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m7 MUSKEGON
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: September 23, 2025 Title: Brownfield Plan Development and
Reimbursement Agreement - Muskegon-Central
Park, LLC
Submitted by: Jocelyn Hines, Development Department: Economic Development
Analyst
Brief Summary:
City staff is seeking approval of the Development and Reimbursement Agreement (D&RA) for
Muskegon-Central Park, LLC brownfield plan amendment.
Detailed Summary & Background:
City staff is requesting approval of the Development and Reimbursement Agreement (D&RA) for the
Muskegon-Central Park, LLC redevelopment project. The City Commission previously approved the
Brownfield Plan Amendment for this project on February 25, 2025.
The developer, Muskegon-Central Park, LLC, has submitted a D&RA for the redevelopment of the
former General Hospital site, a 13.89-acre property proposed for multi-family residential use. The
project consists of the construction of six new three-story buildings, which will provide a total of 144
housing units. Of these, 30 units will be income-qualified with rent rates targeted to households at 69
to 78 percent of Muskegon County's Area Median Income (AMI). Each building will contain 24 one-
and two-bedroom units, ranging in size from 663 to 1,307 square feet.
Under the terms of the agreement, the Brownfield Redevelopment Authority will reimburse the
developer for eligible activities and costs through tax increment revenues for a period of up to 23
years.
The project qualifies for housing development activities as 30 of the residential units will be
designated for households with incomes below 120 percent of the Area Median Income.
Goal/Action Item:
2027 Goal 2: Economic Development Housing and Business - Diverse housing types
Is this a repeat item?:
Explain what change has been made to justify bringing it back to Commission:
Amount Requested: Budgeted ltem:
N/A Yes No N/A |
Fund(s) or Accouni(s): Budget Amendment Needed:
BROWNFIELD PLAN DEVELOPMENT AND REIMBURSEMENT AGREEMENT
THIS BROWNFIELD PLAN DEVELOPMENT AND REIMBURSEMENT AGREEMENT
(the “Apreement"), is entered into on September 9, 2025, between the CITY OF
MUSKEGON BROWNFIELD REDEVELOPMENT AUTHORITY, a Michigan public
body corporate established pursuant to Act 381 of the Public Acts of 1996, as amended, MCL
125.265! et seq. ("Act 381"), whose address is 933 Terrace Street, Muskegon, Michigan 49440
(the "Authority"), and MUSKEGON-CENTRAL PARK, LLC a Michigan limited liability
company, whose address is 1575 Watertower Place, East Lansing, Michigan 48823 (the
"Developer"),
RECITALS
A. The Authority was created by the City of Muskegon (the "City") pursuant to the
Brownfield Redevelopment Financing Act, Act 381 of the Public Acts of Michigan of
1996, as amended ("Act 381"). Pursuant to Act 381, the Authority has prepared a
Brownfield Plan, which was duly approved by the City of Muskegon Board of
Commissioners (the "Brownfield Plan").
B. The Developer owns or has an agreement to purchase approximately 13.89 acres of propeliy
in the City of Muskegon at street addresses 1700 Oak Avenue, Muskegon, Muskegon
County, Michigan (the "Property"), which is legally described in the attached Brownfield
Plan for Muskegon-Central Park, LLC (the "Plan") attached as Exhibit A, and which is a
"housing property" as defined in Act 381.
Cc. The Plan was recommended for approval by the MBRA on February 11, 2025, and
approved by the City of Muskegon Board of Commissioners on February 25, 2025,
D. The Developer proposes to construct six new, 3-story multifamily buildings consisting of
144 total housing units, including 30 income qualified units at rent rates targeting
households at 69-78% of Muskegon County's AMI. Each building will include 24 units
comprised of one to two bedrooms ranging from 663 to 1,307 square feet of finished living
space and one to three bathrooms based on the unit square footage. The Project will have
the effect of assisting in the redevelopment of the Property, increasing housing inventory,
increasing the tax base, creating jobs, otherwise enhancing the economic vitality and quality
of life in the County.
