2014-28756 Reso RESOLUTION NO. 2014-28756
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, RATIFYING AND APPROVING A LETTER OF
INTENT (LOI) WITH MIAMI BEACH COMMUNITY DEVELOPMENT
CORPORATION (MBCDC) FOR THE CITY'S PROPOSED PURCHASE OF
THE FOLLOWING PROPERTIES ALLEN APARTMENTS: BARCLAY PLAZA
APARTMENTS; LOTTIE APARTMENTS; MADELEINE VILLAGE
APARTMENTS; AND NEPTUNE APARTMENTS (THE "MBCDC
PROPERTIES"); FURTHER AUTHORIZING THE CITY MANAGER TO
NEGOTIATE AND, IF SUCCESSFUL, EXECUTE PURCHASE AND SALE
AGREEMENTS FOR THE MBCDC PROPERTIES; AUTHORIZING THE CITY
MANAGER TO EXECUTE ANY AND ALL CLOSING DOCUMENTS, AS
REQUIRED FOR THE CITY'S PURCHASE OF THE MBCDC PROPERTIES;
AND FURTHER AUTHORIZING THE CITY MANAGER TO SUBMIT A
BUDGET MODIFICATION TO THE STATE OF FLORIDA DEPARTMENT OF
ECONOMIC OPPORTUNITY FOR THE BALANCE OF THE CITY'S
NEIGHBORHOOD STABILIZATION PROGRAM (NSP1) FUNDS TO HELP
FUND THE ACQUISITION OF THE MBCDC PROPERTIES AND CREATE AN
OPERATING RESERVE FOR THE LOTTIE APARTMENTS, MADELEINE
VILLAGE APARTMENTS AND NEPTUNE APARTMENTS, AS WELL AS
AUTHORIZING THE USE OF COMMUNITY DEVELOPMENT BLOCK
GRANT (CDBG) FUNDS TO ALSO HELP FUND THE PURCHASE OF SAID
PROPERTIES.
WHEREAS, the City is an entitlement community for a variety of funds from the
Unites States Department of Housing and Urban Development and the Florida
Department of Economic Opportunity for the creation and retention of affordable
housing; and
WHEREAS, Miami Beach Community Development Corporation (MBCDC)
received funds from the City for the acquisition and rehabilitation of five (5) affordable
housing projects: Allen Apartments; Barclay Plaza Apartments; Lottie Apartments;
Madeleine Village Apartments; and Neptune Apartments (the MBCDC Properties); and
WHEREAS, a review of MBCDC projects and operations has revealed a variety
of operational and compliance lapses which have jeopardized these projects and raised
concerns regarding MBCDC's operational capacity; and
WHEREAS, on September 9, 2014, the City Manager transmitted the attached
Letter of Intent (LOI) to MBCDC, to surrender title to the MBCDC Properties to the City;
and
WHEREAS, the LOI was approved by MBCDC's Board at its meeting on
September 8, 2014; and
WHEREAS, at its meeting on September 10, 2014, the Mayor and Commission
conceptually endorsed the terms set forth in the LOI; and
WHEREAS, in order to fund the closing costs associated with the acquisition of
these properties, the City intends to file a budget modification with the State of Florida's
Department of Economic Opportunity, to utilize $46,165 of the City's remaining
Neighborhood Stabilization Program (NSP1) funds for the closing costs associated with
the acquisition of the Lottie Apartments, Madeleine Village Apartments and Neptune
Apartments, as well as create an operating reserve for these buildings in the amount of
$155,636; and
WHEREAS, the City will also utilize $113,105 in uncommitted Community
Development Block Grant (CDBG) funds to fund the closing costs associated with the
acquisition of the Allen Apartments and Barclay Plaza Apartments.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission hereby ratify and approve a Letter Of Intent (LOI) with Miami Beach
Community Development Corporation (MBCDC) for the City's proposed purchase of the
following properties: Allen Apartments; Barclay Plaza Apartments; Lottie Apartments;
Madeleine Village Apartments; and Neptune Apartments (the "MBCDC Properties");
further authorizing the City Manager to negotiate and, if successful, execute Purchase
and Sale Agreements for the MBCDC Properties; authorizing the City Manager to
execute any and all closing documents, as required for the City's purchase of the
MBCDC Properties ; further authorizing the City Manager to submit a budget
modification to the State of Florida Department of Economic Opportunity for the balance
of the City's Neighborhood Stabilization Program (NSP1) funds to help fund the
acquisition of the MBCDC Properties and create an operating reserve for the Lottie
Apartments, Madeleine Village Apartments, and Neptune Apartments, as well as
authorizing the use of Community Development Block Grant (CDBG) funds to also help
fund the purchase of said properties.
