Title
MOTION TO PASS PROPOSED ORDINANCE NO. 2026-04 ON FIRST READING.
PROPOSED ORDINANCE NO. 2026-04 IS AN ORDINANCE OF THE CITY OF PEMBROKE PINES, FLORIDA, PURSUANT TO SECTION 8.03 OF THE CITY OF PEMBROKE PINES CHARTER, AUTHORIZING THE EXECUTION OF AN AGREEMENT TO ENTER INTO SUB-SUBLEASE, ATTACHED HERETO AS EXHIBIT “A” AND INCORPORATED HEREIN BY REFERENCE, FOR REAL PROPERTY GENERALLY LOCATED AT 8103 SOUTH PALM DRIVE (TOWER I), 8210 FLORIDA DRIVE (TOWER II), AND 8203 FLORIDA DRIVE (TOWER III), COLLECTIVELY REFERRED TO AS PINES PLACE AND DESCRIBED IN EXHIBIT “B”, WHICH PROPERTY IS SUBLEASED BY THE CITY FROM THE STATE OF FLORIDA DEPARTMENT OF CHILDREN AND FAMILY SERVICES AND OWNED BY STATE OF FLORIDA THROUGH THE BOARD OF TRUSTEES OF THE INTERNAL TRUST FUND OF THE STATE OF FLORIDA; AUTHORIZING THE CLOSING OF THE TRANSACTION CONTEMPLATED IN THE AGREEMENT EFFECTIVE UPON THE FILING BY THE CITY MANAGER WITH THE CITY CLERK OF A CERTIFICATE CONFIRMING THAT THE CLOSING REQUIREMENTS IN THE AGREEMENT HAVE BEEN SATISFIED, THE FORM OF WHICH IS ATTACHED HERETO AS EXHIBIT “C”, SUBJECT TO THE TERMS AND CONDITIONS AS SET FORTH IN THE AGREEMENT; AUTHORIZING THE PROPER CITY OFFICIALS TO EXECUTE ALL NECESSARY DOCUMENTS AND TO TAKE ALL ACTIONS NECESSARY TO CLOSE THE TRANSACTION CONSISTENT WITH THE AUTHORITY GRANTED HEREIN; PROVIDING THAT ANY AMENDMENTS EXTENDING THE REVIEW PERIOD TO THE AGREEMENT TO ENTER SUB-SUBLEASE MAY BE APPROVED BY A DULY EXECUTED RESOLUTION OF THE CITY COMMISSION; PROVIDING FOR CONFLICTS; PROVIDING FOR SEVERABILITY; AND PROVIDING FOR AN EFFECTIVE DATE.
SECOND AND FINAL READING IS TENTATIVELY SCHEDULED FOR JUNE 17, 2026.
Summary Explanation and Background
SUMMARY EXPLANATION AND BACKGROUND:
1. On March 15, 2001, the City entered into a Sub-Lease Agreement with the Florida Department of Children & Families (DCF), to develop, operate and maintain the 157-acre site of the former South Florida State Hospital. The property is owned by the state, through Board of Trustees of the Internal Improvement Trust Fund of the State of Florida, which is the cabinet (Trust), and is managed on behalf of the state by the Florida Department of Environmental Protection (DEP). The DCF leases the property from the Trust.
2. The Sub-Sublease originally provided that the City would sublease the site from DCF for a 50-year period from July 1, 2001 to June 30, 2051, and is subject to other terms and conditions relating to the City’s management of the site. In December 2020, both the Lease and the Sub-Lease were amended to extend their terms to January 3, 2090.
3. During that time the City has made considerable improvements to the property, including but not limited to, the construction of three (3) rental towers, known as Pines Place Towers, consisting of a total of 614 units. The City has financed the construction of these towers with various bonds.
4. The construction and management of the Pines Place Towers was authorized by the state through amendments to the Lease and Sub-Lease in 2008. The Lease and Sub-Lease require the towers to be used:
“as senior, workforce, and affordable housing in accordance with Resolution No. 3189 of the City of Pembroke Pines and the eligibility and other requirements of the Code of Ordinances of the City of Pembroke Pines, including without limitation, Ordinance 1575, passed 3-1-07, and Chapter 158 thereof, Florida Statutes, and other laws and governmental rules and regulations; along with other related uses necessary for the accomplishment of this purpose as designated in the Land Use Plan.”
5. Reliant Cap XI, LLC has offered to enter into the Agreement to enter into Sub-Sublease for the Pines Place Towers located at the Howard C. Forman Human Services Campus in the amount of $90,250,000 [subject to closing expenses]. This Agreement will include a sale of the improvements to Reliant Cap XI, LLC, as well as require the parties to enter into a Sub-Sublease for the property.
6. Reliant Cap XI, LLC has committed through the agreement to comply with the City's affordable housing guidelines. Reliant Cap XI, LLC will need to use the property for senior, workforce and affordable housing as required by the Lease and City’s Sub-Lease with the DCF as described in paragraph 4 above. As a condition of closing, as mentioned in paragraph 5, the City and Reliant Cap XI, LLC will need to enter into a Sub-Sublease for the property. The form of the Sub-Sublease must be substantially in the form attached as an exhibit to the Agreement. It will need to confirm the use will remain as authorized in the Lease and Sub-Sublease, and will need to be acceptable to the state agencies (DEP and DCF).
