17-000486BID Oasis At Renaissance Preserve I, Lp vs. Florida Housing Finance Corporation Status: Closed Recommended Order on Wednesday, March 15, 2017.

Summary: Petitioner proved its certification form was a minor irregularity, but failed to show Florida Housing's determination that Petitioner was ineligible was an action contrary to a governing statute, rule, or solicitation specification.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

OASIS AT RENAISSANCE PRESERVE I,

LP,

Petitioner,

vs. Case No. 17 - 0486BID

FLORIDA HOUSING FINANCE

CORPORATION,

Respondent,

and

OSCEOLA PALOS VERDES , LTD . ,

Intervenor.

_______________________________/

RECOMMENDED ORDER

Pursuant to notice, a hearing was conducted in this case on

February 10, 2017, in Tallahassee, Florida, before Administrative

Law Judge June C. McKinney of the Division of Administrative

Hearings ("DOAH") .

APPEARANCES

For Petitioner: Michael P. Donaldson, Esquire

Carlton Fields Jorden Burt, P.A.

215 South Monroe Street, Suite 500

Tallahassee, Florida 32302

For Respondent: Betty Zachem, Esquire

Marissa G. Button, Esquire

Florida Housing Finance Corporation

227 North Bronough Street, Suite 5000

Tallahassee, Florida 32301 - 1329

For Intervenor: M. Christopher Bryant, Esquire

Oertel, Fernandez, Bryant,

& Atkinson, P.A.

Post Office Box 1110

Tallahassee, Florida 32302 - 1110

STATEMENT OF THE ISSUES

The issue s in this case are whether Florida Housing Finance

Corpora tion ( " Florida Housing " or " Respondent " ) made a decision

to determine Oasis at Renaissance Preserve I, LP ( " Oasis " or

" Petitioner " ) ineligible for SAIL funding for Request for

Applications 2016 - 109 SAIL Financing of Affordable Multifamily

Housing Developments to be used in Conjunction with Tax - Exempt

Bond Financing and Non - competitive Housing Credits ( " RFA " ) , that

was contrary to a governing statute, rule, or solicitation

specification, and , if so, whether that action was clearly

erroneous, arbitrary, capricious, or contrary to competition.

PRELIMINARY STATEMENT

On September 19, 2016, Florida Housing issued the RFA, which

solicited applications to compete for an allocation of State

Apartment Incentive Loan ( " SAIL " ) funding.

The RFA was modified on Se ptember 21, October 4 , and

October 5, 2016. On October 13, 2016, applications were

submitted in response to the RFA by several d evelopers , including

Oasis and Osceola Palos Verdes, Ltd . ( " Palos Verdes " or

" Intervenor " ) .

On December 9, 2016, Florida Housing posted notice of its

intended decision to award funding to 13 applicants , including

Palos Verdes. Petitioner was determined to be ineligible for

funding. Oasis timely filed its notice of int ent to protest

followed by a formal written protest.

There being no disputed issues of material fact, this

proceeding was conducted as an informal hearing pursuant to

s ection 120.57(2), F lorida Statutes (2016) . On February 8, 2016,

the p arties submitted a Joint Pre - hearing Stipulation, in which

all parties stipulated to the material facts. The facts, where

appropriate, have been incorporated into this Recommended Order.

At hearing , the parties presented Joint Exhibits 1

through 13, which were admitted into evidence. No testimony was

offered during the hearing. The parties provided legal arguments

in support of their respective position s. The parties stipulated

to t he official recognition of any final o rders of Florida

Housing and to any applicable ru les promulgated by Florida

Housing.

Pursuant to the schedule established at the conclusion of

hearing, the proposed recommended orders were due on February 20,

2017. The proceedings were transcribed , and the parties availed

themselves of the right to submit proposed recommended orders.

T he Transcript of the hearing was filed with DO AH on February 21,

2017. The timely filed proposed r ecommended o rders have been

considered in the preparation of this R ecommended Order.

