Final Maritime Park

8/14/2019 Final Maritime Park

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April 17, 2009COMMITTEE OF THE WHOLE

MONDAY, APRIL 20,2009,3:15 P.M.HAGLER MASON CONFERENCE ROOM

SECOND FLOOR, CITY HALL

Michael C. Wiggins, ChairJewel Cannada-Wynn, Vice ChairMaren DeWeeseSam HallJohn JerraldsLarry B. JohnsonDiane MackMegan B. PrattRonald P. TownsendP. C. Wu

ACTION ITEM:*1. Community Maritime ParkDevelopment Agreement and Sub-LeaseINFORMATION ITEM:

None,DISCUSSION ITEM:None.

If any person decides to appeal any decision made with respect to any matter considered at such meeting, he willneed a record of the proceedings, and that for such purpose he may need to ensure that a verbatim record of theproceedings is made, which record includes the testimony and evidence upon which the appeal is to be based.The City of Pensacola adheres to the Americans with Disabilities Act and will make reasonable accommodationsfor access to city services, programs, and activities. Please call 435-1606for further information. Requests mustbe made at least 48 hours in advance of the event in order to allow the city time to provide the requestedservices.


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COMMITTEE: Committee of the WholeFROM:DATE:SUBJECT: Community Maritime Park Development Agreement andSub-LeaseRECOMMENDATION:That City Council approve the Development Agreement and Sub-Lease betweenCommunity Maritime Park Associates, Inc. (CMPA) and Maritime Park DevelopmentPartners, LLC (MPDP) for services as the Developer, construction of the PublicImprovements, development of the Private Improvements and management of the PublicImprovements subject to CMPA's satisfaction of the Conditions Precedent contained in the2006 Master Development Agreement and Master Lease and MPDP qualifying as aDesigdBuild Contractor under Section 287.055 Florida Statutes.SUMMARY:Under Section 4.03(b) of the 2006 Master Development Agreement, the CMPA mustsubmit to the City for review and approval all project plans and specifications coordinatedamong project professionals prior to commencement of any work. The means by which theCMPA has elected to fulfill its role as Developer of the Maritime Park is to contract with aprivate master developer. As a result, the document(s) that the City is required to approveis that Agreement between the CMPA and its chosen developer.Herewith submitted for City Council review and approval is the proposed Agreementbetween the CMPA and MPDP. Provided the Development Agreement and Sub-Lease areapproved by both the CMPA Board and City Council, the documents provide for MPDP toact as Master Developer, General Contractor, Developer of the Private Improvements andManager of the Public Improvements. For services rendered in each role, MPDP will becompensated under a fee structure either identified in the Agreement or to be specified insubsequent agreements.


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Committee of the WholeSubject: Community Maritime Park Development Agreement and Sub-LeaseApril 20, 2009Page TwoFor CMPA to proceed with the project, the City must accept that CMPA has, or likelywill, fulfill the Conditions Precedent, specifically:

Demonstration of the capability to cause the DevelopmentCommitment by Quint Studer to utilize the Conference CenterCommitment by Pensacola Pelicans to utilize the multi-use stadiumUniversity of West Florida (UWF) commitment of funds for development of theMaritime MuseumUWF commitment to use space in the Conference CenterConduct of an Economic Viability and Market Analysis (City)Approval of the project development strategy (City)Obtaining all regulatory approvalsAvailability of public financingApproval of the Site Preparation Plans (City)Issuance of permitsEstablishment of a Guaranteed Maximum Price (GMP) for the Public and PrivateImprovements.

Of the Conditions Precedent, the CMPA and City have accomplished all except 1) theCMPA's demonstration that it can cause the Development to occur which will be evidencedby execution of the Development Agreement and Sub-Lease, and 2) establishment of aGMP for the Site Preparation and Public Improvements, which is proposed to beaccomplished through MPDP acting as the DesigdBuild Contractor. However, prior toCMPA's execution of the Development Agreement and Sub-Lease, a formal request mustbe made of the City to accept accomplishment of the Conditions Precedent which in turnestablishes the 2006 Master Lease Commencement Date.The Development Agreement also contemplates that MPDP will fulfill its role as GeneralContractor by means of a DesigdBuild Contract. While MPDP has identified theindividual that will act as the Qualifying Agent under State law, that person does notcurrently hold the required certification. Hence, it is recommended that the Agreement beapproved but execution withheld until MPDP qualifies as a DesigdBuild Contractor.Provided all aspects of the Development Agreement proceed as proposed and nounforeseen delays are encountered in the construction of the Site Preparation and PublicImprovements, the project is scheduled for completion in May, 201 1.


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Committee of the WholeSubject: Community Maritime Park Development Agreement and Sub-LeaseApril 20, 2009Page ThreePRIOR ACTION: 1/28/2009 City Council Workshop4/06/2009 City Council WorkshopFUNDING: Budget: $40,000,000Actual: $38,000,000FINANCIAL IMPACT:The current proposal is for the issuance of a 30-year fixed rate Capital ImprovementRevenue Bond to provide $40 million in net proceeds, secured by Tax Increment Financingrevenues with a covenant to budget and appropriate non-ad valorem revenues.ATTACHMENTS 1) March 10, 2009 Abramson & Associates Summary ofProposed Terms

2) April 6, 2009 Committee Memorandum3) Proposed Development Agreement and Sub-Lease

STAFF CONTACT:PRESENTATION: Yes


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ITEM 1 2COMMITTEEMEMORANDUMFOR INFORMATIONCOMMITTEE: Committee of the Whole

FROM:DATE:SUBJECT:

April 6, 2Community Maritime Park Development Agreementand Sub-lease

As of 6:00 p.m. Friday, April 3d, the City and MPDP negotiation teams had not been ableto resolve various issues to the extent that a mutually acceptable Development Agreement isavailable. While both teams have worked diligently to resolve points of contention, thereremains major and minor issues yet to be addressed. However, as evidenced below,significant progress has been made and there is little doubt that an Agreement will bereached.SUMMARY:On January 28, 2009, City Council directed City staff to become actively involved innegotiation of the Agreement between Community Maritime Park Associates, Inc. (CMPA)and Maritime Park Development Partners, LLC (MPDP) for development of theCommunity Maritime Park. The City Council directive was in response to City staff'sconclusion that the November 26, 2008 proposed Agreement between CMPA and MPDPwas not drafied in the best interests of the City of Pensacola. The staff conclusion wassubstantiated by a detailed evaluation of the Agreement by the City's consultant, Mr. BarryAbramson.The opinions of City staff and the City's consultant were based upon a review of the"business deal" and not a detailed review of all aspects of the Agreement. While it wasacknowledged that an equitable agreement could be reached, a negotiation of the businessterms and a substantial rewrite of the Agreement appeared as the only means of reaching asuccessful conclusion between the parties.Staff and the consultant identified a number of major issues on which there was need foreither new or modified understandings. Hence, the first task of Mr. Abramson (Cityconsultant) and Mr. Beitsch (CMPA consultant) was to negotiate the major terms of theAgreement. That task was accomplished and reported on March 10, 2009, by Mr.Abramson in the Summary of Proposed Terms for Master Development Agreement andLease between Community Maritime Park Associates. Inc. and Maritime ParkDevelopment Partners, LLC for Community Maritime Park.


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Committee of the WholeSubject: Community Maritime Park Development Agreement and Sub-leaseApril 6, 2009Page TwoThe Summary of Proposed Terms served as the basis for a substantial and substantive re-draft of the Agreement.The new Agreement is being developed to address the conclusions, opinions and concernsexpressed to City Council on January 28, 2009, in the following manner:

If MPDP assumes responsibilities as Developer, General Contractor, and Managerof the Public Improvements, what is thefwure role of the CMPA?The CMPA remains responsible to the City for completing the Site Improvements,construction of the Public Improvements, sub-leasing of parcels for privatedevelopment, and operating the completed improvements. The CMPA will fulfillits responsibilities through management of a contractual relationship with MPDP.CMPA will have authority to approve the project's design criteria, approve allcontracts, oversee construction of the Public Improvements, assign the Agreementand terminate the services of MPDP. CMPA will, in cooperation with MPDP andthe City, negotiate the Design Build Contract, periodically determine rents for landsassociated with the Private Improvements and develop the Management Agreementfor the Public Improvements.The Development Fee was not defned.The CMPA will pay MPDP a Development Fee equal to four percent (4%)of thecosts actually expended in the Public Improvements Budget except for costsassociated with impact fees, the Development Fee, unused contingencies and anycosts or functions of the CMPA. The Development Fee does not cover MPDPYsdirect costs; but, it is the only source of compensation for their work associatedwith the "Contractors Academy."The Development Fee was front-loaded.In that public financing has not been secured, but to avoid delay in commencing theproject, in the interim between execution of the Development Agreement andsecuring financing, the CMPA will pay MPDP reasonable, actual and verifiableexpenses up to a maximum of one hundred thousand dollars ($100,000) per month.After financing is secured, the CMPA will pay MPDP the remainder of the fee in


