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1025-50 CF)
CITY OF
ewm MUSKEGON
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: June 24, 2025 Title: Workforce Housing Restrictive Covenant,
300, 310, and 370 Allen Duplex ADU Project
Submitted by: Jake Eckholm, Development Department: Economic Development
Services Director
Brief Summary:
OrangeFin Properties, owned by Kara Novak and her husband, are requesting a housing tax
exemption for the new construction infill of duplexes and ADU's on 3 lots in the Angell neighborhood.
Detailed Summary & Background:
Mr. and Mrs. Novak have been working with Development Services Staff and leadership in order to
facilitate new construction rental and for sale housing in the city of Muskegon. These proposed lots
will be utilized for three 2 story duplexes with an accessory dwelling unit behind each for a total of 9
housing units. The Novaks are proposing that all units be subject to the proposed PILOT, which will
reserve them for only households under 120% of the Area Median Income (AMI) for Muskegon
County. The duplex units are 3 bedroom, 2 bathroom and the ADU's are 1 bedroom, | bathroom. The
units at 370 Allen are potentially to be used for a partnership with Goodwill Industries to provide
housing to returning citizens that have completed their independent living course and have full time
employment.
This restrictive covenant establishes the terms by which the city has agreed to authorize a PILOT as
opposed to ad valorem property taxes for these parcels. It is to be attached to an affidavit the
developer must submit to MSHDA to prove they have local approval for the project and to their
commitment to reserving these units for households within the MSHDA income thresholds.
Goal/Focus Area/Action Item Addressed:
Key Focus Areas:
Diverse housing types
Retain youth within the city
Progress toward completion of ongoing economic development projects
Goal/Action Item:
2027 Goal 2: Economic Development Housing and Business
Amount Requested: Budgeted Item:
NA Yes No N/A
Fund(s) or Account(s): Budget Amendment Needed:
WORKFORCE HOUSING RESTRICTIVE COVENANT
2025-50(F)
This Workforce Housing Restrictive Covenant (“Restrictive Covenant”) is made by and between
the City of Muskegon, Michigan (“Municipality”) and OrangeFin Properties LLC, a Michigan limited
liability company, presently of Holland MI 49424 (the “Sponsor”) as of June 24th, 2025.
RECITALS:
A. Sponsor is the owner of certain real property located in the City of Muskegon, County
of Muskegon, State of Michigan, and more particularly described on the attached Exhibit A (the
“Property”), which is attached hereto and incorporated by reference into this Agreement.
B. Sponsor has offered to provide nine “Workforce housing” units as defined by MCL
125.1415a(10)(d) on the Property (the “Project”) and has applied to Municipality for a workforce housing
exemption from ad valorem property taxes under Section 15a of the State Housing Development Authority
Act, being Public Act 346 of 1966, as amended (the “Act”).
C. In consideration of Sponsor’s offer to undertake the Project, Municipality has agreed to
exempt the Property from all ad valorem property taxes imposed by any taxing jurisdiction and to accept
in lieu thereof payment of an annual service charge for a period of 15-years as provided by Chapter 82 of
the City Code of Ordinances, as amended (the “Ordinance”).
D. Upon completion of the Project, the annual service charge paid in lieu of all ad valorem
property taxes shall be equal to ten percent (10%) of the annual shelter rents collected from the Project and
shall be paid as provided in the Ordinance.
E. Sponsor and Municipality agree that the economic feasibility of the Project depends upon
the continuing effect of the annual service charge in lieu of all ad valorem taxes approved by Municipality
for the 15-year exemption period.
F, Accordingly, upon recording with the Muskegon County Register of Deeds, this Restrictive
Covenant will restrict use of the Property to Workforce housing for the 15-year exemption period.
NOW, THEREFORE, in consideration of Municipality’s acceptance of payment of the annual
service charge in lieu of all ad valorem property taxes and Sponsor’s commitment to construct or rehabilitate
the Project, Sponsor and Municipality hereby covenant as follows:
1. Recitals. The above recitals are acknowledged as true and correct and are incorporated by
reference into this paragraph.
2. Definitions. All words and phrases used in this Restrictive Covenant have the same
meaning as defined in the Act or the Ordinance.
3. Workforce Housing Covenant. The Project will, upon completion of the proposed
construction or rehabilitation, constitute workforce housing for households for persons and families whose
household income is not greater than 120% of the area median income, as published by the Michigan State
Housing Development Authority (“the Authority) for Muskegon County, adjusted for family size. All of
the housing units in the Project will be rented, or available for rental, on a continuous basis to members of
the general public throughout the term of this Restrictive Covenant.
