Approved Agreements and Contracts 2022-12-13 Adelaide Pointe Amendment Agreement

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                          FIRST AMENDMENT TO DEVELOPMENT AND
                          REIMBURSEMENT AGREEMENT
                                          ADELAIDE POINTE

("Agreement") is made~~ (,2022 ("Effective Date") between the City of Muskegon
Brownfield Redevelopment Authority ("Authority"), a Michigan public body corporate, with an
address of 933 Terrace Street, Muskegon, MI 49440 ("Authority"), City of Muskegon, a Michigan
Municipal Corporation ("City"), with an address of 933 Terrace St., Muskegon, MI 49440, and Adelaide
Pointe Qozb, LLC ("APQ"), with an address of 1204 W. Western Avenue, Muskegon, MI 49441.
Authority, City and APQ are at times referred to as a "Pa1ty" or together as "Parties".

        APQ owns approximately 30 acres of waterfront brownfield property which is located at the west
end of West Western Avenue within the City of Muskegon.

         The City owns ce1tain prope1ty adjacent to, and to the east of, the APQ Prope1ty commonly known
as Hmtshorn Marina which the City has previously used for public small boat slip rentals and related
activities. The APQ Prope1ty and the City Prope1ty may be collectively referred to as the "Property".

        APQ and the City have entered into a "Cooperative Use and Development Agreement" which
substantiates APQ's and the City's desire to a) utilize each other's specified property for beneficial use b)
cooperate in the pursuit of funding for improvements to each other's Property c) assist one another with
applications and approvals for improvements and d) make improvements as specified in the APQ PUD
approved by the City Commission on September 13, 2022.

        APQ intends to develop the Prope1ty for mixed uses including boat storage, boat dockage, in-out
boat service, marinas, residential condominiums, commercial uses, and open space and recreational areas
("Development"). The specific improvements to be included in the Development will be defined in the
Cooperative Use Agreement, addendums to this Agreement and the Planned Unit Development Agreement
("PUD") to be submitted to the City ("Development Agreements").

       Authority, City and APQ entered into a Development and Reimbursement Agreement effective
_ _, 202       which was approved by the Authority on November 9, 2021 and by the City on November
23, 2021. Pursuant to that Agreement, APQ and City were to perform "eligible activities" and be
reimbursed, as defined and provided for in that Agreement.

The Parties agree as follows and that to the extent this Agreement and the
Development and Reimbursement Agreement vary, this Agreement shall control:
        1.      Background. The Patties agree the Background paragraphs are true and correct and are
                incorporated into the body of this Agreement.

        2.      Improvements. APQ will develop both the APQ Prope1ty and the City Property as a
                mixed-use development including boat storage, boat dockage, in-out boat service, marinas,
                residential condominiums, commercial uses, and open space and recreational areas.

3.   Indemnity and Insurance. APQ holds the City harmless and will indemnify the City for
     any liability, including attorney fees, resulting from the engineering, design and
     construction of the Project. City and APQ will name the other on their respective general
     liability insurance policies.

4.   Changes, Standards and Dedication. All improvements must be made according to the
     plans and specifications of the APQ PUD approved by the City. All construction of Public
     Improvements must be completed to the standards established by the City of Muskegon
     ("City Standard"). The City will accept a dedication of all or any portion of the Public
     Improvements only if built to City Standards.

5.   Addendum Presentation. APQ shall, from time to time, present addendums to the City
     that detail discrete development projects that improve the Propetty according to the PUD.
     To the extent the addendums addresses "eligible expenses" and expenses to be reimbursed
     by the Authority, the addendums shall also be provided to the Authority for purposes of
     Amending the Development and Reimbursement Agreement and the Brownfield Plan.
     These addendum shall detail Authority, City and APQ obligations to one another and shall
     include but not be limited to:
     a. Architectural and/or Engineering drawings
     b. Construction schedules
     c. Construction budgets
     d. Itemization of relevant Brownfi,eld Reimbursements that will be paid to APQ by City
     e. Proof of financing

6.   Addendum Approvals. Upon receiving necessary Authority and City approvals of each
     Addendum all parties shall be obligated to· perform under the obligations detailed in the
     addendum. Approvals by Authority and City shall not be unreasonably withheld if they
     are compliant with improvements approved in APQ's PUD.

