15-002386BID Capital Grove Limited Partnership vs. Florida Housing Finance Corporation Status: Closed Recommended Order on Monday, August 3, 2015.

Summary: Protester failed to establish standing or that its application should be approved for funding.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CAPITAL GROVE LIMITED

PARTNERSHIP ,

Petitioner,

v s . Case No. 15 - 002386BID

FLORIDA HOUSING FINANCE

CORPORATION,

Respondent,

and

HTG WELLINGTON FAMILY, LLC ,

Intervenor.

______________________________/

RECOMMENDED ORDER

A final hearing was held in this matter on July 1, 2015, in

Tallahassee, Florida , before James H. Peterson, III,

Administrative Law Judge with the Division of Administrative

Hearings (DOAH) .

APPEARANCES

For Petitioner: Michael P. Donaldson, Esquire

Carlton Field Jorden Burt , P . A .

215 South Monroe Street, Suite 500

Tallahassee, Florida 32302

For Respondent: Hugh R. Brown, General Counsel

Florida Housing Finance Corporation

227 North Monroe Street, Suite 5000

Tallahassee, Florida 32301

For Intervenor: Maureen McCarthy Daughton, Esq uire

Maureen McCarthy Daughton, LLC

1725 Capital Circle Northeast , Suite 304

Tallahassee, Florida 32308

STATEMENT OF THE ISSUE

Whether Florida Housing Finance Corporation Ós (Florida

Housing , Corporation, or Respondent) rejection of the funding

for the a pplication submitted by Capital Grove Limi ted

Partnership (Capital Grove ) was contrary to Florida HousingÓs

governing statutes, rules, policies, or the specifications of

Request for Applications 2014 - 114 (the RFA ). If so, whether

Florida HousingÓs decision to fund the application submitte d by

HTG Wellington Family, LLC (HTG W ellington) , is contrary to

governing statutes, rules, policies, or the RFA specifications.

PRELIMINARY STATEMENT

Florida Housing issued the RFA on November 20, 2014,

requesting a pplications for awards of low - income housing tax

credits to assist in the development of affordable housing in

medium and small counties (including Pasco County).

On March 20, 2015, Florida HousingÓs Board of Directors

(the ÐBoardÑ) met to consider the recommendations of the staff

Review Committee regarding the RFA, and posted its Notice of

Intended Decision. This Notice set forth the scoring and

ranking of the a pplications, in which HTG Wellington was found

eligible for funding, and Capital Grove Ós a pplication was deemed

ineligible and nonresponsive.

Capital Grove and another a pplicant , Woodland Lake Family

Apartments Limited Partnership and Beneficial Communities

( Woodland Lake) , timely filed notices of intent to protest

Florida HousingÓs preliminary decisions regarding the RFA,

followed by formal written protests, pursuant t o section

120.57(3), Florida Statutes . 1/ Florida Housing subsequently

referred these cases to the Division of Administrative Hearings,

where the cases were consolidated and a hearing scheduled for

June 1, 2015. The p arties moved to continue the final hearing,

which was granted and the final hearing rescheduled for July 1,

2015. On June 23, 2015, Woodland Lake filed its Notice of

Voluntary Dismissal.

At the final hearing , the p arties offered eight exhibits

which were admitted into evidence as Joint Ex hibits J - 1 through

J - 8 . The p arties stipulate d to the authenticity and

admissibility of all Joint Exhibits admitted in this proceeding.

Motions for Official Recognition filed by Capital Grove and HTG

Wellington were granted.

At the beginning of the hearing, Capital Grove withdrew its

allegations regarding HTG WellingtonÓs Road Infrastructure Form

as set forth in paragraphs 36 - 39g of its Amended Petition.

Capital Grove presented the testimony of its corporate

representativ e, B rian Parent, and offered nine exhibits which

were admitted into evidence as Pe ti ti onerÓs Exhibits P - 1 through

P - 9 .

Florida Housing presented the testimony of Ken Reecy, its

Director of Multifamily Programs and corporate representative,

but offered no ad ditional exhibits beyond the Joint Exhibits.

HTG Wellington presented no testimony, and offered 11

exhibits which were admitted into evidence as Exhibits I - 1

through I - 11 .

The proceedings were recorded and a one - volume Transcript

of the final hearing was filed July 6, 2015. The parties were

given until July 16, 2015, to file their respective Proposed

Recommended Orders, all of which were timely filed and

considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. Florida Housing is a public corporation created

pursuant to section 420.504, Florida Statutes. Its purpose is

to promote the public welfare by administering the governmental

function of financing affordable housing in Florida. Pursuant

to section 420.5099, Florida Housing 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 a pplicant s in Florida for qualified rental housing

projects. App licant s then sell these credits to investors to

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

debt that the owner would otherwise have to borrow. B ecause 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 ten years. The amount of the annual credit is based

on the amount inves ted in the affordable housing.

