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hO0AS-SO (I)
CITY OF
=~”@ MUSKEGON
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: June 24, 2025 Title: Workforce Housing Restrictive Covenant,
280 Allen and 305 Amity Duplex/ADU Project
Submitted by: Jake Eckholm, Development Department: Economic Development
Services Director
Brief Summary:
Joe and Jennifer Helm, represented by builder Derek Sjaarda, is requesting a housing tax exemption
for the new construction infill of duplexes and ADU's on 2 lots in the Angell neighborhood.
Detailed Summary & Background:
Mr. Sjaarda has been working with Development Services Staff and leadership in order to facilitate
new construction rental and housing in the city of Muskegon. These proposed lots will be utilized for
two 2 story duplexes with an accessory dwelling unit behind each for a total of 6 housing units. Mr.
Sjaarda is 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
Goal/Action Item:
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:
NA Yes No N/A | |
WORKFORCE HOUSING RESTRICTIVE COVENANT
- 2025-50(1)
This Workforce Housing Restrictive Covenant (“Restrictive Covenant”) is made by and between
the City of Muskegon, Michigan (“Municipality”) and Helms Group, 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 Six. “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”).
G. 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.
rie DH
\nitial * !
— TORRECTED
WORKFORCE HOUSING RESTRICTIVE COVENANT
— 2025-50(1)
This Workforce Housing Restrictive Covenant (“Restrictive Covenant”) is made by and between
liability
the City of Muskegon, Michigan (“Municipality”): and Helms Group, LLC, a Michigan limited
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
nt.
“Property”), which is attached hereto and incorporated by reference into this Agreeme
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
82 of
in lieu thereof payment of an annual service charge for a period of 15-years as provided by Chapter
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.
ORIGIN AH
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 propose d
for
construction or rehabilitation, constitute workforce housing for householdspublishpersons and families whose
household income is not greater than 120% of the area median income, as ed by the Michigan State
Housing Development Authority (“the Authority) for Muskegon County,a continu adjusted for family size. All of
the housing units in the Project will be rented, or available for rental, on ous 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 approve d by
of the Project
Municipality shall remain in effect in accordance with this Restrictive Covenant restricting use the Project is
to workforce housing for a period of 15-years, ending on December 31, 2040, or so long as
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 oragrees the Ordinan ce, which is
incorporated herein as if a part of this Restrictive Covenant. Further, Sponsor to take any required
action, including the amendment of this Restrictive Covenant, as may be necessar y, in the determination of
the Municipality or of the Authority, to comply with the Ordinan ce. If Municip ality determines that the
and Sponsor
Project is not in compliance with the requirements of this Restrictive Covenant,non-compliance , after receiving
written notice of the non-compliance from Municipality, does not correct such ry to enforce thewithin thirty
(30) days, Municipality shall be entitled to take such actions as it deems necessa 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 Municiptyality to demonstrate compliance
with the Ordinance. Sponsor will provide Municipality and Authori 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 voluntaenter ry transfer of
and will into any
ownership of the Project or any part thereof, notify Municipality in writing, ensure such purchas
agreements with the purchaser or transferee as may be prescribed by Municipality to er'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 require d by the Ordinan ce, by any
individuals who are tenants of the Project.
9. Covenant Running with the Land; Binding Effect. The foregoing covenan t shall
constitute and be enforced as a covenant running with the land under Michiga n 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. nt
Miscellaneous. In the event of any conflict between the terms of this Restrictive Covenaive
shall prevail. This Restrict
and the requirements of the Ordinance the requirements of the OrdinanceSponsor
Covenant may only be amended or terminated by a writing signed by both not affect and Municipality. The
invalidity of any clause or provision of this Restrictive Covenant shall the validity of the
remaining portions thereof.
IN WITNESS WHEREOE, is this Covenant is effective as of December Ist, 2025.
[Signature Pages Follow]
CITY OF MUSKEGON
By: Nar a /
its: Kenneth Johnson, Mayor
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.
Cerada. bbe.
S. /otter
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Ste
Notary Public, 7___County, MI
My Commis sion Expires ! 7-25- 2030
Acting in 77Zy. Ke gan County, MI
SPONSOR
Helms Group, LLC
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Its be Helms
STATE OF MICHIGAN _ )
ss
COUNTY OF MUSKEGON _ )
The peein,piven was acknowledged before me this 4 day of , by
as the manager/authorized member of Helms Group, a Michigan limited
liability company, onbehalf of said Company.
2
EMILY MARTINEZ
NOTARY PUBLIC- STATE OF MICHIGAN
Notary Public, gteeie tony
121 |
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wo
COUNTY OF OTTAWA My Commission Expires:
My Commission Expires December 30, 2030 @4flarsee— County, MI
Acting in the County of ONAAKA,_
Actingin_
DRAFTED BY:
WHEN RECORDED RETURN TO:
EXHIBIT A
Legal Description of Property
Legal Description: CITY OF MUSKEGON REVISED PLAT OF 1903 WEST 49.5 FEET
LOT 9 BLOCK 210
Address: 280 ALLEN AVE, MUSKEGON, MI 49442
Parcel #: 61-24-205-210-0009-01
Legal Description: CITY OF MUSKEGON REVISED PLAT 1903 LOT 3 BLK 210
Address: 305 AMITY AVE, MUSKEGON, MI 49442
Parcel #: 61- 24-205-210-0003-00
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