21-000727BID Vista At Coconut Palm, Ltd vs. Florida Housing Finance Corporation Status: Closed DOAH Final Order on Monday, May 17, 2021.

Summary: Petitioner failed to carry its burden of demonstrating that Florida Housing's proposed award to University Station was clearly erroneous, contrary to competition, arbitrary, or capricious.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

H TG A STORIA , L TD ,

Petitioner ,

vs. Case No. 21 - 0725BID

F LORIDA H OUSING F INANCE C ORPORATION ,

Respondent .

/

M HP F L V II I , L LLP ,

Petitioner ,

vs. Case No. 21 - 0726BID

F LORIDA H OUSING F INANCE C ORPORATION ,

Respondent .

/

V ISTA A T C OCONUT P ALM , L TD ,

Petitioner,

vs. Case No. 21 - 0727BID

F LORIDA H OUSING F INANC E C ORPORATION ,

Respondent.

______________________________________/

R ECOMMENDED O RDER

Pursuant to notice, a formal administrative hearing was conducted via

Zoom on March 29, 2021, before Administrative Law Judge Garnett W.

C hisenhall of the Division of Administrative Hearings (ÑDOAHÒ).

A PPEARANCES

For Petitioner HTG Astoria, Ltd, and Intervenor University Station I:

Maureen McCarthy Daughton, Esquire

Maureen McCarthy Daughton, LLC

Suite 3 - 231

1400 Village Square Boulevard,

Tallahassee, Florida 32312

For Petitioner MHP FL VIII LLLP , and Intervenor Douglas Gardens IV,

Ltd:

Seann M. Frazier, Esquire

Marc Ito, Esquire

Parker, Hudson, Rainer & Dobbs, LLP

Suite 750

215 South Monroe Street

Tallahassee, Florida 32301

For Peti tioner Vista at Coconut Palm, Ltd.:

Brittany Adams Long, Esquire

Radey Law Firm, P.A.

Suite 200

301 South Bronough Street

Tallahassee, Florida 32301

For Respondent Florida Housing Finance Corporation:

Betty C. Zachem, Esquire

Christopher D. McGuire, Es quire

Florida Housing Finance Corporation

Suite 5000

227 North Bronough Street

Tallahassee, Florida 32301

For Intervenors RST The Willows, LP and Residences at SoMi Parc, LLC:

Michael P. Donaldson, Esquire

Carlton Fields, P.A.

Suite 500

215 South Monroe Street

Post Office Drawer 190

Tallahassee, Florida 32302

For Intervenor Fulham Terrace, Ltd:

Craig D. Varn, Esquire

Manson, Bolves, Donaldson, Varn, P.A.

Suite 820

106 East College Avenue

Tallahassee, Florida 32301

Amy Wells Brennan, Esquire

Manson, Bolves, Donaldson, Varn, P.A.

Suite 300

109 North Brush Street

Tampa, Florida 33602

For Intervenor BDG Fern Grove, LP:

Michael J. Glazer, Esquire

Ausley McMullen

123 South Calhoun Street

Post Office Box 391

Tallahassee, Florida 32302

For Intervenor Qu iet Meadows, Ltd:

William D. Hall, Esquire

John L. Wharton, Esquire

Daniel Ryan Russell, Esquire

Dean Mead & Dunbar

Suite 1200

106 East College Avenue

Tallahassee, Florida 32301

S TATEMENT OF T HE I SSUE

Whether Florida Housing Finance CorporationÔs (ÑFlo rida HousingÒ)

preliminary award of funding to University Station I, LLC (ÑUniversity

StationÒ) , was clearly erroneous, contrary to competition, arbitrary or

capricious, or contrary to Florida HousingÔs governing statutes, rules,

policies, or RFA specifica tions.

P RELIMINARY S TATEMENT

This case arises from Florida HousingÔs notice of preliminary award of

funding for applications submitted pursuant to Request for Applications

2020 - 20 5 Ñ SAIL Financing of Affordable Multifamily Housing Developments

to be used in Conjunction with Tax - Exempt Bond Financing and Non -

Competitive Housing Credits Ò (Ñthe RFAÒ). Vista at Coconut Palm, Ltd.

(ÑVistaÒ) , was found eligible for funding, but was not selected for funding.

Vista timely filed a Formal Written Protest and Petiti on for

Administrative Hearing, which is Case No. 21 - 0 727BID. Vista timely

challenged the awards to both University Station and Residences at SoMi

Parc (ÑSoMi ParcÒ). Prior to the Final Hearing, Vista, Florida Housing, and

SoMi Parc entered into a stipulati on that SoMi Parc was not eligible for

funding in this RFA because it had already entered into credit underwriting

under a different RFA. Thus, the only issue remaining is VistaÔs challenge to

University StationÔs application.

