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HomeMy WebLinkAboutCRA-R-24-0061 Exhibit AEXHIBIT "A" HOUSING SUBSIDY AGREEMENT THIS HOUSING SUBSIDY AGREEMENT (this "Agreement") is dated as of , 2024 (the "Effective Date") by and between SOUTHEAST OVERTOWN/PARK WEST COMMUNITY REDEVELOPMENT AGENCY, a public agency and body corporate created pursuant to Section 163.356, Florida States (the "CRA"), and BLOCK 55 RESIDENTIAL, LP, a Florida limited partnership ("Owner"). RECITALS WHEREAS, Owner is the owner of that certain real property located in the City of Miami, Miami -Dade County, Florida more particularly described on Exhibit A attached hereto and made a part hereof (the "Property") and is developing thereon a residential community known as "The Residences at Sawyer's Walk" (the "Project"); and WHEREAS, the CRA has an interest in supporting the residents of Overtown and assisting them in obtaining affordable housing within the Overtown community of the City of Miami and in furtherance of such interest, the CRA desires to refer prospective tenants to Owner for the lease of residential units in the Project and to provide rental assistance to Owner as further described in this Agreement; WHEREAS, the CRA and Owner entered into that certain Housing Subsidy Agreement dated as of January 25, 2024 (the "Original Agreement"); WHEREAS, the initial process utilized by the CRA to qualify prospective tenants pursuant to the Original Agreement was not approved by regulators, and as a result, applications by approximately one hundred twenty (120) prospective tenants of the Project, including fifty-eight (58) prospective tenants who were associated with the Overtown community or the CRA, were required to be rescinded (the "Prior Applicants"); WHEREAS, Owner agrees to offer the Prior Applicants the opportunity to submit new applications for leases at the Project and be part of Project that has units set -aside under the Section 8 Project Based component of the Housing Choice Voucher Program, which applications shall be subject to review, qualification and approval by Miami -Dade County's Public Housing and Community Development Department ("PHCD") utilizing the materials submitted by such Prior Applicants in connection with their prior applications, and Owner believes that there is reasonable basis to believe that Prior Applicants applications will be approved by PHCD; and WHEREAS, the CRA and Owner desire to amend, restate and supersede the Original Agreement in its entirety by this Agreement to reflect the foregoing agreement by Owner and to provide for, among other things, the rental assistance by the CRA for prospective tenants that will be qualified and selected for tenancy at the Project in accordance with Section 12.16 of the loan agreement dated as of August 12, 2021 between the City of Miami, Florida (the "City"), as lender, and the Owner, as borrower, for the Project (the "City Loan Agreement"). NOW, THEREFORE, in consideration of Ten Dollars ($10.00), the mutual covenants contained herein and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereby agree as follows: EXHIBIT "A" 1. Recitals. The recitals set forth above are true and correct and are incorporated herein by this reference. 2. Prior Applicants. Owner agrees to offer the Prior Applicants the opportunity to submit new applications for leases at the Project as part of the Section 8 Project Based component of the Housing Choice Voucher Program, which applications shall be subject to review and approval by Miami -Dade County's Public Housing and Community Development Depaitruent ("PHCD") of the same materials submitted by such Prior Applicants in connection with their prior applications. 3. Qualified Tenants. The parties acknowledge and agree that a portion of the tenants of the Project shall be selected in accordance with Section 12.16 of the City Loan Agreement, and all applicable legal and regulatory requirements. The number of such tenants that will receive rental assistance with the subsidy funds provided by the CRA under this Agreement will be based on the amount of such subsidy funds then -available, which will be determined for an applicant based on the number received by such applicant through the random selection process (the "Lottery"). Pursuant to the Lottery, each applicant will receive a number that will be used to determine the order of review and processing of such applicant's application. Applicants receiving lower numbers and which are approved as part of the qualifying process, will receive rental assistance from the CRA subsidy funds before applicants with higher numbers. For example purposes only, Applicant Smith with Lottery number 1 who is qualified by the City and approved for a lease