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377-2001 RESO /' RESOLUTION NO. 377-2001 A RESOLUTION OF THE CHAIRMAN AND MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY AUTHORIZING THE CHAIRMAN AND SECRETARY TO EXECUTE A MANAGEMENT AND LEASING AGREEMENT WITH THE MIAMI BEACH COMMUNITY DEVELOPMENT CORPORATION (MBCDC), IN ASSOCIATION WITH THE FELENSTEIN KONIVER STERN REALTY GROUP (FKS), FOR THE MANAGEMENT AND LEASING OF THE RETAIL COMPONENT OF THE ANCHOR SHOPS AND PARKING GARAGE (ANCHOR SHOPS), PURSUANT TO RFP NO. 124-99/00, APPROPRIATING $37,500 FROM REVENUES DERIVED FROM THE OPERATION OF THE ANCHOR SHOPS FOR PAYMENT OF THE PROPOSED MANAGEMENT FEE; AND ADOPTING THE OPERATING BUDGET FOR FISCAL YEAR 2000/2001, AS SUBMITTED BY MBCDC FOR THE MANAGEMENT OF THE ANCHOR SHOPS WHEREAS, on November 8, 2000, the Chairman and Members of the Miami Beach Redevelopment Agency (RDA) authorized the Administration to enter into negotiations with the Miami Beach Community Development Corporation (MBCDC) and Felenstein Koniver Stem Realty Group, (FKS), the sole bidders in response to Request for Proposals No. 124-99/00 for the Leasing and Management of the Retail Component of the Anchor Shops and Parking Garage; WHEREAS, the negotiations have resulted in the attached proposed Leasing and Management Agreement, which terms are consistent with those set forth in MBCDC and FKS's initial proposal, calling for a Management Fee of $37,500 per year, or $3,125 per month, and a leasing commission of six percent (6%) for any leases procured by FKS, upon and subsequent to execution of a Management Agreement; and WHEREAS, the Administration has negotiated a sliding-scale commission for any new leases procured subsequent to the execution of the Management and Leasing Agreement, which is more in line with previous commissions paid in connection with existing leases at the Anchor Shops; and WHEREAS, the Leasing Commission schedule calls for six percent (6%) of the minimum rent for the first five years; decreasing to four percent (4 %) for the next five years; and three percent (3%) for any remaining term on the lease, with no leasing commissions paid for renewals, relocations and/or expansions of the existing leases as is commonly accepted practice; and WHEREAS, the initial term of the Agreement shall be for one (1) year; and WHEREAS, the Property Manager's primary role will be to maintain the Anchor Shops in a manner consistent with a first-class retail establishment; and WHEREAS, the Property Manager's primary role will be to maintain the Anchor Shops in a manner consistent with a first-class retail establishment; and WHEREAS, in accordance with the Management Agreement, a proposed Budget is also being submitted for approval at this time; and WHEREAS, since the Budget is to coincide with the City's fiscal year, the Budget only reflects the remaining nine months in FY 00/01; and, WHEREAS, the Budget has been structured to show projected income from the existing leases and operating expenses which comprises a breakdown of the proposed Management Fee spread over a monthly basis. NOW THEREFORE, BE IT DULY RESOLVED BY THE CHAIRMAN AND MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY, that the Chairman and Members of the Miami Beach Redevelopment Agency herein approve and authorize the Chairman and Secretary to execute a Management and Leasing Agreement with the Miami Beach Development Corporation (MBCDC), in association with Felenstein Koniver Stem Realty Group (FKS), for the management and leasing of the retail component of the Anchor Shops and Parking Garage (Anchor Shops); appropriating $37,500 from revenues derived from the operation of the Anchor Shops for payment of the proposed Management Fee; and adopting the Operating Budget for Fiscal Year 2000/01, as submitted by MBCDC, for the management of the Anchor Shops. PASSED and ADOPTED this 10th day of January, 2001. 1/1 CHAIRMAN ATTEST: 'r2Ib~ p~ SECRETARY KOB T:\Agenda\iab l02001IRDA lanchmgtres.doc ~ROVED AS TO FORM & LANGUAGE & FOR EXECUTION 1Vf.jJtmi/~ \- 5-0\ o~~'~n'fl:l~ 0.. (",.",. ....,... 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Gonzalez \ . r/ Executive Director ovr 0 A RESOLUTION OF THE CHAIRMAN AND MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY AUTHORIZING THE CHAIRMAN AND SECRETARY TO EXECUTE A MANAGEMENT AND LEASING AGREEMENT WITH THE MIAMI BEACH COMMUNITY DEVELOPMENT CORPORATION (MBCDC), IN ASSOCIATION WITH THE FELENSTEIN KONIVER STERN REALTY GROUP (FKS), FOR THE MANAGEMENT AND LEASING OF THE RETAIL COMPONENT OF THE ANCHOR SHOPS AND PARKING GARAGE (ANCHOR SHOPS); APPROPRIATING $37,500 FROM REVENUES DERIVED FROM THE OPERATION OF THE ANCHOR SHOPS FOR PAYMENT OF THE PROPOSED MANAGEMENT FEE; AND, ADOPTING THE OPERATING BUDGET FOR FISCAL YEAR 200012001, AS SUBMITTED BY MBCDC FOR THE MANAGEMENT OF THE ANCHOR SHOPS. RECOMMENDATION Adopt the Resolution. ANALYSIS On November 8, 2000, the RDA Board authorized the Administration to enter into negotiations with the Miami Beach Community Development Corporation (MBCDC) and Felenstein Koniver Stem Realty Group, (FKS), the sole bidder in response to Request for Proposals No. 124-99/00 for the Leasing and Management of the Retail Component of the Anchor Shops and Parking Garage. ~()Uni V()l~ l?edevel{)pment I)lstrict Agenda Item 3A [? Date (- Ie) - D f-- The negotiations have resulted in the attached proposed Leasing and Management Agreement, which terms are consistent with those set forth in MBCDC and FKS's initial proposal, calling for a Management Fee of $37,500 per year, or $3,125 per month and a leasing commission of6 percent for any leases procured by FKS, upon and subsequent to execution of a Management Agreement. There has been some modification of the leasing commission structure, in that the initial proposal called for a straight 6 percent fee over the entire term of all new leases, on lease renewals and expansions. The Administration has negotiated a sliding-scale commission which is more in line with previous commissions paid in connection with existing leases at the Anchor Shops. The Leasing Commission schedule calls for 6% of the minimum rent for the first five years, decreasing to 4 % for the next five years and 3% for any remaining term on the lease. No leasing commissions will be paid for renewals, relocations and/or expansions of the existing leases as is commonly accepted practice. Since the Anchor Shops are fully leased, no new commission fees are anticipated to be paid at this time. The term of the Agreement shall be for one (1) year to coincide with the remaining term of Quik Park's contract for managing and operating the Anchor Garage. At that point, the Agreement provides for a renewal option, provided that the RDA is satisfied with the services provided during the initial term of the contract. As the Property Manager for the anchor Shops, MBCDC's scope of services will include but