Miami-Dade Legislative Item
File Number: 132485
   Clerk's Official Copy   

File Number: 132485 File Type: Resolution Status: Adopted
Version: 0 Reference: R-1043-13 Control: Board of County Commissioners
File Name: CULT AFFAIRS COCONUT GROVE PLAYHOUSE Introduced: 12/10/2013
Requester: Department of Cultural Affairs Cost: Final Action: 12/17/2013
Agenda Date: 12/17/2013 Agenda Item Number: 8C1
Notes: Title: RESOLUTION (1) APPROVING A MANAGEMENT AND OPERATING AGREEMENT BETWEEN MIAMI-DADE COUNTY (COUNTY) AND THE CITY OF MIAMI DEPARTMENT OF OFF-STREET PARKING A/K/A MIAMI PARKING AUTHORITY; (2) APPROVING A MEMORANDUM OF UNDERSTANDING BETWEEN THE COUNTY AND THE CITY OF MIAMI; (3) AUTHORIZING THE MAYOR OR DESIGNEE, SUBJECT TO CERTAIN CONDITIONS, TO CONCLUDE AND EXECUTE SETTLEMENT AGREEMENTS AND/OR TO TAKE OTHER LEGAL ACTION, FOR THE PURPOSE OF REMOVING SPECIFIED ENCUMBRANCES ON THE COCONUT GROVE PLAYHOUSE PROPERTY AND TO MAKE EXPENDITURES RELATED TO SUCH PURPOSES IN A TOTAL AMOUNT NOT TO EXCEED $120,000.00; AND (4) AUTHORIZING THE COUNTY MAYOR OR DESIGNEE TO EXECUTE THE FOREGOING AGREEMENTS AND TO EXERCISE ANY AND ALL RIGHTS CONFERRED BY ANY OF THE FOREGOING AGREEMENTS, AND PROVIDING FOR AN EFFECTIVE DATE
Indexes: COCONUT GROVE PLAYHOUSE
Sponsors: Xavier L. Suarez, Prime Sponsor
Sunset Provision: No Effective Date: Expiration Date:
Registered Lobbyist: None Listed


Legislative History

Acting Body Date Agenda Item Action Sent To Due Date Returned Pass/Fail

Board of County Commissioners 12/17/2013 8C1 Adopted P

Office of the Chairperson 12/12/2013 Scrivener's Errors 12/17/2013
REPORT: On page 4, second paragraph the date in the last sentence should read: February 15, 2014. Also on page 7, the first paragraph, the third sentence ending should read: “….to pursuing the outright ownership of the Playhouse property by the County.

County Attorney 12/10/2013 Assigned Jason Bloch

County Mayor 12/10/2013 Assigned County Attorney 1/22/2014
REPORT: Cultural Affairs - Commissioner Suarez sponsors - Pending Dec cmte - Waiver to the Dec 17 BCC will be requested - County Attorney: Jason Block - Attachments: Exhibit A-D

County Mayor 12/10/2013 Assigned Lisa Martinez 12/10/2013

Legislative Text


TITLE
RESOLUTION (1) APPROVING A MANAGEMENT AND OPERATING AGREEMENT BETWEEN MIAMI-DADE COUNTY (COUNTY) AND THE CITY OF MIAMI DEPARTMENT OF OFF-STREET PARKING A/K/A MIAMI PARKING AUTHORITY; (2) APPROVING A MEMORANDUM OF UNDERSTANDING BETWEEN THE COUNTY AND THE CITY OF MIAMI; (3) AUTHORIZING THE MAYOR OR DESIGNEE, SUBJECT TO CERTAIN CONDITIONS, TO CONCLUDE AND EXECUTE SETTLEMENT AGREEMENTS AND/OR TO TAKE OTHER LEGAL ACTION, FOR THE PURPOSE OF REMOVING SPECIFIED ENCUMBRANCES ON THE COCONUT GROVE PLAYHOUSE PROPERTY AND TO MAKE EXPENDITURES RELATED TO SUCH PURPOSES IN A TOTAL AMOUNT NOT TO EXCEED $120,000.00; AND (4) AUTHORIZING THE COUNTY MAYOR OR DESIGNEE TO EXECUTE THE FOREGOING AGREEMENTS AND TO EXERCISE ANY AND ALL RIGHTS CONFERRED BY ANY OF THE FOREGOING AGREEMENTS, AND PROVIDING FOR AN EFFECTIVE DATE

