Findings Of Fact Petitioners in this proceeding challenge the validity of proposed Rule 21E-15.05(2) , Florida Administrative Code. The rule, as noted in the October 2, 1981, issue of the "Florida Administrative Weekly," provides as follows: An applicant shall also be required to submit proof that he can be bonded in the amount of $5000 by a surety corporation authorized to do business in the State of Florida and that said bond shall be currently in force and effect and executed subject to the following conditions: The terms of the bend shall be In a form acceptable to the Florida Construction Industry Licensing Board and shall remain in full force and effect if the applicant obtains a license as a certified contractor under the Chapter 489, Florida Statutes, and shall be furnished to the Florida Construction Industry Licensing Board before issuance of a license. The bend shall be subject to claim by any consumer sustaining monetary damages caused by or arising out of acts of the contractor found by the Florida Construction Industry Licensing Board to be violations of subsections (d), (h) or (k) of Section 489.129(1), Florida Statutes, provided that: The consumer is the owner or lessee of real property who has contracted with the certified contractor for the construction, improvement or alteration of a structure or structures on such real property, and the consumer has incurred monetary damages as a result of this contractual relationship. Suit for such claim must be commenced within one year from the date of the finding of the Florida Construction Industry Licensing Board of a violation of subsections (d), or (k) of Section 489.129(1), Florida Statutes, on which such suit is based. Suit for such claim must be based on acts of the contractor performed in his capacity as a certified contractor and not for any acts which he may have performed in the capacity of a registered contractor. The amount of the claim paid by the bending company shall be based on a final judgment in a court of competent jurisdiction or an out of court settlement. Subsequently, the proposed rule was amended to limit the period during which the required bond is to be in effect to two years from the date of issuance of a license. The proposed rule, as amended, was noticed in the November 25, 1981, issue of the "Florida Administrative Weekly." The Board is the state agency charged by statute with determining the qualifications for licensure of persons seeking statewide certification to engage in the construction and home improvement industries in the State of Florida. Section 489.115(1), Florida Statutes. In making this determination, the Board is also authorized by statute to adopt rules defining "financial responsibility" in order to determine whether an applicant should be issued a certificate or registration. Section 489.115(4) , Florida Statutes. Petitioner, Florida Home Builders Association, is a nonprofit trade association consisting of over twelve thousand members, including builders, developers, manufacturers, subcontractors and suppliers. Petitioner, Bruce Johnson, has been licensed in Leon County as a residential contractor for aPPRDximately fourteen months. In order to obtain his residential contractor's license, he was required to pass a licensing examination. While so licensed, Mr. Johnson has completed one speculative residential home, which was subsequently sold. Mr. Johnson currently has no projects under construction. At final hearing, Mr. Johnson indicated that he would "potentially" like to take the state licensing examination, perhaps within the next two years. Petitioner Johnson has never applied to the Board for state certification in any category, but has been advised by a Tallahassee insurance agency representing several national bonding companies, that he would be ineligible for the type of bond required under the Board's proposed rule because his financial assets are currently insufficient to induce a bonding company to issue the required bond. Prior to the final hearing in this cause, the Board filed a Motion to Dismiss for Lack of Jurisdiction, asserting that Petitioners each lacked "standing" to challenge the proposed rule. Because the issues raised in that motion involve a mixed question of law and fact, ruling was reserved until after the taking of testimony. In light of the fact that the Hearing Officer has determined that on the basis of the facts of record the Board's Motion to Dismiss is well taken, no findings are made concerning Petitioners' allegations that the Board lacks authority to adopt the rule, that the economic impact statement is invalid and that the rule is not based upon competent substantial evidence.
The Issue Whether Florida Housing Finance Corporation’s (“Florida Housing”) preliminary award of funding to University Station I, LLC (“University Station”), was clearly erroneous, contrary to competition, arbitrary or capricious, or contrary to Florida Housing’s governing statutes, rules, policies, or RFA specifications.
Findings Of Fact Based on the evidence adduced at the final hearing, the record as a whole, the stipulated facts, and matters subject to official recognition, the following Findings of Fact are made: Findings on Florida Housing and the RFA Florida Housing is a public corporation created pursuant to section 420.504, Florida Statutes, and promotes public welfare by administering the financing of affordable housing in Florida. Section 420.5099 designates Florida Housing as the State of Florida’s housing credit agency within the meaning of section 42(h)(7)(A) of the Internal Revenue Code. Accordingly, Florida Housing is responsible for establishing procedures for allocating and distributing low income housing tax credits. Florida Housing allocates housing credits and other funding via requests for proposals or other competitive solicitation methods identified in section 420.507(48). Florida Housing initiated the instant competitive solicitation by issuing the RFA on October 15, 2020, and anticipates awarding up to an estimated $88,959,045.00 in State Apartment Incentive Loan (“SAIL”)2 financing. The RFA set forth a process by which applications would be scored based, in part, on eligibility items. Only applications satisfying all of the eligibility items were eligible for funding and considered for selection. 