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Agreements CITY OF MIAMI BEACH OFFICE OF THE CITY ATTORNEY (:1 A~ tfPJ MEMORANDUM TO: Robert Parcher City Clerk "[\ \- L, \ Raul J. Aguila: First Assistant City Attorney RUSH SIGNATURE NEEDED FROM: SUBJECT: Loews Settlement Agreement .0-{) ~~ (2a-V'- <(;vt- ~.k DATE: March 20, 2000 Attached please find three (3) original Agreements pertaining to the Loews Settlement. Execution on behalf of the CitylRDA is needed by March 20, 2000. Please have the attached executed and return two (2) originals to the attention of Alex Rolandelli in the Economic and Community Development Department. Thank you for your immediate attention to this matter. Should you have any questions, please let me know. RJAlkw FIA TTOIAGlJR\\fEMOSILOEWSSTL RP Attachments c~ t-c(i f 7/ d' ,,/ //(7\. '_.{. RECEIVED BY: ,/ ') / ) r: ju,/ , / ,I} 1",.;.:..', ' i/.1"v.)ll cZ. J'0.({ljJ.,Ci:.x. 7Q,',;J , . Si'gn Name / / ? . ~' 1/1 /1-1'-..) .0 La (.i L I, (! tl-( P I Print Name ~3!~//( Date / ? ~Gf1 0/ I ?J?>> Micmli Beach Redevelopment Agency 1700 Convention Center Drive Miami Beach, Florida 33139 Telephone: (305) 673-7193 Fax: (305) 673-7772 REDEVELOPMENT AGENCY MEMORANDUM NO, 99- GtS November 17, 1999 TO: Chairman and Members of the Miami Beach Redevelop ent Agency FROM: Sergio Rodriguez Executive Director. SUBJECT: A RESOLUTIO OF THE CHAIRMAN AND MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY, AUTHORIZING THE ADMINISTRATION TO ENTER INTO A SETTLEMENT AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY AND LOEWS HOTEL CORPORATION, PROVIDING FOR A $140,000 REDUCTION IN THE DEVELOPER'S FEE, PAYABLE TO LOEWS IN ACCORDANCE WITH THE ANCHOR GARAGE DEVELOPMENT AGREEMENT, IN EXCHANGE FOR TERMINATING LOEWS' OBLIGATIONS UNDER THE RETAIL SPACE MASTER LEASE AGREEMENT. ADMINISTRATION RECOMMENDATION Adopt the Resolution ANALYSIS At the Redevelopment Agency Board meeting on July 7, 1999, the Administration reported that St. Moritz Hotel Corporation (Loews), the Developer of the Anchor Garage and Shops, was willing to reduce the Developer's Fee to $200,000 from $282,000 in exchange for terminating its obligations under the Development Agreement as well as the Retail Space Master Lease Agreement. The Developer's proposal essentially contemplated a monetary resolution of all outstanding issues relative to the garage construction including the substitute storefront system and the window tinting. The Administration recommended that without additional consideration in the form of a greater concession in the developer's fee and/or Loews agreement to maintain and install the storm shutters over an extended period oftime at no cost to the City/Agency, the Board should decline acceptance of the Developer's proposal. Since this time, the Developer and the Administration have continued to negotiate an acceptable settlement solution, which has resulted in the Developer offering to reduce its fee by 50 percent for a total for a total of $140,000. Since the Garage Development Agreem~t~~n!.laJ!t.~ifies S()UTti V()I~ Agenda It~m 3> ~ .. l2edevel()pment ()lstl1~t 9 Date 1\ - \,-9 t 5 the Developer except to the extent of any gross negligence or willful misconduct, it is doubtful that Loews will concede more than what is currently being offered. While the $140,000 amount proposed by Loews cannot fully remedy such issues as the substitute storefront/shutter system, it does however come closer to bridging the material cost difference between the shutter system and the originally specified impact resistant glass. It was previously reported to the RDA Board, that the cost to replace the shutter system with impact resistant glass has been estimated in excess of $350,000. The cost to remedy the tinting issue has been estimated at $52,000. As with its initial proposal., Loews has agreed to maintain the personnel overseeing the completion of the Loews Hotel to assist the City/RDA with the close-out of the Garage project and provide complete accounting records of the project. In exchange for reducing the Developer's Fee for the Garage project, Loews will terminate its obligations under the Retail Space Master Lease