HomeMy WebLinkAbout2009-189-1135 - NSP Home Liens
City of Miami Gardens Agenda Cover Memo Council Meeting Date: October 14, 2009 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 Public Hearing: (Enter X in box) Yes No Yes No X Funding Source: (Enter Fund & Dept) N/A Advertising Requirement: (Enter X in box) Yes
No 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, AUTHORIZING THE CITY MANAGER, IN CONSULTATION WITH THE CITY ATTORNEY, TO NEGOTIATE AND/OR RELEASE CITY CODE ENFORCEMENT LIENS ON HOMES
PURCHASED BY THE CITY FOR THE NEIGHBORHOOD STABILIZATION PROGRAM; PROVIDING FOR THE ADOPTION OF REPRESENTATIONS; PROVIDING AN EFFECTIVE DATE Staff Summary: Background The City of Miami
Gardens received an allocation of $6,866,119.02 from the Neighborhood Stabilization Program (NSP). The City submitted its plan of activities to be carried out to the U.S. Department
of Housing and Urban Development (HUD). The City’s plan was approved and the contract was executed on March 4, 2009. The City has 18 months to expend or encumber the program funds from
the date of contract execution. One of the activities proposed in the City’s approved plan is to purchase abandoned and foreclosed homes, rehabilitate them and resell them to eligible
buyers. The City’s proposes to purchase approximately 25 homes meeting the plan criteria, which includes purchasing them at a discount of 1% less than the appraised market value. ITEM
J-13) CONSENT AGENDA RESOLUTION Code Enforcement Liens
1515 NW 167 Street, Building 5 Suite 200 Miami Gardens, Florida 33169 To ensure compliance with the NSP time constraints (18 months from contract execution), Council approved amending
Ordinance Number 2005‐10‐48 on January 14, 2009, which authorized the City Manager to execute any and all purchase and sale agreements for homes being purchased for the NSP. On June
24, 2009, the same Ordinance was further amended authorizing the City Manager to execute all agreements with contractors who will be awarded to provide rehabilitation services for the
homes being purchased for the NSP. Current Situation Since the execution of our contract with HUD on March 4, 2009, the City has acquired seventeen (17) houses, of which six (6) are
currently undergoing rehabilitation. In order to achieve this level, however, Staff has had to submit purchase contracts on more than properties, competing against investors and other
buyers. Once a purchase contract is submitted, staff has a very limited time frame to make a purchase decision. In many instances, the properties under consideration have amassed significant
Code Enforcement liens. The City’s efforts to address outstanding liens, and consequently purchase of the property, would be more effective if administrative authority were granted to
the City Manager to negotiate and/or waive said liens. Currently, the authority to either release or reduce liens rests with the Special Master. However, because of their defined hearing
schedules, staff is unable to meet purchase commitment deadlines imposed by the holders of title. Despite knowledge of the NSP, lenders are required to accept immediate cash offers in
order to mitigate the declining value of their portfolios. The existence of liens on a property affect the City’s ability to negotiate the purchase of the home, limiting the City Manager
to either purchase the property with the existing liens or rescind the City’s offer. The City’s NSP plan allows for the purchase of homes with existing liens, the remedy of the violations
and any other repairs deemed necessary to make the homes marketable. Staff has made an effort to purchase homes that are less desirable to other buyers, mainly due to the conditions
and the existing violations and/or liens. However, it should be noted that private investors or buyers are not required to adhere to such requirements. Moreover, during the foreclosure
process, many of the City’s liens are extinguished and therefore not recovered by the City. Authorizing the City Manager, in consultation with the City Attorney, the authority to negotiate
and/or release the liens, would allow for more effective and timely negotiation of the purchase , and possibly allow the City to recover a reasonable portion of the lien amount. Proposed
Action: Staff recommends that City Council approve the proposed resolution authorizing the City Manager, in consultation with the City Attorney, to negotiate and/or release Code Enforcement
Liens on homes purchased for the Neighborhood Stabilization Program. Attachment: None