City Commission Minutes 03-14-2017

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     CITY OF MUSKEGON
       CITY COMMISSION MEETING
           MARCH 14, 2017 @ 5:30 P.M.
   MUSKEGON CITY COMMISSION CHAMBERS
  933 TERRACE STREET, MUSKEGON, MI 49440
                                  MINUTES
The Regular Commission Meeting of the City of Muskegon was held at City Hall,
933 Terrace Street, Muskegon, MI at 5:30 p.m., Tuesday, March 14, 2017. George
Monroe, Evanston Avenue Baptist Church, opened the meeting with prayer,
after which the Commission and public recited the Pledge of Allegiance to the
Flag.
ROLL CALL FOR THE REGULAR COMMISSION MEETING:
Present: Mayor Stephen J. Gawron, Vice Mayor Hood, Commissioners Ken
Johnson, Debra Warren (arrived at 5:32 p.m.), Willie German, Jr., Dan Rinsema-
Sybenga, and Byron Turnquist, City Manager Franklin Peterson, City Attorney
John Schrier, and City Clerk Ann Meisch.
INTRODUCTIONS/PRESENTATION:
   A. Designation of Pine Street from Apple Avenue to Webster Avenue
The section of Pine Street between Apple Avenue and Muskegon Avenue will
be designated as Bill Gill Way in recognition of his years of dedicated service on
the Muskegon County Board of Commissioners and in the community. The sign
designation will be placed on top of existing street name signs, not impacting
any addresses. The designated Street Sign was presented.

2017-19     CONSENT AGENDA:

      A. Approval of Minutes City Clerk
SUMMARY OF REQUEST: To approve the minutes of the February 28, 2017
Regular City Commission Meeting.
FINANCIAL IMPACT:        None
BUDGET ACTION REQUIRED:         None
STAFF RECOMMENDATION:           Approval of the minutes.
      B. Audit Contract Extension      Finance
SUMMARY OF REQUEST: The City recently completed its contract for audit
services with Brickley DeLong. The firm has approached the City with a proposal

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to extend the contract for five years. This proposal includes fees at the same
rate for the 2017 audit as was charged for the 2016 audit. There is a 2% increase
each year for the 2018 and 2019 audits, followed by an increase of 3% each
year for the 2020 and 2021 audits.
The City has had a successful relationship with Brickley for a number of years and
has enjoyed a smooth and efficient annual audit process. With current staff
levels and increased demands on staff time, we believe it is prudent to continue
this relationship. Additionally, Brickley is a major downtown employer and the
only CPA firm located in the City qualified to perform our audit with a significant
presence in the governmental auditing field.
FINANCIAL IMPACT:




BUDGET ACTION REQUIRED:        Future budgets will include the amounts shown
above.
STAFF RECOMMENDATION:          Approval
      C. Development and Reimbursement Agreement for Construction of Dock
         at Fisherman’s Landing  Finance
SUMMARY OF REQUEST: To approve a development and reimbursement
agreement between the City and Fisherman’s Landing, Inc. The agreement will
enable construction of a new dock at Fisherman’s Landing and provides for
Fisherman’s Landing, Inc. to reimburse the City for $100,000 of the construction
costs as a loan.
FINANCIAL IMPACT:        $100,000 loan from the City’s Revolving Loan Fund to
Fisherman’s Landing, Inc.
BUDGET ACTION REQUIRED:        None.
STAFF RECOMMENDATION:          To approve the agreement.
      E. Source Water Protection Plan Agreements; Grant & Engineering       Water
         Filtration Plant
SUMMARY OF REQUEST: Authorize Staff to enter into agreements with MDEQ for
a $15,000 grant which requires a 100% City match, and an engineering
agreement with Tetra Tech to prepare a Source Water Protection Plan as
recommended by MDEQ.