HTG Astoria, Ltd (ÑHTG Astor iaÒ) , filed a timely Petition challenging the

funding award to RST The Willows (ÑThe WillowsÒ), which is Case No. 21 -

0 725BID. Prior to the Final Hearing, HTG Astoria, The Willows, and Florida

Housing entered into a stipulation agreeing that The Willows was ineligible

for funding.

MHP FL VIII, LLLP (ÑMHPÒ) , filed a timely Petition challenging the

funding award to Quiet Meadows, Ltd (ÑQuiet MeadowsÒ) , and Fulham

Terrace, Ltd. (ÑFulham TerraceÒ), which became Case No. 21 - 0 726BID. 1

Florida Housing, MHP, Fulh am Terrace, Quiet Meadows, and Douglas

Gardens IV, Ltd. (ÑDouglas GardensÒ) , entered into a settlement agreement

1 Case Nos. 21 - 725, 21 - 726, and 21 - 727 were consolidated via an Order issued on

February 25, 2021.

and stipulation. In that agreement, the parties agreed that Douglas

Gardens, MHP, and Quiet Meadows are ineligible for funding under the RFA.

The parties further agreed that Fulham Terrace was eligible for funding.

MHP then withdrew its Petition.

BDG Fern Grove, L.P. (ÑFern GroveÒ) , also entered an appearance as an

I ntervenor in Case Nos. 21 - 0 726 and 21 - 0 727 because certain changes in the

fundi ng scenarios could have resulted in a loss of preliminary funding to its

development. Given the stipulations between the parties, Fern GroveÔs

application will not lose funding.

In light of the stipulations, the only remaining issue pertained to Case

No. 21 - 0 727 and whether University StationÔs application should be found

ineligible for failing to include a particular document with its application.

The final hearing took place as scheduled on March 29, 2021. Florida

Housing presented testimony from Mar issa Button. Vista presented

testimony f r om Kenneth Naylor, and Vista Exhibits 1 and 2 were accepted

into evidence. University Station called no witnesses, and University Station

Exhibits 2 and 3 were accepted into evidence. The undersigned noted VistaÔs

r elevancy objections to University StationÔs exhibits. Finally, Joint Exhibits

1, 5, and 13 were accepted into evidence. Also accepted as exhibits were the

stipulations between HTG Astoria, Florida Housing, and The Willows ( The

Willows Exhibit 1); MHP, Fulh am Terrace, Douglas Gardens, Quiet

Meadows, and Florida Housing (Fern Grove Exhibit 1); and Vista , SoMi Parc,

and Florida Housing (SoMi Parc Exhibit 1).

The T ranscript from the final hearing was filed on April 16, 2021. The

parties timely filed proposed recommended orders on April 26, 2021, and

those proposed recommended orders were considered in the preparation of

this Recommended Order.

F INDINGS OF F ACT

Based on the evidence adduced at the final hearing, the record as a whole,

the stipulated facts, an d matters subject to official recognition, the following

Findings of Fact are made:

Findings on Florida Housing and the R F A

1. Florida Housing is a public corporation created pursuant to

section 420.504, Florida Statutes, and promotes public welfare by

a dministering the financing of affordable housing in Florida.

Section 420.5099 designates Florida Housing as the State of FloridaÔs housing

credit agency within the meaning of section 42(h)(7)(A) of the Internal

Revenue Code. Accordingly, Florida Housing i s responsible for establishing

procedures for allocating and distributing low income housing tax credits.

2. Florida Housing allocates housing credits and other funding via

requests for proposals or other competitive solicitation methods identified in

sec tion 420.507(48 ) .

3. Florida Housing initiated the instant competitive solicitation by issuing

the RFA on October 15, 2020, and anticipates awarding up to an estimated

$88,959,045 .00 in State Apartment Incentive Loan (ÑSAILÒ) 2 financing.

4. The RFA set fo rth a process by which applications would be scored

based, in part, on eligibility items. Only applications satisfying all of the

eligibility items were eligible for funding and considered for selection.

2 Marissa Button, the Director of Multifamily Programs at F lorida Housing, testified that the

SAIL program finances the development of multifamily, affordable rental housing. The

Florida Legislature traditionally appropriates money for the SAIL program via the State

Housing Trust Fund.

5. Site Control was an eligibility item because F lorida Housing wants

assurances that applicants selected for funding will be able to actually use

the development sites. 3

6. Applicants satisfy the Site Control requirement by providing a properly

completed and executed Florida Housing Site Control Cert ification F orm

(Ñthe Site Control FormÒ). In order for the Site Control Form to be considered

complete, an applicant had to attach documentation demonstrating that it:

(a) was a party to an eligible contract or lease; or (b) owned the property in

question.

