2015-29051 Reso RESOLUTION NO. 2015-29051
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, APPROVING AND AUTHORIZING THE ALLOCATION OF STATE
HOUSING INITIATIVES PARTNERSHIP PROGRAM (SHIP) FUNDS, IN THE AMOUNT OF
$43,508.85, FROM FY 2013-2014, AND $91,955.15 FROM FY 2014-15, TO MBCDC/THE
JEFFERSON, INC. (MBCDC/JEFFERSON) FOR THE REHABILITATION OF THE
AFFORDABLE HOUSING PROPERTY LOCATED AT 542 JEFFERSON AVENUE; TO
INCLUDE THE REPLACEMENT OF THE ROOF AND UPGRADES TO THE NINE UNITS
LOCATED ON THE THIRD FLOOR OF THE PROPERTY; AND FURTHER AUTHORIZING
THE MAYOR AND CITY CLERK TO EXECUTE THE SHIP PROGRAM AGREEMENT
BETWEEN MBCDC/JEFFERSON AND THE CITY.
WHEREAS, the State of Florida enacted the William E. Sadowski Affordable Housing
Act on July 7, 1992, allocating a portion of new and existing documentary stamp taxes on deeds
to local governments to stimulate the production of affordable housing through the State
Housing Initiatives Partnership (SHIP) Program; and
WHEREAS, the Act requires that, in order to qualify for funding, local governments
develop a Local Housing Assistance Plan outlining how the funds will be used; and
WHEREAS, the City developed its Local Housing Assistance Plan to include rental
housing development as an approved strategy and as approved via Resolution 2014-28824;
and
WHEREAS, MBCDC/The Jefferson, Inc. (MBCDC/Jefferson) is the owner of the
affordable residential property located at 542 Jefferson Avenue; and
WHEREAS, MBCDC/Jefferson is a wholly owned subsidiary of Miami Beach Community
Development Corporation (MBCDC); and
WHEREAS, the property is in need of repairs to ensure its continued use as affordable
housing including replacement of the roof and air conditioning unit as well as upgrades to the
nine units located on the third floor; and
WHEREAS, the City will ensure strict compliance of SHIP rules by MBCDC/Jefferson by
conducting weekly progress inspections and ensuring that all expenditures are eligible for
reimbursement; and
WHEREAS, MBCDC/Jefferson will be required to complete all rehabilitation and expend
all awarded funds by September 30, 3015; and
WHEREAS, MBCDC/Jefferson will be required to submit to the City Building Department
permit and inspection records for the project as well as ensure that appropriate procurement
processes were followed in the selection of contractors and vendors involved with the project;
and
WHEREAS, the City will secure the awarded funds by placing a 30-year Restrictive
Covenant on the property.
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 approve and authorize the allocation of State Housing Initiatives
Partnership (SHIP) Program funds, in the amount of $43,508.85, from FY 2013-14, and
$91,955.15 from FY 2014-15, to MBCDC/The Jefferson, Inc. (MBCDC/Jefferson) for the
rehabilitation of the affordable housing property located at 542 Jefferson Avenue; to include the
replacement of the roof and upgrades to the nine units located on the third floor; and further
authorize the Mayor and City Clerk to execute the SHIP Program Agreement between
MBCDC/Jefferson and the City.
PASSED AND ADOPTED this /0 day of Junes 2015.
ATTEST:
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FORM & LANGUAGE
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City Attorney Date
COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution allocating $135,464 in SHIP funds for the rehabilitation of The Jefferson, a 28-unit
affordable housing building, and authorizing the execution of the of the SHIP agreement between the
City and MBCDC/The Jefferson, Inc.
Key Intended Outcome Supported:
N/A
Supporting Data: Community Satisfaction Survey: N/A
Item Summary/Recommendation:
The City is a recipient of State Housing Initiatives Partnership (SHIP) Program funds. SHIP funds seek
to stimulate the production of affordable housing. The City's Local Housing Assistance Plan (LHAP)
establishes the strategies employed by the City to expend SHIP funds. Among these strategies is rental
housing development(acquisition and rehabilitation of multi-family affordable housing). The SHIP funds
available include$ 124,311 from FY 2013/14 and $ 262,729 from FY 2014/15.
