The Issue The threshold issue in this case is whether the decisions giving rise to the dispute, which concern the allocation and disbursement of funds appropriated to Respondent by the legislature and thus involve the preparation or modification of the agency's budget, are subject to quasi-judicial adjudication under the Administrative Procedure Act. If the Division of Administrative Hearings were possessed of subject matter jurisdiction, then the issues would be whether Respondent is estopped from implementing its intended decisions to "de- obligate" itself from preliminary commitments to provide low- interest loans to several projects approved for funding under the Community Workforce Housing Innovation Pilot Program; and whether such intended decisions would constitute breaches of contract or otherwise be erroneous, arbitrary, capricious, or abuses of the agency's discretion.
Findings Of Fact Petitioners Pasco CWHIP Partners, LLC ("Pasco Partners"); Legacy Pointe, Inc. ("Legacy"); Villa Capri, Inc. ("Villa Capri"); Prime Homebuilders ("Prime"); and MDG Capital Corporation ("MDG") (collectively, "Petitioners"), are Florida corporations authorized to do business in Florida. Each is a developer whose business activities include building affordable housing. The Florida Housing Finance Corporation ("FHFC") is a public corporation organized under Chapter 420, Florida Statutes, to implement and administer various affordable housing programs, including the Community Workforce Housing Innovation Pilot Program ("CWHIP"). The Florida Legislature created CWHIP in 2006 to subsidize the cost of housing for lower income workers performing "essential services." Under CWHIP, FHFC is authorized to lend up to $5 million to a developer for the construction or rehabilitation of housing in an eligible area for essential services personnel. Because construction costs for workforce housing developments typically exceed $5 million, developers usually must obtain additional funding from sources other than CWHIP to cover their remaining development costs. In 2007, the legislature appropriated $62.4 million for CWHIP and authorized FHFC to allocate these funds on a competitive basis to "public-private" partnerships seeking to build affordable housing for essential services personnel.1 On December 31, 2007, FHFC began soliciting applications for participation in CWHIP. Petitioners submitted their respective applications to FHFC on or around January 29, 2008. FHFC reviewed the applications and graded each of them on a point scale under which a maximum of 200 points per application were available; preliminary scores and comments were released on March 4, 2008. FHFC thereafter provided applicants the opportunity to cure any deficiencies in their applications and thereby improve their scores. Petitioners submitted revised applications on or around April 18, 2008. FHFC evaluated the revised applications and determined each applicant's final score. The applications were then ranked, from highest to lowest score. The top-ranked applicant was first in line to be offered the chance to take out a CWHIP loan, followed by the others in descending order to the extent of available funds. Applicants who ranked below the cut-off for potential funding were placed on a wait list. If, as sometimes happens, an applicant in line for funding were to withdraw from CWHIP or fail for some other reason to complete the process leading to the disbursement of loan proceeds, the highest-ranked applicant on the wait list would "move up" to the "funded list." FHFC issued the final scores and ranking of applicants in early May 2006. Petitioners each had a project that made the cut for potential CWHIP funding.2 Some developers challenged the scoring of applications, and the ensuing administrative proceedings slowed the award process. This administrative litigation ended on or around November 6, 2008, after the parties agreed upon a settlement of the dispute. On or about November 12, 2008, FHFC issued preliminary commitment letters offering low-interest CWHIP loans to Pasco Partners, Legacy, Villa Capri, Prime (for its Village at Portofino Meadows project), and MDG. Each preliminary commitment was contingent upon: Borrower and Development meeting all requirements of Rule Chapter 67-58, FAC, and all other applicable state and FHFC requirements; and A positive credit underwriting recommendation; and Final approval of the credit underwriting report by the Florida Housing Board of Directors. These commitment letters constituted the necessary approval for each of the Petitioners to move forward in credit underwriting, which is the process whereby underwriters whom FHFC retains under contract verify the accuracy of the information contained in an applicant's application and examine such materials as market studies, engineering reports, business records, and pro forma financial statements to determine the project's likelihood of success. Once a credit underwriter completes his analysis of an applicant's project, the underwriter submits a draft report and recommendation to FHFC, which, in turn, forwards a copy of the draft report and recommendation to the applicant. Both the applicant and FHFC then have an opportunity to submit comments regarding the draft report and recommendation to the credit underwriter. After that, the credit underwriter revises the draft if he is so inclined and issues a final report and recommendation to FHFC. Upon receipt of the credit underwriter's final report and recommendation, FHFC forwards the document to its Board of Directors for approval. Of the approximately 1,200 projects that have undergone credit underwriting for the purpose of receiving funding through FHFC, all but a few have received a favorable recommendation from the underwriter and ultimately been approved for funding. Occasionally a developer will withdraw its application if problems arise during underwriting, but even this is, historically speaking, a relatively uncommon outcome. Thus, upon receiving their respective preliminary commitment letters, Petitioners could reasonably anticipate, based on FHFC's past performance, that their projects, in the end, would receive CWHIP financing, notwithstanding the contingencies that remained to be satisfied. There is no persuasive evidence, however, that FHFC promised Petitioners, as they allege, either that the credit underwriting process would never be interrupted, or that CWHIP financing would necessarily be available for those developers whose projects successfully completed underwriting. While Petitioners, respectively, expended money and time as credit underwriting proceeded, the reasonable inference, which the undersigned draws, is that they incurred such costs, not in reliance upon any false promises or material misrepresentations allegedly made by FHFC, but rather because a favorable credit underwriting recommendation was a necessary (though not sufficient) condition of being awarded a firm loan commitment. On January 15, 2009, the Florida Legislature, meeting in Special Session, enacted legislation designed to close a revenue shortfall in the budget for the 2008-2009 fiscal year. Among the cuts that the legislature made to balance the budget was the following: The unexpended balance of funds appropriated by the Legislature to the Florida Housing Finance Corporation in the amount of $190,000,000 shall be returned to the State treasury for deposit into the General Revenue Fund before June 1, 2009. In order to implement this section, and to the maximum extent feasible, the Florida Housing Finance Corporation shall first reduce unexpended funds allocated by the corporation that increase new housing construction. 2009 Fla. Laws ch. 2009-1 § 47. Because the legislature chose not to make targeted cuts affecting specific programs, it fell to FHFC would to decide which individual projects would lose funding, and which would not. The legislative mandate created a constant-sum situation concerning FHFC's budget, meaning that, regardless of how FHFC decided to reallocate the funds which remained at its disposal, all of the cuts to individual programs needed to total $190 million in the aggregate. Thus, deeper cuts to Program A would leave more money for other programs, while sparing Program B would require greater losses for other programs. In light of this situation, FHFC could not make a decision regarding one program, such as CWHIP, without considering the effect of that decision on all the other programs in FHFC's portfolio: a cut (or not) here affected what could be done there. The legislative de-appropriation of funds then in FHFC's hands required, in short, that FHFC modify its entire budget to account for the loss. To enable FHFC to return $190 million to the state treasury, the legislature directed that FHFC adopt emergency rules pursuant to the following grant of authority: In order to ensure that the funds transferred by [special appropriations legislation] are available, the Florida Housing Finance Corporation shall adopt emergency rules pursuant to s. 120.54, Florida Statutes. The Legislature finds that emergency rules adopted pursuant to this section meet the health, safety, and welfare requirements of s. 120.54(4), Florida Statutes. The Legislature finds that such emergency rulemaking power is necessitated by the immediate danger to the preservation of the rights and welfare of the people and is immediately necessary in order to implement the action of the Legislature to address the revenue shortfall of the 2008-2009 fiscal year. Therefore, in adopting such emergency rules, the corporation need not publish the facts, reasons, and findings required by s. 120.54(4)(a)3., Florida Statutes. Emergency rules adopted under this section are exempt from s. 120.54(4)(c), Florida Statutes, and shall remain in effect for 180 days. 2009 Fla. Laws ch. 2009-2 § 12. The governor signed the special appropriations bills into law on January 27, 2009. At that time, FHFC began the process of promulgating emergency rules. FHFC also informed its underwriters that FHFC's board would not consider any credit underwriting reports at its March 2009 board meeting. Although FHFC did not instruct the underwriters to stop evaluating Petitioners' projects, the looming reductions in allocations, coupled with the board's decision to suspend the review of credit reports, effectively (and not surprisingly) brought credit underwriting to a standstill. Petitioners contend that FHFC deliberately intervened in the credit underwriting process for the purpose of preventing Petitioners from satisfying the conditions of their preliminary commitment letters, so that their projects, lacking firm loan commitments, would be low-hanging fruit when the time came for picking the deals that would not receive funding due to FHFC's obligation to return $190 million to the state treasury. The evidence, however, does not support a finding to this effect. The decision of FHFC's board to postpone the review of new credit underwriting reports while emergency rules for drastically reducing allocations were being drafted was not intended, the undersigned infers, to prejudice Petitioners, but to preserve the status quo ante pending the modification of FHFC's budget in accordance with the legislative mandate. Indeed, given that FHFC faced the imminent prospect of involuntarily relinquishing approximately 40 percent of the funds then available for allocation to the various programs under FHFC's jurisdiction, it would have been imprudent to proceed at full speed with credit underwriting for projects in the pipeline, as if nothing had changed. At its March 13, 2009, meeting, FHFC's board adopted Emergency Rules 67ER09-1 through 67ER09-5, Florida Administrative Code (the "Emergency Rules"), whose stated purpose was "to establish procedures by which [FHFC would] de- obligate the unexpended balance of funds [previously] appropriated by the Legislature " As used in the Emergency Rules, the term "unexpended" referred, among other things, to funds previously awarded that, "as of January 27, 2009, [had] not been previously withdrawn or de-obligated . . . and [for which] the Applicant [did] not have a Valid Firm Commitment and loan closing [had] not yet occurred." See Fla. Admin. Code R. 67ER09-2(29). The term "Valid Firm Commitment" was defined in the Emergency Rules to mean: a commitment issued by the [FHFC] to an Applicant following the Board's approval of the credit underwriting report for the Applicant's proposed Development which has been accepted by the Applicant and subsequent to such acceptance there have been no material, adverse changes in the financing, condition, structure or ownership of the Applicant or the proposed Development, or in any information provided to the [FHFC] or its Credit Underwriter with respect to the Applicant or the proposed Development. See Fla. Admin. Code R. 67ER09-2(33). There is no dispute concerning that fact that, as of January 27, 2009, none of the Petitioners had received a valid firm commitment or closed a loan transaction. There is, accordingly, no dispute regarding the fact that the funds which FHFC had committed preliminarily to lend Petitioners in connection with their respective developments constituted "unexpended" funds under the pertinent (and undisputed) provisions of the Emergency Rules, which were quoted above. In the Emergency Rules, FHFC set forth its decisions regarding the reallocation of funds at its disposal. Pertinent to this case are the following provisions: To facilitate the transfer and return of the appropriated funding, as required by [the special appropriations bills], the [FHFC] shall: * * * Return $190,000,000 to the Treasury of the State of Florida, as required by [law]. . . . The [FHFC] shall de-obligate Unexpended Funding from the following Corporation programs, in the following order, until such dollar amount is reached: All Developments awarded CWHIP Program funding, except for [a few projects not at issue here.] * * * See Fla. Admin. Code R. 67ER09-3. On April 24, 2009, FHFC gave written notice to each of the Petitioners that FHFC was "de-obligating" itself from the preliminary commitments that had been made concerning their respective CWHIP developments. On or about June 1, 2009, FHFC returned the de- appropriated funds, a sum of $190 million, to the state treasury. As a result of the required modification of FHFC's budget, 47 deals lost funding, including 16 CWHIP developments to which $83.6 million had been preliminarily committed for new housing construction.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that FHFC enter a Final Order dismissing these consolidated cases for lack of jurisdiction. DONE AND ENTERED this 18th day of February, 2010, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of February, 2010.
The Issue The issue in this case is whether Florida Housing's proposed action to deem Madison Landing eligible for an award of housing tax credit funds, as contemplated under Request for Applications 2020-202 Housing Credit Financing for Affordable Housing Developments Located in Broward, Duval, Hillsborough, Orange, Palm Beach and Pinellas Counties ("the 2020 RFA"), is contrary to governing statutes, rules or policies, or the 2020 RFA specifications. The standard of proof is whether Florida Housing's proposed action is clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact Florida Housing is a public corporation organized pursuant to Chapter 420, Part V, Florida Statutes, whose address is 227 North Bronough Street, Suite 5000, Tallahassee, Florida 32301, and for the purposes of these proceedings, an agency of the State of Florida. Madison Landing is an Applicant requesting an allocation of $1,950,000 in competitive housing credits in in the 2020 RFA. Its application, 2021-021C, was deemed eligible, but was not selected for funding by Florida Housing. Madison Park is an Applicant requesting an allocation of $2,881,960 in competitive housing credits in the 2020 RFA. Its application, 2021-004C, was deemed eligible, but was not selected for funding by Florida Housing. WRDG is an Applicant requesting an allocation of $2,375,000 in competitive housing credits in the 2020 RFA. Its application, 2021-025C, was deemed eligible and was preliminarily selected for funding by Florida Housing. Florida Housing administers various affordable housing programs, including the Housing Credit Program, pursuant to Section 42 of the Internal Revenue Code (the "IRC" or "the Code") and section 420.5099, under which Florida Housing is designated as the Housing Credit agency for the State of Florida within the meaning of Section 42(h)(7)(A) of the IRC, and Florida Administrative Code Chapters 67-48 and 67-60. Florida Housing has established, by rule, a competitive solicitation process known as the Request for Applications ("RFA") to assess the relative merits of proposed developments, pursuant to chapters 67-48 and 67-60. An RFA sets forth the information required to be provided by an Applicant, which includes a general description of the type of projects that will be considered eligible for funding and delineates the submission requirements. While there are numerous references to Florida Housing's rules throughout the RFA, RFAs themselves are not adopted or incorporated by rule. Florida Housing issues many RFAs each year. Although an issued RFA may be similar to these issued in previous years, each RFA is unique. The RFA process begins when Florida Housing requests the Florida Housing Board of Directors ("the Board") to approve Florida Housing's plan for allocating its resources through the various RFAs. If the plan is approved by the Board, Florida Housing begins working on each individual RFA. Florida Housing posts draft documents to its website for public review, such as a draft of the RFA, and holds a workshop in which the RFA is discussed in detail, highlighting language that changed from the previous year. The public is given the opportunity to ask questions and submit written comments for further suggestions and/or additional edits prior to the RFA's issuance. Marisa Button, Director of Multifamily Programs for Florida Housing, credibly and persuasively testified that Questions and Answers are provided as guidance, but do not provide new requirements to override the terms of an RFA. In the event of an inconsistency between Questions and Answers and another form of guidance for applicants, Florida Housing has maintained the position that the least restrictive guidance controls. Rule 67-60.006 provides, in pertinent part, that "[t]he failure of an Applicant to supply required information in connection with any competitive solicitation pursuant to this rule chapter shall be grounds for a determination of non-responsiveness with respect to its Application." By applying, each Applicant certifies that: Proposed Developments funded under this RFA will be subject to the requirements of the RFA, inclusive of all Exhibits, the Application requirements outlined in Rule Chapter 67-60, F.A.C., the requirements outlined in Rule Chapter 67-48, F.A.C. and the Compliance requirements of Rule Chapter 67-53, F.A.C. On August 26, 2020, Florida Housing issued the 2020 RFA, proposing to provide an estimated $18,669,520 of Housing Credit Financing for Affordable Housing Developments Located in Broward, Duval, Hillsborough, Orange, Palm Beach, and Pinellas Counties. Modifications to the 2020 RFA were made on September 11 and October 12, 2020. The Application Deadline for the 2020 RFA was October 20, 2020. On or about October 20, 2020, 35 applications were submitted in response to the 2020 RFA. A Review Committee was appointed to review the applications and make recommendations to the Board. The Review Committee found 34 applications eligible and one application ineligible. Through the ranking and selection process outlined in the 2020 RFA, eight applications were recommended for funding. In accordance with the funding selection process set forth in the 2020 RFA, one application was selected from each of Duval, Palm Beach, Pinellas, Hillsborough, and Orange counties; two applications were selected from Broward County; and one application (WRDG) was selected from any of these counties. On December 4, 2020, the Board approved these recommendations. On December 17, 2020, Madison Landing timely filed a Petition for Formal Administrative Proceedings, which was referred to DOAH and assigned Case No. 21-0146BID. This petition challenged the eligibility of both WRDG and MHP FL II, LLC. On January 13, 2021, Madison Landing dismissed all of its allegations against MHP FL II, LLC. On December 17, 2020, Madison Park timely filed a Petition for Formal Administrative Proceedings, which was referred to DOAH and assigned Case No. 21-0147BID. An amended petition was filed on January 13, 2021. This petition challenged the eligibility of both WRDG and Madison Landing. On January 26, 2021, all parties entered into a Stipulation for Entry of Findings of Fact in which WRDG conceded that its application should have been found ineligible. WRDG is ineligible for funding under the 2020 RFA. With WRDG ineligible for funding, Madison Landing would be selected for funding in place of WRDG. If both WRDG and Madison Landing were found to be ineligible for funding, Madison Park would be selected for funding in place of WRDG and Madison Landing. No other Applicant selected for funding will be impacted regardless of the outcome of this case. No challenges were made to the terms of the 2020 RFA. Madison Landing's application includes an executed Applicant Certification and Acknowledgment Form, which provides, "The Applicant, the Developer and all Principals are in good standing among all other state agencies and have not been prohibited from applying for funding." The phrase "good standing among all other state agencies" is not defined; and no evidence was presented as to the definitive meaning of the phrase. No evidence was presented that Madison Landing's Principals are not in good standing with any state agency or have been prohibited from applying for funding. The 2020 RFA at Section Four A.3.a. provides that Applicants must disclose the name of the Applicant entity and provide evidence that it is legally formed: (2) The Applicant must be a legally formed entity [i.e., limited partnership, limited liability company, etc.] qualified to do business in the state of Florida as of the Application Deadline. Include, as Attachment 2 to Exhibit A, evidence from the Florida Department of State, Division of Corporations, that the Applicant satisfies the foregoing requirements. Such evidence may be in the form of a certificate of status or other reasonably reliable information or documentation issued, published or made available by the Florida Department of State, Division of Corporations. Rule 67-48.002(9) (6/23/2020), defines "Applicant" as follows: (9) "Applicant" means any person or legal entity of the type and with the management and ownership structure described herein that is seeking a loan or funding from the Corporation by submitting an Application or responding to a competitive solicitation pursuant to rule Chapter 67-60, F.A.C., for one or more of the Corporation's programs. For purposes of Rules 67-48.0105, 67-48.0205 and 67- 48.031, F.A.C., Applicant also includes any assigns or successors in interest of the Applicant. Unless otherwise stated in a competitive solicitation, as used herein, a 'legal entity' means a legally formed corporation, limited partnership or limited liability company. The 2020 RFA at Section Four A.3.c. provides that Applicants must disclose Principals of both the Applicant and Developer entities. The 2020 RFA provides in pertinent part: c. Principals Disclosure for the Applicant and for each Developer (5 points) (1) Eligibility Requirements To meet the submission requirements, upload the Principals of the Applicant and Developer(s) Disclosure Form (Form Rev. 05-2019) ("Principals Disclosure Form") as outlined in Section Three above. Prior versions of the Principal Disclosure Form will not be accepted. To meet eligibility requirements, the Principals Disclosure Form must identify, pursuant to Subsections 67-48.002(94), 67-48.0075(8) and 67- 48.0075(9), F.A.C., the Principals of the Applicant and Developer(s) as of the Application Deadline. 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. For Housing Credits, the investor limited partner of an Applicant limited partnership or the investor member of an Applicant limited liability company must be identified on the Principal Disclosure Form. Rule 67-48.002(94) defines "Principal" as follows: (94) "Principal" means: For a corporation, each officer, director, executive director, and shareholder of the corporation. For a limited partnership, each general partner, and each limited partner of the limited partnership. For a limited liability company, each manager and each member of the limited liability company. For a trust, each trustee of the trust and all beneficiaries of majority age (i.e., 18 years of age) as of the Application Deadline. Page 10 of 22. For a Public Housing Authority, each officer, director, commissioner, and executive director of the Authority. The requirement to provide evidence that the Applicant is a legally formed entity, as well as the requirement to provide a Principals for Applicant and Developer(s) Disclosure Form, are identified as "Eligibility Items." Section Five A.1. of the 2020 RFA states that "only Applications that meet all of the following Eligibility Items will be eligible for funding and considered for funding selection." Madison Landing submitted Principals of the Applicant and Developer(s) Disclosure Form(s) with its application. Both forms were approved during the Advance Review Process. On the Principals of the Applicant form, Madison Landing II, LLC, was identified as the Applicant entity. The Principals of the Applicant entity were identified as Patrick E. Law, Manager; Madison Landing II Apartments, LLC, Non-Investor Member; and Patrick E. Law, Investor Member. Madison Landing II Apartments, LLC, filed Articles of Organization for Florida Limited Liability Company with the Florida Division of Corporations on January 5, 2021, with an effective date of December 31, 2020. The 2020 RFA requires that the Applicant demonstrate that it is a legally formed entity as of the Application Deadline; however, there is no explicit requirement in the 2020 RFA that each Principal of the Applicant demonstrate that it is a legally formed entity as of the Application Deadline. Ms. Button testified that her initial view was that the failure of Madison Landing's Principal, Madison Landing II Apartments, LLC, to incorporate by the application deadline should render the application ineligible. However, upon further research, she changed her position, believing that Florida Housing was precedentially bound by a previous final order, which found that an application was eligible under similar legal and factual circumstances. The previous case, on which Florida Housing relied, was decided before Florida Housing adopted the current RFA procedures for awarding funding. Ms. Button testified, however, that while some of the processes followed during the Universal Cycle, in place at that time, were different than the RFA process, the requirements for disclosure of Principals were essentially the same. Florida Housing allows interested parties to submit written questions to be answered by Florida Housing staff for each RFA that is issued. The Question-Answer period is referenced specifically within each RFA. The following Question and Answer are posted on Florida Housing's website for RFA 2018-111: Question 12: Do the entities listed on the Principal Disclosure Form have to be active as of the stamped "Approved" date or as of the Application Deadline? Answer: As of the Application Deadline. The Applicant may upload a Principals Disclosure Form stamped "Approved" during the Advance Review Process provided (a) it is still correct as of the Application Deadline, (b) it was approved for the type of funding being requested (i.e., Housing Credits or Non-Housing Credits) The same Question and Answer above are on Florida Housing's website for RFA 2018-110; RFA 2018-112; and RFA 2018-113. The same Question and Answer, however, do not appear in Questions and Answers for the 2020 RFA at issue in this case. Although Questions and Answers from past RFAs remain on the Florida Housing website, they are discrete to the specific RFA for which they were issued. Rule 67-48.002(9) (7/2018) defines Applicant as follows: (9) "Applicant" means any person or legal entity of the type and with the management and ownership structure described herein that is seeking a loan or funding from the Corporation by submitting an Application or responding to a competitive solicitation pursuant to rule chapter 67-60, F.A.C., for one or more of the Corporations programs. For purposes of rules 67-48.0105. 67-48.0205 and 67- 48.031, F.A.C., Applicant also includes any assigns or successors in interest of the Applicant. Unless otherwise stated in a competitive solicitation, as used herein, a legal entity means a legally formed corporation, limited partnership or limited liability company with a management and ownership structure that consists exclusively of all natural persons by the third principal disclosure level. For Applicants seeking Housing Credits, the Housing Credits Syndicator/Housing Credit investor need only be disclosed at the first principal level and no other disclosure is required. The terms "first principal disclosure level" and "third principal disclosure level" have the meanings attributed to them in the definition of "Principal." Rule 67-48.002(9) (11/2011) defines Applicant as follows: (9) "Applicant" means any person or legally formed entity that is seeking a loan or funding from the Corporation by submitting an Application or responding to a request for proposal for one or more of the Corporation's programs. For purposes of Rules 67-48.0105, 67-48.0205 and 67-48031, F.A.C., Applicants also includes any assigns or successors in interest of the Applicant. Madison Park argues that Madison Landing's Principal, Madison Landing II Apartments, LLC, did not demonstrate that it was a legally- formed entity as of the Application Deadline, and therefore, Madison Landing's Principal Disclosure Form did not satisfy the 2020 RFA's requirements. Madison Park argues that Madison Landing's application should be deemed ineligible for funding as a result. Based on the weight of the credible evidence and the language of the 2020 RFA and the governing law, the undersigned finds that Florida Housing did not contravene the 2020 RFA, or any other applicable authority, through the process by which it determined that Madison Landing's application was eligible for the award.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Florida Housing Finance Corporation enter a final order: (1) finding the application of WRDG ineligible for funding; (2) finding the application of Madison Landing eligible for funding; and (3) dismissing the protest of Madison Park. DONE AND ENTERED this 29th day of March, 2021, in Tallahassee, Leon County, Florida. COPIES FURNISHED: Hugh R. Brown, General Counsel Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1329 Christopher Dale McGuire, Esquire Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1329 Maureen McCarthy Daughton, Esquire Maureen McCarthy Daughton, LLC S BRITTANY O. FINKBEINER Administrative Law Judge 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of March, 2021. J. Timothy Schulte, Esquire Zimmerman, Kiser & Sutcliffe, P.A. 315 East Robinson Street Post Office Box 3000 (32802) Orlando, Florida 32801 Corporation Clerk Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1329 1400 Village Square Boulevard, Suite 3-231 Tallahassee, Florida 32312