not be limited to: . Procuring and negotiating leases for available space as well as for space that becomes available upon expiration and/or termination of exiting leases; . Collecting and remitting lease revenues; . Providing a means of communication for retail tenants to address and/or resolve matters pertaining to their respective leases, such as, but not limited to, maintenance or repair concerns; . Providing timely response to tenant issues and concerns; . Conducting daily on-site inspections to ensure that tenant spaces and common area spaces are maintained to a standard consistent with a first class retail center; . Coordinating with the City's Property Management Division on maintenance issues affecting the facility. . Communicating and coordinating with tenants to secure their respective spaces, in the event of a hurricane and/or any other citywide emergency; . Coordinating and facilitating any tenant improvements involving new and/or existing leases; . Maintaining a system of accounting, bookkeeping and reporting that will accurately reflect all income received and disbursements made in connection with the operation and maintenance of the Anchor Shops. . Affecting a good neighbor policy through involvement with the Washington Avenue Taskforce. The Property Manager's primary role will be to maintain the Anchor Shops in a manner consistent with a first class retail establishment. Daily on-site visits will serve to ensure that all common areas and sidewalks are kept clean and free of any unsightly conditions such as graffiti. The Property Manager will coordinate with Quik Park and the City's Property Management Division to identifY and track items in need of replacement and/or repair. Since the tenants are responsible for maintaining their own space, the Property Manager will enforce that this is done as well as provide assistance, as needed, to facilitate and/or expedite repairs. Additionally, any space which becomes vacant will fall under the responsibility of the Property Manager to maintain and show to prospective new tenants. In accordance with the Management Agreement, a proposed Budget is also being submitted for approval at this time. Since the Budget is to coincide with the City's fiscal year, the Budget only reflects the remaining nine months in FY 00/01. The Budget has been structured to show projected income from the existing leases and operating expenses which provide a breakdown of the proposed management fee spread on a monthly basis. A cushion of approximately $9,400, has been allocated between the Repair and Maintenance and Professional Services line items to address any unforeseen maintenance, repair and/or legal issues which may arise. The Leasing Commission line item reflects remaining brokerage fees due in connection with the Fuddruckers lease and the ArtConnection Swiss Design lease, for which the RDA Board appropriated funding on May 10, 2000 and July 26, 2000 respectively. The Budget also illustrates the estimated net operating profit from the parking operations and the total combined estimated Net Profit after debt service on the project. Though the RDA staffhas managed and leased the Anchor Shops since the termination of the Retail Space Master Lease Agreement with Loews, and has successfully leased the remaining vacant space, the RDA does not have the staff or resources to effectively continue in this capacity. Additionally, the Annual Independent Audit of the City and the RDA, has recommended that a "proper and qualified" management company take over management of the Anchor Shops. The attached Agreement provides these services at a reasonable cost. Under the former Retail Space Master Lease Agreement, Loews was to receive 5 percent of the gross lease revenues (Approximately $30,000), for what in essence was absentee management. The present Agreement with MBCDC and FKS provides the RDA with on-site presence and accountability and extensive local and national leasing experience for a negligable increase in cost. JMG/CMC:kob:sek ~ T:\Agenda\November 8, 2000\Anchret.mem ~ MANAGEMENT AND LEASING AGREEMENT THIS AGREEMENT is made as ofJanuary.10 2001, by and between MIAMI BEACH REDEVELOPMENT AGENCY (Owner"), and MIAMI BEACH COMMUNITY DEVELOPMENT CORPORATION, a Florida Not-For-Profit Corporation, whose principal place of business is 1205 DREXEL AVENUE, MIAMI BEACH, FL 33139, ("Contractor"): WIT N E SSE T H: WHEREAS, Owner is the owner of a fee interest in a site containing a municipal parking garage and appurtenances containing approximately eight hundred (800) parking spaces (the "Garage") and certain retail space (the "Retail Space "), commonly referred to as the Anchor Shops, and located in an area bounded by Washington and Collins Avenues in the proximity of 16th Street, in the City of Miami Beach, Miami-Dade County, Florida, as more particularly described in Exhibit "A", attached hereto and made a part hereof (said land, buildings and any other improvements now or hereafter located thereon hereinafter collectively referred to as the "Project"); and WHEREAS, Owner wishes to retain the services of Contractor as manager of the Project with responsibilities for managing, operating, maintaining and servicing the Project, for coordinating the leasing of the Project, and for the performance, on behalf of Owner, of all obligations of Owner relating thereto: 1. As landlord under all present and future leases of space of the Project; H. As grantor under any security deed now or hereafter encumbering all or any portion of the Project; HI. As a party to any easements that now or hereafter affect the Project; and iv, Otherwise as owner of the Project; (all of the aforesaid documents together with all amendments and modifications now or hereafter made thereto hereinafter collectively called the "Basic Documents"); and WHEREAS, Contractor is willing to perform such services with regard to the management, operation, maintenance and servicing of the Project and the obligations of Owner under the Basic Documents relating thereto; and WHEREAS, Contractor is willing to cooperate with and use its best efforts to assist Owner with regard to the leasing of space now or hereafter available for lease in the Project. NOW THEREFORE, in consideration of the foregoing and of the full and faithful performance by the parties of all the terms, conditions and obligations imposed on them hereunder, the parties hereto agree as follows: Agenda Item RD ~ - 3 f\ Date 1-10-0\ 1. ADDointment of Contractor. Owner hereby appoints Contractor as manager of the Project with the responsibilities and upon the terms and conditions set forth herein, and Contractor by its execution hereof does hereby accept such appointment. Contractor's Tax Payer Identification number is 59-211-0264. 2. ManalZement Services of Contractor. 