MINNEAPOLIS – July 9, 2020 – In another lawsuit following the troubling trend threatening the viability and accessibility of affordable housing in communities that desperately need it across the United States, Winthrop & Weinstine has successfully represented another non-profit affordable housing developer to achieve its mission to preserve affordable housing. This time, through the enforcement of a right of first refusal (“ROFR”) provided under the Low Income Housing Tax Credit (“LIHTC”) program, the firm’s client—Opa-Locka Community Development Corporation, Inc.—prevailed over its partners (commonly known as Hallkeen Development or Management) who sought to sell a 216-unit affordable housing development located in Miami-Dade County, known as Aswan Village, to a third party investment firm without first involving OLCDC or honoring its ROFR.
Through a summary judgment decision with broad implications for the LIHTC program and its non-profit participants, the Florida Court issued a decisive ruling in favor of OLCDC on all issues before it and confirmed that, under Section 42 of the United States Code, a non-profit’s ROFR is not conditioned upon the receipt of any third-party offer or contract to purchase the development. Instead, the Court confirmed that all that is necessary to trigger enforcement of a Section 42 ROFR is for the owner of the affordable housing development to manifest an intent or willingness to sell the development. And, because the contract giving OLCDC its Section 42 ROFR contained no other conditions for enforcement, it was not necessary for the owner of the development to have received or entered into an enforceable purchase agreement before OLCDC’s ROFR was triggered. As a result, and based on the facts of the case, the Court granted OLCDC summary judgment, dismissed all claims and defenses presented by the Hallkeen defendants, and ordered them to specifically perform under the ROFR by transferring Aswan Village to OLCDC under the Section 42 minimum purchase price. Thus, the only remaining issues in the case concern OLCDC’s damages, which exceed more than $1 million due to the defendants’ conduct.
This decision adds to a series of successful outcomes in cases through which Winthrop & Weinstine has been working on behalf of affordable housing developers in the LIHTC industry across the United States since 2013, commonly referred to as Year-15 Exit disputes. Year-15 Exit disputes are hyper-specialized and often involve parties, commonly referred to as Aggregators, who were not original participants in the LIHTC investment or whose objectives have changed due to changes in ownership structures since inception of the LIHTC partnerships. Winthrop & Weinstine shareholder David A. Davenport has led litigation and other efforts for general and managing partners since 2013 in disputes in 20 states in over 40 cases and other matters that have involved over 100 LIHTC developments.
To learn more about Winthrop & Weinstine’s work with affordable housing and Year-15 issues, visit www.winthrop.com and access David Davenport’s experience through https://www.winthrop.com/attorneys/d-davenport/. To receive a copy of the decision, please e-mail David at firstname.lastname@example.org or call him directly at 612-604-6716.
To learn more about the Opa-Locka Community Development Corporation, please visit https://www.olcdc.org/. To read their announcement and their press release, please view hhttps://www.olcdc.org/post/housingadvocatesletterere.