NEW BUSINESS  17.

COMMITTEE MEMORANDUM

HISTORY:
On January 17, 2018, the City Commission adopted Resolution No. 2018-30145, authorizing the City Administration to conduct a community charrette to obtain public input regarding the future use or redevelopment of the Byron Carlyle Theater, and further authorizing the Administration to obtain market feedback with respect to potential redevelopment of the site. See Exhibit A (LTC 150-2018)

City staff conducted a community charrette on March 13, 2018, at the North Shore Youth Center, engaging residents to share their ideas on how the City should use and/or redevelop the Byron Carlyle site. Subsequently, City staff used the feedback generated from the charrette to guide the drafting of a Request for Letters of Interest (“RFLI”), issued on April 10, 2018. The RFLI was disseminated to 450 firms, with 59 firms downloading the document for viewing. Nevertheless, no responses to the RFLI were received. See Exhibit B (LTC 377-2018)

The purpose of the original RFLI, as articulated in the document, was to solicit any market ideas or options regarding the type of development that could be produced or developed on the Byron Carlyle site. The RFLI stipulated that the "[RFLI was] not a request for specific proposals and no offers to develop the site will be considered as a result of the [RFLI]". Further, the RFLI stipulated that once the City had an opportunity to consider the various uses that the site may support, a formal competitive solicitation may be released. The Administration believes that this may be the primary reason why no responses were received. Interested parties may have been apprehensive to share ideas at that time, knowing that the City was under no obligation to move forward and a subsequent bid would later be issued.

This item was referred to the Finance and Citywide Projects Committee by the City Commission on July 25, 2018, to consider reissuing a revised solicitation as an RFP and to solicit guidance from the Committee on the proposed redevelopment.

ANALYSIS:

PURPOSE

This Request for Proposals (RFP) is issued by for prospective Proposers to submit their qualifications, approach, conceptual design, and financial and other terms for the City’s consideration for a fair market rate ground lease (the “Lease”) of approximately 34,250 square foot (0.79 acres) of City-owned property, consisting of the Byron Carlyle Theater located at 500 71st Street (28,000 SF) and the adjacent surface parking lot at 6977 Carlyle Avenue (6,250 SF), as depicted in Appendix F (the “Site”). Pursuant to the Lease, it shall be the Developer’s responsibility to design, develop, construct, finance, operate, and maintain a mixed-use development with a cultural component (the “Project” or “Facility”).

SCOPE

The Byron Carlyle Theater (the “Theater”) complex is located at 500 71st Street, between Byron Avenue and Carlyle Avenue. The City purchased and partially renovated the Theater in early 2000s, to spur economic development and bolster culture and arts in North Beach. Redevelopment of this location can potentially play a significant role in the revitalization of the 71st Street corridor. The property is considered an important piece of the North Beach Town Center redevelopment strategy given its location and relatively large size on 71^st Street. Public an important piece of the North Beach Town Center redevelopment strategy given its location and relatively large size on 71st Street. Public ownership of the Site means that the City can ensure it continues to serve as a cultural anchor. Public input regarding redevelopment of the Theater site was solicited through the community charrette process (03-13-18) and a public procurement solicitation earlier this year (RFLI 2018-220-KB).

The City is seeking proposals involving redevelopment of the Theater property (28,000 SF) with the adjacent City-owned surface parking lot located at 6977 Carlyle Ave (6,250 SF). Through this solicitation, the City seeks to retain land ownership and execute a long-term land lease with a private developer for the development of a mixed-use building that incorporates a cultural use component. Given the increased viability and the potential for greater development when additional parcels are assembled, the City will also consider proposals aggregating other privately-owned abutting lots on the same block between Byron and Carlyle Avenues.

Public Participation

The City shall not provide, nor should Proposers rely on, any public funding or public financing for the Project.

REQUIREMENTS

a.  Scope. Work contemplated under this contract comprises development of the Site pursuant to a long-term lease agreement including design, permitting/approval, community outreach, construction administration, and construction of a multi-use development and related infrastructure, as well as the management and operation of the property.

b.  Responder/developer will design, finance, and build the project (including demolition of existing structure and construction of new improvements), and responder/developer will continue to manage the asset following initial development. The Developer will be responsible for demolishing any existing structures on the Site and the areas adjacent to the Site identified for removal or demolition, including the Byron Carlyle Theater.

c. Cultural Component. Propose a viable, multi-use development including a minimum 10,000 sq. ft. allocation for a community/civic use (e.g., theater, recreation, cultural arts space). The Project’s cultural component must be operated continuously as a public/civic amenity.

