vs.
Case No. 19-1261BID
Intervenor.
This case came before Administrative Law Judge Darren A. Schwartz of the Division of Administrative Hearings for final hearing on April 10, 2019, in Tallahassee, Florida.
For Petitioner: Michael P. Donaldson, Esquire
Carlton Fields Jorden Burt, P.A.
215 South Monroe Street, Suite 500 Post Office Drawer 190 Tallahassee, Florida 32302-0190
For Intervenor: Seann M. Frazier, Esquire
Whether Respondent, Florida Housing Finance Corporation's ("Florida Housing"), intended action to award housing tax credit funding to Intervenor, Las Brisas Trace, LP ("Las Brisas"), under Request for Applications 2018-111 Housing Credit Financing for Affordable Housing Developments Located in Miami-Dade County (the "RFA"), is contrary to governing statutes, rules, the RFA specifications, and clearly erroneous, contrary to competition, arbitrary, or capricious.
On September 6, 2018, Florida Housing issued the RFA, soliciting applications to compete for an allocation of Federal Low-Income Housing Tax Credit funding ("housing tax credits") for the construction of affordable housing developments in Miami-Dade County, Florida. Modifications to the RFA were issued on September 25, 2018, October 4, 2018, and October 18,
2018. On November 9, 2018, 67 applications were submitted in response to the RFA, including applications from Petitioner, Ambar Riverview, Ltd. ("Ambar"), and Las Brisas.
On February 1, 2019, Florida Housing posted notice of its intended decision to award funding to three applicants,
including Las Brisas. Ambar was eligible, but not recommended for funding.
Ambar timely filed a Formal Written Protest and Petition for Administrative Proceeding. On March 11, 2019, Florida Housing referred the matter to the Division of Administrative Hearings ("DOAH") to assign an Administrative Law Judge to conduct the final hearing.
Florida Housing filed a motion to consolidate this matter with other matters filed by Whaler's Cove Apartments, LLC, and Landmark Development, Corp. (DOAH Case No. 19-1258BID); AMC HTG 3, LLC (DOAH Case No. 19-1262BID); and HTG Rock Ridge, Ltd. (DOAH Case No. 19-1263BID). Lucida Apartments, Ltd., and HTG Berkeley, LLC, filed notices of appearance as named parties in
DOAH Case No. 19-1258BID. Las Brisas, Ambar, and Cannery Row at Redlands Crossing, LLLP, filed notices of appearance as named parties in DOAH Case No. 19-1262BID. On March 14, 2019, HTG Rock Ridge, Ltd., filed a voluntary dismissal of its petition and the undersigned entered an Order closing DOAH Case No. 19- 1263BID and relinquishing jurisdiction to Florida Housing.
Florida Housing closed its file as well.
Las Brisas' motions to intervene and to dismiss the petition.
On March 18, 2019, the undersigned entered an Order granting the motion to intervene and denying the motion to dismiss. On
March 18, 2019, the undersigned entered an Order setting the final hearing for April 10, 2019. On March 19, 2019, the undersigned entered an Order consolidating the instant case with DOAH Case Nos. 19-1258BID and 19-1262BID. Subsequently, Whaler's Cove Apartments, LLC; Landmark Development, Corp.; and AMC HTG 3, LLC filed voluntary dismissals of their petitions in DOAH Case Nos. 19-1258BID and 19-1262BID, and on March 25 and March 26, 2019, the undersigned entered an Order severing and closing these two cases and relinquishing jurisdiction to Florida Housing. Florida Housing closed its files as well.
On April 8, 2019, the parties filed their Joint Pre-hearing Statement. The final hearing commenced as scheduled and concluded on April 10, 2019, with all parties present. At the outset of the hearing, Ambar announced that it would no longer litigate several issues raised in its petition. Thereafter, the hearing proceeded on issues regarding: (1) Las Brisas' Principals Disclosure Form's failure to identify the multiple roles of its principals; and (2) Las Brisas' failure to answer Question 10f. of the Public Housing Authority Question of the
RFA.
