Title
Dept./ Agency: Economic and Housing Development
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Type of Service: Grant Agreement
Purpose: To grant financial assistance for post construction costs and expenses, not limited to working capital and any construction cost overruns for the build out of 3,381 square feet of commercial space in a newly built mixed-use building.
Entity Name: Urban City Foods, LLC
Entity Address: 1212 Springfield Avenue, Irvington, New Jersey 07111
Grant Amount: $300,000.00
Funding Source: Community and Economic Development Dedicated Trust Fund
Total Project Cost: $1,279,750.00
City Contribution: $300,000.00
Other Funding Source/Amount: New Jersey Community Capital (NJCC): $523,800.00; Invest Newark: $405,950.00; Other: $50,000.00
Grant Period: Commencing upon full execution of the Grant Agreement and expiring within twenty-four (24) months of construction commencement
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)
915 Broad Street, Block 93, Lot 29 /Central Ward
Additional Information:
body
WHEREAS, the Municipal Council previously adopted Resolution 7Rdo(AS) on June 15, 2005, designating the entire City as an “area in need of rehabilitation” under the Local Redevelopment and Housing Law, N.J.S.A. 40A: 12A-1, et seq. (“LRHL”); and
WHEREAS, the Entity desires to build out 3,381 square feet of commercial space in a newly built mixed-use development located at 915 Broad Street, Block 93, Lot 29 in the Central Ward of the City of Newark (the “Project”); and
WHEREAS, the Project currently has a significant funding gap that must be bridged in order to make the Project financially feasible; and
WHEREAS, N.J.S.A. 40A:12A-8(f) of the LRHL authorizes municipalities to provide capital grants to redevelopers to provide financial assistance for the performance of redevelopment activities in order to implement redevelopment projects in accordance with redevelopment plans; and
WHEREAS, the Project qualifies for financial assistance, since it is located within a redevelopment area and is being performed in order to implement an approved Redevelopment Plan; and
WHEREAS, pursuant to 7Rg, adopted on November 6, 1985, the Municipal Council established the Community and Economic Development Dedicated Trust Fund for the purpose of facilitating redevelopment in the City of Newark and implementing activities eligible under Title I of the Housing and Community Development Act of 1974, as amended; and
WHEREAS, the City through the Department of Economic and Housing Development determined that the financial assistance should be provided to the Entity through the Community and Economic Development Dedicated Trust Fund because such financial assistance shall, among other things, minimize, to the extent practicable, displacement of existing businesses and jobs in a redevelopment area that urgently needs to create and retain jobs for low and moderate-income persons; and
WHEREAS, the Municipal Council recognizes the need to assist the Entity and the above Project and desires to finance the issuance of a capital grant to the Entity in the amount of Three Hundred Thousand Dollars and Zero Cents ($300,000.00) (the “Grant”) to be used for the reimbursement of loans borrowed to cover overrun hard construction costs, which are causing a significant financial strain on and adversely affecting the continued viability of the Project; and
WHEREAS, in furtherance of the City’s intent to provide a Grant to the Entity, the City desires to enter into a Grant Agreement with the Entity to provide them with such capital grant, in the amount of Three Hundred Thousand Dollars and Zero Cents ($300,000.00), to be used for the reimbursement of loans borrowed to cover overrun construction costs which are causing a significant financial strain on and adversely affecting the continued viability of the Project with funds for this grant to be provided from the City’s Community and Economic Development Dedicated Trust Fund and to memorialize the terms and conditions of the grant; and
WHEREAS, since the entire City is designated as an area in need of rehabilitation, pursuant to Resolution 7Rdo(AS) adopted on June 15, 2005 and the activities of the Project qualify for assistance, the Project is eligible for the grant with the use of funds from the City’s Community and Economic Dedicated Trust Fund, pursuant to Resolution 7RG, adopted on November 6, 1985.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Municipal Council hereby authorizes the use of up to Three Hundred Thousand Dollars and Zero Cents ($300,000.00) of funds from the City’s Community and Economic Development Dedicated Trust Fund for the purpose of funding a grant to Urban City Foods, LLC, 1212 Springfield Avenue, Irvington, New Jersey 07111, to be used for the reimbursement of loans borrowed to cover overrun hard construction costs, which are causing a significant financial strain on and adversely affecting the continued viability of the Project, consisting of 3,381 square feet of commercial space in a newly built mixed-use development located at 915 Broad Street, Block 93, Lot 29/Central Ward.