E. Subject to the Michigan State Housing Development Authority ("MSHDA") approval of
the Act 381 Work Plan for the Project (the "Work Plan"), with respect to the state education
tax and taxes levied for school operating purposes (the "Educational Taxes"), Act 381
permits the Authority to capture and use the property tax revenues generated from the
incremental increase in property value of a redeveloped brownfield site constituting an
"eligible propeliy" under Act 381 to pay or to reimburse the payment of costs of conducting
activities that meet the requirements under Act 381 of "eligible activities" (hereinafter the
"Eligible Costs"),
F. By undertaking the Project, the Developer incurred and will incur Eligible Costs, which
include costs associated with building demolition, lead and asbestos abatement, site
preparation, infrastructure improvements to support housing activities, development of a
housing financing gap, brownfield plan and work plan preparation and development, and
brownfield plan and work plan implementation, all as defined in the Brownfield Plan.
The Developer is eligible for housing development activities under the Act based on
Developer's commitment to reserve a portion of the Project's rental units as income
restricted units for income qualified households (i.e. household incomes at or below 120%
AMI (the "Annual Unit Income Restriction"). The Annual Unit Income Restriction for the
Project includes a total of 30 units, for tenant households earning approximately 69-78%
AMI for the Term of this Agreement.
H. The Authority has incurred and will incur certain eligible administrative expenses
associated with the Brownfield Plan (the “Administrative Costs"), for which it seeks
reimbursement from Local Tax Increment Revenue ("Local TIR"), including brownfield
plan and work plan implementation,
Act 502 of the Public Acts of Michigan of 2012 amends Act 381 to provide that during the
period up to the first 23 years that the Developer is reimbursed for Eligible Costs, the
amount of Tax Increment Revenues (as defined below) captured annually shall be reduced
by 50% of the state education tax levy (the "SET SBRF Tax Increment Revenues") which
is required to be paid to the Michigan Department of Treasury ("Treasury") for deposit in
the state brownfield redevelopment fund (the "SBRF").
Following reimbursement of all amounts due the Developer and all amounts payable to the
Authority as Administrative Costs from applicable Tax Increment Revenues (as defined
below) and payment to Treasury of the SET SBRF Tax Increment Revenues for deposit in
the SBRE, additional tax increment revenues will be deposited into the local brownfield
revolving fund for five full years, which is in accordance with Section 13(5) of Act 381,
which limits such deposits to be made for no more than five years after the time that capture
is required to pay the Eligible Costs.
K. In accordance with Act 381 and subject to the terms of this Agreement, the paiiies desire to
use the propeliy tax revenues that are generated from an increase in the taxable value of the
real and personal property resulting from the redevelopment of the Propeliy to which the
Authority is entitled to receive (the "Tax Increment Revenues") to reimburse the Developer
for the Eligible Costs, to pay the Authority for Administrative Costs, to pay Treasury for
deposits to the SBRF, and to fund a local brownfield revolving fund pursuant to Act 381.
The patties are entering into this Agreement to establish the procedure for such
reimbursement and funding.
Terms and Conditions
Therefore, in exchange for the consideration in, and referred to, by this Agreement, the parties
agree as follows:
L. Capture of Taxes: During the Term of this Agreement, the Authority shall capture all
available Tax Increment Revenues from the Property and use those Tax Increment Revenues as
provided in this Agreement.
2. Submission of Costs: For those Eligible Costs for which the Developer seeks
reimbursement from the Authority, the Developer shall submit to the Authority:
(a) a written statement detailing the costs;
(b) a written explanation as to why they are Eligible Costs;
(c) copies of invoices from contractors, engineers or others who provided such service,
or, for the Developer's personnel for whose services reimbursement is being sought,
detailed time records showing the work performed by such individuals; and
(d) copy of occupancy permit
(e) copies of local required building permits, inspection repOlis, and any other
information which may be required by the Authority or its auditors.
