Ordinance 2024-611 - Laserfiche WebLink

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CITY OF SUNNY ISLES BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2023 NOTE 10 - COMMITMENTS AND CONTINGENCIES (CONTINUED) GRANTS Grant monies received and disbursed by the City are for specific purposes and may be subject to audit by the grantor agencies. Such audits may result in requests for reimbursements due to disallowed expenditures or other action by grantor agencies. The City does not believe that such disallowances or other actions taken by the grantor agencies, if any, would have a material effect on the financial position of the City. NOTE 11 - JOINT VENTURE On or about November 25, 2008, the City entered into a public/private partnership agreement with Dr. Robert Cornfeld, the owner of the Newport Hotel, to share design and construction costs to rebuild the entire Historic Newport Pier (the "Pier"), which was severely damaged by Hurricane Wilma in 2005. In accordance with the agreement, the City accepted ownership of the Pier by entering into the submerged land lease with the State of Florida to facilitate the construction of the Pier. The partnership agreement further provided that Dr. Cornfeld was required to contribute $2 million for the design and construction costs of the Pier. Similarly, the City was required to contribute $2 million for the design and construction costs of the Pier. Further, the agreement provides that the City would be responsible for any cost overruns that exceed the total contribution of $4 million from both parties. The City and Dr. Cornfeld also agreed to split revenues on a 50/50 basis from leasing the restaurant to be constructed on the Pier. The 50/50 split would occur after the City was able to deduct operational expenses from the revenues. On or about July 26, 2013, the City entered into a management agreement with American Federated Title Corp. (the "Corp"), a corporate entity affiliated with Dr. Cornfeld, to manage the Pier as it relates to admission of residents and visitors to the Pier. The management agreement provided the City with the right to determine Pier admission fees. The agreement was for five (5) years, with the option to renew the agreement for three (3) additional five (5) year terms, provided the Corp is not in default at the time of the renewal of the terms. The City has the right to terminate the management agreement at will. During fiscal year ended September 30, 2022, the management agreement with the Corp, described above, was amended. The City and the Corp agreed that any funds received from admission to the Pier would not be used to cover expenses, but would simply be split 50/50 between the parties. Each entity would be responsible for their own operational expenses. The City approved an amendment to the management agreement on November 16, 2023 to revise the Pier admission fees only, all other terms and conditions were kept the same.