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Home My WebLink AboutR-98-0796J-98-807 7/15/98 RESOLUTION NO. 98 - 796 A RESOLUTION DESIGNATING THE COMMUNITY REDEVELOPMENT AGENCY TO DEVELOP A HOUSING PLAN WITHIN FOUR (4) MONTHS FOR THE PROJECT KNOWN AS NORTHWESTERN ESTATES (A/K/A KNIGHT MANOR), TO INCLUDE, INTER ALIA, IDENTIFYING A NEW DEVELOPER FOR SUCH PLAN, FOR APPROVAL BY THE CITY COMMISSION, SHOULD THE CURRENT DEVELOPER FAIL TO COMPLY WITH THE PROVISIONS SET FORTH IN RESOLUTION NO. 98-585 WITHIN THE TIMEFRAME SPECIFIED THEREIN. A WHEREAS, pursuant to Resolution No. 95-853, passed and adopted by the City Commission on December 7, 1995, the City Commission allocated $4,750,000.00 in HOME Investment Partnership ("HOME") Program funding ("HOME Funds") to the Urban League of Greater Miami, Inc. and LHL Housing Corporation as a partnership known as Liberty Housing Associates ("Developer"), for the development of a 134-unit affordable homeownership project, planned for development at Northwest 67th and 69th Streets between Northwest 7th and loth Avenues in the Model City target area, commonly known as Northwestern Estates ("Project"); and WHEREAS, pursuant to said Resolution, the City Commission further directed the City Manager to make immediately available to the Developer $2,375,000.00 of the HOME Funds for Phase I of the Project, with the balance of the HOME Funds to be made CITY COMUSSION MEETING OF J 9 L 2 1 1998 Resolution No. 98- 796 available to the Developer for Phase II of the Project upon the completion of Phase I; and WHEREAS, Phase I of the Project consisted of the acquisition of an eleven acre site upon which the Project is to be developed ("Site"), demolition of the then existing 235 substandard units situated on the site, relocation of the ninety- six (96) tenants and the commencement of certain other pre - development activities that were required to commence construction of the Project; and WHEREAS, to date, approximately $2,201,638.00 of the $2,375,000.00 which were allocated for Phase I have been expended, to include (a) $442,000.00 for Developer's fees, general overhead and administration, (b) $725,000.00 for site acquisition, (c) $426,098.00 for tenant relocation, (d) $362,447.00 for site work (including demolition and clearing) and (e) $246,092.00 for soft costs (including legal, architectural and engineering fees); and WHEREAS, after the Developer's acquisition of the Site, the Dade County School Board condemned one (1) acre of the Site for which the Developer received approximately $144,538.00 in compensation ("Compensation"); and WHEREAS, since the Site was acquired with the HOME Funds, the said Compensation represents program income and pursuant to the Federal Register Final Rule Part 92.503 (a)(1) is required to 2 98- 796 be remitted by the Developer to the City for deposit in the City's HOME Investment Trust Fund; and WHEREAS, on February 15, 1996 the City and the Developer executed the "Covenant Not To Encumber Or Convey And To Deed Property To The City Of Miami Upon Failure To Commence Construction Within Time Stipulated Herein", whereby the City agreed to make disbursements of the HOME funds on the condition that the construction of the Project commence within twelve (12) months from the date of the Covenant; otherwise the City could record the Statutory Warranty Deed, dated February 15, 1996 and executed by the Developer conveying title to the Property to the City ("Deed"); and WHEREAS, the Developer has not commenced construction of the Project; and WHEREAS, the U.S. Department of Housing and Urban Development's District Office of the Inspector General ("OIG") in its Audit Report dated March 26, 1998, issued a finding regarding the allocation of the $4,750,000.00 in HOME Funds to the Project, which concluded that the Project was not feasible; and WHEREAS, the OIG also stated that the City did not execute its right to record the Deed; and WHEREAS, the OIG has recommended that the City be required to: (a) demonstrate how the Project can be made affordable to low and very low income families and individuals by obtaining sufficient subsidies, reconfiguring the Project, or otherwise 3 98- 79 reducing the costs; (b) provide evidence that the Developer has obtained sufficient financing to complete development of the Project; (c) reimburse $144,538.00 of program income to the City's HOME Investment Trust Fund; (d) discontinue funding to Project, except for necessary costs such as relocation and security until the City complies with the aforementioned recommendations; and (e) the City should take other appropriate action, as needed, to protect the U.S. HUD Secretary's interest and the integrity of the HOME Program, including terminating the Project; and WHEREAS, pursuant to Resolution No. 585, passed and adopted by the City Commission on June 9, 1998, the City Manager was authorized and directed to give written notification to the Developer that it will be afforded sixty (60) days from the date of the Resolution to: (a) reimburse the City the $144,538.00 in program income, (b) demonstrate how the Project will be made affordable to very low and low-income families and individual by obtaining sufficient subsidies, reconfiguring the Project or reducing the Project's cost, and (c) provide evidence that sufficient private financing has been obtained to complete the development of the Project; and WHEREAS, said Resolution also authorized the City Manager and the City Attorney to take whatever steps are necessary to ensure the City's compliance with the recommendations of the OIG, including, but not limited to terminating the Project and 4 98- 796 recording the Statutory Warranty Deed, should the Developer fail to comply with any of the provisions set forth in the Resolution within the time prescribed; and WHEREAS, inasmuch as the City is committed to the completion of this Project, in the event Liberty Housing Associates fails to comply with the City's requirements, the City must be prepared to complete the Project in a timely manner; 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 Community Redevelopment Agency is hereby designated to prepare a plan, within four (4) months, for the Project known as Northwestern Estates (a/k/a Knight Manor) that will result in the development of affordable housing ("Plan"), should the current developer fail to comply with the provisions set forth in Resolution No. 98-585, within the timeframe specified in said Resolution, for approval by the City Commission, said Plan to include: A. The identification of a new developer; B. A reconfiguration of the Project; C. A revised financing plan; 5 98- 796 D. The assurance that the Project will be affordable for low and very low-income families and individuals; and E. A three (3) year schedule for the completion and occupancy of the Project. Section 3. This Resolution shall become effective immediately upon its adoption and signature of the Mayor.' PASSED AND ADOPTED this 21st day of July f 1998. JOE CAROLLO, MAYOR In accordance with Miami Code Sec. 2-36, since the Mayor did not indicate approval of this legislation by signing it in the designated place provided; said becomes effective with the elapse often (10) days f m the da of Commissicn �n regarding same, without the Mayor exercisi ATTEST: Wafter J o , City Clerk WALTER J. FOEMAN, CITY CLERK ' 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. R � R- 796