LTC 037-2006 Carrfour Supportive Housing, Inc. Sunsouth Project
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MIAMI BEACH
OFFICE OF THE CITY MANAGER
NO. LTC #
LETTER TO COMMISSION
037-2006
FROM:
Mayor David Dermer and Members of the City Commission
Jorge M. Gonzalez, City Manager \ ,.,... 0-
February 6, 2006 ()
TO:
DATE:
SUBJECT: Carrfour Supportive Housing, Inc. Sunsouth Project
At the Finance and Citywide Committee meeting of January 19, 2005, it was requested that
additional information be provided on the status of the Carrfour Supportive Housing, Inc.
project known as Sunsouth, located at 530 Meridian Avenue.
Committee members were specifically interested in the likelihood that this project would be
completed in a timely manner and in accordance with the terms of the City of Miami Beach
HOME Program Agreement.
As instructed by Committee members, City staff contacted Carrfour Supportive Housing
directly for an updated project budget. On January 31, 2006, Ms. Maria Pellerin Barcus,
President/CEO, Carrfour Supportive Housing, replied indicating that she could not provide
an updated project budget at this time due to a pending Planning Board application. As you
are aware, the Planning Board denied the conditional use for the project at their December
meeting, but voted at its January 2006 meeting to reconsider that decision. The Planning
Board is scheduled to again review the application and modifications proposed by Carrfour
in March 2006. Ms. Pellerin-Barcus' email states that the general contractor may have to re-
bid the subcontracts at such time as the zoning issue is resolved. Therefore, no updated
budget is available at this time.
We have recently been advised that the Homeless Trust, at its January 20, 2006 Executive
Committee meeting, authorized staff to issue a notice of default under the Homeless
Housing Assistance Grant (HHAG) Sub-Agreement they administer. The notice will require
a repayment of the grant. They expect to issue the notice today or tomorrow; Carrfour will
have ten (10) days to respond. The amount of the HHAG grant is $365,000.00.
Should you have any additional questions or concerns, please do not hesitate to contact my
office.
JMG/HMFNPG
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MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
FROM:
Mayor David Dermer and Members of the City Commission
Murray H. Dubbin, City Attorney m ~
Gary M. Held, First Asst. City Attorney ~
Jorge M. Gonzalez, City Manager
TO:
CC:
DATE:
February 6, 2006
SUBJECT: HOME Program Agreement for 530 Meridian Avenue with Carrfour
Supportive Housing/Sunsouth, Inc.
Commissioner Garcia has requested that this Office provide a summary of the
termination provisions of the subject Agreement. This memorandum responds to
that request. This memorandum contains a recital of the applicable contract
provisions and regulations and is not to be construed as an opinion or
recommendation for addressing the relationship between the City and Carrfour.
The provisions of the Agreement providing for termination in Articles IX, XXV and
XXVI of the Agreement, and Article XXVII - Additional Remedies are set forth
below, as well as the CFR (Code of Federal Regulations) sections referred to in
the termination articles of the Agreement.
ARTICLE IX - TERMINATION
The City and Owner agree that this Agreement may be terminated
by the City, in whole or in part, for cause (as defined in Article
XXVI [sic] herein and in accordance with the provisions of 24 CFR
Part 85.43) or for convenience (as defined in Article XXVII [sic]
and in accordance with the provisions of 24 CFR, Part 85.44 [the
CFR provisions are explained below]). A written notification shall
be required at least thirty (30) days prior to the effective date of
such termination, and shall include the reason for the termination
(if for cause), the effective date, and in the case of a partial
termination, the actual portion(s) to be terminated.
ARTICLE XXV - TERMINATION FOR CAUSE
The City may place Owner in default of this Agreement and may
suspend or terminate this Agreement, in whole or in part, for
cause, as prescribed in Article X herein. "Cause" shall include,
but not be limited to, the following:
(a) Owner's failure to (i) diligently pursue additional Project
financing and to close on the acquisition of the Project within 60
days from the date of execution of this Agreement; or (ii)
Memorandum to Mayor and Commission
Re: HOME Program Agreement for 530 Meridian Avenue
February 6, 2006
Page 2 of 5
commence work within thirty (30) days from the date of issuance
of the Notice to Proceed; or (iii) diligently pursue construction and
timely complete the project by securing a Final Certificate of
Completion within twelve (12) months from the date of execution
of this Agreement.
