HomeMy WebLinkAboutCRA-R-24-0028 ProposalLeonardo & LaUntrice Starke
9115 NW13 Ave Miami, FI 33147
Lmstarkeproperties@gmail.com
March 13, 2024
Isiaa Jones, Executive Director
Omni Community Redevelopment Agency
1401 N Miami Avenue
Miami, FL 33136
Dear Ms. Jones,
am writing to you to submit our comprehensive proposal for the full rehabilitation and
revitalization of the 18-unit garden apartment situated at the entrance to Overtown 102
NW 14th Street Miami, FL 33136, The Palm Plaza Downtown. Our vision is to revitalize
this 1950s gem into a bright beacon that not only respects its historical value but also
fulfills the contemporary needs of its residents and the neighborhood.
Our team is a Miami family business. We recognize the opportunity to contribute
meaningfully to the area's resurgence while ensuring the preservation of its unique
character. Our proposal details a sustainable, community -oriented approach that aligns
with the goals and standards set forth by the Omni CRA, shown in previous projects.
We have created a renovation plan with help from other funding sources that integrates
modern amenities and energy -efficient upgrades while maintaining the property's vintage
charm. Our intention is to create affordable, yet quality living spaces that support the
CRA's mission of economic vitality and inclusivity, as the neighborhood changes.
Furthermore, we are committed to sourcing local labor and materials to empower the
local economy and to foster a sense of ownership and pride within the community.
We understand the strategic significance of this property as a gateway to Overtown and
are poised to make it a landmark that stands as a testament to the area's revitalization
and potential. We have included detailed architectural renderings, projected financials,
and a community impact assessment to provide a clear and comprehensive
understanding of our vision.
Thank you for considering our proposal. We look forward to the possibility of working
together to bring new life to this historic neighborhood.
Warm regards,
Leonardo & LaUntrice Starke
Proposal for Omni CRA Rehabilitation funding for - Palm
Plaza Downtown
102 NW 14th Street
Project Introduction
Palm Plaza is an 18-unit studio apartment building/hotel built in Overtown in 1951 at the height
of its ascendancy as a cultural capital of Miami and known throughout the country as the
"Harlem of the South." The building was initially purposed as a full -service motel, attracting
guests looking for affordable stays with popular amenities of the time. Palm Plaza was
purchased by the Starke family in 1977. The east corner served as a mini convenience store
named "Bennet's Discount Grocery" that provided locals with basic household necessities, food
items, drinks, snacks, etc. More recently, the building has served the local community by
providing affordable housing. This building sits at the eastern entrance to Overtown on 14th
Street at the FEC Railway crossing. During the many years since its construction the hotel has
suffered from some deferred maintenance, resulting in Tess than full occupancy, which could
potentially lead to the sale or loss of the building if not repaired.
In order to assist Tong -term owners of small-scale naturally occurring affordable housing, Miami
Homes For All has created a Capital Needs Assessment Grant that aims to defray some of the
initial costs of determining the amount of funded required to bring a building up to code and
keep it running well for decades to come. The Palm Plaza is in the first round of projects funded
by this grant. It has also applied for and been awarded the County's 2023 NOAH Rehab Grant,
which aims to assist small -building owners to repair their existing affordable housing.
Owner Background
Leonardo D. Starke Esq.
A native of Miami, Florida, born and raised in Coconut Grove. He is a graduate of Coral
Gables Sr. High School, Florida State University, and the University of Miami Law. A retired
attorney, Leonardo currently serves as the general manager of Palm Plaza Downtown. As a
child, he grew up working along with his father, doing odd jobs and chores around the
building. Since graduating from college, Leonardo has played an integral part in the day-to-
day operation of the building. He was finally left with sole responsibility after his father
retired in 1988.
LaUntrice M. Starke
A native Floridian originally from Pensacola, FL. She earned a bachelor's degree from the
University of West Florida and a master's degree from Nova Southeastern University.
LaUntrice moved to Miami in 1987 after marrying Leonardo Starke. She retired from
Miami -Dade County Public Schools in 2020 after 33 years of service and currently works as
a real estate professional. In addition, she serves as a project manager, expeditor of all
issues related to the City of Miami permitting, facilitating 40/50-year re -certification
requirements, and seeking capital funding resources and opportunities for Palm Plaza
Downtown.
