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Home My WebLink AboutR-95-0585RESOLUTION NO. 9 5- 585 A RESOLUTION AUTHORIZING THE CITY MANAGER TO PREPARE AND SUBMIT AN APPLICATION, IN A FORM ACCEPTABLE TO THE CITY ATTORNEY, TO THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ("HUD"),FOR A LOAN UNDER THE HUD SECTION 108 PROGRAM IN AN AMOUNT NOT TO EXCEED $5.5 MILLION, FOR THE PURPOSE OF FINANCING THE DEVELOPMENT OF A FOREIGN TRADE ZONE COMPLEX, LOCATED IN THE WYNWOOD TARGET AREA TO BE CONSTRUCTED AND OPERATED BY DADE FOREIGN TRADE ZONE, INC.; FURTHER AUTHORIZING THE CITY MANAGER AND THE CITY ATTORNEY TO PREPARE THE NECESSARY DOCUMENTATION TO COMPLETE THE APPLICATION PROCESS. WHEREAS, the City of Miami is committed to assisting private investments that will create new jobs and remove slum and blight in the designated Community Redevelopment Target Area; and WHEREAS, the Wynwood Foreign Trade Zone complex is located within the Wynwood target area and the City's Enterprise Community area; and WHEREAS, the proposed project is a privately initiated effort which will revitalize approximately i& acres to create an industrial park and free trade zone on the site and provide a minimum of 855 low and moderate income individuals with employment opportunities; and WHEREAS, it is quite difficult to finance the proposed Project through the conventional financing means; and cm CO UIISSION MEETING OF J U L 13 t945 Resolution No, 95- 585 WHEREAS, the developer has requested the assistance of the City for the purpose of putting together a financing package under the United States Department of Housing and Urban Development's Section 108 Loan program; and WHEREAS, repayment of the HUD Section 108 Loan shall be made from revenues generated by the Project; and WHEREAS, the Dade Foreign Trade Zone, Inc.,, will collateralize the project to the satisfaction of HUD guidelines, so as to minimize impact on future Community Development Block Grant allocations, which must be pledged as collateral for the said loan; 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 prepare and submit an application, in a form acceptable to the City Attorney, to the United States Department of Housing and Urban Development for a Loan in an amount not to exceed $5.5 Million under the HUD Section 108 program, for the purpose of financing the development of a Foreign Trade Zone Complex, located at approximately N.W. 22nd Street, to N.W. 23rd Street, 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. 2- 95- 585 I from N.W. 5th Avenue to N.W 2nd Avenue, Wynwood Target Area, Miami, Florida. Section 3. The City Manager and the City Attorney are hereby further authorized to prepare the necessary documentation to complete the application process. Section 4. This Resolution shall become effective immediately upon its adoption. PASSED AND ADOPTED this 13th day of July, 1995. STEP EN P. CLARJt, MAYOR ATTEST: WALTER J. OE CITY CLERK PREPARED AND APPROVED BY: LINDA K. KEARSON ASSISTANT CITY ATTORNEY APPROVED AS TO FORM AND CORRECTNESS: T A. INN ONES, III CITr]AEY W248:CS :LKK 3- CITY OF MIAMI, FLORIDA INTER -OFFICE MEMORANDUM77 TO Honorable Mayor and Members DATE : June 15, 1995 FILE of the City Commission Approval of MUD Section 108 SUBJECT : Loan Application on behalf of Dade Foreign 'Trade Zone, Inc. FROM Ces I REFERENCES: City Commission Meeting City er ENCLOSURES, of 7/13/95 1 RECOMMENDATION: It is respectfully recommended that the City Commission adopt the attached Resolution authorizing the City Manager to submit an application on behalf of the Dade Foreign Trade Zone, Inc., in an amount not to exceed $10 million, for the development of an industrial park and foreign trade zone complex in the Wynwood target area of the City of Miami. The Resolution further authorizes the City Attorney to prepare the contract, notes and mortgage to be presented to HUD in support of the Section 108 Loan Guarantee application. BACKGROUND: On February 23, 1995, a settlement was reached and an agreement executed by and between Wynwood Community Economic Development Corporation, Inc., Dade Foreign Trade Zone, Inc., OSJ Management and Development Corporation, Inc. and the City of Miami, which stipulates that the City of Miami would apply for a HUD Section 108 loan, in an amount not to exceed $10 million, to assist in the development of an industrial park and foreign trade zone complex in the Wynwood target area of the City of Miami. Said complex will redevelop approximately 16 acres of slum and blighted and/or vacant land previously donated to Wynwood Community Economic Development Corporation, Inc., a Florida non-profit corporation and posteriously leased to the group and partners, and is expected to generate 855 jobs in the area. Additionally, the project will bring about a sizable increase in the land values of the subject properties and neighboring areas. The draft application submitted herein more particularly describes the nature of the project and the financing package that will be presented to HUD for approval of funding. Said application specifically addresses provisions that must be made in order to collateralize the project so as to minimize its potential impact on the City's future CDBG allocations, evidences the feasibility of the project and provides