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AN ORDINANCE REQUIRING A DEED RESTRICTION TO BE RECORDED UPON THE SALE OF ONE HUNDRED PERCENT (100%) OF THE CITY’S PROPERTY STOCK THAT THE CITY SELLS FOR PURPOSES OF REDEVELOPMENT THAT IS SOLD PRIOR TO THE COMPLETION OF THE PROJECT THEN THE CITY IS ENTITLED TO AN AMOUNT EQUAL TO NINETY PERCENT (90%) OF THE FAIR MARKET VALUE OF THE PROPERTY AT THE TIME THE PROPERTY IS SOLD AND ENSURING THAT ANY PURCHASER OF CITY PROPERTY SOLD FOR THE PURPOSES OF REDEVELOPMENT COMPLIES WITH ANY AND ALL APPLICABLE “BEST EFFORTS” WORKFORCE REQUIREMENTS.
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WHEREAS, the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1, et seq., as amended and supplemented (the “Redevelopment Law”), provides a process for municipalities to participate in the redevelopment and improvement of areas in need of redevelopment; and
WHEREAS, in order to stimulate the reinvigoration of the City of Newark (the “City”), by Resolution 7RDO(AS) adopted by the City Municipal Council on June 15, 2005, the entire City was designated as an area in need of rehabilitation pursuant to the Redevelopment Law; and
WHEREAS, the City has determined that certain property within the City is no longer needed for any public use and that redevelopment on those properties will contribute to the economic improvement of the City in accordance with the intent, goals and objectives of the City’s Redevelopment Plans; and
WHEREAS, the City has sold property for the purpose of redevelopment and entered into many redevelopment agreements with designated redevelopers to ensure the implementation of the Redevelopment Plans and the continued growth and development within the City; and
WHEREAS, the City finds that it is in the public interest to ensure that all property conveyed to a designated redeveloper for the purposes of redevelopment remains subject to the obligations, covenants, conditions, and restrictions necessary to carry out the redevelopment plans; and
WHEREAS, the City further finds that recording a deed restriction on City-owned property that is sold to a redeveloper for purposes of redevelopment and the redeveloper sells the property prior to the completion of the project will entitle the City to an amount equal to ninety percent (90%) of the fair market value of the property at the time the property is sold to a third party is necessary to ensure long-term compliance with the redevelopment plan, redevelopment agreement, and Redevelopment Law.
WHEREAS, the primary purpose of this Ordinance is as follows:
1. Requiring all real property conveyed by the City to a redeveloper for purposes of redevelopment shall be encumbered by a deed restriction ensuring compliance with the applicable redevelopment plan, redevelopment agreement, “best efforts” workforce requirements, and Redevelopment Law.
WHEREAS, the City had long maintained a policy objective of encouraging meaningful participation by local residents in workforce hiring and by minority- and women-owned businesses in public contracting, redevelopment, and other City-related projects; and
WHEREAS, the City has adopted multiple ordinances and policy frameworks addressing local workforce hiring and the solicitation of minority- and women-owned businesses, including provisions requiring contractors, developers, and other entities doing business with the City to demonstrate “best efforts” to advance these objectives; and
WHEREAS, the City seeks to ensure that property conveyed to a designated redeveloper for purpose of redevelopment remains in compliance with requirements of “best efforts” applicable to local workforce hiring and the solicitation of minority- and women-owned businesses upon a sale of the deed-restricted property to a third-party; and
WHEREAS, N.J.S.A. 40:48-2 authorizes a municipality to make, amend, repeal and enforce such other ordinances, regulations, rules and by-laws not contrary to the laws of this state or of the United States, as it may deem necessary and proper for the good government, order and protection of persons and property, and for the preservation of the public health, safety and welfare of the municipality and its inhabitants.
NOW, THEREFORE, BE IT ORDAINED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
SECTION 1. The foregoing whereas clauses are incorporated herein by reference and made a part hereof.
SECTION 2. Purpose and Effect.
a. Purpose. It is the purpose of this ordinance to require that all real property conveyed by the City to a redeveloper for purposes of redevelopment shall be encumbered by a deed restriction in order to ensure compliance with the applicable redevelopment plan, redevelopment agreement, “best efforts” workforce requirements, and Redevelopment Law.
b. Effect. As of the Effective Date of this Ordinance, this Ordinance shall require that a deed restriction will be recorded upon the sale of one hundred percent (100%) of the City’s property stock that the City sells for purposes of redevelopment and that purchaser sells the property to a third party prior to the completion of the project, then the City is entitled to an amount equal to ninety percent (90%) of the fair market value of the property at the time the property is sold to a third party. Additionally, any purchaser of City property for the purpose of redevelopment shall be subject to the City’s “best efforts” requirements applicable to local workforce hiring and the solicitation of minority- and women-owned businesses.
