Marco reconsiders role in employer-assisted housing program

Council to review new contract between private firm and city for statewide employer-assisted housing program

Article Highlights

  • The city would earn $120 on each $100,000 of property sold in the statewide program
  • City of Marco would be paid to oversee finances and perform audits at city discretion
  • Home seller would pay 4 percent into employer-assisted housing program
File photo
City attorney Alan Gabriel speaks with DRH representatives on negotiating a contract with the city to oversee the private, for-profit firm's proposed statewide employer assisted housing program. In a June meeting, council requested more information and a more hashed-out negotiation to aid in their decision of whether to perform audits and receive a fraction of each home sale as compensation for their oversight.

Photo by KELLY FARRELL, Staff

File photo City attorney Alan Gabriel speaks with DRH representatives on negotiating a contract with the city to oversee the private, for-profit firm's proposed statewide employer assisted housing program. In a June meeting, council requested more information and a more hashed-out negotiation to aid in their decision of whether to perform audits and receive a fraction of each home sale as compensation for their oversight.

— A late add to Marco's council agenda may spark some interest as the city mulls the idea of an additional non-tax income source-- employer assisted housing oversight.

The idea of the City of Marco Island overseeing the finances of a statewide employer-assisted housing program managed by private, for-profit firms, didn't receive widespread support when it went before council in June.

Concerns at that time included risk that the city could lose money or take on liability in the program first pitched by three Marco Island women working with the private firms YES, Data Research Handling and My Generation USA, in April.

City Attorney Alan Gabriel of the law firm Weiss-Serota, which is based out of Fort Lauderdale, worked further with the firms to create a contract that would increase the city's potential income and decrease its potential liability.

The newest version of the contract doubles the potential income to the city from the last time council reviewed the matter and addresses liability insurance issues as well.

The program is a network of partners including the three organizations, home sellers, employers and employees.

"We're a healthcare PPO for the real estate industry," Jonnie Sturges, of My Generation U.S.A, which offers the educational aspect of the partnership, has said.

Initially, the city was to receive between 1 percent and 1.5 percent of a fee paid by home sellers called a "mandatory development fee." In the most recent contract being proposed to council, the city would earn 3 percent of that fee.

Suzanne Henry of Data Research Handling has said the reason for asking for the city's involvement is to provide transparency to their program by having the firms' books open to the public and to the city for audit.

Henry said she was not available to comment in advance of the meeting Monday.

In previous interviews, the program has been explained as follows by DRH/YES officials:

An employed person from anywhere in Florida wants to buy a home, has the resources to do so and asks their employer to offer housing benefits at no cost to either party.

A fund is set up from private individuals and organizations interested in investing in the program and this fund offers the employee and prospective buyer 3 percent of a home's cost to use as a down payment or toward any closing cost of their choosing.

The seller of the home pays YES/DRH a "mandatory development fee" of $40 per $1,000 of property sold.

This is where the city gets their potential income. The city would get 3 percent of this mandatory development fee, according to the newest contract. This city income is compensation for their work of overseeing the fund.

The remainder is allocated as follows: 10 percent goes to DRH; 75 percent stays in the self-perpetuating fund and 12 percent would go into "economic gardening of the community"-- or any project that benefits the community where the home was sold.

Payoff?

Keys to the program's success, at least in-part, is home sellers' willingness and ability to pay 4 percent of their home's selling price into the system and the ability of the program to garner statewide participation.

If a home sells for $100,000, the seller pays $4,000 into the employer-assisted housing program. If the current proposal gets council support, the city's potential earnings on each $100,000 of property sold in the statewide program would be $120.

Henry has said she believes the program will work because it will help the fill the void of similar programs which have recently gone defunct in Florida.

When the issue was first brought before council, at least two residents publicly questioned the viability of the program and the reason for the city's involvement.

Marco Island Taxpayers' Association President Fay Biles and resident Phil Kostelnik weren't convinced at that time if the program was worthwhile.

Kostelnik had said city officials should stay focused on other city issues.

Councilman Frank Recker questioned why the city would add transparency when the firm could choose to have their books open even without the city's state-mandated open records laws.

Check back to marconews.com to see how officials, councilors and residents respond to the most recent proposal in live online coverage of the City Council meeting tonight.

View related stories for more issues on tonight's council agenda and check back for live coverage

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