HomeMy WebLinkAboutR-84-0029J-84-58 RESOLUTION NO. tJ1" KZf:'
A RESOLUTION APPROVING IN PRINCIPLE THE
APPLICATIONS OF THE FOLLOWING DEVELOPERS
FOR PROJECTS FOR SUBMISSION BY THE CITY
OF MIAMI TO THE U.S. DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT FOR URBAN DEVELOPMENT
ACTION GRANTS: HERITAGE PLACE LIMITED, FOR
RENOVATION AND RESTORATION OF THE OLD GESU
SCHOOL BUILDING INTO A FIVE -STORY PROFES-
SIONAL OFFICE BUILDING; AIRPORT 5040,
LIMITED PARTNERSHIP, FOR CONSTRUCTION OF
A NINE -STORY COMMERCIAL AND OFFICE BUILDING;
AND MIAMI INTERDESIGN PARTNERSHIP, FOR THE
CONSTRUCTION OF A THREE-STORY BUILDING
CONTAINING SHOWROOM SPACE AND A PARKING
GARAGE.
BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA:
Section 1. The applications of the following developers for projects
for submission by the City of Miami to the U. S. Department of Housing and Urban
Development for Urban Development Action Grants: Heritage Place Limited, for
renovation and restoration of the old Gesu school building into a five -story
professional office building; Airport 5040, Limited Partnership, for construction
of a nine -story commercial and office building; and Miami Interdesign Partnership,
for the construction of a three-story building containing showroom space and a
parking garage are hereby approved in principle.
PASSED AND ADOPTED this 19th day of January , 1984•
ATTEST:
PH G. ONGIE, City Cle
PREPARED AND APPROVED BY:
64IRIAM MAER
Assistant City Attorney
APPROVED AS TO FORM AND CORRECTNESS:
;If IF OF
/O4SE R. GARCIA-PEDROSA, City Attorney
Maurice A. Ferre
MAURICE A. FERRE, Mayor
CITY COMMISSION
MEETING OF
JAB! 19 1984
IREGOLUho..
REMARKS.__,
N
As
Honorable Mayor and
Members of the City
Commission r
Howard V. Gary ,f
City Manager `
January 13, 1984
Urban Development Action
Grant Applications
It is recommended that the City
Commission approve attached re-
solutions authorizing the City
Manager to submit Urban Develop-
ment Action Grant (UDAG) appli-
cations to the United States
Department of Housing and Urban
Development for the following
projects:
Heritage Place,
Airport Seven Office
Building, and
Miami Interior Design Center
It is not recommended that the City
Commission authorize submittal of the
application for the Port of Miami -
South Passenger Terminal and Office
Building.
The federally funded Urban Development Action Grant (UDAG)
program, authorized by Congress in 1976, has provided cities
across the nation with an instrument with which to stimulate
economic development, create new employment opportunities, and
increase the tax base needed to fund essential services. Through
the UDAG program, cities are able to participate with private
sector developers in financing projects ranging from industrial
parks to luxury hotels which, without the program, would have a
slim chance of being implemented.
Generally, UDAG funds which are loaned to project developers have
been used in combination with conventional loans at terms
structured to enable the developers to realize a reasonable
return on investment. The proposed projects must result in new
employment opportunities and leverage new private sector capital
investment of at least 2.5 to 1 (private funding to UDAG
funding).
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City Commission Members
Page 2
While UDAG funds are provided in the form of loans to project
developers, they are awarded to cities on a grant basis. Funds
generated through loans to developers can be used to support
staff or consultants working on the UDAG program, as well as to
fund eligible Community Development projects in low and moderate
income target areas.
Besides providing additional funds for eligible Community
Development activities, UDAG's aid in increasing the tax base,
cause infusion of private investment into the economy, and create
temporary construction jobs and new permanent employment
opportunities.