2.1 Orientation. Contractor hereby acknowledges receipt of certain books and records with respect to the retail leasing and retail operation of the Project, personal property on the Project belonging to Owner, and all service contracts relating to the maintenance and operation of the Project. Within thirty (30) days after the effective date of this Agreement, Contractor shall prepare and submit to Owner a complete list of all books and records of Owner held by Contractor, a list of personal property, and a list of all service contracts. 2.2 ManalZement of the Proiect. Contractor shall devote its best efforts, consistent with the first-class professional management of similar facilities, to serving Owner as manager of the Project, and shall perform its duties hereunder in a diligent, careful and vigilant manner so as to manage, operate, maintain and service the Project as a first-class retail project. The services of Contractor hereunder are to be of a scope and quality equal to those generally performed by professional managers of other similar professional retail buildings in South Florida. Contractor shall make available to Owner the full benefit of the judgment, experience and advice of the members of Contractor's organization and staff with respect to the policies to be pursued by Owner in operation of the Project, and will perform such services as may be reasonably requested by Owner in operating, maintaining, servicing, improving and leasing the Project. 2.3 Use and Maintenance of the Proiect. Contractor agrees not to knowingly permit the use of the Project for any purpose which might void any policy of insurance held by Owner or which might render any loss insured thereunder not collectible, or which would be in violation of any governmental restriction. It shall be the duty of Contractor at all times during the term of this Agreement to operate and maintain the Project according to the highest standards achievable consistent with the expressed plan of Owner. Contractor shall use its best efforts to secure full compliance by the Project tenants with the terms and conditions of their respective leases. Contractor shall be expected to perform such other acts and deeds as are reasonable, necessary and proper in the discharge of its duties under this Agreement. 2.4 SDecific Duties of Contractor. Without limiting the duties and obligations of Contractor under any other provisions of this Agreement, Contractor shall have the following duties and shall use its best efforts tq perform the following services: A. Monies Collected. Collect all rent and other payments due from tenants in the Project and any sums otherwise due Owner with respect to the Project in the ordinary course of business. Owner authorizes Contractor to request, demand, collect, receive and receipt for all such rent and other charges and, with Owner's prior knowledge and written approval, to institute legal proceedings in the name of, and as an expense of, Owner for the collection thereof and for 2 . the dispossession of tenants and other persons from the Project. Such expense may include the engaging of counsel for any such matter, except that Contractor must notify Owner before engaging any counsel, in the event that Owner opts to use counsel provided by the City of Miami Beach Attomey's Office. All monies collected by Contractor shall be forthwith deposited in the separate bank account or accounts already established by Owner for such purpose. B. Obligations Under Basic Documents. Contractor shall duly and punctually perform and comply with all of the obligations, terms and conditions required to be performed or complied with by Owner under the Basic Documents relating to management, operation, maintenance and servicing of the Project, including without limitation, the timely payment of all sums required to be paid thereunder, to the extent of funds of Owner available for payment, all to the end that Owner's interest in the Project and its interests as Landlord under the leases shall be preserved and no default chargeable to Owner shall occur under the Basic Documents. After disbursements of all funds specified herein or in any other provision of this Agreement, and after establishing a cash reserve in an amount not greater than Three Thousand Dollars and 001100 ($3,000.00). any balance remaining at the time each monthly report is forwarded to Owner, as described in Section 7.2 herein, during the term of this Agreement, shall be disbursed or transferred to Owner or t(l such other person as directed from time to time by Owner. C. Insurance. To the extent funds of Owner are available, Contractor shall duly and punctually pay, on behalf of Owner, all insurance premiums of the Project or any part thereof, same to be done prior to the time that any insurance policy would lapse due to nonpayment of the premium. D. Reoairs and Maintenance. Contractor shall make all repairs and perform all maintenance on the building, appurtenances and grounds of the Project, as required to be made by Owner under the Basic Documents and in a manner acceptable to Owner. For any individual item of repair or replacement, the non-budgeted expenses incurred shall not exceed the sum of One Thousand Dollars and 00/100 ($1,000.00), unless Contractor obtains the prior written authorization of Owner; excepting, however, that emergency repairs irarnediately necessary for the preservation and safety of the Project or danger to life or property, may be made by Contractor without the prior written approval of Owner, provided that irarnediately after such emergency repairs, Contractor shall send Owner a report of any repairs so made. E. Eauioment and Suoolies. Contractor shall make all arrangements for the furnishing of the Project with utility, maintenance and other services, and for the acquisition of equipment and supplies as necessary for the management, operation, maintenance and servicing of the Project. The non-budgeted purchase of any single piece of equipment or order of supplies shall not be made without the written authorization of Owner. F. Tax Assessments. Contractor shall keep Owner informed of any change in the amount of real or personal property assessments or as to the advisability of contesting either the validity or the amount thereof. Contractor shall provide Owner with ample notice of such information in the event Owner determines to contest the validity or amount of said real or personal property assessments. 