Title
Dept./Agency: Economic and Housing Development
Action: ( X ) Ratifying ( X ) Authorizing ( X ) Amending
Type of Service: Grant Agreement
Purpose: To provide for a Grant and Grant Agreement with Rising Plains 474 LLC in the amount of $43,000.00
Entity Name: Rising Plains 474 LLC
Entity Address: P.O. Box 91, Hillside, New Jersey 07205
Additional Grant Amount: $43,000.00
Funding Source: Community and Economic Development Dedicated Trust Fund
Total Project Cost: $661,653.00
City Contribution: $43,000.00
Other Funding Source/Amount: Community Economic Development Trust Fund
Grant Period: Construction has commenced and is near substantial completion.
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)
474 South 15th Street/Block 329/Lot 30/West Ward
Additional Information:
body
WHEREAS, the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 et seq., as amended and supplemented (the “Act”), 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) adopted on June 15, 2005, the entire City was designated as an area in need of rehabilitation pursuant to the Act; and
WHEREAS, by Ordinance 6S+Fc(s), on August 17, 2005, the Municipal Council adopted a Second Amendment to the West Ward Redevelopment Plan (together with all amendments, the “Redevelopment Plan”), which provides for the redevelopment of certain City-owned parcels within the West Ward of the City; and
WHEREAS, the Redeveloper has developed and improved the real property located at 474 South 15th Street (West Ward) of the Tax Map of the City of Newark, County of Essex, State of New Jersey (Block 329, Lot 30) in the City of Newark, New Jersey (West Ward) (the “Property”), and constructed and substantially completed a new two-family house (the “Home”) for a total of two (2) three-bedroom residential housing units (each a “Housing Unit,” and collectively, the “Housing Units”) which Home is built as part of the Redevelopment Plan (the “Project”); and
WHEREAS, the Redeveloper intends to complete and sell the Home to a qualified low income eligible third-party purchaser as determined by the City (the “Purchaser”) after the Project is completed and a Certificate of Occupancy has been issued by the City and the Purchaser and the Purchaser and the Property shall be subject to affordability and other restrictions as provided herein; and
WHEREAS, the Redeveloper has agreed and shall promptly disclose to the prospective Purchaser of the Home that one (1) of the Housing Units constructed for the Project is required to be occupied by the Purchaser as his or her principal residence for a period of twenty (20) years (the “Restricted Housing Unit”) and such Purchaser is earning 80% or less of Area Median Income, as determined by the U.S. Department of Housing and Urban Development (“AMI”); and
WHEREAS, to ensure that the Restricted Housing Unit shall remain affordable and the principal residence of the low-income homebuyer for the required affordability period, the Purchaser shall be subject to continuing affordability and other restrictions running with the land for a twenty (20) year period pursuant to a Deed-Restrictive Homebuyer Beneficiary Agreement with the City in a form to be prepared and approved by the Department of Economic and Housing Development (the “Beneficiary Agreement”) to be recorded on the Property; and
WHEREAS, the Project currently has a $43,000.00 funding gap that must be bridged in order to make the Project financially feasible; and
WHEREAS, N.J.S.A. 40A:12A-8(f) of the LRHL authorizes municipalities to provide grants to redevelopers to provide financial assistance for the performance of redevelopment activities in order to implement redevelopment projects in accordance with redevelopment plans; and
WHEREAS, the Project qualifies for financial assistance since it is located within a redevelopment area and is being performed in order to implement the Redevelopment Plan; and
WHEREAS, the Municipal Council of the City of Newark recognizes the need to complete the above Project to and desires to finance the making of an additional capital grant in the amount of $43,000.00 to the Redeveloper to be used to implement the Project and sell the Home; and
WHEREAS, pursuant to Resolution 7RG 110685, adopted by the City Municipal Council on November 6, 1985 (the “Resolution”), the City authorized the establishment of a trust fund known as the “Community and Economic Development Dedicated Trust Fund” (the “Fund”) for the purpose of financing the development costs associated with redevelopment projects, urban revitalization projects, low-income housing projects, economic stabilization and stimulation projects and such other projects within the City which are consistent with the activities eligible for assistance under Title I of the Housing and Community Development Act of 1974, as amended (“Title I”); and
WHEREAS, the Project is consistent with the activities set forth in the Resolution and the activities eligible for assistance under Section 105(a) of Title I, which permits financial assistance to low-income home buyers of housing that facilitates home ownership among persons of low-income; and
WHEREAS, the City wishes to fund such a capital grant to the Redeveloper in an amount not to exceed $43,000.00 (the “Grant”) from the amounts deposited in the Fund in accordance with the Resolution, which shall be used by the Redeveloper and low-income home buyer as a direct financing subsidy of the purchase price for the acquisition of the Home within which he or she will reside; and
WHEREAS, the Department of Economic and Housing Development desires to enter into and execute a Grant Agreement, in the form attached hereto, with the Redeveloper, which shall, among other things, in the aggregate grant amount of $43,000.00 for purposes of bridging the gap in financing to complete the construction of the Project.
