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CITY OF MUSKEGON
CITY COMMISSION MEETING
September 24, 2024 @ 5:30 PM
MUSKEGON CITY COMMISSION CHAMBERS
933 TERRACE STREET, MUSKEGON, MI 49440
MINUTES
The Regular Commission Meeting of the City of Muskegon was held at City Hall,
933 Terrace Street, Muskegon, Michigan at 5:30 p.m., Tuesday, September 24,
2024. Pastor Rob Renberg from the Anchor Point Bible Church, opened the
meeting with prayer, after which the Commission and public recited the Pledge
of Allegiance to the Flag.
ROLL CALL
Present: Mayor Ken Johnson, Vice Mayor Rebecca St. Clair, Commissioners Jay
Kilgo, Destinee Keener, and Rachel Gorman (arrived at 5:40 p.m.), Acting City
Manager Jacob Eckholm, City Attorney John Schrier, and City Clerk Ann Marie
Meisch
Absent: Commissioners Katrina Kochin and Willie German, Jr.
PUBLIC COMMENT ON AGENDA ITEMS
No public comments were made
2024-81 CONSENT AGENDA
A. Approval of Minutes City Clerk
To approve minutes of the September 9, 2024, Worksession/City Commission
Meeting.
STAFF RECOMMENDATION: Approval of the minutes.
B. Addendum/Purchase Price: 1192-1194 Pine Planning
Staff is requesting approval of a purchase agreement addendum to reduce the
price of 1192-1194 Pine from $350,000.00 to $310,000.00.
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1192-1194 Pine had a foundation inspection performed by two local foundation
contractors/specialists. Due to the shifting and age of the homes, potential
issues were identified. The purchase price of the homes was reduced to reflect
that.
STAFF RECOMMENDATION: To approve the Purchase Agreement Amendment
for 1192-1194 Pine to reduce the price to $310,000 and authorize the Code
Coordinator, Samantha Pulos, to sign.
C. Equipment Replacement – Front-end Loader Public Works
Staff is requesting authorization to purchase a Caterpillar front-end loader from
Michigan CAT for $230,706.76. DPW staff use front-end loaders daily to complete
a variety of important tasks throughout the City. These tasks include loading
trucks with road salt and road repair materials, assisting construction projects
and cleanups throughout the City, removing sand from the streets at the
beach, managing the sludge at the Water Filtration Plant, and much more.
With approval from the City Commission, a new Caterpillar 938M front-end
loader will be purchased to replace a heavily-used front-end loader that was
acquired in 2012. This purchase from Michigan CAT is under the Sourcewell
contract at a cost of $277,706.76. Sourcewell is a nationwide purchasing
collective that publically bids items and offers the lowest bid price to member
organizations. The Caterpillar front-end loader being replaced will be traded-in
for a credit of $47,000, resulting in a net cost of $230,706.76. This purchase is part
of the Equipment Fund capital purchase plan and is a budgeted expenditure
for FY 2024-25.
STAFF RECOMMENDATION: I move to authorize staff to purchase a new front-end
loader from Michigan CAT for $230,706.76.
D. MDOT Trunkline Maintenance Contract Renewal Public Works
Staff requests approval to enter into a five-year contract with the Michigan
Department of Transportation (MDOT) to authorize the City to maintain and to
receive reimbursement for maintaining, state trunklines such as M-46 (Apple
Avenue) and US-31BR (Shoreline Drive) within the City limits.
The City DPW has long maintained the state trunklines within our City limits. This
helps the City have more control over the level of maintenance provided on
those trunklines while allowing the City to be reimbursed for the costs by the
state. The arrangement is covered by a contract with the state which is
included herein and is recommended for approval. This extension will cover the
arrangement through the state's fiscal year ending September 30, 2029. The
format is of the standard form that has been used for this contract in the past.
STAFF RECOMMENDATION: Approve staff to enter into a five-year contract with
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the Michigan Department of Transportation (MDOT) to authorize the City to
maintain and to receive reimbursement for maintaining, state trunklines such as
M-46 (Apple Avenue) and US-31BR (Shoreline Drive) within the City limits.
