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GITY OF
EN& MUSKEGON
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: March 11, 2025 Title: Nelson House Purchase and
Redevelopment Agreement Conditions of Sale
Submitted by: Jamie Pesch, Planner Department: Planning
Brief Summary:
Following direction from the City Commission at the January worksession, staff has revised the
conditions for the purchase and redevelopment of the Nelson House and is proposing to begin the
process of listing the house with a realtor.
Detailed Summary & Background:
Initial approval of the Purchase and Redevelopment Request for Bids was granted by the City
Commission aft their September gth 2024 meeting. No bids were received for the Nelson House at the
close of the bid period in November 2024, and following further direction from the Commission, staff is
proposing a number of changes to the conditions to broaden interest in the house. These changes
include:
e Retaining the requirement for owner-occupancy in perpetuity but removing the restriction to
single family occupancy to allow for a total unit count that complies with local zoning
regulations (up to four units).
e Setting a reserve price of based on the average of a series of Comparative
Market Analysis for the house in its present condition.
¢ Waiving the City's water and sewer connection fees for the future buyer.
e Extending the project completion timeline from 12 months to 24 months.
e Extending the start date for exterior work from 90 days to 120 days after closing, and for interior
work from 150 days to 180 days after closing.
Staff is also proposing to formally list the Nelson House with a realtor. To date, the house has only
been made available for purchase directly from the City of Muskegon via last year’s bid proposal
process, and listing through a realtor is anticipated to increase the pool of potential buyers.
Lastly, staff will be gathering estimates for roof replacement, publishing a request for bids for the
same, and returning at a later date to seek approval of a selected contractor to complete the work.
This work will also involve addressing any identified structural deficiencies within the existing roof
framing.
Goal/Focus Area/Action Item Addressed:
Key Focus Areas:
Diverse housing types
Goal/Action ltem:
2027 Goal 2: Economic Development Housing and Business
Amount Requested: Budgeted Item:
Yes No N/A a
Fund(s) or Account(s): Budget Amendment Needed:
Yes No N/A ||
Recommended Motion:
| move to approve the changes to the Nelson House Purchase and Redevelopment Conditions of
Sale and authorize staff to begin the process of listing the house with a realtor.
Approvals: Guesi(s) Invited / Presenting:
Immediate Division
Head No
Information
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Other Division Heads
Communication
Legal Review
CITY OF MUSKEGON
Nelson House Purchase and Redevelopment Conditions of Sale
Introduction:
The City of Muskegon is seeking a qualified buyer for the purchase and redevelopment of the
structure located at 382 West Muskegon Avenue, Muskegon, MI 49440, commonly known as
the Nelson House. This project involves acquisition and complete renovation of the structure
for the purpose of utilization as an owner-occupied home. The goal of this project is to preserve
the historically significant structure, enhance the area’s aesthetic appeal, and to increase
owner-occupied housing stock in the community.
Project Description:
The City of Muskegon Development Services Division is seeking a qualified buyer that can
demonstrate financial capability to complete the remodeling and occupancy of the Subject
Property. This Division is responsible for managing the city’s Community Neighborhood
Services, Planning Department, and Economic Development initiatives. These departments
oversee zoning, site plans, and business development services, ensuring compliance with city
regulations and fostering community growth.
Buyer Requirements:
1. Proof of Financing and Purchase Price Offer:
o Prospective Buyers shall include the price offered for the Subject Property,
method of payment (cash/loan) and proof of financing or capability to achieve
financing.
2. Exterior Renovation Plan:
o The City has not completed a formal inspection of the Subject Property’s
exterior. Stabilization of the exterior to prevent further deterioration should be a
priority.
Buyer shall be responsible for any necessary removals (siding, etc.)
Specific timeline for commencement for exterior renovations will be dictated in a
Purchase and Development agreement approved by the City Commission, but
shall commence no later than 120 days after closing.
3. Interior Renovation Plan:
o Prospective Buyers shall submit a proposed timeline and detailed scope of
renovation from a licensed contractor with their purchase offer.
o Specific timeline for commencement of interior renovations will be dictated in a
Purchase and Development agreement approved by the City Commission, but
shall commence no later than 180 days after closing.
o City of Muskegon water and sewer connection fees will be waived.
