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”)
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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, and two (2) four-bedroom units; 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 “NJHMFA”) First Mortgage and Security Agreement, First Mortgage Note, Financing, Deed Restriction, and Regulatory Agreement, and related documents (collectively, the “NJHMFA Loan Documents.”).
WHEREAS, the Parties acknowledge that NJHMFA 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 the NJHMFA seeking consent to the purchase of the Property and financing (the “HMFA Application”); and
WHEREAS, the Assignee has also represented to the City that it will also be filing an application with the New Jersey Economic Development Agency (the “NJEDA”) seeking ASPIRE Credits (“Aspire Credits”) to be used toward the rehabilitation of the Property (the “ASPIRE Application”); and
WHEREAS, pursuant to N.J.S.A. 40A:20-13.2.1(a), the City may continue a tax exemption for a State or federally subsidized housing project beyond the expiration of the original mortgage term, provided that legally enforceable affordability controls remain in effect for the Project; and
WHEREAS, the Project shall remain subject to such affordability controls through the federal Low Income Housing Tax Credit program administered by NJHMFA pursuant to section 42 of the Internal Revenue Code (26 U.S.C. §42); 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
WHEREAS, the Parties desire to amend the Financial Agreement further to extend the tax exemption so that it runs concurrently with the affordability controls on the Property; 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 the rights and obligations of the Assignor under the Financial Agreement; and
WHEREAS, the City’s consent herein is based solely upon information provided by the Assignor and Assignee and nothing contained in this Resolution shall be construed as a waiver, estoppel, or limitation of the City’s rights or remedies under the Financial Agreement, the Assignment Agreement, or applicable law; and
WHEREAS, approval or funding by NJHMFA, NJEDA, or any other governmental or quasi-governmental entity shall not be deemed approval by the City of Newark of any matter not expressly authorized by this Resolution; and
WHEREAS, on March 18, 2026, the Municipal Council of the City of Newark approved Resolution 7R2-g authorizing the assignment and assumption of the Financial Agreement from Cottage Place II, LLC to Cottage Place Apartments, LLC; and
WHEREAS, the previously approved resolution and the related assignment and assumption agreement were not in a form acceptable to HMFA and the City now seeks to proceed with authorization under this revised Resolution.
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NOW, THEREFORE BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The foregoing recitals are hereby found to be true and correct and are incorporated into this Resolution as though fully set forth herein.
2. Resolution 7R2-g, adopted on March 18, 2026, and the assignment and assumption agreement authorized therein are hereby rescinded.
3. Subject to the terms and conditions set forth herein and HMFA’s prior written approval of the sale of the Property and Project, the Municipal Council hereby consents to (i) the conveyance of the Property and Project by Assignor to Assignee and (ii) the assignment of the Financial Agreement governing the Project from the Assignor to the Assignee, pursuant to N.J.S.A. 40A:20-13.2.1(a). Such consent is limited solely to the matters expressly stated herein and shall not be deemed a waiver of any rights, remedies, or protections of the City under the Financial Agreement or applicable law.
4. 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 Project will remain subject to such affordability controls through the federal Low Income Housing Tax Credit program administered by NJHMFA pursuant to section 42 of the Internal Revenue Code (26 U.S.C. §42); and
5. The City’s consent is expressly conditioned upon the Assignee’s continuous compliance with the Financial Agreement, the Assignment Agreement, all affordability controls, and all applicable federal, state, and municipal laws, ordinances, and resolutions, and failure to comply shall constitute a default.
6. The City’s consent is expressly conditioned upon the requirement that Assignee register with the City’s Office of Affordability and Sustainable Housing and comply with all their rules and regulations pertaining to the affordable housing units in the Project.
7. 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.
8. Pursuant to the Financial Agreement, the long term tax abatement for the Project expires on May 31, 2037 and shall be extended through the Assignment Agreement for a period equal to the term of the affordability controls imposed on the Project through the federal Low Income Housing Tax Credit program administered by NJHMFA pursuant to section 42 of the Internal Revenue Code (26 U.S.C. §42) of approximately thirty (30) years, as evidenced by the recorded HMFA approval and documentation, and will remain in effect until that date provided that the Assignee complies with all applicable Federal and State laws and regulations, City Ordinances and Resolutions and the terms of the Assignment Agreement and Financial Agreement. Any ambiguity regarding the term shall be resolved strictly in favor of the City and in accordance with the actual duration of affordability controls as approved by HMFA.
9. The adoption of this ordinance is expressly conditioned upon the requirement that 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. Failure to timely satisfy this condition shall result in this Resolution and all approvals granted herein being deemed null and void.
10. This Resolution shall take effect immediately upon the full satisfaction of all conditions set forth herein, as determined by the City in its sole discretion.
11. 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.
12. 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.
13. 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, and two (2) four-bedroom units 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 and extension 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.