Title
Dept/ Agency: Finance
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Purpose: Confirming Bond Sale
Amount to be Financed: $1,000,000.00
Source of Appropriation: Bonds
Purchaser: SWH Properties, LLC., 100 Washington Street, Newark, New Jersey 07102
Project Information:
(Description/ Project No./Amount Appropriated/Ordinance No.)
RESOLUTION AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND SALE OF REDEVELOPMENT AREA BONDS (NEWARK WAREHOUSE URBAN RENEWAL, LLC PROJECT, SERIES 2017A) (FEDERALLY TAXABLE, NON-RECOURSE) OF THE CITY OF NEWARK, IN THE COUNTY OF ESSEX, NEW JERSEY, PROVIDING FOR THE FORM, MATURITIES AND OTHER DETAILS OF SAID BONDS; AUTHORIZING THE EXECUTION AND DELIVERY BY THE CITY OF A TRUST INDENTURE, A FIRST SUPPLEMENTAL INDENTURE, A BOND PURCHASE AGREEMENT, A PLEDGE AND ASSIGNMENT AGREEMENT AND SUCH OTHER DOCUMENTS AND INSTRUMENTS AS NECESSARY FOR THE ISSUANCE OF SAID BONDS.
Additional Information:
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WHEREAS, in accordance with the Local Redevelopment and Housing Law, constituting Chapter 79 of the Pamphlet Laws of 1992 of the State of New Jersey (the “State”), and the acts amendatory thereof and supplemental thereto (the “Redevelopment Law”, as codified by N.J.S.A. 40A:12A-1 et seq.), the City of Newark (the “City”) has previously determined to undertake the redevelopment of that certain redevelopment area in the City’s downtown core as designated by the City by Resolution 7Rba adopted by the Municipal Council on July 14, 2004, as amended and extended by Ordinance 6S&Fg, adopted by the Municipal Council on September 7, 2005 (the “Downtown Core District and Newark Plaza Urban Renewal Areas” and referred to herein as the “Redevelopment Area”); and
WHEREAS, in connection with the designation of the Redevelopment Area, the City has adopted a Redevelopment Plan by Ordinance 6S&Ff finally adopted by the Municipal Council on October 6, 2004 (the “Original Redevelopment Plan”), as amended by Ordinance 6S&Fg, adopted by the Municipal Council on September 7, 2005, (the “First Amendment”), as further amended by Ordinance 6PSF-h, adopted by the Municipal Council on May 5, 2010, (the “Second Amendment”), as further amended by Ordinance 6PSF-a(S), adopted by the Municipal Council on February 24, 2015, (the “Third Amendment”), and as further amended by the Municipal Council by Ordinance 6PSF-b, as amended, on September 2, 2015 (the “Fourth Amendment”, and together with the First Amendment, the Second Amendment, and the Third Amendment, collectively, and as may be further amended from time to time, the “Redevelopment Plan”); and
WHEREAS, in order to implement the Redevelopment Plan, Station Plaza Newark Downtown Core Urban Renewal Company, LLC, an affiliate of Newark Warehouse Urban Renewal, LLC (the “Entity”), was duly designated as redeveloper of the Property (as hereinafter defined) (the “Redeveloper”), among other property, and entered into a redevelopment agreement with the Housing Authority of the City of Newark, the then duly designated redevelopment entity acting on behalf of the City, which redevelopment agreement was most recently amended and restated on July 7, 2016 (the “Redevelopment Agreement”); and
WHEREAS, the Entity’s sole member, Newark Warehouse Redeveloper Company, LLC (“Sole Member”), currently owns certain property commonly known as 98-126 Edison Place, Newark, New Jersey, and designated as Block 159.01, Lot 11 on the tax maps of the City (the “Property”), which Property will be ground leased by the Sole Member to the Entity pursuant to a ground lease agreement (“Ground Lease Agreement”) for a term no less than the term of the exemption granted hereby and by the Ordinance, and which Property the Entity proposes to redevelop by rehabilitating the existing six (6) story vacant structure into a seven (7) story building containing office, retail and general commercial uses (the “Project”); and
WHEREAS, pursuant to and in accordance with the provisions of the Long Term Tax Exemption Law of 1992, constituting Chapter 431 of the Pamphlet Laws of 1991 of the State, and the acts amendatory thereof and supplemental thereto (the “Tax Exemption Law”, as codified in N.J.S.A. 40A:20-1 et seq.), and the New Jersey Redevelopment Area Bond Financing Law, constituting Chapter 310 of the Pamphlet Laws of 2001 of the State, and the acts amendatory thereof and supplemental thereto (the “Redevelopment Bond Law”, as codified in N.J.S.A. 40A:12A-64 et seq., and together with the Redevelopment Law and the Tax Exemption Law, the “Acts”), the City is authorized to provide for and accept, in lieu of real property taxes, an annual service charge paid by the Entity to the City; and
