Title
Dept/ Agency: Finance
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Purpose: Confirming Bond Sale
Amount to be Financed: $20,000,000.00
Source of Appropriation: Bonds
Purchaser: Open Market
Project Information:
(Description/ Project No./Amount Appropriated/Ordinance No.)
RESOLUTION OF THE CITY OF NEWARK, IN THE COUNTY OF ESSEX, STATE OF NEW JERSEY (THE “CITY”) AUTHORIZING AND APPROVING (A) THE SALE AND ISSUANCE OF BOND ANTICIPATION NOTES, SERIES 2025B (NHA AFFORDABLE HOUSING LOANS) OF THE CITY, (B) THE PREPARATION AND DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND FINAL OFFICIAL STATEMENT IN CONNECTION THEREWITH, (C) THE ENTERING INTO AND EXECUTION OF A NOTE PURCHASE CONTRACT AND A CONTINUING DISCLOSURE CERTIFICATE WITH RESPECT TO SAID NOTES, AND (D) CITY OFFICIALS TO UNDERTAKE OTHER ACTIONS IN CONNECTION THEREWITH
Additional Information:
body
WHEREAS, the Housing Authority of the City of Newark (the "Authority") has been duly created as a public body corporate and politic of the State of New Jersey (the "State") by an Ordinance of the members of the Municipal Council of the City of Newark (the "City"), in the County of Essex (the "County"), State of New Jersey (the “State”) duly adopted pursuant to and in accordance with all applicable law, including the Local Housing Authorities Law, constituting Chapter 19 of the Pamphlet Laws of 1938 (N.J.S.A. 55:14A-1 et seq.) of the State and the acts amendatory thereof and supplemental thereto, as repealed and replaced by the Local Redevelopment and Housing Law, constituting Chapter 79 of the Pamphlet Laws of 1992 (N.J.S.A. 40A:12A-1 et seq.) of the State and the acts amendatory thereof and supplemental thereto (the "Housing Law"); and
WHEREAS, Roizman Development Inc. (the “Developer”) previously acquired, constructed, furnished, equipped and developed properties commonly known as West Kinney Gardens Phase I-A (“West Kinney”), West Kinney Gardens Phase I-B (“Hayes”), and Stella Gardens Apartments (“Prince” and together with West Kinney and Hayes, the “Properties”) as affordable housing projects on land owned by the Authority and leased to the Developer; and
WHEREAS, the Developer financed the acquisition, construction, furnishing, equipping and development of the Properties, in part, with (i) low-income housing tax credits, (ii) loans from the Authority, the New Jersey Department of Community Affairs, and the New Jersey Housing and Mortgage Finance Agency, and (iii) Developer equity; and
WHEREAS, since the fifteen (15) year tax compliance period for the low income housing tax credits has expired, the Authority desires to exercise its purchase option right to acquire the Properties from the Developer for the purpose of maintaining the Properties as affordable housing projects for the benefit of the residents of the City; and
WHEREAS, the Authority is the sole member of certain related entities known as Newark HP I, LLC (“Newark I”), Newark HP II, LLC (“Newark II") and Newark HP III, LLC (“Newark III” and together with Newark I and Newark II, the “Authority Entities”); and
WHEREAS, Newark I, Newark II and Newark III will be the acquiring properties commonly referred to as West Kinney, Hayes and Prince, respectively; and
WHEREAS, the Authority has requested the City’s assistance in obtaining funds to assist the Authority Entities in acquiring the Properties from the Developer, including the payoff of any outstanding loans encumbering the Properties; and
WHEREAS, in order to aid the Authority Entities in acquiring the Properties for the purpose of maintaining low and moderate income housing in the City, the City issued Bond Anticipation Notes, Series 2024B in the principal amount of $20,000,000.00 on May 14, 2024 (the “Original Notes”), which Original Notes mature on May 13, 2025, pursuant to the Local Bond Law, N.J.S.A. 40A:2-1 et seq, as amended and supplemented (the “Local Bond Law”), and the Housing Law, to provide loans in an aggregate amount not to exceed $20,000,0000 to the Authority Entities (the “Loans”), which were used by the Authority Entities to fund the costs of acquiring the Properties, including, but not limited to, as applicable, the payoff of any outstanding loans encumbering the Properties, appraisal fees, environmental testing and remediation, surveys, title work, and legal and professional fees and expenses; and
