13-002899BID Osprey Apartments, Llc vs. Florida Housing Finance Corporation Status: Closed Recommended Order on Monday, November 25, 2013.

Summary: Proposed funding award was not shown to be contrary to statute, rule, policy, or RFP, nor was proposed award clearly erroneous, arbitrary, capricious, or contrary to competition.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DUVAL PARK, LTD. ,

Petitioner ,

vs. Case No. 13 - 2898BID

FLORIDA HOUSING FINANCE

CORPORATION ,

Respondent .

/

OSPREY APARTMENTS, LLC,

Petitioner,

vs . Case No. 13 - 2899BID

FLORIDA HOUSING FINANCE

CORPORATION,

Respondent.

/

RECOMMENDED ORDER

Pursuant to notice, an evidentiary hearing was held in the

above - styled consolidated cases on October 8, 2013, i n

Tallahassee, Florida, before Elizabeth W. McArthur,

Administrative Law Judge, Division of Administrative Hearings.

APPEARANCES

For Petitioner Duval Park, Ltd :

Michael P. Donaldson, Esquire

Carlton Fields, P.A.

215 South Monroe Street, Su ite 500

Post Office Drawer 190

Tallahassee, Florida 32302 - 0190

For Petitioner Osprey Apartments, LLC:

Joseph M. Goldstein, Esquire

Shutts and Bowen LLP

Suite 2100

200 East Broward Boulevard

Fort Lauderdale, Florida 33301

For Respondent Florida Housing Finance Corporation :

Hugh R. Brown, Esquire

Florida Housing Finance Corporation

Suite 5000

227 North Bronough Street

Tallahassee, Florida 32301 - 1329

STATEMENT OF THE ISSUE

The issue for determination is whether Respondent ' s intended

decision to fund the application of Petitioner Duval Park, Ltd.

(Duval Park), is contrary to its governing statutes, rules,

policies, or the proposal specifications.

PRELIMINARY STATEMENT

Respondent, Florida Housing Finance C orporation (Respondent

or Florida Housing), issued Request for Proposal s 2013 - 08 (the

RFP), by which it solicited applications to compete for funding

for high - priority affordable housing developments for persons

with special needs. Seven applications were filed in response to

the RFP, including applications by Petitioners Duval Park and

Osprey Apartments, LLC (Osprey).

On June 21, 2013, Florida Housing posted notice of its

intended decision to award funding to Duval Park. Osprey, whose

response achieved the second highest score from Florida Housing ' s

evaluation committee, timely filed a notice of intent to protest

and a formal written protest pursuant to section 120.57(3),

Florida Statutes (2013). 1/

Osprey ' s written protest raised three issues. First, Osprey

contended that Duval Park ' s response failed to correctly identify

the developer ' s principals, a threshold requirement. Next,

Osprey challenged the scoring of two application sections,

addressing developer and management company experience with

per manent supportive housing, contending that Duval Park ' s scores

should have been lower than Osprey ' s scores. Finally, Osprey

contended that the " reconciliation process , " which was used to

reconcile the scores of two application sections that were

reviewed and scored by two different evaluators, was arbitrary

and capricious. As an indicator, Osprey ' s written protest noted

that in some instances, an evaluator did not stick to the score

assigned during the independent review, but , rather, changed his

or her s core after discussion at the public meeting at which the

reconciliation process was conducted.

Duval Park also timely filed a notice of intent to protest

and a formal written protest. The Duval Park written protest

generally supported Florida Housing ' s decision, but challenged

the evaluation committee ' s scoring in a few areas in which Duval

Park contended it should have received more points than it did.

Following an unsuccessful resolution meeting pursuant to

section 120.57(3)(d)1., Florida Housing re ferred the two protests

to the Division of Administrative Hearings, where they were

consolidated and set for hearing. Following an unopposed motion

for continuance to accommodate witness availability, the hearing

was rescheduled for October 8 and 9, 2013.

Prior to the hearing, the parties filed a Joint Pre - hearing

Stipulation in which they set forth a number of agreed facts and

agreed issues of law. The parties ' stipulations have been

incorporated below to the extent relevant.

At the outset of the hearin g, Osprey announced that it was

withdrawing the first and third issues raised in its written

protest: the challenge to the sufficiency of Duval Park ' s

identification of the developer ' s principals; and the challenge

to the reconciliation process as arbitra ry and capricious.

The parties presented Joint Exhibits 1 through 22, which

were admitted in evidence; no additional exhibits were offered.

Osprey presented the testimony of two witnesses: Stephanie

Berman, p resident/CEO of Carrfour Supportive Housin g, Inc.

(Carrfour), the developer for Osprey ' s proposed project; and

William Aldinger, Florida Housing ' s assistant policy director and

supportive housing coordinator. Duval Park presented the

testimony of three witnesses, representing the three entities

j ointly developing its proposed project : Shawn Wilson, p resident

of Blue Sky Communities, LLC (Blue Sky) ; Lori Sandonato, d irector

of h ousing for Abilities, Inc., d/b/a ServiceSource

(ServiceSource); and Jack Humber g , d irect or of h ousing and ADA

s ervices f or Boley Centers, Inc . (Boley). Florida Housing did

not call any additional witnesses.

