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CITY OF
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Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: January 27, 2026 Title: Resolution for Housing Tax Exemption - Sue
Ann Properties LLC
Submitted by: Jake Eckholm, Development Department: Economic Development
Services Director
Brief Summary:
Eric Payne, through Sue Ann Properties, LLC is requesting a Payment in Lieu of Taxes for their
workforce housing project at 595 and 617 Oak Avenue, as well as 594 Orchard Avenue, which
requires a resolution setting the annual PILOT rate.
Detailed Summary & Background:
Eric Payne, through Sue Ann Properties, 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 Workforce Housing Restrictive Covenant in this agenda packet.
Goal/Action ltem:
2027 Goal 2: Economic Development Housing and Business
Is this a repeat item?:
Explain what change has been made to justify bringing it back to Commission:
Amount Requested: Budgeted Item:
NA Yes No N/A a
Fund(s) or Account(s): Budget Amendment Needed:
NA Yes No || N/A
Recommended Motion:
Motion to approve the resolution for housing tax exemption as presented and to authorize the clerk
to sign.
Approvals: Name the Policy/Ordinance Followed:
Immediate Division | Chapter 82-52 of the City of Muskegon Code of
Head Ordinances
Resolution Setting Annual Service Fee
for the Workforce Housing Development
by Sue Ann Properties, LLC
Whereas, Sue Ann Properties, LLC (the “Sponsor”), has applied to the City of Muskegon for
a determination that a proposed workforce housing project sponsored by it at
various properties represented on Exhibit A is entitled to the exemption from taxes
authorized by Chapter 82 of the City of Muskegon Code of Ordinances, now
therefore, be it
Resolved, that the proposed workforce housing project is within the class of housing
developments entitled to an exemption under Chapter 82, if it meets the following
contingencies:
a. Sponsor shall provide documentation to the City substantiating ownership
of the subject properties.
b. Construction of at least 9 units of the proposed workforce housing project
shall be commenced within twelve (12) months from the date of the
Michigan State Housing Development Authority’s (“MSHDA”)
notification of exemption, or this resolution shall be void and of no effect.
c. For the life of this Workforce Housing Resolution, 100% of the dwelling
units in the proposed workforce housing project will be restricted to rental
units or other housing options that are reasonably affordable to, and
occupied by, a household whose total household income is not greater than
120% of the area median income published by the Michigan Statewide
Housing Development Authority.
d. The Sponsor shall submit an affidavit to MSHDA in the form required by
MSHDA for certification that the workforce housing project is eligible for
the workforce housing exemption.
e. Upon receipt of notification from MSHDA that the workforce housing
project is eligible for a workforce housing exemption, the Sponsor shall file
the certified notification of exemption with the City Assessor before
November 1 of the year preceding the tax year in which the exemption is to
be effective; and,
f. Sponsor shall record a restrictive covenant in a form acceptable to the City
Attorney. The restrictive covenant shall be recorded in the register of deeds
for the county in which the workforce housing project is located and shall
comply with the requirements of Chapter 82; and, further be it
Resolved, that in lieu of ad valorem property taxes, the Sponsor shall pay an annual service
charge equal to ten percent (10%) of the “Annual Shelter Rents” as defined in
Section 82-52 for that portion of the workforce housing project occupied for
Workforce Housing; and, further be it
Resolved, that annually, no later than April 29, the Sponsor shall provide the City Assessor
the Sponsor’s budget for Annual Shelter Rent for the current calendar year and a
copy of Sponsor’s financial statements for the preceding calendar year, prepared in
accordance with generally accepted auditing standards or, if Sponsor is not subject
to an audit requirement, Sponsor’s compiled financial statements for the preceding
calendar year prepared in accordance with generally accepted accounting principles
and certified by Sponsor; and, further be it
Resolved, that the tax exempt status granted by this Resolution shall remain in effect for 15
years, unless otherwise terminated pursuant to Chapter 82 or this Resolution; and,
further be it
Resolved, that all portions of Chapter 82 are hereby incorporated by reference; and, further be
it
Resolved, that this Resolution may be assigned by the Sponsor only to subsequent owners of
the workforce housing project who shall agree to abide to its terms. If not assigned,
to and accepted by subsequent owners of the workforce housing project, it shall
automatically terminate; and further be it
Resolved, that the Mayor and City Clerk execute a contract with the Sponsor providing the
tax exemption and acceptance of payments in lieu of taxes as defined within this
resolution and its application, such contract subject to approval as to substance by
the City Manager and as to form by the City Attorney.
YEAS: Kochin, St.Clair, Johnson, Kilgo, German, and Jackson
NAYS: None
I hereby certify that the above Resolution was adopted
by the City Commission of the City of Muskegon at its
regular meeting held on January 27, 2026, in the
Commission Chambers, City Hall, 933 Terrace,
NRG
Ann Meisch, City Clerk
EXHIBIT A
595 OAK AVENUE - CITY OF MUSKEGON
REVISED PLAT OF 1903
W 60 FT OF
E 66 FT LOT 11 BLK 49
617 OAK AVENUE - CITY OF MUSKEGON
REVISED PLAT OF 1903
N12LOT7
ALSO E 40 FT OF LOT 8
BLK 49
594 ORCHARD AVENUE - CITY OF MUSKEGON
REVISED PLAT OF 1903
E 66 FT LOT 16 BLK 49
EXC S$ 2 RODS
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