City Of Muskegon Commissioners - Regular Meeting

Good evening, good folks, and welcome to the City of Muskegon City Commission General Session for this Tuesday, July 14th of 2026. Before we get started with our meeting, I want to remind folks that we do have a couple different public comment periods. One is towards the beginning of the meeting, and that is on consent or on agenda items, whether it's consent agenda or new business. So if you wish to give comment on any agenda items, that's the time to speak before the commission has deliberation and votes on any of those items. We also have general public comment at the end of the meeting. It's an opportunity to share anything you wish for the City Commission. In either of those public comment periods, folks have up to three minutes to provide their remarks. If you're giving in-person comment, I encourage you to complete the comment forms at the back of the room. Please provide your name and home address. Note I'll not be sharing your home address or asking you to announce it. That's for our records. We'll be acknowledging which neighborhood you're joining us from, if you're a City of Muskegon resident. And if you're not a City resident, which other township, village, or city you may be joining us from. We do have phone-in comments as well for both of those periods. I'm going to share that phone number right now so folks that may be watching have that at the ready. That's 231-724-6721. Again, 724-6721. Please do not call right now. That's just so you have it at the ready when we get to public comments. Alright, we're going to start with, we don't have a faith leader this evening, two leaders in prayer, so we're going to have a moment of silence, followed by the Pledge of Allegiance. If you wish to join us in either of those activities, I ask that you stand if you're so capable of doing so.

Thank you.

I pledge allegiance to the flag of the United States of America and to the Republic for which it stands, one nation, under God, indivisible, with liberty and justice for all. May we have a roll call, please?

Mayor Johnson?

Here.

Mr. Kilgore?

Here.

Vice Mayor Keener? Here. Commissioner German?

Here.

Commissioner Jackson? Here. Commissioner Cochin? Here. Commissioner Sinclair? Here.

Thank you. All right. We do not have any honors, awards, and precepts. Oh, we do have. Yes. Didn't make the agenda, but we do have an introduction to be made of new employee.

Good evening. Tim Kozol, Public Safety Director. Thank you for allowing me to have a couple minutes to introduce Brittany to you, Brittany Hayes. She comes to us to be our police community coordinator. Just a little bit of her background. She's originally from Grand Rapids, brings a strong educational and professional background on criminal justice, civil rights, and community-focused policing. She earned her master's degree in analysis of criminal behavior from the University of Cincinnati, and her bachelor's degree in criminal justice from Ferris State. Prior to joining Muskegon Police Department, she worked for the Michigan Department of Civil Rights and the Kentwood Police Department, where she gained valuable experience working with diverse communities and public. Her role as police community coordinator, Brittany will help strengthen our relationships between the police department and the community through outreach, engagement, and collaboration. If she's not working, Brittany enjoys traveling with her son, shopping, and spending time with her.

Welcome, Brittany. Anything you wish to share with us?

Appreciate the warm welcome, and I look forward to serving the community.

Wonderful. And what's your puppy's name and what kind of dog?

A Yorkie, Kylo.

Milo?

Kyvo.

Kylo. Lovely. Maybe you want to bring your puppy to National Night Out. That's going to be one of your big projects coming up to work on, National Night Out. So welcome aboard. We are so happy to have you.

Thank you.

Thank you. Thank you, Chief. All right. We do not have any public hearings scheduled. Do we have any federal, state, county, or tribal partners in the audience that wishes to give us updates? Seeing none, we're going to move on to a consent agenda, no, public comment on agenda items.

I don't have any forms. Have you received any forms for public comment?

All right. Anyone in the audience wishing to give public comment on a consent agenda item or items? If there are no takers in the audience, we're going to go to the phones. That phone number is 231-724-6721. This is public comment on consent agenda items or any agenda items at this point. When you're calling, please turn down any audio in the background. State your name and if you're a City of Muskegon resident, which neighborhood you're calling from and which items you're speaking on. And during public comments, an opportunity for folks to give input directly to the City Commission, not necessarily back and forth, dialogue, or Q&A. We can arrange that another time. All right. It does not sound like we have any takers for phone and comments on agenda items. We're going to move on to the consent agenda. Commissioners, you have an opportunity to review. Are there any items that you wish to have removed for separate consideration and vote? Commissioner Kilgore.

Item N is in Nancy.

Vice Mayor?

Item B is in Victor.

B is in Victor. Commissioner German.

Yes, item D and O.

Commissioner Cushman.

Item R.

All right. If there are no others, I would entertain a motion to adopt the consent agenda as presented minus items D, N, O, R, and V. So moved.

Support.

We have a motion by Commissioner Kilgore, supported by Commissioner Cochin. If there's no discussion... Roll call, please.

Commissioner Kilgore.

Yes.

Vice Mayor Keener. Yes. Commissioner German. Yes. Commissioner Jackson. Yes. Commissioner Cochin. Yes. Commissioner St. Clair. Yes. Mayor Johnson.

Yes.

Commissioner Parsons.

Thank you.

All right, we're going to get started with item D, sale of 468 Ottawa.

Commissioner German.

Okay, I'm looking for that item. Let's see. Okay.

Thank you very much.

All right. Thank you, Mayor.

All right. Let's see.

All right. I move to authorize staff to complete the sale of 468 Ottawa as described in the attached purchase agreement and to have the Mayor and Clerk sign the purchase agreement. Support.

