|
<br />Summary Minutes: Special City Commission Meeting
<br />
<br />October 4,2011
<br />
<br />Sunny Isles Beach, Florida
<br />
<br />Gil Dezer said what they are proposing is clean, simple, easy, it takes away all the problems
<br />that you could potentially have, it gives you a net present value, well in excess of what you
<br />would get over this 25-year term. Instead of us leasing or using the equity of the project to go
<br />ahead and finance it, they are prepared to buy it, specifically because he lives across the street,
<br />his office is in the hotel right now and we need office space ourselves. We feel there is a need
<br />for office space in Sunny Isles Beach, they have had similar discussions with different health
<br />care organizations that want to come in and do surgery centers and things of that nature, and
<br />to also enhance and give ourselves a proper medical facility here within Sunny Isles Beach.
<br />The idea of a car museum they had four years ago is out but they will still do a restaurant!
<br />retail situation there similar to Tony Roma's hopefully on a higher scale. They still have a
<br />real workable set of plans that can be built, and if you add up the payments of how it works,
<br />our $7 Million is half a million shy of their overall number but at the same time it is today,
<br />and it is in your hands, and it is guaranteed. The potential problems that may come up once
<br />the guy builds the building, sells the unit, has a mortgage, and then the association for some
<br />reason, because it would have to be the association making the land payment and for whatever
<br />reason, we have seen a foreclosure mess going on right now, and if that would strike again, it
<br />would be the City losing that income, and going through evictions, etc. The idea is that they
<br />will go ahead with the site plan approval mirroring the same exact timeframe that they had in
<br />their Letter ofIntent, that is where they came up with this, they have decided to seal the deal
<br />that the Commission already likes and make it better, and the only way to make it better is
<br />taking out all of the uncertainty.
<br />
<br />Jay Steinman, representing the Weintraub Companies, said he wanted to point out that the
<br />Letter of Intent does prohibit the City from dealing with the other party during negotiation
<br />rounds. He said Commissioner Scholl was right, they came in and restructured this deal in a
<br />fashion that would allow the City to own the improvements. They have no right to own those
<br />improvements until such time as they require the fee from the City. Basically the City has
<br />very low risk, they have deposit money that is nonrefundable, the developer goes in and builds
<br />the project, the developer defaults, the City owns the project. That is the way many projects
<br />have been financed all over the County, all over the State, some major projects through
<br />ground leases, you should not be afraid of the risk. There is no subordination, there is no
<br />financing, you will not have to deal with another lender that is financing the construction.
<br />They have committed to financing this project from their own investor equity.
<br />
<br />Avi Weintraub said that the City signed a 30-year lease in 2008 with the Dezers, in 2009 they
<br />came back and asked for an extension and nothing ever happened. That property was to build
<br />gross 248,000 square feet but he is building 140,000 square feet, they were providing 189
<br />parking spaces and that lease requires the City to go out and buy land somewhere nearby to
<br />add spaces ifthey need it. By his calculations in his size building you need 400 spaces and so
<br />you are going to have to buy land somewhere else and so that $7 Million is going to cost the
<br />City a lot more later on. His project is $7.5 Million but they are paying the City including
<br />interest $11.2 Million over the term. Another point is that Dezer could not get construction
<br />financing, and Weintruab will be putting up the money her~, the City will have $3 Million in
<br />their pocket. They are doing it the same way they did another building, they will get
<br />investors, that is the way real estate is done, you get investors, you start a building, and you
<br />build it. The risk is minimal, what they are going to do is to put improvements on this
<br />
<br />6
<br />
|