Title
Dept/ Agency: Economic and Housing Development
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Type of Service: Execute Affordable Housing Agreement for HOME funds.
Purpose: To authorize the execution of a Deed Restrictive HOME Affordable Housing Agreement with Jarid Jamar Construction Company, Inc., for construction of two (2) new three-family homes for a total of six (6) housing units (collectively, the “Project”), four (4) of which such units shall be designated as HOME Assisted Units and subsidized by the City upon the real properties located at 147 South 10th Street (West Ward) and 149-151 South 10th Street (West Ward) of the Tax Map of the City of Newark, County of Essex, State of New Jersey 07107 (Block 1826; Lots 20 and 22, respectively) (collectively, the “Property”)
Entity Name: Jarid Jamar Construction Company, Inc.
Entity Address: 9 Weber Road, West Orange, New Jersey 07052
Grant Amount: $440,000.00
Funding Source: Federal HOME Program Funds
Contract Period: HOME Program Funds must be expended within forty-eight (48) months from the date of adoption.
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)
147 South 10th Street (West Ward) and 149-151 South 10th Street (West Ward) of the Tax Map of the City of Newark, County of Essex, State of New Jersey 07107 (Block 1826; Lots 20 and 22, respectively)
Additional Information:
body
WHEREAS, the City of Newark, New Jersey (the “City”), desires to enter into and execute a Deed Restrictive Affordable Housing Agreement (the “AHA”) with Jarid Jamar Construction Company, Inc. (the “Entity”), 9 Weber Road, West Orange, New Jersey 07052, subject to the express condition that the Entity purchases and acquires fee simple title to the Property, which shall be defined as having complete and permanent ownership of the land, as well as any buildings on that land through a deed recorded with the Essex County Registrar’s Office ; and
WHEREAS, the City desires to provide the Entity with Federal HOME Program Funds (“HOME Funds”) in the form of a deferred zero percent (0%) interest bearing loan for a period of twenty (20) years pursuant to the Federal HOME Loan Program (24 C.F.R. part 92) and any amendments thereto (the “HOME Program”); and
WHEREAS, the AHA shall be for a maximum loan amount of Four Hundred Forty Thousand Dollars and Zero Cents ($440,000.00) in HOME Program Funds (the “Loan”) to be used by the Entity to develop and construct two (2) new three-family homes (each a “Home”) for a total of six (6) housing units (each a “Housing Unit”) (collectively, the “Project”) upon the real properties located at 147 South 10th Street (West Ward) and 149-151 South 10th Street (West Ward) of the Tax Map of the City of Newark, County of Essex, State of New Jersey 07107 (Block 1826; Lots 20 and 22, respectively) (collectively, the "Property), which Project shall be part of the City’s Second Amendment to the West Ward Redevelopment Plan, adopted on August 17, 2005, by Ordinance 6S&Fj, as amended to date (collectively, the “Redevelopment Plan”); and
WHEREAS, the Entity intends to complete and sell each Home to a qualified third-party purchaser (a “Purchaser”) after the Project is completed and a certificate of occupancy has been issued by the City; and
WHEREAS, the Entity has agreed and shall promptly and affirmatively disclose to each Purchaser prior to closing that: (a) one (1) of the Housing Units in each Home constructed for the Project shall be occupied by such Purchaser as his or her principal residence and (b) two (2) of the Housing Units in each Home shall be affordable and occupied by low-income families or households as their principal residence for a period of twenty (20) years and designated as deed-restricted affordable Housing Units (collectively, the “HOME Assisted Units”) offered for rent by such Purchaser who are eligible and qualified families or households earning 51% to 80% or less of Area Median Income as determined by the U.S. Department of Housing and Urban Development; and
WHEREAS, to ensure that the HOME-Assisted Units shall remain affordable and the principal residence of the Purchaser, each Purchaser and Home on the Property shall be subject to ongoing affordability, recapture and other deed restrictions for a twenty (20 year period as required by the HOME Program and pursuant to the terms and conditions of the attached proposed Deed Restrictive Homebuyer Beneficiary Agreement and Acknowledgement of Affordability Requirements to be executed and delivered by the Purchasers (the “Beneficiary Agreement”); and
WHEREAS, a portion of the Loan shall be assumed and assigned by each Purchaser in the amount of $220,000.00 upon the consummation of the sale of each Home and execution and delivery of the Beneficiary Agreement, a Mortgage Note and Mortgage and Security Agreement by such Purchaser; and
WHEREAS, the Entity has agreed to construct the Home Assisted Units in connection with the Project provided it receives an award of HOME Funds from the City in order to provide it with a financial subsidy for the construction of these Home Assisted Units for the Project; and
