HomeMy WebLinkAboutMemosCITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
TO :
FROM :
Members of the Housing and
Commercial Loan Committee
//-
t r Mirabile, Interim Director
Department of Community Development
DATE :
SUBJECT:
July 27, 2007
FILE :
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 HOME assisted. The project started construction on
December 20, 2004.
On February 4, 2005, the City's Housing and Commercial Loan Committee approved to extend the
project completion date (Project C.O. and all units sold) of the HOME Program loan Agreement
between Model Housing Cooperative, Inc. and the City of Miami. 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 Housing and Commercial Loan Committee 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 Loan Committee 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 Housing and Commercial Loan Committee 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.
The project is currently 96% complete. The electricity, cable and phone lines have already been
installed along with the elevator. The apartments still need to be painted inside and out and the
units need to be cleaned and carpeted. At this time, the general contractor projects to have the
Temporary Certificate of Occupancy issued within the next seventy (70) days.
Page 2 of 2
BORROWER'S REQUEST
In order to address financing shortfalls the borrower has requested the following changes in unit
sales prices:
Model B-1 2/2 unit (total of 4 units):
Model A-3 2/2 unit (total of 22 units):
Model A-2 2/2 unit (total of 2 units):
Model A-1 2/2 unit (total of 4 units):
from $195,000 to $209,000
from $174,000 to $190,000
remain at $125,000
remain at $112,350
Also, due to unforeseen setbacks with the General Contractor, Zurqui Construction, the completion
of the project has been delayed. Model Housing Cooperative Inc. has been in negotiations with the
General Contractor in order to resolve payment discrepancies and Builders Risk Insurance issues
(Exhibit A Addendum #6) and has requested that the date to acquire a Certificate of Occupancy be
extended to October 17, 2007 and that the project completion date (all thirty two (32) units be sold
to Low Income buyers) remain at December 31, 2007.
DEPARTMENTAL REQUEST
The Department has reviewed the borrower's request and recommends the following:
1. Approve the following changes to the unit sales price:
Model B-1 2/2 unit (total of 4 units):
Model A-3 2/2 unit (total of 22 units):
from $195,000 to $209,000
from $174,000 to $190,000
2. Extend the date to acquire the Certificate of Occupancy to October 31 7; C•
3. Extend the date for project completion (all thirty two (32) units be sold to Low Income
buyers) to April 30, 2008;
Housing and Commercial Loan Committee Decision:
Approved as Recommended by Staff
To Include Additional Conditions or Restrictions
Disapproved
To Include Further Action
Specify any further action, conditions or restrictions:
j nc, 11,ecf �;'(� 7 o c: c t ), t�c
Chairperson or Representative
Yes[j] No f l N/A
YesE No n N/A n
Yes❑ No N/A Li
Yes(2 No n N/A n
3�
LOAN COMMITTEE
Stamp Date
APPROVED
CITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
Members of the Housing and December 19, 2006
O : DATE FILE :
3OM :
Commercial Loan Committee
Okw
Barbara Gomez-Rodrigue
Department of Community
tor
Apment
SUBJECT : Model Housing Cooperative„ Inc.
Villas Dr. Godoy
REFERENCES:
ENCLOSURES:
BACKGROUND
On September 22, 2006, the Housing and Commercial Loan Committee (HCLC) approved an
additional $270,000 in Home Investment Partnerships (HOME) Program funds to the Villas Dr.
Godoy project for costs related to the water and sewer connections and unforeseen project
expenses. The Loan Committee 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.
Subsequently, a meeting was held with the first mortgage Lender, Sun Trust Bank. At the meeting
Sun Trust Bank, suggested that the units begin to close once the project have received a
Temporary Certificate of Occupancy (TCO). However, according to the Home Investment
Partnerships (HOME) Program Loan Agreement, units may close once the project has received a
Certificate of Occupancy (CO). The benefit of closing units with a TCO would translate to saving
of interest payments.
The project is currently at 96% percent complete. The general contractor has requested five
percent (5%) of the retainage. As a standard construction practice once a project has completed
more than fifty (50%) of the project the general contractor may request five (5%) percent of the
retainage.
BORROWER REQUEST
The borrower has requested the following:
1. That the HOME Loan Agreement be modified 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 Sun Trust Bank and overall development costs of the project;
2. That the date to obtain a Certificate of Occupancy be extended to May 31, 2007; and
3. That the HOME Loan Agreement be modified to allow for five (5) percent of the retainage
to be disbursed until the project obtains a Certificate of Occupancy at which time the
remaining five (5%) percent may be disbursed.
