96-21919 RESO
RESOLUTION NO. 96-21919
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA AUTHORIZING THE
MAYOR AND CITY CLERK TO EXECUTE A LIEN
SUBORDINATION AGREEMENT FOR THE PROPERTY KNOWN
AS THE VICTORY CONDOMINIUM, 734 MERIDIAN AVENUE, UNIT
1, MIAMI BEACH, FLORIDA; AND AUTHORIZING THE
ADMINISTRATION, SUBJECT TO REVIEW BY THE CITY
ATTORNEY'S OFFICE, TO REVISE AND EXECUTE ANY
NECESSARY ACCOMPANYING DOCUMENTS FOR THIS
TRANSACTION.
WHEREAS, on July 28, 1993 the City and the Miami Beach Development Corporation (the
"Provider") entered into an Agreement (the "Agreement") for the implementation of an affordable
rental housing program funded through the HOME Investment Partnerships Program ("HOME") ;
and
WHEREAS, the Agreement authorized the City Manager to review, approve and execute the
individual site transactions pursuant to the Agreement; and
WHEREAS, on March 28, 1995 the City executed an individual site transaction for a property
located at 734 Meridian Avenue, Unit 1, Miami Beach, Florida (the "Property"); and
WHEREAS, certain terms and conditions of the Agreement and site transaction were
enforced through a Restrictive Covenant, (the "Covenant") executed by the Provider at the time of
closing and filed May 31, 1995 in Official Records Book 16799 page 2946, recorded in the Public
Records of Dade County, Florida; and
WHEREAS, by the terms of the Covenant, the City of Miami Beach holds a lien in the amount
of fifty-five thousand seven hundred ninety-six dollars ($55,796), which at the present time is a first
lien on the Property; and
WHEREAS, by the terms of the Covenant the lien is subordinate to a first mortgage on the
property which no longer exists; and
WHEREAS, the Provider has received a commitment of working capital loan funds from the
Community Reinvestment Group L.C., (the "CRG"), a limited liability company whose principals
include Chase Federal Bank, Chemical Bank, Citizens Federal Bank and Consumer Savings Bank,
in order to work with community development corporations in affordable housing initiatives; and
WHEREAS, the primary purpose of the CRG is to provide predevelopment and acquisition
funding for local nonprofits, who in turn use the funds for site acquisition for affordable housing
projects; and
WHEREAS, the CRG has entered into an agreement with the Provider to advance the sum
of $50,000 which is intended to be a first mortgage on the Property; and
WHEREAS, among the purposes of the HOME program is to expand the capacity of its non-
profit community housing development partners to develop and manage decent, safe, and affordable
housing; and
WHEREAS, on March 1, 1996 the City's Loan Review Committee approved a motion to
subordinate the City's Covenant on the Property to a first mortgage of the CRG, which will secure
a line of credit of up to $50,000, to be used by the Provider for down payment acquisition costs,
rehabilitation costs and other pre-closing costs in its Homebuyer Assistance Program
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA that the Mayor and City Clerk are hereby authorized to
execute a lien subordination agreement for the property known as the Victory Condominium, 734
Meridian Avenue, Unit 1, Miami Beach, Florida; and authorize the administration, subject to review
by the City Attorney's office, to revise and execute any necessary accompanying documents for this
transaction.
PASSED AND ADOPTED THIS ~ DAY OF
March, 1996.
ATTEST:
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CITY CLERK
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CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
CITY OF MIAMI BEACH
COMMISSION MEMORANDUM NO. ~
TO:
Mayor Seymour Gelber and
Memben of the City Commission
DATE:
March 20, 1996
FROM:
Jose Garcia_pedros~
City Manager
A RESOLUTI AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE A LIEN SUBORDINATION AGREEMENT FOR THE PROPERTY
KNOWN AS THE VICTORY CONDOMINIUM, 734 MERIDIAN AVENUE,
UNIT 1, MIAMI BEACH, FLORIDA; AND AUTHORIZING THE
ADMINISTRATION, SUBJECT TO REVIEW BY THE CITY ATTORNEY'S
OFFICE, TO REVISE AND EXECUTE ANY NECESSARY ACCOMPANYING
DOCUMENTS FOR THIS TRANSACTION.