Through the testimony of one of Duval Park ' s witnesses,

Duval Park acknowledged that it was no longer claiming that the

scoring of its response was arbitrary and capric ious , as

contended in its written protest. Therefore, although Duval Park

remains designated as a petitioner, its participation in the

hearing ended up being more like an intervenor supporting

Respondent ' s initial decision. As a result of the parties '

na rrowing of the issues at hearing, the evidentiary hearing

concluded in one day.

The two - volume hearing Transcript was filed on October 24,

2013. The parties timely filed their p roposed r ecommended o rders

(PROs) by the deadline of November 4, 2013. The P ROs have been

carefully considered in preparing this Recommended Order.

FINDING S OF FACT

1. Florida Housing is a public corporation that administers

low - income housing tax credit programs. As of July 1, 2012,

Florida Housing was authorized to use up to t en percent of its

annual allocation of low - income housing tax credits to fund

high - priority affordable housing developments selected through a

competitive solicitation process, such as the RFP. See

C h. 2012 - 127, § 4, Laws of Fla. (2012)(creating § 420.507 (48),

Fla. Stat.). Examples of " high priority " affordable housing

developments include housing for veterans and their families , and

housing for persons with special needs.

2. Prior to issuing the RFP, Florida Housing conducted some

demonstration RFPs for developments serving special needs

households, but the RFP represents the first actual use of the

competitive solicitation process to award low - income housing tax

credits. Previously, low - income housing tax credits were awarded

through what was known as the universal application cycle, a

process described as cumbersome, lengthy, and inflexible. As

part of the universal application cycle, an applicant could

indicate by checking a box that it intended to provide affordable

housing to special needs househol ds. However, the general

universal application process did not lend itself to a targeted

proposal detailing how the unique needs of specific special - needs

population groups would be addressed.

3. The competitive solicitation process was seen as a way

to allow applicants to respond to particular high - priority

development needs identified by Florida Housing. In setting

forth their development proposals for defined target population

groups, applicants would be able to tell their story: applicants

would id entify and describe the unique needs and household

characteristics of the specific special - needs population group

that is the focus of their application; applicants could detail

and demonstrate their know - how with regard to the resources

available in the c ommunity where the proposed development is

located, to meet the unique needs of the target population; and

applicants would be able to discuss the relevant experience of

the developer and management teams that make them well - suited to

carry out the propose d development and meet the unique needs of

the targeted population group.

The RFP

4. The RFP solicited responses or applications proposing

the development of " permanent supportive housing " (as defined in

the RFP) for persons with special needs. Florid a Housing issued

the RFP with the expectation of funding two or more proposals.

5. The RFP provided that applicants could propose

developments for persons with special needs generally, or

applicants could choose to focus on serving veterans with special

needs. If an applicant chose to focus on veterans with special

needs, the applicant was required to pick one of two specific

subcategories: either veterans with service - connected disabling

conditions transitioning from a Veteran s ' Administration ( VA )

ho spital or medical center; or chronically homeless/

institutionalized veterans with disabling conditions who were

significant users of public resources , such as emergency care and

shelter. The RFP specified that it was Florida Housing ' s goal to

fund at lea st one development proposing to serve veterans with

special needs . P reference would be given to proposed

developments focusing on serving special - needs veterans in the

first subcategory, i.e., veterans transitioning from VA hospitals

and medical centers.

6. Duval Park, Osprey, and five other applicants timely

submitted applications in response to the RFP. Both Duval Park

and Osprey proposed permanent supportive housing developments to

serve veterans with special needs transitioning from VA hospitals

and medical centers.

7. As described in the RFP, an evaluation committee

comprised of Florida Housing employees reviewed and scored the

applications. Members of the evaluation committee were

instructed to independently evaluate and score the application

se ctions assigned to them. The RFP specified that at least one

public meeting would be held at which the evaluators were allowed

to discuss the ir evaluations , make any adjustments deemed

necessary to best serve the interests of Florida Housing ' s

mission , an d develop recommendations for the Florida Housing

B oard of D irectors.

8. For most application sections, a single evaluator was

assigned to review and score the seven responses. For example,

Mr. Aldinger was the evaluator who reviewed and scored the two

application sections addressing developer and management company

experience with permanent supportive housing.

9. Two application sections were assigned for evaluation

and scoring by two evaluation committee members. The two

evaluators first independent ly reviewed and scored all seven

application responses for the two sections. Then the two

evaluators met in a noticed public meeting to conduct a

" reconciliation process, " in which they discussed their

evaluations of the responses to the two application s ections and

reconciled differences in their scores .

10. The evaluation committee ultimately concluded that

Duval Park ' s application was entitled to a total of 119 points

out of 133 possible points, and that Osprey ' s application was

entitled to 117 poi nts. A large gap in scoring separated these

two highest - scoring applicants from the other five applicants;

the next highest score was 95 points.

11. The evaluation committee presented its recommendation

to the Florida Housing B oard of D irectors, along wi th a summary

of the scores assigned by the evaluation committee. The

committee ' s recommendation was that Florida Housing should award

funding to Duval Park for its proposed development. Florida

Housing ' s B oard adopted the committee ' s recommendation.