2. The Mayor of the City of Newark and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development, are each hereby authorized to enter into and execute a Grant Agreement with the Entity, in the form attached hereto, in the amount not to exceed Three Hundred Thousand Dollars and Zero Cents ($300,000.00) from the City of Newark’s Community and Economic Development Dedicated Trust Fund, to be used as financial assistance for the reimbursement of loans borrowed to cover overrun construction costs, which are causing a significant financial strain on and adversely affecting the continued viability of the Project which shall facilitate redevelopment of the City and implementation of related activities, as well as minimize, to the extent practicable, the displacement of businesses and jobs held by low and moderate-income persons.
3. The Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to establish and record a declaration of covenants, conditions and restrictions to ensure that the City shall be repaid the full amount of the Grant Funds disbursed to the Entity upon the occurrence of an event of default under the Grant Agreement by the Entity by requiring: (i) the Entity to execute and deliver a separate Promissory Note and a separate Security Agreement; and (ii) the Entity’s principal owner to execute and deliver an Unconditional Personal Guaranty, in forms attached hereto subject to the approval of the City’s Corporation Counsel, for the full amount of funding provided to the Entity in the Grant Agreement. Said covenants, conditions and restrictions shall bind the Entity 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 during the term of the Grant Agreement and the City shall discharge such lien and terminate the guaranty in connection therewith after eighteen (18) months from the date of full and final execution and delivery of the Grant Agreement, provided the Entity has complied with all of the terms and conditions of the Grant Agreement.
4. The term of the Grant Agreement shall commence on the date of full and final execution and delivery of the Grant Agreement by the Entity and the City and expire eighteen (18) months thereafter upon the City’s as provided in the Grant Agreement.
5. The Entity shall be responsible for the recordation of all UCC financing statements or other filings required to secure and perfect the City’s lien on the Entity’s assets pursuant to the Security Agreement.
6. The Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to effectuate certain business terms and conditions related to the Grant Agreement as permitted by New Jersey Law and may enter into access and right of entry agreements and other relevant documents related to these fund allocations in forms subject to the approval of the Corporation Counsel. There will be no further extensions granted by the City to the term of the Grant Agreement.
7. The Entity must adhere to all deadlines and timelines as further set forth in the Grant Agreement. The Project must conform to the City of Newark Design and Construction Standards Guidelines for New Home Construction, including standards for environmental sustainability and energy efficiency, as established by the Department of Economic and Housing Development. Should the Entity fail to remain open for business for any reason or decide to close within eighteen (18) months of full and final execution and delivery of the Grant Agreement, then the City, in its sole discretion, in addition to any other remedy available by the Grant Agreement, Promissory Note, Security Agreement, Guaranty or as allowed by law, may direct the Entity (or its principal owner under the Guaranty) to repay all funding authorized in the Grant Agreement.
8. The Entity must remain in compliance with all Municipal, State and Federal laws including, but not limited to the City of Newark’s Minority Set-Aside Ordinance (6S&Fd adopted on April 4, 1995) and its Affirmative Action Plan, (7Rbp adopted on March 1, 1995) and Federal Executive Order 11246 (as amended by Executive Orders 11375 and 12086) with respect to the award of goods and services, as may be amended from time to time. The Entity has agreed that it will utilize its best efforts 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.
9. Attached is a Certification of Funds, which shall be filed in the Office of the City Clerk, from the Director of the Department of Finance, which states that: 1) there are sufficient funds in the amount of Three Hundred Thousand Dollars and Zero Cents ($300,000.00); and 2) that the line appropriation of the Official Budget, which shall be charged is as follows:
|
Bus Unit |
Dept. ID |
Div/Proj. |
Activity |
Account # |
Bud Ref. |
|
NW026 |
BS |
N/A |
N/A |
32100 |
B2021 |
10. A copy of the fully executed Grant Agreement, the Promissory Note, Security Agreement and Guaranty must be placed on file in the Office of the City Clerk by the Deputy Mayor/Director of the Department of Economic and Housing Development.
STATEMENT
Resolution authorizing the Mayor of the City of Newark and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development to enter into and execute a Grant Agreement with Urban City Foods, LLC, 1212 Springfield Avenue, Irvington, New Jersey 07111, for grant funds in the amount of $300,000.00 from the City of Newark’s Community and Economic Development Dedicated Trust Fund to be used for the reimbursement of loans borrowed to cover overrun hard construction costs, which are causing a significant financial strain on and adversely affecting the continued viability of the Project consisting of 3,381 square feet of commercial space in a newly built mixed-use development located at 915 Broad Street, Block 93, Lot 29. (Central Ward)