The Issue Whether Respondent, Florida Housing Finance Corporation’s ("Florida Housing") intended action to award housing tax credit funding to Intervenors Westside Phase, I, LLLP ("Westside"), HTG Edgewood, Ltd. ("HTG Edgewood"), Diplomat South, LLC ("Diplomat"), and Tranquility at Milton, LLC ("Tranquility"), under Request for Applications 2019-113 Housing Credit Financing for Affordable Housing Developments Located in Medium and Small Counties (the "RFA"), is contrary to governing statutes, rules, the RFA specifications, and clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact Florida Housing is a public corporation created pursuant to section 420.504, Florida Statutes. Its 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 "tax credits" or "housing 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 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 and other funding by means of a request 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 competitive funding through the bid protest provisions of section 120.57(3), Florida Statutes. 1 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 1 A request for application is equivalent to a "request for proposal" as indicated in rule 67- 60.009(3). 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 August 20, 2019, and responses were initially due October 29, 2019. The RFA was modified on September 10, 2019, and the application deadline was extended to November 5, 2019. No challenges were made to the terms of the RFA. Through the RFA, Florida Housing expects to award up to an estimated $14,805,028 of housing tax credits to proposed developments in medium counties and up to an estimated $1,413,414 of housing credits to proposed developments in small counties. Florida Housing received 184 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 169 applications eligible and 15 applications ineligible. Through the ranking and selection process outlined in the RFA, 11 applications were preliminarily recommended for funding. The review committee developed charts listing its eligibility and funding recommendations to be presented to the Board. On March 6, 2020, the Board met and considered the recommendations of the review committee. Also, on March 6, 2020, at approximately 9:35 a.m., Petitioners and all other applicants received notice that the Board 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 Board approved scoring results and one identifying the applications which Florida Housing proposed to fund. In the March 6, 2020, posting, Florida Housing announced its intention to award funding to 11 applicants, including Westside, HTG Edgewood, Diplomat, and Tranquility. Petitioners timely filed notices of protest and petitions for formal administrative proceedings, and Intervenors 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 summary of the eligibility items is available in section 5.A.1., beginning on page 64 of the RFA. Only applications that meet all the eligibility items will be eligible for funding and considered for funding selection. There were two total point items scored in this RFA. Applicants could receive five points for Submission of Principals Disclosure Form, stamped by the Corporation as "Pre-Approved," and five points for Development Experience Withdrawal Disincentive, for a total application score of up to ten points. The RFA has three funding goals: The Corporation has a goal to fund four Medium County Developments that qualify for the Local Government Areas of Opportunity Funding Goal outlined in Section Four A.11.a. of the RFA. The Corporation has a goal to fund two Developments with a Demographic commitment of Family that select and qualify for the Geographic Areas of Opportunity/SADDA Goal outlined in Section Four A.11.b. of the RFA. The Corporation has a goal to fund one (1) Development that qualifies for the Local Community Revitalization Initiative Goal outlined in Section Four A.11.c. of the RFA. *Note: During the Funding Selection Process outlined below, Developments selected for these goals will only count toward one goal. As part of the funding selection process, the RFA starts with the application sorting order on page 68. 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.10.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 finally, by lottery number, resulting in the lowest lottery number receiving preference. The RFA includes a Funding Test where small county applications will be selected for funding only if there is enough small county funding available to fully fund the eligible housing credit request amount, and medium county applications will be selected for funding only if there is enough medium county funding available to fully fund the eligible housing credit request amount. The RFA outlines a specific County’s Award Tally: As each application is selected for tentative funding, the county where the proposed Development is located will have one Application credited towards the County’s Award Tally. The Corporation will prioritize eligible unfunded Applications that meet the Funding Test and are located within counties that have the lowest County Award Tally above other eligible unfunded Applications with a higher County Award Tally that also meet the Funding Test, even if the Applications with a higher County Award Tally are higher ranked. According to the RFA, the funding selection process is as follows: The first Application selected for funding will be the highest ranking eligible Applications that qualifies for the Local Community Revitalization Initiative Goal. The next four Applications selected for funding will be the highest ranking eligible Medium County Applications that qualify for the Local Government Areas of Opportunity Funding Goal, subject to the Funding Test and the County Award Tally. The next two Applications selected for funding will be the highest ranking eligible Family Applications that qualify for the Geographic Areas of Opportunity/HUD-designated SADDA Goal, subject to the Funding Test and the County Award Tally. The next Applications selected for funding will be the highest ranking eligible unfunded Small County Applications that (i) can meet the Small County Funding Test and (ii) have a County Award Tally that is less than or equal to any other eligible unfunded Small County Applications. If Small County funding remains and no unfunded eligible Small County Application can meet the Small County Funding Test, no further Small County Applications will be selected and the remaining Small County funding will be added to the Medium County funding amount. The next Application(s) selected for funding will be the highest ranking eligible unfunded Medium County Applications that (i) can meet the Medium County Funding Test and (ii) have a County Award Tally that is less than or equal to any other eligible unfunded Medium County Applications. If Medium County funding remains and no unfunded eligible Medium County Application can meet the Medium County Funding Test, no further Applications will be selected and the 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 declining its invitation to enter credit underwriting, or an Applicant’s inability to satisfy a requirement outlined in this RFA, will be distributed as approved by the Board. All 184 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. HTG Edgewood’s Application (DOAH Case No. 20-1778BID) During scoring, Florida Housing determined that the HTG Edgewood application was eligible and, pursuant to the terms of the RFA, selected HTG Edgewood for funding. HTG Edgewood, Florida Housing, and Rochester now agree that HTG Edgewood’s application is ineligible for consideration for funding and the application of Rochester is eligible for funding. Accordingly, HTG Edgewood, Florida Housing, and Rochester agree that Florida Housing should deem the HTG Edgewood application ineligible for funding and Rochester’s application eligible for funding. Diplomat’s Application (DOAH Case No. 20-1779BID) During scoring, Florida Housing deemed the Diplomat application eligible and, pursuant to the terms of the RFA, preliminarily selected Diplomat for funding. Diplomat and Madison Square now agree that Diplomat is ineligible for funding. Florida Housing does not contest Diplomat’s admission of ineligibility. Madison Square, Diplomat, and Florida Housing agree that Madison Square is eligible for funding. Tranquility’s Application (DOAH Case No. 20-1780BID) Florida Housing deemed the Tranquility application eligible for funding, and pursuant to the terms of the RFA, Tranquility was selected for preliminary funding. Tranquility’s Principals Disclosure Form Madison Oaks contests Florida Housing’s preliminary selection of Tranquility for an award of housing tax credits. In its challenge, Madison Oaks argues that Tranquility failed to correctly complete its Principals Disclosure Form by not identifying the multiple roles of its disclosed principal. Specifically, Madison Oaks argues that Tranquility failed to list Tranquility Milton Manager, LLC, which is disclosed as a manager, as a non- investor member as well. Accordingly, Madison Oaks contends Tranquility is not eligible or should lose five points. The purpose of the Principals Disclosure Form is to allow Florida Housing to track an entity’s past and future dealings with Florida Housing so that Florida Housing is aware of the entity with which it is dealing. In regard to principal disclosure, the RFA states, in relevant part: c. Principals Disclosure for the Applicant and for each Developer (5 points) Eligibility Requirements To meet the submission requirements, the Applicant must upload the Principals of the Applicant and Developer(s) Disclosure Form (Form Rev. 05-2019)("Principals Disclosure Form") with the Application and Development Cost Pro Forma, as outlined in Section Three above. Prior versions of the Principal Disclosure Form will not be accepted. The Principals Disclosure Form must identify, pursuant to subsections 67-48.002(94), 67- 48.0075(8) and 67-48.0075(9), the Principals of the Applicant and Developer(s) as of the Application Deadline. The investor limited partner of an Applicant limited partnership or the investor member of an Applicant limited liability company investor must be identified. 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. Point Item Applicants will receive 5 points if the uploaded Principal Disclosure Form was stamped "Approved" during the Advance Review Process. The Advance Review Process for Disclosure of Applicant and Developer Principals is available on the RFA Website 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. The RFA website provides guidance and instructions to assist applicants in completing the principal disclosure. The instructions state: "List the name of each Member of the Applicant Limited Liability Company and label each as either non-investor Member or investor Member (i.e., equity provider and/or placeholder), as applicable." The RFA website guidance and instructions further provides Frequently Asked Questions ("FAQ’s") concerning principal disclosures. FAQ number 4 states: Q: If the Applicant entity is a member managed limited liability company, how should it be reflected on the form since there is no "member-manager" choice at the First Principal Disclosure Level? A: Each member-manager entity/person should be listed twice—once as a non-investor member and once as a manger. If Housing Credits are being requested, the investor-member(s) must also be listed in order for the form to be approved for a Housing Credit Application. On its Principals Disclosure Form, Tranquility listed two entities at the first principal disclosure level: Tranquility Milton Manager, LLC, identified as a manager of the applicant and Timshel Partners, LLC, identified as an investor member of the applicant. However, Tranquility failed to identify the dual role of Tranquility Milton Manager, LLC, as a non- investor member in addition to its disclosed role as a manger. Nevertheless, Tranquility’s equity proposal letter submitted as part of its application identified Tranquility Milton Manager, LLC, as a member of the LLC because according to the equity proposal, Tranquility Milton Manager, LLC, would retain a .01% ownership interest in the company. Thus, the role of Tranquility Milton Manager, LLC, as a member is available within Tranquility’s application. Tranquility participated in Florida Housing’s Advance Review Process, and on October 17, 2019, Florida Housing approved the Principals Disclosure Form submitted by Tranquility during the Advance Review Process for an award of housing credits. During scoring, Tranquility received five points for having its Principals Disclosure Form stamped "Approved" by Florida Housing. Tranquility’s Principals Disclosure Form met the eligibility requirements of the RFA and Tranquility is entitled to the five points. In addition, Ms. Button persuasively and credibly testified that even if Tranquility’s failure to list the dual role of its disclosed principal on the Principals Disclosure Form is an error, it is so minor as to constitute a waivable, minor irregularity. As detailed above, Tranquility Milton Manager, LLC, was specifically designated as a manager on the form and information identifying Tranquility Milton Manager, LLC’s, additional role as a member is included in the equity proposal letter submitted with the application. Madison Oak’s Application (DOAH Case No. 20-1779BID) Madison Oaks’ application was deemed eligible for funding, but pursuant to the terms of the RFA, Madison Oaks was not selected for preliminary funding. Madison Oaks Site Control Certification Florida Housing and Tranquility now argue that Madison Oaks failed to demonstrate site control. As an eligibility item, the RFA requires applicants to demonstrate site control by providing a properly completed and executed Florida Housing Finance Corporation Site Control Certification form ("Site Control Form"). For the Site Control Form to be considered complete, the applicant must attach documentation demonstrating that it is a party to an eligible contract or lease or is the owner of the subject property. Applicants can demonstrate site control by providing documentation that meets the requirements in the RFA for an eligible contract, deed or certificate of title, or a lease. An eligible contract must meet all of the following conditions: It must have a term that does not expire before April 30, 2020 or that contains extension options exercisable by the purchaser and conditioned solely upon payment of additional monies which, if exercised, would extend the term to a date that is not earlier than April 30, 2020; It must specifically state that the buyer’s remedy for default on the part of the seller includes or is specific performance; The Applicant must be the buyer unless there is an assignment of the eligible contract, signed by the assignor and the assignee, which assigns all of the buyer’s rights, title and interests in the eligible contract to the Applicant; and The owner of the subject property must be the seller, or is a party to one or more intermediate contracts, agreements, assignments, options, or conveyances between or among the owner, the Applicant, or other parties, that have the effect of assigning the owner’s right to sell the property to the seller. Any intermediate contract must meet the criteria for an eligible contract in (a) and (b) above. In demonstrating site control, the RFA states: Note: The Corporation will not review the site control documentation that is submitted with the Site Control Certification form during the scoring process unless there is a reason to believe that the form has been improperly executed, nor will it in any case evaluate the validity or enforceability of any such documentation. During scoring, the Corporation will rely on the properly executed Site Control Certification form to determine whether an Applicant has met the requirements of this RFA to demonstrate site control. The Corporation has no authority to, and will not, evaluate the validity or enforceability of any eligible site control documentation that is attached to the Site Control Certification form during the scoring process. During credit underwriting, if is determined that the site control documents do not meet the above requirements, the Corporation may rescind the award. Additionally, the RFA requires that the site control "documentation include all relevant intermediate contracts, agreements, assignments, options, conveyances, intermediate leases, and subleases." In the instant case, Madison Oaks attached a Purchase and Sale Agreement ("Madison Oaks Agreement") to its Site Control Form. The Madison Oaks Agreement lists West Oak Developers, LLC, as the "Seller" and Madison Oaks East, LLC, as the "Purchaser." However, the City of Ocala owns the property in question. The Madison Oaks Agreement in section 12 states that: "Seller has a valid and binding agreement with the City of Ocala, Florida pursuant to which Seller has the right to acquire fee simple title to the Property …." Tranquility and Florida Housing contend that Madison Oaks failed to demonstrate site control because Madison Oaks failed to include the City of Ocala Redevelopment Agreement for Pine Oaks ("Redevelopment Agreement") in its site control documentation. Madison Oaks maintains that the City of Ocala is a seller, pursuant to the Joinder and Section 28 of the Madison Oaks Agreement, and therefore, the Redevelopment Agreement did not need to be included. However, the Madison Oaks Agreement clearly identifies West Oak as the "Seller" and the City of Ocala as the "City." At hearing, Ms. Button persuasively and credibly testified that the Madison Oaks application is ineligible because it did not include the Redevelopment Agreement, which is a relevant agreement for purposes of demonstrating site control. The Redevelopment Agreement was a relevant intermediate contract, which was required to be included in Madison Oak’s application. Madison Oak’s failure to include the Redevelopment Agreement renders its application ineligible. Madison Oaks contends that including the Redevelopment Agreement in its application was unnecessary because of a joinder provision within the Madison Oaks Agreement. The Madison Oaks Agreement contains a Joinder and Consent of the City of Ocala approved by the City Council ("the Joinder"), whereby the City of Ocala joined and consented to the Madison Oaks Agreement "solely for the purposes set forth in, and subject to, Section 28 herein." The Madison Oaks Agreement in Section 28 states that: "Seller hereby acknowledges and agrees that in the event of Seller’s default hereunder, that is not timely cured, or Seller's refusal to close hereunder, Purchaser shall be entitled to close on the property subject to this Agreement … directly with the City on the terms and conditions set forth in this Section 28." However, Section 28 only applies in the event of a default by West Oaks that is not timely cured or West Oak’s refusal to close. There is no information within the Madison Oaks application to determine whether a default or termination of the Redevelopment Agreement occurred as of the application deadline. Westside’s Application (DOAH Case No. 20-1770BID) Florida Housing deemed Westside’s application eligible and, pursuant to the terms of the RFA, Westside was preliminary selected for funding to meet the goal to fund one development that qualifies for the Local Community Revitalization Initiative Goal. Westside’s Election to Compete for the Local Community Revitalization Initiative Goal In order to qualify for the Local Community Revitalization Initiative Goal, the RFA states: Applicants for proposed Developments that are part of a local revitalization plan may elect to compete for this goal. To qualify for this goal, the Applicant must submit the properly completed Florida Housing Finance Corporation Local Government/Community Redevelopment Agency Verification That Development Is Part Of A Local Community Revitalization Plan form (Form Rev. 08-2019) as Attachment 18. The form is available on the RFA Website. Included with the form must be either (1) a link to the local community revitalization plan or (2) a copy of the local community revitalization plan. The plan must have been adopted on or before January 1, 2019. Florida Housing, pursuant to the terms of the RFA, also has a goal to fund four medium county developments that qualify for the Local Government Areas of Opportunity Funding Goal. Westside included an executed Florida Housing Finance Corporation Local Government/Community Redevelopment Agency Verification that Development is Part of a Local Community Revitalization Plan form (the "Local Community Revitalization Plan Form") and a link to the local government revitalization plan at Attachment 18 of its application. At question 11.c. in the application, applicants are asked to select "Yes" or "No" from a drop-down menu in response to the question: "Is the proposed Development eligible for the Local Community Revitalization Initiative Goal?" Westside selected "No" from the Yes/No drop-down menu in answering question 11.c. regarding the Local Community Revitalization Initiative Goal. At question 11.a. in the application, applicants are asked to select "Yes" or "No" from a drop-down menu in response to the question: "Is the proposed Development eligible for the Local Government Areas of Opportunity Funding Goal?" Westside selected "Yes" from the Yes/No drop-down menu in answering questions 11.a. regarding the Local Government Areas of Opportunity Funding Goal. During scoring, Westside was deemed to have qualified for the Local Government Areas of Opportunity Funding Goal and the Local Community Revitalization Initiative Goal. During the funding selection process, Westside was selected for funding to meet the Local Government Community Revitalization Initiative Goal. HTG Addison selected "Yes" from the Yes/No drop-down menu in answering question 11.c. regarding the Local Community Revitalization Initiative Goal. HTG Addison included an executed Local Community Revitalization Plan Form at Attachment 18 of its application. HTG Addison selected "No" from the Yes/No drop-down menu in answering question 11.a. regarding the Local Government Areas of Opportunity Funding Goal. HTG Addison is the next highest ranked eligible applicant qualified for the Local Community Revitalization Initiative Goal after Westside. If Westside is deemed not to have qualified for the revitalization goal, then HTG Addison, as the next highest ranked eligible applicant, would qualify for that goal. HTG Addison alleges that Westside should not be selected to meet the Local Community Revitalization Initiative Goal because Westside selected "No" from the drop-down menu in response Question 11.c. Ms. Button persuasively and credibly testified that Florida Housing does not rely on the drop-down responses to questions 11a., b., or c. in determining whether an applicant "elects to be eligible for a certain goal" because answering "Yes" or "No" to these requirements is not a requirement of the RFA. Rather, Ms. Button persuasively and credibly testified that in determining whether an applicant qualifies for a funding goal, Florida Housing relies on the documentation submitted with the application that is required for the funding goal. In the instant case, Westside included the executed Florida Housing Finance Corporation Local Government Revitalization Plan form and a link to the local community revitalization plan at Attachment 18 of its application.2 In addition, Ms. Button persuasively and credibly testified that even if Westside erred in selecting "Yes" in response to question 11.c., it is so minor as to constitute a waivable, minor irregularity because Florida Housing has the required information within the application (the executed form and a link to the local community revitalization plan at Attachment 18). 2 Notably, another applicant responding to the RFA, Tranquility at Ferry Pass, selected "Yes" in response to question 11.c., but failed to include at Attachment 18 either a copy of or a link to the local community revitalization plan. During scoring, Florida Housing determined that Tranquility at Ferry Pass did not qualify for the revitalization goal. Florida Housing’s scoring of the Westside application is consistent with its scoring of the Tranquility at Ferry Pass application because in both cases, Florida Housing scored the application based on the requirements of the RFA for the revitalization goal and the documentation submitted in response to those requirements. Florida Housing did not rely on the applicant’s response to question 11.c. regarding the applicant’s expressions of its own eligibility.
