TITLE
RESOLUTION APPROVING, AFTER A PUBLIC HEARING, MARKETING PARTNERSHIP NAMING RIGHTS AGREEMENT (�AGREEMENT�) PURSUANT TO SECTION 2-2201 OF THE CODE OF MIAMI-DADE COUNTY, FLORIDA AND IMPLEMENTING ORDER 8-9 FOR SALE OF NAMING RIGHTS AND ASSOCIATED SPONSORSHIP RIGHTS TO WEST REALM SHIRES SERVICES INC. DBA FTX.US (�FTX�) TO RENAME THE COUNTY-OWNED ARENA (�ARENA�) LOCATED AT 601 BISCAYNE BLVD., MIAMI, FL 33132 THE �FTX ARENA� FOR A 19-YEAR TERM AND $135,000,000.00 IN PAYMENTS TO THE COUNTY; AUTHORIZING COUNTY MAYOR OR MAYOR�S DESIGNEE TO EXECUTE SAME AND EXERCISE CERTAIN PROVISIONS THEREIN; RATIFYING SCOPE OF WORK AGREEMENT AND AMENDMENTS THERETO WITH THE SUPERLATIVE GROUP, INC. (�SUPERLATIVE�) FOR CONSULTANT/BROKER SERVICES IN PURSUING AND SECURING A NAMING RIGHTS SPONSOR FOR THE ARENA; APPROVING AMENDMENT 4 TO SCOPE OF WORK AGREEMENT FOR PAYMENT OF COMMISSIONS TO SUPERLATIVE IN AN AMOUNT NOT TO EXCEED $5,238,000.00; DIRECTING COUNTY MAYOR OR MAYOR�S DESIGNEE TO ESTABLISH �ANTI-GUN VIOLENCE AND PROSPERITY INITIATIVES� TRUST FUND (�TRUST FUND�); ESTABLISHING BOARD POLICY THAT NAMING RIGHTS REVENUES RECEIVED UNDER AGREEMENT OR ANY OTHER CONTRACT FOR NAMING RIGHTS OF ARENA, NET OF EXPENSES, BE DEPOSITED INTO THE TRUST FUND TO BE USED, SUBJECT TO PRIOR BOARD APPROVAL, TOWARDS ANTI-GUN VIOLENCE AND PROSPERITY INITIATIVES; DIRECTING COUNTY MAYOR OR MAYOR�S DESIGNEE TO REPORT ON COUNTYWIDE SHOOTING STATISTICS WITHIN 60 DAYS AND PREPARE A PLAN FOR ANTI-GUN VIOLENCE AND PROSPERITY INITIATIVES; AND DIRECTING COUNTY MAYOR OR MAYOR�S DESIGNEE TO PREPARE THE MID-YEAR OR END-OF-YEAR BUDGET AMENDMENT AND ALL FUTURE PROPOSED BUDGETS TO BE CONSISTENT WITH THIS POLICY, TO PREPARE ANNUAL REPORTS ON COUNTYWIDE SHOOTING STATISTICS, AND USE OF TRUST FUNDS IN ACCORDANCE WITH APPROVED PLAN

BODY
WHEREAS, on July 15, 2014, the Board of County Commissioners (�Board�) adopted Ordinance 14-99 creating the Miami-Dade County Marketing Partnerships Program, creating section 2-2201 of the Code of Miami-Dade County, Florida (�County Code�); and

WHEREAS, section 2-2201(1)(b) of the County Code defines a �Marketing Partnership Agreement� as an agreement with a third party to provide a financial benefit to the County in the form of non-tax revenue and/or in-kind fees (products or services) in exchange for the access to the marketing commercial potential associated with select County assets for the use in strategies to promote, sell, or distribute a product or service by incorporating marketing privileges such as the acquisition of naming rights; and

WHEREAS, on October 7, 2014, the Board adopted Implementing Order (�IO�) 8-9 relating to the Marketing Partnership Program wherein the policy provides that the �intent of the marketing partnership is not to generate revenue to replace core funding for programs and services (County operations). Rather, marketing partnerships are developed as creative and imaginative approaches to generate and enhance non-tax revenue funds to complement or provide new funding for County operations (programs, services, etc.)�; and

