HomeMy WebLinkAboutR-85-0403m
J-85-357
4/9/85
RESOLUTION NO.
85-03
or\
A RESOLUTION AUTHORIZING THE EXECUTION OF AN
AGREEMENT BETWEEN THE CITY OF MIAMI AND L. F.
ROTHSCHILD, UNTERBERG, TOWBIN, FOR PROVISION
OF MANAGING UNDERWRITER SERVICES FOR THE
CONSTRUCTION FINANCING PROGRAM FOR OWNER -
OCCUPIED HOUSING IN PHASE I OF THE SOUTHEAST
OVERTOWN/PARK WEST REDEVELOPMENT PROJECT.
e.
WHEREAS, the City Commission approved in principle the
Southeast Overtown/Park West Community Redevelopment Plan
(Resolution No. 82-755); and
WHEREAS, providing low-cost construction financing for
�y 3
developers undertaking the development of owner -occupied units
will reduce development costs and make the units more affordable
to families of low and moderate incomes; and
WHEREAS, the City Commission has authorized the solicitation
of proposals for the sole management underwriting of the issuance
of up to $60,000,000 of short-term revenue notes for the funding
of a construction financing program for owner -occupied housing in
Phase I of the Southeast Overtown/Park West Project (Resolution
No. 84-1149); and
WHEREAS, a duly published Request For Proposals resulted in
the receipt of four proposals from firms interested in providing
such services; and
WHEREAS, a Proposal Review Committee, appointed by the City
er, reviewed the proposals received in response to the
Request; and
Review Committee recommends
Rothschild, Unterberg, Towbin as the managing underwriter for
said construction financing program;
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MEETING OF
APR 95198�03
(ION No.
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NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY
OF MIAMI, FLORIDA:
Section 1. The City Manager is hereby authorized to
execute an agreement with L.F. Rothschild, Unterberg, Towbin for
professional services as Managing Underwriter for the construc-
tion financing program for owner -occupied housing in Phase I of
the Southeast Overtown/Park West Redevelopment Project, in
accordance with the terms of their proposal submitted to the City
I
on November 29, 1984.
PASSED AND ADOPTED this llth day of APRIL , 1985.
�_-ATTEST:
VALPH G. ONGIE
CITY CLERK
PREPARED AND APPROVED BY:
ROBERT N. SECHEN
ASSISTANT CITY ATTORNEY
MAURICE A. FERRE
MAURICE A. FERRE, MAYOR
APPROVED AS
LUCIA A. DOUGHERTY
CITY ATTORNEY
s
85-402
city ok MiAMI. PL6*10A
INTItft- 1FIrICE MItMONANDUM
*O. Randolph B. Rosencrantz
City Manager
FROM, Herbert J. Bailey
Assistant City Manager
S.E. Overtown/Park Wes
Redevelopment Projec
We! March 25, 1985 MGM
suiacer. Owner -Occupied Housing
Construction Financing —
Selection of Underwriter
City Commission Agenda
(;r REFE"tNc�R: April 11, 198S
It is recommended that the City Commission
approve the attached resolution selecting the
firm of L.F. Rothschild, Unterberg,- Towbin
to act as Managing Underwriter for theissu-
ance of up to $60 million in short-term
revenue notes for construction financing for
the owner-occup ed residential units to be
veloped as part of Phase I of the Southeast
ertown/Park West Redevelopment Pro ect.
On October 10, 1984, the Miami City Commission approved Reso-
lution No. 84-1149 authorizing the City Manager to solicit
proposals for the full management and underwriting of up to
$60,000,000 of short-term notes for the construction financing
of owner -occupied housing in the Southeast Overtown/Park West
'
Phase I Project Area.
On October 24, 1984, we submitted a request for proposals to
various underwriting institutions to solicit their participa-
tion'in this process. Publication advertising was also con-
ducted. As a result of this undertaking the following firms
submitted proposals by the November 29, 1984 deadline:
First Boston
L.F. Rothschild, Unterberg, Towbin
Security Pacific Capital Markets Group
Shearson Lehman/American Express, Inc.
After careful consideration and review by a Proposal Review
Committee, the ranking of the top two proposals in order of
committee preference is:
a
1. L.F. Rothschild, Unterberg, Towbin
2. Shearson Lehman/American Express
4
85-403
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Randolph B• Rosencrantz
March 25, 1985
The Committee voted L•F•
Rothschild, Unterberg, Towbin as the
for the above
pre
ferred firm to act as master underwriter
proecond choigram. Shearson Lehman/American
Ex the City Commis ission act
choice. we are a 9
to authorize the City Manager to negotiate tipulating conditions, working a contract with Out
a s
L.F. Rothschild, including sdoes
details and researching legalities. This program
enhancey
upon the general liability of the City for any
ments or financial backing.