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Committee of the WholeSubject: Community Maritime Park Development Agreement and Sub-leaseApril 6,2009Page Three

equal monthly payments; however, the payment amounts will be adjustedperiodically based on the project schedule so that the last payment is made uponproject completion and the total equals 4% of actual project costs.Means of CMPA managing wmtru ction with MDPD functioning as both Developerand General ContractorThe CMPA will retain a Construction Owner's Representative that will beresponsible for technical oversight and coordination of the project for CMPA. TheOwner's Representative may be either an individual or a firm with the projectmanagement expertise and experience required by CMPA to effectively manage theproject. Because the Master Development Agreement did not contemplate theDeveloper and General Contractor being one in the same, funding for an Owner'sRepresentative was not incorporated into anticipated project costs. The Agreementprovides for the allocation of $600,000 from the Public Improvements Budget forthe Owner's Representative and eligible supporting services.General Contractor percentage allowances for overhead, profitp general wnditions,and contingency were not identiped.The Agreement stipulates the following percentage allowances for the GeneralContractor which will be further clarified in the Design Build Contract and theGuaranteed Maximum Price (GMP):> Profit and overhead combined shall be 3%> The maximum amount for contractor's personnel costs allocated to GeneralConditions (subject to further review) shall be 4%> A maximum performance bond fee under General Conditions of 1%> A contractor controlled contingency of 4% of hard costs, with expendituresubject to approval by CMPAOption for the Developer to advancefun&Not more than thirtyeight million dollars ($38,000,000) in proceeds from publicfinancing will be made available to the Public Improvements Budget. The conceptof the Developer advancing funds for the project has been deleted from theAgreement.


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Committee of the WholeSubject: Community Maritime Park Development Agreement and Sub-leaseApril 6,2009Page FourAuthority to incorporate changes in the ProjectThe Project will be constructed in conformance with the Design Criteria; however,design changes may be agreed upon as market and financial conditions change.Regardless, MPDP must request CMPA authority to make design changes.MPDP management of the Public Improvemetus

Upon execution of a Management Agreement and substantial completion of thePublic Improvements, MPDP will have the right to manage the PublicImprovements and receive a Management Fee for a period of five (5) years with anoption to renew for an additional five (5) years. MPDP shall receive:3 4% of office and other income from the Public Improvements3 $20,000 for management of park facilitiesP 10% of revenues from events and sponsorshipsHowever, in the event that net cash flows are negative for any twelve (12) monthperiod for any reason other than an extraordinary event, the ManagementAgreement may be terminated unless MPDP chooses to make up the difference tomaintain the Management Agreement.Qualifications to manage the multi-usefacility vs. a third partyAn annual fee for managing the facility which is the lower of 1) a commerciallyreasonable rate or 2) the actual cost of the Developer, not to exceed $250,000, tohire a third party.Term of ninety-nine (99)years for all parcelsThe Agreement is structured to allow the following sub-lease term lengths:3 Ninety-nine (99) years for any parcel on which a building with a minimumoccupiable area of 20% dedicated to residential> Eighty (80) years for any parcel on which the building will be or contain ahotel> Sixty (60) years for all other parcels


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Committee of the WholeSubject: Community Maritime Park Development Agreement and Sub-leaseApril 6, 2009Page FiveProposal that land rents be estimated based upon the fair value of the unimprovedProPertyThe Agreement employs a land pricing matrix approach to periodically determinerental rates utilizing the following concepts:3 Land pricing will be set on a buildable square foot basis with a matrix ofuses (residential, office, retail, restaurant, hotel, other)3 For differential uses on waterfront vs. non-waterfront parcels3 Recognition that the land is improved vs. raw land3 Emphasis on residual valueB Pricing based upon the gross area of the enclosed building that is habitable3 Application of a dollar-per-square-foot pricing to the square footageattributable to the use component3 Assumption that parking is available and no costs are attributed to creatingparkingProvisions for TerminationAll aspects of the Agreement can be terminated for cause by the CMPA at any time.> Should public financing not be secured, after execution of the Agreement apayment of $50,000 can terminate the Development AgreementB Should financing not be secured within 24 months or should CMPA desire toterminate the development aspect of the Agreement for convenience, apayment of $250,000 is required3 Other than for sustained negative cash flow and for cause, the ManagementAgreement can be terminated if MPDP no longer holds development rightson the property3 Termination of MPDP's right to sub-lease any remaining undevelopedparcels if the pace of developing 30,000 square feet per year (forty-eight(48) months after Agreement execution) or payment of a penalty of three

thousand dollars ($3,000) per acre for the remaining undeveloped parcels.Under Section 4.03(b) of the 2006 Master Development Agreement, the CMPA mustsubmit all site preparation plans and specifications to the City for review and approval priorto commencement of any work. However, per the 2006 Agreement, the City does not havethe right to review and approve other contracts and commitments made by the CMPA. TheAgreement has been modified in recognition of the City, as the owner of the property, theowner of the Public Improvements and the financer, to allow for review and approval ofany amendments to the Development Agreement, the periodic land-pricingdetermination(s), the Design Build Contract, and the Management Agreement.


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Committee of the WholeSubject: Community Maritime Park D evelopment Agreement and Sub-leaseApril 6,2009Page SixFinally, in an effort to provide the CMPA with greater project control and achieve moresecurity for both the CMPA and the City, substantive revisions have been made in sectionscontrolling Project Coordination, Development and Management Fees, site preparation,public improvement plans and specifications, public improvements construction, sub-leaseof project site, unavoidable delay and change in control.Some of the known issues yet to be resolved are:

Whether termination of the Development Agreement ends M PDP's right to developPrivate ImprovementsWhether the Developer is obliged to provide any insuranceWhat is the standard of repair and maintenance (good quality or simply codecompliance)What is the standard of condition of the Property upon lease termination orexpirationWho receives insurance proceeds representing the value of the improvements in theevent of casualty loss

Further, neither group has had an opportunity to thoroughly review the document to assurethat it is worthy of being recommended for approval.While documents will be exchanged over the weekend and both teams will have reviewedthe material by Monday, April 6, I do not believe that the documents will be suitable forCity Council action at that time.However. it is the intent to ~rovide full briefiie on the statusof the Agreement at the Committee of the Whole meeting onMonday, April 6. Hopefully, a detailed briefing by theconsultants will allow Council to expedite the process once finaldocumentsare in hand.


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CITY COUNCIL MEMORANDUMFOR INFORMATION

TO: Mayor and City CouncilFROM: Alvin G. CoDATE: March 11, 2SUBJECT: Summary of Proposed Term s for Agreements With Maritime ParkDevelopment Partners

Attached for Council's information is a summary of the proposed tenns for theDevelopment and Lease Agreements between the Community Maritime Park Associates(CMPA) and the Maritime Park Development Partners (MPD P). While the summaryprovides an overview of the major issues proposed in the business relationship between theCMPA and MPDP, it should not be construed to address all o f the understandings that willultimately be contained in the final Development Agreement. The attached summary is asynopsis of the major deal elements which were the focus of negotiations.

On Tuesday, March 10, 2009, the Attorneys for MPDP provided the negotiatingteam and City staff a "black-lined" copy of the proposed Development Agreement. Adetailed review of the document will be undertaken by both consultants (Mr. Abramson andMr. Beitsch) to assure that all elements of the negotiations have been incorporated.Simultaneously, Mr. David Cardwell (consulting attorney) will conduct a review of thedocument to assure that the document is in the appropriate legal forma t. Concurrent withthe activities of the City consultants, City staff will review the document to assure that thebest interests of the City are being m et. While all will endeavor to complete the review asquickly as possible, the significance of the issue warrants suficient time to thoroughlyreview the document; however, at the latest, City staff anticipates the review will becomplete no later than March 31 , 2009.

Upon completion of the review of the Development Agreement, the final draft willbe provided to City Council and City Council can advise as to when the document shouldcome forward for formal consideration if prior to the thirty (30) day review period desiredfor major documents.Attachment


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ABRAMSON ASSOCIATES,nc.Real Estate Advisory Services

MEMORANDUM

TO: A1 CobyCity Manager, City of PensacolaFROM: Barry AbramsonSUBJEC T: Summary of Proposed Terms for Master Development Agreement andLease between Comm unity Maritime Park A ssociates, Inc. and MaritimePark Development Partners for Comm unity Maritime ParkDATE: March 11,2009

Maritime Park Development Partners (M PDP) proposed a draft development agreement for itsacting as master developer for Community Maritime Park in December, 2008. Significantunresolved issues and concerns were noted by City Council, staff, and consultants. At theCity Council Workshop on January 23,2 009 , the C ity tasked Abram son & Associates, Inc. towork, along with O wen Beitsch of Real Estate Research C onsultants, advising his client,Community Maritime Park Associates (CM PA), to negotiate a deal with MPD P that would bereasonab le and in the best interests of the City; specifically a deal that would entail all of thefour roles M PDP had proposed playing in the project, as long as terms could be the negotiatedby which MPDP's playing these roles would be in the City's best interests in comparison withalternate options.After review of supplemental information provided by and negotiations with M PDP, we canreport that we believe we have agreem ent on the major sub stantive terms for such a deal.While the deal elements which were the focus of negotiation have been reviewed in writtenform and agreed upon by the parties, a redrafted developmen t agreement has not yet beenprepared. MP DP plans to provide a redrafted agreement within the next couple of days. It ishoped that agreement on this will follow shortly thereafter, though careful review and fine-tuning could extend the time required. We believe that the agreement on major termswarrants the additional time and effort to reach what w e hope will be a m utually satisfactorydevelopment agreement.At this point, we can state that the following majo r concerns have been satisfactorilyaddressed by the agreed upon terms, as summarized in following sections of this transmittal.

