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AN ORDINANCE GRANTING A THIRTY (30) YEAR TAX EXEMPTION TO SPRUCE SENIOR CENTER URBAN RENEWAL ASSOCIATES, L.P., THE OWNER OF A RESIDENTIAL SENIOR RENTAL AFFORDABLE HOUSING PROJECT LOCATED ON PROPERTY IDENTIFIED AS PROPOSED BLOCK 2556, LOT 1.01 ON A MAP ENTITLED "AMENDED MAJOR SUBDIVISION PLAT EXISTING TAX LOTS 1, 61 AND 62 IN BLOCK 2556 PROPOSED TAX LOTS 1.01, 1.02 & 1.03 ON BLOCK 2556 SITUATED IN THE CITY OF NEWARK, ESSEX COUNTY, NEW JERSEY" PREPARED BY BIRDSALL SERVICES GROUP, INC. DATED JANUARY 31, 2012, MORE COMMONLY KNOWN AS 136-146 SPRUCE STREET. Central Ward
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AN ORDINANCE GRANTING A THIRTY (30) YEAR TAX EXEMPTION TO SPRUCE SENIOR CENTER URBAN RENEWAL ASSOCIATES, L.P., THE OWNER OF A RESIDENTIAL SENIOR RENTAL AFFORDABLE HOUSING PROJECT LOCATED ON PROPERTY IDENTIFIED AS PROPOSED BLOCK 2556, LOT 1.01 ON A MAP ENTITLED "AMENDED MAJOR SUBDIVISION PLAT EXISTING TAX LOTS 1, 61 AND 62 IN BLOCK 2556 PROPOSED TAX LOTS 1.01, 1.02 & 1.03 ON BLOCK 2556 SITUATED IN THE CITY OF NEWARK, ESSEX COUNTY, NEW JERSEY" PREPARED BY BIRDSALL SERVICES GROUP, INC. DATED JANUARY 31, 2012, MORE COMMONLY KNOWN AS 136-146 SPRUCE STREET. Central Ward
WHEREAS, Spruce Senior Center Urban Renewal Associates, L.P., an urban renewal entity with an address of 3 East Stow Road, Marlton, New Jersey, 08053, filed an application with the Mayor seeking a long term tax exemption for the residential rental affordable housing project on land identified as Block 2556, Lot 1.01 on a map entitled "Amended Major Subdivision Plat Existing Tax Lots 1, 61, and 62 in Block 2556 Proposed Tax Lots 1.01, 1.02 & 1.03 in Block 2556 situated in the City of Newark, Essex County, New Jersey" prepared by Birdsall Services Group, Inc. dated January 31, 2012, more commonly known and identified by the street address of 136-146 Spruce Street, Newark, New Jersey 07108 (the "Property") pursuant to the Long Term Tax Exemption Law, N.J.S.A. 40A:20-1 et. seq.; and
WHEREAS, the Mayor has submitted the application and proposed Financial Agreement to the Municipal Council with his recommendation thereof, a copy of which is annexed hereto; and
WHEREAS, in accordance with Ordinance No. 6PSF-a 050411 adopted May 4, 2011, the Entity has filed with the City a sworn statement that it has not made any contribution in violation of said ordinance; and
WHEREAS, Old Third Ward Development LLC, in accordance with the terms of the Redevelopment Agreement, intends to enter into a long term leasehold interest for ninety-nine (99) years with Spruce Senior Center Urban Renewal Associates, L.P. for the Property; and
WHEREAS, the Municipal Council has determined pursuant to N.J.S.A. 40A:20-11 that the relative benefits of this project outweigh any costs associated with this tax exemption and that without the tax exemption granted herein, the project would not be undertaken.
NOW, THEREFORE, BE IT ORDAINED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The application of Spruce Senior Center Urban Renewal Associates, L.P. for the development, maintenance and operation of the residential rental affordable housing project described in the application is hereby approved in accordance with the recommendation of the Mayor.
2. The exemption from taxation on improvements is hereby granted to Spruce Senior Center Urban Renewal Associates, L.P. for a period of thirty (30) years for the residential rental affordable housing project from the date of substantial completion of the project, pursuant to N.J.S.A. 40A:20-12, and only so long as Spruce Senior Center Urban Renewal Associates, L.P. is subject to and complies with the proposed Financial Agreement and the Long Term Tax Exemption Law, as amended and supplemented, and upon the further condition that Spruce Senior Center Urban Renewal Associates, L.P. does not file a petition of tax appeal for the premises on which the project is to be located.
