Item I3
LAND AUTHORITY GOVERNING BOARD
AGENDA ITEM SUMMARY
Meeting Date: February 18, 2004
Bulk Item: Yes No X
Department: Land Authority
Agenda Item Wording: Approval of a resolution authorizing the subordination of the Land Authority's
mortgage loan for the Meridian West affordable housing development.
Item Background: The Land Authority holds a $1.5 million fifty-year, zero-interest mortgage on the
property currently being developed as Meridian West Apartments, a 102-unit affordable housing
development for persons having low or very low incomes. The Florida Housing Finance Corporation
recently approved issuing the second of two $1 million SAIL loans to the development, provided the
Land Authority agrees to subordinate its mortgage to the SAIL loan. The developer requests that the
Land Authority subordinate its mortgage to an additional $1,821,000 of debt during the construction
phase and $670,000 during the permanent phase. The proposed resolution would authorize the
requested subordination.
Advisory Committee Action: On January 29, 2004 the Advisory Committee voted 3/0 to approve the
proposed resolution.
Previous Governing Board Action: On 3/20/02 the Board approved providing a $1.5 M mortgage. On
6/19/02 the Board approved donating 25 transferable RaGa exemptions (TREs) and 6 nutrient credits
to the development. On 6/18/03 the Board authorized closing the Land Authority's loan prior to the
initial FHFC SAIL loan closing. On 9/17/03 the Board authorized modifying requirements for the
disbursement of the Land Authority loan proceeds, approving a revised financing schedule, and
approving use of a placeholder mortgage.
Contract/Agreement Changes: Subordinate to additional debt of up to $1,821,000.
Staff Recommendation: Approval
Total Cost: $ N/A
Budgeted: Yes_ No
Cost to Land Authority: $ N/A
Source of Funds:
Approved By: Attorney ~
Executive Director Approval:
County Land Steward
~.~~
Documentation: Included: X
To Follow:
Not Required:
Disposition:
Agenda Item LA #3
~
RECEIVEDjl~N 0 5 2004
II
o CORPORATE OFFICE
2950 S.W. 27TII AVENUE, SlIrn; 200
MIAHI, FL 33133
PHONE 305.476.8118
FAX 305.476-1557
FAX 305-476.5240 CPM
THE CARLISLE GROUP
CARLISLE PROPERTY MANAGEMENT, INC.
CARLISLE DEVELOPMENT GROUP. LLC
CARLISLE CONSTRUCTION, LLC
n TALLA.HASSEE OFFICE
2964 WELUNGTON CIRCLE. Surn; 1
TALLAIJASSEE, FL 32309
PIlON!; (850) 222-9022
F.\x (850) 222.9110
Mark Rosch
Executive Director
Monroe County Land Authority
1200 Truman Avenue
Key West, Florida 33040
Re: Meridian West
Dear Mark,
As we have recently discussed, there have been some new and positive
developments for Meridian West.
I am sure you will remember that our original projections of financing sources
included a SAIL loan from the Florida Housing Finance Corporation in the amount of
$2,000,000. Somehow, the promised rule change that would allow this for Florida Keys
applications did not make it into the 2002 Rule. Therefore, we received only $1,000,000.
That left a significant financing gap, especially since the costs for the poured in
place concrete design we selected were so much higher than projected. However, the
FHFC modified their SAIL rules for 2003, and we were finally able to obtain a much-
needed increase in our SAIL from $1,000,000 to $2,000,000.
While that is absolutely essential for Meridian West, it does require a further
subordination from the Land Authority. We intend to reduce the Conventional First
Mortgage by $330,000, and use $670,000 to meet development costs.
As the attached sources and uses projection details, there are to be three loans
which are senior to the Land Authority's debt during construction. They are:
1.) The Construction Loan
2.) The 1 sf SAIL Loan
3.) The 2nd SAIL Loan
Total
: $4,271,000
: $1,000,000
: $1.000.000
: $6,271,000
Therefore, the total amount of debt which will be senior to the Land Authority
during construction is $6,271,000. However, the Construction Loan is limited by
covenant to a maximum of $3,450,000. Therefore, the total real senior debt outstanding
during construction will not exceed $5,450,000. leaving a shortfall of$821.000.
Once construction is completed the construction loan will convert to a permanent
1 sl Mortgage of $3,450,000. Furthermore, $330,000 of the 2nd SAIL loan will be used to
reduce this permanent 1st Mortgage to $3,120,000. Therefore, the debt senior to the Land
Authority after stabilization will be:
1.) Permanent 1st Mortgage : $3,120,000
2.) The 1st SAIL Loan : $1,000,000
3.) The 2nd SAIL Loan : $1.000.000
Total : $5,120,000
We need an additional Resolution from the Land Authority to approve subordination
to construction financing of $6,271,000, to be reduced to $5.120.000 once
construction is completed.
