Item Coversheet

Resolutions - R7  C




COMMISSION MEMORANDUM

TO:Honorable Mayor and Members of the City Commission 
FROM:Alina T. Hudak, City Manager 
DATE:October  13, 2021
 

First Reading

SUBJECT:

A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING, FOLLOWING FIRST READING, A LEASE AGREEMENT (“LEASE”), AS AUTHORIZED UNDER SECTION 82-37 OF THE CITY CODE AND SECTION 1.03(B)(4) OF THE CITY CHARTER, BETWEEN THE CITY OF MIAMI BEACH (“CITY”) AND MIAMI NEW DRAMA, INC., A FLORIDA NOT-FOR-PROFIT CORPORATION (“LESSEE”), OF A PORTION OF THE CITY-OWNED COLLINS PARK GARAGE LOCATED AT 340 23RD STREET (THE “PROPERTY”), FOR THE DEVELOPMENT AND OPERATION OF THE COLLINS PARK CULTURAL ARTS FACILITY, WHICH LEASE SHALL INCLUDE THE FOLLOWING USES: (1) A THEATER FOR PRODUCTION OF LIVE THEATRICAL PERFORMANCES AND USES ANCILLARY THERETO; (2) ADMINISTRATIVE AND BUSINESS FUNCTIONS AND REHEARSAL, COSTUME, AND SET DESIGN FACILITIES FOR PERFORMANCES; AND (3) A RESTAURANT CAFÉ PURSUANT TO A SUBLEASE TO A THIRD-PARTY OPERATOR (COLLECTIVELY, THE “PROJECT”); FURTHER, WAIVING, BY 5/7TH VOTE THE COMPETITIVE BIDDING AND APPRAISAL REQUIREMENTS OF SECTION 82-39 OF THE CITY CODE, FINDING THE PUBLIC INTEREST TO BE SERVED BY WAIVING SUCH REQUIREMENTS; PROVIDING FOR AN INITIAL TERM OF FIVE (5) YEARS, WITH UP TO THREE (3) RENEWAL TERMS FOR A PERIOD OF FIVE (5) YEARS EACH; FURTHER, PROVIDING THAT THE LEASE IS SUBJECT TO AND CONTINGENT UPON AN APPROPRIATION OF FUNDS BY THE CITY COMMISSION, AT ITS SOLE DISCRETION, IN THE AMOUNT OF $4,750,000 ON OR BEFORE OCTOBER 1, 2024; FURTHER, AUTHORIZING AN AMENDMENT TO THE MANAGEMENT AGREEMENT BETWEEN THE CITY AND MIAMI NEW DRAMA, INC. FOR THE COLONY THEATRE (“MANAGEMENT AGREEMENT”), TO EXTEND THE TERM OF THE MANAGEMENT AGREEMENT FOR A PERIOD TO RUN COTERMINOUS WITH THE TERM OF THE LEASE AND FURTHER, SETTING THE SECOND READING/PUBLIC HEARING OF THE LEASE FOR A TIME CERTAIN.


RECOMMENDATION

Approve on First Reading the Lease Agreement.

BACKGROUND/HISTORY

On November 9, 2016, the City Commission established the Collins Park Arts District Overlay via Ordinance No. 2016-4061, in response to an expressed desire by the Collins Park Neighborhood Association to incentivize arts and entertainment-related uses. Today, the Collins Park neighborhood is home to cultural institutions including the Bass Museum of Art, the Miami City Ballet, and the Regional Library. In addition, the Collins Park neighborhood will become home to Starwood Capital’s headquarters currently under construction at 2340 Collins Avenue.

 

The recently completed Collins Park garage, located at 340 23rd Street, spans an entire block of 23rd Street between Park Avenue and the vacated Liberty Avenue. The Collins Park garage is located immediately adjacent to the Miami City Ballet headquarters and the future site of the City’s public-private artist and educator workforce housing project. The parking structure’s ground floor includes approximately 16,000 gross sq. ft. of unfinished interior space with an elevated exterior terrace providing access from the street.

