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HomeMy WebLinkAboutR-98-0137J-98-108 1 /20/98 RESOLUTION NO. 9 8 - 137 A RESOLUTION, WITH ATTACHMENT(S), AUTHORIZING THE CITY MANAGER TO EXECUTE A SUBORDINATION AGREEMENT, IN A FORM ACCEPTABLE TO THE CITY ATTORNEY, IN CONNECTION WITH THE PENDING REFINANCING OF A 5-UNIT MIXED -USE HOUSING PROJECT, LOCATED AT 3659 GRAND AVENUE, COCONUT GROVE, FLORIDA, FOR THE PURPOSES OF RENOVATING SAID UNITS, BY THE COCONUT GROVE LOCAL DEVELOPMENT CORPORATION, INC. ("CGLDC"), THEREBY SUBORDINATING THE CITY'S EXISTING SECOND MORTGAGE (HOME MULTI- FAMILY REHABILITATION LOAN PROGRAM) IN THE AMOUNT OF $120,000.00 TO A NEW FIRST MORTGAGE WITH THE STATE OF FLORIDA, UNDER THE STATE'S AFFORDABLE HOUSING LOAN PROGRAM IN THE AMOUNT OF $250,000.00 FOR THE AFOREMENTIONED PURPOSE. WHEREAS, the City of Miami, through the HOME Investment Partnership Program (HOME), funded by the U.S. Department of Housing and Urban Development, has implemented the HOME Multi -Family Rehabilitation Loan Program (the "Program") for the purpose of providing financial assistance to owners of substandard apartment buildings consisting of five (5) or more dwelling units; and WHEREAS, through the Program, the City of Miami makes available deferred payment loans to property owners, which allows the City to forgive a percentage of the loan over a five (5) to ten (10) year period, on an annual basis, as long as the project remains in full compliance with the HOME Program requirements; and ATTACHMENTS) . CONTAINED N •�, 1Ti ,�, • FEB 10 1998 PkmohtAm No. - 137 WHEREAS, in December, 1996, the Coconut Grove Local Development Corporation, Inc. (CGLDC) received a loan in the amount of $120,000.00 under the City's HOME Multi - Family Rehabilitation Loan Program in connection with the rehabilitation of a 5-unit mixed - use housing project at 3659 Grant Avenue; and WHEREAS, in October, 1997, Mr. David Alexander, Executive director of the CGLDC, requested that the City subordinate its existing second mortgage loan, in the amount of $120,000.00, to a new first mortgage loan, in the amount of $250,000.00, from the State of Florida, for the purpose of renovating the property; and WHEREAS, in an effort to assist the CGLDC in securing the balance of the project financing required to complete the Project, the City Commission's adoption of this Resolution is required; NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE 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 execute a Subordination Agreement, in a form acceptable to the City Attorney, in connection with the pending refinancing of a 5-unit mixed -use housing project, located at 3659 Grand Avenue, Coconut Grove, Florida, for the purpose of renovating said units, by the Coconut Grove Local Development Corporation, Inc. ("CGLDC"), thereby subordinating the City's existing second mortgage, in the amount of $120,000.00 to a new first mortgage with the State ' 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. 9&- 137 of Florida Affordable Housing Loan Program, in the amount of $250,000.00 for the aforementioned purpose. Section 3. This Resolution shall become effective immediately upon its adoption. PASSED AND ADOPTED this10th day of February , 1998. XAVIER L.fiUAREZ, MAYOR ATTES : WALTER AN CITY CLERK COMMUNITY DEVELOPMENT REVIEW: ELBERT WATERS, DIRE T R PREPARED AND APPROVED BY: 'LINUA K. KEARSON ASSISTANT CITY ATTORNEY APPROVED AS TO FORM AND CORRECTNESS: WAVIRNEY W2197:csk:LKK 3- JR- 137 ,t Grove i al Development Corporation 3672 Grand nun P.0. PDX 3nn(. � COConucGro c. lo_- Tel: (30.7; 446 ,()l5i.) A-1- October 27, 1997 Mr. Elbert L. Waters Interim Director CITY OF MIAMI COMMUNITY DEVELOPMENT DEPARTMENT 444 SW 2"d Avenue 2"d Floor Miami, Florida 33130 Re: 3659 Grand Avenue Dear Mr. Waters: Thank you for meeting with Mr. Jeff Hepburn and myself to discuss our letter of September 22, 1997, requesting your assistance in resolving the outstanding issues regarding the above project. This letter had requested your approval to refinance the existing first mortgage from $85,000 to $250,000 in favor of