Approved Agreements and Contracts 2025/01/14 EGLE Grant Development Agreement Lofts of Muskegon 122 W Muskegon

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                                              CITY OF


                                =~”
                                  @ MUSKEGON

                         Agenda Item Review Form
                        Muskegon City Commission

Commission Meeting Date: January 14, 2025            Title: EGLE Grant Development Agreement, City
                                                     of Muskegon and Muskegon Limited Dividend
                                                     Housing Association, Lofts of Muskegon, 122 W.
                                                     Muskegon Ave.


Submitted by: Contessa Alexander, Development | Department: Economic Development
Analyst


Brief Summary:
Muskegon Limited Dividend Housing Association has been invited to apply for an EGLE Grant in the
amount of $850,000 on behalf of the City of Muskegon.

Detailed Summary & Background:
Muskegon Limited Dividend Housing Association, LLC (the developer) has been invited to apply for
an EGLE Grant on behalf of the City of Muskegon (applicant) for the proposed Lofts of Muskegon
development located at 122 W. Muskegon Avenue. The grant request totals $850,000.

The site, last occupied by a fast-food restaurant from 1997 to 2015, is currently vacant. The proposed
redevelopment involves the construction of a 4-story multifamily affordable housing complex with 46
units, following the demolition of existing site features. The total private investment is estimated at
approximately $16 million, with the creation of two part-time jobs anticipated.

Due to its historical uses—including a gas station, battery storage shop, dry cleaner, and auto repair
shop—the site has documented contamination. Soil and soil gas samples collected from the property
reveal the presence of contaminants, necessitating the proper management of contaminated soil
and the implementation of a vapor mitigation system {VMS} to safeguard indoor air quality for future
residents. Grant funds will be utilized to cover the design and installation of the VMS and the removal
and proper disposal of contaminated soil generated during site demolition and redevelopment
(excluding the cost of excavation).


The project is exoected to commence in March 2025, with completion anticipated by March 2026.
EGLE requires a development agreement between the applicant and the developer, outlining the
responsibilities of each party. A draft of the proposed development agreement is attached for
review.



Goal/Focus Area/Action Item Addressed:


Key Focus Areas:
Diverse housing types
Diversity reflected in businesses and business owners Improved reputation for inspections department
Micro-commercial areas in neighborhoods


                                                                                            Pane 9NR af RRP
Retain youth within the city
Neighborhood commercial center development
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 | |
Fund(s) or Accouni(s):                             Budget Amendment Needed:
N/A                                                Yes            No           N/A


Recommended Motion:
| move to approve the EGLE grant development agreement between the City of Muskegon and
Muskegon Limited Dividend Housing Association, LLC, for the Lofts of Muskegon project at 122 W.
Muskegon Ave. and authorize the City Mayor fo sign.

Approvals:                                         Guesi(s) Invited / Presenting:

 immediate Division
                                                      No
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 Legal Review




                                                                                        Paae 209 of 382
                            CITY OF MUSKEGON, MICHIGAN
               BROWNFIELD REDEVELOPMENT GRANT AGREEMENT


This Brownfield Redevelopment Grant Agreement (the “Agreement”) made by the City of
Muskegon Brownfield Redevelopment Authority, a Michigan public body corporate whose
address is 933 Terrace Street, Muskegon, MI 49443 (the “Authority”), the City of Muskegon, a
Michigan municipal corporation, whose address is 933 Terrace St., Muskegon, Michigan 49440
(the “City’); the Muskegon Housing Commission (the “Sponsor”), and Lofis of Muskegon Limited
Dividend Housing Association LLC, a Michigan limited liability company, with a business address
of 9100 Centre Pointe Drive, Suite 210, West Chester, Ohio 45069 (the “Developer”).


                                          RECITALS


        WHEREAS, the Sponsor is a nonprofit member of the Developer, and the Developer
intends to develop the property in the City of Muskegon which is described on the attached Exhibit
A (the “Property”) and which, as defined by Part 201 of Michigan’s Natural Resources and
Environmental Protection Act (P.A. 451 of 1994, as amended), is an “eligible property” and is
therefore commonly referred to as a “brownfield”, and


        WHEREAS, the City has applied for and expects to receive a $850,000 Michigan
Department  of Environment, Great Lakes & Energy (EGLE, formerly Department of
Environmental Quality) Brownfield Redevelopment Grant (the “Grant Funds”), as authorized by
Part 196 of Michigan Public Act 451 of 1994 the Natural Resources and Environmental Protection
Act (the “Part 196”) on the behalfof the Developer; and


        WHEREAS, pursuant to Part 196, Grant Funds are to be used to undertake cleanup of
brownfield sites by making low interest loans and grants to parties willing to undertake cleanup of
these sites; and that the LEDC is responsible for the administration of the Grant Funds; and


