C7E-Negotiate And Execute Purchase And Sale Agreements -NSP1-DEO-HUD-COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution of the Mayor and City Commission of the City of Miami Beach, Florida, approving and authorizing the City
Manager to negotiate and execute, on behalf of the City, Purchase and Sale Agreemenls and other closing documents, in
connection with the purchase of foreclosed andior distressed properties, in accordance with rules promulgated by the City's
Neighborhood Stabilization Program 1 (NSP1) Grant Agreement (NSPI Funds) with the State of Florida Department of
Economic Opportunity (DEO Agreement) and the U.S. Department of Housing and Urban Development (HUD) (collectively
NSPI Guidelines). bv utilizino the NSP1 Administrative Funds. in the amount of $201.801 .66.
lncrease access to workforce or affordable
Supporting Data (Surveys, Environmental Scan, etc.): Based on the Strategic Plan 2012 Update, the number of
affordable housino units is 4.796-
Item Summary/Recommendation :
The U.S. Housing and Economic Recovery Act of 2008 created the Neighborhood Stabilization Program (NSPI), 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. The City 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 NSPI regulations and was awarded a total of $9,305,268 through an initial allocation plus two
subsequent reallocations. The State of Florida Department of Economic Opportunity (DEO) is the pass-through entity
handling HUD's NSP1 allocation to the City. 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 the
City after the original recipients, Apopka and Clearwater, failed to meet the program's benchmarks. The City 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 Miami Beach Community Development Corporation (MBCDC). Both
Agreements were subsequently amended to accept and govern the second and third allocations of funding for a total of
$9,305,268. With these funds, three foreclosed buildings were acquired by MBCDC pursuant to the NSPI guidelines and
are all now complete and fully leased. They are: The Madeleine, a 16-unit building located at 7871 Crespi Blvd., received a
Certificate of Occupancy (CO) on October 11,2012; The Neptune, a 3s-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, received a CO on April
24,2013.
From each of the allocations, the City was allowed to use a maximum of 6.8% ($632,758) for administrative expenses. The
City has an approximate balance of $201 ,801.66 in unspent administrative funds. The City is in the process of identifying
additional eligible properties that can be purchased with NSP1 funds. The City anticipates that these purchases will be for
individual units in lieu of multi-family buildings. The City intends to utilize the remaining $201 ,801 .66 in NSP1 funds to
purchase and rehabilitate, as necessary, eligible foreclosed or abandoned properties creating affordable rental housing
unit(s) for low to moderate income persons until all funds are fully expended.
Financial lnformation:
Source of Funds:Account Approved
1 $201,801.66 138-5668-XXXXXX
NSPl 2
OBPI Total
Maria L. Ruiz ext. 6491
T:\AGENDA\201 4\NSP1 CommissionltemSummary
AGEI.IDA ITEM L, ' L-(B MIAMIBTACH DATE255
4 MIAMIBEACH
City of Miomi Beoch,
www. m iomibeochfl.gov
'l700 Convention Center Drive, Miomi Beoch. Florido 33139,
COMMISSION MEMORANDUM
TO: Mayor Philip Levine and of the City
FROM: Jimmy L. Morales, City Manager
DATE: June 11,2014
SUBJECT: A RESOLUTION OF THE MA AND CITY COMMISSION OF THE CITY OF MIAMI
AND AUTHORIZING THE CITY MANAGER TOBEACH, FLORIDA,
NEGOTIATE AND EXECUTE ON BEHALF OF THE CITY, PURCHASE AND SALE
AGREEMENTS AND OTHER CLOSING DOCUMENTS, IN CONNECTION WITH THE
PURCHASE OF FORECLOSED AND/OR DISTRESSED PROPERTIES, IN
ACCORDANCE WITH RULES AS PROMULGATED BY THE C]TY'S
NEIGHBORHOOD STABILIZATION PROGRAM 1 (NSP1) GRANT AGREEMENT
(NSpl FUNDS) WrrH THE STATE OF FLORTDA DEPARTMENT OF ECONOMTC
oPPORTUNTTY (DEO AGREEMENT) AND THE U.S. DEPARTMENT OF HOUSTNG