Ospr ey ' s P rotest I ssue R emaining for D etermination

12. Following the parties ' withdrawal of most of their

protest issues, the only remaining disputed issue for resolution

in this proceeding is Osprey ' s claim that Duval Park should have

received " at least thre e " less points than Osprey for the

sections addressing developer and management company experience. 2/

13. Mr. Aldinger ' s assignment as the evaluation committee

member responsible for reviewing and scoring these application

sections comports with his exper tise . Mr. Aldinger has served as

Florida Housing ' s supportive housing coordinator since 2006. In

that role, he has been coordinating with governmental bodies and

industry stakeholders to develop strategies for focusing Florida

Housing ' s resources on the provision of supportive housing to

special needs households. The RFP was developed in furtherance

of this effort, and Mr. Aldinger was one of the RFP ' s authors.

14. Mr. Aldinger assigned the same number of points to the

Duval Park and Osprey applications in both sections. Each

application received 24 out of 25 possible points for developer

experience, and all ten of the points available for management

company experience.

1 5 . Osprey ' s contention is that its narratives for these

two application sectio ns show its objective superiority.

Osprey ' s " objective superiority " argument is primarily based on a

quantitative comparison, in which its narrative showed experience

developing and operating a larger number of permanent supportive

housing units than did Duval Park ' s narrative. Osprey also

contends that its narrative was qualitatively better in providing

greater detail regarding its experience developing and operating

permanent supportive housing. As part of its argument, Osprey

contends that Duval Park strayed from the RFP instructions by

describing experience with more than just permanent supportive

housing, but that the evaluator gave Duval Park credit anyway.

1 6 . The RFP instructions provide the starting point to

assess Osprey ' s contentions. First, the RFP provided the

following definition of " permanent supportive housing " :

Rental housing that is affordable to the

focus households with household incomes

at or below 60 percent of area median

income (AMI), that is leased to the focus

households, for continued occupancy with

an indefinite length of stay as long as

the Permanent Supportive Housing tenant

complies with the lease requirements.

Permanent Supportive Housing shall

facilitate and promote activities of

daily living, access to community - based

services and amenities, and inclusion in

the general community. Permanent

Supportive Housing shall strive to meet

the needs and preferences of the focus

households.

This RFP definition was acknowledged to be somewhat broader than

how that phrase might b e understood by some industry models. For

example, Mr. Aldinger testified that transitional housing could

be permane nt supportive housing within the RFP definition, as

long as a lease agreement is used. Permanency is not required,

only an " indefinite " le ngth of stay. The fact that leases are

for finite terms of 12 or 24 months would not be dispositive;

rather, the length of stay would be considered " indefinite " if

tenants are not required to leave at the end of the ir lease

terms , if they are not ready to leave and are otherwise in

c ompliance with the lease terms. The provision of supportive

services to meet the needs of the focus population is a key part

of the RFP definition.

1 7 . The RFP instructions for the developer experience

narrative were as foll ows:

Developer Experience with Permanent Supportive

Housing ( Maximum 25 points ):

The Applicant must describe the experience of

the Developer, co - Developer, and/or Principal

in developing and operating Permanent

Supportive Housing, and more specifically,

housing for the households the Applicant is

proposing to serve. Describe the role(s) and

responsibilities of any Developer , co -

Developer, and/or Principal listed in the

Applicant ' s responses to Items A.2.c. and

3.a. of Section 6 of the RFP, related to the

proposed Development, and describe the

experience and qualifications relevant to

carrying out the roles and responsibilities

for this proposed Development . (emphasis

added).

1 8 . The RFP instructions for the first application section

must also be co nsidered because they tie into the developer/

manager experience sections. The instructions for the first

application section required the applicant to provide a detailed

description of the focus population group , and the instructions

also explained how t hat description would be used, as follows:

[T]he Applicant must provide a detailed

description of the resident household

characteristics, needs, and preferences of

the focus population(s) the Applicant is

proposing to serve. This description will

provide a point of reference for the

Corporation ' s evaluation and scoring of the

Application, providing the foundation for the

appropriateness of the experience of the

Developer(s) and Management Company , proposed

Construction Features and Amenities, Resident

serv ices and Access to Community Based

Services and Amenities. (emphasis added) .

1 9 . As part of this first application section, applicants

focusing on special - needs veterans transitioning from VA

facilities were required to designate the specific VA facili ties

with which the applicants expected to be working and

coordinating. Osprey, whose proposed development is in Liberty

City, Miami - Dade County, designated Miami VA Healthcare S ystem

(Miami VA) in Miami. Duval Park, whose proposed development is

in unin corporated Pinellas County, designated Bay Pines VA

Healthcare System (Bay Pines VA ) in Pinellas County, as well as

the James A. Haley Veterans Hospital and the Tampa Polytrauma

Rehabilitation Center, both in Tampa, Hillsborough County.

20 . Osprey and Duval Park both provided extensive

narratives describing their target populations and detailing the

unique needs and preferences of their target populations .

Osprey ' s narrative described the information learned from

interviewing social workers in each of the programs under the

umbrella of the Miami VA , with whom Carrfour would be

coordinating for transitioning veterans. Osprey ' s narrative also

described a VA grant to Carrfour of $1,000,000 per year for

supportive services for veteran families, through whi ch Carrfour

provides a comprehensive case management program called Operation

Sacred Trust. This program has an outreach team that works

closely with social workers throughout the Miami VA.

