369-2000 RDA
RESOLUTION NO. 369-2000
A RESOLUTION OF THE CHAIRMAN AND MEMBERS OF THE
MIAMI BEACH REDEVELOPMENT AGENCY AUTHORIZING
THE CHAIRMAN AND SECRETARY TO EXECUTE A FIRST
AMENDMENT TO THE LEASE AGREEMENT BETWEEN THE
MIAMI BEACH REDEVELOPMENT AGENCY AND ABKEY NO. 17,
INC., A FLORIDA CORPORATION D/B/A FUDDRUCKERS GRILL
AND BAR, INVOLVING SUITES 1 THROUGH 3 IN THE ANCHOR
SHOPS AT SOUTH BEACH, DATED SEPTEMBER 8, 1999, TO
REFLECT REVISIONS TO THE RENT COMMENCEMENT DATE,
THE ADJUSTED RENTABLE SQUARE FOOTAGE, THE ANNUAL
MINIMUM RENT, THE AMOUNT OF THE MINIMUM RENT
ABATEMENT IN CONNECTION WITH THE SUBTENANT'S
IMPROVEMENTS OF THE ANCHOR HOTEL, THE PRORATION
PERIOD FOR THE ABATEMENT OF THE MINIMUM RENT AND
THE COMPLETION DATE FOR THE SUBTENANT'S WORK;
SETTING AN EFFECTIVE DATE
WHEREAS, on September 20, 1996, the Miami Beach Redevelopment Agency (Landlord)
and MB Redevelopment, Inc., a Florida Corporation (Master Tenant), entered into a Retail Space
Master Lease, dated September 20, 1996 (Master Lease), whereby the Landlord leased to the Master
Tenant, and Master Tenant leased from the Landlord, the Retail Space, as defined in the Master
Lease, located in an area bounded by Washington Avenue and Collins Avenue in the proximity of
16th Street, City of Miami Beach, Miami-Dade County, Florida, and commonly known as the Anchor
Shops at South Beach (Anchor Shops); and,
WHEREAS, the Master Lease authorized the Master Tenant, to procure subtenants and enter
into subleases with subtenants to use and operate the Retail Space as defined in the Master Lease;
and,
WHEREAS, on September 8,1999, in accordance with the provisions of the Master Lease, the
Master Tenant entered into a Sublease Agreement (Sublease) with Abkey No. 17, Inc., a Florida
Corporation d/b/a! Fuddruckers Grill and Bar, (the "Tenant"), involving Suites 1 through 3 in the
Anchor Shops; and,
WHEREAS, on March 20, 2000, the Landlord and Master Tenant executed an Agreement,
terminating the Master Lease; and,
WHEREAS, termination of the Master Lease resulted in the assignment and transfer of all
subleases and other agreements pertaining to the Anchor Shops retail space from the Master Tenant
to the Landlord as of the Termination Date; and,
WHEREAS, since the execution of the Sublease, the Tenant has encountered certain
unforeseeable conditions resulting in delays to the completion of the design and buildout of the
restaurant space, the scope of which includes the restoration of the lobby of the Anchor Hotel; and,
WHEREAS, certain Code requirements have resulted in a re-evaluation of the usable space on
the second floor of the Anchor Hotel, which resulted in a loss of349 square feet or, approximately
55 percent of the upper floor area., and
WHEREAS, the entire second floor level had always been represented as being available to the
Tenant for office and storage space; and,
WHEREAS, the Tenant has requested a rent reduction for the unusable area on the second
floor, in the amount of One-Thousand Seven Hundred Forty Five and 00/100 ($1,745.00) per year;
and,
WHEREAS, at the request of the Landlord, the Tenant and its Contractor, Mayer Development
Group, Inc. (Contractor), have presented a line-item breakdown of the most recent estimate to
restore the Anchor Hotel; and,
WHEREAS, the cost estimate included certain previously unforeseen costs associated with the
condition of the space as delivered, costs resulting from certain previously unforeseen Code
requirements and costs which may have been part of the base shell improvements; and,
WHEREAS, the Tenant's proposed budget for the restoration of the Anchor Hotel, exceeds an
earlier estimate by the Master Tenant, (which was used as a basis to calculate the Minimum Rent
Abatement, as defined in Section 2.2 of the Sublease), by approximately $35,500; and
WHEREAS, upon reviewing the Tenant's estimates, the Landlord believes the initial estimate
of $63,751.02, prepared by the Master Tenant was undervalued, since the Tenant's estimates are
based upon actual current construction bids; and
WHEREAS, in order to address the reduction in gross rentable area as well as the other
unforeseen delays described herein, the Landlord and the Tenant have agreed to amend certain
sections of the Sublease, as reflected in the First Amendment to the Lease Agreement attached
hereto.
