HomeMy WebLinkAboutLettersLAW OFFICES OF STEVEN MISHAN, P.A.
848 BRICKELL AVENUE
SUITE 11Do
MIAMI, FLORIDA 33131
Steven Mislian, Esq
Steven r�r mishanlaw.coin
April 15, 2008
Ilene Temchin
Assistant City Attorney
City of Miami
444 SW 2" Avenue
2' Floor
Miami, FL 33130
Re: Villas Godoy Project
Our File No. 1038.009
Your File No. 08-601
Dear Ms. Temchin:
TELEPHONE 305-577-5999
FACSIMILE 305-374-5356
TOLL FREE (877) 577-5999
Silver, Garvett Si Henkel, P.A.
Of Counsel
This letter is written in response to your settlement proposal of March 31, 2008. The contents
of this letter constitutes settlement negotiations in order to resolve the continuing dispute
between the parties as regards the default in the first mortgage loan on the Villas Godoy
Project and may not be used for any other purpose than settlement negotiations.
After considering your settlement proposal and the history of this project including Mr.
Godoy's inability to either control the project or complete it on his own, .SunTrust Bank has
decided that it is no longer interested in withdrawing its declaration of default and extending its
forbearance through July 31, 2008; and thereafter if the project has not been completed and the
units sold.
SunTrust Bank will however cooperate with the City of Miami and/or Miami Dade County as
junior lenders and provide an opportunity to purchase our note if the City and County wish to
protect their mortgage interests.
In this regard, SunTrust Bank would offer the City of Miami and/or Miami Dade County a one
time courtesy discount of $125,000.00 off the bottom line if the transaction is accepted and
closed on or before May 15, 2008.
The money owed to SunTrust Bank subject to final verification is as follows:
Principal $2,693,440.35
Interest thru 4/15/2008 at
the pre -default rate $ 55,537.93
Additional default interest
since 3/7/2008
$ 49,959.57 (9 days @17% and 29 days
@17.75%, the difference
between 24% and Prime at 7.00%
and 6.25% respectively)
Late Fees $ 2,676.17
Legal Fees thru 3/31/08 $ 38,919.50
Appraisal, Courier Expenses,
Title Expenses and Legal (title) $ 4,037.95
Total due and owing as
of 4/15/2008 $2,844,571.47
Per diem beyond 4/15/2008 $ 1,328.0155
There may be additional unbilled legal expenses incurred during April and those for May,
2008.
SunTrust Bank has received inquiries from other parties concerning the purchase of its
mortgage note and loan documents and will likely sell its loan depending upon your response
or commence foreclosure in accordance with its loan documents and Florida law. No other
party has been offered the discount which SunTrust Bank has offered as a courtesy to the City
and Miami Dade County. SunTrust Bank reserves the right to withdraw this discount at any
time without further notice.
Please advise.
ours,
tten Mishan
SM:ig
cc: Shannon Summerset, Esq.
Miami Dade County
JULIE O. BRU
City Attorney
BY HAND DELIVERY
Steven Mishan, Esq.
Law O `"
848 BricK�ii r- , enue
Suite 1100
Miami, FL 33131
Ci.rit Alianti
Mishan, P.A.
RE: Villas Godoy Project
Our File No. 08-601
Telephone: (305) 416-1800
Telecopier: (305) 416-1801
E-MAIL: law@ci.rniami.11.us
March 31, 2008
At4celve,C ty c
nunity Development
BAR�. t
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This letter is written to confirm matters discussed between representatives of SunTrust
Bank, Miami -Dade County and the City of Miami, regarding the Villas Godoy project (the
"Project"), at a meeting held on March 24, 2008 at your offices. With you, F. Mark Vasani
represented SunTrust Bank (SunTrust"), Tangie White Jackson, Maria Rodriguez -Porto, Jesus
Hernandez and Shannon D. Summerset, Esq. represented Miami -Dade County, and Hector
Mirabile, George Mensah, Sergio Garcia, Lori Soto and I represented the City of Miami.
(Miami -Dade County and the City of Miami are hereinafter referred to as the "Subordinate
Lenders.") The meeting was held pursuant to the Intercreditor Agreement between SunTrust and
the Subordinate Lenders.
The Subordinate Lenders requested that SunTrust's declaration of Project default be
withdrawn retroactive to the date of issuance, and that the accrual of default interest on
SunTrust's Project loan be waived. In furtherance of their proposal, the Subordinate Lenders
provided the following assurances relating to certain Project issues and primary concerns of
SunTrust Bank:
1. Project Completion. The Subordinate Lenders agreed to a construction
completion date (receipt of the final certificate of occupancy) of June 30, 2008.
