Loading...
2000-24220 Reso RESOLUTION NO. 2000-24220 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, WAIVING THE PROVISIONS OF SECTION 10.3(a) OF THE AGREEMENT OF LEASE DATED AS OF SEPTEMBER I, 1999 BY AND BETWEEN THE CITY AND LINCOLN PLAZA PARTNERS, LLC, AMENDING EXHIBIT 10.4 TO SAID AGREEMENT OF LEASE; AND CONSENTING TO AN ASSIGNMENT AND ASSUMPTION AGREEMENT, ASSIGNING SAID AGREEMENT OF LEASE AND THE DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY AND LINCOLN PLAZA PARTNERS, LLC, DATED AS OF SEPTEMBER 1,1999, TO LNRJEFFERSON LLC; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on January 5,1998, the City of Miami Beach issued RFP 20-97/98, seeking proposals for the development of Public-Private Parking facilities; and WHEREAS, on April 6, 1998, proposals from five (5) different development teams were submitted and evaluated by an Evaluation Committee and on July 15, 1998, the City Commission authorized negotiations with four (4) of the proposed development projects; and WHEREAS, as a result of said negotiations, on July 7, 1999, the Mayor and City Commission adopted Resolution No, 99-23236 approving the Agreement of Lease and the Development Agreement between the City of Miami Beach and Lincoln Plaza Partners LLC, for Development of the site located at Michigan and Jefferson Avenues and between Lincoln Lane and 17th Street; and WHEREAS, in accordance with Article 10 of the Lease, Sale of the Project, Transfer and Subletting, Lincoln Plaza Partners, LLC is requesting approval to assign the Lease and Development Agreement to LNR Jefferson LLC, which will be owned (I) 90% by LNR Jefferson Holdings, Inc, ("LNRJ")(a wholly owned subsidiary of Leisure Colony Management Corp" which is a wholly owned subsidiary ofLNR Property Corporation) and (ii) 10% by Lincoln Plaza Partners LLC; and WHEREAS, Lincoln Plaza Partners has advised the City that this transfer will facilitate the project financing and construction to proceed; and WHEREAS, approval of the Assignment will necessitate in an amendment to Exhibit 10.4 of the Agreement of Lease, reflecting the new ownership interest in the Lessee, which new Exhibit 10.4 is attached hereto; and WHEREAS, in order to effectuate this transaction, it is necessary that the City waive Section 10.3(a) of the Agreement of Lease which provides that, "There shall be no Sale of the Project or . ; Transfer of the Project prior to the CO Date [i,e" the date that a certificate of occupancy is granted for the Project] other than as pennitted by the provisions of Section 10.4 and other than a Foreclosure Transfer," (a copy of Article 10 of the Agreement of Lease is attached hereto for reference); and WHEREAS, the assignment of the existing Agreement of Lease and Development Agreement to LNR Jefferson LLC will be accomplished by the City's Consent to Assignment and Assumption Agreement, (a copy of which is attached hereto), which will assign all of Lincoln Plaza Partners, LLC's interest in the Agreement of Lease and Development Agreement to LNR Jefferson LLC; and WHEREAS, the Consent to Assignment and Assumption Agreement will specifically indemnify and hold the City harmless and will not constitute approval of any of the documents reviewed as part of the City's due diligence; and WHEREAS, pursuant to said Assignment and Assumption Agreement, LNR Jefferson LLC will assume all of the obligations and liabilities set forth under the Agreement of Lease and Development Agreement; and WHEREAS,the aforementioned transaction will not adversely impact the City's interest in the Proj eel. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that: I, The City hereby waives the provision of Section I 0.3( a) of the Agreement of Lease, but only with respect to the proposed Assignment and Assumption Agreement by and between Lincoln Plaza Partners, LLC and LNR Jefferson LLC and only to the extent that said Agreement is executed in exactly the form attached hereto as Exhibit A, and only if LNR Jefferson is composed of the ownership interests shown in Exhibit B hereto. 