E. Concur with CRC Recommendation to Accept Resignation and Make
Appointments City Clerk
To concur with CRC recommendation to accept the resignation of Doug
Pollock from the DDA/BRA and to appoint JoAnn Dornbos with a term ending 1-
31-27. To appoint Yancy Weaver to the Parks and Recreation Advisory
Committee, resident of Ward 2; and appoint Cami Horn to the Citizen's District
Council-CDBG, citizen of Ward 1.
STAFF RECOMMENDATION: To concur with CRC recommendation to accept the
resignation of Doug Pollock from the DDA/BRA and appoint JoAnn Dornbos,
appoint Yancy Weaver to the Parks and Recreation Advisory Committee, and
appoint Cami Horn to the Citizen's District Council-CDBG.
F. Sale of 1431 Hoyt Planning
Staff is requesting approval of a purchase agreement for 1431 Hoyt for $149,900.
1431 Hoyt was constructed through the agreement with Dave Dusendang to
construct infill housing with ARPA funding. The offer is full listing price with no
seller concessions.
STAFF RECOMMENDATION: To approve the Purchase Agreement for 1431 Hoyt
for $149,900 and authorize the Code Coordinator, Samantha Pulos, to sign.
G. Sale of 1441 Hoyt Planning
Staff is requesting approval of a purchase agreement for 1441 Hoyt for $150,000.
1441 Hoyt was constructed through the agreement with Dave Dusendang to
construct infill housing with ARPA funding. The offer is over full listing price with
no seller concessions.
STAFF RECOMMENDATION: To approve the Purchase Agreement for 1441 Hoyt
for $150,000 and authorize the Code Coordinator, Samantha Pulos, to sign.
H. Sale of 1441 Leahy Planning
Staff is requesting approval of a purchase agreement for 1441 Leahy for
$159,440. 1441 Leahy was constructed through the agreement with Dave
Dusendang to construct infill housing with ARPA funding. The offer is over full
listing price with no seller concessions.
STAFF RECOMMENDATION: To approve the Purchase Agreement for 1441 Leahy
for $159,440 and authorize the Code Coordinator, Samantha Pulos, to sign.
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I. Amendment to the Zoning Ordinance - Cat Cafés in Commercial Zones
Planning
Staff-initiated request to amend the zoning ordinance to allow cat cafés as a
special use permitted in all commercial districts excluding B-1. This would
include the following zoning districts: B-2; B-4; FBC, DT; FBC, MS; FBC, NC; LFBC,
LC; and LFBC, MR.
Staff has been receiving many calls regarding the desire to open a cat café in
Muskegon. These types of businesses are becoming more popular throughout
the state. A specific ordinance allowing these uses is necessary because any
property housing more than four cats is considered a commercial kennel.
The Planning Commission unanimously recommended approval of the
ordinance amendment.
STAFF RECOMMENDATION: I move to amend the zoning ordinance to allow cat
cafés as a special use permitted in the following zoning districts: B-2; B-4; FBC,
DT; FBC, MS; FBC, NC; LFBC, LC; and LFBC, MR.
J. Amendment to the Zoning Ordinance - Cat Cafe Definition Planning
To add a definition for cat cafés to Article II (Definitions) of the zoning
ordinance. Definition - Cat café: a restaurant or café, which also houses
adoptable or therapeutic cats for clientele to interact with, and which may
incorporate cat adoption services in addition to the restaurant services.
The Planning Commission unanimously recommended approval of the
ordinance amendment at their September 12th meeting.
STAFF RECOMMENDATION: I move to approve the request to amend the zoning
ordinance to add a definition for cat cafés.
K. Contract for Tree Removal Services Planning
To award the tree removal services contract to Straight Up Tree Service, who
was the lowest qualified bidder at $35,365.78.
Staff is working with two developers to construct homes on 18 City-owned
residential lots. The lots have several trees located within the potential building
footprints, making it unfeasible for the developers to construct homes due to the
costs associated with tree removal. A request for proposal for tree services was
listed on the City's website. Staff recommends awarding the contract to Straight
Up Tree Service, who was the lowest qualified bidder. Trees and stumps must be
removed from the lots by October 20. The lots include 1284/1365/1375 James
Ave, 209 Merrill Ave, 502/561 Mary St, 845/982 Ducey Ave, 1003/1341 Ducey
Ave, 1007 Albert Ave, 1542 Adams Ave, 320/346 Wood St, 425 Octavious St, 436
Charles St, 877 Amity Ave, and 907 Orchard Ave.
