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2009-27199 ResoRESOLUTION NO. 2009-27199 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING THE SETTLEMENT OF CITY LIENS ON THE REAL PROPERTIES LOCATED AT 960, 950 8~ 946 BAY DRIVE, MIAMI BEACH, FLORIDA, OWNED BY BAY DRIVE VILLAS LLC, RESULTING FROM SPECIAL MASTER CASE NOS. JC06000483 IN THE AMOUNT OF $368,374 AND JF06000309 IN THE AMOUNT OF $214,863 ON 960 BAY DRIVE; JC06000945 IN THE AMOUNT OF $74,249 ON 950 BAY DRIVE; AND JC06000470 IN THE AMOUNT OF $282,065 ON 946 BAY DRIVE PLUS INTEREST BE SETTLED FOR THE AMOUNT OF $90,000; AND FURTHER AUTHORIZING THE CITY MANAGER TO TAKE SUCH ACTION(S) AND EXECUTE ANY AND ALL NECESSARY DOCUMENTS TO COMPLETE SUCH LIEN RELEASES AND SETTLEMENTS. WHEREAS, Bay Drive Villas LLC owns the real property located at 946 Bay Drive, and has accumulated a lien imposed under Special Master Case No. JC0600470 in the amount of $282,065 for various property maintenance violations; and WHEREAS, Bay Drive Villas LLC owns the real property located at 950 Bay Drive, and has accumulated a lien which was imposed under Special Master Case No. JC06000945 in the amount of $74,249 for various property maintenance violations; and WHEREAS, Bay Drive Villas LLC sold the real property located at 960 Bay Drive to the Chehebar Brothers LLC, and specifically required that Bay Drive Villas LLC satisfy those outstanding liens resulting from Special Master Case No. JF06000309 in the amount of $214,863, and Special Master Case No. JC06000483 in the amount of $368,374 for various Code and Fire violations; and WHEREAS, the City of Miami Beach based upon the nature of the violations and the time of compliance for the properties at 960 Bay Drive, 950 Bay Drive and 946 Bay Drive deems that the appropriate settlement amount for this matter is $90,000. NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that those liens on the real properties located at 950 & 946 Bay Drive owned by Bay Drive Villas LLC, and the liens on the real property at 960 Bay Drive owned by Chehebar Brothers LLC, which resulted from Special Master Case Nos. JC06000483 in the amount of $368,374 and JF06000309 in the amount of $214,863 for 960 Bay Drive; and JC06000945 in the amount of $74,249 for 950 Bay Drive; and JC06000470 in the amount of $282,065 for 946 Bay Drive plus interest should be settled in the total amount of $90,000; and further authorizing the City Manager to take such action(s) and execute any and all necessary documents to complete such lien releases and settlements. PASSED and ADOPTED this 10th day of September , 2009. Ma or ATTE Matti Herrera Bowert~l,l~~~©~~ ~ FC~F~t $ Lr'~0~~lAG~ ~ FC3~ CUT#ON CITY CLERK Robert Parcher F:\cmgr\$ALL\BOB\9606ayDrlienreso.doc ,,,..- ~1 y-a y o i ~~ COMMISSION ITEM SUMMARY Condensed Title: A Resolution approving the settlement of City liens on real properties located at 960, 950 & 946 '' Bay Drive in the amount of $368,374 and in the amount of $214,863 on 960 Bay Drive; in the amount of $74,249 on 950 Bay Drive; and in the amount of $282,065 on 946 Bay Drive for the amount of $90,000. Key Intended Outcome Supported: Ensure compliance with Code within reasonable time frame. Supporting Data (Surveys, Environmental Scan, etc.): N/A Issue: Shall the Ma or and Ci Commission a rove the Resolution? Item Summary/Recommendation: The properties at 960, 950 and 946 Bay Drive are under the common ownership of Bay Drive Villas LLC. The properties were purchased in April 2005 with the intent to renovate the subject properties. In March 2009, 960 Bay Drive was the subject of a sales agreement between Bay Drive Villas LLC, and the Chehebar Brothers LLC which prompted their request to settle liens on the affected property. As a part of the sales transaction, the seller was expected to resolve the outstanding lien on 960 Bay Drive and an escrow account in the amount of $585,500 was established. On all three (3) properties the Code violations were for a collection of property maintenance violations. The Fire violation on 960 Bay Drive was for anon-functional alarm system and for not maintaining fire extinguishers which we believe became largely a moot point as