RDA-2. - Approve Rda Lease with Miami-dade Tax Collector

Redevelopment Agency Items (RDA) 2

COMMISSION MEMORANDUM

10:01 a.m. Public Hearing

RECOMMENDATION

The Administration recommends the Chair and Board of Directors of the Miami Beach Redevelopment Agency accept the recommendation from the Finance and Economic Resiliency Committee, approving a new Lease with the Miami-Dade County Tax Collector’s Office.

BACKGROUND/HISTORY

The Miami Beach Redevelopment Agency (the RDA (Landlord) is the owner of a facility containing a Municipal parking garage (“Garage”) and certain retail spaces (“Retail Space”) bounded by Washington Avenue and Collins Avenue in the proximity of 16 th Street (the “Facility”), which includes approximately 3,955 square feet of ground floor retail space. Following the lease expiration of the previous Tenant (Mr. R Sports) in 2022, the premises remained vacant. The City, on behalf of the RDA, began marketing the space for lease upon its vacancy. The City also requested a Market Rent Analysis from CBRE for comparable spaces. As per their analysis, the market rent for comparable space is $54.00 per square foot, on a triple net (NNN) basis.

Initially, the Landlord utilized CBRE's services to secure prospective tenants. However, after not receiving any viable leads, the Landlord decided to market the space under its own program. In 2023, leasing efforts were halted, pending the final decision of the South Shore Community Center, in the event these vacancies would be needed to relocate Tenants to this property. Recently, the Landlord started negotiations with Miami-Dade County Tax Collector’s Office. Attached hereto as Exhibit A is the Letter of Intent (LOI), containing the below basic terms and conditions of the proposal for use of a portion of the Retail Space.

Landlord:

Miami Beach Redevelopment Agency (RDA)

Tenant:

Miami-Dade County Tax Collector’s Office

Premises:

Approximately 3,955 square feet located at 100 16 Street, Unit 1-5, Miami Beach, FL 33139.

Term:

Nine (9) years and three hundred and sixty-four (364) days.

Lease Commencement:

Lease Commencement shall be upon mutual execution of a Lease Agreement.

Rent Commencement:

Rent Commencement Date shall be the earlier of:

(a) Tenant opening for business with all required permits issued by local authorities; or (b) Three hundred sixty-five (365) days after Delivery Date, subject to Landlords Delays

Base Rental Rate:

$54.00 per rentable square foot, triple net (NNN), plus applicable sales tax.

Annual Rent Increases:

Three percent (3%) annually, commencing January 1, 2027.

Rent Abatement:

Base Rent shall be abated (“Abatement”) for the first ten (10) months after Rent Commencement Date – subject to Landlord’s delays.

NNN Charges:

The Tenant shall be responsible to pay its proportionate share of the actual expenses necessary to operate the Premises, including but not limited to insurance, common area maintenance, etc. For this Lease, the NNN charges for Year 1 of the Lease Term shall be $14.00 per square foot plus applicable sales tax, subject to true-up at the end of Year 1 based upon Tenant’s actual proportionate share of operating expenses for Year 1. However, the controllable portion of building’s operating expenses shall not increase more than 5% in any calendar year during the Lease Term.

Use:

Tenant shall use the Premises as a Miami-Dade County Tax Collector’s office, serving as an agent for the Florida Department of Highway Safety & Motor Vehicles. Services

will include vehicle registration renewals, tax payments, business tax processing, electronic title management, specialty license plate issuance, and driver license renewals, or as otherwise detailed and approved in writing by the Landlord.

Delivery Conditions:

The Premises shall be delivered in "As-Is" condition.

Tenant’s Work:

To be determined (TBD)

Signage:

Subject to Landlord and City of Miami Beach signage criteria.

Right to Assign or Sublease:

To be further addressed in the Lease and with Landlord’s written consent.

Landlord Responsibilities:

Landlord will keep in good condition and in good working order, repair and replace ( as necessary) the following portions of the Retail Space and Premises:

i.

ii.

iii.