STAFF RECOMMENDATION: I move to award the tree removal contract to
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Straight Up Tree Service.
L. Nelson School LIHTC Redevelopment Municipal Services Agreement
Economic Development
General Capital is resubmitting their application for Low Income Housing Tax
Credits in order to redevelop the Nelson School site into affordable family
apartments. They require a Municipal Services Agreement to be approved by
the City before the October 1, 2024 application date.
Pursuant to our 5 Year Housing Needs Assessments call for over 1,000 rental units
priced under $1,430 a month, staff has made overtures and established
relationships with several new and existing LIHTC developers. General Capital
has already successfully completed two new construction facilities in our
community, and is seeking to complete a third with the Nelson School
Apartments. This site will support 52 affordable family apartments.
General Capital is seeking a Municipal Services Charge of 3% of net shelter
rents. This should equal roughly $15,000 per year for the City to keep to defray
costs of public service delivery to the site.
STAFF RECOMMENDATION: Motion to accept the Municipal Services Agreement
between the City of Muskegon and GenCap Nelson Limited Dividend Housing
Association, LLC as presented and to authorize the Mayor and Clerk to sign.
M. Nelson School LIHTC Redevelopment Contract for Housing Exemption
Economic Development
General Capital is resubmitting their application to MSHDA for federal Low
Income Housing Tax Credits to assist in the redevelopment of Nelson School into
affordable family apartments. They are required to have an approved contract
for housing exemption by the 10/1/2024 application date.
Pursuant to our 5 Year Housing Needs Assessments call for over 1,000 rental units
priced under $1,430 a month, staff has made overtures and established
relationships with several new and existing LIHTC developers. General Capital
has already successfully completed two new construction facilities in our
community, and is seeking to complete a third with the Nelson School
Apartments. This site will support 52 affordable family apartments.
General Capital is seeking a Payment in lieu of Taxes (PILOT) of 4% of net shelter
rents. This should equal roughly $19,000 per year for the City to divide between
taxing jurisdictions. General Capital is also requesting a 3% Municipal Services
Charge, which is detailed in another agenda item in the packet.
STAFF RECOMMENDATION: Motion to accept the Contract for Housing
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Exemption between the City of Muskegon and GenCap Nelson Limited
Dividend Housing Association, LLC a Michigan LLC as presented and authorize
the Mayor and Clerk to sign.
N. Clay Commons Municipal Services Agreement Economic Development
Spire Development is proposing a new construction affordable family
apartment development called Clay Commons at 30 East Clay. In order to
submit their Low Income Housing Tax Credit application to MSHDA they will
require a Municipal Services Agreement approved by the City prior to the
October 1, 2024 application date.
Spire Development was successfully awarded two LIHTC projects by MSHDA in
our community in the 2023 round, and are now proposing two more projects.
Staff is recommending a 3% Municipal Services Charge in the agreement in
order to defray the costs of public service delivery to the site. This payment
should provide roughly $9,000-11,000 annually.
STAFF RECOMMENDATION: Motion to accept the Municipal Services Agreement
between the City of Muskegon and Clay Commons Limited Dividend Housing
Association Limited Partnership as presented and to authorize the Mayor and
Clerk to sign.
O. Clay Commons Contract for Housing Exemption Economic
Development
Spire Development is seeking approval from MSHDA to receive Low Income
Housing Tax Credits to facilitate the construction of a new family apartment
complex at 30 E. Clay. They require an approved Contract for Housing
Exemption by the City before the 10/1/2024 application date.
