Item L4
LAND AUTHORITY GOVERNING BOARD
AGENDA ITEM SUMMARY
Meeting Date: September 17, 2003
Bulk Item: Yes No X
Department: Land Authority
Agenda Item Wording: Approval of a resolution revising the requirements for the disbursement of
funds for the Meridian West affordable housing development.
Item Background: Meridian West is a 102-unit affordable apartment complex proposed for Stock
Island on the property formerly developed as a greyhound racing track. Participants in the development
of this $15 million complex will include the project developer (the Carlisle Group), the County
Commission, the Land Authority, the Florida Housing Finance Corporation (FHFC), and a private
lender. The Land Authority has committed to provide a $1.5 million zero-interest 50-year mortgage, 25
transferable ROGO exemptions, and 6 nutrient credits toward the development.
Advisory Committee Action: This item will be considered by the Committee on September 25, 2003.
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 ROGO 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 FHFC SAIL loan closing.
Contract/Agreement Changes: In order to close the Land Authority's loan, the developer requests
that the Land Authority modify its requirements for the disbursement of the loan proceeds to reflect the
FHFC procedure for allocating housing credits, to approve revisions in the project financing, and to
authorize the use of a placeholder mortgage in the closing process. The proposed resolution
authorizes each of these revisions.
Staff Recommendation: Approval.
Total Cost: $1,500,000 (no change)
Budgeted: Yes ~ No
Cost to Land Authority: $1,500,000 (no change)
Source of Funds: Land Authority
(Tourist Impact Tax and State Park Surcharge)
Executive Director Approval:
County Land Steward
^'1.~\L
rk J. Rosch
Approved By: Attorney ~
Documentation: Included: X
To Follow:
Not Required:
Disposition:
Agenda Item LA #4
RESOLUTION NO.
A RESOLUTION OF THE MONROE COUNTY
COMPREHENSIVE PLAN LAND AUTHORITY REVISING THE
REQUIREMENTS FOR THE DISBURSEMENT OF FUNDS 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, as memorialized in Resolutions 01-2002 and 04-2003, the Land Authority has
agreed to hold a SO-year, zero-interest non-recourse mortgage loan executed by Meridian West,
Ltd. in the amount of $1,SOO,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, the Florida Housing Finance Corporation (FHFC) has approved, subject to FHFC's
customary conditions, an allocation of housing tax credits for the project in the amount of
$1,020,000 for a period of 10 years which will provide $8,210,000 in tax credit equity; and
WHEREAS, contrary to a statement in Resolution 01-2002, the FHFC approval process for
housing tax credits does not entail FHFC Board approval of the project's underwriting report;
and
WHEREAS, Meridian West, Ltd. requests that the Land Authority modify its requirements for the
disbursement of the loan proceeds to reflect the FHFC procedure for allocating housing tax
credits, to approve revisions in the project financing, and to authorize the use of a placeholder
mortgage in the closing process; NOW, THEREFORE,
BE IT RESOLVED BY THE MONROE COUNTY COMPREHENSIVE PLAN LAND AUTHORITY
that the Land Authority hereby agrees to revise the requirements for closing its $1,SOO,000
mortgage loan to Meridian West, Ltd. as indicated below.
Section 1. Given that FHFC procedures do not include FHFC Board approval of a project
underwriting report for the issuance of tax credits, the Land Authority's requirement for said
FHFC approval is hereby waived.
Section 2. The revised project financing identified in Attachment A is hereby approved and the
requirement that said financing be within 10% of the original estimates is hereby waived.
Section 3. In anticipation of FHFC approving the project's SAIL loan in October 2003 and
closing said loan in December 2003, the Land Authority agrees to subordinate its mortgage to a
conventional first position non-recourse mortgage and a second position "placeholder" mortgage
designed for eventual assignment to FHFC.
Page 1 of 2
Section 4 This resolution shall not take effect unless approved by the Land Authority Advisory
Committee.
PASSED AND ADOPTED by the Monroe County Comprehensive Plan Land Authority at a
regular meeting on this day of 2003.
