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HomeMy WebLinkAbout99-23171 RESO RESOLUTION NO. 99-23171 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A SUBORDINATION AGREEMENT IN FAVOR OF CITIBANK, F.S.B. FOR THAT CERTAIN MULTI- FAMILY HOUSING REHABILITATION PROGRAM MATCHING GRANT AGREEMENT, DATED APRIL 19, 1996, BETWEEN THE CITY AND L.V.S. INVESTMENTS, INC. (AGREEMENT) FOR THE REHABILITATION OF THE FLORENCE MANOR APARTMENTS, LOCATED AT 1946 AND 1956 MARSEILLE DRIVE, MIAMI BEACH. WHEREAS, on April 19, 1996, the City entered into a Multi-Family Housing Rehabilitation Matching Grant Agreement (Agreement) with L.V.S. Investments, Inc., (Owner) for the rehabilitation of the Florence Manor Apartments, located at 1946 and 1956 Marseille Drive, Miami Beach (Property); and WHEREAS, the Agreement provided that the City would make available a Matching Grant to encourage the rehabilitation of the Property, in return for which assistance the Owner agreed to offer a certain number of apartment units at reduced rental rates for a period of three (3) years and to certain other conditions, as set forth in the Agreement; and WHEREAS, Owner wishes to obtain a new first mortgage on the Property from Citibank, F.S.B.; and WHEREAS, Citibank, F.S.B. has requested that the City enter into the attached Subordination Agreement acknowledging that the City's rights under the Agreement are subordinate only to the new first mortgage; and WHEREAS, the Administration requests that the attached Subordination Agreement be executed by the Mayor and City Clerk. NOW, THEREFORE, BE IT RESOL VED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby authorize the Mayor and City Clerk to execute the attached Subordination Agreement, in favor of Citibank, F.S.B., for that certain Multi-Family Housing Rehabilitation Program Matching Grant Agreement, dated April 19, 1996, between the City and L.V.S. Investments, Inc., (Agreement) for the rehabilitation ofthe Florence Manor Apartments, located at 1946 and 1956 Marseille Drive, Miami Beach. '" APPROVED AND ADOPTED THIS 26th DAY OF May , 1999. 7//l;A YOR ATTEST: Ubr fM~ ROBERT PARCHER, CITY CLERK 1946_SUB.RES APPROVED AS TO FORM & LANGUAGE & fOR EXECUTION ~~ ify Attar Y4/~7 Dafs :. CITY OF MIAMI BEACH CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139 http:\\ci.miami-beach.f1.us COMMISSION MEMORANDUM NO. 3~5-cr.9 TO: Mayor Neisen O. Kasdin and Members of the City mmission DATE: May 26, 1999 FROM: Sergio Rodriguez City Manager SUBJECT: A RESOL ON OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A SUBORDINATION AGREEMENT IN FAVOR OF CITIBANK, F.S.B. FOR THAT CERTAIN MULTI-FAMILY HOUSING REHABILITATION PROGRAM MATCHING GRANT AGREEMENT, DATED APRIL 19,1996, BETWEEN THE CITY AND L.V.S. INVESTMENTS, INC. FOR THE REHABILITATION OF THE FLORENCE MANOR APARTMENTS, LOCATED AT 1946 AND 1956 MARSEILLE DRIVE, MIAMI BEACH. ADMINISTRATION RECOMMENDATION: Adopt the Resolution. BACKGROUND: The Florence Manor Apartments, located at 1946 and 1956 Marseille Drive, was approved for participation in the City's Multi-Family Housing Rehabilitation Program (Program) by Resolution No. 96-21896, adopted on February 20, 1996. Under this Program, the City entered into a Matching Grant Agreement dated April 19, 1996, with L.V.S. Investments, Inc., the Owner of the property, in the amount of$159,865 in federal Community Development Block Grant (CDBG) funds for use in rehabilitating the two buildings at this address. In order to provide a means of enforcing its Agreement with the Owner, the City recorded the Matching Grant Agreement in the Public Records as a lien against the property for the duration of the Agreement. The rehabilitation of the two buildings containing 16 units was completed in July 1997, and the Owner is obligated to conform with the provisions of the Matching Grant Agreement until its expiration in August 2000. The Agreement includes stipulations requiring repayment of the grant funds to the City if the Owner fails to perform its obligations under the terms of the Agreement. If the Owner complies with the terms of the Agreement, there is no repayment requirement of the matching grant. AGENDAITEM~ DATE 5. ~-q9 COMMISSION MEMORANDUM PAGE 2 Based on the Program Guidelines in effect in 1996, at least 51 percent of the dwelling units in the buildings rehabilitated must be rented for a period of three (3) years to income-eligible tenants at restricted rental rates. The rehabilitation was completed satisfactorily and the required nine (9) units are being rented to income-eligible tenants. ANALYSIS: The City's lien against the property was previously subordinate to a first mortgage in the amount of $297,040 which was recorded prior to the execution of the Matching Grant Agreement with the Owner. This first mortgage was paid off in August 1997. The property underwent a