Title
Recordation of Restrictive Covenant for Cade Museum’s State Grant Award (B)
Explanation
In August 2016, the Florida Department of the State, Division of Cultural Affairs awarded the Cade Museum Foundation, Inc. a $500,000 Cultural Facilities Grant to the assist with the development of the museum’s Creativity Lab and Fab Lab. Per the Grant Award Agreement, a recordation of a restrictive covenant is required to ensure that the facility will be used as a cultural facility, as defined in the restrictive covenant, for at least (10) years following the execution of the grant award agreement. The City’s lease with the Cades also requires that the property and structure be used as a cultural facility for the term of the lease. However, in the event there is a default by the Cade’s, the City has agreed that the mortgage lender could lease the property to a business. At that point, the City would begin to receive market rate rent for the property.
The Restrictive Covenant requested by the state required that the City agree that if there is a default, the loan would be repaid and that if it wasn’t repaid that the loan would be a lien against the City’s property. The Restrictive Covenant has been reviewed by the City Attorney who has requested changes be made to: 1) clarify that the City would not be required to repay the loan to the state in the event the Cade’s were in default; and 2) that a default by the Cade’s would not result in a lien on the museum property. To date, the State has agreed to the first portion of the request but has not responded to the second request. Staff believes that the state will agree to some version of the second request but may need additional assurances to protect the state’s investment in the property. City staff will continue to negotiate with the state to obtain the appropriate language satisfactory to all parties.
Fiscal Note
Revisions to the Restrictive Covenant were requested by the City Attorney to ensure that the City...
Click here for full text