File #: 22-1877    Version: 1 Name: Ordinance: 30 Yr. Tax Abatement - Essex Plaza Land One, LLC - PILOT
Type: Ordinance Status: Adopted
File created: 12/23/2022 In control: Economic and Housing Development
On agenda: 4/5/2023 Final action: 4/19/2023
Title: AN ORDINANCE GRANTING A THIRTY (30) YEAR TAX ABATEMENT TO ESSEX PLAZA LAND ONE, LLC, HAVING ITS PRINCIPAL OFFICE AT C/O FAIRSTEAD, 250 WEST 55TH STREET, 35TH FLOOR, NEW YORK, NEW YORK, 10019, FOR A PROJECT TO CONSTRUCT A NEW (6) STORY BUILDING CONSISTING OF (241) AFFORDABLE HOUSING RENTAL UNITS RESTRICTED TO TENANTS AT 60% OF AREA MEDIAN INCOME ("AMI") OR LESS (THE "HOUSING UNITS"), APPROXIMATELY 4,875 SQUARE FEET OF COMMERCIAL SPACE AND (200) PARKING SPACES, LOCATED ON REAL PROPERTY COMMONLY KNOWN AS 105-137 ORCHARD STREET, NEWARK, NEW JERSEY 07102 AND IDENTIFIED ON THE OFFICIAL TAX MAP OF THE CITY OF NEWARK, AS BLOCK 892, LOT 24 (EAST WARD).
Sponsors: Council of the Whole

Title

AN ORDINANCE GRANTING A THIRTY (30) YEAR TAX ABATEMENT TO ESSEX PLAZA LAND ONE, LLC, HAVING ITS PRINCIPAL OFFICE AT C/O FAIRSTEAD, 250 WEST 55TH STREET, 35TH FLOOR, NEW YORK, NEW YORK, 10019, FOR A PROJECT TO CONSTRUCT A NEW (6) STORY BUILDING CONSISTING OF (241) AFFORDABLE HOUSING RENTAL UNITS RESTRICTED TO TENANTS AT 60% OF AREA MEDIAN INCOME (“AMI”) OR LESS (THE “HOUSING UNITS”), APPROXIMATELY 4,875 SQUARE FEET OF COMMERCIAL SPACE AND (200) PARKING SPACES, LOCATED ON REAL PROPERTY COMMONLY KNOWN AS 105-137 ORCHARD STREET, NEWARK, NEW JERSEY 07102 AND IDENTIFIED ON THE OFFICIAL TAX MAP OF THE CITY OF NEWARK, AS BLOCK 892, LOT 24 (EAST WARD).

 

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                      WHEREAS, Essex Plaza Land One, LLC, c/o Fairstead, 250 West 55th Street, 35th Floor, New York, New York, 10019 (the “Entity”) has applied for a long term tax exemption, pursuant to the New Jersey Housing and Mortgage Finance Agency Law of 1983, as amended and supplemented, N.J.S.A. 55:14K-1 et seq., (the “NJHMFA Law”) for a project to construct a new six (6) story building consisting of two hundred forty-one (241) affordable housing rental units restricted to tenants at 60% of Area Median Income (“AMI”) or less, approximately 4,875 square feet of commercial space and two hundred (200) parking spaces, located on real property commonly known as 105-137 Orchard Street, Newark, New Jersey and identified on the Official Tax Map of the City of Newark, as Block 892, Lot 24 (collectively, the “Project”); and

WHEREAS, the Mayor of the City of Newark 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 6PSF-a adopted on 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, the Municipal Council has determined that the relative benefits of this Project outweigh any costs associated with this tax exemption and that without the tax abatement 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 Essex Plaza Land One, LLC, c/o Fairstead, 250 West 55th Street, 35th Floor, New York, New York 10019 (the “Entity”), for the development, maintenance and operation of the Project described in the application  as construction of a new six (6) story building consisting of two hundred forty-one (241) affordable housing rental units restricted to tenants at 60% of Area Median Income (“AMI”) or less, approximately 4,875 square feet of commercial space and two hundred (200) parking spaces, located on real property commonly known as 105-137 Orchard Street, Newark, New Jersey and identified on the Official Tax Map of the City of Newark, as Block 892, Lot 24, is hereby approved in accordance with the recommendation of the Mayor of the City of Newark (collectively, the “Project”).

2. The abatement from taxation on improvements is hereby granted to the Entity for a period of thirty (30) years pursuant to New Jersey Housing and Mortgage Finance Agency Law of 1983, as amended and supplemented, N.J.S.A. 55:14k-1 et seq. (“NJHMFA”) and the Entity shall be subject to the provisions and conditions of the NJHMFA Law and the Financial Agreement annexed hereto.