WHEREAS, on June 3, 2014, the Board adopted Resolution No. R-499-14 approving amended and restated agreements with Basketball Properties, Ltd. (�BPL�) and the Miami Heat Limited Partnership for the development, improvement, operation, and management of the arena owned by Miami-Dade County located at 601 Biscayne Blvd., Miami, FL 33132 (the �Arena�) which included a County option to exercise control over the sale of Arena naming rights commencing on January 1, 2020 subject to naming rights payments to BPL in the amount of $2,000,000.00 per year; and

WHEREAS, on October 23, 2018, the Board adopted Resolution No. R-1079-18 to exercise the County�s option to sell, license, or otherwise grant the naming rights to the Arena; and

WHEREAS, the Board in Resolution No. R-1079-18 also authorized the County Mayor or County Mayor�s designee to retain the necessary consultants to pursue a naming rights sponsor for the Arena; and
WHEREAS, pursuant to such authority, in January 2019, the County Mayor or County Mayor�s designee retained The Superlative Group, Inc. (�Superlative�) and entered into Scope of Work Agreement (MPA-002-B) (the �Scope of Work Agreement�) to pursue a naming rights partnership for the Arena that maximizes revenue for the County which was subsequently amended to extend the term and modify certain other terms; and

WHEREAS, the Scope of Work Agreement and the first through third amendments are attached to this resolution as Exhibit �B�; and

WHEREAS, Miami-Dade County (the �County�), with the assistance of Superlative, negotiated a Naming Rights Agreement, attached to this resolution as Exhibit �A�, with West Realm Shires Services Inc. dba FTX.US (�FTX�) to rename the Arena the FTX Arena for $135,000,000.00 in payments from FTX to the County over a 19-year term; and

WHEREAS, the County Mayor negotiated a fourth amendment to the Scope of Work Agreement with Superlative, attached to this resolution as Exhibit �C�, to pay Superlative a commission of 3.88% of all revenues received by the County from the Naming Rights Agreement with FTX, up to an amount not to exceed $5,238,000.00, and to provide additional protection for the County for certain events of early termination of the Naming Rights Agreement; and

WHEREAS, following deductions for the annual $2,000,000.00 naming rights payment to BPL, the broker commission to Superlative, and a $25,000.00 public relations launch campaign to be funded by the County pursuant to the terms of the Naming Rights Agreement, as more specifically set forth in the accompanying memorandum, the County�s net revenues from the Naming Rights Agreement over the 19-year term are $89,737,000.00; and

WHEREAS, the Miami-Dade County Police Department (�MDPD�) reported that in 2020, there were over 1,100 shooting incidents countywide, with over 100 of those shootings resulting in a homicide; and

WHEREAS, the actual shootings throughout the County and homicides resulting from shootings were actually higher in 2020, as MDPD�s figures did not include shooting incidents and homicides within municipalities; and

WHEREAS, in 2020, MDPD impounded more than 2,000 guns, some of which were semi-automatic rifles; and

WHEREAS, in order to combat gun violence in the County, a multi-pronged approach is necessary, including but not limited to, increasing youth employment opportunities, social services, youth mentoring, gun violence education, and community policing initiatives, and providing better educational and economic opportunities; and

WHEREAS, this Board desires to use the $89,737,000.00 net revenues from the Naming Rights Agreement or funds received from any other naming rights agreements for the Arena through fiscal year 2039-2040 to establish an �Anti-Gun Violence and Prosperity Initiatives� trust fund to be used to fund initiatives, programs, activities and organizations that will combat gun violence and provide opportunities for economic prosperity throughout Miami-Dade County; and

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

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

Section 1. The above recitals are incorporated herein by reference and are approved.

