Florida City sells lots for redevelopment in ‘Snakepit’ neighborhood

Florida City officials plan to sell 22 lots in a neighborhood known as the “Snakepit” to a developer who will build up to 100 apartments on them.

The city’s Community Redevelopment Agency wants to sell the lots, totaling about 5.2 acres, to Blue Heaven Villas LLC, whose owner is involved in another redevelopment project for the city.

The neighborhood’s name owes to the fact that gas company employees sometimes find snakes curled up in the meters when they come to read them. The area includes a scattering of homes and small businesses bordered roughly by Northwest Seventh Avenue, Northwest 14th Street and Lucy Street. The Snakepit streetscape bespeaks hard lives and times; some lots have been vacant since Hurricane Andrew swept through South Miami-Dade in 1992.

"Things take on a life based on what they’re called, and Blue Heaven Villas sounds a lot nicer to me than ‘Snakepit,’" said Florida City CRA director Richard Stauts, who’s been working on acquiring the parcels since 2008 to attract development. "We made it a major priority to improve this neighborhood," he said.

Blue Heaven won the bid over DDA Development of Tampa, whose initials stand for Difficult to Develop Areas. The affordable housing developer says it has created 2,040 units since 1995. The city’s CRA lots weren’t on the market when DDA principal Bowen Arnold approached Stauts with an offer of $1.35 million — almost the same as what the city paid for them — and a proposal to build 60 two-story units with rents likely to range from $550 per month for a one-bedroom apartment to $650 for two bedrooms.

The CRA lots were then publicly advertised. Blue Heaven’s bid of $1.5 million came in "just under the wire," said Stauts.

Blue Heaven’s principal, George Howard, was known to Stauts for taking over a failed Florida City project in the same neighborhood, which he bought in foreclosure in 2010. Under the rubric of Tower View Town Homes LLC, Howard’s plans for that property between Fifth and Sixth Avenues are to rehabilitate 24 existing homes and build 24 more in phase two.

“Blue Heaven is going to be a testimony to the community. The only thing I’m looking for is to create jobs, a safe environment for local residents, and a good quality product at a reasonable rate,” Howard said. A minister in training, he cited Opa Lakes, a project in Opa-locka, where he offers $10-an-hour construction jobs to locals who can learn skills to take to the next job.

With only a $150,000 difference between them, Stauts said the deciding factor wasn’t price, but financing. DDA would have applied for a tax-credit loan through Florida Housing Finance Corp., a competitive program that favors projects serving those with the lowest incomes and that remain affordable for long periods of time.

While Howard says he, too, will seek tax-credit funding for the Blue Heaven development, he isn’t dependent on it to get it done. Fort Lauderdale-based Wellesley Funds, an investor-backed real estate loan originator, is prepared to finance the project directly with private funds. Wellesley also is the funder behind Howard’s Tower View project.

In order to defray project costs further, Stauts is executing a purchase and sale agreement that allows Blue Heaven to defer paying for the parcels in full until the project moves past the construction phase into permanent financing, for an anticipated period of two years.

At that time, Blue Heaven will be expected to pay the $1.25 million balance due on the parcels. If the project falls through, the parcels will revert to the CRA.

Private funding makes the Blue Heaven project shovel-ready, according to Howard and Stauts. They say it also means a better-quality unit, since Howard isn’t tied to the same rent ceilings as government-funded affordable housing programs. Rents can be set for optimum investor profit at whatever the market will bear, and are likely to be higher without government program constraints. Working-class and poor residents will make up the difference using vouchers through the federal Section 8 program, as they do in other Florida City’s units that also follow the private-funding paradigm.

While Florida City’s sizeable low-income population could use more affordable housing, Stauts hopes the Blue Heaven project will upscale the ‘Snakepit’ by attracting people who can afford a higher quality apartment, and by pressuring other apartment complexes to upgrade in order to remain competitive.

“If the only thing you’re promoting is affordable housing, you’re not doing right by your community,” Stauts said. “What we’re after is to change the neighborhood.”