Recommendation 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 protests of HTG Addison and Madison Oaks; (2) finding the HTG Edgewood, Diplomat, and Madison Oaks applications ineligible for funding; and (3) finding the Rochester, Madison Square, Tranquility, and Westside applications eligible for funding. DONE AND ENTERED this 19th day of June, 2020, in Tallahassee, Leon County, Florida. S DARREN A. SCHWARTZ Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us COPIES FURNISHED: Filed with the Clerk of the Division of Administrative Hearings this 19th day of June, 2020. Hugh R. Brown, General Counsel Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1329 (eServed) Maureen McCarthy Daughton, Esquire Maureen McCarthy Daughton, LLC 1400 Village Square Boulevard, Suite 3-231 Tallahassee, Florida 32312 (eServed) Amy Wells Brennan, Esquire Manson Bolves Donaldson Varn, P.A. 109 North Brush Street, Suite 300 Tampa, Florida 33602 (eServed) Michael P. Donaldson, Esquire Carlton Fields 215 South Monroe Street, Suite 500 Tallahassee, Florida 32302 (eServed) Sarah Pape, Esquire Zimmerman, Kiser & Sutcliffe, P.A. 315 East Robinson Street, Suite 600 Post Office Box 3000 (32802) Orlando, Florida 32801 (eServed) J. Timothy Schulte, Esquire Zimmerman, Kiser & Sutcliffe, P.A. 315 East Robinson Street Post Office Box 3000 (32802) Orlando, Florida 32801 (eServed) Craig D. Varn, Esquire Manson Bolves Donaldson Varn, P.A. 106 East College Avenue, Suite 820 Tallahassee, Florida 32301 (eServed) Donna Elizabeth Blanton, Esquire Radey Law Firm, P.A. 301 South Bronough Street, Suite 200 Tallahassee, Florida 32301 (eServed) M. Christopher Bryant, Esquire Oertel, Fernandez, Bryant & Atkinson, P.A. Post Office Box 1110 Tallahassee, Florida 32302-1110 (eServed) Betty Zachem, Esquire Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301 (eServed) Corporation Clerk Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1329 (eServed)
The Issue The issue for determination in this bid protest proceeding is whether the Florida Housing Finance Corporation’s (“Florida Housing”) intended award of tax credits for the preservation of existing affordable housing developments was clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact Based on the oral and documentary evidence presented at hearing, and the entire record in this proceeding, the Findings of Fact are as follows: Parties Petitioner, Madison Point, is a Florida limited liability company and the designated applicant for funding through the RFA to construct an 85-unit development for low- income elderly persons in Pinellas County, Florida. Petitioner, American Residential Development, LLC, is the designated developer for the proposed development. Intervenor, Heritage Oaks, is a Florida limited liability limited partnership in the business of providing affordable housing. Heritage Oaks is an applicant for financing in response to the RFA to construct an 85-unit development for low-income elderly persons in Pinellas County, Florida. Intervenor, HTG Hudson, is a Florida limited liability company in the business of developing affordable housing. HTG Hudson was an applicant for financing in response to the RFA to construct an 87-unit development for low-income elderly persons in Pinellas County, Florida. However, all issues regarding HTG Hudson have been resolved pursuant to a settlement agreement which was attached as Exhibit “A” to the Joint Prehearing Stipulation. Pursuant to the settlement agreement, HTG Hudson’s application is ineligible for funding. Florida Housing is a public corporation created pursuant to section 420.504, Florida Statutes, and for the purpose of this proceeding, an agency of the State of Florida. Its 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. Affordable Housing Tax Credits The low-income housing tax credit program (commonly referred to as “tax credits” or “housing credits”) was enacted to incentivize the private market to invest in affordable rental housing. These tax credits are awarded competitively to housing developers in Florida for rental housing projects which qualify. These credits are then normally sold by developers for cash to raise capital for their projects. The effect is that it reduces the amount that the developer would have to borrow otherwise. Because the total debt is lower, a 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 tax credits. The demand for tax credits provided by the federal government exceeds the supply. Florida Housing is authorized to allocate tax credits, State Apartment Incentive Loan (“SAIL”) funding, and other funding by means of request for proposal or other competitive solicitation in section 420.507(48), and adopted Florida Administrative Code Chapter 67-60, to govern the competitive solicitation process for several different programs, including the program for tax credits. Chapter 67-60 provides that Florida Housing allocate its tax credits, which were made available to Florida Housing on an annual basis by the U.S. Treasury, through the bid protest provisions of section 120.57(3). Application Process In their applications, applicants request a specific dollar amount of housing credits to be given to the applicant each year for a period of 10 years. Applicants will normally sell the rights to that future stream of income tax credits (through the sale of almost all of the ownership interest in the applicant’s 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” (total costs incurred in the completion of a development); 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. Tax credits are made available through a competitive application process commenced by the issuance of an RFA. An RFA is equivalent to a “request for proposal” as indicated in rule 67-60.009(3). The RFA at issue here is RFA 2016-113, Housing Credit Financing for Affordable Housing Developments Located in Broward, Duval, Hillsborough, Orange, Palm Beach, and Pinellas counties. The RFA was issued on October 28, 2016, and responses were initially due December 8, 2016. The RFA was modified on November 10, 2016, and, among other revisions, the application deadline was extended to December 30, 2016. Through the RFA, Florida Housing seeks to award up to an estimated $14,669,052 of housing credits to qualified applicants in Broward, Duval, Hillsborough, Orange, Palm Beach, and Pinellas counties. In response to RFA 2016-113, 43 applications were submitted for funding, including Madison Point and Heritage Oaks. Madison Point submitted application No. 2017-232C seeking $1,660,000 in annual allocation of housing credits to finance the construction of an 80-unit development in Pinellas County. Heritage Oaks submitted application No. 2017-201C, seeking $1,660,000 in annual allocation of housing credits to finance the construction of an 85-unit development in Pinellas County. The RFA sets forth the information required to be provided by an applicant, which includes a general description of the type of projects that will be considered eligible for funding and delineates the submission requirements. In order to be considered for funding selection, the application must meet all of the eligibility requirements set forth in the RFA. The eligibility requirements include, among other things, “[a]ll “Mandatory Items” described in section five of the RFA.” The RFA sets forth a list of mandatory items that must be included in a response including, but are not limited to, appropriate zoning, site control, development category, and occupancy status of any existing units. As part of the general development information, the RFA requires applicants to select a development category applicable to its proposed development. This is a mandatory item of the RFA. Applicants are instructed to select amongst the following categories: New Construction (where 50 percent or more of the units are new construction) Rehabilitation (where less than 50 percent of the units are new construction) Acquisition and Rehabilitation (acquisition and less than 50 percent of the units are new construction) Redevelopment (where 50 percent or more of the units are new construction) Acquisition and Redevelopment (acquisition and 50 percent or more of the units are new construction) Once disclosed in the application, the development category cannot be changed. In the RFA, “new construction” while capitalized is not a defined term. However, rule 67-48.002(98), defines “redevelopment” as follows: With regard to a proposed Development that involves demolition of multifamily rental residential structures currently or previously existing that were originally built in 1986 or earlier and either originally received financing or are currently financed through one or more of the following HUD or RD programs: Sections 202 of the Housing Act of 1959 (12 U.S.C. §1701q), 236 of the National Housing Act (12 U.S.C. §1701), 514, 515, or 516 of the U.S. Housing Act of 1949 (42 U.S.C. §1484), 811 of the U.S. Housing Act of 1937 (42 U.S.C. §1437), or have PBRA; and new construction of replacement structures on the same site maintaining at least the same number of PBRA units; or With regard to proposed Developments that involve demolition of public housing structures currently or previously existing on a site with a Declaration of Trust that were originally built in 1986 or earlier and that are assisted through ACC; and new construction of replacement structures on the same site, providing at least 25 percent of the total new units with PBRA, ACC, or both, after Redevelopment. Although the Rehabilitation Category is defined, it is not relevant for purposes of this proceeding. Additionally, the RFA requires applicants to answer whether the proposed development consists of: a) 100 percent new construction units; b) 100 percent rehabilitation units; or c) a combination of new construction units and rehabilitation units, and state the quantity of each type. This is a mandatory item of the RFA. Selection Process Florida Housing received 43 applications seeking funding in RFA 2016-113. Florida Housing’s executive director appointed a Review Committee of Florida Housing staff to evaluate the applications for eligibility and scoring and to make recommendations to Florida Housing’s Board of Directors. Pursuant to the terms of the RFA, the applications were received, processed, deemed eligible or ineligible, scored, and ranked. The Review Committee determined that, among other applicants, the applications of Heritage Oaks and Madison Point were eligible for funding. Through the ranking and selection process outlined in the RFA, Heritage Oaks was recommended to the Board of Directors to be selected for funding within Pinellas County. The Review Committee developed a chart listing its funding recommendations for the RFA to be presented to Florida Housing’s Board of Directors. On May 5, 2017, Florida Housing’s Board of Directors met and considered the recommendations of the Review Committee for RFA 2016-113. Also, on May 5, 2017 following the Board meeting, Petitioners, and all other applicants in RFA 2016-113, received notice that Florida Housing’s Board of Directors determined whether applications were eligible or ineligible for consideration for funding, and that certain eligible applicants were selected for award of tax credits. Such notice was provided by the posting of two spreadsheets, one listing the “eligible” and “ineligible” applications in RFA 2016-113 and one identifying the applications which Florida Housing proposed to fund on the Florida Housing website, www.floridahousing.org. Of the 43 applications submitted, 37 were deemed “eligible” and six were deemed “ineligible.” In that May 5, 2017, posting, Florida Housing announced its intention to award funding to seven applications, including Heritage Oaks. Madison Point was deemed eligible but not selected for funding. Madison Point timely filed a Notice of Protest and Petition for Formal Administrative Proceedings. Heritage Oaks intervened as a named party and intervention was granted. The scoring decisions at issue in this proceeding are related to Florida Housing’s decision to award funding to Heritage Oaks based on its responses regarding occupancy status and local government contribution. The RFA specifies an “application sorting order” to rank applicants for potential funding. The first consideration in sorting eligible applications for potential funding is application score. The maximum score an applicant can achieve is 28 points. In the case of a tie score, Florida Housing incorporated a series of “tie breakers” into the sorting process. The tiebreakers for this RFA, in order of applicability, are: First, by Development Category Funding Preference; Second, by a Per Unit Construction Funding Preference; Third, by a Leveraging Classification based on the amount of total Florida Housing funding per set-aside unit; Fourth, by the eligibility for the 75 or More Total Unit Funding Preference; Fifth, by satisfaction of a Florida Job Creation Funding preference, which applies a formula to reflect the estimated number of jobs created per $1 million of funding; Lastly, if necessary, by randomly assigned lottery number. The RFA set out a selection process for eligible applicants, after the sorting and ranking process outlined above. That selection process consisted of selecting the highest ranking eligible application for a proposed development in each of the following counties first: Broward, Duval, Hillsborough, Orange, Palm Beach, and Pinellas. If funding remained after those selections, then the highest ranking eligible unfunded application in Broward would be selected next. Heritage Oaks and Madison Point selected the elderly non-Assisted Living Facility (“ALF”) demographic and the proposed developments were located in Pinellas County. Florida Housing’s preliminary agency action selected Heritage Oaks for funding for Pinellas County. Heritage Oaks’ Application Heritage Oaks’ proposed development site consists of approximately 4.99 acres. Heritage Oaks’ proposed development site contains existing roads owned by Pinellas County. Heritage Oaks indicates that its proposed development site was comprised of scattered sites. There are existing housing units on Heritage Oaks’ development site. However, Heritage Oaks’ application indicates that “there are no existing units.” Heritage Oaks’ application selected “new construction” as its development category. Heritage Oaks’ proposed development involves demolition of currently-occupied, multifamily, public housing rental structures that were originally built in 1986 or earlier and either originally received financing or are currently financed through one or more of the following HUD or RD programs: Sections 202 of the Housing Act of 1959 (12 U.S.C. § 1701 q); 236 of the National Housing Act (12 U.S.C. § 1701); 514, 515, or 516 of the U.S. Housing Act of 1949 (42 U.S.C. § 1484); and 811 of the U.S. Housing Act of 1937 (42 U.S.C. § 1437). Development Category In response to the RFA requirements, Heritage Oaks selected “New Construction” as its development category. Heritage Oaks also indicated that its proposed development consists of 100 percent new construction. Mr. Evjen acknowledged that Heritage Oaks’ proposed development involves the demolition of existing structures on the proposed development site and the construction of 85 new units. Mr. Evjen explained that the proposed development includes 71 senior units in a three-story, mid-rise building, and seven duplex buildings, which would include the other 14 units on the proposed development site. The testimony at hearing indicated that at the time of the application deadline, Heritage Oaks’ proposed development did not satisfy all of the criteria set forth in the definition of redevelopment, as set forth in paragraph 18, supra. At hearing, Mr. Evjen and Ms. Blinderman testified that to qualify as redevelopment, at least 25 percent of the new units must receive Project Based Rental Assistance (“PBRA”). PBRA units are those with a rental subsidy through a contract with the United States Department of Housing and Urban Development (“HUD”) or the Rural Development Services (formerly the Farmer’s Home Administration) of the United States Department of Agriculture. See Fla. Admin. Code Rules 67-48.002(72), (85), and (98). Heritage Oaks intends to develop the proposed development with Pinellas County Housing Authority (“Housing Authority”). At the time of the application deadline, the Housing Authority was in discussions with HUD regarding the final count, if any, of PBRA units. The lack of a resolution with HUD is beyond the authority of Heritage Oaks and remains uncertain. As of the application deadline, Heritage Oaks could not know if 25 percent of its new units would receive PBRA and, therefore, could not classify the proposed development as redevelopment. While it may be possible that Heritage Oaks’ proposed development may meet the definition of redevelopment at some point in the future, at the time of the application it did not meet the definition. At hearing, no testimony or documentary evidence was offered to establish that the proposed development currently falls within the definition of redevelopment. Respondent found this classification to be acceptable. Petitioners assert that it is reasonable that Heritage Oaks would meet the threshold to satisfy the criteria for the redevelopment category. However, it was more reasonable that Heritage Oaks would not meet the threshold and be ineligible for funding, if the redevelopment category had been incorrectly selected. Therefore, the evidence supports that it was reasonable for Heritage Oaks to identify its development project as new construction. Occupancy Status Petitioners also argue that Heritage Oaks should not be awarded funding because it failed to disclose the occupancy status of existing units on the proposed development site. In the RFA, the subheading and language for section four (A)(5)(e)(3) provides as follows: Number of Units in Proposed Development: The Applicant must indicate which of the following applies with regard to the occupancy status of any existing units: Existing units are currently occupied Existing units are not currently occupied There are no existing units The section then instructs the applicant to refer to section four (A)(5)(e) of the RFA instructions before answering the occupancy status question. The RFA instructions at section four (A)(5)(e) provide as follows: e. Number of Units in Proposed Development: The Applicant must state the total number of units. Note: The proposed Development must consist of a minimum of 50 total units. Proposed Developments consisting of 75 or more total units will be eligible for the 75 or More Total Unit Funding Preference (outlined at Section Four B.2. of the RFA). If the Elderly Demographic Commitment (ALF or Non- ALF) is selected at question 2.b. of Exhibit A, the proposed Development cannot exceed the maximum total number of units outlined in Item 1 of Exhibit C of the RFA. The Applicant must indicate whether the proposed Development consists of (a) 100% new construction units, (b) 100% rehabilitation units, or (c) a combination of new construction units and rehabilitation units, and state the quantity of each type. The Applicant must indicate the occupancy status of any existing units at question 5.e.(3) of Exhibit A. Developments that are tentatively funded will be required to provide to the Credit Underwriter a plan for relocation of existing tenants, as outlined in Item 2.b.(6) of the Applicant Certification and Acknowledgement form. The plan shall provide information regarding the relocation site; accommodations relevant to the needs of the residents and length of time residents will be displaced; moving and storage of the contents of a resident’s dwelling unit; as well as the approach to inform and prepare the residents for the rehabilitation activities. In response to this RFA requirement and the cited RFA Instructions concerning Occupancy Status, Heritage Oaks indicated that “there are no existing units” in its proposed development. However, Mr. Evjen testified that there were existing units on the development site as of the application deadline and some of those units were occupied. Heritage Oaks pointed out that a review of the RFA reflects that it is organized in an outline format with headings and subheadings. For example, section four concerns information to be provided in the application. Section four A(5) then requests general development information. Section four (A)(5)(e) requests information concerning the number of units in the proposed development. Mr. Evjen further testified that, based on review of the RFA and the instructions, Heritage Oaks took a three-step approach in responding to the occupancy status question. Heritage Oaks properly answered the first two questions. First, Heritage Oaks provided the total number of units as 85. Second, Heritage Oaks indicated that “all 85 units would be new construction.” In the final question, Heritage Oaks considered whether any existing units would remain as a “part of its proposed development.” Because no existing units would be part of its proposed development, Heritage Oaks responded “there are no existing units” in its proposed development. However, the term “proposed” was not used in question 5.e.(3) as was the case in the prior questions in the same subsection. Mr. Evjen also testified that he read the question as “if there are rehab[ilitation] units, are they occupied? Heritage Oaks’ erroneous interpretation of the question resulted in its failure to provide an accurate answer. The question simply requested the “occupancy status of any existing units.” The question was clear and unambiguous. The parties have stipulated that there are existing housing units on the Heritage Oaks proposed development site. However, Heritage Oaks’ application indicates that there are no existing units. The representation that there were no existing units was a false statement of material fact. It is worth noting that the parties stipulated at the beginning of the hearing that there is no allegation of fraud or intentional deception. There is also no evidence in the record of intentional deception and therefore, there is no finding by the undersigned that Heritage Oaks engaged in intentional misconduct. However, whether intentional or not, Heritage Oaks’ representation of no existing units is a false statement. According to Mr. Reecy, Florida Housing asks the question regarding occupancy status of existing units because Florida Housing wants to make sure that the developer can handle the cost issues related to relocation and that the relocation needs of the existing tenants will be met. Additionally, Mr. Reecy testified that Florida Housing relies upon applicants to accurately respond to questions in the RFA because, at the time of scoring, no independent research is conducted to verify responses. Regarding a relocation plan, Heritage Oaks relies on the Declaration of Trust’s requirement to have a tenant relocation plan as a remedy for the failure to properly respond to the occupancy status question. However, the Declaration of Trust is a HUD requirement that is not controlled by Florida Housing. In fact, Mr. Evjen testified that Heritage Oaks’ co-developer was researching terminating the Declaration of Trust. Given the fact that Heritage Oaks could terminate its Declaration of Trust, the Declaration of Trust does not provide adequate assurance that the tenants in the existing housing units will be adequately relocated once Florida Housing allocates its funding. Florida Housing has a material interest in ensuring that tenants located in existing housing units are properly and adequately relocated during the development phase of any Florida Housing-funded development. Accordingly, Florida Housing’s scoring decision with regard to Heritage Oaks’ response to the occupancy status question was contrary to the terms of the RFA and clearly erroneous. Heritage Oaks is ineligible for funding under RFA 2016-113. Local Government Contribution At section four (A)(10)(b), an applicant can obtain 10 points if it can demonstrate a high level of local government interest in its project via an increased amount of local government contribution. To satisfy this requirement, an applicant must attach a properly completed and executable Florida Housing Finance Corporation Local Government Verification of Contribution-Loan Form (“loan form”). The RFA establishes a contribution threshold amount which qualifies an application for the local government area of opportunity points. The RFA defines “local government areas of opportunity” as follows: Developments receiving a high level of Local Government interest in the project as demonstrated by an irrevocable funding contribution that equals or exceeds 2.5 times the Total Development Cost Per Unit Base Limitation (exclusive of any add-ons or multipliers), as provided in Item 7 of Exhibit C to the RFA, for the Development Type committed to for the proposed Development. The minimum local government areas of opportunity funding amounts are outlined in section four A.10.b. of the RFA. A single jurisdiction (i.e., the county or a municipality) may not contribute cash loans and/or cash grants for any other proposed development applying in the same competitive solicitation in an amount sufficient to qualify as Local Government Areas of Opportunity, per the competitive solicitation. In response to this RFA requirement, Heritage Oaks submitted Attachment 15, a loan form from Pinellas County, Florida, in the amount of $551,000. Based upon the minimum local government area of opportunity funding amounts established in the RFA, this amount qualified Intervenor Heritage Oaks for 10 points. Petitioners challenge Intervenor Heritage Oaks’ loan form for two reasons. First, Petitioners opine that the face value of the commitment and the net present value included in the loan form cannot be the same amount and, therefore, a calculation error must have occurred. Petitioners rely on examples of various calculations found in the RFA. Next, Petitioners allege that the loan form was not properly signed and no final approval was given by Pinellas County. Intervenor Heritage Oaks provided a loan form from Pinellas County. The loan form committed Pinellas County to a loan in the amount of $551,000. Mr. Bussey, the individual who processed the application and award of commitment, indicated that the commitment was a loan that would be forgiven as long as certain requirements were met and kept. Mr. Bussey further indicated that there were no loan payments or interest rates associated with the loan. Accordingly, he indicated that the loan value was the net present value of the loan, which means the commitment amount and the net present value for the Pinellas County loan is the same number, $551,000. While Petitioners allege that the loan form was not appropriately signed and no final approval had occurred, the greater weight of the evidence shows otherwise. Specifically, Petitioners opine that either a resolution or some action by the Pinellas County Board of County Commissioners or the County Administrator was necessary as asserted by their witness, Mr. Banach. While Mr. Banach was critical of the loan verification form, he acknowledged that he is not an expert regarding the process for Pinellas County loan contribution and he did not process the loan application. He further acknowledged that Mr. Bussey, the individual who processed the loan, found no error with the form. The evidence shows that the loan form was executed by Charles Justice, who at the time of the loan form’s execution was the Chairman of the Pinellas County Board of County Commissioners. Mr. Bussey explained the process for approving the loan form and indicated that Mr. Justice, as Chairman, had the authority to sign the loan form. Mr. Bussey also pointed out language in the loan form which provides as follows: “This certification must be signed by the chief appointed official (staff) responsible for such approval, . . . Chairperson of the Board of the County Commissioners.” Mr. Justice is one of the designated individuals the form itself indicated is acceptable. Mr. Bussey indicated that no further approvals were necessary. At hearing, Florida Housing indicated that the loan form submitted by Heritage Oaks satisfied the requirements of the RFA and this position was not shown to be erroneous or unreasonable.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Housing Finance Corporation enter a final order rescinding the intended award to Heritage Oaks and designating Madison Point and America Residential Development, LLC, as the recipients of the funding under RFA 2016-113. DONE AND ENTERED this 11th day of August, 2017, in Tallahassee, Leon County, Florida. S YOLONDA Y. GREEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 11th day of August, 2017. COPIES FURNISHED: Hugh R. Brown, General Counsel Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301 (eServed) Betty Zachem, Esquire Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1329 (eServed) Marisa G. Button, Esquire Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301 (eServed) Michael G. Maida, Esquire Michael G. Maida, P.A. 1709 Hermitage Boulevard, Suite 201 Tallahassee, Florida 32308 (eServed) Douglas P. Manson, Esquire Manson Bolves Donaldson & Varn, P.A. 1101 West Swann Avenue Tampa, Florida 33606-2637 (eServed) Paria Shirzadi, Esquire Manson Bolves Donaldson & Varn, P.A. 1101 West Swann Avenue Tampa, Florida 33606-2637 (eServed) Craig D. Varn, Esquire Manson Bolves Donaldson Varn, P.A. 204 South Monroe Street, Suite 201 Tallahassee, Florida 32301 (eServed) J. Timothy Schulte, Esquire Zimmerman, Kiser, & Sutcliffe, P.A. 315 East Robinson Street, Suite 600 Orlando, Florida 32801 (eServed) Sarah Pape, Esquire Zimmerman, Kiser, & Sutcliffe, P.A. 315 East Robinson Street, Suite 600 Orlando, Florida 32801 (eServed) Maureen McCarthy Daughton, Esquire Maureen McCarthy Daughton, LLC 1725 Capital Circle Northeast, Suite 304 Tallahassee, Florida 32308 (eServed) Michael P. Donaldson, Esquire Carlton Fields Jorden Burt, P.A. Post Office Drawer 190 215 South Monroe Street, Suite 500 Tallahassee, Florida 32302-0190 (eServed) Kate Flemming, Corporation Clerk Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1329 (eServed)
The Issue Whether the Petitions filed by Ambar Trail, Ltd.; Sierra Meadows Apartments, Ltd.; and Quail Roost Transit Village IV, Ltd., should be dismissed for lack of standing.