Adames. All parties presented the testimony of Marisa Button. Ambar's Exhibits 1 and 6 were received in evidence. Las Brisas'
Exhibit 2 was received in evidence. Joint Exhibits 1 through 10 were received in evidence.
The one-volume final hearing Transcript was filed on May 1, 2019. The parties timely filed proposed recommended orders, which were considered in the preparation of this Recommended Order. The stipulated facts in the parties' Joint Pre-hearing Statement have been incorporated herein as indicated below.
are to the 2018 version.
Ambar is an applicant requesting an allocation of
$2,700,000.00 in competitive housing tax credits. Ambar's application, assigned number 2019-035C, was deemed eligible for consideration, but was not preliminarily selected for funding.
Las Brisas is an applicant requesting an allocation of
$2,635,850.00 in housing tax credits. Las Brisas' application, assigned number 2019-073C, was deemed eligible for consideration and was preliminarily selected for funding.
Florida Housing is a public corporation created pursuant to section 420.504, Florida Statutes, whose address is
227 North Bronough Street, Suite 5000, Tallahassee, Florida 32301, and for the purposes of this proceeding, an agency of the State of Florida.
Florida Housing's purpose is to promote public welfare by administering the governmental function of financing affordable housing in Florida. Pursuant to section 420.5099, Florida Housing is designated as the housing credit agency for Florida within the meaning of section 42(h)(7)(A) of the Internal Revenue Code and has the responsibility and authority to establish procedures for allocating and distributing low income housing tax credits.
The low income housing tax credit program (commonly referred to as "housing tax credits") was enacted to incentivize the private market to invest in affordable rental housing.
These housing tax credits are awarded competitively to housing developers in Florida for rental housing projects that qualify. These credits are then normally sold by developers for cash to raise capital for their projects. The effect is that the credits reduce the amount that the developer would otherwise have to borrow. Because the total debt is lower, a housing tax credit property can (and must) offer lower, more affordable rents. Developers also covenant to keep rents at affordable levels for periods of 30 to 50 years as consideration for receipt of the housing tax credits. The demand for housing tax credits provided by the federal government exceeds the supply.
The Competitive Application Process
Florida Housing is authorized to allocate housing tax credits, State Apartment Incentive Loan ("SAIL") funding, and other funding by means of requests for applications or other competitive solicitation in section 420.507(48), and Florida Administrative Code Chapter 67-60, which govern the competitive solicitation process for several different programs, including the program for housing tax credits. Chapter 67-60 provides that Florida Housing allocate its housing tax credits, which are made available to Florida Housing on an annual basis by the
U.S. Treasury, through the bid protest provisions of section 120.57(3).
In their applications, applicants request a specific dollar amount of housing tax credits to be given to the applicant each year for a period of ten years. Applicants normally sell the rights to that future stream of income housing tax credits (through the sale of almost all of the ownership interest in the applicant entity) to an investor to generate the amount of capital needed to build the development. The amount which can be received depends upon the accomplishment of several factors, such as a certain percentage of the projected Total Development Cost; a maximum funding amount per development based on the county in which the development will be located; and whether the development is located within certain designated
areas of some counties. This, however, is not an exhaustive list of the factors considered.
The RFA was issued on September 6, 2018, and responses were initially due October 25, 2018. The RFA was modified on September 25, 2018, October 4, 2018, and October 18, 2018. The application deadline was extended to November 9, 2018. No challenges were made to the terms of the RFA.
Through the RFA, Florida Housing seeks to award up to an estimated $6,881,821.00 of housing tax credits to applicants that propose developments located in Miami-Dade County, Florida. Florida Housing received 67 applications in response to the RFA.
A review committee was appointed to review the applications and make recommendations to Florida Housing's Board of Directors (the "Board"). The review committee found 61 applications eligible and six applications ineligible. Through the ranking and selection process outlined in the RFA, three applications were recommended for funding, including Las Brisas. To reflect its scoring decisions, the review committee developed charts listing its eligibility and funding recommendations to be presented to the Board.
