A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE FINANCE AND CITYWIDE PROJECTS COMMITTEE (FCWPC), AND AUTHORIZING THE CITY MANAGER TO NEGOTIATE A NEW LEASE AGREEMENT BETWEEN THE CITY, AS TENANT, AND 1680 COSTA, LLC, AS LANDLORD, FOR USE OF APPROXIMATELY 4,814 SQUARE FEET OF OFFICE SPACE, LOCATED AT 1680 MERIDIAN AVENUE, SUITES 203 & 602, MIAMI BEACH, FLORIDA, TO BE USED AS ADMINISTRATIVE OFFICES FOR THE CITY'S CODE COMPLIANCE DEPARTMENT; SAID LEASE AGREEMENT HAVING AN INITIAL TERM OF SIXTY-THREE (63) MONTHS, COMMENCING APRIL 1, 2019, AND ENDING JUNE 30, 2024, WITH TWO (2) RENEWAL TERMS OF THREE (3) YEARS EACH, AT THE CITY'S OPTION, WITH AN ANNUAL RENTAL PAYMENT IN THE AMOUNT OF $211,772 FOR THE FIRST YEAR, AND THEREAFTER SUBJECT TO ANNUAL BASE RENT ESCALATIONS OF THREE PERCENT (3%) FROM THE PREVIOUS YEAR, PLUS INCREASES ABOVE THE BASE YEAR OF THE CITY'S PROPORTIONATE SHARE OF THE TAXES, INSURANCE AND COMMON AREA MAINTENANCE; AND FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE THE FINAL NEGOTIATED LEASE AGREEMENT.

The Administration recommends that the Mayor and City Commission accept the recommendation of the FCWPC and adopt the Resolution authorizing the City Manager to negotiate a new lease agreement between the City and 1680 Costa, LLC, for approximately 4,814 square feet of space, located at 1680 Meridian Avenue, Suites 203 and 602, Miami Beach, Florida.

BACKGROUND

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 17^th 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 17^th Street parking garage.

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

Finance and Citywide Projects Committee

This matter was presented at the February 22, 2019 Finance and Citywide Projects Committee (FCWPC) meeting.  The FCWPC recommended in favor of executing a new lease agreement with 1680 Costa, LLC in accordance with the above stipulated terms and conditions. 

The Administration recommends that the Mayor and City Commission accept the recommendation of the FCWPC and adopt the Resolution authorizing the City Manager to negotiate a new lease agreement between the City and 1680 Costa, LLC, for approximately 4,814 square feet of space, located at 1680 Meridian Avenue, Suites 203 and 602, Miami Beach, Florida; and upon successful negotiations, subject to Legal review and approval, authorizing the Mayor and City Clerk to execute the final negotiated lease agreement.