at the Project will receive rental assistance from the CRA subsidy funds before Applicant Doe who is approved for a lease and has Lottery number 25, and if the CRA subsidy funds are exhausted by the time Applicant Lock with lottery number 162 is approved for a lease, then Applicant Lock will not receive rental assistance from the CRA subsidy funds. The number of tenant households that will be assisted shall not exceed seventy (70) unless the CRA subsidy funds are exhausted prior to reaching that number. The rents for the CRA subsidy shall be set in accordance with PHCD Project Based Voucher Fair Market Rents ("FMRS") and applicable payment standard, as the same may be amended from time to time. As of the date of this Agreement, the applicable payment standard is 110% of FMRS. The FMRS and applicable payment standard under this CRA subsidy program do not include an allowance for utilities. The tenants receiving rental assistance from the CRA subsidy funds will pay no more than 30% of their household income toward the applicable rent. The difference between the rent based on the PHCD project based voucher FMRS and applicable payment standard and the payment by the tenant, which shall be no more than 30% of household income, will be paid by the CRA subsidy. 4. Rental Assistance. (a) The CRA agrees to subsidize the rents of the City qualified tenants in an aggregate amount equal to Eight Million and No/100 Dollars ($8,000,000.00) over the Term of the Agreement (as defined below) to be allocated in annual installments of One Million Six Hundred Thousand and No/100 Dollars ($1,600,000.00) per year during the Term of this Agreement, which amount shall be payable in monthly installments of One Hundred Thirty -Three Thousand Three Hundred Thirty -Three and 33/100 Dollars ($133,333.33) each on the first day of each calendar month commencing on the date on which the first rent payments are due from the tenants receiving assistance under this Agreement, but no later than September 1, 2024, unless otherwise agreed to in a written amendment to this Agreement by the Owner and CRA. 2 EXHIBIT "A" (b) Each tenant shall be solely responsible for all costs of utilities (including without limitation, the costs of utility hookups, fees and other deposits) serving the unit. If a prospective tenant is recommended for tenancy and is determined to be unable to pay for utility hookups, fees, and other deposits which would then disqualify the proposed tenant for tenancy, the CRA, in its sole discretion, may provide needed financial assistance to that Proposed Qualified Referral for utility hookups, fees, and other deposits, which shall be separate from, and not constitute a part of, the rental assistance from CRA subsidy funds described in Sections 3(a) and 4(a) above. Any such additional financial assistance shall be provided directly to the prospective tenant by the CRA. If, at any time, the CRA elects not to provide any such additional financial assistance to a tenant and such tenant is or becomes unable to pay all or any portion of such costs of utilities, then such tenant shall be disqualified for tenancy in the Project and Owner shall have no obligation to lease or continue to use a unit within the Project to such tenant. (c) Each prospective tenant shall be solely responsible for paying (i) a security deposit equal to one month's rent, which shall be held by Owner as security for such tenant's obligations under its lease, (ii) an advance payment of the last month's rent, which shall be held by Owner and applied towards the last month's rent for such tenant under its lease and (iii) any reasonable application fee that Owner may charge. If a prospective tenant is recommended for tenancy and is determined to be unable to pay such security deposit, advance payment of last month's rent and/or application fee which would then disqualify the prospective for tenancy, the CRA, in its sole discretion, may provide needed financial assistance to that prospective tenant for any such costs, which shall be separate from, and shall not constitute a part of, the rental assistance from CRA subsidy funds described in Sections 3(a) and Section 4(a) above. Any such assistance shall be provided directly to the prospective tenant by the CRA. If, at any time, the CRA elects not to provide any such additional financial assistance to a tenant and such tenant is or becomes unable to pay all or any portion of such security deposit, advance payment of last month's rent and/or application fee, then such tenant shall be disqualified for tenancy in the Project and Owner shall have no obligation to lease or continue to lease a unit within the Project to such tenant. The payment of such amounts by each prospective tenant