We have a motion by Commissioner German, supported by Commissioner Kilgore.

Good evening. Kindly introduce yourself and please report on this item. Good evening. My name is Jake Eckholm. I'm the Director of Development Services for the City of Muskegon. So this item, the sale of 468 Ottawa over towards Richards Park, is a follow-up to a project that was completed over the last 24 months or so of for-sale storage condos along Ottawa. Previously, the city sold another lot on Ottawa 510, Ottawa, to that same project. So West Urban Properties and Dave Dusendang is proposing to build additional storage condos on this lot as well. He's also in contact or attempting to be in contact with the Tennessee-based owner of the lot in between the first project and this proposed city lot to buy that and continue the project on that lot. additionally. So these would be commercial use storage condos primarily for people's equipment, campers, boats, things like that. I believe the first project sold out and somewhere in the price range of $175 to $200, somewhere in there.

Thank you.

Commissioner German.

Thank you, Mayor, and thank you, Director Echolm. Yeah, the reason I pulled this off the agenda because that's actually – resides in my ward. And I know there was some conversation years ago about inquiring property down there on Ottawa. I'm not sure exactly where that's at. It's pretty close to Richard Park. Is that closer to the river? where this project's going to be taking place?

Approximately a third of a mile down the road away from Richards Park and the bridge there. And so if you have seen the new construction ones that were done over the last two years in the ward right there on Ottawa Street, those units, it's one lot over from those. There's a private lot in between those, but it's on the same side of the street on Ottawa, and it's effectively next door to those.

And from an environmental standpoint, You talked about that area of forest. It's not, I guess, considered wetland, but pretty close. Is that environmentally safe to do construction and projects over there?

Yeah, these lots in question are right off Moses J. Jones Parkway, and they're on the commercial strip on Ottawa. And so they're in line with, like, the bait shop and the outdoor store, and they're not environmentally sensitive from a wetland standpoint. Okay, okay.

I'd like to hear from Mr. Dave Duesendink if he's here. Just a second. After everyone has questions and things like that. Thank you, Director.

Thank you, Mr. Chairman. Commissioner Kierkegaard, do you have anything to ask Director Eckholm at this time?

Yeah, just a few questions. Director, do you know what that's going down there?

So the zoning is a commercial business zoning I forget the exact letter designation, but it's allowed for retail storage light industrial things of that nature Not currently not without you'd have to do like a PUD or s for a reason And then I have seen the other condos they look great the ones that have already been up and built and

Are there any safety concerns with the hill behind it and the highway or Moses Jones Parkway, whatever we call it, behind it? There aren't any safety issues from that standpoint, would you say?

No, Commissioner. The builder did a really nice job making sure that they followed zoning guidelines from the planning team and building those in consideration of the rear lot line containing that highway hill. Thank you.

Thank you, Commissioner. Commissioners, any other questions for Director Ekholm at this time?

All right.

If the developer and interested party would like to introduce yourself.

Good evening. I'm Dave Dusending with Midwest Urban Properties.

Good evening, Mr. Dusending. Commissioner German? Yes, thank you, Mayor. Good evening, Mr. Dusending. I just wanted to bring you up to the podium so the public can know who you are and they're probably familiar with you. because you do a lot of work with the city here and the collaboration. And this project here that is basically condos, but you have said something about storage space also for equipment. Now that I have better insight, that's right off of the highway, not over by the old Elks. building, so over there close to Richard Parks.

It's directly across the street from Weber Lumber.

Okay, okay.

Right there by Fisherman's Landing, actually.

Okay. This is before zoning is what it is right now. Okay, I know exactly where it's at now. Tell me a little bit about the project and why you're building these type of condos down there.

Well, apparently it was a chance. I thought it would be a good idea, and it was. We've built nine of them already, and they're all sold. The last one we closed tomorrow. And I've had plenty of calls asking if there's any more coming or if we had any for sale. And I found this lot here as I was searching for the owners of the other one in Tennessee. And that's why I'm purchasing that one. And we'll put the same exact style that you currently see there now. We'll put the exact same style up.

Okay, first, price range for these condos to inquire on.

They all sold for about $170,000, $175,000, and we just had this last one go for $200,000. Okay. Okay. All right, thank you.

No problem. Thank you, Commissioner Jones. Commissioner Kegel?

Yes, thank you. Mr. Dusen, thank you for continuing to do work here in the city of Muskegon. I recently bought a house. I have a really skinny driveway. I do have a dream of owning a boat one day, and my wife's not going to let me put it in the driveway. Okay. So with these condos that you're building, kind of recreational condos, people are like if they have a boat or a bigger vehicle and they can't store it on their property, it's someplace close to the water where they can store their equipment like for the winter and stuff like that. Yeah. Yeah, I think it's a great idea. As Muskegon Lake continues to get more traffic in it, more and more boaters and boating people will want to come to the city.

There's boaters in there right now, and the only thing you really can't store in there is mattresses. But other than that, you can store boats, cars. We have an oil separator in there so they can wash their vehicles, and then we have to have the oil separator cleaned out every year. They'll do like a sludge test on it, and if it needs to be cleaned, it's cleaned out. So we followed all of the protocol for it.

Perfect.

