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Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: 4/25/2023 Title: Sale of Lots for Residential
Construction to LRS Enterprises
Submitted By: Jake Eckholm Department: Development Services
Brief Summary:
LRS Enterprises will complete their ARP Infill Housing Agreement with the City this calendar year,
and would like to secure lots to privately build and market 9 residential for-sale homes.
Detailed Summary & Background:
Lots requested:
- 723 Sumner for construction of 2 homes (lot split)
- 725 Wesley for construction of 1 home
- 628 Mulder for construction of 2 homes (lot split)
- 396 Erickson for construction of 1 home
- 397 Marquette for construction of 1 home
- 388 Jackson for construction of 2 homes (lot split)
Total price for acquisition at 75% of True Cash Value is $15,075.00. LRS will have the opportunity
to have some of that rebated to them pending final design of the homes per the lot sale policy.
Goal/Focus Area/Action Item Addressed:
Goal 1 (Image) Housing Focus Area, Goal 2 (Quality of Life) Housing Focus Area, Action Item 21-8
Expand Housing Options, and Goal 3 (Revitalize Revenues) Housing Focus Area, Action Item 21-
13 Increase Property Values in Urban Core and Eastside Neighborhoods, Blight Elimination
Amount Requested: N/A Amount Budgeted: N/A
Fund(s) or Account(s): N/A Fund(s) or Account(s): N/A
Recommended Motion: Motion to authorize the Code Coordinator to work with the developer and
complete the sale of the vacant lots to build nine single family homes on the buildable lots as
described and to have the Mayor and Clerk sign the purchase agreement and deed.
Approvals: Guest(s) Invited / Presenting:
Immediate Division Head [Information Technology L] Yes []
Other Division Heads Ea Communication [] |No
Legal Review LJ
For City Clerk Use Only:
Commission Action:
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PURCHASE AND DEVELOPMENT AGREEMENT
This Purchase and Development Agreement (‘Agreement’) is made May 25, 2023 (“Effective
Date”), between the City of Muskegon, a Michigan municipal corporation, of 933 Terrace Street,
Muskegon, Michigan 49440 (“City”), and LRS Enterprises, LLC, a Michigan limited liability company,
of 525 S. Dang! Road, Muskegon, Michigan 49442 (‘Developer’), with reference to the following facts:
Background
A. Developer proposes to purchase and develop six (6) vacant properties owned by City,
which are all located in the City of Muskegon, Muskegon County, Michigan, and each commonly known
and legally described on the attached Exhibit A (each property individually, a “Parcel” and collectively
“Project Properties”).
B. City and Developer desire to establish the terms, covenants, and conditions upon which
City will sell and Developer will purchase and develop the Project Properties. The developer intends to
develop on each of the Project Properties single-family house(s) (the “Project”).
Therefore, for good and valuable consideration, the parties agree as follows:
1, Sale and Purchase of Project Properties. City agrees to sell to Developer, and Developer
agrees to purchase from City, on the terms and subject to the conditions set forth in this Agreement, the
Project Properties, subject to reservations, restrictions, and easements of record.
2. Purchase Price. The total purchase price for the Project Properties shall be $15,075.00,
which shall be paid in cash or other immediately available funds at Closing (defined below). The total
purchase price for the Project Properties shall be allocated to each Parcel as provided on Exhibit A.
Pursuant to Paragraph 3(b) below, the parties acknowledge and agree that Developer shall be eligible to be
reimbursed all or a portion of the purchase price for each Parcel upon the completion of certain design
standards as further described herein.
3. Construction and Development Requirements.
a. Construction Dates. The parties acknowledge and agree that Developer shall have
a period of eighteen (18) months from the date of Closing to complete the Project (“Construction
Period”), except as otherwise provided in this Agreement or as otherwise mutually agreed upon by
the parties in writing.
b. Construction Details; Purchase Price Reimbursement. Developer’s construction
and development of the Project Properties shall be in substantial conformance with its plans and
specifications provided to City by Developer or as otherwise agreed upon in writing between City
and Developer. As referenced above, Developer shall be eligible for reimbursement of all or a
portion of the purchase price for each of the Project Properties upon Developer’s satisfaction of the
following design standards for each single-family home it constructs on the Project Properties:
Design Standard Purchase Price Reimbursement for Parcel
Open front porch of at least 60 sq. ft. 20%
Picture or bay window 20%
Alley-loaded parcel 20%
Shutter or other acceptable window 20%
treatments
Underground Sprinkling 20%
(By way of example only: If Developer completes three of the design standards listed above for
the construction at the Parcel located at 396 Erickson Street, Developer would be reimbursed
$1,440.00, which is 60% of the $2,400 purchase price for this Parcel. If Developer completes all
five design standards, Developer would be reimbursed the entire purchase price for this Parcel.)
