Commission Memorandum
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'''FICE OF THE CITY MANAGER
TELEPHONE: (305) 673-7010
FAX: (305) 673-7782
COMMISSION MEMORANDUM NO. ~1
TO:
Mayor Seymour Gelber and
Members of the City commission
DATE: March 30, 1994
FROM:
Roger M. Ca,rlto
city Manager
John Dellagloria ~~
Chief Deput.y City Attorney
SUBJECT: APPROVAL OF ACQUISITION, CONSTRUCTION AND DEVELOPMENT
AGREEMENT :FOR THE PARKING GARAGE PROJECT AT COLLINS
AVENUE AND 7TH STREET
ADMINISTRATION RECOMMENDATION:
The Administration and the city Attorney's office recommends that
the City commission approve an acquisition, construction and
development agreemen1: for the parking garage project on Collins
Avenue and 7th StreE~t with Ballet Valet Parking Co., Ltd. and
Macarthy Brothers Company.
BACKGROUND:
On December 9, 1992, the city of Miami Beach issued RFP/RFLI No.
18-92/93, calling for proposals to develop parking in the South
Beach area. Fifteen (15) proposals were received. The City
Manager consequently appointed a selection committee to review and
narrow down the list. The selection committee met on April 13,
1993 and narrowed the list to seven (7) proposals. The members of
the selection committee were Nancy Liebman, Lloyd Ruskin, Judy
London, Neli santamarina, Bob Nachlinger, Harry Mavrogenes and Mark
Malatak.
On April 21, 1993, the Commission authorized the Administration to
commence discussions with the seven (7) firms for development of
parking projects. The Administration was instructed to defer the
proposals that affected Lincoln Road due to a major visionary
process underway at this time. For a variety of reasons the only
remaining proposal is the 620 space project proposed by Ballet
Valet at 7th street and Collins Avenue.
On July 14, 1993, the city commission authorized the Administration
to negotiate a development agreement with Ballet Valet, Inc.,
consistent with their request for proposal process.
The negotiations began in earnest approximately nine months ago
with the assistance of special counsel, David Berger of Broad and
Cassel, and the City Attorney's office. A Letter of Intent was
approved by the City commission on July 14, 1993. The transaction
before the City Commission today has substantially improved the
position of the city in relation to the Letter of Intent
(Attachment #1).
1
DATE
R-3--A
.
3-3D-~
AGENDA
lTEH
BUSINESS POINTS
2.
3.
1.
Site
No. of Parking
Spaces
Development
4.
Management
5.
Financing
6.
Parking Spaces
7.
Land
8.
Air Rights
9.
Right to Acquire
10.
Construction Cost
of Garage
LETTER OF INTENT
Collins & 7th Street 30% of
37,000 square feet
550
Turn Key project with safeguards
regarding budget and quality
control approvals. CMB approves
plans, design and construction
plans. All plans must be
approved by planning, design,
zoning and other processes.
CMB to manage garage. Ballet
Valet to manaae retail.
Tax Exempt Bonds (Gulf Breeze)
Ballet Valet shall have up to 40%
of spaces at Fair Market Value
(FMV) for bulk sales. Number of
spaces determined in June of each
year. Term is 30 years plus two
(2) 3D-year renewals.
Price based on percentage of land
acquired by the City times the
appraised value of the entire
42,000 square ft. site.
CMB shall lease air rights over
balance of land. Lease rate @ 9%
of initial appraised value with
annual CPI escalator not to
exceed 5% annually.
Ballet Valet has option to buy
garage at end of 3D-year term.
Price is equal to FMV at time of
acquisition plus accumulated
deficit incurred by City over
life of operation of garage.
No cap on construction cost.
PROPOSED BUSINESS POINTS
15,000 sq. ft. of land
23,000 sq. ft. of air
riahts
532-620
Same.
Same.
Same.
Ballet Valet shall have
the right to license an
amount of parking spaces
determined by legal
review. Number of spaces
determined twice yearly.
Term is 30 years plus two
(2) 3D-year renewals.
$75 monthly fee,
adjusted by CPI after
year 2, not to exceed 3%
and adjusted every five
(5) years to Commercial
Bulk Rate.
Same.
Appraisals:
Gallaher - $1,700,000
Friedman - $3,400,000
CMB - $3,200,000
CMB leases service
corridor to Ballet Valet
@ $5 sq. ft. Additional
air rights owned by
former Commissioner
Resnick on N.E. corner is
$275,000 - Not included
in appraisal.
