HomeMy WebLinkAbout2001-24276 RESO
RESOLUTION NO. 2001-24276
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE
MAYOR AND CITY CLERK TO EXECUTE AN AMENDMENT TO
THE CONTRACT FOR SALE AND PURCHASE BETWEEN
THEATRE REALTY, INC. AND THE CITY OF MIAMI BEACH TO
ACQUIRE THE BYRON-CARLYLE THEATER TO EXTEND THE
60 DAY DUE DILIGENCE PERIOD TO 90 DAYS, EXPIRING APRIL
10, 2001.
WHEREAS, on September 27,2000, the Mayor and City Commission adopted Resolution
No. 2000-24104, establishing two committees to (1) negotiate with the owner of the Byron Carlyle
Theater concerning the possible acquisition of the property by the City ("Negotiating Committee");
and (2) meet with the representatives of cultural arts groups and other potential users to discuss
potential uses for the property and funding strategies for its acquisition ("Program Uses and
Operational Committee"); and
WHEREAS, on November 29, 2000, a status report was presented to the Mayor and City
Commission on the progress of both Committees' work and, in accordance therewith, a motion was
passed directing the City to execute a Sale and Purchase Agreement with a 60 day option on the
property for $1.7 million; and
WHEREAS, on January 10, 2001, the Mayor and City Commission adopted Resolution No.
2001-24229 appropriating 10% of the $1.7 million purchase price, or $170,000, to be deposited in
escrow pursuant to the Contract for Sale and Purchase between Theater Realty, Inc. and the City of
Miami Beach for the acquisition of the Byron-Carlyle Theater (the Contract); and
WHEREAS, the Contract provided a 60 day investigation period and for a 90 day closing
time frame, and could be terminated anytime within the 60 days, with the deposit fully refundable;
and
WHEREAS, the proposed amendment extends the investigation period by 30 days, and the
closing time frame to 120 days; and
WHEREAS, if the closing does not occur 120 days from the execution of the Contract, the
seHer will impose a monthly rental of$19,500, which represents a 10% lease rate on the purchase
price, plus a pro-rata share of taxes and insurance; and
WHEREAS, the rent will be imposed until such time as the closing takes place and will not
be credited against the purchase price; and
WHEREAS, on January 10, 2001, the Mayor and City Commission also allocated $20,000
to conduct a preliminary site assessment/surveys and to engage a consultant to develop an
operational plan for the Byron-Carlyle Theater; and
WHEREAS, during the initial 60 day diligence period, the Administration has conducted
studies and performed an operational analysis to determine if it is viable and recommended to
proceed with the acquisition ofthe Byron-Carlyle; and
WHEREAS, the City's Property Management Director has ordered a roof and asbestos
survey and, at the same time, Bernard Zyscovich has donated his services to develop preliminary
schematic drawings based on input received from the Program Uses and Operational Committee;
and
WHEREAS, based upon the preliminary sketches provided, the City's Property Management
Director has estimated a minimum renovation cost of $5.5 million in improvements; and
WHEREAS, the combined purchase and renovation cost render a $7.2 million total
investment required to accomplish this acquisition; and
WHEREAS, the additional 30 day investigation period will afford staff with an opportunity
to review a reduced scope of work to be performed while still achieving the objectives of the arts
community; and
WHEREAS, separately, the City contracted Merle Gordon Dowling to develop an
operational and management plan for the facility that has identified the uses and potential users to
be programmed on-site and identified alternative scenarios for the management of the facility and
on-going coordination of users and uses.
WHEREAS, Ms. Dowling prepared three revenue and expense projections which reflect
projected deficits at the facility; and
WHEREAS, as stated above, the "Renovated Byron-Carlyle Theater Project" will require
a minimum investment of $7.2 million, not inclusive of the annual operating deficit that wiH be
generated; and
WHEREAS, of the $7.2 million projected total cost, only $700,000 offunding from Quality
of Life and commercial facade funds have been earmarked by North Beach Development
Corporation; and
WHEREAS, other funding sources have been identified but will not become available until
Fiscal Year 2002 and beyond, consisting of capital grants through the Miami-Dade Cultural
Facilities Grant Program; the State Cultural Facilities Grant Program; a Federal Economic
Development Initiative; through private grant sources, such as the Kreskge Foundation; and future
Convention Development Tax funds; and
WHEREAS, at this time, firm funding commitments have not been identified for the full
renovation cost of the renovated Byron-Carlyle Theater Project and optimally, the majority ofthe
funding should be in place at the time of acquisition; and
WHEREAS, given the combined cost of approximately $7.2 million, of which only
$700,000 has been identified, the Administration cannot recommend proceeding with the acquisition
of the Byron-Carlyle at this time; and
WHEREAS, on February 12,2001, the Finance Committee reviewed the Administration's
recommendation and deferred discussion/action to February 15,2001 to evaluate potential reductions
to the renovation scope of work and revised operating proposals for the management of the facility;
and
WHEREAS, on February 13, 2001, Wometco agreed to extend the initial 60 day due
diligence period by an additional 30 days, expiring April 1 0,2001 that will allow the City to further
explore developing modified renovation plans, access to additional firm funding and alternative
management and operating plans for the facility; and
WHEREAS, in the event the City is unable to identify a viable and feasible acquisition and
renovation plan for the Byron-Carlyle, the City may still incorporate a cultural component to any
future development proposed on the 72nd Street parcel; and
WHEREAS, the Byron-Carlyle Renovation Project is deemed critical as part of the North
Beach revitalization strategy, which as identified in the accompanying status report to the City
Commission, identifies approximately $110 million of the public investments the City is
implementing in North Beach; and
NOW THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission herein authorize the Mayor and City Clerk to Execute an Amendment to the Contract
for Sale and Purchase Between Theatre Realty, Inc. and the City of Miami Beach to acquire the
Byron-Carlyle Theater to extend the 60 day due diligence period to 90 days, expiring April 1 0, 2001.
