HomeMy Public PortalAboutOrd. 06-08
OOrúimntt£
No. 06-08 af tfre
~arau£fr af (!turterd, ;N. Jj.
Councilman Presents the following Ordinance Seconded by Councilman
-
"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 HEREAFTER RECORDED"
AN ORDINANCE OF THE BOROUGH OF CARTERET
AUTHORIZING THE EXECUTION AND DELIVERY OF
A FINANCIAL AGREEMENT BY AND BETWEEN THE
BOROUGH OF CARTERET AND TlTAN-PDC
CARTERET URBAN RENEWAL, LLC IN
CONNECTION WITH THE PHASE I
REDEVELOPMENT PROJECT
WHEREAS, on August 1, 1995, pursuant to and in accordance with the
provisions of the Landfill Reclamation Improvement District Law, constituting
Chapter 173 of the Pamphlet Laws of 1995 of the State of New Jersey (the
"State"), and the acts amendatory thereof and supplemental thereto (the
"Landfill Law", as codified in NJ.S.A. 40A:12A-50 ~ ~.), the Borough of
Carteret, a municipal corporation of the State of New Jersey (the "Borough"),
finally adopted Ordinance 95-40 which established a landfill reclamation
improvement district consisting of certain real property in the Borough as
identified in such ordinance (the "Initial District"); and
WHEREAS, pursuant to the Landfill Law, the Borough was deemed to have
- adopted a redevelopment plan at the time the Initial District was established;
and
WHEREAS, on November 2, 1995, the Borough Council adopted Resolution
95-346 relating to a redevelopment plan for the Initial District; and
WHEREAS, on June 6, 1996, pursuant to the 1995 Landfill Law, the Borough
finally adopted Ordinance 96-14 which expanded the boundaries of the Initial
District to include those properties identified in such ordinance (as expanded,
the "District"); and
WHEREAS, on March 7, 1997, Borough and the Bellemead Development
Corp. ("Bellemead") entered into a redevelopment agreement relating to the
District (the "Bellemead Agreement"); and
WHEREAS, on March 7, 2002, by Ordinance 02-05, the Borough finally
adopted an Amended and Restated Redevelopment Plan to govern the
development of the District ("Amended and Restated Redevelopment Plan");
and
WHEREAS, on February 5, 2004, the Borough adopted Resolution #04-53
authorizing the Borough to enter into a redevelopment agreement with regards
to, inter alia, the redevelopment of the Phase I Project Site (as such tenn is
defined in the hereinafter defined Redevelopment Agreement); and
WHEREAS, on February 6, 2004, Bellemead and Borough executed that
certain "Mutual Release", which among other things, tenninated the Bellemead
Agreement and released each of the Borough and Bellemead from all claims
arising out of the Bellemcad Agreement (the "Bellemead Release"); and
-
NO. 06-0R PAGE 2
WHEREAS, on February 6, 2004, the Borough, acting in the capacity of a
redevelopment entity pursuant to and in accordance with the 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 in NJ.S.A. 40A:I2A-l !è1 ~.), and
_ TIT AN-PDC CARTERET, LLC, a Delaware limited liability company (thc
"Redeveloper"), entered into that certain redevelopment agreement (the
"Redevelopment Agreement") govemmg, among other things, the
redevelopment of the Phase I Project Site (the "Phase I Redevelopment
Project"); and
WHEREAS, on May 6, 2004, the Borough adopted Resolution #04-160
declaring the Phase I Project Site as an area in need of redevelopment, all in
accordance with the Redevelopment Law; and
WHEREAS, on October 7, 2004, the Borough finally adopted Ordinance #04-
24, further amending and restating the Amended and Restated Redevelopment
Plan, all in accordance with the Redevelopment Law; 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 NJ.S.A.
40A:12A-64 !è1 ~.), specifically NJ.S.A 40A:12A-66(a), the Borough is
authorized to provide for tax abatement within a redevelopment area and for
payments in lieu of taxes ("PILOTS") in accordance with certain applicable
provisions of the Long Tenn Tax Exemption Law, constituting Chapter 431 of
the Pamphlet Laws of 1991 of the State, and the acts amendatory thereof and
supplement thereto (the "Long Ten11 Tax Law", as codified in NJ.S.A.
40A:20-1 !è1 ~.); and
\VHEREAS, pursuant to and in accordance with the provisions of the
Redevelopment Bond Law, specifically NJ.S.A 40A:12A-67(a), the Borough
may issue, or cause to be issued, bonds for the purpose of financing all or a
- portion of the costs of a redevelopment project, which bonds may be secured
by PILOTS; and
WHEREAS, pursuant to and in accordance with the provisions of the
Redevelopment Bond Law, specifically NJ.S.A. 40A: 12A-67(f), and the Local
Bond Law, constituting Chapter 169 of the Pamphlet Laws of 1960 of the
State, and the acts amendatory thereof and supplement thereto (the "Local
Bond Law", as codified in N.J.S.A. 40A:2-1 .Ë! ~.), the Borough may provide
for a full faith and credit guaranty of any bonds issued, whether by the
Borough or any other authorized governmental entity, including without
limitation, a redevelopment agency established in accordance with the
Redevelopment Law, for the purposes of financing all or a portion of the costs
of a redevelopment project; and
WHEREAS, pursuant to the tem1S of the Redevelopment Agreement, the
Borough shaH issue, or shall cause to be issued, bonds for the purpose of
financing certain remediation costs of the Phase I Redevelopment Project,
including without limitation, the cost of investigation, remediation and related
creek relocation, wetlands mitigation and other activities for the removal,
treatment or containment of hazardous substances, the closure and post closure
of any landfill located on the Phase I Project Site, and the construction of the
necessary remedial systems, including the foundations of any buildings to be
constructed on the Phase I Project Site related thereto (the "Phase I
Remediation Project"), al1 of which shall constitute a Redevelopment Project,
as such tenn is defined in the Redevelopment Bond Law; andl
WHEREAS, pursuant to the tenns of the Redevelopment Agreement, and in
accordance with the Redevelopment Law, Redevelopment Bond Law and
·
NO. 06-08 PAGE 3
Long Term Tax Law, as applicable, the Redeveloper has created and
established Titan-PDC Carteret Urban Renewal, LLC, a Delaware limited
liability company, (the "Redeveloper Urban Renewal Entity"), as an urban
renewal entity pursuant to and in accordance with the Redevelopment
Agreement, Redevelopment Law, Redevelopment Bond Law, Long Term Tax
- Law and other applicable law; and
WHEREAS, the Redeveloper Urban Renewal Entity has submitted an
application to the Borough for the approval of an urban renewal project, as
such term is used in the Long Term Tax Law, all in accordance with NJ.S.A.
40A:20-8 (the "Exemption Application"), which Exemption Application was
accepted and approved pursuant to resolution of the Borough Council duly
adopted on February 2,2006; and
WHEREAS, the Borough and the Redeveloper Urban Renewal Entity shall
enter into an agreement (the "Financial Agreement", which is attached hereto
in substantially final form as Exhibit A) to provide for, among other things, a
tax exemption for the Phase I Redevelopment Project and the payment of
Annual Service Charges (as such tenu is defined in the Financial Agreement);
and
WHEREAS, pursuant to the tenus of the Financial Agreement, certain of such
Annual Service Charges shal1 be pledged to the payment of the principal of and
interest on any bonds issued, whether by the Borough or any other authorized
government entity, including without limitation a redevelopment agency
established in accordance with the Redevelopment Law, to finance the all or a
portion of the costs of the Phase I Remediation Project; and
WHEREAS, pursuant to the Redevelopment Bond Law, specifically N.J.S.A.
40A: 12A-68, Annual Service Charges to be made by the Redeveloper Urban
Renewal Entity pursuant to the tenus of the Financial Agreement shall, upon
the recordation of the Financial Agreement and this Ordinance, constitute a
municipal lien within the meaning, and for all purposes, of law; and
- WHEREAS, pursuant to the provisions of the New Jersey Environmental
Infrastructure Trust Financing Program (the "Program"), established pursuant
to the New Jersey Environmental Infrastructure Trust Act, constituting Chapter
334 of the Pamphlet Laws of 1985 of the State (the "Trust Act", as codified in
NJ.S.A. 58:11B-1 ~~.), funds may be available for the purpose of financing
certain water quality improvement projects eligible for inclusion in the
Program ("Program Eligible Projects"); and
WHEREAS, as a project that provides water quality improvements, all or a
portion of the Phase I Remediation Project may qualify under the Program and
the Trust Act as a Program Eligible Project, subject to a final detenuination
made by New Jersey Environmental Infrastructure Trust (the "Trust") and the
New Jersey Department of Environmental Protection (the "DEP"); and
WHEREAS, in order to take advantage of the Program, a local government
entity must act as the project sponsor (the "Project Sponsor") for the
Redeveloper Urban Renewal Entity in connection with the Redeveloper Urban
Renewal Entity's implementation of the Phase I Remediation Project; and
WHEREAS, on February 1, 2001, and in accordance with the Redevelopment
Law, specifically N.J.S.A 40A:12A-ll, the Borough finally adopted
Ordinance No. 01-1, which established the Carteret Redevelopment Agency
(the "Agency") as an instrumentality of the Borough; and
WHEREAS, on March 3, 2005, the Agency, acting as Project Sponsor for the
Redeveloper Urban Renewal Entity at the direction of the Borough, submitted
the "New Jersey Environmental Infrastructure Financing Program Application
for Financial Assistance" to the Trust and DEP, respectively; and
-
NO. 06-08 PAGE 4
WHEREAS the Agency desires to finance all or a portion of the costs of the
Phase r Remediation Project, on a non-recourse basis to the Agency and acting
solely as Project Sponsor on behalf of the Redeveloper Urban Renewal Entity,
from (i) the proceeds of a loan (the "Trust Loan") from the Trust to the
- Agency, the tenllS of which shall be established pursuant to a loan agreement
by and between the Trust and the Agency (the "Trust Loan Agreement"), such
Trust Loan to be secured by a bond issued by the Agency to the Trust (the
"Trust Loan Bond"), and (ii) the proceeds of a loan (the "Fund Loan") from the
State, acting by and through the DEP (the "Fund") to the Agency, the terms of
which shall be established pursuant to a loan agreement by and between the
State, acting by and through the DEP, and the Agency (the "Fund Loan
Agreement" and together with the Trust Loan Agreement, the "Program Loan
Agreements"), such Fund Loan to be secured by a bond issued by the Agency
to the Fund (the "Fund Loan Bond" and together with the Trust Loan Bond, the
"Agency Conduit Loan Bonds"); and
WHEREAS, the Agency will in turn (i) lend the proceeds from the Trust Loan
Bond to the Redeveloper Urban Renewal Entity (the "Redeveloper Trust
Loan"), the temlS of which shall be established pursuant to a loan agreement
by and between the Agency and the Redeveloper Urban Renewal Entity (the
"Redeveloper Trust Loan Agreement"), such Redeveloper Trust Loan to be
secured by a promissory note issued by the Redeveloper Urban Renewal Entity
to the Agency (the "Redeveloper Trust Note") and (ii) lend the proceeds of the
Fund Loan Bond to the Redeveloper Urban Renewal Entity (the "Redeveloper
Fund Loan"), the terms of which shall be established pursuant to a loan
agreement by and between the Agency and the Redeveloper Urban Renewal
Entity (the "Redeveloper Fund Loan Agreement"), such Redeveloper Fund
Loan to be secured by a promissory note issued by the Redeveloper Urban
Renewal Entity to the Agency (the "Redeveloper Fund Note"); and
WHEREAS, prior to, and in anticipation of, the issuance of the Agency
Conduit Loan Bonds, the Agency may issue short-term notes directly to the
Trust, which short-teml notes shall bear interest at zero percent (0%), as
- pennitted under the Program (the "Trust Interim Note', and together with the
Agency Conduit Loan Bonds, the "Project Sponsor Conduit Loan Bonds");
and
WHEREAS, the Agency will in turn lend the proceeds from the Trust Interim
Note to the Redeveloper Urban Renewal Entity (the "Redeveloper Trust
Interim Loan", and together with the Redeveloper Trust Loan and the
Redeveloper Fund Loan, the "Redeveloper Loan"), the terms of which shall be
established pursuant to a loan agreement by and between the Agency and the
Redeveloper Urban Renewal Entity (the "Redeveloper Interim Trust Loan
Agreement" and together with the Redeveloper Trust Loan Agreement and the
Redeveloper Fund Loan Agreement, the "Redeveloper Loan Agreements"),
such Redeveloper Interim Trust Loan to be secured by a promissory note
issued by the Redeveloper Urban Renewal Entity to the Agency (the
"Redeveloper Interim Trust Note" and together with the Redeveloper Trust
Note and the Redeveloper Fund Note, the "Redeveloper Notes"); and
WHEREAS, the Trust Interim Note is anticipated to be paid from the proceeds
ofthe Agency Conduit Loan Bonds; and
WHEREAS pursuant to the Redevelopment Bond Law, specificalJy N.J.S.A.
