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AN ORDINANCE AUTHORIZING FIRST AMENDMENT TO ORIGINAL TAX ABATEMENT GRANTED TO CATHEDRAL PARK ASSOCIATES, LP UNDER THE LIMITED DIVIDEND LAW TO EXTEND THE TERM OF THE FINANCIAL AGREEMENT UNTIL AUGUST 31, 2043 TO COINCIDE WITH THE EXPIRATION DATE OF THE HOUSING ASSISTANCE PAYMENT RENEWAL CONTRACT FOR AN AFFORDABLE HOUSING PROJECT LOCATED AT 147-153 CLIFTON AVENUE AND 88-92 MT PROSPECT AVENUE, AND DESIGNATED AS BLOCK 491, LOT 54 ON THE OFFICIAL TAX MAP OF THE CITY OF NEWARK.
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WHEREAS, on September 16, 1981, the Municipal Council of the City of Newark (the “Municipal Council”) adopted Resolution 7RB-k, granting a long-term tax abatement to Cathedral Park Associates, LP pursuant to the Limited Dividend Non-Profit Housing Corporations or Associations Law, N.J.S.A. 55:16-1 et seq., (the “Financial Agreement”) for the construction of a forty-eight (48) unit affordable housing project on the located at 147-153 Clifton Avenue and 88-92 Mt Prospect Avenue, and designated as Block 491, Lot 54 on the official tax map of the City of Newark (collectively, the “Property”); and
WHEREAS, the City and Cathedral Park Associates, LP subsequently executed a financial agreement governing the Project (the “Original Financial Agreement”); and
WHEREAS, the Limited Dividend Law was repealed in 1992 and was replaced by the Long Term Tax Exemption Law, N.J.S.A. 40A:20-1 et seq. (the “LTTE Law”), but the LTTE Law explicitly saved from repeal and ratified all existing tax abatements granted under the Limited Dividend Law; and
WHEREAS, the Project is 100% affordable and is supported by project-based Section 8 housing assistance payments from the United States Department of Housing and Urban Development (“HUD”); and
WHEREAS, as set forth in Sections 4 and 9 of the Financial Agreement, the Project shall be exempt from taxation for a period equal to the lesser of: (i) fifty (50) years from the completion of the Project, or (ii) the term of the first mortgage to be placed upon the Property in connection with the construction or completion of the Project; and
WHEREAS, on May 19, 2021, by way of Resolution 7R2-f (as), the Municipal Council authorized the execution of an Assignment and Assumption Agreement for the assignment of the Financial Agreement from Cathedral Park Associates, LP to Cathedral Park Urban Renewal LLC (the “Assignment Agreement”); and
WHEREAS, by way of a Special Warranty Deed recorded in the Essex County Register on August 25, 2021, Cathedral Park Urban Renewal LLC acquired the Property from Cathedral Park Associates, LP; and
WHEREAS, on September 1, 2023, Cathedral Park Urban Renewal LLC and HUD entered into a Housing Assistance Payment Renewal Contract for a period of twenty (20) years (the “HAP Contract”), which extended the project-based Section 8 housing assistance payments for tenants residing in the Property until August 31, 2043; and
WHEREAS, the term of the first mortgage placed upon the Property was February 1, 2024; and as such, the tax exemption period under the Financial Agreement was set to expire on same date; however, the operation of the 100% affordable housing Project on the Property is not feasible without the tax exemption; and
WHEREAS, pursuant to N.J.S.A. 40A:20-13.2.1(a), “the Governing Body of a municipality may agree to continue a tax exemption for a State or federally subsidized housing project beyond the date on which existing first mortgage financing is fully paid so long as the project remains subject to affordability controls pursuant to project-based federal rental assistance, authorized pursuant to Section 8 of the United States Housing Act of 1937”; and
WHEREAS, since the Project and the overall operation of a five (5)-story, forty-eight (48) unit multi-family 100% affordable building is subject to the HAP Contract, a federally subsidized project-based Section 8 housing assistance payment program, the City of Newark has agreed to extend the tax exemption for the Property pursuant to N.J.S.A. 40A:20-13.2.1(a).
NOW, THEREFORE, BE IT ORDAINED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The application of Cathedral Park Urban Renewal LLC to extend the term of the financial agreement until August 31, 2043, consistent with the expiration of the HAP Contract is hereby approved and, consequently, the tax abatement for the Project shall be extended to August 31, 2043.
2. The Mayor of the City of Newark is hereby authorized to execute, on the City’s behalf, the First Amendment to Financial Agreement in substantially the form attached hereto.
3. An executed copy of the First Amendment to Financial Agreement authorized by this ordinance shall be filed and maintained with the City Clerk.
4. The Entity shall in the operation of the 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.
5. The adoption of this ordinance is expressly conditioned upon the requirement that Cathedral Park Urban Renewal LLC pay the City all outstanding taxes and/service charges, and water/sewer charges within thirty (30) days of the date of the adoption of this ordinance. If Cathedral Park Urban Renewal LLC fails to timely satisfy these requirements, this ordinance and the approval granted herein shall be null and void.
6. The adoption of this ordinance is expressly conditioned upon the requirement that Cathedral Park Urban Renewal LLC register with the City’s Office of Affordability and Sustainable Housing and comply with all their rules and regulations pertaining to the affordable housing units in the Project.
7. This First Amendment to Financial Agreement is ratified from February 1, 2024, until the date of final passage and publication of this authorizing Ordinance.
8. This ordinance shall take effect upon final passage and publication in accordance with the laws of the State of New Jersey.
STATEMENT
This Ordinance grants the application of Cathedral Park Urban Renewal LLC, a limited partnership of the State of New Jersey, 691 Elizabeth Avenue, Suite 2, Newark, New Jersey 07112, to extend the term of the financial agreement until August 31, 2043 to coincide with the expiration date of the housing assistance payment renewal contract for an affordable housing project located at 147-153 Clifton Avenue and 88-92 Mt Prospect Avenue, and designated as Block 491, Lot 54 on the official tax map of the City of Newark.