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Home My WebLink AboutR-92-081292-M 812 A RESOLUTION, WITH ATTACHMENTS, AUTHORIZING THE CITY MANAGER TO PREPARE AND SUBMIT AN APPLICATION TO THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ("HUD"), IN SUBSTANTIALLY THE ATTACHED FORM, FOR A $2.5 MILLION LOAN UNDER THE HUD SECTION 108 PROGRAM FOR THE PURPOSE OF FINANCING THE DEVELOPMENT OF A RESTAURANTS/SPORTS BAR COMPLEX, LOCATED IN THE SOUTHEAST OVERTOWN/PARK WEST COMMUNITY REDEVELOPMENT DISTRICT, AT APPROXIMATELY NORTHWEST 5TH STREET AND NORTHWEST 1ST AVENUE, MIAMI, FLORIDA. WHEREAS, the City of Miami is committed to assist private investments that will create new jobs and remove slum and blight in the designated Community Development Target areas; and WHEREAS, the Citadel Restaurants/Sports Bar Complex project ("Project") is located in the Southeast Overtown/Park West Redevelopment District; and WHEREAS, the proposed Project is a privately initiated effort, revitalizing the old Citadel Building and developing an adjoining three story building to create a complex of restaurants and a sports bar; and WHEREAS, it is quite difficult to finance the proposed Project through the conventional financing means; and CITY CO"utTISSIO,N MEFTING OF, 1 CJ A J ___ ► 92- 812� P, r WHEREAS, the developer has requested the assistance of the City for the purpose of putting together a financing package to undertake the proposed Project; and WHEREAS, the United States Department of Mousing and Urban Development has established the Section 108 Loan program to assist projects located in the Community Development target areas; and WHEREAS, repayment of the HUD Section 108 Loan shall be made by the revenues generated from the Project; and WHEREAS, the City will use its future Community Development Block Grant allocations 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 Agreement 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 substantially the attached form, to the United States Department of Housing and Urban Development for a $2.5 Million loan under the HUD Section 108 program for the purpose of financing the development of a Restaurants/Sports Bar Complex, located in the Southeast Overtown/Park West Community Redevelopment District, at approximately N.W. 5th Street and N.W. 1st Avenue, Miami, Florida. -2- 92- 812 Section 3. Th.is, ReSOltltiOn sh,),,II become effective immediately upon it, adoption. PASSED AND ADOPTED this 1.0tll day of December 1992. ATTEST: MATTY HIRAI CITY CLERK PREPARED AND APPROVED BY: k LINDA K. KEARSON/ ASSISTANT CITY ATTORNEY APPROVED AS TO FORM AND CORRECTNESS: J . Q I JO S, TII CITY ATT NEY LKK:csk:M3302 XAVIER L . SIUAREZ , 'MAYOR -3- 92- 812 1'n' APPLICATION FOR SECTION 108 LOAN GUARANTEE FOR THE CITADEL PROJECT December 1992 CITY OF MIAMI, FLORIDA Xavier L. Suarez, Mayor Victor H. De Yurre, Vice -Mayor Dr. Miriam Alonso, Commissioner Miller Dawkins, Commissioner J. L. Plummer, Commissioner Cesar H. Odio, City Manager Prepared By: Department of Development & Housing Conservation 92- H2 City of Miami, Florida Section 108 Loan Guarantee Application The Citadel Project CONTENTS Application: Page ProjectDescription .................................... I EconomicJustifi_cation................................. 3 Compliance with National Objective ..................... 4 ProposedRepayment ..................................... 5 **Exhibits to this Application are not included with this Legis- lative Package** 92- 812 City of M.i_ami_, Flori,.da Section 1.O8 Loan Guarantee Application The Citadel Project Page 1. Applicant: City of Miami, Florida, a municipal corporation Amount of Funds: $2,500,000.00 Loan Repayment: Interest only during first three years, payable semiannually; principal and interest, amortized over thirty years period, payable semiannually during years four through ten, a balloon pay- ment of the outstanding balance at the end of the tenth year, at the interest rate specified by US HUD pursuant to its offering, National Objectives: Creation of 150 full-time equivalent jobs, of which at least 75% would be low -to -moderate income persons 570.702(b)(2) Proiect Description: The City of Miami ("Applicant") proposes to use the $2.5 million of Section 108 loan to fund the development of a Restaurants/Sports Bar Complex ("Project") located in the Southeast Overtown/Park West Community Redevelop- ment District. The Citadel Arena Corporation ("Developer") is proposing a $5.3 million project which consists of restoration of a historic Mediterranean/Gothic building and construction of an adjoining three story building with combined space of 46,277 s.f. The Project will accommodate 7-8 fast-food type restaurants and 10,000 s.f. of common space to serve the diners. The second floor is designated for a Restaurant/Sports Bar type facility which is expected to be the largest of its kind in Florida. The building's third floor will most likely be occupied by a tenant whose specialty is high technology/laser games. 