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Item I11.1 County of/r�I�,Oe �04 BOARD OF COUNTY COMMISSIONERS l�'1 Mayor Heather Carruthers, District 3 The Florida Keys Mayor Pro Tern George Neugent, District 2 y Danny L. Kolhage, District 1 David Rice, District 4 Sylvia J. Murphy, District 5 County Commission Meeting October 19, 2016 Agenda Item Number: I.1 Agenda Item Summary #2190 BULK ITEM: No DEPARTMENT: Project Management / Facilities TIME APPROXIMATE: STAFF CONTACT: Doug Sposito (305) 292-4416 TBD AGENDA ITEM WORDING: Discussion and direction on Habitat for Humanity's proposal that the premises located at 30320 Overseas Highway in Big Pine Key, be conveyed to Habitat in exchange for a nominal amount. ITEM BACKGROUND: The Habitat for Humanity proposes that the premises be conveyed to Habitat for a nominal amount, as a response to the letter of termination issued by the County dated September 21, 2016. PREVIOUS RELEVANT BOCC ACTION: Item C-32 at the September 21, 2016 BOCC meeting. Approval to send notice of lease termination letter to Habitat for Humanity for the property located at 30320 Overseas Highway; Big Pine Key, FL. CONTRACT/AGREEMENT CHANGES: N/A STAFF RECOMMENDATION: N/A DOCUMENTATION: Habitat for Humanity Proposal FINANCIAL IMPACT: Effective Date: Expiration Date: Total Dollar Value of Contract: Total Cost to County: Current Year Portion: Packet Pg. 2174 l.1 Budgeted: Source of Funds: CPI: Indirect Costs: Estimated Ongoing Costs Not Included in above dollar amounts: Revenue Producing: Grant: County Match: Insurance Required: Additional Details: REVIEWED BY: If yes, amount: Doug Sposito Completed Rene Rogers Completed Budget and Finance Completed Maria Slavik Completed Kathy Peters Completed Board of County Commissioners Pending 10/03/2016 2:53 PM 10/04/2016 10:26 AM 10/04/2016 10:32 AM 10/04/2016 10:32 AM 10/04/2016 10:58 AM 10/19/2016 9:00 AM Packet Pg. 2175 Outline of Forthcoming Proposal From: Habitat for Humanity of the Lower Keys To: Monroe County BOCC Re: 30320 Overseas Highway, Big Pine Key September 29, 2016 Habitat proposes that the Premises be conveyed to Habitat in exchange for a nominal amount The conveyance would include the following points: • All risk and liability for the building's condition and any life safety issues transfers to Habitat. • The use of the premises will conform to development regulations and any non- conforming use under the LDR will continue. • The County retains the use of the property as a post storm staging area in perpetuity • If the property ceases to be used by Habitat in support of its mission of providing affordable housing it will revert to the County. (Another approach is for the County to retain the right of first refusal to purchase the property). • The conveyance grants Habitat the right to use its ownership (or leasehold rights) as collateral for financing the needed repair work. • If Habitat determines that the building is unrepairable it may exercise an option to convey the property to the County. • A straight line depreciation schedule for the repayment of the repair and renovation (over a 30 year period) by the County to Habitat if the conveyance is terminated. • Habitat will pay for and install the foundation shoring before the January 19, 2017 date. If this is not done, Habitat agrees it will cease all operational use of the building and the public will have no use or access of the premises by that date. • Habitat will actively engage in its own engineering evaluation of the feasibility of repairing the building. Habitat will design a repair program and timeline to achieve the recommendations of the Reynolds Engineering report or (a second engineer opinion) so that the building is safe for public use. • Habitat is responsible for keeping the building safe for public use at all times and for repairing the building by January 31, 2018 date or the date established by its own engineering opinion. • The need for all due speed in the application for, review of and approval of building permits for the structural repairs and renovation is recognized as a shared responsibility of Habitat and the County. Packet Pg. 2176 Termination Notice County of Monroe The Florida Keys Office of the County Administrator 1100 Simonton Street Key West, FL 33040 BOARD OF COUNTY COMMISSIONERS Mayor Heather Carruthers, District 3 Mayor Pro Tern George Neugent, District 2 Danny L. Kolhage, District I David Rice, District 4 Sylvia J. Murphy, District 5 Via electronic moil and Certified Mail Nwnbers 70081140000144549,185 & 70081140000144549392 Habitat for Humanity Habitat for Humanity Executive Director 30320 Overseas Highway Big Pine Key, 33043 Executive Director PO Box 5873 Key West, FL 33045 September 21, 2016 RE: Notice of Termination of Lease Agreement dated August 18, 2004 ("Lease") between Monroe County and Habitat for Humanity of Key West and Lower Florida Keys, Inc. ("Habitat for Humanity"), for real property located at 30320 Overseas Highway, Big Pine Key, Florida ("Premises"). Pursuant to section 14 of the above referenced Lease, this letter serves as Monroe County's notice of termination to Habitat of Humanity under the terms of the Lease; such termination is effective as of January 19, 2017 ("Termination Date"). Should Lessee be interested in proposing a revised and extended agreement which includes the Lessee performing shoring and repairs recommended by the Reynolds Engineering Services, Inc. & Hungate Engineering, P.C. report dated July 2016 ("Report"), Lessor will consider such a proposal provided it includes complying with all recommendations in the Report including, but not limited to: 1. Engineered shoring installation by January 31, 2017; and 2. A commitment to complete the structural repairs and renovations identified and required in the Report, and any structural repairs or renovations discovered during the work process, to be completed by January 31, 2018; and 3. A plan for life safety regulations implementation and compliance, to be completed by January 31, 2017; and 4. Written funding commitments for the costs of the required installations, repairs, renovations and safety requirements. Please provide by certified mail a written response to the Monroe County Administrator no later than September 30, 2016 of your intention to either vacate the Premises by the Termination Date, vacate the Premises before the Termination Date, or extend the Lease and make all necessary repairs and renovations in a timely manner. Should you choose to extend the Lease please also provide a timeline for compliance and work completion dates. Please be aware of the time constr ' mposed on the County's acceptance of such a proposal by F.S. 255.065. Roman Gastesi County Administrator Habitat response to Termination Notice Board of Directors Debbie Batty, President David Kolhagen, Treasurer Warren Leamard, Secretary Donna Bosold Ron Hammer Rev. Terri Hill Tim Root Stan Rzad Gary Walwer Tevis Wernicoff Mark Moss, Executive Director Advisory Committee Betsy Dietz, Chair Bill Braden Michael Browning Billy Davis Patricia Eables Rich Fielder Fred & Sue Hildebrandt Laurie McChesney George Neugent Janice Nicowski Richard Puente Toni Smith Alan Teitelbaum Owen Trepanier Don Whitehead Donna Windle Liz Young Admin. Office 6631 Maloney Ave. Key