NEW BUSINESS  14.

COMMITTEE MEMORANDUM

HISTORY:

At the June 6, 2018 City Commission meeting, a discussion regarding the Miami Beach Watersports Center, Inc. lease (originally titled: Discuss the Miami Beach Rowing Club Lease) was referred to the Finance and Citywide Projects (“FCWP”) Committee.

Run by Miami Beach Watersports Center, Inc., the Ronald W. Shane Center (the “Facility”) is a popular winter and spring training location for collegiate rowing programs, an international destination for Olympic rowers, and home of the Miami Beach Rowing Club, which annually hosts the Head of the Indian Creek Regatta, as well as other collegiate races.

Recently, Dr. Ronald Shane, primary benefactor of the Ronald W. Shane Center and chairman of Miami Beach Watersports Center, Inc.’s Board of the Directors, initiated conversations with the City regarding the future of the Facility. Dr. Shane has expressed his desire to partner with the Parks and Recreation Department and for the City to play an active role by entering into a management agreement for the operation of the Facility.

As a historical reference, the City of Miami Beach entered into a lease agreement on December 14, 1988 as lessor with the JCC for the parking facility located at 65th Street and Indian Creek Drive, to construct and operate a rowing facility. On November 20, 1991, this lease was amended and restated, extending the term of the lease twenty (20) years, thus enabling the lessee to meet University of Miami’s requirement to obtain a financial commitment for the construction of a rowing facility. (Exhibit A)

As part of the amended lease, the City also appropriated a matching contribution of $225,000 toward the construction of additional improvements for the rowing facility, now known as the Ronald W. Shane Center.

In 1996, the City authorized the leasing entity be changed from the JCC to Miami Beach Watersports Center, Inc., the new not-for-profit corporation established to operate and maintain the Facility, and in 2002 Miami Beach Watersports Center, Inc., as the current lessee, entered into a second amended/restated consolidated lease.

The consolidated lease authorized extensive capital improvements to the existing leased premises, which included the construction of a second boathouse, and a second floor events venue. The lease also authorized an additional ten (10) year extension, which is set to expire on May 21, 2021. (Exhibit B)

In 2007, the Facility underwent a two million dollar expansion project.

ANALYSIS:

The current proposal provides for the City and Miami Beach Watersports Center, Inc. (the “Entity”) to terminate the existing lease agreement and enter into a nine-year management agreement. During the term of the proposed agreement, the Facility would continue to be managed by the Entity’s board of directors. Revenue, programming and all facets of the operation would remain with the Entity.

The City would contribute $500,000 to the Shane Family Foundation over a period of five years, at $100,000 per year. The funds would be used toward liquidating an existing loan the Entity has in the amount of $800,000. The remaining $300,000 owed through the loan would be paid off by Dr. Shane in exchange for the Facility to retain the “Ronald W. Shane Center” name.

At the end of the proposed agreement term, the City would retain sole proprietorship and management over the premises, its assets and operation.   

As proposed, the Entity would retain responsibility over the payment of all utilities, janitorial, pest control and grounds maintenance services. The Entity would also retain responsibility for minor maintenance repairs totaling $2,000 or less per item. All other major maintenance repairs beyond the $2,000 per item threshold and capital projects would be the responsibility of the City. 

In addition, the City would be responsible for covering insurance costs associated with the structure. Insurance costs relating to programming would remain the responsibility of the Entity. During the agreement period, the Entity would be responsible for replacing all equipment, including boats, oars, rowing machines, etc. Upon completion of the agreement, all equipment would be turned over to the City.  

In furtherance of the management agreement, the City would have access to the second floor meeting space on weekdays during regular operating hours (9 a.m. to 5 p.m.) at no cost, provided a scheduling conflict does not exist. Use by the City would be limited to public and departmental meetings, not social events, such as holiday parties. Meetings taking place outside of normal operating times may require reimbursement of staff time to the center.

City staff is working with the Entity to determine the extent of capital needs, as well as the existing inventory. Currently, the City contributes $85,000 annually to the Facility’s adaptive rowing programs. Through the Entity’s proposal, the first five years of the management agreement would cost the City an additional $100,000 annually, plus insurance, maintenance and capital costs, all of which are yet to be determined.

CONCLUSION:

Committee direction on the Miami Beach Watersports Center, Inc. lease.