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HomeMy WebLinkAbout2011-1004 Special City Commission Meeting SUMMARY MINUTES Special City Commission Meeting Tuesday, October 4,2011,6:00 p.m. City of Sunny Isles Beach, Florida ATTENTION ALL LOBBYISTS: CITY LAW REQUIRES YOUR REGISTRATION PRIOR TO ENGAGING IN LOBBYING ACTIVITIES BEFORE CITY STAFF, BOARDS, COMMITTEES OR THE CITY COMMISSION. PLEASE CONTACT THE CITY CLERK FOR FORMS AND ADDITIONAL INFORMATION. AGENDA 1. CALL TO ORDER / ROLL CALL OF MEMBERS The meeting was called to order by Mayor Edelcup at 6:00 p.m. with the following officials present: Mayor Norman S. Edelcup Vice Mayor Lewis J. Thaler Commissioner Isaac Aelion Commissioner Jeanette Gatto Commissioner George "Bud" Scholl City Manager Alan J. Cohen City Attorney Hans Ottinot City Clerk Jane A. Hines, CMC Assistant City Attorney Fernando Amuchastegui 2. PLEDGE OF ALLEGIANCE Mayor Edelcup gave opening remarks. 3. RESOLUTIONS 3A. A Resolution of the City Commission ofthe City of Sunny Isles Beach, Florida, Approving a Ground Lease Between the City of Sunny Isles Beach and Ocean Corporate Center, LLC., in Substantially the Same Form as the Attached Exhibit "A", Attached Hereto, to Develop a First Class Executive and Professional Condominium Office Building Containing 146,250 Useable Square Feet Together with a Parking Garage to Service the Office Building; Authorizing the Mayor to Execute Said Agreement, Providing that Said Agreement is Reviewed for Legal Sufficiency by the City Attorney; Authorizing the City Manager and City Attorney to Do All Things Necessary to Effectuate this Resolution; Providing for an Effective Date. (18080 Collins Avenue) Action: [City Clerk's Note: A revised Agreement was distributed prior to the meeting, and a Letter of Intent from Dezer Development, LLC was distributed to the Commission prior to the meeting.) City Clerk Hines read the title, and City Manager Alan Cohen reported that this is a ground lease with option to buy, and is consistent with the Letter of Intent that the Commission approved at its last meeting. Additional details were worked out, and the template for this was the Milton agreement and so we were somewhat consistent in how we were treating this ground lease with the other ground lease. The same terms and conditions apply as before. Mayor Ede1cup noted that this agreement was revised. City Attorney Ottinot noted that they had met with The Weintraub Company/Ocean Corporate Center, LLC, and were able to make some revisions to the ground lease. Those revisions are outlined in his cover memo to the Commission. Some of the important revisions were: the purchase/lease price is $7.5 Million over a 25-year term. The tenant, Ocean Corporate Center, Summary Minutes: Special City Commission Meeting October 4, 2011 Sunny Isles Beach, Florida LLC., is required, prior to site plan approval, to deposit with the City $200,000, and within 30 days after site plan approval, they are required to deposit with the City $800,000 which totals $1 Million. Subsequently they are required to deposit $500,000 with the City during the time that they pull a building permit, and an additional $1.5 Million when they receive a CO with respect to the project. If this City Commission approves this ground lease tonight, they are required to submit a site plan for approval within 120 days. Subsequent to site plan approval, after the 30-day period has run they are required to obtain a building permit within six-months from the time that the site plan was approved. After the building permit is issued, consistent with the City Code, they are required to complete construction within 24 months of the building permit. Circumstances may arise and we may provide extensions if needed based on good grounds, but overall, after final site plan approval Ocean Corporate Center, LLC, will have $1 Million at risk ifthey fail to proceed with the project. We met at 5:00 p.m. today, and there will be some legal language added, especially the concept that the developer wants a cond%ffice project, and we need to include certain language to facilitate that. Public Speakers: Warren Stamm; Gil Dezer; Jay Steinman; Abraham Weintraub; Gerry Goodman Mayor Edelcup asked it to be summarized again, the exact chronologically how the money gets paid to the City and when that is in a calendar format. City Manager Cohen said it is on pages 2 and 3, they have given us $100,000, pending approval tonight they will provide another $100,000, and at site plan approval they will provide $800,000. Mayor Edelcup asked if that is three to four months from tonight, and City Manager Cohen said it is actually site plan approval and so they are filing within 90 to 120 days, and then approval would be based upon the Commission's timeframe. Upon receipt of a building permit, an additional $500,000 and then upon receipt of a CO or a TCO would be the additional $1.5 Million. City Attorney Ottinot said the $4.5 Million would be over a 25-year term, with a 5.5% interest rate. Commissioner Scholl said he was looking at the red line in the lease and on pages 16 and 17 where you added some environmental language and he is trying to understand why we even have it. It was a car rental place and so you have the possibility of some environmental issues, why wouldn't the tenant just do their due diligence and make a decision or not as far as their ability to proceed, or if we are going to take responsibility for it, what happens ifthere is a 2% cap, and so if there is an issue are we saying that we are liable for 2%. City Attorney