HomeMy Public PortalAboutR 98:217No. 98-217 Date of Adoption July 20, 1998
RESOII1TION APPROVLNG DEVELO~ AG~FFI,~fr ~ RAIA
WllEREAS, the Borough of Carteret (the "Borough") has entered into a
Regional Contribution Agreement ("RCA") with the Township of Readington
(the "Township") pursuant to which the Borough agrees to construct low and
moderate income housing; and
WItEREAS, Frank Raia has proposed a 28 unit project known as the Cardinal
Commons Project which will satisfy a portion of the Borough's obligation
under the RCA with the Township; and
~, the Borough and the New Jersey Council on Affordable Housing
("COAH") have approved the Cardinal China Project (the "Project"); and
WI~, the Borough and Raja wish to enter into a development agreement
(the "Development Agreement") in connection with the Project;
NOW, ~, BE IT RESOLV[D by the Mayor and Council of the Borough of
Carteret that the attached Development Agreement is hereby approved.
BE IT FUR~ RESOLV~ that the Mayor and Borough Clerk be and are hereby
authorized to execute the Development Agreement on behalf of the Borough.
BF. IT FURTHI~ RESOLVED that the Development Agreement shall be advertised
as prescribed by law.
Adopted this 20th day of Ju$y, 1998
and certified as a true copy of the
original on July 21, 1998.
KATHLEEN M. BARNEY,
MUNICIPAL CLERK
RECORD OF COUNCIL VOTE
COUNCILMAN YES NO NV A.B. COUNCILMAN ~ YES NO NV A.B.
CRI~.I.KY X GUTOWSKI X
FAILACE X MANCUSO X
FAZEKAS X 0 ' BRIEN X
X - Indicate Vote AB Absent NV - Not Voting XOR - Indicates Vote to Overrule Veto $ ] ]
Adopted at a meeting of the Municipal Council July 20, 1998
DEVELOPMENT AGREEMENT
TI'd, Development Agreement ~, made tl"d,31 ¢'~day of '-~ t.'-I/ , 1998 by and
between FRANK RAJA ("Rata") with of'flees located at 450 7~' Street. Hoboken. New
Jersey 07030 (the "Developer") and the Borough ofCarteret, a Municipal Corporation with
offices located at 60 Cook Avenue, Carte'et, New Jeraey ("the Borough")
WITNESSETH
WHEREAS, the Borough has entered into a regional contribution agreement ("RCA")
with the Township of Readinglo~n (the "Township"). by which the Borough agreed to assume
certain potnion of the Townskip!s low and moderate iucome housing obligations (the "Ho~rsing
Obligations"), and
WHEREAS, Rata is th~ owner of the building krlown as the "Cardinal China Building"
locat,d at 253 Romanowski Str*et. within the Borough (the "Building"); and
WHEREAS. Rata has P%vlously renovated certain properties to provide low and
moderate income housing units; and
WHEREAS, the Borough wishes to satiafy a portion of its obligation under the RCA
with the Township by providin Raja with funding to r~novate the Building in order to create
low and moderate income housii~g.
Is/OW, l.n consideration Of the covenants conta~ne~t l~erein, the par~les agree as tollows:
I. IlE!~'ELOPER'$ OBLIGATIONI~
JUL-20-'ig.'.q8 13¢3=2g g"~0t"~ LEANZR ~ AGRAPI[~IS TO 1 ~%8..~.9r3 F'.134
.01 R,iavvate the Build/nc - The Developer agrees to renovate the building in order to
create twenty-eight (28) new, low and moderate income housing, in accordance
with such plans ~s shall be approved by the Borough or its designee (the
"Project"). SucI~ affordable housing units will be built with th, following
dimensior~ ~md ~aro' the following re~tal cost lo the urut tenant,:
No. of Unrra No. of Brs. Sq. Pt. Annual Rent
2 0,5 520 $5,064/$422
15 1 527 $5,06415422
6 1 555 $5,064/$422
3 I 560 $5,064/$422
2 1 490 $5,064/$422
The monthly ten! shall include only water ~nd s~,ver charges. Thc Tenant shall be
mspon.sible for ~e payment of all electric charges aasoeiated w/th the electric
heat, electric hot lwater heater, and any other elec~city utilized during the cou..~e
of their t~ancy.
