Title
Dept./ Agency: Economic and Housing Development
Action: ( ) Ratifying (X) Authorizing (X ) Amending
Type of Service: Private Sale/Redevelopment
Purpose: An Agreement to Subordinate the City of Newark’s Reverter Rights by entering into a First Amendment to Agreement for the Sale and Redevelopment of Land and a Subordination Agreement in order to permit the Redeveloper to obtain construction financing necessary for the redevelopment of an affordable rental housing project
Entity Name: Rubix International Limited Liability Company
Entity Address: 24 Commerce Street, Suite 1420, Newark, New Jersey 07102
Sale Amount: $0.00
Cost Basis: ( ) $ PSF ( ) Negotiated (X) N/A ( ) Other:
Assessed Amount: $0.00
Appraised Amount: $0.00
Contract Period: Not Applicable
Contract Basis: ( ) Bid ( ) State Vendor ( ) Prof. Ser. ( ) EUS
( ) Fair & Open ( ) No Reportable Contributions ( ) RFP ( ) RFQ
( ) Private Sale ( ) Grant ( ) Sub-recipient (X) n/a
List of Property:
232-234 Schley Street/Block 3733/Lot 89/South Ward
(Address/Block/Lot/Ward)
Additional Information:
Resolution 7R2-b (s) adopted on May 25, 2021, designating Rubix International Limited Liability Company as the redeveloper and authorizing an Agreement for the Sale and Redevelopment of Land.
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WHEREAS, pursuant to Resolution 7R2-b(s) adopted on May 25, 2021, the Newark Municipal Council (“Municipal Council”) authorized the Mayor and the Deputy Mayor/Director of the Department of Economic and Housing Development to enter into and execute an Agreement for the Sale and Redevelopment of Land (“Agreement”) with Rubix International Limited Liability Company (the “Redeveloper”) for the sale of City owned real property, which included property located at 232-234 Schley Street, Newark, New Jersey and identified on the official tax map of the City of Newark as Block 3733, Lot 89 (the “Property”), for a total purchase price of Forty-Six Thousand Five Hundred Sixty Dollars and Zero Cents ($46,560.00), for the development and construction of the Property to create a new 3-story building consisting of three (3) units of affordable rental housing (the “Project”); and
WHEREAS, the sale and Agreement were authorized pursuant to N.J.S.A. 40A:12A-8(g) and the South Ward Redevelopment Plan; and
WHEREAS, such sale was authorized pursuant to N.J.S.A. 40A:12-13, which requires that such conveyance be subject to the condition that title to the Property revert back to the City in the event of a Default under Section V. Event of Default, Termination of the Agreement and Right of Reverter (mislabeled Section V) of the Agreement and Section d. of the Deed (collectively, the “Right of Reverter”); and
WHEREAS, the Redeveloper has represented that it has secured construction financing from Community Loan Fund of New Jersey, Inc. (the “Senior Lender”) in the approximate principal amount of $379,473.00 (the “Loan”), to develop and complete the Project, which Loan will be evidenced by a Promissory Note in the principal amount of the Loan, and will be secured by a Mortgage on the Property (“Mortgage”); and
WHEREAS, as a condition of the above Loan, the Senior Lender has requested that the City subordinate the Right of Reverter to the rights of the Senior Lender with respect to the Mortgage and Loan; and
WHEREAS, the Agreement states that the Reverter Right may be subordinated by the City subject to formal approval by the Municipal Council and pursuant to N.J.S.A. 40:60-51.2, which authorizes a municipality to waive, release, modify or subordinate any terms, covenants, conditions, limitations or reverters imposed in sales and conveyances of lands as to the erection, alteration or demolition of buildings or any other use to be made of land heretofore imposed by said municipality to accomplish the purposes for which such lands were sold and conveyed either at public or private sale including those set forth pursuant to Section 21 of P.L.1971, c. 199 (C.40A:12-21), but only after public hearing held before such Governing Body, of the holding of which notice describing the lands in question, and the terms, covenants, conditions, limitations or reverters to be waived, released, modified or subordinated, and, if to be modified or subordinated, describing the manner in which the same shall be modified or subordinated, shall first have been given by advertisement published once each week for two weeks in a newspaper published in said municipality or, if no newspaper be published therein, then in a newspaper circulating in such municipality, provided, however, that the power herein granted shall not be exercised to impair any vested or contractual rights of third parties; and
WHEREAS, the Department of Economic and Housing Development caused a notice to be advertised including the requirements established in N.J.S.A. 40:60-51.2, in the Star Ledger on November 13, 2024 and November 20, 2024, which complies with the notice requirement of once each week for two weeks; and
WHEREAS, the Municipal Council desires to subordinate the City’s Reverter Right contained in the Agreement and the Deed by entering into a First Amendment to Agreement for the Sale and Redevelopment of Land and Subordination of Right of Reverter and executing an Estoppel Certificate so as to accomplish the Project.
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 Subordination of Right of Reverter and Estoppel Certificate with and in favor of the Community Loan Fund of New Jersey, Inc., a Non-Profit Corporation, 100 Albany Street, Suite 250, New Brunswick, New Jersey 08901, Senior Lender, in the form attached hereto or such other forms reasonably acceptable to the parties, related to the Property located at 232-234 Schley Street, Newark, New Jersey, as shown on the official tax map of the City as Block 3733, Lot 89 (“Property”), which was sold to Rubix International Limited Liability Company, 24 Commerce Street, Suite 1420, Newark, New Jersey (“Redeveloper”), pursuant to Resolution 7R2-b(s) adopted on May 25, 2021, , for the construction of a new 3-story building consisting of three (3) units of affordable rental housing (the “Project”).
2. The Mayor and/or his designee the Deputy Mayor/Director of the Department of Economic and Housing Development are hereby authorized to enter into a First Amendment to Agreement for the Sale and Redevelopment of Land with the Redeveloper, in the form attached hereto, related to the Property for the Project.
3. All other terms and conditions of the Agreement for the Sale and Redevelopment of Land, authorized by and entered into pursuant to Resolution 7R2-b(s) adopted on May 25, 2021, shall remain in full force and effect.
4. Notice in accordance with N.J.S.A. 40:60-51.2 of the subordination of the City’s Right of Reverter to the Senior Lender’s mortgage with respect to the Property has been duly given by publication as required by law and the holding of a public hearing on said resolution at a Meeting of the Municipal Council onNovember 26, 2024, in the Council Chamber located at City Hall, 920 Broad Street, Newark, New Jersey.
5. The Deputy Mayor/Director of the Department of Economic and Housing Development shall place filed copies of the fully executed Subordination of Right of Reverter, the First Amendment to Agreement for the Sale and Redevelopment of Land and the Estoppel Certificate with the Office of the City Clerk.
STATEMENT
This Resolution authorizes the Mayor of the City of Newark and/or designee, the Deputy Mayor/Director of the Department of Economic and Housing Development to enter into and execute a Subordination of Right of Reverter, First Amendment to Agreement for the Sale and Redevelopment of Land, and an Estoppel Certificate to enable the Redeveloper to obtain financing necessary for the development of the Property as a new 3-story building consisting of three (3) units of affordable rental housing located at 232-234 Schley Street, Newark, New Jersey, as shown on the official tax map of the City as Block 3733, Lot 89 located in the South Ward.