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THIS ORDINANCE SECURES BONDS OR OTHER OBLIGATIONS ISSUED IN ACCORDANCE WITH THE PROVISIONS OF THE “REDEVELOPMENT AREA BOND FINANCING LAW” AND THE LIEN HEREOF IN FAVOR OF THE OWNERS OF SUCH BONDS OR OTHER OBLIGATIONS IS A MUNICIPAL LIEN SUPERIOR TO ALL OTHER NON-MUNICIPAL LIENS HEREINAFTER RECORDED.
AN ORDINANCE GRANTING A THIRTY YEAR (30) YEAR TAX ABATEMENT TO 777 MCCARTER URBAN RENEWAL, LLC, C/O BORAIE DEVELOPMENT, LLC, 120 ALBANY STREET, NEW BRUNSWICK, NEW JERSEY 08901, FOR A PROJECT TO CONSTRUCT A NEW THIRTY-TWO (32) STORY BUILDING CONSISTING OF APPROXIMATELY TWO HUNDRED NINETY-SIX (296) MARKET RATE RESIDENTIAL UNITS, SEVENTY-FOUR (74) AFFORDABLE HOUSING RENTAL UNITS, 13,026 SQUARE FEET OF COMMERCIAL SPACE AND TWO HUNDRED TWENTY-FIVE (225) STRUCTURED PARKING SPACES LOCATED AT 769-781 MCCARTER HIGHWAY, NEWARK, NEW JERSEY AND IDENTIFIED ON THE CITY’S TAX MAP AS BLOCK 161, LOT 1.02 AND AUTHORIZING THE EXECUTION AND DELIVERY OF A FINANCIAL AGREEMENT AND OTHER APPLICABLE DOCUMENTS RELATED TO THE ISSUANCE OF REDEVELOPMENT AREA BONDS (NON-RECOURSE TO THE FULL FAITH AND CREDIT OF THE CITY), AUTHORIZING THE ISSUANCE OF THE REDEVELOPMENT AREA BONDS IN A PRINCIPAL AMOUNT NOT TO EXCEED $18,000,000.00 AND DETERMINING VARIOUS OTHER MATTERS IN CONNECTION THEREWITH. (EAST WARD)
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WHEREAS, 777 McCarter Urban Renewal, LLC, c/o Boraie Development, LLC, 120 Albany Street, New Brunswick, New Jersey 08901, filed an application with the Mayor seeking a long term tax abatement under the Long Term Tax Exemption Law, N.J.S.A. 40A:20-1 et seq. (the “Tax Exemption Law”) for a thirty (30) year term for a project to construct a new thirty-two (32) story building consisting of approximately two hundred ninety-six (296) market rate residential units, seventy-four (74) affordable housing rental units, 13,026 square feet of commercial space and two hundred twenty-five (225) structured parking spaces located at 769-781 McCarter Highway, Newark, New Jersey 07102 and identified on the City’s Tax Map as Block 161, Lot 1.02 (the “Project”); and
WHEREAS, pursuant to and in accordance with the provisions of the Redevelopment Area Bond Financing Law, constituting Chapter 310 of the Pamphlet Laws of 2001 of the State, and the acts amendatory thereof and supplemental thereto (the “Redevelopment Bond Law”, as codified in N.J.S.A. 40A:12A-64 et seq.), specifically N.J.S.A. 40A:12A-66(a), the City is authorized to provide for such tax exemption and payments in lieu of taxes in a manner that deviates from the structure otherwise established under the Tax Exemption Law, if the project is located in an area in need of redevelopment pursuant to the Local Redevelopment and Housing Law, constituting Chapter 79 of the Pamphlet Laws of 1992 of the State and the acts amendatory thereof and supplemental thereto (the “Redevelopment Law”, as codified by N.J.S.A. 40A:12A-1 et seq., and together with the Tax Exemption Law and the Redevelopment Bond Law, the “Acts”) and is to be financed with bonds issued in accordance with the Redevelopment Bond Law; and
WHEREAS, pursuant to and in accordance with the provisions of the Redevelopment Bond Law, specifically N.J.S.A. 40A:12A-67(a), the City may issue bonds secured by all or a portion of any annual service charge; and
WHEREAS, the City desires to authorize the issuance of the bonds (the “Bonds”) pursuant to the Redevelopment Bond Law and the Redevelopment Law, and debt service for the repayment of the Bonds shall come from all or a portion of the Annual Service Charge (as that term is defined in the Financial Agreement attached hereto); and
WHEREAS, in order to set forth the terms and conditions under which the Entity and the City (the “Parties”) shall carry out their respective obligations with respect to: (a) payment of the Annual Service Charge (as that term is defined in the Financial Agreement attached hereto), in lieu of real property taxes; and (b) issuance of the Bonds by the City, the Parties have determined to execute the Financial Agreement; and
WHEREAS, pursuant to the Redevelopment Bond Law, the City may enter into contracts as necessary, for the purpose of securing the Bonds; and
WHEREAS, the Redevelopment Bond Law requires the approval of the New Jersey Local Finance Board prior to the issuance of financial instruments such as the Redevelopment Area Bonds where such financial instruments are to be secured by payments in lieu of taxes such as the Annual Service Charges; and
WHEREAS, the City believes that: (a) it is in the public interest for the Entity to undertake the Project; (b) the Project is for the health, welfare, convenience or betterment of the inhabitants of the City; and (c) the Project and the exemption granted herein will not create an undue financial burden upon the City.
