14-001399BID Pinnacle Rio, Llc vs. Florida Housing Finance Corporation Status: Closed Recommended Order on Wednesday, June 4, 2014.

Summary: Respondent's determination that Petitioner APC Four Forty Four was ineligible was clearly erroneous, but Petitioners failed to prove Respondent's intended allocation of tax credits was contrary to governing statutes, rules, or solicitation specifications.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PINNACLE RIO, LLC

Petitioner,

vs. Case No. 14 - 1398BID

14 - 1399BID

FLORIDA HOUSING FINANCE 14 - 1400BID

CORPORATION , 14 - 1428BID

Respondent.

and

ALLAPATTAH TRACE APARTMENTS,

LTD.,

Intervenor.

_______________________________/

R ECOMMENDED ORDER

Pursuant to notice, an evidentiary hearing was held in the

above - styled consolidated cases on April 22, 29, and 30, 2014 ,

in Tallahassee, Florida, before F. Scott Boyd , Administrative

Law Judge, Division of Administrative Hearings.

APPEARANCES

For Petitioner Pinnacle Rio, LLC:

Joseph M. Goldstein, Esquire

Shutts and Bowen, LLP

200 East Broward Boulevard , Suite 2100

Fort Lauderdale, Florida 33301

For Petitioner /Intervenor Town Center , Phase Two, L LC :

Michael P. Donaldson, Esquire

Carlton Fields Jorden Burt , P.A.

215 South Monroe Street, Suite 500

Tallahassee, Florida 32302

For Petitioner APC Four Forty Four, Ltd.:

Donna Elizabeth Blanton, Esquire

Brittany Adams Long, Esquire

Susan F. Clark, Esquire

Radey , Thomas , Yon and Clark, P.A.

301 South Bronough Street, Suite 200

Tallahassee, Florida 32301

For Respondent Florida Housing Finance Corporation:

Hugh R. Brown, Esquire

Florida Housing Finance Corporation

227 North Bronough Street , Suite 5000

Tallahassee, Florida 32301

For Intervenor Allapat tah Trace Apartments, Ltd. :

Michael J. Glazer, Esquire

Erik M. Figlio, Esquire

Ausley and McMullen

123 South Calhoun Street

Post Office Box 391

Tallahassee, Florida 3230 2

For Intervenor HTG Miami - Dade 5, LLC :

Maureen M. Daughton, Esquire

Mark K. L ogan, Esquire

Sniffen and Spellman, P.A.

123 North Monroe Street

Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

The issue for determination is whether Respondent's

intended decision to award low - income housing tax credits in

Miami - Dade County through Request for Applications 2013 - 003 to

HTG Miami - Dade 5, LLC , and Allapattah Trace Apartments, Ltd. , is

contrary to governing statutes, the corporationÓs rules or

policies, or the solicitation specifications.

PRELIMINARY STATEMENT

Respondent, Florida Housing Finance Corporation ( FHFC or

the Corporation) , issued Request for Applications 2013 - 0 03 (RFA)

on September 19, 2013 , through which it solicited applications

to compete for the award of low - income tax credits for

affordable housing developments to be const ructed in Miami - Dade ,

Broward, and Palm Beach Count ies. One hundred nineteen

applications were filed by the November 12, 2013, deadline in

response to the RF A .

The Board of Directors of FHFC posted a Notice of Intended

Decision by electronic posting on January 31, 2014 . The posting

indicat ed the sorting order for the applications, including which

applications had been deemed eligible and ineligible , and

approv ed the Review CommitteeÓs recommendation to award tax

credits for construction in Miami - Dade Co unty to HTG Miami - Dade

5, LLC d /b/a Wagner Creek (HTG) and to Allapattah Trace

Apartments, Ltd. , (ATA).

Petitioners Pinnacle Rio, LLC (Pinnacle), Town Center, Phase

Two, LLC (TC) , and APC Four Forty Four, Ltd. (APC) , timely filed

notice s of intent to protest , followed by formal written

protest s pursuant to section 120.57(3), Florida Statutes (2013).

The Corporation referred the se protests , along with others now

dismissed, to the Division of Administrative Hearings, where the

cases were c onsolidated and, after a scheduling conference , set

for hearing on April 22, 29 , and 30, 2014.

A Joint Pre - Hearing Stipulation was entered into by all

parties and stipulated facts are included among the Findings of

Fact below.

The parties offered Joint Exhibits J - 1 through J - 5 , which

were admitted in to evidence . Petitioner Pinnacle offered 12

e xhibits, P - 1 through P - 9, and P - 11 through P - 13 , all of which

were admitted . Petitioner TC introduced 10 exhibits, TC - 1, TC -

7, TC - 8, TC - 11 through TC - 14, TC - 18, TC - 20, and TC - 21, including

the deposition testimony of Mr. Frank Lezcano, and presented the

telephone testimony of Mr. Alberto Milo , Jr. Petitioner APC

offered 19 exhibits, APC - 1 through APC - 12, an d APC - 14 through

APC - 20 , which w ere admitted into evidence. Exhibit APC - 13 was

not admitted. APC also offered the testimony of Ms. Elizabeth

Wong, Vice President of Atlantic Pacific Communities and

Ms. Elizabeth OÓNeill, Senior Policy Analyst at FHFC.

Respondent FHFC introduced Exhibit FHFC - 1 , the deposition

testimony of Ms. Amy Garmon, Review Committee member, and

offered the testimony of Ms. Elizabeth Thorp, Multifamily

Programs Manager and Mr. Kenneth Reecy, Director of Multifamily

Programs for the C orporation . Intervenor ATA introduced 18

e xhibits, ATA - 1, ATA - 3 through ATA - 14, and ATA - 18 through

ATA - 22 , including the deposition testimony of four witnesses,

Mr. Jorge Cordoves, Mr. Mark Johnson, Mr. Douglas Pile , and

Mr. Alberto Milo, Jr. , a nd presented the live testimony of

Mr. William Fabbri, Executive Vice President of The Richman

Group Development Corporation . Intervenor HTG offered Exhibit

HTG - 1 , which was admitted into evidence . O fficial recognition

was given to Flor ida Administrative Code Rule chapters 67 - 48 and

67 - 60 .

The t hree - volume hearing Transcript was filed on May 5,

2014 . After an Order gr anting a one - day extension of time, all

parties timely filed Proposed R ecommended O rders by May 16 ,

201 4 , which were carefully considered in the preparation of this

Recommended Order.

FINDINGS OF FACT

Overview

1. FHFC is a public corporation created pursuant to

section 420.504, Florida Statutes (2013) . 1/ Its purpose is to

promote the public welfare by administering the governmental

function of financing affordable housing in Florida. Pursuant

to section 420.5099, FHFC is designated as the housing credit

agency for Florida within the meaning of section 42(h)(7)(A) of

the Internal Revenue Code and has the responsibility and

authority to establish procedures for allocating and

distributing low - income housing tax credits.

2. The low - income housing tax credit program was enacted by

Congress in 1986 to incentivize the private market to invest in

affordable rental housing . Tax credits are competitively awarded

to housing developers in Florida for qualified rental housing

projects. Deve lopers then sell these credits to investors to

raise capital (or equity) for their projects, which reduces the

debt that the developer would otherwise have to borrow. Because

the debt is lower, a tax credit property can offer lower, more

affordable rents.