The Proposal Review Committee consisted of the following
members:
Herbert J. Bailey, Chairman
Manager's Office
Annette DeLara, City
Carlos Garcia, Finance Director Company
Michael Geffrard, James J. Lowrey
Jerry Gereaux, Department of�ommunites ceDevelopment
Adrienne Macbeth, City Manage
Robert Sechen, City Attorneys Office
The Need For This Action.
uction of as
As part of Phase I, we ccu project
individuallyrsold condominium
as 90o units of owner o P in 1986. Developer pro
r. during a three-year period beginning
sale have called for a greater share of condominiums than
po
rental units.
` ro proposed by L.F. Rothschild would allow developers
The program ram propoper conventional
financing at rates well below the
to access construction p
� conventional financing costs, creating a coat savings that can
lower the price of homes built by $1,000 to $2,000 or more per
he Dad
unit. This will make th willm makeits ores thee units moretitive in: afford -
County home sales market and
able to buyers with lower incomes.
The Program Concept.
ro ram operates large arbitrage earnings on
' The proposed p ates on g the City of Miami. These earnings
construction notes issued by Y loans to the
are applied to interest reductions in construction e City in the
developers. There is no general liability
issuance, as the notes are backed by
letters of credit from
nd the
te p
private banks* retained and reserve nram hascbeen eeds areviewed oin
fi proposed p 9
.; struction itself. The p P
Randolph S. Rosencrantz =3- March 25, 1985
preliminary form by Brown, Wood, Ivey, Mitchell & Petty; how-
ever, final program details remain to be worked out and a full
opinion has not yet been given. Similar programs have been" -
successful in supporting inner-city housing development in
Wilmington, Delaware and York, Pennsylvania.
The program is more specifically described in Attachments A and
B. Attachment A diagrams the flow of funds and the relation-
ship between the banks, the City and the developers. Attach-
ment B is an excerpt from the Rothschild proposal describing
the program in detail.
The Selection Process
The recommended firm was selected through a standard RFP proc-
ess that included a widely advertised call for proposals in
accordance with a pre -established submittal format approved by
the City Commission and issued on October 24, 1984. (A copy of
the RFP is included as Attachment D.) Proposals were received
on November 29, 1984, from the following four firms: First
Boston, L.F. Rothschild, Security Pacific Capital Markets
Group, and Shearson Lehman/American Express.
James J. Lowrey & Company provided a comparative analysis of
the proposals received (included as Attachment D). The selec-
tion committee reviewed the proposals and requested oral
interviews for January 15th with all of the proposers. First
Boston found it impossible to attend two scheduled interview
dates due to other pressing business conflicts. The committee
met again again on January 23rd to make a final recommendation.
Basis For The Committee's Selection
The committee's preferred choice of the L.F. Rothschild pro-
posal is based upon two important factors:
1. This firm was the most responsive to information requested
in the RFP. It submitted the only proposal that included
a specific program design. (This was requested for all
proposals.)
2. This firm has experience in similar efforts in other cities
and seemed most sensitive to the issues involved in devel-
oping sales housing in inner-city redevelopment areas.
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Randolph B. Rosencrantz
March 25, 1085
in addition, the firm': proposal included an important involve-
ment of a minority bond brokerage firm, Daniels and Bell, in
marketing the notes to be issued. Also, the proposal included
housing marketing expertise through its inclusion of Frank
Robino & Associates.
The other recommended firm, Shearson Lehman/American Express,
was given high marks for present and past involvement in hous-
ing programa with the City of Miami. It did not report any
experience with similar issues of construction financing for
single family housing development, but it appears to have the
capability to create and manage suchprogram.
First Boston's proposal was weakened by its inability to 9i�
representatives to one of two scheduled interview sessions.
also has less experience in housing development finance in
South Florida. Security Pacific submitted the least complete
ke
ted in
proposal, omitting uespecifically
sted finan ingalternatives that
are not
the RFP. It also s gg
feasible in this project situation.
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Attachments:
The Financing Program Concept Diagram
2. Excerpts from the Rothschild proposal
3. Request For Proposal for Owner -Occupied Housing
Construction Financing.