The Department of Community Development was given the respon-
sibility of soliciting and processing UDAG applications for the
City approximately four months ago. Since then, numerous
meetings have been held with real estate investors and developers
in order to familiarize them with the benefits of the UDAG
program. To date, staff efforts have resulted in the preliminary
processing of four (4) UDAG applications which are deemed to meet
or exceed the Department of Housing & Urban Development's basic
evaluation criteria:
1. Port of Miami - South Passenger Terminal and
Office Building.
2. Heritage Place
3. Airport Seven Office Building
4. Miami Interior Design.Center
The attachments to this memorandum describe the projects and
provide a synopsis of the benefits which will accrue to the City
as a result of HUD's approval of the UDAG assistance proposed.
In brief, these projects, which have a combined value of
$69,780,885, will not only increase the City's tax base and
provide needed temporary and permanent employment opportunities,
but will result in new income to the City which will be used to
fund UDAG staff and eligible Community Development activities.
This income is derived from application processing fees, UDAG
loan repayments and sharing by the City in profits generated by
the projects. Additionally, increased ad valorem revenue should
be realized upon the projects' completion. Application
processing fees will be used to fund costs associated with the
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R ^e:I+RS�^Fag q._NRR�AlM
City Commission Members
Page 3
processing of UDAG applications, while UDAG repayments of
principal and interest and income generated by shared profits
will be used to fund Community Development activities in the
City's Community Development Target Area neighborhoods. (Please
see Attachment "A".)
As has been indicated above in this memorandum, and as indicated
on the attached data sheets for each proposed project, it is my
opinion based on the financial factors that each application, if
funded by U.S. HUD, would afford significant benefits to the
City. However, it is also my opinion that the City's assistance
in developing a major office facility on the Port of Miami would
not be in the overall best interest of the City of Miami.
One quite important issue of public policy is whether the City
wants to assist and encourage the development of major, highrise
office structures on the Port; this assumes great importance
relative to the height of structures east of Biscayne Boulevard
in the Downtown area and use of the publicly owned Port for
private purposes not previously envisioned. An additional factor
in formulating this recommendation is the probability that the
City of Miami has no authority to exercise its municipal powers
on the Port.
At great expense the City acquired the Florida East Coast
property to link Bayfront and Bicentennial Parks. The guiding
philosophy is this effort was the provision and preservation of a
continuous open, green area along the bayfront in Downtown, a
vista devoid of view obstructing high rises. Development of an
approximately 200' high structures (17 stories atop an
approximately three-story high terminal) would obviously detract
from this view. It is noted that the tallest permanent structure
on the Port presently is a passenger terminal and administration
building fifty to sixty feet in height.
The Port of Miami was transferred to Dade County by the City of
Miami to be used for a public purpose, i.e., a publicly
developed, owned and operated seaport. Though the Port would
gain, at a minimal cost, a new passenger terminal capable of
handling two cruise ships, it appears that the primary purpose of
the project is development of its office/retail portion. For
instance, the entire project would comprise 350,132 gross square
feet. Of the total gross square footage, the privately
controlled office/retail areas comprise 304,532 square feet (87%)
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140,
City Commission Members
Page 4
while the customs/passenger lounge areas are 45,600 square (13%).
(The attached analysis by the Planning Department discusses the
potential impact of this project on existing and planned office
development in the Downtown area.) Further, it is important to
note that in our discussions with Dade County on the bridge -
tunnel issue, the use of seaport land for private development
purposes was never a stated factor. The present high volume of
vehicular traffic, coupled with the restrictive capacity of the
existing two-lane bascule bridge, cause a prohibiting influence
mitigating against near future growth of the Port was stated to
be the primary reason for opting for a bridge instead of the
costlier, longer to finance and build tunnel. It appears that,
coincidentally, both the five -lane bridge's and this project's
completion would coincide. An additional factor to consider here
is that a portion of the City -owned FEC Tract is needed to
construct a new bridge.
