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Lovntown
muskegon
BUSINESS IMPROVEMENT DISTRICT
Downtown Muskegon Business Improvement District
Special
Meeting Agenda
June 29, 2020
8 a.m.
Muskegon City Hall
933 Terrace, Muskegon, MI
Virtually on City of Muskegon Facebook Live
https://www.facebook.com/CityofMuskegon/
1) Call to Order
2) Consent Agenda
a) Approval of Agenda
b) Approval of Minutes from the meeting Feb. 24, 2020
3) Public Comment (on an agenda item)
4) New Business
a) Acceptance of financial statements as of May 31, 2020 and review financial position
b) Discussion of residential assessments in BIDS
c) Implications of a Social District, operations/income
d) Consideration of a draft BID renewal plan for public discussion
e) Seta meeting of property owners and downtown stakeholders on BID renewal plan
f) Update on downtown summer work plan
g) Downtown project updates
5) Other Business
a) Set next meeting
6) Adjournment
To: BID board members
From: Dave Alexander, city business development manager
Re: Agenda items for June 29 meeting
Date: 6-24-20
As | sent to you in an email earlier today, the BID meeting Monday June 29, 2020 at 8 a.m. will
not be in person but will be virtual. | have sent you in the email with this agenda packet a Zoom
link. We will all go into the meeting through Zoom and the city will repost the Zoom session on
live on the city’s Facebook page. You are able to attend in person with Ryan from the clerk’s
office and myself at city hall that morning.
We need four of the seven of you for a quorum.
Here is some background on the agenda items ...
Finances: The BID financial statement has never looked so good. It shows $158,194 in the BID
account at the end of May. The fund balance does not reflect our final payments to Summit for
end of the year snow removal nor for the city downtown landscaping work. Most of the Barry’s
Flowers bill has been paid. The account still will receive revenues from the county’s delinquent
property tax bond proceeds for those who did not pay their winter tax bill, including the BID
assessment. We received $132,000 from current year special assessments and | would guess
another $25,000 or so will come our way from those not paying on time. The county delinquent
payment is expected to arrive anytime. The BID fund is in position to complete its summer work
and do most if not all of the winter snow removal for 2020-21, even after this BID sunsets Dec.
31.
Residential: The governor signed new legislation allowing for the BID to special assess
residential properties within the district. This has implications for how you might want to move
forward with a renewal proposal. You need to decide whether you philosophically want assess
residential property and if so at what rate and how that might inform the size of the district.
The balancing act is new revenue vs. new work as at least you would have sidewalk snow
removal in front of the residential properties. You have not provided that service unless the
sidewalk is needed to link special assessed property within the BID. | have put a legislative
analysis of the new law in your packet.
Social District: Another new piece of legislation is nearing governor's signature on the Social
Districts, allowing beers to be walked down Western Avenue. This legislation just enables local
units of government to create such a district if they wish. City staff and commission will want to
pursue a social district within the BID. The Ohio model has the government entity running the
district able to pay for it through upcharge of the beverages going out into the district. An
example would be an additional $1 a beer if you want to carry it out into the district. That could
raise substantial money. Who would be managing the Social District and how would excess
revenues be spent? These questions have implications for the BID renewal. | have put the most
current legislative analysis of Social Districts in your packet.
Three-year renewal: Staff is prepared to recommend to the BID board a three-year renewal at
current rates. However, the district has been reduced to create about $115,000 in revenue. The
work plan has been reduced to just summer landscaping and winter sidewalk snow removal,
plus an administrative fee to support downtown management. The documents supporting the
suggested renewal are in the agenda packet. | would suggest a vote in support of the concept
and specific elements of the renewal, putting it before the property owners in an informational
meeting and finally making final recommendation to the city commission. Commissioners will
need to have two public hearings and a vote before Oct. 31.
Property owners’ meeting: If accepted in concept, | would suggest a property owners meeting
in the last two weeks of July and a final BID board vote recommendation before the end of July.
| would suggest holding the informational meeting in and outside of the Farmers Market garage
for social distancing, asking everyone to wear a mask. A Tuesday or Wednesday at 4:30 p.m.
would be my suggestion.
Summer work: All of the flowers from Barry’s have been planted in the 72 planters and will be
maintained through the season. The city DPW has been hampered by budget cuts including not
hiring summer seasonal workers and having staff on reduced hours or furloughs. After not
finding a private landscaper to step into the DPW’s letter of understanding work with the BID,
the city has hired two seasonal workers to maintain the downtown landscaping.
