2011-0615 Regular City Commission Meeting

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Summary Minutes: Regular City Commission Meeting June 15,2011 City of Sunny Isles Beach, Florida ION. A Resolution of the City Commission of the City of Sunny Isles Beach, Florida, Approving a Ground Lease and Development Agreement and Design-Build Agreement between the City of Sunny Isles Beach and 4M Investors, LLC., in an Amount Not to Exceed Ten Million Seven Hundred Thousand Dollars ($10,700,000.00), in Substantially the Same Form as Exhibits "A" and "B" Attached Hereto, to Design and Build an Upscale Lifestyle Center in Gateway Park Consisting of a Park, Parking Garage, and Restaurant(s); Authorizing the City Manager and the City Attorney to Negotiate Final Agreements with 4M Investors, LLC for Approval by the City Commission Within Thirty (30) Days; Authorizing the City Manager and the City Attorney to Do All Things Necessary to Effectuate this Resolution; Providing for an Effective Date. Action: [City Clerk's Note: This Item was taken out of order and heard after Item 7B. See additional action under Item 4A.] Assistant City Clerk Betancur read the title, and City Attorney Ottinot reported noting that on April 21, 2011 4M Investors came before the Commission and submitted a revised proposal, and the Commission accepted the proposal. Joe Milton is required to obtain Site Plan Approval with respect to its schematic proposal which was submitted on April 21, 2011 by no later than December 31, 2011, and is required to obtain and submit for both permits no later than June 30, 2012. Mr. Milton has agreed, upon the City's issuance of Notice to Proceed, to finish construction of the project in no more than 310 days. With respect to contract price for the permit aspect of the project, Mr. Milton has agreed to a price not to exceed $10 Million as the guaranteed maximum price for the project comprising the parking garage, city park and related amenities. There is also a contingency involved in respect to the site, if Mr. Milton is not able to secure an acceptable restaurant operator, the Commission can terminate the ground lease and move forward and develop the entire site as a park. In this case, the parties have agreed that 4M will expand the city park to include the additional 60,000 square feet of the property and will do so at a cost not to exceed $700,000.00. The ground lease is for 99 years, and Mr. Milton has agreed to provide the City with 30% of gross rent, that term based on workshop comment and what was discussed with the City Manager to clearly define what the gross rent is, and will tell Mr. Milton what the gross rent is. In respect to private development, Mr. Milton is required to build with development in conjunction with the public development, basically within the same timeframe on pulling a permit. There will be a permanent parking garage on the site, and the City will earn all revenues on the 308 parking spaces under the ground lease and the design-build agreement. City Manager Cohen reported that the Commission is approving, in substantially the same form, the contracts and the implication here is that the City and 4M have agreed in principal on the major points, but there is some tweaking that we need to do to the language in the contracts. The base price for this project is $10 Million and an additional carve-out of $700,000 for the additional park land if in fact the retail development does not take place. The actual cost of the retail parkland based on our staff assessment is $1.7 Million which number was developed both in-house and in discussions with Mr. Milton and his representative. The City and the Milton family are going into a partnership and are sharing risks in this partnership. The City is paying a little more up front but you can look at the upfront price in a number of different ways. Can we build a parking garage for less than $10 Million, probably but would we get the same quality product that we are going to get from this deal, no we would not. The reason he strongly believes that is that the Milton family has a strong vested interest in the success of this project because of the development they own on 9