File Number: 120954
|Printable PDF Format Clerk's Official Copy|
|File Number: 120954||File Type: Resolution||Status: Adopted|
|Version: 0||Reference: R-445-12||Control: County Commission|
|Requester: Public Housing and Community Development||Cost:||Final Action: 5/15/2012|
|Sunset Provision: No||Effective Date:||Expiration Date:|
|Registered Lobbyist:||None Listed|
|Acting Body||Date||Agenda Item||Action||Sent To||Due Date||Returned||Pass/Fail|
|Board of County Commissioners||5/15/2012||14A2||Adopted||P|
|Office of the Chairperson||5/14/2012||Additions||5/15/2012|
|County Attorney||5/11/2012||Assigned||Brenda Kuhns Neuman||5/11/2012|
|County Mayor||5/11/2012||Assigned||County Attorney||7/3/2012|
|REPORT:||PHCD (dept will request waiver to 5/15/ BCC) - Brenda Newman assisted - no sponsor - pending cmte - Attachments: Lease Agreement|
|County Mayor||5/11/2012||Assigned||Russell Benford||5/11/2012|
RESOLUTION AUTHORIZING AN AMENDMENT TO THE LEASE AGREEMENT WITH CARLISLE DEVELOPMENT GROUP, LLC. (CARLISLE GROUP III, LTD.) FOR THE REDEVELOPMENT OF THE EXPANDED HOPE VI AREA, LOCATED AT 2320 NW 62 STREET, MIAMI, FOR THE PURPOSE OF DEVELOPING “THE ANCHORAGE” AFFORDABLE HOUSING PROJECT
WHEREAS, this Board desires to accomplish the purposes outlined in the accompanying memorandum, a copy of which is incorporated herein by reference; and
WHEREAS, Miami-Dade County owns a parcel of land with the address 2320 NW 62 Street (folio number 30-3115-000-0070) in Miami, Florida (the “Property”); and
WHEREAS, the Board approved by Resolution R-1151-08, the Substantial Amendment to the FY 2008 Action Plan to carry out Neighborhood Stabilization Program activities, which included the “neighborhood redevelopment of multi-family rental housing on the Expanded Hope VI Area”; and
WHEREAS, Carlisle Development Group LLC was selected through RFP No. 686 as the developer for this affordable housing development under the Neighborhood Stabilization Program; and
WHEREAS, Carlisle Group III, Ltd. (“Carlisle”), a related entity of Carlisle Development Group LLC, was assigned the lease on February 1, 2012; and
WHEREAS, Carlisle seeks to apply for tax credit financing through the State of Florida to further finance the development; and
WHEREAS, Carlisle has committed to develop 30 units in two phases all of which will be rented to households with incomes at or below one hundred and twenty percent (120%) of Area Median Income (AMI) with at least two million five hundred thousand dollars ($2,500,000) of the NSP funds for this project having a direct benefit to residents that are at or below fifty percent (50%) of AMI with all the units to be leased or provided to persons qualifying under the Neighborhood Stabilization Program (NSP) guidelines, including former qualified Scott/Carver residents who will have a right of first refusal; and
WHEREAS, the Board adopted Resolution No. R-1023-11 authorizing execution of the lease agreement between Carlisle Development Group and the County, and
WHEREAS, increased costs have caused the project to be completed in phases, with 22 units to be completed with the $5 million and the remaining eight units to be completed by funds to be identified by the developer,
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MIAMI-DADE COUNTY, FLORIDA, that
Section 1.The Board ratifies and adopts the matters set forth in the foregoing recitals.
Section 2.The Board authorizes the Mayor or the Mayor’s designee to negotiate and execute an amendment to the Lease Agreement between Miami-Dade County and Carlisle Development Group, LLC., as assigned to Carlisle Group III, Ltd. (“Carlisle”), for the Property to be developed by Carlisle as affordable housing, with the use of Neighborhood Stabilization Program funds, substantially as described in the memorandum attached hereto and made a part hereof.