2 Marissa Button, the Director of Multifamily Programs at Florida Housing, testified that the SAIL program finances the development of multifamily, affordable rental housing. The Florida Legislature traditionally appropriates money for the SAIL program via the State Housing Trust Fund. Site Control was an eligibility item because Florida Housing wants assurances that applicants selected for funding will be able to actually use the development sites.3 Applicants satisfy the Site Control requirement by providing a properly completed and executed Florida Housing Site Control Certification Form (“the Site Control Form”). In order for the Site Control Form to be considered complete, an applicant had to attach documentation demonstrating that it: (a) was a party to an eligible contract or lease; or (b) owned the property in question. The RFA set forth specific requirements for contracts and leases used for demonstrating site control. For example, a contract had to satisfy all of the following conditions: It must have a term that does not expire before May 31, 2021 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 May 31, 2021. 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 3 Ms. Button explained that Site Control “is a component of how the applicant demonstrates its ability to proceed with the proposed development. And essentially it is the – the way that we require them to demonstrate they have control over the proposed development site.” As for why Site Control is important, Ms. Button testified that Florida Housing wants “to be assured if the – the applicant is successful in its request for funding, that the – they will be able to actually use the development site.” 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. The language quoted above indicates that the RFA was referring to a sales contract when it used the term “contract.” If an applicant used a lease to satisfy the Site Control requirement, then the RFA provided the following: (3) Lease – The lease must have an unexpired term of at least 50 years after the Application Deadline and the lessee must be the Applicant. The owner of the subject property must be a party to the lease, or a party to one or more intermediate leases, subleases, agreements, or assignments, between or among the owner, the Applicant, or other parties, that have the effect of assigning the owner’s right to lease the property for at least 50 years to the lessee. Marissa Button, Florida Housing’s Director of Multifamily Programs, testified that the RFA did not require a lease to have a commencement date. The RFA required that Site Control documentation for leases “include all relevant intermediate contracts, agreements, assignments, options, conveyances, intermediate leases, and subleases. If the proposed Development consists of Scattered Sites, site control must be demonstrated for all of the Scattered Sites.” Ms. Button provided the following testimony about this requirement: A: Florida Housing includes the requirements for that documentation to – to essentially acknowledge that there are circumstances where there may be an intermediate contract or agreement that would demonstrate one of the criteria for those different types of site control and the requirements that we want to see that -- that chain back to the requirement itself. * * * Q: So Florida Housing considers this term to broadly include all different types of potential contract agreements, et cetera; correct? A: Yes. Q: Could you give me an example of an intermediate contract or agreement? A: Yes. An intermediate contract or agreement may be where – with regard to the [ ] contract, the terms require an owner of the subject property to be a seller of the subject property. And so there may be an applicant that has a contract with the seller of the property. And that seller might not be the actual owner; so there may be an intermediate contract that we need to see between the seller to the buyer and the actual owner of the subject property. Q: And that situation that you just described, that happened in the past few years; correct? A: I can think of one example where that happened, yes. Q: Okay. And in that case Florida Housing agreed that the intermediate agreement was necessary to include with the site documentation; correct? A: Florida Housing reviewed – yes. That – Florida Housing’s position was there was an intermediate agreement necessary because the site control documentation provided did not include the owner of the subject property. As for Florida Housing’s review of Site Control documentation, the RFA provided as follows: Note: [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. During scoring, [Florida Housing] will rely on the properly executed Site Control Certification form to determine whether an Applicant has met the requirement of this RFA to demonstrate site control. [Florida Housing] 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 it is determined that the site control documents do not meet the above requirements, [Florida Housing] may rescind the award. When questioned about Florida Housing’s review of Site Control documentation, Ms. Button offered the following testimony: Q: If you look at the next page, Page 48, at the end of Subsection A there’s a note. It says Florida Housing will not review the site control during the scoring process. It will not evaluate the authority or enforceability of such documentation; correct? A: Yes. Q: But even though Florida Housing does not review the site documentation during scoring, it will review the documentation during the bid protest; correct? A: Yes as it relates to the RFA requirements. * * * Q: If the documents attached to a site control documentation [do] not meet the RFA criteria, then that site control certification form would be incorrect; right? A: Yes. Q: And the applicant would be found ineligible; correct? A: Yes. The RFA and Ms. Button’s testimony indicate that Florida Housing intended, under most circumstances, to accept the representations set forth in an applicant’s Site Control documentation during the scoring process. In other words, Florida Housing did not go behind the Site Control documentation to verify the representations therein. The terms of the RFA were not challenged. Stipulated Facts Pertaining to Certain Parties Douglas Gardens and Florida Housing agree that Douglas Gardens’ application is ineligible for funding via the RFA. Quiet Meadows and Florida Housing agree that Quiet Meadows’ application is ineligible for funding via the RFA. MHP and Florida Housing agree that MHP’s Application is ineligible for funding via the RFA.4 MHP, Quiet Meadows, and Douglas Gardens agree that Fulham Terrace’s application remains eligible for funding via the