C7I-Execute Amendment 5 To Agmt w- DEO And Amendment 9 To Agmt w- MBCDC'--'--'1Vl1Vll.).)ll....ll 'i II LIV\ vUIVliV\~" I
Condensed Title:
A Resolution Authorizing: 1) An Amendment to the NSP1 Agreement between the City and the State of Florida Department of Economic
Opportunity (DEO) and the related Agreement between the City and Miami Beach Community Development Corporation (MBCDC) to extend
the expiration date of both agreements to August 15, 2013; 2) to authorize the City Manager to execute such amendments and any
subsequently approved extensions by US HUD or DEO.
Key Intended Outcome Supported:
Increase access to workforce or affordable housing.
Supporting Data (Surveys, Environmental Scan, etc.): Based on the Strategic Plan 2011 Update, the number of affordable housing units is
4,743.
Issue:
Shall the City approve amendments extending the expiration dates of the NSP1-related contracts with the State DEO and MBCDC from
Februa 15, 2013, to Au ust 15, 2013, in order to continue monitorin of the NSP 1 activities, lease-u vacant units, and close-out the rant.
Item Summary/Recommendation:
The U.S. Housing and Economic Recovery Act of 2008 created the Neighborhood Stabilization Program (NSP1}, which directed HUD to
allocate $3.93 billion to states and units of local government as emergency assistance for the purchase and redevelopment of abandoned
and foreclosed homes. Miami Beach applied for NSP1 funds for the purchase and rehabilitation of one or more multi-family buildings to be
kept as rental properties to benefit income-qualified households in accordance with the NSP1 regulations and was awarded a total of
$9,305,268 through an initial allocation plus two subsequent allocations. The State DEO is the pass-through entity handling HUD's NSP1
allocation to the City of Miami Beach. The initial allocation to the City in the amount of $2,549,441 was formula-based. The second and third
allocations in the amounts of $4,755,717 and $2,000,000, respectively, were awarded to Miami Beach after the original recipients, Apopka
and Clearwater, failed to meet the program's benchmarks, while the City of Miami Beach consistently demonstrated above-average
performance.
The City entered into a grant agreement with the State, and after conducting a procurement process for award of the first allocation, entered
into a related agreement with MBCDC. Both Agreements were subsequently amended to accept and govern the second and third allocations
of funding. Both Agreements currently expire on February 15, 2013. From each of the three allocations, totaling $9,305,268, the City was
allowed to use a maximum of 6.8% for administrative expenses. Therefore, a total of $632,758 was allocated for administration expenses and
$8,672,510 for NSP1 project development. Three foreclosed buildings were acquired by MBCDC pursuant to the NSP1 guidelines and they
are all substantially complete. The Madeleine, a 16-unit building located at 7871 Crespi Blvd., received a CO on October 11, 2012; The
Neptune, a 35-unit building located at 1632 Meridian Avenue, received a CO on November 15, 2012; and The Lottie a nine-unit building
located at 530 75 Street, is expected to receive a C.O. within the next week. To date, 39 of the 60 units are occupied.
Since the NSP1 grant's agreements were scheduled to expire on February 15, 2013, the Administration did not anticipate expending any
NSP1 administrative funds after February 15, 2013. Instead, general funds were budgeted for administrative expenses for the continued
monitoring and close-out of the grant. However, the State DEO has now asked the City to extend the time of the agreements to comply with
NPS1 close-out instructions because the City, like 75% of the other entitlement communities in Florida, have not yet met the HUD National
Objective, which is to have 100% occupancy of the NSP1-funded homes. Therefore, the Administration recommends extension of both
contracts, which will enable the City to continue to expend available NSP1 grant administrative funds until the new expiration date of the
contracts. Currently, the grant's administrative expenses are averaging $11 ,882 per month. Therefore, an additional $71,292 will be
available over the proposed additional six month term. Concurrently, MBCDC will be provided additional time to achieve 100% occupancy of
the NSP1-funded homes.
Furthermore, it is recommended that the City Manager be authorized to execute any subsequent amendments related to extension of time.
Advisory Board Recommendation:
I N/A
Financial Information·
Source of Funds:
1
I NSP I 2
OBPI Total
Financial Impact Summary:
Cit Clerk's Office Le islative Trackin
Anna Parekh ext 7260
Sign-Offs:
MlAMIBEACH
Amount Account
208
Approved
AGENDA ITEM --=;:C;__77--I=--
DATE 2.-b-J S
lrl MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City Commission
FROM: Kathie Brooks, Acting City Manager /-?4-~ .