The Developer agree8 to provide the Borough with proposed plans for
renovation withii~ 60 ~lay* of the oxccution of thc Dcvolopm~nt
Agreement.
.02 Core, lib'ace wj~ COAH Rc~'utations - The Developer r~ognizes that in order to
accomplish the it/tended purpose the Borough must obtain the approval of the
State of New Jer*ey Council on Afi`ordable Housing. The Developer a~rees to
submit all requir&d or requested documontation to COAH in connection with the
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Project. The Developer agrees that my and all documents to be submitted to
COAH shall first be approved in va-lting by the Borough, md that any obligation
on thc part of the Borough to make payments is expressly contingent upon
approval of the l~roj~ct by COAH.
1.03 D~velopment of?roiect - The Developer a~ees to commence the Project within
60 days of approval by COAH and to diligeaffiy prosecute the Project to
completion. In the event the D~vetoper shall fail to begin the Project within 60
days of COAH approval the Borough shall have the right to terminate this
Development A~reen~ent by giving written notice to the Developer, Further, the
Developer agree~ to complete the Project within 12 months of commencemem. If
the Developer shall fail to complete the Project within 12 months of the
commencement ihen the Borough shall have the right to terminate this
Development Agreement by giving x,,'titten notice to the Developer, ullles$ such
failure has been On account of circumstances beyond the control of the Developer,
slleh as a delay in obtahling Township monies, or a force majeure eve, alt.
.04 ~ -!The Developer agrees to obtain at its sole color and expense, any
and all permits ~quired to complete the Project.
.05 llliP, l.~gJ~I9.~ - D~veloper agrees to allow the Borough to insp~t the
Project from time to tinle m is reasonably requested by tho Boro~agh. Developer
further agrees to!allow the Borough to inspect any and all books and r~cords
regarding the PrSjeet, for the put, pose of verifying cost in order to assure
conformity w~th any application made to COAH.
1.06 Continenev - This Development Agreement is subj~el to the review mid approval
of the Department of Community Affairs. Division of Housing and Community
Resources ("DCA"), and is expressly conting~n~ upon the Project gaining the
approvals required by any and all Federal, State or County agency, necessary for
the Borough to satisfy it~ obligation with the RCA with the Town~hlp. The
Dcvelopor agrees to cooperate and make ~uah applications a~ a~e necessary to
obtain such approvals.
1.07 Com~lianc~.wit~ Law - The Developer agr~s to comply a4th all laws, rules,
ordirmn¢~s and s~atutes in the performance and development of this Project.
1.08 ~; The Developer agrees to indemrdfy, defend and hold the
Borough harmless fi'om and against any and all logs, cost, claims, dm'nsec and
expense (including. but not limited to, ressotmble attorney fees) arising out of or
in any way resulting bom any claim or suit by any party (including, but not
limited to, claims by ¢'mploy~es of the D,veloper) m connection with tho Project
of the performance of this Development Aero. mem.
D~v¢loper agr~ to maintain at all times during the Project g~n~al liability
insurance with an insurance carrier authorized to do business in the Stat~ of N~w
J'ersey in the amount of not less than $ [,000,000 Dollars, and to name the
Borough as an a~lditional insured. The Developer also agrees to maintain work,rs
eompe, nsation in.~ urane¢ while perforating the Project,
,09 Compliance with Orant Am~rnent - The Dowlop~r agrees to comply with
the terms and ~onditions of the Grant Agreement bcnYeen thc DCA and
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the Borough pursuant lo which the $638,000 o£Balanced Housing Funds
has been provid~l to the Borough.
1.10 AH.MS - Affordable ~o~.t~i.n~ A~,ree~qg[~. The De,,'elop~r agrees to enter
into an Affordable Housing Agn'eement, Declaration of Covenants,
Conditio~ and Restnctlolt$ w~th the Affordable Housing Marmgcment
Service ("AFLMS") section of the New Jersey Department of Community
Affairs in order ~o monitor mffordability controls pursuant to N,J.A.C.
5:14, Chapter 4 and eertif3' eligible households for occupation of a
Cardinal Commons unit.
