Agenda 11/09/2010 Item #16K 2
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E~CJDlYE SUMMARY
Rea......... to accept the settlement offer proposed by Housing Develop..,
corpora......'...of...,.:sw Florida, Inc., formerly known as Collier County Housing Dev.!i. .... ............'.....'.:....;..'.
Corpontioa; JelatiDg to litigation styled as Collier County, Florida v. Collier C "
HOUlblg DenIIopmeat Corporation, et aL (Case No.10-2S32-CA) now peDdilig' lit,' ,
Circuit Coarti'.for the Twentieth ,Judicial Circuit in and for Collier Coua." ,: ',"
whereby Ho"'Development Corporation ofSW Florida, Inc., assigns all riaW,.titJe',::'
interest to the,pI'OIBiaory Dote and secoDd mortgage and security agreea.. .
priDeipal aJDOUDt of 5320,000, given by Cirrus Pointe Partnen, ~ ad
County Attoroey. to . take whatever additional action is necessary to 1m
. settlement.
OBJECTIVE: That the BoanlofCounty CofnTni~oners (Board) accepts the settl
proposed by Housing Develo~ Corporation of SW Florida, Inc. ("HDCSWFL ")
litigation styled as Collier CoUDty,Florida v. Collier County Housing Development
et al., whereby HDCSWl?'L assigns to Collier County all right, title and interest to the
note and second mortgage and security agreement, in the principal amount of S320,OOO~OO~,
by Cirrus Pointe PartDers, LLC, 8Dd directs the County Attorney to take whatever
action is necessary to ioipIemeot, this settlement
CONSIDERATIONS1 Collier County Department of Housing and Human Services a ,
Home Investment Partnership Program (HOME) Grant to HDCSWFL in tbe,.mount ofS3:'
for land acquisition and the development of affordable housing units in Collier .
agreement was effective on Dec:ember 14, 2005 and amended on July 1, 2007 toi
additional time for completion. The date for final completion was December 31, 2009;
HDCSWFL failed to materially comply with the terms of the agreement HDCSWFL
$320,000 in grant funds from Collier County which was used for land acquisition-.No
were ever built.
Section VI (A) of the grant agreement provides: "All HOME funds are subject to .
the event the PROJECT does not meet the Project Requirements as outlined.above." In the "
the subrecipient fails to perform, the agreement provides financial protection 'to Collier
by requiring repayment of funds. Furthermore, the subrecipient secured a mortgage
subject property. 'Ibis lIlOI'tpge is recorded in Official Records Book 4137 Page 0159'
public records of Collier eoQnty. Efforts to resolve this issue with the su1recipient .
unsuccessful, and at its April 13, 2010 regular meeting, the Board authorized the
Attorney Office to file suit against HDCSWFL,to recapture the funds for material
compliance.
In its settlement proposal ~'WFL would assign all if its right, title and interest to
$320,000 promissory note and... above-referenced second mortgage and security agreemoldt,.' .'
Collier COlmty. A copy oftbe~ Assignment is attached to this Executive Sunm..,.. :>il
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Agenda Item No. 16K2~
November 9, 2010
Page 2 af9
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',$ettlement does not adversely impact the remaining litigation against James Fields and
.,Pointe. A specific term of the Settlement Agreement is that the Collier County Ho~
" 'pment Corporation will make a designee available for the County to depose for use in.
renuarwt- of the litigation.
FISCAl.&.WP A&l': Currently, the County has extended $320,000 in HUD funds for the CirrUs
Pointe project This settlement represents an attempt to secure the County's, interest in those
funds. The existing $320,000 granted by the County was unsecured. HUD has stated that it will
diminish f\Jture pID1$,to the County in the mmunt of $320,000 if the County does not seek
return of the fundS pnted to Collier County Housing Development Corporation. The securing
of the existing pro~ry note is a step toward the ultimate recovery of the HUD funds.
GRO~~IMPAcr: None.
LEGAL C : The Office of the County Attorney has reviewed the proposed
settlement offer and related docwnents and this item is legally sufficient for Board action. JAK
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RECOMME : That the Board of County Commissioners accepts the settlement offer
proposed by Housing Development Corporation of SW Florida, Inc., formerly known as Collier
County Housing Development Corporation, relating to litigation styled as Collier County,
Florida v. Collier County Housing Development Corporation, et at., whereby Housing
Development Corporation of SW Florida, Inc., assigns to Collier County all right, title and
interest to the promissory note and second mortgage and security agreement, in the principal
amount of $320,000.00, given by Cirrus Pointe Partners, LLC, and directs the County Attorney
to take whatever additioD8l action is necessmy to implement this settlement
PREPARED BY: Jeffrey A Klatzkow, County Attorney
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Agenda Item No. 16K2
November 9, 2010
Page 3 of 9
COLLIER COUNTY
BOARD OF COUNTY COMMISSIONERS
. Item Number:
Item Summary:
Meeting Date:
16K2
Recommendation to accept the settlement offer proposed by Housing Development
Corporation of SW Florida, Inc., formerly known as Collier County Housing Development
Corporation, relating to litigation styled as Collier County, Florida v. Collier County Housing
Development Corporation, et al. (Case NO.1 0-2532-CA) now pending in the Circuit Court for
the Twentieth Judicial Circuit in and for Collier County, Florida, whereby Housing
Development Corporation of SW Florida, Inc., assigns all right, title and interest to the
promissory note and second mortgage and security agreement, in the principal amount of
$320,000, given by Cirrus Pointe Partners, LLC, and direct the County Attomey to take
whatever additional action is necessary to implement this settlement.
