Title
Dept/ Agency: Economic Housing and Development
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Type of Service: Private Sale/Redevelopment
Purpose: Authorizing the execution of Second Amendment to Redevelopment Agreement with El Sid Properties, LLC
Entity Name: El Sid Properties, LLC
Entity Address: 500 Avenue P, Newark, New Jersey 07105-4802
Sale Amount: $4,450,000.00
Cost Basis: ( ) PSF (X) Negotiated ( ) N/A ( ) Other:
Assessed Amount:
Appraised Amount:
Contract Period: Construction to commence no later than two (2) years from the amended effective date and completed within twelve (12) months thereafter.
Contract Basis: ( ) Bid ( ) State Vendor ( ) Prof. Ser. ( ) EUS
( ) Fair & Open ( ) No Reportable Contributions ( ) RFP ( ) RFQ
(X) Private Sale ( ) Grant ( ) Sub-recipient ( ) n/a
List of Property:
(Address/Block/Lot/Ward)
704-738 Doremus Avenue /Block 5074/Lot 1/East Ward
Additional Information:
body
WHEREAS, on June 15, 2005, the Municipal Council of the City of Newark adopted Resolution 7RDO(A.S.), designating the entirety of the City as “an area in need of rehabilitation” as defined by the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 et seq.; and
WHEREAS, following the “area in need of rehabilitation” designation, the Municipal Council adopted the East Ward Redevelopment Plan (the “Redevelopment Plan”) that includes within it the City-owned property, together with all buildings, structures and improvements thereon, located at Block 5074, Lot 1, more commonly known as the “Central Steel Drum Site” or “Central Steel Site” (the “Property”); and
WHEREAS, the City of Newark (the “City”) and Doremus Newark II, LLC (“Doremus II”) executed a Redevelopment Agreement providing for the conveyance, remediation and redevelopment of the Property, as authorized by Resolution 7R3-a(S) adopted by the Municipal Council of the City on August 17, 2010 (the “Original Redevelopment Agreement”); and
WHEREAS, the Parties entered into the First Amendment of the Redevelopment Agreement, which was authorized by Resolution 7R2-c (AS) 100219 adopted by the Municipal Council on October 2, 2019 (“First Amendment”), to amend the Original Redevelopment Agreement in order to, inter alia, (i) ratify the Transfer in the Redeveloper; (ii) redefine the Project; and (iii) establish the obligation of the Redeveloper to pay to the City the Redeveloper Contribution; and
WHEREAS, the Redeveloper has the obligation to construct the Firing Range for use by the City of Newark Department of Public Safety, Police Division, on a portion of the Property (referred to as the “Premises”) pursuant to the First Amendment; and
WHEREAS, the City and the Redeveloper acknowledge the need to now further amend the Original Redevelopment Agreement with a Second Amendment of the Redevelopment Agreement, the form of which is annexed hereto as Attachment 1 (“Second Amendment”), in order to, inter alia, (i) revise certain Project details relating to the Firing Range; (ii) acknowledge the need for subdividing the Property in order to provide for the Premises to be leased back to the City pursuant to a proposed Lease Agreement which is to be considered together with the Second Amendment; (iii) provide certain protections to the Redeveloper during the City’s occupancy of and operation of the Firing Range outside of a Lease Agreement; and (iv) clarify the terms regarding the Environmental Remediation Credit as well as other financial terms pertaining to the Closing and the conveyance of title for the Property from the City to Redeveloper; and
WHEREAS, the Second Amendment revises the term “Firing Range” so as to reference the approximate size of the Firing Range, as same was built; and
WHEREAS, the City’s Department of Public Safety, Police Division, and the Department of Engineering have each inspected the Firing Range and issued certification letters, annexed hereto as Attachments 2 and 3, respectively (collectively, the “Certification Letters”); and
WHEREAS, the Certification Letters acknowledge that the new Firing Range has already been constructed by the Redeveloper and that said construction was undertaken in accordance with the specifications set forth in the First Amendment and in compliance with all applicable laws, rules and regulations, respectively; and
WHEREAS, the Second Amendment acknowledges the need to subdivide the Property for, inter alia, tax purposes; and
WHEREAS, the Second Amendment acknowledges that although the City shall be permitted to occupy the Premises and operate the Firing Range immediately following the Closing, the Long-Term Lease Agreement (“Lease Agreement”), the proposed form of which is annexed hereto as Attachment 4, shall not become binding upon the City, as Tenant, until the time of appeal for any adoption of an Ordinance Authorizing the Execution of the Lease Agreement by the Municipal Council, as set forth in applicable laws, has expired without any challenge being filed, and/or, any timely-filed appeal has been defeated with finality; and
WHEREAS, notwithstanding, and as referenced above, the City shall be permitted to use and occupy the Firing Range prior to the Effective Date of the Long-Term Lease Agreement upon passage of this Resolution and the effectuation of Closing, provided that the City shall indemnify the Redeveloper against certain potential liabilities arising out of the City’s activities thereupon; and
WHEREAS, the Second Amendment acknowledges that the Redeveloper shall be granted Environmental Remediation Credits against the Purchase Price for the Property in the amount of $3,782,500.00 for Remediation Costs already incurred by Redeveloper, and further clarifies procedures for submitting accounting of additional Remediation Costs that will be incurred by Redeveloper after Closing; and
WHEREAS, the Second Amendment more specifically sets forth the terms of the Purchase Money Mortgage, the form of which is annexed hereto as Attachment 5, and the accompanying Promissory Note, the form of which is also annexed hereto as Attachment 6; and
WHEREAS, in order to effectuate a Closing, the Parties have prepared a proposed form of Deed, a form of which is annexed hereto as Attachment 7, an Affidavit of Title, annexed hereto as Attachment 8, an Affidavit of Consideration, annexed hereto as Attachment 9, and a Seller’s Residency Certification, annexed hereto as Attachment 10; and
WHEREAS, the City and the Redeveloper seek to enter into the Second Amendment and to effectuate a Closing in order that the Property may be: conveyed to Redeveloper and the Premises leased back to the City; subdivided; further remediated; and ultimately, redeveloped in accordance with the Original Redevelopment Agreement, as amended, the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1, et seq., the East Ward Redevelopment Plan, and all applicable Federal, State and Local laws, rules, and regulations.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK THAT:
1. The Mayor and/or a designee of the Mayor the Director of the Department of Economic and Housing Development are hereby authorized to enter into and execute the Second Amendment to the Redevelopment Agreement in substantially the form attached hereto as Attachment 1, with El Sid Properties, LLC, 500 Avenue P, Newark, New Jersey 07105-4802.
