R94-89RESOLUTION NO. R94-,~?
A RESOLUTION OF THE CITY COMMISSION OF THE
CITY OF BOYNTON BEACH, FLORIDA,
AUTHORIZING AND DIRECTING THE MAYOR AND
CITY CLERK TO EXECUTE AN AGREEMENT
BETWEEN THE CITY OF BOYNTON BEACH AND
CGMS, INCORPORATED TO PROVIDE A REPORT
TO THE CITY ASSESSING THE FEASIBILITY OF
ACQUIRING AND OPERATING CLIPPER COVE
APARTMENTS UNDER THE REQUIREMENTS
IMPOSED BY THE RTC AFFORDABLE HOUSING
DISPOSITION PROGRAM AND MAKE A
RECOMMENDATION AS TO WHETHER THE CITY
SHOULD FILE A NOTICE OF SERIOUS INTENT TO
ACQUIRE THE PROPERTY; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the City Commission of the City of Boynton Beach, Florida
deems it to be inthe best interest of the citizens and residents of the City to enter
into an Agreement between the City of Boynton Beach and CGMS, Incorporated to
conduct a due diligence package analysis and necessary background work to
produce a report to the City Commission, a copy of which Agreement is attached
hereto, as Exhibit "A".
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF
THE CITY OF BOYNTON BEACH, FLORIDA, THAT:
Section t. The City Commission of the City of Boynton Beach, Florida
hereby authorizes and directs the Mayor and City Clerk to execute an Agreement
between the City of Boynton Beach and CGMS, Incorporated, providing for a due
diligence package analysis and necessary background work to produce a report,
a copy of which Agreement is attached hereto as Exhibit "A".
Resolution shall become effective immediately upon passage.
PASSED AND ADOPTED this ,/~' day of May, 1994.
ATTEST:
Cit~.~lerk
ove.~es
C.Parke:5/17/g4r
CITY Of BOYNTON BEACH, FLORIDA
n/~ayor
V_~Mayor_._
ATTACBIq]R~ "A"
New York · Sari Francisco · Atlanta · Northampton.
lb90 The Lenox Building, 3399 Peachtree Road. NE
^flank, GA 30326
Tel~hone: (4~) 81 &0~4
~acsimi)e: {4~) 814~5
May 17, t994
M_r. Wilfl'ed Hawkins
· A~si~tant to the City b, Ian~er
City of Boyrtton Beach
100 E~t Boynton Beach Noul~-ard
Boyrtt~x~, Beach, Florida 33435
~inandal Ach,-isory Agreement
Clipper Cove ^pa~tments
Boy'nton Beach, Florida
Dear ...Mr. PIawkins:
The purpose of this Fma.nclal Advisor, Agreement ts to set for~ the terll~ under which
CGMS Incorporated ["CGMS") will be retained by the City of Bo.'~ton Beach, Florida ("the
City") as tis Ft~ancia! Advlsox in connection with the poten~l acquisition of Clipper Cove
,%pa~tments by the C[~ or its designee.
Backgrotmd
RTC is the Receiver for a financial institution which credit enhanced a $19,500,000 Pah~
BeacJa County. Housing Finance Authority tax exempt bond bssue that financed the construction
of Clipper Cove Apartments, a 384 uni[ apartment p_roject within the city limits ot 8oynton
gea.ch. _Ti'~e R_TC. acquired the property as a result 0-f a foreclosure and proposes to sell the
prgjed Wxeugh ~ts Affordable Housing Disposition Program ("AHDP"} 'Unaer AHDP RTC
wm tssue a not~ce to ehg~b:e ~oca] govemmenl~, publish'using agencies and non-vrofit
_orgamzations advising them that the property is to'be sold and s61ic~Jng No~ices of S~rious
ln~?.t. C~.',ce a purcha~er is *selected, RTC will sell the property at its AffotdabIe Market Value,
s ?t~ce fiu~?t,~all¥ ,b~low fair n~__ket value. Tim pfarcliase~ and any hature owners will be
~'°nrracrae°a¥: .- . ouh~ated. .~, to __~°verate_~ .... Cliooer,~. Cove. . as.affordable housin. . g for its remanun' ' g usefu!
Jde, iea~mg a mmnnum of 3= ~'o ot the umts to lower income families.
