96-22078 RESO
RESOLUTION NO.
96-22078
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, AUTHORIZING THE CITY MANAGER TO
EXECUTE THE ATTACHED FUNDING APPROVAL AGREEMENT AND ALL
APPLICABLE DOCUMENTS BETWEEN THE DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT (HUD) AND THE CITY OF MIAMI BEACH
FOR LOAN GUARANTEE ASSISTANCE UNDER SECTION 108 OF THE
HOUS ING AND COMMUNITY DEVELOPMENT ACT OF 1974, AS
AMENDED, IN THE PRINCIPAL AMOUNT OF $14,870,000.
WHEREAS, On February 1, 1995, the Mayor and City Commission of
the City of Miami Beach passed a resolution authorizing the
submission of an application for a grant under the Economic
Development Initiative (EDI) in the amount of $1,000,000 and a
Section 108 Loan Guarantee from the U.S. Department of HUD, in the
amount of $14,870,000, to be utilized for the Loews Miami Beach
Hotel Project and towards the establishment of a Revolving Loan
Fund for business assistance; and,
WHEREAS, On August 10, 1995, the City of Miami Beach received
notice from the U.S. Department of HUD that the City'S req.lest for
loan guarantee assistance had been approved; and
WHEREAS, this Section 108 Loan Guarantee is essential to assist
in the financing and development of the Loews Miami Beach Hotel
proj ect and to establish a Revolving Loan Fund (RLF) for the
provision of economic development assistance to small businesses.
NOW THEREFORE BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission authorize the City Manager to execute the attached
funding approval agreement and all applicable documents, between
the Department of Housing and Urban Development (HUD) and the City
of Miami Beach for loan guarantee assistance under Section 108 of
the Housing and Community Development Act of 1974, as Amended, in
the principal amount of $14,870,000.
PASSED and ADOPTED this
17th
day of
July
, 1996.
:R:S~QA~
CITY CLERK
\) . l\ \ \), : .___
V I CdtJaJiflAiPROVtu
By1~Aif%t~
Date 4.1 '--.. .
CITY OF
MIAMI
BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
-
COMMISSION MEMORANDUM NO. ~
TO:
Mayor Seymour Gelber and
Members of the City Commission
DATE: July 17, 1996
FROM:
Jose Garcia-Pedrosa
City Manager
SUBJECT:
A RESOLUTION F THE MAYOR AND CITY COMMISSION OF 'IHE CITY
OF MIAMI BEACH, FLORIDA, AUTHORIZING THE CITY MANAGER TO
EXECUTE THE ATTACHED FUNDING APPROVAL AGREEMENT .~ ALL
APPLICABLE DOCUMENTS BETWEEN THE DEPARTMENT OF :~OUSING
AND URBAN DEVELOPMENT (HUD) AND THE CITY OF MIAM I BEACH
FOR LOAN GUARANTEE ASSISTANCE UNDER SECTION 108 OF THE
HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974, AS
AMENDED, IN THE PRINCIPAL AMOUNT OF $14,870,000.
ADMINISTRATION RECOMMENDATION:
It is recommended that the Mayor and City Commission of the :ity of
Miami Beach, authorize the City Manager to execute the al:tached
funding approval agreement and all applicable documents, between
the Department of Housing and Urban Development (HUD) and the City
of Miami Beach for loan guarantee assistance under Section 108 of
the Housing and Community Development Act of 1974, as Amended, in
the principal amount of $14,870,000.
BACKGROUND
On February 1, 1995, the Mayor and City Commission authori:~ed the
Administration to submit an application for a grant under the
Economic Development Initiative (EDI) and a Section 108 Loan
Guarantee from the U.S. Department of HUD under Title I of the
Housing and Community Development Act of 1974, as amended, in order
to assist in the financing and development of the Loews Miami Beach
Hotel project and to establish a Revolving Loan Fund (RIF) for
economic development assistance to small businesses.
In accordance with the terms of the $14.87 million Loan Guarantee
Program, $8.87 million will be for the Loews project and $6
million will be used to establish the Revolving Loan fund. Approval
AGENDA ITEM ~ 1 ~
DATE_ 1-/1-'7~
of this Loan Guarantee request, entitled the City to receive the $1
million EDI Grant, of which $400,000 is presently designated
towards the Loews project and $600,000 towards the Revolvi::1g Loan
Fund. There is also a provision in the funding approval,
authorizing a waiver of CDBG-related pre-agreement costs of up to
$1.13 million for the Loews project, thereby allowing the City to
seek to borrow an additional $1.13 million from a private lender
and use future CDBG funds as collateral for this specific amount.
ANALYSIS
With the Loews project ready to break ground within the next few
months, the City has been working through its consultant, Community
Capital Corporation, to establish the mechanism through HUD by
which to draw down the funds. The funds will be drawn down on an
interim/as needed basis, with interest due only on the funds drawn.
