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 Whether Respondent, Florida Housing Finance Corporation's ("Florida Housing"), intended action to award housing tax credit funding to Intervenor, Las Brisas Trace, LP ("Las Brisas"), under Request for Applications 2018-111 Housing Credit Financing for Affordable Housing Developments Located in Miami-Dade County (the "RFA"), is contrary to governing statutes, rules, the RFA specifications, and clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact Ambar is an applicant requesting an allocation of $2,700,000.00 in competitive housing tax credits. Ambar's application, assigned number 2019-035C, was deemed eligible for consideration, but was not preliminarily selected for funding. Las Brisas is an applicant requesting an allocation of $2,635,850.00 in housing tax credits. Las Brisas' application, assigned number 2019-073C, was deemed eligible for consideration and was preliminarily selected for funding. Florida Housing is a public corporation created pursuant to section 420.504, Florida Statutes, whose address is 227 North Bronough Street, Suite 5000, Tallahassee, Florida 32301, and for the purposes of this proceeding, an agency of the State of Florida. Florida Housing's purpose is to promote public welfare by administering the governmental function of financing affordable housing in Florida. Pursuant to section 420.5099, Florida Housing is designated as the housing credit agency for Florida within the meaning of section 42(h)(7)(A) of the Internal Revenue Code and has the responsibility and authority to establish procedures for allocating and distributing low income housing tax credits. The low income housing tax credit program (commonly referred to as "housing tax credits") was enacted to incentivize the private market to invest in affordable rental housing. These housing tax credits are awarded competitively to housing developers in Florida for rental housing projects that qualify. These credits are then normally sold by developers for cash to raise capital for their projects. The effect is that the credits reduce the amount that the developer would otherwise have to borrow. Because the total debt is lower, a housing tax credit property can (and must) offer lower, more affordable rents. Developers also covenant to keep rents at affordable levels for periods of 30 to 50 years as consideration for receipt of the housing tax credits. The demand for housing tax credits provided by the federal government exceeds the supply. The Competitive Application Process Florida Housing is authorized to allocate housing tax credits, State Apartment Incentive Loan ("SAIL") funding, and other funding by means of requests for applications or other competitive solicitation in section 420.507(48), and Florida Administrative Code Chapter 67-60, which govern the competitive solicitation process for several different programs, including the program for housing tax credits. Chapter 67-60 provides that Florida Housing allocate its housing tax credits, which are made available to Florida Housing on an annual basis by the U.S. Treasury, through the bid protest provisions of section 120.57(3). In their applications, applicants request a specific dollar amount of housing tax credits to be given to the applicant each year for a period of ten years. Applicants normally sell the rights to that future stream of income housing tax credits (through the sale of almost all of the ownership interest in the applicant entity) to an investor to generate the amount of capital needed to build the development. The amount which can be received depends upon the accomplishment of several factors, such as a certain percentage of the projected Total Development Cost; a maximum funding amount per development based on the county in which the development will be located; and whether the development is located within certain designated areas of some counties. This, however, is not an exhaustive list of the factors considered. The RFA was issued on September 6, 2018, and responses were initially due October 25, 2018. The RFA was modified on September 25, 2018, October 4, 2018, and October 18, 2018. The application deadline was extended to November 9, 2018. No challenges were made to the terms of the RFA. Through the RFA, Florida Housing seeks to award up to an estimated $6,881,821.00 of housing tax credits to applicants that propose developments located in Miami-Dade County, Florida. Florida Housing received 67 applications in response to the RFA. A review committee was appointed to review the applications and make recommendations to Florida Housing's Board of Directors (the "Board"). The review committee found 61 applications eligible and six applications ineligible. Through the ranking and selection process outlined in the RFA, three applications were recommended for funding, including Las Brisas. To reflect its scoring decisions, the review committee developed charts listing its eligibility and funding recommendations to be presented to the Board. On February 1, 2019, the Board met and considered the recommendations of the review committee. Also, on February 1, 2019, at approximately 9:20 a.m., Ambar and all other applicants received notice that the Board had determined whether applications were eligible or ineligible for consideration for funding, and that certain eligible applicants were selected for award of housing credits, subject to satisfactory completion of the credit underwriting process. Such notice was provided by the posting of two spreadsheets on the Florida Housing website, www.floridahousing.org, one listing the "eligible" applications in the RFA and one identifying the applications which Florida Housing proposed to fund. In the February 1, 2019, posting, Florida Housing announced its intention to award funding to three applicants, including Las Brisas. Ambar and Las Brisas applied for funding to develop proposed developments in Miami-Dade County with the demographic commitment of Elderly, Non-ALF. Ambar was eligible, but not recommended for funding. Ambar timely filed a Notice of Protest and Petition for Formal Administrative Proceedings and Las Brisas timely intervened. THE RFA Ranking and Selection Process The RFA contemplates a structure in which the applicant is scored on eligibility items and obtains points for other items. A list of the eligibility items is available in section 5.A.1, beginning on page 65 of the RFA. Only applications that meet all the eligibility items will be eligible for funding and considered for funding selection. The eligibility items also include Submission Requirements, Financial Arrearage Requirements, and the Total Development Cost Per Unit Limitation requirement. Applicants can earn points for each of the following items (for a total of 15 points): Submission of Principals Disclosure Form stamped by the Corporation as "Pre-Approved" (5 points), Development Experience Withdrawal Disincentive (5 points), and Local Government Contribution Points (5 points). All 67 applications for the RFA were received, processed, deemed eligible or ineligible, scored, and ranked, pursuant to the terms of the RFA, Florida Administrative Code Chapters 67-48 and 67-60, and applicable federal regulations. On page 69, the RFA outlines its three goals: The Corporation has a goal to fund one (1) proposed Development that selected the Demographic Commitment of Family at question 2.a of Exhibit A and qualifies for the Geographic Areas of Opportunity/SADDA Goal as outlined in Section Four A.10. The Corporation has a goal to fund one (1) proposed Development that selected the Demographic Commitment of Elderly (ALF or Non-ALF) at question 2.a. of Exhibit A. ["Elderly Demographic Goal"]. The Corporation has a goal to fund one (1) proposed Development wherein the Applicant applied and qualified as a Non- Profit Applicant. *Note: During the Funding Selection Process outlined below, Developments selected for these goals will only count toward one goal. For example, if a Development is selected for the Elderly Demographic goal but also qualifies for the Non-Profit goal, the Development will only count towards the Elderly Demographic goal and another Development will be considered for the Non- Profit goal. As part of the funding selection process, the RFA starts with the application sorting order. The highest scoring applications are determined by first sorting together all eligible applications from the highest score to lowest score, with any scores that are tied separated as follows: First, by the Application's eligibility for the Proximity Funding Preference (which is outlined in Section Four A.5.e. of the RFA) with Applications that qualify for the preference listed above Applications that do not qualify for the preference; Next, by the Application's eligibility for the Per Unit Construction Funding Preference which is outlined in Section Four A.11.e. of the RFA (with Applications that qualify for the preference listed above Applications that do not qualify for the preference); Next, by the Application's eligibility for the Development Category Funding Preference which is outlined in Section Four A.4(b)(4) of the RFA (with Applications that qualify for the preference listed above Applications that do not qualify for the preference); Next, by the Application's Leveraging Classification, applying the multipliers outlined in item 3 of Exhibit C of the RFA (with Applications having the Classification of A listed above Applications having the Classification of B); Next, by the Application's eligibility for the Florida Job Creation Funding Preference which is outlined in Item 4 of Exhibit C of the RFA (with Applications that qualify for the preference listed above Applications that do not qualify for the preference); and And finally, by lottery number, resulting in the lowest lottery number receiving preference. Beginning on page 70, the RFA outlines the funding selection process: The first Application selected for funding will be the highest ranking eligible Family Application that qualifies for the Geographic Areas of Opportunity/SADDA Goal. The next Application selected for funding will be the highest ranking eligible Application that qualifies as an Elderly (ALF or Non-ALF) Development. The next Application selected for funding will be the highest ranking Application wherein the Applicant applied and qualified as a Non Profit Applicant. If there are less than three (3) Applications selected for funding in (1), (2), and (3) above, the next Application(s) selected for funding will be the highest ranking unfunded Application(s), regardless of Demographic Category until no more than three (3) total Applications are selected for funding. If the third Application cannot be fully funded, it will be entitled to receive a Binding Commitment for the unfunded balance. If funding remains after selecting the three (3) highest ranking eligible unfunded Applications as outlined above, or if funding remains because there are not three (3) eligible Applications that can be funded as outlined above, then no further Applications will be considered for funding and any remaining funding will be distributed as approved by the Board. According to the terms of the RFA: Funding that becomes available after the Board takes action on the [Review] Committee's recommendation(s), due to an Applicant withdrawing its Application, an Applicant's declining its invitation to enter credit underwriting or the Applicant's inability to satisfy a requirement outlined in this RFA, and/or Rule Chapter 67-48, F.A.C., will be distributed as approved by the Board. Las Brisas' Application In response to the RFA, Las Brisas timely submitted its application to develop a 119-unit affordable, elderly development in Miami-Dade County. Florida Housing determined that the Las Brisas application was eligible for an award of housing tax credits and and preliminarily selected the Las Brisas application for an award of housing tax credits. Las Brisas was selected to meet the Elderly Demographic Goal. Ambar contests Florida Housing's preliminary selection of Las Brisas for an award of housing tax credits. If the Las Brisas application is either ineligible or remains eligible but loses five points, then according to the ranking and selection process in the RFA, Ambar's application will be selected for funding as the next highest ranking eligible application. Principals Disclosure Form In its challenge, Ambar argues that Las Brisas failed to correctly complete its Principals Disclosure Form by not identifying the multiple roles of its disclosed principals. Specifically, Ambar argues that Las Brisas failed to list Steve Protulis, who is disclosed as executive director, as an officer as well. Additionally, Ambar argues that Las Brisas' disclosure of Christopher M. Shelton, Morton Bahr, Edward L. Romero, Leo W. Gerard, Maria C. Cordone, and Erica Schmelzer as officers is insufficient because they were also not listed as directors. Accordingly, Ambar contends Las Brisas is not eligible or should lose five points. Significantly, Ambar does not argue that Las Brisas failed to disclose a principal. As an eligibility item, the RFA requires that applicants identify their "Principals" by completing and submitting with their applications a Principals Disclosure Form as follows: Eligibility Requirements To meet the submission requirements, the Applicant must upload the Principals of the Applicant and Developer(s) Disclosure Form (Form Rev. 08-16)("Principals Disclosure Form") with the Application and Development Cost Pro Forma, as outlined in Section Three above. The Principals Disclosure Form must