Ottinot said that the tenant had raised some concerns about possible environmental issues because there is an existing above ground gas tank on this site. From his communication with the City Manager and also the tenants, it was our understanding that the City would take responsibility to remediate any environmental problems with the site. Based on that conversation, he came up with language that addressed the concern but also to limit our exposure with respect to environmental issues if there is an issue with respect to the above ground tank, as a prudent approach you put some monetary cap. Also that issue is a time limit when the tenant accepts possession and takes over the site, if an environmental issue arises that is the tenant's responsibility but prior to that, it is his understanding that the City will accept some responsibility to clean up the site. Commissioner Scholl said in a real world, someone does an environmental study and there is an issue, the tenant doesn't want to deal with the issue, we have to clean it up anyway so how 2 Summary Minutes: Special City Commission Meeting October 4, 2011 Sunny Isles Beach, Florida does the cap have any bearing on it because do you think the tenant would ever accept responsibility for the property without knowing what the environment is. He asked ifthe prior property owner is in line for any liability on this, and City Attorney Ottinot said no, we purchased this property through eminent domain, and so that wipes out any prior chain oftitle or liability issues. He said they had some discussion with the tenant today and to a certain degree he believed our cap was too low and so his interest is to protect the issue but they are still negotiating. Mayor Edelcup said if it exceeds $150,000 this contract is perhaps back to square one subject to termination or renegotiation depending on the cost of the environmental, and so that is a caveat that we all have to recognize. Commissioner Aelion said he has concerns on this lease because it is a long term "marriage" that the City, if approved, is going to go into with this entity, and it allows assignment of subletting. To that end, there was a 25% exposure on the present tenants that goes into effect. He has asked for 51 % voting interest of a name of said entity however he has not seen any solid financial history of this company that have had such structures already within the City. This is going to be the first within the City, we don't have another office building that has been there that we can have a track record from. We also have the issue of us holding a note for 25 years of the major portion of the sale which is $4.5 Million, and this entity can go into a marriage with another entity and the City will have to deal with it if something happens, because this is not going to be strictly a lease per owner of landlord, this is going to be a unit that the present landlord is going to sell. With that intent he is buying to be able to ensure that he is going to be able to in fact complete that portion of 70% or higher so that he can have a comfort level of rentable profit, and at this point he has reservations with it. Vice Mayor Thaler said that Commissioner Aelion is not the only one, he did have two phone calls and he was stopped on the street for that exact point. The people of Sunny Isles Beach were not thrilled with the fact that we were financing something for 25 years, and Commissioner Aelion said it is closer to 30 years. Vice Mayor Thaler said that the people said it was wrong for the City to finance something for that length of time. City Manager Cohen said your concern about the assignment on pages 27 - 28, what we are requiring here for the assignment is a much higher threshold than the Milton deal. In the Milton deal they could transfer with only the retention of25% of voting interest in the deal. City Attorney Ottinot said that he had met with him prior and he suggested 51 %. City Manager Cohen said this is a considerably higher threshold, double in essence. Regarding the representation that we are financing this deal, we specifically changed the deal structure so that we were not in the position of being a banker, we are not holding a note on this, we are renting the property. We are simply allowing them to improve the property and then to pay us rent for that property which is exactly what we have offered at the Gateway site as well. Commissioner Aelion said his point is that we have a long term lease with Tony Roma, that is a rock solid institution, and at the end of the day the factor remains regardless if you call it a lease or something else, the City will still be owed that money and you don't know which entity is going to be not only liable but also will survive, and so the risk factor is there. If anything could be done to not only lower the risk factor but for the City to have much less exposure for this length of time he thinks in all interest for the City is to have another 3 Summary Minutes: Special City Commission Meeting October 4, 2011 Sunny Isles Beach, Florida structure altogether. City Manager Cohen said that he is correct that they have not done anything else in the City but they do have a very similar project in A ventura which went through the process, they did very well, it is 100% sold out, it is still doing very well, and so there is a track record for this entity. Commissioner Scholl said it is a lot different deal then if we are holding the mortgage, we own the land, they are going to put improvements on it, and if they default, they default and we have improved