15-003301BID Madison Hollow, Llc And American Residential Development, Llc vs. Brixton Landing, Ltd., And Florida Housing Finance Corporation Status: Closed Recommended Order on Thursday, October 29, 2015.

Summary: Petitioners failed to demonstrate that Florida Housing's reliance on certifications by the local government was clearly erroneous, contrary to competition, arbitrary or capricious.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MADISON HOLLOW, LLC , AND

AMERICAN RESIDENTIAL

DEVELOPMENT, LLC ,

Petitioner s ,

v s . C ase N o . 15 - 3301BID

BRIXTON LANDING, LTD, AND

FLORIDA HOUSING FINANCE

CORPORATION ,

Respondent s .

_________________________________ /

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this case

on August 3 and 4, 2015, at the Division of Administrative

Hearings in Tallahassee, Florida, before Suzanne Van Wyk , a

duly - appointed Administrative Law Judge.

APPEARANCES

For Petitioners: J. Stephen Menton, Esquire

Rutledge Ecenia, P.A.

Post Office Box 551 (32302)

119 South Monroe St r eet , Suite 202

Tallahassee, Florida 32301

For Respondent Florida Housing Finance Corporation:

Chris topher Dale McGuire, Esquire

Florida Housing Finance Corporation

227 North Bronough Street

Tallahassee, Florida 32301

For Respondent Brixton Landing, Ltd.

Douglas Manson Esquire

Paria Shirzadi, Esquire

Manson Bolves Donaldson, P.A.

1101 West Swan n Avenu e

Tampa, Florida 33606

STATEMENT OF THE ISSUE

Whether Florida Housing Finance CorporationÓs (Florida

Housing) intended decision to award Respondent , Brixton Landing,

Ltd., low - income housing tax credits is contrary to Florida

HousingÓs governing statute s , rule s , or the solicitation

specification s .

PRELIMINARY STATEMENT

On November 21, 2014, Florida Housing issued Request for

Applications 2014 - 115 ( the RFA ) for the purpose of awarding tax

credits for the development of affordable housing in Broward,

Duval, Hillsborough, Orange, Palm Beach, and Pinellas Counties.

According to the terms of the RFA, only one development in the

ÐFamily or Elderly Demographic CommitmentÑ category would be

funded in Orange County.

On May 8, 2015, Florida Hous ing announced its intent to

select 10 applicants for funding under the RFA, including

Respondent , Brixton Landing . Petitioner s , Madison Hollow, LLC ,

and American Residential Development, LLC (Madison Hollow or

Petitioners ) , timely filed a Notice of Protest, and on May 2 2 ,

2015, filed their formal written notice of protest of the

intended action. Florida Housing referred Madison HollowÓs

formal protest to the Division of Administrative Hearin gs on

June 9, 2015. Brixton Land ing became a party to the case when

counsel for Brixton Landing filed a Notice of Appearance.

The final hearing took place on August 3 and 4 , 2015 , in

Tallahassee, Florida. At the final hea ring, Joint E xhibits J 1

through J 13 were admitted in evidence.

Petitioner s presented the testimony of four witnesses:

Ken Reecy, Director of Multifamily Programs for Florida Housing ;

David Evans , a civil engineer ; Patrick Law, developer and owner

of Madison Hollow; and Ed ward Williams , a land planner .

Petitioner s Ó E xhibits P1, portions of P3, P10 through P18, P23

(page s 2 and 3), P24 through P30, P33 , and P34 were admitted in

evidence. Petitioner proffered an audio recording of the July

7, 2007 , meeting of the Orange County Board of County

Commissioners.

Brixton Landing presented the testimony of three witnesses :

Scott Culp, principal at Atlantic Housing Partners; Rick

Baldocchi, a civil engineer; and Ken Reecy. Brixton Landing Ós

E xhibits R1, R4, R16 , R17, and R20 were admitted in evidence.

Brixton Landing prof f ered audio

recording s o f portions of the April 22, 2014, and November 11,

2014 , meeting s of the Orange County Board of County

Commissioners.

The undersigned granted Petitioners Ó and Brixton LandingÓs

r equest s for o fficial r ecognition of specified portions of the

Orange County Code of Ordinances.

Florida Housing called no witnesses and offered no exhibits

in evidence.

A four - volume Transcript of the proceedings was filed on

August 21 , 2015 . Respondents timely filed Proposed Recommended

Orders on Au gust 31, 2015. Petitioner s filed a Proposed

Recommended Order on September 1, 2015, to which no party

objected. Unless otherwise stated, all statutory references are

to the 2015 edition of the Florida Statutes.

FINDINGS OF FACT

1. Respondent , Florida Housing , is a public corporation

created pursuant to section 420.504, Florida Statutes (2015) .

Its purpose is to promote the public welfare by administering

the governmental function of financing affordable housing in

Florida.

2. Petitioners , Madison Hol low , LLC, and American

Residential Development, LLC (Madison Hollow or Petitioners) ,

are Florida limited liability corporations engage d in the

business of affordable housing development.

3. Brixton Landing , is a Florida limited liability

corporation als o engaged in the business of affordable housing

development.

4. Florida Housing is the housing credit agency for the

State of 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, which are made

available to the states annually by the United States Department

of the Treasury.