Thank you. Thank you, Commissioner Kugel. Commissioners, any other questions for Mr. Duesendeng? All right. I don't think I have any questions for you.

No worries. Thank you. Thank you, Mr. Duesendeng. Take care. Thank you.

All right. Any other comments, commissioners, if we could vote?

Nope. I'll just share. I like the concept. I've supported the concept in the past. I think it's suitable right across from Fisherman's Landing and our launch ramp there. It's a good concept and it works well. I do have a reservation about selling this particular lot. Personally, it's our only lot that we have on Ottawa Street and as things are in flux over there, I'm a little bit more inclined to hold on to it than to sell it at this time. Well, we have a lot sale policy governing properties for residential, not so much for commercial. This would be for commercial purposes. And one of our longer-term goals is also reconfiguring Moses Joe Parkway, that stretch right there, and creating more green space and better connectivity between Jackson Hill and our waterfront and our downtown. And so I'm a little hesitant of selling this lot right now, where that could factor into are longer-term planning goals. So that's just my opinion. Just wanted to share that and give some explanation as to why I'm voting no on this plot sale at this time. Not to say that I'd be opposed to it in perpetuity, but I'm just not comfortable with it at this time. No slight against the developer. He does good work. And like I said, I had supported the previous builds on Ottawa Street when he came forward and got a land, a special land use permit from the Planning Commission. So those are just my thoughts. Roll call, please.

Vice Mayor Keener? Yes. Commissioner German?

Yes.

Commissioner Jackson?

Yes.

Commissioner Cochin? Yes. Commissioner St. Clair? Yes. Mayor Johnson?

No.

Commissioner Kilgore?

Yes.

Motion passes.

Thank you. Next item. Comedy Month Resolution. Commissioner Kilgore.

I move to adopt the resolution designating the month of August as Comedy Month in the City of Muskegon. A motion by Commissioner Kilgore, supported by Commissioner Cochin. Commissioner Kilgore. Thank you. I have a statement, and then I'd actually, if you don't mind, Mr. Mayor, I'd like to call up the person in charge of the Comedy Month resolution to say some words, if you don't mind.

Would you like to read the resolution first, or at least make the motion first?

Yes.

Oh, wait, no, you already made the motion. Would you like to read the resolution so we know what we're talking about, or do you want him to speak on it before reading the resolution?

Whichever way you'd like to, Mr. Mayor.

Okay. Sure. Gentlemen, kindly come up to the podium and introduce yourself.

Hello, my name is Ricardo Williams-Winston. Yeah, and I came up with the resolution to, I'm a little bit nervous, sorry. Normally when I stand in front of something like this, I'm in court, so I'm just trying to get it together right now. No, I do make the resolution to make August comedy month here in Muskegon. I feel laughter and comedy is one of the things that bring us together as a people and shows how we're more similar than different. Also, it will be another way to drive traffic to downtown Muskegon because we currently, for the past two summers, I've produced a comedy festival. We've brought in people from Nuevo, Grand Haven, as far as Traverse City has come to the comedy festival. 90% of the shows that we put on there are free to the community because I feel like there shouldn't be any barrier to laughter. And I think it would be another good way to activate the parks because we could have a series of shows in the parks to highlight the parks and everything that we have going on. And I just believe that it would be something beneficial for the community as far as bringing everybody together.

All right. Thank you. I do have a question, but Commissioner Kilgore, you made the motion, so I want to defer to you if you want to share anything right now or read your resolution or have any questions.

So a short snippet. One of the things that makes Muskegon such a special place to live in our community is arts and culture. From our museums and theaters to our festivals, music, public art, and local performers, the arts help define who we are as a community. They bring people together, inspire creativity, strengthen our local economy, and make Muskegon a destination for residents and visitors alike. Tonight, we have the opportunity to recognize another important form of the performing arts, and that's comedy. Comedy has a unique way to bring people together from all backgrounds into the same room as sheer laughter and human connection. At a time when it can feel like there's so much that divides us, laughter reminds us what we all have in common. This resolution is not simply about recognizing comedy, it's about supporting local artists, entertainers, and encouraging community engagement, celebrating creativity, and continuing to build Muskegon's reputation as a city that embraces arts, culture, and vibrant public spaces. It's my pleasure to present the following resolution. Whereas the City of Muskegon is committed to fostering a vibrant, inclusive, and welcoming community that values arts, culture, entertainment, and opportunities for residents and visitors to connect through shared experiences, and whereas comedy is a unique performing art, that translates culture, social, and economic differences by bringing people together through laughter, encouraging, understanding, strengthening community bonds, and promoting emotional wellbeing. And whereas live comedy performances contribute to the cultural vitality of the city by providing opportunities for local comedians, writers, performers, venue owners, and event organizers to showcase their talents while enriching Muskegon's creative, economy, and whereas the promotion of comedy and live entertainment encourages residents and visitors to experience Muskegon's restaurants, breweries, theaters, parks, and other local businesses by generating economic activity and supporting small business throughout the community. And whereas the City of Muskegon has earned a reputation as a regional destination for arts, culture, entertainment, and community events, and recognizing the month of August as Comedy Month, compliments the city's commitment to celebrating creativity and strengthening community engagement during one of the city's busiest tourism seasons, and whereas encouraging opportunities for laughter and positive human connection supports the city's vision for creating an engaged, healthy, and welcoming community for all those who live, work, and visit Muskegon. Now therefore, be it resolved that the City Commission and the City of Muskegon hereby proclaim the month of August as Comedy Month within the City of Muskegon. Be it further resolved that the City Commission encourages residents, businesses, community organizations, entertainment venues, artists, and visitors to participate in and support comedy performances, educational opportunities, and community events throughout the month of August that celebrate creativity, laughter, and positive impact of the performing arts. Be it further resolved that the City Commission recognizes the valuable contributions of comedians, performers, producers, venue operators, and art organization whose work enhances the quality of life and economic vitality of the City of Muskegon.