Agreement, leaving the RDA responsible for leasing and managing the Anchor Shops. This additional responsibility will be mitigated to a certain extent, since 82 percent of the retail space is already leased and the balance is under negotiation. Under the existing Master Lease Agreement, the Redevelopment Agency has already been responsible for coordinating and/or undertaking the maintenance and repair of the facility, while Loews has been serving as the City/RDA's leasing agent. As part of this agreement, Loews will also address certain outstanding issues including: 1) Continuing to facilitate/establish the process by which the tenants facing Collins Avenue can replace the tinted glass windows with an acceptable clear glass alternative which complies with Dade County product approval. The Developer has been working with its Mechanical Engineer and the City's Building Department to obtain approval for an acceptable clear glass alternative to the existing tinted glass. As of the writing of this report, the approval was pending a letter from the Engineer certifYing that the replacement glass actually complies with applicable energy rating requirements. 2) Resolving any outstanding financial claims by any of the sub-tenants relative to the build- out of the retail spaces. Paradizzo/Biker's Image has submitted a claim to the Master Tenant for approximately $18,000 for work they claim had to be done since their space was not ready upon occupancy. This matter is currently being assessed by the Developer 3) Continuing to negotiate any outstanding/pending lease proposals. As of the date of this report there are three pending leases involving the remaining available retail space for a total 3,636 feet. These proposals include South Beach Makeup, Inc., involving 752 square feet at $22 per square foot; South Beach Ice Cream, involving 721 square feet at $30 per square foot, and Stadlander Operating Company, (an upscale pharmacy/drugstore) interested in leasing 2,163 square feet at a rate of$30.00 per square foot. In relinquishing its obligations under the Master Lease Agreement, Loews will not receive its 5% share of the lease revenues, resulting in an estimated $30,000 in annual savings for the CitylRDA. Under the terms of the Master Lease Agreement, Loews remits 95% of gross rents to the City/RDA and retains 5% for administrative and overhead costs. Since the City/RDA may legally be precluded from paying leasing commissions directly, Loews has offered (as part of this settlement), to continue paying lease commissions subject to being reimbursed by the City/RDA. 6 Since the Retail Space Master Lease Agreement is a component-agreement of the Loews Hotel Development Agreement, the City Attorney is reviewing provisions/conditions in the agreements in order to amend and/or terminate the Master Lease Agreement. To this end, it is recommended that the Redevelopment Agency Board authorize the Administration to enter into a Settlement Agreement with Loews, providing for a $140,000 reduction in the Developer's Fee payable to Loews, in accordance with the Anchor Garage Development Agreement, in exchange for terminating Loews' obligations under the Retail Space Master Lease Agreement. s;e~~~ T:\AOENDA\1999\NOV1799\RDAILOEWS MEM 7 TERMINATION OF RETAIL SPACE MASTER LEASE AGREEMENT THIS TERMINATION OF RET AIL SP ACE MASTER LEASE AGREEMENT (the "Termination Agreement "), is made as of the 02 0 day of fv\ Q v-ch , 2000, by and between MIAMI BEACH REDEVELOPMENT AGENCY, a public body corporate and politic, as Landlord, and MB REDEVELOPMENT, INC., a Florida corporation, as Master Tenant. WIT N E SSE T H: WHEREAS, Landlord and Master Tenant entered into that certain Retail Space Master Lease, dated September 20, 1996 (the "Master Lease"), whereby Landlord leased to Master Tenant, and Master Tenant leased from Landlord, the Retail Space, as defined in the Master Lease, located in an area bounded by Washington and Collins Avenues in the proximity of 16th Street, City of Miami Beach, Miami-Dade County, Florida, and commonly known as the Anchor Shops at South Beach; and WHEREAS, Landlord and Master Tenant desire to cancel and terminate the Master Lease, effective as of the Termination Date, as hereinafter defined, pursuant to the terms of this Termination Agreement. NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Master Tenant agree as follows: 1. Incorporation of Recitals; Defined Terms. The above recitals are true and correct and are incorporated herein as if set forth in full. All defined terms used herein shall have the same meaning as set forth in the Master Lease, except as otherwise noted. 