Section 2. This Board approves the award, after a public hearing, of a Marketing Partnership Naming Rights Agreement (MPNR-1) (the �Naming Rights Agreement�), pursuant to section 2-2201 of the County Code and IO 8-9, for the County�s sale of naming rights and other associated sponsorship rights to FTX to rename the Arena the FTX Arena, in substantially the form attached hereto as Exhibit �A� and made a part hereof, for a 19-year term and $135,000,000.00 in payments to the County.

Section 3. This Board authorizes the County Mayor or County Mayor�s designee to execute the Naming Rights Agreement, provide those County approvals described in the Naming Rights Agreement (except such approvals that are explicitly required to be provided by the Board in the Naming Rights Agreement as Board approvals), exercise the cancellation/termination provisions in the Naming Rights Agreement (except any termination provision that is explicitly described in the Naming Rights Agreement as requiring Board approval), exercise all other remaining provisions contained in the Naming Rights Agreement (except for making material amendments to the Naming Rights Agreement).

Section 4. This Board ratifies the Scope of Work Agreement with Superlative and Amendments 1, 2 and 3 to the Scope of Work Agreement, in the forms attached hereto as Exhibit �B� and made a part hereof.

Section 5. This Board approves amendment 4 to the Scope of Work Agreement (�Amendment 4�), in substantially the form attached hereto as Exhibit �C�, and authorizes the County�s payment of commissions to Superlative for Superlative�s services in pursuing and securing a naming rights sponsor for the Arena up to an amount not to exceed $5,238,000.00 based on the payment terms in Amendment 4.

Section 6. This Board hereby: (a) directs the County Mayor or Mayor�s designee to establish the �Anti-Gun Violence and Prosperity Initiatives� trust fund (�Trust Fund�) to be used, subject to prior Board approval, to fund initiatives, programs, activities and organizations that will combat gun violence and provide opportunities for economic prosperity throughout Miami-Dade County; and (b) establishes Board policy that the net revenue received by the County from the Naming Rights Agreement or, to the extent that the Naming Rights Agreement is terminated prior to the expiration of the 19-year term, any other naming rights agreement for the Arena entered into by the County, after deduction for all associated expenses to be paid, as set forth in the accompanying memorandum, be deposited into the Trust Fund in fiscal year 2020-2021 and all subsequent fiscal years through fiscal year 2039-2040, and used and allocated as set forth in sections 7 and 8 below.

Section 7. The Trust Fund revenues shall be annually divided as follows: (1) 30% of the net revenue received each fiscal year (�set distribution�) shall be divided equally among all County Commission Districts and each of the County Commissioners may use and allocate, by prior Board resolution, their set distribution for initiatives, programs, activities and organizations that will combat gun violence and provide opportunities for economic prosperity throughout Miami-Dade County; and (2) 70% of the net revenue received each fiscal year (�equitable distribution�) shall be used and allocated in accordance with an annual plan developed by the County Mayor to combat gun violence and provide opportunities for economic prosperity throughout Miami-Dade County (�annual plan�) that shall be included in the County Mayor�s proposed budget and subject to prior Board approval. This Board directs the County Mayor or the County Mayor�s designee, as part of the development of the annual plan, to meet with each District Commissioner for input on the needs of their respective Commission Districts. This Board further directs the County Mayor or Mayor�s designee to ensure that the funding in the annual plan is divided equitably among all County Commission Districts based on the proportion of reported shooting homicides and other shooting incidents (contact and non-contact) that occurred over the previous calendar year in each County Commission District according to official crime statistics from MDPD and all municipal police departments, with such statistics to be updated on an annual basis.

