Appendix — Mandalay Shores Cooperative Housing Ass'n v. Pierce

No. 84-1337

In The

Supreme Court of the United States

October Term, 1984

In The Matter of

MANDALAY SHORES COOPERATIVE HOUSING ASSO-

CIATION, INC., A NonProfit Section 501(c)(3) IRC,

Benevolent Housing Corporation of the State of Florida, and

MARY RIEDEL and RALPH MEYER, Petitioners

Vv.

SAMUEL R. PIERCE, JR., SECRETARY OF DEPARTMENT

OF HOUSING AND URBAN DEVELOPMENT and ALFRED

HOFFMAN, JR., on behalf of MANDALAY ASSOCIATES, a

Corporation to be formed, Respondents

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

SEPARATE APPENDIX

ON

PETITION FOR WRIT OF CERTIORARI

Carlon M. O'Malley

416 Drew Street

Clearwater, Florida 33515

(813) 441-2632

Attorney for Petitioner

William P. O'Malley

416 Drew Street

Clearwater, Florida 33515

(813) 441-2632

I

} _— actin the? te os ee .eere

APPENDIX INDEX

Order Affirming Court Below and Denial of

eg

Order by Judge Krentzman, U.S. District Court

Middle District Florida, Tampa Division........

SEPARATE APPENDIX

Opinion Order entered February 18, 1982 11th

DRL ee cGceN hoecs cons kate una e eS Lo

HUD Property Disposition Committee Directive

Nhl i Re NS ED a TS

Notice of Disqualification of Alfred Hoffman, Jr.,

by HUD Previous Participation Committee... . ..

HUD Regulations, 24 CFR 290 et seq...........

HUD Directive to Area Manager dated October

PS Wale te oh as ence Wek ek Sk

HUD rejection of MSCHA $7,500,000 offer and

$375,000 earnest money deposit in form of Bank

eo ao cous. eka eadce sk ce

HUD/Hoffman Contract of Sale and Purchase

(All Cash) dated October 16, 1981.............

First National Bank of Chicago $375,000

irrevocable Commercial Letter of Credit payable

Bh SI Iss 5 Snes cn acs k can cinneas

MSCHA $7,500,000 Offer to purchase to HUD. .

WUD Sales Brochure and Advertisement..... nee

HUD Deed of record showing changed sales

terms in favor of Bank of Clearwater as Grantee.

HUD Specimen Deed “APPENDIX “A” of HUD

I EE Re cee awaneeabeen ans

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Appeal from the United States District Court

for the Middle District of Florida.

Before HILL, Circuit Judge, SMITH**, Judge, and

HENDERSON, Circuit Judge.

SMITH, Judge:

Appellant, Mandalay Shores Cooperative Housing

Association, Inc. (cooperative), appeals a judgment of the

United States District Court for the Middle District of Florida,

denying appellant's motion for a preliminary injunction and

granting appellee's motion for summary judgment in favor of

appellees, Samuel R. Pierce, Jr., et al., Department of Housing

and Urban Development (hereafter HUD). Appellant requests

(1) that HUD be enjoined from selling Mandalay Shores Apart-

ments of Clearwater, Florida (the project) until the present litiga-

tion is finally completed and (2) that the case be remanded to the

district court in order that material issues of fact present may be

litigated. The project is one to which HUD acquired fee simple

title in 1977 after the second of two defaults on the mortgage.

The cooperative is a nonprofit corporation formed by a number

of the tenants of the apartments, for the purpose of negotiating a

purchase of the project. In its memorandum opinion the district

court held that HUD, acting through its Property Disposition

Committee, did not exercise discretion in an arbitrary and

capricious manner in rejecting appellant's offer of purchase. We

denied the motion for injunction in July 1981 and, after hearing

oral arguments, we denied appellant's request that we stay

HUD's opening of competitive bids on the project and, subse-

quently, that a closing of sale scheduled for December 16, 1981,

be stayed, pendente lite. After giving full consideration to the

parties’ arguments, briefs and other submissions, and the record,

we affirm the decision of the district court as contained in its

memorandum opinion dated April 2, 1981.

**Honorable Edward S. Smith, Judge for the U.S. Court of Claims, sit-

ting by designation.

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Appellant claims that the district court made a number of

errors; however, since we affirm the lower court's decision and

analysis of the issues it discussed we note briefly only those

issues which the lower court did not directly address.

[1] First, appellant claims that a provision in leases which

its members entered into with the receiver in Bankruptcy of the

project requires HUD to sell the project to appellant. The leases

stated that

Should the Landlord announce in writing an intention

to submit the** *|project] to a plan of cooperative or

condominium ownership,***[t]enant herein will be

given first option to purchase the apartment at the

price and upon terms set forth in any such plan.

Even viewing the clause as binding on HUD, it is not enforceable

since HUD decided that the project should remain a rental

property.

[2] Second, appellant argues that under the doctrine of

equitable estoppel HUD is ‘required to negotiate with the

cooperative. Appellant's only plausible basis for this claim in-

volves a meeting between representatives of appellant and

Marilyn Melkonian, the then Deputy Assistant Secretary for

Multifamily Housing Programs of HUD, who appellant alleges

assured the cooperative that HUD would negotiate exclusively

with it for the sale of the project. Ms. Melkonian submitted an

affidavit which stated that she never made any such assurances.

However, even if she made such a statement and even if the

regulations’ modifying the procedure for selling unsubsidized

projects to tenant cooperatives are, as appellant claims, invalid,

appellant still does not have a cause of action. The regulations

which the contested regulations superseded restricted to the Pro-

perty Disposition Committee the authority to transfer multi-

family projects.? Therefore, since unauthorized actions by HUD

1 24 C.F.R. §§ 290.7, 290.53(c) (1981); 44 Fed. Reg. 56,609 (1979).

2 24 C.F.R. § 290.40 (1981).

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officials C not bind the agency and since appellant is deemed to

have notice of the officials’ limited authority, appellant offers no

grounds for application of equitable estoppel.*

[3] Finally appellant claims that the amendment to 12

U.S.C. § 1701z-11(c)* contained in the Housing and Community

Development Act of 1980° somehow affects the parameters of

the Secretary's discretion in disposing of HUD projects. Nothing

in the statute or the legislative history of the act® gives appellant

grounds for that belief. The amendment does not change, in any

way relevant here, HUD'’s discretion as to how to dispose of the

project.

[4] Appellant has not demonstrated that there are material

issues of fact to be litigated. “[W]hen a movant makes out a con-

vincing showing that genuine issues of fact are lacking, we re-

quire *** [in order to deny a motion for summary judgment]

that the adversary adequately demonstrate by receivable facts

that a real, not formal, controversy exists ***”’ (Footnote omit-

ted.) We hold that there are no remaining genuine material

issues of fact in this case and, therefore, the decision of the

district court is

AFFIRMED.

3 See Housing Corp. of America v. United States, 199 Ct.Cl. 705, 711,

468 F.2d 922, 925 (1972).

* 12 U.S.C. § 17012z-11(c)(3) (Supp. IV 1980) reads, in part ‘‘(c) *** the

Secretary shall seek to *** (3) maintain the project for purposes of providing

rental or cooperative housing for the longest feasible period.”’

* Pub.L. No. 96-399, 94 Stat. 1614 (1980).

®* H.R. Conf. Rep. No. 1420, 96th Cong., 2d Sess. 107, reprinted in

[1980] U.S. Code Cong. & Ad. News 3506, 3617, 3652.

” Bruce Constr. Corp. v. United States, 242 F.2d 873, 875 (Sth Cir. 1957).

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MEMORANDUM

U.S. DEPARTMENT OF

HOUSING AND URBAN DEVELOPMENT

Date: 29 Sep 1980

To: Chairman, Property Disposition Committee

From: Robert P. Kalish, Office of Multifamily

Financing and Preservation, HMF

Subject: Mandalay Shores Apartments

Project No. 067-00016

Clearwater, Florida

AUTHORIZATION FOR ALL CASH SALE

WITH SPECIAL PROVISIONS FOR REPAIRS

AND MAINTENANCE AS RENTAL HOUSING

Background

Mandalay Shores Apartments, built in 1963 and insured

under Section 207 of the National Housing Act with an insured

mortgage of $7,170,900, consists of 123 efficiencies, 181 one-

bedroom, and 82 two-bedroom units. As is typical of southern

Florida, a majority of the current tenants are elderly and/or

retired.

HUD first acquired the project in April 1965, due to the in-

ability of the owner to correct latent defects in the heating/cool-

ing system and complete deferred maintenance. The project was

subsequently sold with an insured mortgage of $6,755,330 in

August 1970 to the Zenith Corporation, whose sole stockholder

was Mr. Irving Edelman. After sales closing, Mr. Edelman in-

stituted legal proceedings against the Department alleging im-

proprieties due to defects in the sales offering. Mr. Edelman

made no mortgage payments, lost his suit in court, and the pro-

ject was reacquired by HUD in March 1977.

The Area Office in 1978-79 contracted with an A & E firm

to provide a detailed analysis of the physical condition of the

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project in preparation to complete needed repairs estimated at

$4-$8 million. A 1979 OMB mandate on stopping repairs by

HUD in favor of purchaser repairs changed these plans. The

Area Office has recently gone back to the A & E firm to develop

detailed plans and specifications for use by HUD or the pur-

chaser to correct the physical condition. The Area Office is

presently doing repairs of an emergency nature and has recently

been instructed to replace the leaking roofs.

In 1979 the Area Office Property Disposition Committee

made a preliminary determination to sell the project for condo

conversion, as this was determined to be the project's highest

and best use and the one which would give the Department its

greatest monetary return. Subsequent to that determination, the

nonprofit Mandalay Shores Cooperative Housing Association,

Inc., was formed in August 1979 by several of the tenants with

the intention of purchasing the project from HUD. The primary

impetus for forming the Coop appears to have been misleading

statements made at the project that it would be sold for conver-

sion to a condominium and tenants would be given very short

notice to purchase or vacate. The Coop managed to raise about

$900,000 from about 280 of the then 340 tenants in a very short

period. The Association delivered a proposal to purchase the

project for its appraised value to the Area Office shortly

thereafter which was reviewed as part of the Office's disposition

analysis.

As required, the tenants received a notice on November 28,

1979, soliciting their comments on the sale of the project.

Simultaneously, income certification was started to determine

the extent of any need for Section 8. In addition, due to the poor

physical condition of any property, the need for extensive

rehabilitation and the advisability of having vacant units

available for temporary relocation of tenants during the

rehabilitation period, a policy was implemented that no further

vacant units be rented.

Based on the above, in December 1979, the Area Manager

met with the tenant body on-site and discussed the disposition of

the project. The Area Manager took special efforts to calm fears

of imminent eviction under any sales program. He discussed the

various methods of sale available to the Department and HUD’s

decision making process. This meeting resulted in honest ques-

tions and comments from the tenants. A notice was sent to the

tenants after the meeting repeating the information and

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assurances provided by the Area Manager and asking for tenant

comments. Based on the meeting and the notice, many com-

ments were received. The comments were considered in the Area

Office's analysis.

Area Office Analysis

Mandalay Shores is located directly on the Gulf of Mexico

within close proximity to downtown Clearwater Beach, the City

of Tampa, and enjoys easy access to needed services and

employment opportunities. It is the only multifamily structure

in a neighborhood of one and two story single family homes. Its

386 units are located in a central twelve story section within a

ten-story connecting wing on each side. Other improvements in-

clude a 600 foot seawall, a concrete pier, and an olympic size

heated swimming pool. All apartments have balconies. There

are also five commercial areas and 339 parking spaces, 135 of

which are covered.

The design, existing structural conditions and quality of

construction are generally good, but the project suffers from

laters defects and deterioration caused by a lack of proper

maintenance and local weather conditions. Major repairs and

replacement of the roof, plumbing, heating and air conditioning

systems are necessary. The stucco exterior finish and balcony

walls also need work. Many appliances must be replaced due to

age and poor physical condition. Asbestos, applied to the ceil-

ings during original construction to deaden sound, has been

found to be present in amounts that, pursuant to EPA criteria

and regulations, must be removed and/or properly contained.

The Area Office estimates 39 months to complete repairs,

including resolution of the asbestos problem, at a total cost of

$5.6 million. This cost does not include the A & E firms $3

million estimate for additional parking spaces which the Area

Office has deemed unnecessary nor an estimated $2.6 million in

fees and profit allowable under insured mortgage processing.

The Area Office's completed income survey determined

that approximately 10 tenants are eligible for Section 8. The ma-

jority of the tenants in Mandalay and the surrounding area are

white, elderly, middle and upper income families.

Mandalay Shores is located in Pinellas County, one of the

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more densely populated areas in Florida. The local housing

market is stabilizing after an over building period which oc-

curred in the mid 1970's. The current occupancy rate in the

Clearwater area is over 97% . Families and individuals both liv-

ing in as well as moving into the area exhibit strong purchasing

me beng eat wap cme ath enh gar png

curred in the last few years. Over 3300 rental housing units in

the area have been converted to condominium ownership and

the only new construction is single family or apartment con-

dominiums. Due to the above, the rental housing stock in the

overall market area has decreased, however, it is difficult to

determine how many condominium units may actuaily be

available as rental housing. The turnover rate at the project is

historically very low. There are between 5U-75 vacancies caused

by the current non rental policy instituted to facilitate the pend-

ing rehabilitation of the project which will require “checker-

boarding” to facilitate repairs.

The Area Office considered several methods of disposition

for the project, ranging from maintaining the property as a

rental, sale to the Association for cooperative conversion, as

well as a condominium conversion. The Area Office has not

raised rents in several years since the project is in need of

substantial repairs, therefore the current rent roll is substantially

below market comparables. Based on the current rent roll and

expenses, the as repaired price as a rental based on 13 percent

40-year insured financing is estimated to be $8,694,000. Sub-

tracting the repair and financing costs attributable to processing

with a 221(d)(4) mortgage, leaves a negative value. Using more

favorable financing such as 7-42 percent GNMA Tandem, the

as-is price would be about $3,355,000.

Other methods of financing were considered including

HUD advancing funds for the rehabilitation and taking back a

7-¥a percent purchase money mortgage. While this developed an

estimated as-is price of $7,000,000, HUD would spend over

$5,300,000 for the repairs. This would also be a very costly

method to finance the sale of a formerly unsubsidized project as

HUD’s borrowing rate is currently in excess of 7-2 percent.

The Area Office estimated that the price of the project as a

condominium conversion would be about $9,000,000 all cash to

HUD. This is based on a sellout price estimated at $20 million

less rehabilitation, conversion and protit of $11 million. They

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still state that this would be the highest and best use for the

project.

The Area Office determined that, due to the shortage of

rental housing in the area, the fact that the project is not former-

ly subsidized, and there are only a tew tenants eligible for Sec-

tion 8, there was no justification for a negotiated sale to the

Association, and therefore rejected the Association's proposal.

Based on the analysis, the Area Manager has recommended

that the project be repaired by the Department over a period of

3-4 years and then placed on the market for competitive sale. He

would provide for the maintenance of the project as rental hous-

ing for at least one year from the sales closing, that HUD control

rent increases during that period, and that HUD would, through

a right of revertor, take back the project if the above restrictions

are not complied with fully. In addition, he recommends that all

bidders must have a demonstrated capability to finance not only

the purchase of the project, but also its operation during the

term it remains as a rental.

The Area Manager again met with the tenants in June 1980

to tell them of his recommendation and provided them a copy ot

the recommendation as required in 24 CFR 290. Many com-

ments were received from tenants pleased with the recommenda-

tion to repair the building prior to sale. However, the Associa-

tion wrote to the Area Manager expressing its strong disagree-

ment with this approach and continues to demand a direct sale

to it as a non-profit cooperative. In August 1980, they submitted

another proposal to purchase the project which involved form-

ing a limited partnership with the intention of maintaining the

project as a low-to moderate-income elderly housing project

through a negotiated sale. The Association also has filed suit to

force such a sale.

Attachments

1. Jacksonville Area Manager's recommendation, dated

June 27, 1980 with the disposition analysis and recom-

mendation from the Area Office staff dated June 19,

1980.

2. Copies of written comments on the recommendation

received from tenants and the Association.

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3. Form HUD 9650 “Record of Acquired Multifamily

Property”.

4. Notice H 80-63(HUD)-Conversion of Existing Multi-

family Projects to Condominium and Cooperative

Ownership.