NOW THEREFORE, BE IT DULY RESOLVED BY THE CHAIRMAN AND
MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY, AS
FOLLOWS:
Section I
that the Chairman and Members of the Miami Beach Redevelopment
Agency Authorize the Chairman and Secretary to execute a First
Amendment to the Lease Agreement between the Miami Beach
Redevelopment Agency and Abkey no. 17, inc., a Florida Corporation
d/b/a Fuddruckers Grill and Bar, involving suites I through 3 in the
Anchor Shops at South Beach, dated September 8, 1999, to reflect
revisions to the Rent Commencement Date, the Adjusted Rentable Square
Footage, the Annual Minimum Rent, the amount of the Minimum Rent
Abatement in connection with the Subtenant's improvements of the
Anchor Hotel, the proration period for the Minimum Rent Abatement and
the Completion Date for the Subtenant's Work as contained in the
Amendment to the Lease Agreement attached to and made a part of this
Resolution.
Section II
This Resolution shall become effective upon adoption.
PASSED AND ADOPTED this
27th
day of September, 2000.
L
ATTEST:
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SECRETARY
APPROVED N3 TO
FORM & LANGUAGE
& FOR EXECUTION
!/AI ~9"U~
Attachments
Redevelopment Agency
GenenII CouneIll
Il81lI
T:\AGENDA 120001SEP2700IRDA IRES.oo
..
Exhibit" A"
FUDDRUCKERS
COST ESTIMATE FOR THE RESTORATION OF THE ANCHOR HOTEL
AND CERTAIN CODE REOUlRED ADDITIONS TO THE MAIN RESTAURANT
SCHEDULE A
ANCHOR HOTEL RENOVATIONS
Drywall
Ceiling
Wainscote (Partial)
Terrazzo (Partial)
Doors and Frame
Handrail Restoration
Woodwork (Includes Door Frames)
Paint
Electrical
AC
$18,345
6,896
4,100
2,610
1,633
3,478
8,596
3,850
17,200
10,306
Subtotal A
$77,014
SCHEDULE B
ANCHOR HOTEL RENOVATIONS - ADDITIONALIUNFORESEEN ITEMS
Wainscote Damage
Terrazzo Damage
Sprinkler Reconfiguration
Entry Door Reconfiguration
Re-Hinge Front Door Frame
Repair of Stairs to Reinstall Railing
Anchor to Restaurant Ramp Adjustment
Handrail Restoration Changes
$ 4,100
2,610
4,170
500
500
1,000
3,222
6,000
Subtotal B
$22,102
SCHEDULE C
MAIN RESTAURANT - CODE REQUIRED ADDITIONS
Electrical (Emergency Light & Exit Sign)
New Fire Exit Engineering & Construction
Flood Barrier Gate For New Fire Exit Door
Subtotal C
$ 1,800
7,000
2,000
$10,800
TOTAL
$109,916
Miami Beach
Redevelopment Agency
J 700 Convention Center Drive
Miami Beach, Florida 33139
Telephone: (305) 673- 7295
Fax: (305) 673- 7772
REDEVELOPMENT AGENCY MEMORANDUM NO. 00- " '5
September 27, 2000
TO: Chairman and Members of the
Miami Beach Redevelopment Agency
FROM:
Jorge M. Gonzalez
Executive Director
~~
SUBJECT: A RESOLUTION OF THE CHAIRMAN AND MEMBERS OF THE MIAMI
BEACH REDEVELOPMENT AGENCY AUTHORIZING THE CHAIRMAN
AND SECRETARY TO EXECUTE A FIRST AMENDMENT TO THE LEASE
AGREEMENT BETWEEN THE MIAMI BEACH REDEVELOPMENT
AGENCY AND ABKEY NO. 17, INC., A FLORIDA CORPORATION D/B/A
FUDDRUCKERS GRILL AND BAR, INVOLVING SUITES 1 THROUGH 3
IN THE ANCHOR SHOPS AT SOUTH BEACH, DATED SEPTEMBER 8,
1999, TO REFLECT REVISIONS TO THE RENT COMMENCEMENT
DATE, THE ADJUSTED RENTABLE SQUARE FOOTAGE, THE ANNUAL
MINIMUM RENT, THE AMOUNT OF THE MINIMUM RENT
ABATEMENT IN CONNECTION WITH THE SUBTENANT'S
IMPROVEMENTS OF THE ANCHOR HOTEL, THE PRORATION PERIOD
FOR THE ABATEMENT OF THE MINIMUM RENT AND THE