�._.. '•
4. Excerpts from the James J. Lowrey and Co. proposal analysis
5. Resolution
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ATTACHMENT 1
THE FINANCIN RAM CONCEPT DIAGRAM
PROJECT
NOTE HOLDERS DEVELOPMENT
FUND
excess arbitrage
6% cupon earnings from
rate 3% spread
CITY OF
MIAMI
issues
$60 MILLION
in 3-yr notes.-$57,600,000 net
(AAA rated)
backed
by...
AMBAC N
Insurance
ARBITRAGE \
INVESTMENTS
(includes 25%
hold -back)
92 earnings/
SLGS
CONSTRUCTION
DRAWS
retired funds
from sale of
LETTERS DEVELOPERS houses
OF
CREDIT
BANKS)
Security: HOUSES BUILT/SOLD
* 25% hold -back.
* houses built.
* developer warrants to
sell houses w/in spec. time.
* control of pace of const'n.
3 6 M O N T H S
'$60 MILLI(
NOTE
RETIRED
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ATTACHMENT 2
EXCERPTS FROM THE 90THSCHILD PROPOSAL
City of Mimi
Overrtcwn/Prti1k "lot Project
Structuring of yinaming
The City of Miami will issue construction revenue notes on February It
1985 in the amount of S60,000►000 maturing February 1, 1968. For maximum
return, it is essential that the notes be toted AM. Rothschild has a
oamiitment from AMW to insure the notes, thus guaranteeing the rating.
Note proceeds will be deposited with an AM insurance company under an
investment contract providing a flexible rate of return to the City on unused
note funds. That contract will provide for conversion to a fixed rate of
return if interest rates rise during 1985.
Before the City finally contracts with each hoot ownership developer
selected for a parcel in Southeast overtown/Park West, that developer's
proposal will be circulated to each Florida bank on AMBAC's approved list.
F,eh bank will be invited to submit a Letter of Credit proposal for that
particular housing development project within Southeast Overtown,/Park West
specifying the Letter of Credit amount and the rate to be charged by the Getter
of Credit bank. The City will accept the best Getter of Credit proposal and
contract with the winning bank to issue a Getter of Credit for the benefit of
bondholders. The bank is secured by a first lien an the houses to be built
within the particular redevelopment project, a pledge of the 251 holdback from
the developer building each house, a regulatory agreement with the developer(s)
governing the pace of construction, and a commitment from the Second Mortgage
Pzd in such amount as the City deems proper for each developer.
On each developer for which an approved bank offers to provide a Letter
of Credit, the City negotiates with the developer for a reduction in the
ultimate selling price of each house to be built by that developer based upon
the decreased cost of construction funds. For each developer, the City may
negotiate construction loan interest during construction at any level ranging
from 21 (the likely maximum cost of the Getter of Coedit) to the then market
cost of construction money. Proceeds of each hams sale reduce the Letter of
Credit liability and are applied to the purchase of Treasury Bonds of the State
and Local Government Series (SLGS) and pledged to the payment of notes at
maturity.
As part of each development contract, the developer will covenant that
the houses he proposes to build for the City can be readily sold for a
particular price within 120 days after completion. The City will make payments
to the developer on his building contract with the City each month based upon
the developer's percentage of completion, as verified by the Latter of Credit
bank. On each payment, the City will hold back 25% of the requested amount to
constitute the security fund for the Letter of Credit bank. if the developer
honors his contractual obligation to cause the house to be sold to a homebuyer
at the stipulated price within 120 days after completion, the developer is paid
the 251 holdbacke if he breaches that obligation, the 251 obligation is paid
to the Letter of Credit bank, which will then sell the house to a hemEbuyer.
if the house is sold for a price which is 75t or more of the developer's
contract price, the Letter of Credit bark suffers no loss. if the sale price
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is greeter than 751 off the contract price, the Getter of Credit bank remits
the ren+aining balance of the 251 holdbackk, after sale expenses, to the City
which then buys SLGS which are pledged to repayment of notes.
At the time of developer default, the Letter of Credit bank will have
remitted the amount of its Getter of Credit from the particular house to the
City.
Readers will note that the risk on the Letter of Credit bank described
above is substantially identical to the risk taken by a bank construction
lender on a construction loan to a developer. A construction lender typically
lends 7S% of value and takes a first security interest in the house under
comtruction. Further, the construction lender usually regulates the speed of
construction, thus limiting its risk, as does the letter of credit bank here.
The construction lender often takes the personal guaranty of the developer in
addition. The Latter of Credit bank will not have that guaranty in this
transaction, but most construction lenders view the personal guaranty as more
coercion than real security. If a developer is in such trouble that his
construction loans are being foreclosed, his personal guaranty is not likely to
be worth very much.
