HomeMy WebLinkAboutM-98-0378TO
FROM
CITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
The Honorable Mayor, Joe Carollo and
Members of the City Commission
Jose Garcia -Pedrosa
City Manager
RECOMMENDATION:
39
DATE : April 3, 1998 FILE :
SUBJECT : Discussion Item Relating to
Melrose Townhomes Project
Phase III
REFERENCES: City Commission Agenda Item
ENCLOSURES: April 14, 1998
It is recommended that the City Commission adopt the attached resolution, relating to the
development of Phase III of the Melrose Townhomes Project, planned in the Allapattah
neighborhood by CODEC, Inc.. The attached resolution authorizes CODEC, Inc. to proceed with
the development of the forty-six (46) twnhomes which are being planned under Phase III. The
attached resolution further directs the City Manager to convert the outstanding City loan of
approximately $1,520,145.00 owed by CODEC, Inc. to the City into a grant, less the anticipated
sales proceeds of $161,934.00, which would be provided to the City as a result of the sell -out of
Phase III. Should the City decide to move forward with the construction of Phase 111, the estimated
amount which would have to be forgiven by the City would be $1,358,211.00 ($1,520,145.00 -
$161,934.00).
BACKGROUND:
In October of 1989, through Resolution No. 89-966, the City Commission designated CODEC, Inc.,
as developer, for the development of a one hundred fifty 150-unit townhome project on the former
8.5-acre City -owned Melrose Nursery site. In order to assist the developer in moving forward with
the proposed housing project, the City agreed to provide CODEC, Ine, a $1,000,000.00 site
development/infrastructure loan, in addition to holding a mortgage of $750,000.00 for the cost of
site acquisition. The loan for site development was provided to CODEC, Inc., at an interest rate of
three percent (3%), with interest payments due semi-annually. The remaining terms of the loan with
CODEC, Inc. called for the repayment of the site development/infrastructure loan in increments of
$6,666.67 as each of the individual one hundred fifty (150) townhome units was sold by the
developer (150 units x $6,666.67 = $1,000,000.00). In addition, the $750,000.00 in land cost owed
to the City was to be recaptured at the sale of each townhome unit at $5,000.00 per unit (150 units x
$5,000.00 = $750,000.00).
In addition, the City also allocated $460,000.00 in City assistance to the project, for the purpose of
establishing a mortgage interest rate buy -down program, to assist the one hundred fifty (150)
homebuyers in securing a lower interest rate on their first mortgages with Barnett Bank.
98- 378
The Honorable Mayor, Joe Carollo and
Members of the City Commission
April 3, 1998
Page 2
The $1,000,000.00 in City assistance provided to CODEC, Inc. for the interim construction loan and
the $460,000.00 for the interest rate buy -down program was provided from the interest income
earned from the City's 1976 General Obligation Housing Bond. The Melrose Townhomes Project
site was also acquired from the proceeds of the City's 1976 General Housing Obligation Housing
Bond.
At the February 25, 1993 City Commission meeting, representatives of CODEC, Inc. made a
personal appearance to request a reduction in the City's infrastructure loan of $1,000,000.00. This
request for a reduction was made due to a substantial increase in the cost of building materials and
construction labor, experienced in South Florida, as a result of Hurricane Andrew. This increase in
the cost of the project initially impacted Phase II (50 units), since the developer had already secured
executed purchase and sale contracts with the prospective homebuyers, at previously established
purchase prices. For Phase II (54 units) and Phase III (46 units), the developer proposed to request
an increase in the sale prices from the Miami -Dade County Surtax Advisory Board, in an attempt to
offset the increase in the project's cost, due to Hurricane Andrew. This item was discussed and later
deferred, with no action being taken by the City Commission.
