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AN ORDINANCE GRANTING A TWENTY-FIVE (25) YEAR LONG TERM TAX ABATEMENT TO SUMMER AVENUE APARTMENTS URBAN RENEWAL, LLC, 4 LIBELLA COURT, NEWARK, NEW JERSEY 07105, FOR A PROJECT LOCATED IN THE NORTH WARD AT 828-832 SUMMER AVENUE, NEWARK, NEW JERSEY 07104 AND IDENTIFIED ON THE CITY'S TAX MAP AS BLOCK 815, LOT 12 (THE "PROPERTY"), TO CONSTRUCT A NEW FIVE (5) STORY MULTIFAMILY RESIDENTIAL BUILDING CONTAINING TWENTY-NINE (29) RESIDENTIAL RENTAL UNITS, CONSISTING OF TWENTY-THREE (23) MARKET-RATE UNITS AND SIX (6) INCOME-RESTRICTED UNITS, TOGETHER WITH SEVENTEEN (17) RENTAL PARKING SPACES, BICYCLE STORAGE FOR APPROXIMATELY THIRTY-TWO (32) BICYCLES, A FITNESS ROOM, A COMMUNITY ROOM/LOUNGE, AND A ROOFTOP DECK INCORPORATING A GREEN ROOF SYSTEM (THE "PROJECT") (NORTH WARD).
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WHEREAS, Summer Avenue Apartments Urban Renewal, LLC, 4 Libella Court, Newark, New Jersey 07105 (the “Entity”), filed an application with the Mayor seeking a long-term tax abatement under the Long Term Tax Exemption Law, N.J.S.A. 40A:20-1 et seq., for a twenty-five (25) year term for a project to construct a new five (5) story multifamily residential building containing twenty-nine (29) residential rental units, consisting of twenty-three (23) market-rate residential rental units, comprised of sixteen (16) one-bedroom units and seven (7) two-bedroom units (collectively, the "Market-Rate Units"); six (6) affordable housing rental units, of which one (1) studio unit and one (1) two-bedroom unit shall be restricted to tenants at 40% of Area Median Income ("AMI"), one (1) studio unit and one (1) one-bedroom unit shall be restricted to tenants at 60% of AMI, and one (1) one-bedroom unit and one (1) two-bedroom unit shall be restricted to tenants at 80% of AMI (collectively, the "Income-Restricted Units"); seventeen (17) rental parking spaces; bicycle storage for approximately thirty-two (32) bicycles; a fitness room; a community room/lounge; and a rooftop deck incorporating a green roof system (collectively, the "Project"), located in the North Ward at 828-832 Summer Avenue, Newark, New Jersey 07104 and identified on the City’s tax map as Block 815, Lot 12 (the “Property”); 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 Department of Economic and Housing Development has determined pursuant to N.J.S.A. 40A:20-11 that the relative benefits of the Project outweigh any costs associated with the tax exemption and that, without the tax abatement granted herein, the Project would not be undertaken; and
NOW, THEREFORE, BE IT ORDAINED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The application of the Entity for the development, maintenance, and operation of the Project described in the application is hereby approved in accordance with the recommendation of the Mayor. The Project shall be located at the Property and shall consist of a project to construct a new five (5) story multifamily residential building containing twenty-nine (29) residential rental units, consisting of twenty-three (23) market-rate residential rental units, comprised of sixteen (16) one-bedroom units and seven (7) two-bedroom units (collectively, the "Market-Rate Units"); six (6) affordable housing rental units, of which one (1) studio unit and one (1) two-bedroom unit shall be restricted to tenants at 40% of Area Median Income ("AMI"), one (1) studio unit and one (1) one-bedroom unit shall be restricted to tenants at 60% of AMI, and one (1) one-bedroom unit and one (1) two-bedroom unit shall be restricted to tenants at 80% of AMI (collectively, the "Income-Restricted Units"); seventeen (17) rental parking spaces; bicycle storage for approximately thirty-two (32) bicycles; a fitness room; a community room/lounge; and a rooftop deck incorporating a green roof system (collectively, the "Project").
2. The abatement from taxation on improvements is hereby granted to the Entity for a period of twenty-five (25) years pursuant to N.J.S.A. 40A:20-12, and only so long as the Entity is subject to and complies with the proposed Financial Agreement and the Long Term Tax Exemption Law, as amended and supplemented.