Though at this time a formal legal opinion has not been rendered
by the City Attorney, it is my understanding that the City of
Miami is precluded by Florida Statute from exercising its muni-
cipal authority on the Port. If this understanding is correct,
present zoning of the Port (Waterfront Industrial) cannot be en-
forced, nor would the City be allowed to control the building
permit process; at this time Miami, no longer issues occupational
licenses to Port -based operations. In short for all practical
purposes this project becomes synonymous to a project located in
Homestead as regards Miami's authority. Thepublic policy
question here is whether this particular application would be a
proper exercise of the City's ability to seek UDAG financing.
Though UDAG's hold considerable potential for financial gain to
the City, in this particular instance, it is my opinion that
other issues are of greater importance, causing this recommen-
dation to not approve submitting the Port of Miami - South
Passenger Terminal and Office Building UDAG application.
It is important to point out that HUD's approval of the three
remaining applications will in no way impede the City's ability
to secure UDAG assistance for other projects, including
developments proposed by the private sector in the City's
Community Development target areas, as there is no cap on the
level of UDAG assistance Miami is eligible to receive.
Two public hearings have been scheduled to provide an opportunity
for public comment on these UDAG applications. The first hearing
will be held on January 16, 1984, at the City Administration
S4_2,,
City Commission Members
Page 5
Building, and the second will be before the City Commission on
January 26, 19814, at which time the Commission will be requested
to authorize submission of the applications to the U.S. Depart-
ment of HUD. The applications must be submitted to HUD no later
than January 31, 1984.
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Ook
(Attachment "A")
Eligible Community Development Activities
Eligible Community Development activities are those that either
benefit low -and -moderate income persons or prevent or eliminate
slum and blight and otherwise meet specfic eligibility guidelines.
Activities eligible to receive Community Development funding are
the following:
- Acquisition
- Disposition
- Public facilities and improvements
- Clearance activities
Interim assistance
- Relocation
- Removal of architectural barriers
- Rehabilitation and preservation activities
Residential rehabilitation
Commercial rehabilitation
Code enforcement
Historic preservation
- Economic development activities
- Planning and Administrative costs
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CITY OF MIAMI
DEPARTMENT OF COMMUNITY DEVELOPMENT
URBAN DEVELOPMENT ACTION GRANT PROGRAM
FIRST ROUND APPLICATIONS - FY '84
1. Combined Development Cost
2. Total Private Financing Required
3. Total UDAG Financing Required
4. Total Return to City on UDAG's
(Loan Principal/Interest, Profit
Participation, Fees)
5. New Real Estate Taxes Generated (City)*
6. Total Number of Jobs Generated:
Temporary (Construction) 895
Permanent (New) 1,471
$ 69,780,885
56, 055,885
13,725,000
50 ,795 ,450
8,271,000
*Amount based on 1983 millage rate during the term of the given loan.
I
,A&
Lom
CITY OF MIAMI
DEPARTMENT OF COMMUNITY DEVELOPMENT
URBAN DEVELOPMENT ACTION GRPNT PROGRAM WDAG)
1. Name: Heritage Place (Listed on the National Register
as an historic building).
2. Developer: Heritage Place Limited, a Florida limited partner-
ship composed of the following principals: John P.
Fullerton, Julio S. Diaz, John C. Harrison, Jr.,
Osmond C. Howe and Stephen H. Smith.
3. Type of The project consists of the renovation and restora-
Project: tion of the old Gesu School building into a five
(5)-story professional office building with a gross
area of 72,000 sq. ft.
Control of land: Twenty-five (25) year lease with
an option to extend to ninety-nine (99) years if
developer proceeds with Phase II and is approved
by the Archdiocese.
4. Location: The site is located at 170 N.E. Second Street.
5.
Zoning: HC-1
(Historic
Conservation).
6.
Total Development
Cost
$ 4',500,000
7. Project Financing:
UDAG $ 900,000
Private Debt Financing 2,600,000
Equity 1,000,000
8. Number
of Jobs Created:
Construction 70-80
Permanent 35
- 9. Terms
of UDAG Assistance/Return to City
a)
1% loan amount at closing
$ 9,000
b)
15-year loan @ 6% interest
810,000
c)
25% of net available cash flow
291,200
d)
At the end of loan term:
- Principal Repayment
900,000
- 25% of net sale proceeds
1,076,000
Subtotal
$3,086,200
Real Estate Taxes Generated*
524,000
Total Benefit to City
$3,612,000
*First year estimated tax increase,
$28,207. Assumed appreciation,
3% compounded yearly.