PASSED and ADOPTED this /7 day of �Q®o lew�e--- , 2014.
ine
�P C)
ATTES
:INCORP +ORATED-
APPROVED AS TO
CITil CLERK ' ,. FORM & LANGUAGE
Rafael Granado C�- = & FOR EXECUTION
City Attorney Date
Raul Aguila
COMMISSION ITEM SUMMARY
Condensed Title:
Request For Approval To Authorize the City Manager or his designee to purchase and assume title of five (5)
properties owned by Miami Beach Community Development Corporation.
Key Intended Outcome Supported:
N/A
Supporting Data(Surveys, Environmental Scan, etc.): N/A
Issue:
Shall the City Commission authorize the acquisition?
Item Summa /Recommendation:
In May 2013, the City embarked on an extensive review of its U. S. Department of Housing and Urban Development
(HUD)funded projects and operations.This extensive review included the analysis of projects undertaken between 2008
and 2013 by Miami Beach Community Development Corporation(MBCDC),the City's largest HUD-funded beneficiary,
as well as the City's internal processes,operations and staff.
For the past year,the City has attempted to address various issues with MBCDC and was unable to make much
progress until this past August. Simultaneously, the Building Department was expressing concern that the Barclay
Plaza Apartments may need to be closed in order to address violations that had been ongoing since 2007. Such a
closure would trigger the invocation of the Universal Relocation Act(URA)because the building had received
federal funds for the repair of its elevator.The anticipated URA costs for the Barclay Plaza would be$900,000 for
the relocation of displaced tenants.This expense would bankrupt MBCDC and place the City's$36,422,153
investments in jeopardy. In short order, it was determined that MBCDC had grown too quickly and did not have the
capacity to properly operate its extensive housing portfolio.
City staff reached out to the MBCDC Board of Directors on September 8th and shared its findings. In addition,the
City offered a plan to address the agency's operational problems while securing the City's fiscal interests and the
wellbeing of the tenants housed by MBCDC.The City suggested that MBCDC surrender title to the following
properties:Allen Apartments, Barclay Plaza Apartments, Lottie Apartments, Madeleine Village Apartments,and
Neptune Apartments. On September 8, 2014,the MBCDC Board of Directors agreed to this sale.The acquisition
costs would be funded by the City's remaining Neighborhood Stabilization Program(NSP1)and Community
Development Block Grant(CDBG)funds. In addition, NSP1 funds will be used to establish an operating reserve
account for the following properties: Lottie Apartments, Madeleine Village Apartments, and Neptune Apartments.
In the longer term, the City anticipates potential funding from its Community Development Block Grant and HOME
Investment Partnership funds to address the rehabilitation/repairs needed at the Barclay Plaza Apartments.
RECOMMENDATION
The Administration recommends that the Mayor and City Commission authorize the Manager or his designee to
purchase and assume title of these properties.
Advisory Board Recommendation:
N/A
Financial Information:
Source of Amount Account
Funds: 1 $ 201,801 138.5668.000343/349(NSP1)
2 $113,105 Community Development Block Grant FY 2014/15 Funds
Total $314,906
Financial Impact Summary: No additional City funds will be required for this effort.
