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Resolution 2024-32949 RESOLUTION NO. 2024-32949 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING AND/OR AUTHORIZING THE CITY MANAGER TO TAKE THE FOLLOWING ACTIONS: (1) RECAPTURE $58,433.78 OF HOME INVESTMENT PARTNERSHIP (HOME) FUNDS, PREVIOUSLY ALLOCATED TO THE LOTTIE APARTMENTS REHABILITATION PROJECT; (2) RECAPTURE $13,441.58 OF HOME FUNDS, PREVIOUSLY ALLOCATED TO THE CORALS APARTMENTS REHABILITATION PROJECT; (3) RECAPTURE $29,395.70 OF COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDS, PREVIOUSLY ALLOCATED TO THE NEPTUNE APARTMENTS REHABILITATION PROJECT; (4) RECAPTURE $10,700.20 OF CDBG FUNDS, PREVIOUSLY ALLOCATED TO THE CORALS APARTMENTS REHABILITATION PROJECT; (5) RECAPTURE $9,598.19 OF CDBG FUNDS, PREVIOUSLY ALLOCATED TO PUBLIC SERVICES; AND (6) REALLOCATE SAID FUNDS TO THE ACQUISITION OF A MULTI-FAMILY PROPERTY TO BE USED AS AFFORDABLE HOUSING WITHIN THE CITY; (7) TRANSMIT TO U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ("HUD") A SUBSTANTIAL AMENDMENT TO THE HUD FY 2023 ACTION PLAN, SAID AMENDMENT REFLECTING THE ALLOCATION OF THE REALLOCATED FUNDS; (8) IDENTIFY A MULTIFAMILY PROPERTY WITHIN THE CITY OF MIAMI BEACH BOUNDARIES FOR USE AS AFFORDABLE HOUSING; AND (9) NEGOTIATE AND EXECUTE A PURCHASE AGREEMENT AND OTHER PURCHASE CONTRACT DOCUMENTS FOR THE PROPERTY, FOR A TOTAL SUM NOT TO EXCEED $1,662,415.00 (INCLUSIVE OF CLOSING COSTS), TO BE FUNDED FROM COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) AND HOME INVESTMENT PARTNERSHIP (HOME) FUNDS, PROVIDED THAT SAID PURCHASE AGREEMENT IS CONTINGENT UPON APPROVAL BY THE CITY COMMISSION. WHEREAS, the City of Miami Beach (the "City") is a U.S. Department of Housing and Urban Development (HUD) designated entitlement city as determined by the decennial census information on population growth lag, age of housing stock, and poverty; and WHEREAS, as an entitlement city, Miami Beach automatically qualifies for an annual allocation of federal funding under HUD's grant programs including Community Development Block Grant(CDBG) and HOME Investments Partnership (HOME) programs; and WHEREAS, the timely expenditure of CDBG and HOME funds is crucial, with HUD imposing timeliness requirements to ensure compliance with federal regulations; and WHEREAS, from time to time, it may be necessary for the City to process a "Substantial Amendment" to the Five-Year Consolidated Plan and the annual Action Plan to allow for the funding of new activities, modification of existing activities, or other program administrative actions; and WHEREAS, pursuant to 24 CFR §91.505 (a), the City is required by HUD to identify the criteria to be used in determining if a proposed action will be considered a "Substantial Amendment," as follows: • 1. A change in allocation priorities or a change in the method of distributing funds; 2. Funding an activity using funds from any program covered by the Plan (including program income) not previously described in the One Year Action Plan; or 3. A change in the purpose, scope, location, or beneficiaries of an activity; and WHEREAS, the City Commission previously allocated funds for property acquisition through Resolution No. 2022-32188, allocating $636,183.67 in FY 2022 CDBG funds, and Resolution No. 2023-32524 on March 27, 2023, allocating an additional $296,795.88 in HOME funds; and WHEREAS, previous attempts to acquire suitable properties utilizing CDBG and HOME funds were unsuccessful due to various circumstances, including the unavailability of multifamily properties within budget constraints and concerns regarding potential special assessments associated with condominium units; and WHEREAS, on June 28, 2023 the City adopted Resolution No. 2023-32637, allocating an additional $607,866.00 in FY 2023 CDBG funds to the acquisition or rehabilitation of a property; and WHEREAS, the Administration has reached substantial completion for the rehabilitation at three (3) of its affordable housing properties: Lottie Apartments, Corals Apartments and Neptune Apartments and no additional expenses are anticipated for the completion of these projects and there is a remaining balance; and WHEREAS, additionally, there are unexpended CDBG public