Agenda 04/13/2010 Item #16K 1
Agenda Item No. 16K1
April 13, 2010
Page 1 of 10
EXECUTIVE SUMMARY
Recommendation to authorize the County Attorney to file a lawsuit, on behalf of the
Collier County Board of County Commissioners, against the Collier County Housing
Development Corporation, now known as the Housing Development Corporation of
Southwest Florida, for failure to comply with the grant agreement to develop Cirrus
Pointe.
OBJECTIVE: That the Board of County Commissioners (Board) authorizes the County
Attorney to file a lawsuit in the 20'" Judicial Circuit to recapture HUD grant funding provided to
the Collier County Housing Development Corporation, now known as the Housing Development
Corporation of Southwest Florida ("HDCSWFL") pursuant to the grant agreement dated
December 14, 2005 and amended on July 1,2007.
CONSIDERATIONS: Collier County Department of Housing and Human Services awarded a
Home Investment Partnership Program (HOME) Grant to HDCSWFL in the amount of $320,000
for land acquisition and the development of affordable housing units in Collier County. The
agreement was effective on December 14, 2005 and amended on July I, 2007 to provide
additional time for completion.
The date for final completion was December 31, 2009. To date, HDCSWFL has failed to
materially comply with the terms of the agreement. HDCSWFL received $320,000 in grant
funds from Collier County which was used for land acquisition. No homes were ever built.
Section VI (A) of the grant agreement provides: "All HOME funds are subject to repayment in
the event the PROJECT does not meet the Project Requirements as outlined above." In the event
the subreeipient fails to perform, the agreement provides financial protection to Collier County
by requiring repayment of funds. Furthermore, the subrecipient secured a mortgage against the
subject property. This mortgage is recorded in Official Records Book 4137 Page 0159 of the
public records of Collier County.
At its February 9, 2010 regular meeting, the Board authorized the Department of Housing and
Human Services to work with the County Attorney to take all efforts to recapture the grant
funding provided to the Collier County Housing Development Corporation to develop Cirrus
Pointe. Efforts to resolve this issue with the subrecipient have been unsuccessful, and the
County Attorney is seeking the Board's authorization to file the lawsuit.
FISCAL IMPACT: Filing fees and service are approximately $400, Legal costs should be
minor. The case will be handled by the County Attorney's Office.
GROWTH MANAGEMENT IMPACT: None.
LEGAL CONSIDERATIONS: This item and related contract documents have been reviewed
by the County Attorney's Office. Based on information available to date, Collier County
Housing Development Corporation is in breach of the grant agreement with Collier County.
HUD regulations require the County to attempt to recapture the funds for material non-
compliance. This item is legally sufficient for Board action. - STW
Agenda Item No. 16K1
April 13, 2010
Page 2 of 10
RECOMMENDATION: That the Board of County Commissioners authorizes the County
Attorney to file a lawsuit in the 20th Judicial Circuit to recapture HUD grant funding provided to
the Collier County Housing Development Corporation, now known as the Housing Development
Corporation of Southwest Florida, pursuant to the grant agreement dated December 14, 2005 and
amended on July 1,2007.
Prepared by: Steven T. Williams, Assistant County Attorney
Item Number:
Item Summary:
Meeting Dale:
Agenda Item No. 16K1
April 13, 2010
Page 3 of 10
COLLIER COUNTY
BOARD OF COUNTY COMMISSIONERS
16K1
Recommendation to authorize Ihe County Attorney 10 file a lawsuil, on behalf of the Collier
County Board of County Commissioners, againsl the Collier County Housing Development
Corporation, now known as the Housing Development Corporation of Southwest Florida, for
failure to comply with the granl agreement to develop Cirrus Pointe.
4/13/2010 g:OO:OO AM
Date
Prepared By
Steven Williams
County Attorney
Assistant County Attorney
County Attorney
3/30/201011 :58:40 AM
Date
Approved By
Jeff Klatzkow
County Attorney
3/30/2010 2: 05 PM
Date
Approved By
Steven Williams
County Attorney
Assistant County Attorney
County Attorney
3/30/20102:12 PM
Date
Approved By
OMS Coordinator
County Manager's Office
Office of Management & Budget
4/1/20109:20 AM
Date
Approved By
Randy Greenwald
Office of Management &
Budget
ManagemenUBudget Analyst
Office of Management & Budget
4/1/2010 11:08AM
Approved By
Date
Leo E. Ochs, Jr.