WHEREAS, the City issued the Original Notes, which, pursuant to Section 37(c)(2) of the Housing Law, may mature in annual installments commencing not more than two (2) and ending not later than forty (40) years from the date of initial issuance of the Original Notes, to finance the Loans, which Loans are expected to be paid in full by the Authority and/or the Authority Entities within twenty-four (24) months after the initial issuance of the Original Notes; and
WHEREAS, the City capitalized the interest due on the Original Notes during the first year of issuance of such Original Notes and the Authority Entities will pay any interest due on the Original Notes in the second year and, if necessary, in future years from revenues projected to be generated from the respective Properties; and
WHEREAS, the City desires to sell and issue $20,000,000.00 Bond Anticipation Notes, Series 2025B (NHA Affordable Housing Loans) (the “Notes”) to refund the Original Notes, all pursuant to the provisions of the Local Bond Law, specifically N.J.S.A. 40A:2-28, the Housing Law, the Bond Ordinance (as defined below), and this resolution (the “Resolution”); and
WHEREAS, the City now wishes to authorize, approve, effectuate, and implement the issuance of the Notes and any and all actions related thereto via the adoption of this Resolution; and
WHEREAS, pursuant to, and in accordance with, as applicable, (i) the Local Bond Law, (ii) the Housing Law, (iii) the Revised Uniform Limited Liability Company Act (N.J.S.A. 42:2C-1 et seq.) (the “Limited Liability Company Act”), and (iii) a bond ordinance duly adopted on September 20, 2023 by the Municipal Council of the City, approved by the Mayor, and published as required by law (the “Bond Ordinance”), the City is seeking to authorize the sale, issuance, execution, and delivery of the Notes; and
WHEREAS, the City, in order to issue the Notes at competitive market rates, seeks to, among other things, authorize the preparation and distribution of a Preliminary Official Statement (as hereinafter defined) and an Official Statement (as hereinafter defined); and
WHEREAS, in anticipation of the issuance and sale of the Notes, the City expects to receive an offer to purchase the Notes from an underwriter designated by the City (the “Underwriter”) upon such negotiated terms and conditions as set forth in a note purchase contract (the “Note Purchase Contract”) by and between the City and the Underwriter, the form of which is presented to this meeting and is on file in the Office of the Clerk of the City and incorporated herein by reference, and the City wishes to approve the form and execution of the Note Purchase Contract; and
WHEREAS, the City, also seeks to, among other things, authorize the preparation, execution and delivery of, as applicable, the Notes, a Preliminary Official Statement, an Official Statement, a Continuing Disclosure Certificate (as hereinafter defined), the Note Purchase Contract, and any other agreements or documents required for the authorization, sale, issuance, execution and delivery of the Notes.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, IN THE COUNTY OF ESSEX, STATE OF NEW JERSEY, THAT:
1. The recitals set forth above are incorporated herein as if fully set forth herein.
2. The City is hereby authorized to issue the not to exceed $20,000,000.00 Notes.
3. Pursuant to the provisions of the Local Bond Law, the Acting Director of Finance and Interim Chief Financial Officer or the Director of Finance and Chief Financial Officer (each hereinafter referred to as the “Chief Financial Officer) are each hereby authorized, in accordance with the Bond Ordinance and this Resolution, to sell the Notes on a negotiated basis to the Underwriter pursuant to the terms of the Note Purchase Contract. The Chief Financial Officer is also authorized, at his or her discretion, in accordance with the applicable provisions of the Bond Ordinance and this Resolution, to offer and sell the Notes on a competitive basis and to award the Notes to the bidder based upon a bid of the lowest net interest cost or true interest cost. The Notes will be dated their date of delivery and shall mature not later than one (1) year from their date as shall be determined by the Chief Financial Officer. The Notes may be renewed from time to time in accordance with the provisions of the Local Bond Law. The Notes shall not be subject to redemption prior to maturity.