2 1 . The Duval Park narrative discussed and documented the

wor k of the St. Petersburg Housing Authority Wounded Warrior

Community Advisory Group to assess housing needs for veterans.

Developer - partner ServiceSource ' s director of housing was a

participant. As part of the assessment, the advisory group

conducted vete rans ' focus groups to hear from the veterans

themselves regarding their needs and preferences, including the

particular supportive services needed to allow veterans to

transition to an independent living setting. The Duval Park

narrative also described th e information about transitioning

veterans learned through ongoing projects with the VA facilities

designated for the proposed development, including a Memorandum

of Understanding between James A. Haley Veterans Hospital and

ServiceS ource ' s Warrior Bridge program.

2 2 . As called for by the RFP instructions, Mr. Aldinger

used each application ' s detailed description of the target

population in section one as the foundation for evaluating that

application ' s developer and management experience narra tives.

The experience narratives were properly evaluated in accordance

with the RFP instructions in the context of each applicant ' s

specific proposal to focus on a defined population group

transitioning from designated VA facilities, whose unique needs

we re fleshed out in the first section narratives.

2 3 . Mr. Aldinger reviewed and was impressed with both

Osprey ' s and Duval Park ' s developer experience narratives, for

good reason. As he explained, the two responses took different

approaches, but both pro vided good detail in the limited space

allotted.

2 4 . Osprey ' s narrative described Carrfour, a non - managing

member of the applicant entity that will be the developer and,

through a subsidiary, manager of the proposed development.

Carrfour is a not - for - profit organization created in 1993 by the

Greater Miami Chamber of Commerce, with the mission of developing

permanent supportive housing to end homelessness. In setting

forth Carrfour ' s experience, the Osprey narrative took a

quantitative approach by enu merating Carrfour ' s 16 mixed - use

housing development projects that include d permanent supportive

housing. Some detail s w ere provided for each development, such

as the funding sources, the number of total units, how many of

those units were permanent suppo rtive housing units, and how many

of the units were currently occupied by veterans. However, the

narrative did not explain whether any supportive services

provided for these developments were specifically geared to

meeting the special needs of veterans. Th e type s of supportive

services were not identified for an y of the 16 developments. For

three developments , the description stated only that " a full

array of supportive services " was provided or that " on - site

supportive services " were provided. Supporti ve services were not

mentioned in the descriptions of the other 13 developments.

2 5 . Other than providing the number of units then occupied

by veterans, Osprey ' s developer experience narrative had no

information to demonstrate experience providing hou sing

specifically developed to meet the unique needs of the focus

population for its proposed development: veterans with service -

related disabling conditions transitioning from the Miami VA .

2 6 . Duval Park ' s developer experience narrative did not

match Osprey ' s approach of enumerating individual permanent

supportive housing developments and quantifying the units in each

development. Duval Park ' s response chose instead to describe in

general aggregate terms the permanent supportive housing

experience of the developer - partners. The Duval Park narrative

went into more detail to highlight the developer team experience

with housing projects specifically designed to meet the unique

needs of special - needs veterans transitioning from the VA

facilities designate d in its application , something lacking in

the Osprey response.

2 7 . For example, Duval Park ' s response described developer -

partner Boley ' s substantial experience since it was founded in

1970, in developing more than 500 units of permanent supportive

hous ing in Pinellas County. The narrative also described the

even longer - standing experience of developer - partner

ServiceSource, founded in 1959 with a mission to provide services

to needy people with disabilities. Initially providing

employment, training, r ehabilitation, and support services

(relevant to the roles described for this developer - partner in

operating the proposed development), ServiceSource began a

housing program in 1995. ServiceSource ' s permanent supportive

housing development experience was summarized in shorthand as

including 20 separate " HUD 202/811 awards. " The unrefuted

testimony established that this shorthand reference was properly

understood by Mr. Aldinger to signify 20 permanent supportive

housing developments for persons with disab ilities.

2 8 . Two specific supportive housing projects for veterans,

developed and operated by Boley working with the Bay Pines VA ,

were detailed in Duval Park ' s developer experience narrative. In

2007, Bay Pines VA awarded Boley a contract for " Safe Hav en Model

Demonstration Project " services, described in the notice of

contract award as " a specialty model of HCHV residential care as

mandated by the . . . zero - tolerance policy to end homelessness

within the Veteran population. " Through this contract, Bo ley

acquired and rehabilitated a former 20 - unit skilled nursing

facility to establish Morningside Safe Haven (Morningside) , which

provides housing and a residential treatment program with

counseling for veterans. Half of the 20 veterans housed there

have service - connected disabling conditions, and one - third of the

veterans transitioned from VA facilities. Pinellas County and

HUD provide funding support for this VA pilot program.

2 9 . Osprey contends that Boley ' s experience developing and

operating M orningside should have been ignored in scoring Duval

Park ' s developer experience, because a residential treatment

program is not permanent supportive housing. However, according

to Mr. Humberg , Morn ingside is considered permanent supportive

housing under HUD guidelines. Veterans sign a 12 - month lease to

reside in a unit. Although the intent is that tenants will

complete treatment and move on, tenants are not required to leave

at the end of their 12 - month lease terms; they can stay as long

as they need to , if they are otherwise compliant with their

leases.

