Title
Dept/ Agency: Economic & Housing Development
Action: ( ) Ratifying (X) Authorizing ( X ) Amending
Type of Service: Private Sale/Redevelopment
Purpose: Second Amendment to Redevelopment Agreement
Entity Name: Morris Fairmount Associates Urban Renewal, LLC
Entity Address: c/o Morris Realty Associates, LLC, 350 Veterans Boulevard, Rutherford, New Jersey 07070
Sale Amount: $10.00
Cost Basis: ( ) $ PSF ( ) Negotiated ( ) N/A ( ) Other:
Assessed Amount: $
Appraised Amount: $474,500.00
Contract Period: n/a
Contract Basis: ( ) Bid ( ) State Vendor ( ) Prof. Ser. ( ) EUS
( ) Fair & Open ( ) No Reportable Contributions ( ) RFP ( ) RFQ
( X ) Private Sale ( ) Grant ( ) Sub-recipient ( ) n/a
List of Property:
(Address/Block/Lot/Ward)
189-199 Blanchard Street (Block 2438, Lot 92) (the "Original City Property") and 190-202 Blanchard Street and abutting underwater land (Block 5001, Lots 50 and 50.01) - EAST WARD
Additional Information:
Original Redevelopment Agreement was authorized by Resolution 7Rg031506 adopted March 15, 2006. The first Amendment to the Redevelopment Agreement was authorized by Resolution 7R3-A(AS)(S) 012308
Purchase price of property shall be adjusted to $10.00; Entity to receive a credit of $474,490.00 against appraised fair market value for remediation and riparian rights.
body
WHEREAS, on March 15, 2006, the Municipal Council of the City of Newark (the "City") adopted Resolution 7Rg, authorizing the Mayor or his designee, upon satisfaction of all legal conditions precedent, to execute a redevelopment agreement with Morris Fairmount Associates Urban Renewal, LLC (formerly known as Morris Fairmount Associates, LLC) (the "Redeveloper") in connection with the construction of an industrial warehouse development in accordance with the provisions and limitations set forth in the City's Urban Renewal Plan - Industrial River Project and as further depicted in a concept plan prepared by the Redeveloper (the "Project"); and
WHEREAS, pursuant to the Municipal Council's authorization, the City entered into a Redevelopment Agreement with the Redeveloper (the "Original Agreement") in April 2006, which Original Agreement provided for the conveyance by the City to the Redeveloper of certain City-owned property, specifically certain property identified as Block 2438, Lot 92 (a/k/a 189-199 Blanchard Street) (the "Original City Property"), at fair market value; and
WHEREAS, on January 23, 2008, the Municipal Council of the City adopted Resolution 7R3-A(AS)(S) authorizing the Mayor or his designee to execute an amendment to the Original Agreement with the Redeveloper; and
WHEREAS, pursuant to the Municipal Council's authorization, the City entered into an Amendment No. 1 to Redevelopment Agreement with the Redeveloper (the "First Amendment") in or about January 2008, which First Amendment expanded the "Project Area", provided for a revised concept plan for the Project, and made certain other revisions to the Original Agreement; and
WHEREAS, the Redeveloper has determined that it is necessary in connection with the construction and operation of the construction of the Project that the Redeveloper obtain title to certain additional City-owned property, specifically certain property identified as Block 5001, Lots 50 and 50.01 (a/k/a 190-202 Blanchard Street and abutting underwater land) (the "Additional City Property") and the City is willing to convey the Additional City Property to the Redeveloper at fair market value; and
WHEREAS, the Original City Property and the Additional City Property (collectively, the "City Property") is impaired due to the existence of certain constraints to the development thereof, including the need to undertake certain required environmental remediation and the need to acquire certain riparian rights (collectively, the "City Property Development Constraints"), which impact the actual fair market value of the City Property, and all of which the City and the Redeveloper acknowledge must be addressed in order for the City Property to be redeveloped as contemplated by the Original Redevelopment Agreement, as amended by the First Amendment (collectively, the "Existing Redevelopment Agreement"); and
WHEREAS, the City and the Redeveloper desire to amend certain provisions of the Existing Redevelopment Agreement to, among other things, (i) include the Additional City Property in the conveyance to the Redeveloper, and (ii) establish the procedures and conditions (including calculation of the purchase price) under which the City will convey the City Property to the Redeveloper in connection with the Project; and
WHEREAS, the combined fair market value of the City Property, determined as though the City Property were remediated, has been appraised at the combined amount of $474,500.00; and
WHEREAS, the City has received cost estimates reflecting estimated remediation costs of $3,061,484.00 and estimated costs of obtaining riparian rights of up to $200,000.00; and
WHEREAS, on the basis of such cost estimates, the City has agreed that there shall be a credit of $474,490.00 against the appraised fair market value of the City Property, such that the purchase price of the City Property shall be Ten Dollars ($10.00); and
WHEREAS, the City has determined that there is good cause for the modifications to the Existing Agreement as aforesaid and that it is appropriate for the City to authorize the execution of an amendment to the Existing Agreement to reflect the foregoing;
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Second Amendment to Redevelopment Agreement (the "Second Amendment"), in the form presented to this meeting, is hereby approved. The Mayor and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development of the City are hereby authorized to enter into and execute the Second Amendment with, Morris Fairmount Associates Urban Renewal, LLC, c/o Morris Realty Associates Urban Renewal, LLC, 350 Veterans Boulevard, Rutherford, New Jersey 07070, in the form attached hereto, with such changes as may be approved by the officer executing same, with the advice of Corporation Counsel, such approval to be conclusively evidenced by such officer's execution thereof
2. The executed Second Amendment shall be placed on file in the Office of the City Clerk by the Department of Economic and Housing Development
3. This resolution shall take effect immediately.
STATEMENT
Resolution approving the City's execution of a Second Amendment to Redevelopment Agreement (the "Second Amendment") with Morris Fairmount Associates Urban Renewal, LLC (formerly known as Morris Fairmount Associates, LLC) (the "Redeveloper"), amending certain provisions of a Redevelopment Agreement executed in April 2006, as heretofore amended by an Amendment No. 1 to Redevelopment Agreement executed in or about January 2008 (collectively, the "Existing Agreement"). The Existing Agreement, as amended by the Second Amendment, provides for the sale by the City of certain property located at 189-199 Blanchard Street (Block 2438, Lot 92) (the "Original City Property") and 190-202 Blanchard Street and abutting underwater land (Block 5001, Lots 50 and 50.01) (the "Additional City Property"), which constitute portions of the site on which the Redeveloper is undertaking a redevelopment project consisting of the construction of an industrial warehouse development. The Second Amendment includes the Additional City Property in the conveyance to the Redeveloper and establishes the procedures and conditions (including calculation of the purchase price) under which the City will convey the Original City Property and the Additional City Property to the Redeveloper in connection with the redevelopment project.