MIAMI

OF

CITY

BEACH

1700 CONVENTION CENTER DRIVE MIAMI BEACH

CITY HALL

CITY

FLORIDA 33139 OFFICE OF THE

MANAGER

TELEPHONE: (
305) 673- 7010 FAX: (

673305)
7782 July 29,1999

Hotel Limited Partnership

Mr.
R.

100 S.
E.

Second Street

Donahue Peebles Managing Member

RDP

Royal Palm
Suite

Miami, Florida 33131 VIA

4650

CERTIFIED MAIL

Palm Crowne Plaza Hotel Dear

RETURN RECEIPT REQUESTED NO. Z 463 600 003 Re:Royal

letter of July 20,1999, addressed

to Christina M.Cuervo, Assistant City Manager, apparently signed by someone on your behalf, concerning the Royal Palm
Crowne Plaza Resort. Your letter raises several matters to which I feel it is necessary to respond in order that we

Don:This letter

is in response

to your

your request for a

portion of the Rental, as such term is
Lease t
( he Lease"),
" dated
may

create

clear

record with respect to

defined in

May 28,1998, betwe n the Miami Beach Redevelopment Agency (the O"wner") and RDP Royal
Tenant").In

defer

of

deferral

Palm

a
the Agreement

Resort

of

Limited Partnership ( the "

want to be very clear that the negotiations to

Rental were instituted at your request. Additionally, the City Commission agenda

this regard, I

a portion

of the

item for the July

21, 1999

meeting

of the

Mayor

and

City

Commis ion

was withdrawn, solely at your

of July 20,
1999. In the course of our

request, as per your

letter
you presented a
City in the amount of approximately $ 836,000.Contrary to the
no ambiguity as to the City' s
letter that there is "
liability,"Lawrence A.Levy, First Assistant City Attorney,advised your attorney, Stuart K.
Hoffman, Esq., by letter dated June
whether
any
question
occurred,
and,
24,1999,that the Owner "
in any event,deny any liability arising
delay
out of any alleged delay."A copy of that letter was provided to you. In addition,from the

aforementioned
delay claim to the
assertion in your

begin ing ofthenegotiations,

areleaseofany

the
claimsthat

Tenant

negotiations,

Mr. R. Donahue Peebles

July
29,
1999 Page 2 condition of any deferral of Rental, as set foith in Redevelopment
Agency Memorandum No.99- 42.I was prepared to stand by my recommendation that the members
of the

Owner

attached to the aforesaid Memorandum subject to

in the Lease), and some additional legal issues. As

approve the resolution that was

the Developer' s Fee as such term is defined

you are well aware, no agreement" could be final until approved by the

addressing

of

Beach Redevelopment
an agreement"
"

the Miami

you to

Agency at a
in

meeting duly called

and

held. Therefore,

any

members
references by

your

1999 are

letter of July 20,

incorrect.

Your

letter

of

July 20,1999 clearly threatens

the City with litigation. For this reason, I have instructed my staff,and I am hereby notifying you on
behalf of the City and the Agency that there is to be no further direct communication with the City Manager'
s Office or any members of the City' s staff with respect to either the deferral of Rental under
the Lease or with respect to the delay claim. All communications
should be
At
t
o
r
n
ey,
or
~. City
Lawrence A.
Levy, First Assistant
conducted through your counsel with either Murray pubbin,
City

Attorney.

In addition, we will

bring

in outside counsel

be necessary

as

may

in

conducting any
future discussions
or negotiations.

truly

Very

yours,Sergio Rodriguez
Manager MHD:LAL:

City

Mayor
bfg cc:

Neisen Kasdin Vice

Mayor Martin Shapiro
Commissioner Simon Cruz
Commissioner David Dermer

Commissioner

Susan Gottlieb

Commissioner Nancy

Jose Smith Murray H.Dubbin,

City Attorney Lavvrence A.
Levy,
Liebman Commis ioner

City Attorney
Kent
Christina Cuervo, Assistant City Manager
Bonde, Redevelopment Coordinator Joel
N.
First Assistant

Minsker,

Esq., Bloom & Minsker Stuart

Hof man,Esq.,

HollandKni& ght

F ""