7. The RFA set forth specific requirements for contracts and leases used

for demonstrating site control. For example, a contract had to satisfy all of

the following conditions:

(a) It must have a term that does not expire before

May 31, 2021 or that contains extension options

exercisable by the purchaser and conditioned solely

upon payment of additional monies which, if

exercised, would extend the term to a date that is

not earlier than May 31, 2021.

(b) It must specifically state that the buyerÔs

r emedy for default on the part of the seller includes

or is specific performance;

(c) The Applicant must be the buyer unless there is

an assignment of the eligible contract, signed by

the assignor and the assignee, which assigns all of

the buyerÔs rights, title and interests in the eligible

contract to the Applicant; and

(d) The owner of the subject property must be the

seller, or is a party to one or more intermediate

contracts, agreements, assignments, options, or

3 Ms. Button explained t hat Site Control Ñis a component of how the applicant demonstrates

its ability to proceed with the proposed development. And essentially it is the Ï the way that

we require them to demonstrate they have control over the proposed development site.Ò As

for w hy Site Control is important, Ms. Button testified that Florida Housing wants Ñto be

assured if the Ï the applicant is successful in its request for funding, that the Ï they will be

able to actually use the development site.Ò

conveyances between or among the owner, the

Applicant, or other parties, that have the effect of

assigning the ownerÔs right to sell the property to

the seller. Any intermediate contract must meet

the criteria for an eligible contract in (a) and (b)

above.

8. The language quoted above indica tes that the RFA was referring to a

sales contract when it used the term Ñcontract.Ò

9. If an applicant used a lease to satisfy the Site Control requirement,

then the RFA provided the following:

(3) Lease Ï The lease must have an unexpired term

of at l east 50 years after the Application Deadline

and the lessee must be the Applicant. The owner of

the subject property must be a party to the lease, or

a party to one or more intermediate leases,

subleases, agreements, or assignments, between or

among the ow ner, the Applicant, or other parties,

that have the effect of assigning the ownerÔs right

to lease the property for at least 50 years to the

lessee.

10. Marissa Button, Florida HousingÔs Director of Multifamily Programs,

testified that the RFA did not r equire a lease to have a commencement date.

11. The RFA required that Site Control documentation for leases Ñinclude

all relevant intermediate contracts, agreements, assignments, options,

conveyances, intermediate leases, and subleases. If the proposed

Development consists of Scattered Sites, site control must be demonstrated

for all of the Scattered Sites.Ò

12. Ms. Button provided the following testimony about this requirement:

A: Florida Housing includes the requirements for

that documentation to Ï to essentially acknowledge

that there are circumstances where there may be

an intermediate contract or agreement that would

demonstrate one of the criteria for those different

types of site control and the requirements that we

want to see that -- that chai n back to the

requirement itself.

* * *

Q: So Florida Housing considers this term to

broadly include all different types of potential

contract agreements, et cetera; correct?

A: Yes.

Q: Could you give me an example of an

intermediate contract or agree ment?

A: Yes. An intermediate contract or agreement may

be where Ï with regard to the [ ] contract, the terms

require an owner of the subject property to be a

seller of the subject property. And so there may be

an applicant that has a contract with the se ller of

the property. And that seller might not be the

actual owner; so there may be an intermediate

contract that we need to see between the seller to

the buyer and the actual owner of the subject

property.

Q: And that situation that you just described, that

happened in the past few years; correct?

A: I can think of one example where that happened,

yes.

Q: Okay. And in that case Florida Housing agreed

that the intermediate agreement was necessary to

include with the site documentation; correct?

A: Flor ida Housing reviewed Ï yes. That Ï Florida

HousingÔs position was there was an intermediate

agreement necessary because the site control

documentation provided did not include the owner

of the subject property.

13. As for Florida HousingÔs review of Sit e Control documentation, the

RFA provided as follows:

Note: [Florida Housing] will not review the site

control documentation that is submitted with the

Site Control Certification form during the scoring

process unless there is a reason to believe that the

form has been improperly executed, nor will it in

any case evaluate the validity or enforceability of

any such documentation. During scoring, [Florida

Housing] will rely on the properly executed Site

Control Certification form to determine whether an

Appli cant has met the requirement of this RFA to

demonstrate site control. [Florida Housing] has no

authority to, and will not, evaluate the validity or

enforceability of any eligible site control

documentation that is attached to the Site Control

Certification form during the scoring process.