(Seal)
ATTEST:
MONROE COUNTY COMPREHENSIVE
PLAN LAND AUTHORITY
Mark J. Rosch
Executive Director
Murray E. Nelson
Chairman
Approved for Legal Sufficiency
Larry R. Erskine
Page 2 of 2
Attachment A
6) Executive Summary - Meridian West - Key West, FI
p..Ojti~ec)sts '
CLOSING
da.I~INALEST: ' DIFFERENCE
Project'.Desc:riptiOri'
Total.'
'Tottil':, '
Total,
Land
Hard Cost Construction
Contingency
Developer Fee
Impact Fee & Connection fees
Soft Costs
Total Project Costs
2,452,228
9,415,000
279,000
1 ,481,680
577,270
1,337,005
15,542,183
2,220,000
8,041,440
237,343
1,562,345
262,242
2,422,920
14,746,290
232,228
1,373,560
41 ,657
(80,665)
315,028
(1,085,915)
795,893
5.40%
ptQjec!iFillallcillg'
"', ':. '," l' '~", ",;
'.' :~:j\}{~\fi:~~':,::<r;,;: t I "
,TOtal'
" -<.'.,~/\.,-""
'Total,
,,';, ;',":.'~-,".,,-:
.~-:;;i(':':'\/:'::;,'
',Total'.
Conventional First Mortgage
Florida Housing Finance Corp, SAIL Loan
CDFI
Interest Income
KW Land Authority
Impact Fee Waivers
Tax Credit Equity
SHIP
Deferred Developer Fee
3,450,000 700,000 2,750,000
1,000,000 2,000,000 (1,000,000)
430,000 430,000
12,002 (12,002)
1,500,000 1,500,000
125,052 (125,052)
8,210,000 10,399,000 (2,189,000)
75,000 75,000
877,183 10,237 866,946
15,542,183 14,746,291 795,892 5.40%
Rosch-Mark
From:
Sent:
To:
Cc:
Subject:
Chris Buswell[SMTP: Chris. Buswell@floridahousing.org]
Wednesday, September 03,20033:23 PM
Rosch-Mark@MonroeCounty-FI.gov
bmcdonough@swmwas.com
Meridian West
Dear Mr. Rosch:
This is to inform you that the Meridian West Apartments development entered into a Carryover Allocation
Agreement with Florida Housing Finance Corporation in December, 2002. The Carryover Allocation Agreement
provides an allocation of housing credits in the amount of $1,020,000 to the development subject to the customary
* conditions that are in all our Carryover Allocation Agreements. Florida Housing's Board does not aoorove the
credit underwritinq report in reference to the development receiving housing credits. The Board only approves
credit underwriting reports for loan programs, and housing credits is not a loan program. If you have any further
questions, you may call me at (850) 488-4197.
Chris Buswell
Housing Credit Administrator
Page 1
~
THE CARLISLE GROUP
CARLISLE PROPERTY MANAGEMENT. INC
CARLISLE DEVELOPMENT GROUP, LLC
CARLISLE BUILDERS, INC
d
CORPORATI3 OHler::
,2950 ~~,\'(l 27lh Al'en"e, S"it" 200
Mi"ll1i, FI"ri"n 33133
pl1l111e (305) </,76-811 i\
Filx (305) 4,76.1557
1",lX (305) 'J,7h-52MI CPM
o TA~~AII M;S.1313_QE~<~~:.l}.
296,1 Wlellil1glol1 Cirele, C~"i11' I
'1:,l1nl.nsscc, 1~1,,,id,, 32'1(1')
1'h"oe(850) 222-9022
Fnx (850) 222.,<)110
September 4, 2003
Mark Rosch
Executive Director
Monroe Land Authority
1200 Tnnnan Avenue
Key West. Florida 33040
RE: Meridian West
Dear Mark.
As we discussed, the development process, especially Affordable Housing, is a difficult journey,
characterized by hurdles and obstacles to be overcome. We appreciate your help and that of the Land
Authority, as we are now very close to culmination.
We need your further assistance in updating the Meridian West Resolution with these changes
described below.