113 Chestnut Street 1Newton, MA 02465 1 tel(617)965-4545 1 ar:(617) 965-5431 /abrarnsonassoc.com


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ROLES OF MPDP AND CMPA AND PROJECT SCOPE AND BUDGETMPDP proposed and terms have been negotiated for it to play all fou r of the following roles:

Development Manager for the Site Preparation P roject and Public Improvem ents(defined herein a s M ulti-Use Stadium and the P ark)General Contractor for the Site Preparation Project and Public ImprovementsDeveloper of the private development parcelsManager of the Public Improvements

Concerns expressed about the draft development agreement w ere:The conformance of the draft agreement w ith the RFQ if MPDP acts as generalcontractor for the Site Preparation Project and the Public Im provements;The advisability of M PDP playing all four roles and the need for the contractual rolesto be clearly defined with provision for termination for unsatisfactory performance;The need for CMPA to employ an additional layer of construction owner'srepresentation if MP DP acts as general contractor;Confirmation of the role of CMPA and the City a s solely responsible for approvingdesign changes in the Site Preparation Project and the Public Im provements;The lack of interest in M PDP's providing private financing for the Site PreparationProject and the Public Improvements;Given the difficulty in attracting private developmen t in the near future, theimplications for changes to program or phasing; andThe continued role of CM PA if M PDP plays all four roles.

We believe the negotiated terms satisfactorily address these concerns.It is our understanding that MPD P's playing all of these roles is not inconsistent with theprocurements process. We believe that the terms sum marized in following sections of thistransmittal result in the roles being clearly defined and M PDP 's playing all these roles notbeing in conflict with CMPA's and the City's interests.We have negotiated what we consider to be reasonable payment provisions for termination atCMPA's discretion, as described more fully in the Developm ent M anager section below.


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CMPA will need to engage qualified construction owner's representation and related supportservices to ensure its and the C ity's interests are adequately protected. Accordingly, we havestipulated that the $38 million budget will have to include allocation for CMPA's constructionowner's representation and supporting services (e.g. cost estimation, design review),estimated at $500,000 in add ition to the $200,000 fo r administration already allocated fromthe Public Financing outside the $38 million budget. We believe that the development feesthat have been negotiated with MPDP are reasonable after accounting for the cost of CMPAowner's representation.Additionally, we have stipulated that the $38 m illion budget will include an allocation for anowner held contingency preliminarily set at 4% to protect CM PA and the City against coststhat may arise from unforeseen conditions or change orders.The budget for the Site Preparation Project and Phase 1 Public Improvem ents financed by thePublic Financing shall be a minimum of $38 million and no more than $38 million shall comefrom bond or bridge financing from the CityICRA. No private financing will be allowed.The program of Public Improvements that can be constructed with the rem ainder of the $38million budge t (or a larger budget, if net additional public funds from sources other than theCity can be obtained for the project), will be the subject of pre liminary design, estimation,value engineering, and program ming efforts, which shall constitute a major element ofMP DPY s nitial work. Based on the budget submitted by M PDP as Exhibit F of its draftdevelopment agreement in December, it would appear that approximately the same programof Phase I Public Improvements could be estimated to be constructed, with the aboveallocations for owner contingency and ow ner's representation and related services offset bydecreased construction fees and reimbursable expenses that have been negotiated. Should theavailable public funds be estimated to be inadequate to support a desired program, phasing orother strategies would be considered.CMPA, along with the City and their professional advisors, will have an important ongoingrole in prom oting the public's interests in the project. This will include review andauthorization of all programm atic and design changes in the Site Preparation Project and thePublic Improvements proposed by M PDP, which approval shall rest solely with the CM PAand the City. Approval of private developmen t in a manne r consistent with the designcriteria, in addition to numerous other responsibilities essen tial to the realization of full publicbenefit for the project are v ital, as more fully addressed in the last section o f this transmittal.


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reimbursable, their compensation coming only from the development fee. Approved thirdparty expenses incurred after execution of the development agreement shall be reimbursable.All third party cost reimbursements shall be subject to CMPA review, approval, and audit.DepositIn recognition of the considerable pre-execution and early stage investment of effort and cost,a portion of which will not be recouped by initial development fee, no good faith deposit willbe required.Key ManBruce Cutright, who w as identified in the proposal a s project manager andwhose specializedexpertise was considered a major asset of the team, has been specified as a key man and aminimum level for his involvement throughout the project required.

GENERAL CONTRACTOR FOR SITE PREPARATION AND PUBLICIMPROVEMENT PROJECTSConcerns expressed about the draft development agreement relative to this role were:

That compensation for overhead, profit, and general conditions, and contingency andcost savings provisions be specified in the agreement and reasonable in the context ofthe construction marketplace.

MPDP's role as general contractor shall be subject to negotiation of a design-build contract(s)and GMP contracts. CM PA, using qualified construction representation, will ensure in thenegotiation of these contracts that any reasonable concerns about staffing, organization,financial capacity at risk, and financial and other arrangements are adequately addressed toprovide confidence that MP DP will be a high quality and cost-effective contractor. At thispoint, the terms negotiated in the development agreement are confined to setting terms formajor compensation and financial elements and setting a framework for mov ing forward. Webelieve that the negotiated terms satisfactorily address the major issues that can be resolved atthis stage; the subsequent effort in the design-build and GM P contracting stages will beessential to ensuring that this element is satisfactory.Profit and Overhea dProfit and overhead com bined shall be 3.0%, which is considered to be in range that iscompetitive in the current construction industry .


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Total general conditions are to be capped in the design-build contract and specific elementssuch personnel costs and the payment and performance bond fee have been capped in thedevelopment agreement.Personnel costs for preconstruction services will not be reimbursable except: that theseservices can be billed w ithin the pre-financing deve lopment fee (though not increasing thetotal amou nt of the total fee); and a s reasonably allocable to any portion of the w ork for whichMPDP is awarded a GM P contract.ContingencyGeneral Contractor held contingency shall be 4.0%, under the condition that an owne r heldcontingency in the same amount shall be allocated to CMPA, subject to adjustment in light ofdesignlengineering, budget considerations that can be better assessed as the design processproceeds.Cost Savings100% of all cost savings shall be returned to CM PA for use in the project.QualificationsMarc White, who would head the construction group within M PDP, will be a key man andappropriate staff and organizational structure will be assembled to capably fulfill the role ofgeneral contractor.Warranty GuarantyMPDP m ember(s) must guaranty, insure, or otherwise set aside funds fo r some period of timeafter completion of Public lmprovements to cover warranty risk. Specifics shall be negotiatedin the design-build contract.Payment and Performance BondThe payment and performance bond must be issued by a surety company with an A rated Bestrating. No later than the latter of three months after execution of the development agreementor two months after the closing on the public financing, MP DP shall provide CMPA with aletter of intent with an authorization by an attorney in fact attached from a surety companywith an A rated Best rating that the company would provide M PDP w ith a payment andperformance bond for the type and scale construction project(s) contemplated in thedevelopment agreement.


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MANAGER OF THE PUBL IC IMPROVEM ENTSConcerns expressed about the d raft development agreement relative to this role related to:

MPDP's qualifications;The rationale for its management of the multi-use park if a third party manager wouldbe engaged for that role;The term for which it makes sense to commit to a m anagement agreement;Performance standards for renewals beyond a five year term;The reasonableness of fees; andConcern about CMPA operating shortfalls

We believe that, while MPDP lacks experience in managing these type of facilities, thefinancial motivation of maximizing the attractiveness of its private development land shouldresult in its enlisting the appropriate expertise and managing the improvements in a mannerthat will benefit all parties.TermWe also see good reason for MP DP's having the ability to m anage the facilities over arelatively long period to ensure maximization of its development rights, a s long as it is doinga capable job and CM PA is not operating in the red. Concerns about the length of themanagement commitment and the possibility of CM PA experiencing operating shortfalls havebeen addressed by provisions fo r termina tion in the even t of sustained negative cash flow andrenewal subject to M PDP having evidenced an ability to manage within budget.Specifically, the agreemen t calls for an initial five year term with o ne five year renewal whichshall be exercised at M PDP's discretion unless the actual approved expenses for either of thelast two years of the initial term fo r which full financial inform ation is available exceeded by20% or more the budgeted expenses for those years for any reason, in the absence of anextraordinary event or without the direct interference of CM PA.CMPA can terminate the m anagement agreement with 90 days notice at any ime during theinitial or renewal term if CMPA net opera ting cash flow is negative for any 12 month period(except to the extent due to an extraordinary event or direct interference of CM PA), unlessMPDP chooses to make up the difference to m aintain the agreement.