services funds, resulting in a combined total of $121,569.45 in unexpended CDBG and HOME funds, Exhibit A provides a detailed breakdown of this funding; and WHEREAS, to maximize resources, the recaptured HOME and CDBG funds will be combined with the funds currently allocated to the acquisition of a property for a total of $1,662,415.00 to increase affordable housing units and ensure timely and compliant expenditure of HUD funds; and WHEREAS, a Substantial Amendment would be required in order to incorporate the recaptured funds into the HUD FY2023 Action Plan; and WHEREAS, any proposed amendment considered a Substantial Amendment requires approval by the City Commission; and WHEREAS, in accordance with 24 CFR §91.505 (b), a Substantial Amendment requires Citizen Participation; and WHEREAS, as part of the citizen participation process, the City will schedule a public hearing for March 19, 2024 and publish a thirty (30) day public comment period, from March 4, 2024 to April 2, 2024, for the proposed Substantial Amendment to the FY 2023 annual Action Plan; and WHEREAS, the City's next CDBG timely performance test will be August 2, 2024, and as such, the City must expend $532,651.00 to meet the 1.5 ratio by July 27, 2024, to comply with HUD rules; and WHEREAS, failure to do so could result in being placed on a HUD performance improvement plan or facing recapture of unspent funds; and WHEREAS, completing this acquisition activity will ensure the City will comply with the CDBG timeliness requirements for the 2023 program year while increasing affordable housing in the City; and WHEREAS, the Administration recommends approval of the amendment to the Action Plan, recapturing and reallocating CDBG and HOME funds to the acquisition of a property within the City for use as affordable housing to ensure the timely and compliant expenditure of HUD funds; and WHEREAS, as the first step in the purchase process, the Administration recommends authorizing the City.Manager to identify and negotiate, and, if successful, execute a purchase agreement and other related purchase documents for the property, including payment of an initial deposit, in the amount of$1,000, provided that the purchase agreement is contingent upon the approval, by the City Commission, of the transaction. NOW, THEREFORE, BE IT 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 City Manager to take the following actions: (1) recapture $58,433.78 of HOME funds, previously allocated to the Lottie Apartments Rehabilitation Project; (2) recapture $13,441.58 of HOME funds, previously allocated to the Corals Apartments Rehabilitation Project; (3) recapture $29,395.70 of CDBG funds, previously allocated to the Neptune Apartments Rehabilitation Project; (4) recapture $10,700.20 of CDBG funds, previously allocated to the Corals Apartments Rehabilitation Project; (5) recapture $9,598.19 of CDBG funds, previously allocated to Public Services; and (6) reallocate said funds to the acquisition of a multi-family property to be used as affordable housing within the City; (7) transmit to U.S. Department of Housing and Urban Development ("HUD") a Substantial Amendment to the HUD FY 2023 Action Plan, said amendment reflecting the allocation of the reallocated funds; (8) identify a multifamily property within the City of Miami Beach boundaries for use as affordable housing; and (9) negotiate and execute a purchase agreement and other .purchase contract documents for the property, for a total sum not to exceed $1,662,415.00 (inclusive of closing costs), to be funded from Community Development Block Grant (CDBG) and Home Investment Partnership (HOME) funds, provided that said purchase agreement is contingent upon approval by the City Commission. ,,,, Passed and adopted this (.3 day of /icl�rck , 2024. ATTEST: Steven Meiner, Mayor -77d MAR 1 5 2024 APPROVED AS TO Rafael E. Granado, City Clerk ��8 ll„, FORM & LANGUAGE ••••6 , & FOR EXECUTION \ • INtOAp ORATE r'Y a-Li N;filao Date���= ..City Attorney 3 . Exhibit A CDBG and HOME Program Recapture and Reallocations Proposed Activity Funding Amount Original Activity Source CDBG FY 2017 $1,422.72 Neptune Apartments CDBG FY 2018 $13,420.00 Rehabilitation CDBG FY 2020 $14,552.97 Affordable