40A:12A-67(c), the Borough shall assign, for the benefit of the Agency and as
security for the Project Sponsor Conduit Loan Bonds, all of the Borough's
right, title and interest in and to the Pledged Annual Service Charges, as such
term is defined herein (the "Borough Assignment"); and
\VHEREAS, any amounts received by the Agency pursuant to the Borough
Assignment shall be credited against any amounts due and owing by the
-
NO. 06-08 PAGE 5
Redeveloper Urban Renewal Entity to the Agency pursuant to the Redeveloper
Loan Agreements; and
WHEREAS, pursuant to the tenns of the Redevelopment Agreement,
including without limitation, Sections 11.06(j) and 11.16, Panattoni
__~ Investments, LLC, a California limited liability company (the "Guarantor"),
who has· an equity ownership interest, whether direct or indirect in the
Redeveloper Urban Renewal Entity, shall enter into an agreement with the
Agency, to which the Borough shall be a third-party beneficiary, whereby the
Guarantor shall guaranty the full, prompt and unconditional payment when due
of any payments of the Redeveloper Urban Renewal Entity due and owing to
the Agency pursuant to the Redeveloper Loan Agreements (the "Panattoni
Agency Guaranty Agreement"); and
WHEREAS, as additional security for the Project Sponsor Conduit Loan
Bonds and as authorized pursuant to the Redevelopment Law, specifically
NJ.SA. 40A:12A-41, the Borough shall contribute, donate, grant or otherwise
pay to the Agency the Borough Incremental Land Taxes, as such term is
defined in the Financial Agreement, pursuant to the tenus of an agreement by
and between the Borough and the Agency (the "Contribution Agreement");
and
\VHEREAS, the Borough shall fully, unconditionally and irrevocably
guaranty, the punctual payment, when due, of the principal of, redemption
premium, if any, and interest on the Project Sponsor Conduit Loan Bonds in a
total original aggregate principal amount not to exceed $38,500,000 at anyone
time outstanding in accordance with (i) the terms of the guaranty ordinance to
be finally adopted by the Borough Council (the "Guaranty Ordinance") and (ii)
a guaranty certificate to be executed by an authorized officer of the Borough
on the face of each Project Sponsor Conduit Loan Bond (the "Guaranty
Certificate" and together with the Guaranty Ordinance, the "Borough
Guaranty"), all pursuant to the Redevelopment Law, Redevelopment Bond
Law and the Local Bond Law; and
- WHEREAS, in consideration for the Borough Guaranty, the Redeveloper
Urban Renewal Entity shall pay to the Borough a fee (the "Borough Guaranty
Fee") pursuant to the terms of an agreement by and between the Borough and
the Redevelopment Urban Renewal Entity (the "Borough Guaranty Fee
Agreement"); and
WHEREAS, the Project Sponsor Conduit Loan Bonds shall be special, limited
obligations of the Agency, payable sol~ly from and secured by the Agency's
interest in the Redeveloper Note, the Borough Assigrnnent, the Panattoni
Agency Guaranty Agreement, the Contribution Agreement and the Borough
Guaranty; and
WHEREAS, on June 22, 2005, as a condition precedent to the issuance of any
and all of the Project Sponsor Conduit Loan Bonds and in accordance with all
applicable law, including without limitation, N.J.S.A. 40A:5A-6, N.J.S.A.
58:11B-9(a) and N.J. SA 40A:12A-67(g), the Agency submitted an
application (the "Local Finance Board Application") to the Local Finance
Board in the Division of Local Government Services of the State's Department
of Community Affairs (the "Local Finance Board") for the Local Finance
Board's approval of the issuance of the Project Sponsor Conduit Loan Bonds
and related financial instruments; and
WHEREAS, the Local Finance Board, at a meeting held on August 10,2005,
did issue favorable findings with respect to the Project Sponsor Conduit Loan
Bonds and the Borough Guaranty; and
WHEREAS, pursuant to the temlS of the Redevelopment Agreement,
including without limitation Section 11.06(p) and 11.18, the Guarantor shall
NO. 06-08 PAGE 6
enter into an Agreement with the Borough whereby the Guarantor shall
guaranty, inter alia, the prompt and full payment of any "buffer" and Of
deductible required under any Remedation Performance and Payment Bond,
Cost Cap Insurance or any other insurance required to be obtained by the
Redeveloper pursuant to the terms of the Redevelopment Agreement (the
- "Panattoni Borough Guaranty Agreement"); and
WHEREAS, the Borough and the Redeveloper Urban Renewal Entity have
reached agreement with respect to, among other things, the tenns and
conditions relating to the Annual Service Charges and desire to execute the
Financial Agreement.
NOW, THEREFORE, BE IT ORDAINED AND ENACTED by the Borough
Council of the Borough of Carteret, County of Middlesex, New Jersey (not less
than two-thirds of all members thereof affirmatively concurring), as follows:
Section 1. The Financial Agreement is hereby authorized to be
executed and delivered on behalf of the Borough by either the Mayor or the
Chief Financial Officer in substantially the fonn attached hereto as Exhibit A,
with such changes as the Mayor or the Chief Financial Officer (each an
"Authorized Officer"), in their respective sole discretion, after consultation
with such counsel and any advisors to the Borough (collectively, the "Borough
Consultants") shall detennine, such detennination to be conclusively
evidenced by the execution of the Financial Agreement by an Authorized
Officer as detennined hereunder. The Borough Clerk is hereby authorized and
directed to attest to the execution of the Financial Agreement by an Authorized
Officer of the Borough as determined hereunder and to affix the corporate seal
of the Borough to the Financial Agreement.
Section 2. Upon the execution of the Financial Agreement as
contemplated herein, the Authorized Officers and the Borough Clerk are each
hereby severally authorized and directed to file and record this ordinance and
the Financial Agreement with the Middlesex County Clerk such that the
- Financial Agreement and this ordinance shall be reflected upon the land
records of the County of Middlesex as a lien upon and a covenant running with
each and every parcel of land constituting the Phase I Redevelopment Project
Site. Pursuant to and in accordance with the provisions of the Redevelopment
Bond Law, specifically NJ.SA 40A:12A-68(e), 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 a11 non-
municipal liens thereafter recorded or otherwise arising, without any additional
notice, recording, filing, continuation filing or action, until the payment in full
of all of the Project Sponsor Conduit Loan Bonds.
Section 3. The Authorized Officers of the Borough are hereby
further severally authorized and directed to (i) execute and deliver, and the
Borough Clerk is hereby further authorized and directed to attest to such
execution and to affix the corporate seal of the Borough to, any document,
instrument or certificate deemed necessary, desirable or convenient by the
Authorized Officers or the Borough Clerk, as applicable, in their respective
sole discretion, after consultation with the Borough Consultants, to be executed
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) perfom1 such other actions as the
Authorized Officers deem necessary, desirable or convenient in relation to the
execution and delivery thereof.
-
EXHIBIT A
FORM OF FINANCIAL AGREEMENT
-
-
FINANCIAL AGREEMENT
Record and Return to:
-
Stephen B. Pearlman, Esq.
DeCotiis, FitzPatrick, Cole & Wisler, LLP
500 Frank W. Burr Boulevard
Teaneck, New Jersey 07666
FINANCIAL AGREEMENT
THIS FINANCIAL AGREEMENT (hereinafter "Agreement" or "Financial
Agreement"), made this day of , 2006 by and between TITAN-PDC
CARTERET URBAN RENEWAL, LLC, a Delaware limited liability company qualified to do
business under the provisions of the Long Tenn Tax Law (the "Redeveloper Urban Renewal
Entity"), with offices at c/o Panattoni Development Company, 180 Raritan Center Parkway, First
Floor, Edison New Jersey 08837 ("Redeveloper Urban Renewal Entity"), as hereinafter defined)
and the BOROUGH OF CARTERET, a municipal corporation in the County of Middlesex and
the State of New Jersey ("Borough", as hereinafter defined).
WITNESSETH:
WHEREAS, on August I, 1995, pursuant to and in accordance with the provisions of the
Landfill Reclamation Improvement District Law, constituting Chapter 173 of the Pamphkt Laws
of 1995 of the State of New Jersey (the "State"), and the acts amendatory thereof and
- supplemental thereto (the "Landfill Law", as codified in NJ.S.A. 40A:12A-50 et ~.), the
Borough finally adopted Ordinance 95-40 which established a landfill reclamation improvement
district consisting of certain real property in the Borough as identified in such ordinance (the
"Initial District"); and
WHEREAS, pursuant to the Landfill Law, the Borough was deemed to have adopted a
redevelopment plan at the time the Initial District was established; and
WHEREAS, on November 2, 1995, the Borough Council adopted Resolution 95-346
relating to a redevelopment plan for the Initial District; and
WHEREAS, on June 6, 1996, pursuant to the 1995 Landfill Law, the Borough finally
adopted Ordinance 96-14, which expanded the boundaries of the Initial District to include those
properties identified in such ordinance (as expanded, the "District"); and
WHEREAS, on March 7, 1997, Borough and the Bellemead Development Corp.