2. Termination Date. The Master Lease is hereby terminated for all purposes as of the date of this Termination Agreement (the "Termination Date"). 3. Payment and Reimbursement of Sublease Costs. Any and all reasonable costs for subtenant improvements, leasing commissions, liability insurance procured by Master Tenant, and all other reasonable customary out-of-pocket costs incurred by Master Tenant in connection with the Subleases through the Termination Date, including, without limitation, reasonable attorneys' fees and other costs incurred in connection with the procuring and negotiation of Subleases or disputes concerning Subleases, not reimbursed to Master Tenant by the Subtenants, shall be paid for directly by Landlord (it being agreed that Master Tenant shall have no responsibility for any such costs or expenses); provided, however, that such costs shall not include overhead, wages, salaries and other compensation and fringe benefits. Such costs shall be paid by Landlord within thirty (30) days after Landlord's receipt of an invoice therefor together with reasonable supporting documentation. In addition, to the extent that Master Tenant has paid any such costs in connection with the Subleases prior to the Termination Date, such costs, as well as any other costs reimbursable to Master MI993460007 Tenant pursuant to the Master Lease, will be reimbursed to Master Tenant by Landlord within thirty (30) days after Landlord's receipt of an invoice therefor together with reasonable supporting documentation. 4. Assignment and Assumption of Sublease Agreements and Security Deposits. Master Tenant does hereby assign, transfer, set over, and deliver unto Landlord all of the subleases and other agreements pertaining to the Retail Space as of the Termination Date (collectively, the "Sublease Agreements"), including, without limitation, the "Subleases," the "Guarantys," and the "Commission Agreements," as such terms are described in Exhibit A attached hereto and made a part hereof, including, without limitation, all of the rights, benefits, and privileges of Master Tenant thereunder, including without limitation, all security deposits described in Exhibit A attached hereto. Master Tenant shall not be responsible under the Sublease Agreements for the discharge or performance of any duties or obligations to be performed or discharged by the Master Tenant thereunder regardless of whether such duties or obligations accrued before the Termination Date or accrue thereafter. Landlord hereby assumes and agrees to perform all of the terms, covenants and conditions of the Sublease Agreements on the part of the Master Tenant which are required to be performed, whether before or after the Termination Date, including, without limitation, the return of security deposits and the payment of commissions. In addition, in connection with the Sublease Agreements, Master Tenant shall be liable solely for its conversion, gross negligence and willful misconduct, and shall not in any event be liable or responsible for any act or omission of any Subtenant. Landlord shall indemnify and hold Master Tenant harmless from all other loss, cost, liability, claim, damage and expense (including, without limitation, reasonable attorneys' fees and disbursements), penalties and fines, incurred by Master Tenant in connection with the Sublease Agreements, including, without limitation, any claims by a Person against Master Tenant or its Affiliates arising from (a) the use or occupancy or manner of use or occupancy of the Retail Space by Landlord or any Subtenant or any Person claiming through or under Landlord or any Subtenant or (b) any acts, omissions or negligence of Landlord (made in its proprietary