2007-26511 Reso
RESOLUTION NO.
2007-26511
A RESOLUTION OF THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING
THE MAYOR AND CITY CLERK TO EXECUTE A SECOND
AMENDMENT TO THE HOME INVESTMENT
PARTNERSHIPS (HOME) PROGRAM AGREEMENT WITH
THE MIAMI BEACH COMMUNITY DEVELOPMENT
CORPORATION (MBCDC); PROVIDING $800,000 FROM
FISCAL YEAR 2005/06 HOME PROGRAM SET-ASIDE
FUNDS AND $800,000 FROM FISCAL YEAR 2006/07 HOME
PROGRAM SET-ASIDE FUNDS, FOR A TOTAL
ALLOCATION OF $1,600,000, FOR THE PAYMENT OF THE
EXISTING SELLER FINANCING FOR THE VILLA MARIA
APARTMENT PROJECT.
WHEREAS, the City of Miami Beach has established a HOME Investment
Partnerships (HOME) Program under the rules of the U.S. Department of Housing and
Urban Development (HUD) for the purpose of providing affordable housing within the City;
and
WHEREAS, on April 8, 1993, the Mayor and City Commission approved Resolution
No. 93-20756, designating Miami Beach Community Development Corporation (MBCDC)
as a qualified Community Housing Development Organization (CHDO) under the HOME
Program; and
WHEREAS, the City has determined the necessity for providing affordable housing
in the City through its Consolidated Plan, adopted by Resolution No. 2003-25304 on July
18,2003, and its One-Year Action Plan for Federal Funds for Fiscal Year 2005/06, adopted
by Resolution No. 2005-25974 on July 27, 2005, as amended and its One-Year Action
Plan for Federal Funds for Fiscal Year 2006/07, adopted by Resolution No. 2006-26253 on
July 12, 2006, as amended; and
WHEREAS, on December 8,2004, the City adopted Resolution No. 2004-25757,
authorizing a HOME Program Agreement between the City and MBCDC to provide
$1,100,000 of HOME Program Set-Aside funds for the acquisition and rehabilitation of an
apartment building located at 2800 Collins Avenue, Miami Beach; and
WHEREAS, on February 2, 2005, the City adopted Resolution No. 2005-25799,
authorizing a First Amendment to the HOME Program Agreement between the City and
MBCDC to provide $500,000 of their previously allocated Fiscal Year 2004/2005 HOME
CHDO funds towards the acquisition and rehabilitation costs of the building located at 2800
Collins Avenue; and
. , I ,
WHEREAS, on March 18, 2005, MBCDC entered into a mortgage and security
agreement with an outstanding promissory note with the seller of the Villa Maria Apartment
building, Neighborhood Development Ltd., in the amount of $1 ,400,000, with repayment
of interest at seven percent annum from the date of disbursement of the principal sum; and
WHEREAS, MBCDC is requesting that the City to allow it to utilize additional HOME
funds in the amount of $1,600,000, for the payment of seller financing to Neighborhood
Development Ltd. as follows: $800,000 from Fiscal Year 2005/06 HOME Program Set-
Aside funds and $800,000 from Fiscal Year 2006/07 HOME Program Set-Aside funds; and
WHEREAS, the City's Loan Review Committee, at its March 28, 2007 meeting,
recommended that the Mayor and City Commission approve a request from MBCDC for
the utilization of $1,600,000 from the HOME Program from the following; $800,000 from
Fiscal Year 2005/06 HOME Program Set-Aside funds and $800,000 from Fiscal Year
2006/07 HOME Program Set-Aside funds, for a total allocation of $1,600,000, for the
payment of existing seller financing for the Villa Maria Apartment Project.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Clerk
are hereby authorized to execute a Second Amendment to the HOME Investment
Partnerships (HOME) Program Agreement with the Miami Beach Community Development
Corporation (MBCDC); providing $800,000 from Fiscal Year 2005/06 HOME Program Set-
Aside funds and $800,000 from Fiscal Year 2006/07 HOME Program Set-Aside funds, for
a total allocation of $1 ,600,000, for the payment of the existing seller financing for the Villa
Maria Apartment Project.