3. The Mayor of the City of Newark is hereby authorized to execute, on the City's behalf, the Financial Agreement in the form attached hereto.
4. An executed copy of the Financial Agreement authorized by this ordinance shall be filed and maintained with the Office of the City Clerk.
5. The residential rental affordable housing project when completed will conform with all State laws and ordinances of the City of Newark relating to its construction and use.
6. The Affirmative Action Program now on file in the Office of the City Clerk is declared to be a material condition of the Financial Agreement authorized by this ordinance.
7. Spruce Senior Center Urban Renewal Associates, L.P. shall in the operation of the residential rental affordable housing project comply with all laws so that no person shall be subject to any discrimination because of race, religious principles, color, national origin, or ancestry.
8. Spruce Senior Center Urban Renewal Associates, L.P. shall file an employment report (herein described below) with the Office of Affirmative Action, who shall forthwith after receiving the report send a copy thereof to the Office of the City Clerk and the Office of Affirmative Action shall forthwith investigate the matters contained therein and report its findings to the Municipal Council.
9. Subject to the requirements of Paragraph 10 below, as of the Annual Service Charge Start Date (as defined in the Financial Agreement), Spruce Senior Center Urban Renewal Associates, L.P. shall pay an estimated quarterly service charge to the City in the amount of $11,401.00 until the correct amount due from the Entity is determined by the City's Director of Finance based upon the auditor's report that is required to be submitted under the Financial Agreement. The annual service charge shall be based on 6.28% of the annual gross revenue for the housing units and 15% of the annual gross revenue for all other project income pursuant to the terms of the Financial Agreement. After the auditor's report required under the Financial Agreement has been accepted by the City's Director of Finance, the City and Spruce Senior Center Urban Renewal Associates, L.P. will adjust any over or under payment so made or needed to be made for the particular period covered by the auditor's report.
10. Spruce Senior Center Urban Renewal Associates, L.P. shall pay the minimum annual service charge, as calculated pursuant to N.J.S.A. 40A:20-12(b)(2)(e) and the financial agreement, in each year in which the annual service charge, as provided in Paragraph 9 above, would be less than the minimum annual service charge.
11. The following occurrences and requirements are express conditions of the granting of this tax exemption to be performed by Spruce Senior Center Urban Renewal Associates, L.P. and the failure to comply with these requirements will result in the cancellation of the tax exemption:
(a) Spruce Senior Center Urban Renewal Associates, L.P. shall pay full taxes on the land and improvements of the project (designated as Block 2556, Lot 1.01), until the annual service charge becomes effective;
(b) Spruce Senior Center Urban Renewal Associates, L.P. shall not, without prior consent of the Municipal Council of the City of Newark, sell, lease, assign, encumber, subordinate, convey, mortgage or transfer all, or any part of the project, so as to sever, disconnect or divide the improvements from the land embraced within the project;
(c) Spruce Senior Center Urban Renewal Associates, L.P., pursuant to the Revised Ordinances of the City of Newark 10:24-1 et seq., as amended, shall be deemed to agree that if Spruce Senior Center Urban Renewal Associates, L.P. operates, controls or manages the project that it will in good faith assist the City of Newark in its goal of having 50% of all new jobs arising out of the businesses conducted on the project site after the issuance of the certificate of occupancy and during the continuation of the tax exemption, dedicated to Newark residents, of which 25% of such all new employees shall be minority residents;
(d) Spruce Senior Center Urban Renewal Associates, L.P. shall concomitantly, with the submission of the annual report required of it by N.J.S.A. 40A:20-9(d), attach an employment report under oath, with particulars, stating the manner and the extent to which it has complied with 11(c) above. This employment report shall be filed with the Director of Finance, the City Clerk, and the Director of the Department of Economic and Housing Development;
(e) Spruce Senior Center Urban Renewal Associates, L.P. shall pay all outstanding taxes and all outstanding water and sewer charges within thirty (30) days of the adoption of this ordinance;