7.   Funding for Brownfield Reimbursements.

     a.   Bonds for roads, water mains and sewer mains. The City or Authority, in the City's
          and Authority's sole discretion as to which is the borrower, upon approval of an
          Addendum shall sell municipal bonds in an amount equal to the total amount necessary
          to pay for roads, water mains, and sewer mains on the Property required by the
          addendum, supported by engineering and construction bids itemized in the
          addendum(s) to this Agreement. City or Authority shall be entitled to retain an
          engineer of its choosing to review all drawings and inspect all amenities that are
          expected to be eventually turned over to the City in order to insure that the amenities
          are constructed to city standards, to develop as-built drawings, and otherwise represent
          the City and Authority on the construction of the public amenities. The cost of the
          City's or Authority's retained engineer shall be paid for from the bond. At no point
          may the Authority's and City's total borrowing, whether still outstanding or not,
          exceed an aggregate amount of $10,500,000, including the cost of Civil Engineering
          expenses paid by APQ up until the date of this agreement and the City's or Authority's
          engineer. The bond proceeds shall be available to reimburse APQ the costs related to
          the costs for roads, water mains and sewer mains approved in the itemization of
          Brownfield Reimbursements detailed in each addendum. APQ may apply to the
          Authority for draw of such bond proceeds. If the draw request includes the proper
          documentation, the Authority will pay the draw within 15 days ofreceipt of the request,
          subject to and in accordance with the following requirements and conditions.

          i. All draw requests shall be in writing together with all supp01ting
             documentation, including receipts, and not be made more frequent than 30 day

         11.    Each draw request shall include the most recent Sworn Statement and
               corresponding lien waiver from every contractor, sub-contractor, and
               supplier who will be paid from that draw.

b.   Brownfield Tax Increment Financing. APQ has submitted to the Authority an
     amendment to the current brownfield plan. Pursuant to the Brownfield Redevelopment
     Financing Act, Act 381 of the Public Acts of Michigan of 1996 as amended ( "Act
     381 ") the Authority adopted the brownfield plan amendment on October 12, 2021 (the
     "Brownfield Plan Amendment") to add the APQ Property.

          1.   The Prope1ty is included in the Brownfield Plan Amendment as an "eligible
               property" because it is a "facility" as defined by Part 201 of the Natural
               Resources and Environmental Protection Act ( "Pait 201 ").

         ii. Neither the City nor APQ is a liable paity, under Pait 201, for remediation of
             any existing contamination on the Prope1ty.

        iii. APQ has and will continue to conduct Eligible Activities (as defined in Act
             3 81) on the Prope1ty to address environmental and other brownfield
             conditions, in addition to the construction of roads, water mains and sewer
             mains, in a collaborative eff01t to position the Property for redevelopment.
             Actual expenditures by the Paities to unde1take eligible environmental
             activities on the Prope1ty are estimated to be $35 million dollars not including
             interest. Eligible demolition and site preparation costs incurred by these same
             pa1ties is estimated to exceed $13 million dollars. These efforts are aimed at
             facilitating the redevelopment of the Prope1ty as a transformational mixed-use
             project, including residential and various commercial uses (the "Project").

        iv. The Project will include demolition activities, performance of baseline
            environmental assessment activities, due care and other environmental
            response activities, site preparation activities, demolition activities,
            construction of infrastructure improvements, Brownfield Plan Amendment
            and work plan preparation, contingency, interest and other Eligible Activities,
            all as described in the Brownfield Plan Amendment and eligible for
            reimbursement under Act 381.

        v. The cost of Eligible Activities may be incurred by the City and APQ, The total
           cost of the Eligible Activities in the Brownfield Plan Amendment, including
           contingencies, is estimated to be $35 million dollars (the "Total Eligible
           Brownfield TIF Costs"). To accommodate the lapse in time from when costs
           of Eligible Activities are incurred to when tax increment revenues become
           available for reimbursement of those costs, interest at the rate of 5% per annum
           is also included in the Brownfield Plan Amendment in the estimated total
           amount of $28 million dollars (collectively, the interest plus the costs of
           Eligible Activities are referred to as the "Total Eligible Brownfield TIF

 vi. The Eligible Activities will facilitate redevelopment of the Property which will
     improve the environmental and aesthetic condition of the Property, increase
     employment within the City, increase tax base within the City, and otherwise
     enhance the economic vitality, environmental health and quality of life in the

vii. Act 381 permits the Authority to capture and use the school tax (where
     applicable), if permitted by the state, and local property tax revenues (both real
     and personal prope1ty) generated from the incremental increase in prope11y
     value of a redeveloped brownfield site constituting an "eligible prope1ty"
     under Act 3 81 to pay or to reimburse the cost of Eligible Activities conducted
     on the "eligible prope1ty" (the "Brownfield TIF Revenue").