3, Payments:
a. The Tax Increment Revenues received by the Authority shall be paid to the Developer
to reimburse it for Eligible Costs. Local TIR generated from the Property shall first be
retained by the Authority in an amount equal to 10% of the annual Tax Increment
Revenues up to the maximum amount allowed annually for Administrative Costs under
Act 381 for all Authority projects and the SET SBRF Tax Increment Revenues realized
from the Property during the period up to the first 23 years that the Developer is
reimbursed for Eligible Costs shall be paid to Treasury for deposit in the SBRF. After
retention of such Local Tax Increment Revenues and payment to Treasury of the SET
SBRE Tax Increment Revenues, Tax Increment Revenues shall be used to reimburse
the Developer for Eligible Costs, provided, however, if Developer has not paid any
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applicable professional fees and costs (legal, environmental, etc.) incurred by the
Authority related to Developer's request to use Project Tax Increment Revenues to
reimburse it for Eligible Costs within 30 days of being invoiced for such costs, the
Authority is authorized to pay such costs from Project Tax Increment Revenues before
such Project Tax Increment Revenues are used to reimburse Developer. The amount of
Project Tax Increment Revenues used to pay such costs shall be subtracted from
Developer total Eligible Costs and Developer shall not be entitled to reimbursement of
such amount, The Authority shall have no obligation to reimburse the Developer for
Eligible Costs from Tax Increment Revenues captured and received by the Authority
after the 23-year Developer reimbursement period. The amount of taxes levied as
Educational Taxes that will be used to reimburse the Eligible Costs of implementing
eligible activities at the Propeliy will be limited to the Eligible Costs of eligible
activities approved by MSHDA. Tax Increment Revenues shall be distributed according
to the Cost Table included as Exhibit B.
Unless the Authority disputes whether such costs are Eligible Costs or the accuracy of
such costs, the Authority shall, after review by an Authority Board member or the City
Economic Development Coordinator and approval by the Authority Board, pay to the
Developer the amounts for which submissions have been made pursuant to Section 2 of
this Agreement within 30 days after the Authority Board has approved such payment
provided Tax Increment Revenues have been received from which the submission may
be wholly or partially paid and provided, further, an occupancy permit shall have been
issued for those portions of the Project for which there are Eligible Costs. Ifa partial
payment is made by the Authority because of insufficient Tax Increment Revenues, the
Authority shall make additional payments toward the remaining amount within 30 days
of its receipt of additional Tax Increment Revenues until all of the amounts, for which
submissions have been made, have been fully paid to the Developer or to May 1, 2049,
whichever accurs first.
Adiustments: If, due to an appeal of any tax assessment or reassessment of any poliion
of the Propeliy or for any other reason, the Authority is required to reimburse any Tax
Increment Revenues to the County, City, or any other tax levying unit of government,
the Authority may deduct the amount of any such reimbursement, including interest and
penalties, from any amounts due and owing the Developer. If all amounts due the
4
Developer under this Agreement have been fully paid or the Authority is no longer
obligated to make any further payments to the Developer, the Authority shall invoice
the Developer for the amount of such reimbursement and the Developer shall pay the
Authority such invoiced amount within 30 days of the Developer's receipt of the invoice.
Amounts invoiced and paid to the Authority by the Developer pursuant to this paragraph
shall be reinstated as Eligible Costs for which the Developer shall have the opportunity
to be reimbursed in accordance with the terms, conditions and limitations of this
Agreement. Nothing in this Agreement shal] limit the right of the Developer to appeal
any tax assessment,
a. Income and Rent Documentation and Reportiny:
i. Developer shall monitor and annually provide to the Authority and/or a third-
party providing verification services to the Authority sufficient evidence to
demonstrate its compliance with the Annual Unit Income Restriction.
Prospective renters must verify eligibility to the Developer or their designee at
the time of initial occupancy by self-certifying using the MSDHA Household
Income Self-Certification Form attached as Exhibit C or as otherwise approved
by MSHDA.
ii. If after Authority's review of Developer's Annual Unit Income Restriction
report, Authority determines that Developer did not meet the Annual Unit
Income Restriction for the previous 12-month period based on occupied units,
Authority may withhold a pro-rata share of the total Tax Increment Revenues
received from the Development in an amount equal to the percentage of the total
units of the Project determined to not be in compliance with the Annual Unit
Income Restriction. If Developer returns to compliance at the time of the next
Annual Unit Income Restriction report, the Authority shall reimburse Developer
using all available Tax Increment Revenues available to the Authority, including
any amounts previously withheld, If, based on the formula outlined above,
Authority has any Tax Increment Revenues withheld at the end of the Term,
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Authority may retain such funds for deposit in the local brownfield revolving
fund, as provided under the Act, or remit such funds to the respective taxing
jurisdictions.
iv. The Developer shall provide to the Authority, within 30 days after the Project
receives an occupancy permit, and annually thereafter no later than May | of
each year during the Term of reimbursement under this Agreement, a report of
the following, as applicable, for the preceding calendar year pursuant to
reporting requirements under Section 16 of Act 381:
J. Total investment and new capital investment since the prior year's
rep0li.
