HomeMy WebLinkAboutR-97-0719J-97-672
10/2/97
RESOLUTION NO. 9 1- 719
A RESOLUTION RELATING TO THE 130-UNIT WEST BRICKELL
APARTMENTS PROJECT ("PROJECT"), LOCATED AT 955 S.W.
2ND AVENUE, MIAMI, FLORIDA AND DEVELOPED BY THE
DOWNTOWN MIAMI COMMUNITY DEVELOPMENT COALITION
(DMCDC) AND THE RELATED GROUP OF FLORIDA; AUTHORIZING
THE CITY MANAGER TO EXTEND A $500,000, LOAN TO DMCDC
FROM COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG)
PROJECT ENTITLED "MULTI -FAMILY REHABILITATION LOAN
PROGRAM", ACCOUNT CODE, 799201-452216 FOR SAID
PROJECT; FURTHER AUTHORIZING THE CITY MANAGER TO
EXECUTE THE NECESSARY DOCUMENTS, IN A FORM
ACCEPTABLE TO THE CITY ATTORNEY, FOR THIS PURPOSE,
SUBJECT TO CERTAIN TERMS AND CONDITIONS AS SPECIFIED
HEREIN.
WHEREAS, at the July 13, 1995, City Commission meeting, pursuant to Resolution
No. 95-561, the City Commission allocated funding, in an amount not to exceed $850,000
in unexpended CDBG Program funding to the Downtown Miami Community Development
Coalition (DMCDC) in connection with the development of a 130-unit affordable housing
project planned at 955 S.W. 2nd Avenue; and
WHEREAS, said funding was approved to assist DMCDC in acquiring the subject
parcel, based upon the average of the appraised values; and
WHEREAS, two (2) appraisals were secured by the City and it was determined that
the market value of the development site was $688,000; and
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Resolution No.
9'7- 719
WHEREAS, based on the market value, approximately $688,000 in CDBG Program
funding was made available by the City to DMCDC in connection with the acquisition of
the development site; and
WHEREAS, construction of the West Brickell Apartments Project was completed in
May, 1997, and the housing project has experienced financial problems associated with
the project financing sources and with the general contractor; and
WHEREAS, in an effort to ensure the financial viability of the Project, the City
Administration recommends extending a loan, in the amount of $500,000, to DMCDC; and
WHEREAS, approximately $500,000 is available from CDBG Project entitled CDBG-
Assisted Multi -Family Housing Rehabilitation Loan Program, Project Account No. 799201-
452216;
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 extend a $500,000 loan to
Downtown Miami Community Development Coalition (DMCDC) developer of the 130-unit
West Brickell Apartments Project (Project), located at 955 S.W. 2nd Avenue, Miami,
Florida, said loan to be subject to: 1) a five percent (5%) interest rate over a thirty-year
period, 2) grantee making interest payments only over the first five years of the loan and
thereafter to be fully amortized over the remaining twenty-five years, with funds therefor
hereby allocated from CDBG Project entitled "Multi -Family Housing Rehabilitation Loan
Program", Account Code 799201-452216.
Section 3. The City Manager is hereby authorized' to execute the necessary
documents, in a form acceptable to the City Attorney, to effect said transaction.
Section 4. This Resolution shall become effective immediately upon its adoption.
PASSED AND ADOPTED this 14th day of October , 1997.
ATTEST/
WALTER J. AN, CITY CLERK
DEPARTMENT OF COMMUNITY DEVELOPMENT
REVIEW A PR VAL:
ELBERT'L. WATERS, INTERIM IRECTOR
BUDGETARY REVIEW
DIPAK PA H, DIRECTOR
BUDGET & MANAGEMENT ANALYSIS
PREPARED AND APPROVED BY:
LINDA K. KEARSO
ASSISTANT CITY ATTORNEY
W 1923:csk:LKK
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JOE CAROL , MAYOR
APPROVED AS TO FORM AND
CORRECTNESS:
A /QU,,fVV J O
CITY ATTORI
' 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.
3 97_ 719
TO
FROM
CITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
Honorable Mayor and
Members of the City Commission
City Manager
RECOMMENDATION:
• 32
DATE : OCT % FILE:
SUBJECT:* Resolution Relating to West
Brickell Apartments Project
REFERENCES: City Commission Agenda Item
ENCLOSURES: October 14, 1997
It is respectfully recommended that the City Commission adopt the attached resolution, authorizing
the City Manager to allocate $500,000.00 in Community Development Block Grant Program
funding to the Downtown Miami Community Development Coalition as a loan, in connection with
the financing of the West Brickell Apartments Project, located at 955 S.W. 2" Avenue. The
$500,000.00 in CDBG Program funding has been identified and is available from CDBG Project
entitled "Multi -Family Housing Rehabilitation Loan Program," Project Account Code 799201-
452216.
BACKGROUND:
At the July 13, 1995 City Commission meeting, the City Commission, through Resolution No. 95-
561, allocated funding in an amount not to exceed $850,000.00 in unexpended Community
Development Block Grant Program funding, to the Downtown Miami Community Development
Coalition, in connection with the development of a 130-unit affordable housing project planned at
955 S.W. 2°d Avenue. The afore -mentioned funding was approved to assist the project sponsor in
acquiring the subject development site, subject to the City securing two (2) appraisals. Based on the
two (2) appraisals secured by the City, approximately $688,000.00 in CDBG Program funding was
made available by the City, to the Downtown Miami Community Development Coalition, in
connection with the acquisition of the development site for the construction of the West Brickell
Apartments Project.
In August of 1997, representatives of the Downtown Miami Community Development Coalition
and "The Related Group of Florida (joint developers) made a request to the City, for additional
financial assistance in connection with the afore -mentioned housing project. This request. for
financial assistance is based on problems experienced by the developers due to substantial cost over-
runs that resulted from both the general contractor and the electrical sub -contractor abandoning the
job prior to the completion of the project. This in turn resulted in an increase in cost of construction
(i.e., liquidated financial penalties from equity investors, increased overhead expenses, property
taxes, insurance and marketing expenses).
97- 719 1
E
Honorable Mayor and
Members of the City Commission
Page 2
0,
The proceeds of the loan would be used to partially cover the increase in construction cost
experienced by the developer, in addition to reducing the existing debt on the project. The City's
loan to the Downtown Miami Community Development Coalition would be at five (5%) percent
over a thirty-year (30) period. Over the first five (5) years, the corporation would be required to
make interest -only payments of $25,000.00 annually. During years six (6) through thirty (30), the
loan would be fully amortized, with payments to the City of $35,075.00 annually.
City Commission ratification of the attached resolution is recommended.
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