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HomeMy WebLinkAboutReso 2018-2882 RESOLUTION NO. 2018-7% A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF SUNNY ISLES BEACH, FLORIDA, APPROVING A REQUEST FOR EXTENSION OF PAYMENTS FOR TRANSFER OF DEVELOPMENT RIGHTS AND DENSITY BONUSES PROVIDED FOR THE DEVELOPMENT PROJECT COMMONLY KNOWN AS ESTATES OF ACQUALINA LOCATED AT 17901 COLLINS AVENUE; APPROVING PROMISSORY NOTES BETWEEN THE CITY OF SUNNY ISLES BEACH AND A3 DEVELOPMENT LLC, ATTACHED HERETO AS EXHIBIT "A" IN SUBSTANTIALLY THE SAME FORM; AUTHORIZING THE CITY MANAGER AND THE CITY ATTORNEY TO DO ALL THINGS NECESSARY TO EFFECTUATE THE TERMS OF THIS RESOLUTION; PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, by Resolution Nos. 18-Z-165, 15-Z-153, and 14-Z-144 ("Zoning Resolution") the City Commission approved a site plan filed by A3 Development, LLC, (the "Developer") for a project commonly known as "The Estates of Acqualina"; and WHEREAS, under the Zoning Resolution, the Developer is required to pay all fees, including TDR and Density Bonus payments upon the issuance of a master or below grade building permit; and WHEREAS, due to market conditions and pursuant to Section 265-23 of the City Code, the Developer is requesting additional time to pay $17,847,212.80 to the City for TDRs and Density Bonuses approved for the Estates of Acqualina; and WHEREAS, the City Commission, based on the recommendation of the City Manager and Finance Director, wishes to grant the Developer's request for additional time to make the required payments pursuant to the terms and conditions set forth in the Promissory Notes attached hereto as Exhibit "A". NOW THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF SUNNY ISLES BEACH, FLORIDA, AS FOLLOWS: Section 1. Extension of Payment and Approval of Promissory Notes. The City Commission hereby approves the extension requested submitted by A3 Development, LLC, and further approves the Promissory Notes for the South and North Towers of the Estates of Acqualina in substantially the same form attached as Exhibit "A". Section 2. Authorization of City Manager and City Attorney. The City Manager and City Attorney are authorized to do all things necessary to effectuate the terms of this Resolution. Section 3. Effective Date. This Resolution shall become effective upon adoption. Promissory Notes for Estates of Acqualina 1 of 2 PASSED AND ADOPTED this 18t1i day of Octe.- 018. Geor_- H. Scholl, Mayor ATTEST .090f Mauricio :etancu , CMC, City Clerk APPROVE11) AS TO FORM AND E / I UFFICIENCY: LOU H. s • tinot, f ity Attorney Moved by: Vilkhllcgt (LAV, -Of Seconded by: U l c,£ Vut A'`' Vote: Mayor Scholl '(Yes) (No) Vice Mayor Goldman V (Yes) (No) Commissioner Aelion V (Yes) (No) Commissioner Gatto /(Yes) (No) Commissioner Svechin (Yes) (No) Promissory Notes for Estates of Acqualina 2 of 2 PROMISSORY NOTE FOR SOUTH TOWER October /` 2018 • FOR VALUE RECEIVED, A3 DEVELOPMENT, LLC, a Florida limited liability corporation ("Maker"), with its principal address at 17780 Collins Avenue, 2"d Floor, Sunny Isles Beach, Florida 33160, unconditionally promises to pay to the order of City of Sunny Isles Beach ("Payee"), a Florida municipal corporation located at 18070 Collins Avenue, Sunny Isles, Beach, FL 33160, the principal amount of Eleven Million Sixty Five Thousand Two Hundred Seventy One Dollars and Ninety Four Cents ($11,065,271.94) (the "Indebtedness"), together with interest on the unpaid principal balance from time to time outstanding under this Promissory Note ("Note"), at the rate of Prime plus a half percent (0.5) per annum. Interest shall be computed for the actual number of days which have elapsed, on the basis of a 360-day year. The Indebtedness together with all accrued and unpaid interest hereunder shall be due and payable no later than nine (9) months from the date of issuance of a Temporary Certificate of Occupancy ("TCO") or Certificate of Occupancy ("CO") for any unit or area within the South Tower of the project commonly known as Estates of Acqualina, which was approved under Resolution Nos. 18-Z-165, 15-Z- 153, 14-Z-144 ("South Tower Maturity Date"). Interest under this Note shall begin to accrue upon the issuance of the below grade or master building for the South Tower. Maker shall pay quarterly interest payments for the Indebtedness to the Payee. In the event that condominium units within the South Tower are sold and title is transferred to a buyer prior to the South Tower Maturity Date, Maker shall pay quarterly principal payments to Payee in the amount of Seventy Eight Thousand Five Hundred Twenty Seven Dollars and No/100ths ($78,527.00) ("Unit Charge") per unit based on the actual closing of each unit. Maker shall provide the Payee with monthly reports to confirm the number of units that are sold within the South Tower. The Unit Charge set forth herein shall be reflected as a Settlement Charge paid by Maker in the Closing Statement of each unit. All payments made on this Note shall be applied by Payee to the reduction of the indebtness. The Indebtedness and accrued and unpaid interest thereon shall be due and payable on the Maturity Date. If any payment of interest or principal payment is not received by the Payee within five (5) days after its due date, Maker shall