West, FL 33040 Mailing Address P.O. Box 5873 Key West, FL 33045 Tel : 305-294-9006 Fax: 815-550-8863 ha bitatlowerkeys.org Shop Donate Volunteer {i Habitat for Humanity ReStore 30320 Overseas Hwy. Big Pine Key, FL 33043 Tel: 305-872-2883 Roman Gastesi County Administrator Office of the County Administrator 1100 Simonton Street Key West, FL 33040 Habitat for Humanity' of Key West and Lower Florida Keys September 29, 2016 Re: Written Response to Notice of Termination of Lease Agreement dated August 18, 2004 ("Lease") between Monroe County and Habitat for Humanity of Key West and Lower Florida Keys, Inc. ("Habitat for Humanity"), for real property located at 30320 Overseas Highway, Big Pine Key, Florida ("premises"). Dear Mr. Gastesi, In response to the Termination Notice dated September 21, 2016, Habitat is interested in proposing a revised and extended agreement beyond the Termination Date of January 19, 2017. Habitat will submit a proposal to the Board of County Commissioners for their October 191h meeting. This proposal will seek to keep the building safe for public use and occupancy by making the structural repairs and renovations required by the Report. Habitat will cease all operations in the building on the Premises by the Termination Date if the structural shoring of the foundation as recommended by the Report is not completed and in place before that date. Sincerely yours, D. Mark Moss Executive Director Habitat's vision is for a world where everyone has a decent place to live. Full Proposal by Habitat 4*mVd**S%b e Habitat for Humanity of Key West and Lower Florida Keys Unsolicited Proposal For 30320 Overseas Highway Big Pine Key '='".. c�"'Z„"5 "+„m•.....�',..s•w.sin:ti,... �X :. -:,s +�.,t,t. -FR Y� . ...��:;S. .SS t, i•'�1.:,. Executive Summary The recent engineering report prepared by Reynolds Engineering documents the poor condition of the County owned building at 30320 Overseas Highway on Big Pine Key. This property has been leased to Habitat for Humanity of the Lower Keys (Habitat) since 2004. The implications of this report have forced the Engineering Department to ask the BOCC to terminate the lease with Habitat with 120 days' notice, effective January, 2017. This means the loss of its Restore (thrift store). Since April, 2016, when this review of the building's condition began, Habitat has lost more than $30,000 in sales revenue from its ReStore operation. The financial implications for Habitat by losing this steady stream of income will greatly reduce its ability to focus on the mission of Habitat. This includes the building of 10 homes on Big Coppitt scheduled to start soon and the redevelopment of three units on Truman Avenue that Habitat has already committed capital dollars to. The crisis for the County's Engineering Department is the report's conclusions for immediate work to stabilize the foundation within 4 months, by January, 2017 and then the daunting expenditure of $500,000 or more to make the needed structural repairs to the concrete spalling by January, 2018. The County's capital expenditure budgets for the next two fiscal years do not anticipate this building's needs. County staff does not feel the repair of the building is feasible. Monroe County staff has proposed that Habitat submit an unsolicited proposal. The proposal must address the repairs, the time frame and prove the financial means to do SO. Habitat strongly desires a solution that repairs the building. However, we are aware that a repair approach may not be feasible if certain factors are present. What we need is the time to make this evaluation on our own while keeping the public safe. Prior to this crisis, we planned to renovate portions of the building after asking the BOCC for a renewed lease term. The building has great value to the Big Pine and Lower Keys community on several levels, including the purpose of serving as a post storm staging area which was the County's motive to acquire it. To date, the County has not addressed the implications to the Lower Keys if the building is to be demolished. Habitat is willing to prepare a proposal that will achieve a safe building in a timely manner that works financially for all parties involved. For any repair scenario to work there will need to be a willingness to partner between Habitat and the County. That partnership will require good faith on both sides. Our proposal to have the County convey the property arises from discussions with County staff to shift the liability and risk to Habitat and to provide Habitat with the longer term control of the premises while assuring the community of the post storm staging area it expects. This proposal provides the necessary time for Habitat to determine the cost of the needed repairs while evaluating its options to operate the ReStore. Organizational Background Habitat for Humanity of Key West and the Lower Florida Keys, Inc. (Habitat) has built 35 homes, manages 24 affordable rentals and has repaired more than 25 homes for senior home owners in its service area. It also hardened over 80 homes with storm shutters with a DCA grant. Its success as a "one stop shop" in providing affordable housing is due in large part to its partnership with Monroe County and the Land Authority. The homes and apartments that serve 79 families and are permanently affordable are situated on land acquired by the Land Authority at the direction of the Board of County Commissioners. The ReStore operation located in this building in Big Pine Key provides a third of Habitat's revenues. The donations to the ReStore from the Middle Keys Habitat for Humanity's service area create revenue that is shared with their affiliate. This ReStore helps support two habitat affiliates. Let's briefly review the Lower Keys Habitat's financial situation. We are in the midst of a 10 home project on Big Coppitt that is expected to be $2.4 million total. We are leveraging our mortgages and the Eisenhower Apartment property for lines of credit. We have $400,000 in a reserve account for project overruns. Our other capital account of $150,000 is dedicated to repurchasing our homes as required. We have another $153,000 in BP Oil awards that is reserved for repairs to the two apartment properties. Our balance sheet is a key to our ability to finance the 10 home construction project we are in the midst of building on Big Coppitt. Habitat does have $92,000 available immediately to leverage the ReStore renovations. 