3. Provided the property maintains compliance with the

program requirements, investors receive a dollar - for - dollar

credit against their federal tax liability each year over a

period of 10 years. The amount of the annual credit is based on

the amount inv ested in the affordable housing.

4. These are tax credits and not tax deductions. For

example, a $1 , 000 deduction in a 15 percent tax bracket reduces

taxable income by $1 , 000 and reduces tax liability by $150.

However, a $1 , 000 tax credit reduces tax li ability by $1 , 000.

5. Developers that are awarded tax credits can use them

directly. However, most sell them to raise equity capital for

their projects. 2 / Developers sell these credits for up - front

cash. A developer typically sets up a limited partnership or

limited liability company to own the apartment complex. The

developer maintains a small interest but is responsible for

building the project and mana ging (or arranging for the

management) of the project. The investors have the largest

ownership interest but are typically passive investors with

regard to development and management. 3 /

6. Because the tax credits can be used by the investors

that provide the equity for 10 years, they are very valuable.

When sold to the investors , they provide equity which reduces

the debt associated with the project. With lower debt, the

affordable housing tax credit property can (and must) offer

lower, more affordable rent.

7 . The demand for tax credits provided by the federal

government far exceeds the supply. FHFC has adopted Florida

Administrative Code R ule c hapter 67 - 60 , to govern the

competitive solicitation process for several different programs,

including the one for tax credits.

8 . Chapter 67 - 60 was newly enacted on August 20, 2013. It

replaced prior procedures used by FHFC for the competitive

process for allocati ng tax credits. FHFC has now adopted the

bid protest provisions of section 120.57(3), Florida Statutes ,

as its process for allocating tax credits. 4 /

The Competitive Application Process

9. Tax credi ts are made available annually. FHFC begins

the compet itive application process through the issuance of a

Request for Applications. 5 / In this case, that document is

Request for Applications 2013 - 003 . A copy of the RFA, including

its Questions & Answers, is Joint Exhibit 1. The RFA was issued

September 19, 2013 and responses were due November 12, 2013.

10 . According to the RFA, FHFC expected to award up to

approximately $10,052,825 in tax credits for qualified

affordable housing projects in Miami - Dade, Broward , and Palm

Beach Counties.

11 . Knowing that th ere would be far more applications than

available credits, FHFC established an order for funding in the

three counties:

The Applications will be considered for

funding in the following funding order:

first the highest scoring eligible

Application located in Miami - Dade County

that can meet the Funding Test, then the

highest scoring eligible Application located

in Broward County that can meet the Funding

Test, then the highest scoring eligible

Application located in Palm Beach County

that can meet the Fundin g Test, then the

highest scoring eligible unfunded

Application located in Miami - Dade County

that can meet the Funding Test and then the

highest scoring eligible unfunded

Application located in Broward County

regardless of the Funding Test. If there is

not enough funding available to fully fund

this last Broward County Application, the

Application will be entitled to receive a

Binding Commitment for the unfunded balance.

No further Applications will be considered

for funding and any remaining funding will

be distributed as approved by the Board.

RFA at page 36.

12 . Applications were scored using a 27 - point scale based

on criteria in the RFA. RFA at p age 37. This process was

described in the RFA as follows:

The highest scoring Applications will be

deter mined by first sorting all eligible

Applications from highest score to lowest

score, with any scores that are tied

separated first by the ApplicationÓs

eligibility for the Development Category

Funding Preference which is outlined in

Section Four A.4.c.(1)( a) of the RFA (with

Applications that qualify for the preference

listed above Applications that do not qualify

for the preference), then by the

ApplicationÓs eligibility for the Per Unit

Construction Funding Preference which is

outlined in Section Four A.9 .e. of the RFA,

(with Applications that qualify for the

preference listed above Applications to [sic]

do not qualify for the preference), then by

the ApplicationÓs Leveraging Classification

(applying the multipliers outlined in

Exhibit C below and having the Classification

of A be the top priority ) , then by the

ApplicationÓs eligibility for the Florida Job

Creation Preference which is outlined in

Exhibit C below (with Applications that

qualify for the preference listed above

Applications that do not qualif y for the

preference), and then by lottery number,

resulting in the lowest lottery number

receiving preference .

RFA at page 36 (emphasis added).

13 . The way this process works in reality is that the

developers know that they must first submit a project that meets

all the eligibility criteria and does not have any significant

omissions or errors. 6 / Developers also strive to submit projects

structured to receive all 27 points. The tiebreaker is then the

luck - of - the - draw. At the time each application is filed, it is

randomly assigned a lottery number 7 / used to break the ties.

14 . The role of the lottery numbers is demonstrated by th e

following facts . One hundred and nineteen applications were

filed in response to the RFA. All but six received the maximum

score of 27 points. Seventy of the 119 were deemed eligible.

Of those 70, 69 received the maximum score of 27 points. A copy

of the RFA Sorting Order is Joint Exhibit 2. 8 / As such, the

lottery numbers are a big factor i n deciding the winners and,

concomitantly, the challengers are (1) the projects with high

lottery numbers that were deemed ineligible; and (2) those with

lottery numbers outside the funding range that are trying to

displace those with lower lottery numbers .

15 . A copy of the final Review Committee Recommendations

is Joint Exhibit 3. This document shows the developers

selected, the county and the lottery number.

16 . The two Miami - Dade projects selected for funding are:

- HTG Miami - Dade 5, LLC d/b/a Wagner Creek - lottery

number 3

- A llapattah Trace Apartments, Ltd. - lottery number 6

17 . The Petitioners/Intervenors in these consolidated

proceedings are:

- Town Center Phase Two, LLC - lottery number 7

- Pinnacle Rio, LLC - lottery number 9

- APC Four Forty Four, Ltd. - deemed ineligible and

with a lottery number of 10

1 8 . T he protests here center upon whether various

applicants were correctly deemed eligible or i neligible.

Applications are competitively reviewed, and so determinations

as to one applicant affect other applicantsÓ positions. Each

application, and the a llegations against it, will be considered

in turn .

HTGÓs Application

1 9. APC argues that HTG should be found ineligible for

allocation of tax credits because HTG failed to disclose its

princi pals and those of its developer, as required by the RFA.

20 . The RFA at Section Four A.2. d . provides , in part , that

each applicant will submit an application that identifies :

d. Principals for the Applicant and for

each Developer.

All Applicants must provide a list, as

Attachment 3 to Exhibit A, identifying the

Principals for the Applicant and for each

Developer, as follows:

* * *

(2) For a Limited Liability Company,

provide a list identifying the following:

(i) the Principals of the Applicant as of

the Application Deadline and (ii) the

Principals for each Developer as of the

Application Deadline. This list must

include warrant holder s and/or option

holders of the proposed Development.

* * *

This eligibility requirement may be met by

providing a copy of the list of Principals

that was reviewed and approved by the

Corporation during the advance - review

process.

To assist the Applicant in compiling the

listing, the Corporation has included

additional information at Item 3 of

Exhibit C.

RFA at page 5.

