Title
Dept/ Agency: Economic and Housing Development
Action: (X) Ratifying (X) Authorizing (X) Amending
Type of Service: Grant Agreement
Purpose: Amending and Restating Grant Agreement with United Muslim, Inc., authorized by Resolution 7R2-b adopted on September 5, 2019, to increase the original authorized grant amount from $350,000.00 to $658,000.00.
Entity Name: United Muslim, Inc.
Entity Address: South Orange, New Jersey 07079
Grant Amount: $308,000.00 from the Community and Economic Development Dedicated Trust Fund
Total Project Cost: $1,569,519.50
City Contribution: $658,000.00
Other Funding Source/Amount: $350,000.00 from the City’s Community and Economic Development Dedicated Trust Fund
Grant Period: Construction shall commence within three (3) months from execution and shall be completed within twenty-four (24) months following construction commencement
Contract Basis: ( ) Bid ( ) State Vendor ( ) Prof. Ser. ( ) EUS
( ) Fair & Open ( ) No Reportable Contributions ( ) RFP ( ) RFQ
( ) Private Sale (X) Grant ( ) Sub-recipient ( ) n/a
List of Property: (if applicable)
(Address/Block/Lot/Ward)
807-837 Hunterdon Street/Block 3589/Lot 40/South Ward
Additional Information:
Resolution 7R2-b adopted on September 5, 2019, approved City grant funding in the amount of $350,000.00.
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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 encourages and supports the development of safe places for Newark residents to host events, educational classes and contribute to the economic revitalization of the City; and
WHEREAS, in order to stimulate the reinvigoration of the City, by Resolution 7Rdo(AS) adopted on June 15, 2005, the entire City was designated as an area in need of rehabilitation pursuant to the Act; and
WHEREAS, by Ordinance 6S&FI, adopted on April 7, 1999, the Municipal Council adopted the South Ward Redevelopment Plan (together with all amendments, the “Redevelopment Plan”) which provides for the redevelopment of certain City-owned parcels within the South Ward of the City; and
WHEREAS, by Ordinance 6S&Fd(S), adopted on August 17, 2005, the Municipal Council adopted the Third Amendment to the South Ward Redevelopment Plan, which authorizes the City to provide grant and loan funding to qualified redevelopers in furtherance of redevelopment projects located throughout the South Ward; and
WHEREAS, the Redevelopment Plan is applicable to the Property, as that term is defined herein, however, pursuant to the City’s Zoning Ordinance, the Redevelopment Plan comprises “overlay zoning” consistent with the holding in Weeden v. City Council of Trenton, et al., 391 N.J. Super. 214, 917 A.2d 815; and
WHEREAS, on September 5, 2019, under Resolution 7R2-b (the “2019 Resolution”), the Municipal Council authorized the Mayor of the City of Newark and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development, to use of up to Three Hundred Fifty Thousand Dollars and Zero Cents ($350,000.00) (the “First Grant”) of funds from the City’s Community and Economic Development Dedicated Trust Fund (the “Trust Fund”) for the purpose of funding a grant to United Muslim, Inc., 115 South Kingman Road, P.O. Box 553, South Orange, New Jersey 07079 (the “Redeveloper” or “Entity”) for use in connection with the rehabilitation of a building located at 807-837 Hunterdon Street, Newark, New Jersey 07112 in the South Ward, identified as Block 3589, Lot 40 on the Official Tax map of the City of Newark, County of Essex, State of New Jersey (the “Property”) which shall be used upon completion thereof for a non-denominational community center with three (3) offices, storage space, a kitchen, two (2) bathrooms on each floor with an adjacent thirty-two (32) car parking lot to provide a safe place for events, weddings, and community gatherings, as further set forth in the Project Proposal previously submitted to the City (collectively, the “Project”); and
WHEREAS, since the Property was previously owned by the City and conveyed to the Entity, on January 10, 1995, and subsequently conveyed to the Entity on March 5, 2004, the Property continues to qualify for redevelopment under the Redevelopment Plan; and
WHEREAS, as authorized by the Municipal Council pursuant to the 2019 Resolution, the City funded the First Grant, which funds the Redeveloper used for construction costs related to the Project; and
WHEREAS, construction of the Project has been disrupted and delayed due to the lack of additional funding needed to complete construction and development of the Project; and