4, Right of Reversion. Notwithstanding anything herein to the contrary, and as security for
Developer’s obligation to commence and complete construction of single-family house(s) on each of the
Project Properties, the quit claim deed conveying the Project Properties to Developer shall contain a right
of reversion in all of the Project Properties (“City’s Reversionary Right”), which may be exercised by City,
in its sole and absolute discretion, if any of the following conditions occur:
a, Developer does not commence construction within sixty (60) days after the date of
Closing, in which case title to all of the Project Properties shall automatically revert to City upon
the terms and conditions further provided in this Paragraph 4 below. For purposes of this Paragraph
4(a), commencing construction means furnishing labor and materials to at least one Parcel of the
Project Properties and beginning installation of the approved single-family home(s).
b. Developer does not complete construction of all Project Properties prior to
expiration of the Construction Period, in which case title to any of the Project Properties that are
not complete by the end of the Construction Period shall automatically revert to City upon the terms
and conditions further provided in this Paragraph 4 below. For purposes of this Paragraph 4(b),
completing construction means the issuance of an occupancy permit by City for all of the Project
Properties. Provided, however, the parties agree to reasonably negotiate an extension of the
Construction Period up to a period of six (6) months for any of the Project Properties that have a
completed foundation before the expiration of the initial Construction Period.
If any of the above conditions occur, City shall automatically have City’s Reversionary Right to reacquire
title to any or all of the Project Properties, as the case may be. To exercise City’s Reversionary Right
described herein, City must provide written notice to Developer (or its permitted successors, assigns, or
transferees) within thirty (30) days of Developer’s failure under this Agreement, but in any event prior to
Developer satisfying the conditions set forth in Paragraph 4(a) or Paragraph 4(b) above, as the case may
be, and record such notice with the Muskegon County Register of Deeds. Upon request of City, Developer
shall take all reasonable steps to ensure City acquires marketable title to any or all of the Project Properties,
as the case may be, through its exercise of its rights under this Paragraph within thirty (30) days of City’s
demand, including without limitation, the execution of appropriate deeds and other documents.
In addition, if any or all of the Project Properties revert to City, City may retain the purchase price for such
Project Properties free and clear of any claim of Developer or its assigns. In the event of reversion of title
of any or all of the Project Properties, improvements made on such Project Properties shall become the
property of City. In no event shall the Project Properties be in a worse condition than upon the date of
Closing. These covenants and conditions shall run with the land and be recorded in the quit claim deed from
City to Developer.
5. Waiver of Water/Sewer Connection Fee. Upon the condition that all Project Properties
are completed no later than the Construction Completion Date, City agrees to waive the water/sewer
connection fee for all Project Properties.
6. Title Insurance. Within five (5) days after the Effective Date, Developer shall order a title
commitment for an extended coverage ALTA owner’s policy of title insurance issued by Transnation Title
Agency (the “Title Company”) for the Project Properties in the amount of the total purchase price for the
Project Properties and bearing a date later than the Effective Date, along with copies of all of the underlying
documents referenced therein (the “Title Commitment”). Developer shall cause the Title Company to issue
a marked-up commitment or pro forma ownet’s policy with respect to the Project Properties at the Closing
naming Developer as the insured and in form and substance reasonably satisfactory to Developer, but
subject to Permitted Exceptions (defined below). As soon as possible after the Closing, Developer shall
cause the Title Company to furnish to Developer an extended coverage ALTA owner’s policy of title
insurance with respect to the Project Properties (the “Title Policy”). City shall be responsible for the cost
of the Title Policy; provided, however, Developer shall be solely responsible for the cost of any
endorsements to the Title Policy that Developer desires.
