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CITY OF MUSKEGON
CITY COMMISSION MEETING
JUNE 24, 2014
CITY COMMISSION CHAMBERS @ 5:30 P.M.
AGENDA
□ CALL TO ORDER:
□ PRAYER:
□ PLEDGE OF ALLEGIANCE:
□ ROLL CALL:
□ HONORS AND AWARDS:
□ INTRODUCTIONS/PRESENTATION:
□ CITY MANAGER’S REPORT:
□ CONSENT AGENDA:
A. Approval of Minutes. CITY CLERK
B. Extension of the Moratorium for Establishments of Medical Marijuana
Facilities. CITY CLERK
C. Wheel Loader. PUBLIC WORKS
D. Mini Excavator. PUBLIC WORKS
E. Selection of Vinyl Siding Supplier for Fiscal Year 2014-2015.
COMMUNITY & NEIGHBORHOOD SERVICES
F. “Rule of 1” Question on General Ballot. CITY MANAGER
□ PUBLIC HEARINGS:
□ COMMUNICATIONS:
□ UNFINISHED BUSINESS:
□ NEW BUSINESS:
A. Heritage Square Development LLC – Construction Loan Agreement and
Other Document Approval. PLANNING & ECONOMIC DEVELOPMENT
B. Farmers’ Market Rentals. PLANNING & ECONOMIC DEVELOPMENT
C. Police Review Board Minority Coalition. CITY CLERK
D. Concurrence with the Housing Board of Appeals Notice and Order to
Demolish the Following: PUBLIC SAFETY
254 Monroe
1245 Fleming (garage only)
30 E. Clay
E. Resolution to Place Question to Increase Tax Levy on Ballot. CITY
MANAGER
□ ANY OTHER BUSINESS:
□ PUBLIC PARTICIPATION:
► Reminder: Individuals who would like to address the City Commission shall do the following:
► Fill out a request to speak form attached to the agenda or located in the back of the room.
► Submit the form to the City Clerk.
► Be recognized by the Chair.
► Step forward to the microphone.
► State name and address.
► Limit of 3 minutes to address the Commission.
► (Speaker representing a group may be allowed 10 minutes if previously registered with City Clerk.)
□ CLOSED SESSION:
A. Attorney-Client Privileged Communications.
B. City Manager’s Evaluation.
□ ADJOURNMENT:
ADA POLICY: THE CITY OF MUSKEGON WILL PROVIDE NECESSARY AUXILIARY AIDS AND SERVICES TO INDIVIDUALS
WHO WANT TO ATTEND THE MEETING UPON TWENTY-FOUR HOUR NOTICE TO THE CITY OF MUSKEGON. PLEASE
CONTACT ANN MARIE CUMMINGS, CITY CLERK, 933 TERRACE STREET, MUSKEGON, MI 49440 OR BY CALLING (231)
724-6705 OR TTY/TDD DIAL 7-1-1- TO REQUEST A REPRESENTATIVE TO DIAL (231) 724-6705.
Memorandum
To: Mayor and Commissioners
From: Frank Peterson
Re: City Commission Meeting
Date: June 24, 2014
We have a number of items on the agenda, and I thought you could use a little background on them as
you prepare for our meeting next week.
1. We are proposing an extension to the medical marijuana moratorium while we finalize a
proposed ordinance amendment. We should be ready to implement the new ordinance next
month.
2. The Department of Public Works is purchasing two pieces of equipment – a loader and a mini
excavator.
3. We have received bids for the purchase of vinyl siding for our vinyl siding program and are
asking for approval to select a vendor. We are still working on a plan for installation.
4. We are asking the Commission to place ballot language on the November Ballot to eliminate the
“rule of 1” for promotions. This was recommended by the Civil service Commission.
5. The Heritage Square loan documents are ready for formal Commission action.
6. We have a plan for renting the farmers market for private events. The proposed fee schedule is
attached. We would like to have it in place for this year while we evaluate our costs. We are
also expecting to be able to waive the fee in certain circumstances – likely in exchange for other
in-kind services.
7. The Police Review Board Minority Coalition has come to a mutual agreement on how certain
appointments should be made going forward.
8. We are looking for concurrence with the housing board of appeals on three demolitions. I
recommend approval. These parties have had opportunities to go before the HBA, and their
next course of action should be the Muskegon County court system.
9. Staff is recommending the Commission consider a ballot measure asking the community to
support raising the millage cap from 10 mills to 14 Mills. We had a number of meetings to
discuss our needs in terms of street infrastructure, and have gathered community input from
two separate CRC meetings. There appears to be both a recognizable need as well as support
for millage dollars dedicated to street infrastructure. The additional 4 mills will raise
approximately $2 Million annually. Over the next few weeks, City staff will work on a plan to
identify how the new dollars should be spent – street lights, major roads, neighborhood streets,
etc. We should also continue to spend time visiting neighborhood groups and other community
meetings to talk about our street needs. Eventually, we will ask the Commission to commit be
Resolution to a spending plan for the additional mills.
Date: June 24, 2014
To: Honorable Mayor and City Commissioners
From: Ann Marie Cummings, City Clerk
RE: Approval of Minutes
SUMMARY OF REQUEST: To approve minutes of the June 9th
Commission Worksession Meeting, and the June 10th City Commission
Meeting.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Approval of the minutes.
City of Muskegon
City Commission Worksession
June 9, 2014
City Commission Chambers
5:30 PM
MINUTES
2014-42
Present: Commissioners Hood, Rinsema-Sybenga, Gawron, Johnson, German, Turnquist, and
Spataro.
Absent: None.
Farmers Market Permit to a Qualified Small Wine Maker.
A new state law now allows wine sampling at Farmers Markets. A maximum of three samples
may be given. Samples can be no more than 2 ounces.
Motion by Vice Mayor Spataro, seconded by Commissioner Johnson to authorize staff to
adopt regulations to allow Farmers Market vendors to have wine tasting in conformity
with the new state law.
Roll Call Vote:
Ayes: Gawron, Hood, Spataro, German, Rinsema-Sybenga, Turnquist, and Johnson.
Nays: None.
MOTION PASSES
2014-15 Budget.
The third quarter budget re-forecast was given.
Proposed general fund expenditures are $24,733,617 and are up from the 2013-14 original
budget of $23,775,700. Revenues for 2014-15 are estimated at $24,733,981 and are up from the
2013-14 original budget of $23,183,205. This essentially creates a break even budget for 2014-
15.
The budget includes the elimination of two code compliance inspector positions and one
customer service representative I position (environmental services) with the privatization of
environmental and rental code compliance services. Three additional firefighter positions were
added with the reduction in contractual services for part-time firefighters.
The budget does include a .5 mill increase for refuse and a .5 mill increase to the overall millage
rate and represents a balanced budget.
The budget reflects the continued contractual relationship with SafeBuilt to provide trade
inspection services and rental inspection services. We will continue to contract recreation
services with outside agencies at the same funding level.
Due to relatively low ridership, staff is proposing the elimination of senior transit services.
Refuse collection costs are anticipated to increase by 1%, pursuant to the contract with Republic.
Over $499,000 has been budgeted for capital improvements that include playground equipment,
radios for the fire department, GIS mapping of grave sites, replacement of windows at city hall,
force continuum equipment for police department, ADA compliance at various locations, roof
repair or replacement at fire station #4, and Veteran's Park upgrades.
A proposed millage increase was discussed. Staff was directed to finalize a proposal and take it
to the June 24, 2014 Commission meeting for consideration of the November ballot.
Commissioners asked several questions regarding various line items within the proposed budget.
The City Manager, Finance Director, and staff answered questions.
The public hearing on the budget will take place at the Commission meeting on Tuesday, June
10, 2014 Commission meeting.
Any Other Business.
After a discussion with city staff, the City Manager recommended the Commission consider
placing a question on the November ballot to remove the “Rule of 1” from the Civil Service
rules. The “Rule of 1” currently allows an employee with the highest score to promote into a
position. Removing the rule would allow supervisors to select any employee with a passing
score for promotion.
This item has been placed on the June 24, 2014 agenda for consideration by the City
Commission.
Adjournment.
Motion by Commissioner Hood, seconded by Commissioner Johnson to adjourn at 7:23
p.m.
MOTION PASSES
____________________________
Ann Marie Cummings, MMC
City Clerk
CITY OF MUSKEGON
CITY COMMISSION MEETING
JUNE 10, 2014
CITY COMMISSION CHAMBERS @ 5:30 P.M.
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, June 10, 2014.
Mayor Gawron opened the meeting with prayer from Pastor Marcy Miller from
the Samuel Lutheran Church after which the Commission and public recited the
Pledge of Allegiance to the Flag.
ROLL CALL FOR THE REGULAR COMMISSION MEETING:
Present: Mayor Stephen Gawron, Vice Mayor Lawrence Spataro,
Commissioners Willie German, Dan Rinsema-Sybenga, Byron Turnquist, Ken
Johnson, and Eric Hood, City Manager Franklin Peterson, City Attorney John
Schrier, and City Clerk Ann Marie Cummings.
2014-43 HONORS AND AWARDS:
A. Recognition of Spring 2014 Citizen’s Academy Graduates. PUBLIC
SAFETY
Public Safety Director Jeff Lewis read the resolution and thanked the 2014
Citizen’s Police Academy for their faithful attendance, completion and
graduation from the ten week academy.
2014-44 CONSENT AGENDA:
A. Approval of Minutes. CITY CLERK
SUMMARY OF REQUEST: To approve minutes of the May 27th City Commission
Meeting.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Approval of the minutes.
B. Fireworks Display Permit for 5th of July Celebration at Heritage Landing.
CITY CLERK
SUMMARY OF REQUEST: Commission previously approved Night Magic’s request
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for a fireworks display on July 4th. Night Magic is also requesting approval of a
fireworks display permit for July 5th at Heritage Landing. Fire Marshall Metcalf has
reviewed the request and recommends approval contingent on inspection of
the fireworks.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Approval contingent on inspection of the fireworks.
