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HomeMy WebLinkAboutR-84-1149J-84-980 9/28/84 RESOLUTION NO. 84-r1149 A RESOLUTION AUTHORIZING AND INSTRUCTING THE CITY MANAGER TO SOLICIT PROPOSALS FOR THE SOLE MANAGING UNDERWRITING OF THE ISSUANCE OF UP TO $60,000,000 OF SHORT- TERM REVENUE NOTES FOR CONSTRUCTION FINANCING OF OWNER -OCCUPIED HOUSING IN THE OVERTOWN/PARK WEST PHASE I PROJECT. WHEREAS, the City Commission approved in principle the Southeast Overtown/Park West Community Redevelopment Plan (Resolution No. 82-755); and WHEREAS, as part of the financing process, it is necessary to obtain a sole managing underwriter for short -terra revenue notes for the construction financing for owner -occupied housing in the Overtown/Park West Phase I Project; and WHEREAS, short-term revenue notes in the amount of up to $60,000,000 will be issued by the City upon authorization by the City Commission for the construction financing of said project and may be purchased by an investment house; NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. The City Manager is hereby authorized and instructed to solicit proposals for the sole management under- writing of the issuance of up to $60,000,000 of short-term revenue notes for the construction financing of owner -occupied housing in the Overtown/Park West Phase I Project. Section 2. The proposals to be solicited must not involve the City's general financial liability in any risk coverage. Crry a PASSED AND ADOPTED this 1Oth_ day of October , 1984. ATTEST: • CITY CLERK PREPARE AND APPROVED BY: ROBERT N. SECHEN ASSISTANT CITY ATTORNEY Maurice A. Ferre - MAURICE A. FERRE, MAYOR CITY ATTORNEY WZR tf a TO. Howard V. Gary City Manager MOM Herbert J. Bailey Assistant City Ma CITY OF MIAMI. F41 N16A t*r INTt t•OFFICR MItMORANDUM DATI: September 27, 1984 SUBJECT: B.S. Overtown/Park 'Nest Phase t Construction Financing City Commission Meeting REFERENCES: October 10, 1984 ENCLOSURES: 2 It istrecommended that the City Commis- sion approve the attached resolution which authorizes the City Manager to solicit proposals for the sole manag- ng underwriting n of the issuance of up to 60 m llion- of short-term revenue notes for construction nanc ng o owner -occupied housin in the Overtown Park West Phase I Project. This financing program was included in the developer Request for Proposals approved by the City Commission on July 31, 1984 and issued by the City of Miami on July 31, 1984 as a potential financial option that may be available to developers. Developer proposals are due October 30, 1984. Early indications from interested developers are that the construction financing program may be a crucial factor in the feasibility of the proposals. There is experience in other parts of the country which indicates that the use of short-term revenue notes will provide construc- tion financing for financially responsible builders and devel- opers at very low interest rates thus encouraging participation where responses by developers might otherwise be minimal. We have been reviewing this particular technique with the City's financial advisors and bond counsel since February 1984. Based on correspondence from bond counsel on July 16, it is their opinion that the City can take advantage of this type of revenue bond issue for the purpose of providing low interest rate con- struction financing to potential developers. The construction period interest expense could be cut to approximately 50% of what it would be if this program were not available. This program could reduce development costs per unit by $1,000 or more, depending upon the length of construction time and the cost of the unit. This savings would enable the units to be sold for a lower price, making them affordable to more families interested in buying in the area. 84--i.i49 Howard V. Gary 2 September 21# 1984 This program would not require any guarantees or backing by the City beyond the security of the project itself and the bond pro- ceeds. It has been successfully used in several other cities for similar housing development, one of the most recent issues was in June 1984 for a 71-unit housing project in York, Pennsylvania. We would anticipate issuing the RFP shortly after the receipt of developer proposals for Phase I redevelopment. A draft of a resolution and the suggested RFP is attached. 84 149 _ REQUEST FOR PROPOSALS OWNER -OCCUPIED HOUSING CONSTRUCTION FINANCING CITY OF MIAMI, SOUTHEAST OVERTOWN/PARK WEST REDEVELOPMENT PROJECT SEPTEMBER 289 1984 D R A F T 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. Herbert J. Bailey Assistant City Manager Office of the City Manager P.O. Box 330708 Miami, Florida 33233-070B (305) 579-3366 . 1984 s4-1149 REQUEST FOR PROPOSALS OWNER-OCCUPIEO HOUSING CONSTRUCTION FINANCING CITY OF MIAMI SOUTHEAST OVERTOWN/PARS HEST REDEVELOPMENT PROJECT I. PUBLIC NOTICE The CITY OF MIAMI in cooperation with DADE COUNTY has invited interested parties to submit Unified Development Project proposals for the residential and commercial development of a nine block area within the Southeast Overtown/Park West 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 pro- posals for the provision of construction financing for the owner -occupied housing portion of the project. All proposals shall be submitted in accordance with the Requests for Proposals document which may be obtained from the City Clerk of the City of Miami. These documents contain 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 proposals. 