WHEREAS, on April 19, 2017, the Municipal Council adopted Ordinance 6PSF-c, entitled “AN ORDINANCE GRANTING A TAX EXEMPTION TO NEWARK WAREHOUSE URBAN RENEWAL, LLC, 100 WASHINGTON STREET, NEWARK, NEW JERSEY 07102, FOR A PROJECT TO REHABILITATE AND RENOVATE AN EXISTING SIX (6) STORY VACANT WAREHOUSE BUILDING INTO A SEVEN (7) STORY BUILDING CONSISTING OF OFFICE, RETAIL AND GENERAL COMMERCIAL USES LOCATED ON PROPERTY KNOWN AS 98-126 EDISON PLACE AND IDENTIFIED ON THE OFFICIAL TAX MAP OF THE CITY AS BLOCK 159.01, LOT 11, FOR A TERM EQUAL TO THE EARLIER OF THE THIRTY-FIVE (35) YEARS FROM THE DATE OF EXECUTION OF THE FINANCIAL AGREEMENT OR 35) YEARS FROM THE DATE OF COMPLETION OF THE PROJECT, AND AUTHORIZING THE EXECUTION AND DELIVERY OF A FINANCIAL AGREEMENT AND OTHER APPLICABLE DOCUMENTS RELATED TO THE ISSUANCE OF REDEVELOPMENT AREA BONDS (NON-RECOURSE TO THE FULL FAITH AND CREDIT OF THE CITY), AUTHORIZING THE ISSUANCE OF THE REDEVELOPMENT AREA BONDS IN A PRINCIPAL AMOUNT NOT TO EXCEED $1,000,000.00 AND DETERMINING VARIOUS OTHER MATTERS IN CONNECTION THEREWITH” (the “Ordinance”), which Ordinance authorized the Financial Agreement, the Project and the issuance of bonds; and
WHEREAS, in order to assist in financing a portion of the costs of the Project, the City has determined to issue bonds to finance a portion of the costs of the Project (the “Bonds”) in accordance with the terms and provisions of (i) that certain “Indenture of Trust”, to be dated the first day of the month in which the Bonds are issued, by and between the City and a to be determined trustee (the “Trustee”), as amended or supplemented from time to time (the “Master Trust Indenture”); (ii) that certain “First Supplemental Indenture”, to be dated the first day of the month in which the Bonds are issued (as may be amended from time to time in accordance with its terms, (the “First Supplemental Indenture,”) and together with the Master Trust Indenture and any additional supplemental indenture authorized thereunder, (the “Trust Indenture”); and (iii) this Bond Resolution; and
WHEREAS, pursuant to the terms of the Financial Agreement, the Trust Indenture and that certain “Pledge and Assignment Agreement”, by and between the City and the Trustee (the “Pledge Agreement”), and in accordance with the Redevelopment Bond Law, specifically N.J.S.A. 40A:12A-67(c), the Pledged Annual Service Charge, as such term is defined in the Financial Agreement, shall be pledged to the payment of the principal of, redemption premium, if any, and interest on the Bonds; and
WHEREAS, in accordance with the Ordinance and the Acts, the City now desires to authorize and approve the sale and issuance of the Bonds in the aggregate principal amount not to exceed $1,000,000.00 pursuant to the Ordinance, this resolution, the Trust Indenture and the Pledge Agreement, the Pledge and Assignment Agreement by and between the City and a to be named trustee (the “Pledge Agreement”); and
WHEREAS, the City has determined to authorize a Bond Purchase Agreement (the “Bond Purchase Agreement” and together with the Trust Indenture, Pledge Agreement and such other documents, agreements, instruments or certificates as may be necessary for the issuance of the Bonds, (collectively, the “Bond Documents”) with SWH Properties, LLC, 100 Washington Street, Newark, New Jersey 07102, as the purchaser of the Bonds (the “Purchaser”), pursuant to which the Purchaser will agree to purchase the Bonds upon satisfaction of the conditions precedent to issuance set forth therein; and
WHEREAS, in connection with the sale and issuance of the Bonds, the City also desires to approve and authorize the forms of and the entering into of the Bond Documents and such other instruments, opinions, affidavits, certificates, resolutions, documents, agreements or other papers as may be deemed necessary for the issuance of the Bonds.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, IN THE COUNTY OF ESSEX, THAT:
Section 1. The City hereby authorizes the issuance and sale of the Bonds of the City in the original principal amount not to exceed $1,000,000.00. The proceeds of the Bonds shall be applied to the payment of the costs of the Project.
