Non-Binding_Letter_of_Intent_KPDG_Jackie_Espinosa_Dec-17-2024_completed.pdf

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NON-BINDING LETTER OF INTENT TO LEASE

December 8, 2024 Jackie Espinosa Mayor, City of Kissimmee, FL 101 Church St.

Kissimmee FL, 34741

RE: Intent to Enter in a Lease Agreement and Investigate the Potential of a Public Private Partnership (P3) with the City of Kissimmee

Dear Mayor Espinosa:

The purpose of this Non-binding Letter of Intent (“LOI”) is to establish the intent for Kissimmee Place

Development Group, Inc. (hereinafter referred to as “KPDG”) and the City of Kissimmee (hereinafter referred to as the “City”) to negotiate and enter into a ground lease and to explore potential comprehensive agreements for a Public-Private Partnership (P3) to develop and manage two parcels of property owned by the City in response to that certain unsolicited proposal submitted by KPDG to the City on December

9, 2024 pursuant to section 255.065, Florida Statutes (the “Proposal”). It is expressly understood that the

City Commission will, at a minimum, need to consider the Proposal at a second-duly noticed public meeting, make a public interest determination, and publish required notice for at least 7 days (“Public

Comment Period”).

I. Premises.

This LOI pertains first, to approximately 8.5 +/- acres of property at Kissimmee Gateway Airport as generally depicted in the attached Exhibit "A.1" (hereinafter the "Airport Premises"). Second, to approximately 1.43+/- acres of City-owned land at and in connection with the ‘Toho Square’ site, which is currently undeveloped land surrounding the Toho Square garage as generally depicted in the attached

Exhibit "A.2" (hereinafter the "Toho Premises") (Airport Premises and Toho Premises referred to collectively as the “Premises”). The boundaries of each of these Premises will be specifically delineated by a survey performed by KPDG, and acceptable to the City for incorporation into any resulting lease agreement. Any comprehensive agreement or lease agreement for the Premises will utilize as its base the

City’s standard ground lease form for each property respectively.

II. Exclusionary Period.

Upon expiration of the Public Comment Period and provided there are no alternative proposals timely received, only KPDG will be authorized to negotiate for the control of the Premises for a period of one year, unless this LOI is terminated sooner pursuant to its terms.

III. New Corporate Vehicle

It is understood that a new corporate vehicle is established as Kissimmee Place Development Group, Inc.

with the intent to allow for facilitation of the project as described in KPDG’s unsolicited proposal. KPDG will be the managing partner sole entity responsible for the development of the Premises with all ability to

Develop, Build, Finance, Operate, and Manage (DBFOM) the development on the Premises. There is a core team of Qualified Professional Service Consultants pre-arranged to perform the development as an

Integrated Project Delivery (IPD) team. This team is intended to be led by Crane and Associates

Construction, Inc. (Crane) as the Prime Contractor with sub-consultants Third Voyage Properties LLC

(TVP) as the Program Manager, and Woolpert, Inc. (Woolpert) as the Architectural and Engineering Firm.

It is expressly understood that all members of the proposed team must meet the minimum standards contained in the City’s guidelines for qualifying professional services and contracts for traditional procurement projects, including licensure and professional qualifications. It is further understood that the

City must ensure professional review and evaluation of any design and construction proposed to assure material quality standards, interior space utilization, budget estimates, design and construction schedules, and sustainable design and construction standards consistent with public projects. Such review must be performed by an architect, a landscape architect, or an engineer licensed in this state qualified to perform the review, and such professional shall advise the City through completion of the design and construction of the project. Additionally, performance and payment bonds will be required and will be subject to the requirements of section 255.05, Florida Statutes.

IV. Proposed Lease Terms and Conditions.

Term

Initial term of forty-nine (49) years with three (3)

(10-year) optional extensions.

Optional extensions will be subject to all laws, rules, and policies governing the allowable duration of leases. The term and associated extensions will require written joinder and consent of the City.

City Ownership and Control

The city’s ownership, equity, and control of the Premises will be addressed in the lease and any resulting comprehensive agreement. Title to the facilities will vest with the City upon conclusion of the lease term and any extensions.

Type of Lease The lease will be NET-NET-NET, which will require the lessee to pay for the cost of all property, facility, and development related expenses, including but not limited to real estate taxes, insurance, maintenance, rent, and utilities.

Lease Commencement The lease will become effective upon execution of the lease agreement and any comprehensive agreements. Rental payment amounts are subject to negotiation and will be included in the final form of lease and any comprehensive agreements.

For the purpose of scheduling of the commencement of rent payments, the Premises will be divided into two distinct areas as reflected in Exhibit "A.1 & A.2"

Phase I.a- 122-room 60,000SF+/- Hyatt Studios Airport Hotel Site (approximately 2 +/-acres):

Lease payments will commence upon receipt of the first certificate of occupancy on the property or within thirty-six (36) months of the effective date of the lease, whichever occurs first.

Phase I.b.- 90,300SF +/-Flight training Campus (approximately 6.5 +/-acres): Lease payments will commence upon receipt of the first certificate of occupancy on the property or within thirty-six (36) months of the effective date of the lease, whichever occurs first.

Phase II.a- Toho Square Site South (approximately .876+/- acres): Lease payments will commence upon receipt of the first certificate of occupancy on the property or within thirty-six (36) months of the effective date of the lease, whichever occurs first.