COMPLETION DATE FOR THE SUBTENANT'S WORK.
ADMINISTRATION RECOMMENDATION:
Adopt the Resolution.
ANALYSIS
Since the execution of the Lease Agreement with Abkey No. 17, Inc., d/b/a! Fuddruckers (Tenant),
on September 8, 1999, the design and buildout of the restaurant have suffered a number of
unforeseen delays, which to an extent, have been beyond the Tenant's control. The initial delay was
a result of trying to coordinate the design development process through two different architectural
firms, which was not successful. On February 8, 2000, Fuddruckers formally notified the
~()UTti ()()I~
I:>edevel()pment [)lstrict
Agenda Item ?:C-.
q-Li-CO
Date
Administration that the Architect-of-Record is SKLARchitecture (Architect). Since this time, the
Architect has had to initiate a new design concept as well as coordinate plans for the interior
restoration of the Anchor Hotel.
Subsequent delays have been a result of complications encountered in the design review and
permitting process. On March 30, the Architect submitted a preliminary set of drawings as a basis
for discussion with the Building, Fire and Planning Departments. Conflicting Code requirements
resulted in a re-evaluation of the usable space on the second floor of the Anchor Hotel, which
resulted in a loss of349 square feet or, approximately 55 percent of the upper floor area. The entire
second floor level had always been represented as being available to the Tenant for office and/or
storage space. Consequently, the Tenant has requested a rent reduction for the unusable area on the
Second floor. As a result, the Administration recommends an adjustment to the Minimum Rent to
reflect the reduction in gross rentable area on the second floor, from $3,245 to $1,500 per year, and
from $3,894 to $1,800 during the remaining five years of the Lease term. This reduction translates
into a reduction of approximately $1,745 per year, which over the term of the Lease represents an
amount of approximately $20,000,
In addition, the poor condition of the Anchor Hotel coupled with certain unforeseen requirements
by Fire, Building (ADA) and Historic Preservation, have resulted in a significant increase in the
estimated construction costs, which has prompted the Tenant to request relief in the form of
additional rent concessions. Section 2.2 of the Lease Agreement, contains a provision for the Tenant
to receive a rent abatement equivalent to the cost of improvements to restore the Anchor Hotel to
Code, up to a maximum amount equal to $63,751.02, prorated over a period of six months. The
amount ofthe abatement was based on an earlier estimate of the Anchor Hotel restoration provided
by Loews, as Developer of the Anchor Shops.
In an effort to resolve some of these issues and move forward with the project, a number of meetings
have been held with the Tenant, the most recent of which occurred on Monday, September 18. At
the request of the Administration, the Tenant and its Contractor, Mayer Development Group, Inc.
(Contractor), presented a line-item breakdown of the most recent estimate (totaling $109,916), to
restore the Anchor Hotel, reflecting additional/ unforeseen expenses associated with the condition
of the space as delivered. A copy of the Contractor's estimate is attached to this Memorandum.
