96-22085 RESO Incomplete
RESOLUTION NO.
96-22085
A RESOLUTION OF THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING
THE WAIVER OF CERTAIN CITY FEES IN CONNECTION
WITH A PROJECT TO BE DEVELOPED BY BAY ROAD
VENTURE, INC., FUNDED WITH HOME INVESTMENT
PARTNERSHIPS PROGRAM (HOME) FUNDS, AT 1401 BAY
ROAD, IN ORDER TO MEET HOME MATCH
REQUIREMENTS AS RECOMMENDED BY THE LOAN
REVIEW COMMITTEE.
WHEREAS, the City of Miami Beach is an entitlement recipient designated by the
U.S. Department of Housing and Urban Development (HUD) as a participating jurisdiction
to receive funding through the HOME Investment Partnerships Program (HOME); and
WHEREAS, participating jurisdictions are required by the HOME regulations to
make match contributions to housing that qualifies as affordable housing under the HOME
program, throughout a fiscal year; and
WHEREAS, the match contribution that is required for the participating jurisdiction
is 12.5 percent of the funds expended for projects each fiscal year; and
WHEREAS, all eligible activities carried out with respect to a HOME project carry
with them the matching contribution requirements associated with the project designation;
and
WHEREAS, participating jurisdictions may count as match the value of local fees
and other charges normally and customarily imposed or charged on projects in the
jurisdiction, if it waives those charges for HOME-assisted projects; and
WHEREAS, on July 28, 1993, the Mayor and City Commission adopted Resolution
No. 93-20859 authorizing the execution of a HOME Agreement between the City and
Affordable Landmarks, Inc., utilizing federal HOME funds; and
WHEREAS, the Agreement provided HOME funding to be used towards the cost
of land acquisition and construction of a mixed-income condominium at 14th Street and
Bay Road (Project); and
WHEREAS, on August 31, 1994, the City Manager executed a site transaction
Agreement which further specified the requirements of the HOME program relative to the
Project; and
WHEREAS, the August 31,1994 Agreement provided for a one-time only
assignment from Affordable Landmarks, Inc., to Bay Road Venture, Inc., and
WHEREAS, Bay Road Ventwe, Inc., is the successor in interest to Affordable
Landmarks, Inc., and has assumed all of the obligations of Affordable Landmarks, Inc.,
under both the July 28, 1993 and August 31, 1994 Agreements; and
WHEREAS, the Loan Review Committee has recommended that the City consider
waiving the Project impact fees to the extent possible, to provide a matching contribution
to the federal HOME funds.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA as follows:
1. The waiver of City fees is authorized, not to exceed a $25,000 Parking Impact
Fee, a $25,000 Building Permit Fee, and a $14,420 Water and Sewer Impact Fee in
connection with the Project to be developed by Bay Road Venture, Inc., funded under the
HOME Program, at 1401 Bay Road, Miami Beach, in order to meet HOME Program match
requirements as recommended by the Loan Review Committee.
PASSED AND ADOPTED THIS 17th DAY OF July
I 1996.
ATTEST:
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CITY CLERK
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V\Cs€:; MAYOR
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FORM APPROVED
BY~~
Date 7//2'/~6
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
TO:
FROM:
SUBJECf:
COMMISSION MEMORANDUM NO. 3 SL -C} t::,
Mayor Seymour <dlber and
Memben or the City Commission
DATE:
July 17, 1996
Jose Garcia_pedrosa/!
City Manager
A RESOLUTIO AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE AN AMENDED AND RESTATED AGREEMENT RELATIVE TO
THE HOME INVESTMENT PARTNERSHIPS PROGRAM (HOME)
AGREEMENT DATED AUGUST 31,1994, BETWEEN THE CITY OF MIAMI
BEACH AND AFFORDABLE LANDMARKS, INC., PERTAINING TO THE
LAND ACQUISITION AND CONSTRUCTION OF A CONDOMINIUM
BUILDING AT 1401 BAY ROAD, MIAMI BEACH, FLORIDA, IN ORDER TO:
1) INCREASE THE TOTAL HOME FUNDS AUTHORIZED FROM ONE
MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS ($1,250,000) TO
ONE MILLION EIGHT HUNDRED FORTY FIVE THOUSAND NINETY-ONE
DOLLARS ($1,845,091); 2) INCREASE THE NUMBER OF HOME
PROGRAM HOMEOWNERS HIP UNITS FROM 25 TO A MINIMUM OF 37;
3) DOWNSIZE ,THE TOTAL NUMBER OF PROJECT UNITS FROM 96 TO
52 IN COMPLIANCE WITH NEW ZONING REQUIREMENTS; 4) WAIVE
CERTAIN CITY FEES AS RECOMMENDED BY THE LOAN REVIEW
COMMITTEE; FURTHER AUTHORIZING THE MAYOR AND CITY CLERK
TO EXECUTE ANY NECESSARY ACCOMPANYING CLOSING
DOCUMENTS FOR THIS TRANSACTION, SUBJECT TO REVIEW BY THE
CITY ATTORNEY'S OFFICE.