FINDING OF FACT

1. Florida Housing is a public cor poration organized

pursuant to c hapter 420, Part V, Florida Statutes, and for the

purposes of these proceedings, an agency of the State of Florida.

2. Oasis is a Florida limited partnership in the business

of providing affordable housing and is based in Atlanta, Georgia.

3. Palos Verdes is a Florida limited partnership in the

business of providing affordable housing and based in Orlando,

Florida.

4. Florida Housing administers t he governmental function of

awarding various types of funding for affordable housing in

Florida. One of the programs administered by Florida Housing is

the SAIL program, created in section 420.5087, Florida Statutes.

The administrative rules governing th e SAIL program are in

Part II of Florida Administrative Code C hapter 67 - 48 .

5. Florida Housing has the responsibility and authority to

establish procedures for allocating and distributing various

types of funding for affordable housing. In accordance wi th that

authority, Florida Housing has adopted Florida Administrative

Code Chapter 67 - 60, which governs the competitive solicitation

process for several programs, including the SAIL program. Other

administrative rule chapters relevant to the selection pro cess

are chapter 67 - 48, which governs competitive affordable

multifamily rental housing programs; Florida Administrative Code

Chapter 67 - 21, which governs multifamily mortgage revenue bonds

("MMRB") and non - competitive housing credits; and Florida

Administ rative Code Chapter 67 - 53, which governs compliance

procedures.

6 . On September 19, 2016, Florida Housing issued the RFA.

The RFA contained four funding goals, one of which is relevant to

this litigation : the goal to fund one new construction

development for elderly tenants in a medium county. The RFA

designates by name which counties are small, medium, and large

counties. Oasis and Palos Verdes both submitted applications

that would satisfy the funding goal for a medium county new

construction development for the elderly .

7 . On September 21, 2016, n otice was published in the

Flo rida Administrative Register, Volume 42, Number 184, that

Florida Housing issued a RF A , and it was open for a pplicants to

respond. That Notice of Bid/Request for Proposal stated that

" [a]ny modifications that occur to the Request for Applications

will be posted at the web site [listed above] and may result in

an extension of the deadline. It is the responsibili ty of the

Applicant to check the website for any modifications prior to the

deadline date. "

8 . The RFA wa s modified on September 21, October 4 , and

October 5, 2016. The modification on September 21, 2016,

affected provisions of the RFA not at issue in th is litigation.

The modification on October 4, 2016, contained the revisions that

are relevant to the instant litigation, specifically, the

Applicant Certification and Acknowledgement Form of the RFA, as

well as other changes to the RFA that do not affect this case.

The modification posted on October 5, 2016, extended the

Application Deadline and is not at issue in this litigation.

9. Florida Housing issued an email notification to those

that subscribed to Florida HousingÓs webBoard with each RFA

modification . The webBoard announcement for the October 4, 2016,

modification was entitled " Second Modification of RFA 2016 - 109

SAIL with Bonds " and was issued on that same day at approximately

5:12 p . m. The webBoard announcement explained , among other

revisions to the RFA, that the modification affected the

Applicant Certification and Acknowledgment.

10. The webBoard notified applicants that the Applicant

Certification and Acknowledgment Form reflecting the second

modification ( " modified form " ) was required in place of the

original ( " unmodified form " ). The webBoard announcement stated ,

" [f]or the Application to be eligible for funding, the Applicant

Certification and Acknowledgment form reflecting the

2nd Modification posted on 10 - 4 - 16 must be submitted to the

Corporation by the Application Deadline, as outlined in the RFA. "

11. A comparison of the unmodified and modified versions of

the forms indicates that the modified version has " RFA as

modified on 9 - 21 - 16 and 10 - 4 - 16 " in the top right corner. Both

versions have RFA 2016 - 109 on the bottom left corner . Page 78

added the following language to the modified version " and stating

whether the bond application process was competitive or non -

competitive. " Page 83 added the language " and if applicable,

Exhibit E of the RFA. "

12. The Applicant Certification and Acknowledgment F orm is

not an item that is scored during the RFA process. A pplicants do

not receive point s by completing the form.

