The Administration recommends the Mayor and City Commission adopt the Resolution.

The Miami Beach Community Development Corporation (the “MBCDC”) was founded in 1981 by the Miami Design Preservation League. In the 1990s, MBCDC shifted its focus to developing affordable housing and serving the low-income residents of Miami Beach. MBCDC acquired several affordable housing properties by securing funding from private lenders and local municipalities. In 1997, MBCDC acquired the Jefferson Apartments, a 27-unit multi-family building located at 542 Jefferson Avenue (the “Property”). The Property is designated for elderly residents at or below 80 percent Area Median Income (AMI).

Since 2000, the City granted MBCDC over $28 million to acquire and rehabilitate twelve (12) multi-family housing properties, comprised of sixteen (16) different buildings and containing 323 income-restricted residential units.

As a participating jurisdiction and entitlement community, the City must enforce affordable housing requirements throughout the affordability period of every project. The City must also monitor all properties throughout the affordability period. In May 2013, the City extensively reviewed its U.S. Department of Housing and Urban Development (HUD)-funded projects and operations. This extensive review included the analysis of projects undertaken between 2008 and 2013 by the MBCDC, the City's largest HUD-funded beneficiary, and the City's internal processes, operations, and staff. As a result of such review, the City became concerned with the financial viability of the MBCDC agency and the condition of its properties and offered a plan to address MBCDC’s operational challenges while securing the City's fiscal interests and the well-being of the tenants housed by MBCDC. The City suggested that MBCDC surrender title to the following properties: Allen Apartments, Barclay Plaza Apartments, London House Apartments, Lottie Apartments, Madeleine Village Apartments, and Neptune Apartments. 

On February 12, 2014, the Mayor and City Commission adopted Resolution No. 2014-28506, approving the transfer of the London House Apartments from MBCDC to the City. On September 17, 2014, the Mayor and City Commission adopted Resolution No. 2014-28756, approving the transfer of the Allen Apartments, Barclay Plaza Apartments, London House Apartments, Lottie Apartments, Madeleine Village Apartments, and Neptune Apartments from MBCDC to the City. The City has acquired title to all of the foregoing approved transfers, with the exception of the Allen Apartments, which ultimately the City opted not to acquire due to the debt service and the use restrictions affecting the property.

Throughout 2014-2019, the City held multiple discussions with MBCDC to address the agency's financial setbacks that prevented it from addressing multiple structural deficiencies throughout the residential portfolio.

As it relates to the Jefferson Apartments, on April 13, 2016, the Mayor and City Commission adopted Resolution No. 2016-29358, authorizing the City’s allocation of $135,464.15 in State Housing Initiative Partnership (SHIP) funds (“Loan”) to MBCDC for the rehabilitation of the Property, which included the replacement of the roof and upgrades to the nine (9) units located on the third floor. In connection with the Loan, on June 30, 2016, the City, MBCDC and/or MBCDC/Jefferson, Inc. (Borrower) executed SHIP Agreements, a Promissory Note, Mortgage and Declaration of Restrictive Covenants, requiring that the Borrower operate the Property as an affordable housing development for fifteen (15) years from receipt of the certificate of occupancy, expiring on June 30, 2031 (“Affordability Period”). 

Despite the MBCDC’s efforts to improve the organization’s operations, it was no longer financially able to maintain the assets due to rising insurance and utility costs.

The City continues to monitor four (4) MBCDC properties that remain under affordability: 1) The Jefferson Apartments, 2) Allen Apartments, 3) Villa Maria Apartments, and 4) Meridian Apartments.

In December 2021, Miami-Dade County (the “County”), through Miami-Dade Public Housing Community Development (PHCD), and the MBCDC Board of Directors began discussing the business terms regarding the County’s acquisition of the remaining MBCDC portfolio.

On April 4, 2023, the County adopted Resolution No. 329-23 approving terms of and authorizing the County Mayor to execute a Memorandum of Agreement (MOA) with MBCDC to take over ownership and control of MBCDC’s portfolio. The Resolution authorized the County Mayor to execute a contract for sale and purchase between Fernwood Apartments and the Shelbourne Apartment Building, Inc., approving and authorizing the assumption of a total amount of forgivable debt on all properties and the total amount of institutional debt on all properties and eligible capital expenses all from available housing funds.

On May 8, 2023, MBCDC and the County executed a Memorandum of Understanding, recorded in Official Records Book 33707, at Page 176, of the Public Records of Miami-Dade County, Florida, which outlined the transfer of title and managerial and financial oversight of the assets being transferred from MBCDC and its subsidiaries to the County, including The Jefferson Apartments.  

The County has committed funding to address the most pressing structural issues identified within the portfolio and assigned Royal American Management to operate the facilities and ensure compliance with all program regulations.

MBCDC and the County developed a disposition schedule for transferring all properties in the portfolio. The scheduled closing date for the Jefferson Apartments is currently scheduled to take place on March 29, 2024, subject to further extension by the parties. In connection with the sale of the Property to the County, the City must consent to the assignment to, and assumption by, the County of the Promissory Note, Mortgage, Declaration of Restrictive Covenants and related SHIP Agreements (collectively, the “Loan Documents”), instead of repaying the Loan to the City; and in exchange, the County has agreed to assume the terms and conditions of the Loan Documents and operate the Property as an affordable housing development during the Affordability Period.

The City continues to collaborate with the County and Royal American Management to ensure that the long-term affordability of the Property is preserved at a time when Miami-Dade County is experiencing its worst housing crisis.

The City will continue to conduct annual monitoring to ensure compliance with federal regulations at the Jefferson Apartments until the expiration of the affordability period in 2031. The County is currently in the design phase for a major rehabilitation project at the Jefferson Apartments, including significant improvements to the stucco on the façade, and the interior of the units.

LOBBYIST DISCLOSURE

In accordance with Resolution No. 2023-32857, adopted by the City Commission on December 13, 2023, the following information has been provided by the Administration as it relates to the subject resolution:

1. Was the Agenda Item initially requested by a lobbyist which, as defined in Code Sec. 2-481, includes a principal engaged in lobbying? No

2. If so, specify name of lobbyist(s) and principal(s): N/A

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. 

$135,464.15 in previously allocated Fiscal Year 15/16 SHIP funds. No additional funding will be allocated. 

The Administration recommends that the Mayor and City Commission approve, in substantial form, the Assignment, Assumption and Amendment of Declaration of Restrictive Covenants, Promissory Note and Other Loan Documents, and the Mortgage Assumption Agreement (collectively, the “Assignment and Assumption Documents”), draft copies of which are attached hereto; and further authorize the City Manager and City Clerk to execute the Assignment and Assumption Documents and any other closing documents or agreements related to the purchase of the Property by the County.