3 Lessee's Proposal The Lessee's (Habitat) proposal is to have this property conveyed to us with terms that protect its permitted uses consistent with its zoning, Habitat's affordable housing mission and its long term control by the County. Habitat has to evaluate the repair costs while gaining the needed time for a considered decision. This conveyance shifts the liability and any risk for the building's condition from Monroe County to Habitat for Humanity. Lessee is preparing to vacate the premises as of the Termination Date as a practical business matter. Our Restore business has been interrupted and revenues lost, extending back to April, 2016. Despite these disruptions, at the present moment it makes the most economic sense for Habitat that the ReStore operation remains in place through Easter, 2017; if not beyond. This shock to our business plan involves time and money. We continue to explore a variety of available options; leasing a new space, purchasing another location and temporary alternatives as any prudent business would. Our Board is operating under the assumption that the required repairs and renovations may be as much as $1.5 million. If Habitat is assured of its long term control of the property it is willing to make the necessary investment to provide a safe, modern and efficient building that serves the Lower Keys community and supports our mission of providing affordable housing. This potential cost may be feasible and a worthwhile risk once we have the necessary time and motive to evaluate the specifics of the concrete and reinforcing steel repairs cited in the engineering report. If the building turns out to unrepairable Habitat will approach the County to propose a mutually beneficial outcome. As we all appreciate, there has been very little time to prepare an in depth proposal with a pressing time line to put this matter before the County Commission after our lease was terminated at their September meeting. 4 Habitat proposes that the Premises be conveyed to Habitat in exchange for a nominal amount. The conveyance would include the following points: • All risk and liability for the building's condition and any life safety issues transfers to Habitat. • The use of the premises will conform to development regulations and any non- conforming use under the LDR will continue. • The County retains the use of the property as a post storm staging area in perpetuity. • If the property ceases to be used by Habitat in support of its mission of providing affordable housing it will revert to the County. (Another approach is for the County to retain the right of first refusal to purchase the property). • The conveyance grants Habitat the right to use its ownership (or leasehold rights) as collateral for financing the needed repair work. • If Habitat determines that the building is unrepairable it may exercise an option to convey the property to the County. • A straight line depreciation schedule for the repayment of the repair and renovation (over a 30 year period) by the County to Habitat if the conveyance is terminated. • Habitat will pay for and install the foundation shoring before the January 19, 2017 date. If this is not done, Habitat agrees it will cease all operational use of the building and the public will have no use or access of the premises by that date. • Habitat will actively engage in its own engineering evaluation of the feasibility of repairing the building. Habitat will design a repair program and timeline to achieve the recommendations of the Reynolds Engineering report or (a second engineer's opinion) so that the building is safe for public use. • Habitat is responsible for keeping the building safe for public use at all times and for repairing the building by January 31, 2018 date or the date established by its own engineering opinion. • The need for all due speed in the application for, review of and approval of building permits for the structural repairs and renovation is recognized as a shared responsibility of Habitat and the County. Resolved: County will instruct its Legal Staff to prepare the conveyance instrument that includes the above points. 5 Financial Plan Assumptions • The immediate shoring of the foundation and its engineered plans will be paid for by Habitat from its BP cash award of $72,000. • This expenditure is made in good faith in expectation of the conveyance of the property. • The County will convey the property as expeditiously as possible as time is of the essence to complete the repair work on a schedule that satisfies all safety concerns. • Habitat will explore funding options to pay for the immediate structural repairs while seeking an exploratory building permit for the repair of the priority D and C columns to determine the feasibility of the overall concrete repair approach. • Once the feasibility of the repairs can be evaluated, Habitat will pursue permanent financing, grants and a capital campaign to raise funds. 6 County Attorney Memo on Habitat Proposal Memorandum To: Mayor Carruthers & the Board of County Commissioners Thru: Bob Shillinger, County Attorney From: Ren6 Rogers, Assistant County Attorney RE: Item 11 - Habitat for Humanity of Key West and Lower Keys; Unsolicited Proposal for 30320 Overseas Highway, Big Pine Key Date: October 14, 2016 Background The County owns the building located at 30320 Overseas Highway, Big Pine Key, and leases that building to Habitat for Humanity of Key West and the Lower Keys. The County's Project Management Department became concerned over the condition of the building so it commissioned an engineering report. Reynolds Engineering, Inc. issued a report that noted the poor condition of the building and made several recommendations. At the September 21, 2016 BOCC meeting, the Commission authorized the Project Management Department to issue a notice of termination letter to Habitat, the tenant. In response to the termination letter, Habitat submitted an Unsolicited Proposal that is the subject of a discussion item on the October 19, 2016 BOCC agenda. This memo has been prepared to address questions about that proposal. Questions Presented 1. Is the unsolicited proposal legally sufficient in its current form? No, Habitat's proposal does not meet the statutory requirements for an Unsolicited Proposal and is insufficient in its current form.' As submitted, the proposal contemplates a transfer in of ownership of the property to Habitat. The Public Private Partnership statute specifically requires that the public entity retain ownership of the property and a reversionary interest in the construction or upgrade of the facility attached to the property. The statute does NOT contemplate the BOCC transferring title to the property to the private entity submitting the proposal." In addition, the proposal, as submitted, lacks certain details which the statute requires a "qualified proposal" to include. For example, Habitat's proposal lacks the following statutorily required information: Page 1 of 3 (a) A description of the qualifying project, including the conceptual design of the facilities or a conceptual plan for the provision of services, and a schedule for the initiation and completion of the qualifying project. (b) A description of Habitat's general plans for financing the project, including the sources of its funds and the identity of any dedicated revenue source or proposed debt or equity investment on behalf of Habitat. (c) The proposed user fees, lease payments, or other service payments over the term of a comprehensive agreement, and the methodology for and circumstances that would allow changes to the user fees, lease payments, and other service payments over time."' While the statute vests the Board has the discretion to waive these requirements, not such authorization has been made. Even if the Board were to waive these three deficiencies, the statute does not contemplate the Board divesting its ownership interest in the property as proposed. 