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FeesWe believe the fee s that have been negotiated are in a forma t and at a level that are reasonablefor the type of services provided and safeguard against excessive third party managementfees. Specific fee provisions are as follows:The multi-use stadium managem ent fee shall be at a com mercially reasonable rate for suchservices and shall be subject to audit and, if provided by a third party m anager, shall be passedthrough at cost, but in no even t shall it exceed either $2 50,000 or a com mercially reasonab lerate.$20,000 per year flat fee for public arealpark management, increasing at CPI. The structure ofthis portion of the fee is conside red appropriate as it is essentially paying fo r a non-revenueproduc ing elemen t of the project.10% of revenues from events, facility rentals, sponsorship up to $1 million of combinedrevenues, then 5% after that. This is considered an appropriate incentive fee with the lowerpercentage applying above a threshold keeping it from getting excessive while still incentingand rewarding performance.4% of office or other income from Public Improvements (exclusive of the multi-use facility)which it manages. This would be an appropriate fee that would be payable to any third partyproperty manager for office, conference center, or other uses.TerminationIn addition to termination for sustained negative cash flow, termination of the m anagementagreement may result from termination for cause under the development agreement or, atCM PA Ys iscretion, after MPDP no longer holds development rights or ow ns property in theproject.Other terms relating to managem ent shall be specified in a s eparate management agreementfollowing execution of the development agreement.


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DEVELOPER OF PRIVATE DEVELOPMENT PARCELSConcerns expressed about the d raft development agreement relative to this role were:

Setting land pricing and lease terms applying over a long time ho rizon starting in adown part of the cycle that will allow deve lopment in the near term while not under-pricing land as the market imp roves and will help maximize desired development;The appropriateness of the term (length) of leases;Holding MPDP to a schedule to maintain its development rights while allowingreasonable flexibility for market conditionsEnsuring development in a form and prom oting a mix o f uses conducive to the intentof the design criteria.

We believe the negotiated terms accomplish these objectives.Land Take-Down FormLand shall be leased on a parcel by parcel basis as construction of individual buildings are tobe undertaken.Land PricingGiven the expectation that substantial private developm ent by M PDP is not imminent due tothe depressed state of the real estate market and that estimating reasonable land pricing over along term is problem atic, the lease rates for the private land are to be se t and periodically resetusing a future land pricing approach, as opposed to fixing pricing a t this time.A fair approach for periodically setting land pricing has been agreed upon. The land pricingdetermined by this app roach (for the initial and subsequent price setting periods) would beapplicable to any private land that wou ld be leased on a parcel by parcel basis fo rdevelopment on which substantial construction com mences w ithin 30months of the pricingdetermination.The land pricing would be set for a matrix of potential uses (e.g. residential, office, retail,restaurant, hotel, at w aterfront versus non-waterfront locations) on a per buildable square footbasis.The land pricing for a particular building would be determined based on applying the persquare foot pricing to the square footages attributed to the use components.


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The process, while allowing the opportunity for negotiation , would not require it. The processwould be initiated by MPD P which would propose land pricing for the m atrix of uses andprovide analyses supporting the proposed land pricing. CMPA and its advisor would reviewMPDP's submittal, prepare its own estimates, and either agree or turn the determination overto a mutually agreeable third party expert.The land pricing would be converted to lease rates per buildable square foot at a percentage ofcapital land price. For the initial 30 month period this percentage wou ld equal a weightedaverage based on 6.0% fo r residential building square footage and 7.0% for nonresidentialsquare footage, with the difference in the percentag es reflecting both market return rates andproviding an incentive for inclusion of residential use in the project w hich is consideredimportant to fulfilling the vision for the project. For developments u ndertaken during thisinitial 30 month period, lease payments would escalate annually at 2.0%.For parcels developed in later periods, the lease rate p ercentage would be determined at thetime of the subsequent land price setting(s ) based on an overall real estate return rate, asreported in a specified national real estate inves tment survey, with res idential receiving alower rate than nonresidential; and the annual escalation rate being fixed a t the CPI rate at thattime less 1.0%.For example, if the land pricing determ ination for residential use is determ ined to be $1 0 perbuildable square foo t and the land pricing for a nonresidential use is determined to be $20 perbuildable square foot, then if the developm ent were to start substantial construction within the30 month period of the initial price setting, and if the building to be constructed on the parcelincluded a total of 20,000 squ are feet of gross building area, with 10,000 square feetattributable to each of the two use components, then the first year lease payment would be$19,500, based on the following calculations: land price on a capitalized basis at $300,000($10 x 10,000 square feet plus $20 x 10,000 square feet); conversion to initial lease year leaserate at 6.5% (50% nonresidential@ 7.0% and 50 % residential@ 6.0%). The second yearlease payment would be $19 ,890 ($19,500 x 102%).The lease payment would be subject to adjustment as follows. To the extent the developmentfor that parcel incorporates structured parking, the pricing for that parcel would be adjusted toreflect the additional cost of such parking beyond w hat w as assumed in the pricingdetermination after subtracting from that am ount the value of any public financing provided tothe development project on that parcel. Any such adjustment could not reduce land leasepayments for other parcels without the authorization of CM PA. The determination of the


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increment of cost attributable to structured parking would require MPDP o present aproposed adjustment with relevant construction and development analyses to CMPA for itsreview with a process for determination as specified above for the pricing matrix.The rationale for the parking cost adjustment provision is that it would prom ote an enhancedbuild-out of the site, which will maximize both activity and TIF revenues (which should offsetlease revenues that might be foregone due to such adjustment).Each party will pay for its own cos ts in the process an d share equally the costs of the thirdparty expert, if required.Lease TermAny parcel required for construction of a building in which a minimum of 20% of enclosedfinished area occupiab le by tenan tslend users (exclud ing parking) is allocated to residentialuse shall be leased for a term of 99 years.Any parcel required for construction of a building which w ill be or inc lude a hotel shall beleased for a term of 80 years (unless such building also m eets the residential threshold, inwhich case the lease will be 99 years).Any parcel not meeting either of the abo ve conditions shall be leased for a term of 60 years.The rationale for the different terms is as follows.Residential, which may be d eveloped as condominiums or later converted to condominiums,would require a 99 year term to be marketable on a for-sale basis. Additionally, this longlease term is an additional incentive to promote inclusion of residential use in the project.The relatively long lease term for hotel is provided in recognition that this use would be animportant contributor to the activation of the project and support other uses such as theconference center, but attracting a hotel and making a feasible deal could be challenging ,warranting the benefit of the longer lease term.


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While a 60 year lease term is considered to be at the lower end of the range that is viable forsubstantial development, we con sider this term to be mo st viable for commercial office orretail development.Timing of Land Lease Paym ents for Developed Parc elsLease payments would commence upon the earlier of substantial completion or 24 monthsafter commencem ent of construction. This timing, matching the payment of land leasepayments to when the project starts earning revenues, is reasonable and common in public-private land leases.Development Pace to Maintain Lease Rights to Undeveloped L andSubject to the provisions in the following paragraphs , starting at 30 months follow ing theexecution of the development agreement, MPD P (or its sub-lessee(s)) would be expected tocommence construction on a pace that would result in an annual average of 30,000 square feetof private development (defined as privately financed d evelopment, including uses such asoffice, residential, retail, restaurant, hotel, but excluding confe rence cen ter (unless developedwith private financing), UWF facilities, or other non-privately financed uses)).MPDP shall maintain a development pace as follows to avoid penalty and maintain itsdevelopment rights:

Substantial construc tion on a first building of no less than 30,000 squa re feet GBA of privatedevelopment is commenced w ithin 30 m onths following the development agreement andsubstantially com pleted within 48 months of the development agreement.The above pace and provisions would apply to each subsequent year (e.g. commencement ofconstruction on a second building of not less that 30,000 square feet n o later than 42 monthsfollowing the development agreement and com pletion no later than 6 0 months following thedevelopment agreement), except that private development shall be considered cumulatively,i.e. a 60,000 square foot building in the first period would automatically satisfy the obligationrelative to the second period .Should a building be develop ed by any party contain ing space for the Studer Group , theportion of the gross building area allocable to Studer's occupan cy would not count towardMPDP's obligations under the development pace provisions, but the rem aining additionalgross building area allocated to private development (as defined previously in this section)would count toward that obligation. The rationale for this is that even if M PDP doesn't