Leonardo D. Starke II
Born in Pensacola, Florida, and raised in Miami, Florida. Leonardo is the eldest of the Starke
offspring. He attended Coral Gables Sr. High School, Miami -Dade College, and DeVry
University. He is employed by Innovative Property Management Group (IPMG) and is the
current property manager for Palm Plaza Downtown.
Devan Starke
Born and raised in Miami, Florida, Devan graduated from Coral Gables Sr. High School,
received a BA from Florida State University in Applied Economics, and an MBA from Florida
International University in Finance. He currently works for Aroma 305 as a Senior
Accountant. In addition, he works for Palm Plaza Downtown as the Chief Financial Officer.
Alana Starke
Born and raised in Miami, Florida, Alana graduated from Coral Gables Sr. High School and
Florida State University. She is a brand account manager for a major marketing/advertising
firm in South Florida. She also serves as the Marketing and Advertising Director for Palm
Plaza Downtown.
Neighborhood Need
Downtown Miami is witnessing a construction boom, signaling growth and development. Yet,
this expansion masks a deeper, more pervasive issue: the city is grappling with a severe
housing affordability crisis. High housing costs coupled with relatively low wages have placed
Miami among the cities with the most severe housing affordability issues in the nation. This
crisis is particularly acute in neighborhoods like Overtown, where the impacts of gentrification
and the shortage of affordable housing are felt most strongly.
Naturally Occurring Affordable Housing (NOAH) refers to privately owned residential properties
that are lower in cost because they are older and usually subject to deferred maintenance.
Rents charged for NOAH multifamily units are typically lower than those charged at market -rate
units due to their age, condition, older design and location. However, many NOAH properties
are desirable for tenants because of the location within neighborhoods that are convenient to
places of work, worship, transportation hubs, and because the rent is affordable. Miami's
expensive and highly competitive real estate market coupled with low wages has led to a
housing affordability crisis. As a result, the unique cultural and socio-economic fabric of
communities like Overtown is under threat, highlighting the need for targeted affordable housing
solutions in these areas.
In the amended Redevelopment Plan on pages 4-32 and 5-56, the CRA emphasizes the
importance of housing affordability as a pivotal initiative:
"To Assist For -Profit Housing Providers in the CRA could:
2) Pay some portion of development costs such as impact or permit fees
3) Provide a direct cash subsidy in the form of a rebate equal to a percentage of the
increases in taxes paid over a defined period of time after completion if affordable units
are provided"
6) Housing Affordability - The CRA should fund established and creative new ways to
increase the stock of workforce and lower income affordable housing within the district.
GOALS:
a) Create project -specific developer incentives to ensure that new or significantly
redeveloped residential projects in the CRA contain a sufficient number of units that are
affordable to the target populations."
The Project and accompanying request seek financial support from the CRA to underwrite the
development of residential units, specifically for low-income and workforce households, and
asks the CRA to provide the Applicant with a project -specific incentive.
This initiative seeks financial backing from the CRA to support the creation of housing solutions
targeted at low-income and workforce groups. The request entails granting the applicant special
incentives tailored to the project, underscoring the CRA's commitment to making affordable
housing more accessible and supporting the development of inclusive, thriving communities.
Efforts to address the housing crisis must include a focus on neighborhoods like Overtown,
where the need for affordable housing is most acute. The Community Redevelopment Agency's
(CRA) initiatives to develop affordable housing are crucial for the economic vitality and
sustainability of such communities. By supporting projects that include affordable units and
offering financial incentives for developers, there is potential to mitigate the impacts of
gentrification and ensure that residents of Overtown and similar neighborhoods have access to
affordable, quality housing. This approach not only addresses immediate needs but also
contributes to the broader goal of fostering a more equitable and inclusive Miami.
Proposed Renovations
For detailed budget see attached
Exterior Site Improvements
Historic Sign Restoration
Impact Windows & Doors
Roof
Stucco & Painting
40-Year Requirements
Interior
Mold mitigation
Termite mitigation
Flooring
Plumbing Upgrades
Electrical Upgrades
HVAC System upgrades
Insulation & Drywall
ADA Kitchens
ADA Bathrooms
Interior Painting
Fire Alarm System
Parking Lot Repaving and Striping
Exterior Lighting
Exterior Wall
Landscaping
Financing Plan & CRA Request
This project is a 3C Capital Needs Assessment Grant Recipient from Miami Homes For All —a nonprofit
champion for low-income residents across the County who struggle to find a safe and affordable place
to live —for up to $100,000 in costs associated with capital needs assessment, including soft costs such
as architecture, 40-year inspections, mold testing, legal research, and more. This allows the true costs
associated with long-term rehabilitation to be accurately estimated before work begins.