2. May the BOCC simply donate the property to Habitat or convey it for a nominal fee as a means of transferring ownership of the property and liability for deficiencies in the structure. No. While the BOCC is expressly authorized to sell and convey any real property belonging to the county whenever the board determines that it is in the best interests of the county to do so, the statute requires that the BOCC publish its intent to sell the property in the newspaper and solicit bids from interested purchasers. The statute requires that the property be conveyed to the "highest and best bidder" for the highest and use as determined by the board.' 3. What options does the Board have with respect to the property? The Board has the following options: (a) Staving the course. Under the terms of the lease, the County may lawfully terminate the lease upon providing Habitat with four (4) months' notice of the intention to terminate. The Board initiated the termination process when it authorized staff to send the termination letter on September 21, 2016. Once the premises have been vacated, the building can be demolished if desired. (b) Sell the building. The Board may lawfully sell the building if it follows the statutory process for disposing of County property. That process includes public notice and solicitation of bids.v (c) RFP. The Board has the discretion to seek proposals for the building. A request for proposals might include parameters such as demolishing the building and reconstructing a new structure that would suit a proposed Page 2 of 3 tenant's needs with a lease of sufficient duration that the tenant could recoup its investment in the construction costs for the new building. (d) Land swap. Under Florida law, the County is authorized to exchange property, which the Board determines is not needed for county purposes, for other property that the Board determines will better serve a county purpose. The statute requires newspaper publication of the Board's intent to enter into such an exchange prior to adopting a resolution approving such a transaction.' ' F.S. 255.065 sets forth in detail the legal requirements that an unsolicited proposal must satisfy in order to be valid. '' Before approving a comprehensive agreement, the responsible public entity must determine that the proposed project: (2) Is for a facility that is owned by the responsible public entity or for a facility for which ownership will be conveyed to the responsible public entity. (5) Will be owned by the responsible public entity upon completion, expiration, or termination of the comprehensive agreement and upon payment of the amounts financed. F.S. 255.065(3)(d)2 & 5. '" F.S. 255.065(4)(a), (b), (c), & (e). 'V F.S. 125.35(1). F.S. 125.35(1). v' F.S. 125.37. Page 3 of 3 Addendum to Habitat Proposal following County Attorney Memo Wilson -Kevin From: Mark Moss <buildithfhkw@gmail.com> Sent: Saturday, October 15, 2016 5:48 PM To: Wilson -Kevin Cc: Sposito-Doug; Gastesi-Roman; Clark-Cammy; Peters- Katherine; Rogers -Rene; Hurley - Christine; Santamaria-Mayte; Shillinger-Bob; Ballard -Lindsey; Hancock -Pamela; Debbie Batty; David Kolhagen Subject: Re: Item I-1 Habitat Proposal Attachments: Addendum to Unsolicited Proposal.pdf Kevin, Thank you for the evening email. We appreciate the effort to communicate. have composed an addendum to our unsolicited proposal which is attached. There has not been time for the Habitat Board to review or comment on it, but time is of the essence for everyone concerned. First, some clerical clarification. Can you assure me that Rene Rogers was reviewing the proposal submitted last Tuesday and not the "place holder" bullet point proposal? You will see that the attached addendum attempts to responds to the legal insufficiencies Rene describes. The other major point revolves around the path of a long term lease. This was always the more straightforward approach in my humble opinion. Can the liability concerns be satisfied through this approach ? I appreciate your help and look forward to the next step. Mark Moss Executive Director Habitat for Humanity Key West & Lower FL Ke} s O: 305.294.9006 M: 305.407.4070 On Fri, Oct 14, 2016 at 7:09 PM, Wilson -Kevin <Wilson-Kevinnmonroecounty-fl.�> wrote: Commissioners et al.: I failed to ask Bob to include a copy of the more formal proposal submitted by Habitat earlier this week. It is attached as well as the County Attorney's review of it sent a short while ago. I apologize for the oversight. I have included Mr. Moss on this email since I promised to keep him apprised of the County Attorney's opinion when it was available. kevinw Addendum to Unsolicited Proposal October 15, 2016 (Response to Legal Opinion/Review) Unsolicited Proposal from Habitat for Humanity of Key West & Lower F1. Keys, Inc. For the County owned property at 30320 Overseas Highway, Big Pine Key Background Habitat for Humanity of Key West and the Lower Florida Keys, Inc. (Habitat) submitted an unsolicited proposal for consideration by the Board of County Commissioners in order to extend its occupancy and use of the premises after the County Engineering Department concluded that the necessary repairs to the building described in the Reynolds Engineering report were not feasible. The report itself does not conclude that. Unfortunately this conclusion by Monroe County staff was not communicated promptly to Habitat as the Lessee. Prior to being made aware of the Engineering Department's conclusion, Habitat had anticipated that it would pursue the necessary repairs if it were able to enter into a long term lease with the County. Lease and Liability In conversation with County staff, a primary concern was the liability created by a potentially unsafe building being open to the public in Habitat's use of the building as its thrift store (ReStore). The suggestion from staff was that a long term lease might not shield the County from this potential liability. Habitat therefore described in its proposal the "conveyance" of the property. Habitat understands this concern on the issue of liability and has promised that it will not occupy or operate in an unsafe structure. We carry substantial liability insurance as a matter of course. We have inquired of our agent and underwriter as to what other coverage might be necessary in this situation. We are ready to review any requirements that the County might feel necessary and appropriate. A long term lease that provides Habitat with the leasehold interest needed to use it as collateral for the financing (to make the repairs) while protecting the County from any liability concerns is win -win solution. This lease could build upon the terms of our prior lease. The County Attorney must opine upon this issue before the matter can proceed further. Answers to Memorandum's Points Our proposal tried to include the reversionary interest the statue prescribes by including a right of first refusal and acknowledging the County's long term control of the property and its reversion to the County if Habitat ceased to use it in support of its mission of providing affordable housing. Habitat's intent is not to retain ownership of the building. If we had a lease agreement and it were to be terminated, it would be expected that the repair costs for the building would be reimbursed, based on a 30 year straight line depreciation schedule, since Habitat's money had created the asset to the County's benefit. The qualifying