City Clerk's Office Legislative Tracking:
Maria L. Ruiz, Office of Housing&Community Services Department Director, Ext#6491
Si n-Offs:
Department Director Assistant CityWanager City M na er
MLR _ KGB JLM
TAAGENDA\2014\September\MBCDC Porperty Acqusition SummaN 1 09172014.doc
AGENDA.ITEM R7/
M C
�� DATE
MIAMI BEACH
City®f Miami Beath, 1700 Convention Center Drive,Miami Beach,Florida 33139,www.miamibeachfl.gov
COM LyCommission ON MEMORANDUM
TO: Mayor Philip Levine and Member of the
FROM: Jimmy L. Morales, City Manager
DATE: September 17, 2014
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, RATIFYING AND APPROVING A LETTER OF
INTENT (LOI) WITH MIAMI BEACH COMMUNITY DEVELOPMENT
CORPORATION(MBCDC)FOR THE CITY'S PROPOSED PURCHASE OF THE
FOLLOWING PROPERTIES ALLEN APARTMENTS: BARCLAY PLAZA
APARTMENTS; LOTTIE APARTMENTS;MADELEINE VILLAGE APARTMENTS;
AND NEPTUNE APARTMENTS (THE "MBCDC PROPERTIES"); FURTHER
AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND, IF SUCCESSFUL,
EXECUTE PURCHASE AND SALE AGREEMENTS FOR THE MBCDC
PROPERTIES; AUTHORIZING THE CITY MANAGER TO EXECUTE ANY AND
ALL CLOSING DOCUMENTS,AS REQUIRED FOR THE CITY'S PURCHASE OF
THE MBCDC PROPERTIES; AND FURTHER AUTHORIZING THE CITY
MANAGER TO SUBMIT A BUDGET MODIFICATION TO THE STATE OF
FLORIDA DEPARTMENT OF ECONOMIC OPPORTUNITY FOR THE BALANCE
OF THE CITY'S NEIGHBORHOOD STABILIZATION PROGRAM(NSP1)FUNDS
TO HELP FUND THE ACQUISITION OF THE MBCDC `PROPERTIES AND
CREATE AN OPERATING RESERVE FOR THE LOTTIE APARTMENTS,
MADELEINE VILLAGE APARTMENTS AND NEPTUNE APARTMENTS, AS
WELL AS AUTHORIZING THE USE OF COMMUNITY DEVELOPMENT BLOCK
GRANT (CDBG) FUNDS TO ALSO HELP FUND THE PURCHASE OF SAID
PROPERTIES.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
FUNDING
While the properties are being voluntarily surrendered to the City,the City is responsible for
closing costs. Closing costs are estimated at$159,270. These costs will be charged to the
following grant accounts: Neighborhood Stabilization Program (NSP1) and Community
Development Block Grant (CDBG).
ANALYSIS
In May 2013, the City embarked on an extensive review of its U. S. Department of Housing
and Urban Development (HUD) funded projects and operations. This extensive review
included the analysis of projects undertaken between 2008 and 2013 by Miami Beach
Community Development Corporation(MBCDC),the City's largest HUD-funded beneficiary,
as well as the City's internal processes, operations and staff.
September 17, 2014
City Commission Meeting
Page 2 of 4
The internal analysis uncovered significant compliance lapses including:
• Disbursement of HUD funds for ineligible expenses
• Processing of advance draws as regular reimbursement requests
• Failure to obtain evidence of expense incurrence
• Failure to retain adequate documentation for the release of federal funds
• Inadequate monitoring of HUD-funded projects
• Undeclared conflict of interest between a City employee and MBCDC
• Failure to require corrective action plan to audit findings (OMB Circular A-133).
As these lapses were being uncovered, City staff assigned to the Office of Real Estate,
Housing and Community Development resigned or was terminated. Internal processes were
reviewed and substantive operational changes were adopted:
• Contract workbooks were developed to ensure HUD-funded projects complied with
applicable rules and regulations.
• Funded sub-recipients were required to attend pre-contract workshops to ensure that
HUD rules, regulations and reporting requirements were understood and accepted
prior to the execution of funding awards.
• Contracts were revised to delineate specific reporting requirements including the
evidence of expenditure that would be required for reimbursement.
• Reporting and reimbursement schedules were specifically delineated to ensure that
expenditure timelines were honored.
• Reporting forms were created and disseminated to sub-recipients to standardize
reporting and facilitate the sub-recipients'obligation to report progress,expenditures
and compliance with HUD rules and regulations.
