Title
Dept./ Agency: Economic and Housing Development
Action: ( ) Ratifying (X) Authorizing (X) Amending
Type of Service: Private Sale/Redevelopment
Purpose: An Agreement to Subordinate the City of Newark’s Reverter Rights by entering into a First Amendment to Agreement for Sale and Redevelopment of Land and a Subordination Agreement in order to permit the Redeveloper to obtain construction financing, necessary for the rehabilitation of the Property into three residential units
Entity Name: 229 South 11th LLC
Entity Address: 59 Lincoln Park, Suite 375, Newark, New Jersey 07102
Sale Amount: $32,760.00
Cost Basis: ( ) $ PSF ( ) Negotiated (X) N/A ( ) Other:
Assessed Amount: $0.00
Appraised Amount: $0.00
Contract Period: Not Applicable
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:
229 South 11th Street/Block 1815/Lot11
(Address/Block/Lot/Ward)
Additional Information:
Resolution 7R2-k adopted on December 20, 2023, designating 229 South 11th LLC as the Redeveloper and authorized an Agreement for the Sale and Redevelopment of Land
body
WHEREAS, pursuant to Resolution 7R2-k adopted on December 20, 2023, the Newark Municipal Council (“Municipal Council”) authorized the Mayor and the Deputy Mayor/Director of the Department of Economic and Housing Development to enter into and execute an Agreement for the Sale and Redevelopment of Land (the “Agreement”) with 229 South 11th LLC, 59 Lincoln Park, Suite 375, Newark, New Jersey 07102 (“Redeveloper”) for the sale of City owned real property located at and identified on the official tax map of the City of Newark (“City”) as Block 1815, Lot 11, and commonly known as 229 South 11th Street, Newark, New Jersey (“Property”), for a purchase price of Thirty-Two Thousand Seven Hundred Sixty Dollars and Zero Cents ($32,760.00), for the rehabilitation of the Property to develop three (3) residential apartments (“Project”); and
WHEREAS, the sale and Agreement were authorized pursuant to N.J.S.A. 40A:12A-8(g) and the West Ward Redevelopment Plan; and
WHEREAS, such sale was authorized pursuant to N.J.S.A. 40A:12-13, which requires that such conveyance be subject to the condition that title to the Property revert back to the City in the event of a Default under Section VI., Event of Default, Termination of the Agreement and Right of Reverter (mislabeled Section V), of the Agreement and Section d. of the Deed (the “Reverter Right”); and
WHEREAS, the Redeveloper has represented that it has secured financing from Community Loan Fund of New Jersey, Inc. (“Lender”) in the approximate principal amount of $578,828.00 (the “Loan”), to develop and complete the Project, which Loan will be evidenced by a Promissory Note in the principal amount of the Loan, and will be secured by a Mortgage on the Property (“Mortgage”); and
WHEREAS, as a condition of the above Loan, the Lender has requested that the City subordinate the Reverter Right to the Lender with respect to the Mortgage and Loan; and
WHEREAS, the Agreement states that the Reverter Right may be subordinated by the City subject to formal approval by the Municipal Council and pursuant to N.J.S.A. 40:60-51.2, which authorizes a municipality to waive, release, modify or subordinate any terms, covenants, conditions, limitations or reverters imposed in sales and conveyances of lands as to the erection, alteration or demolition of buildings or any other use to be made of land heretofore imposed by said municipality to accomplish the purposes for which such lands were sold and conveyed either at public or private sale including those set forth pursuant to Section 21 of P.L.1971, c. 199 (C.40A:12-21), but only after public hearing held before such governing body, of the holding of which notice describing the lands in question, and the terms, covenants, conditions, limitations or reverters to be waived, released, modified or subordinated, and, if to be modified or subordinated, describing the manner in which the same shall be modified or subordinated, shall first have been given by advertisement published once each week for two weeks in a newspaper published in said municipality or, if no newspaper be published therein, then in a newspaper circulating in such municipality, provided, however, that the power herein granted shall not be exercised to impair any vested or contractual rights of third parties; and
WHEREAS, the Department of Economic and Housing Development caused a notice to be advertised including the requirements established in N.J.S.A. 40:60-51.2, in the Star Ledger on November 12, 2024 and November 18, 2024, which complies with the notice requirement of once each week for two weeks; and
WHEREAS, the Municipal Council desires to subordinate the City’s Reverter Right contained in the Agreement and the Deed by entering into a First Amendment to Agreement for the Sale and Redevelopment of Land and Subordination Agreement so as to accomplish the Project.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Mayor and/or his designee, and the Deputy Mayor/Director of the Department of Economic and Housing Development are hereby authorized to enter into and execute a Subordination Agreement with and in favor of Community Loan Fund of New Jersey, Inc., a Non-Profit Corporation, 100 Albany Street, Suite 250, New Brunswick, New Jersey 08901 (the “Lender”), in the form attached hereto or such other forms reasonably acceptable to the parties, related to the property located at 229 South 11th Street, Newark, New Jersey, as shown on the official tax map of the City of Newark as Block 1815, Lot 11 (the “Property”), which is located in the West Ward, to permit the rehabilitation of the Property as three (3) residential units (“Project”), by 229 South 11th LLC, 59 Lincoln Park, Suite 375, Newark, New Jersey 07102 (“Redeveloper”), which is authorized pursuant to Resolution 7R2-k adopted on December 20, 2023.
2. The Mayor and/or his designee and the Deputy Mayor/Director of the Department of Economic and Housing Development are hereby authorized to enter into a First Amendment to Agreement for the Sale and Redevelopment of Land with the Redeveloper, in the form attached hereto, related to the Property for the Project.
3. All other terms and conditions of the Agreement for the Sale and Redevelopment of Land, authorized by Resolution 7R2-k adopted on December 20, 2023, shall remain in full force and effect and shall be fully executed together with the First Amendment to Agreement for the Sale and Redevelopment of Land authorized herein.
4. Notice in accordance with N.J.S.A. 40:60-51.2 of the Subordination of the Lender’s mortgage and the City’s Right of Reverter with respect to the Property has been duly given by publication as required by law and holding of a public hearing on said resolution at a Meeting of the Municipal Council on November 26, 2024, in the Council Chamber located at City Hall, 920 Broad Street, Newark, New Jersey.
5. The Deputy Mayor/Director of the Department of Economic and Housing Development shall place a filed copy of the fully executed Subordination Agreement, First Amendment to Agreement for the Sale and Redevelopment of Land with the Office of City Clerk.
STATEMENT
This Resolution authorizes the Mayor of the City of Newark and/or designee, and the Deputy Mayor/Director of the Department of Economic and Housing Development to enter into and execute a Subordination of the City’s Reverter Rights and First Amendment to Agreement for Sale and Redevelopment of Land, to enable the Redeveloper to obtain financing necessary for the rehabilitation of the Property as three residential units located at 229 South 11th Street, Newark, New Jersey, as shown on the official tax map of the City as Block 1815, Lot 11 (West Ward).