Recommendation

After carefully reviewing the Area Office’s analysis and

recommendation, the comments from the tenants and the

Association, the Association’s August 1980 proposal, Notice

H80-83 on Condo/Coop conversions, and HUD regulations at

24 CFR 290, we do concur with the recommendation to provide

for some type of action to prevent imminent displacement of

these elderly tenants, but do not feel that there is sufficient

justification for HUD to maintain this formerly unsubsidized

project in inventory and undertake several million dollars worth

of repairs without first attempting to competitively offer it to

private entities which could make the repairs.

As for the Association’s attempts to purchase the project,

this project is not formerly subsidized and therefore the only

manner in which a negotiated sale could be accomplished, pur-

suant to the 290 regulations, would be through a waiver of the

advertising requirements of the regulations. In addition, because

of the shortage of rental housing in the area, conversion of the

project to other than rental use at this time is not advisable since

it would remove units from the rental market, which would not

be in accordance with current Departmental policy expressed in

Notice H80-63. The policy in this Notice was not considered by

the Area Office because it was not in effect at the time the

analysis was being completed. Also, while the Association

alleges that it has first right of refusal and HUD has to sell it the

project pursuant to Section 246 of the Act, this is incorrect. Sec-

tion 246 gives the Secretary authority to provide 100 percent

financing in the purchase of a project being converted to

cooperative ownership where the decision is made to sell in that

manner. The provision is, therefore, permissive not mandatory.

Given HUD’'s various disposition objectives, we find insufficient

data to support a waiver to permit a negotiated sale to the

Association.

In consideration of the advanced ages of the tenant body,

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the current shortage of rental housing in the area, and in accord-

ance with our objectives of minimizing displacement, special

procedures must be provided in the disposition of the project to

assure that the project is repaired, and that tenants are not

forced to seek rental housing in a tight rental market in the near

future. However, because of changing market conditions, we

feel that rental housing use provisions should provide a

reasonable period of assurance of rental housing.

Therefore, I request authority to offer Mandalay Shores

Apartments for sale through a nationally advertised public

offering at no stated minimum price, all-cash, no financing or

mortgage insurance being provided by HUD, with authority to

execute the contract from the highest acceptable bidder or reject

all bids if none are acceptable. No minimum advertised price is

being set due to the low rent structure, the current fluctuating

financial market, the uncertainty as to actual cost for repairs,

the potential for future use of the project, and the impact the

following restrictions will have on market value and operating

costs.

The advertising and sales documents, as well as the deed,

would include the following provisions:

1. The purchaser must rehabilitate the project, and

remove/or contain the asbestos, in a manner accep-

table to HUD. The Area Office will provide detailed

plans and specifications at the project site and the Area

Office. The purchaser will be required to pay all tem-

porary relocation costs during the rehabilitation.

2. During the rehabilitation and for a period of 20 years

after completion of repairs to the entire project, the

purchaser must maintain all units in the project

available for rental and may not market them for any

other purpose without the prior written approval of the

Secretary. Approval may be granted only where the

owner demonstrates a substantial change in cir-

cumstances from those considered in this authoriza-

tion. The owner shall give tenants written notice 30

days in advance of any request to approve a change in

use and provide the opportunity to present written

comments.

3. All bidders must demonstrate capability of financing

not only the purchase price, but alsw the rehabilitation

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and operation during the rehabilitation period.

4. The purchaser will be required to provide a perfor-

mance bond in the amount of $2,800,000 to assure

completion of the rehabilitation.

5. The purchaser may not raise rents during the

rehabilitation period covered by item 2. Thereafter,

rents could be raised to market.

6. The purchaser must agree that, in the event the agree-

ment with HUD is violated, title to the project will

revert to HUD with the purchaser bearing all costs

associated with that action and the operation of the

project from the date of sales closing until HUD reac-

quired title.

We believe that the above method of sale best serves the

needs of all parties concerned, i.e., tenantry the project, the

neighborhood and the Departmerit. It balances the Department's

objectives by assuring that the project is sold, repaired, main-

tained as rental housing for a reasonable period, and returns the

most satisfactory return to HUD’s investment given the

reasonable conditions outlined above. It differs from the Area

Manager's recommendation basically in that repairs will be ac-

complished by the purchaser, not HUD, and the restriction for

continued rental use covers a significantly longer period of tizne.

In the event no acceptable offers are received, we would

reanalyze the case on the basis of the facts and in accordance

with the policies and procedures then in effect.

Robert P. Kalish

Attachments Director

/s/ /s/

Member of Committee Member of Committee

ted /s/

Member of Committee Member of Committee

CONCURRENCE: /S/

Deputy Assistant Secretary

APPROVED:

Chairman

9/30/80

Date

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MEMORANDUM

U.S. DEPARTMENT OF

HOUSING AND URBAN DEVELOPMENT

Date: Aug 27 1981

To: Marc Harris, Chief

Analysis and Sales Branch

From: Bruce Weichmann,

Multifamily Participation Review Committee

Subject: FHA Case No.: 067-00016

Project Name: Mandalay Shores Apartments

Principals: Alfred Hoffman, Jr.

On August 25, 1981 the Multifamily Participation Review

Committee reviewed the above project and voted to disapprove

the principal. Attached is a copy of our letter to Mr. Hoffman

informing him of the disapproval action.

/s/

Acting Participation Control

Officer

Attachment HUD 96(4-80)

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56608 Federal Register / Vol. 44, No. 191

Monday, October 1, 1979 / Rules and Regulations

Received DHUD

Oct 25 1979

Jacksonville Area Office

PART VIII

DEPARTMENT OF

HOUSING AND URBAN DEVELOPMENT

Office of Assistant Secretary for Housing—

Federal Housing Commissioner

Management and Disposition of HUD-

Owned Multifamily Housing Projects

DEPARTMENT OF HOUSING AND URBAN

DEVELOPMENT

Office of Assistant Secretary for Housing—

Federal Housing Commissioner

24 CFR Part 290

[Docket No. R-79-707]

Management and Disposition of HUD-

Owned Multifamily Housing Projects

Agency: Department of Housing and Urban Development

(HUD).

Action: Amendment to interim rule.

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Summary: This rule amends the present interim rule on the

disposition program published January 27, 1977. The new in-

terim rule represents significant changes in policy and procedure

in the management and disposition of HUD-owned multifamily

housing projects. The rule reflects HUD’s commitment to main-

tain the stock of decent, safe and sanitary housing affordable by

lower income tenants. The rule also reflects HUD’s desire to ad-

minister the disposition program efficiently and to protect the

financial integrity of the insurance funds.

Effective Date: October 30, 1979.

Comments Due: November 30, 1979.

Address: Comments should be sent to the Rules Docket Clerk,

Office of the General Counsel, Room 5218, Department of

Housing and Urban Development, 451 Seventh Street, S.W.,

Washington, D.C. 20410.

For Further Information Contact: Mr. Marvin Hilman, Office of

Financing and Preservation, Room 6155, Department of Hous-

ing and Urban Development, 451 Seventh Street, S.W.,

Washington, D.C. 20410, (202) 755-7220. This is not a toll-free

number.)

Supplementary Information: On January 27, 1977, the Depart-

ment of Housing and Urban Development published an interim

rule governing disposition of HL/ID-owned multifamily housing

projects. Interested persons were given until February 28, 1977,

to comment on the interim rule. A technical amendment to the

interim rule concerning waivers. Section 290.11, was published

October 28, 1977. No final rule has been published.

The Department received extensive comments on the in-

terim rule. Those comments have helped shape changes in the

administration of the property disposition program and have

been considered in the drafting of the new interim rule. In addi-

tion, the Housing and Community Development Amendments

of 1978, in Section 203, added statutory requirements governing

the management and disposition of HUD-owned multifamily

projects. Based on the above, significant changes have been

made in the interim rule on which comments were solicited

previously and further public comment is desired. Therefore,

Part 290 is not being published as a final rule. However, it is ef-

fective November 8, 1979 as an amended interim rule becauise its

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timely implementation will be beneficial to tenants of multi-

family housing projects and to program administration. A final

rule will be published after the comments on this interim rule

have been received. A summary of comments received on the

existing interim rule and responses to them is not included here

because the rule is not a final rule and new comments are being

solicited.

Three categories of projects are established for the disposi-

tion program. Formerly subsidized projects are all those ac-

quired projects built or operated under subsidy programs

designed to provide housing affordable by lower income

tenants. Formerly unsubsidized projects presently serving as

lower income housing resources are all those acquired projects

not built or operated with a subsidy but which, by virtue of their

tenancy or potential tenancy, are serving as housing for low and

moderate income persons. These projects will be disposed of

with a sufficient subsidy to prevent displacement of their lower

income tenants and to assure the financial feasibility of such

projects after sale. The third category is all other unsubsidized

acquired projects and these projects will be sold with eligible

tenants receiving a subsidy in the form of a Section 8 Certificate

of Family Participation to avoid displacement.

Disposition processing will involve an initial notice ot ac-

quisition to tenants and government agencies, solicitation of

comments, preparation of a disposition analysis and a disposi-

tion recommendation by the local Field Office Director.

General Provisions

This rule is intended to apply to all multifamily housing

projects in the Department's Inventory as soon as it becomes ef-

fective. While this should not prove burdensome, because the

rule reflects current administrative policy, § 290.3 specifically

provides that no existing management contracts are required to

be re-let or pending solicitations required to be readvertised to

conform to the rule. Property disposition recommendations

already submitted to the Property Disposition Committee will

be processed under previous instructions. Eligible tenants, those

who will receive the benefit of subsidized disposition, are defin-

ed as those who qualify for Section 8 assistance because that is

the subsidy which is intended to be used in the disposition of the

Department's inventory. Other tenants will not receive the same

benefits and protections as eligible tenants.

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Management Provisions

The new management section addresses overall objectives,

project management, occupancy issues, and rents. The manage-

ment objectives support the Department's policies of serving

lower income tenants, maintaining the housing stock, avoiding

unnecessary displacement and encouraging tenant involvement

in disposition decisions. To assure project management capable

of meeting the Department's concerns, detailed standards for

selecting competent qualified management are mandated. Only

those management entities fully capable of providing successful

project operation whose bids reflect services required for suc-

cessful operation can be awarded management contracts.

Rents are set so that eligible tenants in formerly subsidized

projects will pay only what they would be paying under the Sec-

tion 8 program. All other rents are tied to the lower of the stan-

dard FHA determination of gross potential rent or market rates

but flexibility in adjusting rents is provided so that financial

hardship and undesirable turnover can be avoided.

Disposition Provisions

The disposition sections address the policies and procedures

for determiring when projects will be sold with a subsidy and

how projects are to be processed for disposition. The criteria for

demolishing projects reflects the Department's view that demoli-

tion should be a last resort in disposition but may still be proper.

A detailed analysis of the consequences of demolition is required

whenever such a recommendation is made.

Every disposition will require approval of a Final Disposi-

tion Program by the appropriate Property Disposition Commit-

tee based on the Field Office Director's recommendation and a

supporting disposition analysis. A method of disposition will

also be approved which will either be by traditional competitive

bid, solicitation of purchase proposals followed by bids, or, in

certain cases involving formerly subsidized projects, by negotia-

tion. (A purchase proposal is a plan to purchase and operate a

project presented without regard to price or where the price is

fixed in advance by the Department.) Every purchaser must

meet basic requirements set by the Department for each par-

ticular sale and only bidders who meet these requirements will

be selected. In addition, in selecting purchasers of formerly sub-

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sidized projects, the Department must consider criteria related to

the owner's capacity to operate the project successfully for lower

income tenants.

In any sale, the Department may require that repairs be

made to the project as a condition of sale and that the repairs be

completed in a timeiy manner. The Department will enforce this

condition by retaining the right to rescind the sale for

noncompliance.

In cases where eligible tenants are displaced by disposition

of a project, they will be eligible for displacement benefits in-

cluding assistance in locating replacement housing, priority for

other Federal housing assistance and payment of reasonable

moving costs. Eligible tenants displaced by repairs undertaken

by the Department wiil also receive assistance, including the

right to return to a unit in the same project and payment of mov-

ing costs out of and back into a unit. Tenants who are not eligi-

ble for Section 8 assistance will not be eligible to receive

displacement benefits.

Interested persons are invited to submit written comments,

suggestions and data regarding the amendment to the interim

rule to the Rules Docket Clerk, Office of the General Counsel,

Rcom 5218, Department of Housing and Urban Development,

451 Seventh Street, S.W., Washington, D.C. 20410. All com-

munications should make reference to the above docket number

and title. Submissions received on or before 30 days after

publication will be considered before adoption of a final rule. A

copy of each submission will be available for public inspection

during business hours at the above address.

A finding of inapplicability with respect to environmental

impact has been prepared in accordance with Procedures for

Protection and Enhancement of Environmental Quality. Copies

of the findings are available for inspection and copying in the

Office of the Rules Docket Clerk.

Accordingly, the Department amends Chapter II, 24 CFR

290, to read as follows:

PART 290—MANAGEMENT AND DISPOSITION OF HUD-

OWNED MULTIFAMILY HOUSING PROJECTS

Sec.

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Subpart A—General Provisions

290.1 Purpose and scope

290.3 Applicability

290.5 Definitions

290.7 Waivers

Subpart B— Management Provisions

290.10 Management objectives

290.13 Project management

290.15 Occupancy

290.17 Rental rates

Subpart C—Disposition Provisions

290.20 Disposition objectives

290.23 Initial determination

290.25 Determination of need for low and moderate income

housing

290.27 General determination of subsidy to be provided

290.30 Disposition of vacant land

290.33 Initial notice

290.35 Disposition analysis

290.37 Director's disposition recommendation

290.40 Notice of disposition recommendation

290.41 Forwarding of disposition recommendation

290.43 Demolition

290.45 Notice of displacement

290.47 Displacement benefits

290.50 Disposition program

290.53 Methods of disposition

290.55 Property disposition committee

Authority: Section 7(d), Department of Housing and Urban

Development Act (42 U.S.C. 3535(d)).

Subpart A—General Provisions

§ 290.1 Purpose and scope.

The purpose of this Part is to prescribed the basic policies

which govern the management and disposition of HUD-owned

multifamily housing projects by the Department of Housing and

Urban Development. The intent of these regulations is to pro-

vide a disposition program which involves all interested parties

and properly balances the interests of the tenants, the

neighborhood, the local government, the FHA insurance funds,

and furthers the policies of the National Housing Act.

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§ 290.3 Applicability.

These regulations shall apply to the disposition and

management of all HUD-owned multifamily housing projects,

both those presently owned and those acquired in the future, ex-

cept that (a) no existing management contracts or solicitations

for management contracts past the point of advertisement shall

be required to be reopened in order to bring them into com-

pliance wiith these regulations; (b) property disposition recom-

mendations already submitted to the Property Disposition Com-

mittee shall be processed under applicable instructions in effect

at the time of submission; and (c) the time period for sending in-

itial notices pursuant to § 290.33 for projects which are owned

by HUD as of the effective date of these regulations shall com-

mence 30 days after that effective date.

§ 290.5 Definitions.

(a) Director—The HUD field orfice Director, who is either

an Area Office Manager in a HUD Area Office, or a Supervisor

in a HUD Service Office who is delegated authority to process

the disposition of multifamily projects.

(b) Disposition—The sale or conveyance by HUD of a

HUD-owned multifamily housing project, or any part of a pro-

ject, including the demolition of structures.

(c) Disposition analysis—The data and analysis prepared

by the Director or his or her staff as a basis for making a disposi-

tion recommendation.

(d) Disposition recommendation—The Director's recom-

mended disposition program for a project, including supporting

information and the disposition analysis.

(e) Eligible tenant—A person or family legally occupying a

rental unit in a HUD-owned multifamily housing project who

qualifies for housing assistance payments pursuant to section 8

of the U.S. Housing Act of 1937, as amended.

(f) Final disposition program—The disposition program

authorized by the appropriate Property Disposition Committee.

(g) Formerly subsidized project—A multifamily housing

project in which the tenants received the benefits of any of the

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following subsidy programs immediately prior to HUD’s ac-

quisition of title to the project:

(1) Below market interest rate mortgages insured under sec-

tion 221(d)(3) of the National Housing Act; or

(2) Interest reduction payments made in connection with

mortgages insured under section 236 of the National Housing

Act; or

(3) Rent supplement payments under section 101 of the

Housing and Urban Development Act of 1965; or

(4) Direct loans at below market interest rates, pursuant to

section 202 of the Housing Act of 1959, sections 401 and

404(b)(3) of the Housing Act of 1950, or section 312 of the Hous-

ing Act of 1964; or

(S) Housing assistance payments pursuant to section 23 of

the United States Housing Act of 1937 in effect prior to January

1, 1975, or section 8 of the United States Housing act of 1937,

except section 8 existing housing payments.

