1.
Will Millennium LLC be part of the Biscayne Landing development team?
A.
Yes. Millennium LLC will work together with the Swerdlow Group and the LeFrak Organization to develop the project. These entities will own Oleta Partners LLC, the Tenant under the ground lease.
2.
Will City of North Miami residents and businesses be employed in the development?
A.
Yes. The current draft of the lease requires a commitment by Tenant to make diligent good faith efforts to hire City of North Miami residents and businesses, and comply with, Section 7-151 City Code of Ordinances, “Procedure to provide preference to local business in city contracts”. It also requires Tenant to implement an outreach program with a training component designed to increase City of North Miami resident and local business participation
3.
Where can I get a copy of the draft ground lease?
A.
A draft of the sub-lease will be posted on the City's website within the next month.
4.
Will the tenant be obligated to build on the Biscayne Landing site? What happens if the tenant doesn't keep its commitments to build?
A.
The Tenant has agreed to level the entire site, install the spine road through the entire site and to install all required utilities for the site within the first 5 years of the Lease.  It is estimated that this work will cost the Tenant approximately $25 million.  The Tenant has also agreed to construct approximately 500,000 square feet of construction in the first 10 years and build the active park.  If the Tenant does not meet this schedule without good justification, the City can default the Tenant and take back the property.  In addition, the Tenant will have paid the City, upfront, approximately $24 million which is non-refundable. The Tenant will also pay real estate taxes, insure the property, maintain the site and pay the City annual rent. With $50 million invested in the property before the first building is even built and the ongoing expenses for taxes, insurance, rent, maintenance, there is a tremendous incentive and financial pressure for the Tenant to construct the project as quickly as possible in order to recoup this large investment.
5.
Why can't the City of North Miami tell the tenant exactly what to build and when to build it so we know the improvements will be built?
A.
The City is not in the business of development of real estate, for good reason. Real estate development is a complex, risky business that requires expert analysis of markets and timing in addition to land planning and construction.  Therefore, it would not be wise for the City to try to dictate exactly what should be built and when.  The Tenant is made up of exceptional real estate developers, and will be in the best position to determine what should be built and the timing to maximize the chances of success for the project (and the City). Although the Tenant will make certain hard and fast commitments in the lease (see above) and will commit to the Concept Plan that will be part of the lease, it needs some flexibility to be able to respond to changes in the market and opportunities that are presented. At this point, it looks like the Tenant will build “big-box” stores and other retail space first, because it already has strong interest from retailers, a shopping area is  relatively fast to build out, and it will set the stage for the next development component. As noted above, with all of the money invested by the Tenant in the beginning, there is an exceedingly large incentive for the Tenant to get a successful project up and running as quickly as the market and economy will allow.
6.
Can the tenant sell the ground lease and walk away?
A.
This is currently being negotiated, but Oleta Partners will not be released from its obligations under the lease without the City’s consent during the first 10 years, the critical build-out period. Any successor tenant would need to be a “Qualified Developer” and meet certain conditions for net worth and experience.
7.
Who will pay the taxes on the property?
A.
The Tenant will be responsible to pay both the unpaid real estate taxes (2009 and 2010) from the last lease, and the all taxes during the term of the lease.
8.
What is the current status of the environmental clean-up of the Biscayne Landing site?
a)
What are the contaminants on the site?
GROUNDWATER REMEDIATION
  • Remedial Action Plan (RAP) has been approved by RER
  • Class 1 Deep Injection Well (DIW) – designed, permitted and construction completed
  • Class 1 Monitoring Well – designed, permitted and construction completed
  • DIW Pump Station – design completed, currently under plan/permitting review
  • Perimeter Extraction System – design completed, currently under plan/permitting review
A.
The main contaminant of concern for the site is ammonia in the groundwater. Iron has also been detected in localized areas of the site above the clean-up target levels. Benzene or other organic compounds have not been detected at levels above applicable clean-up target levels with any consistency. Groundwater and surface water at the site and adjacent to the site is monitored on a semi-annual basis by testing groundwater monitoring wells and surface water sampling locations. There are about 83 monitoring wells and 30 sampling locations sampled during each semi-annual monitoring event. The semi-annual reports are available to the public and can be referred to for more specific information regarding the existing onsite contamination.