2, The City hereby consents to the execution of the Assignment and Assumption Agreement attached hereto as Exhibit A and the Mayor and City Clerk are hereby authorized to execute the Consent to Assignment and Assumption Agreement in the form attached hereto as Exhibit C, 3, This Resolution shall take effect immediately upon its adoption, PASSED AND ADOPTED THIS 20th day of December fit MAYOR ,2000. Attest: _~r r~ CITY CLERK APPROVED AS 10 FORM & LANGUAGE & FOREXECUllON ~1!~ JJyJ,0)-t/J I\IIam8y ~ ' ,. II CITY OF MIAMI BEACH CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139 http:\\cLmiami-beach.fl.us COMMISSION MEMORANDUM NO. 9tD ...0 <) TO: Mayor Neisen O. Kasdin and Members of the City Commission DATE: December 20, 2000 FROM: Jorge M. Gonzalez City Manager '6at1( SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, WAIVING THE PROVISIONS OF SECTION 10.3(a) OF THE AGREEMENT OF LEASE DATED AS OF SEPTEMBER 1, 1999 BY AND BETWEEN THE CITY AND LINCOLN PLAZA PARTNERS, LLC, AMENDING EXHIBIT 10.4 TO SAID AGREEMENT OF LEASE; AND CONSENTING TO AN ASSIGNMENT AND ASSUMPTION AGREEMENT, ASSIGNING SAID AGREEMENT OF LEASE AND THE DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY AND LINCOLN PLAZA PARTNERS, LLC, DATED AS OF SEPTEMBER 1, 1999, TO LNR JEFFERSON LLC; AND PROVIDING AN EFFECTIVE DATE. RECOMMENDATION: Approve the attached Resolution. ANALYSIS: On January 5, 1998, the City of Miami Beach issued RFP 20-97/98, seeking proposals for the development of Public-Private Parking facilities. On April 6, 1998, proposals from five (5) different development teams were submitted and evaluated by an Evaluation Committee and on July 15, 1998, the City Commission authorized negotiations with four (4) of the proposed development projects, As a result of said negotiations, on July 7, 1999, the Mayor and City Commission adopted Resolution No, 99-23236 approving the Agreement of Lease and the Development Agreement between the City of Miami Beach and Lincoln Plaza Partners LLC, for Development of the site located at Michigan and Jefferson Avenues and between Lincoln Lane and 17th Street. In accordance with Article 10 of the Lease, Sale of the Project, Transfer and Subletting, Lincoln Plaza Partners, LLC is requesting approval to assign the Lease and Development Agreement to LNR Jefferson LLC, which will be owned (i) 90% by LNR Jefferson Holdings, Inc, ("LNRJ")(a wholly owned subsidiary of Leisure Colony Management Corp. which is a wholly owned subsidiary ofLNR Property Corporation) and (ii) 10% by Lincoln Plaza Partners LLC, According to Lincoln Plaza Partners, this transfer will facilitate the project financing and construction to proceed, AGENDA ITEM f2-1e (2.--20 - 00 DATE December 20, 2000 Commission Memorandum Lincoln Plaza Partners LLC Page 2 As reflected in Exhibit 10.4 of the Agreement of Lease, Lincoln Plaza Partners LLC is currently owned 49% by SRC Lincoln Plaza LLC (Scott Robins), 49% by RDP Lincoln Plaza LLC (R, Donohue Peebles), and 2% by Michael Milberg, Approval of the Assignment will result in an amendment of Exhibit 10.4, reflecting the new ownership interest in the Lessee, which is attached hereto, In order to effectuate this transaction, it is necessary that the City waive Section 10.3(a) of the Agreement of Lease which provides that, "There shall be no Sale of the Project or Transfer of the Project prior to the CO Date [i,e., the date that a certificate of occupancy is granted for the Project] other than as permitted by the provisions of Section 10.4 and other than a Foreclosure Transfer." A copy of Article 10 of the Agreement of Lease is attached hereto for reference, The assignment of the existing Agreement of Lease and Development Agreement to LNR Jefferson LLC will be accomplished by the City's Consent to Assignment and Assumption Agreement (a copy of which is attached to the Resolution appended hereto), which will assign all of Lincoln Plaza Partners, LLC's interest in the Agreement of Lease and Development Agreement to LNR Jefferson LLC, The Consent to Assignment and Assumption Agreement will specifically indemnifY and hold the City hannless and will not constitute approval of any of the documents reviewed as part of the City's due diligence, Pursuant to said Assignment and Assumption Agreement, LNR Jefferson LLC will assume all of the obligations and liabilities set