(h) Formerly unsubsidized project—A multifamily housing

project which was not subsidized prior to HUD’s acquisition

under any of the programs listed in the definition of formerly

subsidized project in paragraph (g) above.

(i) HUD—The Department of Housing and Urban

Development.

(j) Multifamily housing project(s) or Project(s)—Any pro-

perty, or combination of properties, consisting of 5 or more liv-

ing units, acquired by the Secretary as the result of a default

under a regulatory agreement or under a mortgage insured or

held by the Secretary pursuant to the National Housing Act or

under a program involving a loan guarantee or a direct loan by

the Secretary.

(k) Nonprofit consumer cooperative corporation—A legal-

ly chartered organization entirely owned by its voting member-

ship which exists primarily to furnish goods and services to

benefit its membership and which is not organized for the pur-

poses of making profit or gain as determined by HUD.

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(1) Property Disposition Commmttee— The designated group

of HUD officials to whom is delegated the authority to approve

final disposition programs for multifamily housing projects.

tm) Secretary—The Secretary of HUD or his or her

designee.

(n) Section 8—An assistance program which provides hous-

ing assistance payments pursuant to section 8 of the U.S. Hous-

ing Act of 1937, as amended.

(o) Subsidy—An assistance program which provides hous-

ing assistance payments pursuant to section 8 or any other hous-

ing assistance program of the U.S. Housing Act of 1937, as

amended, or any successor program.

(p) Tenant—A lawful occupant of a multifamily housing

project.

(q) Vacant land—property on which there are no structural

improvements present.

Upon completion of a determination and finding of good

cause by the Assistant Secretary for Housing—Federal Housing

Commissioner or his or her designee. HUD may waive any pro-

vision of this Part in any particular case subject only to statutory

limitations. Each waiver shall be in writing supported by

documentation of the facts and reasons which formed the basis

for the waiver.

Subpart B— Management Provisions

§ 290.10 Management objectives.

The management of HUD-owned multifamily housing pro-

jects shall be carried out in accordance with the objectives listed

below: ,

(a) To provide a level of services necessary to maintain oc-

cupied housing in decent, safe and sanitary condition in the

most cost efficient manner;

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(b) To keep the present tenants in place to the greatest ex-

tent possible consistent with sound management practices:

(c) To maintain all vacant buildings and land in a way that

eliminates health and safety hazards to the public and assures

the proper security of the project;

(d) To provide and to occupy fully as many decent, safe

and sanitary dwelling units as possible, consistent with the need

for the type and size of the units;

(e) To facilitate tenant involvement in decisions about the

future disposition of the project.

§ 290.13 Project management.

Good management of HUD-owned projects is essential to

the success of the multifamily housing preservation effort.

Therefore, stringent qualification standards must be used in pro-

curing management services for all projects.

(a) In contracting for services to manage its multifamily

housing projects, HUD shall find a management proposal to be

acceptable only if it meets the !evel and quality of services re-

(1) Satisfactory performance with respect to: (i) managing

properties similar in type and complexity; (ii) handling tenant

and tenant group concerns; (iii) property upgrading,

maintenance and preservation; (iv) maintaining levels

of occupancy and rental collections; (v) tenant selection; (vi) ef-

fectiveness in developing and enforcing project policies; (vii) ex-

ercising sound business and administrative judgment; (viii)

financial stability and responsibility; (ix) compliance with State

and local property management licensing requirements; and (x)

2 ee eens Cenneoy ewe Sree

y be important to successful management of a specific

pooped.

(2) Efficiency in providing management and services which

meet al! project operating needs.

(3) The proposed management plan must meet HUD’s

prescribed requirements and address fully the needs of the

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residents and of the project and shall include a proposed

management budget which addresses the qualify and quantity of

services required by the residents and the project;

(4) Any other criteria HUD determines are relevant to a

specific project;

(b) Where it is infeasible or impracticable to secure ade-

quate management for formerly subsidized projects through

conventional bidding procedures, HUD may negotiate with

qualitied management where (1) such management meets all the

criteria necessary for successful operation of the project, and (2)

satisfactory terms, including reasonable cost of services, can be

achieved through such negotiation.

(c) Project managers shall be required to manage projects in

accordance with HUD’s management objectives contained in §

290.10 and any other directives HUD may issue.

§ 290.15 Occupancy.

(a) Priorities. Occupancy in HUD-owned projects shall be

available to persons or families who meet HUD'’s written tenan-

cy standards made pursuant to paragraph (b) of this Section, on

a first-come, first-served basis, except that a priority will be

given to eligible tenants displaced from other HUD/owned pro-

jects after receiving a Notice of Displacement. (See § 290.45)

(b) Standards, HUD shall establish written standards for

selecting qualified tenants based on the management objectives

in § 290.10 and prudent management policies. The standards for

formerly subsidized projects shall include an income eligibility

criteria to assure that the lower income character of the projects

is maintained.

(c) Evictions. Evictions from HUD-owned properties shall

be governed by the regulations at 24 CFR 450, Subpart B.

(d) Dangerous conditions. Whenever HUD determines that

there is an immediate threat to the health and safety of the

tenants because of the condition of the project and emergency

repairs cannot alleviate the problem with the tenants in oc-

cupancy, HUD may require the tenants to vacate the premises in

accordance with paragraph (c) of this Section. When this hap-

pens, HUD shali provide displacement benefits to displaced

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tenants as provided in § 290.47. Tenants displaced under this

paragraph shall have a right to return to repaired units in the

project from which they were displaced.

§ 290.17 Rental rates.

(a) Deveiopment of rental rates. Within 30 days after the

Secretary's acquisition of title to a project, the Director shall

develop a market rental rate for each unit in the project. In addi-

tion, a rent schedule based on the FHA determination of gross

potential rent, including the full debt service payments required

under the previous mortgage note, will be developed. The ap-

proved rent schedule will be the lower of these two. Rents shall

be reviewed and updated at least annually.

(b) Rents to be charged. All tenants in formerly subsidized

projects shall be charged the lesser of 25 percent of income as

determined pursuant to section 8 of the U.S. Housing Act of

1937, as amended, or the rent established for the unit in (a)

above; provided that families who qualify to pay a lesser per-

centage of income pursuant to section 8 shall not be required to

pay more than that percentage. All tenants in formerly unsub-

sidized projects shall be charged the rent as determined pursuant

to paragraph (a) above, provided that HUD may set lower rents

for these tenants where that action, if determined by the Direc-

tor, is necessary or desirable to maintain the existing economic

mix in the project or to prevent undesirable turnover.

(c) Utility allowance. The rent payable in formerly subsidiz-

ed projects shall be reduced by an amount equal to the

reasonable cost of utilities for the unit, or a per unit or per

square foot basis, where utilities are paid directly by the tenant.

(d) Rent changes. Whenever a change in rents is proposed,

HUD shall provide tenants 30 days notice of the proposed

changes and an opportunity to review and comment on the new

rents and supporting documentation. An additional 30 days

notice shall be provided before the new rents become effective.

(e) Certification of income. Tenants may be required to

provide appropriate information concerning income for the pur-

pose of income certification in a manner prescribed by HUD so

that HUD can establish rents and an appropriate disposition

program.

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(f) Where a tenant does not certify income in accordance

with this subpart, the tenant shall pay the unit rent as determin-

ed pursuant to paragraph (a) above.

Subpart C—Disposition Provisions

§ 290.20 Disposition objectives.

The disposition of HUD-owned multifamily housing pro-

jects shall be carried out in accordance with the objectives listed

below.

(a) Reduce the inventory of HUD-owned projects in a time-

ly manner consistent with the goals of:

(1) Preserving or increasing the number of housing units

available to and affordable by lower income tenants;

(2) Maintaining the existing housing stock in decent, safe

and sanitary condition; and

(3) Preserving and revitalizing urban residential

neighborhoods.

(b) Consistent with meeting the above goals, to obtain a

sale price based on the project's present market value and an-

ticipated future use or condition sufficient to protect the finan-

cial interests of the government and to produce a satisfactory

return to the mortgage insurance funds.

(c) To dispose of projects in a manner which is consistent

with HUD approved housing and community development

needs, plans and actions of local governments to the extent

feasible.

(d) To dispose of all projects in a manner which minimizes

the displacement of tenants.

(e) To demolish projects only as a last resort.

_ (f) These are national objectives and, while local circum-

stances may make it impossible to meet all the objectives, they

should be met to the greatest extent feasible. In some cases the

objectives may represent conflicting public policy goals and

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decisions will have to be made to balance and choose among

various objectives. In these cases discretion and judgment will

have to be exercised in designing a program which best meets the

national goals of providing affordable housing and preserving

and revitalizing neighborhoods.

§ 290.23 Initial determination.

(a) Within 45 days after HUD acquires title to a project, the

Director shall make an initial determination as to whether or not

the project will be recommended for sale with subsidy.

(b) If the project is formerly subsidized, the initial deter-

mination will be to recommend sale with subsidy attached to the

units.

(c) If the project is formerly unsubsidized, the initial deter-

mination will be to recommend sale either:

(1) without subsidy, or

(2) with subsidy for any eligible tenant.

§ 290.25 Determination of need for low and moderate income

housing.

(a) There is a need for low and moderate income housing in

the market area served by the project which is under review

unless the Director finds: (1) there is sufficient decent, safe and

sanitary housing available in the market area at rents the present

eligible tenants can afford without exceeding 25 percent of in-

come, and (2) such housing is not needed for other persons

residing in or expected to reside in the community.

(b) Formerly subsidized projects and formerly unsubsidized

projects serving as a lower income housing resource, as deter-

mined pursuant to § 290.27(c), may not be sold without a sub-

sidy if there is a need for low and moderate income housing in

the community.

§ 290.27 General determination of subsidy to be provided.

(a) A formerly subsidized project shall be allocated subsidy

for the longest possible term of the subsidy contract, pursuant to

24 CFR 886, Subparts B or C.

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(b) A formerly subsidized project shall be allocated subsidy

pursuant to 24 CFR 886, Subparts B or C, sufficient to assist

100% of the units. Provided, however, that the Director may

recommend disposition for less than 100% of the units if the

Director makes a written finding that such a sale will promote a

racially mixed or mixed income tenancy and the amount of sub-

sidy provided is at least sufficient to assist all eligible tenants

residing in the project.

(c) A formerly unsubsidized project shall be allocated sub-

sidy under the following conditions:

(1) In a project which has become a lower income housing

resource, evidenced either by the income levels of the present

tenancy generally being at or below the eligibility criteria for

subsidy, or its inability to attract higher income tenants to fill

vacancies, subsidy pursuant to 24 CFR 886, Subparts B or C,

shall be allocated to a sufficient number of units to prevent

displacement of eligible tenants and to assure the financial

feasibility of the project after sale.

(2) In a project which does not meet the criteria of (c)(1)

above, subsidy in the form of Certificates of Family Participa-

tion pursuant to 24 CFR 882 shall be provided to any eligible te-

nant to permit him or her to remain in the unit in order to pre-

vent displacement. Limitations on subsidy rent levels will be

waived on a case-by-case basis when necessary to permit an

eligible tenant to remain in the project. Tenants may use the sub-

sidy as permitted under the Section 8 Existing Housing program

requirements to move to other housing.

(3) The Director may recommend the sale of a formerly un-

subsidized project with subsidy (i) to promote a mixed income

tenancy or a racially mixed tenancy outside of central cities or

(ii) to preserve that housing stock for occupancy by lower in-

come tenants.

§ 290.30 Disposition of vacant land.

The following procedure will be followed in disposing of all

vacant land:

(a) After acquiring title to vacant land, the Director shall

complete an appraisal of the fair market value of the land.

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(b) After the appraisal is completed, the Director shall send

a notice to Federal, State and local government agencies, in-

cluding housing and renewal agencies, which may have an in-

terest in acquiring the land. The notice shall include information

on the availability of the land for purchase and request a written

reply within 30 days as to whether or not the agency has any in-

terest in acquiring the land.

(c) If none of the Federal, State or local government agen-

cies notified above express interest in acquiring the vacant land,

the Director shall advertise the land for sale by competive bid.

§ 290.33 Initial notice and solicitation of comments.

(a) Within 60 days after HUD acquires title to a project, the

Director shall issue the following notices:

(1) A notice to each tenant in the project served in accord-

ance with § 290.33(c) which shall include:

(i) A statement that HUD has acquired title to the project,

that HUD intends to sell it, and, where applicable, that it may be

sold with Section 8 assistance for all eligible tenants;

(ii) An explanation of the disposition process, including a

statement that tenants will receive notice of the Director's

recommendation, will have access to it and will have an oppor-

tunity to submit comments to be reviewed by the Director;

(iii) Where applicable, a statement that sale of the project

with Section 8 assistance will not affect the right of any tenant to

continue in occupancy;

(iv) An invitation to submit proposals, comments and facts

to the Director within a certain time period, not less than 30

days, to be considered by the Director in making a disposition

recommendation, particularly expressions of interest in conver-

ting the project to a cooperative or other form of resident con-

trolled ownership; and

(v) An explanation of the displacement benefits which will

be available if eligible tenants are displaced by the disposition of

the project.

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(2) A notice to Federal, State and local government agen-

cies, including housing and renewal agencies, which may have

an interest in acquiring the project. The notice shall include in-

formation on the availability of the project for purchase and re-

quest a written reply within 30 days as to whether or not the

agency has any interest in acquiring the project.

(b) All comments received from tenants, agencies and the

public shall be reviewed by the Director and taken into con-

sideration in the disposition recommendation.

(c) All notices to project tenants shall be either personally

delivered or sent by first class mail. In addition, general notices

to all tenants shall be posted in the project office and in ap-

propriate conspicuous locations around the project.

§ 290.35 Preparation of disposition analysis.

(a) As soon as possible after the notice in § 290.33 has been

sent, the director shall prepare a disposition analysis to serve as

the basis for the Director's disposition recommendation.

(b) The disposition analysis shall include:

(1) A financial analysis of the project, including an analysis

of operating expenses and an appraisal of the fair market value

of the property.

(2) A physical analysis of the project, including the condi-

tion of the structure and the grounds, the need for rehabilitation

or repairs and the estimated costs of such work.

(3) An analysis of the probable causes of failure of the pro-

ject and the type of management and ownership expertise which

may be needed to operate the project successfully.

(4) An analysis of the feasibility of conversion to resident

controlled ownership inc!ading cooperative ownership. This

analysis should include consideration of the financial feasibility

of conversion including the ability of the present tenants to af-

ford it, the interest and support among the present tenants for

conversion, and the impact of conversion on neighborhood

preservation and revitalization.

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(S) Asummary of comments received from the tenants, the

public, the local Public Housing Agency and any other govern-

mental agencies regarding the disposition of the project.

(6) An assessment in accordance with HUD requirements

implementing the National Environmental Policy Act of 1969,

as amended, the National Historic Preservation Act (Pub. L.

89-665), the Archeological and Historic Preservation Act of

1974 (Pub. L. 93-291), and Executive Order 11593 on Protection

and Enhancement of the Cultural Environment, including the

procedures prescribed by the Advisory Council on Historic

Preservation in 36 CFR 800, and such other statutes that may

have an impact on the disposition of the project.

(7) As it affects disposition considerations for the project,

an analysis of local housing needs and conditions and actions

being taken to address these needs.

(8) Information on site suitability and accessibility to need-

ed services and employment.

(9) Appropriate demographic data on income ranges and

distribution of the minority population by census tract,

neighborhood, jurisdiction and SMSA in which the project is

located, the Section 8 Fair Market Rents for the area, the income

levels of present tenants, and consideration of the impact of

disposition on the racial composition of the neighborhood as

well as the neighborhoeds into which tenants might move after

displacement.

(10) An analysis of the need for and the feasibility of com-

bining units to create units suitable for large families.

§ 290.37 Director's disposition recommendation.

The Director shall review the disposition analysis and any

other relevant information and make a disposition recommen-

dation for the oroject which is consistent with the objectives set

out in § 290.zu.