The CiW is an eligible purchaser and wishes to retain CGM$ to assist in ev~uating the
feasibility of ~cquiring the proj'ect
Scope of Work
The pmosss of acquiring an AHDP project from RTC is divided into three phases:
Feasibili _ty .~mal_~i~ Pha~e
Pha~ I includes a preliminary due diligence review of tim project
and feasibilit7 analysis of City ownership. It condude~ with the
City reaching ~ derision on whether it will submit a Notice of
Serious Intent to RTC.
C2ppe~ Cove Apam'nem~
Advisory
May 17,
H, Ap?icatlon Phas~
Phase li commences w~th the dem~ion to aubmit a ~oOce
Gerious ~ten~ and ~cludes ~electin~ a ~ro~r~ m~ager,
developing an Affordable Hous~ PI~ ~r ad~~ng ~e
project, ~d p~f~fl~ ~nd ~u~s~i~ of ~e ~o~,
Phase ~ co~encc~ ~ RTC'~ ~l~on of ~e CI~ tO
~e p~ ~d includ~ condu~ ~ ~ due diltg~ce revi~,
Pur~a~e and Sell ~alua~ng various pe~anent
~ma~, ~d ~c~g ~d ex~g ~ ~ exempt
of d] ~ a p~ of ~e e~g ~na i~ue.
CGMM' Ph~e I ~ices ~ ~d~ ~e fo~o~g 5co~ of Work:
!. De~ied r~w of prel~ due dilig~ce nmt~ai provid~ by
RTC (R~t roll, project operating reports, rep~r estates and
appraisals),
2. Meeting with RTC's on site property manager to review and evaluate
current operations.
3. Iaspection of ~e property and sim visits to competing projects in the
surrounding market.
i. Me?tirl§ wi.th O~ plann[.llg ,,~,? zonir}.g persollrlel, area developers
and property managers to e,~aiuate the current and future rental
_umrket and demmid }'or affordable homing units.
5. Development of Financial models to evaluate the property.
6. Discussion with appropriate City officials concerning the City's
obiectives with respect to the property and the Affordable Housing
Plan to be subrmtted ~o RTC.
o ovram more current project operating reports.
8, Preparation of a r~ort to the City,
Work Product
CGMS will render a report to the City whir. ak will include the following:
1. An assessment of the feasibility of acquiring aa'id operating Clipper
Cove under co~.aints imposed by the A.HDP.
2. A recommendation as to whether ~he City should file a Not/ce of
~rious Intent to acquire the ~operty.
Financial Advisory
2..~m ev.~luat~on of own~?hip s~ategies (whether to hold or reconvey
tl~ project ~ a non-profit org~-u~ation).
4. A review of tl~e economic and potential connideraiions r~tnted to a
hold or reconvey decision.
A recommendation regarding the quahficatiorm of an appropriate
third party pr,oFerty manager a~-ld tke terrn.~ of a property
mana,gem.en.{: COntract.
6. A recommet~dation regarding ff~e Affordable Housing Plan to be
submitt-ed ns part of &¢ Notice of Serious Imenc
?. A summary of the 5reps required to appty for the property and
consummate it~ accl~isition if the City is selected as the pumhaser.
CGMS personnel will be available to meet with City offidals as requested to present its
findings and review the report
Compensation
CGMS shall be paid by the City for services rendered ,ander tl~s Fmanr~! Advisory Agreement
pursuant t~ invoices reruiered based on act~ time expended at the following bil]irtg rates:
$eni0~ate~°rY
~gement
ltmior Professional
Para Professional
$250
$190
$130
$50
55.0._°..0 ........ , aha agrees mat irs rnase i invoices will not exceed $7,500 unless authorized in.
aclvmace by the City.
~rn---d ..In addition to professional fees, CGkG invoices will indude reimbtrmement for travel
_o,r~.e~out ,of ~l:~e,t e..~enses '. _m_._:~. ed in connection with this engagement. Subsecuent
avei ~o ~o.ynron reach after an initial trip will be subject to advanco ann,n,.,A11-,~, ~k,~ k'~
~.~M~ does not bill professmnal fees for ~'~vel time.
one ;;c~:;~ ori~m~ ~ me; .v~sory agreement m the space provided and re~rn
~incerely yours,
~erry W. Cutter
Clipper Cove Apartments
CGM5 Incottx~rated i~ retained to serve as Financial Atlvisor to the City of Bovnton
9¢acF, in connection with its potential acquisition ol Clipper Cove Apartments frown the
Resolutiort Trust Corporntion
Financial Ad',dsory Agreement. trader the terms and for the c~mpensa~on outlined in this
City oi Boynton Bea~21, Florida
. ward Harmening
Title: Mayor
TOTAL