At the maturity of the notes, the City will have $60#000#000 on hand for
payments of the notes, derived from a combination of unused note proceeds and
SLGS* interest on the construction notes for the three year period will have
been paid from a combination of interest charges to developers and earnings on
the investment contract covering unused note proceeds.
Investment Earnings
The City investment contract will earn program funds for the City which
may be applied by the City to Southeast Overtown/Park West Project costs as the
City my wish. Among the costs that may be funded tram this program fund are:
1. Further subsidy in home sale prices.
2. Guaranty fees or bonding costs for minority contractors/developers.
39 infrastructure costs.
4. Oownpayment subsidies for homebuyers.
S. Minority or disadvantaged training programs for construction
workers on Southeast Overtown/Park West.
The amount of the program fund is determined by these variables:
1. Vw spread with which hones are built, and
2. The spread between the note interest rate and the investment
contract rate, determined by honey market conditions at the time.
L.E. Rothschild, Homeownership plan transactions in 1964 have had a
spread ranging from 3.32% to 3.971.
A2-2
65-403
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3. !fie surcharge,, if any# to developers for using the constriction
note pram, The short below hypothesites no cbarge a 3% Charge
and a 6% charge (emored to 13.5% wnventional construction loan
rate as of il/iS/84) for three diffeeent spread levels.
The impact of these variables on the program fund is illustrated by the
following chart:
Return to City (in Millions after
deducting costs of
iMMM)
Spread Be-
not Nose Sales
Medium Hdee Sales
tween Note
(All i>esss Built
Sales (1/3 at homes
Irate and
and Sold in Is
built and sold in
DMO aent
Ou pe to months EM Note
each Vow ftbm Note No Ho
Contract
dew�re Issue)
is" sold
3.0
0 .012
1.312
3.9
3.0
3 1.369
4.012
3.9
3.0
6 2.179
6.712
3.9
3.5
0 .240
1.762
4.8
3.5
3 1.594
4.462
4.8
3.5
6 2.944
7.162
4.8
4.0
0 .469
2.212
SO
4.0
3 1.189
4.912
S.7
4.0
6 3.169
7.612
5.7
A
complete build-out,/sell-out in 18
months may be
regarded as very
unlikely.
The sale of no home whatever in three years seems
equally unlikely.
An own sale of 1/3 . of the homes in each of
the throe years
is drought to be
the most likely.
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Below is an estimation of the responsibilites required in an issue of
this nature. It is based on our previous experience, and can be revised in iE
the City Must meet other time requirements. 'itne following table assures no
delays in necessary City action, diligent bond oounsal and underwriter's
counsel and no erratic conditions in the marketplace.
Sdtedule of fwntaJl N010 sibility
i
Managing underwriter selected.
2
Bond counsel begins preparation of documents,
underwriter's counsel begins preparation of
official Statement.
2-9
underwriter's Raising Consultant develops
cash flow schedules from each developer's
proposal.
2-9
underwriter canvasses MR investment
contractors.
_
10
underwriter reports to Cit 's
y agent on likely
spreads advises on market timing (price
today, or wait).
11
Cash flow schedule developed by Rousing
Consultant circulated to proposed insurers
bidding for investment contract.
14
First draft of bond docm ants, Official
Statement circulated for consent.
'
15
underwriter receives telephone bids on
Investment contract, to be confirmed in
writing.
17
In consultation with City, underwriter awards
investment contracts Prices notes.
20
Final bond doaaeent cements and official
Statement cements received by bond counsel
�!
and underwriter's counsel.
21
Ooaplete bond docurents delivered to ratiM
agencies for rating.
25
CMwter runs on amount of Program Nnd
delivered to underwriter's Rousing Consultant
and City.
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TIM and itap"ibility $C?v"* (Continued)
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20 Ebusing Consultant and City circularize Miami
A_
banks with development pro osalse cash flews,
and Program Fund projections.
34 Ratings received.
38 Closing on notes, note proceeds deposited
with executed investment cantract.
42 Letter of Credit proposals received from
Miami banks.
43-SO Letter of Credit proposals evaluated by
Mousing Consultant and City.
Si-S7 Development contracts negotiated with
developers by City and Housing Consultant.
60 Construction begins (assuming that all other
natters have been approved by City
Ca lesion).