92- 812 City of Miami, Florida `section 108 Loan Guarantee Application The Citadel Project Page 2 The Project site is located in the Southeast Overtown/Park west: Redevelopment District, created under Chapter 163 F.S.S., is currently the largest urban renewal effort undertaken in the Southeastern United States. In the immediate vicinity of the Project site several residential. and commercial projects have been developed, such as: the Miami Sports Arena (opened in 1988, one block); Arena Towers (354 units apartment complex with 100% occupancy, two blocks); Biscayne View (462 units apartment com- plex with 100% occupancy, three blocks); Poinciana Village Condo- miniums (40 units condominium, also three blocks). Directly across from the Project site is the new Federal Law Enforcement Building, expected to house over 350 Federal Judges and the US Attorney's Office (occupancy in early 1993). Also under construction, next to the Federal Law Enforcement Build- ing, is the new Downtown Federal Detention Center which is ex- pected to house over 900 new employees. Miami -Dade Community College with enrollment of 15,000 students, Miami Police Department, State of Florida Administrative Offices are among many institutions located within three blocks of the site. 92- 8 12 City of Miami, Florld.a Section 108 Loan Guarantee Application The Citadel.. Project Page 3 ;coromic Ju-Lille rtiorr: use of the Section 108 Program offers the Applicant a unique opportunity to provide development financing assistance which will enable the Developer to complete the de- velopment of the Project. Without the Section 1.08 .loan assis- tance, the Applicant could not make the loan to the Developer. After its completion, the Project is expected to generate 150 full-time jobs which will primarily benefit low -to -moderate income persons. Florida Law prohibits the Applicant from directly pledging its credit, becoming joint owner, stockholder, or giving, lending or using its taxing power to aid any corporation, association, partnership, or persons. Through the utilization of the Section 108 Loan Program; however, the Applicant can use its Community Development Block Grant ("CDBG") Entitlement as security for the proposed loan. But for the Section 108 Loan Program, the Appli- cant could not provide the appropriate level of financing needed for the Project. Typically, the Applicant has not provided primary financing assistance for redevelopment projects. Heretofore, gap financing or other subordinate financing assistance has been used by the Applicant to stimulate redevelopment projects. Presently, real estate loans for projects located in community development target areas are extremely difficult to obtain. As a result, the Developer has requested that the Applicant pursue financing assistance through the HUD Section 108 Loan Program. The Applicant has reviewed the information provided by the Devel- oper and deems this project loan appropriate for the redevelop- ment of efforts of the Applicant in the Southeast Overtown/Park West Community Redevelopment District and Downtown Miami Communi- ty Development Target Area. 92- 812 j.. City of Miami, TJor.ida Section 108 Loan Guarantee App). _cation The Citadel. Project Page 4 C c�n;t�lia�zcc iuith �i0_20�4 =AL tiQiL The Developer has indicate(] that upon completion, the proposed Restaurants/Sports Bar project will create approximately 150 full-time jobs, primarily benefit- ing low -to -moderate income persons. In order to meet the nation- al objective of creating the jobs to benefit low -to -moderate income persons, the Developer will_ work closely with local non- profit job placement agencies such as the Private Industry Coun- cil, City of Miami Neighborhood Jobs Program, etc. 92- 812 City of Miami, t 1.or_.i_da Section 108 Lean Guarantee Application The Citadel Project Page 5 5i0iQt3)2��_cl�eiulc:_ The Applicant's loan to the Developer_- stipulates a ten (10) year term from date of disbursement, interest only for the first three years, payable semiannually at the rate of interest specified by US IiUD. For the years four (4) through ten (10), interest and principal payments, amortized for thirty years period, payable semiannually at the same initial interest rate specified by US HUD; and