 

On May 22, 2020, the Finance and Economic Resiliency Committee (the “FERC” or “Committee”) discussed tenant programming for the unleased commercial space of the Collins Park garage, emphasizing the importance of community engagement and neighborhood enhancement, and the possibility of using City funds to curate cultural activation.

 

On July 29, 2020, Miami New Drama, Inc. (“Miami New Drama” or “MIND”) presented the City Commission with an unsolicited proposal to program the tenant space of the Collins Park garage as a flexible black box studio (the “Project”). The City Commission directed FERC to examine the financial feasibility of the activation once MIND prepared a cost estimate and further developed its proposal.

 

On December 18, 2020, MIND presented FERC with an unsolicited proposal featuring a Concept Plan, which is attached as Exhibit A. In light of the fact that MIND had not yet identified any outside funding sources, the Committee recommended preparation of an RFP to solicit interest from cultural arts institutions who may offer independent financial support without relying solely on the City to subsidize construction.

 

On January 27, 2021, upon review of the Administration’s draft RFP for the Collins Park Cultural Arts Facility and MIND’s unsolicited proposal, the City Commission found that the City’s best interests were served by waiving formal competitive bidding in favor of MIND’s unsolicited proposal. The City Commission adopted Resolution No. 2021-31568, authorizing negotiation of a term sheet with MIND to include the following material terms (“Term Sheet”):

 

  • Miami New Drama must remain functionally located within the City of Miami Beach, with Miami Beach as its primary performance venue;
  • Existing principal directors Michel Hausman, Moises Kaufman, and Nicholas Richberg must remain directly involved with Miami New Drama;
  • Miami New Drama’s board of directors must include voting        representation by the City of Miami Beach; and
  • Miami New Drama’s sublease of any restaurant or retail component must be negotiated at market rates.

 

On March 26, 2021, the FERC reviewed a draft of the proposed Term Sheet and provided direction to the Administration regarding four salient issues, which subsequently were resolved by the parties and incorporated into the Term Sheet (i.e., trigger for the third renewal term; allocation of risk for construction cost overruns; minimum days of Facility operation; and allowing MIND to apply for the City’s cultural arts grants in relation to programming at the Facility.)

 

On April 30, 2021, the FERC voted to move the item as presented for review by the City Commission, with requests for continued negotiation on two topics: (i) further development of Miami Beach-specific branding for the Facility and (ii) incorporation of a deadline for the City to identify sufficient Project funding.

 

On June 23, 2021, the City Commission unanimously adopted Resolution 2021-31749, accepting the recommendation of the FERC at its April 30, 2021 meeting, relating to a proposed lease agreement between the City and MIND, for the development and operation of a Collins Park Cultural Arts Facility within the City owned Collins Park garage (the "Lease"), and approving the Term Sheet for the Lease; further, directing the Administration to draft and finalize the Lease consistent with the Term Sheet, with the Lease subject to approval by a 4/7th vote of the Planning Board and a 6/7th vote of the City Commission, pursuant to section 1.03(b)(4) of the City Charter; and further, referring the proposed Lease to the Planning Board for review, in accordance with the requirements of the City Charter and City Code.

 

On July 27, 2021, the Planning Board reviewed the Term Sheet for the Lease and passed a motion to approve the Lease as proposed, in accordance with the requirements of section 1.03(b)(4) of the City Charter, which requires a 4/7th vote of approval by the Planning Board.

ANALYSIS

MIND’s Colony Theatre Management Agreement

Since 2016, Miami New Drama has successfully activated the Colony Theatre pursuant to a Management Agreement that provides an annual operating subsidy from the City (“Colony Management Agreement”). Pursuant to the terms of the Colony Management Agreement, which expires in September 2023, MIND has received a cumulative amount of $2 million since the inception of the Colony Management Agreement in 2016. 

