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AN ORDINANCE AUTHORIZING THE ASSIGNMENT AND ASSUMPTION OF THE FINANCIAL AGREEMENT FROM SOMERSET HOMES URBAN RENEWAL LLC (“ASSIGNOR”) TO TETHYS SOMERSET URBAN RENEWAL LLC (“ASSIGNEE”) FOR AN AFFORDABLE HOUSING PROJECT CONSISTING OF THIRTY-EIGHT (38) AFFORDABLE RESIDENTIAL RENTAL UNITS LOCATED ON LAND WHICH IS IDENTIFIED ON THE OFFICIAL TAX MAP OF THE CITY OF NEWARK AS BLOCK 2589, LOT 1, MORE COMMONLY KNOWN AS 219-239 CLINTON AVENUE.
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WHEREAS, on June 6, 1979, the Municipal Council of the City adopted Resolution 7RD granting a tax exemption to Somerset Homes Associates, LLP (the “Previous Owner”) for the construction of thirty eight (38) affordable rental housing units (the “Project”) on land currently located at 219-239 Clinton Avenue, Newark, New Jersey, and designated as Block 2589, Lot 1 on the Official Tax Map of the City (the “Property”), pursuant to the Limited Dividend Nonprofit Housing Association Law, N.J.S.A. 55:16 1 et seq., and authorizing the execution and delivery of a financial agreement in connection therewith; and
WHEREAS, Somerset Homes Urban Renewal LLC (“Assignor”) thereafter acquired the Property and the Project from the Previous Owner and filed an application with the Mayor of the City seeking a long term tax exemption pursuant to the Long Term Tax Exemption Law, as amended and supplemented, N.J.S.A. 40A:20 1 et seq., (the “Long Term Tax Exemption Law”), for a fifteen (15) year term for the continued ownership and operation of the Project; and
WHEREAS, on December 27, 2017, the Municipal Council adopted Ordinance 6PSF-b(s) granting a fifteen (15) year tax exemption for the Project pursuant to the Long Term Tax Exemption Law and authorizing the execution of an Amended and Restated Financial Agreement; and
WHEREAS, on November 15, 2021, the Municipal Council adopted Ordinance 6PSFb authorizing the execution and delivery of an Updated Amended and Restated Financial Agreement reflecting the correct name of the project owner as “Somerset Homes Urban Renewal, LLC”, also referred to in this agreement as the Assignor (the “Updated Financial Agreement”); and
WHEREAS, Assignor is the current owner of the Project and the Property, and is a party to the Updated Financial Agreement; and
WHEREAS, Assignor has entered into a contract with Tangram Group LLC, an affiliate of Assignee, Tethys Somerset Urban Renewal LLC, with a business address of 1083 Vine Street, #828, Healdsburg, California 95448, to sell or other transfer of the Property and Project, which contract requires, among other things, the consent of the City to the assignment of the Updated Financial Agreement to Assignee; and
WHEREAS, Assignee has represented to the City that, upon receipt of all approvals required to consummate the transaction, including approval by the City, Assignee shall acquire the Property and Project from Assignor and shall assume the Updated Financial Agreement and all other documents relevant to the ownership, operation, and financing of the Property and Project, including the following, (i) the Use Agreement for Multifamily Projects Participating in the Mark-to-Market Program Under the Multifamily Assisted Housing Reform and Affordability Act of 1997, (the “Use Agreement”); (ii) the Assignment and Assumption of Use Agreement, (the “Use Agreement Assignment”); (iii) the Project-based Section 8 Housing Assistance Payments Basic Renewal Contract Multi-Year Term, (the “HAP Contract”); and (iv) the Assignment, Assumption and Amendment Agreement - Section 8 Housing Assistance Payments (Uninsured Project), (the “HAP Contract Assignment”, and together with the Use Agreement, the Use Agreement Assignment, and the HAP Contract, the “Project Documents”); and
WHEREAS, on December 3, 2025, Assignee held a community meeting for the Project to hear and address tenant concerns; and
WHEREAS, on January 12, 2026, Assignee met with staff-members of Council Member Amina Bey to better understand the Council Member’s concerns about the Project; and
WHEREAS, Assignee submitted applications and supporting documentation to the City (collectively, the “Application”) requesting the City’s consent to (i) the sale and transfer of the Property and Project, and (ii) the assignment and transfer of the Updated Financial Agreement from Assignor to Assignee; and
WHEREAS, the City has reviewed the Application and related materials and has determined that Assignee possesses the capacity, experience, and financial ability to own and operate the Property and Project and to assume and perform all of Assignor’s rights, duties, and obligations under the Updated Financial Agreement; and
WHEREAS, the City is desirous of approving the transfer of all of the rights, title and interest of the Assignor in and to the Updated Financial Agreement to the Assignee in connection with the Assignor’s sale of the Property and Project to the Assignee.
NOW, THEREFORE BE IT ORDAINED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The above-stated recitals are hereby found to be true and correct and are incorporated into this Resolution as though fully set forth herein.
2. The Municipal Council hereby consents to (i) the conveyance of the Property and Project by Assignor to Assignee and (ii) the assignment of the Updated Financial Agreement governing the Project from the Assignor to the Assignee.
3. The City’s consent to the sale of the Project and of the transfer of the Updated Financial Agreement to the Assignee is based upon the Assignee’s representation that the Assignee has agreed to assume all of the Assignor’s relevant documents and the Project will continue to be managed and operated as set forth in the Updated Financial Agreement and Assignor’s relevant documents.
4. The Municipal Council hereby authorizes the Mayor and/or his designee, the Deputy Mayor/Director of Department of Economic and Housing Development to execute, on behalf of the City, the Assignment and Assumption Agreement of the Updated Financial Agreement amongst the City, the Assignor and the Assignee (the “Assignment Agreement”) in substantially the form attached hereto as Exhibit A.
5. The long term tax abatement for the Amended Project will expire on January 11, 2037 and will remain in effect until such time provided that the Assignee complies with all applicable Federal and State laws and regulations, City ordinances and resolutions and terms of the Assignment Agreement and Financial Agreement. This Resolution will not extend the period of the tax abatement beyond January 11, 2037.
6. The Assignee shall in the operation of the Project comply with all laws so that no person shall be subject to any discrimination because of race, religious principles, color, national origin, or ancestry.
7. The adoption of this ordinance is expressly conditioned upon the requirement that Assignee pay the City all outstanding taxes and/service charges, water/sewer charges, and other charges due under the Updated Financial Agreement, as Amended within thirty (30) days of the date of the adoption of this ordinance. If Assignee fails to timely satisfy these requirements, this ordinance and the approval granted herein shall be null and void.
8. The Assignment Agreement is conditionally approved upon (i) the consummation of the sale, transfer, and conveyance of the property from Assignor to Assignee.
9. The Assignment Agreement, once fully executed, shall be filed by the Deputy Mayor/Director of the Department of Economic and Housing Development with the Office of the City Clerk.
10. If the sale, transfer and conveyance of the Property does not occur for any reason, this Ordinance is null and void and of no further force or effect.
STATEMENT
Ordinance authorizing the City’s consent to (i) the conveyance of the affordable housing project consisting of thirty-eight (38) affordable residential rental units located on land which is identified on the Official Tax Map of the City of Newark as Block 2589, Lot 1, more commonly known as 219-239 Clinton Avenue, 24-26 17th Avenue, from Somerset Homes Urban Renewal LLC (“Assignor”) to Tethys Somerset Urban Renewal LLC (“Assignee”) and to (ii) the assignment of the Updated Financial Agreement governing the Project from the Assignor to the Assignee.