4. Tax credits are made available by the U.Seasury to

the states annually.

5. Florida Housing is authorized to allocate tax credits

and other funding by means of request for proposal or other

competitive solicitation in section 420.507(48), and adopted

Florida Administrative Code c hapter 67 - 60 to govern the

competitive solicitation process for several different programs,

including the one for tax credits.

6. Rule 67 - 60.002(1) defines Ð Applicant Ñ as Ðany person or

legally - formed entity that is seeking a loan or funding from the

Corporation by submitting an a pplication or responding to a

competitive solicitation pursuant to this rule chapter for one

or more of the CorporationÓs programs .Ñ

7. Applicant s request in t heir applications a specific

dollar amount of housing credits to be given to the applicant

each year for a period of 10 years. Applicant s typically sell

the rights to that future stream of income tax credits (through

the sale of almost all of the ownershi p interest in the

Applicant entity) to an investor to generate the majority of the

capi tal necessary to construct the D evelopment. Th e amount of

housing credits an Applicant may request is based on several

factors, including but not limited to a certain p ercentage of

the projected Total Development Cost; a maximum funding amount

per development based on the county in which the development

will be located; and whether the development is located within

certain designated areas of some counties.

8. Florida HousingÓs competitive application process for

the allocation of tax credits is commenced by the issuance of a

Request for Applications. In this case, that document is

Request for Applications 2014 - 114 (the RFA). The RFA was issued

November 20, 20 14, and responses were due January 22, 2015 .

9. Capital Grove submitted Application No. 2015 - 045C in

RFA 2014 - 114 seeking $1,509,500 in annual allocation of housing

credits t o finance the construction of a 94 - unit residential

rental development in Pasco County (a Medium County), to be

known as Highland Grove Senior Apartments. HTG Wellington

submitted Application No. 2015 - 101C seeking $1,510,000 in annual

allocation of housing credits t o finance the construction of a

110 - unit multi family residenti al d ev elopment in Pasco County,

Florida , to be known as Park at Wellington Apartments. Florida

Housing has announced its intent ion to award funding to nine

Medium County Developments, including Park at Wellington in

Pasco County (Application No. 2015 - 101C), but not Highland Grove

Senior Apartments.

10. Florida Housing received 82 a pplications seeking

funding in RFA 2014 - 114, including 76 for Medium County

D evelopments. The process employed by Florida Housing for this

RFA makes it virtually impossible for more than one application

to be selected for funding in any given medium c ounty. Because

of the a mount of funding available for medium c ounties, the

typical amount of an a pplicant Ós h ousing c redit request

(generally $1.0 to $1 .5 million), and the number of m ed ium

c ounties for which developments are proposed, many medium

c ountie s will not receive an award of housing c redit funding in

this RFA. Florida Housing in tends to award funding to nine

developments i n nine different m edium c ounties.

11. The a pplications were received, processed, deemed

eligible or ineligible, scored, and ranked, pursuant to the

terms of RFA 2014 - 114; Florida Administrative Code c hapters 67 -

48 and 67 - 60; and applicable federal regulations. Florida

HousingÓs executive director appointed a Review Committee of

Florida Housing staff to evaluate the applications for

eligibility and scoring. Applications are considered for

funding only if they are deemed Ðe ligible,Ñ based on whether the

a pplication complies with Florida HousingÓs various co nten t

requirements. Of the 82 a pplications submitted to Florida

Housing in RFA 2014 - 114, 69 were found Ðeligible,Ñ and 13 were

found ineligible, including Capital Grove. Florida Housing

determined that Capital Grove was ineligible on the ground that

its Letter of Credit was deficient under the terms of the RFA.

A five - page spreadsheet created by Florida Housing, entitled

ÐRFA 2014 - 114 Î All Applications,Ñ identifying all eligible a nd

ineligible applications was provided t o all Applicant s. In

additi on to scoring, Applicant s received a lottery number to be

applied in tie situations, with the lower number given

preference. Capital Grove received lottery number 12. HTG

Wellington received lottery number 9.

12. On March 11, 2015, the Review Co mmitte e met and

considered the a pplications submitted in response to the RFA,

and made recommendations regarding the scoring and ranking of

the a pplica tions to Florida HousingÓs Board of Directors ( the

Board ) .

Capital GroveÓs Letter of Credit

13. The RFA provides for a Withdrawal Disincentive in

which an a pplicant c ould either provide a $25,000 check or a

$25,000 Letter of Credit that would be forfeited if the

a pplication was withdrawn by the a pplicant before a certain

period of time. Applicant s so withdr awing would also suffer a

de duction from the full developer - experience point total in

certain future Request s for Applicati ons issued by Florida

Housing.