Downtown projects: Work continues on several downtown projects beyond the convention
center, which is pretty much on pace to open by the end of the first quarter of 2021. Terrace
Point Landing, Hartshorn Village and the Core Development’s 794 Northtown and 1205 Eighth
have construction continuing or being completed. The Leonard, Foundry Square and Highpoint
Flats Il have been stalled by COVID-19 financial issues but hopes are for each to progress
toward construction this summer.
Downtown Muskegon Business Improvement District
Meeting Minutes
Feb. 24, 2020
Muskegon City Hall
933 Terrace Muskegon, MI 49440
Room 103
Call to Order: 8:00 AM
Attendance: Bob Tarrant, Bruce Lindstrom, Kathy Denison, Frank Peterson and Mike
Hennessy.
Excused Absent(s): Phyllis Watson-Laudermill, Kathy Denison and John Riegler.
Guests: Dave Alexander, city Business Development Manager and LeighAnn Mikesell, City
Development Director.
Consent agenda
a) Approval of the agenda
b) Approval of the Minutes from June 28, 2019 special meeting
Motion to approve the consent agenda: Frank Peterson
Support: John Riegler
All voted in favor
3) Public Comment (on an agenda item) — The board chose to leave the floor open for the
whole meeting allowing attendees to participate as they like.
New Business
a) Accept the financial statement dated Jan. 31, 2020 and review
of financial position.
Motion to accept: Frank Peterson
Support: John Riegler
All voted in favor
b) BID-City DPW 2020 landscaping agreement
Dave Alexander presented the 2020 BID-City DPW landscaping agreement. There
were no work changes from the previous year but a 5 percent increase in the BID
payment to DPW was added. The total cost for the season is $24,050.
Motion to approve the agreement: Frank Peterson
Support Mike Hennessy
Vote: All voted in favor
c) BID-Barry’s Flowers planter agreement for 2020
Dave Alexander presented the board the 2020 agreement for
72 planters in the downtown for materials and seasonal
maintenance. The quote was $13,485, which was 8.4 percent
increase over last year. The increase was due to increased
cost of flowers and labor, according to Dawn Berry.
Motion to approve the agreement: Frank Peterson
Support: John Riegler
All voted in favor
d) Harmony Park
The Muskegon Rotary Watch Muskegon Play instrument/public
art initiative asked for the BID to contribute to a $100,000 effort
that had already raised about $75,000. Of the five locations that
the city has agreed to install the artwork instruments, three are
within the BID. Dave Alexander recommended $1,000 donation
to assist the placement of the three within the BID, being at
Seventh/Shoreline, Olthoff Stage and the Farmers Market. BID
board members discussed more but came to the consensus
that $1,000 was appropriate, leaving potential future
contributions to other public art projects within the BID.
Motion to approve the public art contribution: Bruce Lindstrom
Support: Frank Peterson
Vote: All voted in favor
e) Dave Alexander presented the BID board and overview of the
potential for paid parking on downtown streets within the BID as
a potential parking structure is developed. This is potential
source of downtown revenue in the future. The item was for
discussion, no vote taken.
f) Dave Alexander presented a potential three-year renewal of the
BID beginning in Jan. 1, 2021. LeighAnn Mikesell gave a city
staff perspective on the need for continued revenues to support
downtown services in the next three years. Now that downtown
is in full development, there are property owners, investors,
businesses, institutions and residents counting on the current
level of service downtown, especially in landscaping and
sidewalk snow removal. The BID board had a full discussion
with no one happy about having to again have special property
assessments in the district but no one wanted to walk away
2
from the progress that has been made downtown. The three-
year BID renewal proposal calls for $115,000 in revenues,
down from about 165,000 in the current BID. With the same
rates, the reduction was created by shrinking the size of the
BID to include just Western Avenue, Third Street, Clay Avenue,
Pine Street, Terrace Street and Third Street. The work plan
was reduced to just landscaping and sidewalk snow removal
within the smaller district. If the BID board will recommend this
plan, there should be a public information meeting prior to
sending the plan to the Muskegon City Commission, which
would have two public hearings before voting on the renewal. A
final decision would be needed by Oct. 31 if a BID special
assessment was to be implemented for 2021. A robust
discussion concluded on a general consensus in support of the
outline staff presented. No vote was taken but staff was
directed to start the renewal process.
g) Changes to downtown snow removal plan
There was some concern discussed on Facebook of weekend
sidewalk snow removal services during heavily attended
events. Downtown, the city DPW and venues will try to better
handled weekend snow storms. As the current snow season
comes to an end, what was learned this year will inform how
the service would be structured going into the 2020-21 snow
season if the BID was renewed. No vote was taken.
h) Marketing and events update
Dave Alexander provided the BID board with an update on
marketing and events for the remainder of the year.