DATE: February 6, 2013
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING AND AUTHORIZING THE
FOLLOWING ACTIONS WITH REGARD TO THE CITY'S NEIGHBORHOOD
STABILIZATION PROGRAM 1 (NSP1) AGREEMENTS: 1) APPROVING AND
AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AMENDMENT
NUMBER 5 TO THE SUBGRANT AGREEMENT BETWEEN THE STATE OF
FLORIDA DEPARTMENT OF ECONOMIC OPPORTUNITY (DEO) AND THE
CITY, MODIFYING THE EXPIRATION DATE OF THE SUBGRANT
AGREEMENT FROM FEBRUARY 15, 2013, TO AUGUST 15, 2013; 2)
APPROVING AND AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE AMENDMENT NO. 9 TO THE NSP1 AGREEMENT BETWEEN THE
CITY AND MIAMI BEACH COMMUNITY DEVELOPMENT CORPORATION
(MBCDC) DATED JANUARY 21, 2010, MODIFYING THE EXPIRATION DATE
OF SUCH AGREEMENT FROM FEBRUARY 15, 2013 TO AUGUST 15, 2013;
AND FURTHER AUTHORIZING THE CITY MANAGER TO EXECUTE SUCH
AMENDMENTS AND ANY SUBSEQUENTLY APPROVED EXTENSIONS BY
US HUD OR DEO.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
ANALYSIS
On July 31, 2008, the United States Congress enacted the Housing and Economic Recovery Act
of 2008, thereby creating the Neighborhood Stabilization Program, which directed the Department
of Housing and Urban Development (HUD) to allocate $3.93 billion to states and units of local
government as emergency assistance for the purchase and redevelopment of abandoned and
foreclosed homes. Resolution No. 2009-27039 was adopted by the City Commission on March
18, 2009, approving the City's application for and planned use of NSP1 funds for the purchase
and rehabilitation of one or more multi-family buildings to be kept as rental properties to benefit
income-qualified households in accordance with the NSP1 regulations, with an end goal of
stabilizing neighborhoods impacted by foreclosures.
The City of Miami Beach was awarded a total of $9,305,268 in NSP1 funds through an initial
allocation plus two subsequent allocations. The State's Department of Community Affairs (DCA),
now known as the Department of Economic Opportunity (DEO), is the pass-through entity
administering HUD's NSP1 allocation to the City of Miami Beach. The initial allocation to the City
in the amount of $2,549,441 was formula-based. The second and third allocations in the
amounts of $4,755,717 and $2,000,000, respectively, were awarded to Miami Beach after the
original recipients, Apopka and Clearwater, failed to meet the program's benchmarks, while the
City of Miami Beach consistently demonstrated above-average performance.
209
NSP 1 Agreement Amendments
0210612013
Page 2 of 3
On September 9, 2009, the City approved Resolution No. 2009-27175 authorizing the execution
of the Federally-funded Subgrant Agreement with DCA ("State Agreement"). The initial allocation
was $2,549,551. After the Administration conducted a duly-noticed procurement process for
award of the first allocation, the City Commission approved on September 9, 2009, Resolution
No. 2009-27194 authorizing the execution of an Agreement with Miami Beach Community
Development Corporation to carry out the City's planned use of, and application for, NSP1 funds
("MBCDC Agreement"). The initial strategy was to fund the acquisition and rehabilitation of one
affordable housing project. MBCDC identified the 16-unit building located at 7871 Crespi Blvd.,
which was later named The Madeleine.
On February 3, 2010, the MBCDC Agreement was amended per Resolution No. 2010-27335,
which was adopted on February 3, 2010, to allow for the allocation of additional NSP1 funds
received by the City. The additional acquisition and rehabilitation funds resulting from the second
and third allocations were authorized for the acquisition and rehabilitation of The Neptune, a 35-
unit foreclosed apartment building located at 1632 Meridian Avenue; and The Lottie, a nine-unit
foreclosed apartment building which contains large apartments and is suitable for families,
located at 530 75 Street. With the additional funding, a total of 60 units were purchased to be
rehabilitated for income-eligible Miami Beach residents.
The State Agreement for the first allocation was subsequently amended to include the two
additional allocations in the amounts of $4,755,717 and $2,000,000 which were awarded on
March 24, 2010, and July 30, 2010, respectively. From each of the allocations, now totaling
$9,305,268, the City was allowed to use a maximum of 6.8% for administrative expenses.
Therefore, a total of $632,758 was allocated for administration expenses and $8,672,510 for
NSP1 project development.