(a) On the basis of the disposition analysis, tenant and

other comments and any other relevant information, the Direc-

tor shall make written recommendations on the following issues:

(1) The proposed disposition program;

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(2) The appropriateness of conversion to resident controlled

ownership;

(3) The appropriateness of creating units suitable for large

families;

(4) The type of management and ownership expertise re-

quired to operate the project successfully in light of the causes of

its failure;

(5) The proposed method of financing the recommended

disposition program, including the financing of any repairs

necessary to the successful operation of the project;

(b) Every disposition recommendation must include a deter-

mination of the number of tenants who will! be displaced as a

result of the recommended disposition and a description of the

relocation assistance to be provided, including a description of

how such assistance will be provided.

§ 290.40 Notice of disposition recommendation.

(a) No later than 15 days before the Director submits the

disposition recommendation to the Property Disposition Com-

mittee, the Director shall deliver a notice in accordance with §

290.33(c) to tenants in the project.

(b) The notice shall state briefly the Director's proposed

disposition recommendation summarizing the major facts sup-

porting the recommendation and shall include:

(1) An invitation for written comments to be sent to the

Director for 15 days from the date of the notice;

(2) A statement that the full disposition recommendation

and analysis and other supporting information will be available

for inspection and copying at the HUD field office and for in-

spection at the project office;

(3) A statement that the Property Disposition Committee

will be reviewing the Director's recommendation and any com-

ments submitted and will then make a decision to accept,

modify or return the Director's recommendation;

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(4) A statement that no action on disposition will take place

until the Committee approves a final disposition program;

(S) A statement of the eligibility requirements for displace-

ment benefits for any tenants who might be displaced and a

summary of the expenses which are reimbursable, the assistance

which HUD will provide in seeking replacement housing, and

the names, addresses and phone numbers of HUD-approved

counseling agencies; and

(c) A separate notice of anticipated displacement shall be

sent to each tenant who would be displaced if the Disposition

Recommendation were approved as submitted.

(d) Reasonable requests from tenants for a waiver of the

fees charged for copying under the provisions of 24 CFR 15.14

will be honored.

§ 290.41 Forwarding of disposition recommendation.

After the comment period, described above in § 290.40, the

Director shall forward the disposition recommendation to the

appropriate Property Disposition Committee with tenant com-

ments, a summary of those comments and any additional infor-

mation the Director considers relevant to the disposition

recommendation.

§ 290.43 Demolition.

HUD may permit the demolition of units or projects as part

of the disposition or management of a project, put demolition

shall be recommended only as a last resort.

(a) In making a disposition recommendation, the Director

may recommend a plan to demolish a project or part of a project

on the basis of one or more of the following criteria:

(1) The current and projected need for the housing is not

sufficient to obtain the level of occupancy required for feasible

project operation.

(2) There is major structural damage or serious physical

deterioration and it is not feasible to repair the project because

of engineering or design problems or because of excessive cost.

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Repairs which cost more than 85% of replacement cost ordinari-

ly will not be considered financially feasible.

(3) Conditions in the neighborhood surrounding the project

adversely affect the quality of the project environment to the

point where life, health or safety of project residents is threaten-

ed. Inaccessibility to facilities or services will not be a decisive

factor, unless it can be demonstrated that such inaccessibility

was the principal cause of the failure of the project.

(b) In every case, demolition may not proceed until suitable

displacement arrangements pursuant to § 290.47 have been

made.

(c) Whevever demolition is recommended as part of

disposition, the disposition recommendation must include a

specific analysis of:

(1) The extent to which the current use and the projected

use of the land after demolition are consistent with local,

regional and state land use and housing plans;

(2) Where there is a need in the community for low income

housing as defined pursuant to § 290.25, what is being done to

replace the units which are to be demolished;

(3) The probable short-term and long-term impacts of

demolition on the neighborhood and the community;

(4) The availability of suitable replacement housing for the

present tenants; and

(S) The estimated cost of displacement benefits as outlined

in § 290.47, excluding the cost of subsidy programs for which

the tenants may be eligible.

(d) Whenever demolition is recommended during HUD's

ownership of the project, the Director shall prepare written

documentation pursuant to paragraph (c) above of the facts and

reasons which formed the basis for the decision to recommend

demolition. The recommendation and supporting documenta-

tion shall be forwarded to the appropriate Property Disposition

Committee for approval.

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(e) Every demolition recommendation shall include the fin-

dings of an Environmental Assessment, and an Environmental

Impact Statement (EIS) where the Environmental Assessment

concludes thar an EIS is necessary.

§ 290.45 Notice of displacement.

(a) Within 30 days after the final disposition program is ap-

proved under § 290.50, HUD (or a Public Housing Authority,

where it is acquiring the project) shall provide each eligible te-

nant who will be displaced with a notice of displacement.

(b) Where HUD determines that the final disposition pro-

gram will displace an eligible tenant because the project is being

demolished or converted to other than residential use, that eligi-

ble tenant shall receive a notice advising the tenant that if he or

she moves from the project between the effective date of the

notice and a later date set by HUD (not sooner than 30 days

before the anticipated date of sale or conveyance) the tenant will

be entitled to displacement benefits as outlined in § 290.47. The

notice should describe the reimbusement process and provide

the name, address and phone number of the HUD official(s) who

will provide assistance in locating replacement housing.

§ 290.47 Displacement benefits.

(a) Tenants who are not eligible tenants pursuant to this

part will not receive displacement benefits unless otherwise pro-

vided by law. Where disposition is to a state agency which will

acquire a project with Federal financial assistance, as defined in

24 CFR 42.20, displacement benefits will be provided in accord-

ance with the provisions of 24 CFR 42.

(b) Whenever eligible tenants are displaced as a result of the

disposition or repair of a project, they shall be entitled to the

benefits set forth in this section. Where appropriate, these

benefits may be offered by HUD in the alternative. Eligible

tenants who move prior to approval of the final disposition pro-

gram shall be eligible for displacement benefits if they receive a

notice of anticipated displacement pursuant to § 290.40(c) and

they would have been displaced by the disposition program as

approved. Eligible tenants shall:

(1) Receive priority to occupy units in HUD-owned former-

42-A

ly subsidized projects at rental rates not to exceed 25 percent of

income. Where more than one suitable unit is available for oc-

cupancy, the Director may select the unit to be offered to the

tenant;

(2) Be afforded the opportunity to return to repaired units

in the same project whenever possible and be reimbursed for

moving expenses pursuant to paragraph (b); or

(3) Receive a priority for other Federal housing assistance

under the United States Housing Act of 1937, as amended.

(c) Eligible tenants shall be given assistance in locating

replacement housing and shall be reimbursed for moving ex-

penses not to exceed an amount determined by HUD to be

reasonable for the household size and circumstances of the

move.

(d) If an eligible tenant declines the assistance offered pur-

suant to paragraph (b) of this Section, soc tenant shall sti be

eligible to receive assistance afforded under paragraph (c), and

the provision of such assistance shall discharge HUD’s obliga-

tion to provide displacement benefits pursuant to this Part.

§ 290.50 Disposition program.

(a) The Property Disposition Committee will review the

Director's recommendation, the disposition analysis and any

other information submitted by the Director as well as all other

comments received and any other information it may require,

all of which shall become part of the administrative record.

After its review the Committee may approve the recommenda-

tion as submitted, modify it and return it approved as modified,

or return it for further work and resubmission.

(b) If the Committee approves the recommendation as sub-

mitted or as modified, it shall become the final disposition pro-

gram and the notice procedure in § 290.45 shall be implemented

by the Director upon written notification of the Committee

action.

(c) No final disposition program which provides for repairs

to be performed by the purchaser or other conditions of sale

may be approved unless it provides for rescission of the sale or

reconveyance of the project to HUD if the repairs, which are a

43-A

requirement of the sale, are not carried out in a timely manner,

or if the project is not operated in accordance with any other

conditions of the sale. This remedy is in addition to any escrow

of repair funds which may be required as a condition of sale or

any other remedy available to HUD.

§ 290.53 Methods of disposition.

Disposition shall be through a publicly advertised com-

petitive offering or a negotiated sale.

(a) Competitive offerings shall be by purchase proposals or

by competitive bid, as recommended by the Director.

(1) A purchase proposal is a solicited submission of a plan

to purchase and operate a project either without reference to

price or where the price of a project is fixed by HUD in advance.

sp Ae pacman we, mannan geen ads A penn 2. ma

HUD shall review the proposals considering, among other fac-

tors which the Director deems an; the acceptability of

the management and ; the probability of ade-

quate under the ; and the of the

HUD at a specific time and place. That Contenct chal tnctade

(4) All other competitive offerings shall be by competitive

(b) In selecting qualified purchasers for formerly subsidized

44-A

to HUD. HUD may establish review panels to select qualified

purchasers. Regardless of which disposition method is used, in

selecting a purchaser HUD shall be satisfied that sufficient levels

of competency have been met with respect to:

(1) ability to provide sound financial management;

(2) ability to provide sound physical management;

(3) ability to respond to the economic and social needs of

the tenarits and to work with resident organizations;

(4) responsiveness of the proposed ownership plan to the

needs of the tenants and the project;

(5) adequancy of the purchaser's organizational, staff and

financial resources to implement the proposed ownership

approach;

(6) ability to satisfy all the conditions of the disposition;

(7) any other criteria HUD determines are relevant if ad-

vance notice of such criteria is given to prospective purchasers.

(c) Negotiated Sales. (1) HUD may negotiate the sale of any

project to an agency of the Federal, State or local government.

(2) HUD may negotiate the sale of a formerly subsidized

multifamily housing project when HUD determines that such a

sale would beat meet the objectives of this Part. Such negotiated

sales may be recommended when:

(i) The purchaser is a nonprofit cooperative corporation

formed by the present or prospective tenants for the purpose of

holding title to the project;

(ii) The purchaser is a nonprofit or limited dividend entity

and it is determined by HUD to be the best source of ownership

in the locality capable of the successful long-term operation of

the project in a way which is responsive to all the HUD re-

quirements for operation of the project;

(iii) The project is to be converted to homeownership and

individual condominium or homeownership units are to be sold;

or

45-A

(iv) The purchaser is a nonprofit consumer cooperative cor-

poration with successfu! experience in the operation of nonprofit

housing.

(3) When an offer to purchase is received as part of a

negotiated sale, it shall be evaluated to assure that it complies

with all HUD requirements for the sale of the project. Particular

attention shall be paid to the financial feasibility of the proposed

ownership plan.

(4) When a sale is negotiated to a nonprofit cooperative cor-

poration or a nonprofit consumer cooperative corporation, the

sales price shall be computed by determining the value of the

project in one of the following ways:

(i) if the project is sold to lower income tenants without a

subsidy, the value shall be the amount which can be supported

by debt service payments equal to the rental income to the pro-

ject operated as a nonprofit cooperative with the tenants paying

25% of income for rent or the market rental rate, whichever is

lower, minus payments for all operating expenses, taxes and re-

quired reserves;

(ii) if the project is sold with Section 8 subsidies the value

shall be determined as in (i) except that the project rents set pur-

suant to Section 8 shall be used to determine rental income.

Where appropriate (as in a partially subsidized project), a com-

bination of the above methods may be used to determine price;

(iii) in all other cases, the value shall be the fair market

value as determined by HUD.

(iv) The prepaid expenses incurred in converting to

cooperative ownership may be recovered by deferring payment

on the mortgage and placing project rents into an escrow for the

purpose of paying those expenses or HUD may make such other

provision for payment as HUD determines are reasonable and

appropriate.

(d) Previous Participation Review. All purchasers of HUD-

owned projects must be approved under the Previous Participa-

tion Review and Clearance procedures in 24 CFR 200.210 et

seq., except Federai, State or local government agencies.

46-A

Federal Register / Vol. 44, No. 191 56615

Monday, October 1, 1979 / Rules and Regulations

§ 290.55 Property disposition committee.

(a) There shall be a Property Disposition Committee (PDC)

with authority to approve all dispositions of HUD-owned multi-

family housing projects.

(b) The PDC shall consist of the following officials or their

designees:

(1) The Chairperson shall be the Assistant Secretary for

Housing-Federal Housing Commissioner.

(2) The Deputy Assistant Secretary for Multifamily Hous-

ing Programs.

(3) The Director of the Office of Multifamily Housing

Management and Occupancy.

(4) The Director of the Office of Multifamily Housing

Development.

(5) The General Counsel.

(6) The Deputy Assistant Secretary for Public Housing and

Indian Programs.

(c) The PDC may delegate its authority to approve proper-

ty dispositions to PDC’s convened at the Regional or Area Of-

fice level on such terms and conditions as the PDC may

prescribe.

(d) The Director of the Office of Multifamily Financing and

Preservation shall serve as a non-voting member of the Property

Disposition Committee and shall be responsible for presenting

disposition recommendations to the Committee for its decision.

Issued at: Washington, D.C., August 28, 1979.

Lawrence B. Simons,

Assistant Secretary for Housing-Federal Housing Commission.

[FR Doc. 79-30306 Filed 9-28-79; 8:45 am]

Billing Code 4210-01-M

47-A

A-7

DEPARTMENT OF HOUSING AND URBAN

DEVELOPMENT

Washington, D.C. 20410

Office of the Assistant Secretary for

Housing-Federal Housing Commissioner

Oct 23 1979

Memorandum For: Everett Rothschild

Area Manager

HUD Area Office

Jacksonville, Florida 4.68

Subject: Mandalay Shores

Project No. 067-00016

Clearwater, Florida

This is in response to your memorandum of August 28,

1979, and our subsequent conversations with you and tenants

concerning the disposition of Mandalay Shores including possi-

ble sale to the tenants for conversion to homeownership.

As you are aware, HUD regulations at 24 CFR 290, Disposi-

tion of HUD-Owned Multifamily Projects, require that we con-

sider cooperative or condominium conversion in each disposi-

tion analysis.

In order to comply with these regulations, you should make

an analysis of the basic feasibility of such a conversion for Man-

dalay and you should provide a reasonable opportunity for a

bona fide tenants’ organization to present a proposal. In this

regard, you should assure yourself that there is a legitimate te-

nant organization and determine the number of tenants who are

being represented. Upon request, such an organization should

be provided with project operating expense information and the

architectural and engineering report. They should also be in-

formed that HUD will not entertain a proposal which con-

templates saie of the project for less than its “as-is” appraised

value and that the Department will not provide financing in the

sale; however, it will consider the feasibility of using a HUD

mortgage insurance program. I! you are unable to establish a

supportable, as-is value through the traditional appraisal pro-

48-A

cess, it may be necessary to put the project out for public bid to

determine its market value.

Once you establish the above, the tenant organization

should be given a period of 60 days to present a proposal for the

project including price, terms and method of ownership.

If an offer is received within the 60-day period, you should

review it and make a determination, after considering all fac-

tors, as to whether it is in HUD's best interest to sell the project

on that basis. Following that, you must provide your recom-

mendation as to final disposition of the project as provided for

in the regulations.

It is our understanding that the tenants are proposing a

nonprofit form of ownership which would preclude residents

from realizing any appreciated value on individual units,

thereby avoiding “windfall” profits after disposition. This, they

propose, would have the further benefit of keeping the housing

cost to future residents at the cost of debt service on the disposi-

tion financing plus any necessary increases in operating ex-

penses. Therefore, in reviewing a proposal from the tenants,

you should assure yourself that this restriction is included.

For your further guidance, it should be understood clearly

that the Department is under no obligation to sell to the tenants

nor have any representations been made to that end. The staff of

the Office of Multifamily Financing and Preservation will pro-

vide what assistance they can in pursuing this course of action.

We do expect that you will cooperate fully with the tenants in

exploring their proposal and consider as well the affect that your

disposition recommendation will have on the tenants.

Lawrence B. Simons

Assistant Secretary

49-A

A-8

DEPARTMENT OF HOUSING AND URBAN

DEVELOPMENT

Washington, D.C. 20410

Office of General Counsel

In Reply Refer to: GHM: DF: sm (202) 755-7107

Jan 12 1982

REGISTERED MAIL - RETURN RECEIPT REQUESTED

Ms. Ann Weseley

The First National Bank of Chicago

Worldwide Banking Department

International Trade Services Group

One First National Plaza

Chicago, Illinois 60670

Subject: Your Letter of Credit No.

FNBC 3402-00301654

Mandalay Shores

Project No. 067-00016

Dear Ms. Weseley:

Returned herewith is the above referenced letter of credit. We

previously returned this letter of credit to you by letter from

Robert P. Kalish dated December 10, 1981 (copy enclosed),

wherein we advised you that the Department has no contractual

relationship with Mandalay Shores Cooperattve Housing

Association, Inc. (MSCHA) which would provide a basis for the

issuance of this letter of credit.

