Title
Dept/ Agency: Law
Action: (X) Ratifying (X) Authorizing ( ) Amending
Purpose: Settlement of Pre-Suit Demand for Payment of a loan awarded through a facade improvement program and execution of original loan agreement
Claimant: WAWA Realty, LLC., 557 Clinton Avenue, Newark, New Jersey, 07108
Settlement Amount: $50,000.00
Funding Source: City of Newark Budget, Department of Economic and Housing Development
Additional Comments:
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WHEREAS, the Façade Improvement Program is authorized by R.O. 2:10-4 and Ordinance 6PSF-j adopted by the Municipal Council on November 22, 2010, establishing the Urban Enterprise Zone City-wide Façade Improvement Program; and
WHEREAS, this ordinance specifies that if an applicant is approved, “and subject to receipt of grant funds, a loan shall be made available to an Applicant in an amount not to exceeds $50,000.00 per [p]roperty. Any expenditures detailed in the Property Improvement Plan PIP which exceeds $50,000.00, shall be the sole responsibility of the Applicant...” Ordinance 6PSF-j November 22, 2010, Section 5(A) ; and
WHEREAS, if an applicant is required to give matching funds it must provide up to 25% of its total cost (Ordinance 6PSF-j 112210, section 5(B)). When an applicant is required to provide matching funds the loan will be for a term of five (5) years secured by a mortgage on the property, and at the end of the term the principal and interest shall be forgiven in full (100%). (Ordinance 6PSF-j November 22, 2010, Section 6(A)); and
WHEREAS, on February 13, 2013, the Newark Façade Improvement Program Review Committee (the “Committee”) held a meeting at which it reviewed the application of WAWA Realty, LLC. (WAWA) for its property located at 557 Clinton Avenue, Newark, New Jersey 07108, Block 3002, Lots 26 and 27, which is a two-story building wherein Kings Family Restaurant & Catering, Inc. operates its restaurant on the ground floor; and
WHEREAS, the Committee determined that WAWA would be approved for the façade program, and WAWA would be awarded $50,000.00, for the eligible property improvements at 557 Clinton Avenue, and this amount is less than 75% of the total cost of planned property improvements; and
WHEREAS, on February 26, 2014 WAWA’s owner Younis Moheisen received an award letter from Ollyn J. Lettman, Director of Newark Office of the Urban Enterprise Zone, which informed him that the property located at 557 Clinton Avenue would be admitted to the program, and the City of Newark would allocate $50,000.00 for building renovations, and that this would be a loan forgiven in five years; and
WHEREAS, a letter was also sent by Newark Office of the Urban Enterprise Zone to then City Clerk, , and then Corporation Counsel from Mr. Lettman stating that WAWA was approved by the Façade Improvement Program Review Committee. It also states that Mr. Lettman executed the loan agreement and award letter dated February 26, 2014, and this letter confirms the letter Mr. Moheisen received; and
WHEREAS, it appears that City officials in 2014, inadvertently did not cause the loan agreement to be executed despite the approval; and
WHEREAS, WAWA relied on the award letter dated February 26, 2014, and it preceded to complete the improvements to the property according to the specifications of the façade program; and
WHEREAS, the Acting Deputy Mayor/Acting Director of the Department of Economic and Housing Development has confirmed that the City received the benefit of the property development; and
WHEREAS, WAWA has submitted a demand letter for payment and provided the necessary documents for which payment is sought for a total amount of $50,000.00; and
WHEREAS, the Acting Deputy Mayor/Acting Director of the Department of Economic and Housing Development has certified that there are adequate, appropriated monies available to pay the outstanding loan; and
WHEREAS, WAWA has agreed to settle the demand for the payment of $50,000.00 in one lump sum in exchange for the execution of a Settlement Agreement and General Release as a full and complete settlement of all of WAWA Realty, LLC.’s claims, including any claims for attorney’s fees; and
WHEREAS, the City of Newark agrees to release Newark Community Economic Development Corporation (NCEDC) and/or Newark Office of the Urban Enterprise Zone from any liability it may have with any and all events that led to this settlement; and
WHEREAS, Ordinance 6PSF-j November 22, 2010 directs how the loan will be dispersed and does not have a requirement for Municipal Council approval; and
WHEREAS, the within settlement and release does not admit nor should it be construed as an admission of liability or violation of any law, statute or regulation or a breach of any duty by the City of Newark, its agents, officers and/or employees whatsoever and is entered into based upon recommendations of counsel and to eliminate all risks and future litigation costs; and
WHEREAS, the City has determined that it is in the best interest of the taxpayers to avoid the cost, expense, delay and uncertainty of litigation, if this matter proceeded to litigation.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1 The Acting Corporation Counsel and the Acting Director or Economic and Housing Development are authorized on behalf of the City of Newark to execute a Settlement Agreement and General Release and any other documents, sufficient in form and content to the Acting Corporation Counsel and to take whatever actions are necessary to effectuate the terms of the within resolution and settlement of this matter. The appropriate City officials are further authorized to finalize the execution of the loan agreement which shall be ratified to June 25, 2015.
2 The Municipal Council of the City of Newark authorizes the Settlement Agreement with WAWA Realty, LLC., for the improvements it made to its property located at 557 Clinton Avenue, Newark New Jersey, under the facade program and acknowledges that loan is for a term or five (5) years and if all stipulations of the loan agreement is satisfied during the term, the loan will be 100% forgiven. The five (5) year loan term will relate back to June 25, 2015, which is the date of the original Loan Agreement.
3 The Municipal Council of the City of Newark hereby authorizes the payment for the benefit of WAWA Realty, LLC., in the amount of $50,000.00 (Fifty Thousand Dollars and Zero Cents), as consideration of and pursuant to the terms and conditions contained in the Settlement Agreement and Release annexed hereto.
4 In exchange for the execution by WAWA Realty, LLC., of the Settlement Agreement and Release, acceptable in form to the Acting Corporation Counsel and after passage of this resolution and upon receipt by the Acting Corporation Counsel and the Director of Finance of any and all other documents deemed necessary, the Director of Finance of the City of Newark is authorized to make the payment for the benefit of WAWA Realty, LLC.
5 The within settlement and resolution does not admit nor should it be construed as an admission of liability or violation of any law, statute or regulation or a breach of any duty by the City of Newark, its agents, officers and/or employees whatsoever and is entered into based upon recommendations of counsel and to eliminate all risks and future litigation costs.
6 Attached hereto is a Certification of Funds issued by the Director of Finance, City of Newark, which states that there are available sufficient, legally appropriated funds of $50,000.00 (Fifty Thousand Dollars and Zero Cents), for the purposes set forth herein above. A copy of the Certification of Funds issued shall be filed in the Office of the City Clerk together with this Resolution by the Acting Corporation Counsel.
7 A fully executed copy of the Settlement Agreement and Release shall be filed in the Office of the City Clerk by the Acting Corporation Counsel.
STATEMENT
This resolution authorizes the settlement of a demand for payment from WAWA, Realty, LLC., 557 Clinton Ave., Newark, New Jersey 07108, for loan award that was authorized through the Urban Enterprise Zone City-wide Façade Improvement Program in the amount of $50,000.00, in exchange for the execution of a Settlement Agreement and General Release and ratifies and authorizes the execution of the original loan agreement.