WHEREAS, the Project currently has a $308,000.00 funding gap that must be bridged in order to make the Project financially feasible; and
WHEREAS, N.J.S.A. 40A:12A-8(f) of the LRHL authorizes municipalities to provide grants to redevelopers to provide financial assistance for the performance of redevelopment activities in order to implement redevelopment projects in accordance with redevelopment plans; and
WHEREAS, the Project continues to qualify for financial assistance since it is located within a redevelopment area and is being performed in order to implement the Redevelopment Plan; and
WHEREAS, the Municipal Council recognizes the need to complete the above Project and desires to finance the making of an additional capital grant in the amount of Three Hundred Eight Thousand Dollars and Zero Cents ($308,000.00) to the Redeveloper to be used to implement the Project; and
WHEREAS, pursuant to Resolution 7RG, adopted by the Municipal Council on November 6, 1985, the City authorized the establishment of the Trust Fund for the purpose of financing the development costs associated with redevelopment projects, urban revitalization projects, economic stabilization and stimulation projects, restoration and preservation of properties of special value for historic, architectural and esthetic reasons, and such other projects within the City which are consistent with the activities eligible for assistance under Title I of the Housing and Community Development Act of 1974, as amended (“Title I”); and
WHEREAS, the Project continues to be consistent with the activities set forth in Resolution 7RG adopted on November 6, 1985 and the activities eligible for assistance under Title I and the City further wishes to fund an additional capital grant to the Redeveloper in an amount not to exceed Three Hundred Eight Thousand Dollars and Zero Cents ($308,000.00) (the “Second Grant,” with the First Grant and Second Grant being collectively referred to herein as the “Grant”) from the amounts deposited in the Trust Fund in accordance with the Resolution 7RG adopted on November 6, 1985; and
WHEREAS, the Department of Economic and Housing Development desires to amend and modify the 2019 Resolution to authorize the Mayor of the City of Newark and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development to enter into and execute a Grant Agreement, in the form attached hereto, with the Redeveloper, which shall, among other things, increase the aggregate grant amount by Three Hundred Eight Thousand Dollars and Zero Cents ($308,000.00) from Three Hundred Fifty Thousand Dollars and Zero Cents ($350,000.00) to Six Hundred Fifty-Eight Thousand Dollars and Zero Cents ($658,000.00) for purposes of bridging the gap in financing to complete the construction of the Project; and
WHEREAS, pursuant to Resolution 7R2-a, adopted by the Municipal Council on July 10, 2019, the Municipal Council authorized the City to request advances from HUD pursuant to the terms and conditions of the Contract for Loan Guarantee Assistance Under Section 108 of the Housing and Community Development Act of 1974, as amended (42 U.S.C. §5308); and
WHEREAS, the City has decided not to move forward with the Section 108 funding for this Project and has decided to rescind Resolution 7R2-a adopted on July 10, 2019 in all respects; and
WHEREAS, the City has decided not to have the Redeveloper execute and deliver a Grant Agreement for the First Grant and instead the City and the Redeveloper shall execute and deliver the proposed Grant Agreement which shall combine the terms and conditions of the First Grant and the Second Grant.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Mayor of the City of Newark and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development, are each hereby authorized to enter into and execute a Grant Agreement with the Entity, in the form attached hereto (“Grant Agreement”), in the amount of Six Hundred Fifty-Eight Thousand Dollars and Zero Cents ($658,000.00) from the City’s Community and Economic Development Dedicated Trust Fund (the “Grant Funds”), to be used as financing assistance to develop and subsidize the costs of the Project which shall facilitate redevelopment of the City and implementing related activities. The City has previously authorized and funded a total of Three Hundred Fifty Thousand Dollars and Zero Cents ($350,000.00) of the Grant Funds to the Entity pursuant to the terms of the 2019 Resolution.
