2014-28617 Reso 2014-28617
RESOLUTION NO.
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING AND AUTHORIZING THE CITY
MANAGER TO NEGOTIATE AND EXECUTE, ON BEHALF OF THE CITY,
PURCHASE AND SALE AGREEMENTS AND OTHER CLOSING
DOCUMENTS, IN CONNECTION WITH THE PURCHASE OF FORECLOSED
AND/OR DISTRESSED PROPERTIES, IN ACCORDANCE WITH RULES AS
PROMULGATED BY , THE CITY'S NEIGHBORHOOD STABILIZATION
PROGRAM 1 (NSP1) GRANT AGREEMENT (NSP1 FUNDS) WITH THE
STATE OF FLORIDA DEPARTMENT OF ECONOMIC OPPORTUNITY (DEO
AGREEMENT) AND THE U.S. DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT (HUD) (COLLECTIVELY NSP1 GUIDELINES); BY UTILIZING
THE REMAINING NSP1 ADMINISTRATIVE FUNDS, IN THE AMOUNT OF
$201,801.66; AUTHORIZING THE CITY MANAGER TO EXECUTE ANY
OTHER AGREEMENTS FOR REHABILITATION SERVICES IN
ACCORDANCE WITH NSPI GUIDELINES; AND FURTHER AUTHORIZING
THE CITY MANAGER TO EXTEND THE DEO AGREEMENT (AS DEFINED
HEREIN) SHOULD THE CITY NOT HAVE EXPENDED THE NSP1
ADMINISTRATIVE FUNDS BY AUGUST 15, 2014.
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 Department of Economic Opportunity (DEO) is the
entity managing the NSP1 allocation to the City of Miami Beach; and
WHEREAS, on March 18, 2009, the City approved Resolution No. 2009-27039,
approving the City's planned use of and application of NSP1 funds to purchase and rehabilitate
one or more foreclosed or abandoned multi-family buildings to be made available as rental
housing properties for income-qualified households; and
WHEREAS the City was awarded a total of$9,305,268 in NSP1 funds through an initial
allocation (plus two subsequent allocations); and
WHEREAS, the Administration conducted a duly-noticed procurement process for award
of the first allocation, resulting in the City Commission's approval on September 9, 2009, of
Resolution No. 2009-27194, which authorized the City to enter into an agreement with Miami
Beach Community Development Corporation to carry out the City's planned use of, and
application for, NSP1 funds ("MBCDC Agreement"); and
WHEREAS, the initial strategy was to fund the acquisition and rehabilitation of one
affordable housing project, which resulted in MBCDC's acquisition of the 16-unit foreclosed
building, located at 7871 Crespi Boulevard, which was later named The Madeleine, and
WHEREAS, on February 3, 2010, the MBCDC Agreement was amended per Resolution
No. 2010-27335, to allow for the allocation of additional NSP1 funds received by the City, in the
amount of$4,755,717; and
WHEREAS, the additional acquisition and rehabilitation funds resulting from the second
and third allocations were authorized for MBCDC's acquisition and rehabilitation of The
Neptune, a 35-unit foreclosed apartment building located at 1632 Meridian Avenue, and The
Lottie, a nine-unit foreclosed apartment building which contains large apartments and is suitable
for families, located at 530 75 Street; and
WHEREAS, on May 12, 2010, the City Commission approved Resolution No. 2010-
27390, authorizing the reallocation -of NSP1 funds, in the amount of $246,898.53, from The .
