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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 Willi iam A.of Moul atsiotis Libe r: 4391 Page: 946 Deeds PAGE: 1 of 11) 0 PNM Reg Sten Count y Mich igan 07/22/2025 12:5 ee Tc Tl Tee 585 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 William A. f Moula tsiotis Liber: 4391 Page: 946 J 2 of 11 Muskegon County gichigan 07/22/2025 12:50 PM t Deeds 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 Jilliam Q. Moulatsiotis Liber: 4391 Page: 946 2 tegister of Deeds PAGE: 3 of 11 luskegon County Michigan 07/22/2025 12:50 PM 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 William A. Moulatsiotis Liber: 4381 Page: 946 3 Register of Deeds PA GE hus kegon geunty Michigan 07722) 2025 12:50 PM 11 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. William A. Moulatsiotis Liber: 23 391 Page: 946 4 Muskegon count gtichigan BSF 5272025 12:50 PM Register of Deeds 11 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). William A. Moulatsiotis Liber: 4391 Page: 946 5 Register of Deeds AGE: 6 of 11 Muskegon gounty Michigan 07/22/2025 12:50 PN aha PESTER IAS AMA MLE I oss 585 74 t \ 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. William A. Moulatsiotis Libe 4391 P Register of Deeds PAGE: To 11ge: 946 1 nyskegon county Michigan 09/22/2025 12:50 PM 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 William A. Moulatsiotis Liber: 4391 Page: 946 7 Muskegon county Michigan 3972272025 12:56 PM Register of Deeds PAGE: 11 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) William A. Moulatsiotis Liber: got Page: 946 2 Muskegon County Michigan 09772272025 12:50 PM Register of Deeds PAGE: 3 of 11 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] William A. Moulatsiotis so theory e: 946 9 nuskegen Coeae gichigan 07/22/2025 12:50 PM t of Deeds 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, William A. Moulatsiotis Liber: 4391 Page: 946 Register of Deeds PAGE: 11 of 1 Muskegon county . Michigan @7/22/2025 12:5@ PNM BU PESACH EPMA PRL
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