Title
A Resolution Of The City Commission Of The City Of Hollywood, Florida, Approving And Authorizing The Appropriate City Officials To Execute A Comprehensive Agreement, A Ground Lease, And Easements Between The City Of Hollywood, Florida And PRH 1301 S Ocean Drive, LLC, A Subsidiary Of The Related Group, For The Redevelopment Of The Site Located At 1301 South Ocean Drive, Hollywood, Florida.
Strategic Plan Focus
Economic Vitality
Body
Staff Recommends: Approval of the attached Resolution.
Explanation:
Following a lengthy initial discussion during the February 2, 2022 City Commission meeting, the Commission continued Resolution R-2022-037 to the March 16, 2022 meeting to allow City staff and the Developer to address questions and concerns raised about the Definitive Agreements associated with this Resolution.
The City of Hollywood, Florida received an unsolicited proposal submitted under the provisions of Section 255.065, Florida Statutes, Public-Private Partnerships, for the Hollywood Beach Community Center to finance, develop, construct and manage a mixed-use project on approximately 4.6 acres of City-owned real estate on Hollywood Beach (“Property”) including a 30,000 square foot ocean-front community gathering place, with approximately 25,000 air-conditioned square feet and 3,250 square feet of elevated deck space, public parking, and other private and public amenities (“Project”).
The Property is located on the barrier island in South-Central Beach at 1301 S. Ocean Drive and is generally bounded by Ocean Drive, between Azalea and Bougainvillea Terraces and along Surf Road. The Property currently houses the City of Hollywood’s Beach Community Center, public parking lots, Harry Berry Park and the Hollywood Beach Bernice P. Oster public library branch. The Property is also located within the Beach District of the Hollywood Community Redevelopment Agency.
On January 21, 2020, the Developer submitted its unsolicited proposal to the City, pursuant to Florida Statutes and on June 23, 2020, the City published a notice of its intent to receive, review, and evaluate proposals for the same project purpose.
On September 28, 2020, Developer submitted a timely response to the RFP, which Developer further enhanced through the RFP process.
On February 18, 2021, the City’s selection committee determined that the proposal submitted by the Developer best met the objectives of the notice and recommended that Developer be designated as the winning proposer and proceed to contract negotiations with the City.
On March 17, 2021, the City Commission accepted the selection committee’s recommendation and directed staff to negotiate a series of agreements including a Comprehensive Agreement, a Ground Lease, and Easements (the “Definitive Agreements”).
PRH 1301 S Ocean Drive, LLC, a subsidiary of PRH Investments, LLC (The “Related Group”) was the top ranked firm and City Staff were directed to negotiate a Comprehensive Agreement for the site. The negotiations are now completed between the City and the Related Group. Staff, along with outside counsel and consultants have negotiated the comprehensive agreement, ground lease agreement and various other exhibits.
The Project includes several enhancements to existing public facilities on the Property, including the replacement of the existing Hollywood Beach Culture and Community Center and the enhancement of the existing Harry Berry Park, while acknowledging that Harry Berry Park was previously funded, in part, by federal and state grant funds, and certain federal or state approvals may be required if sought in connection with certain proposed alterations to Harry Berry Park.
The Parties desire to memorialize Developer’s obligations with respect to the Project (including, but not limited to, Developer’s obligation to obtain any federal or state approvals that may be required for the development of the Project), and the rights and responsibilities of both Parties with respect to the development of the Project.
The City desires to ensure that Developer’s obligations are supported by the personnel and financial resources of the Related Group because the Developer intends to develop a portion of the project as a condominium and thereafter sell individual condominium units to condominium unit Owners.
After the recording of the condominium declaration associated with the Project, it is anticipated that Developer will assign this Lease to the Condominium Association, which will assume all rights and obligations of Developer, as further set forth in these Definitive Agreements.
The Project will consist of the following.
Proposed Public Improvements Include:
o 25,000 sf ocean-front community center with public restaurant/coffee shop/snack bar, public library, banquet room, conference/meeting space, fitness center
o 3,250 sf elevated outdoor, ocean-front deck space
o 43,500 sf Harry Berry Park including modernized public restroom facilities, outdoor showers, parking and state of the art children's playground
o 12,150 sf Public Plaza area with outdoor seating and green space facing dunes
o Maintain 25,000 sf Public Dune
o 11,000 sf Sidewalk Extension, excluding paved vehicular drive lanes
o 13,125 sf Landscaped Sculpture Park along A1A and widened sidewalk with plaza
o 148 Public Parking Spaces - 80 covered garage spaces, and 68 on-street spaces. Expanded vehicular clearance inside the Public Parking Garage (15 foot minimum) to allow for high clearance vehicles and equipment
Proposed Residential Component Includes:
o 26-30 story condominium, including parking and amenities
o 135-190 units (reduced from 300)
o A Project designed by Arquitectonica which is slender and set back 515 feet from the beach along A1A to preserve the view corridors of neighboring condominiums
o A design for current sea level rise projections. Per FEMA guidelines, all new construction must meet stringent elevated floor levels requirements while local City Ordinances mandate that all stormwater prior to and after construction must be contained on the site itself. All FEMA flood criteria will be met or exceeded. The project will utilize state of the art engineering to protect against future environmental impact. The project will be fully compliant with all regulations.
o A requirement that all approvals will be obtained from the Florida Fish and Wildlife Commission and the Florida Department of Environmental Protection.
o A requirement that the Project be Florida Green Building Coalition Certified
Fiscal Impact:
Summary of Proposed Terms
Under the currently proposed terms and proposed development, the City is projected to receive (ranges based on minimum/maximum entitlements):
o Total Value to the City from Condo Sales: Minimum guaranty of $35 Million (inclusive of Initial Rent Payment, Public Facilities, and Closing Rent). Value to the City is based on 14% of gross condo sale proceeds. Current projections of condo sale proceeds are $35 Million - $55 Million.
o Annual Rent Payment: $297,500 - $400,000 per year +CPI (historically 2.3%)
o Transfer Fee from Condo Resales of 0.25%
o Property Tax: Estimated at $1.9 Million - $2.3 Million annually
o Revenue generated from Public Parking
o Revenue generated from Retail/Restaurant/Facility Rentals
o Total projected yearly revenue to the City: Estimated at $2.7 Million - $3.3 Million
Other key terms include:
o The City will retain fee simple ownership of the Property
o Project will be effectuated through a long-term ground lease of the Property from the City, as landlord, to Developer, as tenant for 99 years.
o Private facilities will be owned by the Developer for the duration of the lease.
o All of the land and all of the public facilities will be owned by the City.
o City shall be granted an exclusive easement for the use of the public parking spaces.
Recommended for inclusion on the agenda by:
Sonny Maken, Development Officer
Shiv Newaldass, Director, Development Services
Raelin Storey, Director, Communications, Marketing and Economic Development
Gus Zambrano, Assistant City Manager/Sustainable Development