capacity, if Landlord is the Agency, the City or any instrumentality of the Agency or the City) or any Subtenant or any Person claiming through or under such Landlord (in its proprietary capacity only, if Landlord is the Agency, the City or any instrumentality of the Agency or the City) or such Subtenant, or of the contractors, agents, servants, employees, guests, invitees or licensees of Landlord (in its proprietary capacity only, if Landlord is the Agency, the City or any instrumentality of the Agency or the City) or such Subtenant, or any Person claiming through or under such Person, or (c) any breach by Subtenants under the Subleases, in each case, either before or after the Termination Date, except to the extent any of the foregoing is caused by the gross negligence or willful misconduct of Master Tenant. Within five (5) business days after the Termination Date, Master Tenant shall send letters to the Subtenants instructing the Subtenants to pay rent to the Landlord, in the form attached hereto and made a part hereof as Exhibit B. 5. Release of Liability. Except as otherwise expressly set forth in this Termination Agreement or the Master Lease, including, without limitation, Section 15.1 of the Master Lease, as of the Termination Date, Landlord and Master Tenant hereby release and forever discharge each other and their predecessors, successors, assigns, affiliates, partners, shareholders, officers, directors, employees, 2 MI993460.007 agents, and elected or appointed officials (collectively, the "Released Parties") of and from any and all manner of action and actions, cause and causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, duties, obligations, undertakings, variances, trespasses, damages, judgments, executions, claims, and demands whatsoever, in law or in equity, whether known or unknown, which Landlord and Master Tenant, as applicable, each ever had, now has, or which any successor or assign of the Landlord and Master Tenant, as applicable, hereafter can, shall, or may have, against the Released Parties, for, upon, or by reason of any matter, cause, or thing whatsoever, from the beginning of the world through the Termination Date arising from or related to the Master Lease. 6. Surrender of Retail Space. Landlord acknowledges and agrees that, as of the Termination Date, Master Tenant has surrendered and vacated the Retail Space, and that Landlord has accepted the Retail Space, in the condition existing on the Termination Date, subject to the rights of the subtenants under the Subleases. 7. Garage Easement Agreement. Landlord and Master Tenant acknowledge and agree that (a) this Termination Agreement shall have no effect whatsoever on the rights, benefits, and privileges granted to Master Tenant pursuant to the Garage Easement Agreement and (b) the Garage Easement Agreement shall remain in full force and effect, in accordance with its terms, after the Termination Date. 8. First Amendment to Garage Development Agreement. Simultaneously with the execution of this Termination Agreement, Landlord and St. Moritz Hotel Corp. (an affiliate of Master Tenant) shall execute and deliver to each other that certain First Amendment to Garage Development Agreement. But for the execution and delivery of the First Amendment to Garage Development Agreement, the parties would not have agreed to execute and deliver this Termination Agreement. 9. City of Miami Beach. The City is made a party to this Termination Agreement solely to acknowledge the termination of the Master Lease pursuant to the terms hereof. 