Notwithstanding the fact that there is no contract between the

Department and MSCHA with respect to Mandalay Shores

Apartments and that we previously refused to accept delivery ot

the letter of credit you have again transmitted the letter of credit.

Furthermore, the Department is not negotiating a sale with

MSCHA. Rather the Department is currently involved in litiga-

tion with MSCHA and has a contract of sale of Mandalay

S0-A

Shores Apartments with a third party. Your unwarranted in-

sistence in tendering this letter of credit may prove prejudicial to

our interests in these matters. If so, we shall take whatever ac-

tion may be necessary to protect our interests.

Sincerely,

/s/ John A. Maxim, Jr.

Associate General Counsel for

Insured Housing and Finance

Enclosures

cc: Mr. F. J. Burr

Mandalay Shores Cooperative Housing Association

Clearwater, Florida

Dec 10 1981

REGISTERED MAIL

RETURN RECEIPT REQUESTED

The First National Bank of Chicago

Worldwide Banking Department

International Trade Services Group

Two First National Plaza

Chicago, Illinois 60670

Gentlemen:

Returned herewith is the irrevocable letter of credit FNBC:

3402-00301654, in the amount of $375,000, submitted on behalf

of Mandalay Shores Cooperative Housing Association, Inc.

(MSCHA), as a deposit on the purchase of Mandalay Shores

Apartments. This deposit cannot be accepted since HUD has no

contractural relationships with MSCHA.

Sincerely,

Robert P. Kalish, Director

Office of Multifamily

Financing and Preservation

51-A

HMFP Master ~=—Ss 6151.“ Mr. F. J. Burr

HMFP Hilman 6151 President

HMFP Chrono 6151 Mandalay Shores

Cooperative

HMF Kalish 6160 Housing Association, Inc.

HM DAS 6106 880 Mandalay Avenue, Apt.

325

HAA Corres. 9110 Clearwater, Florida 33515

GT Ratner 10258

GHM Kennedy 9228

ES Ex. Sec. 10000

SA Wilson 10000

4.6G Area Counsel Jacksonville, FL

HMEFP: Buchheit:tal 12-8-81

ONE FIRST NATIONAL PLAZA

FIRST CHICAGO Chicago, ILL 60670

The First National Bank of Chicago Writer's Direct Dial Number: (312) 732-5298

Law Department

Mr. F.J. Burr February 23, 1982

President

Mandalay Shores Cooperative Housing Association, Inc.

Apartment 325

880 Mandalay Avenue

Clearwater, Florida 33515

Re: Our Letter of Credit No. 301654 issued in favor of

U.S. Department of Housing and Urban Development

Dear Mr. Burr:

Enclosed is a letter received by The First National Bank of

Chicago from Mr. John A. Maxim, Jr., Associate General

Counsel, Department of Housing and Urban Development, in

connection with the above-referenced letter of credit. I have also

enclosed a copy of two previous letters received from the

Department of Housing and Urban Development, together with

a copy of the letter of credit and amendment issued by The First

National Bank of Chicago on behalf of Mandalay Shores |

Cooperative Housing Association, Inc.

As you can see from Mr. Maxim's letter, the Department of

Housing and Urban Development has refused to accept our let-

ter of credit and has returned the letter of credit and the amend-

52-A

ment to our Bank. The Department has requested that our Bank

take appropriate action to ensure that we do not forward to the

Department the letter of credit again.

In view of this correspondence we believe it is not appropriate

for our Bank to continue to resend the letter of credit to the

Department of Housing and Urban Development and we wish to

advise you that we do not intend to take any further action with

respect to the letter of credit. We suggest that your association

take whatever action it deems appropriate under the circum-

stances. ,

Very truly yours,

ER: James E. Roselle

es Senior Attorney

Dec 10 1981

REGISTERED MAIL

RETURN RECEIPT REQUESTED

The First National Bank of Chicago

Worldwide Banking Department

International Trade Services Group

Two First National Plaza

Chicago, Illinois 60670

Gentlemen:

Returned herewith is the irrevocable letter of credit FNBC:

3402-00301654, in the amount of $375,000, submitted on behalf

of Mandalay Shores Cooperative Housing Association, Inc.

(MSCHA), as a deposit on the purchase of Mandalay Shores

Apartments. This deposit cannot be accepted since HUD has no

contractural relationships with MSCHA.

Sincerely,

Robert P. Kalish, Director

Office of Multifamily

Financing and Preservation

TO

HAA

GT

GHM

ES

SA

4.6G

Master 6151

Hilman 6151

Chrono 6151

Kalish 6160

DAS 6106

Corres. 9110

Ratner 10258

Kennedy 9228

Ex. Sec. 10000

Wilson 10000

Area Counsel

12-8-81

HMFP: Buchheit:tal

53-A

Mr. F. J. Burr

President

Mandalay Shores

Cooperative

Housing Association, Inc.

880 Mandalay Avenue, Apt.

325

Clearwater, Florida 33515

Jacksonville. FL

54-A

A-9

MANDALAY SHORES APARTMENTS

Project No. 067-00016

Clearwater Beach, Florida

U.S. DEPARTMENT OF HOUSING AND URBAN

DEVELOPMENT

PROPERTY DISPOSITION PROGRAM

CONTRACT OF SALE AND PURCHASE

(ALL CASH)

Alfred Hoffman, Jr.

7211 N. Dale Mabry Highway, Suite 205

Tainpa, Florida 33614

THIS INDENTURE, executed by the Purchaser this 3rd day of

August 1981, by and between the SECRETARY OF HOUSING

AND URBAN DEVELOPMENT, hereinafter referred to as the

Seller, aind Alfred Hoffman, Jr., on behalf of Mandalay

Associates, a Corporation to be formed, hereinafter referred to

as the Puirchaser.

WITNESSETH:

1. Under the terms and conditions hereinafter set out, the Seller

agrees to sell and the Purchaser agrees to purchase the property

situated iin the City of Clearwater Beach, County of Pinellas,

State of Florida, and more particularly described on the attached

Exhibit “A”.

Subject to easements, restrictions and reservations of record.

Together with the appurtenances and all articles of personal pro-

perty ancj supplies owned by the Seller and used in connection

with the @peration of the property which may be located on the

premises at the time of closing.

2. The agreed purchase price of said property is $6,232,716.00 -

(Six million two (hundred thirty-two thousand seven hundred

sixteen aind 00/100 dollars), to be paid as foliows:

311,635.80 in cash, which the Purchaser

has deposited with the Seller

as evidence of good faith and

SS-A

to protect the Seller against

loss or damage in the

premises, receipt of which is

acknowledged hereby, and

5,921,080.20 additional cash to be paid at

closing.

In addition, the Purchaser assumes the obligation to pay all clos-

ing expenses including state or federal revenue, deed, or

documentary stamp taxes, recording fees and any legal or title

expense in connection with such continuation of or examination

of title as may be required by the Purchaser.

3. Taxes, ground rents, sewer and water charges, garbage

removal charges and all other operating expenses and operating

income shall be prorated between the Purchaser and the Seller as

of the close of business on the day this sale is closed, hereinafter

referred to as the cut-off date. Casualty and surety coverages

now carried by the Seller shall be cancelled as of the cut-off date.

4. All rents due and unpaid at the cut-off date shall be assigned

to the Purchaser and all rents due after the cut-off date which

have been collected by the Seller shall be paid over to the

Purchaser.

5. All real property taxes and like charges against the property,

including any improvement assessment installments (with in-

terest), sewer and water charges, garbage removal charges and

ground rents, due and payable on or before the cut-off date shall

be paid by the Seller. The Purchaser shall pay and bear the ex-

pense of all improvement assessment installments (including in-

terest) becoming due and payable after the cut-off date, and

shall pay all real property taxes and such like charges accruing

after the cut-off date.

EXHIBIT “A”

Situated in the City of Clearwater Beach, County of Pinellas,

State of Florida, and more particularly described as follows, to

wit:

Block 21 Mandalay Subdivision as recorded in Plat

Book 14, pages 32 to 35 inclusive of the public records of

Pinellas County, Florida: being more completely described

as follows:

S6-A

Beginning at the Northwest corner of Lot 6 Block 7 of said

Mandalay Subdivision; thence North 0 degrees 49 minutes

39 seconds East 610.12 feet to the Southwest corner of Lot 1

Block 52 of said Mandalay Subdivision; thence South 86

degrees 16 minutes 41 seconds East 135.37 feet along the

line between Blocks 21 and 52; thence along the

line of Block 21, along a curve to the left, Radius 80.0 feet,

Arc- 58.19 feet Chord- 56.89 feet bearing South 63 degrees

54 minutes 22 seconds East; thence along a curve to the

right, Radius 922.67 feet, Arc- 136.33 feet, Chord- 136.20

feet, bearing South 80 degrees 29 minutes 59 seconds East;

thence along a curve to the right, Radius- 261.50 feet, Arc-

352.90 teet, Chord- 326.79 feet, bearing South 37 degrees

36 minutes 01 seconds East; thence continue along a curve

to the right, Radius- 261.50 feet; Arc- 346.10 feet, Chord-

321.37 feet, bearing South 38 degrees 59 minutes 04

seconds West; thence along a curve to the right, Radius-

922.67 feet, Arc- 143.28 feet, Chord- 143.14 feet, bearing

South 81 degrees 21 minutes 13 seconds West; thence along

a curve to the left, Radius- 80.0 (eet, arc- 54.74 feet, Chord-

53.68 feet, bearing South 66 degrees 11 minutes 52 seconds

West to the Northeast corner of Lot 6 Block 7 of said Man-

dalay Subdivision; thence South 89 degrees 12 minutes 57

seconds West 135.88 feet along the line between Blocks 21

and 7 to the Northwest corner of said Lot 6 Block 7, and

point of beginning.

6. No representations are made by the Seller as to the physical

condition of the property to be conveyed, the number and oc-

cupancy of revenue producing units or any factor bearing upon

thereto, except that if such

this agreement of sale by sending written notice

Lb

2

5

4

4

ze

£

ag

the form customarily used in the jurisdiction in which the pro-

perty is located and in which the Seller warrants to defend title

to the property against the lawful claims of all persons claiming

by, from, through or under the grantor therein. Transfer of title

become effective midnight the date of

shall

8. The Seller agrees to accord the Purchaser the privilege of in-

specting such books, records, leases and title papers in his

re

desired by the Purchaser; and the Purchaser is to have a period

of three weeks from the date hereof (or such extension thereof as

jection, the Purchaser shall have the right to terminate this con-

tract and, in the event of such title defect, the Seller reserves the

from any and all claims of the Purchaser arising hereunder.

9. Time is of the essence oi this contract. The sale shall be closed

within 60 days following the execution hereof by the Seller at the

offices of the Seller, or at such other time and place as may be

agreed on by the parties in writing. Should the Purchaser fail or

in the manner herein specified, the earnest money deposited

herewith shall be retained as liquidated damages. Extensions of

time to close the sale are entirely within the Seller's discretion. If

granted, extensions will be for a maximum of 30 days each, and

on the following conditions:

a. Awritte. © ,aest for an extension of the 60 day period

must be rer ived by the Secretary before the expiration

of the 60 day period and must be accompanied by the

required additional deposit. The request must state the

reason for the Purchaser's inability to close the sale

within the initial 60 day period.

b. For each 30 day extension, an additional deposit of 2%

of the purchase price will be required.

58-A

c. For each 30 day extension, the entire additional deposit

will be an extension fee to be retained by the Seller and

will not be credited to the amount due at closing.

d. If the Purchaser closes prior to the expiration of an ex-

tension period, the prorated amount of the extension

fee, for the unused portion of the extension, will be

credited toward the amount due at closing.

e. Inthe event the Purchaser fails to close the sale prior to

the expiration of the last 30 day extension, the original

earnest money deposit and all additional money

deposits paid in connection with extensions shall be re-

tained as liquidated damages.

f. The granting of one or more 30 day extensions shall not

obligate the Seller to grant additional 30 day exter-

sions, and the Seller may declare a default for the Pur-

chaser’s failure to close the sale upon the expiration of

the original 60 day period or upon expiration of any ex-

tension thereof.

10. No Member of Congress or Delegate to Congress or Resident

Commissioner shall be admitted to any share or part of this con-

tract or to any benefit that may arise therefrom, but this provi-

sion shall not be construed to extend to this contract if made

with a corporation for its general benefit.

11. It is understood and agreed that the provisions of paragraphs

3, 4and 5, above, will not be consummated before the closing of

the sale, but that the same shall be held open for subsequent ad-

justment by a Collateral Agreement to be executed at closing by

the Seller and the Purchaser.

12. This contract shall be binding upon the parties hereto and

their respective heirs, executors, administrators, successors and

assigns, but shall not be assignable without the written consent

of the Seller. Any request for such consent shali be submitted in

writing and shall enumerate each person holding or to hold as

much as 10% interest in the proposed assignee. Seller will be

allowed 30 days in which to act upon any such request.

13. Purchaser must provide to the satisfaction of the Seller a per-

formance bond to assure completion of the rehabilitation in the

sum of $2,800,000.00 at closing.

59-A

14. Purchaser and Seller will execute a separate agreement at

closing wherein Purchaser agrees that in the event of reacquisi-

tion pursuant to the Deed restrictions, Purchaser will pay all

HUD's litigation costs and costs of the operation of the project

from sales closing to reacquisition.

15. See Appendix “A” attached hereto and made a part hereof.

IN WITNESS WHEREOF, the Purchaser has executed this in-

strument in triplicate the day and year first above written and

the Seller has executed this instrument in triplicate this 16th day

of October 1981.

WITNESS AS TO SELLER: SECRETARY OF HOUSING

AND URBAN

DEVELOPMENT

/s/ By_/s/

Robert P. Kalish, Director

Office of Multifamily

Financing and Preservation

/s/

WITNESS AS TO

PURCHASER:

/s/ /s/

Purchaser

Alfred Hoffman, Jr.

/s/ August 3, 1981

HUD-9654 February 1972

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

PROPERTY DISPOSITION PROGRAM

In determining the acceptability of bidders Department of Housing and Urban Development

is concerned with the experience and ability of the individuals comprising the ownership to

provide management and operation of an acceptable order. For this reason HUD will not

knowingly accept the bid of those whose background or experience would indicate other than

a reputation for sound and irreproachable business practices, nor will HUD knowingly accept

a bid when there is indication of an intent by those submitting the bid to substitute others

either known or unknown. The following affidavit is required.

AFFIDAVIT OF OWNERSHIP

Personally appeared this day before me, a Notary Public in and for State of Florida, County

of Hillsborough the 14th day of September, 1981

Alfred Hoffman, Jr., on behalf of Mandalay Associates, a Limited Partnership to be formed.

well known by me and known by me to be the affiant(s) subscribing hereto. First being duly

sworn by me affiant(s) stated that (1) this affidavit is given for the purpose of obtaining

consideration by Department of Housing and Urban Development of a bid for the purchase of

certain real property publicly offered by HUD, (2) said bid is executed by affiant(s) as the duly

authorized representative(s) of the proposed owners, (3) the bid is made exclusively in behalf

of the proposed owners named hereinafter and without the present contemplation of

substitution, and (4) the proposed ownership will be as follows:

Portion to be owned (if corporation, give Owners Will Be (Give full name

number of shares or percentage of total) and address)

24.5% Alfred Hoffman, Jr. - Limited Partner

7211 N. Dale Mabry Highway

Suite 205

Tampa, Florida 33614

35.5% Charles Rutenberg - General Partner

2900 U.S. Highway 19 North

Clearwater, Florida 33515

40.0% Richard Segal - General Partner

11340 Olympic Boulevard

Suite 222

Los Angeles, California 90064

Alfred Hoffman, Jr. Affiant

_Affiant

Affiant

WITNESS my hand and seal this 14th day of September 1981.

Carol Schwartz

Notary Public, State of Florida at Large

My Commission Expires Aug. 6, 1983

Bonded by American Fire &

Casualty Company

Replaces Form FHA-1216, which is obsolete HUD-9654

enna be ve

61-A

HUD-9654 February 1972

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

PROPERTY DISPOSITION PROGRAM

termining the acceptability of bidders Department of Housing and Urban Development

rned with the experience and ability of the individuals comprising the ownership to

management and operation cf an acceptable order. For this reason HUD will not

accept the bid of those whose background or experience would indicate other than

for sound and irreproachable business practices, nor will HUD knowingly accept

ere is indication of an intent by those submitting the bid to substitute others,

unknown. The following affidavit is required.