1.11 Provision for Coi~t Certifics__ti0n - Upon project completion and prior to
Developer's final drawdown of loan proceeds as authorized in the agreed
upon drawdown schedule, the Developer agrees to provide a Certification
of his costs incurr~ in connection with the Cardin~l ~ommons project to
the DCA, I! is agreed that such cost certification shall be prepared by
Certified l%bliz A~co~tant on an sc~ruai basis and shall compare
projected cost per Atta~hm~llt B of the Grallt Agreement wiffi actual
1.12 Reea?ture of Excess Cost Allo~0ola - The D~eloper agrees that if
b~dgeted cOStS exceexl a~tual, D~A may, at its sole ¢liscretion, either
request rennin o~the loan .~urplus or reallocat¢ such loan monies to other
underbudgeted cost categories.
2. t~OROUGH'$ OBLIGATIONS
2.01 The Borough agrees to be respon,,ible for the administration of the Grant
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~UL-~O- i998 08:~8 FROM
Agreement with the DCA and for monitoring th~ Development
Agr~'¢mcnt.
2.02 The Borough recognizes arld agrees that thc DCA will trana£er $14,000. from the
Balanced l-{ousi~g Funds total of $638,000 directly to the Affordable Housing
Management Services to pay for their monitoring of affordability controls and
certifying eligible households pursuant to the AH. MS Affordable HOusing
Agreemt, nt with the Developer. Conseque~ntly, the Borough understands that it
will receive no more than $624,000 for purposes o£reimburs~ment and payment
of Developer.
2.03 The Borough recognizes that this property is or will be the subject of a payment in
lien of taxx agreement with Developer and that this project will be fiirth,,r funded
by $500,000 of P, egional Coritribution Agreement funds between the Borough and
the Township of Readington and $~;1 i!,000 of County Home Funds..
3. P__A,~t~MENT OF P.-EADINGTON RCA AND ]~ALANCED HO~I~G
3.0; ~!!tL.q.~$jL~M s - The Boroul~ shall a'ansfer $$00,000 of Rcading~on
RCA Funds to Raia for the Project, in the form ora loan.
.02 Timing of Payments - It is anticipated that the Borough will receive at least four
payments of $25~1,000 each f~om thc Township of Readington to fund this Project
and other Projects. The ftrst such payraerlt is due on or about April 1, 1998. Raia
shall receive at least $12$,000, and up to $250,000 fl'or~ each payment, if no other
Projects are eligible to receive payment, tmtil $300,000 of Readington RCA funds
has been I'l'ansferred to a~zd received by him. In the event that this Project h~
progressed such that its prosecution and completion outpaces thc payments from
the Township of Readingtor~, the Borough agrees to take such measures as are
reasonably necessary to assist R~ia in secl~-~g low interest loans from the County
of Middlesex, with Rata paying the interest thereon,
3.03 Amount of Balaaeed Housing Funds - The Borough shall transfer up to
$638,000 of Balanced Housing Funds to Rs. ia for the Project, ~ tho form
ora loan. The B~rough and Developer agree that the Borough will
transfer the first $1,1,000 ($500.00 per xait) fi`om the Balan¢~l Housing
Funds total of up to $638,000. directly to Affordable I-lousing
Management Seme~ to administer afrordability controls and certify
eligible households.
3.0l 2~ · The Borough of Carterot has c~ternporaneously entered
into a Grant Agreement with the DCA which will provide the Borough with the
$638,000,00 of grant funds pursuant to its "Neighborhood Preservation Balanced
Housing Program". It is anticipated that the Borough will transfer monies to
Developer on a r~quisition basis pursuant to a drawdown schedule promulgated
by the DCA based upon extent of project completion and which is agreeable to
Developer and the Borough.