13. The RFA outlines how applicants must submit

applications to Florida Housing. Specifically, RFA Section

3.A.1.e mandates applicants must:

[P] rovide to the Corporation by the

Application Deadline sealed package(s)

containing four (4) printed copies of the

final Uploaded Application (consisting of th e

Complete Online Submission Package) with all

applicable attachments, as outlined in

Section Four, with each copy housed in a

separate 3 - ringbinder with numbered divider

tabs for each attachment. The final assigned

Response Number should be reflected on each

page of the printed Application, Development

Cost Pro Forma, and Principals Disclosure

Form.

(1) One (1) printed copy of the complete

Uploaded Application with all applicable

attachments must be labeled " Original Hard

Copy " and must include the foll owing items:

(a) The required non - refundable $3,000

Application fee, payable to Florida Housing

Finance Corporation (check or money order

only); and

(b) The Applicant Certification and

Acknowledgement form with an original

signature (blue ink preferred).

(2) The remaining three (3) printed copies

of the complete Uploaded Application with all

applicable attachments should be labeled

" Copy. "

If the Applicant does not provide the

Uploaded Application and the materials listed

in (1) and (2) abov e as required by the

Application Deadline, the Application will be

rejected and no action will be taken to score

the Application.

14. RFA Section 3.F.3 . requires applicants for funding

pursuant to RFA 2016 - 109 to comply with provisions of the RFA and

each of the following c hapters 67 - 60, 67 - 48, 67 - 21, and 67 - 53.

15. Section 4 .A.1. of the RFA sets forth the Submission

Requirement for the Applicant Certification a nd Acknowledgement

Form and provides in pertinent part:

The Applicant must provide a completed

Application, Development Cost Pro Formas, and

Principals Disclosure Form (Form Rev. 08 - 16),

along with all applicable attachments

thereto, including the applicab le

certification and verification forms set out

in Exhibit B of the RFA, which includes the

following information:

A. Exhibit Items:

1. Submission Requirement:

The Applicant must include a signed Applicant

Certification and Acknowledgement form as

Attachment 1 to Exhibit A to indicate the

ApplicantÓs certification and acknowledgement

of the provisions and requirements of the

RFA. The form included in a copy of the

Application labeled " Original Hard Copy " must

reflect an original signature (blue ink is

preferred). The Applicant Certification and

Acknowledgement form is provided in Exhibit B

of this RFA and on the CorporationÓs Website

h ttp://www.floridahousing.org/Developers/Mult

iFamilyPrograms/Competitive/2016 -

109/RelatedForms/ (also accessible by

clicking here). Note: If the Applicant

provides any version of the Applicant

Certification and Acknowledgement form other

than the version included in this RFA, the

form will not be considered.

16. On October 13, 20 16, Oasis timely submitted its

a pplication, #2016 - 372S, seeking $6,000,000 in SAIL funding,

$526,500 in ELI Loan funding, and $702,270 in Non - Competitive

Housing Credits to assist in the development of a pro posed new -

construction, development for the elderly in Lee County. In its

applic ation and attachments , Oasis also indicated that it

intended to use " Non - Corporation - issued Tax - Exempt Bonds. "

17. Also on October 13, 2016, Pal os Verdes timely submitted

its a pplication, #2016 - 380BS, seeking $5,200,000 in SAIL funding,

$552,300 in ELI Loan funding, $10,000,000 in Florida Housing

issued MMRB funds, and $566,696 in Non - Competitive Housing

Credits to assist in the development of a proposed new

construction, development for the elderly in Osceola County.

18. Pursuant to the requirements of the RFA, Oasis

submitted four printed copies of its application with attachments

in separate three - ring binders by the deadline . The binder

marked " Original " contained the application and attachments. As

Attachment 1, in the " Original " bin der, a copy of the un modified

version of the Applicant Ce rtification and Acknowledgment F orm

was included with an original signa ture in blue ink. For all

three of the binders marked " Copy, " the modified version of the

Applicant Certification and Acknowledgment F orm was included as

Attachment 1.

