Title
Dept/ Agency: Economic & Housing Development
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Type of Service: Transfer and Assumption Application for Long-Term Tax Abatement Financial Agreement.
Purpose: Assignment and Assumption of Long Term Tax Abatement from 1180 Astro Urban Renewal Investors, LLC to 1180 Raymond Urban Renewal, LLC.
Entity Name: 1180 Raymond Urban Renewal, LLC
Entity Address: c/o KBS Realty Advisors, LLC; 620 Newport Center Drive, Suite 1300, Newport Beach, California 92660
Abatement Period: 30 years (started in 2005)
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)
1180 Raymond Boulevard/Block 144/ Lot 9/Central Ward
Additional Information:
Ordinance 6PHS&FD March 2, 2005, approved a 30-year Tax Abatement and the Issuance of Redevelopment Area Bonds for the Redevelopment Project.
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WHEREAS, on May 3, 2005, the Municipal Council of the City of Newark (the "Municipal Council") adopted Ordinance 6PHS&FD granting a thirty (30) year tax abatement to 1180 Astro Urban Renewal Investors LLC ("1180 Astro") under the Long Term Tax Exemption Law, N.J.S.A. 40A:20-1 et seq. (the "LTTE") for a redevelopment project on property located at 1180 Raymond Boulevard, Newark, New Jersey and identified on the City's official tax map as Block 144, Lot 9 (the "Property") and authorizing the issuance of redevelopment area bonds for the project; and
WHEREAS, the City subsequently entered into a Financial Agreement with 1180 Astro dated December 23, 2005 and recorded with the Essex County Register's Office on February 16, 2006 in Book 6298 at Page 661 governing the tax abatement on the Property (the "Financial Agreement") and recorded a Declaration of Restrictions against the Property dated December 23, 2005 and recorded with the Essex County Register's Office on February 15, 2006 in Book 6298, Page 721 providing that "[a]ny sale or other conveyance of the Property during the term of the Financial Agreement not made to a duly appointed urban renewal entity shall be void ab initio"; and
WHEREAS, the Financial Agreement provided, in Section 9.01, that 1180 Astro could file a written application seeking City consent for the sale of the project and the transfer of the Financial Agreement to another urban renewal entity; and
WHEREAS, 1180 Astro accepted the redevelopment area bonds issued on behalf of the City and constructed the redevelopment project on the Property; and
WHEREAS, in or about April of 2009, U.S. Bank National Association, as Trustee for the registered holders of the Maiden Lane Commercial Mortgage-Backed Securities Trust 2008-1 ("U.S. Bank"), the holder of a mortgage on the Property, filed a Complaint in foreclosure entitled U.S. Bank National Association, as Trustee for the registered holders of the Maiden Lane Commercial Mortgage-Backed Securities Trust 2008-1 v. 1180 Astro Urban Renewal Investors LLC et als., Docket No. F-10765-09 (the "Foreclosure Action") seeking a final judgment of foreclosure on the Property; and
WHEREAS, the City appeared and participated in the Foreclosure Action in order to ensure that any conveyance of the Property through the foreclosure process was to an urban renewal entity and was subject to City consent to the transfer of the Financial Agreement to that urban renewal entity; and
WHEREAS, on May 29, 2013, the Honorable Walter Koprowski, Jr., J.S.C. executed a Consent Order imposing certain conditions upon the sale of the Property (the "Consent Order"), one of which was the receipt of City consent to the sale of the Property and of the transfer of the Financial Agreement to another urban renewal entity; and
WHEREAS, 1180 Raymond Urban Renewal, LLC ("1180 Raymond"), an urban renewal entity created in accordance with the provisions of the LTTE, subsequently purchased the mortgage on the Property from U.S. Bank and substituted into the Foreclosure Action as a party plaintiff; and
WHEREAS, on June 5, 2013, an Order of Final Judgment in Foreclosure was entered in the Foreclosure Action authorizing the sale of the Property through sheriff's sale, subject to the conditions placed upon that sale within the Consent Order; and
WHEREAS, 1180 Raymond recently purchased the Property at the sheriff's sale; and
WHEREAS, 1180 Raymond filed an application with the City seeking City consent, pursuant to Section 9.01 of the Financial Agreement, to the sale of the project and the transfer of the Financial Agreement to 1180 Raymond; and
WHEREAS, 1180 Raymond also submitted an Agreement to Assume Financial Agreement (the "Assumption Agreement") in which it agreed to assume all of the rights, obligations and liabilities of 1180 Astro under the Financial Agreement arising from and after the Effective Date (Execution Date) of that Assumption Agreement; and
WHEREAS, the City has reviewed the application filed by 1180 Raymond seeking City consent to the assignment of the Financial Agreement and has determined that 1180 Raymond is a duly-authorized urban renewal entity that has the capacity and experience to own and operate the project and to assume all of the rights and obligations of 1180 Astro under the Financial Agreement; and
WHEREAS, the Municipal Council wishes to adopt this resolution in order to reflect the City's consent to the sale of the project and of the transfer of the Financial Agreement to 1180 Raymond and to authorize the Mayor to sign an Agreement to Assume Financial Agreement (the "Assumption Agreement") with 1180 Raymond on behalf of the City.
NOW, THEREFORE BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The City of Newark hereby consents to (i) the sale of the commercial project located on real property commonly known as 1180 Raymond Boulevard, Newark, New Jersey and identified on the City's official tax map as Block 144, Lot 9 (the "Property") to 1180 Raymond Urban Renewal, LLC ("1180 Raymond"), and to (ii) the transfer of all of the rights and obligations of the previous owner of the Property (i.e. 1180 Astro Urban Renewal Investors LLC) under the Financial Agreement, authorized by Ordinance 6PHS&FD March 2, 2005, between the City and 1180 Astro Urban Renewal Investors LLC dated December 23, 2005 and recorded with the Essex County Register's Office on February 16, 2006 in Book 6298 at Page 661 to 1180 Raymond.
2. The Municipal Council hereby authorizes the Mayor to execute, on behalf of the City, the Agreement to Assume Financial Agreement (the "Assumption Agreement") with 1180 Raymond in the form attached hereto.
3. The Assumption Agreement, once fully executed, shall be filed by the Acting Deputy Mayor/Director of the Department of Economic and Housing Development with the Office of the City Clerk.
4. This resolution shall take effect immediately.
STATEMENT
This resolution memorializes the City's consent to (i) the sale of the commercial project located on real property commonly known as 1180 Raymond Boulevard, Newark, New Jersey and identified on the City's official tax map as Block 144, Lot 9 (the "Property") to 1180 Raymond Urban Renewal, LLC ("1180 Raymond"), and to (ii) the transfer of all of the rights and obligations of the previous owner of the Property (i.e. 1180 Astro Urban Renewal Investors LLC) under the Financial Agreement, authorized by Ordinance 6PHS&FD March 2, 2005, between the City and 1180 Astro Urban Renewal Investors LLC dated December 23, 2005 and recorded with the Essex County Register's Office on February 16, 2006 in Book 6298 at Page 661 to 1180 Raymond. This resolution also authorizes the Mayor to execute, on behalf of the City, an Agreement to Assume Financial Agreement with 1180 Raymond.