1.) There is apparently some confusion on the on the issue of FHFC Housing Credit
underwriting. Meridian West was annroved in underwritin2 for Housin2 Credits in November
of last vear. (See attached.) It is just that a different department of FHFC does a separate
underwriting for SAn.., which will be approved in October, and will close prior to year-end.
Although Meridian West was approved for Housing Credits in November of last year, FHFC's
procedures are such that this underwriting does not need to go to their Board for approval as
indicated in the Resolution
It is this time delay which we are trying to circumvent, as the SAn.. is only a small part of
the financing.
2.) The Sources of Financing have changed in the last eighteen months since we submitted
our original pro-fonna. As you will see from the comparison of the original with the current
underwriting (Enclosed), the total sources differ only 5.4% from the original projection. We are
actually quite proud of that.
However, some line items have decreased, and some increased, and some change more
than the 10% approved in the Resolution.
3.) Since we are hoping to close all of the financing except the SAn. loan, we are asking that
the Authority approve a "placeholder" mortgage for the soon to be closed SAIL. If this is not
done, we will need to have the equivalent of a second full closing, and circulate subordination
documents all over again, when the SAIL does close. TIris technique is routinely used by
Affordable Housing developers, because the layering of subsidies requires it. We have closed
twenty-three Affordable Housing transactions, and in all but three of these we have had
subordinate financing that has closed after the construction loan closing and required a placeholder
mortgage. The costs and time delay would be substantial and completely unnecessary.
The "placeholder" lien will be for $100.00 (One Hundred Dollars), and will only be
increased to the amount of the SAn. loan when that loan from the State of Florida closes.
The net effect of all of this will allow us to break ground sixty days sooner (as you may know, we
have already completed demolition.) That means construction completion, and people in desperately
needed, beautiful and new, work force housing, sixty days sooner.
Thanks again for all your assistance and advice.
Marlene Sanchez for:
Lloyd 1. Boggio
Chief Executive Officer
CC: Edwin Swift
Luis Gonzalez
Liz Wong
Brian McDonough
Patricia Green
6) Executive Summary - Meridian West - Key West, FI
Project Descriptioll
project Costs
Land
Hard Cost Construction
Contingency
Developer Fee
Impact Fee & Connection fees
Soft Costs
Total Project Costs
~tqj~~,fi"'Clncil1g' ,
Conventional First Mortgage
Florida Housing Finance Corp. SAIL Loan
CDFI
Interest Income
KW Land Authority
Impact Fee Waivers
Tax Credit Equity
SHIP
Deferred Developer Fee
CLOSING
Total
2,452,228
9,415,000
279,000
1,481,680
577,270
1,337,005
15,542,183
""',,' 'Total
3,450,000
1,000,000
430,000
1,500,000
8,210,000
75,000
877,183
15,542,183
ORI<:;INALg$T: DIFFERENCE
"Total. Total
2,220,000 232,228
8,041,440 1,373,560
237,343 41 ,657
1,562,345 (80,665)
262,242 315,028
2,422,920 1,085,915)
14,746,290 795,893 5.40%
'Tot~1I ' . ,::Tota] "
700,000 2,750,000
2,000,000 (1,000,000)
430,000
12,002 (12,002)
1,500,000
125,052 (125,052)
10,399,000 (2,189,000)
75,000
10,237 866,946
14,746,291 795,892 5.40%
SEL TZER MANAGEMENT GROUP, INC.
7500 McELVEY ROAD
PANAMA CITY BEACH, FL 32408
TEL ; (850) 233-3616
Fax: (850) 233-1429
November 2S, 2002
Mr. Chris Buswell
Housing Credit Administrator
Florida Housing Finance Corporation
227 North Bronough Street, Suite SOOO
Tallahassee, FL 32301
Re: Meridian West Apartments, #2002-0S7CS
Dear Mr, Buswell:
Meridian West, Ltd. ("Meridian West, ltd." or "Applicant"), has applied for a $1,020,000
determination of federal housing credits ("HC") to finance the development referenced above.
The proposed development will consist of 102 residential units in seventeen 2-story buildings.
The development is a garden style multi-family property located at the intersection of Shrimp
Road and Fifth Avenue, Key West, Florida. The development's housing credit set-aside is
1S.69% of the units (16 units) at 30% of the area median income ("AMlj, and 84.31% of the
units (86 units) at 60% of the AMI, to total 102 residential units with a 100% set-aside.