Housing CDBG FY 2019 $10,700.20 Corals Apartments Rehabilitation and/or Acquisition HOME FY 2019 $13,441.58 Rehabilitation HOME FY 2016 $25,458.41 Lottie Apartments HOME FY 2018 $32,975.37 Rehabilitation CDBG FY 2019 $9,598.19 Public Services Total $121,569.45 Resolutions-C7 H MIAMIBEACH COMMISSION MEMORANDUM TO: Honorable Mayor and Members of the City Commission FROM: Alina T. Hudak, City Manager DATE: March 13, 2024 SUBJECT:A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING AND/OR AUTHORIZING THE CITY MANAGER TO TAKE THE FOLLOWING ACTIONS: (1) RECAPTURE $58,433.78 OF HOME INVESTMENT PARTNERSHIP (HOME) FUNDS, PREVIOUSLY ALLOCATED TO THE LOTTIE APARTMENTS REHABILITATION PROJECT; (2) RECAPTURE $13,441.58 OF HOME FUNDS, PREVIOUSLY ALLOCATED TO THE CORALS APARTMENTS REHABILITATION PROJECT: (3) RECAPTURE $29,395.70 OF COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDS, PREVIOUSLY ALLOCATED TO THE NEPTUNE APARTMENTS REHABILITATION PROJECT; (4) RECAPTURE $10,700.20 OF CDBG FUNDS, PREVIOUSLY ALLOCATED TO THE CORALS APARTMENTS REHABILITATION PROJECT; (5) RECAPTURE $9,598.19 OF CDBG FUNDS, PREVIOUSLY ALLOCATED TO PUBLIC SERVICES;AND (6) REALLOCATE SAID FUNDS TO THE ACQUISITION OF A MULTI-FAMILY PROPERTY TO BE USED AS AFFORDABLE HOUSING WITHIN THE CITY; (7) TRANSMIT TO U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ("HUD") A SUBSTANTIAL AMENDMENT TO THE HUD FY 2023 ACTION PLAN; SAID AMENDMENT REFLECTING THE ALLOCATION OF THE REALLOCATED FUNDS; (8) IDENTIFY A MULTIFAMILY PROPERTY WITHIN THE CITY OF MIAMI BEACH BOUNDARIES FOR USE AS AFFORDABLE HOUSING; AND (9) NEGOTIATE AND EXECUTE A PURCHASE AGREEMENT AND OTHER PURCHASE CONTRACT DOCUMENTS FOR THE PROPERTY, FOR A TOTAL SUM NOT TO EXCEED $1,662,415.00 (INCLUSIVE OF CLOSING COSTS), TO BE FUNDED FROM COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) AND HOME INVESTMENT PARTNERSHIP (HOME) FUNDS, PROVIDED THAT SAID PURCHASE AGREEMENT IS CONTINGENT UPON APPROVAL BY THE CITY COMMISSION. RECOMMENDATION The Administration recommends approving the Resolution. Page 259 of 1070 BACKGROUND/HISTORY The City of Miami Beach (the "City") is a U.S. Department of Housing and Urban Development (HUD) designated entitlement city as determined by the decennial census information on population growth lag, over-crowding, age of housing stock, and poverty. The City of Miami Beach has been an entitlement community since 1975. As an entitlement community, the City automatically qualifies for an annual allocation of federal funding under HUD's grant programs including the Community Development Block Grant (CDBG) Program and the HOME Investment Partnership (HOME) Program, created in 1992 to provide funding specifically for affordable housing. HUD requires each entitlement community to submit its One-Year Action Plan, on an annual basis, describing how it will utilize funding and resources to address priority needs identified in the City's Consolidated Plan. The One-Year Action Plan is a component of the Five-Year Consolidated Plan required to be filed with HUD. From time to time, it may be necessary for the City to process a"substantial amendment" to the Five-Year Consolidated Plan and the One-Year Action Plan to allow for the funding of new activities, modification of existing activities, or other program administrative actions. The City is required by HUD, per Title 24 Code of Federal Regulation (CFR) 91.505 (b), to identify the criteria to be used in determining if a proposed action will be considered a "substantial amendment" as follows: 1. A change in allocation priorities or a change in the method of distributing funds; 2. Funding an activity using funds from any program covered by the Plan (including program income)not previously described in the One-YearAction Plan; or 3. A change in the purpose, scope, location, or beneficiaries of an activity. Any proposed amendment considered a substantial amendment requires approval by the City Commission. Furthermore, in accordance with Citizen Participation requirements, a thirty (30)- day public notice and public hearing is required to'provide the opportunity for the public to review and comment on the proposed substantial amendment. The City will consider all comments or views