2010-27348 ResoRESOLUTION NO. 2010-27348
A RESOLUTION OF THE MAYOR AND THE CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, APPROVING AND
AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE
AMENDMENT NO. 1 TO THE NEIGHBORHOOD STABILIZATION
PROGRAM 1 (NSP1) AGREEMENT, DATED JANUARY 27, 2010,
BETWEEN THE CITY AND MIAMI BEACH COMMUNITY
DEVELOPMENT CORPORATION (MBCDC); SAID AMENDMENT
APPROVING A ONE TIME ONLY ASSIGNMENT IN THE OWNERSHIP
OF THE MADELEINE APARTMENTS, LOCATED AT 7871-7861
CRESPI BOULEVARD, FROM MBCDC TO MBCDC: MADELEINE
VILLAGE, LLC, A LIMITED LIABILITY CORPORATION WHOSE SOLE
MEMBER (AGENT) IS MBCDC (THE PROPERTY, ACQUISITION AND
REHABILITATION OF WHICH PROPERTY IS FUNDED BY NSP1
FUNDS UNDER THE AFORESTATED AGREEMENT, IN THE AMOUNT
OF $2,376,181.53); FURTHER APPROVING AND AUTHORIZING THE
CITY MANAGER AND CITY CLERK TO AMEND THE MORTGAGE AND
SECURITY AGREEMENT TO REFLECT THE AFORESTATED
TRANSFER; AN INCREASE IN THE AFFORDABILITY PERIOD FROM
FIFTEEN (15) TO THIRTY (30) YEARS; AND FURTHER ADDING A
REVERTER CLAUSE IN FAVOR OF THE CITY, (TO ENSURE THAT
THE PROPERTY REMAINS AS AFFORDABLE HOUSING DURING THE
AFFORDABILITY PERIOD, OR TITLE REVERTS TO THE CITY);
AUTHORIZING THE ADMINISTRATION AND CITY ATTORNEY'S
OFFICE TO PREPARE THE AFORESTATED NSP1 AMENDMENT AND
MODIFICATIONS TO THE MORTGAGE (AND ANY OTHER LOAN
DOCUMENTS), IN ACCORDANCE WITH THE AFORESTATED TERMS.
WHEREAS, on July 31, 2008, the United States Congress enacted the Housing and
Economic Recovery Act of 2008, thereby creating the Neighborhood Stabilization Program
1 (NSP1), which directed the Department of Housing and Urban Development (HUD) to
allocate $3.93 billion to states and units of local government as emergency assistance for
the purchase and redevelopment of abandoned and foreclosed homes; and
WHEREAS, the State of Florida received an NSP allocation of $91,141,478 to
provide funding to those units of local government, including the City of Miami Beach,
which received $2,549,551.00 in NSP funds; and
WHEREAS, on March 18, 2009, the City Commission approved Resolution No.
2009-27039, approving the City's planned use of and related application for the NSP funds,
allocating $2,376,181.53 to the Miami Beach Community Development Corporation
(MBCDC) to purchase and renovate the Madeleine Apartments, located at 7871-7861
Crespi Boulevard (the Property); and
WHEREAS, MBCDC entered into an NSP1 Agreementwith the City, dated January
27, 2010, in the amount of $2,376,181.53, to secure the funding allocation for the
acquisition and renovation of the Property; and
COMMISSION ITEM SUMMARY
Condensed Title:
A resolution of the Mayor and City Commission of the City of Miami Beach, Florida, approving and authorizing the Mayor
and City Clerk to execute Amendment No. 1 to the Neighborhood Stabilization Program 1 (NSP1) Agreement, dated
January 27, 2010, between the City and Miami Beach Community Development Corporation (MBCDC); said amendment
approving a one time only assignment in the ownership of the Madeleine Apartments, located at 7871-7861 Crespi
Boulevard from MBCDC to MBCDC: Madeleine Village, LLC, a limited liability corporation whose sole member (agent) is
MBCDC (the property, acquisition and rehabilitation of which property is funded by NSP1 funds under the aforestated
Agreement, in the amount of $2,376,181.53); further approving and authorizing the City Manager and City Clerk to amend
the mortgage and security agreement to reflect the aforestated transfer; an increase in the Affordability Period from ffteen
(15) years to thirty (30) years; and further adding a reverter clause in favor of the City; authorizing the Administration and
City Attorney's office to prepare the aforestated NSP1 amendment and modifications to the mortgage (and any other
Loan Documents), in accordance with the aforestated terms.