1119/20109:00:00 AM
Prepared By
Jeff Klatzkow County Attorney Date
10/25/20103:50:19 PM
Approved By
Steven Williams Assistant County Attorney Date
County Attorney County Attorney 10/26/20101:11 PM
. Approved By
OMB Coordinator Date
County Manager's Office Office of Management & Budget 11/212010 11 :35 AM
Approved By
Randy Greenwald ManagementlBudget Analyst Date
Office of Management & Office of Management & Budget 11/2120101 :28 PM
Budget
Approved By
Leo E. Ochs, Jr. County Manager Date
County Managers Office County Managers Office 11/2120103:30 PM
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Agenda Item No. 16K2
November 9, 2010
Page 4 of 9
This instrument prepared by:
_,. Thad Kirkpatrick, Esq.
~ cohen&grigsby @
27200 Riverview Center Blvd. #309
Bonita Springs, Florida 34134
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ASSIGNMENT OF PROMISSORY NOTE AND
SECOND MORTGAGE AND SECURITY AGREEMENT
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This Assignment is made this ~-'day of October, 2010, by Housing Development
Corporation of SW Florida, Inc., former1y known as Collier County Housing Development
Corporation, a Florida not-for-profit corporation, as Assignor ("Assignor"), in favor of
Collier County, a political subdivision of the state of Florida, as Assignee ("Assignee").
WITNESSETH:
WHEREAS, Assignor is the Holder of that certain Promissory Note dated November
2,2006, in the original principal amount of Three Hundred Twenty Thousand and 00/100
Dollars ($320,000.00) ("Note") given by Cirrus Pointe Partners, LLC, a Florida limited
liability company ("Borrower") to Assignor.
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WHEREAS, the Note is secured by that certain Second Mortgage and Security
Agreement dated November 2, 2006, given by Borrower to Assignor. as recorded in
Official Records Book 4137, Pages 159-166, in the Public Records of Collier County,
Florida ("Second Mortgage").
WHEREAS, Assignor and Assignee desire to set forth the terms and conditions of
the Assignment as more particular1y set forth below.
NOW, THEREFORE, for Ten and 00/100 Dollars 1$10.00) and other good and
valuable consideration, the receipt and adequacy of which is hereby acknowledged.
the parties hereto, and intending to be legally bound, they do hereby agree as follows:
1. The above recitals are true and correct and incorporated herein by this
reference.
2. Assignor hereby assigns, transfers and sets over to Assignee, all of
Assignor's right. title and interest under the Note and Second Mortgage.
3. Assignor hereby represents and warrants to Assignee that Assignor is the
sole and absolute owner of the Note and Second Mortgage.
4. Assignor hereby represents and warrants to Assignee that neither the
Note, nor the Second Mortgage, have been modified or amended and that there are .
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Agenda Item No. 16K2
November 9, 2010
Page 5 of 9
no outstanding assignments or pledges of Assignor's right, title and interest to the
Second Mortgage or the Note.
5. Assignor hereby confirms and acknowledges that it has not agreed with
Borrower to any offset reduction, settlement or other agreement with regard to the
Note or Second Mortgage.
6. Assignor hereby acknowledges and confirms that on the date hereof, the
principal balance under the Note is Three Hundred Twenty Thousand and 00/1 00 Dollars
($320,000.00), and that no prepayments of principal or interest under the Note have
heretofore been made.
7. This Assignment is made without recourse to Assignor.
IN WITNESS WHEREOF, the undersigned have caused this instrument to be signed
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and sealed on this cl.;"" day of October, 2010.
WITNESSES:
ASSIGNOR:
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W' sS # 1 j'\
-U\ u... u ft IJ.Il-
(Type or Print Name)
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Witn~ss, ~
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(Type or Print orne)
HOUSING DEVELOPMENT CORPORATION OF SW
FLORIDA, INC.
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C By:' \ rCtljl(J{c (, '~\ () ,-rJe I f
Print'Name: Francesco ,Passerl
Its: Its President ~
STATE OF FLORIDA
COUNTY OF COLLIER
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The foregoing instrument was acknowledged before me this f J ''-'-day of
October, 2010 by Francesco Passeri. as President of Housing Development Corporation of
SW Florida, Inc. She is personally known to me.
