Title
Dept/ Agency: Economic Housing and Development
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Purpose: Approving Assignment Agreement
Project Information: RESOLUTION OF THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK CONSENTING TO THE ASSIGNMENT OF THE FINANCIAL AGREEMENT FROM cottage place ii, llc TO cottage place apartments, llc FOR AN AFFORDABLE HOUSING PROJECT LOCATED AT the property is now commonly known as 125 West Kinney Street, 607-639 Dr. Martin Luther King, Jr. Boulevard, 86-96 Lincoln Street, and 8-24 Dolby Place, and is currently identified on the Official Tax Map of the City of Newark as Block 2509, Lot 60; Block 2509, Lot 1; Block 2509.01, Lot 1; Block 2509.02, Lot 1; and Block 2509.03, Lot 1 (collectively, the “Project”)
Additional Information:
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WHEREAS, on October 6, 2004, the Municipal Council adopted Resolution 7RDS (AS), authorizing the City of Newark to enter into and execute a long-term tax abatement agreement with Assignor, pursuant to N.J.S.A. 55:14K-1 et seq., for a term of thirty (30) years from the date of substantial completion of a residential rental project (the “Project”); and
WHEREAS, the Project consists of one hundred (100) residential rental units, including fifteen (15) one-bedroom units, fifty-four (54) two-bedroom units, twenty-nine (29) three-bedroom units, two (2) four-bedroom units and two (2) commercial spaces; and
WHEREAS, the Project is located on property originally identified as various addresses on Lincoln Street, Dr. Martin Luther King, Jr. Boulevard, College Place, and West Kinney Street, formerly designated on the Official Tax Map of the City of Newark as Block 2509, Lot 1; Block 2509.01, Lot 1; Block 2509.02, Lot 1; and Block 2509.03, Lot 1; and
WHEREAS, the property is now commonly known as 125 West Kinney Street, 607-639 Dr. Martin Luther King, Jr. Boulevard, 86-96 Lincoln Street, and 8-24 Dolby Place, and is currently identified on the Official Tax Map of the City of Newark as Block 2509, Lot 60; Block 2509, Lot 1; Block 2509.01, Lot 1; Block 2509.02, Lot 1; and Block 2509.03, Lot 1 (collectively, the “Property”) (A copy of Resolution 7RDS (AS), the original application from Assignor seeking a long term tax exemption, and the original financial agreement are attached hereto as Exhibit A); and
WHEREAS, on November 29, 2004, the City entered into a Financial Agreement with the Assignor governing the tax abatement for the Project; and
WHEREAS, the Assignor has entered into a contract with Cottage Place Apartments LLC (“Assignee”), with a business address located at One Washington Mall, Suite 500, Boston, Massachusetts 02108, to sell or otherwise transfer the Property and Amended Project, which contract requires that the City approve the transfer of the Financial Agreement to the Assignee; and
WHEREAS, Assignor is the current borrower under that certain New Jersey Housing and Mortgage Finance Agency (the “HMFA”) First Mortgage and Security Agreement, First Mortgage Note, Financing, Deed Restriction, and Regulatory Agreement, and related documents (collectively, the “HMFA Loan Documents.”).
WHEREAS, the Parties acknowledge that HMFA approval is a condition precedent to the effectiveness of this Resolution and the Financial Agreement; and
WHEREAS, the Assignee has represented to the City that it will be filing an application with HMFA (the “HMFA Application”) seeking their consent to the purchase of the Property and to the assumption of the Financial Agreement, and the Assignor’s HMFA Loan Documents; and
WHEREAS, the Assignee has represented to the City that upon HMFA’s prior approval it shall purchase the Property, and it will assume the Financial Agreement and the Assignor’s HMFA Loan Documents; and
WHEREAS, on February 25, 2026, in connection with Assignee’s request for a long-term tax exemption for the Property, Assignee submitted a request to the City seeking the City’s consent to the sale of the Property and the transfer of the Financial Agreement from the Assignor to the Assignee, a copy of which is attached hereto as Exhibit B); and
WHEREAS, the City has reviewed Assignee’s Application and all related documents and has determined that the Assignee has the capacity and experience to own and operate the Property and the Project and to assume all of the rights and obligations of the Assignor under the Financial Agreement; and
WHEREAS, subject to HMFA’s prior approval of the sale of the Property and the Project and Assignee’s assumption of the HMFA Loan Documents, the City is desirous of approving the transfer of all of the rights, title and interest of the Assignor in and to the Financial Agreement to the Assignee in connection with the Assignor’s sale of the Property and Project to the Assignee.
