2018-30260 ResolutionRESOLUTION NO.
2018 -30260
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, APPROVING AND AUTHORIZING THE CITY MANAGER TO BID
AND PURCHASE, AT THE FORECLOSURE SALE, THE AFFORDABLE HOUSING
PROPERTY LOCATED AT 7734 ABBOTT AVENUE, UNIT NO. 102, MIAMI BEACH, FL
33141, IN AN AMOUNT NOT TO EXCEED $100,000, UTILIZING AVAILABLE HOME
INVESTMENT PARTNERSHIP (HOME) FUNDS; FURTHER, SHOULD THE CITY
SUCCESSFULLY PURCHASE THE PROPERTY, APPROVING AND AUTHORIZING
THE CITY MANAGER TO SELL THE PROPERTY TO AN INCOME- ELIGIBLE BUYER;
AND, FURTHER, AUTHORIZING THE CITY MANAGER TO EXECUTE ALL
DOCUMENTS AND MAKE ALL NECESSARY EXPENDITURES IN CONNECTION WITH
THE PURCHASE AND SALE OF THE PROPERTY.
WHEREAS, the City is an entitlement recipient of HUD formula grant programs as follows:
Community Development Block Grant (CDBG) fund, and HOME Investments Partnership
(HOME) funds; and
WHEREAS, CDBG funds are used to provide vital public services, housing activities and
improvement to public facilities and HOME funds are used for affordable housing activities
including multi- family rentals; and
WHEREAS, the State of Florida enacted the William E. Sadowski Affordable Housing Act,
Chapter 92 -317 of Florida Sessions Laws, allocating a portion of documentary stamp taxes on
deeds to local governments for the development and maintenance of affordable housing; and
WHEREAS, the State Housing Initiatives Partnership (SHIP) Act, ss. 420.907- 420.9079,
Florida Statutes (1992), and Rule Chapter 67 -37, Florida Administrative Code, requires local
governments to develop a one to three -year Local Housing Assistance Plan (LHAP) outlining
how funds will be used; and
WHEREAS, the Mayor and City Commission adopted Resolution No. 2016- 29364, which
approved the City's LHAP for Fiscal Years 16/17 through 18/19, pursuant to the requirements of
the SHIP Act and the SHIP Program Rule, issued by the Florida Housing Finance Corporation
(FHFC); and
WHEREAS, Miami Beach Community Development Corporation (MBCDC) formerly
administered homebuyer activities through the use of HOME, CDBG and SHIP funds until 2010,
and awarded funds to income - eligible homeowners that were required to use the property as the
primary residence for an affordability period of ten (10) to fifteen (15) years; and
WHEREAS, the City audited all homebuyer files, resulting in $213,000 of recaptured HOME
funds due to homebuyer defaults and as a result of foreclosures sales of various properties that
did not comply with the affordability period of each property; and
WHEREAS, the City was notified, through the filing of a mortgage foreclosure lawsuit, that
the first mortgagee of the property located at 7734 Abbott Avenue, Unit 102, formerly purchased
with SHIP, HOME and CDBG funds, was in foreclosure after the death of its owner; and
WHEREAS, a foreclosure sale date has not been scheduled; and
WHEREAS, the property is encumbered by a first and second mortgage, with a balance of
approximately $86,000; and
WHEREAS, the City provided loans, in the amount of $104,668.08 in 2009, in connection
with the purchase and rehabilitation of the property, which loans are secured by restrictive
covenants, in third, fourth and fifth positions, and which have an affordability period of ten (10)
years; and
WHEREAS, the City has a right of first refusal to purchase the unit embedded in its
restrictive covenants; and
WHEREAS, the Property Appraiser's website estimates the property value at approximately
$86,000, which is historically lower than the market value; and
WHEREAS, the market value of the property could be as high as approximately $118,000,
according to the estimate obtained through the Zillow website; however, the limit that the City
can provide a very -low income - eligible household in a resale of the property cannot exceed
$100,000; and
WHEREAS, the City Administration recommends bidding at the foreclosure sale up to the
$100,000 limit, utilizing recaptured HOME funds, which will cover the first and second
mortgages for this property, valued at approximately $86,000 (plus any unknown unliquidated
amounts which may be owed to the first and second lienholders); allow the City to receive back
the balance of the sales proceeds (approximately $14,000); and provide the City with the
opportunity to purchase the property for the total sum that the City can, in turn, resell to an
income- eligible buyer; and
WHEREAS, if the City is successful in purchasing the property at the foreclosure sale, the
City has a very -low income - eligible household ready and willing to purchase and qualified for up
to $100,000 in purchase assistance through SHIP funds; and
WHEREAS, the purchase and resale of the property would extend the affordability period
for an additional fifteen (15) years.