Meridian West, Ltd. is a Florida Limited Partnership formed March 1, 2002. The general partner
of the Applicant is TCG Meridian West, Inc. with a 0.01 % ownership interest and Lloyd J.
Boggio (and/or assigns) as the initial limited Partner, with a 99.99% ownership interest. Lloyd
J. Boggio is a 33% owner of The Carlisle Group, Inc., the development company. Related
Capital Company, New York, NY ("RCC") or its designee is anticipated to be the syndicator of
the HC that will replace Mr. Boggio as the 99.99% limited partner at closing.
The principals of Meridian West, Ltd. have sufficient experience and financial resources to
complete a development of this type.
A Market Study was prepared for the subject property by Realvest Appraisal Services, Inc,
("Realvest"), dated November 25, 2002. Realvest estimates the subject will have an average
absorption rate of 15 to 20 units per month and reach stabilized occupancy, approximately 5
months after leasing begins, The average vacancy rate for stabilized restricted rent
developments within the subject's immediate sub-market is estimated at 3%. Further, the
appraiser concludes that the subject will obtain maximum allowable HC rents as follows:
P ANlWtA CITY BEAOi . ORLANDO' FT. LAUDERDALE
Mr. Chris Buswell
Meridian West, 2002-057CS
November 25, 2002
No. Unit Median Gross Utility Max
Bed- of Size Income HC Allow- Net HC Applicant Underwriter Annual
rooms Baths Units (SF) % Rents ance Re nts Re nts Rents Re nts
f-.. $309 $94 $215 --$215- --- $215 $7,740
1 1 3 620 30%
1 1 14 620 60% $620 $94 $526 $526 $526 $88,368
2 1 10 830 30% $372 $104 $268 $268 $268 $32,160
2 1 58 830 60% $744 $104 $640 $640 $640 $445,440
3 2 3 1,040 30% $430 $117 $313 $313 $313 $11,268
3 2 14 1,040 60% $859 $117 $742 $742 $742 $124,656
Totals 102 84,660 $709,632
The rent levels are based on the FHFC 2002 Rent Chart and a September 2002 PHA Utility
Chart for Key West, Florida. Tenants of this development will be responsible for all utilities;
therefore, an allowance was given for electricity, water, and sewer. Based on interest rate
assumptions stated for the first mortgage construction/permanent financing commitment
provided by Charter Municipal Mortgage Acceptance Company ("CharterlMac") combined with
the SAIL loan and county loan Interest rate assumptions, and average "other income" combined
with expenses conservatively estimated by the applicant at $5,007 per unit per year, the subject
should achieve a debt service coverage ration of 0.987 to 1.00. This. i~" b~low the SAIL
lJ:IiflinllJrTl of 1.10 minimlJJ1l .coverage. Dueing SAIL credit IJnderwriting this. will have to be 1.10
..Of higtler for a positjy(;L~AIL L9j:ln recomm~!1~ation.
Based upon a HC equity investment commitment letter dated April 9, 2002, RCC or its designee
will purchase a 99.99% limited partner interest concurrent with or before the closing of the
construction/permanent loan. Based upon $10,198,980 of syndicated HC and a syndication rate
of $0.780 per dollar of syndicated HC, the partnership anticipates a net capital contribution of
$7,955,000 (the amount available at closing is $2,784,250).
This recommendation is contingent upon closing of the HC purchase consistent with the terms
of this report. .. ,r
",,.- . ~~<~~,..i"
Additional sources of funds for the Lenox' Court development include a first mortgage
construction/permanent loan, a Florida Housing SAIL loan, a county loan, and deferred
developer fees.
The applicant has submitted a commitment letter from Charter/Mac dated April 8, 2002, for a
first mortgage construction/permanent loan. The construction loan is in the amount of
$1,250,000, with an interest rate based on the permanent loan rate plus 30 basis points, fixed
at closing, The maximum term is 24-months, with payments of interest only during that period.
