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CITY OF
ma ~” m@ MUSKEGON
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: December 10, 2024 Title: Brownfield Plan Amendment, Lakeshore
Hotel Partners, LLC, 181 and 201 Viridian Drive
Submitted by: Contessa Alexander, Developmen? | Department: Economic Development
Analyst
Brief Summary:
Lakeshore Hotel Partners, LLC has submitted a Brownfield Plan Amendment for the Harbor 31 Hotel
redevelopment at 181 and 201 Viridian Drive. The project involves constructing a five-story hotel with
124 rooms, and 146 parking spaces.
Detailed Summary & Background:
The project site, located at 181 and 201 Viridian Drive, is currently vacant but has a long history of
industrial use dating back to the 1800s. This industrial activity has left the property with various
contaminants. The developer is in the process of completing both a Phase | Environmental Site
Assessment (ESA) and a Baseline Environmental Assessment (BEA).
The contaminants identified on-site include benzo(a)pyrene, fluoranthene, naphthalene,
phenanthrene, arsenic, cadmium, chromium (total), copper, lead, selenium, zinc, and nickel. Given
the historical usage and the presence of these contaminants, the property qualifies as an eligible
property under the Michigan Redevelopment Financing Act, Act 381 of 1996.
A Brownfield Plan has been established to reimburse both existing and anticipated eligible costs fo
the developer. Tax increment revenues (TIR) will be captured from local sources only to facilitate this
reimbursement. The total cost of eligible activities anticipated for reimbursement, inclusive of
contingencies, is estimated at $2,392,792. Additionally, the BRA administrative costs are expected to
be up to $364,771, with an estimated capture of TIR for the Local Brownfield Revolving Fund (LBRF) up
to $890,145,
Project Overview and Tax Increment Financing Plan
The redevelopment project, with an initial taxable value set at the 2024 combined amount of
$200,800, is scheduled to begin construction in fall 2024 and reach completion by fall 2025. Upon
completion, the taxable value of the property is projected to increase to approximately $5,000,000.
Tax Increment Revenue (TIR) Collection
Tax increment revenue collection will commence within five years of the plan's adoption, it is
anticipated to start as early as 2026. An estimated schedule of captured taxable value by year is
presented in Table 2 of the Brownfield Pian. Reimbursements will be based on the actual tax
increment realized. Once all eligible expenses have been reimbursed, the Brownfield
Redevelopment Authority (BRA) may capture up to five additional years of tax increment revenues
to deposit into the Local Brownfield Revolving Fund (LBRF), or until the total eligible activity costs are
met, whichever is sooner.
Public Act 255 Commercial Redevelopment Act Tax Abatement
The project also seeks a 12-year tax abatement under Public Act 255, the Commercial
Redevelopment Act, to support the redevelopment efforts.
Plan Duration and Capture Timeline
The plan is designed to remain in place for 25 years or uniil all eligible activities are fully reimbursed. If
eligible costs are covered sooner, up to five additional years of TIR capture may continue for LBRF
funding. However, the maximum plan duration will not exceed 30 years.
Eligible Activities and Costs
The following are the estimated costs for eligible activities under this plan:
* Site Assessment and Baseline Environmental Assessment Activities: $20,000
® Site Demolition Activities: $10,000
* Due Care Activities: $370,000
® Site Preparation: $997,000
« Local Only Eligible Activities Subtotal: $1,397,000
* Contingency (15%): $205,050
« Interest Expense (5%): $770,742
¢ Brownfield Plan/Work Plan Preparation: $10,000
‘e Brownfield Plan/Work Plan Implementation: $10,000
Total Cost for Local Only Eligible Activities: $2,392,792
Goal/Focus Area/Action Item Addressed:
Key Focus Areas:
Progress toward completion of ongoing economic development projects
Goal/Action Item:
2027 Goal 2: Economic Development Housing and Business
Amount Requested: Budgeted Item:
N/A Yes No N/A | X
Fund(s) er Accouni(s): Budget Amendment Needed:
N/A Yes No N/A X
Recommended Motion:
| motion to approve the resolution for the Brownfield Plan Amendment for the Harbor 31 Hotel and
authorize the City Mayor and City Clerk to sign the attached resolution.