10. Miscellaneous. This Termination Agreement supersedes all prior discussions and agreements between Landlord and Master Tenant with respect to the subject matter hereof and contains the sole and entire understanding between Landlord and Master Tenant with respect thereto. This Termination Agreement shall be binding upon the parties hereto, their successors and assigns, and shall be construed in accordance with the laws of the State of Florida. If any provision of this Termination Agreement is held or rendered illegal or unenforceable, it shall be considered separate and severable from this Termination Agreement and the remaining provisions of this Termination Agreement shall remain in force and bind the parties as though the illegal or unenforceable provision had never been included in this Termination Agreement. This Termination Agreement may not be modified except by agreement in writing executed by Landlord and Master Tenant. This Termination Agreement may be executed in counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement. (signatures on next page) 3 M1993460.007 IN WITNESS WHEREOF, Landlord and Master Tenant have executed this Termination Agreement as of the day and year first above written. MIAMI BEACH REDEVELOPMENT AGENCY ATTEST: By: ~-J- <2 . )~u..,..-k:;~,- j ~ ~ Robert Parcher lj Secretary By: Neis.mdin Chairman APPROVED AS fO fORM & LANGUAGE & FOR exECUTION MB REDEVELOPMENT, INC. ~', 'J,-? (I '..~ ;>-2() -dV R pment Agency Dot'i Geneml C0~if"I~,,1 ATTEST: Secretary By: ~ SOLEL Y FOR THE PURPOSE OF PARAGRAPH 9 OF THE FOREGOING TERMINATION AGREEMENT: CITY OF MIAMI BEACH ATTEST: By: }U-I-'fl.<.J-.- ' E, )t 1 0 ~{j;;-Ley if Robert Parcher V City Clerk By: Neise~!in Mayor APPROVED AS TO FORM & LANGUAGE & FOR EXECUTtON ,t~&y~L ."2r )()-i)~ Ooire 4 M1993460.007 EXHIBIT A Subleases: 1. Sublease dated October 8, 1997 between Xando Florida, Incorporated (as assignee to DNA, Inc.) and MB Redevelopment, Inc. 2. Sublease dated June 8, 1998 between Flagler System Management, Inc. and MB Redevelopment, Inc. 3. Sublease dated June 11, 1998 between Cadiac, Inc. and MB Redevelopment, Inc. 4. Sublease dated August 12, 1998 between Budget Reservation Service Corp. and MB Redevelopment, Inc. 5. Sublease dated September 8, 1999 between Abkey No. 17, Inc. and MB Redevelopment, Inc. Guarantys: I. Guaranty from Xando, Incorporated dated December 31, 1998. 2. Unconditional Completion Guaranty from Betty G. Amos dated September 8, 1999. Commission Agreements (between MB Redevelopment, Inc. and the following brokers): 1. Newmark & Company Real Estate, Inc. (in connection with Xando Florida, Incorporated Sublease ). 2. ComReal of Miami, Inc. (in connection with Cadiac, Inc. Sublease). 3. Gables Professional Realty, Inc. (in connection with Abkey No. 17, Inc. Sublease). Security Deposits Subtenant Amount Flagler System Management, Inc. $17,081.00 {mvt ~t ~ \~ {l(A;h_~ N Cadiac, Inc. Budget Reservation Service Corp. 1. As required by Section 2.9 of the Sublease, Hug MB Redevelopment, Inc. upon its notification that the ] P.A. has refused to disburse the one-half (1/2) held in its -- this amount to Eddie Nurieli, e. M1993460.007 EXHIBIT B FORM OF LETTER TO SUBTENANTS ,2000 BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED Gentlemen/Ladies: This letter shall advise you that the Master Lease between the Miami Beach Redevelopment Agency and MB Redevelopment, Inc. regarding the retail space at the Anchor Shops at South Beach has been terminated effective as of . As provided in Section 10.2 of your Sublease with MB Redevelopment (and the Subordination, Non- Disturbance and Attornment Agreement between your company and the Agency), the Agency is your new landlord. From and after the date hereof, any and all rent payments and other correspondence should be addressed to Sincerely yours, MB REDEVELOPMENT, INC., a Florida corporation By: Name: Title: MI993460.007 FIRST AMENDMENT TO GARAGE DEVELOPMENT AGREEMENT THIS FIRST AMENDMENT TO GARAGE DEVELOPMENT AGREEMENT (the "First Amendment") is made and entered into as of the ~ day of JJo If r:.l1 , 2000, by and between MIAMI BEACH REDEVELOPMENT AGENCY, a public body corporate and politic (the "Owner") and ST. MORITZ HOTEL CORP., a Florida corporation (the "Developer"). W I I N g ~ ~ g I H: WHEREAS, Owner and Developer entered into that certain Garage Development Agreement, dated September 20, 1996 (the "Garage Development Agreement"), whereby Owner and Developer agreed that Developer would act as developer of the Project, as defined in the Garage Development Agreement, located in an area bounded by Washington and Collins Avenues in the proximity of 16th Street, City of Miami Beach, Miami-Dade County, Florida, and commonly known as the Anchor Shops and Garage, with the