Title
Dept./ Agency: Economic and Housing Development
Action: ( ) Ratifying (X) Authorizing (X) Amending
Type of Service: Subordination Agreement
Purpose: An Agreement to Subordinate the City of Newark's Reverter Rights by entering into a First Amendment to Agreement for the Sale and Redevelopment of Land and a Subordination Agreement in order to permit the Redeveloper to obtain the financing necessary for the development of three (3) two-family homes for sale
Entity Name: Washington Bay Group I, LLC
Entity Address: 811 Clinton Avenue, Newark, New Jersey 07108
Sale Amount: N/A
Cost Basis: ( ) $ PSF ( ) Negotiated (X) N/A ( ) Other:
Assessed Amount: N/A
Appraised Amount: N/A
Contract Period: Not Applicable
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)
699 South 11th Street/Block 2618/Lot 36/South Ward
701 South 11th Street/Block 2618/Lot 37/South Ward
697 South 11th Street/Block 2618/Lot 73/South Ward
Additional Information:
Resolution 7R2-b adopted on April 10, 2024, designating Washington Bay Group I, LLC, as the redeveloper and authorizing an Agreement for the Sale and Redevelopment of Land under the Equitable Investments in Newark Communities Program
body
WHEREAS, pursuant to Resolution 7R2-b adopted on April 10, 2024, the Newark Municipal Council (“Municipal Council”) authorized the Mayor and/or his designee and the Deputy Mayor/Director of the Department of Economic and Housing Development to enter into and execute an Agreement for the Sale and Redevelopment of Land (“Agreement”) with Washington Bay Group I, LLC, 811 Clinton Avenue, Newark, New Jersey 07108 (“Redeveloper”) to effectuate the sale of City of Newark (“City”) owned real property located at 699 South 11th Street, 701 South 11th Street, and 697 South 11th Street, Newark, New Jersey and identified on the official tax map of the City of Newark as Block 2618, Lots 36, 37 and 73 (“Properties”), for the purchase price of Fifty Thousand Four Hundred Dollars and Zero Cents ($50,400.00), for the redevelopment of the Properties into three (3) two-family homes for sale (“Project”); and
WHEREAS, the sale and Agreement were authorized pursuant to N.J.S.A. 40A:12A-8(g) and the South Ward Redevelopment Plan; and
WHEREAS, the Agreement allows the City to seek reversion of title to the Properties under certain events of Default as defined in the Agreement (“Reverter Right”); and
WHEREAS, the Redeveloper has represented that it has secured financing from Finance of America (“Lender”) in the aggregate principal amount of up to One Million Five Hundred Ninety Thousand Five Hundred Sixteen Dollars and Zero Cents ($1,590,516.00) (the “Loan”), to develop and complete the Project on the Properties, which Loan will be evidenced by a Promissory Note (the “Note”) dated May 12, 2026, in favor of Lender and will be secured by a mortgage on the Properties; and
WHEREAS, the Redeveloper has advised the City that as a condition of the above Loan, the Lender has requested that the City subordinate the Reverter Right to the Lender and notice provisions within the Agreement and the Deeds with respect to the Mortgage and Loan; and
WHEREAS, the Agreement states that the Reverter Right may be subordinated by the City subject to formal approval by the Municipal Council and pursuant to N.J.S.A. 40:60-51.2, which authorizes a municipality to waive, release, modify or subordinate any terms, covenants, conditions, limitations or reverters imposed in sales and conveyances of lands as to the erection, alteration or demolition of buildings or any other use to be made of land heretofore imposed by said municipality to accomplish the purposes for which such lands were sold and conveyed either at public or private sale including those set forth pursuant to Section 21 of P.L.1971, c. 199 (C.40A:12-21), but only after public hearing held before such governing body, of the holding of which notice describing the lands in question, and the terms, covenants, conditions, limitations or reverters to be waived, released, modified or subordinated, and, if to be modified or subordinated, describing the manner in which the same shall be modified or subordinated, shall first have been given by advertisement published once each week for two weeks in a newspaper published in said municipality or, if no newspaper be published therein, then in a newspaper circulating in such municipality, provided, however, that the power herein granted shall not be exercised to impair any vested or contractual rights of third parties; and
WHEREAS, the Department of Economic and Housing Development caused a notice to be advertised including the requirements established in N.J.S.A.40:60-51.2, in the Star Ledger, on July 3, 2026 and July 10, 2026, which complies with the notice requirement of once each week for two weeks; and
WHEREAS, the Municipal Council desires to subordinate the City’s Reverter Right contained in the Agreement and the Deed by entering into a First Amendment to Agreement for the Sale and Redevelopment of Land and Subordination Agreement so as to accomplish the Project.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The recitals set forth in this Resolution are hereby incorporated as if fully stated herein.
2. The Mayor and/or his designee, and the Deputy Mayor/Director of the Department of Economic and Housing Development are hereby authorized to enter into and execute a Subordination Agreement with and in favor of Finance of America (the “Lender”), in the form attached hereto or such other forms reasonably acceptable to the parties, related to the property located at 699 South 11th Street, 701 South 11th Street and 697 South 11th Street, Newark, New Jersey, as shown on the official tax map of the City of Newark as Block 2618, Lots 36, 37 and 73 (“Properties”), which are located in the South Ward, to permit the redevelopment of the Properties into three (3) two-family homes for sale (“Project”), by Washington Bay Group I, LLC, 811 Clinton Avenue, Newark, New Jersey 07108 (“Redeveloper”), which is authorized pursuant to Resolution 7R2-b adopted on April 10, 2024.
3. The Mayor and/or his designee, and the Deputy Mayor/Director of the Department of Economic and Housing Development are hereby authorized to enter into a First Amendment to Agreement for the Sale and Redevelopment of Land with Redeveloper in the form attached hereto, related to the Property for the Project.
4. All other terms and conditions of the Agreement for the Sale and Redevelopment of Land, authorized by and entered into pursuant to Resolution 7R2-b adopted on April 10, 2024, shall remain in full force and effect.
5. Notice in accordance with N.J.S.A. 40:60-51.2 of the subordination of the City’s reverter rights to the Mortgage has been duly given by publication as required by law and holding a public hearing on said resolution at a Meeting of the Municipal Council on July 15, 2026, in the Council Chamber located at City Hall, 920 Mayor Kenneth A. Gibson Boulevard, Newark, New Jersey on July 3, 2026 and July 10, 2026.
6. The Deputy Mayor/Director of the Department of Economic and Housing Development shall place a filed copy of the fully executed Subordination and Agreement and First Amendment to Agreement for the Sale and Redevelopment of Land with the Office of City Clerk.
STATEMENT
This Resolution authorizes the Mayor of the City of Newark and/or designee, and the Deputy Mayor/Director of the Department of Economic and Housing Development to subordinate the City’s Reverter Rights through the execution of a Subordination Agreement and a First Amendment to Agreement for the Sale and Redevelopment of Land, in accordance with N.J.S.A. 40:60-51.2, to enable the Redeveloper to obtain financing necessary for the redevelopment of the properties into three (3) two-family homes for sale located at 699 South 11th Street, 701 South 11th Street and 697 South 11th Street, Newark, New Jersey and identified on the official tax map of the City as Block 2618, Lots 36, 37 and 73 located in the South Ward.