4. Preliminary Official Statement and Official Statement. The distribution by the City of a Preliminary Official Statement (the “Preliminary Official Statement”), in substantially the form attached hereto as Exhibit A, to be used in connection with the marketing and sale of the Notes, is hereby approved. The Mayor, City Administrator, and Chief Financial Officer of the City (each an “Authorized Officer(s)”) are each hereby authorized and directed, on behalf of the City, to execute and deliver a certificate that “deems final” the Preliminary Official Statement in accordance with the Rule (as herein defined).
After the sale of the Notes, the Preliminary Official Statement shall be modified to reflect the effect of the sale of the Notes and any other revisions not inconsistent with the substance thereof; and said Preliminary Official Statement, deemed “final” by an Authorized Officer in accordance with the Rule, as so modified, shall constitute the final Official Statement (the “Official Statement”). The Authorized Officers are each hereby authorized and directed on behalf of the City to execute and deliver said Official Statement.
5. Note Purchase Contract. The form of the Note Purchase Contract, in substantially the form presented at this meeting as Exhibit B hereto and on file in the office of the Clerk of the City and incorporated herein by reference, with such changes as may be approved by the Chief Financial Officer, upon the recommendations of Bond Counsel to the City (as hereinafter defined) and the Municipal Advisor to the City (as hereinafter defined), is hereby approved, and the execution and delivery of the Note Purchase Contract by the Mayor and/or the Chief Financial Officer of the City is hereby authorized, which execution shall be conclusive evidence of the approval thereof. The City Clerk is hereby authorized to attest to such signature or signatures, as and if applicable. Following execution, the fully executed Note Purchase Contract shall be filed with the City Clerk and the Underwriter.
6. Appointment of Underwriter. The investment banking firm of Siebert Williams Shank & Co., LLC, New York, New York is hereby appointed Underwriter (the “Underwriter”) for the Notes. The Chief Financial Officer of the City is hereby authorized and directed, in consultation with Bond Counsel and the Municipal Advisor, to negotiate and approve the terms of the Note Purchase Contract with the Underwriter for the sale and purchase of the Notes. The Chief Financial Officer is also authorized and directed to negotiate and determine the compensation to the Underwriter, including fees and expenses and the underwriter counsel fee, for the marketing, purchase and sale of the Notes. The Chief Financial Officer is directed to report in writing to the governing body at the meeting next succeeding the date when any sale or delivery of the Notes pursuant to this Resolution is made. Such report must include the amount, the description, the interest rate and the maturity schedule of the Notes sold, the price obtained and the name of the purchaser, and such report shall be entered in full in the minutes of such meeting.
7. Prior Actions and Execution of Notes. All actions taken to date by the Authorized Officers, employees, professionals and agents of the City with respect to the authorization, sale, issuance, execution and delivery of the Notes, including, but not limited to, submissions and applications to rating agencies, the appointment of an Underwriter, and the distribution and dissemination of the Preliminary Official Statement for the Notes, as applicable, are hereby approved, ratified, adopted and confirmed, and each Authorized Officer is hereby authorized and directed to execute and deliver the Notes and any such agreements, documents or submissions required for the authorization, sale, issuance, execution and delivery of the Notes, and the City Clerk or Deputy Clerk is hereby authorized and directed to attest to the signatures of the Authorized Officers and to affix, imprint or reproduce the seal of the City on such Notes and on any such agreements, documents or submissions related to the authorization, sale, issuance, execution and delivery of the Notes.
8. All other details or requirements of, as applicable, the Bond Ordinance, the Local Bond Law, the Limited Liability Company Act, and the Housing Law shall be determined and approved by an Authorized Officer of the City, upon consultation with Wilentz, Goldman & Spitzer, P.A., Bond Counsel to the City (“Bond Counsel”), Samuel Klein and Company, CPAs, Auditor to the City (the “Auditor”), and NW Financial Group, LLC, Municipal Advisor to the City (the “Municipal Advisor”), and such approvals are to be conclusively evidenced by his or her execution of the Notes as provided herein or on any other document, certificate or agreement related to the authorization, sale, issuance, execution and delivery of the Notes.