Findings Of Fact Florida Housing is a public corporation created under Florida law to administer the governmental function of financing or refinancing affordable housing and related facilities in Florida. Florida Housing administers a competitive solicitation process to implement the provisions of the housing credit program, under which developers apply and compete for funding for projects in response to RFAs developed by Florida Housing. The RFA in this case was specifically targeted to provide affordable housing in Miami-Dade County, Florida. The RFA introduction provides: 2 As this Recommended Order of Dismissal is based upon a motion to dismiss, the factual allegations of the three Petitions filed by the Petitioners in this consolidate case are accepted as true, and the Findings of Fact are derived from the four corners of those Petitions, see Madison Highlands. LLC v. Florida Housing Finance Corp., 220 So. 3d 467, 473 (Fla. 5th DCA 2017), and facts that are not otherwise in dispute. This Request for Applications (RFA) is open to Applicants proposing the development of affordable, multifamily housing located in Miami- Dade County. Under this RFA, Florida Housing Finance Corporation (the Corporation) expects to have up to an estimated $7,195,917 of Housing Credits available for award to proposed Developments located in Miami-Dade County. After Florida Housing announced its preliminary funding award decisions for RFA 2019-112 for Housing Credit Financing for Affordable Housing Developments Located in Miami-Dade County, each of the Petitioners filed Petitions challenging the decisions. Petitioners do not allege that Florida Housing improperly scored or evaluated the applications selected for funding, nor do they contend that Petitioners' applications should be funded. Instead, Petitioners allege that the evaluation was fundamentally unfair and seeks to have the entire RFA rescinded based on alleged improprieties of one responding entity and its affiliates. Petitioners claim that the evaluation process was fundamentally unfair is based entirely on allegations that several entities associated with Housing Trust Group, LLC (HTG), combined to submit 15 Priority I applications in contravention of the limitation in the RFA on the number of Priority I applications that could be submitted. Even assuming Petitioners' assertions are correct, there is no scenario in which Petitioners can reach the funding range for this RFA. In order to break ties for those applicants that achieve the maximum number of points and meet the mandatory eligibility requirements, the RFA sets forth a series of tie-breakers to determine which applications will be awarded funding. The instant RFA included specific goals to fund certain types of developments and sets forth sorting order tie-breakers to distinguish between applicants. The relevant RFA provisions are as follows: Goals The Corporation has a goal to fund one (1) proposed Development that (a) selected the Demographic Commitment of Family at questions 2.a. of Exhibit A and (b) qualifies for the Geographic Areas of Opportunity/SADDA Goal as outlined in Section Four A. 11. a. The Corporation has a goal to fund one (1) proposed Development that selected the Demographic Commitment of Elderly (Non-ALF) at question 2.a. of Exhibit A. *Note: During the Funding Selection Process outlined below, Developments selected for these goals will only count toward one goal. Applicant Sorting Order All eligible Priority I Applications will be ranked by sorting the Applications as follows, followed by Priority II Applications. First, from highest score to lowest score; Next, 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.lO.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 Applicant'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 Applicant'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 lotterv number, resulting in the lowest lottery number receiving preference. This RFA was similar to previous RFAs issued by Florida Housing, but included some new provisions limiting the number of Priority I applications that could be submitted. Specifically, the RFA provided: Priority Designation of Applications Applicants may submit no more than three (3) Priority I Applications. There is no limit to the number of Priority II Applications that can be submitted; however, no Principal can be a Principal, as defined in Rule Chapter 67- 48.002(94), F.A.C., of more than three ( 3) Priority 1 Applications. For purposes of scoring, Florida Housing will rely on the Principals of the Applicant and Developer(s) Disclosure Form (Rev. 05-2019) outlined below in order to determine if a Principal is a Principal on more than three (3) Priority 1 Applications. If during scoring it is determined that a Principal is disclosed as a Principal on more than three (3) Priority I Applications, all such Priority I Applications will be deemed Priority II. If it is later determined that a Principal, as defined in Rule Chapter 67-48.002(94), F.A.C., was not disclosed as a Principal and the undisclosed Principal causes the maximum set forth above to be exceeded, the award(s) for the affected Application(s) will be rescinded and all Principals of the affected Applications may be subject to material misrepresentation, even if Applications were not selected for funding, were deemed ineligible, or were withdrawn. The Petitioners all timely submitted applications in response to the RFA. Lottery numbers were assigned by Florida Housing, at random, to all applications shortly after the applications were received and before any scoring began. Lottery numbers were assigned to the applications without regard to whether the application was a Priority I or Priority II. The RFA did not limit the number of Priority II Applications that could be submitted. Review of the applications to determine if a principal was a principal on more than three Priority 1 Applications occurred during the scoring process, well after lottery numbers were assigned. The leveraging line, which would have divided the Priority I Applications into Group A and Group B, was established after the eligibility determinations were made. All applications were included in Group A. There were no Group B applications. Thus, all applications were treated equally with respect to this preference. The applications were ultimately ranked according to lottery number and funding goal. . If Florida Housing had determined that an entity or entities submitted more than three Priority I Applications with related principals, the relief set forth in the RFA was to move those applications to Priority II. Florida Housing did not affirmatively conclude that any of the 15 challenged applications included undisclosed principals so as to cause a violation of the maximum number of Priority I Applications that could be submitted. All of the applications that were deemed eligible for funding, including the Priority II Applications, scored equally, and met all of the funding preferences. After the applications were evaluated by the Review Committee appointed by Florida Housing, the scores were finalized and preliminary award recommendations were presented and approved by Florida Housing's Board. Consistent with the procedures set forth in the RFA, Florida Housing staff reviewed the Principal Disclosure Forms to determine the number of Priority I Applications that had been filed by each applicant. This review did not result in a determination that any applicant had exceeded the allowable number of Priority I Applications that included the same principal. One of the HTG Applications (Orchid Pointe, App. No. 2020-148C) was initially selected to satisfy the Elderly Development goal. Subsequently, three applications, including Slate Miami, that had initially been deemed ineligible due to financial arrearages were later determined to be in full compliance and, thus, eligible as of the close of business on January 8, 2020. The Review Committee reconvened on January 21, 2020, to reinstate those three applications. Slate Miami was then recommended for funding. The Review Committee ultimately recommended to the Board the following applications for funding: Harbour Springs (App. No. 2020-101C), which met the Geographic Areas of Opportunity/SADDA Goal; Slate Miami (App. No. 2020-122C), which met the Elderly (non-ALF) Goal; and Naranja Lakes (App. No. 2020-117C), which was the next highest-ranked eligible Priority I Application. The Board approved the Committee's recommendations at its meeting on January 23, 2020, and approved the preliminary selection of Harbour Springs, Slate Miami, and Naranja Lakes for funding. The applications selected for funding held Lottery numbers 1 (Harbour Springs), 2 (Naranja Lakes), and 4 (Slate Miami). Petitioners' lottery numbers were 16 (Quail Roost), 59 (Sierra Meadows) and 24 (Ambar Trail). The three applications selected for funding have no affiliation or association with HTG, or any of the entities that may have filed applications in contravention of the limitation in the RFA for Priority I applications. The applications alleged in the Petitions as being affiliated with HTG received a wide range of lottery numbers in the random selection, including numbers: 3, 6, 14, 19, 30, 38, 40, 42, 44, 45, 49, 52 through 54, and 58. If Petitioners prevailed in demonstrating an improper principal relationship between the HTG applications, the relief specified in the RFA (the specifications of which were not challenged) would have been the conversion of the offending HTG applications to Priority II applications. The relief would not have been the removal of those applications from the pool of applications, nor would it have affected the assignment of lottery numbers to any of the applicants, including HTG. The Petitions do not allege any error in scoring or ineligibility with respect to the three applications preliminarily approved for funding.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding that Petitioners lack standing and dismissing the Petitions with prejudice. DONE AND ENTERED this 3rd day of April, 2020, in Tallahassee, Leon County, Florida. S JAMES H. PETERSON, III Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of April, 2020. COPIES FURNISHED: Maureen McCarthy Daughton, Esquire Maureen McCarthy Daughton, LLC Suite 3-231 1400 Village Square Boulevard Tallahassee, Florida 32312 (eServed) 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) Donna Elizabeth Blanton, Esquire Brittany Adams Long, Esquire Radey Law Firm, P.A. Suite 200 301 South Bronough Street Tallahassee, Florida 32301 (eServed) Hugh R. Brown, General Counsel Betty Zachem, Esquire Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301-1329 (eServed) M. Christopher Bryant, Esquire Oertel, Fernandez, Bryant & Atkinson, P.A. Post Office Box 1110 Tallahassee, Florida 32302-1110 (eServed) J. Stephen Menton, Esquire Tana D. Storey, Esquire Rutledge Ecenia, P.A. 119 South Monroe Street, Suite 202 Post Office Box 551 (32302) Tallahassee, Florida 32301 (eServed) Corporation Clerk Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301-1329 (eServed)
The Issue The issues in this bid protest are whether, in making the decision to award funding pursuant to Request for Applications 2017-103, Housing Credit and State Apartment Incentive Loan ("SAIL") Financing to Develop Housing in Medium and Large Counties for Homeless Households and Persons with a Disabling Condition (the "RFA"), Florida Housing Finance Corporation ("Florida Housing" or "Respondent"), acted contrary to a governing statute, rule, or solicitation specification; and, if so, whether such action was clearly erroneous, contrary to competition, arbitrary, or capricious. The question of whether the application of Northside Commons Residential, LLC ("Northside"), met the requirements of the RFA with respect to demonstrating the availability of water and sewer services as of the Application Deadline is the only question at issue in this case. No other parts of its Application are being challenged, and the parties all agree that its Application was otherwise properly scored. No parties have raised objections to any parts of Warley Park's application, and all parties agree that its Application was properly scored.
Findings Of Fact The Parties Petitioner Warley Park, Ltd., is the applicant entity of a proposed affordable housing development to be located in Seminole County, Florida. Petitioners Warley Park Developer, LLC, and Step Up Developer, LLC, are Developer entities as defined by Florida Housing in Florida Administrative Code Rule 67-48.002(28). Northside is a Florida limited liability company based in Miami-Dade County, Florida, in the business of providing affordable housing. Florida Housing is a public corporation created pursuant to section 420.504, Florida Statutes. Its 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 Programs The low income housing tax credit program was enacted to incentivize the private market to invest in affordable rental housing. These tax credits are awarded competitively to housing developers in Florida for rental housing projects which qualify. These credits are then normally sold by developers for cash to raise capital for their projects. The effect of this is to reduce the amount that the developer would have to borrow otherwise. Because the total debt is lower, a tax credit property can (and must) offer lower, more affordable rents. Developers also covenant to keep rents at affordable levels for periods of up 50 years as consideration for receipt of the tax credits. SAIL provides low-interest loans on a competitive basis to affordable housing developers each year. This money often serves to bridge the gap between the development's primary financing and the total cost of the development. SAIL dollars are available to individuals, public entities, not-for-profit, or for-profit organizations that propose the construction or substantial rehabilitation of multifamily units affordable to very low-income individuals and families. Florida Housing is authorized to allocate housing tax credits, SAIL funding, and other funding by means of request for proposal or other competitive solicitation in section 420.507(48) and adopted chapter 67-60 to govern the competitive solicitation process for several different programs, including the program for tax credits. Chapter 67-60 provides that Florida Housing allocate its housing tax credits, which were made available to Florida Housing on an annual basis by the U.S. Treasury, through the bid protest provisions of section 120.57(3). The RFA 2017-103 Housing tax credits and SAIL funding are made available through a competitive application process commenced by the issuance of a RFA. A RFA is equivalent to a "request for proposal" as indicated in rule 67-60.009(3). The RFA at issue here is RFA 2017-103, which was issued on March 22, 2017. A modification was issued on April 11, 2017, and responses were due April 20, 2017. Through the RFA, Florida Housing seeks to award up to an estimated $6,075,000 of housing tax credits, along with $11,500,000 of SAIL financing, to qualified applicants to provide affordable housing developments. A review committee, made up of Florida Housing staff, reviews and scores each application. Florida Housing scored applicants in six areas worth a total of 145 points: General Development Experience; Management Company Experience with Permanent Supportive Housing; Tenant Selection for Intended Residents; Community-Based General Services and Amenities Accessible to Tenants; Access to Community-Based Resources and Services that Address Tenants' Needs; and Approach Toward Income and Credit Status of Homeless Households Applying for Tenancy. Florida Housing scored Northside as the highest scoring applicant, awarding it 128 points. Warley Park was the fourth highest scored applicant with 112 points. These scores are presented in a public meeting and the committee ultimately makes a recommendation as to which projects should be funded. This recommendation is presented to Florida Housing's Board of Directors ("the Board") for final agency action. On June 16, 2017, Petitioners and all other participants in RFA 2017-103 received notice that the Board had determined which applications were eligible or ineligible for consideration for funding and selected certain applications for awards of tax credits, subject to satisfactory completion of the credit underwriting process. Such notice was provided by the posting of two spreadsheets, one listing the "eligible" and "ineligible" applications and one identifying the applications that Florida Housing proposed to fund, on Florida Housing's website, www.floridahousing.org. Florida Housing announced its intention to award funding to three developments, including Northside. Warley Park's application was deemed eligible, but it was not selected for funding. The RFA at Section Four A.5.g. requires the applicant to demonstrate its "Ability to Proceed" by including the following as attachments to its application: Availability of Water. The Applicant must demonstrate that as of the Application Deadline water is available to the entire proposed Development site by providing as Attachment 9 to Exhibit A: The properly completed and executed Florida Housing Finance Corporation Verification of Availability of Infrastructure – Water form (Form Rev. 08-16); or A letter from the water service provider that is Development-specific and dated within 12 months of the Application Deadline. The letter may not be signed by the Applicant, by any related parties of the Applicant, by any Principals or Financial Beneficiaries of the Applicant, or by any local elected officials. Availability of Sewer. The Applicant must demonstrate that as of the Application Deadline sewer capacity, package treatment or septic tank service is available to the entire proposed Development site by providing as Attachment 10 to Exhibit A: The properly completed and executed Florida Housing Finance Corporation Verification of Availability of Infrastructure – Sewer Capacity, Package Treatment, or Septic Tank form (Form Rev. 08-16); or A letter from the waste treatment service provider that is Development-specific and dated within 12 months of the Application Deadline. The letter may not be signed by the Applicant, by any related parties of the Applicant, by any Principals or Financial Beneficiaries of the Applicant, or by any local elected officials. (emphasis added). Section 5.g. of Exhibit A to RFA 2017-103, the Application and Development Cost Pro Forma, requires that the applicant include the following information: Ability to Proceed: As outlined in Section Four A.5.g. of the RFA, the Applicant must provide the following information to demonstrate Ability to Proceed: Availability of Water. The Applicant must provide, as Attachment 9 to Exhibit A, an acceptable letter from the service provider or the properly completed and executed Florida Housing Finance Corporation Verification of Availability of Infrastructure – Water form (Form Rev. 08-16). Availability of Sewer. The Applicant must provide, as Attachment 10 to Exhibit A, an acceptable letter from the service provider or the properly completed and executed Florida Housing Finance Corporation Verification of Availability of Infrastructure – Sewer Capacity, Package Treatment, or Septic Tank form (Form Rev. 08-16). The Verification of Availability of Infrastructure – Sewer Capacity, Package Treatment, or Septic Tank form requires the service provider to certify that on or before the submission deadline for the RFA, "Sewer Capacity or Package Treatment is available to the proposed Development." Similarly, the Verification of Availability of Infrastructure – Water form requires the service provider to certify that on or before the submission deadline for the RFA, "Potable water is available to the proposed Development." Each form also includes the following caveat: To access such [waste treatment] [water] service, the Applicant may be required to pay hook-up, installation and other customary fees, comply with other routine administrative procedures, and/or install or construct line extensions and other equipment, including but not limited to pumping stations, in connection with the construction of the Development. The RFA does not define the term "Development- specific," and the term is not used in Section 5.g. of Exhibit A to RFA 2017-103 where the requirement for the water and sewer letters is included. Further, the term "Development-specific" is not defined in any Florida Housing rule. Miami-Dade County has had a longstanding practice of refusing to complete Florida Housing's water and sewer verification forms. Florida Housing added the water and sewer letter as an additional method to demonstrate availability in light of the county's refusal. Thus, an applicant, such as Northside, has no alternative when proposing a Miami-Dade project other than providing a water and sewer letter as opposed to Florida Housing's Verification form. Northside's Water and Sewer Letter Accordingly, in response to this RFA requirement, Northside submitted a letter from Miami-Dade County Water and Sewer Department as Attachment 9 to its application. The letter was sought by Oscar Sol, one of the principals of the developer working with the applicant in the project at issue in this case. The WASA letter at issue in this case was dated December 12, 2016. It was addressed to "Northside Commons LTD," and referenced water and sewer availability for "Northside Commons," construction and connection of 108 apartments, located at 8301 Northwest 27th Avenue, Miami-Dade County, Florida, Folio #30-3110-000-0210. The identical WASA letter was submitted as Attachments 10 and 11 to application 2017-155C in response to a prior RFA, RFA 2016-114. That prior application was submitted by Northside Commons, Ltd., for a 108-unit elderly development called Northside Commons, located at 8301 Northwest 27th Avenue, Miami- Dade County, Florida, Folio #30-3110-000-0210. The application deadline for RFA 2016-114 was December 15, 2016. In the present case, Northside's application for RFA 2017-103, application 2017-254CSN, was submitted by Northside Commons Residential, LLC. It was for an 80-unit development for homeless persons and persons with disabling conditions, also to be called "Northside Commons," located at 8301 Northwest 27th Avenue, Miami-Dade County, Florida, Folio #30-3110-000-0210. The application deadline for RFA 2017-103 was April 20, 2017. The WASA letter contains several paragraphs of details about hookups to water and sewer service, and also includes the following boilerplate language: "This letter is for informational purposes only and conditions remain in effect for thirty (30) days from the date of this letter. Nothing contained in this letter provides the developer with any vested rights to receive water and/or sewer service." Warley Park raised three issues regarding the WASA letter. First, was the letter valid for more than 30 days after it was signed? Second, did the letter meet the requirement of the RFA that it be "development specific?" Third, did the letter demonstrate the availability of sewer services? Was the WASA letter valid for more than 30 days after it was signed? Florida Housing and Northside contend that there is no provision in the WASA letter stating that it becomes "invalid" after 30 days, or that water and sewer services will not be available after 30 days. Douglas Pile, the representative for Miami-Dade County, testified that the second and third paragraphs of the letter included the conditions necessary to service the availability of water and sewer, and that it was these conditions that remained in effect for 30 days. He described the purpose of the 30-day language as follows: We're not saying that availability disappears or terminates after 30 days. We're just saying this letter is good for informational purposes for 30 days. We don't want people to come back a year later and say I bought this property based upon this letter of availability saying I have water and sewer under certain conditions, and then a year later the conditions are different and maybe they have to put in a water main extension or maybe their local pump station is in moratorium. When asked specifically whether the entire letter was valid for only 30 days, he responded, "Right. Well, the conditions are – the nearby water and sewer facilities that the project would connect to." Mr. Pile explained that the letter is "a snapshot of what our facilities are at the time they make the request." He further stated that: the letter . . . has to have an expiration date either explicit or implicit. If a utility is going to give a letter saying they have water and sewer availability, that cannot be forever, you know. You assume a natural termination point . . . we just explicitly say this letter is good for 30 days. In its Pre-Hearing Position Statement, Florida Housing argued that it did not interpret this language to mean that the letter became invalid after 30 days. However, according to Mr. Reecy,1/ there was no "interpretation" done by Florida Housing. Specifically, when asked how Florida Housing interpreted the phrase, he stated: We have basically ignored that phrase. We actually do not know what--given the context of this situation, how, within 30 days, the--that information is only good for 30 days. So we have not considered that to be a relevant factor in our consideration of the information provided in the letter. A plain and common reading of the quoted language indicates Miami-Dade limited the validity of the information in the letters to 30 days. Florida Housing provided no explanation for its decision to ignore the language and made no attempt to inquire of Miami-Dade County as to what it intended by including the language. This 30-day limitation is generally known by the applicants and nearly every previously funded application included a letter from Miami-Dade County dated within 30 days of the application deadline. Only one Miami-Dade WASA letter submitted by applicants within the last two RFAs was dated outside of the 30-day window. That letter was deemed ineligible for other reasons. Had Petitioner wanted to demonstrate availability as of the application deadline, it only needed to request a letter from Miami-Dade County within the 30 days prior to the application deadline, giving Miami-Dade sufficient time to respond. In fact, the letter was initially submitted as part of a response to RFA 2016-114, with a due date of December 15, 2016. Because the letter was issued on December 12, 2016, it remained valid through the application deadline for RFA 2016-114. There is no limit to the number of times a developer can