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Home My WebLink AboutSEOPW-CRA-1996-03-18 Discussion Item 05CITY OF MIAMI, FLORIDA INTER -OFFICE MEMORANDUM ro : Chairman and Members of the Board Community Redevelopment Agency :'ROM : Herbert J. Bailey 4 Executive Director Community Redel DATE : February 21,1996 FILE : SUBJECT : Funding Consideration for Poinciana Village Phase III REFERENCES: ENCLOSURES: Mr. Ted Weitzel, developer of the Poinciana Village condominiums, has been trying to break ground for the 24 units Phase III project for quite awhile. Mr. Weitzel managed to sell nearly all units prior to Hurricane Andrew when the cost of construction was significantly less than now. The construction cost in South Florida has dramatically risen since Hurricane Andrew due to stricter building codes and sharp increases in the cost of insurance. According to Mr. Weitzel the entire sales proceed from all 24 units fall approximately $363K short of the estimated new construction cost, leaving him no option but canceling the project all together. Poinciana `tillage, one of our first residential projects with 40 one, two, and three bedrooms luxury condominiums, has been referred to as a model affordable inner-city/downtown residential development. The Community Redevelopment Agency (CRA) is committed to providing support to Mr. Weitzel to undertake the next phase of his project. After all the post -Andrew contraction cost escalation was well beyond his control. CRA has explored all options available to assist Mr. Weitzel to close his estimated construction cost gap. Therefore, it is respectfully recommended that the CRA Board consider extending a $363K grant to Mr. Weitzel from the sales proceeds of either St. Hugh Oak and/or Melrose residential projects. Although, there are a number of other funding sources such as CDBG or Section 108 are currently available, new housing construction is determined as a non -qualifying activity for the use of these funds. Should you have any questions, please advise. Enclosure 4� h: W I f,. ltaH+Liai -axe ai � E - wwrtzvwr cvrvJJUhUrfWM RESWISRCEs 269 N.W. 7th St. (Sawyers Walk) Miami. FL 33136 Fax 305-358-1714 Phone 305-358-SWO February 20, 1996 City of Miami Department of Development 300 Biscayne Blvd. Way Suite 400 Miami, F1. 33131� Att: Herbert J. Bailey Assistant City Manager Dear Mr. Bailey, Please find attached updated information regarding the construction and sales of phase III at Poinciana Village. Total Bank is interested in making the construction loan. It is my understanding that they will fund first. The City can put in -- their contribution about October to December of 1997. Total Bank will require a mortgage on the land, the Developer and City to sign and the personal guarantee of Horace Davis and myself. It's important to the viability of the budget to be able to finance the 91 unit tower so that construction can start in August 1996. Sharing overhead and sales effort between the 24 units and 91 units make;, the numbers work. In 1989-90 when the units were first pre -sold the construction costs were approximately 13 to 15% lower than today. We have lost some pre -sales and resold the units at today's higher prices. The majority of the original purchasers are still waiting and want to go ahead with their purchase. The items that were.directly increased by the code change were: -- Fire sprinkler system for new units, estimated cost $ 53,250 Hurricane shutters or strengthened glass for windows, estimated cost 31,860 Upgraded exterior door hardware to provide more strength for wind pressure, estimated cost 1,800 Increased foundation design, estimated cost 14,300 Increased roof structure design, estimated cost 3,240 Indian River Investments of Miami. Inc. Direct cost increases $ 104,450 General Partner it City of Miami Ted H. Weitzel February 20, 1996 Page 2 General increases in costs of items spread over the various subs, labor, insurance, etc. averages approximately 13 to 15% (1989 to 1996) $ 259,270 Short Fall $ 363,720 As of this date we have not determined what effect the change in County impact fees might have on increasing our costs. SAcerely, TeW H. Wel"'-7e1 President 9 1 BLOCK 46 POINCIANA VILLAGE 2-20-96 SECTION "A" - 8 