HomeMy WebLinkAboutSEOPW-CRA-M-01-0126DOWNTOWN CONDOAC NIUM RESIDENCES
269 N.W. 7th St (Sawyer's Walk)
Miam4 n 33136 Fax 305 3581714
Phone 305-35"030
September 20, 2001
City of Miami
Community Redevelopment Agency
300 Biscayne Blvd. Way, Suite 430
Miami, Fl. 33131
Att: Annette Lewis
Acting Executive Director
Dear Ms. Lewis,
I was very pleased with our meeting today. Thank you for taking the time out of your
schedule to discuss what will be required to complete the final phase of Poinciana, the 91
unit tower. I believe all we need is for Lynn Washington of Holland and Knight who was
acting for Bank of America to complete the documents. Once that is done we will need
to reapproach Fannie Mae and Empowerment Trust to bring them back into the loop. A
copy of the October 4, 2000 letter that Bryan K. Finnie wrote to assist with the presale
question is attached for your fill
As we discussed Bank of America wants us to build the first phase of Sawyers Walk at
the same time we are building the 91 unit tower. The 58 unit first phase will be a 4 story
building. Our Buyers will be offered the option of a high rise or midrise. This should
broaden our market and will show activity on two blocks simultaneously, which will also
assist the marketing effort. You mentioned that moving forward with Sawyer's Walk
could help the City in its dispute with the County and indicated your approval of Bank of
America's proposal to provide the funding for both Poinciana Village and Sawyer's
Walk.
Horace who is also from Trelawny (Falmouth) is anxious to meet you. We would be glad
to show you around Poinciana when you have the time.
SEOPW/CRA SEOPW/Cki-�
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MIAMI-DADE
Empowerment Trust
vry Partnering for Progress
October 4, 2000
Mr. Ted H. Heitze
Mr. Horace C. Davis
Poinciana Village
Downtown Condominium Residences
269 N.W. 7`b Street
Miami, Florida 33136
Re: Poinciana Village IV
Dear Messieurs Heitze/Davis:
!4
Thank you for giving me the opportunity to discuss your Poinciana Village IV market rate
housing initiative in Overtown. As the President/CEO of the Miami -Dade Empowerment Trust,
Inc., I have been assigned the responsibility of stimulating revitalization efforts throughout the
Miami -Dade Empowerment Zone. Your project as described to me is well within the scope of
our Strategic Plan. Your desire to develop market rate housing in Overtown provides a number
of community benefits such as:
1. The development of new hoiisipg will generate new tax ratables for the City of Miami,
specifically for the Community"Redevelopment Agency (CRA), which in turn, uses these
proceeds to seed other worthwhile -real estate development initiatives;
2. The commencement of the Poinciana Village IV project will further support the
momentum created by the Net Access Point project currently under construction several
blocks from your project location; and
3. Your project will enhance the Trust's ability to stimulate additional development in
neighborhoods North: and West of your site and serve as a comparative sales database for
future funding proposals.
As discussed, your project entails the development of ninety-one (91) condominiums housed in
an eight (8)-story building. The total project cost is estimated at $10,850,000 with the following
cost allocations:
Land $2,005,375
Construction 6,923,722
Soft Costs 1,915,000
$10,844,096
and a financing gap of approximately $7,840,000.
140 West Flagler Street, Suite 1107
SEOPW/GP Miami, Florida 33130
P: 305.372.7620, F: 305.372-7629
Messieurs Heitze/Davis
October 4, 2000
Page 2
The Trust agrees to assist your efforts to raise the capital necessary to fully fund this project. We
have essentially two options. The first would be to seek direct public funds to finance the
project. This is problematic due to income "caps' usually associated with publicly funded
transactions. The second option, which is most prudent, would be to obtain a $4M publicly
backed guarantee to leverage the $7.8 million in construction financing from the private sector.
This strategy would enable your team to immediately commence development ands avoid a very
conservative pre -sale requirement while providing assurances to potential buyers that this project
is real.