the State of Florida's Affordable Housing Loan Program. CGLDC has received approval from the State to utilize their affordable housing loan program, which will pay off the private sector mortgage and provide sufficient capital to enable CGLDC to match the increased cost of the project. We hereby request that this item be referred to your Loan Committee, if necessary, on an emergency basis since we have„been waiting for your approval for over a month which is delaying our closing process. The State's loan program allows this financing to be interest free for five years, with principle only payments beginning in year three. Attached per your request is the final commitment and closing requirements from the State. Agdin, we are counting once again on your Department's support in our endeavours. Sincerely, David J. Alexan er Executive Director DJA/sk cc Jeff Hepburn - Housing Division 98- 137 STATE OF FLORIDA �-`fix' -Y DEPARTMENT OF COMMUNI fY AFFAIRS LAWTO`0111f7S � "Helping Floridians cre,ire sale, rris-ant, sustainable cor—unities" IA.AiF1, F. MURI-EY �o r,I1 v June 2, 1997 COPY Mr. David Alexander, Executive Director r Coconut Grove Local Development Corporation, Inc- P. O. Box 330075 3672 Grand Avenue Coconut Grove, Florida 33 233-0075 ftORIOA WS A.:a of Cnbcal Sate Concern Field Oifice 2796 Overseas Highway, Suite 212 Man'hcn. Fteka 33050.2227 GREEN SWAMP Area of Cntdal State Concen Feld Once 133 E39 Summed:, 8a-o-.Fla-da 33830 4E:i SOUTH ROR10A RECO1uy OfHa P 0. 30c 402, 60 0 h' %%, JSh Strc--, Nlwx, Flonda 331594022 Re: CDCSAP Affordable HoUSIn<, Loan/Rehabilitation of 36=9 Grand Avenue, Coconut Grove Dear Mr. Alexander: Enclosed is a Loan Agreement for the loan requested by the Coconut Grove Local Development Corporation, Inc. under the Community Development Corporation Support and Assistance Program_ The loan is ie the amount of Two Hundred Fifty Thousand Dollars, and is for the rehabilitation of the building located at 3659 Grand Avenue, Coconut Grove for affordable housing. The rehabilitation is to be completed within 24 months from the date of closing on the loan. N The Loan Agreement must be executed by the Chairperson of Coconut Grove Local Development Corporation, Inc. and returned to the Department x:ithin five(5) burin s days, so that it can be processed during the current fiscal _year. In addition, you need to attach an accurate legal description for each of the parcels securing the loan as Attachment A to the Loan Agreement. In order to also get moving toward a closing on this loan, I am sending you a iist of the items which the Department must have at least two weeks prior to closing on the loans. While I haven't included the entire description of each item, you can look to Section 5 of the Loan Agreement for the details of what is required: l . Survey, per Section 5(b) of Loan Agreement 2. Title insurance commitment, with copies of all matters list:�d as exceptions 2555 SHUMARD OAK BOULEVARD • TALLAHASSEE, FLORIDA 32399-2100 Phone: 904.488.8466/Suncom 278.8466 FAX: 904-921.0781/Suncom 29;-07b Internet address: http://www.State.fl.us/comaff/dca,html 9 8- 137 Mr. David Alexander, Cx.cutive Director Junc 2, 1997 Pagc T%t o - ?. Letter fro:,t Zoning Department stating compliance 4 Copy of subdivision plats, covenants, etc. 5. Copies of any DEP or other environmental approvals needed 6. Evidence that the building is loc:_ted in an eligible economically distressed portion of the Cocon;a Grove LDC service area 7. Firm commitments for funds needed to complete the rehabilitation S. Preliminar. take-out cotnrnim.": 9. Incumbencv Certificate, and co-porate resolution authorizing loan. 10. Evidence that the lots are not in a flood zone or have flood insurance I will prepare the note, mortgage and security agreement, assignment of leases, rents and contracts, mortgagor's affidavit of no liens, and other loan documents. I will get drafts of these documents to you for review well before time to close_ If you have any questions, please call me, so that we can avoid any delays. Sincerely, Bobbie Jo Finer Assistant General Counsel CC' Libby