Thank you, Commissioner Kuro. All right, Commissioner Kochen, in support of the motion, would you like to add anything right now?

I think that laughter is so important and especially when life feels like it's coming at you from all kinds of different angles and I think it's something that's universal and it can bring us together and you know like you mentioned it can highlight our parks and it's something free families can hopefully join. That's possible.

Yeah, there could be family-friendly shows.

Okay. And, you know, I think that this is a net positive for the community. And so thank you very much for bringing this to Commissioner Kilgo. And thank you, Commissioner Kilgo, for bringing it up to us and seeing if we would be interested in supporting it. I wholeheartedly support this.

Thank you. Thank you, Commissioner Cochran. Commissioners? Commissioner German.

Oh, yes. Thank you, Mayor. And thank you for being here tonight for this resolution. I love comedy. You know, I go to comedy shows all the time. You know, I think it's good for the soul. Laughter is Commissioner Colton stated. And Commissioner Kilgore presenting this resolution. I just think it gives us the opportunity to just let off you know, issues or problems you may have, you'd be in a kind of a safe space, I would say, to just enjoy and be among, you know, people and friends and, you know, just enjoy yourself for entertainment. You know, as a, I would say, Artists back then, performing artists, playing music and things like that. There's so many different forms of art, and this is one that I think is really good. Are you a comedian? Yes. You are a comedian. How long have you been a comedian? For about 13 years. Oh, okay. So you're not new to the game. No, I've been around. My favorite comedian right now is Cat Williams, and that guy there was a character. Richard Pryor was one of them also. A lot of them out there. Thank you. Thank you.

Thank you, Commissioner German. Commissioner St. Clair.

Thank you. About a month ago, maybe a month and a half ago, the city commission and staff had a goal session, goal planning session, and one of the things that we were asked to do was in small groups describe what we thought the attributes of Muskegon and the people were, and one of the things that came up in our group is it is a community that likes to laugh and has a good sense of humor and doesn't take everything too seriously, and I think that this ties in nicely with that. I think it's a good reflection of who we are and who we want to be. So I appreciate this.

Thank you. Thank you, Commissioner St. Clair. Vice Mayor? Commissioner Jackson? Either one of you wish to share anything at this time?

I think everybody said everything. All right.

This is about to give you an opportunity. All right. So I do have a question. Yes. Because I'm familiar with your last show on the Lake Shore, which is going to be the third year. Yes. And it's over the course of a weekend, and you highlight our downtown businesses. You go from different spot to different spot over the course of a couple days, and I think that's phenomenal. I love that. That's great. Utilize the space and the venues that we have downtown to promote our businesses and bring joy and laughter. And this year we added the Froenthal, so I'm pretty excited for that.

What's that? We added the Froenthal this year also, so I'm pretty excited for that.

Oh, so you're including that in that. Okay. Very nice. What I didn't know about, because I wondered when I saw this, was like, okay, that's a weekend. Why necessarily are we doing a whole month, and what's the tie-in to the city? But new information you shared this evening was your desire to go into the park system. Can you flesh that out some more? Do you have something in motion in that regard that you are looking to... use certain parks throughout the month of August as venues?

Yeah, so my thought was I would like to use the parks that we have, like McGrath Park. I would like the outside theater that they have there would be an amazing place to do a show. And I actually put up a post about it on my Facebook. Just to see if people would be interested in attending. And I got like 2,000 responses and everything. So I was like, wow, okay, people would like to do that. And also I think about All Top Stage right downtown. I think that would be a great place to do it, kind of a pop-up, more of a pop-up feeling. But I have all the equipment and everything to just set up shows outside. I would love to do a show at the art museum. just to highlight comedy as another art form. So I have a lot of different ideas as far as where we could pop up and do shows and just highlight different areas that maybe people aren't going to already.

Excellent. Smith Ryerson's another location you might want to consider. We've got Outdoor Pavilion as well as Indoor Community Center there, the Simray Center. And we have a few other parks at pavilions that you could potentially use small-scale pop-up comedy, like you said. So I dig it, especially expanding it across the city and more of a park system. So laughter is good. It soothes the soul. And as was mentioned, we certainly can use more comedy, more humor. As much as possible. And more community. So thank you, sir. Thank you. All right. Roll call, please.

Commissioner German?

Yes.

Commissioner Jackson? Yes. Commissioner Kochan? Yes. Commissioner St. Clair? Yes. Mayor Johnson? Yes. Commissioner Kilgore?

Yes.

Yes. Commissioner passes.

All right. Thank you. Next item, water sewer utility rates effective July 1st, 2026.