At the October 25, 1995 City Commission meeting, the City Commission approved CODEC, Inc.'s
request for a deferment in payment of the City's loan of $1,750,000.00 and authorized the City
Manager to execute individual partial release of mortgages for the City's loan, in order to allow
CODEC, Inc. to proceed with the purchase closings on the fifty-four (54) twnhomes constructed
under Phase II. The said resolution further instructed the City Manager to execute an agreement
with an independent escrow agent for depositing the estimated $500,000.00 in sales proceeds, which
were anticipated to be received by the City for Phase II.
Moreover, through Resolution No. 95-773, the City Commission directed the City Manager to work
with the developer, in order to determine whether it was economically feasible to proceed with
Phase III, which would consist of the remaining forty-six (46) twnhomes and return for City
Commission approval/disapproval, once CODEC, Inc. had secured additional funding for Phase III
from Miami -Dade County, through the County's Surtax Program.
Based on the attached correspondence, dated February 10, 1998, CODEC, Inc. has secured
approximately $800,000.00 in Surtax Program funding from Miami -Dade County in connection
with the development of Phase III of the Melrose Townhomes Project. Presently, the developer
needs to advise Miami -Dade County whether the City plans to proceed with the development of
Phase III.
98 -- 3"1IS
The Honorable Mayor, Joe Carollo and
Members of the City Commission
April 3, 1998
Page 3
To date, approximately $394,855.00 has been received by the City from CODEC, Inc., in
connection with the sell -out of Phase I and II of the project. In addition, since 1993, CODEC, Inc.
has not made any of the interest payments on the $1,000,000.00 site development/infrastructure loan
provided by the City. Presently, approximately $165,000.00 in interest payments are also due the
City. In total, approximately $1,520,145.00 ($1,355,145.00 + $165,000.00) is now owed to the
City, which includes the outstanding principal and interest payment.
As per Resolution No. 95-773, the City Administration is bringing back, for discussion, whether the
City should allow CODEC, Inc. to proceed with the construction of Phase III of the Melrose
Townhomes Project. As per the aforementioned resolution, CODEC, Inc. has received a funding
commitment from Miami -Dade County for $800,000,00 in Surtax Program funds. The funds are
scheduled to be recaptured by Miami -Dade County, in the event that the City decides not to proceed
with the development of Phase III.
At this time, the City has two (2) options on whether to proceed or not, with the development of the
forty-six (46) twnhomes planned under Phase III:
Option 1
Based on the proposal for Phase III submitted by CODEC, Inc., the total sell -out projections
for Phase III would only generate approximately $161,934.00 in sales proceeds in order to
reduce the City's outstanding loan of $1,520,145.00, which includes the outstanding
principal and interest payment due. In order to move forward with the construction of the
forty-six (46) twnhomes which are being planned under Phase III'the City would have to
forgive or convert the outstanding loan of $1,520,145.00 owed by CODEC, Inc. to the City
into a grant. This amount would be reduced to $1,358,211.00 ($1,520,145 - $161,934),
based on the estimated sales proceeds of $161,934.00, which would be provided to the City
as a result of the sell -out of Phase III.
Option 2
This option would involve the City not proceeding with Phase III of the project and the City
taking back title to the balance of the Melrose Townhomes Project parcel, which has not
been developed. An appraisal of the subject parcel in October of 1995, determined the fair
market value to be approximately $690,000.00. To date, the City has received only
$394,855.00 in loan payments from CODEC, Inc., on the City's original loan 'of
$1,750,000.00. Should the City Commission decide to terminate CODEC, Inc.'.s
98- 378
The Honorable Mayor, Joe Carollo and
Members of the City Commission
April 3, 1998
Page 4
development rights to the land where Phase III is being planned, the City's loss on the
outstanding loan balance of $1,355,145.00 ($1,750,000.00 - $394,855.00) could be reduced
by $690,000.00, by selling the subject parcels to another developer. There is also an
opportunity to recapture approximately $209,000.00 which is being held in escrow by
Barnett Bank, which represents the remaining balance from the mortgage interest rate buy -
down program, which was established by the City, to assist the one hundred fifty (150)
homebuyers in securing a lower interest rate on the first mortgages which were provided by
Barnett Bank.
