2007-26492 ResoRESOLUTION NO. 2007-26492
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 A FIRST AMENDMENT
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 "5T" AND ALTON"; SAID AMENDMENT
EXTENDING THE DEFINITION OF THE TERM "OUTSIDE DATE",
AS SAID TERM IS DEFINED BY THE DEVELOPMENT
AGREEMENT, FROM EIGHTEEN (18) MONTHS FOLLOWING THE
EFFECTIVE DATE OF THE DEVELOPMENT AGREEMENT
(WHICH WAS MAY 18, 2005), TO DECEMBER 4, 2007.
WHEREAS, AR&J Sobe, LLC (Developer) intends to construct the project known as the
"Fifth and Alton" Project, 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 (the 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 18, 2005, the Mayor and City Commission adopted Resolution No.
2005-25899, approving, on second and final reading, a DevelopmentAgreementwith Developerfor
design, development and construction of the Project; and
WHEREAS, on February 23, 2005, prior to approval of the Development Agreement, but 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 a Vacation Agreement, authorizing the vacation of the City's rights to an
alley located adjacent to the proposed Project (the Alley); and
WHEREAS, the Vacation Agreement contains reverter and/or reconveyance provisions in
the event Developer does not enter into a supermarket lease on or before eighteen (18) months
after the effective date of the Vacation Agreement (which is February 23, 2005), or in the event
Developer does not Commence Construction (as said term is defined in the Development
Agreement) of the Project on or before September 1, 2006; and
WHEREAS, on July 12, 2006, the Mayor and City Commission adopted Resolution No.
2006-26246, approving Amendment No. 1 to the 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; and
WHEREAS, the Development Agreement also contains provisions that require Developerto
have executed a lease for the proposed supermarket on or before the "Outside Date" (which was
November 18, 2006), and commence construction of the Project prior to March 1, 2007; and
WHEREAS, the "Outside Date" (i.e. November 18, 2006) also affords Developer the
opportunity to exercise a right of termination of the Development Agreement, without liability, and/or
further obligation; and
WHEREAS, in an effort to continue moving forward with the Project, but in light of the
impending "Outside Date" deadline, on November 3, 2006, the Developer made a written request to
the City Manager, requesting that an item be brought before the City Commission, requesting an
amendment to the Development Agreement for the purpose of extending the "Outside Date; and
WHEREAS, Developer requested that the proposed Amendment be considered at an
emergency meeting of the City Commission, to be convened prior to November 12'h; and
WHEREAS, in light of the intervening elections, Developer was advised by the City
Administration that the earliest date at which its request for an extension of the "Outside Date" (and
the corresponding Amendment to the Development Agreement) could be heard by the City
Commission was at its meeting on December 6, 2006; and
WHEREAS, it should be noted that Developer has obtained cone-year extension of time
from the Historic Preservation Board and the Design Review Board to obtain its building permit for
the Project; and
WHEREAS, said extension expires on February 17, 2007; and
WHEREAS, accordingly, a duly noticed public hearing to consider the proposed First
Amendment to Development Agreement was duly noticed for first reading on December 6, 2006;
and
WHEREAS, the Administration is hereby recommending that the "Outside Date", as defined
in the Agreement, be extended to December 4, 2007 which, as stated, is the last date of Developer's
Design Review Board approval; and
WHEREAS, the Administration is hereby recommending that the "Default Date", as defined
in the Agreement, be extended to December 5, 2009; and
WHEREAS, the proposed First Amendment to Development Agreement would provide for
uniformity of deadlines in the Development Agreement to conform with the expiration of the Project's
development orders from the Historic Preservation and Design Review Boards; and
WHEREAS, the proposed First Amendment was approved on first reading, following a duly
noticed public hearing at the City Commission Meeting on February 14, 2007 and, accordingly, the
Administration hereby recommends that said Amendment now be approved 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, a First Amendment 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
currently referred to as "Fifth and Alton"; said Amendment extending the definition of the term
"Outside Date", as said term is defined by the Development Agreement, and extending said date to
December 4, 2007.
PASSED and ADOPTED this 14'h day of ~Olarch, 2p07
ATTEST:
l
CITY CLERK Robert Parcher YOR David Dermer
T:WGENDA\2007\mar1407\Regular\Potamkin Amendment Second ReadingReso.doc
APPROVED AS TO
FORM 8~ LANGUAGE
ts< FOR EX]¢CUTION
Attorney ~~ Date
OFFICE OF THE CITY ATTORNEY, Jose Smith, City Attorney
Interoffice Memorandum
To: Bob Parcher
City Clerk
From: Raul J. Aguil /~~,
First Assists it Attorney
Date: July 11, 2007
Subject: Resolution Nos. 2007-26470 and 2007-26492 (First Amendment to 5th and
Alton Development Agreement-First and Second Reading)
Bob:
There were scrivener's errors on the two (2) Whereas clauses at the end of the above
Resolutions regarding the "Outside Date" and "Default Date", as respectively defined in
the Reso. I have made the corrections and have re-form approved the Resolutions.
