ANALYSIS:
On August 31, 2017, representatives from Lessee met with the Administration to discuss a request for an extension of the Leases, for a period of fifty (50) years, in order to facilitate the refinancing of both properties. Lessee submitted a formal request for an extension of the air rights leases, dated August 16, 2017, attached hereto as Exhibit A (Request for Extension of Air Rights Leases). The lease extension will reaffirm, and will have no effect on, the municipal parking spaces located at both sites.
As stated in the request letter, Lessee intends to use the proceeds of the refinancing for capital renovations to the properties. The renovations would include, but not be limited to, site work, exterior façade work, new windows, interior common areas and office renovations, apartment renovations, and building systems (e.g., elevators, roof, electric, plumbing, water pumps, generators, fire alarm systems, etc.).
The Administration has worked with Lessee to provide modifications to the lease extension agreement, including, but not limited to, the items below.
1. include enhancements to generator capacity to ensure continued operation of HVAC, elevators, life safety systems, etc. after a tropical storm or hurricane for a period up to 96 hours after loss of power;
2. criteria for condition of building/units at the end of the extended term;
3. comply with Miami Dade County 40 year recertification requirements, and subsequent 10 year recertification requirements;
4. proactively manage and comply with the required Miami-Dade County annual registration of eligible tenants for the County’s Emergency Evacuation Assistance Program (EEAP) for the elderly and/or disabled individuals who:
a) are unable to evacuate on their own due to a specialized transportation need
b) are homebound residents and unable to walk to a bus pickup point and do not have anyone that can provide transportation
c) have medical needs that prevent them from evacuating on their own
d) are bedbound patients
e) are on life-sustaining medical equipment that requires electricity
f) require assistance with daily living activities
5. comply with required Miami Beach registration of other residents who need some type of daily assistance to live on their own, including completion of annual assessment form.
In accordance with Section 1.03(b)4 of Article I of the charter of the City of Miami Beach, the lease of ten years or longer of City-owned property (other than public beach rights-of-way and those properties addressed specifically in Section 1.03 of the Charter) shall, as provided by Ordinance, require approval by a majority 4/7 vote of all members of the Panning Board and 6/7 vote of the City Commission. On October 18, 2017, at the request of Commissioner Arriola, the City Commission referred the extension of the lease agreement to the Finance and Citywide Projects Committee and Planning Board for discussion.
Planning Board
Pursuant to Section 1.03(b)(4), of the City Charter, the Planning Board met on December 19, 2017and unanimously recommended in favor of the proposed lease extension.
Finance and Citywide Projects Committee
At the November 8, 2017 Finance and Citywide Projects Committee (FCWPC) meeting, the Administration presented the terms and conditions set forth above. The FCWPC considered this matter and recommended approving the lease extension subject to the modifications set forth above. The FCWPC further recommended including additional requirements to the lease extension to provide for accommodating residents during the renovation, implementing a resident satisfaction survey and providing for City inspection rights to ensure the building is adequately maintained. These additional requirements have been addressed in the lease extension agreement, attached hereto as Exhibit B (DRAFT Amendment No. 1 to Lease Agreement).