5. The St ate Housing Tax Credit Program is established in

Florida under the authority of s ection 420.5093 , Florida

Statutes . Florida Housing is the designated entity in Florida

responsible for allocating federal tax credits to assist in

financing the construction or substantial rehabilitation of

affordable housing.

6. Because the demand for tax credits provided by the

federal government far exceeds the supply available under the

State Housing Tax Credit Program, qualified affordable housing

developments must compe te for this funding.

7. On November 21, 2015, Florida Housing issued Request

for Applications 2014 - 115, Housing Credit Financing for

Affordable Housing Developments in Broward, Duval, Hillsborough,

Orange, Palm Beach, and Pinellas Counties (the RFA) . No

challenge was filed to the terms, conditions, or requirements of

the RFA.

8. According to the RFA, Florida Housing expected to award

up to approximately $15,553,993 in tax credits for qualified

affordable housing projects in those six large c ounties.

9. Florida Housing received approximately 58 applications

in response to the RFA. Madison Hollow, Brixton Landing,

Sheeler Club Apartments, Sheeler Club Apartments - Phase II,

Banyan Station, Lauderdale Place , and Lake Sherwood timely

submitted applications in response to the RFA requesting

financing of their affordable housing projects from the funding

proposed to be allocated through the RFA.

10. Petitioners requested an allocation of $2,110,000 in

annual tax credits for their development , Madison Hollow,

located in Orange County.

11. Brixton Landing requested an allocation of $1,330,000

in annual tax credits for Brixton LandingÓs proposed development

in Orange County.

12. On May 8, 2015, the Board of Directors of Florida

Housing approved the preliminar y rankings and allocations, and

issued its Approved Preliminary Awards/Notice of Intended

Decisio n (Notice of Intended Decision ), in which Florida Housing

scored both Madison HollowÓs and Brixton Landing Ós projects as

eligible for funding and awarded each application 23 points. In

addition, Sheeler Club Apartments , Sheeler Club Apartments -

Phase II, Banyan Station, Lauderdale Place , and Lake Sherwood

were all found to be eligible applications.

13. On that same date, Florida Housing published on its

website the Notice of Intended Decision, which included a three -

page spreadsheet listing all applications made in response to

the RFA and identifying those which were eligible and

ineligible .

Ranking and Selection Process

14. Applications were evaluated for eligibility and

scoring by a Review Committee appointed by Florida HousingÓs

executive director. Applications were considered for funding

only if they were deemed Ðeligible,Ñ based on the terms of the

RFA. Of the 58 timely - submitted applications, 52 were deemed

eligible and six were deemed ineligible.

15. The highest scoring a pplications were determined by

first sorting all eligible a pplications from highest score to

lowest score. Pursuant to the RFA, applicants could ach ieve a

maximum score of 23 points. Eighteen (18) of those 23 points

were attributable to ÐproximityÑ scores based on the distance of

the proposed development from services needed by tenants. T he

remaining five points were attributable to Local Government

Contributions.

16. In scoring housing tax credit applications, many

applicants achieve d tie scores . I n anticipation of that

occurrence , Florida Housing designed the RFA and rules to

incorporate a series of Ðtie breakersÑ to separate any scores

that tied as follows:

a. First by the ApplicationÓs

eligibility for the ÐSAIL RFA 2014 - 111

Unfunded PreferenceÑ, which is outlined in

Section One of the RFA (with Applications

that qualify for the preference listed above

Applications that do not qualify for the

preference).

b. Next, by the ApplicationÓs

eligibility for the Development Category

Funding Preference which is outlined in

Section Four A.5.c.(1)(a)(iii) of the RFA

(with Applications that qualify for the

preference listed above Applications that do

not qualify for the prefere nce);

c. Next by the ApplicationÓs

eligibility for the Per Unit Construction

Funding Preference which is outlined in

Section Four A.12.e. of the RFA, (with

Applications that qualify for the preference

listed above Applications that do not

qualify for the preference);

d. Next by the ApplicationÓs

Leveraging Classification (applying the

multipliers outlined in Exhibit C below and

having the Classification of A be the top

priority);

e. Next by the ApplicationÓs

eligibility for the Florida Job Creation

Pre ference which is outlined in Exhibit C

below (with Applications that qualify for

the preference listed above Applications

that do not qualify for the preference); and

f. Finally by lottery number,

resulting in the lowest lottery number

receiving preferen ce.

17. The Leveraging Classification is essentially a ranking

of eligible applications based upon the cost per unit (referred

to in the RFA as Total Corporation Funding Per Set - Aside Unit),

with the most cost - effective project at the top of the list and

the least cost - effective at the bottom. The top 90 percent of

applications on the list were classified as Group A and the

bottom 10 percent of applications classified as Group B.

Applicants in Group B are not eligible for funding until all

applicants in Group A are funded.

18. Pursuant to Item 9 of Exhibit C to the RFA, Florida

Housing classified Brixton Landing and Madison Hollow in the

Group A Leveraging Classification, and classified Sheeler Club

Apartments, Sheeler Club Apartments - Phase II, Banyan St ation,

and Lauderdale Place in the Group B Leveraging Classification.

19. Both Brixton Landing and Madison Hollow were scored

identically by Florida Housing, and both developments are

located in Orange County. Because the RFA provide d that only

one project will be funded in each county, and because Brixton

Landing had a lower lottery number than Madison Hollow, Brixton

Landing was selected for funding.

