HomeMy WebLinkAboutMemoCITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
TO :
FROM :
Members of the Housing and
Commercial Loan Committee
ector Mira Ile, Interim Director
Department of Community Development
DATE : February 22, 2008 FILE :
SUBJECT : Model Housing Cooperative, Inc.
Villas Dr. Godoy Project
REFERENCES:
ENCLOSURES:
BACKGROUND
On September 13, 2002, the Housing and Commercial Loan Committee approved the allocation of
$1,280,000 from Home Investment Partnerships (HOME) Program funds to Model Housing
Cooperative, Inc. for the development of the Villas Dr. Godoy project consisting of thirty-two (32)
condominium units of which all would be I-IOME assisted. The project started construction on
December 20, 2004.
On February 4, 2005, the Housing and Commercial Loan Committee (1-ICLC) approved to extend
the project completion date of the HOME Program loan agreement between Model Housing
Cooperative, Inc. and the City of Miami (City). The completion date was extended from
September 2005 to June 30, 2006 due to requirements set forth by SunTrust Bank to keep the
completion date consistent between all lenders.
On September 22, 2006, the HCLC approved an additional $270,000 in HOME Program funds to
the Villas Dr. Godoy project for costs related to the water and sewer connections and unforeseen
project expenses. The HCLC also approved an extension of the project's date to acquire the
Certificate of Occupancy to December 31, 2006 and an extension of the project's completion date
(all thirty two (32) units be sold to low income buyers) to December 31, 2007.
On December 19, 2006, the HCLC agreed to modify the HOME Loan Agreement to allow for
units to close with a Temporary Certificate of Occupancy (TCO) in order to reduce the amount of
interest payments on the construction loan with SunTrust Bank and extend the date to obtain
Certificate of Occupancy to May 31, 2007.
On July 27, 2007, the IICLC Committee approved another extension of the project's date to
acquire the Certificate of Occupancy to December 31, 2007 and the date of project completion to
April 30, 2008. Due to unforeseen setbacks with the General Contractor, Zurqui Construction, the
completion of the project had been delayed. Due to financing shortfalls, the HCLC also approved
an increase in the sales price of the Model B-1 units to $209,000 and Model A-3 units which are
now at $190,000. At that time, the general contractor projected to have the Temporary Certificate
of Occupancy (TCO) issued within the next seventy (70) days.
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As of January 2008, the project is still facing delays. There are outstanding issues contributing to
the cause of said delays, which are as follows:
1. Ship ladder to roof top access was not approved by the City of Miami Fire Department; the
original plans were approved by the City initially. As per the architect, any change in the
plans requires additional funding.
2. In order to comply with UFFA requirements, at least four units must have the kitchen and
bathroom cabinets replaced in order to make them handicap accessible.
3. Various pending inspections within the building that is subject to the approval of City
Inspectors.
The aforementioned issues that have arisen with this project were from original plans that were
previously submitted and approved by the City. However, when the project site was visited by
City Inspectors the items were noted as needing revision. These issues were discussed with the
City of Miami Building Department and Fire Department, where the developer was advised that
the project could move forward without the revisions completed in order to obtain a Temporary
Certificate of Occupancy (TCO). Once the TCO is obtained, the unit buyers can start to close and
the first mortgage lender, SunTrust Bank, would see a return in their investment and would not
foreclose on the project.
In addition, on January 30, 2008, the Department was copied on a letter from SunTrust Bank to
Model City Housing threatening to put the project in default if the following conditions were not
met:
1. The City of Miami must approve additional funding to include funds to complete the
project and carry the SunTrust interest for the months of February, March, and April 2008.
2. The developer and contractor must obtain a TCO during February 2008.
3. The developer must fully submit buyers ready to close in such a number that SunTrust
judges sufficient to schedule closing by a reasonable date.
4. The developer must pay for the general liability premium from January 26, 2008 to January
26, 2009 in the sum of $2,901.84.
The Department convened a meeting on February 11, 2008 with Miami -Dade County to discuss
the project and strategize on how to bring the project to completion.
BORROWER'S REQUEST
In order to prevent the first mortgage lender, SunTrust Bank, from foreclosing on the project and
acquire additional financing necessary to complete the remaining changes required for Certificate
of Occupancy, Model Housing Cooperative has requested the following:
1. Additional funding in the amount of $436,789 (please see attached for documentation)
which includes the amount of $281,225 in change orders from the General Contractor,
Zurqui Construction to attain the Temporary Certificate of Occupancy plus other expenses;
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2. An extension of the date to obtain Certificate of Occupancy from December 31, 2007 to
May 31, 2008 ;
3. An extension of the date for project completion (all thirty two (32) units be sold to Low
Income buyers) from April 30, 2008 to June 30, 2008.
At this time, the project cannot move forward without any funding to complete the revisions.
DEPARTMENTAL REQUEST
The Department has reviewed the borrower's request vis-a-vis the letter from SunTrust and
recommends the following:
1. Approval of additional CDBG funding in the amount of $436,789 in order to finance the
changes necessary for project completion;
2. Extend the date to acquire the Certificate of Occupancy from December 31, 2007 to June 30,
2008;
3. Extend the date for project completion (all thirty two (32) units be sold to Low Income
buyers) from April 30, 2008 to December 31, 2008.
4. Any disbursement of funds will be contingent on the following conditions:
i) Project must receive Temporary Certificate of Occupancy
ii) Project must still be in good standing with SunTrust Bank; any declaration
of project default will render the commitment null and void.
Housing and Commercial Loan Committee Decision:
Approved as Recommended by Staff YesL No N/A
To Include Additional Conditions or Restrictions YesE No ❑ N/A n
Disapproved Yes❑ No 0 N/A
To Include Further Action YesL No ❑ N/A 0
Specify any further action, conditions or restrictions:
Chairperson or Representative
a
HOUSING LOAN COMMITTEE
FEB-2 2 2008
Stamp Date
APPROVED