Title
Dept./ Agency: Economic and Housing Development
Action: (X) Ratifying (X) Authorizing (X) Amending
Type of Service: Private Sale/Redevelopment
Purpose: A First Amendment to the Redevelopment Agreement to subordinate the City’s reverter rights to permit financing necessary for the redevelopment of a two-family house project.
Entity Name: Algorithm Real Estate Holdings Limited Liability Company
Entity Address: 200 Renner Avenue, Newark, New Jersey 07112
Sale Amount: $20,831.40
Cost Basis: (X) $6.00 PSF ( ) Negotiated ( ) N/A ( ) Other:
Assessed Amount: $22,700.00
Appraised Amount: $0.00
Contract Period: To commence within three (3) months and be completed within eighteen (18) months from the transfer of property ownership from the City to the Redeveloper
Contract Basis: ( ) Bid ( ) State Vendor ( ) Prof. Ser. ( ) EUS
( ) Fair & Open ( ) No Reportable Contributions ( ) RFP ( ) RFQ
(X) Private Sale ( ) Grant ( ) Sub-recipient ( ) n/a
(Address/Block/Lot/Ward)
268 Seymour Avenue/Block 3597/Lot 18/South Ward
Additional Information:
Resolution 7R2-c adopted on August 20, 2019, authorized the Sale and Redevelopment Agreement.
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WHEREAS, pursuant to Resolution 7R2-c adopted on August 20, 2019 the Mayor and the Deputy Mayor/Director of the Department of Economic and Housing Development were authorized to enter into and execute a Redevelopment Agreement with Algorithm Real Estate Holdings, LLC, 200 Renner Avenue, Newark, New Jersey 07112, for the sale of land owned by the City located at 268 Seymour Avenue, Newark, New Jersey 07112 and identified on the official tax map of the City as Block 3597, Lot 18, for a purchase price of Twenty Thousand Eight Hundred Thirty One Dollars and Forty Cents ($20,831.40), so that Algorithm Real Estate Holdings, LLC may construct a two-family house on the property; and
WHEREAS, such sale was authorized pursuant to N.J.S.A. 40A:12A-13 which requires that such conveyance be subject to the condition that the City may, at its election, seek reversion of title to the Property back to the City in the event of a Default as defined in the Redevelopment Agreement (the “Reverter Right”); and
WHEREAS, the City and Redeveloper closed on the sale of the Property to Redeveloper on May 12, 2020; and
WHEREAS, Algorithm Real Estate Holdings, LLC has secured construction financing from Atlantic Coast Life Insurance Company (together with its successors and/or assigns, “Lender”) in the principal amount of $335,000.00 (the “Loan”), to develop the Project, which Loan will be evidenced by a Promissory Note in said principal amount, and will be secured by a mortgage on the Property; and
WHEREAS, as a condition of the Loan, the Lender has requested that the City subordinate its Reverter Right to the Lender’s mortgage; and
WHEREAS, pursuant to N.J.S.A. 40:60-51.2, “Any municipality is authorized and empowered, by resolution of the Governing Body thereof, to waive, release, modify or subordinate any terms, covenants, conditions, limitations or reverters imposed in sales and conveyances of lands as to the erection, alteration or demolition of buildings or any other use to be made of land heretofore imposed by said municipality to accomplish the purposes for which such lands were sold and conveyed either at public or private sale including those set forth pursuant to Section 21 of P.L.1971, c. 199 (C.40A:12-21), but only after public hearing held before such governing body, of the holding of which notice describing the lands in question, and the terms, covenants, conditions, limitations or reverters to be waived, released, modified or subordinated, and, if to be modified or subordinated, describing the manner in which the same shall be modified or subordinated, shall first have been given by advertisement published once each week for two weeks in a newspaper published in said municipality or, if no newspaper be published therein, then in a newspaper circulating in such municipality, provided, however, that the power herein granted shall not be exercised to impair any vested or contractual rights of third parties”; and
WHEREAS, the Mayor and/or his designee the Deputy Mayor/Director of the Department of Economic and Housing Development determined that the Project is in the best interests of the City and recommend subordinating the City’s Right of Reverter contained in the Redevelopment Agreement and the deed, so as to accomplish the Project.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Mayor and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to enter into the First Amendment to the Redevelopment Agreement with the Redeveloper acknowledging Lender’s mortgage and the subordination of the City’s Reverter Rights thereto, substantially in the form attached hereto, relating to the property located at 268 Seymour Avenue, Newark, New Jersey 07112, as shown on the official tax map of the City as Block 3597, Lot 18 (the “Property”), which is located in the South Ward, to permit the construction of a two-family house.
2. The Deputy Mayor/Director of the Department of Economic and Housing Development shall place a filed copy of the fully executed First Amendment to the Redevelopment Agreement with the Office of City Clerk.
STATEMENT
Adoption of this resolution shall, in accordance with N.J.S.A. 40:60-51.2, authorize the Mayor and/or Deputy Mayor/Director of the Department of Economic and Housing Development, to subordinate the City’s Reverter rights, to permit financing necessary for the construction of a two-family house on the property located at 268 Seymour Avenue, Newark, New Jersey 07112, as shown on the official tax map of the City as Block 3597, Lot 18, located in the South Ward.