Broward County Commission Regular Meeting
Director's Name: Leonard Vialpando
Department: Resilient Environment Division: Housing Finance Division
Information
Requested Action
title
MOTION TO ADOPT Resolution, the title of which is as follows: (Commission District 7)
A Resolution of the Board of County Commissioners of Broward County, Florida approving the forms of and authorizing the execution and delivery by the Housing Finance Authority of Broward County, Florida (the “HFA”) of (i) a Guaranty Reaffirmation and Partial Release Agreement, and (ii) a First Amendment to Multifamily Leasehold Mortgage, Assignment of Rents, Security Agreement and Fixture Filing, in connection with the HFA’s $77,000,000 Multifamily Housing Revenue Note, Series 2022 (Douglas Gardens - Senior Health and Living); authorizing the proper officers, agents, and employees of the HFA to do all things necessary or advisable in connection with the hereinafter defined transfer and the hereinafter defined release and ratifying certain actions previously taken by the HFA in connection with the transactions authorized by this Resolution; and providing an effective date for this Resolution.
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Why Action is Necessary
Formal Board approval is necessary for the adoption of a Resolution, and Ordinance 79-41 requires that all contracts of the HFA in connection with the Transfer and the Release be approved by the Board.
What Action Accomplishes
Enables the adoption of the Resolution.
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 Goal of the Broward County Board of County Commissioner’s (“Board”) of “Ensuring residents have an affordable place to live by offering sustainable, compatible, innovative, accessible, affordable housing options for all income levels, including integrated, permanent supportive housing and zoning that helps residents build equity.”
On February 15, 2023, the Housing Finance Authority of Broward County (the “HFA”) issued and sold its $77,000,000 Housing Finance Authority of Broward County, Florida Multifamily Housing Revenue Note, Series 2023 (Douglas Gardens - Senior Health and Living) (the “Governmental Note”) for the purpose of financing the acquisition, construction and equipping of a 410 unit multifamily residential rental housing development in Pembroke Pines, Florida, known as Douglas Gardens - Senior Health and Living (the “Project”).
The Governmental Note was issued pursuant to that certain Funding Loan Agreement (the “Funding Loan Agreement”), by and among the HFA, The Bank of New York Mellon Trust Company, N.A., a national banking association (the “Fiscal Agent”), and Citibank, N.A., a national banking association (“Funding Lender”), pursuant to which Funding Lender made a loan to the HFA (the “Funding Loan”), the proceeds of which Funding Loan were used by the HFA to make a loan to Douglas Gardens IV, Ltd., a Florida limited partnership (“Borrower”), in the original principal amount of $77,000,000 (the “Borrower Loan”) pursuant to that certain Borrower Loan Agreement by and between Borrower and the HFA. The Borrower Loan was assigned to the Fiscal Agent (for the benefit of the Funding Lender), pursuant to that certain Assignment of Mortgage and Loan Documents made by the HFA to the Fiscal Agent (the “Assignment”).
The Borrower Loan is secured by, among other things, that certain Multifamily Leasehold Mortgage, Assignment of Rents, Security Agreement and Fixture Filing executed by Borrower for the benefit of the HFA and recorded on February 16, 2023, as Instrument No. 118684647, in the Official Records of Broward County, Florida (the “Security Instrument”), as assigned to the Fiscal Agent pursuant to the Assignment, which Security Instrument encumbers the Borrower’s subsubleasehold interest in the Project. As additional security for the Borrower Loan, the Original Guarantor (as hereinafter defined) executed that certain (i) Completion and Repayment Guaranty for the benefit of the HFA, the Funding Lender and the Fiscal Agent (the HFA, the Funding Lender and the Fiscal Agent are herein collectively referred to as the “Beneficiary Parties”) (the “Completion and Repayment Guaranty”), and (ii) Exceptions to Non-Recourse Guaranty for the benefit of the Beneficiary Parties (the “Non-Recourse Guaranty”). Further, as additional security for the Borrower Loan, the Original Guarantor and the Borrower executed that certain Agreement of Environmental Indemnification for the benefit of the Beneficiary Parties (the “Environmental Indemnity”).
One of the original guarantors, Kenneth Lee has requested to transfer 100% of the membership interests held by Archipelago Housing, LLC, a Delaware limited liability company (“Archipelago”), in MHP Douglas SLP, LLC, a Florida limited liability company, to McDowell Trust (as hereinafter defined) (the “Transfer”). In connection with the Transfer, Lee has also requested to be released from liability under the Completion and Repayment Guaranty, the Non-Recourse Guaranty and the Environmental Indemnity (the “Release”).
As a condition to the Funding Lender’s consent to (i) the Transfer, and (ii) the Release, the Funding Lender requires, among other things, that Lee and the Remaining Guarantor (as hereinafter defined) enter into, and that the HFA and the Fiscal Agent, as Beneficiary Parties, consent and agree to enter into, that certain Guaranty Reaffirmation and Partial Release Agreement among MHP Developers, LLC, a Delaware limited liability company (“MHP”), MHP Developers X, LLC, a Delaware limited liability company (“MHP X”), Douglas Gardens Senior Housing, Inc., a Florida not-for-profit corporation (“DGSH”), W. Patrick McDowell, an individual (“McDowell”), The W. Patrick McDowell 2001 Trust (“McDowell Trust”, and together with MHP, MHP X, DGSH and McDowell, the “Remaining Guarantor”) and Kenneth Lee, an individual (“Lee”, and together with the Remaining Guarantor, the “Original Guarantor”) (the “Guaranty Reaffirmation and Partial Release Agreement”).
The HFA desires to enter into the Guaranty Reaffirmation and Partial Release Agreement in substantially the form attached to the proposed Resolution (Exhibit 1) to evidence the terms and conditions of the Transfer and the Release.
Moreover, as an additional condition to the Funding Lender’s consent to (i) the Transfer, and (ii) the Release, the Funding Lender requires that the Borrower, the Funding Lender and the Fiscal Agent enter into that certain First Amendment to Multifamily Leasehold Mortgage, Assignment of Rents, Security Agreement and Fixture Filing (the “Mortgage Amendment”). The HFA desires to direct the Fiscal Agent to enter into the Mortgage Amendment in substantially the form attached to the proposed Resolution.
The proposed Resolution authorizes the Chair or Vice-Chair of the HFA to execute and deliver the Guaranty Reaffirmation and Partial Release Agreement, and the Secretary or Assistant Secretary of the HFA is authorized to place the HFA’s seal thereon and attest thereto; and authorizes the Executive Director of the HFA to direct the Fiscal Agent to execute and deliver the Mortgage Amendment.
Source of Additional Information
Ralph Stone, Director, Housing Finance Division 954-357-5320.
Fiscal Impact
Fiscal Impact/Cost Summary
No fiscal impact.