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Agenda Item Review Form
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Muskegon City Commission
Commission Meeting Date: Sept 22, 2020 Title: 1601 Beach Lease Amendment
Submitted By: LeighAnn Mikesell Department: Development Services
Brief Summary: Staff is seeking direction on an amendment to the current lease with 1601 Beach
LLC to further extend the boundary of the land being leased for The Deck at Pere Marquette Park.
Detailed Summary: The owners of 1601 Beach LLC are planning an additional expansion to their
restaurant, The Deck. The expansion is south of the recent expansion toward the walkway to the
pier and will include relocating the stage to reduce noise impacts on the neighborhood, two
additional bars, a new snack bar, a gear shop, and revised concrete entrance at the south end of
the existing building . In order to proceed with the expansion, the lease agreement needs to be
modified to account for the additional land associated with the expansion.
Amount Requested: None Amount Budgeted: N/A
Fund(s) or Account(s) : N/A Fund(s) or Account(s): N/A
Recommended Motion: to approve/deny the lease amendment with 1601 Beach LLC and
authorize the mayor and clerk to sign
Check if the following Departments need to approve the item first:
Police Dept. D
Fire Dept. D
IT Dept. 0
For City Clerk Use Only:
Commission Action:
SECOND AMENDMENT TO LEASE
This Second Amendment to Lease ("Amendment") is entered into by and between City of
Muskegon ("City"), a Michigan municipal corporation, and 1601 Beach, LLC, a Michigan limited liability
company ("LLC").
RECITALS
A. The City, as ground lessor, and LLC, as ground lessee (referred to in the Lease as
"Harris"), are party to that certain Ground Lease dated December 10, 2013, as amended by that certain
First Amendment to Lease dated February 19, 2020 (together, the "Lease"), pursuant to which LLC
currently leases certain real property located in the City of Muskegon, County of Muskegon, Michigan, that
being all of the real property commonly referred to as 1601 Beach Street, Muskegon, Michigan (Parcel
No. 61-24-205-739-0001-20) and a portion of the real property commonly known as 1651 Beach Street,
Muskegon, Michigan (Parcel No. 61-24-205-734-0001-00) (together, the "Premises"). LLC owns the
buildings, physical improvements, equipment, fixtures, and trade fixtures located at the Premises, and
operates a restaurant business at the Premises commonly known as 'The Deck".
B. The City and LLC entered into the First Amendment to Lease pursuant to which LLC
made certain expansions to its restaurant operations and made additional physical improvements,
alterations, and additions to the Premises, the buildings and improvements thereon, and surrounding
property.
C. LLC now desires to further expand its restaurant operations and make changes and
additional physical improvements, alterations, and additions to the Premises, the buildings and
improvements thereon, and surrounding property, substantially in accordance with the plans attached to
this Amendment as Exhibit A (the "Second Expansion").
D. In order to complete the proposed Second Expansion, LLC needs to lease from the City
additional land adjacent to and to the south of the Premises, that being an additional portion of the parcel
of real property commonly known as 1651 Beach Street, Muskegon, Michigan (Parcel No. 61-24-205-734-
0001-00). As a result of leasing such additional land, the total area leased from the City shall be that area
depicted on the attached Exhibit B and legally described on the attached Exhibit B-1 (the "Expanded
Premises").
E. The City and LLC now wish to amend the Lease to expand the land leased to LLC to
include all of the Expanded Premises. Capitalized terms not defined herein shall have the meanings of
capitalized terms in the Lease.
AGREEMENT
NOW, THEREFORE, in consideration of mutual covenants and conditions contained herein and
for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the City and LLC agree the Lease is amended as follows:
1. Expansion of Leased Premises. The Lease is hereby amended to provide that as of the
Effective Date of this Amendment, the Premises leased by the City to LLC pursuant to the Lease shall
instead be the Expanded Premises as depicted on Exhibit B hereto and described on Exhibit B-1 hereto.
