Atlantic Pacific Seeks County Loan for Affordable Projects

Facing construction delays and higher costs on some of its projects, Atlantic Pacific Companies is turning to Miami-Dade County.

Miami-based Atlantic Pacific, one of South Florida’s most prolific developers of affordable and workforce housing, is asking the county for a $3.8 million loan to help cover unexpected construction cost overages for three projects with 470 units, combined. The financing proceeds will come from funds Atlantic Pacific previously repaid to the county in connection to an already completed project.

Miami-Dade commissioners will vote Tuesday on whether to redeploy Atlantic Pacific’s repayment of the $3.8 million surtax in the form of a loan for the firm’s projects. The debt generally comes with zero interest in the first two years and then a low 0.75 percent interest for the balance of the 30-year term.

The largest amount of the loan, or $1.6 million, would be for the 150-unit age-restricted Perrine Apartments II at 10060 West Evergreen Street in the West Perrine neighborhood in south Miami-Dade. The project, where units will be reserved for households earning from 30 percent to 80 percent of the area median income, will consist of 116 studios, 12 one-bedroom apartments and 22 two-bedroom apartments.

The “funds can be leveraged to help ensure the affordability of the future elderly tenants who are often on a fixed income,” Atlantic Pacific’s Kenneth Naylor wrote in a letter to the county in September.

At the time, construction was 20 percent finished, and completion was expected in this year’s third quarter, according to the letter. Previously, the development was awarded $5 million in county funds.

A project in Brownsville, a neighborhood in Miami-Dade, would receive $1.2 million. Brownsville Village V will consist of 120 units –– 28 studios and 92 one-bedroom units –– at 5115 Northwest 29th Avenue. Rents here also will be for households earning from 30 percent to 80 percent of the AMI.

The project is facing $1.8 million labor and materials cost increases due to a nearly two-year delay caused by issues with the ground lease between the developer and Miami-Dade, which owns the land, according to Naylor’s September letter. In previous years, the county also awarded $5.8 million to the project.

Completion of Brownsville Village V is expected in the fourth quarter, according to the letter.

Atlantic Pacific’s Northside Property III project would receive $1 million of the loan. It will have 200 units, or 50 studios and 150 one-bedroom apartments, at 3180 Northwest 79th Street in an unincorporated area of the county. Rents will be for those earning from 30 percent to 70 percent of the AMI.

The project is facing “significant unforeseen costs” due to a $1.4 million underground utility relocation, Naylor said in his letter. As of September, construction was 95 percent finished, and completion was expected in the fourth quarter. The project previously received $9 million in county funds.

The $3.8 million would be redeployed from Atlantic Pacific’s finished 110-unit Amber Garden development at 1301 Northwest 23rd Street in Miami.

Affordable housing developers across South Florida tap various creative financing mechanisms and deal structures to help them keep costs lower and allow them to offer apartments at below-market rents.

Miami-Dade developers have especially seized on the federal Rental Assistance Demonstration program, which allows them to lease public housing complexes from the county, often at a discounted rent from market value, in exchange for building affordable and workforce units. Under RAD, developers also have to do a one-for-one replacement of all public housing units existing on the site.

RAD projects with roughly 10,000 units, combined, have been approved in Miami-Dade in the past year.

Localities and their Community Redevelopment Agencies also often provide grants and loans to affordable housing developers.

Some deals have proven controversial. Former Miami Commissioner Joe Carollo did a deal just before resigning in December, ceding city-owned Little Havana land to Swerdlow Group, Nir Shoshani and Nuri Dorra. The land is valued at more than $8 million.