 

ColonyTheatre

Annual Subsidy

Annual utility reimbursement

Management Agreement (2016)

$170,000

$80,000

Management Agreement

Amendment No. 2 (2018)

$420,000

$80,000

 

In addition, notwithstanding the City’s obligations pursuant to the Colony Management Agreement, MIND receives Cultural Arts Council (CAC) grant funding that is not tied to the Colony Management Agreement nor MIND’s operation at the Colony but is available to MIND because it is a nonprofit operating within Miami Beach.

 

CAC grant funding FY 18/19

$26,400

CAC grant funding FY 19/20

$24,204

CAC grant funding FY 20/21

$22,533

COVID-19 emergency relief grant

$69,458

 

Colony Annual Benchmarks

 

Performances

Attendance

 

Required

Provided

Required

Provided

FY 18-19

150

198 (132%)

35,000

39,497 (113%)

FY 19-20

150

146 (97%)

35,000

26,407 (75%)

 

Due to the pandemic, the Colony Theatre was closed from March 2020 to August 2021, which prevented the run of two major productions. MIND pivoted to virtual programming, reaching some 7,000 people online, and completed an acclaimed production of 7 Deadly Sins on Lincoln Road. Earlier this year, the production was awarded the Drama League Award for Outstanding Interactive or Socially Distanced Theater at the 2021 Drama League Awards.  According to MIND, they are the first theater company in Florida to be nominated for and to win this award.

 

Lease Terms stemming from Term Sheet dated June 9, 2021

The Administration has negotiated a proposed Lease based on MIND’s unsolicited proposal and as further refined by City Commission Resolutions No. 2021-31568 and 2021-31749. Attached as Exhibit B, the Lease incorporates the final guidance provided by the FERC and the City Commission when the item was last heard on June 23, 2021.

 

 

Key Lease Terms

 

Tenant

 

Miami New Drama, Inc., a 501(c)(3) entity

 

Address

 

340 23rdStreet, Collins Park Cultural Arts Facility

 

Premises

 

Ground floor of Collins Park Garage, approximately 16,000 sq. ft. interior space plus exterior terrace areas

 

Commencement Date

 

Lease Year One commences at Temporary Certificate of Occupancy (TCO) for the Buildout Improvements

 

Initial Term

 

Five (5) years

 

Renewal Terms

 

Total of fifteen (15) years possible:

· Two (2) renewal options of five (5) years each, subject to Tenant being in good standing

· Following completion of initial two (2) renewal terms, one (1) final renewal period of five (5) years, upon mutual agreement of the parties.

 

 

Rent

 

$1 per year. Tenant’s obligations limited to operating expenses solely applicable to the Facility and no common area maintenance expenses with respect to any other portion of the building.

 

 

 

 

 

Operating Expenses

 

Tenant responsible for operational and programming expenses, including utilities, maintenance, and applicable taxes (sales taxes, use/excise taxes, personal, and ad valorem applicable to the Premises and Tenant’s business) with no City funding obligation whatsoever with respect to such costs. City will have no payment obligations with respect to Operating Expenses.

 

MIND to make reasonable efforts to apply for the Florida Division of Cultural Affairs Cultural Facilities Grant. Tenant, as a local cultural organization, may apply for Cultural Arts Council grants, and may pursue other grant opportunities offered by the City.

 

 

 

Maintenance

 

Tenant responsible for day-to-day cleaning, maintenance, and repairs. City responsible for major building systems (HVAC, electric, fire, water, water intrusion, etc.) and the building structure, including walls and exterior. Tenant also responsible for reasonable maintenance and repairs of the exterior frontage of the Premises, i.e. the sidewalk and stairs walk-up, in a manner consistent with similarly situated commercial establishments

 

 

 

 

Cultural Center Buildout

 

City responsible for funding of construction services, contractor selection, construction for buildout of the Premises, and procurement and/or installation of all theatrical equipment (collectively, the “Buildout Improvements”).