14. According to specifications in the RFA, any Letter of

Credit submitted must be in compliance with all the requirement s

of subsection 4.a . of Section Three, Procedures and Provisions

of the RFA , which provides in pertinent part:

4. $25,000 Letter of Credit. Each

Applicant not submitting a $25,000

Application Withdrawal Cash Deposit (as

outlined in 3 above) must submit to the

Corporation a letter of Credit that meets

the following requirements with its

Application:

a. The Letter of Credit must:

(1) Be issued by a bank, the deposits of

which are insured by the FDIC, and which has

a banking office loca ted in the state of

Florida available for presentation of the

Letter of Credit.

(2) Be on the issuing bankÓs letterhead,

and identify the bankÓs Florida office as

the office for presentation of the Letter of

Credit.

(3) Be, in form, content and amount, the

same as the Sample Letter of Credit set out

in Item 14 of Exhibit C of the RFA, and

completed with the following:

(a) Issue Date of the Letter of Credit

(LOC) which must be no later than

January 22, 2015 .

(b) LOC number.

(c) Expiration Date of the LOC which must

be no earlier than January 22, 2016 .

(d) Issuing BankÓs legal name.

(e) Issuing BankÓs Florida Presentation

Office for Presentation of the LOC.

(f) Florida HousingÓs RFA number RFA 2014 -

114 .

(g) Applicant Ós name as it appears on the

Applicat ion for which the LOC is issued.

(h) Development name as it appears on the

Application for which the LOC is issued.

(i) Signature of the Issuing BankÓs

authorized signatory.

(j) Printed Name and Title of the

Authorized Signatory.

15. The S ample Letter of Credit included in Exhibit C ,

Item 14 of the RFA reads:

(Issuing BankÓs Letterhead)

Irrevocable Unconditional Letter of Credit

To/Beneficiary: Florida Housing Finance

Corporation

Issue Date: [a date that is no later than

January 22, 2015]

Attention: Director of Multifamily Programs

227 N. Bronough Street, Suite 5000

Tallahassee, Florida 32301

Letter of Credit No.: ___________

Expiration Date: [a date that is no earlier

than January 22, 2016]

Issuing Bank:

______________________________ ______________

Florida Presentation Office:

_________________________ ___________________

FHFC RFA # 2014 - 114

Applicant : ____________________________

Development: _________________________ _

Gentlemen:

For the account of the Applicant , we, the

Issuing Bank, hereby authorize Florida

Housing Finance Corporation to draw on us at

sight up to an aggregate amount of Twenty -

Five Thousand and No/100 Dollars

($25,000.00).

This letter of credit is irrevocable,

unconditional, and nontransferable .

Drafts drawn under this letter of credit

must specify the letter of credit number and

be presented at our Florida Presentation

Office identified above not later than the

Expiration Date. Any sight draft may be

presented to us by electronic, reprographi c,

computerized or automated system, or by

carbon copy, but in any event must visibly

bear the word Ðoriginal. Ñ If the document

is signed, the signature may consist of (or

may appear to us as) an original handwritten

signature, a facsimile signature or an y

other mechanical or electronic method of

authentication.

Payment against this letter of credit may be

made by wire transfer of immediately

available funds to the account specified by

you, or by deposit of same day funds in a

designated account you maint ain with us.

Unless we notify you in writing at least

thirty (30) days prior to the Expiration

Date, the Expiration Date of this letter of

credit must be extended automatically for

successive one - month periods.

This letter of credit sets forth in full t he

terms of our obligations to you, and such

undertaking shall not in any way be modified

or amplified by any agreement in which this

letter is referred to or to which this

letter of credit relates, and any such

reference shall not be deemed to incorporate

herein by reference any agreement.

We engage with you that sight drafts drawn

under, and in compliance with, the terms of

this letter of credit will be duly honored

at the Presentation Office.

We are an FDIC insured bank, and our Florida

Presentation Of fice is located in Florida as

identified above.

Yours very truly,

[Issuing Bank]

By

______________ ______________________________

Print Name ________________________________ _

Print Title _ _______________________________

16. Despite these requirements , Capital Grove submitted an

ÐIrrevocable Standby Letter of CreditÑ issued by PNC Bank

National Association (PNC).

17. Capital GroveÓs Letter of Credit provides, in

pertinent part:

Beneficiary: Applicant :

Florida Housing Finance Westbrook Housing Corp.

