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12.01.2010 Special Meeting SPECIAL CITY COUNCIL MINUTES DEC. 1 2010 CITY OF MIAMI GARDENS PECIAL CITY COUNCIL MINUTES DECEMBER 1, 2010 (A) CALL TO ORDER/ROLL CALL The City Council for the City of Miami Gardens, Florida, met in Special Session on Wednesday, December 1, 2010, beginning at 5:15 p.m., in the City Council Chambers, 1515 NW 167th Street, Building 5, Suite 200, Miami Gardens,Florida. The following members of the City Council were present: Mayor Shirley Gibson, Vice Mayor Aaron Campbell Jr., and Council members Lisa C. Davis, Andre Williams, Felicia Robinson, Sharon Pritchett and Oliver G. Gilbert III. Also in attendance were: City Manager Dr. Danny O. Crew, City Attorney Sonja K. Dickens and City Clerk Ronetta Taylor. Mayor Gibson explained when the Special City Council meeting was called Item E-1 was not included. She asked for a motion to add this item to the Official Agenda. Motion offered by Councilman Williams, seconded by Vice Mayor Campbell to add item E-1 to the official agenda. This motion passed and carried by a 7-0 voice vote. (B) INVOCATION: Councilman Gilbert delivered the Invocation. (C) PLEDGE OF ALLEGIANCE: Recited in unison. Councilman Gilbert opined that the contract item should be dealt with first. If that item fails there is no need to hear the presentation. Motion offered by Councilman Gilbert, seconded by Mayor Gibson to move Item F-1 forward on the agenda to be consider before D-1. This motion passed and carried by a 7-0 voice vote. Item F-1 was considered first, however the discussion is reflected under that item on the agenda. Motion offered by Councilman Williams, seconded by Councilman Gilbert to adopt the official agenda with the necessary changes. This motion passed and carried by a 7-0 voice vote. (D) PRESENTATION D-1) Architectural Renderings of Proposed City Hall/Police Department Complex Jim Berman, with the URS Architectural Team presented conceptual drawings of the proposed City Hall/Police Department Complex. A copy of those drawings is attached hereto as Special City Council Minutes December 1, 2010 Page 1 SPECIAL CITY COUNCIL MINUTES DEC. 1 2010 Exhibit"A", and made a part of the record. Councilman Gilbert made reference to the office space and asked how much room will this City Hall complex accommodate for growth. Manager Crew in response to Councilman Gilbert's question said the space is designed for at least ten years of growth. He said the City will not be adding many more employees because the basic functions are all covered. The other alternative, if more space is needed eventually, another building could be built on the property where the Mint is located. Vice Mayor Campbell asked whether any consideration was given to housing a 911 Emergency System. Manager Crew replied that this is included in the design. The old police station will also function as a backup for the 911 Emergency System. Mayor Gibson announced a Town Hall meeting will be scheduled the first of the year so that residents can review the conceptual drawings of the City Hall/Police Department Complex, and ask questions. (E) ORDINANCE(S)MRST READING E-1) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF MIAMI GARDENS, FLORIDA, AUTHORIZING THE BORROWING OF THREE MILLION THREE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($3,375,000); AUTHORIZING THE ISSUANCE OF CITY OF MIAMI GARDENS, FLORIDA CAPITAL IMPROVEMENT REVENUE BONDS OR THE DELIVERY OF A LEASE OBLIGATION NOT TO EXCEED THREE MILLION THREE HUNDRED SEVENTY- FIVE THOUSAND DOLLARS ($3,375,000); PROVIDING FOR SUPPLEMENTAL RESOLUTION SETTING FORTH THE DETAILS OF SAID BONDS OR LEASE OBLIGATION; PROVIDING FOR ADOPTION OF REPRESENTATIONS; REPEALING ALL ORDINANCES IN CONFLICT; PROVIDING A SEVERABILITY CLAUSE; PROVIDING AN EFFECTIVE DATE. (SPONSORED BY THE CITY MANAGER) Manager Crew explained ATS (American Traffic Solutions) brought a proposal to the City, which staff is bringing to the Council for consideration. Robert Holland, 5955 NE 4th Court, Miami, Florida, appeared before the Council as representative for ATS. American Traffic Solutions put forward a proposal to the City in hopes of saving the City some additional money. He opined the debt being proposed is not really a bad debt to the City. Under the current contract the City pays ATS $7,555.00 per camera. Currently Special City Council Minutes December 1, 2010 Page 2 SPECIAL CITY COUNCIL MINUTES DEC. 1 2010 there are a total of 25 cameras under contract, for 12 months. This sums up to 2.5 Million Dollars being paid annually to ATS. Over a five year period this totals over 11 Million Dollars. The contract has a clause that states if the revenues drop below 40%,the City can come back and renegotiate the contract. This proposal is a modified contract that actually produces more savings in money for the city. ATS will sell the camera equipment to the City,then lease it back from the City, and will pay all the cost associated with the transaction. In addition, there is will be an additional saving in the amount of$600,000 over the course of this agreement. ATS is willing to reduce the 40%clause to 20%. Attorney Holland said there would be no liability on the City because ATS will take out a Surety Bond. He solicited the Council's support in passing this item on first reading. Motion offered by Vice Mayor Campbell, seconded by Councilwoman Davis to adopt this item on first reading. Councilwoman Pritchett for