3 G. Insurance Coverage. Contractor shall carry insurance as required by law with respect to the Project and the operations related thereto, whether conducted on or off the premises, in an amount not less than one million dollar ($1,000,000), per occurrence, combined single limit, subject to adjustment for inflation and designating Owner, the City of Miami Beach and its employees and agents, as a named insured. In the event that Owner requires, at its sole option, Contractor to procure such insurance, Owner shall be given written notice to Contractor specifying the types of coverage, policy limits and the dates on which such coverage must be effective, and the Contractor shall thereafter obtain not less than three (3) bids for such insurance from insurance companies that meet the requirements set forth in this Article and shall place such insurance with the company that provides the lowest overall premium to the Owner. The insurance required under this Article shall include the following: i. General Liability coverage in an amount not less than one million dollars ($1,000,000), per occurrence, combined single limit, subject to adjustment for inflation and designating Owner, the City of Miami Beach and its employees and agents, as a named insured; ii. Worker's Compensation and Employers Liability Insurance, as required pursuant to Florida Statute; . 111. Fidelity Insurance covering any dishonest or fraudulent act of the Contractor and/or employees whether acting alone or in collusion with others, including robbery within the premises, with a limit of not less than $5000 per employee and $25,0000 for robbery per month; iv. Such other insurance as the Owner may reasonably request, provided such insurance is commonly provided for situations in South Florida similar to this Agreement. v. Insurance must be furnished by insurance companies authorized to do business in the State of Florida, and approved by the City of Miami Beach's Office of Risk Management and the Contractor's insurance company. The companies must be rated no less than "B+" as to management, and not less than "Class VI" as to strength by the latest edition of Best's Insurance Guide, published by AM. Best Company, Oldwick, New Jersey, or its equivalent, subject to approval of the City's Risk Manager. VI. Original Certificate ofInsurance for the above coverage must be submitted to the City's Risk Manager for approval prior to any work commencing. These certificates will be kept in the Office of Risk Management, 1700 Convention Center Drive, Miami Beach, Florida 33139. Contractor shall promptly investigate and make a full, timely written report to the insurance 4 company, with a copy to Owner, as to all accidents, claims for damages relating to the ownership, operation and maintenance of the Project, any damage or destruction to the Project and the estimated cost of repair thereof, and shall prepare any and all reports required by any insurance company in connection therewith. All such reports shall be filed timely with the insurance company as required under the terms of the insurance policy involved. Contractor shall have no right to settle, compromise or otherwise dispose of any claims, demands or liabilities, whether or not covered by insurance, without the prior written consent of Owner. Nothing contained in this paragraph or elsewhere in this Agreement is in any way intended to be a waiver of the limitation placed upon the City's liabilities as set forth in Florida Statutes Section 768.28. H. Personnel. Contractor shall employ such personnd as employees of and at the expense of Contractcr or its affiliates, and not of Owner, as may be necessary in order for Contractor to perform its obligations hereunder. No personnel shall be employed by Contractor for the Project without prior written approval by Owner. Contractor shall maintain commercial liability insurance coverage with a minimum liability limit of Five Hundred Thousand Dollars and 00/100 (SSOO,OOO.OO) to cover its employees who handle or who are responsible for funds belonging to Owner. Contractor shall comply with all laws relating to the employment by the Contractor of its employees. I. Other Services. Contractor shall perform all other services that are normally performed in connection with the operation of similar retail buildings and specifically as provided in South Florida to tenants of like premises, without additional charge; including. but not limited, to tenant coordination and build-out improvements. Should Contractor provide any services in addition to the above for which a separate charge is made ("Additional Services"), then a separate charge for such Additional Services shall be made to the tenants receiving such Additional Services. All such Additional Services shall be provided by Contractor directly to the tenants, and all such separate charges shall be retained for the account of Owner. All costs and expenses incurred in connection with furnishing such Additional Services shall be paid by Contractor on behalf of Owner, to the extent of funds of Owner available for payment, and any net profit shall accrue to any net loss for the account of Owner. Notwithstanding the above, the Additional Services shall exclude the installation of vending or other coin-operated machine or concessions, without the prior written authorization of Owner. J. Compliance with Laws. Contractor shall comply with all applicable Federal, State, County, and Municipal laws and shall take any and all action as may be necessary to comply with any and all orders or requirements affecting the Project by a Federal, State, County or Municipal authority having jurisdiction thereover, and orders of the Board of Fire Underwriters or other similar bodies. Contractor shall make recommendations to Owner to challenge or question any such order or requirement where Contractor believes that such a challenge or question is appropriate. Notwithstanding same, Owner shall have the fmal discretion as to deciding whether to undertake any recommended challenge or question, and owner's determination on same shall be fmal. K. Notices. All notices from any mortgagee, ground lessor or other party to any of the Basic Documents given pursuant thereto or pertaining thereto, if any, and all notices 5 from any governments or official entities, if any, shall be immediately delivered to Owner by Contractor. 3. Leasin!! Services of Contractor. 3.1 Leasin!!:. Contractor shall retain or otherwise engage Felestein Koniver Stem Realty Group as the exclusive leasing broker of Owner for the purpose of leasing any part of the Project now or hereafter available for lease during the term of this Agreement. In performing its duties, Contractor shall adhere to the standards for leasing consistent with those of leasing agents for retail buildings in the South Florida area. In the event that Contractor no longer uses or otherwise retains Felenstein Koniver Realty Group as the exclusive leasing broker herein, Owner shall have the right to approve a subsequent broker retained by Contractor and, in the event that Owner does not approve same, Owner, at its sole option and discretion, may terminate this Agreement upon seven (7) days notice to Contractor. Additionally, Owner and Contractor herein agree that any Leasing Commissions paid to Contractor, pursuit to section 3.4 herein, shall be paid with the understanding that such payments made by Owner to Contractor are to be disbursed to Contractor's leasing broker, as same is set forth in this section 3.1, or such exclusive leasing broker as may subsequently be approved by Owner. Notwithstanding the preceding sentence, Owner shall in no way be liable to the leasing broker for payment or non-payment of any leasing Commissions and the parties hereto agree that Contractor's leasing broker is neither an employee, agents, or otherwise in privity of contract with Owner. Accordingly, Contractor shall indemnify, save and hold Owner harmless from and against any and all losses, damages, claims, costs and expenses (including attorney's fees and costs) in any way resulting from or connected with any claims or suits for the exclusive broker's fee or other like compensation. This provision shall survive the term of this Agreement. 