20. A total o f 52 applications were found to be eligible

for funding. According to the leveraging calculations, the

Group B applications were removed from consideration for

funding. Brixton Landing was number 45 on the list, thus

classified in Group A. Brixton Landing will be moved to Group B

classification, if at least two of the fiv e applications in

Group B are found to be ineligible. If Brixton Landing is moved

into Group B, Madison Hollow will be eligible for funding.

The Challenged Applications

21 . Madison Hollow alleges that the applications for

Sheeler Club Apartments and Sheeler Club Apartments - Phase II

should have each been found ineligible for failure to

demonstrate the Ðability to proceedÑ required in the RFA.

Madison Hollow also alleges that the applications for B anyan

S tation and Lauderdale Place should have each been found

ineligible for failure to fully disclose the principals of the

applicant and developer. 1 /

22 . Madison Hollow is thus in the unusual position of

challenging four applicants who were not selec ted for funding

and are not parties to this case. Brixton Landing is in the

equally unusual position of defending the applications of those

four unfunded applicants.

A. Sheeler Club

23 . Atlantic Housing Partners ( Atlantic) submitted two

applications in response to the RFA. Sheeler Club Apartments

was an application for development of affordable multifamily

units to serve a family demographic . Sheeler Club Apartments -

Phase II was an application for development of multi - family

garden homes to serve an elderly demographic . The projects were

proposed to be located adjacent to each other.

24 . The RFA sets forth the following specific requirements

for applicants to dem onstrate the ability to proceed:

5. f. Ability to Proceed:

The Applicant must demonstrate the following

Ability to Proceed elements as of

Application Deadline, as outlined below.

* * *

(1) Status of Site Plan Approval. The

Applicant must demonstrate the status of

site plan approval as of the Application

Deadline by providing, as Attachment 7 to

Exhibit A, the properly completed and

executed Florida Housing Finance Corporation

Local Government Verification of Status of

S ite Plan Approval for Multifamily

Developments form (Form Rev. 11 - 14).

(2) Appropriate Zoning. The Applicant must

demonstrate that as of the Application

Deadline the proposed Development site is

appropriately zoned and consistent with

local land use re gulations regarding density

and intended use or that the proposed

Development site is legally non - conforming

by providing, as Attachment 8 to Exhibit A,

the applicable properly completed and

executed verification form:

(a) The Florida Housing Finance

Co rporation Local Government

Verification that Development is

Consistent with Zoning and Land Use

Regulations form (Form Rev. 11 - 14); or

(b) The Florida Housing Finance

Corporation Local Government

Verification that Permits are not

Required for this Devel opment form

(Form Rev. 11 - 14).

25 . Similarly, the RFA requires applicants to submit forms

t o demonstrate availability of electricity, water, sewer, and

roads to serve the proposed development.

26 . The Verification of Status of Site Plan Approval form

(Site Plan form) must be completed by the local government

official responsible for determination of issues related to site

plan approval within the applicable jurisdiction. The official

must choose between two optional paragraphs related to proposals

for new construction: (1) the proposed development Ðrequires

additional site plan approval or similar processÑ and the Ðfinal

site plan . . . was approved on or before the submission

deadline for theÑ RFA; or (2) the proposed development Ðrequi res

additional site plan approval or similar processÑ and either

(a) the jurisdiction requires preliminary or conceptual site

plan approval , Ðwhich has been issued , Ñ or (b) the jurisdiction

provides neither preliminary nor conceptual site plan approval,

Ðn or is any other similar process provided prior to issuing

final site plan approval,Ñ but the site plan, in the applicable

zoning designation, has been reviewed.

2 7 . Orange County provides neither preliminary nor

conceptual site plan approval . Thus, the l ocal government

official must certify that the site plan for the proposed

project has been reviewed.

2 8 . The Local Government Verification that Development is

Consistent with Zoning and Land Use Regulations form (Zoning

form ) , requires that the local government official responsible

for issues related to comprehensive planning and zoning certify

the following: (1) the z oning designation applicable to the

property ; (2) that t he proposed number of units and intended use

are cons istent with current land us e regulat ions and the zoning

designation; (3) that there are no additional land use

regulation hearings or approvals required to obtain the zoning

cla ssification or density proposed; and (4) that there are no

known conditions tha t would preclude construction of the

proposed development on the site.

29 . It is undisputed that Atlantic submit ted both

verification forms with its application. Olan Hill, Chief

Planner for Orange County, reviewed , completed, and signed each

of these fo rms, attesting that in his opinion both of the

proposed projects would be in compliance with local zoning and

land use regulations. Mr. Hill was fully authorized to sign the

forms on behalf of Orange County.

30 . The two Atlantic projects are proposed adjacent to one

another on a site which has a Planned Development (PD) zoning

approval for development of 152 single - family townhome units in

the Medium Density Residential Future Land Use category (MDR) ,

which allows a maximum density of 20 units per acre .

31 . The CountyÓs PD zoning approval was based on review of

AtlanticÓs Land Use Plan (LUP) for the site. According to

Mr. Hill, the LUP is a Ðbubble planÑ outlining the general

entitlements and development program for the site.

32 . In the case at hand , the Atlantic site also has an

approved preliminary subdivision plan (PSP) , which is the first

step to subdivide the property. Under the PSP, the property is

proposed to be subdivided into 152 lots for development of

single - family townhomes.

