Approved Agreements and Contracts 1601 Beach Lease Agreement 02-11-20

View the PDF version Google Docs PDF Viewer

                     Agenda Item Review Form
                                                  us                   _ GO
                           Muskegon City Commission

Commission Meeting Date: February 11, 2020            Title: 1601 Beach Lease Amendment

Submitted By: LeighAnn Mikesell                       Department: Development Services

Brief Summary: Staff is requesting approval of an amendment to the existing lease and option
agreements with 1601 Beach LLC to extend the boundary of the land being leased for The Deck at
Pere Marquette Park and to modify the area to which 1601 Beach LLC has an option and first right
of refusal to develop, lease, or purchase.

Detailed Summary: The owners of 1601 Beach LLC are planning an expansion to their restaurant,
The Deck. The expansion is south of the existing building and will include a patio and additional
bar space to accommodate more patrons. In order to proceed with the expansion, the lease
agreement needs to be modified to account for the additional land associated with the expansion.
The city took the opportunity to clarify the option area with the owners and make requested

Amount Requested: None                               Amount Budgeted: N/A

Fund(s) or Account(s): N/A                           Fund(s) or Account(s): N/A

Recommended Motion '.'
Approve the amendment to the lease and option agreement with 1601 Beach LLC at Pere
Marquette Park and authorize the mayor and clerk to sign.

Check if the following Departments need to approve the item first:
Police Dept.  D
Fire Dept.   D
IT Dept. □

For City Clerk Use Only:
Commission Action:
                                   FIRST AMENDMENT TO LEASE

      This First Amendment to Lease ("Amendment") is entered into by and between City of
Muskegon ("City"), a Michigan municipal corporation, and 1601 Beach, LLC, a Michigan limited liability
company ("LLC").


         A.      The City, as ground lessor, and LLC, as ground lessee (referred to in such Lease as
"Harris"), are party to that certain Ground Lease dated December 10, 2013 (the "Lease"}, pursuant to
which LLC currently leases the real property located in the City of Muskegon, County of Muskegon,
Michigan, commonly referred to as 1601 Beach Street, Muskegon, Michigan (Parcel No. 61-24-205-739-
0001-20}, which is referred to as the "Premises" in the Lease. LLC owns the building, physical
improvements, equipment and fixtures located at the Premises, and operates a restaurant business at the
Premises commonly known as "The Deck".

       B.      LLC now desires to expand its restaurant operations and make additional physical
improvements, alterations, and additions to the building and surrounding property, substantially in
accordance with the plans attached to this Amendment as Exhibit A and with those plans prepared by
Concept Design Studios, Inc. (Project #0791-19) dated October 28, 2019 (together, the "Expansion").

        C.      In order to complete the proposed Expansion, the LLC needs to lease additional land
adjacent to the Premises from the City, such that the total area leased from the City shall be that area
depicted on the attached Exhibit B and legally described on the attached Exhibit B-1 (the "Expanded
Premises"), which shall be all of the property commonly known as 1601 Beach Street, Muskegon,
Michigan (Parcel No. 61-24-205-739-0001-20), and a portion of the parcel of real property commonly
known as 1651 Beach Street, Muskegon, Michigan (Parcel No. 61-24-205-734-0001-00).

         D.       The City and LLC now wish to amend the Lease to expand the land leased to LLC to
include all of the Expanded Premises. Capitalized terms not defined herein shall have the meanings of
capitalized terms in the Lease.


        NOW, THEREFORE, in consideration of mutual covenants and conditions contained herein and
for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the City and LLC agree the Lease is amended as follows:

         1.     Expansion of Leased Premises. The Lease is hereby amended to provide that as of the
Effective Date of this Amendment, the Premises leased by the City to LLC pursuant to the Lease shall
instead be the Expanded Premises as depicted on Exhibit B hereto and described on Exhibit B-1 hereto.
All references to the "Premises" and the "leased premises" in the Lease shall hereafter refer to the
"Expanded Premises", and Exhibit Band Exhibit B-1 to this Amendment shall replace Exhibit A to the
Lease. There shall be no increase or other change to the rent charged to LLC under the Lease.

         2.      Use of Expanded Premises. The Expansion proposed by LLC, including all alterations,
structural changes, and additional structures and improvements to the Expanded Premises and buildings
thereon, is approved by the City, provided that LLC will comply with all laws, local ordinances, and lawful
police and health regulations applicable to the use of the Expanded Premises. The additional buildings,
structures and all fixtures, partitions, equipment, trade fixtures, alterations, improvements, or changes
installed by LLC shall be and remain owned by LLC, subject to the terms set forth in the last paragraph of
Section 7 of the Lease. The City will put LLC into possession of the Expanded Premises for the full term
of the Lease, together with any renewal options.

        In addition to the use of the Expanded Premises, the Lease is hereby amended to provide that
LLC will also have the non-exclusive use of the land between the above-described Expanded Premises
and Beach Street, throughout which LLC shall be permitted to make such landscaping alterations,
improvements, and additions from time to time as it reasonably desires, subject to any necessary City
approval and/or any requ ired permits.