21 . The RFA goes on to provide in Exhibit C 3.:

3. Principal Disclosures for Applicants and

Each Developer

The Corporation is providing the following

charts and examples to assist the Applicant

in providing the required list identifying

the Principals for the Applicant and for

each Developer. The term Principals is

defined in Section 67 - 48.002, F.A.C.

a. Charts:

(1) For the Applicant:

* * *

(b) If the Applicant is a Limited

Liability Company:

Identify All Managers and Identify All Members

and

For each Manager that is a For each Manager that is a Limited For each Manager that is a

Limited Partnership: Liability Company: Corporation:

Identify each General Identify each Manager Identify each Officer

Partner

and and and

Identify each Limited Identify each Member Identify each Director

Partner

and

Identify each Shareholder

a nd

For each Member that is a For each Member that is a Limited For each Member that is a Corporation:

Limited Partnership: Liability Company:

Identify each General Identify each Manager Identify each Officer

Partner

and and and

Identify each Limited Identify each Member Identify each Director

Partner

and

Identify each Shareholder

For any Manager and/or Member that is a natural person (i.e., Samuel S. Smith), no further disclosure is required.

RFA at page 61 .

22 . The RFA at Section Three F.3. Provides:

3. Requirements. Proposed Developments

funded with Housing Credits will be subject

to the requirements of the RFA, the

Application requirements outlined in Rule

Chapter 67 - 60, F.A.C., the credit

underwriting and HC Program requireme nts

outlined in Rule Chapter 67 - 48, F.A.C., and

the Compliance requirements of Rule Chapter

67 - 53, F.A.C.

RFA at page 3.

23 . The term Ð p rincipalÑ is defined by r ule

67 - 48.002(89) 9/ , as follows:

(89) ÐPrincipalÑ means:

(a) Any general partner of an Applicant or

Developer, any limited partner of an

Applicant or Developer, any manager or

member of an Applicant or Developer, any

officer, director or shareholder of an

Applicant or Developer,

* * *

(c) Any officer, director, shareholder,

manager, member, general partner or limited

partner of any manager or member of an

Applicant or Developer, and . . . .

24 . HTG received an Ð a dvance r eviewÑ approval of its

designation of principals on October 8, 2013 . HTG submit ted

this stamped and approved list of principals with its

application.

25 . Applicant HTG is a l imited l iability c ompany , as is

its developer, HTG Miami - Dade 5 Developer, LLC. In its

submission of principals, HTG disclosed the names of the manager

and member of th e a pplicant and the manager and member of the

developer , all of which were also LLCs. HTG also disclosed the

names of the managers and members of these component LLC s . HTG

did not disclose any officers of the applicant , the developer ,

or any of the component LLCs .

26 . O ther documents submitted as part of the application

indicate that Mr. Matthew Rieger is a Vice President of the

applicant , HTG Miami - Dade 5, LLC, and that the component LLCs

also have officers.

27 . APC contends that the rule Ós def inition of principal

requires HTG to disclose not only the manager s and members of

the applicant and developer , and those of their component LLCs,

but also the officer s of any of these entities , if they also

have officers .

28 . FHFC asserts that such disclosure is not required,

arguing that the term ÐofficerÑ as found in the rule Ós

definition of ÐprincipalÑ only applies to corporations. F HFC

argues that there is no inconsistency between the rule and the

charts of the RFA with respect to disclosure of principals.

FHFC contends that t he charts in the RFA , read in conjunction

with the rule, indicate that officers must be disclosed only

when the entity is a corporation, and that members and managers

must be disclosed when the entity is a LLC.

2 9. FHFC interpret s rule 67 - 48.002(89) in a manner

consistent with the charts. It does not interpret the rule to

require that an LLC disclose its officers, even if i t has them,

but only that an LLC disclose its managers and members. Both

Ms. OÓNeill and Ms. Thorp t estified to that effect . The

examples provided in the RFA are also cons i stent with this

interpretation.

30 . T he rule certainly might have been drafted with more

precision to expressly indicat e that a principal is any officer,

director, or shareholder if the entity is a corporation; any

manager or member if the entity is an LLC; and any general

partner or limited partner i f the entity is a Limited

Partnership. I t cannot be said , however, that the CorporationÓs

interpretation of the RFA and its rule i s impermissible.

ATAÓs Application

31 . Mr. Kenneth Reecy, Director of Multifamily Programs,

testified that FHFC revised the Ð U niversal A pplication C ycleÑ

process that had been conducted in the past . Under the old

universal cycle, most of the criteria were incorporated into the

rule, and then there was a ÐcureÑ process that provided an

opportunity to correct errors that did nÓt necessarily have a

bearing on whether a project was good enough to be funded. Under

the newer process, several issues were moved out of the

eligibility and scoring p hase and into the credit underwriting

p hase . 10 / Specifically relevant here, site plan issues and the

availability of infrastructure, such as sewer service, were no

longer examined as part of the eligibility and scoring p hase set

forth in the RFA . Mr. Reecy testified that these issues were

complex and had been intentionally pushed to the Ðrigorous

reviewÑ that take s place during the credit underwriting phase .

32 . In signing and submitting Exhibit A of the RFA , each

applicant acknowledges and certifies that certain information

will be provided to FHFC by various dates in the future. RFA at

page 46. Section Four 10.b.(2)(b) provides in part that the

follow ing will be provided :

(2) Within 21 Calendar Days of the date of

the invitation to enter credit underwriting:

(a) Certification of the status of site

plan approval as of Application Deadline and

certification that as of Application

Deadline the site is appropriately zoned for

the proposed Development, as outlined in

I tem 13 of Exhibit C of the RFA;

(b) Certification confirming the

availability of the following for the entire

Development site, including confirmation

that these items were in place as of the

Application Deadline: electricity, water,

sewer service, and roads for the proposed

Development, as outlined in Item 13 of

Exhibit C of the RFA;

33 . Item 13 of Exhibit C goes on to provide :

13. Certification of Ability to Proceed:

Within 21 Calendar Days of the date of the

invitation to enter credit underwriting, the

following information must be provided to

the Corporation:

a. Submission of the completed and executed

2013 Florida Housing Finance Corporation

Local Government Verification of Status of

Site Plan approval for Multifamily

Developments form.

* * *

c. Evidence from the Local Government or

service provider, as applicable, of the

ava ilability of infrastructure as of

Application Deadline, as follows:

* * *

(3) Sewer: Submission of the completed and

executed 2013 Florida Housing Finance

Corporation Verification of Availability of

Infrastructure Ï Sewer Capacity, Package

Treatment, or Septic Tank form or a letter

from the service provider which is dated

within 12 months of the Application

Deadline, is Development specific, and

specifically states that sewer service is

available to the proposed Development as of

the Application Deadline.

34 . The 2013 Florida Housing Finance Corporation Local

Government Verification of Status of Site Plan A pproval for

Multifamily Developments F orm (Site Plan Approval Form) and the

2013 Florida Housing Finance Corporation Verification of

Availability of Infrastructure Ï Sewer Capacity, Package

Treatment, or Septic Tank F orm ( Certification of Sewer Capacity

Form) are incorporated by reference in the RFA.

35 . The Site Plan Approval Fo rm require s (in the case of

Miami - Dade County which does not have a preliminary or conceptual

site plan approval process) that the local government confirm

that the site plan was reviewed as of the application deadline.

36 . Pinnacle and APC assert that the site plan that ATA

submitted to the City of Miami for review included a strip of

land that is not legally owned by the current owner and will not

be conveyed to ATA under the Purchase and Sale Agreement. As a

result, they contend , the site plan review which was required on

or before the application deadline did not occur. Pinnacle

argue s that ATAÓs certification in its application was incorrect,

that this was a mandatory requirement that was not met , and that

it will be impossible for ATA to provide t he Site Plan Approval

F orm in credit underwriting.

