HomeMy WebLinkAboutR-96-0210J-96-239
3/20/96
RESOLUTION NO. 9 6 210
A RESOLUTION AUTHORIZING THE CITY MANAGER TO
EXECUTE THE APPROPRIATE LEGAL DOCUMENTS, IN A
FORM ACCEPTABLE TO THE CITY ATTORNEY, WITH
FLORIDA HOUSING GROUP, LTD., IN CONNECTION
WITH THE RESTRUCTURING OF THE CITY 'S SECOND
MORTGAGE ON THE RESIDENTIAL PLAZA AT BLUE
LAGOON HOUSING PROJECT, LOCATED AT NORTHWEST
7TH STREET AND NORTHWEST 57TH AVENUE, MIAMI,
FLORIDA; AUTHORIZING A DEFERMENT OF PAYMENTS
ON THE CITY'S LOAN FOR A PERIOD NOT TO EXCEED
FIVE (5) YEARS; AUTHORIZING THE CITY MANAGER
TO SUBORDINATE ITS EXISTING SECOND MORTGAGE
TO A NEW SECOND MORTGAGE, IN AN AMOUNT NOT TO
EXCEED $600,000, FROM A PRIVATE FINANCIAL
' INSTITUTION SUBJECT TO CERTAIN TERMS AND
CONDITIONS IN ORDER TO SATISFY THE $554,550
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WHICH IS BEING REQUESTED BY THE U.S.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT;
AUTHORIZING THE SALE OF THE CITY OF MIAMI'S
NOTE, IF DEEMED APPROPRIATE; AND FURTHER
DIRECTING THE CITY MANAGER TO EXECUTE THAT
CERTAIN PLAT FOR THE PROPERTY ADJACENT TO THE
PROJECT SITE.
WHEREAS, pursuant to Resolution No. 87-620, adopted June,
1987, the City Commission approved the submission of a Housing
Development Grant (HODAG) Program application for Florida Housing
Management Group, Ltd. ("FHG"), for the construction of an Adult
Congregate Living Facility consisting of one hundred twenty-five
units ("Project"); and
WHEREAS, in recognition of the City of Miami's ("City")
severe shortage of affordable rental housing for low and moderate
income families and elderly residents, the City was successful in
+CITY COMMISSION
MEETING OF
MAR 2 6 1996
Reaofution No.
96- 210
securing a grant from the U.S. Department of Housing and Urban
Development ("U.S. HUD") in the amount of $4,650,000.00 for the
development of Residential Plaza at Blue Lagoon, located at
Northwest 7th Street and Northwest 57th Avenue, Miami, Florida;
and
WHEREAS, since May, 1991, the City of Miami has attempted to
close-out said HODAG Grant with the U.S. HUD but has been
unsuccessful, in part, because U.S. HUD has questioned the
eligibility of certain expenditures and costs incurred by FHG, in
connection with the aforementioned Project; and
WHEREAS, to resolve said issue, the City is required to
obtain approximately $554,550.00 from FHG and to forward said
amount to U.S. HUD to repay the overage; and
WHEREAS, the City Administration and City Attorney's Office
have been working jointly with FHG in an attempt to resolve this
matter and FWG has consequently requested a restructuring of the
City's loan and second mortgage that would afford FHG an
opportunity to secure a new second mortgage on the property, in
an amount not to exceed $600,000, to satisfy the said amount
being requested by U.S. HUD; and
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WHEREAS, FHG is further requesting that the City of Miami
subordinate its existing second mortgage and defer payment on
said mortgage, for a period of five (5) years, in favor of a new
second mortgage from a private financial institution subject to
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certain terms and conditions in order to obtain the funds being
requested by U.S. HUD; and
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96-- 210
WHEREAS, the City Administration recommends approval of said
action by the City Commission;
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 the appropriate legal documents, in a form acceptable to
the City Attorney, with Florida Housing Group, Ltd. (FHG), in
connection with the restructuring of the City of Miami's ("City")
second mortgage on the Residential Plaza at Blue Lagoon Housing
Project, located at Northwest 7th Street and Northwest 57th
Avenue, Miami, Florida, to defer payments on the City's loan for
a period not to exceed five (5) years and to decrease the
mortgage and note payable from $4,650,000 to $4,270,070 (said
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decrease in the mortgage and note payable is attributable to the
$554,550 in the United States Department of Housing and Urban
Development's ("U.S. HUD") ineligible costs and an additional
$102,655 of the original Housing Development Grant ("HODAG")
withheld by U.S. HUD.
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.
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9s- 210
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Section 3. The City Manager is further authorized/ to
execute the appropriate legal documents, in a form acceptable to
the City Attorney, to subordinate the City's existing second
mortgage, in favor of a new second mortgage in an amount not to
exceed $600,000 from a private financial institution subject to
certain terms and conditions in order to satisfy the $554,550
being requested by U.S. HUD, said amount to be provided to the
City at the time of closing to satisfy the indebtedness to
U.S. HUD.
