Title
Dept/ Agency: Economic and Housing Development
Action: ( ) Ratifying ( ) Authorizing (X) Amending
Purpose: First Amendment to Purchase, Escrow and Delivery Agreement
Entity Name: Newark Makerhoods Urban Renewal, LLC
Entity Address: New York, New York 10019
Project Information: Resolution of the Municipal Council of the City of Newark authorizing an amendment to the purchase, escrow and delivery agreement, dated June 23, 2020 by and among the City, Newark Makerhoods Urban Renewal, LLC, The Prudential Insurance Company of America and Decotiis, FitzPatrick, Cole & Giblin, LLP
Additional Information:
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WHEREAS, on August 2, 2017, the Newark Municipal Council (“Municipal Council”) adopted Resolution 7R2-d(AS) authorizing the execution of the Agreement for the Sale and Redevelopment of Land (“Redevelopment Agreement”) with Newark Makerhoods, LLC, 200 Central Park South, Apt. 9R, New York, New York 10019 (“Redeveloper”) for the private sale and rehabilitation of various properties in the Central Ward of the City of Newark, pursuant to N.J.S.A. 40A:12A-8(g), for the construction of a mixed use complex consisting of approximately 66 units of housing, of which approximately 16 units will be for affordable housing, approximately 16 affordable workshops where tenants will operate small businesses, and the rehabilitation of the Krueger Scott Mansion into a business incubation space with approximately 20,000 square feet of office space for local commercial entities (“Project”); and
WHEREAS, pursuant to Resolution 7R2-d(AS), on or about December 7, 2017, the City of Newark (“City”) and Redeveloper entered into that certain Redevelopment Agreement; and
WHEREAS, on September 24, 2019, the Municipal Council adopted Ordinance 6PSF-a(S) granting a tax exemption to Newark Makerhoods Urban Renewal, LLC, formerly known as Newark Makerhoods, LLC - Redeveloper, for the Project, authorizing the execution and delivery of the Financial Agreement related to the issuance of Redevelopment Area Bonds, and authorizing the issuance of the Redevelopment Area Bonds in a principal amount not to exceed $2,500,000.00; and
WHEREAS, on December 18, 2019, the Municipal Council adopted Resolution 7R2-e(AS), authorizing the execution of the First Amendment to the Agreement for the Sale of Land and Redevelopment (“First Amendment”), to make various changes to the Redevelopment Agreement including but not limited to the Project Description, Project Schedule, Subordination of the City’s Right of Reverter to enable Redeveloper to obtain financing for the Project, changing the name of the Redeveloper as a result of an amendment to its Certificate of Formation and adding a co-Redeveloper, Newark Makerhoods Master Lease, LLC (“Co-Redeveloper”); and
WHEREAS, on February 7, 2020, the City and Redeveloper entered into the Financial Agreement, pursuant to Ordinance 6PSF-a(S) adopted on September 24, 2019, whereby, inter alia, the City agreed to issue Redevelopment Area Bonds (the “Bonds”), to fund a portion of the cost of the Project, which Bonds are secured by the Pledged Annual Service Charge (as such term is defined in the Financial Agreement); and
WHEREAS, pursuant to Resolution 7R2-e(AS) adopted on December 18, 2019, the City, Redeveloper and Co-Redeveloper entered into the First Amendment on February 25, 2020; and
WHEREAS, on June 23, 2020, the City, the Redeveloper, The Prudential Insurance Company of America, as the purchaser of the Bonds (the “Purchaser”) and DeCotiis, FitzPatrick, Cole & Giblin, LLP, as escrow agent (the “Escrow Agent” and together with the City, the Redeveloper and the Purchaser, the “Parties”) entered into that certain Purchase, Escrow and Delivery Agreement (the “Escrow Agreement”), whereby, inter alia, the Bonds were issued and held in escrow until such time as the Project is completed; and
WHEREAS, Escrow Agreement automatically terminated in the event the Project wasn’t completed by June 30, 2022; and
WHEREAS, the Project is not completed and the Parties mutually desire to extend the termination date in the Escrow Agreement until December 31, 2023; and
WHEREAS, the Municipal Council desires to enter to Amendment No. 1 to Purchase, Escrow and Delivery Agreement to extend the automatic termination provision until December 31, 2023.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Purchase, Escrow and Delivery Agreement, dated June 23, 2020, by and among the City of Newark, Newark Makerhoods Urban Renewal, LLC, The Prudential Insurance Company of America, as the purchaser of the Bonds (the “Purchaser”) and DeCotiis, FitzPatrick, Cole & Giblin, LLP, as escrow agent (“Escrow Agreement”), entered into pursuant to Ordinance 6PSF-a(S) adopted by the Newark Municipal Council on September 24, 2019, is hereby amended to extend the automatic termination date in the Escrow Agreement until December 31, 2023.
2. The Mayor and/or his designee is hereby authorized to enter into and execute, on the City’s behalf, Amendment No. 1 to Purchase, Escrow and Delivery Agreement (“Amendment No. 1”) with Newark Makerhoods Urban Renewal, LLC, The Prudential Insurance Company of America, and DeCotiis, FitzPatrick, Cole & Giblin, LLP, in the form attached hereto as Exhibit A.
3. All other terms and conditions of the Escrow Agreement shall remain the same.
4. The Deputy Mayor/Director of the Department of Economic and Housing Development shall place an executed copy of the Amendment No. 1 to Purchase, Escrow and Delivery Agreement authorized by this Resolution on file in the Office of the City Clerk.
5. This Resolution shall take effect immediately.
STATEMENT
This Resolution authorizes an amendment to the original Purchase, Escrow and Delivery Agreement by and among the City, Newark Makerhoods Urban Renewal, LLC, The Prudential Insurance Company of America and DeCotiis, FitzPatrick, Cole & Giblin, LLP related to the release of Bonds from escrow for the Newark Makerhoods project.
EXHIBIT A
AMENDMENT NO. 1 TO PURCHASE, ESCROW AND DELIVERY AGREEMENT