A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING THE CONTRACT BETWEEN THE CITY, AS BUYER, AND RICHARD D. KENDLE II, AS SELLER, FOR THE PURCHASE OF A MULTIFAMILY PROPERTY, LOCATED AT 1776 NORMANDY DRIVE, MIAMI BEACH, FLORIDA, FOR THE TOTAL SALES PRICE OF $775,000 PLUS CLOSING COSTS, FOR USE AS AFFORDABLE HOUSING, TO BE FUNDED FROM COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDS AND HOME INVESTMENT PARTNERSHIP (HOME) FUNDS; AND FURTHER AUTHORIZING THE CITY MANAGER TO EXECUTE ALL CLOSING DOCUMENTS AND POST-CLOSING DOCUMENTS AND NOTIFICATIONS WHICH MAY BE REQUIRED UNTIL THE PROPERTY CAN BE OPERATED AS AN AFFORDABLE HOUSING PROJECT PURSUANT TO HUD GUIDELINES.

The Administration recommends approving the Resolution.

The availability of affordable housing has been a priority for the City and is critical to its economic growth. The City's Comprehensive Plan, amended via Ordinance 2017-4147, established the goal of creating and maintaining 6,300 affordable housing units to serve low- and moderate-income and special needs households within its boundaries. The strengthening of the City's real estate market, coupled with the sharp reduction in housing funds from the state and federal governments, have severely curtailed the development growth the City experienced in 2000 - 2011. No new City-sponsored units have been added to the affordable housing inventory since that time.

However, an opportunity to add to the City's affordable housing stock has arisen as a result of the City's resolution of past compliance issues with the U. S. Department of Housing and Urban Development (HUD). On July 2, 2018, the City Commission approved Resolution No. 2018-30374. This action appropriated $1,079,000 (the Appropriated Funds) from the General Fund for the repayment of HUD funds that the  Office of the Inspector General  (OIG) had deemed were inappropriately expended by the City's previous administration. Notice of this repayment was transmitted via Letter to Commission (580-2017) on December 5, 2017.

In its letter to the City of August 6, 2018, HUD's Community Planning and Development Division which explained that the Appropriated Funds would return to the City’s Line of Credit Control System (LOCCS) and be available for expenditure by the City in compliance with expenditure rules and deadlines prescribed by the Community Development Block Grant (CDBG) and HOME Investments Partnership (HOME) programs.

HUD requires its entitlement jurisdictions to ensure that funded activities are carried out in the defined project scope and within the timeframe allowed by each program and the fiscal year of funds issuance.

The funds returned to the City’s line of credit may be used to acquire, develop or rehabilitate affordable housing for households earning up to 80 percent of area median income (AMI). In an effort to increase the supply of affordable housing and ensure timely expenditure of these HUD funds, the Commission approved Resolution No. 2018-30551 authorizing the purchase of a qualifying multifamily property that can be acquired and made ready for tenancy solely with the available HUD funds. This property, once acquired, would subsequently house income-eligible households drawn from the City's affordable housing wait list.

The Administration has identified and executed a purchase agreement for a multifamily property, located at 1776 Normandy Drive, Miami Beach, FL 33141 in the amount of $775,000. The 2-story, 2,511 square foot building sits on a 6,250 square foot lot. The property is comprised of 4 units, each with one bedroom and one bathroom, central air conditioning and new impact windows and doors. The zoning regulations allow for up to 9 units on this property. Its lot size is large enough to build additional units at a future date with a zoning waiver.  The purchase of the property is contingent upon the receipt of appraisal and the completion of due diligence for property acquisition. Please note that the sale will not be completed if the appraisal results do not adhere with HUD's Area Median Purchase and maximum per-unit subsidy amounts.

The Administration recommends approval and authorization of the actions proposed above and authorizing the City Manager to execute all required documents as delineated herein.

Three of the four units are occupied and the Administration will have to follow the Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA) requirements, in the event that the existing tenants are not income eligible, under HUD guidelines, to continue living at the Property once the City begins operating the property as an affordable housing project.  These costs would be paid from the Appropriated Funds.  Typical closing costs for a purchase and sale transaction could total approximately three percent (3%) of the sales price ($23,250), which costs will stay within the limits of the Appropriated Funds.

The City will be using only CDBG and HOME funds for the acquisition of this property.