("Bellemead") entered into a redevelopment agreement relating to the District (the "Bellemead
Agreement"); and
WHEREAS, on March 7, 2002, by Ordinance 02-05, the Borough finally adopted an
Amended and Restated Redevelopment Plan to govern the development of the District
("Amended and Restated Redevelopment Plan"); and
WHEREAS, on February 5, 2004, the Borough adopted Resolution #04-53 authorizing
the Borough to enter into a redevelopment agreement with regards to, inter alia, the
-
redevelopment of the Phase I Project Site (as such tenn is defined in the hereinafter defined
Redevelopment Agreement and as is described in Exhibit D attached hereto); and
- WHEREAS, on February 6, 2004, Bellemead and Borough executed that certain
"Mutual Release", which among other things, tenninated the Bellemead Agreement and released
each of the Borough and Bellemead ÍÌom all claims arising out of the Bellemead Agreement (the
"Bellemead Release"); and
WHEREAS, on February 6, 2004, the Borough, acting in the capacity of a
redevelopment entity pursuant to and in accordance with the 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 in NJ.S.A. 40A: 12A-I
et seq.), and TITAN-PDC CARTERET, LLC, a Delaware limited liability company (the
"Redeveloper"), entered into that certain redevelopment agreement (the "Redevelopment
Agreement") governing, among other things, the redevelopment of the Phase I Project Site (the
"Phase I Redevelopment Project"); and
WHEREAS, on May 6, 2004, the Borough adopted Resolution #04-160 declaring the
Phase I Project Site as an area in need of redevelopment, all in accordance with the
Redevelopment Law; and
WHEREAS, on October 7, 2004, the Borough finally adopted Ordinance #04-24, further
amending and restating the Amended and Restated Redevelopment Plan, all in accordance with
the Redevelopment Law; 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 200 I of the State,
and the acts amendatory thereof and supplemental thereto (the "Redevelopment Bond Law", as
- codified in NJ.S.A. 40A:12A-64 et seq.), specifically N.J.S.A. 40A:12A-66(a), the Borough is
authorized to provide for tax abatement within a redevelopment area and for payments in lieu of
taxes ("PILOTS") in accordance with certain applicable provisions of the Long Term Tax
Exemption Law, constituting Chapter 431 of the Pamphlet Laws of 1991 of the State, and the
acts amendatory thereof and supplement thereto (the "Long Term Tax Law", as codified in
N.J.S.A. 40A:20-1 et seq.); 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 Borough may issue, or cause to be issued,
bonds for the purpose of financing all or a portion of the costs of a redevelopment project, which
bonds may be secured by PILOTS; and
WHEREAS, pursuant to and in accordance with the provisions of the Redevelopment
Bond Law, specifically N.J.S.A. 40A:12A-67(t), and the Local Bond Law, constituting Chapter
169 of the Pamphlet Laws of 1960 of the State, and the acts amendatory thereof and supplement
thereto (the "Local Bond Law", as codified in N.J.S.A. 40A:2-l et seq.), the Borough may
provide for a full faith and credit guaranty of any bonds issued, whether by the Borough or any
other authorized governmental entity, including without limitation, a redevelopment agency
established in accordance with the Redevelopment Law, for the purposes of financing all or a
portion of the costs of a redevelopment project; and
WHEREAS, pursuant to Ihe terms of the Redevelopment Agreement, Ihe Borough shall
issue, or shall cause to be issued, bonds for the purpose of financing certain remediation costs of
-
2
the Phase I Redevelopment Project, including without limitation, the cost of investigation,
remediation and related creek relocation, wetlands mitigation and other activities for the
removal, treatment or containment of hazardous substances, the closure and post closure of any
- landfill located on the Phase I Project Site, and the construction of the necessary remedial
systems, including the foundations of any buildings to be constructed on the Phase I Project Site,
related thereto (the "Phase I Remediation Project"), all of which shall constitute a
Redevelopment Project, as such term is defined in the Redevelopment Bond Law; and
WHEREAS, pursuant to the terms of the Redevelopment Agreement, and in accordance
with the Redevelopment Law, Redevelopment Bond Law and Long Term Tax Law, as
applicable, the Redeveloper has created and established Redeveloper Urban Renewal Entity, as
an urban renewal entity pursuant to and in accordance with the Redevelopment Agreement,
Redevelopment Law, Redevelopment Bond Law, Long Term Tax Law and other applicable law;
and
WHEREAS, the Redeveloper Urban Renewal Entity has submitted an application to the
Borough for the approval of an urban renewal project, as such term is used in the Long Term Tax
Law, all in accordance with N.J.S.A. 40A:20-8 (the "Exemption Application", a copy of which is
attached hereto as Exhibit A) and the Exemption Application was accepted and approved
pursuant to resolution of the Borough Council duly adopted on _, 2006; and
WHEREAS, pursuant to the terms of this Financial Agreement, certain of such Annual
Service Charges shall be pledged to the payment of the principal of and interest on any bonds
issued, whether by the Borough or any other authorized government entity, including without
limitation a redevelopment agency established in accordance with the Redevelopment Law, to
finance the costs of the Phase I Remediation Project; and
- WHEREAS, pursuant to the Redevelopment Bond Law, specifically N.J.S.A. 40A:12A-
68, Annual Service Charges, as such term is defined herein, to be made by the Redeveloper
Urban Renewal Entity pursuant to the terms of this Financial Agreement shall constitute a
municipal lien within the meaning, and for all purposes, oflaw; and
WHEREAS, pursuant to the provisions of the New Jersey Environmental Infrastructure
Trust Financing Program (the "Program"), established pursuant to the New Jersey Environmental
Infrastructure Trust Act, constituting Chapter 334 of the Pamphlet Laws of 1985 of the State (the
"Trust Act", as codified in NJ.S.A. 58:11B-l et seq.), funds may be available for the purpose of
financing certain water quality improvement projects eligible for inclusion in the Program
("Program Eligible Projects"); and
WHEREAS, as a project that provides water quality improvements, all or a portion of
the Phase I Remediation Project may qualify under the Program and the Trust Act as a Program
Eligible Project, subject to a final determination made by New Jersey Environmental
Infrastructure Trust (the "Trust") and the New Jersey Department of Environmental Protection
(the "DEP"); and
WHEREAS, in order to take advantage of the Program, a local government entity must
act as the project sponsor (the "Project Sponsor") for the Redeveloper Urban Renewal Entity in
connection with the Redeveloper Urban Renewal Entity's implementation of the Phase I
Remediation Project; and
-
3
WHEREAS, on February 1, 2001, and in accordance with the Redevelopment Law,
specifically NJ.S.A 40A:12A-ll, the Borough finally adopted Ordinance No. 01-1, which
established the Carteret Redevelopment Agency (the "Agency") as an instrumentality of the
- Borough; and
WHEREAS, on March 3, 2005, the Agency, acting as Project Sponsor for the
Redeveloper Urban Renewal Entity at the direction of the Borough, submitted the "New Jersey
Environmental Infrastructure Financing Program Application for Financial Assistance" to the
Trust and DEP, respectively; and
WHEREAS, the Agency desires to finance the costs of the Phase I Remediation Project,
on a non-recourse basis to the Agency and acting solely as Project Sponsor on behalf of the
Redeveloper Urban Renewal Entity, from (i) the proceeds of a loan (the "Trust Loan") from the
Trust to the Agency, the tenns of which shall be established pursuant to a loan agreement by and
between the Trust and the Agency (the 'Trust Loan Agreement"), such Trust Loan to be secured
by a bond issued by the Agency to the Trust (the 'Trust Loan Bond"), and (ii) the proceeds of a
loan (the "Fund Loan") fTom the State, acting by and through the DEP (the "Fund") to the
Agency, the tenns of which shall be established pursuant to a loan agreement by and between the
State, acting by and through the DEP, and the Agency (the "Fund Loan Agreement" and together
with the Trust Loan Agreement, the "Program Loan Agreements"), such Fund Loan to be
secured by a bond issued by the Agency to the Fund (the "Fund Loan Bond" and together with
the Trust Loan Bond, the "Agency Conduit Loan Bonds"); and
WHEREAS, the Agency will in tum (i) lend Ihe proceeds fTom the Trust Loan Bond to
the Redeveloper Urban Renewal Entity (the "Redeveloper Trust Loan"), the tenns of which shall
be established pursuant to a loan agreement by and between the Agency and the Redeveloper
-- Urban Renewal Entity (the "Redeveloper Trust Loan Agreement"), such Redeveloper Trust Loan
to be secured by a promissory note issued by the Redeveloper Urban Renewal Entity to the
Agency (the "Redeveloper Trust Note") and (ii) lend the proceeds of the Fund Loan Bond to the
Redeveloper Urban Renewal Entity (the "Redeveloper Fund Loan"), the tenns of which shall be
established pursuant to a loan agreement by and between the Agency and the Redeveloper Urban
Renewal Entity (the "Redeveloper Fund Loan Agreement"), such Redeveloper Fund Loan to be
secured by a promissory note issued by the Redeveloper Urban Renewal Entity to the Agency
(the "Redeveloper Fund Note"); and
WHEREAS, prior to, and in anticipation of, the issuance of the Agency Conduit Loan
Bonds, the Agency may issue short-tenn notes directly to the Trust, which short-tenn notes shall
bear interest at zero percent (0%), as pennitted under the Program (the "Trust Interim Note', and
together with the Agency Conduit Loan Bonds, the "Project Sponsor Conduit Loan Bonds"); and
WHEREAS, the Agency will in tum lend the proceeds fTom the Trust Interim Notes to
the Redeveloper Urban Renewal Entity (the "Redeveloper Trust Interim Loan", and together
with the Redeveloper Trust Loan and the Redeveloper Fund Loan, the "Redeveloper Loan"), the
tenns of which shall be established pursuant to a loan agreement by and between the Agency and
the Redeveloper Urban Renewal Entity (the "Redeveloper Interim Trust Loan Agreement" and
together with the Redeveloper Trust Loan Agreement and the Redeveloper Fund Loan
Agreement, the "Redeveloper Loan Agreements"), such Redeveloper Interim Trust Loan to be
secured by a promissory note issued by the Redeveloper Urban Renewal Entity to the Agency
-
4
(the "Redeveloper Interim Trust Note" and together with the Redeveloper Trust Note and Ihe
Redeveloper Fund Note, the "Redeveloper Notes"); and
- WHEREAS, the Trust Interim Note is anticipated to be paid form the proceeds of the
Agency Conduit Loan Bonds; and
WHEREAS, pursuant to the Redevelopment Bond Law, specifically N.J.S.A. 40A:12A-
