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R7B-Accept Recomm -Issue RFP Develop Barclay Plaza Apartments As Workforce HousiCOMMISSION ITEM SUMMARY Condensed Title: A Resolution accepting the recommendation of the Neighborhoods/Community Affairs Committee to issue an RFP seeking private developers to develop the Barclay Plaza Apartments as Workforce AGENDA I R7 Ensuring Workforce Housing for Key lndustry Workers is Available in Suitable Locations Supporting Data: Community Satisfaction Survey: 18o/o of businesses cited the lack of affordable housing for the labor force as the most important challenge facing their businesses Item Summary/Recommendation : At its September 24,2014 meeting, the Neighborhoods/Community Affairs Committee directed the Administration to identify a property for potential development as workforce housing serving those residents earning 120 to 140 percent of Area Median lncome (AMl) and employed in the public safety, education and municipal sectors. The Mayor and Commission accepted this recommendation defining workforce housing via Resolution 2014-28794. The Administration presented the possible use of the Barclay Plaza Apartments as workforce housing to the March 20, 2015 Neighborhood/Community Affairs Committee. The Committee unanimously endorsed this location. The Barclay Plaza was the recipient of federal funds and its affordability period has not expired. Therefore, the City would have to refund its invested funds to HUD. The amount subject to repayment is $413,152.56. These funds would be returned to the City's line of credit for subsequent use to develop or rehabilitate affordable housing for households earning up to 80 percent of AMI ($38,880). The Barclay Plaza has several unique qualities that are attractive to developers. These qualities would be emphasized when the City issues a Request For Proposal to develop the site as workforce housing. ln addition to marketing the unique development opportunity, the RFP would seek to identify the development experience of potential partners with an emphasis on historic preservation work. Finally, a responsive proposer would have the fiscal capacity to ensure development of the site meeting the City's high quality expectations for such a prominent City Center location. While HUD would need to be repaid $413,152.56, the Barclay Plaza's location and potential to attract private developers offers a unique opportunity for the City to embark on the Commission's direction to develop workforce housing. The Administration recommends the issuance of a Request For Proposals to gauge interest in developing this City-owned property to create workforce housing for those earning 120 to 140 percent Area Median lncome and employed in the public safety, education and municipal sectors. of Funds Maria L. Ruiz, Department Director, Office of Housinq and Community Services, Extension 6491 MIAMIBEACH DATE- S-6-,S570 MIAMIBEACH City of Miomi Beoch, I 200 Convention Center Drive, Miomi Beoch, Florido 33I 39. www.miomibeochfl.gov COMMISSION EMORANDUM Mayor Philip Levine and Members of Jimmy L. Morales, City Manager May 6, 2015 SUBJECT: A RESOLUTION OF THE MAYOR XND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE NEIGHBORHOOD/COMMUNITY AFFAIRS COMMITTEE TO ISSUE A REQUEST FOR PROPOSALS TO IDENTIFY A PUBLIC.PRIVATE PARTNERSHIP WITH THE CITY, IN ORDER TO DEVELOP THE CITY-OWNED PROPERTY LOCATED AT 1940 PARK AVENUE (THE BARCLAY PLAZA APARTMENTS), AS WORKFORGE HOUSING SERVING PERSONS EARNING BETWEEN 120 AND 140 PERCENT OF AREA MEDIAN tNcoME (AMt) AND EMPLOYED lN THE PUBLIG SAFETY, EDUCATION AND MUNICIPAL SECTORS. ADM!NISTRATION RECOMMENDATION Approve the resolution. KEY !NTENDED OUTCOME Ensuring Workforce Housing for Key lndustry Workers is Available in Suitable Locations BACKGROUND At its September 24, 2014 meeting, the Neighborhoods/Community Affairs Committee directed the Administration to identify a property for potential development as workforce housing as part of its broader direction to pursue the development of affordable housing serving those residents earning 120 to 140 percent of Area Median lncome (AMl) and employed in the public safety, education and municipal sectors. The Mayor and Commission accepted this recommendation defining workforce housi ng via Resolu tion 201 4-287 94. For the past year, the City has been working diligently to proactively address a variety of operational concerns involving Miami Beach Community Development Corporation (MBCDC). As part of a broader solution, the City acquired several properties previously owned by MBCDC but fiscally supported by the City. These properties were:. Barclay Plaza Apartments. Lottie Apartments. Madeleine Village Apartments. Neptune Apartments All of the properties, except for the Barclay Plaza Apartments, were acquired fully leased. These properties are now owned and managed for the City as affordable housing developments in compliance with