Title
Dept/ Agency: Economic & Housing Development
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Type of Service: Application for Long-Term Tax Abatement
Purpose: Acquisition of affordable housing project known as Roseville Manor Phase II
Entity Name: St. Clare Homes Property, Inc.
Entity Address: 77 Academy Street, Newark, New Jersey 07102
Abatement Period: 30 years
Contract Basis: ( ) Bid ( ) State Vendor ( ) Prof. Ser. ( ) EUS
( ) Fair & Open ( ) No Reportable Contributions ( ) RFP ( ) RFQ
( ) Private Sale ( ) Grant ( ) Sub-recipient ( ) n/a
List of Property:
(Address/Block/Lot/Ward)
Block 638, Lot 1.18, 652 Third Street, North Ward
Block 638, Lot 1.17, 654-656 Third Street, North Ward
Block 638, Lot 1.16, 658 Third Street, North Ward
Block 638, Lot 1.24, 641 Fourth Street, North Ward
Block 638, Lot 1.25, 643-645 Fourth Street, North Ward
Additional Information:
)
body
WHEREAS, as authorized under the New Jersey Housing and Mortgage Finance Agency Law of 1983, as amended and supplemented, N.J.S.A. 55:14K-1 et seq. (the "HMFA Law"), Saint Clare Homes Property, Inc., 77 Academy Street, Newark, New Jersey 07102 (the "Entity") submitted an application for the approval of a plan for the acquisition of a residential affordable housing project known as Roseville Manor Phase II located on the following properties in the North Ward:
Block 638, Lot 1.18 652 Third Street, Newark, New Jersey
Block 638, Lot 1.17 654-656 Third Street, Newark, New Jersey
Block 638, Lot 1.16 658 Third Street, Newark, New Jersey
Block 638, Lot 1.24 641 Fourth Street, Newark, New Jersey
Block 638, Lot 1.25 643-645 Fourth Street, Newark, New Jersey
(collectively referred to herein as the "Property"); and
WHEREAS, the housing project consists of fifteen (15) residential affordable housing units which are currently receiving five (5) year tax abatements pursuant to N.J.S.A. 54:4-3.139 et seq.; and
WHEREAS, the 5 year tax abatements which the housing project units are currently receiving will be cancelled, depending on the remaining period of the tax abatement for each unit, once the long term tax abatement becomes effective; and
WHEREAS, the project will be subject to the HMFA Law and the mortgage and other loan documents executed between the Entity and the New Jersey Housing and Mortgage Finance Agency (the "HMFA"); and
WHEREAS, the Entity is seeking a tax exemption for the project pursuant to the provisions of the HMFA Law; and
WHEREAS, the Municipal Council has determined that the project meets an existing need, and has further determined that the project is an improvement made for the purpose of construction, improvement or rehabilitation of housing projects as set forth in the HMFA Law; and
WHEREAS, in accordance with Ordinance No. 6PSF-a 050411 adopted May 4, 2011, the Entity has filed with the City a sworn statement that it has not made any contribution in violation of said ordinance.
NOW, THEREFORE BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The application of Saint Clare Homes Property, Inc., 77 Academy Street, Newark, New Jersey 07102 (the "Entity") for the acquisition of the residential project described in the application and known as Roseville Manor Phase II is hereby approved.
2. The Municipal Council does hereby adopt the Resolution and makes the determination and findings herein contained by virtue of, pursuant to, and in conformity with the provisions of HMFA requirements with the intent and purpose that the HMFA rely thereon in making a mortgage loan to the Entity, which shall construct, own and operate the project.
3. The Municipal Council understands and agrees that the revenue projections set forth in the application are estimates and that the actual payments in lieu of taxes to be paid by the Entity to the City shall be determined pursuant to the Financial Agreement to be executed between the Entity and the City of Newark.
4. The exemption shall take effect for a period of thirty (30) years, but shall not extend beyond the date in which the HMFA loan on the project is paid in full, and the Entity shall be subject to the provisions and conditions of the HMFA Law and the Financial Agreement annexed hereto.
5. The project is approved subject to any approvals that may be required by the Department of Community Affairs of the State of New Jersey and the HMFA.
6. The Mayor of the City of Newark is hereby authorized to execute, on the City's behalf, the Financial Agreement in the form attached hereto.
7. An executed copy of the Financial Agreement authorized by this Resolution shall be filed and maintained with the City Clerk.
8. The project, when completed, will conform with all State laws and ordinances of the City of Newark relating to its construction and use.