37 . TC similarly maintain s that ATA could not Ðacknowledge

and certify Ñ as part of its application that it would later

certify that it had Ð ability to proceed Ñ because the RFA ( at

Section Four 10.b.(2)(b) quoted above ) requires that Ðsewer

serviceÑ be Ðin placeÑ for ATAÓs proposed development as of the

a pplication d eadline . TC also a ssert s that the Certification of

Sewer Capacity Form explicitly states (a nd that any service

provider l etter must , too) that no moratorium is applicable to a

proposed development.

38 . ATA did not submit a Certification of Sewer Capacity

Form. Miami - Dade County will not complete such forms. The

Ðletter of availabilityÑ option was created to accommodate

Miami - Dade County.

3 9. The November 12, 2013, letter from Miami - Dade Water

and Sewer regarding ATAÓs development does not state that there

is no applicable moratorium in effect. In fact, the letter

affirmatively acknowledges that flow to the gravity system

already connected to the property cannot be increased because

there is a mor atorium in effect as to the pumping station

serving the abutting gravity sewer basin.

40 . The letter from the County states that , if the pumping

station is still in Moratorium Status Ðat the time this project

is ready for construction,Ñ that a private p ump station is

acceptable. It is logical to conclude that this means sewer

service would be available at that time and that sewer service

was similarly available at the time of application deadline.

The letter , therefore , implies, but does not specifically stat e,

that Ðsewer service is available to the proposed development as

of the application deadline . Ñ

41 . The moratorium in effect at the application deadline

was not a Ð general Ñ moratorium . I t applied only to the pump

station serving the abutting gravity sewer basin, but it was

applicable to the proposed development and precluded any

increase in the flow to the gravity system connected to the

property . A moratorium pertaining to sewer service applicable

to ATAÓs proposed development was in effect at the time th at

ATAÓs application was submitted. Sewer capacity was otherwise

available for the proposed development through use of a private

pump station.

42 . ATA asserts , first, that ATA has not yet filed

certification of ability to proceed or the required forms or

letter , that it is not to do so until after it is invited to

enter credit underwriting, that FHFC has consequently yet to

make a determination as to ATAÓs ability to proceed, and that

therefore any issue s as to site plan or sewer service are not

yet ripe for consideration.

43 . As to the site plan, ATA further maintains that even

if it had been required to provide evidence of ability to

proceed as part of its application , the site plan submitted to

the Ci ty of Miami did not represent that the alley was part of

the ATA site. ATA , therefore , asserts that the site plan that

was reviewed was the correct one, and that its application

certification was correct.

44 . The plan of the site of ATAÓs development project

indicates that the site is bifurcated by a private alley, which

is not dedicated as a street, avenue , or boulevard.

45 . The legal description of the development project, as

submitted to the Department of Planning and Zoning of the City of

Miami, included lots 2 through 7 and lots 19 and 20. It did not

include the strip of land that lies between these lots (lots 2

through 7 lie to the West of the alley and lots 19 and 20 lie to

the East of it.)

46 . As to sewer availability, ATA as serts that the 2011

Universal Cycle and the RFA are significantly different . ATA

maintains that while the former provided that the existence of a

moratorium pertaining to sewer service meant that infrastructure

was unavailable, this la nguage was removed from the RFA. ATA

contends that a letter of availability need not ÐmimicÑ the

Certification of Sewer Capacity Form and that the RFA allows a

development to certify sewer availability by other means when a

moratorium is in effect.

47 . Mr. Reecy testified that FHFC takes th e certifi ed

application a t face value , regardless of what other information

the Corporation might have at hand. As to the site plan, h e

testified that even had site plan approval been a part of the

scoring process, FHFC would not have found ATAÓs application

ineligible on that ground. He testified that the alley would

not be a problem unless it was a ÐroadÑ or something similar.

He testified that it also could have been a problem if the

measurement point to measure the distance to nearby amenities

was not on the property, but he was not aware that that was the

case in ATAÓs application.

48 . As for sewer service, Mr. Reecy testified that a

letter from the service provider does not have to say ÐexactlyÑ

what is on the form , but stated that it does ha ve to give Ð the

relevant informationÑ to let FHFC know if sewer is Ðpossible.Ñ

He testified that the only guidance as to what constituted sewer

ÐavailabilityÑ was contained in the criteria found on the

Certification of Sewer Capacity Form .

4 9. One of the four numbered requirements on the

Certification of Sewer Capacity Form is that there are no

moratoriums pertaining to sewer service that are applicable to

the proposed development.

50 . Under the RFA, the Certification of Sewer Capacity

Form could not be completed for a proposed development for which

a moratorium pertainin g to sewer service was in effect at the

time the application was submitted. The form could not be

certified by the service provider even if it was possible for

such a development to obtain sewer service by other means. T he

text on the 2013 form is substantively identical to that on the

form used during the 2011 Universal Cycle, that wording was

specifically drafted to require that any moratorium on sewer

infrastructure would be a disqualifying criterion, and the 2013

Certification of Sewer C apacity Form still has that effect. No

challenge to the use of the form in the RFA was filed . E ven

though the language of the 2011 Universal Cycle which paralleled

th e text o n the form does not appear in the RFA , that criterion

remains as part of the RFA because of the incorporated

Certification of Sewer Capacity Form.

51 . In any event, th e site plan and sewer availability

issue s must await at least initial resolution by FHFC during the

credit underwriting phase. The testimony of Mr. Reecy clearly

indicate d that FHFC interprets the RFA specifications and its

rules to move consideration of site plan issues and

infrastructure availability to the credit underwriting phase. It

has not been shown that this is an impermissible interpretatio n .

Town CenterÓs Application

52 . Pinnacle alleges that TCÓs application fail s to

demonstrate site control , because the applicant, Town Center

Phase Two, LLC, is not the buyer of the site it intends to

develop .

53 . T he RFA requires at Section Four A.7. that an applicant

must provide a copy of a contract, deed, or lease to demonstrate

site control:

7. Site Control:

The Applicant must demonstrate site control

by providing, as Attachment 7 to Exhibit A,

the documentation required in Items a., b.,

and/or c., as indicated below. If the

proposed Development consists of Scattered

Sites, site control must be demonstrated for

all of the Scattered Sites.

a. Eligible Contract - For purposes of the

RFA . . . the buyer MUST be the Applicant

unless an assignment of the eligible contract

which assigns all of the buyer's rights,

title and interests in the eligible contract

to the Applicant, is provided. If the owner

of the subject property is not a party to the

eligible contract, all documents evidencing

intermedia te contracts, agreements,

assignments, options, or conveyances of any

kind between or among the owner, the

Applicant, or other parties, must be provided

. . . .

RFA at page 23 .

54 . T he Contract for Purchase and Sale of Real Property

submitted as Attachmen t 7 to TCÓs application is signed by

Mr. Milo, who is identified as Vice President. The Buyer on the

signature page is incorrectly listed as RUDG, LLC.

55 . No other assignment, intermediate contract, agreement,

option, or conveyance was included with TCÓs application to

indicate that TC otherwise had site control of the property.

56 . The applicant entity, Town Center Phase Two, LLC, is

correctly listed in the opening paragraph of the Contract for

Purchase and Sale of Real Property a s the ÐBuyer.Ñ

57 . RUDG, LLC , is the 99. 9 9 percent Member of Town Center

Phase Two, LLC, and is also the sole Member and Manager of Town

Center Phase Two Manager, LLC , which is the .01 percent Managing

Member of Town Center Phase Two, LLC.

