Private Nonprofit

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster4473
ApplicantCiudad Mistica, Inc.
Appeal TypeSecond
PA ID#121-UAE3J-00
PW ID#RPA
Date Signed2023-01-12T17:00:00

Summary Paragraph

From December 28, 2019, to July 3, 2020, earthquakes caused damage in Puerto Rico.  On March 31, 2020, Ciudad Mistica, Inc. (Applicant) submitted a Request for Public Assistance (RPA), indicating that it was a Private Nonprofit (PNP) house of worship (HOW).  On May 18, 2021, FEMA issued a Determination Memorandum, finding that it could not identify an eligible activity and/or facility in the RPA, so the Applicant was not eligible for Public Assistance (PA).  On July 9, 2021, the Applicant submitted a first appeal, stating that its facilities, the services it offers, and their frequency meet PNP facility eligibility requirements.  The Puerto Rico Central Office of Recovery, Reconstruction, and Resiliency (Recipient) transmitted the first appeal, adding that if FEMA does not consider the Applicant’s facility eligible as a HOW, then it should be considered a community center.  On July 1, 2022, the FEMA Region II Regional Administrator denied the appeal, finding that the Applicant did not demonstrate that it owns or operates an eligible PNP facility that provides eligible services, so the Applicant was not eligible for PA.  FEMA explained that while some of the Applicant’s events and activities may be of a religious nature, it did not render any of the Applicant’s facilities a HOW.  FEMA also found that the record lacked documentation supporting the Recipient’s contention that the Applicant instead operated a community center.  On August 31, 2022, the Applicant submitted a second appeal, stating that it operates a HOW, as FEMA previously approved it as one under FEMA-4339-DR-PR.  Further, the definition of HOW is unclear, and FEMA’s first appeal determination emphasized a HOW’s construction rather than the actual services offered.

Authorities and Second Appeals

  • Stafford Act §§ 102(11)(B), 406(a)(1)(B).
  • 44 C.F.R. §§ 206.221(e)-(f), 206.222(b), 206.223(b).
  • PAPPG, at 11, 13-16.

Headnotes

  • To be eligible for PA funding, an eligible PNP applicant must own or operate an eligible facility.  An eligible PNP facility includes one that provides a noncritical, but essential social service to the general public, such as a HOW.  Eligibility of mixed-use PNP facilities is dependent on the primary use of the facility.
    • The Applicant has not demonstrated that it owns or operates a facility that provides eligible services, such as a HOW.  Instead, its facilities are primarily used for ineligible activities.

Conclusion

FEMA finds the Applicant is not eligible for PA funding because it does not own or operate an eligible PNP facility.  Therefore, this appeal is denied.

 

Appeal Letter

Manuel Laboy

Governor’s Authorized Representative

Government of Puerto Rico

P.O. Box 42001

San Juan, Puerto Rico 00940-2001

 

Dario A. Gonzalez Acevedo

Director

Ciudad Mistica, Inc.

P.O. Box 474

Sabana Grande, Puerto Rico 00637

 

Re:       Second Appeal – Ciudad Mistica, Inc., PA ID: 121-UAE3J-00, FEMA-4473-DR-PR, Request for Public Assistance – Private Nonprofit

 

Dear Mr. Laboy and Ms. Gonzalez Acevedo:

This is in response to a letter from the Puerto Rico Central Office of Recovery, Reconstruction, and Resiliency dated October 31, 2022, which transmitted the referenced second appeal on behalf of Ciudad Mistica, Inc. (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s denial of its Request for Public Assistance.

As explained in the enclosed analysis, I have determined that the Applicant is not eligible for Public Assistance funding because it does not own or operate an eligible Private Nonprofit facility.  Therefore, this appeal is denied.

Please inform the Applicant of my decision.  This determination is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.

 

                                                                      Sincerely,

                                                                          /S/

                                                                      Ana Montero

                                                                      Division Director

                                                                      Public Assistance Division

                                                                       

cc:  David Warrington  

Regional Administrator

FEMA Region II

Appeal Analysis

Background

From December 28, 2019, to July 3, 2020, earthquakes caused damage in Puerto Rico.  On March 31, 2020, Ciudad Mistica, Inc. (Applicant),  a Private Nonprofit (PNP) submitted a Request for Public Assistance (RPA).  The Applicant claimed damages to various structures on its property and indicated that it was a house of worship (HOW).