During credit underwriting, if it is determined that

the site control documents do not meet the above

requirements, [Florida Housing] may rescind the

award.

14. When questioned about Florida HousingÔs review of Site Con trol

documentation, Ms. Button offered the following testimony:

Q: If you look at the next page, Page 48, at the end

of Subsection A thereÔs a note. It says Florida

Housing will not review the site control during the

scoring process. It will not evaluate the authority or

enforceability of such documentation; correct?

A: Yes.

Q: But even though Florida Housing does not

review the site documentation during scoring, it

will review the documentation during the bid

protest; correct?

A: Yes as it relates to t he RFA requirements.

* * *

Q: If the documents attached to a site control

documentation [do] not meet the RFA criteria, then

that site control certification form would be

incorrect; right?

A: Yes.

Q: And the applicant would be found ineligible;

correct ?

A: Yes.

15. The RFA and Ms. ButtonÔs testimony indicate that Florida Housing

intended, under most circumstances, to accept the representations set forth

in an applicantÔs Site Control documentation during the scoring process. In

other words, Florida Ho using did not go behind the Site Control

documentation to verify the representations therein.

16. The terms of the RFA were not challenged.

Stipulated Facts Pertaining to Certain Parties

17. Douglas Gardens and Florida Housing agree that Douglas GardensÔ

application is ineligible for funding via the RFA.

18. Quiet Meadows and Florida Housing agree that Quiet MeadowsÔ

application is ineligible for funding via the RFA.

19. MHP and Florida Housing agree that MHPÔs Application is ineligible

for funding via the RFA. 4

20. MHP, Quiet Meadows, and Douglas Gardens agree that Fulham

TerraceÔs application remains eligible for funding via the RFA.

2 1 . The Willows and Florida Housing agree that the Willows Application

is ineligible for funding via the RFA.

2 2 . The Willows agree s that the HTG Astoria Application is eligible for

funding via the RFA.

4 MHP, Florida Housing, Qui et Meadows, Douglas Gardens, and Fulham Terrace entered

into a Settlement Agreement and Stipulation on March 26, 2021, that was entered into

evidence as Fern Grove Exhibit 1.

2 3 . SoMi Parc, Vista, and Florida Housing agree that the SoMi Parc

Application is ineligible for funding via the RFA. SoMi Parc has accepted an

invitation to enter cred it underwriting for the same Development in RFA

2020 - 203 and thus cannot be funding via the RFA.

Findings Regarding the Applications of University Station and Vista

2 4 . Florida Housing received 90 applications in response to the RFA.

Those applications w ere processed, deemed eligible or ineligible, scored, and

ranked pursuant to the terms of the RFA. On January 22, 2021, Florida

Housing announced its intention to award funding to 17 applicants, subject to

satisfactory completion of the credit underwriting process.

2 5 . University Station was one of the 17 successful applicants, and

University StationÔs Site Control documentation included: (a) a Ground Lease

Agreement between the City of Hollywood, Florida (Ñthe CityÒ) , and

University Station (Ñthe Univers ity Station I L easeÒ); (b) a Ground Lease

Agreement between the City and University Station II, LTD (Ñthe University

Station II LeaseÒ); and (c) an Assignment of Ground Lease Agreement

assigning University Station II, LTDÔs interests in the Ground Lease

Ag reement between the City and University Station II, LTD to University

Station. 5

2 6 . The University Station I L ease described its term s as follows:

This lease shall be effective as of the Effective Date,

but the term shall commence on the

Commencement Date and expire at 11:59 p.m. on

the seventy - fifth (75 th ) anniversary of the

Commencement Date (the ÑTermÒ), unless this

lease is terminated earlier pursuant to the

provisions contained herein. For purposes of this

lease, the ÑCommencement DateÒ shall be the

closing date of TenantÔs construction financing for

the development of the Phase I Project (the

ÑConstruction FinancingÒ), but in no event later

5 The Assignment of Ground Lease Agreement between University Station and Univer sity

Station II was a relevant intermediate document for demonstrating Site Control.

than June 30, 2022. TenantÔs right to take physical

possession of the Leased Premises shall begin on

the Co mmencement Date.

2 7 . The University Station II L ease between the City and

University Station II described its terms as follows:

(a) This lease shall be effective as of the Effective

Date, but the term shall commence on the

Commencement Date and expire at 11:59 p.m. on

the seventy - fifth (75 th ) anniversary of the

Commencement Date (the ÑTermÒ), unless this

lease is terminated earlier pursuant to the

provisions contained herein. For purposes of this

Lease, the ÑCommencement DateÒ shall be the later

of the closing date of TenantÔs construction loan for

the development of the Project (the ÑConstruction

LoanÒ) and the termination of the lease of the

premises to Barry University, but in no event later

than June 30, 2023. TenantÔs right to take physical

possessi on of the Leased Premises shall begin on

the Commencement Date.

