Title
Dept/ Agency: Economic and Housing Development
Action: ( ) Ratifying (X) Authorizing (X) Amending
Type of Service: Private Sale/Redevelopment
Purpose: An Agreement to subordinate the City’s Reverter Rights by entering into a First Amendment to the Agreement for Sale of Land and Redevelopment and a Subordination Agreement in order to permit financing necessary for the redevelopment of eight (8) affordable two-family homes.
Entity Name: Urban League of Essex County Opportunity Corporation
Entity Address: 508 Central Avenue, Newark, New Jersey 07107
Sale Amount: $85,682.00
Cost Basis: ( ) $ PSF ( ) Negotiated (X) N/A ( ) Other:
Assessed Amount: $0.00
Appraised Amount: $0.00
Contract Period: Not Applicable
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)
208-210 Fairmount Avenue/Block 262/Lot 10 and 11/West Ward
172-178 Fairmount Avenue/Block 262/Lot 26, 27, and 28/West Ward
147 Camden Street/Block 262/Lot 35/West Ward
187 Fairmount Avenue/Block 263/Lot 41/West Ward
195 Fairmount Avenue/Block 263/Lot 45/West Ward
Additional Information:
Resolution 7R3-a adopted on January 6, 2016, authorized the Private Sale/Redevelopment Agreement.
A Public Hearing will be held during the Special Meeting/Conference on Tuesday, July 11, 2023 at 10:00 A.M. in the Council Chamber.
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WHEREAS, pursuant to Resolution 7R3-a adopted on January 6, 2016, the Mayor and the Deputy Mayor/Director of the Department of Economic and Housing Development were authorized to enter into and execute an Agreement for the Sale and Redevelopment of Land (the “Redevelopment Agreement”) with Urban League of Essex County, now known as Urban League of Essex County Opportunity Corporation, 508 Central Avenue, Newark, New Jersey 07107 (the “Redeveloper”) for the sale of land owned by the City of Newark (the “City”) located at 147 Camden Street, Newark, New Jersey, 157 Camden Street, Newark, New Jersey, 165 Camden Street, Newark, New Jersey, 172-178 Fairmount Avenue, Newark, New Jersey, 208-210 Fairmount Avenue, Newark, New Jersey, 224 Fairmount Avenue, Newark, New Jersey, 228 Fairmount Avenue, Newark, New Jersey, 187 Fairmount Avenue, Newark, New Jersey, 195 Fairmount Avenue, Newark, New Jersey, 217 Fairmount Avenue, Newark, New Jersey, 219-221 Fairmount Avenue, Newark, New Jersey, 227-229 Fairmount Avenue, Newark, New Jersey, and identified on the official tax map of the City as Block 262, Lots 35, 40, 44, 26, 27, 28, 10, 11, 3,1 and Block 263, Lots 41, 45 69, 58, 61 (collectively the “Properties”) for a purchase price of Eighty-Five Thousand Six Hundred and Eighty Two Dollars and Zero Cents ($85,682.00) for the purpose of developing sixteen (16) two-family or three-family homes (“Project”); and
WHEREAS, the sale and Agreement were authorized pursuant to N.J.S.A. 40A:12A-8(g) and the West Ward Redevelopment Plan; and
WHEREAS, the Agreement allows the City to seek reversion of title to the Properties under certain events of Default as defined in the Redevelopment Agreement (the “Reverter Right”); and
WHEREAS, Redeveloper has secured construction and permanent financing from NCIF New Market Capital Fund 50 CDE, LLC, a Delaware limited liability company, 135 Lasalle, Suite 3025, Chicago, Illinois 60603 (“Lender” and together with the City, the Entity and the Redeveloper, the “Parties”) in the approximate principal amount not to exceed Five Million Eight Hundred Twenty Thousand Dollars and Zero Cents ($5,820,000.00) (the “Loan”), to develop a portion of the Project, eight (8) affordable two-family homes, which Loan will be evidenced by two (2) Promissory Notes and will be secured by a Mortgage on some of the Properties, more specifically, 208-210 Fairmount Avenue, 172-178 Fairmount Avenue, 147 Camden Street, 187 Fairmount Avenue and 195 Fairmount Avenue, Newark, New Jersey and identified on the Official Tax Map of the City of Newark as Block 262, Lots 10, 11, 26, 27, 28 and 35 and Block 263, Lots 41 and 45 (collectively, “Subordinated Properties”) ; and
WHEREAS, as a condition of the above Loan, the Lender has requested that the City subordinate its Reverter Right, within the Redevelopment Agreement and Deeds, to the Mortgage; and