Commissioner German. Thank you, Mayor. I move to adopt the two included resolutions, setting water and sewer rates for the fiscal year from July 1st, 2026 to June 30th, 2027. Support.

All right. We have a motion by Commissioner German, supported by Commissioner Kilgore. Good evening, sir. If you kindly introduce yourself and please report on this item.

Evening Mayor, Commissioners, Dan Vanderhyde, Director of Public Works for the City. This is a resolution that we bring each year, or at least have been in the habit of for the past four. This is a resolution to set the water and sewer rates for the next year. You'll note that staff does recommend a 10% increase in those rates from $2.50 per unit to $2.75. A unit is 748 gallons. This resolution also sets the debt service fees for the two systems, and the combined changes to those debt service fees represents $1.31 per month increase, and those estimates relate to the projects that you all have approved in prior years, and the debt associated with those projects turns into that fee.

Thank you, Director Vande Heide. Commissioner German? Thank you, Mayor, and thank you, Director Vande Heide. Yeah, I pulled this item off because I know we talk about this, like you said, every year. And why the 10% increase? Because you know you'll probably be more likely to be back next year. Wouldn't it be better just to set it at a rate where you wouldn't have to come back every year? I know... Citizens aren't happy about you know, the water rates going up but Can you explain exactly why we need to do this in the urgency for it? I know I thought the sewer race Was okay the funding for that But the water rate I know we're trying to get out of that deficit or whatever so if you can just kind of touch on that a little bit and explain to the public the urgency and and the necessity for raising these rates.

Yeah, absolutely. So a couple of years ago, the Water Fund was in a poor position, and that's when we started coming to you more regularly to request these rate increases. The good news is that that's having an effect, and as of the most recent audit, the Water Fund has a positive unrestricted net balance. But we have the goal of achieving the American Water Works Association's minimum recommended balance within the waterfront, and we're not there yet. So we're making progress, but based on the rate at which we're building funds in that water fund, we believe another rate increase is necessary. As for why we come each year rather than all in one big shot every few years, we're trying to take a measured approach. We're We don't want to over-raise rates, right? We want to keep them at a responsible level, both positive and negative. Also, the intent of raising those rates, we've changed how we do it, and we take a much more forward-looking approach. We get together with the city's financial advisor each year and take a look at the state of the funds and things like that. So rather than taking those big-picture, look at things and adjusting rates in large chunks. We're taking a more annual measured approach that matches a little better how things within the fund and within the system are looking each year.

Okay. And just one last thing. With all the development with the new homes being built around Muskegon, also they have to have water. And has that made a significant impact on decreasing the water deficit? It's definitely helping, yeah.

As we've signed up, you know, hundreds of new units over the past few years and expect even more. You know, those are new customers to the water and sewer system that we didn't have before. So, absolutely.

All right. Thank you, Director.

Thank you, Commissioner German. Commissioner Kilgore? Commissioners? Anything else to ask or add?

No?

All right. Thank you, Director Vander Heide. Roll call, please.

Commissioner Jackson? Yes. Commissioner Cochin? No. Commissioner St. Clair? Yes. Mayor Johnson? Yes. Commissioner Kilgore?

Yes.

Vice Mayor Keener?

Yes.

Commissioner German?

Yes.

Commission passes.

Thank you. Next item, fiscal year 2026 to 2027, sanitation fee. Commissioner Cochin.

I move to adopt the sanitation fee resolution for fiscal year 26-27. Support.

All right. We have motion by Commissioner Kochan, supported by Commissioner German. Welcome back, Director Vander Heide. Please report out on this item.

Absolutely. So this is another fee-setting resolution. This one is for the sanitation department. That department oversees trash collection and street sweeping as its two main functions, although it does occasionally do other things. including picking up trash around around town when necessary the city gets the bulk of the money for sanitation from a property tax however in part due to the recycling program and some of the other costs that we have within the department there's a fee that makes up the difference between what the property tax collects and what our expenses are and in the 2027 budget the the fee, as it sits today, was unable to raise the amount of revenue to cover those expenses, so we are recommending an increase of $0.50 in that fee. This fee appears on your water bill each month.

Thank you, Director Vanderbilt. Commissioner Cochran?

Yes, thank you. I just wanted to highlight that because I don't think that people like seeing their bills go up without knowing that they're going to go up. And you kind of touched base on it, but one of the other issues was also because of the cost of the street sweeping going up, wasn't it?

Yeah, our contract costs with Republic and with Try Us, the trash and street sweeping providers respectively, did both go up this year, yes. Yeah.

Okay. Thank you very much.

Thank you, Commissioner Kochen. Commissioner German, anything to ask about at this time?

Nothing to ask. Everything is pretty clear. All right. Commissioner? Commissioner Kellogg. Thank you. Director, do you remember how long the contract with the street sweeping company is? Three years. Three years. Okay. And this summertime would be their prime time, like when they're out, and obviously we have a lot of miles worth of streets in our city, so even if I said, hey, I haven't seen them, that doesn't mean they haven't been out and about, but they sweep two times a year, three times a year each street, you would say, on average? How many times a year would you say that they would hit a street?

They sweep each street four times a year. If you might If you do see them out and about, it's funny, we hear both that some folks say they never see them and then we have folks who call because they come by their house eight times in a week. And if they do come by your house often, that's typically because there's a parked car in the way and they weren't able to get the entire curb swept or there was a pile of leaves that had to get picked up first, those kinds of things.

