Title
Dept/Agency: Economic and Housing Development
Action: ( ) Ratifying (X) Authorizing (X) Amending
Type of Service: Federal HUD HOME Loan
Purpose: A Resolution authorizing a reduction in the number of subsidized and designated HOME Assisted Units and the execution of a First Amendment to the Deed Restrictive Affordable Housing Agreement with Washington Bay Group 1, LLC in connection with the construction of five (5) new two-family homes offered for sale consisting of a total of ten (10) three-bedroom residential rental units upon five (5) parcels of real property located at 719 South 11th Street (Block 2631, Lot 5), 721 South 11th Street (Block 2631, Lot 6), 723 South 11th Street (Block 2631, Lot 53), 725 South 11th Street (Block 2631, Lot 7), and 716-718 South 12th Street (Block 2631, Lot 2631) ( Ward) of the Tax Map of the City of Newark, County of Essex, State of New Jersey 07108.
Entity Name: Washington Bay Group 1 LLC
Entity Address: 811 Clinton Avenue, Newark, New Jersey 07108
Grant Amount: $550,000.00
Funding Source: Federal HUD HOME loan
Contract Period: Agreement shall be for a period of twenty (20) years from the date when a certificate of occupancy has been issued by the City and the first low income eligible homebuyer occupies the HOME Assisted Units.
Contract Basis: ( ) Bid ( ) State Vendor ( ) Prof. Ser. ( ) EUS
( ) Fair & Open ( ) No Reportable Contributions ( ) RFP ( ) RFQ
( ) Private Sale (X) Grant ( ) Sub-recipient ( ) n/a
List of Property: (if applicable)
(Address/Block/Lot/Ward)
719 South 11th Street/Block 2631/Lot 5/South Ward
721 South 11th Street/Block 2631/Lot 6/South Ward
723 South 11th Street/Block 2631/Lot 53/South Ward
725 South 11th Street/Block 2631/Lot 7/South Ward
716-718 South 12th Street/Block 2631/Lot 2631/South Ward
Additional Information:
body
WHEREAS, pursuant to Resolution 24-1597, adopted on December 18, 2024, the City of Newark, New Jersey (the “City”), approved of the City’s entering into of a Deed Restrictive Affordable Housing Agreement with Washington Bay Group 1 LLC, a New Jersey limited liability company (the “Redeveloper”), 811 Clinton Avenue, Newark, New Jersey 07108, which provided the Redeveloper with Federal HOME program funds in the form of a deferred loan for a period of twenty (20) years pursuant to the HOME Program (24 CFR part 92) and any amendments thereto; and
WHEREAS, the City entered into, executed and delivered a HOME Program Deed Restrictive Affordable Housing Agreement (the “AHA”) with the Entity, dated as of January 21, 2025, and recorded on December 2, 2025, as instrument number 2025074495, for the redevelopment of the real property located at 719 South 11th Street (Block 2631, Lot 5), 721 South 11th Street (Block 2631, Lot 6), 723 South 11th Street (Block 2631, Lot 53), 725 South 11th Street (Block 2631, Lot 7), and 716-718 South 12th Street (Block 2631, Lot 2631) (South Ward) of the Tax Map of the City of Newark, County of Essex, State of New Jersey 07108 (collectively, the “Property”); and
WHEREAS, the HOME Agreement was for the loan amount of Five Hundred Fifty Thousand Dollars and Zero Cents ($550,000.00) in Federal HUD HOME program funds for the Project (the “HOME Loan”); and
WHEREAS, the Redeveloper has constructed five (5) new two-family homes consisting of a total of ten (10) three-bedroom residential rental units (the “Project”) upon the Property, which Project shall be a part of the City’s First Amendment to the South Ward Redevelopment Plan, adopted on September 21, 2005, by Ordinance 6S+Fe(s), as amended to date (the “Redevelopment Plan”); and
WHEREAS, the City had determined and the Redeveloper had agreed that: (i) five (5) owner-occupied housing units constructed for the Project shall be subsidized with HOME Funds and designated as HOME Program deed-restricted affordable housing units offered for sale to single family households earning 51% to 80% or less of Area Median Income, as determined using the standards set by the Department of Housing and Urban Development (“HUD”) from time to time for the HOME Program (“AMI”) (collectively, the “HOME Assisted Units”), and (ii) the remaining five (5) housing units constructed for the Project will not be subsidized with HOME Funds and may be market rate rental units not subject to the HOME Program rental requirements set forth in 24 C.F.R. §92.252 (see 24 C.F.R. §92.254(a)(ii)(6), HUD HOMEfires, Volume 1, No. 2 (July 1, 1997), and CPD Notice 16-15 (August 25, 2016)); and
WHEREAS, as a result of various unforeseen market and other economic factors beyond the control of the Redeveloper, and to ensure that the Redeveloper is able to sell the HOME Assisted Units to qualified single family households, the Redeveloper has requested and the City has agreed to amend and modify the AHA to reduce the number of HOME Assisted Units to be constructed and designated for the Project from five (5) owner-occupied HOME Assisted Units to three (3) owner-occupied HOME Assisted Units to be sold to and occupied by single family households earning 51-80% or less of AMI.
