Title
Dept/ Agency: Economic and Housing Development
Action: ( ) Ratifying ( x ) Authorizing ( x ) Amending
Type of Service: Redevelopment Agreement
Purpose: Authorize Execution of First Amendment of the Agreement for the Sale and Redevelopment of Land between the City of Newark and 760 Clinton Ave Shoho, LLC
Entity Name: 760 Clinton Ave Shoho, LLC
Entity Address: 1037 Route 46 East, Suite 101, Clifton, New Jersey 07013
Contract Amount: N/A
Funding Source:
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:
(Address/Block/Lot/Ward)
760-766 Clinton Avenue/Block 3042/Lot 1/Additional Lot 5/South Ward
Additional Information:
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WHEREAS, the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1, et seq., as amended and supplemented (the “Redevelopment Law”), provides a process for municipalities to participate in the redevelopment and improvement of areas in need of redevelopment; and
WHEREAS, pursuant to N.J.S.A. § 40A: 12A-8(f), the City of Newark (the “City”) is authorized to arrange or contract with redevelopers for the planning, replanning, construction or undertaking of any redevelopment project; and
WHEREAS, pursuant to N.J.S.A. § 40A:12A-8(g), the City may "convey property…without public bidding and at such prices and upon such terms as it deems reasonable”; and
WHEREAS, in order to stimulate the reinvigoration of the City, by Resolution 7RDO(AS) adopted by the Municipal Council on June 15, 2005, the entire City of Newark was designated as an area in need of rehabilitation pursuant to the Redevelopment Law; and
WHEREAS, the Municipal Council thereafter adopted Ordinance 6S&Fd on August 17, 2005, adopting the “Third Amendment to the South Ward Redevelopment Plan and Feasibility of Relocation for Various City-owned Parcels through the entire South Ward” governing the redevelopment of City-owned properties located within the South Ward (“Redevelopment Plan”), which includes the City-owned properties commonly known as 760-766 Clinton Avenue, Newark, New Jersey, and identified on the Tax Maps of the City of Newark as Block 3042, Lots 1 and 5 (South Ward), respectively (the "Property"); and
WHEREAS, the City previously determined that the Property was no longer needed for any public use and that redevelopment of the Property to construct twenty-four (24) residential units and three (3) retail spaces (the “Project”) would contribute to the reinvigoration of the City; and
WHEREAS, 760 Clinton Ave Shoho, LLC (the “Redeveloper”) has expressed an interest in redeveloping the Property by undertaking of any required environmental remediation and constructing the Project and for such other purposes consistent with the Redevelopment Plan and as may be approved by the City; and
WHEREAS, the City obtained an appraisal report for the Property, which estimated the value of the Property to be Two Hundred Fifteen Thousand Dollars and Zero Cents ($215,000.00); and
WHEREAS, the Redeveloper has agreed to incur all costs related to the remediation of the Property and the City has determined that Seventy-One Thousand Three Hundred Forty-Four Dollars and Zero Cents ($71,344.00) is an appropriate and reasonable purchase price for the Property for the rehabilitation of the Property in accordance with the Act, the Redevelopment Plan and the Project (the “Purchase Price”); and
WHEREAS, the City determined that the Redeveloper possess the proper qualifications, financial resources, and capacity to implement and complete the rehabilitation of the Property in accordance with the Redevelopment Plan and all other applicable laws, ordinances and regulations; and
WHEREAS, on April 4, 2018 by way of Resolution 7R2-k (AS), the City authorized the sale of Block 3042, Lots 1 and 5 to the Redeveloper and the execution of an Agreement for the Sale of Land and Redevelopment to memorialize the terms and conditions of the sale and redevelopment of the Property and construction of the Project (the “Original Redevelopment Agreement”); and
WHEREAS, on June 21, 2018, the City and Redeveloper fully executed the Original Redevelopment Agreement; and
WHEREAS, the Project encountered a substantial setback when the COVID-19 pandemic struck, which resulted in setbacks and delays under the Original Redevelopment Agreement; and
WHEREAS, as a result of the COVID-19 pandemic, Redeveloper engaged Newark Forward, LLC, an investment firm, to expedite and revitalize the Project; and
WHEREAS, Redeveloper and Newark Forward, LLC have negotiated and agreed upon a payoff amount and Redeveloper is working with a new lender to fund the costs of completing the Project; and
WHEREAS, Redeveloper wishes to develop the Property and is seeking an extension of time to complete the Project; and
WHEREAS, the parties now desire to enter into this First Amended Redevelopment Agreement (“First Amendment”) to supersede any previous Agreement(s) or conditions related to the redevelopment of the Property and to amend the Project Schedule as set forth herein, subject to the following terms:
1. Redeveloper shall discharge the existing debt and mortgages held by Newark Forward, LLC on the Property and provide proof of same; and
2. Redeveloper executes the Funding Agreement, a copy of which is enclosed, and posts escrow in the amount of $10,000.00 pursuant to the terms of the Funding Agreement; and