obtain a letter of availability from Miami-Dade County. The requirements of the RFA are clear that water and sewer availability must be shown "as of the Application Deadline." Because the WASA letter submitted with Petitioner's Application only provided a snapshot of availability for a 30-day window after the issuance of the letter (or until January 11, 2017), the letter failed to address the availability of water or sewer services as of April 20, 2017. As a practical matter, the WASA letter provides that water hook-up is readily available to existing infrastructure and sewer availability is dependent upon a developer building a pumping station. It could be inferred that these conditions would remain available at this location for 12 months. However, the testimony of Mr. Pile makes clear that Miami-Dade County is not willing to make that assumption for a period beyond 30 days due to the possibility of intervening events.2/ Presumably, this is why the vast majority of applicants for this type of RFA secures and provides a Miami-Dade WASA letter dated within 30 days of the RFA application deadline. Because the WASA letter was not valid beyond January 11, 2017, Petitioner cannot demonstrate availability of water and sewer as of the Application Deadline. The fact that the WASA letter was no longer valid is fatal to Petitioner's application in that it failed to satisfy a mandatory requirement of RFA 2017-103, i.e., the availability of water and sewer services. Was the WASA letter "development specific?" The RFA requires that the Applicant demonstrate water and sewer service availability for "the entire proposed Development site," and it also requires that the letter from the service provider be "Development-specific." The application in this matter was filed by Northside Commons Residential, LLC, for an 80-unit development for the homeless and persons with disabling conditions. However, the WASA letter was issued to, and discussed the availability of water and sewer service for, a different entity, Northside Commons, Ltd., the applicant for a 108-unit elderly development. According to Mr. Reecy, the reuse of a letter that was previously submitted in a different application does not follow the "letter" of the criteria in the RFA. Florida Housing and Northside even agree that the letter does not reference the specific proposed development that is at issue and instead focuses on the location of the proposed development. Mr. Sol, Northside's representative, suggested that it is "irrelevant" to which entity the letter is issued because what is relevant is whether water and sewer availability exists. However, as stated by Mr. Reecy, what Florida Housing considers when determining whether a letter of availability is "Development-specific" is the location, the number of units, and the applicant. Because the WASA letter was issued to a entirely different applicant, based upon Mr. Reecy's testimony, it is not "Development-specific." However, Mr. Reecy noted that such a letter could be considered a Minor Irregularity if there is some commonality between the applicant entities. Northside argues that the failure of the letter to be "Development-specific" should be waived as a Minor Irregularity. This issue was not considered during scoring, nor was it a determination made by the Board of Florida Housing prior to awarding funding to Northside. Mr. Reecy acknowledged that it is a judgment call when determining whether a letter addressed to a different entity with different principals is a Minor Irregularity. That call depends upon the number of common principals. While the number of principals that must be the same is discretionary, there must be at least some commonality of principals for it to be considered a Minor Irregularity. The principals of Northside Commons, Ltd., the entity to which the letter was actually issued and the applicant that originally submitted the WASA letter, are completely different from the principals of Northside Commons Residential, LLC. Despite a full understanding of all the similarities between the two applications and the differences in the requirements of the RFA and being given a number of opportunities to change his position, Mr. Reecy repeatedly declined to do so. Mr. Sol suggested that it is common practice for Florida Housing to accept letters issued to entities other than the applicant and with different principals. After hearing Mr. Sol's opinion and discussing the issue further with Northside, Mr. Reecy remained steadfast in his position that the error in the Letter could not be waived as a Minor Irregularity. At the request of Northside, Mr. Reecy agreed to review past practices of the agency during a break in the hearing. As stated by counsel for Florida Housing, if it is established that Florida Housing has a long-standing practice of accepting similar letters, then the question is whether Northside Commons may rely upon that practice. The review during the break was limited to the issue of whether Florida Housing had previously accepted Miami-Dade letters addressed to an entity who was not the applicant and who shared no principals in common with the applicant. No such long- standing practice was demonstrated. Mr. Reecy directed staff to pull all of the Miami-Dade letters of availability from the last two RFAs, to determine, first, whether or not there were sewer letters addressed to someone other than the applicant entity. Second, for those so identified, staff was to compare the principals of the applicant entity and the entity that was the addressee for commonality. Mr. Reecy was provided a list of approximately a dozen letters from the past several RFAs that compared the applicant entity and the addressee entity. This list did not identify whether or not the letters were submitted by successful credit applicants. Based upon this list, Mr. Reecy then reviewed each letter to determine whether or not it was issued to the applicant. He then reviewed the principals list for the applicant as identified in the application and compared that to data from the state of Florida's Sunbiz.org website for the addressee of the letter. Mr. Reecy compared this information to determine if the two had any principals in common. After reviewing this information, Mr. Reecy recanted his earlier testimony and stated that he felt that Florida Housing historically accepted letters with addressees that were not the applicant entity and did not have common principals. Mr. Reecy further testified that based upon this understanding of Florida Housing's past practice, the Northside's letter should be accepted. The information Mr. Reecy reviewed, specifically that obtained from the state of Florida's Sunbiz.org website, did not demonstrate, as Mr. Reecy believes, that Florida Housing previously accepted Miami-Dade WASA letters from applicants in a similar position to that of Northside. Notably, Florida Housing does not accept documentation from the Sunbiz.org website to demonstrate the principals of the Application as required by this and other RFAs. The Sunbiz.org website does not identify the level of detail of principals which Florida Housing requests in its "Principals of the Applicant and Developer(s) Disclosure Form". Further, even if Sunbiz.org did identify all of the principals Florida Housing requires to be disclosed, in this case, the Sunbiz.org information reviewed was dated 2017.3/ As this information was filed after the application deadlines for the respective RFAs, it fails to identify any of the principals related to the entities in the "comparable" letters for the 2015 and 2016 RFAs. No information was provided as to any of the principals in either 2015 or 2016. Accordingly, Mr. Reecy and Mr. Sol's belief that Florida Housing had previously accepted letters in a similar position to that of Northside Commons' letter has not been demonstrated. Because Mr. Reecy's new position, that Northside Commons' letter should be accepted, is based upon this incorrect understanding, and the alleged prior agency action was not demonstrated, Mr. Reecy's initial testimony is found to be more credible. Therefore, the record demonstrates that the WASA letter was not "Development-specific" and, therefore, contrary to the solicitation specifications. Did the letter demonstrate availability of sewer services? The RFA requires each applicant to provide a form or letter demonstrating that "as of the Application Deadline sewer capacity, package treatment or septic tank service is available to the entire proposed Development site." Petitioner presented the testimony of Jon Dinges, P.E., an environmental engineer with expertise in designing wastewater systems who was accepted as an expert in civil engineering, specifically in the area of sewer infrastructure and design. Mr. Dinges' testimony was simply that the problem with the WASA letter in this case is that it does not actually say that capacity is available. In a prior RFA, Florida Housing rejected an application that included a Miami-Dade WASA letter because it specifically stated that no gravity sewer capacity analysis had been conducted. According to Mr. Dinges, without conducting a gravity sewer capacity analysis, it is not possible to determine whether capacity, if any, exists. However, the RFA makes no mention of requiring a gravity sewer capacity analysis to demonstrate availability. Mr. Reecy testified that Florida Housing has been accepting WASA letters without mention of gravity analysis from Miami-Dade County for many years. He stated that the detailed description of how a proposed project could connect to an existing sewer service met the requirement of the RFA that the Applicant demonstrate the availability of sewer service. He also testified that if Florida Housing were to change its position and determine that the form of the letter was not adequate to demonstrate capacity, it would do so in a public process. The testimony was clear that Florida Housing does not do any independent analysis of whether water and sewer service is actually available to a proposed development, but instead relies on the expertise of the local government to do this analysis. Applicants are not required to include or demonstrate the specific requirements or technical specifications of how a connection to water or sewer services will be made. This interpretation is consistent with the specifications of the RFA.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Florida Housing Finance Corporation enter a final order amending its preliminary decision awarding funding to Warley Park by: finding Northside ineligible for funding; and awarding funding to Warley Park as the next highest scoring eligible applicant. DONE AND ENTERED this 19th day of October, 2017, in Tallahassee, Leon County, Florida. S MARY LI CREASY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 19th day of October, 2017.
The Issue The issue for determination is whether Respondent's intended decision to fund the application of Petitioner Duval Park, Ltd. (Duval Park), is contrary to its governing statutes, rules, policies, or the proposal specifications.
Findings Of Fact Florida Housing is a public corporation that administers low-income housing tax credit programs. As of July 1, 2012, Florida Housing was authorized to use up to ten percent of its annual allocation of low-income housing tax credits to fund high-priority affordable housing developments selected through a competitive solicitation process, such as the RFP. See Ch. 2012-127, § 4, Laws of Fla. (2012)(creating § 420.507(48), Fla. Stat.). Examples of "high priority" affordable housing developments include housing for veterans and their families, and housing for persons with special needs. Prior to issuing the RFP, Florida Housing conducted some demonstration RFPs for developments serving special needs households, but the RFP represents the first actual use of the competitive solicitation process to award low-income housing tax credits. Previously, low-income housing tax credits were awarded through what was known as the universal application cycle, a process described as cumbersome, lengthy, and inflexible. As part of the universal application cycle, an applicant could indicate by checking a box that it intended to provide affordable housing to special needs households. However, the general universal application process did not lend itself to a targeted proposal detailing how the unique needs of specific special-needs population groups would be addressed. The competitive solicitation process was seen as a way to allow applicants to respond to particular high-priority development needs identified by Florida Housing. In setting forth their development proposals for defined target population groups, applicants would be able to tell their story: applicants would identify and describe the unique needs and household characteristics of the specific special-needs population group that is the focus of their application; applicants could detail and demonstrate their know-how with regard to the resources available in the community where the proposed development is located, to meet the unique needs of the target population; and applicants would be able to discuss the relevant experience of the developer and management teams that make them well-suited to carry out the proposed development and meet the unique needs of the targeted population group. The RFP The RFP solicited responses or applications proposing the development of "permanent supportive housing" (as defined in the RFP) for persons with special needs. Florida Housing issued the RFP with the expectation of funding two or more proposals. The RFP provided that applicants could propose developments for persons with special needs generally, or applicants could choose to focus on serving veterans with special needs. If an applicant chose to focus on veterans with special needs, the applicant was required to pick one of two specific subcategories: either veterans with service-connected disabling conditions transitioning from a Veterans' Administration (VA) hospital or medical center; or chronically homeless/ institutionalized veterans with disabling conditions who were significant users of public resources, such as emergency care and shelter. The RFP specified that it was Florida Housing's goal to fund at least one development proposing to serve veterans with special needs. Preference would be given to proposed developments focusing on serving special-needs veterans in the first subcategory, i.e., veterans transitioning from VA hospitals and medical centers. Duval Park, Osprey, and five other applicants timely submitted applications in response to the RFP. Both Duval Park and Osprey proposed permanent supportive housing developments to serve veterans with special needs transitioning from VA hospitals and medical centers. As described in the RFP, an evaluation committee comprised of Florida Housing employees reviewed and scored the applications. Members of the evaluation committee were instructed to independently evaluate and score the application sections assigned to them. The RFP specified that at least one public meeting would be held at which the evaluators were allowed to discuss their evaluations, make any adjustments deemed necessary to best serve the interests of Florida Housing's mission, and develop recommendations for the Florida Housing Board of Directors. For most application sections, a single evaluator was assigned to review and score the seven responses. For example, Mr. Aldinger was the evaluator who reviewed and scored the two application sections addressing developer and management company experience with permanent supportive housing. Two application sections were assigned for evaluation and scoring by two evaluation committee members. The two evaluators first independently reviewed and scored all seven application responses for the two sections. Then the two evaluators met in a noticed public meeting to conduct a "reconciliation process," in which they discussed their evaluations of the responses to the two application sections and reconciled differences in their scores. The evaluation committee ultimately concluded that Duval Park's application was entitled to a total of 119 points out of 133 possible points, and that Osprey's application was entitled to 117 points. A large gap in scoring separated these two highest-scoring applicants from the other five applicants; the next highest score was 95 points. The evaluation committee presented its recommendation to the Florida Housing Board of Directors, along with a summary of the scores assigned by the evaluation committee. The committee's recommendation was that Florida Housing should award funding to Duval Park for its proposed development. Florida Housing's Board adopted the committee's recommendation. Osprey's Protest Issue Remaining for Determination Following the parties' withdrawal of most of their protest issues, the only remaining disputed issue for resolution in this proceeding is Osprey's claim that Duval Park should have received "at least three" less points than Osprey for the sections addressing developer and management company experience.2/ Mr. Aldinger's assignment as the evaluation committee member responsible for reviewing and scoring these application sections comports with his expertise. Mr. Aldinger has served as Florida Housing's supportive housing coordinator since 2006. In that role, he has been coordinating with governmental bodies and industry stakeholders to develop strategies for focusing Florida Housing's resources on the provision of supportive housing to special needs households. The RFP was developed in furtherance of this effort, and Mr. Aldinger was one of the RFP's authors. Mr. Aldinger assigned the same number of points to the Duval Park and Osprey applications in both sections. Each application received 24 out of 25 possible points for developer experience, and all ten of the points available for management company experience. Osprey's contention is that its narratives for these two application sections show its objective superiority. Osprey's "objective superiority" argument is primarily based on a quantitative comparison, in which its narrative showed experience developing and operating a larger number of permanent supportive housing units than did Duval Park's narrative. Osprey also contends that its narrative was qualitatively better in providing greater detail regarding its experience developing and operating permanent supportive housing. As part of its argument, Osprey contends that Duval Park strayed from the RFP instructions by describing experience with more than just permanent supportive housing, but that the evaluator gave Duval Park credit anyway. The RFP instructions provide the starting point to assess Osprey's contentions. First, the RFP provided the following definition of "permanent supportive housing": Rental housing that is affordable to the focus households with household incomes at or below 60 percent of area median income (AMI), that is leased to the focus households, for continued occupancy with an indefinite length of stay as long as the Permanent Supportive Housing tenant complies with the lease requirements. Permanent Supportive Housing shall facilitate and promote activities of daily living, access to community-based services and amenities, and inclusion in the general community. Permanent Supportive Housing shall strive to meet the needs and preferences of the focus households. This RFP definition was acknowledged to be somewhat broader than how that phrase might be understood by some industry models. For example, Mr. Aldinger testified that transitional housing could be permanent supportive housing within the RFP definition, as long as a lease agreement is used. Permanency is not required, only an "indefinite" length of stay. The fact that leases are for finite terms of 12 or 24 months would not be dispositive; rather, the length of stay would be considered "indefinite" if tenants are not required to leave at the end of their lease terms, if they are not ready to leave and are otherwise in compliance with the lease terms. The provision of supportive services to meet the needs of the focus population is a key part of the RFP definition. The RFP instructions for the developer experience narrative were as follows: Developer Experience with Permanent Supportive Housing (Maximum 25 points): The Applicant must describe the experience of the Developer, co-Developer, and/or Principal in developing and operating Permanent Supportive Housing, and more specifically, housing for the households the Applicant is proposing to serve. Describe the role(s) and responsibilities of any Developer, co- Developer, and/or Principal listed in the Applicant's responses to Items A.2.c. and 3.a. of Section 6 of the RFP, related to the proposed Development, and describe the experience and qualifications relevant to carrying out the roles and responsibilities for this proposed Development. (emphasis added). The RFP instructions for the first application section must also be considered because they tie into the developer/ manager experience sections. The instructions for the first application section required the applicant to provide a detailed description of the focus population group, and the instructions also explained how that description would be used, as follows: [T]he Applicant must provide a detailed description of the resident household characteristics, needs, and preferences of the focus population(s) the Applicant is proposing to serve. This description will provide a point of reference for the Corporation's evaluation and scoring of the Application, providing the foundation for the appropriateness of the experience of the Developer(s) and Management Company, proposed Construction Features and Amenities, Resident services and Access to Community Based Services and Amenities. (emphasis added). As part of this first application section, applicants focusing on special-needs veterans transitioning from VA facilities were required to designate the specific VA facilities with which the applicants expected to be working and coordinating. Osprey, whose proposed development is in Liberty City, Miami-Dade County, designated Miami VA Healthcare System (Miami VA) in Miami. Duval Park, whose proposed development is in unincorporated Pinellas County, designated Bay Pines VA Healthcare System (Bay Pines VA) in Pinellas County, as well as the James A. Haley Veterans Hospital and the Tampa Polytrauma Rehabilitation Center, both in Tampa, Hillsborough County. Osprey and Duval Park both provided extensive narratives describing their target populations and detailing the unique needs and preferences of their target populations. Osprey's narrative described the information learned from interviewing social workers in each of the programs under the umbrella of the Miami VA, with whom Carrfour would be coordinating for transitioning veterans. Osprey's narrative also described a VA grant to Carrfour of $1,000,000 per year for supportive services for veteran families, through which Carrfour provides a comprehensive case management program called Operation Sacred Trust. This program has an outreach team that works closely with social workers throughout the Miami VA. The Duval Park narrative discussed and documented the work of the St. Petersburg Housing Authority Wounded Warrior Community Advisory Group to assess housing needs for veterans. Developer-partner ServiceSource's director of housing was a participant. As part of the assessment, the advisory group conducted veterans' focus groups to hear from the veterans themselves regarding their needs and preferences, including the particular supportive services needed to allow veterans to transition to an independent living setting. The Duval Park narrative also described the information about transitioning veterans learned through ongoing projects with the VA facilities designated for the proposed development, including a Memorandum of Understanding between James A. Haley Veterans Hospital and ServiceSource's Warrior Bridge program. As called for by the RFP instructions, Mr. Aldinger used each application's detailed description of the target population in section one as the foundation for evaluating that application's developer and management experience narratives. The experience narratives were properly evaluated in accordance with the RFP instructions in the context of each applicant's specific proposal to focus on a defined population group transitioning from designated VA facilities, whose unique needs were fleshed out in the first section narratives. Mr. Aldinger reviewed and was impressed with both Osprey's and Duval Park's developer experience narratives, for good reason. As he explained, the two responses took different approaches, but both provided good detail in the limited space allotted. Osprey's narrative described Carrfour, a non-managing member of the applicant entity that will be the developer and, through a subsidiary, manager of the proposed development. Carrfour is a not-for-profit organization created in 1993 by the Greater Miami Chamber of Commerce, with the mission of developing permanent supportive housing to end homelessness. In setting forth Carrfour's experience, the Osprey narrative took a quantitative approach by enumerating Carrfour's 16 mixed-use housing development projects that included permanent supportive housing. Some details were provided for each development, such as the funding sources, the number of total units, how many of those units were permanent supportive housing units, and how many of the units were currently occupied by veterans. However, the narrative did not explain whether any supportive services provided for these developments were specifically geared to meeting the special needs of veterans. The types of supportive services were not identified for any of the 16 developments. For three developments, the description stated only that "a full array of supportive services" was provided or that "on-site supportive services" were provided. Supportive services were not mentioned in the descriptions of the other 13 developments. Other than providing the number of units then occupied by veterans, Osprey's developer experience narrative had no information to demonstrate experience providing housing specifically developed to meet the unique needs of the focus population for its proposed development: veterans with service- related disabling conditions transitioning from the Miami VA. Duval Park's developer experience narrative did not match Osprey's approach of enumerating individual permanent supportive housing developments and quantifying the units in each development. Duval Park's response chose