clarification purposes said this is a bond, which is a loan, and all loans have to be paid back,with interest. Attorney Holland said that is correct. All the obligations will be assumed by ATS, and if for any reason they disappeared overnight,the City is covered by a Surety Bond. Councilman Williams shared that he has spoken at length with Attorney Holland about this and expressed his concerns. He shared that he is fiscally conservative about this and is concerned about the city incurring additional debt. However, as Attorney Holland has said he would be providing additional information. Therefore, out of respect, for that point, he would be voting for this item on first reading. However, there is no guarantee he will vote for this item on the second reading. At the conclusion of this discussion, the motion to adopt on first reading passed and carried by a 4-3 vote. Councilwoman Davis: Yes Councilman Gilbert: No Councilwoman Pritchett: No Councilwoman Robinson: Yes Councilman Williams: Yes Vice Mayor Campbell: Yes Mayor Gibson: No (F) RESOLUTION(S) RESOLUTION NO. 2010-195-1377 F-1) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MIAMI GARDENS, FLORIDA AUTHORIZING THE CITY MANAGER AND CITY CLERK TO EXECUTE AND ATTEST Special City Council Minutes December 1, 2010 Page 3 SPECIAL CITY COUNCIL MINUTES DEC. 1 2010 RESPECTIVELY, THAT CERTAIN DEVELOPMENT SERVICES AGREEMENT WITH MIAMI GARDENS TOWN CENTER LLC, AND LT ENTERPRISES, LLC; PROVIDING FOR THE ADOPTION OF REPRESENTATIONS; PROVIDING AN EFFECTIVE DATE. (SPONSORED BY THE CITY MANAGER) Please note, discussion on this item took place prior to the presentation by the architects. Kevin Lawler, the City's Real Estate Consultant appeared before the City Council to expound on the Development Services Agreement. He recounted the relevant history involved with bringing this item to its present joint venture format. He said this is not a joint venture in a legal sense, but is a joint venture in name and affiliation. The two entities in this agreement are LT Enterprises, with Ted Lucas as the Manager and Miami Gardens Town Center with Kent Gregory as the Manager. The roles and responsibilities of these two entities are very distinct. LT Enterprises' responsibility is to acquire the adjacent shopping center; to master plan for compatible/coordinated development with what is happening with the City Hall property; and deliver a phase one development, a 40,000 square foot mixed-use complex involving entertainment and banquet facility. Miami Gardens Town Center's responsibility is to provide development services: pre-construction services (includes permitting, scheduling and construction contract); super construction manager (managing/oversight of construction); and commissioning/closeout. Proposed vs. Final The original proposal called for 6 months to start Phase 1 of private development. The agreement provides for 9 months to start Phase 1, with 3 thirty day extensions for good cause. The original proposal stated Development fees: $2.5 Million plus 200,000 performance bonus; fee front loaded. The agreement provides that development fees: $2.5 Million; fees weighted by phase; $1 Million of the fees tied to start of private development. The original proposal stated development services would be highly generalized. The contract provides that development services would be specific and in three (3) phases. The proposal stated total GC fees at 13.85 — 16.85% plus incentive payment of $250,000 for on time completion. The agreement provides that total GC fees at 13% plus incentive payment of$125,000 for on time completion and LEED protocol compliance. The proposal provided that Guaranteed Maximum Price (GMP) set at 50% CDs and 5% Contingency, whereas the agreement provides that GMP is set at "permit set" CDs and 3,25% Contingency. The proposal provided for CRA and Right of 1St Refusal to purchase Cornerstone land as added "inducement"; whereas the contract provides for no CRA and no Cornerstone land as added"inducements". The Development Services for Miami Gardens Town Center, LLC is to be performed in three phases: Reconstruction; construction and commissioning/close out. Fees to be earned include a base fee of $1.5 Million; preconstruction fee of 35; commissioning/close-out 10%. Incentive Fee is $1.0 Million (in one-thirds increments); a 10% retention of fees for services delivered; Miami Gardens Town Center LLC would be the Conduit for construction contract. One of the responsibilities of Miami Gardens Town Center LLC is during pre-construction is to work with the City of Miami Gardens' Procurement Division to pre-identify and pre-quality Special City Council Minutes December 1, 2010 Page 4 SPECIAL CITY COUNCIL MINUTES DEC. 1 2010 minorities for the construction contract. The Private Development (LT Enterprises) is responsible for a multi-phased development (10 acres plus). The first phase will consist of a mixed-use commercial with performing arts component(40,000 square ft,plus). Property closing should take place by January 15, 2011, as a condition of the deal activation and any payments for Development Services. One Million Dollar "incentive payment" for Phase 1, will be in one third increments: 1) Commencement; 2) shell; and 3) completion. Additional incentives includes: Special Assessment District; Shared Parking(opportunity to negotiate) and "preferred hotel location". The Construction Contract would run through Miami Gardens Town Center, LLC; City