The three NSP1-funded buildings are substantially complete. The Madeleine, 7871 Crespi Blvd.,
received a Certificate of Occupancy (CO) on October 11, 2012. To date, three out of 16 units are
occupied. The Neptune, 1632 Meridian Avenue, received a CO on November 15, 2012. To date,
33 out of 35 units are occupied. The Lottie, 530 75 Street, received a TCO on November 21,
2012 and is expected to receive a CO by February, 2013. To date, three out of nine units at the
Lottie are occupied.
On June 27, 2010, MBCDC placed ads in The Miami Herald, El Nuevo Herald, and in The New
Times requesting applications from eligible residents for the upcoming affordable housing rental
units. MBCDC received more than 2,000 applications, of which 1,652 were deemed eligible. On
April 19, 2011, a lottery was conducted and a waiting list was compiled for follow-up. As the
projects were completed, MBCDC staff called and notified every applicant on the list of the
available units on hand. To date, 39 out of 60 units are occupied.
The City's NSP1 grant agreements with the State DEO and with MBCDC were set to expire on
November 23, 2012. The Administration therefore budgeted general funds for administrative
expenses for the continued monitoring and close-out of the grant. Based on recommendations
from the State DEO, at that time the Administration recommended reprogramming of the
remaining unspent administrative funds to reduce the debt service at the Neptune Apartments,
which would result in a proportionate rent reduction to the upcoming tenants. The proposed plan
of the unspent administrative funds was approved by the State DEO staff. The Administration
presented an analysis of the recommended use of the unspent administrative funds to the
Finance and Citywide Projects Committee, which was approved on November 9, 2012.
On November 14, 2012 as the item was on the floor at the City Commission meeting, DEO staff
called to announce their plan to extend open contracts in six month intervals, until the National
Objective is met and close-out instructions are released by HUD. Therefore, DEO staff
recommended the City continue to expend the administrative funds as originally allocated.
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NSP 1 Agreement Amendments
0210612013
Page 3 of 3
Consequently, City staff amended the agenda item on the floor to solely request an extension of
both contracts through February 15, 2013. The request was approved per Resolution No. 2012-
28063.
To date, only 25% of the State's NSP1 grantees have met a National Objective which is to
provide affordable housing units to benefit low income residents. The State DEO has requested
the City to extend the time of the agreements to comply with NPS1 close-out instructions because
the City, like 75% of the other entitlement communities in Florida, have not reached 100%
occupancy of the NSP1-funded homes. Therefore, the Administration recommends extension of
both contracts, which will enable the City to continue to expend available NSP1 grant
administrative funds until the new expiration date of the contracts. Currently, the grant's
administrative expenses are averaging $11,882 per month. Therefore, an additional $71,292 will
be available over the proposed additional six month term. Concurrently, MBCDC will be provided
additional time to achieve 100% occupancy of the NSP 1-funded homes.
CONCLUSION
The Administration requests extensions to both the City's Agreement with the State, and the
City's Agreement with MBCDC to reflect a new expiration date of August 15, 2013, and further
recommends that the Mayor and City Commission authorize 1.) Amendment No. 5 to the
Subgrant Agreement between the State of Florida DEO and the City modifying the expiration date
of the Subgrant Agreement from February 15, 2013 to August 15, 2013; 2.) authorize
Amendment No. 8 to the related NSP1 Agreement between the City and MBCDC to extend the
expiration date the NSP1 Agreement from February 15, 2013 to August 15, 2013; and 3.)
authorize the City Manager to execute such Amendments and any subsequently approved
extensions by US HUD or DEO.
KGB/MS/AP/rs
T:\AGENDA\2013\February 6\NSP1 Extension 3-MEMO-REVISED.docx
211
RESOLUTION NO. ________ _
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING AND AUTHORIZING THE FOLLOWING
ACTIONS WITH REGARD TO THE CITY'S NEIGHBORHOOD STABILIZATION
PROGRAM 1 (NSP1) AGREEMENTS: 1) APPROVING AND AUTHORIZING THE
MAYOR AND CITY CLERK TO EXECUTE AMENDMENT NO. 5 TO THE
SUBGRANT AGREEMENT BETWEEN THE STATE OF FLORIDA DEPARTMENT
OF ECONOMIC OPPORTUNITY (DEO) AND THE CITY MODIFYING THE
EXPIRATION DATE OF THE SUBGRANT AGREEMENT FROM FEBRUARY 15,
2013, TO AUGUST 15, 2013; 2) APPROVING AND AUTHORIZING THE MAYOR
AND CITY CLERK TO EXECUTE AMENDMENT NO. 9 TO THE NSP1
AGREEMENT BETWEEN THE CITY AND MIAMI BEACH COMMUNITY
DEVELOPMENT CORPORATION (MBCDC), DATED JANUARY 21, 2010,
MODIFYING THE EXPIRATION DATE OF SUCH AGREEMENT FROM
FEBRUARY 15, 2013 TO AUGUST 15, 2013; AND FURTHER AUTHORIZING THE
CITY MANAGER TO EXECUTE SUCH AMENDMENTS AND ANY
SUBSEQUENTLY APPROVED EXTENSIONS BY US HUD OR DEO.
