LTC 112-2008 Fisher Island Development - Palazzo del Sol and Palazzo Del Lunam MIAMIBEACH
OFFICE OF THE CITY MANAGER
NO. LTC # 112-2008
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LETTER TO COMMISSI~~
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TO: Mayor Matti Herrera Bower and Members of the City Commission -_~ o
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FROM: Jorge M. Gonzalez, City Manager f- - ~
DATE: April 14, 2008
SUBJECT: Fisher Island Development -Palazzo del Sol and Palazzo Del Luna
Recently, several inquiries were made to the Mayor and Commission Offices regarding the
potential effect, if any, to the City's overall flood insurance ratings based on the above noted
projects. These inquiries were caused, in large part, by misleading information disseminated
by the Service Employees International Union ("SEIU") to members of the community,
particularly to Condominium and Homeowner's Associations. A copy of the SEIU publication
is included.
The SEIU publication states that homeowners and condominiums are in danger of having
their federal flood insurance entirely revoked or severely diminished due to the City's
issuance of a building permit for these two projects. The SEIU publication bases this
allegation upon a separate situation that occurred in a city located in Oregon where that city
allegedly permitted a number of single family residences to be constructed below the
required base flood elevation. For reference, a Federal Emergency Management Agency
("FEMA") bulletin and a newspaper article that detail the circumstances in Oregon are
attached. It should be noted that the circumstances in Oregon are distinctly different from the
two Fisher Island projects, in that, the Oregon properties have livable or habitable spaces
below the base flood elevation.
Background
Palazzo del Sol and Palazzo del Luna are two projects which have been permitted for
construction on the Miami Beach portion of Fisher Island. Palazzo del Sol received a
Building Permit in October 2007; its Foundation Permit was approved on March 15, 2007.
Palazzo del Luna received its Building Permit in December 2007. The Projects, as proposed
and permitted, have all residential units above the base flood elevation. The parking
garages, which constitute non-habitable, and non-livable, space, are below the base flood
elevation. Additionally, both projects have agym/spa space above base flood elevation on
the first floor.
There are two applicable regulatory authorities that have jurisdiction regarding construction
and base flood elevation. These are the Florida Building Code and the Flood Plain
Management Requirements. Each code or regulation, and how it applies, is discussed
separately below.
Florida Building Code
The Projects have been classified as a mixed occupancy by the Building Official. Underthe
Florida Building Code, buildings that have more than one occupancy classification are
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Letter to Commission -Fisher Island Development
April 14, 2008
Page 2
considered to be mixed occupancy; that is, more than one use in each building. For both
Projects, the classifications are R-2 for multi-residential and A-3 for the gym/spa space,
which classifies the buildings as mixed occupancy.
Flood Plain Management Requirements
Based upon the premise that the Projects are a mixed occupancy in Zone AE, FEMA's
Technical Bulletin 6-93 states that professionally designed buildings that have residential
and non-residential uses (i.e., mixed occupancy), may be designed with parking garages
that are located below the base flood elevation with certain design provisions such as
structurally flood proofing the parking garage areas that are below base flood elevation. In
fact, FEMA considers any building with anon-residential area above the base flood elevation
as a "mixed use" even in cases where the Building Official does not classify it as two
different occupancies. FEMA's interpretation is broader than that of the Florida Building
Code. The Technical Bulletin is the guiding authority on the issue, as the Code of Federal
Regulations is silent as to the ability or inability to construct a garage below base flood
elevation with a mixed use building.
Therefore, the decision of the Building Official to permit the Projects as constructed with sub-
grade parking garages is correct and permissible under FEMA regulations.
I hope this fully addresses the inquiries that you have received on this issue. If you have any
additional questions or concerns, please let me know.
Attachments
C: Jose Smith, City Attorney
Rhonda Montoya Hasan, First Assistant City Attorney
Thomas Velazquez, Building Director
Jorge Gomez, Planning Director
February 14, 2008
Dear Condo Association Leader:
I am writing to alert you to a problem that Miami Beach residents might soon face
Each year, dozens of cities and counties across the nation receive letters from the Federal
Emergency Management Agency notifying them that their participation in the National Flood
Insurance Program has been put on probation and that they risk permanent suspension from the
Program. The reason? They have failed to adopt or enforce the Floodplain Management
Regulations which FEMA makes a prerequisite for participation in the Program.
Most communities take immediate action to fix the problem, because being suspended from the
Program, in the words of one Florida floodplain manager, is "a really big deal." As of the date of
suspension, flood insurance is no longer available in the suspended community, and federal disaster
assistance will no longer be provided uz the case of aflood-related emergency. In flood-prone areas,
suspension from the Program spells tragedy.
Corrective action isn't always easy, though, as the case of the City of Shady Cove, Oregon, vividly
illustrates.' FEMA inspections in Shady Cove revealed that the City had failed to enforce its
Floodplain Management Regulations by allowing seventeen single-family homes to include
prohibited basements or living spaces below the area's Base Flood Elevation. Last November,
Shady Cove was placed on probation, adding $50 to the flood insurance premiums of all
policyholders in the Ciry. Desperate to forestall suspension from the Program, City leaders have
directed the seventeen property owners to bring their properties into compliance before the City's
impending suspension in May. But, according to a contractor hired by the City to fix the problem,
there are "a very few [property owners] who said they just aren't going to comply." The fate of
flood insurance in Shady Cove is still up in the air, because insurance for everyone in the City
depends on the City's enforcement actions toward a few intransigent property owners.