approval of contract. The contract would include all the City's standard terms. The Guaranteed Maximum Price (GMP) (at CD permit set) with 3.25% "Contingency"; Fully bonded; the time period for construction is 16-19 months, subject to design and site staging; final schedule set at end of DD; Pre-construction services cap at $100,000; Prime fee parameters set for General conditions, overhead and profit. Substantial GC (General Construction) contract business terms to be negotiated via MGTC (Miami Gardens Town Center, LLC. Potential Advantages: Leverage - Modest direct public investment for substantial private investment; Private resources/expertise to manage the process. Timing — Private development faster than might otherwise occur; accelerated timing of delivery for the City Hall Complex. Civic — Create public-private anchor for Town Center; realize a Performing Arts Center without City outlays. The At Risk Considerations are: Land Purchase/Closing — Due diligence underway; January 15, 2011 closing: Development Capability of LTE — Untested; will need additional capability. Construction Contract — Remaining terms to be chiefly negotiated by MGTC; less than an arm's length relationship. Alignment of Interest — Payment runs to MGTC; perform to LTE; MGTC has contractor "bias", not Owner "bias". Management Style & Team Chemistry — Unknown; no prior local or team experience; experience is for"own account"built-to-suit. The Risk Management/Mitigation is: Land Purchase/Closing — If not closed by outside date, the Agreement expires; no payment of fees; disruptive to the schedule; but recoverable. Development Capability of LTE — Site plan approval will provide first indication; no payments until construction commences. Construction Contract— final approval of form and terms by the City; 65 days to finalize; if not, City may opt out. Alignment of Interest — formally "joined" under the Agreement; City approvals required on key issues. Management Style & Team Chemistry— scheduling and staffing plan equal first test; Phase one; if problematic, then course correction. Mr. Lawler said as the Council think about the decisions and considerations he provided four areas for consideration: 1) Performance vs. Promise; 2) Sufficiency of Risk Protections; 3) Short Term Cost vs. Long Term Return; and 4) Alternatives and fallback approaches. Councilman Gilbert inquired about the cost associated with Phase One, private Special City Council Minutes December 1, 2010 Page 5 SPECIAL CITY COUNCIL MINUTES DEC. 1 2010 development. Mr. Lawler in response to Councilman Gilbert's question said after acquisitioning the property the cost would probably be in the range of 12-15 Million Dollars. Councilman Gilbert inquired about the process if the project is not built. Mr. Lawler said if the contractors do not perform, there are safe guards built into the contract. Councilman Gilbert commented, if LTE does not develop the shopping center area, City Hall will open up to the back of a dilapidated property. Mr. Lawler said he did not think it would be that extreme. He said there will be a lot of screening and landscaping, and would not suggest a bare bone view of a particular unattractive access to the south. Councilman Williams stated that he takes the stewardship of taxpayers' dollars very serious, therefore he has some concerns. This is a public/private partnership and certainly the City can bring things to the table and partner with someone who can bring value to the Town Hall Center. He shared that Mr. Lawler had provided a memorandum of LTE's principals' financial standing. He said what was most troubling to him was that LTE's principals received a letter of financial support from a financial institution. The letter was not a hard commitment letter. The letter expresses confidence in LTE's principals' ability to secure funding for this private development. Mr. Lawler opined that it is not uncommon at this stage to have any more than what is already required. These two individuals have the capacity from personal assets to guarantee a debt financing. He said he could not answer whether they will be willing to do that. Councilman Williams made reference to a memorandum submitted by Mr. Lawler dated November 2009, where he talked about the strengths and weaknesses of the proposal. He shared that one of the weaknesses mentioned in that memorandum related to financing. He said he did not know whether that financial situation has changed from 2009 to 2010. Mr. Lawler said when that memorandum was written there was no specificity with regard to a private development. At this point the City is protected because if they do not get funded, they do not get paid. This is a part of the alternatives and fallback. He reiterated there are adequate provisions in this agreement that would allow the City to terminate it, if they do not perform. Councilman Williams shared he has had reservations from the very beginning. He said he was not going to vote in support of the Development Services Agreement. He asked if the GMP (Guaranteed Maximum Price)was provided for in the Development Services Agreement. Special City Council Minutes December 1, 2010 Page 6 SPECIAL CITY COUNCIL MINUTES DEC. 1 2010 Mr. Lawler said the GMP is a part of the construction contract. The construction contract is to be negotiated. He said the Council could ask the Contractor to give a GMP,today. Councilman Williams opined the City could not be giving a million dollar incentive in