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HomeMy WebLinkAboutCRA-R-25-0030 Uni-Tower Progress UpdateJune 11, 2025 Commissioner Damian Pardo Chairman Omni Community Redevelopment Agency 1401 N Miami Ave, 2nd Floor Miami, FL 33136 Mrs. Isiaa Jones Executive Director Omni Community Redevelopment Agency 1401 N Miami Ave, 2nd Floor Miami, FL 33136 Re: Progress Update and Request for Additional Economic Assistance for `UNI Tower' (the "Project"), a Fully Restricted Affordable and Workforce Housing Development in the Omni Community Redevelopment Agency ("Omni CRA") Dear Commissioner Pardo and Mrs. Jones: We are pleased to provide you with an update on the continued progress of `UNI Tower', the 28- story affordable and workforce housing high-rise developed within the boundaries of the Omni CRA. Since its opening last August and becoming fully operational in November 2024, the building now boasts nearly full occupancy, with close to 90% of its 252 affordable and workforce housing units leased. This represents a significant milestone for the district and the City of Miami. Comprising 252 units entirely restricted at the whole target income range (60, 80, 100, 120 and 140% AMI) as well as ample residential amenities and commercial space, the Project has become the first fully restricted affordable and workforce housing mixed -use skyrise in Miami. Just blocks away from Adrienne Arsht Center, next to public transportation, and steps from Wynwood, Brickell, and Edgewater, in one of the most sought-after areas in the City, `UNI' completely changes the paradigm of what affordable and workforce housing can and should be. We are deeply proud of, and thankful for, the Omni CRA's assistance in bringing this novel concept to fruition. Apart from decisively tackling the acute crisis of housing unaffordability, we expect the Project to become a crucial recruitment and retaining tool for businesses, organizations, and institutions by allowing them to provide their employees with the housing they urgently need and deserve. Indeed, UNI Tower fundamentally changes the preconception of what a rent restricted project can and should be: not peripheral, but within one of Miami's most coveted areas; not just "good enough", but with the quality of amenities, features, and finishes of the market -rate high- rises in the same neighborhood. In fact, for many months now we have been working very closely with several key workforce groups in our community in order provide their employees and members with high -quality attainable housing, including: a) the State Attorney's Office, b) the Public Defender's Office, c) United Teachers of Dade, d) SEIU Healthcare Florida Local 1991 (which represents 6,800 nurses and other healthcare professionals in the Jackson Health System), e) representatives of the Miami Police Department, and f) the Miami Department of Fire -Rescue. By delivering high -quality attainable housing to such professionals, we hope to enrich the fabric of our city and neighborhood by allowing for diverse levels of income and professions, serving those that serve our communities, in the way they deserve it. UNI Tower demonstrates that affordable housing can be both dignified and inspiring: an asset to the neighborhood and the district, and to the people who serve our community every day. We now write to respectfully request additional economic assistance in the amount of $5,000,000, to address two key matters: Unavoidable Construction Cost Overruns — $2,500,000 Since construction commenced in May 2022, the Project has encountered significant involuntary construction cost overruns driven by market -wide inflation, labor shortages, material supply issues, and changes required for compliance with HUD and City regulations. These cost increases, which were beyond the Developer's control, have materially impacted our budget, especially in core areas like concrete, construction materials, and structural systems. Despite our best planning and risk management, these expenses could not have been reasonably anticipated or avoided. Concrete inflation and delivery delays were particularly severe, but so have certain other temporary interruptions caused by unforeseen issues. Labor costs, which affect all trades and therefore are a substantial portion of these multiple change orders, also increased dramatically since planning of the Project began and during the course of construction. The economic assistance received from the Omni CRA thus far equals to $10,500,000. On a per unit basis, with 252 units in the building, that amounts to approximately $41,500 per unit. With total Project costs at around $85,000,000 (or $337,500/door), the assistance of the Omni CRA equals to only 12% of total unit costs, a substantially low proportion taking into consideration the type of property (high-rise, central location, market -rate quality amenities and features) that UNI is. At this point, the additional economic aid sought from the Omni CRA to help support the previously mentioned cost overruns is $2,500,000. This assistance will only go towards supporting the units within UNI Tower restricted at 60%, 80%, and 100% AMI. That equals to 30% of the Project, or 76 apartments. This extra aid exclusively for these units amounts to an additional $32,900 per door, which, combined with previous support of $41,500 per door, takes the Omni CRA funding of units at 100% AMI or lower to $74,400. With total costs per unit of $337,500, that is still only 22% of total unit costs. At less than 25% of support per door, that is still considerably low relative to the Project's cost structure. The additional economic assistance will also help in supporting the establishment of UNI as an engine for economic development and growth given its location within a HubZone and its potential to attract new businesses and jobs within the Omni CRA. With cost overruns and enhancing property investments in excess of what was originally budgeted totaling almost $5.8 million, the additional support of $2.5 million is only a fraction of the total extra costs incurred since construction began relative to initial cost estimations. Rent Loss Compensation for Extended Affordability Period — $2,500,000 Under the current agreement, rent restrictions on all 252 units are set to expire in 2047. As part of a broader commitment to long-term affordability, the Developer proposes to extend the rent restrictions on all units through 2055, ensuring a full 30-year affordability period. In exchange for this extension, we respectfully request $2,500,000 in rent loss amelioration. This amount represents only a fraction of the estimated $14,099,160 in rent losses that will occur between 2047 and 2055 due to continued restrictions across all units. The CRA's investment will thus allow for an 8-year extension of affordability protections at a cost of less than 18 cents on the dollar relative to projected lost revenue. Additionally, the Developer respectfully requests the option to repay this $2.5 million on a prorated basis between 2047 and 2055, should it choose to lift the rent restrictions during that period. This optional structure provides future flexibility while ensuring the CRA's interests are protected. With this proposed second round of support, total CRA funding for UNI Tower would reach $15.5 million, or roughly 18% of total Project costs, which remain at approximately $85 million. For a high-rise of this caliber, with full rent restrictions and an urban core location, this remains a highly efficient public -private investment. As we've stated many times in the past, we are happy for, and proud of, the true partnership we have forged with the Omni CRA to build high -quality affordable and workforce housing in Miami's urban core, not in the City's periphery but within its Central Business District, and in a way that helps create a revitalized, vibrant, diverse, and sustainable community. We hope to continue to explore ways to work with the Omni CRA to advance its goals and objectives, as more often than not, those are the same as ours. Sincerely, Nir Shoshani `UNI Tower' UNI 17th Street, LLC