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No, 09-160 DateofAdoptiop ,July 9, 2009
RESOLUTION OF THE BOROUGH OF CARTERET
AUTHORIZING THE EXECUTION AND DELIVERY OF A
MEMORANDUM OF AGREEMENT WITH KINDER MORGAN
LIQUIDS TERMINAL, LLC
'WHEREAS, the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-l et
seq., as amended and supplemented (the "Redevelopment Law") provides a process for
municipalities to participate in the redevelopment and improvement of areas in nedi of
redevelopment; and
WHEREAS, on October 19, .2007, the Borough and Kinder Morgan Liquids
Terminals, LLC, a limited liability company of the State (the 'ICompany"), entered in that
certain agreement (the "Pre.Development Agreement") with respect to, among others
things, the Borough's costs, in connection with possible redevelopment of certain
properties owned by the Company; and
'WHEREAS, by Resolution No. 07~301, duly adopted on December 6, 2007, as
amended by Resolution No. 08-46, the Mayor and Council of the Borough of Carteret
(the "Borou~h Council") authorized and directed the Planning Board of the Borough of
Carteret (the "Planning Board") to undertake a preliminary investigation to determine
whether certain properties set forth therein (the "Kinder Morgan Improvement Area")
met the criteria set forth in the Redevelopment Law as an "area in need of
redevelopment" as defmed therein, and
\VHEREAS, after providing requisite notice, the Planning Board held a hearing
on February 27, 2008 to review the results of the preliminary investigation and to solicit
public comments on whether the Planning Board should recommend to the Borough
Council that the Kinder Morgan Improvement Area be determined to be "an area in need
of redevelopment"; and
,
"
WHEREAS, at the public hearing, the Planning Board considered the testimony
of and exhibits furnished by a licensed professional planner from Beacon Planning and
Consulting Services, LLC ("BPCS"), the author of the Redevelopment Area Assessment
Report for the Kinder Morgan Improvement Area (the "Assessment Report") and
afforded all interested members of the public an opportunity to make, inquire into, and
give testimony concerning the boundaries of the Kinder Morgan Improvement Area and
whether said area should be determined to be "an area in need of redevelopment"; and
WHEREAS, the Planning Board, by a Resolution of Findings and Conclusions
dated March 26, 2008 recommended to the Borough Council, pursuant to Section 6 of the
Redevelopment Law, that the Kinder Morgan'Improvement Area be determined to be "an
area in need of redevelopment", finding that the properties constituting the Kinder
Morgan Improvement Area have met one or more of the statutory criteria in the
Redevelopment Law; and
'WHEREAS, on April 10, 2008, the Borough Council adopted resol~tion ~umber
08-97 determining that the Kinder Morgan Improvement Area constitutes an "area in
need of redevelopment" under the Redevelopment Law (the "Redevelopment Area"); and
'~REAS, BCPS prepared a redevelopment plan for the Redevelopment Area,
dated Apnl 2008, for further consideration by the Planning Board (the "Draft
Redevelopment Plan"); and
, WHEREAS, on May 28, 2008, the Planning Board adopted a resolution of
findmgs and conclusIons endorsing and recommending final adoption of the Draft
Redevelopment Plan; and .
ordinan~of.~~4 ~n ~:~~mbe~ 25, 2,008, the .Borough Council finally adopted
(the "Redevelopment PI:"); an~ an adoptmg the Kinder Morgan Redevelopment Plan
WHEREAS the Borough has b' " ,
the redevelopment of the Redevelopmen:::~; :~ottatIons WIth the Company regarding
NO, 09-160
PAOEl 2 of 2
'VHEREAS, the Parties have determined to execute an agreement that
summarizes certain terms related to the redevelopment of the Redevelopment Area (the
"Memorandum of Agreement", a copy of which is attached hereto as Exhibit A in
substantially final form).