33 . For purposes of certifying the Site Plan and Zoning

form s , Mr. Hill reviewed the PD LUP , not the PSP .

34 . Regarding the Site Plan form, Mr. Hill certified that ,

although the County requires no preliminary or concep tual site

plan approval process and the f inal site plan approval has not

yet been issued, the site plan for the project in the applicable

zoning classification, the PD LUP, had been reviewed.

35 . With respect to the Zoning form, Mr. Hill first

certified that the proposed number of units and intended use are

consistent with current land use regulations and the PD zoning

designation . The PD LUP limits the total number of units to

152, which would accommodate either of the Sheeler Club

applications (Sheeler Club Apartments propos es 88 units, while

Sheeler Club - Phase II proposes 64 units). The MDR land use

category allows the multi - family use s proposed for the

development up to 20 units per acre . Under the MDR category,

the 21.4 - acre site could be approved for w ell over 152 units.

36 . Mr. Hill next certified that there are no additional

land use regulation hearings or approvals required to obtain the

zoning classification or density described in that zoning

classification. The PD zoning is final and is not dep endent

up on whether Atlantic goes forward with subdivision of the

property as proposed in the existing PSP . Atlantic could

subdivide the property for a different number of lots, or in a

different configuration , without changing the zoning of the

property.

37 . Finally, Mr. Hill certified that there are no known

conditions that would preclude construction of the referenced

Development on the proposed site, assuming compliance with the

applicable land use regulati ons.

38 . There are numerous county approvals needed throughout

the development approval process. The Zoning form does not

require the local government official to certify that no

additional approvals are needed following site plan review , or

that the pro posed project is ready to begin construction.

39 . Petitioners contend that neither of the Sheeler Club

applications should have been deemed eligible because, despite

Mr. HillÓs authorized certifications to the contrary, the

projects do not have the abil ity to proceed.

40 . Petitioners do not contend that Mr. Hill was not

authorized to execute the forms, or that the certifications were

obtained through fraud or other illegality.

41 . As to the Site Plan form, Petitioners contend first

that Mr. Hill did not review a site plan for either project

proposed by Atlantic : Sheeler Club Apartments, 88 multi - family

units; or Sheeler Club Apartments - Phase II , 64 garden

apartments . Instead, Mr. Hill reviewed and certified the site

plan for Sheeler Avenue Townhomes PD, which provides for

development of single - family townhomes in a single phase over

the entire site.

42 . Petitioners argue that the PD is conditioned upon

development of townhomes in single ownership complying with

section 38 - 79(20) of the Or ange County Code of Ordinances, which

is unrelated to construction of the Ðgarden apartmentsÑ proposed

by Atlantic in its application to Florida Housing for financing .

Thus, Petitioners conclude, Mr. Hill has not reviewed a site

plan for either Sheeler Cl ub Apartments or Sheeler Club

Apartments - Phase II.

43 . Mr. Hill testified that his certification did not

depend on whether either or both of the proposed projects was

eventually developed, but that the overall site has a PD zoning

approval for a total of 152 units.

44 . Ken Reecy is the Director of Multi - family Programs for

Florida Housing. He testified the purpose of the Site Plan

form, and, for that matter, the Zoning form, is to verify Ðhigh -

levelÑ approval of the site. For example, i f the applicant

proposes a 64 - unit project, Florida Housing wants verification

that the developer will be able to deliver 64 units.

45 . As to the Zoning form, Petitioners present a parade of

objections. Petitioners argue that the proposed use of the

property for mult i - family apartments and garden apartments is

inconsistent with the zoning approval for single - family

townhomes; thus , additional land use regulation approvals are

required, contrary to the certified Zoning form.

46 . Petitioners point to the PSP approved f or the

subdivision of the property and argue that neither Sheeler Club

project could be built in conformity with the PSP, which

proposes to subdivide the property into 152 townhome lots.

47 . Relying on the PSP, Petitioners a lso arg ue that

Sheeler Club Apa rtments - Phase II has no public road access

without the Sheeler Club Apartments development, thus , Mr.

HillÓs certification as to Phase II was incorrect and the

project is not ready to proceed. Moreover, Petitioners argue

that Atlantic ÐgerrymanderedÑ the boundaries of the two project s

in order to secure the most advantageous location for the

Ðdevelopment location point Ñ ; therefore , the lot layout proposed

in the PSP cannot be achieved on either of the two projects.

Likewise, Petitioners argue the boundary is a change from the

approved PSP, which require s additional land use approvals from

the Board of County Commissioners.

48 . It is Florida HousingÓs practice to accept the zoning

and land use certifications by local officials, which it

follo wed in this case. Florida Housing does not have the

expertise, resources , or authority to evaluate local zoning and

land use decisions.

49 . Petitioners would have the undersigned perform the

analys is that Florida Housing did not and make a determinatio n

whether the Atlantic projects, as proposed, meet the

requirements for zoning and land use approvals set forth in the

certifications signed by Mr. Hill. Petitioners would have this

tribunal interpret the Orange County Code of Ordinances and make

findings regarding : whether the LUP PD would have to be amended

for Atlantic to build the projects proposed in its funding

application to Florida Housing ; whether said amendments would

constitute Ðsubstantial changesÑ to the approved PD, thus

requir ing additional public hearings; and, ultimately, whether

the Site Plan and Zoning forms were executed in error.