County Managers Office
County Manager
County Managers Office
4/4/20102:01 PM
Agenda Item No. 16K1
April 13, 2010
Page 4 of 10
Office of the Connty Attorney
Deputy Couaty A.ttamq
&olt R. Teach
hsiJIt2t1t CoUDly Alto.meys
Collccn M. Greene
.Jclmiler B. Wlrile
Ste\'en T. \\'illiams
.JefT E. Wright
Rohcn ]I;, 7..adL1I)'
SeaioD au..fj
Heidi F. Aihton-Cicko'
Jacqueline W. Hubhard'
. !loan! Catif...J City, County
il.nd Local GO\lcnUllcnt l..-aw
Jeffrey A. Klatzkow
County Attorney
March 29, 2010
Collier County Housing Development Corporation
4779 Enterprise Avenue
Naples, FL 34104
ATIN: Kathy Patterson
Via Certified Mail, Return
Receipt Requested
Collier County Housing Development Corporation
c/o W. Jeffrey Cecil, Registered Agent
580 I Pelican Bay Boulevard, Suite 300
Naples, FL 34] 08
Housing Development Corporation of SW Florida, Inc.
c/o Susan Golden, Registered Agent
2264 Clipper Way
Naples, FL 34104
RE: Agreement with Collier County-Cirrus Pointe
Notice of Termination and Default
TO WHOM IT MA Y CONCERN:
Please be advised that notice is being provided to you that on or before December 31,
2009, you were to acquire land and develop affordable housing units with eligible beneficiaries
in place. Despite receiving $320,000 in grant funds from Collier County, you have failed to
materially comply with both the original Agreement dated December 14, 2005 and an
Amendment thereto on July I, 2007. It is the understanding of this office that you have not even
broken ground on this project. The Agreement and its Amendment are hereby temlinated and
you are declared in default.
Although there is no likelihood of compliance, tbe County is providing you a 5-day
Notice to comply with all terms in your Agreement(s) with Collier County as to the Cirrus Pointe
project. If you are unable to bring the project into compliance pursuant to Section VI.A of the
Agreement, please return the grant funds of $320,000 to my office within five (5) days. The
3301 East Tamiami Trail - Naples, Florida 34112-4902 - Phone (239) 252-8400 - Facsimile (239) 252-6300
Agenda Item No. 16K1
April 13, 2010
Page 5 of 10
check is to be made payable to Collier County Board of County Commissioners. Concurrent
with this demand for full compliance or reimbursement of all funds, the County elects to exercise
its rights under Section lV.C. of the Agreements. The County hereby requests access to all
XVTII project files in this matter. Please deliver each and every document in your possession
concerning the Cirrus Pointe project to my office ~ithin ten (10) days of the date of this letter.
Please deliver all documents related to the distribution of the $320,000 in county funds, if not
maintained as cash on hand, including any documents related to the closing held on real property
located at:
All of Lot 103, Naples Groves and Truck Company's Little Farms No.2,
according to the Plat thereof, as recorded in Plat Book I at Page 27-A of the
Public Records of Collier County, Florida
within five (5) days of receipt of this demand.
Your failure to either comply with the Agreement via performance or reimbursement of
county funds wiIl result in immediate action being taken in the Collier County Circuit Court.
The County will take all measures necessary, both legal and equitable, to protect its substantial
interest in this matter.
Please do not hesitate to contact me with any questions you may have in this matter.
Sincerely,
OFFICE OF THE COl.rNTY ATTORNEY
~7.L5~
Steven T. Williams
Assistant County Attorney
CP\ I 0-000-00 116\5
3301 East Tamiami Trail- Naples. Florida 34112-4902 - Phone (239) 252-8400 - Facsimile (239) 252-6300
Agenda Item No. 16K1
April 13, 2010
Page 6 of 10
IN THE CIRCUIT COURT OF THE TWENTIETH JUDICIAL CIRCUIT
IN AND FOR COLLIER COUNTY, FLORIDA
CIVIL ACTION
COLLIER COUNTY, FLORIDA, a political
subdivision of the State of Florida,
Plaintiff,
CASE NO.: 10-
v.
COLLIER COUNTY HOUSING DEVELOPMENT
CORPORATION, a Florida not-for profit corporation;
and HOUSING DEVELOPMENT CORPORATION
OF SOUTHWEST FLORIDA, a Florida not-for-profit
Corporation, as successor corporation
Defendants.
COMPLAINT
COMES NOW, Plaintiff, COLLIER COUNTY, by and through its undersigned counsel,
and sues Defendants, COLLIER COUNTY HOUSING DEVELOPMENT CORPORATION
("CCHDC") and HOUSING DEVELOPMENT CORPORA nON OF SOUTHWEST FLORIDA
("HDCSWFL").
JURISDICTION
1. Jurisdiction is properly before the Circuit Court of the Twentieth Judicial Circuit in
Collier County, Florida. The amount at issue exceeds $15,000.00.
VENUE
2. Venue is proper in Collier County, Florida pursuant to 947.011, F.S.
3. Defendant, CCHDC, was a Florida not-for-profit corporation authorized and doing
business in the City of Naples, Collier County, Florida from 2003 to 2009.
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Agenda Ilem No. 16K1
April 13, 2010
Page 7 of 10
4. On January 23, 2009, CCHDC submitted a name change to the Florida Secretary of
State's Office and changed its name to HOUSING DEVELOPMENT CORPORATION OF
SOUTHWEST FLORIDA, ("HDCSWFL"). (See Exhibit "A").