         3.      Real Estate Taxes. Pursuant to Section 12 of the Lease, LLC is responsible for paying
all real estate taxes and assessments , both general and special , imposed by federal , state or local
governmental authority, or any other taxing authority having jurisdiction over the Premises, against the
land, buildings and all other improvements. LLC shall continue to be responsible for payment of all real
estate taxes and assessments imposed against the Expanded Premises; provided, however, LLC shall
only be responsible for payment of a pro rata portion of any real estate taxes and assessments imposed
against 1651 Beach Street (Parcel No. 61-24-205-734-0001-00) and the buildings and improvements
thereon, with such pro rata portion equal to the portion (in square feet) of 1651 Beach Street included in
the Expanded Premises and actually leased by LLC, divided by the total area (in square feet) of 1651
Beach Street, as reasonably determined by the parties.

        4.       Ownership. By execution of this Amendment, the City hereby consents to and approves
the prior transfer of ownership interest in LLC.

        5.      Full Force and Effect. This Amendment shall become effective as of the date on which
both parties have executed this Amendment as set forth below ("Effective Date") . Except as specifically
modified by this Amendment, the Lease is unmodified and shall continue in full force and effect.

        6.      Counterparts. This Amendment may be signed in one or more counterparts, each of
which shall be deemed to be an original, with the same effect as if the signatures on this Amendment and
each of the counterparts were on the same Instrument. Electronic copies and signatures sent in PDF
format shall be treated as originals.

The parties hereto have duly executed this Ame      me t to. be effective as of the Effective Date.

LESS                                                              Beach,LLC

Name:        hen J awron                         Name: Fred Scharmer
Title: Mayor
Date:          d::-1q ,, dD,2D                   ~}!~: M8a~!1 4/20
~ .=-~ f y~                     ('9"-
Nae: Ann Marie Meisch
Title: City Clerk
Date:           a---!9- c)-U:W

                                        [First Amendment to Lease]

       Exhibit A

Proposed Expansion Plans
(')I   !•                            MUSKEGON                                                                  FRED SCHARMER

            I'I   }l!Exiii~M~U~S~K~E~G~O~N~C~O~U~N~TY~,;M~IC~H~l~G;A::N'
                      EXISTING CONDITIONS & REMOVALS PLAN - - - - -.-,-___jf!~;~;~~;::::::::j~j:::_j
                                                                                                               1601 BEACH STREET 49441
                                                                                                       CITY OF MUSKEGON, MICHIGAN
                                                               1         --                                      231•740-4329

                                   t-------"=--------..    !5i

                                                                                                                          ~~~'':: ~ '

                                                                                                                                             ·-··""'~   dief .

                            160;~:;_g,~~EET                                   _,_                                            FRED SCHARMER

                                MUSKEGON                                                                                     1601 BEACH STREET
        lj---------.'.:M~U::::_SK:::_EG:::,:O~N;;;C~OU~N~TY;;-,_:::Ml~C:.:HIG:::,::A:::,:N_--tt=====:::j::t::::::l   CITY OF MUS~~~ ~~~HIGAN 49441
i , i                            SITE PLAN                                                                                          7
                                                                                                                                                       . '
                                                                                                                                                      PI        ~



                                 u                                                                                                               II If
                                                                                                                                                 ff   11
                                                                                                                                                 l    ti
                                                                                                                                                 I ii a
                                                                                                                                                 Pr a
                                                                                                                                                 i     I
                                                                                                                                                 i     I

()I   I ; ~'~h!                     ;~.';.~~~~m
                                  160                                                                          FREOSCHARMER
I\)' ,    a                             MUSKEGON                                                             16-01 BEACH STREET
      ; ' j !I ~:I !l----;;;:;;M~U~SK;=E~GO;:;N~C~O~UN~TYf;'iM~IC~H~IG~AN;;-.;:;-{:t:=====:t:t=:::1
                          GRADING,DRAINAGE,ANDSESCPLAN - • - - - -
                                                                                                      CITY OF MUSKEGON, MICHIGAN 49441
                                      l I
                                                II                            "

                                                                                               I                        I~
                                                                                               §   a
                                                                                                       0 0 0

                                                                                                        "   ~      i

                                                                                           n1i fi 1 q
                                                                                                                   f '

                                                                                           tip         i lI
                                                                                                   i { ~ Il
                                                                                                   I~ t            i

                                                                                           t       Ji .
                                                                                                            {      ~

                                                                                           ~ ~
                                                                                                   . i £ 'H
                                                                                                        ~   ~

                                                                                           H       ~    • •        ,    ~

                                     MUSKEGON                                l=l==========t=t:=~
      f-_;M::.:_::U::::,:SK~E~GO~N~CO~U;;;NTY~.~M:;;IC:.,:::HIG::::,:A:::,N                            CITY OF
                                                                                                                  FRED SCHARMER
                                                                                                                 1601 BEACH STREET
                                                                                                                 MUSKEGON, MICHIGAN 49441
; ;                            LANDSCAPE PLAN                                     -•-~--                               231-740-4329
          Exhibit B

Depiction of Expanded Premises
                                                         I::.)( 1-HS IT 8



                                                                     - 4 ~9i:



Top of Page

Sign up for City of Muskegon Emails