Title
Dept/ Agency: Economic Housing and Development
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Purpose: Approving HMFA Financial Agreement
Project Information:
RESOLUTION OF THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK GRANTING A THIRTY (30) YEAR TAX ABATEMENT PURSUANT TO THE NEW JERSEY HOUSING AND MORTGAGE FINANCE AGENCY LAW OF 1983, AS AMENDED AND SUPPLEMENTED, N.J.S.A. 55:14K-1 ET SEQ., TO NEVADA PRESERVATION, LLC, C/O FAIRSTEAD, 250 W. 55TH STREET, 35TH FLOOR, NEW YORK, NEW YORK 10019, FOR THE ACQUISITION, PRESERVATION, AND SUBSTANTIAL REHABILITATION OF AN EXISTING SENIOR MULTIFAMILY RESIDENTIAL DEVELOPMENT CONTAINING THREE HUNDRED SIX (306) AFFORDABLE RESIDENTIAL RENTAL UNITS, CONSISTING OF THIRTY-SIX (36) STUDIO UNITS AND TWO HUNDRED SEVENTY (270) ONE-BEDROOM UNITS, TOGETHER WITH RELATED COMMON AREAS, AMENITIES, BUILDING SYSTEMS, ACCESSIBILITY IMPROVEMENTS, AND SITE IMPROVEMENTS, LOCATED AT 987-997 BROAD STREET, ALSO KNOWN AS 18-44 NEVADA STREET AND 2 NEVADA STREET, NEWARK, NEW JERSEY 07102, AND IDENTIFIED ON THE CITY’S TAX MAP AS BLOCK 111, LOT 76 (COLLECTIVELY, THE “PROJECT”) (CENTRAL WARD).
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WHEREAS, Nevada Preservation, LLC, c/o Fairstead, 250 W. 55th Street, 35th Floor, New York, New York 10019 (the “Entity”), has applied for a long-term tax exemption pursuant to the New Jersey Housing and Mortgage Finance Agency Law of 1983, as amended and supplemented, N.J.S.A. 55:14K-1 et seq. (the “HMFA Law”), for the acquisition, preservation, and substantial rehabilitation of Nevada Street Apartments, an existing senior multifamily residential development containing three hundred six (306) affordable residential rental units, consisting of thirty-six (36) studio units and two hundred seventy (270) one-bedroom units, together with related common areas, amenities, building systems, accessibility improvements, and site improvements, located at 987-997 Broad Street, also known as 18-44 Nevada Street and 2 Nevada Street, Newark, New Jersey 07102, and identified on the City’s tax map as Block 111, Lot 76 (collectively, the “Project”); and
WHEREAS, all three hundred six (306) residential rental units are supported by a long-term Section 8 Housing Assistance Payments contract and, upon receipt of the contemplated four percent (4%) low-income housing tax credit allocation from the New Jersey Housing and Mortgage Finance Agency, are proposed to be restricted to households earning at or below sixty percent (60%) of Area Median Income; and
WHEREAS, the Mayor has submitted the application and proposed Financial Agreement to the Municipal Council with his recommendation thereof, a copy of which is annexed hereto; and
WHEREAS, the Municipal Council has determined that the relative benefits of this Project outweigh any costs associated with this tax exemption and that without the tax abatement granted herein, the Project would not be undertaken; and
NOW, THEREFORE BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The application of Nevada Preservation, LLC, c/o Fairstead, 250 W. 55th Street, 35th Floor, New York, New York 10019 (the “Entity”), for the acquisition, rehabilitation, maintenance, and operation of the Project described in the application is hereby approved in accordance with the recommendation of the Mayor for a Project that consists of the acquisition, preservation, and substantial rehabilitation of an existing senior multifamily residential development containing three hundred six (306) affordable residential rental units, consisting of thirty-six (36) studio units and two hundred seventy (270) one-bedroom units, together with related common areas, amenities, building systems, accessibility improvements, and site improvements, located at 987-997 Broad Street, also known as 18-44 Nevada Street and 2 Nevada Street, Newark, New Jersey 07102, and identified on the City’s tax map as Block 111, Lot 76 (collectively, the “Project”).
2. The abatement from taxation on improvements is hereby granted to the Entity for a period of thirty (30) years pursuant to the HMFA Law, and the Entity shall be subject to the provisions and conditions of the HMFA Law and the Financial Agreement annexed hereto.
3. The Mayor of the City of Newark is hereby authorized to execute, on the City’s behalf, the Financial Agreement in the form attached hereto.
4. An executed copy of the Financial Agreement authorized by this resolution shall be filed and maintained with the City Clerk.
5. The Entity shall commence and complete the Project in accordance with the Financial Agreement, including commencement within thirty (30) days after the tax credit closing and completion within twenty-four (24) months thereafter, subject to any extensions authorized thereunder.
6. The Project, when completed, will conform with all State laws and ordinances of the City of Newark relating to its rehabilitation and use.
7. The Affirmative Action Program now on file in the Office of the City Clerk is declared to be a material condition of the Financial Agreement authorized by this resolution.
8. The Entity shall in the operation of the Project comply with all laws so that no person shall be subject to any discrimination because of race, religious principles, color, national origin, or ancestry.
9. The Entity shall file an employment report (herein described below) with the Office of Affirmative Action who shall forthwith after receiving the report send a copy thereof to the City Clerk and the Office of Affirmative Action shall forthwith investigate the matters contained therein and report its findings to the Municipal Council.
