Title
Dept./Agency: Economic and Housing Development
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Type of Service: Grant Agreement
Purpose: To provide for a Grant and Grant Agreement with Kawaida Towers JV Partners, LLC in the amount of $8,000,000.00
Entity Name: Kawaida Towers JV Partners, LLC
Entity Address: 8 Lombardy Street, Suite 320, Newark, New Jersey 07102
Grant Amount: $8,000,000.00
Funding Source: Community Project Funding Grant
Total Project Cost: $23,046,833.00
Other Funding Source/Amount:
Grant Period:
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:
(Address/Block/Lot/Ward)
17-21 Halsey Street/Block 20/Lot 1/Central Ward
Additional Information:
body
WHEREAS, the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1, et seq., as amended and supplemented (the “Redevelopment Law”), authorizes municipalities to participate in the redevelopment and improvement of areas that are in need of redevelopment or rehabilitation; and
WHEREAS, in order to stimulate the reinvigoration of the City, by Resolution 7Rdo(AS) adopted on June 15, 2005, the entire City was designated as an area in need of rehabilitation pursuant to the Redevelopment Law; and
WHEREAS, on January 21, 2009, pursuant to Ordinance 6PSF-g, the Municipal Council of the City adopted the Broad Street Station Redevelopment Plan (“Redevelopment Plan”); and
WHEREAS, the Redeveloper desires to construct a mixed use complex on real property located at 17-21 Halsey Street, within the Central Ward of the City, and identified on the Official Tax Map of the City of Newark, as Block 20, Lot 1 (collectively, the “Property”) consisting of approximately a 10-story building with 31 units of residential housing, of which all 31 units shall be affordable housing, 52% of the units shall be rental and 48% of the units shall be for-sale, with proposed retail mix of anchor community-serving grocery store, retail spaces, and commercial spaces (collectively, the “Project”). All units to be constructed or rehabilitated as part of the Project shall be referred to herein as the “Housing Units”); and
WHEREAS, the Project will enhance the physical beauty and character of the neighborhood, while at the same time increasing the number of affordable housing rental and for-sale homes available to local residents; and
WHEREAS, as a result, the Project will improve the quality of life of local residents, drive economic growth and foster pride in the local residents which are goals necessary for any long-term neighborhood redevelopment and prosperity; and
WHEREAS, the Project currently has a $8,000,000.00 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 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 the Redevelopment Plan; and
WHEREAS, the Newark Municipal Council recognizes the need to complete the above Project and desires to finance the making of a capital grant in the amount of Eight Million Dollars and Zero Cents ($8,000,000.00) to the Redeveloper to be used to develop and construct the Project; and
WHEREAS, the Newark Municipal Council adopted a Resolution accepting grant funds from the United States Department of Housing and Urban Development in the amount of Eight Million Dollars and Zero Cents ($8,000,000.00) for the production and preservation of affordable housing, on September 18, 2024 (7R2-d), which authorized the establishment of the Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Fund (the “Fund”) (collectively, the “Resolution”); and
WHEREAS, the purpose of the Fund is for the production and preservation of affordable housing production in the City of Newark and to expand the City’s Live Newark Homeowner Assistance Program of forgivable down payment loans to first time homebuyers and for home repairs; in addition, the Fund will help further the Equitable Investments in Newark Communities Program, which enables the development or rehabilitation of homes, while simultaneously expanding opportunities for minority/women-owned business enterprise developers and contractors through the United States Department of Housing and Urban Development (“HUD”); and
WHEREAS, located in one of the least affordable regions of the country, the City will use the Fund to help achieve Mayor Ras J. Baraka’s vision of quality and affordable housing for all Newark residents at every income level throughout the City; and
WHEREAS, the Project is consistent with the goals and objectives of the Fund and the City further wishes to fund a capital grant to the Redeveloper in an amount not to exceed Eight Million Dollars and Zero Cents ($8,000,000.00) (the “Grant”) from the amounts deposited in the Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Fund; and
WHEREAS, the Department of Economic and Housing Development desires to enter into and execute a Grant Agreement, in the form attached hereto, with the Redeveloper, which shall, among other things, in the aggregate grant amount of $8,000,000.00 for purposes of bridging the gap in financing to complete the construction of the Project.
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 Eight Million Dollars and Zero Cents and Zero Cents ($8,000,000.00) of funds from the Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Fund for the purpose of funding a grant to Kawaida Towers JV Partners, LLC, 8 Lombardy Street, Suite 320, Newark, New Jersey 07102, to be used as financing assistance to develop and subsidize the costs of the Project which shall facilitate redevelopment of the City and implementing related activities and bridge the financial gap in construction costs related to the Project.
2. The Mayor 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 Eight Million Dollars and Zero Cents ($8,000,000.00) from the Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Fund, to be used as financing assistance to develop and subsidize the costs of the Project which shall facilitate redevelopment of the City and implementing related activities and bridge the financial gap in construction costs related to the Project.
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 on the Property to ensure that the City shall be repaid the full amount of the Grant Funds disbursed to the Redeveloper upon the occurrence of an event of default under the Grant Agreement by the Redeveloper by requiring the Redeveloper to execute a separate Mortgage and Security Agreement which shall be recorded and Mortgage Note for the full amount of financial assistance provided to the Redeveloper and assumed by the Purchaser in the Grant Agreement.
4. The term of the Grant Agreement shall commence on the date of execution and delivery of the Grant Agreement by the Entity and the City and expire upon issuance of a Certificate of Occupancy for the Project.
5. 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 subordination agreements, 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. In addition, the Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to enter into a maximum of two six month extensions of the term set forth in the Grant Agreement or Beneficiary Agreement and any contract timelines and milestones contained therein, provided that any contract timelines and milestones are not extended beyond the two permitted six 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 and the approval of the Corporation Counsel.
6. The Redeveloper must adhere to all milestones and timelines in the Project Schedule as further set forth in the Grant Agreement. Should the Entity fail to complete the Project within the specified time frame set forth in the Grant Agreement, then the City, in its sole discretion, in addition to any other remedy available by the Grant Agreement or as allowed by law, may direct the Redeveloper to repay all funding authorized in the Grant Agreement.
7. 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 April 5, 1995) and its Affirmative Action Plan (7Rbp March 1, 1995) and Federal Executive Order 11246 (as amended by Executive Orders 1137 and 12086) with respect to the award of goods and services, as may be amended from time to time. The Entity has agreed 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.
8. Attached hereto is a Certification from the Municipal Comptroller of the City of Newark which states that (1) there are sufficient funds in the amount of Eight Million Dollars and Zero Cents ($8,000,000.00) and (2) that the line appropriation of official budgets which shall be charged is as follows:
Business
Unit Dept. Div/Proj. Activity Account# Bud. Ref Amount
NW051 G24 D24B0 A 72090 B2024 $8,000,000.00
9. A copy of the fully executed Grant Agreement, the Mortgage Note and the recorded Mortgage 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 and directing the Mayor and/or his designee, and the Deputy Mayor/Director of the Department of Economic and Housing Development to enter into and execute and deliver a Grant Agreement with Kawaida Towers JV Partners, LLC, in the aggregate grant amount of $8,000,000.00 to bridge the gap in financing required to complete construction of the Project and to facilitate and increase the number of affordable housing rental and for-sale homes available to local residents.