ADMINISTRATION RECOMMENDATION:
The Mayor and City Commission should adopt the attached Resolution authorizing the
Mayor and City Clerk to execute an Amended and Restated Agreement relative to the
HOME Agreement dated August 31, 1994, between the City of Miami Beach and
Affordable Landmarks, Inc., pertaining to the land acquisition and construction of a
condominium building at 1401 Bay Road, Miami Beach, Florida, in order to: 1) increase
the total HOME funds authorized from One Million Two Hundred Fifty Thousand Dollars
($1,250,000) to One Million Eight Hundred Forty Five Thousand Ninety-One Dollars
($1,845,091); 2) increase the number of HOME Program homeownership units from 25 to
a minimum of 37; 3) downsize the total number of project units from 96 to 52 in compliance
with new zoning requirements; 4) waive certain City fees as recommended by the Loan
AGENDA ITEM 'R JJ-
DATE i-O-9l,
COMMISSION MEMORANDUM
JULy 17, 1996
PAGE 2
Review Committee; further authorizing the Mayor and City Clerk to execute any necessary
accompanying closing documents for this transaction, subject to review by the City
Attorney's Office.
BACKGROUND:
On July 28, 1993, the City Commission adopted Resolution NO.93-20859 authorizing the
execution of a HOME Agreement with Affordable Landmarks, Inc., a Miami Beach based
firm specializing in the development, acquisition, rehabilitation, construction and
management of multi-family properties. This agreement was the first for the City under the
newly enacted federal HOME Investment Partnerships Act Program ("HOME"), of which
the City is an entitlement recipient of funding. Affordable Landmarks, Inc., is a Florida
corporation which is wholly owned by Robert S. Saland. The HOME Agreement, in the
amount of $1,250,000, provided a reservation of funds and conceptual plans for the future
land acquisition and construction of a mixed-income high-rise condominium project
consisting of approximately ninety-six units at Bay Road and 14th Street. The project was
previously reviewed and recommended for funding by the City's Loan Review Committee.
On August 31, 1994, a site transaction agreement was executed by the City Manager
providing for the project. According to the Agreement, twenty-five condominium units
were set aside for qualified first-time homebuyers consisting of 16 one-bedroom units and
9 two-bedroom units. The remaining units were to be sold at market rate prices. The
City's $1,250,000 HOME investment is secured by a second mortgage on the property.
The HOME investment is structured as a loan to be repaid through the execution of
individual second mortgages on each of the HOME units. As each unit is sold, a portion
of the HOME funds will be passed down in the form of a second mortgage to the
purchaser. These funds will be secured by deed restriction requiring repayment to the
local HOME Trust Fund upon the sale of the unit.
The City has closely monitored the progress of the project since its inception. Project
milestones were accomplished on schedule including the land closing, completion of
construction documents, soil tests, bid documents, building permit application, construction
of an on-site sales office, reservation deposits accepted on twenty-six market rate units
and condominium documents prepared and submitted to the State. The construction was
scheduled to commence in October, 1995.
A market downturn this past year in the sales of condominium units has forced the owner
to alter the original plan due to difficulty in selling the market rate units. Despite extensive
and costly advertising and marketing campaigns, the required 50% pre-sales of the market
rate units needed to start construction, were not met. To date, the owner has invested
COMMISSION MEMORANDUM
JULy 17, 1996
PAGE 3
$700,000 in the project. The sales center has been subsequently closed due to a lack of
improvement in the market.