50 . The undersigned declines to do so, as set forth more

fully in the Conclusions of Law.

51 . In this particular case, Mr. Reecy testified that

Orange County was aware of the issues raised by Madison Hollow

and that he relied on Mr. HillÓs knowledge to make the right

call on these forms. While there was certainly an abundance of

testimony attempti ng to call into question the decisions of the

Orange County authorities, the evidence does not support a

finding that Florida HousingÓs proposed action is contrary to

the agencyÓs governing statutes, the agencyÓs rules or policies,

or the solicitation spec ifications, or that it was clearly

erroneous, contrary to competition, arbitrary, or capricious.

52 . In light of that finding, the audio recordings of

Orange County Commission Meetings proffered by both Petitioners

and Brixton Landing are not admitted . T he recordings are

irrelevant in this proceeding and have not been relied upon by

the undersigned.

B. Banyan Station and Lauderdale Place

53 . Madison Hollow allege s that two other applications,

Bany a n Station and Lauderdale Place , should have been found

ineligible for failure to disclose the principals of the

applicant and the developers , as required by RFA section

Four.A. 3 .

5 4 . Both the applicants for, and developers of , Banyan

Station and Lauderdale Place are limited liability companies

(LLCs). Section Four.A.3.d.(2) requires applicants that are

LLCs to provide a list identifying the principals of the

applicant and the principals of each developer as of the

application deadline.

55 . The RFA also direct s applicants to Section 3 of

Exhibit C Ðto assist the [a]pplicant in compiling the listing.Ñ

Exhibit C provides, Ð[t]he Corporation is providing the

following charts and examples to assist the Applicant in

providing the required list[.] The term Principal is defined in

Section 67 - 48.002, F.A.C.Ñ

56 . Florida Administrative Code Rule 67 - 48.002(93) reads ,

in relevant part , as follows :

(93) Ò PrincipalÓ means:

(c) With respect to an Applicant or

Developer that is a limited liability

company, any manager or member of the

Applicant or Developer limited liability

company, and, with respect to any manager or

member of the Applicant or Developer limited

liability company that is:

3. A limited liability company, any manager

or member of the limited liability company.

57 . Exhibit C provides the following chart applicable to

disclosure s by LLC applicants:

Identify All Managers And Identify all Members

a nd

For each Manager For each Manager For each Manager

that is a Limited that is a Limited that is a

Partership: Liability Company: Corporation:

Identify each Identify each Identify each

General Partner Manager Officer

and and and

Identify each Identify each Member Identify each

Limited Partner Director

and

Identify each

Shareholder

and

For each Member that For each Member that For each Member that

is a Limited is a Limited is a Corporation:

Partnership: Liability Company:

Identify each Identify each Identify each

General Partner Manager Officer

and and and

Identify each Identify each Member Identify each

Limited Partner Director

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.

58 . Exhibit C further provides examples of fictitious

applicants and developers followed by disclosure listings of

managers, members, general and limited partners, officers,

directors , and shareholders, as applicable.

59 . Banyan Station, a pplicant , HTG Banya n is a limited

liability company. HTG Banyan listed its managers as Matthew

and Randy Rieger, and its members as Camillus - Banya n, LLC , and

Housing Trust Group, LLC . It then listed Camillus House, Inc. ,

and RER Family Partnership, Ltd ., as sole member s of those LLC s ,

respectively .

60 . ApplicantÓs develo per is also a limited liability

company, HTG Banyan Developer, LLC. HTG Banyan Developer listed

Matthew and Randy Rieger as the developerÓs managers, and

Camillus - Banyan, LLC, HTG Affordable, LLC, and Reiger Holdings,

LLC, as its members. It listed Camil lus House, Inc., RER Family

Partnership, Ltd., and Balogh Family Investments Limited

Partnership, as members of those LLCs. HTG Banyan Developer

disclosed Matthew Reiger as the sole member of Rieger Holdings.

6 1 . Likewise, Lauderdale Place applicant, HTG Anderson,

LLC, identified its managers and members, although some members

were identified as LLCs.

6 2 . In each case, the applicant identified the principals

of the applicant and the developer down Ð two levels Ñ of

organization al structure , even though in some cases this did not

result in the disclosure of natural persons.

6 3 . Petitioners urge an interpretation of the disclosure

requirement that would require an LLC to continue to identify

members and managers until natural persons are identified.

Respondents maintain that the rule and the RFA require

disclosure of only Ðtwo levelsÑ of organizational structure , as

shown on the charts in Exhibit C .

6 4 . Petitioners did not make a showing that Florida

HousingÓs interpretation of the rule and the RFA is

unreasonable. The definition of ÐprincipalÑ of an LLC includes

members which are likewise LLCs. The assistive chart include s

disclosures at only two levels of organizational structure.

Furthermore, in Exhibit C, example 3 , the disclosure for ABC,

LLC, includes XYZ, LL C , as a member without further disclosure.

6 5 . In support of its argument, Petitioners rely upon the

language below the chart which states, Ð[f]or any Manager and/or

Member that is a natural person (i.e., Samuel S. Smith), no

further disclosure is required.Ñ

6 6 . The plain language of the cha rt states that when

disclosing managers and m embers of an LLC, for any manager or

member who is a natural person, no further disclosure is

required. The language does not state, as Petitioners would

prefer, when disclosing managers and m embers of an LLC,

disclosure must be made until all natural persons are disclosed.