Awesome. Thank you.

Mr.

Manager?

I just want to add a little bit of context on the... the millage that we have for sanitation that is subject to headly rollback as well. Um, so that was reduced by three tenths of a mill this year. So just like our other property taxes were reduced, this was reduced. And so we have to offset that with the fees as well.

So good context, um, helpful for understanding.

Um,

And the scenario we were talking about where they come back, maybe there's vehicles in the road and they come back, that's still counted as the one time. It's not like they came by a second time. All right, I figured as such. I just wanted to confirm. I have been seeing them out and about, and I think it's great that we provide that service to our community. I think it's great that we have a wide window for yard waste pickup. I was hearing from a friend of mine who lives in a, I won't say the township, but another municipality, and they're like, man, I wish we had yard waste pickup, you know, They have two months, like one in the spring, one in the fall, and that's it, which they can have that pick up. And I was like, yeah, move to the city. So it is nice. I appreciate that we provide that service. Any other questions or comments, commissioners? Yes, Commissioner Cochin.

Director Vanderhyde, the agreement with Republic Services, when is that up again?

I believe it is up in 2022. I believe it's up in July of 2029.

Okay, thank you.

I was trying to remember, because I remember when we adopted that, and it's five years, and I'm like, okay, picking it, and one of the requirements is them being able to potentially put forward similar to the Grand Rapids system, I think. I don't remember how we phrased it, but it was like next time renewal, they have to be able to have the capability to have different recycling pickup and be able to weigh it and understand it. I don't know. Getting into the weeds.

Detailed information on each pickup.

All right. Anything else, commissioners? Nope. All right. Roll call, please.

Commissioner Cochin? Yes. Commissioner St. Clair? Yes. Mayor Johnson?

Yes.

Mayor Kilgore?

Yes.

Vice Mayor Keener? Yes. Commissioner German? Yes. Commissioner Jackson? Yes. Commission passes.

Thank you. Next item, Rad Dads Agreement. Commissioner Keener, or Vice Mayor Keener.

Yes. I recommend them to approve the agreement as presented contingent on RAD as approval of the settlement agreement.

Support.

All right. We have a motion by Vice Mayor Keener, supported by Commissioner Kilgill. And Mr. Manager, I believe you're reporting out on this?

I am reporting out on this. So the agreement we have before you tonight has been negotiated over a lot of time with feedback from many different parties. What the objective here with this agreement primarily was to try to align the two restaurants that are in the arena, their agreements, to bring those into alignment with each other, looking at their rent on a per square foot basis, the terms, of the participation agreement, this is not a lease, which is a 30-year term with five renewals going through 2057, including all of the incremental increases in the rent that is there. One of the bigger points of discussion between the last time this was up before y'all and now had to do with the build-out of The outdoor service area, that has been greatly decreased to note that they can go, rad dads can go up and along their Western Avenue frontage. The idea of going east over 4th Street over the promenade was removed. There are various different barriers to that, so that is no longer part of the discussion as was removing the electronic sign. um, for there, which, uh, would have been an issue with zoning. So, uh, the other substantive parts of the agreement are very similar. Uh, one, one other thing, the renewal, um, triggers, uh, as opposed to being an automatic renewal. Uh, there is a step where, uh, the city needs to notify rad dads that the renewal period is coming up. Rad dads needs to respond that they want to renew. Um, so there's a, a multi-step process there as opposed to an automatic that's consistent with other agreements that we have as well. Staff is recommending approval of the agreement. This does settle out several other issues that have been discussed in the past, which is why the motion is stated the way that it is regarding the settlement agreement, and then to move forward. Thank you, Mr.

Manager.

Vice Mayor.

OK, I wanted to have this pulled from the agenda so our citizens would have an understanding, because it's a lot going on with this agenda item. Secondly, I know we've been through this quite a bit. This has been going on for a while. But I'm just really not comfortable. And I would really like to pull this item and I'm wondering if I do so move to pull the item, how that affects the current situation.

And by pull, you mean to table it?

To table it to a future date.

Okay.

Is there, I guess I would want to know specifically what the concern would be that you would want us to look at. The concerns, all the concerns that were brought up by the third parties have been addressed. So... And this is very similar to the Carlisle's agreement, the other restaurant in there. So there are other, obviously there's always other factors that are involved. I don't know that there would be anything that would be resolved by that. It's more just aware that there are other factors out there. Okay. But is there any, but Vice Mayor, is there anything specific?

Well, with our conversation that we had, it's just a lot. I just don't feel like any option is a good option. And I'm just still not comfortable because I just feel like any option is... Is it the length of time?

Is it the value of the rent?

It's the length of time. It's the what-ifs with the lumberjacks. It's the... Those are probably my biggest concerns.

I don't know.

And I would like to give opportunity for the rest of the commission to give their thoughts on it too, if they so wish.

So on the length of time thing, it's identical to the agreement that already exists with Carlisle's. Okay. And I just was looking at the agreements just to double check again. And the agreement length is the same. It is a long-term agreement. It is what it is. A previous agreement was approved by the commission with the same length of time back in 2022.

And are we able to discuss that time? Are you able to?

I'm just telling you that it is what it is. Okay. From that, you know, you all can discuss whatever you want. Okay.