Vw essential structure of all of the foregoing has been approved by
Saul, Owings Remick 6 Saul, LWerwriter's eounsole and Brown, WOode Ivey•
Mitchell & Aettye the City's bond ocunsele
Estimated Nwags t Cost
underwriter's Spread
If L.F. Rothschild, Unterberg. Tt*bin serves as sole manager, assuming a
$60e000e000 issues our estimated management fee on the proposed financing
should approximate $340 - 4.50 per $1s000 par amount of notes.
The fees paid to L.F. Nothschilde Unterberg• Tbwbin as underwriter are
subject to negotiation. It is our intention to remin eaipatitive. In
additions our fine is willing to serve as arnaging underwriter on a contingency
basis. We are certain that we would be able to eoaplete the financing within
the required timetable and would worst to minimise any foreseen delays.
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ATTACNNKNT ___ 3
REQUEST___FOR PROPOSALS
OVNER-OCCUPtEO HOUSING CONSTRUCTION FINANCING
CITY OF NIANI
SOUTHEAST OVERTOVN/PARK VEST
REDEVELOPNENT PROJECT
OCT08ER 249 1984
MAURICE FERRE, Mayor
DEMETRIO PEREZ, Vice Mayor
JOE CAROLLO, Commissioner
MILLER DAWKINS, Commissioner
J.L. PLUMMER, Commissioner
HOWARD V. GARY, City Manager
Proposals Due:
2:00 p.m. November 29, 1984
at the
City Clerk's Office
3500 Pan American Drive, Miami, Florida 33133
Herbert J. Bailey
Assistant City Manager
Office of the City Manager
Southeast Overtown/Park West Redevelopment Project
P.O. Box 330708Miami, Florida 33233-0708
bOS) 579-3366
85-403
"IN _N
OMNER=OCCUPIED HOUSING CONSTRUCTION FINANCt
CITY OF WANI
SOUTHEAST OVERTOWN/PARK WEST
REDEVELOPNENT PROJECT
I. PUBLIC NOTICE
The CITY OF MIAMI in cooperation with DADE COUNTY has invited inter-
ested parties to submit Unified Development Project proposals for the resi.
dential and commercial development of a nine block area within the Southeast
Overtown/Park Nest Community Redevelopment Area. In connection with the
owner -occupied portion of the program, the City of Miami wishes to offer
advantageous construction financing with a view to reducing the unit costs to
homebuyers. The financing must be structured to avoid any general liability
on the part of the City in any risk coverage.
The CITY OF MIAMI hereby invites interested parties to submit proposals
for the provision of construction financing for the owner -occupied housing
portion of the project. All proposals shall be submitted in accordance a
Request for Proposal document, which may be obtained from the Southeast Over.
West Redevelopment Project Office, Suite 9019 100 Biscayne Blvd.,
Miami, FL 33132 (305) 579-3366. Thi, document contains detailed and specific
information regarding the construction to be financed and the City's goals for
the use of the property.
The City of Miami reserves the right to accept any proposal deemed to
be in the best interest of the City, to waive any irregularities in any
proposal or to reject any or all proposals and to readvertise for new propos-
als. In making such determinations, the City's consideration shall include,
but not be limited to: the proposer's experience, the dollar amount return
offared to the City, the proposer's financial qualification, the professional
reputation of the proposer, and the evaluation by the City of all information
submitted in support or explanation of the proposed construction financing
plan.
Proposals are due no later than 2:00 p.m., November 29, 19849 and will
be received by the City Clerk's Office, 3500 Pan American Drive, Miami,
Florida, 33133.
Howard V. Gary
City Manager
85-403
AN
REQUEST FOR _PROPOSALS
-OCCUPIED HOUSING CONSTRUCTION FINANCING
CITY OP MIAMI
SOUTHEAST OVERTOWN/PARK WEST
REDEVELOPMENT PROJECT
I. PUBLIC NOTICE
The CITY OF MIAMI in cooperation with DADE COUNTY has invited inter-
ested parties to submit Unified Development Project proposals for the resi-
dential and commercial development of a nine block area within the Southeast
Overtown/Park Best Community Redevelopment Area. In connection with the
owner -occupied portion of the program, the City of Miami wishes to offer
advantageous construction financing with a view to reducing the unit costs to
homebuyers. The financing must be structured to avoid any general liability
on the part of the City in any risk coverage.
The CITY OF MIAMI hereby invites interested parties to submit proposals
for the provision of construction financing for the owner -occupied housing
portion of the project. All proposals shall be submitted in accordance a
Request for Proposal document, which may be obtained from the Southeast Over-
town/Park Nest Redevelopment Project Office, Suite 901, 100 Biscayne Blvd.,
Miami, FL 33132 (305) 579-3366. This document contains detailed and specific
information regarding the construction to be financed and the City's goals for
the use of the property.