RFA. The Willows and Florida Housing agree that the Willows Application is ineligible for funding via the RFA. The Willows agrees that the HTG Astoria Application is eligible for funding via the RFA. 4 MHP, Florida Housing, Quiet Meadows, Douglas Gardens, and Fulham Terrace entered into a Settlement Agreement and Stipulation on March 26, 2021, that was entered into evidence as Fern Grove Exhibit 1. SoMi Parc, Vista, and Florida Housing agree that the SoMi Parc Application is ineligible for funding via the RFA. SoMi Parc has accepted an invitation to enter credit underwriting for the same Development in RFA 2020-203 and thus cannot be funding via the RFA. Findings Regarding the Applications of University Station and Vista Florida Housing received 90 applications in response to the RFA. Those applications were processed, deemed eligible or ineligible, scored, and ranked pursuant to the terms of the RFA. On January 22, 2021, Florida Housing announced its intention to award funding to 17 applicants, subject to satisfactory completion of the credit underwriting process. University Station was one of the 17 successful applicants, and University Station’s Site Control documentation included: (a) a Ground Lease Agreement between the City of Hollywood, Florida (“the City”), and University Station (“the University Station I Lease”); (b) a Ground Lease Agreement between the City and University Station II, LTD (“the University Station II Lease”); and (c) an Assignment of Ground Lease Agreement assigning University Station II, LTD’s interests in the Ground Lease Agreement between the City and University Station II, LTD to University Station.5 The University Station I Lease described its terms as follows: This lease shall be effective as of the Effective Date, but the term shall commence on the Commencement Date and expire at 11:59 p.m. on the seventy-fifth (75th) anniversary of the Commencement Date (the “Term”), unless this lease is terminated earlier pursuant to the provisions contained herein. For purposes of this lease, the “Commencement Date” shall be the closing date of Tenant’s construction financing for the development of the Phase I Project (the “Construction Financing”), but in no event later 5 The Assignment of Ground Lease Agreement between University Station and University Station II was a relevant intermediate document for demonstrating Site Control. than June 30, 2022. Tenant’s right to take physical possession of the Leased Premises shall begin on the Commencement Date. The University Station II Lease between the City and University Station II described its terms as follows: This lease shall be effective as of the Effective Date, but the term shall commence on the Commencement Date and expire at 11:59 p.m. on the seventy-fifth (75th) anniversary of the Commencement Date (the “Term”), unless this lease is terminated earlier pursuant to the provisions contained herein. For purposes of this Lease, the “Commencement Date” shall be the later of the closing date of Tenant’s construction loan for the development of the Project (the “Construction Loan”) and the termination of the lease of the premises to Barry University, but in no event later than June 30, 2023. Tenant’s right to take physical possession of the Leased Premises shall begin on the Commencement Date. Landlord and Tenant acknowledge that the leased premises are currently improved with an educational facility and adjacent ground parking that is leased to Barry University through November 23, 2021 and the Landlord may enter into an additional one-year extension of the lease to Barry University at Landlord’s sole discretion. Until the Commencement Date, Landlord, or its tenant, shall be solely responsible for the operation and maintenance of the leased premises and any uses on the Leased Premises. University Station’s proposed Development site consists of five Scattered Sites. Barry University currently leases a building and parking spaces located on the Scattered Site described as latitude and longitude coordinates of 26.014703, -80.148572 in Question 5.d.2 of the University Station Application. This is the site described in the University Station II Lease. The City and Barry University, Inc., are the parties to the Barry University Lease (“the Barry University Lease”). The Barry University Lease was executed on May 23, 2011, with a term of 10 and one-half years, which would expire on approximately November 23, 2021. With regard to its term, the Barry University Lease states that “[t]he term of this lease shall be for ten and one-half (10 ½) years commencing upon the execution of this lease. The parties will have the mutual option to renew this lease subject to City Commission and the Lessee’s Board of Directors approval.” A copy of the Barry University Lease was not included in University Station’s application. In contrast to the statement in the University Station II Lease that the Barry University Lease could be extended by “an additional one-year extension” at the City’s “sole discretion,” the Barry University Lease simply says that the parties have a “mutual option to renew” with no mention of a particular term. Ms. Button provided the following testimony regarding the Barry University Lease: Q: And you are aware that University Station did not submit the Barry University lease as part of its site control documentation; correct? A: Yes. Q: And does the existence of that Barry University lease change your position on whether University Station met the requirements in the RFA for a lease? A: No. Q: And why not? A: Because the documents submitted with the application meet the terms of the RFA for a lease site control documentation. Q: Did the existence of the Barry University lease impact whether or not the University Station site control documentation met the requirements for a lease? A: No. Q: As Florida Housing’s corporate representative, what is your position regarding University Station’s application? A: It is eligible for funding. Vista also applied for funding from the RFA. Florida Housing determined that Vista was eligible for funding, but Florida Housing did not preliminarily select Vista for funding. If University Station is deemed ineligible for funding, then Vista will be selected for funding subject to the successful completion of credit underwriting. Ultimate Findings Vista has failed to carry its burden of demonstrating that Florida Housing’s proposed award to University Station was clearly erroneous, contrary to competition, arbitrary, or capricious. Also, the