Title
Dept/ Agency: Economic and Housing Development
Action: ( ) Ratifying ( x ) Authorizing ( x ) Amending
Type of Service: Private Sale/Redevelopment
Purpose: Authorize Execution of the Second Amendment of the Agreement for the Sale and Redevelopment of 140-166 Raymond Boulevard
Entity Name: 140 Raymond Urban Renewal, LLC
Entity Address: 494 Broad Street, Newark, New Jersey 07102
Sale Amount: $3,200,000.00 subject to certain credits as set forth in the Agreement
Cost Basis: () PSF ( X ) Negotiated ( ) N/A ( ) Other:
Assessed Amount: $0.00
Appraised Amount: $0.00
Contract Period: Construction shall commence no later than six (6) months from closing and completed within twenty-four (24) months from commencement of construction
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)
140-166 Raymond Boulevard /Block 5002/Lot 3/East Ward
140-156 Raymond Boulevard Rear/Block 5002/Lot 14/East Ward
Additional Information:
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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 "Act"), authorizes municipalities to participate in the redevelopment and improvement of areas that are in need of redevelopment or rehabilitation; and
WHEREAS, the Municipal Council of the City of Newark (the “Governing Body”) identified certain properties in the City to be considered for designation as an “area in need of rehabilitation and/or an area in need of redevelopment” under the Redevelopment Law; and
WHEREAS, in furtherance of the objectives of the Redevelopment Law, the City determined that certain properties, Block 5002, Lots 3, 5, 14 and 16 on the Official Tax Map of the City of Newark, owned by the City of Newark, met the criteria set forth in the Redevelopment Law to be deemed an “area in need of redevelopment” (the “City Property”); and
WHEREAS, the Property was declared a “Super Fund “ site by the USEPA and the New Jersey DEP with over 200 potentially responsible parties (PRP’S), and with the Du Pont Company being the primary contributor; and
WHEREAS, on March 1, 2000, the Governing Body authorized and approved the Bayonne Barrel Redevelopment Plan pursuant to Ordinance 6S&Fh March 1, 2000; and
WHEREAS, in or about May 2002, the City and BayBar executed an Agreement for the Sale of Land and Redevelopment of 140-166 Raymond Boulevard (the “Redevelopment Agreement”) which was authorized by Resolution 7Ra(S) adopted by the Governing Body on May 24, 2002, in connection with the redevelopment of the City Property pursuant to the Bayonne Barrel Redevelopment Plan; and
WHEREAS, the Redevelopment Agreement provided for the conveyance by the City to BayBar of the City Property; and
WHEREAS, the Redevelopment Agreement further provided for the City’s acquisition of certain property from the New Jersey Department of Transportation (“NJDOT”), known as Parcels VXW13 and VX28 (collectively, referred to herein and in the Redevelopment Agreement as the “NJDOT Property”), by Contract of Sale dated on or about May 11, 2005; and
WHEREAS, the Redevelopment Agreement further provided for the subsequent or simultaneous conveyance of the NJDOT Property by the City to BayBar such that BayBar’s project pursuant to the Redevelopment Agreement would encompass both the City Property and the NJDOT Property, which is necessary to provide for an access road to the City Property; and
WHEREAS, BayBar assigned all of its right, title and interest in and to the Redevelopment Agreement to 140 Raymond pursuant to an assignment agreement dated June 21, 2019; and
WHEREAS, the City and 140 Raymond executed a First Amendment to the Redevelopment Agreement (“First Amendment”) and an Access Agreement for the City Property (“Access Agreement”), which was authorized by Resolution 7R2-b May 20, 2020, adopted by the Governing Body on September 2, 2020, which among other things:
(i) ratified BayBar’s assignment of all of its rights, title, and interest in the Redevelopment Agreement to 140 Raymond, and
(ii) authorized 140 Raymond to enter into a Long-Term Ground Lease (defined below) with CenterPoint as 140 Raymond’s tenant, and
(iii) authorized the execution of the Access Agreement between the City and 140 Raymond, which granted to 140 Raymond and any of its assigns and tenants, access to the City Property for investigation and future improvements, and
(iv) addressed changes to the ongoing environmental remediation efforts on the City Property consistent with new environmental laws effective after the adoption of the Redevelopment Agreement; and
WHEREAS, 140 Raymond and CenterPoint have entered into a certain Agreement to Enter into Ground Lease (“Ground Lease”) regarding the City Property and the NJDOT Property; and