Accordingly, please have them re-executed by the Mayor and City Clerk and replace for
your files.
cc: Tim Hemstreet, Assistant City Attorney
Kevin Crowder, Economic Development Director
COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution approving Amendment One to the Development Agreement between the City and AR&J
Sobe LLC for the project 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 an amendment to the Development Agreement,
extending the date by which the developer must obtain a building permit until February 17, 2007, and
extending the Outside Date (the date by which the Developer must obtain a Supermarket Lease and
Commence Construction) until December 4 2007?
Item 5ummaryiKecommenaation:
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.
The project received approval from the Design Review Board and Historic Preservation Board on
August 17, 2004, which were due to expire on February 17, 2006. The Developer obtained cone-year
extension of time to obtain a building permit from the Boards. This one-time extension will expire on
February 17, 2007. This amendment will have the effect of conforming the deadlines for obtaining a
building permit of the Development Agreement, Alley Vacation Agreement, Design Review Board
approval, and Historic Preservation Board approval. 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. The City
Commission approved the amendment to the Vacation Agreement, as well as the amendment to the
Development Agreement on first reading at the February 14th, 2007 Commission meeting.
The Administration recommends that the Mayor and City Commission hold the public hearing and
adopt the resolution on second reading.
Adviso Board Recommendation:
Finance and Cit ide Pro~ects, Janua 10, 2007
Financial Information:
Source of Amount Account Approved
Funds: ~
N/A 2
3
4
OBPI Total
Financial Im act Summa
Cit Clerk's Office Le islative Trackin
Kevin Crowder, Economic Development, xt. 6186
Si n-Offs:
D ment Director si tan City Manager City Manager
f~ h I ~ J~ /~ ~ ~ ~~~ (~J AGENDA tTEM
r V , f ~ ~ ~ l DATE 3~~ 'O
m MIAMIBEACH
City of Miami Beath, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor David Dermer and Members of the City Commission
FROM: Jorge M. Gonzalez, City Manager
DATE: March 14, 2007
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING AMENDMENT ONE 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 "5T" AND ALTON"; SAID
AMENDMENT EXTENDING THE DEFINITION OF THE TERM "OUTSIDE DATE"
AS SAID TERM IS DEFINED BY THE DEVELOPMENT AGREEMENT, FROM
EIGHTEEN (18) MONTHS FOLLOWING THE EFFECTIVE DATE OF THE
DEVELOPMENT AGREEMENT (WHICH WAS MAY 18, 2005), TO DECEMBER
4, 2007.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
ANALYSIS
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.
The Development Agreement defines "Outside Date" as the date which is eighteen (18)
months after the Effective Date (May 18, 2005), or the Construction Commencement Date,
whichever shall first occur. The Development Agreement further specifies terms under which
the City may terminate the agreement, which include:
(i) Developer has not obtained a Building Permit for the project on or before
the Outside Date (November 18, 2006);
(ii) Developer has not Commenced Construction of the Project on or before
March 1, 2007;
(iii) City determines that the project and the public purposes to be derived from
it render the project unfeasible or unwarranted;
(iv) Developer has not obtained the fully executed Grocery Lease required by
Article 15 of the Development Agreement and delivered a copy thereof to
the City on or before the Outside Date.
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.
Commission Memorandum - ARBJ Sobe Development Agreement
March 14, 2007
Page 2 of 4
On November 3, 2006, the Developer sent a letter to the City Manager requesting an
emergency meeting of the City Commission prior to November 18, 2006, in order to consider
an Amendment to the Development Agreement, which would effectively extend the "Outside
Date". The "Outside Date" is not only the date that ends the Developer's Right of
Termination; it also triggers the City's Right of Termination as well as the automatic reverter
of the Alley back to the City.
As an alternative that the City Commission hold a meeting prior to the Outside Date, on
November 9, 2006, the Administration agreed to stay any action by the City under the
Development Agreement and Vacation Agreement until the December 6, 2006 City
Commission meeting, due to the fact that the Miami Beach City Code prohibits the City
Commission from taking any official action prior to certification of final election returns. The
"staff' was also subject to the Developer's agreement to stay its right to terminate the
Development Agreement, pending consideration of the proposed Amendment on December
6, 2006; and the Developer's agreement that any and all rights that the City may have to
terminate the Development Agreement and the automatic reverter of the Alley may be
exercised should the Mayor and City Commission not approve the proposed Amendment on
December 6. This alternative was transmitted to the Developer by the City Attorney's Office
on November 9, 2006, and agreed to by the Developer and transmitted to the City on
November 15, 2006.
On November 20, 2006, the City received a letter from the Developer, formally requesting an
extension of all key performance dates until December 4, 2007. In this letter, the Developer
identified various factors that are contributing to the delay in the commencement of
construction, including, but not limited to, environmental issues related to the Brownfield
cleanup, rapidly escalating construction costs, and the "lengthy process of renegotiating
tenant commitments and leases to reflect the economic realities of the very significant rise in
construction costs."