C. City/County Human Resources Agreement. CITY MANAGER
SUMMARY OF REQUEST: The City currently contracts with Muskegon County for
the provision of human resources services. This program is administered by the
County Human Resources Department. The Agreement is set to expire June 30,
2014. City staff is requesting that the City Commission extend the agreement for
one year to June 30, 2015. All terms of the Agreement would remain
unchanged.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: To approve the one-year extension of the current
Agreement.
COMMITTEE RECOMMENDATION: The Civil Service Commission has
recommended approval of the one-year extension.
D. Bid Award: Cost Sharing with Norton Shores and Fruitport Township
(West Michigan Water Authority). ENGINEERING
SUMMARY OF REQUEST: Participate in the cost to construct piping to connect
the new high services pumps that Norton Shores and Fruitport are proposing to
the City’s system which would help the City eliminate the usage of the plant’s
high service pumps during low demand periods and thus saving the City a lot
more than the requested participation amount of $21,500.
FINANCIAL IMPACT: Contribute 50% of the bid amount of $43,000. The funds will
have to be added to the 2014-2015 budget.
BUDGET ACTION REQUIRED: None at this time.
STAFF RECOMMENDATION: Authorize staff to execute any necessary documents
to participate in the cost of the piping at a rate of no more than 50% of actual
cost.
E. Consideration of Bids: Contract Award Roof Replacement at McGraft
Park Building. ENGINEERING
SUMMARY OF REQUEST: Authorize staff to enter into an agreement with Schmit
2
Roofing to replace the roof at McGraft Park building since they submitted the
lowest quote of $15,274.
FINANCIAL IMPACT: The construction cost of $15,274.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Authorize staff to enter into an agreement with
Schmit Roofing to replace the roofing at the McGraft Park building.
F. Amendment to the Fireworks Ordinance. PUBLIC SAFETY
SUMMARY OF REQUEST: It is requested that the City Commission approve the
ordinance amendment which adds restrictions to the locations where fireworks
may be used as allowed by state law. A provision was also added regarding
sales to minors and the penalties set by state law.
Fireworks may not be ignited, discharged, or used on public property, school
property, church property, or the property of another person without permission.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: To approve the ordinance as presented.
G. Appointment to the District Library Board. CITY CLERK
SUMMARY OF REQUEST: To approve the appointment of Clayton Hardiman to
the District Library Board.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Approval of the appointment.
COMMITTEE RECOMMENDATION: The Community Relations Committee
recommended the appointment of Clayton Hardiman at their June 9th meeting.
Motion by Commissioner Turnquist, second by Commissioner Johnson to accept
the Consent Agenda as presented.
ROLL VOTE: Ayes: Rinsema-Sybenga, Turnquist, Johnson, Gawron, Hood,
Spataro, and German
Nays: None
MOTION PASSES
2014-45 PUBLIC HEARINGS:
A. Transmittal of 2014 – 15 Proposed Budget. CITY MANAGER
SUMMARY OF REQUEST: At this time staff is transmitting to the City Commission
the proposed budget for fiscal year 2014-15 which starts July 1, 2014. Both
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hardcopy and electronic versions of the budget have been distributed to
Commissioners. Additionally, the budget is available for public inspection on the
City’s website, at the City Clerk’s office, or Hackley Public Library.
The proposed budget will be reviewed in detail with staff at the June 9th
Worksession. A public hearing on the budget will be held at the regular
Commission meeting the following evening. City ordinance requires that the
budget be adopted by the Commission on or before the second Commission
meeting in June.
FINANCIAL IMPACT: The budget is the City’s financial plan for the coming fiscal
year.
BUDGET ACTION REQUIRED: None at this time.
The Public Hearing opened to hear and consider any comments from the
public. No public comments were made.
Motion by Vice Mayor Spataro, second by Commissioner German to close the
Public Hearing and adopt the 2014-2015 Proposed Budget as revised with the
version dated June 10, 2014.
ROLL VOTE: Ayes: Turnquist, Johnson, Gawron, Hood, Spataro, German, and
Rinsema-Sybenga
Nays: None
MOTION PASSES
PUBLIC PARTICIPATION: Public comments were received.
ADJOURNMENT: The City Commission Meeting adjourned at 6:10 p.m.
Respectfully submitted,
Ann Marie Cummings, MMC
City Clerk
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Date: 6/24/14
To: Honorable Mayor and City Commissioners
From: DPW/Equipment
RE: Wheel Loader
SUMMARY OF REQUEST:
Authorize staff to Purchase one (1) Wheel Loader from Michigan CAT off of the Mi-Deal
State Purchasing contract.
FINANCIAL IMPACT:
A net price $151,900; $187,900.00 price of the new loader minus $36,000 trade-in value of
the loader we have.
BUDGET ACTION REQUIRED:
None. Amount is what was budgeted.
STAFF RECOMMENDATION:
Authorize staff to purchase one (1) wheel loader from Michigan CAT off of the Mi-Deal State
purchasing contract.
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Date: 6/24/14
To: Honorable Mayor and City Commissioners
From: DPW/Equipment
RE: Mini Excavator
SUMMARY OF REQUEST:
Authorize staff to purchase one (1) Mini Excavator from Michigan CAT, the lowest
qualified bidder.
FINANCIAL IMPACT:
$46,100.00
BUDGET ACTION REQUIRED:
None. This purchase was in the 2013/14 CIP for the Equipment Div.
STAFF RECOMMENDATION:
Authorize staff to purchase one (1) 4 1/2 ton Mini Excavator From Michigan CAT.
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Commission Meeting Date: June 24, 2014
Date: June 17, 2014
To: Honorable Mayor & City Commission
From: Planning & Economic Development Department
RE: Heritage Square Development LLC- Construction
Loan Agreement and Other Document Approval
SUMMARY OF REQUEST: At the March 25, 2014 meeting, the Commission authorized staff and the
City Attorney to proceed with the necessary documents to complete the loan transaction with Mr. Post
for the construction of two townhouses at Heritage Square, on Clay Avenue (as well as explore the
option of using HOME funds for an additional unit, which remains a possibility). An agreement has been
reached to loan Mr. Post $500,000 from the City’s “economic development fund” for the construction of
the two townhouses (just to the West of the existing four units). The Construction Loan Agreement
(attached), as well as the Construction Loan Note, Commercial Construction Mortgage, Commercial
Guaranty (which is Mr. Post’s personal Guaranty), Security Agreement, Assignment of Rents and
Leases, and Assignment of Plans and Specifications have been prepared and are ready for
Commission approval.
FINANCIAL IMPACT: The City will loan $500,000 to Mr. Post to complete two townhouses. The funds
must be substantially expended by December 2014 (with the project fully completed by February 28,
2015). Both townhouses are to be sold within 24 months of the date of the Agreement (if not, “interest
shall begin accruing on the Construction Note retroactively from the Effective Date of this Agreement at
the rate of 5% per annum”).
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: To approve the Construction Loan Agreement (attached), as well as the
Commercial Construction Mortgage, Commercial Guaranty (which is Mr. Post’s personal Guaranty),
Security Agreement, Assignment of Rents and Leases, and Assignment of Plans and Specifications
and authorize the Mayor and Clerk’s signiture’s on the documents, as well as authorize staff to sign any
and all other documents necessary for the loan closing (e.g., closing statement, escrow agreement,
Transnation documents).
CONSTRUCTION LOAN AGREEMENT
THIS CONSTRUCTION LOAN AGREEMENT (the "Agreement") is effective as of
_____________ 2014 (“Effective Date”), between the City of Muskegon, c/o City Manager, a
Michigan municipal corporation, with offices located at 933 Terrace Street, Muskegon, Michigan
49443 ("City"), and Heritage Square Development, LLC, a Michigan limited liability company
whose registered office is located at 272 W Clay Avenue, Muskegon, MI 49440 (the
"Borrower").
The Borrower desires to construct two townhouses on Clay Avenue (the "Project"), on the real
estate described on Exhibit A attached (the "Land"). The Borrower has requested a loan of Five
Hundred Thousand Dollars ($500,000.00) to finance the cost of constructing the Project (the
"Construction Loan"). The City desires to make the Construction Loan on the terms and
conditions set forth in this Agreement.
THE CITY AND THE BORROWER AGREE AS FOLLOWS:
SECTION 1
THE LOANS
Section 1.1. Construction Loan. Subject to the terms and conditions of this Agreement, the
Borrower may from time to time until the earlier of the Completion Date of Construction (as
hereafter defined) or February 28, 2015, draw against the Loan provided that the maximum
amount outstanding shall not exceed $500,000.00.
Section 1.2. Construction Loan Note. Simultaneously with the execution of this Agreement, the
Borrower shall execute and deliver to the City a Promissory Note of even date and in the form
and substance satisfactory to the City (the "Construction Note"). The Construction Note will,
among other provisions, contain the following:
(a) Term: 24 months;
(b) Interest Rate:
(1) no interest will be charged if the following conditions are met:
(i) Permits shall be requested within 30 days of the date of this
Agreement
(ii) the Construction commences within 90 days of the date of this
Agreement;
(iii) the Project is substantially completed by December 31, 2014 and
fully completed by February 28, 2015. “Substantially completed” means
when the building envelope is complete, all rough-in inspections have
been completed, insulation has been installed, drywall hung and work is
progressing on the interior finishes; and
(iv) both townhouses are sold within 24 months of the date of this
Agreement.
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(2) in the event any of the above four conditions are not met, interest shall begin
accruing on the Construction Note retroactively from the Effective Date of this
Agreement at the rate of 5% per annum.
(c) Payment: No monthly payments. Full payment is due upon the earlier of the
expiration of the term, or the sale of both townhouses. In the event Borrower elects to
rent or lease either of the two townhouses in the Project, it shall assign all rental income
to City.