land. It is a real estate deal and it is reasonably sophisticated, and he understands that, and they are taking a certain amount of risk by giving us the front-up money but still end up leasing the land. He doesn't feel that we have the exposure from an economic perspective. Mayor Ede1cup said there is always a risk, you are waiting for your final payoff. Commissioner Scholl said he thinks the risk is a timing risk more than an economic risk, given the structure of the deal, we will always get paid eventually. Commissioner Aelion does not agree, we will get paid if and when the financial institution that they seek financing from is going to be the first creditors. City Attorney Ottinot said they advised us that they are self- financing by selling the condos, and in meeting with the developer, they have advised us that they are not going to use the traditional lender in this project. They indicated that they will on behalf of investors that will basically finance the project and that the traditional way of financing would not apply, however, we would also have some oversight on documents and requirements that they have. Mayor Ede1cup said he thinks the Commissioner's point is the next in line buyer because the developer is selling the property as a condo and when the condo unit gets sold it will have financing but that financing is really subordinate to our rent but there will be a lender involved two steps down. Commissioner Scholl said the important thing is that our collateral has nothing to do with their rent, and he asked City Attorney Ottinot to explain what would happen if they stopped paying rent. City Attorney Ottinot said if they stop paying rent we can foreclose on the property and take over, obviously if the project is constructed and there is a condo association, we would have to deal with the existing tenant on that site but we would basically take, we own the land on this lease. Commissioner Aelion said then that all monies owed until that point would be forfeited, and City Attorney Ottinot said yes, we have a right to default, there is a default provision in the lease to protect the City. Mayor Edelcup noted that at the beginning of the meeting the Commission was handed a Letter ofIntent from Dezer Development, LLC, and asked how we would handle it, and City Attorney Ottinot said it is up to the Commission if they want to discuss it. Mayor Edelcup asked the City Attorney to remind the Commission of our legal status, and City Attorney Ottinot said that Warren Stamm is here to make a presentation, and as a reminder when we approved the last updated Letter of Intent we had agreed not to negotiate with another party with respect to the Alamo property at 18080 Collins A venue, but nevertheless Mr. Stamm can speak to the Commission. Warren Stamm, on behalf of Dezer Development, LLC, and the Dezer Companies, said he provided the Commission with a Letter ofIntent setting forth the terms and conditions upon which Dezer Development is prepared to purchase the City site located at 18080 Collins A venue, under what are very favorable financial and development conditions that benefit the 4 Summary Minutes: Special City Commission Meeting October 4, 20 II Sunny Isles Beach, Florida City of Sunny Isles Beach and its residents. He said when he last appeared before the Commission he asked that the Commission defer consideration ofthe sale of this property to allow the Commission to compare and review the proposals. He feels that the City acted in haste in approving the Ocean Corporate Center submission and proposal, and he hopes that the Commission will take the opportunity to defer their approval of the proposal to consider what again he feels is a much better proposal both short and long term for the City. Warren Stamm said that the Dezer Companies and Dezer Development are prepared to pay the City $7 Million in cash at closing, to occur within 30 days of site plan approval for this property. They are prepared to post in escrow with the City within 48 hours of execution of this Letter ofIntent, the sum of $1 Million. Upon site plan approval the $1 Million becomes non-refundable and the City will be paid an additional $6 Million at closing thereafter. Their proposal tracks similar to that proposal and plan that was proposed by the Weintraub Companies, one of the major difference is we don't have the baggage. From a financial and practical standpoint their proposal is much more favorable to the City than having the City be subjected to a long term ground lease with payments that mayor may not be made over a 25- year period with the added risk that if and when construction financing, whether it is self funded or not, is obtained the City may have to subordinate its interest behind a significant construction loan. The fact of the matter is as you have heard and you have discussed, the way this works is basically taking from the Peter pocket and paying the Paul pocket, they are self financing this through a perpetuation of sales of the condominium units. Dezer Development is prepared to purchase, close, and develop in cash with no financial risks to the City. He noted that Commissioner Aelion pointed out his concerns to wit, this is a marriage that you are getting in bed with, a company that you are going to be here with a long term with no certainties, with a ground lease, and what they are proposing is a sale, clean and simple. Thirty (30) days after site plan approval you get your money, we get the property, we build, we finance, you have the ability to take that $7 Million and do with it as