the propertywas vacated shortly after the citation. In light of the extenuating circumstances associated with these projects, it is recommended that an appropriate settlement amount for the property maintenance violations, which were not egregious, be a settlement of $90,000 to satisfy the liens on all of the properties inclusive of 960 Bay Drive, 950 Bay Drive and 946 Bay Drive. Adviso Board Recommendation: N/A Financial Information: Source of Amount Account. Funds: ~ OBPI Total Financial Impact Summary: Ci Clerk's Office Le islative Trackin Robert C. Middaugh, Assistant City Manager Sign-Offs: Department Director Assi ant City Manager C' anager• R JMG F:\cmgr\$ALL\BOB\960BayDrLienSu m9-9-09.doc ~ MIAMIBEACH lJ `--' AGENDA ITEM ~~ BATE - -~ m MIAMIBEACH City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov COMMISSION MEMORANDUM TO: Mayor Matti Herrera Bower and Members of the City Commission FROM: Jorge M. Gonzalez, City Manager DATE: September 9, 2009 SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING THE SETTLEMENT OF CITY LIENS ON REAL PROPERTIES LOCATED AT 960, 950 & 946 BAY DRIVE, MIAMI BEACH, FLORIDA OWNED BY BAY DRIVE VILLAS LLC, RESULTING FROM SPECIAL MASTER CASE NOS. JC06000483 IN THE AMOUNT OF $368,374 AND JF06000309 IN THE AMOUNT OF $214,863 ON 960 BAY DRIVE; JC06000945 IN THE AMOUNT OF $74,249 ON 950 BAY DRIVE; AND JC06000470 IN THE AMOUNT OF $282,065 ON 946 BAY DRIVE PLUS INTEREST BE SETTLED FOR THE AMOUNT OF $90,000; AND FURTHER AUTHORIZING THE CITY MANAGER TO TAKE SUCH ACTION(S) AND EXECUTE ANY AND ALL NECESSARY DOCUMENTS TO COMPLETE SUCH LIEN RELEASES AND SETTLEMENTS. ADMINISTRATION RECOMMENDATION The properties at 960, 950 and 946 Bay Drive are under the common ownership of Bay Drive Villas LLC. The properties were purchased in April 2005 with the intent to renovate the subject properties. In March 2009, 960 Bay Drive was the subject of a sales agreement between Bay Drive Villas LLC, and the Chehebar Brothers LLC which prompted their request to settle liens on the affected property. As a part of the sales transaction, the seller was expected to resolve the outstanding lien on 960 Bay Drive and an escrow account in the amount of $585,500 was established. The City Attorney's Office and the Administration have worked with representatives of Bay Drive Villas LLC to address liens on all of the properties in order to resolve the matter at the 960 Bay Drive and also at 946 and 950 Bay Drive. The properties still retain some linkage in spite of the pending sales transaction as the proceeds from 960 Bay Drive are to be used by the owners to help complete the renovation at 946 & 950 Bay Drive. At this point in time, 960 Bay Drive is approximately 60% complete with renovation and compliant for the property maintenance violations, while 946 & 950 Bay Drive are approximately 95% completed with the renovation and also compliant for property maintenance violations. Liens which have accrued on all of the properties are as follows: Pro a Address ~ Liens Total 960 Bay Drive Code Lien $368,374 and Fire Lien $214,863 $583,237 950 Ba Drive Code Lien $72,249 $72,249 946 Bay Drive Code Lien $291,915 and $150 Court Cost $292,065 TOTAL $947,551 On all three (3) properties the Code violations were for a collection of property maintenance violations. The Fire violation on 960 Bay Drive was for anon-functional alarm system and for not maintaining fire extinguishers which we believe became largely a moot point as the property was vacated shortly after the citation. The extenuating circumstances for these properties are not uncommon in Miami Beach for projects under going renovation. At the time of the original sale of the property, the property was brought into compliance and the new owners began the permitting process for the renovation. Shortly after their acceptance of the property, the hurricanes of 2005 caused damage to the property and complicated the renovation process, as well as the permitting time associated with the renovation. The renovations would eventually cure all of the outstanding property maintenance violations but were extended by the hurricane, by a Notice problem during the process, as well