Work shall be considered to have commenced and be in
active progress when, in the sole opinion of the City, a full
complement of workers and equipment is present at the site to
diligently incorporate materials and equipment into the structure
throughout the day on each full working day, weather permitting.
(b) Owner's failure to comply with applicable building, fire, life
safety, housing and zoning laws, rules, regulations and codes.
(c) Owner's default on any of the terms and conditions of the
note, mortgage, or other loan document executed by Owner in
favor of a Lender. The affordability requirements apply without
regard to the term of any loan or mortgage or the transfer of
ownership. They must be imposed by deed restrictions,
covenants running with the land, or other mechanisms approved
by HUD, except that the affordability restrictions may terminate
upon foreclosure or transfer in lieu of foreclosure.
(d) Owner's failure to maintain the insurance required by the
City andlor Lender.
(e) Failure to comply and/or perform in accordance with any of
the terms and conditions of this Agreement, or any Federal, State
or local regulation.
(f) Submitting any required report to the City which is late,
incorrect, or incomplete in any material respect after notice and
reasonable opportunity to cure, as set forth in subparagraph (h)
hereof, has been given by the City to Owner.
(g) Implementation of this Agreement, for any reason is
rendered impossible or infeasible.
(h) Failure to respond in writing, within thirty (30) days of
notice of same from City to any concerns raised by the City,
including providing substantiating documentation when requested
by the City.
(i) Any evidence of fraud, waste or mismanagement as
determined by the City's monitoring of project(s) under this
Agreement, or any violation of applicable HUD rules and
regulations.
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Memorandum to Mayor and Commission
Re: HOME Program Agreement for 530 Meridian Avenue
February 6, 2006
Page 3 of 5
0) Owner's insolvency or bankruptcy.
(k) An assignment or transfer of this Agreement or any interest
therein which does not comply with the procedures set forth in
Article XXV herein.
(I) Claims of lien not satisfied or bonded-off, in accordance
with Florida Statutes, within 60 days from the date of filing of any
such lien.
(m) Failure to comply and/or perform in accordance with the
affordability requirements, and/or an unauthorized transfer of title
of its HOME projects.
If the default complained of is not fully and satisfactorily
cured within thirty (30) days of receipt of such notice of default to
Owner, at the expiration of said thirty (30) day period (or such
additional period of time, as permitted by the City, in its sole
discretion, as required to cure such default, in the event Owner is
diligently pursuing curative efforts) this Agreement may, at the
City's sole option and discretion, be deemed automatically
canceled and terminated, and the City fully discharged from any
and all liabilities, duties and terms arising out of, or accruing by
virtue of this Agreement. In the event of a default for cause, the
City may, at its option, avail itself of any and all remedies pursuant
to 24 CFR Part 85.43, as amended from time to time, including
suspension, in whole or in part, of Owner's grant award(s);
recapture of the Funds, as set forth herein; and any other
remedies that may be legally available.
ARTICLE XXVI - TERMINATION FOR CONVENIENCE
Notwithstanding Article XXVI above, Owner herein consents that
the City may terminate this Agreement, in whole or in part, for
convenience, as set forth in 24 CFR Part 85.44.
ARTICLE XXVII - ADDITIONAL REMEDIES
In the event of a default and termination for cause, the City shall
be entitled to bring any and all legal and/or equitable actions
which it deems to be in its best interest, in Miami-Dade County,
Florida, in order to enforce the City's rights and remedies against
the defaulting party. The City shall be entitled to recover all costs
of such actions, including reasonable attorney's fees. To the
extent allowed by law, the defaulting party waives its right to jury
trial and its right to bring permissive counterclaims against the City
in any such action.
