Title
AN ORDINANCE AMENDING THE TAX ABATEMENT GRANTED TO KSPG 39 MADISON URBAN RENEWAL, LLC, 486 MARKET STREET, NEWARK, NEW JERSEY 07105, PURSUANT TO THE LONG TERM TAX EXEMPTION LAW FOR A PROJECT LOCATED ON REAL PROPERTY COMMONLY KNOWN AS 41 MADISON STREET, NEWARK, NEW JERSEY 07102, AND TO BE IDENTIFIED ON THE CITY’S TAX MAP AS BLOCK 173, LOT 60 TO REVISE CERTAIN TERMS OF THE FINANCIAL AGREEMENT FOR PURPOSE OF DEVELOPER SEEKING TO OBTAIN A CERTAIN MORTGAGE LOAN TO REFINANCE THEIR EXISTING DEBT ON THE PROPERTY.
body
WHEREAS, on December 18, 2024, the Newark Municipal Council adopted Ordinance 6PSF-d (the “Original Ordinance”, a copy of which is attached hereto as Exhibit A) granting a long term tax abatement to KSPG 39 Madison Urban Renewal, LLC, 486 Market Street, Newark, New Jersey 07105 (the “Entity”) for a project to construct at 33-41 Madison Street, Newark, New Jersey and identified on the City’s tax map as Block 173, Lot 60 (the “Property”) a new five (5) story building consisting of eighty (80) units, of which sixty-four (64) units shall be market-rate residential rental units (the “Market Rate Units”), and sixteen (16) units shall be affordable housing rental units, of which four (4) units shall be restricted to tenants at 40% of Area Median Income (“AMI”), four (4) units shall be restricted to tenants at 60% AMI and eight (8) units shall be restricted to tenants at 80% AMI (the “Income Restricted Units”) and seventeen (17) on-site parking spaces located (collectively, the “Project”); and
WHEREAS, on January 21, 2025, the City and the Entity subsequently executed a financial agreement governing the Original Project (the “Original Financial Agreement”, a copy of which is attached hereto as Exhibit B); and
WHEREAS, the Entity desires to enter into a certain mortgage loan (the “Loan”), to refinance their existing debt on the Property, to be made by Dwight Mortgage Trust LLC, a Delaware limited liability company (collectively, together with its successors and assigns, the “Mortgagee”), secured by the Property and the equity interests in the Entity, and as a condition to making such Loan, Mortgagee requires that the parties hereto amend the Original Financial Agreement to reflect certain changes for the protection of the Mortgagee; and; and
WHEREAS, the Parties desire to amend the Original Financial Agreement to reflect certain changes in the financial agreement that the Mortgagee is requesting as a condition of the Loan; and
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Mayor of the City of Newark is hereby authorized to execute, on the City’s behalf, the Amendment No. 1 to Financial Agreement in the form attached hereto as Exhibit C.
2. An executed copy of the Amendment No. 1 to Financial Agreement authorized by this ordinance shall be filed and maintained with the City Clerk.
3. 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.
4. 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.
5. The adoption of this ordinance is expressly conditioned upon the requirement that the Entity pay the City all outstanding taxes and/service charges, and water/sewer charges within thirty (30) days of the date of the adoption of this ordinance. If the Entity fails to timely satisfy these requirements, this ordinance and the approval granted herein shall be null and void.
6. This ordinance shall take effect upon final passage and publication in accordance with the laws of the State of New Jersey.
STATEMENT
This Ordinance authorizes an amendment to the tax abatement granted to KSPG 39 Madison Urban Renewal, LLC, 486 Market Street, Newark, New Jersey 07105, pursuant to the Long Term Tax Exemption Law, N.J.S.A. 40A:20-1 et. seq., for the Project located on real property commonly known as 41 Madison Street, Newark, New Jersey and identified on the City’s tax map as Block 173, Lot 60 to revise certain terms of the Financial Agreement for the purpose of the Developer seeking to obtain a certain mortgage loan to refinance their existing debt on the Property.
EXHIBIT A
ORIGINAL ORDINANCE
EXHIBIT B
ORIGINAL FINANCIAL AGREEMENT