OFFICE OF THE CITY ATTORNEY

tfJliomi ~mM
F

MURRAY H. DUBBIN
City Attornev

Telephone:

Telecopy:

673-

74i 305) 1573- 700

July

28,1999

Holland &Knight LLP 701 Briekell,

Stuart

Suite

3000 Miami,Florida

K.
Hoffman, Esq.
33131

VIA

CERTIFIED U.
S.
MAIL

p"
RETURN

RECEIPT REOUESTED Re: Royal Palm Crowne Plaza Resort Dear

This letter is in response to your
Stuart:
letter of July 23,1999
the
to
the Miami
addressed
City of Miami Beach and
Agency.
Your
letter alleges a
Beach Redevelopment
defaultof Section 6. 4 of the
Development Agreement between the Miami Beach Redevelopment
Age:J.
cy (the Owner")
and RDP
"

Royal Palm

Hotel

Limited Partnership ( the "Developer").

With respect
a result
of the City' s alleged defaultto "make
reasonable efforts to provide for expedited handling of all
review,board hearings and/ or permit requests made to
it by Developer relating to the
to

your allegation that

the projeet has been

delayed

for fiftyeight 5(8) days as

construction of

the project,"please be advised that the City categorically and absolutely denies any such
default.As
you may be aware, a meeting was held
Mr.
R.
Peebles,
with
Donahue
representatives of the
Construction Manager for the Project, and the engineer of record, peer review engineer, and the engineering

firm
doing the work on the post- tension aspects of the construction on
Tuesday, July
27,1999, which meeting was a followto
a
up
meeting held on Friday, July 23,
1999,with the staff of the Building
Department and various City and RDA employees with Mr.
Peebles. The City reiterates the instructions
given to your elients' engineers in both of those meetings that
with respect to the postthat

is

tension design,the

shop drawings

for floors 1

305) '

Stuart K.Hoffman,

Esq.

July
28,1999

Two The City denies that any default has occurred on its part. To the contrary of
your allegation, City employees in the Building Department have worked nights and over a holiday weekend
on the Royal Palm Crowne Plaza Resort project, which has, in fact, been put ahead of other
projects that are
Page

pending review. Very

truly yours, MHD:

LAL:

Via certified
bfg cc:

receipt requested:

mail,return

Ellen

Smith, Esq.Bass Hotels

and Resorts Three

Ravinia

Drive Suite
2900
Palm Hotel

Atlanta, Georgia

30346 RDP

Ltd.Partnership

Royal

c/
o

Peebles

Atlantic Development

Corp. Suite

4650 100
S.E.2nd Street Miami,
Florida
President RDP

33131

Attn:R Donahue

Royal Palm

Partnership

Peebles,

Hotel Ltd.

c/
o

Peebles

Atlantic

Development Corp.

2600 Virginia Avenue, North Suite 606 Washington,

D. C.

20007 Attn:
S.

Newell,
P.
Executive Vice President Bloom &
Minsker 1401
BrickellAvenue Suite

700

Miami, Florida 3313 1 Attn:

Joel M.
Minsker, P.
A.
P:\

Oi/

42

lJ:

7GE

20/ 99

F.~
J059 5 J40

PAD

C 141 0 0 2 r
RDP ROYAl. PAI.,1\

t1 HOTEL,
LP

100

SE

Second Slreet,Suite 4650 Mlami,

fL 33131 Tel:305-

9955330 Fax:
305-995-5340 July
1999 VIA
20,
FACSIMILEf
& .JJS

Ms.

MAll.
Assistant City
ervo

Christina eu

Managa

City of

Miami Beach 1700

Plaza
have been

Convention

working

Roval Palm Crow71e

33139 Rc:
aware, you and your team
since Decemhcr, 1998 to negotiate an agreement that woul(~among other things,

Center Drive Mi:uni Beach, FL

Dear

Hotel

diligently

with

Christina:

us

As you are

modify
the Lease and provide for a deferral of a portion of the ground rent fOi
the above- rcfCl' enced project.Two weeks ago it appeared that we had

reached a

tentative agreement

submitted an oulline of
1999 mccting. Final action on the
As a

result

conclude our negotiations and the City administnltion

that agreement to the City Commission fill' tts July 14,
1999 Commission meeting.
approval was deferred until the July 21,