Subject Property Information
382 W. Muskegon Avenue Muskegon, MI
General Information:
The Subject Property is a historic single family home that was relocated in July 2024 to the
parcel at 382 W. Muskegon Avenue in Downtown Muskegon, Michigan. The home sits in the
City of Muskegon’s Houston Historic District, and all exterior changes to the Subject Property
require the review and approval of the Historic District Commission. The Subject Property
features a new concrete block foundation and contains an unfinished, insulated basement with
an egress window. Asbestos abatement and removal has been completed within the structure,
a report of which is available to prospective Buyers or their representatives for review at City
Hall.
Owner a City of Muskegon
Owner Address 933 Terrace Street, Muskegon, MI 49443
Property Address 382 W. Muskegon Avenue, Muskegon, MI 49440
Property Number 61-24-205-336-0008-00
Parcel Size ~81’ x ~133’ (10,700 square feet approx.)
House Size 7,000 gross square feet (approx.)
Year Built 1869 approx.
Occupancy Not occupied
Proposal Submission Requirements:
Purchase offers must clearly state the name, address, phone number, and email address of the
prospective Buyer. By submitting a purchase offer, prospective Buyers acknowledge that any
agreement for sale of the Subject Property shall require:
e Reserve Price: The City of Muskegon has set a reserve price of [eae as] for the
Subject Property. This was determined through averaging a series of Comparative
Market Analysis for the Subject Property in its present condition. These analysis are
available to Prospective Buyers or their representatives for review at City Hall.
e Commitment to Owner-Occupy: The City Commission and the community at large have
prioritized increasing the number of owner-occupiers in the City of Muskegon. The
successful Buyer will commit in their purchase offer and in the Purchase and
Development Agreement to establish the Subject Property as their primary residence
upon project completion. The City intends to file a deed restriction requiring owner-
occupancy at the Subject Property in perpetuity to the extent permissible by law. This
requirement does not preclude the successful Buyer from establishing additional
housing units at the Subject Property provided any additional units meet all applicable
local zoning regulations including, but not limited, to maximum unit counts and
minimum unit sizes.
e Work Timeline: The successful Buyer will accept and comply with the development
milestone requirements as reflected in the Purchase and Development Agreement.
Namely, exterior stabilization to be commenced within 120 days of closing and interior
renovations commenced within 180 days of closing. Project completion and occupancy
should not exceed a total project timeline of 24 months.
e Reverter Clause: The successful Buyer will accept and acknowledge that the City of
Muskegon will include a “reverter clause” in the Purchase and Development Agreement
which will allow for “claw back” of the Subject Property in the event the Buyer is not
making adequate progress or is otherwise in breach of the Agreement.
e Project Budget: Prospective Buyers will provide a total cost estimate for all anticipated
renovations along with evidence of financial capability to perform said improvements.
e Contractor Information: Prospective Buyers will provide license information, at least
one sample project, and references for the general contractor that will complete the
project on the Buyer’s behalf.
e Compliance with City Goals: Attention is called to the fact that the City requires that the
contractor employ local trades and laborers insofar as possible; the goals established
are 14% minority and 7% female participation in each trade. The contractor must ensure
employees and applicants for employment are not discriminated against based on race,
creed, color, religion, sex, national origin, handicapped condition, or veteran status, and
that all pertinent regulations are complied with. The City of Muskegon reserves the right
to reject any or all purchase offers or to waive any informalities or irregularities in the
offers.
Purchase Offer Deadline:
Purchase offers are due by 5:00 p.m. local time within 90 days following tthe Subject
Property’s official listing for sale by the City of Muskegon’s selec . All
purchase offers and supporting docuraertehmust be submitted to tl
Questions:
Please direct all questions to:
Important Considerations:
e Site Visits: Prospective Buyers and their contractor are REQUIRED to visit the Subject
Property before submitting their palettes
ous to
an understand the scope ot ae
project. Prospective Buyers must contact tl kegol »d real estate
agent to coordinate site access. Thereis no limit:to> the number ofvisits‘but there will be
no exploratory demolition permitted.
e Permits and Licenses: The successful Buyer will be responsible for obtaining all
necessary permits and licenses to complete the renovations.
e Safety and Environmental Compliance: Prospective Buyers must adhere to all safety
and environmental regulations throughout any site visits.
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