7. Title Objections. Developer shall have until the end of the Inspection Period (as defined
below) within which to raise objections to the status of City’s title to the Project Properties. If objection to
the title is made, City shall have seven (7) days from the date it is notified in writing of the particular defects
claimed to either (a) remedy the objections, or (b) notify Developer that it will not remedy the objections.
If Developer does not notify City in writing as to any title or survey objections, then Developer will be
deemed to have accepted the condition of title as set forth in the Title Commitment. If City is unwilling or
unable to remedy the title or obtain title insurance over such defects within the time period specified, then
notwithstanding anything contained herein to the contrary, Developer may, at its option, upon written notice
to City, either (i) terminate this Agreement and neither City nor Developer shall have any further obligation
to the other pursuant to this Agreement, except as otherwise provided herein, or (ii) waive such objection,
in which case such objection shall become a Permitted Exception, and thereafter proceed to the Closing
according to the terms of this Agreement. Any matter disclosed on the Title Commitment that is waived or
not objected to by Developer shall be deemed a “Permitted Exception.”
8. Property Taxes and Assessments. City shall be responsible for the payment of all real
estate taxes and assessments that become due and payable prior to Closing, without proration. Developer
shall be responsible for the payment of all real estate taxes and assessments that become due and payable
after Closing, without proration.
9. Survey. Developer at its own expense may obtain a survey of any or all of the Project
Properties, and Buyer or its surveyor or other agents may enter any of the Project Properties for that purpose
prior to Closing. If no survey is obtained, Developer agrees that Developer is relying solely upon
Developer's own judgment as to the location, boundaries, and area of the Project Properties and
improvements thereon without regard to any representations that may have been made by City or any other
person. In the event that a survey by a registered land surveyor made prior to Closing discloses an
encroachment or substantial variation from the presumed land boundaries or area, City shall have the option
of affecting a remedy within seven (7) days after disclosure or terminate this Agreement. Developer may
elect to purchase the Project Properties subject to said encroachment or variation.
10. Inspection Period. At Developer’s sole option and expense, Developer and Developer’s
agents may conduct inspections of each of the Project Properties within thirty (30) days after the Effective
Date (“Inspection Period”). Developer’s inspection under this Paragraph may include, by way of example
but not limitation, inspections of any existing improvements to each Parcel, other systems servicing the
Parcel, zoning, and the suitability for Developer’s intended purposes for each Parcel. If Developer, in
Developer’s reasonable discretion, is not satisfied with the results of the inspections for any reason,
Developer shall notify City in writing of Developer’s prior to expiration of the 30-day Inspection Period. If
Developer so notifies City, this Agreement shall be terminated and have no further force and effect. If no
written objection is made by Developer within the stated period, this inspection contingency shall be
deemed to be waived by Developer and the parties shall proceed to Closing in accordance with the terms
of this Agreement.
11. Condition of Project Properties. City and Developer acknowledge and agree that each
Parcel in the Project Properties is being sold and delivered “AS IS”, “WHERE IS” in its present condition.
Except as specifically set forth in this Agreement or any written disclosure statements, City has not made,
does not make, and specifically disclaims any and all representations, warranties, or covenants of any kind
or character whatsoever, whether implied or express, oral or written, as to or with respect to (i) the value,
nature, quality, or condition of any of the Project Properties, including without limitation, soi! conditions,
and any environmental conditions; (ii) the suitability of the Project Properties for any or all of Developer’s
activities and uses; (iii) the compliance of or by the Project Properties with any laws, codes, or ordinances;
(iv) the habitability, marketability, profitability, or fitness for a particular purpose of the Project Properties;
(v) existence in, on, under, or over the Project Properties of any hazardous substances; or (vi) any other
matter with respect to the Project Properties. Developer acknowledges and agrees that Developer has or
will have the opportunity to perform inspections of the Project Properties pursuant to this Agreement and
that Developer is relying solely on Developer’s own investigation of the Project Properties and not on any
information provided to or to be provided by City (except as specifically provided in this Agreement). If
the transaction contemplated herein closes, Developer agrees to accept the respective Project Properties
acquired by Developer and waive all objections or claims against City arising from or related to such Project
Properties and any improvements thereon except for a breach of any representations or warranties or
covenants specifically set forth in this Agreement. In the event this transaction closes, then subject to City’s
express representations, warranties, and covenants in this Agreement, Developer acknowledges and agrees
that it has determined that the respective Project Properties it has acquired and all improvements thereon
are in a condition satisfactory to Developer based on Developer’s own inspections and due diligence, and
Developer has accepted such Project Properties in their present condition and subject to ordinary wear and
tear up to the date of Closing. The terms of this Paragraph shall survive the Closing and/or the delivery of
the deed.