SUBJECf:
ADMINISTRATION RECOMMENDATION:
The Administration recommends that the Mayor and City Commission execute a lien
subordination agreement for the property located at 734 Meridian Avenue, Unit 1, Miami
Beach, Florida and authorize the administration, subject to review by the City Attorney's
office, to revise and execute any necessary accompanying documents for the transaction.
BACKGROUND:
The HOME Investment Partnerships Act (HOME) is designed to expand the supply of
decent, safe, and affordable housing for residents earning eighty percent or less of the
area median income. The program encourages the creation of partnerships between the
government and the private sector, including nonprofit organizations. In accordance with
the HOME Program regulations, the City is required to reserve at least fifteen percent of
its annual HOME allocation for investment in housing to be developed, sponsored or
owned by Community Housing Development Organizations.
The Miami Beach Development Corporation (MBDC) was certified as a Community
Housing Development Organization (CHDO) on April 8, 1993. Pursuant to this CHDO
designation, on July 28, 1993, the City entered into a CHDO Agreement with MBDC in the
amount offour hundred fifty-eight thousand three hundred-fifty dollars ($458,350) for the
implementation of a family rental housing program funded through the City's HOME
Program grant. The Agreement allowed for individual site and transaction approvals to
be executed by the City Manager or designee.
AGENDA ITEM
C.1G
3-2D-q (,
DATE
COMMISSION MEMORANDUM
MARCH 20, 1996
PAGE 2
Four individual sites were purchased by MBDC between July 1994 and May 1995 utilizing
CHDO set-aside funds. An individual site agreement was executed by the City Manager
for each of these transactions. In addition, for each transaction, MBDC executed a
Restrictive Covenant in favor of the City, encumbering each of the four properties. One
of the four sites is the subject property located at 734 Meridian Avenue, Unit 1, Miami
Beach.
ANALYSIS:
Eleven Thrifts in South Florida have formed what is believed to be the nation's first limited
liability company owned by thrifts and devoted to financing affordable housing. The
company, known as Community Reinvestment Group, L.C. (CRG), was formed in
response to needs expressed by nonprofit housing providers who have not had the
necessary quick access to funds necessary for site acquisition. While MBDC receives
funding from various sources for its operating costs and project costs, it has not had
access to a revolving loan fund or similar instrument that provides a source of quick cash
to secure sites. The lack of affordable funds for site acquisition, which is required prior to
the award of most project subsidies, has been a major obstacle to the timely production
of affordable housing in the Dade County, Florida area.
MBDC has received a commitment from CRG for a no interest working capital loan in the
amount of $50,000 to be used exclusively for the MBDC Scattered-Site Homeownership
Program. Up to $5,000 per housing unit would be drawn down to cover down payment
acquisition costs, rehabilitation costs and other pre-closing costs as they are incurred by
MBDC, and then be repaid from the proceeds of end financing at closing. In order to make
a loan of this nature, the CRG requires sufficient collateral to cover the loan. Since the
subject property was an all cash purchase with no existing mortgage, MBDC identified it
as the source of collateral for the revolving loan fund.
By the terms of the Restrictive Covenant executed for the subject property, the City holds
a lien in the amount of $55,796 which at the present time is a first lien on the property. By
the terms of the Covenant, the lien is subordinate to a first mortgage on the property which
no longer exists. The loan to be provided by CRG to MBDC is intended to be a first
mortgage, thereby placing the City in second lien position, if approved.
Although the Administration does not normally support the subordination of Restrictive
Covenants, this action will serve a public purpose in that MBDC is the City's only
COMMISSION MEMORANDUM
MARCH 20, 1996
PAGE 3
designated not-for-profit CHDO. The City encourages the Mayor and City Commission to
approve this request with the clear understanding that this is a "one-time only" approval,
and predicated on the fact that this is for a not-for-profit designated CHDO.