3.2 Terms of Leases. Unless otherwise specified by Owner, the Project shall be leased only on the following terms: i. To tenants not affiliated with Contractor, Owner, or any party affiliated with the Owner, the existing tenants as of effective date of this Agreement or any party affiliated with existing tenants, and meeting criteria set by Owner as to credit worthiness; ii. On a form of lease approved by Owner; iii. For a term approved by Owner; IV. At a rental rate approved by Owner; and v. With a rental increase for each subsequent period of the lease term, subject to approval of Owner. 6 3.3 Leasinl! Procedure. A. Prosoective Tenants. Contractor shall inform Owner's Representative over the telephone of any prospective tenants and shall inform Owner's Representative whether or not the prospective tenants and lease terms fall within the Leasing Guidelines, and such other information as Owner's Representative shall require. B. Lease Brief. Contractor shall prepare a lease brief on a form supplied to Contractor by Owner, shall submit a full breakdown of tenant finish expense, if any, and shall submit the lease brief, tenant finish breakdown, and prepared lease to Owner's Representative for review and signature. C. Signing of Lease. Owner shall have the right to sign each and every lease of the Project and Contractor shall not be authorized to sign any lease on behalf of Owner or be permitted to act as an agent of Owner in any capacity except as specifically authorized by Owner. Notwithstanding any provision of Section 3.3 or of this Agreement, Owner shall have no duty to approve any lease meeting the criteria hereunder, and such approval shall be and remain within the final and exclusive review, and within the sole and absolute discretion of Owner, and Owner shall, accordingly, incur no liability to Contractor for any failure or refusal to approve a lease submitted pursuant to the terms herein. D. Leasing Reoort. Each month, as a part of the monthly report described in Section 7.2, Contractor shall submit to Owner an internal leasing report relative to current occupancy of the Project, potential tenants, and ongoing negotiations. 3.4 Comoensation for Leasinl! Services. A. Leasing Commissions. Owner shall reimburse Contractor for payment of the following fees for the leasing services to be provided by Contractor's exclusive leasing broker, as provided in Section 3.1: An amount equal to the aggregate of the following percentages of the Minimum Rent by the tenant to Owner during the ,following years of the term of the Lease: I. Six (6%) percent of the Minimum Rent for years one (I) through five (5) of the term of the Lease; AND H. Four (4%) percent of the Minimum Rent for years six (6) through ten (10) of the term of the Lease; AND HI. Three (3%) percent of the Minimum Rent for the remaining years of the term of the Lease. The term "Minimum Rent" shall exclude additional rent or other charges of any type or nature whatsoever paid or payable by the tenant under the Lease including amounts payable on account of increases in real estate taxes, operating expenses, any escalations, utility payments or other 7 charges for any services, if any. No Leasing Commissions will be paid for renewals, relocations and/or expansions of the existing leases. B. Payment Schedule. The Contractor's broker shall be entitled to one-third of the Leasing Commission described in Section 3,4A and 3.5 upon full execution of a lease between Owner and tenant; one-third of the Leasing; Commission when tenant commences payment of the Minimum Rent under the Lease; and the remaining one-third, within six (6) months of payment of the Minimum Rent. 3.5 Outside Brokers. Owner shall not pay outside brokerage fees; other than the fees specified in Section 3,4. Accordingly, with exception of the fees specified in Section 3,4, Contractor shall indemnify, save and hold Owner harmless from and against any and all losses, damages, claims, costs and expenses (including attorney's fees and costs) in any way resulting from or connected with any claims or suits for a broker's or salesman's commission, finder's fee or other like compensation, made or brought by any other person or entity resulting from its own contact. This provision shall survive the term of this Agreement 3.6 Direct Nel!otiations. Owner may, if it deems necessary, enter into negotiations directly with any prospective tenants; provided, however, that such direct negotiations by Owner shall not affect the terms and conditions of this Agreement with regard to whether or when a commission is deemed to be earned. 4. Approval of Contracts. Contractor shall not execute or otherwise enter into or bind Owner with respect to any contract or agreement without the prior written approval of Owner. Contractor shall terminate any such contract with a subcontractor within fifteen (15) days after notice from Owners that the performance of such subcontractor is not satisfactory to Owner. Additionally, no contract with a subcontractor shall be made and entered into that exceeds the term of this Agreement, as provided in section 9.1, unless otherwise approved in writing by Owner prior to commencement of the term of such contract. 5. Compensation for Manal!ement Services. Owner shall compensate Contractor, for the management services rendered, herein with a "Management Fee" equal to Three Thousand One Hundred Twenty Five and 00/100 Dollars ($3,125.00) per month, which term is defined as follows: i. General and overhead expenses of the Project, except as provided m Section 8.2; and ii. All wages, salaries and compensation of personnel employed by Contractor as specified in Section 2,4H entitled, "Personnel"; and lll. All expenses incurred by Contractor which are not reimbursable hereunder. 8 Accordingly, Owner shall pay Contractor a Management Fee of Three Thousand One Hundred Twenty Five and 00/100 Dollars ($3,125.00) per month. 