Madeleine to The Neptune; utilizing the second NSP1 allocation, in the amount of
$4,432,328.24; utilizing FY2009/10 US HUD HOME funds, in the amount of $650,000; and
subordinating the City's first lien position for The Neptune to private bank financing acquired by
MBCDC, in the amount of$700.000; and
WHEREAS, the City was allowed to use a maximum of 6.8%, or $632,758, of the total
NSP1 allocation for administrative funds (Administrative Funds); and
WHEREAS, as of September 30, 2012, the remaining balance of Administrative Funds
was $300,953.95, and the City's NSP1 grant agreements with the DEO ( DEO Agreement) and
MBCDC Agreement were set to expire on November 23, 2012; and
WHEREAS, the DEO requested that City again extend the DEO Agreement and the
MBCDC Agreement through February 15, 2013, in order to rent all 60 units for The Madeleine,
The Neptune and The Lottie and meet the National Objective as established by HUD; and
WHEREAS, the DEO requested the City again extend the DEO Agreement and the
MBCDC Agreement for an additional six (6) months, in order to occupy all units, close out the
NSP1 grant, and resolve the pending issue of the City's unspent Administrative Funds; and
WHEREAS, pursuant to Resolution No. 2013-28139, the DEO Agreement and the
MBCDC Agreement were extended through August 15, 2013; and
WHEREAS, as of April 1, 2013, The Madeleine, The Neptune, and The Lottie were fully
leased and the HUD National Objective was met; and
WHEREAS, the DEO requested that the DEO Agreement be extended six (6) months,
from February 15, 2014 through August 15, 2014, in order to close out the NSP1 grant, and
provide an opportunity for the City to find eligible NSP1 activities to enable the expenditure of
unspent Administrative Funds; and
WHEREAS, the current balance of unspent Administrative Funds is approximately
$201,801.66; and
WHEREAS, the City anticipates that these purchases will be for individual units, in lieu
of multi-family buildings; and
WHEREAS, in order to identify NSP1 eligible activities and fully draw the Administrative
Funds, the Administration intends to reprogram the remaining $201,801.66 in NSP1 funds to
purchase and rehabilitate, as necessary, foreclosed or abandoned properties for the use of
rental housing unit(s)for low to moderate income persons until all funds are fully expended; and
WHEREAS, in the event that the City is unable to expend the Administrative Funds by
the August 15, 2014 DEO Agreement deadline, then the Administration recommends that the
g 9
Mayor and City Commission authorize the City Manager to negotiate and execute a further
extension to such Agreement.
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
authorize the City Manager to negotiate and execute, on behalf of the City, Purchase and Sale
i
Agreements and other closing documents, in connection with the purchase of foreclosed and/or
distressed properties, in accordance with rules promulgated by the City's Neighborhood
Stabilization Program 1 (NSP1) Grant Agreement (NSP1 Funds) with the State of Florida
Department of Economic Opportunity (DEO Agreement) and the U.S. Department of Housing
and Urban Development (HUD) (collectively NSP1 Guidelines), by utilizing the remaining NSP1
Administrative Funds, in the amount of $201,801.66; authorize the City Manager to execute any
other agreements for rehabilitation services in accordance with NSP1 Guidelines; and further
authorize the City Manager to extend the DEO Agreement (as defined herein) should the City
not have expended the NSP1 Administrative Funds by August 15, 2014.
PASSED AND ADOPTED this day ofG1I�� , 2014.
ATTEST:
7/7 i
CITY CLERK AY'
. °
•;.� APPROVED AS TO
FORM & LANGUAGE
�N�aRP o &FOR EXECUTION
• RA TED:
/7
' ,� 0� " City Attorney T Dote
7,4
COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution of the Mayor and City Commission of the City of Miami Beach, Florida, approving and authorizing the City
Manager to negotiate and execute, on behalf of the City, Purchase and Sale Agreements and other closing documents, in
connection with the purchase of foreclosed and/or distressed properties, in accordance with rules promulgated by the City's
Neighborhood Stabilization Program 1 (NSP1) Grant Agreement (NSP1 Funds) with the State of Florida Department of
Economic Opportunity(DEO Agreement) and the U.S. Department of Housing and Urban Development (HUD) (collectively
NSP1 Guidelines), by utilizing the remaining NSP1 Administrative Funds, in the amount of$201,801.66.
Key Intended Outcome Supported:
Increase access to workforce or affordable housing.
Supporting Data (Surveys, Environmental Scan, etc.): Based on the Strategic Plan 2012 Update, the number of
affordable housing units is 4,796.
