332-99 RDA
RESOLUTION
332-99
A RESOLUTION OF THE CHAIRMAN AND MEMBERS OF THE MIAMI
BEACH REDEVELOPMENT AGENCY, APPROPRIATING $106,463.74
FROM A V AILABLE 1998 TAX INCREMENT REVENUE BOND
PROCEEDS, IN ORDER TO REIMBURSE RDP ROYAL PALM LIMITED
PARTNERSHIP FOR REMEDIATION COSTS INCURRED IN
CONNECTION WITH THE ROYAL PALM CROWNE PLAZA RESORT
PROJECT, IN ACCORDANCE WITH THE INDEMNIFICATION CLAUSE
IN SECTION 35 OF THE HOTEL DEVELOPMENT AGREEMENT
BETWEEN THE MIAMI BEACH REDEVELOPMENT AGENCY AND RDP
ROYAL PALM LIMITED PARTNERSHIP.
WHEREAS, On May 28, 1998, the Miami Beach Redevelopment Agency ("RDA") and
RDP Royal Palm Hotel Limited Partnership ("Developer") executed the Agreement of Lease, and
the Hotel Development Agreement, each dated as of May 28, 1999, and other related agreements
for the development and operation of the Royal Palm Crowne Plaza Resort in Miami Beach,
Florida; and
WHEREAS, the Developer has uncovered areas of petroleum-contaminated soil on the
, Royal Palm and Shorecrest properties; and
WHEREAS, in accordance with the Indemnification Clause in Section 35.3 of the Hotel
Development Agreement, the Developer has demanded reimbursement for costs associated with the
remediation of the contaminated soil; and
WHEREAS, the RDA staff has reviewed the Developer's claim and found portions of it to
be appropriate for reimbursement, and it is necessary to appropriate funds.
NOW, THEREFORE BE IT DULY RESOLVED BY THE CHAIRMAN AND MEMBERS
OF THE MIAMI BEACH REDEVELOPMENT AGENCY, that the Chairman and Members of the
RDA authorize the appropriation of $106,463.74 from available 1998 Tax Increment Revenue Bond
proceeds, in order to reimburse RDP Royal Palm Limited Partnership for remediation costs incurred in
connection with the Royal Palm Crowne Plaza Resort Project, in accordance with the Indemnification
Clause in Section 35 of the Hotel Development Agreement between the RDA and RDP Royal Palm
Limited Partnership. The amount of such payment shall be reduced by any amounts covered by
insurance of the Developer, such as Builder's Risk Insurance.
ATTEST:
l)il ~.n '
(U let r) 11 t ( CLLr~
SECRETARY
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
~I
CHAIRMAN
PASSED AND ADOPTED this 15th day of Dec. ,1999
T:\Agenda\1999\Dec 1 S\royalp,res
4i/(~/~/9~
edevel pment Agency Date
C;"l'erClI Counsel
11/22/99 MON 11:08 FAX 3059955340
PAD C
I4J 002
RDP ROYAL PALM HOTEL, LP
c/o Peebles Atlantic Development Corporation
100 S,E. Second Street, Suite 4650
NationsBank Tower at International Place
Miami, Florida 33131
Phone (305) 995-5330 Fax (305) 995-5340
November 22, 1999
Christina Cuervo
Assistant City Manager
City of Miami Beach
1700 Convention Center Dr.
Miami Beach, FL 33138
Re: Contaminated Soil Claims
Dear Christina:
Further to our previous discussions, attached please tlnd an acknowledgement leLter from
Zurich Insurance Company pertaining to the claim for recovery of costs incurred from
contaminated soil on the Royal Palm site.
We wj1\ continue to monitor the determination of this claim and inform you ot" jl~ on-going
status,
Should this policy provide effective coverage of this claim, we will remit Ire appropriate
amounts of payments made by the City under the indemnity provisions of the Gr01lnd Lease. In
the interim, however, and so as to ensure continued project progress, we WOll ,d request the
City's continued cooperation in expedited processing of payments for costs submitted pursuam
to the indemnity provisions of the Ground Lease.
Sincerdy,
RDP Royal Palm Hotel, LP
PADC HOSPITALITY CORPORATION I, General Partnm-
Richard A, Madof
V ice President
cc: William Kuzel
R. Donahue Peebles
Attachment
11/22/99 MON 11:08 FAX 3059955340
PAD C
Zurich U.S.
Environmental Claims
1400 Arm1rlCiln Lane
)d1~'lmbLlrg, Ill,nois
601911-10511
Mailing Addrc~~ P o. 8u~ 4032
SrhnlJmblJrg, Ie
60 168,~032
Telephone (847) 605.6155
Fa. (847) 60j.7811
www wnchu\ (0111
November 12, ] 999
Mr. Daniel Grimm
Site Manager
RDP Royal Palm Hotel Limited partnership
100 SE Second Street
Miami, FL 33131
RE:
Insured:
Claimant:
Site:
Date of Loss:
Policy No.:
Claim No.:
RDP Royal Palm] lotel
City of Miami Bcach
1535 and 1545 Collins Avenue, Miami Reach, I'L
04/16/99 (approximate)
1M 2393831-00 (08/03/98 - 02/03/2000)
912-34967
Dcar Mr. Grimm:
I4J 003
8
.ZURICH
This letter serves to acknowledge receipt of the above-referenced matter. Please note that I
will hc handling this matter on behalf of Zurich Insurance Company ("Zurich"). Pleasc
forward all future correspondence regarding thi:,; matter to my attenti(m, refcrencing the
claim number and sitc namc.