viii. In accordance with Act 3 81, the parties desire to establish a procedure for using
      the available Brownfield TIF Revenue generated from the Prope1ty to
      reimburse the City and APQ for completion of Eligible Activities on the
      Prope1ty in amounts not to exceed the Total Eligible Brownfield TIF Costs.

 ix. During the Term (defined below) of this Agreement, the Authority shall
     reimburse the City first for the total cost of the bonds (principal, interest and
     transaction costs) incurred and to be incurred for roads, water mains and sewer
     mains and after the City has been paid the amount the City has committed to
     pay APQ for the roads, water mains and sewer mains, then to APQ for the cost
     of Eligible Activities conducted on the Prope1ty from the Brownfield TIF
     Revenue collected from the Property in accordance with the Brownfield Plan
     Amendment, unless modified by later addendums or amendments. The amount
     reimbursed to the APQ for the Eligible Activities shall not exceed the lesser of
     (a) the cost of Eligible Activities incurred by the Property Owner plus interest,
     or (b) the Total Eligible Brownfield TIF Costs plus interest. The Authority
     shall capture Brownfield TIF Revenue from the Prope11y and reimburse the
     City for the cost of the bonds (principal, interest and transaction costs) for
     roads, water mains and sewer mains and APQ for the cost of Eligible Activities
     incurred by the Patties until the earlier of the Patties being fully reimbursed or
     December 31, 2056 ("Term"). If the Term ends before the full reimbursement
     of all Total Eligible Brownfield TIF Costs, the last reimbursement payment by
     the Authority shall be the summer and winter tax increment collected during
     the final year of this Agreement.

  x. Reimbursement payments shall be made on a semi-annual basis as incremental
     local and school taxes are captured and available.

 xi. During the term of this Agreement, the Authority shall capture all approved
     and authorized Brownfield TIF Revenue from the Prope11y and use those
     revenues as provided in this Agreement.

xii. Intentionally left blank.

xiii. Reimbursement Process.

1.   APQ shall periodically submit to the Authority a "Request for Cost
     Reimbursement" of Eligible Activities paid for by APQ during the
     term of this Agreement. All costs for the Eligible Activities must be
     consistent with the approved Brownfield Plan Amendment. APQ must
     include documentation sufficient for the Authority to determine
     whether the costs incurred were for Eligible Activities, including
     detailed construction draws or invoices and proof of payment or lien
     waivers. Copies of all invoices for Eligible Activities must note what
     Eligible Activities they support.

2.   Within fo11y-five (45) days after a Request for Cost Reimbursement
     has been reviewed and approved by the City's or Authority's engineer
     as required in Section 7.a and reviewed and approved by the Authority
     or designate as to whether it is an "eligible expense", and after the
     Authority or City has been fully paid for roads, water mains and sewer
     mains, the Authority shall pay to APQ the amounts for which
     submissions have been made pursuant to this Agreement, less a 10%
     retainage until all of the water mains, sewer mains and road
     construction is completed and accepted by the City. The Authority's
     obligation to pay APQ is limited to available Brownfield TIF Revenue
     from the Prope11y.

3. All requests for Cost reimbursement submitted by APQ for each
   approved Addendum between City, APQ, and the City of Muskegon
   Brownfield Redevelopment Authority and all requests for cost
   reimbursement submitted by future owners of all or a po11ion of the
   APQ Prope11y pursuant to a separate Development and
   Reimbursement Agreement(s), shall be reimbursed in the order in
   which they are received by the City of Muskegon Brownfield
   Redevelopment Authority from the portion of the Brownfield TIF
   revenue, excluding the po11ion to be paid to City which shall be paid
   first, as described above.

4.   The Patties shall cooperate with the Authority's review by providing
     information and documentation to supplement the Request for Cost
     Reimbursement which may be reasonably requested by the Authority
     during its review period.

