2008-26952 ResoRESOLUTION NO. 2008-26952
RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, APPROVING THE FOLLOWING ACTIONS
WITH REGARD TO THE AFFORDABLE HOUSING RENTAL PROJECT
ACQUIRED AND TO BE REHABILITATED BY MIAMI BEACH
COMMUNITY DEVELOPMENT CORPORATION (MBCDC), KNOWN AS
THE VILLA MARIA, AND LOCATED AT 2800 COLLINS AVENUE: 1)
APPROVING A SUBORDINATION OF THE CITY'S INTEREST IN FAVOR
OF A NEW MORTGAGE IN THE AMOUNT OF A $2,000,000 LOAN
BEING MADE TO MBCDC DEVELOPMENT CORPORATION (MBCDC)
BY THE FLORIDA HOUSING FINANCE CORPORATION SPECIAL
HOUSING ASSISTANCE AND DEVELOPMENT PROGRAM (SHADP);
2) APPROVING A SUBORDINATION OF THE CITY'S INTEREST IN
FAVOR OF A NEW MORTGAGE IN THE AMOUNT OF $1,215,000 BEING
MADE TO MBCDC BY MIAMI-DADE COUNTY FROM FY 2007 HOME
FUNDS; 3) APPROVING A SUBORDINATION OF THE CITY'S
INTEREST IN FAVOR OF A NEW MORTGAGE IN THE AMOUNT OF
$1,000,000 BEING MADE TO MBCDC BY MIAMI-DADE COUNTY FROM
FY 2006 SURTAX PROGRAM FUNDS; 4) FURTHER AUTHORIZING THE
CITY MANAGER TO EXECUTE ANY AND ALL DOCUMENTS TO
EFFECTUATE THE AFORESTATED TRANSACTIONS.
WHEREAS, the 34-unit Villa Maria Apartments, located at 2800 Collins Avenue„
and the adjacent vacant lot, located at 221 28'h Street, were purchased by MBCDC on
March 18, 2005 at a cost of $2,600,000; and
WHEREAS, the purchase price, interest, closing costs and pre-development costs
were paid with $3,200,000 of US HUD Home Program Set-Aside funds received from the
City of Miami Beach; and
WHEREAS, the properties have 30-year covenants running with the land which
require that they remain as affordable housing sites; and
WHEREAS, the Villa Maria Apartments site is currently under construction and is
projected to be completed by September 2009;
WHEREAS, the adjacent vacant lot, which now has a separate folio number and is
now known as Villa Matti, will be developed into a new 36-unit affordable elderly housing
project, with separate funding sources, including an independently obtained US HUD
Section 202 grant in the amount of $4,836,200 to MBCDC; and
WHEREAS, MBCDC applied for private construction financing from International
Finance Bank, as well as State and County funding, in order to complete the rehabilitation
of the Villa Maria project; and the additional funding sources require that the City
subordinate its position until the debts are paid; and
WHEREAS, on July 16, 2008, the City Commission passed and adopted Resolution
2008-26850 approving: 1) the release of an existing recorded mortgage and security
agreement against Lots 1, 2, 6 and 7 of the property, providing for execution and
recordation of a new mortgage, note, and security agreement, in the amount of $3.2 million
against Lots 1 and 2 only (the Villa Maria property); and, 2) a subordination of the City's
$3.2 million interest/new mortgage in favor of a $3 million construction loan being made to
MBCDC by International Finance Bank (IFB Loan); provided that the approval of the
subordination of the IFB Loan is only for the duration of the construction loan and that
MBCDC shall either payoff the IFB Loan or, if any part of the IFB Loan is sought to be
converted into a permanent loan against the Villa Maria property, then requiring the City
Manager's further consent and further authorizing the City Manager to execute any and all
documents to effectuate the aforestated transactions; and
WHEREAS, MBCDC has applied for, and is preparing to close on, the following
loans for which the City has been asked to subordinate its position: 1) $2,000,000 from
Florida Housing Finance Corporation Special Housing Assistance and Development
Program (SHADP); 2) $1,215,000 from Miami-Dade County from FY 2007 HOME funds;
3) $1,000,000 from Miami-Dade County FY 2006 Surtax Program funds; and
WHEREAS, as the additional financing becomes available, MBCDC has committed
to utilizing those funds to pay down draws taken against the IFB construction loan; and
WHEREAS, the requested subordinations will permit the financing to be secured for
the project; and
WHEREAS, the City's recorded covenant ensures that the long-term use of the
property remains affordable housing, meeting the City's goal of affordable housing
retention.
