On November 9, 2016, the City Commission established the Collins Park Arts District Overlay via Ordinance No. 2016-4061, in response to an expressed desire by the Collins Park Neighborhood Association to incentivize arts and entertainment-related uses. Today, the Collins Park neighborhood is home to cultural institutions including the Bass Museum of Art, the Miami City Ballet, and the Regional Library.

The recently completed Collins Park Garage, located at 340 23^rd St., Miami Beach, Fl., spans an entire block of 23^rd Street between Park Avenue and the vacated Liberty Avenue. The Collins Park Garage is located immediately adjacent to the Miami City Ballet headquarters and the future site of the City’s public-private artist and educator workforce housing project. The parking structure’s ground floor includes approximately 16,000 gross sq. ft. of unfinished interior commercial space with an elevated exterior terrace providing access from the street.   

On May 22, 2020, the Finance and Economic Resiliency Committee (the “FERC”) discussed tenant programming for the unleased commercial space of the Collins Park Garage, emphasizing the importance of community engagement and neighborhood enhancement, and the possibility of using City funds to curate cultural activation.

On July 29, 2020, Miami New Drama, Inc. (“Miami New Drama” or “MIND”) presented the City Commission with an unsolicited proposal to program the tenant space of the Collins Park Garage as a flexible black box studio. The City Commission directed FERC to examine the financial feasibility of the activation once MIND prepared a cost estimate and further developed its proposal.

On December 18, 2020, MIND presented FERC with an unsolicited proposal featuring a Concept Plan, which is attached as Exhibit A. In light of the fact that MIND had not yet identified any outside funding sources to facilitate project development, the Committee recommended preparation of an RFP to solicit interest from cultural arts institutions who may offer independent financial support without relying solely on the City to subsidize construction.     

On January 27, 2021, upon review of the Administration’s draft RFP for the Collins Park Cultural Arts Facility and MIND’s unsolicited, the City Commission found that the City’s best interests were served by waiving formal competitive bidding in favor of MIND’s unsolicited proposal. The City Commission adopted Resolution No. 2021-31568, authorizing negotiation of a term sheet with MIND to include the following material terms:

• Miami New Drama must remain functionally located within the City of Miami Beach, with Miami Beach as its primary performance venue;
• Existing principal directors Michel Hausman, Moises Kaufman, and Nicholas Richberg must remain directly involved with Miami New Drama;
• Miami New Drama’s board of directors must include voting representation by the City of Miami Beach; and
• Miami New Drama’s subleasing of any restaurant or retail component must be negotiated at market rates.

 MIND’s Colony Theatre Management Agreement

Since 2016, Miami New Drama has successfully activated the Colony Theatre pursuant to a Management Agreement that provides an annual operating subsidy from the City.  Initially, MIND received annual program funding of $170,000 and an additional $80,000 annual utility reimbursement. In 2018, the Management Agreement was amended to provide MIND with an annual City contribution of $500,000, consisting of a $420,000 operating subsidy and $80,000 for utilities. Pursuant to the terms of the Management Agreement, which expires in September 2023,  MIND has received a cumulative amount of $2 million since the inception of the Management Agreement in 2016. In addition, notwithstanding the City’s obligations per the Management Agreement, MIND has received $116,015 in Cultural Arts Council Grant funding for the past two years (including a $69,458 COVID-19 Emergency Relief Grant). This grant funding is not tied to the Management Agreement or MIND’s operation at the Colony, but is available to MIND because it is a nonprofit operating within Miami Beach.

(Note: The Colony Theatre has been closed since March 12, 2020, which prevented the run of two major productions. MIND pivoted to virtual programming, reaching some 7,000 people online, and recently completed an acclaimed production of 7 Deadly Sins on the 1200 block of Lincoln Road.)

Term Sheet dated March 19, 2021

The Administration has negotiated a Term Sheet based on the unsolicited proposal presented on December 18, 2020 to the Finance Committee, as refined by Resolution No. 2021-31568. The Term Sheet is attached as Exhibit “B”.

