City Commission Worksession Minutes 03-13-2023

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                                          City of Muskegon

                                            Work Session


                                    March 13, 2023, 5:30 pm
                                       Muskegon City Hall
                             933 Terrace Street, Muskegon, MI 49440

Present:                   Mayor Ken Johnson
                           Commissioner Rachel Gorman
                           Commissioner Rebecca St.Clair
                           Commissioner Eric Hood
                           Vice Mayor Willie German, Jr.
                           Commissioner Michael Ramsey
                           Commissioner Teresa Emory

Staff Present:             City Manager Jonathan Seyferth
                           City Clerk Ann Meisch
                           Deputy City Clerk Kimberly Young

1.     Call to Order

       The Worksession meeting was called to order by Mayor Johnson at 5:30 p.m.

2.     New Business

       2.a       Shoreline Drive Phase 1 Study Results

                 Staff would like to present an update on the preliminary findings from the
                 Shoreline Drive project. See attached for preliminary report details. Staff will be
                 seeking feedback and direction moving forward for potential future phases of
                 the project.

                 Dan VanderHeide, Director of Department of Public Works, introduced Chris Zull,
                 Progressive AE. Chris Zull presented the study results of the Shoreline Drive
                 Phase 1 Study. Discussion took place regarding the Shoreline Drive Diet. DPW is
                 looking to continue the PILOT and does not have any recommendations at this
                 time on the future of this space. They will present options for what this space

      would look like based on results of the study and the desire of the Commission.
      This will be years down the road and will depend on funding, feasibility, etc. The
      City is evaluating these improvements to the corridor to reduce travel speeds,
      connect the downtown to the lakeshore, and create more vibrancy in the area.

      Discussion took place regarding Phase 2 of the Shoreline Drive Road Diet and
      Commission consensus is to move forward.

2.b   South Breakwater Lighthouse

      Staff will brief the City Commission on the needed restoration of the Muskegon
      South Breakwater Lighthouse that is under the stewardship of Michigan
      Lighthouse Conservancy through a 2010 lease with the U.S. Army Corps of
      Engineers. Staff recommends the City of Muskegon assume the MLC’s lease that
      runs through 2035 and lead the restoration project.

      Please find these attachments:

          1. Staff memo outlining the restoration project.

          2. Photos of the lighthouses from Barb Lowry and Jeremy Church

          3. Executive summaries from 2015 and 2018 investigation of the
             lighthouse’s condition.

          4. June 2022 engineering estimates of rehabilitation items

          5. Copy of the MEDC grant agreement with the city and very preliminary

          6. Copy of the MLC lease with the U.S. Army Corps of Engineers (transfers
             and assignments on page 2).

      City staff is looking for feedback from the commission and consensus on moving
      forward with assuming the stewardship of the lighthouse and leading the

      AMOUNT REQEUSTED: Remainder of funds would be privately raised.

      AMOUNT BUDGETED: $800,000 (first $400,000) in a MEDC grant.

      Item for information only. Commission consensus is to move forward to assume
      the lease and stewardship. More information will come later.

2.c   Nelson House Presentation

      Staff will present a potential project to move the historic Nelson House to a City
      owned vacant lot. Staff and the Historic District Commission have heard interest
      from the public in preserving the Nelson House, located at 1292 Jefferson Street.
      The house is currently owned by Muskegon Public Schools and slated for
      demolition later in 2023. The house was built as the home of Charles D. Nelson, a
      prominent Muskegon citizen for whom Nelson School and Nelson Neighborhood
      are named. The proposal at this time is for the City to explore funding options for
      acquiring the house and moving it to 382 W. Muskegon Avenue – the last
      remaining lot in the Historic Infill Area in the Houston Historic District. If moved
      to this location, the
      house would then be listed for sale in as-is condition and ultimately rehabilitated
      by a private owner.

      AMOUNT REQUESTED: $190,000-$225,000


      Planner, Jamie Pesch, presented information on the history of the Nelson House.
      Discussion took place regarding the possibility of moving the home to another
      location on Muskegon Avenue. Commission is generally supportive of further
      exploring this opportunity. The idea is that the home would be located in a
      Historic District, new owners would be expected to make necessary
      improvements and to go through the Historic District Commission to have
      improvements approved.

      No. 2023-40

      Motion by: Commissioner Emory
      Second by: Commissioner St.Clair

      To suspend the rules and allow public comment regarding the Nelson House
      before the end of the meeting.

      YES: (7): Mayor Johnson, Commissioner Gorman, Commissioner St.Clair,
      Commissioner Hood, Vice Mayor German, Commissioner Ramsey, and
      Commissioner Emory

                                                                MOTION PASSES (7 to 0)

2.d   1095 Third Street Proposal Reviews

Two Low Income Housing Tax Credit firms and one market rate developer have
all approached us on the Catholic Charities parcel, and we have solicited
proposals on their concepts for staff and commission review.

We have received consistent interest in this site over the past 8-10 months, but
it has been under contract with another developer. Now that firm has bowed out
due to market conditions, and we have proposals from other entities that wish
to complete infill housing and/or mixed-use projects at the site. The building
currently sits empty, and we have our facilities team routinely checking it for
utility issues and any potential dumping/blight/vandalism problems. Thus far we
have been quite lucky and there are minimal issues. We did just have a boiler
component fail, so we cut off the gas and turned off the water to the building to
avoid any damage.

The building should not sit vacant under our ownership for another year as it will
continue to deteriorate, and it presents a powerful opportunity to address the
housing shortage we are experiencing in the community. To that end, staff has
requested the various firms that have inquired about the building to show us
what they are proposing, and would like commission feedback in selecting a
preferred firm. As this was not a formal RFP, rather than make a specific
recommendation staff will review each proposal and highlight pros and cons
from each. We hope to move forward with direction on a preferred private
sector partner from the commission’s perspective as they all offer different
scopes, and will return to you with a proposed development agreement in an
upcoming meeting.

Jake Eckholm, Director of Development Services, provided an overview of the
status of the Catholic Charities parcel. Three proposals have been submitted.
Director Eckholm provided a summary of the proposal from Spire. Discussion
took place of pros and cons. Two of the three proposals would be LITC housing -
Low Income Tax Credit. Shawn McMickell from Spire was in attendance and
addressed the Commission and answered some questions. There is also a
proposal from General Capital - Director Eckholm provided a summary of the
proposal from General Capital. General Capital proposes 51 units, some of which
could be live/work. Josh Haffron from General Capital was in attendance and
made comments and took questions. The third proposal is from West Urban
Properties. Dave Dusendang proposes a hybrid approach to the project. Mr.
Dusendang made comments about his proposal for developing the building on
Third Street. Development Services is looking for the commission to select a

           developer to move forward with. This item will be on the agenda for the March
           14, 2023 Meeting.

     2.e   Water Rate Analysis Presentation

           Staff will present the results of a water rate analysis, including recommendations
           for water and sewer rates for the 2023-24 fiscal year. Working with Warren
           Creamer of MFCI and Prein & Newhof consulting engineers, staff developed a
           capital improvement plan as well as a water and sewer rate analysis
           methodology and result that will be presented to the Commission for
           information and discussion. The discussion will focus on ways to increase
           revenue in the water fund.

           Dan VanderHeide, Public Works Director, presented information about how to
           deal with the debt of our water/sewer fund. Commission is generally supportive
           of the presented solution.

3.   Public Comment

     Public comment was received.

4.   Adjournment

     The Work Session meeting adjourned at 9:40 p.m.


                                                                     Respectfully Submitted,

                                                        Ann Marie Meisch, MMC - City Clerk


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