as an extended permitting process. Subsequently, the economic conditions in the nation drove the property owner to the point that a sale of one (1) property needed to be accomplished in order to keep working on the balance of the properties. It should be noted that the property owners will suffer a substantial loss in the sale of 960 Bay Drive in order to finance the remainder of the work on 946 and 950 Bay Drive. (Letter from Senator Paul Steinberg attached) As part of the due diligence on this item, the City Attorney's Office and the Administration met with the owner's representatives and Counsel several times to review and verify the factual basis for the settlement and also to review the documents relative to the sale of the property and the escrow agreement previously mentioned. In light of the extenuating circumstances associated with these projects, it is recommended that an appropriate settlement amount for the property maintenance violations, which were not egregious, be a settlement of $90,000 to satisfy the liens on all of the properties inclusive of 960 Bay Drive, 950 Bay Drive and 946 Bay Drive. JMG\RCM\sam F:\cmgr\$ALL\BOB\960BayDrLiencommemo9-9-09.doc Attachments 2 787 well' 1~~7"~' ,, 9rOR L LAW OFFICES OF STEINBERG & ASSOCIATES, P.A. 767 ARTHUR GODFREY ROAD MIAMI BEACH, FLORIDA 33140-3413 MIAMI-DARE (305) 538-2344 BROWARD (954) 462-2344 Fax (305) 538-0419 E-MAIL INBOX@SENATORLAW.COM PAUL B. STEINBERG RICHARD L. STEINBERG MORRIS L. STEINBERG (1908-1997) GILBERT K. SQUIRESl, 2, 3, P.L., OF COUNSEL IALSO ADhRTTED tN WASH., D.C. ZALSO PROFESSIONAL ENGINEER IN TEXAS 3ARBiTRATOR-A11~RICAN ARBITRATION ASSOC4ITION PLEASE REPLY TO OUR MIAMI BEACH OFFICE NEw YORK ASSOCIATES OFFICE 276 FIbTH AYENUE SUITE 604 NEw YORK, N.Y.10001 (212)532-0008 June 8, 2009 VIA FACSIMILE & U.S. MAIL 305-673-7782 Mr. Robert Middaugh Assistant City Manager 1700 Convention Center Drive Miami Beach, FI.33139 RE: Properties Located at 960, 946 and 950 Bay Drive, Miami Beach, FL Dear Mr. Middaugh: Chris Keegan, Bay Drive Villas, LLC's representative and I look forward to meeting with you this Wednesday, June 10, 2009, at 11:00 a.m., in the City Manager's office. Pursuant to our discussion, I am enclosing herewith a letter I received from Chris Keegan, dated May 14, 2009, relative to the extenuating circumstances surrounding the existing violations and acquisition of the subject properties by my client. I am also enclosing a summary of the liens my assistant, Dinorah, found when reviewing title to the properties. I have been advised by my client that they have corrected all the alleged violations, and that the properties are in full compliance. They have also spent considerable sums renovating the properties and are in the process of completing their renovation of 946-948 and 950, so that said buildings can be re-occupied. Mr. Robert Middaugh June 8, 2009 Page 2 of 2 Please call me should you need any additional information between now and our meeting on June 10, 2009. yours, ASSOCIATES, P.A. l~nberg, PBS/dc Enc. cc: Chris Keegan BAY DRIVE VILLAS LLC 888 Veterans Memorial Highway Sufte 430 Hauppauge, New York 11788 (631) 356-3333 Fax (63i) 366-349X City Manager's Office City of Mianu Beach c!o Paul Steinberg Steinberg & Associates The Senator Law Center ?67 Arthur Godfrey Road Miami Beach, Florida 33240 RE: LETTER aF EXTENUATING CIItGUIvISTANCES FUR 946/948, 950, 960 BAY DRIVE VIOLATIaI*TS Dear Sirs: May 14, 009 946/948, 950, and 960 Bay Drive buildings were purchased in Apri12005. At that time there were an excess of $100,400 of violations firm the prior owner. Monies were escrowed from the closing and the fines were mitigated and resolved for $4,200 on March 10, 2006 by prior owners. The purchaser's Say DriveVillas'intent was to renovate the buildings and convert them into condominiums for sale. 2005 was a tumultuous year as the summer and fall each had a hurricane (Katrina 8105 and Wilma 10/OS). The work associated with protection and repairs, from these, preoccupied manager's attention. After recovering from the second storm, the initial phase of renovation permits was started. No violations were received by the new owners. And it only