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HomeMy WebLinkAboutSEOPW-CRA-2001-12-11-Discussion Item 21-%, m LEGAULITIGATION ITEM 21 LYRIC VILLAGE m ITEM 21 M LYRIC VILLAGE SETTLEMENT DISCUSSION In accordance with the Resolution passed by the Southeast Overtown/Park West Community Redevelopment Agency (the "CRA") on October 25, 2001, authorizing a counterproposal to be given to Lyric Village Housing, Inc. ("LVHI") and St. Johns Community Development Corporation ("SJCDC"), a meeting was held on Thursday, November 8, 2001 at which time representatives from SJCDC, LVHI and Related Group of Florida, Inc. ("Related") were present in an attempt to resolve existing litigation in Case No. 00-30414-CA 13 styled City of Miami and Southeast Overtown✓Park West Community Redevelopment Agency vs. Lyric Village Housing, Inc. and St. Johns Community Development Corporation (the "Pending Litigation"). During the settlement discussions, the parties were advised and shown a copy of the Resolution passed by the CRA's Board of Directors on October 25, 2001 and were asked specific questions regarding the involvement of Jorge Perez and Related in the Lyric Village Project (the "Project"). 1. The Developers. With respect to' the involvement of Jorge Perez and Related, we were advised that while Related was willing to do "whatever it takes" to assist SJCDC in connection with the Project, including, without limitation, providing technical assistance, the representative from Related, Oscar Rodriguez, made it unequivocally clear that Related was not willing to commit its financial resources to the Project nor was Jorge Perez willing to provide any personal guaranties for the Project. 0 We advised the representative of Related that the original response to the RFQ (the "Response") was based upon a substantial commitment of Related to the Project and the Response included, without limitation, financial statements for Related and the commitment from Jorge Perez to guaranty the loan as reflected in the term sheet submitted as part of the Response from City National Bank of Miami. Related's Rodriguez reiterated that notwithstanding the Response, Related was only committed to providing non -monetary assistance to SJCDC in connection with the Project and that Related and Jorge Perez were not willing to make any financial commitment to the Project, however, Jorge Perez would maintain a nominal interest in LVHI (i.e., a 1 % interest). The Representatives from SJCDC indicated that SJCDC is currently being courted by a number of major developers, who may wish to participate in the Project. SJCDC is optimistic that it will have a financially acceptable partner to replace Related and Jackson McDaniels, the former Related employee who we understand is the current owner of LVHL SJCDC was optimistic that negotiations with its new partner would be concluded within the next several weeks. Assuming that SJCDC is successful in striking a deal with a new developer, then it would be the position of SJCDC that the entity that was selected would participate in the joint venture between SJCDC and LVHI (the "Joint Venture") and would be the same legal entity that had been selected by the CRA for the Project. M ITEM 21 2. The Site Plan. With respect to the proposed site plan for the Project, SJCDC indicated that it is prepared to move forward with the Project utilizing the same site plan that was submitted as a part of its Response. SJCDC further indicated that while it did not wish to jeopardize its ability to move forward with the Project by requesting a change in the site plan, it had been suggested to SJCDC that a revised site plan to include a commercial element along N.W. 8 h Street to act as a buffer for the Project would enhance the Project. SJCDC also acknowledged that the proposed redevelopment of the Lyric Theater which is adjacent to the site, requires use of a portion of the Project property to be utilized for the Lyric Theater renovation. The representatives of SJCDC indicated that they would be willing to accommodate the needs of the Lyric Theater project and give up a portion of the Property if they were permitted to revise their site plan. Representatives of SJCDC advised that they were prepared to have a revised site plan available for review by the CRA staff at our next settlement meeting, now scheduled for December 5, 2001. 3. Timiniz Issues. Representatives of the SJCDC reviewed the time frames set forth in the CRA Board Resolution of October 25, 2001 with respect to obtaining a term sheet for a loan, a construction loan commitment, and the time frames for performance. It was agreed that SJCDC would review the time frame set forth in the CRA Resolution and provide alternative time frames for the Project, including a detailed phasing plan, which would be presented to the CRA staff at the next settlement meeting in December. 4. Conveyance or Lease. The original RFQ envisioned that the site would be leased to the selected respondent pursuant to a long term lease. The proposal submitted to the CRA by the SJCDC and LVHI Joint Venture included a proposed rent structure for the transaction. Subsequent to the selection of the Joint Venture to develop the Project, the Executive Director of the CRA at the time, Herbert Bailey recommended to the Board of Directors that the property be conveyed to SJCDC and Related and a purchase price of $5,000.00 per unit or $480,000.00. The CRA passed Resolution No. 96-13 authorizing the CRA to sell the property to SJCDC and Related, subject to two appraisals being performed of the property to ensure that the CRA received a fair market value for the property. We are currently reviewing the CRA's books and records to determine if the terms and provisions of the Resolution were complied with and whether two appraisals were ever obtained. Based upon recent appraisals performed by the CRA in the vicinity of the property, the approximately 4.2 acre site (approximately 182,000 square feet) would have a current market value of approximately $8,190,000.00 if valued at $45.00 per square foot or $3,640,000.00 if valued at $20.00 per square foot. The "fair market value" of the property which former CRA Director Herb Bailey apparently agreed upon with SJCDC in 1997 was $480,000.00 or approximately $2.65 per square foot. While this is based on a figure of $5,000.00 per unit, there is no basis for that figure. As part of the settlement discussion the CRA Board must determine whether it is willing to sell the property to the Joint Venture instead of entering into a long term lease with the Joint Venture, and if so, at what price. We have thus far discovered none. We are also attempting to determine whether the requirements of Chapter 163, Fla. Stat. were met. The sale of the property requires that notice of the proposed sale be published in the newspaper. �« ITEM 21 5. Coun� A,pproval. As a matter of background information the Interlocal Cooperation Agreement of March 30, 1983, between the City of Miami and Miami -Dade County (the "County") requires that the County approve any developer selected as a part of the RFP process and that the County have a representative on the selection committee. The selection committee for the Lyric Village project did not contain a representative from the County nor did the County ever approve the selection of the Joint Venture. Any settlement that SJCDC and LVHI reach must be conditioned upon having the County approve the selection of the Joint Venture and the sale price, in the event that the CRA Board elects to sell the property to the Joint Venture. 6. Conclusion. Unless directed otherwise by the Board of Directors it is our intention to have a follow up meeting with representatives of SJCDC on December 5, 2001 at which time SJCDC will have identified its new partner who will replace Related and present to us their proposed site plan and time frames for the development. Based upon the information that is presented at this meeting, the Executive Director will make a settlement recommendation to the Board of Directors. r MIAl #1089836v2 M M