On May 18, 2021, FEMA issued a Determination Memorandum, finding that it could not identify an eligible activity and/or facility in the RPA, so the Applicant was not eligible for Public Assistance (PA).  FEMA explained that the Applicant was an established PNP organization registered as an entity that provides social, cultural, moral, and educative services.  However, FEMA found that the Applicant did not operate an eligible facility and was unable to identify any current longstanding, routine eligible activities.  FEMA noted the Applicant planned to construct future facilities that might have offered a potential venue for regular, eligible worship activities, but none were completed or in use at the time of the disaster.

First Appeal

On July 9, 2021, the Applicant submitted a first appeal, stating that its facilities, the services it offers, and their frequency meet PNP facility eligibility requirements.  The Applicant explained that its volunteer members meet weekly to maintain the facilities and hold meetings to delineate a number of activities that are organized during the year.  The Applicant explained that its facilities provide the ideal setting for participants to conduct spiritual activities and have mystical, special, and unique experiences.  The Applicant noted it plans to build a larger building, which will include a chapel and other venues for religious activities.  The Applicant noted that FEMA previously found it to be an eligible applicant under Hurricane Maria,[1] approving $992,390.11 in PA to repair road washout and landslide areas, and to reconstruct outdoor locations of learning and religious experience pavilions.

On September 13, 2021, the Puerto Rico Central Office of Recovery, Reconstruction, and Resiliency (Recipient) transmitted the first appeal, recommending its approval.  The Recipient added that if FEMA does not consider the Applicant’s property eligible as a HOW, then it should be considered a community center.

On November 18, 2021, FEMA issued a Request for Information (RFI), requesting documentation demonstrating that the Applicant’s first appeal was timely, that the property was used primarily as a HOW,[2] and how the property was used on a daily basis in the 12 months prior to the disaster.[3]  FEMA also requested the Applicant’s application and denial for a U.S. Small Business Administration (SBA) loan.

On December 16, 2021, the Applicant replied, stating, among other things, that it is non-denominational in nature and that reference to religion in its bylaws are implied, referring to spiritual aspects of personal growth.  The Applicant explained that it provides the use of its facilities to neighboring religious organizations to conduct a yearly religious event.  The Applicant did not apply for an SBA loan because it understood that it was not required at the time.  The Applicant provided several documents, including a business plan, list of yearly activities, pictures of these activities, and a lease agreement for use of its facilities.

On July 1, 2022, the FEMA Region II Regional Administrator denied the appeal, finding that the Applicant did not demonstrate that it owns or operates an eligible PNP facility that provides eligible services, so the Applicant was not eligible for PA.  FEMA explained that while some of the Applicant’s events and activities may be of a religious nature, it did not establish that a facility was primarily used for worship or religious services which would render any of the Applicant’s facilities a HOW.  Further, none of the Applicant’s incorporating documents establish that it owns or operates a HOW, instead speaking to its purposes as a charitable, scientific, and educational entity, focusing on individual personal development.  FEMA noted there is no reference to being organized for religious purposes or having a religious mission.

FEMA also found that the record lacked documentation to support the Recipient’s claim that the Applicant operated a community center, instead suggesting that the Applicant’s facilities are primarily used for ineligible services (i.e., recreation, conferences, and meetings and activities held at irregular intervals or for brief time periods), and the Applicant’s incorporating documents contain no reference to operating as a community center.  FEMA stated there was also limited support showing how frequently the Applicant’s property and/or facilities were used, and simply making facility space available to other organizations does not make a facility a community center.  Finally, with respect to the Applicant’s contention that it was previously deemed an eligible PNP applicant under Hurricane Maria, FEMA noted that that conclusion was not binding and that it may re-evaluate the Applicant’s eligibility under that disaster.

Second Appeal

On August 31, 2022, the Applicant submitted a second appeal, stating that it is an eligible PNP applicant, as FEMA had previously found under Hurricane Maria.[4]  Further, the Applicant stated that the definition of HOW is unclear, and FEMA’s first appeal determination emphasized the way in which a HOW is constructed rather than the actual services offered.  The Applicant states that it plans to construct several buildings in the future, and it currently operates with solid tents built to withstand inclement weather, with all necessary facilities and utilities such as water and electricity, as well as a two-level concrete building.  The Applicant considers its entire facilities, as a compound, a HOW.  The Recipient transmitted the appeal to FEMA, recommending its approval.