became apparent moth later that the violations that occurred during the 2006 year were being sent to the prior owners in Coral Gables. By the time we were notified of any problems, it was the summer of 2007 for building 950 and early fall for buildings 946/948 and 960. At that time we immediately requested fines to stop (as reflected in Special Master Synopsis). The issue that brought the new owner's attention to violations was a marine violation of January 20, 200b, which was addressed to prior owner (copy attached), we will return to this later. The permitting processing for trade by trade renovation had been time consuming and fivstrating. In the fall of 2005, the manager was informed that we would need to file for ~ ~ d Xki.~ 13C213Sd'l dH Wd00 = T BOOZ b i ~eW Master Permits for all three structures. At this time, Les Beilinson, Architect and Emilio Castro PE were working on plans, but were rushed to completion, On the Ss' of December 2006, a letter was sent to the city from EC Associates, Emilio Castro accompanied by plans and permit applications. These applications were to acquire the Master Plans, the letter was also copied to Code Enforcement to have that department aware of impending renovations and that the structures 946!948 and 950 had been vacated. Both Mr. Castro and Iv1r. Beilinson had stated that the vacating of the buildings would stop any further problems with violations. By way of past history and professional advice the manager at that time, believed that these violations would be mitigated upon issuance of permits and or completion of structural work i.e. compliance. Mr. Esposito, the manager at this time, continued to attend Special Master Hearings. His focus with the Special Master revolved around the marine violation which had reached him quite by chance. Permits were acquired. for this special work, work started and completed. During this time, Mr. Esposito was made aware of other problems but the discussions revolved around the acquisition of permits for 950 and 460 and the progress of the work in 946/948. In keeping with the Special Master meetings, the marine violation was brought into compliance by August 20, 2008. The fines had run to over $100,000 which is an indication of the lack of clarity that Mr. Esposito had for the process. These fines were mitigated by the Special Master for roughly $7,000 and paid in a timely manner, before year's end. On December 1~` 2008, Mr. Esposito was relieved of his responsibility for the work related to these affairs, and a new manager put in place. The new manager engaged Code Compliance, R Thomas, immediately and by January 22~ building 960 was in compliance and February 22na the balance of the structures were in compliance. It is evident that the prior manager did not receive notification and did not clearly understand the process. The improper notification is understandable, as the prior owners were in contact with the Special Master well into 2006 and the tumult of 2005 at the city may have created a loss of proper notification forms. In addition, the professionals advising him and his meetings with the Special Master did not make him understand that compliance for the buildings was necessary under any circumstance. None of the violations were of a serious nature as evidenced by speed with which the problems were solved. They were clearly items that would have been resolved as construction completed. Bringing us up to the current moment, the 960 building has been sold at a serious loss. This became an unfortunate necessity as the owners needed capital to complete the work on the 946/948 and 950 buildings. The owners have gone "out of pocket" for millions of ._ _ __ .....E , d Xd~ 13C213Sd7 dH WdOD = I 60DZ 'b T ~eW dollars to reach this point. In the current market there is no construction financing available, even for owners' without mortgages. Currently, we are 95% complete with renovation of 946/948 and 60% complete with the 950 building. If these fines can be mitigated promptly, we will be able to complete these projects very quickly and provide a remarkable improvement to the neighborhood. ~an I~ ~' ~ d Xkid 13C213Sd1 dH Wd00 = i 600Z ~ T ~eW