 

Tenant responsible for selection and funding of Project design and Architect, for the City’s review and reasonable approval in its proprietary capacity, and subject to Facilities and Fleet Management’s citywide design guidelines. In no event shall the City be responsible to fund any portion of design services.

 

Buildout Improvements will be developed with a design-to-budget approach based upon a Budget equal to the Landlord Contribution.

 

City Financial Contribution

 

City’s total anticipated funding and construction budget shall not exceed $4,750,000 (the “Landlord Contribution”).While there is desire to support this Cultural Anchor, the City has not identified or budgeted a funding source for the buildout of the Facility.

 

The Lease limits the City’s exposure by stipulating that construction costs may not exceed $4.75 million. Provision of a 10% contingency of overall project costs has been included in the Lease to ensure thatin no event shall the use of the contingency cause for the Guaranteed Maximum Price (“GMP”) of $4.75 million to be exceeded, and in any such event, the City’s Contractor shall be solely responsible for all costs that exceed this price, without any reimbursement from the City.

 

The Lease includes a deadline of October 1, 2024 for the City to identify all funding for the total budgetary costs associated with the Project buildout. Although the Lease may be executed by the parties upon approval by the City Commission, the Lease, as proposed, does not become effective until such time as the City Commission makes the budget appropriation of $4.75 million on or before October 1, 2024. Therefore, in the event that funding is not identified, the City would not be responsible for any of its obligations under the Lease, unless future City Commission action provided otherwise.

 

Tenant Financial Contribution

 

Tenant shall be responsible for retaining and funding all design professionals, including the Architect, in the amount anticipated by Tenant to be $250,000, which Tenant shall raise through grants and donations (the “Tenant’s Contribution”). City may terminate the Agreement in the event Tenant fails to demonstrate it has secured funding for the design services and fails to contract with an Architect within 365 days following City Commission approval of the Lease. Tenant’s Contribution shall cover payment of all design services and soft costs (architectural and/or engineering fees) and, funds permitting, the acquisition of equipment for the theatrical performance space.

 

 

Uses

 

Tenant shall use the Facility as a theater for its not-for-profit cultural presentations, production of live theatrical performances and uses ancillary thereto, including its administrative and business functions and rehearsal, costume, and set design facilities for performances, and may activate the agreement as further provided herein and below with activations that are complementary and ancillary to the cultural component of the facility.

 

 

Café and Concession Subleases

 

· Café sublease shall be market rate and selection of Café operator subject to City Manager approval.

· Tenant may offer one (1) concession or for-profit third-party activation (i.e. Books and Books) at below market lease rates in a footprint not to exceed 250 sq. ft., subject to City Manager approval.

· All other concessions (or similar for-profit activations by third parties) offered at below market rates shall be subject to City Manager’s reasonable approval, limited to a term of 30 days (but up to 90 days upon City Manager approval), and ancillary and complementary to Facility’s cultural programming.

· To ensure continuous activation of the Facility, the City shall have the right to the assignment of all MIND’s concessions, subleases, and subtenants at the Facility, in the event of a default or termination of MIND.

 

 

 

 

Minimum

Operation

 

During initial two (2) years of the Term, Facility shall operate at least four (4) days per week and the Café at least six (6) days per week, during hours consistent with similar café operations within the vicinity. Following the initial two-year ramp up, minimum operation shall consist of six (6) days for the Facility and six (6) days for the café, and the Facility shall not be dark on the same day that the café is closed.