Section 8. This Board directs the County Mayor or County Mayor�s designee to: (a) provide a written report to this Board within 60 days of the effective date of this resolution setting forth the official crime statistics from MDPD and all municipal police departments of reported shooting homicides and other shooting incidents (contact and non-contact) in calendar year 2020 in each County Commission District along with the proposed annual plan for fiscal year 2020-2021 and a calculation of the recommended allocation amongst the Commission Districts of the equitable distribution for fiscal year 2020-2021; (b) prepare the mid-year or the end-of-year budget amendment for fiscal year 2020-2021 to be consistent with the Board policy and directives set forth in this resolution; (c) prepare proposed budgets in subsequent fiscal years through fiscal year 2039-2040 to be consistent with the Board policy and directives set forth this resolution; and (d) prepare an annual report in conjunction with the release of the County Mayor�s proposed budget for each fiscal year that sets forth the official crime statistics from MDPD and all municipal police departments of reported shooting homicides and other shooting incidents (contact and non-contact) in the previous calendar year in each County Commission District along with the proposed annual plan for the following fiscal year and a calculation of the recommended allocation amongst the Commission Districts of the equitable distribution for the following fiscal year.

HEADER
Date:

To: Honorable Chairman Jose �Pepe� Diaz
and Members, Board of County Commissioners

From: Daniella Levine Cava
Mayor

Subject: Recommendation to Award a Marketing Partnerships Program Naming Rights Agreement for the County-owned Arena located at 601 Biscayne Boulevard, Miami, Florida

STAFF RECOMMENDATION
Recommendation
In accordance with the Miami-Dade County (County) Marketing Partnerships Program under section 2-2201 of the Code of Miami-Dade County, Florida (County Code) and Implementing Order (IO) 8-9, it is recommended that the Board of County Commissioners (Board) approve, after a public hearing, a Marketing Partnerships Naming Rights Agreement with West Realm Shires Services Inc. dba FTX.US (FTX) for the sale of the naming rights to the County-owned professional sports franchise facility arena located at 601 Biscayne Boulevard, Miami, Florida (Arena), which currently serves as the home of the Miami Heat, a National Basketball Association (NBA) team. As an affiliate of FTX Trading Ltd, FTX is expected to be a leading digital asset exchange for the purchase and trading of cryptocurrencies and other digital assets within the U.S. If approved by the Board, the new name of the Arena will be the FTX Arena. The Naming Rights Agreement between the County and FTX is shown as Exhibit A to the resolution before the Board.

The Naming Rights Agreement between FTX and the County is for a term of 19 years with resulting revenues to the County in the amount of $135 million over the term of the Naming Rights Agreement. Currently the County receives no revenues for its naming rights to the Arena. If approved, this transaction will provide significant revenues to the County from the Arena while imposing minimal obligations on the County for the provision of the signage, promotional activities, and other entitlements in the Naming Rights Agreement as Basketball Properties, Ltd. (BPL), an affiliate of the Miami Heat Limited Partnership and operator of the Arena pursuant to a Management Agreement with the County, will fulfill the obligations under the Naming Rights Agreement pursuant to the terms of the Management Agreement with the County and a separate facilitation agreement with FTX.

If the Resolution is approved by the Board as presented, the revenues received by the County from the Naming Rights Agreement or any other agreement for naming rights for the Arena, net of expenses, will be used by the County to support key initiatives to address the gun violence crisis and expand economic prosperity for residents. This is a historic opportunity to invest in building a healthier, safer future for Miami-Dade County and expanding programs to reduce gun violence � a crisis that accelerated significantly throughout the pandemic and impacts communities across Miami-Dade.

Under the proposed Resolution, 70% of the net revenues from the Naming Rights Agreement will be used by the administration to fund a plan to combat gun violence and provide economic prosperity throughout the County. The plan will be annually approved by the Board. All plan funding will be divided equitably among all County Commission districts based on the proportion of reported shooting homicides and other shooting incidents (contact and non-contact) that occurred over the previous calendar year in each district according to official crime statistics from Miami-Dade Police Department and all municipal police departments. The remaining 30% of the net revenues received from the Naming Rights Agreement will be distributed evenly across all County Commission districts and Commissioners may use and allocate, by prior Board resolution, their district�s funds for initiatives, programs, activities and organizations that will combat gun violence and provide opportunities for economic prosperity throughout Miami-Dade County.