DEPARTMENTAL RECOMMENDATION
The Department has reviewed the borrower's request and recommends the following:
1. That the HOME Loan Agreement be modified 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 Sun Trust Bank and overall development costs of the project;
2. That the date to obtain a Certificate of Occupancy be extended to May 31, 2007; and
3. That the HOME Loan Agreement be modified to allow for five (5) percent of the retainage
to be disbursed until the project obtains a Certificate of Occupancy at which time the
remaining five (5%) percent may be disbursed.
Housing and Commercial Loan Committee Decision:
Approved as Recommended by Staff Ye No n N/A n
To Include Additional Conditions or Restrictions Yes; 'No [ I N/A
Disapproved Yes❑ No [ I N/A
To Include Further Action Yesn No n N/A n
Specify any further action, conditions or restrictions:
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Chairperson or'Representative7
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Stamp Date
DEC 1 9 2006
APPROVED
C..i 0:' LOP-, ,-s
Members of the Housing and
Commercial Loan Committee
Barbara Gomez -Rodriguez, bir 1!
Department of Community DevklkriQt
BACKGROUND
cA. 2 September 22, 2006 FILE I
Model Housing Cooperative, Inc.
Villas Dr. Godoy Project
r:Ci a: CiNCLS :
ENCLC;SUF.ES:
On February 4, 2005, the City's Housing and Commercial Loan Committee approved to extend the
project completion date on the Villas Dr. Godoy project from September 8, 2005 to June 30, 2006
due to requirements set forth by SunTrust Bank to keep the completion date consistent between all
lenders. Project completion date definition is Certificate of Occupancy and the sale of all units.
The project started construction on December 20, 2004. The project is 80% completed. However,
when the plans for the project were issued it required that the sewer pipe be six 6" inches and the
water pipe two (2") inches. In February 2004, Miami —Dade Water and Sewer (WASA)
Department issued a verification certifying that there was a two inch (2") water main and six inch
(6") sewer lateral connecting to the property '(see Exhibit A). In May 2005, during an excavation
at the southern line of the property, Zurqui Construction, the general contractor, observed that in
fact the existing sewer pipe was a four (4") clay pipe and the existing water pipe was 3/ from the
meter box (see Exhibit B —request and answer log).
The development team, consisting of the developer's (Model Housing Cooperative, Inc.) project
manager, Humberto Gomez, Puig Architects, Zurqui construction, and Maria Rodriguez -Porto,
project advisor from Miami -Dade County's Office of Community and Economic Development
decided to investigate the matter further. From August 2005 to March 2006 the development team
met with WASA and requested that a.second review be conducted to verify the finding of the
general contractor. In December 2005, WASA confirmed that in fact no six (6") inch sewer lateral
connecting to the property existed. The development team agreed that the existing sewer and
water pipes needed to be replaced. The developer prepared the plans for the required work and
requested an estimated price for the additional work that was needed. As part of the process to
complete the WASA request, the developer was to pay S45,2I8.00 to WASA for a connection fee
before WASA could review and approve such plans (see Exhibit A).
The project is facing the following additional challenges:
1. The boundary on the survey issued in February 2005 was found to be incorrect. Upon
properly surveying the building's construction layout it was determined that the building
was not at a ninety (90) degree angle as shown on the construction drawings. New
drawings are needed to address the elevation on the west side of the building where the
entrance to the garage is located (see Exhibit C).
2. The roof overhang on the elevator tower required modifications after further review by the
Architect (see Exhibit D)
3. These costs, along with other unforeseen expenses (see Exhibit E) such as change orders
for receptacles, fees for professional services, and corrections to the elevations in
connection with the aforementioned, have created a funding shortfall and delays with
respect to the development schedule.
BORROWER'S REQUEST
Model Housing Cooperative Inc. has requested $300,000 to address
1. The funding shortfall in connection with the Water and Sewer costs and elevation issues on
the west side of the building and,
2. That the funds be awarded in the form of a forgivable loan in order to keep the unit sales
prices as stated in the buyers contracts. The sales prices are as follows:
3-bedroom units: $195,000 (total of 4 units)
2-bedroom units: $174,000 (total of 22 units)
2-bedroom units: $125,000 (total of 2 units)
2-bedroom units: $112,350 (total of 4 units)
Also, the borrower has requested that the date to acquire a Certificate of Occupancy be extended to
December 31, 2006 and that the project completion date (all thirty two (32) units be sold to Low
Income buyers) be extended to December 31, 2007.
DEPARTMENTAL REQUEST
The Department has reviewed the borrower's request and recommends the following:
1. To provide a loan of an additional $300,000 in HOME funds to cover unforeseen expenses in
connection with the water and sewer issues affecting the project and to cover costs to correct
the elevation issues around the building;
2. Extend the date to acquire the Certificate of Occupancy to December 31, 2006;
3. Extend the date of project completion date (all thirty two (32) units be sold to Low Income
buyers) to December 31, 2007.
