2009-27087 ResoRESOLUTION NO. 2009-27087
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 REHABILIATED 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 $3.2 MILLION
MORTGAGE IN FAVOR OF A $2 MILLION MORTGAGE BEING MADE
TO MBCDC BY THE FLORIDA HOUSING FINANCE CORPORATION
SPECIAL HOUSING ASSISTANCE AND DEVELOPMENT PROGRAM
(SHADP); 2) CONSENTING, BUT NOT SUBORDINATING, TO MBCDC'S
LOAN AND RECORDING OF A MORTGAGE FROM MIAMI-DADE
COUNTY'S SURTAX FUNDS, IN THE AMOUNT OF $1 MILLION;
APPROVING ACTION NOS. 1 AND 2 ABOVE SUBJECT TO AND
CONTINGENT UPON THE CITY MANAGER AND CITY ATTORNEY'S
REVIEW OF ANY SUBORDINATION AND CONSENT DOCUMENTS;
AND 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, was
purchased by MBCDC on March 18, 2005 with City of Miami Beach HOME funds; the City's
funds are secured by a mortgage and security agreement against the property, in the
amount of $3.2 million dollars; and
WHEREAS, in and effort to proceed in a timely fashion with necessary rehabilitation
of the Villa Maria project, MBCDC applied for and was awarded an additional $2 million in
Florida Housing Finance Corporation Special Housing Assistance and Development
Program (SHADP) funds; and
WHEREAS, upon MBCDC's closing of the subject loan, the State will require the
City to subordinate its position (the $3.2 million) on the $2 million SHADP loan; and
WHEREAS, MBCDC is also preparing to close with Miami-Dade County on a Surtax
Loan, in the amount of $1 million, for the Villa Maria project, and the County, while not
requesting that the City subordinate its position, requests thaij; the City consent to the
County loan/mortgage to MBCDC ~ ~
NOW THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, the Mayor and City
Commission hereby approve 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 $3.2 million mortgage in favor of a $2 million
mortgage being made to MBCDC by The Florida Housing Finance Corporation Special
Housing Assistance And Development Program (SHADP); 2) consenting, but not
subordinating, to MBCDC's loan and recording of a mortgage from Miami-Dade County
surtax funds, in the amount of $1 million; approving action nos. 1 and 2 above subject to
and contingent upon the City Manager and City Attorney's review of the subordination and
consent documents; and further authorizing the City Manager to execute any and all
documents to effectuate the aforestated transactions.
PASSED AND ADOPTED this 3rd day of June , 2009.
ATTEST:
~G(/L U~
CITY CLERK OR
Robert Parcher Matti Herrera Bower
T:WGENDA\2009Wune 3\Consent\MBCDC Villa Maria Subordination Reso.doc
APPROVEp A$ TIO
FORM $ LANGUAGE
COMMISSION ITEM SUMMARY
r`nnrloncarl Titlo•
A resolution 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 $3.2 million mortgage in favor of a $2 million mortgage being made to MBCDC by the Florida Housing Finance
Corporation Special Housing Assistance and Development Program (SHADP); 2) further consenting, but not subordinating, to MBCDC's
loan and recording of a mortgage from Miami-Dade County's Surtax funds, in the amount of $1 million; approving actions 1 and 2 above
subject to and contingent upon the City Manager and City Attorney's review of the documents referred hereto, and further authorizing the
City Manager to execute any and all documents to effectuate the aforestated transactions.
Key Intended Outcome Supported:
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 housing for the elderly/seniors.
Issue:
Shall the City enter into a subordination agreement in favor of the State of Florida, and consent to MBCDC's loan with Miami-Dade County?
item summary~rcecommenaativn:
The 34-unit Villa Maria Apartments, located at 2800 Collins Avenue, as well as the adjacent property, was purchased by MBCDC on March
18, 2005, with City of Miami Beach HOME funds and secured by the necessary mortgage and security agreements against Villa Maria's two
lots, as well as the two lots which comprise the adjacent property, located at 221 28th Street. The adjacent property was subsequently
planned to also be developed by MBCDC as the Villa Matti Apartments, a 36-unit elderly affordable housing project.