Design Review and Historic Preservation Board Approvals
The project received approval from the Design Review Board (DRB) and Historic
Preservation Board (HPB) on August 17, 2004, which were due to expire on February 17,
2006. The Developer obtained aone-year extension of time to obtain a building permit from
the Boards. This one-time extension expired on February 17, 2007. Following discussions
between the Administration and the Developer, both parties agreed to present the City
Commission with an amendment to the Development Agreement that extended the date for
obtaining a building permit to February 17, 2007. This amendment had the effect of
conforming the deadlines for obtaining a building permit in the Development Agreement,
Alley Vacation Agreement, DRB order, and HPB order.
A building permit for the project was obtained prior to February 17, 2007, which effected the
Board approvals from the HPB and DRB Boards.
In the event the Project is substantially modified from the project originally approved by the
Historic Preservation Board and Design Review Board, the Alley will revert back to the City,
pursuant to the Vacation Agreement.
Finance Committee Recommendation
In response to the Developer's request for and extension until December 4, 2007, and in
Commission Memorandum - ARBJ Sobe Development Agreement
March 14, 2007
Page 3 of 4
light of the pending expiration of the HPB and DRB approvals, all parties agreed to February
17, 2007, as the appropriate amended date for the Developer to secure a building permit for
the project. In addition, the Developer requested that the deadlines for obtaining a
supermarket lease and for commencing construction be extended until December 4, 2007.
The "Outside Date," which is a "trigger" point for either party to exercise its rights to terminate
the Development Agreement, is also proposed to be extended to December 4th, 2007.
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. 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. On February 14, 2007, the Mayor and City
Commission approved on first reading the extension of dates for the commencement of
construction, for the developer to obtain an executed supermarket lease, and for the
developer to obtain a building permit. The Mayor and City Commission also adopted a
resolution extending the dates of the Alley Vacation Agreement.
The effect of the amendment is described below. This Resolution amends the Development
Agreement, to require that the Developer obtain a building permit on or before February 17,
2007, which he has done, and extends the deadline for Construction Commencement and a
Supermarket Lease until December 4, 2007.
Effect of Proposed Changes
If approved by the Mayor and City Commission, the proposed amendments will have the
following effects:
• If the Developer has not obtained a Building Permit on or before February 17, 2007,
the City may terminate the Development Agreement (satisfied upon final approval of
this Amendment); and
• If the Developer has not commenced construction on or before December 4, 2007
the City may terminate the Development Agreement and the Alley will revert back to
the City; and
• If the Developer has not obtained the fully executed Grocery Lease required by
Article 15 and delivered a copy thereof to the City on or before December 4, 2007,
the City may terminate the Development Agreement and the Alley reverts back to the
City pursuant to the Vacation Agreement; or
• The Developer may terminate the agreement prior to December 4, 2007, by
delivering written notice to the City. The Developer's right of termination pursuant to
Section 2.11 of the Development Agreement shall expire and before void if not
exercised prior to the Outside Date (proposed to be December 4, 2007).
Commission Memorandum - ARBJ Sobe Development Agreement
March 14, 2007
Page 4 of 4
CONCLUSION
The Administration recommends that the Mayor and City Commission hold the public
hearing and approve the proposed amendment to the Development Agreement on second
reading, extending the date by which the Developer must obtain a building permit until
February 17, 2007, and extending the Outside Date, as defined in the Development
Agreement, until December 4, 2007.
JMG/TH/kc
Attachment -Proposed Amendment to the Development Agreement
T:\AGENDA\2007\mar1407\Regular\Potamkin Amendment.doc
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~'~, ®MIAMIBEACH
CITY OF MIAMI BEACH
NOTICE OF A PUBLIC HEARING
NOTICE fS HEREBY given that a Second Reading and a Second Public Hearing will be held by the C
Commission of the City of Miami Beach, in the Commission chambers, 3rd floor, City Hall, 17
Convention Center Drive, Miami Beach, Florida, on Wednesday, March 14, 2007 at 10:25'A.M.,
consider Approving Amendment One To,The Development Agreement Between The City Of Miami Bea
And AR&J SOBE, LLC, Approved On May 18, 2005, Far The Development Of The Project Presently Referr
To As "5th And Aiton"; Said Amendment Extending The Definition Of The Term "Outside Date" As Sr
Term Is Defined By The Development Agreement, From Eighteen (18j Months Following The Effective D~
Of The Development Agreement (Which Was May 18, 2005), To December 4, 2007.
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 expre
their views in writing addressed to the City Commission, c/o the City Clerk, 1700 Convention Center Drip
1st Floor, City Hall, Miami Beach, Florida 33139. This meeting may be opened and continued and, una
such circumstances, additional legal notice would not be provided.
Robert E. Parcher
City Clerk
City of Miami Beach
r
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 participate in any city- ,
sponsored proceeding, please contact (305) 604-2489 (voice),. (305) 673-7218 (TTY) five days in advance
to initiate your request. TTY users may also call 711 (Florida Relay Service).
(Ad #428)
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