Corp. Development, LLC 4110 Southpoint Blvd.,

227 North Bronough Street Ste 206

Suite 5000 Jacksonville, Fl 32216

Tallahassee, Fl 32301

ATTENTION: DIR. OF MULTI - FBO CAPITAL GROVE FAMILY

PROGRAMS LIMITED PARTNERSHIP

IRREVOCABLE STANDBY LETTER OF CREDIT

OUR REFERENCE: 18123166 - 00 - 00

AMOUNT: USD $25,000.00

ISSUE DATE: JANUARY 20, 2015

EXPIRY DATE: JANUARY 22, 2016

EPIRY PLACE: OUR COUNTER

RE: FHFC RFA #2014 - 114

DEVELOPMENT: HIGHLAND GROVE SENIOR APARTMENTS

GENTLEMEN:

WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF

CREDIT NO. 18123166 - 00 - 000 IN FAVOR OF FLORIDA HOUSING

FINANCE CORPORATION FOR THE ACCOUNT OF WESTBROOK

HOUSING DEVELOPMENT LLC AVAILABLE FOR PAY MENT AT OUR

COUNTERS IN AN AMOUNT OF USD $25,000.00 (TWENTY FIVE

THOUSAND AND 00/100 UNITED STATES DOLLARS ) AGAINST

BENEFICIARY'S PURPORTEDLY SIGNED STATEMENT AS FOLLOWS:

"I (INSERT NAME AND TITLE) CERTIFY THAT I AM AN

AUTHORIZED REPRESENTATIVE OF FLORIDA HOUSING FINANCE

CORPORATION AND HEREBY DEMAND PAYMENT OF USD (INSERT

AMOUNT) UNDER PNC BANK, NATIONAL ASSOCIATION LETTER OF

CREDIT NO. 18123166 - 00 - 000. I FURTHER CERTIFY THAT

WEST B ROOK HOUSING DEVELOPMENT, LLC HAS FAILED TO

COMPLY UNDER THE PROJECT NAME: HIGHLAND GROVE SENIOR

APARTMENTS BETWEEN FLORIDA HOUSING FINANCE CORPORATION

AND WESTB R OOK HOUSING DEVEL OPMENT, LLC."

18. Ken Reecy, Director of Multifamily Programs for

Florida Housing, personally reviewed all Letters of Credit

submitted by RFA applic ant s, and reported his findings to the

Review Committee.

19. The Review Committee recommended finding Capital

GroveÓs a pplication nonresponsive and ineligible for funding

because Capital Grove failed to include a responsive Letter of

Credit.

20. T he Review Committee also found four other

a pplications ineligible for failing to meet the Letter of Credit

requirements, all of which used PNC Bank and involved entities

related to Capital Grove, including Westbrook Housing

Development, LLC , appearing as Co - D eveloper. All such PNC

Letters of Credit failed for the same reasons.

21. Mr. Reecy and the Review Committee found that the

Letters o f Credit from PNC Bank ( including that submitted by

Capital Grove) did not meet the facial requirements of the RFA,

in that the Letters of Credit were not in the name of the

applicant .

22. The General Partner of the applicant , Capital Grove

Limited Partnership, is Capital Grove GP, LLC. The Co - Developer

entities are JPM Development , LLC , and Westbrook Housing

Development , LLC .

23. Co - Developer Westbrook Housing Development, LLC, a

Michigan Company authorized to conduct business within the State

of Florida, is a different legal entity from Co - Developer JPM

Development, LLC .

24. Mr. Ree cy and the Review Committee also found the PNC

Letters of Credit (including t hat submitted by Capital Grove)

nonresponsive to the s pecification of the RFA because the

Letters included a condition requiring Florida Housing, in order

to draw on the Letter of Credit, to certify that the Co -

Developer (and not the applicant ) had Ðfailed to comply under

the project name: Highlan d Grove Senior Apartments .Ñ However,

under the RFA specifications, the action that is the basis for

the presentment of the Letter of Credit is a withdrawal of the

application by the applicant , not the developer.

25. Only an applicant may withdraw an a pplication.

26. If the Le tter of Credit cannot be drawn upon, the RFA

provides that the applicant , Ðshall be responsible for the

payment of the $25,000 to the Corporation; payment shall be due

from the applicant to the Corporation within 10 calendar days

following written notice f rom the Corporation.Ñ

27. Applicant Capital Grove is a single - purpose entity

that has no assets.

28. I n order to collect on the Letter of Credit submitted

by Capital Grove, Florida Housing would have to submit a

different certification than that called for under the RFA

sample letter of credit .

29. According to Kathleen Spiers, Vice President of PNC

Bank, to draw down the Letter of Credit, Florida Housing would

have to copy the statement outlined in paragraph 2 of the

Capital Grove Let ter of Credit, sign it , and submit it to PNC to

draw upon the letter of credit.

30. At the final hearing, Mr. Reecy testified , ÐI am not

prepared to certify to something that isnÓt true. I am not

going to certify that the developer didnÓt comply by the

Applicant withdrawing.Ñ

31. All other Letters of Credit submitted by applicant s

under this RFA were accepted as responsive.

HTG WellingtonÓs Unit Count

32. HTG Wellington indicated in its a pplication to Florida

Housing that its proposed Park at Welling ton Development would

be 110 multifamily units. In its a pplication for Local

Government Support, HTG Wellington described the D evelopment as

a 120 - unit , mul tifamily development in five three - story

buildings.

