2007-26526 Reso
RESOLUTION NO. 2007-26526
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, APPROVING ON SECOND
AND FINAL READING, AND AUTHORIZING THE MAYOR AND
CITY CLERK TO EXECUTE, AMENDMENT NO.2 TO THE
DEVELOPMENT AGREEMENT BETWEEN THE CITY OF MIAMI
BEACH AND AR&J SOBE, LLC, DATED MAY 18, 2005, FOR THE
DEVELOPMENT OF THE PROJECT PRESENTLY REFERRED TO
AS "FIFTH AND ALTON"; SAID AMENDMENT REVISING THE
DEFINITION OF THE TERMS "CITY SPACES", "DEVELOPER
SPACES", AND "CITY'S TRANSIT FACILITY CONTRIBUTION", AS
SAID TERMS ARE DEFINED IN THE DEVELOPMENT
AGREEMENT; INCREASING THE CITY'S TRANSIT FACILITY
CONTRIBUTION FROM $9,500,000 TO $14,397,725.40;
REQUIRING THE CITY TO ASSUME THE COST OF REMOVAL OF
THE SIX (6) METERED ON-STREET PARKING SPACES ON THE
SOUTH SIDE OF 6TH STREET, BETWEEN LENOX AVENUE AND
ALTON ROAD, AT AN ESTIMATED COST OF $90,000; REQUIRING
THE CITY TO ASSUME THE COST OF PAYING THE LEGAL FEES
FOR THE DRAFTING OF CONDOMINIUM DOCUMENTS FOR THE
PROJECT, ESTIMATED TO BE APPROXIMATELY $30,000; AND
REVISING THE "ALLOCATION OF REVENUES AND OPERATING
EXPENSES" (EXHIBIT "E" TO THE DEVELOPMENT
AGREEMENT); AND FURTHER APPROPRIATING $10,897.725.40
FROM PARKING FUNDS, IN ACCORDANCE WITH THE
PROVISIONS OF THE AMENDED DEVELOPMENT AGREEMENT.
WHEREAS, on June 7, 2000, the Mayor and City Commission adopted Resolution
No. 2000-23963, designating the area bounded by 6th Street to the North; 5th Street to the
South; Alton Road to the West; and Lenox Avenue to the East, as a Brownfield site to
promote the environmental restoration and economic redevelopment of the area; and
WHEREAS, AR&J Sobe, LLC (Developer) intends to construct the project known as
"Fifth and Alton", contemplated to be a multi-level commercial building to be used for
supermarket/retail/restaurant space and its appurtenances, and a parking garage on
property bounded on the North by 6th Street; on the South by 5th Street; on the West by
Alton Road; and on the East by Lenox Avenue (Project); and
WHEREAS, said Project is contemplated to contain approximately 179,000 square
feet of commercial space, including an approximately 45,000 square foot supermarket,
transit elements, and a parking garage with approximately 1,100 parking spaces; and
WHEREAS, on May 16, 2005, the Mayor and City Commission adopted
Resolution No. 2005-25899, approving on Second and Final Reading, a Development
Agreement between the City and Developer, for the development of the Project, at a total
cost to the City of $9,500,000; and
WHEREAS, on February 23, 2005, as a component of the Project, and in
consideration of the public benefits being provided by Developer with respect to
development of the Project, the Mayor and City Commission adopted Resolution No. 2005-
25827, approving and authorizing the Mayor and City Clerk to execute a Vacation
Agreement, vacating a portion of a City alley located adjacent to the proposed Project (the
Alley); which Vacation Agreement was subsequently amended on July 12, 2006, and
February 14, 2007, respectively; and
WHEREAS, on March 14, 2007, pursuant to Resolution No. 2007-26492, the Mayor
and City Commission approved a First Amendment to the Development Agreement,
modifying the dates by which the Developer must obtain a building permit, secure a
supermarket lease, and commence and complete construction; and
WHEREAS, at Developer's request, the City and Developer have been negotiating a
new price per parking space for the City's contribution, pursuant to a proposed Amendment
NO.2 to the Development Agreement; and
WHEREAS, among the provisions addressed in Amendment NO.2 are: the
changes to the definitions of "City Spaces", from 535 to 500 spaces; "Developer Spaces",
from 541 to 586 spaces, and "City's Transit Facility Contribution", from $16,395 per parking
space to $27,000 per parking space; and
WHEREAS, Amendment No. 2 provides that the City agrees to pay the cost of
removal of the 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 of $90,000; and
WHEREAS, Amendment No 2 provides that the City shall solely pay the legal fees