Section 1.3. Use of Construction Loan Proceeds. The Borrower shall use the proceeds of the
Loan solely for the purpose of payment of Approved Costs. "Approved Costs" means:
(a) Amounts actually made or accrued for services, labor and materials utilized to
construct the Project (the "Construction Costs") as set forth on the Construction Budget,
which will be provided to City’s Counsel and as approved by the City;
(b) Fees and charges of the City relating to the Loan (the "City Fees").
Section 1.4. Conditions to Fund the Construction Loan. The City shall be obligated to make
advances under the Construction Loan only if the conditions precedent to funding set forth on
Schedule 2 are met.
SECTION 2
SECURITY
Section 2.1. Documents. To secure payment and performance of the Loan, and all of the
indebtedness owed now or hereinafter owing from the Borrower to the City, the Borrower agrees
to execute and deliver to the City in form and substance acceptable to the City, the following:
(a) A valid and binding first mortgage (the "Mortgage") on the Project and Land.
(b) An irrevocable assignment of (i) the Borrower's interest in all Loan funds held by the
City or Transnation Title whether or not disbursed; (ii) all governmental permits obtained
by or on behalf of Borrower for the construction of the Project; and (iii) all reserves,
deferred payments, deposits, refunds, costs savings and payments of any kind relating to
the construction of the Project.
(c) A valid and binding, enforceable assignment of rents and leases (the "Assignment of
Rents and Leases") with respect to the Project and the Land.
(d) A valid and binding security agreement or agreements (the "Security Instruments")
giving the City a security interest in any and all of the following assets of the Borrower,
including any proceeds thereof, whether now owned or hereafter acquired:
i. All machinery, equipment, furniture and fixtures.
ii. Accounts and accounts receivable.
iii. All other tangible or intangible assets of the Borrower.
(e) The valid and binding guarantees (the "Guarantees") of Gary Post and all other
members of Borrower (the "Guarantors"). The Guarantees will be unlimited as to the
Construction Loan and be a continuing guarantee of the indebtedness and obligations of
the Borrower.
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(f) An assignment of all plans and drawings and specifications for the Project that is
acceptable to the City (the "Assignment of Plans and Specifications "), but which may
only be exercised if Borrower is in default.
(g) An assignment of all contracts for the construction of the Project (the “Assignment of
Construction Contract"), but which may only be exercised if Borrower is in default.
Section 2.2. Definition of Loan Documents. The Commercial Construction Mortgage,
Assignment of Rents and Leases, Security Instruments, Commercial Guaranty, Assignment of
Plans and Specifications, Construction Contract Assignment, Commercial Construction Note the
various assignments and subordination agreements are collectively referred to as the "Loan
Documents".
SECTION 3
INSURANCE
Until the Loan is paid in full and all other obligations of the Borrower under this Agreement are
satisfied, the Borrower shall abide by the insurance requirements contained in Schedule 1,
incorporated herein by reference.
SECTION 4
ENVIRONMENTAL MATTERS
The Borrower represents, covenants, and warrants to the City as follows:
Section 4.1. No Violations or Hazardous Wastes. City and Borrower acknowledge that the
Project is located within an area designated as a Brownfield. At all times since the vesting of
interest to the Project in the Borrower and, to the best of the Borrower’s knowledge after due
inquiry, at all times prior to the vesting of title to the Project in the Borrower there are no and
have been no violations of the relevant environmental laws at the Project and no consent orders
have been entered with respect thereto. There are no and have been no hazardous wastes either
at, upon, under or within, or discharged or emitted at or from, the Project, and no Hazardous
Wastes or Asbestos have flowed, blown, or otherwise become present at the Project from
neighboring land, and no Hazardous Wastes or Asbestos have been removed from the Project.
Soil conditions that were disclosed to governmental authorities prior to the execution of this
Agreement are excluded from the above representation.
Section 4.2. No Claims. The Borrower is not aware of any claims or litigation, and has not
received any communication from any person (including any governmental authority)
concerning the presence or possible presence of hazardous wastes or asbestos at the Project or
concerning any violation or alleged violation of any relevant environmental laws respecting the
Project. The Borrower shall promptly notify the City of any such claims and shall furnish the
City with a copy of any such communications received after the date of this Loan.
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Section 4.3. Notification. The Borrower shall notify the City promptly and in reasonable detail in
the event that the Borrower becomes aware of the presence of hazardous wastes or asbestos or a
violation of any relevant environmental laws at the Project.
Section 4.4. Compliance with Environmental Law. The Borrower shall ensure that the Project
complies and continues to comply in all respects with all relevant environmental laws.
Section 4.5. Remediation. Should the Borrower use or permit the Project to be used or
maintained so as to subject the Borrower or the City or any tenant or user of the Project to a
claim of violation of any relevant environmental laws (unless contested in good faith) the
Borrower shall immediately cease or cause a cessation of such use of operations and shall
remedy and fully cure any conditions arising therefrom, at its own cost and expense.
SECTION 5
INDEMNITY
Section 5.1. Indemnity. The Borrower shall indemnify and hold harmless the City with respect to
any and all claims, demands, causes of action, liabilities, damages, losses, judgments, and
expenses (including attorney fees) incurred in connection with the enforcement of these
indemnities or otherwise that shall be asserted against or incurred by the City by reason of:
(a) Any representation or warranty by the Borrower in this Loan being inaccurate in any
respect.
(b) Any failure of the Borrower to perform any of its obligations under this Loan.
(c) The construction or operation of the Project and its operations unless and until
such time as the City takes title to the Project through foreclosure or a deed in lieu of
foreclosure.
(d) Any past, present, or future condition or use of all or any portion of the Project
(whether known or unknown), other than an "excluded condition or use", including,
without limitation, liabilities arising under any relevant environmental law. An "excluded
condition or use" of any portion of the Project is one that:
(i) does not exist or occur, to any extent, at any time before the Borrower has
permanently given up possession and control of that portion by reason of a
foreclosure of any mortgage or security interest held by the City or a conveyance
or transfer of that portion to the City in lieu of foreclosure and
(ii) was not caused, or permitted to exist, in whole or part, by any act or omission
of the Borrower.
Section 5.2. Indemnity not limiting other Remedies. Indemnification of the City by the Borrower
under this paragraph shall not limit any other right or remedy (including the City’s right to
accelerate payment of the indebtedness) that is available to the City by reason of the
circumstance in respect of which indemnity is made.
Section 5.3. Survival of Indemnity. The Borrower's obligations under this paragraph shall
survive the payment in full of the Loan, foreclosure of the Mortgage or any security interest, and
any conveyance or transfer in lieu of foreclosure, with respect to all or any portion of the Project.
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SECTION 6
DISBURSEMENT OF LOAN PROCEEDS
Section 6.1. Cost Information/Budget. All disbursements will be based upon the Budget. If the
Borrower becomes aware of any changes that would increase the total cost of the Project, the
Borrower shall notify the City in writing and promptly submit a Revised Budget to the City’s
Counsel for its approval. No further disbursements need be made by the City unless and until the
Borrower shows that it has adequate funds to pay for any increase in the total cost of the Project
shown in the revised Budget.
Section 6.2. Disbursement Requests. Upon execution of this Agreement, City shall deposit One
Hundred Thousand Dollars ($100,000) with Transnation Title to be held in an interest bearing
account. All requests for disbursement of Loan amounts shall be made (the "Disbursement
Request") in the form and substance acceptable to Transnation Title and the City not more often
than once each calendar month and at least fifteen (15) days prior to the requested date for the
disbursement. The Disbursement Request shall be accompanied by any invoices, architect's
certificates, sworn statements, waivers of lien, sales receipts, surveys, and other supporting
information requested by Transnation Title and the City. When the balance in the escrow fund
becomes less than $25,000, City will deposit an additional $100,000, to a maximum amount of
$500,000. Any monies left in the escrow account upon completion of the Project or as of March
1, 2015, whichever is sooner, shall be returned to City and credited towards the amount owed by
Borrower.
Section 6.3. Title Insurance. No disbursement shall be made until the City receives a current
endorsement from Transnation Title Company (the "Title Company") insuring the mortgage lien
of the City, without standard exceptions: (a) against construction liens to the extent of all prior
advances plus the full amount of the requested advance; and (b) as the first and paramount lien
on the Land.
Section 6.4. Direct Payment to Contractors. The Borrower irrevocably authorizes Transnation
Title to make payments directly to the contractor, and/or any subcontractor and/or supplier, at
Transnation’s discretion
Section 6.5. Disbursement Without Request. The provisions of this Section shall not in any way
limit the City's ability to advance Loan funds without the Borrower submitting a Disbursement
Request whether upon the occurrence of an Event of Default as hereafter defined, or otherwise,
or to apply any of the Loan proceeds that the City may in its judgment deem prudent to protect
the collateral for the Loan or the priority of the City's security.
Section 6.6. No Waiver. The City's advance of Loan funds without one or more condition(s)
being met shall neither preclude the City from declaring that the failure to satisfy one or more of
the condition(s) as an Event of Default, nor constitute a waiver of such condition(s) with respect
to future advances.
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Section 6.7. Conditions. The City and Transnation shall be under no obligation to honor any
Disbursement Request or otherwise make disbursements of the Loan proceeds unless all
conditions to the advance have been fulfilled in accordance with the terms of this Agreement and
unless the Borrower is otherwise not in default hereunder.
Section 6.8. Adjustment of Loan Amount. If the actual cost for any line item is less than the
amount shown in the Budget, the City shall permit the Borrower to reallocate the reduction to
another Budget category.
Section 6.9. Insufficiency of Loan Proceeds. If the City at any time determines that the amount
of funds available to the Borrower from all sources, including the Loan, is not sufficient to pay
all remaining costs of completing the Project on or before the Completion Date of Construction,
then the City shall not be obligated to make any further advance of Loan funds until such time as
the Borrower has delivered to the City additional funds sufficient to make the remaining Loan
proceeds adequate to complete the Project.
