LTC 157-2021 500 Alton ProjectDocuSign Envelope ID: 25CFABFB-AAF5-4622-84EE-DD12F 1A61B5B
1AI '3E A CH
OFFICE OF TH E CITY MANAGER
NO. LTC# 15 7 -2 02 1 LETT ER TO CO M M ISSIO N
TO: Mayor Dan Gelber and Members of the City Commission
FROM:
DATE:
Raul J. Aguila, Interim City Manager
April 13, 2021
í":Doc uSigned by: e:!
SUBJECT: 500 Alton Project
On December 12, 2018, the Mayor and City Commission adopted Resolution No. 2018-30647,
approving a Development Agreement for the development, design and construction of a mix use
residential and commercial project on the 500-700 blocks of Alton Road, at a highly visible site at
the entrance to South Beach via the MacArthur Causeway.
In consideration for the vacation of 6" Street and other terms set forth in the Development
Agreement, the Developer is required to deliver certain key public benefits to the City, including,
among other terms, the design, permitting and construction, at the Developer's sole cost and
expense, of a 3.0 acre public park on the Development Site {the "Park Project"), with the 3.0 acre
park site to be conveyed to the City (the "Park Site"). Once completed, the City would own and
operate the Park Site as a municipal park for the benefit of the general public.
On July 17, 2019, the City Commission adopted Resolution No. 2019-30893, approving the First
Amendment to the Development Agreement, to provide for the Developer to design, permit, and
construct the Pedestrian Bridge Project on behalf of the City.
On February 12, 2020, the Mayor and City Commission adopted Resolution No. 2020-31180,
approving the Second Amendment to the Development Agreement. In addition to resolving
certain disputes between the parties relating to the calculation of floor area for elevator shafts,
stairwells, mechanical chutes, and chases, the Second Amendment provided for expedited
timeframes for the commencement and construction of the Project.
With respect to the timeline for completion of the Park Project, the Second Amendment provides
that completion must occur the earlier of: (i) 36 months following issuance of the Building Permit
(estimated June 2023), or (ii) 48 months from date of execution of the Second Amendment
(February 2024).
I am pleased to report that, notw ithstanding the Developer's contractual entitlement to
additional extensions of time due to force majeure delays associated with the COVID-19
pandemic, the Developer anticipates that the 3.0 acre Park Project will be substantially
com pleted years ahead of schedule, as early as June or July of this year.
In addition, the Second Amendment provides a timeframe for the Closing and conveyance of the
Park Site to the City) to take place, and for the Closing to be extended by the City Manager, in
writing, at his sole discretion, until certain environmental remediation/permitting matters are
resolved. Notwithstanding City's right to extend the Closing for environmental reasons, Developer
is also contractually entitled to extend the Closing for the entire period the State of Florida, Miami-
Dade County, and the City have been operating under a State of Emergency.
At this juncture, in view of the significant progress that is being made with respect to the
construction and early completion of the Park Project, I believe that even without taking into
1
a c c o u n t th e e x te n s io n s o f tim e fo r th e C lo s in g d u e to th e D e v e lo p e r a s s o c ia te d w ith th e p a n d e m ic ,
it w o u ld b e in th e C it y 's b e s t in te r e s ts fo r th e C lo s in g to ta k e p la c e s im u lta n e o u s ly w ith th e
s u b s t a n t ia l c o m p le t io n o f th e P a r k P r o je c t, o n c e th e D E R M p e r m it is c lo s e d a n d /o r D E R M
o t h e rw is e c o n fi r m s th a t th e w o r k in p la c e c o m p lie s w it h th e D E R M -a p p ro v e d re m e d ia l a c tio n p la n .
T h is tim in g w o u ld th e r e b y e n s u r e th a t w h e n th e C ity ta k e s fu ll o w n e r s h ip o f th e P a rk S ite , it w ill
d o s o in a m a tt e r c o m p le t e ly e li m in a te s a n y C it y e x p o s u r e fo r a n y e n v iro n m e n ta l o r D E R M -p e rm it
re la t e d m a tt e r s . O n c e th e C lo s in g o c c u r s , I w ill n o tif y th e M a y o r a n d C ity C o m m is s io n b y L T C .
In a d d it io n , w it h re s p e c t to th e re s id e n tia l p o rt io n o f th e P r o je c t, th e D e v e lo p e r h a s s im ila rly m a d e
s u b s t a n t ia l p ro g r e s s o n p e r m itt in g m a tt e r s , a n d I a m a d v is e d th a t a F o u n d a tio n p e rm it w ill b e
is s u e d fo r th e P ro je c t in th e n e a r f u t u r e . In o r d e r to p ro te c t th e C ity 's in te re s ts , D e v e lo p e r h a s
p ro v id e d th e C it y w it h a h o ld h a r m le s s re la t e d to th e fo u n d a tio n w o r k a n d c o n s is te n t w ith th e
D e v e lo p m e n t A g r e e m e n t , th e f u ll b u ild in g p e r m it fo r th e P ro je c t w ill n o t b e is s u e d fo r th e P ro je c t
u n t il th e P a r k P r o je c t is c o m p le t e d a n d th e C lo s in g h a s ta k e n p la c e .
F in a lly , in lie u o f a le tt e r o f c r e d it , th e D e v e lo p e r w ill e s ta b lis h a c a s h e s c r o w a c c o u n t w ith th e C ity
f o r th e f u ll a m o u n t re q u ir e d to c o m p le te th e c o n s tr u c tio n o f th e P a r k P ro je c t. In th e s im p le s t te rm s ,
a s "c a s h is ki ng," th e D e v e lo p e r 's e le c tio n to p ro v id e th e C ity w ith c a s h s e c u r ity (a s o p p o s e d to a
le tt e r o f c r e d it ) g o e s a b o v e a n d b e y o n d th e re q u ir e m e n t s o f th e D e v e lo p m e n t A g re e m e n t.
S h o u ld y o u h a v e a n y q u e s t io n s , p le a s e c o n t a c t E r ic C a r p e n te r , A s s is ta n t C ity M a n a g e r a t
3 0 5 -6 7 3 -7 0 1 0 .
us?
2