identify the Principals of the Applicant and Developer(s) as of the Application Deadline and should include, for each applicable organizational structure, only the types of Principals required by Subsection 67-48.002, F.A.C. A Principals Disclosure Form should not include, for any organizational structure, any type of entity that is not specifically included in the Rule definition of Principals. The RFA states that unless otherwise defined, capitalized terms within the RFA have the meaning as set forth in Exhibit B, in chapters 67-48 and 67-60, or in applicable federal regulations. Rule 67-48.002(94) defines the term "Principal." The rule is organized first by the applicant or developer entity, then by the organizational structure of those specific entities. According to rule 67-48.002(94)(a)2., with respect to any applicant that is a limited partnership, any general partner or limited partner must be disclosed. Because the general partner of Las Brisas is a corporation, additional disclosures are required. Principals at the second disclosure level pursuant to rule 67-48.002(94)(a)2. include "any officer, director, executive director, or shareholder of the corporation." Ms. Button, Director of Multifamily Programs for Florida Housing, testified that Florida Housing defined the term principals this way so that it could know the individuals that have control and oversight over the entities themselves in order to determine whether any individuals associated with a proposed development are in arrears or indebted to Florida Housing in connection with other developments. The RFA also enabled an applicant to obtain points by participating in Florida Housing's Advance Review Process as follows: Point Item Applicants will receive 5 points if the uploaded Principal Disclosure Form was stamped "Approved" during the Advance Review Process provided (a) it is still correct as of Application Deadline, and (b) it was approved for the type of funding being requested (i.e., Housing Credits or Non- Housing Credits). The Advance Review Process for Disclosure of Applicant and Developer Principals is available on the Corporation's Website http://www.florida housing.org/programs/developers-multifamily programs/competititve/2018/2018-111 (also accessible by clicking here) and also includes samples which may assist the Applicant in completing the required Principals Disclosure Form. Note: It is the sole responsibility of the Applicant to review the Advance Review Process procedures and to submit any Principals Disclosure Form for review in a timely manner in order to meet the Application Deadline. In order to assist applicants with identifying the correct types of principals that should be identified for each entity, Florida Housing offers applicants the opportunity to have the Principals Disclosures Form reviewed by staff in the Advance Review Process. The Advance Review Process is a continuous, ongoing process that is not specific to any RFA. The RFA provides a link that directs applicants to information regarding the Advance Review Process including instructions, rule definitions, terms and conditions, sample charts and examples, the Principals Disclosure Form, and Frequently Asked Questions ("FAQ"). The RFA states that the information contained within the link "includes samples which may assist the Applicant in completing the required Principals Disclosure Form." Part of the information about the Advance Review Process that is linked in the RFA is a Principals of the Applicant and Developer(s) Disclosure Form Frequently Asked Questions document that was updated on September 4, 2018 (the "2018 FAQ"). Question 6 of the 2018 FAQ provides: Q: If a person has multiple roles within the organizational structure, must they be listed multiple times--once for each role? A: For a Corporation, if a person serves multiple roles they may be listed once with the other role(s) identified next to the name of the individual. For example, John Smith serves as both an officer and director for ABC, Inc. You may choose the option of "director" in the drop-down menu and enter "officer" after his name as follows: Smith, John (officer). A prior version of the FAQ was updated on November 10, 2016 (the "2016 FAQ") and was replaced by the 2018 FAQ. The 2016 FAQ was not linked within the RFA. Question 8 of the 2016 FAQ provided: Q: If a person has multiple roles within the organizational structure, must they be listed multiple times--once for each role? A: Yes. Ms. Button persuasively and credibly testified that the purpose of the frequently asked questions is to help applicants understand what information Florida Housing is seeking from the applicants, and that the update to the 2016 FAQ was made because requesting applicants to list multiple roles of its principals did not further Florida Housing's goals. Thus, the intent of Question 6 of the 2018 FAQ and Florida Housing's answer was to communicate to applicants that they may, but were not required to, list the multiple roles of a principal of a corporation. Ms. Button persuasively and credibly testified that Florida Housing intentionally changed its position in Question 6 of the 2018 FAQ from the "hard-and-fast requirement" of Question 6 of the 2016 FAQ. The 2018 FAQ was not the only resource linked within the RFA for applicants to reference when completing the Principals Disclosure Form. Also linked within the RFA was the Continuous Advance Review Process for Disclosure of Applicant and Developer Principals, which includes disclosure instructions, rule definitions, and sample charts and examples. These resources included guidance and examples of Principals Disclosure Forms where principals, who held multiple roles, were listed twice. However, both of these resources pre-date the 2018 FAQ, which was last updated September 4, 2018, approximately two months before the applications in response to the RFA were due. At hearing, Ms. Button acknowledged the discrepancy between the instructions and guidance to the Principals Disclosure Form and the 2018 FAQ. Ms. Button explained that when the FAQ was updated in 2018, the other documents were not updated to reflect Florida Housing's change of position. Ms. Button persuasively and credibly testified that Florida Housing considers the most updated guidance to control, and where there is a conflict with Florida Housing's guidance, the least restrictive guidance controls. Las Brisas participated in the Advance Review Process, and on or about October 17, 2018, Florida Housing approved the Principals Disclosure Form submitted by Las Brisas during the Advance Review Process for an award of housing credits. Florida Housing, by approving the Las Brisas Principals Disclosure Form, relied on the information provided, and concluded that Las Brisas identified the appropriate type of principals for an award of housing tax credits and the appropriate type of principals for the corresponding type of entities as provided in rule 67-48.002(94). Florida Housing's approval of Las Brisas' Principals Disclosure Form during the Advance Review Process did not verify the accuracy of the information contained within the Principals Disclosure Form, but rather, verified that the appropriate type entities were disclosed for the organizational structures listed. The Principals Disclosure Form submitted with Las Brisas' application was the same document in all respects that was approved by Florida Housing during the Advance Review Process. Las Brisas' Principals Disclosure Form for the applicant lists Las Brisas Trace, LP, as the applicant entity that is a limited partnership. EHDOC Las Brisas Trace Charitable Corporation is listed as the general partner of the applicant at the first principal disclosure level. Las Brisas also lists two limited partners at the first disclosure level that are not at issue in this proceeding. At the second principal disclosure level for principals of the applicant, EHDOC Las Brisas Charitable Corporation identified 18 natural persons as principals. Steve Protulis is listed as the executive director. Christopher M. Shelton, Morton Bahr, Edward L. Romero, Leo W. Gerard, Maria C. Cordone, and Erica Schmelzer are identified as officers. Mary Anderson, Maxine Carter, Eric Dean, Ellen Feingold, Tony Fransetta, Robert Martinez, Lou Moret, John Olsen, Cecil Roberts, Roger Smith, and Thomas P. Villanova are identified as directors. Because Las Brisas applied as a non-profit, it had to include additional information with its application that other applicants did not. This information was included in Attachment 3 to Las Brisas' application. Among the information included was a list of the names and addresses of the members of the governing board of the non-profit entity. This list of names and addresses of the governing board of the non-profit entity, EHDOC Las Brisas Trace Charitable Corporation, shows that Steve Protulis, Christopher M. Shelton, Morton Bahr, Edward L. Romero, Leo W. Gerard, Maria C. Cordone, and Erica Schmelzer are also directors. Thus, within the four corners of the application, Florida Housing could determine with whom it was doing business and what roles those individuals held. Ms. Button persuasively and credibly testified that Las Brisas' Principals Disclosure Form did not contain any errors and was complete. As further testified to by Ms. Button, even if Las Brisas' failure to list the multiple roles of its disclosed principals on the Principals Disclosure Form is an error, it is so minor as to constitute a waivable, minor irregularity because Florida Housing has the required information in the application, and there was no competitive advantage to Las Brisas. Public Housing Authority Question Question 10 of Exhibit A to the RFA states the following ("the Public Housing Authority Question"): f. Public Housing Authority as a Principal of the Applicant Entity Is a Principal of the Applicant Entity a Public Housing Authority and/or an instrumentality of a Public Housing Authority? Choose an item. If the Principal of the Applicant Entity is an instrumentality of a Public Housing Authority, state the name of the Public Housing Authority: Click here to enter text. In its application, Las Brisas did not provide an answer to the Public Housing Authority Question. The Public Housing Authority Question is not an eligibility item of the RFA. The purpose of the Public Housing Authority Question is to cross-reference if applicants are requesting an add-on bonus ("boost") to the Total Development Cost limit that is available to public housing authorities or instrumentalities of public housing authorities. Las Brisas clearly indicated in the Development Cost Pro Forma, which was part of its application, that it was not seeking the boost. Although Las Brisas did not answer the Public Housing Authority Question, it did not request a boost to the Total Development Cost Per Unit Limitation for being a public housing authority or an instrumentality of a public housing authority. Accordingly, the Public Housing Authority Question was simply not applicable to Las Brisas' application. Las Brisas' failure to answer the Public Housing Authority Question did not result in the omission of any material information or create any competitive advantage. The persuasive and credible testimony of Ms. Button demonstrates that Las Brisas' failure to answer the Public Housing Authority Question is a waivable, minor irregularity.
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 protest of Ambar Riverview, Ltd., and award housing tax credits to Las Brisas Trace, LP. DONE AND ENTERED this 21st day of May, 2019, in Tallahassee, Leon County, Florida. 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 Filed with the Clerk of the Division of Administrative Hearings this 21st day of May, 2019. COPIES FURNISHED: 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 1725 Capital Circle Northeast, Suite 304 Tallahassee, Florida 32308 (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 Jorden Burt, P.A. 215 South Monroe Street, Suite 500 Post Office Drawer 190 Tallahassee, Florida 32302-0190 (eServed) Michael George Maida, Esquire Michael G. Maida, P.A. 1709 Hermitage Boulevard, Suite 201 Tallahassee, Florida 32308 (eServed) Craig D. Varn, Esquire Manson Bolves Donaldson Varn 106 East College Avenue, Suite 820 Tallahassee, Florida 32301 (eServed) Kristen Bond, Esquire Parker Hudson Rainer & Dobbs, LLP 215 South Monroe Street, Suite 750 Tallahassee, Florida 32301 (eServed) Seann M. Frazier, Esquire Parker Hudson Rainer & Dobbs, LLP 215 South Monroe Street, Suite 750 Tallahassee, Florida 32301 (eServed) Marc Ito, Esquire Parker Hudson Rainer & Dobbs, LLP 215 South Monroe Street, Suite 750 Tallahassee, Florida 32301 (eServed) Betty Zachem, Esquire Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301 (eServed) Hugh R. Brown, General Counsel Florida Housing Finance Company 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1329 (eServed) Corporation Clerk Florida Housing Finance Company 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1329 (eServed)
The Issue Whether Respondent, Florida Housing Finance Corporation’s (“Florida Housing”), intended action to award housing credit funding to Marquis Partners, Ltd. (“Marquis Partners”), based on the Request for Applications 2017-113 Housing Credit Financing for Affordable Housing Developments Located in Broward, Duval, Hillsborough, Orange, Palm Beach, and Pinellas Counties (the “RFA”) is contrary to governing statutes, Florida Housing rules, or the RFA specifications; and, if so, whether the award is contrary to competition, clearly erroneous, or arbitrary and capricious.
