Title
Dept/ Agency: Economic & Housing Development
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Type of Service: Application for Long-Term Tax Abatement
Purpose: To grant a long term tax abatement to FAIRVIEW HOMES PRESERVATION, L.P. under the HMFA law for renovation of twelve three story apartment buildings with 135 residential units, and an additional unit for maintenance.
Entity Name: FAIRVIEW HOMES PRESERVATION, L.P.
Entity Address: 60 Columbus Circle, New York, NY 10023
Abatement Period: 30 years
Contract Basis: ( ) Bid ( ) State Vendor ( ) Prof. Ser. ( ) EUS
( ) Fair & Open ( ) No Reportable Contributions ( ) RFP ( ) RFQ
( ) Private Sale ( ) Grant ( ) Sub-recipient ( ) n/a
List of Property:
(Address/Block/Lot/Ward)
70-96 17th Avenue aka 368-408 Hunterdon Street/ Block 2547/Lot 1/Central Ward
Additional Information:
The requested PILOT formula is based on 6.28% of gross revenues.
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WHEREAS, Fairview Homes Preservation, L.P., 60 Columbus Circle, New York, NY 10023, filed an application with the Mayor seeking a long term tax abatement pursuant to New Jersey Housing and Mortgage Finance Agency Law, N.J.S.A. 55:14K-1 et seq. ("HMFA Law") for a term of thirty (30) years for six (6) units of affordable housing located at 368-408 Hunterdon Street, and identified on the official tax map of the City as Block 2547, Lot 1 (the "Property"), consisting of the renovation of twelve three story apartment buildings with 135 residential units, and an additional unit for maintenance (the "Project"); and
WHEREAS, the Mayor has submitted the application and proposed Financial Agreement to the Municipal Council with his recommendation thereof, a copy of which is annexed hereto; and
WHEREAS, in accordance with Ordinance No. 6PSF-a adopted May 4, 2011, Fairview Homes Preservation, L.P. has filed with the City a sworn statement that it has not made any contribution in violation of said ordinance; and
WHEREAS, the Municipal Council has determined pursuant to N.J.S.A. 40A:20-11 that the relative benefits of this Project outweigh any costs associated with this tax exemption and that without the tax abatement granted herein, the Project would not be undertaken.
NOW, THEREFORE, BE IT ORDAINED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The application of Fairview Homes Preservation, L.P., 60 Columbus Circle, New York, NY 10023, for the rehabilitation of the Project described in the application is hereby approved in accordance with the recommendation of the Mayor.
2. The abatement from taxation on improvements is hereby granted to Fairview Homes Preservation, L.P. for a period of thirty (30) years from the date of substantial completion of the Project, pursuant to HMFA Law, and only so long as Fairview Homes Preservation, L.P. is subject to and complies with the proposed Financial Agreement and the HMFA Law, as amended and supplemented, and upon the further condition that Fairview Homes Preservation, L.P. does not file a petition of tax appeal for the Property on which the Project is to be located.
3. The Mayor of the City of Newark is hereby authorized to execute, on the City's behalf, the Financial Agreement in the form attached hereto.
4. An executed copy of the Financial Agreement authorized by this resolution shall be filed and maintained with the City Clerk.
5. The Project, when completed, will conform with all State laws and ordinances of the City of Newark relating to its construction and use.
6. Fairview Homes Preservation, L.P. shall in the operation of the Project comply with all laws so that no person shall be subject to any discrimination because of race, religious principles, color, national origin, or ancestry.
7. Fairview Homes Preservation, L.P. shall file an employment report (herein described below) with the Office of Affirmative Action who shall forthwith after receiving the report send a copy thereof to the City Clerk and the Office of Affirmative Action shall forthwith investigate the matters contained therein and report its findings to the Municipal Council.
8. Subject to the requirements of paragraph 10 below, as of the Annual Service Charge Start Date (as defined in the Financial Agreement), Fairview Homes Preservation, L.P. shall pay an estimated quarterly service charge to the City in the amount of $35,492.00_____________ until the correct amount due from Fairview Homes Preservation, L.P. is determined by the City's Acting Director of Finance based upon the auditor's report that is required to be submitted under the Financial Agreement. The annual service charge shall be based on 6.28% of the Annual Gross Revenue generated from the Project for thirty (30) years as set forth more fully within the Financial Agreement. After the auditor's report required under the Financial Agreement has been accepted by the City's Acting Director of Finance, the City and Fairview Homes Preservation, L.P. will adjust any over or under payment so made or needed to be made for the particular period covered by the auditor's report.