to

of the Commis::

wehave had an opportunity to discuss nuther tbe proposed

our
agreement with
lenders and counsel. Yau will recall that one of the last !
toenvironmental damages incurred by
SSl.lCS to be rcsolvcd in our discussions related
property. The proposed agreement
contaminated soil onthe
us as a result of
Partnership to waive
r
Ruyal
Limited
fi)
Palm
l,
provided
RDP
Hutt::

on
ion' s deci~;

its rights

to

defer the matter,

to nearly $1,
000,

ullages (as defined in

in Environmcntal D:.
th,~
ind~mniCicatioll as set fOlth in
the City' s
under

000

Envinmmt: ntal Damages that are expressly covered

Lease);
our Lease.
Section 35.3
of
see
(
of this s(..'(..'
tion ( subsections 35. 3 b)

For your

reference, T

havt:.'
enclosed

copy

07/ 20/ 9:) '

1LIt,lJ;-

J<
t..
u
JU;)<
l~

J.!
U 1)

J;);)

l.:
i!J

vVoJ

Upon further discussion with our contractors, consulLaand

nts
thcse
liable
fully
City
for
the
t
convinced th.\
is
Holland Knight,
it
r
e
i
l
e
ct
i
o
D.
Agency.
Thus,
upon
damages and we expect to be fully reimbursed hy the
with the City tliat invulves .
negotiations
further
to
proceed
or
would be imprudent ::
us
with
Administration
rcfore, 1 must request that
of these ciaims. Th(;
l waiver
Cuervo
r C.

Page

gul counsel, W~
our le::
arc

theproposcd

remove

indenmity, our

1999 Cornmissioll1llceting. ' With regard to the environnn.

frOTl the July 21,
achieve a prompt resolution
City
ith
the
v'
communi
c
at
i
n
g
directly in an effort to
counsel will be
suhmit ing additional documentation confIrming
be
r and. will
to this matl~
have not
that
we
our damages relative to the second soil cuntamination. T am disappointed
yet helm able to reach a mutLLaily acccptahle resolution of all
iltal

agreement

is ues

el10rt
pertaining to the Royal Palm project T appreciate all of your time and
lOl"W'ard to continuing to work with you on this and
advancingnegotiations thus far, and lo()~

oth(..

r
matters ill the
future.inccrely,/.')
..

@)R.
Donahue

Simon
Pechlcs Managing Member RDP/ gi cc:
David
City
Miami
Beach
Cruz,Commissioner,
of
Dermer, Conunissioner, City of Miami Beach Susan
Gotllieb, Commissioner, City oi'Miami Beach Nancy Liebman,
ach Martin Shapiro,
Commissioner, City ofMh!mi B~
Commissioner, City of

Miami

Bc.'\
ch Jose

in

07: 20/ 99

l0

lJF.

TLE 1: J:-

4g

o.:!.

P I..
..
D C manufacture, processing, distribution.use,

treannent,

lnSpori or handling
of

and

safi~ ty

Hazardous

Materials; and

ii)all

che public; c) Environment"

"
ground waters, land, stream sediments, surface or subsurface
strata

pectto

pertaining to

storage, dispos':: u,
tr,
the protection of th: health

of

or

employe s

Requirements

J059955J-

shall

mean soil, surface

waters.

and ambient air;d)

shall mean any condition with re>
"
EnvirorunenW Condition"
whether
or not yet discovered, which.' could or does result
ilises,

the Prer.

iri.
any Environmental
'
Damages, including any condition resulting from the operation of Tenant' s business or
the operation of the business of any subtenant or occupant of the Premises or that ofany otter property
Xt' ner or operator in the vicinity of the Premises or any activity or
o\
operation
formerly conducted by any Person on
off

the
damages (

claims, judgmenti,
strict

Premises;

Environmental
e)