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 Forty-Three Thousand Dollars and Zero Cents ($43,000.00) of funds from the City’s Community and Economic Development Dedicated Trust Fund for the purpose of funding a grant to Rising Plains 474 LLC, P.O. Box 91, Hillside, New Jersey 07205, 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 Forty-Three Thousand Dollars and Zero Cents ($43,000.00) from the City of Newark’s Community and Economic Development Dedicated 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 Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to establish and record a declaration of covenants, conditions and restrictions on the Property to ensure that the City shall be repaid the full amount of the Grant Funds disbursed to the Redeveloper upon the occurrence of an event of default under the Grant Agreement by the Redeveloper by requiring the Redeveloper to execute a separate Mortgage and Security Agreement which shall be recorded and Mortgage Note for the full amount of financial assistance provided to the Redeveloper and assumed by the Purchaser in the Grant Agreement and the Beneficiary Agreement, substantially in the form attached hereto. Said covenants, conditions and restrictions shall run with the land and bind the Purchaser and any subsequent purchasers and 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 Beneficiary Agreement and the City shall discharge such Mortgage and lien in connection therewith at the end of the period of affordability upon the determination of the City that the Purchaser has complied with all terms and conditions of the Beneficiary Agreement.
4. The Mayor and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development, are each hereby authorized and directed to enter into and execute the Beneficiary Agreement with the Purchaser, which shall ensure that the Restricted Housing Unit remains the principal residence of the low income qualified Purchaser and affordable during the twenty (20) year period of affordability and otherwise in compliance with the terms of therein, which shall facilitate the City’s redevelopment efforts and expand home ownership among low-income persons and families.
5. The Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to establish and record the Beneficiary Agreement, which is a declaration of covenants, conditions and restrictions to ensure that the City can recapture the full amount of the Grant Funds provided to the Purchaser as a direct subsidy to increase the affordability of the Home upon the occurrence of an event of default under the Beneficiary Agreement by the Purchaser by requiring the Purchaser to execute a separate Mortgage and Security Agreement which shall be recorded and Mortgage Note for the full amount of financial assistance provided to the Purchaser in the Beneficiary Agreement. Said covenants, conditions and restrictions shall run with the land and bind the Purchaser and any subsequent purchasers and 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 Beneficiary Agreement and the City shall discharge such Mortgage and lien in connection therewith at the end of the period of affordability upon the determination of the City that the Purchaser has complied with all terms and conditions of the Beneficiary Agreement.
6. The term of the Grant Agreement shall commence on the date of execution and delivery of the Grant Agreement by the Entity and the City and expire upon issuance of a Certificate of Occupancy for the Home and the sale and transfer of the Property and Home to the Purchaser and the funding of the Grant Funds as provided herein.
7. The term of the Beneficiary Agreement shall commence on the date of execution and delivery of the Beneficiary Agreement by the Purchaser and the City and shall expire at the end of the twenty (20) year period of affordability upon the determination of the City that the Purchaser has complied with all terms and conditions of the Beneficiary Agreement.
8. The City shall be responsible for the recordation of the final fully executed Beneficiary Agreement and the related Mortgage and any amendments thereto in the Office of the Essex County Register of Deeds and Mortgages.
9. 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 and Beneficiary 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 or Beneficiary 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.
10. The Redeveloper 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 Redeveloper to repay all funding authorized in the Grant Agreement.
11. 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 (7RbpMarch 1, 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.
12. 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 Forty-Three Thousand Dollars ($43,000.00) and (2) that the line appropriation of official budgets which shall be charged is as follows:
|
Department |
Division/Proj. |
Activity |
Account |
Budget Ref. |
Amount |
|
026 |
|
|
32100 |
B2025 |
$43,000 |
13. A copy of the fully executed Grant Agreement, Beneficiary 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 Rising Plains 474 LLC, in the aggregate grant amount of $43,000.00 to bridge the gap in financing required to complete construction of the Project and to facilitate and expand home ownership by and among persons and families of low income in the City.