and cost of drafting the condominium documents and the cost of recording the Declaration
of Condominium; and
WHEREAS, Amendment No. 2 includes a modification to Exhibit "E" of the
Development Agreement, to reflect the new ratio of City Spaces to Developer Spaces, for
the purpose of allocating revenues and operating expenses; and
WHEREAS, the provisions of Amendment NO.2 increase the total City contribution
(defined as the "City's Transit Facility Contribution"), from $9,500,000 to $14,397,725.40;
and
WHEREAS, at its regular meeting on April 11, 2007, the Mayor and City
Commission approved Amendment NO.2 to the Development Agreement on First Reading,
pursuant to Resolution No. 2007-26518; and
WHEREAS, the Admini~tration would recommend that the Mayor and City
Commission hereby approve Amendment No. 2 to the Development Agreement, on
Second and Final Reading.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission hereby approve, on Second and Final Reading, and authorize the Mayor and
City Clerk to execute, Amendment NO.2 to the Development Agreement between the City
of Miami Beach and AR&J Sobe, LLC, dated May 18, 2005, for the development of the
Project, presently referred to as "5th and Alton"; said Amendment revising the definition of
the terms "City Spaces", Developer Spaces", and "City's Transit Facility Contribution", as
said terms are defined in the Development Agreement; increasing the City's Transit Facility
Contribution from $9,500,000 to $14,397,725.40; requiring the City to assume the cost of
removal of the six (6) metered on-street parking spaces on the South side of 6th Street,
between Lenox Avenue and Alton Road, at an estimated cost of $90,000; requiring the City
to assume the cost of paying the legal fees for the drafting of condominium documents for
the Project, estimated to be approximately $30,000; and revising the "Allocation of
Revenues and Operating Expenses" (Exhibit "E" to the Development Agreement); and
further appropriating $10,897,725.40 from Parking Funds, in accordance with the
provisions of the amended Development Agreement.
PASSED AND ADOPTED this 25th
MAYOR
ATTEST:
1/ku~ Pct1~
CITY CLERK
Robert Parcher
David Dermer
T :\AGENDA \20071apr11 07lRegularlPotamkin. RES.doc
APPROVED AS TO
FORM & LANGUAGE
& FOR . CUTION
~
Date
COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution approving Amendment Two to the Development Agreement between the City and AR&J
Sobe, LLC, on second readin ,for the ro"ect known as "Fifth and Alton".
Ke Intended Outcome Su orted:
Increase parking opportunities and enhance resident satisfaction with commercial service options.
Issue:
Shall the Mayor and City Commission approve Amendment Two to the Development Agreement,
modif in the rice er s ace and the number of cit s aces?
Item Summa IRecommendation:
SECOND READING AND PUBLIC HEARING
On May 16, 2005, the Mayor and City Commission adopted Resolution No. 2005-25899, approving a
Development Agreement between the City of Miami Beach and AR&J Sobe, LLC, for the development of Fifth
and Alton, a vertical retail center/parking garage. This amendment has the effect of adjusting the price per
space from $16,395 to $27,000 and reducing the number of spaces from 535 to 500.
On January 10, 2007, the Finance and Citywide Projects Committee discussed the proposed amendments to
the Development Agreement and Alley Vacation Agreement, as well as a discussion on the increasing
construction costs. On February 14, 2007, the Mayor and City Commission approved Amendments to the
Vacation Agreement and to the Development Agreement on first reading. The second reading and final
approval of Amendment One to the Development Agreement occurred on March 14,2007. This amendment
was approved on first reading on April 11, 2007.
The Administration has met with the developer to negotiate a new price per parking space, as directed by
the Finance and Citywide Projects Committee. The attached Second Amendment to the Development
Agreement reflects the outcome of these negotiations. If approved on first reading, the second reading
and ublic hearin will take lace on A ril 25, 2007.
