Title
Dept./ Agency: Economic and Housing Development
Action: ( ) Ratifying (X) Authorizing (X) Amending
Type of Service: Private Sale/Redevelopment
Purpose: An Agreement to Subordinate the City of Newark’s Reverter Rights by entering into a First Amendment to the Agreement for the Sale and Redevelopment of Land and a Subordination Agreement in order to permit Redeveloper to obtain financing necessary for the redevelopment of the property as a three family home and a two family home.
Entity Name: Fresh Tone Homes, LLC
Entity Address: 200 Main Street, Suite 101, Orange, New Jersey 07050
Sale Amount: $58,254.00
Cost Basis: ( ) $ PSF ( ) Negotiated (X) N/A ( ) Other:
Assessed Amount: N/A
Appraised Amount: N/A
Contract Period: Not Applicable
Contract Basis: ( ) Bid ( ) State Vendor ( ) Prof. Ser. ( ) EUS
( ) Fair & Open ( ) No Reportable Contributions ( ) RFP ( ) RFQ
( ) Private Sale ( ) Grant ( ) Sub-recipient (X) n/a
List of Property:
(Address/Block/Lot/Ward)
106 4th Street/Block 1886/Lot 28/West Ward
102-104 4th Street/Block 1886/Lot 29/West Ward
Additional Information:
Resolution 7R2-c (s) adopted on July 2, 2019, designating Fresh Tone Homes, LLC as the Redeveloper and authorized the Agreement for the Sale and Redevelopment of Land.
body
WHEREAS, pursuant to Resolution 7R2-c (s) adopted on July 2, 2019, the Newark Municipal Council (the "Municipal Council") authorized the Mayor and the Deputy Mayor/Director of Department of Economic and Housing Development to enter into and execute an Agreement for the Sale and Redevelopment of Land (“Agreement”) with Fresh Tone Homes, LLC, 200 Main Street, Suite 101, Orange, New Jersey 07050 (the “Redeveloper”) for the sale of City-owned real property located at 106 4th Street and 102-104 4th Street, Newark, New Jersey, within the West Ward of the City and identified on the tax map of the City of Newark as Block 1886, Lots 28 and 29 (the "Properties"), for a purchase price of Fifty Eight Thousand Two Hundred Fifty Four and Zero Cents ($58,254.00), to construct a three-family home and a two (2) two-family home (“Project”); and
WHEREAS, the sale and Agreement were authorized pursuant to N.J.S.A. 40A: 12A-8(g) and the West Ward Redevelopment Plan; and
WHEREAS, such sale was authorized pursuant to N.J.S.A.40A:12-13, which requires that such conveyance be subject to the condition that title to the Property revert back to the City in the event of a Default under Section VI., Event of Default, Termination of the Agreement and Right of Reverter (mislabeled Section V.) of the Agreement and Section d. of the Deed (the “Reverter Right”); and
WHEREAS, the Redeveloper has represented that it has secured financing from Norstar Capital, LLC, (“Lender”) in the approximate principal amount of $1,400,000.00 (“Loan”), to develop and complete the Project, which loan will be evidenced by a Promissory note and will be secured by a Mortgage on the Properties (“Mortgage”); and
WHEREAS, as a condition of the above Loan, the Lender has requested that the City subordinate the Reverter Right to the Lender with respect to the Mortgage and Loan; and
WHEREAS, the Agreement states that the Reverter Right may be subordinated by the City subject to formal approval by the Municipal Council and pursuant to N.J.S.A. 40:60-51.2, which authorizes a municipality to waive, release, modify or subordinate any terms, covenants, conditions, limitations or reverters imposed in sales and conveyances of lands as to the erection, alteration or demolition of buildings or any other use to be made of land heretofore imposed by said municipality to accomplish the purposes for which such lands were sold and conveyed either at public or private sale including those set forth pursuant to Section 21 of P.L.1971, c. 199 (C.40A:12-21), but only after public hearing held before such Governing Body, of the holding of which notice describing the lands in question, and the terms, covenants, conditions, limitations or reverters to be waived, released, modified or subordinated, and, if to be modified or subordinated, describing the manner in which the same shall be modified or subordinated, shall first have been given by advertisement published once each week for two weeks in a newspaper published in said municipality or, if no newspaper be published therein, then in a newspaper circulating in such municipality, provided, however, that the power herein granted shall not be exercised to impair any vested or contractual rights of third parties; and
WHEREAS, the Department of Economic and Housing Development caused a notice to be advertised including the requirements established in N.J.S.A. 40:60-51.2, in the Star Ledger on November 10, 2025 and November 17, 2025, which complies with the notice requirement of once each week for two weeks; and
WHEREAS, the Municipal Council desires to subordinate the City’s Reverter Right contained in the Agreement and the Deed by entering into a First Amendment to Agreement for the Sale and Redevelopment of Land and Subordination Agreement so as to accomplish the Project.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Mayor and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development are hereby authorized to enter into and execute a Subordination Agreement with and in favor of Norstar Capital, LLC, 325 East Westfield Avenue, Roselle Park, New Jersey 07204 (the "Lender") and Fresh Tone Homes, LLC, 200 Main Street, Suite 101, Orange, New Jersey 07050 (“Redeveloper”), in the form attached hereto as it pertains to the properties located at 106 4th Street and 102-104 4th Street, Newark, New Jersey, and identified on the official tax map of the City of Newark (“City”) as Block 1886, Lots 28 and 29 (“Property”), which were sold to Redeveloper pursuant to Resolution 7R2-c(s) adopted by the Newark Municipal Council on July 2, 2019, for the rehabilitation of the Property as athree family home and two family home (“Project”).
2. The Mayor and/or his designee the Deputy Mayor/Director of the Department of Economic and Housing Development are hereby authorized to enter into a First Amendment to Agreement for the Sale and Redevelopment of Land with the Redeveloper, in the form attached hereto, related to the Property for the Project.
3. All other terms and conditions of the Agreement for the Sale and Redevelopment of Land, authorized by and entered into pursuant to Resolution 7R2-c(s) adopted on July 2, 2019, shall remain in full force and effect.
4. The Deputy Mayor/Director of the Department of Economic and Housing Development shall place a filed copy of this Resolution, the fully executed Subordination Agreement, and First Amendment to Agreement for the Sale and Redevelopment of Land with the Office of City Clerk.
STATEMENT
This Resolution authorizes the Mayor of the City of Newark and/or designee, and the Deputy Mayor/Director of the Department of Economic and Housing Development to enter into and execute a Subordination Agreement with Fresh Tone Homes, LLC, 200 Main Street, Suite 101, Orange, New Jersey 07050 (“Redeveloper”) and Norstar Capital, LLC (“Lender”) and a First Amendment to Agreement for Sale and Redevelopment of Land, to enable the Redeveloper to obtain financing necessary for the development of a three family home and a two family home (“Project”) on the property located at 106 4th Street and 102-104 4th Street, Newark, New Jersey, and identified on the official tax map of the City as Block 1886, Lots 28 and 29, which were sold to Redeveloper pursuant to Resolution 7R2-c(s) adopted on July 2, 2019.