 

 

 

Key Individual Clause

 

As required in the Resolution waiving bidding, principal directors Michel Hausmann and Nicholas Richberg must remain actively involved in the company throughout Lease Term. If either one of the key individuals leaves the company or is no longer actively involved, MIND must locate a comparable replacement within 180 days, with reasonable approval of the City Manager, otherwise City may terminate. The parties have agreed to remove Moises Kaufman as a “Key Individual” as he is not actively involved with MIND as would be required for a Key Individual. The Administration believes that this will have little, if any, material impact on MIND’s creative leadership or the ultimate success of the Facility.

 

 

 

 

Representation on Board of Directors

 

City Manager or designee serves as one (1) voting member on board of directors, with one (1) additional non-voting member, designated at option of the City Manager. This is an increase above the one (1) non-voting city representative on the board currently.

 

 

 

Extension of

Colony Theater

Management Agreement

 

Term of Management Agreement for the Colony Theatre to be extended coterminous with the Collins Park Lease Term (including renewal periods), including cross-default provision for both the Management Agreement and Lease Agreement. The resolution approving the Lease authorizes the preparation and execution of an amendment to the existing Management Agreement in order to effectuate this purpose.

 

 

 

Termination for Convenience

 

City may terminate for convenience if:

  1. City does not obtain regulatory approvals required for the Buildout Improvements.
  2. Tenant does not secure funding and enter into contract with an Architect within 365 days following Lease approval by City Commission or 30 days after City Commission appropriates the Landlord Contribution.
  3. Tenant fails to replace a Key Individual.
  4. The Lease, despite being executed by the parties, will not become effective unless the City Commission, in its sole discretion, appropriates sufficient funds for the Buildout Improvements no later than October 1, 2024.If the funds are not appropriated by this date, the City may terminate the lease and City Commission action is needed to proceed otherwise.

MIND may terminate for convenience if:

 

  1. City Commission, in its sole discretion, does not appropriate sufficient funds for the Buildout Improvements no later than October 1, 2024.
  2. MIND does not approve the GMP Agreement, including the amount of the GMP.

 

 

Benchmark Performance Standards

 

During the first twelve (12) months following Commencement Date (such period constituting “Lease Year 1”, with each successive twelve (12) month period thereafter constituting another “Lease Year”), Tenant shall cause the Facility to host at least:

 

1) 125 cultural or community activations per year

2) 25,000 patrons per year (inclusive of virtual patrons for hybrid events)

3) 150 students per year

4) 75 seniors per year

5) 50 pro bono nonprofit/community rental hours per year

6) 500 discounted tickets provided per year

 

Benchmarks shall increase during the Initial Term as follows:

1) Lease Year 2: 150 events, 30,000 patrons, 175 students, 80 seniors, 50 pro bono nonprofit/community rental hours

2) Lease Year 3: 175 events 35,000 people, 200 students, 85 seniors, 55 pro bono nonprofit/community rental hours

3) Lease Year 4: 200 events 40,000 people, 225 students, 90 seniors, 55 pro bono nonprofit/community rental hours

4) Lease Year 5(and thereafter including Renewal Terms): 220 events 45,000 people, 250 students, 95 seniors, 60 pro bono nonprofit/community benefit rental hours

 

Prior to any renewal periods, performance benchmarks may be adjusted as mutually agreed to by the parties.

 

 

 

Community

Benefit Proffers

 

MIND has agreed to make the Facility available for use in the City’s Community Benefit Fund program, which provides subsidized rental waivers for nonprofit groups, and the City will also have the right to use the Facility (excluding the restaurant) up to four (4) times per Lease Year, subject to availability and reasonable notice, for public purposes (e.g., recreational programs, public meetings, trainings, City-sponsored special events, receptions), without payment of any rental or use fee, except reimbursement of Tenant’s direct out-of-pocket expenses reasonably incurred.

Additionally, as discussed more below, MIND will provide several unique Community Benefits for the benefit of the general public, delineated in Lease Exhibit D, including contributing a portion of each ticket sale to contribute to the Community Benefit Fund.