Reflected in schedule C of the attachment, the Contractor's estimate includes the cost of installing
an additional fire exit door in the main restaurant area, which the Tenant believes should have been
part of the base shell improvements and consequently the RDA's responsibility. The
Administration's position is that the fire exit door is required to accommodate the layout and seating
arrangement in the restaurant as proposed by the Architect.
The Tenant's proposed budget for the restoration of the Anchor Hotel, (excluding the estimate for
the additional fire door), exceeds Loews' earlier estimate by approximately $46,165. Upon reviewing
the Tenant's estimates, the Administration believes the initial estimate prepared by Loews was
undervalued, especially since the Tenant's numbers are based upon actual current construction bids.
After several discussions, the Administration and the Tenant are proposing to agree to increase the
cost of improvements to restore the Anchor Hotel by $30,566.73.
In addition to the adjustment to the Minimum Rent as a result of the unuseable area on the 2nd floor,
it is also recommended that the amount of the Minimum Rent Abatement for the Restoration of the
Anchor Hotel be increased (as defined in Section 2.2 of the Lease Agreement), by $30,566.73 to
$94,317.75, and that the proration period of the Minimum Rent Abatement for the restoration of the
Anchor Hotel be extended by three months (from six to nine months). In order to qualify for all, or
a portion of the Minimum Rent Abatement, the Tenant's Contractor will have to provide proof of
incurred expenses. Although the Administration's recommendation falls short of the Tenant's
proposed budget by approximately $15,700, the Tenant has verbally agreed to accept these
conditions.
In addition, the RDA and the Tenant have agreed to a Rent Commencement Date of May 9, 2000,
which corresponds to the date the Tenant took physical possession of the premises, Assuming an
up to nine month proration period of the Minimum Rent Abatement for improvement costs, as
proposed by the Administration, the first month's rent will be due on February 9, 2001. It should be
noted that rent will be payable whether or not the restaurant is operational.
With permits finally approved for the restoration of the Anchor Hotel, the Contractor has committed
to a schedule, calling for construction to begin by October 5, 2000, substantial completion by
February 15,2001 and a Certificate of Occupancy on February 28, 2001. Consequently, the RDA
and the Tenant have agreed to accept February 28,2001 as the "Completion Date for Subtenant's
Work", (as defined in Section 5.1 of the Lease Agreement).
The Administration recommends adopting the attached First Amendment to the Lease Agreement
between the RDA and Abkey No. 17 d/b/a! Fuddruckers, which calls for amending Section 1.1,
entitled Grant. Initial Term, to provide for a "Rent Commencement Date" of May 9, 2000,
amending "Gross Rentable Area of Retail Space" from 6,566 square feet to 6,217 square feet and
from 649 rentable square feet on the second floor to 300 rentable square feet on the second floor;
amending Section 2.2, entitled Minimum Rent, amending Second Floor Space Annual Minimum
Rent and the Monthly Payment as follows:
Rent Commencement Date to Expiration of the fifth (5th) Sublease Year - From $3,245.00
to $1,500.00 as Annual Minimum Rent and from $270.42 to $125.00 as Monthly Payment
Beginning of the sixth (6th) Sublease Year to Expiration ofInitial Term - From $3,894.00
to $1,800.00 as Annual Minimum Rent and from $324.50 to $150.00 as Monthly Payment;
and,
amending Section 2.2, paragraph 2, amending the "Minimum Rent Abatement" from Sixty-Three
Thousand Seven Hundred Fifty-One and 02/100 ($63,751.02) to Ninety-Four Thousand
Three Hundred Seventeen and 751100 ($94,317.75) (which equals nine (9) months of Minimum
Rent payable during the first Lease Year).; and, amending Section 5.1 entitled Subtenant's
Construction Obligations, defining "Completion Date for Subtenant's Work" as February 28,
2001.
In consideration of the combined efforts of the Tenant and the Administration to see this project
through to fruition, and considering the complex nature of the issues affecting the permitting process,
it is recommended that the RDA Board approve the proposed Amendment the Lease to allow
construction to proceed. The Administration will continue to work with Fuddruckers to facilitate
the permitting of the main restaurant space as well as the overall construction of the project.