The purpose of this correspondence is to demonstrate the Trust's support for the Poinciana
Village IV Housing initiatives. Please be advised that this is not a commitment of funding. Any
funding commitment, if applicable will be subject to Trust Board approval.
Thank you for contacting the Miami -Dade Empowerment Trust for your community
development needs.
Sincerely,
Bryan K. Finnie, President/CEO
Miami -Dade Empowerment Trust, Inc.
BKF:gvm,
cc: Irby McKnight
Aundra C. Wallace
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Poinciana Village Condominium Association
Statements of Fact Regarding the Status of The Development
September of the near "01
12 years ago the first phase of construction of Poinciana Village (12 residential
units) was completed and occupied. The second building (28 units) was completed and
began receiving residents in late 1996. A third phase of construction began in 1998 and
was occupied early in the year 2000. Currently 64 units are complete and have been sold.
Construction has not commenced on the final residential building (12 stories with 91
units) and a parking garage. This construction would complete the development.
The dollar amount of our condominium maintenance fees has been determined
based upon the assumption that 155 condominium unit owners would contribute to the
cost of maintaining our facility. Currently only 64 units have been completed and sold
which means that only 41 % of anticipated revenue was being generated by the collection
of maintenance fees. For the past 12 years the developer of Poinciana Village has
subsidized the deficit in the budget but that subsidy was discontinued at the beginning of
July of this year.
Due to the discontinuation of the subsidy by the developer it has been necessary
for our association to increase the monthly maintenance fees by 112% to continue to
maintain our community at a minimal level. Even with the increase we have to consider
elimination of our security services or reduction of the number of hours we have security
personnel on duty in order to make ends meet. Another increase in fees is an option that
may not be viable as many residents are unable to bear even the existing increase.
The developer of this project has been ready to begin construction of the last
phase of Poinciana Village and had a commitment for financing of that construction from
SunTrust in mid -May of the yefir 2000. That commitment came with conditions of
assistance from The CRA.
In November of 2000 the developer obtained a commitment for a financing
package from Bank gfAmerica that didn't include conditions of assistance. This package
did include funds for necessary repairs to the existing buildings and a subsidy for the
benefit of The Condominium Association. The developer would repay this subsidy. We
understand that the only obstacle to the implementation of both of these financing
-packages has been the absence of approval of The CRA for the developer to go forward.
It is our understanding that The CRA may be in favor of finding an alternative
means of development of this property and surrounding city blocks. Meanwhile the
homeowners of Poinciana Village are caught in the middle of a difficult situation without
having caused it or having any control over it.
Also at issue is a recent citation from The City ofMiami Code Enforcement
Board We are cited for parking cars on the grass. We have to do this because we can't
finish the final phase of construction, which would include a parking garage.
We are cited for the storage on our lot of a construction trailer and forklift that
were left here by the general contractor because he was poised to begin construction of
the next building.
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We are cited for maintaining a mobile office trailer on the property. It serves as an
office for the developer and for the condominium association. If we had been allowed to
complete the last phase, the developer would be gone and the association would have
office space in the final building.
Poinciana Village consists of a broad representation of homeowners. There are
doctors, lawyers and other workers in the healthcare and legal fields as well as blue-collar
workers, business managers, entrepreneurs and students. Many families are first time
homeowners, many with children. There is a substantial contingent of retired and fixed
income residents. The ethnic makeup of the community is representative of this region.
These people have invested their money and their lives in the neighborhood
based upon the belief that The City ofAfiami and the developer would eventually make
good on their stated intention to redevelop Overtown/Park West. This development
should be given a high priority, as it is the first and only successful community of
homeowners to be built in the Overtown/Park West area. It's important to the success of
the redevelopment of this area for Poinciana Village to be completed.
Instead we are faced with the real possibility that some lower income
homeowners will be forced to sell out and abandon their plans to live in this community.
This will happen soon if a remedy for the shortage of funds is not found. Realization of
the original concept of "affordable housing" in Overtown/Park West will have failed.
