Key Points

  • The First District Court of Appeal held that Florida Housing Finance Corp.'s final order erroneously read a "dedicated space" requirement into the solicitation's definition of Mixed-Use Institutional Space.
  • The court affirmed anyway, finding competent, substantial evidence that the developments Fern Grove cited did not deliver institutional services at least five days a week.
  • The court held that an agency does not act arbitrarily or capriciously when only one applicant's award is scrutinized because a private party's protest targeted only that applicant.
  • The court held that treating experience, a historical fact, differently from anticipated financing details deferred to credit underwriting was not fundamentally unfair.

Florida's housing finance agency misread its own funding solicitation when it faulted an affordable-housing developer for failing to show that past social services had run out of a "dedicated space," a state appeals court ruled Thursday. The court nonetheless upheld the developer's loss of a state loan award under the Live Local Act.

A three-judge panel of the First District Court of Appeal affirmed the Florida Housing Finance Corp.'s final order against BDG Fern Grove Phase Two LP. Fern Grove had been preliminarily approved for State Apartment Incentive Loan funding, known as SAIL, for a 129-unit mid-rise in Orange County. Judge M.K. Thomas wrote for the court, joined by Judges Bilbrey and Kelsey. The panel held that competent, substantial evidence supported findings that the developments Fern Grove cited as experience did not show the on-site institutional presence five days a week that the solicitation required.

The decision holds that the agency and the administrative law judges who hear its bid protests may not read into a request for applications, the document Florida Housing uses to solicit and score funding bids, a requirement its text does not contain. It also leaves such an error without effect where the record supports the result on other grounds. "We agree that the Final Order erroneously injected a 'dedicated space' requirement into the RFA's text," Judge Thomas wrote, before affirming on "independently sufficient and unchallenged factual findings about Fern Grove's experience."

Florida Housing issued the solicitation on Nov. 20, 2024, seeking proposals for SAIL funding for mixed-income, mixed-use and urban infill developments, as authorized by the 2023 Live Local Act. Of 65 applications, its board preliminarily approved 10 on Jan. 24, 2025, subject to credit underwriting, the agency's later financial review. WHFT LL Workforce Ltd. and WHFT LL Workforce Developer LLC, which the opinion calls Catchlight, were found eligible but were not among the 10.

Fern Grove applied under the solicitation's Mixed-Use Institutional Space subcategory and committed to lease 1,000 square feet in its building to a food pantry and counseling facility operating at least five days a week. The solicitation defines that category as "[c]haritable, educational, healthcare, or civic services (local government/state) within a Development that is in operation at least 5 days a week." Applicants also had to identify prior developments showing management and developer experience with mixed-use projects.

For management experience, Fern Grove pointed to Banyan Reserve and Banyan Cove, where the Treehouse Foundation offered workshops, classes and a helpline Monday through Friday but was not on-site five days a week. For developer experience, Fern Grove cited Parramore Oaks, a 120-unit Orlando development where the Orlando Neighborhood Improvement Corp. ran a housing stability program mostly from its main office and, later, an arts program that met twice weekly. The two programs did not run at the same time.

Catchlight protested Fern Grove's preliminary award. After a March 2025 hearing, an administrative law judge concluded that Fern Grove failed the mandatory experience requirements and that the agency's initial eligibility finding was clearly erroneous. Florida Housing's board adopted that recommendation as its final order on June 13, 2025.

On appeal, Fern Grove argued that the agency had imposed an unwritten "dedicated space" requirement. The panel agreed. Florida Housing and the judge below had reasoned that the word "component," in the solicitation's description of a mixed-use development's non-residential part, connotes a physical, definable piece of a development. "We cannot adopt the ALJ's substitution of 'definable unit' for the RFA's own term," Judge Thomas wrote. That phrase, the judge added, "like 'dedicated space,' appears nowhere in the RFA."

The court pointed to the solicitation's wording. The companion definition of Mixed-Use Commercial Space uses the word "space"; the institutional definition does not. The word "dedicated" appears elsewhere in the solicitation but in neither definition. "That selective usage suggests a deliberate drafting choice rather than an oversight," the opinion said. To the extent the final order demanded a physically dedicated, exclusive space, the court held, it "imposed a criterion the RFA does not expressly state."

That error did "not end our inquiry," the panel wrote. Reversal is required only where no alternative ground supports the result under a correct reading, the court said, invoking the "tipsy coachman" doctrine, which lets an appellate court affirm a decision that reached the right result for the wrong reasons.

The five-day requirement decided the case. Fern Grove conceded that Treehouse was not present at the Banyan properties five days a week, and the record showed services delivered "sporadically on-site, frequently online or off-site, and scheduled around community need and instructor availability rather than on a fixed five-day basis." The Parramore Oaks showing "suffers the same infirmity," the court wrote, because the two programs never overlapped and one ran mainly off-site.

The panel also rejected Fern Grove's claim that it was singled out for scrutiny not applied to roughly 60 other mixed-use applications submitted since 2023. That scrutiny arose from Catchlight's protest, which named no other applicant, and the same protest mechanism was open to Fern Grove or any other participant, the court said. "An agency does not act arbitrarily or capriciously merely because private parties selectively invoke available protest rights," Judge Thomas wrote.

Fern Grove had further argued that fairness required Florida Housing to defer review of its experience to credit underwriting, as the agency had deferred Catchlight's financing shortfall. The court disagreed. "Developer and management experience are historical facts, existing or not existing at the time of application," the opinion said, while the solicitation describes pro forma financing details as "anticipated" and subject to later confirmation. Because the two categories differ, the court wrote, "their asymmetric treatment reflects that difference, rather than selective enforcement or fundamental unfairness."

Fern Grove was represented by Michael J. Glazer of Ausley McMullen. Ethan Katz represented Florida Housing.

The panel affirmed Florida Housing's final order without remand. Under the opinion's own terms, the decision is not final until the court disposes of any timely and authorized motion under Florida Rules of Appellate Procedure 9.330 or 9.331.