58 . Mr. Milo is a Vice President of RUDG, LLC, a Vice

President of Town Center Phase Two Manager, LLC, and a Vice

President of the applicant , Town Center Phase Two, LLC.

5 9. Florida Administrative Code Rule 67 - 60.008, provides

that the Corporation may waive minor irr egularities in an

otherwise valid application.

60 . The term ÐMinor IrregularityÑ is defined by r ule 67 -

60.002(6), as follows:

(6) ÐMinor IrregularityÑ means a variation

in a term or condition of an Application

pursuant to this rule chapter that does not

provide a competitive advantage or benefit

not enjoyed by other Applicants, and does

not adversely impact the interests of the

Corporation or the public.

61 . Mr. Reecy testified that FHFC interpreted the rule to

mean that if information requested by t he RFA is reasonably

available within the Application, even if it was not provided

exactly in the place where it was requested, the failure to have

it in the particular place it was requested is a minor

irregularity.

62 . Although the information on the si gnature page of the

Contract for Purchase and Sale of Real Property identifying the

Buyer as RUDG, LLC, was a discrepancy in the application, the

contract elsewhere identified Town Center Phase Two, LLC, as the

Buyer, and Mr. Milo was , in fact , authorized to sign for the

true Buyer .

63 . Ms. Amy GarmonÓs deposition testimony indicated that

because she was able to determine from other places in the

application that the Buyer was the applicant, and that Mr. Milo

was authorized to sign for the Buyer, she found this portion of

TCÓs application to be compliant , and she didnÓt see that there

was a Ðminor irregularityÑ that needed to be waived. However,

it is determined that FHFC actually did finally determine that

the error in identification constitute d a mi nor irregularity

that was waived, in accordance with Mr. ReecyÓs testimony.

Although it was Ms. Garmon who called attention to the

irregularity, Mr. Reecy is in a position of higher authority

within the FHFC and is better able to address the CorporationÓs

actions with respect to TCÓs application.

64 . Pinnacle also asserts that TCÓs finance documents

fail , based upon the same signature issue.

65 . TC submitted equity proposals detailing its

construction funding sources that were addressed to Mr. Milo and

endorsed by him as ÐVice President.Ñ

66 . FHFC similarly concluded that Mr. Milo had authority

to endorse the finance letters on behalf of TC.

67 . There is evidence to support FHFCÓs findings that TC

was the actual Buyer, that Mr. Milo had authority to sign the

contract and the equity documents, and that the discrepancies in

the documents were minor irregularities .

PinnacleÓs Applicat ion

68 . The equity commitment letter from Wells Fargo Bank

regarding Pinnacle Ós development, as submitted to FHFC,

contained only pages numbered one, two, and four of a four - page

letter. It is clear that page three is actually missing and the

letter was not simply incorrectly numbered, because of

discontinuity in the text and in the numbering of portions of

the letter.

69 . APC contends that PinnacleÓs application should have

been deemed ineligible for award because of the missing page.

70 . Mr. Reecy testified that even though a page of

PinnacleÓs equity commitment letter was missing , all of the RFA

requirements were set forth in the remaining pages. He

acknowledged that the missing page might have included

unacceptable conditions for closing or information that was

inconsistent with the other things in the application, but

st ated that FHFC determined that the missing page from

PinnacleÓs equity letter was a minor irregularity.

71 . There is evidence to support FHFCÓs finding that the

missing page was a minor irregularit y .

APCÓs Application

72 . The RFA provides at Section Four, A.3. c., at page 5:

c. Experienced Developer(s)

At least one Principal of the Developer

entity, or if more than one Developer

entity, at least one Principal of at least

one of the Developer entities, must meet the

General Developer Experience requi rements in

(1) and (2) below.

(1) General Developer Experience:

A Principal of each experienced Developer

entity must have, since January 1, 1991,

completed at least three (3) affordable

rental housing developments, at least one

(1) of which was a Housing Credit

development completed since January 1, 2001.

At least on e (1) of the three (3) completed

developments must consist of a total number

of units no less than 50 percent of the

total number of units in the proposed

Development. For purposes of this

provision, completed for each of the three

(3) developments means (i) that the

temporary or final certificate of occupancy

has been issued for at least one (1) unit in

one of the residential apartment buildings

within the development, or (ii) that at

least one (1) IRS Form 8609 has been issued

for one of the residential apartment

buildings within the development. As used

in this section, an affordable rental

housing development, including a Housing

Credit development that contains multiple

buildings, is a single development

regardless of the number of buildings within

th e development for which an IRS Form 8609

has been issued. If the experience of a

Principal for a Developer entity listed in

this Application was acquired from a

previous affordable housing Developer

entity, the Principal must have also been a

Principal of that previous Developer entity.

(2) Prior General Development Experience

Chart:

The Applicant must provide, as Attachment 4

to Exhibit A, a prior experience chart for

each Principal intending to meet the minimum

general development experience reflecting

the required information for the three (3)

completed affordable rental housing

developments, one (1) of which must be a

Housing Credit development.

Each prior experience chart must include the

following information:

Prior General Development E xperience Chart

Name of Principal with the Required Experience: ____ __________________________ _______

Name of Developer Entity (for the proposed Development) for which the above Party is a Principal: Name of Development Location Location Affordable Housing Program that Total Number ________________ _____ Year

(City & State) Provided Financing Of Units Completed

ment) for which the above Party is a Principal:

RFA at pages 5, 6.

73 . Exhibit A to the RFA, at 3. c . , further provides:

General Developer Experience

For each experienced Developer entity, the

Applicant must provide, as Attachment 4, a

prior experience chart for at least one (1)

experienced Principal of that entity. The

prior experience chart for the Pr incipal

must reflect the required information for

the three (3) completed affordable rental

housing developments, one (1) of which must

be a Housing Credit development.

RFA at page 41.

74 . Ms. OÓNeill, a Senior Policy Analyst at FHFC and

member of the Review Committee responsible for scoring the

applicationsÓ developer information section , testified at

hearing. W hen FHFC first started scoring applications,

Ms. OÓNeill was not taking any act ion to confirm p rincipal

develop er experience, but rather was taking the information

provided by applicants at face value , as it had been submitted

on the chart.

75 . A colleague of Ms. OÓNeillÓs , not serving on the

Review Committee, called her attention to the fact that a

development that was then going through credit underwriting

( following an award during the 2011 funding cycle) had recently

requested that FHFC approve a change to the developer en t ity .

Ms. OÓNeill testified that this request raised a question at

FHFC as to whether Ms. Wong , listed by APC as the principal with

the required experience, m et the requirement s . FHFC decided to

confirm that Ms. Wong had the required experience for the

developments listed in the RFA .

76 . Ms. OÓNeil l stated that she did not make any inquiry

to Ms. Wong or to Atlantic Pacific Communities as to whether

Ms. Wong was, in fact, a p rincipal of St. LukeÓs Development,

LLC, developer of St. LukeÓs Life Center , because ÐweÓre not

really supposed to do that.Ñ Ms. OÓNeill instead looked at

portions of a credit underwriting report on the St. LukeÓs Life

Center project that were researched and shown to her by a

colleague . Ms. OÓNeill did not see Ms. Wong listed in that

report as a p rincipal. She did find infor mation in FHFC files

that Ms. Wong was a principal on the other two listed

developments.

