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Home My WebLink AboutSEOPW-CRA-M-96-0002Law offices HOLLAND & K:A�U 701 Brtd I Awl P.O. Box 1315441(ZIP 33101-WI) Miami, Florida 33131 305-374-M FAX305789-7799 March 13, 1996 Mr. Herbert j'. Bailoy Executive Director . Southeast overtown/Park 'west community Redevelopment Agency Dupont Plaza Center, Suite #400 300 Biscayne Boulevard Way Kiamij Florida 33131 Dear Herb: 4, ►,, Atlanta SL Pelersb►up Fort Wftdale TaAahaM JadS ale Tampa taitelspd WashIPOIK D.C. Orlando West Palm Beach 8Offi= J. F233 MAN td06.7139.779i At the last meeting of the Board of the Southeast avertown/park West Community Redevelopment Agency, the Board asked us to provide advice regarding certain contracts for the purchase and sale of condcai.niums in the Poinciana Village development. Specifically, the Board asked whether the developer of Poinciana Village, Poinciana Village of Miami, Ltd. (the "Developer"), is required under such contracts to complete the construction of the condominium units which are the subject of the contracts. The Developer has represented to the Board that since the date of execution of the contracts, the Developer's cost of construction per unit has increased by approximately $3,000.00 and the Developer has requested a grant from the CRA to cover such cost increase. Z have reviewed a copy of a contract between the Developer and Alf=eda C. Rose, as purchaser, dated August 11, 1993. tt has been represented to me that the other contracts at issue include the same basic term$ (othei than the purchase price and estimated completion date) ao the contract that I reviewed. section 4.8 of the contract provides that if the Developer incurs additional construction costs which are chargeable to'the purchaser's unit exceeding $50.00 which are due to (a)a change in law or rule, (b) a new or additional. fee or. charge imposed by any governmental authority or utility, (c) an increase in labor or material costs or (d) a substantial delay in•construct:ion beyond the Developer's control, then the Developer may notify the purchaser of the additional.. costs. If the purchaser fails to agree to pay the additional costs, than the Developer has the right to terminate the contract and return the purchasers deposit. The Developer has stated that the cost for labor and materials increased significantly after the date of the contracts as a result of E/Z d C661 ZL 099S 'ON/H : b l ', A6 : b l 96 'S I 'CO (GEM) SEOPW/CRA WIN Mr. Herbert J. Bailey March 13, 1996 Page 2 gurricane Andrew and resulted in the additional cost per unit described above. It is arguable that Section 4.8 described above requires the Developer to incur the additional'cost prior to charging such cost to the purchaser or terminating the eontraot, in our vies►, however, a reasonable construction of this, provision would allow the Developer to make the detakninat'ion that there Will be additional costs prior to the oonstruction of the unit. Accordingly, . in our vier, thee' Developer has the ability. (undet the contract I reviewed) , to notify the purchaser of , the estimated additional cost and to terminate the contract if the purchaser does not agree to pay such zdditional .cost. Should you have any further questions regarding this mat.ter, please contact me at your convenience. Very truly yours, HOLLAND &MIGHT Robert J. Friedman RJF/co 'b=-376126 £/£ d 666 1 Z OME '006 : V l U/86 : V 1 96 ,£ l '£0 (M) SEOPW/C'RA' �1 � WOU I e") .... a. ••wvw•aa�&up& ^AN7LUr1"4G7 269 N.W. 7th St. (Sawyeea Walk) Miami, FL 33136 Fax 305-358-1714 Phone 305-358-8030 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 Direct cost increases $ 104,450 Indian River Investments of Miomi, Inc.®Pw,�� General Partner JG- 2 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 150 (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, Td& H. We President 1 EOPW/CRA' J 6 - 2 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 Architect/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 Short Fall -2,363,010 $ 363,720 SEOPW/CRA' 9 6 - 2 6 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: Sales Period 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 May 1, 1996 through Dec. 31, 1996 Jun. 1, 1996 through Feb. 28, 1997 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. Security 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 $268,430 to 91 units) $338,430 There will be overlapping with starting new blocks as the same personnel and office will be used for other blocks. The starting of the next Blocks will reduce this budget. SEOPW/CRS 6 Pre -sale Status for A & C Up dated to February 20. 1996 Doubtful pre -sales have been left off (the space by unit in blank)and the new price is shown. It is assumed that the other pre" sales (where names are shown) are ready to Droceed. M UNIT .0 1NAME OF PURCHASER I PRICE (UNIT SIZE I q 101 (Willie & Gwen Covington 1$ 90,420 ( 3 x 2 q q 201 q 301 ----- 1M/M Childers 12nd Braithwhite iM/M Ambrose 1 84.890 I 1 84.530 ( 3 I ( 3 x x 2 q q 2 i q 401 IM/M Fletcher 1 96,300 3 x 2 q 102 ! 1L. Weinaud 12nd M/M Mercado 1 76,510 1 ( 2 I x 2 q q 202 1Louis Sparks 1 79,720 ( 2 x 2 q q 302 1 1 84,500 ( 2 x 2 M 402 (Johnston Jackie 88,280 2 x 2 q 106 IMorgon Mr. & Mrs 1 76,510 x 2 q 1 206 1 1 80.500 2 x 2 q 306 George Groene i 83,500 2 x 2. q q 406 1 Umo.ia 1 88.280 2 x 2 107 Oliver.lM/M 1 76.510 2 x 2 q 207 (Bryant. I2nd Leonora 1 Watkins 1 79.720 ( 2 x 2 q q 307 i I 84,500 2 x 2 I 407 iBarbara McKinney 1 70,410 ( 2 x 2 q q 108 1Hunte q 12nd M/M 1 Mark Oliver I 76,510 I 2 x 2 q q 208 1 Blakey Phill 1 75.730 1 2 x 2 308 iPoitier B 1 69,550 ( 2 x 2 q q 4G-8 1 F. Murray 1 88.280 2 x 2 q q 109 1Ivy Cuevas 1 81,320 3 x 2 g q 209 1Rodolph Martinez 1 94.500 3 x 2 � 309 1Delroy Bryan 1 92,020 ( 3 x 2 q p 409 M. Salemi j 96,300 j 3 x 2 9 q 24 Units $1,999.290 q I SEOMCRA 9 6 - `� i i i i LVa7A•V\Ia\ VVl\i/Vp1LL\1U1n MM,0i1JCin%;M0 269 N.W. 7th St. (Sawyeen Walk) Miami. FL 33136 Fax 305-358-1714 Phone 305-36843030 u PHASE III PRE — CONSTRUCTION PRICE LIST February 20, 1996 2 BEDROOM/2 BATH 3 BEDROOM/2 BATH 1st Floor $ 771500 $ 91,500- 2nd Floor $ 80,500 $ 94,500 3rd Floor $ 84,500 $ 98,500 4th Floor $ 90,500 $10.5,000 Indian River Investments of Miami. Inc. SEOPW/CR9 9 6 - General Ptatner or Address Folio # (Land) Folio # (Building) Year Built Tax Assessed Value Land Building # of Units 1 BD 2BD Occupancy Average Rent Property Manager 1994 NOI 1994 Taxes 1995 NOI 1995 Taxes 800 N. Miami Avenue 01-0103-070-1010 01-0103-070-1081 1989 $10,300,000 $2,532,210 $7,767,790 356 108 248 90% $693 The Related Group of Fla. $825,565 $301,315 $1,059,147 $298,M SEOPW/CRA' a 6 -