Fuddruckers is expected to open on or before March 1, 2001.
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FIRST AMENDMENT TO THE LEASE AGREEMENT BETWEEN THE MIAMI
BEACH REDEVELOPMENT AGENCY AND ABKEY NO. 17, INC., A
FLORIDA CORPORATION D/B/A FUDDRUCKERS GRILL AND BAR,
INVOLVING SUITES 1 THROUGH 3 IN THE
ANCHOR SHOPS AT SOUTH BEACH.
This First Amendment to the Lease Agreement ("First Amendment"), is made as of
September 27, 2000 between the Miami Beach Redevelopment Agency, a public body
corporate and politic (the "Landlord"), and Abkey No. 17, Inc., a Florida Corporation
d/b/a Fuddruckers Grill and Bar
Recitals
A. On September 20, 1996, the Landlord and MB Redevelopment, Inc., a Florida
Corporation (the "Master Tenant"), entered into a Retail Space Master Lease, dated
September 20, 1996 (the "Master Lease"), whereby the Landlord leased to the Master
Tenant, and Master Tenant leased from the Landlord, the Retail Space, as defined in
the Master Lease, located in an area bounded by Washington Avenue and Collins
Avenue in the proximity of 16th Street, City of Miami Beach, Miami-Dade County,
Florida, and commonly known as the Anchor Shops at South Beach (the "Anchor
Shops").
B. The Master Lease authorized the'Master Tenant, also defined as "Sublandlord" to
procure subtenants and enter into subleases with subtenants to use and operate the
Retail Space as defined in the Master Lease.
C. On September 8, 1999, in accordance with the provisions of the Master Lease, the
Master Tenant entered into a Sublease Agreement (Sublease) with Abkey No. 17,
Inc., a Florida Corporation d/b/a! Fuddruckers Grill and Bar, (the "Tenant"),
involving Suites 1 through 3 in the Anchor Shops.
D. On March 20, 2000, the Landlord and Master Tenant executed an Agreement,
terminating the Master Lease.
E. Termination of the Master Lease resulted in the assigmnent and transfer of all
subleases and other agreements pertaining to the Anchor Shops retail space from the
Master Tenant to the Landlord as of the Termination Date.
F. Since the execution of the Sublease, the Tenant has encountered certain unforeseeable
conditions resulting in delays to completion of the design and buildout Qf the
restaurant space, the scope of which includes the restoration of the lobby of the ("
Anchor Hotel.
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G. Certain Code requirements have resulted in are-evaluation of the usable space on the
second floor of the Anchor Hotel, which resulted in a loss of 349 square feet or,
approximately 55 percent of the upper floor area. The entire second floor level had
always been represented as being available to the Tenant for office and/or storage
space. Consequently, the Tenant has requested a rent reduction for the unusable area
of approximately $1,745 per year.
H. At the request of the Landlord, the Tenant and its Contractor, Mayer Development
Group, Inc. (Contractor), have presented a line-item breakdown of the most recent
estimate to restore the Anchor Hotel. The cost estimate included certain previously
unforeseen costs associated with the condition of the space as delivered, costs
resulting from certain previously unforeseen Code requirements and costs which may
have been part of the base shell improvements.
I. The Tenant's proposed budget for the restoration of the Anchor Hotel, exceeds an
earlier estimate by the Master Tenant, (which was used as a basis to calculate the
Minimum Rent Abatement, as defined in Section 2.2 of the Sublease), by
approximately $35,500.
J. Upon reviewing the Tenant's estimates, the Landlord believes the initial estimate of
$63,751.02, prepared by the Master Tenant was undervalued, especially since the
Tenant's numbers are based upon actual current construction bids.
K. In consideration of the premises and mutual covenants hereafter agreed to, the
Landlord and the Tenant have agreed to amend certain sections of the Sublease as
follows:
I. The aforegoing receitals are agreed to by the Parties and are made part of this
Agreement.