33. The RFA requires a minimum $50,000 L ocal G overnment

C ontribution in Pasco County for an applicant to receive the

maxi m um of five points.

34. In order to obtain a L ocal G overnment C ontribution,

tax credit developers must submit an application to Pasco County

at least six weeks before the matter is presented to the Board

of County Commissioners for approval . Pasco County , in turn ,

has their underwriter, Neighborhood Lending Partners ("NLP") ,

organize the a pplications and create an underwriting package .

NLP does not make a recommendation to the Board of County

Commissioners for funding. Rather, NLP alerts Pasco County if

there is a red flag concerning the Development and scores the

applications based upon financial stability of the organization,

financing of the project , and the development pro forma.

35. HTG Wellington submitted an application for L ocal

G overnment C ontribution to Pasco County in November 2014. The

application contemplated a 120 - unit development.

36. Impact fees schedules are adopted by the Pasco County

Board of Commissione rs. Pasco County has established an impact

fee rate for affordable and non - affordable development and the

difference between the two is multiplied by the number of units

to determine the impact fee amount.

37. The impact fee waiver amount approved for Park at

Wellington Apartments was $219,600. This amount was calculated

based up on 120 units contemplated in November 2014, multiplied

by $1830.00, which is the difference between the normal impact

fee rate , minus the rate for affordable housing development .

The $219,6 00 figure was used in HTG WellingtonÓs a pplication.

38. At 110 units (as opposed to 120 units) , the total

Local Government Contribution available to HTG Wellington is

$201,300.

39. Either amount ($219,600 or $201,300) meets the minimum

fo r HTG Wellington to receive five points for its Local

Government Contribution. T he change in the c ontribution amount

would have no effect on the scoring of the HTG Wellington

a pplication.

40. Pasco CountyÓs Man ager of Community Development and

Officer of Community Development, George Romagnoli , testified

that f or approximately 15 years, Pasco County has employed a

strategy to approve all applications for Local Government

C ontribution and then le t Florida Housing choose which

D evelopment wil l receive tax credits.

41. Pasco County is not concerned about the ultimate

accuracy of the number of units submitted for a Contribution Î -

as stated by Mr. Romagnoli: "We funded 84, 120, whatever. It's

really not material to the approval one way or the o ther."

42. Although Florida Housing approved HTG WellingtonÓs

a pplication before discovering the discrepancy, h ad Florida

Housing discovered the discrepancy in the number of units during

the scori ng process, the discrepancy would have been deemed a

minor i rregularity unless the discrepancy resulted in a change

in scoring or otherwise rendered the a pplication nonresponsive

as to some material requirement and t he discrepancy would

generally be handle d with a simple adjustment to the amount

pre sented on the a pplication Pro For ma, if necessary.

43. Additionally, changes to the number of units in a

development may be increased (but not decreased) under certain

circumstances during the c redit u nderwriti ng process which

follows the competitive solicitation proc ess.

44. The discrepancy in the number of units does not

provide any competitive advantag e to HTG Wellington.

45. The discrepancy in the number of units does not

provide a benefit to HTG Wellington no t enjoyed by others.

46. Florida HousingÓs waiver of the discrepancy in the

number of units does not adversely impact the interests of the

public.

HTG WellingtonÓs Bus Stop

47. The RFA allows an applicant to obtain 18 p roximity

points , including six points for a Public Bus Transfer Stop.

Florida Housing awarded HTG Wellington 4.5 p roximity points for

its purported Public Bus Transfer Stop.

48. The RFA defines a Public Bus Transfer Stop as:

This service may be selected by all

Applicant s, regardless of the Demographic

Commitment selected at question 2 of Exhibit

A. For purposes of proximity points, a

Public Bus Transfer Stop means fixed

location at which passengers may access at

least three routes of public transportation

via buses. Ea ch qualifying route must have

a scheduled stop at the Public Bus Transfer

Stop at least hourly during the times of

7 am to 9 am and also during the times of

4 pm to 6 pm Monday through Friday,

excluding holidays on a year - round basis.

This would include b oth bus stations (i.e.

hub) and bus stop with multiple routes. Bus

routes must be established or approved by a

Local Government department that manages

public transportation. Buses that travel

between states will not be considered.

49. In response to t his requirement HTG Wellington

submitted a Surveyor Certification Form which lists coordinates

submitted to qualify for a Public Bus Transfer Stop. The site

identified by HTG Wellington as a Public Bus Transfer Stop,

however, is not a fixed location where passengers may access at

least three routes of public transportation. While another b us

s top which serves an additional two routes is within 700 feet,

stops cannot be combined for purposes of the RFA. Therefore,

the site designated as a Public Bus Trans fer Stop by HTG

Wellington is not a Ðfixed locationÑ for purposes of the RFA and

HTG Wellington is not entitled to obtain p roximity points for a

Public Bus Transfer Stop.

