Title
Dept/ Agency: Economic Housing and Development
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Purpose: Approving Amended and Restated HOME Affordable Housing Agreement and Assignment and Assumption Agreement
Project Information: RESOLUTION OF THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK CONSENTING TO THE EXECUTION OF AN AMENDED AND RESTATED HOME AFFORDABLE HOUSING AGREEMENT AND ASSIGNMENT AND ASSUMPTION AGREEMENT RELATING TO THE ASSIGNMENT OF THE AMENDED AND RESTATED HOME AFFORDABLE HOUSING AGREEMENT, MORTGAGE AND NOTE FROM Lincoln Park LIHTC, LLC TO Lincoln Park KRM, LLC FOR AN AFFORDABLE HOUSING PROJECT LOCATED AT 26-28 West Kinney Street, 22-24 West Kinney Street, 18-20 West Kinney Street, 15-17 Lincoln Park, 65 Lincoln Park, Block 117, Lots 1, 3, 6, Block 118, Lot 31, Block 123, Lot 33 on the tax map of the City, (collectively, the “Project”)
Additional Information:
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WHEREAS, Lincoln Park LIHTC, LLC (the “Entity”) is the owner of certain real property located at: (i) 65 Lincoln Park, in the City of Newark, County of Essex, State of New Jersey, and designated as Block 123, Lot 33; (ii) 15-17 Lincoln Park, in the City of Newark, County of Essex, State of New Jersey, and designated as Block 118, Lot 31; (iii) 26-28 West Kinney Street, in the City of Newark, County of Essex, State of New Jersey, and designated as Block 117, Lot 1; (iv) 22-24 West Kinney Street, in the City of Newark, County of Essex, State of New Jersey, and designated as Block 117, Lot 3; and (v) 18-20 West Kinney Street, in the City of Newark, County of Essex, State of New Jersey, and designated as Block 117, Lot 6, on the municipal tax map (collectively, the “Property”); and
WHEREAS, pursuant to Resolution 7R3-K040109 as duly adopted by the Municipal Council of the City of Newark on April 1, 2009 (the “Resolution”), and that certain First Amended HOME Program Affordable Housing Agreement, dated as of June 29, 2009, by and between the Entity and the City, as further amended by that certain Deed Restrictive Second Amended Affordable Housing Agreement, dated as of March 9, 2010 (duly authorized on November 24, 2009 by Resolution No. 7R3-C(s)-K112409), and as further amended by that certain Third Amended Affordable Housing Agreement, dated as of January 26, 2010 (duly adopted on January 6, 2010; Resolution No. 7R3-d-010610) (collectively, the “Original HOME Agreement”), the City provided HOME Program funds (24 CFR Part 92) to the Entity in the amount of $540,000.00 (the “HOME Loan”) to finance the construction of an affordable residential project on the Property as more particularly described therein (the “Project”); and
WHEREAS, the HOME Loan is evidenced by a certain Promissory Note dated as of March 31, 2010 made by the Entity in favor of the City (the “Note”), and performance is secured by a Mortgage and Security Agreement dated as of March 31, 2010 and recorded on April 7, 2010 in the Essex County, New Jersey, Register’s Office, in Book 12247, Page 9335, as Instrument No. 10025110 (the “Mortgage,” with the HOME Agreement, the Note, the Mortgage, together with all other documents and agreements executed and delivered in connection with the HOME Loan being sometimes collectively referred to herein as the “HOME Agreements”); and
WHEREAS, the Entity completed the Project in compliance with all respects with the Original HOME Agreement; and
WHEREAS, the Entity has entered into a contract with Lincoln Park KRM, LLC (“KRM”), with a business address located at 5 Powell Lane, Collingswood, NJ 08108, to sell or otherwise transfer the Property and Project, which contract requires that the City approve the transfer of the Original HOME Agreement, Mortgage and Note to KRM; and
WHEREAS, KRM has agreed to accept such sale and transfer of the Property, subject to and assuming all obligations and restrictions under the HOME Agreements, pursuant to the terms and conditions of an Assignment and Assumption Agreement, by and between the City, the Entity and KRM, and accompanying Assignment of Mortgage, in the forms annexed hereto (the “Assignment Agreement”); and
WHEREAS, during its review of the assignment request, the City determined that the fully executed Original HOME Agreement, as amended, had not been recorded as required under the Original HOME Agreement and the Resolution; and
WHEREAS, as an express condition to the City’s consent and approval of the sale, transfer and exchange of the Property and the Project to KRM pursuant to the Assignment, the Entity and the City shall execute, deliver and record an Amended and Restated HOME Deed Restrictive Affordable Housing Agreement (the “Amended and Restated HOME Agreement,” together with the Original HOME Agreement, the Note, the Mortgage, and all other documents and agreements executed and delivered in connection with the HOME Loan being sometimes collectively referred to herein as the “Assigned Agreements”), with the Essex County Register’s Office prior to the execution, delivery and recordation of the Assignment; and
WHEREAS, the Entity shall promptly record the Amended and Restated HOME Agreement after execution and delivery thereof, and be responsible for payment of all recording costs and expense; and
WHEREAS, the Entity shall promptly deliver a recorded copy of the Amended and Restated HOME Agreement to the City’s Department of Economic and Housing Development upon receipt; and
WHEREAS, the City has reviewed the Entity’s Request for Consent of City for Sale of Project and all related agreements and other documents and has determined that KRM has the capacity and experience to own and operate the Project and to assume and perform all of the rights and obligations of the Assignor under the Assigned Agreements.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The above-stated Recitals are hereby found to be true and correct, and are incorporated into this Resolution as though fully set forth herein.