NOW THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission authorize the following actions with regard to the affordable housing rental
project acquired and to be rehabilitated by Miami Beach Community Development
Corporation (MBCDC), known as The Villa Maria, and located at 2800 Collins Avenue: 1)
approving a subordination of the City's interest in favor of a new mortgage in the amount of
a $2,000,000 being made to Miami Beach Community Development Corporation (MBCDC)
by the Florida Housing Finance Corporation Special Housing Assistance and Development
program (SHADP); 2) approving a subordination of the City's interest in favor of a new
mortgage in the amount of $1,215,000 being made to MBCDC by Miami-Dade County from
FY 2007 HOME funds; 3) approving a subordination of the City's interest in favor of a new
mortgage in the amount of $1,000,000 being made to MBCDC by Miami-Dade County
2008-26952
from FY 2006 Surtax Program Funds; 4) further authorizing the City Manager to execute
any and all documents to effectuate the aforestated transactions.
PASSED AND ADOPTED this
10th day of December 2008.
ATTEST:
~~ ~` ~~ ~~
CITY CLERK
Robert Parcher
OR
Matti Herrera Bower
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APPROVED AS TO
FORM &IANGUAGE
COMMISSION ITEM SUMMARY
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A resolution approving: 1) a subordination of the City's interest in favor of a new mortgage in the amount of a $2,000,000 being made to
Miami Beach Community Development Corporation (MBCDC) by the State of Florida; (SHADP); 2) a subordination of the City's interest in
favor of a new mortgage in the amount of $1,215,000 being made to MBCDC by Miami-Dade County from FY 2007 HOME funds; 3) a
subordination of the City's interest in favor of a new mortgage in the amount of $1,000,000 being made to MBCDC by Miami-Dade County
from FY 2006 Surtax Program Funds; 4) further authorizing the City Manager to execute any and all documents to effectuate the aforestated
transactions with regards to the affordable housing rental project known as Villa Maria Apartments, located at 2800 Collins Avenue.
Ke Intended Outcome Su orted:
Increase access to workforce or affordable housing.
Supporting Data (Surveys, Environmental Scan, etc.):
Based on the 2007 Customer Satisfaction Survey, 75% of residents rank the quality of life within the City of Miami Beach favorably, however,
in regards to Construction/Development -Housing, 67% of respondents indicated that the City of Miami Beach should ensure the provision of
housin for the elder) /seniors.
Issue:
Shall the City enter into subordination agreements in favor of the State of Florida and Miami-Dade County?
item aummary~rtecvmmenaauvn:
The 34-unit Villa Maria Apartments, located at 2800 Collins Avenue, and the adjacent vacant lot, located at 221 28 Street, were purchased
by MBCDC on March 18, 2005, at a cost of $2,600,000. The purchase price, interest, closing costs, and predevelopment costs were paid with
$3,200,000 HUD HOME set-aside program funds received from the City, and which had been committed to MBCDC for the development of
affordable housing. The properties have 30-year covenants running with the land which require that they remain as affordable housing sites.
The Villa Maria Apartments site is currently under construction and is projected to be completed by September 2009. The adjacent vacant lot,
now known as Villa Matti, will be developed into a new 36-unit affordable elderly housing project, with separate funding sources, including a
grant obtained by MBCDC from US HUD in the amount of $4,836,200. The estimated completion date for the Villa Matti Apartments site is
May 2010.
