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RESOLUTION AUTHORIZING THE COUNTY MAYOR OR THE COUNTY MAYOR�S DESIGNEE TO AMEND THE COUNTY�S RENTAL ASSISTANCE DEMONSTRATION APPLICATION FOR A PORTFOLIO AWARD TO INCLUDE THREE ROUND TOWERS B AND C, TO SUBMIT RENTAL ASSISTANCE DEMONSTRATION APPLICATIONS AND ANY OTHER NECESSARY DOCUMENTS TO THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FOR THE PURPOSE OF REFINANCING AND CONVERSION OF EIGHT ADDITIONAL PUBLIC HOUSING PROJECTS, INCLUDING JACK ORR, JOE MORETTI PHASE I, JOE MORETTI PHASE II A, STIRRUP PLAZA, SOUTH MIAMI PLAZA, DANTE FASCELL, COLLINS PARK, AND THREE ROUND TOWER A TO SECTION 8 PROJECT-BASED HOUSING THROUGH THE RENTAL ASSISTANCE DEMONSTRATION PROGRAM; AUTHORIZING THE COUNTY MAYOR, THE COUNTY MAYOR�S DESIGNEE OR THE CHAIRPERSON OF THE BOARD TO TAKE ALL OTHER NECESSARY STEPS TO EFFECTUATE THE PURPOSE SET FORTH HEREIN; APPROVING AND AUTHORIZING THE COUNTY MAYOR OR THE COUNTY MAYOR�S DESIGNEE, PURSUANT TO SECTION 17-02 OF THE CODE OF MIAMI-DADE COUNTY, TO RE-LOAN REPAID LOANS OF DOCUMENTARY SURTAX PROGRAM FUNDS TO RELATED URBAN DEVELOPMENT GROUP, LLC OR RELATED ENTITIES FOR THE SUBSTANTIAL REHABILITATION OF ROBERT KING HIGH, JOE MORETTI PHASE 2B AND THREE ROUND TOWERS B AND C, AND THE NEW CONSTRUCTION OF BRISAS DEL ESTE AND BRISAS DEL RIO PHASE TWO; AUTHORIZING THE COUNTY MAYOR OR COUNTY MAYOR�S DESIGNEE TO EXECUTE A CONDITIONAL LOAN COMMITMENT, STANDARD SHELL CONTRACTS, STANDARD SHELL LOAN DOCUMENTS, AMENDMENTS, OTHER DOCUMENTS OR AGREEMENTS NECESSARY TO ACCOMPLISH THE PURPOSES OF THIS RESOLUTION, TO SUBORDINATE THE COUNTY�S INTERESTS AND TO EXERCISE THE TERMINATION, WAIVER, ACCELERATION, CANCELLATION AND OTHER PROVISIONS CONTAINED THEREIN

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WHEREAS, this Board desires to accomplish the purposes outlined in the accompanying memorandum, a copy of which is incorporated herein by reference,

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MIAMI-DADE COUNTY, FLORIDA, that:

Section 1. The foregoing recital is incorporated in this resolution and is approved.

Section 2. This Board authorizes the County Mayor or the County Mayor�s designee to submit Rental Assistance Demonstration (�RAD Program�) applications and any other necessary documents, to the United States Department of Housing and Urban Development (�HUD�) and amend the County�s Rental Assistance Demonstration application for a portfolio award to include Three Round Towers B and C public housing sites, for conversion to Section 8 Project-Based housing through the RAD Program.

Section 3. This Board authorizes the County Mayor or the County Mayor�s designee to submit RAD applications and any other necessary documents to HUD for the purpose of refinancing and converting eight additional public housing projects developed or rehabilitated by Related Urban Development, LLC (Related Urban), which include Jack Orr, Joe Moretti Phase I, Joe Moretti Phase II A, Stirrup Plaza, South Miami Plaza, Dante Fascell, Collins Park, and Three Round Tower A public housing sites (collectively the �Public Housing Projects�).

Section 4. This Board authorizes the County Mayor, the County Mayor�s designee or the Chairperson of the Board to take all other necessary steps, including, but not limited to, the submission of financial plan(s), pro forma(s), execution of required certifications and Section 8 Housing Assistance Payment Contracts that are required for the conversion of the Public Housing Projects to Section 8 project-based housing through the RAD Program.

