Court Opinion

ID: 4416672
Source: CourtListenerOpinion
Date Created: 2019-07-15 14:03:30.139524+00
Date Added: 2024-06-11T08:46:45.877448
License: Public Domain

FIRST DISTRICT COURT OF APPEAL
                 STATE OF FLORIDA
                  _____________________________

                          No. 1D17-4503
                  _____________________________

HERITAGE OAKS, LLP,

    Appellant,

    v.

MADISON POINTE, LLC,
AMERICAN RESIDENTIAL, and
FLORIDA HOUSING FINANCE
CORPORATION, etc., et al.,

    Appellee.
                  _____________________________

On appeal from the Florida Housing Finance Corporation.
Bernard Smith, Chair.

                           July 15, 2019

B.L. THOMAS, J.

     Heritage Oaks challenges the final order of the Florida
Housing Finance Corporation, adopting the recommended order of
an administrative law judge and rescinding an award for funding
to construct affordable housing. The corporation determined that
Appellant incorrectly answered a material question in the Request
for Application.
                               Facts
    The Florida Housing Finance Corporation establishes
“procedures necessary for proper allocation and distribution of low-
income housing tax credits.” § 420.5099(1), Fla. Stat. (2018).
Florida Housing periodically administers competitive solicitations
through which developers may apply for funding for the new
construction or rehabilitation of affordable rental housing. Fla.
Admin. Code R. 67-60.001(1).
     In 2016, Florida Housing issued an RFA proposing the
development of affordable multifamily housing in Broward, Duval,
Hillsborough, Orange, Palm Beach, and Pinellas counties.
Appellant responded and requested funding for a proposed housing
development called Heritage Oaks, which would consist of 85
newly constructed housing units. At the time that Appellant
submitted its application, there were occupied housing units on the
site. But under the proposed development, these existing units
would be demolished to make way for the 85 new units.
     Question 5 of the RFA concerned “General Development
Information,” and under this heading, Question 5.e. was labeled
“Number of Units in Proposed Development.” Under this
subheading, Questions 5.e.(1) and (2) asked for the “total number
of units” and the amount of new construction and rehabilitation
units 1 in the proposed development. Question 5.e.(3) stated:
     “The Applicant must indicate which of the following applies to
the occupancy status of any existing units:
    (a) Existing units are currently occupied
    (b) Existing units are not currently occupied
    (c) There are no existing units.
     Following the question, the RFA stated “[t]he Applicant
should refer to Section Four A.5e.e of the RFA before answering
the above question.”      Section Four of the RFA provided
instructions regarding the information required on the RFA. The
instructions stated, under Question 5, that “[u]nless stated
otherwise, all information requested in the RFA pertains to the

    1 “New construction” units are those that will be built for the
proposed development, and “rehabilitation units” are units that
are already built and will be refurbished or renovated by the
developer for the proposed development.

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proposed Development.” Regarding the question asking for the
occupancy status of existing units, Section Four A.5e.e stated:
         Developments that are tentatively funded will be
    required to provide to the Credit Underwriter a plan for
    relocation of existing tenants, as outlined in Item 2.b.(6)
    of the Applicant Certification and Acknowledgement
    form. The plan shall provide information regarding the
    relocation site; accommodations relevant to the needs of
    the residents and length of time residents will be
    displaced; moving and storage of the contents of a
    resident’s dwelling unit; as well as the approach to inform
    and prepare the residents for the rehabilitation activities.
For the occupancy-status question, Appellant responded that there
were no existing units.
     In 2017, Florida Housing announced its intent to award
funding to seven applicants, including Appellant. Appellee
Madison Pointe also applied for housing credits in response to the
same RFA but was not selected for funding. Appellee filed a notice
of protest and petition for formal administrative hearing under
section 120.57(3), Florida Statutes, to challenge Florida Housing’s
funding award to Appellant. Appellee alleged that Appellant gave
several inaccurate answers in its application, including its answer
that there were “no existing units,” when there were existing
occupied units on the development site. Appellant intervened in
the proceeding. The parties stipulated that if Appellant’s
application was deemed ineligible, Appellee Madison Pointe’s
application would be recommended for funding.
     At the administrative hearing, the director of Florida
Development for Norstar, co-applicant with Appellant, testified
that he prepared Appellant’s application for funding in response to
the RFA. He further testified that he understood the question
asking for the occupancy status of any existing units to mean “if
there are rehab units, are they occupied?” He testified that his
reading was based on the question’s subheading, which stated that
all questions under that heading referred to the proposed
development. He reasoned that an existing unit can only be part of
the proposed development if it is to be rehabilitated; an existing
unit that will be demolished will not become part of the proposed

