Title
Dept./Agency: Economic and Housing Development
Action: ( ) Ratifying ( X) Authorizing ( ) Amending
Type of Service: Grant Agreement
Purpose: To provide gap financing for the construction of a twenty-four (24) residential dwellings consisting of three (3) deed-restricted affordable housing restrictions for occupancy by qualified low-income tenants pursuant to the City of Newark Affordable Housing Trust Fund.
Entity Name: Acension Capital Partners, LLC
Entity Address: 59 Lincoln Park, Suite 375, Newark, New Jersey 07107
Grant Amount: $1,070,182.00
Funding Source: City of Newark Affordable Housing Trust Fund
Total Project Cost: $18,460,639.00
City Contribution: $1,070,182.00
Other Funding Source/Amount: 4% Low-Income Housing Tax Credits and Conventional Lender
Grant Period: Commencing upon the Effective Date, as defined in the Grant Agreement, and continuing through the expiration of the Affordability Period as defined in the Grant Agreement, which period shall be twenty (20) years following the issuance of a Certificate of Occupancy and the initial occupations of the Affordable Units by eligible households.
Contract Basis: ( ) Bid ( ) State Vendor ( ) Prof. Ser. ( ) EUS
( ) Fair & Open ( ) No Reportable Contributions ( ) RFP ( ) RFQ
( ) Private Sale ( X) Grant ( ) Sub-recipient ( ) n/a
List of Property:
(Address/Block/Lot/Ward)
538-540 South 16th Street, Block 333, Lot 69 (formerly Lots 19, 20 and 69 (West Ward)
518-530 South 16th Street, Block 333, Lot 58.01 (formerly Lots 58, 59, and 64) (West Ward)
Additional Information:
body
WHEREAS, pursuant to Resolution 7RM adopted June 15, 2005, the Municipal Council designated the entire City of Newark as an “Area in Need of Rehabilitation” under the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 et seq.; and
WHEREAS, the Property is located in the West Ward Redevelopment Plan area; and
WHEREAS, Ascension Capital Partners, Inc. (the “Redeveloper”) proposes to develop and improve certain real property located at 538-540 South 16th Street (Block 333, Lot 69 (formerly Lots 19, 20 and 69) by constructing four (4) new low-rise multi-family buildings, each containing four (4) residential units; and
WHEREAS, the Redeveloper further proposes to develop and improve certain real property located at 518-530 South 16th Street (Block 333, Lot 58.01 (formerly Lots 58. 59 and 62) by constructing a new low-rise multi-family building consisting of twenty (20) residential dwellings; and
WHEREAS, four (4) residential units within the Project to be assisted with Grant funds shall be deed-restricted for occupancy by qualified low-income households earning no more than thirty percent (30%) of the Area Median Income, as determined by the United States Department of Housing and Urban Development and subject to affordability and occupancy restrictions for a period of twenty (20) years in accordance with Affordable Housing Trust Fund Project requirements; and
WHEREAS, the Project has a documented financing gap necessary to complete construction and ensure long-term affordability; and
WHEREAS, the Affordable Housing Trust Fund was established pursuant to municipal ordinance for the purpose of financing the construction and preservation of low- and moderate-income housing consistent with the Fair Housing Act, N.J.S.A. 52:27D-301 et seq.; and
WHEREAS, the Department of Economic and Housing Development has determined that a capital grant in an amount not to exceed One Million Seventy Thousand One Hundred and Eight Two Dollars and Zero Cents ($1,070,182.00) from the Affordable Housing Trust Fund is necessary and appropriate to bridge the Project financing gap and ensure compliance with affordability requirements; and
WHEREAS, the City desires to enter into a Grant Agreement with the Redeveloper to provide such funds, secured by a Promissory Note and Mortgage and Security Agreement encumbering the Property and related affordability documents.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Municipal Council hereby authorizes the use of up to One Million Seventy Thousand One Hundred and Eight Two Dollars and Zero Cents ($1,070,182.00) of funds from the City’s Affordable Housing Trust Fund for the purpose of funding a grant to ASCENSION CAPITAL PARTNERS, 59 Lincoln Park, Suite 375, Newark, New Jersey 07107, to be used as financing assistance to develop and subsidize the costs of the Project which shall facilitate redevelopment of the City and implementing related activities and bridge the financial gap in construction costs related to the Project.
2. The Mayor and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development, are each hereby authorized to enter into and execute a Grant Agreement with the Entity, in the form attached hereto, in the amount not to exceed One Million Seventy Thousand One Hundred and Eight Two Dollars and Zero Cents ($1,070,182.00) from the City of Newark’s Affordable Housing Trust Fund, to be used as financing assistance to develop and subsidize the costs of the Project which shall facilitate redevelopment of the City and implementing related activities and bridge the financial gap in construction costs related to the Project.