received from the public concerning proposed substantial amendments in accordance with HUD [24 CFR 91.105 (c)(3)]. A summary of these comments shall be attached to the substantial amendment submitted to HUD. ANALYSIS The CDBG and HOME Program have timeliness requirements regarding the expenditure of funds. HOME funds must be committed to a project within two (2)years of the City's receipt and expended within five (5) years. The Action Plan is monitored throughout the year to ensure compliance with federal regulations and progress towards the National Objective, which stipulates that HOME-funded activities must create housing units that benefit low- and moderate-income persons who earn at or below eighty percent (80%) of the Area Median Income (AMU. Cities that receive entitlement funds from the CDBG program must use their funds in a timely manner. To determine whether entitlement grantees meet timely performance, HUD calculates the ratio of unexpended funds to the annual grant award 60 days before the end of the program year. On June 22, 2022 the City adopted Resolution No. 2022-32188, allocating $636,183.67 in FY 2022 CDBG funds to the acquisition of a property. The City Commission passed Resolution Page 260 of 1070 No. 2023-32524, allocating an additional $296,795.88 in HOME funds, bringing the total to $932,979.55. On April 28, 2023, the Mayor and City Commission approved the purchase of a duplex property at 971 79 Terrace, Miami Beach, FL, through Resolution No. 2023-32574. Unfortunately, on May 11, 2023, the seller's agent advised that the seller accepted another offer with more favorable terms for the seller. With no other multifamily properties within the budget, the Administration shifted focus to condominium units. On June 28, 2023, the Mayor and City Commission authorized a condominium unit purchase through Resolution No. 2023-32662. However, due to potential significant special assessments, it was determined that it would not be in the City's best interest to acquire the property. On June 28, 2023, the Mayor and City Commission adopted Resolution No. 2023-32637, allocating an additional $607,866.00 in FY 2023 CDBG funds to the acquisition or rehabilitation of a property. The Administration has reached substantial completion for the rehabilitation at three (3) of its affordable housing properties: Lottie Apartments, Corals Apartments and Neptune Apartments. No additional expenses are anticipated for the completion of these projects and there is a remaining balance.Additionally, there are unexpended CDBG public services funds, resulting in a combined total of$121,569.45 in unexpended CDBG and HOME funds. Exhibit A provides a detailed breakdown of this funding. To maximize resources, the recaptured HOME and CDBG funds will be combined with the funds currently allocated to the acquisition of a property for a total of $1,662,415.00 to increase affordable housing units and ensure timely and compliant expenditure of HUD funds. Currently, there are multifamily properties available within the allocated budget. The proposed allocated funding would be inclusive of closing costs, relocation, acquisition and rehabilitation if needed. In accordance with the Citizen Participation Plan, the City advertised a Notice of Public hearing and a 30-day Comment Period (March 4, 2024—April 2, 2024). The Public Hearing will be held on March 19, 2024. Public comments received will be included in the amended Action Plan to be submitted to HUD for final review and approval. The Administration must complete an environmental review process required by HUD for all funded projects. The environmental review must be completed, with an approved request to release funds from HUD before closing, to ensure that the proposed project does not negatively impact the surrounding environment and that the property site will not have an adverse environmental or health effect on end users, such as future tenants. The purchase contract will include language delineating this requirement as a contingency. The Administration will have to follow Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA) requirements. The URA provides important protections and assistance for people affected by acquiring, rehabilitating, or