forth under the Agreement of Lease and Development Agreement. As part of the Administration's due diligence in evaluating the proposed assignment, the following information was requested and reviewed, A summary of the financial transaction amongst the parties is outlined in Attachment A. 1, Lincoln Plaza Partners LLC has agreed to reimburse the City for costs incurred in the City's review of this request for assignment, namely outside counsel fees, 2, LNRJ, the managing partner and 90% owner of LNR Jefferson LLC, has provided an Officer's Certificate ofLNR Property Corporation, certifYing that LNRJ and its affiliates (the "LNR Group") comply with the provisions of lO,3(c) ofthe Agreement of Lease, which sets forth the parameters for a "Qualifier Buyer", Additionally, a revised Exhibit 10.4 has been provided that includes full disclosure of the ownership interests of LNR Jefferson LLC. 3, The latest lO-K for LNR Group has been provided and reviewed evidencing compliance with the provisions of Section 10.4 of the Agreement of Lease, 4, All proposed agreements and contracts between or among the parties have been provided as follows: a, Operating Agreement ofLNR Jefferson LLC; b, Exclusive Listing Agreement; c, Office Building Leasing Agreement; d, Property Management and Leasing Agreement (Operating Agreement of Lincoln Management LLC); December 20, 2000 Commission Memorandum Lincoln Plaza Partners LLC Page 3 e, Development Management Agreement; f. Pledge and Security Agreement; and g, Guaranty Agreement. a. The Operating Agreement of LNR Jefferson LLC (LNRJ LLC) outlines the LLC formation, capital contributions required, allocations and distributions of profits and cashflow, management and transfers of interest in the LLC, The operating agreement sets forth the LLC formation and the partners' interest in the LLC, Article VII ofthis Agreement outlines the capital contributions of LNRJ as (i) Initial Capital Contributions, which represents a reimbursement of all project related costs paid by Lincoln Plaza Partners LLC to date (ii) the Real Property Purchase Price for the parcel of land being contributed to the project and (iii) other project related costs that may inadvertently not been provided, LNR is also obligated to make additional capital contributions to fund the project, not limited to the equity contribution required to complete the construction financing, Once City approval is granted the Agreement of Lease and Development Agreement will be assigned to LNRJ and Lincoln will receive a credit to its capital account equal to 10% of the LNRJ initial capital contribution, The Operating Agreement also sets forth LNRJ's responsibility to obtain the construction loan for 75% of the Total Project Costs, Additionally, a non-compete clause has been included in the Operating Agreement that limits any of the partners, with exception ofR. Donohue Peebles, to develop a new mixed-use real estate development project containing retail space, parking garage and more than 50,000 sf Class A office space in the South Beach area, south of 23rd Street, b, The Property Management and Lease Agreement between LNRJ LLC and Lincoln Management LLC, the latter which is owned 50%/50% by R. Donohue Peebles and Scott Robins, was reviewed and outlines Lincoln Management LLC's responsibilities as to the management, operation and maintenance of the Property in accordance with a budget to be submitted and approved by LNRJ 180 days before completion of the Property, Lincoln Management LLC will receive 1) a monthly fee equal to the greater of (a) $10,000 or (b) 4% of all gross rents from the Property, and 2) a fixed construction management fee of $289,288, and 3) agreement that Scott Robins Construction, Inc, shall be the construction manager for the Property. The Property Management and Lease Agreement also sets forth that Lincoln Management LLC will also coordinate the Leasing of the Property with the exclusive Leasing Agent designated in the Office Building Leasing Agreement. The Leasing Commissions are standard market rates and outlined in Exhibit "E" to the Agreement. This Agreement can be terminated for default or if the property is sold to an un-affiliated