Title
Dept/ Agency: Economic and Housing Development
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Type of Service: Private Sale/Redevelopment/ Assignment and Assumption
Purpose: Assignment of Redevelopment rights from Springfield Avenue Market Place, LLC, current owner of 66-80 South Orange Avenue, Block 235, Lots 1-10, 53, 54, and 56 (now known as Block 235, Lot 1)(Central Ward) to KS 66-80 South Orange Avenue, LP, 556 Market Street, Newark, New Jersey 07105 in accordance with the approved Redevelopment Plan.
Entity Name: KS 66-80 South Orange Avenue, LP
Entity Address: 556 Market Street, Newark, New Jersey 07105
Contract Amount: Pursuant to the terms of the Agreement of Purchase and Sale dated August 12, 2019 between Seller and Buyer, including all amendments thereto, and the Final Order entered in the matter of Russell Springfield, LLC, et al., v. WKA Development Corp., et al., County of Essex, Chancery Division, General Equity Part, Docket No.: ESX-C-199-17 (hereinafter the “Final Order”)
Funding Source: Not Applicable
Contract Period: The commencement and completion dates shall be consistent with the Redevelopment Agreement, any amendments thereto, and the Assignment and Assumption of Developer’s Agreement and Consent to Assignment authorized herein
Contract Basis: ( ) Bid ( ) State Vendor ( ) Prof. Ser. ( ) EUS
( ) Fair & Open ( ) No Reportable Contributions ( ) RFP ( ) RFQ
(X) Private Sale (X) Grant ( ) Sub-recipient ( ) n/a
List of Property:
66-80 South Orange Avenue/Block 235/Lot 1/Central Ward (merged Lots 1-10, 53, 54 and 56)
Additional Information:
The Assignment and Assumption of the Developer’s Agreement and Consent to Assignment are being done in accordance with the Final Order.
Resolution 7RDE(AS) adopted October 6, 2004, authorized the City to enter into the “Agreement for the Sale of Land and Redevelopment of Springfield Marketplace” with Springfield Avenue Marketplace, LLC.
Resolution 7RCR(AS) adopted March 16, 2005, authorized the City to enter into the “Agreement for the Sale of Land and Redevelopment of Springfield Marketplace” with Springfield Avenue Marketplace, LLC, revising provisions of the Agreement authorized by Resolution 7RDE(AS) adopted on October 6, 2004.
Resolution 7R3-A(S3) adopted on October 21, 2008, authorized the City to enter into the “Amendment to Agreement for Sale of Land and Redevelopment, dated April 6, 2005, and Letter Agreement dated February 26, 2007, for the Springfield Avenue Marketplace Project”, which assigned and transferred the redevelopment rights for Blocks 236, 237, and 238 from Springfield Avenue Marketplace, LLC to TDAF I Springfield Avenue Holding, LLC, as well as Block 236.01, Lots 1.01, 1.02, 1.03, and 1.04; Springfield Avenue Marketplace, LLC retained redevelopment rights for Block 235, Lots 1 through 10, 53, 54, and 56.
Resolution 7R3-b adopted on September 2, 2015, authorized the City to enter into the “Assignment and Restatement of Redevelopment Agreement”, which assigned the redevelopments rights for Block 235, Lots 1 through 10, 53, 54, and 56, commonly known as 66-80 South Orange Avenue from Springfield Avenue Marketplace, LLC to Prince Orange South Holdings, LLC, c/o Snipes Companies, LLC.