(b) Landlord and Tenant acknowledge that the

leased premises are currently improved with an

educational facility and adjacent ground parking

that is leased to Barry University through

Novembe r 23, 2021 and the Landlord may enter

into an additional one - year extension of the lease to

Barry University at LandlordÔs sole discretion.

Until the Commencement Date, Landlord, or its

tenant, shall be solely responsible for the operation

and maintenance of the leased premises and any

uses on the Leased Premises.

2 8 . University StationÔs proposed Development site consists of five

Scattered Sites. Barry University currently leases a building and parking

spaces located on the Scattered Site described as latitude and longitude

coordinates of 26.014703, - 80.148572 in Question 5.d.2 of the University

Station Application. This is the site described in the University Station II

Lease.

2 9 . The City and Barry University, Inc . , are the parties to the Barry

Uni versity Lease (Ñthe Barry University Lease Ò). The Barry University Lease

was executed on May 23, 2011, with a term of 10 and one - half years, which

would expire on approximately November 23 , 2021. With regard to its term,

the Barry University Lease states t hat Ñ[t]he term of this lease shall be for

ten and one - half (10 ½) years commencing upon the execution of this lease.

The parties will have the mutual option to renew this lease subject to City

Commission and the LesseeÔs Board of Directors approval.Ò

30 . A copy of the Barry University Lease was not included in University

StationÔs application.

3 1 . In contrast to the statement in the University Station II L ease that

the Barry University Lease could be extended by Ñan additional one - year

extensionÒ at the CityÔs Ñsole discretion,Ò the Barry University Lease simply

says that the parties have a Ñmutual option to renewÒ with no mention of a

particular term.

3 2 . Ms. Button provided the following testimony regarding the Barry

University Lease:

Q: And you are aware that University Station did

not submit the Barry University lease as part of its

site control documentation; correct?

A: Yes.

Q: And does the existence of that Barry University

lease change your position on whether University

Station met the requi rements in the RFA for a

lease?

A: No.

Q: And why not?

A: Because the documents submitted with the

application meet the terms of the RFA for a lease

site control documentation.

Q: Did the existence of the Barry University lease

impact whether or not the University Station site

control documentation met the requirements for a

lease?

A: No.

Q: As Florida HousingÔs corporate representative,

what is your position regarding University

StationÔs application?

A: It is eligible for funding.

3 3 . Vista also applied for funding from the RFA. Florida Housing

determined that Vista was eligible for funding, but Florida Housing did not

preliminarily select Vista for funding.

3 4 . If University Station is deemed ineligible for funding, then Vista will

be selected for funding subject to the successful completion of credit

underwriting.

Ultimate Findings

3 5 . Vista has failed to carry it s burden of demonstrating that Florida

HousingÔs proposed award to University Station was clearly erroneous,

contrary to competitio n, arbitrary, or capricious. Also, the greater weight of

the evidence demonstrates that: (a) Florida HousingÔs proposed action is not

contrary to the RFAÔs terms; and that (b) University Station will have control

over the site in question.

3 6 . The great er weight of the evidence demonstrates that the University

Station L ease I Lease, the University Stations II Lease, and the assignment

of University Station IIÔs interest to University Station collectively satisfied

the RFAÔs requirements because: (a) ther e is unexpired term of at least 50

years after the application deadline; (b) University Station, i.e., the lessee,

was the applicant for funding; and (c) the City, as the owner of the subject

property, was a party to the lease.

3 7 . Upon considering Florida HousingÔs preliminary approval of

University StationÔs application without the benefit of reviewing the Barry

University L ease, the greater weight of the evidence demonstrates that

Florida Housing was not clearly erroneous when it determined that the Barr y

University L ease was not a relevant intermediate lease within the meaning

of the RFA. The University Station II L ease between the City and University

Station II requires the lease to begin no later than June 30, 2023. Also, the

City and University Statio n II acknowledge that Barry UniversityÔs L ease

runs through November 23, 2021, and they agree that the City may extend

Barry UniversityÔs lease by Ñan additional one - year.Ò Accordingly, the Barry

University L ease will end prior to June 30, 2023, and Univer sity Station will

have site control no later than that date. In other words, the greater weight

of the evidence demonstrates that University Station has control over the site

in question.