We are also recommending the Board�s: (1) ratification of a Scope of Work Agreement, and three amendments thereto, between the County and the Superlative Group, Inc. (Superlative), pursuant to a Marketing Partnership Program Consultant/Broker Services Agreement (Broker Agreement) for work done in helping to secure a naming rights partner for the County; and (2) the Board�s approval of a fourth amendment to the Scope of Work Agreement in order to revise the fee payable to Superlative and set forth a schedule for payment thereof. The Scope of Work Agreement, as amended by the fourth amendment, will result in payments to Superlative in an amount not to exceed $5,238,000.00, payable during the first three contracts years of the Naming Rights Agreement.

Scope
The Arena is in District 3, but its impact is countywide. Pursuant to Rule 9.02 of the Board�s Rules of Procedures, the naming of County-owned facilities must be sponsored by the District Commissioner. Commissioner Keon Hardemon has agreed to sponsor this item.

Fiscal Impact
Under the terms of the proposed Naming Rights Agreement, FTX will pay the County $135,000,000 over a 19-year term. This should provide the County with $89,737,000 in revenues after all expenses are paid. The Board can appropriate these funds for any legal purpose as they are General Funds.
Expenses that will be paid from the $135,000,000 of proceeds include:
1) Up to $40.0 million in Annual Naming Rights Payments owed to BPL under the County�s existing Management Agreement with BPL, specifically consisting of:
a. $2.0 million naming rights payment due to BPL for the 12-month period of January 1, 2020 to December 31, 2020, which BPL agreed to defer until after the Board�s consideration of the Naming Rights Agreement with FTX; and
b. $2.0 million in annual naming rights payments due to BPL over the 19-year term ($38.0 million in total).
2) Up to $5,238,000 in broker commission to Superlative to be paid in three payments of $1,746,000, which represents a 3.88% broker commission on the transaction based on gross revenues to the County of $135 million.
3) Up to $25,000 for the launch campaign to include a public relations campaign and special event to celebrate the community and announce the partnership between the County and FTX.

The chart below shows the annual revenues and expenses of the proposed transaction over the 19-year term of the agreement.


If the Resolution is approved by the Board as presented, the net proceeds from this transaction will be distributed in conformance to Sections 6, 7 and 8 of the Resolution.

Delegated Authority
The authority of the County Mayor or County Mayor's designee to execute and implement this contract is consistent with those authorities granted under the Code of Miami-Dade County. Additional delegation of authorities requested for this contract are as follows:
� Authority to provide County approvals described in the Agreement except such approvals that are required to be provided by the Board or are explicitly described in the Agreement as Board approvals.
� Authority to exercise the cancellation/termination provisions in the Agreement except any termination provision that is explicitly described in the Agreement as requiring Board approval.
� Authority to exercise all other provisions and County rights contained in the Agreement except any provision or right that is explicitly reserved to the Board in the Agreement or under applicable law.

Background
Arena Agreements and Naming Rights
On April 29, 1997, the County entered into several agreements with the Team and BPL (Arena Agreements) which, among other things, assured that the Miami Heat will remain in Miami-Dade County for the original term of the agreements, had BPL serve as developer for the construction of arena which was financed privately by BPL, and made BPL responsible for the operations and maintenance of the Arena through a Management Agreement. Pursuant to the Arena Agreements, the County transferred the right to sell the naming rights to BPL, which right was subsequently sold to American Airlines, Inc, and resulted in naming the Arena the AmericanAirlines Arena. The naming rights agreement between BPL and American Airlines Inc. expired on December 31, 2019. In July 2014, the Board adopted Resolution No. R-499-14, which approved amended and restated Arena Agreements with BPL retroactively to July 1, 2013. The amended and restated Arena Agreements retained the County�s right to elect to sell the naming rights to the Arena for the period commencing on January 1, 2020 and ending June 30, 2030.