NOW, THEREFORE, BE IT ORDAINED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY THAT:
1. The Exemption Application is hereby approved in accordance with the recommendation of the Mayor.
2. The Municipal Council hereby finds and determines that the Financial Agreement is to the direct benefit of the health, welfare and financial well-being of the City and its citizens because the Project will create approximately two hundred ninety-six (296) market rate residential units, seventy-four (74) affordable housing rental units, 13,026 square feet of commercial space and two hundred twenty-five (225) structured parking spaces and further: (a) the costs associated with the tax exemption granted herein are minor compared to the estimated Total Project Cost of approximately $160,000,000.00 and the benefits created by the additional construction and permanent jobs created; and (b) without the tax exemption granted herein it is highly unlikely that the Project would otherwise be undertaken.
3. The exemption from taxation on the Improvements is hereby granted to the Entity for a period equal to the earlier of: (i) thirty-five (35) years from the date of execution thereof; or (ii) thirty (30) years from Substantial Completion.
4. The Financial Agreement, the form of which is attached hereto, is approved and the Mayor and the Director of the Department of Economic and Housing Development (each, an “Authorized Officer”) are each hereby authorized to execute, on the City’s behalf, the Financial Agreement in substantially such form, with such changes to the Financial Agreement as an Authorized Officer deems necessary and proper to effectuate the terms and conditions of the Financial Agreement. The City Clerk is hereby authorized and directed to attest to the execution of the Financial Agreement by the Authorized Officers of the City as determined hereunder and to affix the corporate seal of the City of the Financial Agreement.
5. Pursuant to the provisions of the Redevelopment Bond Law, specifically N.J.S.A. 40A:12A-67(c) and, if applicable, N.J.S.A. 40A:12A-69, the City is hereby authorized to assign any or all of the City's right, title and interest in and to the Annual Service Charges as security for the Bonds. The Authorized Officers, or either of them, are each hereby authorized to execute and deliver, on behalf of the City, an assignment of the Annual Service Charges in such form as they may deem to be necessary or appropriate for the purpose of effectuating such assignment. The City Clerk is hereby authorized and directed to attest to the execution of such assignment(s) by the Authorized Officer(s) of the City as determined hereunder and to affix the corporate seal of the City to such assignment(s).
6. An executed copy of the Financial Agreement authorized by this ordinance shall be filed and maintained with the City Clerk.
7. Upon the execution of the Financial Agreement as contemplated herein, the Authorized Officers and the City Clerk are each hereby severally authorized and directed to file and record this ordinance and the Financial Agreement with the Essex County Clerk. Pursuant to and in accordance with the provisions of the Redevelopment Bond Law, specifically N.J.S.A. 40A:12A-68(c), and notwithstanding any other law to the contrary, upon recordation of both this ordinance and the Financial Agreement, the lien thereof shall be perfected for all purposes in accordance with law and the lien shall thereafter be superior to all non-municipal liens thereafter recorded to otherwise arising, without any additional notice, recording, filing, continuation filing or action, until payment of all of the Bonds.
8. The Authorized Officers of the City are hereby further severally authorized and directed to: (i) execute and deliver, and the City Clerk is hereby further authorized and directed to attest to such execution and to affix the corporate seal of the City to, any certificate, agreement or other document that is determined to be necessary or desirable in connection with the execution and delivery of the Financial Agreement and the consummation of the transactions contemplated thereby, which determination shall be conclusively evidenced by the execution of each such certificate or other document by the party authorized hereunder to execute such certificate or other document; and (ii) perform such other actions as are necessary or desirable in relation to the execution and delivery thereof.