4, LOAN TERMS - REAIHNGTOI~J_RCA AND BALANCED HOUSING
FUNDS
a,01 READINGTONRCA FUNDS
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~ T~e t~s of~e $500,000 loan to Raia ahall be as £oIlow~:
a) Raja shall make annua~ payments of$I0,O00 p~yabl~ on or before 1anu~
~1 of each y~ co~ene~g ~anua~ 31, 2~ The bal~ee of~e
~hall be due ~d payable on or before ~anu~ 31, 2030, ~ ~e fo~ ora
ballon pa~en~.
b) no intact;
c) ~ecu~ by a non r~ourse mortgage on th~ prope~;
d) ~a s~l ~ute a no~eco~ not~ satisf~to~ to C~er~ ~dencing
the h~ein desc~bed 1o~',
e) the lo~ by C~er~ shall not be assi~able by ~a wi~out the ~en
cons~t of C~e~t;
~ the obligations ~d~ the lo~ by ~a shill be bading u~n Raa's
succes~r ~d aai~s, no~ithst~din8 the foggo~g, ~ t~e event R~a
shsll ~;sfer title to ~y of~e prepay for which a po~on of the 1o~ has
been m~e. or in the event ora c~ge in Raia's co.rate s~c~e or
sta~$, o~ ~ death, ~e note ~d mortgage shall become i~ediately
due ~d pay~le.
_ ~.02 B~C~D.~OUS~G
~e te~a of the $638,0~. [o~ to Raja ~I be as follows',
a) ~ia ,hall m~e ~n~l pa~ent~ of $10,000 payable on or before
Au~st I of each ye~ co~cing at the ~d of the second ye~
follawing ~e Bomugb's issuance ofC~ificates of Occup~cy for
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the Project. The balance of loan shall be due and payable on or
before thirty (30) 7ears from the first day ofthe month following
the issuance of the final Certificate of Occupancy for the project by
the Borough ail as set forth in the Mortgage Note e×ecuted by
Raja;
b) interest will be payable ~ 2% per annum;
c) secured by a non recourse mortgage on the proper~y subject to the
review and approval of the DCA;
d) Raia shall execute a no~reeoun~e note subject to thc review and
approval of the DCA;
e) the loan by DCA ,hall not be assignable by Rata without the written
consent of the DCA;
the obligations reader the loan by Raia shall be binding upon Raia's
successor and a~signs, notwithstanding the foregoing. In the
event Raia shall transfer title to any of the property for wl~ich a
portion of the loan has been made. or in the event of* change in
Raia's corporat~ structm-e or st,ms, other than death~ the note and
_ mor~gag~ ~h~,ll become immediately due and payable.
5.01 ~ - This Agteem~t shall be binding on the pattie,, their successors and
assigns.
$.02 ]Notices - All notice, demands and reque,t~, required or permitted to be given or
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made under any provision &this Agreement, shall be in writing and shall be
g~ven or made by facsimile and overnight courier (Federal Express) or registered
or certified mail, return reeeip! requested, postage paid, addressed as follows:
If to Raia: 450 Seventh Street
Hoboken, NJ 07030
With a copy to: Frank Leanza, 15q,
Leanza & Agrapidis,
255 Route 17 South
Haekensaek, NJ 07601
If to the Borough: Borough of Carteret
Att: Kathleen Barney, Municipal Clerk
61 Cooke Avenue
Carteret, NJ 07008
With a copy to: Craig Y. Cough.lin, Borough Attorney
555 Route One South
4~h Floor
Iselin, New Jersey 08830
Any such notice, demand or request shall be deemed given or made on the next
business day after delivery to the overnight courier and, if mailed, on the third
(3rd) busings day after the date so mailed. N'otwithatandin8 the foregoing, in the
ease of the emergency referred to harem, the notice to be given, if practical, by
tel*phone or £~simile, sent to Raia or the Borough at its respective address or
addresses as aforesaid, and such notice shall be deemed given on the day on
which telephone call is made or the day on which the telegram or cable gram is
sent, ~ applicable.
503 ~ - No statements, representatives, prior agreements or
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- , .TUL-2~~i998 08:~1 ~ROH LFANZA & AGRAPI~)IS TO i??~_.~8.._~,~9~' P. i3
understanding not herein set forth shall have any force or effect unles~ an
appropriate amendment is executed by all par~ies hereto. This Agreement shall
become effective only upon execution hero&by both parties hereto and delivery
of a fully executed resolution hereof
IN WITNESS W/4'I~REOF, the parties have caused this Agreement to bc executed by
duly autl~uu~l
~-- ATTEST: BOROUG[I OF CARTERET
, mR '"
~l ~ LEANZA//ESQ. I~RA~K RAIA
I1