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CITY OF
m2 ~” @ MUSKEGON
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: May 27, 2025 Title: Municipal Services Agreement for Park
Terrace Apartments Acquisition
Submitted by: Jake Eckholm, Development Department: Economic Development
Services Director
Brief Summary:
The existing ownership of Park Terrace Apartments and Village at Park Terrace Senior Apartments is
seeking to sell the portfolio to new ownership. In order to preserve and lengthen the affordability
period, a new Municipal Services Agreement is required for both projects.
Detailed Summary & Background:
Staff and the City Attorney's office have been working jo finalize the draft agreements before you
related to this project with the new owner. They hope to put significant capital investment into the
facilities in the coming years, and in order to finance the project and make that possible they are
requesting an updated and restated Municipal Services Agreement on both Park Terrace as well as
the senior living component Village at Park Terrace. The agreement establishes a new Municipal
Services Agreement of 2% of the annual shelter rent. This is to our advantage because the total MSA
revenue stays with the City, rather than being split between the taxing jurisdictions like the PILOT
payment. This document is the contract for housing exemption for up to 25 years, which will require
adherence to MSHDA regulated rents per requirements in our local ordinance.
Goal/Focus Area/Action Item Addressed:
Key Focus Areas:
Diverse housing types
Retain youth within the city
Goal/Action Item:
2027 Goal 2: Economic Development Housing and Business
Amount Requested: Budgeted Item:
NA Yes No N/A a
Fund(s) or Accouni(s): Budget Amendment Needed:
NA Yes No N/A |
Recommended Motion:
Motion to accept the Municipal Services Agreement for Park Terrace Apartments as presented, and
MUNICIPAL SERVICES AGREEMENT
THIS MUNICIPAL SERVICES AGREEMENT (“Agreement”) is entered into on this day of May
27, 2025 (the “Effective Date”) between Park Terrace Limited Dividend Housing Association,
LLC, a Michigan limited liability company, its successors and/or assigns, whose address is 7451
N 63 St., Longmont, Colorado 80503 (the “Owner”’) and the CITY OF MUSKEGON, 933
Terrace Street, Muskegon, MI 49440 (the “City”) is made pursuant to the following terms:
RECITALS
A. Owner will acquire property in the City of Muskegon more particularly described on
Exhibit A attached hereto and intends to continue operating the project thereon (the
“Project”) as a low-income housing project.
B. The parties recognize that due to the high concentration of persons residing at the Project
that the City will be providing a higher level and greater amount of Municipal Services (as
defined in this Agreement) to the Project.
C. The City, through its Police and Fire Departments and otherwise, provides Municipal
Services within the City. The Project will have special needs for these types of Municipal
Services and Owner acknowledges that such needs may be greater than typically situated
residential developments.
D. The Owner desires to guarantee that certain Municipal Services will be provided to the
Project until the term of the Amended and Restated Contract for Housing Exemption
(hereinafter referred to as the “Contract for Housing Exemption”) for this Project expires,
such Municipal Services to include, but not be limited to:
1. Emergency services, including police and fire services specifically
administered through the City, and, on public streets and sidewalks,
maintenance, repair, snow removal, and street lighting; also to include other
matters as the City deems necessary;
2. Other miscellaneous services as may, from time to time, be mutually agreed to
for the benefit of the Project;
3. Said municipal services shall be provided in the customary way and in
accordance with all laws, rules and regulations of the United States of America,
State of Michigan, County of Muskegon and City of Muskegon or other
applicable jurisdictions or bodies.
(All of the above collectively referred to as “Municipal Services”)
4. Nothing in this Agreement shall be deemed to waive any defense to claims
based on sovereign or governmental immunity.
AGREEMENT
The parties agree as follows:
1. Provision of Services. The City will provide the Municipal Services to the Project.
2. Payment. The Owner shall pay a service charge on or before July 1, of each year following
the Effective Date, during the time the Contract for Housing Exemption is in effect (the
“Municipal Service Fee”). The Municipal Service Fee shall be two (2%) percent of the net
rent adjusted for vacancies received annually, excluding project paid utilities, starting
during the calendar year of the Effective Date. For the initial year and final years of the
Term (hereinafter defined), the Municipal Service Fee shall be pro-rated based on the
portion of the City’s fiscal year (July 1 — June 30) that falls on or after the Effective Date
or on or before the Termination Date (hereinafter defined), as applicable.
Term. The obligation for payment for Municipal Services shall commence as of the
Effective Date and continue until the date that the Contract for Housing Exemption
terminates (the “Termination Date”), not to exceed 25 years. The period from the Effective
Date until Termination Date shall be referred to as the “Term.” This Agreement is
contingent upon Owner acquiring the real property described in Exhibit A by September
1, 2025. If Owner fails to acquire the real property by this date, this Agreement will become
null and void and have no further effect.
Audit. Owner shall submit, upon request by the City, a copy of the annual audit of the
Project prepared by an independent CPA along with the payment of the Municipal Service
Fee.
Exclusive Benefit. The obligations of the Owner hereunder are imposed solely and
exclusively for the benefit of the City and no other person or entity shall have the standing
to enforce such obligations or be deemed to be beneficiaries of such obligations.
Remedies. The Owner agrees that if it does not perform its obligations under this
Agreement the City is entitled to pursue any and all remedies legal or equitable that it is
entitled to under Michigan law. The Owner agrees to be liable for all costs of collection
including reasonable attorney's fees and costs incurred by the City in the enforcement of
the terms of this Agreement, if Owner is found to be in default of this Agreement by a court
of competent jurisdiction.