PASSED AND ADOPTED this 11 th
ATTEST:
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T:\AGENDAl2oo7\apr1107\ConsentlVilla Maria - 2007 HOME Funds - Reso.doc
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
,- J'2~ 107
(r--~
COMMISSION ITEM SUMMARY
Condensed Title:
A resolution authorizing the execution of a second amendment to a HOME Program Agreement
providing $1,600,000 funds from the HOME Program ($800,000 FY 2005/2006 HOME Set-Aside and
$800,000 FY 2006/2007 HOME Set-Aside) for the payment of the existing seller financing for the
Villa Maria Apartment building, located at 2800 Collins Avenue, which will provide 34 rental units for
income-eli ible elderl tenants in accordance with the HOME Pro ram re uirements.
Ke Intended Outcome Su orted:
To increase availability of workforce/affordable housing.
Issue:
Shall the City of Miami Beach provide $1,600,000 in HOME Program funds toward the cost of
acquisition of the Villa Maria Apartment building located at 2800 Collins Avenue, to provide 34 rental
units for income-eli ible elderl tenants in accordance with the HOME Pro ram re uirements?
Item Summary/Recommendation:
On December 8, 2004, the City committed $1,100,000 in HOME Program funds ($505,000 FY
2003/2004 HOME Program Income and $595,000 FY 2003/04 HOME Program Set-Aside) to Miami
Beach Community Development Corporation (MBCDC) for the acquisition and rehabilitation of the Villa
Maria, an apartment building located at 2800 Collins Avenue. MBCDC was also awarded $500,000
from the FY 2004/2005 (FY 2004/05 HOME Set-Aside Program) previously committed to them for the
development of affordable housing. MBCDC is now requesting to utilize $1,600,000 from their HOME
set-aside funding ($800,000 FY 2005/2006 and $800,000 FY 2006/07) to repay the remainder of seller
financing outstanding on this project to retain affordable housing stock in the City of Miami Beach.
Advisory Board Recommendation:
On - Ap("',1 b, 2007, the City's Loan Review Committee recommended funding for an application from
MBCDC for the requested $1,600,000 to be utilized towards the acquisition of the apartment building
located at 2800 Collins Avenue.
Financial Information:
Source of Amount Account Approved
Funds: 1 $800,000.00 151.5234
2 $800,000.00 151.5235
HOME
Program 3
4
OSPI Total $1,600,000.00
Financial Impact Summary:
City Clerk's Office Legislative Tracking:
I Vivian P. Guzman
Si n-Offs:
Department Director
Assistant City Manager
City Manager
\
c._...
MIAMI BEACH
AGENDA ITEM
DATE
C7(11
1(-1/-07
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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
Jorge M. Gonzalez, City Manager ~,y--y
April 11, 2007 U
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE A SECOND AMENDMENT TO THE HOME INVESTMENT
PARTNERSHIPS (HOME) PROGRAM AGREEMENT WITH THE MIAMI BEACH
COMMUNITY DEVELOPMENT CORPORATION (MBCDC), PROVIDING
$800,000 FROM FISCAL YEAR 2005/06 HOME PROGRAM SET-ASIDE FUNDS
AND $800,000 FROM FISCAL YEAR 2006/07 HOME PROGRAM SET-ASIDE
FUNDS, FOR A TOTAL ALLOCATION OF $1,600,000, FOR THE PAYMENT OF
THE EXISTING SELLER FINANCING FOR THE VILLA MARIA APARTMENT
PROJECT.