3 8 . The analysis set forth above does not change if one conside rs the Barry

University L ease. 6 Even though the Barry University Lease does not limit a

renewal to one year, the lease cannot be renewed without the CityÔs assent,

and the City agreed in the University Station II L ease that any renewal

would not exceed one year. Therefore, even if one considers the terms of the

Barry University L ease, the greater weight of the evidence does not

demonstrate that it is a relevant intermediate document that was required to

be included with University StationÔs application. Aga in, the greater weight

of the evidence demonstrates that University Station has control over the site

in question.

6 As will be explained in more detail in the Conclusions of Law below, Ñ[n]ew evidence cannot

be offered to amend or supplement a partyÔs response or application. £ 120 .57(3)(f), Fla. Stat.

However, new evidence may be offered in a competitive protest proceeding to prove that

there was an error in another partyÔs application. Intercontinental Props. , supra .Ò Heritage at

Pompano Housing Partners, Ltd. v. Fla. Housing Fin. Corp ., Case No. 14 - 1361BID, ¶ 116

(Fla. DOAH June 10, 2014 ; Fla. Hous. Fin. Corp. June 13, 2014 ).

C ONCLUSIONS OF L AW

3 9 . DOAH has jurisdiction over the parties and the subject matter of this

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

40 . Section 120.57(3)(f), Florida Statutes, governs protests to proposed

actions of Florida Housing and provides that :

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 agencyÔs

proposed action is contrary to the agencyÔs

governing statutes, the agencyÔs rules or policies, or

the solici tation specifications. The standard of proof

for such proceedings shall be whether the proposed

agency action was clearly erroneous, contrary to

competition, arbitrary, or capricious.

4 1 . With regard to the applicable standard of proof, Colbert v. Depart ment

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

erroneous standard to mean that Ñthe interpretation will be upheld if the

agencyÔs construction falls within the permissible range of interpretations. If ,

however, the agencyÔs interpretation conflicts with the plain and ordinary

intent of the law, [then] judicial deference need not be given it.Ò

4 2 . An agency action is Ñcontrary to competitionÒ when it unreasonably

interferes with the objectives of competitive bidding. Those o bjectives have

been described as follows:

[T]o protect the public against collusive contracts;

to secure fair competition 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 various forms; to secure the best

values for [the public] at the lowest possible

expense; and to afford an equal advantage to all

desiring to do business with the [government], by

affording an opportunity f or an exact comparison of

bids.

4 3 . As for whether a proposed award would be arbitrary or capricious, a

capricious action is taken without thought or reason. Agrico Chem. Co. v.

DepÔt of Envtl. Reg. , 365 So. 2d 759, 763 (Fla. 1 st DCA 1978). ÑAn arbitrary

decision is one that is not supported by facts or logic[.]Ò Id.

4 4 . In assessing whether an agency has acted arbitrarily or capriciously, a

tribunal evaluates Ñwhether the agency: (1) has considered all relevant

factors; (2) has given actual, good faith c onsideration to those factors; and

(3) has used reason rather than whim to progress from consideration of these

factors to its final decision.Ò Adam Smith Enter. v. DepÔt of Envtl. Reg. , 553

So. 2d 1260, 1273 (Fla. 1 st DCA 1989). Ñ[I]f an administrative d ecision is

justifiable under any analysis that a reasonable person would use to reach a

decision of similar importance, it would seem that the decision is neither

arbitrary nor capricious.Ò

4 5 . Finally, a tribunal conducts the analyses described above via a de novo

review. However, as explained by the Honorable F. Scott Boyd :

Ñ[p]roceedings to challenge a competitive award are

not simply a record review of the information that

was before the agency. They remain Óde novoÔ in the

sense that in the chapter 1 20 hearing the evidence

adduced is not restricted to that which was earlier

before the agency when making its preliminary

decision. A new evidentiary record based upon the

historical, objective facts is developed. Asphalt

Pavers, Inc. v. DepÔt of Transp. , 602 So. 2d 558 (Fla.

1 st DCA 1992).

Pinnacle Rio, LLC v. Fla. Housing Fin. Corp. , DOAH Case No. 14 - 1398BID, ¶

93 (Fla. DOAH June 4, 2014) , rejected in part , (Fla. Hous. Fin. Corp. June 13,

2014) .

4 6 . As for whether new evidence can be offered for consi deration under

this competitive procurement de novo review, the Honorable Elizabeth

McArthur explained that Ñ[n]ew evidence cannot be offered to amend or

supplement a partyÔs response/application. £ 120.57(3)(f), Fla. Stat. However,

new evidence may be off ered in a competitive protest proceeding to prove that

there was an error in another partyÔs application. Intercontinental Props. ,

supra .Ò Heritage at Pompano Housing Partners, Ltd. v. Fla. Housing Fin.