BODY
WHEREAS, this Board desires to accomplish the purposes outlined in the accompanying memorandum, a copy of which is incorporated herein by reference; and

WHEREAS, through Resolution R-797-13, the Board approved a Lease Agreement between the State of Florida and co-lessees, Miami-Dade County and Florida International University (FIU), for the Coconut Grove Playhouse property which was executed by all parties by October 15, 2013; and

WHEREAS, the memorandum to the Board accompanying R-797-13, noted that the State required certain specified encumbrances affecting the property’s title to be resolved within three months of the execution of the Lease (or by January 15, 2014), for the Lease to be released from escrow, and in addition the agenda item reiterated that any funding that might be required to satisfy State or other prerequisites related to the finalization of the Lease first must be reviewed and approved by the Board; and

WHEREAS, the Coconut Grove Playhouse property includes a surface parking lot and other parking facilities which require management for ongoing operations, and which are expected to generate revenues from such operations; and

WHEREAS, the City of Miami, which holds many of the specified encumbrances, has agreed via a “Memorandum of Understanding” to release such encumbrances provided that the County and the City’s Department of Off-Street Parking a/k/a Miami Parking Authority, execute an acceptable Management and Operating Agreement pertaining to the Playhouse parking facilities, and staff have negotiated such an acceptable Management and Operating Agreement; and

WHEREAS, staff believes that the County will be able to acceptably resolve all of the remaining specified encumbrances within the State’s deadline, by way of settlement agreements or by taking other legal action, the total cost of which, including related expenses, would not exceed $120,000.00, and that such expenditures could be recouped by the net revenue generated from operation of the Playhouse parking facilities,

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MIAMI-DADE COUNTY, FLORIDA, that

Section 1. The Board adopts and incorporates the foregoing recitals as though fully set forth herein.

Section 2. The Board approves the Management and Operating Agreement between Miami-Dade County and the City of Miami Department of Off-Street Parking a/k/a Miami Parking Authority, and the Memorandum of Understanding between Miami-Dade County and the City of Miami, each in substantially the form, respectively, attached hereto, and authorizes the County Mayor or Mayor’s designee to execute the same and to exercise any and all rights therein.

Section 3. The Board authorizes the County Mayor or the Mayor’s designee to take any necessary legal action, and/or to enter into and execute settlement agreements (and to exercise any rights thereunder), and to make expenditures in an amount not to exceed $120,000.00, for settlements and related expenses, all for the purpose of removing specified encumbrances from the Coconut Grove Playhouse property.

Section 4. Each of the foregoing agreements and settlement payments shall be held in escrow or in trust until a determination by the Mayor or the Mayor’s designee that the conditions set forth herein have been met, and that all necessary encumbrances have been, or will be, satisfactorily resolved, such that the State will release the Coconut Grove Playhouse Lease from escrow.

Section 5. The Board directs the County Mayor or the Mayor’s designee to record any instrument of conveyance accepted herein in the Public Records of Miami-Dade County, Florida; and to provide a recorded copy of the instrument to the Clerk of the Board within thirty (30) days of execution of said instrument; and directs the Clerk of the Board to attach and permanently store a recorded copy together with this resolution.