On February 1, 2019, the Board met and considered the recommendations of the review committee. Also, on February 1, 2019, at approximately 9:20 a.m., Ambar and all other applicants received notice that the Board had determined whether
applications were eligible or ineligible for consideration for funding, and that certain eligible applicants were selected for award of housing credits, subject to satisfactory completion of the credit underwriting process. Such notice was provided by the posting of two spreadsheets on the Florida Housing website, www.floridahousing.org, one listing the "eligible" applications in the RFA and one identifying the applications which Florida Housing proposed to fund.
In the February 1, 2019, posting, Florida Housing announced its intention to award funding to three applicants, including Las Brisas. Ambar and Las Brisas applied for funding to develop proposed developments in Miami-Dade County with the demographic commitment of Elderly, Non-ALF. Ambar was eligible, but not recommended for funding. Ambar timely filed a Notice of Protest and Petition for Formal Administrative Proceedings and Las Brisas timely intervened.
THE RFA Ranking and Selection Process
The RFA contemplates a structure in which the applicant is scored on eligibility items and obtains points for other items. A list of the eligibility items is available in section 5.A.1, beginning on page 65 of the RFA. Only applications that meet all the eligibility items will be eligible for funding and considered for funding selection. The eligibility items also include Submission Requirements,
Financial Arrearage Requirements, and the Total Development Cost Per Unit Limitation requirement.
Applicants can earn points for each of the following items (for a total of 15 points): Submission of Principals Disclosure Form stamped by the Corporation as "Pre-Approved" (5 points), Development Experience Withdrawal Disincentive
(5 points), and Local Government Contribution Points (5 points).
All 67 applications for the RFA were received, processed, deemed eligible or ineligible, scored, and ranked, pursuant to the terms of the RFA, Florida Administrative Code Chapters 67-48 and 67-60, and applicable federal regulations.
On page 69, the RFA outlines its three goals:
The Corporation has a goal to fund one (1) proposed Development that
selected the Demographic Commitment of Family at question 2.a of Exhibit A and
qualifies for the Geographic Areas of Opportunity/SADDA Goal as outlined in Section Four A.10.
The Corporation has a goal to fund one (1) proposed Development that selected the Demographic Commitment of Elderly (ALF or Non-ALF) at question 2.a. of Exhibit A. ["Elderly Demographic Goal"].
The Corporation has a goal to fund one (1) proposed Development wherein the Applicant applied and qualified as a Non- Profit Applicant.
*Note: During the Funding Selection Process outlined below, Developments selected for these goals will only count toward one goal. For example, if a Development is selected
for the Elderly Demographic goal but also qualifies for the Non-Profit goal, the Development will only count towards the Elderly Demographic goal and another Development will be considered for the Non- Profit goal.
As part of the funding selection process, the RFA starts with the application sorting order. The highest scoring applications are determined by first sorting together all eligible applications from the highest score to lowest score, with any scores that are tied separated as follows:
First, by the Application's eligibility for the Proximity Funding Preference (which is outlined in Section Four A.5.e. of the RFA) with Applications that qualify for the preference listed above Applications that do not qualify for the preference;
Next, by the Application's eligibility for the Per Unit Construction Funding Preference which is outlined in Section Four
A.11.e. of the RFA (with Applications that qualify for the preference listed above Applications that do not qualify for the preference);
Next, by the Application's eligibility for the Development Category Funding Preference which is outlined in Section Four A.4(b)(4) of the RFA (with Applications that qualify for the preference listed above Applications that do not qualify for the preference);
Next, by the Application's Leveraging Classification, applying the multipliers outlined in item 3 of Exhibit C of the RFA (with Applications having the Classification of A listed above Applications having the Classification of B);
Next, by the Application's eligibility for the Florida Job Creation Funding Preference which is outlined in Item 4 of Exhibit C of the RFA (with Applications that qualify for the preference listed above Applications that do not qualify for the preference); and
And finally, by lottery number, resulting in the lowest lottery number receiving preference.
Beginning on page 70, the RFA outlines the funding selection process:
The first Application selected for funding will be the highest ranking eligible Family Application that qualifies for the Geographic Areas of Opportunity/SADDA Goal.
The next Application selected for funding will be the highest ranking eligible Application that qualifies as an Elderly (ALF or Non-ALF) Development.