you will, no risk, all reward. Gil Dezer, President of Dezer Development, said about four years ago when they wanted to start and get going and there was really at that time no place to go, there was no construction financing, there was no way of doing it, and so they could not move forward. At the same time they had all the plans and everything else that they did develop and so that will allow them to come in for site plan approval quicker than most because they have a real set of plans and renderings, and everything else of how they want to go through with this thing. One of the things that the Commission needs to think about, and he was listening to Commissioner Aelion and he thinks he is 100% right, is that regardless of how anybody will be financing this, the City will be in the subordinate position. Even if they ultimately sell these units to condo owners who might then go ahead and get a mortgage, if you want to go ahead and default because the association didn't pay their fees which is happening on every single condominium here on the ocean, especially during the down crisis, imagine the mess that is going to occur between the City trying to default on their lease, and then go ahead and have to deal with mortgage holders, bankers, and everybody else who have a piece of the pie. He knows for a fact that you always have to subordinate the land to somebody who is putting in the money for construction, even if it is a private investor or yourself. 5 Summary Minutes: Special City Commission Meeting October 4,2011 Sunny Isles Beach, Florida Gil Dezer said what they are proposing is clean, simple, easy, it takes away all the problems that you could potentially have, it gives you a net present value, well in excess of what you would get over this 25-year term. Instead of us leasing or using the equity of the project to go ahead and finance it, they are prepared to buy it, specifically because he lives across the street, his office is in the hotel right now and we need office space ourselves. We feel there is a need for office space in Sunny Isles Beach, they have had similar discussions with different health care organizations that want to come in and do surgery centers and things of that nature, and to also enhance and give ourselves a proper medical facility here within Sunny Isles Beach. The idea of a car museum they had four years ago is out but they will still do a restaurant! retail situation there similar to Tony Roma's hopefully on a higher scale. They still have a real workable set of plans that can be built, and if you add up the payments of how it works, our $7 Million is half a million shy of their overall number but at the same time it is today, and it is in your hands, and it is guaranteed. The potential problems that may come up once the guy builds the building, sells the unit, has a mortgage, and then the association for some reason, because it would have to be the association making the land payment and for whatever reason, we have seen a foreclosure mess going on right now, and if that would strike again, it would be the City losing that income, and going through evictions, etc. The idea is that they will go ahead with the site plan approval mirroring the same exact timeframe that they had in their Letter ofIntent, that is where they came up with this, they have decided to seal the deal that the Commission already likes and make it better, and the only way to make it better is taking out all of the uncertainty. Jay Steinman, representing the Weintraub Companies, said he wanted to point out that the Letter of Intent does prohibit the City from dealing with the other party during negotiation rounds. He said Commissioner Scholl was right, they came in and restructured this deal in a fashion that would allow the City to own the improvements. They have no right to own those improvements until such time as they require the fee from the City. Basically the City has very low risk, they have deposit money that is nonrefundable, the developer goes in and builds the project, the developer defaults, the City owns the project. That is the way many projects have been financed all over the County, all over the State, some major projects through ground leases, you should not be afraid of the risk. There is no subordination, there is no financing, you will not have to deal with another lender that is financing the construction. They have committed to financing this project from their own investor equity. Avi Weintraub said that the City signed a 30-year lease in 2008 with the Dezers, in 2009 they came back and asked for an extension and nothing ever happened. That property was to build gross 248,000 square feet but he is building 140,000 square feet, they were providing 189 parking spaces and that lease requires the City to go out and buy land somewhere nearby to add spaces ifthey need it. By his calculations in his size building you need 400 spaces and so you are going to have to buy land somewhere else and so that $7 Million is going to cost the City a lot more later on. His project is $7.5 Million but they are paying the City including interest $11.2 Million over the term. Another point is that Dezer could not get construction financing, and Weintruab will be putting up the money her~, the City will have $3 Million in their pocket. They are doing it the same way they did another building, they will get investors, that is the way real estate is done, you get investors, you start a building, and you build it. The risk is minimal, what they are going to do is to put improvements on this 6 