The internal review of MBCDC's contracts uncovered significant contractual lapses,
violations of HUD rules and regulations, and fiscal irregularities. These defaults included:
• Failure to comply with the Contract Work Hours and Safety Standards Act(40 USC
327)
• Failure to comply with Davis-Bacon Wage Act (42 USC 12836)
• Conflict of interest in procurement [24 CFR 85.36(b)(i) and (iv)]
• Payment of ineligible expenses incurred prior to contract execution(HUD Playing by
the Rules, Chapter 2-9)
• Failure to complete cost analysis prior to contract modifications [24 CFR 85.36(f)]
• Failure to adhere to tenant placement order from waiting list (§ 92.253)
• Failure to maintain internal control over federal programs (OMB Circular A-133)
• Provision of housing to ineligible persons (HUD Occupancy Handbook: Chapter 3)
• Failure to obtain prior written approval for budget revisions on a construction project
(24 CFR Part 85)
• Failure to negotiate advance agreements prior to the incurrence of costs (48 CFR
Part 31.109)
• Illegal tenant evictions.
For the past year, the City has attempted to address these issues with MBCDC and was
unable to make much progress until this past August, when Beatriz Cuenca-Barberio was
hired as the agency's new Executive Director. Ms. Cuenca-Barberio promptly complied with
document and service requests enabling the City's forensic auditors to review the City's
funding of the Allen Apartments and Neptune Apartments. Simultaneously, the Building
Department was expressing concern that the Barclay Plaza Apartments may need to be
September 17, 2014
City Commission Meeting
Page 3 of 4
closed in order to address violations that had been ongoing since 2007. Such a closure
would trigger the invocation of the Universal Relocation Act(URA) because the building had
received federal funds for the repair of its elevator. The anticipated URA costs for the
Barclay Plaza would be $900,000 for the relocation of displaced tenants. This expense
would bankrupt MBCDC and place the City's$36,422,153 investments in jeopardy. In short
order, it was determined that MBCDC had grown too quickly and did not have the capacity to
properly operate its extensive housing portfolio.
City staff reached out to the MBCDC Board of Directors on September 8th and shared its
findings. In addition, the City offered a plan to address the agency's operational problems
while securing the City's fiscal interests and the well being of the tenants housed by
MBCDC. The City suggested that MBCDC surrender title to the following properties:
• Allen Apartments;
• Barclay Plaza Apartments;
• Lottie Apartments;
• Madeleine Village Apartments; and
• Neptune Apartments.
The following is a summary of the size, value and location of the properties in question:
Property Address Units Property Net Annual
Appraiser Operating
Income Value
Estimate
Allen Apartments 2001 Washington Avenue 43 $ 3,864,466 $ 70,000
-Barclay Plaza 1940 Park Avenue 66 $ 5,455,000 $ 110,000
Lottie Apartments 530—75,n Street 20 $ 1,440,000 $ 35,000
Madeleine Village 7871 Cres i Boulevard 16 $ 970,000 $ 50,000
Neptune 1632 Meridian Avenue 35 $2,600,000 $ 92,000
A artments
• 180 $ 14,329,466 $ 357,000
The City would assume title to the properties, and the debt for two bank-issued mortgages
for the Allen Apartments and Neptune Apartments of$243,914 and$669,683, respectively.
The rental revenue collected for these properties adequately fund this debt service of
$40,080 and $53,616, respectively. The City would also assume responsibility for the
tenants who may be displaced at the Barclay Plaza Apartments after prioritizing those
eligible for placement in vacancies at other MBCDC-owned properties.
Attached please find the Letter Of Intent(LOI)executed by the City Manager and MBCDC,
after its Board of Directors endorsed the City's proposal at the Board's September 8, 2014
meeting.
At the September 10th Commission meeting,the Administration presented a verbal report to
the Mayor and Commission seeking the Commission's endorsement to pursue this avenue
of action. The Commission unanimously supported this course. The Administration is now
seeking Commission authorization to ratify and approve the executed LOI and proceed with
the acquisition of these properties.