In order to rehabilitate the Villa Maria Apartments, a historic, elderly affordable housing rental project, MBCDC applied for private construction
financing from International Finance Bank, as well as State and County funding. The additional funding sources require that the City
subordinate its position until the debts are paid. Therefore, on July 16, 2008, the City Commission approved: 1) the release of an existing
recorded mortgage and security agreement against Lots 1, 2, 6 and 7 of the property, providing for execution and recordation of a new
mortgage, note, and security agreement, in the amount of $3.2 million against Lots 1 and 2 only (the Villa Maria property); and 2) a
subordination of the City's $3.2 million interesUnew mortgage in favor of a $3 million construction loan being made to MBCDC by International
Finance Bank (IFB Loan), provided that the approval of the subordination of the IFB Loan is only for the duration of the construction loan.
As anticipated, MBCDChas applied for, and is preparing to close on, the following loans for which the City has been asked to subordinate its
position:
1) $2,000,000 from Florida Housing Finance Corporation Special Housing Assistance and
Development Program (SHADP);
2) $1,215,000 from Miami-Dade County from FY 2007 HOME funds;
3) $1,000,000 from Miami-Dade County FY 2006 Surtax Program funds.
As the additional financing becomes available, MBCDC has committed to utilizing those funds to pay down draws taken against the IFB
construction loan. MBCDC projects that, upon completion of the Villa Maria project, the remaining debt will be $1,482,992 ($482,992 -
International Finance Bank; $1 million County Surtax). No interest payments are due over the 30-year life of the Surtax loan. While debt
service payments are currently projected over a 30-year affordability period, MBCDC intends to renew the bank loan every five years at the
most favorable terms.
The City's recorded covenant ensures that the project will remain affordable housing for thirty years, consistent with our goal of affordable
housing retention.
Board Recommendation:
Financial Information:
Source of Amount Account
Funds: 1 N/A N/A
OBPI Total
Financial Im act Summa
ity Clerk's Office
Anna Parekh
Department Director Assistant ity Manager City Manager
a Parekh Hilda Fernande ~,~ M
7:\AGENDA\2008\December 10\Consent\MBCDC Villa Maria Subordinati Summarv.doc
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m MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, veww.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City Commission
FROM: Jorge M. Gonzalez, City Manager
DATE: December 10, 2008
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, APPROVING THE FOLLOWING ACTIONS WITH REGARD TO
THE AFFORDABLE HOUSING RENTAL PROJECT ACQUIRED AND TO BE
REHABILITATED BY MIAMI BEACH COMMUNITY DEVELOPMENT
CORPORATION (MBCDC), KNOWN AS THE VILLA MARIA, AND LOCATED AT
2800 COLLINS AVENUE: 1) APPROVING A SUBORDINATION OF THE CITY'S
INTEREST IN FAVOR OF A NEW MORTGAGE IN THE AMOUNT OF $2,000,000
BEING MADE TO MBCDC DEVELOPMENT CORPORATION (MBCDC) BY THE
FLORIDA HOUSING FINANCE CORPORATION SPECIAL HOUSING ASSISTANCE
AND DEVELOPMENT PROGRAM (SHADP); 2) APPROVING A SUBORDINATION
OF THE CITY'S INTEREST IN FAVOR OF A NEW MORTGAGE IN THE AMOUNT
OF $1,215,000 BEING MADE TO MBCDC BY MIAMI-DADE COUNTY FROM FY
2007 HOME FUNDS; 3) APPROVING A SUBORDINATION OF THE CITY'S
INTEREST IN FAVOR OF A NEW MORTGAGE IN THE AMOUNT OF $1,000,000
BEING MADE TO MBCDC BY MIAMI-DADE COUNTY FROM FY 2006 SURTAX
PROGRAM FUNDS; 4) FURTHER AUTHORIZING THE CITY MANAGER TO
EXECUTE ANY AND ALL DOCUMENTS TO EFFECTUATE THE AFORESTATED
TRANSACTIONS.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
ANALYSIS
The 34-unit Villa Maria Apartments, located at 2800 Collins Avenue, and the adjacent vacant lot,
located at 221 28th Street, Miami Beach, were purchased by the Miami Beach Community
Development Corporation (MBCDC) on March 18, 2005, at a cost of $2,600,000. The purchase
price, interest, closing costs and pre-development costs were paid with $3,200,000 of US
Housing and Urban Development (HUD) HOME Program Set-Aside funds received from the City
of Miami Beach, and which were committed to MBCDC for the development of affordable
housing. The properties have 30-year covenants running with the land which require that they
remain as affordable housing sites.
