94-21443 ResoRESOLUTION NUMBER: 94-21443
A RESOLUTION OF THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, RE-
AFFIRMING THE CITY'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 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 Florida's 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 development 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
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
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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, the City Administration met with HUD officials to
discuss the various requirements, including the potential
applicability 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 evaluate the transient nature of the guests in the Royal
Palm and Shorecrest Hotels under the definition in the URA; and
WHEREAS, this situation will require an amendment to the
City's 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,
by official Resolution, reaffirm its 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 have further
represented 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.
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NOW, THEREFORE BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the City of
Miami Beach reaffirms its commitment to assist an African -American
owned convention -quality hotel development project in Miami Beach
in an amount up to $10 million.
PASSED and ADOPTED this
ATTEST:
CITY CLERK
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
COMMISSION. MEMORANDUM NO
TO: Mayor Seymour Gelber and
Members of the City Commission
FROM: Roger M. Carlton.
City Manager
DATE: December 21, 1994
SUBJECT: UPDATE ON SECTION 108 LOAN PROGRAM APPLICATION
At the December 7, 1994, Commission Meeting, 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
presentefto the Commission at the January 4, 1995, meeting.
Subsequent to the December 7, 1994, Commission 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.
Three projects have been proposed to U.S. HUD:
AGENDA ITEM �::�
DATE I D "a ( -9 7
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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
negeE-sations 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 ("I" 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 Section 108 Loan applications must be revised
when we find out which of the above described projects are
acceptable to HUD.
Although the Administration intended to submit the completed
Section 108 Loan application to the City Commission for review at
this meeting, HUD's delays in responding to us require that we
defer submittal to the City Commission for approval to the January
4, 1995, meeting.
RMC : j ph
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