Section 6.10. Casualty Loss. If the Project shall have been damaged by fire or other casualties
and either:
(a) the City shall not have received insurance proceeds sufficient in the City's judgment
to restore the improvements in accordance with the plans; or
(b) such restoration in the City's judgment cannot be performed within a period of time
sufficient for completion of the Project on or before Completion Date of Construction,
then the City shall have no obligation to make any further advance of Loan proceeds
hereunder.
Section 6.11. City Fees, Charges, Interest, Etc. The City may elect, without notice to or further
authorization from the Borrower, to use Loan funds to pay as and when due the City Fees,
release charges under any prior encumbrances on the Project, legal fees and disbursements to the
City's attorneys, or outside counsel, for which the Borrower is obligated, appraisal costs,
environmental fees, searches, recording fees for UCC filing and other security interests, audit
fees, any other expenses in reference to structuring, documenting, closing, monitoring or
enforcing the Loan, and other sums with respect to the Loan ·which may be owing from time to
time by the Borrower to the City.
Section 6.12. Representations and Warranties Remain True. All representations and warranties
from the Borrower to the City contained in this Agreement must remain true at the time of each
advance.
Section 6.13 . No Request for Retainage. No Disbursement Request, except for the request for
the final disbursement, shall apply for any retainage until such time as all contractual
requirements entitling that contractor to retainage have been met in accordance with the contracts
approved by the City.
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SECTION 7
CONDITIONS PRECEDENT TO DISBURSEMENTS
Section 7.1. First Advance. The City shall not be obligated to fund the escrow account and
Transnation shall not be obligated to disburse any Loan proceeds unless all the conditions set
forth in Schedule 2 to this Agreement have been satisfied by the date hereof.
Section 7.2. Subsequent Advances. The City shall not be obligated to fund the escrow account
and Transnation shall not be obligated to disburse any Loan proceeds after the First Advance
unless and until all of the conditions set forth on Schedule 3 of this Agreement have been
satisfied on or before the date requested for the disbursement.
Section 7.3. Final Advance. The City shall not be obligated to fund the escrow account and
Transnation shall not be obligated to disburse the final disbursement of Loan proceeds unless and
until all of the conditions set forth in Schedule 4 of this Agreement have been satisfied on the
date requested for the final disbursement.
SECTION 8
REPRESENTATIONS AND WARRANTIES
The Borrower makes the representations and warranties to the City contained in Schedule 5 of
this Agreement, each of which is incorporated herein by reference.
SECTION 9
AFFIRMATIVE COVENANTS
Until the Loan is paid in full and all obligations of the Borrower under this Agreement are
satisfied, other than the indemnity provisions that survive payment of the Loan, the Borrower
shall abide by the affirmative covenants contained in Schedule 6, which Affirmative Covenants
are incorporated herein by reference.
SECTION 10
NEGATIVE COVENANTS
Until the Loan is paid in full and all obligations of the Borrower under this Agreement are
satisfied, other than the indemnity provisions that survive payment of the Loan, the Borrower
shall abide by the negative covenants contained in Schedule 7, which Negative Covenants are
incorporated herein by reference.
SECTION 11
EVENTS OF DEFAULT
The following are Events of Default under this Agreement:
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Section 11.1. Payment Under Note. If the Borrower shall fail to make any payment under the
Construction Note.
Section 11.2. Loan Document Provisions. If any provision of any of the Loan Documents at any
time ceases to be valid and binding or is declared to be void, or the validity or enforceability
shall be contested, or if any party against whom enforcement could be or is being sought denies
that it has further liability or obligation under the documents.
Section 11.3. Failure to Perform. If the Borrower shall fail to pay and to perform any obligation
of the Borrower under this Agreement or any of the Loan Documents for a period often ten (10)
days after receipt of written notice from the City.
Section 11.4. Guaranty. If any Guarantor shall breach or fail to perform any requirement of
his/her Guarantee or shall withdraw such Guarantee and the Borrower shall not have provided a
substitute Guarantor satisfactory to the City within fifteen (15) days after such event.
Section 11.5. Liens. If any liens for materials or taxes (except for ad valorem taxes not yet due
and payable) or other liens filed against the Project remain unsatisfied or unbonded for a period
of thirty (30) days after the date of the filing.
Section 11.6. Lawsuits. If, after the date hereof, any suit is filed, judgment entered, or settlement
made by or against the Borrower or any Guarantor requesting or granting relief with an
economic value exceeding fifty (50%) percent of the Borrower's net worth or twenty-five (25%)
percent of any Guarantor's net worth, which is not covered by insurance and with respect to
which there is a reasonable likelihood that an adverse determination or the judgment or
settlement could be expected to materially impair the ability of the Borrower or Guarantor(s) to
perform their respective obligations under this Agreement, the Guarantees, and the other Loan
Documents; and, with respect to any Guarantor, the Borrower shall not have provided a
substitute Guarantor satisfactory to the City within fifteen days after such event.
Section 11.7 Bankruptcy. If a levy is made under any process or either the Borrower or any
Guarantor shall file a voluntary petition in Bankruptcy under the United States Code as amended
from time to time, or an Order for Relief shall be issued against the Borrower or any Guarantor
under the Code or either the Borrower or Guarantor shall file a petition or answer seeking or
acquiescing in any reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief for the Borrower or Guarantor under present or future Federal, State
or other statute, law or regulation relating to Bankruptcy, insolvency, or other relief for debtors;
if a receiver or trustee for the Project or any other property of the Borrower or Guarantor is
appointed and not discharged within thirty (30) days; or if either the Borrower or any Guarantor
makes an assignment for benefit of creditors or admits in writing its inability to pay debts; or if
either the Borrower or any Guarantor arc adjudged insolvent by any Federal, State or other Court
of competent jurisdiction; or if any attachment or execution is levied against a substantial portion
of the property of either the Borrower or Guarantor if not discharged within thirty (30) days.
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Section 11.8. Completion. If the Borrower has failed to satisfy all of the conditions to the City's
obligation to make the Final Disbursement under the Agreement on or prior to the Completion
Date of Construction.
Section 11.9. Damage or Destruction. If the Project is partially or totally damaged by fire or
other cause to such an extent that the Project cannot in the City's reasonable judgment be
expected to be completed on or before the Completion Date of Construction.
Section 11.10. Representations and Warranties Untrue. If at any time any representation,
warranty or statement made by the Borrower or any Guarantor contained in this Agreement or
any other Loan Documents shall be incorrect or misleading in any material respect when made or
shall fail to continue to be true at any time until the Loan is repaid in full.
Section 11.11. Construction Contract. If the Borrower is in default under any contract for
construction and such default is not cured within twenty (20) days after the date of the default.
SECTION 12
REMEDIES
Section 12.1. City's Remedies. If an Event of Default occurs, the City, at its option, in addition to
all other remedies which may be available, whether at law, in equity or otherwise, may
immediately exercise anyone or more of the following remedies until the Default is cured:
(a) Declare all or any part of the outstanding principal and interest under the Loan to be
immediately due and payable, along with all or any part of the other amounts owing to
the City hereunder or under any or all of the other Loan Documents, which shall be due
and payable, without presentment, demand or protest.
(b) Withhold advances under the Loan.
(c) Terminate its obligation to make any further advances under the Loan except such as
the City may elect to make in its sole discretion.
(d) Take all or any action necessary or appropriate to preserve and protect the Project and
any other security for the Loan, including employment of watchmen and the erection of
fences and barricades, all at the cost of the Borrower.
(e) Exercise any one or any combination of the rights and remedies provided herein or in
any other Loan Document or as provided at law or in equity, including the appointment
of a receiver.
(f) Whether or not the Loan is due and payable or the City has instituted any foreclosure
or other action for the enforcement of any of the Loan Documents, the City may:
(i) enter upon the Project and complete the improvements in accordance with the
Plans and Specifications therefor with such changes therein as the City may deem
appropriate;
(ii) at any time discontinue any work commenced in respect to the Project or
change any course of action undertaken by it and not be bound by any limitations
or requirements of time, whether set forth herein or otherwise;
(iii) assume or in the name of the Borrower continue any contract made by the
Borrower in any way relating to the Project and use all or any part of the labor,
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materials, supplies or equipment contracted for by the Borrower, whether or not
previously incorporated into the Project; and
(iv) in connection with any construction of the Project and undertaken by the City
pursuant to the provisions of this subparagraph, engage or continue contract with
builders, contractors, architects, engineers and others for the purpose of furnishing
labor, materials and equipment and services pay, settle or compromise all bills or
claims which may become liens against the Project, or which have been or may be
incurred in any manner in connection with completing the Project or for the
discharge of liens, encumbrances or defects in the title of the Project, and take or
refrain from taking such action hereunder as the City may from time to time
determine in its sole discretion,
(g) Take all or any action necessary or appropriate to obtain a deed to Borrower for the
Land. The Borrower shall be liable to the City for all costs paid or incurred hereunder or
paid or incurred to construct and equip the Project, whether the same are paid or incurred
pursuant to the provisions of this subparagraph or otherwise, and all payments made or
liabilities incurred by the City hereunder of any kind whatever shall be paid by the
Borrower to the City upon demand with interest at the default rate as provided in the Note
from the date of payment by the City to the date of payment to the City and shall be
secured by the Loan Documents. The powers granted herein are for security and are
irrevocable, and the Borrower irrevocably constitutes and appoints the City its attorney-
in-fact to execute, acknowledge and deliver any instruments and to do and perform any
acts in the name and on behalf of the Borrower in connection herewith.