30 . Even if Morningside did not technically meet the RFP

definition of permanent supportive housing, the discussion of

Morningside still would be appropriate for this narrative ,

pursuant to the RFP i nstructions . The Morningside experience

demonstrates Boley ' s " experience and qualifications relevant to

carrying out " its roles and responsibilities for the proposed

development, identified in the same narrative to include mental

health counseling, case m anagement, and VA coordination.

3 1 . Also described in Duval Park ' s narrative was Boley ' s

2010 development of Jerry Howe Apartments, with 13 units

developed specifically for formerly homeless veterans, many of

whom have service - connected disabling condi tions. Funding for

this development was provided by the VA and the City of

Clearwater. Boley coordinates with Bay Pines VA in operating

this development, with Bay Pines VA providing screening and

referral services to identify veterans who are candidates to

lease apartment units. Boley ' s staff members work closely with

the veteran tenants to provide supportive services, preparing

them for more independent living.

3 2 . Osprey quibbles with whether Jerry Howe Apartments

technically qualifies as permanent supportive housing, noting

that while the veteran tenants do sign a lease, the intent of the

project is to serve as transitional housing for up to 24 months.

However, Mr. Aldinger explained that transitional housing would

meet the RFP ' s broad definition of permanent supportive housing

if tenants are not required to leave after a finite period of

12 or 24 months. Mr. Humberg confirmed that veterans residing at

Jerry Howe Apartments are not required to leave after 24 months ,

if they are not ready to move o n. Mr. Humberg also clarified

that Boley owned the apartments before they were re develop ed in

2010 , specifically to meet the needs of veterans. Before the

2010 redevelopment, Boley operated the property as permanent

supportive housing, just not specifica lly for veterans. In fact,

two of the units remain occupied by prior non - veteran permanent

supportive housing tenants , who did not want to move out in 2010

when the property was redeveloped.

3 3 . It is not necessary to debate whether Jerry Howe

Apartme nts technically is permanent supportive housing, although

the evidence demonstrated that the development is and has been

permanent supportive housing , as defined in the RFP . Certainly,

this project demonstrates Boley ' s experience and qualifications

releva nt to carrying out its roles and responsibilities for the

proposed development and , therefore, is worthy of c onsideration

as part of the developer experience narrative.

3 4 . Duval Park ' s developer experience narrative also

detailed specific veterans ' su pportive service programs developed

by both Boley and ServiceSource. The descriptions of these

programs demonstrate experience and qualifications directly

relevant to the described roles and responsibilities for Boley

and ServiceSource with respect to the proposed development.

3 5 . Duval Park ' s experience narrative details the many

accomplishments of ServiceSource ' s nationally - recognized Warrior

Bridge program, which provides a wide variety of supportive

services to veterans. Noteworthy is a 2012 award o f over

$1,000,000 from the City of St. Petersburg to ServiceSource to

expand housing options for wounded veterans. Under this program ,

in the past year , ServiceSource partnered with Home Depot to

modify 16 homes and facilities serving wounded veterans in the

Tampa Bay area to increase accessibility, safety, and energy

efficiency. This experience translates directly to the role

ServiceSource will serve as a participant in designing the

proposed housing development specifically to accommodate the

unique acc essibility and other needs of special - needs veterans

with disabling conditions.

3 6 . ServiceSource ' s Warri o r Bridge program also operates

the " Veterans ' Mall " in the vicinity of the proposed development.

At the Veteran s ' Mall, household appliances, co okware, business

attire, and necessities are made available to wounded veterans

transitioning to more independent housing settings . According to

Duval Park ' s narrative, the Veterans ' Mall has served more than

325 veterans since opening in October 2011, th rough partnerships

with Bay Pines VA and local community organizations serving

veterans. ServiceSource ' s representative testified that

ServiceSource recently secured a five - year commitment from T.J.

Maxx to stock the Veterans ' Mall with new suits for vete rans

going on job interviews.

37 . The Duval Park developer experience narrative regarding

the Warrior Bridge program portrays ServiceSource ' s experience

and qualifications to carry out its described roles and

responsibilities for the proposed development , which include

community outreach, physical disability counseling, employment

assistance, job training, and VA coordination.

3 8 . Another program described in Duval Park ' s developer

experience narrative is Boley ' s Homeless Veterans Reintegration

Progra m. This is a case management, training, and employment

program specifically for veterans, conducted by Boley case

managers and employment specialists, demonstrating that they are

well - suited to carry out the described roles and responsibilities

for Boley with respect to the proposed development, which

include s the lead case management role.

3 9 . A reasonable person attempting to compare the two

developer experience narratives might say that Osprey ' s narrative

demonstrated greater quantitative experien ce in developing more

units of permanent supportive housing generally, but that Duval

Park ' s narrative demonstrated better qualitative experience among

the developer - partners in developing supportive housing

specifically for veterans with special needs. D uval Park ' s

narrative wa s more directly focused on specific experience

developing supportive housing that addresses the unique needs of

those special - needs veterans who are transitioning from VA

facilities. In addition, Duval Park ' s narrative better

demon strated experience and qualifications among the developer -

partners that are directly relevant to their described roles and

responsibilities in carrying out the proposed development. Both

narratives were very good and responsive to the RFP instructions ,

wh ile taking very different approaches. Mr. Aldinger reasonably

applied the RFP instructions, reasonably evaluated the two

narratives, and reasonably judged them both to be deserving of

the same very high score.