UNITS SECTION "C" - 16 UNITS I. Land Pro -rated costs that were required for infrastructure, utilities, etc., based on $ 3,000 per unit $ 72,000 ----------------------------------------------------------------- II. Hard Costs Construction of 24 units and parking for• 36 units $ 1,960,510 -, Swimming pool (completed) $ 70,000 ----------------------------------------------------------------- III. Soft Cost Arch itect/Engineer,($38,400 paid) $ 48,000 Advertising ($7,500 paid) 7,500 Management, Marketing, Sales, Security, etc. for Apr. 1, 1996 through Feb. 28, 1997 70,000 (see Pro -forma Budget Sheet) Construction Loan interest 100,000 Non-profit fee (NDC) 15,000 Legal and Transfer costs 20,000 $ 260,500 ----------------------------------------------------------------- IV. INCOME FROM SALES (see attached price list dated 2-20-96) $ 1,999,290 ----------------------------------------------------------------- TOTAL SALES INCOME $ 1,999,290 Less total Development Costs-2,363,010 Short Fall $ 363,720 •• /4 ;Ib .Y ,Y,IR �i!1W �>!!. r�1V'ST }�AVAI i`h, Poinciana village, Block 46 Pro -forma Budget 2-20-96 Management, Marketing, Sales April 1, 1996 through December. 31, 1997 Section A & C 24 Units Construction period: May 1, 1996 through Dec. 311 1996 Sales Period Jun. 1, 1996 through Feb. 28, 1997 Tower 91 Units Construction period: Sales period Personnel Project Manager(17 mo.) Sales Manager (19 mo.) Sales Person (4 mo.'p/t) Sales Assistant & Move in Coordinator(19 mo.) Secretary (21 mo.) Advertising Aug. 1,. 1996 through Aug. 31, 1997 Jul. 1, 1996 through Dec. 31, 1997 Apr. 1, 1996 - Aug. 31, 1997 $ 85,000 Jun. 1, 1996 - Dec. 31, 1997 95,000 Jun. 1, 1996 - Dec. 31. 1997-" 15,000 Jun. 1, 1996 - Dec. 31, 1997 32,680 Apr. 1, 1996 - Dec. 31, 1997 36,750 $264, 430- Jun. 1, 1996 - Jun. 31, 1997 The sales effort is not being started until A & C is under construction. It is our assumption that less advertising than usual will be required because of a program that requires very little down payment on most of the units. Office Apr. 1, 1996 - December 31, 1997 Telephone, sales trailer rental, utilities, etc. Securitv Services $ . 20, 000 $ 18,900 Subsidy by Developer to Condo Assoc. to help pay for Security until 91 units start contributing to Condo's fees about Jan. 1998. 18 months at $450.00 per week for two guards. 35,100 Total Management, Marketing, Sales, Security, etc. (covers 21 months) (divided $70,000 to 24 units and $338,430 $268,430 to 91 units) There will be overlapping with starting new blocks as the same personnel and office will be used for other blocks. The starting of the next Blocks will reduce this budget., E Pre -sale Status for A & C Up dated to February 20. 1996 Doubtful pre -sales have been ,left off (the space by unit in blank)and the new price is shown. It is assumed that the other prey sales (where names are shown) are ready to proceed. 1 UNIT # 101 201 q 301 401 B 102 q 202 q 302 j_ 402 106 06 306 � 406 � 107 207 307 � 407 d 108 j 308 j 4 08 j`109 1 209 309 409 INAME OF PURCHASER IWillie & Gwen Covinxrton IM/M Childers 12nd Braithwhite IM/M Ambrose IM/M Fletcher IL. Weinaud 12nd M/M Mercado 1 Louis Sharks Johnston Jackie IMorgon Mr. & Mrs I (GeorLre Groene I Umo J a 1Oliver M/M IBrvant. Leonora 12nd Watkins jBarbara McKinnev IHunte M/M 12nd Mark Oliver (Blake, Phill IPoitier B i F. Murray (Ivy Cuevas IRodolph Martinez IDelroy Brvan IM. Salemi 24 Units I PRICE 90,420 84.890 I 84.530 j_ 96.300 I 76,510 i 79.?20 � 84,500 j_ 88,280 1 76,510 I 80.500 I 83,500 j� 88.280 j-- 76,510 I 79.720 I 1 84.500 1 70,410 I 76,510 I ir- 75,730 I 69,550 I 88,280 1 81,320 I 94.500 92,020 96.300 $1,999.290 IUNIT SIZE I 3 ?c 2 1 3 x 2 3 x 2 I 2 x 2 q I I t2 x 2� _ 2 .x 2 q 2 x 2 1 ,2 x 2 2 x 2 1 2 x 2. 1 ( 2 x 2 j 2 x 2 q 1 2 x 2 q 2 x 2 M � 2 x 2�M i 2 x 2 q I 2 x 2 1 2 x 2 2 x 2 q ( 3 x 2 q ( 3 x 2 i I 3 x 2 1 3 x 2 q DOWNMOWN CONDOPAIR JM RESIDENCES • 269 N.W. 7th sL (Sawyees Walk) Mtamt, FL 33136 Fax 305-358-1714 Phone 305-358-SWO 9 1st Floor 2nd Floor 3rd Floor 4th Floor PHASE III PRE - CONSTRUCTION PRICE LIST February 20, 1996 . 2 BEDROOM/2 BATH Indian Over Investments of Miami, Inc. Generd Pwtner $ 77,500 $ 80,500 $ 84,500 $ 90,500 3 BEDROOM/2 BATH $ 91,500- $ 94,500 $ 98,500 $105,000