9. The Affirmative Action Program now on file in the Office of the City Clerk is declared to be a material condition of the Financial Agreement authorized by this Resolution.
10. 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.
11. 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. The Office of Affirmative Action shall forthwith investigate the matters contained therein and report its findings to the Municipal Council.
12. As of the Annual Service Charge Start Date (as defined in the Financial Agreement), the Entity shall pay an estimated quarterly service charge of $1,750.00 to the City until the correct amount due from the Entity is determined by the City's Director of Finance based upon the auditor's report that is required to be submitted under the Financial Agreement. After the auditor's report required under the Financial Agreement has been accepted by the City's Director of Finance, and within 90 days thereafter, the City and the Entity will adjust any over or under payment so made or needed to be made for the particular period covered by the auditor's report.
13. The annual service charge shall be calculated based on 6.28% of the annual gross project revenues and 15% of all other income derived from the project, including but not limited to commercial units, parking, laundry room, vending machines, and the like.
14. The following occurrences and requirements are express conditions of the granting of this tax exemption, to be performed by the Entity, and the failure to comply with any of these requirements will result in the cancellation of the tax exemption:
a) The Entity shall pay full taxes on the land and improvements of the project until the annual service charge becomes effective;
b) The Entity shall not, without prior consent of the Municipal Council, sell, lease, assign, encumber, subordinate, convey, mortgage or transfer all, or any part of the project, so as to sever, disconnect or divide the improvements from the land embraced within the project;
c) The Entity, pursuant to the Revised General Ordinance 10:24-1 et seq., as amended, shall be deemed to agree that if the Entity operates, controls or manages the project that it will in good faith assist the City of Newark in its goal of having 50% of all new jobs arising out of the businesses conducted on the project site after the issuance of the certificate of occupancy and during the construction of the tax exemption, dedicated to Newark residents, of which 25% of such all new employees shall be minority residents;
d) The Entity shall concomitantly with the submission of the annual report required of it by paragraph 12 above, attach an employment report under oath, with particulars, stating the manner and the extent to which it has complied with Section 14(c) above. This employment report shall, like the annual report, be filed with both the Director of Finance and the City Clerk of the City of Newark;
e) The Entity shall pay all outstanding taxes and all outstanding water and sewer charges within thirty (30) days of the adoption of this Resolution;
f) The Entity shall submit any and all non-residential lease agreements and/or subleases entered into with related or third parties for the use and occupancy of space made available by the Entity to the Law Department and the Division of Tax Abatements & Special Taxes. The obligation to submit lease agreements shall be a continuing obligation during the period of the Financial Agreement. All lease agreements shall be subject to review by the City for the purpose of determining the validity thereof and to ensure that lease agreements are executed as part of an arms length transaction;
g) The Entity shall secure all financing prior to the commencement of any construction.
h) The tax abatement shall not take effect until the Entity obtains NJHMFA financing and fee simple ownership to the Property and submits a filed copy of the deed to the Office of Assessment and Law Department within five (5) days of conveyance.
15. The Entity shall submit to the City of Newark's Department of Economic Development or its assigned agent all documentation which is required to submit and maintain in accordance with the terms and conditions of the financing provided by the New Jersey Housing and Mortgage Finance Agency and the New Jersey Department of Community Affairs (DCA) and all other sources of funding received.
16. The Entity shall submit to the City of Newark's Law Department copies of the mortgage and all other loan documents executed between the Entity and New Jersey Housing and Mortgage Finance Agency within 30 days of the closing.
17. The City Clerk's Office of the City of Newark shall forthwith submit a certified copy of the Resolution approving the tax exemption and the proposed Financial Agreement to the Director of the Division of Local Government Services.
STATEMENT
This Resolution grants a Long Term Tax Exemption to Saint Clare Homes Property, Inc. pursuant to the New Jersey Housing and Mortgage Finance Agency Law of 1983 (N.J.S.A. 55:14K-1 et seq.) for a term of thirty (30) years for the acquisition of an affordable residential project known as Roseville Manor Phase II and located on the following properties in the North Ward:
Block 638, Lot 1.18 652 Third Street, Newark, New Jersey
Block 638, Lot 1.17 654 - 656 Third Street, Newark, New Jersey
Block 638, Lot 1.16 658 Third Street, Newark, New Jersey
Block 638, Lot 1.24 641 Fourth Street, Newark, New Jersey
Block 638, Lot 1.25 643-645 Fourth Street, Newark, New Jersey