12. Developer’s Representations and Warranties of Developer. Developer represents,
covenants, and warrants the following to be true:
a. Authority. Developer is a Michigan limited liability company. Developer has the
power and authority to enter into and perform Developer’s obligations under this Agreement.
b. Litigation. No judgment is outstanding against Developer and no litigation, action,
suit, judgment, proceeding, or investigation is pending or outstanding before any forum, court, or
governmental body, department or agency or, to the knowledge of Developer, threatened, that has
the stated purpose or the probable effect of enjoining or preventing the Closing.
c. Bankruptcy. No insolvency proceeding, including, without limitation, bankruptcy,
receivership, reorganization, composition, or arrangement with creditors, voluntary or involuntary,
affecting Developer or any of Developer's assets or properties, is now or on the Closing Date will
be pending or, to the knowledge of Developer, threatened.
13. Conditions Precedent. This Agreement and all of the obligations of Developer under this
Agreement are, at Developer’s option, subject to the fulfillment, before or at the time of the Closing, of
each of the following conditions:
a. Performance. The obligations, agreements, documents, and conditions required to
be signed and performed by City shall have been performed and complied with before or at the date
of the Closing.
b. City Commission Approval. This Agreement is approved by the Muskegon City
Commission.
14. Default.
a. By Developer. In the event Developer fails to comply with any or all of the
obligations, covenants, warranties, or agreements under this Agreement and such default is not
cured within ten (10) days after receipt of notice (other than Developer’s failure to tender the
purchase price in full at Closing, a default for which no notice is required), then City may terminate
this Agreement.
b. By City. In the event City fails to comply with any or all of the obligations,
covenants, warranties or agreements under this Agreement, and such default is not cured within ten
(10) days after receipt of notice, then Developer may either terminate this Agreement or Developer
may pursue its legal and/or equitable remedies against City including, without limitation, specific
performance.
15. Closing.
a. Date of Closing. The closing date of this sale shall be as mutually agreed by the
parties, but in no event later than July 27, 2023 (“Closing”), unless this Agreement is terminated in
accordance with its provisions. The Closing shall be conducted at such time and location as the
parties mutually agree.
b. Costs, The costs associated with this Agreement and the Closing shall be paid as
follows: (i) Developer shall pay any state and county transfer taxes in the amount required by law;
(ii) City shall pay the premium for the owner’s Title Policy, provided that Developer shall pay for
any and all endorsements to the Title Policy that Developer desires; (iii) City shall be responsible
to pay for the recording of any instrument that must be recorded to clear title to the extent required
by this Agreement; (iv) Developer shall pay for the cost of recording the deed; and (v) Developer
and City shall each pay one-half of any closing fees charged by the Title Company.
c. Deliveries. At Closing, City shall deliver a quit claim deed for the Project
Properties and Developer shall pay the purchase price. The quit claim deed to be delivered by City
at closing shall include the City Right of Reversion described in Paragraph 4 above. The parties
shall execute and deliver such other documents reasonably required to effectuate the transaction
contemplated by this Agreement.
16. Real Estate Commission. Developer and City shall each be responsible for any fees for
any real estate agents, brokers, or salespersons regarding this sale that it has hired, but shall have no
obligation as to any fees for any real estate agents, brokers, or salespersons regarding this sale that the other
party has hired.
17. 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 (5) days after
sending by first class, registered, or certified mail.