50. Not including the 4.5 p roximity points for a Public Bus

Transfer Stop, HTG was awarded 11.5 total p roximity points for

selected Community Services .

51. The required minimum t otal of proximity points for

developments located in a m edium county that must be achieved in

order to be eligible to receive the maximum a mount of 18 points a s

set forth in the RFA is 9 .

52. HTG had more than the required minimum t otal of

proximity points to receive the m aximum a ward of 18 proximity

points based on its Community Services score alone.

53. The disqualification of HTGÓs submitted Public Bus

Transfer Stop would have no effect on the scoring or ranking of

the HTG Wellington a pplication , nor affect its ranking rela tive

to any other a pplication, nor affect the ultimate funding

selection .

54. The RFA requires each applicant to read and sign at

Attachment A , an Applicant Certification and Acknowledgement

Form (the Form) . The signing of the Form is mandatory.

55. Page 5, Paragraph 8 of the Form provides:

In eliciting information from third parties

required by and/or included in this

Application, the Applicant has provided such

parties information that accurately

describes the Development as proposed in

this Application. The Applicant has

reviewed the thir d party information

included in this Application and/or provided

during the credit underwriting process and

the information provided by any such party

is based upon, and accurate with respect to,

the Development as proposed in this

Application.

56. Even though there was a discrepancy in the unit

numbers submitted to Pasco County for a Local G overnment

Contribution and its a pplication submitted in response to the

RFA, HTG signed the Form. No evidence was submitted indicating

that HTG signed the Form with knowledge of the discrepancy .

CONCLUSIONS OF LAW

57. DOAH has jurisdiction over the p arties and subject

matter of this proceeding, pursuant to section 120.57 (3) .

58 . For purposes of section 120.57(3), the R FA is

equivalent to a ÐRequest for Proposal.Ñ Fla. Admin. Code R. 67 -

60.009(3).

Standing

59 . As an applicant that was awarded tax credits and whose

application was challenged in this proceeding, HTG WellingtonÓs

substantial interests are affected by the outcome of this

proceeding, and HTG Wellingto n has standing to participate as a

party . Agrico Ch em. Co. v. DepÓt of Envtl . Reg. , 406 So. 2d 478

(Fla. 2 d DCA 1981).

60 . As the party claiming that Florida HousingÓs proposed

agency action does not meet th e standards in s ection

120.57(3)( f), Capital Grove bears the burden of proof . DepÓt of

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

61 . Florida Administrative Code Rule 67 - 60.006 (1)

provides:

The failure of an Applicant to supply

required information in connection with any

competitive solicitation pursuant to this

rule chapter shall be grounds for a

determination of nonresponsiveness with

respect to its Application. If a

determination of nonresponsiveness is made

by the Corporation, the Application shall

not be considered.

62 . Even without the express requirement that applicant s

be both responsive and responsible, these factors are inherently

part of the standing requirement in a competitive solicitation,

as it is incu mbent upon a protesting party to demonstrate that

its substantial interests are affected. Preston Carroll Co. v.

Fla. Keys Aqueduct Auth. , 400 So. 2d 524 (Fla. 3d DCA 1981).

63 . I n order for Capital Grove to have standing to

challenge the scoring and ranking of the HTG Wellington

a pplication , it must first prove that its a pplication was

eligible ; otherwise , it has no substantial interests which could

be affected by Florida HousingÓ s scoring and ranking of HTG

Wellington.

64 . Even if Capital Grove could overcome the ineligibility

issue, it must still knock out HTG Wellington , which has a

better lottery number (9), to be in the funding.

Standard of Review

65 . Although c hapter 120 uses the term Ðde novoÑ when

describing competitive solicitations protest proceedings, a

different kind of de novo is contemplated than that applied in

other types of substant ial interest proceedings under section

120.57. Bid disputes are a Ðfo rm of intra - agency reviewÑ in

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

State Contracting & EngÓg Corp v. DepÓt of Transp. , 709 So. 2d

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

66 . Accordingly, competitive bid protest proceedings such

as the instant case remain de novo in the sense that the

proceedings are not confined to a record review of the

information before Florida Housing. Instead, a new evidentiary

record is developed for the purpose of evaluating the proposed

agency action. See e.g. , Asphalt Pavers, Inc. v. DepÓt of

Trans. , 602 So. 2d 558 (Fla. 1st DCA 1992) .

67 . Section 120.57(3)(f) provides, in pertinent part:

In a prot est to [a] . . . request for

proposals procurement, no submissions made

after the bid or proposal opening which

amend or supplement the bid or proposal

shall be considered . . . . Unless

otherwise provided by statute, the burden of

proof shall rest with the party protest ing

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 determine

whether the agencyÓs proposed action is

contrary to the agencyÓs governing statutes,

the agencyÓs rules or policies, or the

solicitation specifications. The standard

of proof for such proceedings shall be

whether the proposed agency action was

clearly erroneous, contrary to competition,

arbitrary, or ca pricious . . . .

