Title
Dept/ Agency: Economic and Housing Development
Action: ( ) Ratifying (X) Authorizing (X) Amending
Type of Service: Loan
Purpose: Resolution authorizing: (i) a First Amendment to the Deed Restrictive Affordable Housing Agreement and Redevelopment Agreement; (ii) First Amendment to Mortgage and Security Agreement; (iii) First Amendment to Note; and (iv) Partial Release with GK Preservation LLC, the Redeveloper and collectively, the Project Amendment Documents, of 1865 Palmer Avenue, Suite 203, Larchmont, New York, New York 10538, to release Block 1808, Lot 1.02, from the Mortgage.
Entity Name: GK Preservation, LLC
Entity Address: 1865 Palmer Avenue, Suite 203, Larchmont, New York 10538
Funding Source: Federal HOME Program Funds
Contract Period: Funds must be expended within forty-eight (48) months from the date of adoption
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:
(Address/Block/Lot/Ward)
250 Georgia King Village/Block 1808, Lot 1.01/West Ward
Additional Information:
body
WHEREAS, the Municipal Council (the “City”), by Resolution 7R2-j(AS) adopted on August 8, 2018, authorized the City’s entering into of a Deed Restrictive Affordable Housing Agreement (the “Agreement”) with GK Preservation LLC (the “Redeveloper”), 1868 Palmer Avenue, Suite 203, Larchmont, New York, New York 10538; and
WHEREAS, the Redeveloper intends to renovate and improve the Georgia King Village Apartments located at 200 and 250 Georgia King Village, 4-70 Littleton Avenue, 352-374 West Market Street and 17-49 Bergen Street, Newark, New Jersey 07107, and identified on the Official Tax Map of the City of Newark, as Block 1808, Lot 1, Block 1832, Lot 1, Block 1833, Lots 1, 60 and 65 and Block 1834, Lot 55 (the "Property"), which consists of 422 residential units, 276 parking spaces, a community facility, a leasing/management office and a children's library (collectively, the "Project"); and
WHEREAS, the City executed and delivered a Deed Restrictive Affordable Housing Agreement, dated as of September 28, 2018 (the “Agreement”), with the Redeveloper; and
WHEREAS, in connection with the Agreement, the City provided the Redeveloper with Federal HOME Program funds in the form of an interest-bearing deferred payment loan for a period of thirty (30) years pursuant to the Federal HOME Loan Program (24 CFR part 92) and any amendments thereto; and
WHEREAS, the Agreement was for the amount of One Million Five Hundred Thousand Dollars and Zero Cents ($1,500,000.00) in Federal HOME Program funds for the Project to be located at the Property. Units assisted with HOME Program funds must be occupied by low and moderate-income households; and
WHEREAS, subsequent to the execution and delivery of the Agreement, the Redeveloper made an application to the City and the City agreed to subdivide the Property into two different parcels, namely, Lot 1.01 and Lot 1.02 as evidenced by that certain Minor Subdivision Deed Corrective, dated as of December 18, 2020, made by the Redeveloper and recorded on December 22, 2020 in the Office of the Essex County Recorder of Deeds & Mortgages (Instrument # 2020128575); and
WHEREAS, the Redeveloper completed development and construction of the Project on Block 1808, Lot 1.01, and requests that the mortgage lien encumbering that portion of the Property consisting of the newly designated Lot 1.02 be released from the Mortgage and Security Agreement, dated as of October 17, 2018, granted by the Redeveloper, as Mortgagor, to the City, as Mortgagee, and duly recorded on October 17, 2018 in the Office of the Essex County Register’s Office (Instrument No. 2018090343) (the “Mortgage”); and
WHEREAS, it is in the best interest of the City and the Department of Economic and Housing Development to release Block 1808, Lot 1.02 from the Mortgage.
NOW, THEREFORE BE IT ORDAINED 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 hereby authorized and directed to enter into and execute: (i) a First Amendment to Deed Restrictive Affordable Housing Agreement and Redevelopment Agreement; (ii) First Amendment to Mortgage and Security Agreement; (iii) First Amendment to Note; and (iv) Partial Release with GK Preservation LLC (the “Redeveloper") (collectively, the “Project Amendment Documents”), having its principal place of business at 1865 Palmer Avenue, Suite 203, Larchmont, New York, New York 10538, to release Block 1808, Lot 1.02, from the Mortgage.
2. The Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized, directed and empowered to take any and all such further action to ensure that the Project continues to remain affordable for a period of thirty (30) years. Said covenants, conditions and restrictions shall continue to run with the land and bind the Redeveloper 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 with the Agreement for a period of thirty (30) years.
3. The Redeveloper shall be responsible for the recordation of the final fully executed Project Amendment Documents, as applicable, and any amendments thereto in the Office of the Essex County Register's Office.
4. The Project Amendment Documents given by the Redeveloper in favor of the City and all other documents and/or agreements executed by the Redeveloper in connection with the Agreement and the Project shall continue to ensure compliance with all of the requirements of the HOME program, pursuant to the HOME program statue and regulations (24 CFR Part 92).
5. The Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized, directed and empowered to effectuate all such business terms and conditions related to the Agreement, Redevelopment Agreement and the other Project Amendment Documents annexed hereto as permitted by New Jersey Law and may enter into any other relevant documents related to these matters in a form subject to the approval of the Corporation Counsel.
6. The Redeveloper has adhered to all milestones and timelines in the Project Schedule approved by the Department of Economic and Housing Development. The project completion is further defined in the Agreement in Exhibit D, as amended or supplemented to date. Block 1808, Lot 1.01 must continue to conform to the City of Newark Design and Construction Standards Guidelines for New Home Construction, including, without limitation, standards for environmental sustainability and energy efficiency, as established by the Department of Economic and Housing Development. Should the Redeveloper fail to complete the Project within the specified time frame, then the City, in its sole discretion, in addition to any other remedy available by the Agreement or as allowed by law, may direct the Redeveloper to repay all HOME Program funds expended on the Project back to the City and exercise any and all other remedies as provided therein.
7. The Redeveloper must continue to remain in full compliance with 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 1137 and 12086) with respect to the award of goods and services. The Redeveloper 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. The Deputy Mayor/Director of the Department of Economic and Housing Development shall place on file with the Office of the City Clerk a final executed copy of the Subordination Agreement and Consent to Assignment of City Agreements.
STATEMENT
This Resolution authorizes the Mayor of the City of Newark and/or his designee, or the Deputy Mayor/Director of the Department of Economic and Housing Development to enter into and execute on behalf of the City each of the Project Amendment Documents with GK Preservation LLC, 1865 Palmer Avenue, Suite 203, Larchmont, New York, New York 10538, in connection with the HOME Agreement and the construction and pre-development costs related to the construction and development of the Project on Block 1808, Lot 1.01. The HOME assisted units must remain affordable for a period of thirty (30) years pursuant to the requirements under the HOME Program (24 CFR Part 92).