Downtown project update
Dave Alexander provided the BID board an update on
development and construction projects in the agenda packet.
5) Other Business
a) Next meeting is Monday April 27, 8 a.m. at Muskegon City Hall Room 103
6) Adjournment
No Objection
Minutes produced and submitted by Dave Alexander, city of Muskegon business development
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06/22/2020 04:52 PM GL ACTIVITY REPORT FOR CITY OF MUSKEGON Page: il
User: GRANT
FROM 297~70803-5346 TO 297-70803-5352
DB: Muskegon
TRANSACTIONS FROM 01/01/2020 TO 05/31/2020
Date JNL Type Description Reference # Debits Credits Balance
Fund 297 DOWNTOWN MUSKEGON BID
01/01/2020 297-70803-5346 CONTRACTUAL SERVICES BEG, BALANCE 37,606.52
01/22/2020 AP INV DEC 2019 SEASONAL SHOVELING INSTALLM 38312 225.00 37,831.52
01/22/2020 AP INV DEC 2019 SNOW PLOWING INSTALLMENT 38313 1,110.00 38,941.52
01/22/2020 AP INV SALTING FOR SNOW REMOVAL (BID BUDGET 38596 1,120.00 40,061.52
01/22/2020 AP INV JANUARY SHOVELLING INSTALLMENT (BID 38598 225.00 40,286.52
01/22/2020 AP INV JANUARY SNOWPLOWING INSTALLMENT 38599 1,110.00 41,396.52
02/10/2020 AP INV STACKPATH- DDA monthly website hosti 01/21/2020 45.00 41,441.52
02/11/2020 AP INV SALTING IN THE BID DISTRICT 39026 2,400.00 43,841.52
02/11/2020 AP INV BID DISTRICT SNOWPLOWING FOR FEB 202 39046 1,110.00 44,951.52
02/11/2020 AP INV BID SHOVELING FOR FEB 2020 39045 225.00 45,176.52
02/11/2020 AP INV SNOWPLOWING 1144 3RD ST (BID DISTRIC 2345 2,150.00 47,326.52
02/29/2020 GJ JE TO RECORD BID PYMT TO CITY FOR SNOW 5794 48,500.00 95,826.52
03/09/2020 AP INV WOWIE.CO - monthly website hosting f 02/21/2020 45.00 95,871.52
03/11/2020 AP INV PLANTERS IN BID DISTRICT 030120 BID FLOWER 3,000.00 98,871.52
03/11/2020 AP INV PRINT AD IN VISIT MUSKEGON 2020 VISI 20MVG186 1,700.00 100,571.52
03/11/2020 AP INV DOMAIN NAME ANNUAL RENEWAL FOR DOWNT 10810 70.00 100, 641.52
03/18/2020 AP INV HOLIDAYS IN THE CITY PERFORMANCE DEC HOLIDAYS2019 200.00 100,841.52
03/23/2020 AP INV WOWIE.CO - Fix calendar for Downtown 03/14/2020 190.80 101,032.32
04/06/2020 AP INV WOWIE.CO - monthly website hosting £ 03/21/2020 45,00 101,077.32
05/04/2020 AP INV WOWIE.CO - DOWNTOWN MKG WEBSITE HOST 04/21/2020 45.00 101,122.32
05/05/2020 AP INV DOWNTOWN MUSKEGON BID FLOWERS 04222020 8,485.00 109, 607,32
05/18/2020 AP INV WOWLE.CO - DOWNTOWN MSKG WEBSITE HOS 05/06/2020 35.00 109, 642.32
05/21/2020 AP INV DOWNTOWN MUSKEGON PLANTERS BID 05152020 2,000.00 111,642.32
05/31/2020 297-70803-5346 END BALANCE 74,035.80 0.00 111,642.32
01/01/2020 297-70803-5352 PUBLIC RELATIONS BEG. BALANCE 833.00
05/31/2020 297-70803-5352 END BALANCE 0.00 0.00 833.00
TOTAL FOR FUND 297 DOWNTOWN MUSKEGON BID 74,035.80 112,475.32
06/22/2020 04:53 PM GL ACTIVITY REPORT FOR CITY OF MUSKEGON Page: 1/i
eer. Sau FROM 297-00000-1101 TO 297-00000-1101
Der Muskegen TRANSACTIONS FROM 01/01/2020 TO 05/31/2020
Date INL Type Description Reference # Debits Credits Balance
Fund 297 DOWNTOWN MUSKEGON BID
01/01/2020 297-00000-1101 CASH IN BANK BEG, BALANCE 100,132.97
01/24/2020 CD CHK Check: 10 540204 540204 3,790.00 96,342.97
01/31/2020 GJ JE “INTEREST ON INVESTMENTS 5819 40.93 96,383.90
02/10/2020 CD CHK Check: 10 20952 20952 (B) 45.00 96,338.90
02/14/2020 CD CHK Check: 10 540283 540283 3,735.00 92, 603.90
02/14/2020 CD CHK Check: 10 540286 540286 2,150.00 90, 453.90
02/28/2020 GJ JE INTEREST ON INVESTMENTS 5880 28.82 90, 482.72
02/29/2020 GJ JE TO RECORD BID PYMT TO CITY FOR SNOW 5794 48,500.00 41, 982.72
03/09/2020 CD CHK Check: 10 21172 21172 (E) 45.00 41,937.72
03/13/2020 CD CHK Check: 10 540388 540388 3,000.00 38,937.72
03/13/2020 CD CHK Check: 10 540413 540413 1,700.00 37, 237.72
03/13/2020 CD CHK Check: 10 540438 540438 70.00 37,167.72
03/23/2020 CD CHK Check: 10 21270 21270(8) 190.80 36,976.92