O
84-29
Heritage Place (cont'd)
10. Leverage Factor Private Investment/UDAG = 4:1.
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/`•
CITY OF MIAIMI
DEPARTMENT OF CONIMUNITY DEVELOPMENT
URBAN DEVELOPMENT ACTION GRANT PROGRAM (UDAG)
1. Name: Airport Seven Office Building
2. Developer: Airport 3040, Inc., a Florida corporation composed
of the following principals: Cipicorp Construction,
Inc., De Karon Corporation, David Perez, Fidel
Saldivar, Leslie A. Shere and John McCloskey.
3. Type of
project: The project consists of a nine (9)-story building
that will contain a total Cross area of 90,680 sq.
ft. of commercial and office space.
Control of land: Land is owned by the developer.
4. Location: The site is located on the south side of N.W. 7t:l
Street, approximately 370 feet east of N.W. 51st
Avenue, Miami.
5. Zoning: The site is zoned RG-3/6 and RG-1/3 (General
Residential). There is a petition to change
zoning for the entire parcel to CR-2/7 (Commer-
cial -Residential). Zoning change for the entire
parcel was recommended by the Zoning Board and
was approved unanimously by the City Commission
at the First Reading on December 15, 1983. A
Second Reading is scheduled for January 26, 1984.
6. Total Devel-
opment cost: $9,200,000
7. Project Financing:
UDAG $1,825,000
Private Debt Financing 5,475,000
Equity 1,900,000
8. Number of Jobs Created:
Construction 75-100
Permanent 400
9. Term of UDAG Assistance/Return to City:
a) to of UDAG loan amount at closing $ 18,250
b) 15-year UDAG loan amount at closing 1,665,000
c) 250 of net available cash flow 431,000
d) At the end of loan term
- Principal repayment 1,825,000
- 25% of net sale proceeds 2,200,000
Sub Total $6,139,250
Real Estate taxes generated* 1,120,000
Total benefit to City $7,259,250
*First year estimated tax increase, $60,247.
Assumed appreciation 3% compounded yearly.
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Airport Seven office Building (cont'd)
10. Leverage Factor Private Investment/UDAG = 4:1
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CITY OF MI711I
DEPARTMENT OF COMMUNITY DEVELOPMENT
URBAN DEVELOPMENT ACTION GRANT PROGRAM (UDAG)
1. Name: Miami Interior Design Center
2. Developer: MID Partnership, a Florida partnership composed of
the following principals: Max Fine, Charles Lallouz
and Irving Moskowitz.
3. Type of The project consists of a three (3)-story building
Project: and parking garage that will contain a total gross
area of 182,000 sq. ft. of showroom space and
160,000 sq. ft. of a parking garage area.
Control of land: Option to purchase land.
4. Location: The site is located at 4141 N.E. Second Avenue.
5. Zoning: The site is zoned CG-2/7 (General Commercial) and
SPI-8 (Special Public Interest District).
6. 'Total Development Cost: $ 23,500,000
7. Project Financing:
UDAG
Private Debt Financing
Equity
8. Number of Jobs Created
Construction 350
Permanent 150
9. Terms of UDAG Assistance/Return to City:
$ 5,000,000
14,500,000
4,000,000
a)
1% of UDAG amount at closing
$ 50,000
b)
15-year loan @ 7% interest
5,250,000
c)
25% of net available cash flow
1,893,000
d)
At the end of loan term:
- Principal Repayment
5,000,000
- 25% of Net Sale Proceeds
4,081,000
Subtotal
$16,274,000
Real Estate Taxes Generated*
2,935,000
Total Benefit to City
$19,209,000
*First year estimated tax increase,
$157,838. Assumed appreciation,
3%
compounded yearly.