Corp ., Case No. 14 - 1361BID, ¶ 116 (Fla. DOAH June 10, 2014 ; Fla. Hous.

Fin. Corp. June 13, 2014 ). 7

4 7 . Turning to the instant case, Vista would receive finding if University

Station were found ineligible for funding. Accordingly, no party disputed that

Vista had standing to challenge Florida HousingÔs prelim inary decision to

award funding to University Station.

4 8 . Vista argues that the Barry University L ease should have been

included in University StationÔs application as a relevant intermediate

document so that Florida Housing could determine when and if the

aforementioned lease would end. Without that information, Vista argues that

University Station cannot demonstrate that it has site control:

54. Like the redevelopment agreement in Madison

Oaks, [ 8 ] the Barry Lease is relevant to demonstrate

site contro l. It clarifies who has the right to possess

the property. Currently, it is Barry University and

not University Station. As of the date of the

application, no documents were submitted that

demonstrated that the Barry Lease would be

terminated by June 30, 2 023, the latest date by

which University StationÔs lease would purportedly

commence. While the information available and

included in the application is determinative, it is

significant to note that no such documentation

demonstrating the termination date o f the Barry

Lease appeared in the record in this case.

7 Accordingly, it was appropriate for the undersigned to consider the Barry University L ease

in the process of reaching the ruling herein.

8 This is a refe rence to the Recommended Order in DOAH Case No. 20 - 1770.

55. The property University Station is attempting

to lease is currently encumbered by another lease.

By the terms of the agreement with the City of

Hollywood, the University Station lease cannot

comme nce until the Barry Lease is terminated.

This is consistent with well - established law that a

lease provides a tenant with exclusive right to use

the property, even to the exclusion of the owner

except for certain circumstances. See Turner v. Fla.

State Fai r Auth. , 974 So. 2d 470, 473 (Fla. 2d DCA

2009)(ÑA tenant under a lease is one who has been

given a possession of land which is Óexclusive even

of the landlord except as the lease permits his

entry, and saving always the landlordÔs right to

enter to demand rent or to make repairs,ÔÒ)(quoted

source omitted).

56. Because Barry University currently has

possession of the property, the Barry Lease is not

only a relevant agreement to demonstrate site

control, but also a necessary agreement to

determine when the Barry Lease will terminate so

that the University Station lease can commence.

The City of Hollywood does not have control of the

property until the Barry Lease is terminated and

cannot lease it to another party until the Barry

Lease is terminated.

4 9 . Vis taÔs argument overlooks that Barry UniversityÔs L ease was set to

end on November 23, 2021 , and the City agreed that the University Station II

L ease would begin no later than June 30, 2023. The City also agreed that any

renewal of the Barry University L ease would be limited to a single , one - year

extension. Thus, based on the information available to it during the scoring

process, Florida Housing reasonably determined that the Barry University

L ease was not a relevant intermediate document and that University Station

had control over the site in question.

50 . Even though the Barry University L ease does not limit a lease

renewal to a single , one - year term, an ex post facto review of the Barry

University Lease does not demonstrate that it is a relevant interm ediate

document because Barry University cannot unilaterally renew its lease and

extend its lease beyond June 30, 2023. Therefore, even if one considers the

Barry University L ease, the greater weight of the evidence demonstrates that

University Station has control over the site in question.

5 1 . Vista also argues that the leases utilized by University Station are

actually contracts because no interest in the land at issue is immediately

conveyed. As a result, Vista argues that the aforementioned documents

should be evaluated under the RFAÔs requirements for contracts rather than

leases. Vista further argues that University StationÔs application would be

ineligible for funding under the correct standard:

60. It is not necessary to consider here whether a

le asehold estate that springs into existence at some

future date could ever be sufficient to establish site

control. If the commencement of the leasehold

estate were conditioned on the occurrence of some

certain - to - occur future event that is wholly outside

t he control of the owner of the property, the tenant

might plausibly argue that it has a vested interest

and will have a leasehold estate upon the

occurrence of that event and therefore has

established site control. Such is not the case here.

This document provides that the leasehold estate

will not commence unless the current lease to

Barry University terminates by June 30, 2023.

That the Barry Lease will terminate by that date

(or indeed, by any particular date) is by no means

certain and has not been demo nstrated. Moreover,

bringing about such termination is to some extent

within the control of the City of Hollywood. But the

agreement between the City of Hollywood and

University Station here does not obligate the City

of Hollywood to cause such termination , and does

not require the City of Hollywood to refrain from

entering into extensions with Barry University.