2. All other terms and conditions of the Agreement not amended by the First Amendment are hereby ratified and confirmed and shall remain in full force and effect.
3. The Mayor and/or a designee of the Mayor and the Director of the Department of Economic and Housing Development are hereby authorized to effectuate certain business terms and conditions related to the Property, including the Premises, and the Redevelopment Agreement, as amended, and may execute and enter into any related documents which may be appropriate and necessary in order to effectuate the terms and conditions of the Redevelopment Agreement, the First Amendment, and the Second Amendment, all in forms which shall be subject to the approval of the City of Newark Corporation Counsel, including the following: the Purchase Money Mortgage, the Promissory Note, the Deed for the Property the Affidavit of Title, the Affidavit of Consideration, and the Seller’s Residency Certification, all of which are attached hereto as Attachments 5, 6, 7, 8, 9 and 10, respectively.
4. The Redeveloper shall have thirty (30) days from the date this Resolution is certified by the Office of the City Clerk to execute the Second Amendment and return same to the Department of Economic and Housing Development. Should Redeveloper fail to execute and return the Second Amendment within this thirty (30) day time period, the authorization provided by this Resolution shall be null and void, unless waived by the Mayor and/or the Mayor’s designee the Director of the Department of Economic and Housing Development hereto.
5. The Director of the Department of Economic and Housing Development shall place a copy of the executed Second Amendment and all such other executed documents and agreements authorized by this Resolution on file in the Office of the City Clerk.
6. This Resolution shall take effect immediately.
STATEMENT
This Resolution authorizes the execution of a Second Amendment to the Redevelopment Agreement (the “Second Amendment”), in substantially the form attached hereto, in order to, inter alia: (i) revise certain Project details relating to the Firing Range; (ii) acknowledge the need for subdividing the Property in order to provide for the Premises to be leased back to the City pursuant to a proposed Lease Agreement which is to be considered together with the Second Amendment; (iii) provide certain protections to the Redeveloper during the City’s occupancy of and operation of the Firing Range outside of a Lease Agreement; and (iv) clarify the terms regarding the Environmental Remediation Credit as well as other financial terms pertaining to the Closing and the conveyance of title for the Property from the City to Redeveloper. The Second Amendment acknowledges that the Redeveloper shall be granted certain Environmental Remediation Credits against the Purchase Price for Remediation Costs incurred. To effectuate Closing, the mortgage, proposed form of Deed, and other Closing documents are attached to this Resolution. The Second Amendment seeks to effectuate Closing such that the Property may be: conveyed to Redeveloper and the Premises leased back to the City; subdivided; further remediated; and ultimately, redeveloped in accordance with the Original Redevelopment Agreement, as amended, the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1, et seq., the East Ward Redevelopment Plan, and all applicable Federal, State and Local laws, rules, and regulations.
ADDRESS WARD BLOCK LOT SF
704-738 Doremus Avenue East 5074 1 292205
Attachment 1 (to the Resolution)
Second Amendment to the Redevelopment Agreement
Attachment 2 (to the Resolution)
DEPARTMENT OF Public Safety, POLICE DIVISION Certification letter
Attachment 3 (to the Resolution)
Department of Engineering
Certification Letter
Attachment 4 (to the Resolution)
Form of Long-Term Lease Agreement
Attachment 5 (to the Resolution)
Form of Purchase Money Mortgage
Attachment 6 (to the Resolution)
Form of Promissory Mortgage Note
Attachment 7 (to the Resolution)
Form of Deed
Attachment 8 (to the Resolution)
Affidavit of Title
Attachment 9 (to the Resolution)
Affidavit of Consideration
Attachment 10 (to the Resolution)
Seller’s Residency Certification