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AN ORDINANCE GRANTING A THIRTY (30) YEAR TAX ABATEMENT TO 449 WASHINGTON STREET URBAN RENEWAL CO., LLC, 27 AUSTIN STREET, NEWARK, NEW JERSEY 07114, FOR A PROJECT TO CONSTRUCT A NEW FIVE (5) STORY BUILDING WITH A TOTAL OF TWENTY (20) RESIDENTIAL RENTAL UNITS, OF WHICH TEN (10) WILL BE MARKET RATE RESIDENTIAL RENTAL UNITS AND TEN (10) WILL BE AFFORDABLE HOUSING RENTAL UNITS WHICH SHALL BE RESTRICTED TO TENANT’S AT 60% OF AREA MEDIAN INCOME (“AMI”), AND A GROUND LOBBY WITH NO ON-SITE PARKING SPACES, LOCATED AT 449 WASHINGTON STREET, NEWARK, NEW JERSEY 07102 AND IDENTIFIED ON THE CITY’S TAX MAP AS BLOCK 115, LOT 15 (CENTRAL WARD).
Public Hearing will be held June 4, 2025.
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WHEREAS, 449 Washington Street Urban Renewal Co., LLC, 27 Austin Street, Newark, New Jersey 07114, filed an application with the Mayor seeking a long term tax abatement under the Long Term Tax Exemption Law, N.J.S.A. 40A:20-1 et seq. for a thirty (30) year term for a project to construct a new five (5) story building with a total of ten (10) market rate residential rental units (the “Market Rate Units”), ten (10) affordable housing rental units, which shall be restricted to tenant’s at 60% of Area Median Income (“AMI”) (the “Income Restricted Units”), and a ground lobby with no onsite parking spaces located at 449 Washington Street, Newark, New Jersey 07102 and identified on the City’s tax map as Block 115, Lot 15 (Central Ward)(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 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 ORDAINED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The application of 449 Washington Street Urban Renewal Co. LLC, 27 Austin Street, Newark, New Jersey 07114 (the “Entity”), for the development, maintenance, and operation of the Project described in the application is hereby approved in accordance with the recommendation of the Mayor of the City of Newark for a project to construct a new five (5) story building with a total of ten (10) market rate residential rental units (the “Market Rate Units”), ten (10) affordable housing rental units, which shall be restricted to tenants at 60% of Area Median Income (“AMI”), (the “Income Restricted Units”), and a ground lobby with no onsite parking spaceslocated at 449 Washington Street, Newark, New Jersey and identified on the Offical Tax Map of the City of Newark as Block 115, Lot 15 (“Central Ward”)(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 N.J.S.A. 40A:20-12, and only so long as the Entity is subject to and complies with the proposed Financial Agreement and the Long Term Tax Exemption Law, as amended and supplemented, and upon further condition that the Entity 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 enter into and 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 in the Office of the 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 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 Income Restricted Units shall be equal to 7.25% of the Annual Gross Revenue from the Income Restricted Units.
(i) In the event that the method of calculation of the Annual Service Charge for the Income Restricted Units which is governed by the terms of Section 4.04(a) of this Financial Agreement is held to be illegal, in conflict with any law or otherwise found to be invalid and/or unenforceable by a court of competent jurisdiction, the Annual Service Charge for the Income Restricted Units shall then in such event be calculated as follows: The Annual Service Charge for the Income Restricted Units shall be equal to 10% of the Annual Gross Revenue from the Income Restricted Units.
(ii) The City and Entity acknowledge and agree that that it is in their respective best interests to now include the provision for amendment of the method of calculation of the Annual Service Charge for the Income Restricted Units as is set forth and contained in Section 4.04(a)(i) of this Financial Agreement in order to allow for severability of Section 4.04(a) of this Financial Agreement consistent with the terms of Section 4.08 of this Financial Agreement, ensuring that this Financial Agreement may continue to be enforced by each of the parties against the other.
(b) The Annual Service Charge for the Market Rate Units shall be as follows:
(i) For years one (1) through fifteen (15), 10% of the Annual Gross Revenue from the Market Rate Units.
(ii) For years sixteen (16) through nineteen (19), 11% of the Annual Gross Revenue from the Market Rate Units.
(iii) For years twenty (20) through twenty-three (23), 12% of the Annual Gross Revenue from the Market Rate Units.
(iv) For years twenty-four (24) through twenty-seven (27), 13% of the Annual Gross Revenue from the Market Rate Units.
(v) For years twenty-eight (28) through thirty (30), 14% of the Annual Gross Revenue from the Market Rate Units.
(c) The Annual Service Charge for all other components of the Project, including laundry, shall be equal to 15% of the Annual Gross Revenue from the other components of the project:
(i) For years sixteen (16) through nineteen (19), the total Annual Service Charge shall not be less than 20% of the amount of the taxes otherwise due on the value of the Land and Improvements.
(ii) For years twenty (20) and twenty-three (23), the total Annual Service Charge shall not be less than 40% of the amount of the taxes otherwise due on the value of the Land and Improvements.
(iii) For years twenty-four (24) through twenty-seven (27), the total Annual Service Charge shall not be less than 60% of the amount of the taxes otherwise due on the value of the Land and Improvements.
(iv) For years twenty-eight (28) through thirty (30), the total Annual Service Charge shall not be less than 80% of the amount of the taxes otherwise due on the value of the Land and Improvements.
(d) 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. The Minimum Annual Service Charge shall not be reduced through any tax appeal on Land and/or Improvement during the period the Agreement is in force and effect.
10. The Entity 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 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 fifty percent (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 twenty-five (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 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 paragraph 8 above. This employment report shall be filed with the Director of Finance, the 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 approved by the Department of Community Affairs and filed with the Secretary of State;
(f) The Entity shall receive a favorable review and certification from the appropriate municipal departments and agencies, pursuant to City Ordinance 6S&Fd, adopted October 21, 1992, as amended, which is codified in City’s Revised Ordinance 10:24-1, et seq.
(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 twenty-four (24) months of the effective date of the Financial Agreement 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 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 any construction.
12. In any year that the Entity 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 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 (2%) percent 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. 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 City Clerk's Office shall transmit a certified copy of this Ordinance and Financial Agreement to the Chief Financial Officer of the county and to the County Counsel for informational purposes.
16. 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 449 Washington Street Urban Renewal Co., LLC, 27 Austin Street, Newark, New Jersey 07114, pursuant to the Long Term Tax Exemption Law, N.J.S.A. 40A:20-1 et seq., for a thirty (30) year term, for a project to construct a new five (5) story building with a total of ten (10) market rate residential units (the “Market Rate Units”), ten (10) affordable housing rental units, which shall be restricted to tenants at 60% of Area Median Income (“AMI”), and a ground floor lobby with no on-site parking spaces located at 449 Washington Street, Newark, New Jersey 07102 and identified on the City’s tax map as Block 115, Lot 15 (Central Ward).