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develop this building, development is proceeding on the site and space other than thatoccupied by Studer would be "using up" some of the market for developm ent that mightotherwise be available to MPD P during that time frame.The above time periods could be extended for up to 12 months in the event a condition ofeconom ic distress prevails at the time the construction start-trigg ered penalty provision isscheduled to apply. A condition of economic distress can be automatically considered toapply if, at the time MPDP prop oses to exercise this right, it can present evidence of distressin the housing and office markets based on pub lished benchmark s specified in the agreement.If MPDP exercises its right to an extension for condition of economic distress, it mustsubsequently construct a minimum of 30,000 square feet of additional private development, inorder to exercise that provision a second time. In no event, shall there be more than a total oftwo extensions for a condition of economic distress.Failure to maintain the above-specified pace of developm ent, as may be extended by thecondition of economic distress provision, would result in the following:MPDP would be able to ma intain its lease rights for an addition al 12 month period by paying$3,000 per month per acre for any undeve loped parcels until such time a s it is in confo rmancewith the development pace schedule if within that 12 month period. Such payments wouldnot be refundable or credited toward the later lease paym ents.TerminationIf MPDP is not in conformance at the end of the above 12 month period, CM PA would havethe right to terminate MPDP's rights to lease any of the remaining private land.Add itionally, CMPA may also terminate MPDP's rights to lease private land on which it hasnot yet comm enced substantial construction subject to the provisions for termination for causeunder the development and lease agreements.Consistency with Intent of Design CriteriaIt is the clear intent of the design criteria to encourage a vibrant mix of uses and designcompatible with promoting a vibrant, pedestrian friendly, seven day a weekhound the clock,mixed-use environment. While we believe that CM PA's approval rights for design ofbuildings would provide it standing to prom ote these intents, we felt it to be important toexplicitly secure the following provisions as to use and design:


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Ground floor space facing streets that are planned to encourage pedestrian activity shall bedesigned and constructed in such a manner as to accommodate viable street-oriented retail orrestaurant use by m eans of shop window frontages, entries directly accessing the street, andthe like. The tenanting of such space for retail or restauran t use may or may not be viable,and especially problem atic in early stages, but designing the space a s specified above wouldmaximize the potential that, even if not initially viable, such use cou ld eventually occupythese spaces; and, for the time and to the extent such tenanting is not viable, at least otheruses, such as professional or service firms, that could be attracted to public-o riented space,would likely occupy the space and contribute to an active, public-oriented pedestrianexperience.

Additionally, MPD P will acknowledge the importance of including rebillrestaurant, upperfloor residential, and hotel uses in the project and w ill include such uses as makes sense for itto do so in the context of market, financial, and developmen t realities. This is not a hardrequirement, which would be im practical, but, in addition to the other incentives mentionedpreviously in this section, we feel it is a meaning ful statement of shared vision and intent.Studer BuildingIt is understood that the Studer Group will have an option for a lim ited time to lea se directlyfrom CMPA land upon which it may construct its office building.CMPA will use "best efforts" to co-ordinate with MPDP in the selection of the site and itsintegration into the overall project. As possible, M PDP, CM PA, and Studer shall try to agreeon mutually acceptable locations andlor parameters for siting such a building andspecification of such siting in the developm ent agreement. So as not to unduly impinge on theproject or MPD P's development rights, the agreements between CMPA and Studer shouldrequire the Studer building be designed in conform ance with the des ign criteria with amaximum footpr int of 20,000 square feet and that a fair arrangement be reached for it sharingin its responsibility for parking.SubordinationThe leased fee interest for private developmen t parcels shall in no way be subord inated to anyfinancing.


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AssignmentMPD P's a ssignm ent rights for a sub-lease, which would be activated by its startingconstruction, would be strong, basically allowing it to assign its leasehold position essentiallyto any legitimate, law-abid ing buyer. MP DP's rights to parcels not yet taken down would besubject to CM PA approval versus at MPD P's discretion.

ROLES AND ACTIONS REQUIRED OF CMPA AND THE CITYThe project and agreement entail many interrelated elements and cover a long period of time.Over that time, there will be approvals and other actions required of CMPA and the C ity, andtheir u nderstanding of the framework and aspects of the project and agreement and theirexecution of their responsibilities will be critical to how well the pro ject realizes theirprogrammatic, policy, and financial objectives.Over this long time frame, CMPA Board m embers and City staff overseeing the project mayturn over, resulting in a loss of institutional memory of the framework and interrelationshipsfor the agreement.These issues are found in many long-term public-private deals. Given these issues,successfully implementing the following guidelines are imperative to CMP A and the Cityachieving maximum realization of their objectives.

All actions that CM PA is responsible for which im pact any of the City's interests inthe project should be engaged only with the active review and approval of the City.CMPA should engage a highly experienced construction owner's representative toparticipate in negotiating the design-build agreement and then to approve and overseeMPD P's desigden gineering and construction general contracts for the project and itscomponents.The owner's representative , be it an individual(s) hired as staff or a firm specializingin this field, should have extens ive experience in construction and in therepresentation of owner's interests in such situations.This expertise should be engaged as soon as possible, with the goal of having it onhand at the time the development agreement is executed, or a s soon thereafter aspossible, so as to be available as M PDP is ready to n egotiate the design-build contract,initiate design and preconstruction services.


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= To the extent engagement of this expertise is subject to a procurement process of anylength, indicating delay in bringing this service on board until significantly after theexecution of the development agreement, if it is possible to engage such expertise on amore limited basis for the short term, that would be preferable to not having thesupport of such expertise at all; however, it is em phasized that the best option is tohave the party that will act as owner's rep over the long term involved in the design-build negotiation and oversight of the early stage effort.The same recommendation applies for engaging an attorney experienced in nego tiatingdesign-build and construction agreements and professionals with expe rtise in urbandesign, architecture, and m ixed-use development to advise CMPA and City on themerits of refinements to design and programming which M PDP m ay propose.Administrative staff should be determined with a view toward long term involvementand complem enting the construction owner's representation function.CMPA and the C ity should advocate adherence to the design criteria and principalsembedded in them for creating a vibrant, pedestrian friendly, seven day a weeWroundthe clock, mixed-use environment, while being flexible to amend aspects of the criteriaand project as may be warranted to recognize practical considerations as long as theessence of the criteria's intent is maintained.CMPA's owner's representation, supported by cost estimation services, should closelymonitor the preconstruction phase and proposed GM P contract(s) to ensure issuesimplying risk, cost, quality, or d elay are adequately addressed and com petitive,market-reasonable pricing is attained, and then diligently represent CMPA and Cityinterests throughout construction.CMPA and City should be aware that appropriate land pricing may changesignificantly from one land price setting period to the next and should enlist capableprofessional support with expertise in developmental land economics to represent theirinterests in the price setting process.


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DEVELOPMENT AGREEMENT(Community Maritime Park Project)

between

COMMUNITY MARITIME PARK ASSOCIATES, INC.

and

MARITIME PARK DEVELOPMENT PARTNERS, LLC

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TABLE OF CONTENTSARTICLE I.DEFINITIONSSection 1.01 DefinitionsSection 1.02 Use of Words and Phrases

Section 1.03 Florida StatutesARTICLE II.PURPOSE AND INTENT; SCOPE AND COMPENSATIONSection 2.01 Purpose and Intent of this AgreementSection 2.02 Cooperation of the PartiesSection 2.03 Authorized RepresentativeSection 2.04 Project CoordinationSection 2.05 Operating Responsibility, Funding, and Revenues.Section 2.06 Development and Management FeesSection 2.07 Public RecordsARTICLE Ill.

PROJECT SCHEDULESection 3.01 Project ScheduleARTICLE IV.SlTE PREPARATION PROJECT AND PUBLIC IMPROVEMENTSSection 4.01 PermitsSection 4.02 ConstructionSection 4.03 Site Preparation Project Plans and SpecificationsSection 4.04 Construction of the Site Preparation Project by Entity(ies) Not Affiliatedwith the DeveloperSection 4.05 Site Preparation Project Completion CertificateSection 4.06 Public lmprovements Plans and SpecificationsSection 4.07 Construction of the Public lmprovements by Entity(ies) Not Affiliated with

the DeveloperSection 4.08 Construction by Entity(ies) Affiliated with the DeveloperSection 4.09 City Not in Privity with ContractorsSection 4.10 Payment of Contractors and SuppliersARTICLE V.SlTE PREP ARATION PROJECT AND PUBLIC IMPROVEMENTS BUDGET ANDFINANCINGSection 5.01 BudgetSection 5.02 Public lmprovements FinancingSection 5.03 Developer-Identified Sources of FinancingSection 5.04 Payment of Public lmprovements CostsSection 5.05 Reporting and AuditingARTICLE VI.SUB-LEASE OF PRO JECT SlTESection 6.01 Sub-LeaseSection 6.02 ParcelsSection 6.03 Notice of Intention to Sub-subleaseSection 6.04 The Developer's Right of Access to the Project SiteSection 6.05 Signs

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1 ARTICLE VII.2 INSURANCE3 Section 7.01 Insurance Req uirements Generally4 Section 7.02 Insurance During Construction of the Project5 Section 7.03 Waiver of Subrogation Requirement6 Section 7.04 Insurance After Com pletion of Con struction7 Section 7.05 Insurance Exclusive of Indemnity8 ARTICLE VIII.INDEMNIFICATIONSection 8.01 lndem nification by the De veloperSection 8.02 lndem nification by CMPASection 8.03 Limitation of lndem nificationSection 8.04 Limitation of Liability