03/27/2020 C CHK Check: 10 540537 540537 200.00 36,776.92
03/31/2020 GJ JE “INTEREST ON INVESTMENTS 5895 16.41 36,793.33
04/06/2020 CD CHK Check: 10 21294 21294 (E) 45.00 36,748.33
04/30/2020 GJ JE 2019 BID PAYOUT TO CITY 5859 113,968.05 150,716.38
04/30/2020 GJ JE TO FIX JE 5859 5917 18,000.00 168,716.38
04/30/2020 GJ JE “INTEREST ON INVESTMENTS 5950 42.81 168,759.19
05/04/2020 CD CHK 10 21482 21482(E) 45.00 168,714.19
05/08/2020 CD CHK 10 540660 540660 8, 485,00 160,229.19
05/18/2020 CD CHK 10 21583 21583(E) 35.00 160,194.19
05/22/2020 CD CHK 10 540727 540727 2,000.00 158,194.19
05/31/2020 297-00000-1101 END BALANCE 132,097.02 74,035.80 158,194.19
TOTAL FOR FUND 297 DOWNTOWN MUSKEGON BID 132,097.02 74,035.80 158,194.19
Legislative Analysis
FISCAL AGENCY
MODIFY ASSESSABLE PROPERTY RULES IN SHOPPING Fen hives a evi
DISTRICTS AND BUSINESS IMPROVEMENT DISTRICTS Eee HOUSE TOW
Analysis available at
Senate Bill 306 (H-1) as reported from House committee http://www. legislature.mi.gov
Sponsor: Sen. Peter MacGregor
1st House Committee: Commerce and Tourism
2nd House Committee: Ways and Means
Senate Committee: Economic and Small Business Development
Complete to 5-19-20
SUMMARY:
Senate Bill 306 would amend 1961 PA 120, known as the Shopping Areas Redevelopment
Act, to make a number of changes, primarily to allow, and provide a framework for, residential
property to be considered assessable property for purposes of principal shopping districts,
business improvement districts, and business improvement zones under the act.
Assessable Property
Currently, in both Chapters 1 and 2 of the act, assessable property generally includes the
district’s real property, with certain exceptions. One exception is if the real property is
classified as residential real property under section 34c of the General Property Tax Act.
The bill would amend Chapter 1 (Principal Shopping Districts) to allow a local governmental
unit to expressly designate certain residential real property as assessable property as part of its
special assessment proceedings. Likewise, it would amend Chapter 2 (Business Improvement
Zones) to allow assessable property to include real property in a zone area classified as
residential real property under the General Property Tax Act only if the plan for the zone area
included it as part of its assessment proceeding.
The bill would also require the board of a business improvement district to include at least one
owner of residential real property if that property was determined assessable by the local
government under the new definition of assessable property.
Special Assessment Process
The act currently requires a local unit of government to undergo a special assessment process
if it chooses to levy special assessments to defray all or part of the cost of an improvement
district.
The bill would add an additional step to the process, stating that any notice required as part of
the special assessment process would have to include a statement that a property owner of
residential real property within a business improvement district or zone could seek a homestead
deferment for a special assessment under the act in the same manner as provided in the
Deferment of Special Assessments on Homesteads Act.
Allocation of assessments
The act currently requires that if the zone plan for an area provides a basis for allocating
assessments other than assessed value, the majority of all parcels included in the zone area—
House Fiscal Agency Page | of3
both by area and by taxable value—would be considered assessable property. Likewise, if the
zone plan for that zone area provided for the allocation of assessments based on assessed value,
the majority ofall parcels included in the zone area, both by area and by assessed value, would
be considered assessable property.
