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AN ORDINANCE AUTHORIZING THE MAYOR, AND/OR HIS DESIGNEE, THE DEPUTY MAYOR/DIRECTOR OF THE DEPARTMENT OF ECONOMIC AND HOUSING DEVELOPMENT TO AUTHORIZE THE SALE AND TRANSFER OF THE CITY OF NEWARK PROPERTY, 324-346 SOUTH ORANGE AVENUE, IDENTIFIED ON THE CITY OF NEWARK TAX MAP AS BLOCK 268, LOT 1 and 1 BLDG AND BLOCK 269, LOT 4 TO ESSEX RESERVOIR URBAN RENEWAL LLC FOR THE AMOUNT OF $1.00, PURSUANT TO AN AGREEMENT FOR SALE AND REDEVELOPMENT OF LAND.
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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 is the owner of the property located at 324-346 South Orange Avenue and designated as Block 268 Lot 1 and 1 BLDG and Block 269, Lot 4 on the official tax map of the City of Newark (together with all structures, property rights and related claims and interests, the “Property”); and
WHEREAS, on July 14, 1975, the City entered into a fifty (50) year Lease Agreement with Reservoir Associates, Ltd. (“Reservoir”) for Reservoir to construct and operate a multifamily residential building on the Property containing eighty (80) affordable residential dwelling units with rents restricted for low- and moderate-income families; and
WHEREAS, Reservoir constructed a 100% affordable multifamily residential building containing eighty (80) affordable residential dwelling units on the Property; however, after construction, Reservoir neglected the Property causing the eighty (80) residential dwelling units to deteriorate; and
WHEREAS, on or about January 13, 2023, the City filed a Verified Complaint under docket number ESX-L-340-23 (the “Law Division Case”) seeking temporary restraints and injunctive relief by way of an Order to Show Cause against Reservoir for certain violations of the Housing Code of the City of Newark 18:7-1.31 et. seq., and left unabated at the housing facility on the Property; and
WHEREAS, the Complaint further requested the appointment of a receiver in connection with the Property as a result of the deplorable and detrimental conditions of the Property and the repeated and continued failure of Reservoir to abide by the housing codes and regulations of the City to remedy the violations; and
WHEREAS, subsequent to the commencement of the Law Division Case, on or about September 15, 2023, a Chapter 7 Bankruptcy Petition was voluntarily initiated in the United States Bankruptcy Court for the District of New Jersey by Reservoir, bearing Case No. 23-18073 (RG) (the “Bankruptcy Case”); and
WHEREAS, on October 4, 2023, an Order was entered by the Honorable Rosemary Gambardella, United States Bankruptcy Judge, dismissing the Bankruptcy Case pursuant to 11 U.S.C. § 305(a) and granting relief from the automatic stay pursuant to 11 U.S.C. § 362(d) permitting the continuance of the Law Division Case action for the appointment of a receiver; and
WHEREAS, the Urban League of Essex County, an entity that wholly owns the Redeveloper and a New Jersey nonprofit entity, was approached by the City to serve as an immediate overseer and potential long-term stakeholder of the Property and the housing facilities situated thereon; and
WHEREAS, on October 12, 2023, an Order was entered by the Honorable Bridget Stecher, New Jersey Superior Court Judge in the Law Division Case, appointing the Redeveloper as the receiver for the Property to provide immediate intervention to protect the health and safety of the Property residents and oversee the management of the Property; and
WHEREAS, the October 12, 2023 Order expressly noted that it was known and understood by the Parties that the Urban League of Essex County or its nominee may be designated as the redeveloper and/or transferee of certain rights or interests in connection with the Property, including the housing facilities situated thereon; and
WHEREAS, on July 2, 2025, the Law Division Case and Bankruptcy Case were closed by way of an Order Terminating the Receivership for the Property; and
WHEREAS, the Redeveloper is now proposing to purchase the Property from the City and rehabilitate the existing eighty (80) affordable residential dwelling units (the “Project”); and
WHEREAS, the City wishes to enter into a Redevelopment Agreement with the Redeveloper for the purpose of setting forth in detail each Parties’ respective undertakings, rights and obligations in connection with the development and construction of the Project; and
WHEREAS, the Redeveloper will implement the development, design, financing and construction of the Project in conformity with the Redevelopment Plan and in accordance with the Redevelopment Law; and
WHEREAS, the City and Redeveloper desire to enter into an Agreement in order to memorialize the terms and conditions of the Project, sale and redevelopment of the Property; and
WHEREAS, pursuant to N.J.S.A. 40A:12A-8(e) and (f) of the Redevelopment Law, the Department of Economic and Housing Development has recommended that the City enter into an agreement for the sale and redevelopment of the Property with the Redeveloper for the consideration of one ($1.00) dollar ("Purchase Price"), which price, and under such terms as the City deems to be reasonable, for the purpose of redeveloping the Property, in accordance with the Act, the Agreement, and the Redevelopment Plan.
NOW, THEREFORE, BE IT ORDAINED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Recitals set forth above are incorporated herein as if set forth at length.
2. The Mayor of the City of Newark, and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development are hereby authorized to effectuate the sale and transfer of the City of Newark Property identified on the City Tax Map as Block 268 Lot 1 and 1 BLDG and Block 269, Lot 4 to Essex Reservoir Urban Renewal LLC pursuant to an Agreement for the Sale and Redevelopment of Land.
3. The Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to effectuate certain business terms and conditions related the sale and transfer of the property commonly known as 324-346 South Orange Avenue and designated as Block 268, Lot 1 and 1 BLDG and Block 269, Lot 4 on the tax map of the City of Newark in the County of Essex, State of New Jersey (the “Property”) and may enter into and execute any related documents which may be necessary to effectuate same, including but not limited a Quitclaim Deed with a Right of Reverter clause for the Property.
4. Said Quitclaim Deed conveying title to the Property to the Redeveloper shall be approved as to form and legality by the City’s Corporation Counsel and attested to and acknowledge by the City Clerk.
5. The Mayor of the City of Newark, and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development are hereby authorized to execute a Declaration of Covenants and Restrictions as agreed to by the City and the Redeveloper and approved as to form and legality by the City’s Corporation Counsel and attested to and acknowledged by the City Clerk.
6. The Deputy Mayor/Director of the Department of Economic and Housing Development shall place a copy of the executed Quitclaim Deed, and all such other executed agreements authorized by this Ordinance on file in the Office of the City Clerk.
STATEMENT
This Ordinance authorizes the Mayor of the City of Newark, and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development to effectuate the sale and transfer of the City of Newark property commonly known as 324-346 South Orange Avenue and designated as Block 268, Lot 1 and 1 BLDG and Block 269, Lot 4 to Essex Reservoir Urban Renewal LLC for the amount of One ($1.00) Dollar and Zero Cents.