Notices shall be sent to the parties as follows:
To City: City of Muskegon
Attn.: LeighAnn Mikesell, Deputy City Manager
933 Terrace Street
Muskegon, MI 49440
w/ copy to: Parmenter Law
Attn.: John C. Schrier
601 Terrace Street, Suite 200
Muskegon, MI 49440
Email: john@parmenterlaw.com
To Developer: LRS Enterprises, LLC
Rubin Briggs, Owner
525 S. Dangle Road
Muskegon, MI 49442
Email: briggsbuilder2 1O@gmail.com
18. Miscellaneous.
a. Governing Law. This Agreement will be governed by and interpreted in
accordance with the laws of the state of Michigan.
b. Entire Agreement. This Agreement constitutes the entire agreement of the parties
and supersedes any other agreements, written or oral, that may have been made by and between the
parties with respect to the subject matter of this Agreement. All contemporaneous or prior
negotiations and representations have been merged into this Agreement.
c. Amendment. This Agreement shall not be modified or amended except in a
subsequent writing signed by all parties.
d. Binding Effect. This Agreement shall be binding upon and enforceable by the
parties and their respective legal representatives, permitted successors, and assigns.
e. Counterparts. This Agreement may be executed in counterparts, and each set of
duly delivered identical counterparts which includes all signatories, shall be deemed to be one
original document.
f. Full Execution, This Agreement requires the signature of all parties. Until fully
executed, on a single copy or in counterparts, this Agreement is of no binding force or effect and if
not fully executed, this Agreement is void.
g. Non-Waiver. No waiver by any party of any provision of this Agreement shall
constitute a waiver by such party of any other provision of this Agreement.
h. Severability. Should any one or more of the provisions of this Agreement be
determined to be invalid, unlawful, or unenforceable in any respect, the validity, legality, and
enforceability of the remaining provisions of this Agreement shall not in any way be impaired or
affected.
i. No Reliance. Each party acknowledges that it has had full opportunity to consult
with legal and financial advisors as it has been deemed necessary or advisable in connection with
its decision to knowingly enter into this Agreement. Neither party has executed this Agreement in
reliance on any representations, warranties, or statements made by the other party other than those
expressly set forth in this Agreement.
j. Assignment or Delegation. Except as otherwise specifically set forth in this
Agreement, neither party shall assign all or any portion of its rights and obligations contained in
this Agreement without the express or prior written approval of the other party, in which approval
may be withheld in the other party's sole discretion.
k. Venue and Jurisdiction. The parties agree that for purposes of any dispute in
connection with this Agreement, the Muskegon County Circuit Court shall have exclusive personal
and subject matter jurisdiction and that Muskegon County is the exclusive venue.
This Agreement is executed effective as of the Effective Date set forth above.
CITY: DEVELOPER:
CITY OF MUSKEGON LRS ENTERPRISES LLC
Name: Ken Johnson Name: Rubin Briggs as
Title: MO7- 9093 Title: Owner /
Dated:
Dated: @ fat [202
Name: Ann Marie Meisch
Title: City Clerk
Dated: le -31-dv8>
Exhibit A
The following described premises located in the City of Muskegon, County of Muskegon, State of
Michigan, and legally described as follows:
I) CITY OF MUSKEGON REVISED PLAT OF 1903 EAST 105 FEET OF WEST 217 FEET OF
SOUTH 114 FEET OF NORTH 139 FEET BLOCK 37.
723 Sumner Ave. — Parcel # 61-24-205-037-0001-01
Price: $2,400
2) CITY OF MUSKEGON MARCOUX SUB DIV OF BLOCK 38 LOT 11 & 12 BLOCK 1 &
NORTH 1/2 VACATED ADJ ALLEY.
725 Wesley Ave. — Parcel # 61-24-590-001-001 1-00
Price: $2,400
3) CITY OF MUSKEGON MARCOUX SUB DIV OF BLOCK 38 LOTS 16-18 BLOCK 1 & SOUTH
1/12 VAC ADJ ALLEY.
628 Mulder St. — Parcel # 61-24-590-001-0016-00
Price: $2,400
4) CITY OF MUSKEGON REVISED PLAT OF 1903 LOT 1 BLOCK 140.
396 Erickson St. — Parcel # 61-24-205-140-0001-00
Price: $2,400
) CITY OF MUSKEGON REVISED PLAT OF 1903 LOT 15 & 16 BLOCK 140.
397 Marquette Ave. — Parcel # 61-24-205-140-0015-00
Price: $2,400
6) CITY OF MUSKEGON REVISED PLAT OF 1903 LOT 2 & 3 BLOCK 139,
388 Jackson Ave. — Parcel # 61-24-205-139-0002-00
Price: $3,075
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