HomeMy WebLinkAboutR-95-0059A
J-95-76
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RESOLUTION N0.
A RESOLUTION, WITH ATTACHMENT, AUTHORIZING
THE CITY MANAGER TO EXECUTE A SUBORDINATION
AGREEMENT, IN SUBSTANTIALLY THE ATTACHED
FORM, IN CONNECTION WITH THE LEASE AGREEMENT
BETWEEN THE CITY OF MIAMI AND OLYMPIA
BUILDING PARTNERS, LTD.
BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI,
FLORIDA:
Section 1. The City Manager is hereby authorized to
execute a Subordination Agreement, in substantially the attached
form, in connection with the Lease Agreement between the City of
Miami and Olympia Building Partners, Ltd.
Section 2. This Resolution shall become effective
immediately upon its adoption.
PASSED AND ADOPTED this day of , 1995.
ATTEST:
MATTY HIRAI, CITY CLERK
PREPARED AND APPROVED BY:
RAFAEL 0. DI
DEPUTY CITY
ROD:cm:M4860
STEPHEN P. CLARK, MAYOR
APPROVED AS TO FORM AND
CORRECTNESS:
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TO : CESAR H. ODIO
City Manager
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FROM : M TTY HI I
4q 2.. C Clerk
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CITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
DATE : January 24, 1995 FILE :
Two Agreements with Olympia
sualECT : Building Partners, Ltd.
REFERENCES:
ENCLOSURES:
During the City Commission meeting of January 12, 1995, Agenda items 54-A and 54-B
passed with the proviso that Commissioner Dawkins had five working days to object, in which
case said items would be rescheduled to the February 9th Commission meeting.
AGENDA
ITEM:
54-A (Proposed resolution authorizing the City Manager to execute a subordination
agreement, in connection with the lease agreement between the City of Miami and
Olympia Building Partners, Ltd.)
54-B (Proposed resolution authorizing the City Manager to execute a loan agreement with
Olympia Building Partners, Ltd., in an amount not to exceed $600,000, said loan to
be used in the redevelopment of the Olympia Building, located at 174 East Flagler
Street, Miami, Florida; allocating funds therefor from the CDBG-Assisted Multi -Family
Rehabilitation Loan Program.)
Commissioner Dawkins did raise objections in connection with said items (see memorandum
attached) and requested a member of my staff to have both of these issues rescheduled for
consideration as part of the February 9th Commission agenda.
MH:sI
cc: Elvi Galiastegui, Agenda Coordinator (w/encl.)
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CITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANWUU l
TO : Honorable Mayor and Members of the
City Commission
,Vl
FROM : Miller J. Dawkins
Commissioner
DATE : %nA Y, M5:40 FILE
SUBJECT: p ir.a�u�tg�Dept. of
ommission Agenda
REFERENCES :Item # 54
ENCLOSURES:
As requested, I reviewed this morning, Tuesday, January 17th, with staff and the
developer of the Olympia Building, the Subordination Agreement and $6000,000 set
aside which was requested by the Department of Off -Street Parking (DOSP) at the
January 12, Commission Meeting.
The Subordination Agreement which will permit the developer to borrow $400,000 from
a private lender is fine because I have been told by staff this is a routine procedure for
developments of this type.
Now, in regards to the item requesting a $600,000 set -aside from the CDBG multi -family
rehab program, I have serious problems relative to the extent of financial commitment the
City is making to develop the Olympia Building which is City property. A review of the
records (March 24, 1994) show that we previously set -aside $1.5 million for this project
and this $600,000 will bring the City's commitment to $2.1 million for a project whose
total development costs is $5.2 million and for which $2.7 million will be paid from tax
credits.
Considering that the developer has only a private financial commitment of $400,000, it
would seem that this developer could secure the balance of his financing from an outside
source. Again without the $600,000 the City's Commitment is $1.5 million.
Upon further review of the lease and commitment of DOSP to make this development
feasible, I do not see any commitments or participation, that DOSP is putting into this
project in order to make it work. For example, flexible lease terms, or hard cash.
It appears from looking at the lease that DOSP is using the City to finance its
development without making any monetary contributions or concessions on their part.
This is the first RFP I have seen the City (DOSP) put out for bid in which the City does
all the financing for the project. If I am in error, I would like for the administration or
City Clerk to produce records showing I am wrong. 9 5 — 59
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C
Honorable Mayor and Members of the
City Commission
January 17,1995
Page Two
Therefore, I am recommending that DOSP, in some way, find a method whereby they can
assist this developer to secure the additional $600,000, needed for this project from
sources other than the City of Miami.
To recap, the following is a tabulation of this project's current sources of financing:
Sources: Tax Credit Equity
Historical Tax Credit Equity
IMI
CDGB Funds (Requested)
City of Miami HOME Loan (Committed)
Total Sources:
$1,920,000
820,000
400,000
600,000
1,500,000
$5,240,000
It appears from the above listed sources of financing that there should be ample
incentives to secure a private lender for the balance of the funds.
Based on the above development costs, in my opinion, $65,500, per unit ($5.2 million
divided by 83 units) is an outrageous price to pay for efficiency and one -bedroom units.
This is a worthwhile project for the Downtown community, however, if it cannot be
structured to maximize private financing commitments it is a bad economic deal. Again
the City Commission is allowing Housing funds to be used to fund City of Miami's
projects.
The Commission is being asked to allow the Manager, Mr. Bailey and Mr. Cook to use
"Low -Income Home Funds) to do a City project paying an estimated $65,000 per unit
(efficiency or one bedroom apartment) where Home Fund regulations says low -rent. The
maximum allowed is $500 a month per unit, so we will permit; The Manager, Mr. Bailey
and Mr. Cook to spend $65,000/unit so a developer can rent the same for $500 a month.
Remember the City of Miami has build 3 bedroom, 2 baths homes for $60,000 each.
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TO: Honorable Mayor and DATE: December 23, 1994
Members of the City Commission
P
FROM: Cesar SUBJECT: Olympia Building Redevelopment
City
On March 18, 1994, the City of Miami entered into a long term lease agreement
with Olympia Building Partners, Ltd.. for the development of a mixed use
project at the Olympia Building. The Project involves the development of
affordable rental housing by converting the existing office building into
residential apartments together with the improvement and historic
rehabilitation of the building's exterior and public spaces. The Lease
provides that the Project will be financed through a combination of mortgage
financing and the sale of equity in the form of limited partnership interests
carrying low income housing and historic tax credits.
In order to complete the financing for the Project, it is requested that the
two attached documents be approved. The first is a Subordination Agreement
which is necessary for the developer to receive private mortgage financing for
the Project, as requested by City staff.
The second document is a resolution which approves a loan from CDBG funds, in
the amount of $600,000, to complete the Project's financing. Your approval of
both items will make possible this much needed project to begin the
residential restoration of Downtown Miami's core.
mc:olypia2.doc
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