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HomeMy WebLinkAboutR-99-0440J-99-480 6/11/99 RESOLUTION NO. 99 440 A RESOLUTION, WITH ATTACHMENT(S), OF THE MIAMI CITY COMMISSION AUTHORIZING THE PURCHASE OF A PROPERTY LOCATED WITHIN THE EMPOWERMENT ZONE, LEGALLY DESCRIBED IN EXHIBIT "A", BY ACQUIRING THE PROPERTY OR PURCHASING THE FIRST MORTGAGE INTEREST FROM FIRST UNION NATIONAL BANK, AS TRUSTEE, PURSUANT TO TRUST INDENTURE DATED NOVEMBER 1, 1984, AT AN AMOUNT NOT TO EXCEED $75,000; ALLOCATING FUNDS THEREFOR FROM THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM; AND FURTHER AUTHORIZING THE CITY MANAGER TO EXECUTE ALL DOCUMENTS NECESSARY TO CONSUMMATE THE TRANSACTION, IN A FORM ACCEPTABLE TO THE CITY ATTORNEY. WHEREAS, the CITY OF MIAMI ("CITY") holds a second mortgage on certain property owned by MIAMI LTD. legally described in Exhibit "A" hereto and located at the below listed addresses (the "Property"); and 1230 N.W. 58`h Terrace 1611 N.W. 3 zd Avenue 1240 N.W. 591h Terrace 5899 N.W. 171h Avenue 1630 N.W. 58`h Terrace 1.527 N.W. 581h Street 1101 N.W. 62"d Street 1535 N.W. 581h Terrace WHEREAS, FIRST UNION NATIONAL BANK ("FIRST UNION") holds �ATTACHMENIT (S)I (MANED I My COMUSSION M=Mc OE JUN 2 2 1999 Reeoluflon rio. 99- 440 the first mortgage on the Property having a principal balance of $827,472.32; and WHEREAS, FIRST UNION has declared MIAMI LTD. to be in default and has commenced a foreclosure action which would extinguish the CITY'S mortgage; and WHEREAS, the property is located within the Empowerment Zone and could be an integral part of the City's Comprehensive Neighborhood Revitalization Strategy for the Empowerment Zone; and WHEREAS, the CITY has the opportunity to acquire the property by (a) purchasing it from FIRST UNION; or, (b) by acquiring FIRST UNION'S position in the foreclosure action; and WHEREAS, FIRST UNION has offered to sell to the City its interest in the property or the mortgage for $75,000; and WHEREAS, the CITY has expressed an interest to accept said offer; NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF TIME CITY OF MIAMI, FLORIDA: Section 1. The recitals and findings contained in the Preamble to this Resolution are hereby adopted by reference thereto and incorporated herein as if fully set forth in this Section. Section 2. The City Manager is hereby authorized to purchase property located within the Empowerment Zone, legally described in Exhibit "A", by acquiring the property or purchasing the first mortgage interest from FIRST UNION, as trustee, pursuant to Trust Indenture dated November 1, 1984, at an amount 2 99- 440 11 not to exceed $75,000, allocating funds therefor from Community Development Block Grant Program. Section 3. The City Manager is hereby authorizedLl to execute all documents necessary to consummate the transaction, in a form acceptable to the City Attorney. Section 4. This Resolution shall become effective immediately upon its adoption and signature of the Mayoral PASSED AND ADOPTED this 22nd day of June , 1999. JOE CAROLLO, MAYOR In accordance with Miami Code Sec. 2.36, since the Mayor dKi not inftnte 2p!)rnvcl of this legislation by signing it in the becomes effective with the elapse c regarding same, without the Mayor ATTEST: WALTER J. FOEMAN CITY CLERK or AND CORRECTNESS:& #'W34r07 : DDR: RCL ., W-1 �i The herein authorization is further subject to compliance with all requirements that may be imposed by the City Attorney, including but not limited to those prescribed by applicable City Charter and Code provisions. If the Mayor does not sign this Resolution, it shall become effective at the end of ten calendar days from the date it was passed and adopted. If the Mayor vetoes this Resolution, it shall become effective immediately upon override of the veto by the City Commission. 