project is most simply the use of the building as it has been used for 12 years by Habitat; a Restore thrift store operation whose revenue supports the affordable housing program in the Lower Keys, the use of the premises as a post storm staging area (as was done effectively post Hurricane Wilma), offices and other permitted uses under the SC zoning, storage of disaster mitigation supplies and community needs for meeting areas for the public's benefit. It is logical to anticipate that the substantial repair costs could be offset with possible subtenant uses or affordable housing units. Our use of the property would conform to all LDRs and other land use regulations. This building has significance for the Big Pine and Lower Keys community. Habitat is willing to enter into a process to reviewing its present and future use of the property, but the priority in front of us is the stabilization and repair of the structure. The critique in paragraph (b) asks for Habitat's general plans for financing the project. (It is unclear if County legal staff was reviewing our initial bullet point draft or the six page submittal made on Tuesday, October 11, 2016). The later .proposal outlines a Financial Plan. We are willing to expand and clarify it, but would ask for everyone's forbearance. This situation is a shock with very tight timelines. There has not been time to prepare a considered and in depth financing plan, but we are committed to shoring the building by January of 2017 in order to have the time to determine the feasibility of the repairs. The memorandum continues that the Board has the discretion, under the statute, to waive the requirements cited in sub paragraphs (a), (b) and (c), but that no such authorization has been made. We would amend our proposal to ask the Board of County Commissioners to not impose user fees or substantial lease payments over the life of a comprehensive agreement in consideration of the fact that Habitat is expending its own funds to repair a building that belongs to the County. In summary, Habitat does not seek to contravene the statute, nor are we asking the Board to do so. This memorandum concludes Habitat is asking the County to divest its ownership interest in the property. Our suggestion of a "conveyance" was only made when staff suggested their liability concerns meant the property must be owned by Habitat. The memorandum addresses the options the Board has in paragraph 3 (a), (b), (c) and (d). It does not address the option of a long term lease. None of the options laid out in the memorandum are satisfactory as they either result in the abandonment of the building in January of 2017 or involve a process (RFP, land swap or sale) that has a time line beyond those Habitat has agreed to meet to keep the building safe. Good Faith Needed We appreciate the cooperation and effort by all County staff in working through this difficult situation. It may be a practical matter that more time is needed to complete this process. However, Habitat must move quickly and decide to expend its funds for engineered plans, obtain building permits and install the shoring by January, 2017 to keep the building safe and open to the public. Is there a vehicle, or method for the County to indicate its willingness to enter into a long term (lease) agreement so that Habitat may proceed to expend its funds in a timely manner to put the temporary shoring of the building's foundation in place? Our deep concern and fear is that any delays will result in a fait accompli; the building will have to be abandoned as of the Termination date in January, 2017. We would ask for a good faith indication from the Board that the parties are allowed to proceed to negotiate the lease or other terms while Habitat expends its funds to preserve the repair option. We have tried to make our intent clear. It is unfortunate to be plunged into an in depth situation of making an unsolicited proposal in the space of less than 10 days and for your legal staff to be asked to review it less than a week before it might be presented to the BOCC. Email exchange of 18 OCT 2016 with Habitat Wilson -Kevin From: Wilson -Kevin Sent: Tuesday, October 18, 2016 11:00 AM To: 'Mark Moss'; Shillinger-Bob Cc: Sposito-Doug; Gastesi-Roman; Clark-Cammy; Peters -Katherine; Rogers -Rene; Hurley - Christine; Santamaria-Mayte; Ballard -Lindsey; Hancock -Pamela; Debbie Batty; David Kolhagen; <developmentdirector@habitatlowerkeys.org>; Shillinger-Bob; Rogers -Rene Subject: RE: Item I-1 Habitat Proposal Attachments: 2016-10-15 Habitat Proposal Addendum.pdf Mark„ See below (in red). I've added the County Attorney Kevin G. Wilson, P.E. Assistant County Administrator Monroe County, FL (Florida Keys) 102050 Overseas Highway Key Largo, FL 33037 Tel: 305-292-4529 Cell: 305-797-1547 From: buildithfhkw@gmail.com [mailto:buildithfhkw@gmail.com] On Behalf Of Mark Moss Sent: Tuesday, October 18, 2016 8:50 AM To: Shillinger-Bob Cc: Wilson -Kevin; Sposito-Doug; Gastesi-Roman; Clark-Cammy; Peters -Katherine; Rogers -Rene; Hurley -Christine; Santamaria-Mayte; Ballard -Lindsey; Hancock -Pamela; Debbie Batty; David Kolhagen; <developmentdirector@habitatlowerkeys.org> Subject: Re: Item I-1 Habitat Proposal Mr. Schillinger and Mr. Wilson, Habitat will work to perfect our unsolicited proposal. However, if we submit this amendment later today or early tomorrow, there will not be enough time for your review and comment. That is one issue arising from the tight timeline involved. We seek clarification on the potential liability concerns.ls the primary issue the "deficient structure"? If it is, we do not understand its role going forward. Habitat's proposal is to shore the structure and effect the repairs according to the specifications and timelines of the Reynolds Engineering report. That report does not conclude the building is irreparable. The working assumption is that if the repairs are made, the building is safe. Are we in agreement on this point? There are safety issues beyond the structural repairs. The "elevator", fire & life safety egress issues, ADA non-compliance, and possible other code issues which also must be inspected and addressed. County staff chose not to pursue further evaluation of these because, on our experience/judgment, bringing the building into compliance was uneconomical and would likely involve bringing everything up to current codes. That said, your request is to let Habitat try. Staff hasn't seen anything that changes our opinion so, our recommendation hasn't changed. The question remains, "Is there a way that the County can allow Habitat to assume all of the risk without jeopardy to the County? Or, how much risk is the County prepared to accept on Habitat's behalf?" That's a policy question we'll address Wednesday. Monroe County staff has concluded that the repairs are not financially feasible. Habitat is asking for the opportunity to spend its own funds to determine if the repairs can be made. We are not proposing to occupy or utilize a"deficient structure". The clarification and discussion of the liability concerns are important to finding a solution to the situation. We have stipulated that the building will not be open to the public or used by employees if it is deficient. Again, Habitat needs to emphasize the point