greater weight of the evidence demonstrates that: (a) Florida Housing’s proposed action is not contrary to the RFA’s terms; and that (b) University Station will have control over the site in question. The greater weight of the evidence demonstrates that the University Station Lease I Lease, the University Stations II Lease, and the assignment of University Station II’s interest to University Station collectively satisfied the RFA’s requirements because: (a) there is unexpired term of at least 50 years after the application deadline; (b) University Station, i.e., the lessee, was the applicant for funding; and (c) the City, as the owner of the subject property, was a party to the lease. Upon considering Florida Housing’s preliminary approval of University Station’s application without the benefit of reviewing the Barry University Lease, the greater weight of the evidence demonstrates that Florida Housing was not clearly erroneous when it determined that the Barry University Lease was not a relevant intermediate lease within the meaning of the RFA. The University Station II Lease between the City and University Station II requires the lease to begin no later than June 30, 2023. Also, the City and University Station II acknowledge that Barry University’s Lease runs through November 23, 2021, and they agree that the City may extend Barry University’s lease by “an additional one-year.” Accordingly, the Barry University Lease will end prior to June 30, 2023, and University Station will have site control no later than that date. In other words, the greater weight of the evidence demonstrates that University Station has control over the site in question. The analysis set forth above does not change if one considers the Barry University Lease.6 Even though the Barry University Lease does not limit a renewal to one year, the lease cannot be renewed without the City’s assent, and the City agreed in the University Station II Lease that any renewal would not exceed one year. Therefore, even if one considers the terms of the Barry University Lease, the greater weight of the evidence does not demonstrate that it is a relevant intermediate document that was required to be included with University Station’s application. Again, the greater weight of the evidence demonstrates that University Station has control over the site in question. 6 As will be explained in more detail in the Conclusions of Law below, “[n]ew evidence cannot be offered to amend or supplement a party’s response or application. § 120.57(3)(f), Fla. Stat. However, new evidence may be offered in a competitive protest proceeding to prove that there was an error in another party’s application. Intercontinental Props., supra.” Heritage at Pompano Housing Partners, Ltd. v. Fla. Housing Fin. Corp., Case No. 14-1361BID, ¶ 116 (Fla. DOAH June 10, 2014; Fla. Hous. Fin. Corp. June 13, 2014).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Florida Housing Finance Corporation enter a final order: awarding funding to University Station I, LLC, via Request for Application 2020-205 subject to credit underwriting; and (b) finding that the applications submitted by Douglas Gardens IV, Ltd., MHP FL VIII, LLLP, Quiet Meadows, Ltd, RST The Willows, LP, and Residences at SoMi Parc, LLC are ineligible for funding via Request for Application 2020-205. DONE AND ENTERED this 17th day of May, 2021, in Tallahassee, Leon County, Florida. COPIES FURNISHED: Betty Zachem, Esquire Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301 Marc Ito, Esquire Parker Hudson Rainer & Dobbs, LLP Suite 750 215 South Monroe Street Tallahassee, Florida 32301 Seann M. Frazier, Esquire Parker, Hudson, Rainer & Dobbs, LLP Suite 750 215 South Monroe Street Tallahassee, Florida 32301 S G. W. CHISENHALL 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 17th day of May, 2021. Maureen McCarthy Daughton, Esquire Maureen McCarthy Daughton, LLC Suite 3-231 1400 Village Square Boulevard Tallahassee, Florida 32312 Christopher Dale McGuire, Esquire Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301 Michael P. Donaldson, Esquire Carlton Fields P.A. Suite 500 215 South Monroe Street Tallahassee, Florida 32302 Michael J. Glazer, Esquire Ausley McMullen 123 South Calhoun Street Post Office Box 391 Tallahassee, Florida 32302 William D. Hall, Esquire Dean Mead Suite 1200 106 East College Avenue Tallahassee, Florida 32301 John L. Wharton, Esquire Dean Mead and Dunbar Suite 1200 106 East College Avenue Tallahassee, Florida 32301 Corporation Clerk Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301-1329 Hugh R. Brown, General Counsel Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301-1329 Brittany Adams Long, Esquire Radey Law Firm, P.A. Suite 200 301 South Bronough Street Tallahassee, Florida 32301 Craig D. Varn, Esquire Manson Bolves Donaldson Varn, P.A. Suite 820 106 East College Avenue Tallahassee, Florida 32301 Daniel Ryan Russell, Esquire Dean Mead Suite 1200 106 East College Avenue Tallahassee, Florida 32301 Amy Wells Brennan, Esquire Manson Bolves Donaldson Varn, P.A. Suite 300 109 North Brush Street Tampa, Florida 33602
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 The issue in this case is whether Rules 15C-1.0102(4) and (5); 15C-1.0104(1)(a) and (b), (2)(b), (3), and (4)(a) and (b), Florida Administrative Code, constitute an invalid exercise of delegated legislative authority.
Findings Of Fact The Parties. Petitioner, Manufactured Housing Association of Florida, Inc. (hereinafter referred to as the "Association"), is a Florida corporation organized for the purpose of representing its members with regard to regulatory matters involving the installation of mobile and manufactured homes. The membership of the Association consists of manufactured housing dealers, manufactured housing installers, and one manufactured housing manufacturer. Hudz Manufactured Housing, Inc. (hereinafter referred to as "Hudz"), is a licensed dealer of homes. Hudz contracts with installers for the installation of manufactured homes. (Stipulated Facts.) Bob Uhl Mobile Home Sales, Inc. (hereinafter referred to as "Uhl"), is a licensed dealer-installer of manufactured homes. (Stipulated Facts.) Jabo's Mobile Home Services (hereinafter referred to as "Jabo's"), is a licensed installer of manufactured homes. (Stipulated Facts.) Respondent, the Department of Highway Safety and Motor Vehicles (hereinafter referred to as the "Department"), is charged with the authority to regulate manufactured mobile homes in Florida pursuant to Chapter 320, Florida