2014-28463 Reso 2014-28463
RESOLUTION NO.
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING AND AUTHORIZING THE
FOLLOWING ACTIONS WITH REGARD TO THE CITY'S NEIGHBORHOOD
STABILIZATION PROGRAM 1 (NSP1) AGREEMENT APPROVING AND
AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AMENDMENT
NO. 7 TO THE SUBGRANT AGREEMENT BETWEEN THE STATE OF
FLORIDA DEPARTMENT OF ECONOMIC OPPORTUNITY (DEO) AND THE
CITY MODIFYING THE EXPIRATION DATE OF THE SUBGRANT
AGREEMENT FROM FEBRUARY 15, 2014 TO AUGUST 15, 2014 FURTHER
AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO TAKE SUCH
ACTIONS, AS MAY BE REQUIRED, WITH REGARD TO PREPARING AND
HAVING THE MAYOR AND CITY CLERK EXECUTE MODIFICATIONS
WHEREAS, on July 31, 2008, the United States Congress enacted the Housing and
Economic Recovery Act of 2008, thereby creating the Neighborhood Stabilization Program 1
(NSP1), which directed the Department of Housing and Urban Development (HUD) to allocate
$3.93 billion to states and units of local government as emergency assistance for the purchase
and redevelopment of abandoned and foreclosed homes; and
WHEREAS, the State of Florida Department of Economic Development (DEO) is the
entity managing the NSP1 allocation to the City of Miami Beach; and
WHEREAS, on March 18, 2009, the City approved Resolution No. 2009-27039,
approving the City's planned use of and application of NSP1 funds to purchase and rehabilitate
one or more foreclosed or abandoned multi-family buildings to be made available as rental
housing properties for income-qualified households; and
WHEREAS, the City was awarded a total of$9,305,268 in NSP1 funds through an initial
allocation plus two subsequent allocations; and
WHEREAS, the Administration conducted a duly-noticed procurement process for award
of the first allocation, resulting in the City Commission's approval on September 9, 2009, of
Resolution No. 2009-27194 which authorizing the execution of an Agreement with Miami Beach
Community Development Corporation to carry out the City's planned use of, and application for,
NSP1 funds ("MBCDC Agreement"); and
WHEREAS, the initial strategy was to fund the acquisition and rehabilitation of one
affordable housing project, which resulted in the acquisition of the 16-unit foreclosed building
located at 7871 Crespi Boulevard, which was later named The Madeleine; and
WHEREAS, on February 3, 2010, the City's Agreement with MBCDC was amended per
Resolution No. 2010-27335, to allow for the allocation of additional NSP1 funds received by the
City; and
WHEREAS, the additional acquisition and rehabilitation funds resulting from the second
and third allocations were authorized for the acquisition and rehabilitation of The Neptune, a 35-
unit foreclosed apartment building located at 1632 Meridian Avenue; and The Lottie, a nine-unit
foreclosed apartment building which contains large apartments and is suitable for families,
located at 530 75 Street;
WHEREAS, on May 12, 2010, the City Commission approved Resolution No. 2010-
27390, authorizing the reallocation of NSP1 funds in the amount of $246,898.53 from The
Madeleine project to The Neptune; utilizing the second NSP1 allocation in the amount of
$4,432,328.24; utilizing FY2009/10 US HUD HOME funds in the amount of $650,000; and
subordinating the City's first lien position to private bank financing acquired by MBCDC in the
amount of$700.000; and
WHEREAS, the City was allowed to use a maximum of 6.8% or $632,758 of the total
NSP1 allocation for administrative expenses; and
WHEREAS, as of September 30, 2012, remaining unexpended administrative funds
were $300,953.95 of the available $632,758 NSP1 administrative funding allocated to the City
and the City's NSP1 grant agreements with the State DEO and with MBCDC were set to expire
on November 23, 2012; and
WHEREAS, the State's DEO requested that both of the City's contracts be extended
through February 15, 2013, in order to rent all 60 units and meet a National Objective as
directed by HUD; and
WHEREAS, the State's DEO requested that both Miami Beach contracts be extended
an additional six months, in order to occupy all units, close out the grant, and resolve the
pending issue of the City's unspent administrative funding; and
WHEREAS, pursuant to Resolution No. 2013-28139, both contracts were extended
through August 15, 2013; and
WHEREAS, all three projects were 100% leased as of April 1, 2013, and a National
Objective was met; and
WHEREAS, the Administration projects that, based on current administrative
expenditure rates, the projected balance of unspent administrative funds, as of August 15, 2013,
will be approximately $218,181.86; and
WHEREAS, the State's DEO requested that both Miami Beach contracts be extended
an additional six months, through February 15, 2014, in order to close out the grant, and resolve
the pending issue of the City's unspent administrative funding; and
WHEREAS, in order to comply with the State DEO close-out instructions for the NSP1
grant, the Administration recommends extending the end date of the NSP1 Subgrant Agreement
with the City so that it expires on August 15, 2014, as directed by the State DEO.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby
approve and authorize the Mayor and the City Clerk to execute Amendment No. 7 to the
Subgrant Agreement between the State of Florida Department of Economic Development
(DEO) and the City modifying the expiration date of the Subgrant Agreement from February
15, 2014 to August 15, 2014; and further authorize the City Manager or his designee to take
such actions, as may be required, with regard to preparing and having the Mayor and City
Clerk execute modifications.