that we are asking the County for the long term control of the property, even if the present building cannot be repaired. If the repairs are not feasible (and we have a long term agreement), Habitat would pursue a new structure that provides for its and the community's needs. We would ask Monroe County staff to help us in suggesting an approach for the Board's decision tomorrow. An approach that says the Board's intent is for Habitat to continue to use the property to support its mission. The form of that agreement may remain to be finalized, but Habitat can proceed to arrange for the foundation shoring with the confidence of the Board's support. This decison, or statement of intent by the Board, allows staff and Habitat the time to work through the particulars without jeopardizing the use of the building beyond January 2017. The tight timelines involved in this case are difficult for Habitat and County staff. We are looking for a gesture of goodwill and cooperation that allows the Board to support Habitat in this case (if that is their decison) while allowing the parties to work out the terms and conditions. Sincerely yours, Mark Mark Moss Executive Director Habitat for Humanity of Key West & the Lower Florida Keys, Inc buildit c ;habitatlowerkeys.org 305 407 4070 305 294-9006. On Mon, Oct 17, 2016 at 5:30 PM, Shillinger-Bob <Shillinger-Bob(?-fl. og_v> wrote: Mr. Moss: I am not convinced that a long-term lease of the subject property would successfully shield the county from potential liability arising from the deficiencies of that structure. In the event a claim is asserted, the County would at the very least need to incur the costs of defending itself. � Rid�� x A 0 CIT& STY GOVERNMENT LAW (305)292-3470 (305) 292-3516 (fax) Bob Shillinger County Attorney Monroe County Attorney's Office 1111 12th Street, Suite 408 Key West, FL 33040 No trees were harmed in the sending of this E-mail, however, a great number of electrons were terribly inconvenienced. Please note that Florida has a broad public records law and that any communication with the County could be considered a public record. If you do not wish for your email address to become a public record, use the telephone or some other method of conveying your message. From: Mark Moss[mailto:buildithfhkw(a)gmail.com] Sent: Saturday, October 15, 2016 5:48 PM To: Wilson -Kevin Cc: Sposito-Doug; Gastesi-Roman; Clark-Cammy; Peters -Katherine; Rogers -Rene; Hurley -Christine; Santamaria-Mayte; Shillinger-Bob; Ballard -Lindsey; Hancock -Pamela; Debbie Batty; David Kolhagen Subject: Re: Item I-1 Habitat Proposal Kevin, Thank you for the evening email. We appreciate the effort to communicate. I have composed an addendum to our unsolicited proposal which is attached. There has not been time for the Habitat Board to review or comment on it, but time is of the essence for everyone concerned. First, some clerical clarification. Can you assure me that Rene Rogers was reviewing the proposal submitted last Tuesday and not the "place holder" bullet point proposal? I ■ You will see that the attached addendum attempts to responds to the legal insufficiencies Rene describes. The other major point revolves around the path of a long term lease. This was always the more straightforward approach in my humble opinion. Can the liability concerns be satisfied through this approach ? I appreciate your help and look forward to the next step. Mark Moss Executive Director Habitat for Humanity Key West & Lower FL Keys O: 305.294.9006 M: 305.407.4070 On Fri, Oct 14, 2016 at 7:09 PM, Wilson -Kevin <Wilson-Kevin(a,monroecounty--fl.gov> wrote: Commissioners et al.: I failed to ask Bob to include a copy of the more formal proposal submitted by Habitat earlier this week. It is attached as well as the County Attorney's review of it sent a short while ago. I apologize for the oversight. I have included Mr. Moss on this email since I promised to keep him apprised of the County Attorney's opinion when it was available. kevinw Kevin G. Wilson, P.E. Assistant County Administrator Monroe County, FL (Florida Keys) 102050 Overseas Highway Key Largo, FL 33037 Tel: 305-292-4529 Cell: 305-797-1547 From: Shillinger-Bob Sent: Friday, October 14, 2016 6:10 PM To: Shillinger-Bob Cc: Wilson -Kevin; Sposito-Doug; Gastesi-Roman; Clark-Cammy; Peters -Katherine; Rogers -Rene; Hurley -Christine; Santamaria-Mayte Subject: Item I-1 Habitat Proposal Mayor & Commissioners (via bcc): Attached please find a memo Assistant County Attorney Rene Rogers prepared regarding the unsolicited proposal from Habitat for Humanity regarding the County's building on Big Pine Key. In short, the memo outlines legal deficiencies in Habitat's proposal and sets forth some options for the Board to consider. Please contact Rene or me should you have any questions. � RIp�� H. CEti'[���;v CIi Y, COUNTY & LOCAL 00VERNMENT LAW (305)292-3470 (305) 292-3516 (fax) Bob Shillinger County Attorney Monroe County Attorney's Office 1111 12th Street, Suite 408 Key West, FL 33040 No trees were harmed in the sending of this E-mail, however, a great number of electrons were terribly inconvenienced. Please note that Florida has a broad public records law and that any communication with the County could be considered a public record. If you do not wish for your email address to become a public record, use the telephone or some other method of conveying your message. BOARD OF COUNTY COMMISSIONERS County of Monroe A Mayor Heather Carruthers, District 3 ( T$ne Florida Keys (, Mayor Pro Tem George Neugent, District 2 t� ) ��` �� �' Danny L. Kolhage, District 1 David Rice, District 4 Sylvia J. Murphy, District 5 County Commission Meeting October 19, 2016 Agenda Item Number: I.1 Agenda Item Summary #2190 BULK ITEM: No DEPARTMENT: Project Management / Facilities TIME APPROXIMATE: STAFF CONTACT: Doug Sposito (305) 292-4416 TBD AGENDA ITEM WORDING: Discussion and direction on Habitat for Humanity's proposal that the premises located at 30320 Overseas Highway in Big Pine Key, be conveyed to Habitat in exchange for a nominal amount. ITEM BACKGROUND: The Habitat for Humanity proposes that the premises be conveyed to Habitat for a nominal amount, as a response to the letter of termination issued by the County dated September 21, 2016. PREVIOUS RELEVANT BOCC ACTION: Item C-32 at the September 21, 2016 BOCC meeting. Approval to send notice of lease termination letter to Habitat for Humanity for the property located at 30320 Overseas Highway; Big Pine Key, FL. CONTRACT/AGREEMENT CHANGES: N/A STAFF RECOMMENDATION: N/A DOCUMENTATION: Habitat for Humanity Proposal Proposal HFH BPK FINANCIAL IMPACT: Effective Date: Expiration Date: Total Dollar Value of Contract: Total Cost to County: Current Year Portion: Budgeted: Source of Funds: CPI: Indirect Costs: Estimated Ongoing Costs Not Included in above dollar amounts: Revenue Producing: Grant: County Match: Insurance Required: Additional Details: If yes, amount: REVIEWED BY: Doug Sposito Completed 10/03/2016 2:53 PM Rene Rogers Completed 10/04/2016 10:26 AM Budget and Finance Completed 10/04/2016 10:32 AM Maria Slavik Completed 10/04/2016 10:32 AM Kathy Peters Completed 10/04/2016 10:58 AM Board of County Commissioners Pending 10/19/2016 9:00 AM 40-ft �w Habitat for Humanity of Key West and Lower