3 99- 440 w EXHIBIT "A" LEGAL DESCRIPTION Phase I: Parcel 1: Lots 7, 8, 21 and 22, Block 7, of ORCHARD VILLA EXTE21- SION, according to the Plat thereof as recorded in Plat Book 17 at Page 55 of the Public Records of Dade County, Florida, a/k/a 1240 N.W. 59th Street, Miami, Florida. Parcel 2: Lots 6, 7,-8 and 9, Block 12,-except the North 50 feet of Lots 6 and 7, of AMENDED MAP OF ERIC1:SON' S ADDITION TO THE CITY OF MIAMI, according to the Plat thereof as recorded in Plat Book B, at Page 88, of the Public Records of Dade County, Florida, a/k/a 1611 N.W. Third Avenue, Miami, Florida Parcel 3: Lots 9 and 10,' Block 10, ORCHARD VILLA EXTENSION, according to the Plat thereof, recorded in Plat Book 17 at Page 55 of the Public Records of Dade County, Florida, a/k/a 1230 N.W. 58th Terrace, Miami, Florida. Phase II: Parcel 4: Lots 9 and 28, Block 15, of ORANGE HEIGHTS, according to the Plat thereof as recorded in Plat Book 14, at Page 62, of the Public Records of Dade County, Florida, a/k/a 1630 N.W. 58th Terrace, Miami, Florida. Parcel 5: Lots 11, 12 and 13, Block 14, ORANGE HEIGHTS, according to the Plat thereof as recorded in Plat Book 14, at Page 62, of the Public Records of Dade County, Florida, a/k/a 1535 N.W. 58th Terrace, Miami,, Florida. Parcel 6: Lots 1 and 2, Block 14, ORANGE HEIGHTS, according to the Plat thereof as recorded in Plat Book 14, at Page 62, of the Public Records of Dade County, Florida, a/k/a 5899 N.W. 17th Avenue, Miami, Florida. Parcel 7: Lots 21, 22 and 23, Block 15, ORANGE HEIGHTS, according to the Plat thereof as recorded in Plat Book 14 at P•3ge 62 of the Public Records of Dade County, Florida, a/k/a 1527 N.W. 58th Street, Miami, Florida. t Parcel 8: Lots 23 and 24, Block 5, of WOODMERE, according to the Plat thereof as recorded in Plat Book 14, Page li of the Public Records of Dade County, Florida, a/k/a 1101 N.W. 62nd Street, . Miami, Florida.' .99- 440 CITY OF MIAMI, FLORIDA 26 INTER -OFFICE MEMORANDUM The Honorable Mayor and Members of the TO : City CommissionDATE : �N 14 1999 FILE SUBJECT: Resolution Authorizing City Manager to acquire Miami Ltd. Housing Project FROM: REFERENCES: onald H. Warshaw City Commission Agenda Item - City Manager ENCLOSURES: June 22, 1999 RECOMMENDATION: It is respectfully recommended that the City Commission adopt the attached resolution authorizing the City Manager and the City Attorney to negotiate with the representative of First Union National Bank for the acquisition of eight (8) multifamily buildings located in the Model City and Overtown neighborhoods. The attached resolution further authorizes and allocates an amount not to exceed $75,000 for the purpose of consummating the aforementioned acquisition. Funds in the amount of $75,000 are available from the Community Development Block Grant Program to cover the cost of acquiring the subject properties. The resolution further authorizes and directs the City Manager and the City Attorney to take the appropriate legal steps to complete the acquisition of the subject multifamily properties. BACKGROUND: In November 1984, a trust indenture was entered into by Florida National Bank and the Housing Financing Authority of Dade County, Florida, for the issuance of $3,400,000 in Multifamily Mortgage Revenue Bonds, 1984 Series D. The proceeds of the sale of the bonds were utilized for the acquisition, construction and rehabilitation by Miami Ltd., a Florida Limited Partnership, of eight (8) multifamily apartment buildings consisting of approximately 125 residential units for the provision of affordable housing to low and moderate income families. In addition, in November 1984, a CDBG Program loan in the amount of $1,810,000 was also made available by the City of Miami to Miami Ltd., for the rehabilitation of the aforementioned housing projects. In October, 1985, a Section 8 Moderate Rehabilitation Program Housing Assistance Payment contract was executed between the U.S. Department of Housing and Urban Development, Miami - Dade County, and the owner of the Miami Ltd. Housing Project, for the provision of rental assistance to the owner and housing accommodations to the tenant for a period of fifteen (15) years. 