The City Administration recommends that the City Commission approve Option 1, which would
allow CODEC, Inc. to proceed with the development of Phase III of the Melrose Townhomes
Project. Moving forward with the construction of Phase III would provide affordable
homeownership opportunities to forty-six (46) additional families in the Allapattah neighborhood,
in addition to generating approximately $20,955.00 in additional ad valorem taxes annually for the
City. Since 1994, approximately $240,537.00 in new ad valorem taxes have been received by the
City, as a result of the development of Phases I and II.
In an effort to provide homeownership opportunities to forty-six (46) low and moderate -income
families and neighborhood revitalization in the 'Allapattah neighborhood, City Commission
approval of t,attached resolution is recommended.
JGP/CMC/GCW/ H:vh
CVO- -
c: Gwendolyn C. Warren, Director
<shared-memosvh>mayorcc48
98
r1
Status
Melrose Townhomes
The following reflects the City of Miami's current status in the Melrose Townhome
project.
Total City Financing:
The following consist of the total amount of funds invested by the City of Miami in the
Melrose site/project.
Land (land cost to City) $1,200,000
Site Development 1,000,000
Interest Rate Buy -downs 460,000
Total $2,660,000
Repayment Analysis:
As of this date, Codec Inc. has made the following repayments to the outstanding City
loans.
Loans
Land Loan $ 750,000
Site Development 1,000,000
Total Loans $1,750,000
Less Releases (Phase I1) 394,855
Total Outstanding Loans $1,355,145
Interest Payments
Total Interest Due (3/92-3/98) $165,000
Total Interest Paid 0
Total Interest Owed 165,000
Total Debt Outstanding $1,520,145
Total Cost Projected:
Codec Inc., has submitted the following projected total cost of development, as well as,
their projected total sellout of the 46 units of Phase III.
Item
Cost
Cost per Unit
1) Soft Cost
$ 647,424
$14,074
2) Hard Cost
2,683,642
58,340
Total
$3,331,066
72,414
1) This category consists of the projects indirect construction cost. Items such as legal
fees, architectural, engineering, surveys, etc. are included in this category.
2) This category consists of the projects direct construction cost. Construction materials
and labor are included in this category.
1
9 8 - 378
Total Projected Sellout:
The following consists of a description of the unit breakdown, including current sales
prices, as well as, the projected increases in the sales prices. The projected increases in
sales prices are subject to Miami Dade Surtax program approval and appraisals.
Model
No of Units Floor Plan
A
28 2BR/2BA
B
9 3BR/2BA
C
9 3BR/2.5BA
Total Gross Sellout
Less total projected costs
Available funds to City
Outstanding Principal & Int.
Current Projected
Sales Prices Sales Prices
$64,850
$84,900
$85,900
$3,353,000
3,331,066
$ 21,934
$1,520,145
$69,850
$84,900
$85,900
$3,493,000
3,331,066
$ 161,934
As indicated above, if the City proceeds with the development of Phase III, the project
would make available $161,934 in repayment of the City loans. This represents the City
having to forgive $1,358,211 of the principal and interest payment owed to the City at the
present time.