Summary Minutes: Special City Commission Meeting October 4, 2011 Sunny Isles Beach, Florida property. If the City had to take it back, and let's be real, there is not one condo in Miami- Dade County even in the last two or three years where things were terrible and people were not paying their maintenance, not one has defaulted yet. This property is going to be new buyers, who know what they are getting into, a lot of these people are condo owners in the commercial sense but business people will be using this space for their office. This is a beautiful project, and he showed visuals comparing the Dezer project with their project. He said that Dezer's project is massive and will block the entire area, whereas their project is setting the building back by 75 feet instead of the required 25 feet, create a plaza and have some harmony with the City, the idea is to create a City Center. They have set it up in such a way that it is going to be two separate buildings so that we can have some medical facilities. Another question you had was whether they had the money or not, the City Attorney has asked them to give the City before they start construction, proof of funds all the way through. In terms oflong term leases, the City is going into one with Milton and you have one next door (Tony Roma's). It just so happens that Dezer was going to do it and insisted on doing it until they fell out of lease and now all of a sudden they want to pay cash. Commissioner Aelion asked what was the purpose of the 25-year term versus the purchase, and Mr. Weintraub said originally they had talked about doing a purchase with the City holding the paper but in selling condos you can't have a mortgage in front of it and so we had to go with a lease which is why they came back with a second Letter ofIntent. Commissioner Aelion said in other words you are basing your term on the sale of the unit or what is the risk exposure that you are getting yourself out and are you putting the City at risk, and Mr. Weintraub said that the City has absolutely no risk by the time they get started here the City will have $1.5 Million in their pocket. Commissioner Aelion said he was talking about the $4.5 Million, and Mr. Weintraub said at that point you will have $3 Million in your pocket, you are going to have a building built that is worth $40 Million, what is the risk, what are the odds that you are talking $27,000 a month which is about $3 a square foot per year in the units you are talking about 30-cents a square foot. It is cheaper than what people pay in insurance in some buildings, and cheaper in maintenance, not the actual maintenance payment because the total maintenance for this building is less than something across the street in one of the condos, the condos pay upwards of $6-$8. Commissioner Aelion said he understands all ofthat but what he is saying as far as the City is concerned, what would prevent you from making a similar offer so that it would eliminate the risk to the City and you will save yourself $4 Million of interest for the life of the loan. Mr. Weintraub said because when we sat down we came up together with a number, we agreed on a payout the way we did it, and we are not here to renegotiate at this point, we are here because we have gotten to the terms, we negotiated the whole thing, we have a lease pretty much, and all we have are some minor nuances on a lease document. Everybody was in the mind frame when we agreed to this Letter of Intent (LOI) that it was fine, and now all of a sudden somebody comes in at the 11th hour, somebody that promised you things and never delivered throwing a monkey wrench in here, and he is not going back and forth, that is not the way it works. Vice Mayor Thaler said that Mr. Weintraub made a statement that the City would have to go out and buy some other property, in this contract from Dezer, is it strictly the Alamo property 7 Summary Minutes: Special City Commission Meeting October 4,2011 Sunny Isles Beach, Florida that we are dealing with, with no strings attached, and City Attorney Ottinot said yes, with no strings attached. Commissioner Scholl said we have to be careful, we are under a no shop clause and we have the lawyer setting in the front row, and Mayor Edelcup said what we should be doing is determining if we want to negotiate or you don't want to negotiate because we are walking down a path. City Manager Cohen said the question at this point is, is this lease along the same terms and conditions that the LOI is, and he thinks it is, it is a question as to approve it or not. Commissioner Aelion said we are bound to what the City Attorney said by not being able to negotiate with any other entity while we are negotiating on this, and City Attorney Ottinot said based on the approval of the lease. Mayor Edelcup said you have one option right now, either approve this or decide that you want to rescind the negotiation so that you can open the door to talk to both people. If you don't want to talk to both people then we can proceed but if you are going to start talking to both people before we start talking any further, we need a vote right now as to do we or don't we want to move forward with the current lease. If the vote on that is no, then you can be open to negotiations. Commissioner Scholl said that Gil Dezer is a great developer, he is the backbone to our City, but the fact of the matter is we acted in good faith, this was obviously good enough at the last meeting, the material terms haven't changed, all we are doing now is just approving the lease, and the lease is