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AN ORDINANCE (1) AMENDING ORDINANCE 6PSF-C, ADOPTED ON NOVEMBER 1, 2023, AND (2) AUTHORIZING THE THIRD AMENDMENT OF THE AGREEMENT FOR THE SALE OF LAND AND REDEVELOPMENT OF THE CITY OF NEWARK PROPERTIES IDENTIFIED ON THE CITY OF NEWARK TAX MAP AS BLOCK 318, LOTS 1, 4 AND 8.
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WHEREAS, the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1, et seq., as amended and supplemented (the “Redevelopment Law”), provides a process for municipalities to participate in the redevelopment and improvement of areas in need of redevelopment; and
WHEREAS, in order to stimulate the reinvigoration of the City, by Resolution 7Rdo(AS) adopted by the Municipal Council on June 15, 2005, the entire City of Newark was designated as an area in need of rehabilitation pursuant to the Redevelopment Law; and
WHEREAS, on August 17, 2005 the Municipal Council of the City of Newark (the "Municipal Council") approved Ordinance 6S&Fc(S), adopting the West Ward Redevelopment Plan, including any amendments thereto, for the Redevelopment Area (the "Redevelopment Plan"); and
WHEREAS, the City is the owner of property located at 432-434 So. Orange Ave., 436-440 So. Orange Ave., 442-446 So. Orange Ave., 454-462 So. Orange Ave., and 476 So. Orange Ave. and identified as Lots 1, 4 and 8 in Block 318, Lot 21 in Block 319, and Lot 4 in Block 320 on the tax maps of the City of Newark in the County of Essex, State of New Jersey (the “Property”); and
WHEREAS, the City has determined that the Property is no longer needed for any public use and that redevelopment of the Property will contribute to the social and economic improvement of the West Ward in accordance with the intent, goals and objectives of the Redevelopment Plan; and
WHEREAS, the 432-446 South Orange Avenue, LLC (the “Assignor”) previously proposed to purchase and redevelop the Property by constructing a health care center, veterans housing facility with ground floor retail, and modest parking area (“Original Project”); and
WHEREAS, the City and Assignor entered into a certain Agreement of the Sale and Redevelopment of Land dated November 21, 2017, to purchase and redevelop the Property; and
WHEREAS, the City and Assignor entered into an Amended and Restated Agreement for the Sale of Land and Redevelopment on March 19, 2019, approved by the Municipal Council by Resolution 7R2-c (s/as) on January 15, 2019, in which the Assignor agreed to purchase the Property for $610,000.00 and construct the Original Project (as amended, the “Redevelopment Agreement”); and
WHEREAS, to obtain the financing to construct the Original Project, the Assignor needed to lease out the Property to various medical facilities/providers and after several years, the Assignor could not secure more than one (1) prospective tenant, the Assignee, to lease the Property; and
WHEREAS, Assignor was unable to secure tenants to lease the Project to, and with Assignee as the only prospective tenant, the Assignor did not proceed with constructing the Original Project; and
WHEREAS, by way of letter dated July 27, 2023, Assignor made a written request to the City to transfer the Redevelopment Agreement to St. James Health, Inc., (the “Assignee”); and
WHEREAS, Assignor is desirous of transferring its rights, obligations and responsibilities under Redevelopment Agreement to Assignee and Assignee is desirous of purchasing the Property from the City and developing it as a three-story, approximately 38,400 square foot medical office building and associated improvements, including a parking lot (the “Amended Project”); and
WHEREAS, Assignor seeks to occupy the first two floors of the proposed building as a federally qualified healthcare center and to lease the third floor to medical specialists affiliated with RWJ Barnabas Health that cater to low-income, Medicaid and uninsured patients; and
WHEREAS, Assignor is desirous of owning and redeveloping the Property because its existing healthcare facility at 332 South 8th Street in the City has outgrown itself, having the capacity to effectively serve 3,000 patients annually while it currently serves over 3,000 patients annually; and
WHEREAS, the Amended Project will be capable of serving over 15,000 patients annually; and
WHEREAS, by owning and developing the Property, Assignor can anticipate greater longevity at the Property, bolster its infrastructure in the City and better serve its patients; and
WHEREAS, the City will benefit by facilitating better service for the healthcare needs of its residents; and
WHEREAS, the City consents to the proposed transfer of the Redevelopment Agreement to the Assignee whereby the Assignee assumes the rights, obligations and responsibilities of the Assignor as set forth under the Redevelopment Agreement; and
WHEREAS, based upon the City's review of the Amended Project and other information, the City has determined that the Assignee possesses the proper qualifications, financial resources and the capacity to acquire and redevelop the Property; and