Findings Of Fact Based on the stipulated findings of fact, the oral and documentary evidence presented at hearing, and the entire record in this proceeding, the Findings of Fact are as follows: Parties 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. HTG Village and Marquis Partners submitted applications for funding from Florida Housing to develop affordable housing developments. Both applications were deemed “eligible” for funding. Marquis Partners was preliminarily selected for funding under the RFA. While HTG Village was determined to be eligible for funding, it was not selected for an award of funding. The “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 that 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. Competitive Application Process Florida Housing is authorized to allocate tax credits, SAIL funding, and other funding by means of requests for proposal or other competitive solicitation in section 420.507(48), and adopted Florida Administrative Code Chapter 67-60, which govern the competitive solicitation process for several different programs, including the program for tax credits. Chapter 67-60 provides that Florida Housing handles disputes regarding the allocation of 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). 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 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 entity) to an investor to generate the amount of capital needed to build the development. The amount, which can be received, depends upon the accomplishment of several factors, such as a certain percentage of the projected Total Development Cost; a maximum funding amount per development based on the county in which the development will be located; and whether the development is located within certain designated areas of some counties. This, however, is not an exhaustive list of the factors considered. 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). At issue here is RFA 2017-113: Housing Credit Financing for Affordable Housing Developments Located in Broward, Duval, Hillsborough, Orange, Palm Beach, and Pinellas Counties. The RFA was issued on October 6, 2017, and responses were due December 28, 2017. The RFA was modified on November 1 and November 29, 2017. Through the RFA, Florida Housing seeks to award up to an estimated $14,601,863.00 of housing credits to applicants that propose developments in Broward, Duval, Hillsborough, Orange, Palm Beach, and Pinellas Counties. Florida Housing received 33 applications in response to RFA 2017-113. 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 25 applications eligible and eight applications ineligible. Through the ranking and selection process outlined in the RFA, seven applications were recommended for funding, including Marquis Partners. On March 16, 2018, Florida Housing’s Board met and considered the recommendations of the review committee for RFA 2017-113. Later, on March 16, 2018, at approximately 1:05 p.m., Petitioners and all other applicants in RFA 2017-113 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 tax 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, one listing the "eligible" applications in RFA 2017-113 and one identifying the applications which Florida Housing proposed to fund. In that March 16, 2018, posting, Florida Housing announced its intention to award funding to seven applicants, including Marquis Partners. HTG Village was eligible, but not recommended for funding. All of the parties in this case applied for funding to develop a proposed development in Broward County. According to the terms of the RFA, a maximum of two Broward County applications are to be funded. Sailboat Bend was the other application, in addition to that of Marquis Partners that was selected for funding in Broward County. Once Marquis Partners dismissed its petition in DOAH Case No. 18-2157BID, there were no remaining challenges to Sailboat Bend. Petitioner timely filed a Notice of Protest and Petition for Formal Administrative Proceedings. Marquis Partners timely intervened. No challenges were made to the terms of RFA 2017-113. RFA 2017-113 Ranking and Selection Process The RFA contemplates a structure in which the applicant is scored on eligibility items and obtains points for other items. A list of the eligibility items is available in section 5.A.1, beginning on page 63 of the RFA. Only applications that meet all the eligibility items will be eligible for funding and considered for funding selection. The eligibility items also include Submission Requirements, Financial Arrearage Requirements, and the Total Development Cost Per Unit Limitation requirement. Applicants can earn points for each of the following items (for a maximum of 20): Submission of Principal Disclosure Form stamped by Corporation as “Pre-Approved” (maximum 5 points); Development Experience Withdrawal Disincentive (maximum 5 points); and either Local Government Contribution Points (maximum 5 points) or Local Government Area of Opportunity Points (10 points). The RFA’s stated goal is to fund one application wherein the applicant applied and qualified as a non-profit applicant. As part of the funding selection process, the RFA starts with the application sorting order. All eligible applications are ranked by first sorting all eligible Applications from the highest score to lowest score, with any scores that are tied separated in the following order: First, by the Application’s eligibility for the Proximity Funding Preference (which is outlined in Section Four A.5.e. of the RFA) with Applications that qualify for the preference listed above Applications that do not qualify for the preference; Next, by the Application’s eligibility for the Per Unit Construction Funding Preference which is outlined in Section Four A.11.e. of the RFA (with Applications that qualify for the preference listed above Applications that do not qualify for the preference); Next, by the Application’s eligibility for the Development Category Funding Preference which is outlined in Section Four A.4.b.(4) of the RFA (with Applications that qualify for the preference listed above Applications that do not qualify for the preference); Next, by the Application’s Leveraging Classification, applying the multipliers outlined in Item 3 of Exhibit C of the RFA (with Applications having the Classification of A listed above Applications having the Classification of B); Next, by the Application’s eligibility for the Florida Job Creation Funding Preference which is outlined in Item 4 of Exhibit C of the RFA (with Applications that qualify for the preference listed above Applications that do not qualify for the preference); and And finally, by lottery number, resulting in the lowest lottery number receiving preference. The RFA also outlines the funding selection process as follows: The highest ranking eligible Application will be selected for funding for proposed Developments located in each of the following counties for which an eligible Application was received: Broward, Duval, Hillsborough, Orange, Palm Beach, and Pinellas. If funding remains after funding the highest ranking eligible Applications as outlined in a. above, and if none of the Applications selected for funding in a. above qualify for the Non-Profit goal, the next Application selected for funding will be the highest ranking eligible unfunded Application wherein the Applicant applied and qualified as a Non-Profit Applicant, regardless of county. If the selected Application cannot be fully funded, it will be entitled to receive a Binding Commitment for the unfunded balance. If funding remains after funding the highest ranking eligible Applications as outlined in a. above and at least one (1) of the selected Applications qualified for the Non-Profit goal, the next Application selected for funding will be the highest ranking eligible unfunded Application in Broward County. If the selected Application cannot be fully funded, it will be entitled to receive a Binding Commitment for the unfunded balance. If funding remains after selecting the highest ranking eligible unfunded Broward County Application, or if there is no eligible unfunded Application located in Broward County, no additional Applications from any county will be selected for funding and any remaining funding will be distributed as approved by the Board. HTG Village Standing One of the eligibility requirements in the RFA is that applicants are required to demonstrate site control by providing certain documentation as Exhibit 8 to the application. The RFA provides three ways to demonstrate site control: 1) eligible contract, 2) deed or certificate of title, or 3) lease. In order to demonstrate site control as an eligible contract, the following must be demonstrated: Eligible Contract - For purposes of this RFA, an eligible contract is one that has a term that does not expire before June 30, 2018 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 June 30, 2018; specifically states that the buyer’s remedy for default on the part of the seller includes or is specific performance; and the buyer MUST be the Applicant unless an assignment of the eligible contract which assigns all of the buyer's rights, title and interests in the eligible contract to the Applicant, is provided. Any assignment must be signed by the assignor and the assignee. If the owner of the subject property is not a party to the eligible contract, all documents evidencing intermediate contracts, agreements, assignments, options, or conveyances of any kind between or among the owner, the Applicant, or other parties, must be provided, and, if a contract, must contain the following elements of an eligible contract: a) have a term that does not expire before June 30, 2018 or contain 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 June 30, 2018, and b) specifically state that the buyer’s remedy for default on the part of the seller includes or is specific performance. In response to RFA 2017-113, HTG Village timely submitted application number 2018-303C (“HTG Village Application”) requesting an allocation of $2,561,000 in housing credits. HTG Village proposed to develop a 96-unit affordable, multifamily housing development in Broward County. The address of the development site provided within the application of HTG Village is “N Andrews Ave and NE 6th St., Fort Lauderdale.” (“HTG Village Development Site”). HTG Village had a contractual right to purchase the HTG Village Development Site as of the application deadline and satisfied the site control requirement of RFA 2017-113 as of the application deadline. HTG Village terminated its contract to purchase the HTG Village Development Site in a letter dated January 16, 2018, and delivered on January 17, 2018. HTG Village entered a First Amendment and Reinstatement to the original Purchase and Sale Agreement on May 8, 2018 (“Amended Purchase and Sale Agreement”), with a retroactive effective date of January 17, 2018. Although HTG Village terminated its purchase agreement after the application deadline, Ms. Button credibly testified that the determination of whether the applicant is ready to proceed with the development is at the time of the application deadline (through submission of the completed application) and again at the time of underwriting. Of the applicants that submitted applications in response to the RFA, four applicants submitted applications for development in Broward County. Two applicants received a score of 20 points, Sailbooat Bend and Marquis Partners. Of the two applicants that received 20 points, Marquis Partners was assigned a lottery number of nine. HTG Village and another applicant, Casa St. Angelo, received scores of 15 points. HTG Village was assigned a lottery number 1. In the solicitation process, if Marquis Partners is deemed ineligible, HTG Village would be the next highest-ranked application for funding for development in Broward. If Marquis Partners remains eligible, but its score is reduced to 15, HTG Village would replace Marquis Partners in the line for funding because HTG Village has the lowest lottery number (1). Marquis Partners Application In response to RFA 2017-113, Marquis Partners timely submitted application number 2018-279C (“Marquis Partners Application”) requesting an allocation of $1,727,000 in housing credits. Marquis Partners proposed to develop a 100-unit affordable, multifamily housing development in Broward County. Florida Housing determined that the Marquis Partners Application was eligible for an award of housing credits and preliminarily selected the Marquis Partners Application for an award of housing credits. The Marquis Partners Application was selected as the second Broward County application under subpart (c) of the funding selection process. As another eligibility item, RFA 2017-113 required that applicants identify their “Principals” by completing and submitting with their applications a Principal Disclosure Form as follows: Eligibility Requirements to meet the submission requirements, the Applicant must upload the Principals of the Applicant and Developer(s) Disclosure Form (Form Rev. 08- 16) (“Principals Disclosure Form”) with the Application and Development Cost Pro Forma, as outlined in Section Three above. The Principals Disclosure Form must identify the Principals of the Applicant and Developer(s) as of the Application Deadline and should include, for each applicable organizational structure, only the types of Principals required by Subsection 67- 48.002(93), F.A.C. A Principals Disclosure Form should not include, for any organizational structure, any type of entity that is not specifically included in the Rule definition of Principals. RFA 2017-113 also enabled an applicant to obtain “points” by participating in Florida Housing’s advance review process as follows: Point Item: Applicants will receive 5 points if the uploaded Principal Disclosure Form was stamped “Approved” during the Advance Review Process provided (a) it is still correct as of Application Deadline, and (b) it was approved for the type of funding being requested (i.e., Housing Credits or Non-Housing Credits). The Advance Review Process for Disclosure of Applicant and Developer Principals is available on the Corporation’s Website http://www.floridahousing.org/programs/ developers-multifamilyprograms/competitive/ 2017/2017-113 (also accessible by clicking here) and also includes samples which may assist the Applicant in completing the required Principals Disclosure Form. Note: It is the sole responsibility of the Applicant to review the Advance Review Process procedures and to submit any Principals Disclosure Form for review in a timely manner in order to meet the Application Deadline. Marquis Partners participated in the advance review process, and on or about December 21, 2017, Florida Housing approved the Principal Disclosure Form submitted by Marquis Partners for an award of housing credits. The Principal Disclosure Form approved by Florida Housing during the advance review process did not properly identify Marquis Partners’ Principals for the corresponding types of entities as provided in Florida Administrative Code Rule 67-48.002(93). Rule 67-48.002(93) defined the term “Principal” based on the applicant or developer entity, and then by the organizational structure of those specific entities. The term “Principal” was capitalized in the RFA. The RFA provided that unless otherwise defined, capitalized terms within the RFA have the meaning as set forth in Exhibit B, in chapters 67-48 and 67-60, or in applicable federal regulations. Within the disclosure form, the applicant was required to disclose the type of Principal, name of the Principal and organization structure of that Principal at each disclosure level. There were three disclosure levels provided on the disclosure form. The Principal Disclosure Form submitted with the Marquis Partners Application included errors at the second Principal disclosure level. The second Principal disclosure level required Marquis Partners to provide the type of Principal being associated with the corresponding first-level Principal entity and the name of the Principal. Marquis Partners failed to disclose one Principal at the second level as further outlined below. As of the application deadline and at all times pertinent to this case, amongst other partners, Cornerstone Marquis, LLC (“Cornerstone Marquis”), was identified as a general partner of Marquis Partners. As of the application deadline and at all times pertinent to this case, the members of Cornerstone Marquis were as follows: a) Jorge Lopez; b) Awilda Lopez; c) Mara Mades; and d) M3 Acquisitions, LLC. The members were properly disclosed at the second Principal disclosure level. As of the application deadline and at all times pertinent to this case, the managers of Cornerstone Marquis, LLC, were as follows: a) Jorge Lopez; b) Mara Mades; and c) Leon Wolfe. At the second Principal disclosure level, Awilda Lopez and M3 Acquisitions were incorrectly identified as managers of Cornerstone Marquis, LLC, when they were in fact only members. More importantly, Leon Wolfe was not identified at the second Principal disclosure level as a manager of Cornerstone Marquis. Since Leon Wolfe was a manager of Cornerstone Marquis, he should have been identified as a manager of Cornerstone Marquis, LLC, at the second Principal disclosure level. Florida Housing’s approval of Marquis Partners’ Principal Disclosure Form during the advance review process did not verify the accuracy of the information contained within the Principal Disclosure Form. The information in the Principal Disclosure Form was incorrect at the time it was submitted for approval and remained incorrect when it was submitted with the Marquis Partners’ Application. Florida Housing evaluates omissions from the Principal Disclosure Form based on whether the inclusion of the incorrect information negatively impacts other applicants. Marisa Button, director of multifamily allocation, testified that the misidentification of Awilda Lopez and M3 Acquisitions, LLC, as managers of Cornerstone Marquis is a minor irregularity. On the other hand, Florida Housing considered the failure to properly disclose Leon Wolfe as a manager of Cornerstone Marquis to be a material deviation. Leon Wolfe was disclosed on the Principal Disclosure Form at the third disclosure level as a member and manager of M3 Acquisitions, LLC. However, Mr. Wolfe was not properly disclosed at the second level of disclosure as required. The RFA required that applicants disclose Principals in the Principal Disclosure Form for each type of entity. Ms. Button testified that the purpose of proper disclosure of all Principals of the entities that are associated with the applicant is so that Florida Housing is aware of who it is doing business with. Florida Housing screens the Principals to determine whether a Principal has been deficient to the corporation on prior affordable housing deals, identify bad actors, or to limit the amount of funding received by any related applicants. Florida Housing uses the disclosed Principals to determine if applications are related. Florida Housing made the advance review process available to assist applicants with completing the Principal Disclosure Form. During the process, there were sample charts provided to assist the applicants with completing the form. Marquis Partners participated in the review process and Florida Housing approved the form. The greater weight of the evidence demonstrates that Marquis Partners did not properly disclose Mr. Wolfe on its Principal Disclosure Form and, as a result, it should not have been awarded the additional five points for the advance review approval. Moreover, the omission of Mr. Wolfe as a manager of Cornerstone Marquis is a material deviation that cannot be waived. Thus, the evidence shows that Marquis Partners is not eligible for funding.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be issued finding that Florida Housing’s initial scoring decision regarding the Marquis Partners Application was erroneous, concluding that Marquis Partners was ineligible for funding and not eligible for five additional points, and awarding funding to HTG Village. DONE AND ENTERED this 27th day of July, 2018, 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 27th day of July, 2018. COPIES FURNISHED: Hugh R. Brown, General Counsel Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301-1329 (eServed) Maureen McCarthy Daughton, Esquire Maureen McCarthy Daughton, LLC Suite 304 1725 Capital Circle Northeast Tallahassee, Florida 32308 (eServed) Michael J. Glazer, Esquire Anthony L. Bajoczky, Jr., Esquire Ausley & McMullen, P.A. 123 South Calhoun Street Post Office Box 391 Tallahassee, Florida 32302 (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)
The Issue Whether Petitioner was properly denied mortgage assistance through Florida Housing Finance Corporation's ("Florida Housing") Hardest-Hit Fund Elderly Mortgage Assistance ("ELMORE") program based on a conviction for fraud allegedly in connection with a real estate transaction.