The next Application selected for funding will be the highest ranking Application wherein the Applicant applied and qualified as a Non Profit Applicant.
If there are less than three (3) Applications selected for funding in (1), (2), and (3) above, the next Application(s) selected for funding will be the highest ranking unfunded Application(s), regardless of Demographic Category until no more than three (3) total Applications are selected for funding. If the third Application cannot be fully funded, it will be entitled to receive a Binding Commitment for the unfunded balance.
If funding remains after selecting the three (3) highest ranking eligible unfunded Applications as outlined above, or if funding remains because there are not
three (3) eligible Applications that can be funded as outlined above, then no further Applications will be considered for funding and any remaining funding will be distributed as approved by the Board.
According to the terms of the RFA:
Funding that becomes available after the Board takes action on the [Review] Committee's recommendation(s), due to an Applicant withdrawing its Application, an Applicant's declining its invitation to enter credit underwriting or the Applicant's inability to satisfy a requirement outlined in this RFA, and/or Rule Chapter 67-48, F.A.C., will be distributed as approved by the Board.
Las Brisas' Application
In response to the RFA, Las Brisas timely submitted its application to develop a 119-unit affordable, elderly development in Miami-Dade County.
Florida Housing determined that the Las Brisas application was eligible for an award of housing tax credits and and preliminarily selected the Las Brisas application for an award of housing tax credits. Las Brisas was selected to meet the Elderly Demographic Goal.
Ambar contests Florida Housing's preliminary selection of Las Brisas for an award of housing tax credits. If the Las Brisas application is either ineligible or remains eligible but loses five points, then according to the ranking and selection
process in the RFA, Ambar's application will be selected for funding as the next highest ranking eligible application.
Principals Disclosure Form
In its challenge, Ambar argues that Las Brisas failed to correctly complete its Principals Disclosure Form by not identifying the multiple roles of its disclosed principals. Specifically, Ambar argues that Las Brisas failed to list
Steve Protulis, who is disclosed as executive director, as an officer as well. Additionally, Ambar argues that Las Brisas' disclosure of Christopher M. Shelton, Morton Bahr, Edward L. Romero, Leo W. Gerard, Maria C. Cordone, and Erica Schmelzer as officers is insufficient because they were also not listed as directors. Accordingly, Ambar contends Las Brisas is not eligible or should lose five points. Significantly, Ambar does not argue that Las Brisas failed to disclose a principal.
As an eligibility item, the RFA requires that applicants identify their "Principals" by completing and submitting with their applications a Principals Disclosure Form as follows:
Eligibility Requirements
To meet the submission requirements, the Applicant must upload the Principals of the Applicant and Developer(s) Disclosure Form (Form Rev. 08-16)("Principals Disclosure Form") with the Application and Development Cost Pro Forma, as outlined in Section Three above.
The Principals Disclosure Form must identify the Principals of the Applicant and Developer(s) as of the Application Deadline and should include, for each applicable organizational structure, only the types of Principals required by Subsection 67-48.002,
F.A.C. A Principals Disclosure Form should not include, for any organizational structure, any type of entity that is not specifically included in the Rule definition of Principals.
The RFA states that unless otherwise defined, capitalized terms within the RFA have the meaning as set forth in Exhibit B, in chapters 67-48 and 67-60, or in applicable federal regulations.
Rule 67-48.002(94) defines the term "Principal." The rule is organized first by the applicant or developer entity, then by the organizational structure of those specific entities. According to rule 67-48.002(94)(a)2., with respect to any applicant that is a limited partnership, any general partner or limited partner must be disclosed.
Because the general partner of Las Brisas is a corporation, additional disclosures are required. Principals at the second disclosure level pursuant to rule 67-48.002(94)(a)2. include "any officer, director, executive director, or shareholder of the corporation." Ms. Button, Director of Multifamily Programs for Florida Housing, testified that Florida Housing defined the term principals this way so that it could know the individuals that have control and oversight over the
entities themselves in order to determine whether any individuals associated with a proposed development are in arrears or indebted to Florida Housing in connection with other developments.