The bill would eliminate these provisions, instead stating that a zone plan would have to
allocate assessments on the basis of the benefit to the assessable property. In addition, the zone
plan used in the BIZ proposal would have to include the formula used in allocating the
assessments on the assessable property if the proposed financing plan included assessments.
Assessment payments
Chapter 2 (Business Improvement Zones) of the act provides that assessment revenue is the
property of the BIZ and not of the city or village in which it is located.
The bill would state, however, that the revenue must first be used to pay the balance of any
outstanding property taxes owed to the city or village, with any remaining amount considered
assessment revenue belonging to the BIZ.
Finally, the bill would update certain references throughout the act to account for passage of
the 2018 Recodified Tax Increment Financing Act.!
MCL 125.981 et al.
BRIEF DISCUSSION:
Certain local governmental units can create principal shopping districts or business
improvement districts, and multiple governmental units can collectively create business
improvement districts. The districts are formed to promote economic development within a
defined area of the unit. Business improvement zones are similar, but are created by a petition
of private property owners.”
Generally speaking, these districts and zones allow a local governmental unit or zone board to
impose an assessment and use the funds to undertake projects that benefit the district or zone,
like parking, landscape and streetscape improvements, and marketing and public relations
campaigns. The law that governs PSDs, BIDs, and BIZs is over 50 years old, and at the time
the law was passed, the districts and zones being contemplated were primarily commercial in
nature. The law thus exempts residential real property from the assessment that supports the
operation of a PSD, BID, or BIZ. Today, these areas are moving toward a mix of commercial
and residential property. Some believe that with active residential real property now located in
these districts and zones, the assessment should be able to be applied to those parcels as well,
as not only do residential owners benefit from many of the projects undertaken in a district,
such as parking and sidewalk snow clearance, but they could have a voice in district and zone
planning and management.
' House Fiscal Agency analysis of 2018 PA 57 (SB 393): http://www. legislature.mi.gov/documents/2017-
2018/billanalysis/House/pdf/2017-HLA-0393-A6285C88.pdf
2 See https://www.miplace.org/4a14e6/globalassets/documents/fact-sheets/business-improvement-district---
principal-shopping-district---business-improvement-zone-pa-120.pdf
House Fiscal Agency SB 306 (H-1) as reported from House committee Page 2 of3
BACKGROUND:
With respect to allowing the inclusion ofresidential property as assessable property in districts
and zones governed by the act, the bill is similar to House Bills 5325 and 5720 ofthe 2017-18
legislative session. Those bills were passed by both the House and the Senate and enrolled, but
were vetoed by the governor on December 28, 2018. In his veto letter,? Governor Snyder wrote
that, while he appreciated the goal of expanding the properties against which special
assessments could be levied, he believed that the issue merited “further discussion and
consideration, including whether it is appropriate for residential taxpayers to be assessed in
[the manner described in the bills].”
FISCAL IMPACT:
The bill would have no net impact on revenues for principal shopping districts, business
improvement districts, or business improvement zones. However, the bill, by authorizing a
local unit to include residential real property as assessable property for any of the districts,
would change the distribution of the special assessment liability if a local government
expressly designated residential real property as assessable property.
The bill would have no fiscal impact on state government.
POSITIONS:
A representative of Downtown Grand Rapids, Inc. testified in support of the bill. (5-19-20)
The following entities indicated support for the bill:
Michigan Economic Development Corporation (2-20-20)
City of Grand Rapids (1-16-20)
Michigan Retailers Association (1-16-20)
Michigan Municipal League (1-16-20)
Michigan Townships Association (1-16-20)
Detroit Riverfront Conservancy (5-19-20)
Invest Detroit (1-16-20)
Detroit Development Partnership (5-19-20)
e Michigan Economic Developers Association (2-20-20)
Legislative Analysts: Emily S. Smith
Jenny McInerney
Fiscal Analyst: Ben Gielezyk
m This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations, and does not constitute an official statement of legislative intent.
3https://content.govdelivery.com/attachments/MIGOV/2018/12/27/file_attachments/1 129835/HBs%205325%20and
%205720%20Veto%20Letter.pdf
House Fiscal Agency SB 306 (H-1) as reported from House committee Page 3 of3
Legislative Analysis
FISCAL
Acency
LIQUOR CONTROL CODE AMENDMENTS Phone: (517) 373-8080
http://www.house.mi.gov/hfa
House Bill 5781 (H-3) as reported from committee Analysis available at
Sponsor: Rep. Michael Webber http://www. legislature.mi.gov
House Bill 5811 (H-6) as reported from committee
Sponsor: Rep. Sarah Anthony
1st Committee: Regulatory Reform
2nd Committee: Ways and Means
Senate Bill 942 (H-3) as reported from House committee
Sponsor: Sen. Aric Nesbitt
House Committee: Ways and Means
Senate Committee: Regulatory Reform
Complete to 6-17-20
SUMMARY:
House Bills 5781 and 5811 and Senate Bill 942 would amend the Michigan Liquor Control
Code to do the following:
Until December 31, 2024, allow certain on-premises licensees and manufacturers to
obtain a permit to sell alcohol for consumption in the commons area of a social district.
