Approved Agreements and Contracts 2025/03/11 Act 425 Shared Jurisdiction Agreement with Fruitport Township

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                                                 CITY OF


                                  = Wy & MUSKEGON
                           Agenda Item Review Form
                          Muskegon City Commission

Commission Meeting Date: March 11, 2025                Title: Act 425 Shared Jurisdiction Agreement with
                                                       Fruitport Township


Submitted by: Jake Eckholm, Development                Department: Economic Development
Services Director


Brief Summary:
A portion of the former West Shore Correctional Facility site that we have been infilling as an
addition A portion of the former West Shore Correctional Facility site that we have been infilling as an
addition
to the Port City Industrial Park sits in Fruitport Township. We are proposing a legal agreement that is
available for cities per Act 425 which will allow both parties to collect a portion of their millage rates,
thereby making development of the site in the City's interest.
to the Port City Industrial Park sits in Fruitport Township. We are proposing a legal agreement
that is
available for cities per Act 425 which will allow both parties to collect a portion of their millage
rates,
thereby making development of the site in the City's interest.

Detailed Summary & Background:
For several years we have focused on atiracting businesses to the areas of the industrial park
expansion that were already in our corporate limits. Now that we have programmed
                                                                              all of that
property it is time to get the remaining 28 acres of the site Under our jurisdictional control. The Act 425
Agreement is the most common avenue for two municipal bodies to work out a deal for shared taxes
and jurisdictional authority without having to go through the expensive and offen contentious
annexation process.


The attached agreement sets the terms, which allows for Fruitport to collect 3.5 mills, and the City of
Muskegon to collect the balance of our 12.85 mills less the Fruitport share. It also dictates that we split
the burden of any tax abatement on the site, and allows the city to assess it's local income tax.

Goal/Focus Area/Action Item Addressed:


Key Focus Areas:


Progress toward completion of ongoing economic development projects

Goal/Action ltem:
2027 Goal 2: Economic Development Housing and Business


Amount Requested:                                      Budgeted Item:
NA                                                Yes            No           N/A |
Fund(s) or Accouni(s):                            Budget Amendment Needed:
General Fund                                      Yes            No            N/A   |

Recommended Motion:
Motion to Approve the Act 425 Agreement with Fruitport Township as presented and to authorize the
Mayor and Clerk to sign.


Approvals:                                        Guest(s) Invited / Presenting:
 Immediate Division
 Head                                              No
 Information
 Technology

 Other Division Heads

 Communication

 Legal Review
                                                Received & Sealed for Record
                                                William A. Moulatsiotis Register of Deeds
                                                Muskegon County Michigan
                                                07/22/2025 12:50 PM Liber: 4391 Page: 946


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Document Type: Conditional Land Transfer Agreement (PA 425 Agreement)



Prepared By and Return To:
City of Muskegon
Attn: Development Services Division
933 Terrace Street
Muskegon, MI 49440
(231) 724-6720
planning@shorelinecity.com



Document Title:
Public Act 425 Agreement — Conditional Land Transfer


Parties Involved:
- City of Muskegon, a Michigan municipal corporation
- Charter Township of Fruitport, a Michigan charter township



Property Legal Description:
See attached Exhibit A



Parcel Number(s):
61-15-102-200-0001-00



Purpose of Document:
To record a land transfer agreement in accordance with Public Act 425 of 1984, as amended, for
conditional transfer of property for economic development and municipal service coordination.
                                                                                                        LORS 20 (LB)




                          CONTRACT FOR CONDITIONAL TRANSFER OF JURISDICTION

                                               Fruitport Charter Township


                                                     City of Muskegon



                    THIS CONTRACT, dated March 11, 2025, between the FRUITPORT CHARTER

             TOWNSHIP, located at 5685 Airline Road, Fruitport, Michigan (“Fruitport’”) and the CITY OF

             MUSKEGON, 933 Terrace Street, Muskegon, Michigan (“Muskegon”) (collectively the

             “parties”), is entered into by the parties on the following terms:

                                                           Recitals:

                    A.        An economic development project, as defined in Act 425 of the Public Acts of

             1984 of the State of Michigan (“the Act”), being MCL Section 124.21 et. seq., has commenced

             on property in Muskegon and additional development is proposed on certain property located in

             Fruitport and Muskegon and containing the corporate boundary between the parties. The

             property to be transferred into the corporate boundaries of Muskegon is presently in Fruitport

             and owned by Muskegon (the “Transferred Area”).