AND URBAN DEVELOPMENT (HUD) (COLLECTIVELY NSPI GUIDELINES); BY
UTILIZ]NG THE REMAINING NSP1 ADMINISTRATIVE FUNDS, IN THE AMOUNT OF
$201,801.66; AUTHORIZING THE CITY MANAGER TO EXECUTE ANY OTHER
AGREEMENTS FOR REHABILITATION SERV]CES IN ACCORDANCE WITH NSPI
GUIDELINES; AND FURTHER AUTHORIZING THE CITY MANAGER TO EXTEND
THE DEO AGREEMENT (AS DEFINED HERETN) SHOULD THE C|TY NOT HAVE
EXPENDED THE NSP1 ADMINISTRATIVE FUNDS BY AUGUST 15,2014,
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
BACKGROUND
On July 3'1 , 2008, the United States Congress enacted the Housing and Economic Recovery Act of 2008,
thereby creating the Neighborhood Stabilization Program (NSP1), 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 NSPl 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 NSPI regulations, and it's goal of stabilizing neighborhoods impacted by foreclosures.
The City was awarded a total of $9,305,268 in NSPI funds through an initial allocation plus two subsequent
reallocations. The State's Department of Community Affairs (DCA), now known as the Department of
Economic Opportunity (DEO), is lhe pass-through entity handling HUD's NSPl funds. The initial allocation
to the City in the amount ot $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 the City after the original recipients,
Apopka and Clearwater, failed to meet the program's benchmarks. Conversely, the City consistently
demonstrated above-average performance.
On September 9, 2009, the City approved Resolution No. 2009-27175 authorizing the execution of the
Federally-funded Subgrant Agreement with DCA ('State Agreement") for the amount of $2,549,551 .
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After the Administralion conducted a duly-noticed procurement process for award of the first allocation, the
Mayor and City Commission approved Resolution No. 2009-27194 on September 9, 2009 authorizing the
execution of an Agreement with Miami Beach Community Development Corporation (MBCDC) to carry out
the City's planned use of, and application for, NSPI funds ("MBCDC Agreement'). The initial strategy was
to fund the acguisition and rehabilitation of one affordable housing project. MBCDC identified the 16-unit
building located at 7871 Crespi Boulevard, which was later named The Madeleine.
The State Agreement for the first allocation was subsequently amended to include the two additional
allocations in the amounts oI $4,755,717 and $2,000,000, which were awarded on March 24, 201O, and
July 30, 2010, respectively. The MBCDC Agreement was amended per Resolution No. 2010-27335, to
allow for the allocation of additional NSPI funds received by the City. The additional acquisition and
rehabilitation funds resulting from the second and third allocations enabled the acquisition and rehabilitation
of The Neptune, a 3S-unit foreclosed apartment building located at 1632 Meridian Avenue; and The Lottie,
a nine-unit foreclosed apartment building which contains large apartments sultable for families, located at
530 75 Street.
ANALYSIS
From each of the allocations, totaling $9,305,268, the City was allowed to use a maximum of 6.8%
($632,758) for administrative expenses. As of today, the City has an approximate balance of $201 ,801.66
in unspent administrative funds.
On January 15,2014 the City approved Resolution No.2014-28463 approving and authorizing the Mayor
and City Clerk to execute Amendment No.7 modifying the expiration date of the Subgrant agreement
between the DEO and the Cityfrom February 15,2014 to August 15,2014. The extension provided staff
the opportunity to find a suitable NSPI eligible project or activity for the remaining unspent balance of
administrative funds.
The City is in the process of identifying additional eligible properties that can be purchased with NSP1
funds. The City anticipates that these purchases will be for individual units in lieu of multi-family buildings.