4. The total City of Miami subsidy in this project would now total 11,580,000. The total per
unit subsidy would be $49. 375.00; that will be converted to a second mortgage to each
buyer.
The following loan terms and conditions will apply:
1. Eligible project costs: Eligible project costs will be effective from February 6, 2003
2. Reporting Compliance: Compliance with reporting requirements related to previously
funded City projects which are under construction or in the affordability periods
including OMB A-133 reporting and current insurance certificates;
3. City Incurred Costs Line Item/Retainage: The proposed budget shall include a $5,000
line item which will be applied towards costs incurred by the City on behalf of the
project. A total of $10,000 will be held as retainage until the project receives a Cost
Certification Report and the Certificates of Occupancy. The project must receive the
Certificates of Occupancy by December 31, 2006;
�. Project Units: Project units shall be to eligible homebuyers by December 31, 2007. If a
unit is sold during the thirty (30) year affordability period, it must be sold to an eligible
homebuyer approved by the City (80% or less of area median income)
Transferring HOME CHDO Program funds to Model Housing Cooperative, inc.
Source
Sources of Reallocation
Amount
Recommended
Redistribution of
funds to Developer
Activity Name /
Description
Amount
HOME
CHDO Set -aside
$309,000
'D.t
IDIS# 1413
Model Housing
Cooperative, Inc.
Construction hard
/ soft costs
$3 ,000
d b t fru
Total
$300,000
$300,000
Housing and Commercial Loan Committee Decision:
Approved as Recommended by Staff
To Include Additional Conditions or Restrictions
Disapproved
To Include Further Action
Specify any further action, conditions or restrictions:
YesfJNoI IN/A
YesfNol JN/A
Yes[ No ri N/A
Yes NofN/A
■
H�
Chairperson or Representative
salfLINTOO NV
czHi
CITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
1OM
Members of the Housing and
Commercial Loan Committee
Barb Gez-Rodriguez, Director
De ; t .f CommuDevelopment
BACKGROUND
DATE:
SUBJECT:
REFERENCES
ENCLOSURES:
February 4, 2005
FILE :
Model Housing Cooperative,
Inc. Villas Dr. Godoy
Loan Restructure
On September 17, 2004 the Housing and Commercial Loan Committee (HCLC) approved a
conditional de -obligation requiring that the construction start-up of the Villas Dr. Godoy
project occur by December 1, 2004 or the $1,280,000 in Housing Investment Partnerships
(HOME) funds would be de -obligated.
Between the periods of September 2004 and December 2004, Model Housing Inc. had to
meet several private financing requirements to secure its. $3,000,000 construction financing
loan with SunTrust Bank. Some of the requirements were similar to the City's such as the
hiring of a Project Manager and selection of a General Contractor. Model Housing Inc.
selected Zurqui Construction. However, the recruitment for the Project Manager was
delayed given that the selected candidate later declined the position offer. SunTrust Bank
required that a Notice to Proceed be issued prior to its preliminary loan closing. However,
the hiring of the Project Manager was a condition for the Notice to Proceed which in turn
affected the City's condition for project start-up to occur by December 1, 2004.
On November 19, 2004, a project status meeting was held with Model Housing Inc., Miami -
Dade County, SunTrust Bank, Zurqui Construction and City Staff to discuss the project
start-up requirements. It was determined that a reasonably alternate date could be
considered given the unforeseen outcomes (hiring of Project Manager etc.) which slightly
delayed the December 1, 2004 construction start-up. Model Housing Inc. was successful in
starting construction on December 20, 2004. It has also made substantial progress in
finalizing matters through an Inter -creditor Agreement for its final SunTrust loan closing.
However, SunTrust is requiring a construction termination (construction completion) date of
June 30, 2006.
BORROWER'S REQUEST
Model Housing Inc. is requesting that (1) the construction start-up date of December 1,
2004 be extended to December 20, 2004 and that funding not be de -obligated and 2) that a
revised eighteen (18) month construction schedule allow for a construction termination date
of June 30, 2006 as opposed to September 2005 as per the City's current loan agreement.
DEPARTMENTAL RECOMMENDATION
Staff has reviewed Model Housing Inc.'s request and recommends the following:
(1) That the construction start-up date be extended from December 1, 2004 to December
20, 2004 and that the $1,280,000 in HOME funds not be de -obligated; and
(2) That the City's loan terms include a revised eighteen (18) month construction
completion date of June 30, 2006.
HOUSING AND COMMERCIAL LOAN COMMITTEE DECISION:
Approved as Recommended by Staff
To Include Additional Conditions or Restrictions
Disapproved
To Include Further Action
Specify any further action, conditions or restrictions:
Yes[j] No E N/A
YesENoriN/A [
Yes❑ No E N/A ❑
Yes❑ No I J N/A U
HOUSING LOAN COMMITTEE
Chairperson or Representative
Stamp, Date