Section 12.2. Waiver: Remedies Cumulative. No failure or delay on the part of the City in
exercising any right, power or remedy hereunder or provided for by any of the Loan Documents
or instruments evidencing, securing or otherwise relating to the Loan shall operate as a waiver
thereof. No single or partial exercise by the City of any right or remedy shall preclude other or
further exercise thereof or the exercise of any other right or remedy; all rights and remedies shall
be deemed cumulative.
SECTION 13
GENERAL PROVISIONS
Section 13.1 Governing Law. This Agreement and the rights and obligations of
the parties hereunder shall be governed and interpreted in accordance with the laws of the State
of Michigan that are applied to contracts made and to be performed in that state.
Section 13.2. Relationship of Parties. The City and the Borrower acknowledge that the
relationship between them created hereby and by the other Loan Documents is that of creditor
and debtor and is not intended to be and shall not in any way be construed to be that of a
partnership, a joint venture, or principal and agent; and they further acknowledge that any control
of or supervision over the construction or operation of the Project by the City or the
disbursement of any Loan proceeds to anyone other than the Borrower shall not be deemed to
make the City a partner, a joint venturer, a principal, or an agent of the Borrower, but rather shall
be deemed to be solely for the purpose of protecting the City's security for the indebtedness of
the Borrower to the City. The City has no fiduciary responsibility to the Borrower. The City does
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not undertake any responsibility to the Borrower to review or inform the Borrower of any matter
in connection with any phase of the Borrower's business or operations. The Borrower shall rely
entirely upon its own judgment with respect to its business, and any review, inspection,
supervision, or information supplied to the Borrower by the City is for the protection of the City
and neither the Borrower nor any third party is entitled to rely thereon.
Further, Borrower expressly agrees and acknowledges that approval by City of disbursements
does not constitute approval of any governmental function or entity, including but not limited to
approval of building permits, code compliance, occupancy, or any other approval that Borrower
is obligated to obtain.
Section 13.3. No Third Party Beneficiaries. The parties hereto have entered into this Agreement
only for their respective benefits and this Agreement is not intended to, nor shall it create rights
in anyone not a party hereto.
Section 13.4. Captions. The titles to the various sections of this Agreement are inserted only for
the convenience of the parties and are in no way to be construed as limiting or expanding the
content of the paragraphs to which they refer.
Section 13.5. Parties Bound. This Agreement shall be binding upon and shall inure to the benefit
of the Borrower and the City and their respective heirs, successors and assigns.
Section 13.6. Assignment by City. The City may assign its rights and interest or any part thereof
in this Agreement and all documents and instruments executed pursuant hereto at any time
following the completion of construction of the Project without the consent of the Borrower. The
City shall provide the Borrower with thirty (30) days notice of any such assignment.
Section 13.7. Notices. Any and all notices required under this Agreement shall be in writing, and
shall be served either personally or by certified mail, return receipt requested, with postage
thereon fully prepaid, addressed to the parties at their addresses set forth above or such other
place or places as either party shall designate by written notice served upon the other party.
Section 13.8. City's Conditions. All conditions of the obligation of the City to make
disbursements hereunder are imposed solely and exclusively for the benefit of the City and its
assigns and no other person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that the City will refuse to make
disbursements in the absence of strict or substantial compliance with any or all thereof, and no
other person shall, under any circumstances, be deemed to be a beneficiary of such conditions or
of this Agreement, any or all of which may be freely waived in whole or in part by the City at
any time if the City, in its sole discretion, deems it advisable to do so.
Section 13.9. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which together shall comprise a single
instrument.
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Section 13.10. Severability. If any provision of this Agreement or the application thereof to any
person, entity, or circumstance shall be invalid or unenforceable to any extent, the remainder of
this Agreement and the application of such provision to any other person, entity, or circumstance
shall not be affected thereby and shall be enforced to the greatest extent permitted by law.
Section 13.11. Amendments. Neither this Agreement nor any provisions hereof or in any of the
Loan Documents may be changed, waived, discharged, or terminated orally, but only by an
instrument in writing signed by both parties.
Section 13.12. Time of the Essence. Time is of the essence under this Agreement.
Section 13.13. Relation to Loan Commitment. The terms of this Agreement and the Note
supersede any inconsistent terms of the City's Construction Loan commitment to the Borrower;
provided, that all obligations of the Borrower under the commitment to pay any fees to the City
or any costs and expenses relating to the Loan or the commitment shall survive the execution and
delivery of this Agreement and the Note, and any failure of the Borrower to perform any of those
obligations shall constitute a default under this Agreement. The meaning of the terms used in any
schedule or exhibit are the same as set forth in this Agreement.
Section 13.14. Execution and Delivery of Term Note/Term Loan Documents. This Agreement
shall survive the execution and delivery of, and shall govern the Note and the Loan Documents.
BORROWER:
Heritage Square Development LLC
________________________________
By: Gary Post
Its: Manager
Date:____________
CITY:
City of Muskegon
________________________________
By: Stephen Gawron
Its: Mayor
Date:____________
________________________________
By: Ann Marie Cummings
Its: City Clerk
Date:____________
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SCHEDULE 1
INSURANCE REQUIREMENTS
Section 1. Insurance. Unless waived in writing by the City, the Borrower shall maintain the
following insurance policies issued on forms and by companies satisfactory to City:
(a) All risk builders risk insurance during the construction of the Project in an amount
equal to 100% of the replacement cost of the Project providing all risk coverage on the
Project and materials stored on the Property and elsewhere, and including the perils of
collapse, damage resulting from error in design or faulty workmanship or materials, and
water damage;
(b) All risk insurance after the completion of the Project, as determined by City, in the
amount of at least 80% of the replacement cost of the Project or in such additional
amounts as are necessary to keep the Borrower from being a co-insurer or City may
otherwise require, providing all risk coverage on the Project, and, if requested by City, to
include the perils of flood, earthquake, business interruption and other risks;
(c) Comprehensive General Liability Insurance for owners and contractors, including
blanket contractual liability, products and completed operations, personal injury
(including employees), independent contractors, explosion, collapse and underground
hazards for not less than $3,000,000.00 arising out of any one occurrence or in any
increased amount required by City.;
(d) Comprehensive Automobile Liability Insurance for contractors in amounts not less
than carried by the industry generally for bodily injury and for property damage;
(e) Workers' Compensation Insurance for contractors for statutory limits; and
(f) Such other insurance as City may reasonably require.
Section 2. Loss Payable to City. All risk Insurance Policies shall have loss made payable to City
as mortgagee together with the standard mortgagee clause endorsement.
Section 3. Notice of Cancellation. All insurance policies shall have a provision giving City a ten
(10) day prior written notice of cancellation or material change of the coverage.
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SCHEDULE 2
CONDITIONS PRECEDENT TO FIRST ADVANCE
The following are the requirements of Section 7.1 of the Agreement:
Section 1. Compliance with Agreement. The Borrower shall present evidence to the City that the
Borrower is in compliance with the Agreement, including but not limited to, disbursement
procedures contained in Section 6.
Section 2. Receipt of Documents. Unless waived in writing by the City, the following documents
shall be duly executed by authorized persons and delivered to the City in form and substance
acceptable to the City:
(a) Executed Counterparts of the Construction Loan Agreement
(b) The Note
(c) The Mortgage shall have been recorded
(d) The Security Agreement shall have been perfected
(e) Pledge of the Disbursement account
(f) The Guarantees
(g) Articles of Organization certified by the Department of Licensing and
Consumer Affairs, State of Michigan
(h) Good Standing Certificate issued by the Department of Licensing and
Consumer Affairs, State of Michigan
(i) Operating Agreement of the Borrower certified by a Member of the
Borrower certifying that the same is true, correct and complete
(j) Borrower authorization of individual(s) executing documents
(k) Budget acceptable to the City
(l) Intentionally deleted
(m) Intentionally deleted
(n) Construction Contract, original executed counterpart as shown in the Budget, and
Assignment
(o) Intentionally deleted
(p) Site Plan approval
(q) Verification of zoning compliance
(r) Building permit
(s) Evidence of Compliance with the Construction Lien Law including a Notice of
Commencement and Designee Affidavit.
(t) Intentionally deleted
(u) Evidence of receipt of all applicable licenses
(v) Satisfactory pre-construction review by Safebuilt
(w) Certificate(s) of Insurance indicating the Project is covered as required
(y) Such other documents, certificates, and instruments that may be reasonably requested
by the City.
Section 3. Tax and Insurance Escrow Account. An account has been established for the purpose
of escrowing tax and insurance payments for the Project, if required.
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SCHEDULE 3
CONDITIONS PRECEDENT TO SUBSEQUENT ADVANCES
The following are the requirements of Section 7.2 of the Agreement:
Section 1. Satisfaction of Conditions. All conditions precedent to the First Advance shall have
been satisfied.
Section 2. Confirmation of Budget. The Borrower shall confirm that the Budget as approved by
the City continues to fairly represent the total costs of the Project or submit a Revised Budget to
the City for approval.
Section 3. City Fees. The City's Fees shall be current.
Section 4. Representations and Warranties Remain True. The Borrower shall confirm that the
representations and warranties contained in Schedule 5 remain true on the date of the request.
Section 5. No Default. No Event of Default shall then exist.
Section 6. Disbursement Request Submission. The Borrower shall submit a Disbursement
Request and required supporting information.
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SCHEDULE 4
CONDITIONS PRECEDENT TO FINAL ADVANCE
The following are the requirements of Section 7.3 of the Agreement:
Section 1. Conditions Satisfied. All conditions precedent to previous advances shall have been
satisfied.
Section 2. Certificate of Occupancy Issued. The Borrower shall have received and provided the
City with evidence of the issuance of a final and unconditional Certificate of Occupancy for the
Project, including both townhouses individually.
Section 3. Evidence of Project Approval. The Borrower shall have received and provided the
City such other evidence of approval of the Project by such Governmental authorities as
applicable.