2. The Municipal Council hereby authorizes and directs the Mayor and/or his designee, the Deputy Mayor/Director of Department of Economic and Housing Development, to execute and deliver, on behalf of the City, the Amended and Restated HOME Agreement between the City and the Entity, in the form annexed hereto.
3. The City shall promptly record the fully executed Amended and Restated HOME Agreement with the Essex County Register’s Office and the Entity shall be responsible for all recording costs and expense.
4. Subject to the express condition that the Amended and Restated HOME Agreement has been duly executed, delivered and recorded, the Municipal Council hereby consents to (i) the sale, transfer and conveyance of the Property from the Entity to KRM and (ii) the assignment of the Amended and Restated HOME Agreement, the Note, the Mortgage and the other Assigned Agreements from the Entity to KRM pursuant to the terms and conditions of the Assignment Agreement in the form annexed hereto.
5. The Municipal Council hereby authorizes the Mayor and/or his designee, the Deputy Mayor/Director of Department of Economic and Housing Development to execute and deliver, on behalf of the City, the Assignment Agreement. The Assignment Agreement, once fully executed, shall be held by the City until KRM obtains NJHMFA approval of the transaction and consummates the sale, transfer and conveyance of the Property from the Entity to KRM.
6. The Assignment Agreement shall be promptly recorded in the Essex County Register’s Office upon KRM’s receipt of NJHMFA approval for the transaction and the consummation of the sale, transfer and conveyance of the Property from the Entity to KRM, and KRM shall be responsible for all recording costs and expense in connection therewith.
7. This Resolution shall take effect immediately.
8. The Assignment Agreement is conditionally approved and shall be expressly conditioned upon: (i) NJHMFA approval and (ii) the consummation of the sale, transfer and conveyance of the Property from the Entity to KRM.
9. If NJHMFA approval is not obtained or the sale, transfer and conveyance of the Property does not occur for any reason, the Assignment Agreement is null and void and of no further force or effect.
10. The Amended and Restated HOME Agreement and Assignment Agreement, once each are fully executed, shall be filed by the Deputy Mayor/Director of the Department of Economic and Housing Development with the Office of the City Clerk.
STATEMENT
This Resolution memorializes the City’s consent to (i) the sale, transfer and conveyance of the Project consisting of sixty-six (66) affordable residential rental units located on land which is identified on the Official Tax Map of the City of Newark as Block 117, Lots 1, 3, 6, Block 118, Lot 31 and Block 123, Lot 33, more commonly known as 26-28 West Kinney Street, 22-24 West Kinney Street, 18-20 West Kinney Street, 15-17 Lincoln Park and 65 Lincoln Park (the “Project”) by Lincoln Park LIHTC, LLC (“Entity”) to Lincoln Park KRM, LLC (“KRM”) and to (ii) the assignment of the Amended and Restated HOME Agreement and the other Assigned Agreements governing the Project from the Entity to KRM pursuant to the terms of the Assignment Agreement. This Resolution also authorizes the Mayor and/or his designee, the Deputy Mayor/Director of Department of Economic and Housing Development to execute, on behalf of the City, the Amended and Restated HOME Agreement and an Assignment Agreement with the Entity and KRM, as applicable, in the forms annexed to the Resolution.