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Tetra Tech is being recommended since they were the engineer who prepared
the grant application and their familiarity with the City’s filtration plant. The
engineering cost is “not to exceed” $30,000.
FINANCIAL IMPACT:         The total cost of this purchase is $30,000 for engineering
of which $15,000 is grant money and the other $15,000 from the City’s water
fund.
BUDGET ACTION REQUIRED:         None.
STAFF RECOMMENDATION:       Authorize Staff to sign both agreements;
accepting the grant with MDEQ and the engineering agreement with Tetra
Tech.
      F. PILOT – Ordinance Amendment – Amazon             Planning & Economic
         Development
SUMMARY OF REQUEST: Muskegon Redevelopment Limited Housing Authority
purchased the Amazon property in 2016. There is currently no PILOT for the
property, although it is a Low Income Housing Tax Credit (LIHTC) project. In order
to obtain the financing necessary to make additional capital improvements to
the Amazon, a Pilot is required. Since the Property is within the City’s Downtown
Development Authority (DDA), the PILOT will result in a decrease of taxes being
paid into the DDA. An amendment to the current PILOT Ordinance (#2303) is
being recommended for Section 82-51(1), changing the service charge for the
PILOT from 4 percent minimum to 3 percent minimum. The City is able to capture
an additional percentage for the City service fee.
FINANCIAL IMPACT:      The Ordinance amendment would allow for a lower
minimum percent of service charge.
BUDGET ACTION REQUIRED:         None.
STAFF RECOMMENDATION:            If the City Commission agrees that the PILOT is
necessary for this property, staff recommends that the Ordinance amendment
be approved and the Clerk be authorized to sign the necessary documents.
      G. PILOT – Muskegon Redevelopment Limited Dividend Housing Authority
         (Amazon)      Planning & Economic Development
SUMMARY OF REQUEST: Mr. Back of Muskegon Redevelopment Limited
Dividend Housing Authority is requesting a Payment in Lieu of Taxes (PILOT) for
the Amazon property (550 W. Western). The property is currently a MSHDA LIHTC
(Low Income Housing Tax Credit) project. Normally, LIHTC properties also have
PILOT Agreements, which allow them to make improvements over time, despite
restricted rents. Since the Amazon was originally in a Renaissance Zone, a PILOT
was not initially received. The property is no longer in a Renaissance Zone.
Muskegon Redevelopment Limited Dividend Housing Authority purchased the
building out of bankruptcy in 2016 and they have put a significant amount of


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investment into the property. However, additional major capital improvements
are necessary, and the only way the funds will be available is through a PILOT
designation. Fortunately, Muskegon Redevelopment Limited Dividend Housing
Authority is only requesting a five year PILOT for the Amazon. This will enable the
owner to make the necessary improvements, while providing additional market-
rate units in the facility. The long-term goal is to increase the number of these
market-rate units. Currently, the development includes 49 units (60% Area
Median Income), 61 units (50% Area Median Income) and 12 units (Market-
Rate); as well as five commercial units (with plans to convert some of these to
market-rate apartments). The Amazon Apartments contain 1-, 2-, and 3-
bedroom units, common area, a community room, and outdoor courtyard. The
minimum service charge of 3% will be imposed (assuming the PILOT Ordinance
Amendment is first approved by City Commission) as well as an essential service
fee to the City of 3%.
FINANCIAL IMPACT:         The loss of the taxes to the DDA will be substantial.
However, the taxing jurisdictions will benefit from the 3% PILOT and the City will
benefit from the 3% essential service fee. In addition, the PILOT is only approved
for five years. Meanwhile, Muskegon Redevelopment Limited Dividend Housing
Authority partners are involved in several other projects downtown which have,
and will, increase the tax base for the DDA.
BUDGET ACTION RECOMMENDED:            None at this time.
STAFF RECOMMENDATION: To approve the “Contract for Housing Exemption”
and “Development Agreement” and authorize the Mayor and Clerk to sign.
Motion by Commissioner German, second by Commissioner Johnson, to
approve the consent agenda as presented, minus item D.
ROLL VOTE: Ayes: Warren, German, Rinsema-Sybenga, Turnquist, Johnson,
           Gawron, and Hood
            Nays: None
MOTION PASSES
2017-20     ITEMS REMOVED FROM THE CONSENT AGENDA:
      D. Summer Youth Park Program Recreation Program Contract – Boys and
         Girls Club of Muskegon   Planning & Economic Development
SUMMARY OF REQUEST: The City of Muskegon is recommending approval of the
Contract with the Boys and Girls Club of Muskegon for the management of the
2017 Summer Youth Park Recreation Program. For the past several years, the City
of Muskegon has provided the majority of the Leisure Services funds for the
Summer Park Youth Recreation Program. The YMCA managed the program for
several summers, and the Boys and Girls Club took over management for the
summer of 2016. This Contract is consistent with the memo sent to the City