Phase II.b- Toho Square Site North (approximately .553 Acres+/-): Public Use Facility of either of the following:

Option IIb.1- The Kissimmee Place Hotel Public Plaza Element featuring Dog Park and Amenities.

Option IIb.2- The Kissimmee Place 30,000 Square Foot Public Conference Center.

Option IIb.3- 140-Room, Phase II-Hyatt Place Hotel expansion

Lease payments will commence upon receipt of the first certificate of occupancy of each development on the property or within thirty-six (36) months of the effective date of the lease, whichever occurs first.

Security Deposit A deposit check in the amount equal to the first month's rent will accompany the executed lease agreement or as otherwise agreed upon in a comprehensive agreement.

Uses The intended uses will be as follows:

Site ‘A’ of the Premises at KGA:

Hotel Workforce Training Education Facilities Short-Term lodging Office/ Commercial Commercial Retail Conference Space Restaurant/Entertainment Parking Lot

Site ‘B’ of the Premises at Toho Square

Hotel

Workforce Training Education Facilities Short-Term lodging Apartments Office/ Commercial Commercial Retail Conference Space Restaurant/Entertainment Parking Lot

It is expressly understood that any and all uses on the Premises must conform to all applicable comprehensive plan, zoning, and other land development regulations. It is further understood that such uses may require comprehensive plan and/or zoning changes. Nothing contained herein shall be construed as a zoning, permit, or other development approval, nor as binding the City Commission in its legislative or other decision-making authority to approve or amend such regulations.

Owner Improvements KPDG will bring the financial partner(s) to the projects towards 100% capitalization of the projects. KPDG will be responsible for all improvements necessary to complete and manage the projects throughout the term in accordance with all terms of a comprehensive agreement along with the ability to design, build, operate and manage the facilities.

The City will explore grant funding, tax abatements, and other financial and non-financial incentives for the projects which may be available to be incorporated into a comprehensive agreement .

Pursuant to section 255.065, the City may require KPDG to provide a technical study prepared by a nationally recognized expert with experience in preparing analysis for bond rating agencies.

Unencumbered Development The City will process all permits and applications consistent with Florida Statutes and local land development regulations.

Other Approvals

The final lease terms and conditions, as well as any comprehensive agreement, are subject to final approval by the City and other authorities and may be subject to amendment of the Comprehensive Plan.

Nothing contained herein shall be construed binding the City Commission in its legislative or other decision-making authority to approve or amend the Comprehensive Plan or other regulations.

Non-Exhaustive List of Terms and Conditions

The above Terms and Conditions are not an exhaustive list of the anticipated lease terms and conditions, and the final lease and any comprehensive agreements entered into pursuant to section 255.065, Florida Statutes will include other requirements and obligations.

V. Term of the Letter of Intent

This LOI will expire one (1) year after signature by both parties, or upon execution of a formal lease or comprehensive agreement for the Premises, whichever occurs first, unless terminated sooner pursuant to its terms. It is expressly understood that if during the Public Comment Period, the City Commission determines that it cannot make the required public interest determination(s) for the proposal submitted by

KPDG, and/or additional qualifying proposals are received during the Public Comment Period, the City may terminate this LOI upon written notice. The City may also terminate this LOI upon written notice to

KPDG at its principal place of business in the event KPDG is dissolved or defunct.

VI. Marketing Privilege

Upon expiration of the Public Comment Period and provided there are no alternative qualifying proposals timely received, KPDG will be permitted to market the Premises for development for the remaining duration of this LOI. Marketing may include but not limited to:

a. Public media marketing of the Premises.

b. Signage on the Premises property. Any marketing, promotion, or signage using the

City name or seal must be reviewed by the City and must be consistent with the City of

Kissimmee's sign regulations.

VII. Consideration

The Exclusionary Period and the Marketing Privilege represent benefits to KPDG to the exclusion of others for the duration described herein. The consideration for these benefits will be as follows:

Abatement of Other Negotiations: $500 per month. If this LOI results in a formal lease agreement for the

Premises or any portion thereof, the consideration will be incorporated into the lease payment schedule. If this LOI terminates without execution of a formal lease agreement for the Premises or any portion thereof, the consideration will be payable in full at the termination of this LOI, however terminated.

Further, the City may charge a fee to cover the costs of processing, reviewing, and evaluating the KPDG Proposal request, including, but not limited to, reasonable attorneys’ fees and fees for financial and technical advisors or consultants and for other necessary advisors or consultants. This fee will be included and accounted for in any resulting comprehensive agreements.

VIII. Non-Partnership

Nothing contained in this LOI will be construed to create any relationship whatsoever, including, but not in any way limited to, any partnership or joint venture between KPDG and the City.

IX. Non-Binding

This LOI is merely an outline of the major lease points currently under contemplation by the parties. Except for Paragraphs V, VI, VII, and VIII and this Paragraph IX, this LOI is not a binding legal agreement, and neither party will have any legal obligation or liability to the other if the parties fail to enter into a final lease agreement.

Agreed to and Accepted:

X___________________________

Jackie Espinosa Mayor of the City of Kissimmee

Date:_____________________________

X Mr. Santiago M. Fernandez

Managing Partner, KPDG, Inc.

December 17, 2024

Exhibit A.1 - Phase I- Site, Kissimmee Gateway Airport- 8.5 Acres +/- Legal Description: DYER-THACKER COMMERCE PARK PB 22 PG 183-185 LOT 7

Exhibit A.2: Phase II- Site, Toho Square Site- 1.43 Acres +/-