ARTICLE IX.REPRESENTATIONS, WARRA NTIES AND COVENAN TS OF THE DEVELO PERSection 9.01 Representations and WarrantiesSection 9.02 CovenantsARTICLE X.REPRESENTATIONS, WARRAN TIES AND COVENANTS OF CMPASection 10.01 Representations and WarrantiesSection 10.02 CovenantsARTICLE XI.CONDITIONS PRECEDENTSection 11.01 Construction of Site Prepa ration ProjectSection 11.02 Respo nsibilities of the P arties for Co nditions Precede ntSection 11.03 Certification of S atisfaction of W aiverARTICLE XII.DEFAULT; TERMINATIONSection 12.01 Default by the Develop erSection 12.02 Default by CMPASection 12.03 Obligations, Rights and Rem edies CumulativeSection 12.04 Non-A ction on Failure to Obse rve Pro visions of thisAgreementSection 12.05 TerminationSection 12.06 Termina tion CertificateARTICLE XIII.RIGHT TO CO NTESTSection 13.01 Right to Co ntest

Section 13.02 ConditionsARTICLE XIV.DISPUTE RESOLUTIONARTICLE XV.UNAVOIDABLE DELAYSection 15.01 Unavo idable DelayARTICLE XVI.



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RESTRICTIONS ON USESection 16.01 ProjectARTICLE XVII.FIRE OR OTHER CA SUALTY; CONDEMNATIONSection 17.01 Loss or Damage to Project

Section 17.02 Partial Loss or Damage to Project.Section 17.03 Project Insurance ProceedsSection 17.04 Notice of Loss or Damage to ProjectARTICLE XV III.MISCELLANEOUSSection 18.01 AssignmentsSection 18.02 Successors and AssignsSection 18.03 NoticesSection 18.04 SeverabilitySection 18.05 Applicable Law and ConstructionSection 18.06 Venue; Submission to JurisdictionSection 18.07 Agreement Not a Chapter 86- 191, Laws of Florida,

Development AgreementSection 18.08 Complete Agreement; AmendmentsSection 18.09 CaptionsSection 18.10 HolidaysSection 18.1 1 ExhibitsSection 18.12 No BrokersSection 18.13 Recording of Development AgreementSection 18.14 No General ObligationSection 18.15 Technical Amendments; ChangesSection 18.16 Term; Expiration CertificateSection 18.17 Change in ControlSection 18.18 Approvals Not Unreasonably WithheldSection 18.19 Time Is of the EssenceSection 18.20 Effective Date



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EXHIBITABCDEFG

HI

LIST OF EXHIBITSDESCRIPTIONProject S iteParcel PlanDevelop er's Project ProfessionalsProject ScheduleSite Prep aration Project Completion CertificatePublic Improveme nts BudgetForm of Sub-LeaseAgreem ent Termination CertificateAgreem ent Expiration Certificate



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(3) "Agency" or " C R A means the Community Redevelopment Agency of the City ofPensacola, Florida, a body politic and corporate created by the City pursuant to Part Ill, Chapter 163,Florida Statutes.(4) "Agreement" means this Development Agreement, including any Exhibits, and anyamendm ents hereto or thereto.(5) "Agreement Ex piration Certificate" means the instrument executed by the parties heretoas provided in Section 18.16 hereof certifying that all obligations of the parties hereto have been satisfiedand this Agreement has expired in accordance with its terms, the form of which is attached hereto asExhibit "I".(6) "Agreement Termination Certificate" means the instrument executed by the parties heretoas provided in Section 12.06 hereof, stating that this Agreement has been terminated prior to itsExpiration Date as provided in Section 12.05 hereof, the form of which is attached hereto as Exhibit "H".(7) "Area" means the area located within the corporate limits of the C ity having conditions ofslum and blight (as those conditions are defined in the Redevelopment Act) and for which the Trust Fundwas created.(8) "Authorized Representative" means the individual or individuals designated andappointed from time to time as such by CMPA or the Developer, respectively, pursuant to Section 2.03hereof.(9) "Bonds" means that part of the Public Financing consisting of the revenue bonds or otherObligations to be issued or committed to by the City to pay the Public lmprovements Costs in a netamount not to exceed $40 million and secured by payments made by the CRA to the City pursuant to theInterlocal Agreement.(10) "City" means the City of Pensacola, Florida, a Florida municipal corporation, and anysuccessors or ass igns thereto.(11) "City Council" means the governing body of the City, by whatever name known orhowever constituted from time to time.(12) "C M PA means Community Maritime Park Associates, Inc., a Florida non-profitcorporation, and any successors and assigns thereof.(13) "Comm encement Date" means the date on w hich the D eveloper commen ces or causes aContractor to commen ce construction of the S ite Preparation Project or the Public Improveme nts, that is,to begin meaningful physical development as authorized by Project permits, which is continued anddiligently prosecuted toward and with the objective of completion.(14) "Community Multi-Use Facility" means that component of the Public Improvementsconsisting of a structure that can be used for various public events, including professional or amateursports, concerts, and other commun ity events.(15) "Conference Center" means that component of the Project consisting of a venue in whichconferences, seminars, meetings and other similar-type events can be held, which may be p art of thePublic lmprovemen ts or the Private Improvements, as determined in light of market conditions and Projecteconomics.(16) "Construction Fund" means the special fund known as the Community Maritime ParkConstruction Fund established to facilitate the payment of the costs of the Site Preparation Project Costsand the P ublic lmprovements Costs as provided in Section 5.04 hereof.



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(17) "Contractor" means one or more individuals or firms constituting a general contractor orother type of construction contractor, including subcontractors, properly licensed by the State of Florida orother appropriate jurisdiction to the extent required by applicable law, authorized to perform constructioncontractor services in the State of Florida, registered with the City as required by applicable law, andbonded and insured to the extent required by applicable law and this Agreement.(18) "Control" means either the power to direct the management of a Person or fifty percent(50%) or more ownership interest in such Person.(19) "CRA means the Community Redevelopment Agency of the City of Pensacola.(20) "Design-Build Contractor" means a Person qualified as a design-build firm for purposes ofthe Consultants' Competitive Negotiation Act, Section 287.055, Florida Statutes.(21) "Design Criteria" means the design criteria approved by CMPA on November 28, 2007.(22) "Developer" means Maritime Park Development Partners, LLC, a Florida limited liabilitycompany, and any Person duly authorized by the Developer to act on behalf of the Developer inconnection with the Project, successors and assigns thereof as the context requires and as contemplatedby this Agreement.(23) "Development Fee" means the amount CMPA will pay the Developer as provided inSubsection 2.06(a) hereof.(24) "Effective Date" means the date specified in Section 18.20 hereof.(25) "Exhibits" means those agreements, diagrams, drawings, specifications, instruments,forms of instruments, and other documents attached hereto and designated as exhibits to, andincorporated in and made a part of, this Agreement.(26) "Expiration Date" means the date on which this Agreement expires, as evidenced by theAgreement Expiration Certificate being recorded in the public records of Escambia County, Florida, asprovided in Section 18.16 hereof.(27) "Financing Documents" means the ordinance, resolution or other documents dulyadopted by the City, the CRA, and/or CMPA, as well as any indenture of trust, trust agreement, interlocalagreement or other document relating to the issuance or security of the Bonds.(28) "Hotel Project" means that component of the Private Improvements that may consist ofthe design, development, construction, completion and operation of those buildings, structures, facilitiesand other improvements to be constructed and installed on a Parcel to be used as a hotel and usesappurtenant thereto.(29) "Interlocal Agreement" means the interlocal agreement between the City and the CRA,dated March 27, 2006, entered into pursuant to Sections 163.01 and 163.400, Florida Statutes, whichestablishes certain duties and responsibilities of each party thereto pertaining to the Project and the

implementation of this Agreement, including payment of funds from the Trust Fund to the City for paymenton the Public Financing.(30) "Management Fee" means the amount CMPA will pay the Developer as provided inSubsection 2.06(b) hereof.(31) "Maritime Museum Lease" means the sub-lease between CMPA and the University ofWest Florida for the Maritime Museum Site and the use, operation and management of such site and thestructure(s) thereon as a maritime museum and uses appurtenant and complementary thereto, includingclassrooms, offices, associated food service, and a museum store.



