The Administration recommends amending Resolution No. 2022-32188, which adopted the City’s One-Year Action Plan and approved the allocation of $500,000 in HOME Investment Partnership Program (HOME or HOME Program) funds to the Housing Authority of the City of Miami Beach for the replacement of the seawall at 280-300 South Shore Drive.

The Five-Year Consolidated Plan is a federal requirement for all U.S. Department of Housing and Urban Development (HUD) entitlement cities. The City of Miami Beach is a HUD-designated entitlement city as determined by the decennial census information on population growth lag, over-crowding, age of housing stock, and poverty. The City of Miami Beach has been a Community Development Block Grant (CDBG) entitlement community since 1975. The HOME Program was started in 1992 to provide funding specifically for affordable housing.

As an entitlement community, the City automatically qualifies for an annual allocation of federal funding under HUD’s grant programs. HUD requires each entitlement community to submit an annual One-Year Action Plan describing how it will utilize funding and resources to address priority needs identified in the City’s Consolidated Plan. The One-Year Action Plan is a component of the Five-Year Consolidated Plan filed with HUD. Entitlement cities must make recommendations for awarded projects by August 16 for the upcoming program year, which starts on October 1.

On January 24, 2022, the City issued a FY22 (October 1, 2022- September 30, 2023) Request for Proposals (RFP) for CDBG, HOME, and HOME-American Rescue Plan (ARP) program funds. The Housing Authority of the City of Miami Beach (HACMB) applied for CDBG funds for the Vista Breeze Seawall reconstruction project for $500,000. However, the Administration recommended funding the project with HOME funds.
The Vista Breeze Seawall project is a component of a larger new construction project consisting of 119 studio apartment units in two (2) buildings on Normandy Isles, located at 165-185 South Shore Drive and 280-300 South Shore Drive in Miami Beach. All units will be rented to persons 65 and older at or below 80% Area Median Income.

On June 22, 2022, the Mayor and City Commission adopted Resolution No. 2022-32188, adopting the City’s One-Year Action Plan for federal funds for FY 2022, which included the budgets for the CDBG program in the amount of $941,433; the HOME program in the amount of $676,153; and the HOME-ARP program in the amount of $1,630,667. The Resolution named HACMB as the approved sub-recipient for the Vista Breeze Seawall project.

As part of the FY23 RFA (October 1, 2023- September 30, 2024) due diligence process, the Administration identified a ground lease agreement between HACMB and Vista Breeze, LTD., executed on August 6, 2021. The ground lease agreement names HACMB as the landlord, and Vista Breeze LTD. (Vista Breeze), a related entity of the Atlantic Pacific Companies (a subsidiary of Atlantic Pacific Companies), as the tenant. The ground lease grants Vista Breeze the right to develop and own the improvements during the ground lease term.

As HACMB was approved as a sub-recipient for the HOME Program and HOME guidelines require the owner and sub-recipient to be the same entity; the Administration is seeking to amend the One-Year Action Plan approved via Resolution No. 2022-32188 to reflect Vista Breeze as the sub-recipient of HOME funds.

Note that Vista Breeze has identified and submitted applications for various funding sources from Florida Housing Finance Corporation (FHFC) to complete the affordable housing project, including State Apartment Incentive Loan (SAIL), an Extremely Low Income (ELI) loan, a National Housing Trust Fund (NHTF) loan, and Housing Credits (HC). The project has received preliminary commitments for a SAIL loan of up to $3,000,000, an ELI loan of up to $600,000, and an NHTF loan of $1,301,500. Additional funding is needed to complete the seawall construction and part of the 165 and 185 South Shore Drive units. The Administration is currently conducting the environmental review and underwriting to ensure compliance with the HOME Program regulations.

The City’s HOME Program loan is a deferred loan that is forgivable provided that the property remains affordable. If there is a default, the full loan amount would be repayable, in addition to the default interest rate prescribed in the loan documents. The HOME Program loan would be subordinate to the FHFC loans. All loan documents, which include a restrictive covenant, HOME Program agreement, Mortgage, and Promissory Note, will be reviewed and approved by Vista Breeze’s legal counsel, HACMB, HUD, and the Office of City Attorney.

Additionally, Atlantic Pacific Communities applied for HOME funds during the FY23 Request for Application (RFA) process to fill a funding gap in developing the Vista Breeze project. The Administration recommends allocating $503,970.00 in FY23 HOME funds for this project. A separate item will be presented to the Mayor and City Commission on June 28, 2023.

Project Status

The seawall project is currently pending approval and issuance of City of Miami Beach permits. Vista Breeze intends to commence the seawall project by the end of June 2023.

The Administration must complete an environmental review process required by HUD for all funded projects to ensure that the proposed project does not negatively impact the surrounding environment and will not have an adverse environmental or health effect on end users, such as future tenants. The environmental review must be completed with an approved request to release funds from HUD before executing the loan documents. Upon completion of the environmental review, the Administration must advertise a notice of intent to request the release of funds (RROF) with a fifteen (15)-day public comment period. The RROF is executed by the City Manager and submitted to HUD upon the completion of the comment period. HUD will accept objections to the City’s RROF certification for fifteen (15) days. After this, the City is authorized to use the funds. The Administration advertised a Notice of Finding of No Significant Impact and a Notice of Intent to Request Release of Funds for public comment period, which will expire on June 26, 2023.

The larger Vista Breeze project is currently in the credit underwriting phase with FHFC and projected to close in September 2023. As such, part of the underwriting process entails confirmation from all funders subordinate to the FHFC funding, including the City’s HOME Program loan. The City will provide a conditional loan commitment letter confirming the loan terms, as requested by Atlantic Pacific Communities. Once the FHFC funding is fully approved, permitting and construction will commence. Construction is projected to last fifteen (15) months. The Vista Breeze development is projected to have its first residents by December 2024.

The Mayor and City Commission identified the need for workforce and affordable housing as a key objective in the City’s 2019 Strategic Plan Through the Lens of Resilience. The City’s 2040 Comprehensive Plan prioritizes affordable housing, with the express goal “to encourage redevelopment that provides workforce and affordable housing” within the City.

Vista Breeze has secured control over the project site and the right to develop and own the improvements pursuant to the ground lease agreement, dated August 6, 2021, between HACMB as the Landlord and Vista Breeze, as the tenant. Therefore, the Administration recommends amending Resolution No. 2022-32188, to replace HACMB with Vista Breeze as the sub-recipient for the Vista Breeze Seawall project award.