SECTION 3. Applicability.
As of the Effective Date of this Ordinance, this Deed Restriction shall be imposed on 100% of the Property stock sold by the City of Newark to a Purchaser for the purposes of redevelopment in any given calendar year in which this Ordinance remains in effect.
SECTION 4. Required Deed Restriction
1. The Purchaser/Redeveloper of any property that is subject to this Ordinance must execute and deliver an original fully executed copy of a Deed Restriction on the City of Newark’s standard form at the time of closing on the sale of the property. The Deed Restriction and any amendments thereto must be recorded in the property records of Essex County Register of Deeds and Mortgages.
2. The Purchaser/Redeveloper of any property sold for purposes of redevelopment that is subject to this Ordinance must execute and deliver an original fully executed copy of a Deed Restriction on the City of Newark’s standard form prior to issuance of a building permit for the construction or rehabilitation of a dwelling on the property. The Deed Restriction and any amendments thereto must be recorded in the property records of Essex County Register of Deeds and Mortgages.
3. For any Purchasers/Redevelopers that have contractually agreed to abide by this Ordinance, the developer or owner of such property shall record a Deed Restriction on the City of Newark’s standard form in accordance with the conditions and restrictions set forth in the contractual agreement between the developer/owner and the City of Newark.
4. A Purchaser/Redeveloper that is subject to this Ordinance shall not transfer the property to subsequent purchasers without the approval of the Newark Municipal Council. If the sale is approved by the Newark Municipal Council, subsequent purchasers must execute an Acknowledgment of Deed Restriction prior to closing the purchase and recorded in the property records of Essex County Register of Deeds and Mortgages.
SECTION 5. Transfers Without City Approval. If it is determined that the Purchaser/Redeveloper of any Property transferred the Property to a third-party prior without the City’s approval, the City can elect to enforce one of the following repercussions, which shall be clearly set forth in the Deed Restriction:
a. The property may Revert back to the City.
i. If the property is Reverted back to the City by the Purchaser’s failure to comply with this Ordinance and/or the Deed restriction; the Purchaser shall be liable for all fees, payments, and any other monetary encumbrances inflicted on the City due to Purchaser’s failure to comply with this Ordinance and/or breach of the Deed Restriction. The City’s sole cost for the exercise of this right of reverter shall be the payment of the original purchase price paid by the original purchaser/redeveloper to the current owner;
OR
b. The City shall be entitled to an amount equal to ninety percent (90%) of the Fair Market Value at the time the property is sold.
i. The Purchaser shall be liable for all fees, payments, and any other monetary encumbrances inflicted on the City due to the Purchaser’s failure to comply with this Ordinance and/or breach of the Deed restriction, including but not limited to attorneys fees and costs associated with enforcing the City’s rights.
SECTION 6. “Best Efforts” Workforce Requirements.
Any Purchaser and/or Redeveloper subject to this Ordinance that undertakes construction, rehabilitation, or other work covered by the City's Newark Residents’ Employment Policy Ordinance § 2:4-21 and Minority Business Enterprise Participation Ordinance § 2:2-28.3, as may be amended from time to time, shall comply with all applicable hiring and best effort requirements of those Ordinances. Compliance with such requirements shall be a material obligation of the Redevelopment Agreement and/or the Deed Restriction required by this Ordinance. Failure to comply with such requirements shall constitute a default under the applicable Redevelopment Agreement and/or Deed Restriction.
SECTION 7. Inconsistency of the ordinances; repealer.
All ordinances or parts of ordinances inconsistent with this ordinance are hereby repealed to the extent of their inconsistencies only. This ordinance shall take effect twenty (20) days after passage and publication, as required by law.
SECTION 8. Partial invalidity of ordinance; severability.
Should any section, paragraph, sentence, clause, or phrase of this ordinance be declared unconstitutional or invalid for any reason, the remaining portions of this ordinance shall not be affected thereby and shall remain in full force an effect, and to that end the provisions of this ordinance are hereby declared to be severable.
SECTION 9. This Ordinance shall take effect upon final passage and publication in accordance with the laws of the State of New Jersey.
STATEMENT
An ordinance requiring a deed restriction to be recorded upon the sale of one hundred percent (100%) of the City’s property stock that the City sells for purposes of redevelopment that is sold prior to the completion of the project then the City is entitled to an amount equal to ninety percent (90%) of the fair market value of the property at the time the property is sold and ensuring that any purchaser of City property for purposes of redevelopment complies with any and all applicable “best efforts” workforce requirements.