On October 23, 2018, this Board adopted Resolution No. R-1079-18 to exercise the County�s option to have the exclusive right to sell the naming rights of the Arena for a term commencing January 1, 2020 through June 30, 2030. The County already had the exclusive right to sell the naming rights to the Arena for the period commencing July 1, 2030 through June 30, 2040.
Once the County made this election, then the Management Agreement obligated BPL to assist the County in packaging, marketing, and selling the naming rights to the Arena, and to provide a naming rights package to include several amenities such as, prominent signage, advertising, a suite and various promotional services. Additionally, once the County made this election, the Management Agreement obligates the County to make an annual naming rights payment of $2 million to BPL while allowing the County to retain any remaining balance of any naming rights payments received.

The then Mayor�s recommendation memorandum that accompanied Resolution No. R-1079-18 advised the Board that �after conducting market research on the value of naming rights, the County has determined that a new naming rights agreement for the Arena is estimated to be, at a minimum, $6 million annually.� The figure of $6 million was a gross revenue number before consideration of expenses such as broker commissions and other costs.

Additionally, at the time Resolution No. R-1079-18 was considered by the Board, the Administration informed the Board that the usual timeframe for securing and negotiating a naming rights agreement was between 12 and 18 months, which would have ended in June 2020. However, as the Board knows, the pandemic was officially recognized in the U.S. in March of 2020, thereby causing all our communities, businesses, and lives to be disrupted. That is, one reason why we are presenting this item to you in 2021.

Agreement with Superlative
Pursuant to the Miami-Dade County Marketing Partnerships Program under section 2-2201 of the County Code (Ord. 14-99) and IO 8-9, the County approved a Consultant/Broker Services Agreement with Superlative, a Cleveland based sponsorship analytics and sales firm with extensive experience working with governmental partners to market and sell naming rights to various sports facilities, convention centers, transit lines, and other public assets. Under the Consultant/Broker Services Agreement, Superlative is responsible for providing valuation services for various County assets and consultant/broker services for implementation of the County�s Marketing Partnerships Program.


Following the Board approval of Resolution No. R-1079-18 to exercise the County�s option to sell, license, or otherwise grant the naming rights to the County�s Arena and to retain the necessary consultants to pursue a naming rights sponsor, the County Mayor�s designee executed a Scope of Work Agreement with Superlative dated January 18, 2019, to negotiate and secure a naming rights partnership that will maximize revenue for the County. Since that time, Superlative created a valuation report for the Arena, produced various marketing decks and sales materials, reached out to well over a hundred private companies, and conducted naming rights sales negotiations with several firms, including FTX.

Under the terms of the Scope of Work Agreement, Superlative was to serve as a broker on this transaction at no upfront cost to the County. The Scope of Work Agreement provides that Superlative would receive compensation from the County through a negotiated commission fee if it successfully brokered a naming rights deal for the County. The Scope of Work Agreement was amended three times, which dealt primarily with time extensions. The original broker fee to be paid, under the Scope of Work Agreement, was set at 5% of gross proceeds less $2.1 million dollars per year with no deduction if the naming rights sponsor terminated the naming rights agreement early. Superlative�s compensation under the original Scope of Work Agreement would have totaled $4,755,000.

Following the original Scope of Work Agreement, BPL sought to receive additional compensation for its role and responsibilities to service and facilitate the naming rights. Rather than the County paying any additional sums directly to BPL and further delay the approval of the Naming Rights Agreement as a result of negotiations between BPL and the County, the County, FTX and BPL restructured the proposed transaction to reduce the amount of naming rights revenues to be paid to the County by FTX and to instead have FTX contract with and pay BPL directly for the work. Superlative sought to be paid a commission based on the total sum of revenues to be paid by FTX for the naming rights (including the amounts to be paid directly by FTX to BPL) whereas the County sought to only pay Superlative a commission predicated on the naming rights revenues received by the County from FTX. The fourth amendment, which requires Board approved, is a negotiated compromise between Superlative and the County and includes a negotiated commission of 3.88% based on gross proceeds received by the County from FTX and some additional protection for the County to ensure that broker commission fees are not paid by the County in case of early termination of the naming rights agreement prior to third broker commission payment. Superlative�s compensation under the Scope of Work Agreement, as amended by the fourth amendment, totals $5,238,000. This amount is $467,000 less than Superlative would have sought to be paid had the County contracted directly with BPL for the costs of the facilitation and servicing work.