WHEREAS, since the adoption of the First Amendment, NJDOT has advised the City that (i) the NJDOT Property must remain for the benefit of the public; (ii) the City’s fee simple title to the NJDOT Property cannot be conveyed to a private entity; (iii) the NJDOT Property shall be conveyed to the City for no consideration; and (iv) the terms of the conveyance of the NJDOT Property to the City shall be memorialized in a new contract of sale between the parties; and
WHEREAS, by Ordinance 6PSF-h 22-0580 adopted on August 16, 2022, the City authorized the execution of the excess land request to NJDOT for the acquisition of the NJDOT Property and the acceptance of the NJDOT Property for $1.00, to be used for a public purpose; and
WHEREAS, as a condition precedent to Closing (as defined herein), the City shall acquire the NJDOT Property; and
WHEREAS, simultaneous with Closing (as defined herein), the City intends on entering into a non-exclusive, perpetual easement with CenterPoint as Successor Redeveloper, which shall allow CenterPoint to use the NJDOT Property as an access parcel for the City Property and establish the terms and conditions by which CenterPoint shall improve and maintain the NJDOT Property (“Easement Agreement”), in substantially the form attached hereto as Exhibit A and incorporated herein by reference; and
WHEREAS, simultaneous with the Closing (as defined herein), 140 Raymond and CenterPoint intend on entering into an assignment agreement, whereby, among other things, 140 Raymond shall transfer and assign to CenterPoint, and CenterPoint will accept and assume, all of 140 Raymond’s rights, obligations, and responsibilities under the Redevelopment Agreement (“140 Raymond/CenterPoint Assignment Agreement”); and
WHEREAS, CenterPoint proposes, consistent with the Redevelopment Agreement and First Amendment, to redevelop the City Property into a warehouse/distribution facility of no less than 100,000 square feet and up to 200,000 square feet, or a facility for sea or port related uses of no less than 70,000 square feet and up to 200,000 square feet, which may include a truck terminal or a commercial or retail use and all related site improvements, including any and all hardscaping and landscaping, parking and ancillary uses (the “Project”); and
WHEREAS, the City finds that CenterPoint has the financial ability, experience and expertise to redevelop the City Property in accordance with the provisions of the Redevelopment Agreement and First Amendment; and
WHEREAS, the City acknowledges and consents to the 140 Raymond/CenterPoint Assignment Agreement; and
WHEREAS, the City intends on conveying title to the City Property to CenterPoint at Closing (as defined herein), (i) immediately after 140 Raymond and CenterPoint enter into and execute the 140 Raymond/CenterPoint Assignment Agreement; and (ii) simultaneous with the City and CenterPoint entering into and executing the Easement Agreement; and
WHEREAS, the City Property and the NJDOT Property (together, the “Property”) has been and is currently being remediated by members of the Bayonne Barrel & Drum Site Potentially Responsible Party Group (“PRP Group”) under the oversight of a Licensed Site Remediation Professional and pursuant to a Memorandum of Agreement between the PRP Group and the New Jersey Department of Environmental Protection (“NJDEP”) effective December 11, 2002; and
WHEREAS, BayBar has caused the PRP Group to expend over $30 million to date, in remediation of contaminants and the installation of an earthen “cap”, in addition to millions of dollars expended by BayBar to effectuate the environmental investigation and remediation of the Property; and
WHEREAS, over the past two years, the NJDEP issued Notices of Technical Deficiency (“NOTD”) for the Property, the New Jersey Turnpike Authority Soil Remedial Action Permit (“NJTA Soil RAP”) applications, and the Groundwater Remedial Action Permit (“Groundwater RAP”) application for the Property, requiring significant additional investigation of several areas of the Property due to presence of substances that have been newly classified by the NJDEP as contaminants; and
WHEREAS, Section 9 of the First Amendment, relying on the progress of the remediation at the time of its execution, sets forth certain deadlines for the Closing (no later than 12 months after the date of the First Amendment) and commencement of construction activities (6 months from the Closing, with extensions of up to 6 months); and
WHEREAS, since execution of the First Amendment, and for the reasons noted above, the PRP Group has informed the Parties that, due to a number of newly classified contaminants and open issues raised by NJDEP, the remediation will take longer than originally anticipated; and
WHEREAS, CenterPoint, in 2021, engineered, designed and obtained Site Plan approvals for a 170,000 square foot building and accompanying parking, with all appropriate infrastructure; and