NOW, THEREFORE BE IT ORDAINED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Mayor, and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development, is hereby authorized to enter into, execute, and deliver the First Amendment to the HOME Deed Restricted Affordable Housing Agreement (the “First Amendment”), annexed hereto, with the Redeveloper. The First Amendment modifies the HOME Agreement to reduce the number of HOME Assisted Units from five (5) owner-occupied units to three (3) owner-occupied units, which shall be sold to and occupied by single family households with annual incomes earning 51% to 80% or less of the AMI, as determined using the standards set by HUD the for the HOME Program. The HOME Loan amount shall be proportionally reallocated among the three (3) HOME Assisted Units.
2. The Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized, directed and empowered to take any and all such further action to ensure that the Project continues to remain affordable for a period of twenty (20) years. Said covenants, conditions and restrictions shall continue to run with the land and bind the Redeveloper and any subsequent purchasers and owners, their heirs, executors, administrators and assigns and all persons claiming by, through or under their heirs, executors, administrators and assigns with the HOME Agreement, as amended hereby, for a period of twenty (20) years.
3. The HOME Agreement and the First Amendment given by the Redeveloper in favor of the City and all other documents and/or agreements executed by the Redeveloper in connection with the HOME Agreement and the Project shall continue to ensure compliance with all of the requirements of the HOME program, pursuant to the HOME program statue and regulations (24 CFR Part 92).
4. The Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized, directed and empowered to effectuate all such business terms and conditions related to the HOME Agreement, as amended hereby and annexed hereto, which Redeveloper granted to the City to secure its obligations under the HOME Agreement, as permitted by New Jersey Law and may enter into any other relevant documents related to these matters in a form subject to the approval of the Corporation Counsel.
5. Pursuant to Section 2(d) of the HOME Agreement, the Project will remain affordable for twenty (20) years from issuance of the Certificate of Occupancy and initial tenant lease up.
6. The Redeveloper must continue to remain in full compliance with municipal, State and Federal laws Including, but not limited to the City of Newark's Minority Set-Aside Ordinance (6S&Fd April 5, 1995) and its Affirmative Action Plan (7RbpMarch 1, 1995) and Federal Executive Order 11246 (as amended by Executive Orders 1137 and 12086) with respect to the award of goods and services. The Redeveloper has agreed to ensure that a minimum of 40% of the workers employed during the construction of the project shall be Newark residents and that 30% of all contractors, subcontractors and suppliers shall be Newark companies.
7. The Deputy Mayor/Director of the Department of Economic and Housing Development shall place on file with the City Clerk’s Office a final executed copy of the First Amendment to the HOME Agreement.
STATEMENT
This Resolution authorizes the Mayor and/or his designee, or the Deputy Mayor/Director of the Department of Economic and Housing Development to enter into, execute and deliver on behalf of the City the First Amendment to the HOME Deed Restricted Affordable Housing Agreement annexed hereto with Washington Bay Group 1 LLC, 811 Clinton Avenue, Newark, New Jersey 07108, in connection with the development of the Property and construction of the Project.