body
WHEREAS, the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1, et seq. (the “LRHL”), authorizes municipalities to participate in the redevelopment and improvement of areas in need of redevelopment; and
WHEREAS, pursuant to N.J.S.A. 40A:12A-8(g), the City of Newark (the “City”) is authorized to proceed with the redevelopment of an area, pursuant to a redevelopment plan, by conveying property at such prices and upon such terms as it deems reasonable; and
WHEREAS, on October 6, 2004, the Municipal Council adopted Resolution 7RDE(AS), which authorized the City to enter into the Agreement for the Sale of Land and Redevelopment of Springfield Marketplace, with Springfield Avenue Marketplace, LLC, for the sale of Blocks 236, 237, and 238; and Block 235, Lots 1- through 10, 53, 54, and 56 (“Original Properties”)(“2004 Agreement”); and
WHEREAS, during the period following authorization of the October 6, 2004 Resolution 7RDE(AS), it was deemed prudent to amend the 2004 Agreement to consider additional issues, such as, but not limited to, environmental, financing, scheduling, and extensions; and
WHEREAS, on March 16, 2005, the Municipal Council approved Resolution 7RCR(AS), which authorized the City to enter into and execute an agreement entitled “Agreement For The Sale Of Land And Redevelopment Of Springfield Marketplace” with Springfield Avenue Marketplace, LLC (the “2005 Agreement”), pursuant to LRHL regarding the Original Properties; and
WHEREAS, on or about April 6, 2005, the 2005 Agreement was fully executed by the City of Newark and Springfield Avenue Marketplace, LLC; and
WHEREAS, on October 21, 2008, pursuant to Section 1201 of the 2005 Agreement, the Municipal Council adopted Resolution 7R3-A(S3), which authorized the City to enter into and execute the “Amendment to Agreement for Sale of Land and Redevelopment, dated April 6, 2005, and a Letter Agreement dated February 26, 2007, for the Springfield Avenue Marketplace Project” (“2008 Agreement”), for the assignment and transfer of redevelopment rights for Blocks 236, 237, and 238 and Block 236.01, Lots 1.01, 1.02, 1.03, and 1.04 from Springfield Avenue Marketplace, LLC to TDAF I Springfield Avenue Holding, LLC; and
WHEREAS, pursuant to the 2008 Agreement, Springfield Avenue Marketplace, LLC retained the rights and responsibilities for the redevelopment of Block 235, Lots 1 through 10, 53, 54, and 56, commonly known as 66-80 South Orange Avenue (the “Property”); and
WHEREAS, on September 2, 2015, the Municipal Council adopted Resolution 7R3-b, which authorized the City to enter into and execute the “ASSIGNMENT AND RESTATEMENT OF REDEVELOPMENT AGREEMENT” (the “Amendment”), which assigned and transferred the redevelopment rights for the Property from Springfield Avenue Marketplace, LLC to Prince Orange South Holdings, LLC, c/o Snipes Companies, LLC(“Redeveloper”); and
WHEREAS, the Amendment was fully executed on or about November 5, 2015; and
WHEREAS, Prince Orange South Holdings, LLC, failed to take ownership of the Property via Deed, and recording thereof; failed to perform in accordance with the terms of the Amendment; and it’s Limited Liability status was revoked by the State of New Jersey on or about December 16, 2017; and
WHEREAS, since Springfield Avenue Marketplace, LLC, never transferred the Property to Prince Orange South Holdings, LLC, Springfield Avenue Marketplace, LLC is still the owner of the Property; and
WHEREAS, Springfield Avenue Marketplace, LLC (the “Seller”), now desires to transfer and assign the redevelopment rights of the property to KS 66-80 South Orange Avenue, LP, 556 Market Street, Newark, New Jersey 07105 (the “New Redeveloper”)(“Buyer”) in accordance with Section 1201 of the 2005 Agreement, which permits assignments prior to the issuance of a Certificate of Occupancy with the written consent of the City of Newark; and
WHEREAS, the City desires to allow the transfer and assignment of redevelopment rights of the Property (now known as Block 235, Lot 1) to New Redeveloper for the purpose of the development of sixty (60) residential rental apartments, along with associated parking (the “Proposed Project”) in accordance with Section 1201 of the 2005 Agreement, solely as a result of the filed Final Order entered in the matter of Russell Springfield, LLC et al., v. WKA Development Corp., et al., County of Essex, Chancery Division, General Equity Part, under Docket No. ESX-C-199-17 (“Final Order”); and
WHEREAS, the New Redeveloper shall obtain, at its sole cost and expense, any and all required approvals for the Proposed Project at the Property; and
WHEREAS, the City will neither object nor support the application(s) to be made by the New Redeveloper; and
WHEREAS, the closing of title between the Seller and Buyer shall take place, no later than forty-five (45) days of the adoption of this Resolution or expiration of the appeal period following such adoption, whichever is longer; and
WHEREAS, pursuant to the Final Order, wherein the City was not a party, the City shall receive a total sum of Three Hundred Thousand Dollars ($300,000.00) from the closing of title to be paid as follows:
i. One-half ($150,000.00) upon the closing of title, which is when the Buyer is responsible for paying the first half of the purchase price; and
ii. One-half ($150,000.00) plus interest at the rate of five percent (5%) per annum from the date of the initial closing of title to when the Buyer pays the second half of the purchase price, which shall not exceed eighteen (18) months; and
WHEREAS, the City makes no claims, promises, guarantees, representations or warranties, express or implied, that the Mayor of the City of Newark and the Municipal Council’s approval will be granted for any approvals that the New Redeveloper/Buyer may require and/or seek; and
WHEREAS, the City makes no claims, promises, guarantees, representations or warranties, express or implied, that the City of Newark Planning Board and/or the Zoning Board of Adjustment will approve any land use applications that the New Redeveloper/Buyer may file.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. All of the above Recitals are hereby incorporated herein by reference as though fully set forth at length herein.