In addition, low levels of methane gas have been detected at the site. This gas was generated by the biological breakdown of the landfill garbage. As a result, each building on the site will contain a methane gas control system to prevent methane gas buildup under the buildings. In addition, methane gas detection units with alarms will be installed throughout the buildings. It should be noted that in the 3 or so years that the Oaks buildings have been occupied, no methane gas alarm has alerted. 

b)
What is being done to clean up the contaminants? When will it start and how long will it take?
A.
A Remedial Action Plan (RAP) was submitted to the Miami-Dade Department of Permitting, Environment and Regulatory Affairs (PERA) on 12/19/11 formally providing the details of a remediation plan for the site. The current RAP has been under development in coordination with PERA since early 2010, and has been approved The plan generally consists of a groundwater extraction system along the perimeter of the property, which will collect the contaminated groundwater. The collected groundwater will be pumped to a Class I underground injection well which will discharge the groundwater to the Boulder Zone, approximately 3,300 ft below the ground surface.

The permit for the Class I well have been issued and drilling is completed. The extraction system will be constructed in two phases. The first phase includes an extraction system along the south and southeastern portion of the site. The first phase is anticipated to begin construction in December 2012. The RAP requires pilot testing of Phase I to optimize the second Phase, which will be installed along the northeastern portion of the property. Construction of the second phase is expected to be completed in 2014. The groundwater remediation system will be required to be in operation until groundwater contaminant concentrations are below the applicable clean-up target levels, which is normally estimated to take approximately 20 years.

c)
What does the capping do?
A.
Capping of the landfill provides a barrier to prevent human and animal contact with the onsite solid waste. Additionally, capping reduces rainfall infiltration into the onsite waste, which will reduce the source of groundwater contamination. 
d)
How is the environmental work being paid for?
A.
The design and construction of the remediation system is being paid for under an existing grant between the City of North Miami and Miami-Dade County for the closure and remediation of the landfill. In addition, the Tenant has agreed to be responsible for any costs required that exceed the amount of the grant.
9.
Where can I find copies of the agreements and permits relating to the environmental work?
A.
Information related to the environmental work are public records available via a public records request to PERA. The PERA reference number for the site is SW-1178/File 12838. These PERA documents can also be accessed on-line by going to the following website and clicking on the “here” button at the bottom of the page: Additional information is posted on the City’s website at:
http://www.northmiamifl.gov/departments/purchasing/ biscaynelanding/site_information.aspx.
10.
Would the property would be worth more if we wait until the injection well is installed and the land is properly capped, and then do an outright sale?
A.
Once the injection well system has been put in and all of the property has been capped, it will be easier to a certain extent for a developer to come in and build because the developer will not have to worry about putting in the injection well, and some of the capped area will be finished and stay in place. However, it is important to note that any developer will destroy the capped areas as it builds on the site in two ways: first in soils improvement activities and second in building construction. The soils improvement activities include a process known as “Deep Dynamic Compaction”. In this process, a 15,000 lb. weight is hoisted to a height of 60 feet and dropped repeatedly, depressing the soil as much as 4 feet in an effort to densify the landfill material and improve its load bearing capabilities. This process would also fracture the capped areas over and around the soil being compacted. The two feet of clean fill “cap” paid for by the County Grant will be buried into the landfill material and the money will have to be spent a second time by the developer to reinstate the two feet of clean cover, or cap. The same holds true for the building construction in the installation of water, sewer, power and communication raceways to the buildings. Underground power supply must be buried at least six feet below grade and all others at least two to four feet below grade. These activities also destroy the two feet of clean fill cap that is to be paid for by the County Grant. The developer will have to pay for and conduct this work a second time, and a significant portion of the economic advantage of utilizing the County Grant funds to offset this unusual development cost will be lost. Conducting this work twice will add time (estimated at two years) and ten plus million dollars to the overall cost of developing Biscayne Landing. In addition, because buildings and asphalt can constitute part of the cap (so 2 feet of clean fill would not be needed in these areas), capping then building could be less efficient and more expensive than a planned coordinated effort. This would be a waste of scarce County and City funds, and the added cost to the developer would actually reduce the value of the site to the developer because it takes away some of the available funds (from the County Grant) for capping. In addition, even after the site has been “closed”, there will be ongoing monitoring obligations and associated costs on the property for years to come. The Financial Cost Assurance Estimate dated August 17, 2011 shows an annual cost of $580,728.97 which will need to be placed in escrow or otherwise secured. This cost is not covered by the environmental grant from Miami-Dade County. Accordingly, there will still be environmental issues after the work on the injection wells and capping is completed. A potential buyer now and in the future would include all of these elements in a calculation of value.
11.
What is the environmental history of the Biscayne Landing property?
A.
Please click here for the attached summary of the regulatory history and the documents.
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