       WHEREAS, the City intends to use the Grant Funds to reimburse costs incurred by the
Developer for undertaking certain work related to the assessment, investigation, remediation, and
mitigation of environmental contamination (the “Developer Eligible Activities”) in connection
with the redevelopment of the Property, per the Michigan Department of Environment, Great
Lakes   &    Energy   (EGLE,   formerlyDepartment of Environmental Quality) Brownfield
Redevelopment Grant Contract (Project Name: Lofts of Muskegon, Location Code: NA, Tracking
Code: NA) (“Grant Contract”), a copy of which is attached as Exhibit B, and approved EGLE
Work Plan (together the “Project”). As part of the Project, the City may conduct certain eligible
public infrastructure improvement activities as further described in the Work Plan (“City Eligible
Activities”);


        WHEREAS, to effectuate this reimbursement, the Grant Funds shall be funded by the City
to the Sponsor, which Sponsor is a member of the Developer, and the Sponsor shall contribute or
loan the Grant Funds (as determined by Developer’s tax counsel) to the Developer to reimburse
Developer Eligible Activities undertaken in accordance with the terms of this Agreement.
                                           AGREEMENT


NOW THEREFORE, for good and valuable consideration including the mutual covenants of the
Parties made herein, the receipt and sufficiency of which consideration is hereby acknowledged,
the parties agree as follows:


1.0    Reimbursement Source.
        1.1    During the Term (as defined below) of this Agreement, and subject to and as
               provided by the terms and conditions of this Agreement, and subject to
               determination by the City in its sole discretion that the Developer has sufficient
               funding and the Project is otherwise likely to be completed and occupied, the
               Authority agrees to use the Grant Funds to fund the Sponsor, which shall effectuate
               the reimbursement of the Developer and City for the costs of their Eligible
               Activities, as defined by Part 196, per Grant Contract and Work Plan, in an amount
               not to exceed the amount of the Grant, The amount reimbursed to the Developer
               and City, respectively, for their Eligible Activities shall not exceed the Total Grant
               Funds, and reimbursements shall be made on approved costs submitted and
               approved in connection with the Developer Eligible Activities and the City Eligible
               Activities, as follows:


                1.1.1.   the Authority shall pay 100% of available Grant Funds to the City until such
                         time as the City is paid in full for 100% of the City Eligible Expenses up to
                         3%; and


               1.1.2     At such time as the City is paid in full for 100% of the City Eligible
                         Expenses, the Authority shall pay 100% of available Grant Funds to
                         Developer to reimburse the cost of the remaining Developer Eligible
                         Activities submitted and approved for reimbursement by the Authority until
                         Developer is fully reimbursed.


               The Developer accepts and agrees to the requirements and limitations stated in the
               terms and conditions of the Grant Contract and Work Plan, a copy of which is
               attached as Exhibit B, and which terms and conditions are incorporated herein by
               reference. The Developer agrees to comply with such terms and conditions to the
               extent same are under its control or influence, even though the Developer is not a
               party to the Grant Contract, and to fully cooperate with the City in the City’s efforts
               to comply with said terms and conditions.


2.0     Developer’s Indemnification. The Developer acknowledges that the City and Authority
        will have certain obligations under the Grant Contract and Work Plan and agrees to
        indemnify and hold harmless the City, its employees, officers, agents, and assigns for any
        and all losses incurred by the City or Authority, including reasonable and actually incurred
        attorney's fees, related to the terms and conditions of the Grant Contract and Work Plan,
        which losses are caused directly and proximately by the acts or omissions of the Developer,
        its employees, officers, agents, and assigns. Both the Grant Contract and Work Plan are
                                                   N
      incorporated by reference upon their creation. Developer agrees to comply with all
      conditions of the Grant Contract and Work Plan.


3.0   Developer Reimbursement Process.


      3.1         The Developer, with the Sponsor’s consent, shall submit to the Authority, not more
                  frequently than on a quarterly basis, a “Request for Cost Reimbursement” for
                  Developer Eligible Activities paid for by the Developer during the prior period. All
                  costs for the Developer Eligible Activities must be consistent with the approved
                  Grant Contract and Work Plan. The Developer must include documentation
                  sufficient for the Authority to determine whether the costs incurred were for
                  Developer Eligible Activities, including detailed invoices and proof of payment.
                  Copies of all invoices for Developer Eligible Activities must note what Developer
                  Eligible Activities they support.