Section 4. The City Manager is further authorized/ to
execute the appropriate legal documents, in a form acceptable to
the City Attorney, to sell the City's note securing its loan to
FHG, if deemed appropriate, after said loan has been restructured
to ref lect the above five ( 5 ) year def erral at a value equal to
the net present value of the income stream of the note discounted
a rate of prime, plus five (5) percentage points.
Section 5. The City Manager is hereby directed to
execute that certain plat for that property adjacent to the
Project site owned by FHG.
Section 6. This Resolution shall hPnnmP Pffarrt--ixrc
immediately upon its adoption.
PASSED AND ADOPTED this 26th day of March 1996.
A ES STEtHEN P. CLARK, MAYOR
WALTER J. F CITY CLERK
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96- 210
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PREPARED AND APPROVED BY:
LINDA KELLY KEARSON
ASSISTANT CITY ATTORNEY
APPROVED AS TO FORM AND CORRECTNESS:
A. QU77 8 111
CITY ATTO Y
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96- 210
CITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
TO Honorable Mayor and
Mem of the City Commission
FROM :Cesar H. Odio
City Manager
RECOMMENDATION:
DATE : MM 18 1996 FILE
SUBJECT : Resolution Authorizing the City
Manager to Restructure the
HODAG Mortgage
REFERENCES: City Commission Agenda
Item - March 14, 1996
ENCLOSURES:
It is respectfully recommended that the City Commission adopt the attached Resolution
authorizing the -City Manager to restructure the City's second mortgage, in connection with the
Residential Plaza at Blue Lagoon project, which was assisted through the City by a 1987
Housing Development Grant (HODAG), from the U.S. Department of Housing and Urban
Development (HUD). The restructuring is needed by the owner of the project, Florida Housing
Group, Ltd. (FHG), in order to allow it to pay HUD for funds which FHG received from the City,
but which HUD has ruled were ineligible and incorrectly disbursed to FHG.
BACKGROUND:
The Florida Housing Group (FHG) has asked the City to restructure the City's Second Mortgage
and to subordinate it to a new $600,000 second mortgage, of which the proceeds will be used to
return $554,550 to HUD. This payment to HUD is being made because HUD has ruled that
these funds were incorrectly disbursed to FHG, and that FHG must repay these funds to HUD.
Additionally, FHG has sold an adjacent parcel of land and will attempt to replat both the parcel
on which the HODAG assisted building is located and the adjacent parcel. In order to
accomplish this, the City has been asked by FHG to sign the replat as a mortgagee.
The City Administration, recognizing that FHG is providing a needed service to the community
and, as a result of this project, has created approximately 100 jobs, recommends the following:
I. Subordinating our mortgage to a new second mortgage in the amount of $600,000;
2. FHG shall pay the City $554,550 which shall be applied as follows: 50% ($277,275)
towards the principal of the $4,547,345 ($4,650,000 - $102,655) note, and 50%
towards grant;
3. A five (5) year deferral of the future amounts due under the City's mortgage and note;
4. Authorizing the sale of the note, after it has been restructured to reflect the above five
(5) year deferral, at a value equal to the net present value (NPV) of the income stream
of the note discounted at a rate of prime, plus five (5) percentage points ( at the current
prime rate of 8.25%, the discounted NPV is $290,207); and
5. Execute the new plat of the property.
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Honorable Mayor and
and Members of the City Commission
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The income stream of the note would be as follows, assuming the note is not immediately
purchased at the discounted NPV, and agreement by the City and FHG to the above terms at the
March 26, 1996, City Commission Meeting:
Face value of the note: $4,650,000
Less: Amount not funded by U.S. HUD ($102,655)
50% of $554,550 _( 277,275)
Face value of note upon payment of the $554,550 (on 5/26/96) $4,270,070
Payment date: 1 % Payments
6/19/01
$ 42,701
6/19/02
42,701
6/19/03
42,701
6/ 19/04
42,701
6/19/05
42,701
6/19/06
42,701
6/19/07
42,701
6/19/08
42,701
2% Payments for 5 years
6/19/09
85,402
6/19/10
85,402
6/19/11
85,402
6/19/12
85,402
6/19/13
85,402
$100,000 Principal Payments for 10 years
6/19/14
100,000
6/19/15
100,000
6/19/16
100,000
6/19/17
100,000
6/19/18
100,000
6/19/19
100,000
6/19/20
100,000
6/19/21
100,000
6/19/22
100,000
$100,000 Principal Payments
6/19/23
100,000
50% of the rincipal is repaid and 50% is forgiven
6/19/24
$1 135,035
Total Cash Payments to the City over the restructured 28 year term
$2,903,653
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96- 210
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Honorable Mayor and
Members of the City Commission
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Total payments to the City by FHG, assuming the note is sold at the same time (5/14/96) FHG
pays the $554,550, would total $848,568. This consists of: $554,550 which the City must pay to
HUD, $290,207 which is the net present value of the note, and $3,811 which is the interest
already paid t6 the City by FHG.
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HODAG Reimbursed to HUD $554,550
Net Present Value of FHG note, discounted at a rate of Prime + 5% $290,207
Interest previously paid by EHG $ 3,811
Total Payments to City if Note is sold at same time HUD is reimbursed $848,568
City Commission ratification of the attached resolution is recommended
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