Item Summary/Recommendation:
The U.S. Housing and Economic Recovery Act of 2008 created the Neighborhood Stabilization Program (NSP1), which
directed 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. The City applied for NSP1 funds for the purchase and
rehabilitation of one or more multi-family buildings to be kept as rental properties to benefit income-qualified households in
accordance with the NSP1 regulations and was awarded a total of $9,305,268 through an initial allocation plus two
subsequent reallocations. The State of Florida Department of Economic Opportunity (DEO) is the pass-through entity
handling HUD's NSP1 allocation to the City. The initial allocation to the City in the amount of $2,549,441 was formula-
based. The second and third allocations in the amounts of$4,755,717 and $2,000,000, respectively, were awarded to the
City after the original recipients, Apopka and Clearwater, failed to meet the program's benchmarks. The City consistently
demonstrated above-average performance.
The City entered into a grant agreement with the State, and after conducting a procurement process for award of the first
allocation, entered into a related agreement with Miami Beach Community Development Corporation (MBCDC). Both
Agreements were subsequently amended to accept and govern the second and third allocations of funding for a total of
$9,305,268. With these funds, three foreclosed buildings were acquired by MBCDC pursuant to the NSP1 guidelines and
are all now complete and fully leased. They are: The Madeleine, a 16-unit building located at 7871 Crespi Blvd., received a
Certificate of Occupancy (CO) on October 11, 2012; The Neptune, a 35-unit building located at 1632 Meridian Avenue,
received a CO on November 15, 2012; and The Lottie a nine-unit building located at 530 75 Street, received a CO on April
24, 2013.
From each of the allocations, the City was allowed to use a maximum of 6.8% ($632,758)for administrative expenses.The
City has an approximate balance of$201,801.66 in unspent administrative funds.The City is in the process of identifying
additional eligible properties that can be purchased with NSP1 funds. The City anticipates that these purchases will be for
individual units in lieu of multi-family buildings.The City intends to utilize the remaining$201,801.66 in NSP1 funds to
purchase and rehabilitate, as necessary, eligible foreclosed or abandoned properties creating affordable rental housing
unit(s)for low to moderate income persons until all funds are fully expended.
Advisory Board Recommendation:
N/A
Financial Information:
Source of Funds: Amount Account Approved
1 $201,801.66 138-5668-XXXXXX
NSP1 2
OBPI Total
City Clerk's Office Legislative Tracking:
Maria L. Ruiz ext. 6491
Sign-Offs:
Department Director 61gistant City Manager City Manager
MLR B JLM
T:\AGENDA\2014\NSP1 CommissionitemSummary
AGENDA ITEM C I F
IRWF E��MIAMI DATE
MIAM.1 B
City®f Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139,
www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Philip Levine and Member of the City ommission
FROM: Jimmy L. Morales, City Manager
DATE: June 11, 2014
SUBJECT: A RESOLUTION OF THE MAY AND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, APPROVIN AND AUTHORIZING THE CITY MANAGER TO
NEGOTIATE AND EXECUTE ON BEHALF OF THE CITY, PURCHASE AND SALE
AGREEMENTS AND OTHER CLOSING DOCUMENTS, IN CONNECTION WITH THE
PURCHASE OF FORECLOSED AND/OR DISTRESSED PROPERTIES, IN
ACCORDANCE WITH RULES AS PROMULGATED BY THE CITY'S
NEIGHBORHOOD STABILIZATION PROGRAM 1 (NSP1) GRANT AGREEMENT
(NSP1 FUNDS) WITH THE STATE OF FLORIDA DEPARTMENT OF ECONOMIC
OPPORTUNITY (DEO AGREEMENT) AND THE U.S. DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT (HUD) (COLLECTIVELY NSP1 GUIDELINES); BY
UTILIZING THE REMAINING NSP1 ADMINISTRATIVE FUNDS, IN THE AMOUNT OF
$201,801.66; AUTHORIZING THE CITY MANAGER TO EXECUTE ANY OTHER
AGREEMENTS FOR REHABILITATION SERVICES IN ACCORDANCE WITH NSPI
GUIDELINES; AND FURTHER AUTHORIZING THE CITY MANAGER TO EXTEND
THE DEO AGREEMENT (AS DEFINED HEREIN) SHOULD THE CITY NOT HAVE
EXPENDED THE NSP1 ADMINISTRATIVE FUNDS BY AUGUST 15, 2014.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
BACKGROUND
On July 31, 2008, the United States Congress enacted the Housing and Economic Recovery Act of 2008,
thereby creating the Neighborhood Stabilization Program (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.