Section 3.The Board authorizes the Mayor or the Mayor’s designee to execute agreements, amendments, closing documents, subordination agreements and other agreements as necessary to fulfill the purposes set forth in this resolution and to exercise any and all rights, remedies and powers conferred therein. The Mayor or the Mayor’s designee is further authorized to further amend the Lease or the Neighborhood Stabilization Plan (NSP) Funding Agreement dated July 19, 2010 executed between Carlisle Development Group, LLC and the County upon a determination by the Mayor or Mayor’s designee that such amendments are in the best interest of the County and are necessary to complete the project or remain in compliance with all applicable laws and rules, including the funding source rules and regulations.
To: Honorable Chairman Joe A. Martinez
and Members, Board of County Commissioners
From: Carlos A. Gimenez
Subject: Lease Amendment for the Anchorage (NSP Expanded HOPE VI Area) located at 2320 N.W. 62 Street, Miami
Property # 30-3115-000-0070
It is recommended that the Board of County Commissioners (Board) approve the attached resolution authorizing the County Mayor or the County Mayor’s designee to negotiate an amendment to the Lease Agreement with Carlisle Development Group, LLC, which was subsequently assigned to Carlisle Group III, Ltd. (Carlisle), attached as Exhibit 1, for land located at 2320 N.W. 62 Street, Miami and authorize the County Mayor or County Mayor’s designee to approve any changes that are necessary to expedite the expenditure of funds, including but not limited to adjusting the date for the Certificate of Occupancy and further authorizing the County Mayor or County Mayor’s designee to amend the Neighborhood Stabilization Plan Funding (NSP) Agreement dated July 19, 2010 executed between the parties. The County Mayor or the County Mayor’s designee is further authorized to approve substantial modifications to the project design in order to accommodate the changes set forth herein.
On November 20, 2008, the Board, through Resolution R-1151-08, approved, among other things, the County’s NSP Plan that includes the “neighborhood redevelopment of multifamily rental housing development on the Expanded HOPE VI Area” in the amount of $5 million. Subsequent to Board approval of the NSP Plan, the County issued RFP No. 686 for this development and included this site. The sole proposer to RFP No. 686 was Carlisle Development Group, LLC. On July 29, 2010, the County entered into an Affordable Housing Funding Agreement with Carlisle Development Group, LLC (Funding Agreement).
PHCD staff has been working with Carlisle to ensure the affordable housing development meets the County’s needs and the requirements of the funder, U.S. Department of Housing and Urban Development (HUD).
The original proposal from Carlisle was for the construction of 50 units. After a more in-depth investigation of the site, Carlisle determined that it was only large enough, based on current zoning, to accommodate 30 units. On November 15, 2011, the Board approved the lease between the County and Carlisle Carlisle Development Group, LLC, for use and development of the Project (Lease) and approved the reduction in units from 40 to 30. Following execution of the lease, the developer determined that construction costs for the Project far exceeded earlier estimates. Because of the high per unit building costs associated with a small project that must comply with Davis Bacon and other federal requirements, the developer has represented that it is only able to construct 22 units for the $5 million of NSP funds. Therefore, the developer has proposed phasing the project so that Phase 1 will consist of 22 units and Phase 2 will consist of 8 units. Together, Phase 1 and Phase 2 shall be referred to as the “Development” or the “Project”.
Amendments to the Lease
It is recommended that the Lease be amended in the following manner, and that these changes, where applicable, additionally be incorporated by amendment into the Funding Agreement:
1. The lease currently requires completion of construction, certificate of occupancy and 51% leased occupancy of 30 units no later than March 9, 2013. This deadline will be amended to require Carlisle to expend the $5 million of Neighborhood Stabilization (NSP) funds no later than March 7, 2013 in order to meet the NSP program’s expenditure deadline. In order to meet the March 7, 2013 expenditure deadline and to provide for the timely draw-down of NSP funds, LESSEE (Carlisle Development Group, LLC) shall submit a final draw request package to the County no later than February 21, 2013.