 

Discussion

FEMA may provide funding for the repair, restoration, reconstruction, or replacement of eligible PNP facilities damaged or destroyed by a disaster.[5]  To be eligible for PA funding, an eligible PNP applicant must own or operate an eligible PNP facility.[6]  An eligible PNP facility includes a facility that provides non-critical, but essential social-type services to the general public, such as houses of worship and certain community centers.[7]  In cases where the facility provides multiple services, FEMA reviews additional items to determine the primary service that facility provides, such as: pre-disaster charter, bylaws, and amendments; and evidence of longstanding, routine (day-to-day) use (e.g., a calendar of activities).[8]  Facilities established or primarily used for political, athletic, recreational, vocational, or academic training, conferences, or similar activities, or for meetings or activities for only a brief period or at irregular intervals, are not eligible.[9]  PNP facilities that provide both eligible and ineligible services are considered mixed-use facilities.[10]  Eligibility of mixed-use PNP facilities is dependent on the primary use of the facility, which is determined by the amount of physical space dedicated to eligible and ineligible services.[11]  “Primary use” is the use for which more than 50 percent of the physical space in the facility is dedicated.[12]

The Applicant asserts that it provides eligible essential social-type services typical of a HOW.  However, the documentation indicates that the services the Applicant provides are for spiritual purposes and personal growth, rather than demonstrating it provides religious activities or operates as a HOW.  For example: (1) the Applicant’s Certificate of Incorporation states that it is organized for “the advancement of education through the integral development of the individual, and for other charitable purposes;”[13] (2) its bylaws state that its purpose is charitable, scientific, and educational;[14] and (3) its brochure states that its purpose “is the edification of the self, to help improve our society by reconnecting with nature, with the sublime, and with beauty, through a process that will emphasize the development of human virtues.”[15]

The Applicant stated that it holds three retreats, monthly seminars and conferences, four camps, four seasonal activities, and theatrical portrayal of the life of Jesus during Lent and Holy Week (five weeks).[16]  Besides the five weeks of religious activities, the Applicant’s facilities are primarily used for ineligible services (e.g., conferences and similar activities, and activities for only a brief period).  Therefore, the Applicant has not demonstrated that it owns or operates an eligible PNP facility that provides an essential social service.[17]

 

Conclusion

FEMA finds the Applicant is not eligible for PA funding because it does not own or operate an eligible PNP facility.  Therefore, this appeal is denied.

 

[1] The President issued a major disaster declaration for Hurricane Maria, FEMA-4339-DR-PR, on September 20, 2017.

[2] Specifically, FEMA requested documentation describing: (1) the scope and nature of the Applicant’s activities, services, and mission, as its bylaws and certificate of incorporation do not reference religion; and (2) how camps, retreats, pilgrimages, spiritual and motivational exercises, and a “citizen training curriculum” relate to a house of worship and the practice of religion.

[3] FEMA also requested documentation of fees charged for all activities and services, documentation demonstrating that facility use was not limited to certain individuals, and that facility access was not restricted with gates or other security systems.

[4] Note, after its first appeal decision, FEMA subsequently deobligated all funding for the Applicant under FEMA-4339-DR-PR.  See Project Worksheet 5646, Ciudad Mistica, Inc., Version 1 (Nov. 7, 2022).

[5] Robert T. Stafford Disaster Relief and Emergency Assistance (Stafford) Act § 406(a)(1)(B), Title 42, United States Code (U.S.C.) § 5172(a)(1)(B) (2018).

[6] Title 44 Code of Federal Regulations (C.F.R.) §§ 206.221(e)-(f), 206.222(b), 206.223(b) (2019); Public Assistance Program and Policy Guide, FP 104-009-2, at 11 (Apr. 1, 2018) [hereinafter PAPPG].

[7] Stafford Act § 102(11)(B), 42 U.S.C. § 5122(11)(B); 44 C.F.R. § 206.221(e); PAPPG, at 11, 13, 15.

[8] PAPPG, at 11.

[9] Id. at 11, 14.

[10] Id. at 16.

[11] Id. (emphasis in original text).

[12] Id. (emphasis in original text).

[13] See First Amended and Restated Certificate of Incorporation of Ciudad Mistica, Inc., at 1 (June 1, 1998).

[14] See Amended and Restated By-Laws of Ciudad Mistica, Inc., at 1 (undated).

[15] See Ciudad Mistica, Inc. brochure (English version) (undated).

[16] See letter from Dir. of Operations, Ciudad Mistica, Inc. at 2 (Nov. 19, 2020).

[17] Note that for PNPs that provide non­-critical, essential social services, FEMA only provides Public Assistance funding for eligible permanent work costs that an SBA loan will not cover. Therefore, non-critical PNPs must also apply for a disaster loan from the U.S. Small Business Administration.  See Stafford Act § 406(a)(3)(A)(ii), 42 U.S.C. § 5172(a)(3)(A)(ii); PAPPG, at 16-17.  Here, the Applicant failed to meet this requirement; however, the issue is moot because the Applicant does not own or operate an eligible PNP facility.

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