party, December 20, 2000 Commission Memorandum Lincoln Plaza Partners LLC Page 4 The Leasing Agent will perform the initial lease-up of the building, Thereafter, Lincoln Management LLC will coordinate all leasing activities, c, Office Building Leasing Agreement sets forth LNRJ LLC's intent 10 hire an exclusive leasing agent to perform the initial lease-up of the project. Thereafter, the Property Management and Lease Agreement provides for Lincoln Management LLC to coordinate the leasing of the project. d, An Exclusive Listing Agreement, between LNRJ and Lincoln Management LLC, was provided for our review that provides for an exclusive listing arrangement with Lincoln Management LLC and sets forth, at the time of a sale of the project, a fee of 1 % of the sale price, unless there is a co-broker in which case it shall be 1.5%, e, Development Management Agreement between LNRJ LLC and Lincoln Management LLC outlines Lincoln Management's responsibility to coordinate, manage, administer and evaluate, the development of the project. Lincoln Management will be paid a Developer fee of$921,130, amortized over an 18 month period, 5, Certified copies of the organizational documents for LNR Jefferson LLC have been provided and reviewed, 6, The certification required by Section 27 .1 (b) of the Agreement of Lease has been provided, attesting that there have been no changes in the ownership of Lincoln Plaza Partners, The Resolution further authorizes an amendment to Exhibit 10.4 outlining the ownership interest in the Lessee, as described above, The aforementioned amendments do not adversely impact the City's interest in the Project. It is recommended that the Mayor and City Commission adopt the attached Resolution, and thereby enabling the project financing and construction to proceed, JMG/cfa't5/rar T:\AGENDA\2000\DEC2000\REGULAR\ROBINS,MEM attachment Attachment A ODerating Aereement - Sets up the partnership interests for new entity called LNR Jefferson LLC. 1. LNR will provide all capital and secure all financing required fop the construction of the project. 2. Initial percentage interest shall be 90% LNR 10% Lincoln Plaza 3. Cash flow and net proceeds from project shall be as follows: < 90% LNR 10% Lincoln Plaza until LNR achieves a 20% lRR < 75% LNR 25% Lincoln Plaza until LNR achieves a 25% IRR < 65% LNR 35% Lincoln Plaza until LNR achieves a 30% IRR < 60% LNR 40% Lincoln Plaza until LNR achieves a 35% lRR < 55% LNR 45% Lincoln Plaza until LNR achieves a 35% IRR 4. LNR to be manager and have total control of all major aspects of the project. 5. LNR will repay Lincoln Plaza all our of pocket expenses to date approx $\.2M Development Management Alp'eement - LNR Jefferson LLC to hire new company called Lincoln Management LLC owned by Scott Robins and Don Peebles 50% each to develop the project. 1. LNR Jefferson LLC will pay a development fee to Lincoln Management of$921,130 in 18 equal monthly installments subject to proper performance of duties as outlined, 2. LNR Jefferson will also pay Scott Robins Construction a construction management fee of $289,288 paid monthly during construction subject to proper performance as outlined. PropertY Management and Leasine Agreement - LNR Jefferson LLC will hire Lincoln Management (owned by Peebles and Robins) to manage the building upon completion and serve as the leasing agent for the retail portion not the office portion of the building. 1. Management fee to be 4% of gross collected rents or $10,000 per month whichever is greater subject to proper performance of management duties as stated in agreement. 2. An exclusive leasing agent will be hired until stabilization after which Lincoln Management shall be office-leasing company. 3, Lincoln Management shall be retail-leasing company subject to industry standard leasing fees. Exclusive Listine Aereement - At time of sale, LNR Jefferson LLC shall hire Lincoln Management to be the exclusive listing agent for the property, 1. Fee to be I % of sales price unless there is a co-broker in which case it shall be \.5% Lincoln Development Operating Agreement - Agreement between Peebles and Robins setting forth responsibilities. Peebles and Robins to each own 50% of the stock.