67(c), the Borough shall assign, for the benefit of the Agency and as security for the Project
Sponsor Conduit Loan Bonds, all of the Borough's right, title and interest in and to the Pledged
Annual Service Charges, as such term is defined herein (the "Borough Assignment"); and
WHEREAS, any amounts received by the Agency pursuant to the Borough Assignment
shall be credited against any amounts due and owing by the Redeveloper Urban Renewal Entity
to the Agency pursuant to the Redeveloper Loan Agreements; and
WHEREAS, pursuant to the terms of the Redevelopment Agreement, including without
limitation, Sections 11.06(j) and 11.16, Panattoni Investments, LLC, a California limited liability
company (the "Guarantor"), who has an equity ownership interest, whether direct or indirect in
the Redeveloper Urban Renewal Entity, shall enter into an agreement with the Agency, to which
the Borough shall be a third-party beneficiary, whereby the Guarantor shall guaranty the full,
prompt and unconditional payment when due of any payments of the Redeveloper Urban
Renewal Entity due and owing to the Agency pursuant to the Redeveloper Loan Agreements (the
"Panattoni Agency Guaranty Agreement"); and
WHEREAS, as additional security for the Project Sponsor Conduit Loan Bonds and as
authorized pursuant to the Redevelopment Law, specifically NJ.SA. 40A:12A-41, the Borough
shall contribute, donate, grant or otherwise pay to the Agency the Borough Incremental Land
- Taxes, as such term is defined herein, pursuant 10 the terms of an agreement by and between the
Borough and the Agency (the "Contribution Agreement"); and
WHEREAS, the Borough shall fully, unconditionally and irrevocably guaranty, Ihe
punctual payment, when due, of the principal of, redemption premium, if any, and interest on the
Project Sponsor Conduit Loan Bonds in a total original aggregate principal amount not to exceed
$38,500,000 in accordance with (i) the terms of the guaranty ordinance to be finally adopted by
the Borough Council (the "Guaranty Ordinance") and (ii) a guaranty certificate to be executed by
an authorized officer of the Borough on the face of each Project Sponsor Conduit Loan Bond
(the "Guaranty Certificate" and together with the Guaranty Ordinance, the "Borough Guaranty"),
all pursuant to the Redevelopment Law, Redevelopment Bond Law and the Local Bond Law;
and
WHEREAS, in consideration for the Borough Guaranty, the Redeveloper Urban
Renewal Entity shall pay to the Borough a fee (the "Borough Guaranty Fee") pursuant to the
terms of an agreement by and between the Borough and the Redevelopment Urban Renewal
Entity (the "Borough Guaranty Fee Agreement"); and
WHEREAS, the Project Sponsor Conduit Loan Bonds shall be special, limited
obligations of the Agency, payable solely ITom and secured by the Agency's interest in the
Redeveloper Notes, the Borough Assignment, the Panattoni Agency Guaranty Agreement, the
Contribution Agreement and the Borough Guaranty; and
WHEREAS, on June 22, 2005, as a condition precedent to the issuance of any and all of
the Project Sponsor Conduit Loan Bonds and in accordance with all applicable law, including
-
5
without limitation, N.J.S.A. 40A:5A-6, N.J.S.A. 58:l1B-9(a) and N.J.S.A. 40A:12A-67(g), the
Agency submitted an application (the "Local Finance Board Application") to the Local Finance
Board in the Division of Local Government Services of the State's Department of Community
~ Affairs (the "Local Finance Board") for the Local Finance Board's approval of the issuance of
the Project Sponsor Conduit Loan Bonds and related financial instruments; and
WHEREAS, the Local Finance Board, at a meeting held on August 10, 2005, did issue
favorable [mdings with respect to the Project Sponsor Conduit Loan Bonds; and
WHEREAS, pursuant to the tenns of the Redevelopment Agreement, including without
limitation Section 11.06(p) and 11.18, the Guarantor shal1 enter into an Agreement with the
Borough whereby the Guarantor shal1 guaranty, inter alia, the prompt and full payment of any
"buffer" and or deductible required under any Remedation Perfonnance and Payment Bond, Cost
Cap Insurance or any other insurance required to be obtained by the Redeveloper pursuant to the
tenns of the Redevelopment Agreement (the "Panattoni Borough Guaranty Agreement"); and
WHEREAS, on , 2006, the Borough Council final1y adopted ordinance no.
_ entitled "An Ordinance of the Borough of Carteret Authorizing the Execution and Delivery of
a Financial Agreement by and between the Borough of Carteret and Titan-PDC Carteret Urban
Renewal, LLC in Connection with the Phase I Redevelopment Project (the "Ordinance", a copy
of which is attached hereto as Exhibit B); and
WHEREAS, the Borough and the Redeveloper Urban Renewal Entity have reached
agreement with respect to, among other things, the tenns and conditions relating to the Annual
Service Charges and desire to execute this Financial Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and
- for other good and valuable consideration, it is mutual1y covenanted and agreed as follows:
-
6
ARTICLE I
GENERAL PROVISIONS
- SECTION 1.01 Governing Law
This Agreement shall be governed by the laws of the State of New Jersey,
including the provisions of the Long Term Tax Law, the Redevelopment Law, the
Redevelopment Bond Law and such other statutes as may be sources of relevant
authority, if any. It is expressly understood and agreed by the parties hereto that the
Borough expressly relies upon the facts, data and presentations contained in the
Exemption Application in granting this tax exemption.
SECTION 1.02 General Definitions
Unless specifically provided otherwise or the context otherwise requires, the
following terms when used in this Agreement shall mean:
Allowable Net Profit - The amount arrived at by applying the Allowable Profit
Rate to Total Project Cost pursuant to the provisions ofN.J.S.A. 40A:20-3(c).
Allowable Profit Rate - The Allowable Profit Rate for the purpose of this
Agreement will be calculated as set forth in N.J.S.A. 40A:20-3(b). For the purpose of
determining the specific Allowable Profit Rate, the annual interest percentage rate shall
be the interest rate payable on the entity's initial permanent mortgage financing for the
Phase I Redevelopment Project Improvements. If there is no permanent mortgage
financing, the interest rate per annum as referenced above shall, for the purposes of this
project, be based upon 7.5% which the parties agree is the prevailing rate on mortgage
financing on comparable improvements in the County.
- Annual Service Charge ~ the Pledged Annual Service Charge and the Unpledged
Annual Service Charge.
Annual Service Charge Start Date - the date that the first Certificate of
Occupancy IS issued for any portion of the Phase I Redevelopment Project
Improvements.
Auditor's Report - A complete financial statement outlining the financial status of
the Project (for a period of time as indicated by context), the contents of which have been
prepared in a manner consistent with generally accepted accounting principles and that
fully details all items as required by the applicable statutes, including Allowable Net
Profit for the period as defined in NJ.S.A. 40A:20-15, and that has been certified as to its
conformance with such standards by a certified public accountant who is, or whose firm
is, licensed to practice that profession in the State of New Jersey.
Base Land Tax ~ the aggregate amount of taxes assessed on the value of the land
portion of the Phase I Redevelopment Site during the calendar year 2005, such amount
equal to $
Bondholder - Any person who is the registered owner of any outstanding Project
Sponsor Conduit Loan Bonds.
Borough Land Tax Report ~ an accounting, certified by the Chief Financial
Officer of the Borough, provided by the Borough to the Redeveloper Urban Renewal
-
Entity, which shall be provided on an annual basis no less than thirty (30) days prior to
date that the first quarterly installment of any Pledged Annual Service Charge is due by
- the Redeveloper Urban Renewal Entity, setting forth (i) the amount of Land Taxes paid
by the Redeveloper Urban Renewal Entity to the Borough in the last four (4) preceding
quarterly installments, (ii) the calculation and amount of the Incremental Land Taxes,
including the amounts paid, distributed, dispersed or otherwise shared with each of the
County and the School District by the Borough in accordance with applicable law, (iii)
the calculation and amount of the Borough Incremental Land Tax, (iv) the amount of the
Pledged Annual Service Charge due hereunder, (v), the amount of the Borough Portion
due hereunder, which amount shall be the same as set forth in Schedule 2 attached hereto,
and (vi) the amount of the County Portion due hereunder.
Borough Incremental Land Tax - that portion of the Incremental Land Tax that
the Borough retains in its general fund and that is not otherwise paid, distributed,
dispersed, or otherwise shared with the County or the School District in accordance with
applicable law regarding the allocation of Land Taxes by and among the Borough, the
County and the School District.
Borough Portion - That portion of the Unpledged Annual Service Charge, as set
forth in Schedule 2 hereof, to be paid by, or on behalf of, the Redeveloper Urban
Renewal Entity to the Borough pursuanl to Section 4.04(a) hereof.
Certificate of Occupancv - Document issued by the Borough authorizing
occupancy of a building on the Phase I Project Site.
Countv - County of Middlesex, New Jersey.
- Countv Portion - That portion of the Unpledged Annual Service Charge, to be
paid by, or on behalf of, the Redeveloper Urban Renewal Entity to the Borough for
remittance to the County pursuant to Section 4.04(b) hereof, which in accordance with
N.J.S.A. 40A:20-12 shall be equal to, and shall in no event be an amount less than, five
percent (5%) of the Annual Service Charge due hereunder.
Debt Service Portion - the principal of and interest on the Project Sponsor
Conduit Loan Bonds as set forth in Schedule I attached hereto.
Default - The failure of the Redeveloper Urban Renewal Entity to perfonn any
obligation imposed upon the Redeveloper Urban Renewal Entity by the tenns of this
Agreement after notice and opportunity to cure as provided herein.
GAAP - generally accepted accounting principles as in effect from time to time in
the United States of America.
Gross Revenue - The annual gross revenue of the Redeveloper Urban Renewal
Entity as defined in NJ.S.A. 40A:20-3(a).
Incremental Land Tax - that portion of Land Taxes, over and above the Base
Land Tax, paid by the Redeveloper Urban Renewal Entity in the last four (4) preceding
quarters immediately prior to the date that each of the first quarterly installments of the
Pledged Annual Service Charge is due hereunder.
-
8
In Rem Tax Foreclosure - A summary proceeding by which the Borough may
enforce the lien for taxes due and owing by a tax sale. Said foreclosure is governed by
- N.J.S.A. 54:5-1 et seq.
