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CITY OF MUSKEGON
CITY COMMISSION WORKSESSION
Monday, October 12, 2015
5:30 p.m.
City Commission Chambers
AGENDA
1. Industrial Facilities Tax Abatement – 441 W. Western
2. Create City Wide Special Assessment for Street Lights
3. Any Other Business
4. Adjournment.
Commission Meeting Date: October 13, 2015
Date: October 8, 2015
To: Honorable Mayor and City Commissioners
From: Planning & Economic Development
RE: Public Hearing - Request for the establishment of an Industrial
Development District at 441 W Western Ave.
SUMMARY OF REQUEST:
Pursuant to Public Act 198 of 1974, as amended, Pigeon Hill Brewing Company, LLC, has
requested to establish an Industrial Development District at 441 W Western Ave. The
establishment of the district will allow the company to become eligible for Industrial Facilities
Tax Abatements (IFTs).
FINANCIAL IMPACT:
None
BUDGET ACTION REQUIRED:
None
STAFF RECOMMENDATION:
Approval of the establishment of the Industrial Development District.
COMMITTEE RECOMMENDATION:
None
10/8/2015
Resolution No. _______
MUSKEGON CITY COMMISSION
RESOLUTION APPROVING AN INDUSTRIAL DEVELOPMENT DISTRICT AT 441 W WESTERN AVE,
MUSKEGON, MI 49440
PIGEON HILL BREWING COMPANY, LLC
WHEREAS, pursuant to PA 198 of 1974, as amended, the City Commission of the City of Muskegon has the
authority to establish an Industrial Development Districts within the City of Muskegon; and
WHEREAS, Pigeon Hill Brewing Company, LLC has petitioned the City Commission of the City of Muskegon to
establish an Industrial Development District on its property located in the City of Muskegon hereinafter
described; and
WHEREAS, construction, acquisition, alteration, or installation of a proposed facility has not commenced at the
time of filing the request to establish this district; and
WHEREAS, written notice has been given by mail to all owners of real property located within the district, and to
the public by newspaper advertisement in the Muskegon Chronicle and public posting of the hearing on the
establishment of the proposed district; and
WHEREAS, on October 13, 2015 a public hearing was held at which all owners of real property within the
proposed Industrial Development District and all residents and taxpayers of the City of Muskegon were afforded
an opportunity to be heard thereon; and
WHEREAS, the City Commission of the City of Muskegon deems it to be in the public interest of the City of
Muskegon to establish the Industrial Development District as proposed.
NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Muskegon that the following
described parcel of land situated in the City of Muskegon, Muskegon County, and State of Michigan, to wit:
CITY OF MUSKEGON REVISED PLAT OF 1903 PART LOT 5 BLK 313 DESC AS FOLS COM AT
SELY COR SD LOT 5 FOR POB TH N 41D 55M 22S W ALNG ELY LN SD LOT A DIST OF 140.29 FT
TH N 48D 10M 43S E ALNG NLY LN SD LOT A DIST OF 46.08 FT TH S 41D 59M 25S E A DIST OF
140.12 FT TH S 47D 58M 26S W ALNG SLY LN SD LOT A DIST OF 46.23 FT TO POB SBJT TO
ESMTS RECOR'D 3361/537 SBJT TO ESMTS RECOR'D 3473/376 SBJT TO ESMTS RECOR'D
3473/385
is established as an Industrial Development District pursuant to the provisions of PA 198 of 1974, as amended,
to be known as Pigeon Hill Industrial Development District.
Adopted this 13th Day of October, 2015.
Ayes:
Nays:
Absent:
10/8/15
BY: __________________________________
Stephen J. Gawron
Mayor
ATTEST: __________________________________
Ann Meisch
Clerk
CERTIFICATION
I hereby certify that the foregoing constitutes a true and complete copy of a resolution adopted by the Muskegon
City Commission, County of Muskegon, Michigan, at a regular meeting held on October 13, 2015.
______________________________
Ann Meisch
Clerk
10/8/15
Commission Meeting Date: October 13, 2015
Date: October 8, 2015
To: Honorable Mayor and City Commissioners
From: Planning & Economic Development
RE: Public Hearing - Request for an Industrial Facilities Exemption
Certificate – Pigeon Hill Brewing Company, LLC
SUMMARY OF REQUEST:
Pursuant to Public Act 198 of 1974, as amended, Pigeon Hill Brewing Company, LLC, has
requested the issuance of an Industrial Facilities Tax Exemption Certificate. The company
will be investing $193,700 in real property. The investment is expected to create up to 20
jobs. This qualifies them for a tax abatement of 12 years on real property.