Tenant Responsibilities:

The structural components of the Retail Space, including structural, party and load-bearing walls, the roof, roof membrane, foundation and columns Maintain, repair or replace all of the Retail Space’s common areas All fire alarms and sprinklers, where applicable due to wear and tear, code requirements or annual inspections. Tenant is responsible for alterations, repairs, relocation of fixtures, etc. due to Tenant’s construction, redesign of the premises, negligence or other related causes imposed by Tenant

With the exception of base building, roof and foundation, which are the obligation of the Landlord, Tenant is responsible for maintaining and repairing (i) the portion of any pipes, lines, ducts, wires, or conduits contained within the Premises including, without limitation, interior plumbing and electrical installation, (ii) windows, plate glass, doors, any fixtures or appurtenances composed or glass (including, without limitation, interior and exterior washing of windows; (iii) Tenan’s sign; (iv) electrical systems; and (v) any heating or air conditioning equipment serving the Premises (“HVAC”), which shall include, without limitation, a preventive maintenance HVAC service contract no less than monthly.

Quiet Enjoyment:

Tenant shall have peaceful possession of the Premises provided all lease obligations are met.

Utility:

Tenant shall pay for its own utility usage, beginning upon Delivery Date.

Parking:

The City of Miami Beach Parking Department will provide up to forty (40) parking passes per month. Each parking pass will be priced at $132.00 per month and subject to an annual CPI adjustment.

Right To Early Occupancy:

Upon Delivery Date, Tenant shall be permitted access to the Premises for the purposes of planning, permitting, and performing tenant improvements. Tenant shall comply with all the terms and conditions of the Lease; however, Tenant shall have access to the Premises at no charge prior to the Rent Commencement Date for such purposes.

As contained in said Letter of Intent, the Base Rental Rate is $54.00 per square foot, with three percent (3%) annual increases. The Operating Expenses for the Anchor Shops building are estimated at $14.00 per square foot for 2025. The schedule of Base Rent and Operating Expenses due over the initial term are illustrated in the following chart:

ANALYSIS

The proposed lease includes a base rental rate of $54.00 per square foot, totaling approximately $213,570.00 annually in Year 1, with an annual increase of 3%. In addition, the estimated Operating Expenses are $14.00 per square foot, or approximately $55,370.00 annually, subject to increases based on market rates.

Over the nine-year lease term, the proposed rent structure is expected to generate an estimated $2,169,680.30 in base rent and $562,509.71 in operating expenses, for a total of approximately $2,732,190.00 in revenue for the City. Rent commencement will occur on the earlier of Tenant opening for business with all required permits issued by local authorities; or three hundred sixty- five (365) days after Delivery Date, subject to Landlords Delays. Additionally, the Tenant will receive a ten (10) month rent abatement period, allowing sufficient time for securing permits and completing the build-out of the space.

FISCAL IMPACT STATEMENT

N/A

Does this Ordinance require a Business Impact Estimate? (FOR ORDINANCES ONLY)

If applicable, the Business Impact Estimate (BIE) was published on: See BIE at: https://www.miamibeachfl.gov/city-hall/city-clerk/meeting-notices/

FINANCIAL INFORMATION

CONCLUSION

The Administration recommends that the Chair and Board of Directors of the Miami Beach Redevelopment Agency (RDA) hereby accept the recommendation of the City’s Finance and Economic Resiliency Committee and approve, in substantial form, a Lease Agreement between the RDA (Landlord) and Miami-Dade County Office of the Tax Collector (Tenant), for use of approximately 3,955 square feet of ground floor retail space at the Anchor Shops and Garage, located at 100 16th Street, Unit 1-5, for a period of nine (9) years and three hundred sixty-four (364) days; further, authorize the Executive Director to finalize the Lease Agreement; and further, authorize the Executive Director and Secretary to execute the final negotiated Lease Agreement. .

Applicable Area

South Beach

Was this Agenda Item initially requested by a lobbyist which, as defined in Code Sec. 2-481, includes a principal engaged in lobbying? No

If so, specify the name of lobbyist(s) and principal(s):

Department

Facilities and Fleet Management

Sponsor(s)

Commissioner Alex Fernandez

Co-sponsor(s)

Condensed Title

10:01 a.m. PH, New Lease with Miami-Dade County Tax Collector's Office. (Fernandez) FF

Previous Action (For City Clerk Use Only)