Findings Of Fact The Parties Florida Housing is a public corporation created pursuant to section 420.504, Florida Statutes, to promote the public welfare by administering the governmental function of financing or refinancing housing. For purposes of this proceeding, Florida Housing is an agency of the State of Florida. Florida Housing is also considered the state's housing finance agency which means Florida Housing, at times, conducts business as if it were a financial institution. Florida Housing administers the Hardest-Hit Fund, using funds appropriated by the United States Congress through the Emergency Economic Stabilization Act to help stabilize housing markets and prevent foreclosures. The Hardest-Hit Fund comes directly to Florida Housing from the United States Treasury through a Housing Finance Agency ("HFA") Participation Agreement. The ELMORE program is one of the programs created under the umbrella of the Hardest-Hit Fund. The ELMORE program is designed to assist senior homeowners in Florida who are facing foreclosure due to the inability to pay property charges such as property taxes, homeowners insurance, and homeowners or condo association dues after the homeowner was paid all of the equity under a reverse mortgage. The HFA agreement is a summary guideline for the ELMORE program and its general requirements. The stated goal of the program is to help senior homeowners remain in their homes. The Summary Guidelines include certain borrower eligibility criteria, property/loan eligibility criteria, and program exclusions, among other guidelines. The program exclusions reference the "Dodd-Frank exclusion for having been convicted of a mortgage-related felony in the past ten years." The Dodd-Frank Act exclusion for criminal applicants is codified 12 U.S.C. § 5220b, and states in part: (d) Prevention of qualification for criminal applicants (1) In general No person shall be eligible to begin receiving assistance from the Making Home Affordable Program authorized under the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5201 et seq.), or any other mortgage assistance program authorized or funded by that Act, on or after 60 days after July 21, 2010, if such person, in connection with a mortgage or real estate transaction, has been convicted, within the last 10 years, of any one of the following: Felony larceny, theft, fraud, or forgery. Money laundering. Tax evasion. On or about February 27, 2017, Betty Baldwin, Power of Attorney for Tolz, submitted an application for mortgage assistance through Florida Housing's Hardest-Hit Fund for ELMORE benefits. On or about May 11, 2017, the application was denied. On or about November 8, 2018, Tolz submitted another application for mortgage assistance from the ELMORE program. On December 5, 2018, Florida Housing's Director of Homeownership Programs, David Westcott, issued a letter with an ineligibility determination to Tolz, which included a Notice of Rights.1/ Mr. Westcott is ultimately responsible for the final eligibility determinations on Hardest-Hit Fund mortgage assistance applications. The Denial of ELMORE Program Benefits Mr. Westcott denied Tolz's application for ELMORE program funds because she had, what Mr. Westcott determined to be, a disqualifying felony conviction in connection with a real estate transaction in violation of the Dodd-Frank Act provision. Mr. Westcott testified that pursuant to the HFA agreement with the United States Treasury, Florida Housing is prohibited from using ELMORE funds to assist applicants that have a disqualifying Dodd-Frank Act conviction. During the period of 2003 through 2010, Tolz used her position as a fiduciary in the role of bankruptcy trustee, receiver, and personal representative to misappropriate millions of dollars from bankruptcy estates, receiverships, and other matters, by writing or causing the writing of unauthorized checks from a variety of fiduciary accounts which contained funds she was appointed to safeguard. Tolz then used the misappropriated money for her own benefit and to conceal her previous misappropriations by restoring the balances of other fiduciary accounts from which she had previously taken funds in a Ponzi scheme framework. To conceal this theft, Tolz falsified documents and used a fictitious bank account. On or about December 12, 2011, Tolz was convicted in Broward County Circuit Court of grand theft in the first degree. Tolz was convicted on or about July 27, 2011, in the United States District Court for the Southern District of Florida of conspiracy to commit wire fraud in violation of 18 U.S.C. § 1349. To secure a plea deal and in order to bolster her claim that her sentence should be reduced from the federal guidelines, prior to sentencing, Tolz surrendered five real estate properties, which she owned, to the United States government. The value of these properties was then used to offset and lessen Tolz's restitution obligation to her victims. Tolz understood that these properties would not be accepted to satisfy her restitution obligation unless they were purchased, mortgaged, or improved with the assets of her victims. In the federal criminal case, Tolz executed a Factual Basis Supporting Change of Plea ("Factual Basis") on or about April 15, 2011. Tolz agreed not to contest the information in the Factual Basis. Further, Tolz agreed that it provided a sufficient factual basis for her plea of guilty in the case, and had the case proceeded to trial, that the United States would have proven the facts beyond a reasonable doubt. Paragraph 11 of the Factual basis states: MARIKA TOLZ, directly or indirectly, utilized funds obtained through the fraudulent scheme to purchase, maintain and improve real properties, including, but not limited to the following real properties: 2344 North Federal Highway, Hollywood, Florida; 1804 Sherman Street, Hollywood, Florida; 704 SE 3rd Avenue, Hallandale, Florida; 815 SW 30th Street, Ft. Lauderdale, Florida; and 3031 North Ocean Blvd, Apartment 403, Fort Lauderdale, Florida 33308. In making the ineligibility determination on Tolz's application for ELMORE program funds, Mr. Westcott determined that Tolz's conviction was in connection with a real estate transaction because Tolz agreed in the Factual Basis that she used funds obtained through the fraud to "purchase, maintain and improve real properties." Florida Housing determined that Tolz's conviction disqualified her from receiving mortgage assistance from the ELMORE program because: As part of the Hardest-Hit Fund, the ELMORE program funds are authorized by the Emergency Economic Stabilization Act of 2008; Tolz was convicted of the enumerated offense of a "fraud;" The conviction occurred on or about July 21, 2011, which is within the last ten years; and The conviction was in connection with a real estate transaction because Tolz used funds obtained through the fraud to "purchase, maintain and improve real properties." "In Connection With" A Mortgage or Real Estate Transaction Tolz contends that her crimes were not "in connection with a mortgage or real estate transaction." At both her sentencing hearing in federal court and at the final hearing in this proceeding, Tolz stated that she owned these surrendered properties for 30 or 40 years. Tolz now argues that because she owned these properties well before the fraud of which she was convicted occurred, no mortgage or real estate transaction was involved in the crime and, therefore, she should not be disqualified from ELMORE benefits. Tolz now claims she surrendered these properties to facilitate the forfeiture on the advice of counsel, that she was heavily medicated at the time of sentencing, and that the prosecutor and the court knew that these properties were not associated with her underlying crimes. Tolz admitted at final hearing that she surrendered these properties to do an end-run around the system to reduce the more than two million dollars she owed in restitution. However, in that same sentencing hearing, the prosecutor representing the United States stated "I'll also indicate, although it's clear from the record, that notwithstanding the picture that she's somehow a pauper, or was a pauper, the fact of the matter is the forfeiture properties indicated in the forfeiture which she agreed to were her properties, at least partially paid for by the offense."2/ An impartial reading of the sentencing transcript demonstrates that during sentencing the United States believed that the properties involved in the criminal forfeiture were, in part, paid for by the crime for which Petitioner was convicted. The undersigned finds the facts, as offered by Tolz in her 2011 "Factual Basis" offered in support of a sentence reduction and reduction of her restitution obligation, to be more credible than her denial at final hearing that these properties were not purchased, improved, or maintained with the funds from her crimes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Florida Housing enter a final order dismissing Petitioner's Amended Petition. DONE AND ENTERED this 30th day of April, 2019, 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 30th day of April, 2019.
The Issue Whether Florida Housing Finance Corporation’s (Florida Housing, Corporation, or Respondent) rejection of the funding for the application submitted by Capital Grove Limited Partnership (Capital Grove) was contrary to Florida Housing’s governing statutes, rules, policies, or the specifications of Request for Applications 2014-114 (the RFA). If so, whether Florida Housing’s decision to fund the application submitted by HTG Wellington Family, LLC (HTG Wellington), is contrary to governing statutes, rules, policies, or the RFA specifications.
Findings Of Fact Florida Housing is a public corporation created pursuant to section 420.504, Florida Statutes. Its purpose is to promote the 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 was enacted by Congress in 1986 to incentivize the private market to invest in affordable rental housing. Tax credits are competitively awarded to applicants in Florida for qualified rental housing projects. Applicants then sell these credits to investors to raise capital (or equity) for their projects, which reduces the debt that the owner would otherwise have to borrow. Because the debt is lower, a tax-credit property can offer lower, more affordable rents. Provided the property maintains compliance with the program requirements, investors receive a dollar-for-dollar credit against their federal tax liability each year over a period of ten years. The amount of the annual credit is based on the amount invested in the affordable housing. Tax credits are made available by the U.S. Treasury to the states annually. Florida Housing is authorized to allocate tax credits 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 one for tax credits. Rule 67-60.002(1) defines “Applicant” as “any person or legally-formed entity that is seeking a loan or funding from the Corporation by submitting an application or responding to a competitive solicitation pursuant to this rule chapter for one or more of the Corporation’s programs.” Applicants request in their applications a specific dollar amount of housing credits to be given to the applicant each year for a period of 10 years. Applicants typically sell the rights to that future stream of income tax credits (through the sale of almost all of the ownership interest in the Applicant entity) to an investor to generate the majority of the capital necessary to construct the Development. The amount of housing credits an Applicant may request is based on several factors, including but not limited to 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. Florida Housing’s competitive application process for the allocation of tax credits is commenced by the issuance of a Request for Applications. In this case, that document is Request for Applications 2014-114 (the RFA). The RFA was issued November 20, 2014, and responses were due January 22, 2015. Capital Grove submitted Application No. 2015-045C in RFA 2014-114 seeking $1,509,500 in annual allocation of housing credits to finance the construction of a 94-unit residential rental development in Pasco County (a Medium County), to be known as Highland Grove Senior Apartments. HTG Wellington submitted Application No. 2015-101C seeking $1,510,000 in annual allocation of housing credits to finance the construction of a 110-unit multifamily residential development in Pasco County, Florida, to be known as Park at Wellington Apartments. Florida Housing has announced its intention to award funding to nine Medium County Developments, including Park at Wellington in Pasco County (Application No. 2015-101C), but not Highland Grove Senior Apartments. Florida Housing received 82 applications seeking funding in RFA 2014-114, including 76 for Medium County Developments. The process employed by Florida Housing for this RFA makes it virtually impossible for more than one application to be selected for funding in any given medium county. Because of the amount of funding available for medium counties, the typical amount of an applicant’s housing credit request (generally $1.0 to $1.5 million), and the number of medium counties for which developments are proposed, many medium counties will not receive an award of housing credit funding in this RFA. Florida Housing intends to award funding to nine developments in nine different medium counties. The applications were received, processed, deemed eligible or ineligible, scored, and ranked, pursuant to the terms of RFA 2014-114; Florida Administrative Code chapters 67- 48 and 67-60; and applicable federal regulations. Florida Housing’s executive director appointed a Review Committee of Florida Housing staff to evaluate the applications for eligibility and scoring. Applications are considered for funding only if they are deemed “eligible,” based on whether the application complies with Florida Housing’s various content requirements. Of the 82 applications submitted to Florida Housing in RFA 2014-114, 69 were found “eligible,” and 13 were found ineligible, including Capital Grove. Florida Housing determined that Capital Grove was ineligible on the ground that its Letter of Credit was deficient under the terms of the RFA. A five-page spreadsheet created by Florida Housing, entitled “RFA 2014-114 – All Applications,” identifying all eligible and ineligible applications was provided to all Applicants. In addition to scoring, Applicants received a lottery number to be applied in tie situations, with the lower number given preference. Capital Grove received lottery number 12. HTG Wellington received lottery number 9. On March 11, 2015, the Review Committee met and considered the applications submitted in response to the RFA, and made recommendations regarding the scoring and ranking of the applications to Florida Housing’s Board of Directors (the Board). Capital Grove’s Letter of Credit The RFA provides for a Withdrawal Disincentive in which an applicant could either provide a $25,000 check or a $25,000 Letter of Credit that would be forfeited if the application was withdrawn by the applicant before a certain period of time. Applicants so withdrawing would also suffer a deduction from the full developer-experience point total in certain future Requests for Applications issued by Florida Housing. According to specifications in the RFA, any Letter of Credit submitted must be in compliance with all the requirements of subsection 4.a. of Section Three, Procedures and Provisions of the RFA, which provides in pertinent part: 4. $25,000 Letter of Credit. Each Applicant not submitting a $25,000 Application Withdrawal Cash Deposit (as outlined in 3 above) must submit to the Corporation a letter of Credit that meets the following requirements with its Application: a. The Letter of Credit must: Be issued by a bank, the deposits of which are insured by the FDIC, and which has a banking office located in the state of Florida available for presentation of the Letter of Credit. Be on the issuing bank’s