      3.2         Unless the Authority disputes whether such costs are for Developer Eligible
                  Activities within thirty (30) days after receiving a Request for Cost Reimbursement
                  from the Developer, the Authority shall pay the Sponsor the amounts for which
                  submissions have been made pursuant to paragraph 1 of this Agreement, from
                  which the costs shall be wholly or partially paid from available Grant Funds. The
                  Sponsor agrees to accept such Grant Fund amounts and remit them to the Developer
                  for reimbursement of the approved costs. The Authority shall have no further
                  liability with respect to the Grant Funds after they have been funded to the Sponsor.


                  3.2.1.   The Developer and Sponsor shall cooperate with the Authority’s review of
                           its Request for Cost Reimbursement by providing all customarily required
                           and necessary supplemental information and documentation which may be
                           reasonably requested by the Authority. The Developer and Sponsor each
                           agrees to provide to the Authority with all information reasonably requested
                           by the Authority.


                  3.2.2    If the   Authority   determines   that   requested   costs   are   ineligible   for
                           reimbursement, the Authority shall notify the Sponsor and Developer in
                           writing of its reasons for such ineligibility within the Authority’s thirty (30)
                           day period of review.   The Developer and Sponsor shall then have thirty (30)
                           days to provide supplemental information or documents to the Authority
                           demonstrating that the costs are for Developer Eligible Activities and are
                           eligible for reimbursement.


      3.3         The Authority is not required to reimburse the Sponsor or Developer from any
                  source other than Grant Funds.

                  The Authority shall send all payments to the Developer by registered or certified
      td
           whe.




                  mail, addressed to the Developer at the address shown below, or by electronic funds
                  transfer directly to the Developer's bank account. The Developer may change its
                                                      Loe]
            address by providing written notice sent by registered or certified mail to the
            Authority.


4.0   City Reimbursement Process.


      4.1   The City shall submit to the Authority, not more frequently than on a quarterly
            basis, a “Request for Cost Reimbursement” for City Eligible Activities paid for by
            the City during the prior period. All costs for the City Eligible Activities must be
            consistent with the approved Grant Contract and Work Plan. The City must include
            documentation sufficient for the Authority to determine whether the costs incurred
            were for City Eligible Activities, including detailed invoices and proof of payment.
            Copies of all invoices for City Eligible Activities must note what City Eligible
            Activities they support.


      4,2    Unless the Authority disputes whether such costs are for City Eligible Activities
             within thirty (30) days after receiving a Request for Cost Reimbursement from the
             City, until such time as the City is paid in full for 100% of the City Eligible
             Expenses, the Authority shall pay the City the amounts for which submissions have
             been made pursuant to paragraph 4.2 of this Agreement in accordance with the
             priority set forth in paragraph 1, from which the submission may be wholly or
             partially paid from available Grand Funds.


             4.2.1.   The City shall cooperate with the Authority's review of its Request for Cost
                      Reimbursement by providing supplemental information and documentation
                      which may be reasonably requested by the Authority. The City agrees to
                      provide to the Authority with all information reasonably requested by the
                      Authority.

             4.2.2    If the Authority determines that requested costs are ineligible for
                      reimbursement, the Authority shall notify the City in writing of its reasons
                      for such ineligibility within the Authority's thirty (30) day period ofreview.
                      The City shall then have thirty (30) days to provide supplemental
                      information or documents to the Authority demonstrating that the costs are
                      for City Eligible Activities and are eligible for reimbursement.


             The Authority shall send all payments to the City by registered or certified mail,
             addressed to the City at the address shown above, or by electronic funds transfer
             directly to the City's bank account. The City may change its address by providing
             written notice sent by registered or certified mail to the Authority.

      Term. The Authority’s obligation to reimburse Developer and City for the Eligible
      Activities incurred under this Agreement shall terminate earlier of the date when all
      reimbursements to the Developer and City under this Agreement or for Eligible Activities
      completed prior to December 31, 2027 (the “Term”). This Agreement is subject to the
      approval and receipt of the Grant Funds. If the City’s grant application is not approved and
      funded by EGLE then this Agreement shall be deemed null and void.
6.0      The Sponsor’s and Developer's addresses are as follows:
                 Developer:


                 Mail:    9100 Centre Pointe Drive, Suite 210
                           West Chester, Ohio 45069


                 Attn:    Don Day
                 Email: don.day@pivotal-hp.com
                 Phone: (313) 231.1481


                 Sponsor:
                 MAIL: 1080 Terrace Street.
                          Muskegon, MI 49442-3346
                 Attn; Angie Mayeaux
                 Email:
                 Angela.Mayeaux@muskegonhousing.org
                 Phone: (231) 722-2647
7.0      The City’s addresses are as follows:
                 Mail:    601 Terrace St.
                          Muskegon, MI 49440