Land Taxes - The amount of taxes assessed on the value of the land portion of the
Phase I Redevelopment Site, consisting of the Base Land Tax and the Incremental Land
Tax.
Maioritv of Bondholders - Bondholders owning more than a certain percentage of
the aggregate principal amount of all outstanding Project Sponsor Conduit Loan Bonds,
which term will be defined in more detail and which percentage will be established in the
Trust Indenture.
Net Profit - As defined at N.J.S.A. 40A:20-3(c).
Pledged Annual Service Charge - That portion of the Annual Service Charge to
be paid by, or on behalf of, the Redeveloper Urban Renewal Entity pursuant to Section
4.02 hereof. The Pledged Annual Service Charge shall be calculated in accordance with
the following formula:
Pledged Annual Service Charge = annual Debt Service Portion, as set forth in
Schedule 1 attached hereto, plus (+) Land Taxes paid by the Redevelopment
Urban Renewal Entity in the last four (4) preceding quarters immediately prior to
the date that each of the first quarterly Pledged Annual Service Charge is due
hereunder, minus ( -) the Borough Incremental Land Tax.
Phase I Redevelopment Proiect Completion Date - That date on which the Phase I
Redevelopment Project is completed, as evidenced by the issuance of a final Certificate
- of Completion.
Phase I Redevelopment Proiect Improvements - Any building, structure or fixture
permanently affixed to the Phase I Project Site and owned by the Redeveloper Urban
Renewal Entity constituting the Project Site Improvements (as such term is defined in the
Redevelopment Agreement).
School District - shall have the meaning ascribed thereto in P.L. 1967, c.27l
ru.J .S.A. l8A:24-l) that serves the population of the Borough.
Tax Sale Law - N.J.S.A. 54:5-1 et seq.
Temporary Certificate of Occupancv - Document issued by the Borough
authorizing temporary occupancy of a building on the Phase I Project Site
Total Phase I Redevelopment Proiect Cost - The project costs for the Phase I
Redevelopment Project Cost included in each of the categories set forth in N.J.S.A.
40A:12A-3.
Trust Indenture - The Trust Indenture dated as of , 2006 between
-
the Agency and the Trustee, as amended or supplemented, or such similar document
prepared in connection with the issuance of the of the Project Sponsor Conduit Loan
Bonds.
Trustee - Bank, as the Trustee pursuant to the Trust
Indenture.
-
9
Unpledged Annual Service Charge - That portion of the Annual Service Charge
constiluting the Borough Portion and the County Portion, respectively, to be paid by, or
_ on behalf of, the Redeveloper Urban Renewal Entity pursuant to Section 4.04 hereof.
To the extent that terms are used in this Agreement and are not defined herein,
they shall have the meaning ascribed to such terms in the Redevelopment Agreement.
SECTION 1.03 Exhibits Incorporated
All exhibits referred to in this Financial Agreement and attached hereto are
incorporated herein and made part hereof.
ARTICLE II
APPROVAL
SECTION 2.01 Approval of Tax Exemption
Pursuant to the Ordinance, all Phase I Redevelopment Project Improvements
constructed by the Redeveloper Urban Renewal Entity shall be exempt from taxation as
provided in the Long Term Tax Law. The Phase I Redevelopment Project shall be as
described in the Exemption AppJication. The Redeveloper Urban Renewal Entity
represents and covenants that, effective as of the completion of the Phase I
Redevelopment Project, the Phase I Redevelopment Project shall be used, managed and
operated for the purposes set forth in the Exemption Application, and the land use
applications filed with, and as approved by, the Borough in connection with this Phase I
Redevelopment Project.
_ SECTION 2.02 Approval of Phase I Redevelopment Proiect to be
Undertaken bv the Redeveloper Urban Renewal Entitv
Approval is hereby granted to the Redeveloper Urban Renewal Entity for the
contemplated Phase I Redevelopment Project on the Phase I Project Site, which shall in
all respects materially comply and conform to all applicable statutes of the State of New
Jersey, and the lawful regulations made pursuant thereto, governing land, building(s) and
the use thereof, and which Phase I Redevelopment Project is more particularly described
in the Exemption Application. Attached hereto as Exhibit C is a true copy of the
formation documents of the Redeveloper Urban Renewal Entity.
ARTICLE III
DURATION OF AGREEMENT
SECTION 3.01 Tenn
It is understood and agreed by the parties that this Agreement, including the
obligation to pay Annual Service Charges required under Article N hereof and the tax
exemption granted and referred to in Section 2.01 hereof, shall remain in effect until the
earlier of (i) thirty-five (35) years from the date of execution hereof, (ii) thirty (30) years
from the Phase I Redevelopment Project Completion Date or (iii) the date on which no
Project Sponsor Conduit Loan Bonds remain "outstanding" within the meaning of the
Trust Indenture. At the expiration of the term hereof the tax exemption for the Phase I
Redevelopment Project shall expire and the Phase I Redevelopment Project
10
Improvements shall thereafter be assessed and taxed according to the general law
applicable to other non-exempt property in the Borough. After expiration of the lerm
hereof, all restrictions and limitations upon the Redeveloper Urban Renewal Entity shall
"- terminate upon the Redeveloper Urban Renewal Entity's rendering and the Borough's
acceptance of its final accounting.
SECTION 3.02 No Voluntary Termination
Neither the Redeveloper Urban Renewal Entity nor the Borough may at any time
terminate this Agreement during the period when any Project Sponsor Conduit Loan
Bond remains "outstanding" within the meaning of the Trust Indenture.
SECTION 3.03 Date of Termination
Upon any termination of the tax exemption described in Section 3.01 hereof, the
date of such termination shall be deemed to be the end of the fiscal year of the
Redeveloper Urban Renewal Entity.
ARTICLE IV
ANNUALSER~CECHARGE
SECTION 4.01 Annual Service Charge
The Annual Service Charge shall be paid as set forth herein.
SECTION 4.02 Pledged Annual Service Charge
Notwithstanding anything herein to the contrary, the Redeveloper Urban Renewal
Entity shall pay to the Borough (but which payment shall be directed to the Trustee in
accordance with Section 5.02 hereof) the Pledged Annual Service Charge. It is expressly
- understood, and hereby acknowledged by the Borough and the Redeveloper Urban
Renewal Entity, respectively, that the Debt Service Portion set forth in the attached
Schedule I is based upon current market conditions and is for informational purposes
only and that the actual Debt Service Portion will be dependent, in part, upon the market
conditions present at the time the Authority Conduit Loan Bonds are issued. Upon the
issuance of the Authority Conduit Loan Bonds, which are anticipated to be issued in
November, 2006, Schedule 1 shall automatically be updated to reflect the actual Debt
Service Portion and such updated Schedule 1 shall be deemed to be a part of this
Agreement as if originally set forth herein without any further action of the Borough or
the Redeveloper Urban Renewal Entity.
The Redeveloper Urban Renewal Entity shall be entitled to a credit against the
Pledged Annual Service Charge for the amount, without interest, of all Land Taxes paid
by it in the last four preceding quarterly installments in accordance with N.J.S.A
40A:20-12(b ).
In the event that any or all of the proceeds of the Project Sponsor Conduit Loan
Bonds are not spent or otherwise drawn upon for purposes of the Phase I Redevelopment
Project and are credited against any payments due and payable by the Redeveloper Urban
Renewal Entity to the Agency pursuant to the terms of the Redeveloper Loan
Agreements, the Redeveloper Urban Renewal Entity shall be entitled to a credit against
the Pledged Annual Service Charges in such amounts, and at such times, as the
-
11
Redeveloper Urban Renewal Entity shall be entitled to under the Redeveloper Loan
Agreements.
- SECTION 4.03 Pledged Annual Service Charge Installments
(a) The Redeveloper Urban Renewal Entity expressly agrees that installments of
the aforesaid Pledged Annual Service Charge shall be paid quarterly in accordance with
the dates set forth in Schedule 1 in a manner consistent with the Borough's tax collection
schedule. The first installment shall be paid on the Annual Service Charge Start Date. In
the event that the first installment date of the Pledged Annual Service Charge shall arise
prior to the Annual Service Charge Start Date, the Redeveloper Urban Renewal Entity
shall pre-pay installments of the Pledged Annual Service Charge as they come due, which
pre-payment shall be credited against the total amount due hereunder as Pledged Annual
Service Charges (but which shall not relieve the Redeveloper Urban Renewal Entity from
paying successive installments, that have not been credited as set forth above, as and
when they come due). In the event that the Redeveloper Urban Renewal Entity fails to
timely pay any installment, the amount past due shall bear the highest rate of interest
pennitted under New Jersey law in the case of unpaid taxes or tax liens on the land until
paid.
SECTION 4.04 Unpledged Annual Service Charge
The Redeveloper Urban Renewal Entity shall pay installments of the Unpledged
Annual Service Charge quarterly to the Borough in accordance with subsections (a) and
(b) herein. In the event that the Redeveloper Urban Renewal Entity fails to timely pay
any installment thereof, the amount past due shall bear the highest rate of interest
pennitted under New Jersey law in the case of unpaid taxes or tax liens on the land until
- paid.
(a) Borough Portion of Un pledged Service Charge. The
Redeveloper Urban Renewal Entity shall pay the Borough Portion of the Unpledged
Service Charge quarterly, in the amounts and in a manner consistent with the Borough's
tax collection schedule, all in accordance with Schedule 2 hereof. Year I of Schedule 2
hereof shall begin on the Annual Service Charge Start Date. As set forth in Schedule 2
hereof, the Borough Portion due and payable by the Redeveloper Urban Renewal Entity
for the years twenty-one (21) through the tenn of this Agreement, if applicable, shall
equal the amount that, if not for the exemption from taxation as provided for herein,
would otherwise be assessed against the Phase I Redevelopment Project Improvements in
accordance with the general law applicable to non-exempt property in the Borough in
those respective years. For the years twenty-one (21) through the tenn of this
Agreement, the Redeveloper Urban Renewal Entity shall be entitled to a credit against
the Borough Portion, when due, in an amount equal to the County Portion paid by it for
such time period.
(b) Countv Portion of Unpledged Service Charge. (i) The
Redeveloper Urban Renewal Entity shall pay the County Portion of the Unpledged
Service Charge to the Borough on the same dates that the Borough Portion, as set forth in
Schedule 2 hereof, is due hereunder. In no event shall the County Portion equal an
amount less than five percent (5%) of the Annual Service Charge due hereunder.
-
12
(ii) In accordance with N.J.S.A. 40A:20-12 and upon receipt by the
Borough of the County Portion paid by the Redeveloper Urban Renewal Entity, the
Borough shall promptly remit such County Portion to the County.
-'
SECTION 4.05 Land Taxes
Land Taxes shall be separately assessed for each parcel comprising the Phase I
Project Site, and shall be assessed only on the land portion of the Phase I Project Site.