77 . Ms. Thorp testified that she researched several

documents in FHFCÓs possession and found no information

indicating that Ms. Wong was a principal for the St. LukeÓ s

development . She testified that Ms. Wong or another

representative of APC was not contacted about the issue because

that would have given them an unfair advantage over other

applicants.

78 . Based upon th e information in its files , FHFC

determined that Ms. Wong did not meet the requirements for

p rincipal developer experience.

7 9. FHFC then similarly reviewed the files of other

applicants who had listed in - state developments as their

experience, but was unable to review out - of - state experience, so

out - of - state experience continued to be accepted at face value.

80 . Ms. Wong was not originally a principal in the

St. LukeÓs development . However, it was demonstrated at hearing

through documentary evidence that Ms. Wong was later appointed

an officer of St. LukeÓs Development, LLC, effective March 2007 .

That change was submitted to the credit underwriter , and Ms.

Wong was a principal for the developer entity before it

completed credit underwriting .

81 . Both Ms. OÓNeill and Ms. Thorp testified that if the

documents provided at hearing by APC had been in FHFCÓs

possession at the time APCÓs application was scored , FHFC would

have found that Ms. Wong was a principal of the St. LukeÓs

development and that her experience met principal developer

exper ience requirements.

82 . In light of the evidence presented at hearing , it is

clear that FHFC Ós conclusion was wrong . The prior experience

chart submitted by APC as part of its application provided all

of the information requested by the RFA, and all of that

information was accurate. The information available to FHFC in

the application correctly indicated that Ms. Wong was a

principle for the developer of the St. LukeÓs Life Center

development. APCÓs application met all requirements of the RFA

with resp ect to prior developer experience.

83 . The CorporationÓs preliminary determination s that

Ms. Wong was not a principal in the St. LukeÓs development, and

that the APC application did not , therefore , meet principal

experience requirements to the contrary, made in good faith

based upon incomplete information contained in its files , was

clearly erroneous.

84 . FHFCÓs contention that APC should have submitted

explanations or further documentation of Ms. WongÓs developer

experience at the time it submitted i ts application is

untenable. APC submitted all of information requested of it.

FHFC asked for a chart to be completed, which APC did,

completely and accurately. An applicant cannot be found

ineligible for failing to do more than was required by the RFA .

Cr edit Underwriting

85 . A comparison of the RFA and rules with the 2011

Universal Cycle process shows that the Corporation has moved

many requirements formerly required as part of the eligibility

and scoring phase into a second review in the credit

under writing phase , as noted earlier . Rule 67 - 48.0072 provides

in part:

Credit underwriting is a de novo review of

all information supplied, received or

discovered during or after any competitive

solicitation scoring and funding preference

process, prior to the closing on funding,

including the issuance of IRS Forms 8609 for

Housing Credits. The success of an

Applicant in being selected for funding is

not an indication that the Applicant will

receive a positive recommendation from the

Credit Underwriter or t hat the Development

teamÓs experience, past performance or

financial capacity is satisfactory.

86 . The rule goes on to provide that this de novo review

in the credit underwriting p hase includes not only economic

feasibility, but other factors statutori ly required for

allocation of tax credits, such as evidence of need for

affordable housing and ability to proceed. These factors might

cause a n application to fail and never receive funding , even

though it was nominally ÐawardedÑ the credits earlier. In that

event, the RFA provides :

Funding that becomes available after the

Board takes action on the CommitteeÓs

recommendation(s), due to an Applicant

declining its invitation to enter credit

underwriting or the ApplicantÓs inability to

satisfy a requirement outlined in this RFA,

and/or Rule Chapter 67 - 48, F.A.C., will be

distributed to the highest scoring eligible

unfunded Application located in the same

county as the Development that returned the

funding regardless of the Funding Test. If

there is not enough funding available to

fully fund this Application, it will be

entitled to receive a Binding Commitment for

the unfunded balance.

If an applicant nominally ÐawardedÑ funding in the eligibility

and scoring phase fails credit underwriting, the next a pplicant

in the queue of eligible applicants may still be granted

funding , and so , is substantially affected by FHFCÓs decisions

in the cr edit underwriting phase.

CONCLUSIONS OF LAW

87 . The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter of this

proceeding under sections 120.569 and 120.57(3) .

88 . Section 420.507, Florida Statutes, provides statutory

authority for the Corporation to allocate low - income housing tax

credits by competitive solicitation. It 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

revenue bonds, and State Apartment Incentive

Loan Program funds appropriated by the

Legislature and available to allocate by

request for proposals or other competitive

solicitation.

8 9. Protests to competitive contract solicitations or awards

a re governed by section 120.57(3) (f) , which provides in part 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 rejectio n of all bids, proposals, or

replies, the administrative law judge shall

conduct a de novo proceeding to determine

whether the agency's proposed action is

contrary to the agency's governing statutes,

the agency's rules or policies, or the

solicitation spec ifications. The standard

of proof for such proceedings shall be

whether the proposed agency action was

clearly erroneous, contrary to competition,

arbitrary, or capricious.

9 0 . As part ies c hallenging FHFCÓs proposed award action ,

Petitioners Pinnacle, TC, and APC bear the burden of proof .

9 1 . All Petitioners have standing. While applicable rules

do not expressly require applicants to be both responsive and

responsible, these factors are inherently part of the standing

requirement in competitive solicitations. Intercontinental

Props. , Inc. v. DepÓt of HRS , 606 So. 2d 380 (F la. 3d DCA 1992);

Preston Carroll Co. v. Fla. Keys Aqueduct Auth. , 400 So. 2d 524

(Fla. 3d DCA 1981). Pinnacle and TC were correctly found

eligible by FHFC, but have higher lottery numbers than

Intervenors. APC demonstrated its eligibility at hearing. A ll

three Petitioners were responsive to the solicitation. Any one

of these applicants may yet be awarded housing credits if it is

found responsible while all of those ahead of it are not.

Capeletti Bros. , Inc. v. DepÓt of Gen. Svcs. , 432 So. 2d 1359,

136 0 n.1 (Fla. 1st DCA 1983). Only those applicants having the

capability, financial and otherwise, to fully perform all

requirements of the RFA are responsible. Couch Constr . Co. v.

DepÓt of Transp. , 361 So. 2d 184, 187 (Fla. 1st DCA 1978).

Responsibility under the unusual bifurcated allocation process

established by the RFA will not be completely determined until

the credit underwriting phase, applying statutorily required

responsibility criteria for the allocation of tax credits. Each

Pet itionerÓs substantial interests are affected by FHFCÓs

decisions as to other applicants in both phases of this

bifurcated allocation process.

9 2 . Although chapter 120 uses the term Ðde novoÑ when

describing competitive solicitation protest proceedings, co urts

have recognized that a different kind of de novo is contemplated

than for other substantial interest proceedings under section

120.57. Bid disputes are a "form of intr a - agency review" in

which the object is to evaluate the action taken by the agency.

State Contracting and Eng'g Corp. v. Dep't of Transp., 709 So.

2d 607, 609 (Fla. 1st DCA 1998).