Section 5. In the event Related Urban repays in full the documentary stamps surtax program loans (Surtax Loans) in the approximate amount of $14.7 million, which are associated with the Public Housing Sites, before the date on which such loans are due in full, this Board approves and authorizes the County Mayor or the County Mayor�s designee, in accordance with section 17-02 of the Code of Miami-Dade County, to re-loan such repaid loan proceeds for the following purposes: (1) the substantial rehabilitation of Robert King High; (2) the substantial rehabilitation of Joe Moretti Phase 2B; (3) the substantial rehabilitation of Three Round Towers B and C and the new construction of Brisas del Este; and (4) the new construction of Brisas del Rio Phase Two.

Section 6. In the event Related Urban repays in full the Surtax Loans identified in section 5 of this resolution, this Board authorizes the County Mayor or County Mayor's designee (a) to execute a conditional loan commitment, (b) to execute all standard shell contracts, standard shell loan documents, amendments and other agreements, (c) upon a determination that such actions are in the best interest of the County, to execute any documents or agreements necessary, (d) to subordinate and/or modify the terms of contracts, agreements, amendments and loan documents so long as such modifications are approved by the County Attorney�s Office and are not substantially inconsistent with this resolution, and (e) to exercise the termination, waiver, acceleration, or other provisions set forth therein.

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Date:

To: Honorable Chairwoman Audrey M. Edmonson
and Members, Board of County Commissioners

From: Carlos A. Gimenez
Mayor

Subject: Submission of Rental Assistance Demonstration Applications and Any Other Necessary
Documents to the United States Department Of Housing and Urban Development for the
Conversion of Certain Public Housing Projects to Section 8 Project-Based Housing
Through the Rental Assistance Demonstration Program

STAFF RECOMMENDATION
Recommendation
It is recommended that the Board of County Commissioners (Board):

1. Authorize the County Mayor or the County Mayor�s designee to amend the County�s Rental Assistance Demonstration application for a portfolio award (Portfolio Award Application or Portfolio Award) to include Three Round Towers B and C, for conversion to Section 8 Project-Based housing through the United States Department of Housing and Urban Development�s (HUD) Rental Assistance Demonstration Program (RAD Program or RAD);

2. Authorize the County Mayor or the County Mayor�s designee to submit Rental Assistance Demonstration Applications (RAD Applications) and any other necessary documents which may be required by HUD for the purpose of refinancing and converting to the RAD Program eight additional public housing projects developed or rehabilitated by Related Urban Development, LLC (Related Urban), which includes Jack Orr, Joe Moretti Phase I, Joe Moretti Phase II A, Stirrup Plaza, South Miami Plaza, Dante Fascell, Collins Park, and Three Round Tower A (collectively referred to as the Public Housing Projects) to Section 8 project-based housing through the RAD Program;

3. Authorize the County Mayor, the County Mayor�s designee or the Chairperson of the Board to take all other necessary steps, including, but not limited to, the submission of financial plan(s), pro forma(s), execution of required certifications and Section 8 Housing Assistance Payment Contracts (Section 8 HAP) that are required for the conversion of the Public Housing Projects through RAD;

4. In the event Related Urban repays in full the documentary stamps surtax program loans (Surtax Loans) in the approximate amount of $14.7 million, which are associated with the Public Housing Sites, before the date on which such loans are due in full, approve and authorize the County Mayor or the County Mayor�s designee, in accordance with section 17-02 of the Code of Miami-Dade County, to re-loan such repaid loan proceeds for the following purposes: (1) the substantial rehabilitation of Robert King High; (2) the substantial rehabilitation of Joe Moretti Phase 2B; (3) the substantial rehabilitation of Three Round Towers B and C and the new construction of Brisas del Este; and (4) the new construction of Brisas del Rio Phase Two; and

5. In the event Related Urban repays in full the Surtax Loans, authorize the County Mayor or County Mayor's designee (a) to execute a conditional loan commitment, (b) to execute all standard shell contracts, standard shell loan documents, amendments and other agreements, (c) upon a determination that such actions are in the best interest of the County, to execute any documents or agreements necessary, (d) to subordinate and/or modify the terms of contracts, agreements, amendments and loan documents so long as such modifications are approved by the County Attorney�s Office and are not substantially inconsistent with this resolution, and (e) to exercise the termination, waiver, acceleration, or other provisions set forth therein.
Scope
This item has a countywide impact.

Fiscal Impact/Funding Source
There is no fiscal impact to the County for submitting the RAD Applications for the refinancing of the Public Housing Projects or adding Three Round Towers B and C to the RAD portfolio award request. However, it is estimated that $32 million will be generated from the proposed RAD conversion of the Public Housing Projects.

Track Record/Monitor
Michael Liu, Director, Public Housing and Community Development Department (PHCD) will monitor this project.