instead to describe in general aggregate terms the permanent supportive housing experience of the developer-partners. The Duval Park narrative went into more detail to highlight the developer team experience with housing projects specifically designed to meet the unique needs of special-needs veterans transitioning from the VA facilities designated in its application, something lacking in the Osprey response. For example, Duval Park's response described developer- partner Boley's substantial experience since it was founded in 1970, in developing more than 500 units of permanent supportive housing in Pinellas County. The narrative also described the even longer-standing experience of developer-partner ServiceSource, founded in 1959 with a mission to provide services to needy people with disabilities. Initially providing employment, training, rehabilitation, and support services (relevant to the roles described for this developer-partner in operating the proposed development), ServiceSource began a housing program in 1995. ServiceSource's permanent supportive housing development experience was summarized in shorthand as including 20 separate "HUD 202/811 awards." The unrefuted testimony established that this shorthand reference was properly understood by Mr. Aldinger to signify 20 permanent supportive housing developments for persons with disabilities. Two specific supportive housing projects for veterans, developed and operated by Boley working with the Bay Pines VA, were detailed in Duval Park's developer experience narrative. In 2007, Bay Pines VA awarded Boley a contract for "Safe Haven Model Demonstration Project" services, described in the notice of contract award as "a specialty model of HCHV residential care as mandated by the . . . zero-tolerance policy to end homelessness within the Veteran population." Through this contract, Boley acquired and rehabilitated a former 20-unit skilled nursing facility to establish Morningside Safe Haven (Morningside), which provides housing and a residential treatment program with counseling for veterans. Half of the 20 veterans housed there have service-connected disabling conditions, and one-third of the veterans transitioned from VA facilities. Pinellas County and HUD provide funding support for this VA pilot program. Osprey contends that Boley's experience developing and operating Morningside should have been ignored in scoring Duval Park's developer experience, because a residential treatment program is not permanent supportive housing. However, according to Mr. Humberg, Morningside is considered permanent supportive housing under HUD guidelines. Veterans sign a 12-month lease to reside in a unit. Although the intent is that tenants will complete treatment and move on, tenants are not required to leave at the end of their 12-month lease terms; they can stay as long as they need to, if they are otherwise compliant with their leases. Even if Morningside did not technically meet the RFP definition of permanent supportive housing, the discussion of Morningside still would be appropriate for this narrative, pursuant to the RFP instructions. The Morningside experience demonstrates Boley's "experience and qualifications relevant to carrying out" its roles and responsibilities for the proposed development, identified in the same narrative to include mental health counseling, case management, and VA coordination. Also described in Duval Park's narrative was Boley's 2010 development of Jerry Howe Apartments, with 13 units developed specifically for formerly homeless veterans, many of whom have service-connected disabling conditions. Funding for this development was provided by the VA and the City of Clearwater. Boley coordinates with Bay Pines VA in operating this development, with Bay Pines VA providing screening and referral services to identify veterans who are candidates to lease apartment units. Boley's staff members work closely with the veteran tenants to provide supportive services, preparing them for more independent living. Osprey quibbles with whether Jerry Howe Apartments technically qualifies as permanent supportive housing, noting that while the veteran tenants do sign a lease, the intent of the project is to serve as transitional housing for up to 24 months. However, Mr. Aldinger explained that transitional housing would meet the RFP's broad definition of permanent supportive housing if tenants are not required to leave after a finite period of 12 or 24 months. Mr. Humberg confirmed that veterans residing at Jerry Howe Apartments are not required to leave after 24 months, if they are not ready to move on. Mr. Humberg also clarified that Boley owned the apartments before they were redeveloped in 2010, specifically to meet the needs of veterans. Before the 2010 redevelopment, Boley operated the property as permanent supportive housing, just not specifically for veterans. In fact, two of the units remain occupied by prior non-veteran permanent supportive housing tenants, who did not want to move out in 2010 when the property was redeveloped. It is not necessary to debate whether Jerry Howe Apartments technically is permanent supportive housing, although the evidence demonstrated that the development is and has been permanent supportive housing, as defined in the RFP. Certainly, this project demonstrates Boley's experience and qualifications relevant to carrying out its roles and responsibilities for the proposed development and, therefore, is worthy of consideration as part of the developer experience narrative. Duval Park's developer experience narrative also detailed specific veterans' supportive service programs developed by both Boley and ServiceSource. The descriptions of these programs demonstrate experience and qualifications directly relevant to the described roles and responsibilities for Boley and ServiceSource with respect to the proposed development. Duval Park's experience narrative details the many accomplishments of ServiceSource's nationally-recognized Warrior Bridge program, which provides a wide variety of supportive services to veterans. Noteworthy is a 2012 award of over $1,000,000 from the City of St. Petersburg to ServiceSource to expand housing options for wounded veterans. Under this program, in the past year, ServiceSource partnered with Home Depot to modify 16 homes and facilities serving wounded veterans in the Tampa Bay area to increase accessibility, safety, and energy efficiency. This experience translates directly to the role ServiceSource will serve as a participant in designing the proposed housing development specifically to accommodate the unique accessibility and other needs of special-needs veterans with disabling conditions. ServiceSource's Warrior Bridge program also operates the "Veterans' Mall" in the vicinity of the proposed development. At the Veterans' Mall, household appliances, cookware, business attire, and necessities are made available to wounded veterans transitioning to more independent housing settings. According to Duval Park's narrative, the Veterans' Mall has served more than 325 veterans since opening in October 2011, through partnerships with Bay Pines VA and local community organizations serving veterans. ServiceSource's representative testified that ServiceSource recently secured a five-year commitment from T.J. Maxx to stock the Veterans' Mall with new suits for veterans going on job interviews. The Duval Park developer experience narrative regarding the Warrior Bridge program portrays ServiceSource's experience and qualifications to carry out its described roles and responsibilities for the proposed development, which include community outreach, physical disability counseling, employment assistance, job training, and VA coordination. Another program described in Duval Park's developer experience narrative is Boley's Homeless Veterans Reintegration Program. This is a case management, training, and employment program specifically for veterans, conducted by Boley case managers and employment specialists, demonstrating that they are well-suited to carry out the described roles and responsibilities for Boley with respect to the proposed development, which includes the lead case management role. A reasonable person attempting to compare the two developer experience narratives might say that Osprey's narrative demonstrated greater quantitative experience in developing more units of permanent supportive housing generally, but that Duval Park's narrative demonstrated better qualitative experience among the developer-partners in developing supportive housing specifically for veterans with special needs. Duval Park's narrative was more directly focused on specific experience developing supportive housing that addresses the unique needs of those special-needs veterans who are transitioning from VA facilities. In addition, Duval Park's narrative better demonstrated experience and qualifications among the developer- partners that are directly relevant to their described roles and responsibilities in carrying out the proposed development. Both narratives were very good and responsive to the RFP instructions, while taking very different approaches. Mr. Aldinger reasonably applied the RFP instructions, reasonably evaluated the two narratives, and reasonably judged them both to be deserving of the same very high score. The credible evidence does not support Osprey's contention that its developer experience narrative was superior, or that Duval Park's narrative strayed beyond the RFP instructions, or that Duval Park's narrative was judged by different standards than Osprey's narrative.3/ Osprey also takes issue with the scoring of the two applications' narratives describing management company experience with permanent supportive housing. As noted, Mr. Aldinger evaluated these narratives and awarded each application the maximum ten points for this application section. Osprey's narrative identified Carrfour's not-for-profit subsidiary, Crossroads Management, LLC (Crossroads), as the manager for its proposed Liberty Village development. Although Carrfour was established in 1993, Crossroads was not created until 2007. Before Crossroads was created, Carrfour did not manage the housing projects it developed; instead, it turned the developments over to traditional property management companies. As Osprey's narrative acknowledges, this created problems, as the traditional management companies lacked the sensitivity and training to address special needs of permanent supportive housing tenants. Since 2007, Crossroads has been taking over management functions for Carrfour developments and is now managing most of the 16 developments listed in the developer experience narrative. Osprey's application was given credit for proposing management with ideal experience. For Duval Park's application, Boley is identified as the management company. In addition, Boley will engage Carteret Management Company (Carteret), which is owned and operated by James Chadwick, a principal of developer-partner Blue Sky, to assist with tax-credit compliance and other matters within Carteret's expertise during the initial phases of the project. Boley's specific experience managing supportive housing for veterans with special needs, previously detailed in the developer experience discussion above, could not reasonably be questioned. As described in the manager experience narrative, Boley manages 561 units of its own permanent supportive housing. Boley also manages 112 additional permanent supportive housing units owned by other not-for-profit companies (including an 88-unit development owned by ServiceSource). The management narrative describes the profile of the typical Boley-managed housing unit tenant as having mental illness, including post-traumatic stress disorder and/or substance abuse problems, requiring supportive services provided by Boley staff. These supportive services include mental health counseling, case management intervention, and transportation assistance--functions for which Boley will assume responsibility operating the proposed development. The narrative also describes Boley's property management personnel: seven housing staff who handle leasing, income certifications, and other leasing matters; eight maintenance staff to handle property repairs; three drivers who provide transportation; and four accounting staff for property management functions. Osprey does not articulate a specific reason why Duval Park's management company experience narrative should not be entitled to ten points, or why Osprey believes its narrative was qualitatively or quantitatively better than Duval Park's, except to the extent of Osprey's criticisms of the developer experience narratives. Yet Osprey's narrative for manager experience arguably should not fare as well as its narrative for developer experience, given the many more years of management experience demonstrated by Boley and the comparatively few years of management experience by the Crossroads management entity created by Carrfour in 2007. Nonetheless, Mr. Aldinger credited the Osprey application with the maximum points based on Crossroads' management experience since 2007. No credible evidence was presented to support the contention that Duval Park's management experience narrative was not entitled to at least the same number of points as Osprey's management experience narrative. As repeatedly acknowledged by all parties throughout the hearing, Florida Housing was fortunate to have received two excellent proposals by Osprey and Duval Park that were head and shoulders above the other responses. Florida Housing then was faced with the difficult task of deciding which, between two excellent choices, should receive the funding nod, if only one of the two could be funded. Based on the evidence and the findings above, Mr. Aldinger's assignment of the same number of points for developer experience (24 points out of a possible 25 points) and for management company experience (the maximum of 10 points) to the two excellent proposals was not clearly erroneous, arbitrary, capricious, or contrary to competition. His conclusion that both applicants demonstrated nearly ideal development experience and ideal management company experience for their proposals was reasonable. The evidence established that Mr. Aldinger made the points assignments he did after evaluating all of the relevant information he was allowed to consider pursuant to the RFP instructions. His scoring of these two application sections was shown to be an honest, good faith exercise of his expert judgment applied to sort out the various pros and cons of the responses. Osprey did not identify any statute or rule that it contends was violated by the scoring of the Osprey and Duval Park developer and management experience narratives. Osprey argued, but did not prove, that the scoring of these two applications was contrary to the RFP specifications. Osprey argued that Mr. Aldinger's evaluation was contrary to the RFP because he considered differences between the two projects in assessing developer experience. Osprey characterized this as double- counting, because the same aspects of the projects were scored in other sections. Osprey also contended that considering the differences between the two proposed developments and the different approaches by the two applicants was tantamount to applying different standards in evaluating the two applications. Osprey's criticism was not borne out by the evidence. Instead, Mr. Aldinger described a reasonable process, consistent with the RFP terms explaining that developer experience would be assessed in the context of the attributes of the target population described in the first section of the application, and also in context with the roles and responsibilities described for the developer team members in carrying out the proposed development. The same RFP instructions and the same standards were applied to the evaluation of the two applications; it was the applications that were different, not the standards.4/ Although not actually raised as a distinct challenge, Osprey suggested an additional argument in its PRO, not articulated in its written protest or in the Joint Pre-hearing Stipulation. Osprey argued in its PRO that Florida Housing should have used two evaluators to score the developer and manager experience narratives, as a "check and balance" against arbitrary scoring. Osprey's new argument stands in stark contrast to the only challenge to the evaluation process articulated in Osprey's written protest and in the Joint Pre-hearing Stipulation. Before the hearing, Osprey challenged the evaluation procedure used for two application sections that were scored by two evaluators. Rather than providing any check-and-balance comfort, the two- evaluator process was viewed as defective by Osprey because the initial scores independently assigned by each evaluator were reconciled in a public discussion meeting at which differences in scores were harmonized, meaning that when the initial scores differed, the evaluators agreed to adjust their initial scores. Osprey has established only that for some application sections, a single evaluator was used, while for other application sections, two evaluators were used and their separate scores were reconciled. No credible evidence was offered to prove that use of two evaluators was better than using one evaluator (or vice versa, as Osprey initially argued).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent, Florida Housing Finance Corporation, enter a final order consistent with its initial decision to award funding for the Duval Park, Ltd., proposed development, and dismissing the formal written protests of Osprey Apartments, LLC, and Duval Park, Ltd. DONE AND ENTERED this 25th day of November, 2013, in Tallahassee, Leon County, Florida. S ELIZABETH W. MCARTHUR Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 25th day of November, 2013.
The Issue The issue is whether the actions of Florida Housing concerning the review and scoring of the responses to Request for Applications 2019-102 (“RFA”), titled “Community Development Block Grant--Disaster Recovery (‘CDBG- DR’) to be Used in Conjunction with Tax-Exempt MMRB and Non- Competitive Housing Credits in Counties Deemed Hurricane Recovery Priorities,” were contrary to the agency’s governing statutes, rules, policies, or the RFA specifications.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: THE PARTIES Berkeley is an applicant in the RFA that requested an allocation of $6,500,000 in CDBG Development funding; $2,500,000 in CDBG Land Acquisition funding; and $844,699 in non-competitive housing credits. The Berkeley Application, assigned number 2020-017D, was preliminarily deemed ineligible for consideration for funding. Brisas is an applicant in the RFA that requested an allocation of $5,000,000 in CDBG Development funding and $1,674,839 in non-competitive housing credits. The Brisas Application, assigned number 2020-056D, was preliminarily deemed eligible but was not selected for funding under the terms of the RFA. Northside is an applicant in the RFA that requested an allocation of $7,300,000 in CDBG Development funding; $1,588,014 in non-competitive housing credits; and $24,000,000 in Multifamily Mortgage Revenue Bonds (“MMRB”). The Northside Application, assigned number 2020-024D, was preliminarily deemed eligible but was not selected for funding under the terms of the RFA. Beacon Place is an applicant in the RFA that requested an allocation of $6,925,500 in CDBG Development funding; $4,320,000 in CDBG Land Acquisition funding; $1,764,203 in non-competitive housing credits; and $24,000,000 in MMRB. The Beacon Place Application, assigned number 2020-045DB, was preliminarily deemed eligible but was not selected for funding under the terms of the RFA. Bella Vista is an applicant in the RFA that requested an allocation of $8,000,000 in CDBG Development funding; $1,450,000 in CDBG Land Acquisition funding; $609,629 in non-competitive housing credits; and $13,000,000 in MMRB. The Bella Vista Application, assigned number 2020-038DB, was preliminarily deemed eligible but was not selected for funding under the terms of the RFA. Solaris is an applicant in the RFA that requested an allocation of $3,420,000 in CDBG Development funding; $4,500,000 in CDBG Land Acquisition funding; and $937,232 in non-competitive housing credits. The Solaris Application, assigned number 2020-039D, was deemed eligible and preliminarily selected for funding under the terms of the RFA. Metro Grande is an applicant in the RFA that requested an allocation of $3,175,000 in CDBG Development funding and $1,041,930 in non-competitive housing credits. The Metro Grande Application, assigned number 2020-041D, was deemed eligible and preliminarily selected for funding under the terms of the RFA. Sierra Bay is an applicant in the RFA that requested an allocation of $3,650,000 in CDBG Development funding; $3,300,000 in CDBG Land Acquisition funding; $1,074,173 in non-competitive housing credits; and $16,000,000 in MMRB. The Sierra Bay Application, assigned number 2020-040DB, was deemed eligible and preliminarily selected for funding under the terms of the RFA. Bembridge is an applicant in the RFA that requested an allocation of $7,800,000 in CDBG Development funding; $564,122 in non-competitive housing credits; and $10,100,000 in MMRB. The Bembridge Application, assigned number 2020-046DB, was deemed eligible and preliminarily selected for funding under the terms of the RFA. East Pointe is an applicant in the RFA that requested an allocation of $4,680,000 in CDBG Development funding and $690,979 in non-competitive housing credits. The East Pointe Application, assigned number 2020-053D, was deemed eligible and preliminarily selected for funding under the terms of the RFA. Florida Housing is a public corporation organized pursuant to Chapter 420, Part V, Florida Statutes, and, for purposes of these consolidated cases, is an agency of the State of Florida. Florida Housing is tasked with distributing a portion of the CDBG-DR funding allocated by the U.S. Department of Housing and Urban Development (“HUD”), pursuant to the State of Florida Action Plan for Disaster Recovery. THE COMPETITIVE APPLICATION PROCESS AND RFA 2019-102 Florida Housing is authorized to allocate low-income housing tax credits and other named funding by section 420.507(48). Florida Housing has adopted Florida Administrative Code Chapter 67-60 to govern the competitive solicitation process. Rule 67-60.009(1) provides that parties wishing to protest any aspect of a Florida Housing competitive solicitation must do so pursuant to section 120.57(3), Florida Statutes. Funding is made available through a competitive application process commenced by the issuance of a request for applications. Rule 67-60.009(4) provides that a request for application is considered a “request for proposal” for purposes of section 120.57(3)(f). The RFA was issued on July 30, 2019, with responses due on August 27, 2019. The RFA was modified four times and the application deadline was extended to September 24, 2019. No challenges were made to the terms and specifications of the RFA. Section Five of the RFA included a list of 48 “eligibility items” that an applicant was required to satisfy to be eligible for funding and considered for funding selection. Applications that met the eligibility standards would then be awarded points for satisfying RFA criteria, with the highest scoring applications being selected for funding. No total point items are in dispute. Proximity Point items are contested as to the Beacon Place, East Pointe, and Bembridge Applications. Applicants could select whether they would be evaluated as Priority I, II, or III applications. All of the parties to these consolidated cases identified themselves as Priority I applications. Through the RFA, Florida Housing seeks to award an estimated $76,000,000 of CDBG Land Acquisition Program funding to areas impacted by Hurricane Irma, and in areas that experienced a population influx because of migration from Puerto Rico and the U.S. Virgin Islands due to Hurricane Irma. Florida Housing will award up to $66,000,000 for CDBG Development funding and an additional $10,000,000 for CDBG Land Acquisition Program funding. Applicants were not required to request CDBG Land Acquisition Program funding. Forty-four applications were submitted 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 34 applications eligible for funding. The Review Committee found 8 applications ineligible, including that of Berkeley. Two applications were withdrawn. The Review Committee developed charts listing its eligibility and funding recommendations to be presented to the Board. On December 13, 2019, the Board met and accepted the recommendations of the Review Committee. The Board preliminarily awarded funding to 12 applications, including those of Sierra Bay, Solaris, Metro Grande, East Pointe, and Bembridge. Petitioners Berkeley, Brisas, Northside, Beacon Place, and Bella Vista timely filed Notices of Protest and Petitions for Formal Administrative Hearing. THE BERKELEY APPLICATION As an eligibility item, the RFA required applicants to identify an Authorized Principal Representative. According to the RFA, the Authorized Principal Representative: must be a natural person Principal of the Applicant listed on the Principal Disclosure Form; must have signature authority to bind the Applicant entity; (c) must sign the Applicant Certification and Acknowledgement form submitted in this Application; (d) must sign the Site Control Certification form submitted in this Application; and (e) if funded, will be the recipient of all future documentation that requires a signature. As an eligibility item, the RFA required applicants to submit an Applicant Certification and Acknowledgment form executed by the Authorized Principal Representative. As an eligibility item, the RFA also required applicants to submit a Site Control Certification form executed by the Authorized Principal Representative. In section 3.e.(1) of Exhibit A of the RFA, the applicant is directed to enter the contact information of its Authorized Principal Representative. Berkeley entered the name, organization, and contact information for Jennie D. Lagmay as its Authorized Principal Representative, in response to section 3.e.(1). The name of Jennie D. Lagmay was not disclosed on the Principal Disclosure form required by the RFA. The Applicant Certification and Acknowledgment form and the Site Control Certification form were executed by Jonathan L. Wolf, not Jennie D. Lagmay, the designated Authorized Principal Representative. On both forms, Mr. Wolf is identified as “Manager of Berkeley Landing GP, LLC; General Partner of Berkeley Landing, Ltd.” Jonathan L. Wolf is listed on the Principal Disclosure Form. Aside from section 3.e.