Title
Dept/ Agency: Economic and Housing Development Department
Action: ( ) Ratifying (X) Authorizing (X) Amending
Type of Service: Redevelopment Agreement
Purpose: Authorize Execution of an Agreement for the Sale and Redevelopment of Land Between the City of Newark and Essex Reservoir Urban Renewal LLC
Entity Name: Essex Reservoir Urban Renewal LLC
Entity Address: c/o Urban League of Essex County, 508 Central Avenue, Newark, New Jersey 07107
Contract Amount: $1.00
Funding Source:
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)
324-346 South Orange Avenue/Block 268, Lot 1 and 1 BLDG and Block 269, Lot 4/West Ward
body
WHEREAS, the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1, et seq., as amended and supplemented (the “Redevelopment Law”), authorizes municipalities to participate in the redevelopment and improvement of areas that are in need of redevelopment or rehabilitation; and
WHEREAS, in order to stimulate the reinvigoration of the City, by Resolution 7Rdo(AS) 061505 adopted on June 15, 2005, the entire City was designated as an area in need of rehabilitation pursuant to the Redevelopment Law; and
WHEREAS, the City is the owner of the property located at 324-346 South Orange Avenue and designated as Block 268 Lot 1 and 1 BLDG and Block 269, Lot 4 on the official tax map of the City of Newark (together with all structures, property rights and related claims and interests, (the “Property”); and
WHEREAS, on July 14, 1975, the City entered into a fifty (50) year Lease Agreement with Reservoir Associates, Ltd. (“Reservoir”) for Reservoir to construct and operate a multifamily residential building on the Property containing eighty (80) affordable residential dwelling units with rents restricted for low- and moderate-income families; and
WHEREAS, Reservoir constructed a 100% affordable multifamily residential building containing eighty (80) affordable residential dwelling units on the Property; however, after construction, Reservoir neglected the Property causing the eighty (80) residential dwelling units to deteriorate; and
WHEREAS, on or about January 13, 2023, the City filed a Verified Complaint under docket number ESX-L-340-23 (the “Complaint”) (the “Law Division Case”) seeking temporary restraints and injunctive relief by way of an Order to Show Cause against Reservoir for certain violations of the Housing Code of the City of Newark 18:7-1.31 et. seq. and left unabated at the housing facility on the Property; and
WHEREAS, the Complaint further requested the appointment of a receiver in connection with the Property as a result of the deplorable and detrimental conditions of the Property and the repeated and continued failure of Reservoir to abide by the housing codes and regulations of the City to remedy the violations; and
WHEREAS, subsequent to the commencement of the Law Division Case, on or about September 15, 2023, a Chapter 7 Bankruptcy Petition was voluntarily initiated in the United States Bankruptcy Court for the District of New Jersey by Reservoir, bearing Case No. 23-18073 (RG) (the “Bankruptcy Case”); and
WHEREAS, on October 4, 2023, an Order was entered by the Honorable Rosemary Gambardella, United States Bankruptcy Judge, dismissing the Bankruptcy Case pursuant to 11 U.S.C. § 305(a) and granting relief from the automatic stay pursuant to 11 U.S.C. § 362(d) permitting the continuance of the Law Division Case action for the appointment of a receiver; and
WHEREAS, the Urban League of Essex County, an entity that wholly owns the Redeveloper and a New Jersey nonprofit entity, was approached by the City to serve as an immediate overseer and potential long-term stakeholder of the Property and the housing facilities situated thereon; and
WHEREAS, on October 12, 2023, an Order was entered by the Honorable Bridget Stecher, New Jersey Superior Court Judge in the Law Division Case, appointing the Redeveloper as the receiver for the Property to provide immediate intervention to protect the health and safety of the Property residents and oversee the management of the Property; and
WHEREAS, the October 12, 2023, Order expressly noted that it was known and understood by the Parties that the Urban League of Essex County or its nominee may be designated as the redeveloper and/or transferee of certain rights or interests in connection with the Property, including the housing facilities situated thereon; and
WHEREAS, on July 2, 2025, the Law Division Case and Bankruptcy Case were closed by way of an Order Terminating the Receivership for the Property; and
WHEREAS, the Redeveloper is now proposing to purchase the Property from the City and rehabilitate the existing eighty (80) affordable residential dwelling units (the “Project”); and
WHEREAS, the Redeveloper will implement the development, design, financing and construction of the Project in conformity with the Redevelopment Law; and
WHEREAS, N.J.S.A. 40A:12A-8(e) and (f) of the Redevelopment Law authorize the City to enter into contracts or agreements for the planning, construction or undertaking of any development project or redevelopment work in an area designated as an area in need of rehabilitation; and
WHEREAS, the City and the Redeveloper have engaged in negotiations relative to the Project and the City has determined that in furtherance of goals and objectives of the Redevelopment Plan, it is in the City’s best interest to enter into a Redevelopment Agreement with the Redeveloper for the purpose of setting forth in detail each Parties’ respective undertakings, rights and obligations in connection with the development and construction of the Project; and
WHEREAS, the Redeveloper acknowledges that all uses to which the Project may be devoted are guided and controlled by the applicable Redevelopment Plan and the Redevelopment Agreement, and that under no circumstances shall the Redeveloper, or any assignee or Affiliate (as defined herein) undertake any development of the Project unless it is in strict accordance with the Redevelopment Law, Applicable Law (as defined herein) and the Redevelopment Agreement.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Mayor and/or the Deputy Mayor/Director of the Department of Economic and Housing Development of the City, or either of them, are hereby authorized to enter into the Agreement for the Sale and Redevelopment of Land by and Between the City of Newark and Essex Reservoir Urban Renewal LLC (the “Redevelopment Agreement), in substantially the form attached hereto as Exhibit A.
2. The Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to effectuate certain business terms and conditions related to the Redevelopment Agreement and may enter into any related documents, which may be necessary in order to effectuate the Redevelopment Agreement.
3. The executed Redevelopment Agreement shall be placed on file in the Office of the City Clerk by the Deputy Mayor/Director of Department of Economic and Housing Development.
4. The Deputy Mayor/Director of Department of Economic and Housing Development is authorized to enter into a maximum of two (2) six (6) month extensions of any timeframe set forth in the Agreement, subject to full written disclosure of such extension(s) (in the form of a signed Memorandum to be submitted to the Office of the City Clerk prior to adoption) to the Municipal Council of the City of Newark by the Deputy Mayor/Director of the Department of Economic and Housing Development and the approval of the City of Newark’s Corporation Counsel.
5. The Redeveloper shall have thirty (30) days from the date this resolution is certified by the Office of the City Clerk to execute the attached Redevelopment Agreement for the Redevelopment of Land and return same to the Department of Economic Housing Development. Should the Redeveloper fail to execute and return the attached Redevelopment Agreement within this thirty (30) day time period, the authorization provided by this resolution shall be null and void, unless the Acting Deputy Mayor/Director of Department of Economic and Housing Development agrees in writing to extend this thirty (30) day period.
STATEMENT
This resolution authorizes the Mayor and/or his designee, the Director of the Department of Economic and Housing Development, on behalf of the City of Newark, to enter into an Agreement for the Sale and Redevelopment of Land with Essex Reservoir Urban Renewal LLC with an address of c/o Urban League of Essex County, 508 Central Avenue, Newark, New Jersey 07107 for the redevelopment of the property identified on the City of Newark Tax Map Block 268, Lot 1 and 1 BLDG and Block 269, Lot 4.
EXHIBIT A
REDEVELOPMENT AGREEMENT