Section 4. Evidence of Completion of Project. The Borrower shall provide the City with
evidence of the completion of Project substantially in accordance with Plans, which evidence
shall include, but without limitation, the following:
(a) General Contractor's Affidavit and Indemnity certifying that: (i) the Project has been
completed in accordance with the Plans and the Construction Contract, specifically
including the installation of sidewalks on all of Borrower’s property on Clay Avenue, (ii)
upon receipt of the amount requested in the Final Disbursement for the General
Contractor, the Contractor will have received in full, all payments under the Construction
Contract, and all other requirements under that Contract will have been satisfied, (iii) it
waives and releases all claims which the Contractor may have against the Borrower, (iv)
it indemnifies the Borrower against all damages, costs, liens or losses relating to any
claim for compensation by any party for work that was done for or material supplied to
the Contractor, and (v) it has fully paid for all labor, materials and equipment provided to
it in connection with its work on the Project.
(b) Copies of all permits that were necessary for the development of Project and the
subsequent use of the Project.
(c) Proof that (i) the Project has been connected with all utilities necessary for its use and
operation, including without limitations, sanitary and storm drainage, sewer, gas,
electricity, telephone and water, (ii) all connection fees payable with respect to the
utilities have been paid in full, and (iii) all such utilities enter the Project from public
streets or easements or from duly recorded private perpetual easements that are for the
benefit of and run with the Land.
(d) A complete set of as-built Plans.
(e) Lien waivers from the Contractors and any sub-contractor that furnished materials or
labor for the Project and such other documentation sufficient to ensure that there are no
mechanic's-material liens with respect to the Project.
(h) Certificate of insurance confirming coverage with hazard insurance, including
business interruption or rental loss, as applicable, and Fire insurance with extended
coverage on the completed Project.
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(f) Borrower's Affidavit certifying that all requirements of the Agreement for this Final
Advance have been met.
Section 5. Evidence of Costs. Interest. and Fees. The Borrower shall have provided the City with
invoices, receipts and other evidence satisfactory to the City that all indirect costs of the Project
that are approved, Costs of Construction or City Fees have been paid.
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SCHEDULE 5
REPRESENTATIONS AND WARRANTIES
The Borrower hereby makes the following Representations and Warranties to the City, as
required by Section 8 of the Agreement.
Section 1. Borrower's Authority. The Borrower is a limited liability company organized and
validly existing in good standing in the State of Michigan, has the power and authority to own its
assets and to carry out its business as now being conducted, and has the power and authority to
execute and deliver, the Note and the other Loan Documents and to do any and all other things
required of it under this Agreement.
Section 2. Authorization of Loan Documents. The execution, delivery, and performance of this
Agreement, the Note and the other Loan Documents have been duly authorized by requisite
corporate action, are not in conflict with the Borrower’s Operating Agreement, or of any
undertaking to which the Borrower is a party or by which the Borrower is bound or any
restriction, law, order, regulation, judgment, decrees, agreement, or instrument to which the
Borrower is a party or by which the Borrower is bound and will not result in the creation or
imposition of any liens or encumbrances upon the Borrower's property or assets other than as
contemplated by this Agreement.
Section 3. Enforceability of Loan Documents. Each of the Loan Documents is the legal valid and
binding obligation of the Borrower enforceable against the Borrower in accordance with therein
respective terms, except as may be limited by Bankruptcy, insolvency, reorganization,
moratorium or other similar laws and equitable principles of general application. The
Guarantee(s) is/are the legal valid and binding obligation(s) of the Guarantor(s) enforceable
against the Guarantor in accordance with the terms of the Guarantee(s).
Section 4. Enforceability of Construction Documents. The Construction Contract is in full force
and effect and has not been amended, modified or terminated. The Borrower is not in default in
the performance of its obligations under either the Architect's Agreement or the Construction
Contract.
Section 5. Title to Real Estate. Borrower owns good and marketable fee simple title to the Land
as evidenced by the insurance issued by the Title Company free and clear of all liens and
encumbrances whatsoever other than the Lien and security of the Loan Documents.
Section 6. No Litigation Pending. To the knowledge of the Borrower, there is no action suit,
proceeding or investigation at law or in equity before any court or administrative agency or
public body pending, threatened against or affecting the Borrower or any Guarantor, nor is there
any basis therefor, except as listed on the attachment; provided however, that any such litigation
will (i) not materially adversely affect the financial condition of the Borrower or any Guarantor
or the ability or power of the Borrower to perform the Borrower's obligations under this
Agreement or any Guarantor's obligations under a Guarantee or (ii) affect the validity or
enforceability of this Agreement, the Note, or the other Loan Documents.
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Section 7. Financial Condition. All financial statements, loan applications, and other documents
which have been submitted to the City in connection with the Loan, including without limitation
the financial statements of the Borrower, its General Partner, the Guarantors and tenants under
any lease, are true, complete, and correct, and, since the dates of such statements, applications,
and documents, there have been no changes in the business, prospects, profits, properties, or
condition (financial or otherwise) of the Borrower or the Guarantors which individually or in the
aggregate have been or are likely to be materially adverse to the financial condition of the
Borrower, any Guarantor, or such tenants or the ability of the Borrower to perform obligations
under this Loan Agreement. Such financial statements, applications, and documents do not
contain any untrue statement of material fact or omit any material fact necessary to make the
statements contained therein not misleading.
Section 8. Compliance with Construction Agreements. The Project has been or will be
constructed in a manner that conforms with all applicable zoning, planning. building, and other
laws and ordinances and regulations of governmental authorities having jurisdiction over the
Project; the Project abuts or has access or permanent easements to public roads; all utilities
necessary to the construction and operation of the Project are available; the Borrower has
obtained all requisite regulatory zoning, planning, building and environmental and other permits
necessary for the construction of and the use contemplated for the Project.
Section 9. Taxes. The Borrower has no unpaid taxes which have become delinquent on or before
the date of this Agreement.
Section 10. Default. No Event of Default exists under this Agreement and no event has occurred
and is continuing that with notice or lapse of time or both would constitute an Event of Default
under this Agreement the Note or the Loan Documents.
Section 11. Construction Costs and Funds. The estimated costs of completing the Project set
forth in the Budget are in all respects accurate and complete.
Section 12. Ownership of Borrower. The Borrower has provided the City with evidence which
accurately describes the ownership of the Borrower and outstanding options and warrants to
purchase interests in the Borrower.
Section 13. Contingent Liabilities. The Borrower has not guaranteed, endorsed, assumed, or
otherwise become liable for the obligations of any other person, firm or corporation.
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SCHEDULE 6
AFFIRMATIVE COVENANTS OF BORROWER
The Borrower shall abide by the following covenants, as required in Section 9 of the Agreement.
Section 1. Maintain Existence in Good Standing. The Borrower shall maintain its existence in the
State of Michigan and its qualification and good standing in every other jurisdiction wherein the
failure to do so would affect the validity or enforceability of this Agreement, the Note, Mortgage
and Security Agreements required to be given by the Borrower hereunder, or would have a
material adverse impact on the financial condition, business or operations of the Borrower;
continue to conduct and operate its business substantially as presently conducted and operated;
and comply with all governmental laws, rules, regulations and orders applicable to it the failure
to comply with which would have a material adverse effect on the financial condition, business,
or operations of the Borrower or would affect the validity or enforceability of this Agreement,
the Note, Security Agreements, Mortgage or other documents required to be given by the
Borrower hereunder.
Section 2. Construction. The Borrower will apply for all permits within thirty (30) days of the
date of execution of this Agreement and break ground on construction not later than ninety (90)
days after the date of this Agreement and thereafter diligently pursue construction to completion.
All construction shall be in compliance with the Plans and Specifications approved by the City,
specifically including the installation of sidewalks on all of Borrower’s property on Clay
Avenue. The construction shall be entirely on the Land and will not impermissibly encroach
upon or overhang any easement, right-of-way or land of others. Borrower shall construct
sidewalks on all appropriate frontage of the Project. The City encourages Borrower to seek bids
from minority and women contractors for all facets of the Project.
Section 3. Use of Proceeds. The Borrower shall use the Loan proceeds provided by City solely
for the purpose of paying the Approved Costs set forth in the Budget.
Section 4. Additional Funds. If at any time during the term of the Construction Loan, the City
deems the amount available for construction will not be sufficient to complete the Project in
accordance with the Plans, to pay interest on the Loan and other sums due under the Loan
Documents, or if the City determines the Borrower has or will experience a cost over-run in any
category on the Budget, that is not offset by reductions in other categories, then the Borrower
shall within (l0) ten days after notice from City deposit in the Disbursement Account such sums
as City may require to remedy the condition.
Section 5. Soil Tests. The City shall be entitled, but not be obligated to conduct from time to
time such soil tests, at the sole cost to the City, on the Land as it may determine is necessary or
appropriate.
Section 6. Additional Documents. The Borrower agrees upon the request of City to execute any
additional documents including but not limited to Security Agreements on any personal property
owned by the Borrower included or to be included in the Project as may be required by City to
confirm the lien of the Mortgage or other agreement securing the Loan.
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Section 7. Changes in Plans. Work. Contracts. The Borrower will obtain the City's prior written
approval, which may be withheld in the City's discretion, of (i) any change in the Plans that
might adversely affect the value of the Project or result in a change in work and/or materials that
causes the Budget to be increased; (ii) changes in the terms and conditions of the Contractor's
Agreement; (iii) changes in any contract or other agreement relating to the Project that adversely
affect the economic value of the Project. The City will have a reasonable time to evaluate
requests for approval of any changes. The City may approve or disapprove changes in its
discretion. In addition to giving its approval, the City may require the Borrower to deposit
additional funds in the Disbursement Account to cover anticipated increased costs resulting from
the change.