HEADER
Date: January 22, 2014

To: Honorable Chairwoman Rebeca Sosa
and Members, Board of County Commissioners

From: Carlos A. Gimenez
Mayor

Subject: Coconut Grove Playhouse: Approval of Negotiated Agreements Eliminating
Property Title Encumbrances, Delegating Authority to Negotiate Settlements of
other Such Encumbrances and/or to Take Legal Action to Remove Such
Encumbrances and Authorization of Expenditure of an Amount Not to Exceed
$120,000.00, for Such Purposes, to be Reimbursed by Payments Made to the
County Pursuant to the Management and Operating Agreement for the Coconut
Grove Playhouse Surface Parking Lot

STAFF RECOMMENDATION
Recommendation
It is recommended that the Board: approve the negotiated final agreements listed below that eliminate property title encumbrances on the Coconut Grove Playhouse property as required by the State of Florida; delegate the authority to the Mayor, within the financial limitations specified herein, to conclude settlement agreements, or take other legal action for the purpose of removing the remaining encumbrances listed below; and authorize the payment of a total of $120,000.00 to National Title and Abstract Company, the County’s closing and escrow agent (who will then disburse from those funds the amounts due to each payee), to be reimbursed by payments to the County from the Management and Operating Agreement with the City of Miami Department of Off-Street Parking a/k/a Miami Parking Authority, such payment to National Title and Abstract comprising the costs associated with each of these negotiated final agreements as noted below, and up to $120,000.00 to cover pending settlements, if any, for the remaining encumbrances as noted below and miscellaneous related costs (for example, filing fees, title company escrow expenses, etc.), subject to the execution of all agreements, releases, affidavits, etc. necessary to satisfy the conditions required by the State of Florida to eliminate the property title encumbrances and thereby, release the Playhouse Lease Agreement from escrow. The negotiated final agreements are:

1) The Management and Operating Agreement between Miami-Dade County and the City of Miami Department of Off-Street Parking a/k/a Miami Parking Authority (Exhibit A);
2) The Memorandum of Understanding between Miami-Dade County and the City of Miami (Exhibit B);

Pending settlements of remaining encumbrances are:

3) Coconut Grove Playhouse Settlement Agreement between Aries Development Group, LLC, 3247 Charles, LLC, GH Mortgage, LLC, The Coconut Grove Playhouse, Inc., Coconut Grove Playhouse LLC, and Miami-Dade County – in an amount not to exceed $15,000.00, payable to Aries Development Group, LLC;
4) Settlement Agreement between Best Wholesale Office Products Corp. and Miami-Dade County - in an amount not to exceed $500.00, payable to Best Wholesale Office Products Corp.
5) Premier Printing Solution, Inc.; and
6) The Coconut Grove Business Improvement District.

Execution of the Management and Operating Agreement between Miami-Dade County and the City of Miami Department of Off-Street Parking a/k/a Miami Parking Authority (“Miami Parking Authority”) and execution of the Memorandum of Understanding between Miami-Dade County and the City of Miami are required to eliminate all of the City’s lien encumbrances on the Playhouse as further documented by the Conditional Mitigation and Partial Release of Lien Order approved by the City of Miami Code Enforcement Board on November 19, 2013 (Exhibit C).

All agreements and associated payments will be held in escrow by National Title and Abstract Company, the County’s escrow agent, and authority is delegated to the Mayor to authorize their release subject to the resolution of pending settlements of remaining encumbrances and confirmation by the State that all of these agreements and payments to eliminate the Coconut Grove property title encumbrances will satisfy the conditions set forth in the State’s March 1, 2013 surplus property notice (Exhibit D).
In addition, it is recommended that the Board directs the County’s State lobbying team to continue to advocate for the lease, conveyance and any other actions as needed related to furthering the Coconut Grove Playhouse initiative and authorizes and directs the Office of Intergovernmental Affairs to include this item as part of its ongoing State legislative activities.
Scope
The Coconut Grove Playhouse is located in District 7 but the impact of re-establishing a regional theater is countywide.