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. Howard V. Gary City Manager 84"-1,149 i II. PROJECT OVERVIEW The City of Miami is initiating the development of residential and commercial 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 residen- tial 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, infrastructure improvements, low-cost construction financing, and permanent financing through the issuance of tax-exempt bonds. Resi- dential development within the Phase I project area will be geared to families with annual incomes in the range of $16,000 to $50,000. 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 1982. 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 Commissions of both the City of Miami and Dade County and certain rede- velopment authority has been granted to the City of Miami for project implementation. The Southeast Overtown/Park West Redevelopment Program entails the redevelopment of 200 acres of prime real estate adjacent to the Miami Central Business District ( Cg0) for new residential and cor merci al acti v- ity. 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 corinercial 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. Projec- tions 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, recreational, and residential activities. The Southeast Overtown/Park West Project Area will provide the resource for residential development within the downtown core area, an essential ingre- dient 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 1,000,000 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 Hamner, 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 redevelop- ment project. The role of the public sector will be as project facili- tators. 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 S10Q. million in public funds will leverage approximately $1 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 -3- 84-1149 -- -- - Abut ' i, a w• 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. The City of Miami has established the Southeast Overtown/Park West Project Office under the City Manager to coordicate 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 perceptions 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 15,000 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; — s the construction of the Bayside Speciality Center at Mia- =- marina, 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 residential node located directly to the north and the Flagler Street Core Area located directly to the south. -4- i !f 3 -84 -9 62 RS50LUTION No. • . SF" . Government participation during Phase I of this project will focus S.- 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 concen- trated. This area was selected due to its strategic location adjacent to the Overtown Transit Station and the downtown Government Center. Redevel- opment 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 committed public funds (Urban Initiatives Project). 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 is capable of supporting the development of 1,875 residential units, 250,000 sq.ft. of commercial space and alternative land uses. Proposed residential development for the Phase I project area will be geared for families with annual incomes ranging from $15,000 to $50,000. A mixture of homeownership and rental housing is proposed to attract an t expanding downtown employee population. Funding for Phase I redevelopment is provided through a number of funding sources including a grant from the Urban floss Transit Administra- tion, City of Miami General Obligation Housing and Highway Improvement Bonds, and an anticipated loan from the federal government through the HUD Section 108 Loan Program. The City is projecting that construction will commence in 1985. IV. THE PROPOSAL REQUESTED In responding to this Request for Proposals (Owner -Occupied Housing Construction Financing), proposers should include at least the following: A. A detailed description of the financing mechanism proposed and how it is to be administered. B. Relevant financial information on the proposer. C. Copies of any documents used in similar construction financing programs in other cities. -S- 84-11.49 D. A detailed description of charges to the City, source of payment for the charges, and risks to the City, if any. (the program rust not involve the City's general financial liability in any risk coverage.) E. Personal histories of principals of the proposer who will be working on the project. F. If the proposal uses tax-free financing in any form, an approv- ing opinion of nationally -recognized bond counsel. (Tax-free financing must be so arranged as to avoid being considered industrial development bonds for federal tax purposes.) G. A detailed description of services and the timing of services to be provided by the proposer. Proposals must be received no later than 1984. 25. :OOHCF:9 28 -6- 84-"1149