Amendment No. 2 First Reading
First Reading
4-11-07
AMENDMENT NO.2
TO THE DEVELOPMENT AGREEMENT
BETWEEN
THE CITY OF MIAMI BEACH, FLORIDA
AND
AR&J SOBE, LLC
DATED MAY 18, 2005
This Amendment NO.2 to the Development Agreement made and entered
this day of ,2007, by and between the CITY OF MIAMI
BEACH, a Municipal Corporation existing under the laws of the State of
Florida, having its principal offices at 1700 Convention Center Drive,
Miami Beach, Florida 33139 (hereinafter referred to as CITY), and AR&J
SOBE, LLC., a Florida limited liability company, having offices at 2665
South Bayshore Drive, Suite 1200, Coconut Grove, FhFlorida, 33133
(hereinafter referred to as DEVELOPER).
RECITALS
A. AR&J Sobe, LLC (Developer) anticipates
constructing a project on the land bordered by 5th
Street, 6th Street, Alton Road and Lenox Avenue,
(which includes the Alley, as defined below)
containing a grocery store and other retail,
commercial, office and/or restaurant uses and
parking garage (the Project).
B. On February 23,2005, in consideration of the public
benefits provided by Developer, the Mayor and City
Commission adopted Resolution No. 2005-25827,
approving and authorizing the vacation of the City's
rights to an alley located adjacent to the proposed
Project (the Alley).
C. Developer and City agreed to the terms and
conditions for vacating the Alley; Resolution No.
2005-25827 also approved and authorized the
parties to execute a Vacation Agreement.
D. On May 18, 2005, in consideration of the public
benefits provided by Developer, the Mayor and City
Commission adopted Resolution No. 2005-25899,
1
First Reading
4-11-07
approving and authorizing a Development Agreement
for the Project by and between the City and
Developer.
E. On July 12, 2006, pursuant to Resolution No.
, the Mayor and City Commission
approved Amendment No. 1 to the Alley Vacation
Agreement, said amendment providing for uniformity
of dates in the Vacation Agreement to coincide with
the dates in the Development Agreement, with
respect to the Developer's deadline within which to
execute a supermarket lease for the Project and for
commencement of construction of the Project.
F. On February 14, 2007, pursuant to Resolution No.
2007-25471. the Mayor and City Commission
approved Amendment No. 2 to the Vacation
Agreement, said amendment further providing for
uniformity of dates in the Vacation Agreement to
coincide with the dates in the Development
Agreement, with respect to the Developer's deadline
within which to execute the supermarket lease and
for commencement of construction of the Project.
G. Developer previously obtained a one-year extension
to obtain a building permit from the Historic
Preservation and Design Review Boards, said
extension expiring on February 17, 2007, which
building permit was timely obtained by Developer.
H. On March 14, 2007, pursuant to Resolution No.
2007 -26492, the Mayor and City Commission
approved a First Amendment to the Development
Agreement, said amendment providing for, among
other things, extendingextensions to the date~
respectively, for commencement and completion of
construction of the Project.
I. +A-isThe followinq Amendment No. 2 to the
Development Agreement is being proposed to adjust
the parking space allocation between the City and
Developer applicable to the Project,~ increase the
City's Transit Facility Contribution,~ allocate to the
City the responsibility to pay for certain metered
2
First Reading
4-11-07
parking spaces contiguous to the Project previously
in part payable by the Developer,~ allocate to the City
the responsibility to pay for certain legal fees and
costs of drafting and recording a Declaration of
Condominium applicable to part of the Project
previously in part payable by the Developer,~ and re-
allocatelng revenues and operating expenses of the
Project consistent with the adjustment to the parking
space ratio between the City and Developer.
NOW, THEREFORE, the parties hereto, and in consideration of the
mutual promises, covenants, agreements, terms, and conditions herein
contained, and other good and valuable consideration, the respect and
adequacy are hereby acknowledged, do agree as follows:
1 . ABOVE RECITALS.
The above recitals are true and correct and are incorporated as a
part of this Amendment NO.2.