WHEREAS, the City previously adopted Ordinance 6PSF-c on November 1, 2023 authorizing the execution of the Assignment, Assumption and Second Amendment of the Agreement for the Sale of Land and Redevelopment of the Property, a copy of which is attached hereto as Exhibit A; and
WHEREAS, the City, the Assignor and Assignee entered into the Assignment, Assumption and Second Amendment of the Agreement for the Sale of Land and Redevelopment of the Property (the “Assignment Agreement”); and
WHEREAS, the Assignment Agreement transferred the Redevelopment Agreement to the Assignee for the redevelopment of the Property; and
WHEREAS, the Property was not yet transferred to Assignee; and
WHEREAS, the Assignee now wishes to only purchase and redevelop the property located at 432-434 So. Orange Ave., 436-440 So. Orange Ave., and 42-446 So. Orange Ave, identified as Block 318, Lots 1, 4, and 8 on the City Tax Maps (the “Amended Property”); and
WHEREAS, the City now desires to amend Ordinance 6PSF-c adopted on November 1, 2023 to authorize the Assignee to purchase and develop only the Amended Property; and
WHEREAS, the adoption of this Ordinance will not affect the Assignee from closing on the Amended Property; and
WHEREAS, the City and Assignee desire to enter into an Amended Assignment, Assumption and Third Amendment of the Agreement for the Sale and Redevelopment of Land for the purchase and development of the Amended Property, in a form substantially consistent with the one attached hereto as Exhibit B (“Amended Agreement”).
NOW, THEREFORE, BE IT ORDAINED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Mayor of the City of Newark, and/or his designee, and the Deputy Mayor/Director of the Department of Economic and Housing Development are hereby authorized to enter into enter into the Amended Assignment, Assumption and Third Amendment of the Agreement for the Sale of Land and Redevelopment in a form substantially consistent with the one attached hereto as Exhibit B (“Amended Agreement”).
2. 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 Amended Agreement for the Sale and Redevelopment of Land concerning the sale and transfer of the City’s property and may enter into any related documents, including but not limited to deeds for the Property consisting of 432-434 So. Orange Ave., 436-440 So. Orange Ave., 442-446 So. Orange Ave., and identified as Lots 1, 4 and 8 in Block 318 on the tax maps of the City of Newark in the County of Essex, State of New Jersey (the “Amended Property”), which may be necessary in order to effectuate the Amended Agreement.
3. The executed Amended Agreement for the Sale and Redevelopment of Land and all exhibits shall be placed on file in the Office of the City Clerk by the Deputy Mayor/Director of Department of Economic and Housing Development.
4. The Deputy Mayor/Director of Department of Economic and Housing Development is authorized to enter into a maximum of two (2) six (6) month extensions of any timeframe set forth in the Amended Agreement, subject to full written disclosure of such extension(s) (in the form of a signed Memorandum to be submitted to the Office of the City Clerk prior to adoption) to the Municipal Council of the City of Newark by the Deputy Mayor/Director of the Department of Economic and Housing Development and the approval of the City of Newark’s Corporation Counsel.
5. The Redeveloper shall have thirty (30) days from the date this resolution is certified by the Office of the City Clerk to execute the attached Amended Agreement and return same to the Department of Economic Housing Development. Should the Redeveloper fail to execute and return the attached Amended Agreement within this thirty (30) day time period, the authorization provided by this resolution shall be null and void, unless the Deputy Mayor/Director of Department of Economic and Housing Development agrees in writing to extend this thirty (30) day period.
6. Ordinance 6PSF-c previously adopted on November 1, 2023 is hereby amended to permit only the purchase and redevelopment of 432-434 So. Orange Ave., 436-440 So. Orange Ave., 442-446 So. Orange Ave., and identified as Lots 1, 4 and 8 in Block 318 on the Official Tax Maps of the City of Newark.
STATEMENT
This Ordinance authorizes the Mayor of the City of Newark, and/or his designee, and the Deputy Mayor/Director of the Department of Economic and Housing Development to Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to effectuate certain business terms and conditions related to the Amended Assignment, Assumption and Third Amendment of the Agreement for the Sale of Land and Redevelopment concerning the sale and transfer of the City’s property and may enter into any related documents, including but not limited to deeds for the Properties consisting of 432-434 So. Orange Ave., 436-440 So. Orange Ave., 442-446 So. Orange Ave., and identified as Lots 1, 4 and 8 in Block 318 on the tax maps of the City of Newark in the County of Essex, State of New Jersey.
EXHIBIT A
ORDINANCE 6PSF-C AND ASSIGNMENT, ASSUMPTION, AND SECOND AMENDMENT OF THE AGREEMENT FOR THE SALE AND REDEVELOPMENT OF LAND
EXHIBIT B
AMENDED AGREEMENT