Ke Intended Outcome Su orted:
Increase access to workforce or affordable housing
e housing was a concern for 52.5% of those su
on the
Issue:
Shall the January 27, 2010, NSP1 Agreement with MBCDC be assigned to MBCDC Madeleine Village, LLC, a not for
profit ownership-entity created by MBCDC as successor in interests? Should the mortgage and any other Loan
Documents be amended to reflect an increase in the Affordability Period from fifteen (15) years to thirty (30) years, and
should a reverter clause be added assuring that if the property is not used as affordable housing during the Affordability
Period, ownershi will revert to the Ci
Item Summa /Recommendation:
On March 18, 2009, the City Commission approved Resolution 2009-27039, approving the City's planned use of and
related application for Neighborhood Stabilization Program 1 (NSP1) funds, in the amount of $2,549,551, to purchase and
rehabilitate, as necessary, one or more foreclosed or abandoned multi-family buildings in the City of Miami Beach. The
NSP1 application included an allocation of $2,376,181.53 to the Miami Beach Community Development Corporation
(MBCDC) to purchase and renovate the Madeleine Apartments; MBCDC entered into an NSP1 Agreement with the City,
on January 27, 2010, in the amount of $2,376,181.53 to secure the funding allocation.
On January 29, 2010, the Madeleine Apartments, located at 7871 -7861 Crespi Boulevard, was purchased by MBCDC to
provide 16 units of affordable housing to very low income persons. As is customary for every development project by
MBCDC, and similarly typical for many affordable housing projects, a separate ownership entity is created. In the case of
The Madeleine Apartments, MBCDC Madeleine Village, LLC, a Florida not-for-profit limited liability company, whose sole
member (agent) is MBCDC, was created to own the property. However, as funding allocations were awarded to MBCDC,
a not for profit Florida corporation, prior to the acquisition and creation of the LLC, an assignment of the January 27, 2010,
NSP1 Agreement from MBCDC, to MBCDC Madeleine Village, LLC, is necessary to ensure the City is contracting directly
with the legal owner of the property in question. Furthermore, subsequent to the closing, MBCDC and the Administration
agreed to extend the Affordability Period from 15 years to 30 years and to add a reverter clause to ensure the property
remains as affordable housing during the Affordability Period. it is recommended that the Commission approve the
resolution.