On March 1, 1996, the City's Loan Review Committee (LRC) reviewed and approved
MBDC's request and recommended that the City subordinate its lien position to a first
mortgage of the CRG, in order to secure a line of credit in the amount of $50,000 for
MBDC's Scattered-Site Homeownership Program.
CONCLUSION:
The Administration recommends that the Mayor and City Commission adopt the attached
Resolution and authorize the Mayor and City Clerk to execute the attached Lien
Subordination Agreement for the property known as the Victory Condominium, 734
Meridian Avenue, Unit 1, Miami Beach, Florida; and authorize the administration, subject
to review by the City Attorney's Office, to revise and execute any necessary accompanying
documents for this transaction.
JGP/H~S
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CITY OF MIAMI BEACH
LOAN REVIEW COMMITTEE
MEETING OF:
March 1, 1996
MOTION #:
4
MOTION MADE BY:
James Gleason
MOTION 2ND BY:
Cheryl Martin
MOTION TEXT:
That the Loan Review Committee recommend to the Mayor and City
Commission that the City's Restrictive Covenant on the property
located at 734 Meridian Avenue, be subordinated to a first mortgage of
the Community Reinvestment Group which will secure a line of credit
of up to $50,000, which is to be used exclusively for the Scattered-site
Homeownership Program administered by MBDC.
ROLL CALL VOTE:
~MEMBERS YES NO ABSENT ABSTAIN CONFLICT
ANITA BERNSTEIN X
JAMES GLEASON X
CHERYL MARTIN X
ROBERT NACHLlNGER X
HARRY PELLlSH X
SIDNEY WEISBURD X
5 0 1
I MOTION CARRIED/FAILED i CARRIED I I I I I
LIEN SUBORDINATION AGREEMENT
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WHEREAS, HERETOFORE, MIAMI BEACH DEVELOPMENT CORPORATION,
INC., a Florida not-for-profit corporation ("Owner") did execute a Restrictive Covenant and
Lien Agreement in favor of CITY OF MIAMI BEACH, ("Subordinating Lien Holder")
encumbering the following described property:
VICTORY CONDOMINIUM UNIT 1, UNDMDED 11.00%
INTEREST IN COMMON ELEMENTS, CLERK'S FILE NO.
73R-67064, Property Address: 734 Meridian Avenue, Unit 1,
Miami Beach, Florida 33139
securing a lien in the amount of FIFrY FIVE THOUSAND SEVEN HUNDRED NINETY
SIX THOUSAND AND NO/I00 DOLLARS ($55,796.00) filed May 31, 1995 in Official
Records Book 16799 at Page 2946, (The "Subordinated Lien") recorded in the Public
Records of Dade County, Florida.
WHEREAS, thereafter, on condition that the Subordinated Lien be subordinated in
the manner hereinafter set forth, the Owner did execute a certain mortgage in favor of
COMMUNITY REINVESTMENT GROUP, L.C., a limited liability corporation,
("Mortgagee") securing a note in the amount of FIFIY THOUSAND AND NO/IOO
DOLLARS ($50,000.00), which mortgage was dated July 10 , 1996 and recorded under
Clerk's File No. 96R309762 , of the Public Recordsof Dade County, Florida
("Mortgage"); and
WHEREAS, the Mortgagee would not consummate its mortgage loan unless the
Mortgage was a first mortgage upon the subject premises;
NOW, THEREFORE, in consideration of the premises and of $10.00 in hand paid
and in order to induce the Mortgagee to close its mortgage loan, the Subordinating Lien
Holder hereby covenants and agrees:
1. That the Subordinated Lien be, and the same is, hereby made inferior and
subordinate to the Mortgage, just as though the Mortgage were executed and recorded prior
to the execution of the Subordinated Lien.
2. This agreement shall be binding upon the successors and assigns of the
undersigned.