PASSED and ADOPTED this 21st day of February, 2001.
?tfu
MAYOR
ATTEST:
~of~
CITY CLERK
APPROVED AS TO
FORM & LANGUAGe
& FOR EXECUTION
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CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
http:\\ci.miami~beach.fl.us
COMMISSION MEMORANDUM NO. lo8'-Or
TO:
Mayor Neisen O. Kasdin and
Members of the City Commission
DATE: February 21, 2001
FROM:
JOrgeM.GOnZaleZ\ .~~
City Manager 0 O"v 0
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE MAYOR AND
CITY CLERK TO EXECUTE AN AMENDMENT TO THE CONTRACT FOR
SALE AND PURCHASE BETWEEN THEATRE REALTY, INC. AND THE
CITY OF MIAMI BEACH TO ACQUIRE THE BYRON-CARLYLE
THEATER TO EXTEND THE 60 DAY DUE DILIGENCE PERIOD TO 90
DAYS, EXPIRING APRIL 10, 2001.
SUBJECT:
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
ANALYSIS
On September 27, 2000, the Mayor and City Commission adopted Resolution No. 2000-24104
establishing two committees to (1) negotiate with the owner of the Byron Carlyle Theater concerning
the possible acquisition ofthe property by the City ("Negotiating Committee") and (2) meet with
the representatives of cultural arts groups and other potential users to discuss potential uses for the
property and funding strategies for its acquisition ("Program Uses and Operational Committee").
Over the past five (5) months, the City has aggressively pursued development of an operational and
financing plan to accomplish the acquisition of the Byron-Carlyle theater. This report will detail the
efforts to date by both the Negotiating and the Program Uses and Operational Committee and will
outline the acquisition and projected renovation costs, the proposed operating and management plan
and the identified and potential funding sources. As a result of the findings to date, it is deemed in
the City's best interest and W ometco has agreed, to extend the 60 day due diligence to 90 days,
expiring on April 10, 2001.
Acquisition and Renovation Cost:
On November 29,2000, a status report was presented to the City Commission on the progress of
both Committees' work. In accordance therewith, a motion was passed directing the City to execute
a Sale and Purchase Agreement with a 60 day option on the property for $1.7 million.
On January 10, 2001, the Mayor and City Commission adopted Resolution No. 2001-24229
appropriating 10% of the $1.7 million purchase price, or $170,000, to be deposited in escrow
pursuant to the Contract for Sale and Purchase between Theater Realty, Inc. and the City of Miami
AGENDA ITEM RJf
DATE ~ -Of
February 21,2001
Commission Memorandum
Byron Carlyle
Page 2
Beach for the acquisition of the Byron-Carlyle Theater. The contract provided for a 60 day
investigation period and for a 90 day closing timeframe. The contract could be terminated anytime
within the 60 days and the deposit would be fully refundable. The proposed amendment extends the
investigation period by 30 days and the closing timeframe to 120 days. If the closing does not occur
120 days from the execution of the contract, the seller will impose a monthly rental of$19,500,
which represents a 10% lease rate on the purchase price plus a pro-rata share of taxes and insurance.
The rent will be imposed until such time as the closing takes place and will not be credited against
the purchase price.
On January 10, 2001, the City Commission also allocated $20,000 to conduct a preliminary site
assessment/surveys and to engage a consultant to develop an operational plan for the Byron-Carlyle
Theater. During the initial 60 day diligence period, the Administration has conducted studies and
performed an operational analysis to determine ifit is viable to proceed with the acquisition ofthe
Byron-Carlyle.
