SUBJECT/RECOMMENDATION:
Title
Approve the Seventh Amendment to Contract for Sale of City-Owned Vacant Land between the City of Clearwater and Lake Belleview Development, LLC, for real property located at 1454 South Martin Luther King Jr. Avenue, extending the closing date to December 31, 2026; and authorize the appropriate officials to execute same and such requisite documents necessary to effectuate the sale. (consent)
Body
SUMMARY:
The City of Clearwater issued RFP/Q #43-22 seeking a developer to acquire and develop City-owned property located at 1454 South Martin Luther King Jr. Avenue for use as affordable and workforce housing (Pinellas County Property I.D. #22-29-15-00000-320-1300).
On December 1, 2022, City Council authorized staff to negotiate a contract for the sale of the property to Habitat for Humanity of Pinellas County, Inc. and Clearwater Neighborhood Housing Services, Inc., collectively, as the selected Developer. On June 13, 2023, City Council approved the Contract for Sale of City-Owned Vacant Land. The contract was subsequently assigned to Lake Belleview Development, LLC, a single-asset entity established for the development.
Pursuant to the contract, the development must be consistent with the Developer’s response to RFP/Q #43-22. The Developer will construct 24 mixed-income, owner-occupied townhomes, with 50% of the units reserved for households with total household incomes at or below 80% of Area Median Income (AMI), as determined by the U.S. Department of Housing and Urban Development, and the remaining 50% reserved for households with total household incomes at or below 120% of AMI.
The Developer’s response to RFP/Q #43-22 identified a $1,240,170 cash funding gap in addition to the requested donation of the property. Exhibit B of the contract provides for the City’s donation of the parcel, valued at $525,000, and an additional direct subsidy of $357,585, for a total City contribution of $882,585. Due to changes in market conditions, the Developer subsequently increased its funding request to Pinellas County to approximately $1,015,025, which was approved.
Total development costs are currently estimated at $9,577,613.50. Sources of funding include owner equity of $996,611.73, Pinellas County Penny funding of approximately $1,015,028, City of Clearwater assistance totaling $882,585, including $357,585 in direct subsidy and the land donation valued at $525,000, and permanent debt financing of approximately $6,683,388.77.
Exhibit B of the contract establishes additional terms and conditions that the Developer must satisfy prior to and following closing.
The project has experienced several unforeseen development and financing challenges that have required amendments to the original development schedule. The original closing date was extended to December 31, 2024. Following Hurricanes Helene and Milton, the Developer required additional time to secure funding approval from Pinellas County, resulting in an extension of the closing date to April 30, 2025. The Pinellas County Board of County Commissioners approved funding for the project in February 2025.
The closing date was subsequently extended to July 31, 2025, to allow the Developer additional time to obtain permits, secure commercial financing, and finalize closing documentation. In June 2025, the Developer requested an additional extension to December 31, 2025, to continue the permitting process, complete negotiations for a stormwater easement involving a neighboring property, and complete the platting process associated with Duke Energy.
Following that extension, the Developer identified a conflict between the contract requirement to obtain all building permits prior to closing and the City's development review process. Under the City of Clearwater's development requirements, the final plat must be recorded before building permits can be issued; however, final plat recording cannot occur until certain infrastructure and site improvements are completed.
The Fifth Amendment addressed this issue by revising the permit contingency, assigning the contract to Lake Belleview Development, LLC, providing the City with a right of reverter if the project fails to meet contractual development timelines, and extending the closing date to June 30, 2026.
Due to continued financing challenges and negotiations associated with the project's operating agreement and financing structure, the Sixth Amendment extended the closing date to October 31, 2026.
The Developer has requested additional time to complete the remaining financing, organizational, and closing requirements for the project. The proposed Seventh Amendment would extend the contract closing date from October 31, 2026, to December 31, 2026. All other terms and conditions of the agreement, as previously amended, will remain in full force and effect.
Staff is requesting City Council approval of the Seventh Amendment to the Contract for Sale of City-Owned Vacant Land.
APPROPRIATION CODE AND AMOUNT:
Funding is to be provided through the State Housing Initiatives Partnership (SHIP) Program and Revenue Recovery Funds provided by the American Rescue Plan Act - Local Fiscal Recovery Funds. No General Fund monies will be appropriated. If necessary, staff may utilize Housing Trust Funds in place of SHIP funding.
USE OF RESERVE FUNDS:
N/A
STRATEGIC PRIORITY:
Objective 2.4 - Supports equitable housing programs that promote household stability and reduces the incidence of Homelessness within Clearwater.