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development. Further, he noted that the instructions to the
question state that a developer must inform existing tenants about
rehabilitation activities, which he thought validated his
interpretation that the question only asked for the occupancy
status of existing units to be rehabilitated.
     In its recommended order, the administrative law judge found
that Appellant’s statement on the RFA that there were “no existing
units” was a false statement of material fact: “Florida Housing has
a material interest in ensuring that tenants located in existing
housing units are properly and adequately relocated during the
development phase of any Florida Housing-funded development.”
The recommended order concluded that an incorrect answer
regarding the occupancy status “has an adverse effect on the
interest of Florida Housing and the public in ensuring the process
protects the welfare of the current housing residents,” and that
Appellant’s failure to disclose the existing occupied housing units
was a “material deviation from the requirements of the RFA.”
     The recommended order proposed that Florida Housing enter
a final order rescinding the intended award to Appellant and
designating Madison Pointe as recipients of the funding. Florida
Housing adopted the findings of fact and conclusions of law,
ordered its award to Appellant rescinded, and ordered Appellee
Madison Pointe as a recipient of funding.
                             Analysis

     This court interprets state administrative rules de novo. Art.
V, § 21, Fla. Const. “This Court's review of final agency action
arising from a bid protest is governed by section 120.68(7), Florida
Statutes (2016).” Brownsville Manor, LP v. Redding Development
Partners, LLC, 224 So. 3d 891, 894 (Fla. 1st DCA 2017). “Section
120.68(7) gives the Court statutory authority to, among other
things, remand or set aside agency action if such action depends
on findings that are not supported by competent, substantial
evidence or an agency's erroneous interpretation of law and a
correct interpretation compels a different result.” Id. Florida
Housing is “required to interpret the RFA consistently with its
plain and unambiguous language.” Id. “We must reverse and
remand if the agency erroneously interpreted the law and a correct
interpretation compels a different result.” Flagship Manor, LLC v.

                                 4
Florida Housing Finance Corp., 199 So. 3d 1090, 1092 (Fla. 1st
DCA 2016) (quoting § 120.68(7)(d), Fla. Stat. (2017)).

     The question at issue asked applicants to provide the
occupancy status of any existing units. The RFA instructions state
that applicants are required to provide the occupancy status of
existing units so that the applicant can provide a plan to relocate
any tenants currently occupying those existing units. Under
Appellant’s reading of the RFA, if an existing tenant’s unit will be
demolished entirely, a developer is not required to plan for that
tenant’s relocation. We disagree, because such a reading is not
reasonable. An agency may not adopt implausible or unreasonable
interpretations of an RFA. See Flagship Manor, 199 So. 3d at 1093.
Florida Housing was correct to interpret “existing units” to mean
units existing on the development site at the time of application.
Thus, Florida Housing did not err in adopting the recommended
order and rejecting Appellant’s application.

     Appellant also argues that even if it incorrectly stated that
there were no existing units, the error was a “minor irregularity”
that Florida Housing should have waived. “Florida Housing's
regulations give it discretion to ignore ‘minor irregularities’ in an
application.” Flagship Manor, 199 So. 3d at 1094 (citing Fla.
Admin. Code R. 67–60.008). “A ‘minor irregularity’ refers to
variation ‘that does not provide a competitive advantage or benefit’
to the applicant over other applicants.” Id. (citing Fla. Admin. Code
R. 67–60.002(6)). “Minor irregularities” are errors “that do not
result in the omission of any material information.” Fla. Admin.
Code R. 67-60.008.

     But Appellant’s inaccurate response to the occupancy-status
question resulted in the omission of material information. Thus,
the omission was not a minor irregularity.

    AFFIRMED.

ROBERTS and OSTERHAUS, JJ., concur.

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               _____________________________

    Not final until disposition of any timely and
    authorized motion under Fla. R. App. P. 9.330 or
    9.331.
               _____________________________

Michael P. Donaldson and Christine Davis Graves of Carlton,
Fields, Tallahassee; Scott A. McLaren of Hill Ward Henderson,
Tampa, for Appellant.

Hugh R. Brown, General Counsel, Betty C. Zachem, Assistant
General Counsel, Florida Housing Finance Corporation,
Tallahassee, for Appellee.

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