pay Payee a late charge equal to five percent (5.00%) of the overdue payment. If interest or principal payment is not received by the Payee within thirty (30) days from Payee's written notice to Maker that any such payment of interest or principal payment is due and payable, the entire balance of principal payment and accrued interest shall be due to Payee. If this Note is not paid promptly on the Maturity Date in accordance with its terms and is placed in the hands of an attorney for collection, Maker agrees to pay all reasonable attorney's fees and the costs and expenses of collection of this Note incurred by Payee. Promissory Note—A3 Development, LLC 295 Maker covenants and agrees that time is of the essence for payments due under this Note. All agreements between Maker and Payee, whether now existing or subsequently arising and- whether written or oral, are expressly limited so that, in no contingency whatsoever, whether by reason of acceleration of the maturity of this Note or.otherwise, shall the amount paid or agreed to be paid to Payee pursuant to the terms of this Note or otherwise or for the payment or performance of any covenant or obligation contained in this Note or in any other document evidencing, securing or pertaining to the indebtedness evidenced by this Note exceedthe maximum amount permissible under applicable law. If, from any circumstance whatsoever, fulfillment of any provision of this Note or other document, at the time performance of such provision shall be due, shall involve exceeding the maximum amount permissible by law, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit validly allowed by law. If Payee shall ever receive, as interest or otherwise, an amount which would exceed the highest lawful rate of interest, such amount which would be excessive interest shall be applied to the reduction of the principal amount owing under this Note or on account of any other principal indebtedness of Maker to Payee and not to the payment of interest or, if such excessive interest exceeds the unpaid balance of principal of this Note and such other indebtedness, such excess shall be refunded to Maker. The terms and provisions of this paragraph shall control and supersede every other provision of all agreements between Maker and Payee. - This Note shall be prepayable, in whole or in part, at any time and from time to time without premium or penalty at the sole option of the Maker, with the amount of the prepayment being credited first in respect of accrued but unpaid interest and second in respect of principal. No invalid provisions of this Note shall affect or impair any other provision. Maker and each endorser, surety and guarantor acknowledge receipt of a completed copy of this Note. MAKER' AND PAYEE, EACH AFTER CONSULTATION WITH FLORIDA COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS NOTE, OR THE TRANSACTIONS OR OBLIGATIONS UNDER WHICH THIS NOTE WAS DELIVERED, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY RELATING TO THIS NOTE. MAKER AND PAYEE EACH ACKNOWLEDGE THAT THE PROVISIONS OF THIS PARAGRAPH ARE A MATERIAL INDUCEMENT TO PAYEE'S ACCEPTANCE OF THIS NOTE AND MAKER AGREEING TO TERMS OF THIS NOTE. No amendment, modification, waiver or discharge of this Note, or any provision of this Note, shall be valid or effective unless in writing and signed by Payee and Maker. This Note shall be construed in accordance with the internal laws of the State of Florida, exclusive of its choice of law principles, and any suit, action or proceeding arising out of Promissory Note—A3 Development,LLC 296 or relating to this Note must be commenced and maintained in a court of competent subject matter jurisdiction in Miami-Dade County, Florida and Maker consents to such jurisdiction and venue and waives all objections (including, without limitation,forum non conveniens) thereto. Maker agrees to pay the City's attorney's fees and costs if the City has to file any legal action to enforce the Note. MAKER: A3 Development, LLC By: C.,,,<,,Z.461,i Oren Shmueli Senior Vice President and CFO Promissory Note—A3 Development,LLC 297 PROMISSORY NOTE FOR NORTH TOWER October /C 2018 FOR VALUE RECEIVED, A3 DEVELOPMENT, LLC, a Florida limited liability corporation ("Maker"), with its principal address at 17780 Collins Avenue, 2nd Floor, Sunny Isles Beach, Florida 33160, unconditionally promises to pay to the order of City of Sunny Isles Beach ("Payee"), a Florida municipal corporation located at 18070 Collins Avenue, Sunny Isles, Beach, FL 33160, the principal amount of Six Million Seven Hundred Eighty One Thousand Nine Hundred Forty Dollars and Eighty Six Cents ($6,781,940.86) (the "Indebtedness"), together with interest on the unpaid principal balance from time to time outstanding under this Promissory Note ("Note"), at the rate of Prime plus a half percent (0.5) per annum. Interest shall be computed for the actual number of days which have elapsed, on the basis of a 360-day year. The Indebtedness together with all accrued and unpaid interest hereunder shall be due and payable no later than Seventy Two (72) months from the date of issuance of the below grade or master building permit for the South Tower of the project commonly known as Estates of Acqualina, which was approved under Resolution Nos. 18-Z-165, 