9. Fairview Homes Preservation, L.P. shall pay the minimum annual service charge, as calculated pursuant to HMFA Law and the Financial Agreement, in each year in which the annual service charge, as provided in paragraph 8 above, would be less than the minimum annual service charge.
10. The following occurrences and requirements are express conditions of the granting of this tax abatement, to be performed by Fairview Homes Preservation, L.P., and the failure to comply with these requirements will result in the cancellation of the tax abatement:
(a) Fairview Homes Preservation, L.P. shall pay full taxes on the land and improvements of the Project (designated as Block 2547, Lot 1) until the annual service charge becomes effective;
(b) Fairview Homes Preservation, L.P. shall not, without prior consent of the Municipal Council of the City of Newark, sell, lease, assign, encumber, subordinate, convey, mortgage or transfer all, or any part of the Project, so as to sever, disconnect or divide the improvements from the land embraced within the Project;
(c) Fairview Homes Preservation, L.P., pursuant to the Revised City Ordinance 10:24-1 et seq., as amended, shall be deemed to agree that if Fairview Homes Preservation, L.P. operates, controls or manages the Project that it will make its Best Efforts (as defined in the Financial Agreement) to achieve the goal of having 51% of all new jobs arising out of the businesses conducted on the Project site after the issuance of the Certificate of Occupancy and during the continuation of the tax exemption, dedicated to Newark residents, of which a goal of 51% of such all new employees shall be minority residents;
(d) Fairview Homes Preservation, L.P. shall concomitantly, with the submission of the annual report required of it, attach an employment report under oath, with particulars, stating the manner and the extent to which it has complied with 11(c) above. This employment report shall be filed with the Acting Director of Finance, the Clerk of the City of Newark, and the Deputy Mayor/Director of the Department of Economic and Housing Development;
(e) Fairview Homes Preservation, L.P. shall pay all outstanding taxes and all outstanding water and sewer charges within thirty (30) days of the adoption of this resolution;
(f) Fairview Homes Preservation, L.P. shall complete the Project within twenty-four (24) months of the date of adoption of this resolution; provided, however, that the Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to enter into a maximum of two (2) six (6) month extensions of the construction schedule deadlines set forth within the Financial Agreement and any other timelines and milestones, provided that such deadlines, timelines and milestones are not extended beyond the two (2) permitted six (6) month extensions, subject to full written disclosure (in the form of a signed memorandum to be submitted prior to adoption) to the Newark Municipal Council by the Deputy Mayor/Director of the Department of Economic and Housing Development;
(g) Fairview Homes Preservation, L.P. shall submit any and all lease agreements and/or subleases entered into with related or third parties for the use and occupancy of space made available by Fairview Homes Preservation, L.P. to the Law Department and the Department of Economic and Housing Development. The obligation to submit lease agreements shall be a continuing obligation during the period of the Financial Agreement. All lease agreements shall be subject to review by the City for the purpose of determining the validity thereof and to ensure that lease agreements are executed as part of an arms length transaction;
(h) Fairview Homes Preservation, L.P. shall submit to the City a copy of its formation documents, as approved by the Department of Community Affairs and filed with the Secretary of State;
(i) Fairview Homes Preservation, L.P. shall receive a favorable review and certification from the appropriate municipal departments and agencies, pursuant to Municipal Ordinance 6S&FD 102192, as amended;
(j) Fairview Homes Preservation, L.P. shall secure all financing prior to the commencement of any construction.
11. That in any year that Fairview Homes Preservation, L.P. shall fail to make four (4) consecutive land tax payments when due and owing in the manner defined in N.J.S.A. 40A:20-12(b)(2)(e), such delinquency shall render Fairview Homes Preservation, L.P. ineligible for any land tax credits against the annual service charge.
12. Fairview Homes Preservation, L.P. understands and agrees that the revenue projections set forth in the application are estimates and that the actual payments in lieu of taxes to be paid by Fairview Homes Preservation, L.P. to the City shall be determined pursuant to the Financial Agreement to be executed between Fairview Homes Preservation, L.P. and the City of Newark.
13. The City Clerk's Office of the City of Newark shall forthwith submit a certified copy of the resolution approving the tax abatement and the proposed Financial Agreement to the Director of the Division of Local Government Services.
STATEMENT
This Resolution grants a long term tax abatement to Fairview Homes Preservation, L.P., 60 Columbus Circle, New York, NY 10023, under the HFMA Law for thirty (30) years for the renovation of twelve three story apartment buildings with 135 residential units and an additional unit for maintenance, totaling 136 units located at located 70-96 17th Avenue aka 368-408 Hunterdon Street, and identified on the official tax map of the City as Block 2547, Lot 1. (Central Ward)