Florida Keys Unsolicited Proposal For 30320 Overseas Highway Big Pine Key Executive Summary The recent engineering report prepared by Reynolds Engineering documents the poor condition of the County owned building at 30320 Overseas Highway on Big Pine Key. This property has been leased to Habitat for Humanity of the Lower Keys (Habitat) since 2004. The implications of this report have forced the Engineering Department to ask the BOCC to terminate the lease with Habitat with 120 days' notice, effective January, 2017. This means the loss of its ReStore (thrift store). Since April, 2016, when this review of the building's condition began, Habitat has lost more than $30,000 in sales revenue from its ReStore operation. The financial implications for Habitat by losing this steady stream of income will greatly reduce its ability to focus on the mission of Habitat. This includes the building of 10 homes on Big Coppitt scheduled to start soon and the redevelopment of three units on Truman Avenue that Habitat has already committed capital dollars to. The crisis for the County's Engineering Department is the report's conclusions for immediate work to stabilize the foundation within 4 months, by January, 2017 and then the daunting expenditure of $500,000 or more to make the needed structural repairs to the concrete spalling by January, 2018. The County's capital expenditure budgets for the next two fiscal years do not anticipate this building's needs. County staff does not feel the repair of the building is feasible. Monroe County staff has proposed that Habitat submit an unsolicited proposal. The proposal must address the repairs, the time frame and prove the financial means to do SO. Habitat strongly desires a solution that repairs the building. However, we are aware that a repair approach may not be feasible if certain factors are present. What we need is the time to make this evaluation on our own while keeping the public safe. Prior to this crisis, we planned to renovate portions of the building after asking the BOCC for a renewed lease term. The building has great value to the Big Pine and Lower Keys community on several levels, including the purpose of serving as a post storm staging area which was the County's motive to acquire it. To date, the County has not addressed the implications to the Lower Keys if the building is to be demolished. Habitat is willing to prepare a proposal that will achieve a safe building in a timely manner that works financially for all parties involved. For any repair scenario to work there will need to be a willingness to partner between Habitat and the County. That partnership will require good faith on both sides. Our proposal to have the County convey the property arises from discussions with County staff to shift the liability and risk to Habitat and to provide Habitat with the longer term control of the premises while assuring the community of the post storm staging area it expects. This proposal provides the necessary time for Habitat to determine the cost of the needed repairs while evaluating its options to operate the ReStore. Organizational Background Habitat for Humanity of Key West and the Lower Florida Keys, Inc. (Habitat) has built 35 homes, manages 24 affordable rentals and has repaired more than 25 homes for senior home owners in its service area. It also hardened over 80 homes with storm shutters with a DCA grant. Its success as a "one stop shop" in providing affordable housing is due in large part to its partnership with Monroe County and the Land Authority. The homes and apartments that serve 79 families and are permanently affordable are situated on land acquired by the Land Authority at the direction of the Board of County Commissioners. The ReStore operation located in this building in Big Pine Key provides a third of Habitat's revenues. The donations to the ReStore from the Middle Keys Habitat for Humanity's service area create revenue that is shared with their affiliate. This ReStore helps support two habitat affiliates. Let's briefly review the Lower Keys Habitat's financial situation. We are in the midst of a 10 home project on Big Coppitt that is expected to be $2.4 million total. We are leveraging our mortgages and the Eisenhower Apartment property for lines of credit. We have $400,000 in a reserve account for project overruns. Our other capital account of $150,000 is dedicated to repurchasing our homes as required. We have another $153,000 in BP Oil awards that is reserved for repairs to the two apartment properties. Our balance sheet is a key to our ability to finance the 10 home construction project we are in the midst of building on Big Coppitt. Habitat does have $92,000 available immediately to leverage the ReStore renovations. Lessee's Proposal The Lessee's (Habitat) proposal is to have this property conveyed to us with terms that protect its permitted uses consistent with its zoning, Habitat's affordable housing mission and its long term control by the County. Habitat has to evaluate the repair costs while gaining the needed time for a considered decision. This conveyance shifts the liability and any risk for the building's condition from Monroe County to Habitat for Humanity. Lessee is preparing to vacate the premises as of the Termination Date as a practical business matter. Our ReStore business has been interrupted and revenues lost, extending back to April, 2016. Despite these disruptions, at the present moment it makes the most economic sense for Habitat that the ReStore operation remains in place through Easter, 2017; if not beyond. This shock to our business plan involves time and money. We continue to explore a variety of available options; leasing a new space, purchasing another location and temporary alternatives as any prudent business would. Our Board is operating under the assumption that the required repairs and renovations may be as much as $1.5 million. If Habitat is assured of its long term control of the property it is willing to make the necessary investment to provide a safe, modern and efficient building that serves the Lower Keys community and supports our mission of providing affordable housing. This potential cost may be feasible and a worthwhile risk once we have the necessary time and motive to evaluate the specifics of the concrete and reinforcing steel repairs cited in the engineering report. If the building turns out to unrepairable Habitat will approach the County to propose a mutually beneficial outcome. As we all appreciate, there has been very little time to prepare an in depth proposal with a pressing time line to put this matter before the County Commission after our lease was terminated at their September meeting. :l Habitat proposes that the Premises be conveyed to Habitat in exchange for a nominal amount. The conveyance would include the following points: • All risk and liability for the building's condition and any life safety issues transfers to Habitat. • The use of the premises will conform to development regulations and any non- conforming use under the LDR will continue. • The County retains the use of the property as a post storm staging area in perpetuity. • If the property ceases to be used by Habitat in support of its mission of providing affordable housing it will revert