Wednesday, July 26, 2006

Agreed Upon Business Terms - Beach Negotiations

Per the following resolution by the City Commisssion made July 19th (early morning):

"Give direction to staff to resume negotiations only if the Greater Bay Company can provide the information required in the RFP and the Letter of Intent no later than Thursday, July 20th at 5 p.m. in the City Manager’s office. Once received, negotiations to resume with a moderator preferably, the Planning and Zoning Board Chair that was made available in a public observance format beginning no later than Monday, July 24th at 10 a.m. and concluding Wednesday, July 26th at 12 noon and meet Thursday, July 27th at 4 p.m. at City Hall. Additional resources attorney to be provided and meet July 31st to vote or back to the Commission.”
Mr. Boyer confirmed that Greater Bay Group, LLC met the deadline and submitted an updated packet to the City Manager’s office at 4:30 p.m. Thursday afternoon, July 20th.
I presided as moderator of the negotiation sessions. This was on a completely volunteer basis and I played the functional role of keeping everyone on track and focused to the task at hand. It should be made clear that I was not part of the neogtiating team for the City and tried as best as I could to be a neutral entity. From time to time, I would ask for clarification or question items if they were inconsistent with what we heard before - in general, just running the meeting.

The City Commission will meet at 4 p.m. Thursday, July 27 at City Hall to consider these agreed upon business terms.
The following is the wording of the document that was initialed by both parties after our two day public observance negotiating session:



Greater Bay Construction


The following are general terms proposed between the City of Lake Worth, Florida (“City”) and Greater Bay Group LLC (“Developer”), that will need to be finalized and serve as a basis for agreement(s) (to include the AIA document A121 CMc – 2003 with associated 201 General Conditions modified as appropriate to accommodate the specifics of the Project as hereinafter defined) between the parties for design, permitting, construction and lease/management of the Beach & Casino project.

The Project is generally defined as the demolition of all site and building improvements (except the swimming pool tank and pier/restaurant) and reconstruction of driveways and parking, landscaping, underground utilities, beachside promenade/boardwalk, park improvements, parking platform, and “Casino” building consisting of approximately 40,000 square feet of net leasable space on two floors, plus an outdoor café of approximately 800 square feet and three retail bays adjacent to the lifeguard building of approximately 2,970 square feet (“Project”). The Project is illustrated by the conceptual site plan prepared by The Architectural Group and dated July 6, 2006 together with the conceptual floor plans prepared by The Architectural Group and dated July 20, 2006 together with the Developers phasing plan for construction dated July 21, 2006.

Management shall include marketing; leasing; customer and tenant relations; landscape maintenance; building maintenance; parking lot and lighting maintenance, repair and replacement of damaged, destroyed or worn out landscaping, building elements, parking and all site improvement; site security, etc.

Developer’s Obligations

  • Engage the services of design professionals and specialty consultants as needed to design the Project as conceptualized
  • Engage the services of a management company or companies to provide lease-up and on-going management services for the Project (subject to the City’s right to approve the management companies to be engaged by the Developer)
  • Secure all Project financing (except that which will be provided by the City through the County bond funds, the FRDAP Grant, and the Beach reserve fund) for which the Developer will be solely responsible and will be secured by an assignment of the Ground Lease between the City and Developer, and during the construction period an assignment of the Development Agreement between the City and Developer, assignment of contractor agreements, and assignment of tenant leases / rents
  • Complete design drawings sufficient for permitting and construction of the Project
  • Ensure that design and construction of the building and site improvements is of quality that will facilitate a life span of at least 50-years
  • Secure all permits and pay all agency fees necessary to construct the Project
  • Construct the Project in accordance with the conceptual plans, construction phasing plan (to allow for continued use and safety of the Project during construction) and schedule, and except for construction zones, ensure that the property is always open to the public for beach access, existing tenants in the “Casino” building can continue to do business, and the County’s park to the immediate north is always accessible to the public
  • Provide construction surety (payment and performance bond, AIA 312 Form acceptable) in an amount and type acceptable to the City, with the City as obligee.
  • Pay debt on any and all loans secured for Project financing, with the City having an ability, but not obligation, to participate along with the lender in curing any default by the Developer.
  • Conduct Project lease-up for the “Casino” building; collect tenant rents; manage and maintain all elements of the building and improvements around the building
  • Market concessions, enter into agreements with concessionaires, managed concessionaires and collect fees
    • A description of the parameters of concessions (including how this will be managed and who will manage) will be provided at a later date, and will include:
      • Where on-site they will be allowed
      • Type and number of concessions
      • Proposed fee structure
  • Engage the services of an events/festivals coordinator; manage regular events and festivals on the Project (while never precluding public access to the beach or County park to the north) including the provision of security and clean-up
    • A description of the parameters of events/festivals will be provided at a later date, and will be consistent with Ordinances and Policies of the City, and will include:
      • Where on-site they will be allowed
      • Frequency of festivals
      • Proposed fee structure