68 . To find Florida HousingÓs scoring in this case to be

Ðclearly erroneous, Ñ it must be shown that Florida HousingÓs

rejection of the Capital Grove Letter of Credit falls outside

the permis sible range of interpretations [ of the RFA

specifications ]. Colbert v. Dep Ó t of Health , 890 So. 2d. 1165,

1166 (Fla. 1st DCA 2004).

69 . In order to conclude that Florida HousingÓs scoring of

the Capital Grove a pplication was arbitrary or capricious, it

must be shown that the scoring in question was performed without

the support of facts or logic (arbitrary), or taken without

thought or reason or irrationally (capricious). Agrico Chem.

Co. v. DepÓt of Envt l . Reg . , 365 So. 2d 759, 763 (Fla. 1 st DCA

1978), cert. denied , 376 So. 2d 74 (Fla. 1979).

70 . To find that Florida HousingÓs scoring in this case

was Ðcontrary to competitionÑ requires evidence demonstrating

that the scoring unreasonably interferes with the purposes of

competitive procurement. I n Wester v. Belote , 138 So. 721, 723 -

724 (Fla. 1931) , the Supreme Court of Florida , with further

elaboration, agreed with the contention that :

[T]he object and purpose of [ the competitive

bidding law ] is to protect the public

against collusive contracts; to secure fair

compe tition upon equal terms to all bidders;

to remove not only collusion but temptation

for collusion and opportunity for gain at

public expense, to close all avenues to

favoritism and fraud in its various f or ms;

to secure the best values . . . at the

lowest p ossible expense; and to afford an

equal advantage to all desiring to do

business [with the State], by providing an

opportunity for an exact comparison of bids.

71 . In this case, Capital Grove failed to establish and

the evidence was otherwise insufficien t to reasonably suggest

that Florida HousingÓs scoring was clearly erroneous, contrary

to competition, arbitrary , or capricious.

Capital GroveÓs Letter of Credit

72 . The Letter of Credit sub mitted by Capital Grove in its

a pplication for funding does not meet the facial requirements of

the RFA. As set forth in Section Three , subsection 4.a.(3) . of

the RFA, Ð The Letter s of Credit must . . . [b] e, in form,

content and amount, the same as the Sample Letter of Credit set

out in Item 14 of Exhibit C of the RFA .Ñ Rather than being a

mere example that applicant s may or may not choose to f ollow,

the RFA makes it clear that any Letter of Credit must match the

Sample Letter provided in form, content , and amount.

73 . Capital Grove Ó s Letter of Credit differs from the

mandatory Sample Letter in two significant and material aspects:

(1) it is not in the name of the applicant ; and (2) it includes

conditions not appearing in the Sample Letter. In fact, the

Sample Letter required the Le tter of Credit to be unconditional.

Florida HousingÓs determination that Capital Grove Ós Letter of

Credit was nonresponsive was not clearly erroneous , contrary to

competition, arbitrary , or capricious . Rather, in its

determination, Florida Housing followed and applied the plain

lang uage of the RFA specifications.

74 . Nor can the errors present in the Capital Grove Letter

of Credit be waived as a m inor i rregularity. Rule 67 - 60.008

provides Florida Housing with the authority to waive minor

irregular ities in a pplications . Rule 67 - 60.002(6) defines a

Ð minor i rregularity Ñ as:

[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

Applicant s, and does not adversely impact

the interests of the Corporation or the

public.

75 . The errors present in the Capital Grove Letter of

Credit constitute a significant departure from the proscribed

Sample Letter and RFA specifications and they ca nnot reasonably

be waived as a minor i rregularity . T he Letter of Credit

submitted by Capital Grove includes impermissible conditions

contrary to the Sample Letter, and is issued in the nam e of an

entity that is not the applicant . While Capital Grove argues

that these differences are meaningless in light of the Letter

being drafted Ðfor the benefit ofÑ the applicant , the fact

remains that it does not meet the form or content of an

unconditional letter of credit required by the RFA as specified

in the Sample Letter .

76 . Moreover, the terms Ð Applicant Ñ and Ð D eveloper Ñ are

separately defined in the rules governing the competitive

solic itation funding process. See Fla. Admin. Code R. 67 -

48.002.

77 . Under the facts and circumstances, Florida HousingÓs

decision to reject the Capital Grove a pplication for failing to

meet submission requirements was not clearly erroneous, contrary

to completion, arbitrary, or capricious, nor was it contrary t o

the RFA sp ecifications, or any of Florida HousingÓs policies,

rules , or governing statutes.

78 . Accordingly, Capital Grove lacks standing to bring

allegations against HTG Wellington. See paragraphs 60 - 6 4 ,

supra .