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Commission by the Director of Community & Economic Development in
December 2016. For 2017, the Boys and Girls Club of Muskegon will operate in
four sites in the City, three of which are funded by the City of Muskegon (Smith
Ryerson Park, Reese Park, and Seyferth Park). The anticipated total cost of the
program for 2017 in the City of Muskegon is $96,381. It is proposed that the City
provide $45,000 towards the program’s management for 2017 and 2018. The
Contract is for two years. However, if funding is no longer available in the future,
the Contract can be cancelled.
FINANCIAL IMPACT:     It is anticipated that the funding will be disbursed from
future Community Development Block Grant Leisure Services Fund.
BUDGET ACTION REQUIRED:          None at this time.
STAFF RECOMMENDATION:         To approve the Summer Youth Park Program
Proposal and Contract and authorize staff to enter into an agreement with the
Boys and Girls Club of Muskegon.
Motion by Commissioner Warren, second by Commissioner Rinsema-Sybenga,
to approve the Summer Youth Park Program Proposal and Contract and
authorize staff to enter into an agreement with the Boys and Girls Club of
Muskegon.
ROLL VOTE: Ayes: German, Rinsema-Sybenga, Turnquist, Johnson, Gawron,
           Hood, and Warren
             Nays: None
MOTION PASSES
2017-21      PUBLIC HEARINGS:
      A. Recommendation for Annual Renewal of Liquor Licenses          City Clerk
SUMMRY OF REQUEST: To adopt a resolution recommending the non-renewal
of those liquor license establishments who are in violation of Section 50-146 and
50-147 of the Code of Ordinance for the City of Muskegon. These establishments
have been found to be in non-compliance with the City Code of Ordinances
and renewal of their liquor licenses should not be recommended by the City
Commission. If any of these establishments come into compliance by March 14,
2017, they will be removed from this resolution, and recommendation for their
renewal will be forwarded to the Liquor Control Commission.
FINANCIAL IMPACT:         None
BUDGET ACTION REQUIRED:          None
STAFF RECOMMENDATION:            Adoption of the resolution.
PUBLIC HEARING COMMENCED:               No public comments were received.
Motion by Commissioner Rinsema-Sybenga, second by Commissioner Warren,


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to close the public hearing and adopt the resolution recommending state
withhold renewal of liquor license for code violations. (NONE)
ROLL VOTE: Ayes: Rinsema-Sybenga, Turnquist, Johnson, Gawron, Hood,
           Warren, and German
            Nays: None
MOTION PASSES
      B. Public Hearing – Establishment of a Commercial Redevelopment
          District – 1205 Peck Street Planning & Economic Development
SUMMARY OF REQUEST: Pursuant to Public Act 255 of 1978, as amended, 1205
Peck LLC has requested the establishment of a Commercial Redevelopment
District. The creation of the district will allow the building owner to apply for a
Commercial Facilities Exemption Certificate, which will freeze the taxable value
of the building and exempt the new real property investment from local taxes.
FINANCIAL IMPACT:        None
BUDGET ACTION REQUIRED:         None
STAFF RECOMMENDATION:           Establishment of the Commercial
Redevelopment District.
STAFF RECOMMENDATION:           Adoption of the resolution.
PUBLIC HEARING COMMENCED:              Al Green asked if the business has any
disabled employees.
Motion by Commissioner Rinsema-Sybenga, second by Vice Mayor Hood, to
close the public hearing and establish the Commercial Redevelopment District
at 1205 Peck Street.
ROLL VOTE: Ayes: Turnquist, Johnson, Gawron, Hood, Warren, German, and
           Rinsema-Sybenga
            Nays: None
MOTION PASSES
      C. Public Hearing – Issuance of a Commercial Facilities Exemption
         Certificate – 1205 Peck LLC Planning & Economic Development
SUMMARY OF REQUEST: Pursuant to Public Act 255 of 1978, as amended, 1205
Peck LLC has requested the issuance of a Commercial Facilities Exemption
Certificate. The certificate will freeze the taxable value of the building and
exempt the new real property investment from local taxes. The company will be
investing $70,000 in the building and will create 12 new jobs, which qualifies
them for an abatement of 10 years.
FINANCIAL IMPACT:         The real property taxes would be frozen at their pre-
rehabilitated rate for the duration of the certificate.

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BUDGET ACTION REQUIRED:         None.
STAFF RECOMMENDATION:           Issuance of the Commercial Facilities Exemption
Certificate.
PUBLIC HEARING COMMENCED:               No public comments were received.
Motion by Commissioner Warren, second by Commissioner Johnson, to close
the public hearing and issue the Commercial Facilities Exemption Certificate for
1205 Peck LLC
ROLL VOTE: Ayes: Johnson, Gawron, Hood, Warren, German, Rinsema-Sybenga,
           and Turnquist
             Nays: None
MOTION PASSES
2017-22      NEW BUSINESS:
      A. Concurrence with the Housing Board of Appeals Notice and Order to
         Demolish     Public Safety
          1153 Pine
          1451 Park
SUMMARY OF REQUEST: This is to request that the City Commission concur with
the findings of the Housing Board of Appeals that the structures are unsafe,
substandard, a public nuisance and that they be demolished within thirty (30)
days or infraction tickets may be issued. It is further requested that administration
be directed to obtain bids for the demolition of the structures and that the
Mayor and City Clerk be authorized and directed to execute contracts for
demolition with the lowest responsible bidder or staff may issue infraction tickets
to the owner, agent, or responsible party if they do not demolish the structure.
FINANCIAL IMPACT:         General Funds
BUDGET ACTION REQUIRED:         None.
STAFF RECOMMENDATION:           To concur with the Housing Board of Appeals
decision to demolish.
Motion by Commissioner Rinsema-Sybenga, second by Commissioner Turnquist,
to concur with the Housing Board of Appeals decision to demolish 1153 Pine and
1451 Park Street.
Motion to Amend Motion by Commissioner Rinsema-Sybenga, second by
Commissioner Turnquist, to amend the motion to remove 1451 Park Street from
the motion to demolish.
ROLL VOTE: Ayes: Hood, Warren, German, Rinsema-Sybenga, Turnquist,
           Johnson, and Gawron