Adviso Board Recommendation:
Finance and Cit
Financial Information:
Source of Amount Account Approved
Funds: 1 $4,397,725.40 Parking Funds due to increase
D 2 $3,000,000 Parking Funds to replace South
Pointe fundinq
3 $3,500,000 Parking Funds to replace FTA
fundinq
OBPI Total $10,897,725.40
Cit Clerk's Office Le islative Trackin :
Kevin Crowder, Economic Development, xt. 6186
City Manager
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MIAMIBEACH
AGENDA ITEM
DATE
~7A
II-/Zo)/07
.
lD
MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
TO:
FROM:
DATE:
SUBJECT:
COMMISSION MEMORANDUM
Mayor David Dermer and Members of the City Commission
Jorge M. Gonzalez, City ManageJ~ SECOND READING
PUBUC HEARING
April 25, 2007
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, APPROVING ON
SECOND AND FINAL READING AMENDMENT NO.2 TO THE
DEVELOPMENT AGREEMENT BETWEEN THE CITY OF MIAMI
BEACH AND AR&J SOBE, LLC, DATED MAY 18, 2005, FOR THE
DEVELOPMENT OF THE PROJECT PRESENTLY REFERRED TO
AS "FIFTH AND ALTON"; SAID AMENDMENT REVISING THE
DEFINITION OF THE TERMS "CITY SPACES", "DEVELOPER
SPACES", AND "CITY'S TRANSIT FACILITY CONTRIBUTION",
AS SAID TERMS ARE DEFINED IN THE DEVELOPMENT
AGREEMENT; INCREASING THE CITY'S TRANSIT FACILITY
CONTRIBUTION FROM $9,500,000 TO $14,397,725.40;
REQUIRING THE CITY TO ASSUME THE COST OF REMOVAL
OF THE SIX (6) METERED ON-STREET PARKING SPACES ON
THE SOUTH SIDE OF 6TH STREET, BETWEEN LENOX AVENUE
AND ALTON ROAD, AT AN ESTIMATED COST OF $90,000;
REQUIRING THE CITY TO ASSUME THE COST OF PAYING THE
LEGAL FEES FOR THE DRAFTING OF CONDOMINIUM
DOCUMENTS FOR THE PROJECT, ESTIMATED TO BE
APPROXIMATELY $30,000; AND REVISING THE "ALLOCATION
OF REVENUES AND OPERATING EXPENSES" (EXHIBIT "E" OF
THE DEVELOPMENT AGREEMENT); AND FURTHER
APPROPRIATING $10,897.725.40 FROM PARKING FUNDS IN
ACCORDANCE WITH THE PROVISIONS OF THE AMENDED
DEVELOPMENT AGREEMENT.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution on Second Reading.
ANAL YSIS
On February 23, 2005, in consideration of the public benefits being provided by AR&J Sobe
(Developer), the Mayor and City Commission adopted Resolution No. 2005-25827,
approving and authorizing the vacation of an alley located adjacent to the proposed Fifth and
Alton development project.
Commission Memorandum - AR&J Sobe Development Agreement
Apri/11, 2007
Page 2 of 3
On May 16, 2005, the Mayor and City Commission adopted Resolution No. 2005-25899,
approving a Development Agreement between the City of Miami Beach and AR&J Sobe,
LLC, for the development of Fifth and Alton, a vertical retail center and parking garage.
On July 12, 2006, the Mayor and City Commission approved Resolution No. 2006-26246,
amending the Alley Vacation Agreement between the City and the Developer, conforming
the deadline dates for execution of the grocery lease and construction commencement to
the dates specified in the Development Agreement.
Finance Committee Recommendation
On January 10, 2007, the Finance and Citywide Projects Committee discussed proposed
amendments to the timelines of the Development Agreement and Alley Vacation Agreement,
as well as a discussion on increasing construction costs. The Committee recommended that
the Administration present the first reading of the amendments related to the extension of
dates to the City Commission at the February 14th, 2007 Commission meeting, and negotiate
a new price per parking space with the Developer.
At the January 10, 2007 Finance and Citywide Projects Committee meeting, the Developer
presented contractor estimates (attached) that demonstrated the cost escalation for the
project that has occurred since the Development Agreement was approved on May 18,
2005. The cost estimates provided by the Developer indicate that the total construction cost
of the project has increased from $32 million in August 2004 to over $54 million in March of
2006. The cost of concrete alone for the project has increased from $12 million to almost
$28 million.
The Developer's estimates also indicate that the construction cost per parking space had
increased from $20,741 in 2004 to $35,313 in 2007. Furthermore, on December 6, 2006, the
Mayor and City Commission approved Ordinance No. 2006-3545, increasing the Parking
Impact Fee from $15,000 per space to $35,000 per space.