The City would fund these acquisitions by submitting a budget modification to the State of
Florida Department of Economic Opportunity redirecting the City's remaining Neighborhood
Stabilization Program (NSP1) funds to cover the estimated closing costs for the three
i
September 17, 2014
City Commission Meeting
Page 4 of 4
properties previously assisted by NSP1: Lottie Apartments, Madeleine Village Apartments
and Neptune Apartments ($46,165) and create an operating reserve for these properties
with the remaining balance ($155,636). The estimated closing costs for the Barclay Plaza
Apartments and Allen Apartments would be funded by the City's uncommitted Community
Development Block Grant(CDBG)funds. The estimated closing costs for each building are:
•
$ 17,390 $ 57,300 $ 6,500 $4,365 $ 11,700
• $ 14,685 $ 20,730 $ 5,500 $ 3,700 $ 9,900
•
$ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500
• $ 33,575 $ 79,530 $ 13,500 $ 9,565 $ 23,100
In the longer term, the City antici.pates potential funding from its Community Development
Block Grant and HOME Investment Partnership funds to address the rehabilitation/repairs
needed at the Barclay Plaza Apartments.
CONCLUSION
The Administration requests that the Mayor and City Commission ratify and approve a Letter
of Intent (LOI) with Miami Beach Community Development Corporation (MBCDC) for the
City's proposed purchase of the following properties Allen Apartments: Barclay Plaza
Apartments; Lottie Apartments; Madeleine Village Apartments; and Neptune Apartments
(the "MBCDC Properties"); further authorizing the City Manager to negotiate and, if
successful, execute Purchase and Sale Agreements for the MBCDC Properties; authorizing
the City Manager to execute any and all closing documents, as required for the City's
purchase of the MBCDC Properties; and further authorizing the City Manager to submit a
budget modification to the State of Florida Department of Economic Opportunity for the
balance of the City's Neighborhood Stabilization Program (NSP1) funds to help fund the
acquisition of the MBCDC Properties and create an operating reserve for the Lottie
Apartments, Madeleine Village Apartments and Neptune Apartments,as well as authorizing
the use of Community Development Block Grant (CDBG) funds to also help fund the
purchase of said properties.
JLM/KGB/MLR
T:\AGENDA\2014\September\MBCDC Property Acquisition 09172014.doc
i
MIAMI BEACH
City of Miami Beath, 1700 Convention Center Drive,Miami Beach,Florida 33139,www.miamibeachfl.gov
Jimmy L. Morales, City Manager
Tel: 305-673-7010, Fax: 305-673-7782 i
I
September 9, 2014
Jack Johnson, Chairman
Miami Beach Community Development Corporation
945 Pennsylvania Avenue
Miami Beach, Florida 33139
i
Re: Letter of Intent ("LOI") from City of Miami Beach, Florida, a Florida Municipal
Corporation ("Purchaser" or"City") to Miami Beach Community Development
Corporation, Inc., a Florida corporation as sole manager and member of the
Sellers, as hereafter defined, in connection with the Purchase and Sale of
Properties: Allen Apartments located at 2001 Washington Avenue; Barclay
Apartments located at 1940 Park Avenue; Lottie Apartments located 530 75th
Street; Madeleine Village Apartments, located at 7871 Crespi Boulevard; and
Neptune Apartments located at 1632 Meridian Avenue, (hereinafter also
referred to as the"Transaction").
Dear Mr. Johnson:
The purpose of this LOI is to outline the principal general business terms and conditions under
which the City will purchase the above referenced Properties from Sellers, as approved by the
MBCDC board at yesterday's meeting. Any previous LOI is hereby void and of no effect.
This LOI should not be construed as a purchase offer or commitment as it is subject to the
conditions set forth in this LOI, including the execution of a mutually satisfactory purchase and
sale agreement ("Sales Contract").
The general business terms and conditions of the proposed Sales Contract are as follows (Note:
It is the City's intent that a separate Sales Contract will be executed for each property; based
upon the following minimum terms and conditions):
I. PURCHASER
The City of Miami Beach, a Florida Municipal Corporation, whose address is 1700
Convention Center Drive, Miami Beach, Florida 33139 ("Purchases'' or"City").