Fiscal Impact/Funding Source
Total funding not to exceed $120,000.00 is necessary to cover the costs associated with each of these negotiated agreements, pending settlements and the miscellaneous related costs (for example, filing fees, title company escrow expenses, etc.) and will be advanced from the Capital Outlay Reserve Fund and reimbursed by payments to the County from the Miami Parking Authority pursuant to the Management and Operating Agreement for the Coconut Grove Playhouse surface parking lot. While that agreement further provides that the County will be responsible for payment of expenditures related to the operation and maintenance of the parking lot, it is anticipated that the revenues generated from the parking lot will exceed such expenditures, and that all such expenditures must be approved by the County. The Background section of this Memorandum provides additional information to substantiate the projected revenues from the Miami Parking Authority.

It is important to point out that if any additional encumbrances occur prior to or during the term of the Playhouse Lease Agreement, the County will be responsible for removing these additional encumbrances.
Funding for the eventual capital project to re-establish regional theater on the Coconut Grove Playhouse site comes from two sources: 1) $15 million from project number 299 of the Building Better Communities-General Obligation Bond (BBC-GOB) program; and 2) $5 million from Series 2005 of Convention Development Tax (CDT) bond proceeds. These capital bond funds are not eligible to be used to satisfy the Playhouse’s title encumbrances and related expenses necessary to activate the lease with the State.

Delegation of Authority
Authority for executing the agreements, finalizing pending settlements within the limitations set forth herein and authorizing the approved expenditures resides with the Mayor or his designee; authority for exercising all provisions contained in the Management and Operating Agreement between Miami-Dade County and the Miami Parking Authority is delegated to the Department of Cultural Affairs’ Director.

Track Record/Monitor
Miami-Dade County has a track record for working cooperatively with the Miami Parking Authority on issues and projects that benefit the public. Michael Spring, Director of the Miami-Dade Department of Cultural Affairs, is responsible for implementing the County’s rights and responsibilities under Management and Operating Agreement with the Miami Parking Authority.

MANAGER'S BACKGROUND
Background
On October 1, 2013, the Board approved R-797-13, approving an updated Lease Agreement between the State of Florida and co-lessees, Miami-Dade County and Florida International University (FIU), for the Coconut Grove Playhouse property and an accompanying agreement between the County and FIU, specifying the respective rights and responsibilities of FIU and the County in more detail in regard to the property, its operation and programming. The Lease was executed by all parties by the October 15, 2013 State-mandated deadline. The accompanying agreement was executed by FIU and the County on October 9, 2013. Pursuant to the Agreement between the County and FIU, the County has the sole responsibility to enter into agreements to eliminate the encumbrances affecting the title of the Playhouse.

The October 1, 2013, memorandum to the Board noted that the State requires that certain specified encumbrances affecting the property’s title must be resolved within three months of the execution of the Lease, which is by January 15, 2014. In addition, the agenda item reiterated that any funding that may be required to satisfy State or other prerequisites related to the finalization of the Lease and the Agreement first must be reviewed and approved by the Board.

The County has concluded negotiations and/or is attempting to reach settlements with the entities that were identified by the State, through its title search, as holding encumbrances that must be cleared pursuant to the requirements set forth in the State’s March 1, 2013, surplus property notice. Given the County’s financial constraints, the plan to address the funding necessary for each of these negotiated agreements is the projected revenues from payments to the County from the Miami Parking Authority pursuant to the Management and Operating Agreement for the Coconut Grove Playhouse surface parking lot.

It is estimated that up to $120,000.00 will be necessary to cover pending settlements for remaining encumbrances as noted in the chart below and address miscellaneous related costs (for example, filing fees, title company escrow expenses, etc.), also to be covered by payments to the County from the Miami Parking Authority pursuant to the Management and Operating Agreement.