the terms of the federal funding utilized to acquire and/or rehabilitate the properties. TO: FROM: DATE: 571 City Commissioner Memorandum - Barclay Plaza as Workforce Housing May 6, 2015 3 pages The following US Department of Housing and Urban Development (HUD) funds were used in these properties:. Community Development Block Grant (CDBG). HOME lnvestment Partnership Program (HOME). Neighborhood Stabilization Program (NSPI) Unfortunately, the Barclay Plaza Apartments, which were acquired January 30, 2015, have significant capital needs and ongoing building violations. These violations include the failure to complete its 40- year certification which has been in arrears since 2011. ln addition, the building was the victim of an intentional fire on February 2,2015 which is under investigation by Miami Beach Police. While the fire damage was contained by the sprinkler system, vandals had destroyed the electrical box and elevator controls which had been replaced using HUD funds. The Administration presented the possible use of the Barclay Plaza Apartments as workforce housing to the March 20, 2015 Neighborhood/Community Affairs Committee. The Committee unanimously endorsed this location as the possible site for workforce housing. ANALYSIS While the City had initially intended to maintain the Barclay Plaza Apartments as affordable housing, the extensive and necessary renovations are expected to cost millions of dollars. The City's affordable housing funds are insufficient to complete the task as it would take multiple years' allocations and timeliness deadlines make the project unviable. However, the Barclay Plaza's central location (located across the street from the Convention Center) offers potential as a possible location for workforce housing that can be developed in conjunction with private developers in support of Resolution 2014- 28794. The property's close proximity to shopping, dining, recreational and cultural centers, and access to mass transportation routes makes this location ideal for a workforce wishing to live, work and play in our community. Because the property was the recipient of federal funds and the affordability period has not expired, the City would have to refund its invested funds to HUD as a condition of subsequent development as non-affordable housing. The amount subject to repayment to HUD is $413,152.56. These funds would be returned to the City's line of credit for subsequent use to develop or rehabilitate affordable housing for households earning up to 80 percent of AMI ($38,880). The City can issue a Request For Proposals (RFP) to seek a private partner who can collaborate with the City to rehabilitate the Barclay Plaza Apartments as workforce housing. The Committee's direction to market workforce housing to people earning 120 to 140 percent AMI ($57,840 to $67,480 in household income for a household of one) provides significant latitude in potential rental rates to attract a broader range of developers than would be expected for an affordable housing project. Aside from ideal location, the Barclay Plaza has several attractive qualities which establish it as a unique development opportunity: History - The Barclay Plaza, built in 1935, was once considered a premier hotel destination on our community. ln the 1950s, the three story hotel boasted wood columns in its open lobby which faced Park Avenue on the east and led to a pool on the west. The raised, gated pool remains on the property. The Barclay Plaza Hotel, as it was then known, was a social nightspot that featured Cuban cuisine in the 1940s and 1950s when our community competed with Havana as a tourist destination. Architectural Value - The Barclay Plaza was designed by the Kiehnel & Elliott architectural firm which also worked on Miami Senior High School, Coral Gables Congregational Church, the Coconut Grove Playhouse, and Seybold Building, among others. The three-story building, with its traditionalArt 572 City Commissioner Memorandum - Barclay Plaza as Workforce Housing May 6, 2015 3 pages Deco design and L-shaped layout, features beautiful faEade details and is reminiscent of our community's preeminent role as a destination for fun and relaxation. lt is nestled between the Allen Apartments (which were renovated in 2011) to the north and the London House Apartments, currently undergoing complete rehabilitation. Physical Attributes - The physical lot affords unique access from both Park Avenue and Washington Avenue. The rear fagade faces the east side of the Convention Center and includes limited on-site parking. Aside from a bus stop on the corner, the Barclay Plaza is within walking distance of the Museum District, Lincoln Road and Washington Avenue's shopping district. The City would emphasize these unique qualities when it issues a Request For Proposal for interested parties to develop the site as workforce housing. ln addition to marketing the unique development opportunity in