The CFR provisions referenced above establish certain procedures
3
Memorandum to Mayor and Commission
Re: HOME Program Agreement for 530 Meridian Avenue
February 6, 2006
Page 4 of 5
adopted by US HUD applicable to the City's issuance of grants to Sunsouth, as
set forth below. They fall under CFR Chapter 85, entitled "Administration
Requirements for Grants and Cooperative Agreements," The Agreement with
Sunsouth incorporated these provisions and made them applicable to
terminations, in Article IX.
CFR Sec. 85.43 Enforcement.
(a) Remedies for noncompliance. If a grantee or subgrantee
materially fails to comply with any term of an award, whether
stated in a Federal statute or regulation, an assurance, in a
state plan or application, a notice of award, or elsewhere, the
awarding agency may take one or more of the following
actions, as appropriate to the circumstances:
(1) Temporarily withhold cash payments pending
correction of the deficiency by the grantee or
subgrantee or more severe enforcement action by the
awarding agency,
(2) Disallow (that is, deny both use of funds and matching
credit for) all or part of the cost of the activity or action
not in compliance,
(3) Wholly or partly suspend or terminate the current
award for the grantee's or subgrantee's program,
(4) Withhold further awards for the program, or
(5) Take other remedies that may be legally available.
(b) Hearings, appeals. In taking an enforcement action, the
awarding agency will provide grantee or subgrantee an
opportunity for such hearing, appeal, or other administrative
proceeding to which the grantee or subgrantee is entitled
under any statute or regulation applicable to the action
involved.
(c) Effects of suspension and termination. Costs of grantee or
subgrantee resulting from obligations incurred by the grantee
or subgrantee during a suspension or after termination of an
award are not allowable unless the awarding agency expressly
authorizes them in the notice of suspension or termination or
subsequently. Other grantee or subgrantee costs during
suspension or after termination which are necessary and not
reasonably avoidable are allowable if:
(1) The costs result from obligations which were properly
incurred by the grantee or subgrantee before the
effective date of suspension or termination, are not in
anticipation of it, and, in the case of a termination, are
noncancellable, and,
(2) The costs would be allowable if the award were not
suspended or expired normally at the end of the
funding period in which the termination takes effect.
(d) Relationship to debarment and suspension. The enforcement
4
Memorandum to Mayor and Commission
Re: HOME Program Agreement for 530 Meridian Avenue
February 6, 2006
Page 5 of 5
remedies identified in this section, including suspension and
termination, do not preclude grantee or subgrantee from being
subject to 'Debarment and Suspension' under E.O. 12549.
CFR Sec. 85.44 Termination for convenience.
Except as provided in Sec. 85.43 awards may be terminated in
whole or in part only as follows:
(a) By the awarding agency with the consent of the grantee or
subgrantee in which case the two parties shall agree upon the
termination conditions, including the effective date and in the case
of partial termination, the portion to be terminated, or
(b) By the grantee or subgrantee upon written notification to the
awarding agency, setting forth the reasons for such termination,
the effective date, and in the case of partial termination, the
portion to be terminated. However, if, in the case of a partial
termination, the awarding agency determines that the remaining
portion of the award will not accomplish the purposes for which
the award was made, the awarding agency may terminate the
award in its entirety under either Sec. 85.43 or paragraph (a) of
this section.
The following are some (not exhaustive) comments of this office
identifying issues pertinent to the question of compliance or termination, namely:
1. Agreement Article III, section (m) requires "Owner agrees to advise the
City in writing within thirty (30) days of any organizational, operational or
legal status changes made by Owner that affect documents that were
submitted by Owner." Owner did not advise City as grantor that the
project's operational plans had changed from transitional to permanent
housing.
2. Agreement Article XXV, section (a)(iii) provides that the Owner's failure to
"diligently pursue construction and timely complete the project by
securing a Final Certificate of Completion within twelve (12) months from
the date of execution of this Agreement" may be a basis for termination.
Execution of the Agreement was December 10, 2003. In "Scope of
Services", item 11, "Project Development Schedule," the date for
"Complete Construction" was September 2004.
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