Operated by Miami Beach Watersports Center, Inc (the “Tenant”), the Ronald W. Shane Center, also known as the Miami Beach Rowing Club, (the “Facility”), is a popular winter and spring training location for collegiate rowing programs, an international destination for Olympic rowers, and home of the Miami Beach Rowing Club, which annually hosts the Head of the Indian Creek Regatta, as well as other collegiate races.

On June 6, 2018, the Mayor and City Commissioners held a discussion regarding the Miami Beach Watersports Center, Inc. lease (originally titled: Discuss the Miami Beach Rowing Club Lease) referring the item to the Finance and Citywide Projects Committee (FCWPC). On June 28, 2018, the FCWPC held further discussions regarding the current operating practices of the Facility and its future as it relates to its maintenance and improvements under the extant lease.

Recently, Dr. Ronald Shane, primary benefactor of the Ronald W. Shane Center and chairman of Miami Beach Watersports Center, Inc.’s Board of the Directors, initiated conversations with the City regarding the future of the Facility. The current lease will expire on its own terms on May 21, 2021 and Dr. Shane has requested a new lease.

As a historical reference, the City of Miami Beach entered into a lease agreement on December 14, 1988 as lessor with the Jewish Community Center, Inc. (JCC) for the parking facility located at 65th Street and Indian Creek Drive, to construct and operate a rowing facility. On November 20, 1991, this lease was amended and restated, extending the term of the lease twenty (20) years, thus enabling the lessee to meet University of Miami’s requirement to obtain a financial commitment for the construction of a rowing facility.

As part of the amended lease, the City also appropriated a matching contribution of $225,000 toward the construction of additional improvements for the rowing facility, now known as the Ronald W. Shane Center.

In 1996, the City authorized the assignment of the lease, from the JCC to Miami Beach Watersports Center, Inc., the new not-for-profit corporation established to operate and maintain the Facility, and on July 10, 2002 Miami Beach Watersports Center, Inc., as the current lessee, entered into a second amended and restated consolidated lease (the “Second Amended Lease”).

The consolidated lease authorized extensive capital improvements to the existing leased premises, which included the construction of a second boathouse, and a second floor events venue. The lease also authorized an additional ten (10) year extension, which is set to expire on May 21, 2021.   

In 2007, the Facility underwent a two million dollar expansion project. The Facility is located at 65th Street and Indian Creek Drive, Miami Beach, Florida, which property includes improvements constructed by the Tenant, which include a two-story building (the “Building”), a wet dock (the “Wet Dock”) and a dry dock facility (the “Dry Dock”) (collectively, the “buildings and improvements”).

The current proposal provides for the City and Miami Beach Watersports Center, Inc. (the “Tenant”) to terminate the existing lease agreement as of October 31, 2020, instead of May 21, 2021, and enter into a new nine-year lease agreement, effective November 1, 2020, allowing the Tenant to continue operating this unique, renowned facility.

Pursuant to the terms of the Second Amended Lease, Tenant is responsible for the maintenance of the improvements during the lease term and at the end of the lease term, the buildings and improvements transfer to the City.  As additional consideration for this new lease, Tenant will transfer all title and interest in the buildings and improvements on the Demised Premises to the City, which will be memorialized pursuant to a quitclaim deed from Tenant to the City.   

The seawall and other portions of the improvements are in need of replacement and Tenant is not financially able to pay for said required capital improvements.  The City has already budgeted the cost associated with the replacement of the seawall, in the amount of $780,000.  As a result of the need to replace the seawall and raise the elevation for the new seawall, the Tenant will no longer be able to continue utilizing the existing dock ramp and floating dock.  The cost to replace the gangway (dock ramp) and landing platform and connection plate from landing platform to the existing dock and other related construction work, has been estimated at approximately $600,000.    

The parties are in the process of negotiating a new nine (9) year lease, will contain the following essential terms:

(1)  Term:  November 1, 2020 – October 31, 2029;

(2)  Use:  primary operation, a rowing center; opportunities for education for children and adults; a unique and enjoyable venue for rowing and other watersport related activities, special events, receptions, and community meetings; a catalyst for community promotion of its waterway usage; enhancement of rowing-related water recreational education programs; and Development of adaptive rowing program;

(3)  Tenant Maintenance Responsibility:  Tenant would retain responsibility over the operation, management and payment of all utilities, janitorial, pest control, grounds maintenance services, repair and replacement of all improvements, fixtures, and equipment on the Demised Premises, including maintenance of interior plumbing and electrical and paint;

(4)  City’s Maintenance Responsibility:  The City would be responsible for the maintenance, and replacement (at the City’s sole discretion), of the capital improvements or infrastructure (i.e. including, but not limited to, the roof, structural elements and infrastructure, HVAC, exterior structural plumbing and sewer lines, and structural electrical, seawall, exterior paint, exterior windows etc.) for the Demised Premises.

(5)  City Maintains Fire Insurance:  Since the buildings and improvements are now owned by the City, the City would insure them as part of the City’s stock;

(6)  City’s Use:  The City would continue to have use of the Facility at no cost to the City, for meetings and as a polling station.

City staff has conducted a preliminary review of the baseline condition of the Demised Premises and has determined that the following capital improvements will have to be completed in the near future.  The recommendation is to review Capital Budget with the Office of Budget Management to determine funding during the next five-year capital improvement plan.

Seawall                                               $   780,000                  already appropriated and funded;

Dock ramp/landing platform

(required as a result of the

replacement of the seawall)                $   600,000                  unfunded

Replacement of 3/5 of the A/C units   $    58,000                   unfunded

Roof replacement                               $   235,000                  unfunded

Total Capital Improvements:              $1,673,000

The Department is seeking Committee direction on the Miami Beach Watersports Center, Inc.’s lease.