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HomeMy Public PortalAboutOrd. 07-09 No. 07-09 @rornctn.c.e of t4e tNorong4 of Cllctrterd1 ~ ~ 3J ~ 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-iVIUNICIPAL LIENS HEREAFTER RECORDED. ORDINANCE APPROVING THE EXECUTION OF FINANCIAL AGREEMENTS WITH GATEWAY AT CARTERET URBAN RENEWAL, LLC AND CAMELOT AT CARTERET URBAN RENEWAL, LLC AND OTHER APPLICABLE DOCUMENTS RELATED TO THE ISSUANCE BY THE CARTERET REDEVELOPMENT AGENCY OF REDEVELOPMENT AREA BONDS (NON- RECOURSE TO THE FULL FAITH AND CREDIT OF THE BOROUGH) AND DETERi\HNING VARIOUS OTHER MATTERS IN CONNECTION THEREWITH. WHEREAS, the Local Redevelopment and Housing Law, NJ.S.A. 40A: 12A-] ef seq. (the (<Act"), as amended and supplemented, provides a process for municipalities to participate in the redevelopment and improvement of areas in need of redevelopment; and WHEREAS, pursnant to the Act, the Borough of Carteret, in the County of Middlesex, New Jersey (the "Borough") designated certain areas of the Borough, constituting Block 243, Lots 1-5, Bloek 252, Lots 1-5, Block 253, Lots 1-7, Block 254, Lots 1,2,3.0],3.02,4.01,6-10 and 12-]4, Block 260, Lots 7-]5, Block 261, Lots 1-8, Block 272, Lots ]-6, 6.01 and 7-]6, Block 273, Lots 10-12 and Block 292, Lots 1-3, all as identified on the official tax maps of the Borough, as an "area in need of redevelopment" (the "Redevelopment Area"); and WHEREAS, on Febnlary 6, 2003 the Governing Body adopted Ordinance No. 03-02, approving and adopting a redevelopment plan, entitled "The Lower Roosevelt Avenue Redevelopment Plan", superseding the provisions of the Borough Zoning Ordinance for the Redevelopment Area (the "Redevelopment Plan"); and \VHEREAS, the Redevelopment Plan provides for, among other things, the construction of mixed use improvements, consisting of for sale and rental residential components and a retail component on the Redevelopment Area; and "'HEREAS, on February 18, 2003, the Borough adopted Resolution number 03- 113, designating Kaplan at Carteret, L.L.C. (the "Redevelopertt, and predecessor in interest to the Entities (as defined herein)) as the redeveloper of the Redevelopment Area and authorizing the negotiation of a redevelopment agreement with the Redeveloper; and 'VHEREAS, the Redeveloper has agreed to implement the Redevelopment Plan and develop, design, finance and construct a mixed-use project including approximately forty-eight (48) townhouses (the "Townhouse Component"), up to one hundred thirty- eight (138) condominiums (the "Condominium Component"), approximately two hundred eight (208) rental apartments (the "Rental Component") and approximately forty-two thousand nine hundred (42,900) square feet of retail spaee (the "Retail Component" and, together with the Townhouse Component, the Rental Component and the Retail Component, the "Project") and in connection therewith, the Redeveloper has agreed to devote substantial cash assets and borrowed funds to the completion of the Project; and NO. 07-09 PAGE~ 'VHEREAS, in order to implement the development, financing, construction, operation and management of the Project, the Borough entered into a redevelopment agreement with the Redeveloper dated Febmary 25, 2004, as amended by the First Amendment to the Redevelopment Agreement, dated Jnly 13, 2004, the Second Amendment to the Redevelopment Agreement, dated February ]6, 2005 and the Third Amendment to the Redevelopment Agreement, dated February 16,2005 (collectively, the "Redevelopment Agreement"), which Redevelopment Agreement specifies the rights and responsibilities of the Borough and the Redeveloper with respect to certain aspects of the Project; and WHEREAS, by Resolntion No. 05-48, adopted by the Borough Conncil on January 27, 2005, pursuant to Section 4 of the Act (NJ.S.A. 40A: 12A-4), the Borongb designated the Carteret Redevelopment Agency (the "Agency") to act as the "Redevelopment Entity" (as such tern] is defined in the Act at NJ.S.A. 40A:12A-3) for the Redevelopment Area to exercise the powers contained in the Act to facilitate the developm~nt ~~l~~~eV~?pment o~the Redevelopt1]cnt Area; an~ "'HEREAS, despite the Redeveloper's investment of equity and borrowed funds, such amounts are insufficient to pay for all of the costs associated with the development and construction of the Project; and WHEREAS, pursuant to the Redevelopment Agreement, the Borough and the Redeveloper are to share pre*development costs, including, but not limited to the cost of acquiring the Redevelopment Area, Relocation Costs, costs of demolishing