CONCLUSIONS OF LAW

6 7 . Th e Division of Administrative Hearings has

jurisdiction of the parties and the subject matter of this

proceeding pursuant to sections 120.569, 120.57(1), and

120.57(3), Florida Statutes (2015) . Florida HousingÓs decisions

in this case affected the substantial interests of each of the

parties, and each has standing to challenge Florida HousingÓs

scoring and review decisions.

6 8 . T he burden of proof in this case rests with the

parties opposing the proposed agency action , se e State

Contr acting & Eng Óg Corp. v. DepÓt of Transp . , 709 So. 2d 607,

609 (Fla. 1st DCA 1998) , which must establish their allegations

by a preponderance of the evidence. DepÓt of Transp . v. J.W.C.

Co. , 396 So. 2d 778, 787 (Fla. 1st DCA 1981).

6 9 . Section 120.57(3)(f) sets forth t he rules of decision

applicable in bid protests , as follows :

Unless otherwise provided by statute, the

burden of proof shall rest with the party

protesting the proposed agency action. In a

competitive - procurement protest, other than

a rejection of all bids, proposal s, 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 specification s. The standard

of proof for such proceedings shall be

whether the proposed agency action was

clearly erroneous, contrary to competition,

arbitrary, or capricious.

70 . Although chapter 120 uses the term Ðde novoÑ when

describing competitive solicitation protest proceedings, courts

have recognized t hat a different kind of de novo is contemplated

than for other substantial interest proceedings under section

120.57 . Bid disputes are a Ðform of intra - agency review. The

judge may receive evidence, as with any formal hearing under

section 120.57(1), but the object of the proceeding is to

evaluate the action taken by the agency.Ñ State Contracting ,

709 So. 2d at 609.

7 1 . Accordingly, competitive bid protest proceedings , such

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

Administrative Law Judge is not confined to a record review of

the information before Florida Housing. Instead, a new

evidentia ry record is developed in th e hearing for the purpose

of evaluating the proposed agency action. See Intercontinental

Prop. , Inc. v. DepÓt of HRS , 606 So. 2d 380 (Fla. 1st DCA 1992);

Sunshine Towi ng at Broward, Inc. v. DepÓ t of Transp . , Case

No. 10 - 0134BID (DOAH April 6, 2014; DOT May 7, 2010).

7 2 . After determining the relevant facts based upon

evidence presented at hearing, the agencyÓs intended action must

be considered in light of those facts, and the agencyÓs

determinations must remain undisturbed unless clearly erroneous,

con trary 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.

7 3 . The Ðclearly erroneousÑ standard is generally applied

in reviewing a lower tribunalÓs findings of fact and

interpretations of the statu t es and rules it is charged with

enforcing. In a de novo proceeding , the Administrative Law

Judge is not bound by factual determinations made previously by

the agency, but an agencyÓs concl usions and applications of the

law to the facts are due some deference according to the clearly

erroneous standard of review. An agencyÓs interpretation and

application of a rule is clearly erroneous when it Ðclearly

contradicts the unambiguous language o f the rule.Ñ Woodley v.

DepÓt of HRS , 505 So. 2d 676, 678 (Fla. 1st DCA 1987). An

agencyÓs finding is clearly erroneous when it is Ðwithout

support of any substantial evidence, is clearly against the

weight of the evidence or [if the agency] has misapplied the law

to the established facts.Ñ Holland v. Gross , 89 So. 2d 25 5 , 258

(Fl a. 1956). ÐWhere a protester objects to a proposed agency

action on the ground that it violates either a governing statute

within the agency's substantive jurisdiction or the agency's own

rule, and if, further, the validity of the objection turns on

the m eaning, which is in dispute, of the subject statute or

rule, then the agency's interpretation should be accorded

deference; the challenged action should stand unless the

agency's interpretation is clearly erroneous (assuming the

agency acted in accordance therewith).Ñ Sunshine Towing , supra ,

at 38. See also Level 3 Communications, Inc. v . Jacobs , 841

So. 2d 447, 450 (Fla. 2003).

7 4 . An action is Ðarbitrary if it is not supported by

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

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

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

If agency action is justifiable under any analysis that a

reasonable person would use to reach a decision of simila r

importance, the decision is neither arbitrary nor capricious.

See Dravo Basic Materials Co. v. DepÓt of Transp. , 602 So. 2d

632, 634 n.3 (Fla. 2d DCA 1992).

7 5 . The Ðcontrary to competitionÑ standard, unique to bid

protests, is a test that applies to a gency actions that do not

turn on the interpretation of a statu t e or rule, do not involve

the exercise of discretion, and do not depend upon (or amount

to) a determination of ultimate fact. This standard is not

defined in statute or rule; however, t he l eg islative intent

found in s ection 287.001, Florida Statutes, is instructive. 2 /

7 6 . Actions that are contrary to competition include those

which: (a) create the appearance of and opportunity for

favoritism; (b) erode public confidence that contracts are

awarded equitably and economically; (c) cause the procurement

process to be genuinely unfair or unreasonably exclusive; or

(d) are unethical, dishonest, illegal, or fraudulent. Sunshine

Towing , supra , at 48. See R.N. Expertise, Inc. v. Miami - Dade

C nty . Sch. Bd. , Case No. 01 - 2663BID ( DOAH Feb. 4, 2002 ; Sch. Bd.

of Miami - Dade Cnty. March 14, 2002 ); E - Builder v. Miami - Dade

Cnty. Sch. Bd. , Case No. 03 - 1581BID ( DOAH Oct. 10, 2003 ; Sch.

