2000-24162 ResoRESOLUTION NO. 2000-24162
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE
ADMINISTRATION TO TERMINATE NEGOTIATIONS WITH THE
POINTE AT NORTH BEACH, AS THE SUCCESSFUL PROPOSER
PURSUANT TO REQUEST FOR PROPOSALS (RFP) NO. 42-98/99
FOR DEVELOPMENT OF APPROXIMATELY FOUR (4) ACRES OF
CITY-OWNED PROPERTY KNOWN AS THE "72NI~ STREET SITE",
LOCATED BETWEEN COLLINS AND HARDING AVENUES, FROM
72m~ TO 73 m~ STREETS; SAID TERMINATION AS A RESULT OF
THE PROPOSER'S FAILURE TO COMPLY WITH THE
CONDITIONS SET FORTH IN RESOLUTION NO. 2000-23816
ADOPTED ON FEBRUARY 23, 2000.
WHEREAS, on May 12, 1999, the Mayor and City Commission adopted Resolution No. 99-
23164, authorizing the issuance of Request for Proposals (RFP) No. 42-98/99 for development of the
72nd Street Site, and the Administration was further authorized to procure related professional
services in connection with the RFP; and
WHEREAS, on February 23, 2000, the Mayor and City Commission adopted Resolution No.
2000-23816, authorizing the Administration to enter into negotiations with the Pointe at North Beach
(Developer), as the succesful and only ranked proposer pursuant to the RFP, subject to certain
conditions, including a project feasibility and compatibility assessment, finalization of a value in use
appraisal, and securing of commitments from Anchor tenants; and
WHEREAS, the Developer's proposed project consisted of a 51,500 sf. Publix; 81,465 sf.
movie theater; 36,500 sr. retail/restaurant area; 906 parking spaces; and an optional community
theater; and
WHEREAS, on March 15, 2000, the Mayor and City Commission approved the selection of
the Chesapeake Group (Consultant) to study and develop a strategic plan for the economic
revitalization of the North Beach Area and a preliminary draft of the market analysis component of
the report was presented at the North Beach Development Corporation (NBDC) Board meeting held
on October 17, 2000, and at a community meeting held on October 19, 2000; and
WHEREAS, the Consultant is developing strategic recommendations based upon this market
analysis and will continue to solicit input from the community and ultimately conclude with
recommendations as to the 72nd Street Site's optimal role in North Beach's future development; and
WHEREAS, a summary of the market analysis and key indicators serves as a basis for the
Administration's recommendation, as presented herein; and
WHEREAS, the Developer has been unable to secure an economically viable commitment
from a movie theater operator due to the downturn in the industry; and
WHEREAS, the Developer has verbally proposed to develop a phased project whereby all
components of the project would be constructed, except for the movie theater component; and
WHEREAS, phase one of the project would consist of the Publix supermarket, the parking
facilities, the ancillary retail areas, the community theater and the foundation for the future movie
theater component of the project; and
WHEREAS, the Developer further offered to secure their timely performance to develop the
second phase of the project, the movie theater, by posting a letter of credit in the amount of $1
million in favor of the City; and
WHEREAS, while this proposal would achieve the siting of a new grocery store for the area,
which is widely supported by the community, the Administration and the City's consultants find this
proposal would not serve the City's long term objectives for the development of this site; and
WHEREAS, a phased project, without a secure commitment to implement Phase 2, would
cement the future project's foundation, which could be detrimental to the ultimate project
implementation; and
WHEREAS, absent a final commitment from a movie theater operator, the Developer is
unable to finalize negotiations with the City; the City's consultants' are unable to finalize the
valuation and feasibility study; and the Developer is not in compliance with the City Commission's
request to secure commitments from the anchor tenants as a condition precedent to a lease
agreement; and
WHEREAS, as reported on July 26, 2000, it is therefore recommended that Mayor and City
Commission terminate negotiations with the successful proposer, the Developer, as a result of their
failure to comply with the terms of said approval, as authorized by Resolution No. 2000-23816; and
WHEREAS, the proposed termination of negotiations with the Developer, will enable the
City's strategic planning consultant to seek input from the community and develop a wider range of
development alternatives that will meet the area' s needs and serve to enhance the economic viability
of the area; and
WHEREAS, as reported on September 27, 2000, HUD recently approved the City's
application for a $4 million Section 108 loan and a $1 million EDI grant and the EDI grant award
was largely based upon the 72nd Street Site development proposal; and
WHEREAS, as a result of the aggregate improvements proposed through the Section 108
loan and on the 72nd Street Site by the Developer, it was estimated that 485 new jobs would be
directly created with an additional 655 new jobs indirectly created, and approximately $100 million
in additional investment in the area; and
WHEREAS, while HUD has been advised of the Developer's difficulty to secure a
commitment from a movie theater operator, it will be necessary to apprise HUD of the action
proposed herein, which may ultimately jeopardize the City's $1 million EDI grant award; and
WHEREAS, according to RFP No. 42-98/99, the Developer proposal was accompanied by a
cashier's check for $10,000, which was refunded to the unsuccessful proposers, but is non-refundable
to the preferred proposer (the Pointe at North Beach) to offset the actual costs incurred bythe City in
evaluating responses and negotiation of an agreement; and
WHEREAS, if the Developer had ultimately been successful in reaching agreement with the
City, they would have been responsible for compensating the documented fees of the City's third
party attorneys and advisors for the project, up to an amount of $75,000, and therefore the $10,000
deposit will be retained by the City and will beapplied to the costs incurred to date which are
estimated to be in excess of $40,000, based upon advertising and consultant fees incurred.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission authorize the Administration to terminate negotiations with the Pointe at North Beach,
as the successful proposer pursuant to Request for Proposals No. 42-98/99 for development of
approximately four (4) acres of City-owned property known as the "72nd Street Site", located
between Collins and Harding Avenues, from 72nd to 73rd Streets: said termination as a result of the
proposer's failure to comply with the conditions set forth in Re~
February 23, 2000.