40 . The credible evidence does not support Osprey ' s

contention that its developer experience narrative was superior,

or that Duval Park ' s narrative strayed beyond the RFP

instructions, or that Duval Park ' s narrative was judged by

different standards than Osprey ' s narrative. 3/

4 1 . Osprey also ta kes issue with the scoring of the two

applications ' narratives describing management company experience

with permanent supportive housing. As noted, Mr. Aldinger

evaluated these narratives and awarded each application the

maximum ten points for this appli cation section.

4 2 . Osprey ' s narrative identified Carrfour ' s not - for - profit

subsidiary, Crossroads Management, LLC (Crossroads), as the

manager for its proposed Liberty Village development. Although

Carrfour was established in 1993, Crossroads was not c reated

until 2007. Before Crossroads was created, Carrfour did not

manage the housing projects it developed; instead, it turned the

developments over to traditional property management companies.

As Osprey ' s narrative acknowledges, this created problems, as the

traditional m anagement companie s lacked the sensitivity and

training to address special needs of permanent supportive housing

tenants. Since 2007, Crossroads has been taking over management

functions for Carrfour developments and is now managing m ost of

the 16 developments listed in the developer experience narrative.

Osprey ' s application was given credit for proposing management

with ideal experience.

4 3 . For Duval Park ' s application, Boley is identified as

the management company. In additio n, Boley will engage Carteret

Management Company (Carteret) , which is owned and operated by

James Chadwick, a principal of developer - partner Blue Sky, to

assist with tax - credit compliance and other matter s within

Carteret ' s expertise during the initial pha ses of the project.

Boley ' s specific experience managing supportive housing for

veterans with special needs, previously detailed in the developer

experience discussion above, could not reasonably be questioned.

As described in the manager experience narr ative, Boley manages

561 units of its own permanent supportive housing. Boley also

manages 112 additional permanent supportive housing units owned

by other not - for - profit companies (including an 88 - unit

development owned by ServiceSource). The management narrative

describes the profile of the typical Boley - managed housing unit

tenant as having mental illness, including post - traumatic stress

disorder and/or substance abuse problems, requiring supportive

services provided by Boley staff. These supportive s ervices

include mental health counseling, case management intervention,

and transportation assistance -- functions for which Boley will

assume responsibility operating the proposed development. The

narrative also describes Boley ' s property management person nel :

seven housing staff who handle leasing, income certifications,

and other leasing matters; eight maintenance staff to handle

property repairs; three drivers who provide transportation; and

four accounting staff for property management functions.

4 4 . Osprey does not articulate a specific reason why Duval

Park ' s management company experience narrative should not be

entitled to ten points, or why Osprey believes its narrative was

qualitatively or quantitatively better than Duval Park ' s, except

to the e xtent of Osprey ' s criticisms of the developer experience

narratives . Yet Osprey ' s narrative for manager experience

arguably should not fare as well as its narrative for developer

experience, given the many more years of management experience

demonstrated by Boley and the comparatively few years of

management experience by the Crossroads management entity created

by Carrfour in 2007. Nonetheless, Mr. Aldinger credited the

Osprey application with the maximum points based on Crossroads '

management experience since 2007.

4 5 . No credible evidence was presented to support the

contention that Duval Park ' s management experience narrative was

not entitled to at least the same number of points as Osprey ' s

management experience narrative.

4 6 . As repeatedly ackno wledged by all parties throughout

the hearing, Florida Housing was fortunate to have received two

excellent proposals by Osprey and Duval Park that were head and

shoulders above the other responses. Florida Housing then was

faced with the difficult task o f deciding which, between two

excellent choices, should receive the funding nod , if only one of

the two could be funded.

4 7 . Based on the evidence and the findings above,

Mr. Aldinger ' s assignment of the same number of points for

developer experience (24 points out of a possible 25 points) and

for management company experience (the maximum of 10 points) to

the two excellent proposals was not clearly erroneous, arbitrary ,

capricious , or contrary to competition . His conclusion that both

applicants demonstr ated nearly ideal development experience and

ideal management company experience for their proposals was

reasonable . The evidence established that Mr. Aldinger made the

points assignments he did after evaluating all of the relevant

information he was allo wed to consider pursuant to the RFP

instructions. His scoring of th ese two application section s was

shown to be an honest, good faith exercise of his expert judgment

applied to sort out the various pros and cons of the responses .

4 8 . Osprey did not id entify any statute or rule that it

contends was violated by the scoring of the Osprey and Duval Park

developer and management experience narratives. Osprey argued,

but did not prove, that the scoring of these two applications was

contrary to the RFP speci fications. Osprey argued that Mr.

Aldinger ' s evaluation was contrary to the RFP beca use he

considered differences between the two projects in assessing

developer experience. Osprey characterized this as double -

counting, because the same aspects of the pro jects were scored in

other sections. Osprey also contended that considering the

differences between the two proposed developments and the

different approaches by the two applicants was tantamount to

applying different standards in evaluating the two appli cations.

4 9 . Osprey ' s criticism wa s not borne out by the evidence.

