Title
Dept./ Agency: Economic and Housing Development
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Type of Service: Issuance and sale of redevelopment area bonds
Purpose: Authorizing the Execution and Delivery by the City of a Pledge and Assignment Agreement and such other documents and instruments as necessary for the issuance by the New Jersey Economic Development Authority of its’ Redevelopment Area Taxable Bonds (East Park Street Hospitality Urban Renewal, Inc., 22-26 East Park Street, Newark, New Jersey 07102 - 2018 Project), in an aggregate principal amount of $420,000.00.
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 “Redevelopment Law”) promotes the social and economic improvement of the State and its’ several municipalities, in part, by providing a process for the redevelopment, rehabilitation, and improvement of commercial and industrial facilities; and
WHEREAS, pursuant to and in accordance with the provisions of the Redevelopment Area Bond Financing Law, constituting Chapter 310 of the Pamphlet Laws of 2001 of the State, and the acts amendatory thereof and supplemental thereto (the “Redevelopment Bond Law”, as codified in N.J.S.A. 40A:12A-64 et seq.), specifically N.J.S.A. 40A:12A-66(a), the City is authorized to provide for a tax abatement within a redevelopment area and for payments in lieu of taxes (“PILOTS”) in accordance with certain applicable provisions of the Long Term Tax Exemption Law, constituting Chapter 431 of the Pamphlet Laws of 1991 of the State, and the acts amendatory thereof and supplement thereto (the “Long Term Tax Law”, as codified in N.J.S.A. 40A:20-1 et seq. and together with the Redevelopment Law and the Redevelopment Bond Law, the “Acts”); and
WHEREAS, pursuant to and in accordance with the provisions of the Redevelopment Bond Law, specifically N.J.S.A. 40A:12A-67(a), the City may issue, or cause to be issued, bonds for the purpose of financing all or a portion of the cost of redevelopment projects, which bonds may be secured by PILOTS; and
WHEREAS, East Park Street Hospitality Urban Renewal, Inc., 22-26 East Park Street, Newark, New Jersey 07102 (the “Entity”) is undertaking a redevelopment project located at the real property commonly known as 22-26 East Park Street and identified on the Official Tax Map of the City as Block 125, Lots 84, 86, 87, 88, 91, 92, 93, 94, 96 and 108 (the “Property”), consisting of a 102-room boutique hotel and retail space (the “Project”); and
WHEREAS, through Ordinance 6PSF-d, adopted on April 15, 2015, and subsequently amended through Ordinance 6PSF-h, adopted on October 7, 2015, the City granted a long term tax exemption to the Entity under N.J.S.A. 40A:20-1 et seq., as amended, (the “Tax Exemption Law”) with respect to the Project; and
WHEREAS, in accordance with the Tax Exemption Law, on November 30, 2015, the City and the Entity executed a Financial Agreement, which provides for the payment of an Annual Service Charge (as defined in the “Financial Agreement”) to be made by the Entity to the City (the “Annual Service Charge”) and further provides for a pledge of a portion of such Annual Service Charge to the debt service on bonds issued to fund a portion of the cost of the Project (the “Pledged Annual Service Charge”); and
WHEREAS, as set forth in the Financial Agreement, the New Jersey Economic Development Authority (the “EDA”) shall be the issuer of the bonds in an amount not to exceed Four Hundred Twenty Thousand Dollars and Zero Cents ($420,000.00) (the “Bonds”), which Bonds shall be secured by, inter alia, the pledge and assignment of Pledged Annual Service Charge as provided in the Pledge and Assignment Agreement by and between the City, U.S. Bank National Association, the Trustee for the Bonds (the “Trustee”) and the EDA, (the “Pledge Agreement”) the form of which is attached hereto as Exhibit A, and the full faith and credit of the City shall not be pledged to the payment of the principal of and the interest on the Bonds; and
WHEREAS, the EDA plans to execute the Financial Agreement at the closing for the issuance of the Bonds; and
WHEREAS, the City now desires to authorize and approve the Pledge and Assignment Agreement and such other instruments, opinions, affidavits, certificates, resolutions, documents, agreements or other papers as may be deemed necessary for the issuance of the Bonds.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
Section 1. The Pledge assigning the Pledged Annual Service Charges to the Trustee as security for Bonds shall be substantially in the form attached to this Resolution as Exhibit A and made a part hereof, and the Mayor and the City Clerk are each hereby authorized to execute the Pledge and Assignment Agreement with such changes, revisions or alterations therefor as may be approved by the Officer executing the same after consultation with the City’s Corporation Counsel and/or Bond Counsel, such approval to be conclusively evidenced by the execution thereof.
Section 2. The Mayor and the Acting Director of the Department of Housing and Economic Development, the Chief Financial Officer, the Business Administrator and the City Clerk are hereby designated, authorized and directed to perform or determine any other matters or details relating to the Bonds, to do or perform or cause to be done or performed any and all acts as such Officers or the City’s Corporation Counsel may deem necessary or appropriate in order to effect the proper issuance, execution and delivery of the Bonds, and to execute, among other things, and any and all instruments, opinions, affidavits, certificates, resolutions, documents, agreements or other papers as may be deemed necessary.
Section 3. This resolution shall take effect immediately.
STATEMENT
This resolution hereby approves the form of the Pledge and Assignment Agreement and authorizes certain Officers of the City of Newark to do or perform such acts as deemed necessary for the issuance of bonds by the New Jersey Economic Development Authority’s Redevelopment Area Taxable Bonds (East Park Street Hospitality Urban Renewal, Inc., 22-26 East Park Street, Newark, New Jersey 07102 - 2018 Project) in an aggregate principal amount of Four Hundred Twenty Thousand Dollars and Zero Cents ($420,000.00).
EXHIBIT A
Form of Pledge and Assignment Agreement