LETTER OF INTENTLetter of Intent
Paradise Group, LLC and City of Clearwater
Design, Finance, Construction and Operation of Parking Garage at Pelican Walk
March 12, 2014
This Letter of Intent sets forth the intentions of the City of Clearwater ( "City ") and
Paradise Group, LLC. ( "Paradise "), the contract purchaser of certain real property on
Clearwater Beach popularly known as the Pelican Walk Shopping Center with regard to
the proposed design, construction, operation and ownership of a Parking Garage on
that portion of the Pelican Walk Property which is currently improved and used as a
surface parking lot (the "Parking Lot ").
The City desires to: 1) promote the revitalization and redevelopment of the Retail
and Restaurant District, the Marina District and the Destination Resort District of
Clearwater Beach and recognizes that additional off - street parking open to the public is
needed to support such revitalization and redevelopment, and 2) provide additional
beach parking.
Paradise recognizes that additional off - street parking open to the public on the
Parking Lot will contribute not only to the economic viability of the Pelican Walk
Shopping Center but also the of the Retail and Restaurant District, the Marina District
and the Destination Resort District.
To that end, the City and Paradise have jointly considered altemative means by
which additional parking spaces open to the public could be designed, constructed and
operated on the Parking Lot. The parties have concluded that the most efficient and
effective way to accomplish these multiple objectives in a timely manner is through
Paradise building a parking garage on the Parking Lot. The entire Project including
Pelican Walk, the first floor retail and parking and the City parking will be submitted to a
condominium regime. The City will provide Public Parking Support, a minimum revenue
stream on the public parking spaces that are constructed with a maximum annual
expenditure for the first two years of operation. The City will enter into a purchase
contract (the "Purchase Contract ") with Paradise requiring the City to purchase a
Parking Condominium ( "Condo ") comprising 450 contiguous parking spaces for a
mutually agreed upon purchase price (the "Purchase Price) at the conclusion of the
second year of operation of the parking garage.
To effectuate the purchase of the Condo and development of the Parking Garage
the parties enter into this Letter of Intent to establish the general terms of a purchase
and sale agreement and /or a development agreement. The following general terms and
conditions would be the basis for preparation of the Purchase Contract and /or
development agreement between the City and Paradise:
1. It is Paradise's intent to design and construct or cause to be designed,
constructed and operated, on the Parking Lot a parking garage containing
approximately 600 parking spaces. At least 450 spaces of those spaces, on
contiguous floors starting with the second floor, will constitute the City's parking
garage condominium (the "Parking Garage Condominium "). Paradise will retain
the rights to the ground floor in the form of a condominium ( "retail condominium ").
Paradise will design and construct the Parking Garage with ±13,000 SF of cold
dark shell retail on the ground floor facing Poinsettia. Paradise will finance and
retain 50 spaces on the first floor to provide short term parking for the ground floor
retail pad and the top (7th) floor of the parking garage.
2. The City will purchase the Parking Garage Condo in 2016 for a Purchase Price of
$11,314,800 (450 spaces @ $25,144 per space, including land apportionment).
Closing will occur within 60 days of the expiration of the Put Agreement for the
Surf Style Condominium — Parking Unit between Branch Banking and Trust
Company of North Carolina and the City. However, nothing shall prevent the City
from acquiring Parking Garage Condominium from Paradise at an earlier date,
upon 60 days notice to Paradise, LLC.
Should the City desire to purchase additional spaces, prior to completion of
design, they may do so at the rate of $25,144 per space.
3. Paradise projects the need for gross revenue of $1,250,000 ( "projected gross
revenue ") annually on the 450+ parking spaces on floors 2 through 6 of the
Parking Garage until the City exercises the purchase agreement. In the event
Paradise should fall short of its required gross revenue calculation in a given year,
the City agrees to pay Paradise up to $250,000.00 annually of the projected gross
revenue shortfall as Public Parking Support Reconciliation and payment would
take place annually, after submission by Paradise of sufficient documentation to
substantiate to the satisfaction of the City Department of Finance the results of
operations as they relate to gross revenue. The City agrees not to impose a
parking revenue surcharge for 2 years.
All parking revenue generated by the parking garage shall be included in gross
revenue. Other than the ground floor parking, no free parking shall be permitted at
anytime. Any third party agreements that Paradise or the City negotiate for bulk
parking on floors 2 thru 6 (up to a maximum of 200 spaces) shall be credited
dollar for dollar against the $1,250,000. City and Paradise shall mutually agree to
the rates for bulk, monthly, weekly or any other discounted rates. Paradise shall
submit complete records and documentation to support any claimed shortfall. The
City shall be entitled to audit the records at anytime.
4. Paradise agrees that the parking rates charged the public for use of the parking
spaces in the proposed parking garage shall be consistent with parking rates
charged for structured parking in other resort locations in Florida and in no case
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greater than one hundred and fifty percent (150 %) of the average parking rate
charged by the City for off - street parking on Clearwater Beach.
5. The City shall conduct a Parking Demand and Garage Financial Feasibility
Analysis for the proposed garage, with results to be received within 60 days from
the date of this Letter of Intent. Within 30 days of receipt of the Study, either party
may terminate further negotiations pursuant to the Letter of Intent with no further
obligations if they are unsatisfied with the results of the Study.
