Title
Dept/ Agency: Economic & Housing Development
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Type of Service: Application for Long-Term Tax Abatement
Purpose: Substantial renovation and reconfiguration of a 209 unit residential rental senior affordable housing project currently owned and operated by the Newark Housing Authority on real property commonly known as 63-91 Lincoln Street and 151-161 Court Street, Newark, New Jersey 07103 .
Entity Name: Lincoln Towers Urban Renewal, LP
Entity Address: c/o Newark Housing Authority, 500 Broad Street, Newark, New Jersey 07102
Abatement Period: Term of tax abatement - 30 years
Contract Basis: ( ) Bid ( ) State Vendor ( ) Prof. Ser. ( ) EUS
( ) Fair & Open ( ) No Reportable Contributions ( ) RFP ( ) RFQ
( ) Private Sale ( ) Grant ( ) Sub-recipient ( X ) n/a
List of Property:
(Address/Block/Lot/Ward)
151-161 Court Street aka 63-91 Lincoln Street/Block 2528/Lot 60.01/Central Ward
Additional Information:
body
WHEREAS, Lincoln Towers Urban Renewal, LP, with an address of c/o Newark Housing Authority, 500 Broad Street, Newark, New Jersey 07102, has filed an application with the Mayor pursuant to the Long Term Tax Exemption Law as amended and supplemented, N.J.S.A. 40A:20-1, et seq. (the Long Term Tax Exemption Law) seeking a tax exemption for a thirty (30) year term for a residential rental senior affordable housing project on real property commonly known as 63-91 Lincoln Street and 151-161 Court Street, Newark, New Jersey 07103 and identified on the official tax map of the City as Block 2528, Lot 60.01 (portion), as more particularly described within the metes and bounds description submitted with the application (the Property); 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, Lincoln Towers Urban Renewal, LP has filed with the City a sworn statement that it has not made any contribution in violation of said ordinance; 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 abatement and that without the tax abatement granted herein, the project would not be undertaken.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The application of Lincoln Towers Urban Renewal, LP for the development, maintenance and operation of the residential rental senior affordable housing project containing a total of 209 units 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 Lincoln Towers Urban Renewal, LP for a period of thirty (30) years for this residential rental senior 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 Lincoln Towers Urban Renewal, LP 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 Lincoln Towers Urban Renewal, LP 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 City Clerk.
5. The residential rental senior 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. Lincoln Towers Urban Renewal, LP shall in the operation of this residential rental senior 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. Lincoln Towers Urban Renewal, LP 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 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), Lincoln Towers Urban Renewal, LP shall pay an estimated quarterly service charge to the City in the amount of $11,026.75 until the correct amount due from Lincoln Towers Urban Renewal, LP 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 1.54% of the annual gross revenue for the affordable housing units and 15% of all other annual gross revenue generated by the project 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 Lincoln Towers Urban Renewal, LP 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. Lincoln Towers Urban Renewal, LP 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 abatement to be performed by Lincoln Towers Urban Renewal, LP, and the failure to comply with these requirements will result in the cancellation of the tax abatement:
(a) Lincoln Towers Urban Renewal, LP shall pay full taxes on the land and improvements of the project (designated as Block 2528, Lot 60.01), until the annual service charge becomes effective. The Entity represents, however, that during the rehabilitation of the Property and up to the Effective Date of the Annual Service Charge a certain portion of the Property will be rendered uninhabitable as rental property by virtue of the construction. Upon commencement of construction, the Entity intends to request that the Office of Assessment conduct an inspection of the Property to determine whether there should be a re-assessment of the Property given that one half of the residential units will be inoperable. The City makes no representations as to whether a re-assessment will occur and/or what the results of such a re-assessment will be. The City will endeavor, however, to timely respond to a request by the Entity for a re-assessment and, if applicable, make any legally permissible adjustments to the assessment;
(b) Lincoln Towers Urban Renewal, LP 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) Lincoln Towers Urban Renewal, LP, pursuant to the Revised City Ordinance 10:24-1 et seq., as amended, shall be deemed to agree that Lincoln Towers Urban Renewal, LP 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) Lincoln Towers Urban Renewal, LP 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 Section 11(c) above. This employment report shall be filed with the Director of Finance, the City Clerk of the City of Newark, and the Director of the Department of Economic and Housing Development;
(e) Lincoln Towers Urban Renewal, LP shall pay all outstanding taxes and all outstanding water and sewer charges within thirty (30) days of the adoption of this ordinance;
(f) Lincoln Towers Urban Renewal, LP shall complete the construction of the project within thirty-three (33) months of the Effective Date; 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 six month extensions to the construction 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 permitted six 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) Lincoln Towers Urban Renewal, LP 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 to the Law Department and the Department of Economic and Housing Development. The obligation to submit lease agreements shall be a continuing obligation during the period of the Financial Agreement. All 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 arm's length transaction;
(h) Lincoln Towers Urban Renewal, LP 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) Lincoln Towers Urban Renewal, LP shall receive a favorable review and certification from the appropriate municipal departments and agencies, pursuant to Municipal Ordinance 6S&FD 102192, as amended;
(j) Lincoln Towers Urban Renewal, LP shall secure all financing prior to the commencement of any construction;
(k) Lincoln Towers Urban Renewal, LP shall acquire title to a 99 year leasehold interest in 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 Lincoln Towers Urban Renewal, LP provides the Deputy Mayor/Director of Economic and Housing Development with a copy of the recorded deed and such other documents as are reasonably required by the Deputy Mayor/Director of Economic and Housing Development evidencing the transfer of the leasehold interest to the Property to Lincoln Towers Urban Renewal, LP; and
(l) Lincoln Towers Urban Renewal, LP shall submit its Certificate of Incorporation and Certificate of DCA approval of the urban renewal entity to the Law Department and to the Deputy Mayor/Director of the Department of Economic and Housing Development prior to this tax abatement taking effect.
12. That in any year that Lincoln Towers Urban Renewal, LP 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 Lincoln Towers Urban Renewal, LP ineligible for any land tax credits against the annual service charge.
13. Lincoln Towers Urban Renewal, LP 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 Lincoln Towers Urban Renewal, LP to the City shall be determined pursuant to the Financial Agreement to be executed between Lincoln Towers Urban Renewal, LP and the City of Newark.
14. The City Clerk's Office of the City of Newark shall forthwith submit a certified copy of the resolution approving the tax abatement and the proposed Financial Agreement to the Director of the Division of Local Government Services.
STATEMENT
This Resolution grants a long term tax abatement to Lincoln Towers Urban Renewal, LP for a term of thirty (30) years for a residential rental senior affordable housing project containing a total of 209 units located on real property commonly known as 151-161 Court Street aka 63-91 Lincoln Street, Newark, New Jersey 07103 and identified on the official tax map of the City as Block 2528, Lot 60.01 (portion), as more particularly described within the metes and bounds description submitted with the application.