Which is how many years?

It goes to 2050, hold on. I just had that page up for a second. 2057. So there's five renewals on here. there's six on the Carlisle's agreement, but there's a several years older. So, but they end in the same year. So, um, you know, as, as far as the what ifs, um, I think there's always going to be what if conversations and, and that's, you know, kind of the conversation that has been had is, you know, how, how do you weigh those things out? Um, this goes to settle out several outstanding, uh, legal issues and, uh, promises that were made or representations that were made over time and trying to rectify those issues. Will that impact other things? It's possible, but you just, yeah.

Okay. Thank you for answering my questions.

Thank you, Vice Mayor. Commissioner Kogo, support of the vote? Yes, thank you.

Mr. Manager, how much on average would you say over the last five or six years per year, do we lose on the arena asset that the city owns? The average would be about 450 to 500,000 loss. Yes. How would you say that this agreement would affect those numbers? Like if we sign this agreement with rad dads, is it going to significantly up that number? of a yearly loss on the asset?

It would increase that number. I don't know that I would say it would significantly increase that number, but it would increase that number.

Two more questions. One is, I saw something about no automatic renewals in this agreement. Is that?

Yes. So there is a renewal structure. The way that the agreement was structured the last time was basically It just auto-renewed unless Rad Dad said, hey, we don't want to renew. This kind of flips that script and says the city needs to notify Rad Dads that they're coming towards the end of that term and that they need to notify us in writing of an intent to renew. So there's an actual multi-step process there where they have to notify that they're renewing as opposed to notifying that they're not renewing. So it shifts the burden from telling us someone's going to stay as opposed to just letting it ride.

And then my last question, there is still a possibility of us selling this asset so the city doesn't have that burden?

I think anything is possible. It's not a public discussion that we've had, but yes. Thank you. Commissioner Kochen.

Yes, thank you. To kind of echo Vice Mayor's concerns, I also was a little taken aback by the length of the agreement. I felt like that's a long time to agree to have one restaurant in a space. Especially something from somebody who's worked in the restaurant world, that's a very long lease. The other question that kind of goes through my mind also is that what Commissioner Kilgore brought up a little bit is the intent to renew. where we have to reach out to them. I know there have been instances where staff gets busy and things kind of get lost or else this is going to be a burden on staff. And have we thought about the cost that that's going to incur for us as far as having a staff member doing that work? Or is this something we typically do across the board?

I wouldn't see this as being an administrative burden at all. It's simply notifying, you know, keeping track of when lease terms change and notifying them that that is the case.

I believe legal counsel has a... And I believe the language as drafted in this agreement is copy and paste from the Carlisle's agreement. So the expectation on the city and how that interaction would occur during the renewal is the same for both restaurants.

And we also have, it's been a while since we went to this agreement, but I also believe with the deck, it's a similar, we notify them on whatever the rotational basis that they're, their rent is changing based on the agreement.

Right, yeah. And I understand that. But I also want to kind of just echo that sentiment of that level of concern. I've heard from a lot of people about concern about the lease at the deck. You know, it kind of puts us in a precarious situation if things go awry to be in a legal contract with somebody for that long. And so that's just what my concerns are.

Could I ask, Commissioner, what do you mean by if things go awry? Because there are many provisions in here that define default, cure, things of that nature, which actually are more stringent in this agreement than in their current agreement.

Mm-hmm.

So I'm just wondering if, yeah.

I don't know what I'm allowed to say and what I'm not allowed to say here. So that's why I'm like, hmm. So, hold on. Legal counsel. In closed session, I can't say anything. Right, okay. That's what I thought. So...

There... Pretty much any type of situation that you can think of is outlined in here on a default.

Mm-hmm.

Um, now obviously you can't think of anything or I'm sorry, anything. You can't think of everything. There's always going to be an example of something that you cannot come up with. Um, but situations that may have occurred or could possibly occur are addressed in this agreement.

Okay. So if something happens and somebody gets angry at us and wants to sue us for some silly reason, um, we can't get out of the contract where we're locked in.

I think, candidly, there's too much of a hypothetical going on there to give a reasonable response to. I apologize.

Nope, that's fair. That's okay.

I thank Commissioner Cochin, Commissioner St. Clair. Thanks.

If my understanding is good, this agreement would provide equity between the properties that are at the arena.

It moves us more towards equity, yes. Okay.

So it's still not an equitable agreement, but it's closer? Much closer. Much closer. Okay. So if it's moving us towards equity, then... I think we can safely say that the scenario that exists currently is not equitable.

There's definitely differences between the agreements, and there's also things in the agreement that... in the updated agreement that are more advantageous to us as far as making things clear on who's responsible for certain operational expenses, how things work, what is and is not allowed, how care periods occur, things like that.

Okay.

So it would align the properties financially. It would give us clear parameters around who is responsible for what in situations that it is not clear right now. Renewals aren't automatic. So every five years we have an opportunity to cure issues.

Oh, even, no, not just any five years. Anytime that there's an issue that comes up that needs to be cured, there's a process within this agreement that we would notify them. Generally, it's a 30-day turnaround that there's a that there's a notice of a breach or a violation, however you want to say it, the cure period, the period of time to fix the problem, and then if that doesn't occur, then there's escalation steps from there.

