Background
On or about February 1, 2016, the City of Miami Beach, Florida (“City”) and A National Salute to America’s Heroes, LLC (“Producer”) executed an agreement to produce an annual Air & Sea show.
At the July 26, 2017 City Commission meeting, the City Commission directed the Administration to engage in discussions with the Producer to permit the production of the 2018 annual Air & Sea show.
On October 18, 2017, the Mayor and City Commission approved Amendment No. 2 to the Agreement to produce the 2018 Air & Sea show May 26 and 27, 2018, during Memorial Day Weekend.
On November 3, 2017, the City and Producer executed Amendment No. 2 to the Agreement which included the City providing sponsorship to cover City service costs in the amount of $350,000 and waiving of City Special Event Permit fees in the approximate amount of $154,000.
On February 14, 2018 the Mayor and City Commission unanimously approved Amendment No. 3, which provided for the Producer to execute a concert and for the City to fund $250,000, as a reimbursable expense after the event takes place, with the City having the ultimate decision making approval of all concert matters.
Amendment No. 3 provided several terms for the concert production including funding to the Producer on a reimbursement basis following the execution of the concert, and provided that the City have the exclusive right of approval of all Artists and/or talent performing (including volunteer and non-compensated performers) at the concert, as well as all concert elements. Amendment No. 3 also stipulated that the Producer must receive written approval of the City Manager for all proposed agreements related to the event.
The concert was to be free and open to the general public at no charge. The Producer was to have the right to sell sponsorships and/or advertising in support of the production, with City approval.
The Producer was solely responsible for executing all aspects of the concert, including permitting, stage set up, load-in/load up, rental of all necessary equipment, coordination of equipment set up for all artists, ensuring artist agreements provide that artists abide by and conform to all local, state and federal laws, rules and regulations, marketing and promotion of the concert, obtaining sponsorships, producing ushers and security personnel and all other elements necessary or ancillary to the production of the concert.
The Producer, after the concert, was to provide a detailed line item budget for the concert to the City Manager for review, acceptance, and written approval. Upon the successful execution and conclusion of the concert, the City was to pay the Producer up to but not to exceed $250,000 on a reimbursement basis for concert-related expenses, submitted with approved documentation verifying that vendors and/or artists have been fully paid.
Discussion
This year’s Air & Sea Show was scheduled for May 26 and 27, 2018. The City sponsored concert, to be produced and delivered by the Air & Sea show producer, was scheduled for Saturday, May 26, following the air show. Unfortunately, due to very inclement weather, the Saturday sea portion was cancelled, and the air portion was very minimal. The Saturday evening concert was cancelled by the Fire and Ocean Rescue Chiefs due to safety concerns related to the bad weather. Again due to weather, the Sunday sea portion was cancelled, and although delayed, the air portion was successfully executed.
In regards to the City’s financial investment, the $350,000 City sponsorship for free provision of City support services as well as the $154,000 in waived fees were committed for the Air & Sea show.
One of the City’s concern’s regarding the Air & Sea show was that the City logo was not prominently displayed as a prime sponsor for the event. The Administration would recommend clarifying this placement of City logo as an amendment to the agreement.
Also stipulated in the agreement for the Air & Sea show is the Producer’s responsibility to generate and provide supporting documentation on 1,000 room nights on Miami Beach. This documentation has been requested from the producer, but has not yet been provided. The contract stipulates this information should be provided within 30 days following the completion of the annual event -- which was June 24, 2018. As of June 26, 2018, the City has not received this documentation. In addition, this information was not provided by the producer last year.
For the concert portion, Amendment No. 3 (March 2018) stipulates that “subject to and contingent upon the successful execution and conclusion of the Concert, the City shall pay the Producer the not-to-exceed amount of $250,000, on a reimbursement basis, and solely for Concert-related expenses following Producer’s submission and City’s acceptance of documentation evidencing that the Artists and vendors for the Concert have been fully paid.”
As of the printing of this item, the producer has provided invoices to the City, totaling $250,000 which were reviewed by the City’s Internal Audit Department. Internal Audit has reviewed and approved a total of $207,907.20 in expenses, and has requested further back-up to validate remaining expenditures. As of the print date, this additional back-up documentation currently is pending from the producer.
February 2016, the City entered into an agreement with the event producer for the production of the Air & Sea Show for an initial term of 5 years.
Pursuant to that agreement, as well as Amendment No. 2 (November 2017), the City may terminate the agreement for convenience via Commission action no later than 90 days after the annual show, i.e. by August 19, 2018.
Further, per the agreement, the City needs to give 14 days advance written notice of the City Commission meeting in order to exercise right of termination per Section 20(a) of the Agreement. Should the Commission desire to amend the agreement and subsequent negotiations with the producer regarding these negotiations are not successful, the City would need to notify the producer 14 days in advance of the July 25, 2018 Commission meeting of the intent to terminate. That would provide compliance with the August 19, 2018 provision for termination for convenience.
The Producer may terminate the agreement for convenience no later than July 15, following the annual show.
In the instance of a default, the City or Producer must give written notice to the defaulting party, and provide a cure period not to exceed 30 days.
Commission Direction
This item was discussed at the June 6, 2018 Commission meeting; the after action noting this discussion is attached here as Exhibit A.
Further, Administration was directed to bring this discussion item back to the June 27, 2018 Commission meeting for further discussion. The Manager subsequently deferred the item to the July 2, 2018 at the request of the event producer.