The City's Property Management Director has ordered a roof and asbestos survey. The asbestos
survey reflects cellulite asbestos in the perimeter plaster of the building, in the floor tiles in the
theater and in the HV AC duct work. The Property Management Director has also determined that
based upon the roof survey, the roof must be replaced and all insulation and lightweight concrete
must be replaced at an estimated cost of $250,000 - $300,000. Additionally, a new HV AC system
will be required. The floor tiling may be encapsulated as part of the renovation project.
At the same time, Bernard Zyscovich has donated his services to develop preliminary schematic
drawings based on input received from the Program Uses and Operational Committee. Based upon
the preliminary sketches provided, the City's Property Management Director has estimated a
minimum renovation cost of $5.5 million in improvements which would consist of a large
performance theater with 200 stadium seating (convert 2 existing theaters into I functional theater
creating a backstage with dressing rooms), 2 rehearsal halls and dance studios, a concession/cafe in
the lobby area, 6,000 sf of office space on the 2nd floor and a small management office on the 1st
floor.
The estimated renovation costs are detailed as follows;
Shell-Hard Construction Costs $2.3 million
(HV AC, plumbing, electrical, elevator, flooring, loading docks and facade ...)
Interior Finishes 1.6
AlE Fees .4
Contractor Profit, Bond, General Conditions .7
Estimated Renovation Cost $5.5 million
Acquisition Cost 1.7 million
Total Project Cost $7.2 million
Thereby, the combined purchase and renovation cost render a $7.2 million total investment required
to accomplish this acquisition. The additional 30 day investigation period will afford staff with an
opportunity to review a reduced scope of work to be performed while still achieving the objectives
of the arts community.
February 21,2001
Commission Memorandum
Byron Carlyle
Page 3
Operating Mana.gement Plan:
Separately, the City contracted Merle Gordon Dowling to develop an operational and management
plan for the facility. This study has identified the uses and potential users to be programmed on-site
and identified alternative scenarios for the management of the facility and on-going coordination of
users and uses.
Merle prepared three revenue and expense projections which reflect the following:
Scenario I: As an incubator project, the estimated deficit over the first four years would be
projected at an average of $232,000/year.
Scenario 2: This scenario contemplates a resident theater with an incubator component and
projects a declining deficit over the first four years from $179,000/year to $149,000/year. It is
anticipated in 12 years the theater will require an annual subsidy comparable to the Colony Theater,
of up to $50,000 a year.
Scenario 3: Modifies the second scenario by reducing the rehearsal/dance area within the project
and incorporates a commercial component that could generate up to $75,000/year, thereby reducing
the annual deficit to $10,000/year to $75,000/year.
While the Program Uses and Operational Committee favors Scenario I because it would adequately
address the needs of the cultural arts groups, the Committee is cognizant of the financial constraints
of this scenario. Scenario 3 appears to provide a balanced programming plan, which will reduce the
annual subsidy required and may help defray renovation costs.
Financing Plan:
As stated above, the "Renovated Byron-Carlyle Theater Project" will require a minimum investment
of $7.2 million, not inclusive ofthe annual operating deficit that will be generated.
Over the past 60 days, staff has worked diligently to identify potential funding sources. The funding
sources identified consist of Quality of Life funds, Commercial Facade Renovation Funds, local
State, Federal and private grant sources and Convention Development Tax (CDT) revenue. Of the
$7.2 million projected total cost, only $700,000 of funding from Quality of Life and commercial
facade funds have been earmarked as described below. Therefore, to accomplish the acquisition and
renovation would require the City to front approximately $6.5 in General Funds to be reimbursed
from future grant/CDT funding sources, when they become available.
On January 30,2001, the North Beach Development Corporation (NBDC) held a Quality of Life
Committee meeting and recommended allocating $150,000 from FY 2000 and $150,000 from FY
2001 Quality of Life funds towards the renovation ofthe Byron-Carlyle facility. Additionally, the
Committee recommended continuing a pro-rata allocation, i.e. 23% of the total annual Quality of
Life funding allocated to North Beach, over a period of 10 years to establish an endowment to fund
operational needs/operating deficit generated by the renovated Byron-Carlyle theater project. It was
anticipated that the City would fund any necessary subsidy during the establishment of the
endowment.
February 21,2001
Commission Memorandum
Byron Carlyle
Page 4
Facade Rehabilitation Funding provided to NBDC through the CDBG program. To this end,
MBCDC has also committed an allocation of $1 00,000 for the Byron-Carlyle renovation project.
Thereby, the City has identified $700,000 of funding through Quality of Life and Commercial
Facade Renovation funds to be contributed towards the renovation project.
Other funding sources have been identified but will not become available until FY2002 and beyond.