FINANCIAL IMPACT:
The City will capture certain additional property taxes generated by the expansion (see
attached Summary Sheet).
BUDGET ACTION REQUIRED:
None
STAFF RECOMMENDATION:
Approval of the attached resolution granting an Industrial Facilities Exemption Certificate for
a term of 12 for real property.
COMMITTEE RECOMMENDATION:
None
10/8/2015
Resolution No. _______
MUSKEGON CITY COMMISSION
RESOLUTION APPROVING APPLICATION FOR ISSUANCE
OF INDUSTRIAL FACILITIES EXEMPTION CERTIFICATE
PIGEON HILL BREWING COMPANY, LLC
WHEREAS, pursuant to P.A. 198 of 1974 as amended, after duly noticed public hearing held on October
13, 2015, this Commission by resolution established an Industrial Development District as
requested by Pigeon Hill Brewing Company, LLC, including the property they lease at 441 W
Western Ave, Muskegon, Michigan 49440; and
WHEREAS, Pigeon Hill Brewing Company, LLC has filed an application for the issuance of an Industrial
Facilities Tax Exemption Certificate with respect to building improvements that will occur within said
Industrial Development District ; and
WHEREAS, said application was filed no later than six months after project commencement and the Muskegon
City Commission held a public hearing on October 13, 2015, at the Muskegon City Hall in Muskegon,
Michigan at 5:30 p.m. at which hearing the applicant, the assessor and representatives of the affected
taxing units were given written notice and were afforded an opportunity to be heard on said application;
and
WHEREAS, the building improvements are calculated to and will have the reasonable likelihood to retain,
create, or prevent the loss of employment in Muskegon, Michigan; and
WHEREAS, the aggregate SEV of real property exempt from ad valorem taxes within the City of Muskegon, will
not exceed 5% of an amount equal to the sum of the SEV of the unit, plus the SEV of personal and real
property thus exempted.
NOW, THEREFORE, BE IT RESOLVED by the Muskegon City Commission of the City of Muskegon,
Michigan that:
1) The Muskegon City Commission finds and determines that the Certificate considered together with
the aggregate amount of certificates previously granted and currently in force under Act No. 198 of
the Public Act of 1974 as amended and Act No. 255 of the Public Acts of 1978 as amended shall
not have the effect of substantially impeding the operation of the City of Muskegon or impairing the
financial soundness of a taxing unit which levies ad valorem property taxes in the City of
Muskegon.
2) The application of Pigeon Hill Brewing Company, LLC , for the issuance of an Industrial Facilities
Tax Exemption Certificate with respect to building improvements on the following described parcel
of real property situated within the City of Muskegon to wit:
CITY OF MUSKEGON REVISED PLAT OF 1903 PART LOT 5 BLK 313 DESC AS FOLS COM
AT SELY COR SD LOT 5 FOR POB TH N 41D 55M 22S W ALNG ELY LN SD LOT A DIST OF
140.29 FT TH N 48D 10M 43S E ALNG NLY LN SD LOT A DIST OF 46.08 FT TH S 41D 59M
25S E A DIST OF 140.12 FT TH S 47D 58M 26S W ALNG SLY LN SD LOT A DIST OF 46.23 FT
TO POB SBJT TO ESMTS RECOR'D 3361/537 SBJT TO ESMTS RECOR'D 3473/376 SBJT TO
ESMTS RECOR'D 3473/385
3) The Industrial Facilities Tax Exemption Certificate is issued and shall be and remain in force and
effect for a period of 12 years on real property.
10/8/15
Adopted this 13th Day of October 2015.
Ayes:
Nays:
Absent:
BY: __________________________________
Stephen J Gawron
Mayor
ATTEST: __________________________________
Ann Meisch
Clerk
CERTIFICATION
I hereby certify that the foregoing constitutes a true and complete copy of a resolution adopted by the Muskegon
City Commission, County of Muskegon, Michigan, at a regular meeting held on October 13, 2015.
______________________________
Ann Meisch
Clerk
10/8/15
Memo
To: City Commission
From: Planning & Economic Development
cc:
Date: October 7, 2015
Re: Industrial Facilities Tax Abatement
The City Commission approved Pigeon Hill Brewing Company, LLC for a Commercial
Facilities Exemption Certificate for their new building at 441 W Western Ave on May 12, 2015.