The Villa Maria Apartments site is currently under construction and is projected to be completed
by September 2009. The adjacent vacant lot, which now has a separate folio number and is
now known as Villa Matti, will be developed into a new 36-unit affordable elderly housing project,
with separate funding sources, including an independently obtained US HUD Section 202 grant
in the amount of $4,836,200 to MBCDC. The estimated completion date for the Villa Matti
Apartments site is May 2010.
Villa Maria Subordination
Page 2 of 2
The total projected construction costs for the rehabilitation of Villa Maria Apartments, an elderly
affordable housing rental project, is $5,818,729. MBCDC applied for private construction
financing from International Finance Bank, as well as State and County funding, in order to
complete the rehabilitation of the Villa Maria project.
The additional funding sources require that the City subordinate its position until the debts are
paid. Consequently, on July 16, 2008, the City Commission passed and adopted Resolution
2008-26850 approving: 1) the release of an existing recorded mortgage and security agreement
against Lots 1, 2, 6 and 7 of the property, providing for execution and recordation of a new
mortgage, note, and security agreement, in the amount of $3.2 million against Lots 1 and 2 only
(the Villa Maria property); and, 2) a subordination of the City's $3.2 million interest/new
mortgage in favor of a $3 million construction loan being made to MBCDC by International
Finance Bank (IFB Loan); provided that the approval of the subordination of the IFB Loan is only
for the duration of the construction loan and that MBCDC shall either pay off the IFB Loan or, if
any part of the IFB Loan is sought to be converted into a permanent loan against the Villa Maria
property, then requiring the City Manager's further consent and further authorizing the City
Manager to execute any and all documents to effectuate the aforestated transactions.
MBCDC has applied for, and is preparing to close on, the following loans for which the City has
been asked to subordinate its position:
1) $2,000,000 from Florida Housing Finance Corporation Special Housing Assistance and
Development Program (SHADP);
2) $1,215,000 from Miami-Dade County from FY 2007 HOME funds;
3) $1,000,000 from Miami-Dade County FY 2006 Surtax Program funds.
As the additional financing becomes available, MBCDC has committed to utilizing those funds to
pay down draws taken against the IFB construction loan. MBCDC projects that, upon
completion of the Villa Maria project, the project's remaining debt will be $1,482,992n ($482,992
-International Finance Bank; $1 million -Miami-Dade County Surtax). While debt service
payments are currently projected over a 30-year affordability period, MBCDC intends to renew
the bank loan every five years at the most favorable terms. There are no interest payments due
on the Surtax loan over the 30-year life of the loan.
It should be noted that Miami-Dade County's 2008 Assessed Market Value of the two properties
is $2,250,000, and $1,719,750, respectively, for the Villa Matti and Villa Maria Apartments sites.
The requested subordination will permit the financing to be secured for the project. The City's
recorded covenant ensures that the long-term use of the property remains affordable housing,
meeting the City's goal of affordable housing retention.
CONCLUSION
The Administration recommends approval of the subordination of its position to the State and
the County in order to facilitate the closing of the State/SHADP loan and the County HOME and
Surtax funding loans to MBCDC.
JMG/HMF/AP
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