/
PASSED AND ADOPTED THIS 8th day of No
CITY CLERK Robert Parcher
.lutioi~No. 2000-23816 adopted on
David Dermer
JMG/CMC/rar
F:\CMGR\$ALL\CHRISTINA72NDSTREET TERMINATION.RES.DOC
attachment
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
Date
CitY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
http:~cl.miami-beach.fl.us
TO:
FROM:
SUBJECT:
co ss o Oo
iiiiiii
.
Mayor Neisen O. Kasdin and DATE: November 8, 2000
Members of the City Commission
Jorge M. Gonzalez ~ ~"
City Manager
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE
ADMINISTRATION TO TERMINATE NEGOTIATIONS WITH THE
POINTE AT NORTH BEACH, AS THE SUCCESSFUL PROPOSER
PURSUANT TO REQUEST FOR PROPOSALS (RFP) NO. 42-98/99 FOR
DEVELOPMENT OF APPROXIMATELY FOUR (4) ACRES OF CITY-
OWNED PROPERTY KNOWN AS THE "72~° STREET SITE", LOCATED
BETWEEN COLLINS AND HARDING AVENUES, FROM 72~ TO 73 ~
STREETS; SAID TERMINATION AS A RESULT OF THE PROPOSER'S
FAILURE TO COMPLY WITH THE CONDITIONS SET FORTH IN
RESOLUTION NO. 2000-23816 ADOPTED ON FEBRUARY 23, 2000;
FURTHER AUTHORIZING THE ISSUANCE OF A REQUEST FOR
QUALIFICATIONS (RFQ) SEEKING QUALIFICATIONS FOR
SUBMISSION OF ALTERNATE DEVELOPMENT PROPOSALS AS SET
FORTH HEREIN.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
ANALYSIS
On May 12, I999, the City Commission adopted Resolution No. 99-23164 authorizing the issuance
of Request for Proposals (RFP) No. 42-98/99 for development of the 72~ Street Site, and the
Administration was further authorized to procure related professional services in connection with
the RFP. On February 23, 2000, the City Commission adopted Resolution No. 2000-23816
authorizing the Administration to enter into negotiations with the Pointe at North Beach, pursuant
to the 72na Street Site RFP, subject to certain conditions, including a project feasibility and
compatibility assessment, finalization of a value in use appraisal, and secure commitments from
Anchor tenants. The proposed project consisted of a 51,500 sf. Publix, 81,465 sr. movie theater,
36,500 sf. retail/restaurant area, 906 parking spaces and an optional community theater.
On March 15, 2000, the City Commission approved the selection of the Chesapeake Group to study
and develop a strategic plan for the economic revitalization of the North Beach Area. A preliminary
draft of the market analysis component of the report is attached hereto and was presented at the
North Beach Development Corporation (NBDC) Board meeting held on October 17, 2000 and at a
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352
AGENDA ITEM
DATE
November 8, 2000
Commission Memorandum
72"'~ Street RFP
Page 2
community meeting held on October 19, 2000. The consultant is developing strategic
recommendations based upon this market analysis and will continue to solicit input from the
community and ultimately conclude with recommendations as to the 72nd Street Site's optimal role
in North Beach's future development. A summary of the market analysis and key indicators is
provided below and serves as a basis for the Administration's recommendation, as presented herein.