SECTION 4.06 Material Conditions
It is expressly agreed and understood that all payments of Land Taxes and Annual
Service Charges and any interest payments, penalties or costs of collection due thereon,
are material conditions of this Agreement ("Material Conditions"). If any other term,
covenant or condition of this Financial Agreement or the Exemption Application, as to
any person or circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Agreement or the application of such term, covenant or condition to
persons or circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each remaining term, covenant or condition of this
Financial Agreement shall be valid and enforced to the fullest extent permitted by law.
SECTION 4.07 Borough Land Tax Report
For purposes of determining the Pledged Annual Service Charge and the County
Portion, the Borough shall provide to the Redeveloper Urban Renewal Entity the
Borough Land Tax Report on an annual basis no less than thirty (30) days prior to the
date that the first quarterly installment of any Pledged Annual Service Charge is due to
the Borough by the Redeveloper Urban Renewal Entity.
- SECTION 4.08 Payments
Except as provided for in Sections 4.02 and 4.04 hereof with regards to the
calculation of the Pledged Annual Service Charge and the County Portion, neither the
Redeveloper Urban Renewal Entity nor the Borough may alter the amounts or dates for
which the Annual Service Charges shall be due hereunder.
SECTION 4.09 Annual Service Charges as Municipal Lien
As provided in the Redevelopment Bond Law and such other statutes as may be
sources of relevant authority, if any, the Annual Service Charge shall be a continuous,
municipal lien on the Phase I Project Site and Phase I Redevelopment Project
Improvements.
SECTION 4.10 Annual Service Charge as Percentage of Total Phase I
Redevelopment Proiect Costs
As provided for in the Long Term Tax Law, the Annual Service Charge shall be a
percentage of Total Phase I Project Costs; however, the Redevelopment Bond Law
provides that the minimum or maximum percentages as established in the Long Term
Tax Law are not applicable to redevelopment projects financed with bonds. As such, the
percentage of Total Phase I Redevelopment Project Costs to which the Annual Service
Charge is equal is set forth on Schedule 3 hereof.
-
13
ARTICLE V
PLEDGE OF ANNUAL SERVICE CHARGE TO PROJECT SPONSOR
CONDUIT LOAN BONDS
-
SECTION 5.01 Redeveloper Urban Renewal Entitv's Consent
The Redeveloper Urban Renewal Entity hereby consents and agrees to the amount
of Annual Service Charges and to the liens established in this Agreement, and the
Redeveloper Urban Renewal Entity shall not contest the validity or amount of any such
lien. The Redeveloper Urban Renewal Entity's remedies shall be limited to those
specifically set forth herein and otherwise provided by law.
SECTION 5.02 Securitv for the Proiect Sponsor Conduit Loan Bonds
(a) As security for the Project Sponsor Conduit Loan Bonds, the
Borough and the Redeveloper Urban Renewal Entity agree to and hereby assign all of
their interest in each payment of the Pledged Annual Service Charge, including interest,
penalties and costs of collection, to the extent necessary and for the purpose of meeting
their obligations to the Agency, or alternatively, through the Agency to the Trustee as
part of the pledge of the trust estate under the Indenture.
(b) Each installment payment as set forth in Section 4.02 is to be made
to the Trustee and shall be clearly identified as "Pledged Annual Service Charge Payment
for the Carteret Phase I Redevelopment Project".
(c) Each installment payment as set forth in Section 4.04(a) is to be
made to the. Borough and shall be clearly identified as "Borough Portion of the
Unpledged Annual Service Charge Payment for the Carteret Phase I Redevelopment
- Project".
(d) Each installment payment as set forth in Section 4.04(b) is to be
made to the Borough and clearly identified as "County Portion of the Unpledged Annual
Service Charge Payment for the Carteret Phase I Redevelopment Project".
(e) If any installment of the Annual Service Charge is not paid to the
Trustee or the Borough, respectively, III accordance with this Agreement, the
Redeveloper Urban Renewal Entity hereby waives any objection or right to challenge the
use by the Borough, the Agency or the Trustee of the enforcement of remedies to collect
such installment of the Annual Service Charge as are afforded the Borough by law,
including the Tax Sale Law, provided, however, that in no event shall there be any
acceleration of any amounts due and owing to repay the Project Sponsor Conduit Loan
Bonds, and such remedies shall be limited solely to the collection of delinquent and
unpaid amounts past due for payment, including interest, penalties and costs of collection
provided for by the Tax Sale Law.
(f) The Borough hereby pledges and assigns the installments of the
Pledged Annual Service Charge to the Agency, or alternatively, the Trustee, to secure
payment of the Project Sponsor Conduit Loan Bonds. This pledge constitutes an absolute
unconditional assignment of the Pledged Annual Service Charge. There shall not be any
pledge of the Pledged Annual Service Charge by the Borough to any person or entity
other than the Agency, or alternatively, the Trustee.
-
14
(g) Pursuant to the Redevelopment Bond Law and such other statutes
as may be of relevant authority, if any, the Pledged Annual Service Charge shall not be
- included within the general funds of the Borough. The Borough's pledge of the Pledged
Annual Service Charge to the Agency, or alternatively, the Trustee, shall be a limited
obligation of the Borough payable to the extent of payments received rrom the
Redeveloper Urban Renewal Entity and shall not constitute a general obligation of the
Borough.
(h) If received by the Borough, the Borough's Chief Financial Officer
shall forward all installments of the Pledged Annual Service Charge to the Trustee in
accordance with this Agreement.
(i) The Unpledged Annual Service Charge shall in no event constitute
a portion of the trust estate of, or otherwise constitute security for, the Project Sponsor
Conduit Loan Bonds, and the Trustee, upon receipt of any Unpledged Annual Service
Charge, shall transmit such Unpledged Annual Service Charge promptly to the Borough.
(j) In the event that the Redeveloper Urban Renewal Entity does not
pay, or cause to be paid, the full amount of any Pledged Annual Service Charge when
due, the Borough, in its sole discretion, may allocate any portion of the Unpledged
Annual Service Charge which has been paid to it by, or on behalf of, the Redeveloper
Urban Renewal Entity, in satisfaction of any Pledged Annual Service Charge that
remains due and outstanding. The determination to allocate any Unpledged Annual
Service Charge in satisfaction of any unpaid Pledged Annual Service shall be made by
the Borough in its sole discretion and shall in no way be deemed to grant, conveyor
otherwise entitle the Redeveloper Urban Renewal Entity, the Agency, the Trustee or any
- Bondholder any interest in or to the Unpledged Annual Service Charge nor reduce,
eliminate, constitute a set-off or otherwise abrogate the Redeveloper Urban Renewal
Entity's obligations hereunder.
ARTICLE VI
REMEDIES
SECTION 6.01 Remedies
In the event of a breach of this Agreement by any of the parties hereto or a dispute
arising between the parties in reference to the terms and provisions as set forth herein,
other than those items specifically included as Material Conditions herein, any party may
apply to the Superior Court of New Jersey by an appropriate proceeding, to settle and
resolve said dispute in such fashion as will tend to accomplish the purposes of the
Redevelopment Law, Redevelopment Bond Law and Long Term Tax Law. In the event
the Superior Court shall not entertain jurisdiction or, in the event of a breach of Material
Condition, then the parties shall submit the dispute to the American Arbitration
Association in New Jersey to be determined in accordance with its rules and regulations
in such a fashion to accomplish the purpose of said laws. Costs for said arbitration shall
be paid by the non-prevailing party. In the event of a default on the part of the
Redeveloper Urban Renewal Entity to pay any installment of the Pledged Annual Service
Charge and/or the Unpledged Annual Service Charge required by Article IV above, the
Borough, or the Agency, or alternatively, the Trustee, acting as assignee and agent of the
Borough and the Agency, in addition to their other remedies, reserve the right to proceed
-
15
against the Redeveloper Urban Renewal Entity's land and premises, in the manner
provided by law, including the Tax Sale Law, and any act supplementary or amendalory
thereof; provided, however, that in no event shall there be any acceleration of any future
- Annual Service Charge. Whenever the word "Taxes" appears, or is applied, directly or
implied, to mean taxes or municipal liens on land, such statutory provisions shall be read,
as far as it is pertinent to tills Agreement, as if the Annual Service Charge were taxes or
municipal liens on land. In either case, however, the Redeveloper Urban Renewal Entity
does not waive any defense it may have to contest the rights of the Borough, the Agency
or the Trustee to proceed in the above-mentioned manner, subject to the aforementioned
proscription on acceleration in this Section and in Section 5.02 hereof.
ARTICLE VII
CERTIFICATE OF OCCUPANCY
SECTION 7.01 Certificate of Occupancv
It is understood and agreed that the Redeveloper Urban Renewal Entity shall
remain obligated to make application for and make all good faith efforts which are
reasonable to obtain Certificates of Occupancy for the Phase I Redevelopment Project in
a timely manner as identified in the Exemption Application.
SECTION 7.02 Filing of Certificate ofOccupancv
It shall be the primary responsibility of the Redeveloper Urban Renewal Entity to
forthwith file with the Tax Assessor, the Tax Collector and the Cillef Financial Officer of
the Borough a copy of such certificate.
ARTICLE VIII
- ANNUAL AUDITS
SECTION 8.01 Accounting Svstem
The Redeveloper Urban Renewal Entity agrees to maintain a system of
accounting and internal controls established and administered in accordance with
generally accepted accounting principles consistently applied, and as otherwise
prescribed in the Long Term Tax Law during the term of this Agreement.
SECTION 8.02 Periodic Reports
Annually, within ninety (90) days after the close of each fiscal or calendar year,
depending on the Redeveloper Urban Renewal Entity's accounting basis, that this
Agreement shall continue in effect, the Redeveloper Urban Renewal Entity shall submit
its Auditor's Report certified by an independent certified public accountant for the
preceding fiscal or calendar year to the Mayor, the Borough Council and the Borough
Clerk, who shall advise those municipal officials required to be advised, and to the
Director of the Division of Local Government Services in the New Jersey Department of
Community Affairs pursuant to N.J.S.A. 40A:20-9(d). Said Auditor's Report shall
include, but not be limited to, the terms and interest rate on any mortgagees) associated
with the Phase I Redevelopment Project, the Allowable Net Profit for the period shown,
and such details as may relate to the financial affairs of the Redeveloper Urban Renewal
Entity and to its operation and performance hereunder, pursuant to the Long Term Tax
Law and tills Agreement.
-
16
SECTION 8.03 Inspection
Upon the request of the Borough, the Agency, the Trustee or the State of New
- Jersey, the Redeveloper Urhan Renewal Entity shall permit the inspection of property,
equipment, buildings and other facilities of the Redeveloper Urban Renewal Entity by the
requesting party or its agents. It also shall permit, upon request of the Borough or the
State of New Jersey, reasonable examination and audit of its books, contracts, records,
documents and papers by representatives duly authorized by the Borough or the State.