(SEAL)
W",'o".!' NANCYC.JARVI
~ :~ MY COt.NSSION t 00 82,1740
. EXffiES: SepIember 24,2012
. . IlIlnded 1I1N Nolaty Nlic Unde!WlllGrl
(Type or print Name of Acknowledger)
Housing Development Corporation of SW Florida Inc - Assignment of Note and MortgageDOC Page 2 of 2
Agenda Item No. 16K2
November 9,2010
Page 6 of 9
EXECUTIVE SUMMARY
To authorize the Department of Housing and Human Services to work with the County Attorney
to take all efforts to recapture U.S. Housing and Urban Development ("HUD") Grant Funding
provided to the Collier County Housing Development Corporation ("CCHDC") including filing
a lawsuit in the 20th Judicial Circuit if necessary for failure to comply with the Grant Agreement
to develop Cirrus Pointc and to seek direction on whether to fund CCHDC for future grant
awards.
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OBJECTIVE: For the Board of County CommissionerS Jt authorize the Department of
Housing and Human Services to work with the CountyA#oiney to take all efforts to recapture
HUD Grant Funding provided to CCHDC including a t'fflrtg a lawsuit in the 20th Judicial Circuit
if necessary for failure to materially comply with the terms of the grant agreement dated
December 14, 2005 and amended on July 1,2007, and whether to fund CCHDC for future grant
awards.
CONSIDERATIONS: Collier County Departm~nt of Hot!!:ing and Hufimn Services (HHS)
awarded a Home Investment Partnership Program (HOME) Grant to CCHDC in the amount of
$320,000 for land acquisiti~n and the.,~~", pme,nt of a~,abl"e housing units in Collier Co~ty.
The Agreement was effectIve on De~ .2005 an ",ended on July 1, 2007 to prOVIde
additional time for completion. The da~:ior ~~mpletioti~~as December 31, 2009. To date,
CCHDC has failed to materially compW~th the:~s of the;Agreement. CCHDC received
$320,000 in grant funds from Collier County which was used for land acquisition. There is no .
construction started.
CCHDC is now currently known as the Housing :Bevelopment Corporation of Southwest Florida.
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Section VI (}trot tife~grant a~ent provities: "Aft"HOME funds are subject to repayment in
the ev~e PROJECT~,~ not ~l the Project Requirements as outlined above."
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Prior to the Agreement with the County~ CCHDC entered into a Joint Venture Agreement with
James J. Fields and Cirrus Pointe Partners, LLC ("Venturers") on November 30, 2005. This
Agreement provided that the Venturer would own the parcel once acquired, and that CCHDC
would contribute $320,000 toward acquisition. Based on the Agreement, the Venturer is
responsible for all construction costs. The Agreement further provides: "Upon any breach by
VENTURER of the terms~,lhis agreement which would prevent CCHDC from receiving, or
would require CCHDC to refund, project expenses and/or developer fees it would have
received.. ..VENTIJRER shall be responsible to return $320,000 CCHDC provided..."
Collier County's demand and cause of action will be against CCHDC based on breach of the
grant agreement and amended agreement with the County.
Federal regulations also give the granting agency, the County, the discretion to determine
whether to fund the non-profit again based on past non-compliance. IffiS seeks direction from
the Board of County Commissioners on whether to continue to fund CCHDC in the future. Staff
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Agenda Item No. 16K2
November 9,2010
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recommends funding CCHDC for future non-construction projects. CCHDC has achieved
success in other areas including budget and foreclosure counseling. CCHDC is the only certified
education agency operating in the Naples area.
FISCAL IMPACT: The cost of potential litigation is unknown. Filing fees and service are
approximately $400. 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, CCHDC 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.
-CMG
RECOMMENDATION: That the Board of County Commissioners authorizes the County
Attorney to work with the Department of Housing and Human Services to take all efforts to
recapture U.S. Housing and Urban Development ("HUD") Grant Funding provided to the Collier
County Housing Development Corporation ("CCHDC") including filing a lawsuit in the 20th
Judicial Circuit if necessary for failure to comply with the Grant Agreement to develop Cirrus
Pointe and to seek direction on whether to fund CCHDC for future grant awards.
PREPARED BY: Marcy Krwnbine, Director, Housing and Human Services
09-FAH-00471/4
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Agenda Item No. 16K2
November 9,2010
Page 8 of 9
EXECUTIVE SUMMARY
Recommendation to authorize the County Attorney to fiJe a lawsuit, on behalf of the .
Collier County Board of County Commissioners, against the CoUier 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 20th Judicial Circuit to recapture HUD grant funding provided to
the Collier County Housing Development Corporation, now known as the Housing Develop~ent
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 subrecipient fails to perform, the agreement provides fmancial 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
Hwnan 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 IMP ACT: 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 IMP ACT: 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
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Agenda Item No. 16K2
November 9,2010
Page 9 of 9
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
CP\1O-OOO-OO116\12