Adviso Board Recommendation:
N/A
Financial Information:
Source of Amount Account
Funds: 1 N/A
3
OBPI Total
Financial Impact Summary:
Clerk's Office Legislative
Sian-Offs:
Department Director As stant_ity Manager City Manager
AP JMG
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E M I ANI I B ESC H AGENDA IT C 7
~~ DATE .3 /D l!7
m MIAMIBEACH
City of Miomi Beath, 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: March 10, 2010
SUBJECT: A RESOLUTION OF THE MAYOR AND THE CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING AND AUTHORIZING THE MAYOR AND CITY
CLERK TO EXECUTE AMENDMENT NO. 1 TO THE NEIGHBORHOOD
STABILIZATION PROGRAM 1 (NSP1) AGREEMENT, DATED JANUARY 27, 2010,
BETWEEN THE CITY AND MIAMI BEACH COMMUNITY DEVELOPMENT
CORPORATION (MBCDC); SAID AMENDMENT APPROVING A ONE TIME ONLY
ASSIGNMENT IN THE OWNERSHIP OF THE MADELEINE APARTMENTS, LOCATED
AT 7871-7861 CRESPI BOULEVARD FROM MBCDC TO MBCDC: MADELEINE
VILLAGE, LLC, A LIMITED LIABILITY CORPORATION WHOSE SOLE MEMBER
(AGENT) IS MBCDC (THE PROPERTY, ACQUISITION AND REHABILITATION OF
WHICH PROPERTY IS FUNDED BY NSP1 FUNDS UNDER THE AFORESTATED
AGREEMENT, IN THE AMOUNT OF $2,376,181.53); FURTHER APPROVING AND
AUTHORIZING THE CITY MANAGER AND CITY CLERK TO AMEND THE MORTGAGE
AND SECURITY AGREEMENT TO REFLECT THE AFORESTATED TRANSFER; AN
INCREASE IN THE AFFORDABILITY PERIOD FROM FIFTEEN (15) YEARS TO
THIRTY (30) YEARS; AND FURTHER ADDING A REVERTER CLAUSE IN FAVOR OF
THE CITY, (TO ENSURE THAT THE PROPERTY REMAINS AS AFFORDABLE
HOUSING DURING THE AFFORDABILITY PERIOD OR TITLE REVERTS TO THE
CITY); AUTHORIZING THE ADMINISTRATION AND CITY ATTORNEY'S OFFICE TO
PREPARE THE AFORESTATED NSP1 AMENDMENT AND MODIFICATIONS TO THE
MORTGAGE (AND ANY OTHER LOAN DOCUMENTS), IN ACCORDANCE WITH THE
AFORESTATED TERMS.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
BACKGROUND
On March 18, 2009 the City Commission approved Resolution 2009-27039 approving The City's
application for Neighborhood Stabilization Program 1 (NSP1) funds, in the amount of $2,549,551, to
purchase and rehabilitate, as necessary, one or more foreclosed or abandoned multi-family
buildings in the City of Miami Beach (as determined by the City's greatest need). These buildings,
once acquired are to be made available as rental properties for income qualified households in
accordance with NSP1 rules, as promulgated by the Florida Department of Community Affairs and
the United Stated Department Housing and Urban Development.
MBCDC/Made/eine Apartments Assignment
March 10, 2010
Page 2
Following a competitive process, on September 9, 2009, the City Commission approved the
selection of MBCDC as the project sponsor to acquire, rehabilitate, and rent a 16-unit building at
7871 Crespi Boulevard, Miami Beach, for income-eligible persons. A contract for NSP1 funding was
executed between the City and the State of Florida's Department of Community Affairs on
September 30, 2009; a contract to allocate the funding forthe eligible projectwas executed between
the City and MBCDC on January 27, 2010.
MBCDC closed the acquisition transaction on January 29, 2010. As is customary for every project
MBCDC develops, and similarly typical for many affordable housing projects, a separate ownership
entity was created. In the case of The Madeleine Apartments, MBCDC Madeleine Village, LLC, a
Florida not-for-profit limited liability company, was created to own the property. However, as funding
allocations had been awarded to MBCDC, (which is the sole member of MBCDC Madeleine Village,
LLC), an assignment of the January 27, 2010, NSP1 Agreement from MBCDC, Inc. to MBCDC
Madeleine Village, LLC, is necessary.
Furthermore, following the closing, MBCDC and the Administration agreed to extend the Affordability
Period from fifteen (15) years (as required by the State of Florida) to thirty (30) years, and to add a
reverter clause ensuring that, if the property is not kept as affordable housing during the Affordability
Period, title will revert to the City of Miami Beach.