such a central City location, the RFP would seek to identify the development experience of potential partners with an emphasis on historic preservation work. Finally, a responsive RFP would demonstrate an applicant's fiscal capacity ensuring that it has the financial resources to adequately develop the site meeting the City's high quality expectations for such a prominent City Center location. CONCLUSION While HUD would need to be repaid for its funds used at the Barclay Plaza Apartments, its location and potential to attract private developers offers a unique opportunity for the'City to embark on the Commission's direction to develop workforce housing for those residents earning 120 to 140 percent AMI and employed in the public safety, education and municipal sectors. Therefore, in support of the Key lntended Outcome of Ensuring Workforce Housing for Key lndustry Workers is Available in Suitable Locations, the Administration recommends the issuance of a Request For Proposals to gauge interest in developing this City-owned property to create workforce housing for those earning 120 to 140 percent Area Median lncome and employed in the public safety, education and municipal sectors. dh JLM/KGB/MLR T:\AGENDA\201S\May\HOUSING & COMMUNITY SERVICES/Barclay Plaza Workforce Memo 05062015 573 RESOLUTION NO. A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE NEIGHBORHOOD/COMMUNITY AFFAIRS COMMITTEE TO ISSUE A REQUEST FOR PROPOSALS TO IDENTIFY A PUBLIC.PRIVATE PARTNERSHIP WITH THE GITY, IN ORDER TO DEVELOP THE CITY.OWNED PROPERW LOCATED AT 1940 PARK AVENUE (THE BARCLAY PLAA.A APARTMENTS), AS WORKFORCE HOUSING SERVING PERSONS EARNTNG BETWEEN 120 AND 140 PERCENT OF AREA MEDTAN TNCOME (AMr) AND EMPLOYED IN THE PUBLIC SAFETY, EDUCATION AND MUNICIPAL SECTORS. WHEREAS, at its September 24,2014 meeting, the Neighborhoods/Community Affairs Committee (NCAC Committee) directed the Administration to identify a property for potential development as workforce housing as part of its broader direction to pursue the development of affordable housing serving those residents earning 120 to 140 percent of Area Median lncome (AMl) and employed in the public safety, education and municipal sectors (Workforce Housing Criteria); and WHEREAS, on October 22,2014, the Mayor and Commission adopted Resolution No. 2014-28794, accepting the recommendation of the NCAC Committee and defining workforce housing pursuant to said Workforce Housing Criteria; and WHEREAS, the Barclay Plaza Apartments, a 66-unit, three-story building located at 1940 Park Avenue, was acquired by Miami Beach Community Development Corporation (MBCDC) in 2007 with City Redevelopment Agency funds for the purpose of creating affordable housing; and WHEREAS, MBCDC returned the building to the City on January 30,2015, because it did not have the resources or fiscal capacity to complete the building and ensure the delivery of qualifying affordable housing units; and WHEREAS, on February 2,2015, the Barclay Plaza Apartments was the victim of arson criminal mischief causing extensive damage to the building's lobby and electrical system; WHEREAS, the City estimates that repair and renovation costs for the Barclay Plaza Apartments are $6,000,000; and WHEREAS, the City's current and future affordable housing funds are insufficient to make the necessary repairs within HUD's required timeframe; and WHEREAS, the Barclay Plaza Apartments is a suitable location for workforce housing because it is centrally located to shopping districts, the hotel district, and major bus routes; and WHEREAS, the Administration presented the possible use of the Barclay Plaza Apartments as workforce housing to the NCAC Committee at its Marcn 20, 2015 meeting and said Committee unanimously endorsed this location as the possible site for workforce housing; and and and 574 WHEREAS, the development of workforce housing at the Barclay Plaza Apartments achieves a Key lntended Outcome and enables the City to become compliant with HUD expenditure requirements; and WHEREAS, the Administration recommends the issuance of a Request for Proposals (RFP), in order to assist identifying private resources that can be leveraged with the City's ownership of the property to develop the Barclay Plaza Apartments for workforce housing. NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby accept the recommendation of the Neighborhoods/Community Affairs Committee to issue a Request For Proposals to identify a public-private partnership with the City, in order to develop the City- owned property located at 1940 Park Avenue (The Barclay Plaza Apartments), as workforce housing serving persons earning between 120 and 140 percent Area Median lncome (AMl) and employed in the public safety, education, and government sectors. PASSED AND ADOPTED this _day of.2015. ATTEST: RAFAEL E. GRANADO, CITY CLERK PHILIP LEVINE, MAYOR APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION *-o-rb - Dote 575