99- 440 Since May, 1998, Miami Ltd. has failed to make the mortgage payments to First Union National Bank, the successor in interest to Florida National Bank, as the indenture trustee, and is now in default of the first mortgage. As a result, foreclosure proceedings have been instituted by First Union against Miami Ltd. To compound the problem, in January of 1999, the Miami -Dade Housing Agency terminated the Section 8 Housing Assistance Payments contract with the owner of the Miami Ltd. Housing Project, due to the high vacancy rate which existed in each of the buildings, serious violations of the building code and U.S. HUD's Housing Quality Standards, and the owner's reluctance to make the necessary repairs to the buildings in order to provide safe, sanitary and decent housing accommodations for the residents. To date, the Miami -Dade Housing Agency has relocated all of the residents with the exception of two (2) tenants. Presently, the following multifamily buildings are vacant, abandoned and are a health and safety hazard to the local residents in the Model City and Overtown neighborhoods: 1611 N.W. 3'd Avenue 1527 N.W. 581'' Street 1230 N.W. 58' Terrace 1240 N.W. 59' Terrace 1535 N.W. 58' Terrace 5899 N.W. 176 Avenue 1630 N.W. 58' Terrace 1101 N.W. 62nd Street Over the last year, the City Administration has begun to develop a framework for the development and implementation of a Comprehensive Neighborhood Revitalization Strategy for the overall area where the aforementioned buildings are situated. This strategy will seek to create partnerships between the City of Miami, federal government, Miami -Dade County, Miami -Dade County Public School System, the private sector, community based organizations, and neighborhood residents to stimulate an increase in human services, develop new housing, enhance job creation opportunities, and promote economic and business development in the neighborhood. One key aspect of this strategy will focus on new housing and the need to increase affordable homeownership opportunities in the neighborhood. In order to stimulate affordable homeownership opportunities for area residents, the City Administration plans to recommend the establishment of two (2) homeownership zones in the Model City neighborhood. One of the homeownership zones will be designated on a ten (10) acre parcel of vacant land currently under City-olAmership located at Northwest 67" and 69d' Streets between Northwest Th and 10"' Avenues. The other homeownership zone is being proposed in the geographical area where the aforementioned Section 8 Public Housing projects are located. The proposed boundaries of the second homeownership zone would be at Northwest 62nd and 58' Streets between Northwest 12" and 17d' Avenues. It is the City's goal to 99- 440 2 W aggressively develop approximately 500 new homeownership housing units in the immediate area over the next five (5) years. In April 1999, preliminary discussions were held by the Department of Community Development, the City Attorney's Office, and legal counsel representing First Union National Bank regarding the future of the Miami Limited Housing Project. As of November 1, 1998, the outstanding balance of First Union's loan on the Miami Limited Housing Project was $1,077,254. On May 21, 1999, a written request was made to First Union National Bank to donate the abandoned Section 8 Public Housing properties to the City for the development of new affordable homeownership housing for low and moderate income families. In response to the City's request, First Union has made a counter-offer which would require the City to pay First Union $75,000 to cover a portion of the costs and legal expenses incurred by the Trustee for the filing of its foreclosure suit against Miami Ltd. The acquisition of the subject multifamily properties by the City represents a major step and promises to be a catalyst to implementation of the proposed revitalization strategy for the Model City neighborhood. In light of the private sector's financial commitments to the Empowerment Zone in the next ten (10) years, acquisition of the subject properties by the City also represents the first step of a public/private sector partnership to not only create new opportunities in the neighborhood, but also to rebuild lives. Funds in the amount of $75,000 are available from the Community Development Block Grant Program to cover the cost of acquiring the subject properties. In an attempt to promote the development of new homeownership housing units in the Model City neighborhood, it is respectfully requested that the City Commission adopts the attached resolution. DHW/DB/G�CR'/J mb <Shared/MemoMB-McmoResoMjam i LtdHousingProjecty V eJ 4 `:[ V _..