existing structures on the Redevelopment Area and costs incurred in connection with environmental remediation of the Redevelopment Area in accordance with New Jersey Department of EnvirOlilllental Protection standards (collectively, the "Shared Pre- Development Costs"); and \VHEREAS, pursuant to the Redevelopment Agreement, the Borough will reimburse the Redeveloper for one hundred percent (100%) of documented Shared Pre- Development Costs in excess of$II,400,000 bnt less than $13,900,000, and fifty percent (50%) of documented Shared Pre-Development Costs incurred in exeess of $13,900,000 (collectively, the "Borough Pre-Development Cost Contribution"); and \VlIEREAS, in order to implement the development, financing, construction, operation and management of the Project, on Febntary 10, 2006, the Redeveloper fanned two urban renewal entities under the provisions of the Long Term Tax Exemption Law, NJ.S.A. 40A:20-1 el seq. (the "Long Term Tax Exemption Law") and the New Jersey Limited Liability Company Act, N.J.S.A. 42:2B-l el seq., known as Gateway at Carteret Urban Renewal, LLC ("Gateway") and Camelot at Carteret Urban Renewal, LLC ("Camelot" and, together with Gateway, the "Entities"); and 'VHEREAS, Gateway will be responsible for implementing the development, financing, constmction, operation and management of the Townhouse Component and the Condominium Component and Camelot will be responsible for implementing the development, financing, construction, operation and management of the Rental Component and the Retail Component; and \VHEREAS, the provisions of the Long Ternl Tax Exemption Law and such other statutes as may be sources of relevant authority, authorize the Borough to accept, in : lieu of real property taxes, annual service charges paid by the Entities to the Borough as set forth in such laws ("Anllual Service Charges"); and \VHEREAS, in accordance with the provisiolls of the Long Term Tax Exemption Law, on April 12, 2007, the Entities filed applications with the Borough seeking tax exemptions in connection with the Project (the "Applications"); ane} \VHEREAS, the Borough is agreeable to granting such tax exemptions to the Entities and, pursuant to the Long Term Tax Exemption Law and such other statutes as may be sources of relevant authority, the Borough desires to enter into Financial Agreements with the Entities to memorialize the temlS and conditions by which the Entities will pay the Annual Service Charges; and NO. ---47.-09- PAGE~ "'HEREAS, to assist the Borough in fInancing the Borough Pre-Development Cost Contribution and certain other Borough costs as set forth in the Redevelopment Agreement, the Redevelopment Agency, as redevelopment entity, will issue bonds (the "Bonds") pursuant to the Redevelopment Area Bond Financing Law, N.J.S.A. 40A:12- 64, et seq., (the "Bond Financing Law"); and 'VHEREAS, pursuant to the Bond Financing Law and such other statutes as may be sources of relevant authority, if any, the Borough intends to pledge, to the extent required, the Annual Service Charges paid to the Borough by the Entity for debt service on the Bonds, orovided. however, that five percent (5%) of the Annual Service Charges shall not be subject to such pledge in accordance with N.J.S.A. 40A:20-12 (the "County Share"); and WHEREAS, Borough and the Entities have agreed tbat any portion of the Annual Service Charges paid by the Entities to the Borough in excess of the amount needed to pay the County Share and Debt Service on the Bonds shall be returned to the Borough and retained and used by the Borough for any lawful purpose; and "'1IEREAS, the Borough made the following findings: A. Relative Benefits of the Project: The Project will provide new residential units in the Borough. B. Assessment of the importance of the Tax Exemption in obtaining development of the Project and influencing the locational decisions of probable occupants: i. Exemption pennits private development of residential units in the Redevelopment Area. ii. Redevelopment of the Area will cause the creation of construction employment opportunities for local residents. 