6. Construction Services. Contractor shall not provide direct Construction Services to tenants, other than those services that are normally provided in connection with the operation of similar retail buildings and specifically provided in South Florida to tenants of like premises, including but not limited to, the coordination of utility, fire protection, and life safety services to other tenants, at the time that tenant build-out improvements are performed, without additional charge. 7. Accountinl!. Records. Reports. 7.1 Records. Contractor shall maintain a comprehensive system of office records, books and accounts, which shall belong to Owner. Owner and others designated by Owner shall have at all times access to such records, accounts and books and to all vouchers, files and all other material pertaining to the Project and this Agreement, all of which Contractor agrees to keep safe, available and separate from any records not having to do with the Project. Upon execution of this Agreement all records, budgets, plans and reports hereunder shall comply with the requirements described herewithin. 7.2 Monthlv Reports. On or before the 15th day of each month during the term of this Agreement, Contractor shall provide Owner with a monthly narrative status report outlining progress and any significant event in the areas of leasing, physical plant management and administrative management concerning the property operations. Contractor shall provide Owner with a quarterly market survey comparing subject property to competitive properties in terms of rental rates and physical features, and providing a summary conclusion recommending market rental rates and terms for the subject property for the upcoming quarter. Contractor shall also prepare and deliver to Owner any other statements for the Project reasonably requested by Owner from time to time, . 7.3 Annual Financial Statements. At the request of Owner, Contractor shall prepare and deliver to Owner annual financial statements within thirty (30) days after the end of each fiscal year which shall contain a balance sheet as of the end of the fiscal year, statement of profit and loss and a statement of changes in financial position for the fiscal year then ended. Such financial statements shall be prepared on the modified cash basis and on the accrual basis in accordance with generally accepted accounting principals and shall include a reconciliation of the modified cash basis with the accrual basis. Contractor will cooperate with and give reasonable assistance to any independent public accountant retained by Owner to examine such statements or other records pertaining to the Project. 7.4 Annual Budl!ets. No later than July 1st of each year or such other date specified in a written notice from Owner to Contractor, Contractor shall prepare and deliver to Owner, for Owner's approval, a proposed operating budget and a capital improvement budget for the next calendar year. The operating budget shall set forth the projected income and receipts from the 9 Project for such fiscal year on an accrual basis and in reasonable detail and the operating expenses to be incurred during such year, such operating budget to be set forth on an accrual basis and in reasonable detail with each category of expense listed on a separate line. The capital improvement budget shall set forth on a cash basis and in reasonable detail a description of all capital improvements, repairs and replacements which Contractor proposes to make in and to the Project during the period covered by the budget and the estimated cost of each. Contractor shall further provide such other financial information as is reasonably requested by Owner. 7.5 Audit Provisions. Contractor shall, in accordance with good accounting practices and in such form as the Owner shall require, keep such books of account and records as will accurately and completely reflect all business done at, and all income received and expenses and disbursements incurred in connection with the operation and maintenance of the Project. All such books, records and reports shall be maintained at Contractor's office in the City of Miami Beach, Florida, and shall be available for inspection, audit, and copying by duly authorized representatives of the Owner upon request. Owner shall keep and preserve all such and records for a period of not less than five years, and shall not destroy or remove same without prior written notice and tight to take possession thereof. 8. Ooeratine: Exoenses. 8.1 Exoenses of Owner. All obligations or expenses incurred hereunder shall be for the account of, on behalf of, and at the expense of Owner, except as otherwise specifically provided in this Agreement; provided, however, that Owner shall not be obligated to reimburse Contractor for any expenses for office equipment or office supplies of Contractor; for any overhead expenses of Contractor incurred in its general offices, except as provided in Section 8.2; or for any expenses incurred where the prior written consent, approval, or authorization of Owner was required, and was not obtained. 8.2 Reimbursements of Exoenses. No amounts, other than those approved in writing by the Owner, and included in the Approved Budget prepared in accordance with Section 7.4 hereof, shall be reimbursed or advanced to the Contractor. The following out-of pocket costs and expenses reasonably and properly incurred by the Contractor in the performance of its obligation hereunder, in amounts not to exceed those approved by Owner in the Approved Budget prepared pursuant to Section 7.4, and properly documented, shall be reimbursed to Contractor as provided below in Section 8.3: A. "Administrative Expenses", which term shall be limited to the cost of stationary and paper, media reproductions, postage, and land line telephone charges associated with the Project. This term shall not include cellular telephone base service, vehicle fuel or mileage charges or other costs associated with travel. In addition to the amount appropriated for same in the Approved Budget, each individual expense associated with leasing advertisement and promotion of the Project shall have the prior written approval of Owner, and shall in no event exceed the total amount appropriated for same in the Approved Budget. 10 B. "Operating Supplies", which term shaH mean the reasonable and necessary cost for cleaning materials, lights bulbs and other consumable and expendable items required in the facility maintenance for the Project; C. "Repair and Maintenance", which term shaH mean the reasonable and necessary expenses for the upkeep and maintenance of the Project. This term shaH not include structural repairs, which wiH be performed by the Owner. D. "Leasing Commissions", which term shaH mean those fees paid to the Contractor's exclusive listing broker in accordance with Section 3.1 and 3.4 of this Agreement. E. "Other Operating Expenses", which term shall mean such other reasonable and necessary costs and expense set forth in the Approved Budget for items necessary to the operation of the Project. 