2. Square footage of new construction or renovation, whether residential,
commercial, or other use, and use of new or renovated space.
3. New jobs created.
4, Total number of housing units and total number of Annual Unit Income
Restriction units, indicating the number rented at rates at or below the
applicable AMI ranges subject to this Agreement.
5, Number of Annual Unit Income Restriction units rented to, or available
to be rented by, income qualified household renters.
6. Annual Unit Income Restriction units rental rates.
7. Racial and socioeconomic data on the individuals purchasing or renting
the Annual Unit Income Restriction units, or, if this data is not
available, racial and socioeconomic data on the census tract in which the
housing units are located,
8. Other information required to be reported to the State of Michigan to
verify compliance with Act 381 unless that information is readily
available to the Muskegon County Treasurer,
a. During the Term of Tax Increment Revenues capture and reimbursement and in
accordance with Section 15(12){m)(iv) of the Act, no short-term rentals are allowed in
any of the residential units. Leases shall be consistent with the City of Muskegon
zoning.
b. The Developer agrees to include notice of the short-term renta! prohibition in any lease
and is responsible for monitoring compliance with this provision.
6. Interpretation; This is the entire agreement between the parties as to its subject. It
shall not be amended or modified except in writing signed by the parties. It shall not be affected by
any course of dealing and the waiver of any breach shall not constitute a waiver of any subsequent
breach of the same or any other provision,
7, Assignment - Binding Effect: This Agreement and the rights and obligations under
this Agreement shall not be assigned or otherwise transferred by either party without the consent of the
other party, which shall not be unreasonably withheld, provided, however, the Developer may assign
its interest in this Agreement to an affiliate without the prior written consent of the Authority, provided,
any such assignee shail acknowledge to the Authority in writing on or prior to the effective date of
such assignment its obligations upon assignment under this Agreement, provided, filrther, that the
Developer may make a collateral assignment of the Tax Increment Revenues after review of such
assignment and consent by the Authority's legal counsel and approval of the Authority. As used in
this paragraph, "affiliate" means any corporation, company, partnership, limited liability company,
trust, sole proprietorship or other individual or entity which (a) is owned or controlled by the
Developer, (b) owns or controls the Developer or (c) is under common ownership or control with the
Developer. This Agreement shall be binding upon any successors or permitted assigns of the parties.
8. Indemnification: Developer agrees to indemnify and hold City of Muskegon, the City
of Muskegon Brownfield Redevelopment Authority, as well as all officers, agents, employees, and
assigns thereof harmless against (a) any and all claims by any person claiming for personal or property
injuries or damage due to the Developer's redevelopment of the Propelty provided pursuant to the
terms of this Agreement, and/or (b) claims by any third parties which may arise out of, or be related
to, the Developer's redevelopment of the Propel ty pursuant to this Agreement. Developer shall not be
obligated to indemnify any persons under this section if the liability arises out of the person's
negligence, willful misconduct, or breach of ihis Agreement or the negligence or willful misconduct
of any person or entity acting by, through or under any such persons.
9. Term: This Agreement shall terminate when all reimbursements and payments
contemplated under this Agreement have been paid or May 1, 2049,
WHEREFORE, this Agreement has been executed as of the date first written above.
MUSKEGON-Central Park, LLC
By: _Lb-tnaa Ccbnerley
ao
Name: Seto LLL UGLEE
Its: HANA CER
CITY OF MUSKEGON BROWNFIELD
REDEVELOPMENT AUTHORITY
By: Bowne’ re
Its; MMa B
CITY OF MUSKEGON
By: | —Von r~Odore—
“Ken Jofyhson, Mayor
apt Rane NGerticay J
Ann Meisch, Clerk
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