Item Coversheet

Resolutions - R7  C




COMMISSION MEMORANDUM

TO:Honorable Mayor and Members of the City Commission 
FROM:Jimmy L. Morales, City Manager 
DATE:May  8, 2019
 

2:10 p.m. Public Hearing

SUBJECT:

A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, FOLLOWING A DULY ADVERTISED PUBLIC HEARING, ACCEPTING THE RECOMMENDATION OF THE FINANCE AND CITYWIDE PROJECTS COMMITTEE AND WAIVING, BY 5/7TH VOTE, THE COMPETITIVE BIDDING REQUIREMENT IN SECTION 82-39(A) OF THE CITY CODE, FINDING SUCH WAIVER TO BE IN THE BEST INTEREST OF THE CITY, AND APPROVING, IN SUBSTANTIAL FORM, A NEW LEASE BETWEEN THE CITY (LANDLORD) AND LIVING ARTS TRUST, INC. D/B/A O CINEMA (TENANT), FOR THE SPACE CURRENTLY OCCUPIED BY MIAMI FILM SOCIETY, INC. D/B/A MIAMI BEACH CINEMATHEQUE, CONSISTING OF APPROXIMATELY 2,523 SQUARE FEET, LOCATED AT 1130 WASHINGTON AVENUE, FIRST FLOOR SOUTH, MIAMI BEACH, FLORIDA, FOR A TERM NOT TO EXCEED NINE (9) YEARS; AND APPROVING, IN SUBSTANTIAL FORM, A CONCESSION AGREEMENT FOR THE ADJACENT OUTDOOR COURTYARD, HAVING APPROXIMATELY 300 SQUARE FEET, COTERMINOUS WITH THE LEASE TERM; AND FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE THE FINAL NEGOTIATED AGREEMENTS.


RECOMMENDATION

The Administration recommends that the Mayor and City Commission accept the recommendation of the Finance and Citywide Projects Committee (FCWPC) and approve a new lease between the City and Living Arts Trust, Inc. d/b/a O Cinema, for an approximately 2,523 square foot ground floor space at Historic City Hall located at 1130 Washington Avenue, and the adjacent outdoor courtyard, in accordance with the terms and conditions outlined herein.

 

HISTORY

Miami Film Society, Inc. d/b/a Miami Beach Cinematheque (“Cinematheque”), currently occupies approximately 2,523 square feet on the ground floor of Historic City Hall, located at 1130 Washington Avenue.  The lease agreement, dated December 9, 2009, was for an initial term of three (3) years, with two (2) renewal options for a period of three (3) years each. Following expiration of Cinematheque’s second renewal option on February 28, 2019, the City Commission approved a month-to-month extension by Resolution No. 2019-30730.

 

For a brief period in 2013, Cinematheque held a concession agreement with the City for operation of an outdoor café in the adjacent courtyard outside the premises and immediately south of the Historic City Hall building. The outdoor café component was not a successful venture and Cinematheque terminated the concession agreement after several months.  In another effort to help the nonprofit boost revenue and pay rent during the initial term, the City Commission adopted Resolution 2014-28790, allowing for alcohol sales and onsite consumption at the premises during film screenings only. 

 

On December 17, 2018, Cinematheque advised the City it would not seek another long-term lease of the premises after expiration of its then current lease (Attachment 1).  Cinematheque further advised the City about ongoing discussions with O Cinema for O Cinema to become tenant and operate the cinema upon expiration of Cinematheque’s lease.  O Cinema currently operates a cinema at the Byron Carlyle Theater, pursuant to a Management Agreement with the City, dated October 24, 2014, as amended on February 8, 2019, pursuant to Resolution No. 2018-30657. 

 

On January 3, 2019, staff met with O Cinema to discuss various terms and conditions of a potential O Cinema lease of the premises. While discussions continued with O Cinema, Cinematheque requested to remain in the premises on a month-to-month basis under revised lease conditions. Following Commission approval in March, the City and Cinematheque executed Amendment No. 2 to the Cinematheque lease (Attachment 2), whereby the lease term was extended on a month-to-month basis, until the new tenant occupies the premises or until August 31, 2019 (whichever occurs first).  Further, Cinematheque’s total collective gross rental payment was reduced from $4,792.60 to $2,500.00 per month.

 

In a formal proposal dated February 4, 2019 (Attachment 3), O Cinema requested to take over the space from Cinematheque pursuant to a new lease agreement.  O Cinema sought terms more favorable than those contained in the Cinematheque lease.  On February 13, the City Commission referred to the Finance and Citywide Projects Committee (FCWPC) a discussion regarding O Cinema taking control of the space to operate the cinema.

 

On February 22, 2019, O Cinema presented their proposal to take over the cinema and the FCWPC was receptive to the concept. O Cinema requested free or reduced rent and the FCWPC indicated that, in exchange, it wanted to see increased public benefits proposed by O Cinema, specifically benefiting seniors and children.