The City intends to reprogram the remaining $201 ,801 .66 in NSP1 funds to purchase and rehabilitate, as
necessary, foreclosed or abandoned properties for the use of rental housing unit(s) for low to moderate
income persons until all funds are fully expended.
CONCLUSION
The Administration recommends that the Mayor and City Commission hereby authorize the City Manager
to negotiate and execute, on behalf of the City, Purchase and Sale Agreements and other closing
documents, in connection with the purchase of foreclosed and/or distressed properties, in accordance with
rules promulgated by the City's Neighborhood Stabilization Program 1 (NSP1) Grant Agreement (NSPI
Funds) with the State of Florida Department of Economic Opportunity (DEO Agreement) and the U.S.
Department of Housing and Urban Development (HUD) (collectively NSP1 Guidelines), by utilizing the
remaining NSPI Administrative Funds, in the amount of $201,801.66; authorize the City Manager to
execute any other agreements for rehabilitation services in accordance with NSPI Guidelines; and further
authorize the City Manager to extend the DEO Agreement (as defined herein) should the City not have
expended the NSPI Administrative Funds by August 15, 2014.
,fu
JLM/KFB/MLRYARB
257
RESOLUTION NO.
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE GITY OF
MIAMI BEACH, FLORIDA, APPROVING AND AUTHORIZING THE CIry
MANAGER TO NEGOTIATE AND EXECUTE, ON BEHALF OF THE CITY,
PURCHASE AND SALE AGREEMENTS AND OTHER CLOSING
DOCUMENTS, IN CONNECTION WITH THE PURCHASE OF FOREGLOSED
AND/OR DISTRESSED PROPERTIES, IN ACCORDANCE WITH RULES AS
PROMULGATED BY THE CITY'S NEIGHBORHOOD STAB]LIZATION
PROGRAM 1 (NSP1) GRANT AGREEMENT (NSP1 FUNDS) WITH THE
STATE OF FLORTDA DEPARTMENT OF EGONOMTG OppORTUNtTy (DEO
AGREEMENT) AND THE U.S. DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT (HUD) (GOLLECTIVELY NSPI cUIDELINES); BY UTILIZING
THE REMAINING NSP1 ADMINISTRATIVE FUNDS, IN THE AMOUNT OF
$201,801.66; AUTHORIZING THE CITY MANAGER TO EXECUTE ANY
OTHER AGREEMENTS FOR REHABILITATION SERVICES IN
ACCORDANCE WITH NSPI GUIDELINES; AND FURTHER AUTHORIZING
THE CITY MANAGER TO EXTEND THE DEO AGREEMENT (AS DEFINED
HEREIN) SHOULD THE CITY NOT HAVE EXPENDED THE NSP1
ADMINISTRATIVE FUNDS BY AUGUST 15,2014.