However, the State Tax Commission has decided that they cannot approve the Certificate for
the entire building, only for the brewpub portion. They stated that the beer production portion
of the building would have to apply for an Industrial Facilities Tax Abatement (IFT).
Pigeon Hill and City staff were not expecting this, since the State Tax Commission had already
approved a Commercial Facilities Exemption Certificate for the brewery at 500 W Western
Ave. The State Tax Commission stated that this was an error on their part and they should
have applied for an IFT for that project a few years ago. They have encouraged Pigeon Hill to
apply for the IFT for the project at 441 W Western, even though they have started the work
before the Industrial Development District was created. They have ensured us that if the City
approves the IFT, the State Tax Commission will take it through a special process to approve
the IFT, even though normal procedures were not followed.
CITY OF MUSKEGON
CONTRACT FOR TAX ABATEMENT
Act 198 Public Acts of 1974
AGREEMENT between CITY OF MUSKEGON, a municipal corporation of 933
Terrace Street, Muskegon, Michigan 49441, (“City”) and Pigeon Hill Brewing Company,
LLC (“Company”).
Recitals:
A. The Company has applied to City for the establishment of an industrial
development district or industrial rehabilitation district pursuant to the provisions of Act
198 of the Public Acts of 1974, as amended, which act requires a contract between the
City and the Company to be agreed and submitted with the Company’s subsequent
anticipated application for an industrial facilities exemption certificate.
B. That in addition to the statutory requirement, the City has determined that it is in
the best interests of the taxpayers, property owners and residents of the City that this
Agreement be approved and executed prior to the establishment of the requested district,
and the City deems this Contract, together with the conditions set forth in the said Act to
constitute a necessary element in the City’s determination whether or not to create the
district.
C. The Company intends to install the project set forth in its application (“project”)
which it believes qualifies for the process of establishing the district and the application
for industrial facilities exemption certificate.
D. The City, provided this Agreement is executed, will determine whether to create
the district based upon the potential for the production of permanent jobs, the
continuation or increase of economic activity, planning and zoning considerations and the
City’s general plan and intentions regarding economic development. In addition to the
City policy considerations and predictions that the Company’s proposed district and
certificate benefit the community in those ways, the City has further determined that the
contractual commitments made by the Company to thereby assist the community shall be
binding on the Company and necessary to continue the tax exemption made possible by
the certificate.
NOW THEREFORE THE PARTIES AGREE:
1. COMPANY AGREEMENT. The Company irrevocably commits to the
investment, job retention and job creation promises made in its application, a copy of
which is attached hereto and incorporated herein. In particular the Company agrees:
Page 1
1.1 That 100% of the jobs shall be filled and in existence with full-time
employees by a date no later than two (2) years from the date of the granting of
the certificate by the State Tax Commission.
1.2 The Company shall meet the affirmative action goal included in the
application or in any documents supplied by the City and utilized by the
Company, including any additional representations made to the City Commission
on or before the date two (2) years after the granting of the certificate by the State
Tax Commission. It shall maintain the said levels of employment diversity during
the period of the certificate.
1.3 The Company, by the end of two (2) years from the date of the grant of the
certificate by the State Tax Commission shall have completed the investment of
$193,700 in real property improvements as shown in the application.
1.4 That the improvements and equipment to receive the tax abatement treatment
shall be completed on or before the date two (2) years from the date of granting of
the certificate by the State Tax Commission.
1.5 The Company shall pay its specific taxes required by the act in a timely
manner, and shall not delay payments so as to incur any penalties or interest.
1.6 The Company shall not appeal the valuation of any real or personal property
at the facility to the Michigan Tax Tribunal or the State Tax Commission.
1.7 The Company shall fully cooperate with the City representatives in
supplying all requested and required documentation regarding jobs, investment,
the meeting of all goals and the timely installation and utilization of equipment
and improvements. The City shall be entitled to inspect at reasonable hours the
Company’s premises where the said improvements and equipment have been
installed and where the said jobs are performed.
1.8 The Company shall maintain, during the entire period for which the tax
abatement is granted, the level of jobs, affirmative action goals, production and
utilization of the improvements and equipment at the site where the district has
been created and for which the tax exemption has been granted.
1.9 The Company shall not cause or fail to cure the release of any hazardous
substance, or the violation of any environmental law on its premises in the City.
It shall report any releases to the appropriate governmental authority in a timely
and complete manner, and provide copies of said report documentation to the
City. It shall comply with all orders and actions of any governmental agency
having authority.