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(32) "Maritime Museum Project"' means the design, development, construction, andcompletion of those buildings, structures, facilities, and other improvements to be constructed andinstalled on the Maritime Museum Site, as provided in the Maritime Museum Lease.(33) "Maritime Museum Project Financing" means the funds provided by the University ofWest Florida, including fundraising, to pay the costs of the design, development, equipping andconstruction of the Maritime Museum Project.(34) "Maritime Museum Site" means the Parcel(s) on which the Maritime Museum Project willbe constructed and located.(35) "Master Development Agreement (2006)" means the Master Development Agreement(Community Maritime Park Project) dated March 27, 2006, by and between CMPA and the City.(36) "Master Lease (2006)" means the Master Lease (Community Maritime Park) dated March27,2006, by and between CMPA and the City.(37) "Obligations" means a series of bonds, obligations or other evidence of indebtedness,including, but not limited to, notes, commercial paper, capital leases, interlocal agreements, or any otherlawful obligations of the City, the CRA, or CMPA as the context requires and as contemplated by thisAgreement.(38) "Office Project" means that component of the Private lmprovements consisting of theoffice building(s) to be constructed on one or more Parcels pursuant to a Sub-sublease, including officespace to be leased and used by Studer.(39) "Parcel" means each distinct part of the Project Site as identified and depicted on theParcel Plan, including any changes in such plan made from time to time as provided herein and in theSub-Lease.(40) "Parcel Plan" means the depiction and description of each Parcel, which may be changedfrom time to time as provided in Section 6.02(c) hereof, the initial form of which is attached hereto asExhibit "B".(41) "Park" means that component of the Public lmprovements consisting of an open space,public park, and walkways.(42) "Payment Request" means the documentation supporting periodic payments for the SitePreparation Project and the Public lmprovements as provided in Section 5.04 hereof.(43) "Pelicans" means the Pensacola Pelicans professional baseball club or such otherprofessional baseball club owned and operated by Pensacola Professional Baseball LLC, a Floridalimited liability company, or any successor or assign thereof, which will use the Community Multi-UseFacility for its home baseball games.(44) "Person(s)" means any individual or entity, and the heirs, executors, administrators, legalrepresentatives, successors and assigns of such "Person" where the context so permits.(45) "Plan" means the community redevelopment plan for the Area, including the Project Site,as approved by the CRA and adopted by the City Council on March 27, 1984, by adoption of itsResolution No. 15-84, and including any amendments to the Plan, specifically including, but not limited to,the amendment adopted by the City Council on June 23,2005.



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(46) "Private Improvements" means the improvements constructed on the Project Site otherthan the Public lmprovements and the Maritime Museum Project, including, but not limited to, the RetailProject, the Hotel Project, the Residential Project, and the Office Project.(47) "Project" means, collectively, the Site Preparation Project, the Maritime Museum Project,the Public lmprovements and the Private Improvements.(48) "Project Coordinator" means the Developer, or its successor, who shall provide theproject coordination services described in Section 2.04 hereof.(49) "Project Professionals" means any architects, engineers, consultants, planners,construction managers or any other persons, or combination thereof, retained or employed by theDeveloper in connection with the planning, design, construction, and completion of the Site PreparationProject and Public Improvements, the preliminary list of which is attached hereto as Exhibit "C".(50) "Project Schedule" means those times, dates and time periods set forth herein or asagreed to by the parties for the commencement, construction and completion of the Site PreparationProject and Public lmprovements as provided in this Agreement, including Section 3.01 hereof, which isattached hereto as Exhibit "D".(51) "Project Site" means the area described and depicted on Exhibit "A", which includes eachand every Parcel.(52) "Public Financing" means the Bonds as initially issued or duly approved for issuance bythe City or other funds duly appropriated or otherwise made available to or by the City to pay the SitePreparation Project Costs and the Public lmprovements Costs and such other costs as may be requiredby this Agreement or any other agreement to be paid by the City.(53) "Public Improvements" means the improvements to be completed on the Project Site forthe use by the public to be designed, constructed, installed and equipped as provided in this Agreement,collectively consisting of the Community Multi-Use Facility and the Park.(54) "Public lmprovements Budget" means the budget setting forth the estimated SitePreparation Project Costs and Public lmprovements Costs, a copy of which is attached hereto as Exhibit"F".(55) "Public lmprovements Costs" means the costs of the Public lmprovements paid from thePublic Financing, including costs to plan, design, coordinate, and obtain the permits for the PublicImprovements, and the costs to construct, equip, install and complete the Public Improvements.(56) "Redevelopment Act" means Chapter 163, Part Ill, Florida Statutes (2008), as amendedfrom time to time.(57 "Residential Project" means that component of the Private lmprovements consisting ofthe design, development, construction, completion and operation of those buildings, structures, facilitiesand other improvements to be constructed and installed on the Project Site, which are to be used for

residential purposes and may also include commercial, retail and other non-residential uses located onthe different levels of the Private Improvements.(58 "Retail Project" means that component of the Private lmprovements consisting of thedesign, development, construction, completion and operation of those buildings, structures, facilities andother improvements to be constructed and installed on the Project Site, which are to be used forcommercial retail purposes, which may consist in whole or in part of retail uses located in other parts ofthe Private Improvements.

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(59) "Right to Contest" me ans the procedure set forth in Section 13.01 hereof for challengingany lien, payment, charge, or compliance with any law, rule, regulation or other legal requirement asdescribed therein.(60) "Site Preparation Project" means that part of the Project consisting of the design,development, installation, construction, and completion of those improvements that are necessary toprepare the Project Site for construction thereon of the Public Improvements and the PrivateImprovements.(61) "Site P reparation Project Completion Certificate" means the instrument executed by theDeveloper and CMPA certifying that design, construction, installation and equipping of the SitePreparation Project is substan tially complete and setting forth the date of su ch substantial completion, theform of which is attached hereto as Exh ibit "E .(62) "Site P reparation Project Completion Date" me ans the date on w hich construction of theSite Preparation Project is substantially complete as contemplated by this A greement and as evidencedby the Site Preparation Project Comp letion Certificate.(63) "Site Preparation Project Costs" means the costs of the Site Preparation Project paidfrom the Public Financing, including costs to plan, design, coordinate, and obtain the Site PreparationProject Permit, and the costs to construct, equip, install and com plete the Site Prepa ration Project.(64) "Site Preparation Project Permit" means, collectively, any and all permits, approvals,consents, and licenses required for construction, installation, and equipping of the Site PreparationProject; provided, however, that the term does no t include permits relating to bulkhead work issued by theU.S. Corps of E ngineers or the Florida Department of Environmental Protection.(65) "Studer" means The Studer Group LLC, a Florida limited liability company, an Affiliatethereof, or any entity Con trolled by Quint Studer.(66) "Sub-Lease" means the ground lease between CMPA and the Developer, the form ofwhich is attached hereto as Exhibit "G".(67) "Sub-Lease Commencem ent Date" means the date on w hich the Sub-Lease commencesrelative to the Sub-Leased Property or the date on which the Sub-Lessee is entitled to possession andthe Sub-Lease commences for one or m ore individual Parcel(s) as the context requires and as providedin the Sub-Lease .(68) "Sub-sublease" means the sub-sublease for any Parcel or Parcels being leased by theDeveloper to another for development, occupancy, use or possession of any part of the Privatelmprovements on that Pa rcel or Parcels.(69) "Termination Date" means the date on which this Agreeme nt is terminated by either partyhereto as provided in Section 12.05 hereof, as evidenced by the Agreement Termination Certificateprovided in Section 12.06 hereof.(70) "Trust Fund" means the community redevelopment trust fund in which incrementrevenues are dep osited created pursuant to Section 163.387, Florida Statutes, by Ordinance No. 13-84enacted by the City Counc il on M arch 8, 1984, or its successo r in function.(71) "Unavoidable Delay" means those events constituting excuse from timely performance bya party hereto from any of its obligations hereunder, as such events are defined in and subject to theconditions described in AR TICLE XV hereof.



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(72) "UWF" or "University of West Florida" means the University of West Florida, a publicinstitution of higher education that is part of the State University System of Florida, and also includes,whenever the context reasonably requires, the University of West Florida Foundation.Section 1.02 Use of Words and Phrases. Words of the masculine gender shall be deemed andconstrued to include correlative words of the feminine and neuter genders. Unless the context shallotherwise indicate, the singular shall include the plural as well as the singular number, and the word"person" shall include corporations and associations, including public bodies, as well as natural persons."Herein," "hereby," "hereunder," "hereof," "hereinbefore," "hereinafter" and other equivalent words refer tothis Agreement and not solely to the particular portion thereof in which any such word is used.Section 1.03 Florida Statutes. Unless otherwise noted, all references herein to Florida Statutes are toFlorida Statutes (2008), as amended from time to time.

ARTICLE II.PURPOSE AND INTENT; SCOPE AND COM PENSATION.Section 2.01 Purpose and Intent of this Aqreement.