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 City Manager to bid and purchase, at the foreclosure sale, the affordable
housing property located at 7734 Abbott Avenue, Unit No. 102, Miami Beach, FL 33141, in
an amount not to exceed $100,000, utilizing available HOME Investment Partnership
(HOME) funds; further, should the City successfully purchase the property, approve and
authorize the City Manager to sell the property to an income - eligible buyer; and, further,
authorize the City Manager to execute all documents and make all necessary expenditures in
connection with the purchase and sale of the property.
Passed and adopted this i/ day;c5VsK Kzd , 2018.
ATTEST:
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Rafael E. Granado, City Clerk
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City Attorney
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BEACH
Resolutions - C7 M
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Jimmy L. Morales, City Manager
DATE: April 11, 2018
SUBJECT A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING AND /OR AUTHORIZING THE
FOLLOWING ACTIONS: THE AUTHORITY TO BID, PURCHASE AND RESALE OF
THE AFFORDABLE HOUSING UNIT LOCATED AT 7734 ABBOTT AVENUE, APT.
102 MIAMI BEACH, FL 33141 IN AN AMOUNT NOT TO EXCEED
$100,000 UTILIZING AVAILABLE HOME INVESTMENT PARTNERSHIP (HOME)
FUNDS.
RECOMMENDATION
Adopt the Resolution.
BACKGROUND
The City is an entitlement community designated by the U.S. Department of Housing and Urban
Development (HUD) and as determined by the decennial census information on population growth
lag, age of housing stock, and poverty. As an entitlement community, the City receives an annual
allocation under HUD funding through the Community Development Block Grant (CDBG) and
HOME Investments Partnership (HOME) programs, The City also receives an annual allocation of
Statewide Housing Initiatives Partnership (SHIP) funds that award income - eligible applicants with
purchase assistance and homeowner rehabilitation, with the intent to preserve affordable housing.
The State of Florida enacted the William E. Sadowski Affordable Housing Act, Chapter 92 -317 of
Florida Sessions Laws, allocating a portion of documentary stamp taxes on deeds to local
governments for the development and maintenance of affordable housing. The State Housing
Initiatives Partnership (SHIP) Act, §420.907- 420.9079, Florida Statutes (1992), and Rule Chapter
67 -37, Florida Administrative Code, requires local governments to develop a one -to three -year
Local Housing Assistance Plan (LHAP) outlining how funds will be used. The LHAP also
establishes the maximum SHIP funds allowable for each programmatic strategy. The City's LHAP,
approved on April 13, 2016, includes the following strategies: 1) Owner - Occupied Rehabilitation; 2)
Disaster Mitigation Recovery; 3) New Construction; 4) Purchase Assistance; 5) Rental Housing
Development; and 6) Acquisition /Rehabilitation.
The City's First Time Homebuyer Program and Homeowner Rehabilitation Program was formerly
administered by Miami Beach Community Development Corporation until 2010. Subsequently, the
City administered the program and audited all files, resulting in multiple defaults and recaptures due
to non - compliance with various provisions in both HOME and SHIP. The City recaptured $213,000 of
HOME funds throughout various fiscal years as a result of foreclosures, sales or various transactions
that did not comply with the affordability period of each impacted property.
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ANALYSIS
The City has been notified that a unit previously assisted and acquired with CDBG and SHIP funds
is in foreclosure. The unit, located at 7734 Abbott Avenue, Apt. 102, entered foreclosure after the
death of its owner. The City awarded $104,668.08 to acquire and rehabilitate the unit in 2009 and is
currently in last position as lienholder. However, the City has the right to first refusal to purchase the
unit embedded in its restrictive covenant.
The City would like to satisfy the first and second mortgages for this property, valued at
approximately $86,000, and subsequently process the resale to a very -low income - eligible household
that is ready and willing to purchase. The City has income - certified the household as very -low income
and approved their program participation at up to $100,000 in assistance through SHIP funds.
This family has been challenged to find an affordable home because of their restricted income and
age (elderly). However, the availability of this unit's acquisition cost is within the household's financial
capacity. This transaction would also allow the unit to remain affordable for an additional fifteen
years.
The City is seeking authorization to negotiate a price up to $100,000, the maximum amount eligible
under the SHIP program for the low- income household category. The scheduled hearing for this
transaction will be April 12, 2018.
CONCLUSION
The Administration recommends approval and authorization of the actions proposed above,
authorizing the City Manager to execute all required documents as delineated herein.
KEY INTENDED OUTCOMES SUPPORTED
Ensure Workforce Housing For Key Industry Workers Is Available In Suitable Locations
Amount 1 163,370.00 Account 1 174- 0530 - 000346 -00- 404 - 534- 00- 00 -00-
52270
Legislative Tracking
Housing and Community Services
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