19. Florida Housing selected a review committee to score

the applications submitted by the applicants interested in SAIL

funding. Elizabeth " Libby " OÓNeill ( " OÓNeill " ) was the member of

the Review Committee responsible for determining eligibility

based on the submission requirements. In conducting her review,

O ÓNeill opened the Oasis sealed a pplication package and

discovered that the unmodified form was submitted with the binder

stamped Original .

20. D uring OÓNeillÓs review , she also discovered the

modified form submitted in each of the Oasis binders marked Copy.

OÓNeill had all the information , a modified and an unmodified

version of the form, required to review Oa sis Ó application.

Oasis accepted the terms of the modified RFA by submitting the

modified version. OÓNeill " defaulted " to the Original

application and determined that the Oasis a pplication was

ineligible because applicants were required to submit the

mod ified version . OÓNeill also confirmed her decision with legal

staff.

21. OÓNeill also found one other applicant ineligible for

not submitting the modified form. Unlike Oasis, that applicant

failed to include the modified form in either its Original bind er

or the three binders marked C opy.

22. The Review C ommittee issued a recommendation of

preliminary rankings and allocations and the Board of Directors

("Board") of Florida Housing approved these recommendations on

December 9, 2016.

23. The Board found Palos Verdes eligible for funding and

awarded funding to Palos Verdes to meet the funding goal of one

elderly, new construction application in a medium county.

24. Oasis was found ineligible for funding on the basis

that it failed to meet one submission requirement , Applicant

Certification and Acknowledgment Form .

25. Individual members of the Review C ommittee

independently reviewed and scored their respective po rtions of

all applications, including the Oasis application . However,

because Oasis was deemed ineligible, the Review C ommittee as a

whole did not compile and submit a scoring recommendation for the

Oasis application to the Board. Instead, the Re view C ommittee 's

recommendation to the Board was that the Oasis application be

deem ed ineligible, and the Board adopted that recommendation.

26. Had the Oasis application been deemed eligible for

consideration for funding, O a sis would have been recommended by

F lorida Housing staff for selection to meet the funding goal of

one new construction elderly development in a medium county

instead of Palos Verdes.

27. On December 13, 2016, Oasis timely filed a Notice of

Intent to P rotest. On December 22, 2016, Oasis timely submitted

a Formal Written Protest and Petition for Administrative Hearing.

On December 30, 2016, Palos Verdes filed its Unopposed Petition

for Leave to Intervene.

CONCLUSIONS OF LAW

28. DOAH has jurisdiction over the parties and the subject

matter of this proceeding. §§ 120.569 and 120.57(1) and (3),

Fla. Stat. Florida Housing has contracted with DOAH to provide

an Administrative Law Judge to conduct the informal hearing in

this matter.

29. Competitive procurement p rotests are governed by

section 120.57 (3)(f), which provides in pertinent part:

Unless otherwise provided by statute, the

burden of proof shall rest with the party

protesting the proposed agency action. In a

competitive - procurement protest, other than a

rejection of all bids, proposals, or replies,

the administrative law judge shall conduct a

de novo proceeding to determine whether the

agency's proposed action is contrary to the

agency's governing statutes, th e agency's

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

capricious.

30. The burden of proof re sides with Oasis, the party

contesting Florida HousingÓs action. This de novo proceeding was

conducted for the purpose of evaluating the action that was taken

by Florida Housing in an attempt to determine whethe r that action

is contrary to Florida Housing Ós governing statutes, Florida

Housing Ós rules or policies, or the solicitation specifications.

See § 120.57(3)(f), Fla. Stat.; and State Contracting and EngÓg

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

31. In addition to proving that Florida Housing violated

its statutorily required conduct, t o prevail, Oasis must also

prove by a preponderance of the evidence that Florida HousingÓs

action is: (1) clearly erroneous ; (2) contrary to competition ;

or (3) arbitrary or capricious. § 120.5 7(3)(f), Fla. Stat.