Section 8. Inspections. The Borrower will allow the City and its agents at all times to inspect the
Project during the course of construction and the right to examine, copy and audit books, records,
accounting data and any other documents of the Borrower and its contractors relating to the
property or construction of the Project. If the City determines in good faith that any work or
materials do not conform to the Plans or are not in accordance with the requirements of this
Agreement, the Borrower shall cause the work to be stopped at the City's request and the City
may withhold funding the escrow account until the matter is corrected. The Borrower shall
promptly correct the work to the City's satisfaction. The City is under no duty to supervise or
inspect the construction or to examine any books or records but may do so solely for the purpose
of protecting its security and preserving its rights under this Agreement. No default of the
Borrower will be waived by any inspection by the City, nor shall any such inspection impose
upon the City any obligation that the work has been or will be in compliance with the Plans and
this Agreement or that the construction is free from defective materials or workmanship.
Section 9. Permits. The Borrower will comply, or caused to be complied with, and keep in effect
all permits and approvals necessary for construction of the Project and with all existing and
future laws, regulations, orders and requirements of governmental or other authorities having
jurisdiction over the Project.
Section 10. Payment for Labor and Materials. The Borrower will promptly pay and discharge all
claims and liens for labor, materials and services furnished in connection with the construction of
the Project. The Borrower will have the right to contest, in good faith, any claim or lien provided
that the Borrower does so diligently without prejudice to the City's position. Upon the City's
request, the Borrower will provide a bond, cash deposit or other security reasonably satisfactory
to the City to protect the City's interest and security in the Project should a contest be
unsuccessful.
Section 11. Insurance. The Borrower will maintain in force, until the Loan is paid in full, all
insurance required by law and the City, including public liability and builder's risk insurance,
under policies approved by the City as to amounts, form, risk, coverage, deductibles, insurer, loss
payable and cancellation provisions.
Section 12. Payment of City's Expenses and Fees. The Borrower will pay all of Transnation
Title’s and the City's costs and expenses incurred in connection with the making of
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disbursements under the Loan or any exercise of any of the City's rights or remedies under this
Agreement and the Loan Documents, including but not limited to, fees for audits and
inspections, escrow charges, recording charges, legal fees in connection with the making and
administering the Loan, and reasonable fees and costs for services not customarily performed by
City's employees.
Section 13. Accounting for Project Costs. The Borrower will keep true and correct books and
records on a cash basis for the construction of the Project and will maintain adequate reserves for
contingencies. The Borrower will submit to the City at the time of each draw request a statement
that accurately shows the application of all funds expended to date for the construction of the
Project, the source of those funds and the Borrower's best estimate of funds needed to complete
the Project.
Section 14. Annual Financial Reports. Until the Loan is repaid, within thirty (30) days after
filing, the Borrower shall deliver to the City annual IRS tax returns of the Borrower and the
Guarantors. The Borrower shall deliver affidavits in a form satisfactory to the City that the
financial condition of the Borrower and its Member(s) has not deteriorated from the condition as
of the date of this Agreement. Such information shall be exempt from disclosure pursuant to
MCL 15.243, and City promises to keep such information confidential.
Section 15. Examination of Records. In order to facilitate the determination of costs incurred in
connection with the Project and the Borrower's compliance with the Loan Documents, the
Borrower shall maintain accounting records for the construction of the Project and the
subsequent operation of the property separate from the general accounting records the Borrower
will maintain in connection with its general business activities or other investments. The
Borrower agrees the City may have access to and the right to examine all records of the
Borrower which relate directly or indirectly to the Project.
Section 16. Notice of Event of Default. The Borrower will promptly notify the City of any
occurrence which constitutes an Event of Default as defined in the Agreement, or which with
notice or the passage of time or both would constitute an Event of Default, and of any other
occurrence which materially affects the Project or the Borrower's financial condition adversely or
the Borrower's ability to comply with its obligations under this Agreement.
Section 17. Taxes. etc. The Borrower shall promptly pay and discharge all taxes, assessments
and other govemmenta1 charges or levies lawfully imposed upon the premises or any goods,
chattels or other personal property owned by the Borrower and located on the premises or with
respect to the Project.
Section 18. Notice of Furnishings. The Borrower will provide a Notice of Commencement and
all Notices of Furnishing to Transnation Title Company.
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SCHEDULE 7
NEGATIVE COVENANTS OF BORROWER
As required in Section 10 of the Agreement, the Borrower agrees that it will not, without prior
written consent of City:
Section 1. Liens. Create or permit to exist any lien, mortgage, pledge or other encumbrance on
any of its machinery, furniture, fixtures or equipment now owned or hereafter acquired by
Borrower, and located on the Properly or buildings now owned or hereafter acquired and located
on the Property, except liens for taxes not delinquent or being contested.
Section 2. Sale of Assets. Sell, lease or otherwise dispose of any of its assets except in the
ordinary course of business.
Section 3. Loans. Make loans or advances to any person or corporation other than in the normal
course of business.
Section 4. Guarantees. Guarantee, endorse, assume or otherwise become liable for the
obligations of any other person, firm or corporation except by the endorsement of negotiable
instruments for deposit or collection in the ordinary course of business.
Section 5. Acquire Stock or Membership Interest. Purchase or otherwise acquire the obligations
or the capital stock or membership interest of any other interest in any person, firm or
corporation.
Section 6. Borrow Money. Borrow money from any source other than City.
Section 7. Merger. Consolidation. etc. Enter into any merger, consolidation, reorganization,
recapitalization, or acquire control of all or substantially all of the assets of any other persons,
firm or corporation.
Section 8. Subordinate Debt. Subordinate any indebtedness owing to Borrower by any person,
firm or corporation to indebtedness of such person, firm or corporation owing to any other
person, firm or corporation.
Section 9. Redeem Membership Interests. Purchase, redeem or otherwise retire or make any
other distribution of its assets, by reduction of capital or otherwise, in respect of any of its capital
Membership Interests, other than to provide funds to enable the Members to pay any income tax
due on the net income of the Borrower.
Section 10. Distributions. Make distributions to Members at any time that Borrower is in default.
Section 11. Change in Management. Change the Manager of the Borrower.
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Section 12. Single Asset Borrower. Acquire any real or personal property other than the Project
and Land, and personal property related to the operation and maintenance of the Project and
Land; operate any business other than the management and operation of the Project and Land;
and maintain its assets in a way difficult to segregate and identify.
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Exhibit A
Legal Description
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Exhibit B
Construction Budget
To Be Provided to City’s Counsel and Maintained as a Confidential Document
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CITY COMMISSION MEETING DATE
June 24, 2014
Date: June 16, 2014
To: Honorable Mayor and City Commissioners
From: Cathy Brubaker-Clarke, Director of Community &
Economic Development
Re: Farmer’s Market Rentals
SUMMARY OF REQUEST: City staff would like to allow public rental of certain areas of
the new Farmer’s Market facility. The proposed rental rates are shown on the attached
2014 Farmer’s Market Rental Rate Sheet. There would be 5 separate areas of the Farmer’s
Market available for rent as shown on the Farmer’s Market site map.
Staff is requesting approval of the rental rates listed.
FINANCIAL IMPACT: Facility rental would generate additional income for the market.
BUDGET ACTION REQUIRED: None
STAFF RECOMMENDATION: Staff recommends approval of the rental rates, and
incorporation of the rates into the City’s fee schedule. Staff also recommends that the
Commission authorize staff to negotiate in-kind services in lieu of a portion or all of the
rental fee, when appropriate.
COMMITTEE RECOMMENDATION: N/A
CITY OF MUSKEGON
2014 FARMERS MARKET RENTAL
RATE SHEET
Rental Rate
Facility Descriptions: (per session):
Facility A (all-season vending area) – $250.00
• Indoor facility with large garage doors opening to the outside
• Capacity of indoor area is 150 people. More can be accommodated
when the facility overhead doors are open.
• Outdoor Market stalls numbered 68 – 101 (33 market stalls)
• West restrooms (2 women’s units, 2 men’s units)
• Optional: Stage (add $50.00)
Facility B (large L) – $250.00
• Outdoor Market stalls numbered 27 – 89 (62 market stalls)
• North restrooms (2 women’s units, 2 men’s units)
• Optional: Stage (add $50.00)
Facility C (small L) – $250.00
• Outdoor Market stalls numbered 117 – 164 (47 market stalls)
• West restrooms (2 women’s units, 2 men’s units)
• Optional: Stage (add $50.00)
Facility D (Morris Street pad) – $100.00
• Outdoor Market stalls numbered 1 – 26
Stage – Outdoor covered stage area near Facility C $ 50.00
Rental Session Times:
Facilities A – D: Session I Session II
9:00 a.m. - 3:00 p.m. 4:00 p.m. – 10:00 p.m.
Stage (4 hour blocks): 9:00 a.m. – 1:00 p.m.
1:30 p.m. – 5:30 p.m.
6:00 p.m. – 10:00 p.m.
Damage Deposit Required*: With facility restroom access $500.00
Without facility restroom access $250.00
*see Farmers Market Rental Inspection Checklist for items to be completed for return of deposit
NOTE: If you rent an area without access to Farmers Market facility restrooms, you must provide portable
toilet facilities. Contact Kerkstra/Fresh Start at (231) 788-4215 and request the City of Muskegon Farmer’s
Market rate. Fresh Start is the only approved portable toilet vendor for the Market. Other vendors may not be
used.
FARMERS MARKET SITE MAP / FACILITY LOCATIONS
COMMISSION DATE: 06/24/2014
DATE: 06/17/2014
TO: Honorable Mayor and Commissioners
FROM: Jeffrey Lewis, Director of Public Safety
RE: Concurrence with the Housing Board of Appeals Notice and Order to
Demolish. Dangerous Building Case #: EN130264
SUMMARY OF REQUEST: This is to request that the City Commission Concur with the
findings of the Housing Board of Appeals that the structure located at 254 MONROE
AVE is unsafe, substandard, a public nuisance and that it be demolished within thirty
(30) days. It is further requested that administration be directed to obtain bids for the
demolition of the structure and that the Mayor and City Clerk be authorized and directed
to execute a contract for demolition with the lowest responsible bidder.