demolishing real property for federally-funded projects. Congress enacted this law to ensure that people whose real property is acquired or who move as a direct result of projects receiving federal funds are treated fairly and equitably and receive assistance in moving from the property they occupy. This means that the City would also have to conduct assessments for the tenant roster to determine whether they meet income guidelines and program eligibility. Page 261 of 1070 The first step in the purchase process will be to identify a property and negotiate terms. Upon successful negotiation, a purchase contract and relevant documents will be executed, contingent on the approval by the City Commission. In order to secure the purchase contract while mitigating the City's risk, an initial deposit in the amount of$ 1,000 will be made. The City's next CDBG timely performance test is scheduled on August 2, 2024. As such, the City must expend $532,651.00 to meet the 1.5 ratio by July 27, 2024, and comply with HUD rules. Failure to do so could result in being placed on a HUD performance improvement plan or facing recapture of unspent funds. Several active projects are utilizing CDBG funds. However, these are either small public service projects or multi-family housing rehabilitation projects which move slowly. Completing this acquisition activity will ensure the City will comply with the CDBG timeliness requirements for the 2023 program year while increasing affordable housing in the City. To meet the timely performance test, the Administration proposes that the City close on a property with sufficient time to complete the fiscal draw and submit it to HUD by July 27, 2024. LOBBYIST DISCLOSURE In accordance with Resolution No. 2023-32857, adopted by the City Commission on December 13, 2023, the following information has been provided by the Administration as it relates to the subject resolution: 1. Was the Agenda Item initially requested by a lobbyist which, as defined in Code Sec. 2-481, includes a principal engaged in lobbying? No 2. If so, specify name of lobbyist(s)and principal(s): N/A SUPPORTING SURVEY DATA The Mayor and City Commission identified the need for workforce and affordable housing as a key objective in the City's 2019 Strategic Plan Through the Lens of Resilience. The City's 2040 Comprehensive Plan prioritizes affordable housing, with the express goal "to encourage redevelopment that provides workforce and affordable housing"within the City." FINANCIAL INFORMATION All expenditures are tied to CDBG and HOME funds. CONCLUSION The Administration recommends approval of the amendment to the Action Plan, recapturing and reallocating CDBG and HOME funds to the acquisition of a property within the City for use as affordable housing to ensure the timely and compliant expenditure of HUD funds. Applicable Area Not Applicable Is this a "Residents Right Does this item utilize G.O. to Know" item. pursuant to Bond Funds? City Code Section 2-14? No No Strategic Connection Mobility-Support affordable, compatible workforce housing. Page 262 of 1070 Legislative Tracking Housing and Community Services ATTACHMENTS: Description ❑ Exhibit A ❑ Resolution Page 263 of 1070 Exhibit A CDBG and HOME Program Recapture and Reallocations Proposed Activity Funding Source Amount Original Activity CDBG FY 2017 $1,422.72 CDBG FY 2018 $13,420.00 Neptune Apartments Rehabilitation CDBG FY 2020 $14,552.97 Affordable Housing CDBG FY 2019 $10,700.20 Rehabilitation and/or Corals Apartments Rehabilitation Acquisition HOME FY 2019 $13,441.58 HOME FY 2016 $25,458.41 Lottie Apartments Rehabilitation HOME FY 2018 $32,975.37 CDBG FY 2019 $9,598.19 Public Services Total $121,569.44 Page 264 of 1070 Exhibit A CDBG and HOME Program Recapture and Reallocations Proposed Activity Funding Amount Original Activity Source CDBG FY 2017 $1,422.72 Neptune Apartments CDBG FY 2018 $13,420.00 Rehabilitation CDBG FY 2020 $14,552.97 Affordable Housing CDBG FY 2019 $10,700.20 Corals Apartments Rehabilitation and/or Acquisition HOME FY 2019 $13,441.58 Rehabilitation HOME FY 2016 $25,458.41 Lottie Apartments HOME FY 2018 $32,975.37 Rehabilitation CDBG FY 2019 $9,598.19 Public Services Total $121,569.45 Page 268 of 1070