9. Continuing Disclosure Certificate. The City hereby covenants and agrees to comply with the secondary market disclosure requirements of Rule 15c2-12, as amended (the “Rule”), promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended, and agrees to covenant to such compliance, as required, in a Continuing Disclosure Certificate (the “Continuing Disclosure Certificate”), in substantially the form attached hereto as Exhibit C. In connection therewith, an Authorized Officer of the City, in consultation with Bond Counsel, the Auditor and the Municipal Advisor to the City, is hereby authorized and directed to enter into and execute the Continuing Disclosure Certificate, evidencing the contractual undertaking of the City to comply with the requirements of the Rule and to deliver the Continuing Disclosure Certificate in connection with the offer and sale of the Notes. Notwithstanding the foregoing, failure of the City to comply with the covenants set forth in the Continuing Disclosure Certificate shall not be considered a default on the Notes; however, any Noteholder may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance, to cause the City to comply with its obligations hereunder and thereunder. The Authorized Officers, and any professionals or agents of the City acting on its behalf, are each hereby authorized and directed to execute and deliver all certificates, documents and agreements in connection therewith and, if necessary, to file budgetary, financial and operating data on an annual basis and notices of certain enumerated events as required to comply with, and in accordance with, the provisions of the Rule.
10. The Chief Financial Officer of the City is hereby authorized and directed, upon consultation with Bond Counsel, the Auditor and the Municipal Advisor to the City, to, if applicable, submit information and financial data to ratings agencies to obtain a rating on the Notes.
11. Tax Matters. If and to the extent that the Notes are issued as tax exempt obligations (which determination shall be made prior to sale), the City shall covenant in a Tax and Arbitrage Certificate (the “Tax Certificate”) that it will comply with the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and that it will take no action or omit to take any action that would cause the interest on such notes, if applicable, to lose their tax exemption under the Code. The Chief Financial Officer of the City is hereby authorized and directed to execute and deliver a Tax Certificate, as and if applicable, in connection with the issuance and closing of such Notes only if such Notes are issued on a tax-exempt basis.
12. The Chief Financial Officer of the City is hereby authorized and directed to determine all matters and terms in connection with the Notes, as applicable (including adjusting the principal amount of the Notes (not in excess of the amounts authorized in Section 2 hereof)), the terms set forth in the Note Purchase Contract, substantially in the form attached to this Resolution as Appendix B, or any matters set forth in this Resolution that are deemed necessary and advisable to change by the Chief Financial Officer of the City in consultation with Bond Counsel, the Municipal Advisor, and the Auditor, prior to the sale or closing of the Notes.
13. Further Action. The sale and issuance of the Notes is hereby authorized and approved. The terms and provisions of the Notes (including, without limitation, registered or book-entry form, the aggregate principal amount, the maturity date, interest rate and redemption provisions) shall be determined by the Chief Financial Officer of the City as authorized by the Local Bond Law, the Housing Law and the Bond Ordinance heretofore adopted by the Municipal Council, and this Resolution. The Authorized Officers are each authorized and directed to take all actions which are necessary or convenient to effectuate the terms of this Resolution and the issuance, sale and delivery of the Notes, including, but not limited to, the execution and delivery of the Continuing Disclosure Certificate, the Note Purchase Contract, the Tax Certificate (only if necessary as and to the extent the Notes are issued on a tax-exempt basis), and closing certificates, documents, agreements, instruments, and opinions in connection therewith, in consultation with, and upon the advice of, Bond Counsel, the Municipal Advisor, and the Auditor. The Authorized Officers are hereby authorized and directed to execute and deliver all documents necessary or convenient in connection with the issuance, sale and delivery of the Notes. All such actions heretofore or hereafter taken by the Authorized Officers and professionals of the City are hereby ratified, approved, and confirmed.
14. Pledge of the City. The full faith and credit of the City are hereby pledged to the punctual payment of the principal of and the interest on the Notes authorized by this Resolution. The Notes shall be direct, unlimited obligations of the City. The City shall have the power and be obligated to levy ad valorem taxes upon all taxable property within the City for the payment of such Notes and interest thereon, without limitation as to rate or amount.
15. This resolution shall take effect immediately.
STATEMENT
Resolution authorizing and approving (a) the sale and issuance of Bond Anticipation Notes, Series 2025B, (b) the preparation and distribution of a Preliminary Official Statement and Final Official Statement, (c) entering into and execution of a Note Purchase Contract and Continuing Disclosure Certificate, and (d) to undertake other actions in connection therewith.