2. MODIFICATIONS.
A. The following terms in Article 1, entitled "Definitions~" of the
Development Agreement are amended as follows:
(i) "City Spaces" means the 500 ~ parking spaces
within the Transit Facility that are to be conveyed to
the City and located substantially as shown on
Exhibit "I" hereto. The City Spaces shall be
comprised of the "City Supermarket Spaces" and
"City Non-Supermarket Spaces", as defined below.
Anything in this Agreement to the contrary
notwithstanding, in order to satisfy potential FAR,
parking and governmental requirements, up to 14
(the precise number of which shall be determined by
Developer based on the governmental parking
requirements imposed for the issuance of the
building permits and final certificate of occupancy for
the Project, not to exceed 14) of the City Non-
Supermarket Spaces shall be owned jointly by the
City and the Developer as tenants in common, each
as to an undivided 50% interest (and Developer shall
retain said 50% interest when it conveys said up to
14 spaces to City), but (i) for purposes of City's
3
First Reading
4-11-07
Transit Facility Contribution, the allocation of
Revenues and Operating Expenses, allocation of
payment in the event of condemnation,
determination of the purchase price in the event of a
sale and all similar purposes under the Declaration,
City shall be deemed the sole owner of such up to 14
spaces, (ii) Developer shall, to the extent an
exemption from taxes would otherwise be available
in respect of said up to 14 spaces, pay any taxes in
respect of said spaces (otherwise, City shall pay
taxes on said spaces), (iii) Developer may, at any
time convey its interest in any or all of said up to 14
spaces to the City for no additional consideration,
and the City shall accept such conveyance and (iv)
such up to 14 spaces shall, at developer's option, be
the last spaces to be reconveyed to Developer in the
case of a condemnation, and if any of said up to 14
spaces are at any time condemned, City shall, for no
consideration, convey to Developer, at Developer's
option, an equivalent interest in other City Non-
Supermarket Spaces (or Supermarket Spaces, if
there are no more City Non-Supermarket Spaces) so
that Developer will continue to own, after the
condemnation, if it so elects, up to the same number
of spaces that it owned prior to the condemnation as
a 50% co-tenant. The provisions of the foregoing will
be incorporated into and implemented by the
Declaration at the time of its preparation. Further,
anything in this Agreement to the contrary
notwithstanding, if Developer, in order to satisfy
potential FAR, parking and governmental
requirements, requires more than the 14 spaces
provided for above based on the governmental
parking requirements imposed forthe issuance of the
building permits and final certificate of occupancy for
the Project, the Parties shall negotiate in good faith
to attempt to arrive at a mutually satisfactory
solution, failing which Developer may unilaterally
reduce the number of City Non-Supermarket Spaces
to be sold to the City under this Agreement by the
amount of the shortage in parking spaces required
by Developer, whereupon the City's Transit Facility
Contribution allocable to parking spaces shall be
4
First Reading
4-11-07
reduced by an amount equal to the per parking
space amount multiplied by the reduction in the
number of parking spaces sold by the Developer to
the City (and Developer shall promptly reimburse the
City for any excess payment paid by the City in
respect therefore, if any).
(ii) "City's Transit Facility Contribution" shall mean
approximately $27,000 $16,395.03 per parking
space (being calculated by taking $13,500,000
$8,771,340 and dividing same by the actual number
of City Spaces) constituting the City Spaces plus an
additional sum equal to the actual Hard Costs and
Soft Costs incurred by Developer for the City
Elevator plus an additional sum equal to the actual
Hard Costs and Soft Costs incurred by Developer for
the Transit Facility Dedication Area Finishes (but in
no event to exceed $356,187.60 for the City Elevator
and $118,204.80 for the Transit Facility Dedication
Area Finishes) plus the additional sum of $333,333
for the Transit Facility Dedication Area, all of which
shall be disbursed by City pursuant to Section 6.2 of
this Agreement. Reference in the Development
Aqreement to the amount of the "City's Transit
Facility Contribution" includinq, but not limited to
Sections 5.3 and Section 12.1 (f), shall be
$14,307,725.40.