PASSED AND ADOPTED this day of R h" Q r- , 2014.
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Condensed Title:
A Resolution Authorizing Amendment No. 7 to the NSP1 Agreement between the City and the State of Florida Department
of Economic Opportunity DEO to extend the expiration date from February 15, 2014 to August 15, 2014. `
Key Intended Outcome Supported:
Increase access to workforce or affordable housing.
Supporting Data (Surveys, Environmental Scan, etc.): Based on the Strategic Plan 2011 Update, the number of
affordable housing units is 4,743.
Item Summa /Recommendation:
The U.S. Housing and Economic Recovery Act of 2008 created the Neighborhood Stabilization Program (NSP1), which
directed HUD to allocate $3.93 billion to states and units of local government as emergency assistance for the purchase
and redevelopment of abandoned and foreclosed homes. Miami Beach applied for NSP1 funds for the purchase and
rehabilitation of one or more multi-family buildings to be kept as rental properties to benefit income-qualified households in
accordance with the NSP1 regulations and was awarded a total of $9,305,268 through an initial allocation plus two
subsequent reallocations. The State DEO is the pass-through entity handling HUD's NSP1 allocation to the City. The initial
allocation to the City in the amount of$2,549,441 was formula-based. The second and third allocations in the amounts of
$4,755,717 and $2,000,000, respectively, were awarded to the City after the original recipients, Apopka and Clearwater,
failed to meet the program's benchmarks. The City consistently demonstrated above-average performance.
The City entered into a grant agreement with the State, and after conducting a procurement process for award of the first
allocation, entered into a related agreement with Miami Beach Community Development Corporation (MBCDC). Both
Agreements were subsequently amended to accept and govern the second and third allocations of funding for a total of
$9,305,268. With these funds, three foreclosed buildings were acquired by MBCDC pursuant to the NSP1 guidelines and
are all now complete and fully leased. They are: The Madeleine, a 16-unit building located at 7871 Crespi Blvd., received a
Certificate of Occupancy (CO) on October 11, 2012; The Neptune, a 35-unit building located at 1632 Meridian Avenue,
received a CO on November 15, 2012; and The Lottie a nine-unit building located at 530 75 Street, received a CO on April
24, 2013.
From each of the allocations, the City was allowed to use a maximum of 6.8% ($632,758)for administrative expenses. The
City has an approximate balance of $201,809.37 in unspent administrative funds. These funds are subject to forfeiture to
the DEO on February 15, 2014 if they remain unspent. The State DEO has advised that the City has two options: return the
unspent funds or request an extension to enable the identification of another NSP1 eligible activity. The City, therefore, is
seeking an extension to enable current staff to find a suitable NSP1 eligible project and ensure the full expenditure of these
funds to prevent their return to DEO.
The extension will modify the NSP1 Agreement between the City and DEO extending its term to August 15, 2014.
Advisory Board Recommendation:
N/A
Financial Information:
Source of Funds: Amount Account Approved
1 $201,809.37.00 138-5668-XXXXXX
NSP1 2
OBPI Total
City Clerk's Office Legislative Tracking:
Maria L. Ruiz ext. 7260
Sign-Offs:
Department Director, ► sistant City Manager City Manager
MLR KGB JLM
T:\AGENDA\2014\January\NSP1 Agreemen Amendments 7- SUMM.docx
MIAMIBEACH AGENDA ITEM 67A
DATE
IM MIAMI BEACH
City of Miami Beath, 1700 Convention Center Drive,Miami Beach, Florida 33139,www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Philip Levine and Members of the Cit Commission
FROM: Jimmy L. Morales, City Manage
DATE: January 15, 2014
SUBJECT: A RESOLUTION OF THE MAY R AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, AP ROVING AND AUTHORIZING THE MAYOR
AND CITY CLERK TO EXECUTE AMENDMENT NO. 7 TO THE SUBGRANT
AGREEMENT BETWEEN THE STATE OF FLORIDA DEPARTMENT OF
ECONOMIC OPPORTUNITY (DEO) AND THE CITY MODIFYING THE
EXPIRATION DATE OF THE SUBGRANT AGREEMENT FROM FEBRUARY
15, 2014 TO AUGUST 15, 2014 AND FURTHER AUTHORIZING THE CITY
MANAGER OR HIS DESIGNEE TO TAKE SUCH ACTIONS AS MAY BE
REQUIRED WITH REGARD TO PREPARING AND HAVING THE MAYOR
AND CITY CLERK EXECUTE MODIFICATIONS.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
BACKGROUND
On July 31, 2008, the United States Congress enacted the Housing and Economic Recovery Act
of 2008, thereby creating the Neighborhood Stabilization Program (NSP1), which directed the
Department of Housing and Urban Development (HUD) to allocate $3.93 billion to states and
units of local government as emergency assistance for the purchase and redevelopment of
abandoned and foreclosed homes. Resolution No. 2009-27039 was adopted by the City
Commission on March 18, 2009, approving the City's application for and planned use of NSP1
funds for the purchase and rehabilitation of one or more multi-family buildings to be kept as rental
properties to benefit income-qualified households, in accordance with the NSP1 regulations, with
an end goal of stabilizing neighborhoods impacted by foreclosures.