9 3 . P roceedings to challenge a competitive award are not

simply a record review of the information that was before the

agency . T hey remain Ð de novo Ñ in the sense that in the chapter

120 hearing the evidence adduced is not restricted to th at which

was earlier before the agency when making its preliminary

decision. A new evidentiary record based upon the historical,

objective facts is developed. Aspha lt Pavers, Inc. v. D epÓt of

T ransp. , 602 So. 2d 558 (Fla. 1st DCA 1992) . The new findings

of fact must support the final order to be issued by the agency.

Gtech Corp. v. Dep't of Lottery , 737 So. 2d 615, 619 (Fla. 1st

DCA 1999)(in bid protests, as in oth er formal hearings, agency

may reject findings of fact only if they are not supported by

competent and substantial evidence).

9 4 . While facts are determined based upon new evidence ,

applicants are not permitted to retroactively submit information

required by the solicita t ion , but omitted from the ir proposal.

S ection 120.57(3) provides that Ðno submissions made after the

bid or proposal opening which amend or supplement the bid or

proposal shall be considered. Ñ The application o r proposal must

therefore stand on its own, as originally submitted, in light of

determined facts. § 120.57(3) , Fla. Stat .

9 5 . After determining the relevant facts based upon

evidence presented at hearing, the agency's intended action must

be considered in light of those facts , and the agencyÓs

determinations must remain undisturbed unless clearly erroneous,

contrary to competition, arbitrary, or capricious. A proposed

award will be upheld unless it is contrary to governing

statutes, the agencyÓs rules, or the solicitation

specifications.

9 6 . The Ðclearly erroneousÑ standard of review has been

applied to both findings of fact and conclusions of law. A

factual finding is clearly erroneous when the reviewer is Ðleft

with a definite and firm conviction that a mistake has been

made.Ñ Tropical Jewelers , Inc. v. Bank of Am ., N.A. , 19 So. 3d

424 (Fla. 3d DCA 2009); Brand v. Florida Power Corp. , 633 So. 2d

504 (Fla. 1st DCA 1994). As applied to conclusions of law, t he

court in Colbert v. Dep ar t ment of Health , 890 So. 2d 1165, 1166

(Fla. 1st DCA 2004) , found that the clearly erroneous standard

required that "the interpretation will be upheld if the agency's

construction falls within the permissible range of

interpretations. Ñ However, defer ence need not be given to an

agency interpretation which conflicts with the plain and

ordinary intent of the law. Fla. Hosp. v. Ag. f or Health Care

Admin. , 823 So. 2d 844, 845 (Fla. 1st DCA 2002).

9 7 . An agency action is "contrary to competition" if it

unreasonably interferes with the purposes of competitive

procurement, which ha ve been described in Wester v. Belote , 138

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

collusive contracts and securing fair competition upon equal

terms to al l bidders.

9 8 . An action is "arbitrary if it is not supported by

logic or the necessary facts," and "capricious if it is adopted

without thought or reason or is irrational." Hadi v. Lib.

Behavioral Health Corp. , 927 So. 2d 34, 38 (Fla. 1st DCA 2006).

I f agency action is justifiable under any analysis that a

reasonable person would use to reach a decision of similar

importance, the decision is neither arbitrary nor capricious.

Dravo Basic Materials Co. v. Dep't of Transp. , 602 So. 2d 632,

634 n.3 (Fla. 2 d DCA 1992).

HTGÓs Application

9 9 . The Corporation interpreted the RFA and rule 67 -

48.002(89), defining Ð principal ,Ñ to require only that the

member and manager of an LLC, and not its officers, had to be

disclosed . The evidence did not show that this interpretation

was clearly erroneous, contrary to competition, arbitrary, or

capricious. State Contr. & Eng'g Corp. v. Dep't of Transp. , 709

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

100 . The CorporationÓs proposed action to award low - income

housing tax credits available through Request for Applications

2013 - 003 to HTG Miami - Dade 5, LLC, is not contrary to governing

statutes, FHFCÓs rules or policies, or the solicitation

specifications.

ATAÓs Application

101 . The challenges to ATAÓs application also involve

interpretation of specifications and rules. In State

Contr acting & Engineering Corporation v. Departmen t of

Transp ortation , 709 So. 2d 607 (Fla. 1 st DCA 1998) , the

administrative law judge determined that despite representations

made on submitted forms, the selected contractor would be unable

to meet the level of participation by disadvantaged business

enterprises (DBE) required by agency rule. The agency rejected

t his conclusion in its final order. The agency maintained that

under its specifications and rules, the forms submitted were

facially sufficient, the bid was responsive, and that a

contractorÓs ability to later meet the applicable DBE percentage

was a compl iance issue. The C ourt, concluding that the dispute

centered on interpretation of the agencyÓs rule, found no

evidence that the agencyÓs interpretation was clearly erroneous,

and affirmed the agency order.

102 . Here, while the credit underwriting phase is part of

a bifurcated and extended selection process rather than a

performance issue, FHFC similarly interprets its specifications

and rules as requiring ATA to demonstrate ability to proceed ,

not at the time of application, but only later , during the

cr edit underwriting phase . The specificationsÓ requirement that

an applicant must acknowledge and certify at the time of

application that it will later provide certifications within 21

days of the invitation to enter credit underwriting of the

4 1

status of sit e plan approval and the availability of sewer

service to the development as of the application deadline is

certainly confusing , but the CorporationÓs interpretation is not

clearly erroneous .

103 . FHFCÓs determination that the certification submitted

by ATA as part of its application met the RFA requirements w as

similarly not shown by the evidence to be clearly erroneous,

contrary to competition, arbitrary, or capricious.

104 . The CorporationÓs proposed action to award low - income

housing ta x credits available through Request for Applications

2013 - 003 to Allapattah Trace Apartments, Ltd., is not contrary to

governing statutes, FHFCÓs rules or policies, or the

solicitation specifications.

PinnacleÓs application

105 . While it is clear that Pinnacle Ós application failed

to include the entire equity commitment letter, not every

deviation from specifications necessarily results in

ineligibility. A n irregularity that does not give the applicant

a substantial advantage or benefit not enjoyed by other

applicants and so stifle competition , or does not adversely

affect the interests of the agency, may be considered a minor

irregularity. Procacci Commer. Realty v. DepÓt of HRS , 690 So.

2d 603, 606 (Fla. 1st DCA 19 97 ). The Corporation Ó s

determinatio n that PinnacleÓs omission met the definition of

minor irregularity under FHFCÓs rules, and its decision to waive

that irregularity , were not shown to be clearly erroneous,

contrary to competition, arbitrary, or capricious .

106 . The CorporationÓs proposed action determining that

Pinnacle is eligible for funding is not contrary to governing

statutes, FHFCÓs rules or policies, or the solicitation

specifications.

TCÓs Applica tion

107 . The CorporationÓs de termination that discrepancies as

to identification of the signatory on TCÓs contract and finance

documents were minor irregularities and its decision that TC is

therefore eligible to receive tax credits are also governed by

the definition of Ðminor irregularityÑ as d iscussed above.

Similar facts were involved in Intercontinental Properties, Inc.

v. Dep artment of H ealth and Rehabilitative S ervices , 606 So. 2d

380, 386 - 87 (Fla. 3d DCA 1992) . In that case, w hile not

apparent from the face of submitted documents, the evidence at

hearing revealed that the bid documents had been submitted with

full authority . The C ourt stated:

While the failure to attach proof of the

agent's authority rendered each of the two

bids technically nonconforming, both

deficiencies were easily remedied. This is

plainly the sort of deficiency which a

public agency can, in its discretion, allow

a bidder to cure after the fact .