The projected construction funding for Villa Maria was assembled from HUD, State, and County funds. However, due to the delays in closing
on the State and County loans, MBCDC sought a private bank construction line of credit to draw down funds, pending the closing of the other
funding sources. A commitment for a construction loan from International Finance Bank was conditioned upon the bank being the first
mortgage holder. State and County funds will be used to pay down the IFB construction loan, leaving a balance of $500,000 as a permanent
loan.
On July 17, 2008, the City Commission approved the release of the existing mortgages and security agreements against the four lots, and
provided for execution and recordation of a new mortgage, note, and security agreement on the two Villa Maria lots in the amount of $3.2
million, and approved a subordination of the City's $3.2 million interest/new mortgage in favor of a $3 million construction loan made to
MBCDC by International Finance Bank (IFB Loan). Anew Mortgage and Security Agreement between MBCDC and the City was executed
and recorded in September 2008.
On April 27, 2009, MBCDC received written notice from the Florida Finance Housing Corporation (FCHC), re-affirming its commitment for the
SHADP loan funds and targeting a closing date no later than June 29, 2009. In order for MBCDC to close on the SHADP loan, the City has
been asked to subordinate its position to the State.
Additional financing for MBCDC's development of the Villa Maria project will be forthcoming from aMiami-Dade County $1 million Surtax
loan, and from aMiami-Dade County allocation of $1,215,000 in HOME funds. The County has not requested a subordination of the City's
position; however it has requested written confirmation of the City's consent to MBCDC's closing on the $1 million Surtax loan. The $1
million will be due to the County, with no interest payments due over the 30-year life of the loan.
The Villa Maria project is now at 50% of construction completion and is expected to be complete and fully occupied by November, 2009.
Board Recommendation:
Financial Information:
Source of Amount Account
Funds: 1 N/A N/A
OBPI Total
Financial Impact Summary:
Clerk's Office Legislative
Si n-Offs:
Department Director A i tant 'ty Manager City Manager
AP HMF JM
T:\AGENDA\2009Uune 3\ConsentUABCDC Villa Maria Subordination Summary.doc ~ U
~ MIAMIBEACH
AGENDA ITEM G7T
DATE 6 ~ 3'd 9
m MIAMIBEACH
City of Mipmi Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City C mission
FROM: Jorge M. Gonzalez, City Manager
DATE: June 3, 2009
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 REHABILIATED
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 $3.2 MILLION MORTGAGE IN FAVOR OF A $2
MILLION MORTGAGE BEING MADE TO MBCDC BY THE FLORIDA HOUSING
FINANCE CORPORATION SPECIAL HOUSING ASSISTANCE AND DEVELOPMENT
PROGRAM (SHADP); 2) FURTHER CONSENTING, BUT NOT SUBORDINATING, TO
MBCDC'S LOAN AND RECORDING OF A MORTGAGE FROM MIAMI-DADE
COUNTY'S SURTAX FUNDS, IN THE AMOUNT OF $1 MILLION; APPROVING
ACTIONS 1 AND 2 ABOVE SUBJECT TO AND CONTINGENT UPON THE CITY
MANAGER AND CITY ATTORNEY'S REVIEW OF THE DOCUMENTS REFERRED
HERETO, AND 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, as well as the adjacent property, was
purchased by MBCDC on March 18, 2005, with City of Miami Beach HOME funds and secured by the
necessary mortgage and security agreement against Villa Maria's two lots, as well as the two lots which
comprise the adjacent property, located at 221 28th Street. The adjacent property was subsequently planned
to also be developed by MBCDC as the Villa Matti Apartments, a 36-unit elderly affordable housing project.