WHEREAS, the Agreement states that the Reverter Right may be subordinated by the City subject to formal approval by the Municipal Council and pursuant to N.J.S.A. 40:60-51.2, which allows a municipality to waive, release, modify or subordinate any terms, covenants, conditions, limitations or reverters imposed in sales and conveyances of lands as to the erection, alteration or demolition of buildings or any other use to be made of land heretofore imposed by said municipality to accomplish the purposes for which such lands were sold and conveyed either at public or private sale including those set forth pursuant to Section 21 of P.L. 1971, c. 199 (C.40A:12-21) but only after public hearing held before such Governing Body, of the holding of which notice describing the lands in question, and the terms, covenants, conditions, limitations or reverters to be waived, released, modified or subordinated, and, if to be modified or subordinated, describing the manner in which the same shall be modified or subordinated, shall first have been given by advertisement published once each week for two weeks in a newspaper published in said municipality or, if no newspaper be published there in, then in a newspaper circulating in such municipality, provided, however, that the power herein granted shall not be exercised to impair any vested or contractual rights of third parties; and
WHEREAS, the Department of Economic and Housing Development caused a notice to be advertised, including the requirements established in N.J.S.A. 40:60-51.2, in the Star Ledger on June 26, 2023 and July 3, 2023, which complies with the notice requirement of once each week for two weeks; and
WHEREAS, the Municipal Council desires to subordinate the City’s Reverter Right contained in the Agreement and the Deed by entering into a First Amended Agreement for the Sale of Land and Redevelopment and a Subordination Agreement so as to accomplish the development of a portion of the Project, development of eight (8) two-family homes.
NOW, THEREFORE, BE IT RESOLVED 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 are hereby authorized to enter into a Subordination Agreement with NCIF New Market Capital Fund 50 CDE, LLC, a Delaware limited liability company, 135 Lasalle, Suite 3025, Chicago, Illinois 60603 (“Lender”) and Urban League of Essex County Opportunity Corporation, 508 Central Avenue, Newark, New Jersey 07107 (“Redeveloper”) in the form attached hereto as it pertains to the properties located at 208-210 Fairmount Avenue, 172-178 Fairmount Avenue, 147 Camden Street, 187 Fairmount Avenue and 195 Fairmount Avenue, Newark, New Jersey and identified on the Official Tax Map of the City of Newark as Block 262, Lots 10, 11, 26, 27, 28 and 35 and Block 263, Lots 41 and 45 (“Subordinated Properties”), which were sold to Redeveloper pursuant to Resolution 7R3-a adopted on January 6, 2016 for the purpose of developing sixteen (16) two-family or three-family homes (“Project”).
2. The Mayor and/or his designee the Deputy Mayor/Director of the Department of Economic and Housing Development are hereby authorized to enter into a First Amended Agreement for the Sale of Land and Redevelopment with the Redeveloper, in the form attached hereto, related to the Subordinated Properties for the development of a portion of the Project, development of eight (8) two-family homes, and to amend the completion date of the Project.
3. All other terms and conditions of the Agreement for the Sale of Land and Redevelopment authorized by and entered into pursuant to Resolution 7R3-a adopted on January 6, 2016, shall remain in full force and effect.
4. The Deputy Mayor/Director of the Department of Economic and Housing Development shall place a filed copy of this Resolution, the fully executed Subordination Agreement, and the First Amended Agreement for the Sale of Land and Redevelopment with the Office of the City Clerk.
STATEMENT
This Resolution authorizes the Mayor and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development to enter into and execute a Subordination Agreement with Urban League of Essex County Opportunity Corporation, 508 Central Avenue, Newark, New Jersey 07107 (“Redeveloper”) and NCIF New Market Capital Fund 50 CDE, LLC, a Delaware limited liability company, 135 Lasalle, Suite 3025, Chicago, Illinois 60603 (“Lender”) and a First Amended Agreement for the Sale of Land and Redevelopment with the Redeveloper, to enable the Redeveloper to obtain financing necessary for the construction of eight (8) affordable two-family homes, which following the completion of the construction shall be marketed and sold to individuals in accordance with certain income and affordability requirements on the properties located at 208-210 Fairmount Avenue, 172-178 Fairmount Avenue, 147 Camden Street, 187 Fairmount Avenue and 195 Fairmount Avenue, Newark, New Jersey and identified on the Official Tax Map of the City of Newark Block 262, Lots 10, 11, 26, 27, 28 and 35 and Block 263, Lots 41 and 45 (“Properties”), which were sold to Redeveloper pursuant to Resolution 7R3-a adopted on January 6, 2016, and amend the completion date of the Project.