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 and Recognition Agreement in order to permit the Redeveloper to obtain the financing necessary for the development of a new five-story mixed-use building
Entity Name: S.A.T. Urban Renewal Entity, LLC
Entity Address: 156 Elizabeth Avenue, Newark, New Jersey 07108
Sale Amount: $55,300.00
Cost Basis: ( X ) $ 10.00 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)
142-144 Elizabeth Avenue/Block 2776/ Lot 8.01/South Ward
Additional Information:
Resolution 7R2-f adopted on July 22, 2020, designating S.A.T. Urban Renewal Entity, LLC, as the redeveloper and authorizing an Agreement for the Sale and Redevelopment of Land.
body
WHEREAS, pursuant to Resolution 7R2-f adopted on July 22, 2020, the Newark Municipal Council (“Municipal Council”) authorized the Mayor and/or his designee 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 S.A.T. Urban Renewal Entity, LLC, 156 Elizabeth Avenue, Newark, New Jersey 07108 (“Redeveloper”) to effectuate the sale of City of Newark (“City”) owned real property located at 144 Elizabeth Avenue and 142 Elizabeth Avenue, Newark, New Jersey and identified on the official tax map of the City as Block 2776, Lots 8 and 9, now known as 142-144 Elizabeth Avenue, Newark, New Jersey, Block 2776, Lot 8.01 .01 (“Property”), for the purchase price of Fifty-Five Thousand Three Hundred Dollars and Zero Cents ($55,300.00), for the redevelopment of the Property into a new mixed use development consisting of one (1) storefront commercial unit and twenty (20) residential units (“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, such sale was authorized pursuant to N.J.S.A. 40A:12-13, which requires that such conveyance be subject to the condition that title to the Property revert back to the City in the event of a Default under Section VI, Event of Default, Termination of the Agreement and Right of Reverter (mislabeled Section V) of the Agreement and Section d of the Deed (the Reverter Right”); and
WHEREAS, the Redeveloper has represented that it has secured financing from COLUMBIA BANK (“Lender”) in the aggregate principal amount of up to $4,300,000.00 (the “Loan”), to develop and complete the Project, which Loan will be evidenced by a Promissory Note (the “Note”) dated March 30, 2026 in favor of Lender, that certain Construction Loan Agreement (the “Construction Loan Agreement”) dated March 30, 2026, , and that certain Construction Mortgage (the "Mortgage") dated March 30, 2026 executed by Redeveloper in favor of Lender; and
WHEREAS, as a condition of the above Loan, the Lender has requested that the City subordinate the Reverter Right to the Lender 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 May 6, 2026 and May 13, 2026, which complies with the notice requirement of once each week for two weeks; and
WHEREAS, the Mayor and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development determined that the Project is in the best interest of the City and recommend subordinating the Lender’s Mortgage by entering into a First Amendment to the Agreement for the Sale and Redevelopment of Land and Subordination and Recognition 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, the Deputy Mayor/Director of the Department of Economic and Housing Development are hereby authorized to enter into and execute a Subordination and Recognition Agreement with and in favor of Columbia Bank (the “Lender”), in the form attached hereto or such other forms reasonably acceptable to the parties, related to the property located at 142-144 Elizabeth Avenue, Newark, New Jersey, within the South Ward of the City and identified on the official tax map of the City as Block 2776, Lot 8.01 (formerly lots 8 and 9)(“Property”), to permit the redevelopment of the Property as new construction of a mixed-use development consisting of commercial space and twenty residential units, of which four (4) will be affordable to tenants, along with a community room (“Project”), by S.A.T. Urban Renewal Entity, LLC, 156 Elizabeth Avenue, Newark, New Jersey 07108 (“Redeveloper”), which is authorized pursuant to Resolution 7R2-f adopted on July 22, 2020.
3. The Mayor and/or his designee, 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 pursuant to Resolution 7R2-f adopted on July 22, 2020, 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 on May 6, 2026 and May 13, 2026 and holding a public hearing on said resolution at a Meeting of the Municipal Council on May 20, 2026, in the Council Chamber located at City Hall, 920 Mayor Kenneth A. Gibson Boulevard, Newark, New Jersey.
6. The Deputy Mayor/Director of the Department of Economic and Housing Development shall place a filed copy of the fully executed Subordination and Recognition 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, 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 and Recognition Agreement, in accordance with N.J.S.A. 40:60-51.2, to enable the Redeveloper to obtain financing necessary for the redevelopment of the property into a new five-story mixed-use building with four (4) commercial/retail units and twenty (20) residential units located at 142-144 Elizabeth Avenue, Newark, New Jersey and identified on the official tax map of the City as Block 2776, Lot 8.01 located in the South Ward.