HomeMy WebLinkAbout2000-08-03 Workshop Meeting - Discussion of Harbor Towne Lease City Commission Meeting Minutes MINUTES
DANIA BEACH CITY COMMISSION
WORKSHOP MEETING
AUGUST 3, 2000
7:00 P.M.
Mayor McElyea called the meeting to order at 7:15 p.m.
Mayor McElyea stated for the record that everyone was present.
Present:
Mayor C.K. McElyea
Vice-Mayor John Bertino
Commissioners: Jim Cali
John Etling
Bob Mikes
City Manager Mike Smith
City Attorney Tom Ansbro
Acting City Clerk Sheryl Chapman (Absent)
1. Discussion of Harbor Towne Lease.
Attorney Elaine Cohen, Weiss, Serota, Helfman, explained that.a Recognition
Agreement was being requested by Harbour Towne Associates, lendor, with
respect to the ground lease that is to be assigned from Southeast Bank, as
Trustee, to Harbour Towne Associates. She advised that the assignment of
lease was previously approved by the City Commission in February 2000. Part.
of the condition of the consent for the assignment by Southeast Bank was that
the City of Dania Beach enter into a new Recognition Agreement in order for
Harbour Towne Associates to obtain additional financing.
Attorney Jon Chassen, representing Harbour Towne Associates, explained that a
large amount of money had previously been given to Harbour Towne, however,
the remainder was held back to be used specifically to buy out the Southeast
Bank lease. Southeast Bank would then be taken out of the equation and the
lease would become a direct relationship between the City of Dania Beach and
Harbour Towne Associates.
Ms. Cohen advised that, currently, there is no legal relationship, except as
sublessor, between the City of Dania Beach and Harbour Towne. The tenant
under the ground lease is currently Southeast Bank as Trustee.
Minutes —Workshop Meeting 1 August 3, 2000
. Southeast Bank is obligated to pay the City, and if the assignment of lease is
made, there will be no increase in rental fee to the City.
Commissioner Mikes was uncomfortable with the language for the Recognition
Agreement and thought the lease was being altered. He felt that the City should
go through the necessary lease procedures as required by the Charter.
Ms. Cohen explained that a Recognition Agreement does not affect the lease
itself, it is an agreement between the ground lessor, the City, and the tenant's
lender, Southeast Bank. The Recognition Agreement would give the lender the
right to step in, if the tenant defaults, and the City would agree to recognize the
lender as the tenant under the lease. She advised that a lender would never
offer financing in any kind of leasehold interest until the lender has the right to
step into the shoes of the borrower in case the lender,has to foreclose.
Mr. Chassen stated that under the existing Recognition Agreement, in the event
that Harbour Towne fails to pay their mortgage and the lender takes over, the
City would agree to recognize the lender as the tenant under the lease. He
advised that the entire lease was assigned by Marine Conversions, Inc. to
Southeast Bank in July of 1986 and that Harbour Towne acquired the lease in
1989. He advised that Harbour Towne is attempting to eliminate Southeast Bank
so that Harbour Towne can have a direct relationship with the City, because
• Harbour Towne is interested in negotiating an extension of the lease with the City
and negotiations cannot begin as long as Southeast Bank is in the middle.
The Commission generally agreed to place a resolution regarding the
Recognition Agreement on the next regular meeting under public hearings.
The meeting adjourned.
kMAY(Of:,— COMMISSIONERJ
CITY CLERK
Respectfully submitted by Nanci Denny
Approved: March 26, 2002
Minutes —Workshop Meeting 2 August 3, 2000