15-Z-153, 14-Z-144 ("North Tower Maturity Date"). Interest under this Note shall begin to accrue upon the issuance of a master building permit for the North Tower or no later than Thirty Six (36) months from the date issuance of the below grade or master building permit for the South Tower, whichever comes first. Maker shall obtain the master building permit for the North Tower no later than Thirty Six __ (36),months from the date of issuance of the below grade or master building permit for the South Tower. If Maker fails to obtain the master building permit for the North Tower as set forth herein, interest on the Indebtedness shall begin to accrue until the principal amount is paid from the date of Thirty Six (36) months from the issuance of the below grade or master building permit for the South Tower. The Maker shall be required to make quarterly interest payments to the Payee thereafter. • In the event that condominium units within the North Tower are sold and title is transferred to a buyer prior to the North Tower Maturity Date, Maker shall pay quarterly principal payments to Payee in the amount of Eighty Thousand Two Hundred Sixteen Dollars and 50 Cents ($80,216.50) ("Unit Charge") per unit based on the actual closing of each unit. Maker shall provide the Payee with monthly reports to confirm the number of units that are sold within the North Tower. The Unit Charge set forth herein shall be reflected as a Settlement Charge paid by Maker in the Closing Statement of each unit. All payments made on this Note shall be applied by Payee to the reduction of the Indebtedness. The Indebtedness and accrued and unpaid interest thereon shall be due and payable on the North Tower Maturity Date. If any payment of interest or principal payment is not received by the Payee within five (5) days after its due date, Maker shall pay Payee a late charge equal to five percent (5.00%) of the overdue payment. If interest or principal payment is not received by the Payee within thirty (30) days from Payee's written notice to Maker that any Promissory Note—A3 Development, LLC 298 • such payment of interest or principal payment is due and payable, the entire balance of principal payment and accrued interest shall be due to Payee. If this Note is not paid promptly on the North Tower Maturity Date in accordance with its terms and is placed in the hands of an attorney for collection, Maker agrees to pay all reasonable attorney's fees and the costs and expenses of collection of this Note incurred by Payee. Maker covenants and agrees that time is of the essence for payments due under this Note. All agreements between Maker and Payee, whether now existing or subsequently arising and whether written or oral, are expressly limited so that, in no contingency whatsoever, whether by reason of acceleration of the maturity of this Note or otherwise, shall the amount paid or agreed to be paid to Payee pursuant to the terms of this Note or otherwise or for the payment or performance of any covenant or obligation contained in this Note or in any other document evidencing, securing or pertaining to the indebtedness evidenced by this Note exceed the maximum amount permissible under applicable law. If, from any circumstance whatsoever, fulfillment of any provision of this Note or other document, at the time performance of such provision shall be due, shall involve exceeding the maximum amount permissible by law, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit validly allowed by law. If Payee shall ever receive, as interest or otherwise, an amount which would exceed the highest lawful rate of interest, such amount which would be excessive interest shall be applied to the reduction of the principal amount owing under this Note or on account of any other principal indebtedness of Maker to Payee and not to the payment of interest or, if such excessive interest exceeds the unpaid balance of principal of this Note and such other indebtedness, such excess shall be refunded to Maker. The terms and provisions of this paragraph shall control and supersede every other provision of all agreements between Maker and Payee. This Note shall be prepayable, in whole or in part, at any time and from time to time without premium or penalty at the sole option of the Maker, with the amount of the prepayment being credited first in respect of accrued but unpaid interest and second in respect of principal. No invalid provisions of this Note shall affect or impair any other provision. Maker and each endorser, surety and guarantor acknowledge receipt of a completed copy of this Note. MAKER AND PAYEE, EACH AFTER CONSULTATION WITH FLORIDA COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS NOTE, OR THE TRANSACTIONS OR OBLIGATIONS UNDER WHICH THIS NOTE WAS DELIVERED, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY RELATING TO THIS NOTE. MAKER AND PAYEE EACH ACKNOWLEDGE THAT THE PROVISIONS OF THIS PARAGRAPH ARE A MATERIAL INDUCEMENT TO PAYEE'S ACCEPTANCE OF THIS NOTE AND MAKER AGREEING TO TERMS OF THIS NOTE. Promissory Note—A3 Development,LLC 299 No amendment, modification, waiver or discharge of this Note, or any provision of this Note, shall be valid or effective unless in writing and signed by Payee and Maker. This Note shall be construed in accordance with the