Item Coversheet



TO: Finance and Economic Resiliency Committee Members

Raul J. Aguila, Interim City Manager

DATE: March 26, 2021



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 23rd St., Miami Beach, Fl., spans an entire block of 23rd 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.


Colony Theatre Annual Benchmarks









FY 18-19


198 (132%)


39,497 (113%)

FY 19-20


146 (97%)


26,407 (75%)


(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”.



Key Lease Terms




Miami New Drama, Inc., a 501(c)(3) entity




340 23rd Street, Collins Park Cultural Arts Facility




Ground floor of Collins Park Garage, approximately 16,000 sq. ft. interior space plus exterior terrace areas


Commencement Date


Lease Year One commences at Temporary Certificate of Occupancy (TCO) for the Buildout Improvements


Initial Term


Five (5) years


Renewal Terms


Total of fifteen (15) years possible:

  • Two (2) renewal options of five (5) years each, subject to Tenant being in good standing
  •  Following completion of initial two (2) renewal terms, one (1) final renewal period of five (5) years, upon mutual agreement of the parties.


Note: MIND requests that the third renewal term be on same terms as initial two renewal terms





$1 per year. Tenant’s obligations limited to those operating expenses solely applicable to the Facility itself and Tenant shall not pay any additional common area maintenance expenses with respect to any other portion of the building






Operating Expenses


Tenant solely responsible for operational and programming expenses, including utilities, maintenance, and applicable taxes (sales taxes, use/excise taxes, personal, and ad valorem applicable to the Premises and Tenant’s business) with no City funding obligation whatsoever with respect to such costs. City will have no payment obligations with respect to Operating Expenses.


MIND to make reasonable efforts to apply for the Florida Division of Cultural Affairs Cultural Facilities Grant. Tenant, as a local cultural organization, may apply for Cultural Arts Council grants, and may pursue other grant opportunities offered by the City, provided, however, that in recognition of City’s significant contributions by making the Premises available rent-free and providing significant funding for the Buildout Improvements, Tenant shall not apply for any City grants related to the Buildout Improvements, operating expenses or programming and Tenant shall not apply for City grants in excess of what it is currently receiving from the City. Note that this limitation on additional grant funding for programming is not agreed to by MIND.






Tenant responsible for day-to-day cleaning, maintenance, and repairs. City responsible for major building systems (HVAC, electric, fire, water, water intrusion, etc.) and the building structure, including walls, windows, and exterior. Tenant also responsible for reasonable maintenance and repairs of the exterior frontage of the Premises, i.e. the sidewalk and stairs walk-up, in a manner consistent with similarly situated commercial establishments





Cultural Center Buildout


City responsible for funding of construction services, contractor selection, construction for buildout of the Premises, and procurement and/or installation of all theatrical equipment (collectively, the “Buildout Improvements” or “Project”).


Tenant responsible for selection and funding of Project design and Architect, for the City’s review and reasonable approval in its proprietary capacity, and subject to Property Management’s citywide design guidelines. In no event shall the City be responsible to fund any portion of design services.


Buildout Improvements will be developed with a design-to-budget approach based upon a Budget equal to the sum of the Landlord Contribution and Tenant’s Contribution.


City Financial Contribution


City’s total anticipated funding and construction budget shall not exceed $4,750,000.00.


Tenant Financial Contribution


Tenant shall be responsible for retaining and funding all design professionals, including the Architect, in the amount anticipated by Tenant to be $250,000.00, which Tenant shall raise through grants and donations (the “Tenant’s Contribution”). Tenant’s Contribution shall cover payment of all design services and soft costs (architectural and/or engineering fees) and, funds permitting, the acquisition of equipment for the theatrical performance space.


City may terminate the Agreement for convenience in the event Tenant fails to demonstrate it has secured funding for the design services and fails to contract with an Architect within 365 days following City Commission approval of the Lease





Tenant shall use the Facility solely and exclusively as a theater for its not-for-profit cultural presentations, production of live theatrical performances and uses ancillary thereto, including its administrative and business functions and rehearsal, costume and set design facilities for performances, and may activate the agreement as further provided herein with activations that are complementary and ancillary to the cultural component of the facility.