responsibility for the coordination of the completion of the design, development and construction thereof for Owner, pursuant to the terms and conditions set forth in the Garage Development Agreement; and WHEREAS, Owner and Developer desire to modify and amend the Garage Development Agreement, on the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the mutual covenants contained herein and in consideration ofTen and Noll 00 ($10.00) Dollars and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Owner and Developer hereby agree as follows: 1. Incorporation of Recitals. The above recitals are true and correct and are incorporated herein as if set forth in full. 2. General Provisions. All defined terms in this First Amendment shall have the same meaning as in the Garage Development Agreement, except as otherwise noted. Except as amended and modified by this First Amendment, all of the terms, covenants, conditions, and agreements of the Garage Development Agreement shall remain in full force and effect. In the event of any conflict between the provisions of the Garage Development Agreement and the provisions of this First Amendment, this First Amendment shall control. 3. General Contractor's Agreement. The parties acknowledge and agree that the General Contractor's Agreement entered into by Owner and the GC was a "stipulated sum" form of General Contractor's Agreement and not a guaranteed maximum price ("GMP") contract. Therefore, any references in the Garage Development Agreement to GMP are hereby deleted. 4. Development Fee. Notwithstanding anything to the contrary contained in the Garage Development Agreement, the Development Fee set forth in Section 2.14 of the Garage Development Agreement is hereby reduced to One Hundred Forty-One Thousand and No/100 ($141,000.00) Dollars. MI993460.008 The Development Fee is deemed to be earned in full and shall be paid by Owner to Developer simultaneously with Owner's execution and delivery of this First Amendment. 5. Obligations of Developer. From and after the date of this First Amendment, Owner and' Developer acknowledge and agree that (a) Developer shall have no further obligations or duties under the Garage Development Agreement, as modified by this First Amendment, (b) Developer has satisfactorily completed its obligations under the Garage Development Agreement, and (c) Owner has no claims, offsets, or any action or causes of action against the Developer directly or indirectly relating to the Garage Development Agreement. 6. Termination of Retail Space Master Lease Agreement. Simultaneously with the execution of this First Amendment, Owner and MB Redevelopment, Inc. (an affiliate of Developer) shall execute and deliver to each other that certain Termination of Retail Space Master Lease Agreement. But for the execution and delivery of the Termination of Retail Space Master Lease Agreement, the parties would not have agreed to execute and deliver this First Amendment. 7. Entire Agreement. The Garage Development Agreement, as modified by this First Amendment, sets forth the entire agreement between the Owner and Developer concerning the subject matter of the Garage Development Agreement, and there are no other agreements or understandings between them regarding such subject matter. 8. City of Miami Beach. The City is made a party to this First Amendment solely to acknowledge its consent to the terms hereof. (signatures on next page) MI993460.008 IN WITNESS WHEREOF, Owner and Developer have executed this First Amendment as of the day and year first above written. ATTEST: MIAMI BEACH REDEVELOPMENT AGENCY if By: APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION BY:))M~~ p. ~~ct~~'3 W Robert Parcher . l) . Secretary Neisen Kasdin Chairman ~'~ R eYe opment Agency General CO!,,,,,,,, 3".2'-C]~/ Dote ST. MORITZ HOTEL CORP. ATTEST: Secretary By: ~ SOLEL Y FOR THE PURPOSE OF PARAGRAPH 8 OF THE FOREGOING FIRST AMENDMENT: CITY OF MIAMI BEACH ATTEST: B . )L<-!.--,L< A <(:. )C(-tf-rl.l-ttl"",u y. -'>'. .f 4 Robert Parcher t City Clerk By: 1J/{ Neisen Kasdin Mayor APPROVED AS TO FORN\ & LANGUAGE & FOR EXECUTION ilL 'i<<j}!,tL:. Ciiy Attorney '3 '-'2-1" m/ Oate MI993460.008