NOW, THEREFORE BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The above-stated recitals are hereby found to be true and correct and are incorporated into this Resolution as though fully set forth herein.
2. Subject to HMFA’s prior written approval of the sale of the Property and Project, and Assignee’s assumption of the HMFA Loan Documents, the Municipal Council hereby consents to (i) the conveyance of the Property and Amended Project by Assignor to Assignee and (ii) the assignment of the Financial Agreement governing the Amended Project from the Assignor to the Assignee.
3. The City’s consent to the sale of the Project and of the transfer of the Financial Agreement to the Assignee is based upon the Assignee’s representation that the Assignee has agreed to assume the Assignor’s HMFA Loan Documents and that the Project will continue to be managed and operated as set forth in the HMFA Application.
4. The Municipal Council hereby authorizes the Mayor and/or his designee, the Deputy Mayor/Director of Department of Economic and Housing Development to execute, on behalf of the City, the Assignment and Assumption Agreement of Financial Agreement amongst the City, the Assignor and the Assignee (the “Assignment Agreement”) in substantially the form attached hereto as Exhibit C.
5. The long term tax abatement for the Project will expire on May 31, 2037 and will remain in effect until such time provided that the Assignee complies with all applicable Federal and State laws and regulations, City ordinances and resolutions and terms of the Assignment Agreement and Financial Agreement. This Resolution will not extend the period of the tax abatement beyond May 31, 2037.
6. The Assignee shall pay all outstanding amounts due to the City, including without limitation, all water and sewer charges and all other amounts due under the Financial Agreement, within thirty (30) days of the adoption of this resolution.
7. This Resolution shall take effect immediately.
8. The Assignment Agreement is conditionally approved upon (i) HMFA approval and (ii) the consummation of the sale, transfer, and conveyance of the property from Assignor to Assignee.
9. The Assignment Agreement, once fully executed, shall be filed by the Deputy Mayor/Director of the Department of Economic and Housing Development with the Office of the City Clerk.
10. If NJHMFA approval is not obtained or the sale, transfer and conveyance of the Property does not occur for any reason, this Resolution is null and void and of no further force or effect.
STATEMENT
This resolution memorializes the City’s consent to (i) the conveyance of the affordable housing project consisting of one hundred (100) residential rental units, including fifteen (15) one-bedroom units, fifty-four (54) two-bedroom units, twenty-nine (29) three-bedroom units, two (2) four-bedroom units, and two (2) commercial spaces located on the property now commonly known as 125 West Kinney Street, 607-639 Dr. Martin Luther King, Jr. Boulevard, 86-96 Lincoln Street, and 8-24 Dolby Place, and is currently identified on the Official Tax Map of the City of Newark as Block 2509, Lot 60; Block 2509, Lot 1; Block 2509.01, Lot 1; Block 2509.02, Lot 1; and Block 2509.03, Lot 1 by Cottage Place II, LLC (“Assignor”) to Cottage Place Apartments LLC (“Assignee”) and to (ii) the assignment of the Financial Agreement governing the Project from the Assignor to the Assignee. This resolution also authorizes the Mayor and/or his designee, the Deputy Mayor/Director of Department of Economic and Housing Development to execute, on behalf of the City, an Assignment and Assumption Agreement with the Assignor and the Assignee in substantially the form attached to the resolution.