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AFFORDABLE HOUSING AGREEMENT
CITY OF MUSKEGON
THIS AFFORDABLE HOUSING AGREEMENT ("Agreement”) is entered into as of
February 11, 2025 by and between CITY OF MUSKEGON ("City"), a Michigan public body
corporate, with an address of 933 Terrace St, Muskegon, MI 49440, the MUSKEGON
BROWNFIELD REDEVELOPMENT AUTHORITY (“Authority”), a Michigan public body
corporate, with an address of 933 Terrace St, Muskegon, MI 49440, and PARKLAND
PROPERTIES OF MICHIGAN — SHAW WALKER, LLC, SHAW WALKER
OPPORTUNITY ZONE BUSINESS 1, LLC, SHAW WALKER OPPORTUNITY ZONE
BUSINESS 2, LLC, SHAW WALKER OPPORTUNITY ZONE BUSINESS 3, LLC, AND
SHAW WALKER OPPORTUNITY ZONE BUSINESS 4, LLC (collectively, the
‘“Developer”), all Michigan limited liability companies, with an address of 75 W Walton Avenue,
Suite A, Muskegon, MI 49440.
WITNESSETH:
WHEREAS, the City has a vested interest to: (1) promote the health, safety and general
welfare of the citizens of the City through the implementation of housing goals, objectives, and
policies that support economically integrated housing opportunities in the development or
rehabilitation of housing, (2) stimulate the production of rental housing available to moderate-
income individuals or families, and (3) optimize benefits available to moderate-income residents
by incentivizing affordable residential housing projects; and
WHEREAS, Developer proposes to develop the Property (defined below) which includes
the redevelopment of four (4) parcels located at 965 W. Western Avenue, 920 & 930 Washington
Avenue, and 1330 Division Street (collectively, the “Property”), into a mixed-use development
with 538 new and 33 renovated residential for-sale and rental housing units, a rooftop pool,
jacuzzi and deck; 2-rooftop clubhouses; sport courts; shared work spaces; and 8 large retail units
with uses that compliment and provide the best available lifestyle for the community (the
“Project”); and
WHEREAS, Developer intends to apply to the Michigan Strategic Fund (MSF) for a
transformational brownfield plan (the “Plan”) for the Project under the Brownfield
Redevelopment Financing Act, Act 381 of 1996, as amended (“Act 381”), which the Plan, if
approved by the MSF and the City, would afford Developer the opportunity to obtain
reimbursement of certain eligible activities funded by the capture of certain eligible tax revenues
generated at the Property and to obtain other tax benefits, as described in Act 381, determined to
be necessary for the Project to be economically viable; and
WHEREAS, if the MSF, Authority, and the City approve the Plan for the Project, the
Project may be eligible to capture up to 100% of state income tax capture revenues generated
from the Project, if the Project described within the Plan are subject to a written, binding
affordable housing agreement with the City; and
WHEREAS, Developer, in order to make the Project eligible to capture up to 100% of
state income tax capture revenues, is willing to commit to certain affordable housing
requirements subject to the terms and conditions set forth in this Agreement; and
WHEREAS, to encourage the successful completion of the Project and promote the
development of inclusive mixed-income communities, the City, the Authority, and the Developer
are entering into this Agreement to ensure and provide for affordable housing;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the City, the Authority, and Developer agree as follows:
1. Definitions. The following terms used throughout this Agreement shall be defined as
follows:
a. "Income Limit” means the maximum Household Income that may be earned,
determined no less than 30 days nor more than 60 days prior to entering into a lease,
by a household leasing an Affordable Unit. For the purposes of this Agreement, the
relevant income limits at the time of a Lessee’s initial lease or lease renewal, are those
most recently published by the Michigan State Housing Development Authority
(MSHDA) for Muskegon County, Michigan, and are 100% of the area median income
(AMI) based on household size. After a Lessee’s initial lease, or twelve months,
whichever is greater, the Income Limit may be increased by 5% (i.e. 105% AMI) to
accommodate reasonable increases in Household Income while avoiding unintended
consequences to Lessees and maintaining the spirit of the Agreement.
b. “Rent Limit” means the maximum amount that may be charged as monthly rent for an
Affordable Unit based on the number of bedrooms in the Affordable Unit. The Rent
Limit includes the base rent amount, any charges or required fees imposed by
Developer that are paid by Lessees, and tenant-paid utilities, if any. The Rent Limit
is published by MSHDA on an annual basis. Developer shall not assess unreasonable
fees upon Lessees and shall not assess any fees upon Lessees of Affordable Units that
are in addition to any fees assessed upon any other tenant.
c. "Affordable Housing Requirement" means that if Developer obtains approval of the
Plan for the Project, Developer shall, during the Affordability Period (as defined
below), maintain not less than a rolling annualized average of twenty (20) residential
rental dwelling units within the Project leased to households whose Household
Income does not exceed the applicable Income Limit and for an amount that does not
exceed the applicable Rent Limit. To satisfy the Affordable Housing Requirement,
the rolling annualized average of twenty (20) residential rental dwelling units must be
leased to households whose Household Income is equal to or less than 100% of AMI,
and rented for an amount that does not exceed the Rent Limit for the Affordable Unit.
Lessees shall be required to meet the applicable Income Limit at all times in order for
the leased unit to qualify as an Affordable Unit.
d. "Affordability Period" means the specific time periods for which residential rental
dwelling units must be maintained as Affordable Units. The Affordability Period for
the Project shall begin in 2028 and shall expire twenty (20) years thereafter, in
accordance with the Plan. The Developer anticipates that the residential dwelling
components of the Project will begin construction in the spring of 2025 and is
estimated to be completed within approximately thirty-six (36) months.
e. “Grace Period” means the 12-month renewal period available for an eligible Lessee
whose Household Income has exceeded the 100% AMI Income Limit for an
Affordable Unit.
f. "Affordable Units" mean residential rental dwelling units within the Project that satisfy
the Affordable Housing Requirement.
g. "AMI" means the area median family income for Muskegon County as most recently
published by MSHDA.
h. “Income Checklist” means a checklist that contains information necessary to
determine Household Income, along with supporting documentation, provided by or
in a form approved by the City.
i. “Tenant Household Self Certification Form” means a form that contains information
necessary for tenants to self-certify their Household Income, provided by or in a form
approved by the City.
j. “Tenant Income and Rent Report” means a report containing information necessary to
document tenant income and rental rates charged, provided by or in a form approved
by the City.
k. “Lessee” means any individual(s) that enters into a lease with the Developer for any
Affordable Unit in the Project.
1. “Household Income” means all income received or derived from any source required
to be listed on the Income Checklist by (1) every individual named as an authorized
leaseholder on the lease regardless of their age, and (2) every household member age
18 and older, including those listed as household members on the lease. Household
income does not include income received by individuals under 18 years of age unless
a Lessee, nor income of a lease guarantor who does not reside in the unit.
2. Term of Agreement. This Agreement shall be effective only upon (1) the final approval
of the Plan for the Project by the City and MSF, and (2) execution of a development and
reimbursement agreement for the Project, and shall expire at the end of the final
Affordability Period.
3. Obligations of Developer. Developer shall meet the Affordable Housing Requirement,
subject to the limitations herein, by constructing or developing, and leasing, Affordable
Units subject to the terms and conditions of this Agreement.
Affordable Unit Specifications. The Affordable Units shall be comparable in overall
quality of construction to the typical and similarly-situated comparable market-rate units
contained in the Project.
Income Certification. During the Affordability Period, Developer shall conduct annual
income certifications as described herein to ensure the Household Income of the Lessee
does not exceed the applicable Income Limit. Income shall be determined according to
the Part 5 method and shall include income sources as identified in 24 CFR 5.609.
Developer shall obtain a completed Income Checklist, including all supporting
documentation (a) no less than 30 days nor more than 60 days prior to the date of entering
into a lease for an Affordable Unit, and (b) no less than 30 days nor more than 60 days
prior to each fifth anniversary of such date. Developer shall, in the intervening years (i.e.
years two, three, four, six, etc.) obtain a completed Tenant Household Self-Certification
Form for each Lessee no less than 30 days nor more than 60 days prior to lease renewal.
Developer shall retain all documentation collected pursuant to this Section 5 for a
minimum of five years after receipt.
Over Income. An Affordable Unit is “over income” and temporarily out of compliance
with the Affordable Housing Requirement when a Lessee experiences an increase in
Household Income causing them to surpass the applicable Income Limit. In the event that
the Lessee’s Household Income is above 100% AMI, the Lessee’s unit shall qualify as an
Affordable Unit only for the duration of the Grace Period. Rent during the Grace Period
will correspond with the applicable Rent Limit. As soon as practicable at the beginning
of the Grace Period, the Developer shall provide appropriate notice to the Lessee
describing the terms of this Agreement. Upon the expiration of the Grace Period, the unit
will no longer qualify as an Affordable Unit and Developer shall rent a comparable next
available unit as an Affordable Unit to maintain compliance with the Affordable Housing
Requirement.
Marketing of Affordable Units. Developer will market the Project to both affordable
and market rate applicants with the intention of meeting the requirements of this
Agreement,
Reporting to City. Within ninety (90) days after the end of each calendar year of this
Agreement, Developer shall provide the City of Muskegon Development Services
Department (“Department”) a report containing the following information:
a. The total number of residential rental units for which an unconditional certificate of
occupancy has been issued by the City of Muskegon and the total number of
Affordable Units in the Project.
b. The Tenant Income and Rent Report (TIRR) for the previous calendar year for all
Affordable Units subject to this Agreement.
c. The number of Affordable Units that are temporarily over income and out of
compliance due to a previously qualified Lessee exceeding the applicable Income
Limit and the plan to comply with the Affordable Housing Requirement.
The Department’s Director may either (a) accept the report, or (b) request documentation
from Developer to verify some or all of the information in the report, which
documentation may include but shall not be limited to income certification documentation
and leases. Developer shall provide the requested documentation within thirty (30) days
of receiving such request from the City. If the Department’s Director determines that the
Affordable Housing Requirement has not been met, the Department’s Director, on behalf
of the City, will provide the Developer with a written determination which shall describe
the specific deficiency that resulted in the City’s determination. Developer shall have a
thirty (30) day cure period commencing after receipt of notice of failure to satisfy the
terms of this Agreement. If Developer fails to cure the deficiency within this thirty (30)
day cure period, the City may exercise its remedies with respect to a breach of this
Agreement pursuant to Section 13.b. Each successive period of thirty (30) days following
the initial breach in which Developer fails to cure the deficiency shall constitute an
additional breach under this Section 8, and the City may exercise its remedies for each
such breach pursuant to Section 13.b. Developer will provide access to the Project and all
records that may pertain to this Agreement within thirty (30) days of request by the City,
Department or Authority.
Notice and Notification of End of Affordability Period. At least three (3) years prior to
the end of the Affordability Period, Developer shall submit notice to the tenants of the
Affordable Units, the Department’s Director, and City of Muskegon Economic
Development Department indicating the end date of the Affordability Period.
At all times during the Affordability Period, every lease between Developer and a Lessee
must contain notification to the Lessee of the benefit derived from this Agreement, the
Lessee’s obligations, and the terms under which the benefit would no longer be available,
including (1) if in the future the Lessee’s Household Income exceeds the applicable
Income Limit for the Affordable Unit at the time of expiration or renewal of their lease,
or (2) the expiration of the Affordability Period.
10. Obligations of City. The City shall make commercially reasonable efforts to assist
Developer through City permitting, site plan approval, financing applications, and other
City processes. Notwithstanding the foregoing obligation, the City's efforts do not
guarantee final City approvals or City of Muskegon City Commission approval.
11. Review of Rents and Utility Allowances. The Developer will submit to the
Department’s Director, upon request but not more than once per year, the annual Rent
Limits, inclusive of utility allowances based upon the most recently published Region C
Utility Schedule and as published by MSHDA, and the Rent Limits including 100% AMI
by household size based on the most recently published data.
12. Casualty Events. If the Affordable Units cease to be available as the result of fire,
damage, or other casualty ("Casualty Event"), Developer shall provide prompt written
notice of such Casualty Event to the City and the Authority, and Developer may use the
insurance proceeds that are actually made available to it to restore the Affordable Units
that have been damaged as a result of the Casualty Event. Developer shall not be required
to spend any money to restore the damaged Affordable Units in an amount over and above
the insurance proceeds that are actually made available to such entity for the restoration
of the Affordable Units damaged as a result of a Casualty Event. However, if Developer
elects to not fully restore all Affordable Units damaged as a result of a Casualty Event,
Developer shall, within a commercially reasonable amount of time, rent a number of next
available comparable units as Affordable Units to make up for the number of Affordable
Units not fully restored to maintain compliance with the Affordable Housing
Requirement.
The Affordability Period for the Affordable Units which are the subject of the Casualty
Event shall be tolled during the period of time such units do not exist.
13. Default and Remedies. Any failure to satisfy the obligations in this Agreement shall be
a breach of this Agreement. The City's remedies under this Agreement are as follows:
a. Violation of Agreement With Respect _to Affordable Housing Requirement. If
Developer markets or charges rent in a manner that is inconsistent with the Affordable
Housing Requirement, the City may declare an event of default by providing notice to
the Developer. Upon Developer's receipt of such notice, Developer shall have sixty
(60) calendar days to cure the default by: (1) marketing or charging rent in a manner
that is consistent with this Agreement; and (2) Developer paying liquidated damages
in the following amount:
(i) two times the excess of actual rent received by Developer over the Rent
Limit that would otherwise apply for each unit not in compliance; plus
(ii) the actual enforcement costs of the City with respect to the Affordable Units
that are subject to such damages.
If the City is entitled to pursue its remedies under this Section 13.a, then Developer
shall provide the City an accounting of the actual rent received by Developer as
referenced in Section 13.a.i above. If Developer fails to do so within thirty (30) days
after Developer's receipt of a request for such information, then, with respect to the
units that Developer has failed to provide such information only, (i) the City may
calculate the damages under Section 13.a using the applicable market rental rate that
would apply to each Affordable Unit absent the affordability restriction that Developer
has reported to the City pursuant to Section 8 above (in lieu of the actual rent received).
Upon the payment of any such liquidated damages, Developer shall be deemed to be
in compliance under this Agreement with respect to each Affordable Unit for the time
period to which the liquidated damages that have been paid pertain. If Developer does
not pay such liquidated damages within thirty (30) days of being invoiced, the
Authority may retain an amount up to and including the amount of liquidated damages
invoiced from any and all payments it would otherwise be required to make to
Developer pursuant to the Development and Reimbursement Agreement associated
with the Plan.
b. Failure to Satisfy Reporting Obligations to City: If Developer fails to provide the
information to the City required under Section 8 above (after the passage of all
applicable notice and cure periods), then the City's sole remedy shall be to extend the
Affordability Period for an additional three (3) months for each breach of Section 8.
c. Payment into Affordable Housing Fund: Any amounts required to be paid to the City
under this Agreement may be utilized by the City for its affordable housing fund, or
for any other purpose the City determines, including ensuring that eligible tenants who
overpaid the Rent Limit are made whole. Developer is still obligated to pay the City
such amounts under this Agreement regardless of whether or not such City fund exists.
14. No Limitation on Remedy. Nothing contained in this Agreement shall limit the exercise
of any remedy contained in any other agreement or available in law or equity.
15. Notices. All notices, consents, approvals, requests and other communications, herein
collectively called "Notices", required or permitted under this Agreement shall be given
in writing, signed by an authorized representative of City, Authority, or Developer, as the
case may be, and either mailed by certified or registered mail return receipt requested; or
sent by recognized overnight delivery service for next day delivery, and addressed as
follows:
To the City/Authority:
Jake Eckholm
Economic Development Director
jake.eckholm@shorelinecity.com
(231) 724-4141
Muskegon City Hall
933 Terrace St,
Muskegon, MI 49440-1397
With Copy to:
City Attorney
Parmenter Law
601 Terrace St.
Muskegon, MI 49440
To Developer:
Jonathan Rooks
75 W. Walton Ave, Suite A
Muskegon, MI 49440
jon@parklandgr.com
With Copy to:
Jared T. Belka
Warner Norcross + Judd LLP
150 Ottawa Ave NW
Grand Rapids, MI 49503
All Notices shall be effective upon receipt. Any party to this Agreement may change its
address for the receipt of Notices to an address in the United States or designate
additional addresses to whom copies of Notices shall be sent at any time by giving Notice
thereof to the others as herein provided.
16. Third Party Management. The Parties acknowledge that Developer may choose to enter
into a contract with a third-party property management firm (“Property Manager”) and
that the Property Manager may, as part of its contract with Developer, perform certain
services described in this Agreement. Developer acknowledges it remains responsible for
all obligations, liable for all defaults and subject to all remedies under this Agreement
regardless of the performance of any Property Manager.
17. Miscellaneous Provisions.
a. This Agreement may be modified or amended in whole or in part only by mutual
written agreement.
b. A failure by any party to give notice or insist on the immediate performance of any
right that it has under this Agreement shall not constitute a waiver of that right or any
other right under this Agreement.
c. This Agreement shall not be assigned, transferred, or conveyed without the prior
written consent of the other parties, which consent will not be unreasonably withheld,
conditioned, or delayed.
d. The parties agree that all rights and remedies provided in this Agreement shall be
deemed cumulative and additional and not in lieu of or exclusive of each other or in
any other remedy available at law or in equity.
e. Nothing contained in this Agreement, nor any act of Developer, the Authority, or the
City shall be deemed or construed by any of the parties hereto or by any third person
to create any relationship of third-party beneficiary, principal and agent, limited or
general partnership, or joint venture, or of any association or relationship other than
that of contracting parties.
f. Notwithstanding any other provisions of this Agreement, any required permitting,
licensing, or other regulatory approvals by any governmental authority shall be
subject to and undertaken in accordance with the established procedures and
requirements of such governmental authority, as may be applicable, with respect to
similar projects and in no event shall the governmental authority by virtue of any
provision of this Agreement be obligated to take any actions concerning regulatory
approvals,
. If this Agreement contains any unlawful provisions not an essential part of this
Agreement and which shall not appear to have a controlling or material inducement
to the making thereof, such provisions shall be deemed of no effect and shall be
deemed stricken from this Agreement without affecting the binding force of the
remainder. In the event any provision of this Agreement is capable of more than one
interpretation, one which would render the provision invalid and one which would
render the provision valid, the provision shall be interpreted so as to render it valid.
. The laws of the State of Michigan shall govern the validity, performance and
enforcement of this Agreement.
This Agreement, and all the documents and agreements described or referred to
herein, including, without limitation, any exhibits hereto, constitute the full and
complete agreement between the parties hereto with respect to the subject matter
hereof, and supersedes and controls in its entirety over any and all prior agreements,
understandings, representations and statements whether written or oral by each of the
parties hereto.
The headings used in connection with the Sections and paragraphs of this Agreement
are for convenience only and shall not be deemed to construe or to limit the meaning
of the language of this Agreement.
. This Agreement may be executed in counterparts, each of which shall be deemed to
be an original document and together shall constitute one instrument.
[SIGNATURE PAGE FOLLOWS]
The City, the Authority, and the Developer, by and through their duly authorized officers and
representatives, have executed this Agreement as follows:
CITY OF MUSKEGON
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Ken Johnson, Mayor
Qtaueih
Ann Meisch, Clerk
MUSKEGON BROWNFIELD
REDEVELOPMENT AUTHORITY
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Martha Bottomley, Chapasan
DEVELOPER
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Jonathan L. oer
s, on behalfof Developer entities
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