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. The Deputy Mayor/Director of the Department of Economic and Housing Development shall file an executed copy of the Financial Agreement authorized by this Ordinance with the Acting City Clerk.

5. The 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. 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.

8. The Entity 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 Acting City Clerk and the Office of Affirmative Action shall forthwith investigate the matters contained therein and report its findings to the Municipal Council.

9. The Annual Service Charge shall be as follows:

(a) The Annual Service Charge for the residential units shall be equal to  6.28% of the Annual Gross Revenue generated from the residential units;

(b) The Annual Service Charge for all other components of the Project, including the commercial space, shall be equal to 15% of the Annual Gross Revenue from such other components; and

(c) In no event shall the Annual Service Charge, excluding taxes on the Land, in any year after the Annual Service Charge start date be less than the Minimum Annual Service Charge.

10. The Entity shall pay the Minimum Annual Service Charge, as calculated pursuant to NJHMFA Law and the Financial Agreement, in each year in which the Annual Service Charge 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 the Entity and the failure to comply with these requirements will result in the cancellation of the tax abatement:

(a) The Entity 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;

(b) The Entity, pursuant to the Revised City Ordinance 10:24-1 et seq., as amended, shall be deemed to agree 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;

(c) The Entity shall concomitantly, with the submission of the annual report required of it, attach an employment report under oath, with particulars, stating the manner and the extent to which it has complied with 11(b) above. This employment report shall be filed with the Director of Finance, the Acting City Clerk and the Deputy Mayor/Director of the Department of Economic and Housing Development;

(d) The Entity shall pay all outstanding taxes and all outstanding water and sewer charges within thirty (30) days of the adoption of this Ordinance;

(e) The Entity shall submit to the City a copy of its formation documents, as filed with the Secretary of State;

(f) The Entity shall receive a favorable review and certification from the appropriate City departments and agencies, pursuant to City Ordinance 6S&Fd, adopted on October 21, 1992, as amended;

(g) The Entity shall pay full taxes on the Land and Improvements of the Project until the Annual Service Charge becomes effective;

(h) The Entity shall complete the Project within thirty-six (36) months of the adoption of this Ordinance provided however, provided, 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, milestones, provided that such deadlines, timelines and milestones are not extended beyond the permitted two (2) six (6) month extensions, subject to full written disclosure (in the form of a signed Memorandum to be submitted prior to adoption) to the Municipal Council by the Deputy Mayor/Director of the Department of Economic and Housing Development; and

(i) The Entity shall secure all financing prior to the commencement of the any construction.

12. In any year that the Entity shall fail to make four (4) consecutive land tax payments when due and owing such delinquency shall render the Entity ineligible for any land tax credits against the Annual Service Charge.

13. The Entity 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 the Entity to the City shall be determined pursuant to the Financial Agreement to be executed between the Entity and the City of Newark.

14. The Entity agrees that the Entity shall pay to the City of Newark a fee of two percent (2%) of the Annual Service Charge as an administrative fee to be paid annually for the term of the Financial Agreement.

15. To the extent of any inconsistency with any prior City ordinance and/or Municipal Code provision governing the granting of long-term tax exemptions, including, inter alia, procedures for application, review and approval, required terms of the financial agreement, required conditions and covenants, limits on duration, means of enforcement, and all other matters whatsoever, such prior City ordinances and/or Municipal Code provisions are hereby waived, but only with respect to this Ordinance.

16. The Entity shall submit to the City of Newark’s Department of Economic and Housing Development or its assigned agent all documentation which it is required to submit and maintain in accordance with the terms and conditions of the financing to be provided by the NJHMFA and all other sources of funding received.

17. The Entity shall submit to the City’s Law Department and Department of Economic and Housing Development copies of the mortgage and all other loan documents executed between the Entity and the NJHMFA within thirty (30) days of the closing.

18. Within ten (10) calendar days following the later of the effective date of this Ordinance or the execution of the Financial Agreement by the Entity, the Office of the City Clerk shall transmit a certified copy of the Ordinance and Financial Agreement to the Chief Financial Officer of the County and to the County Counsel for informational purposes.

19. 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 a long term tax abatement to Essex Plaza Land One, LLC, c/o Fairstead, 250 West 55th Street, 35th Floor, New York, New York, 10019 under the New Jersey Housing and Mortgage Finance Agency Law of 1983, as amended and supplemented, N.J.S.A. 55:14k-1 et seq., for thirty (30) years, for a project to construct a new six (6) story building consisting of two hundred forty-one (241) affordable housing rental units restricted to tenants at 60% of AMI or less, approximately 4,875 square feet of commercial space and two hundred (200) parking spaces, located on real property commonly known as 105-137 Orchard Street, Newark, New Jersey 07102 and identified on the Official tax Map of the City of Newark, as Block 892, Lot 24 (East Ward).