98-- -378
MELROSE TOWN HOUSES
Estimated City of Miami Taxes
Unit
Owner 1
Owner 2
Monthly Tax
Date of closing
Total Taxes Paid
through 10/31/97
1
212
Gilberto Fernandez
Rosa A. Fernandez
$102.92
04/19/94
$3,087.60
2
209
Jose Juan Martinez
Vivian Crucet Martinez
$128.83
04/29/94
$3,864.90
3
716
Lourdes Iglesias
Armando Diaz
$143.24
04/29/94
$4,297.20
4
210
Ruben Gerber
Paulina Gerber
$118.29
04/29/94
$3,548.70
5
603
Arturo Fuentes
Carmen Benitez
$128.83
05/02/94
$3,864.90
6
604
Jaime Rabe[
Julia Rabel
$135.76
05/02/94
$4,072.80
7
605
Eduardo Diaz
Betsabe Diaz
$105.37
05/02/94
$3,161.10
8
909
Arsenio Mejia
Marta Mejia
$102.92
05/03/94
$3,087.60
9
609
Domingo Blanco
Nubia Blanco
$135.76
05/03/94
$4,072.80
10
606
Miguel Largaespada
Nubia Largaespada
$102.92
05/03/94
$3,087.60
11
703
Jorge Guerra
Olga L. Guerra
$128.83
05/04/94
$3,864.90
12
708
Altagracia Camejo
NSB
$106.06
05/04/94
$3,181.80
13
713
Mario Polinario
Aurora Martinez Polinario
$102.92
05/05/94
$3,087.60
14
702
Nuris Palma
Jorge Rodriguez
$128.83
05/05/94.
$3,864.90
15
906
Jesus D. Cueto
NSB
$102.92
05/05/94
$3,087.60
16
904
Gloria Flores
Ana Elsa Flores
$128.83
05/05/94
$3,864.90
17
715
Julio Medina
Bemanardina Leon
$128.83
05/06/94
$3,864.90
18
712
Anselmo Gala
Ursula Gala
$102.92
05/10/9411,
$3,087.60
19
610
Lourdes Hernandez'
Rolando Colon
$102.92
05/12/94
$3,087.60
20
707
Alfredo Barreras
Maria Barreras
$128.83
05/12/94
$3,864.90
21
701
Miguel Saavedra
Nancy Saavedra
$102.92
05/17/94
$3,087.60
C
22
709
Hector Rodriguez
Xiomara Rodriguez
$102.92
05/19/94
$3,087.60
Cam;
23
711
Idalberto Reyes
Maria C. Reyes
$128.83
05/19/94
$3,864.90
I°
24
706
Guarionex Rivera
NSB
$128.83
05/19/94•
$3,864.90
25
602
Juan Gilberto Benitez
Sonia Benitez
$105.78
05/25/94
$3,067.62
Qf2
Page 1
Unit
Owner 1
Owner 2
Monthly Tax
Date of closing
26
704
Jesus Hernandez
Silvia Hernandez
$105.37
05/26/94
27
607
Angela Treminio
Wilfredo Mejia
$106.06
06/01%94
28
208
Jorge Duenas
Rita Duenas
$105.85
06/02/94
29
905
Jesus Negrin
Nelly Diaz
$106.16
06/07/94
30
903
Oscar Lopez
Telma Lopez
$134.94
06/07/94
31
802
Rolando Calveiro
Carmen Calveiro
$102.92
06/17/94
32
901
Jorge Lopez
Delia Cabrera
$102.92
06/17/94
33
608
Febilio Penate
Rosa Penate
$102.92
06/17/94
34
902
Carlos Doval
Minerva Doval
$128.83
06/29/94
35
705
Adolfo Bello
Amelia Bello
$102.92
08/04/94
36
207
Horlirio Cruz
Eloina Cruz
$102.92
09/26/94
37
202
Maximo Granda
Fanny Granda
$102.92
09/28/94
38
801
Nicolas Cortez
Edelma Cortez
$102.92
.10/27/94
39
204
Hector Garjardo
Maria Gajardo
$128.83
10/31/94
40