'YHEREAS, the Entities are qualified to do business under the provisions of the Long Ternl Tax Exemp~ion Law and have submitted to the Mayor tax exemption applications which are on file with the Borough Clerk (the "Applications"), requesting tax exemptions for the Project; and 'VHEREAS, the Entities also submitted financial agreements to the Mayor, which are on file with the Borough Clerk (the "Financial Agreements") (capitalized tenns not defined herein shall have the meaning assigned to such tenns in the Financial Agreements); and WHEREAS, the Mayor has snbmitted the Applications and Financial Agreements to the Borough Council with his reconunendation of approval (the "Mayor's Recommendation"), a copy of which is on file with the Borough Clerk; and 'YHEREAS, the Financial Agreements contemplate that the Annual Service Charges will be dedicated to debt service on the Bonds pursuant to the Bond Financing Law; and "'HEREAS, in order to set forth the terms and conditions under which the Entities and the Borough (the "Parties") shall carry out their respective obligations with respect to payment of the Annual Service Charges by the Entities, in lieu of real property taxes, in connection with the Project and with the issuance of the Bonds by the Agency, the Parties have detemlined to execute these Financial Agreements; and WHEREAS, tbe Bond Financing Law requires the approval of the State Local Finance Board prior to the issuance of financial instruments, such as the Bonds, where such financial inst11lments are to be secured by payments in lieu of taxes such as the Arumal Service Charges; and NO. 07~09 PAGE~ \YHEREAS, the Borough Council has also detennined to authorize the execution of certain agreements, including without limitation, the Financial Agreements, in connection with the exemption of the Project from taxation and the financing described herein; and WHEREAS, the Borongh finds that the Project will result in the redevelopment of the Borough and will revitalize the Borough and bring new growth because it will (a) provide additional housing, retail and community space; (b) increase mobility by acting as a draw for residents and renters from the surrounding communities; (c) assist in the redevelopment of the Borough by providing modern and efficient retail, living and amenity space; and Cd) improve the quality ofHfc by providing greater retail and housing options for the citizens ofthe State; and 'VIIEREAS, the Borough believes that (a) it is in the public interest to undertake the Project; (b) the Project is for the health, welfare, convenience or bettemlent of the inhabitants of the Borough; and (c) the Project is an efficient and feasible means of providing services for the needs of the inhabitants of the Borough and will not create an undue financial burden to be placed upon the Borough. NOW, THEREFORE, BE IT ORDAINED BY THE DOROUGH COUNCIL OF THE DOROUGH OF CARTERET, NEW JERSEY AS FOLLOWS: 1. The Applications are hereby approved in accordance with the Mayor's Recommendation. 2. Exemption from taxation is hereby granted to the Entities for their respective portions of the Project for the term set forth in the Financial Agreements, but in no event shall the tax exemptions exceed the earlier of (i) thirty- five (35) years from the date of execution of the respective Financial Agreements or (ii) to the extent pelmitted by N.J.S.A. 40A:20-13, thirty (30) years from the commencement of the Annual Service Charges and only so long as the Entities remain subject to and comply with the Financial Agreements and the Long Teml Tax Exemption Law and upon the further condition that neither Entity files a petition oftnx appeal for the premises on which any portion of the Project is to be located, excepting any appeal filed prior to the adoption of this Ordinance. 3. The Mayor is hereby authorized to execute, on the Borough1s behalf, the Financial Agreements and any other related documents substantially in the forms on file with the Borough Clerk, subject to such necessary additions, deletions, modifications or alterations deemed necessary by the Mayor in consultation with the Borough's general counsel and/or bond counseL 4. Executed copies of the Financial Agreements shall be certified by the Borough Clerk and filed with the Office of the Borough Clerk. 5. The Project, when completed, shall confoml with all Federal and State law and ordinances and regulations of the Borough relating to its constmction and use. 6. The Entities shall, in the operation of their respective portions of the Project, comply with all laws so that no person shall, because of race, religious principles, color, national origin or ancestry, be subject to any discrimination. 7. The Entities shall pay the Annual Service Charges as set forth in the Financial Agreements. 