On February 14, 2007, the Mayor and City Commission approved Amendment Number Two
to the Alley Vacation Agreement, modifying the dates by which the Developer must secure a
Supermarket Lease and Commence Construction, and further approving Amendment One
to the Development Agreement on first reading. The second reading and final approval of
Amendment One to the Development Agreement occurred at the March 14, 2007 City
Commission meeting.
The Administration has met with the developer to negotiate a new price per parking space,
as directed by the Finance and Citywide Projects Committee. The attached Second
Amendment to the Development Agreement reflects the outcome of these negotiations.
On April 11, 2007, the Mayor and City Commission adopted Resolution No. 2007-26518,
approving Amendment Two to the Development Agreement on first reading.
Commission Memorandum - AR&J Sobe Development Agreement
Apri/11, 2007
Page 3 of 3
Effect of Proposed Chanqes
If approved by the Mayor and City Commission, the proposed amendment will have the
following effects:
. The City will purchase 500 parking spaces in the facility, rather than 535; and
. The City's funding contribution per parking space will increase from $16,395 to
$27,000; and
. The Developer shall not be required to pay $15,000 each for the removal of three (3)
parking spaces on the south side of Sixth Street; and
. The City shall pay the cost of recording the Declaration of Condominium, rather than
50% of the cost (estimated total cost of $30,000).
Fundinq
Due to the delay of commencement of construction of the project, previously appropriated
South Pointe funds in the amount of $3 million were re-appropriated to the ACI settlement
and the purchase of 530 Meridian ($1.5 million each). Additionally, $3.5 million of Federal
Transit Administration funds previously identified for use in this project will not be utilized.
Therefore, a total of $10,897,725, which includes the $3 million in reallocated South Pointe
Funds, replacement of $3.5 million in FT A funds, and the increase of $4,397,725 due to this
amendment's revision of the City's contribution per parking space, will be funded with
Parking funds, to be repaid by South Pointe revenues at a later date (contemplated to be
2010/11), based on availability. Upon approval of this amendment, the City's total
contribution will increase from $9,500,000 to $14,397,725.40.
CONCLUSION
The Administration recommends that the Mayor and City Commission hold the public
hearing and approve the proposed Second Amendment to the Development Agreement on
::g final reading.
Attachments: Second Amendment to the Development Agreement
Moss Construction Budget Comparison
Parking Garage - Cost Based on Square Footage Percentage
T:\AGENDA\2007\apr2507\Regular\Potamkin Second Amendment Memo.doc
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MIAMfBEACH
CITY OF MIAMI BEACH
NOTICE OF A
PUBLIC HEARING ..
I NOTICE IS HEREBY given that a Second Public
. Hearing will be held by the City Commission of
the City of Miami Beach, in the Commission
Chambers, 3rd floor, City Hall, 1700 Conventi!)"
Center Drive, Miami Beach, Florida, on
Wednesday, April 25, 2007 at 5:00 P.M., 'To
Consider Amendment Two To The Development
Agreement Between The City Of Miami Beach
And AR&J SOBE, LLC, Approved On May 18,
2005, For The Development Of The Project
Presently Referred To As "5th And Alton".
INQUIRIES may be directed to the Economic
Development Department at (305) 673-7193.
INTERESTED PARTIES are invited to appear at
this meeting, or be represented by an agent, or to
express their views in writing addressed to the
City Commission, c/o the City Clerk, 1700
Convention Center Drive, 1 st Floor, City Hall, I
Miami Beach, Florida 33139. This meeting may ~
opened and continued and, under such i
i circumstances additional legal notice would not
be provided.
"..
Robert E. Parcher
City Clerk
City of Miami Beach
Pursuant to Section 286.0105, Fla. Stat., the City
hereby advises' the public that: if a person decides
to appeal any decision made by the City
Commission with respect to any matter
considered at its meeting or its hearing, such
person must ensure that a verbatim record of the
proceedings is made, which record includes the
testimony and evidence upon which the appeal is
to be based. This notice does not constitute
consent by the City for the introduction or
admission of otherwise inadmissible or irrelevant
evidence, nor does it authorize challenges or
appeals not otherwise allowed by law.
To request this material in accessible format, sign
language interpreters, information on access for
persons with disabilities, and/or any,
accommodation to review any document or i
participate in any city-sponsored proceeding, .
please contact (305) 604-2489 (voice), (305) 673-
, 7218(ITY) five days in advance to initiate your
i request. TTY users may also call 711 (Florida
r~elay Service).
(Ad #433)
.