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CITY OF
=i“@ MUSKEGON
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: January 27, 2026 Title: Workforce Housing Restrictive Covenant -
HAPCE LLC
Submitted by: Jake Eckholm, Development Department: Economic Development
Services Director ,
Brief Summary:
Tim Van Der Kolk, through his HAPCE LLC, requests a Workforce Housing PILOT for 2 duplexes and ?
accessory dwelling units at 625 and 635 Oak Avenue. This restrictive covenant establishes the terms of
the project and restricts the properties use to workforce housing for the statutory term.
Detailed Summary & Background:
Tim Van Der Kolk, as HAPCE LLC, is working with Mrs. Kara Novak as the lender and developer along
with Mr. Derek Sjaarda as the builder to add to our stock of income restricted workforce housing in
the community. If approved, these parcels will each feature a duplex and an accessory dwelling
unit, utilizing our 2024 Zoning Reforms to increase density to meet the housing need. These units will be
restricted to families or individuals that fall below 120% AMI for their household size, per MSHDA's
annual rent limits for Muskegon County. The term of the restricted use is 15 years, along with the
companion resolution establishing the Payment in Lieu of Taxes (PILOT) in this agenda.
Goal/Action Item:
2027 Goal 2: Economic Development Housing and Business
Is this a repeat iftem?:
Explain what change has been made to justify bringing it back to Commission:
Amount Requested: Budgeted Item:
N/A Yes No N/A | |
Fund(s) or Account(s): Budget Amendment Needed:
N/A Yes No a N/A
Recommended Motion:
Motion to approve the Workforce Housing Restricted Covenant between the City of Muskegon and
HAPCE, LLC as presented and to authorize the Mayor and Clerk to sign.
Approvals: Name the Policy/Ordinance Followed:
Immediate Division a Chapter 82-52 of the City of Muskegon Code of
Head Ordinances
WORKFORCE HOUSING RESTRICTIVE COVENANT
This Workforce Housing Restrictive Covenant (“Restrictive Covenant”) is made by and between
the City of Muskegon, Michigan (“Municipality”) and HAPCE LLC, a Limited Liability Company,
presently of 4344 Oakland Hills Dr, Dorr, MI 49323 (the “Sponsor”) as of January 27", 2026.
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”).
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, 2041, 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 WHEREOF, is this Covenant is effective as of January 27", 2026.
[Signature Pages Follow]
CITY OF MUSKEGON
s:_ Mayor
STATE OF MICHIGAN )
) ss
COUNTY OF MUSKEGON _)
The foregoing instrument was acknowledged before me this day of January 27th, 2026 by Kenneth
Johnson, as Mayor of the City of Muskegon, a municipal corporation of the State of Michigan.
Linda S. Motter
Notary Public, 7/7 Keg on County, MI
My Commission Expires’_?=2.5- 2030
Acting in Hy sKe gos) County, MI
SPONSOR
HAPCE, LLC
ary YE
Its: (Vito
STATE OF MICHIGAN _)
) ss
COUNTY OF MUSKEGON _ )
The foregoing instrument was acknowledged before me_ this Xn day of Var , by
Lima \u. Dev Pol , as the manager/authorized member of the aforementioned Sponsor.
OM
AMY CARPENTER
NOTARY PUBLIC - STATE OF MICHIGAN Notary Public, Ot UWA County, MI
COUNTY OF OTTAWA My Commission Expires:
My Commission Expires Dec 23, 2027
Acting in the County of (CY
Acting in Otten County, MI
DRAFTED BY:
WHEN RECORDED RETURN TO:
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EXHIBIT A
Legal Description of Property
625 OAK AVENUE - CITY OF MUSKEGON
REVISED PLAT OF 1903
N 1/2 LOT 6 BLK 49
635 OAK AVENUE - CITY OF MUSKEGON
REVISED PLAT OF 1903
N 1/2 LOT 5 BLK 49
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