no different than what we approved at the last Commission meeting. The business terms of the deal have not changed, that is what we have to concern ourselves as a Commission. We have lawyers to worry about the legal issues. He feels that we have gone down the road, he doesn't even want to speak to the Dezer's because he feels we are violating our no shop agreement in the LOI if we even sit up here and debate. Vice Mayor Thaler said he feels we are even stronger based on the few changes that were made from where we were before, and Commissioner Scholl said he agrees and he pointed that out at the last meeting. We have tightened it up considerably and we have the protections that we were looking for and we were comfortable with it. He is concerned that if we kill this deal, we go down the road with Dezer or somebody else, it falls apart for some reason, and these guys find something else to do, and we are out. He doesn't feel that everybody is going to be waiting to do a development deal in this economy and we should also consider that. Mayor Edelcup asked for a motion to approve this, if the vote is yes then it becomes moot, and Commissioner Gatto asked for clarification, that we are not permitted to entertain a second party on this, and Mayor Edelcup said you are if you want to change the rules. Commissioner Gatto said she came with different expectations, and initially in the first meeting she voted to have both parties pitch, and so she doesn't come here in the same mindset, the second meeting she had no choice. Mr. Steinman said that the rules are that we have a LOI, you agreed to negotiate in good faith to the LOI to form a ground lease, they have been consistent with that, the rules are also that you should not deal with anyone else while we are negotiating that ground lease. Gil Dezer said that he wanted to dispel some untruths that were told earlier today about him not being able to deliver, there are three beautiful buildings across the street that he delivered well without any issues, bankruptcies, etc., as well as Commissioner Scholl's comment about people not lining up to do buildings here in Sunny Isles Beach, and there are, and Commissioner Gatto's approach oflet's talk to two people, in reality if you post this and list it 8 Summary Minutes: Special City Commission Meeting October 4, 2011 Sunny Isles Beach, Florida with a broker to sell it, who knows how many offers you may get. The City did this deal with these people and it is not a question of ability vs. non-ability, it is a question of risk on the City's part, the City getting paid today versus maybe in years to come, and if you are talking about interest, you can take that $7 Million and put it in the bank and get interest on it yourself which would lead to the same numbers at the end of the day. As far as his ability, we all know there was no new construction in 2008 and 2009, there was absolutely no ability to get financing at the time, since we did pay offin 2011, $475 Million of construction financing, he does have the ability to go out and get more construction financing from banks today but he doesn't think they will need that since this is a small building. The massive structure Mr. Weintraub showed, although he doesn't know where he got the information from, the building itself will be the same building that he or whoever can build because it is part of the Zoning Code and nobody is getting anything different than the Zoning Code, and he doesn't know where he got the 280,000 square foot numbers. What you are looking at as far as the building goes, the structure that is going to be there will be all the same thing. If you are looking at that, it was because we were also trying to acquire this site next door and we were doing an all encompassing situation from the folks at Golden Strand. Mr. Dezer said he is the one that bought the last fractured condo which is the Solice project to help clean up the City and they are closing on that in the next 90 to 120 days and that is the next project that they will be bringing to fruition here in the City and completing another mess that happened with a developer who thought he could use his own funds to build buildings. Former City Commissioner Gerry Goodman said he doesn't like the idea of the City being in business, he doesn't like the idea of a 25-year lease. Once the condos are sold, are they going to pay the City then or let the lease run for 25 years, he foresees problems down the line. He doesn't think the City should be in the real estate business. City Clerk Hines read the title of the Resolution, and Mayor Edelcup asked for a motion and Commissioner Scholl moved, and upon not getting a second, Mayor Edelcup seconded the motion in order to get a vote. Commissioner Scholl moved and Mayor Edelcup seconded a motion to approve the resolution. The motion failed by a roll-call vote of 4-1 opposed (Commissioner Scholl in favor). Vote: Commissioner Aelion Commissioner Gatto Commissioner Scholl Vice Mayor Thaler Mayor Edelcup no no yes no no City Attorney Ottinot said procedurally that we need a motion to rescind Resolution No. 2011-1776 adopted on September 15, 2011 approving the revised updated Letter ofIntent, it is a non-binding Letter ofIntent but it has a non-negotiation clause and so we need a motion to rescind that Resolution. [City Clerk's Note: Subsequently Resolution No. 20I I -I 750 adopted on July 21, 2011 was also rescinded.) 