Instead, Mr. Aldinger described a reasonable process, consistent

with the RFP terms explaining that developer experience would be

assessed in the context of the attributes of the target

population described in the first section of the application, and

also in context with the roles and responsibilities described for

the developer team members in carrying out the proposed

development. The same RFP instructions and the same standards

were applied to the evaluation of the two applications; it was

the applications that were different, not the standards. 4 /

50 . Although not actually raised as a distinct challenge,

Osprey suggested an additional argument in its PRO, not

articulated in its wri tten protest or in the Joint Pre - hearing

Stipulation . Osprey argued in its PRO that Florida Housing

should have used two evaluators to score the developer and

manager experience narratives, as a " check and balance " against

arbitrary scoring .

5 1 . Ospre y ' s new argument stands in stark contrast to the

only challenge to the evaluation process articulated in Osprey ' s

written protest and in the Joint Pre - h earing Stipulation . Before

the hearing, Osprey challenged the evaluation procedure used for

two applica tion sections that were scored by two evaluators .

Rather than providing any check - and - balance comfort, the two -

evaluator process was viewed as defective by Osprey because the

initial scores independently assigned by each evaluator were

reconciled in a pub lic discussion meeting at which differences in

scores were harmonized, meaning that when the initial scores

differed, the evaluator s agreed to adjust their i nitial score s .

5 2 . Osprey has established only that for some application

sections, a single evaluator was used, while for other

application sections, two evaluators were used and their separate

scores were reconciled. No credible evidence was offered to

prove that use of two evaluators was better than using one

evaluator (or vice versa , as Ospre y initially argued).

CONCLUSIONS OF LAW

5 3 . The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter of this

proceeding. §§ 120.569 and 120.57(3), Fla. Stat.

5 4 . Section 420.507 provides the statutory authority for

F lorida Housing to allocate a percentage of low - income housing

tax credits by means of an RFP process for certain types of

projects . The statute provides:

The corporation shall have all the powers

necessary or convenient to carry out and

effectuate the purposes and provisions of

this part, including the following powers

which are in addition to all other powers

granted by other provisions of this part:

* * *

(48) To award its annual allocation of

low - income housing tax credits, nontaxable

reve nue bonds, and State Apartment Incentive

Loan Program funds appropriated by the

Legislature and available to allocate by

request for proposals or other competitive

solicitation. The corporation shall reserve

up to 5 percent of each allocation for

high - pri ority affordable housing projects,

such as housing to support economic

development and job - creation initiatives,

housing for veterans and their families, and

other special needs populations in

communities throughout the state as

determined by the corporati on on an annual

basis. The corporation shall reserve an

additional 5 percent of each allocation for

affordable housing projects that target

persons who have a disabling condition, as

defined in s. 420.0004, and their families.

These allocations must prio ritize projects

or initiatives piloting or demonstrating

cost - effective best practices that meet the

housing needs and preferences of such

persons. Any tax credits or funds not

allocated because of a lack of eligible

projects targeting persons who have a

disabling condition shall be distributed by

the corporation for high - priority housing

projects.

5 5 . These consolidated competitive solicitation protests

are governed by section 120.57(3)(f), which provides as follows:

Unless otherwise provided by statute , the

burden of proof shall rest with the party

protesting the proposed agency action. In a

competitive - procurement protest, other than

a rejection of all bids, proposals, or

replies, the administrative law judge shall

conduct a de novo proceeding to dete rmine

whether the agency ' s proposed action is

contrary to the agency ' s governing statutes,

the agency ' s rules or policies, or the

solicitation specifications. The standard

of proof for such proceedings shall be

whether the proposed agency action was

clear ly erroneous, contrary to competition,

arbitrary, or capricious.

56. As the party claiming that Florida Housing ' s proposed

action does not meet the standards in section 120.57(3)(f),

Osprey bears the burden of proof in this proceeding. Dep ' t of

Transp. v. J.W.C. Co. , 396 So. 2d 778, 787 (Fla. 1st DCA 1981).

5 7 . The court in Colbert v. Dep artment of Health ,

890 So. 2d 1165, 1166 (Fla. 1st DCA 2004), defined the clearly

erroneous standard to mean that " the interpretation will be

upheld if the agency ' s co nstruction falls within the permissible

range of interpretations. If , however, the agency ' s

interpretation conflicts with the plain and ordinary intent of

the law, judicial deference need not be given to it. " ( c itations

omitted) .

5 8 . An agency action i s " contrary to competition " if it

unreasonably interferes with the purposes of competitive

procurement , which has been described in Wester v. Belote ,

138 So. 721, 723 - 724 (Fla. 1931), as protecting the public

against collusive contracts and securing fair c ompetition upon

equal terms to all bidders.