(1) of Exhibit A, Jennie D. Lagmay’s name is not found in the Berkeley Application. Florida Housing determined that the Berkeley Application was ineligible for an award of funding for three reasons: 1) the Authorized Principal Representative listed was not disclosed on the Principal Disclosure form; 2) the Applicant Certification and Acknowledgement form was not signed by the Authorized Principal Representative; and 3) the Site Control Certification was not signed by the Authorized Principal Representative. Two other applications for this RFA were found ineligible for identical reasons: Thornton Place, Application No. 2020-020D; and Berkshire Square, Application No. 2020-034D. In these, as in the Berkeley Application, Jennie D. Lagmay was named as the Authorized Principal Representative in section 3.e.(1) of Exhibit A, but Jonathan L. Wolf executed the Applicant Certification and Acknowledgement form and the Site Control Certification form as the Authorized Principal Representative. Berkeley concedes it made an error in placing the name of Ms. Lagmay in section 3.e.(1), but argues that this constituted a minor irregularity that should have been waived by Florida Housing. Berkeley contends that the entirety of its Application makes plain that Jonathan D. Wolf is in fact its Authorized Principal Representative. Berkeley argues that Florida Housing should waive the minor irregularity and determine that the Berkeley Application is eligible for funding. Berkeley points out that only two members of the Review Committee, Rachel Grice and Heather Strickland, scored the portions of the Berkeley Application that led to the ineligibility recommendation. Ms. Grice determined that the Authorized Principal Representative listed in the Berkeley Application was not disclosed on the Principal Disclosure form. Ms. Strickland determined that neither the Applicant Certification and Acknowledgement form nor the Site Control Certification form was executed by the Authorized Principal Representative. Neither Ms. Grice nor Ms. Strickland conducted a minor irregularity analysis for the Berkeley Application. Rule 67-60.008, titled “Right to Waive Minor Irregularities,” provides as follows: Minor irregularities are those irregularities in an Application, such as computation, typographical, or other 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. Minor irregularities may be waived or corrected by the Corporation. Berkeley contends that because a minor irregularity analysis was not conducted by the Review Committee members, the Board was deprived of a necessary explanation for the preliminary recommendations of Ms. Grice and Ms. Strickland. Marisa Button, Florida Housing’s Director of Multifamily Allocations, agreed that the Review Committee members did not perform a minor irregularity analysis but testified that none was required given the nature of the discrepancy in the Berkeley Application. Ms. Button performed a minor irregularity analysis as Florida Housing’s corporate representative in this proceeding and concluded that the error could not be waived or corrected without providing an unfair competitive advantage to Berkeley. Ms. Button testified that the fact that the person identified as the Authorized Principal Representative was not the same person who signed the certification forms could not be considered a minor irregularity because the application demonstrated conflicting and contradictory information, creating uncertainty as to the applicant’s intentions. She stated that Florida Housing is required to limit its inquiry to the four corners of the application. Ms. Button stated that Florida Housing cannot take it upon itself to decide what the applicant intended when the information provided in the application is contradictory. Berkeley points to the fact that the Application Certification and Acknowledgement form, signed by Mr. Wolf, includes the following language: “The undersigned is authorized to bind the Applicant entity to this certification and warranty of truthfulness and completeness of the Application.” Berkeley argues that it should have been clear to Florida Housing that Mr. Wolf is the person authorized to bind the company and that the inclusion of Ms. Lagmay’s name in section 3.e.(1) was in the nature of a typographical error. Florida Housing points out that the Application Certification and Acknowledgement form also includes the following language below the signature line: “NOTE: Provide this form as Attachment 1 to the RFA. The Applicant Certification and Acknowledgement form must be signed by the Authorized Principal Representative stated in Exhibit A.” Florida Housing notes that the Site Control Certification form includes similar language: “This form must be signed by the Authorized Principal Representative stated in Exhibit A.” Berkeley contends that Florida Housing was well aware that Jonathan L. Wolf has been the named Authorized Principal Representative on multiple applications filed under the umbrella of Wendover Housing Partners, the general developer behind Berkeley. In at least one of those previous applications, Ms. Lagmay, an employee of Wendover Housing Partners, was identified as the “contact person.” Ms. Button responded that Review Committee members are specifically prohibited from using personal knowledge of a general development entity in a specific application submitted by a single purpose entity. She further testified that if Florida Housing employees were to use their personal knowledge of an experienced developer to waive errors in a specific application, applicants who had not previously submitted applications would be at a competitive disadvantage. Ms. Button testified that Berkeley was established as a single purpose entity in accordance with the RFA’s requirements. She testified that she has known general developers to structure these single purpose entities in different ways, depending on the requirements of an RFA. An applicant might designate an employee, such as Ms. Lagmay, as a principal to give her experience as a developer. Again, Ms. Button emphasized that Florida Housing is not in a position to decide what the applicant “really meant” when there is a discrepancy in the information provided. Ms. Button testified that Florida Housing has determined in prior RFAs that an applicant was ineligible because the person identified as the Authorized Principal Representative was not the same person who signed the certification forms. Florida Housing rightly concluded that there are only two possible ways to interpret the Berkeley Application. If Ms. Lagmay was the Authorized Principal Representative, then the application is nonresponsive because she was not listed on the Principal Disclosure form and she did not sign the required certification forms. If Ms. Lagmay was not the Authorized Principal Representative, the application is nonresponsive because no Authorized Principal Representative was identified. There is no way to tell from the four corners of the application which of these alternatives is the correct one. Florida Housing cannot step in and cure the defect in the application by making its own educated guess as to the intended identity of the Authorized Principal Representative. Berkeley has failed to demonstrate that Florida Housing’s preliminary determination of ineligibility was contrary to the applicable rules, statutes, policies, or specifications of the RFA, or was clearly erroneous, contrary to competition, arbitrary, or capricious. THE SIERRA BAY APPLICATION The parties stipulated to the facts regarding the Sierra Bay Application, which are incorporated into this Recommended Order. Florida Housing deemed the Sierra Bay Application eligible and, pursuant to the terms of the RFA, preliminarily selected Sierra Bay for funding. In order to demonstrate site control, the RFA required execution of the Site Control Certification form. Site control documentation had to be included in the application. One way to demonstrate site control was to include an “eligible contract.” The RFA required that certain conditions be met in order to be considered an “eligible contract.” One of those requirements was that the contract “must specifically state that the buyer’s remedy for default on the part of the seller includes or is specific performance.” Sierra Bay acknowledged that the site control documentation included within its application did not meet the “eligible contract” requirement because it failed to include language regarding specific performance as a remedy for the seller’s default. Sierra Bay agreed that the omission of the specific performance language was not a minor irregularity and that Sierra Bay’s Application is ineligible for funding under the terms of the RFA. THE SOLARIS APPLICATION The RFA specified that a Local Government, Public Housing Authority, Land Authority, or Community Land Trust must hold 100 percent ownership in the land of any qualifying Priority I application. The RFA defined “Community Land Trust” as: A 501(c)(3) which acquires or develops parcels of land for the primary purpose of providing or preserving affordable housing in perpetuity through conveyance of the structural improvement subject to a long term ground lease which retains a preemptive option to purchase any such structural improvement at a price determined by a formula designed to ensure the improvement remains affordable in perpetuity. The RFA provided that if a Community Land Trust is the Land Owner, the Community Land Trust must provide the following documentation as Attachment 2 to the application to demonstrate that it qualifies as a Community Land Trust: The Community Land Trust must provide its Articles of Incorporation or Bylaws demonstrating it has existed since June 28, 2018 or earlier and that a purpose of the Community Land Trust is to provide or preserve affordable housing; and The Community Land Trust must provide a list that meets one of the following criteria to demonstrate experience of the Community Land Trust with owning property: (i) at least two parcels of land that the Community Land Trust currently owns; or (ii) one parcel of land that the Community Land Trust owns, consisting of a number of units that equals or exceeds at least 25 percent of the units in the proposed Development. The RFA required that the proposed development must be affordable in perpetuity. For purposes of the RFA, “perpetuity” means 99 years or more. Solaris identified Residential Options of Florida, Inc. (“Residential Options”), as the Community Land Trust owner in its Priority 1 Application. Attachment 2 of the Solaris Application included the Articles of Incorporation of Residential Options (“Original Articles”), filed with the Division of Corporations on July 30, 2014. The purpose of the corporation as stated in the Original Articles was as follows: Said corporation is organized exclusively for charitable, religious, educational, and scientific purposes, including for such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Attachment 2 of the Solaris Application also included Amended and Restated Articles of Incorporation of Residential Options (“Amended Articles”), filed with the Division of Corporations on September 20, 2019. The Amended Articles retained the boilerplate statement of purpose of the Original Articles, but added the following paragraph: This shall include the purpose of empowering individuals with intellectual and developmental disabilities to successfully obtain and maintain affordable and inclusive housing of their choice and to provide affordable housing and preserve the affordability of housing for low- income or moderate income people, including people with disabilities, in perpetuity. Attachment 2 of the Solaris Application also included the Articles of Incorporation of ROOF Housing Trust, Inc. (“ROOF Housing Trust”) filed with the Division of Corporations on July 17, 2017. The purpose of the corporation as stated in these Articles includes the following: “to acquire land to be held in perpetuity for the primary purpose of providing affordable housing for people with developmental disabilities.” Finally, Attachment 2 of the Solaris Application included Articles of Merger, which were filed with the Division of Corporations on September 10, 2019. The Articles of Merger indicated that the Residential Options and ROOF Housing Trust had merged, with Residential Options standing as the surviving corporation. The petitioners contesting the Solaris Application raise several issues. The first issue is whether the RFA requires only that the entity named as the Community Land Trust have been in existence in some form as of June 28, 2018, or whether the entity had to exist as a Community Land Trust as of that date. The Community Land Trust named in the Solaris Application, Residential Options, existed prior to June 28, 2018, but not as a Community Land Trust. The second issue is whether the June 28, 2018, date applies only to the existence of the Community Land Trust or whether the RFA requires that the Community Land Trust have been in existence and have had a stated purpose to provide or preserve affordable housing and have met the ownership experience criteria as of June 28, 2018. It is questionable whether Solaris would be eligible for funding if the RFA required the latter, because Residential Options did not have a stated purpose of providing or preserving affordable housing prior to its merger with ROOF Housing Trust, at least no such purpose as could be gleaned from the four corners of the Solaris Application. The third issue is whether the RFA’s definition of “Community Land Trust” requires the qualifying entity to have existing ground leases at the time of the application. Florida Housing and Solaris concede that Residential Options did not have operative ground leases at the time Solaris submitted its application. Hurricane Irma struck Puerto Rico and Florida in September 2017. Ms. Button testified that in creating this RFA, Florida Housing wanted to weed out opportunistic community land trusts created only for the purpose of obtaining this funding. Florida Housing initially proposed an RFA requirement that the community land trust have existed as of September 2017, but discovered through workshops with interested parties that the early date would exclude legitimate Community Land Trusts that had been established in response to the storm. Ms. Button testified that Florida Housing’s intent was to make this RFA as inclusive as practicable. Florida Housing therefore selected June 28, 2018, as a date that would exclude opportunists without penalizing the genuine responders to the natural disaster. Both Florida Housing and Solaris point to the text of the RFA requirement to demonstrate that the date of June 28, 2018, should be read to apply only to whether the Community Land Trust existed as of that date. Solaris argues that the RFA states three independent criteria for eligibility: 1) that the Community Land Trust “has existed since June 28, 2018 or earlier”; 2) that a purpose of the Community Land Trust is1 to provide or preserve affordable housing; and 3) the Community Land Trust must demonstrate its property ownership experience, one means of doing which is to name at least two parcels of land that the Community Land Trust currently owns. Florida Housing argues that Solaris met the first criterion by providing its Articles of Incorporation showing it has existed since July 30, 2014. Florida Housing argues that Solaris met the second criterion by providing its Amended and Restated Articles of Incorporation, which stated the purpose of providing or preserving affordable housing in perpetuity. Florida Housing argues that Solaris met the third criterion by identifying two properties in Immokalee, Independence Place, and Liberty Place as parcels that it currently owns. Florida Housing thus reached the conclusion that Residential Options met the definition of a Community Land Trust in the RFA as of June 28, 2018. Florida Housing argues that, according to the definition in the RFA, a Community Land Trust must be a 501(c)(3) corporation, which Residential Options clearly is. It must acquire or develop parcels of land, which it has done. Finally, it must have the “primary purpose of providing or preserving affordable housing in perpetuity through conveyance of the structural improvement subject to a long term ground lease.” Ms. Button testified that Florida Housing’s interpretation of the RFA’s Community Land Trust definition was that if Residential Options had the primary purpose of providing affordable housing in perpetuity through the use of long term ground leases, the definition has been met even if Residential Options had not actually entered into any ground leases at the 1 Both Florida Housing and Solaris emphasize that the second criterion is stated in the present tense, which suggests that it does not intend a backward look to June 28, 2018. time it submitted its application. This is not the only way to read the RFA’s definition, but it is not an unreasonable reading, particularly in light of Florida Housing’s stated intent to make the RFA as inclusive as possible in terms of the participation of legitimate community land trusts. Sheryl Soukup, the Executive Director of Residential Options, testified via deposition. Ms. Soukup testified that in 2017, Residential Options realized there was a need for housing for people with disabilities and decided to become a nonprofit housing developer of properties that would be kept affordable in perpetuity. To that end, ROOF Housing Trust was created to act as the community land trust for the properties developed by Residential Options. The two companies had identical Boards of Directors and Ms. Soukup served as Executive Director of both entities. In its application to the IRS for 501(c)(3) status, ROOF Housing Trust included the following: The organization does not own any property yet. ROOF Housing Trust intends to own vacant land, single family homes, and multi-family units. Some of the units will be provided as rental units. ROOF Housing Trust will sell some of the houses for homeownership, while retaining the land on which they are located. The land will be leased to homeowners at a nominal fee to make the purchase price affordable, using the community land trust model. Ground leases and warranty deeds not been developed yet [sic], but will be based on the sample documents provided by the Florida Community Land Trust Institute.[2] Ms. Soukup described ROOF Housing Trust as “a vehicle by which Residential Options of Florida could act as a community land trust…. [I]t was always the intention of Residential Options of Florida to develop and put into 2 The ROOF Housing Trust 501(c)(3) application was not a part of the Solaris Application. It was included as an exhibit to Ms. Soukup’s deposition. a community land trust property so that it would remain affordable in perpetuity for use by people of intellectual and development [sic] disabilities.” Residential Options acquired the aforementioned Independence Place and Liberty Place properties but never conveyed ownership to ROOF Housing Trust. Residential Options acted as a de facto community land trust. No ground leases have yet been entered into because the properties are at present rented directly by Residential Options to persons with developmental disabilities. Ms. Soukup testified that at the time ROOF Housing Trust was created, the Board of Residential Options was undecided whether to create a separate entity to act as a community land trust or to incorporate that function into the existing entity. The decision to incorporate ROOF Housing Trust was based on the Board’s intuition that a separate corporation would “allow us the most flexibility in the future.” In any event, Residential Options and ROOF Housing Trust were functionally the same entity. Ms. Soukup testified that plans to merge the two companies emerged from a situation in which Collier County refused to allow Residential Options to convey its two properties to ROOF Housing Trust. The Board that controlled both companies decided that there was no point in maintaining separate legal entities if ROOF Housing Trust could not perform its main function. As noted above, Articles of Merger were filed on September 10, 2019. Northside points to minutes from Residential Options’s Board meetings in August and September 2019, as indicating that the Board itself did not believe that Residential Options was a community land trust prior to the merger with ROOF Housing Trust. Northside contends that the September 2019 merger was initiated and completed mainly because Residential Options had been approached about serving as the Community Land Trust for the applications of Solaris and Sierra Bay in this RFA. Northside points to the “frenzied activity” by Residential Options to create an entity meeting the definition of Community Land Trust in the days just before the September 24, 2019, application deadline. Northside argues that Residential Options is the very kind of opportunistic community land trust that the June 28, 2018, date of creation was intended to weed out. Northside’s argument is not persuasive of itself, but it does point the way to an ultimate finding as to the Solaris Application. Both Florida Housing and Solaris gave great emphasis to Ms. Soukup’s testimony to refute the suggestion that Residential Options acted opportunistically. Ms. Soukup was a credible witness. Her explanation of the process by which Residential Options first created then merged with ROOF Housing Trust dispelled any suggestion that Residential Options was a community land trust created solely to cash in on this RFA. The problem is that Ms. Soukup’s explanation was not before the Review Committee when it evaluated the Solaris Application. The only information about Residential Options that the Review Committee possessed was Attachment 2 of the Solaris Application. The dates of the merger documents and Amended Articles certainly give some credence to the suspicions voiced by Northside. However, the undersigned is less persuaded by the implications as to the intentions of Residential Options than by the contradictions between Florida Housing’s statements of intent and its reading of the RFA in relation to the Solaris Application. The decision to find the Solaris Application eligible for funding founders on the first issue stated above: whether the RFA requires only that the Community Land Trust have been in existence in some form as of June 28, 2018, or whether it had to exist as a Community Land Trust as of that date. Ms. Button testified that the June 28, 2018, date was settled upon as a way of including community land trusts created in the wake of Hurricane Irma, while excluding those created to cash in on this RFA. During cross- examination by counsel for Northside, Ms. Button broadened her statement to say that Florida Housing’s intention was to exclude entities that had not been involved in affordable housing at all prior to June 28, 2018. Nonetheless, the RFA language is limited to Community Land Trusts. The RFA states: “The Community Land Trust must provide its Articles of Incorporation or Bylaws demonstrating that it has existed since June 28, 2018 or earlier…” The Solaris Application shows that Residential Options existed prior to June 28, 2018, but not as a Community Land Trust. Residential Options did not become a Community Land Trust until it completed its merger with ROOF Housing Trust and filed the Amended Articles on September 20, 2019. Ms. Button’s statement of intent is accepted as consistent with the plain language of the RFA: the date of June 28, 2018, excludes Community Land Trusts created subsequently. It is inconsistent for Florida Housing to also read the RFA language to say that the qualifying entity need not have existed as a Community Land Trust prior to June 28, 2018. It would be arbitrary for Florida Housing to set a date for the creation of Community Land Trusts then turn around and find that the date does not apply to this particular Community Land Trust. Ms. Soukup’s testimony was that Residential Options and ROOF Housing Trust were effectively a single entity and that Residential Options was in fact operating as a community land trust prior to the September 10, 2019, merger. However, Ms. Soukup’s explanation was not before the Review Committee, which was limited to one means of ascertaining whether an entity was a Community Land Trust prior to June 28, 2018: the Articles of Incorporation or Bylaws. Residential Options’s Original Articles included no language demonstrating that it was a Community Land Trust prior to the September 10, 2019, merger with ROOF Housing Trust and the filing of the Amended Articles on September 20, 2019.3 As set forth in the discussion of the Berkley Application above, Florida Housing is required to limit its inquiry to the four corners of an application. It was contrary to the provisions of the RFA for Florida Housing to find that Residential Options’s mere existence as a legal entity prior to June 28, 2018, satisfied the requirement that the Community Land Trust must demonstrate that it existed prior to June 28, 2018. Ms. Button’s own testimony demonstrated that Florida Housing intended to exclude Community Land Trusts created after June 28, 2018. ROOF Housing Trust existed as a Community Land Trust in 2017, but ROOF Housing Trust was not the Community Land Trust named in the Solaris Application. Ms. Soukup’s explanation of the circumstances showed that Residential Options was well intentioned in its actions, but her explanation was not a part of the Solaris Application that was before Florida Housing’s Review Committee. THE METRO GRANDE APPLICATION Florida Housing deemed the Metro Grande Application eligible. Pursuant to the terms of the RFA, the Metro Grande Application was preliminarily selected for funding. Petitioner Brisas contends that the Metro Grande Application should have been found ineligible for failure to include mandatory site control documentation. Metro Grande submitted a Priority I application that was not seeking Land Acquisition Program funding. The site control requirements for such applicants are as follows: 3 This finding also disposes of Solaris’s arguments regarding the legal effect of corporate mergers. The RFA provided one simple way of demonstrating whether an entity was a Community Land Trust as of June 28, 2018. Florida Housing’s Review Committee could not be expected to delve into the complexities of corporate mergers to answer this uncomplicated question. The Local Government, Public Housing Authority, Land Authority, or Community Land Trust must already own the land as the sole grantee and, if funded, the land must be affordable into Perpetuity.