9 Summary Minutes: Special City Commission Meeting October 4,20 I I Sunny Isles Beach, Florida A Resolution of the City Commission of the City of Sunny Isles Beach, Florida, Rescinding Resolution No. 2011-1750 Adopted on July 21, 2011, and Resolution No. 2011-1776 Adopted on September 15, 2011, Approving a Letter ofIntent Between the City of Sunny Isles Beach and The Weintraub Companies for the Purchase of 18080 Collins Avenue ("Alamo Property"); Authorizing the City Manager to Do All Things Necessary to Effectuate this Resolution; Providing for an Effective Date. Commissioner Aelion moved and Vice Mayor Thaler seconded a motion to approve the resolution. Resolution No. 2011-1783 was adopted by a roll-call vote of 4-1 (Commissioner Scholl opposed) in favor. Vote: Commissioner Aelion ~ Commissioner Gatto ~ Commissioner Scholl no Vice Mayor Thaler ~ Mayor Edelcup yes Mayor Edelcup said that we need to have instruction from the Commission as to whether or not they want to proceed negotiating with the Dezer Letter of Intent and/or giving the opportunity to the Ocean Corporation Letter of Intent and put it up to what basically would turn out to be a contest of what is more favorable to the City. Commissioner Aelion said by allowing the reopening of negotiation with this present Letter of Intent, you should give another opportunity to another body the one that was just rescinded to come back and do a similar or equitable offer to be fair to the market. Commissioner Gatto said that they are two different approaches that need to be analyzed and to look at side by side. Commissioner Scholl said that is a fair statement by Commissioner Gatto but what he is saying is to say "we brought you down the trail one time come on back and this time we will act in good faith and we are not going to leave you at the altar if we put a no-shop clause in your Letter of Intent, again, personally he believes there is a certain way to do business and he does not like to do business this way. Mayor Edelcup said there is a extra fiduciary responsibility, when you are dealing for yourself it is one thing but when you are dealing for the City it is something else, it is sad we are in a situation like we are but at the same time we are duty-bound to have to look at what is best for the City current and long term. Mayor Edelcup said we are where we are and what we can do, if the Commission wants, is to defer any action on the Dezer Letter ofIntent until a future Commission date and we can set the date now or it can be on the next scheduled Commission meeting on October 20,2011. It was the consensus of the Commission to bring it to the October 20, 2011 meeting. Mayor Edelcup said between now and then, each Commissioner needs to read the Dezer Letter of Intent, get their comments to the City Manager/City Attorney so that they can start reviewing their comments ahead of time to get questions to them so that the Commission can hear the answers at the October 20, 2011 meeting and take it from there. Commissioner Scholl said that he thinks staff has to flush out the issues, and Mayor Edelcup said certainly we don't want to have an issue where there is a contingency on the City's part to do anything more than to close the deal and collect the cash and say goodbye to whatever problems may occur in the future with the developer developing that property, we cannot be under any further obligation and so that has to be there, and there has to be fixed dates in any Letter oflntent. He said it is up to Mr. Weintraub if he wants to partake in this ongoing saga or not, and he said he feels 10 Summary Minutes: Special City Commission Meeting Octoher 4,20 I I Sunny Isles Beach, Florida bad because Mr. Weintraub has spent a lot of time in putting this together, and he also understands the comments that Commissioner Gatto raised that perhaps we shouldn't have moved so hastily and foreclosed any negotiations between other parties when we did it two months ago and today maybe we would not be where we are at but we are where we are at. We will hear the item again at the Commission meeting of October 20, 2011, and if there is more than one to consider on the table, then get both of them on the table, ifthere is only one then we will consider the one. 3B. Add-On: A Resolution of the City Commission of the City of Sunny Isles Beach, Florida, Rescinding Resolution No. 2011-1777 Adopted on September 15,2011; Authorizing the Chief of Police, in Accordance with the Comprehensive Crime Control Act of 1984, to Expend up to $115,984.49 from the Federal Forfeiture (DOJ) Funds for the Purchase of Miscellaneous Law Enforcement Equipment and Technology; Providing for an Effective Date. Action: City Clerk Hines read the title, and City Manager Cohen reported that after the Commission approved a prior resolution for the purchase often (10) MacIntosh computers, the low bidder on the project notified the City that they would not honor their bid, and they gave us a new bid which was higher than the next low bid from Apple Enterprise. We are here tonight to do two things, one is to rescind the resolutions for that specific authorization and to present you with new resolutions that have an updated forfeiture funds expenditure reflecting the new price difference of approximately $2,169.50, and to authorize the purchase of the computers from Apple. Mayor Edelcup said we can vote on these two together because they are parallel items. Public Speakers: None Vice Mayor Thaler moved and Commissioner Scholl seconded a motion to approve the resolution. Resolution No. 2011-1784 was adopted by a voice vote of 5-0 in favor. 