The interest rate on funds received through the interim lender is
based on the floating three-month London Interbank Offering rate
(LIBOR), plus 20 basis points. The rate would be approximately
5.75%, if funds were drawn down at this time.
The actual terms and conditions for the draw down of the Loan
Guarantee funds will be the subject of a separate contract
agreement which will be forthcoming from HUD. Also forthcomi::1g from
HUD, will be an additional contract agreement for the Economic
Development Initiative (EDI) Grant in the amount of $1,000,000,
which presently calls for $400,000 to be used for the Loews project
and $600,000 for the Revolving Loan Fund. EDI funds become
available as Section 108 funds are drawn down.
CONCLUSION
Execution of the attached funding approval agreement betwE!en the
City and the U.S. Department of HUD is the required first step in
order to proceed with the preparation and execution of the contract
for the draw down of funds under the Section 108 Loan Guarantee
program and the EDI Grant. No costs are incurred by this action.
The City's action locks in the HUD offer of $14,870,000 in Loan
Guarantee Commitment Authority and permits the City to move ahead
with negotiations with HUD for its specific use.
JGP:~/jPh
Attachments
8. Special Conditions:
(continued)
(a) In the event the applicant shall fail to submit:
promissory notes or other obligations to the S4:!cretary
for inspection and guarantee before September 3, 1996,
this commitment shall terminate and expire as c)f such
date.
(b) The applicant shall submit a repayment scheduh~ for the
guaranteed loan that is acceptable to the SecrE~tary.
(c) The applicant shall furnish such additional sec:urity
for the guaranteed loan as the Secretary deems
appropriate. Such security will be specified in the
Contract referred to in 24 CFR S570.705(b)(1).
Funding Approval/Agreement
Title I of the Housing and Community
QevelGpment Act (Public Law 93-383)
HI-00615R of 20515R
U.S. Department of Housing
and Urban Development
Office of Community Planning
and Development
Community Development Block Grant Program
1. Nam.. ot Grant.... (ee shown in Itam 5 ot Standard Form-4241 3. Grante..'s 9-0igit Tax 10 Number 4. Oat.. Use ot Funds May Begin
CITY OF MIAMI BEACH, FLORIDA
5a. Proj..ct 1 Grant Number 1 6a. Amoun: Approved
2. Grantee's Compl..t.. Address (ee shown in Item 50t Standard Form-4241 B-94-MC-12-0014
6b. Project 1 Grant Number 2 6b. Amoun': Approved
1700 Convention Center Drive 5c. Project 1 Grant Number 3 6c. Amount Approved
Miami Beach, FL 33139
Grant Agreement
This Grant Agreement between the Department of Housing and Urban Development (HUD) and the above ndmed Grantee is made
pursuant to the authority of Title I of the Housing and Community Development Act of 1974, as amended, (4:~ U.S.C. 5301 et seq).
The Grantee's submissions for Title I assistance, the HUD regulations at 24 CFR Part 570 (as now in effect and as may be amended
from time to time), and this Funding Approval, including any special conditions, constitute part of the Agrel!ment. Subject to the
provisions of this Grant Agreement, HUD will make the funding assistance specified here available to the Grantee upon execution of
the Agreement by the parties. The funding assistance specified in the Funding Approval may be used to pay costs incurred on or
after the date specified in 4 above provided the activities to which such costs are related are carried out in compliance with all
applicable requirements. Pre-agreement costs may not be paid with funding assistance specified here unless they are authorized in
HUD regulations or approved by waiver and listed in the special conditions to the Funding Approval. The Grantee agrees to assume
all of the responsibilities for environmental review, decision making, and actions, as specified and required in regulations issued by
the Secretary pursuant to Section 104(g) of Title I and published in 24 CFR Part 58. The Grantee fun her acknowledges its
responsibility for adherence to the Agreement by subrecipient entities to which it makes funding assistance hereunder available.
H01~g ~tgJftlture. name. title, datel
C. 'wlli~ams, Deputy As~f~ah~ /995
ta for Grant Pro rams
7. Check On Ona: Category ot Title I Assistance tor this
funding Action
a. Entitl..m..nt. Sec106(bl
8. Sp..cial
Conditions
(ch..ck on..)
b. State-Administ..red, S..c 1 06(d)( 1)
Non..
b. Am..ndm..nt
x
c. HUO-Administ..red Small Cities. Sec 106(dH2)(BI
Attached
9c. Date ot Start of Program Year:
X 10/01/94
c. Amendment Number
1
d. Indian COBG Programs. Sec 106 (a)(1)
11. Amount ot
Community
O..velopment
Block Grant
a. Funds Reserved For
This Grante..
FY
94
FY
FY
e. Surplus Urban R..newal Funds, S..c 112(b)
t. Special Purpos.. Grants, Sec 107
g. Loan Guarante.., Sec 108
X b. Funds Now Being
Approved
l
12a.