I would like to appear before the Land authority at the next meeting to request this
change. As you see. the ultimate amount to be subordinated to will be reduced. so I
believe this is a positive.
However, time is of the essence, as the State is moving forward with its
underwriting of the new SAIL.
Please call me to discuss
P.S.
cc: Edwin O. Swift
Mark Kaplan
Dixie Spehar
4) Sources & Uses - Meridian West - Key West, FI Dec 5, 2003 . 15:22
Construction Phase
Sources If!t.. ~ ~ Per Unit
Tax.Exempt Bonds 0.00% 0.00% 0
Permanent 1 st Mortgage 9.95% 0.00% 0
FHFC SAil 12. 13.78% 19,608
CDFf 2.11% 2.27% 3,235
Construction Loan 0.00% 0 21.50% 30.588
Bridge Loan 0.00% 0 0.00% 0
Interest Income 0.00% 0 0.00% 0
GP Equity 0.00% 0 0.00% 0
NLP/CDFI Balloons In 50 0.64% 980 0.69% 980
KW Land Authorily -- 1,500,000 9.59% 14.706 10.33% 14,706
Limited Partner Equity l!Ii'Bal~ 52.50% 80,490 50.91% 72,441
SHIP (no debt pmls on loan) 75.000 0.48% 735 0.52% 735
Deferred Dev Fee 303,678 1.94% 2977 0.00% 0
Total Sources 15,638,678 100.00% 153 320 100.00% 142 294
Permanent Phase
Uses " Per Unit " Per Unit
Hard Construction Costs 52.17% 79.990 56.21% 79,990
GC Profit 3.13% 4,794 3.37% 4,794
GC General Requirements 3.13% 4,794 3.37% 4.794
GC Overhead 1.04% 1,598 1.12% 1.598
Accessory Buildings 0.00% 0 0.00% 0
Recreational I Owner Items 0.74% 1,127 0.79% 1,127
Off-Site Improvements 0.00% 0 0.00% 0
Hard Cost Contingency @: 4.2% 2.50% 3,839 2.70% 3,839
Other 0.00% 0 0.00% 0
Construction Interest Expense 0.48% 744 0.52% 744
Brid e Loan Interest E nsa 0.00% 0 0.00% 0
Permanent Loan Origination Fee 0.35% 544 0.38% 544
Permanent Loan Closing Costs 0.08% 117 0.08% 117
Construction Loan Origination Fee 0.30% 461 0.32% 461
Construction Loan Closing Costs 0.00% 0 0.00% 0
Bridge Loan Origination Fee 0.00% 0 0.00% 0
Cost of Issuance Fees 0.00% 0 0.00% 0
Other Loan Closing Costs 0.19% 297 0.21% 297
Rate Lock 0.44% 676 0.48% 676
Accounting Fees 0.160/. 245 0.170/. 245
Application Fees 0.000/. 0 0.000/. 0
Appraisal 0.090/. 132 0.09% 132
Architect Fee-Design 1.08% 1.657 1.16% 1,657
Arch Itect Fee-Supervision 0.06% 98 0.07% 98
Builder's Risk Insurance 0.000/. 0 0.00% 0
Building Permit 0.02% 25 0.02% 25
Brokerage Fee 0.000/. 0 0.00% 0
Credit Underwriting Fee 0.15% 227 0.16% 227
Engineering Fee 0.35% 539 0.38% 539
Environmental Report 0.13% 196 0.14% 196
FHFC Administrative Fees 0.52% 800 0.56% 800
FHFC Application Fees 0.03% 39 0.03% 39
FHFC Compliance Mon. Fee 0.43% 660 0.46% 660
JmpactFees(Deta~ 0.00% 0 0.00% 0
Inspection Fees 50,000 0.32% 490 0.34% 490
Insurance- PropertylLiability 15,000 0.10% 147 0.100/. 147
Legal Fees. Partnership 72,000 0.46% 706 0.50% 706
Legal Fees- Other 28,007 0.18% 275 0.19% 275
Market Study 8,000 0.05% 78 0.06% 78
Marketing & Advertising 140,000 0.90% 1.373 0.96% 1,373
Operating Deftcil Reserve 0.00% 0 0.00% 0
Property Taxes 20.000 0.13% 196 0.14% 196
Soil Test Report 8,000 0.05% 78 0.06% 78
Survey(including as-built) 15,000 0.10% 147 0.10% 147
Title Insurance & Recording 0.71% 1,090 0.77% 1,090
Utility Connection Fee 3.69% 5.660 3.98% 5.660
Other 0.00% 0 0.00% 0
Conlin enc Soft Cost 0.51% 776 0.55% 776
Sub-Total
Exisling Buildings, Owned 0.00% 0 0.00% 0
Existing Buildings. To be Acquired 0.00% 0 0.00% 0
Other Ac uisition Costs 0.00% 0 0.00% 0
Land, owned 0.00% 0 0.00% 0
Land, To be Acquired 14.20% 21,765 15.30% 21,765
Other Land Costs 1.55% 2,382 1.67% 2,382
Developer's Admin. & Overhead 4.0% 2.99% 4,585 2.48% 3,530
Developer's Profrt Acquisition 5.0% 0.00% 0 000% 0
Develo er's Profit 8.7% 6.50% 9,971 0.00% 0
Total Pr~t Cost 100.00% 153,320 100.00% 142,294
~nclng'G.iP'~(IlJ6itt~~.~iJ,.!t\';;r...:(OI~~'i!!'~\iJ,;~,<~~ 0 ';:t;~~ffiS{~1'A~llil
RESOLUTION NO.