Café and Concession Subleases


  • Café sublease shall be market rate and selection of Café operator subject to City Manager approval.
  •  Tenant may offer one (1) concession or for-profit third-party activation (i.e. Books and Books) at below market lease rates in a footprint not to exceed 250 sq.ft., subject to City Manager approval.
  • All other concessions (or similar for-profit activations by third parties) offered at below market rates shall be subject to City Manager’s reasonable approval, limited to a term of 30 days (but up to 90 days upon City Manager approval), and ancillary and complementary to Facility’s cultural programming








During initial two (2) years of the Term, Facility shall operate at least four (4) days per week and the Café at least six (6) days per week, during hours consistent with similar café operations within the vicinity. The parties disagree whether, thereafter, the Facility should operate five (5) or six (6) days per week and café should be required to open six (6) or seven (7) days per week




Key Individual Clause


As required in the Resolution waiving bidding, principal directors, Michel Hausmann and Nicholas Richberg must remain actively involved in the company throughout Lease Term. If any one of the key individuals leaves the company or is no longer actively involved, MIND must locate a comparable replacement within 180 days, approved by the City Manager, otherwise City may terminate. This item is unresolved. The parties have agreed to remove Moises Kaufman as a “Key Individual” as he is not currently actively involved with MIND as would be required for a Key Individual.




Representation on Board of Directors


City Manager or designee serves as one (1) voting member on board of directors, with one (1) additional non-voting member, designated at option of the City Manager. This is an increase above the one (1) non-voting city representative on the board currently




Extension of

Colony Theater

Management Agreement


Term of Management Agreement for the Colony Theatre to be extended coterminous with the Collins Park Lease Term (including renewal periods), including cross-default provision for both the Management Agreement and Lease Agreement




Termination for Convenience


City may terminate for convenience if:

(1) City Commission, in its sole and absolute discretion, does not appropriate sufficient funds for the Buildout Improvements.

(2) City does not obtain regulatory approvals required for the Buildout Improvements.

(3) Tenant does not secure funding and enter into contract with an Architect within 365 days following Lease approval by City Commission.

(4) Tenant fails to replace Key Individual



Benchmark Performance Standards


During the first twelve (12) months following Commencement Date (such period constituting “Lease Year 1”, with each successive twelve (12) month period thereafter constituting another “Lease Year”), Tenant shall cause the Facility to host at least:

  1. 125 cultural or community activations per year
  2.  25,000 patrons per year (inclusive of virtual patrons for hybrid events)
  3. 150 students per year
  4. 75 seniors per year
  5. 50 Pro bono nonprofit/community rental hours per year
  6. 500 discounted tickets provided per year


Benchmarks shall increase during the Initial Term as follows:

(i) Lease Year 2: 150 events, 30,000 patrons, 175 students, 80 seniors, 50 pro bono nonprofit/community rental hours

(ii) Lease Year 3: 175 events 35,000 people, 200 students, 85 seniors, 55 pro bono nonprofit/community rental hours

(iii) Lease Year 4: 200 events 40,000 people, 225 students, 90 seniors, 55 pro bono nonprofit/community rental hours

(iv) Lease Year 5 (and thereafter including Renewal Terms): 220 events 45,000 people, 250 students, 95 seniors, 60 pro bono nonprofit/community benefit rental hours


Prior to any renewal periods, performance benchmarks may be adjusted as mutually agreed to by the parties





Benefit Proffer


In addition to the City’s Community Benefit Fund program for nonprofit rental waivers which are funded by the City, the City also has the right to use the Facility, excluding the restaurant/café, up to four (4) times per Lease Year, subject to availability and reasonable notice, for public purposes (recreational programs, public meetings, trainings, City-sponsored special events, receptions), without payment of any rental or use fee, except reimbursement by the City of Tenant’s direct out-of-pocket expenses reasonably incurred


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.

Applicable Area

South Beach
Is this a "Residents Right to Know" item, pursuant to City Code Section 2-14? Does this item utilize G.O. Bond Funds?
Yes No 

Strategic Connection

Prosperity - Market and promote Miami Beach as a world class arts, culture, and quality entertainment destination.
Attachment A - Concept PlanOther
Attachment B - Term SheetOther