32. A ll parties have standing to participate in this

proceeding. No party disputes standing.

33. Although competitive solicitation protest proceedings

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

acknowledge that a different kind of de novo is contempl ated than

for other substantial interest proceedings under section 120.57.

Hearings under section 120.57(3)(f) have been described as a

"form 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."

State Contracting and Eng'g Corp. v. Dep't of Transp. , 709 So. 2d

at 609 .

34. Simply put, a fter determining the relevant facts based

upon evi dence presented at hearing, the undersignedÓs role is to

evaluate the agency's intended action in light of those facts.

The agency's determinations must remain undisturbed unless

clearly erroneous, contrary to competition, arbitrary, or

capricious. A pro posed award will be upheld unless it is

contrary to governing statutes, the agency's rules, or the

solicitation specifications.

35. The "clearly erroneous" standard has been applied to

both factual determinations and interpretations of statute, rule,

or specification. A factual determination is "clearly erroneous"

when the reviewer is "left with a definite and firm conviction

that [the fact - finder] has made a mistake." Tropical Jewelers,

Inc. v. Bank of Am., N.A. , 19 So. 3d 424, 426 (Fla. 3d DCA 2009).

36. As applied to legal interpretations, the "clearly

erroneous" standard was defined by the court in Colbert v.

Department of Health , 890 So. 2d 1165, 1166 (Fla. 1st DCA 2004),

to mean that "the interpretation will be upheld if the agency's

construction falls within the permissible range of

interpretations. If, however, the agency's interpretation

conflicts with the plain and ordinary intent of the law, judicial

deference need not be given to it." (citations omitted).

37. An agency decision is " contra ry to competition " when it

unreasonably interferes with the objectives of competitive

bidding. Those objectives have been stated to be:

[T]o protect the public against collusive

contracts; to secure fair competition upon

equal terms to all bidders; to re move not

only collusion but temptation for collusion

and opportunity for gain at public expense;

to close all avenues to favoritism and fraud

in various forms; to secure the best values

for the [public] at the lowest possible

expense; and to afford an equa l advantage to

all desiring to do business with the

[government], by affording an opportunity for

an exact comparison of bids.

Harry Pepper & Assoc., Inc. v. City of Cape Coral , 352 So. 2d

1190, 1192 (Fla. 2d DCA 1977)(quoting Wester v. Belote , 138 So.

7 21, 723 - 724 (Fla. 1931)).

38. 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 erty Behavioral

Health Corp. , 927 So. 2d 34, 38 - 39 (F la. 1st DCA 2006); Agrico

Chem. Co. v. Dep't of Envtl. Reg. , 365 So. 2d 759, 763 (Fla. 1st

DCA 1978).

39. If agency action is justifiable under any analysis that

a reasonable person would use to reach a decision of similar

importance, the action is neith er arbitrary nor capricious.

Dravo Basic Materials Co. v. DepÓt of Transp ., 602 So. 2d 632,

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

40. Oasis admits that the submission of the unmodified form

with the Original binder was a technical deviation from the RFA

requirement. However, Oasis argues that Florida Housing should

not have determined that the Oasis application was ineligible

because the unmodified form submitted with the Original

application was neither a fatal nor material deviation. Instead,

Oasis ma intains that the deviation was a minor irregularity that

Florida Housing should have waived.

41. A "minor irregularity" is defined by rule 67 - 60.002(6)

and provides in pertinent part:

" Minor Irregularity" means a variation in a

term or condition of an App lication 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 [Florida Housing] or

the public.

42. Under criteria se t forth in applicable ca se law,

P etitioner ha s successfully established that the facts of this

case fall well within the parameters of a " minor irregularity "

because (a) Florida Housing had the modified form in the three -

copy binders , as well as the unmodified form to review; (b) Oasis

did not gain a competitive advantage; (c) the minor deviation

could be corrected locating and confirming missing information

elsewhere; (d) the deviation was insignificant to scoring issues

and no points resulted from the mistake; and (e) the deviation

does not adversely impact the interest of the Corporation or

public.

