Title
Dept/ Agency: Economic & Housing Development
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Purpose: Settlement of Civil Litigation
Docket No.: ESX-L-3465-09
Claimant: Hess Corporation
Claimant's Attorney: Waters, McPherson & McNeill, P.C.
Attorney's Address: 300 Lighting Way, 7th Floor, Secaucus, New Jersey 07094
Settlement Amount: No Municipal funds required of the City
Funding Source:
Additional Comments:
body
WHEREAS, a Settlement Agreement and Mutual Release (the "Agreement") is proposed by and among plaintiff, Hess Corporation ("Hess") and defendant, the City of Newark ("City") and Hess's subsidiary Hess NEC, LLC ("Hess NEC") (Hess, the City, and Hess NEC being referred to collectively as the "Parties") on behalf of themselves and their past, present and future heirs, successors, representatives, assigns, predecessors, subsidiaries, parent organizations, affiliates, employees, agents, officers and directors; and
WHEREAS, Hess instituted an action entitled Hess Corporation v. City of Newark, and the Newark Central Planning Board, Docket No. ESX-L-3465-09 (the "Action"), in which Hess filed a complaint in lieu of prerogative writs against the City and the Newark Central Planning Board ("Planning Board") challenging the validity of Resolution 7R3-c(S1)031009 wherein certain property owned by Hess located within the Port Newark area of the City, at 678-696 Doremus Avenue and identified as Block 5066, Lot 16, on the Tax Map of the City (the "Hess Property") was found to be in an "area in need of redevelopment" pursuant to Section 5 of the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 et seq. (the "LRHL"); and
WHEREAS, in an effort to amicably resolve the Action, the Parties entered into a Memorandum of Understanding ("MOU") dated November 29, 2010 to allow Hess to explore development opportunities on the Hess Property and/or other properties, including other property owned by Hess, so long as the City agreed to refrain from taking any action to acquire the Hess Property through condemnation; and
WHEREAS, the MOU recited that the Parties contemplated that the Hess development opportunities included the construction of modern industrial facilities supporting technology-oriented employment ("Project"), which Project could effectuate the City's long-term redevelopment goals in the Port Newark area; and
WHEREAS, pursuant to the MOU, due to the Project's complexity and capital-intensive nature, regulatory and business contingencies and significant lead time, Hess and the City's Deputy Mayor/Director of Economic and Housing Development of the City ("Deputy Mayor") agreed to meet at regular intervals. Pursuant to the MOU, Hess is required to provide the Deputy Mayor with a report of material events, including, but not limited to the filing of applications for governmental approvals and other significant occurrences with respect to the feasibility of the Project; and
WHEREAS, pursuant to the MOU, the Deputy Mayor agreed to timely respond to requests or suggestions by Hess with respect to manner and means by which the City may provide necessary and convenient assistance for the development of the Project. Such assistance includes, but is not limited to the following: 1) the possible exercise of powers under the LRHL to adopt a redevelopment plan with provisions facilitating the advancement of the Project; 2) the acquisition and/or conveyance of lands, which might reasonably help Hess's improvement of the Hess Property; 3) the entry of financial agreements pursuant to the LRHL; 4) the possible assistance with relocation of land uses displaced or otherwise impacted by the Project; and 5) support of the Project to assist with governmental approvals sought in connection with the Project; and
WHEREAS, pursuant to the MOU, the City agreed not to use its powers under the LRHL to initiate condemnation proceedings to acquire the Hess Property or to contract with another redeveloper to redevelop the Hess Property; and
WHEREAS, pursuant to the MOU, either Party had the right to terminate the MOU; and
WHEREAS, pursuant to the MOU, Hess agreed to dismiss the Action without prejudice; and
WHEREAS, the Parties have proceeded in good faith to comply with the terms of the MOU; and
WHEREAS, in the course of its' meetings with the City and the Deputy Mayor, Hess has identified the Project as the development of the Newark Energy Center ("NEC"), a natural gas-fired electric generating facility to be located on property owned by Hess located at 1111 Delancy Street, Newark, New Jersey 07105, which is identified as Block 5074, Lots 25 and 25.01 on the municipal tax map of the City of Newark; and
WHEREAS, the City and the Central Planning Board acknowledge that the development of the NEC will effectuate the long-term redevelopment goals in the Port Newark area of the City; and