AFFIDAVIT OF OWNERSHIP

Personally appeared\his day before me, a Notary Public in and for State of Frida, County

of Hillsborough the 3M day of August, 1981

Alfred Hoffman, Jr\.on behalf of Mandalay Associates, a Corporation to be formed.

well known by me and kngwn by me to be the affiant(s) subscribing hereto. First being duly

sworn by me affiant(s) stated that (1) this affidavit is given for the purpose of obtaining

consideration by Department ef Housing and Urbayf Development of a bid for the purchase of

certain real property publicly offered by MUD, (2)said bid is executed by affiant(s) as the duly

authorized representative(s) of tha proposed owners, (3) the bid is made exclusively in behalf

a bid when

either known

of the proposed owners named héfe and without the present contemplation of

substitution, and (4) the proposed oWg post be as follows:

Portion to be owned (if corporation, giv Owner(s) Will Be (Give full name

number of shares or percentage of total) and address)

27.3% Alfred Hoffman, Jr.

: . Dale Mabry Highway

ite 205

Tampa, Florida B3614

32.7% Charles Rutenberg

2900 U.SNHighway 19 North

Clearwater Florida 33515

40.0%/ Richard Segal

f 11340 Olympic Baulevard

‘ Suite 222

Los Angeles, California 90064

Alfred Hoffman, Jr.

Affiant

\___Affiant

Affiant

WITNESS my hand and seal this 3rd day of August 1981.

Carol Schwartz \

Notary Public, State of Florida at Lag

My Commission Expires Aug. 6, 1983

Bonded by American Fire &

Casualty Company

Replaces Form FHA-1216, which is obsolete HUD-9654

~~

62-A

A-10

FIRST CHICAGO

First National Bank of Chicago

International Trade Services Group

Suite 0236

Chicago, Illinois 60670 U.S.A.

Cable Address NATIONAL CHICAGO Telex number: 2-53801

Date: November 27, 1981

Duplicate Original

Mail

All Drafts Drawn Must Be Marked:

FNBC: 3402-00301654

Opener’s Reference No: 301654

Samuel R. Pierce, Jr.,

As Secretary of U. S. Department of

Housing and Urban Development or

His Successor in Office

Gentlemen:

By the order of:

Mandalay Shores Cooperative

Housing Association, Inc., DIP

(MSCHA)

880 Mandalay Ave.

Clearwater, FL 33515

We hereby issue in your favor our irrevocable credit for the ac-

count of MSCHA for an amount or amounts not to exceed in the

aggregate US dollars 375,000.00 (three hundred seventy five

thousand and no/100 US dollars) available by your drafts at

sight on the First National Bank of Chicago, Chicago, IL.

U.S.A. effective November 27, 1981 and expiring at our office

on February 8, 1982.

Funds under this credit are available against your draftis)

mentioning our credit number as it appears above.

63-A

The below-mentioned documents must be presented at sight

on or before the expiry date on this instrument in accordance

with the terms and conditions of this letter of credit.

Beneficiary’s signed statement certifying that, “all proceeds of

the draft will be used toward the purchase of the Mandalay

Shores Apartments, FHA Project No. 067-00016, situated on

Clearwater Beach, Florida, Pinellas County, tegether with the

appurtenances thereto belonging and the personal property

therein contained which is owned by the Secretary of HUD, all

pursuant to MSCHA offer of $7,500,000.00 “as is” and title to be

conveyed by warranty deed in form customarily used in the

County of Pinellas, State of Florida, showing Mandalay Shores

Cooperative Housing Association, Inc., as the Grantee.”

We engage with you that drafts drawn under and in conformity

with the terms of this credit will be duly honored on presenta-

tion if presented on or before the expiry date. The original letter

of credit must accompany the documents required under this

credit.

The credit is subject to the uniform customs and practice for

documeniary credits (1974 revision), International Chamber of

Commerce-Publication 290.

Please address all correspondence regarding this Letter of

Credit to the attention of our WBD Letter of Credit, Interna-

tional Trade Services, mentioning our reference number as it ap-

pears above.

Very truly yours

The First National Bank of

Chicago

/s/

Authorized Signature

64-A

A-11

MANDALAY SHORES COOPERATIVE

HOUSING ASSOCIATION, INC.

880 Mandalay Avenue

Clearwater Beach, Florida 33515

OFFER TO PURCHASE

August 10, 1979

Secretary of Housing and Urban Development

of the United States

Att: J. C. Coile, Assistant Area Manager,

Jacksonville, Florida

By Hand Delivery

Dear Mr. Coile:

Pursuant to our many conversations, on behalf of the Mandalay

Shores Cooperative Housing Association, Inc. (a not for profit

Florida Corporation) we hereby offer to purchase from HUD the

property situated at 880 Mandalay Avenue, Clearwater, Florida

otherwise known as Mandalay Shores Apartments, F. H. A.

project number 067-00016 which property is presently held and

owned by the Secretary of Housing and Urban Development in

fee simple title together with all of the inventory of the personal

property as contained in the inventory records found in the

Federal Court files in Tampa, Florida. A copy of which inven-

tory is hereto attached as Exhibit #1.

We also attach hereto a copy of the deed conveying the property

from the Zenith Industries Co. to the Secretary of Housing and

Urban Development dated Mar. 1, 1977 recorded document

#77030761 official records Pinellas County, Florida and as an

additional exhibit a copy of the Chicago Title and Trust Com-

pany policy showing a value at the time of conveyance to HUD

of Seven Million One Hundred Sixty One Thousand, Nine Hun-

dred Thirty Six Dollars and Thirty Seven Cents ($7,161,936.37).

The aforementioned not-for-profit organization was formed and

a permanent slate of directors and officers were elected and in-

stalled on August 7, 1979.

The purpose of forming this not-for-profit Cooperative Housing

Corporation was to exercise the congressional priority granted

to residents of HUD held or HUD insured properties to acquire

~ tame ner eee ee memes ae

65-A

the title to said property under the National Housing Act. We

hereby exercise all of those rights. Attached hereto as Exhibit #3

's a set of copies of the petitions which were subscribed to by ap-

proximately 308 permanent residents of Mandalay Shores

Apartments.

The priorities of acquisition available to residents of Mandalay

Shores was exercised by virtue of the formation of the not-for-

profit corporation and the preparation and submission of this

proposal. By virtue of this proposal HUD is required to accept

this offer as tendered within thirty days from the date hereof or

in the event said proposal is rejected, to state with particularity

the reasons for its rejection.

The attached exhibits are for the purpose of demonstrating to

HUD that 1. We know that the property was obtained by HUD

for $7,161,936.37. 2. We represent to HUD that we have posses-

sion of two independent MAI appraisals of subject property

which reflect a property valuation of $6,100,000.00 up to

$7,770,500.00. The variation being due to differences in existing

and proposed mortgages at different rates of interest.

We offer to pay HUD a price of Seven Million Five Hundred

Thousand Dollars ($7,500,000.) for the real and personal prop-

erty herein above described. This offer is subject to the following

terms and conditions:

A. That the property be rehabilitated, renovated and

restored to a suitable usable condition, especially re-

quiring the replacements and repairs as are hereinafter

set forth.

B. That this offer is subject to our obtaining mortgage

financing inclusive of 95% the purchase price and

100% of the cost of said rehabilitation, repairs and

replacements. Mortgage to be HUD held or FHA

insured.

C. That the term of said mortgage shall not be less than

forty (40) years and that the maximum debt service

payments including mortgage insurance premium,

reserve for replacements, shall not exceed Forty Thou-

sand Dollars ($40,000.00) per month aggregating Four

Hundred and Eighty Thousand Dollars ($480,000.00)

66-A

per annum. That in the event that said debt service

payments do not fully cover amortization required

under the mortgage of principle and interest, that any

unpaid amount of said interest and/or principle would

be payable at maturity date of the note forty years

hence as a balloon payment.

D. That if in the event that HUD elects to hold said mor-

tgage as a HUD held mortgage, then the standard

regulatory agreement shall be executed by the under-

signed corporation. All mortgage instruments and

security agreements to be executed by said corporation

acting by and through its designated officials. In the

event that HUD prefers to issue its FHA mortgage in-

surance that said mortgage may be placed with

recognized FGA mortgage underwriter who will then

service said loan such as but not limited to Dovenmuhl

Inc. in Chicago who would then be servicing said mor-

tgage and be responsible to HUD for the prompt remit-

tance of all payments made thereon.

This corporation knows that the maximum rents set and

allowable by HUD on said property (as to the apartments) are

One Million Two Hundred Eighty Four Thousand Dollars

($1,284,000.00) not including carports, garages, rents on beauty

parlor and restaurant and washing machine income. That any

increase in said rents were not authorized by HUD and if the

debt service expressed above were to be increased to any level

higher than Forty Thousand Dollars ($40,000.00) per month in-

cluding the replacement reserves and mortgage insurance, it

would tend to create an inflationary spiral to the detriment of

the residents of Mandalay Shore Apartments.

This would be contrary to the National policy of HUD and con-

trary to the best interests of the citizens of the United States and

of this building.

With reference to rehabilitation of the subject property, as

residents thereof, we have knowledge that from the date that

this property was erected as a retirement multi-family dwelling

complex under an FHA insurance committment and subsequent-

ly placed into the hands of HUD as a title holder, there have

been no substantial repairs, replacements or rehabilitation.

as

—

67-A

The carpeting on all of said twelve floors is largely and basically

the original carpeting about sixteen years old which has been

patched in various places with various colors and with various

colors of mystic cloth tape or colored tape. We also know that

none of the hallways in any of the structure have been

redecorated from the day the building was built. We also know

that when various leaks sprung in the various areas of the apart-

ments it was HUD's policy to break a hall wall open to repair the

pipe by placing a clamp on the leak rather than to replace the

pipe. Then the hole in the wall was allowed to remain open and

was covered in various ways with plastic film or a piece of

aluminum. The tenth floor has had horizontal pipes replaced

some years ago but the elbow joints were never properly replac-

ed and have leaked ever since. The ceiling on the 10th floor had

to be broken dewn completely to gain access to the pipes. The

ceiling was replaced with a suspended ceiling with accoustical

wall board but having failed to repair the roof before replacing

said ceiling the roof leaked and the pipes leaked and the ceiling

was destroyed. That ceiling has never yet been replaced.

The exterior of the building has never been steam cleaned or

painted since it was erected. The roof has never been scraped

and restored, and should be replaced.

About 3 years ago the exterior of the building at the South end

lost a large section of the stucco. Said hole has never been

replaced or restored by HUD and during the tenure of the

receivership and thereafter, HUD had obtained a bid to restore

the stucco but elected not to spend the money. It is an eye sore

and a blight to the neighborhood, which has caused many com-

plaints to be registered with the residents but is a matter beyond

our control.

Most of the pipes vertical runs throughout the building need to

be replaced with copper piping. To the extent that this can be

done without great inconvenience to the residents it is the plan

of this corporation to have a contractor prepare a proposs!

showing how best these pipes can be replaced to eliminate fur-

ther leaking and improve the condition of the property.

The airconditioning system at Mandalay Shores was installed by

the Carrier Corp. when the building was erected. It is a chilled

water cooling system containing approximately 750 tons of air

conditioning capacity. The cooling tower on the roof has long

68-A

outlived its usefulness. The tubing is corroded beyond hope.

The water cooling tower needs to be restored together with the

squirrel cages and air handlers to modernize what is now con-

sidered to be an obsolete water tower cooling system. It is the

plan of this corporation to require that the Carrier Corporation

make a comprehensive bid to the Corporation, acting by and

through its architect, to provide a restored cooling system to the

building and to maintain the air cooling system on a regular

basis as the responsibility of the Carrier Corporation in order to

provide a more healthy and beneficial living condition for all of

the residents of the property, many of whom are elderly and suf-

fering from lung and/or heart conditions.

It is also important that every apartment in the building should

be completely redecorated. The walls which have cracked and

are discolored should be completely painted. The balconies need

tuck pointing and repainting. The electrical fixtures in the

hallways should all be replaced with fluorescent low cost electric

lights in lieu of the incandescent fixtures which burn twenty-four

hours a day and have been a terrible waste of electrical energy.

The water meter installed in the building is oversized and money

has been wasted for sixteen years to the City of Clearwater for

water which is returned to the Gulf of Mexico for which we are

paying a sewage charge which is completely out of line and that

meter needs to be replaced with one of proper size to create fur-

ther economy. The electric panel system is the property of the

Florida Power Corporation. It has been rented to this building

each year for increasingly higher amounts. That lease agreement

should be terminated promptly to reduce our expense and the

power company should be required to provide the electricity as

they do to all other residential customers of the Public Service

Company. The auxilliary electric system in the building is not

adequate to provide for auxilliary electrical requirements and

does not function in both ends of the building and sometimes

not even in the center section. Many of the plumbing fixtures

throughout the building have become corroded over sixteen

years and cannot be repaired because they are obsolete and

should be replaced with modern fittings.

All of these items are to be evaluated by structural engineers, by

architects and bids should be let to determine what the cost of

said rehabilitation will amount to. When these costs are fully

known, these figures must be incorporated as aforesaid in the

total mortgage financing figure.

69-A

Attached to this offer is our Bank Cashier's check payable to the

Secretary of Housing and Urban Development in the amount of

One Hundred Thousand Dollars ($100,000.00). If this offer is

accepted as set forth herein, said $100,000.00 shall be part of the

purchase price, otherwise said check shall be returned to us

instanter.

We trust that HUD will accept this priority offer and we believe

that this sale could be closed sixty days after notice of accep-

tance on the condition that aforesaid mortgage financing and the

estimated cost of necessary repairs as hereinabove described

have been obtained, and that HUD has delivered to us satisfac-

tory evidence of good marketable lien free title in the form of a

commitment for title insurance in the amount of Nine Million

Five Hundred Thousand Dollars ($9,500,000) (for which the title

insurer generally makes no charge).

Please advise us promptly of your acceptance of this offer so

that rehabilitation costs can be investigated and determined.

Yours very truly,

Mandalay Shores Cooperative

Housing Association, Inc.

By: F. J. Burr, President

Attest Corporate Seal

(Not-for-Profit)

Daniel E. Mann, Secretary-Treasurer

Encl.

FIB:hn

70-A

UNITED STATES BANKRUPTCY COURT

MIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

In the Matter of:

MANDALAY SHORES COOPERATIVE Case No. 81-547

HOUSING ASSOCIATION, INC...

Debtor.

AFFIDAVIT

STATE OF FLORIDA:

COUNTY OF PINELLAS:

Betore me, the undersigned authority, personally appeared

F. ]. Burr who after being first duly sworn deposes and says:

1. That he is the President of Mandalay Shores

Cooperative Housing Association, Inc., (a Florida Not for Profit

Corporation) (hereinafter referred to as MSCHA.)

2. That he has been actively engaged in negotiations with

HUD for the acquisition of Mandalay Shores Apartments since

August 10, 1979.

3. That he hand delivered MSCHA’s $7,500,000.00 offer to

purchase Mandalay Shores Apartments to HUD officials in

Washington on August 20, 1979 with $100,000 cashier's check

attached.

4. That subsequently said offer was amended to conform

to HUD’s requirements on July 11, 1980 and confirmed in

writing on September 8, 1980, and August 6, 1981.

5. That MSCHA's amended offer was sent on August 6,

1981 by Certified Mail and was received by HUD.

6. That HUD acknowledged receipt of such $7,500,000 of-

fer and among other things claimed that the offer was not

“Responsive.”

7. That MSCHA requested that HUD should reject all bids

opened on August 5, 1981 because they were too low and did

not protect the interests of the United States or the interests of

the General Insurance Fund.

71-A

8. That in order to make MSCHA’s amended $7,500,000

in the amount of $375,000 in favor of the Secretary of HUD

toward the purchase of Mandalay Shores Apartments for

$7,500,000 as per MSCHA's offer (copy of resolution attached

hereto.)

9. That the terms of sale require that 5% of the purchase

price must be submitted as earnest money with such offers; in

this case $375,000 equals 5% of $7,500,000.

10. That on Saturday, November 14, 1981 the Affiant met

with Congressman Bil! McCullom who publicly promised to

schedule a meeting for the Affiant and Lillian Rauh, a director of

MSCHA, with a top HUD official for the week of November 16,

1981 at HUD in Washington, DC to discuss the

possibility of settling pending issues, including the prompt

removal of deadly asbestos from Mandalay Shores Apartments.