10. The annual service charge shall be calculated in accordance with Article IV of the Financial Agreement.
11. The Entity shall pay the minimum annual service charge, as calculated pursuant to the HMFA Law and the Financial Agreement, in each year in which the annual service charge would be less than the minimum annual service charge.
12. The following occurrences and requirements are express conditions of the granting of this tax abatement, to be performed by the Entity and the failure to comply with these requirements will result in the cancellation of the tax abatement:
(a) The Entity shall not, without prior consent of the Municipal Council of the City of Newark, or as otherwise authorized in Article IX of the financial agreement, sell, lease, assign, encumber, subordinate, convey, mortgage or transfer all, or any part of the Project, so as to sever, disconnect or divide the improvements from the land embraced within the Project;
(b) The Entity, pursuant to the Revised City Ordinance 10:24-1 et seq., as amended, shall be deemed to agree that it will in good faith assist the City of Newark in its goal of having 50% of all new jobs arising out of the businesses conducted on the Project site after the issuance of the Certificate of Occupancy and during the continuation of the tax exemption, dedicated to Newark residents, of which 25% of all such new employees shall be minority residents;
(c) The Entity shall concomitantly, with the submission of the annual report required of it, attach an employment report under oath, with particulars, stating the manner and the extent to which it has complied with 12(b) above. This employment report shall be filed with the Director of Finance, the City Clerk and the Deputy Mayor/Director of the Department of Economic and Housing Development;
(d) The Entity shall pay all outstanding taxes and all outstanding water and sewer charges within thirty (30) days of the adoption of this Resolution;
(e) The Entity shall submit to the City a copy of its formation documents, as filed with the Secretary of State;
(f) The Entity shall receive a favorable review and certification from the appropriate City departments and agencies, pursuant to the Revised City Ordinance 10:24-1 et seq., as amended.
13. That in any year that the Entity shall fail to make four (4) consecutive land tax payments when due and owing such delinquency shall render the Entity ineligible for any land tax credits against the annual service charge.
14. The Entity understands and agrees that the revenue projections set forth in the application are estimates and that the actual payments in lieu of taxes to be paid by the Entity to the City shall be determined pursuant to the Financial Agreement to be executed between the Entity and the City of Newark.
15. The Deputy Mayor/Director of the Department of Economic and Housing Development (the “Director”) is authorized, as part of this Resolution and in connection with any mortgage financing for the Project, to execute and deliver, on behalf of the City of Newark, an Estoppel Certificate upon written request of the Entity or its lender, subject to the terms set forth herein.
Any such Estoppel Certificate shall be limited to statements, as of its date and only to the extent of the City’s actual knowledge and official records, regarding the status of the Financial Agreement and the Entity’s compliance therewith, and such other customary matters as the Director, in the City’s sole discretion, deems appropriate.
No Estoppel Certificate shall modify, amend, supplement, or waive this Resolution or the Financial Agreement. The City shall have no obligation to certify matters beyond its records or actual knowledge and shall not be deemed to have conducted any independent investigation. Issuance shall be subject to prior review, revision, and written approval by the Deputy Mayor/Director and, if required, the City’s Outside Legal Counsel.
The City reserves all rights, remedies, defenses, and protections under this Resolution, the Financial Agreement, and applicable law, and assumes no liability to the Entity, its lender, or any third party in connection with any Estoppel Certificate, while permitting the Entity to request such certificate for legitimate financing purposes.
16. To the extent of any inconsistency with any prior City resolution, and/or Municipal Code provision governing the granting of long-term tax exemptions, including, inter alia, procedures for application, review and approval, required terms of the financial agreement, required conditions and covenants, limits on duration, means of enforcement, and all other matters whatsoever, such prior City resolutions, and/or Municipal Code provisions are hereby waived, but solely with respect to this Resolution.
17. The Entity shall submit to the City of Newark’s Department of Economic and Housing Development or its assigned agent all documentation which it is required to submit and maintain in accordance with the terms and conditions of the financing to be provided by the HMFA and all other sources of funding received.
18. The Entity shall submit to the City of Newark’s Law Department and Department of Economic and Housing Development copies of the mortgage and all other loan documents executed between the Entity and the HMFA within thirty (30) days of the closing.
19. The tax exemption and Financial Agreement approved hereby are subject to the conditions, limitations, and termination provisions set forth in the Financial Agreement, including, without limitation, those provisions relating to the receipt of Low Income Housing Tax Credits and project financing.
20. The exemption shall become effective upon implementation by the Tax Assessor following satisfaction of the conditions set forth in the Financial Agreement.
21. This Resolution shall take effect only upon the full satisfaction of all conditions set forth herein, as determined by the City in its sole discretion.
STATEMENT
This Resolution of the Municipal Council of the City of Newark grants a thirty (30) year tax abatement pursuant to the New Jersey Housing and Mortgage Finance Agency Law of 1983, as amended and supplemented, N.J.S.A. 55:14K-1 et seq., to Nevada Preservation, LLC, c/o Fairstead, 250 W. 55th Street, 35th Floor, New York, New York 10019, for the acquisition, preservation, and substantial rehabilitation of Nevada Street Apartments, an existing senior multifamily residential development containing three hundred six (306) affordable residential rental units, consisting of thirty-six (36) studio units and two hundred seventy (270) one-bedroom units, together with related common areas, amenities, building systems, accessibility improvements, and site improvements, located at 987-997 Broad Street, also known as 18-44 Nevada Street and 2 Nevada Street, Newark, New Jersey 07102, and identified on the City’s tax map as Block 111, Lot 76 (collectively, the “Project”) (Central Ward).