All references to the "Premises" and the "leased premises" in the Lease and First Amendment to Lease
shall hereafter refer to the "Expanded Premises", and Exhibit B and Exhibit B-1 to this Amendment shall
replace Exhibit A to the Lease (which was previously replaced by Exhibit Band Exhibit B-1 to the First
Amendment to Lease). There shall be no increase or other change to the rent charged to LLC under the
Lease.
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2. Use of Expanded Premises. The Second Expansion proposed by LLC, including all
proposed alterations, structural changes, and additional structures and improvements to the Expanded
Premises and buildings thereon, is approved by the City, provided that LLC will comply with all laws, local
ordinances, and lawful police and health regulations applicable to the use of the Expanded Premises. All
additional and/or altered buildings, structures, and all fixtures, partitions, equipment, trade fixtures,
alterations, improvements, or changes installed or made or affixed to the underlying real estate by LLC or
at the direction of LLC shall be and remain owned by LLC, subject to the terms set forth in the last
paragraph of Section 7 of the Lease. The City will put LLC into possession of the Expanded Premises for
the full term of the Lease, together with any renewal options.
In addition to the use of the Expanded Premises, LLC will also continue to have the non-exclusive use of
the land between the above-described Expanded Premises and Beach Street, throughout which LLC shall
be permitted to make such landscaping alterations, improvements, and additions from time to time as it
reasonably desires, subject to any necessary City approval and/or any required permits.
3. Real Estate Taxes. Pursuant to Section 12 of the Lease, LLC is responsible for paying
all real estate taxes and assessments, both general and special, imposed by federal, state or local
governmental authority, or any other taxing authority having jurisdiction over the Premises, against the
land, buildings and all other improvements. LLC shall continue to be responsible for payment of all real
estate taxes and assessments imposed against the Expanded Premises; provided, however, LLC shall
only be responsible for payment of a pro rata portion of any real estate taxes and assessments imposed
against 1651 Beach Street (Parcel No. 61-24-205-734-0001-00) and the buildings and improvements
thereon, with such pro rata portion equal to the portion (in square feet) of 1651 Beach Street included in
the Expanded Premises and actually leased by LLC, divided by the total area (in square feet) of 1651
Beach Street, as reasonably determined by the parties.
4. Removal of Connecting Sidewalk; USACE Compliance. The parties acknowledge that
the proposed Second Expansion extends over and beyond a certain portion of sidewalk connecting the
sidewalk running between Beach Street and the Premises and the main sidewalk, walkway, and
revetment leading out to the south pier, as designated on Exhibit A as the "Connecting Sidewalk". For
purposes of this Agreement, the main sidewalk, walkway, and revetment leading out to the south pier
shall be referred to as the "Remaining Walkway". The Remaining Walkway is owned by the United States
Army Corps of Engineers ("USAGE") and therefore the areas immediately adjacent to the Remaining
Walkway are subject to certain restrictions to allow the USAGE to reasonably maintain the Remaining
Walkway. The parties acknowledge and agree that in order to make the proposed alterations and
improvements pursuant to the Second Expansion, the Connecting Sidewalk will need to be removed.
LLC is hereby permitted to destroy and remove all of such Connecting Sidewalk located within the
Expanded Premises at LLC's sole cost and expense, provided that LLC first obtain any necessary
approvals from the USAGE prior to destroying and removing the Connecting Sidewalk. LLC also agrees
to obtain all necessary approvals from the USAGE prior to making any of the proposed alterations and
improvements proposed in this Amendment. LLC will comply with all applicable laws, local ordinances,
and lawful police and health regulations in connection with its removal of the Connecting Sidewalk and
completing the proposed Second Expansion. LLC shall not be required to replace or reconstruct the
Connecting Sidewalk upon the expiration or termination of the Lease. The City will reasonably cooperate
with LLC in destroying and removing the Connecting Sidewalk from the Expanded Premises and
obtaining the necessary approvals to do so. In the event LLC is unable to obtain the approvals and
permissions to complete the proposed Second Expansion to LLC's satisfaction, LLC may, by delivery of
notice to the City, revoke and terminate this Amendment, in which case the Lease, as modified by the
First Amendment to Lease, shall continue in full force and effect as if this Amendment was never
executed.