5 9 . A capricious action has been defined as an action,

" which is taken without thought or reason or irrationally. "

Agrico Chem . Co. v. Dep ' t of Env tl. Reg. , 365 So. 2d 759, 763

(Fla. 1st DCA 1978). " An arbitra ry decision is one that is not

supported by facts or logic[.] " Id. The inquiry to be made in

determining whether an agency has acted in an arbitrary or

capricious manner involves consideration of " whether the agency:

(1) has considered all relevant fact ors; (2) has given actual,

good faith consideration to those factors; and (3) has used

reason rather than whim to progress from consideration of these

factors to its final decision. " Adam Smith Enter . v. Dep ' t of

Envt l. Reg . , 553 So. 2d 1260, 1273 (Fla. 1 st DCA 1989). The

standard has also been formulated by the court in Dravo Basic

Materials Co. v. Dep artment of Transp ortation , 602 So. 2d 632,

634 n.3 (Fla. 2d DCA 1992) , as follows: " If an administrative

decision is justifiable under any analysis that a reasonable

person would use to reach a decision of similar importance, it

would seem that the decision is neither arbitrary nor

capricious. "

60 . Although competitive - solicitation protest proceedings

are described in section 120.57(3)(f) as de novo, cou rts

acknowledge that a different kind of de novo is contemplated than

for other substantial - interest proceedings under section 120.57.

Competitive - procurement protest hearings are a " form of intra -

agency review[,] " in which the object is to evaluate the a ction

taken by the agency. State Contracting and Eng ' g Corp. v. Dep ' t

of Transp. , 709 So. 2d 607, 609 (Fla. 1st DCA 1998).

6 1 . Applying these standards to this case, Osprey has not

met its burden of proving that Florida Housing ' s decision to

award fundin g to Duval Park is clearly erroneous, arbitrary,

capricious, or contrary to competition. Osprey failed to

demonstrate that Florida Housing ' s intended funding award to

Duval Park is contrary to any statute, rule, policy, or RFP

specification.

6 2 . Instead, as found above, the evaluator ' s scoring of the

two application sections challenged by Osprey was shown to be a

rational, good faith exercise of the evaluator ' s honest judgment,

upon consideration of the relevant factors according to the RFP

instructions.

6 3 . Osprey ' s belated PRO argument questioning the use of a

s ingle evaluator to review and score the developer and management

experience narratives is rejected as beyond the scope of its

formal written protest and beyond the scope of the Joint

Pr e - h earing Stipulation . If this untimely argument were

considered, it would be rejected . Even if Osprey had proven that

using two evaluators would provide a better " check and balance "

(or if Osprey had proven its original opposite contention that

using one evaluato r would be better than using two evaluators),

the issue for determination is not whether Florida Housing could

have devised a " better " process .

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that Respon dent, Florida Housing Finance

Corporation, enter a final order consistent with its initial

decision to award funding for the Duval Park, Ltd. , proposed

development, and dismissing the formal written protests of Osprey

Apartments, LLC , and Duval Park, Ltd.

DONE AND ENTERED this 25th day of November , 2013 , in

Tallahassee, Leon County, Florida.

S

ELIZABETH W. MCARTHUR

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tall ahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 25th day of November , 2013 .

ENDNOTE S

1/ All statutory references are to the Florida Statute s (2013).

2/ Osprey ' s scoring challenge necessarily was focused on

attempting to prove that Duval Park was given too many points for

these two application sections, not whether Osprey ' s scores

should have been higher. Osprey could not have received thre e

more points, as its combined score for the two sections was only

one point below the maximum available points.

3/ Osprey also attempted to prove that the developer experience

narratives in other applications were not scored by the same

standards applie d to scoring Duval Park ' s narrative. According

to Osprey ' s PRO, other applications received substantially lower

scores than Osprey because their narratives demonstrate d less

experience developing permanent supportive housing and that Duval

Park ' s narrativ e also should have received fewer points. Osprey

did not prove this claim. The only applications in evidence are

Osprey ' s and Duval Park ' s; t he developer experience narratives

for the other applications were not offered in evidence , as would

be necessary to make comparisons . The limited questions of

Mr. Aldinger about his scoring of other d eveloper experience

narratives established only that Mr. Aldinger gave lower scores

for developer experience to two narratives because permanent

supportive housing exp erience was not discussed.

4 / In questioning Mr. Aldinger, Osprey offered its theory that a

secret criterion weigh ed against its project because of its

location in Miami - Dade County. Osprey failed to prove any secret

criterion. Instead, Mr. Aldinger c redibly and reasonably

explained that he evaluated the experience narratives in the

context required by the RFP instructions, by assessing experience

in the context of each application ' s specific proposal. He us ed

th e section one detailed descriptions of the focus population ' s

characteristics as the foundation for evaluating experience. He

looked for experience working in the community with the VA

facilities designated for proposed development. He looked for

experience working with t he available resource s in the particular

community that will be needed for the target population.

COPIES FURNISHED:

Wellington Meffert, General Counsel

Florida Housing Finance Corporation

Suite 5000

227 North Bronough Street

Tallahassee, Florida 32301 - 1329

Hugh R. Brown, Esquire

Florida Housing Finance Corporation

Suite 5000

227 North Bronough Street

Tallahassee, Florida 32301 - 1329

Della Harrell, Corporation Clerk

Florida Housing Finance Corporation

Suite 5000

227 North Bronough Street

Tallahassee, Florida 32301 - 1329

M ichael P. Donaldson, Esquire

Carlton Fields, P.A.

215 South Monroe Street, Suite 500

Post Office Drawer 190

Tallahassee, Florida 32302 - 0190

Joseph M. Goldstein, Esquire

Shutts and Bowen , LLP

Suite 2100

200 East Broward Boulevard

Fort Lauderdale, Florid a 33301 - 1972

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

1 0 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.