(iij) "Developer Spaces" means all parking spaces
(currently contemplated to be approximately 581
Me) located within the Transit Facility except for the
City Spaces, and located substantially as shown on
Exhibit "I" hereto. The Developer Spaces shall
include a portion of the City Code required parking
spaces for the contemplated supermarket user. The
Developer Spaces shall not include any of the City
Spaces that are co-owned by Developer as tenant in
common with the City.
B. Section 6.2.1 (iv) of the Development Agreement is modified
to provide that the City shall horo::lfteraqrees. simultaneously with
the satisfaction of the Conditions, to pay the cost of removal of tRe
six (6) metered on street parking spaces on the south side of 6th
Street between Lenox Avenue and Alton Road, at a cost to the City
5
First Reading
4-11-07
of $90,000 ($15,000 per space). Developer is no longer
responsible for its ~one-half share of metered parking space
removal cost under Section 6.2.1 (iv) (i.e., a cost of $45,000 for cost
of removal of three (3) metered on street parking spaces), nor,
accordinqly. shall Developer be entitled to any reimbursement.
refund, and/or credit. as a result of the City's aqreement to
undertake same, and any such monies shall inure to the benefit of
the Cityj.
C. Section 6.3(c)(i) and (ii) of the Development Agreement
regarding "Declaration Costs~" is modified to provide that the City
shall solely pay (i) the legal fees and cost of drafting the
condominium documents~ twhether to Greenberg Traurig or such
other law firm acceptable to the Cityj (estimated to be
approximately $30,000, assuming minimal negotiation and
redrafting), and (ii) the cost of recording the Declaration.
D. The third sentence of Section 4(e)(iii) of Exhibit "E" of the
Development Agreement ("Material Terms of Declaration") is modified as
follows:
The cost of maintaining, repairing, insuring, and, when necessary,
replacing those portions of the Property (or components thereof), including
the Garage, as enumerated on Schedule 1 not technically a part of the
Retail Space (the "Operating Expenses"), shall be allocated to the Garage
and shall ultimately be payable by the City and Developer in proportion to
the number of City Spaces and Retail Spaces owned by each from time to
time in relation to the total of all Retail Space and City Spaces in the
Garage from time to time (initially, the City will pay 500/1081 = 46.25%
and Developer will pay 53.75% 636/1081 - 19.19% and Developer will
pay 60.61 % based on contemplated 1081 total parking spaces in the
Garage; the City's share shall hereinafter be referred to as the "City
Fraction", and shall be adjusted from time to time if and at the time, if any,
that the ratio of City Spaces to Developer Spaces changes).
E. Schedule 1 to Exhibit "E" of the Development Agreement
("Material Terms of Declaration") is modified to incorporate itemSection
2(D) above.
3. OTHER PROVISIONS.
All other provisions of the Development Agreement, as amended,
are unchanged.
6
First Reading
4-11-07
4. DEFINED TERMS.
Capitalized terms shall have the same meaning as set forth in the
Agreement unless otherwise defined herein.
5. RATIFICATION.
The CITY and DEVELOPER ratify the terms of the Development
Agreement, as amended by this Amendment NO.2.
fREMAINDER OF PAGE INTENTIONALLY LEFT BLANKl
7
First Reading
4-11-07
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment NO.2 to be executed in their names by their duly authorized
officials as of the date first set forth above.
ATTEST:
CITY OF MIAMI BEACH
City Clerk
By
Mayor
ATTEST:
DEVELOPER:
AR&J SOBE PARTNERS, LLC
a Florida limited liability company, by
Berkowitz Limited Partnership, its
manager by Berkowitz, LLC, its
general partner
Signature
By
Jeffrey L. Berkowitz, Manager
Print Name/Title
f:\atto\agur\agreemnt\5th and alton (potamkin) - amend. #2 to dev. agreement (redline 4-9-07).doc
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
8