8.3 Reimbur~ement Procedure Contractor shall submit with each Monthly Report, described in Section 7.2, invoices detailing eligible reimbursable expenses described above in Section 8.2 ; proof of payment for said expenses, such as returned check or credit card receipts; and a cover page organizing, in a manner foHowing good accounting practice, the reimbursement request. 9. Term and Termination. 9.1 Term. This Agreement is for an initial term of approximately one (I) year. The term of this Agreement shaH commence on January 01, 2001, and terminate on December 31, 2001, unless sooner terminated as provided herein. At Owner's sole option and discretion, this Agreement may be renewed for an additional one (I) year term, upon the same terms and conditions set forth herein, upon thirty (30) days written notice to Contractor, prior to the expiration of the initial term. 9.2 Termination bv Owner. Owner may, at aH times during the term of this Agreement, and any extension thereof, terminate this Agreement in the event that: 1. In Owner's sole opinion, Contractor has mismanaged the Project or has been negligent in the management, operation, maintenance or servicing of the Project or has otherwise defaulted in the performance of its obligations hereunder; OR 11. A receiver, liquidator or trustee of Contractor shall be appointed by court order, or a petition to liquidate or reorganize Contractor under any bankruptcy, reorganization or insolvency law, and such order or petition is not vacated or dismissed within 60 days, or Contractor shaH file a petition 11 in bankruptcy or request reorganization under any prOVlSlon of the bankruptcy, reorganization or insolvency laws, orif Contractor shall make an assignment for the benefit of its creditors, or if Contractor is adjudicated a bankrupt; OR iii. The present management of Contractor materially changes by reason of the acquisition or merger of Contractor by or with any other entity or otherwise; OR iv. There is damage or destruction to the Project and Owner decides not to rebuild or restore the Project, or there is a taking by condemnation, or similar proceedings, of a substantial portion of the Project; or Owner shall at any time sell or otherwise transfer ownership of the Project. Any such termination shall be effective within thirty (30) days following receipt of a written notice of termination given by Owner to Contractor, or upon such other date as specified by Owner in such written notice. 9.3 Termination bv Either Party. After the initial twelve (12) month term of this Agreement, either party hereto may terminate this Agreement, without cause and for convenience, at any time upon at least thirty (30) days written notice to the other party. Notwithstanding anything to the contrary herein, Contractor may terminate this Agreement without cause during the initial twelve (12) month term of this Agreement upon at least ninety (90) days written notice to Owner, and Owner may terminate this Agreement without cause during the initial twelve (12) month term of this Agreement upon at least ninety (90) days written notice to Contractor. 9.4 Contractor's Ril!hts and Oblil!ations after Termination. Upon any termination, the obligations of the parties hereto (except those pursuant to the Section hereof entitled "Indemnities by Contractor") including Owner's obligations to pay any fees or commissions to Contractor hereunder, shall cease as of the date specified in the notice of termination, except that Contractor shall comply with the applicable provisions of this Subsection and shall be entitled to receive any and all compensation which may be due Contractor hereunder at the time of such termination, including but not limited to all Management Fees up to the date of termination and all Leasing Commissions for leases signed prior to the termination date. Upon the termination of this Agreement as provided above, Contractor shall: i. Deliver to Owner, or such other person or persons designated by Owner, copies of all books and records of the Project and all funds in the possession of Contractor belonging to Owner or received by Contractor pursuant to the terms of this Agreement or of any of the Basic Documents; and ii. Assign, transfer or convey to such person or persons all service contracts and personal property relating to or used in the operation and maintenance 12 of the Project, except any personal property which was paid for and is owned by Contractor. Contractor shall at its cost and expense, remove all signs that it may have placed at the Project indicating that it is manager of same and replace and restore any damage resulting therefrom. Contractor shall also, for a period of 90 days after such termination, make itself available to consult with and advise Owner or such other person or persons regarding the operation and maintenance of the Project. 10. Indemnification. In addition to the indemnifications provided in Sections 3.1 and 3.5, and in consideration of a separate and specific consideration of $10.00 and other good and valuable consideration the receipt of which is hereby acknowledged, the Contractor hereby agrees to indemnify, defend and hold the Owner and its employees, agents and authorized representatives harmless with respect to any and all costs, claims, damages and liability which may arise out of the performance of this Agreement as a result of any negligent acts, errors or omission of the Contractor, or the Contractor's sub-contractors, or any other person or entity under the direction or control of Contractor. The Contractor shall pay all claims and losses arising out of Contractor negligent acts, errors or omissions and shall defend all suits, in the name of the Owner, its employees, agents and authorized representatives when applicable, including appellate proceedings, and shall pay all costs, judgements and attomeys' fees which may issue thereon. 11. Article 16. Venue. This Agreement shall be enforceable in Miami-Dade County, Florida, and if legal action is necessary by either PartY with respect to the enforcement of any or all the terms or conditions herein exclusive venue for the enforcement of same lie in Miami- Dade County, Florida. 12. Limitation of Liability. The Owner desires to enter into this Agreement only if in doing so Owner can place a limit on Owner's liability for any cause of action for money damages due to an alleged breach by the Owner of this Agreement, so that its liability for any such breach never exceeds the amount of fee payable herein. Contractor hereby expresses its willingness to enter into this Agreement with Contractor's recovery from the Owner for any damage action for breach of contract to be limited to a maximum amount of the fee set forth in the Agreement, less the amount of all funds actually paid by the Owner pursuant to the same. 13. No Al!:encv. Contractor shall be responsible for all of its employees or employees of any affiliate, the supervision of all persons performing services in connection with the performance of all of Owner's obligations relating to the maintenance and operation of the Project, and for determining the manner and time of performance of all acts hereunder. Nothing herein contained shall be construed to establish Contractor or any of its employees as agent or employee of Owner. 