Broward County Commission Regular Meeting
Director's Name: Glenn Wiltshire (Acting Director)
Department: Port Everglades Division: Business Development
Information
Requested Action
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MOTION TO APPROVE Consent to Assignment and First Amendment to Lease Agreement between Broward County, Seabulk Towing, Inc., as assignor, and SEACOR Meridian Inc., as assignee, for 28,818 square feet of office space in Building 27, 9,940 square feet of warehouse space in Building 27, and adjacent surface parking area, all located at 2200 Eller Drive in Port Everglades, with a term retroactive to January 1, 2024, and ending on December 31, 2024; and authorize the Mayor and Clerk to execute same.
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Why Action is Necessary
Lease agreements and amendments require approval by the Broward County Board of County Commissioners.
What Action Accomplishes
Approves Consent to Assignment and First Amendment to the Lease Agreement between Broward County, Seabulk Towing, Inc., as assignor, and SEACOR Meridian Inc., as assignee, for 28,818 square feet of office space in Building 27, 9,940 square feet of warehouse space in Building 27, and adjacent surface parking area.
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Previous Action Taken
None
Summary Explanation/Background
THE PORT EVERGLADES DEPARTMENT RECOMMENDS APPROVAL.
This action supports the Broward County Board of County Commissioners’ (“Board”) Value of “Building partnerships and working collaboratively with others to meet shared objectives,” and the Goal of “Ensuring economic opportunities and a sustainable economy, with an emphasis on Broward’s lower and middle class.”
On June 15, 2021 (Item No. 28), the Board approved a multi-year lease agreement between the County, as landlord, and Seabulk Towing, Inc. (“Seabulk”), as tenant, for 28,818 square feet of office space in Building 27, 9,940 square feet of warehouse space in Building 27, and adjacent surface parking area located at 2200 Eller Drive in Port Everglades (see Exhibit 2), with a term commencing on July 1, 2021, and ending on December 31, 2023. During the term of that lease, Seabulk was required to evacuate the building for approximately six months starting on October 22, 2021, due to structural issues with the building. Although the lease agreement expired on December 31, 2023, Seabulk remained on the property with the County’s consent, thereby creating a month-to-month tenancy while the First Amendment was negotiated. Seabulk was sold to new owners on February 1, 2024. The Consent to Assignment and First Amendment (see Exhibit 1) extends the term through December 31, 2024, and assigns the lease to SEACOR Meridian, Inc. (“SEACOR”). SEACOR may terminate the Agreement any time after June 30, 2024, upon at least sixty days’ advance written notice.
Building 27 has served as Seabulk and SEACOR’s parent company, Seacor Holdings Inc., corporate headquarters since 2005, and housed Seabulk’s tugboat operations at Port Everglades. The tugboat operations were sold to a different company as of February 1, 2024. Approximately 115 people work at the premises. SEACOR will be moving to new office space outside of the Port, but the build-out of that location has been delayed. This amendment will allow SEACOR to remain in the building until its new location is ready for occupancy.
The monthly rent for the amended lease term retroactive to January 1, 2024 is $99,320.72, an increase of 3% from 2023. The new negotiated lease rate for warehouse space will increase from $17.61 per square foot (“PSF”) to $18.11 PSF. The new negotiated lease rate for office space will increase from $34.08 PSF to $35.10 PSF. SEACOR will continue to be responsible for all routine maintenance items for the premises, including maintenance of the elevator, fire safety system, auxiliary generator, and the heating, ventilating, and air conditioning system (collectively, the “Systems”). SEACOR will also be responsible for funding and maintaining service contracts for the Systems.
The First Amendment also addresses a rent credit of $301,950 for additional expenses incurred by Seabulk when required by the County to temporarily evacuate the premises with no advance notice from October 22, 2021, through April 2022 (warehouse) and May 2022 (office space) while the building underwent emergency structural repairs completed by a Port contractor. Eligible reimbursable expenses included in the rent credit were negotiated with Seabulk representatives by Port staff in consultation with the County Auditor’s Office.
In addition, shortly after they re-occupied the building, the HVAC system went down and needed to be replaced. Section 4.3 of the Lease Agreement provides for a credit for parts and labor related to the replacement of the HVAC system. The amendment memorializes a credit of $298,925.78 to SEACOR for their actual expenses.
The Lease Amendment has been reviewed and approved as to form by the Office of the County Attorney. The Amendment is pending final execution by Seabulk and SEACOR, and receipt of signature pages will be noted in the Monday Night Memo prior to the Board meeting.
Source of Additional Information
Jorge A. Hernández, Director, Business Development Division, Port Everglades Department, (954) 468-3501
Josh Miller, Property Manager, Business Development Division, Port Everglades Department, (954) 468-3518
Fiscal Impact
Fiscal Impact/Cost Summary
The additional six-month lease term will result in approximately $596,000 in revenue. Each additional month that SEACOR remains as a tenant in the building would generate $99,321 in revenue. This amount will be offset by the $301,950 rent credit for additional expenses incurred by SEACOR to relocate to temporary offices outside the Port while the building was inaccessible, and the $298,925.78 credit for replacing the HVAC system.