internal laws of the State of Florida, exclusive of its choice of law principles, and any suit, action or proceeding arising out of or relating to this Note must be commenced and maintained in a court of competent subject matter jurisdiction in Miami-Dade County, Florida and Maker consents to such jurisdiction and venue and waives all objections (including, without limitation,forum non conveniens) thereto. Maker agrees to pay the City's attorney's fees and costs if the City has to file any legal action to enforce the Note. MAKER: A3 Development, LLC By: Oren Shmueli Senior Vice President and CFO Promissory Note—A3 Development,LLC 300 ksor.Yistf., City of Sunny Isles Beach 9 18070 Collins Avenue Sunny Isles Beach, Florida 33160 F 1o¢w 4,7 (305)947-0606 City Hall T ' *or sot+ �`8 (305)949-3113 Fax MEMORANDUM TO: The Honorable Mayor and City Commission VIA: Christopher J. Russo, City Manager FROM: Tiffany Neely,Acting Finance Director Claudia Hasbun, Planning and Zoning Director DATE: 10/18/2018 RE: Estates of Acqualina's Extension Request for TDRs and Density Bonus Payments RECOM M ENDAT ION: This Resolution is presented for your consideration. REASONS: By Resolution No. 18-Z-165, adopted on April 19, 2018, Resolution No. 15-Z-153, adopted on April 16, 2015, and Resolution No. 14-Z- 144, adopted on September 18, 2014 ("Zoning Resolution"), the City Commission approved a phase development project consisting of two (2) condominium towers with 248 dwelling units. The development project is commonly known as Estates of Acqualina (the "Project") and is being developed by A3 Development, LLC. (the "Developer"). Upon final approval of the Project, the City Commission approved respectively Transfer of Development Rights ("TDRs") in the amount of 42,944 square feet of floor area and 463,558 square feet of floor area under the Density Bonus program. The equivalent cash value for the TDRs and Density Bonuses are $5,368,000.00 for the TDRs and $15,017,792.00 for the Density Bonuses. Pursuant to the Zoning Resolution, the Developer provided the City with initial deposits to reduce the balance of the required payments for TDRs and Bonuses. Currently, the Developer owes the City the sum of $17,847,212.80 for TDR and Bonus payments. 290 Under the Zoning Resolution, the Developer is required to pay the outstanding balance of TDRs and Bonus payments upon the issuance - of a below or master grade building permit for the Project. Due to market conditions, the Developer has filed a request with the City to extend the time to pay the balance for TDRs and Bonus payments. Through many months of negotiations with the Mayor and Staff, the Developer has agreed to make the payments under the following terms: (1) Developer has agreed to execute two Promissory Notes relating to the issuance of a below grade or master building permit for the South and North Towers of the Project; (2) Under the Promissory Note referred to as Promissory Note for the South Tower ("South Tower Note"), the Developer agrees to pay to the City the sum of $11,065,271.00 within 9-months of the issuance of the Temporary Certificate of Occupancy (TCO) or Certificate of Occupancy(CO)for the South Tower of the Project. (3) Under the South Tower Note, the Developer is required to pay interest at the rate of Prime plus half percent (0.5%) for the unpaid principal balance. The Developer is also required to pay quarterly interest payments to the City. (4) Principal payments are required under South Tower Note if the Developer is able to sell units within the South Tower. Principal payment in the amount of $78,527.00 per unit is required on a quarterly basis if units are sold until payment of principle in full. (5) Under the Promissory Note referred to as Promissory Note for the North Tower ("North Tower Note"), the Developer agrees to pay to the City the sum of $6,781,940.86 within six (6) years or Seventy Two (72) months of issuance of a below grade or master building permit for the South Tower of the Project. The Developer is required to pull the master building permit for the North Tower within (3) years of issuance of building permit for the South Tower. (6) Under the North Tower Note, Developer is required to pay the same interest as set forth in the South Tower Note for unpaid principal balance. Interest will not accrue on the unpaid principal until either a master permit is pulled for the North Tower or within three (3) years of issuance of the below grade or master building permit is pulled for the South Tower, whichever comes first. (7) Principal payments are required under the North Tower Note if the Developer is able to sell units within the North Tower. Principal payment in the amount of $80,216.50 per unit is required on a quarterly basis if the units are sold until payment of principle in full. If the Developer is not able to comply with the terms and conditions of the Promissory Notes, the City has the absolute right to revoke the building permit issued to the Developer and enforce the terms of the Promissory Notes. It is important to note that the City Commission has 291 granted extension requests in the past relating to other development projects. ATTACHMENTS: Description Resolution Promissory Note - South Tower Promissory Note - North Tower Item Number: 10.1. 292