11. That in these negotiations, it is deemed crucial to a

showing of good faith that the issuance of the $375,000 Bank

Letter of Credit be authorized by the Court and that such Order

be entered and hand delivered to the appropriate HUD official at

the impending meeting.

12. This affidavit is made in support of the Debtor's Ap-

of October 3, 1981 for Emergency Order Approving

the Issuance of Bank Letter of Credit payable to the Secretary of

HUD towards the purchase of Mandalay Shores Apartments as

per offer to pay $7,500,000 and for traveling expenses to meet

with HUD in Washington, DC. The statements hereincontained

are on personal knowledge, except as to those matters which are

on information and belief and as to those matters the Affiant

believes them to be true. The Affiant is competent to testify in

the premises. Further, Affiant sayeth not.

F. J. Burr

Sworn to and Subscribed before me

this 16th day of November, 1981.

Notary Public State of Florida At Large

My Commission Expires Aug 19, 1985

Renee Riolo My Commission Expires:

Notary Public

72-A

Mandalay Shores Cooperative

Housing Association, Inc.

A Non Profit Corporation

880 Mandalay Avenue

Clearwater, Florida 33515

(813) 446-0503

EXCERPT OF MINUTES OF EMERGENCY MEETING

OF THE BOARD OF DIRECTORS OF MANDALAY

SHORES COOPERATIVE HOUSING ASSOCIATION

INC., DIP, HELD AT 10:00 AM ON SEPTEMBER

24, 1981 AT THE OFFICES OF THE CORPORATION

The following Resolution was passed unanimously by a quorum

of the Directors present and voting at the above referenced

meeting.

RESOLVED:

That the officers of this corporation be and they are hereby

authorized to do all things necessary and required so to imple-

ment the intent and purposes of the Motion which carried, in-

cluding but not limited, to cause the First National Bank Of

Chicago to issue its irrevocable commercial bank letter of credit

in the amount of $375,000 payable to Samuel R. Pierce, Jr., as

Secretary of the U.S. Department of Housing and Urban

Development, or his su~essor in office, on which the Secretary

of HUD may draw a draft for the full amount as part payment of

the purchase price of $7,500,000 “as-is” for the multifamily

housing project known as Mandalay Shores Apartments, FHA

Project No. 067-00016, together with the appurtenances thereto

belonging and all personal property therein contained belonging

to the Secretary of HUD. Title to said property to be conveyed

to Mandalay Shores Cooperative Housing Association, Inc., by

warranty deed in the form customarily used in the County of

Pinellas, State of Florida. The property is legally described on

Exhibit “A” hereto attached. All actions of the President, Vice

President and Secretary-Treasurer, being F.J. Burr, Floyd J.

Connors and Daniel E. Mann to carry out this Resolution are

hereby authorized and ratified in their respective capacities. The

bank may hold as collateral to the credit an equal sum on

deposit in Certificate of Deposit now held in safe keeping by the

Bank.

I HEREBY CERTIFY that the foregoing is a true and accurate

copy of the Resolution adopted by this corporation on the date

and at the time first above stated. This instrument is dated Oc-

tober 1, 1981.

Daniel E. Mann, Secretary

EDITOR'S NOTE

PAGES 73Athru- 746A WERE POOR

HARD COPY AT THE TINE OF FILMLNG.

IF AND WHEN A BETTER COPY CAN BE

OBTAINED, A NEW FICHE WILL BE

ISSUED.

73-A

A-12.

U.S. Department of Housing and Urban Development

Office of Housing

oN

Ww

Mandalay Shores For Sale by Public Offering

Apartments U. S. Department of Housing and Urban Development invites bids

for this project to be tendered in the manner indicated. Ali bids

are net to HUD. Bidding instructions must be obtained from

HUD. To qualify for consideration each bid on its face shall be

at 880 Mendelay Avenue, Clearwater, Fioride firm, unconditional, responsive, fixed in one amount certain and

fronting the Gulf of Mexico. Good access to downtown Not in the alternative

shopping at Cleerweter Beach and the City of Clearwater

' Minimum price No Stated Minimum

Local bus transportation eveiiable within welking distance.

Terms All cash net to HUD

Note: A recent law suit against the Department, Required deposit with bid 5% of price bid

Mandalay Shores Cooperative Housing Assoc:

ation, Inc. v. Moon Landrieu, et a!., has been Sealed bids will be received in Room 6151 and publicly opened

dismissed in Roam 9204 at 11 00 a. m. local time on August 5, 1981

Otfice of Multifamily Financing and Preservation,

U.S. Department of Housing and Urban Development,

451 Seventh Street, S. W., Washington, 0. C

Note: No consideration will be given to @ bid submitted by any bidder

currently suspended or debarred from participating in HUD programs.

ect Information

2

74-A

ndaliay Shores Apertments, located at 880 Mandalay Avenue,

larweter, Floride, consists of # 12<4tory elevator building with

story interconnecting wings on each side, containing a total of

5 units. The complex aiso inciudes five commercial speces,

underground parking and carports, an olympic size heated swimming

Pool and a concrete pier extending into the Gulf of Mexico. it was con

structed in 1963 and acquired by HUD on March 1, 1977.

nstruction

Utilities

Tenant Services

Public water supply, electricity,

Cold weter, refuse removal,

ndation Concrete sanitary and storm sewers customary maintenance,

Walls Concrete Block w/Stucco Finish Gas avaiable metered laundry facilities,

rs Viny! Asbestos & Carpet On-site parking, swimming pool.

fing Quilt-up recreational facilities and master

; TV antenna

ing Ovese! Fue!

CONditioning individual - Electric Chriiter System Paving: Macadam streets and Cou t: Ranges and

n. Hot Water Drese! Fue! Borler Parking lot; concrete curbs retrigerators

ment Partial and sidewalks

rrent Rentais Approximate Expenses

“

hese Type Monthty reve 1980 Real Estate Taxes: $154,366.10

23 ett $194

81 16R -.$265.75 - $293.75 Estimated annual cost of operation, maintenance and taxes $1,946 866.

62 28R $335 - $399.75

— 7 t , wet d sewer $400.

§ commercial on ie $260, 1@ $330.75 -3 : Approximate monthiy refuse removal, water an

26 Underground Spaces $650

86 Carport Spaces $1290

33 annual rent roll $1,255,524 (1)

supancy Percentage

—

Jan. Feb. Mar. Apr May June July Aug. Sept Oct. Nov. Oec

— 85 a4 84 82 82 81 80 80 80

LZ 80 80 80

$ Project has not been rented to /ts fullest capacity because of the

cipated rehabilitation.

The current gross annual apartment rent rol! iexcluding commercial

speces and parking) is $1.224.915.

me from metered laundry facilities is approximately $600 per month

th leases; ¢ cra! leases

residentia! tenants are on month-to

annual.

ect books and records, plans and specifications, and a complete

breakdown wii! be avaiiabie | «= nspection by prosnective

Jers at the project site

Due to the physical condition of the project and the shortage of rental

housing in the area, the following special provisions apply to this sale

1. The purchaser must rehabilitate the project. and remove/or contain

the asbestos, in a manner acceptable to HUD. The Area Office wil!

Prowde detailed plans and specifications at the project site and the

Area Office. The purchaser will be required to pay al! temporary

relocation costs during the rehabilitation.

2. During the rehabilitation and for a period of 20 years after com-

pletion of repairs to the entire project, the purchaser must main-

tarn all units in the project availiable for rental and may not mar-

ket them for any other purpose without the prior written approval

of the Secretary. The Owner shail give tenants written notice 30

days in advance of any request to approve a change in use and pro-

vide the opportunity. for tenants to present written comments.

3. The purchaser may not raise rents during the rehabilitation

Period covered by item 2. Thereafter, rents could be raised

to market levels.

4. All bidders, with their bid, mus? provide written documentation

to demonstrate the capability of financing not only the purchase

Price, but also the rehabilitation and potential deficit operation

Guring the rehabilitation period.

5. The purchaser will be required to provide a performance bond

at closing in the amount of $2,800,000 to assure completion of

the rehabilitation.

6. The purchaser must agree that, in the event the agroament with

HUD is violated, title to the project will revert to HUD with the

Purchaser bearing ali costs associated with that action and the

operation of the project trom the date of sales closing until

HUD reacquired title.

75-A

Purchaser will be required to accept the property without werranty

43 to physical condition.

Title to all equipment and chattels owned and used by the Secretary

in the operation of the property wil! pass to the purchaser, but with-

Out warranty as to precise count and condition. Rehabilitation of

the property is a condition of sale.

HUD or HUD's agents will conduct periodic inspections after sales

closing to insure completion of rehabilitation in a satisfactory

manner.

While care has been exercised to assure accuracy, al! information pro-

vided ts solely for the purpose of permitting parties to determine

whether or not the property is of such type and general character as

rraght interest them in its purchase, and HUD makes no warranty as

to the eecurecy of such information. Those interested are expected

to acq ives with the property, and to arrive at the: own

conctusions as to physical condition, number and occupancy of

revenue producing units. estimates of operating costs, and any

factors bearing upon valuation of the property

Deposit with Bid. Bids must be accompamed by money order, cert:-

tied, castwer’s or other banker's check to U.S. Department of Hous-

ing and Urban Development for not less than the required deposit. to

be applied on the purchase or returned if the bid is rejected.

The earnest money deposit required with bid will also be heid on the

second high bidder unt! the high bid 1s cleared by the Multifamily

Participation and Rewew Committee and determined to be accept-

" able. If the high bid is not accepted, the earnest money will be re-

funded and the second high bid will be processed for acceptance

A financial organization submitting a bid on its Own behalf must have

the earnest money deposit with bid drawn on another independent

financial organization.

Terms of Sale. The purchaser must provide for payment of the full

purchase price in cash. The sales contract, used as the bed form, is

binding on acceptance by the Secretary and requires closing within

60 days. The mht is reserved to reject any or all bids and to waive

nt informality in any bid

The Deed executed at closing will profibit discrimination in renting

to Secrron 8 Certificate holders as set forth in the Contract of Sale

and Purchase.

Prospective bidders are urged and invited to inepect the property.

inspections may be arranged Monday through Friday, between 9:00

A.M. and 4:00 P.M. local time by contacting e:ther of the following:

Proyect Manager HUO Aree Office

Frank A. Hethawey Everett 4. Rothschild, Area Mgr.

601 N. Primrose Drive Peninsuls Plazes

Oriando, Florida 32803

Onsite Manager :

Ms. Jean Burton

Telephone: (813) 446-9677

661 Riverside Avenue

Jacksonville, Florida 32204

Attention: Donaid Hunt

Tetephone: (904) 791-2812

Bidding instructions may be obtained by mailing the form below.

HUD

| am interested in submitting a bid on this property. Please send a Bidder's Kit and

instructions for submitting a bid. My address is listed below. | understand that my

request must be received by June 8, 1981, in order to allow twme for delivery.

(pisase print or type)

name

address

city srste zp code

thank you

Mandalay Shores Apartments, Clearweter, Fioride

Project No. 067 00016

76-A

BPUO|y ‘JOJENUBB/D

sjuewpedy seious Aejepuey

Pig 0} UORBYAU] PUB sNyedsolg

\r

é

Department of Housing

Urben Devetopment

ington, D.C. 20410

20! Buseness

aity tor Prvaie Use. $300

ee ey ee ee

ieee eee eee eee eee ee eee eee eee eee eee eee eee eee ee eee ee eee eee eee eee eee eee 2 ee)

Or a eee EM CCS an

US. Department of Housing and Urben Development

Office of Housng

Multifamily Finenceng and Preservation

Room 6155

Washington, 0.C. 20410

77-A

Al3

Project No. 067-00016

Mandalay Shores Apartments

Clearwater Beach, Florida

O.R. 5318 Page 588C

82033996

DEED

THIS INDENTURE, made this 2nd day of March, 1982, by

and between SAMUEL R. PIERCE, JR., SECRETARY OF

HOUSING AND URBAN DEVELOPMENT, of Washington,

D.C., (hereinafter referred to as “Grantor’), and BANK OF

CLEARWATER, a banking association organized under the

laws of Florida, as Trustee under an unrecorded trust agreement

dated March 1, 1982, Trust No. 48-1990-00 (hereinafter reterred

to as “Grantee”). 600 Cleveland St., Clearwater 33516.

WITNESSETH: That the said Grantor, for and in con-

sideration of the sum of TEN DOLLARS ($10.00) to him in hand

paid, and other valuabie considerations, the receipt whereof is

hereby acknowledged, has granted, bargained, sold, aliened,

remised, released, conveyed and confirmed, and does hereby

grant, bargain, sell, alien, remise, release, convey and confirm

unto the said Grantee, and the successors and assigns of said

Grantee, forever, all that certain parcel of land lying and being

in the City of Clearwater Beach, County of Pinellas, State of

Florida, and described on the attached Exhibit “A”, provided

that:

Rehabilitation:

The property conveyed will be rehabilitated within

four (4) years from the date of this Deed in accordance with

all applicable local codes, and asbestos will be removed or

contained during the period of rehabilitation. Grantee, its

successors and assigns, will pay all temporary relocation

costs for relocating tenants in a manner acceptable to the

Grantor, his successors and assigns.

78-A

Use Restrictions:

During rehabilitation and for a period of twenty (20)

years after completion of repairs to the entire project,

Grantee, for itself, its successors and assigns, agrees that it

will not use the property for other than rental housing and

that it will not market any units for any other purpose than

rental housing for the aforesaid period, unless it receives

prior written approval of the Grantor, his successors and

assigns. Said approval may be granted only if the Grantee,

or its successors and assigns, demonstrates a substantial

change in the need for rental housing since the date of this

Deed.

Rental Rate Restriction:

For the period of rehabilitation, Grantee, for itself, its

successors and assigns, agrees not to raise rents. After the

rehabilitation period, rents may be raised to market rates.

Eviction Requirements:

During the rehabilitation and for a period of twenty

(20) years after completion of the repairs to the entire pro-

ject, Grantee, its successors and assigns, shall, with respect

to eviction from the project, evict only for good cause as

governed by 24 CFR, Part 450, or any successor regula-

tions, unless it receives prior written approval of the Gran-

tor, his successors and assigns. Said approval may be

granted only if the Grantee, or its successors and assigns,

demonstrates a substantial change in the need for rental

housing since the date of this Deed.

It is expressly agreed that upon failure to strictly keep and

observe any of the provisions of the foregoing conditions,

by the Grantee, its successors and assigns, the Grantor, his

successors and assigns, may enter and terminate the estate

hereby conveyed.

BEING the same property acquired by the Grantor pur-

suant to the provisions of the National Housing Act, as amend-

ed (12 USC 1701 et seq.), and the Department of Housing and

Urban Development Act (79 Stat. 667).

SE PF OS ae

i

79-A

TOGETHER with all and singular the tenements,

hereditaments and appurtenances thereunto belonging, or in

anywise appertaining, and the reversion and reversions, re-

mainder and remainders, rents, issues and profits thereof. And

also_all the estate, right, title, interest, property, possession,

claim and demand whatsoever, as well in law as in equity, of the

Grantor, of, in and to the same, and every part and parcel

thereof, with the appurtenances.

TO HAVE AND TO HOLD the above granted and describ-

ed premises with the appurtenances unto the Grantee, and the

successors and assigns of said Grantee, to their only proper use,

benefit and behoof forever, provided that:

Rehabilitation:

The property conveyed will be rehabilitated within

four (4) years from the date of this Deed in accordance with

all applicable local codes and asbestos will be removed or

contained during the period of rehabilitation. Grantee, its

successors and assigns, will pay all temporary relocation

costs tor relocating tenants in a manner acceptable to the

Grantor, his successors and assigns.

Use Restriction:

During rehabilitation and for a period of twenty (20)

years after completion of repairs to the entire project,

Grantee, for itself, its successors and assigns, agrees that it

will not use the property for other than rental housing and

that it will not market any units for any other purpose than

rental housing for the aforesaid period, unless it receives

prior written approval of the Grantor, his successors and

assigns. Said approval may be granted only if the Grantee,

or its successors and assigns, demonstrates a substantial

change in the need for rental housing since the date of this

Deed.

Rental Rate Restriction:

For the period of rehabilitation, Grantee, for itself, its

successors and assigns, agrees not to raise rents. After the

rehabilitation period, rents may be raised to market rates.