Project Delivery Structure

Since MIND’s original proposal, the Concept Plan featured an architectural design by Mexico-based TEN Arquitectos, whose founder, Enrique Norten, serves on MIND’s board of directors. According to MIND, TEN Arquitectos has agreed to considerably reduce the cost of its services to MIND, which will enable the design of a world-class cultural facility from a prominent architect at an attractive price. Given that the City is responsible for construction costs, the property is City-owned and will be leased rent free, the City would typically prefer to control all aspects of design and development. However, considering that MIND has agreed to fund all design-related services and soft costs for developing a superior facility (that the City will own and control upon lease expiration), the Administration will accept MIND’s proposed arrangement, if the City retains control of construction management for the Project and retains the ability to reasonably approve the design of the project. Although MIND initially requested control of construction, MIND has consented to this compromise since the City is funding the balance of hard costs.

In addition to MIND’s proffer to allow the City reasonable design input, with approvals at the 30%, 60% and 90% design stages, the City will also require the Tenant to include certain provisions in its Architectural/Engineering (A/E) contract that would otherwise be included in all A/E contracts to which the City is a party, i.e. the City’s minimum design standards, third-party beneficiary rights, and ownership/use rights to drawings and specifications. Due to Florida’s Consultants Competitive Negotiation Act (“CCNA”), the City cannot significantly contribute to the costs associated with the architect without violating the CCNA. Accordingly, it is imperative that MIND raise the funds necessary for architectural services, which MIND has indicated to be approximately $250,000. The parties have agreed that the City shall have the right to terminate the agreement if, after 12 months of Lease approval by the City Commission, MIND is unable to demonstrate that it has secured this funding and entered into contract with the architect.

Outstanding Negotiation Issues:

Third Renewal Term

MIND requests that the third renewal term be the same as the initial two renewal terms, which would be automatic if MIND meets its Benchmark Performance Standards and is not in default of the Lease. The City has proposed a third renewal term conditioned upon mutual agreement of the parties. It is highly unusual and without precedent for the City to enter into a rent-free lease for a period of twenty (20) years, let alone fifteen (15) years, for a yet-to-be constructed City facility, with a nonprofit organization that has only been in existence for six (6) years. Market conditions in fifteen (15) years are unknown, and the economic status of the City and MIND may be different. Mutual agreement between both parties whether to extend for a final third renewal is a fair expectation and the City hopes that MIND will be successful and the decision to renew will be without question.

Operational Hours

Following a two-year ramp up period, the City requests that MIND operate the Facility six (6) days per week with the café opened seven (7) days per week. MIND contends that market conditions could result in limited tenant interest as this is not how the restaurant industry functions and prefers that the café be required to only be open six (6) days per week with the Facility open five (5) days per week. The Administration feels that this is contrary to the direction of the Committee to activate the Collins Park Garage with public-facing uses (seven) 7 days a week both day and night.

Key Individual Clause

As part of the Resolution waiving competitive bidding and authorizing negotiation of terms, the City Commission required that the Lease stipulate that the three principal directors of MIND remain directly involved in the company throughout the Lease term. The Administration has agreed to require that only Mr. Hausmann and Mr. Richberg remain Key Individuals because Moises Kaufman is currently not a day-to-day participant at MIND, and would not be considered a “Key Individual”, as defined. The City has requested that the City Manager have approval rights of the Key Individual, and MIND has proposed that the Key Individual may be replaced with “an artistic director with national and/or regional artistic director theater experience”, without City express approval (other than a City designee serving on a search committee to identify a replacement Key Individual).

Limitation on Grant Funding

In consideration of the substantial capital expenditure for which the City is investing into the unsolicited proposal, the City has requested that MIND forgo seeking grant funding for the Buildout Improvements, maintenance and repairs of the Premises, improvements to the Premises, and programming activations to be located at the Premises. MIND has proposed that it be permitted to apply for additional amounts of City grants related to programming at the Facility.

The Administration seeks direction as to the policy and business issues outlined in this Memorandum and recommends that the Committee authorize the Administration to prepare a final, negotiated term sheet for review and approval of the City Commission.