WHEREAS, it is in the best interest of the City and the Department of Economic and Housing Development to establish contractual guarantees and procedures by which the City will ensure the Entity’s compliance with the requirements of the HOME Program for the time and in the manner set forth in the AHA for the receipt of said HOME Funds; and
WHEREAS, the Project is also located within an area in need of redevelopment as defined under the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 et seq. (the "LRHL"), and is governed by and is to be built as part of the Redevelopment Plan; and
WHEREAS, the Project currently has a significant 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 or loans 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 an approved Redevelopment Plan; and
WHEREAS, the Newark Municipal Council recognizes the need to complete the above Project and desires to finance the making of a forgivable zero percent (0%) interest-bearing deferred payment loan in the amount of Four Hundred Forty Thousand Dollars and Zero Cents ($440,000.00) to the Entity for a term of twenty (20) years in compliance with other governmental lender requirements to be used as a subsidy to develop the Project, which such loan and funding to be made by the City is expressly contingent and conditioned upon the Entity’s purchase and acquisition of fee simple title to the Property.
NOW, THEREFORE BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Mayor and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development are hereby authorized to enter into and execute a Deed Restrictive Affordable Housing Agreement (the "AHA") with Jarid Jamar Construction Company, Inc. (the “Entity”), 508 Central Avenue, Newark, New Jersey 07107 for Federal HOME Program funds in the amount of $440,000.00 to subsidize the new construction of the Homes consisting of six (6) housing units to be constructed within the Project of which four (4) housing units shall be HOME-Assisted Units and designated as deed-restricted affordable housing units offered for rent to low income single family households earning 51 to 80% or less of AMI in accordance with 24 C.F.R. §92.252. The site of the Project will be located at 147 South 10th Street (West Ward) and 149-151 South 10th Street (West Ward) of the Tax Map of the City of Newark, County of Essex, State of New Jersey 07107 (Block 1826; Lots 20 and 22, respectively). The remaining two (2) housing units constructed for the Project shall be owned and occupied by the Purchaser of the Home as his or her principal residence for the entire affordability period.
2. The Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to establish a declaration of covenants, conditions and restrictions to ensure that the Project and the HOME Assisted Units remains affordable for a period of twenty (20) years in accordance with the HOME Program. 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 with the AHA for a period of twenty (20) years.
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 a Beneficiary Agreement with each of the Purchasers, which shall ensure that the HOME-Assisted Units remain the principal residence of the Purchaser and the eligible and qualified tenants, subject to recapture of funds, and are affordable during the twenty (20) year period of affordability and otherwise in compliance with the terms therein and the HOME Program.
4. The Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to establish and record the Beneficiary Agreement executed with each Purchaser, which is a declaration of covenants, conditions and restrictions to ensure that the City shall be repaid the full amount of the HOME Funds disbursed to the Entity to subsidize the costs of constructing the HOME-Assisted Units, a portion of which loan ($220,000.00) shall be assumed by each Purchaser at closing, 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 Entity and assumed by the Purchaser in the AHA and 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.
5. The term of the AHA shall commence on the date of execution and delivery of the AHA by the Entity and the City and expire upon issuance of a Certificate of Occupancy for each of the Homes and the sale, closing and transfer of all of the Property and Homes to the Purchasers and the funding of the HOME Program funds as provided herein.
6. The term of each Beneficiary Agreement shall commence on the date of execution and delivery of the Beneficiary Agreement by the respective 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 respective Purchaser has complied with all terms and conditions of the Beneficiary Agreement.
7. The City shall be responsible for the recordation of the final fully executed: (i) AHA, the related Mortgage and any amendments thereto, and (ii) the Beneficiary Agreement, the related Mortgage and any amendments thereto, in the Office of the Essex County Register’s Office.