14. Assi2l1ment. Contractor shall not assign this Agreement without the prior written approval of the Owner. Except as aforesaid, this Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns. 13 15. No Waiver. The failure of either party to seek redress for breach, or to insist upon the strict performance of any covenant, agreement, provision or condition of this Agreement shall not constitute a waiver thereof, and such party shall have all remedies provided herein and by applicable law with respect to any subsequent act which would have originally constituted a breach. 16. Notices. Unless otherwise specifically provided, all notices, demands, statements and communications required hereunder shall be in writing and shall be sent by registered or certified mail, ifintendecl for Owner, addressed to Owner. Miami Beach Redevelopment Agency Attn: Executive Director 1700 Convention Center Drive - Third Floor Miami Beach, Florida 33139 With a copy to: City of Miami Beach Attn: Office ofthe City Attorney 1700 Convention Center Drive Miami Beach, Florida 33139 and if intended for Contractor, addressed to: Miami Beach Community Development Corporation Attn: Mr. Roberto Datorre, President 1205 Drexel Avenue Miami Beach, Florida 33139 or to such other address as shall from time to time have been designated by written notice by either party to the other party as herein provided. 17. CaDtions. The captions of this Agreement are inserted only for the purpose of convenient reference and do not define, limit, or prescribe the scope of intent of this Agreement or any part hereof. 18. ADDlicable Law. This Agreement shall be construed in accordance with the laws of the State of Florida. 19. Entire Ae:reement. This Agreement embodies the entire understanding of the parties and there are no further agreements or understandings, written or oral, in effect between 14 the parties relating to the subject matter hereof. This Agreement shall not be recorded or filed in any public records and if so filed or recorded shall be null and void at the election of the party which did not cause such filing or recording. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first written. OWNER: ATTEST: I MIAMI BEACH REDEVELOPMENT AGENCY By: By ~~r ftu~ Secretary Chairman STATE OF FLORIDA ) )55: COUNTY OF MIAMI-DADE) The foregoing instrument was acknowledged before me on this/d ~y of ~2000, by Neisen O. Kasdin, as Chairman, and Robert Parcher, as Secretary, of the MIAMI BEACH REDEVELOPMENT AGENCY, a public body, corporate and politic, on behalf of such public body and that he, as such officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained. They are personally known to me or produced valid Florida Driver's Licenses as identification. IN WITNESS WHEREOF, I have hereunto set my hand and official seal. My commission expires: ~ i I. ~ , ~~ =--s&i. ~fFiOri';;;- ,- . OFFICIAL NOTARY SEAL Print Name: I i/I,4,V 'l3RMUto,..,p LILLIAN BEAUOIAMP f NOTARY PUBLIC srATE OF FLORIDA COMMISSION NO, CC7383n MY COMMISSION EXP, APR, 29.2002 APPROVED AS TO FORM & LANGUAGE . FOR EXECUTION 4i!JIIf1f~ }-.;t -01 15 CONTRACTOR: MIAMI BEACH COMMUNITY DEVELOPMENT CORPORATION :~ES~b By JjJ (+c STATE OF FLORIDA ) )ss: COUNTY OF MIAMI-DADE) The foregoing instrument was acknowledged before me on this ,q day ofJMJIlt\^'L, 200~, by Q()~~nn) 'DPrrO-LII.(. , as ,and' --I as of the MIAMI BEACH DEVELOPMENT CORPORATION, and that he, as such officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained. They are personally known to me or produced valid Florida Driver's Licenses as identification. IN WITNESS WHEREOF, I have hereunto set my hand and official seal. ~::- &::: Notary Public, State of Florida Print Name: My commission expires: 1"'.' t'>. Jolt GIIIlCIdo * ~*My COmrnISIIon CC717557 "~""'Elcpilu F_IY 18, 2002 EXHIBITS: Exhibit "A": Legal Description Exhibit "B": Scope of Work 16 '. EXHIBIT "A" LEGAL DESCRIPTION Lots 8, 9, 10, 11, 12 and 13, Block 57, Fisher's First Subdivision of Alton Beach, according to the Plat thereof, as recorded in Plat Book 2, Page 77 of the Public Records of Dade County, Florida, together with all of 16th Street (Avenue "C"), less and except the following described parcel: BEGINNING at the Southwest comer of Block 54 of said Fisher's First Subdivision of Aiton Beach Plat; thence North 880 0' 53" East along the South line of said Block 54, a distance of 443.08 feet, to the Southeast comer of said Block 54; thence South 070 35' 04" West, a distance of 96.26 feet, to a point of cusp with a tangent curve concave to the Southwest; thence along the arc of said curve to the left, having a radius of25.00 feet and a central angel of 90000' 00", an arc distance of 39.27 feet, to a point of tangency; thence North 820 24' 52" West, a distance of 24.75 feet; thence South 880 00' 53" West along a line 8.00 feet North of and parallel with, as measured at right angles to the North line of Block 57 of said plat, a distance of 382. I 8 feet to a point on the Easterly Right-of-Way line of Washington Avenue; thence North 01059' 1 I" West along said Easterly Right-of-Way line, a distance of 62.00 feet to the Southwest corner of said Block 54 and the Point of beginning. Said lands lying and being in the City ofMiarni Beach and containing 65,910 square feet (1.5131 Acres) more or less. 17 EXHIBIT "B" SCOPE OF WORK The proposed scope of services shall include but not be limited to the following: i. Procuring and negotiating leases for available space as well as for space that becomes available upon expiration and/or termination of exiting leases; 11. Coiiecting and remitting lease revenues; lll. Providing a means of communication for retail tenants to address and/or resolve matters pertaining to their respective leases, such as, but not limited to, maintenance or repair concerns; IV. Providing timely response to tenant issues and concerns; v. Conducting daily and/or weekly on-site inspections to ensure that tenant spaces and common area spaces are maintained 0 a standard consistent with a first class retail center; vi. Communicating and coordinating with tenants to secure their respective spaces, in the event of a hurricane and/or any other citywide emergency; vii. Coordinating and facilitating any tenant improvements involving new and/or existing leases; viii. Maintaining a system of accounting, bookkeepin5 and reporting that will accurately reflect all income received and disbursements made in connection with the operation and maintenance of the Anchor Shops. ix. Affecting a good neighbor policy through involvement with the Washington Avenue Taskforce. 18