5. HDCSWFL is a private Florida non-profit corporation located at 4779 Enterprise
Avenue, Naples, Florida 34104.
6. Plaintiff, COLLIER COUNTY, is a political subdivision of the State of Florida.
7. On December 14, 2005, Plaintiff, COLLIER COUNTY, entered into a written
contract, ("Agreement"), with Defendant, CCHDC (see attached Exhibit "B").
8. Pursuant to the terms of Exhibit "B", Defendant, CCHDC, was awarded $320,000
in grant funds by COLLIER COUNTY for land acquisition and the development of affordable
housing units in the county.
9. The term of the original agreement between COLLIER COUNTY and CCHDC
called for one hundred percent (100%) project completion by May 30, 2007.
10. On July I, 2007, Plaintiff, COLLIER COUNTY, and Defendant, CCHDC,
entered into "Amended Agreement #1 Between Collier County and Collier County Housing
Development Corporation" (see attached Exhibit "C").
II. The terms of Exhibit "c" are nearly identical to the terms of Exhibit "B" with
only the project deadlines of Section II being lengthened to December 31, 2009.
12. During the term of Exhibit "C", Defendant, CCHDC, changed its name to
HDCSWFL.
COUNT I: BREACH OF CONTRACT
13. Plaintiff, COLLIER COUNTY, hereby adopts and realleges Paragraphs 1 through
12 as though fully set forth herein.
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Agenda Item No. 16K1
April 13, 2010
Page 8 of 10
14. Paragraph "J" of Section XIX of Amended Agreement #1 precludes the
obligations of the Defendants from being delegated or assigned to others unless Co1\ier County
first consents.
15. Plaintiff, COLLIER COUNTY, did not consent to Defendant's name change.
16. The terms of both the Agreement and the Amendment have expired.
17. Defendants have failed to construct a single building and have also failed to
obtain qualified residents for the contemplated affordable housing units.
18 Defendants have accepted Plaintiffs funds, yet failed to comply with the
conditions associated with said funds as set forth in Exhibits "B" and "C",
19. Defendants have breached the agreements with Plaintiff by failing to perform any
and all portions of the agreements that call for the construction of 32 affordable housing units.
20. The only portions of the Agreements Defendants have performed involved the
acquisition of certain real property.
21. Defendants have refused to return the $320,000 in grant funds to the County,
despite a Notice of Termination and Default being provided to Defendants, (see attached Exhibit
"D").
22. COLLIER COUNTY has suffered damages as a result of Defendants' breach in
the amount of $320,000 plus allowable interest, costs, and attorney fees.
WHEREFORE, Plaintiff, COLLIER COUNTY, requests that Defendants, CCHDC and
HDCSWFL, be found in breach of the Agreement with Collier County dated December 14, 2005
and of the Amendment thereto dated July I, 2007 and that damages be awarded to Collier
County along with all associated costs and fees.
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Agenda Item No. 16K1
April 13, 2010
Page 9 of 10
COUNT II: SPECIFIC PERFORMANCE
23. Plaintiff, COLLIER COUNTY, hereby adopts and realleges Paragraphs I through
12 as though fully set forth herein.
24. Section XVI of both the original Agreement and Amendment #1, provide that, in
the event of default, the County is explicitly granted rights "compelling the AWARDEE
(CCHDC) to complete the project in accordance with the terms of this amended agreement, in a
court of equity."
25. Plaintiff, COLLIER COUNTY, seeks specific performance of Exhibits "B" and
"C" with CCHDC and its successor, HDCSWFL.
26. Plaintiff, COLLIER COUNTY, has fully performed all of its obligations under
both Exhibits "B" and "C" and did provide the $320,000 in grant funds to CCHDC on December
21, 2005 (see attached Exhibit "E").
27. Both the original Agreement and the Amendment thereto were valid and binding,
as against both Defendants, with Defendant, CCHDC, partially performing under the terms of the
Agreement by acquiring real property with county funds.
28. Plaintiff has no adequate remedy at law given the unique and complex nature of
the particular circumstances surrounding the federal funds used to secure the grant funds and the
structure of the entities involved in the actual construction of units.
29, As evidenced by the explicit contract language allowing specific performance and
Defendants' definite breach, Plaintiff is clearly entitled to specific performance,
WHEREFORE, Plaintiff, COLLIER COUNTY, seeks an order against Defendants,
CCHDC and HDCSWFL, compelling them to erect 32 affordable housing units and further
compelling them to place qualified residents within those units.
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Agenda Item No. 16K1
April 13, 2010
Page 100f10
JURY DEMAND
PLAINTIFF hereby demands that this matter be tried by jury.
DATED this _ day of March, 2010.
OFFICE OF THE COUNTY ATTORNEY
Hannon Turner Building
3301 East Tamiami Trail
Naples, Florida 34112
(239) 252-8400 - Telephone
(239) 252-6300 - Facsimile
BY:
STEVEN T. WILLIAMS, ESQUIRE
Florida Bar No, 740101
ATTORNEY FOR PETITIONER
CPIl 0-000-00 116114
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