                 Attn:    City Attorney
                 Email: john@parmenterlaw.com
                 Phone: 231-722-5401


7.0 Assignment. This Agreement and the rights and obligations under this Agreement shall not be
      assigned or otherwise transferred by any party without the consent of the other parties, which
      shall not be unreasonably withheld, provided, however, the Developer and City may assign
      their interest in this Agreement to one of their respective affiliates, as defined below without
      the prior written consent of the City if such affiliate acknowledges its obligations to the City
      under this Agreement upon assignment in writing on or prior to the effective date of such
      assignment. As used in this paragraph, “affiliate’ means any corporation, company,
      partnership, limited liability company, trust, sole proprietorship or other entity or individual
      which (a) is owned or controlled by the Developer or City (as applicable), (b) owns or controls
      the Developer or City (as applicable) or (c) is under common ownership or control with the
      Developer or City (as applicable). This Agreement shall be binding upon and inure to the
      benefit of any successors or permitted assigns of the parties. Own, control and common
      ownership shall mean that not less than 80% of the ownership/control of the assignee is owned
      and controlled by Developer.

8.0 Miscellaneous.
          8.1 All notices shall be given by registered or certified mail addressed to the parties at their
              respective addresses as shown above. Any party may change the address by written
              notice sent by registered or certified mail to the other party.
8.2 The headings preceding each section of this Agreement are for convenience of
   reference only and shall not affect the construction or meaning of the provisions hereof.


8.3 If any part of this Agreementis found to beinvalid or unenforceable, it shall not affect
   any remaining portion of this Agreement, which shall continue to bein full force and
   effect and be severable from any invalid provision.


8.4 This Agreement, including any exhibits hereto, constitutes the entire agreement
   between the Parties and shall supersede any other agreements, written or oral, dated
   prior to the execution of this Agreement.      No provision of this Agreement may be
   waived, changed, cancelled, modified or discharged orally, but only by an agreement
    in writing and signed by the Party against whom enforcement of any waiver, change,
    cancellation, modification or discharge is sought. This Agreement represents the entire
    agreement between the Parties, and fully and completely sets forth all terms and
    conditions of the transactions embodied in this Agreement.


8.5 No delay or failure by either party to exercise any right under this Agreement, and no
    partial or single exercise of that right, constitutes a waiver of that or any other right,
    unless otherwise expressly provided herein.


8.6 Except as otherwise provided in this Agreement, all representations, warranties,
    covenants and agreements of the parties contained or made pursuant to this Agreement
    shall survive the execution of this Agreement.


8.7 The recitals set forth above are incorporated by reference into the Agreement as if fully
    set forth therein.


8.8 This Agreement may be executed in counterparts, each of which is an original and all
    of which together constitute one and the same instrument.


8.9 This Agreement shall be binding upon, and inure to the benefit of and be enforceable
    by, the Parties and their respective legal Representatives, permitted successors and
    assigns,


8.10    The Parties hereby agree that this Agreement shall be governed by and construed
    and enforced in accordance with the internal laws of the State of Michigan without
    giving reference to principles of conflict of laws. The state courts of the State of
    Michigan shall have jurisdiction to hear and determine any dispute among the Parties
    pertaining directly or indirectly to this Agreement or any matter arising therefrom, and
    Developer expressly consents and submits in advance to such jurisdiction in any action
    or proceeding commenced in such courts by either Party hereto. 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 venue.



                             (Signatures on the following page)



                                          6
The City — City of Muskegon




Name: Ken Johnson /
Title:    Mayor


By:               mon Yrore,
                           Yr
Name: Ann Meisch
Title: Clerk




The Developer — Lofts of Muskegon Limited Dividend Housing Association LLC,
a Michigan limited liability company


By:       PHP Lofts of Muskegon LLC,
          an Ohio limited liability company
Its:     | Managing Member


By:       Pivotal GP Holding LLC,
          a Georgia limited liability company
Its:     | Sole Member



Name:
Its:      Authorized Signer



TheS pe — Muskegon Housing Commission
                                           EXHIBIT A
                            LEGAL DESCRIPTION OF PROPERTY




Land situated in the City of Muskegon, Muskegon County, Michigan:


Block 331, except the Easterly 59 feet thereof, and except the Northerly 175 feet thereof,
Revised Plat (of 1903) of the City of Muskegon, according to the Plat thereof, as recorded in
Liber 3 ofPlats, Page 71.


Parcel #: 61-24-205-331-0001-00


Commonly known as: 122 W. Muskegon Avenue, Muskegon, MI 49440.
                        EXHIBIT B
MICHIGAN DEPARTMENT OF ENVIRONMENT, GREAT LAKES & ENERGY
            BROWNFIELD REDEVELOPMENT GRANT

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