                     B.       The parties have considered in formulating this Contract the following factors
             which they deem relevant to the economic development project and their decision to enter into

             this Contract:


                              (1)      Composition of the population; population density; land area and land

                     uses; assessed valuation; topography, natural boundaries, and drainage basins; and the

                     past and probable future growth, including population increase and business, commercial

                     and industrial development in the area to be transferred. Comparative data for the




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aIRATEVANAG bet
                   transferring local unit and the portion of the local unit remaining after transfer of the

                    property shall be considered.


                           (2)       The need for organized community services; the present cost and


                    adequacy of governmental services in the area to be transferred; the probable future needs

                    for services; the practicability of supplying such services in the area to be transferred; the

                    probable effect of the proposed transfer and of alternative courses of action on the cost


                    and adequacy of services in the area to be transferred and on the remaining portion of the

                    local unit from which the area will be transferred; the probable change in taxes and tax

                    rates in the area to be transferred in relation to the benefits expected to accrue from the

                    transfer; and the financial ability of the local unit responsible for services in the area to

                    provide and maintain those services.


                            (3)      The general effect upon the local units of the proposed action; and the


                    relationship of the proposed action to any established city, village, township, county, or

                    regional land use plan.


                    C.      The parties have determined that the economic development project qualifies

             under the Act as the type of project, which is eligible for the conditional transfer contemplated

             by this Contract.


                    THEREFORE, THE PARTIES AGREE:


                    1.      Transferred Area. The Transferred Area, which is the subject of this conditional

             transfer Contract, is described in Exhibit A.


                    2.      Transfer Of Jurisdiction. Fruitport hereby transfers and Muskegon consents to

             the transfer of governmental jurisdiction from Fruitport to Muskegon of the Transferred Area for




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Tce ar Il
              the term of this Contract. The Transferred Area shall, for all purposes, be within the jurisdiction

              of Muskegon.


                      3.     Services. The said transfer of jurisdiction shall include the transfer of all

              governmental powers. Muskegon shall provide all public services to the Transferred Area in

              connection with its exercise of jurisdiction, except any services provided by other local units of

              government per mutual aid or automatic aid agreements. Muskegon and Fruitport emphasize the

              following:


                              3.1      The Transferred Area is zoned M-1 Commercial-Industrial Park.

              Muskegon shall have jurisdiction over zoning of and shall have the authority to rezone the

              Transferred Area.


                              3.2      The Transferred Area shall receive services on the same basis and for the
                      same fees and to the same extent as Muskegon provides within its legal limits. The rates,

                      fees and charges, if any, for all such services shall be as established by Muskegon.

                              3.3      Muskegon will provide water and sanitary sewer services on the same

                      basis and for the same fees and to the same extent as other property located within

                      Muskegon.


                              3.4      The Transferred Area shall be within the legal limits and jurisdiction of

                      Muskegon for purposes of special assessments.

                              3.5      Any natural persons residing within the Transferred Area shall be

                       entitled to vote on the same basis as all other natural persons residing within Muskegon.

                       4.     Term. This Contract shall terminate at 11:59 p.m. on December 31, 2074.

               However, no later than January 1, 2074 Muskegon and Fruitport shall commence negotiating, in

               good faith, an extension of this Contract for an additional 50 years. Termination prior to the




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BU Aaah
      EA ETHAN. ARTA I
            conclusion of the term shall occur only for cause as set forth below. Upon expiration of the said

            term, including any extension, or termination of this Contract for cause pursuant to Paragraph

             9.1, jurisdiction over the transferred area shall revert to Fruitport.

                     5.      Approval of Contract. Each legislative body shall hold a public hearing

             pursuant to Section 4 of the Act. In the event either legislative body adopts a resolution calling

             for a referendum on the transfer, pursuant to Section 5 of the Act, the other party may


             immediately rescind its offer to enter into the Contract by written notice. In the event petitions

             are filed under Section 5 of the Act, for referendum, the parties shall each have the same right of

             rescission.


                             Upon execution of this Contract, Muskegon shall provide an original of this
             Contract to the County Clerk of Muskegon County and to the Michigan Secretary of State. This

             Contract shall become effective on the last date as of which all Parties as shown below have

             signed this Agreement (“Effective Date”).

                             Muskegon and Fruitport understand and agree that there may be the need to file

             additional documents to give full effect and to fully implement this Contract. If requested by one

             party, the other party shall cooperate in the preparation and execution of any requested

             documents.


                     6.      Sharing of Taxes and Revenues. In connection with the levying of taxes,

             regardless of the type of tax, the City shall pay to Fruitport a payment in lieu of taxes as follows:

                             6.1.      Real and Personal Property Tax. To the extent that any property within

                     the Transferred Area is tax exempt from ad valorem real or personal property taxes, as


                     opposed to having an abatement, Fruitport shall receive no monies for that property.




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BU VEERURAERMDANAS
                           For Tax Year 2025, Fruitport has levied its tax on the Transferred Area. Fruitport

                  shall collect and keep such amounts, regardless of when and how collected. Fruitport

                  shall timely provide assessment data for the Transferred Area to Muskegon.

                           For tax year 2026 and thereafter, Muskegon shall levy and collect ad valorem

                  taxes on the Transferred Area and shall issue tax bills for the Transferred Area to that

                  effect. Muskegon shall return to Fruitport an amount equal to 3.5 mills times the taxable

                  value of the Transferred Area. Payments shall be made on or about March 31, 2026 and

                  March 31 in all subsequent Tax Years.


                           If after the March 31 payment from Muskegon to Fruitport is made and

                  Muskegon is for any reason required to refund all or a portion of those taxes to the

                  property owner, the County of Muskegon, or others, Fruitport shall promptly repay to

                  Muskegon Fruitport’s pro rata share of any such tax refund and interest due on the tax

                  refund or Muskegon may deduct the amount from future payments by Muskegon to

                  Fruitport, in Muskegon’s sole discretion.


                           Muskegon shall be entitled to retain any other ad valorem real or personal

                  property, any industrial facilities taxes, payment in lieu of taxes, and any other taxes or

                  fees from and against the Transferred Area, above the 3.5 mills to be paid by Muskegon

                  to Fruitport.


                            6.2      Tax Abatements. Muskegon may, in its sole discretion, grant tax

                   abatements to any development in the Transferred Area. To the extent that Muskegon

                   grants one or more tax abatements, the tax abatement shall be shared by Muskegon and

                   Fruitport equally (i.e. the percentage reduction granted by Muskegon shall apply equally

                  to the tax receipts of both Muskegon and Fruitport and from the transferred area).




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   aha PESTER IAS AMA MLE                            I
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             \
                           6.3      Local Income Tax. Muskegon shall impose and collect a local income


                   tax on businesses located in the Transferred Area, natural persons working in the

                    Transferred Area, and residents of the Transferred Area. Muskegon shall retain all

                    revenue generated by the Muskegon income tax.

                           6.4       Revenue. All other revenues of whatever nature, State shared revenues


                    from taxation of any kind, special assessments, fees, charges, or other monies attributable

                    to the Transferred Area shall inure to the benefit of Muskegon.
                    7.      Muskegon Commitments. Muskegon shall cooperate with Fruitport to seek and

             secure available funding, from whatever source, to defray the cost associated with the

             improvement in the Transferred Area.

                    8.      Commitments and Representations by Fruitport.


                            8.1      Representations Concerning Transferred Property. Fruitport covenants


             and represents that it has not pledged any revenue from or anticipates any revenue from the

             Transferred Area to meet any Fruitport obligations or any obligations of any entity that it created

             or controls, other than as provided in this Contract. Fruitport represents and covenants that there

             are no special assessments that have been levied against the Transferred Area. Fruitport

             represents that no entity is collecting any tax increment revenues from the Transferred Area.

                            8.2      Fruitport agrees to provide to Muskegon copies of all its records as to
             property taxation, planning and zoning, and all other municipal matters which pertain to the

             Transferred Area.


                            8.3      Fruitport certifies to Muskegon that there are no Fruitport employees

             whose employment terms are or will be affected by this Contract, and no provision need be made

             for such employees.




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   PCR PA PAS nea MR |
                    9,      Termination for Cause; Annexation; Detachment.


                            9.1      Prior to the conclusion of the term of this Contract, termination may


           occur for failure of either party to perform as required by this Contract. In the event either party


           determines to invoke its right to terminate the Contract, it shall serve, by first class mail, a notice


           of intent to terminate, setting forth the reasons therefor. Upon receipt of the said notice, the other


           party shall have a period of one hundred eighty (180) days to cure any claimed violation of the

           Contract and thereby avoid termination. In the event of termination before the conclusion of the


           term of this Contract, the Transferred Area shall be returned to Fruitport and its jurisdiction.


                            9.2      Prior to the conclusion of the term of this Contract, including any


           extension, Muskegon and its employees acting in their official capacities shall not, without prior


           written consent of Fruitport following action by its Township. Board, initiate, maintain,


           encourage, sponsor or otherwise participate in any efforts to annex property from Fruitport’s

           jurisdiction. If a property owner initiates any such action, Muskegon and its employees acting in


           their official capacities shall maintain a neutral stance with regard to any such actions.