5.   All or any p011ion of any Request for Cost Reimbursement that is not
     paid within 45 days after receipt by the Authority shall accrue simple
     interest at the rate of five percent (5%) per annum from the date the
     Request for Cost Reimbursement is submitted to the Authority for
     payment until the earlier of the date of full reimbursement, including
     interest. The payment of interest shall be subject to the following
     limitations (i) to the extent there is not sufficient Brownfield TIF
     Revenue captured and collected in a fiscal year and permitted to be
     used to pay interest accruing in such fiscal year, any unpaid interest
     shall not be paid, but shall carry over to the next fiscal year, (ii) interest
     carried over to subsequent fiscal years shall not accrue interest (i.e.,

              no interest on interest), and (iii) interest on School Taxes captured
              shall only be payable to the extent permitted by the Michigan Strategic
              Fund ( "MSF ") and/or the Michigan Department of Environment,
              Great Lakes and Energy ( "MEGLE ").

         6.   The Authority shall have no obligation to reimburse the City or any
              other entity for Eligible Costs or interest from Brownfield TIF
              Revenue captured after 3 5 years after the date of the adoption of the
              Development and Reimbursement Agreement.

xiv. Allocation of Base Value and Priority of Reimbursements.

         1.   The initial taxable value of the Propetty as of the date of this
              Agreement is $903,810, as set forth in the Brownfield Plan
              Amendment ( "Base Value"). If the Property is divided into two or
              more separate taxable parcels in connection with the development of
              the Project, the Base Value shall be allocated to each resulting parcel
              based upon the relative number of square feet of each parcel. The Base
              Value allocated to a separate undeveloped parcel in this manner shall
              be the base value of that parcel for purposes of calculating Brownfield
              TIF Revenue, regardless of when any Development and
              Reimbursement Agreement is entered into in connection with the
              redevelopment of that parcel. Brownfield TIF Revenue generated
              from any separate parcel divided from the Prope11y after the date of
              this Agreement shall be available for reimbursement of the
              Authority's Administrative Fee and payment of all requests for cost
              reimbursement submitted by owners of all or any portion of the

         2.   Notwithstanding any provision in this Agreement to the contrary, the
              Authority's annual TIF Management Administrative Fee, as described
              in the Brownfield Plan Amendment, shall be paid to the Authority
              each year to the extent that Brownfield TIF Revenue has been captured
              and collected during that year, prior to the payment of any Request for
              Cost Reimbursement.

xv.   Adjustments.

         1. Until the cost of eligible activities is fully reimbursed, APQ agrees to
              waive any appeal of any tax assessment or reassessment of any pot1ion
              of the Prope11y; provided, however, that this waiver shall not be
              binding on any person or entity who acquires title to all or any portion
              of the Prope1ty after the date of this Agreement.

         2.   If, due to an appeal of any tax assessment or reassessment of any
              portion of the Property, or for any other reason the Authority is
              required to reimburse any Brownfield TIF Revenue previously paid to
              the City, APQ or any future owner to any tax levying unit of
              government, the Authority may deduct the amount of any such

                           reimbursement, including interest and penalties, from any amounts
                           due and owing the City and APQ. If all amounts due the City and APQ
                           under this Agreement have been fully paid or the Authority is no
                           longer obligated to make any fmther payments to the City or APQ, the
                           Authority shall invoice the City and APQ for the amount of such
                           reimbursement and the City and APQ shall pay the Authority such
                           invoiced amount within 45 days of receipt of the invoice. Amounts
                           invoiced and paid to the Authority by the City or APQ pursuant to this
                           Section shall be reinstated as Eligible Activities for which the City and
                           APQ shall have the opportunity to be reimbursed in accordance with
                           the terms, conditions and limitations of this Agreement.

            xvi. Legislative Authorization.

                   This Agreement is governed by and subject to the restrictions set fo11h in Act
                   381. If there is legislation enacted in the future that alters or affects the amount
                   of Brownfield TIF Revenue subject to capture, eligible prope11y, or Eligible
                   Activities, then the Property Owner's rights and the Authority's obligations
                   under this Agreement shall be modified accordingly as required by law, or by
                   agreement of the paities.

8.    Notices. All notices, approvals, consents and other communications required under this
      Agreement shall be in writing and shall be deemed given: (i) when delivered in person; (ii)
      when sent by fax or email: (iii) when sent by a nationally-recognized receipted overnight
      delivery service with delivery fees prepaid; or (iv) when sent by united states first-class,
      registered, or certified mail, postage prepaid. The notice shall be effective immediately
      upon personal delivery or upon transmission of the fax or email; one day after depositing
      with a nationally recognized overnight delivery service; and five days after sending by first
      class, registered, or ce1tified mail. Notices shall be sent to the paities as follows:

      To: City of Muskegon                                         To: APQ
      933 Terrace Street                                           1204 W. Western Ave.
      Muskegon,MI49440                                             Muskegon, MI 49440
      Attn: City Manager                                           Attn: Ryan Leestma

      w/copy to:                                                   w/copy to:

      Parmenter Law                                                Jaffe, Raitt Heuer & Weiss, P.C.
      601 Terrace Street                                           27777 Franklin Rd. Suite 2500
      Muskegon, Michigan 49440                                     Southfield, Michigan 48034
      Attn: City Attorney                                          Attn: Kenneth J. Clarkson

9.    Recording. This Agreement shall not be recorded; however, upon the request of either
      paity hereto, the other party shall join in the execution of a memorandum or "short form"
      of this Agreement for the purposes of recordation.

