Broward County Commission Regular Meeting

None.

• The Amended and Restated Lease Agreement provides for a retroactive effective date of January 31, 2018, which will reinstate the terminated agreement in its amended and restated form.
• The County's option in the original agreement to terminate the lease at the thirtieth year with a payment determined through a defined appraisal methodology is eliminated. The new lease term is fifty years with no options to extend, with the County owning all permanent improvements at the end of the lease.
• The County milestone payment to PE-ILC upon completion of construction and receipt of a certified copy of the Temporary Certificate of Occupancy is reduced from $3 million in the original agreement to $2.5 million.
• Port Everglades will make available to PE-ILC the fill material previously removed in connection with the construction of Port Everglades Slip 2, consisting of approximately 100,000 cubic yards, at no cost to Port Everglades, and substantially in the condition documented.
• The annual rent payment schedule is revised to include fixed annual rent payments over the first ten years of the lease and variable annual rent payments starting at the eleventh year until the end of the term.  The variable annual rent payments will equal twenty and one half percent (20.5 of the base rent received by PE-ILC under its subleases of the logistics center with its commercial tenants for that lease year, but no less that seventy-five percent (75%) of the annual rent amount paid by PE-ILC for the prior lease year. Base rent for space used directly by PE-ILC will be based on comparable market rates for Southeast Broward County as published by reputable companies that provide such information.
• The design/construction timeline has been condensed by five months from the original schedule, with a revised estimated completion date of July 2020. A new provision was added where rent payments will begin the sooner of: the issuance of a Temporary Certificate of Occupancy for the warehouse facility, or 24 months after the Notice to Proceed is issued authorizing construction.
• Added a new provision providing for an Assignment or Transfer Fee to be paid to the County in the event PE-ILC assigns or transfers all or any portion of its interest in the agreement, under certain conditions. County shall be paid a fee equal to a percentage of the gross sale price paid to the transferor or assignor for its interest as follows: one percent (1%) if the assignment or transfer occurs during the period after the eighteenth month after the first amendment's effective date and before the end of the fifteenth lease year, three quarters of one percent (0.75%) if the assignment or transfer occurs during the period from the beginning of the sixteenth lease year and before the end of the thirtieth lease year, and one half of one percent (0.5%) if the assignment or transfer occurs during the period from the beginning of the thirty-first lease year and before the end of the term.
• Added a new provision providing for an Exit Fee to be paid if any of the existing members of PE-ILC assign or transfer their respective membership interest in PE-ILC at any time during the term of the agreement, under certain conditions. The County shall be paid a fee equal to eight and seven tenths percent (8.7%) of the net profit paid each to each existing member for the transfer or assignment of their respective membership interest in PE-ILC.
• Added a new provision addressing compensation resulting from a taking through condemnation or eminent domain

• PE-ILC representatives have indicated to staff that the proposed changes to the original agreement will address concerns/issues raised by prospective equity partners and lenders during their efforts to obtain project financing.
• The County avoids the estimated $1.5 million cost it would have incurred to transport and dispose of the fill material removed in connection with the construction of Slip 2 from the current temporary storage site in Northport.
• The County will receive over $1.153 million more in annual rental payments over the first ten years compared to the original agreement.
• Since annual rental payments beginning in the eleventh year are based on a percentage of PE-ILC's commercial tenants base rent, the County will benefit from appreciation in market values through any increases to the base rents, but also takes on some of the risk if market values don’t increase. The County also receives some protection from vacancies through a guaranteed minimum annual rental payment.
• PE-ILC continues to retain most of the risk for design, construction, financing, operation, and maintenance of the logistics center.
• Completion of the logistics center will allow the Port to proceed with the demolition of the existing on-port Foreign-Trade Zone warehouse facilities and the construction of additional marine terminal yards as provided for in the Port Everglades Master/Vision Plan and previously approved marine terminal leases with Southport container terminal tenants.