The following summarizes the encumbrances, pending settlements, and the associated settlement costs:

Estimated Potential Value of Encumbrance* Negotiated Settlement City of Miami $1,952,093.00 Parking Agreement Aries Development Group, et. al. $1,500,000.00 $15,000.00 Best Wholesale Office Products Corp. $3,387.28 $500.00 Florida Department of Revenue $12,296.68 Waived Premier Printing Solution, Inc. $58,412.59 Pending Coconut Grove Business Improvement District $34,323.68 Pending Subtotal – Final Settlements for Encumbrances $3,561,643.09 $15,500.00 Subtotal – Up to Amount for Pending Settlements and Estimated Related Costs $104,500.00 TOTAL – Up to Amount for Settlements and Related Costs
$120,000.00 * Estimated costs are computed as of 11/2013; negotiated settlements fully address the value of the encumbrances and result in their removal from the title of the property. Note that Aries Development (and its related entities), in addition to possessing encumbrances on the property, have also filed a civil suit against the County alleging various claims. The contemplated settlement will result in the dismissal of this suit as well.

Projected Parking Revenues from the Playhouse Parking Lot

Based on records of the City of Miami Parking Surcharge Program, gross revenues from the Coconut Grove Playhouse parking lot have averaged $17,000 per month over the last twelve months (November 2012 through October 2013). It is anticipated that the Miami Parking Authority will assume responsibility for managing the Playhouse parking lot under the agreement with the County on or about February 15, 2013.

Based on conservative, projected estimates of parking revenues and expenses completed by the Miami Parking Authority and reviewed by our staff, there will be sufficient funds paid to the County by the Miami Parking Authority during the term of the agreement to cover the costs of addressing the encumbrances described above and the County’s maintenance responsibilities for the property.

Agreements to Eliminate Encumbrances Affecting the Property Title

The account below highlights the terms of the attached agreements negotiated to eliminate the specified Coconut Grove Playhouse property title encumbrances in order to satisfy the conditions set forth in the State’s March 1, 2013, surplus property notice. It should be reiterated that pursuant to the Agreement between the County and FIU, approved by the Board on October 1, 2013, the County has the sole responsibility to enter into these agreements to eliminate the encumbrances affecting the title of the Coconut Grove Playhouse.

* City of Miami
Pursuant to the Memorandum of Understanding (“MOU”) between the City of Miami and the County, the City’s conditions for eliminating their lien encumbrances on the Playhouse property included as a prerequisite that the County enter into an agreement with the Miami Parking Authority to manage the surface parking lot of the Coconut Grove Playhouse. On November 19, 2013, the City’s Code Enforcement Board entered a conditional order eliminating the City’s lien encumbrances on the Playhouse subject to the County’s executing an acceptable agreement with the Miami Parking Authority. The attached MOU with the City and the Management and Operating Agreement with the Miami Parking Authority accomplish this requirement. It should be noted that these agreements have been reviewed by the State and considered to be within the County’s authority to execute under the terms of the Playhouse Lease Agreement with the State. The Board of the Miami Parking Authority approved the Management and Operating Agreement on December 16, 2013.

The following highlight the terms of the Management and Operating Agreement between Miami-Dade County and the Miami Parking Authority:
* The term is for five years and seven months, with two renewable five year periods (section 2.1);
* The County and the Miami Parking Authority must approve a detailed operating budget annually, setting forth revenues, expenses and parking rates (section 3.5);
* The Playhouse parking lot operating expenses of the Miami Parking Authority are covered by parking revenue and the Miami Parking Authority receives an additional 5% management fee with an incentive fee effective in FY 2015-2016 (Exhibit A);
* The County receives, during the first seven months of the agreement, a minimum monthly payment of $4,000.00, and during the entire term of the agreement, any revenues in excess of expenses, and of those paid to the Miami Parking Authority (section 3.5.3); and
* The County will provide the Miami Parking Authority with the first option to present a development plan to the County for any future development of the Playhouse parking lot, subject to any review and approval required by the Board and by the State pursuant to the terms of the Playhouse Lease Agreement (Article IX).