II. Sections 1.1,2.2 and 5.1 are hereby amended to read as follows:
LEASE SUMMARY
9.
Gross Rentable Area of
Premises (section 1.1):
Approximately i,5i& 6217 square
feet, which includes approximately
5917 square feet on the first floor
(the "First Floor Space") and
approximately i4& 300 rentable
square feet on the second floor (the
"Second Floor Space")
,.
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13. Term of Lease (section 1.1):
"Rent Commencement Date": ~
earlier af (i) tRe sate TaRsAl speAS fer
BldsiRess sr (ii) tRe CeR=lpletieR
Date fer TeRBRt's \.^Jerl{ (Le., RiRety (99)
says after tAe CelTlmeFlGemeRt Date)
May 9,2000
14. "Minimum Rent" (section 2.2):
Second Floor Soace:
PERIOD
ANNUAL MINIMUM RENT
MONTHLY PAYMENT
(PLUS SALES TAX)
Commencement Date - Rent
Commencement Date
Rent Commencement Date -
Expiration of the fifth (5th)
Sublease Year
$0.00
$0,00
$3,246.00 $1,500.00
l270.42 $125.00
Beginning of the (6th)
Sublease Year-
Expiration of the Initial Term'
$3,884.00 $1,800.00
$324.60 $150.00
22. Comoletion Date for Tenant's Work
(section 5.1):
T\t:9 R\:IASrea sev8Rty (270) says after
tRB CemlTleRG8meRt gate, February
28, 2001, subject to section 14.1
ARTICLE II. RENT
2.2 Minimum Rent. Subject to any escalation which may be provided for in the
Sublease Summary or Rider Number One, as applicable, Subtenant shall pay Minimum Rent for
the Term in the amount specified in the Sublease Summary or Rider Number One, which, except
for the first installment, shall be payable throughout the Term in equal monthly installments in
advance on the first day of each caiendar month of each year of the Term, such monthly
installments to be in the amounts (SUbject to escalation) specified in the Sublease Summary or
Rider Number One. The first monthly installment of Minimum Rent shall be pre-paid on the date
of this Sublease. The Minimum Rent described above shall be adjusted during the Term of this
Sublease as provided in the Lease Summary and Rider Number One.
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,- of
Notwithstanding the foregoing, commencing on the later of (a) the Rent Commencement Date of
(b) the first day of the calendar month immediately following the date that Subtenant completes
the Subtenant's Anchor Hotel Improvements, Minimum Rent shall be abated in the amount of the
actual costs incurred by Subtenant for the Subtenant's Anchor Hotel Improvements (as opposed
to the Subtenant's specific leasehold improvements). Such abatement shall be prorated over a
six (6) R'lGRtR nine (9) month period so that the Minimum Rent abatement will be fully amortized
in equal monthly amounts over such Sill (€I) R'lGRtR nine (9) month period. Upon Substantial
Completion (as hereinafter defined) of the Subtenant's Anchor Hotel Improvements, Subtenant
shall certify to Sublandlord the actual amount incurred by the Subtenant for the Subtenant's
Anchor Hotel Improvements. However, in no event shall the Minimum Rent abatement exceed a
total of Si)(I}' TAree TRG~saRE! SeveR j.j~RE!FeE! F'ifly ORe aRE! 92,'190 ($68,781.92) Ninety-Four
Thousand Three Hundred Seventeen and 75/100 ($94,317.75) (which equals six (6) R'lGRtRS-
nine (9) months of Minimum Rent payable during the first Sublease Year). Sublandlord and
Subtenant shall execute an amendment to this Sublease in order to confirm the exact amount of
the Minimum Rent abatement.
III. In all other respects, the terms and conditions of the Sublease are ratified and
confirmed.
IN WITNESS THEREOF, the parties have executed this First Amendment as of
the date set forth in the first paragraph of this First Amendment.
WITNESSES:
LANDLORD:
MIAMI BEACH REDEVELOPMENT
AGENCY, a public body corporate and
politic
FORM
& FOREXECU110N
By:
1/!
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CHAIRMAN
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TENANT:
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