3. The Entity has agreed that four (4) residential units constructed as part of the Project and designated by the City for subsidy with Grant funds under this Agreement shall be deed-restricted for occupancy by low-income tenants earning no more than thirty percent (30%) of the Area Median; and
4. The Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to establish a declaration of covenants, conditions, and restrictions to ensure that the Project remains affordable for a period of twenty (20) years. Said covenants, conditions, and restrictions shall run with the land and bind the Entity and any subsequent purchasers or owners, their heirs, executors, administrators and assigns, and all persons claiming by, through, or under their heirs, executors, administrators and assigns during the term of the Grant Agreement.
5. The Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to establish and records a declaration of covenants, conditions, and restrictions to ensure that the City shall be repaid the full amount of the Grant Funds disbursed to the Entity upon the occurrence of an event default under the Grant Agreement by requiring the Entity to execute a separate Mortgage and Security Agreement (the “Mortgage”) and Note (the “Note”) for the full amount of funding provided to the Entity under the Grant Agreement for a term of twenty (20) years commencing after date on which construction of the Project is complete pursuant to the Grant Agreement. Said covenants, conditions, and restrictions shall run with the land and bind the Entity and any subsequent purchasers or owners, their heirs, executors, administrators and assigns, and all persons claiming by, through, or under their heirs, executors, administrators and assigns during the term of the Grant Agreement. The Mortgage shall secure repayment of the Note.
6. 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 Grant Agreement as permitted by New Jersey Law and may enter into subordination agreements, access and right of entry agreements and other relevant documents related to these fund allocations in forms subject to the approval of the Corporation Counsel. In addition, the Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to enter into a maximum of two six month extensions of the term set forth in the Grant Agreement and any contract timelines and milestones contained therein, provided that any contract timelines and milestones are not extended beyond the two permitted six month extensions, subject to full written disclosure (in the form of a signed memorandum to be submitted prior to adoption) to the Newark Municipal Council by the Deputy Mayor/Director of the Department of Economic and Housing Development and the approval of the Corporation Counsel.
7. The Entity must adhere to all milestones and timelines in the Project Schedule as further set forth in the Grant Agreement. The Project must conform to the City of Newark Design and Construction Standards Guidelines for New Home Construction, including standards for environmental sustainability and energy efficiency, as established by the Department of Economic and Housing Development. Should the Entity fail to complete the Project within the specified time frame set forth in the Grant Agreement, then the City, in its sole discretion, in addition to any other remedy available by the Grant Agreement or as allowed by law, may direct the Entity to repay all funding authorized in the Grant Agreement.
8. The Entity must remain in compliance with all municipal, State and Federal laws including, but not limited to the City of Newark’s Minority Set-Aside Ordinance (6S&Fd April 5, 1995) and its Affirmative Action Plan (7Rbp March 30, 1995) and Federal Executive Order 11246 (as amended by Executive Orders 1137 and 12086) with respect to the award of goods and services, as may be amended from time to time. The Entity has agreed to ensure that a minimum of 40% of the workers employed during the construction of the project shall be Newark residents and that 30% of all contractors, subcontractors and suppliers shall be Newark companies.
9. Units assisted with Grant Funds must be designated upon execution of the Grant Agreement and must remain fixed units for the duration of the affordability period.
10. Attached hereto is a certification from the Municipal Comptroller of the City of Newark which states that (1) there are sufficient funds in the amount of One Million Seventy Thousand One Hundred and Eight Two Dollars ($1,070,182.00) and (2) that the line appropriation of official budgets which shall be charged is as follows:
|
Department |
Division/Proj. |
Activity |
Account |
Budget Ref. |
Amount |
|
NW026 |
|
|
30350 |
B2026 |
$1,070,182.00 |
11. A copy of the fully executed Grant Agreement, the Mortgage Note and the recorded Mortgage must be placed on file in the Office of the City Clerk by the Deputy Mayor/Director of the Department of Economic and Housing Development.
STATEMENT
Resolution authorizing and directing the Mayor and/or his designee, and the Deputy Mayor/Director of the Department of Economic and Housing Development to enter into and execute and deliver a Grant Agreement with Ascension Capital Partners, LLC, in the aggregate grant amount of One Million Seventy Thousand One Hundred and Eight Two Dollars and Zero Cents ($1,070,182.00) to bridge the gap in financing required to complete construction of the Project.