letterhead, and identify the bank’s Florida office as the office for presentation of the Letter of Credit. Be, in form, content and amount, the same as the Sample Letter of Credit set out in Item 14 of Exhibit C of the RFA, and completed with the following: Issue Date of the Letter of Credit (LOC) which must be no later than January 22, 2015. LOC number. Expiration Date of the LOC which must be no earlier than January 22, 2016. Issuing Bank’s legal name. Issuing Bank’s Florida Presentation Office for Presentation of the LOC. Florida Housing’s RFA number RFA 2014- 114. Applicant’s name as it appears on the Application for which the LOC is issued. Development name as it appears on the Application for which the LOC is issued. Signature of the Issuing Bank’s authorized signatory. Printed Name and Title of the Authorized Signatory. The Sample Letter of Credit included in Exhibit C, Item 14 of the RFA reads: (Issuing Bank’s Letterhead) Irrevocable Unconditional Letter of Credit To/Beneficiary: Florida Housing Finance Corporation Issue Date: [a date that is no later than January 22, 2015] Attention: Director of Multifamily Programs 227 N. Bronough Street, Suite 5000 Tallahassee, Florida 32301 Letter of Credit No.: Expiration Date: [a date that is no earlier than January 22, 2016] Issuing Bank: Florida Presentation Office: FHFC RFA # 2014-114 Applicant: Development: Gentlemen: For the account of the Applicant, we, the Issuing Bank, hereby authorize Florida Housing Finance Corporation to draw on us at sight up to an aggregate amount of Twenty- Five Thousand and No/100 Dollars ($25,000.00). This letter of credit is irrevocable, unconditional, and nontransferable. Drafts drawn under this letter of credit must specify the letter of credit number and be presented at our Florida Presentation Office identified above not later than the Expiration Date. Any sight draft may be presented to us by electronic, reprographic, computerized or automated system, or by carbon copy, but in any event must visibly bear the word “original.” If the document is signed, the signature may consist of (or may appear to us as) an original handwritten signature, a facsimile signature or any other mechanical or electronic method of authentication. Payment against this letter of credit may be made by wire transfer of immediately available funds to the account specified by you, or by deposit of same day funds in a designated account you maintain with us. Unless we notify you in writing at least thirty (30) days prior to the Expiration Date, the Expiration Date of this letter of credit must be extended automatically for successive one-month periods. This letter of credit sets forth in full the terms of our obligations to you, and such undertaking shall not in any way be modified or amplified by any agreement in which this letter is referred to or to which this letter of credit relates, and any such reference shall not be deemed to incorporate herein by reference any agreement. We engage with you that sight drafts drawn under, and in compliance with, the terms of this letter of credit will be duly honored at the Presentation Office. We are an FDIC insured bank, and our Florida Presentation Office is located in Florida as identified above. Yours very truly, [Issuing Bank] By Print Name Print Title Despite these requirements, Capital Grove submitted an “Irrevocable Standby Letter of Credit” issued by PNC Bank National Association (PNC). Capital Grove’s Letter of Credit provides, in pertinent part: Beneficiary: Applicant: Florida Housing Finance Westbrook Housing Corp. Corp. Development, LLC 4110 Southpoint Blvd., 227 North Bronough Street Ste 206 Suite 5000 Jacksonville, Fl 32216 Tallahassee, Fl 32301 ATTENTION: DIR. OF MULTI- FBO CAPITAL GROVE FAMILY PROGRAMS LIMITED PARTNERSHIP IRREVOCABLE STANDBY LETTER OF CREDIT OUR REFERENCE: 18123166-00-00 AMOUNT: USD $25,000.00 ISSUE DATE: JANUARY 20, 2015 EXPIRY DATE: JANUARY 22, 2016 EPIRY PLACE: OUR COUNTER RE: FHFC RFA #2014-114 DEVELOPMENT: HIGHLAND GROVE SENIOR APARTMENTS GENTLEMEN: WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. 18123166-00-000 IN FAVOR OF FLORIDA HOUSING FINANCE CORPORATION FOR THE ACCOUNT OF WESTBROOK HOUSING DEVELOPMENT LLC AVAILABLE FOR PAYMENT AT OUR COUNTERS IN AN AMOUNT OF USD $25,000.00 (TWENTY FIVE THOUSAND AND 00/100 UNITED STATES DOLLARS) AGAINST BENEFICIARY'S PURPORTEDLY SIGNED STATEMENT AS FOLLOWS: "I (INSERT NAME AND TITLE) CERTIFY THAT I AM AN AUTHORIZED REPRESENTATIVE OF FLORIDA HOUSING FINANCE CORPORATION AND HEREBY DEMAND PAYMENT OF USD (INSERT AMOUNT) UNDER PNC BANK, NATIONAL ASSOCIATION LETTER OF CREDIT NO. 18123166-00-000. I FURTHER CERTIFY THAT WESTBROOK HOUSING DEVELOPMENT, LLC HAS FAILED TO COMPLY UNDER THE PROJECT NAME: HIGHLAND GROVE SENIOR APARTMENTS BETWEEN FLORIDA HOUSING FINANCE CORPORATION AND WESTBROOK HOUSING DEVELOPMENT, LLC." Ken Reecy, Director of Multifamily Programs for Florida Housing, personally reviewed all Letters of Credit submitted by RFA applicants, and reported his findings to the Review Committee. The Review Committee recommended finding Capital Grove’s application nonresponsive and ineligible for funding because Capital Grove failed to include a responsive Letter of Credit. The Review Committee also found four other applications ineligible for failing to meet the Letter of Credit requirements, all of which used PNC Bank and involved entities related to Capital Grove, including Westbrook Housing Development, LLC, appearing as Co-Developer. All such PNC Letters of Credit failed for the same reasons. Mr. Reecy and the Review Committee found that the Letters of Credit from PNC Bank (including that submitted by Capital Grove) did not meet the facial requirements of the RFA, in that the Letters of Credit were not in the name of the applicant. The General Partner of the applicant, Capital Grove Limited Partnership, is Capital Grove GP, LLC. The Co-Developer entities are JPM Development, LLC, and Westbrook Housing Development, LLC. Co-Developer Westbrook Housing Development, LLC, a Michigan Company authorized to conduct business within the State of Florida, is a different legal entity from Co-Developer JPM Development, LLC. Mr. Reecy and the Review Committee also found the PNC Letters of Credit (including that submitted by Capital Grove) nonresponsive to the specification of the RFA because the Letters included a condition requiring Florida Housing, in order to draw on the Letter of Credit, to certify that the Co- Developer (and not the applicant) had “failed to comply under the project name: Highland Grove Senior Apartments.” However, under the RFA specifications, the action that is the basis for the presentment of the Letter of Credit is a withdrawal of the application by the applicant, not the developer. Only an applicant may withdraw an application. If the Letter of Credit cannot be drawn upon, the RFA provides that the applicant, “shall be responsible for the payment of the $25,000 to the Corporation; payment shall be due from the applicant to the Corporation within 10 calendar days following written notice from the Corporation.” Applicant Capital Grove is a single-purpose entity that has no assets. In order to collect on the Letter of Credit submitted by Capital Grove, Florida Housing would have to submit a different certification than that called for under the RFA sample letter of credit. According to Kathleen Spiers, Vice President of PNC Bank, to draw down the Letter of Credit, Florida Housing would have to copy the statement outlined in paragraph 2 of the Capital Grove Letter of Credit, sign it, and submit it to PNC to draw upon the letter of credit. At the final hearing, Mr. Reecy testified, “I am not prepared to certify to something that isn’t true. I am not going to certify that the developer didn’t comply by the Applicant withdrawing.” All other Letters of Credit submitted by applicants under this RFA were accepted as responsive. HTG Wellington’s Unit Count HTG Wellington indicated in its application to Florida Housing that its proposed Park at Wellington Development would be 110 multifamily units. In its application for Local Government Support, HTG Wellington described the Development as a 120-unit, multifamily development in five three-story buildings. The RFA requires a minimum $50,000 Local Government Contribution in Pasco County for an applicant to receive the maximum of five points. In order to obtain a Local Government Contribution, tax credit developers must submit an application to Pasco County at least six weeks before the matter is presented to the Board of County Commissioners for approval. Pasco County, in turn, has their underwriter, Neighborhood Lending Partners ("NLP"), organize the applications and create an underwriting package. NLP does not make a recommendation to the Board of County Commissioners for funding. Rather, NLP alerts Pasco County if there is a red flag concerning the Development and scores the applications based upon financial stability of the organization, financing of the project, and the development pro forma. HTG Wellington submitted an application for Local Government Contribution to Pasco County in November 2014. The application contemplated a 120-unit development. Impact fees schedules are adopted by the Pasco County Board of Commissioners. Pasco County has established an impact fee rate for affordable and non-affordable development and the difference between the two is multiplied by the number of units to determine the impact fee amount. The impact fee waiver amount approved for Park at Wellington Apartments was $219,600. This amount was calculated based upon 120 units contemplated in November 2014, multiplied by $1830.00, which is the difference between the normal impact fee rate, minus the rate for affordable housing development. The $219,600 figure was used in HTG Wellington’s application. At 110 units (as opposed to 120 units), the total Local Government Contribution available to HTG Wellington is $201,300. Either amount ($219,600 or $201,300) meets the minimum for HTG Wellington to receive five points for its Local Government Contribution. The change in the contribution amount would have no effect on the scoring of the HTG Wellington application. Pasco County’s Manager of Community Development and Officer of Community Development, George Romagnoli, testified that for approximately 15 years, Pasco County has employed a strategy to approve all applications for Local Government Contribution and then let Florida Housing choose which Development will receive tax credits. Pasco County is not concerned about the ultimate accuracy of the number of units submitted for a Contribution –- as stated by Mr. Romagnoli: "We funded 84, 120, whatever. It's really not material to the approval one way or the other." Although Florida Housing approved HTG Wellington’s application before discovering the discrepancy, had Florida Housing discovered the discrepancy in the number of units during the scoring process, the discrepancy would have been deemed a minor irregularity unless the discrepancy resulted in a change in scoring or otherwise rendered the application nonresponsive as to some material requirement and the discrepancy would generally be handled with a simple adjustment to the amount presented on the application Pro Forma, if necessary. Additionally, changes to the number of units in a development may be increased (but not decreased) under certain circumstances during the credit underwriting process which follows the competitive solicitation process. The discrepancy in the number of units does not provide any competitive advantage to HTG Wellington. The discrepancy in the number of units does not provide a benefit to HTG Wellington not enjoyed by others. Florida Housing’s waiver of the discrepancy in the number of units does not adversely impact the interests of the public. HTG Wellington’s Bus Stop The RFA allows an applicant to obtain 18 proximity points, including six points for a Public Bus Transfer Stop. Florida Housing awarded HTG Wellington 4.5 proximity points for its purported Public Bus Transfer Stop. The RFA defines a Public Bus Transfer Stop as: This service may be selected by all Applicants, regardless of the Demographic Commitment selected at question 2 of Exhibit For purposes of proximity points, a Public Bus Transfer Stop means fixed location at which passengers may access at least three routes of public transportation via buses. Each qualifying route must have a scheduled stop at the Public Bus Transfer Stop at least hourly during the times of 7 am to 9 am and also during the times of 4 pm to 6 pm Monday through Friday, excluding holidays on a year-round basis. This would include both bus stations (i.e. hub) and bus stop with multiple routes. Bus routes must be established or approved by a Local Government department that manages public transportation. Buses that travel between states will not be considered. In response to this requirement HTG Wellington submitted a Surveyor Certification Form which lists coordinates submitted to qualify for a Public Bus Transfer Stop. The site identified by HTG Wellington as a Public Bus Transfer Stop, however, is not a fixed location where passengers may access at least three routes of public transportation. While another bus stop which serves an additional two routes is within 700 feet, stops cannot be combined for purposes of the RFA. Therefore, the site designated as a Public Bus Transfer Stop by HTG Wellington is not a “fixed location” for purposes of the RFA and HTG Wellington is not entitled to obtain proximity points for a Public Bus Transfer Stop. Not including the 4.5 proximity points for a Public Bus Transfer Stop, HTG was awarded 11.5 total proximity points for selected Community Services. The required minimum total of proximity points for developments located in a medium county that must be achieved in order to be eligible to receive the maximum amount of 18 points as set forth in the RFA is 9. HTG had more than the required minimum total of proximity points to receive the maximum award of 18 proximity points based on its Community Services score alone. The disqualification of HTG’s submitted Public Bus Transfer Stop would have no effect on the scoring or ranking of the HTG Wellington application, nor affect its ranking relative to any other application, nor affect the ultimate funding selection. The RFA requires each applicant to read and sign at Attachment A, an Applicant Certification and Acknowledgement Form (the Form). The signing of the Form is mandatory. Page 5, Paragraph 8 of the Form provides: In eliciting information from third parties required by and/or included in this Application, the Applicant has provided such parties information that accurately describes the Development as proposed in this Application. The Applicant has reviewed the third party information included in this Application and/or provided during the credit underwriting process and the information provided by any such party is based upon, and accurate with respect to, the Development as proposed in this Application. Even though there was a discrepancy in the unit numbers submitted to Pasco County for a Local Government Contribution and its application submitted in response to the RFA, HTG signed the Form. No evidence was submitted indicating that HTG signed the Form with knowledge of the discrepancy.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Florida Housing Finance Corporation enter a final order: Rejecting Capital Grove’s application as nonresponsive and denying the relief requested in its Petition; Concluding that Capital Grove lacks standing to bring allegations against HTG Wellington; and, Upholding Florida Housing’s scoring and ranking of the HTG Wellington application. DONE AND ENTERED this 3rd day of August, 2015, in Tallahassee, Leon County, Florida. S JAMES H. PETERSON, III Administrative Law Judge Division of Administrative Hearings The Desoto Building 1230 Apalachee Parkway Tallahassee, Florida32399-3060 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of August, 2015.
