Title
Dept/ Agency: Economic and Housing Development
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Type of Service: Settlement Agreement
Purpose: Authorizing the execution of a Settlement Agreement with Blossom Hill Urban Renewal Corp.
Entity Name: Blossom Hill Urban Renewal Corp.
Entity Address: 5 Manor Drive, Newark, New Jersey 07106
Amount: Not Applicable
Development Agreement Term: Not Applicable
City Contribution to Development Project: ( ) Grant or Loan ( ) Guarantee
(X) None ( ) Other
Developer Investment: Not Applicable
Developer Third-Party Financing
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)
489-599 Irvington Avenue/Block 4274/Lot 15/West Ward
Additional Information:
body
WHEREAS, the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1, et seq., as amended and supplemented (the "Act"), authorizes municipalities to participate in the redevelopment and improvement of areas that are in need of redevelopment or rehabilitation; and
WHEREAS, in order to stimulate the reinvigoration of the City of Newark (the “City”), by Resolution 7Rdo(AS) 061505 adopted on June 15, 2005, the entire City was designated as an area in need of rehabilitation pursuant to the Act; and
WHEREAS, on April 1, 1998, by way of Resolution 7RC, the City issued public action by sealed bid for the sale of the property commonly known as 489-599 Irvington Avenue and identified on the Official Tax Map of the City of Newark, as Block 4274, Lot 15 (the “Property”) in the West Ward, for the sum of Seven Hundred Seventy-Five Thousand Dollars and Zero Cents ($775,000.00), which was duly published in the Star Ledger newspaper on April 4, 1998, and April 7, 1998, pursuant to the provisions of N.J.S.A. 40A:12-13(a); and
WHEREAS, Blossom Hill Urban Renewal Corp. (the “Blossom Hill”) submitted the only bid and complied with the conditions of sale identified in Resolution 7RC; and
WHEREAS, on May 6, 1998, by way of Resolution 7RCY(AS), the City accepted the bid of Blossom Hill, as the only bid received, for the purchase of the City-owned Property for the sum of Seven Hundred Seventy-Five Thousand Dollars and Zero Cents ($775,000.00); and
WHEREAS, Resolution 7RCY(AS) further authorized the City’s Director of Development to execute a Bargain and Sale Deed for the Property containing a deed restriction that the development of the Property “shall be solely for the development of a day care center, elder care center, and senior citizen housing. Any expansion or development of the Ivy Plaza Shopping Center within the metes and bounds of Block 4274, Lot 15 is prohibited and shall constitute a breach of the conditions of sale.” (the “Original Project”); and
WHEREAS, by way of a Bargain and Sale Deed dated August 20, 1998 and recorded in the Essex County Clerk’s Office on August 28, 1998, the City transferred the Property to Blossom Hill for Seven Hundred Seventy-Five Thousand Dollars and Zero Cents ($775,000.00) with the deed restriction stating that “anyone claiming title from, through or under [Blossom Hill Urban Renewal Corp.] shall be subject to the terms and conditions embraced in the Resolutions passed by the Municipal Council authorizing the sale as well as accepting the bid” and a right of reverter if the commencement of construction for the Original Project fail to occur within six months of the closing of title (the “Deed”); and
WHEREAS, a Rider is affixed to the Deed, which states that “[t]he fee simple absolute shall vest in Grantee SO LONG AS said Grantee shall make a minimum Capital Investment of $5,000,000, to repair, alter and improve [the Property] in accordance with the Development Proposal submitted by the Grantee on March 2, 1998 and pursuant to Resolution 7RCY (A.S.) as amended adopted by the Municipal Council of Newark on May 6, 1998”; and
WHEREAS, that date has come and passed but Blossom Hill has nonetheless agreed to make the minimum Capital Investment of Five Million Dollars and Zero Cent ($5,000,000.00) to repair, alter and improve [the Property] in accordance with the Amended Project as defined and set forth below; and
WHEREAS, said Rider further states that “[t]he project will be completed within thirty-six (36) months after the start of construction and construction will start within six (6) months after the closing of title, subject to receipt of applicable approvals”; and
WHEREAS, said Rider further states that the “conditions and covenants as stated in the resolution and in the Deed shall be deemed fulfilled upon the issuance of a Certificate of Occupancy or unless the Grantor commences an action in a court of competent jurisdiction to set this conveyance aside for failure to perform said conditions within six (6) months after the date of expiration of those conditions”; and
WHEREAS, as of the date hereof, Blossom Hill has not constructed the Original Project on the Property, including a day care center, elder care center, and senior citizen housing; and
WHEREAS, on April 29, 2024, the City sent a default letter to Blossom Hill for its failure to construct the Original Project, including a day care center, elder care center, and/or senior citizen housing on the Property (“Default Letter”); and
WHEREAS, in response to the City’s Default Letter, Blossom Hill has represented that the Property has remained vacant through a combination of failed attempts to develop the Original Project within the confines of the various deed restrictions contained in the Deed, a lack of financing for the Original Project, and a lack of potential rental or sale market for the restricted use in the Original Project; and
WHEREAS, Blossom Hill also submitted concept plans to the City to construct a project consisting of multi-family residential use and related accessory use (the “Amended Project”) through Blossom Hill Urban Renewal Corp., a successor entity, Argo Michaels JV, LLC, or a related entity; and
WHEREAS, the City has determined, based on market conditions for the Original Project and the current needs of the City, that it is in the best interest of the taxpayers to: (1) avoid the expense of costly litigation to enforce exercising reversionary rights to the Property; and (2) promote the construction of construct a transformative project that meets the current goals of the City which will provide more market rate housing and more affordable housing, including generating a minimum of twenty percent (20%) affordable housing; and
WHEREAS, the Parties have engaged in negotiations relative to the Amended Project and new project deadlines, and the City has determined that in furtherance of its goals and objectives it is in the City’s best interest to enter into a Settlement Agreement with Blossom Hill for the purpose of setting forth in detail the Amended Project and duties and obligations of Blossom Hill and/or any successor entity; and
WHEREAS, Blossom Hill acknowledges that should it and/or any successor entity fail to meet any of the deadlines contained in the proposed Settlement Agreement attached hereto as Exhibit A, the City will have the right to exercise its reversionary rights to the Property; and
WHEREAS, the City and Blossom Hill have amicably agreed to settle and adjust the matters in difference between them on the terms and conditions set forth in the Settlement Agreement, attached hereto as Exhibit A.
NOW, THEREFORE, BE IT RESOLVED, BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Mayor of the City of Newark and/or his designee, the the Deputy Mayor/Director of the Department of Economic and Housing Development, are hereby authorized to enter into and execute the Settlement Agreement in substantially the form attached hereto as Exhibit A.
2. The Deputy Mayor/Director of the Department of Economic and Housing Development is hereby authorized to effectuate certain business terms and conditions related to the Settlement Agreement and may enter into and execute as necessary any related documents which may be necessary in order to effectuate the Settlement Agreement.
3. The executed Settlement Agreement shall be placed on file in the Office of the City Clerk by the Deputy Mayor/Director of Department of Economic and Housing Development.
4. This Rresolution shall take effect immediately.
STATEMENT
This Resolution authorizes the Mayor of the City of Newark and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development, on behalf of the City of Newark, to enter into a Settlement Agreement with Blossom Hill Urban Renewal Corp.