3. In all other respects, said Subordinate Lien is ratified and confirmed.
IN WITNESS WHEREOF, the undersigned has caused these presents to be executed
this eX;;;( day of March , 1996.
Witnesses:
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Robert Parcher, City Clerk
STATE OF FLORIDA )
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COUNTY OF DADE )
The foregoing instrument was acknowledged before me this;;< ~_ day of March ,
1996 by S'E y /}1 tJ c' f.: r:;. r: Lr?)FJ! , as MAY () e , of City of Mia:mIBeach on behalf of
the C t'- & . H~LShe is personally known to me and has produced a Florida Drivers
License as i entification and did not take an oath.
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Public, State of Florida
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My Commission Expires:
,~\, JUDITH MARSHALl
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WH~, HERETOFORE, MIAMI BEACH DEVELOPMENT CORPORATION,
INC., a Florida not-for-profit corporation ("Owner") did execute a Restrictive Covenant and
Lien Agreement in favor of CI1Y OF MIAMI BEACH, ("Subordinating Lien Holder")
encumbering the following described property:
96R327760 1996 JUL 25 14:23
VICTORY CONDOMINlUi\1 T.JNJ:T 1, ill>lDfVIDED 11.00%
INTEREST IN COMMON ELEMENTS, CLERK'S FILE NO. .
73R-67064, Property Address: 734 Meridian Avenue, Unit 1,
Miami Beach, Florida 33139
securing a lien in the amount of FIFIY FIVE THOUSAND SEVEN HUNDRED NINE1Y
SIX THOUSAND AND . NO/IOO DOLLARS ($55,796.00) filed May 31, 1995 in Official
Records Book 16799 at Page 2946, (The "Subordinated Lien") recorded in the Public
Records of Dade County, Florida.
WHEREAS, thereafter, on condition that the Subordinated Lien be subordinated in
the manner hereinafter set forth, the Owner did execute a certain mortgage in favor of
COl\1l\1UNI1Y REINVESTMENT GROUP, L.c., a limited liability COrpoqltion,
("Mortgagee") securing a note in the amount of FJ[lJ THOUSAND AND NO/IOO
DOLLARS ($50,000.00), which mortgage was dated ~ 10, 1996 and recorded under
Clerk's File No. 96R309762 , of the Public Recordsof Dade County, Florida
("Mortgage"); and
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WHEREAS, the Mortgagee would not consummate its mortgage loan unless the
Mortgage was a first mortgage upon the subject premises;
NOW, THEREFORE, in consideration of the premises and of $10.00 in hand paid
and in order to induce the Mortgagee to close its mortgage loan, the Subordinating Lien
Holder hereby covenants and agrees:
1. That the Subordinated Lien be, and the same is, hereby made infeIior and
subordinate to the Mortgage, just as though the Mortgage were executed and recorded prior
to the execution of the Subordinated Lien.
2. This agreement shall be binding upon the successors and assigns of the
undersigned.
3. In all other respects, said Subordinate Lien is ratified and confirmed.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be executed
this ??~ day of March I 1996. .
Witnesses:
STATE OF FLORIDA
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COUNTY OF DADE
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The foregoing instrument, was acknowledged before me this .;(~ day of March I
1996 by ..5cVrnc' 1./ If: c::: E LI.~E R. I as [1I1A-Vrle I of City of Miami Beach on behalf of
the C (I~ { . He/She is personally known to me and has produced a Florida Drivers
License as 'aentification and did not take an oath.
My Commission Expires:
...~-:t.!/''ft,..,. JUDITH MARSHALL
f:r@,'~~:~ MY COMMISSION /I CC 446852
~:;&.~<J EXPIRES: Aprtl28. 1999
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RECORDED IN OFFICIAL REqORDS BOOK
OF DADE couNTY, FLORIDA.
RECORD VERIFIED
HARVEY RUVIN
CLERK CIRCUIT COURT
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Public, State of Florida
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