WHEREAS, the Parties acknowledge that the development of the NEC will be facilitated by their continued cooperation, including, but not limited to the following items: 1) entering into an easement agreement allowing Hess to install and maintain certain improvements related to the conveyance/transmission of water, wastewater, natural gas, and electricity within City roadways and the associated conveyance/transmission lines; 2) correcting the City's Urban Enterprise Zone ("UEZ") map to clarify the location of the NEC; 3) the adoption of a redevelopment plan for the NEC; and 4) entering into a financial agreement; and
WHEREAS, the Parties acknowledge that the NEC will be developed by Hess NEC or a different Hess subsidiary, including, but not limited to an urban renewal entity; and
WHEREAS, the Parties wish to fully and finally resolve the Action and their respective obligations under the MOU once and for all, to terminate the MOU, and to have the Action dismissed with prejudice; and
WHEREAS, Hess and Hess NEC, LLC have agreed to provide a total of $7,000,000.00 in Environmental Program Funding for the direct benefit of the City; and
WHEREAS, as part of the Environmental Program Funding, Hess and Hess NEC agree to pay $4,000,000.00 to the Brick City Development Corporation to fund: 1) a Newark Green and Healthy Homes program that will provide comprehensive energy and indoor quality improvements in Newark residential structures; 2) the City's tree planting initiative; 3) air quality monitoring; 4) anti-idling and truck route enforcement; 5) Waterfront Park maintenance and programming; and 6) funding City Sustainability Office staff; and
WHEREAS, as part of the Environmental Program Funding, Hess agrees to spend $3,000,000.00 to fund a boiler replacement program to replace older, less efficient oil burning boilers with cleaner, more efficient gas fired boilers; and
WHEREAS, Hess NEC, LLC agrees to provide $500,000.00 to fund a First Source Job Placement Program that will provide City residents with job training and job placement assistance; and
WHEREAS, Hess NEC, LLC agrees, in order to promote the growth of a City based workforce, to enter into a First Source Agreement with the City whereby Hess NEC, LLC agrees to make documented good faith efforts to hire Newark residents to fill permanent jobs at the Project; and
WHEREAS, Hess NEC, LLC will provide $150,000.00 to support Newark residents entry into the labor workforce to fund a Pre-Apprenticeship Training Program; and
WHEREAS, Hess NEC, LLC will establish a paid internship in the energy and/or technology field for which Newark residents, who are enrolled in a four (4) year college/university or are a recent graduate from a college/university will be given first priority; and
WHEREAS, Hess NEC, LLC agrees to require its general contractor to enter into a Project Labor Agreement with the Essex County Building trades in order to promote continued labor harmony within the City and to ensure the City residents and City based contractors are provided opportunities in connection with the Project's construction; and
WHEREAS, Hess agrees to provide $5,000,000.00 to the City to fund Health and Educational programs for the residents of the City; and
WHEREAS, Hess NEC, LLC has agreed to pay the City $11,000,000.00 in consideration for the easements referred to herein subject to a conditioned upon the passage of an Ordinance by the Municipal Council approving same; and
WHEREAS, $5,000,000.00 of the settlement proceeds are to be held in a dedicated escrow account to fund the reconstruction of Ironbound Stadium.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The recitals previously set forth are incorporated as if set fully forth herein.
2. The Settlement Agreement and Mutual Release is hereby approved in the form attached hereto.
3. The Deputy Mayor of Economic Housing and Development is hereby authorized to take all actions necessary to execute the Settlement Agreement and Mutual Release and satisfy the City's obligations thereunder to the extent legally permitted to do so.
4. The Deputy Mayor of Economic Housing and Development is hereby authorized to allocate the financial proceeds from the Settlement Agreement and Mutual Release in accordance with the terms contained therein, including, but not limited to the allocation of $5,000,000.00 to reconstruct Ironbound Stadium.
STATEMENT
This resolution hereby authorizes a Settlement Agreement and Mutual Release to be entered into by and among Hess Corporation, the City of Newark, and Hess NEC, LLC, to fully and finally resolve their respective claims and continuing obligations stemming from the litigation bearing Docket No. ESX-L-3465-09.