8. The HOME Mortgage and HOME Mortgage Note given by the Entity and each of the Purchasers in favor of the City of Newark shall ensure compliance with all of the requirements of the HOME Program, pursuant to the HOME Program Statue and Regulations (24 C.F.R. Part 92).
9. Subject to the satisfaction in the sole discretion of the City of all of the terms, covenants and other conditions set forth in the AHA and other documents and agreements executed and delivered by the Entity and a Purchaser in connection herewith and the Project, the HOME Mortgage Note and the HOME Mortgage made in favor of the City shall be forgiven and discharged by the City upon the expiration of the twenty (20) year affordability period. Notwithstanding the foregoing, the loan will be required to be repaid in full at the end of the a twenty (20) year term or earlier if any of the terms, covenants and other conditions of the Agreement and/or other documents and agreements executed and delivered by the Entity and a Purchaser in connection herewith and the Project have been violated and/or breached by the Entity or a Purchaser or the Entity or Purchaser otherwise defaults with respect to their respective terms, covenants and/or conditions as provided therein.
10. 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 AHA, and applicable Beneficiary Agreements, as permitted by New Jersey law and may execute, deliver and enter into subordination agreements, mortgages, access and right of entry agreements and other relevant documents and agreements related to and in furtherance of these fund allocations and the Project 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 AHA, 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.
11. Disbursement of the Federal HOME Program Funds for the Project in the amount of Four Hundred Forty Thousand Dollars and Zero Cents ($440,000.00) shall be subject to the terms and conditions set forth in the AHA, which is attached hereto and a made a part hereof.
12. The Entity must adhere to all milestones and timelines in the Project Schedule approved by the Department of Economic and Housing Development. The Property 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, then the City, in its sole discretion, in addition to any other remedy available by the Agreement or as allowed by law, may direct the Entity to repay all HOME Program Funds expended on the Project back to the City.
13. The term of the AHA shall be for a period of twenty (20) years from the date of adoption of this authorizing resolution by the Municipal Council. HOME Program Funds must be expended within forty-eight (48) months from the date of adoption.
14. The Entity must remain in compliance with Municipal, State and Federal Laws including, but not limited to the City of Newark's Minority Set-Aside Ordinance (6S&Fd adopted April 5, 1995) and its Affirmative Action Plan (7Rbp adopted 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. 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.
15. Units assisted with HOME Program Funds must be designated upon execution of the AHA and must remain fixed units for the duration of the affordability period. Households seeking to occupy a HOME-assisted unit must be certified prior to occupancy and recertified annually.
16. Attached hereto is a Certification of Funds from the Municipal Comptroller of the City of Newark which states:
a) subject to the express condition that the Entity purchases and acquires fee simple title to the Property, there are sufficient funds in the aggregate amount of Four Hundred Forty Thousand Dollars and Zero Cents ($440,000.00) for the purpose set forth herein and above; and that the line appropriation of Official Budget which shall be charged as follows:
|
Business Unit |
Department |
Div./Proj. |
Activity |
Account # |
Budget Ref.: |
Amount |
|
NW051 |
G21 |
D21G0 |
A |
72090 |
B2021 |
$440,000.00 |
STATEMENT
This Resolution hereby authorizes the Mayor and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development to enter into and execute a Deed Restrictive Affordable Housing Agreement with Jarid Jamar Construction Company, Inc. (the “Entity”), t 9 Weber Road, West Orange, New Jersey 07052, and the Deed Restrictive Beneficiary Agreements with certain qualified and eligible low income homebuyers or purchasers for Federal HOME Program Funds in the amount of $440,000.00 to subsidize the construction of a new affordable housing project upon the Property and consisting of two (2) three-family owner-occupied residential buildings for a total of six (6) housing units of which four (4) housing units shall be fixed HOME-Assisted Units offered for rent to single family households earning 51 to 80% or less of AMI. The HOME-Assisted Units must: be occupied by qualified families and households as his or her principal residence, (ii) rented to a family that qualifies as a low-income family, (iii) remain affordable for a period of twenty (20) years, and (iv) otherwise comply with the requirements under the HOME Program (24 C.F.R. Part 92.252). The remaining two (2) housing units constructed for the Project shall be unrestricted and owned and occupied by the Purchaser as his or her principal residence for the entire affordability period pursuant to the terms of a Beneficiary Agreement which shall be recorded against the Home on the applicable Property.