6. The Public Parking Support Agreement and the Purchase Contract between the
City and Paradise shall be executed by June 1, 2014.
7. Paradise may design and construct, at Paradise's sole cost, a walkway pass
through connecting the Parking Garage to the second floor of the Pelican Walk
Shopping Center. Paradise may further design and construct, at their sole cost,
the Parking Garage so as to allow tenants' pedestrian access to the rear of the
Pelican Walk Shopping Center. Paradise may design and construct the Parking
Garage with sufficient access to the rear of the Pelican Walk Shopping Center to
allow for Tenant's loading, unloading and deliveries
Paradise will design and construct the Parking Garage with a minimum 14'
clearance on the ground floor condominium. Paradise will design the ground floor
of the Parking Garage so delivery trucks can make the appropriate turns to
maneuver through the Parking Garage. Paradise will provide access to the rear of
the Pelican Walk Shopping Center for solid waste pick -up and maintenance of
restaurant grease traps. Appropriate easements will be granted to accomplish this
access.
8. Paradise will be solely responsible for obtaining all necessary permits and /or
approvals for the Project. Paradise shall apply for a modification to their
development order to reduce the parking requirement for the retail center to 0
based on the construction of a public Parking Garage on the adjacent parcel.
The City will cooperate with Paradise's application and will share any due
diligence documents that would assist Paradise with its application. Said
modification shall not be effective until the commencement of construction for the
Parking Garage. If the Community Development Board fails to approve the
modification within 180 days, Paradise may terminate the agreement with no
penalty.
9. Paradise will manage the Parking Garage and be responsible for collecting all
revenue, until the City purchases the Parking Garage Condominium.
10.The City and Paradise will decide on the parking management system that is to
be deployed in the Parking Garage.
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11. Paradise and the City agree that any development rights remaining on the Parking
Lot parcel shall be retained by Paradise and be available for use on the site
and /or transferred as Transfer Development Rights ( "TDRs ") to another site as
allowed by City regulations. The available TDRs shall be calculated based upon
the original unified parcel configuration, which shall include the Parking Lot parcel
and the Pelican Walk Shopping Center parcel. Available remaining development
potential on that basis is 19696 square feet, or 13 dwelling units or 22 ovemight
accommodation units.
12. Paradise agrees that the proposed parking garage will be designed and
constructed in a manner which will ensure that the garage does not adversely
affect the appearance and community character of Clearwater Beach.
13. Paradise agrees that the City shall have the right to review and approve the
plans and specifications for the proposed parking garage.
14. Paradise understands that the City will employ an "owner's representative" for the
purpose of representing the City's interest in the design and construction of the
proposed parking garage and Pelican Walk agrees to allow the City's Owner
Representative to have access to and participate in the design and construction
processes
15. The City will cooperate with Paradise in allowing signage for the proposed retail
on Poinsettia to be placed on Mandalay in front of the existing Pelican Walk
shopping center as well as on Poinsettia.
16.The City will provide "Public Parking" signage on Causeway Boulevard and
Mandalay Avenue directing traffic to the Parking Garage.
17. Paradise agrees to complete construction of the Parking Garage within twelve
( "12 ") months of the commencement of construction.
18.The City will assist Paradise, but not be responsible for, location of temporary
parking for Pelican Walk during construction.
19.The City agrees to not pursue the development of another public beach parking
garage north of Causeway Blvd. for a period of 2 years from approval of the
purchase agreement.
20. Paradise Group, LLC agrees, in acknowledgement of the significant City
contribution, to maintain its existence, not dissolve or substantially dissolve all
of its assets, not consolidate with or merge into another corporation, limited
partnership, or other entity without the prior approval of the City, which shall not
be unreasonably withheld, prior to acquisition of the condominium by the City.
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21. Paradise Group, LLC, agrees, in acknowledgement of the significant financial
interest of the City in the parking garage, not to sell, lease, transfer or otherwise
dispose of all or substantially all its assets or otherwise take any action which
would have the effect of rendering Pelican Walk, LLC unable to observe and
perform the responsibilities of this agreement.
22. The parties acknowledge and represent to one another that no brokers have been
involved in this transaction and such representations and mutual indemnification
shall be a part of the purchase and sale and /or development agreement(s).
23. This Letter of Intent is contingent and conditioned upon the parties entering into a
mutually satisfactory purchase and sale and /or development agreement(s). The
purchase and sale and /or development agreement(s) shall contain the terms and
conditions set forth herein and such other terms and conditions as the parties may
agree. The parties understand and agree that this Letter of Intent reflects the
agreement of the parties, but that none of the rights and obligations described in
the Letter of Intent shall be binding or enforceable until such rights and obligations
have been incorporated into the necessary and appropriate documents to include
but not limited to: a purchase and sale, a Public Parking Support Agreement and
development agreement(s) which are approved by resolution of the City Council in
accordance the requirements of the City's Charter and Code of Ordinances and
State Law.
ACCEPTED: ACCEPTED:
Paradise Group, LLC City of Clearwater
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Letter of Intent
Paradise Group, LLC and City of Clearwater
March 12, 2014
Countersigned:
- �e,oikevrcVt.(93
George N. Cretekos
Mayor
Approved as to form:
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Aseisteet-City Attorney
CI
By:
TER, FLORIDA
asz.risil iam B. Horne II
ity Manager
Attest:
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Rosemarie CaII
City Clerk