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Letter from Luis Reiter cI&./ ~: ~~ tlk ~~, tlk ~, ..r~ Jf~ ~-A: ~ ~-i 9~.~ ~~, !i:-tf. J;,~~., $~,~~ ~~~ ~,~~ &'~, ~~ ~ ~,if~~g;~ ~~td~ 2.9tJtJ~. ~enh ,2tJl./oud ~~ ~~ ~; y~ 3313/ ..r~ ptJ$) 517-If'!tJtJ ..r~ (JtJ$) J.flf- 111.25 ~,;"J ~.a/ JYu-nzk, June 6, 1994 Laurence Feingold, Esq. City Attorney City of Miami Beach 1700 Convention Center Drive Miami Beach, Florida 33139 Re: Ballet Valet Parkinq Prolect Dear Larry: Your office has asked for our advice as to whether the proceeds of the loan (the "Loan") made to the City of Miami Beach, Florida (the "City") under a Loan Agreement, dated as of June I, 1993 (the "Loan Agreement"), between Sun Bank, National Association, as Trustee, the City of Gulf Breeze, Florida and the ci ty, the repayment of which is secured by the City's electric franchise fees, may be utilized to finance the captioned project (the "proj ect") . In addition, you have asked us whether in undertaking the Project (as described below) the City would violate the provisions of Article VII, Section 10 of the Florida Constitution. The terms of the Project are to be set out in an Acquisition, Construction and Development Agreement (the "Agreement") to be entered into among the City, the Ballet Valet Parking Company, Ltd. (" BV") and McCarthy Brothers Company (" GC") , a draft of which Agreement dated June I, 1994 has been provided to us. As currently contemplated, the Project consists of the acquisition by the City of certain land, air space and easements (the "City Property") owned by BV for the construction of a 646 space parking garage in the area of the City commonly known as "South Beach" (the "Garage"). The Garage is to be built by BV and GC, a licensed general contractor, on a turn-key basis for the City at a fixed, agreed upon cost, subject to certain adjustments, and will be owned and operated by the City as a parking garage open to the general public. Concurrently with the construction of the Garage, BV and GC will construct retail space (the "Retail Space") on property adjacent to the City Property and owned by BV (the "BV Propertyll), which shall be financed, owned and operated by BV with D09: (04548. DOCS. MIA180056] L-FEINGOLD. if~lff~w0~ Laurence Feingold, Esq. June 6, 1994 Page 2 its own funds. BV will be given the option to purchase the City Property and the Garage at a purchase price of fair market value plus certain accumulated deficits incurred by the City in the operation of the Garage for a period of 30 days commencing on the date which is the later of 30 years after the Garage opens for service or the date upon which the Loan is repaid in full by the City. The City will, on the other hand, be given the right of first refusal to purchase the BV Property and the Retail Space upon receipt by the City from BV of notice of its intention to convey the BV Property or the Retail Space to a third party. The City further intends to license the use of not to exceed 25% of the parking spaces in the Garage to BV for a period of 30 years. Such license shall require BV to notify the City in writing annually as to the number of spaces it will contract for in the forthcoming year, not to exceed such 25% maximum, and shall not entitle BV to any designated spaces within the Garage nor give any priority to BV over any other users of the Garage with respect to specific spaces within the Garage. BV shall have the option to renew such license for two successive 30 year periods. We have been advised by City officials that the rates to be paid by BV for the license of such spaces will be no less than the rate the City offers to other non-governmental parties in the area for parking spaces on a commercial bulk rate basis. The licensed parking spaces shall only be usable by Anthony Goldman (IIGoldmanll), who controls BV, or by his heirs, or by entities controlled by him and may not be transferred by BV. It is our understanding that Goldman or entities controlled by him own and manage properties in the vicinity of the Project which are open to the general public. under certain circumstances, the City will have the right to terminate the rights of BV to such license of parking spaces as described in the Agreement. We have been advised by City officials that the Project was selected by the City as a result of a request for proposals for the development of parking facilities for the IISouth Beachll area initiated by the City and to which BV responded. It is' our understanding that such request for proposals was undertaken by the City because the "South Beachll area has for many years been and is currently in critical need of public parking. We have further been advised by City officials that the proj ect will greatly aid in resolving the need for public parking in the area and that the location of the City Property is ideal for the development of the Garage because demand for parking in the immediate vicinity is especially great. Finally, City officials have advised us that the licensing of the parking spaces to BV as described above will help ensure the financial feasibility of the Project. In rendering the D09: [04548.DOCS.MIA180056JL-FEINGOLD. Rf'~, Rf'~;;:.QJ~ Laurence Feingold, Esq. June 6, 1994 Page 3 opinions contained below, we have not made any independent investigation of the need for such parking, the purchase price being paid by the City for the City Property or the construction of the Garage or the rates being paid by BV for the license of the parking spaces, but have relied on the representations of City officials and the findings and determinations made by the City Commission of the City (the "Commission") with respect thereto. Article VII, Section 10 of the Florida Constitution provides that "neither the state nor any county, school district, municipality, special district, or agency of any of them, shall become a joint owner with, or stockholder of, or give, lend or use its taxing power or credit to aid any corporation, association, partnership or person "and has been interpreted by Florida courts as a restriction upon the degree of involvement by private parties in various kinds of projects financed by public bodies. These interpretations have, however, permitted private involvement in publicly financed projects where the courts have concluded that, notwithstanding such private involvement, an overall public purpose was being served. Florida courts have permitted private benefit which is incidental to the overall public benefit. In order to render the opinions contained below, we have reviewed the Loan Agreement, the draft of the Agreement dated June 1, 1994, Article VII, Section 10 of the Florida Constitution and Florida case law interpreting said provision of the Florida Consti tution. Based solely upon such review and the repre- sentations of City officials and the findings and determinations of the Commission, it is our opinion that (i) the proceeds of the Loan may be utilized to finance the "Cost'! (as such term is defined in Section 2.1 of the Loan Agreement) of the proj ect and (ii) in undertaking the Project the City would not violate the provisions of Article VII, Section 10 of the Florida Constitution. It should be noted, however, that our opinion contained in (ii) above is based solely upon our review of Florida case law interpreting Article VII, Section 10 of the Florida Constitution and is not a guarantee as to how a court would hold if asked to review the Project but does constitute our view of the most reasonable interpretation of current Florida law. We have also been advised that the City wishes to exclude the proj ect from the Parking System, as such term is defined in Resolution No. 88-19468, adopted by the Commission on December 9, 1988 (the "Parking Bond Resolution"), pursuant to which the City has issued its parking revenue bonds (the "Parking Bonds"). We would again remind you that in order to do so the Commission must . ' ln accordance with Section 19(n) of the Parking Bond Resolution, D09: [04548. DOCS. MIA18 0056 ] L-FEINGOLD. ,e/~if~~@~ Laurence Feingold, Esq. June 6, 1994 Page 4 designate by resolution supplemental to the Parking Bond Resolution the Project as "Excluded Facilities" and such designation may only be made if (A) none of the capital costs or expenses of operations and maintenance of the Project are to be paid, directly or indirectly, from Parking Bonds or income and revenues of the Parking System ("Revenues") or moneys and investments in the funds and accounts established under the Parking Bond Resolution and (B) the Property is so located or is to be so operated as will not, in the opinion of an independent parking consultant, provide competition to the Parking System to an extent which will have a material adverse effect on Revenues. We trust the foregoing is responsive to your request but should you have any questions, please do not hesitate to contact us. LR/as D09: [0454B.DOCS.MIA1B0056]L-FEINGOLD.