d. Zoning. Design standards will be dictated by the City’s Town Center Core mixed-use zoning code, including 3.5 FAR, increased height allowance, reduced parking requirements, and requirement for ground floor commercial use. Any proposed site plans must undergo the City’s land use board approval process including public hearing. Given the site’s Government Use zoning, any development standard may be waived by the City Commission.

e. Resiliency. Project shall be designed with the objective of meeting LEED Gold certification requirements, in accordance with Chapter 133 of the City Code. In addition, provide Proposer’s approach for meeting or exceeding the Resiliency Standards set forth in Appendix E, and specify how the Resiliency Standards are incorporated in the Proposer’s conceptual design.

f.    Financial Returns to the City. Responsive bids will propose a significant public benefits package including public amenities/uses and significant financial returns for the City based on the leasehold. The City expects to receive a fair market rate pursuant to the ground lease.

g. Costs. The Developer shall be solely responsible for all costs and expenses associated with the development, design, construction, equipping, and installation of all furniture, fixtures, equipment and other improvements relating to the Project, its subsequent operation or use (including all ad valorem and other costs of expenses attributed to retail, commercial, or nongovernment components), and all alterations, repairs or replacements thereof.

h. Lease Approval. The approval steps for the successful proposer (independent of site design approvals) include City Commission approval to negotiate following award to the winning proposer, Planning Board approval, and then 6/7 approval of the Lease by City Commission.

i.  Design Approval. Once the negotiated agreement for development and lease of the property is approved by the City Commission, the proposed Project and site design must be properly permitted, including: Design Review Board, Planning Board, and/or Board of

Adjustment approvals, pursuant to Chapter 118 of the City of Miami Beach Code. In addition to required City permits from Building, Public Works, and other City departments, other local governmental approvals may be anticipated, as may be applicable to the property from time to time pursuant to the terms of the Lease.

j.  Consistency with Master Plan. Certain public objectives must be realized: community goals for a North Beach vision in accordance with the North Beach Master Plan adopted 2016, first-rate design criteria, limited expenditure of public resources or financing, creation of a public amenity, and a preference for local employment at the project site during and after development. To the fullest extent possible, the design of the Project must complement its surroundings and minimize its impact on the neighborhood, as reasonably determined by City.

k.    Development and Ground Lease Agreement.

Following the selection of the Developer, the City and Developer must execute a binding Lease that will include the minimum Project requirements and address the following topics/subjects:

a.    Term of the Agreement. Anticipated as 50-year initial lease term, with two (2) 20-year renewals, potential total of 90 years.

b.    Lease payment. Anticipated as annual base rent and percentage share of gross annual revenues, at fair market value, adjusted by CPI increases.

c.    Developer’s evidence to City of the required private debt and equity financing.

d.    Mechanisms for funding Developer’s equity and private debt.

e.    Coordination of scheduling of construction of the Project.

f.     The outside date by which all conditions for possession of the Site must take place; outside date for Developer’s construction loan closing; target dates for construction, including outside date for commencement of construction and completion of construction, and opening date for the Facility.

g.    Identification of the facility branding and/or initial facility operator.

h.    Covenant to continuously operate a cultural/civic use component and limitations on the right of the Developer to change the brand/operator without prior City approval, except to other approved brand/operators.

i.      Design development and planning for the Project, including:

(1)  Developer’s responsibility for the planning, design, development and construction of the Facility, including the selection, engagement and payment of architects, consultants, contractors, subcontractors and others engaged in connection with planning, development and construction of the Facility.

(2)  The City’s role, in its proprietary capacity, in reviewing and providing input to the conceptual plans, design development plans, and final plans and specifications. The Lease will require prior City approval of any material change to the City approved plans, which will not be unreasonably withheld. Developer shall be solely responsible for obtaining all required final, non-appealable approvals in accordance with the City’s Land Development Regulations.

(3)  Adherence to the minimum parking requirement and maximum height restriction.

(4)  Facility set-backs and landscape design consistent with the surrounding area, and consistency with the North Beach Master Plan.