7. The proposed Agreement with Reliant Cap XI, LLC must further the purpose of the Lease and Sublease. As it relates specifically to Pines Place, any entity that manages or operates the Pines Place project must use the property solely for senior, workforce and affordable housing in accordance to the City resolution and ordinances, and state law.
Each year, the Florida Housing Finance Corporation (FHFC) creates tables to show acceptable rent for affordable housing based upon annual median income (AMI) for each county in Florida on an annual basis. The 2026 Income Limits and Rent Limits Chart (“Chart”) for Broward County is attached hereto. Pines Place charges uniform rent for all new residents at the 80% rent category. However, for current residents, some are paying at or near the City’s maximum, but many residents who have been at Pines Place for extended periods of time are paying much less than the maximum the City charges at Pines Place.
Reliant Cap XI, LLC has agreed to limit rents to 80% of AMI for a period of ten (10) years. For current tenants whose rent is lower than 80% of AMI, rents will be raised gradually. After year 10, Reliant Cap XI, LLC will maintain rents for households eligible for workforce and affordable housing consistent with the terms of the Lease and Sublease, including the Housing Element of the City’s Comprehensive Plan, Ordinance 1575, Resolution 3189 and applicable state statutes and rules. In essence, Ordinance 1575 established the City’s Affordable Housing Programs, codified in Chapter 158 of the City’s Code. The Housing Element of the City’s Comprehensive Plan addresses affordable housing policies Citywide. Resolution 3189 is specific to Pines Place and provides that it will operate “as a housing program for seniors, workforce and affordable housing.” State statutes and rules set the parameters for affordable housing, which is reflected in the Chart. In essence, Reliant Cap XI, LLC is agreeing that after year 10 they will follow the law and the terms of the Lease and Sublease, but at that point they will increase 50% of the rents up to 100% of AMI levels as reflected in the Chart. The closing will include a Declaration or similar document to confirm this commitment.
8. Reliant Cap XI, LLC has pledged to prioritize Pembroke Pines residents seeking to lease an apartment.
9. The property rights and improvements conveyed pursuant to the terms of the Agreement to Enter into Sub-Sublease Agreement has been appraised by three independent appraisers and its appraised value is not in excess of fifteen percent (15%) of the City’s annual operating budget.
10. Given that this is an Agreement to enter into the Sub-Sublease with associated due diligence periods for each party, many of the attached exhibits are simply form documents to be executed at or prior to Closing. This is why many of the exhibits still include blanks and are not executed. If the Agreement proceeds to Closing, the attached Exhibits will be executed in a form substantially the same as the Exhibits currently in the Agreement.
11. Furthermore, Section 13.12 of the Agreement to enter into Sub-Sublease, which provides for the right to assign the contract to an affiliated entity, only allows assignment of the actual contract, and does not contemplate assignments after occupancy under the Sub-Sublease. All assignments after the effective date of the Sub-Sublease will require the consent of the City.
12. Since the facilities were paid for using bonds, and in order to comply with all the regulatory requirements concerning the use of bond proceeds, the lump-sum payment for this sub-sublease will be used to defease (pay-off) the outstanding bonds related to the towers.
13. If Ordinance 2026-04 is approved, the process to defease the bonds will be presented to Commission at a later date, and will entail the use of financing professionals such as the City’s Financial Advisor, Ford & Associates; Bond Counsel -Bryant Miller Olive; and our City Attorney -Goren, Doody & Ezrol.
14. Although final numbers will not be known until the final pricing of the escrow deposit, the City, through its Financial Advisor, has estimated that the $90,250,000 million lump-sum payment from Reliant Cap XI, LLC will exceed the estimated amount of $35.5 million required to defease the bonds.
15. Administration recommends that City Commission approve Ordinance 2026-04, which authorize the proper City officials to take all actions necessary and to effectuate the terms of the Agreement to Enter into Sub-Sublease with Reliant Cap XI, LLC, and to execute all necessary documents required to close the transaction subject to the filing of the certificate of the City Manager. The certificate of the City Manager is necessary to confirm that the closing will proceed as a condition of defeasing the bonds, as Bond counsel has advised there is a 90 day window to do so and the City will not seek to defease the bonds unless the closing is to occur.
Financial Impact
FINANCIAL IMPACT DETAIL:
The City will receive a lump-sum payment of $90,250,000.
The estimated amount required to defease the Bonds is approx. $35.5 million
The net amount available to the City is $54.750 million. The final amount is subject to change based on the timing and expenses related to the bond defeasance.
Business Impact Estimate for Proposed Ordinances
BUSINESS IMPACT ESTIMATE:
Pursuant to Section 166.041, F.S., a Business Impact Estimate must be prepared for certain ordinances that impact the operations of local businesses.
a) Is a Business Impact Estimate (BIE) Form attached to this Ordinance? Yes
b) Is this Ordinance exempt from requiring an Business Impact Estimate (BIE)? No