The Palm Plaza Downtown Project is also an awardee of the 2023 Miami -Dade County Housing
Preservation through NOAH (Naturally Occurring Affordable Housing) Rehabilitation Grant Program for
up to $240,000. This grant focuses on essential improvements to small multifamily buildings like Palm
Plaza Downtown. This project was selected in a competitive process from throughout Miami Dade.
These sources still leave a gap in the high costs of construction and financing in Miami today. To offset
the high cost of construction and lending the Starkes ask the Omni CRA to support maintaining and
revitalizing housing affordable to Overtown residents, preventing displacement of residents as well as
the Toss of mom & pop ownership in the community and contribute a forgivable loan of $50,000 per unit
for a portion of the interior and exterior improvements listed above.
Affordability Plan
Palm Plaza Downtown currently has 18 total studio units. 12 units are currently unoccupied in
anticipation of the renovation of the building and 6 units have existing long-term tenants who are
paying significantly below -market rents. Best efforts will be made to provide for the temporary
relocation of existing renters in these 6 units during construction, if needed, and to keep rents
affordable to these renters during their ongoing tenure. Of the remaining 12 units, 3 will be capped at
80% AMI and 9 units will be capped at 140% AMI as required by the County's NOAH Grant requirements
with covenant in place.
EXHIBIT A
Proof of Ownership
EXHIBIT B
Current Rent Rolls
EXHIBIT C
Pro -Forma
EXHIBIT D
Bid for Construction
Date
Project Name
Address
UNITS
4/22/2024
Palm Plaza Downtown
102 NW 14th Street
MH FA Capital Needs Grant
Unit Type Studio 1 Studio 2 Studio 3 Studio 4 Studio 5 Studio 6 Studio 7 Studio 8 Studio 9 Studio 10 Studio 11 Studio 12 Studio 13 Studio 14 Studio 15 Studio 16 Studio 17 Studio 18
Set -aside:
50% AMI
50% AMI
50% AMI
50%AMI
50%AMI
50%AMI
80%AMI
80% AMI
80%AMI
00%AMI100%AMI
00%AMI 100% AMI 100% AM I
00%AMI 100% AMI 100% AM I
100%AMI
Unit Size (SF) Under A/(
Unit Type
Rent
750
0/1
993
750
0/1
993
750
0/1
993
0/1
750
993
750
0/1
$ 993
750
0/1
$ 993
750
0/1
$ 1,450
750
0/1
$ 1,450
750
0/1
$ 1,450
750 750
0/1 0/1
$ 1,450 $ 1,450
750 750 750
0/1 0/1 0/1
$ 1,450 $ 1,450 $ 1,450
750 750 750
0/1 0/1 0/1
$ 1,450 $ 1,450 $ 1,450
750
0/1
$ 1,450
Units
0/1
0/1
0/1
Unit Type 50% AMI Rent 2024 80% AMI Rent 2024 100% AMI Rent 20241% AMI Rent 21 TOTAL Narket Rent 202. Delta 2024
$993.00
$1,445.00
$1,988.00
$5,958.00
$4,335.00
$13,050.00
$1,450.00 $2,742.00
$1,450.00 $15.00
$1,450.00 $0.00
18
RENT LIMITS
2024 Income Limit 2024 Income Limit
2024 AMI 0/1 Gross/Year/Unit 1 person 2 people
50%
60%
80%
100%
120%
140%
2024 Market - Overtown
1,590
1,988
1,450
'. 11,916.00
$14,304.00
$19,080.00
$23,856.00
$28,620.00
$33,384.00
$17,400.00
39,750
47,700
63 600
79 500
95,400
111,300
45,400
54,480
72 640
90 800
108,960
127,120
$2,757.00
$23,358 $280,296
102 NW 14th Street
2024 MEDIAN INCOME:
TOTAL # UNITS:
$ 79,400
18
Monthly Yearly
Property Sq. Ft. % Med. Gross Gross
Unit Size Unit AMI Of Total Configuration Per Unit Income. Rent Rent
0/1 50% AMI 0/1 750 80.00% $5,958.00 $71,496.00
0/1 80% AMI 0/1 750 80.00% $4,350.00 $52,200.00
0/1 100% AMI 0/1 750 80.00% $13,050.00 $156,600.00
Total
99.90% 2,250 $23,358.00 $280,296.00
Gross Effective Income
$ 280,296
Plus: Phone Income
Plus: Cable Income
Plus: Premium Income (Rental of W/D in the apt.)