3C. Add-On: A Resolution ofthe City Commission of the City of Sunny Isles Beach, Florida, Rescinding Resolution No. 2011-1779 Adopted on September 15,2011; Authorizing the Purchase of Ten (10) Macbook Pro Laptop Computers and Accessories from Apple Enterprise, for the Police Department's Detached Detective/DEA Task Force, in a Total Amount Not to Exceed $16,219.50, Attached Hereto as Exhibit "A"; Authorizing the City Manager to Do All Things Necessary to Effectuate this Resolution; Providing for an Effective Date. Action: City Clerk Hines read the title, and City Manager Cohen reported. Public Speakers: None Vice Mayor Thaler moved and Commissioner Scholl seconded a motion to approve the resolution. Resolution No. 2011-1785 was adopted by a voice vote of 5-0 in favor. 11 Summary Minutes: Special City Commission Meeting October 4, 2011 Sunny Isles Beach, Florida 4. CITIZEN'S FORUM 4A. Add-On: Discussion by Alex Kushnir regarding a Tennis Center in Sunny Isles Beach. Action: Alex Kushnir asked the City Commission to build a Tennis Center in the City as it would bring in tourists and tournaments. Vice Mayor Thaler said that Mr. Kushnir has come before the Commission many times in the last two years asking for tennis courts. He said that we have done some research and learned that Miami-Dade County has tennis courts at Haulover and they are willing to let us take over and run them. He had gone to the City Manager and asked him to check into it to see if they are still willing to give it to us and what the cost would be. City Manager Cohen said he did have a meeting with the County Parks people the other day at Haulover and they did discuss the concept of the City investing in the tennis courts and then having control over the reservations for those tennis courts, and so they are willing to basically turn those over to us, let us improve them, and then we would be able to run them. They would be open to the general public but we would run the reservation system for them. He does not have a cost yet but he will be contacting companies that does do tennis court installations and see what kind of cost we can get. Vice Mayor Thaler asked him when he does that to come back with different bases for the court, he asked Mr. Kushnir who's daughter is a professional tennis player, what they are using as base on the tennis courts. Mr. Kushnir said because of the wind and the ocean he recommends they use hard court. He said the bottom line is we need an actual Tennis Center, the other cities have a Tennis Center not just tennis courts. A Tennis Center is where our children develop, it is for our future, you can have tennis tournaments and people will come from all over as he travels with his daughter to different tennis tournaments. Mayor Edelcup said that is what we are looking for and we need to determine if we can work off the current courts at Haulover that have parking and space already assigned rather then try to find a location in our City which may be hard to do, and it may give us a running jump if the cost justifies us going forward. He thinks the first thing we should do is to have the City Manager continue his research and find out what it is that we would have to do to the Haulover courts, would those courts then be the Sunny Isles Beach Tennis Courts in Haulover, would we be leasing those courts for that facility from the County, and then move forward. That would accommodate what you are looking for since we can additionally run our buses over to that court. City Manager Cohen noted that while we are researching this, we do have some tennis facilities immediately available to our residents. We have an agreement with Golden Beach, and our residents are allowed to use their tennis courts right now, and their residents are allowed to use our facilities as well, it is a reciprocal agreement. Commissioner Scholl said he doesn't think that is what Mr. Kushnir is talking about, he is talking about a center and a place that would attract tournaments. Mr. Kushnir said that is correct and it is a whole different ballgame. He said some of the tennis courts are not useable, safety is the most important issue and a lot of these tennis courts at Haulover are not safe. In Golden Beach it is a lot of trouble as they don't allow a lot of people to come, and additionally a lot of professional people come in the morning to provide tennis lessons and 12 Summary Minutes: Special City Commission Meeting October 4, 20 I I Sunny Isles Beach, Florida then you can't use the courts. Vice Mayor Thaler said we will continue to do the research and will come back at the November meeting [November 17,2011] for the Commission to make a decision as to where we want to go, what our cost is, etc. Mayor Edelcup appointed Vice Mayor Thaler as the Commission Liaison on this project. Mr. Kushnir thanked the Commission. 5. ADJOURNMENT Mayor Edelcup adjourned the meeting at 7: 19 p.m. Respectfully submitted by: .~~~~ Jane A. Hines, CMC, City Clerk Approved by the City Commission on Oct. 20, 2011 l3 Preview Page 1 of 1 City of Sunny Isles Beach 18070 Collins Avenue Sunny Isles Beach, Florida 33160 (305) 947-0606 City Hall (305) 949-3113 Fax MEMORANDUM TO: The Honorable Mayor and City Commission FROM: Jane A. Hines, CMC, City Clerk DATE: 10/20/2011 RE: Summary Minutes for the October 4, 2011 City Commission Meeting RECOMMENDATION: Attached for your consideration are the Summary Minutes for the October 4, 2011 Special City Commission Meeting regarding a Ground Lease with Ocean Corporate Center. REASONS: N/A ATTACHMENTS: . Summary Miniutes http://sibagenda.sibfl.net/agendalPreview.aspx?I temID=61 O&MeetingID=O&MeetingDat... 10/11/2011