The City advised registered affordable housing properties in the City of the availability of SHIP funds for
the purpose of rehabilitation to ensure the retention of existing affordable units. SHIP funds invested in
a property are secured by a Restrictive Covenant that assure the property's ongoing use as affordable
housing for the duration of the affordability period, typically up to 30 years.
MBCDC/The Jefferson, Inc. (MBCDC/Jefferson) approached the City regarding its affordable housing
property located at 542 Jefferson Avenue. The Jefferson is a 27-unit affordable housing building serving
elder residents. The building is in need of a roof replacement, the replacement of an air conditioning
unit, and the upgrade of the kitchens and bathrooms of the nine units located on the third floor. Repair
costs are estimated at$135,464.
MBCDC/Jefferson is a wholly owned subsidiary of Miami Beach Community Development Corporation
(MBCDC). The City has reviewed MBCDC's prior performance concerns and the agency's overall fiscal
and operational health. MBCDC has completed a 100 percent turnover of all staff that had been present
during the period of prior performance concerns and has agreed to strict performance timelines as a
condition of receiving rehabilitation funds. MBCDC would be required to complete the rehabilitation
project by September 30, 2015 and submit weekly progress reports. Reimbursement packages would
require evidence of expenditure as well as staff inspections to verify submissions.
Financial Information:
Source # Grant Name/Project Approx. Approximate
of Award Match
Funds Amount Amount/
Source
% . SHIP Account- 152.5721.000349 $135,464 N/A
r1
Financial Impact Summary: N/A
City Clerk's Office Legislative Tracking:
Maria L. Ruiz, Department Director, Office of Housing and Community Services, Extension 6491
Sign-Offs:
Department Director Assistant City nager ity Manager
Qo
M I AM I BEACH AGENDA ITEM � G
DATE 6-lo-1
MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive,Miami Beach, Florida 33139,www.miamibeachfl.gov
COMMISSION M� ORANDUM
TO: Mayor Philip Levine and Members of a City Commiss'•n
FROM: Jimmy L. Morales, City Manager
DATE: June 10, 2015
SUBJECT: A RESOLUTION OF THE MAYOR i D CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, APPROVING A D AUTHORIZING THE ALLOCATION OF STATE
HOUSING INITIATIVES PARTNERSHIP PROGRAM (SHIP) FUNDS, IN THE AMOUNT
OF $43,508.85, FROM FY 2013-2014, AND $91,955.15 FROM FY 2014-15, TO
MBCDC/THE JEFFERSON, INC. (MBCDC/JEFFERSON) FOR THE REHABILITATION
OF THE AFFORDABLE HOUSING PROPERTY LOCATED AT 542 JEFFERSON
AVENUE; TO INCLUDE THE REPLACEMENT OF THE ROOF AND UPGRADES TO THE
NINE UNITS LOCATED ON THE THIRD FLOOR OF THE PROPERTY; AND FURTHER
AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE THE SHIP PROGRAM
AGREEMENT BETWEEN MBCDC/JEFFERSON AND THE CITY.
ADMINISTRATION RECOMMENDATION
Approve the resolution.
BACKGROUND
The City is a recipient of State Housing Initiatives Partnership (SHIP) Program funds. SHIP funds were
created via the William E. Sadowski Affordable Housing Act on July 7, 1992 as a means of stimulating
the production of affordable housing. Funds are derived from documentary stamp taxes on deeds and
then allocated to local governments.
SHIP funds have very specific expenditure rules including:
• At least 75 percent of the funds made available to each municipality must be reserved for
construction, rehabilitation, or emergency repair of affordable, eligible housing.
• At least 30 percent of the funds must be reserved to benefit very low-income households.
• At least 65 percent of funds made available to each municipality must be reserved for home
ownership for eligible persons residing in very low- and low-income households.
Please note that the percentage thresholds are overlapping and equal greater than 100 percent.