Capital grants through the Miami-Dade Cultural Facilities Grant Program, the State Cultural
Facilities Grant Program, as a Federal Economic Development Initiative, and through private grant
sources, such as the Kreskge Foundation will be pursued. To this end, staff is preparing grant
applications and the City has included the Byron-Carlyle project in this year's federal legislative
priorities; but again funding may only become available at some point in the future. Additionally,
available future Convention Development Tax funds could be earmarked towards this project once
a final agreement is reached between the City of Miami Beach and Miami-Dade County relative to
the proposed Baseball/P AC financing plan.
At this time, firm funding commitments have not been identified for the full renovation cost of the
renovated Byron-Carlyle Theater project. Optimally, the majority of the funding should be in place
at the time of acquisition. Past success in accessing the aforementioned funding sources identified
indicate strong likelihood of favorable consideration for future funding. However, given the
combined cost of approximately $7.2 million, of which only $700,000 has been identified, the
Administration cannot recommend proceeding with the acquisition of the Byron-Carlyle at this time.
On February 12,2001, the Finance Committee reviewed the Administration's recommendation and
and deferred discussion/action to February 15,2001 to evaluate potential reductions to the renovation
scope of work and revised operating proposals for the management ofthe facility.
On February 13,2001, Wometco agreed to extend the initial 60 day due diligence period by an
additional 30 days, expiring April 10, 2001, that will allow the City to further explore a
modified/reduced scope of renovation, continue to pursue additional firm funding commitments and
develop alternative management and operating plans for the facility. It is anticipated that a final
report and request for authorization to proceed or cancel the Sale and Purchase Agreement will be
presented to the City Commission on April 4, 2001.
The Byron-Carlyle renovation project is deemed critical as part of the North Beach revitalization
strategy, which as identified in the accompanying status report to the City Commission, identifies
approximately $110 million of the public investments the City is implementing in North Beach.
In the event the City is unable to identifY a viable and feasible acquisition and renovation plan for
the Byron-Carlyle, the City may still incorporate a cultural component to any future development
proposed on the 72nd Street parcel. The Administration will continue to explore renovation cost
savings while diligently pursue funding to accomplish the acquisition and renovation of the theater.
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AMENDMENT TO CONTRACT FOR SALE AND PURCHASE
This Amendment to Contract for Sale and Purchase is made and entered into as of the 9 ~ay of
!J1/ifLc!f-- ,2001, by and between THEATRE REALTY, INC., a Florida corporation (hereinafter
referred to as "Seller"), and CITY OF MIAMI BEACH, FLORIDA, a municipal corporation of the State
of Florida (hereinafter referred to as "Buyer").
WITNESSETH
WHEREAS, Seller and Buyer heretofore entered into a Contract for Purchase and Sale (the
"Contract"), having an Effective Date (as defined in said Contract); and
WHEREAS, the SeHer and Buyer wish to amend the tenns of said Contract.
NOW, THEREFORE, for and consideration in the premises hereof and for other good and valuable
consideration, the parties hereto do hereby amend said Contract as foHows:
1. The first sentence of Paragraph 3.c is hereby amended in its entirety to read as foHows: "In the event
the transaction contemplated hereunder has not closed on or before one hundred and twenty (120)
days from the Effective Date, Buyer shaH pay SeHer, in addition to the fuH purchase price stated
above, rent (the "Rent") in the amount of$650.00 per day until closing. Said rent shaH be paid in
thirty (30) day increments of$I9,500.00 each, with the first increment due no later than one hundred
twenty-one (121) days from the Effective Date."
2. The first sentence of Paragraph 8 of the Contract is hereby amended in its entirety to read as foHows:
"Buyer and its agents and consultants shaH have a period (hereinafter referred to as the
"Investigation Period") of ninety (90) days, beginning on the date the documents described in the
section of this Contract entitled "Evidence of Title" are delivered to Buyer, during which to
undertake at Buyer's sole expense, such physical inspections and other investigations of and
concerning the Subject Property and the Improvements as Buyer considers necessary for Buyer and
its consultants to view and evaluate the Subject Property.
3. AH other provisions of the Contract shaH remain in fuH force and effect except as the same are
amended by this Amendment.
IN WITNESS WHEREOF, the parties have caused these presents to be executed on the date below:
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THEATRE REALTY, INC.
"Seller"
By: '-I1?I~-PL1~
As its: R(f!.S\~
Executed on: 5ll, l c> \
~~.
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~~."-4 Q.~
Witness:
Witness:
f,\Al'J'O\l.fVLIAOI\UMNlI.'n!EATM,IO.WI'I)
City of Miami Beach, Florida,
a municipal corporation of the State of Florida
"Buyer"
By:
~~
As its: m~
Executed on: ;;J I B-1 0 J
A TrEST:
By: trhL6' f~
Robert Parcher, City Clerk
David M. Krause, Es
"Escrow Agent"
By:
As'
Executed on:
'r/
I
APPROVED AS F'
FORM & LANG~)\v;:
& FOR EXECUTION
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