The RFA also enabled an applicant to obtain points by participating in Florida Housing's Advance Review Process as follows:
Point Item
Applicants will receive 5 points if the uploaded Principal Disclosure Form was stamped "Approved" during the Advance Review Process provided (a) it is still correct as of Application Deadline, and (b) it was approved for the type of funding being requested (i.e., Housing Credits or Non- Housing Credits). The Advance Review Process for Disclosure of Applicant and Developer Principals is available on the Corporation's Website http://www.florida housing.org/programs/developers-multifamily programs/competititve/2018/2018-111 (also accessible by clicking here) and also includes samples which may assist the Applicant in completing the required Principals Disclosure Form.
Note: It is the sole responsibility of the Applicant to review the Advance Review Process procedures and to submit any Principals Disclosure Form for review in a timely manner in order to meet the Application Deadline.
In order to assist applicants with identifying the correct types of principals that should be identified for each entity, Florida Housing offers applicants the opportunity to
have the Principals Disclosures Form reviewed by staff in the Advance Review Process. The Advance Review Process is a continuous, ongoing process that is not specific to any RFA. The RFA provides a link that directs applicants to information regarding the Advance Review Process including instructions, rule definitions, terms and conditions, sample charts and examples, the Principals Disclosure Form, and Frequently Asked Questions ("FAQ"). The RFA states that the information
contained within the link "includes samples which may assist the Applicant in completing the required Principals Disclosure Form."
Part of the information about the Advance Review Process that is linked in the RFA is a Principals of the Applicant and Developer(s) Disclosure Form Frequently Asked Questions document that was updated on September 4, 2018 (the "2018 FAQ").
Question 6 of the 2018 FAQ provides:
Q: If a person has multiple roles within the organizational structure, must they be listed multiple times--once for each role?
A: For a Corporation, if a person serves multiple roles they may be listed once with the other role(s) identified next to the name of the individual. For example, John Smith serves as both an officer and director for ABC, Inc. You may choose the option of "director" in the drop-down menu and enter "officer" after his name as follows: Smith, John (officer).
A prior version of the FAQ was updated on November 10, 2016 (the "2016 FAQ") and was replaced by the 2018 FAQ. The 2016 FAQ was not linked within the RFA.
Question 8 of the 2016 FAQ provided:
Q: If a person has multiple roles within the organizational structure, must they be listed multiple times--once for each role?
A: Yes.
Ms. Button persuasively and credibly testified that the purpose of the frequently asked questions is to help applicants understand what information Florida Housing is seeking from the applicants, and that the update to the 2016 FAQ was made because requesting applicants to list multiple roles of its principals did not further Florida Housing's goals. Thus, the intent of Question 6 of the 2018 FAQ and Florida Housing's answer was to communicate to applicants that they may, but were not required to, list the multiple roles of a principal of a corporation. Ms. Button persuasively and credibly testified that Florida Housing intentionally changed its position in Question 6 of the 2018 FAQ from the "hard-and-fast requirement" of Question 6 of the 2016 FAQ.
The 2018 FAQ was not the only resource linked within the RFA for applicants to reference when completing the Principals Disclosure Form. Also linked within the RFA was the Continuous Advance Review Process for Disclosure of Applicant
and Developer Principals, which includes disclosure instructions, rule definitions, and sample charts and examples. These resources included guidance and examples of Principals Disclosure Forms where principals, who held multiple roles, were listed twice. However, both of these resources pre-date the 2018 FAQ, which was last updated September 4, 2018, approximately two months before the applications in response to the RFA were due.
At hearing, Ms. Button acknowledged the discrepancy between the instructions and guidance to the Principals Disclosure Form and the 2018 FAQ. Ms. Button explained that when the FAQ was updated in 2018, the other documents were not updated to reflect Florida Housing's change of position.
Ms. Button persuasively and credibly testified that Florida Housing considers the most updated guidance to control, and where there is a conflict with Florida Housing's guidance, the least restrictive guidance controls.
Las Brisas participated in the Advance Review Process, and on or about October 17, 2018, Florida Housing approved the Principals Disclosure Form submitted by Las Brisas during the Advance Review Process for an award of housing credits.