to the County. (Another approach is for the County to retain the right of first refusal to purchase the property). • The conveyance grants Habitat the right to use its ownership (or leasehold rights) as collateral for financing the needed repair work. • If Habitat determines that the building is unrepairable it may exercise an option to convey the property to the County. • A straight line depreciation schedule for the repayment of the repair and renovation (over a 30 year period) by the County to Habitat if the conveyance is terminated. • Habitat will pay for and install the foundation shoring before the January 19, 2017 date. If this is not done, Habitat agrees it will cease all operational use of the building and the public will have no use or access of the premises by that date. • Habitat will actively engage in its own engineering evaluation of the feasibility of repairing the building. Habitat will design a repair program and timeline to achieve the recommendations of the Reynolds Engineering report or (a second engineer's opinion) so that the building is safe for public use. • Habitat is responsible for keeping the building safe for public use at all times and for repairing the building by January 31, 2018 date or the date established by its own engineering opinion. • The need for all due speed in the application for, review of and approval of building permits for the structural repairs and renovation is recognized as a shared responsibility of Habitat and the County. Resolved: County will instruct its Legal Staff to prepare the conveyance instrument that includes the above points. Financial Plan Assumptions • The immediate shoring of the foundation and its engineered plans will be paid for by Habitat from its BP cash award of $72,000. • This expenditure is made in good faith in expectation of the conveyance of the property. • The County will convey the property as expeditiously as possible as time is of the essence to complete the repair work on a schedule that satisfies all safety concerns. • Habitat will explore funding options to pay for the immediate structural repairs while seeking an exploratory building permit for the repair of the priority D and C columns to determine the feasibility of the overall concrete repair approach. • Once the feasibility of the repairs can be evaluated, Habitat will pursue permanent financing, grants and a capital campaign to raise funds. 11 Outline of Forthcoming Proposal From: Habitat for Humanity of the Lower Keys To: Monroe County BOCC Re: 30320 Overseas Highway, Big Pine Key September 29, 2016 Habitat proposes that the Premises be conveyed to Habitat in exchange for a nominal amount. The conveyance would include the following points: • All risk and liability for the building's condition and any life safety issues transfers to Habitat. • The use of the premises will conform to development regulations and any non- conforming use under the LDR will continue. • The County retains the use of the property as a post storm staging area in perpetuity • If the property ceases to be used by Habitat in support of its mission of providing affordable housing it will revert to the County. (Another approach is for the County to retain the right of first refusal to purchase the property). • The conveyance grants Habitat the right to use its ownership (or leasehold rights) as collateral for financing the needed repair work. • If Habitat determines that the building is unrepairable it may exercise an option to convey the property to the County. • A straight line depreciation schedule for the repayment of the repair and renovation (over a 30 year period) by the County to Habitat if the conveyance is terminated. • Habitat will pay for and install the foundation shoring before the January 19, 2017 date. If this is not done, Habitat agrees it will cease all operational use of the building and the public will have no use or access of the premises by that date. • Habitat will actively engage in its own engineering evaluation of the feasibility of repairing the building. Habitat will design a repair program and timeline to achieve the recommendations of the Reynolds Engineering report or (a second engineer opinion) so that the building is safe for public use. • Habitat is responsible for keeping the building safe for public use at all times and for repairing the building by January 31, 2018 date or the date established by its own engineering opinion. • The need for all due speed in the application for, review of and approval of building permits for the structural repairs and renovation is recognized as a shared responsibility of Habitat and the County. 510 GREENE STREET 1st FLOOR • KEY WEST, FL 33040. 305.294.2587 • FAX 305.294.7806 • WWW.KEYWESTCHAMBER.ORG October 14, 2016 Mayor Heather Carruthers Monroe County Board of County Commissioners S00 Whitehead Street, Suite 102 Key West, FL 33040 Dear Mayor Carruthers, Representing the members of the Key West Chamber of Commerce, we are concerned about the situation with the Habitat for Humanity Restore in Big Pine Key. Habitat for Humanity is one of our community members that plays an essential role in our county by providing affordable housing solutions to our residents suffering with affordable housing. Our chamber supports Habitat for Humanity and the part the Restore plays in its operation. We understand that there are safety and liability issues that have forced the termination of the county's lease with Habitat for Humanity but we encourage you to investigate other options so that Habitat for Humanity may remain a viable part of the community. Many people depend on Habitat for Humanity Restore for jobs, volunteering and to purchase gently used items. The community would be at a loss should it close its doors. The members of the Key West Chamber of Commerce support Habitat for Humanity and are hoping that the county can work with Habitat thus that the Restore can continue to operate in Big Pine Key. We understand that Habitat for Humanity is planning to put forward feasible alternatives that would be acceptable to both parties. If the current location is not a possibility, we sincerely hope that the county can assist them in trying to find a new location. Sincerely, Kim Works President Cc: Commissioner Danny Kolhage Commissioner Sylvia Murphy Commissioner George Neugent Commissioner David Rice County Administrator Roman Gastesi Clerk of the Court Amy Heavlin Directors of the Board !)�b Curlee (f5/ /0/l9/a-olu eXh,bjr Board of County Commission October 19th 2016 Agenda Item 1-1 Mayor and Commissioners, I am Deb Curlee Vice President of Last Stand and today I am speaking on behalf of Last Stand. Last stand supports all efforts to allow Habitat for Humanity to continue to search for solutions to the current safety and construction issues of their building on Big Plne. The building serves as an important revenue stream for the organization as well as a great benefit to the community as a hurricane staging area and the resale of used furniture, clothing, and building materials. Last Stand hopes that with a cooperative, collaborative effort, solutions will be found to enable Habitat for Humanity to remain in the building and continue the ongoing benefit to our community. Deb Curlee Vice President Last Stand