2. The Project will be bifurcated into phases to enable Carlisle to obtain financing needed to complete all 30 units. Phase 1 will consist of 22 units – four (4) two-bedroom and eighteen (18) one-bedroom residential units – which will be completed with temporary certificate of occupancy no later than June 7, 2013, with at least 16 units occupied by income-qualified persons no later than September 30, 2013. The $5 million of NSP funds will be expended developing Phase 1. Phase 2 will consist of 8 units – two (2) two-bedroom units and six (6) one-bedroom residential units – which will be completed with temporary certificate of occupancy and leased to income-qualified persons no later than December 31, 2016, subject to Carlisle obtaining financing needed to build Phase 2. The Lease, as amended, will allow Carlisle to sublease the portion of the Property upon which Phase 2 will be constructed to a related entity which will seek financing and will develop Phase 2.
3. All units – in Phase 1 and Phase 2 – shall be rented to households with incomes at or below 120 percent of area median income (AMI) with at least $2.5 million (50 percent) the NSP funds for this Project having a direct benefit to residents that are at or below 50 percent of AMI. Former qualified Scott/Carver residents will have a right of first refusal. In addition, the developer is working with local organizations to arrange for the units to be leased to youth aging out of foster care.
4. The Lease will be amended to describe the Property and Project in two phases. Phase 2 will be built after Phase 1 is completed and will be constructed over the surface parking lot built for the tenants of Phase 1. During construction of Phase 2, regardless of what developer is constructing Phase 2, Carlisle will find and pay for an alternative parking site for the tenants of Phase 1. In order to ensure that Phase 2 is built, Carlisle will defer taking any developer’s fee on Phase 1 or Phase 2 until Phase 2 is completed. Carlisle will give the County the entire developer’s fee for Phase 1 and any developer’s fee for Phase 2, and the County will place said fees in escrow pending completion of Phase 2, which means temporary certificate of occupancy. The County will disburse from the escrowed fee(s) the amount equal to the federal income tax liability imposed on Carlisle or its affiliated developer by virtue of the developer fee(s) in escrow. Carlisle shall be required to provide the County with evidence of such tax liability acceptable to the County, which may be in the form of a written statement from a certified independent accountant as to the amount of liability and its relation to the developer fee. The Mayor or Mayor’s designee may accomplish this by an assignment or collateral assignment of the developer’s fee, putting the developer’s fee in escrow, giving the County a letter of credit in the amount of the developer’s fee, or other mechanism to accomplish the purpose set forth herein.
5. The default provisions of the Lease will be bifurcated in accordance with the new phasing of the project. In the event that Carlisle defaults on the requirements of the Lease, as amended, as to Phase 1, including but not limited to completion, expenditure and lease-up terms and deadlines, the LEASE shall terminate and all improvements made to the entire Property shall become the property of the County at no cost. In the event that Carlisle defaults on the requirements of the Lease, as amended, as to Phase 2, including but not limited to completion, expenditure and lease-up terms and deadlines, then the following shall occur: (a) the Lease shall terminate as to the portion of the Property upon which Phase 2 was designed to be built and the surface parking lot will be re-leased to Carlisle for use by the tenants of Phase 1 and Phase 2, or, in the alternative, air and development rights to the portion of the Property upon which Phase 2 was designed to be built, including parking, will be granted from Carlisle to the County so that the County could complete Phase 2 with another developer; (b) Carlisle shall take no developer’s fee for Phase 1 or Phase 2 and shall give any developer’s fee(s) to the County to be held in escrow under the terms described in Section 4, above; (c) Carlisle shall assign to the County 100% of Net Cash Flow from Phase 1, with Net Cash Flow defined as the amount equal to all income generated by the Development, whether from tenant rentals, concessionaire rentals, parking revenues, advertising or any other incoming revenue, LESS all project expenses, including but not limited to operating expenses of the Development, management fees, debt service and fees payable to lenders, and amounts deposited in reserve accounts. Net Cash Flow shall be determined annually on a calendar year basis and shall be paid in arrears for the preceding calendar year (or portion thereof) on the first day of March, in the first full calendar year following issuance of the certificate of occupancy for the Development, and continuing annually in arrears on the one-year anniversary of such date thereafter, for the duration of the term of this Lease.
