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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
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 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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                   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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              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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            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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                           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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                           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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                    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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          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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                              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
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                       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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