to Owner is a condition to signing a lease. Owner shall hold and, if applicable, apply, the security deposit received from each tenant in accordance with the applicable lease and with all applicable laws, and if Owner so applies any amount of the security deposit, such tenant shall promptly pay to Owner any amounts so applied to restore the security deposit to the original amount. Following the expiration or earlier termination of a lease with a tenant receiving rental assistance from CRA subsidy funds, any remaining balance of the security deposit not applied by Owner during the term of such lease will be returned to such tenant. In the event any remaining balance of the security deposit is not sufficient to cover any outstanding rent or damages existing at termination of the lease with a tenant receiving rental assistance from CRA subsidy funds, Owner shall notify the CRA of same, and the CRA shall pay such amounts to Owner within ten (10) business days after delivery of such notice by Owner, after which time, any unpaid amount by the CRA shall accrue interest at the lesser of eighteen percent (18%) per annum and the maximum legal rate through the date when paid 5. Owner Obligations. Owner will comply in all material respects with the terms of each lease with a tenant. Owner will comply with all fair housing laws, rules, regulations or orders applicable to the Project and shall not discriminate on the basis of race, creed, color, sex, age or national origin in the lease, use or occupancy of the Project; provided, however, to the extent the 3 EXHIBIT "A" Project meets the requirements for exemption from the prohibition against familial status discrimination contained in Title VIII of the Civil Rights Act of 1968 (known as the Fair Housing Act), as amended, such requirement shall not apply. Owner shall have the right to terminate a lease with a tenant following a breach by such tenant, provided that such termination is in accordance with the applicable lease and all applicable laws. 6. Remedies. In the event of any breach by the CRA of its obligations hereunder, Owner shall be entitled to exercise any and all rights available at law or equity, including maintaining actions for damages, specific enforcement and/or injunctive relief. 7. Term. This Agreement shall commence on the Effective Date and shall continue in full force and effect through the fifth (5th) anniversary of the date on which the first payment is made by the CRA pursuant to Section 4(a) above (the "Term of this Agreement"). Upon the expiration of this Agreement, Owner shall have the option to renew this Agreement, provided that the terms of any such renewal shall be subject to mutual written agreement between Owner and the CRA, each acting reasonably and in good faith. Following the expiration of the Term of this Agreement, the CRA will not be obligated to provide any rental assistance pursuant to this Agreement and the Owner will not be obligated to renew any leases with any tenant receiving rental assistance from CRA subsidy funds. 8. Authority. Each party hereto represents and warrants to the other party that the individual executing this Agreement on behalf of such party has been duly authorized to enter into this Agreement and that this Agreement is enforceable against such party in accordance with its terms. 9. Notices. Notices required or permitted to be given pursuant to the terms of this Agreement will be sent by certified mail, return receipt requested, postage prepaid or by recognized overnight courier, postage prepaid. Notice will be effective upon delivery or refusal of delivery. Notices will be delivered to the following addresses, subject to the right of either party to change the address at which it is to receive notice by written notice to the other party in accordance herewith: To the CRA: Southeast Overtown/Park West Community Redevelopment Agency 819 NW 2nd Avenue Third Floor Miami, Florida 33136 Attention: James McQueen, Executive Director To the Owner: Block 55 Residential, LP 2901 Florida Avenue Suite 806 Coconut Grove, Florida 33133 4 EXHIBIT "A" With copies to: Block 55 Owner, LLC 2901 Florida Avenue Suite 806 Coconut Grove, Florida 33133 Attention: Michael J. Swerdlow, Managing Member and R4 SLFL Acquisition LLC c/o R4 Capital LLC 780 Third Avenue 16th Floor New York, New York 10017 Attention: Mark Schnitzer and Wingate Management Company, LLC 100 Wells Avenue Newton, Massachusetts 02459 Attention: Michael Martin, President and MRK Partners 5230 Pacific Concourse Drive Suite 350 Los Angeles, CA 90045 10. Time of the Essence. Time is of the essence of each and every provision of this Agreement. 