The Issue At issue in this proceeding is whether the decision of the Florida Housing Finance Corporation (“Florida Housing”) to award State Apartment Incentive Loan (“SAIL”) funding to Intervenor, La Joya Estates, Ltd. (“La Joya”), pursuant to Request for Applications 2015-112 (the “RFA”) was contrary to the agency’s governing statutes, rules, policies, or the RFA specifications.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing, and the entire record in this proceeding, the following Findings of Fact are made: Douglas Gardens is a Florida limited partnership based in Coconut Grove, Florida, that is in the business of providing affordable housing. Florida Housing is a public corporation organized pursuant to chapter 420, Part V, Florida Statutes. For the purposes of this proceeding, Florida Housing is an agency of the State of Florida. Florida Housing has the responsibility and authority to establish procedures for allocating and distributing various types of funding for affordable housing. One of the programs administered by Florida Housing is the SAIL program, created in section 420.5087, Florida Statutes. Florida Housing has adopted Chapter 67-60, Florida Administrative Code, which governs the competitive solicitation process for several programs, including the SAIL program. Other administrative rule chapters relevant to the selection process are chapter 67-48, F.A.C., which governs competitive affordable multifamily rental housing programs; chapter 67-21, Florida Administrative Code, which governs multifamily mortgage revenue bonds ("MMRB") and non-competitive housing credits; and chapter 67-53, Florida Administrative Code, governing compliance procedures. Applicants for funding, pursuant to the RFA, are required to comply with provisions of the RFA and the applicable rule chapters. La Joya is a Florida limited partnership based in Miami, Florida, and is also in the business of providing affordable housing. On October 9, 2015, Florida Housing issued the RFA, seeking applications from developers proposing to construct multifamily housing for families and for the elderly. The RFA outlined a process for the selection of developments to share the estimated $49 million in funding for eligible applicants. Among the stated goals of the RFA is to fund one new construction development serving the elderly in a large county, with priority given to the highest ranked eligible new construction application for the elderly that is located in Miami-Dade County. The RFA provides that if there are no eligible Miami-Dade County applications that qualify, then the highest ranking eligible new construction development serving the elderly in Broward County will be selected. A total of 23 applications were filed in response to the RFA. On November 9, 2015, Douglas Gardens timely submitted its Application, numbered 2016-177BS, seeking $5,781,900 in SAIL funding to assist in the development of a proposed new construction development for the elderly in Broward County. Douglas Gardens’ was the only “new construction” application submitted for Broward County. Also on November 9, 2015, La Joya timely filed its Application, numbered 2016-178S, seeking $5,778,100 in SAIL funding to assist in the development of a proposed new construction development for the elderly in Miami- Dade County. La Joya’s was the only application submitted for Miami-Dade County in any development category. The executive director of Florida Housing selected a review committee to review and score the applications. The review committee issued a recommendation of preliminary rankings and allocations. Florida Housing’s Board of Directors approved these recommendations on December 11, 2015. The Board of Directors found both La Joya and Douglas Gardens eligible for funding, but awarded funding to La Joya on the basis that it was the highest ranked, eligible, elderly, new construction application located in Miami-Dade County. On December 16, 2015, Douglas Gardens timely filed a notice of intent to protest. On December 28, 2015, Douglas Gardens timely submitted a Formal Written Protest and Petition for Administrative Hearing. The RFA awarded up to 18 “proximity points” to an applicant based on its project’s location in relation to transit and community services such as grocery stores, medical facilities, and pharmacies. The RFA required each applicant to submit a “Surveyor Certification” form, which included longitude and latitude coordinates corresponding to the location of the proposed development site and the site’s proximity to listed services that would presumably serve the proposed development. Each applicant was required to retain a Florida licensed surveyor to prepare and submit the Surveyor Certification form and to sign the form attesting, under penalty of perjury, that the information on the form is true and correct. In the bottom left hand corner of each page of the form is a blank line on which the applicant or surveyor was to indicate the RFA number for which the form was being submitted. Beneath the blank line is a parenthetical indicating the identification number of the form, e.g., (Form Rev. 07-15). Section Four A.6.a.(1) of the RFA provided the following regarding the Surveyor Certification form: In order to meet the Mandatory requirement and be eligible for proximity points, all Applicants must provide an acceptable Surveyor Certification form, (Form Rev. 07- 15), as Attachment 14 to Exhibit A, reflecting the information outlined below. The Surveyor Certification form (Form Rev. 07-15) is provided in Exhibit B of this RFA and on the Corporation’s website Note: The Applicant may include the Florida Housing Surveyor Certification form that was included in a previous RFA submission for the same proposed Development, provided (i) the form used for this RFA is labeled Form Rev. 07-15, (ii) other than the RFA reference number on the form, none of the information entered on the form and certified to by the signatory has changed in any way, and (iii) the requirements outlined in this RFA are met. The previous RFA number should be crossed through and RFA 2015-112 inserted. If the Applicant provides any prior version of the Surveyor Certification form, the form will not be considered. (Emphasis added). Section Three C.1. of the RFA provided that Florida Housing reserved the right to waive “Minor Irregularities” in the applications. Florida Administrative Code Rule 67-002(6) defines “Minor Irregularity” as variation in a term or condition of an Application pursuant to this rule chapter that does not provide a competitive advantage or benefit not enjoyed by other Applicants, and does not adversely impact the interests of the Corporation or the public. Florida Administrative Code Rule 67-60.008 titled “Right to Waive Minor Irregularities,” provides as follows: The Corporation may waive Minor Irregularities in an otherwise valid Application. Mistakes clearly evident to the Corporation on the face of the Application, such as computation and typographical errors, may be corrected by the Corporation; however, the Corporation shall have no duty or obligation to correct any such mistake. La Joya submitted a Surveyor Certification form as Attachment 14 of its Application. The identification number in the parenthetical in the bottom left hand corner was “(Form Rev. 10-14)” rather than the specified “(Form Rev. 07-15).” Form Rev. 10-14 was the Surveyor Certification form used for 2014 applications. The only difference between Form Rev. 10-14 and Form Rev. 07-15 is that the latter contains a revised list of location coordinates for several Sun Rail stations in the Orlando area. This difference was of no matter to the RFA under discussion. For the substantive purposes of this RFA, the forms were identical. If La Joya’s Surveyor Certification form had not been considered and not scored, La Joya would have been ineligible for funding and Douglas Gardens would have been selected as the applicant meeting Florida Housing’s goal of funding one new construction development for elderly residents in a large county. Heather Boyd, multifamily loan manager for Florida Housing, sat on the review committee and was assigned to score the proximity portion of the applications. Based on the distances provided in the Surveyor Certification form, Ms. Boyd awarded La Joya a total of 11.5 proximity points as follows: 5.5 points for proximity for Public School Bus Rapid Transit Stop, 3 points for proximity to a Grocery Store, and 3 points for proximity to a Medical Facility. (La Joya also included coordinates for a Public School, but the proposed elderly development was not eligible for Public School proximity points.) To be considered eligible for funding, an applicant needed to receive at least 10.25 proximity points, including at a minimum 2 points for Transit Services. No issue was raised as to the accuracy of the information submitted by La Joya or of Ms. Boyd’s calculation. If it was permissible to consider La Joya’s Surveyor Certification form, then La Joya satisfied the proximity requirements in the RFA and was properly awarded funding. If La Joya’s Surveyor Certification form had been rejected, La Joya would not have been awarded funding and Douglas Gardens would have been awarded funding. Florida Housing’s decision to award funding to La Joya was based in part on Ms. Boyd’s scoring of the Surveyor Certification form and reflected the agency’s support of Ms. Boyd’s action. However, during the pendency of Douglas Gardens’ protest, Florida Housing changed its position and determined that La Joya’s Surveyor Certification form should not have been considered, based on the mandatory language of section Four A.6.a.(1) of the RFA. Ms. Boyd testified that she did not notice that La Joya’s Surveyor Certification form was a prior version and that she scored it as if it were the current version. She testified that she should not have scored the form “[b]ecause it specifically says in the RFA, if they do not have the correct form, they will not be considered.” Jean Salmonsen, housing development manager, acted as a backup to Ms. Boyd in reviewing the Surveyor Identification forms and verifying the award of proximity points. Ms. Salmonsen testified that she, too, missed the fact that La Joya had filed the wrong version of the form and that she would have rejected the form had she correctly recognized it. Evidence presented at the hearing indicated that in January 2016, Ms. Salmonsen had in fact disqualified an application in a different RFA for submitting the 2014 version of the Surveyor Identification form. Several valid policy reasons were cited for the RFA’s requirement that applicants use only the current version of the Surveyor Identification form. Ken Reecy, Florida Housing’s Director of Multifamily Programs, testified that it is important to apply the rules and RFA criteria in a consistent manner because of the tremendous volume of applications the agency receives. Mr. Reecy stated, “For like criteria, yes, consistency. We live and die by consistency, frankly.” As to the Surveyor Certification form specifically, Mr. Reecy explained that over the years Florida Housing had used a number of different forms with different contents. Allowing applicants to submit different forms would add to the difficulty of scoring the hundreds of applications received from around the state. Uniformity and consistency as to applicant submissions allow Florida Housing to process all of these applications in a cost efficient manner. Though he expressed his concern with consistency of review and ensuring that all applicants provide the same information as reasons for rejecting La Joya’s submission of the 2014 Surveyor Certification form, Mr. Reecy conceded that one of the reasons Florida Housing moved away from the previous rigid Universal Application Cycle allocation process was to allow for flexibility in determining that insignificant scoring errors need not be the basis for disqualifying an otherwise acceptable application. Florida Housing’s recent adoption in 2013 of the “Minor Irregularity” rule is further indication of its intent to employ more flexible evaluation criteria than it has in the past. See Findings of Fact 14 and 15, supra. Mr. Reecy acknowledged that in the instant case, the substance of the 2014 and 2015 Surveyor Certification forms was identical, and that the information provided by La Joya using the 2014 form was the same information required by the 2015 form.
Recommendation Based on the foregoing, it is RECOMMENDED that a final order be entered by the Florida Housing Finance Corporation dismissing the Formal Written Protest and Petition for Administrative Hearing filed by Douglas Gardens V, Ltd., and finding that La Joya, Ltd. is eligible for funding under Request for Applications 2015-112. DONE AND ENTERED this 29th day of February, 2016, 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 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of February, 2016.
