Miami commissioners granted two developers free land and up to $8 million in forgivable city loans for the construction of affordable and workforce housing rental projects in Little Havana.
The vote in favor of the sweeteners came amid rising criticism against the city and other South Florida governments for catering to developers by awarding them perks, including land for allegedly below-market rate prices.
Public officials have countered that some of these carrots are a way to incentivize the construction of affordable and workforce rentals, a housing type that’s acutely needed in South Florida, where many residents are cost burdened.
In the Little Havana deals, Miami will transfer the half-acre-plus site at 1340 Southwest Eighth Street and 825 Southwest 13th Court to N.R. Investments, which plans an 11-story mixed-income building with about 114 apartments under the Live Local Act.
The city also will transfer a 0.6-acre site at 1251 Southwest Seventh Street to Mabruk USA, which wants to build a 12-story building with 105 units, according to documents attached to the commission agenda. Miami will grant up to $4 million in loans to each developer.
City commissioners approved the land transfers and loans at their meeting on Thursday without discussion.
The loan to N.R. Investments will come from the city’s District 3 capital reserve and affordable housing public benefits fund, and affordable housing and/or rental assistance program funds tapped from the city’s MiamiCoin cryptocurrency, the agenda documents say. (Miami’s District 3 includes Little Havana.)
Mabruk USA’s loan will come from the HOME Investment Partnership Funds, which are allocated from the federal government.
For N.R. Investments’ project, the city will purchase the development site for $5.9 million and transfer it to the developer, according to the South Florida Business Journal.
The lot at 1340 Southwest Eighth Street, home to a retail plaza, is owned by Lopez Optical; and the one at 825 Southwest 13th Court, home to a two-story office building, is owned by Ray Optical, records show.
Miami-based N.R. Investments –– led by Ron Gottesmann and Nir Shoshani –– proposes about 41 studios, 52 one-bedroom apartments and 21 two-bedroom apartments, about 7,000 square feet of ground-floor retail and a three-story, 90-space garage, the firm told the city in an October letter.
About 80 of the apartments will be at below-market rents, designated for households earning 60, 100 and 120 percent of the area median income.
Miami-Dade’s annual AMI is $87,200, according to the Florida Housing Finance Corporation, though it’s expected to be updated in the spring.
Miami owns the vacant development site it plans to transfer to Mabruk USA. The firm, led by Nuri Dorra and Dr. Ingrid E. Dorra of North Miami Beach, proposes a project with 30 one-bedroom apartments and 75 two-bedroom apartments, ground-floor retail and a four-story garage, agenda documents show.
All units in the building will be at below-market rents, targeting households earning up to 80 percent of the AMI.
The city’s approval comes with a caveat that if the developers fail to build, the properties will revert back to the city.
Those items sailed through at the Thursday commission meeting, but a Watson Island deal was the subject of criticism.
The city approved the sale of 3.2 acres on Watson Island to BH3 and Merrimac Ventures for $29 million. At issue: An appraisal determined the land could be worth between $257 million and $342 million, according to the Miami Herald.
Miami-Dade County has a record of giving away land it deems as “surplus” for below-market value in no-bid sales or leases to developers. The deals are sanctioned under a county rule that allows a commissioner to back a developer’s proposal as long as the project is planned for a site the county has deemed as underutilized.
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