Zurich is in the process of reviewing this mattcr to determine wllether coverage is
available under the above-referenced policy. Once we havl; sufficilmt information to
make a coverage determination, we will contact you. in the interim, Zurich gcnerally
reserves all rights available to it under the temlS and conditions of allY and all relevant
insurance policies it may have issued to RDP Royal Palm HotcL Nothing in (hi:,; letter,
and no action taken by Zurich to investigate and/or monitor this matter should be
11/22/99 MON 11:08 FAX 3059955340
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l4J 004
Mr. Daniel Grimm
November 12, 1999
Page 2
construed as an admission of coverage, or as a waiver of any policy defenses Zurich m:ly have under any
and all relevant insurance policies it may have issued to RDt> Royal Palm Hotel.
If you have any questions, or wish to discuss any aspect of this matter, please call m~ dirccily at (847)
605-3361.
Very truly yours~ 1
LVJ~.
Myra . Wasiunec
ACCOl lt Specialist
cc: Geri Calin
Anderson & Jacoby Insurance Consultants
7855 w. I04th Strc~t, Suite #100
Miami, FL 33156
Miami Beach
Redevelopment Agency
1700 Convention Center Drive
Miami Beach, Florida 33139
Telephone: (305) 673-7193
Fax: (305) 673-7772
REDEVELOPMENT AGENCY MEMORANDUM NO. 99-'0
December 15, 1999
TO:
Chairman and Members of the
Miami Beach Redevelopment Agency
FROM:
Sergio Rodriguez
Executive Director
SUBJECT:
A RESOLUTIO mE CHAIRMAN AND MEMBERS OF THE MIAMI
BEACH REDEVELOPMENT AGENCY, APPROPRIATING $106,463.74
FROM A V AILABLE 1998 TAX INCREMENT REVENUE BONDS IN
ORDER TO REIMBURSE RDP ROYAL PALM LIMITED PARTNERSHIP
FOR REMEDIATION COSTS INCURRED IN CONNECTION WITH THE
ROYAL PALM CROWNE PLAZA RESORT PROJECT IN ACCORDANCE
WITH THE INDEMNIFICATION CLAUSE IN SECTION 35 OF THE
HOTEL DEVELOPMENT AGREEMENT BETWEEN THE MIAMI BEACH
REDEVELOPMENT AGENCY AND RDP ROYAL PALM LIMITED
PARTNERSHIP.
ADMINISTRATION RECOMMENDATION:
Adopt the Resolution.
ANALYSIS:
On May 26, 1999, the Redevelopment Agency Board, in accordance with the indemnification
clause in Section 35 of the Hotel Development Agreement between the Redevelopment Agency and
RDP Royal Palm Hotel, LP, (the Developer), adopted a Resolution appropriating $39,869.85 in
order to reimburse the Developer for costs incurred with the remediation of contaminated soil found
on Royal Palm site. It was reported at the time that an additional area of contamination had been
identified on the Shorecrest site, On July 23, 1999, the Developer submitted a claim to the
Redevelopment Agency in the amount of $134,580 for cost of the clean-up.
On September 21, 1999, the Administration met with the Developer to address certain outstanding
issues, including the claim for removal of the contaminated fill from the Shorecrest site and the
outstanding delay claim in the amount of $836,085 in connection with the remediation of the
contaminated soil on the Royal Palm site, During the meeting, the Developer was informed that due
S()UTIl I)()INTI:
Vedevel()pment ()Istlic:t
Agenda Item 35
Ved~ Date J 2 -I S- arC)
to certain deficiencies in the supporting documentation, the claim for removal of the contaminated
fill would have to be resubmitted. The Developer has since complied and the Administration,
outside counsel and consultants have thoroughly reviewed the documentation provided. Based upon
the review of supporting documentation, the Administration is recommending that the RDA only
reimburse $106,463.74 to the Developer, to the extent that these costs are not covered by the
Developer's insurance. The Developer has submitted a separate claim to its insurance carrier for
recovery of costs incurred in connection with the contaminated soil. To the extent that any such
claim is paid, the Agency will be reimbursed accordingly, as reflected in the attached correspondence
from the Developer.
With respect to the delay claim, the Administration and its advisors are continuing to evaluate the
extent (if any) of the City/Agency's exposure/liability. The Developer has submitted additional
information, as requested by the RDA, including alternate critical path schedules and contractual and
insurance documents which the RDA has forwarded for review by its consultants. Daily reports and
various other correspondence between the Developer, the Contractor, the Architect and the Project
Manager still need to be gathered, in order to determine if certain concurrent activities may have
actually contributed to any delays. A final assessment of any possible delay caused in connection
with soil contamination might not be possible until the end of the project.
In accordance with the provisions of the Development Agreement, it is recommended that funding
in the amount of $106,463.74 be appropriated to pay the necessary costs associated with the
removal of the contaminated soil from the Shorecrest property.
SR/fffKOB ?N,
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