5. Full Force and Effect. This Amendment shall become effective as of the date on which
both parties have executed this Amendment as set forth below ("Effective Date"). Except as specifically
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modified by this Amendment, the Lease is unmodified and shall continue in full force and effect. In the
event any terms of this Amendment conflict with the terms of this Lease or the First Amendment to Lease,
the terms of this Amendment shall control. Furthermore, this Amendment does not in any way modify,
amend, supersede, or limit that certain Option Agreement between LLC and the City dated February 19,
2020, and such Option Agreement remains in full force and effect.
6. Counterparts. This Amendment may be signed In one or more counterparts, each of
which shall be deemed to be an original, with the same effect as if the signatures on this Amendment and
each of the counterparts were on the same instrument. Electronic copies and signatures sent in PDF
format shall be treated as originals.
The parties hereto have duly executed this Amendment to be effective as of the Effective Date.
L';rSEE: 1601 Beach, LLC
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Name: Fred Scharmer
bi~~: ManaJO , [ / o1J ?rO
[Signature Page to Second Amendment to Lease)
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Exhibit A
Proposed Second Expansion Plans
[See attached]
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Exhibit 8
Depiction of Expanded Premises
[See attached]
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SITE LOCATION PLAN
NO SCALE
SITE BOUNDARY PLAN '
f'OTAL O.fg A.C. Jf1Tll1N BOUNDAJlT AS IND(CJT80
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PROPCRTY INF'ORW.nON GENERAL NOTES: ~ ,,"
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.ADDRESS: 1601 BEACH ST'RaT I. FIELD VERtFY AU. CONom()NS ANO REP0Kr ANY OIFF'E1?ENCES TO ARCH/ra:T
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2. CONrACT MISS 0/CC PRIOR ro ANY EXCAVA110N.
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} . 2 : ' a ~ o r th• 801mdory Surwy) 4, COP1t'S OF THIS OOCUMEN'f AR£ PROHIBIT'ED UNLESS AUrHORIZED SY ARCHITFJ:T' IN WFmlNC -
ANO ARCHITFCT IS NOT RESPONSJSI.£ FOR ANY LJASIUTY Ra.AW TO THIS PROJ8:T, PAST, PR!SENT.
OR FUTURE
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Exhibit B-1
Legal Description of Expanded Premises
Exhibit A
The following premises situated in the City of Muskegon, County of Muskegon, State of Michigan:
Land in the City of Muskegon, County of Muskegon, and the State of Michigan being part of Blocks 738 and
739, Revised City of Muskegon Plat of 1903, as recorded in Liber 3 of Plats Page 71, Muskegon County Records,
more particularly described as: Commencing at the Southwest corner of Lot 1, Block 7 58, plat of Central Land
Co's Sub-Division, as recorded in Book 3 of Plats, Page 84, Muskegon County Records;
thence South 61 degrees 33 minutes 31 seconds West 474.79 feet;
thence North 41 degrees 08 minutes 36 seconds West 6.03 feet to the Place of Beginning;
thence continuing Nmih 41 degrees 08 minutes 36 seconds West 354.00 feet;
thence South 46 degrees 42 minutes 37 seconds West 138.00 feet;
thence South 48 degrees 19 minutes 49 seconds East 307.59 feet;
thence 111.00 feet more or less at 4 feet No1ih of the existing concrete pier sidewalk to the Place of Beginning.
Parcel No.: 61-24-205-739-0001-20
Pmi of Parcel No.: 61-24-205-734-0001-00
Commonly known as: 1601 Beach Street