(a) The purpose of this Agreement is to authorize the Developer to develop the PublicImprovements and the Private Improvements on the Project Site, as depicted and described on Exhibit" A , subject to CMPA's oversight and approval as specified in this Agreement, and consistent with theMaster Development Agreement (2006). The parties intend to further the implementation of the Plan byproviding for the completion of the Site Preparation Project. The design, construction and completion ofthe Public lmprovements shall be done in accordance with ARTICLES IV and V hereof. The design,construction and completion of each component of the Private lmprovements shall be in accordance withARTICLE VI hereof and the terms of the Sub-Lease and each Sub-sublease. In summary, the Developermay perform four distinct roles as outlined and governed by this Agreement and related agreementsreferenced herein:(1 ) The Developer shall act as the Project Coordinator as provided in Section 2.04hereof. CMPA shall compensate the Developer for these services, as they pertain to the Site PreparationProject and the Public Improvements, by payment of the Development Fee as provided in Subsection

2.06(a) hereof. CMPA shall not compensate the Developer for these services as they pertain to thePrivate Improvements.(2) The Developer shall act as CMPA's agent in managing the facilities and propertycontrolled by CMPA as provided in Subsection 2.05(c) hereof and the separate management agreementrequired therein. CMPA shall compensate the Developer for these services by payment of theManagement Fee as provided in Subsection 2.06(b) hereof. CMPA shall not compensate the Developerfor its management of the Private Improvements.(3) The Developer may act as the Design-Build Contractor of the Site PreparationProject and the Public Improvements, as CMPA determines in its sole discretion, as provided inSubsections 4.04(a)(2) and 4.06(a)(2) and Section 4.08 hereof. CMPA shall compensate the Developerfor its work as Design-Build Contractor, if any, by payment of fees pursuant to a separate design build

contract(s) to be negotiated pursuant to Section 4.08 hereof.(4) The Developer shall act as the developer of the Private lmprovements asprovided in ARTICLE VI hereof and the Sub-Lease attached hereto as Exhibit "G". The soleconsideration for the Developer's performance of this role shall be the agreement to enter into the Sub-Lease.

(b) It is the intent of the parties that the Public lmprovements and that part of the Project Siteon which the Public lmprovements and the Maritime Museum Project are located should be exempt fromad valorem taxation as such improvements will be owned by the City or a non-profit entity, will be for a public



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purpose, will be for public use and not for a predominant private use, and will be an asset of the City or a non-profit entity for the benefit of the citizens of the City. The parties further intend that the Private lmprovementsshould be subject to ad valorem taxation and that any Person owning, renting, or using any of the Privatelmprovements will not apply for or seek to have such property declared exempt from ad valorem taxation.(c) The Project Site is to be redeveloped according to plans and specifications for a multi-useProject, with re lated park, pedestrian walkways, streets, parking and infrastructure improvements. As provided

in this Agreement, the Developer shall carry out the redevelopment of the Project Site by completing theSite Preparation Project and the Public lmprovements pursuant to this Agreement, by entering into theSub-Lease, and operating the Project as a unified and integrated mu lti-use project.(d) The final design of the Project shall be in general conformance w ith the D esign Criteria;provided, however, that from time to time the parties may agree to design cha nges deem ed ne cessary inlight of market and other financial conditions. The determination whether such changes are necessaryshall be subject to CM PA's sole discretion.(e) The funding for the Site Preparation Project and the Public lmprovements shall be asprovided in Article V h erein. The Developer and CM PA shall cooperate with one another and with theCity, UW F, and other interested entities to obtain grants and other contributions in excess of the Bonds.Any such funds in excess of the Bon ds shall inure to the benefit of the Project. The funding for the

Private lmprovements shall be paid from sources of revenue generated by or allocated to the PrivateImprovements.(f) The City shall own the vertical and horizontal improvements constructed as part of thePublic Improvements. The City shall also own that part of the Property on which the Privatelmprovemen ts are constructed, subject to the M aster Lease (2006) and the Sub-Lease . The vertical andhorizontal improvemen ts constructed by the D eveloper as part of the Private lmprovements will be ownedby the Developer or any sub-sublessees subject to the terms of the Sub-Lease.

Section 2.02 Co o~ era tion of the Parties. The parties hereto recognize that the successfuldevelopme nt of the Project and each comp onent thereof is dependen t upon continued coope ration of theparties hereto, and each agrees that it shall act in a reasonable manner hereunder, provide the otherparty with complete and u pdated information from time to time, with respe ct to the conditions such party isresponsible for satisfying hereunder and make its good faith reasonable efforts to ensure that suchcooperation is continuous, the purposes of this Agreement are carried out to the full extent contemplatedhereby and the Project is designed, constructed, equipped, completed and operated as provided herein.Section 2.03 Authorized Re~resentative

(a) Upon execution of this Agreement, each party hereto shall designate in writing anAuthorized Representative to act on its behalf to the extent of the written grant of any authority to suchrepresentative. Written notice of the de signation of such a representative and the scope of hislherauthority (and any subsequent change in the identity or scope of authority of the AuthorizedRepresentative) shall be given by the designating party to the other p arty and to the City in writing inaccordance with the proce dure set forth in Se ction 18.03 hereof.(b) Except as otherwise expressly provided in this Agreement, wh enever ap proval or actionby the De veloper or CMP A is required by this Agreemen t, such a ction or approval may, in the discretionof the party considering such approval or action, be taken or given by the Authorized Representativethereof. A party to this Agreement may rely upon the representation of the other party's AuthorizedRepresentative that such person has the requisite authority to give the app roval or take the action b eingdone by that Authorized Representative. A party may not later deny that its Authorized Representativehad the authority represented to an d relied upon by the other party or revo ke or deny any action taken bysuch Authorized Representative which was relied upon by the o ther party.

Section 2.04 Proiect Coordination.



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(a) It is the intent and desire of the parties hereto that the Site Preparation Project and theplanning and construction of each component of the Project be coordinated with other parts of the Projectso as to minimize conflicts, improve efficiency and avoid delays in completion of the Project and each partthereof. To further the intent of the parties set forth herein and to provide the coordination necessary forthe successful and timely completion of the construction of the Project, the parties agree andacknowledge that there is a need for a project construction coordinator who shall be responsible forcoordinating construction of the various parts of the Project.

(b) CMPA and the Developer agree that the Developer shall be the Project Coordinator.(c) The Project Coordinator shall provide the following services:

(1) Maintain at all times sufficient facilities, staff and other resources as reasonablyrequired to perform its project coordination duties under this ~greement.(2) Coordinate pre-construction, construction and progress meetings concerningprocedures, progress, problems, and scheduling.(3) Coordinate construction of the Site Preparation Project and of the Public

Improvements, such that the likelihood of on-site disputes is minimized and proper coordination isprovided for phased or concurrent construction.(4 ) Monitor and record the progress of the construction of the Site PreparationProject and of the Public Improvements and coordinate regular and periodic meetings concerningconstruction progress.(5) Establish and implement appropriate administrative and financial controls for theadministration and monitoring of the Project.(6) Monitor construction progress at such times as may be reasonably required toprovide a reasonable basis for the evaluation of the progress of construction and to approve ordisapprove requests for payment made by the Contractor, or by any other parties with respect to the

design or construction of the Project and provide CMPA with monthly written reports on the progress ofdesign and construction of the Project.(7) Maintain complete and accurate records of the Project, including but not limitedto vouchers, statements, receipted bills and invoices, and all other records, covering all collections, if any,disbursements, and other material data in connection with the design and construction of the Project andmaintain a set of working plans and specifications, and addenda and change orders thereto, at theProject Coordinator's Project office, or such other location as may be approved by CMPA. This materialis to be made available to CMPA upon reasonable request.(8 ) Keep CMPA fully informed of the progress of the Project and promptly adviseCMPA of any proposed material deviation from approved plans and specifications. The ProjectCoordinator shall have the authority, without in each instance obtaining CMPA's prior approval, to

approve immaterial changes to the plans and specifications which are required by field conditions andthat cause no increase in the time or cost of development.(9) Timely advise CMPA of any known material disputes (actual or potential) relatingto the Project.(10) Recommend and advise CMPA concerning possible cost savings whereappropriate and any change orders proposed on the Project.



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(11) Develop and implement procedures and guidelines with respect to the storageand cleanup of building materials for the Project, whether on-site or off-site.(12) Cause all Project construction contract(s) to contain provisions requiring thateach Contractor be responsible for initiating, maintaining and supervising reasonable safety precautionsand programs in connection with its work, as well as giving notices and complying with applicable lawsbearing on the safety of persons or property or their protection from damage, injury or loss.(13) Comply with the requirements of all applicable laws, the permits and approvalsissued with respect to the Project.(14) Notify CMPA promptly upon discovery by the Project Coordinator of anyhazardous substances which have not been previously identified as an environmental concern.(15) Review and take action to cause all punch-list ltems or defect or warranty claimsto be promptly completed or corrected, as the case may be, by a Contractor within thirty (30) days ofreceipt of punch-list ltems or becoming aware of a defect or warranty claim.(16) Coordinate the compilation of all as-built plans and specifications and updatedsurveys including easements for the Project, as well as operating and maintenance manuals for allapplicable aspects of the Project both in hard copies and electronic versions.

(d) The Developer's compensation for acting as Project Coordinator shall be theDevelopment Fee as provided in Subsection 2.05(a) hereof.Section 2.05 Operatina Responsibility. Fundina, and Revenues.

(a) The Developer shall manage and maintain all Private lmprovements (retail, restaurants,office, residential, hospitality and associated common areas); provided, however, that if St