Spire has successfully been awarded two LIHTC allocations on their 2023 project
submissions in our community, and are now submitting two more to MSHDA in
2024. Notably, they are proposing new construction of affordable family housing
in the downtown area, directly across the street from United Way at 30 E. Clay
Street. They are requesting a 4% annual PILOT payment, which is one point lower
than the PILOT policy recommends. Their reasoning for this request is the
significant contamination they have found on the site during due diligence and
the additional costs it will place on the project. Staff recommends approval, as
tools like Brownfield TIF that a market rate developer may utilize for this issue are
not available to LIHTC development due to the lack of ad valorem property tax
payments.
STAFF RECOMMENDATION: Motion to accept the Contract for Housing
Exemption between the City of Muskegon and CLAY COMMONS LIMITED
DIVIDEND HOUSING ASSOCIATION LIMITED PARTNERSHIP as presented and
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authorize the Mayor and Clerk to sign.
P. Spring Street Crossing Municipal Services Agreement Economic
Development
Spire Development is proposing a new construction affordable family
apartment complex at 48 East Western Avenue and is applying to MSHDA for
Low Income Housing Tax Credits. They require a Municipal Services Agreement
approved by the City prior to the 10/1/2024 application date.
Spire Development was successfully awarded two LIHTC projects by MSHDA in
our community in the 2023 round, and are now proposing two more projects.
Staff is recommending a 3% Municipal Services Charge in the agreement in
order to defray the costs of public service delivery to the site. This payment
should provide roughly $9,000-11,000 annually.
STAFF RECOMMENDATION: Motion to accept the Municipal Services Agreement
between the City of Muskegon and SPRING STREET CROSSING LIMITED DIVIDEND
HOUSING ASSOCIATION LIMITED PARTNERSHIP as presented and authorize the
Mayor and Clerk to sign.
Q. Spring Street Crossing Contract for Housing Exemption Economic
Development
Spire Development is seeking Low Income Housing Tax Credits from MSHDA to
facilitate the new construction of an affordable family apartment complex at
48 E. Western Avenue. They require a contract for housing exemption approved
by the City before the 10/1/2024 application date.
Spire has successfully been awarded two LIHTC allocations on their 2023 project
submissions in our community, and are now submitting two more to MSHDA in
2024. Notably, they are proposing new construction of affordable family housing
in the downtown area, directly across the street from Witt Buick at 48 E. Western
Avenue. They are requesting a 4% annual PILOT payment, which is one point
lower than the PILOT policy recommends. Their reasoning for this request is the
significant contamination they have found on the site during due diligence and
the additional costs it will place on the project. Staff recommends approval, as
tools like Brownfield TIF that a market rate developer may utilize for this issue are
not available to LIHTC development due to the lack of ad valorem property tax
payments.
STAFF RECOMMENDATION: Motion to approve the Contract for Housing
Exemption between the City of Muskegon and SPRING STREET CROSSING
LIMITED DIVIDEND HOUSING ASSOCIATION LIMITED PARTNERSHIP as presented
and authorize the Mayor and Clerk to sign.
Page 7 of 12
R. Sale of 32 W. Western Avenue to Spire Development Economic
Development
Spire Development has requested to purchase vacant city-owned property
immediately adjacent to the property is has under contract for Spring Street
Crossing for a price of $190,800.
Spire is proposing a new construction affordable family apartment complex at
48 E. Western Avenue called Spring Street Crossing. They have requested to add
this .53 acre parcel to the project in order to ensure they have sufficient space
for adequate parking, landscaping, and zoning compliance. The price per acre
is the same as their purchase rate for the adjacent private sector properties. The
revenues generated are proposed to be attributed to our upcoming Housing
Fund in this year's budget, in order to be leveraged for further housing
investments in the community.
STAFF RECOMMENDATION: Motion to accept the purchase agreement for 32 E.
Western Avenue as presented and authorize the Mayor and Clerk to sign.
S. Berkshire Spring Street LIHTC Municipal Services Agreement Economic
Development
General Capital is taking another shot at their new construction Low Income
Housing Tax Credit application that was not approved last December by the
Michigan Statewide Housing Development Authority. The application requires
approved Contracts for Housing Exemption and Municipal Services
Agreements.
Pursuant to our 5 Year Housing Needs Assessment's call for over 1,000 rental
units priced under $1,430 a month, staff has made overtures and established
relationships with several new and existing LIHTC developers. General
Capital has already successfully completed two new construction facilities in
our community, and is seeking to complete a third with the Spring Street
Berkshire Apartments. This site will support 53 affordable senior apartments.