Statutes. Regulating the Installation of Manufactured Homes. Manufactured homes are required under state and federal law to be anchored to the ground in order to withstand a minimum level of wind forces. Anchoring systems consist of a combination of diagonal, vertical, longitudinal, and centerline ties (metal straps). These metal straps are connected at one end to the frame of the manufactured home and the I-beam which runs the length of the home and at the other end to anchors which are augured into the ground and held in place by stabilizing plates. (Stipulated Facts.) The requirement for some form of anchoring system has been a part of federal regulations and state rules for many years. (Stipulated Facts.) Changes were made to the federal regulations in 1994 in response to concerns raised about the adequacy of anchoring systems after Hurricane Andrew struck South Florida in 1992. These changes to the federal regulations became effective on July 13, 1994. The federal regulations, which are administered by the United States Department of Housing and Urban Development (hereinafter referred to as "HUD") required that, after July 13, 1994, manufactured homes and their anchoring systems must be designed to withstand certain wind forces depending on where the homes are to be located. The HUD regulations establish three wind zones in the United States: Wind Zones I, II, and III. All of Florida is located in either Wind Zone II or III. For manufactured homes which are to be located in Wind Zone II, the homes and their anchoring systems must be designed to withstand the forces of winds with a speed of 100 mph. For homes in Wind Zone III, the homes and their anchoring systems must be designed to withstand the forces of winds with a speed of 110 mph. (Stipulated Facts.) As a result of the destruction and deaths that were caused by Hurricane Andrew in 1992, tornadoes that struck central Florida in 1998, and a tornado that struck Hyde Park, Florida, in 1998, the Department concluded that more stringent tie down requirements were required for manufactured homes. The Department adopted Chapter 15C-1 in an effort to carry out its responsibility under Chapter 320, Florida Statutes. Throughout the last several years, the Department has amended these rules several times. The last amendments, which are, in part, the subject of this proceeding, were adopted effective March 31, 1999. (Stipulated Facts.) In particular, the Department amended Rules 15C-1.0102(4) and (5); 15C- 1.0104(1)(a) and (b), (2)(b), (3) and (4)(a) and (b), Florida Administrative Code (hereinafter referred to as the "Challenged Rules"). (Stipulated Facts.) Competent Substantial Evidence to Support the Challenged Rules. In the second Amended Petition, Petitioners have alleged generally that all of the Challenged Rules constitute an "invalid exercise of delegated legislative authority" as defined in Section 120.52(8), Florida Statutes. In particular, Petitioners have alleged that the all of the Challenged Rules, except Rule 15C-1.0104(1)(a) and (b), Florida Administrative Code, are invalid because they are "arbitrary and capricious" and they are "not supported by competent substantial evidence." Section 120.52(8)(e) and (f), Florida Statutes. Petitioners have alleged that Rule 15C-1.0104(1)(a) and (b), Florida Administrative Code, is invalid because it is "vague, fails to establish adequate standards for agency decisions, or vest unbridled discretion in the agency." Section 120.52(8)(d), Florida Statutes. As discussed further in the Conclusions of Law portion of this Final Order, Petitioners had the burden of proving that the Challenged Rules in fact constitute an invalid exercise of delegated authority as alleged in their second Amended Petition. The Challenged Rules are not "arbitrary and capricious" on their face. Therefore, in order for Petitioners to meet their burden of proving that the Challenged Rules are "arbitrary and capricious," Petitioners were required to prove what the Department's rationale for adopting the Challenged Rules was and then offer evidence to refute the Department's rationale. The first step in meeting this burden could have easily been met by calling someone designated by the Department to speak on its behalf and asking that person to explain the Department's rationale for adopting the Challenged Rules. Petitioners did not take this first step and the Department was under no obligation to do so for them. In order for Petitioners to meet their burden of proving that the Challenged Rules are not supported by competent substantial evidence, Petitioners were required to prove what the Department relied upon in adopting the Challenged Rules and then offer evidence to refute the competency of the evidence relied upon by the Department. Again, the first step in meeting this burden could have easily have been meet by calling someone designated by the Department to speak on its behalf and asking that person to explain what evidence the Department relied upon in adopting the Challenged Rules. Petitioners did not take this first step and the Department was under no obligation to do so for them. As a result of Petitioners' failure to provide the starting point for determining whether the Challenged Rules are arbitrary and capricious or are not supported by competent substantial evidence, Petitioners failed to meet their burden of proof in this case. Because the Challenged Rules are not arbitrary and capricious on their face it cannot be concluded that they are arbitrary and capricious without knowing the precise reason for the adoption of the Challenged Rules. Without knowing precisely what evidence the Department relied upon in adopting the Challenged Rules it cannot be concluded that they are not supported by competent substantial evidence. To the extent that evidence was offered in this case to explain the Department's rationale, at least in part, for adopting the Challenged Rules, and to show some of the evidence that the Department relied upon in adopting the Challenged Rules, that evidence supported the Department's adoption of the Challenged Rules. Galvanizing; Rules 15C-1.0102(4) and (5), Florida Administrative Code. Prior to the amendment of Rule 15C-1.0102, Florida Administrative Code, to its present form, the Rule contained no requirement that anchors or stabilizing devices used with manufactured homes be galvanized. (Stipulated Facts.) Rule 15C-1.0102(4), Florida Administrative Code, now provides, in pertinent part, the following: all mobile/manufactured