187-94 RDA
RESOLUTION NUMBER:
187-94
A RESOLUTION OF THE CHAIRMAN AND MEMBERS OF
THE MIAMI BEACH REDEVELOPMENT AGENCY
("AGENCY") RE-AFFIRMING THE AGENCY I S SUPPORT
FOR AN AFRICAN-AMERICAN HOTEL PROJECT ON MIAMI
BEACH IN THE AMOUNT OF TEN MILLION DOLLARS
($10,000,000)
WHEREAS, the City of Miami Beach and the Redevelopment Agency
initiated a hotel RFP process on December 10, 1993, which
specifically set aside $10 million for an African-American hotel
development opportunity; and
WHEREAS, this commitment was a critical factor in a major
economic development initiative designed to increase African-
American participation in South Florida1s tourism industry; and
WHEREAS, on September 15, 1994, the City of Miami Beach
submitted an Economic Development Initiative (EDI) grant
application in the amount of $1.9 million to assist in the
financing and deyelopment of the HCF hotel development proposal;
and
WHEREAS, the City of Miami Beach was notified on October 5,
1994, by the u.S. Department of Housing and Urban Development (HUD)
that the City's application for an Economic Development Initiative
(EDI) grant was awarded in the amount of $1 million; and
WHEREAS, receipt of the EDI funds was contingent upon the
City submitting a formal application under the Section 108 Loan
Guarantee Program; and
WHEREAS, the original EDI application submitted to HUD was
designed to mitigate the risk to the City's Community Development
Block Grant (CDBG) funds by establishing a debt service reserve
during the 20-year loan repayment period particularly for the HCF
proposal; and
Page Two
WHEREAS, the City's application indicated that the financing
necessary for the two hotels was $12.67 million with $10 million
earmarked for the acquisition of the Royal Palm and Shorecrest
Hotels (the proposed site of the HCF hotel project), and $2.67
million for the Loews hotel project; and
WHEREAS, subsequent to the award of the EDI grant, it was
discovered that between the Royal Palm and Shorecrest Hotels, the
relocation liability under the Uniform Relocation Act could exceed
the $1 million potential grant; and
WHEREAS,
discuss the
applicability
the City Administration met with HUD officials to
various requirements, including the potential
of the Uniform Relocation Act (URA); and
WHEREAS, U.S. HUD was asked if the City could amend the EDI
grant and subsequent Section 108 Loan application to shift these
funds exclusively to the Loews project, or as an alternative, U.S.
HUD could re-evaluate the transient nature of the guests in the
Royal Palm and Shorecrest Hotels pursuant to the URA; and
WHEREAS, this situation will require an amendment to the
City IS EDI Grant/Section 108 Loan application reflecting this
change in circumstances and the City's desire to infuse additional
federal funds into the Loews hotel project and local funds into the
HCF project; and
WHEREAS, U.S. HUD has requested that the City of Miami Beach
and the Redevelopment Agency, by official Resolution, reaffirm
their commitment to assist an African-American owned convention-
hotel opportunity with local funds in lieu of these federal funds;
and
WHEREAS, based on verbal representation of U.S. HUD
representatives, the City Administration was of the opinion that
the City could still borrow a substantial portion of the $12.67
million Section 108 Loan for the Loews project, with the
understanding that the City would receive an EDI grant for the
Loews project in the amount of $400,000; and
WHEREAS, the representatives of U.S. HUD indicated that the
City of Miami Beach can submit an amended EDI grant application in
the amount of $600,000 for another eligible economic development
project in lieu of the HCF project, with the understanding that the
remaining portion of the $12.67 million Section 108 loan not used
for the Loews project would be available for the substitute
project.
Page Three
NOW, THEREFORE BE IT DULY RESOLVED BY THE CHAIRMAN AND MEMBERS
OF THE MIAMI BEACH REDEVELOPMENT AGENCY, that the Redevelopment
AGency reaffirms its commitment to assist an African-American owned
convention-quality hotel development project in Miami Beach in an
amount up to $10 million.