43. Rule 67 - 60.008 sets forth the guidelines for Florida

Housing to waive minor irregularities and provides in pertinent

part:

Corporati on may waive Minor Irregularities in

an otherwise valid Application. Mistakes

clearly evident to the Corporation on the

face of the Application, such as computation

and typographical errors, may be corrected by

the Corporation; however, the Corporation

sh all have no duty or obligation to correct

any such mistakes.

44. Although the undersigned agrees with Oasis that its

deviation of providing the unmodified form with the Original

application binder is a minor irregularity, rule 67 - 60.008

utilizes the word " may " and affords Florida Housing discretion ary

authority when it comes to waiv ing minor irregularities.

45. When evaluating the action taken by Florida Ho using in

this proceeding, the credible evidence shows Florida Housing

exercised i ts discretion provided in rule 67 - 60.008 not to waive

a ny minor irregularit y regarding the Applicant Certification and

Acknowledgment F orm .

46. The undersigned is persuaded that Florida Housing

properly notified the applicants that it was not waiving the

Applicant Cer tification and Acknowledgement F orm at the beginning

of the RFA process and with an update on the webBoard in the

following notifications: RFA Section 3.A.1.e, which mandated

that the " (4) printed copies of the final Uploaded

Application . . . with all applicable attachments be provided " ;

RFA Section 4.A.1., which expressly states, " [i] f the Applicant

provides any version of the Applicant Cer tification and

Acknowledgement F orm other than the ver sion included in this RFA,

the f orm will not be considered " ; and, the webBoard notice, which

provides " [f] or the Application to be eligible for funding, the

Applicant Cer tification and Acknowledgement F orm reflecting the

2nd Modification posted on 10 - 4 - 16 must be submitted to the

Corporation by the Application Deadline, as outlined in the RFA. "

47. Therefore, Florida Housing operated within its

authority by using its discretion provided in rule 67 - 60.008 to

not waive the Oasis deviation . Florida Housing also acted

appropriately by follow ing the specifications of RFA in

Section 4.A.1. and rejecting the Oasis Original application that

did not have the modified form. The record is void of any

allegations of statutory violations. Therefore, Oasis failed to

meet its burden and demonstrate Flori da HousingÓs actions were

contrary to i ts governing statutes, rules , policies or RFA

specifications.

48. Additionally, Oasis failed to carry its burden of proof

and establish that Florida HousingÓs decision to find OasisÓs

application ineligible was clea rly erroneous, arbitrary or

capricious, or was contrary to competition. Instead, t he

evidence confirmed the correctness of Florida HousingÓs

determination .

R ECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Florida Housing Finance

Corporation , enter a final order consistent with its initial

decisions: (1) dismissing the formal written protests of Oasis

at Renaissance Preserve I, LP , and (2) award ing funding to

Osceola Palos Verdes, Ltd.

DONE AND ENT ERED this 15th day of March, 2017 , in

Tallahassee, Leon County, Florida.

S

JUNE C. MCKINNEY

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 15th day of March, 2017 .

COPIES FURNISHED:

Hugh R. Brown, General Counsel

Florida Housing Finance Corporation

227 North Bronough Street, Suite 5000

Tallahassee, Florida 32301 - 1329

(eServed)

Michael P. Donaldson, Esquire

Carlton Fields Jorden Burt, P.A.

215 South Monroe Street, Suite 500

Tallahassee, Florida 32302

(eServed)

Betty Zachem, Esquire

Marisa G. Butto n, Esquire

Florida Housing Finance Corporation

227 North Bronough Street, Suite 5000

Tallahassee, Florida 32301 - 1329

(eServed)

M. Christopher Bryant, Esquire

Oertel, Fernandez, Bryant & Atkinson, P.A.

Post Office Box 1110

Tallahassee, Florida 32302 - 1110

(eServed)

Kate Flemming, Corporation Clerk

Florida Housing Finance Corporation

227 North Bronough Street , Suite 5000

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.