homes and park trailers shall be anchored with approved auger anchors, which shall be coated with hot-dipped zinc galvanizing (ASTM Standard #123-89A, which is hereby incorporated by reference); .60 ounces per square foot. (Stipulated Facts.) Rule 15C-1.0102(5), Florida Administrative Code, now provides, in pertinent part, the following: all ground anchors shall have approved stabilizing devices approved by the department, each of which shall be coated with hot-dipped zinc galvanizing (ASTM Standard #123-89A, which is hereby incorporated by reference); .60 ounces per square foot or zinc coated to ASTM (A929/A 929M--96, which is hereby incorporated by reference). (Stipulated Facts.) The process of galvanizing anchors and other tie down components begins with the cleaning and preparation of ungalvanized, or "black," steel. The black steel is then placed in molten zinc. Iron in black steel reacts chemically and metallurgically with the molten zinc to form alloys of intermetallic layers. The layer immediately next to the steel is about 25 percent iron, the next layer is about 10 percent iron, the next is about 5 percent iron, and the outer layer is about 99 percent pure zinc. The outer layer of zinc makes up about one fifth of the total thickness of the coating and is soft enough to be scratched with a coin. The inner three layers are harder and more resistant to abrasions than the steel it coats. Zinc galvanizing protects the steel from corroding. As the zinc corrodes, it forms zinc compounds that remain in the soil and continue to provide protection to the steel even after the zinc is completely corroded off the steel. Thus, zinc galvanized steel is better protected from corrosion than steel that is not galvanized. If a small gap in the zinc coating occurs, the zinc around the gap will still protect the steel through an electrochemical process. The gap can be up to 6 millimeters or 1/4 of an inch wide. The effectiveness of galvanizing will be reduced if a galvanized anchor strap is attached to an ungalvanized anchor. According to a report prepared by the National Bureau of Standards which included the findings of a 45-year study of the National Bureau of Mines and Standards, the rate of corrosion for steel varied from 2.6 times that of zinc to about 23 times that of zinc, with the average being six times that of zinc, depending of soil conditions. In no case was it found that the rate of corrosion of zinc was greater than the rate of corrosion of steel regardless of the soil conditions. Galvanization provides greater protection for manufactured home anchors from corrosion than paint. Paint is less resistant to scratching. Paint also fails to provide the same protection than galvanization provides in the case of a small scratch. Painted anchors suffer greater scratching when driven into the ground than galvanized anchors. Galvanization will increase the structural life of ground anchors buried into the ground. Manufactured homes between five and ten years old which were destroyed or damaged in 1998 in Hyde Park, Florida, evidenced excessive corrosion on the anchor heads and straps that had been used to secure the homes. These anchor heads and straps were not galvanized. The corrosion of anchor heads and straps found at Hyde Park contributed to the failure of the heads and straps during the storm. Although no tests were performed by the Department concerning the amount of galvanization per ounce which should be required for augers and stabilizing devices required by Rules 15C-1.0102(4) and (5), Florida Administrative Code, the amount of zinc required by these Rules is within the range of reasonable mounts which the Department could have selected. The evidence failed to prove that Rules 15C-1.0102(4) and (5), Florida Administrative Code, are arbitrary and capricious or not supported by competent substantial evidence. Diagonal Tie-Downs; Rule 15C-1.0104(2)(b), Florida Administrative Code. Prior to amendment to its present form, Rule 15C- 1.0104(2), Florida Administrative Code, provided the following: (2) Frame Ties All new manufactured homes shall be certified and manufactured as meeting the Department of Housing and Urban Development Manufactured Housing Construction and Safety Standards. New manufactured homes and park trailers shall be anchored to the specifications as provided by the manufacturer. New manufactured homes and park trailers shall be anchored to each anchor point as required by the manufacturer's set-up manual. Used units where the manufacturer's specifications are not available shall be anchored every six feet (6') with the anchors placed within two feet (2') of each end. (Stipulated Facts.) Rule 15C-1.0104(2)(b), Florida Administrative Code, now provides, in part, the following: (b) Diagonal tie-downs for new and used mobile/manufactured homes, in all wind zones, shall be spaced no farther apart than five feet four inches (5' 4") on center with anchors placed within two feet (2') of each end. (Stipulated Facts.) Old Rules 15C-1.0104(2)(a)-(c), Florida Administrative Code, were repealed. "Frame ties" or "tie downs" are defined in the Department's rules as "any device or method approved by the department and used for the purpose of securing the mobile/manufactured home or park trailer to ground anchors in order to resist wind forces." Rule 15C-1.0101(6), Florida Administrative Code. (Stipulated Facts.) Prior to promulgating the recent change to Rule 15C- 1.0104(2), Florida Administrative Code, the Department conducted field observations in February and March of 1998 of storm damage from several tornadoes that passed through areas of central Florida on February 22 and 23, 1998. (Stipulated Facts.) The Department also discovered that one cause of the damage caused to manufactured homes by Hurricane Andrew in 1992, was the breaking of strapping used to connect anchors to the manufactured homes. The Department relied on two reports in promulgating the change to Rule 15C-1.0104(2), Florida Administrative Code: "The Effects of Central Florida Tornadoes on Manufactured Homes" and "Recommendations on Manufactured Home Tie Down Components and Methods." (Stipulated Facts.) The Department concluded, based upon the reports it relied upon and observations of damage from Hurricane Andrew and the tornadoes in 1998, that additional diagonal tie-downs would improve the stability of manufactured homes. By reducing the space between diagonal tie-downs from six feet to five feet, four inches the load on the straps used to tie down a manufactured