Section 2. (a) The Bonds will be dated as of their date of delivery and will mature no later than thirty-five (35) years thereafter, subject to any prior mandatory sinking fund redemption and in the amounts set forth in the Trust Indenture. The Bonds shall bear interest at a rate not to exceed five percent (5%). Interest on the Bonds shall be paid semiannually pursuant to the Trust Indenture.
Section 3. The Bonds shall be secured by, inter alia, the pledge and assignment of Pledged Annual Service Charge as shall be provided in the Pledge Agreement and the Trust Indenture, and the full faith and credit of the City shall not be pledged to the payment of the principal of and the interest on the Bonds.
Section 4. The Trust Indenture pertaining to the Bonds shall be substantially in the form attached to this Resolution as Exhibit A and made a part hereof, and the Mayor, and/or his designees, the Deputy Mayor/Director of the Department of Economic and Housing Development, the Director of Finance, the Business Administrator and the City Clerk of the City (each an “Authorized Officer”) are each hereby authorized to execute the Trust Indenture with such changes, revisions, or alterations thereto or insertions therein as may be approved by the officer executing the same after consultation with the City’s Acting Corporation Counsel and/or Bond Counsel, such approval to be conclusively evidenced by the execution thereof.
Section 5. The Pledge Agreement from the City to the Trustee assigning the Pledged Annual Service Charges as security for Bonds shall be substantially in the form attached to this Resolution as Exhibit B and made a part hereof, and the Authorized Officers are each hereby authorized to execute the Pledge Agreement with such changes, revisions or alterations therefor as may be approved by the officer executing the same after consultation with the City’s Acting Corporation Counsel and/or Bond Counsel, such approval to be conclusively evidenced by the execution thereof.
Section 6. The Bond Purchase Agreement by and between the City and the Purchaser shall be substantially in the form attached to this Resolution as Exhibit C and made a part hereof, and the Authorized Officers are each hereby authorized to execute the Bond Purchase Agreement with such changes, revisions or alterations therefor as may be approved by the officer executing the same after consultation with the City’s Acting Corporation Counsel and/or bond Counsel, such approval to be conclusively evidenced by the execution thereof.
Section 7. The distribution and, if necessary, the re-distribution, by the City of a Preliminary Official Statement, a Preliminary Limited Offering Memorandum or a Preliminary Private Placement Memorandum pertaining to the Bonds, in the form approved by the Chief Financial Officer of the City, and the use of an Official Statement, a Limited Offering Memorandum or a Private Placement Memorandum in substantially the form of the Preliminary Official Statement, the Preliminary Limited Offering Memorandum Preliminary or the Private Placement Memorandum, is hereby authorized and approved. The Authorized Officers are each hereby authorized and directed to execute and deliver to the purchaser of the Bonds the final Official Statement, Limited Offering Memorandum or Private Placement Memorandum with such changes as the City’s bond counsel may advise and the officer executing the same may approve, such approval to be evidenced by such officer’s execution thereof. The Chief Financial Officer is hereby authorized to deem final the Preliminary Official Statement, Preliminary Limited Offering Memorandum or Preliminary Private Placement Memorandum for purposes of Rule 15c2-12 of the Securities and Exchange Commission.
Section 8. The Authorized Officers are hereby designated, authorized and directed to execute and deliver any and all Bond Documents and perform or determine any other matters or details relating to the Bonds, to do or perform or cause to be done or performed any and all acts as such officers or the City’s Acting Corporation Counsel and/or Bond Counsel may deem necessary or appropriate in order to effect the proper issuance, execution and delivery of the Bonds.
Section 9. This resolution shall take effect immediately.
STATEMENT
Resolution providing for the issuance of Redevelopment Area Bonds (Newark Warehouse Urban Renewal, LLC Project, Series 2017A) in an amount not to exceed $1,000,000.00, for the purposes of financing the costs of the Project (the rehabilitation of the existing six (6) story vacant structure on the property, commonly known as 98-126 Edison Place, Newark, New Jersey, into a seven (7) story building containing office, retail and general commercial uses) and providing the form, maturity and other details of said bonds.
EXHIBIT A-1
MASTER TRUST INDENTURE
EXHIBIT A-2
FIRST SUPPLEMENTAL TRUST INDENTURE
EXHIBIT B
PLEDGE AND ASSIGNMENT AGREEMENT
EXHIBIT C
BOND PURCHASE AGREEMENT