[4] Applicants must demonstrate site control as of Application Deadline by providing the properly executed Site Control Certification form (Form Rev. 08-18). Attached to the form must be the following documents: A Deed or Certificate of Title. The deed or certificate of title (in the event the property was acquired through foreclosure) must be recorded in the applicable county and show the Land Owner as the sole Grantee. There are no restrictions on when the land was acquired; and A lease between the Land Owner and the Applicant entity. The lease must have an unexpired term of at least 50 years after the Application Deadline. Metro Grande did not include a deed or certificate of title in its application. In fact, no deed or certificate of title for the Metro Grande site exists. Miami-Dade County owns the Metro Grande site. Miami-Dade County acquired ownership of the Metro Grande site by eminent domain. The eminent domain process culminated in the entry of four Final Judgments for individual parcels which collectively compose the Metro Grande site. The Final Judgments were not attached to Metro Grande’s Application. There was no requirement in the RFA that Metro Grande include these Final Judgments in its application. The Final Judgments were produced during discovery in this proceeding. In its application, Metro Grande included a Land Owner Certification and Acknowledgement Form executed by Maurice L. Kemp, as the Deputy Mayor of Miami-Dade County, stating that the county holds or will hold 100 percent ownership of the land where Metro Grande’s proposed 4 The RFA defined “Perpetuity” as “at least 99 years from the loan closing.” development is located. Additionally, in its application, Metro Grande stated that Miami-Dade County owned the property. The RFA expressly states that Florida Housing “will not review the site control documentation that is submitted with the Site Control Certification form during the scoring process unless there is a reason to believe that the form has been improperly executed, nor will it in any case evaluate the validity or enforceability of any such documentation.” Florida Housing reserves the right to rescind an award to any applicant whose site control documents are shown to be insufficient during the credit underwriting process. Thus, the fact that no deed or certificate of title was included with Metro Grande’s site control documents was not considered by Florida Housing during the scoring process. Ms. Button testified that while this was an error in the application, it should be waived as a minor irregularity. The purpose of the documentation requirements was to demonstrate ownership and control of the applicant’s proposed site. There was no question or ambiguity as to the fact that Miami- Dade County owned the Metro Grande site. Florida Housing was not required to resort to information extraneous to the Metro Grande Application to confirm ownership of the site. The Land Owner Certification and Acknowledgement form, executed by the Deputy Mayor as the Authorized Land Owner Representative, confirmed ownership of the parcels. Metro Grande’s failure to include a deed or certificate of title, therefore, created no confusion as to who owned the property or whether Miami-Dade County had the authority to lease the property to the applicant. There was no evidence presented that the failure to include a deed or certificate of title resulted in the omission of any material information or provided a competitive advantage over other applicants. Brisas contends that the RFA was clear as to the documents that must be included to satisfy the site control requirements. Metro Grande failed to provide those documents or even an explanation why those documents were not provided. Florida Housing ignored the fact that no deed or certificate of title was provided, instead relying on information found elsewhere in the application. It is found that Metro Grande failed to comply with an eligibility item of the RFA, but that Florida Housing was correct to waive that failure as a minor irregularity that provided Metro Grande no competitive advantage, created no uncertainty as to whether the requirements of the RFA were met, and did not adversely affect the interests of Florida Housing or the public. Brisas has failed to demonstrate that Florida Housing’s preliminary determination of eligibility and selection for funding was contrary to the applicable rules, statutes, policies, or specifications of the RFA or was clearly erroneous, contrary to competition, arbitrary, or capricious. THE BEACON PLACE APPLICATION Florida Housing deemed the Beacon Place Application eligible. Pursuant to the terms of the RFA, Beacon Place was not preliminarily selected for funding. The RFA provides that an application may earn proximity points based on the distance between its Development Location Point and the selected Transit or Community Service. Proximity points are used to determine whether the Applicant meets the required minimum proximity eligibility requirements and the Proximity Funding Preference. Beacon Place is a Large County Application that is not eligible for the “Public Housing Authority Proximity Point Boost.” As such, the Beacon Place Application was required to achieve a minimum Transit Point score of 2 to be eligible for funding. Beacon Place must also achieve a total Proximity Point score of 10.5 in order to be eligible for funding. Beacon Place must achieve a total Proximity Point score of 12.5 or more in order to receive the RFA’s Proximity Funding Preference. Based on the information in its Application, Beacon Place received a Total Proximity Point score of 18 and was deemed eligible for funding and for the Proximity Point Funding Preference. The Beacon Place Application listed a Public Bus Rapid Transit Stop as its Transit Service. Applying the Transit Service Scoring Charts in Exhibit C of the RFA, Florida Housing awarded Beacon Place 6 Proximity Points for its Transit Service. The Beacon Place Application listed a Grocery Store, a Pharmacy, and a Public School in its Community Services Chart in order to obtain Proximity Points for Community Services. Using the Community Services Scoring Charts in Exhibit C of the RFA, Florida Housing awarded Beacon Place 4 Proximity Points for each service listed, for a total of 12 Proximity Points for Community Services. Beacon Place has stipulated, however, that the Public School listed in its application does not meet the definition of “Public School” in the RFA and Beacon Place should not receive the 4 Proximity Points for listing a public school. The RFA defines a “Public Bus Rapid Transit Stop” as: [a] fixed location at which passengers may access public transportation via bus. The Public Bus Rapid Transit Stop must service at least one bus that travels at some point during the route in either a lane or corridor that is exclusively used by buses, and the Public Bus Rapid Transit Stop must service at least one route that has scheduled stops at the Public Bus Rapid Transit Stop at least every 20 minutes during the times of 7am to 9am and also during the times of 4pm to 6pm Monday through Friday, excluding holidays, on a year- round basis. Additionally, it must have been in existence and available for use by the general public as of the Application Deadline. The Beacon Place Application included Metrobus Route 38 (“Route 38”) as a Public Bus Rapid Transit Stop. Route 38 has scheduled stops at the location identified in the Beacon Place Application at the following times during the period of 7 a.m. and 9 a.m. Monday through Friday: 7:01, 7:36, 7:56, 8:11, 8:26, 8:41, and 8:56. Brisas and Northside contend that Route 38 does not meet the definition of a Public Bus Rapid Transit Stop because there is a gap of more than 20 minutes between the 7:01 a.m. bus and the 7:36 a.m. bus. Applicants are not required to include bus schedules in the application. Florida Housing does not attempt to determine whether an identified stop meets the RFA definitions during the scoring process. During discovery in this litigation, Florida Housing changed its position and now agrees that Route 38 does not satisfy the definition. Nonetheless, the standard of review set forth in section 120.57(3) is applicable to Florida Housing’s initial eligibility determination, not its revised position. All parties stipulated that Route 38 meets the definition of a Public Bus Rapid Transit Stop as to scheduled stops during the hours of 4 p.m. to 6 p.m. Monday through Friday. If the bus stop listed by Beacon Place does not also meet the definition of a Public Bus Rapid Transit Stop as to scheduled stops during the hours of 7 a.m. to 9 a.m., Beacon Place would not be entitled to any Transit Service Proximity Points and would be ineligible for funding. Beacon Place cannot contest the fact that there is a 35 minute gap between the 7:01 and the 7:36 buses. Beacon Place has attempted to salvage its situation by comparing the language used in the RFA definition of a Public Bus Stop with that used in the definition of a Public Bus Rapid Transit Stop. The RFA defines Public Bus Stop in relevant part as [a] fixed location at which passengers may access one or two routes of public transportation via buses. The Public Bus Stop must service at least one bus route with scheduled stops at least hourly during the times of 7am to 9am and also during the times of 4pm and 6pm Monday through Friday, excluding holidays, on a year round basis…. Florida Housing has interpreted the “hourly” requirement of the Public Bus Stop definition to mean that a bus must stop at least once between 7:00 a.m. and 8:00 a.m., and at least once between 8:00 a.m. and 9:00 a.m. Beacon Place suggests that Florida Housing should interpret the “every 20 minutes” requirement for a Public Bus Rapid Transit Stop similarly, so that a bus must stop at least once between 7:00 a.m. and 7:20 a.m., once between 7:20 a.m. and 7:40 a.m., and once between 7:40 a.m. and 8:00 a.m. Florida Housing has rejected this interpretation, however, noting that the language in the two definitions is explicitly different. Ms. Button testified that if Florida Housing had intended these two distinct definitions to be interpreted similarly, it could easily have worded them differently. It could have required a Public Bus Stop to have stops “at least every 60 minutes,” rather than “hourly.” It could have required a Public Bus Rapid Transit Stop to have “three stops per hour” rather than “every 20 minutes.” Ms. Button observed that the purpose of the Public Bus Rapid Transit Stop definition is to award points for serving the potential residents with frequent and regular stops. The idea was to be sure residents had access to the bus during the hours when most people are going to and from work. Florida Housing’s interpretation of “every 20 minutes” is consonant with the plain language of the phrase and reasonably serves the purpose of the definition. Florida Housing also rejected the idea that the failure of the identified stop to meet the definition of a Public Bus Rapid Transit Stop in the RFA should be waived as a minor irregularity. Ms. Button testified that allowing one applicant to get points for a stop that did not meet the definition would give it a competitive advantage over other applicants, including some potential applicants who did not apply because they could not satisfy the terms of the definition. Because the bus stop listed by Beacon Place does not meet the definition of a Public Bus Rapid Transit Stop, Beacon Place is not entitled to any Transit Service Proximity Points and is thus ineligible for funding. Brisas and Northside have demonstrated that Florida Housing’s preliminary determination of eligibility for Beacon Place was contrary to the specifications of the RFA. Florida Housing’s original recommendation would have been contrary to the terms of the RFA. THE EAST POINTE APPLICATION Florida Housing deemed the East Pointe Application eligible. Pursuant to the terms of the RFA, East Pointe was preliminarily selected for funding. Bella Vista challenged Florida Housing’s action alleging that the Medical Facility selected by East Pointe did not meet the definition found in the RFA. East Pointe proposed a Development in Lee County, a Medium County according to the terms of the RFA. Applicants from Medium Counties are not required to attain a minimum number of Transit Service Points to be considered eligible for funding. However, such applicants must achieve at least 7 total Proximity Points to be eligible for funding and at least 9 Proximity Points to receive the Proximity Funding Preference. The East Pointe Application identified three Public Bus Stops and was awarded 5.5 Proximity Points based on the Transit Service Scoring Chart in Exhibit C to the RFA. However, East Pointe has stipulated that Public Bus Stop 1 listed in its application does not meet the definition of a Public Bus Stop because it does not have the required scheduled stops. Based on the Transit Service Scoring Chart, East Pointe should receive a total of 3.0 Proximity Points for Transit Services for Public Bus Stops 2 and 3. East Pointe listed a Grocery Store, a Medical Facility, and a Public School in its Community Services Chart. Based on the Community Services Scoring Charts in Exhibit C to the RFA, East Pointe received 1 Proximity Point for its Grocery Store, 4 Proximity Points for its Medical Facility, and 3 Proximity Points for its Public School, for a total of 8 Proximity Points for Community Services. East Pointe listed Lee Memorial Health System at 3511 Dr. Martin Luther King Jr. Boulevard, Ft. Myers, Florida, as its Medical Facility. The RFA defines “Medical Facility” as follows: A medically licensed facility that (i) employs or has under contractual obligation at least one physician licensed under Chapter 458 or 459, F.S. available to treat patients by walk-in or by appointment; and (ii) provides general medical treatment to any physically sick or injured person. Facilities that specialize in treating specific classes of medical conditions or specific classes of patients, including emergency rooms affiliated with specialty or Class II hospitals and clinics affiliated with specialty or Class II hospitals, will not be accepted. Additionally, it must have been in existence and available for use by the general public as of the Application Deadline. If East Pointe’s selected Medical Facility does not meet the definition of “Medical Facility” in the RFA, East Pointe will lose 4 Proximity Points, reducing its total Proximity Points to 7. The East Pointe Application would still be eligible but would not receive the Proximity Funding Preference and, therefore, would fall out of the funding range of the RFA. Bella Vista alleged that East Pointe should not have received Proximity Points for a Medical Facility because the Lee Community Healthcare location specified in its application “only serves adults and therefore only treats a specific group of patients.” Lee Community HealthCare operates nine locations in Lee County, including the “Dunbar” location that East Pointe named in its application. Lee Community Healthcare’s own promotional materials label the Dunbar location as “adults only.” Robert Johns, Executive Director for Lee Community Healthcare, testified by deposition. Mr. Johns testified that as of the RFA application date of September 24, 2019, the Dunbar office provided services primarily to adults 19 years of age or over, by walk-in or by appointment. A parent who walked into the Dunbar office with a sick or injured child could obtain treatment for that child. A parent seeking medical services for his or her child by appointment would be referred to a Lee Community HealthCare office that provided pediatric services. Mr. Johns testified that the Dunbar office would provide general medical treatment to any physically sick or injured person who presented at the facility, including children. Children would not be seen by appointment at the Dunbar facility, but they would be treated on a walk-in basis. The RFA requires a Medical Facility to treat patients “by walk-in or by appointment.” Ms. Button testified that Florida Housing reads this requirement in the disjunctive. A Medical Facility is not required to see any and all patients by walk-in and to see any and all patients by appointment. Florida Housing finds it sufficient for the Medical Facility to see some or all patients by walk-in or by appointment. Ms. Button opined that the Dunbar office met the definition of a Medical Facility because it treated adults by walk-in or appointment and treated children on a walk-in basis. Florida Housing’s reading is consistent with the literal language of the RFA definition. While it would obviously be preferable for the Dunbar facility to see pediatric patients by appointment, the fact that it sees them on a walk-in basis satisfies the letter of the RFA provision. Bella Vista has failed to demonstrate that Florida Housing’s preliminary determination of eligibility and selection for funding was contrary to the applicable rules, statutes, policies, or specifications of the RFA or was clearly erroneous, contrary to competition, arbitrary, or capricious. THE BEMBRIDGE APPLICATION Florida Housing deemed the Bembridge Application eligible. Pursuant to the terms of the RFA, Bembridge was preliminarily selected for funding. Bembridge proposed a development in Collier County, a Medium County in RFA terms. As an applicant from a Medium County, Bembridge was required to achieve at least 7 total Proximity Points to be eligible for funding and at least 9 Proximity Points to receive the Proximity Funding Preference. Medium County applicants are allowed, but not required, to claim both Transit Service points and Community Service points. As to Community Services, the RFA provides that an applicant may receive a “maximum 4 Points for each service, up to 3 services.” The RFA goes on to state: Applicants may provide the location information and distances for three of the following four Community Services on which to base the Application’s Community Services Score.[5] The Community Service Scoring Charts, which reflect the methodology for calculating the points awarded based on the distances, are outlined in Exhibit C. In its Application, Bembridge listed four, not three, Community Services. Bembridge was one of six Applicants that mistakenly submitted four Community Services instead of three. The Review Committee scorer reviewing Community Services in the applications stated on her scoring sheet: “After removing points for the service with the least amount of points, all still met the eligibility requirement.” 5 The four listed Community Services were Grocery Store, Public School, Medical Facility, and Pharmacy. Florida Housing interpreted the RFA as not specifically prohibiting an applicant from listing four Community Services, but as providing that the applicant could receive points for no more than three of them. As to the six applicants who submitted four Community Services, Florida Housing awarded points only for the three Community Services that were nearest the proposed development.6 Bembridge received 3 Proximity points for its Grocery Store, 3.5 Proximity Points for its Pharmacy, and 4 Proximity Points for its Public School, for a total of 10.5 Proximity Points for Community Services. Thus, as originally scored, Bembridge met the Proximity Funding Preference. Florida Housing did not score the Medical Facility listed by Bembridge, which was the farthest Community Service from the proposed development. Ms. Button testified that this fourth Community Service was treated as surplus information, and because it did not conflict with any other information in the application or cause uncertainty about any other information, it was simply not considered. Ms. Button likened this situation to prior RFAs in which applicants included pharmacies as Community Services even though they were not eligible in proposed family developments. Florida Housing disregarded the information as to pharmacies as surplus information. It did not consider disqualifying the applicants for providing extraneous information. Ms. Button also made it clear that if one of the three Community Services nearest the proposed development was found ineligible for some reason, the fourth Community Service submitted by the applicant would not be considered. The fourth Community Service was in all instances to be disregarded as surplusage in evaluating the application. 6 When queried as to whether the fourth Community Service was removed because it was worth the fewest points, as the reviewer’s notes stated, or because it was farthest away from the proposed development, Ms. Button replied that the distinction made no difference because the service that is farthest away is invariably the one that receives the fewest points. Florida Housing did not consider disqualifying Bembridge and the other five Applicants that mistakenly listed an extra Community Service in their applications. Ms. Button stated, “They provided in all of them, Bembridge and the others that were listed in this, they did provide three Community Services. And so I don’t think it is reasonable to throw out those applications for providing a fourth that we would just not consider nor give benefit to for those point values.” Bella Vista contends that Florida Housing should have rejected the Bembridge application rather than award points for the three nearest Community Services. Ms. Button testified that this was not a reasonable approach if only because there was nothing in the RFA stating that an application would be rejected if it identified more Community Services than were required. Ms. Button also noted that this was one of the first RFAs to allow applicants to select among four Community Services. She believed the novelty of this three-out-of-four selection process led to six applications incorrectly listing four Community Services. She implied that the Community Services language would have to be tweaked in future RFAs to prevent a recurrence of this situation, but she did not believe it fair to disqualify these six applicants for their harmless error. The Review Committee scorer did not perform a minor irregularity analysis relating to the fourth Community Service provided by Bembridge and the other applicants. Ms. Button opined that the addition of an extra Community Service amounts to no more than a minor irregularity because it provided no competitive advantage to the applicant and created no uncertainty that the terms and requirements of the RFA have been met. The RFA allows up to six proximity points for Transit Services. It specifically provides: Up to three Public Bus Stops may be selected with a maximum of 2 points awarded for each one. Each Public Bus Stop must meet the definition of Public Bus Stop as defined in Exhibit B, using at least one unique bus route. Up to two of the selected Public Bus Stops may be Sister Stops that serves the same route, as defined in Exhibit B. The RFA defines “Sister Stop” as: two bus stops that (i) individually, each meet the definition of Public Bus Stop, (ii) are separated by a street or intersection from each other, (iii) are within 0.2 miles of each other, (iv) serve at least one of the same bus routes, and (v) the buses travel in different directions. The Bembridge Application listed two Public Bus Stops, the definition of which is set forth at Finding of Fact 107 above. Based on the Transit Service Scoring Chart, Bembridge received a total of 1.0 Proximity Point for Transit Services for its two Public Bus Stops. Numerous questions were asked at the hearing about whether Bembridge’s identified bus stops were “Sister Stops” as defined in the RFA, and the evidence on that point was not definitive. However, whether they are Sister Stops is irrelevant because each stop identified by Bembridge independently met the definition of “Public Bus Stop” in the RFA and was therefore eligible for Transit Proximity Points. Bella Vista has failed to demonstrate that Florida Housing’s preliminary determination of eligibility and selection for funding was contrary to the applicable rules, statutes, policies, or specifications of the RFA or was clearly erroneous, contrary to competition, arbitrary, or capricious.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Housing Finance Corporation enter a final order as to RFA 2019-102 finding that: The Berkeley Application is ineligible for funding; The Sierra Bay Application is ineligible for funding; The Solaris Application is ineligible for funding; The Metro Grande Application is eligible for funding; The Beacon Place Application is ineligible for funding; The East Pointe Application is eligible for funding and entitled to the Proximity Funding Preference; and The Bembridge Application is eligible for funding. DONE AND ENTERED this 6th day of April, 2020, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 6th day of April, 2020. COPIES FURNISHED: Christopher Dale McGuire, Esquire Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301 (eServed) Craig D. Varn, Esquire Manson Bolves Donaldson & Varn, P.A. Suite 820 106 East College Avenue Tallahassee, Florida 32301 (eServed) Amy Wells Brennan, Esquire Manson Bolves Donaldson & Varn, P.A. Suite 300 109 North Brush Street Tampa, Florida 33602 (eServed) Hugh R. Brown, General Counsel Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301-1329 (eServed) Michael P. Donaldson, Esquire Carlton Fields, P.A. 215 South Monroe Street, Suite 500 Post Office Drawer 190 Tallahassee, Florida 32302-0190 (eServed) Donna Elizabeth Blanton, Esquire Radey Law Firm, P.A. Suite 200 301 South Bronough Street Tallahassee, Florida 32301 (eServed) M. Christopher Bryant, Esquire Oertel, Fernandez, Bryant & Atkinson, P.A. Post Office Box 1110 Tallahassee, Florida 32302-1110 (eServed) Anthony L. Bajoczky, Jr., Esquire Ausley & McMullen, P.A. Post Office Box 391 Tallahassee, Florida 32301 (eServed) Maureen McCarthy Daughton, Esquire Maureen McCarthy Daughton, LLC Suite 3-231 1400 Village Square Boulevard Tallahassee, Florida 32312 (eServed) Michael J. Glazer, Esquire Ausley & McMullen, P.A. 123 South Calhoun Street Post Office Box 391 Tallahassee, Florida 32302 (eServed) Seann M. Frazier, Esquire Parker, Hudson, Rainer & Dobbs, LLP Suite 750 215 South Monroe Street Tallahassee, Florida 32301 (eServed) Betty Zachem, Esquire Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301 (eServed) Corporation Clerk Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301-1329 (eServed)