Bd. of Miami - Dade Cnty. Nov. 26, 2003 ).

7 7 . The instant case is not one of first impression. A

similar situation was presented in the recent case of Houston

Street Manor LP v. Florida Housing Finance Corp oration , Case

No. 15 - 3302BID (DOAH Aug. 18, 2015; FHFC Sept. 21, 2015) . In

that case, Intervenor Pin e Grove Senior Apartments asserted that

the Houston Street application did not meet the Ð ability to

proceedÑ requirement, despite the local officialÓs

certifications. Pine Grove argued that the project had not

undergone conceptual site plan approval , which was available

from the local government . Thus, Pine Grove argued , the S ite

P lan and Z oning forms were invalid because the project did not

meet the requirements for certification stated in the forms.

7 8 . In his R ecommended O rder, Judge Van Laningham made the

following findings:

51. A good place to start in evaluating

Pine Grove 's position is with a look at the

site - plan status form's purpose. It is

clear from the language of the form that

what FHFC wants, in a nutshell, is an

authoritative statement from the local

government advising that the local

government either has approved, or is

currently unaware of grounds for

disapproving, the propose d development's

site plan. The relevance of this statement

lies not so much in its being correct, per

se, but in the fact that it was made by a

person in authority whose word carries the

weight of a governmental pronouncement. Put

another way, the statem ent is correct if

made by an official with the authority to

utter the statement on behalf of the local

government; it is a verbal act, a kind of

approval in itself.

52. FHFC might, of course, deem a fully

executed site - plan status form nonresponsive

for a number of reasons. If it were

determined that the person who signed the

form lacked the requisite authority to speak

for the government; if the statement were

tainted by fraud, illegality, or corruption;

or if the signatory withdrew his

certification, for example, FHFC likely

would reject the certification. No such

grounds were established in this case, or

anything similar.

53. Instead, Pine Grove contends that

Mr. Huxford simply erred, that he should not

have signed the Local Government

Verification of Status of Site Plan

Approval. Pine Grove makes a reasonable, or

at least plausible, case to this effect.

The fatal flaw in Pine Grove 's argument,

however, is that t he decision whether to

grant or deny this particular form of

(preliminary) local governmental approval to

Houston Street 's site plan must be made by

the local government having jurisdiction

over the proposed development, i.e, the City

of Jacksonville ÏÏ not by Pine Grove , Houston

Street , FHFC, or the undersigned.

Mr. Huxford was empowered to make the

statement for the city. He made it. No

compelling reason has been shown here to

disturb FHFC's acceptance of Mr. Huxford's

certification as a valid expression of the

City of Jacksonville's favorable opinion, as

of the application submission deadline,

regarding Houston Street 's site plan.

* * *

55. Pine Grove claims that Houston Street 's

Local Government Verification That

D evelopment Is Consistent With Zoning and

Land Use Regulations form is incorrect and

nonresponsive because Houston Street has not

yet obtained all the necessary land use

approvals, including the allegedly available

conceptual site plan approval mentioned

pr eviously. Pine Grove 's argument in this

regard is identical to its objection to

Houston Street 's site - plan status form,

which was rejected above. For the reasons

previously given, therefore, it is found

that FH FC did not err in accepting

Mr. Huxford's ve rification of consistency

with local zoning and land use regulations

as a valid expression of the City of

Jacksonville's position on these matters in

relation to Houston Street 's proposed

project.

7 9 . Judge Van LaninghamÓs findings, which wer e adopted in

Florida HousingÓs Final O rder, are persuasive. In this case,

Petitioners made numerous plausible arguments as to why the Site

Plan and Zoning verification forms may be in error . However,

Petitioners offered no compelling reason to disturb Florida

Housin gÓs acceptance of Mr. HillÓs determination s . As was noted

in Houston Street Manor , the decision whether to grant or deny

this particular form of (preliminary) local governmental

approval to AtlanticÓs applications must be made by the local

government havi ng jurisdiction over the proposed development.

Mr. Hill was the local official with authority to sign both

forms. Mr. Hill testified that the verification forms were

properly executed and accurate, and there was no evidence to

support a conclusion that h is determination was tainted by fraud

or illegality .

80 . Petitioners failed to demonstrate that Florida

HousingÓs reliance on the Site Plan and Zoning forms was clearly

erroneous. Having considered the extensive evidence presented

at the final hearing, the undersigned was not left with either a

definite or firm conviction that a mistake was made when Florida

Housing relied upon Mr. HillÓs certifications.

8 1 . Petitioners failed to demonstrate that Florida

HousingÓs reliance on the Site Plan and Zoning forms was

arbitrary or capricious. It is reasonable for Florida Housing

to rely upon the local government officialÓ s interpretation of

its site plan review process and zoning requirements in

processing applications for funding affordable housing project

applications .

8 2 . Petitioners failed to demonstrate that Florida

HousingÓs acceptance of the executed Site Plan and Zoning forms

was contrary to competition. Every applicant is required to

submit properly - executed S ite P lan and Z oning forms , and no

evidence was introduced to support a finding that AtlanticÓs

applications were treated differently from other applications.