a balloon payment of the outstanding balance at the end of tenth year. In the event that the Developer repays the loan prior to the end of the tenth year, the Applicant proposes to utilize the Section 108 Loan funds in a revolving loan fund for other eligible commu- nity redevelopment projects. The interest and principal payments for the Section 108 Loan will be paid by the Developer or by subsequent corporations, persons if applicable. The applicant reserves the right to pay interest as well as principal payments from any other source of funds available at the time. Additionally, the Applicant reserves the right to acquire the assets of the Developer, through foreclosure if necessary, and to liquidate the same in the event of a default on the Developer's loan, and to utilize the proceeds of the liquidation sale to repay if any other source of funding engaged to make interest and/or principal payments. Any deficiency which may result shall be pursued by the Applicant against the Develop- er under the terms of the Loan Agreement by and between the Applicant and the Developer. Community Development Block Grant funds serve only as the guaran- tee to the US HUD. The Applicant does not intend or expect to utilize CDBG funds for interest or principal payments for repay- ment of the Section 108 Loan. The Applicant has reviewed the Developer's request and, based upon the information presently available, believes that the proposed loan is appropriate to further the redevelopment efforts of the Applicant in the South- east Overtown/Park West Community Redevelopment District and Downtown Miami Community Development Target Area. Applicant shall obtain a first lien (mortgage) on the building improvements, furniture, fixtures, equipment, and inventory located upon the premises now and during the loan term as securi- ty for its loan. 92- 812 ciTY OF MlAtifl, R-01RiDA INTER -OFFICE NIWQF3ANf.)I. M To Honorable Mayor and Members of the City Commission FROA1 Cesar H . Odio City Manager_ DATE FLE SLJPJEC7 Section 1.08 Loan for the Citadel Complex REFERENCES City Commission Meeting ENCLOSURES of December 10, 1992 It is respectfully recommended that the City Commission adopt the attached Resolution, authorizing the City Manager to prepare and submit an application to the U.S. Department of Housing and Urban Development ("HUD") for a $2.5 Million loan under the HUD Section 108 Program for the purpose of financing the development of a Restaurants/Sports Bar Complex, at the corner of NW 5th Street and NW 1st Avenue. The Department of Development recommends the approval. of the attached Resolution to submit a HUD Section 108 Loan Application to assist the development of the Citadel Restaurants/Sports Bar Complex. The Citadel Arena Corporation, the owner and developer of the proposed project, has requested an assistance of the City to put together a financing package to make the project a reality. The project site is located in the S.E. Overtown/Park West Redevelop- ment District and meeting the objectives of the HUD 108 Loan Program. The City, as the applicant for the HUD Section 108 Loan, shall pledge its future Community Development Block Grant entitlements as collateral for the proposed loan. 92- Si2 x� (;ITY (�)( tvill1N-11, F1.(JfiPA 35 INTF_E1-017FIC17- MEMORANDUM TO Honorable Mayor_ and Members PAIf of the City Commission �� J � ►+�� sUf3JEC1 Section 108 Loan for the Citadel Complex rROM Cesar_ H. Odio REFERENCES City Commission Meeting City Manager of December 10, 1992 ENCLOSURES. It is respectfully recommended that the City Commission adopt the attached Resolution, authorizing the City Manager to prepare and submit an application to the U.S. Department of Housing and Urban Development ("HUD") for a $2.5 Million loan under the HUD Section 108 Program for the purpose of financing the development of a Restaurants/Sports Bar Complex, at the corner of NW 5th Street and NW 1st Avenue. The Department of Development recommends the approval of the attached Resolution to submit a HUD Section 108 Loan Application to assist the development of the Citadel Restaurants/Sports Bar Complex. The Citadel Arena Corporation, the owner and developer of the proposed project, has requested assistance of the City to put together a financing package to make the project a reality. The project site is located in the S.E. Overtown/Park West Redevelop- ment District and meeting the objectives of the HUD 108 Loan Program. The City, as the applicant for the HUD Section 108 Loan, shall pledge its future Community Development Block Grant entitlements as collateral for the proposed loan. 92- 812 0-P, 3 s -1