CMB will purchase air
rights. Price included
with land (Item #7). Air
rights parcel includes
right of former
Commissioner Resnick to
rent six (6) spaces.
Same. - Additionally, CMB
has the right of first
refusal on the retail.
Ballet Valet has one
option to purchase at the
end of the 3D-year term.
$9800 per space. Savings
will be shared equally by
CMB and Ballet Valet. No
developer fee. Credit of
$100,000 due to CMB for
difference in
construction cost of
retail if it were a
separate building.
.
'*1;...,
2
Additional factors in this transaction are:
. Ballet Valet is negotiating an agreement with former Commissioner,
Abraham Resnick, for the purchase of the air rights on the northeast
corner. This property would provide approximately ninety (90)
additional spaces. The agreement between Ballet Valet and Abraham
Resnick allows for six (6) parking spaces to be transferred from Ballet
Valet to Mr. Resnick at the same rate of $75.00 per month and all
applicable increases as Ballet Valet pays the city. The spaces are
included in the number Ballet Valet may rent and not incremental.
. The City has required Ballet Valet to fund the cost of a machine which
would be used by the city for the trimming of the plants which cover the
garage skin. This cost will be included in the $9800 per parking space.
The approximate cost of the machine is $50,000.
. Ballet Valet will reimburse the city $100,000 dollars at the time of
land and air rights closing for the envelope provided by the
construction of the garage for the retail area.
. Ballet Valet has contracted with Allied Environmental Consulting, Inc.,
for an environmental audit and asbestos survey for the properties
comprising 634-670 Collins Avenue. The environmental report will be
completed prior to the closing of the property. The cost of the
environmental report will not exceed $3,000 and it will be shared
equally between the City and Ballet Valet. To the extent that the
environmental report indicates the presence of hazardous substance,
Ballet Valet shall be obligated, providing the cost does not exceed
$50,000, to promptly take measures to remove hazardous substances. If
the cost exceeds $50,000, the City may elect, at its option, to pay the
extra costs required to remove the hazardous substance, or shall have
the right to terminate the agreement.
. The City shall contract to have an audit conducted on an ongoing basis
of the construction cost.
. Ballet Valet shall have an agreement for use of parking spaces which
shall be determined by legal review. Ballet Valet will pay $75.00 per
month per space plus taxes adjusted by CPI after year two, not to exceed
3% and adjusted every five (5) years to the commercial bulk rate in any
other city parking garage south of 13th street.
. Two (2) appraisals were performed on the air rights and land to be
acquired. The appraisals were done by Bob Gallaher of Hedgpath &
Gallaher and Allan Friedman of Dixon and Friedman. Both appraisals were
done on the basis of highest and best use. The appraised value in the
report by Hedgpath & Gallaher was significantly lower. Due to this
disparity, the City contracted with Stephen M. Cantwell of Investors
Research Associates, Inc. to perform a review appraisal. This report
will be submitted to city staff late Friday and made available to the
City Commission Monday morning.
. If the garage is destroyed by casualty between year 25 and 30 and
thereafter of this Agreement, Ballet Valet has the option to purchase
the property from the City at the appraised highest and best use, if the
City so decides not to reconstruct the garage.
. In the event that 100% of the retail space is not leased and occupied by
no later than six (6) months after the completion of the garage, Ballet
Valet shall license from the city additional parking spaces in the
garage at double the monthly bulk rate amount, e.g. a 20% vacancy in the
retail space requires the licensing of five (5) additional spaces at
$150.
ANALYSIS:
Based on the above information, before you for approval, is the Ballet Valet
proposal for the construction of a 620 parking space garage with a cost of
$3,200,000 for land and air rights plus $275,000 for the additional corner
air rights parcel and construction costs of $6,076,000. This represents a
cost of $5,605 for land and $9,800 for construction per parking space
(including the Resnick portion). These numbers are reasonable given the cost
of recent public garage projects in Miami Beach and South Florida.
(Attachment #2) .,~ 3
,,;
Approval of this transaction will allow 620 parking spaces to be available
for the South Beach area in approximately fifteen (15) months from today.
Should this transaction not be completed, the Administration is concerned
that a similar site with all design and historic approvals in place will not
be available in the foreseeable future.
CONCLUSION:
The City Commission is requested to approve the transaction and to authorize
the Administration to proceed with the purchase of land and air rights from
Ballet Valet and to enter into an agreement for the construction of the
parking garage.
RMC:LF:ah
Attachment
c:\Balletva.mem
4