On May 10, 2000, the City Commission authorized contracts with real estate and appraisal
consultants to perform the valuation, feasibility study and advisory services in connection with the
72"d Street Site. Over the past six (6) months, staff and the consultants have met with the Developer
to address:
Status of tenant negotiations.
Status of consultants' report, pending finalized tenant negotiations and development concept.
Desired improvements to the existing Publix on 67th Street and Collins Avenue.
Status of North Shore Community Center project and proposed parking and its effect on the
72"d Street Development.
Collaboration with the Miami Beach Cultural Arts Council and North Beach Development
Corporation on the Community Theater component of the project, including proposed
management and operation of the theater.
At the July 10, 2000 meeting of the Transportation and Parking Committee, a motion was passed
recommending the Developer proceed in negotiating with a movie theater operator until such time
as the strategic planning study is final. On July 26, 2000, a status report was presented to the City
Commission advising of the status of negotiations with the Developer and projecting a final report
to be presented in conjunction with the completion of the North Beach Strategic Plan in October
2000.
To date, the developer has been unable to secure an economically viable commitment from a movie
theater operator due to the downturn in the industry. In an article recently published in the Miami
Herald, the downturn in the movie theater industry is attributed to burgeoning debt fi.om building
new theaters and losses incurred at the obsolete smaller multiplex theaters. Conversely, Publix
issued a commitment letter to lease the site dated May 12, 2000 and also attached hereto.
Additionally, letters of interest have been submitted by various retail/restaurant operators.
As a result, the Developer has verbally proposed to develop a phased project whereby all components
of the project would be constructed, except for the movie theater component. Phase one of the
project would consist of the Publix supermarket, the parking facilities, the ancillary retail areas, the
community theater and the foundation for the future movie theater component of the project. The
Developer further offered to secure their timely performance to develop the second phase of the
project, the movie theater, by posting a letter of credit in the mount orS1 million in favor of the
City. While this proposal would achieve the siting of a new grocery store for the area, which is
widely supported by the community, the Administration and the City's consultants find this proposal
T:~GEN DA~2000",NOV0gO0',,R EGU] .A R~.72NIXq T. CM
353
November 8, 2000
Commission Memorandum
72~ Street RFP
Page 3
would not serve the City's long term objectives for the development of this site. A phased project,
without a secure commitment to implement Phase 2, would cement the future project's foundation
(no pun intended), which could be detrimental to the ultimate project implementation.
Therefore, absent a final commitment from a movie theater operator, the Developer is unable to
finalize negotiations with the City, the City's consultants' are unable to finalize the valuation and
feasibility study, and the Developer is not in compliance with the Commission's request to secure
comments from the Anchor tenants as a condition precedent to a lease agreement. As reported
on July 26, 2000, it is therefore recommended that the City terminate negotiations with the
successful proposer, the Pointe at North Beach, as a result of their failure to comply with the terms
of said approval as authorized by Resolution No. 2000-23816. Furthermore, the proposed
termination of negotiations with the Pointe at North Beach, will enable the City's strategic planning
consultant to seek input from the community and develop a wider range of development alternatives
that will meet the area's needs and serve to enhance the economic viability of the area.
As a point of information, and as reported on September 27, 2000, HUD recently approved the City's
application for a $4 million Section 108 loan and a $1 million EDI grant. The EDI grant award was
largely based upon the 72nd Street site development proposal. As a result of the aggregate
improvements proposed through the Section 108 loan and on the 72nd Street site by the Pointe at
North Beach, it was estimated that 485 new jobs would be directly created with an additional 655
new jobs indirectly created, and approximately $100 million in additional investment in the area.
While HUD has been advised of the Developer's difficulty to secure a commitment from a movie
theater operator, it will be necessary to apprise HUD of the action proposed herein, which may
ultimately jeopardize the City's $1 million EDI grant award. The concurrent issuance of the RFQ
to seek qualifications from a developer so that City can negOtiate a preferred development alternative
for the site should give HUD the assurance that the 72nd Street site will ultimately serve as an
economic catalyst for the area and benefit the low and moderate income persons through the creation
of jobs for the area residents.
As another point of information, according to RFP No. 42-98/99, the Pointe at North Beach proposal
was accompanied by a cashier's check for $10,000, which was refunded to the unsuccessful
proposers, but is non-refundable to the preferred proposer (The Pointe at North Beach) to offset the
actual costs incurred by the City in evaluating responses and negotiation of an agreement. Further,
if the Pointe at North Beach had ultimately been successful in reaching agreement with the City, they
would have been responsible for compensating the documented fees of the City's third party
attorneys and advisors for the project, up to an amount of $75,000. Therefore, the $10,000 deposit
will be retained by the City and will be applied to the costs incurred to date which are estimated to
be in excess of $40,000 based upon advertising and consultant fees incurred.