Background
The PHCD, on behalf of the County, currently oversees approximately 9,000 public housing units in Miami-Dade County. Of those units, approximately 2,400 have been redeveloped or are in the process of being redeveloped through the HUD-approved mixed-finance concept in which the County partners with private-sector developers to redevelop the County�s public housing sites. The average age of the County�s public housing sites is over 40 years. Generally, these public housing sites are old and have deficiencies inherent with an old housing stock, including but not limited to requiring major upgrading to elevators, security systems, mechanical, electrical and plumbing systems, fire safety, windows, doors and building envelope (hurricane resistant), and infrastructure.

Notwithstanding the County�s efforts to redevelop its public housing, the most effective way to deal with these mounting issues is through an expeditious redevelopment program that is not dependent on HUD�s Capital Funding Program, which only provides approximately $14 million per year to the County. This amount of capital funding is woefully inadequate for the County�s redevelopment needs that are roughly estimated at approximately $1.9 billion agency-wide. Further, PHCD should not have to continue to try to meet operating expenses without adequate operating cost funding from HUD.

The RAD Program is a HUD program authorized in the Fiscal Year 2012 Congressional Appropriations Bill. The RAD Program is the voluntary, permanent conversion of public housing to the Section 8 project-based housing program. Unlike the public housing program, the Section 8 project-based housing program allows for more funding flexibility, including the use of other funding sources, such as tax credits, private debt and equity, and other public funds to maintain and improve existing public housing buildings. The RAD Program also guarantees strong tenant protections that tenants currently have under the public housing program. The nation�s 1.2 million units in the Public Housing program have a documented repair backlog of nearly $26 billion. As a result, the public housing inventory has been losing an average of 10,000 units annually through demolitions and dispositions. The current conditions of many of these properties prevent reinvestment and recapitalization efforts in the communities with the most need without a funding stream based on Section 8 project-based contracts.

The following are the advantages of participating in the RAD program:

� The RAD Program will allow PHCD to address more redevelopment projects within a shorter time than it can under present funding options;
� The RAD Program can be a source of funds for modernization of the developments through private construction lenders, who understand RAD and are willing to provide construction and permanent financing;
� The RAD Program can access equity through low income housing tax credits;
� The RAD Program provides for a 20-year funding contract with annual cost of living adjustments;
� Modernization could be targeted at repairs and replacement of selected components and energy efficiency upgrades; and
� There are significant safeguards under the RAD Program for residents of public housing such as one-for-one replacement of public housing units and a guaranteed right of return for affected residents.
As mentioned above, to date, redevelopment of the County�s existing public housing stock includes a total of approximately 2,400 units that have been completed, are under construction or near to financial closing to allow for these units to be redeveloped. However, it is anticipated that approximately 6,426 additional public housing units will benefit from redevelopment if the County participates in the RAD Program.

Initially, when Congress approved the RAD Program in 2012, 60,000 public housing units were converted to RAD nationwide. Since then, the number of units converted has increased. As of July 16, 2018, HUD estimates that there are 85,000 un-awarded RAD units. The County is aware that many housing authorities are known to be presently applying for RAD units. In fact, on a recent HUD-sponsored �listening session� with industry partners held on August 8, 2018, HUD advised that �it expects a major increase in volume of units for RAD conversion.� There is every reason to believe that the 85,000 remaining units will be used up quickly, and after these units have been approved for RAD conversion, unless Congress authorizes more capacity, the only opportunities for gaining RAD approval will be from housing authorities who cannot make their projects work financially.