Resolution No. 2009-27039 was adopted by the City Commission on March 18, 2009, approving the City's
application for and planned use of NSP1 funds for the purchase and rehabilitation of one or more multi-
family buildings to be kept as rental properties to benefit income-qualified households, in accordance with
the NSP1 regulations, and it's goal of stabilizing neighborhoods impacted by foreclosures.
The City was awarded a total of$9,305,268 in NSP1 funds through an initial allocation plus two subsequent
reallocations. The State's Department of Community Affairs (DCA), now known as the Department of
Economic Opportunity(DEO), is the pass-through entity handling HUD's NSP1 funds. The initial allocation
to the City in the amount of $2,549,441 was formula-based. The second and third allocations in the
amounts of$4,755,717 and $2,000,000, respectively, were awarded to the City after the original recipients,
Apopka and Clearwater, failed to meet the program's benchmarks. Conversely, the City consistently
demonstrated above-average performance.
On September 9, 2009, the City approved Resolution No. 2009-27175 authorizing the execution of the
Federally-funded Subgrant Agreement with DCA("State Agreement")for the amount of$2,549,551.
After the Administration conducted a duly-noticed procurement process for award of the first allocation, the
Mayor and City Commission approved Resolution No. 2009-27194 on September 9, 2009 authorizing the
execution of an Agreement with Miami Beach Community Development Corporation (MBCDC)to carry out
the City's planned use of, and application for, NSP1 funds ("MBCDC Agreement"). The initial strategy was
to fund the acquisition and rehabilitation of one affordable housing project. MBCDC identified the 16-unit
building located at 7871 Crespi Boulevard, which was later named The Madeleine.
The State Agreement for the first allocation was subsequently amended to include the two additional
allocations in the amounts of $4,755,717 and $2,000,000, which were awarded on March 24, 2010, and
July 30, 2010, respectively. The MBCDC Agreement was amended per Resolution No. 2010-27335, to
allow for the allocation of additional NSP1 funds received by the City. The additional acquisition and
rehabilitation funds resulting from the second and third allocations enabled the acquisition and rehabilitation
of The Neptune, a 35-unit foreclosed apartment building located at 1632 Meridian Avenue; and The Lottie,
a nine-unit foreclosed apartment building which contains large apartments suitable for families, located at
530 75 Street.
ANALYSIS
From each of the allocations, totaling $9,305,268, the City was allowed to use a maximum of 6.8%
($632,758) for administrative expenses. As of today, the City has an approximate balance of$201,801.66
in unspent administrative funds.
On January 15, 2014 the City approved Resolution No.2014-28463 approving and authorizing the Mayor
and City Clerk to execute Amendment No.7 modifying the expiration date of the Subgrant agreement
between the DEO and the City from February 15, 2014 to August 15, 2014. The extension provided staff
the opportunity to find a suitable NSP1 eligible project or activity for the remaining unspent balance of
administrative funds.
The City is in the process of identifying additional eligible properties that can be purchased with NSP1
funds. The City anticipates that these purchases will be for individual units in lieu of multi-family buildings.
The City intends to reprogram the remaining$201,801.66 in NSP1 funds to purchase and rehabilitate, as
necessary,foreclosed or abandoned properties for the use of rental housing unit(s)for low to moderate
income persons until all funds are fully expended.
CONCLUSION
The Administration recommends that the Mayor and City Commission hereby authorize the City Manager
to negotiate and execute, on behalf of the City, Purchase and Sale Agreements and other closing
documents, in connection with the purchase of foreclosed and/or distressed properties, in accordance with
rules promulgated by the City's Neighborhood Stabilization Program 1 (NSP1) Grant Agreement (NSP1
Funds) with the State of Florida Department of Economic Opportunity (DEO Agreement) and the U.S.
Department of Housing and Urban Development (HUD) (collectively NSP1 Guidelines), by utilizing the
remaining NSP1 Administrative Funds, in the amount of.$201,801.66; authorize the City Manager to
execute any other agreements for rehabilitation services in accordance with NSP1 Guidelines; and further
authorize the City Manager to extend the DEO Agreement (as defined herein) should the City not have
expended the NSP1 Administrative Funds by August 15, 2014.
JLM/K B/MLR/ARB