2011-1004 Special City Commission Meeting

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Summary Minutes: Special City Commission Meeting October 4, 2011 Sunny Isles Beach, Florida structure altogether. City Manager Cohen said that he is correct that they have not done anything else in the City but they do have a very similar project in A ventura which went through the process, they did very well, it is 100% sold out, it is still doing very well, and so there is a track record for this entity. Commissioner Scholl said it is a lot different deal then if we are holding the mortgage, we own the land, they are going to put improvements on it, and if they default, they default and we have improved land. It is a real estate deal and it is reasonably sophisticated, and he understands that, and they are taking a certain amount of risk by giving us the front-up money but still end up leasing the land. He doesn't feel that we have the exposure from an economic perspective. Mayor Ede1cup said there is always a risk, you are waiting for your final payoff. Commissioner Scholl said he thinks the risk is a timing risk more than an economic risk, given the structure of the deal, we will always get paid eventually. Commissioner Aelion does not agree, we will get paid if and when the financial institution that they seek financing from is going to be the first creditors. City Attorney Ottinot said they advised us that they are self- financing by selling the condos, and in meeting with the developer, they have advised us that they are not going to use the traditional lender in this project. They indicated that they will on behalf of investors that will basically finance the project and that the traditional way of financing would not apply, however, we would also have some oversight on documents and requirements that they have. Mayor Ede1cup said he thinks the Commissioner's point is the next in line buyer because the developer is selling the property as a condo and when the condo unit gets sold it will have financing but that financing is really subordinate to our rent but there will be a lender involved two steps down. Commissioner Scholl said the important thing is that our collateral has nothing to do with their rent, and he asked City Attorney Ottinot to explain what would happen if they stopped paying rent. City Attorney Ottinot said if they stop paying rent we can foreclose on the property and take over, obviously if the project is constructed and there is a condo association, we would have to deal with the existing tenant on that site but we would basically take, we own the land on this lease. Commissioner Aelion said then that all monies owed until that point would be forfeited, and City Attorney Ottinot said yes, we have a right to default, there is a default provision in the lease to protect the City. Mayor Edelcup noted that at the beginning of the meeting the Commission was handed a Letter ofIntent from Dezer Development, LLC, and asked how we would handle it, and City Attorney Ottinot said it is up to the Commission if they want to discuss it. Mayor Edelcup asked the City Attorney to remind the Commission of our legal status, and City Attorney Ottinot said that Warren Stamm is here to make a presentation, and as a reminder when we approved the last updated Letter of Intent we had agreed not to negotiate with another party with respect to the Alamo property at 18080 Collins A venue, but nevertheless Mr. Stamm can speak to the Commission. Warren Stamm, on behalf of Dezer Development, LLC, and the Dezer Companies, said he provided the Commission with a Letter ofIntent setting forth the terms and conditions upon which Dezer Development is prepared to purchase the City site located at 18080 Collins A venue, under what are very favorable financial and development conditions that benefit the 4