Naming Rights Agreement with FTX
Under the Naming Rights Agreement, FTX will pay the County a total gross amount of $135,000,000 over a 19-year term, with such amount to be paid annually based on a set schedule in varying amounts each year. In exchange, the County will provide certain entitlements to FTX to include, but not be limited to:

1) The County�s naming of the Arena as �FTX Arena�
2) The right to place exterior signage on the roof, at main entrances and gates on the Arena and garage.
3) The right to have Arena Media Mesh references for minimum 20 minutes per day.
4) The right to place interior signage throughout the Arena.
5) The right to place signage on Basketball Court and Center Hung Main Scoreboard
6) The right to place digital and social media posting, etc.

The detailed list of entitlements is reflected on Schedule A of the Naming Rights Agreement, which is attached to the resolution as Exhibit A.

Pursuant to the terms of the Management Agreement between the County and BPL and through an agreement between FTX and BPL, BPL will be responsible for working with FTX on signage and advertising installation and other promotional displays and reimbursement for any costs associated with facilitation work shall be incurred by BPL or paid by FTX directly to BPL pursuant to the agreement and negotiations between BPL and FTX. The County�s obligations under the Naming Rights Agreement are limited to:

1) Granting FTX the right to have the arena named the FTX Arena.
2) Granting FTX the entitlements reflected in Schedule A of the Naming Rights Agreement which are subject to FTX entering into a Naming Rights Facilitation Agreement with BPL, which provides such entitlements.
3) Participating and funding up to a $25,000 launch campaign to include a public relations campaign and special event to celebrate the community and announce the partnership between the County and FTX and two Social Media posts.
4) Providing the opportunity for FTX to place three (3) downtown wall murals for an up to sixty (60) day period during Contract Year 1 or Contract Year 2, to be designed, installed, and removed at FTX�s expense on certain County facilities in downtown Miami to the extent there is available unsold wall spots.
5) Throughout the term of the agreement, the County will explore opportunities with FTX for mutually acceptable charitable or educational partnerships with the flexibility to adjust focus throughout the term of the agreement in the following areas:
a. Technology and FinTech education
b. AIDS Program
c. Housing Programs
d. Financial wellness programs
e. Underprivileged community program
f. Animal services

The payment schedule for FTX�s payments to the County over the 19-year term of the Naming Rights Agreement averages $7.1 million per year, an amount that significantly exceeds the Administration�s prior minimum amount obtainable. The payment schedule is front-loaded with $14 million coming to the County upon ten days of execution of the Naming Rights Agreement.

The NBA has not yet approved FTX�s right to place its logo upon the basketball court�s flooring, which is a major benefit to FTX as it creates substantial name recognition during events at the Arena. If the NBA does not approve FTX�s right to place its logo on the basketball court�s flooring, then the Naming Rights Agreement provides FTX the right to terminate the agreement, with notice given to the County between the 61st and 70th day following execution of the Naming Rights Agreement. In the event of such termination by FTX, the County shall still be entitled to a pro rata payment of approximately $2.5 million retained by the County from the first year�s naming rights payment of $14 million.

With respect to the �FTX� name, filings with the United States Patent and Trademark Office show that FTX has filed a Notice of Cancellation seeking to cancel a trademark for �FTX� that is held by another entity that operates in an industry unrelated to digital asset exchanges for the purchase and trading of cryptocurrencies and other digital assets. At present, that proceeding remains on-going. However, FTX has represented as part of this Agreement that (a) it owns sufficient right, title and interest in and to the FTX name to grant the County with the right and license to use the FTX name for the Arena and (b) there is no pending or threatened litigation against FTX for the use of the �FTX� name for any of its business operations in the United States. Notwithstanding those representations, the County has also included specific indemnification provisions in this Agreement that would require FTX to bear all cost and expense for any legal action arising from a claim for trademark infringement.

