File #: 24-0886    Version: 1 Name: Thomas Street Grant Agreement Trust Fund
Type: Resolution Status: Adopted
File created: 6/14/2024 In control: Economic and Housing Development
On agenda: 7/10/2024 Final action: 7/10/2024
Title: Dept./Agency: Economic and Housing Development Action: ( ) Ratifying (X) Authorizing ( ) Amending Type of Service: Grant Agreement Purpose: To provide for a Grant Agreement with Thomas Street Urban Renewal, LLC. Entity Name: Thomas Street Urban Renewal, LLC Entity Address: 300 Wilson Avenue, Newark, New Jersey 07105 Additional Grant Amount: Not to exceed $300,000.00 Funding Source: Community and Economic Development Dedicated Trust Fund Total Project Cost: $12,927,471.30 City Contribution: $300,000.00 Other Funding Source/Amount: HOME Program Funds/Private Lenders Grant Period: Construction has commenced and shall be completed within twenty-four (24) months following construction commencement 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) 184-194 Thoma...
Sponsors: Council of the Whole

Title

Dept./Agency: Economic and Housing Development

Action:  (   ) Ratifying     (X) Authorizing     (     ) Amending

Type of Service: Grant Agreement

Purpose: To provide for a Grant Agreement with Thomas Street Urban Renewal, LLC.

Entity Name: Thomas Street Urban Renewal, LLC

Entity Address: 300 Wilson Avenue, Newark, New Jersey 07105

Additional Grant Amount: Not to exceed $300,000.00

Funding Source: Community and Economic Development Dedicated Trust Fund

Total Project Cost: $12,927,471.30

City Contribution: $300,000.00

Other Funding Source/Amount: HOME Program Funds/Private Lenders

Grant Period: Construction has commenced and shall be completed within twenty-four (24) months following construction commencement

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)

184-194 Thomas Street/Block 1164, Lot 11/East 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+Fe(s), on September 21, 2005, the Municipal Council adopted a First Amendment to the East Ward Redevelopment Plan (together with all amendments, the “Redevelopment Plan”), which provides for the redevelopment of certain City-owned parcels within the East Ward of the City; and

WHEREAS, Thomas Street Urban Renewal LLC, 300 Wilson Avenue, Newark, New Jersey 07105 (the “Redeveloper”), plans to construct and develop the real property located at 184-194 Thomas Street (East Ward) of the Tax Map of the City of Newark, County of Essex, State of New Jersey (Block 1164, Lot 11 in the City of Newark, New Jersey (East Ward) (the “Property”), and construct a new 5-story residential affordable housing building (the “Project”) that will consist of fifty-two (52) one-bedroom residential rental units (the “Housing Units”). Eleven (11) of the Housing Units assisted with grant funds shall be deed-restricted for use and occupancy by extremely low-income senior citizen and elderly individuals and households earning 30% or less of Area Median Income as determined by the U.S. Department of Housing and Urban Development (collectively, the “Restricted Housing Units”); and

WHEREAS, to ensure that the Restricted Housing Units shall remain affordable to such extremely low income individuals and households, the Property shall be subject to continuing affordability and other restrictions for a twenty (20) year period pursuant to a Deed-Restrictive Grant Agreement with the City (the “Grant Agreement”); and

WHEREAS, the Project currently has a $300,000.00 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 recognizes the need to complete the above Project and desires to finance the making of an additional capital grant in the amount of Three Hundred Thousand Dollars and Zero Cents ($300,000.00) to the Redeveloper to be used to implement the Project; and

WHEREAS, pursuant to Resolution 7RG, adopted by the 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 Resolution and the activities eligible for assistance under Title I and the City further wishes to fund an additional capital grant to the Redeveloper in an amount not to exceed Three Hundred Thousand Dollars and Zero Cents ($300,000.00) (the “Grant”) from the amounts deposited in the Fund in accordance with the Resolution; 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, provide a grant to the Redeveloper in the amount of $300,000.00 for purposes of bridging the gap in financing to develop and 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 Three Hundred Thousand Dollars and Zero Cents ($300,000.00) of funds from the City’s Community and Economic Development Dedicated Trust Fund for the purpose of funding a grant to Thomas Street Urban Renewal LLC, 300 Wilson Avenue, Newark, New Jersey 07105, to be used as financing assistance to develop and subsidize the costs of the Project pursuant to the terms and conditions of the Grant Agreement, in the form attached hereto, 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 Three Hundred Thousand Dollars and Zero Cents ($300,000.00) 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 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 the Grant Agreement with the Redeveloper, in the form attached hereto, which shall ensure that the Restricted Housing Units remain eligible for extremely low-income senior citizen and elderly tenants and affordable during the twenty (20) year period of affordability and otherwise in compliance with the terms of therein.

 

4.                     The Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to execute, establish and record 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 of default under the Grant Agreement, which declaration shall be made by the Entity (and executed by the City) by requiring the Entity to execute and deliver a separate Mortgage and Security Agreement and Note for the full amount of funding provided to the Entity in the Grant Agreement. Said covenants, conditions and restrictions shall run with the land and bind the Entity 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 Grant 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 Redeveloper has complied with all terms and conditions of the Grant Agreement.

 

5.                     The term of the Grant Agreement shall commence on the date of execution and delivery of the Grant Agreement by the Entity to the City and the City and expire upon the City’s issuance of a Certificate of Completion for the Project as provided in the Grant Agreement.

 

6.                     The City shall be responsible for the recordation of the final fully executed Grant Agreement and the related Mortgage and any amendments thereto in the Office of the Essex County Register of Deeds and Mortgages.

 

7.                     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 (2) 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 (2) 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.

 

8.                     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.

 

9.                     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 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.

 

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 Three Hundred Thousand Dollars and Zero Cents ($300,000.00) and (2) that the line appropriation of official budget which shall be charged is as follows: Dept.: NW026, Account: 32100, Budget Ref: B2024

 

11.                     A copy of the fully executed and recorded Grant Agreement and Mortgage, and fully executed Note 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 Thomas Street Urban Renewal LLC, in the aggregate grant amount of $300,000.00 to bridge the gap in financing required to complete construction of the Project.