WHEREAS, on July 31, 2008, the United States Congress enacted the Housing and
Economic Recovery Act of 2008, thereby creating the Neighborhood Stabilization Program 1
(NSP 1), which directed the Department of Housing and Urban Development (HUD) to allocate $3.93
billion to states and units of local government as emergency assistance for the purchase and
redevelopment of abandoned and foreclosed homes; and
WHEREAS, on March 18, 2009, the City approved Resolution No. 2009-27039, approving
the City's planned use of and application of NSP1 funds to purchase and rehabilitate one or more
foreclosed or abandoned multi-family buildings to be made available as rental housing properties for
income qualified households; and
WHEREAS, the City was awarded a total of $9,305,268 in NSP1 funds through an initial
allocation plus two subsequent allocations; and
WHEREAS, the State of Florida Department of Economic Development (DEO) is the entity
managing the NSP1 allocation to the City of Miami Beach; and
WHEREAS, the Administration conducted a duly-noticed procurement process for award of
the first allocation, resulting in the City Commission's approval on September 9, 2009, of Resolution
No. 2009-27194 which authorizing the execution of an Agreement with Miami Beach Community
Development Corporation to carry out the City's planned use of, and application for, NSP1 funds
("MBCDC Agreement"); and
WHEREAS, the initial strategy was to fund the acquisition and rehabilitation of one
affordable housing project, which resulted in the acquisition of the 16-unit foreclosed building
located at 7871 Crespi Blvd., which was later named The Madeleine; and
WHEREAS, on February 3, 2010, the City's Agreement with MBCDC was amended per
Resolution No. 201 0-27335, to allow for the allocation of additional NSP1 funds received by the City;
and
WHEREAS, the additional acquisition and rehabilitation funds resulting from the second and
third allocations were authorized for the acquisition and rehabilitation of The Neptune, a 35-unit
foreclosed apartment building located at 1632 Meridian Avenue; and The Lottie, a nine-unit
212
foreclosed apartment building which contains large apartments and is suitable for families, located
at 530 75 Street; and
WHEREAS, a total of 60 units were purchased with NSP1 funds and rehabilitated for
income-eligible Miami Beach residents; and
WHEREAS, The Lottie is in TCO status as of November 21, 2012, and is pending a final
inspection for CO; and
WHEREAS, to date, 39 out of the total 60 units are occupied; and
WHEREAS, the City's NSP1 grant agreements with the State DEO and with MBCDC expire
February 15, 2013; and
WHEREAS, in-light of the current February 15, 2013 expiration date, the City budgeted
general funds to continue monitoring of the NSP1 Activities and close-out of the grant; and
WHEREAS, the State's DEO has requested that both Miami Beach contracts be extended
through August 15, 2013, in order to lease-up the remaining vacant units, obtain the CO at The
Lottie, and close out the grant; and
WHEREAS, 75% of the other entitlement communities in Florida have not yet met the HUD
National Objective, which is to have 100% occupancy of the NSP1-funded homes, and
WHEREAS, extension of the contracts will enable the City of continue to expend available
NSP1 grant administrative funds until the new expiration date of the contracts; and
WHEREAS, the grant's current administrative expenses are averaging $11,882 per month,
therefore an additional $71 ,292 will be available over the proposed additional six month term; and
WHEREAS, in order to complete the aforementioned tasks, the Administration recommends
extending the end dates of both the NSP1 SubgrantAgreement and the MBCDC Agreement, so that
they both expire on August 15, 2013.
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 Mayor and the City Clerk to execute Amendment No. 5 to the Subgrant
Agreement between the State of Florida Department of Economic Development (DEO) and the
City modifying the expiration date of the Subgrant Agreement from February 15, 2013, to August
15, 2013; and approve and authorize the Mayor and City Clerk to execute Amendment No.9 to the
NSP1 Agreement between the City and Miami Beach Community Development Corporation
(MBCDC), dated January 21, 2010, modifying the expiration date of such Agreement from
February 15, 2013 to August 15, 2013; and further authorize the City Manager to execute such
amendments and any subsequently approved extensions by US HUD or DEO.
PASSED AND ADOPTED this ___ day of-------' 2013.
ATTEST:
CITY CLERK
213
APPROVED AS TO
FORM & LANGUAGE
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