A similar situation is unfolding right here in Miami Beach.
The proposed development of two Fisher Island condominium buildings, which may violate
Floodplain Management Regulations, could threaten the availability of flood insurance and
federal disaster relief for all property owners in Miami Beach. Just as the City of Shady Cove
did, the City of Miami Beach has approved prohibited basements below the local Base Flood
Elevation for the condominium buildings "Palazzo del Sol" and "Palazzo dells Luna." If these plans
go forward and FEMA finds that the City is failing to enforce the Regulations, Miami Beach could
face a crisis like Shady Cove's. Moreover, even if FEMA does not suspend participation in the
National Flood Insurance Program, the City's rating in FEhIA's Community Rating System could be
jeopardized by its failure to enforce the Regulations. If the City's rating goes down, the 15%
discount currently enjoyed on flood insurance premiums by all policyholders in the City would be
eliminated.
1 "Shady Cove flood insurance might run dry in early May." Brad Miller. January 19, 2008. The Mail-Tribune.
Southern Oregon Media Group: Medford, OR.
A public safety officer on Fisher Island, whose health and safety will be directly affected by the
prohibited basements, has appealed the building permits for Palazzo del Sol and Palazzo della Luna.
The appeals challenge whether Fisher Island should be allowed to build the basements in violation
of the FEh~ regulations and ask the City to enforce the Floodplain Management Regulations if it
allows the prohibited basements.
These appeals, filed with the assistance of the Service Employees International Union Local 11, will
be heard by the City's Floodplain Management Board at 9:00 a.m. on March 7, 2008 at Ciry Hall.
The City's Building staff has so far defended the decision to issue the permits.
If you or the members of your association are concerned about the potential rate increases or loss of
flood insurance which could result from the Ciry's irresponsible actions, please call Building Director
Thomas Velazquez at (305) 673-7610 or City Manager Jorge Gonzalez at 305-673-7010. Tell Mr.
Velazclnez and Mr Gonzalez to sto~~ranting special favors to Fisher Island that could put
the entire City at risk.
Thank you for taking the time to consider this extremely important matter. Please feel free to
contact me at 305-672-5964 with any questions or comments.
Sincerely,
Hiram Ruiz
Deputy Director
SEIU, Local 11
Page 1 of 2
Shady Cove flood insurance might run dry in early May
By By Bill Miller
for the Mail Tribune
January 19, 2008 6:00 AM
SHADY COVE -The city may find itself suspended from the National Flood Insurance Program
(NFIP) much sooner than expected. That was the biggest surprise coming out of Thursday's public
meeting to discuss violations of national floodplain regulations.
"Potentially, a suspension could be issued anytime after May 2," said Joe Strahl, president of Public
Works Management (PWM), a private company hired to help the city bring 17 violating properties
into compliance.
City officials had been under the impression that suspension was not a possibility before November, at
which time they expected the Federal Emergency Management Agency to conduct a re-inspection of
the problem properties that were discovered during FEMA's 2001 inspections.
"FEMA said they would come back to re-inspect in May, six months after our probation began," said
City Administrator Elise Smurzynski. "In our most recent communication with FEMA they've now
indicated they will also be considering suspension at that time."
Strahl said his impression is that FEMA really doesn't want to impose a suspension.
"Theoretically, they could," he said, "but what they really want is the city to enforce their floodplain
ordinance. The city has opportunities here to show what it's doing.
"Our goal is to demonstrate that the city has achieved substantial compliance and is well on the way to
full compliance."
Shady Cove was placed on NFIP probation Nov. 2. Probation adds a yearly $50 surcharge to flood
insurance premiums. Suspension from the NFIP would mean flood insurance would not be available to
residents, which could cause major problems for mortgage holders.
"Also, the city would not be eligible for disaster assistance in case of floods," said Strahl. "There
would be no federal mortgage insurance and of course a potential drop in property values."
The most serious floodplain violations involve improvements homeowners have made below the base
flood elevation, which includes basements converted into living spaces. Under FEMA guidelines,
those improvements could break away during a flood and become a hazard to homes downstream,
causing still more damage.
Councilman Gary Hughes asked if there had been any response to the letters sent to 17 property
owners who were told to bring their properties into compliance by Feb. 29.
"Several people have called and indicated their willingness to comply and in general the contacts have
been positive," said Strahl. "Some have said it's just too short of a time frame. We've also heard from a
very few who said they just aren't going to comply.
http://www.mailtribune.com/apps/pbcs.dlUarticle?AID=/20080119/NEWS/801190312/-1 /... 04/ 14/2008
Page 2 of 2
"My sense is that about half of the 17 are getting there."
He said he wants the property owners to keep in touch by letting PWM know what steps have already
been taken, what steps are planned and when those future steps will be taken.