(5)  Developer’s obligation with regard to construction, operation, and maintenance of the Project and Facility.

j.      Execution of Ancillary Agreements

(1)  Execution of relevant easements and licenses.

k.    Other Terms, including but not limited to the following:

(1)  Limitations on assignment by Developer (other than as collateral for private debt financing);

(2)  Representations, warranties and covenants;

(3)  Defaults and remedies;

(4)  Insurance; and

(5)  Indemnification and release.

l.      The City’s interest in the Site, if awarded pursuant to this RFP, will not at any time be subject or subordinate to (a) any mortgage or any other liens or encumbrances hereafter affecting Developer's interest in the Project. City shall at all times have a first priority right to payment of rent due to City under the Lease. The Lease shall contain commercially reasonable terms intended to facilitate traditional financing.

m.   Developer must accept the Site in its “AS IS” condition, with all faults and patent or latent defects, and with no representation or warranties by City of any kind whatsoever with respect to Site or the condition, feasibility, value or financial prospects of the Project.

n.    Rights granted under the Lease shall be non-exclusive and City reserves the right to grant similar privileges and similar leases to other lessees or developers on other City owned or leased property, and to take any and all actions that City is permitted to take under federal, state, and local law.

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MINIMUM QUALIFICATIONS

·         Proposer must have developed or provided private financing (consisting of more than 50% private financing, such as private commercial loans and equity) for at least one $20 million mixed-use project within the last 20 years. 

·         Proposer must identify a Design Team, with a primary design/lead architect, who must have designed at least 3 completed mixed-use projects within the last 15 years. 

SUBMITTAL REQUIREMENTS

· Scope. Work contemplated under this contract comprises development of the site pursuant to a long-term lease including design, permitting/approval, community outreach, construction administration, and construction of a multi-use development and related infrastructure, as well as the management and operation of the property.

· Cultural Component.  Propose a viable, multi-use development including minimum 10,000 SF allocation for a community/civic use (e.g., theater, recreation, cultural arts space). The Project’s cultural component must be operated continuously as a public/civic amenity.

· Zoning. Design standards dictated by the City’s Town Center Core mixed-use zoning code, including 3.5 FAR, increased height allowance, reduced parking requirements, and requirement for ground floor commercial use. Any proposed site plan must undergo land use board approval process and public hearing. Given the site’s Government Use zoning, any development standard may be waived by the City Commission.

· Resiliency. Project shall be designed with the objective of meeting LEED Gold certification requirements, in accordance with Chapter 133 of the City Code.  In addition, provide approach for meeting/exceeding the City’s Resiliency Standards, and specify how the Resiliency Standards are incorporated in the conceptual design.

· Financial Returns. Responsive bids will propose a substantial public benefits package including public amenities/uses and significant financial returns for the City based on the leasehold. The City expects to receive a fair market rate pursuant to the ground lease.

· Consistency with Master Plan. Certain public objectives must be realized: community goals for a North Beach vision in accordance with the North Beach Master Plan adopted 2016, first-rate design criteria, limited expenditure of public resources or financing, creation of a public amenity, and a preference for local employment at the project site during and after development.

 CRITERIA FOR EVALUATION

COMMITTE DISCUSSION ITEMS

North Beach Town Center Overlay Rezoning

The RFP does not specify certain design parameters that are presently unknown because the site lies within the North Beach Town Center overlay. The “Town Center – Central Core” rezoning process currently underway will affect the property’s permitted development potential and will likely impact developer interest. Prior to adoption, the City Commission will weigh certain elements of the rezoning directly impacting the building envelope permitted at the site. Among these are increased maximum building height to better accommodate the new 3.5 FAR adopted last year, height increases corresponding to relative lot size, and modified parking requirements. First Reading is scheduled for September 12th, 2018 and Second Reading will occur no earlier than November 2018. Given the impact the regulations could have on the design, size, and subsequent income-producing capacity of the project, the timing for the issuance of the RFP prior to or after the adoption of the Town Center overlay should be considered.

Parking Lot P80 located at the Northeast Corner of Byron and 71^st Street

The City has been in discussions with a developer regarding this parcel. At the July 27, 2018 Finance and Citywide Projects Commission meeting the City Manager recommended not proceeding with the project as then proposed. The Committee directed the Administration to solicit a "best and final proposal" from the developer. This proposal is still pending from the developer. If the City does not move forward with this developer, the Committee may consider including this parcel as part of the Byron Carlyle RFP.

Cultural Component

The 10,000 sf cultural component of the proposed RFP, consistent with the size of the current O Cinema space, was based on the community desire to maintain a theatre/cultural space. However, the financial impact may impact the financial feasibility of the project. Based on $400 per sf, inclusive of soft cost, the financial impact to the project is estimated at $4,000,000 and 10% of the project cost.

CONCLUSION:

The Administration seeks direction from the Committee regarding scheduling the issuance of the RFP, with specific direction regarding the previously identified discussion items.