Case# & Project Address: # EN130264 - 254 MONROE AVE
Location and ownership: This structure is located on Monroe Ave. between 4th and 3rd
Streets and is owned by WILLIAMS TROY E.
Staff Correspondence: A dangerous building inspection was conducted on 10/22/2013
& 4/3/2014. The Notice and Order to Repair was issued on 3/19/2014. On 5/01/2014
the HBA declared the structure substandard and dangerous.
Financial Impact: CDBG Funds
Budget action required: None
State Equalized value: $ 16,900
Estimated cost to repair: $ 35,000
Staff Recommendation: To concur with the Housing Board of Appeals decision to
demolish.
Additional Information (History):
Owner Contact:
Prior owner (Chez-Moi Bridge Center):
N&O Mailing = Signed by Suleyman Cotal
HBA Notice = Signed by Suleyman Cotal
Current owner (Troy Williams):
New Owner letter & HBA meeting letter were mailed together = Signed by Troy
Williams.
Permits obtained:
None having to do with the necessary repairs from the Dangerous Building List.
The interior pictures were provided by Kirk while performing an interior inspection on 4/3/2014
(defect list is on the next page).
If you disagree with the decision of the City Commission, you have the right to file a
petition for superintending control in the Circuit Court for the County of Muskegon within 21
days after the City Commission concurs.
CITY OF MUSKEGON
CODE COMPLIANCE DEPARTMENT
933 TERRACE ST STE 202
MUSKEGON, MI 49440
(231) 724-6702 (Office)
(231) 724-6790 (Fax)
DANGEROUS BUILDING REPORT
254 MONROE AVE
10/22/2013
Inspection noted:
Exterior items only:
1) Whole Dwelling has peeling paint
2) Broken/boarded windows
3) Windows have deteriorated glazing
4) Foundation has Peeling Paint
5) Roof is Deteriorated
6) Chimney is deteriorated
7) West side door in need of repair
8) Threshold is rotted
9) Basement windows are missing/boarded
10) Rear eaves are missing
11) Rear windows is missing/boarded
12) Bottom Trim is rotted
13) Open sewer clean out
14) Tree limbs are impeding the house.
BASED UPON A RECENT INSPECTION OF THE ABOVE PROPERTY, IT HAS BEEN
DETERMINED THAT THE STRUCTURE MEETS THE DEFINITION OF A DANGEROUS
AND/OR SUBSTANDARD BUILDING AS SET FORTH IN SECTION 10-61 OF THE
MUSKEGON CITY CODE.
SAFEbuilt performed an interior inspection of the trades on 4/3/2014 and found:
1. Roof in the back is rotted away along with the joists
2. The floor is rotted away in areas
2. The walls are kicked in
4. Windows are broken
5. The foundation is bad
6. The building has had the electrical and pipes removed for scrap
COMMISSION DATE: 06/24/2014
DATE: 06/16/2014
TO: Honorable Mayor and Commissioners
FROM: Jeffrey Lewis, Director of Public Safety
RE: Concurrence with the Housing Board of Appeals Notice and Order to
Demolish. Dangerous Building Case #: EN140070
SUMMARY OF REQUEST: This is to request that the City Commission Concur with the
findings of the Housing Board of Appeals that the structure located at 1245 FLEMING
AVE (garage) is unsafe, substandard, a public nuisance and that it be demolished
within thirty (30) days. It is further requested that administration be directed to obtain
bids for the demolition of the structure and that the Mayor and City Clerk be authorized
and directed to execute a contract for demolition with the lowest responsible bidder.
Case# & Project Address: # EN140070 - 1245 FLEMING AVE (Garage)
Location and ownership: This structure is located on Fleming Ave. between Roberts
and Burton and is owned by the COUNTY OF MUSKEGON (due to tax foreclosure
3/31/2014).
Staff Correspondence: A dangerous building inspection was conducted on 10/15/07.
The Notice and Order to Repair was issued on 10/17/08. On 12/06/07 the HBA
declared the structure substandard and dangerous.
Financial Impact: CDBG Funds
Budget action required: None
State Equalized value: $ 20,100
Estimated cost to repair: $ 5,000
Staff Recommendation: To concur with the Housing Board of Appeals decision to
demolish.
Additional Information (History):
Owner Contact:
1) Harbour Portfolio VI LP
3/19/2014 – Notice & Order – Card was signed (can’t read signature).
4/10/2014 – Harbour Portfolio sent in a letter asking how to fight this as they are
not house flippers, but buy to sell to home owners on land contract.
4/18/2014 – HBA Meeting notification – Signed but unreadable
5/9/2014 – HBA Concurred notification – Signed by Julie M.
2) Muskegon County Treasurer:
3/19/2014 – Notice & Order – Card was signed by Colleen M.
4/18/2014 – HBA Meeting notification – Card signed by Colleen M.
5/9/2014 – HBA Concurred notification – Card signed by Tony M.
Permits obtained: None
If you disagree with the decision of the City Commission, you have the right to file a
petition for superintending control in the Circuit Court for the County of Muskegon within 21
days after the City Commission concurs.
CITY OF MUSKEGON
CODE COMPLIANCE DEPARTMENT
933 TERRACE ST STE 202
MUSKEGON, MI 49440
(231) 724-6702 (Office)
(231) 724-6790 (Fax)
DANGEROUS BUILDING REPORT
1245 FLEMING AVE
Inspection noted:
Garage only:
1) Roof is completely caved in.
2) Walls are bowing out.
3) Windows missing
4) Hole in side.
BASED UPON A RECENT INSPECTION OF THE ABOVE PROPERTY, IT HAS BEEN
DETERMINED THAT THE STRUCTURE MEETS THE DEFINITION OF A DANGEROUS
AND/OR SUBSTANDARD BUILDING AS SET FORTH IN SECTION 10-61 OF THE
MUSKEGON CITY CODE.
COMMISSION DATE: 06/24/2014
DATE: 06/17/2014
TO: Honorable Mayor and Commissioners
FROM: Jeffrey Lewis, Director of Public Safety
RE: Concurrence with the Housing Board of Appeals Notice and Order to
Demolish. Dangerous Building Case #: EN140056
SUMMARY OF REQUEST: This is to request that the City Commission Concur with the
findings of the Housing Board of Appeals that the structure located at 30 E CLAY AVE
is unsafe, substandard, a public nuisance and that it be demolished within thirty (30)
days. It is further requested that administration be directed to obtain bids for the
demolition of the structure and that the Mayor and City Clerk be authorized and directed
to execute a contract for demolition with the lowest responsible bidder.
Case# & Project Address: # EN140056 - 30 E CLAY AVE
Location and ownership: This structure is located on Clay Ave. between Spring St. and
Shoreline Dr. and is owned by HOLST DAVID B.
Staff Correspondence: A dangerous building inspection was conducted on 2/4/2014 &
3/31/2014. The Notice and Order to Repair was issued on 2/18/2014. On 5/1/2014 the
HBA declared the structure substandard and dangerous.
Financial Impact: General Funds
Budget action required: None
State Equalized value: $ 82,500
Estimated cost to repair: $ 280,000
Staff Recommendation: To concur with the Housing Board of Appeals decision to
demolish.
Additional Information (History):
Owner Contact:
Notice & Order = Card signed (can’t read signature)
HBA Meeting = Card signed by Shari Soules
Permits obtained: None since the structure was declared a dangerous building.
All interior photos were taken by Kirk of SAFEbuilt during his interior inspection.
Foundation missing-picture showing
from the inside.
If you disagree with the decision of the City Commission, you have the right to
file a petition for superintending control in the Circuit Court for the County of Muskegon
within 21 days after the City Commission concurs.
CITY OF MUSKEGON
CODE COMPLIANCE DEPARTMENT
933 TERRACE ST STE 202
MUSKEGON, MI 49440
(231) 724-6702 (Office)
(231) 724-6790 (Fax)
DANGEROUS BUILDING REPORT
30 E CLAY AVE
02/04/2014
Inspection noted:
1. Peeling Paint.
2. Boarded windows – The windows have been boarded for more than 180
consecutive days.
3. Many broken windows
4. Walls have many cracks in the brick work outside.
DANGEROUS BUILDING INSPECTION REPORT
04/08/2014
Owner HOLST DAVID B
PO BOX 151
GRANDVILLE, MI 49468-0151
Enforcement # EN140056
Property Address: 30 E CLAY AVE
Parcel # 24-205-173-0002-00
Date completed: 3/31/14
DEFICENCIES:
This building is in very bad dis-repair. The roof was bad and the building is badly water
damaged with rotten wood.
Drywall work was done without permits.
Wood trusses and rafters are old.
Some of the floor joists are sagging.
The foundation on the north side is not to the frost line and animals are tunneling under it.
There is only 1 roof drain and this will not handle the amount of water that it needs to in a
downpour.
The masonry is in very bad shape with cracks and in areas the walls are caving in.
The east wall is bowing out and could cause a sudden failure allowing the rafters to cave
in.
The field stone foundation is crumbling on the west side.
The fire sprinkler is not working and has been removed from most of the building and
there is a large fire load in the building. Also there is a lot of construction equipment
stored on the 2nd and 3rd floors that will cause a hazard in a fire.
The drywall is missing under the stairs.
Lots of areas on the north side have roof leaks.
This will need all new wiring and plumbing and heating.
There are barrels stored outside on the west side.
There is a pile of tires stored outside on the west side.
Use of extension cords throughout not permitted.
All wiring to be in good repair and code compliant
Inspect and certify all HVAC.
Inspect and certify all plumbing
Gas and water are on.
Insure fire suppression works.
Building in disarray.
Test backflow device on water service.
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Kirk Briggs, Building Official Date