Damages"
"

shall mean all

including punitive damages), losses,penalties. fines, liabilities ( including
I

liat. ilicy),encumbrances,

liens, costs and expenses of investigation and defense of any claim, wilether
not
such
is
judgment, of whatever kind
or
ultimately defeated, and of any settlement or
01 nature, continge: nt or otherwise, macured or unmarured,
forese ableor unforeseeable, any of whi:
h

are incurred at any time as

a result of the assessment, monitoring, remediation
or mitigation of an Environmental Condition (and shall include any damages for the failure to do
so),
includirg, without liml~Ltion,fees incurred for the services
of attorneys. consultants,
contractors, expert),laboratories and all other
costs incurred in connection with investigation
and remediation, including the preparation of any feasibility studies or
reports and the perfonnance
of any remedial,
abatement, containment,

or

closure,

restoration

permit,license, approval,

or monitoring work; f)
environmental
.
Permit" shall mean any
consellt or authorization issued by
federal,
local
governmental
a
state or

quasi- go\.
ernmental entity;
or
g)
shall mean any releasing,
Release""
seeping. spilling, leakin.~.
pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping of a Hazardous

Material

into the Environment;

of a Release

result

may

which

requires action

of Ha7:

brought on, kept or

Tenant' s business
be

and incompliance

with all Enviromental

h)
"
Threat of

to

Release"shall

mean

a substantial

likelihood

prevent or mitigate damage to the Environment which

from such Release. I Section

35.2.
Use
to

and

Laws.

used

Mnterials, Tenant shall not cause or permit any Hazardous Material

in or about the Premises except as necessary or useful to

lrdolls

r .."

00.

I.

Section35.

3.
Indernn ific;
JrioQ.a)
Tenant herebyindemnifies and
Indennified Panies from and against
holds h.
any
lImless the
all Envirol""
and
of
this
teOIl
encal Damages to
Lease, except to
the Premises during
the
th"
any
permitted, allowed,
suffered or contributed to, extent such Environmental Damage is
or
i
n
di
r
ectl
y
,
caused,
directly
by any
Patties prior to
of the Owner Indemnified
the
Commencement Dace. Such
burden and expense of defending
Obligation of Tenant shall
aU claims. suilS
include the
counsel re'
Sonabl)' sacisfactorv to
and
adminstrativeprOCe dings (
Owner), even if
with
such claims. suilS or proceedings
false.or fraUdulent, and conducting
are

Owner

and a.,
the same become

all negotiations of any

description.
due, any and all

and paying

groundless,

and

diSCharging.

any of the Owner

jUdgments, penalties Or
other sums d~
e against
hillemnIfied Parties. Tenant'
Obl
i
g
ati
ons shall not
respect to
s
Dam ges
apply with
reSUlting
Environmental
from Environmen"' l Conditions existing in the Land
tl:
e execution hereof
regardless of
prior to
whedler the =
ne were caused by any
Owner Indemnified Panies).Without limiting
of
the foregoing, if
the
edor Pennjtted by
the presence or
Release on or from
T ellltlt resUlt' in contlntination
Ule Premiscs
of
actior" at
cau ;
tile Premi'
its sole COst
T ellltlt shall promptiy
es,
expense
and
take
aJ
as are necessary to
compliance v, ith
EnvironmenraI Laws in effect
remediate the Premises in
from time
requiremen"'imposed
to time and to
by any Governmental Authorites;
comply with any
1 fir;
provided that Owner'
t

be

obtainod,

s approval

which approval

when

of such actions sha!

shall
not be
unreasonably withheld, .b)
Owner hereby indemnifies and
Inde:Ilnified Panies from
holds harmless the
and
against
from Envirocmental Conditions
and aU
any
e:
Environmental Damagesresulting
Usting prior
to the Commencement Date, but
Land and specificaJy excluding
only
dle Improvements.
in tile
and expeme of
obligation of Owner
Such
shall inchu.!
defending
e
the burden
reasonably satisfactory to
all ciaizns, suits
Tenant), eVen
and
pr
O
Ceedi
n
gs
(
administrative
with
counsel
if such cIaizns, suits
Or fraUdulent, " ill
or proceedings
are
conducting all negotiations of
false
groundless,
as the same become
any description, and paying and discharging, when
due,any and all jUdgments,
and
penalties or other sums due
against
any
of
Tenant

OW"'r

agrees

the Tenant Indemnified Panies.

c)
NotWithstanding
take
snch action as .necessary anYthing

to
tank( O.if
any,

located
further assessment, remediation, and
monitoring of
if

onthe Premises; to

dle soil

any,
as

ob"
in
if required

required under applicable Environmental

a No

under

and

Further

tothe contrary contained herein,

to immediately remove the nndergronnd storage

expeditiously undertak: e

Water impacted
ground
by the
Laws; and to

ReI..

se frOm

such

such

tank(s),

e such action as necessary

tal(
Action determination from
to
DERM
DEl>,
or

Environment>!

