Approved Agreements and Contracts 2023-03-14 2nd Amendment Brownfield Development & Reimbursement Agreement Adelaide Pointe

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                              SECOND AMENDMENT TO DEVELOPMENT AND
                                    REIMBURSEMENT AGREEMENT
                                                           ADELAIDE POINTE

                 AGREEMENT ("Agreemene>) is made March 14 , 2023 ("Effective Date 11) between the City of
                 Muskegon Brownfield Redevelopment Authority ("Authority»), a Michigan public body corporate>
                 with an address of 933 Terrace Street, Muskegon, MI 49440 ("Authoritf 1) , City of Muskegon, a
                 Michigan Municipal Corporation ("City,,), with an address of 933 Terrace St., Muskegon, MI 49440, and
                 Adelaide Pointe Qozb> LLC ("APQ 11), with an address of 1204 W. Western Avenue, Muskegon, MI
                 49441. Authority, City and APQ are at times referred to as a "Party)) 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 certain property adjacent to, and to the east of, the APQ Property commonly known
                 as Hartshorn Marina which the City has previously used for public small boat slip rentals and related
                 activities. The APQ Property and the City Property 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 1 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 1 2022.

                         APQ intends to develop the Property for mixed uses including boat storage, boat dockage, in~out
                 boat service, marinas, residential condominiums, commercial uses, and open space and recreational areas
                 ("Development1>), 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 11) to be submitted to the City ("Development Agreements»),

                                      CJirjf  nd APQ entered into a Development and Reimbmsement Agreement
                                ~teh f4' , ___l_, 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 1 as defined and provided for in that Agreement.

                 The Parties agree as follows and that to the extent this Agreement and the
   {,if-     3
                 Development and Reimbursement Agreement vary, this Agreement shall control:
                         1.       Background. The Parties agree the Background paragraphs are true and correct and are
                                  incorporated into the body of this Agreement.
   Ml\L IJ
                         2.       Improvements. APQ will develop both the APQ Property 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 J)olicies.

4.   Changes, Stanclarcls 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 Standardn). 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 Property according to the PUD.
     To the extent the addendurns addresses Heligible expenses') and expenses to be reimbmsed
     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 Brownfield 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. 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 Ainendmenf') to add the APQ Property.

              i. The Property is included in the Brownfield Plan Amendment as an <(eligible
                 property'> because it is a "facility'> as defined by Part 20 I of the Natural
                 Resources and Environmental Protection Act ( <1Part 201 ").

             ii. Neither the City nor APQ is a liable party, under Part 201, for remediation of
                 any existing contamination on the Property.

             iii. APQ has and will continue to conduct Eligible Activities (as defined in Act
                  381) on the Property to address environmental and other brownfield
                  conditions, in addition to the construction of roads, water mains and sewer
                  mains, in a collaborative effort to position the Property for redevelopment.
                  Actual expenditures by the Parties to undertake eligible envirom11ental
                  activities on the Property are estimated to be $35 million dollars not including

     interest. Eligible demolition and site preparation costs incurred by these same
     parties is estimated to exceed $13 million dollars. These efforts are aimed at
     facilitating the redevelopment of the Property as a transformational mixed-use
     project, including residential and various commercial uses (the "Project").

iv. The Project will include demolition activities, performance of baseline
    enviromnental 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 1 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 inctmed by the City and APQ, The total
    cost of the Eligible Activities in the Brownfield Plan Amendment, including
    contingencies1 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 (bothreal
     and personal properly) generated from the incremental increase in property
     value of a redeveloped brownfield site constituting an Heligible propertf'
     under Act 381 to pay or to reimburse the cost of Eligible Activities conducted
     on the "eligible property» (the "Brownfield TIF Revenue").

viii. In accordance with.Act 381, the parties desire to establish a procedure for using
      the available Brownfield TIF Revenue generated from the Property to
      rei1nburse APQ for completion of Eligible Activities on the Property in
      amounts not to exceed the Total Eligible Brownfield TIF Costs.