9. The Project when completed shall conform with all Federal and State law and ordinances and regulations of the City relating to its construction and use.
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, from the time the Annual Service Charge becomes effective, pay the Annual Service Charge as set forth in the Financial Agreement in an amount equal to 11% of the Annual Gross Revenues.
12. There is hereby authorized the issuance by the City of not more than $18,000,000.00, aggregate principal amount of its Bonds under the Redevelopment Bond Law and the Redevelopment Law and other applicable provisions of law, for the purpose of financing the cost of redevelopment projects, and in connection therewith, to finance or refinance any other cost or expense of the City, as shall hereafter be specified by resolution of the Municipal Council. The Bonds may be issued in one or more series and from time to time, and shall be designated as shall be determined by subsequent resolution of the Municipal Council, and shall contain such other terms and conditions as shall be provided by subsequent resolution of Municipal Council. The Bonds shall constitute non-recourse obligations as to the City and shall not be secured by the full faith and credit of the City, but shall be payable solely from a pledge and assignment of all or a portion of the Annual Service Charges, as shall be determined by subsequent resolution of the Municipal Council and as shall be set forth in one or more trust indentures to be entered into by the City setting forth the terms of the Bonds. Said trust indenture(s) (collectively, the “Indenture”) shall be authorized by subsequent resolution of the Municipal Council, and in addition to providing for the terms of the Bonds, may also provide for the issuance, from time to time, of one or more additional series of bonds on a parity with the Bonds. Pursuant to N.J.S.A. 40A:12A-67(d), the Bonds shall be issued as non-recourse obligations, and shall not be considered to be direct and general obligations of the City, and the City shall not be obligated to levy and collect a tax sufficient in an amount to pay the principal and interest on the Bonds when the same become due and payable, and the Bonds shall not be considered gross debt of the City on any debt statement filed in accordance with the Local Bond Law, and accordingly no supplemental debt statement need be filed in connection herewith. The Bonds shall bear interest at such rate or rates, shall be sold at public sale, or if approved by the Local Finance Board, at private sale, to such purchaser or purchasers at such price or prices, shall contain such maturity and redemption terms, and shall contain such other terms and conditions as may be determined by subsequent resolution of the Municipal Council and as shall be set forth in the Indenture.
13. All City officers and professionals are hereby authorized to take all necessary and appropriate steps to assist the Entity in connection with its application to the New Jersey Local Finance Board for approval to issue the Bonds for the funding of a part of the costs of the Project.
14. To the extent of any inconsistency with any prior City ordinance and/or Municipal Code provision governing the granting of long-term tax exemptions, including, inter alia, procedures for application, review and approval, required terms of the Financial Agreement, required conditions and covenants, limits on duration, means of enforcement, requirements for contribution to the City’s Affordable Housing Trust Fund, and all other matters whatsoever, such prior City ordinances and/or Municipal Code provisions are hereby waived, but only with respect to this ordinance.
15. Within ten (10) calendar days following the later of the effective date of this Ordinance or the execution of the Financial Agreement by the Entity, the City Clerk’s Office shall transmit a certified copy of the Ordinance and Financial Agreement to the Chief Financial Officer of the County and to the County Counsel for informational purposes.
16. This ordinance shall take effect twenty (20) days after the first publication thereof after final adoption, as provided by the Local Bond Law.
STATEMENT
Ordinance granting a long term tax abatement to 777 McCarter Urban Renewal, LLC, c/o Boraie Development, LLC, 120 Albany Street, New Brunswick, New Jersey 08901, which filed an application with the Mayor seeking a long term tax abatement, under the Long Term Tax Exemption Law, N.J.S.A. 40A:20-1 et seq., for a thirty (30) year term. The Project consists of the following: construction of a new thirty-two (32) story building consisting of approximately two hundred ninety-six (296) market rate residential units, seventy-four (74) affordable housing rental units, 13,026 square feet of commercial space and two hundred twenty-five (225) structured parking spaces located at 769-781 McCarter Highway, Newark, New Jersey 07102 and identified on the City’s Tax Map as Block 161, Lot 1.02, and authorizes the execution and delivery of a Financial Agreement and other applicable documents related to the issuance of Redevelopment Area Bonds (non-recourse to the full faith and credit of the City) and authorizes the issuance of the Redevelopment Area Bonds in a principal amount not to exceed $18,000,000.00.