The Issue Whether Respondent, Florida Housing Finance Corporation’s (“Florida Housing”), decision to award funding, pursuant to Request for Applications 2017-111 (“the RFA”), to HTG Sunset, LLC (“Sunset Lake”); HTG Creekside, LLC (“Oaks at Creekside”); and Harper’s Pointe, LP (“Harper’s Pointe”), is contrary to its governing statutes, rules, or the RFA specifications; and, if so, whether the decision is clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact Petitioner Madison Oaks is the Applicant entity for a proposed affordable housing development to be located in Osceola County, Florida. Petitioner Sterling Terrace is the Applicant entity for a proposed affordable housing development to be located in Hernando County, Florida. American Residential and Sterling Terrace are Developer entities as defined by Florida Housing in Florida Administrative Code Rule 67-48.002(28). Sunset Lake, Oaks at Creekside, and Harper’s Pointe are all properly registered business entities in Florida in the business of providing affordable housing. Florida Housing is a public corporation organized pursuant to chapter 420, Part V, Florida Statutes, and, for the purposes of these proceedings, an agency of the State of Florida. Through the RFA, Florida Housing proposes to award an estimated $10,978,942 in Housing Credit Financing for Affordable Housing Developments located in medium and small counties (“affordable housing tax credits”). The RFA outlines a process for selecting developments for funding. Section Five B. outlines the Selection Process, and subsection 2. is the Application Sorting Order. On November 5, 2017, Florida Housing received 167 applications in response to the RFA. Madison Oaks, Sterling Terrace, Sunset Lake, Oaks at Creekside, and Harper’s Pointe timely submitted applications seeking funding to assist in the development of multi-family housing in medium counties. Florida Housing selected a review committee to score all submitted applications. The review committee issued a recommendation of preliminary rankings and allocations, and the Board of Directors of Florida Housing approved these recommendations on May 4, 2018. The Board found that the parties to this proceeding all satisfied the mandatory and eligibility requirements for funding, but awarded funding to Intervenors based upon the ranking criteria in the RFA. If Sterling Terrace can demonstrate that any two of the three Intervenors should not have been recommended for funding, it and Blue Sunbelt, LLC, will displace them as applications selected for funding. If Madison Oaks can demonstrate that all three Intervenors should not have been recommended for funding, Sterling Terrace and Blue Sunbelt, LLC, will displace them as applications selected for funding. Sunset Lake Section Four A.5.e.(3) of the RFA allows applicants to receive up to four points for proximity to certain community services. The RFA provides that applicants in medium counties must receive at least seven points to be eligible for funding, and at least nine points to be eligible for a Proximity Funding Preference. One of those community services is public schools, which are defined as follows: A public elementary, middle, junior and/or high school, where the principal admission criterion is the geographic proximity to the school. This may include a charter school, if the charter school is open to appropriately aged children in the radius area who apply, without additional requirements for admissions such as passing an entrance exam or audition, payment of fees or tuition, or demographic diversity considerations. Additionally, it must have been in existence and available for use by the general public as of the Application Deadline. (emphasis added). Sunset Lake identified the Jewett School of the Arts (“Jewett School”) as a public school, received four points for proximity, and as a result, was eligible for the Proximity Funding Preference. The Jewett School is a magnet school within the Polk County Florida School District. The Jewett School was in existence and available for use by the general public as of the application deadline. Petitioners maintain the Jewett School does not meet the definition of “public school.”4/ If the Jewett School does not meet the definition of a “public school,” Sunset Lake would not be entitled to four points for proximity to community services. As a result, it would have a total of seven points for proximity, and while it would remain eligible, it would lose the Proximity Funding Preference. As a result, Sunset Lake would not have been ranked as highly and would not have been recommended for funding. The Jewett School does not meet the RFA definition of “public school” because geographic proximity to the school is not the principal admission criterion. Although a student must live in Polk County Schools’ Magnet Zone B to apply for admission to the Jewett School, the principal admission criteria is a random lottery process. Geographic location within the Polk County magnet school zones is a threshold issue which qualifies a student to apply for admission. However, the magnet school decision-making process entails a subsequent elaborate demographic diversity analysis, sorting based on the outcome of that analysis, and, ultimately, a random lottery drawing which determines final admission. The Jewett School admission process is contrary to Florida Housing’s primary purpose of awarding proximity points to proposed housing developments--to ensure the intended residents can, in fact, use the services in proximity to the development. Sunset Lake is not entitled to four points for proximity to community services and should not be awarded Proximity Funding Preference. As a result, Sunset Lake should not have been ranked as highly and should not have been recommended for funding. Oaks at Creekside Oaks at Creekside identified the Manatee Charter School (“Manatee School”) as a public school, received three points for proximity, and, as a result, was eligible for funding but not for the Proximity Funding Preference. The Manatee School is a charter school located in Bradenton, Florida. The Manatee School was in existence and available for use by the general public as of the application deadline. Petitioners maintain the Manatee School does not meet the definition of a “public school.”5/ If the Manatee Charter School does not meet that definition, then Oaks at Creekside is not entitled to three points for proximity. As a result, it would have only six total proximity points, and would not be eligible for funding. Florida Housing maintains that a charter school must meet both parts of the definition of a public school in order for a proposed development to receive proximity points based on proximity to that school. That means a charter school must (1) use geographic proximity as the primary admission criteria, and (2) be “open to appropriately aged children in the radius area who apply, without additional requirements for admissions such as passing an entrance exam or audition, payment of fees or tuition, or demographic diversity considerations.” Geographic proximity is not the primary admission criterion for the Manatee School. On the contrary, the Manatee School is open for admission regardless of geographic proximity thereto. The Manatee School operates pursuant to a contract with the Manatee County School Board, and is “open to any student residing in the Manatee County School District, students covered in an interdistrict agreement and students as provided for in Section 1002.33(10), Florida Statutes (2010).”6/ The Manatee School operates a “controlled open enrollment” process. The application period opens in early January and closes at the end of February, and the School accepts students from any school district in the state whose parent or guardian can provide transportation to the school, if the school has not reached capacity. This process is sometimes referred to as “school choice” and is mandatory pursuant to section 1002.31, Florida Statutes.7/ The Manatee School has enrolled students throughout Manatee County, as well as from adjoining Sarasota County. Historically, the Manatee School has not reached capacity. Once the School reaches capacity in any one grade level or class, students will be selected by a system-generated, random lottery process. The term “radius area” is not defined in the RFA or in Florida Housing’s rules. Florida Housing introduced no evidence regarding the meaning of the term “radius area” within the definition of “public school.” When questioned about the meaning, Marisa Button, Florida Housing’s Director of Multifamily Allocations, stated she did not know, but “[I] assume it means if the charter school has a radius area. I don’t know.”8/ The term “radius” is defined as “a bounded or circumscribed area.” Merriam-Webster Online, www.merriam- webster.com (2018). The bounded or circumscribed area for admission to the Manatee School is the Manatee County School District, pursuant to its contract. The Manatee School is open to appropriately-aged children in the radius area who apply. The Manatee School does not apply additional requirements for admission, such as passing an entrance exam or audition, payment of fees or tuition, or demographic diversity considerations.9/ The Manatee School does provide admissions preferences to students of active duty military personnel, siblings of a student already enrolled, siblings of an accepted applicant, children of an employee of the School, and children of a charter board member. Each of these preferences is authorized pursuant to section 1002.33(10)(d). The preferences are not additional requirements for admission to the Manatee School. The Manatee School meets the second part of the definition of “public school” for purpose of qualifying Oaks at Creekside to receive proximity points pursuant to the RFA. Harper’s Pointe Madison Oaks argues Harper’s Pointe is ineligible for funding pursuant to the RFA because the Harper’s Pointe development site is a “scattered site,” and Harper’s Pointe did not identify the site as such and comply with the RFA requirement to designate latitude and longitude coordinates for both sites.10/ Rule 67-48.002(105) defines “scattered sites” as follows: (105) “Scattered sites,” as applied to a single Development, means a Development site that, when taken as a whole, is comprised of real property that is not contiguous (each such non-contiguous site within a Scattered Site Development, is considered to be a “Scattered Site”). For purposes of this definition “contiguous” means touching at a point or along a boundary. Real property is contiguous if the only intervening real property interest is an easement, provided the easement is not a roadway or street. All of the Scattered Sites must be located in the same county. Section Four A.5.c. of the RFA states: “The Applicant must state whether the Development consists of Scattered Sites.” Section Four A.5.d. of the RFA requires that applicants provide latitude and longitude coordinates for the Development Location Point and any scattered sites. Section Five A.1. provides that “only items that meet all of the following Eligibility Items will be eligible for funding and consideration for funding selection.” Among the items listed are “Question whether a Scattered Sites Development answered” and “Latitude and Longitude Coordinates for any Scattered Site provided, if applicable.” Harper’s Pointe did not state in its application that the development consists of scattered sites, and did not provide separate latitude and longitude coordinates for scattered sites. Harper’s Pointe’s proposed development site, as identified in its Site Control Documents, consists of land located within a platted tract of property. The plat recorded in Alachua County indicates that the site is bisected by a platted 50-foot street easement running east/west through the property. The parties stipulated the street has never been constructed. Although portions of the east/west easement area show signs of having been improved at some time in the past, the easement area has never been paved, and is currently impassible by car or truck due to vegetation in the easement area. Even if the easement area were improved, there is no roadway to the west of the property to which it would connect. A fence runs along the property line and the property beyond the fence is platted residential lots accessed by Northeast 22nd Street. An existing roadway, Northeast 23rd Avenue, terminates at the eastern property line just south of the east/west easement. The City has placed barriers at that property line prohibiting access to the property from Northeast 23rd Avenue. If the platted street is a “roadway or street” as those terms are used in rule 67-48.002(105), the site would meet the definition of a “scattered site.” Ms. Button testified on behalf of Florida Housing that the property meets the definition of a scattered site because “there is an easement that is a road or a street” that bisects the property. Ms. Button first testified that Florida Housing’s determination did not depend on whether a roadway or street is actually constructed within the easement, but rather, “it goes back to the easement, whether there is an easement that is a roadway or street.” Ms. Button’s testimony seemed logical enough. If the easement were a street easement, access between the northern and southern portions of the development site would be constrained. By contrast, if the easement were a conservation or utility easement, there would be no impairment of access between portions of the development site. However, on cross examination, Ms. Button testified that, in making the determination whether an easement for a road or street existed, Florida Housing would consider a number of other factors, including whether a roadway was actually constructed within the easement, whether there were physical obstructions preventing access to the “prospective” roadway or street, and whether the public had a right to use the “prospective” roadway or street. Ms. Button did not testify with specificity what factors she considered in making the determination that the easement, in this case, was “a roadway or street.” Ms. Button’s direct-examination testimony was conclusory: “Based on the documentation we received, there is an easement that is a road or street.” On direct examination, her determination appeared to be based solely on the plat designation of a street easement. On cross-examination, however, Ms. Button testified that “a street designated . . . on a plat could be evidence of the existence of a scattered site.” (emphasis added). Moreover, Ms. Button testified that Florida Housing could consider whether a roadway or street was actually constructed, whether there were obstructions to its use, and whether the public had a right to use the purported roadway. Ms. Button’s testimony that the Harper’s Point development site was a scattered site was equivocal, and the undersigned does not accept it as either reliable or persuasive.11/ There is no physical roadway or street constructed within the easement. While there is some evidence that some portions of the easement area were improved in the past, said improvement was at least 25 years old. The current condition of the property is fairly heavily wooded. To the extent a “path” exists on the property, it is not passable by a standard four- wheeled vehicle. Moreover, there are physical barriers preventing vehicular access to the property from the adjoining street to the east. There is no access to the property from the residential development to the west of the property. There is not an improved area preventing access from the northern to the southern portion of the development site. There is no structure built within the easement which would have to be demolished in order to build the project on the development site as a single parcel. Based on the entirety of the reliable evidence, the Harper’s Pointe development site is not a “scattered site” as defined in the RFA. Madison Oaks failed to prove that Florida Housing’s initial determination to award tax credits to Harper’s Pointe, pursuant to the RFA, was incorrect.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Florida Housing issue a final order finding (1) that its initial scoring decision regarding Sunset Lake was erroneous, and awarding funding to the applicant with the next highest lottery number; and (2) awarding funding to Oaks at Creekside and Harper’s Pointe, pursuant to its initial scoring decision. DONE AND ENTERED this 23rd day of August, 2018, in Tallahassee, Leon County, Florida. S SUZANNE VAN WYK 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 23rd day of August, 2018.
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)
The Issue The issue to determine in this bid protest matter is whether Respondent, Florida Housing Finance Corporation’s, intended award of funding under Request for Applications 2017-113 was contrary to its governing statutes, rules, or the solicitation specifications.