12b. Name and Complete Address of Public Agency
14,870,000
loan Guarantee Acceptance Provisions for
Designated Agencies
The public agency hereby accepts the Grant Agreement executed by the
Department of Housing and Urban Development on the above date with respect to
the above grant number(sl as Grantee designated to receive loan guarantee
assistance, and agrees to comply with the terms and conditions of the Agreement,
applicable regulations, and other requirements of HUD now or hereafter in effect.
pertaining to the essistance provided it.
HUD Accounting Use Only
TAC
ITD[lffiITrr 0 0 OJ rnllmNO'
Y
o
Y
o
NOT APPLICABLE
1 2c. Signature of Authorized Official (nama, title. date) tor
Designated Public Agency
X NOT APPLICABLE
Data Enterad PAS
~
~
~
~
Data Entarad LOCCS Batch Number
[ITJ
Amount
Effective Date F
] I 10
]
]
Amount
Amount
Transaction Code
Enterad by:
] Veriflad by:
form HUD-7082 14/14/931
24 CFR 570
Previous Editions are Obsolete
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U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON. D.C. 20410-7000
OFFICE OF THE ASSISTANT SECRETARY FOR
COMMUNITY PLANNING AND DEVELOPMENT
AUG I 0 /995
Honorable Seymour Gelber
Mayor of Miami Beach
Miami Beach, FL 33139
Dear Mayor Gelber:
Please be informed that the City of Miami Beach's request
for loan guarantee assistance under section 108 of the H~lsing
and Community Development Act of 1974, as amended, has bel,m
approved. Such assistance is to consist of the guarantee of
notes or other obligations in the principal amount of
$14,870,000, plus interest thereon, to finance activities
described in application B-94-MC-12-0014.
This offer of commitment is subject, however, to the
conditions specified in Item 8 of the Funding Approval (Fc:>rm
HUD-7082).
'l'ne first condition provides that in the event the City
fails to submit notes or other obligations for inspection and
guarantee by the u.S. Department of Housing and Urban
Development (HUD) before September 3, 1996, the offer wiLL expire
as of such date.
The second condition provides that the repayment schE!dule
for the guaranteed loan must be acceptable to HUD.
The third condition specifies that the City furnish ~uch
additional security for the repayment of the guaranteed loan as
HUD deems appropriate, i.e., security in addition to the pledge
of Community Development Block Grant (CDBG) funds. This lsecuri ty
will be specified in the Contract for Loan Guarantee Assistance,
which will be executed at the time the guaranteed obligatj.ons are
issued.
The fourth condition authorizes the waiver of the
regulations at 24 CFR 570.200(a) (5), Cost Principles, and 24 CFR
570.200(h), preagreement Costs, to permit the City of Mi~li Beach
to borrow $1,130,000 from local financial institutions to
complete the development of the Loews project as described in the
city's amended EDI grant application dated February 7, 1995. The
borrowed amount is to be repaid from future CDBG grant funds.
This waiver is granted pursuant to 24 CFR Section 570.5. Waivers,
which authorizes the granting of such waivers of the CDBG
regulations. You are advised that use of grant funds to repay
the $1,130,000 loan is contingent upon the availability of CDBG
funds and the activities being in compliance with the statutory
and regulations provisions in effect at the time of the award of
the grant from which the funds are derived.
Please furnish us, at the address specified in the last
paragraph of this letter, your timetable for execution of the
activities described in your application. These activities
will be financed through a public offering of Section 108
obligations. If you need funds prior to the next public
offering, please notify HUD at the address below and instructions
for obtaining interim financing will be provided.
In addition to the special conditions cited above, the
release of funds for the project to be carried out with loan
guarantee assistance is conditioned upon compliance by the
City with all applicable provisions of the HUD Environmental
Review Procedures (24 CFR Part 58). In this regard a request for
release of funds must be approved by HUD prior to the obligation
or utilization of funds for the project.
Please execute the three enclosed copies of the Funding
Approval and return two copies to the Department of Housing and
Urban Development, Office of Block Grant Assistance, Financial
Management Division, Room 7180, 451 Seventh Street, S.W.,
Washington, D.C. 20410. One copy should be retained for your
files. The Funding Approval amends the Grant Agreement
authorized by HUD on August 12, 1994, under the Funding Approval
for grant number B-94-MC-13-0005'to include loan guarantel~
assistance. The Grant Agreement thereby incorporates this
Funding Approval, the loan guarantee application, and Subpart M
of the block grant regulations governing loan guarantees, as well
as such agreements, schedules, and other documentation required
to be submitted or executed in connection therewith.
Very sincerely yo~rs,
Enclosures
~
~,~
nneth C. Williams
eputy Assistant Secreta~r
for Grant Programs