The City shall also have the right to hold events and festivals to be coordinated with the Developer, and collect revenues derived therefrom.

  • Manage and maintain all parking improvements (including meters, parking spaces, etc.), collect parking fees, address parked vehicles that have not paid fees or time limit has expired by ticketing or towing
  • Manage and maintain all site improvements including landscaping, park pavilions, recreational areas and improvements, boardwalk/promenade open to the public with no fees
    • Need park area management plan
  • Maintain a reserve for replacement in the Project operating budget in accordance with industry standard.
  • Pay the City an annual lease payment of $500,000 with an annual increase based on an acceptable consumer price index (CPIU) commencing on year 2 of lease payments with an annual cap of 5% per annum.
  • Provide the City sufficient guarantee that the Project will be managed and maintained to an acceptable standard. This guarantee could be in the form of a surety in an amount equal to the budget for maintenance and replacement reserve, establishment of a maintenance and replacement reserve, a default provision in the agreement, or other mechanism acceptable to the Parties, to be finalized by legal counsel.
  • Turn all site and building improvements over to the City in a condition satisfactory to the City, and pay the City the unexpended replacement reserve budgeted for the last year of the lease term.
  • Establish a permit parking area with sufficient and agreed upon spaces for permit holders, which areas shall not be improved upon with County bond funds.
  • Manage and maintain all pool improvements including locker room, pool equipment, pool deck, life guards, security, etc., collect user fees for swimming pool. Management and maintenance shall be conducted at a standard consistent with the balance of the Project. The City shall also have the right to hold events at the pool to be coordinated with the Developer, the City to retain any associated revenues.

City’s Obligations

  • Enter into an interlocal agreement with Palm Beach County for the $5M of tax exempt bond funds for the project, Developer to be reimbursed monthly by the City predicated its upon receipt of payment by the County as expenses are incurred.
  • Contribute $1.2m from the City Beach Reserve fund on a reimbursement basis by the City Commission as expended by the Developer.
  • Facilitate contribution of $200,000 from the Florida Recreation Development Assistance Program for renovation of the pool area, to be reimbursed in accordance with State regulations.
  • Sign permit applications as the property owner and/or provide consent forms necessary for the Developer to obtain construction permits
  • Provide lifeguard service on the beach, and at the pool if approved by separate contract and paid for by the Developer
  • Sell parking permits with City to retain all associated income.
  • Require that when the lessee of the pier restaurant conducts exterior improvements to the restaurant building it be of an architectural style and quality consistent with the Casino building

Additional Terms

  • Agreements are contingent on third party funding obligations as set forth above, and receipt of any required zoning changes as to permitted use required to generate sufficient revenues to support the Project. Permissible uses shall be agreed upon by the City. The parties agree, however that in no event shall a hotel or residential dwellings of any type or nature be regarded as permissible uses.
  • Developer shall protect turtle nesting at the Project in accordance with all applicable laws and regulations.
  • Developer shall not dredge any sands from the ocean associated with the Project.

"Political advertisement paid for and approved by Wes Blackman for Commissioner – District #3"