home will be distributed between more anchors and will decrease the load on each strap. While the evidence failed to prove that the additional tie-downs will prevent damage to manufactured homes from all storms, the additional tie-downs will result in meaningful additional protection. Tie-downs can reasonably be placed every five feet, four inches on center. Petitioners presented evidence concerning "overlapping cones of influence." For an anchor placed in the ground a cone of influence is in essence the area of dirt around the anchor which helps support and hold the anchor down. The area of influence is shaped like a cone, with the widest area of influence on the surface. If anchors are placed too close together, the area of influence of the cone at ground level will overlap and weaken the influence of the individual cones. While the cone of influence on the anchors required by the Challenged Rules may overlap because they are to be spaced closer than 7.35 feet apart, the evidence failed to prove that the requirement that diagonal tie-downs be placed five feet, four inches on center will not provide additional support. In fact, more anchors spaced closer together will result in greater overall support even if the cones of influence of the anchors overlap. The evidence failed to prove that Rule 15C- 1.0104(2)(b), Florida Administrative Code, is arbitrary and capricious or not supported by competent substantial evidence. Longitudinal Tie-Downs; Rule 15C-1.0104(3), Florida Administrative Code. Prior to adoption of the Challenged Rules, Chapter 15C-1, Florida Administrative Code, did not contain a separate requirement for longitudinal tie-downs. Rule 15C-1.0104(2), Florida Administrative Code, simply required that new manufactured homes be anchored according to the manufacturer's specifications. (Stipulated Facts.) Rule 15C-1.0104(3), Florida Administrative Code, now provides, in part, the following: Longitudinal Tie-downs. All new and used mobile/manufactured homes, installed sixty (60) days after the effective date of this rule, must have longitudinal tie-downs or other approved longitudinal stabilizing systems designed to resist horizontal wind loads in the long direction of the home (i.e.: wind load applied to each end of the home). The longitudinal tie-downs are in addition to the anchoring systems required along the exterior side walls and/or marriage walls of the mobile/manufactured home. . . . . At least four (4) anchors and straps are required (i.e., 16 per double-wide home) at the end of each section of the mobile/manufactured home. . . . . (Stipulated Facts.) The Department's decision to amend the rule to add a separate requirement for longitudinal tie-downs was based on field observations of the central Florida tornado damage in February of 1998. The Department relied on two reports as the basis for the rule: "Recommendations on Manufactured Home Tie Down Components and Methods," which was not offered into evidence, and "Effects of Central Florida Tornadoes on Manufactured Homes." (Stipulated Facts.) Damage to some homes caused by the 1998 tornadoes and Hurricane Andrew was caused by the lack of longitudinal tie- downs. Without longitudinal tie-downs, little protection is afforded manufactured homes from winds that strike the home at the ends of the home. Wind hitting the end of a manufactured home can cause a "zipper" effect, where the lift at the end pulls the first diagonal tie-down out and then, like a zipper, the rest of the anchors are pulled out down the side of the manufactured home. Evidence concerning the impact of overlapping cones of influence did not prove that the requirement of longitudinal tie-downs was invalid for the same reasons it did not support such a finding concerning diagonal tie-downs. The evidence failed to prove that Rule 15C-1.0104(3), Florida Administrative Code, is arbitrary and capricious or not supported by competent substantial evidence. Centerline Tie-Downs; Rule 15C-1.0104(4), Florida Administrative Code. Prior to amendment to its present form, Rule 15C- 1.0104(4), Florida Administrative Code, provided the following: Multiple section homes are to be secured at the centerline with straps or cable to the specifications in the manufacturer's manual or at the locations designated on the home. Used multiple section homes shall have anchors installed at all factory installed anchor strap connections including ridge beam column straps, shear wall straps/attachments or other locations designated by the manufacturer. (Stipulated Facts.) Rule 15C-1.0104(4), Florida Administrative Code, now provides the following: Centerline ties are required for all new and used multiple section homes. Multiple section homes are to be secured at the centerline with straps to the specifications in the manufacture's manual or at the location designated on the home. In addition to centerline ties specified by the manufacturer, a centerline tie must be attached within two feet (2') of each end of each section of the mobile/manufactured home. Where necessary, an approved bracket shall be added by the installer. (Stipulated Facts.) The Department's decision to amend Rule 15C-1.0104(4), Florida Administrative Code, was based on field observations of damage resulting from the central Florida tornadoes in February 1998. The Department also relied on two reports as the basis for this rule: "Engineering Report by K-2 Engineering" (1998) and "Effects of Central Florida Tornadoes on Manufactured Homes." (Stipulated Facts.) Requiring centerline ties two feet from each end of a multi-unit home will provide additional protection against wind damage. The tie-downs are necessary to counteract wind forces carried to the centerline of a home by the sheer wall system. The evidence failed to prove that Rule 15C-1.0104(4), Florida Administrative Code, is arbitrary and capricious or not supported by competent substantial evidence. Anchor Lengths; Rule 15C-1.0104(1), Florida Administrative Code. Rule 15C-1.0104(1), Florida Administrative Code, provides the following: Type I anchor holding power for homes manufactured before July 13, 1994, shall be tested to a working load of three thousand one hundred and fifty (3,150) pounds, with an ultimate load of four thousand seven hundred twenty-five (4,725) pounds. Type II anchor holding power for new homes manufactured after July 13, 1994, shall be tested to a working load of four thousand (4,000) pounds with an ultimate load of six thousand (6,000) pounds. (Stipulated Facts.) Petitioners did not