Florida Housing, by approving the Las Brisas Principals Disclosure Form, relied on the information provided, and concluded that Las Brisas identified the appropriate type of
principals for an award of housing tax credits and the appropriate type of principals for the corresponding type of entities as provided in rule 67-48.002(94).
Florida Housing's approval of Las Brisas' Principals Disclosure Form during the Advance Review Process did not verify the accuracy of the information contained within the Principals Disclosure Form, but rather, verified that the appropriate type entities were disclosed for the organizational structures listed.
The Principals Disclosure Form submitted with Las Brisas' application was the same document in all respects that was approved by Florida Housing during the Advance Review Process.
Las Brisas' Principals Disclosure Form for the applicant lists Las Brisas Trace, LP, as the applicant entity that is a limited partnership. EHDOC Las Brisas Trace Charitable Corporation is listed as the general partner of the applicant at the first principal disclosure level. Las Brisas also lists two limited partners at the first disclosure level that are not at issue in this proceeding.
At the second principal disclosure level for principals of the applicant, EHDOC Las Brisas Charitable Corporation identified 18 natural persons as principals. Steve Protulis is listed as the executive director.
Christopher M. Shelton, Morton Bahr, Edward L. Romero, Leo W. Gerard, Maria C. Cordone, and Erica Schmelzer are identified as officers. Mary Anderson, Maxine Carter, Eric Dean, Ellen Feingold, Tony Fransetta, Robert Martinez, Lou Moret, John Olsen, Cecil Roberts, Roger Smith, and Thomas P. Villanova are identified as directors.
Because Las Brisas applied as a non-profit, it had to include additional information with its application that other applicants did not. This information was included in Attachment 3 to Las Brisas' application. Among the information included was a list of the names and addresses of the members of the governing board of the non-profit entity.
This list of names and addresses of the governing board of the non-profit entity, EHDOC Las Brisas Trace Charitable Corporation, shows that Steve Protulis, Christopher M. Shelton, Morton Bahr, Edward L. Romero, Leo W. Gerard, Maria C. Cordone, and Erica Schmelzer are also directors.
Thus, within the four corners of the application, Florida Housing could determine with whom it was doing business and what roles those individuals held.
Ms. Button persuasively and credibly testified that Las Brisas' Principals Disclosure Form did not contain any errors and was complete.
As further testified to by Ms. Button, even if Las Brisas' failure to list the multiple roles of its disclosed principals on the Principals Disclosure Form is an error, it is so minor as to constitute a waivable, minor irregularity because Florida Housing has the required information in the application, and there was no competitive advantage to Las Brisas.
Public Housing Authority Question
Question 10 of Exhibit A to the RFA states the following ("the Public Housing Authority Question"):
f. Public Housing Authority as a Principal of the Applicant Entity
Is a Principal of the Applicant Entity a Public Housing Authority and/or an instrumentality of a Public Housing Authority?
Choose an item.
If the Principal of the Applicant Entity is an instrumentality of a Public Housing Authority, state the name of the Public Housing Authority:
Click here to enter text.
In its application, Las Brisas did not provide an answer to the Public Housing Authority Question.
The Public Housing Authority Question is not an eligibility item of the RFA.
The purpose of the Public Housing Authority Question is to cross-reference if applicants are requesting an add-on
bonus ("boost") to the Total Development Cost limit that is available to public housing authorities or instrumentalities of public housing authorities.
Las Brisas clearly indicated in the Development Cost Pro Forma, which was part of its application, that it was not seeking the boost. Although Las Brisas did not answer the Public Housing Authority Question, it did not request a boost to the Total Development Cost Per Unit Limitation for being a public housing authority or an instrumentality of a public housing authority.
Accordingly, the Public Housing Authority Question was simply not applicable to Las Brisas' application.
Las Brisas' failure to answer the Public Housing Authority Question did not result in the omission of any material information or create any competitive advantage.
The persuasive and credible testimony of Ms. Button demonstrates that Las Brisas' failure to answer the Public Housing Authority Question is a waivable, minor irregularity.
CONCLUSIONS OF LAW
DOAH has personal and subject matter jurisdiction in this proceeding pursuant to sections 120.569, 120.57(1), and 120.57(3), Florida Statutes.