Assignment. Upon the written consent of the City, the Owner may transfer or assign its
rights and obligations under this Agreement to a buyer (“Transferee”) of the Project. The
Transferee must agree to assume the Owner’s obligations under this Agreement. Upon
assignment and assumption of this Agreement by the Transferee (or an affiliate, as
provided below), the Owner shall be relieved of any further liabilities or obligations
accruing under this Agreement. Notwithstanding the foregoing, the Owner may assign this
Agreement, without the written consent of the City, to an affiliate of Owner (provided that
such affiliate agrees to assume the Owner’s obligations hereunder and provided that the
Owner and assignee give prior notice of the assignment to the City with evidence that the
assignee has agreed to assume the obligations of the Owner).
8. Severability. If any term or condition of this Agreement is found to be void, invalid, or
unenforceable, the validity or enforceability of the remaining terms and conditions shall
not be affected or impaired and will continue in full force and effect.
9. Notices. All notices under this Agreement must be in writing and sent to the respective
parties as follows:
If to Owner:
Liam Moor LLC
Attention: Michael Dalen
T7451 N 63rd St.
Longmont, CO 80503
If to the City:
City of Muskegon
Attn: City Manager
933 Terrace Street
Muskegon, MI 49440
With copy to:
Parmenter Law
Attn: City Attorney
601 Terrace St.
Muskegon, MI 49440
Every notice must be in writing and sent by one of the following methods:
a. Personal delivery, in which case delivery shall be deemed to occur the day of the delivery.
b. Certified or registered mail, postage prepaid, return receipt requested, in which case
delivery shall be deemed to occur the day it is officially recorded by the U.S. Postal Service
that is has delivered it to the intended recipient; or
Next day delivery by a recognized private delivery service such as Federal Express,
providing proof of mailing and delivery comparable to certified or registered mail, return
receipt requested, in which case delivery shall be deemed to occur upon delivery as
recorded by the delivery service. Either party may change the address provided in this
paragraph for itself or its attorney by providing notice of such change to the other party as
required in this paragraph.
10. No Waiver. No delay, omission, or failure of the City to act under this Agreement or to
insist upon strict compliance with any term and condition of this Agreement, and no custom
or practice of the parties at variance with the terms and conditions of this Agreement shall
constitute a waiver of City’s right to demand exact compliance with this Agreement. No
waiver of any right or remedy of City shall be construed as a bar to or a waiver of any such
right or remedy on any future occasion.
11. Headings. The headings in this Agreement have only been inserted for convenience and
shall not affect the meaning or interpretation of this Agreement. No heading shall have any
legal significance of any nature whatsoever.
12. Binding Effect. This Agreement shall be binding on the parties, their heirs, successors, and
assigns.
13. Amendments. There shall be no modification or amendments to this Agreement, including
this section, unless they are in writing and signed by all the parties to this Agreement.
14. Governing Law. This Agreement has been executed in the State of Michigan, and shall be
governed by Michigan law.
15. Complete Agreement. This Agreement contains the entire agreement between the parties
and supersedes all prior oral or written representations, negotiations and agreement on the
subject matter stated herein.
{Signatures on next page}
Municipal Services
Agreement Signature Page
IN WITNESS WHEREOF, this Municipal Services Agreementis executed as
of the day and year first written above.
CITY:
CITY OF MUSKEGON
Dated: -2¢ —_ 2008 By: 7 ee
“ Ken Johngon, Mayor
Dated: -¢ , 2025 Oe were
)
‘Ann Meisch, City Clerk
OWNER:
Park Terrace Limited Dividend Housing
Association, LLC a Michigan limited
liability company
Nene: Adam Stein
Tis: Manager
EXHIBIT A
LEGAL DESCRIPTION
[See Attached]
That part of RUDDIMAN TERRACE, Section 36, Town 10 North, Range 17 West, as recorded
in Liber 12 of Plats on Pages 33 and 34, described as beginning at a point on the North line of
Hackley Avenue which is North 00 degrees 00 minutes 00 seconds East 33.00 feet along the North-
South 1/4 line of said Section 36 and South 89 degrees 58 minutes 00 seconds West 31.30 feet
from the central 1/4 corner of said Section 36; thence South 89 degrees 58 minutes 00 seconds
West 352.45 feet along the North line of Hackley Avenue; thence North 00 degrees 00 minutes 00
seconds East 210.93 feet; thence North 90 degrees 00 minutes 00 seconds West 64.57 feet; thence
North 09 degrees 34 minutes 32 seconds West 186.05 feet; thence Southwesterly 844.98 feet along
the arc of a 890.90 foot radius curve to the left said curve having a central angle of 54 degrees 20
minutes 33 seconds, and the chord of which bears South 60 degrees 50 minutes 17 seconds West
813.66 feet; thence South 33 degrees 40 minutes 00 seconds West 15.07 feet; thence North 56
degrees 20 minutes 00 seconds West 314.57 feet; thence Northeasterly 15.29 feet along the arc of
a 81.19 foot radius curve to the right, said curve having a central angle of 10 degrees 47 minutes
21 seconds, the chord of which bears North 28 degrees 16 minutes 41 seconds East 15.27 feet;
thence Northeasterly 1186.50 feet along the arc of a 1206.90 foot radius curve to the right, said
curve having a central angle of 56 degrees 19 minutes 39 seconds, and the chord of which bears
North 61 degrees 50 minutes 11 seconds East 1139.30 feet; thence North 90 degrees 00 minutes
00 seconds East 253.42 feet; thence Southeasterly 111.52 feet along the arc of a 83.00 foot radius
curve to the right, said curve having a central angle of 76 degrees 58 minutes 52 seconds, and the
chord of which bears South 51 degrees 30 minutes 34 seconds East 103.32 feet; thence North 89
degrees 46 minutes 46 seconds East 82.83 feet; thence South 00 degrees 00 minutes 00 seconds
East 646.74 feet along the West line of Parslow Street to the Point of Beginning.
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