A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AFFIRMING THE CITY MANAGER’S CONSENT TO A CHANGE OF OPERATOR OF THE MIAMI BEACH MARINA FROM RCI MARINE, INC. AND ROBERT CHRISTOPH (“CURRENT OPERATORS”) TO MBM MARINA MANAGER, LLC AND SMI CONCIERGE SERVICES, LTD. (“PROPOSED OPERATORS”), AS REQUIRED UNDER SECTION 2.27 OF THE LEASE AGREEMENT, DATED JUNE 24, 1983, BETWEEN THE CITY AND MIAMI BEACH MARINA ASSOCIATES, LTD. (“LESSEE”).

Adopt the Resolution.

BACKGROUND

The Miami Beach Marina (“Marina”) is located adjacent to Government Cut and offers dockage and other marina related services for the use and benefit of the public.  With 400 boat slips, the marina can accommodate vessels up to 250 feet in length.  Also available on site are general retail and office uses such as casual and formal dining facilities, marine hardware retailers, dive charters and boat sales.

On June 15, 1983, after reviewing the proposals submitted for the Marina, pursuant to Bid No. 54-83 for the lease of the Marina, the Mayor and City Commission passed Resolution No. 83-17385, approving and authorizing the execution of a lease agreement with Carner-Mason Associates, Ltd. for the construction and management of a marina and dry storage facility in the South Shore development area (generally lying south of 6^th Street).  The Marina Lease was subsequently signed on June 24, 1983.

On October 17, l989, pursuant to a judgment of foreclosure of the Marina leasehold interest, Tallahassee Building Corporation, a Delaware corporation, a wholly owned subsidiary of Heller Financial, Inc., acquired the interest of Carner-Mason in the Marina Lease.

Thereafter, the Marina Lease was amended four times, as follows:  1) First Amendment, which consisted of the parties’ agreement to a “Modified Lease”, dated October 23, l991; 2) Second Amendment, dated August 11, 1994; 3) Third Amendment, dated May 27, 1997, which also included the adoption of Resolution No. 97-22398, where the City consented to the assignment of the Lease from Tallahassee Building Corporation to the current lessee, the Miami Beach Marina Associates, Ltd., a Florida Limited Partnership (Lessee); and 4) Fourth Amendment (and most recent), dated April 15, l998.

Basic Lease Terms

Lessee: Miami Beach Marina Associates, Ltd, a Florida limited partnership

Operator: RCI Marine, Inc. and Robert Christoph

Property Location: 344 Alton Road, Miami Beach, Florida

Use: Lessee shall use the Marina Site solely as a boat port, boat rentals, charter boat, boat repair facilities, sale of fuel, showers, restrooms, sale of new and used boats, sale of bait and marine accessories, marina and recreation facility offering dockage, mooring and other marina related services for the use of and by the general public.

                                               Execution Date: June 24, 1983

Initial Term: Thirty (30) full years, commencing on January 1, 1992 and ending on January 1, 2022

Renewal Options: Three (3) Ten (10) year options, exercised at Lessee’s sole discretion.

Rent Amount: Percentage Rent:  Lessee shall pay Annual Percentage Rent equal to:

·         Minimum Guarantee of $320,000 annually

·         Two cents ($0.02) per gallon from the sale of gasoline and             diesel fuel

·         Ten percent (10%) of Gross Receipts

·         In the event the Marina charges fees for parking the City               would be entitled to receive 35% of the gross parking fee               revenues.

Parking: City is obligated to provide not less than 715 spaces, reserved for use by the Marina facilities.  For parking spaces in the condominium garages, City does not pay for parking spaces, but paid for initial capital cost, and also pays for the electric utility costs of the garage spaces, real estate taxes, special assessment or other similar charges, and any pass through fees or costs or insurance pursuant to the leases between the City and the Landlord/Condominium Associations.

Maintenance/Operation: The Marina maintains in good repair:  slips, buildings, structures, facilities, improvements (inside and out), including, w/o limitation, roof, foundation, wall, floors, sidewalks, baywalks, curbs, landscaping, parking lots/areas, parking garage entrance/exits (resurfacing/paint etc.), signage, water and sewer connections, windows, plumbing, utility fixtures, pipes, wires, conduits, elevators, escalators, machines and fixtures and appliances in good, clean healthy and safe condition; maintain parking areas well lighted; maintain lighting fixtures, security, water, telephone, maintenance of revenue and/or security control equipment and systems; employ patrol for adequate security; and insurance for the operation of the Marina.

Dockage Rules/Rates: The Marina establishes and enforces reasonable rules and regulations and establishes dockage rates and other fees, all of which are subject to the approval of the City Manager.

Following is a summary of the annual rent payments from 2008-2016.

The Miami Beach Marina Associates, Ltd (“Lessee”) met with the Administration to discuss a change of operator of the Marina and, as required under Section 2.27 of the First Amendment, subsequently submitted a formal request for approval letter dated October 9, 2017, attached hereto as Exhibit A (Request for Approval of Change of Operator).  As stated in the request letter, in reviewing the marina operations, and as part of the Christoph family’s estate planning, the Lessee determined it would be in the best interest of the Lessee, the Christoph family and the City to re-establish a single purpose entity  as the manager of the Miami Beach Marina.  As such, the Lessee has created a new entity, MBM Marina Manager, LLC, a Florida limited liability company, for that purpose.  Per the Lessee, as this new entity is a wholly owned subsidiary of RCI Marine, this change will have no effect on the first class nature of the property or quality of services being provided.  The principals of MBM Marina Manager are Robert Christoph, Sr. and Robert Christoph, Jr., who have been operating the marina for the last 23 years, so there will be continuity of operations.

In addition, as required under Section 2.27 of the First Amendment, the Lessee is also requesting the City approve SMI Concierge Services, Ltd., a Florida limited partnership, which is a wholly owned subsidiary of Suntex Marina Investors, LLC (“Suntex”), a Delaware limited liability company also as an operator of the Marina.  As contained in the request letter, Suntex currently owns and operates a total of 45 marinas nationally, 14 of which are in Florida, including Black Point Marina, one of the largest marinas in Miami Dade County, and Marina Jacks in Sarasota.  Both Black Point and Marina Jacks are municipally owned facilities that are leased to Suntex on a long term basis.  As part of the Request for Approval of Change of Operator letter (attached hereto as Exhibit A) the Lessee has submitted Suntex’s qualifications.  Additionally, Suntex has provided financial statements, attached hereto as Exhibit B (Financial Statements), including a Consolidated Balance Sheet as of June 30, 2017 and a Consolidated Income Statement for the six month period ending June 30, 2017.  Lessee has represented that due to various business relationships between RCI Marine and Suntex, and Suntex’s anticipated acquisition of an equity interest in the Lessee, the Marina will be co-managed by both companies.  

Pursuant to Section 2.27 of the Marina Lease, the City Manager has the authority to consent to a change in the operator of the Miami Beach Marina.

The Administration recommends that the Mayor and City Commission adopt the Resolution approving the change of operator of the Miami Beach Marina to MBM Marina Manager, LLC and SMI Concierge Services, Ltd., provided that the change of operators shall not be deemed to be a change in Lessee under the Lease and that the Miami Beach Marina Associates, Ltd. continues to be the Lessee under the Marina Lease.