Eviction Requirements:

During the rehabilitation and for a period of twenty

(20) years after completion of the repairs to the entire pro-

ject, Grantee, its successors and assigns, shall, with respect

to eviction from the project, evict only for good cause as

governed by 24 CFR, Part 450, or any successor regula-

tions, unless it receives prior written approval of the Gran-

tor, his successors and assigns. Said approval may be

granted only if the Grantee, or its successors and assigns,

demonstrates a substantial change in the need for rental

housing since the date of this Deed.

It is expressly agreed that upon failure to strictly keep

and observe any of the provisions of the foregoing condi-

tions, by Grantee, its successors and assigns, the Grantor,

his successors and assigns, may enter and terminate the

estate hereby conveyed.

SUBJECT to all covenants, restrictions, reservations,

easements, conditions and rights appearing of record; and SUB-

JECT to any state of facts an accurate survey would show.

AND the said Grantor does hereby specially warrant the

title to said land against the lawful claims of all persons claiming

by, through or under him.

SAID premises shall be subject to the following:

Section 8 Requirements:

The Grantee, for itself, its successors and assigns,

covenants with the Grantor, his successors and assigns and

third-party beneficiaries, that certain restrictive covenants

will be applicable to the property conveyed, and it is the in-

tention of the parties that these covenants will run with the

land. The purpose of these covenants is to implement the

provisions of Section 204 of the Housing and Community

Development Amendments of 1978.

The Grantee, for itself, its successors and assigns,

agrees not to refuse unreasonably to lease a vacant dwell-

ing unit, evict any person or otherwise discriminate in the

terms of tenancy because such person is the holder of, or

a a a MK

dP

81-A

eligible to hold, a Certificate of Family Participation under

Section 8 of the United States Housing Act of 1937 (42 USC

1437f), or any successor legislation (hereinafter referred to

as Section 8); Provided, that this provision is limited to

those units which rent for an amount not greater than the

fair market rent for a comparable unit in the area as deter-

mined by the Grantor under Section 8.

These covenants and agreements shaii bind the

Grantee, its successors and assigns, for a period of twenty

(20) years from the date of this Deed. In the event of a

breach or a threatened breach of any of these covenants

and agreements, the Grantor, his successors and assigns

and/or one or more third-party beneficiaries, shall be en-

titled to institute legal action to enforce performance and

observance of such covenants and agreements. For the pur-

poses of these covenants, a third-party beneficiary shall be

any person who holds, or is eligible to hold, a Certificate of

Family Participation under the aforesaid Section 8 of the

Housing Act of 1937.

FULL POWER AND AUTHORITY is hereby granted

to said Grantee to subdivide and resubdivide the real estate

or any part thereof; to dedicate parks, streets, highways or

alleys and to vacate any subdivision or part thereof; to ex-

ecute contracts to sell or exchange, or execute grants of op-

tions to purchase, to execute contracts to sell on any terms,

to convey either with or without consideration; to convey

the real estate or any part thereof to a successor or suc-

cessors in trust and to grant to such successor or successors

in trust all of the title, estate, powers and authorities vested

in the Grantee; to donate, to dedicate, to mortgage, or

otherwise encumber the real estate, or any part thereof; to

execute leases of the real estate, or any part thereof, from

time to time, in possession or reversion, by leases to com-

mence in praesenti or futuro, and upon any terms and for

any period or periods of time, and to execute renewals or

extensions of leases upon any terms and for any period or

periods of time and to execute amendments, changes or

modifications of leases, and the terms and provisions

thereof at any time or times hereafter; to execute contracts

to make leases and to execute options to lease and options

to renew leases and options to purchase the whole or any

part of the reversion and to execute contracts respecting the

Petitioner's Footnote: Unadvertized changes and relaxed terms of deed are

shown in bold face type.

82-A

manner of fixing the amount of present or future rentals, to

execute grants of easements or charges of any kind; to

release, convey or assign any right, title or interest in or

about or easement appurtenant to the real estate or any

part thereof, and to deal with the title to said real estate and

every part thereof in all other ways for such other con-

siderations as it would be lawful for any person owning the

title to the real estate to deal with it, whether similar to or

different from the ways above specified and at any time or

times hereafter.

In no case shall any party dealing with said Grantee in

relation to the real estate, or to whom the real estate or any

part thereof shall be conveyed, contracted to be sold, leas-

ed or mortgaged by the Grantee, be obliged to see to the

application of any purchase money, rent or money bor-

rowed, or advanced on the real estate, or be obliged to see

that the terms of the trust have been complied with. or be

obliged to inquire into the necessity or expedienc, J! any

act of the Grantee or be obliged or privileged to inquire in-

to any of the terms of the trust agreement; and every deed,

trust deed, mortgage, lease or other instrument executed by

the Grantee in relation to the real estate shall be conclusive

evidence in favor of every person relying upon or claiming

under any such conveyance, lease or other instrument, (a)

that at the time of the delivery thereof the trust created

herein and by the trust agreement was in full force and ef-

fect; (b) that such conveyance or other instrument was ex-

ecuted in accordance with the trusts, conditions and limita-

tions contained herein and in the trust agreement or in any

amendments thereof authorized and binding upon all

beneficiaries: (c) that the Grantee was duly authorized and

empowered to execute and deliver every such deed, trust

deed, lease, mortgage or other instrument; and (d) if the

conveyance is made to a successor or successors in trust,

that such successor or successors in trust have been proper-

ly appointed and are fully vested with all the title, estate

rights, powers, authorities, duties and obligations of its, his

or their predecessor in trust.

The interest of each beneficiary under the trust agree-

ment and of all persons claiming under them or any of

them shall be only in the possession, earnings and the

avails and proceeds arising from the sale, mortgage or

and seal as authorized agent for an on behalf of the said

Secretary of Housing and Urban Development, under authority

and by virtue of

Signed, acknowledged and

delivered in the presence of: © SAMUEL R. PIERCE, JR.

/s/ By: is/

/s/

DISTRICT OF COLUMBIA. | ss:

Before me personally appeared Robert P. Kalish, who is

personally well known to me and known to me to be the duly

bearing date of March . 1982, by virtue of the authority

vested in him by Federal Register, Volume 45, No. 179, Friday,

WITNESS my hand and official seal this 2nd day of March,

1982.

/s/

Notary Public in and for the

District of Columbia

My commission expires:

March 31, 1985

EXHIBIT “A”

Block 21 Mandalay Subdivision as recorded in Plat

Book 14, pages 32 to 35 inclusive of the public records of

Pinellas County, Florida: being more completely described

as follows:

Beginning at the Northwest corner of Lot 6 Block 7 of said

Mandalay Subdivision; thence North 0 degrees 49 minutes

39 seconds East 610.32 feet to the Southeast corner of Lot 1

Block 52 of said Mandalay Subdivision; thence South 86

degrees 16 minutes 41 seconds East 135.37 feet along the

line between Blocks 21 and 52; thence along the Northerly

line of Block 21, along a curve to the left, Radius 80.0 feet,

Arc- 58.19 feet Chord- 56.89 feet bearing South 63 degrees

54 minutes 22 seconds East; thence along a curve to the

right, Radius 922.67 feet; Arc- 136.33 feet, Chord- 136.20

feet, bearing South 80 degrees 29 minutes 59 seconds East;

thence along a curve to the right, Radius- 261.50 feet, Arc-

352.90 feet, Chord- 326.79 feet, bearing South 37 degrees

36 minutes 01 seconds East; thence continue along a curve

to the right, Radius- 261.50 feet; Arc- 346.10 feet, Chord-

321.37 feet, bearing South 38 degrees 59 minutes 04

seconds West; thence along a curve to the right, Radius-

922.67 feet, Arc- 143.28 feet, Chord- 143.14 feet, bearing

South 81 degrees 21 minutes 13 seconds West; thence along

a curve to the left, Radius- 80.0 feet, arc- 54.74 feet, Chord-

53.68 feet, bearing South 66 degrees 11 minutes 52 seconds

West to the Northeast corner of Lot 6 Block 7 of said Man-

dalay Subdivision; thence South 89 degrees i2 minutes 57

seconds West 135.88 feet along the line between Blocks 21

and 7 to the Northwest corner of said Lot 6 Block 7, and

point of. beginning.

Together with all right, title and interest of the grantors in

and to the land lying in the streets and roads in front of and

adjoining said premises.

Together with the land, if any, lying between the westerly

line of the premises and the mean high water line of the

Gulf of Mexico as the same may exist from time to time.

85-A

Al4

Project No. 067-00016

Mandalay Shores Apartments

Clearwater Beach, Florida

APPENDIX “A”

The Deed to be executed by Seller shall be in the following form:

Deed for Florida

THIS INDENTURE, Made this day of

,19 , by and between Samuel R.

Pierce, Jr., Secretary of Housing and Urban Development, of

Washington, D.C., (hereinafter referred to as “Grantor”), and

, (hereinafter referred to as ““Grantee(s)’’),

WITNESSETH: That the said Grantor, for and in con-

sideration of the sum of TEN DOLLARS ($10.00) to him in hand

paid and other valuable considerations, the receipt whereof is

hereby acknowledged, has granted, bargained, sold, aliened,

remised, alien, remise, release, convey and conform unto the

said Grantee(s), and the heirs and assigns of said Grantee(s),

forever, all that certain parcel of land lying and being in the City

of Clearwater Beach, County of Pinellas, State of Florida, and

described on the attached Exhibit “A”, provided that:

Rehabilitation:

The property conveyed will be rehabilitated within four (4)

years from the date of this Deed in accordance with all ap-

plicable local codes and asbestos will be removed or con-

tained during the period of rehabilitation. Grantee(s), its

successors and assigns, will pay all temporary relocation

costs for relocating tenants in a manner acceptable to the

Grantor, his successors and assigns.

Use Restriction:

During rehabilitation and for a period of 20 years after

completion of repairs to the entire project, Grantee(s), its

successors and assigns, agrees that it will not use the pro-

perty for other than rental housing and that it will not

market any units for any other purpose than rental housing

86-A

for the aforesaid period, unless it receives prior written ap-

proval of the Grantor, his successors and assigns. Said ap-

proval may be granted only if the Grantee(s), its successors

and assigns, demonstrates a substantial change in the need

for rental housing since the date of this Deed.

Rental Rate Restriction:

For the period of rehabilitation, Grantee(s), its successors

and assigns, agrees not to raise rents. After the rehabilita-

tion period, rents may be raised to market rates.

Eviction Requirements:

During the rehabilitation and for a period of 20 years after

completion of the repairs to the entire project, Grantee(s),

its successors and assigns, shall, with respect to eviction

from the project, evict only for good cause as governed by

24 CFR, Part 450 or any successor regulations, unless it

receives prior written approval of the Grantor, his suc-

cessors and assigns. Said approval may be granted only if

the Grantee(s), its successors and assigns, demonstrates a

substantial change in the need for rental housing since the

date of this Deed.

It is expressly agreed that upon failure to strictly keep and

observe, any of the provisions of the foregoing conditions,

by the Grantee(s), its successors and assigns, the Grantor,

his successors and assigns, may enter and terminate the

estate hereby conveyed.

BEING the same property acquired by the Grantor pur-

suant to the provisions of the National Housing Act, as amend-

ed (12 USC 1701 et seq.) and the Department ot Housing and Ur-

ban Development Act (79 Stat. 667).

TOGETHER with all and singular the tenements,

hereditaments and appurtenances thereunto belonging, or in

anywise appertaining, and the reversion and reversions, re-

mainder and remainders, rents, issues and profits thereof. And

also all the estate, right, title, interest, property, possession,

claim and demand whatsoever, as well in law as in equity, of the

Grantor, of, in and to the same, and every part and parcel

thereof, with the appurtenances.

87-A

TO HAVE AND TO HOLD the above granted and describ-

ed premises with the appurtenances, unto the Grantee(s), and

the heirs and assigns of said Grantee(s), to their only proper use,

benefit and behoof forever, provided that:

Rehabilitation:

The property conveyed will be rehabilitated within four (4)

years from the date of this Deed in accordance with all ap-

plicable local codes and asbestos will be removed or con-

tained during the period of rehabilitation. Grantee(s), its

successors and assigns, will pay all temporary relocation

costs for relocating tenants in a manner acceptable to the

Grantor, his successors and assigns.

Use Restriction:

During rehabilitation and for a period of 20 years after

completion of repairs to the entire project, Grantee(s), its

successors and assigns, agrees that it will not use the pro-

perty for other than rental housing and that it will not

market any units for any other purpose than rental housing

for the aforesaid period, unless it receives prior written ap-

proval of the Grantor, his successors and assigns. Said ap-

proval may be granted only if the Grantee(s), its successors

and assigns, demonstrates a substantial change in the need

for rental housing since the date of this Deed.

Rental Rate Restriction:

For the period of rehabilitation, Grantee(s), its successors

and assigns, agrees not to raise rents. After rehabilitation

period, rents may be raised to market rates.

Eviction Requirements:

During the rehabilitation and for a period of 20 Years after

completion of the repairs to the entire project, Grantee(s),

its successors and assigns, shall, with respect to eviction

from the project, evict only for good cause as governed by

24 CFR, Part 450 or any successor regulations, unless it

receives prior written approval of the Grantor, his suc-

cessors and assigns. Said approval may be granted only if

the Grantee(s), its successors and assigns, demonstrates a

substantial change in the need for rental housing since the

date of this Deed.

88-A

It is expressly agreed that upon failure to strictly keept and

observe, any of the provisions of the foregoing conditions,

by Grantee(s), its successors and assigns, the Grantor, his

successors and assigns, may enter and terminate the estate

hereby conveyed.

SUBJECT to all covenants, restrictions, reservations,

easements, conditions and rights appearing of record; and SUB-

JECT to any state of facts an accurate survey would show.

AND the said Grantor does hereby specially warrant the

title to said land against the lawful claims of all persons claiming

by, through or under him.

SAID prernises shall be subject to the following:

Subject 8 Requirements:

The Grantee, for itself, its successors and assigns, covenants

with the Grantor, its successors and assigns and third-party

beneficiaries, that certain restrictive covenants will be applicable

to the property conveyed, and it is the intention of the parties

that these covenants will run with the land. The purpose of these

covenants is to implement the provisions of Section 204 of the

Housing and Community Development Amendments of 1978.

The Grantee, for itself, its successors and assigns, agrees not to

refuse unreasonably to lease a vacant dwelling unit, evict any

person or otherwise discriminate in the terms of tenancy because

such person is the holder of, or eligible to hold, a Certificate of

Family Participation under Section 8 of the United States Hous-

ing Act of 1937 (42 USC 1437), or any successor legislation

(hereinafter referred to as Section 8); Provided, that this provi-

sion is limited to those units which rent for an amount not

greater than the fair market rent for a comparable unit in the

area as determined by the Grantor under Section 8.

These covenants and agreements shall bind the Grantee, its suc-

cessors and assigns, for a period of twenty (20) years from the

date of this Deed. In the event of a breach or a threatened breach

of any of these covenants and agreements, the Grantor, its suc-

cessors and assigns and/or one or more third-party

beneficiaries, shall be entitled to institute legal action to enforce

performance and observance of such covenants and agreements

89-A

and to enjoin any acts which are violative of such covenants and

agreements. For the purposes of these covenants, a third-party

beneficiary shall be any person who holds, or is eligible to hold,

a Certificate of Family Participation under the aforesaid Section

8 of the Housing Act of 1937.

IN WITNESS WHEREOF the undersigned has ‘set his hand

and seal as Area Office, HUD Area Office, Florida, for and on

behalf of the said Secretary of Housing and Urban Develop-

ment, under authority and by virtue of 35 FR 16106, as

amended.

Signed, acknowledged and Samuel R. Pierce, Jr.

delivered in the presence of: Secretary of Housing and

Urban Development

By

STATE OF FLORIDA

COUNTY OF : SS

Before me personally appeared

who is personally well known to me and known to me to be the

duly appointed Area Office, HUD A:ea Office, Florida, and the

person who executed the foregoing instrument bearing date

of , 19 , by virtue of the authority

vested in him by 35 FR 16106, as amended, and acknowledged

before me that he executed the same as Area Office, for and on

behalf of Samuel R. Pierce, Jr., Secretary of Housing and Urban

Development, for the purposes therein expressed.

WITNESS my hand and official seal this day of

a.

(SEAL)

Notary Public in and for the

County and State aforesaid

My Commission Expires: