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SECOND AMENDMENT TO DEVELOPMENT AND
REIMBURSEMENT AGREEMENT
ADELAIDE POINTE
This SECOND AMENDMENT TO DEVELOLPMENT AND REIMBURSEMENT
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».
Background
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»),
A1otJt~
effective
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.
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The Parties agree as follows and that to the extent this Agreement and the
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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.
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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
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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
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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
Costs").
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
City.
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
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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
Property.
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.
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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
Property.
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.
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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
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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
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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
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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]
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AUTHORITY:
CITY OF MUSKEGON BROWNFIELD REDEVELOPMENT AUTHORITY)
a Michigan public body
Name:
Title:
Date:
CITY:
CITY OF MUSKEGON,
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
APQ:
Title: Owner
Date: --3M2-23 ,2023
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