Preliminary Market Analysis:
The preliminary market analysis indicates that the demand for additional goods and services needed
by the community matches supply of available vacant commercial space in the area. In order to
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November 8, 2000
Commission Memorandum
72'~ Street RFP
Page 4 -
experience an increase demand, a change in the conditions of the neighborhood and the market are
necessary. The market is comprised of two components: a residential community and a visitor base.
In order to effectuate change in these two markets, the consultant has identified specific strategies.
From the visitor market perspective, a tremendous opportunity has been identified to develop North
Beach as a niche destination for the family oriented leisure visitor market. To enhance the residential
market, the site should be used to promote educational programming, recreational programming,
leisure activity or commercial activity, but necessarily all of the above.
Ideally, a creative urban development scheme should be developed that links the 72nd Street site to
the water, to the adjacent parks, to new housing in the area, to the existing neighborhoods and
adjacent visitor accommodation facilities. Additionally, the consultant clearly has emphasized the
importance of creating a linkage to the Byron Carlyle so as to create a synergistic flow of activity that
may occur at both sites. The 72nd Street site should create an anchor that serves the cormnunity but
should not be developed as anisolated one-stop destination that does not integrate and complement
adjacent urban establishments.
The market analysis also identifies tremendous growth in the region for office space which is
expected to continue. To date, North Beach has not attracted this growth but should be able to attract
it as a component of the potential development on the site, compatible with other programmed uses.
While the 72nd Street site is a significant asset integral to North Beach's future development, it is
a component that is being analyzed in the context of the arm-wide strategy. Therefore, the
consultant is developing strategies that concentrate on the 72nd Street site in the context of the
strategy for the entire North Beach, making a tree community asset.
The North Beach Strategic Plan has identified strategic opportunities for the North Beach area.
Rather than re-issue an RFP at this time, the City's consultant concurs that the City issue a Request
for Qualifications (RFQ) to qualified and experienced real estate and development interests to submit
their qualifications and conceptual development proposals for the site. The RFQ will be evaluated
based upon the Developer's experience and their financial capacity. The submission of
qualifications will coincide with the finalization of the consultant's strategic recommendations which
will be discussed at the pre-proposal conference established as part of the RFQ process. Thereby,
a developer will ultimately be selected with which the City can negotiate to jointly conceive a
development proposal for the subject site that capitalizes on and enhances the area-wide strategic
goals and direction.
While the RFQ evaluation criteria will not be based on the development concepts submitted, the
following desired development concepts are outlined in the RFQ and are seen as enhancements to
the needs of the businesses, residents and visitors of the area:
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November 8, 2000
Commission Memorandum
72~a Street RFP
Page 5
Commercial Development to meet Residential goods and service needs, providing a linkage
and/or anchor between the 71st Street Commercial District and the Harding Townsite
Commercial District
Residential, mixed use project, that provides upgraded housing stock and product
Class A Office Space component that is compatible with other activity programmed for the
site and complementary to the two established adjacent business districts
Retail and/or restaurant establishments that promote pedestrian activity
Public Plaza (s) ("open space") facilitating enhancement of the special "open space" systems
unique to the urban character North Beach and the park areas to the east and west of the Site
Family oriented entertainment destination for residents and visitors
Enhanced Parking for the uses adjacent to the Site as well as the Ocean Terrace and upper
Collins. Avenue hotel districts
Expanded Support Facilities for cultural, arts, community theater and performance groups
that could locate in the North Beach area
· Educational and/or Public Institutions
Conclus~o.n;
Therefore, absent a final commitment from a movie theater operator, the Developer is unable to
finalize negotiations with the City. It is therefOre recommended that the City Commission authorize
the Administration to terminate negotiations with the successful proposer, the Pointe at North Beach,
as a result of their failure to comply with the terms of the approval set forth in Resolution No. 2000-
23816. Concurrently, the Administration is requesting authorization to issue a Request for
'Qualifications (RFQ) from developers to submit qualifications for the development of the 72nd
Street Site. The RFQ will require interested developers to submit their qualifications and
demonstrate their professional experience and range of experience in projects of similar scope and
complexity, evidence their financial capability to successfully undertake and complete the project
and present a proposed development concept. The City can then evaluate the submissions and select
a developer with whom to enter into negotiations and refine the proposed development project for
the site, incorporating the City's preferred development mix. The RFQ/Negotiate method allows the
Cify to competitively select the most qualified developer for the project, yet it does not require a
large investment of time and money by the developer alongside numerous competitors and secondly
it substantially reduces the time required to choose a developer. Attachment A, which will be
incorporated in the RFQ, provides a summary of the RFQ, including a description of the
development opportunity and the RFQ submittal requirements.
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