a public/private partnership. Mr. Lawler said he would agree with Councilman Williams and recounted when the first agreement was negotiated the fee was 3.5 Million Dollars, plus, and there was no linkage between the pre-payment side for services and the private side. Councilwoman Pritchett thanked Mr. Lawler for his report. She said what concerns her and from the comments she has received from residents is the fact that the City has not heard from a financial person. She said understanding that Mr. Lawler does real estate financing, but when she says financial person she is referring to a certified public accountant/financial advisor. She placed emphasis on the importance of hearing from a financial "guru" so that the Council can hear from both sides of the equation and be fully informed and completed empowered with information. Mr. Lawler shared that he has thirty years of experience in partnering with major financial services banks. He further shared that he has advised other municipalities. In this particular case the City is buying a bundle of services and also collateral development. He said the City Council wanted a financial advisor to come and advise on the viability of redeveloping this shopping center that is certainly something that could be prudent. However, the City will not be involved in that. That is not a city activity. The City is not investing in the shopping center because it does not have any capital in the shopping center. Councilwoman Pritchett asked whether the Miami Gardens Leasing Corp was a part of what is being discussed tonight. Mr. Lawler said this(shopping center) does not involve City land. Attorney Dickens said the City is not turning over any of its property to the developers. This deal only involves the development of the property that the City owns and their part of the deal is the shopping center, which the City does not own. The 55 Million Dollars is going in to the development of City Hall, and not to the development of private property. Councilwoman Pritchett conveyed understanding of that fact. She said it is still a bond and bonds have to be paid back, with interest. She said this is a concern for her. She stated when residents ask her about this she wants to be able to share the information with them. Mayor Gibson shared when the City went out and floated these bonds it was to build City Hall, and the police department. She said if the City decided not to enter into agreement with this particular public/private venture, it could still take the funds and build city hall, utilizing another developer. Special City Council Minutes December 1, 2010 Page 7 SPECIAL CITY COUNCIL MINUTES DEC. 1 2010 Mr. Lawler said if the City decided to not enter into contact with this developer it could hire a construction manager to issue an RFP for a construction bid to build a city hall. Mayor Gibson placed emphasis on the importance of developing the property south of the proposed city hall complex site. She said the north side of 183`d street is being developed, however it is really a challenge to get a developer to come in to invest and develop property south of 183`d Street, including the flea market area. Mr. Lawler said what the City is doing here is leveraging its investment. Councilman Gilbert shared this project is about using our City Hall to be a stimulus to the development of a Town Center. He emphasized the importance of developing that southern portion. He asked what is the next step in this development agreement. Mr. Lawler said there are two sides. On the MGTC side they need to communicate with the architect in terms of scheduling. On the LTE side the clock is ticking on their acquisition. The City will know by mid January. LTE has to deliver a site plan that integrates what the City is doing with public safety and the design sense. How these two properties come together was discussed sometime ago. If they cannot deliver on that level he opined the City will need to terminate the project. He said the City has the protection to do that. Mayor Gibson said in Mr. Lawler's presentations there were numerous provisions in this contract that would allow the City to terminate this contract, if the entities were not performing. Vice Mayor Campbell asked how much is it costing the City to lease the property the City government is currently housed. Manager Crew in response to Vice Mayor Campbell's inquiry said approximately $700,000.00 annually. Vice Mayor Campbell asked in thirty years how much would the City have paid to lease this property. Manager Crew in response to Vice Mayor Campbell said approximately 22 Million Dollars. Vice Mayor Campbell voiced support of this item. He said in his view, the City is going to spend money regardless. He said it makes sense to own it rather than to continue leasing. Motion offered by Vice Mayor Campbell, seconded by Councilman Gilbert to adopt this item. There being no further discussion,this motion passed and carried by a 5-2 vote. Vice Mayor Campbell: Yes Special City Council Minutes December 1, 2010 Page 8 SPECIAL CITY COUNCIL MINUTES DEC. 1 2010 Councilwoman Davis: Yes Councilman Gilbert: Yes Councilwoman Pritchett: No Councilwoman Robinson: Yes Councilman Williams: No Mayor Gibson: Yes (G) ADJOURNMENT There being no further discussion to come before this Body and upon a motion being duly made,the meeting adjourned at 7:35 p.m. Attest: Ronetta Taylor, MC, City Clerk Special City Council Minutes December 1, 2010 Page 9