verification of commitment to follow established HUD and other pertinent procedures and guidelines. In view of the above, it is hereby recommended that the proposed resolution be adopted by the City Commission. ' Attachment: Proposed Resolution 95- 585 r CITY OF MIAM19 FLORIDA DRAFT Application for Section 108 Loan Guarantee Assistance # B-95-MC-12-0013 Wynwood Foreign Trade Zone In order to meet the national goals and objectives established by HUD, and those established by the Enterprise Community Program, the City of Miami, FL, is applying for HUD Section 08 Loan Guarantee Assistance pursuant to 24 CFR 570.700 (sub -part M). In this application, the City is requesting $10,000,000 in Section 108 funds to be used by Dade Foreign Trade Zone, Inc. (DFTZ) to develop 322,000 s.f. of office/warehouse space at the Wynwood Foreign Trade Zone. Development will be phased over 3 years and a twenty year (20 yr) fully amortizing repayment schedule is requested for the 108 loan. Section 108 Loan Guarantee Assistance Application ' City of Miami July 1st, 1995 Page 2 PROJECT ]DESCRIPTION In 1993 the Wynwood Community and Economic Development Corporation was granted authority to operate the Wynwood Foreign Trade Zone. The Wynwood FTZ is be on a 14.42 acre site within the City's Federal Enterprise Zone, bounded by NW 22nd and 23rd Street and NW 2nd and 5th Avenues. WCEDC was granted title to 12.5 acres of the proposed site by the City and controls the balance of the property under contract for purchase from various private -ownership interests. WCEDC has granted management authority to its wholly owned affiliate corporation OSJ Management and Development, Inc. (OSJ) to operate _the Zone. OSJ has assigned operating and development authority within the Zone to DFTZ and will retain customs - operations only. WCEDC has entered into a ground -lease with DFTZ for all properties. WCEDC owns and has agreed to sub -ordinate as well as assign rents and revenues of same to the proposed Section 108 assistance. Exhibit I included herein contains a detailed development budget for the project, a summary of which follows: Warehouse (Turnkey) $5,353,920 Office (Turnkey) 999,340 Sitework 1,790,261 General Conditions/Soft Costs 637,618 Construction DH/F 1-317,171 Subtotal S109098,310 Land Acquisition (WCEDC) $1,800,000 Land Acquisition (Other) 800,000 Debt Service/Operating Reserves $2,355,479 Subtotal , $4,955,479 Total Project Cost $15,053,789 4 Section 108 Loan Guara, a Assistance Application " City of Miami July 1st, 1995 Page 3 The project will be financed by the following sources: Section 108 $10,000,000 WCEDC 1,800,000 DFTZ 3.253,289 $159053,789 Project development will be undertaken over a 3 year period. DFTZ will provide bridge financing during the construction period, with Section 108 proceeds used to acquire on a "turnkey basis" -completed phases as follows: Phase I (30,000 sf) $945,600 Phase II (150,000 sf) 4,728,000 E,hase 111 (140,000 sf)- 4,326,400 TOTAL (320,000 sf) $10,000,000 With repayment to commence in year 4 and full amortization of the Section 108 logan over the remaining 17 years. Section 108 Loan Guamnwc Assistance Application , City of Miami July lst, 1995 Page 4 ` REPAYMENT SCHEDULE a) Loan amouhti $10,000,000 b) Term: 20 years c) Repayment: Year 1 - Interest only Year 2 Interest only Year 3 - Interest only Year 4 - Interest only " Year 5-19 - $666,700 per annum plus interest Year 20 - $666,200 plus interest d) Security Pledger • First mortgage on real estate • First security interest in land -lease and rents/revenues e) Repayment Sources: (i) Operating revenues (ii) Security pledges (iii) Future CDBG-entitlements 95— 585 ,t .� Section 108 Loan Guara -)Assistance Application , °e City of Miami July 1 st, 1995 Page 5 NATIONAL OBJECTIVES The proposed project will expand the City's extent of support of national objectives `through: (I) job creation for low/moderate income individuals, the unemployed and the homeless, through the City's JTPA program administered by -the City's Neighborhoods Jobs Program and other efforts (according to US. Census statistics for 1990, the unemployment rate in the Wynwood Target Area in 1990 reached 25%, and averaged close to 12%); (ii) revitalization of a predominantly low/moderate income neighborhood (the median household income in the Wynwood Target area in 1990 was $13,258, while average per capita income barely reached $7,500); (iii) provision of assistance to a business operating in census tracts with having high poverty levels (an average of 45% of the population residing within the Wynwood Target area were below the poverty level, according to 1990 Census statistics). Additionally, the proposed project complies with basic CDBG eligible activities as specified at 24CFR 570.203 as well as 24CFR 570.703, sub -part M. The proposed project is found to comply with criterila at 24CFR 570.208(a)(1), (a)(4), and (b)(1) regarding activities which meet CDBG National Objectives. This finding is based on the fact that the site is a blighting influence located wholly within the City's federally designated Enterprise Zone. and will cause the creation of 855 new jobs, of which 80% will be made available to LMI persons pursuant t ; a "first consideration agreement" with the local JTPA administrator. 95- 565