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CITY OF
m@ ~”@ MUSKEGON
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: March 10, 2026 Title: Nelson School Use Agreement - Parks &
Recreation Programming
Submitted by: Kyle Karczewski, Parks and Department: DPW- Parks
Recreation Director
Brief Summary:
The Parks & Recreation Department has received a proposal from General Capital Group regarding
shared use of the gymnasium and cafeteria space within Nelson School. The estimated annual
operating cost to the City is approximately $22,000, primarily associated with utilities. At this time, no
additional fees or upfront capital contributions have been requested. Based on the current
schedule, the space would become available in 2027 once the redevelopment is complete.
Detailed Summary & Background:
The Parks & Recreation Department has received a proposal from General Capital Group regarding
shared use of the gymnasium and cafeteria space within Nelson School. The estimated annual
operating cost to the City is approximately $22,000, primarily associated with utilities. At this time, no
additional fees or upfront capital contributions have been requested.
General Capital Group is currently pursuing acquisition of the Nelson School property with the intent
to renovate the building into mixed-income residential apartments, addressing a documented
housing need within the community. As part of their redevelopment concept, the developer has
proposed allocating the gymnasium and former cafeteria space (without a kitchen) for use by the
City's Parks & Recreation Depariment.
Under the proposed arrangement, the developer would be responsible for completing necessary
code compliance improvements and initial upgrades to make the designated spaces operational.
No capital investment is being requested from the City at this time.
The Parks & Recreation Department anticipates utilizing the facility for affordable community rentals,
similar in function to McGraft Park facilities and the Sim-Ray Center, as well as for expanded
recreation programming. While the City maintains numerous park assets, it currently lacks a
municipally controlled indoor facility that includes both a full gymnasium and multi-purpose space.
This opportunity would address a recognized service gap and support expanded summer recreation
programming and additional community activities.
The developer has requested a formal indication of the City’s interest in proceeding with the
agreement to assist with their redevelopment planning and financing timeline. The included Letter of
Intent (LOI) will satisfy their need, but does not obligate the City to signing the lease since details are
forthcoming. Discussions have indicated that the City would not be able to occupy the space until
some time in 2027, and staff will budget in future years accordingly.
Goal/Action ltem:
2027 Goal 1: Destination Community & Quality of Life - Parks and Recreation Department and
Services
Is this a repeat item?:
Explain what change has been made fo justify bringing it back to Commission:
Amount Requested: Budgeted ltem:
None at this time Yes No x | N/A
Fund(s) or Accouni(s): Budget Amendment Needed:
N/A Yes No x | N/A
Recommended Motion:
Move to authorize staff to negotiate with General Capital Group for recreational usage of the
gymnasium and multi-purpose space at Nelson School.
Approvals: Name the Policy/Ordinance Followed:
Immediate Division
Head
Information
Technology
Other Division Heads
Communication
Legal Review
GENERALCAPITAL
ae
DATE: March 2, 2026
TO: City of Muskegon, Department of Parks & Recreation
RE: Lease of Gym and Cafeteria Space at Former Nelson School
550 West Grand Avenue
Dear Kyle:
This proposal outlines the terms and conditions for a lease at 550 West Grand Avenue, Muskegon, MI -
a part of a property known as “Nelson School Apartments.” This Letter of Intent and the terms and
conditions outlined below, are intended to provide the basis upon which the parties may negotiate a
lease at Property and does not constitute a binding contractual agreement.
Landlord
GenCap Nelson LDHA, LLC
Contact: David Weiss, [email protected], 6938 N. Santa Monica Blvd, Fox Point, WI 53247
Tenant
City of Muskegon
Contact: Kyle Karczewski, Parks & Recreation Director, [email protected],
933 Terrace St, Muskegon, MI 49440
Lease Farm
Landlord’s Standard Lease Form (“Lease”)
Property
Nelson School Apartments, 550 W. Grand Ave, Muskegon, MI 49441
100,087 SF
Premises
Approximately 11,990 SF, 11.9% of the total building, in portions of the 1960’s & 1990's addition for gym
and cafeteria
Parking: non-exclusive use of 20 parking spaces
GEN ERAL CAPITAL
Ee
See attached Exhibit A
Permitted Use
Tenant shall be permitted to use the Premises for the operation of Parks & Recreation functions such as
open gym, teen nights, event space gatherings, to be further defined in the lease.
Hours of Operation: 7am to 10pm
Lease Term
10 years from the date of Rent Commencement.
Rent Commencement
Upon completion of the project, estimated to be July 15, 2027
Lease Rate
$1.00 per year
NNN Expenses
CAM estimate ~ $1.00 per square foot, to be further defined in the lease.
Utilities
Tenant shall be responsible for separately metered utilities which exclusively serve the Premises, from
the Delivery Date,
Landiord’s Work
Landlord shall provide Tenant with code compliant space per Exhibit B
Tenant’s Work
All other work as required for Tenant’s operation. Landlord is not responsible for the cost of any of
Tenant’s improvements.
Signage
Allowed by Landlord, provided such signage is allowed by Code. Tenant shall be responsible for the
design, permitting, and installation of all permitted signage, which shall be approved by the Landlord.
Security Deposit
NONE
GENERALCAPITAL
pes
Guarantee
NONE
Sales Reporting
Landlord shall have the right to request a statement of revenues from time to time.
Agency/License Disclosure
No brokers represent either party.
Non-Binding Proposal
This LOI is intended only to express the interest of the parties to enter into a lease agreement at the
Property. Except as hereinafter set forth, neither Buyer nor Seller shall be legally obligated to enter into
a lease.
Tenant: & iky ad Muskeg» A Landlord: GenCap Nelson LDHA, LLC
4.
a
By: Sig Strautmanis, Authorized Signatrory
Agreed to and accepted on
March 13 , 2026
Exhibit A.1
Premises
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Exhibit A.2
Premises (Parking)
Approximate Location of Entrance
to Leased Premises
Area of Non-Exclusive Parking
(20 Spaces)
a STORY
BAGS & BLOCK
EAD
amance Wie
SOP STREET
Exhibit B
Landlord Work
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