Il. SELLERS i
MBCDC: The Allen LLC, a Florida limited liability not-for-profit company; MBCDC:
The Barclay LLC, a Florida limited liability not-for-profit company; MBCDC: Lottie
Apartments, LLC, a Florida limited liability not-for-profit company; MBCDC Madeleine
Village LLC., a Florida limited liability not-for-profit company; MBCDC: Neptune, LLC,
a Florida limited liability not-for-profit company.
i
i
Jack Johnson, Chairman
LOI from CMB to MBCDC
September 9, 2094
Page 2 of 5
III. THE PROPERTIES
Allen Apartments, located at 2001 Washington Avenue and consisting of 1 Building
containing 39 Units; Barclay Apartments, located at 1940 Park Avenue and '
g g g Lottie Apartments located 530 75tn
consisting of 1 Building containing 66 Units;
Street and consisting of 1 Building containing 9 Units; Madeleine Village Apartments,
located at 7871 Crespi Boulevard and consisting of 4 Buildings containing 16 Units;
and Neptune Apartments, located at 1632 Meridian Avenue and consisting of 1
Building containing 35 Units. '
IV. PURCHASE PRICE
City and Sellers agree and acknowledge that the City shall purchase and assume
ownership of the Properties, via conveyance by Owners of marketable fee simple
title, for the total purchase price of ten and 00/100 ($10.00) per Property, which City
and Owners hereby deem to be good, valuable and sufficient consideration for such
purchase.
V. TENANT IMPROVEMENTS, COMMISSIONS, AND CAPITAL IMPROVEMENTS
All pre-existing tenant improvements, commissions, and capital expenditure
obligations will be the responsibility of the Sellers.
VI. PROPERTY MANAGEMENT AND LEASING
All existing management, leasing, and service contracts (collectively referred to
herein as "Operational Agreements") and Tenant Leases, at Purchaser's sole option
and discretion, shall be terminable at closing.
VII. PROPERTY BROKERAGE AND COMMISSIONS
Sellers shall pay any brokerage commissions due related to this Transaction. Sellers
further warrant and represent to City that they have not worked with any broker. City
warrants and represents to Sellers that it has not engaged the services of any broker s
in connection with this transaction.
VIII. CLOSING COSTS
Sellers have advised Purchaser that this is an "AS IS WHERE IS" transaction.
Purchaser will pay all costs incurred in performing Purchaser's due diligence
including its legal counsel, physical and environmental inspections, and title
insurance. Sellers will be responsible for its legal fees. Purchaser shall be
responsible for all recording fees, transfer taxes, documentary stamp taxes, and for
the cost of securing a current ALTA Survey. Purchaser will pay for any updates to
the survey. The closing of the purchase shall be subject to normal prorations.
Purchaser will select the Title Company.
IX. CONDITIONS
The closing of the proposed Transaction is subject to the Purchaser's satisfaction,
with its review of all legal documents and certain other information relating to the
Property, including, without limitation, Operational Agreements, Tenant Leases, and
title insurance documentation. The closing of the Transaction is further subject to: (i)
the approval of this Letter of Intent by the Mayor and City Commission; and (ii) the
execution by Purchaser and Sellers of a mutually satisfactory Sales Contract, and
approval of same by the Mayor and City Commission.
i
I
Jack Johnson, Chairman
LOI from CMB to MBCDC
September 9, 2094
Page 3 of 5 i
i
i
X. FUNDING AGREEMENT(S) i
City and Sellers acknowledge that Sellers and/or Sellers' sole manager and member,
Miami Beach Development Community Development Corporation (MBDCD), have
previously received public funding (i.e. whether from federal, State of Florida, Miami- j
Dade County, and/or City funding sources) pursuant to grant and/or other funding I
agreements entered into for the purpose of developing the Property as an affordable
multi-family residential housing project. Upon successful closing of each purchase,
the City shall release Sellers and MBCDC from any further contractual obligations
under any such grant and/or funding agreements for the Properties. Any such
agreements shall be itemized and specifically set forth in the respective Purchase !
and Sale Agreements. Additionally, upon successful closing of each purchase, the
City, Sellers and MBCDC shall further execute a Mutual Release with respect to any
City grant and/or funding agreements encumbering each property. Prior to closing,
Sellers shall also secure the assignment to City, upon the same terms and i
conditions, of any and all other grant and/or funding agreements for the Property that
may have been entered into between Sellers and/or MBCDC, and other "non-City"
funding sources (i.e. federal, State, or Miami-Dade County).