The following pages contain demographic information on the residents of
Poinclana Village and a timeline that shows the stages of development of the community
and details regarding the financing arrangements that have been discussed over the past
18 months. We believe this presentation will be enlightening.
Page 2 of 4
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The Residents
All 64 existing units have been sold. Following are "rough"
statistics that
have been presented as accurately as possible.
Ethnic Representation
BIack
71 %
Hispanic
20%
White
8%
Other
1 %
Livelihood
Professional
36%
Managerial
14%
Clerical
16%
Self -Employed
8%
Blue -Collar
8%
Refired
18%
Miscellaneous
There are 17 children in residence at The Village. There are 12 City and
County employees, 2 law enforcement officers, I clergyman, and 6 members of the
legal profession. There are 11 residents who are employed in the medicaMealth-care
sector and 2 in the Sports/Entertainment f field
The Poinciana Village Condominium Association has 3 full-time employees
(clericallmaintenance) and retains a security contractor that provides employment for 3
people at our facility.
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-Timefine-
Construction oiExLft Buildings
1989 First 12 units completed and sold
1990 Second building consisting of 28 units completed and began
receiving residents
1998 Most recent phase of construction consisting of 24 units was
begun
The following information was obtained from the developer and represents his
negotiations with The CRA, Sun Trust and Bank ofAmerka to build the final
phase of Poinciana Village. It supports our position that the developer is ready
and has been ready and able to commence construction of the final phase of
Poinciana Village since May of the year 2000. Apparently the only obstacle to
the construction of the final phase is the absent approval of The CRA to move
forward.
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September 1998 - The CRA offered to provide $611,200 funding for the soft costs
so the construction plans, permits and presale costs would be
covered similar to the $800,000 grant to BANE to do their New
Hope Overtown project. A meeting was set up with BANE and
the Developer and BAME agreed to work together. The.CRA
never followed through to implement the funding.
June 1999 - The CRA introduced the Developer to a Realtors Group they were
working with to find homes for pre -qualified buyers. The Realtors
were to work through the CRA to line up the required pre -sales
needed for the 91 unit construction finance. Repeated requests for
this program to be implement have not been answered.
December 1999 - The CRA introduced the Developer to Greater Miami
Neighborhoods. We understood that the original proposal to work
with BAME in 1998 was now changed to working with GMN. It
was the Developer's understanding that the $611,200 was now to
come through GMN. In a December 16, 1999 letter $260,000 of
the amount was identified. To date there has been no further
communication or follow through on this item.
May 4, 2000 - The Developer was called to a meeting at Commissioner Teele's
r office. The discussion was about what the CRA could do to help.
the Develgier get started on the 91 unit Phase H. The Developer
repeated the t611,200 funding and the $ 1 1/2 million funding
that had been proposed in conjunction with the Realtors proposal
that would be used for construction and then rolled into a soft 2nd
mortgage for the Buyers. In addition the Developer was asked to
give Great Miami Neighborhoods their records so they could see
how to help with funding for the Condo Assoc. as the Developer
has been subsidizing the non-profit Condo Association for 12
years.
At this meeting the Commissioner instructed Bill Bloom to have a
tentative Agreement drafted by July 15th, 2000 that would lead to
the buying out of the Developer's Rights in the 3 Sawyer's Walk
blocks. To this date the Developer has never seen such an
agreement.
May 15, 2000 - Letter from Suntrust setting out the terms on which they would
make the $7,838,722 construction loan for Phase II, 91 units.
Submitted to CRA.
�l?t7PW/CRA SEOPW/CRA
On
May 17, 2000 - Greater Miami Neighborhoods requested the Association's
documents so they could do a financial analysis. Documents
furnished by Developer on June 28th, 2000. There has been no
follow through on this.
May 18, 2000 - Letter regarding the meeting with Fannie Mae, Realtors
Association and the CRA to work on the 91 unit funding with
Suntrust. No response from the CRA to date.