TO:
DATE:
SUBJECT:
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
ANAL YSIS
To date, the City of Miami Beach has awarded $1,600,000 (HOME FY 2003/04 Program
Income $505,000, HOME FY 2003/04 Set-Aside $595,000, HOME FY 2004/05 Set-Aside
$500,000) in HOME Investment Partnerships (HOME) Program funds to Miami Beach
Community Development Corporation (MBCDC) for the acquisition and rehabilitation of the
Villa Maria Apartment building located at 2800 Collins Avenue, Miami Beach, to provide an
estimated thirty-four (34) rental units for income-eligible elderly tenants. MBCDC is now
requesting to utilize an additional $1,600,000 of HOME funding previously awarded by the
City Commission to MBCDC from the following; $800,000 from Fiscal Year 2005/06 HOME
Program Set-Aside funds (Resolution No. 2005-25974) and $800,000 from Fiscal Year
2006/07 HOME Program Set-Aside funds (Resolution No. 2006-26253).
Additional funding is being requested to pay the remaining mortgage principal of $1,400,000
and accumulated interest that is being held by the previous owner, Neighborhood
Development, Ltd. This funding will allow for the acquisition of the property in its entirety
with no continuing debt payments for principal and interest and thereby reduce overall
development costs of the project. In November 2004, MBCDC entered into negotiations with
Neighborhood Development, Ltd. to acquire the Villa Maria Apartments. MBCDC was able
to enter into an agreement with the seller to purchase the building for $2,600,000 by
providing a down payment of $1,200,000 and entering into a mortgage and security
agreement that provides a promissory note in the amount of $1,400,000 payable to the seller
with interest at the rate of seven percent per annum from the date of disbursement of the
principal sum that commenced on March 18, 2005. Funding in the amount of $1,600,000
will allow MBCDC to eliminate the seller principal and approximately 25 months of financing
interest for this project. More importantly, this funding will assist in the retention of existing
affordable housing stock in Miami Beach
The City of Miami Beach has received an annual allocation of HOME funds from the U.S.
Department of Housing and Urban Development (HUD) since 1992 for the purpose of
expanding the supply of housing for persons meeting the income criteria of the HOME
Program. The HOME Program requires the City, in its capacity as a participating jurisdiction,
to set aside a minimum of 15 percent of its annual allocation for a particular type of not-for-
profit organization called a Community Housing Development Organization (CHDO). The
CHDO is required to use these funds for housing development activities in which the CHDO
is the owner, sponsor or developer of the housing. MBCDC was officially certified and
designated as a CHDO by HUD in 1993.
On July 30, 2003, the City adopted the One-year Action Plan for federal funds for Fiscal
Year 2004/2005. The Plan provided a HOME CHDO set-aside allocation in the amount of
$800,000 of HOME Program funds to MBCDC for the acquisition and/or rehabilitation of
multi-family buildings or scattered site units for the purpose of providing rental and/or home
ownership opportunities to income-eligible participants. Once MBCDC identifies an initiative
and site to utilize the allocated funds, a project and site specific HOME Agreement is
entered into.
On December 8, 2004, the City Commission adopted Resolution No. 2004-25757
authorizing the execution of a HOME Program Agreement between the City and MBCDC,
providing $1,100,000 of HOME Program funds for the acquisition of the Villa Maria
Apartments project located at 2800 Collins Avenue, to provide thirty four (34) rental units for
income-eligible elderly tenants in accordance with the HOME Program requirements. The
building is configured into 34 apartments of which five are one-bedroom units and 29 are
efficiency units. The building is under a Project Based Section 8 contract with HUD and
Miami Beach Housing Authority that will expire in the year 2012. The residents are all
elderly; most of them have been living in this building for close to 20 years. The architect for
this project, Giller & Giller Architects, is currently in the final stages of designing the
construction plans for the building. A building permit for this project is expected to be issued
in April 2007. After obtaining the building permit, MBCDC will solicit contractors to
commence rehabilitation of the building and attempt to complete all construction by the end
of 2008.
On February 2, 2005, the City Commission adopted Resolution No. 2005-25799, authorizing
the execution of a First Amendment to the HOME Investment Partnerships Program
Agreement with MBCDC, providing $500,000 from their HOME CHDO Set-Aside funds from
Fiscal Year 2004/2005 for acquisition and rehabilitation of the Villa Maria Apartments
project. Authorization of this additional $500,000 of CHDO funds for the property purchase
could not be taken up by the Commission at the same time as the allocation of the original
$1,100,000 HOME fund allocation on December 8, 2004, because HUD had not yet
released the 2004/05 HOME CHDO funding. Given the timing of the $1.1 million HOME
allocation in Decembe'r 2004, two separate commission actions were required.