8. The following occurrences are express conditions to the grant of these tax exemptions to be perfomlcd by the Entities: (a) The Entities shall pay full real estate taxes on the land for the portions of the Redevelopment Area on which the Retail Improvements will be constructed. NQ. 07-09 PAGE~ (b) The Entities shall not, without prior consent of the Borough as set forth in the Financial Agreements, convey, mortgage or transfer all Of any part of their respective portions of the Project which would sever, disCOlmect Of divide the improvements being tax exempted under the Financial Agreements from the land underlying the exempted improvements. (c) Camelot shall be deemed to impliedly agree that if it operates, controls or manages the Rental Component of the Project, it will, in good faith, assist the Borough in its goal of having all new jobs arising out of the businesses conducted on the Redevelopment Area after substantial completion thereof offered to B:orotigh residents first. (d) Camelot shall, concomitantly with the submission of the auditors' reports reqnired by NJ.S.A. 40A:20-9(d), where applieable, attaeh employment reports under oath, with particl!lars, sJ1!!:il1g the manper .andthe ext~nt ttL WhICh It has complIed with lO(cYabove. The employment reports, like the auditors' reports, shall be filed with both the Borough's Chief Financial Officer and the Borough Clerk. (e) Each Entity shall pay any outstanding real estate taxes and all outstanding water and sewer charges on the portions of the Redevelopment Area it owns within one year of the adoption of this ordinance. (f) The Entities shall complete their respective components of the Project as set forth in the Applications. 9. The Mayor is hereby authorized to take all necessary and appropriate steps to assist the Agency in its application to the State Local Finance Board for approval to issue the Bonds for the funding ofthe Borough Pre-Development Cost Contribution. 10. After receipt of the approval from the State Local Finance Board for the Agency financing described herein, the Mayor is hereby authorized to take all necessary and appropriate steps for the Borough to assist the Agency to cause the issuance of the Bonds, including the pledge or assigrunent of the Annual Service Charges to secure payment 011 the Bonds and the execution of the Financial Agreements and any other documents necessary to facilitate such financing. 11. The Mayor is hereby authorized to draft, amend, modify or make such necessary changes to the Applications, the Mayor's Recommendation, the Financial Agreements or any other necessary documents to effectuate the issuance of the Bonds by the Agency that will be secured by the Aromal Service Charges, provided that any and all such documents are in compliance with the provisions of the Bond Final1cing Law and the terms of the Tmst Indenture governing the Bonds to be issued. . ~ - 12.- - fIJis ordinance shall take effect twenty (20) days after the first publlcatlOll thereof after fmal adoption as provided by the Bond Financing Law. DO NOT lISE SPACE BELOW THIS LINE RECORD OF COUNCIL VOTE COUNCILMAN YES NO NV A.B. COUNCILMAN YES NO NV A.B. BEllINO X X DIAZ X RIDS X KRUM X SITARZ X x ~ Indicate Vote AS - Absent NV - Not Voting XOR - Indicates Vote to Overrule Veto ON ! I CJ- Affidavit of Publication Publisher's Fee $54.56 } SS. State of New Jersey Middlesex County Personally appeared Catherine Williams Ofthe Home News Tribune, a newspaper printed in Freehold, New Jersey and published in NEPTUNE, in said County and State, and of general circulation in said county, who being duly sworn, deposeth and saith that the adveliisement of which the annexed is a true copy, has been published in the said newspaper 1 times, once in each issue as follows: 7/05/07 " ments In lieu of taxes to the Borough. Further, the ~ft:e~~~t~~~f;~\~ell~~f~x~'fo'~ W~~~~~t of debt selVlce on bonds to be issued by the charge, s Office, to 4:00 and Fri- T lng of ~~bln~. ereel on meeting 011 JUljl n>nrIa~t, ~~wl~~e~U~I€I~if.ijch ~, is lnterested WIll be given KATHLEEN M. BARNEY, MMC MunIcIpal Clerk ($54.56) 452761 AD. 2007 ~mluvm~ Sworn and subscribed before me, this 5 day of July, 2007 o 41" ()7-dCJ AFFIDAVIT OF PUBLICATION The following is a true copy of an Ordinance or Resolution of the Borough of Carteret that has appeared in the Home News Tribune, a newspaper which is printed in Freehold, New Jersey and published in Neptune, in said County and State and of general circulation in said county. one (1) times, once in each issue as follows: July 5, 2007 ~~"'../ 6. /?-t-.~-' Notary Public of New L~rfJ1~illVERA Kath~e~n Barney, RMCI NOTARY PUBLIC OF NEW JERSEY MUnicipal Clerk MY COMMISSION EXPIRES MAY 2, 2011 Sworn and subscribed before me this 9M day oU ~ I .). co', / 0- b >ytCj