"Feb. 29 should not be considered a final date when you will be fined," said Strahl, "but we do need to
know where you're going and when, so we can develop our reports and plans for the city."
Hughes asked what would happen if an owner refused to comply.
"Our goal is to get them to comply anyway," said Strahl, "not by throwing a tantrum, but by trying to
work with them to get the answers to issues that they feel are unreasonable."
When the opportunity to ask questions was given to the audience, a resident asked what could be done
about owners who continue to refuse.
"Is the city prepared to take those houses out of the program so the rest of us are not hurt by it?"
Strahl explained that the city could ask fora "1316 process," which, if FEMA approved, would
remove the property from the violations list and bar the property from any federal insurance or flood
assistance.
"The danger in regarding that as a quick and easy fix," said Strahl, "is that it's not designed to be a
long-term fix and it's not easy to get.
"The city has the responsibility for enforcing its ordinances," he said. "Just because someone is willing
to live with a situation on their property without insurance, does not mean that the city has lived up to
its obligation to potential future owners of the property or to other citizens who maybe impacted if
something does happen."
Judy Burgess asked if the city could publish the names or addresses of the people causing the problem.
"We certainly can," said Smurzynski. "Being a small community, the council felt they didn't want to
put anybody's property at risk, but FEMA has already released all of that information, so, it is certainly
available from the city if someone wishes to submit a public records request."
Bud Rees suggested the city create a line item in the next budget where expenses related to bringing
properties into compliance would be itemized.
The meeting adjourned with promises from Mayor Ruth Keith and the council that more FEMA
update meetings will be scheduled.
Bill Miller is a freelance writer living in Shady Cove. Reach him at newsmiller@yahoo.com
http://www.mailtribune.com/apps/pbcs.dlUarticle?AID=/20080119/NEWS/801190312/-1 /... 04/14/2008
FEMA: FEMA Notifies Shad}' Cote of hnprnding NF1P Probation Page
FEMA
FEMA Notifies Shady Cove of Impending NFIP Probation
Keleasc Date: August ', l , '_007
Release Number. R10-0?-051
~~ 2007 Rcainn X tirws Releases
SALEM. Ore. -- The U.S. Ucpartmen[ of Homeland Seeurity's Federal Emergrnec Managemrm
Agency (FEMA) has notified the City of Shady Cove of impending probation from the;Autional
flood Insurance Program (NFIP). effective November ).20(17. According to FEMA ul'licials the
probationary action is the result of deficiencies in the citq's Iloodplain managrntem program.
the NIFP is a federal program that makes federally-backed Ilood insurance mailable to residents of
communities that adopt and enforce regulations to reduce tutttrr flood dantaga. Oeer 20.Ot10
ci~mmunitics participate in the NP1P nufion-wide. with S.R million policies in ctiec[.
A Junc 32. 2007 letter dispatched from PEhfA's regional office in Bothell w:+shingum notified the
vin' that it will he placed on prohationary starts with the NFIP. The critical dcticicncies include
li.-able areas below 100-year base flotxl elecatiou and lack of hydrostatic venting in the residential
tbundations. These deficiencies are atnsidered lil'r and safety issues.
fPfMA officials said that the prohatirnt action is a no[ice at city officials that their tloodplain
management program does not meet the minimum NFIP criteria. and that the deficiencies arc serious
cnou¢h to Icad to erentual suspension from the program. They etrphasizxd that in suslxndrd
comntunitirs where flood insurance is no longer available. federal agencies arc prohibited tiom
making grants. loans or guaranties of properties in the flood hazard area. Furthemtore. if a flood
disaster is declared, certain p pee of federal disaster assistance N it I not be available.
PEMA officials said that the probation µill beunnc effective iu Shady Cove unless city officials take
the necessary steps to correct the program dciicicncies, ranted} the riolatiuns to the maximum extent
possible.. and demonsvate effective implementation o2 the local ordinance in support of the NFIP
reyuirentcnts.
The probation will not affect Qtc atailability of flood insurance [o Shady Covc residents. However. a
550 surcharge will be added to the premium for each new or renewed flood insurance policy sold in
the community for at least one year, begimting November L 2007. 'this surcharge will remain io
effect if the probation period is extended.
The Ciq of Shad} Cove currenQy has R9 flood insurance pulicits in t~rrce, with appmximateh 5_'l.R
million in coverage, which aould be affected h} the probation. FF.M:~ Region ?~ officials hate
offered to prcrvidr technical assistance to help the city remedy all pctssihle violations and achieve
hitp:! uu~u. fems.gnv!newshtewsrelease. f ema?id=39549 021 t 9/2008
PE\1:1: PE11A Votities ShaJ~ Cone of Impending \FIP Probation Pala ? of'_
compliance ~t ith mininnim itI IP crik'ria.
PE~41.4 coordinates the federal go~ernman's role in preparing fnr_ pre~~enting. mitigating the effects
of, responding to, and rear Bring from all domestic disaster. ~chether natural or man-made.
including acta of terror.
http: '~~~tic. Cema.go~ 'nett s ne~~ srelet~e. tetra?id=39549 02 19 COOR