<:''' . II
PASSED and ADOPTED this "Z{ day: co-wJl'~, 1994.
ATTEST:
~~f~
',> '.! SECRETARY
Q
Miami Beach
Redevelopment Agency
1700 Convention Center Drive
Miami Beach, Florida 33139
Telephone: (305) 673-7193
Fax: (305) 673-7772
REDEVELOPMENT AGENCY MEMORANDUM NO. 94 - 60
December 21, 1994
To: Chairman and Members of the Board
of the Redevelopment Agency
From: Roger M. Carlton fCA...o.'A In (~~
Executive Direct;r--Z)\
SUBJECT: UPDATE ON SECTION 108 LOAN PROGRAM APPLICATION
At the December 7, 1994, meeting of the Redevelopment Agency Board, an
update was provided regarding the status of the City's application for
funds under the Section 108 Loan Program. The City is proposing to shift
the Section 108 Loan funds and the reduced Economic Development
Initiative (EDI) funds in the amount of $400,000 exclusively to the Loews
project; and, the HCF component will still go forward with the other
funds. The City must evidence to HUD via a formally adopted Resolution,
that the City is committed to continuing with the African-American Hotel
venture as originally described in the EDI grant application. A
Resolution to this effect will be presented to the Redevelopment Agency
Board at the January 4, 1995, meeting.
Subsequent to the December 7, 1994, Agency meeting, the City received
notification from U.S. HUD that the complete Section 108 Loan application
and an amended EDI grant application must be submitted to the U. S.
Department of Housing and Urban Development (HUD) by January 9, 1995.
It is our understanding that HUD would like the City to submit a revised
EDI grant application for the full $1 million that was requested.
However, clarification from HUD has not yet been received with regard to
the City's ability to undertake another economic development activity
that would receive the additional $600,000 in grant funds. A list of
potential projects for assistance has been submitted to HUD for review.
The projects must be already identified, must be low/moderate income job
creating ventures, and must significantly leverage other funds.
S()UTIi V()I~
~edevelC)pment Vlstrlct
t:1IT t:~~l?
l2edevelroment ()I~ct
AGENDA ITEM 2- I
DOCEMBER 21, 1994
1
Three projects have been proposed to U.S. HUD:
..
I. Renovation of a 54-room hotel located in the Mid-Beach area
and owned by an African-American. The current (pre-
rehabilitation) value is estimated at $1 million. The project
will include extensive rehabilitation including furnishings,
parking on the lower level, and a full-service restaurant on
the ground floor to be operated by an African-American with 18
years experience in operating a restaurant in the South Beach
area. The estimated value (after rehabilitation) is
approximately $2.5 to $3 million. The property is vacant;
hence, there is no relocation. The project will require only
minor environmental clean-up. At least 20-30 jobs will be
created by the hotel and restaurant activities.
II. Development of a new supermarket adjacent to the Convention
Center redevelopment area. The City is in the process of
acquiring the site. (Cost of acquisition is $1.8 million.)
An RFP is being finalized with proposals tentatively due in
March, 1995. At least 100 jobs will be created. Total
development costs, including land, are estimated at $10
million.
III. Development of a ten-screen multiplex theater/retail complex
on Lincoln Road. The developer (includes minority ownership)
was selected through an RFP process. We are currently in the
negotiations stage. There is some minority ownership in the
project. Project cost is estimated at $18.1 million.
Approximately 100 jobs will be created.
In the original EDI grant application, the proposed leverage for
both hotel projects was 10:1. However, the first alternative
project ("1" above) will not yield the same direct leverage. HUD
had been asked if the projects must be viewed separately and/or if
we can take into account the financial impact this alternative
project will have on the area.
The EDI grant and
when we find out
acceptable to HUD.
Section 108 Loan applications must be revised
which of the above described proj ects are
Although the Administration intended to submit the completed
Section 108 Loan application to the Agency Board for review at this
meeting, HOD's delays in responding to us require that we defer
submittal to the Agency Board for approval to the January 4, 1995,
meeting.
RMC: jph
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