 

 Project Delivery Structure

MIND’s original proposal and Concept Plan featured an architectural design by Mexico-based TEN Arquitectos, whose founder, Enrique Norten, serves on MIND’s board of directors. According to MIND, TEN Arquitectos has agreed to considerably reduce the cost of services to MIND, which will enable the design of a world-class cultural facility by a prominent architect at an attractive price. Given that the City is responsible for construction costs, the property is City-owned and will be leased for $1 per year, the City would typically prefer to control all aspects of design and construction.

 

However, considering that MIND has agreed to fund all design-related services and costs in furtherance of a superior facility (that the City will own and control upon lease expiration), the Administration recommended acceptance of MIND’s proposed arrangement, as long as the City retains control of construction management for the Project and retains the ability to reasonably approve the design of the project. Although MIND initially requested control of construction, MIND consented to this compromise since the City agreed to seek to identify the funding for the balance of hard costs. The Lease provides that the City will utilize a Construction Manager at Risk with Guaranteed Maximum Price (“GMP”) delivery method for the construction of the Project.

 

In addition to MIND’s allowing the City and City’s construction manager’s reasonable design input, with approvals at the 30%, 60% and 90% design stages, the City will also require MIND to include certain provisions in its Architectural/Engineering (A/E) contract that would otherwise be included in all A/E contracts to which the City is a party, i.e., the City’s minimum design standards, third-party beneficiary rights, and ownership/use rights to drawings and specifications. The Lease requires that MIND raise all the funds necessary for architectural services, which MIND has indicated to be approximately $250,000. The parties have agreed that the City shall have the right to terminate the Lease if, after 12 months of Lease approval by the City Commission, MIND is unable to demonstrate that it has secured and deposited this funding and entered into contract with the architect. MIND has agreed to deposit the funds for the Tenant Contribution into an escrow or restricted account until needed for the Project.

 

City Financial Contribution

To address potential City exposure for unanticipated construction costs, the parties have mutually agreed to the City’s guaranteed maximum contribution amount of $4.75 million for the cost of construction. In order to protect the City against project over-runs, the Lease provides that the parties enter into a Guaranteed Maximum Price Agreement and the schedule of values attached thereto or contained therein (collectively, the “GMP Agreement”) shall: (i) contain a contingency line item equal to ten percent (10%) of the overall project costs of the Buildout Improvements and (ii) not exceed the amount of the Landlord Contribution. In no event shall the use of the contingency cause for the GMP to be exceeded, and the City’s Contractor shall be solely responsible for all costs that exceed the GMP, without any reimbursement from the City.

 

To avoid adverse cost overruns for which the City would be liable and to ensure that the City’s contribution to the Project does not exceed the amount of the agreed Landlord Contribution (i.e., $4,750,000), prior to the commencement of the Buildout Improvements, the City shall cause the City’s Contractor to buy-out, at a minimum, (i) each line item of the schedule of values which exceeds $200,000 (and to the extent not exceeding $200,000, each major trade within the schedule of values), and (ii) eighty percent (80%) of the overall Project costs (schedule of values), with the cost of such bought-out line items being consistent with the approved Project budget (which shall not exceed the amount of the Landlord Contribution).

 

In addition, if at any point during construction, the contingency amount drops below 20% of the initial contingency amount, the Furniture, Fixtures and Equipment (FFE) budget will be adjusted down to free up additional funds, to ensure that sufficient contingency funds remain available. The Administration believes these provisions are sufficient to safeguard the City from incurring unanticipated costs which are grossly in excess of that which had been agreed to in the Term Sheet. This is important considering that MIND will not cause to be created the architectural plans, which can be used to better estimate construction costs, until such time as the Lease is definitively negotiated and approved.