Such inspection, examination or audit shall be made during the hours of the business day,
in the presence of any officer or agent of the Redeveloper Urban Renewal Entity.
SECTION 8.04 Limitation on Profits and Reserves
During the period of tax exemption as provided herein, the Allowable Net Profit
limitation shall apply to the Redeveloper Urban Renewal Entity pursuant to the
provisions of the Long Term Tax Law. Pursuant to N.J.S.A. 40A:12A-15, the calculation
of Net Profit shall be cumulative for the period commencing at the time the Phase I
Redevelopment Project is completed, with any negative amount of profit from prior years
being carried forward and included in the accumulated excess profit calculation.
SECTION 8.05 Payment of Dividend and Excess Profit Charge
Whenever the Net Profit of the Redeveloper Urban Renewal Entity for the period,
taken as one accounting period, with any negative amounts of profit from prior years
being carried forward and included in the accumulated excess profit calculation,
commencing upon the Annual Service Charge Start Date and terminating at the end ofthe
last full fiscal year, shall exceed the Allowable Net Profit for the period, the Redeveloper
Urban Renewal Entity shall, within 90 days of the close of that fiscal year, pay the excess
- Net Profit to the Borough as an additional service charge, provided, however, that the
Redeveloper Urban Renewal Entity may maintain any reserves permitted by N.J.S.A.
40A:20-3(c)(l) or 40A:20-l5.
The parties agree that the Borough shall deposit twenty-five percent (25%) of any
excess Net Profit paid to the Borough in an escrow account to be applied towards the
Redeveloper Urban Renewal Entity's obligation to pay the Pledged Annual Service
Charge in the successive year, such application to be deemed a capital grant to
Redeveloper pursuant to Section 8(t) ofthe Redevelopment Law.
SECTION 8.06 Gross Revenue of Redeveloper Urban Renewal Entitv
Gross Revenue shall, pursuant to NJ.S.A. 40:20-3(a), include (i) the Redeveloper
Urban Renewal Entity's annual gross rents and other income and (ii) all insurance,
operating, maintenance and similar expenses per annum paid by any tenants of the Phase
I Redevelopment Project from time to time that are certified by the Redeveloper Urban
Renewal Entity as expenses that are ordinarily paid by a landlord in real estate projects
similar to the Phase I Redevelopment Project. For the purpose of this calculation, the
method of computing gross revenue for the Redeveloper Urban Renewal Entity shall be
in accordance with GAAP and the method of determining insurance, operating and
maintenance expenses paid by a tenant which are ordinarily paid by a landlord, which
shall be included in the gross revenue, shall be in accordance with GAAP.
-
17
ARTICLE IX
ASSIGNMENT AND/OR ASSUMPTION
- SECTION 9.01 Approval
The Redeveloper Urban Renewal Entity may sell all or a portion of the Phase I
Redevelopment Project provided that the sale is (i) in accordance with the provisions of
the Redevelopment Agreement, (ii) to another urban renewal entity organized under and
in full compliance with the provisions of the Long Tenn Tax Law imposed on "urban
renewal entities", as defined therein, including successors and assigns of the Redeveloper
Urban Renewal Entity, which is not unacceptable to a Majority of Bondholders, provided
that the obligations of the Redeveloper Urban Renewal Entity under this Agreement are,
to the extent those obligations relate to the portion of the Phase I Project Site acquired by
the transferee, fully assumed by the transferee, and (iii) only in the event that the
Redeveloper Urban Renewal Entity has delivered to the Borough, the Agency and the
Trustee an opinion of nationally-recognized bond counsel to the effect that the sale will
not adversely affect the exclusion from gross income for federal income tax purposes of
the interest on any tax-exempt Project Sponsor Conduit Loan Bonds. Any purported sale
or other transfer of all or any portion of the Phase I Redevelopment Project in violation of
the preceding sentence shall be void ab initio. The Trustee and a Majority of Bondholders
each shall be deemed to be a third-party beneficiary of this Section 9.01 for as long as
any Project Sponsor Conduit Loan Bonds remain outstanding. Upon such conditions
being met and subject to satisfaction of the provisions of the Redevelopment Agreement,
the Borough will consent to a transfer of the Phase I Redevelopment Project by the
Redeveloper Urban Renewal Entity to another urban renewal entity organized under the
Long Tenn Tax Law, their successors and assigns, and the transfer of this Financial
- Agreement to such urban renewal entity, all owning no other project at the time of the
transfer. Further, the Borough will consent that upon assumption by the transferee urban
renewal entity of the Redeveloper Urban Renewal Entity's obligations, to the extent those
obligations relate to the portion of the Phase I Project Site acquired by the transferee
under this Agreement, the tax exemption for the Phase I Redevelopment Project shall
continue and inure to the transferee urban renewal entity and its respective successors or
assIgns.
SECTION 9.02 Operation of Phase I Redevelopment Proiect
The Phase I Redevelopment Project shall be operated in accordance with
applicable laws and the Redevelopment Agreement.
SECTION 9.03 Subordination of Fee Title
It is expressly understood and agreed that the Redeveloper Urban Renewal Entity
has the right, subordinate to the lien of the Annual Service Charges, and to the rights of
the Borough, the Agency and the Trustee hereunder, to encumber the fee title to the
Phase I Project Site and may so encumber the Redeveloper Urban Renewal Entity's
interest in the Phase I Redevelopment Project, including without limitation, the Phase I
Project Site and the Phase I Redevelopment Project Improvements, and that any such
subordinate encumbrance shall not be deemed to be a violation ofthis Agreement.
-
18
ARTICLE X
W AIYER
- SECTION 10.01 Waiver
Nothing contained in this Financial Agreement or otherwise shall constitute a
waiver or relinquishment by the Borough, Redeveloper Urban Renewal Entity, the
Agency or the Trustee of any rights and remedies provided by law except for the express
waiver herein of certain rights of acceleration and certain rights to terminate this
Financial Agreement and tax exemption for violation of any of the conditions provided
herein. Nothing herein shall be deemed to limit any right of recovery that the Borough,
Redeveloper Urban Renewal Entity, the Agency or the Trustee has under law, in equity,
or under any provision of this Financial Agreement.
ARTICLE XI
NOTICE
SECTION 11.01 Notice
Any notice required hereunder to be sent by any party to another party shall be
sent to all other parties hereto simultaneously by certified or registered mail, return
receipt requested, as follows:
(a) When sent to the Redcveloper Urban Renewal Entity it shall be
addressed as follows:
Titan-PDC Carteret Urban Renewal, LLC
c/o Panattoni Development Company
180 Raritan Center Parkway, First Floor
- Edison, New Jersey 08837
With copies to:
Anne S. Babineau, Esq.
Wilentz, Goldman & Spitzer, P.A.
90 Woodbridge Center Drive
Woodbridge, NJ 07095
Peter Yon Elton, Esq.
Panattoni Law Firm
8413 Jackson Road, Suite C
Sacramento, CA 95826
(b) When sent to the Borough, it shall be addressed to the Borough
Clerk, Borough Hall, 61 Cooke Avenue, Carteret, New Jersey 07008, with copies sent to
the Borough Attorney, Tax Collector, Tax Assessor, and the Chief Financial Officer
unless prior to the giving of notice the Borough shall have notified the Redeveloper
Urban Renewal Entity otherwise. The notice to the Borough shall identify the subject
with the tax account numbers of the tax parcels comprising the Phase I Project Site.
Copies shall also be sent to:
-
19
Robert 1. Bergen, Esq.
Gill & Chamas
P.O. Box 760
- 655 Florida Grove Road
Woodbridge, NJ 07095
Stephen B. Pearlman, Esq.
DeCotiis, FitzPatrick, Cole & Wisler, LLP
500 Frank W. Burr Boulevard
Teaneck, NJ 07666
(c) The Agency shall receive copies of all notices given hereunder,
which shall be addressed as follows:
Mr. Eric Chubenko, Executive Director
The Carteret Redevelopment Agency
96 Cooke A venue
Carteret, New Jersey 07008
With copy to:
John V. Cavaliere, Esq.
McManimon & Scotland, LLC
One lUverfront Plaza
4th Floor
- Newark, NJ 0710290
(d) The Trustee shall receive copies of all notices given hereunder,
which shall be addressed as follows:
(e) Bank of America, as mortgagee of the Phase I Project Site, shall
receive copies of all notices given hereunder, which shall be addressed as follows:
-
20
ARTICLE XII
COMPLIANCE
- SECTION 12.01 Statutes and Ordinances
The Redeveloper Urban Renewal Entity hereby agrees at all times prior to the
expiration or other termination of this Financial Agreement to remain bound by the
provisions of Federal and State law and any lawful ordinances and resolutions of the
Borough, including, but not limited to, the Redevelopment Law, Redevelopment Bond
Law and the Long Term Tax Law. The Redeveloper Urban Renewal Entity's failure to
comply with such statutes or ordinances shall constitute a violation and breach of this
Financial Agreement.
ARTICLE XIII
CONSTRUCTION
SECTION 13.01 Construction
This Financial Agreement shall be construed and enforced in accordance with the
laws of the State of New Jersey, and without regard to or aid or any presumption or other
rule requiring construction against the party drawing or causing this Agreement to be
drawn since counsel for both the Redeveloper Urban Renewal Entity and the Borough
have combined in their review and approval of same.
ARTICLE XIV
INDEMNIFICATION
SECTION 14.01 Indemnification
- It is understood and agreed that in the event the Borough shall be named as party
defendant in any action brought against the Redeveloper Urban Renewal Entity by reason
of any breach, default or a violation of any of the provisions of this Agreement and/or the
provisions of the Long Term Tax Law or the Redevelopment Bond Law by Redeveloper
Urban Renewal Entity, the Redeveloper Urban Renewal Entity shall indemnify and hold
the Borough harmless from and against all liability, losses, damages, demands, costs,
claims, actions or expenses (including attorneys' fees and expenses) of every kind,
character and nature arising out of or resulting trom the action or inaction or the
Redeveloper Urban Renewal Entity or the Redeveloper and/or by reason of any breach,
default or a violation of any of the provisions of this Agreement and/or the provisions of
the Redevelopment Law, Redevelopment Bond Law and the Long Tenn Tax Law by
virtue of the action or inaction of the Redeveloper Urban Renewal Entity or Redeveloper,
except for any acts or omissions or misconduct by the Borough or any of its officers,
officials, employees or agents, and the Redeveloper Urban Renewal Entity shall defend
the suit at its own expense. However, the Borough maintains the right to intervene as a
party thereto, to which intervention the Redeveloper Urban Renewal Entity hereby
consents, the expense thereof to be borne by the Redeveloper Urban Renewal Entity.
