HomeMy WebLinkAbout2010-095-1277 - Amending the Neighborhood Stabilization Program
City of Miami Gardens Agenda Cover Memo Council Meeting Date: May 12, 2010 Item Type: (Enter X in box) Resolution Ordinance Other X Fiscal Impact: (Enter X in box) Yes No Ordinance Reading:
(Enter X in box) 1st Reading 2nd Reading X Public Hearing: (Enter X in box) Yes No Yes No X Funding Source: Neighborhood ilization ram (NS Stab Prog P) Advertising Requirement: (Enter
X in box) Yes No X Contract/P.O. Required: (Enter X in box) Yes No RFP/RFQ/Bid #: X N/A Sponsor Name Danny Crew, City Manager Department: Community Development Short Title: A RESOLUTION
OF THE CITY COUNCIL OF THE CITY OF MIAMI GARDENS, FLORIDA, AMENDING THE CITY’S NEIGHBORHOOD STABILIZATION PROGRAM (“NSP”) TO DEOBLIGATE THE SUM OF ONE MILLION, SEVEN HUNDRED SIXTEEN
THOUSAND, FIVE HUNDRED TWENTY-NINE DOLLARS AND 70/100 CENTS ($1,716,529.70) THAT WAS PREVIOUSLY AWARDED TO DIAMOND POINT AT MIAMI GARDENS, LLC; TRANSFERRING THE SUM OF ONE MILLION DOLLARS
($1,000,000.00) TO BE DIVIDED IN EQUAL PARTS OF FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) FROM ACTIVITY #5 SUBSIDY ASSISTANCE FOR BUYERS OF PURCHASED PROPERTIES, TO ACTIVITY #3 PURCHASE
OF FORECLOSED PROPERTIES FOR RESALE AND FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) TO ACTIVITY #4 REHABILITATION OF UNITS FOR RESALE; PROVIDING FOR THE ADOPTION OF REPRESENTATIONS;
PROVIDING AN EFFECTIVE DATE. Staff Summary: Background In response to the national foreclosure crisis, the U.S. Department of Housing and Urban Development (HUD) provided Neighborhood
Stabilization funds to assist local governments to acquire abandoned and foreclosed upon properties for demolition, rehabilitation, and sale in areas of greatest need. The purpose of
the Neighborhood Stabilization Program (NSP) is to revitalize and stabilize these impacted communities. The City of Miami Gardens received $6,866,119.02. ITEM L-1) RESOLUTION PUBLIC
HEARING Amending the Neighborhood Stabilization Program
1515 NW 167 Street, Building 5 Suite 200 Miami Gardens, Florida 33169 On November 12, 2008 the City Council approved the City’s NSP Plan, which outlined the activities that would be
carried out by the City for this program. The following are the approved activities (and corresponding budget) reflected in the City’s plan: Activity Budget 1. Purchase and rehab of
foreclosed properties for housing of individuals earning up to 50% of AMI $1,716,529.70 2. Demolition of abandoned housing units $130,000.00 3. Purchase of foreclosed properties for
resale $2,000,000.00 4. Rehab of units for resale $957,977.42 5. Subsidy assistance for buyers of purchased properties $1,375,000.00 6. Program Administration $686,611.90 Total NSP Funds
Received $6,866,119.02 Current Situation De‐obligation of Funds On May 27, 2009 the City Council adopted Resolution No. 2009‐105‐1050 awarding $1,716,529.70 to Diamond Point at Miami
Gardens, LLC (Diamond Point) to carry out Activity #1 (Purchase and rehab of foreclosed properties for housing of individuals earning up to 50% of AMI). Diamond Point’s proposal included
a full gut rehabilitation of the property located at 17300 NW 7th Avenue (the old Parkway Hospital Building) and converting it into an Assisted Living Facility for the very low income
elderly population. The total cost of the project exceeded the $1,716,529.70 that was awarded by the City, and Diamond Point had 120 calendar days from the date of the award to fill
project funding gaps. Diamond Point was unable to secure the needed financing to fill the funding gaps, therefore the project is no longer practicable within the NSP program guidelines.
The NSP Program includes strict time constraints to obligate (18 months) and expend (36 months) NSP funds. Due to these time constraints, staff is asking the City Council to de‐obligate
the $1,716,529.70 that was awarded to Diamond Point, in order to be able to use these funds to purchase and rehab abandoned and foreclosed properties that will be used to house individuals
and families that are at or below 50% of AMI, or sold to households that are at or below 50% of AMI. New Activity – Redevelopment of vacant lands The City’s NSP Plan budgeted $130,000
of NSP funds for demolition of abandoned housing units. The Department of Community Development has been working closely with the Building and Code Enforcement Department to identify
properties that are blighted and pose a health and safety risk to the community. Staff proposes to acquire these properties through administrative foreclosure and use up to $130,000
of NSP funds to demolish the blighted structures. Additionally, the City, as required by HUD, intends to redevelop these vacant properties at a later date. The City can use NSP funds
to redevelop a property that is vacant or has been demolished. In order for the City to be able to redevelop these vacant properties with NSP funds or NSP program income, the City must
add an Activity to our NSP plan. The proposed activity is “Redevelopment of vacant lands” and will not include a budget at this time. Instead this activity will be funded at a later
time by NSP program income that will be generated by the resale of acquired and rehabilitated properties. Please Note – raw land is not eligible for redevelopment under NSP. The property
must have been previously developed and is currently vacant.
1515 NW 167 Street, Building 5 Suite 200 Miami Gardens, Florida 33169 Budget Adjustment The City’s NSP Plan budgeted $1,375,000 for subsidy assistance for buyers of purchased properties.
The Department of Community Development is proposing to move $1,000,000 from activity #5 (Subsidy assistance for buyer of purchased properties) into activities #3 (Purchase of foreclosed
properties for resale) and #4 (Rehab of units for resale). The budget adjustments will be as follows: Activity Reduction Increase #3 – Purchase of foreclosed properties for resale $500,000
#4 – Rehab of units for resale $500,000 #5 – Subsidy assistance for buyers of purchased properties $1,000,000 Totals $1,000,000 $1,000,000 The NSP has a strict deadline of September
2, 2010 to obligate program funds. In an effort to comply with this requirement, CD staff is recommending that the $1,000,000 for direct subsidy assistance be used instead to purchase
and rehab foreclosed properties for resale, and that an indirect subsidy be offered to homebuyers in the form of a reduced price on the resale of the homes purchased with NSP funds.
By doing this, the City will be able to purchase and rehab more abandoned and foreclosed properties and obligate the funds by the September 2, 2010 deadline. A resolution is needed in
order to de‐obligate the $1,716,529.70 that was awarded to Diamond Point at Miami Gardens, LLC, and to amend the NSP Plan to add the activity “Redevelopment of vacant lands” and reflect
the $1,000,000 budget adjustment. Proposed Action: Staff recommends the approval of the proposed resolution de‐obligating the award of $1,716,529.70 to Diamond Point at Miami Gardens,
LLC, and amending the City’s NSP Plan to add the activity “Redevelopment of vacant lands” and reflect the $1,000,000 budget adjustment, and authorizing the City Manager to submit the
amendment to HUD. Attachments: • Resolution No. 2009‐105‐1050 – Award of $1,716,529.70 to Diamond Point at Miami Gardens, LLC