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
(NSP1), 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, the State of Florida Department of Economic Opportunity (DEO) is the
entity managing the NSPI allocation to the City of Miami Beach; and
WHEREAS, on March 18, 2009, the City approved Resolution No. 2009-27039,
approving the City's planned use of and application of NSPI funds to purchase and rehabilitate
one or more foreclosed or abandoned multi-family buildings lo 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 inltial
allocation (plus two subsequent allocations); 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 authorized the City to enter into 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 MBCDC's acquisition of the 16-unit foreclosed
building, located al7871Crespi Boulevard, which was later named The Madeleine; and
WHEREAS, on February 3, 2010, the MBCDC Agreement was amended per Resolution
No. 2010-27335, to allow for the allocation of additional NSP'I funds received by the City, in the
amount of $4,755,717; and
WHEREAS, the additional acquisition and rehabilitation funds resulting from the second
and third allocations were authorized for MBCDC's acquisition and rehabilitation of The
Neptune, a 35-unit foreclosed apartment building located at 1632 Meridian Avenue, and The
258
Lottie, a nine-unit foreclosed apartment building which contains large apartments and is suitable
for families, located at 530 75 Street; and
WHEREAS, on May 12, 2010, the City Commission approved Resolution No. 2010-
27390, authorizing the reallocation of NSPI funds, in the amount of $246,898.53, from The
Madeleine to The Neptune; utilizing the second NSPl allocation, in the amount of
$4,432,328.24; utilizing FY2009/10 US HUD HOME funds, in the amount of $650,000; and
subordinating the City's first lien position for The Neptune to private bank financing acquired by
MBCDC, in the amount of $700.000; and
WHEREAS, the Citywas allowed to use a maximum oI 6.8%, or $632,758, of the total
NSP'l allocation for administrative funds (Administrative Funds); and
WHEREAS, as of September 30, 2012, the remaining balance of Administrative Funds
was $300,953.95, and the City's NSPl grant agreements with the DEO ( DEO Agreement) and
MBCDC Agreement were set to expire on November 23,2012; and
WHEREAS, the DEO requested that City again extend the DEO Agreement and the
MBCDC Agreement through February 15,2013, in order to rent all 60 units for The Madeleine,
The Neptune and The Lottie and meet the National Objective as established by HUD; and
WHEREAS, the DEO requested the City again extend the DEO Agreement and the
MBCDC Agreement for an additional six (6) months, in order to occupy all units, close out the
NSPl grant, and resolve the pending issue of the City's unspent Administrative Funds; and
WHEREAS, pursuant to Resolution No.2013-28139, the DEO Agreement and the
MBCDC Agreement were extended through August 15, 2013; and
WHEREAS, as of April 1, 2013, The Madeleine, The Neptune, and The Lottie were fully
leased and the HUD National Objective was met; and
WHEREAS, the DEO requested that the DEO Agreement be extended six (6) months,
from February 15, 2014 through August 15, 2014, in order to close out the NSPI grant, and
provide an opportunity for the City to find eligible NSP1 activities to enable the expenditure of
unspent Administrative Funds; and
WHEREAS, the current balance of unspent Administrative Funds is approximately
$201,801.66; and
WHEREAS, the City anticipates that these purchases will be for individual units, in lieu
of mulli-family buildings; and
WHEREAS, in order to identify NSP1 eligible activities and fully draw the Administrative
Funds, the Administration intends to reprogram the remaining $201 ,801.66 in NSPI funds to
purchase and rehabilitate, as necessary, foreclosed or abandoned properties for the use of
rental housing unit(s) for low to moderate income persons until all funds are fully expended; and
WHEREAS, in the event that the City is unable to expend the Administrative Funds by
the August 15,2014 DEO Agreement deadline, then the Administratlon recommends that the
Mayor and City Commission authorize the City Manager to negotiate and execute a further
extension to such Agreement.
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
authorize the City Manager to negotiate and execute, on behalf of the City, Purchase and Sale
259
Agreements and other closing documents, in connection with the purchase of foreclosed and/or
distressed properties, in accordance with rules promulgated by the City's Neighborhood
Stabilization Program 1 (NSP1) Grant Agreement (NSPI Funds) with the State of Florida
Department of Economic Opportunity (DEO Agreement) and the U.S. Department of Housing
and Urban Development (HUD) (collectively NSPI Guidelines), by utilizing the remaining NSP'l
Administrative Funds, in the amount of $201,801.66; authorize the City Manager to execute any
other agreements for rehabilitation services in accordance with NSP1 Guidelines; and further
authorize the City Manager to extend the DEO Agreement (as defined herein) should the City
not have expended the NSP1 Administrative Funds by August 15,2014.
PASSED AND ADOPTED this
ATTEST:
CITY CLERK
day of 2014.
MAYOR
APPROVEDASIO
FORM & LANGUAGE
& FOR EXECUTION
t\s lr[
Dote
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