The City of Miami reserves the right to accept any proposal deemed to
be in the best interest of the City, to waive any irregularities in any
proposal or to reject any or all proposals and to readvertise for new propos-
als. In making such determinations, the City's consideration shall include,
but not be limited to: the proposer's experience, the dollar amount return
offered to the City, the proposer's financial qualification, the professional
reputation of the proposer, and the evaluation by the City of all information
submitted in support or explanation of the proposed construction financing
plan.
Proposals are due no later than 2:00 p.m., November 29, 1984, and will
be received by the City Clerk's Office, 3500 Pan American Drive, Miami,
Florida, 33133.
Howard V. Gary
City Manager
85-403
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it, PROJECT OVERVIEV
The City of Miami is initiating the development of residential and com-
mercial structures within a nine -block area adjacent to the Overtown Transit
Station (28+ acres), a portion of which is already in public ownership.
The development program calls for the construction of 1,875 residential
units. Development within this area will be publicly stimulated. The City
will purchase the land, relocate the tenants, clear the land, and offer the
land to qualified developers.
The City intends to provide a number of development incentives and
subsidies for the project, which will include flexible long-term land leases
based on a land cost write down, second mortgage assistance for homeownership
housing, application by the City of Miami for assistance under the federal
Urban Development Action Grant Program and other federal programs, infrastruc-
ture improvements, low-cost construction financing, and permanent financing
through the issuance of tax-exempt bonds. Residential development within the
Phase I project area will be geared to families with annual incomes in the
range of SIS9000 to S509000.
The Phase I project area lies within the 200+ acre Southeast Over-
town/Park West Project Area, which will be redeveloped jointly by public and
private investment for residential and commercial development during the next
twenty years. Market projections call for the construction of over 9,000
residential units, 1,000,000 square feet of office space, and 140,000 square
feet of retail space by the year 2000. Public participation in later stages
of this project will be through the sale of Tax Increment Revenue Bonds. The
Tax Increment District was established by Dade County Ordinance 82-115 in
19A2. This project is an integral component of the overall redevelopment
program for downtown Miami.
III. PROJECT DESCRIPTION
The Southeast Overtown/Park West Project Area has been designated a
community redevelopment area by Dade County under the. provisions of Florida
Statutes Chapter 163. The redevelopment plan has been approved by the Commis-
sions of both the City of Miami and Dade County and certain redevelopment
authority has been granted to the City of Miami for project implementation.
The Southeast Overtown/Park West aedevelOOftnt Program entails the
redevelopment of 200 acres of prune real estate adjacent to the Miami Central
Business District (C5D) for new residential and commercial activity. The
general redevelopment concept for the project area is directed toward the
provision of a wide range of housing opportunities within a downtown setting,
including support uses necessary to serve the area's future population.
During the next ten to fifteen years, this area will be transformed from a
neighborhood of blighted and marginal residential and commercial land uses
Into an integral component of downtown Miami.
As Miami has rapidly become an international center for finance and
trade, the downtown area has experienced new growth and vitality. Projections
call for a doubling of the employee population by the end of the century from
72,000 employees to 155,000 employees, primarily due to a continued strong
expansion of the office market.
The new downtown that is emerging will be a balanced community with
retail, office, cultural, recreationals and residential activities. The
Southeast Overtown/Park West Project Area will provide the resource for
residential development.within the downtown core area, an essential ingredient
for the establishment of a viable downtown which moves beyond the 9-to-5
routine.
By the end of this century the project area is envisioned to have the
capability of supporting over 9,000 new residential units, and over 190000000
square feet of commercial development. The area will have an estimated
population of 22.000 people according to a recently completed market analysis
by the nationally renowned firm of Hammer, Siler, George Associates.
The City of Miami, in cooperation with Dade County, is assuming the
financial and redevelopment responsibility, and Metro -Dade County, which is
assuming the acquisition and residential relocation responsibility, are
jointly sharing the public roles in this major New Town --In Town redevelopment
project. The role of the public sector will be as project facilitators. The
City will assume some of the costs and risks normally borne by the private
developer. This project will be one of the largest joint private/public
undertakings in Florida and it is estimated that over $100 million in public
funds will leverage approximately it billion in private funds during the next
10-15 years. Public sector involvement will be focused on land acquisition,
relocation, demolition, project marketing, construction of public improvements
(including the construction of the 9th Street Pedestrian Walkway), parking
facilities, and the provision of gap financing where warranted. In addition,
a special zoning district will be established for the area, which will contain
development incentives. A Development of Regional Impact Statement (DRI) has
been prepared for the full project area and an updated market study for the
total project area is available to potential developers and investors.