203
Israel Santiago
Norma Santiago
$102.92
12/06/94
41
910
Raul Orbezo
Ruby Orbezo
$102.92
12/06/94
42
714
Williams Dimaren
Olga Dimaren
$128.83
12/06/94
43
908
Arturo Carias
Ana Carias
$128.83
12/07/94
44
907
Maria Otero
Elizabeth Giron
$102.92
12/16/94
45
710
Jose A. del Sol
Norma del Sol
$128.83
12/22/94
46
206
Maria T. Aquino
NSB
$102.92
04/04/95
47
201
Maximo Averhoff
Norma Averhoff
$102.92
04/06/95
48
205
Jose Camallery
Clara Camallery
$128.83
04/26/95
49
601
Bernardino Pardo
Irma Pardo
$102.92
04/26/95
50
211
Carmen Estevez
Benjamin Figueroa
$102.92
07/29/94i
51
1407
Yahoska Orozco
Marcos Lainez
$105.38
01/14/97'-
52
104
Otniel Granda
NSB
$105.37
01/14/97
53
103
Wilfredo Castro
Ana P. Baca
$135.76
11/20/96
54
108
Candida Portillo
Julio Salguero
$105.37
11/07/96
55
101
Lazaro Valiente
Aida Pacheco
$105.37
11/07/96
56
1309
Benigno Aguirrechu
Maurilia Aguirrechu
$105.37
10/02/96
I
57
1316
Marco Membreno
Maria Guadamuz
$105.38
10/02/96
58
1412
Gladys Martinez
Douglass Bermudez
$105.38
08/07/96
Pao
Total Taxes Paid
through 10/31/97
$3.055.73
$3,075.74
$3,069.65
$3,078.64
$3,913.26
$2,984.68
$2,984.68
$2,984.68
$3,736.07
$2,881.76
$2,778.84
$2,675.92
$2,675.92
$3,349.58
$2,573.00
$2,573.00
$3,220.75
$3,220.75
$2,573.00
$3.091.92
$2,264.24
$2,264.24
$2,705.43
$2,161.32
$2,881.76
$632.28
$632.22
$1,086.08
$842.96
$842.96
$948.33
$948.42
$1,053.80
II
Unit Owner 1
59
402
Misael Chacon
60
406
Teresa Jarquin
61
107
Jorge Prado
62
1308
Jose Martinez
63
1410
Jose A. Gonzalez
64
1402
Esbin Martinez
65
1305
Rosa Aguirre
66
1312
Octavio Amador
67
1403
Agustin Figueroa
68
1301
Armando Williamson
69
112
Jose Mario
70
404
Irma Arias
71
1313
Miguel A. Moreno
72
405
Daniel Perez
73
1408
Porfirio Pena
74
403
Raul Argenal
75
401
Daphne Cordoba
76
1411
Sandro Munguia
77
408
Clemente Sanchez
78
503
Jose B. Carrillo
79
102
Luis Pitti
80
506
Beymar Sabogal
81
1307
Ibis Diaz
82
501
Pedro Gonzalez
83
111
Marcos Carias
84
1314
Orlando Jimenez
85
1401
Altagracia Paula
86
1406
Maria Chaudry
87
105
Marcos Hoyos
88
106
Antohony Montanez
89
1311
Franklin Zapata
90
110
Erasmo Estrada
91
109
Ana Olinda Jorge
Qci
Owner 2
Silvia Chacon
Jairo Jarquin
Maria Ela Prado
Leonides Martinez
Rosalba de Gonzalez
NSB
NSB
Maria Amador
NSB
Zaida Williamson
Marleen Mario
Jorge Perez
Esperanza Zamora
Annia Vigos
Sonia Pena
Elia M. Argenal
NSB
Yahaira Chavarria
NSB
Rosalia Carrillo
Sandra Pitti
Sandra Sabogal
NSB
Rosario Peralta
Olga M. Carias
Germania Jimenez
Rocio Perez
NSB
NSB
Angela Montanez
Suyapa Zapata
Yaimisna Barrera
David Gonzalez