6. Article 4.1.2 of the Lease is hereby deleted and replaced as follows: “A surface parking lot that will include such number of spaces as is required pursuant to the Approved Plans, defined herein (the “Surface Parking Lot”). The Residential Units, plus any related amenities, together with other improvements, fixtures, and structures and the Surface Parking Lot are hereby referred to as the ‘Development.’”
7. Article 17.1.2 of the Lease will be deleted and replaced as follows: “At least eight (8) Residential Units in Phase 1 are to be set aside for youth aging out of foster care, which units may be replaced by units in Phase 2. The LESSEE will work with a partner agency to identify these applicants.”
8. Article 17.1.4 of the Lease is will be deleted and replaced as follows: “The above rentals will include services and amenities as required under Florida Finance Corporation’s Multifamily Mortgage Revenue Bond program and the Housing Credit program administered by the Corporation in accordance with Section 42 of the Internal Revenue Code, including investors, syndicators, and compliance staff to each unit.”
Amendments to the Funding Agreement
Ordinarily the County retains a portion of the contract funding contingent upon the project receiving a certificate of occupancy. In this case, the County needs the developer to expend the full $5 million of NSP funds by March 7, 2013, which may be before a certificate of occupancy is obtained. Therefore, it is recommended that the retainage requirement in the Funding Agreement be amended to allow the developer to expend the full $5 million of NSP funds by the March 7, 2013 expenditure deadline. The retainage shall be released to the developer if the Mayor or Mayor’s designee determines it is in the best interest of the County to do so, which may depend upon PHCD documenting through its own inspections that construction of Phase 1 is complete and Carlisle giving the County a letter of credit in the amount of $500,000.
This LEASE is monitored by Internal Services Department (ISD) on behalf of the Public Housing and Community Development (PHCD) department.
PROPERTY: 2320 NW 62 Street, Miami Folio No. 30-3115-000-0170
COMMISSION DISTRICT: 3
COMM. DISTRICTS IMPACTED: Countywide, as these units will be available to any income-eligible resident.
OWNER: Miami-Dade County
USE: Development of 30 affordable housing units in two phases.
LEASE TERM: 65 years and one day with no additional renewal option periods.
DATE: The date the last of the Lessor (County) and Lessee (Carlisle) executes the amendment.
RENTAL RATE: The rental rate will equal 90 percent of the monthly net cash flow generated by the development.
FISCAL IMPACT: The Property Appraiser has placed a market value on this property in 2011 of $205,632. Based on the projections of the developer for both Phase 1 and Phase 2, the real estate taxes for the next 15 years (on the building only), increased at the rate of three percent per year, will generate $446,374. Discounted at 3.75 percent (the present 30 year US Treasury rate) the net present value of these taxes is $329,968.
Additionally, the County is entitled to 90 percent of the project’s net income as rent. Again, based on the developer’s pro forma of net rent, the County’s share for the next 30 years is $387,863. Discounted at 3.75 percent (30 year US Treasury Bonds interest rate) the net present value of this revenue stream is $304,341.
LEASE CONDITIONS: The Lessee will be responsible for development of the site and on completion of construction will manage and maintain the property.
MONITOR: Leland Salomon, Director, ISD Real Estate Development Division.
DELEGATED AUTHORITY: The County Mayor or the County Mayor’s designee is expressly authorized to agree, on behalf of the Lessor, to:
a) any amendment to the Lease Agreement or Funding Agreement, which (i) reduces or increases the number of affordable housing units, (ii) reduces or increases the number of parking spaces in accordance with any variance or determination granted by the applicable governmental authority, (iii) reduces or increases the square footage of the Residential Units structure, (iv) modifies the design of the Development in a manner which is consistent with the use of the premises as set forth the plans approved consistent with this resolution, or (v) modifies the schedule, as long as such modification does not extend the expenditure date for the NSP funds beyond March 7, 2013;
b) execute any consent to any sublease;
c) execute such easements or re-leases as provided for in the Lease or as set forth in this resolution; and
d) execute any documents acknowledging a leasehold mortgage on the property;
e) amend the Lease or Funding Agreement upon a determination by the Mayor or Mayor’s designee that such amendment is in the best interest of the County and is necessary to complete the project or remain in compliance with the funding source rules and regulations.
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