SS-403 A3-3-
The City of Miami has established the Southeast Overtown/Park West
Project Office under the City Manager to coordinate the development of this
crucial project.
The project, particularly the initial phase` will be coordinated and
built in such a manner as to create sufficient critical mass to change percept
tions about the project area and to support the significant public investment
program required.
There are certain activities occurring within and directly adjacent to
the project which further reinforce its development potential, including:
-� the ongoing expansion of the downtown Government Center which will
have an employee population of over 159000 when completed;
the construction of the Overtown Transit Station within the project
area, which will be one of only three stations serving the Downtown/
Brickell area;
the construction of the Downtown Component of Metrorail (DCM/People
Mover) which will link major portions of the project area directly
to the rest of the downtown core;
the continued expansion of the Port of Miami, which ranks as the
world's largest cruise port, serving in excess of 2,000,000
passengers annually;
the scheduled and proposed redevelopment of the adjacent bayfront
park system which provides a regional amenity;
the construction of the Bayside Speciality Center at Miamarinal,
being developed by the Rouse Company, which will generate over
` 6,000.000 visitors annually; and
the proposed expansion of the Omni -Midtown commercial and residen-
tial node located directly to the north and the Flagler Street Core
{- Area located directly to the south.
Government participation during Phase I of this project will focus on
public investment adjacent to the Overtown Transit Station and along the 9th
Street Pedestrian Walkway. A nine -block Transit Station Impact Area has been
identified as the location where public investment will be concentrated. This
area was selected due to its strategic location adjacent to the Overtown
Transit Station and the downtown Government Center. Redevelopment within this
area will maximize benefits to both the Park West and Overtown portions of the
project area and leverage previous capital improvement expenditures plus com-
mitted public funds (Urban initiatives Project).
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There are Strong development opportunities along the nine blocks
surrounding the proposed 9th Street Pedestrian Walkway and the Overtown Rapid
Transit Station. Preliminary calculations indicate that this nine -block area
i s capable of supporting the development of 1,G1►5 residential uni is 2506000
sq.ft. of commercial Space and alternativelanduses.
Proposed residential development for the Phase I project area will be
geared for families with annual incomes ranging from $159000 to $S09000. A
mixture of homeownership and rental housing is proposed to attract an expand-
ing downtown employee population.
Funding for Phase I redevelopment is provided through a number of
funding sources including a grant from the Urban Mass Transit Administration,
City of Miami General Obligation Housing Highway
heHUD Section
ltovement s108end
loan
anticipated loan from the federalgoverment through
Program. The City is projecting that construction will commence in 1985.
IV. SELECTION OF MANAGING UNDERYRITERS
Managing underwriters will be selected from among those firms respond-
ing to this Request for Proposals.
A11 proposals received will be reviewed he City by Underwriter of theeCi Cityon
of
Committee, whose members will be appointed y Y Manager
Miami.
The Committee will screen each proposal for conformance with the pro-
posal submission requirements contained in thisRequest submit the Proposals
results of will
then interview selected firms. The Committee will
proposal evaluation process to the Miami City Manager.
A3 -5-
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Uw Y_ _ _PROPOSALSUONt_SSION REOUIRENENTS
Proposals submitted in response to this invitation must include the
following information and should be organized as follows:
1. Background information on the respondent, including such informs-
tion as: (a) the address of the principal office, the address of all offices
in the State of Florida, and the address of the office which would be handling
this account; (b) strength and expertise in public finance, and (c) capital -
station (both total and net to equity) .
For each category, please indicate your ranking in the industry
based on the latest available industry -wide date for the most current year-to-
date ranking. For category (b), please indicate your firms ranking for the
last five years.
2. The respondent's experience in structuring similar issues, particu-
larly those which involve construction financing for owner -occupied housing.
3. The respondent's experience and capabilities in underwriting,
marketing, and directing such a financing program.
In each instance, please indicate whether your firm acted as Senior
Manager, Co -Manager, or Financial Advisor.
4. The individuals who would be assigned to the account, their experi-
ence, and their responsibilities if the firm is selected.
S. Other staff who would be available if necessary.
6. Your approach to structuring the financing to accomplish the pro-
gram objectives as set out in this Request for Proposals. Include a listing
of tasks to complete a financing and an approximate time schedule with respect
to this project.