 ix. During the Tenn (defined below) of this Agreement> the Authority shall
     reimburse APQ for the cost of Eligible Activities conducted on the Property
     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 incutTed 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
     Property and reimburse APQ for the cost of Eligible Activities incurred until

     the earlier of being fully reimbursed or December 31, 2056 ("Term 1} 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 Property 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
               Reimbursemenf 1 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 fo1· 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 fortyMfive (45) days after a Request for Cost Reimbursement
               has been reviewed and approved by the City>s or Authority's agent or
               employee as required in Section 7 .a and reviewed and approved by the
               Authority 01· designate as to whether it is an "eligible expense'\ the
               Authority shall pay to APQ the amounts for which submissions have
               been made pursuant to this Agreement. The Authority,s obligation to
               pay APQ is limited to available Brownfield TIF Revenue from the

          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 portion of the
             APQ Property 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, as described above,

          4.   The Paities shall cooperate with the Authorityis 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. Ail or any portion 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 1 including
            interest. The payment of interest shall be subject to the following
            limitations (i) to the extent there is not sufficient Brownfield TIP
            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,i
              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 TlF
              Revenue captured after 35 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 Property 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 Property 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 rcimbursedJ APQ agrees to
                         waive any appeal of any tax assessment or reassessment of any portion
                         of the Property; provided, howeve1~ that this waiver shall not be
                         binding on any person or entity who acquires title to all or any portion
                         of the Property after the date of t~is 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
                         APQ or any future owner to any tax levying unit of government, the
                         Authority 1nay deduct the amount of any such reimburse1nent,
                         including interest and penalties, from any amounts due and owing
                         APQ. lf all amounts due APQ under this Agreement have been fully
                         paid or the Authority is no longer obligated to make any further
                         payments to APQ, the Authority shall invoice APQ for the amount of
                         such reimbursement and APQ shaU pay the Authority such invoiced
                         amount within 45 days of receipt of the invoice. Amounts invoiced
                         and paid to the Authority by APQ pur~uant to this Section shall be
                         reinstated as Eligible Activities for which 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 forth 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 property, 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 parties.

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
     delive1y 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 delivety 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 certified mail. Notices shall be sent to the parties as follows:

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

     w/copy to:                                                   w/copy to:

     Parmenter Law                                                Jaffe, Raitt Heuer & Weiss, P.C.
     60 l 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
       party 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, Authority and/or City is prevented from timely
       performing under this Agreement or any third-party providing services or required
       infonnation 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 perfmm their obligations under this Agreement. To invoke the tolling
       of time periods as set forth herein for a Force Majeure Event, the applicable party 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 11 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 home11 or "shelter in place 11 orders, and including, but not limited to, the
        Coronavirus                                  Disease                                 2019.

11.     Severability, If any te11n, 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 tenn, 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
        pe1mitted by law.

 12.    Miscellaneous. This Agreement may be amended or modified only by the written
        agreement of APQ, Authority, and City. Each exhibit attached to this Agreement is
        iucorporateq. and made a part of this Agreement as though more fully set forth in this
        Agreement. If the deadline for pe1forming 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 Jaws of the State of
        Michigan. All representations and warranties made in this Agreement by APQ, Authority,
        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 counterparts, each of which shall be deemed to be an original, but all of which together
        shall be deemed to he one and the same instrument. Electronically imaged signatures may
        be used in place of original signatures on this Agreement. APQ 1 Authority and City intend
        to be bound by the signatures on the electronically imaged docmn~nt, 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 1 successors, and assigns,

15.   Assignment or Delegntion. No party shall assign or delegate all or any portion of its rights
      or obligations contained in this Agreement without the express or prior written approval of
      the other parties, in which approval may be withheld in each other parly>s sole discretion,

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



a municipal corporation

Name: Ke1111eth D. Johnson
Title:   Mayor (          l/
Date:     f(p__t"C.LI\_   _~        , 2023

Name: Ann Meisch
Title: Clerk     \
Date:    ~ \ 1~ !              (    )2023


Title: Owner
Date: --3M2-23                     ,2023


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