Lane, Community Program Administrator Jim Fox, Planning Manager H:\LEGAL\BJEICDCSA "kCOCOGROV\LETTER1.97 98- 137 CITY OF MIAMI, FLORIDA CAml 9 INTER -OFFICE MEMORANDUN TO : Honorable Mayor and Members of the City Commission FROM : Jose Garcia -Pedrosa City Manager RECOMMENDATION: DATE : FEB 2 1998 FILE SUBJECT Resolution Authorizing the Execution of Subordination Agreement/Coconut Grove L.D.C. REFERENCES. ENCLOSURES: City Commission Meeting of February 10, 1998 It is respectfully recommended that the City Commission adopt the attached resolution, authorizing the City Manager to execute a subordination agreement, in a form acceptable to the City Attorney, in connection with the pending refinancing proposal submitted to the City, by the Coconut Grove Local Development Corporation, for the rehabilitation of a property located at 3659 Grand Avenue. The attached resolution authorizes the City Manager to subordinate the City's second mortgage loan in the amount of $120,000 to a new first mortgage from the State of Florida in the amount of approximately $250,000.00. BACKGROUND: Since 1993, the City of Miami, through the HOME Investment Partnership Program (HOME Program) has administered the HOME Multi -Family Rehabilitation Loan Program, for the purpose of rehabilitating substandard housing units in the City's C.D.B.G. target areas. Through the program, the City is able to provide owners of substandard rental housing (5 units or more) with deferred payment loans to finance the cost of rehabilitation. The deferred payment loan financing further allows the after -rehabilitation rents to be charged to the tenants to be maintained at levels affordable to very low- low- and moderate -income residents. Moreover, the HOME Program guidelines allows for a five-year (5) or a ten-year (10) deferred payment loan, depending on the level of financing provided. The HOME Program guidelines also allows for the City to forgive ten (10%) percent or twenty (20%) percent of the total loan amount on an annual basis, as long as the project remains in full compliance with the HOME Program requirements. The HOME Program Rinds are provided to the property owner as a forgivable loan, because the Program requires the owner to provide housing accommodations to low- and very low-income tenants (60% of median income or less). As a result, the HOME Program rents are on average substantially lower than the market rents for the neighborhood where the projected is located. In December of 1996, the Coconut Grove Local Development Corporation, Inc. (CGLDC) received a loan in the amount of $120,000.00 under the City's HOME Multi -Family Rehabilitation Loan Program in connection with the rehabilitation of a 5-unit apartment building located at 3659 Grand Avenue. �Q_ 137 Honorable Mayor and Members of the City Commission Page 2 In October of 1997, Mr. David J. Alexander, Executive Director of the Coconut Grove Local Development Corporation, Inc., made a written request to the City, regarding the subordination of the City's second mortgage in the amount of $120,000.00 to a new first mortgage from the State of Florida in the amount of $250,000.00. Currently, there is a first mortgage with Bank United on the subject property in the amount of approximately $85,000.00. Presently, the assessed value of the subject is approximately $133,706.00. The $250,000.00 in State of Florida funding will be utilized by the Coconut Grove Local Development Corporation, Inc. in the following manner: 1. Pay-off of existing first mortgage $85,000.00 2. Balance of funding to complete residential renovations $30,000.00 3. Funds to complete commercial rehabilitation of ground floor $55,000.00 4. Construction of new parking lot $50,000.00 5. Other project expenses (permitting, fees, attorney fees, etc.) $30,000.00 $250,000.00 In an effort to move the proposed mixed -use housing project forward, it is recommended that the City Commission approve the Coconut Grove Local Development Corporation's request for the subordination of the City's HOME Program loan in the amount of $120,000.00. <shared-memosvh>mayorcc41 2 -� 13'7