Findings Of Fact Florida Housing is a public corporation created pursuant to section 420.504, Florida Statutes. Its purpose is to provide and promote public welfare by administering the governmental function of financing affordable housing in Florida. Florida Housing has been designated as the housing credit agency for Florida within the meaning of section 42(h)(7)(A) of the Internal Revenue Code. As such, Florida Housing is authorized to establish procedures to distribute low-income housing tax credits and to exercise all powers necessary to administer the allocation of these credits. § 420.5099, Fla. Stat. For purposes of this administrative proceeding, Florida Housing is considered an agency of the State of Florida. Florida Housing administers the competitive solicitation process to award low-income housing tax credits and other funding by means of request for proposals or other competitive solicitation. Florida Housing initiates the competitive solicitation process by issuing a Request for Applications. §§ 420.507(48) and 420.5087(1), Fla. Stat.; and Fla. Admin. Code R. 67-60.009(4). 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. Tax credits are awarded competitively to real estate developers in Florida for rental housing projects which qualify. Typically, developers then sell the tax credits to raise capital for their housing projects. Because tax credits allow developers to reduce the amount necessary to fund a housing project, they can (and must) offer the tax credit property at lower, more affordable rents. Developers also agree to keep rents at affordable levels for periods of 30 to 50 years. The Request for Applications at issue in this matter is RFA 2017-113, entitled “Housing Credit Financing for Affordable Housing Developments Located in Broward, Duval, Hillsborough, Orange, Palm Beach, and Pinellas Counties.” The purpose of RFA 2017-113 is to distribute funding to create affordable housing developments in the State of Florida. Through RFA 2017-113, Florida Housing intends to provide an estimated $14,601,863.00 of housing credit financing. Florida Housing issued RFA 2017-113 on October 6, 2017. Applications were due to Florida Housing by December 28, 2017.6/ Florida Housing received 33 applications in response to RFA 2017-113. Five proposed developments, including FOUR6 Skyway7/ and Eagle Ridge, applied for funding for housing credits in Pinellas County. Upon receipt of the applications, Florida Housing assigned each applicant a lottery number. Florida Housing created a Review Committee from amongst its staff to score each application. The Review Committee reviewed, deemed eligible or ineligible, and ranked applications pursuant to the terms of RFA 2017-113, as well as Florida Administrative Code Chapters 67-48 and 67-60, and applicable federal regulations. As further explained below, the Review Committee deemed FOUR6 Skyway’s application ineligible for consideration under RFA 2017-113. Specifically, the Review Committee determined that FOUR6 Skyway’s application failed to state its housing project’s Development Location Point in “decimal degrees, rounded to at least the sixth decimal point” as expressly required by Section Four, A.5.d(1), of RFA 2017-113. Conversely, the Review Committee found that Eagle Ridge’s application satisfied all mandatory and eligibility requirements for funding and was awarded 20 out of 20 total points. Eagle Ridge was assigned a lottery number of 16. On March 16, 2018, the Review Committee presented its recommendation of preliminary rankings and allocations to Florida Housing’s Board of Directors. Based on the Review Committee’s recommendations, the Board of Directors (without explanation) stated that FOUR6 Skyway did not satisfy all mandatory and eligibility requirements for funding. Consequently, although FOUR6 Skyway was assigned a lower lottery number of 2, the Board of Directors selected Eagle Ridge for funding to develop affordable housing in Pinellas County. (Only applications that met all eligibility requirements were considered for selection.) The Board of Directors approved $1,660,000.00 in housing credit funding for Eagle Ridge’s housing project. FOUR6 Skyway protests Florida Housing’s selection of Eagle Ridge instead of its own housing project. FOUR6 Skyway specifically challenges Florida Housing’s determination that its application was ineligible under the terms of RFA 2017-113. If FOUR6 Skyway successfully demonstrates that Florida Housing erred in disqualifying its application, FOUR6 Skyway, by virtue of holding the lower lottery number, will be selected for housing credit financing in Pinellas County instead of Eagle Ridge. The focus of FOUR6 Skyway’s challenge is the information it provided in response to RFA 2017-113, Section Four, A.5.d., entitled “Latitude/Longitude Coordinates.” RFA 2017-113, Section Four, A.5, entitled “Location of Proposed Development” instructs, in pertinent part: The Applicant must indicate the county where the proposed Development will be located. This RFA is only open to proposed Developments located in Broward, Duval, Hillsborough, Orange, Palm Beach, and Pinellas counties. * * * d. Latitude/Longitude Coordinates (1) All applicants must provide a Development Location Point[8/] stated in decimal degrees, rounded to at least the sixth decimal place. In its application, FOUR6 Skyway responded to Section Four, A.5.d(1), as follows: [Latitude in decimal degrees, rounded to at least the sixth decimal place.] N 27 43 34.215880 [Longitude in decimal degrees, rounded to at least the sixth decimal place] W 82 40 47.887360 As shown above, FOUR6 Skyway stated its Development Location Point in a “degree/minute/second” format instead of the required “decimal degrees” format.9/ Because FOUR6 Skyway failed to comply with the Section A.5.d instruction to state the Development Location Point in decimal degrees, the Review Committee (and subsequently the Board of Directors) determined that FOUR6 Skyway’s application was ineligible for funding.10/ In arguing that its application was eligible under RFA 2017-113, FOUR6 Skyway contends that map coordinates written in a “degree/minute/second” format may be converted to decimal degrees by using the following mathematical equation: Degree + minute/60 + second/3600 = decimal degrees. Using this formula, the coordinates FOUR6 Skyway listed in its application can be converted into the following decimal degrees: Latitude: N 27 43 34.215880 equals 27.726171 decimal degrees Longitude: W 82 40 47.887360 equals - 82.679969 decimal degrees Florida Housing does not dispute that the latitude/longitude coordinates FOUR6 Skyway listed (in either the “degree/minute/second” or decimal degree formats) correspond to a map location that would have been eligible for funding under RFA 2017-113. Consequently, FOUR6 Skyway argues that Florida Housing could have, and should have, used this “simple” mathematical formula to obtain the decimal degrees of its Development Location Point. FOUR6 Skyway further claims that it included sufficient information on the face of its application for Florida Housing to pinpoint the exact location of its proposed housing development in Pinellas County. Not only did FOUR6 Skyway list the address of its development, but it attached to its application a Surveyor Certification Form which also identified its Development Location Point using the “degree/minute/second” format.11/ FOUR6 Skyway asserts that, in light of the fact that the term “decimal degrees” is not defined by statute, rule, or in RFA 2017-113, Florida Housing should have deemed its application eligible for funding based on the information it provided. Finally, FOUR6 Skyway contends that Florida Administrative Code Rules 67-60.002(6) and 67-60.008 authorize Florida Housing to waive “minor irregularities” in applications. FOUR6 Skyway maintains that Florida Housing should have exercised its discretion and waived FOUR6 Skyway’s failure to state its Development Location Point in decimal degrees as a “minor irregularity.” Therefore, Florida Housing should have found FOUR6 Skyway’s application eligible for funding under RFA 2017-113. In response to FOUR6 Skyway’s challenge, Florida Housing asserts that it properly acted within its legal authority to disqualify FOUR6 Skyway’s application. Florida Housing argues that FOUR6 Skyway, by stating the latitude/longitude coordinates of its Development Location Point in the (unacceptable) “degree/minute/second” format, failed to comply with the express terms of RFA 2017-113, thus rendering its application ineligible for funding. In support of its position, Florida Housing presented the testimony of Marisa Button, Florida Housing’s Director of Multifamily Allocations. In her job, Ms. Button oversees the Request for Applications process. Ms. Button initially explained the procedure by which Florida Housing awarded funding under RFA 2017-113. Ms. Button conveyed that Florida Housing created a Review Committee from amongst its staff to score the applications. Florida Housing selected Review Committee participants based on the staff member’s experience, preferences, and workload. Florida Housing also assigned a backup reviewer to separately score each application. Review Committee members independently evaluated and scored discrete portions of the applications based on various mandatory and scored items. Thereafter, the scorer and backup reviewer met to reconcile their scores. If any concerns or questions arose regarding an applicant’s responses, the scorer and backup reviewer discussed them with Florida Housing’s supervisory and legal staff. The scorer then made the final determination as to each application. For RFA 2017-113, Florida Housing assigned Karla Brown, a Multifamily Programs Manager, as the lead scorer for the “proximity” portion of RFA 2017-113, which included the Section Four, A.5.d, latitude/longitude coordinates of the Development Location Point. Ms. Brown has scored proximity points for Requests for Application for approximately ten years. At the final hearing, Florida Housing offered the deposition testimony of Ms. Brown. In her deposition, Ms. Brown testified that, upon reviewing FOUR6 Skyway’s application, she immediately noticed that FOUR6 Skyway did not use decimal degrees to record the latitude/longitude coordinates of its Development Location Point. Ms. Brown explained that Florida Housing’s mapping software required applicants to list their Development Location Points in decimal degrees in order to locate the proposed housing project. The software would not allow her to plot latitude/longitude coordinates written in the “degree/minute/second” format. Consequently, she was not able to determine the location of (or award “proximity” points to) the FOUR6 Skyway development. As a direct result, Ms. Brown determined that FOUR6 Skyway’s application was ineligible for an award of funding under RFA 2017-113. Furthermore, Ms. Brown considered whether she should waive FOUR6 Skyway’s latitude/longitude coordinates as a “minor irregularity.” She determined that waiving FOUR6 Skyway’s “degree/minute/second” coordinates was not appropriate because RFA 2017-113 expressly instructed applicants to state the Development Location Point in the distinct format used by its mapping software, i.e., decimal degrees. At the final hearing, Ms. Button elaborated on Ms. Brown’s testimony maintaining that an applicant’s use of decimal degrees for its Development Location Point was critical in Florida Housing’s review of each application. Ms. Button reiterated that Florida Housing uses the application’s Development Location Point to confirm that the proposed housing project is located in the area covered by the Request For Applications. Ms. Button explained that when latitude/longitude coordinates are submitted in the wrong format, it is impossible for Florida Housing staff to plot the Development Location Point using its internal mapping software. Regarding FOUR6 Skyway’s argument that Florida Housing should have considered its “degree/minute/second” format as a “minor irregularity,” Ms. Button testified that Florida Housing recognizes that developers occasionally make errors in their applications. In light of this possibility, the rules governing the competitive solicitation process authorize Florida Housing to waive “minor irregularities.” As provided in rule 67-60.008, [Florida Housing] may waive Minor Irregularities in an otherwise valid Application. Mistakes clearly evident to the Corporation on the face of the Application, such as computation and typographical errors, may be corrected by the Corporation; however, the Corporation shall have no duty or obligation to correct any such mistakes. See also Fla. Admin. Code R. 67-60.002(6) and RFA 2017-113, Section Three, A.2.C. However, Ms. Button declared that the difference between latitude/longitude coordinates stated in “degree/minute/seconds” versus “decimal degrees” is more than just a “minor irregularity.” Converting map coordinates into decimal degrees goes beyond simply correcting a computational or typographical error. Such action requires the scorer to actually calculate the coordinate point on behalf of the applicant. Ms. Button explained that scorers are not prepared or trained on how to mathematically determine map coordinates. (In her deposition, Ms. Brown testified that she did not “even know how to begin to try to convert” a “decimal/minutes/second” coordinate to decimal degrees. She is a “scorer,” not a “surveyor.” Ms. Brown relayed that she was specifically trained to use the decimal degrees numbers, and only the decimal degrees numbers, to plot Development Location Points in the Florida Housing mapping software.) Ms. Button added that, not only would converting latitude/longitude coordinates into decimal degrees place the burden on the scorers to correctly enter an applicant’s data into the mapping software program, but, a scorer might miscalculate the plot points. This result would taint the reliability of the scoring process. Consequently, Florida Housing did not believe that it should have exercised its discretion to waive FOUR6 Skyway’s improper latitude/longitude coordinates and convert its “degree/minute/second” Development Location Point into decimal degrees. Therefore, Florida Housing fully supported Ms. Brown’s decision not to waive FOUR6 Skyway’s response to Section Four, A.5.d., as a “minor irregularity.” Finally, Ms. Button professed that transcribing latitude/longitude coordinates into decimal degrees would be contrary to competition by relieving an applicant of the minor, but real, burden of accurately plotting its project’s Development Location Point. Such a practice would allow a Florida Housing scorer to independently modify (and thus, benefit) a developer’s application, thereby enabling it to prevail over other applicants. Finally, at the formal hearing, FOUR6 Skyway presented evidence of other “minor irregularities” Florida Housing has waived in past Requests for Applications.12/ FOUR6 Skyway argues that, in light of these prior decisions, Florida Housing’s failure to waive its nonconforming latitude/longitude coordinates in this matter was arbitrary and capricious. However, FOUR6 Skyway did not offer any evidence or elicit any testimony that Florida Housing has ever waived similar coordinate formatting errors. On the contrary, Ms. Button stated that she was not aware of any other instance where Florida Housing waived an applicant’s listing of latitude/longitude coordinates in “degree/minute/seconds,” instead of decimal degrees, as a “minor irregularity.” Based on the evidence presented at the final hearing, FOUR6 Skyway did not establish, by a preponderance of the evidence, that Florida Housing’s decision finding FOUR6 Skyway’s application ineligible for funding was clearly erroneous, contrary to competition, arbitrary, or capricious. Therefore, the undersigned concludes, as a matter of law, that Petitioner did not meet its burden of proving that Florida Housing’s proposed action to award housing credit funding to Eagle Ridge under RFA 2017-113 was contrary to its governing statutes, rules or policies, or the provisions of RFA 2017-113.
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 protest by FOUR6 Skyway. It is further recommended that Florida Housing Finance Corporation select Eagle Ridge as the recipient of housing credit funding under RFA 2017-113. DONE AND ENTERED this 24th day of July, 2018, in Tallahassee, Leon County, Florida. S J. BRUCE CULPEPPER 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 24th day of July, 2018.
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