The project owner has been working with the City since February to restructure the project
to accommodate the current market conditions and to leverage the City's funds at a rate
acceptable to the City. Since the City's investment is protected by a mortgage on the
property, the owner could either return the City's funds, transfer title of the property to the
City or restructure the project in a manner that will allow it to go forward. Given the City's
previous commitment to this project and HUD rules requiring expenditure of funds within
five years of allocation, the latter option is preferred.
ANALYSIS:
The following revised project proposal was reviewed by the City Administration and
approved by the City's Loan Review Committee on March 1, 1996 and June 21, 1996. As
a result of the January 1994 amendment to the City's Comprehensive Plan and the City's
Planning-in-Progress Ordinance, the property has been down-planned from RM2 to RM1.
Therefore, the overall project will be reduced from fifteen stories to four stories over
ground level parking to comply with these new requirements. The project as revised will
contain a total of 52 two-bedroom units, of which a minimum of 37 two-bedroom units will
be affordably financed utilizing HOME funds to provide silent second mortgages.
Qualified homebuyers earning up to 80% of the Area Median Income for Metropolitan
Dade County will be eligible to purchase these HOME-assisted units. The sales price for
all of the HOME units will be $112,350 which is the maximum sales price/value limit
allowable under the HOME program within the city limits of Miami Beach. The sales price
of the market rate units has not been finalized but it is expected that it will be close to the
price of the HOME-assisted units. The HOME units will be comparable to the market rate
units in all respects. The units will measuie approximately 950 square feet.
An additional $595,091 in HOME funds, above the original $1.25 million, was approved
by the Loan Review Committee in order to provide the additional subsidies required by the
increased number of HOME units. The additional funding for the project utilizes 1992,
1993 and 1994 HOME funds. The reconfigured project will result in an average per-unit
subsidy of $49,867, well below the allowable two-bedroom subsidy limit of $81 ,911 under
the HOME program. The mortgage on the HOME units will be a silent second mortgage
that is 100% due on sale. Thus, all of the HOME funding provided will be passed to the
homebuyers and will reduce the monthly payments on the purchaser's first mortgage.
The first mortgage lender, City National Bank, has provided a construction loan
commitment of $2.5 million dollars for the project, and has waived the pre-sale
COMMISSION MEMORANDUM
JULy 17,1996
PAGE 4
requirements. Therefore, construction can commence immediately upon Design Review
approval. Based on recommendations provided by the Loan Review Committee, the
Amended and Restated Agreement will require construction start-up within 90 days of
Design Review approval, and project completion within fourteen months thereof. The
additional HOME funds requested, $595,091, in combination with the $1.25 million in funds
previously disbursed for the project total $1,845,091, representing 36% of the project
financing. In order to protect the City's investment, the owner will provide the City with
a performance bond which guarantees completion of the project.
At the Loan Review Committee meeting held March 1, 1996, the Committee recommended
that the City consider waiving impact fees to the extent possible to provide a matching
contribution to the federal HOME funds. The City, as an entitlement recipient of federal
HOME funds, is required to make a 12.5 percent matching contributions for the funds
expended for HOME projects each fiscal year. The waiver of certain City fees not to
exceed a $25,000 Parking Impact Fee, a $25,000 Building Permit Fee, and a $14,420
Water and Sewer Impact Fee will provide a portion of the HOME required match.
CONCLUSION:
The Administration recommends that the Mayor and City Clerk execute an Amended and
Restated Agreement relative to the HOME Investment Partnerships Program Agreement
dated August 31, 1994, between the City of Miami Beach and Affordable Landmarks, Inc.,
pertaining to the land acquisition and construction of a condominium building at 1401 Bay
Road, Miami Beach, Florida, in order to: 1) increase the total funding amount from One
Million Two Hundred Fifty Thousand Dollars ($1,250,OOO) to One Million Eight Hundred
Forty Five Thousand Ninety-One Dollars ($1,845,091); 2) increase the number of HOME
program homeownership units from 25 to a minimum of 37; 3) downsize the total number
of project units from 96 to 52 in compliance with new zoning requirements; 4) waive certain
fees as recommended by the Loan Review Committee; furthal authorizing the Mayor and
City Clerk to execute any necessary accompanying closing documents for this transaction,
subject to review by the City Attorney's Office.
JGP~S
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