Google Ads help pay the expense of maintaining this site
Click Here for the Neighborhood Transformation Website
Fair Use Disclaimer
Neighborhood Transformation is a nonprofit,
noncommercial website that, at times, may contain copyrighted material
that have not always been specifically authorized by the copyright
owner. It makes such material available in its efforts to advance the
understanding of poverty and low income distressed neighborhoods in
hopes of helping to find solutions for those problems. It believes that
this constitutes a 'fair use' of any such copyrighted material as
provided for in section 107 of the US Copyright Law. Persons wishing to
use copyrighted material from this site for purposes of their own that
go beyond 'fair use' must first obtain permission from the copyright
4/10/05 - South Florida Business Journal
Hotels turn into homes
By Susan Stabley
Three former hotels in booming
downtown Miami and on Miami Beach are
slated for redevelopment as low-rent housing for the formerly homeless.
The planned projects - located just blocks away from million-dollar
condos and pricey hotels - would be used by Carrfour Supportive Housing
to take the homeless off the streets and into apartments at rents as
low as $140 a month.
The nonprofit said its ability to afford properties in prime locations
was possible by reclaiming derelict buildings.
Carrfour bought the 65-year-old Sun South Place at 530 Meridian Ave.,
in the heart of South Beach, in 2001 for $1.65 million. Last year,
Carrfour acquired for $3.62 million the Paradise Inn - a 1950s-era
motel that will be renamed Harding Village - at 8540 Harding Ave. in
North Beach, near Surfside.
The Royalton - a historic Miami hotel that fell into disrepair and
became a flophouse offering rooms by the hour - was bought for $3.5
million in December in a partnership with Carlisle Development Group, a
for-profit builder of multifamily affordable housing. Work will begin
within a few months for the property at 131 S.E. First St., east of the
county's government center and courthouses.
"It's a bigger gamble than normal," Carlisle COO Matthew Greer said of
the Royalton project, which is a departure from the rental apartments
the company typically develops.
Creating this kind of housing can be politically thorny and Greer
credits officials like Miami City Commissioner Johnny Winton and
Miami-Dade County Commissioner Barbara Carey-Shuler for their support.
Outside of the challenge to find sites that are both appropriate and
inexpensive, Carlisle and Carrfour will seek money from at least six
different sources to finance the $13 million Royalton project. Carlisle
is not involved in Carrfour's other projects.
"It's the most complicated financing in real estate," said Doug Mayer,
Carrfour VP of housing development. "There are multiple levels of
funding, all with slightly different requirements."
Funding includes about $500,000 from the Federal Home Loan Bank of
Atlanta's Affordable Housing Program. Another source eyed is Miami-Dade
County's Documentary Stamp Surtax Program, collected from commercial
real estate transactions, plus other county and city of Miami programs
that can result in chunks of funding in the hundreds of thousands of
Most of the money - as much as $8 million - will come from a federal
Section 42 tax credit program for low-income housing, Greer said.
Carlisle sends the credits to syndicates to create equity. Syndicates
sell the credits to corporations, which then deduct the dollars
directly from federal tax payments.
Role of private builders
Private builders - not the government - then find the land, secure the
loans and build the buildings, he explained. They own it and manage it
and can still bring in a profit. Development fees are restricted to a
maximum of 16 percent of the total project cost.
"It's one of the things Carlisle brings to the table," Mayer said.
"They are one of the largest developers of affordable housing in the
state, if not the largest. They have financial depth we don't have."
A tax credit program for restoring old buildings will also be tapped to
return the Royalton to its former 1920s-era glory.
"It's a two-for-one," Greer said. "We provide housing and we save a
Of the Royalton's 100 units, 80 will be for the formerly homeless.
Carrfour wants the other 20 for those who qualify for affordable
housing and possibly a floor for young adults exiting the foster care
The nonprofit has a 96 percent success rate for residents, meaning the
majority stays at a Carrfour housing unit or moves on to a home of
their own choosing. Four percent leave for reasons like relapse and
referral to residential treatment or eviction if rent is not paid.
Those who qualify to stay at one of the three projects must have
already moved through Carrfour's program and must have been clean and
sober for a minimum of six months. Tenants in the programs go through
required random drug testing and work with staff who help them get
education and training. Residents pay rent tied to how much they make -
typically $300 to $400 a month, but never more than one-third of their
Carrfour also targets the homeless in a project's community.
"We're not bringing in the homeless," Mayer said. "We're taking them
off the street and housing them. Providing people with a decent place
to live isn't just good for the soul. It's good for business."
Business members of the Greater Miami Chamber of Commerce's Homeless
Committee created Carrfour in 1993. Since then, Carrfour has assembled
more than $70 million to create and run 700 units of supportive
housing. It currently operates 426 units housing 813 people, 330 of
whom are children. An additional 338 units are under development to
house 562 people, including 200 children.
Solving the homeless problem is critical for Miami and Miami Beach,
where tourism is vital to the economy, Carrfour President and CEO Maria
Pellerin Barcus said.
Pellerin Barcus said her nonprofit wouldn't flip the properties for a
Besides, it's almost impossible. The tax credit programs have 15-year
requirements from the federal government to keep the properties
affordable for those with very low incomes. State requirements bump
those commitments up to 50 years.
"It's only getting more difficult," she said. "This is about it on
Miami Beach. There's no motivation to sell."