-
21
ARTICLE XV
DEFAULT
- SECTION 15.01 Default
Default shall be deemed to have occurred if the Redeveloper Urban Renewal
Entity fails to conform with the terms of this Agreement or to perform any obligation
imposed upon the Redeveloper Urban Renewal Entity by statute, ordinance or lawful
regulation.
SECTION 15.02 Cure Upon Default
Should the Redeveloper Urban Renewal Entity be in default of any obligation
under this Agreement, the Borough, the Agency or the Trustee shall notify the
Redeveloper Urban Renewal Entity, the Guarantor and any mortgagee of the Redeveloper
Urban Renewal Entity in writing of said default. Said notice shall set forth with
particularity the basis of said default. Except as otherwise limited by law, the
Redeveloper Urban Renewal Entity shall have thirty (30) days to cure any default (other
than a default in payment of any installment of the Annual Service Charge in which case
there shall be no cure period). Subsequent to the thirty (30) days, the Borough (or the
Trustee as its assignee and agent) shall have the right to proceed against the Phase I
Project Site pursuant to any and all applicable provisions of the law, but subject to the
aforementioned limitations on acceleration, including as set forth in Section 5.02 and
6.01 hereof. No default hereunder by the Redeveloper Urban Renewal Entity shall
terminate the long term tax exemption described herein and its obligation to make
Pledged and Unpledged Annual Service Charges, which shall continue in effect for the
duration set forth in Article IV hereof, as applicable.
- SECTION 15.03 Remedies Upon Default Cumulative; No Waiver
Subject to the provisions of Section 6.01 hereof and the other terms and
conditions of this Agreement, all of the remedies provided in this Agreement to the
Borough, the Agency and the Trustee, and all rights and remedies granted to them by law
and equity shall be cumulative and concurrent and no determination of the invalidity of
any provision of this Agreement shall deprive the Borough, the Agency or the Trustee of
any of their remedies or actions against the Redeveloper Urban Renewal Entity because
of the Redeveloper Urban Renewal Entity's failure to pay Land Taxes, the Annual
Service Charge and/or any applicable water and sewer charges and interest payments.
This right shall only apply to arrearages that are due and owing at the time, and the
bringing of any action for Land Taxes, Annual Service Charges or other charges, or for
breach of covenant or the resort of any other remedy herein provided for the recovery of
Land Taxes, Annual Service Charges or other charges shall not be construed as a waiver
of the right to proceed with In Rem Foreclosure action consistent with the terms and
provisions of this Agreement.
SECTION 15.04 Bondholder Remedies
Bondholders shall have the right to direct action of the Trustee and take action on
behalf of themselves and/or the Trustee, to the same extent as their rights under the Trust
Indenture.
-
22
ARTICLE XVI
MISCELLANEOUS
- SECTION 16.01 Conflict
The parties agree that in the event of a conflict between the Exemption
Application and this Financial Agreement, the language in this Financial Agreement shall
govern and prevail.
SECTION 16.02 Oral Representations
There have been no oral representations made by either of the parties hereto
which are not contained in lhis Financial Agreement. This Financial Agreement, the
Ordinance and the Exemption Application constitute the entire agreement between the
parties and there shall be no modifications thereto, other than as pennitted in Section 4.02
and 4.04(b) hereof, other than by a written instrument executed by the parties hereto and
delivered to each of them.
SECTION 16.03 Entire Document
All conditions in the Ordinance are incorporated in this Agreement and made a
part hereof.
SECTION 16.04 Good Faith
In their dealings with each other, the parties agree that they shall act in good faith.
SECTION 16.05 Recording
This entire Agreement and the Ordinance will be filed and recorded with the
- Middlesex County Clerk by the Borough, at the Redeveloper Urban Renewal Entity's
expense, such that this Agreement and the Ordinance shall be reflected upon the land
records of the County of Middlesex as a municipal lien upon and a covenant running with
each and every parcel of land constituting the Phase I Project Site.
SECTION 16.06 Municipal Services
The Redeveloper Urban Renewal Entity shall make payments for municipal
services, including water and sewer charges and any services that create a lien on a parity
with or superior to the lien for the Land Taxes and Annual Service Charges, as required
by law. Nothing herein is intended to release the Redeveloper Urban Renewal Entity
from its obligation to make such payments.
SECTION 16.07 Financing Matters
The financial infonnation required by the final paragraph of N.J.S.A. 40A:20-9
are set forth in the Exemption Application.
SECTION 16.08 Municipal Detenninations
The Borough hereby finds and detennines that this Agreement is to the direct
benefit of the health, welfare and financial well-being of the Borough because it allows
for redevelopment of a fonner landfill site into productive, useful and job-creating
property, and further:
-'
23
(a) The costs associated with the tax exemption granted herein are
minor compared to the total Phase I Redevelopment Project cost of$ and the
benefit created by approximately new jobs with an approximate $ annual
-
payroll.
(b) Without the tax exemption granted herein it is highly unlikely the
Redeveloper Urban Renewal Entity would have proceeded with the Phase I
Redevelopment Project, as a source of debt service for the Project Sponsor Conduit Loan
Bonds is not otherwise available.
(c) The tax exemption granted herein will assist the Borough in
satisfying its obligations under the tenns of the Consent Order with respect to the
Landfill.
SECTION 16.09 Filing with Local Government Services
In accordance with NJ.S.A. 40A:20-l2, upon execution of this Agreement, the
Borough shall cause this Agreement and the Ordinance to be filed with the Director of
the Division of Local Government Services in the Department of Community Affairs of
the State of New Jersey.
SECTION 16.10 Counterparts
This Agreement may be simultaneously executed in counterparts, each of which
shall be an original and all of which shall constitute but one and the same instrument.
SECTION 16.11 Amendments
This Agreement may not be amended, changed, modified, altered or tenninated
- without the written consent ofthe parties hereto.
-
24
ARTICLE I
- EXHIBITS AND SCHEDULES
Schedule 1 Pledged Annual Service Charge Schedule
Schedule 2 Borough Portion of Un pledged Annual Service Charge Schedule
Schedule 3 Annual Service Charge as Percentage of Total Phase I
Redevelopment Project Costs
Exhibit A Exemption Application
Exhibit B Borough Council Ordinance
Exhibit C Fonnation Documents of Urban Renewal Entity
Exhibit D Legal Description of the Phase I Project Site
-
-
25
IN WITNESS WHEREOF, the parties have caused these presents to be executed
as ofthe day and year first above written.
- TITAN-PDC CARTERET URBAN RENEWAL,
LLC, a DeJaware limited liability company
By: Carteret PDC, LLC, a Delaware
Limited Liability Company,
Managing Member
By: Hagan Investments, LLC, a Colorado
Limited Liability Company,
Managing Member
By:
David Hagan
Sole Member
ATTEST: THE BOROUGH OF CARTERET
By:
- Name: Kathleen M. Barney Name: DanieJ J. Reiman
Title: Borough Clerk Title: Mayor
-
26
Schedule 1
Debt Service Portion of Pledged Annual Service Charge
-
-
-
Schedule 2
Schedule of Borough Portion of Un pledged Service Charge
-
Year 1-5 -- $ 107,623.96 annually, but which shall be paid in equal
quarterly installments equal to one-fourth of such amount
Year 6-10 -- $ 143,498.60 annually, but which shall be paid in equal
quarterly installments equal to one-fourth of such amount
Year 11-15 -- $ 179,373.24 annually, but which shall be paid in equal
quarterly installments equal to one-fourth of such amount
Year 16-20 -- $ 215,247.88 annually, but which shall be paid in equal
quarterly installments equal to one-fourth of such amount
Year 21-end(if applicab1e*) -- shall equal the amount that, if not for the
exemption from taxation as provided for in the Financial Agreement, would otherwise be
assessed against the Phase I Redevelopment Project Improvements in accordance with
the general law applicable to non-exempt property in the Borough in these respective
years.
-
* The Financial Agreement shall remain in effect until the earlier of (i)
thirty-five (35) years from the date of execution hereof, (ii) thirty (30) years from the
Phase I Redevelopment Project Completion Date or (iii) the date on which no Project
Sponsor Conduit Loan Bonds remain "outstanding" within the meaning of the Trust
Indenture. At the expiration of the term of the Financial Agreement the tax exemption
for the Phase I Redevelopment Project shall expire and the Phase I Redevelopment
Project Improvements shall thereafter be assessed and taxed according to the general law
applicable to other non-exempt property in the Borough. It is anticipated that the Project
Sponsor Conduit Loan Bonds shall be retired, and no longer deemed "outstanding"
within the meaning of the Trust Indenture, prior to Year 21.
-
Schedule 3
Annual Service Charge as Percentage of Total Phase I Redevelopment Project
- Costs
For each of the following five year periods through year 20, a percentage is
developed using the following fonnula:
Estimated* Pledged Annual Service Charges plus (+) estimated*
Unpledged Annual Service Charges, divided by (~) Total Project Costs
For the years 21 through the tenn of the Financial Agreement, a percentage is
developed by taking the estimated* Unpledged Annual Service Charge divided by (-;-)
Total Project Costs
Years 1-5 %
~
Years 6-10 ~ %
Years 11-15 %
~
Years 16-20 %
~
-
Years 2l-end %
~
* Because Annual Service Charges are calculated pursuant to a fonnula, which
fonnula includes the value of future Land Taxes, the Pledged Annual Service Charges
and Unpledged Annual Services Charges used in the above calculation are based, in part,
upon estimate of the value of future Land Taxes.
-
Exhibit A
Exemption Application
~
-
-
Exhibit B
Borough Council Ordinance
-
-
-
Exhibit C
Formation Documents of Urban Renewal Entitv
-
-
-
Exhibit D
Le!!al Description of the Phase I Proiect Site
Block Lot
11.01 17.01
11.01 17.02
11.01 18
11.01 19
11.01 20
11.01 21
11.01 23.01
11.01 23.02
11.01 24
11.01 25.01
- 11.01 25.02
11.01 26
11.01 29.01
11.01 29.02
11.01 30
11.01 31.01
11.01 31.02
11.01 33.01
11.01 33.02
11.01 34.01
11.01 34.02
-
11.01 35
11.01 36
11.01 37
11.01 38
11.01 39
11.01 40
11.01 41
11.01 42
11.01 43
11.01 44
11.01 45
11.01 46
11.01 47
-
11.01 49
11.01 50
11.01 52
11.01 58
11.01 60
lJIll1all1ed Street
Driftway
Rail Road Crossing
-
STATE OF )
)
~'.-
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
,2006, by TITAN-PDC CARTERET URBAN RENEWAL, LLC, a
Delaware limited liability company, by its
, on behalf of the company.
Notary Public
Commission Expiration:
-
-