7. The approximate level of management fee which you would consider
appropriate compensation for the issuance of notes or bonds to finance the
program.
8. Other information which you believe would be useful in assisting
the Underwriter Selection Committee in evaluating your proposal.
9. References.
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gl. PROPOSAL _90NISSiON _INStR_UMONS
1. Pro osal% must be limited to no more than_15_pa_ges.
An original and five (5) Copies Of the proposal should be delivered
no later than 2:00 p-m- on November 29. 1984. to:
Ralph G. Ongie. City Clerk
City of Miami. City Hall
HOD Pan American Drive
Miami. Florida 33133
A copy should also be delivered at the same time to the financial
advisor to the City for this project:
James J. Lowrey and Company
Attn: Michael Geffrard
110 Nall Street
New York, New York 10005
F'
2. The City of Miami reserves the right to waive any irregularities in
the proposal submission process and reserves the right to reject all pro-
posals. The City also reserved the right to further negotiate fees# taskso
and schedules subsequent to selection of the underwriters.
3. Questions concerning this Request for Proposals should be directed
to:
Herbert J. Bailey
Assistant City Manager
City of Miami
So Redevelopment Project West
100 Biscayne Blvd., Suite 901
Miami, FL 33132
(305) 579-3366
125. . FEW W/24/84
85-403 A3 -7.
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ATTACHMENT"__4
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110 WALL STREET NEW YORK, N.Y. t000S (212) 363.2000
December 7, 1984
Mr. Herbert J. Bailey
Assistant City Manaqer
City of Miami
100 North Biscayne Blvd.
Suite 901
Miami, Florida 33132
Dear Herb:
We have completed our review of the proposals submitted
by underwriters in response to the City's RFP for providing
tax exempt construction financing for owner -occupied housing
for the Southeast overtown/Park West Redevelopment Project.
Our detailed comments on the proposals are enclosed.
The City received four proposals. it is our judgement
that three of these proposals were essentially unresponsive
to the substantive points of the RFP, and amounted to general
statements of the firms' capabilities in related areas of
public finance. The one proposal that was directly respon-
sive, submitted by L F. Rothschild• Unterberg and Towbinp
cannot be judged viable until four fundamental questions
raised by the proposal are adequately addressed.
We look forward to discussing these matters with you in
greater detail on Wednesday*
sing ely yourst
4tw(
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MWc/mj `
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.atn`t:.r.gi r: .r...,.
a)Principal Office
b) No. of Fla. Off ices (Pub. Fin.)
c) Public Finerx» Fycperienoe
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2) Eawrienee in Similar Issues
(No.)
3) EMOrienees in Specific ProgrM
E
Senior Mare
b) 00419r
c) Financial Advisor
4) Individuals Assigned to Account
S) other Staff
6) Approach to Financing
(See Detailed Analysis)
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g) Highlights of Other Info.
Faferences
9)
r
r A
L.F. ftahmichm
New Bock
0
$9.3 Billion
2
2
Bemd. Preston
SbraW. Alexander
Harley
Listed in Pt+cp wl
Hoar Owner�syhip
exat�ion
tam
$3.W44.50/80nd
Joint Venture
w ceniols i 8e11
i prank Vabino
sowrity lrcific
Los Angeles
0
$I.03 Billion
waidecke axwitz
Clarke Stray+
Bechtel. Nessnick
Mister
New Vxk
(984) $8.1 Billion
3
(Multi-Faei3Y)
Laniea'r DMsldKn
pied*&r Jacobs
Ash
Not Listed Listed in Prq?Cw l
tiewlvinq IOan Find Donstruction '"es
InU trial Ow. Bads Laws Floater
Nutgage pay. Bands
Not Given (11 $1.S042.00
(2) $2.00-$2.2S
WA WA
S. heed -Harrisburg WA
M. Hkllace-cafe county
M. town -Miami
shm Mhon.
New Naak
to"). $2.6 Bii3UM
(housing Fin. )
Hemmer Montalbaw
Flood
Listed in' Pe+oposalk
nxtgaye Aev. Bonds
rM ,
owd Instwance J
a.wu'.S0/Bad
Tax Inctement
C pability
R. Myles-aw*so n►ille M Wuce-ceder Musty
M. i1�st-�lando► J. Gores= -Mama
J. Udlen-Indiardpolis IL Gaines-4l�ica90
W. awf-Helens m tMite-son Francisco
IL rMcrix-lbuston+ •