NOW, THEREFORE, BE IT RESOLVED as follows:
Section 1. The Memorandum of Agreement is hereby authorized to be
executed and delivered on behalf of the Borough by either the Mayor, Chief Financial
Officer or Director of Law, in substantially the form attached hereto as Exhibit A. with
such changes as the Mayor, Chief Financial Officer or Director of Law (each an
"Authorized Officer"), in their respective sole discretion, after consultation with such
counsel and any advisors to the Borough (collectively, the "Borough Consultants"), as
such Authorized Officer deems necessary, desirable or convenient in such Authorized
Officer's sole discretion. All actions of the Authorized Officers and the Borough
Consultants taken prior to the date of adoption hereof are hereby ratified and approved.
Section 2. The Borough Clerk is hereby authorized and directed, upon the
execution of the Memorandwn of Agreement in accordance'with the terms of Section I
hereof, to attest to the Authorized Officer's execution of the Memorandwn of Agreement
and is hereby further authorized and directed to thereupon affix the seal of the Borough to
the Memorandum of Agreement.
Section 3. The Authorized Officers are each hereby further authorized to
perform any act, execute or acknowledge and deliver any other document, instrument or
certificate, including without limitation, a Redevelopment Agreement, which the
Authorized Officer, after consultation with the Borough Consultants, deems necessary,
desirable or convenient and the Borough Clerk is hereby further authorized and directed
to attest to such execution or acknowledgement and to affix the seal of the Borough to
any such document, instrument or certificate.
Section 4. Upon the Company's execution and delivery of a Redevelopment
Agreement, the Company shall be hereby deemed as the redeveloper of the
Redevelopment Area for all purposes of law.
Section 5.
prescribed by law.
This resolution shall take effect at the time and in the marmer
Section 6. Upon the adoption hereof, the Borough Clerk shall forward
certified copies of this resolution to Matthew C. Karrenberg, Esq., DeCotiis, FitzPatrick,
Cole & Wisler, LLP, Special Redevelopment Counsel to the Borough,
Adopted this 9th day of July, 2009
and certified as a true copy of -the
original on July 10, 2009
KA11ILEEN M. BARNEY, MMC
RECORD OF COUNCIL VOTE
COUNCILl\fAN YES NO NY A.B. COUNCILMAN YES NO NY A.B.
BEU.INO 'X KRUM X
COlDN X . NAPLES X
DIAZ X SITARZ mx
X.lndicaleVOte AS-Absent NV ~ Not Voting XOR . Indicates V01e to Overrule Veto
Adopted at a meeting of the Municipal Council ~~~ 2009
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EXHIBIT A
MEMORANDUM OF AGREEMENT
THIS MEMORANDUM OF AGREEMENT entered into on this _ day of
July, 2009 between the Borough of Carteret in the County of Middlesex, State of
New Jersey ("Borough") and Kinder Morgan Liquids Terminals, LLC
("Redeveloper"),
WHEREAS, on April 10, 2008, the Borough Council adopted a Resolution
designating an approximate 13.45 :t acre portion of the Redeveloper's property
as an area in need of redevelopment pursuant to N,J,SA 40A:12A-1 et seq, (the
"Redevelopment Area"); and
WHEREAS, on September 25, 2008, the Borough Council adopted an
Ordinance approving and establishing the Kinder Morgan Redevelopment Plan
("the Plan") for the Redevelopment Area; and
WHEREAS, the Plan envisions the development by the Redeveloper of
certain improvements described in the Plan and the execution by the parties of a
Redevelopment Agreement pursuant to N,J,SA 40A:12A-1, et seq" and a
Financial Agreement pursuant to N,J,SA 40A:20A-1 et seq,; and
WHEREAS, the Borough and the Redeveloper have been negotiating the
terms of a Redeveloper's Agreement and a Financial Agreement, and have
arrived at an understanding of the financial terms, subject to the approval the
Borough Council and the Redeveloper's Board of Directors, and the execution of
formal agreement(s) as required by law;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements of the parties hereto, as hereinafter set forth, the
parties do mutually consent and agree as follows:
1, The Borough shall approve the construction of seven (7) new tanks
in the Redevelopment Area consisting of 1,035,000 barrels of petroleum or other
liquid storage (the "Project Improvements"),
2, The Project Improvements shall be completed by June 30, 2011
subject to right of the redeveloper to request an extension of time from the
Borough for up to twelve (12) months, which extension shall not be unreasonably
refused,
3, The Redeveloper shall pay the Borough a Redevelopment Fee of
one million dollars ($1,000,000,00) at the time of the issuance of final site plan
approval by the Borough Planning Board,
4, The Redeveloper shall be responsible for planting trees and putting
down landscaping to screen and buffer for the Project Improvements based on
plans approved by the Borough at a cost not to exceed three hundred thousand
dollars ($300,000,00), The Borough will provide the Redeveloper with a right of
entry in order to install the landscaping on the Borough's property along Carteret
Industrial Road.