1.10 The Company shall maintain the equipment and improvements so as to
minimize physical or functional obsolescence.
Page 2
1.11 The Company shall continue to operate its business location in the City,
containing the same number of and type of jobs, for the term of the certificate.
2. AGREEMENT BY THE CITY. Provided this contract has been executed and
further provided all applications to create the district and achieve the industrial facility
exemption certificate have been properly filed, the City shall, in a timely manner,
determine in a public meeting to create the district and receive, process, and approve
thereafter the Company’s application for an industrial facilities exemption certificate.
The City may consider this contract in a meeting separate from and prior to the meeting
in which the City considers the creation of the district and approval of the application for
certificate. Further, the City shall require the submission of this contract signed by the
Company together with its applications, before creating the district.
3. EVENTS OF DEFAULT. The following actions or failures to comply shall be
considered events of default by the Company:
3.1 Failure to meet any of the commitments set forth above.
3.2 The closing of the Company’s facilities in the City. Closing shall mean for
purpose of this Agreement, the removal, without transfer to another site within the
City of substantially all of the production facilities, and the elimination of
substantially all the jobs created or retained thereby, which are set forth in the
Company’s application.
3.3 Failure to afford to the City the documentation and reporting required.
3.4 The failure to create or retain jobs, meet affirmative action goals or expend
the funds on equipment and improvements as represented in the application
within the times required hereby.
3.5 The bankruptcy or insolvency of the Company.
3.6 The failure to pay any and all taxes and assessments levied on the
Company’s property or any other taxes, local, state or federal, including but not
limited to City income taxes and the withholding of said City income taxes from
employees as required by the City Income Tax Ordinance.
3.7 The performance or omission of any act which would lead to revocation
under MCLA 207.565, being §15 of the Act.
3.8 The violation of any provisions, promises, commitments, considerations or
covenants of this Agreement.
4. REMEDIES ON DEFAULT. In the event of any of the above defaults the City
shall have the following remedies which it may invoke without notice, except as may be
reasonably required by the Company’s rights to due process:
Page 3
4.1 In the event of closing as determined after investigation of the facts and a
public hearing, the Company shall be immediately liable for penalties to be paid
forthwith to the city as determined as follows:
4.1.1 The Company shall pay to the City for prorata distribution to the
taxing units experiencing the abatement, an amount equal to the difference
between the industrial facilities tax which it has paid, and the total
property taxes to the relevant taxing units which it would have paid, given
its installations of improvements and equipment, during the years for
which the certificate was in effect.
4.1.2 Immediate Revocation. The Company hereby consents to
revocation to the IFT certificate before the State Tax Commission, without
hearing, and the City shall submit a copy of this Agreement to the State
Tax Commission in connection with its revocation procedure, giving
notice that the default has occurred and immediate revocation should
occur.
4.2 In the event the improvements and equipment have not been installed before
the two (2) year period, in addition to the revocation procedures before the State
Tax Commission, the abatement should immediately be reduced by the City
proportionately, and any installations which have not been finished at the end of
said two (2) year period shall not be eligible for the abatement thereafter and shall
be placed on the regular tax roll.
4.3 Failure to Expend the Funds Represented. In the event, (whether or not the
installations have been completed), the Company has not expended the funds it
has represented on its application that it would invest for the installation of
equipment, the abatement shall be reduced prorata, and any remaining value of
equipment shall be placed on the regular tax roll.
4.4 Job Creation and Retention. In the event the promised number of jobs have
not been created or retained at the end of the two (2) years after the grant of the
certificate by the State Tax Commission, the abatement shall be proportionately
reduced.
4.5 Affirmative Action Goals. In the event, after one (1) year from the grant of
the certificate by the State Tax Commission, the affirmative action goals of the
City for additional jobs have not been met on a prorata basis, the abatement shall
be revoked.
4.6 For other violations of this Agreement or for actions or omissions by the
Company amounting to grounds for revocation by statue, the City shall
recommend to the State Tax Commission immediate revocation of the certificate.
Page 4
4.7 Special Assessment. For any amount due to be paid to the City, under this
Section 4, the Company consents that the City shall have a personal action against
the Company for the said amount, and in addition, cumulatively, and not by
election, the City shall have a special assessment lien on all the property of the
Company personal and real, located in the City, for the collection of the amounts
due as and in the manner of property taxes and in such case the collection of the
said special assessment shall be accomplished by addition by the City to the
Company’s property tax statement regularly rendered.
5. Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the State of Michigan applicable to contracts made and to be
performed within the State of Michigan.
6. Counterparts. This Agreement may be executed in one or more counterparts.
Notwithstanding such execution all such counterparts shall constitute one and the same
Agreement.
7. Benefit. This Agreement shall be binding upon and inure to the benefit of the
respective parties, their successors and personal representatives.
8. Effective Date. This Agreement shall be effective on the date the State of
Michigan Tax Commission grants the company at Industrial Facilities Exemption
Certificate.
CITY OF MUSKEGON
By _________________________
Stephen J. Gawron, Mayor
Date _________________________
and___________________________
Ann Meisch, Clerk
Date _________________________
By___________________________
Its______________________
Date _________________________
Page 5
AGENDA ITEM NO._________
CITY COMMISSION MEETING: October 13, 2015
TO: HONORABLE MAYOR AND CITY COMMISSIONERS
FROM: Kenneth D. Grant, Treasurer
DATE: October 6, 2015
RE: Public Hearing
Create City Wide Special Assessment for Street Lights.
SUMMARY OF REQUEST:
To hold a public hearing on the proposed special assessment for the entire city and appoint two City
Commissioners to the Board of Assessors if it is determined to proceed with the project.
FINANCIAL IMPACT:
BUDGET ACTION REQUIRED:
None
STAFF RECOMMENDATION:
To create the special assessment for all eligible parcels for the entire city and assign two
City Commissioners to the Board of Assessors by adopting the attached resolution.
COMMITTTEE RECOMMENDATION:
CITY OF MUSKEGON
Resolution No. _____
Resolution At First Hearing Creating Special Assessment District
For Street Lights
Location and Description of Properties to be assessed:
See Exhibit A attached to this resolution
RECITALS:
1. By resolution of the City Commission, a hearing has been held on October 13, 2015, at
5:30 o’clock p.m. at the City Commission Chambers. Notice was given by mail and
publication as required by law.
2. That estimates of costs of the project, a feasibility report and valuation and benefit
information are on file with the City and have been reviewed for this hearing.
3. At the hearing held on October 13, 2015, there were _____________ objections by the
owners of the property in the city registered at the hearing either in writing received
before or at the hearing or by owners or agents present at the hearing, and the
Commission has considered the advisability of proceeding with the project.
FINDINGS:
1. The City Commission has examined the estimates of cost, including all assessable
expenses, and determines them to be reasonable.
2. The City Commission has considered the value of the property to be assessed and the
value of the benefit to be received by each property to be assessed in the district with the
continuation of street lighting. The City Commission determines that the assessments of
costs of the City project will enhance the value of the property to be assessed in an
amount at least equivalent to the assessment and that the improvement thereby constitutes
a benefit and remove a burden from the property associated with the loss of street lighting
to the property.
THEREFORE, BE IT RESOLVED:
1. The City Commission hereby declares a special assessment district to include all of the
property in the city.
2. The City Commission determines to proceed with the special assessment.
3. The City Commission hereby appoints a Board of Assessors consisting of City
Commissioners _______________________________ and ______________________
and the City Assessor who are hereby directed to prepare an assessment roll. Assessments
shall be made upon a benefit basis.
4. It is hereby determined that, based on the estimates of cost for street lights, the City will
assess $175 per parcel with a state equalized value of over $1,000 including all City
owned parcels, payable in five installments commencing with the Winter 2015 tax bill,
which means that approximately 80% of the cost of street lighting will be paid by special
assessments. (A tax parcel having a state equalized value of over $1,000 will pay an
extra $35 per year for five years for street lighting.)
5. Upon submission of the special assessment roll, the City staff is hereby directed to notify
all owners and persons interested in properties to be assessed of the hearing at which the
City Commission will consider confirmation of the special assessment roll.
This resolution adopted.
Ayes ___________________________________________________________________
______________________________________________________________________________
Nays ___________________________________________________________________
______________________________________________________________________________
CITY OF MUSKEGON
By _________________________________
Ann Marie Meisch, Clerk
CERTIFICATION
This resolution was adopted at a meeting of the City Commission, held on
_______________, 2015. The meeting was properly held and noticed pursuant to the Open
Meetings Act of the State of Michigan, Act 267 of the Public acts of 1976.
CITY OF MUSKEGON
By _________________________________
Ann Marie Meisch, Clerk
Exhibit A
All eligible parcels located inside the City of Muskegon with a state equalized value of over $1,000.