2. The Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to establish and record a declaration of covenants, conditions and restrictions to ensure that the City shall be repaid the full amount of the Grant Funds disbursed to the Entity upon the occurrence of an event of default under the Grant Agreement by the Entity by requiring the Entity to execute a separate Mortgage and Mortgage Note for the full amount of funding provided to the Entity in the Grant Agreement. Said covenants, conditions and restrictions shall run with the land and bind the Entity and any subsequent purchasers and owners, their heirs, executors, administrators and assigns and all persons claiming by, through or under their heirs, executors, administrators and assigns during the term of the Grant Agreement and the City shall discharge such Mortgage and lien in connection therewith upon its issuance of a Certificate of Completion for the Project.
3. The term of the Grant Agreement shall commence on the date of execution and delivery of the Grant Agreement by the Entity and the City and expire upon the City’s issuance of a Certificate of Completion for the Project as provided in the Grant Agreement.
4. The Entity shall be responsible for the recordation of the final fully executed Grant Agreement and the related Mortgage and any amendments thereto in the Office of the Essex County Register’s Office.
5. 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 Grant Agreement as permitted by New Jersey Law and may enter into subordination agreements, access and right of entry agreements and other relevant documents related to these fund allocations in forms subject to the approval of the Corporation Counsel. In addition, the Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to enter into a maximum of two (2) six (6) month extensions of the term set forth in the Grant Agreement and any contract timelines and milestones contained therein, provided that any contract timelines and milestones are not extended beyond the two (2) permitted six (6) month extensions, subject to full written disclosure (in the form of a signed memorandum to be submitted prior to adoption) to the Municipal Council by the Deputy Mayor/Director of the Department of Economic and Housing Development and the approval of the Corporation Counsel.
6. The Entity must adhere to all milestones and timelines in the Project Schedule as further set forth in the Grant Agreement. The Project must conform to the City of Newark Design and Construction Standards Guidelines for New Home Construction, including standards for environmental sustainability and energy efficiency, as established by the Department of Economic and Housing Development. Should the Entity fail to complete the Project within the specified time frame set forth in the Grant Agreement, then the City, in its sole discretion, in addition to any other remedy available by the Grant Agreement or as allowed by law, may direct the Entity to repay all funding authorized in the Grant Agreement.
7. The Entity must remain in compliance with all municipal, State and Federal laws including, but not limited to the City of Newark’s Minority Set-Aside Ordinance (6S&Fd adopted on April 5, 1995) and its Affirmative Action Plan (7Rbp, adopted on March 1, 1995) and Federal Executive Order 11246 (as amended by Executive Orders 11375 and 12086) with respect to the award of goods and services, as may be amended from time to time. The Entity has agreed to ensure that a minimum of 40% of the workers employed during the construction of the project shall be Newark residents and that 30% of all contractors, subcontractors and suppliers shall be Newark companies.
8. All other terms and conditions contained in Resolution 7R2-b adopted on September 5, 2019, shall remain in full effect.
9. The City has decided not to move forward with the Section 108 funding for this Project and Resolution 7R2-a, adopted by the Municipal Council on July 10, 2019, shall be rescinded in all respects.
10. Attached hereto is a Certification from the Municipal Comptroller of the City of Newark which states that: (1) there are sufficient funds in the amount of Three Hundred and Eight Thousand Dollars and Zero Cents ($308,000.00) to cover the additional grant funding, and (2) that the line appropriation of official budgets which shall be charged is as follows:
|
Business Unit |
Division/Proj. |
Activity |
Account |
Budget Ref. |
Amount |
|
NW026 |
|
|
32100 |
B2021 |
$308,000.00 |
11. A copy of the fully executed Grant Agreement, the Mortgage Note and the recorded Mortgage must be placed on file in the Office of the City Clerk by the Deputy Mayor/Director of the Department of Economic and Housing Development.
STATEMENT
Resolution authorizing and directing the Mayor of the City of Newark and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development to enter into, execute, and deliver a Grant Agreement with United Muslim, Inc., 115 South Kingman Road, P.O. Box 553, South Orange, New Jersey 07079, thereby increasing the aggregate grant amount awarded thereto by $308,000.00 from $350,000.00 to $658,000.00 to bridge the gap in financing required to complete construction of the Project, and rescinding Resolution 7R2-a, adopted by the Municipal Council on July 10, 2019, related to Section 108 funding for the Project in all respects.