About West Realm Shires Services Inc. (dba FTX-US)
West Realms Shires Services Inc. (dba FTX-US) is an affiliate of several companies that are controlled by Mr. Samuel Bankman-Fried, who is the majority shareholder and serves as CEO of FTX Trading LTD., a digital exchange company that operates internationally, but totally outside of the U.S. Mr. Bankman-Fried funded the creation of FTX to operate a digital exchange company in the U.S., under the banner of FTX-US. FTX Trading LTD. has presented compiled unaudited financial statements as of December 31, 2020 indicating an equity position of more than $42.7 million with approximately $27.3 million in cash and cash equivalents.

West Realms Shires Services Inc. (dba FTX-US) is a subsidiary of West Realm Shires Inc. and is controlled by Mr. Bankman-Fried (57.6%). In addition, two other FTX Trading Ltd employees have a combined 22.45% stake in the company and three passive minority owners make up a 20% ownership interest. FTX was incorporated on January 25, 2020 and is headquartered in Berkley, California. An audit report by an independent CPA indicates that FTX has $1,050,000 in cash which came from Mr. Bankman-Fried. The firm makes its money from transaction fees on its digital exchange.

Through a separate Counterpart and Guarantee incorporated as part of the Naming Rights Agreement as an exhibit, FTX Trading Ltd. is unconditionally guaranteeing all of FTX�s payment and performance obligations to the County.

Specifically, the owners of the related parties are:

West Realm Shires Services Inc. - owned 100% by West Realm Shires Inc.

West Realm Shires Inc.
� Samuel Bankman-Fried (57.6%)
� Zixiao (Gary) Wang (18.4%)
� Nishad Singh (4%)
� Changpeng Zhao (9.35%)
� Dinghua Xiao (5.33%)
� Samuel Wenjun Lim (5%)

FTX Trading Ltd
� Paper Bird Inc. (owned 100% by Sam Bankman-Fried) (79.2%)
� Binance Capital Management Co. Ltd (19.8%)
� Two other parties (1.0%)

The Inspector General conducted due diligence focusing on extensive searches of public data and records. No substantial concerns result from the review other than the firm has not been in business for long. The Inspector General�s Report is attached as Attachment 1. Additionally, Attachment 2 is an affidavit from FTX�s general counsel which states that �WEST REALM SHIRES INC., FTX TRADING LTD. and all affiliated companies or entities of any nature (together, the �Companies�) do not have any ownership, contracts or any other obligation with respect to any governmental agency of the People�s Republic of China, or any governmental agents or political persons, and that the Companies do not intend to ever have any such association.


Market Research
The proposed Naming Rights Agreement allows Miami-Dade County to receive a gross average annual payment of $7.1 M per year for 19 years. Most professional sport venues are owned by state and local entities, and it is rare for a governmental entity to retain any revenues from naming rights. We are only aware of two that do:

1) Guaranteed Rate Field is a baseball stadium and is the home of the Chicago White Sox. The stadium was built in 1991, and Guaranteed Rate bought the naming rights to the stadium in 2016. The term of their agreement is 13 years and the Illinois Sports Facility Authority, the state agency which serves as landlord, will receive a total of $4.7 million over the entire term, which equates to an average of $361,538 per year.

2) The SAP Center is an indoor arena that is the home to the San Jose Sharks, a professional Hockey team. The arena was built in 1993 and SAP, a software company, bought the naming rights in 2013. The term of the agreement is 10 years and SAP pays a flat annual fee of $3.25 million from which the City of San Jose receives $1.625 million per year.

For local comparison, it is our understanding that Broward County does not receive any proceeds for the naming rights of the BB&T Center.

Conclusion
The proposed FTX Arena transaction offers the County the opportunity to lockdown naming right on the Arena for a 19-year period at economically advantageous terms as compared to other facilities around the country and a significant improvement over the prior naming rights agreement. The net revenues to the County are somewhat front ended generating over $8.2 million this fiscal year alone that can be allocated by the Board for any legal purpose. I am pleased to make this recommendation to the Board.

Attachments



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Edward Marquez
Chief Financial Officer