(HB 5781)
Until December 31, 2025, allow certain on-premises licensees and manufacturers to fill
and sell a qualified container with alcohol for consumption off the licensed premises
and deliver a container to a Michigan consumer under certain conditions. (HB 5811)
For spirits bought by on-premises retailers from specially designated distributors,
change the allowable amount and the time period over which that amount is calculated,
and require reports to the Michigan Liquor Control Commission (MLCC). (SB 942)
Increase, from 17% to 23%, the discount allowed to on-premises licensees on liquor
bought from the state, for the 12 months after the bill is enacted. (SB 942)
Allow a mixed spirit manufacturer to sell or provide samples of its mixed spirit drink
at certain off-premises tasting rooms under certain circumstances. (SB 942)
Beginning March 1, 2020, allow manufacturers to refund or replace purchases of beer
or wine by wholesalers when the beer or wine has gone out of date or when the
wholesaler has refunded or replaced a retailer’s purchase for similar reasons. (SB 942)
Allow an on-premises licensee to sell and advertise two-drink specials. (SB 942)
House Fiscal Agency Page | of8
House Bill 5781 would allow, through December 31, 2024, a qualified licensee to obtain
a permit to sell and dispense alcohol to customers for consumption in the commons area of
a social district.
Qualified licensee would mean either of the following:
e A retailer that holds a license, other than a special license, to sell alcoholic
liquor for consumption on the licensed premises.
e A manufacturer that has an on-premises tasting room permit, off-premises
tasting room license, or joint off-premises tasting room license issued under the
code.
Commons area
Currently, an on-premises license allows the licensee to sell alcohol for consumption only
on the licensed premises. The bill would allow the governing body of
a local governmental
unit to designate a social district containing a commons area that could be used by a
qualified licensee that obtained a social district permit.
Local governmental unit would mean a city, township, village, or charter authority.
Commons area would mean an area within a social district that is clearly designated
and clearly marked by the governing body of the local governmental unit and that
is shared by and contiguous to the premises of at least two qualified licensees. A
commons area would not include the licensed premises of any qualified licensee.
The governing body could not designate a social district that closed a road without the prior
approval of the road authority with jurisdiction. The governing body of the local
governmental unit would have to define and clearly mark the commons area with signs and
submit to the MLCC local management and maintenance plans for the commons area,
including hours of operation. The governing body would have to maintain the commons
area in a way that protected the safety and health of the community. The governing body
could revoke the social district designation, after at least one public hearing on the proposed
revocation, if it determined that the commons area was a public nuisance or threatened the
health, safety, or welfare of the public. A designation or a revocation would have to be
filed with the MLCC.
Social district permit
A qualified licensee whose licensed premises were shared by and contiguous to a commons
area in a designated social district could obtain an annual social district permit from the
MLCC. A social district permit would allow the permittee to sell alcohol for consumption
within the confines of a commons area as long as the permittee only sold and served
alcoholic liquor on its licensed premises and only served alcohol to be consumed in the
commons area in a container meeting all of the following:
e It is not glass.
e Its liquid capacity does not exceed 16 ounces.
e It prominently displays a logo or other mark unique to the commons area.
House Fiscal Agency HBs 5781 (H-3) and 5811 (H-6) and SB 942 (H-3) as reported Page 2 of8
e It prominently displays the permittee’s trade name or logo or some other mark unique
to the permittee under its on-premises license.
A person who bought a container of alcoholic liquor from a social district permittee as
described above could take the container from the permittee’s premises and into the
commons area but could not take it out of the commons area or onto the licensed premises
of another social district permittee. Alcohol consumption in the commons area as allowed
by the bill would be limited to the legal hours for the sale of alcohol by the permittee.
A social district permit would have to be issued for the same period and be renewed in the
same manner as an applicant’s on-premises license. The MLCC would have to develop an
application for a social district permit. The permit fee would be $250, which would be
deposited into the Liquor Control Enforcement and License Investigation Revolving Fund.
The governing body of the local governmental unit where the applicant’s place of business
is located would have to approve a permit before an application could be made to, or a
permit granted by, the MLCC.