Accordingly, the contract between City of

Hollywood and Barry University is not a lease

because it does not grant to University Station a

leasehold interest in the property, either presently,

or certain to occur in the future. Since it is not a

lease within the meaning and intent of the site

control requirements, it must be evaluated based

on the requirements of a contract. Since it does not

even obl igate the property owner to cause the

termination of the Barry Lease, much less provide

for specific performance, it fails to establish site

control.

5 2 . This argument overlooks the CityÔs agreement that the University

Station II L ease would begin no later than June 30, 2023, and that any

renewal of the Barry University L ease would be limited to a single , one - year

extension. Vista a gain overlooks the fact that Barry University cannot

unilaterally extend its lease beyond June 30, 2023. In sum, the gr eater

weight of the evidence demonstrates that University Station had control over

the site in question.

5 3 . Moreover and as noted above, Vista has the burden under

section 120.57(3) of proving that Florida Housing acted contrary to Ñthe

solicitation s pecifications.Ò The RFAÔs Site Control specifications for a

contract unambiguously contemplated a sales agreement. The agreements

between the City, University Station, and University Station II do not

amount to a sales agreement. Even though those agreemen ts do not

immediately convey a present leasehold estate to University Station, Florida

Housing reasonably applied the RFAÔs Site Control specifications for a lease

to University StationÔs funding application.

R ECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

R ECOMMENDED that Florida Housing Finance Corporation enter a f inal o rder:

(a) awarding funding to University Station I, LLC , via Request for

Application 2020 - 205 subject to credit underwriting ; and (b) finding that th e

applications submitted by Douglas Gardens IV, Ltd., MHP FL VIII, LLLP,

Quiet Meadows, Ltd , RST The Willows, LP, and Residences at SoMi Parc,

LLC are ineligible for funding via Request for Application 2020 - 205.

D ONE A ND E NTERED this 17th day of May, 2021 , in Tallahassee, Leon

County, Florida.

S

G. W. C HISENHALL

Administrative Law Judge

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

www.doah.state.fl.us

Filed with the Clerk of the

Division of Adm inistrative Hearings

this 17th day of May, 2021.

C OPIES F URNISHED :

Betty Zachem, Esquire Maureen McCarthy Daughton, Esquire

Florida Housing Finance Corporation Maureen McCarthy Daughton, LLC

Suite 5000 Suite 3 - 231

227 North Bronough Street 1400 Village Square Boulevard

Tallahassee, Florida 32301 Tallahassee, Florida 32312

Marc Ito, Esquire Christopher Dale McGuire, Esquire

Parker Hudson Rainer & Dobbs, LLP Florida Housing Finance Corporation

Suite 750 Suite 5000

2 15 South Monroe Street 227 North Bronough Street

Tallahassee, Florida 32301 Tallahassee, Florida 32301

Seann M. Frazier, Esquire Michael P. Donaldson, Esquire

Parker, Hudson, Rainer & Dobbs, LLP Carlton Fields P.A.

Suite 750 Suite 500

215 South Monroe Street 215 South Monroe Street

Tallahassee, Florida 32301 Tallahassee, Florida 32302

Michael J. Glazer, Esquire Brittany Adams Long, Esquire

Ausley McMullen Radey Law Firm, P.A.

123 South Calhoun Street Suite 200

Post Off ice Box 391 301 South Bronough Street

Tallahassee, Florida 32302 Tallahassee, Florida 32301

William D. Hall, Esquire Craig D. Varn, Esquire

Dean Mead Manson Bolves Donaldson Varn, P.A.

Suite 1200 Suite 820

106 East College Avenue 106 East College Avenue

Tallahassee, Florida 32301 Tallahassee, Florida 32301

John L. Wharton, Esquire Daniel Ryan Russell, Esquire

Dean Mead and Dunbar Dean Mead

Suite 1200 Suite 1200

106 East College Avenue 106 East College Avenue

Tallahassee, Florida 32301 Tallahassee, Florida 32301

Corpor ation Clerk Amy Wells Brennan, Esquire

Florida Housing Finance Corporation Manson Bolves Donaldson Varn, P.A.

Suite 5000 Suite 300

227 North Bronough Street 109 North Brush Street

Tallahassee, Florida 32301 - 1329 Tampa, Florida 33602

Hugh R. Brown, General Counsel

Florida Housing Finance Corporation

Suite 5000

227 North Bronough Street

Tallahassee, Florida 32301 - 1329

N OTICE OF R IGHT T O S UBMIT E XCEPTIONS

All parties have the right to submit written exceptions within 1 0 days from

the date of this Recommended Order. Any exceptions to this R ecommended

Order should be filed with the agency that will issue the Final Order in this

case.