July 28, 2000 -
Fannie Mae reported that the Realtors pre -sale program was on the
CRA agenda for July 24th but was pulled.
August 16, 2000
Follow up letter to G.M.N. as to why there has been no action
taken on our material that was delivered in June. No response.
August 22, 2000
A call from the CRA setting a follow-up meeting with Robert
Tyler to the one held May 4th in the Commissioner office. Mr
Tyler wanted to know what was happening on the proposal the
Commissioner made to buy out the Development Rights of
Sawyer's Walk. Developer responded that they never received the
draft agreement.
Mr. Tyler suggested the Developer call the Commissioner to see
_
what was causing the delay.
August 22, 2000
The Dev loper called the Commissioner's office and asked for an
appoinfi&ht. No response.
September 22, 2000 - Letter to CRA asking for information so the SunTrust loan
could be firmed up. No response.
September 26, 2000 - Letter to Commissioner Teele forwarding a copy of the
September 22nd letter to the CRA. Also mentioning that the
Developer had been trying to get an appointment to see him.
No response.
September 29, 2000- Letter to the CRA complaining about the Developer's inability to
get answers regarding our connection to GMN. No response.
October, 2000 Several meetings with Bank of America who was the lead
Bank on the financing for the last 24 units built.
,EOPW / CRA
:M.y 'EOPW/CRA
November, 2000 An agreement reached with Bank of America that would
give them a Right of first refusal for the financing of the 91
units (Phase II) and Sawyer's Walk.
November 17, 2000 The understanding with Bank of America was reduced to writing.
November 17, 2000 The required documents were forwarded with the letter of
understanding to Holland & Knight who was representing
Bank of America.
December, 2000 Bank of America confirmed that the Developer's letter of
November 17 was agreeable in principal. Lynn Washington would
be working on the Joint Venture documents shortly. He had been
out of town and very busy.
January, 2001 Bank of America again confirm that everything was fine
and that Lynn would have the paper work out shortly.
January 10, 2001 Letter to the Commissioner to try and determine the
position as to why the Developer was unable to get an appointment
to discuss the various outstanding issues and seeking the
Commissioner's assistance to help the Developer move forward on
the development plan. No response.
January 24, 2001 Meeting 4tVeen CRA and Bank of America. Bank of
America reported to the Developer that the meeting went well.
The CRA said all they want is for Poinciana to be finished and
Sawyer's Walk to be developed.
The Bank asked the CRA for a letter saying that if they entered
into an agreement to provide the funding required by Poinciana
and Sawyer's Walk that the CRA would drop the action referring
to the position on the development rights for Sawyer's Walk.
The CRA said they want a letter from the Bank saying they were
going to finance Poinciana and Sawyer's Walk.
In order to expedite things the Developer agreed to have White &
Case draw a letter that could be acceptable to all parties. The
Bank said that would be fine and that White & Case should
coordinate with Lynn Washington. Calls to Mr. Washington by
White & Case have gone unanswered.
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February 9, 2001 Bank of America again reaffirmed that the Developer's November
17th letter was acceptable in principal. The Bank spoke to Lynn
Washington before coming to Poinciana and Lynn confirmed that
he had received a call from White & Case. The Developer went
over the documentation that White & Case was working on to
submit to Lynn. Everything seemed fine and the Bank was pleased
that the Developer was moving ahead on the documentation.
February 13, 2001 Told by Holland & Knight that Lynn Washington would not be
allowed to draft documents for Bank of America.
March 6, 2001 Developer received a letter from the CRA saying that they were
in default of the land lease terms for taking possession of the Phase
H land because the financing arrangements were not finalized by
September 23, 2000.
July 20, 2001 A Code Enforcement notice was posted on the fence at
Poinciana Village. The items being complained about would have
already been solved if the Developer had been allowed to move
forward on the 91 units back in 2000.
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APPEARANCE
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(POINCIANA VILLAGE HOME OWNERSHIP ASSOCATION)
SEOPW / CRA SEOPW / CRA