                            9.3      Prior to the conclusion of the term of this Contract, including any


           extension, neither Fruitport, nor any employees acting in their official capacities shall, without


           Muskegon’s prior written consent following action by its City Commission, initiate, maintain,


           encourage, sponsor or otherwise participate in any efforts to detach property from Muskegon’s


           jurisdiction. Ifa property owner initiates any such action, Fruitport and its officers and

           employees acting in their official capacities shall maintain a neutral stance with regard to any


           such actions.


                    10.    = Liability. Fruitport shall be responsible for any claims relating to municipal


           jurisdiction and operations in the Transferred Area occurring prior to the Effective Date of this




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BU AREA RAPT AGL
          Contract, regardless of when the claim is made. Muskegon shall assume all liabilities for

          municipal jurisdiction and operations in the Transferred Area occurring on or after the Effective

          Date of this Contract.


                 12.     Governing Law. This Contract shall be construed and enforced in accordance

          with the laws of the State of Michigan applicable to contracts made and to be performed within

          the State of Michigan.


                  13.    No Third Party Beneficiary. This Contract shall benefit only the parties to this

          Contract, and not any third party.


                  14.    Counterparts. This Contract may be executed in one or more counterparts.


          Notwithstanding such execution all such counterparts shall constitute one and the same Contract.

                                    (remainder of this page is intentionally left blank)




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BU Ap PAH EERAPTA LAGI
                              IN WITNESS WHEREOF, the parties have executed this Contract.


                    Signed in the presence of:
                                                                                           CITY OF MUSKEGON


                                                                                              eA
                                                                                           wy Aer
                         Jess'Ca Td Lorenson                                                Ken Johnson, {ts Mayor


                 a 4 La O hte                                                                Ann Marie Meisch, Its Clerk
            si ‘day  of fetch, 2025, before me, a Notary Publicin and for said County,
            nally appeared: Kén: Johnson, City of Muskegon Mayor and Ann Marie Meisch,
/ » City of Muskegon Clerk, known to me to be the persons whose names are subscribec
                                                                                           Dated: 3 ~ ( 8-90 95 ;
“) to the foregoing instrument and acknowledged that they executed the same
                                                                            in their
       authorrized capacities.-JN PaESS WHEREOEF, I hereunto set my
                                                                    hand and official
   .                                     Linda
                                             S. Potter, Notary Public, State of Michigan

       Courity ofMuskegon MyCommission Expires: September 25, 2030
  “Acting in theFe Couity, of} iskegon
                                                 fh

                                                      Zz
                       W Line            Wt)           sherr~

                     (Whirde, WEE

                      Wanda
                                     0
                                         Ctr s¥er                                            Andrea Anderson, Its GE
  on ehisUYeay of Ry 2025, before me, a Notary Public in and for said County, ingame [le L AAS
  personally appeared: Tadd Dunham, Fruitport Township Supervisor and Andrea
  Anderson, Fruitport Township Clerk, known to me to be the persons whose names
  are subscribed to the foregoing instrument and acknowledged that they executed


  hand and official antes eap a ic S. Miller, Notary’ Public,
  the same in their aut       ed   capacities,    NNWITNESS WHEREOF, | hereunto set my


  State of Michigan, County of Muskegon, My Commission Expires: April 17, 2028
  Acting in the County of Muskegon


                     4892-6466-0687 v4 [60864-232]




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 Bi waefr                                        SLM
                                                     EXHIBIT A


                                                TRANSFERRED AREA




PARCEL 3A:
#61—15-102-200—0001—00

PART OF THE NORTHWEST 1/4 OF THE NORTHEAST 1/4 OF SECTION 2, TOWN 9 NORTH, RANGE 16 WEST,
CITY OF MUSKEGON ([SIC}] TOWNSHIP OF FRUITPORT), MUSKEGON COUNTY, MICHIGAN, DESCRIBED AS:
BEGINNING AT THE NORTHEAST CORNER OF THE NORTHWEST 1/4 OF THE NORTHEAST 1/4 OF SECTION 2;
THENCE SOUTH 02°39° WEST 1133.35 FEET ALONG THE EAST 1/8TH LINE OF SAID SECTION 2; THENCE
NORTH 70°46" WEST 1378.4 FEET ALONG THE NORTHERLY LINE OF LAND THAT WAS CONVEYED TO
CONSOLIDATED RAIL CORPORATION; THENCE NORTH 02°01’ EAST 674.89 FEET ALONG THE NORTH AND
SOUTH 1/4 LINE OF SAID SECTION 2; THENCE NORTH 89°53’ FAST ALONG THE NORTH LINE OF SAID
NORTHWEST 1/4 OF THE NORTHEAST 1/4 TO THE PLACE OF BEGINNING,




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