Finally, ifthe MLCC issued a special license to a special licensee located in a social district,
the special licensee could not sell and serve alcohol under the special district permit while
the special license was in effect.
The bill’s provisions would no longer apply after December 31, 2024.
MCL 436.2021 and proposed MCL 436.1551
House Bill 5811 would allow a qualified licensee to fill and sell a container with alcoholic
r for consumption off the licensed premises and to deliver the container to a consumer
higan under certain conditions. (Qualified licensee would have the s: meaning
as in HB REI, above.)
Under the bill,“notwithstanding anythingin the code to the contrary, a qualified licensee
could fill and sell qualified containers with alcoholic igor for consumption off the
premises under the following conditions: hv
e The qualified licensee or his or her agent or employee does not fill a qualified container
in advance of the sale.
e The qualified licensee or his or her age ; seals the qualified container.
e The qualified licensee complies with | applicable rules promulgated by the MLCC.
Qualified container would mean a clean, sealable container thatis for the sale of
alcoholic liquor for c¢ sumption off the premises, that: has a liquid capacity that
does not exceed ong’ ggallon, and thatis sealed after filling with a substance or device
that fully closes/off the container securely with no perforations or.straw holes.
Alcoholjé liquor means any spirituous, vinous, malt, or fermented igdbtspowder,
liquids, and compounds, whether or not medicated, proprietary, or patented, and by
whatever name called, containing 1/2 of 1% or more of alcohol by volume that are
House Fiscal Agency HBs 5781 (H-3) and 5811 (H-6) and SB 942 (H-3) as reported Page 3 of8
The bill would amend the above prohibition to apply to the sale or advertisemiént of three
«more identical drinks and provide that if three or more drinks are servedat one time, the
third\must cost the same as the first. Under the bill, an on-premises licensee could sell,
offer to-sell, or advertise the sale of two drinks for one price or sell the second identical
drink for a different price than the first. However, except on prior written order by the
MLCC, the licensee could not sell alcoholic liquor to an individual under these provisions
for a price that is less than-the licensee’s cost for the alcoholic liquor.
MCL 436.1205 et seq. -
The bills are tie-barred to one another, which means that none a Pei could take effect
unless all of them were enacted.
FISCAL IMPACT:
> House_Bill_ 5781 would have an indeterminate fiscal impact on the Department of
Licensing and Regulatory Affairs (LARA) and local units of government. The bill would
require the MLCC, within LARA, to issue social district permits. A $250 fee would be
established for the social district permit. Revenues from this fee would be deposited to the
Liquor Control Enforcement and License Investigation Revolving Fund, which is
appropriated for the MLCC’s enforcement of the Michigan Liquor Control Code and
associated rules and for license investigations. It is unclear what the costs of administration
would be for the MLCC, so the net fiscal impact is presently indeterminate. The bill would
create administrative responsibilities for local governments that choose to designate a
social district, requiring the establishment of local management and maintenance plans,
maintenance of commons areas, commons area signage, and approval of social district
permit applications. The magnitude of these costs for local units of government is presently
indeterminate.
House Bill
il 5811wouldhave
not a-significant fiscal impact
on|
on LARA.
Senate Bill 942 would have a significant fiscal impact on LARA an funds. The
MLCC, within LARA, would be responsible for establishing a ting method and form
for on-premises retailers atpurchase spirits from Spey ally Pciendtod distributors under
amount of this reductionis presently indeterminate.
The impact of refunds to wholesalers by liquor manufacturers would be indeterminate, as
it would depend on the volume of liquor subject to refund.