4. Term of Exemption. The exemption from ad valorem property taxes approved by
Municipality shall remain in effect in accordance with this Restrictive Covenant restricting use of the Project
to workforce housing for a period of 15-years, ending on December 31, 2040, or so long as the Project is
used as workforce housing, whichever is less.
5. No Violation. Sponsor agrees that it will not knowingly take or permit any action that
would result in a violation of the requirements of this Restrictive Covenant or the Ordinance, which is
incorporated herein as if a part of this Restrictive Covenant. Further, Sponsor agrees to take any required
action, including the amendment of this Restrictive Covenant, as may be necessary, in the determination of
the Municipality or of the Authority, to comply with the Ordinance. If Municipality determines that the
Project is not in compliance with the requirements of this Restrictive Covenant, and Sponsor, after receiving
written notice of the non-compliance from Municipality, does not correct such non-compliance within thirty
(30) days, Municipality shall be entitled to take such actions as it deems necessary to enforce the provisions
of this Restrictive Covenant.
6. Sponsor to Demonstrate Compliance. Sponsor will provide Municipality with such
certifications, reports and other information as are required by Municipality to demonstrate compliance
with the Ordinance. Sponsor will provide Municipality and Authority with an annual verification of
compliance with this Restrictive Covenant, in a form specified by the Authority.
7. Transfer of Ownership. Sponsor will, prior to a sale or other voluntary transfer of
ownership of the Project or any part thereof, notify Municipality in writing, and will enter into any
agreements with the purchaser or transferee as may be prescribed by Municipality to ensure such purchaser's
or transferee's compliance with this Restrictive Covenant and Michigan law.
8. Enforceability. This Restrictive Covenant is enforceable in any court in the State of
Michigan having jurisdiction thereof, by Municipality, and to the extent required by the Ordinance, by any
individuals who are tenants of the Project.
9. Covenant Running with the Land; Binding Effect. The foregoing covenant shall
constitute and be enforced as a covenant running with the land under Michigan law and shall be binding on
all successors or assigns of Sponsor or Municipality and any future owner or operator of the Project for the
full 15-year exemption period.
10. Miscellaneous. In the event of any conflict between the terms of this Restrictive Covenant
and the requirements of the Ordinance the requirements of the Ordinance shall prevail. This Restrictive
Covenant may only be amended or terminated by a writing signed by both Sponsor and Municipality. The
invalidity of any clause or provision of this Restrictive Covenant shall not affect the validity of the
remaining portions thereof.
IN WITNESS WHEREOEF, is this Covenant is effective as of December Ist, 2025.
[Signature Pages Follow]
CITY OF MUSKEGON
By:
Its: Kenneth Johnson, Jayor
STATE OF MICHIGAN )
) ss
COUNTY OF MUSKEGON _ )
The foregoing instrument was acknowledged before me this day of June 24", 2025 by Kenneth
Johnson, as Mayor of the City of Muskegon, a municipal corporation of the State of Michigan.
Linda S$. forrer
Notary Public, 'SKEGO County, MI
My Commission Expires! 7-25-22 039
Acting in W/E. sKeg o7___ County, MI
SPONSOR
OrangeFin Properties, LLC
nasa {{pal Yara Novae
Its: Mama
STATEOF MICHIGAN _ )
) ss
COUNTY OF MUSKEGON _ )
TM foregoiiN instrument was acknowledged before me this yh day of luly LOZS, by
Kava O\a \~ , as the manager/authorized member of OrangeFin Properties, a Michigan limit
liability company, on behalf of said Company. LU <—
i
LINDSEY YOUNGLOVE
NOTARY PUBLIC-STATE OF MICHIGAN otary Public, K@N\Y County, MI
COUNTY OF KENT My Commission Expires: _|
Ottawa
My Commission Expires October 25, 2028
Acting iin the County of Acting
or
in Otta Wa ounty, MI
DRAFTED BY:
WHEN RECORDED RETURN TO:
EXHIBIT A
Legal Description of Property
Legal Description: CITY OF MUSKEGON REVISED PLAT OF 1903 EAST 33 FEET LOT
10 WEST 16.5 FEET LOT 11 BLOCK 210
Address: 300 ALLEN AVE, MUSKEGON, MI 49442
Parcel #: 61-24-205-210-0010-10
| Legal Description: CITY OF MUSKEGON REVISED PLAT OF 1903 EAST 49.5 FEET
LOT 11 BLOCK 210
Address: 310 ALLEN AVE, MUSKEGON, MI 49442
Parcel #: 61-24-205-210-0011-01
Legal Description: CITY OF MUSKEGON
REVISED PLAT 1903 LOT 10 BLK 211
Address: 370 ALLEN AVE, MUSKEGON, MI 49442
Parcel #: 61-24-205- 211-0010-00
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