XI. RELEASE OF MBCDC: THE LONDON LLC
i
As additional consideration for the purchase of the Properties, and upon conclusion
of the closing of the last of the five Properties which are the subject of this LOI, City
and MBCDC: The London, LLC, a Florida not-for-profit limited liability corporation
shall execute a Mutual Release with respect to that certain Economic Development i
Initiative (EDI) Special Project Grant, dated as of April 11, 2011, in the original sum
not to exceed $514,500, having an approximate balance of$302,000.00.
XI 1. RELOCATION OF TENANTS FROM THE BARCLAY
The Barclay Apartments tenants ("Barclay Tenants") will need to be relocated in the
near future. As additional consideration for the purchase of the Properties, City shall
assume responsibility for the relocation of the Barclay Tenants, including any cost of
said relocation, even if the relocation occurs prior to completion of the closing of the
Properties. Notwithstanding the foregoing, Sellers agree that they currently have
approximately ten (10) units at one of the subject Properties or other properties
which are not the subject of this LOI, and shall cooperate with City in the relocation j
efforts, subject to said units being available and so long as the Barclay Tenants may
be transferred pursuant to any applicable law.
i
This LOI is only intended to set forth general understandings of the parties and to provide the
basis for negotiating the Sales Contracts. The parties acknowledge that this LOI is not a binding
commitment or agreement between the parties, and that (i) execution of a mutually satisfactory i
Sales Contract for each of the properties, (containing all the essential terms of an agreement
between Purchaser and Sellers), and (ii) approval by the Mayor and City Commission, is a
condition precedent to the creation of binding contracts between two parties. This LOI does not
obligate either party to proceed to the completion of a Sales Contract nor should Sellers
construe the delivery and execution of this LOI as a reasonable basis to believe that a closing
will in fact occur. Further, this LOI does not obligate the parties to negotiate toward the
execution and delivery of a Sales Contract.
i�
I�
I'
i...---.------...------------------------------------------------------------------------------------ ......----------------------------------------- ------------ ------------------------.----------.-------.--.-..-----.-----------------------------------------------............_-..........-.._.-.---..-..---...------------------
Jack Johnson, Chairman
LO!from CMB to MBCDC
September 9, 2094
Page 4 of 5
Sellers reserve the right to accept back offers. Unless accepted by Sellers, this letter shall
terminate at 5:00 pm (EST), on Friday, September 12, 2014.
If. the business terms and conditions for the proposed transaction meet with your approval,
please sign this letter, keep one copy for your files and return one copy to the City of Miami
Beach, at the below address:
City of Miami Beach
Attention: Jimmy L. Morales, City Manager
1700 Convention Center Drive
Miami Beach, Florida 33139 f
We look forward to working with you on this transaction.
Very truly yours,
i
Jim L. Mora s, CitAmanager
APPROVED AS TO
FORM& LANGUAGE
&FOR EXECUTION
City Attorney A11r Dot
i
i
I
j
I
if
I
I
Jack Johnson, Chairman
LOI from CMB to MBCDC
September 9, 2094
Page 5 of 5
AGREED TO AND ACCEPTED, this day of September, 2014.
Miami Beach Community Development Corporation, as sole manager and member of MBCDC:
The Allen LLC, a Florida limited liability not-for-profit company; MBCDC: The Barclay LLC, a
Florida limited liability not-for-profit company; MBCDC: Lottie Apartments, LLC, a Florida limited
liability not-for-profit company; MBCDC Madeleine Village LLC., a Florida limited liability not-for-
profit company; MBCDC: Neptune, LLC, a Florida limited liability not-for-profit company
By:
ack Johnson"
Title: Chairman
i
i
I
cc: Raul Aguila, City Attorney
Kathie G. Brooks, Assistant City Manager
Maria Ruiz, Office of Housing and Community Services Director
i
I
1
i