Laws.Owner shaIl use

in tm,s. ction 35.
reasonable efforts to undertake
3(c)
tilework
in Such a manner as to
void
delaying Tenant' s
!
minimize disruption to
and

described

lans to renovate and

develop me Premises.
Owner agrees that in
in this Seetin
connection
1 35.
3(
c)
it

all

cor espondence.

repons, srudies

other documents
and

exc, anged

betwe n

will

provide

described

to a

with

the work

to Tenant

1."=,~'='
1~:
13 F~

J......- .:.....; .

LLP

KNIGrlT

hCLLRND

305789

7613

TO 7732~

San Francisco Sl Petersburg'

D.

Tall~T~Washingtcn,

C.west
Palm

Beach
701 Brickell

Avenue.

61886~

Boston Fert

1~

Lauderdale

305 P.

Jactsonville

02/

Lake/ and

03 law

Melbourne

Ollla:

Mexico

Miami

City

HOLLAND &KNIGIIT

New Yorlc Northam

LLP AlJantl

VirginIa Orlando Providence

Suile3OllO
P. O.
Bax0154041 ( ZIP 33101- 5441) Miami,

Rerida33131 305-

374-

a500

FAX 305789-

7799 IIIdaw.clllTI
23,
1999

Sl1JART

July

K.
HOFFMAN

Direct Tclcpbooe and .

EXPRESS Miami

Agency Executive

t Address: sholfman@bkI~'" .
com VIA FEDERAL

Beach Redevelopment

Director 1700 Convcmion

Center Drive Miami
Drive Miami Beach.

Fu No.3057897732 lruauc:

Beach, Florida

33139 Miami

Beach Redevelopment
Agency General Counsel
1700 Convention Cenrer

Florida

33139

Miami Beach Redevelopment

Agency City

Manager

1700 Convention
Center

Drive

Miami Beach,Florida 33139

Agency City

Attorney 1700 Convention Center Drive

Miami

Beach Redevelopment

Miami Beach, Florida 33139

Joel N. Minslcer, Esq.Bloom &Minsker,
P.A.
1401 Brickell

33131 Re:
Hotel Development Agreement Between
Limited Partnership Dear Ladies

Avenue Suite 700

Miami,Florida

Miami Beach Redevelopment Agency and RDP Royal

Pahn
and Gentlemen: This is a notice sem
toyou
to Section 20. 01 of
the above- captioned Hotel Development Agreement.
of RDP Royal Palm
Hotel

Hotel

pUrsuant
On behalf

7613 TO

Lirl r

LLP

305

789

77321::
618861::

1 305/::
P.
03....

0:
3

Miami

Beach Redevelopment

1999
provide

for

permit
requests

Agency Joel N.
MiDsker, Esq.July
23,
Page 2 The City
shall make reasonable efforts to
expedited handling
of all review board hearings and/ or

to it by Developer relating to
the Construction of the Project. As a result of
failure as the Agency and the City to
comply with said Section
4,the development and construction of
6.
the Project has been delayed for
fIfty
eight ( 58)days
and it is anticipated
that,under present circumstances, the delay
may reach eighty 80)
or more days.
made

the

This has resulted in substantial

damages in construction costs. lost revenues,
additional interest and
other soft costs. Please be advised
that the Tenant is in the process of

detennining its damages incurred to date

and will be
providing
to you under separate cover.
thatinformation
that we must take
step.
this
bu e T, enant has done
everything
it could in
an effort to
encourage the City to comply ith ts
~'
obligations
under Section 6.
4.
In addition, the
undersigned
requested the assi .of the City
We

regret

Aaorney'

to
Office

help

resolve

theproblem.

Howevert, he