 

The foregoing considerations pertain to cost overrun contingencies which would only be implicated once the City commits the funding for the Landlord Contribution and following the commencement of construction. At the present time, the City has not yet identified any funding sources for the $4.75 million Landlord Contribution. It is for this reason that the Lease provides that the Project is contingent upon the City Commission identifying a budgetary source for and appropriating the entire $4.75 million construction costs. The Administration is supportive of this unique opportunity for a resident cultural partner to further activate the Collins Park cultural campus, however, budgetary limitations present a crucial obstacle which must be overcome in order to proceed with the Project. In the event that the City Commission, in its sole discretion, does not appropriate sufficient funds for the Buildout Improvements by October 1, 2024, the Lease will not become effective and either party may terminate the Lease for convenience.

 

April 30, 2021 FERC Meeting

Notwithstanding the significant issue related to yet-to-be identified funding for the Project, the FERC passed a motion to move the Term Sheet for review and approval by the City Commission. The FERC also provided certain direction at the April 30, 2021 meeting, which the Administration incorporated into the Term Sheet thereafter presented to the City Commission:

 

  • First, the Committee requested further development of Miami Beach-specific branding for the Facility. In response, MIND offered to develop site-specific branding for the Facility with a new logo that will be utilized in all literature associated with the Facility.
  • Second, the Committee requested incorporation of a deadline by which the City must identify and allocate sufficient Project funding. In response, the Administration recommended that the City Commission have until October 1, 2024 to identify and appropriate the full amount of the Landlord Contribution. If the total funding is not identified by this date, the Lease would not be effective.
  • Third, the Committee addressed continuous activation of the commercial restaurant space if Miami New Drama is nonoperational or unsuccessful. As standard practice, City agreements require the assignment of agreements with any vendors, subcontractors, sublessors, or subtenants should the lease be terminated. This will enable the City to keep the Facility active by assigning restaurant operations to another entity in the event Miami New Drama is unable to manage the Facility or Café successfully.

 

June 23, 2021 City Commission Meeting

On June 23, 2021, via Resolution No. 2021-31749, the City Commission unanimously voted to accept the FERC’s April 30, 2021 recommendation and approved the Term Sheet. The resolution directed preparation of a Lease and referred the agreement for review by the Planning Board, as required under section 1.03(b)(4) of the City Charter. The City Commission also provided additional direction which the Administration incorporated into the Lease, as follows:

 

  • First, the City Commission requested that MIND place the funds it raises for the Tenant Contribution in the amount of $250,000 into an escrow account or otherwise restricted account, with limitations placed on use of the funds for any purpose other than as specifically intended by the Lease. MIND committed to this request during the City Commission meeting and also committed to providing notice to the City once this step is accomplished.
  • Second, the City Commission requested that MIND further develop its commitments related to marketing and branding, including the extent to which MIND can highlight its partnership with Miami Beach. MIND has agreed that the Lease will specify that the words “Miami Beach” appear in or be incorporated as an element of the company’s logo, as may be refined and updated from time to time. 
  • Third, as indicated in section 17 of the Term Sheet, MIND and the Administration further developed additional community benefit proffers to benefit the public at the Collins Park facility (“Community Benefits”). These will include, but are not limited to, 500 annual free or discounted tickets for Miami Beach students at Miami Beach public schools; 250 annual free or discounted tickets available for Miami Beach senior citizens; ten percent (10%) discount for Miami Beach residents on tickets and educational programming and five percent (5%) discount on fee membership programs; participation in Cultural Crawl and other cultural community initiatives; commitment to collaborate with community organizations in providing senior-specific programming; and a commitment to offer winter and spring break camps commencing in Lease year 2. Notably, MIND will also contribute a portion of each ticket sale to contribute to the Community Benefit Fund. MIND will join Live Nation as the City’s only tenants who financially contribute to this important cultural arts program. The full list of MIND’s Community Benefits appear as Exhibit D to the Lease.