WHEREAS, while the PRP Group continues to address the environmental remediation, CenterPoint proposes to pursue the necessary entitlements and approvals for an interim surface parking use (“Interim Use”, as further defined herein) until the remediation is approved by the NJDEP in accordance with the terms of Section 6 herein; and
WHEREAS, BayBar entered into the “Agreement for Remediation and Redevelopment of 140-166 Raymond Boulevard, Newark, New Jersey”, dated as of July 16, 2010 (“PRP Remediation Agreement”) which dictates the conditions under which the PRP Group will allow the Designated Developer to penetrate the remediation cap, proceed with construction and more significantly, construction of either the Interim Use or the Improvements; and
WHEREAS, the PRP Group is negotiating an amendment to a PRP Remediation Agreement to allow the Designated Developer to proceed with construction and more significantly, construction of either the Interim Use or the Improvements, which amendment shall include terms that, among other things, provide for PRP Group approval for penetration of the remediation cap and posting additional significant financial guarantees (the “PRP Remediation Agreement Amendment”); and
WHEREAS, the Parties acknowledge and agree that, over time, certain laws, conditions and circumstances have materially changed and, thus, the First Amendment must be amended to reflect these material changes; and
WHEREAS, in the interim, the Parties desire to amend certain portions of the First Amendment and the Redevelopment Agreement; and
WHEREAS, the Parties have engaged in negotiations relative to the Project and the Property, and the City has determined that in furtherance of the goals and objectives of the Redevelopment Plan and the Remediation of the Property, it is in the City’s best interest to enter into this Second Amendment to the Redevelopment Agreement with 140 Raymond and CenterPoint for the purpose of setting forth in detail the City’s, 140 Raymond’s and CenterPoint’s respective undertakings, rights and obligations in connection with the development and construction of the Project.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Mayor and/or the Deputy Mayor/Director of the Department of Economic and Housing Development of the City, or either of them, hereby: authorize the Mayor and/or Deputy Mayor/Director of the Department of Economic and Housing Development to enter into the Second Amendment of the Agreement for the Sale and Redevelopment of Land by and Between the City of Newark, 140 Raymond Urban Renewal, LLC and CenterPoint Raymond Urban Renewal, LLC (the “Amended Agreement), in substantially the form attached hereto as Exhibit A.
2. 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 Amended Agreement and may enter into any related documents which may be necessary in order to effectuate the Amended Agreement.
3. The executed Amended Agreement shall be placed on file in the Office of the City Clerk by the Deputy Mayor/Director of Department of Economic and Housing Development.
4. The Deputy Mayor/Director of Department of Economic and Housing Development is authorized to enter into a maximum of two (2) six (6) month extensions of any timeframe set forth in the Agreement, subject to full written disclosure of such extension(s) (in the form of a signed Memorandum to be submitted to the Office of the City Clerk prior to adoption) to the Municipal Council of the City of Newark by the Deputy Mayor/Director of the Department of Economic and Housing Development and the approval of the City of Newark’s Corporation Counsel.
5. The Redeveloper shall have thirty (30) days from the date this resolution is certified by the Office of the City Clerk to execute the attached Amended Agreement for the Sale and Redevelopment of Land and return same to the Department of Economic Housing Development. Should the Redeveloper fail to execute and return the attached Amended Agreement within this thirty (30) day time period, the authorization provided by this resolution shall be null and void, unless the Acting Deputy Mayor/Director of Department of Economic and Housing Development agrees in writing to extend this thirty (30) day period.
STATEMENT
This resolution authorizes the Mayor and/or his designee, the Director of the Department of Economic and Housing Development, on behalf of the City of Newark, to enter into a second amended redevelopment agreement with 140 Raymond Urban Renewal, LLC, with an address of 494 Broad Street, Newark, New Jersey 07102, and CenterPoint Raymond Urban Renewal LLC, with an address of 1808 Swift Drive, Oak Brook, Illinois 60523, for the redevelopment of the properties identified on the City of Newark Tax Map Block 5002, Lots 3, 5, 14, and 16 in order to permit them addition time to complete their development.