11. Assignment; Parties Bound. The CRA shall not assign this Agreement or any interest therein to any other person without Owner's prior written consent, which may be granted or withheld in Owner's sole discretion. Owner may assign this Agreement or any interest therein to a successor owner of the Project without the CRA's prior written consent. This Agreement inures to the benefit of and be binding upon, and is intended solely for the benefit of, the parties hereto and their respective permitted successors and assigns, and no third party will have any rights, claims, privileges or other beneficial interests herein or hereunder. 12. Integration and Amendment. This Agreement and the exhibits hereto set forth the entire understanding of the parties with respect to the subject matter hereof, superseding and/or 5 EXHIBIT "A" incorporating all prior or contemporaneous oral or written agreements, and may be changed, modified, or amended only by an instrument in writing executed by the party against whom the enforcement of any such change, modification or amendment is sought. 13. Governing Law. This Agreement and the rights of the parties hereunder shall be governed by, and interpreted in accordance with, the laws of the State of Florida, without regard to principles of conflicts of law. 14. Litigation. In the event of any litigation between the CRA and Owner concerning the terms of this Agreement, the prevailing party will be entitled to reimbursement of its costs and expenses, including reasonable attorneys' fees, incurred in trial, appellate and post judgment proceedings. 15. Invalid Provisions and Severability. In the event any term or provision of this Agreement is held illegal, unenforceable or inoperative as a matter of law, the remaining terms and provisions shall not be affected thereby, but shall be valid and remain in force and effect, provided that the inoperative provisions are not essential to the interpretation or performance of this Agreement in accordance with the clear intent of the parties. 16. No Waiver of Default. No waiver by a party of any breach of this Agreement by the other party will be deemed to be a waiver of any other breach by such other party (whether preceding or succeeding and whether or not of the same or similar nature), and no acceptance of payment or performance by a party after any breach by the other party will be deemed to be a waiver of any breach of this Agreement by such other party, whether or not the first party knows of such breach at the time it accepts such payment or performance. No failure or delay by a party to exercise any right it may have by reason of the default of the other party will operate as a waiver of default or modification of this Agreement or prevent the exercise of any right by the first party while the other party continues to be in default. 17. Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN CONNECTION WITH CLAIM, ACTION OR PROCEEDING BROUGHT IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY HAS READ AND UNDERSTANDS THE EFFECT OF THIS WAIVER OF JURY TRIAL PROVISION. 18. No Joint Venture. The parties expressly agree that no joint venture, partnership or agency relationship is created or intended by this Agreement. 19. Counterparts; Electronic Signatures. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed and delivered electronically, including without limitation, clear images of manually executed signatures transmitted by electronic format such as "pdf', "tif ' or "jpg", as well as other electronic signatures such as DocuSign and AdobeSign. [Signatures on following page] 6 EXHIBIT "A" IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the CRA as of the date first above written. CRA: SOUTHEAST OVERTOWN/PARK WEST COMMUNITY REDEVELOPMENT AGENCY, a public agency and body corporate created pursuant to Section 163.356, Florida States By: Name: Title: APPROVED AS TO FORM AND LEGAL SUFFICIENCY: By: Vincent T. Brown, Esq. Staff Counsel [Signature page to Housing Subsidy Agreement] EXHIBIT "A" IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by Owner as of the date first above written. OWNER: BLOCK 55 RESIDENTIAL, LP, a Florida limited partnership By: Pacific Southwest Community Development Corporation, its general partner By: Name: Title: [Signature page to Housing Subsidy Agreement] EXHIBIT "A" EXHIBIT A Legal Description of the Property THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF MIAMI- DADE, STATE OF FLORIDA, AND DESCRIBED AS FOLLOWS: UNIT A-1 AND UNIT A-2 OF SAWYER'S WALK, ACCORDING TO THE DECLARATION OF CONDOMINIUM THEREOF, RECORDED IN OFFICIAL RECORDS BOOK 34273, PAGE 2329 OF THE PUBLIC RECORDS OF MIAMI-DADE COUNTY, FLORIDA, TOGETHER WITH AN UNDIVIDED INTEREST IN THE COMMON ELEMENTS AND LIMITED COMMON ELEMENTS APPURTENANT THERETO. 4885-0706-0691, v. 7