2. All redevelopment rights of 66-80 South Orange Avenue (Block 235, Lot 1) be and are hereby transferred and assigned to KS 66-80 South Orange Avenue, LP, 556 Market Street, Newark, New Jersey 07105, for the purpose of development of sixty (60) residential rental apartments, along with associated parking (the “Proposed Project”).
3. Any and all agreements for the sale and redevelopment of 66-80 South Orange Avenue (Block 235, Lot 1) are hereby amended to name KS 66-80 South Orange Avenue, LP as the designated redeveloper, and more specifically Resolution 7R3-b adopted on September 2, 2015, is hereby rescinded.
4. The City approves of transfer and the assignment of the Agreement for the Sale of Land and Redevelopment (the “Agreement”) and all redevelopment rights from Springfield Avenue Marketplace, LLC to KS 66-80 South Orange Avenue, LP, for a development project at 66-80 South Orange Avenue/Block 235, Lot 1 (merged Lots 1-10, 53, 54 and 56) (the “Property”) in accordance with Section 1201 of the 2005 Agreement, solely as a result of the filed Final Order entered in the matter of Russell Springfield, LLC et al., v. WKA Development Corp., et al., County of Essex, Chancery Division, General Equity Part, under Docket No. ESX-C-199-17 (“Final Order”).
5. The Mayor of the City of Newark and/or his designee, the Deputy Mayor/Director of the Department of Economic and Housing Development of the City are hereby authorized to enter into and execute the “Assignment and Assumption of Developer’s Agreement and Consent to Assignment” (the “Assignment”), in the form attached hereto, with such changes as may be approved by the officer executing same, with the advice of the City’s Corporation Counsel, such approval to be conclusively evidenced by such officer's execution thereof.
6. All other terms and conditions of the authorizing resolutions and corresponding Redevelopment Agreements, and its amendments, if any, shall remain the same.
7. The Redeveloper shall have thirty (30) days from the date of this Resolution as certified by the Office of the City Clerk to execute and return to the Department of Economic and Housing Development any and all documents that may be deemed necessary to effectuate the assignment and transfer. Should the Redeveloper fail to execute and return any required documents within this thirty (30) day period, the authorization provided by this Resolution shall be null and void, unless the Deputy Mayor/Director of the Department of Economic and Housing Development agrees in writing to extend this thirty (30) day period.
8. Pursuant to the Final Order, wherein the City was not a party, the City shall receive a total sum of Three Hundred Thousand Dollars ($300,000.00) from the closing of title to be paid:
a. One-half ($150,000.00) upon the closing of title, which is when the Buyer is responsible for paying the first half of the purchase price; and
b. One-half ($150,000.00) plus interest at the rate of five percent (5%) per annum from the date of the initial closing of title to when the Buyer pays the second half of the purchase price, which shall not exceed eighteen (18) months.
9. The Deputy Mayor/Director of the Department of Economic and Housing Development shall submit this Resolution together with the executed Assignment, and any other corresponding documents, including the Final Order to be placed on file in the Office of the City Clerk.
10. This Resolution shall take effect immediately.
STATEMENT
Resolution approving the City's execution of an Assignment and Assumption of Developer’s Agreement and Consent to Assignment from Springfield Avenue Marketplace, LLC to KS 66-80 South Orange Avenue, LP, which shall allow KS 66-80 South Orange Avenue, LP to develop the Proposed Project at 66-80 South Orange Avenue/Block 235, Lot 1 (merged Lots 1-10, 53, 54 and 56), Central Ward. The Assignment is being done in accordance with the Final Order entered in Russell Springfield, LLC, et al., v. WKA Development Corp., et al., County of Essex, Chancery Division, General Equity Part, Docket No.: ESX-C-199-17, wherein the City was not a party.