Gross Potential Income
Less: Vacancy Factor
Effective Gross Income
Less: Operating Expenses
NOI
0.00% $ - Unit/Monthly $ -
0.00% $ - Unit/Monthly $ -
0.00% $ - Unit/Monthly $ -
$ 280,296
6.00% $ (16,818)
$ 263,478
28.94% $ (76,239) *Property Taxes, Insurance, Legal, Accounting
$ 187,239
CAP RATE VALUATION
3.00% $6,241,303.33
3.50% $5,349,688.57
4.00% $4,680,977.50
4.50% $4,160,868.89
5.00% $3,744,782.00
5.50% $3,404,347.27
6.00% $3,120,651.67
6.50% $2,880,601.54
7.00% $2,674,844.29
7.50% $2,496,521.33
re
30 TEAR CASH F LOW ANALYSIS
INCOME INFLATOR 3.00%
EXPENSE INFLATOR 5.00%
Gross Rental Income
Potential Gross Income
VacancY
Effective Gross Income
Less: Operating Cos.
Insurance
Landscaping
Maintenance
Management Fee
Total Operating Expenses 28.94%
Net Operating Income
CUMULATIVE CASH FLOW
Assumptions
$/month
1,200
200
300
878
2,0
5,403
$ 280296
$ 280,296$
$ (16818)
$ 263416
$ 288,105
288,705$
$ (1132z)
$ 211383
$ 297,366
297,366$
$ (15,e42)
$ 219524
$ 306287
306287
$ (18311)
$ 261910
$ 315,476
$ 315,476$
$ (ie929)
$ 296543
$ 324940
324940
$ (19,496)
$ 305,443
$ 334,688
$ 334,688$
$ Q21P811
$ 314601
$ 344,729
344,729$
$ (2o,6ea)
$ 324045
$ 355,071
355,071
$ R13oa1
$ 333766
$ 365,723
$ 365,723$
$ R19a3f
$ 343119
$ 376,694
376,694$
$ (22,602)
$ 354093
$ 387995
387995
$ 232eo)
$ 364716
$ 399,635
$ 399,635$
$ ( 9181
$ 375657
$ 411,624
411624
$ Rdb'
$ 386921
$ 423,573
$ 23$
5,
$ R5A3Bf
$ 398534
$ 436,692
436,692$
$ 1252021
$ 410491
$ 449 793
449 793$
$ (26988)
$ 422805
$ 463287
463287
$ f15911
$ 435469
$ 477,185
$ 477,185$
$ p8,6311
$ 448554
$ 491,501
491,501$
$ R9,490f
$ 462011
$ 506,246
5 6$
$ P03751
$ 475611
$ 521,433
521,433$
$ P1286f
$ 490147
$ 537,076
537,076$
$ 132221
$ 504852
$ 553,188
5 8$
$ P31911
$ 519997
$ 569 784
569 784$
$ (34,187)
$ 535591
$ 586,878
586,878$
$ (35213)
$ 551 665
$ 604,484
6 4$
$ P6,269f
$ 568215
$ 622,618
6 8$
$ (31357)
$ 585261
$ 641,297
641,297$
$ PBA]Bf
$ 602819
$ 660,536
660,536
$ (39,632)
$ 620904
21600
3600
5,400
10 539
3,600
$ 31,500 16239
5670
$ 00920
5,954
$ 04,149
6251
11516
$ 88263
6,564
$ 92,911
6,892
$ 97,382
30324
402a
723]
12584
462a
a2213
$ 102,001
31,841
5,066
7,598
5,066
$ 106,056
33,433
5319
3938
13351
5319
46540
$ 111939
8,377
$ 117,269
8,796
$ 122,050
9236
14 589
157
53,876
$ 128211
$ 134,061
42670
6788
59,3
$ 141,304
44,803
7,128
$ 140,059
47,043
1784
11226
$ 155,144
49395
7858
11788
16912
1658
68 761
$ 162512
51065
8251
123n
17,420
e 5i
$ 110,363
$ 110,532
$ 101,100
$ 196,006
$ 205,509
194
10531
194
10531
92146
$ 215,393
69504
11,057
16586
20 Boo
11,057
96753
$ 225250
72979
11,610
21,424
11610
101591
$ 236,630
$ 240,033
$ 259,994
$ 212539
$ 285,691
14818
22 227
24036
14618
$ 299,500
$ 161239
$ 190462
$ 194115
$ 199141
$ 203516
$ 206961
$ 212600
$ 211189
$ 221,821
$ 226510
$ 231235
$ 235998
$ 240196
$ 245,623
$ 250415
$ 255341
$ 260233
$ 265121
$ 210022
$ 214910
$ 215105
$ 284638
$ 289459
$ 294239
$ 298961
$ 303632
$ 308221
$ 31223
$ 311122
$ 321404
$ 101,239 $ 311,701 $ 512416 $ 111,623 $ 975,199 $ 1,103,260 $ 1,395,860 $ 1,613,050 $ 1,834211 $ 2,061,301 $ 2,292,622 $ 252e421 $ 2169,417 $ 3,015,039 $ 3,265,515 $ 3520,862 $ 32e1,094 $ 4,046221 $ 4916,243 $ 4,591,153 $ 4,010,939 $ 5,155,511 $ 5,445,036 $ 5,739275 $ 6,030241 $ 6,341,013 $ 6,650,094 $ 6962,017 $ 7,279,939 $ 1401,343
Assumptions
Year 1
2
3
4
6
7
10
Gross Rental Income
$ 280,296
$ 288,705
$ 297,366
$ 306,287
$ 315,476
$ 324,940
$ 334,688
$ 344,729
$ 355,071
$ 365,723
Potential Gross Income
$ 280,296
$ 288,705
$ 297,366
$ 306,287
$ 315,476
$ 324,940
$ 334,688
$ 344,729
$ 355,071
$ 365,723
Vacancy 6.00%
$ (16,818)
$ (17,322)
$ (17,842)
$ (18,377)
$ (18,929)
$ (19,496)
$ (20,081)
$ (20,684)
$ (21,304)
$ (21,943)
Effective Gross Income
$ 263,478
$ 271,383
$ 279,524
$ 287,910
$ 296,547
$ 305,443
$ 314,607
$ 324,045
$ 333,766
$ 343,779
Less: Operating Costs $ / Month
Insurance $ 1,200
$ 21,600
$ 23,760
$ 24,948
$ 26,195
$ 27,505
$ 28,880
$ 30,324
$ 31,841
$ 33,433
$ 35,104
Landscaping $ 200
$ 3,600
$ 3,780
$ 3,969
$ 4,167
$ 4,376
$ 4,595
$ 4,824
$ 5,066
$ 5,319
$ 5,585
Maintenance $ 300
$ 5,400
$ 5,670
$ 5,954
$ 6,251
$ 6,564
$ 6,892
$ 7,237
$ 7,598
$ 7,978
$ 8,377
Management Fee 4.00% $ 878
$ 10,539
$ 10,855
$ 11,181
$ 11,516
$ 11,862
$ 12,218
$ 12,584
$ 12,962
$ 13,351
$ 13,751
Utilities $ 200
$ 3,600
$ 3,780
$ 3,969
$ 4,167
$ 4,376
$ 4,595
$ 4,824
$ 5,066
$ 5,319
$ 5,585
Real Estate Taxes $ 2,625
$ 31,500.00
$ 33,075
$ 34,729
$ 36,465
$ 38,288
$ 40,203
$ 42,213
$ 44,324
$ 46,540
$ 48,867
Total Operati 28.94% $ 5,403
$ 76,239
$ 80,920
$ 84,749
$ 88,763
$ 92,971
$ 97,382
$ 102,007
$ 106,856
$ 111,939
$ 117,269
Net Operating Income
$ 187,239
$ 190,462
$ 194,775
$ 199,147
$ 203,576
$ 208,061
$ 212,600
$ 217,189
$ 221,827
$ 226,510