Monthly Tax
$105.37
$105.38
$135.76
$105.37
$105.37
$105.38
$105.37
$105.37
$105.38
$105.38
$105.37
$105.38
$105.37
$105.38
$135.76
$105.38
$105.37
$105.38
$105.38
$105.37
$135.76
$105.37
$105.38
$105.38
$135.76
$135.76
$105.38
$105.38
$105.38
$135.76
$135.76
$135.76
$105.38
Date of closing
08/27/96
07/31 /96
07/12/96
07/10/96
07/08/96
07/08/96
06/24/96
06/24/96
06/21/96
06/21 /96
05/31 /96
05/28/96
05/28/96
05/21/96
05/21 /96
05/16/96
05/10/96
04/12/96
04/12/96
04/12/96
04/12/96
04/11/96
04/11/96
04/11/96
04/03/96,
03/29/9d,
02/15/96
02/15/96
02/14/96
02/14/96
02/09/96
02/09/96
02/09/96
Total Taxes Paid
through 10/31/97
$1.053.70
$1.053.80
$1,493.36
$1,159.07
$1,159.07
$1,159.18
$1,159.07
$1,159.07
$1,159.18
$1,159.18
$1.264.44
$1,264.56
$1,264.44
$1,264.56
$1,629.12
$1,264.56
$1,264.44
$1,369.94
$1,369.94
$1,369.81
$1,764.88
$1,369.81
$1,369.94
$1,369.94
$1,764.88
$1,764.88
$1,475.32
$1,475.32
$1,475.32
$1,900.64
$2,036.40
$2,036.40
$1,580.70
Page 3
Unit
Owner 1
Owner 2
Monthly Tax
Date of closing
92
502
Francisco Germosen
NSB
.$105.38
02/02/96
93
504
Jose Menjivar
Yolanda Menjivar
$135.76
02/02/96
94
1304
Nelson Hernandez
NSB
$105.37
02/02/96
95
1310
Jose Pena
Vilma Pena
$135.76
01/29/96
96
407
Victor Chirinos
Leslie Chirinos
$135.76
01/11/96
97
1303
Cecilio Munoz
Norma Munoz
$135.76
01/11/96
98
505
Juan Torres
Kenia B. Castro
$135.76
01/11/96
99
1405
Domingo Sosa
Monica C. Sosa
$135.76
12/28/95
100
1315
Manuel Cordoba
Ana Mueller
$135.76
12/27/95
101
1302
Pablo Marrero
Denisse de los Santos
$135.76
12122/95
102
1404
Julio Figueroa
Delfica Rodriguez
$135.76
12/22/95
103
1409
Jadin Figueroa
Zurisadday Perez
$135.76
12/21/95
104
1306
Arsenio Rodriguez
Idamir Santiago Lugo
$135.76
12/21/95
Monthly taxes $12,006.22 Total taxes
Total Taxes Paid
through 10/31/97
$1,580.70
$2,036.40
$1,580.55
$2,036.40
$2,036.40
$2,036.40
$2,036.40
$2,172.16
$2,172.16
$2,172.16
$2,172.16
$2,172.16
$2,172.16
$240,537.26
Pag,
MELROSE TOWH HOMES PHASE III
GROSS INCOME
Number of
Price per
Price per
Model
Units
Unit Code 1
Gross Income
Unit Code 2
Gross Income
A
28
$64,850
$1,815,800
$69,850
$1,955,800
B
9
$84,900
$764,100
$84,900
$764,100
C
9
$85,900
$773,100
$85,900
$773,100
Total Units
46
Total 1
$3,353,000.
Total 2
$3,493,000
n
PROPOSED CITY'S PORTION OF TAXES TO BE GENERATED
FROM MELROSE TOWNHOUSES - PHASE III
MIAMI
OPERATING
DEBT SERVICE
APPROX. PROJECT TOTAL VALUE:
MINUS HOMESTEAD EXEMPTION
ESTIMATED PROJECT TOTAL VALUE
CITY'S PORTION:
9.5995
1.92
TOTAL MILL: 111.5195
2,969,050.00
(1,150,000.00)
1,819,050.00
98- 378