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             Nays: None
MOTION PASSES
Motion to Table  Motion by Commissioner Rinsema-Sybenga, second by Vice
Mayor Hood, to table the motion to demolish 1451 Park Street until the second
meeting in May 2017 – work to be completed by May 12.
ROLL VOTE: Ayes: Warren, German, Rinsema-Sybenga, Turnquist, Johnson,
           Gawron, and Hood
             Nays: None
MOTION PASSES
VOTE ON ORIGINAL MOTION (AMENDED TO REMOVE AND TABLE 1451 PARK ST)
ROLL VOTE: Ayes: Gawron, Hood, Warren, German, Rinsema-Sybenga,
           Turnquist, and Johnson
             Nays: None
MOTION PASSES
      B.   Arena Proposal – Rad Dad’s        City Manager
SUMMARY OF REQUEST: City Staff has been working with a group of local
business owners interested in creating a restaurant and bar to service the LC
Walker Arena and also provide more daily food/beverage options to the
downtown community. Rad Dad’s Taco and Tequila Bar is proposing to lease
approximately 3,500 square feet of concourse space in the arena and 500
square feet of outdoor space to provide outdoor dining space at the corner of
Western Avenue and 4th Street. In addition to operating Rad Dad’s Taco and
Tequila Bar, the ownership group is interested in entering into a management
agreement to operate the arena’s numerous concession stands during event
days.
The owners would like to open by June 1, 2017. Staff would like to begin
implementation of the concession management contract in August, with the
expectation that full implementation will take place prior to the beginning of the
Lumberjacks’ 2017-18 hockey season.
FINANCIAL IMPACT:          Build-out costs are expected to be less than $350,000. If
build out costs are at $350,000, the tenant’s initial lease rate will be $43,750
annually for both interior and outdoor space. In the event that costs fall below
or exceed $350,000, any amount over or under $350,000 will be added to or
subtracted from the tenant’s lease rate as follows: for every dollar of variance,
the tenant’s annual rent will increase/decrease by 12.5 cents. Regardless of
savings, rent will be no less than $35,000 annually.
BUDGET ACTION REQUIRED:        $350,000 Capital Improvement is expected; the
budget will be included as part of the 3rd Quarter Budget Reforecast.

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STAFF RECOMMENDATION:         To approve the request and authorize the City
Manager to negotiate final lease and management terms.
Motion by Commissioner Johnson, second by Commissioner German, to
approve the request and authorize the City Manager to negotiate final lease
and management terms.
ROLL VOTE: Ayes: German, Rinsema-Sybenga, Turnquist, Johnson, Gawron,
           Hood, and Warren
            Nays: None
MOTION PASSES
          C. Letter of Intent for Loan
SUMMARY OF REQUEST: To approve the request from 351 W Western LLC to
have staff draft a Letter of Intent to fund a portion of the project through the
city’s Revolving Loan Fund and to commit to preleasing 10 residential units. Staff
would draft the letter for the mayor to sign.
FINANCIAL IMPACT:         None
BUDGET ACTION REQUIRED:          None
STAFF RECOMMENDATION: Approval to draft the Letter of Intent.
Motion by Commissioner Johnson, second by Commissioner Warren, to approve
the drafting of a letter of intent.
ROLL VOTE: Ayes: Rinsema-Sybenga, Turnquist, Johnson, Gawron, Hood,
           Warren, and German
            Nays: None
MOTION PASSES
2017-24 ANY OTHER BUSINESS:
To formalize the designation of the portion of Pine Street between Apple
Avenue and Muskegon Avenue a resolution has been prepared designating
same in recognition of the years of service of Bill Gill on the Muskegon County
Board of Commissioners and in the community in general.

Motion by Vice Mayor Hood, second by Commissioner German, to adopt the
resolution recognizing the dedicated service of Bill Gill to the Muskegon County
Board of Commissioners and to the community.

ROLL VOTE: Ayes: Gawron, Hood, Warren, German, Rinsema-Sybenga,
           Turnquist, and Johnson
            Nays: None
MOTION PASSES

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PUBLIC PARTICIPATION: Public Comments were received
ADJOURNMENT: The City Commission Meeting adjourned at 7:05 p.m.
                                 Respectfully Submitted,




                                 Ann Marie Meisch, MMC, City Clerk




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