Approvals: Guesi(s) Invited / Presenting:
Immediate Division X
Head No
Information
Technology
RESOLUTION APPROVING THE BROWNFIELD PLAN AMENDMENT
Lakeshore Hotel Partners, LLC, (181 and 201 Viridian Drive)
(Harbor 31 Hotel)
City of Muskegon
County of Muskegon, Michigan
Minutes of a Regular Meeting of the City Commission of the City of Muskegon, County of
Muskegon, Michigan (the “City”), held in the City Commission Chambers on the 10th day of
December, 2024 at 5:30 p.m., prevailing Eastern Time.
PRESENT: Johnson, Kilgo, Gorman, Kochin, and St.Clair
ABSENT: Keener and German
The following preamble and resolution were offered by Commissioner Kilgo and
supported by Commissioner St. Clair.
WHEREAS, in accordance with the provisions of Act 381, Public Acts of Michigan, 1996,
as amended (“Act 381”), the City of Muskegon Brownfield Redevelopment Authority (the
“Authority”) has prepared and approved a Brownfield Plan Amendment to add Lakeshore Hotel
Partners, LLC, 181 and 201 Viridian Drive; and
WHEREAS, the Authority has forwarded the Brownfield Plan Amendment to the City
Commission requesting its approval of the Brownfield Plan Amendment; and
WHEREAS, the City Commission has provided notice and a reasonable opportunity to
the taxing jurisdictions levying taxes subject to capture to express their views and
recommendations regarding the Brownfield Plan Amendment, as required by Act 381; and
WHEREAS, not less than 10 days has passed since the City Commission provided
notice of the proposed Brownfield Plan to the taxing units; and
WHEREAS, the City Commission held a public hearing on the proposed Brownfield Plan
on December 10, 2024.
NOW, THEREFORE, BE IT RESOLVED THAT:
1. That the Brownfield Plan constitutes a public purpose under Act 381.
That the Brownfield Plan meets all the requirements of Section 13(1) of Act 381.
That the proposed method of financing the costs of the eligible activities, as identified
in the Brownfield Plan and defined in Act 381, is feasible and the Authority has the
authority to arrange the financing.
4. That the costs of the eligible activities proposed in the Brownfield Plan are
reasonable and necessary to carry out the purposes of Act 381.
5. That the amount of captured taxable value estimated to result from the adoption of
the Brownfield Plan is reasonable.
6. That the Brownfield Plan in the form presented is approved and is effective
immediately.
7. That all resolutions or parts of resolutions in conflict herewith shall be and the same
are hereby rescinded.
Be it Further Resolved that the Mayor and City Clerk are hereby authorized to execute
all documents necessary or appropriate to implement the provisions of the Brownfield Plan.
AYES: Gorman, Kochin, St.Clair, Johnson, and Kilgo
NAYS: None
RESOLUTION DECLARED APPROVED.
Ann Marie Meisch, City Clerk
Ne nbescrn—
Ken Johnson, Mayor
| hereby certify that the foregoing is a true and complete copy of a resolution adopted by
the City Commission of the City of Muskegon, County of Muskegon, State of Michigan, at a
regular meeting held on December 10, 2024 and that said meeting was conducted and public
notice of said meeting was given pursuant to and in full compliance with the Open Meetings Act,
being Act 267, Public Acts of Michigan, 1976, as amended, and altered under Michigan
Governor's Executive Order 2020-75 (COVID-19) and that the minutes of said meeting were
kept and will be or have been made available as required by said Act.
Qs as
Ann Marie Meisch, City Clerk
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