79 . Even if Capital Grove had demonstrated that its letter

of credit should be accepted , it failed to prove that its

substantial interests are affected by the award to HTG

Wellington.

80 . It is uncontested that the discrepancy in the number

of units in the HTG Wellington a pplication (110) versus a number

appearing in documentation filed with Pasco County (120) makes

no difference in the scoring or ranking of HTG Wellington Ós

a pplication, and thus cannot affect the substantial interests of

any other applicant , including Capital Grove.

81 . Both representati ves for Florida Housing (Ken Reecy)

and Pasco County (George Romagnoli) provided uncontroverted

testimony that the discre pancy in the number of units Î -

particularly where the Local Government was promised more than

that proposed to Florida Housing - - was o f no concern in terms

of the eligibility of the proposed Development for its Local

Government Contribution. The change in the amount of the

Contribution does not cause it to fall below the $50,000 minimum

to receive 5 points under the RFA specifications.

82 . Capital Grove presented no evidence or testimony in

this proceeding to show how this discrepancy could affect the

scoring or ranking of these a pplications. Under such

circumstances , the unit - count discrepancy lands squar ely within

the definition of a m in or i rregularity. I t does not result in a

scoring change, and so cannot provide any advantage or benefit

to HTG Wellington not enjoyed by other applicant s, and does not

adversely impact the interests of the Corporation or the public.

83 . Capital Grove further argu es that errors in H TG

WellingtonÓs unit count make HTGÓs Applicant Certification false

and therefore , HTG WellingtonÓs a pplication should be rejected

as nonresponsive. While Florida Housing and HTG Wellington

concede that the unit count diffe rs from that shown in certain

documentation filed with Pasco County, it creates no discrepancy

in the a pplication, where HTG Wellington consistently presents

110 as its unit c ount. Notably, nothing in the a pplication, the

testimony , or evidence presented in this proceeding prevents HTG

Wellington from increasing its unit count from 110 to 120 during

c redit u nderwriting, sh ould it so choose.

84 . Moreover, having determined that the unit count

discrepancy qualifies as a m inor i rregularity, it follows that

t he discrepancy cannot form the basis for rejection of the HTG

Wellington a pplication on the grounds that its Application

Certification is no longer valid. To conclude otherwise would

elevate the importance of an error that is insubstantial and

immaterial to the competitive scoring process.

85 . T he same reasoning applie s to the issue regarding HTG

WellingtonÓs designated Public Bus Transfer Stop. While the bus

stop provided in the HTG Wellington a pplication was not valid

for the 4.5 proximity points it was awarded, it was stipulated

that, even without those 4.5 points, HTG WellingtonÓs proximity

score was higher than the nine proximity points necessary for

the 18 - point boost to its overall score.

86 . Accordingly, disqualifica tion of the bus stop

proximity points does not result in any change to HTG

WellingtonÓs overall score and ranking among a pplications.

Thus, HTG WellingtonÓs loss of the bus stop points cannot affect

the substantial interests of Capital Grove or any other

comp eting applicant as it has no effect on the scoring or

ranking of the HTG Wellington application or any other

applicant .

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that Florida Housing Finance Corporation enter

a final order :

1. Rejecting Capital Grove Ós a pplication as nonresponsive

and denying the relief requested in its Petition;

2. C oncluding that Capital Grove lacks standing to bring

all egations against HTG Wellington; and,

3. Upholding Florida HousingÓs scoring and ranking of the

HTG Wellington a pplication.

DONE AND ENTERED this 3rd day of August , 2015, in

Tallahassee, Leon County, Florida.

S

JAMES H. PETERSON, III

Administrative Law Judge

Division of Administrative Hearings

The Desoto Building

1230 Apalachee Parkway

Tallahassee, Florida32399 - 3060

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 3rd day of August , 2015.

ENDNOTE

1/ All references to Florida Statutes and the Florida

Administrative Code are to current ve rsions unless otherwise

indicated.

COPIES FURNISHED :

Michael P. Donaldson, Esquire

Carlton Field Jorden Burt , P . A .

215 South Monroe Street, Suite 500

Tallahassee, Florida 32302

(eServed)

Hugh R. Brown, General Counsel

Florida Housing Finance Corporation

227 North Monroe Street, Suite 5000

Tallahassee, Florida 32301

(eServed)

Maureen McCarthy Daughton, Esquire

Maureen McCarthy Daughton, LLC

1725 Capital Circle Northeast , Suite 304

Tallahassee, Fl orida 32308

(eServed)

Wellington Meffert, General Counsel

Florida Housing Finance Corporation

Suite 5000

227 North Bronough Street

Tallahassee, Florida 32301 - 1329

(eServed)

Kate Flemming, Corporation Clerk

Florida Housing Finance Corporation

Suite 5000

227 North Bronough Street

Tallahassee, Florida 32301 - 1329

(eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommende d Order should be filed with the agency that

will issue the Final Order in this case.