Item Coversheet

NEW BUSINESS  14.

COMMITTEE MEMORANDUM

TO: Finance and Citywide Projects Committee Members


FROM:
Jimmy L. Morales, City Manager


DATE: February 22, 2019


SUBJECT:DISCUSSION REGARDING A NEW LEASE AGREEMENT FOR OFFICE SPACE FOR THE CODE COMPLIANCE DEPARTMENT

HISTORY:

The Code Compliance Department currently occupies approximately 5,600 square feet in the 555 Meridian Avenue building and the Housing and Community Services/Homeless Outreach Department currently occupies approximately 4,300 square feet.  In order to facilitate the development of the Miami Beach Convention Center Hotel at this location, both departments must be relocated to alternate accommodations.  Staff is currently pursuing alternatives for the Housing and Community Services/Homeless Outreach Department within the City Hall complex; however, due to the large number of Code Compliance employees (approximately 60), there is not adequate space within any City-owned buildings.

 

Accordingly, staff toured potential sites in North Beach and near the City Hall complex to identify space for Code.  North Beach proved difficult to identify space with adequate parking as Code requires approximately 40 parking spaces at any one time for employees, plus an additional 40 parking spaces for City-owned vehicles.  Staff also toured third party office buildings, near the City Hall complex, across Meridian Avenue and 17th Street.  The City previously leased space in 1680 Meridian Avenue from 2006 to 2012 for the Fire Department and currently leases approximately 3,349 square feet in 1688 Meridian Avenue for the Transportation Department.  Staff has identified suitable space in the 1680 Meridian Avenue building which could be used to relocate Code Compliance, and would allow for parking at the City Hall parking garage and/or 17th Street parking garage.

ANALYSIS:

The criteria established by the Administration for the required office space included the following: 1) appropriate size between 4,500 and 5,500 square feet, 2) an existing buildout which meets the needs of the Code Compliance Department and would enable a quick occupancy, 3) adequate parking and 4) fair market terms & conditions.

 

 

Subsequently, the Real Estate Division identified space and negotiated terms and conditions for a lease at 1680 Meridian Avenue.  Prior to execution, the fully negotiated lease agreement shall be subject to Legal review and approval.  A summary of the proposed lease terms are as follows:

 

 

TENANT: City of Miami Beach

 

LANDLORD:1680 Costa, LLC

 

PREMISES: 1680 Meridian Avenue, Suite 203 & 602, Miami Beach, Florida 33139

 

SIZE: Approximately 4,814 rentable square feet (approximately 2,583 rentable square feet in Suite 203 and 2,231 rentable square feet in Suite 602)

 

TERM: Sixty-three (63) months

 

RENT ABATEMENT: Three (3) months

                                   

LEASE COMMENCEMENT DATE:  April 1, 2019

 

LEASE EXPIRATION DATE: June 30, 2024

 

RENEWAL OPTIONS: Tenant shall have two (2) renewal options for three (3) years each, at the Tenant’s option, at fair market rent.

 

INITIAL BASE RENT: $44.00 per rentable square foot (estimated to be $211,772 annually; $17,648 monthly)

                                               

BASE RENT INCREASES: Three percent (3%) annually

 

OPERATING EXPENSES: In addition to Base Rent, Tenant shall pay its pro rata share of maintenance, insurance and real estate taxes in excess of a 2019 base year, which is estimated at $15.21 per square foot.  Increases in controllable Operating Expenses shall be capped at no more than five percent (5%) above the previous year.  Landlord shall provide building janitorial service five (5) days per week, electricity, and water.   Landlord shall provide air conditioning during Code’s current hours of operation (approximately 20.7 hours/day).

 

TENANT IMPROVEMENTS: Landlord will provide an allowance of $10.00 per rentable square foot ($48,140) to be used towards improvements to the Premises.  Any unused allowance shall be applied towards rent. 

 

SECURITY DEPOSIT: None

 

USE:  Administrative offices



CONCLUSION:

The Administration recommends in favor of executing a new lease agreement with 1680 Costa, LLC in accordance with the above stipulated terms and conditions.  The Administration is seeking a recommendation from the Finance and Citywide Projects Committee.