Here, the Corporation Ós decision to waive similar discrepan cies

in TCÓs application was not shown to be clearly erroneous,

contrary to competition, arbitrary, or capricious .

108 . The CorporationÓs proposed action determining that TC

is eligible for funding is not contrary to governing statutes,

FHFCÓs rules or policies, or the solicitation specifications.

APCÓs Application

10 9. While the evidence did not demonstrate that FHFCÓs

use of information from its files was contrary to competition or

its consideration of information relating only to Florida

developments was arbitrary and capricious, APC did demonstrate

that Ms. Wong was a principal in the St. LukeÓs development and

so had the required principal developer experience. APC

demonstrated that the application it submitted was complete and

accurate concerning prior developer experience.

110 . FHFCÓs argument that the prohibition in section

120.57(3) against amending or supplementing a proposal extends

to evidence at a subsequent 120.57(1) hearing offered to show

that the application was , in fact , complete and accurate at the

time it was submitted , is not persuasive . 1 1 /

111 . The fact that FHFCÓs contrary determination was made

in good faith, based upon information then available to it, does

not insulate that preliminary decision from fact - finding in a

challenge to an award decision under 120.57(3) . Indeed , the

precise purpose of such a hearing is to provide a formal

evidentiary record upon which to base final agency action .

Following a challenge to an agencyÓs decision to accep t a

proposal , the agencyÓs final decision must be supported by the

e vidence adduced at hearing , including evidence unavailable to

the agency earlier . 12/ Gtech Corp. v. Dep't of Lottery , 737 So.

2d 615, 619 (Fla. 1st DCA 1999 ).

112 . Based upon the facts here , t he CorporationÓs

determination that APCÓs application failed to meet the required

developer experience requirements was clearly erroneous .

113 . The CorporationÓs proposed action determining that

APC Four Forty Four, Ltd. is not eligible for funding is

contrary to Section Four A.3. c. of the solicitation

specifications , setting forth general developer e xperience

requirements.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Florida Housing Finance

Corporation enter a final order finding that APC Four Forty

Four, Ltd., is eligible for funding, adjusting the Sorting Order

accordingly, and otherwise dismissing the formal written

protests of all Petitioners.

DONE AND ENTERED this 4th da y of June , 2014 , in

Tallahassee, Leon County, Florida.

S

F. SCOTT BOYD

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, 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 4th day of June , 2014 .

ENDNOT ES

1/ All references to statutes and administrative rules are to

those in effect at the time of the RFA except as otherwise

indicated.

2 / Tax credits are typically sold directly to investors or,

often times, to a syndicator who assembles a group of investors

and acts as their representative.

3 / http://portal.hud.gov/hudportal/HUD?src=/program_offices/comm

planning/affordablehousing/training/web/lihtc/b asics/syndication

4 / To be more specific, administrative appeals are governed by

section 120.57(3), Florida Statutes , except that no bond is

requ ired. Fl a . Admin. Code R. 67 - 60.009.

5 / For purposes of section 120.57(3), the request for

applications is equivalent to a Ðrequest for proposal.Ñ Florida

Administrative Code Rule 67 - 60.009(3).

6 / Both the RFA and c hapter 67 - 60 allow FHFC to waive Ðminor

irregularities.Ñ

7 / RFA at page 2.

8 / This list also includes the Broward and Palm Beach County

projects. The projects in all three counties were assigned

lottery numbers together. However, the Broward and Palm Beach

County awards are not at issue in this case.

9 / While the numbering of this rule differed in the version in

effect at the time the RFA was initially issued, the parties

stipulated at hearing that the substance of the rule was

identical in all pertinent respects throughout the eligibility

and scoring phase .

10 / No challenge was filed to RFA specifications providing that

consideration of such factors as relative need for low - income

housing, economic feasibility , and ability to proceed would be

considered only as subsequent Ðpass/failÑ issues in the credit

underwriting phase rather than through comparative evaluation to

Ð maximize use Ñ of available tax credits pursuant to sections

4 2 0. 5099(2) and 420 . 507(48) , Florida Statutes . It seems clear

that the CorporationÓs ultimate decision s regarding these

factors affect the substantial interests of at least the next

eligible applicant in line to receive funding, and s o , may not

be insulated from the disciplines of chapter 120, even if not

ripe i n this proceeding.

1 1 / No deference is given to FHFCÓs argument on this point, as

it has no special expertise or Ðsubstantive jurisdictionÑ as to

an interpretation of chapter 120. Cf . G.E.L. Corp. v. DepÓt of

Envtl. Prot. , 875 So. 2d 1257, 1263 (Fla. 5th DCA 2004) .

12/ The recent case of J.D. v. DepÓt of Child. & Fams. , 114 So.

3d 1127, 1132 (Fla. 1st DCA 2013), though not a bid protest

case, provides an excellent discuss ion of fact - finding in cases

requiring not only a Ðde novoÑ hearing but also review u nder

quasi - appellate standards. The court explains that facts are

not limited to those available to the agency , but that

determined facts must then be used to deferentially evaluate the

intended agency action, citing bid disputes.

COPIES FURNISHED :

Michael J. Glazer, Esquire

Ausley and McMullen

123 South Calhoun Street

Post Office Box 391

Tallahassee, Florida 32302

Michael P. Donaldson, Esquire

Carlton Fields Jorden Burt, P.A.

215 South Monroe Street , Suite 500

Tallahassee, Florida 32302

Donna Elizabeth Blanton, Esquire

Radey, Thomas, Yon and Clark, P.A.

301 South Bronough Street , Suite 200

Tallahassee, Florida 32301

Gary J. Cohen, Esquire

Shutts and Bowen, LLP

201 South Biscayne Boulevard

1500 Miami Center

Miami, Florida 33131

W. Robert Vez ina, III, Esquire

Vezina, Lawrence and Piscitelli, P.A.

413 East Park Avenue

Tallahassee, Florida 32301

Hugh R. Brown, Esquire

Florida Housing Finance Corporation

227 North Bronough Street , Suite 5000

Tallahassee, Florida 32301

Maureen McCarthy Daughton, Esquire

Sniffen and Spellman, P.A.

123 North Monroe Street

Tallahassee, Florida 32301

Joseph M. Goldstein, Esquire

Shutts and Bowen LLP

200 East Broward Boulevard , Suite 2100

Fort Lauderdale, Florida 33301

Brandice D. Dickson, Esquire

Penning ton, Moore, Wilkinson,

Bell and Dunbar, P.A.

215 South Monroe Street, Second Floor

Post Office Box 10095

Tallahassee, Florida 32302 - 2095

Brittany Adams Long , Esquire

Radey, Thomas, Yon and Clark, P.A.

301 South Bronough Street , Suite 200

Tallahassee, Florida 32301

Susan F. Clark , Esquire

Radey, Thomas, Yon and Clark, P.A.

301 South Bronough Street , Suite 200

Tallahassee, Florida 32301

Wellington Meffert, General Counsel

Florida Housing Finance Corporation

227 North Bronough Street, Suite 5000

Tallah assee, Florida 32301

Della Harrell, Corporation Clerk

Florida Housing Finance Corporation

227 North Bronough Street, Suite 5000

Tallahassee, Florida 32301

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit exceptions within 10 days

from the date of the Recommended Order. Any exceptions to this

Recommended Order should be filed with the agency that will

issue the final order in this case.