f~nl~cr~at;~on at a ~ay entry peint of the ctty
(and i/!I min4ful of ~he ~iI:Y' a r'l'A funding IllO",r:CB +equt~emonta :t.;
~ppli~ab18) while, at the aame time, a~$u.j.n8 fea~onably a~f;~.g1en~ and
o~der~y pa~~ins fQ~ ~be Retai+ spaca oaoup.nts, an~ th~ Partios aPal~
reaae:lna.bly /Jona:J.l;le. ill1Plament;.:!.n6 any al.t.ernati.ves i:lUag8a~ed :Py eaob
o~h~r to af~ect thil! i~tent.
r,
(ilil pu~1n9 Non-R8t~il Roy~a, pub+i~1 t~an.it .n4
v~let perking ~h~ll be prCl~or..~ pur~uant to a rcason~~y and ~tually
agree~ upon joint markeeing ctfcr~ ef. ci~y an4 Oe~alQPc~1 tpe coat o~
83
MIM,116!1D4'71.lli 71!:18~17t}8~
!/12lO5 9;50 AM
,,,,,,,,,,,,,,,,,,,,,,_,,<,,,r,",~'~"" "'.''''''C'''",",,..,),,,,,,-- ,,' <",_ ",:::~,:_
;'.;
lQ CITY OF MIAMI BEACH
- NOTICE OF A PUBLIC HEARING
f
.,,~
tb
t
.
NOTICE IS HEREBY given that a public hearing will be held by the Mayor and
:;ity Commission of the City of Miami Beach, Florida, in the Commission
:;hambers, 3'" floor, City Hall, 1700 Convention Center Drive, Miami Beach,
=Iorida, on Wednesday, May 18, 2005, at or no earlier than 5:00 p.m., to
~onsider approving, on second reading, a Proposed Development Agreement
Jetween the City of Miami Beach and AR&J SOBE, LLC (alklaPotamkinf
Berkowitz) for the development of the project, presently referred to as M5th
~nd Alton," containing approximately 179,000 square feet of retail area and a
supermarket and an approximate 1081 space parking garage and park-n-
"ide transit facility, including an intermodal/transportation component, an .
ntegrateJ! parking garage, vertical transportation, ramps ventilation, etc., and '
surrounding streetscape and public infrastructure to serve the project,
bounded by Lenox Avenue on the east, Alton Road' on the west, 6" Street on
the north and 5'" Street on the south.
Inquiries may be directed to the City Manager's Office at (305) 673-7010.
INTERESTED PARTIES are invited to appear at this meeting, or be represented
by an agent, or to express their views in writing addressed to the City
Commission, c/o the City Clerk, 1700 Convention Center Drive, 1- Roar, City
Hall, Miami Beach, Florida 33139. Copies of this ordinance are available for
public inspection during normal business hOUrs in the City Clerk's OffIce,
1700 Convention Center Drive, 1. Floor, City Hall, Miami Beach, Florida
33139. This meeting may be continued and under such circumstances
additional legal notice would not be provided,
Robert E. Parcher, City Clerk
City of Miami Beach
?'ursuani lo'get~Ol1 W),f(((j5;1=1a:-'Slat, 'Jlt: t;'tty hereby advises 'tn& '(/dtNJt
that: if a person decides to appeal any decision made by the City Commission
with respect to any matter considered at its meeting or its hearing, such,
person must ensure that a verbatim record of. the proceedings is made,
which record inclu~es 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, persons
needing special accommodation to participate in this proceeding, or to
request information on access for persons with disabilities, or to request this
publication in accessible format, or to request sign language interpreters,
should contact the City Clerk's office at (305) 673-7411, no later than four
days prior to the proceeding. If hearing impaired, contact the City Clerk's
i office via the Florida Relay Service numbers, (800) 955-8771 (1lY) or
(800) 955-8770 (VOICE).
Ad No. 307
-+