The permanent loan is in the amount of($1,750,OQO;.with an interest rate based on the current
10-year U.S. Treasury rate plus 293 basis p'oink and will be amortized on a 30-year schedule,
with an 18-year term following conversion.
The applicant has applied to Florida Housing for a $1,500,000 SAIL loan. The SAIL loan term
is anticipated to be for a period of not more than 15 years, Including the
construction/stabilization period. It will be non-amortizing and will bear 3% simple Interest per
annum. Annual payments will be required of all applicable fees. In addition and to the extent
-2-
Mr. Chris Buswell
Meridian West, 2002-057CS
November 25, 2002
that development cash flow is available; interest payments at the 3% rate will be required. Any
unpaid interest will be deferred until cash flow is available. However, at the maturity of the SAIL
loan, all principal and unpaid interest will be due. Seltzer's credit underwriting assumes interest
payments at 3.47% (the simple interest rate plus applicable fees).
The applicant has submitted a firm commitment letter from the Monroe County Land Authority
("MCLA") dated April 11, 2002, for a construction/permanent loan in the amount of $1,500,000.
The loan will bear an interest rate of 0.00%, be non-amortizing for a term of 50 years, at which
time the full principal amount is due.
During the construction period, the Applicant must defer developer fees totaling $1,490,619.
The developer fees represent amounts that must be deferred after all available loan proceeds
and HC equity contributions have been received during the construction period,
Deferred developer fees upon stabilization total $1,021,989. This amount represents developer
fees that must be deferred after all available loan proceeds and HC equity contributions have
been received during the permanent period.
Following is a summary of the HC Allocation Calculation. Note that these calculations are based
upon information provided in the application. Updated information submitted during credit
underwriting may result in changes to these preliminary estimates.
If you have any questions regarding this letter please do not hesitate to call me at 850-233-
3616 ext, 225.
Sincerely,
SELTZER MANAGEMENT GROUP, INC.
op
Don Jackson
Credit Underwriter
-3-
Mr. Chris Buswell
Meridian West, 2002-057CS
November 25, 2002
HC ALLOCATION CALCULATION
Section I: ElIglble_.Basls Calculation
Development Cost
I Less Land Cost
!Less Federal Funds
!Less Other Ineligible Cost
iLess Disproportionate Standard
$13.226,989
($2.420,000)
$0
($242,467)
$0
Total Eligible Basis
Applicable Fraction
DDA/QCT Basis Credit
Qualified Basis
Housing Credit Percentage
Annual Housing Credit Allocation
$10.564,522
100.00%
130.00%
$13.733,879
8.27%
$1.135,792
Notes to the Qualified Basis Calculation:
1. Other Ineligible Costs primarily include construction loan interest incurred during the lease-
up period, origination fees and closing costs related to the pennanent loan, compliance fees
and advertising & marketing costs.
2. The development has a 100% set aside. The Applicable Fraction is therefore 100%,
3. The development is located in a Difficult Development Area (.DDA"). The development is
not located in a Qualified Census Tract ("QCr).
Section II: Gap Calculation
Total Development Cost (Including land and Ineligible Costs)! $13.226,989
iLess Mortgages
ILess Grants
Equity Gap
($4,250,000)
$0
$8,976,989
Percentage to Investment Partnership
HC Syndication Pricing
HC Required to Meet Gap
Annual HC Required
r
99.99%
$0.7800
i $11,510,407
$1,151,041
Notes to the Gap Calculation:
1. Mortgages represent the first mortgage provided by CharterlMac, the second mortgage to
be provided by Florida Housing and the third mortgage to be provided by Monroe County.
2. HC Syndication Pricing and Percentage to Investment Partnership are based upon the April
9,2002 RGG Commitment Letter (Syndication Agreement).
-4-
Mr. Chris Buswell
Meridian West, 2002-057CS
November 25, 2002
Section III: Summary
HC per Applicant Request
HC per Qualified Basis
HC per Gap Calculation
$1,020,000
$1,135,792
$1,151,041
Annual HC Recommended
$1,020,000
Notes to the Summary:
1. The Annual HC Recommended is limited by the Applicant's Request.
2. Annual HC Recommended is contingent upon final credit underwriting.
-5-