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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 Head Information Technology Other Division Heads Communication 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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