The City is required to submit its Local Housing Assistance Plan (LHAP) to the State every three
years. The LHAP establishes the strategies employed by the City to properly expend SHIP funds. The
City's latest LHAP was amended by the City Commission via Resolution.2014-28824 and includes the
following expenditure strategies:
• Housing rehabilitation of single family, owner-occupied housing
• Disaster Mitigation Recovery (a strategy that allows the use of SHIP funds for home repair in
the event of a disaster declaration)
City Commissioner Memorandum—SHIP Award to MBCDC for the Rehabilitation of The Jefferson
June 10,2015
3 pages
• New construction of home ownership opportunities
• Down payment and closing cost assistance with rehabilitation (providing first-time homebuyers
with cash assistance for acquisition and rehabilitation of acquired homes)
• Rental housing development (acquisition and rehabilitation of multi-family affordable housing)
The following SHIP funds available:
FY 2013/14 $ 124,311
FY 2014/15 $ 262,729
While the City has had relatively little or no SHIP funds for the past several years, the revitalized real
estate market appears to be trending upwards and the City expects to receive increasing allocations.
As a reminder, SHIP funds must be expended within two years of receipt. SHIP administration funds
are capped at three (3) percent of award. As a result, the City leverages other housing resources to
properly manage the program.
ANALYSIS
The SHIP program has very specific expenditure guidelines that have posed challenges in our
community. While our LHAP provides up to $60,000 in down payment and rehabilitation assistance to
first-time homebuyers, the SHIP program's threshold of expending 65 percent of funds on very low-
and low-income households has made it difficult to match eligible households with current market
units. While most qualified households are obtaining mortgage approvals valued at around $50,000,
the marketplace is asking in excess of $100,000 for studio units. Staff has been working with local
area mortgage companies, lenders and development corporations to leverage resources and serve the
prerequisite households seeking homeownership.
The City advised registered affordable housing properties in the City of the availability of SHIP funds
for the purpose of rehabilitation to ensure the retention of existing affordable units. SHIP funds may be
used for systems upgrades, Code and Building Department remediation, aging-in-place upgrades and
modernization so that affordable buildings may continue to house income-eligible households. SHIP
funds invested in a property are secured by a Restrictive Covenant that assure the property's ongoing
use as affordable housing for the duration of the affordability period, typically up to 30 years.
Miami Beach Community Development Corporation approached the City regarding its affordable
housing property located at 542 Jefferson Avenue, listed in property documents at MBCDC: The
Jefferson, Inc., a wholly owned subsidiary of MBCDC. The Jefferson is a 27-unit affordable housing
building serving elder residents. The building is in need of a roof replacement (to address pooling and
trusses that are rotting), the replacement of an air conditioning unit (which has reached its life span
and is currently buckling under its weight), and the upgrade of the kitchens (which require counter and
cabinet replacement because of deterioration of the particle board material) and bathrooms (replace
the cabinets and sinks because of material deterioration) of the nine units located on the third floor.
When the roof is replaced, the electrical conduits will also need to be properly secured as this was a
finding of the property's 40-year certification. These repairs are estimated at $135,464, the amount of
SHIP funds being requested.
The City has reviewed MBCDC's prior performance concerns and the agency's overall fiscal and
operational health. MBCDC has completed a 100 percent turnover of all staff that had been present
during the period of prior performance concerns and has agreed to strict performance timelines as a
condition of receiving rehabilitation funds. MBCDC would be required to complete the rehabilitation
project by September 30, 2015 and submit weekly progress reports. Reimbursement packages would
require evidence of expenditure as well as staff inspections to verify submissions.
City Commissioner Memorandum—SHIP Award to MBCDC for the Rehabilitation of The Jefferson
June 10,2015
3 pages
CONCLUSION
While there have been previous concerns with MBCDC, City staff have evaluated the proposed
project, timeline and working conditions to ensure that the project is completed as planned. Current
affordable housing restrictions are expiring, or have already expired, which means the property could
become market-rate housing if not secured as affordable housing going forward. The rehabilitation of
the building will ensure its ongoing use as an affordable housing property for 30 years and will improve
the livin conditions of its elderly tenants. As such, the project is recommended for funding.
JLM/K B/MLR
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