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AN ORDINANCE AMENDING 6PSF-C ADOPTED ON SEPTEMBER 9, 2020, A LEASE AGREEMENT WITH EL SID PROPERTIES, LLC, FOR THE PURPOSE OF UPDATING AND AMENDING RECITALS AND DEFINED TERMS OF THE ORIGINAL LEASE AGREEMENT, SETTING FAIR MARKET RENT, SETTLING PAST DUE BASE RENT AND REIMBURSEMENT OF OTHER CHARGES, AND SETTING FORTH BASIC RENT FOR YEARS (5) THROUGH (20) AND OTHER COMMON TERMS AND CONDITIONS.
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WHEREAS, El SID Properties, LLC (the “Landlord”) and the City of Newark (the “Tenant”) entered into certain Lease Agreement effective as of August 6, 2020 (the “Lease”) pursuant to which Tenant leases certain premises located at and known as 704-738 Doremus Avenue, City of Newark, Essex County, New Jersey 07105, as more particularly defined in the Lease (the “Premises”) for a term of twenty (20) years from the Commencement Date (the “Term”); and
WHEREAS, Landlord acquired title to the Premises by a deed delivered by the City dated July 29, 2020 that was recorded by the Essex County Register of Deeds and Mortgages on August 6, 2020; and
WHEREAS, Landlord constructed a new Firing Range on the Premises substantially in accordance with the City’s specifications as required by the Lease, and the Department of Public Safety, Police Division deemed the Firing Range fully operational, no later than August 6, 2020; and
WHEREAS, the Tenant acknowledges that the City began using the Premises as early as August 6, 2020, and the Parties accept this date as the date that triggers the three (3) year Rent Abatement Period; and
WHEREAS, the Parties agree that the Certificate of Occupancy for the Premises was not issued until August 31, 2023; and
WHEREAS, based on Landlord’s satisfaction of the conditions set forth in Section 2 of the Lease, the Commencement Date of the Term was August 6, 2020, and the three (3) year Rent Abatement Period expired on August 5, 2023; and
WHEREAS, a Subdivision of the Premises was completed when the Deed of Minor Subdivision for the Leased Premises was recorded with the Essex County Register of Deeds and Mortgages on May 31, 2023; and
WHEREAS, since the Subdivision was completed, the City has failed to pay the taxes assessed against the Premises (the “Taxes”) despite its obligation to pay the Taxes directly to the City pursuant to Section 4 of the Lease, which shall continue to accrue until the City ceases sending tax bills to Landlord; and
WHEREAS, the City has failed to arrange for the water and sewerage utilities (the “Utilities”) to be charged directly to it since August 2020, and Landlord has been compelled to pay Utilities charges from August 2020 to July 2024, which shall continue to accrue until the City arranges for two (2) the Utilities to be charged directly to it; and
WHEREAS, commencing as of the expiration of the Rent Abatement Period, Tenant is obligated to pay Basic Rent to Landlord for the duration of the Basic Rent Period; and
WHEREAS, Basic Rent for the first year of the Basic Rent Period was calculated as the Fair Market Rent, and the Lease provided a mechanism for the Parties to reach agreement on Fair Market Rent; and
WHEREAS, the Parties engaged in discussions regarding the determination of Fair Market Rent, resulting in the Parties’ agreement to the amount of the Fair Market Rent for the first year of the Basic Rent Period as set forth in this First Amendment; and
WHEREAS, pursuant to Section 3 of the Lease, after the end of the first year of the Basic Rent Period, Basic Rent shall increase by two and one-half percent (2.5%) per annum for each year during the Basic Rent Period.
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, the Business Administrator, is authorized to enter into, execute and deliver a Lease Amendment in a form substantially similar to the Lease Amendment attached hereto, on behalf of the City of Newark as Tenant, with EL SID Properties, LLC, as Landlord, updating and amending recitals and defined terms of original lease agreement, setting fair market rent, settling past due base rent and reimbursement of other charges, setting forth basic rent for years (5) five through (20) twenty and other common terms and conditions as set forth therein.
2. The Mayor of the City of Newark and/or his designee, the Business Administrator, is hereby authorized to enter into, execute and deliver any and all documents and certificates necessary or convenient in connection with the transactions authorized herein.
3. The City is authorized to execute the Lease Amendment pursuant to the Local Lands and Buildings Law, N.J.S.A. 40A:12-5 et seq., and Ordinance 6PSF-c adopted on September 2, 2020.
4. Both the Landlord and City, as Tenant, shall be responsible for the enforcement and compliance with the covenants and conditions of the Lease as amended.
5. A copy of both the fully executed Lease, Ordinance authorizing the execution of the Lease, the Lease Amendment and this Ordinance shall be permanently filed in the Office of the City Clerk.
6. Any ordinances inconsistent with this Ordinance are hereby repealed to the extent of such inconsistency.
7. If any provision of this Ordinance is deemed unlawful by a court and is found to be contrary to law by a court of competent jurisdiction, such provision shall be of no force or effect; but the remainder of this Ordinance shall continue in full force and effect.
8. This Ordinance shall take effect upon final passage and publication in accordance with the laws of the State of New Jersey.
STATEMENT
This Ordinance authorizes the Mayor of the City of Newark and/or his designee, the Business Administrator, to enter into and execute a Lease Amendment updating and amending recitals and defined terms of original lease agreement, setting fair market rent, settling past due base rent and reimbursement of other charges, setting forth basic rent for years (5) five through (20) twenty, and other common terms and conditions as set forth therein.