Pursuant to section 120.57(3)(f), the burden of proof rests with Ambar as the party opposing the proposed agency
action. State Contracting & Eng'g Corp. v. Dep't of Transp.,
709 So. 2d 607, 609 (Fla. 1st DCA 1998). Ambar must sustain its burden of proof by a preponderance of the evidence. See Dep't
of Transp. v. J.W.C. Co., Inc., 396 So. 2d 778, 787 (Fla. 1st DCA 1981).
Section 120.57(3)(f) provides, in part, as follows:
Unless otherwise provided by statute, the burden of proof shall rest with the party protesting the proposed agency action. In a competitive-procurement protest, other than a rejection of all bids, proposals, or replies, the administrative law judge shall conduct a de novo proceeding to determine whether the agency's proposed action is contrary to the agency's governing statutes, the agency's rules or policies, or the solicitation specifications. The standard of proof for such proceedings shall be whether the proposed agency action was clearly erroneous, contrary to competition, arbitrary, or capricious.
The phrase "de novo proceeding," as used in
section 120.57(3)(f), describes a form of intra-agency review. "The judge may receive evidence, as with any formal hearing under section 120.57(1), but the object of the proceeding is to evaluate the action taken by the agency." State Contracting,
709 So. 2d at 609.
A bid protest proceeding is not simply a record review of the information that was before the agency. Rather, a new evidentiary record based upon the facts established at DOAH is
developed. J.D. v. Fla. Dep't of Child. & Fams., 114 So. 3d
1127, 1132-33 (Fla. 1st DCA 2013).
After determining the relevant facts based on the evidence presented at hearing, Florida Housing's intended action will be upheld unless it is contrary to the governing statutes, the corporation's rules, or the bid specifications. The agency's intended action must also remain undisturbed unless it is clearly erroneous, contrary to competition, arbitrary, or capricious.
The Florida Supreme Court explained the clearly erroneous standard as follows:
A finding of fact is clearly erroneous when, although there is evidence to support such finding, the reviewing court upon reviewing the entire evidence is left with the definite and firm conviction that a mistake has been committed. This standard plainly does not entitle a reviewing court to reverse the finding of the trier of fact simply because it is convinced that it would have decided the case differently. Such a mistake will be found to have occurred where findings are not supported by substantial evidence, are contrary to the clear weight of the evidence, or are based on an erroneous view of the law. Similarly, it has been held that a finding is clearly erroneous where it bears no rational relationship to the supporting evidentiary data, where it is based on a mistake as to the effect of the evidence, or where, although there is evidence which if credible would be substantial, the force and effect of the testimony considered as a whole convinces the court that the finding is so against the great preponderance of the
credible testimony that it does not reflect or represent the truth and right of the case.
Dorsey v. State, 868 So. 2d 1192, 1209 n.16 (Fla. 2003).
The contrary to competition standard precludes actions which, at a minimum: (a) create the appearance of and opportunity for favoritism; (b) erode public confidence that contracts are awarded equitably and economically; (c) cause the procurement process to be genuinely unfair or unreasonably exclusive; or (d) are unethical, dishonest, illegal, or fraudulent. GEO Reentry Servs., LLC v. Dep't of Corr., Case No.
18-0613BID, 2018 Fla. Div. Admin. Hear. LEXIS 253, at *40 (Fla. DOAH April 20, 2018); Care Access PSN, LLC v. Ag. for Health
Care Admin., Case No. 13-4113BID, 2014 Fla. Div. Admin. Hear. LEXIS 3, at *54 (Fla. DOAH Jan. 2, 2014); Phil's Expert Tree
Serv., Inc. v. Broward Cnty. Sch. Bd., Case No. 06-4499BID, 2007 Fla. Div. Admin. Hear. LEXIS 161, at *23 (Fla. DOAH Mar. 19, 2007).
An action is "arbitrary if it is not supported by logic or the necessary facts," and "capricious if it is adopted without thought or reason or is irrational." Hadi v. Lib. Behavioral Health Corp., 927 So. 2d 34, 38-39 (Fla. 1st DCA
2006). If agency action is justifiable under any analysis that a reasonable person would use to reach a decision of similar importance, the decision is neither arbitrary nor capricious.