� Cott �f trtt v r�\ 00"Al.D H /AHSWAV/ fir. NiA!.JAGER MAR 3 0 1999 Mr. Jose Cintron, Acting Director Community Planning and Development U.S. Department of Housing and Urban Development Florida State Office, Southeast / Caribbean Brickell Plaza Federal Building 909 S.E. First Avenue, Room #500 Florida 33131-3208 Dear Mr. Cintron: ATTACHMENT B o O BOX 330708 AMIAM! FLORIDA 33277.0+06 (3051 416• 1025 FAX 005) 400.5043 In the review and evaluation of the City's Section 8 Moderate Rehabilitation Program in response to the Management Review conducted by your office, it has become evident that there is a need for the City to administer its own tenant based housing assistance program. The purpose of this letter is to formally request U.S. HUD designation and approval for the City of Miami to administer a Section 8 Voucher Program. As you are aware, a significant concern included in the Management Review conducted by your office cited the City of Miami Section 8 Moderate Rehabilitation Program for unit overcrowding. In addition, a letter dated February 3, 1999 from the Office of Public Housing advises the City to remove three (3) units from the Section 8 Moderate Rehabilitation Program Housing Assistance Payments (HAP) Contract for the Miami Limited II Project and to provide these three (3) households with vouchers. The overcrowding of units has been a serious problem almost sine; the inception of the City's Section 8 program. Since the vast majority of the four hundred and twenty (420) available units are one (1) bedroom apartments that house young, families, an increase in family size quickly creates overcrowded conditions in these households. Since the City has never operated a Section 8 Voucher Program, limited options have been available to address this issue and alleviate the overcrowded conditions resulting from the increased family size. In response to this dilemma, the City of Miami has determined that it is in its best interest to administer a Section 8 Voucher Program, The Voucher Program will alleviate the existing overcrowded conditions by providing an additional option to place larger families in living quarters that are more conducive to the needs of the larger family size. It will enable families to find affordable housing in the private sector as opposed to the current Submitted into the ptlk record in c©nnecilon with bm .2-2L._ on k- 2 a- 9 10 *J A city cledc Section 8 Program restrictions which confine the rental assistance to specific apartment projects with limited space. Your immediate attention to this request will be most appreciated so that the Department of Community Development can initiate the appropriate action to implement its corrective action plan and address the issues identified in the Management Review. If you have any questions or require additional information regarding this request, please contact Ms. Gwendnlyn C. Warren. Director, Department of Community Development at (305) 416-2088. Sincerely r Donal . Warshaw City Manager c: Ms. Dena Bianchino, Assistant City Manager Ms. Gwendolyn C. Warren, Director DHW/DB/GC W/JBH/DKV/sjg S9- 440' Section 8 Program restrictions which confine the rental assistance to specific apartment projects with limited space. Your immediate attention to this request will be most appreciated so that the Department of Community Development can initiate the appropriate action to implement its corrective action plan and address the issues identified in the*Management Review. If you have any questions or require additional information regarding this request, please contact Ms. Gwendolyn C. Warren, Director, Department of Community Development at (305) 416-2088. Sincerely 2 Donal Warshaw City Manager c: Ms. Dena Bianchino, Assistant City Manager Ms. Gwendolyn C. Warren, Director D HW/D B/GC W/JB H/DK V/sj g S9- 4140'