General Capital is seeking a Municipal Services Charge of 3% of net shelter
rents. This should equal roughly $15,000 per year for the City to keep to
defray costs of public service delivery to the site. General Capital is also
requesting a 5% Payment in lieu of Taxes agreement, which is detailed in
another agenda item in the packet.
STAFF RECOMMENDATION: Motion to approve the Municipal Services
Agreement between GenCap Spring Street Limited Dividend Housing
Association, LLC and the City of Muskegon, and authorize the Mayor and
Clerk to sign.
T. Berkshire Spring Street Contract for Housing Exemption (PILOT
Page 8 of 12
Agreement) Economic Development
General Capital is resubmitting their proposed new construction affordable
senior living development at 162 East Apple to MSHDA, and requires an
updated Payment In Lieu of Taxes agreement.
Pursuant to our 5 Year Housing Needs Assessments call for over 1,000 rental
units priced under $1,430 a month, staff has made overtures and established
relationships with several new and existing LIHTC developers. General
Capital has already successfully completed two new construction facilities in
our community, and is seeking to complete a third with the Berkshire Spring
Street Project. This site will support 53 affordable senior apartments.
General Capital is seeking a Payment in lieu of Taxes (PILOT) of 5% of net
shelter rents. This should equal roughly $21,500 per year for the City to divide
between taxing jurisdictions. General Capital is also requesting a 3%
Municipal Services Charge, which is detailed in another agenda item in the
packet.
STAFF RECOMMENDATION: Motion to accept the Contract for Housing
Exemption between GenCap Spring Street Limited Dividend Housing
Association, LLC as presented, and authorize the Mayor and Clerk to sign.
U. Froebel School Project Updated Municipal Services Agreement
Economic Development
Samaritas plans to submit Froebel School to MSHDA on October 1 for
consideration for Low Income Housing Tax Credits. They must have an
approved Municipal Services Agreement with the City in order to be eligible.
For several years staff have been attempting to find a partner that had interest
and capacity in the adaptive reuse of the long-vacant Froebel School building.
Since 2019, we have toured more than 10 entities through the school, and held
a community meeting offering several touring opportunities for the public.
Through these efforts we have developed interest from Samaritas for the
potential installation of affordable housing units by application to the Michigan
Statewide Housing Development Authority (MSHDA) Low Income Housing Tax
Credit (LIHTC) Program. If awarded, then Samaritas proposes historical
preservation and adaptive remodel of the school building into apartments for
low to moderate income residents. The agreement establishes their Municipal
Services Agreement at 3% of shelter rents, which should result in roughly $11,000
annually for the City.
If approved by Commission, Samaritas is also proposing a PILOT payment of 2%
of net shelter rents, for a total annual payment of 5% of rents. The Municipal
Services Agreement (MSA) stays completely with the City to defray costs of
public service delivery to the site, while the PILOT payment is divided
Page 9 of 12
proportionally to the other taxing jurisdictions, similar to a traditional property tax
payment.
STAFF RECOMMENDATION: Motion to approve the Municipal Services
Agreement between the City of Muskegon and Samaritas Affordable Living
Froebel Limited Dividend Housing Association Limited Partnership as presented,
and to authorize the Mayor and Clerk to sign.
V. Froebel School Updated Contract for Housing Exemption Economic
Development
Staff and Samaritas have worked on various initiatives over the last 10 months to
make Froebel School a more competitive LIHTC project in the statewide scoring
system, and are now requesting Commission approval to submit to MSHDA for
the October 2024 round.
For several years staff have been attempting to find a partner that had interest
and capacity in the adaptive reuse of the long-vacant Froebel School building.
Since 2019, we have toured more than 10 entities through the school, and held
a community meeting offering several touring opportunities for the public.
Through these efforts we have developed interest from Samaritas for the
potential installation of affordable housing units by application to the Michigan
Statewide Housing Development Authority (MSHDA) Low Income Housing Tax
Credit (LIHTC) Program. If awarded, then Samaritas proposes historical
preservation and adaptive remodel of the school building into apartments for
low to moderate income residents. The agreement establishes their payment in
lieu of taxes as 2% of net shelter rents. This should result in roughly $7,500 annually
to be divided between taxing jurisdictions.
