Approved Agreements and Contracts ARP Agreement Amendment West Urban 06-14-22

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                      Agenda Item Review Form
                                                    us                              GO
                          Muskegon City Commission

Commission Meeting Date: 6/14/22                         Title: ARP Agreement Amendment West

Submitted By: Jake Eckholm                               Department: Dev. Svcs/Economic Dev.

Brief Summary: Staff is seeking approval of the listed amendments to West Urban Properties
Development Agreement for the ARP Infill Housing Program.

Detailed Summary: West Urban Properties was selected as one of four contractors for the ARPA-
funded infill housing program. The goal of the program is to continue in-filling vacant lots in our core
neighborhoods while ensuring the housing units are offered in a more-affordable manner.
Two of the four awardees have had to decline their agreements for various reasons, leaving $1.15
million of the commission-approved funds unallocated to a builder. West Urban Properties initially
was not assigned specific lots in their agreement, which has proven a difficulty when attempting to
implement the project as there are other smaller scale builders interested in lots to build homes on
as well. With no defined legal right to any buildable lots for this program by virtue of an exhibit to the
ARP Agreement, staff are left in a difficult position when more than one builder wants a specific lot.
To that end, West Urban also has an infill housing agreement through the city to build rental housing
units in residential neighborhoods, which contains an exhibit with some lots, though not enough to
fulfill the builder's obligations to build 100 homes. In that exhibit, the builder and city inadvertently
selected lots that builders on the east side of the city had been interested in for some time to infill
owner occupied housing. West Urban, the interested builders, and the city have been working
together very effectively to correct these implementation issues, and to make space for other builders
in their own neighborhoods.
We have mutually agreed that it makes sense to amend both agreements, adding an exhibit of lots
to West Urban's ARP agreement and increasing their allocation by $1.15 million to ensure that we
continue to infill lots on schedule, while removing the desired lots by the smaller builders on the rental
construction agreement side. This item is in tandem with the other contract amendment on the
agenda and staff only recommends passing this one if there is support for the other.

Amount Requested: $1.15 million reallocation            Amount Budgeted: $1.15 million

Fund(s) or Account(s): Federal ARPA                     Fund(s) or Account(s): Federal ARPA
Allocation                                              Allocation

Recommended Motion: Motion to approve the amdendments to the West Urban ARP Agreement
by increasing the infill housing allocation by $1.15 million dollars, including the lot list exhibit as
presented and authorize the Mayor and Clerk to sign.
                                     CITY OF MUSKEGON

                     DEVELOPMENT AGREEMENT


     This First Amendment between City of Muskegon ("City"), 93 3 Terrace, Muskegon,
Michigan ("City") and West Urban Properties, LLC ("West Urban") of 3265 Walker Ave., Ste. D,
Grand Rapids, MI 49 544 has been entered into pursuant to the following terms:


       A.      City and West Urban executed a West Urban Properties ARP Infill Housing
Development Agreement executed January 19, 2022. Attached to both documents was a list of
addresses of properties owned by City to be purchased and developed by West Urban.

      B.     City and West Urban have agreed to add 10 home units, increase the financial
commitment, and fmalize the list of parcels to be purchased and developed by West Urban.


1.     The Background paragraph shall be revised to be as follows:

               Builder and Owner agree that Builder shall construct 30-~35 single family residences
               (the 11 Residences 11 ) for Owner on the terms and conditions set forth in this Agreement
               £nd in the general conditions attached as Exhibit A ("General Conditions"). Builder
               will be paid by Owner from funds obtained by Owner pursuant to _ _ _ ("ARP
               Funds"). As such, there are limitations on potential Buyers of the residences exist and
               will be more formally declared by the federal government in the fµture.

2.     Paragraph 3 shall be revised to provide as follows:

               Price. The price for constructing the Residences as determined in Paragraph 2 above
               shall be paid one half by Owner and one half by Builder. As to Owner;s obligations,
               Owner shall establish the "ARP Infill Housing Fund - West Urban" ("Fund") and
               deposit $3,125,000$4,275,000 into that Fund. All monies owed by Owner to Builder
               pursuant to this Agreement shall be paid from the Fund. Owner shall have no
               obligation to pay any monies to Builder pursuant to this Agreement from any other
               source of funds. Upon termination of this Agreement or construction of all Residences
               provided for pursuant this Agreement, all monies left in the Fund shall revert to the

               In the event the actual cost of any allowance exceeds the estimated amount
               ("Additional Allowance Amount'1), Owner shall pay the Additional Allowance
               Amount within 30 days ofBuilder1s invoice. No Additional Allowance Amount shall
               be billed through Builder without the express prior written consent of Builder.

3.             Exhibit A, Paragraph 1 shall be revised to state as .follows:

               Evidence of Credit. Builder's obligation to commence construction of the Residences
               is expressly conditioned on Owner depositing $3,125,000$4275,000 into the ARP
               Infill Housing Fund - West Urban ("Credit Evidence"). Payments required by the
               Payment Schedule shall be made by Owner directly to Builder within five days after
               presentation of a proper partial unconditional waiver oflien, request for payment, and
               sworn statements before making payments at each stage of completion as required
               above. Builder shall not under any circumstances be required to waive any future lien
               rights that it may have by reason of work and/ or materials thereafter furnished.

4. '             City and West Urban Agree that the attached exhibit B, which provides the addresses
                 of property subject to this agreement, supersedes any prior agreement as to properties
               . subject to this agreement.

5.             As to all other respects, the West Urban Properties ARP Infill Housing Development
               Agreement Residential Construction Agreement shall continue in force as if restated

Dated: - - - - - ~ 2022

                                                       West Urban Properties, LLC
         0-- -'7 - ~ 2022
Dated: - -
                                                       By=       ;{¼tu✓ ,

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