In order for MBCDC to qualify for a US HUD grant in the amount of $4,836,260 for the construction of Villa
Matti project, the debt from the four originally secured lots was transferred to the two lots on which Villa Maria
sits.
The projected construction funding for Villa Maria was assembled from HUD, State, and County funds.
However, due to the delays in closing on the State and County loans, MBCDC sought a private bank
construction line of credit to draw down funds, pending the closing of the other funding sources. A
commitment for a construction loan from International Finance Bank was conditioned upon the bank being the
first mortgage holder. The State and County funds will be used to pay down the IFB construction loan, leaving
a balance of $500,000 as a permanent loan. While debt service payments are currently`projected over a 30-
yearaffordability period, the bank intends to renew the loan every five years at the most favorable terms.
Villa Maria Subordination
June 3, 2009
Page 2 of 2
Consequently, on July 17, 2008, Resolution 2008-26850 was passed which approved the release of the
existing mortgages and security agreements against the four lots, and provided for execution and recordation
of a new mortgage, note, and security agreement on the two Villa Maria lots in the amount of $3.2 million, and
approved a subordination of the City's $3.2 million interest/new mortgage in favor of a $3 million construction
loan made to MBCDC by International Finance Bank (IFB Loan). The new Mortgage and Security Agreement
between MBCDC: Villa Maria, LLC, the Mortgagor, and the City of Miami Beach, Mortgagee, was executed on
September 19, 2008, and recorded on September 23, 2008.
In November 2008, at 35% of construction completion, MBCDC and the City learned that the $2 million loan
commitment from the State of Florida's Special Housing Assistance and Development Program (SHADP) for
the development of the Villa Maria project was at risk of being withdrawn by the State Legislature. However,
due to MBCDC's diligence and the City's support and commitment towards this project, MBCDC's application
was ranked first in its category against at least twenty other competing projects. MBCDC was able to retain
the full amount of the SHADP funds. On April 27, 2009, MBCDC received written notice from the Florida
Finance Housing Corporation (FCHC), re-affirming its commitment for the SHADP loan funds and targeting a
closing date no later than June 29, 2009. In order for MBCDC to close on the SHADP loan, the City has been
asked to subordinate its position to the State.
Additional financing for MBCDC's development of the Villa Maria project will be forthcoming from aMiami-
Dade County $1 million Surtax loan, and from aMiami-Dade County allocation of $1,215,000 in HOME funds.
The County has not requested a subordination of the City's position; however it has requested written
confirmation of the City's consent to MBCDC's closing on the $1 million Surtax loan. The $1 million will be due
to the County, with no interest payments due over the 30-year life of the loan.
The Villa Maria project is now at 50% of construction completion and is expected to be complete and fully
occupied by November, 2009. A Sources and Uses chart of the Villa Maria development funds is attached for
your information.
CONCLUSION
The Administration recommends approval of the subordination of its position to the State SHADP in order to
facilitate the closing of the loan to MBCDC; and further recommends consenting to, but not subordinating to,
MBCD urtax County loan.
JMG/ M
Attachments Sources and Uses Chart
Pie Chart
T:\AGENDA\2009Uune 3\Consent\MBCDC Villa Maria Subordination Memo.doc
~. SOURCES AND USES
~~
_
VILLA MARtA APARTMENTS
SOURCES
International Finance Bank 500,000
State Of Florida SHADP _
2,000,000
City of Miami Beach HOME CHDO 3,200,000
Miami Dade County Surtax 1,000,000
Miami Dade Coun HOME/Surtax 1,215,000
City of Miami Beach HOME NOFA 185,273
Ci of Miami Beach CDBG 50,000
CMB/Miami Dade Coun -Hurricane Wilma 442,500
TOTAL t3 592 773
USES
Ac uisition 2,600,000
Construction 3,833,687
_
Construction Contingency 471,792
Pre Development Costs 928,329
_
Develo er Fee 758,965
TOTAL 8,592,773
Villa Maria Apartments Sources & Uses May 19, 2009.123 05/18/2009
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