A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING AND AUTHORIZING THE CITY MANAGER TO TERMINATE THE MANAGEMENT AGREEMENT FOR MAINTENANCE OF 1100 BLOCK OF LINCOLN ROAD, WITH UIA MANAGEMENT, LLC (MANAGER), FOR CONVENIENCE, UPON PROVIDING MANAGER WITH NINETY (90) DAYS NOTICE, AS PERMITTED PURSUANT TO PARAGRAPH 11 OF THE AGREEMENT, WITH THE CITY ASSUMING THE MAINTENANCE RESPONSIBILITIES THEREAFTER; AND AUTHORIZING THE CITY MANAGER TO NEGOTIATE ANY DOCUMENTED TERMINATION EXPENSES AUTHORIZED UNDER THE AGREEMENT; AND FURTHER AUTHORIZING THE CITY MANAGER TO EXECUTE ANY AND ALL DOCUMENTS REQUIRED IN CONNECTION WITH THIS SEPARATION, SUBJECT TO APPROVAL BY THE CITY ATTORNEY.  

The Administration recommends approval of the Resolution.

The City is the owner of the public right-of-way on Lincoln Road between Lenox Avenue and the Alton road, in Miami Beach, Florida. On March 14, 2007, the City Commission adopted Resolution No. 2007-26494, approving a Development Agreement between the City and UIA Management, LLC (“Manager”), for the design, development, and construction of certain improvements to the 1100 Block of Lincoln Road (“Project Site”), in conjunction with the project being developed by MBeach1, LLLP ("MBeach1"), an affiliate of Manager, at 1111 Lincoln Road, Miami Beach, Florida (the "MBeach1 Property"). 

On April 11, 2007, the City and Manager entered into a Development Agreement (the “Original Development Agreement”).  On June 3, 2009, the City and Manager entered into the First Amendment to Development Agreement (the “First Amendment”, and together with the Original Development Agreement, the “Development Agreement”).  The improvements to be installed by the Developer included, without limitation, pavers, street furniture, ponds, decorative fountains/water features, irrigation and drainage systems, indigenous plants and trees and special lighting.  In accordance with Section 52.6 of the Development Agreement, on January 11, 2010, the City and Manager entered into a Management Agreement for Maintenance of 1100 Block of Lincoln Road. 

On January 13, 2010, Resolution No. 2010-27303 was passed and adopted for the maintenance of the improvements to the 1100 block of Lincoln Road between the City and the Manager.

Under the Maintenance Agreement the Manager each year during the Term (as defined in the Agreement), will prepare a comprehensive annual maintenance program and schedule for the Maintenance of the City Property (the "Maintenance Program") and annual budget in the sum of $158,102.00 for the Maintenance of the City Property (the "Budget"). "Maintenance" shall mean the maintenance, repair, and replacement of the ponds, water features, plants and trees, lighting and electrical equipment, mechanical systems, and natural stone pavement on the City Property, trash removal, sweeping and cleaning.

Consequently, the costs in connection with the maintenance program have increased yearly.  During fiscal year 2017/18 the City incurred costs of approximately $170,000 plus insurance costs of approximately $60,500 (with policy expiring on March 23, 2019), with a projected increase in insurance in the approximate amount of $80,000.00 for fiscal year 2018/19. These costs far exceed the initial annual amount agreed with the Manager, without any increase in the level of services. The Administration is not satisfied with the management and maintenance services being performed by the Manager.  The City has calculated that it could provide more effective maintenance services for the Project Site for the same price or less. The current agreement is no longer a viable or reasonable option for Administration.

Based upon the foregoing, the City Manager and Administration recommend that the Mayor and City Commission authorize the City Manager to exercise the City’s right to terminate for convenience, in accordance with Section 52.6 of the Agreement, as being in the best interest of the City; and authorize the City Manager to negotiate any documented termination expenses, as authorized under the Agreement, and authorize the City Manager to execute any and all documents required in connection with this separation, subject to approval by the City Attorney.

Previously appropriated as part of the capital maintenance line item in the FY2018/19 RDA Budget. These funds will be appropriated for the Property Management Department to assume the maintenance responsibilities.