In the last 10 months since the previous LIHTC submission round staff has worked
with Samaritas and the Muskegon County Land Bank to achieve a 1.4 million
dollar grant to assist with hard costs on the project, and Samaritas has been
approved for Historic Tax Credits which will also help the bottom line. The total
project investment is projected at $16.5 million. Note that this is the lowest
proposed PILOT of our proposed MSHDA submissions. This is due to the facts that
we are the owners of this facility and will incur significant costs to demolish or
otherwise redevelop the site, and that Samaritas is a non-profit housing
developer with limited capacity to finance and construct facilities compared
with for-profit housing development firms.
If approved by Commission, Samaritas is also proposing a Municipal Services
Agreement of 3% of net shelter rents, for a total annual payment of 5% of rents.
The Municipal Services Agreement (MSA) stays completely with the City to
defray costs of public service delivery to the site, while the PILOT payment is
divided proportionally to the other taxing jurisdictions, similar to a traditional
property tax payment.
Page 10 of 12
STAFF RECOMMENDATION: Motion to accept the Contract for Housing
Exemption between the City of Muskegon and Samaritas Affordable Living
Froebel Limited Dividend Housing Association Limited Partnership as presented,
and to authorize the Mayor and Clerk to sign.
W. Lighthouse Lofts Municipal Service Agreement Economic Development
Pivotal Development is seeking an award of Low Income Housing Tax Credits
from MSHDA to facilitate an affordable family apartment complex at 90
Hartford Street. They require a municipal services agreement approved by the
City of Muskegon prior to the application date on 10/1/2024.
Pivotal Development was successfully awarded one LIHTC project by MSHDA in
our community in the 2023 round, and are now proposing another project. Staff
is recommending a 3% Municipal Services Charge in the agreement in order to
defray the costs of public service delivery to the site. This payment should
provide roughly $9,000-11,000 annually.
STAFF RECOMMENDATION: Motion to accept the Municipal Services Agreement
between the City of Muskegon and Lighthouse Lofts Limited Dividend Housing
Association LLC as presented and authorize the Mayor and Clerk to sign.
X. Lighthouse Lofts Contract for Housing Exemption Economic
Development
Pivotal Development is seeking an award of Low Income Housing Tax Credits
from MSHDA to facilitate a new construction affordable family apartment
complex. They require an approved contract for housing exemption prior to the
10/1/2024 application date.
Pivotal has successfully been awarded one LIHTC allocation on their 2023
project submission in our community, and are now submitting one more in 2024.
Notably, they are proposing new construction of affordable family outside of
the downtown area, directly next door to Hartford Terrace at 90 Hartford Street.
They are requesting a 4% annual PILOT payment, which is what the policy
recommends given their location outside the DDA boundaries and service to
families in the project. This should provide roughly $15,000 annually to the City to
be split between taxing jurisdictions. Staff recommends approval of this request
due to the need for additional housing units at price points under $1,430
according to our 2023 Housing Needs Assessment. All of the proposed units in
this complex, along with all proposed LIHTC developments this round, would be
under this threshold.
STAFF RECOMMENDATION: Motion to accept the Contract for Housing
Exemption between the City of Muskegon and Lighthouse Lofts Limited
Dividend Housing Association LLC as presented and authorize the Mayor and
Clerk to sign.
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Motion by Vice Mayor St.Clair, second by Commissioner Kilgo, to approve the
Consent Agenda as presented.
ROLL VOTE: Ayes: St.Clair, Johnson, Kilgo, and Keener
Nays: None
MOTION PASSES
ANY OTHER BUSINESS
Mayor Johnson commented on foaming events on Muskegon Lake due to
PFAS. Test results of intake are below thresholds.
PUBLIC COMMENT ON NON-AGENDA ITEMS
Public comments received.
ADJOURNMENT
The City Commission meeting adjourned at 5:50 p.m.
Respectfully Submitted,
Ann Marie Meisch, MMC City Clerk
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