A RESOLUTION OF THE MONROE COUNTY
COMPREHENSIVE PLAN LAND AUTHORITY AUTHORIZING
SUBORDINATION OF THE LAND AUTHORITY'S MORTGAGE
LOAN FOR THE MERIDIAN WEST AFFORDABLE HOUSING
DEVELOPMENT.
WHEREAS, section 380.0666(3), Florida Statutes (FS) and section 9.3-2, Monroe County Code,
empower the Monroe County Comprehensive Plan Land Authority (hereinafter "Land Authority")
to acquire an interest in real property for the purpose of providing affordable housing to very low,
low, or moderate income persons as defined in section 420.0004, FS, where said acquisitions
are consistent with a comprehensive plan adopted pursuant to Chapter 380, FS; and
WHEREAS, in accordance with Resolutions 01-2002, 04-2003, and 09-2003, the Land Authority
holds a 50-year, zero-interest non-recourse mortgage loan executed by Meridian West, Ltd. in
the amount of $1,500,000 to offset the land cost in providing 102 units of affordable housing
known as Meridian West Apartments on Stock Island to provide rental housing for persons of
very low and low incomes; and
WHEREAS, as anticipated in Resolution 09-2003, on December 15, 2003 the Florida Housing
Finance Corporation (FHFC) issued to Meridian West, Ltd. a SAIL loan in the amount of
$1,000,000; and
WHEREAS, in accordance with Resolution 09-2003, the debt senior to the Land Authority's
mortgage currently totals $4,450,000 and consists of a construction loan limited by covenant to
$3,450,000 and the $1,000,000 SAIL loan; and;
WHEREAS, construction of the housing development is underway; and
WHEREAS, FHFC has now approved issuing a second SAIL loan to Meridian West in the
amount of $1,000,000; and
WHEREAS, Meridian West, Ltd. requests that the Land Authority subordinate its mortgage to
this new SAIL loan and to additional debt associated with the construction/permanent loan in
first position; and
WHEREAS, the Land Authority Advisory Committee considered this request on January 29,
2004 and voted 3/0 to recommend approval; NOW, THEREFORE,
BE IT RESOLVED BY THE MONROE COUNTY COMPREHENSIVE PLAN LAND AUTHORITY
that the Governing Board Chairman is hereby authorized to execute documents subordinating
the Land Authority's $1,500,000 mortgage to an additional $1,821,000 of debt during the
construction phase of the project and to an additional $670,000 of debt during the permanent
phase as indicated below.
Section 1. During the construction phase of the project, the Land Authority's mortgage may be
subordinated to a total of $6,271,000 of debt consisting of a $4,271,000 construction loan in
Page 1 of 2
favor of Neighborhood Lending Partners of South Florida, Inc., a $1,000,000 SAIL loan in favor
FHFC, and a $1,000,000 SAIL loan in favor of FHFC.
Section 2. Once the construction phase of the project is complete, the Land Authority's
mortgage may be subordinated to a total of $5,120,000 of debt consisting of a $3,120,000 first
mortgage in favor of Neighborhood Lending Partners of South Florida, Inc., a $1,000,000 SAIL
loan in favor FHFC, and a $1,000,000 SAIL loan in favor of FHFC.
PASSED AND ADOPTED by the Monroe County Comprehensive Plan Land Authority at a
regular meeting on this day of 2004.
(Seal)
ATTEST:
MONROE COUNTY COMPREHENSIVE
PLAN LAND AUTHORITY
Mark J. Rosch
Executive Director
David P. Rice
Chairman
Approved for Legal Sufficiency
Larry R. Erskine
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