provide evidence to support a finding that the requirements of Rule 15C-1.104(1), Florida Administrative Code, are not clear. Any confusion about this Rule comes from other rules which deal with when Type I or Type II anchors are used. Those rules, however, were not challenged by Petitioners. The evidence failed to prove that Rule 15C-1.0104(1), Florida Administrative Code, is vague, fails to establish adequate standards for agency decisions, or vest unbridled discretion in the agency. I. Standing. The Association was organized to represent its members in matters involving the regulation of mobile homes and mobile home installation. In particular, the Association has the authority to institute this proceeding on behalf of its members and to seek the relief requested in this case. The Association has approximately 30 members that are dealers and 12 to 15 members that are installers. The cost associated with installing manufactured homes has increased as a result of the Challenged Rules. Those costs are passed on to consumers. The evidence failed to prove, however, that Hudz, Uhl, or the members of the Association have been adversely impacted by passing on the increased cost caused by the Challenged Rules. Jabo's business, which is limited to the installation of manufactured homes, has declined as a result of increased cost caused by the Challenged Rules. While the evidence failed to prove how many of the members of the Association have lost business as a result of the Challenged Rules or that Hudz or Uhl have lost business as a result of the Challenged Rules, all the Petitioners have been required to comply with the requirements of the Challenged Rules. The Petitioners are, therefore, substantially affected by the Challenged Rules.
The Issue The issues in this case are whether Respondent violated Subsections 489.129(1)(n) and 489.129(1)(m), Florida Statutes (2005),1 and if so, what discipline should be imposed.
Findings Of Fact Page Wurts is a Florida State Certified Residential Contractor, whose license number is CRC 1327279. His initial date of licensure was July 12, 2004, and his licensure expires on August 31, 2010. Page Home Builders, Inc. has a Certificate of Authority as a Contractor Qualified Business in the State of Florida. The license number is QB 32526. The initial date of licensure was July 12, 2004, and the certificate of authority expires on August 31, 2009. Page Wurts is the primary qualifying agent for Page Home Builders, Inc. On September 9, 2005, Page Home Builders, Inc., entered into a contract with Trudy Capone for $112,000.00 to build, among other things, an addition to her home located at 1005 Verona Street, Belleair, Florida. On September 24, 2005, Ms. Capone and Page Home Builders, Inc. amended the contract to include the installation of a swimming pool and the renovation of a bathroom, including the replacement of the tub. The contract amount was increased by $37,700.00. On December 13, 2005, Ms. Capone and Page Home Builders, Inc., agreed to a change order for additional windows, increasing the contract amount by $3,200.00. On January 5, 2006, Ms. Capone and Page Home Builders, Inc., entered into a second amendment to the contract to include the installation of an air conditioning system, and the extension of the truss system over the patio, to be supported by columns. This amendment increased the contract amount by $19,485.00, bringing the total contract amount to $169,185.00. Page Home Builders, Inc. accepted approximately $153,265.00 on the contract. Ms. Capone agreed to credit Page Home Builders, Inc., with $1,084.50.00 for half the cost of a claw foot tub, which Page Home Builders, Inc., purchased. Subcontractors hired by Page Home Builders, Inc., cut several existing trusses without supporting the ceiling below and without approval of the architect, causing the ceiling of Ms. Capone’s home to collapse, damaging the floor, furniture, and other property of Ms. Capone. The collapsed ceiling nearly stuck Ms. Capone. As a result of the collapse, Ms. Capone was trapped in her house for approximately 30 minutes until she could be extricated. The hardwood floors were improperly installed. There were numerous gaps between butt and side joints with some in excess of 1/8 of an inch. There was glue smeared over the finished surfaces. Thresholds and reducers were missing. There is an area in the family room where butt joints are nearly aligned instead of being randomly staggered. Additional floating of the floors should have been done prior to the installation of the wood flooring, especially at the arched opening between the living room and hallway. The flooring color is mismatched where it transitions from the living room to the existing hall and bedrooms. John Bosley, an expert in construction, is of the credible opinion that due to the poor workmanship on the project Ms. Capone’s house was destroyed and made unlivable. The fit and finish of the work was some of the worst work that he has ever seen. Mr. Bosley is of the opinion that the poor work resulted from a lack of supervision of the subcontractors by the contractor. Mr. Bosley’s testimony is credited. It will cost over $50,000 to correct the poor workmanship. In a letter to the Department dated April 24, 2008, Page Wurts acknowledged that Ms. Capone was entitled to a credit of $650.00 for stucco and damage to plants and trellis. The difference between the credit to Ms. Capone for stucco and plant damage and the amount owed to Page Home Builders, Inc., for the tub is $434.50, bringing the total contract amount to $169,619.50. Ms. Capone made contract payments of $153,265.00, leaving $16,354.50 remaining unpaid on the contract. By subtracting the remaining contract amount from $50,000.00, which is the cost of repair, the amount owed to Ms. Capone to remedy the shoddy work is $33,645.50. The Department incurred investigative costs in this case, excluding costs associated with attorney’s time, in the amount of $477.52.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding that Respondent violated Subsections 489.129(1)(m) and 489.129(1)(n), Florida Statutes, imposing a $10,000 fine, revoking Respondent’s certification (License Nos. CRC 1327279 and QB 32526), requiring Respondent to pay restitution to Ms. Capone in the amount of $33,645.50, and requiring Respondent to pay investigative costs of 477.52. DONE AND ENTERED this 6th day of April, 2009, in Tallahassee, Leon County, Florida. S SUSAN B. HARRELL 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, 2009.