Due to the high demand to participate in RAD, the County alerted HUD to the County�s need to �reserve� 6,426 units under the RAD Program�s Portfolio Award process at the earliest possible opportunity. The Portfolio Award process allows a public housing agency, like the County, to reserve RAD conversion authority for a set of projects and locks in the applicable contract rent in the year of application. In order to apply for a Portfolio Award, a public housing agency must submit (a) a list of all projects proposed for a Portfolio Award and (b) RAD Applications for at least 50 percent of the Public Housing Projects identified in the portfolio. Accordingly, on August 30, 2018, the County transmitted to HUD Secretary Ben Carson a letter of interest, which listed 6,426 public housing units, which are identified in Attachment A of this memorandum, for inclusion in the Portfolio Award. The list of projects include the eight Projects identified above and which are more fully described in Attachment B of this memorandum. On December 4, 2018, the Board approved Resolution No. R-1240-18, authorizing the County Mayor to submit RAD Applications and any other necessary documents to HUD for the conversion of the public housing projects to Section 8 Project-Based Housing through the RAD program. On March 22, 2019, HUD sent the County a letter, which is attached to this memorandum as Attachment C, that commits to reserving conversion authority for all the units in the portfolio, subject to the County complying with certain requirements set forth in HUD�s notice on the RAD program (RAD Notice) within 365 days from the date of the letter, i.e. by March 30, 2020. The letter further advises the County that for each approved RAD Application, HUD will enter into a Commitment to enter into a Housing Assistance Payments (CHAPs). In order to meet HUD�s deadline, the RAD Notice requires the County to submit to HUD for its approval, among other things, a financing plan(s), proposed pro forma(s) and certain certifications all of which must be approved by the Board. Subject to HUD�s approval of the before-mentioned documents and successful closing of the conversion, the Public Housing Projects will receive a long-term Section 8 HAP. Upon conversion, the public housing units in the Projects, which are converted under the RAD program will be removed from the public housing program and HUD will no longer pay the County public housing operating subsidies for these converted units. Instead, the RAD units will be subsidized in accordance with the Section 8 HAP and the laws and regulations governing the Section 8 project-based program. The Public Housing Projects will also be released from the public housing declaration of trusts and the declaration of restrictive covenants, if applicable, and, in their place, RAD use agreements will be recorded in HUD�s favor.

In light of the HUD RAD award, on July 10, 2019, the Board adopted Resolution No. R-749-19, which approved the County�s amended Fiscal Year 2018-2019 Annual Public Housing Agency Plan and the Fiscal Year 2019-2020 Annual Public Housing Agency Plan (PHA Plans). As required by HUD regulations and directives the Plan needed to be amended in order to include certain RAD requirements. The PHA Plans have been submitted to HUD for their approval.

The County has had discussions with HUD concerning the refinancing of the Public Housing Projects, which Related Urban either substantially rehabilitated or constructed within the past six years. Additionally, the County discussed the possibility of having the Public Housing Projects converted to RAD. This approach was received positively and encouraged by HUD. Through the RAD conversion process, Related Urban will be able to seek refinancing of their loans on the Public Housing Projects. Neither the refinancing of the Public Housing Projects or the RAD conversion process will negatively affect the residents living in in the Public Housing Projects. In fact, the residents will continue to pay the same income-based rents as public housing and still enjoy strong tenant protections such as right to organize and elect officers.

The refinancing, which will be through national banking institutions, is estimated to generate approximately $30 million in net proceeds. In addition, over $2 million currently held in the operating and reserve accounts for the Projects will no longer be available to the Public Housing Projects. As noted above, once public housing units are converted through RAD, HUD public housing operating subsidies are no longer available. It is, however, estimated that $32 million will be generated from the proposed RAD conversion and refinance that Related Urban will be able to use to reinvest in other County-owned properties, as noted below.

The County currently has approximately $14.7 million Surtax loan funding invested in the Public Housing Projects. It is anticipated that these Surtax Loans will be repaid by Related Urban from the estimated $32 million generated through RAD. Thereafter, in accordance with section 17-02 of the Code of Miami-Dade County, Related Urban upon repaying the Surtax loans in full before the date on which the loans are due in full, have the repaid funds loaned to it, or a related entity, for additional eligible affordable housing projects. It is anticipated that Related Urban will reinvest the repaid Surtax loans, along with approximately $15 million in additional refinancing proceeds and the $2 million released from the operating and reserve accounts to fund the following projects: (1) the substantial rehabilitation of Robert King High (315 elderly Public Housing units); (2) substantial rehabilitation of Joe Moretti Phase 2B (96 elderly Public Housing units); (3) substantial rehabilitation of Three Round Towers B and C (263 elderly Public Housing units) and the new construction of Brisas del Este (120 units at the Three Round Towers site); and (4) the new construction of Brisas del Rio Phase Two located at the public housing development commonly known as the Senior Campus site, which will provide 235 new units that will house the elderly public housing residents from the existing Haley Sofge building located at 750 NW 13 Avenue, for a total of 1,029 substantially rehabilitated or new units. The proposed conversion provides an excellent opportunity for the County to generate cash proceeds that will be utilized to expedite redevelopment of projects as indicated above for the benefit of its public housing residents and the community.

Finally, PHCD recommends that the Board authorize the County Mayor or the County Mayor�s designee to amend the County�s Portfolio Award Application to include Three Round Towers B and C (263 units) and the Public Housing Projects (1,029), which were not included in the prior application to HUD, and to further authorize the County Mayor or County Mayor�s designee to submit RAD Applications. By including these buildings, the County will increase the number of public housing units converted to RAD from 6,426 to 7,718.

Attachments

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Maurice L. Kemp
Deputy Mayor