* Aries Development Group, LLC, 3247 Charles, LLC, GH Mortgage, LLC
Highlights of the terms of the anticipated settlement agreement between Aries Development Group, LLC, 3247 Charles, LLC, GH Mortgage, LLC, The Coconut Grove Playhouse, Inc., Coconut Grove Playhouse LLC, and Miami-Dade County include:
* Aries and Charles will execute all necessary documents to reflect that their encumbrances that appear as exceptions in the title work on the Playhouse property have been released and discharged;
* Aries and Charles will voluntarily dismiss the lawsuit pending against the County and the Playhouse;
* The County will pay Aries $15,000; and
* The Coconut Grove Playhouse LLC will voluntarily relinquish any claim of ownership of the Bike Shop property in favor of GH Mortgage.

As we have reported, the Bicycle Shop property did not revert to the State and certain assignments of leases, rents and profits from the Playhouse property are referenced in the title report as purporting to secure the mortgage on the Bicycle Shop property between GH Mortgage, LLC and the Coconut Grove Playhouse, LLC. This settlement will eliminate these references. Such settlement shall be memorialized to incorporate the above key terms, accordingly.

* Final Settlements for Other Encumbrances and Judgments
The following highlight the work accomplished to resolve the other encumbrances that appear in the title work that the State requires to be addressed:
* The liens, amounting to $12,296.68 owed to Florida Department of Revenue have been waived.
* Best Wholesale Office Products Corp. has agreed to accept $500.00 to settle its judgment amounting to approximately $3,387.28; such settlement shall be finalized and memorialized accordingly.

It is important to acknowledge the cooperation of these private and public sector entities and the commitment to the success of the Playhouse project that these settlements represent.

* Pending Encumbrances and Settlements
* Premier Printing Solution, Inc. has a judgment amounting to approximately $58,412.59 and has not yet agreed to a settlement offer.
* There are unpaid certificates amounting to approximately $34,323.68 for special assessments by Coconut Grove Business Improvement District for the years 2010, 2011, 2012 and 2013. The City of Miami and representatives of the Business Improvement District are considering reductions in the amounts owed.

Given the strict time constraints involved in resolving all encumbrances by January 15, 2014, it is recommended that the Mayor be given the authority to finalize settlements for each of these pending encumbrances, subject to the budgetary limitations stipulated herein and/or to take any other appropriate legal action to removing such encumbrances, including, but not limited to, filing lawsuits in courts of competent jurisdiction and seeking intervention by the State in such lawsuits, and seeking extensions and/or waivers from the State as to such encumbrances. For similar timing reasons, the Resolution also allows the Mayor to waive his veto.

Other Options Being Pursued Concurrently to Secure the Playhouse Property
As reported to the Board, the Florida Cabinet, at its August 20, 2013 meeting, approved moving ahead with concurrent work on other potential solutions regarding the Playhouse property: a property exchange and/or fee simple conveyance of the property to the County. We are continuing to explore these options in cooperation with the Florida Department of Environmental Protection staff. It is important to emphasize that regardless of the outcome of the work to satisfy the requirements associated with the Playhouse Lease Agreement, the County, FIU and the State remain committed to pursuing the outright ownership of the Playhouse property by the. The Board will be provided with updates on our progress with this work.
In early 2014, we will provide the Board with an update on the disposition of these agreements and payments to eliminate the property title encumbrances on the Coconut Grove Playhouse and the next steps for our goal of returning great regional theater to this site.

Attachments:
Exhibit A - The Management and Operating Agreement between Miami-Dade County and the City of Miami Department of Off-Street Parking a/k/a Miami Parking Authority
Exhibit B - Memorandum of Understanding between Miami-Dade County and the City of Miami
Exhibit C - Conditional Mitigation and Partial Release of Lien Order approved by the City of Miami Code Enforcement Board on November 19, 2013
Exhibit D - State of Florida March 1, 2013 Surplus Property Notice

_________________________
Lisa M. Martinez
Senior Advisor, Office of the Mayor



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