SUBJECT/RECOMMENDATION:
Title
Approve the Fifth Amendment to Contract for Sale of City-Owned Vacant Land between the City of Clearwater, Habitat for Humanity of Pinellas County, Inc., and Clearwater Neighborhood Housing Services, Inc. for real property located at 1454 South Martin Luther King Jr. Avenue and authorize the appropriate officials to execute same and such requisite documents necessary to effectuate the sale.
Body
SUMMARY:
The City of Clearwater posted RFP/Q #43-22 as an opportunity for 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, Council authorized staff to negotiate a contract for the sale of real property to Habitat for Humanity of Pinellas County, Inc. and Clearwater Neighborhood Housing Services, Inc., together, as the selected Developer of the real property located at 1454 South Martin Luther King Jr. Avenue. On June 13th, 2023, Council approved a contract for sale of city-owned vacant land. The Developer will be assigning the contract to a single asset entity, Lake Belleview Development LLC.
Development Agreement (Executed June 13th, 2023)
Per the contract, the development shall be consistent with Developer’s response to City of Clearwater RFP/Q 43-22. The Developer shall construct 24 units of mixed-income, owner-occupied townhomes with 50% of the units reserved for households with total household income up to 80% of the Area Median Income (AMI) as determined by the United States Department of Housing and Urban Development, and the remaining 50% reserved for households with total household income up to 120% of the AMI.
The Developer’s response to RFP 43-22 identified a $1,240,170 cash gap in addition to the requested donation of the property, therefore Exhibit B of the contract specifies the City agrees to commit to the donation of the parcel, valued at $525,000 and a contribution of an additional $357,585 for a total direct subsidy of $882,585 (half of the total direct subsidy identified as required in the response).
Additional requirements provided by Exhibit B establishes terms and conditions that the Developer must meet prior to and after closing. Per the exhibit, all pre-development activities must be completed prior to closing including, but not limited to, funding commitments, site approval, and building permits.
First Amendment (executed August 5th, 2024)
Due to unforeseen delays in the development process, the Parties agreed to amend the Contract to extend the closing date to allow Developer more time to complete the pre-development activities indicated in Exhibit "B" of the Contract. This amendment extended the closing date to December 31st, 2024.
Second Amendment (executed December 10th, 2024)
Due to Hurricanes Helene and Milton, the parties agreed to extend the closing date to allow the Developer more time to work through predevelopment activities. This amendment extended the closing date to April 30th, 2025.
Third Amendment (executed April 25th, 2025)
Due to further issues with site plan approval and easement acquisition the Developer requested additional time. This amendment extended the closing date to July 31st, 2025.
Fourth Amendment (executed July 15th, 2025)
In June 2025, the Developer requesting an extension until December 31st, 2025, in order to obtain building permits, complete negotiations for a stormwater easement from a neighboring property and complete the platting application process for Duke Energy. This amendment extended the closing date to December 31st, 2025, with an option to extend an additional 90 days with city staff approval, which was exercised.
Proposed Fifth Amendment
Following approval of the fourth amendment, the Developer identified a conflict with the contract requirement for the Developer to obtain all building permits prior to closing. Under the City of Clearwater’s development code, a final plat must be recorded before building permits can be issued. However, the recording of the final plat cannot occur until infrastructure and site work are completed. As a result, the Developer is requesting that the City remove the permit contingency and allow the closing to proceed prior to final permit issuance.
To protect the City’s interests, contract language has been included that grants the City the right, at its sole discretion, to revert ownership of the property if the project fails to meet contractual timelines.
The amendment provides for an extension of the contract closing date to June 30th, 2026, it extends the project completion date to December 31st, 2028, removes the permit contingency and assigns the contract to the single-asset limited liability company formed by the Developer for purposes of holding the property.
Staff is requesting Council approval of the Fifth Amendment to the sale agreement.
APPROPRIATION CODE AND AMOUNT:
Funding is to be provided by 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 needed, staff may utilize Housing Trust Funds or Home Investment Partnership Program 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.