On April 5, 2007, the Loan Review Committee (LRC) recommended that the Mayor and City
Commission approve a request from MBCDC for the utilization of $1,600,000 from the
HOME Program from the following; $800,000 from Fiscal Year 2005/06 HOME Program Set-
Aside funds and $800,000 from Fiscal Year 2006/07 HOME Program Set-Aside funds.
Although MBCDC has already received approval for these initial allocations of set-aside
funding from both the LRC and the City Commission to utilize for acquiring future affordable
. .
housing projects, MBCDC has brought this item for review by the LRC and the City to
formally notify and request that the funds be used for their intended purpose. In addition,
MBCDC is providing progress update on the Villa Maria Apartment Project including
obtaining and uses of funds and the estimated construction schedule.
Once approved, the total allocation of City of Miami Beach HOME funding for the Villa Maria
Apartments project will be $3,200,000. Based on the 34 units of affordable housing that will
be available at the conclusion of rehabilitation of the project, the HOME formula cost per unit
will be $94,118. This falls below the maximum HOME per unit costs of assistance allowable
established by HUD The total project cost for this project of $7,298,565 has been
established as follows: $2,600,000 for purchase; $3,195,204 for rehabilitation costs;
$1,288,361 for pre-development costs; and $215,000 for rehabilitation contingency. To
date, including this requested allocation of $1,600,000 in HOME funding, MBCDC has
secured $5,415,000 in total project funds for this project. The remaining project funds in the
amount of $1,883,565 are being requested via the Miami-Dade County FY 2007
Documentary Surtax Funds from ($800,000) and from the Florida Housing Finance
Corporation - State Apartment Incentive Loan Program ($1,083,565). MBCDC is confident
that its application for both funding sources is strong and will be reviewed favorably for
funding.
CONCLUSION
The Administration recommends that the Mayor and City Commission of the City of Miami
Beach, Florida, authorize the execution of a Second Amendment to the HOME Investment
Partnerships Program Agreement, between the City of Miami Beach and MBCDC, providing
$800,000 from Fiscal Year 2005/06 HOME Program Set-Aside funds and $800,000 from
Fiscal Year 2006/07 HOME Program Set-Aside funds, for a total allocation of $1,600,000, for
the payment of existing seller financing for the Villa Maria Apartment project.
Attachment
JMG/HMFNPG/TU/JQ
T:\AGENDA \2007\apr11 07\Consent\Villa Maria - 2007 HOME Funds - Memo.doc
PROPOSED SOURCES AND USES FOR VILLA MARIA APARTMENTS:
SOURCES
City of Miami Beach HOME CHDO Set-Aside $595,000.00
2003/04
City of Miami Beach HOME Program Income $505,000.00
2003/04
City of Miami Beach HOME CHDO Set-Aside $500,000.00
2004/05
City of Miami Beach HOME CHDO Set-Aside $800,000.00
2005/06 (subject funds - pending)
City of Miami Beach HOME CHDO Set-Aside $800,000.00
2006/07 (subject funds - pending)
Miami-Dade County HODAG
2005 (Pooled Funding) $500,000.00
(Housina Development Grant Program)
Miami-Dade County HODAG $715,000.00
2005 (Housing Development Grant Program)
Miami-Dade County Documentary Surtax Funds $1,000,000.00
2005
Florida Housing Financing Corporation
State Apartment Incentive Loan Program $1,083,565.00
2007 (application pendina)
Miami-Dade Surtax $800,000.00
2007 (application pending)
Total $7,298,565.00
USES
Purchase Price $2,600,000.00
Rehabilitation Costs $3,195,204.00
Rehabilitation Contingency $215,000.00
Pre-Development Costs $1,288,361.00
Total $7,298,565.00