3. The Mayor of the City of Newark is hereby authorized to execute, on behalf of the City, the Financial Agreement in the form attached hereto.
4. The Deputy Mayor/Director of the Department of Economic and Housing Development shall file an executed copy of the Financial Agreement authorized by this ordinance in the Office of the City Clerk.
5. The Project, when completed, shall conform with all applicable State laws and ordinances of the City of Newark relating to its construction and use. The Entity shall commence and complete the Project in accordance with the Financial Agreement, including completion within twenty-four (24) months after the effective date of the Financial Agreement, subject to any extensions authorized thereunder.
6. 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 ordinance.
7. 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.
8. 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.
9. The Annual Service Charge shall be based upon the greater of the Minimum Annual Service Charge or the amounts calculated under the Financial Agreement, including: (a) 7.5% of Annual Gross Revenue from the Income-Restricted Units, subject to the alternative rate stated in the Financial Agreement if the 7.5% calculation is held invalid or unenforceable; (b) the applicable 10% to 12% of Annual Gross Revenue from the Market-Rate Units as set forth in the Financial Agreement; and (c) 15% of Annual Gross Revenue from all other components of the Project, including parking.
10. The Entity shall pay the Minimum Annual Service Charge, calculated pursuant to N.J.S.A. 40A:20-12(b)(2) and the Financial Agreement, in each year in which the otherwise-calculated Annual Service Charge would be less than the Minimum Annual Service Charge.
11. 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) Except as expressly permitted by the Financial Agreement, the Entity shall not, without the prior consent of the Municipal Council of the City of Newark, 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 shall concomitantly, with the submission of the annual report required of it by N.J.S.A. 40A:20-9(d), attach an employment report under oath, with particulars, stating the manner and the extent to which it has complied with paragraph 8 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;
(c) The Entity shall pay all outstanding taxes and all outstanding water and sewer charges within thirty (30) days of the adoption of this ordinance;
(d) The Entity shall submit to the City a copy of its formation documents, as approved by the Department of Community Affairs and filed with the Secretary of State;
(e) The Entity shall receive a favorable review and certification from the appropriate City departments and agencies, pursuant to City Ordinance 6S&Fd, adopted October 21, 1992, as amended.
12. That in any year that the Entity shall fail to make four (4) consecutive land tax payments when due and owing in the manner defined in N.J.S.A. 40A:20-12(b)(2)(e), such delinquency shall render the Entity ineligible for any land tax credits against the annual service charge.
13. 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.
14. The Deputy Mayor/Director of the Department of Economic and Housing Development (the “Director”) is authorized, as part of this Ordinance 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 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 Ordinance 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 Director and, if required, the City’s Outside Legal Counsel.
The City reserves all rights, remedies, defenses, and protections under this Ordinance, 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.
15. To the extent of any inconsistency with any prior City ordinance 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 ordinances and/or Municipal Code provisions are hereby waived, but only with respect to this ordinance.
16. Within ten (10) calendar days following the later of the effective date of this Ordinance or the execution of the Financial Agreement by the Entity, the City Clerk's Office shall transmit a certified copy of the Ordinance and Financial Agreement to the Chief Financial Officer of the County and County Counsel for informational purposes.
17. This ordinance shall take effect upon final passage and publication in accordance with the laws of the State of New Jersey.
STATEMENT
This ordinance grants a long-term tax abatement to Summer Avenue Apartments Urban Renewal, LLC, 4 Libella Court, Newark, New Jersey 07105, pursuant to the Long Term Tax Exemption Law, N.J.S.A. 40A:20-1 et seq., for the Project located in the North Ward at 828-832 Summer Avenue, Newark, New Jersey 07104 and identified on the City’s tax map as Block 815, Lot 12. The Project consists of a new five (5) story multifamily residential building containing twenty-nine (29) residential rental units, including twenty-three (23) Market-Rate Units and six (6) Income-Restricted Units, together with seventeen (17) rental parking spaces, bicycle storage, a fitness room, a community room/lounge, and a rooftop deck incorporating a green roof system. The exemption term is governed by the Financial Agreement and shall end upon the earliest applicable termination date stated therein. (North Ward).