House Fiscal Agency HBs 5781 (H-3) and 5811 (H-6) and SB 942 (H-3) as reported Page 6 of8
POSITIONS:
A representative of the Michigan Restaurant and Lodging Association testified in support
ofthe bills. (6-17-20)
The following entities indicated support for the bills (6-17-20):
Michigan Licensed Beverage Association
Bedrock
Michigan Spirits Association
Representatives of the following entities testified in support of HB 5781:
Cotton Brewing (6-17-20)
Grand Rapids Chamber (6-3-20)
Barfly Ventures (6-3-20)
Downtown Grand Rapids, Inc. (6-3-20)
The following entities indicated support for HBs 5781 and 5811:
City of Grand Rapids (6-17-20)
Detroit Regional Chamber (6-17-20)
Traverse City Tourism (6-17-20)
Saginaw Chamber of Commerce (6-17-20)
Northern Michigan Chamber Alliance (6-17-20)
Bay Area Chamber of Commerce (6-17-20)
Lansing Regional Chamber (6-17-20)
Southwest Michigan First (6-17-20)
Midwest Independent Retailers Association (6-3-20)
The following entities indicated support for HB 5781:
Michigan West Coast Chamber of Commerce (6-17-20)
Muskegon Lakeshore Chamber of Commerce (6-17-20)
Lakeshore Advantage (6-17-20)
The Chamber of Grand Haven, Spring Lake & Ferrysburg (6-17-20)
Midland Business Alliance (6-17-20)
City of Muskegon DDA (6-17-20)
Michigan Municipal League (6-3-20)
City of Muskegon (“in concept” 6-3-20)
Michigan Downtown Association (6-3-20)
Michigan Chamber of Commerce (6-3-20)
Oakland Community College (6-3-20)
Ilitch Holdings (6-3-20)
The following entities indicated support for HB 5811:
Downtown Grand Rapids, Inc. (6-17-20)
Grand Rapids Chamber (6-17-20)
R Street Institute (6-3-20)
House Fiscal Agency HBs 5781 (H-3) and 5811 (H-6) and SB 942 (H-3) as reported Page 7 of8
The Michigan Liquor Control Commission indicated a neutral position on the bills.
(6-17-20)
The Michigan Council on Alcohol Problems indicated opposition to HBs 5781 and 5811.
(6-3-20)
Michigan Alcohol Policy indicated opposition to HB 5781. (6-3-20)
Legislative Analysts: Rick Yuille
Susan Stutzky
Fiscal Analyst: Marcus Coffin
m This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations, and does not constitute an official statement of legislative intent.
House Fiscal Agency HBs 5781 (H-3) and 5811 (H-6) and SB 942 (H-3) as reported Page 8 of8
Future of Downtown BID, LSM 11-21-19
While the positive growth and development in our downtown is generating revenue for our Downtown
Development Authority, the partnership with the Downtown Business Improvement District needs to
continue. The funds generated through the Business Improvement District are essential to caring for the
landscaping and removing snow until the DDA funding is able sustain these activities.
There were a number of property owners within the downtown area that would eventually become the
BID, and these owners invested even as the mall was being demolished and much of downtown was
empty. Further development in the downtown was spurred by the city’s efforts to re-establish the
street grid with an attractive streetscape, and more property owners were added to the eventual
district. For the past 4 years, the revenue from the property owners has helped the city maintain the
streetscape and market the downtown to spur additional interest and development. Everyone,
including the city government and citizens, benefit from every dollar of contributions from the property
owners within the BID. We are creating long term opportunities for success in the downtown.
The unfortunate fact is that the city cannot fund these efforts alone, and the vast majority of the DDA
revenue must be used to pay the city’s last debts related to the Muskegon Mall. The remainder of the
limited budget is dedicated to funding prior commitments to improvements at the arena, maintenance
at downtown parks, and staff time to serve the DDA through marketing, events, development
assistance, and brownfield administration. The investments made in the greater downtown area are
inherent to the revitalization of our city. We have seen in numerous cases how early local government
and non-profit financing of the arena, dog park, farmer’s market, Western Market, and Midtown Square
has attracted more visitors and sparked interest by private developers in the downtown and near
downtown neighborhoods. Growth and continued development are spurred by these early ventures
because we have proven that investments in our downtown are not only secure but yield good returns.
Without the support of the BID board, the special assessment will not succeed, and the city will need to
find other revenue sources. The simplest method would be to implement paid parking on downtown
streets. However, city staff are not confident that implementing paid parking at this time is viable, and
we fear it will have a chilling effect on visitors to downtown businesses. Our preference is to work with
the property and business owners downtown to develop a phased approach to paid parking.
The pace of development depends on the beautification efforts within the BID. With large areas (17
acres) of undeveloped vacant land remaining in the downtown, we know there is more work to do. All
of the properties downtown are linked to each other and to the city government, and we will all succeed
or fail together.
To continue to build and develop our downtown, we must partner and pool funds to enhance the
attractive and vibrant atmosphere. Much like the DDA mission to create a thriving downtown where all
people want to live, work, play, and stay, our goal is to maintain and improve the quality of the
customer experience downtown so that every business and property can prosper. In the short term, the
most efficient and effective way to do that is to add another 3 years to the downtown BID special
assessment for a smaller overall district as shown on the map provided.
Proposed BID budget 2021
2021 estimated BID revenues * $115,000
*Based upon the
current annual 0.08
cent a square foot of
land capped at $4,000
per property owner.
2021 general BID expenditures
Snow removal $65,000
Landscaping $30,000
Marketing, promotion, events 0
Streetscape 0
Administration $17,000
Contingency $3,000
Total $115,000
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