Broward County Commission Regular Meeting
Director's Name: Leonard Vialpando
Department: Resilient Environment Division: Housing Finance Division
Information
Requested Action
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MOTION TO APPROVE Consent to Change of Ownership Structures (“Consent”), in substantially the form attached as Exhibit 2, to allow Douglas Gardens IV, LTD. (“Borrower”) to change ownership structures of certain entities in connection with Douglas Gardens IV affordable housing project (“Project”); and to authorize the County Administrator to negotiate and execute the Consent, an amendment to the guaranty documents related to the Project, and other documents related to the Consent, that do not impose any additional, material financial impact on the County, subject to review and approval as to legal sufficiency by the Office of the County Attorney. (Commission District 7)
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Why Action is Necessary
Board action is required to approve all agreements with outside agencies.
What Action Accomplishes
Action approves the Consent and authorizes the County Administrator to execute and negotiate the Consent, an amendment to the guaranty documents related to the Project, and other documents related to the Consent.
Goal Related Icon(s)
☒County Commission
☐Go Green
☐MAP Broward
Previous Action Taken
None taken.
Summary Explanation/Background
THE RESILIENT ENVIRONMENT DEPARTMENT AND THE HOUSING FINANCE DIVISION RECOMMEND APPROVAL OF THE ABOVE MOTION.
This item supports the Board’s value: “Ensuring residents have an affordable place to live by offing sustainable, compatible, innovative, accessible, affordable housing options for all income levels, including integrated, permanent supportive housing and zoning that helps build equity.”
On June 7, 2022, Agenda Item No. 23, the Board of County Commissioners (“BOCC”) approved gap financing in the amount of $14,000,000 (“County Loan”) for the Douglas Gardens IV affordable housing project, a 410-unit multifamily housing project containing 400 affordable multifamily housing units in the City of Pembroke Pines, Florida (Douglas Gardens IV), for construction and permanent financing (“Project”).
On December 18, 2023, the Director of the Housing Finance Division received correspondence attached as Exhibit 1, from Douglas Gardens IV, LTD. (“Borrower”) requesting: (i) the transfer by Archipelago Housing, LLC, a Delaware limited liability company (“Archipelago”) of its ownership interests in MHP Douglas SLP, LLC, a Florida limited liability company (“Special Limited Partner”) to W. Patrick McDowell 2001 Trust (the “Trust”), pursuant to Section 7.1 of that certain Leasehold Mortgage and Security Agreement and Assignment of Leases, Rents and Profits (Douglas Gardens - Senior Health and Living) by Borrower in favor of the County (the “Mortgage”); (ii) the transfer by Archipelago of its ownership interests in MHP Developers, LLC, a Delaware limited liability company (“Developers”) to the Trust, pursuant to Section 7.1 of the Mortgage; (iii) the transfer by Kenneth P. Lee, an individual (“K. Lee”), and Michael C. Lee, an Individual (“M. Lee”) of their ownership interests in MHP Developers X, LLC, a Delaware limited liability company (“Developers X”) to the Trust, pursuant to Section 7.1 of the Mortgage (collectively, the “Proposed Transfers”), and (iv) the County release K. Lee from certain guaranty documents and the obligations described therein related to the Project (collectively, the “Proposed Releases”).
The Borrower seeks BOCC authorization and approval of the Proposed Transfers and Proposed Releases, which will allow Borrower to change the referenced ownership structures related to Douglas Gardens IV affordable housing project.
First Housing (the “Credit Underwriter”) reviewed the Borrower’s request attached as Exhibit 3. The Credit Underwriter’s review incorporated information from a letter prepared for Florida Housing Finance Corporation, as they received a similar request for numerous properties within their portfolio “FHFC Letter”.
The FHFC Letter recommended approval of the change of ownership. Further, the Proposed Releases will not occur until the terms of the Operating Deficit Guaranty have been satisfied.
The Credit Underwriter agreed with the recommendations within the FHFC Letter.
The Project is currently at 60% construction completion, and Borrower anticipates the first building completion by the end of 2024. Authorization and approval of the Proposed Transfers and Proposed Releases would cause no significant impact to the completion of the Project nor the guaranty of the County Loan.
Source of Additional Information
Ralph Stone, Director, Housing Finance Division, (954) 357-5320.
Fiscal Impact
Fiscal Impact/Cost Summary
No Fiscal Impact.