8 3 . Both Banyan Station and Lauderdale Place disclosed the

principals of the applicant and the developer as required by the

RFA and by rule 67 - 48.002(93). Florida HousingÓs interpretation

of the RFA and the rule is entitled to deference. Petitioners

failed to establish that Florida HousingÓs inter pretation of the

disclosure rule -- requiring disclosure of only Ðtwo levelsÑ of

organizational structure -- is unreasonable.

8 4 . Petitioners failed to establish that Florida HousingÓs

decision that Banyan Station and Lauderdale Place met the

disclosure requirements of the RFA was contrary to a governing

statute, rule, or solicitation specification, or was clearly

erroneous, contrary to competition, arbitrary, or capricious.

RECOMMENDATION

Based on the foregoing Findings of Fact and Co nclusions of

Law, it is RECOMMENDED that Florida Housing Finance Corporation

enter a final order affirming Brixton Landing for funding under

RFA 2014 - 115.

DONE AND ENTERED this 2 9 th day of October , 2015, in

Tallahassee, Leon County, Florida.

S

SUZANNE VAN WYK

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

File d with the Clerk of the

Division of Administrative Hearings

this 2 9 th day of October, 2015 .

ENDNOTES

1 / In their Proposed Recommended Order, Petitioners further

allege that the Sheeler Club applications are non - responsive

because they : (1) violate Florida Administrative Code Rule 67 -

48.004, which limits submissions to one pr oject per subject

property; and (2) contain an invali d Ðdevelopment location

point.Ñ

Section 120.57(3)(b), Florida Statutes, pertaining to agency bid

protests, req uires that the formal written protest Ðshall state

with particularity the facts and law upon which the protest is

based.Ñ Petitioners did not raise either of these issues in

their Formal Written Protest and Petition for Administrative

Hearing.

Florida Administrative Code Rule 28 - 106.202 allows for amendment

of the petition at any time prior to designation of the

presiding officer, and Ðthereafter . . . only upon order of the

presiding officer.Ñ Although amendments should be liberally

allowed, an amendm ent to a bid protest petition offered after

the case is referred to the division Ðshould be scrutinized

carefully because an agency might have chosen a different forum

under those circumstances.Ñ Optiplan v. Sch. Bd. of Broward

Cnty. , 710 So. 2d 569, 571 (Fla. 4th DCA 1998)(quoting Silver

Express Co. v. Dist. Sch. Bd. of Miami - Dade Cmty. College , 691

So. 2d 1099 (Fla. 3d DCA 1997)(Nesbit, J., dissenting) (citations

omitted). Nevertheless, Petitioners neither moved to amend

their Petition to include the two newly - identified issues at any

time prior to the final hearing, nor moved to conform their

petition to the evidence presented at the final hearing. Nor

was the issue tried by consent of Respondents. Further, despite

the undersignedÓs invitation to do so , Petitioners did not cite

in their Proposed Recommended Order any authority for the

undersigned to consider those issues during the final hearing.

[T4.597:5 - 7]. For this reason , the undersigned does not include

in this Recommended Order any findings rel ated to those two

allegations.

2 / Sec tion 287.001 , Florida Statutes, reads as follows:

The Legislature recognizes that fair and

open competition is a basic tenet of public

procurement; that such competition reduces

the appearance and opportunity for

fa voritism and inspires public confidence

that contracts are awarded equitably and

economically; and that documentation of the

acts taken and effective monitoring

mechanisms are important means of curbing

any improprieties and establishing public

confidence in the process by which

commodities and contractual services are

procured. It is essential to the effective

and ethical procurement of commodities and

contractual services that there be a system

of uniform procedures to be utilized by

state agencies in managing and procuring

commodities and contractual services; that

detailed justification of agency decisions

in the procurement of commodities and

contractual services be maintained; and that

adherence by the agency and the vendor to

specific ethical consi derations be required.

COPIES FURNISHED :

Hugh R. Brown, General Counsel

Florida Housing Finance Corporation

Suite 5000

227 North Bronough Street

Tall ahassee, Florida 32301 - 1329

(eServed)

J. Stephen Menton, Esquire

Rutledge Ecenia, P.A.

Post Office Box 551 (32302)

119 South Monroe Street, Suite 202

Tallahassee, Florida 32301

(eServed)

Douglas P. Manson, Esquire

Manson Bolves Donaldson , P.A.

1101 West Swann Avenue

Tampa, Florida 33606

(eServed)

Paria Shirzadi, Esquire

Mason Bolves Donaldson, P.A.

1101 West Swann Avenue

Tampa, Florida 33606

(eServed)

Christopher Dale McGuire, Esquire

Florida Housing Finance Corporation

227 North Bronough Street

Tallahassee, Florida 32301

(eServed)

James W. Middleton, Esquire

Smith, Gambrell & Russell, LLP

Suite 2600

50 North Laura Steeet

Jacksonville, Florida 32202

(eServed)

Kenneth B. Bell, Shareholder

Gunster, Yoakley & Stewart, P.A.

Suite 601

215 South Monroe Street

Tallahassee, Florida 32301

(eServed)

Kate Flemming, Corporation Clerk

Florida Housing F inance 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

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

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.