rehabilitation valued at more than $320,000 in 1997. Since then, property values in the area have appreciated. An appraisal completed in May 1998 estimates the value of the buildings to be approximately $550,000. Currently, L.V.S. Investments, Inc., has approached the City and advised that they wish to obtain a new first mortgage on the property. The proposed new mortgage will be for the face amount of $375,000. The prospective lender for the new first mortgage, Citibank, F.S.B., has requested that the Owner enter into a Subordination Agreement with the City. Under the Subordination Agreement, the City's lien in the amount of $159,865 under the Matching Grant Agreement between the City and L.V.S. Investments, Inc., will be subordinated to the first mortgage with Citibank, F.S.B. in the amount of $375,000. The property's appraised value of $550,000 exceeds the combined amount of the proposed first mortgage plus the City's lien which total $534,865, or a 97 percent L TV. In accordance with the terms of the Matching Grant Agreement, if the Owner complies with the terms of the Agreement, the City is to provide the Owner with a Release of Lien upon the expiration of the Agreement in August 2000. To date, the Owner has complied with the terms of the Agreement. A review of City records indicates that there are no open City code violations against the property. There are no unpaid water or sanitation bills, and property taxes are paid for the current year. THE OWNER: Mr. Lewis V. Swezy, 5709 N.W. 158th Street, Miami, is President ofL.V.S. Investments Inc., and its sole stockholder. Mr. Swezy is a registered Real Estate Broker and a developer who owns all or has an ownership interest in over 30 apartment complexes, commercial properties, and vacant parcels of land, at various locations in Miami-Dade and Broward Counties. CONCLUSION: The Administration recommends that the Mayor and City Commission adopt the attached Resolution authorizing the Mayor and City Clerk to execute a Subordination Agreement in favor of Citibank, F.8.B. for that certain Multi-Family Housing Rehabilitation Program Matching Grant Agreement, dated April 19, 1996, between the City and L.V.S. Investments, Inc. for the rehabilitation of the Florence Manor Apartments located at 1946 and 1956 Marseille Drive, Miami Beach. SR/C~C~&cAHGP 1946_SUB.MEM I Author: MiguellDelCampillo at C-H-PO Date: 02/13/2001 10:58 AM Priority: Normal TO: MercediaWilliams CC: SteveCumbo Subject: Resolution # 99-23171 Mercy: As we discussed, Resolution # 99-23171 adopted on May 26, 1999, authorized the Mayor and City Clerk to execute a Subordination Agreement in favor of Citibank, F.S.B., for a Multi-Family Housing Rehabilitation Program Matching Grant between the City and L.V.S. Investments, Inc., for the rehabilitation of the Florence Manor Apartments, 1946 and 1956 Marseille Drive. L.V.S. Investments, Inc. had requested the Subordination Agreement as they were seeking to borrow against the value of the property to help finance another project. After the Resolution was adopted, L.V.S. Investments, Inc. informed the City that due to changes in circumstances they were no longer seeking the Subordination Agreement. L.V.S. Investments, Inc. never signed the Agreement, and therefore, the Subordination Agreement was no~ executed. Miguell ~ JtinaCuervo at C-H 8/2000 05:59 PM :mal .ested jriguez solution 99-23171 Dat;d 5/26/99 Item C7B Comm. Memo.365-99 now the drill, thanks, CMC. Forward Header Resolution 99-23171 Dated 5/26/99 Item C7B Comm. M MariaMartinez at C-H-PO 09/07/2000 8:47 AM PQJ>d ::J [:1 / e., f-1O-VI.....- Ij o~c~ The agreement for the above mentioned resolution was i__ .._. Department for the appropriate signatures. We have not received it yet. We need to complete this resolution. A copy of the executed agreement will be forwarded to the Department for their files, after we process it. Thanks for your help. , t ~), \ . tt) I,t I}J v', , I I.' \ J' \ \ ,) I \ .J .>1<;' . ,1 . ./ ,. Ct,. ( ~ ~ ." ij) \ i; lI'j \; " . l' ' ) ~ I~' liJ ,j 6 \,\. I., . ~\ I" \. J \.-" \ < '.) (I, ~ t l '. . I. " .'~ qq- ~f~\I\ ;~~~oJd .\~ ap\J\icov4- de;deJ I("'p} ..to 6l+br \rk> lJ~~ QQv.. \~ ~~ a.