C7B - Amend Lease for Collins Park Facility

Resolutions - C7 B

COMMISSION MEMORANDUM

TITLE:

A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE TO AMEND THAT CERTAIN LEASE AGREEMENT DATED APRIL 18, 2022 BETWEEN THE CITY (LANDLORD) AND MIAMI NEW DRAMA, INC. (TENANT) FOR THE COLLINS PARK CULTURAL FACILITY, LOCATED IN THE CITY-OWNED COLLINS PARK GARAGE AT 340 23RD STREET; SAID AMENDMENT SUBSTANTIALLY IN THE FORM ATTACHED TO THE CITY COMMISSION MEMORANDUM ACCOMPANYING THIS RESOLUTION AND CONSISTENT WITH THE TERM SHEET APPROVED PURSUANT TO CITY COMMISSION RESOLUTION NO. 2025-33710, IN MATERIAL PART, TRANSFERRING RESPONSIBILITY FOR THE CONSTRUCTION OF THE IMPROVEMENTS FROM THE CITY TO TENANT; AND FURTHER, AUTHORIZING THE MAYOR AND CITY CLERK TO FINALIZE AND EXECUTE THE LEASE AMENDMENT IN A FORM APPROVED BY THE CITY ATTORNEY.

RECOMMENDATION

The Administration recommends that the Mayor and City Commission adopt a resolution to:

1. Accept the recommendation of the Finance and Economic Resiliency Committee (FERC) to approve Miami New Drama’s (MiND) request to modify the project development structure for the Collins Park Cultural Facility, specifically by transferring construction responsibilities from the City to MiND.

2. Approve an Amendment to the Lease Agreement with MiND, consistent with the Term Sheet approved under Resolution No. 2025-33710, to formalize the transfer of construction management responsibilities from the City to the Tenant.

3. Authorize the Mayor and City Clerk to finalize and execute the amended Lease Agreement, in a form approved by the City Attorney, with appropriate safeguards to protect the City’s interests.

BACKGROUND/HISTORY

Project Origin

In January 2021, the Mayor and City Commission, via Resolution No. 2021-31568, waived competitive bidding to accept an unsolicited proposal from MiND for approximately 16,000 square feet of ground floor space, including interior areas and an exterior terrace, at the City-owned Collins Park Garage (340 23rd Street). The proposal envisioned transforming the space into MiND’s primary performance venue and headquarters, featuring a 200-seat black box theater, rehearsal spaces, dressing rooms, administrative offices, and a standalone restaurant/café (the "Project").

In October 2021, the City Commission unanimously approved the initial Lease Agreement (Resolution No. 2021-31914), under which MiND would fund design and architectural services,

while the City would finance and manage construction, contingent on a Tenant Contribution equal to the total cost of all design and architectural services (then estimated at $250,000) and a $4.75 million City funding commitment (the Landlord Contribution). The Lease Agreement was executed in April 2022.

Funding Enhancements

In November 2022, Miami Beach voters approved the G.O. Bond for Arts and Culture (GOBAC) Program, increasing the City’s allocation for the Project to $7.67 million. This revised budget, reflecting updated cost estimates, was formally appropriated in July 2023 via Resolution No. 2023-32713, fulfilling the City's funding commitment under the Lease.

Proposed Change in Project Delivery

In August 2024, MiND proposed a significant change to the project delivery model, including:

• •

Transfer of full construction management responsibility from the City to the Tenant; and Increase in the City’s financial contribution to $7.604 million (aligned with the GOBAC allocation).

This proposal was referred to FERC in September 2024, and in November 2024, FERC recommended approval of the modifications, including conversion of the City funding to a GOBAC Program grant. On June 25, 2025, the City Commission unanimously adopted Resolution No. 2025-33710, accepting the FERC recommendation and approving the Term Sheet outlining these changes.

ANALYSIS

The Collins Park Cultural Facility is envisioned as a flagship activation that will enhance neighborhood cultural identity within the Collins Park Cultural District, offering year-round programming, educational initiatives, and community gathering spaces. The project has strong support from the Collins Park Neighborhood Association. While MiND has successfully programmed the Colony Theatre since 2016, overseeing capital construction introduces additional levels of operational and financial complexity.

From City-Managed to Tenant-Led Construction

Under the original Lease, the City retained full control over construction. MiND’s shifts this responsibility to the Tenant, with the City delivering the premises in its existing shell condition.

Potential Benefits:

• •

Reduced administrative burden for the City Potential for expedited project completion

Potential Risks:

• •

Reduced City oversight on budget, schedule, and construction quality Precedent-setting transfer of construction responsibilities for a City-owned cultural facility to a GOBAC grantee

Contractual Safeguards

To mitigate risks and ensure accountability, the City and MiND have incorporated the following safeguards for City protection:



Risk Mitigation: Standard construction contract protections via the Grant Agreement, including reimbursement protocols, documentation standards, and performance expectations



Design Oversight: City retains approval rights for design at 30%, 60%, 90%, and final design stages



Guaranteed Maximum Price (GMP): Required use of a Construction Manager at Risk (CMAR) model with a GMP Agreement, with cost containment and approval provisions. o The core principle of a GMP is a structure that shifts risk for cost overruns to the contractor and ensures the project owner will not pay more than the agreed-upon maximum



Value Engineering: 20% of the project budget identified by Tenant as discretionary for potential cost adjustments (if necessary)



Funding Controls: Each incremental documentation and City approval



Cross-Default Clause: Lease and Grant Agreement are contractually linked to enforce compliance, and Lease is contractually linked to Colony Theatre Management Agreement; therefore, a default under one agreement triggers a default under the other

The draft Lease Amendment is attached in substantial form as Exhibit A. The proposed resolution authorizes the Administration and the City Attorney’s Office to finalize the agreement with MiND, incorporating the City’s safeguards. These protections will also be mirrored and reinforced in the corresponding Grant Agreement, which is under consideration as companion item C7 C. A summary of the essential project terms is included in Exhibit B.

FISCAL IMPACT STATEMENT

Financial Overview:

• •

City Contribution: $7.604 million in GOBAC funds (already appropriated)



Tenant Contribution: All architectural and engineering (A&E) costs, estimated at approximately $250,000

Risk Mitigation:

• •

City Oversight: Final approval of key construction documents and disbursement drawdowns

• •

Contingency Reserves: City will retain 10% of grant funds during construction, in addition to a 5% contingency within the GMP Agreement

• •

Value Engineering: 20% of project budget identified as discretionary for potential cost adjustments

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

Should the City Commission accept the FERC recommendation and consent to delegate construction management responsibilities to Miami New Drama under the enhanced safeguards

grant disbursement requires detailed

outlined above, the Administration recommends authorizing execution of the Lease Amendment, subject to any additional direction by the City Commission. This recommended action will allow the City to advance a transformative cultural project while maintaining strong protections for its investment and long-term interests.

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? Yes

If so, specify the name of lobbyist(s) and principal(s): Nicholas Richberg, Miami New Drama

Department

Economic Development

Sponsor(s)

Co-sponsor(s)

Condensed Title

Accept Rec/Approve Lease Amendment w/ Miami New Drama, Collins Park Cultural Facility. ED

Previous Action (For City Clerk Use Only)