10.   Force Majeure. Notwithstanding anything herein to the contrary, if due to a Force
      Majeure Event (defined below), APQ and/or City is prevented from timely performing
      under this Agreement or any third-paity providing services or required information in
      connection with this Agreement (e.g.: lender, appraiser, title company, surveyor,

      environmental consultants, governmental jurisdictions, etc.) closes its offices, suspends
      operations or otherwise prevents APQ and/or the City from timely performing under the
      Agreement as originally contemplated, then the applicable outstanding dates, deadlines or
      time periods herein, shall each be extended for the duration of the Force Majeure Event
      and shall resume on such date that APQ and the City, as applicable, are once again able to
      perform their obligations under this Agreement. To invoke the tolling of time periods as
      set forth herein for a Force Majeure Event, the applicable pa1ty must send written notice to
      the other party specifying the reason for invocation and the date on which the tolling of
      time begins and a subsequent notice shall be delivered to confirm the date the Force
      Majeure Event ended. The term "Force Majeure Event" as used herein shall mean the
      following: Act of God; strike, lockout, or other labor or industrial disturbance; war;
      blockade; public riot; fire; storm; flood; explosion; or other delay caused by unforeseeable
      circumstances beyond the reasonable control of APQ or the City as applicable, including
      widespread sickness (including sickness causing quarantine and other "stay at home" or
      "shelter in place" orders, and including, but not limited to, the Coronavirus Disease 2019.

11.   Severability. If any term, provision or condition contained in this Agreement shall, to any
      extent, be invalid or unenforceable, the remainder of this Agreement ( or the application of
      such term, provision or condition to persons or circumstances other than those in respect
      of which it is invalid or unenforceable) shall not be affected thereby, and each term,
      provision or condition of this Agreement shall be valid and enforceable to the fullest extent
      permitted by law.                            ·

12.   Miscellaneous. This Agreement may be amended or modified only by the written
      agreement of APQ and City. Each exhibit attached to this Agreement is incorporated and
      made a pai1 of this Agreement as though more fully set forth in this Agreement. If the
      deadline for performing any act would otherwise fall on a weekend day or a holiday, such
      deadline shall automatically be extended to the next succeeding business day. This
      Agreement shall be interpreted under and governed by the laws of the State of Michigan.
      All representations and warranties made in this Agreement by APQ and City shall survive
      the termination of this Agreement for a period of one year.

13.   Counterparts; Electronic Signatures. This Agreement may be executed in any number
      of counterpaits, each of which shall be deemed to be an original, but all of which together
      shall be deemed to be one and the same instrument. Electronically imaged signatures may
      be used in place of original signatures on this Agreement. APQ and City intend to be bound
      by the signatures on the electronically imaged document, are aware that the other party will
      rely on such signatures, and hereby waive any defenses to the enforcement of the terms of
      this Agreement based on the form of signature.

14.   Binding Effect. This Agreement shall be binding upon and enforceable by the parties and
      their respective legal representatives, successors, and assigns.

15.   Assignment or Delegation. Neither party shall assign or delegate all or any p01tion of its
      rights or obligations contained in this Agreement without the express or prior written
      approval of the other paity, in which approval may be withheld in the other party's sole

16.   Estoppel. If requested by APQ, City will provide an estoppel certificate to such party as
      requested by APQ which certificate shall provide, if true, that the Development
      Agreement and the exhibits represent the entire agreement between APQ and City and
      that no defaults exist under the Development Agreement and no events have occurred
      that would, with notice or the expiration of a period of time, constitute a default.

                              [Signature Page Follows]


a Michigan public body

Title: Chair
Date: _ _     l_--_1~7_ _,2m c)"3


Title: Secretary
Date: _ _ _ _ _ _ _ _, 2022


a municipal corporation

Name: Kenneth D. Johnson
Title: Mayor

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