~0CC)\. ('(\('3lX'~ 1'""' SUBORDINATION AGREEMENT nus AGREEMENT made this _ day of , 1999, by the City of Miami Bea,ch, a Florida municipal corporation, (City), and L.V.S. Investments, Inc., a Florida Corporation, (Borrower) in favor ofCitibank, F.S.B. (Lender). WITNESSETH WHEREAS, the City and the Borrower entered into that certain Multi-Family Housing Rehabilitation Program Matching Grant Agreement, dated April 19 , 1996, recorded on May 6, 1996, in Official Record Book 17716, at Page 1258, et seq., in the public records of Miami-Dade County, Florida, (Agreement), which Agreement creates certain rights and obligations in connection with the real property described hereinafter (Property); and WHEREAS, the Agreement allocated certain matching grant funds to the Borrower, for the rehabilitation of the Property; and WHEREAS, Borrower has requested a loan from Citibank, in the original principal sum of $375,000.00, to be evidenced by a Note and secured by a Mortgage and Security Agreement in favor of Lender, encumbering the Property (collectively referred to as "Mortgage"); and WHEREAS, Lender will not make the requested loan unless it is secured by a first mortgage upon the Property, and unless the City is willing to subordinate the Agreement to the Mortgage. NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties hereto agree as follows: 1. The Agreement is now and forever hereafter made subordinate and inferior to the Mortgage and to all debt evidenced. or secured thereby including principal, interest, costs and expenses, and to any and all extensions, modifications, amendments, enlargements or renewals thereof or future advances made thereunder. Further, the terms of the Agreement and all rights and remedies of the City pursuant to the Agreement, including, but not limited to, the right to convert the funds to a loan, and declare the same immediately due and payable pursuant to Section 9 of the Agreement, are hereby expressly subordinate to the terms of the Mortgage and the rights of the Lender under the Mortgage. The City acknowledges and agrees that the Mortgage is a first mortgage lien on the property, superior to any lien rights the City may have under the Agreement. 2. The City will not take any of the following actions without providing Lender with fifteen (15) days prior written notice of its intent to do so: a. declare a default under the Agreement b. convert the funds into a loan and declare the converted loan due and payable, or take any action to foreclose or realize upon any collateral therefor, including, without limitation, the enforcement of the converted loan. 3. The Property referred to herein is described as follows: Lots 6 and 7, Block 35 of Miami View, Section No.3, Isle of , ,Normandy, according to the Plat thereof, as recorded in Plat Book 40, page 33, ofthe Public Records of Miami-Dade County, Florida. 4. In the event of partial or total destruction of the Property which results in the payment of insurance proceeds, or in the event of a condemnation or similar proceeding which results in the payment of an award, the proceeds or award shall be applied in accordance with the relevant provisions of the Mortgage. 5. All notices hereunder shall be in writing and shall be deemed to have been sufficiently given or served for all purposes when presented personally or three (3) days after mailing when sent by registered of certified mail, return receipt requested, postage prepaid, or the next day when sent by overnight courier, to the following addresses, or at such other address of which a party shall have notified the party giving such notice in writing: The City: City of Miami Beach Community and Economic Development Department 1700 Convention Center Drive Miami Beach, FL 33139 The Borrower: L.V.S. Investments, Inc. 5709 N.W. 158 Street Miami Lakes, FL 33014 The Lender: Citibank, F.S.B. 8750 Dora! Boulevard Miami, FL 33178 6. This Agreement shall be binding upon Borrower, Lender and the City and their respective successors, heirs and assigns and shall inure to the benefit of the parties. Attest: Signature Page: By: . . City of Miami Beach Neisen O. Kasdin, Mayor Attest: Robert Parcher, City Clerk L.V.S. Investments, Inc. (a Florida Corporation) By: Lewis V. Swezy, President Witnesses: Secretary APPROVED /4S TO FORM & LANGUAGE & FOR EXECUllON ~ Cdy~ Y/u!/t? Oat. Citibank, F .S.B. (print or type name and title) . .. STATE OF FLORIDA } }ss: COUNTY OF MIAMI-DADE} I hereby certify that on this day before me, an officer duly qualified to take acknowledgements, personally appeared , as Mayor of the City of Miami Beach. Who is personally known to me, and did not take an oath. Witness my hand and official seal this _ day of , 1999. NOTARY PUBLIC, State of Florida My Commission Expires: Commission NO STATE OF FLORiDA } }ss: COUNTY OF MIAMI-DADE} I hereby certify that on this day before me, an officer duly qualified to take acknowledgements, personally appeared , as President of L.V.S. Investments, Inc. Who is personally known to me, and did not take an oath. Witness my hand and official seal this _ day of , 1999. Commission NO NOTARY PUBLIC, State of Florida My Commission Expires: STATE OF FLORIDA } }ss: COUNTY OF MIAMI-DADE} I hereby certify that on this day before me, an officer duly qualified to take acknowledgements, personally appeared , as of Citibank, F .S.B. Who is personally known to me, and did not take an oath. Witness my hand and official seal this _ day of , 1999. Commission N' NOTARY PUBLIC, State of Florida My Commission Expires: