Corporation (MBCDC) and the Miami Beach Redevelopment Agency (RDA) - the City’s Community Redevelopment Agency - were executed on April 30, 2007 (a loan agreement was executed for each of the three buildings).
Subsequently, the respective restrictive covenants were recorded. The loan agreements were for the purchase of the three buildings: The Allen, the Barclay, and the London House.
2. Who are (were) the owners of those buildings?
The Miami Beach Community Development Corporation is the current owner of all three buildings. The entire transaction occurred between the MBCDC and the private owner of the property(ies). The City provided the acquisition funds as a loan to MBCDC. Based on copies of
the purchase contract between MBCDC and the sellers, the sellers are listed as 1940 Park Avenue Inc., 2001 Washington Avenue Inc., and 1975 Washington Avenue Inc.
3. Do those owners have any ties to City Hall and related developers etc?
As explained in #2 above, the City provided funds for MBCDC to purchase these three buildings. MBCDC is a US HUD recognized CHDO. MBCDC applies for and receives funding from State and Federal funding programs administered by the City. All discussions relating to
the purchase, negotiations, etc. were between MBCDC and the Seller.
4. What is the purchase price? terms of payment?
The information you are requesting is delineated in the Commission Memorandum attached. More specifically, MBCDC was allocated, via a loan, $13,650,000 for acquisition, closing and carrying costs associated with the three properties.
Pursuant to the loan agreements, MBCDC must provide the buildings as affordable housing for the affordability period - 30 years. Per the Loan agreements provided that if MBCDC is “in good standing, in compliance with and free from default under the terms and
conditions” of the agreements, and if they comply with the Declaration of Covenants and Restrictions that was executed by MBCDC in favor of the City of Miami Beach and the RDA, then MBCDC will not be required to make any payments on the principal amount during the term of the loan.
However, in consideration for this deferral of repayment during the term, satisfaction of repayment of the loan shall occur at the end of the term of the agreement (or the conclusion of the affordability period, whichever is later) through the conveyance of the property
to the RDA (City), via fee simple title. In other words, the properties will revert to the City at no cost to the City.
5. What is the estimated rehabilitation cost?
Please refer to the commission memorandum attached for specific detail. The rehabilitation costs are estimated at approximately $12.389 million.
6. What entity will develop the 3-building property? What ties do the staff of the housing development corporation have to City Hall, the former property owners, approved vendors (usual contractors) et cetera?
As previously mentioned, MBCDC is the current owner of the three properties. Number 3 above describes the current relationship between MBCDC and the City: they are a grant recipient of State and Federal funds and a HUD-recognized CHDO. All allocations to MBCDC are
approved by committees and the Commission. MBCDC contracts directly with their vendors for services and products. The City has no role in reviewing and/or approving the vendors used by MBCDC. MBCDC is a long-time developer of affordable housing on Miami Beach; they are familiar with applicable conflict of interest standards.
7. Under what federal matching program if any will the project fall? Has anyone spoken to the federal authorities about the rehabilitation project?
Sources of funding for rehabilitation and operation will be determined by and are the responsibility of MBCDC., and they may or may not include federal funding programs. Should Federal funding programs be used, they may include, but are not limited to: HOME, Section 202,
HUD Supportive Housing Program, and other HUD program funds. Some of these federal funds are administered through the City and/or the County. In addition, State funding programs are also available, including the Low Income Housing Tax Credit program and SHIP.
8. If moderate-income workers get 40 units, who will get the 120 remaining units, and at what price? Market?
One hundred percent (100%) of the project (all three buildings) must target households with incomes that meet the affordable housing guidelines. These households do not need to be workers; they can be seniors.
I do not know what 40 units you are referencing, as all three buildings are being developed for affordable housing. The affordable housing criteria (housing meeting the needs of households that earn UP TO 120% of area median income for State programs or UP TO 80% of area
median income for HUD programs) establishes the maximum income a household can earn to qualify for this housing. They can certainly earn less than the max (depending on the program) and qualify for the housing.
9. Is the "cultural arts workers" concept just a glamorous farce? Why? Would the project otherwise be unattractive?
The issue/question is not related to the acquisition of the three buildings, as the project was approved by the commission to provide affordable housing to income-eligible applicants, regardless of occupation. In addition, the discussion relating to the City’s
funding of the project pre-dates discussions by CANDO.
The project has been and remains attractive because a large percentage of the City’s workforce has an income level that would qualify them for this housing (73%). The City has been interested in providing housing opportunities for employees working in our retail,
hospitality, cultural arts, and etc. industry sectors. Individuals that meet income eligibility may apply for this housing when it becomes available, that could include cultural workers.
10. Is the project still feasible given the declining market that some economists say will result in a decade long slump?
The demand for affordable housing exists, especially for workers in the industry sectors that support our local economy. The average wage of these workers is well below the affordable housing criteria. There are currently waiting lists for every affordable housing
project the City has funded. In addition, the purchase of the three buildings assists in achieving another goal of the city - affordable housing retention. Tenants of the currently occupied buildings meet the affordable housing income eligibility criteria. If these buildings had not been purchased with the funding allocated to
MBCDC, the buildings could have been purchased and converted into market rate housing, and the affordable housing lost to the community.
11. Why should the public finance the project rather than private investors and bankers?
MBCDC will, in fact, be pursuing private sources of funding for project rehabilitation. As you may be aware, affordable housing development traditionally requires public subsidy (sometimes substantial) in order to reduce debt service and make the project affordable. The
lower rents that must be charged to tenants in affordable housing projects impacts the amount of income that can be generated by the properties, making it very difficult for affordable housing developers to carry any significant amount of conventional debt, let alone generate a net operating income (profit). The City Center RDA
plan includes a component relating to the use of RDA funds for the retention of affordable housing.
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