(f) Spruce Senior Center Urban Renewal Associates, L.P. shall complete the construction of the project within twenty-four (24) months of the date of issuance of a Notice to Proceed by the Deputy Mayor/Director of the Department of Economic and Housing Development; provided, however, that 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 construction schedule deadlines set forth within the Financial Agreement and any other timelines and milestones, provided that such deadlines, 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 Newark Municipal Council by the Deputy Mayor/Director of the Department of Economic and Housing Development;
(g) Spruce Senior Center Urban Renewal Associates, L.P. shall submit any and all non-residential lease agreements and/or subleases entered into with related or third parties for the use and occupancy of space made available by Spruce Senior Center Urban Renewal Associates, L.P. to the Law Department and the Department of Economic and Housing Development. The obligation to submit such lease agreements shall be a continuing obligation during the period of the Financial Agreement. All such lease agreements shall be subject to review by the City for the purpose of determining the validity thereof and to ensure that lease agreements are executed as part of an arms length transaction;
(h) Spruce Senior Center Urban Renewal Associates, L.P. shall submit to the City a copy of its formation documents, as approved by the Department of Community Affairs and filed with the Secretary of State;
(i) Spruce Senior Center Urban Renewal Associates, L.P. shall receive a favorable review and certification from the appropriate municipal departments and agencies, pursuant to Municipal Ordinance 6S&FD 102192, as amended;
(j) Spruce Senior Center Urban Renewal Associates, L.P. shall enter into a long term leasehold interest for ninety-nine (99) years with Old Third Ward Development LLC, in accordance with the terms of the Redevelopment Agreement, for the Property and submit a filed copy of the deed to the Tax Assessor's Office and the Department of Law;
(k) Spruce Senior Center Urban Renewal Associates, L.P. shall secure all financing prior to the commencement of any construction;
(l) Spruce Senior Center Urban Renewal Associates, L.P., in accordance with the terms of the Redevelopment Agreement, shall enter into a long term leasehold interest for ninety-nine (99) years with Old Third Ward Development LLC for the Property, prior to this tax exemption taking effect. The Deputy Mayor/Director of Economic and Housing Development shall not issue a Notice to Proceed for this project until Spruce Senior Center Urban Renewal Associates, L.P. provides the Deputy Mayor/Director of Economic and Housing Development with the following documents: (i) a signed deed and such other documents as are reasonably required by the Deputy Mayor/Director of Economic and Housing Development evidencing the transfer of title to the Property to Spruce Senior Center Urban Renewal Associates, L.P.; and (ii) an executed assignment agreement evidencing assignment of the obligations set forth within the Redevelopment Agreement relating to the Property between the City and Old Third Ward Development, LLC to Spruce Senior Center Urban Renewal Associates, L.P.
12. That in any year that Spruce Senior Center Urban Renewal Associates, L.P. shall fail to make four (4) consecutive land tax payments when due and owing in the manner defined in N.J.S.A. 40A:20-12(b)(2)(e), such delinquency shall render Spruce Senior Center Urban Renewal Associates, L.P. ineligible for any land tax credits against the annual service charge.
13. Spruce Senior Center Urban Renewal Associates, L.P. understands and agrees that the revenue projections set forth in the application are estimates and that the actual payments in lieu of taxes to be paid by Spruce Senior Center Urban Renewal Associates, L.P. to the City shall be determined pursuant to the Financial Agreement to be executed between Spruce Senior Center Urban Renewal Associates, L.P. and the City of Newark.
14. The Office of the City Clerk's Office shall forthwith submit a certified copy of the ordinance approving the tax exemption and the proposed Financial Agreement to the Director of the Division of Local Government Services.
15. This ordinance shall take effect upon final passage and publication in accordance with the laws of the State of New Jersey.
STATEMENT
This ordinance authorizes a Long Term Tax Exemption granted to Spruce Senior Center Urban Renewal Associates, L.P., of 3 East Stow Road, Marlton, New Jersey, 08053, for a term of thirty (30) years for the residential rental affordable housing project located on property identified as Block 2556, Lot 1.01 on a map entitled "Amended Major Subdivision Plat Existing Tax Lots 1, 61, and 62 in Block 2556, Proposed Tax Lots 1.01, 1.02 & 1.03 in Block 2556 situated in the City of Newark, Essex County, New Jersey" prepared by Birdsall Services Group, Inc. dated January 31, 2012, more commonly known and identified by the street address of 136-146 Spruce Street, Newark, New Jersey 07108. Central Ward