This construction completion date is contingent upon SunTrust's withdrawal of its
declaration of default retroactive to the date thereof and payment of Pay
Requisitions #32 and #33 by SunTrust to Model Housing Cooperative, Inc. no
later than April 4, 2008.
OFFICE OF THE CITY ATTORNEY!444 S.W 2nd Avenue, Suite (14;!Miami, Florida 31130-191(1
Steven Mishan, Esq.
Villas Godoy Project
March 31, 2008
Page 2 of 3
On February 22, 2008, the City of Miami Housing and Commercial Loan
Committee approved $417,789 to cover certain Project expenses, including
$281,225 for the pending construction change orders for the general contractor,
Zurqui Construction ("Zurqui"). That approval is conditioned upon the Project
being in good standing with SunTrust, a declaration of default rendering this
allocation null and void. SunTrust's withdrawal of its declaration of default will
allow for the preparation of an appropriate contractual amendment between the
developer and the City (to be handled on an expedited basis) and the release of the
funds allocated. As funding for the pending change orders is the prerequisite to
the recommencement of Project construction, SunTrust's withdrawal of its
declaration of default is the prerequisite to Project completion.
2. Closing Schedule. The Subordinate Lenders have agreed to defer payments
otherwise due to them and, upon agreement of the developer, to the developer,
upon the sale of the Project units, so that SunTrust can be paid in full no later than
July 31, 2008.
The July 31 payout projection is contingent upon SunTrust expediting its review
and processing of the prospective homebuyers referred for the Project. A list of
then pending prospective homebuyers referred to SunTrust for financing was
distributed at the March 24 meeting.
3. Project Security. Under the existing Project contractual agreements, project
security is an obligation of the general contractor, Zurqui. The restoration of
security for the Project is contingent upon SunTrust paying outstanding Zurqui
requisitions numbered 32 and 33. Once Zurqui has been paid: (a) Zurqui's
obligation to provide Project security is clear, and the Subordinate Lenders have
agreed to work with legal counsel for the developer to ensure that Zurqui satisfies
that obligation, and, (b) in the event that Zurqui does not satisfy that obligation,
the Subordinate Lenders will assume the cost of Project security, with Maria
Rodriguez -Porto taking the lead in assisting the developer with the emergency
bidding process that will be required to engage alternate Project security.
4. Outstanding Interest. Included in the funds allocated by the City of Miami
Housing and Commercial Loan Committee on February 22, 2008, is $54,000 to
pay the interest expense on the SunTrust construction loan for the months of
February, March and April 2008. As indicated above, the release of these funds is
contingent upon SunTrust's withdrawal of its declaration of default retroactive to
the date of issuance.
5. Insurance. The City of Miami's February 22, 2008 allocation in the amount of
$417,789.00 included $28,880.50 for Project property insurance. The release of
these funds is contingent upon withdrawal of SunTrust's declaration of default, as
indicated above.
dab:Document 115481
Steven Mishan, Esq.
Villas Godoy Project
March 31, 2008
Page 3 of 3
6. Default Interest. As noted above, the proposal of the Subordinate Lenders
contemplates that the default interest rate on SunTrust's Project loan be waived
retroactive to the date of the declaration of default. In furtherance of this request,
the Subordinate Lenders have agreed to amend the Intercreditor Agreement to
provide for forbearance in the payment of default interest, with default interest
being waived upon successful and timely completion of the performance
requirements noted above, provided, however, that the default interest rate would
be reinstated retroactive to March 7, 2008 in the event that any such performance
requirement is not met on or before July 31, 2008.
7. Marketing Plan. The Subordinate Lenders will meet with Mr. Godoy to assist
him in the formulation of a marketing plan to ensure that firm and qualified
homebuyers are located for all Project units available for sale.
The proposal of the Subordinate Lenders contained herein is subject to: (1) Model
Housing Cooperative, Inc.'s agreement to (a) the matters contained herein and an amendment to
the Intercreditor Agreement to reflect the same, and (b) the payment of SunTrust's actual and
reasonable fees and expenses, including attorney fees, related to the default, and (2) SunTrust's
written notification to each of the Subordinate Lenders of its agreement hereto and the
withdrawal of its declaration/notice of default.
As lenders to the Project, both Miami -Dade County and the City of Miami have provided
an extraordinary amount of financial and technical assistance to the Project to move it forward to
completion. As discussed in the March 24 meeting, the Subordinate Lenders do not agree to
stand in the shoes of the developer with regard to the completion of the Project, or to assume
Project control. Nevertheless, the Subordinate Lenders believe that with SunTrust's continued
assistance, the Project can be brought to successful completion.
Please contact me or Shannon Summerset with any questions.
Very truly yours,
(.
Ilene Temchin
Assistant City Attorney
IT: db
cc. Shannon Summerset, Esq. Assistant County Attorney
dab:Document 115481