The City was awarded a total of $9,305,268 in NSP1 funds through an initial allocation plus two
subsequent reallocations. The State's Department of Community Affairs (DCA), now known as
the Department of Economic Opportunity (DEO), is the pass-through entity handling HUD's
NSP1. The initial allocation to the City in the amount of $2,549,441 was formula-based. The
second and third allocations in the amounts of $4,755,717 and $2,000,000, respectively, were
awarded to the City after the original recipients, Apopka and Clearwater, failed to meet the
program's benchmarks. Conversely, the City consistently demonstrated above-average
performance.
On September 9, 2009, the City approved Resolution No. 2009-27175 authorizing the execution
of the Federally-funded Subgrant Agreement with DCA ("State Agreement") for the amount of
$2,549,551.
NSP1 Agreement Amendment No.7
Page 2 of 2
After the Administration conducted a duly-noticed procurement process for award of the first
allocation, the Mayor and City Commission approved Resolution No. 2009-27194 on September
9, 2009 authorizing the execution of an Agreement with Miami Beach Community Development
Corporation (MBCDC) to carry out the City's planned use of, and application for, NSP1 funds
("MBCDC Agreement"). The initial strategy was to fund the acquisition and rehabilitation of one
affordable housing project. MBCDC identified the 16-unit building located at 7871 Crespi
Boulevard, which was later named The Madeleine.
The State Agreement for the first allocation was subsequently amended to include the two
additional allocations in the amounts of $4,755,717 and $2,000,000, which were awarded on
March 24, 2010, and July 30, 2010, respectively. The MBCDC Agreement was amended per
Resolution No. 2010-27335, to allow for the allocation of additional NSP1 funds received by the
City. The additional acquisition and rehabilitation funds resulting from the second and third
allocations enabled the acquisition and rehabilitation of The Neptune, a 35-unit foreclosed
apartment building located at 1632 Meridian Avenue; and The Lottie, a nine-unit foreclosed
apartment building which contains large apartments suitable for families, located at 530 75 Street.
From each of the allocations, now totaling $9,305,268, the City was allowed to use a maximum of
6.8% ($632,758) for administrative expenses. As of today, the City has an approximate balance
of $201,809.37 in unspent administrative funds. These funds are subject to forfeiture to the DEO
on February 15, 2014 if they remain unspent.
ANALYSIS
All three NSP1-funded projects are now complete. The Madeleine received a Certificate of
Occupancy (CO) on October 11, 2012; The Neptune received a CO on November 15, 2012; and
The Lottie received a CO on April 24, 2013. All projects are now fully leased achieving the
National Objective.
In 2012, the DEO announced its plan to extend open contracts in six-month intervals enabling
late performing municipalities to meet the National Objective as well as allow for close-out
instructions from HUD. The City had previously requested extensions that currently expire on
February 15, 2014. City staff has consulted with DEO staff and have been advised that an,
extension would be granted if requested. Such an extension would afford the current staff an
opportunity to explore the feasibility of using the remaining funds to maximize their benefit for our
community including the possibility of leveraging these funds to augment the City's First-Time
Homebuyer Program, among other possibilities.
Therefore, the Administration is seeking consent to obtain an extension to enable current staff to
find a suitable NSP1 eligible project or activity enabling the full expenditure of the remaining
administrative funds and preventing their return to DEO.
CONCLUSION
The Administration recommends that the Mayor and City Commission authorize Amendment No.
7 to the Subgrant Agreement between the State of Florida DEO and the City modifying the
expiration date of the Subgrant Agreement from February 15, 2014 to August 15, 2014, and
further authorizing the City Manager or his designee to take such actions as may be required with
regard to preparing and having the Mayor and City Clerk execute any documentation necessary
to effectuate the amendments to the agreement.
JLM/K B/MLR/DMR