3. Redeveloper shall have 18 to 24 months from Planning Board approval to complete the Project.
WHEREAS, the City finds that there is good cause to extend all Project Deadlines pursuant to the schedule affixed to the First Amendment of the Agreement for the Sale and Redevelopment of Land by and Between the City of Newark and 760 Clinton Ave Shoho, LLC (the “Amended Agreement”), a copy of which is enclosed herewith in a form substantially consistent with Exhibit A; and
WHEREAS, Redeveloper acknowledges that should it fail to meet any of the deadlines contained in the Amended Agreement, the City will exercise its reversionary rights to the Property pursuant to Article V, Section 3 of the Original Redevelopment Agreement, without any further notice to Redeveloper, absent the notice requirements for service of process under the New Jersey Court Rules; and
WHEREAS, the Parties have engaged in negotiations relative to the Project and Project Deadlines, and the City has determined that in furtherance of the goals and objectives of the Redevelopment Plan, it is in the City’s best interest to enter into the Amended Agreement with 760 Clinton Ave Shoho, LLC; and
WHEREAS, the City previously determined that Redeveloper possesses the proper qualifications, financial resources, and capacity to implement and complete the rehabilitation of the Property in accordance with the Redevelopment Plan, and all other applicable laws, ordinances and regulations; and
WHEREAS, the City and Redeveloper desire to enter into Amended Agreement in order to memorialize the terms and conditions of the redevelopment of the Property; and
WHEREAS, the Amended Agreement shall supersede any previous agreement(s) or conditions related to the redevelopment of the Property.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Mayor and/or the Deputy Mayor/Director of the Department of Economic and Housing Development of the City, or either of them, hereby: authorize the Mayor and/or Deputy Mayor/Director of the Department of Economic and Housing Development to enter into the First Amendment of the Agreement for the Sale and Redevelopment of Land by and Between the City of Newark and 760 Clinton Ave Shoho, LLC (the “Amended Agreement), in substantially the form attached hereto as Exhibit A.
2. The Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to effectuate certain business terms and conditions related to the Amended Agreement and may enter into any related documents which may be necessary in order to effectuate the Amended Agreement.
3. The executed Amended Agreement shall be placed on file in the Office of the City Clerk by the Deputy Mayor/Director of Department of Economic and Housing Development.
4. The Deputy Mayor/Director of Department of Economic and Housing Development is authorized to enter into a maximum of two (2) six (6) month extensions of any timeframe set forth in the Agreement, subject to full written disclosure of such extension(s) (in the form of a signed Memorandum to be submitted to the Office of the City Clerk prior to adoption) to the Municipal Council of the City of Newark by the Deputy Mayor/Director of the Department of Economic and Housing Development and the approval of the City of Newark’s Corporation Counsel.
5. The Redeveloper shall have thirty (30) days from the date this resolution is certified by the Office of the City Clerk to execute the attached Amended Agreement for the Sale and Redevelopment of Land and return same to the Department of Economic Housing Development. Should the Redeveloper fail to execute and return the attached Amended Agreement within this thirty (30) day time period, the authorization provided by this resolution shall be null and void, unless the Acting Deputy Mayor/Director of Department of Economic and Housing Development agrees in writing to extend this thirty (30) day period.
STATEMENT
This resolution authorizes the Mayor and/or his designee, the Director of the Department of Economic and Housing Development, on behalf of the City of Newark, to enter into an amended redevelopment agreement with 760 Clinton Ave Shoho, LLC, with an address of 1037 Route 46 East, Suite 101, Clifton, New Jersey 07013 for the redevelopment of the property identified on the City of Newark Tax Map Block 3042, Lots 1 and 5 in order to permit them addition time to complete their development.