J.D., 114 So. 3d at 1130. Thus, under the arbitrary or
capricious standard, "an agency is to be subjected only to the most rudimentary command of rationality. The reviewing court is not authorized to examine whether the agency's empirical conclusions have support in substantial evidence." Adam Smith
Enters., Inc. v. Dep't of Envtl. Reg., 553 So. 2d 1260, 1273 (Fla. 1st DCA 1989). Nevertheless,
Id.
the reviewing court must consider whether the agency: (1) has considered all relevant factors; (2) has given actual, good faith consideration to those factors; and (3) has used reason rather than whim to progress from consideration of each of these factors to its final decision.
Moreover, it has long been recognized that "[a]lthough a bid containing a material variance is unacceptable, not every deviation from the invitation to bid is material. It is
only material if it gives the bidder a substantial advantage over the other bidders and thereby restricts or stifles competition." Tropabest Foods, Inc. v. State Dep't of Gen. Servs., 493 So. 2d 50, 52 (Fla. 1st DCA 1986).
Pursuant to rule 67-60.008, Florida Housing has reserved the right to waive minor irregularities in an application. Under this rule, minor irregularities are those errors "that do not result in the omission of any material information; do not create any uncertainty that the terms and
requirements of the competitive solicitation have been met; do not provide a competitive advantage or benefit not enjoyed by other Applicants; and do not adversely impact the interests of the Corporation or the public."
Turning to the merits of the instant case, Florida Housing's proposed action in awarding the housing tax credits to Las Brisas, and not Ambar, is not contrary to the governing statutes, rules, the RFA specifications, clearly erroneous, contrary to competition, arbitrary, or capricious. As detailed above, Las Brisas identified all of the principals on its Principals Disclosure Form and the form was correct and complete. There was no requirement to include the multiple roles of each principal in the Principals Disclosure Form. In any event, Attachment 3 to the application included the multiple roles of each principal. Accordingly, Florida Housing had within the four corners of the application the information to determine what roles each principal held. At most, Las Brisas' failure to identify the multiple roles of its disclosed principals in the Principals Disclosure form is a waivable, minor irregularity. Likewise, Las Brisas' failure to answer the Public Housing Authority Question was irrelevant and a waivable minor irregularity because Las Brisas was not seeking any boost. In sum, Las Brisas is eligible for funding and should not lose any points.
Finally, Ambar's reliance on HTG Village View, LLC v.
Florida Housing Finance Corporation, Case No. 18-2156BID, 2018 Fla. Div. Adm. Hear. LEXIS 936 (Fla. DOAH July 27, 2018)(Final Order entered September 18, 2018), and Blue Broadway, LLC v.
Florida Housing Finance Corporation, Case No. 17-3273BID, 2017
Fla. Div. Adm. Hear. LEXIS 528(Fla. DOAH August 29, 2017)(Final Order entered September 22, 2017) are misplaced. Neither of these cases involved the particular situation presented in the instant case, where all principals were, in fact, disclosed.
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Florida Housing Finance Corporation enter a final order dismissing the protest of Ambar Riverview, Ltd., and award housing tax credits to Las Brisas Trace, LP.
DONE AND ENTERED this 21st day of May, 2019, in Tallahassee, Leon County, Florida.
DARREN A. SCHWARTZ
Filed with the Clerk of the Division of Administrative Hearings this 21st day of May, 2019.
Hugh R. Brown, General Counsel Florida Housing Finance Corporation
Manson Bolves Donaldson Varn, P.A.
Michael P. Donaldson, Esquire Carlton Fields Jorden Burt, P.A.
215 South Monroe Street, Suite 500 Post Office Drawer 190 Tallahassee, Florida 32302-0190 (eServed)
Michael George Maida, Esquire Michael G. Maida, P.A.
Craig D. Varn, Esquire Manson Bolves Donaldson Varn
Seann M. Frazier, Esquire
Hugh R. Brown, General Counsel Florida Housing Finance Company
10 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.