5, The Redeveloper agrees in principle that it will pay a prevailing
wage and use union labor, except when highly specialized work requires
recourse to nonunion and out-of-state labor because it is impractical to use
resident union labor. The Redeveloper also agrees in principle to enter into a
Project Labor Agreement ("PLAn) for the construction of the Project
Improvements, subject to negotiation of a formal agreement with the union at a
later date and the approval of the Redeveloper's risk management of the PLA
6, The Borough agrees that no other fees except any standard
statutory fees as permitted by law shall be paid by the Redeveloper.
7, The Borough and the Redeveloper shall enter into a Financial
Agreement providing the Redeveloper with a tax exemption pursuant to N.J,SA
40A:20A-1 et seq, in which the Redeveloper shall pay a service charge in lieu of
taxes (also known as a PILOT-payment in lieu of taxes) to the Borough of seven
hundred thousand dollars ($700,000,00) per year in full satisfaction of the
Redeveloper's property tax obligations to the Borough for the Project
Improvements. No other fees relating to the Financial Agreement shall be paid
by the Redeveloper except any standard statutory fees as permitted by law,
8, The service charge shall be paid by the Redeveloper at the time of
substantial completion of the Project Improvements, which is when the Certificate
of Occupancy or its equivalent is issued for the Project Improvements, In the
event that all of the Project Improvements are not completed simultaneously and
a Certificate of Occupancy or its equivalent is issued for one or more tanks, but
not for all of the Project Improvements, the service charge shall equal $0,68 per
year per barrel of capacity for each tank completed,
9, The term of the Financial Agreement shall be thirty (30) years from
the date of substantial completion of the Project Improvements,
10, After the initial five (5) year period (Le" in year six (6) of the
Financial Agreement) and after every five (5) year period thereafter (Le" years
eleven (11), sixteen (16), twenty-one (21) and twenty-six (26) of the Financial
Agreement), the service charge shall be increased by fifteen (15%) percent over
the amount of the service charge of the preceding five (5) year period,
11. Upon execution of this Memorandum of Agreement, the
Redeveloper agrees that it will replenish the escrow account, as established
pursuant to that certain Pre-Development Agreement, dated October 19, 2007,
by and between the Borough and the Redeveloper, in the amount of twenty-five
thousand dollars ($25,000.00) for the payment of Borough Costs, as such term is
defined in the Pre-Development Agreement, and shall at all times maintain a
balance in the escrow account of ten thousand dollars ($10,000,00) until such
time as the Project Improvements are completed,
12. The Borough and the Redeveloper acknowledge and understand
that this Memorandum of Agreement is merely a summary of certain financial
terms, The Borough and the Redeveloper shall enter into a Redevelopment
Agreement which shall more definitively set forth such financial terms and shall
include such other reasonable and acceptable terms and provisions not
otherwise set forth herein, including without limitation, terms and provisions
pertaining to environmental matters, construction of Project Improvements,
Project oversight, general development requirements, applications for
governmental approvals, security for construction of Project Improvements,
indemnification, insurance, termination rights and events of default.
13, The understandings set forth in this Memorandum of Agreement
are subject to the approval of the Borough Council and the Redeveloper's Board
of Directors and the execution by both parties of the formal agreement(s)
required by law.
IN WITNESS WHEREOF, the Borough and the Redeveloper hereby
execute this Memorandum of Agreement and confirm that, subject to the terms
and limitations hereof, they are mutually bound hereby.
Attest
llC
KINDER MORGAN LIQUIDS TERMINALS,
By:
Kevin H, Golankiewicz
General Manager, Northeast Region
Attest
BOROUGH OF CARTERET
By:
Kathleen M, Barney
Borough Clerk
Daniel J, Reiman
Mayor