July 27, 2021 Planning Board Meeting

On July 27, 2021, the Planning Board reviewed the Term Sheet for the Lease and recommended by a 5/7th vote to approve the Lease as proposed. (Two of the seven Planning Board members were not present for the meeting and therefore did not partake in the vote.) The favorable review and approval of the Lease satisfies the requirement in Section 1.03(b)(4) of the City Charter that leases of ten years or longer must receive approval by a 4/7th vote of the Planning Board.

 

Waivers of Public Bidding Process and Independent Lease Appraisal

Section 82-39(a) of the City Code provides that for any sale or lease of City property, there must be an advertised public bidding process. Section 82-39(b) requires that for any lease of City property of more than ten years (including option periods), the City shall obtain an independent appraisal of the fair market or rental value of the property. Section 82-39 provides that both requirements may be waived by a 5/7th vote of the City Commission, upon a finding that such waiver would serve the public interest.

 

After reviewing MIND’s unsolicited proposal in December 2020, the FERC emphasized the facility’s potential role in the growth and development of the Collins Park Arts District. On January 27, 2021, the City Commission approved Resolution No. 2021-31568, finding the public interest best served by authorizing negotiations with MIND in lieu of issuing an RFP. At that City Commission meeting, the Miami-Dade County District 5 Commissioner and the Director of the Miami-Dade County Department of Cultural Affairs advocated on behalf of MIND and noted that the County’s cultural arts agency does not undertake a competitive procurement process when programming its facilities, especially when an established regional cultural asset like MIND commits to partner together. Subsequently, at three publicly noticed meetings of the FERC, the Committee reviewed the Term Sheet and provided direction as to project terms and public benefits, thereby ensuring the negotiated Lease brought value to the City. Public comment has been supportive of the Project at these meetings and the Collins Park Neighborhood Association has been an enthusiastic advocate for Miami New Drama’s Lease since the beginning of the process.

 

For these reasons demonstrating public interest, the Administration recommends the City Commission waive the requirements for competitive bidding and lease appraisal as permitted in City Code Section 82-39.  

 

As required for leases of City property longer than ten years per Section 82-38 of the City Code, the Planning Department’s written analysis of the Lease is contained in Exhibit C.

SUPPORTING SURVEY DATA

According to the 2019 Community Satisfaction Survey, 85.5% of polled residents agreed that cultural activities contribute to quality of life in Miami Beach. According to audience polling reported in MIND’s Concept Plan, Miami Beach fulltime residents comprise 87% of theatergoers at the Colony. The Lease will further and enhance the cultural activities in the Miami Beach and, as a result, resident quality of life will prosper.

FINANCIAL INFORMATION

The City's financial responsibility, discussed in the foregoing Analysis section above, is $4,750,000 (the “Landlord Contribution”). MIND has 12 months to demonstrate it has raised the costs associated with the design of the Project, anticipated to be $250,000 (the “Tenant Contribution”), whereas the City has approximately three (3) years to identify and appropriate the funding associated with the costs for the Buildout Improvements of the Project. At the present time, the City has not yet identified any funding sources for the $4.75 million Landlord Contribution.

Amount(s)/Account(s):

CONCLUSION

Subject to any direction as to the policy and business issues outlined in this Memorandum, the Administration recommends that the City Commission approve a Resolution waiving the requirements for competitive bidding and independent appraisal, approving the Collins Park Cultural Arts Facility Lease Agreement on first reading, scheduling a second reading and public hearing for October 27, 2021, and authorizing an amendment to the Colony Theatre Management Agreement with Miami New Drama.   

Applicable Area

South Beach
Is this a "Residents Right to Know" item, pursuant to City Code Section 2-14? Does this item utilize G.O. Bond Funds?
Yes No 

Strategic Connection

Prosperity - Market and promote Miami Beach as a world class arts, culture, and quality entertainment destination.
Legislative Tracking
Economic Development

ATTACHMENTS:
Description
Exhibit A - MIND Concept Plan
Attachment B - Draft Lease Agreement
Exhibit C - MIND Lease Planning Analysis
Resolution