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Miami Interior Design Center (cont'd)
10. Leverage Factor Private Investment/UDAG = 3.7:1
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CITY OF MIAMI
DEPARTMENT OF COL"•1MUNITY DEVELOPMENT
URBAN DEVELOPMENT ACTION GRANT PROGRAI.1 (UDAAG)
1. Name: Port of Miami - South Passenger Terminal
and Office Building
2. Developer: Miami Seaport Partners, J.V., a Florida joint
venture comprised of Worsham Port, Inc., and
Techni Port, Inc., both Florida corporations
and wholly owned subsidiaries of Worsham
Brothers Co., a Tennessee corporation, and
Techni Development Corporation, a Florida
corporation, respectively.
3. Type of The project consists of a seventeen (17)-story
Project: structure with a total gross area of 350,132
sq. ft. which will create the maritime infra-
structure to berth two 700-foot passenger
cruise ships (3,000 persons per week), terminal
facilities, ancillary facilities and office
space.
Control of Land: Fifty-five (55) years' lease
with an option to extend for an additional
forty-four (44) years.
Gross sq. ft. Net sq. ft.
Customs 31,900 28,000
Passenger lounge 13,700 10,000
Retail 14,832 16,128
Office 286,100 245,407
4. Location: The site is a tract of land with an area of approxi-
mately 13.8 acres and located on the southwestern
tip of Dodge Island at the Port of Miami.
5. Zoning: V-F-1/7 (Waterfront Industrial). Attached is
Planning Department memo raising several issues
concerning this project.
6. Total Develop- - $32,580,885
ment Cost:
7. Project Financing:
UDAG $ 6,000,000
Private Debt Financing 24,580,885
Equity 2,000,000
8. Number of Jobs Created:
Construction 400
Permanent 886
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Port of Miami - South Passenger Terminal and Office
Buildinq (cont'd)
9. Terms of UDAG Assistance/Return to City:
a)
10,
of UDAG at closing
$ 60,000
b)
15-year
loan @ 6' interest
5,400,000
c)
25'
of net available cash
flow 3,597,000
d)
At
the end of loan term:
- Principal repayment 6,000,000
- 25�-, of net sale proceeds 10,239,000
Sub total 25,296,000
Real estate taxes generated* 3,692,000
Total benefit to
City $28,988,000
*First year estimated tax increase,
$198,508. Assumed appreciation, 3°
compounded yearly.
10. Leverage Factor Private Investment/UDAG = 4.4:1
A*
Howard V. Gary
City '•1anager
Walter L. Pierce
Assistant City Manager (Acting)
l
1
}
January 12, 1984
UDAG Application
for Seaport Office
Building
As per your request the attached memorandum from Sergio
Rodriguez, Planning Department Director, analyzes the proposed 17
story office development at the Port of Miami.
The issues as raised in the :memorandum are, in my opinion,
accurate and on point except as discussed below. However, in an
effort to clarify what jurisdiction the City of Miami holds over
the Port of Miami I spoke this morning with City Attorney Jose
Garcia -Pedrosa. I am informally advised that in accordance with
State statutes the City of Mia;ni presently has no jurisdiction on
the Port of Miami except as established through an interlocal
agreement between the City and Dade County. That is, we cannot
control zoning, that we cannot issue any permits and that we will
receive no tax revenues from any private development on Dodge
Island.
Therefore, Paragraph 2, page 2 of the attached ;memorandum states
a doubtful conclusion regarding a probable $160,000 annual tax
revenue. Also, on page 5 of the attached memorandum, all of the
listed "Opportunities to Express City Policies" are in error.
This then leads to the question of whether or not the City should
be applying for a UDAG on the Port since for all practical
purposes the Port of Miami .should perhaps be considered as
unincorporated Dade County and not within the corporate limits of
the City of Miami.
I have advised the City Attorney that this item is scheduled for
discussion on the January 19, 1984 City Commission agenda; Mr.
Garcia -Pedrosa will research this ;natter in much more depth and
be prepared to advise the City Commission and you at that time.
cc: Jose R. Garcia -Pedrosa
City Attorney
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