 

On March 19, O Cinema provided the City with a revised letter of intent which included modified terms and an enhanced public benefits package, which proposal was further revised on April 9, a copy of which is attached as Attachment 4

ANALYSIS

O Cinema’s Initial Lease Proposal

Rather than the free rent requested at the February FCWPC meeting, O Cinema’s Revised Request proposes $1,000 monthly rent during the first three years of the Initial Term. Thereafter, O Cinema proposes $2,500 in collective gross monthly rent (without any additional contribution for Operating Expenses), an amount equal to Cinematheque’s reduced rent approved by the City Commission during Cinematheque’s month-to-month transition period. The City Commission would also need to approve any subsidy of a reduced rate parking spot in Municipal Parking Garage G2.

 

O Cinema’s April 9th Revised Proposal included all base offerings contained in the Original Proposal presented to the February FCWPC:

  • 20% discount offered once per month to Miami Beach residents;
  • One (1) free screening event per year open to the whole community (“Celebrate Miami Beach”);
  • 100 free or discounted tickets per year for seniors (County Golden Ticket program); and
  • 100 free or discounted tickets per year for youth (County Culture Shock program).

 

Newly Proposed Public Benefits

In addition to the base offerings consistent in both proposals, the Revised Proposal contains the following additional benefits:

  • Monthly Culture Crawl- provide free indoor films from (6-7 PM), free outdoor projection in the courtyard (7-10 PM), and curate short films to play on the Culture Crawl trolley;
  • One ocean-side summer film screening curated and organized in tandem with Tourism & Culture Department;
  • Educational program bringing independent films and guest lecturers to every Miami Beach public school; and
  • Quarterly Matinees for Miami Beach senior citizens, including free film, refreshments, and post-film discussion.

 

While the educational programming in City schools and senior citizen matinees have the potential of benefitting these important resident demographics, O Cinema’s proposal did not contain any quantifiable goals for either program.  The City would like to see these programs developed in concept and any negotiated lease include measured benchmarks to track the public benefit provided (e.g. frequency, number of events, number of participants targeted).

 

 

Cinematheque

O Cinema

Original Request FCWPC Feb. 22

O Cinema

Revised Request FCWPC April 19

 

Initial

Term

 

3 years and 21 days

 

Three (3) years

 

Five (5) years

 

 

 

Renewals

 

Two (2), three (3) year terms

 

(month-by-month extension during “Extension Period” transition to O Cinema)

 

 

Two (2), three (3) year terms

 

 

Two (2), two (2) year terms

 

 

Rent

 

$2,515.59 / mo., with 3% annual increases

 

(reduced to $2,500 total collective gross payment during Extension Period)

 

 

 

None

 

Years 1 – 3: $1,000 /mo.

 

Years +4: $2,500 /mo.

 

Operating Expenses

 

Maintenance: $1,934.30 /mo. Insurance: $342.71 /mo.

 

(Eliminated entirely during Extension Period)

 

 

None

 

 

None

Parking

None

Two (2) spaces

at no cost

One (1) space

at reduced rate

 

 

Outdoor Cafe

15% revenue to the City, with $7,000 minimum annual guarantee

 

(Pursuant to concession agreement)

 

 

No revenue shared with the City

 

 

No revenue shared with the City

Exterior Advertising

None

Exterior Illuminated poster stands

Exterior Illuminated poster stands

 

If the City Commission is inclined to incorporate into the lease use of the outdoor courtyard for the sale of food and beverage, the Administration would recommend including standards similar to those in Cinematheque’s concession agreement.  For example, operation only during the cinema’s regular business hours, 30-day termination of convenience at City’s sole option, prohibition of alcohol in the outdoor concession area.

 

Both proposals submitted by O Cinema have requested use of exterior illuminated poster stands for advertising films playing at the cinema. Proposed renderings of this signage were shared with the City in a January 9th correspondence (Attachment 5). The City Code would likely require design review of such signage by the Historic Preservation Board and O Cinema has indicated it is would reach out to Planning staff regarding signage.

 

Finance and Citywide Projects Committee

This matter was presented to the FCWPC at its April 22 meeting.  The Administration recommended approval of the proposed lease subject to the following conditions:

  1. reduced rent of $1,000 during contract years 1 and 2, then $2,500 throughout the remainder of the Initial Term;
  2. the rental rate for any Renewal periods to be negotiated with the City upon renewal;
  3. fifteen percent (15%) of revenue from all outdoor concession business paid to the City, and similar restrictions placed on the café use as those imposed on Cinematheque;
  4. no free or discounted parking; and
  5. exterior advertising subject to the design review approval process.

 

The FCWPC recommended favorably for the lease, subject to the Administration’s conditions.  In exchange for O Cinema sharing percentage revenue with the City, the FCWPC recommended that beer and wine sales be permitted in the outdoor area. In addition, the Committee suggested that, whenever possible, O Cinema’s participation in the County ticket program should offer free, rather than discounted, tickets, in order to ensure the program is attractive to the public.

CONCLUSION

In the interest of maintaining the premises activated with a cultural amenity serving the public, the Administration recommends the Mayor and City Commission authorize the Mayor and City Clerk to execute a lease agreement with O Cinema.  Based upon the foregoing, the City Manager recommends that the Mayor and City Commission waive the formal competitive bidding requirement, by a 5/7ths vote, as permitted under Section 82-39(a) of the City Code, as being in the best interest of the City.

Legislative Tracking
Economic Development

ATTACHMENTS:
Description
Resolution and Agreement