ANALYSIS
A one-time assignment of the January 27, 2010 Agreement from MBCDC to MBCDC Madeleine
Village, LLC, as well as amendments to the NSP1 Agreement and Mortgage (and other Loan
Documents), are necessary in order to ensure the City is contracting directly with the legal owner of
the property in question. Furthermore, while the State NSP1 rule requires a minimum affordability
period of fifteen (15) years, the City and MBCDC have agreed to extend the affordability period to
thirty (30) years. Therefore, the extension of the Affordability Period will also be memorialized in the
Mortgage and other Loan Documents, and a provision will be added to the documents so that
ownership of the property will revert to the City in the event the property is not used as affordable
housing during the Affordability Period.
CONCLUSION
The Administration recommends that the Mayor and City Commission of the City of Miami Beach,
Florida, approve and authorize the Mayor and City Clerk to execute Amendment No. 1 to the
Neighborhood Stabilization Program 1 (NSP1) Agreement, dated January 27, 2010, between the
City and Miami Beach Community Development Corporation (MBCDC), allowing aone-time-only
assignment in the ownership of the Madeleine Apartments, located at 7871-7861 Crespi Boulevard
from MBCDC to MBCDC: Madeleine Village, LLC, a limited liability corporation whose sole member
(agent) is MBCDC. It is also recommended that the Commission approve and authorize an
amendment to increase the Affordability Period from fifteen (15) years to thirty (30) years, and
adding a reverter clause in favor of the City, to ensure that the property remains as affordable
housing during the Affordability Period.
JMG/HMF/AP/rs
T:WGENDA\2010\March 10\Consent\Madeleine Assignment Memo.doc
WHEREAS, MBCDC has subsequently created anot-for-profit entity, MBCDC
Madeleine Village, LLC, which, as the intended owner of the Property, is the successor in
interest to MBCDC (and has assumed all interest and title to the Property); and
WHEREAS, MBCDC is the sole member (agent) of MBCDC Madeleine Village, LLC;
and
WHEREAS, accordingly, the Administration hereby recommends that the City
Commission approve and authorize the Administration and the City Attorney's Office to
prepare, respectively, an amendment to the existing NSP1 Agreement with MBCDC, as
well as the Mortgage and Security Agreement (and other Loan Documents as required)
relative to the acquisition and renovation of the Property, providing for the following:
1. an assignment of the January 27, 2010 NSP1 Agreement from MBCDC
to MBCDC Madeleine Village, LLC;
2. changing the Affordability Period from fifteen (15), to thirty (30) years;
and
3. including a reverter clause ensuring that the Property remain as
affordable housing during the Affordability Period, or ownership reverts
to the City.
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 Mayor and City Clerk to execute
Amendment No. 1 to the Neighborhood Stabilization Program 1 (NSP1) Agreement, dated
January 27, 2010, between the City and Miami Beach Community Development
Corporation (MBCDC); said amendment approving a one time only assignment in the
ownership of the Madeleine Apartments, located at 7871-7861 Crespi Boulevard, from
MBCDC to MBCDC: Madeleine Village, LLC, a limited liability corporation whose sole
member (agent) is MBCDC (the property, acquisition, and rehabilitation of which Property
is funded by NSP1 funds under the aforestated Agreement, in the amount of
$2,376,181.53); further approving and authorizing the City Manager and City Clerk to
amend the Mortgage and Security Agreement to reflect the aforestated transfer; an
increase the Affordability Period from fifteen (15) to thirty (30) years; and further adding a
reverter clause in favor of the City, (to ensure that the Property remains as affordable
housing during the Affordability Period or title reverts to the City); authorizing the
Administration and the City's Attorney's Office to prepare the aforestated NSP1
Amendment and modifications to the Mortgage (and any other Loan Documents), in
accordance with the aforestated terms.
PASSED AND ADOPTED THIS (~~ DAY OF ~~rc~ , 2010.
ATTEST:
CITY CLERK
T:\AGENDA\2010Vularch 10lConsent\Madeleine Assignment - RESO.doc
ROVED TO
GE
O R OR EXECUTION
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