Okay.

And if there are outstanding issues they couldn't pursue renewal.

Correct.

Yes. This gives us a tighter framework around that. And this might be legalese, but This is not a lease. This is a participation agreement. Can somebody explain to me the difference? Because I feel like that's important. Legal counsel.

So the arrangement that the city has at the arena is a unique one. Both Carlisle's and Rad Dad's utilize the city's liquor license and operate the city's liquor license. So effectively they're operating a portion of the city's business. This is distinct from a lease agreement where we give up possession of of the real estate to a third party business. In reality, this agreement allows for a third party to use the city's license to operate on the city's property, that the city is still the underlying licensee, the city has that underlying possessory right to the real estate. And so I'd say that one of the many but key distinctions between the two agreements is that real estate possession right that with the State Liquor Control Commission, the licensee, the liquor licensee, has to be an exclusive possession of the property at all time. And so this is an arrangement after, if it's approved, would be submitted to the State Liquor Control Commission for approval. And upon approval, then the agreement could take effect.

Okay. Thank you. That's helpful. You know, Commissioner Kilgore's point that we lose a lot of money on the arena every year does not go unnoticed. I am aware that that is one of the biggest drawdown that we have on our general fund. And I keep that front of mind always. I would be remiss to have no concern that this would make the property less of an asset. However, Rad Dads has already made an investment and has been, for all intents and purposes, a good tenant and a good presence. They were willing to take a chance on the arena when it was not a very good environment to be. And I think that's important to recognize. They've done the work for a while, and it is now clear that they don't have the same advantages in their participation agreement that the other restaurant does. And, you know, I have to keep that in mind. I also am reminded of the bird in hand proverb that, you know, we have an active party who has been making an investment in our city for a long time and whatever offers might come in the future aren't on the table right now. And I can't predict the future and we may or may not get somebody that wants to buy the arena and this may or may not impact that but I know that we do have this participation agreement and we do have things that we need to cure so I wish we had a clearer picture but I also understand that we don't so I'm operating with what we have in front of us today and I think my questions are answered as much as they're going to be. That's all I have.

Thank you, Commissioner. Commissioner German.

Yes, thank you, Mayor. Just listening to the concerns from fellow commissioners, one of my major concerns was the legal disputes I just want to make sure that we don't enter into anything like we did before. And from the sounds of it, our city manager and legal counsel, are we as a body, and I should say as staff, you're the ones that's overseeing all of this and getting legal counsel. Are we... I'm sure that we've covered all bases and satisfied both parties because from the looks of it, if I'm correct, my understanding, it's these business owners with this participation agreement, one felt that the other agreement was better than the other, just to simply put it. And that's the whole reasoning for the dispute. Would that be correct to say, and while we're in this situation now, to try to, I say, equitably make it fair to the parties?

Yeah, so that's one of that was one of the issues that we brought up. There's also the settlement agreement that we talked about. So it does, it does cure several different things and it does bring those agreements better into alignment. And, you know, and I've been, you know, transparent with a number of you and, and including with the business owner as well, the, you know, if I was starting from original whole cloth, this would probably look different. But the fact of the matter is, is that we were dealing with, with an agreement, that was approved by the commission in 22 and trying to line those things up. And, um, the, and this does that, I think as best we can. Um, and it also, uh, you know, makes clear what rad dads and its ownership is able to do regarding future expansion. And, and we address the concerns of other parties that came forward when we started having the public discussion about this after having many months of private discussions. And we address those concerns as well. So I do think that this puts us in a solid position moving forward. There are unknowns. There's always going to be unknowns. But that's also why you guys get to make tough decisions sometimes. And I have to make recommendations on what I see as the best course forward. I do think this puts us in a better position vis-a-vis the topics that we started talking about as it relates to rad dads.

Okay.

Okay, thank you. And also there's been some talk about the arena being sold possibly. I don't see this agreement actually making things better because there was an agreement before then and we're still in the same position that we're in with a deficit, how could this agreement impact that deficit on the arena? Oh, yeah.

So I think very good question. So like I stated previously, this does impact that. This will impact revenues into the arena because it impacts the rent at the arena. But the objective here that we went into this was to align those agreements up. So that does negatively impact that. I don't think it substantially negatively impacts it, but it does negatively impact it. So that is part of the consideration. But considering the other potential liabilities that exist there, I think this is a decent path forward.

Okay, thank you. Commissioner German, Commissioner Jackson.

Yeah, so sorry if it says it already in an agreement, but is this price higher or lower than what they're currently paying? Lower. Yes. Significantly lower?

It is... over $1,000 lower on their actual rent per month.

To match what Carla is.

Yeah, so it's based on a build-out cost per square foot. So they're a little bit different. And then the restaurants are different sizes. So the actual square foot rent is not going to be the same. But it's based on costs that we can attribute between the two, and they are pretty similar at this point.

And then arena participation payment.

Yeah.

The teams pay?

So that's a unique feature of the participation agreement because there's additional participants in the arena, lumberjacks, risers, iron men, things of that nature. And the different participants benefit from having those other establishments there. And I think, you know, there's arguments that both the restaurants benefit from the sports teams and the sports teams benefit from the restaurants. But because the, and I'm sure I'm going to describe this not as eloquently as legal counsel would, but I'm going to try and then he can correct me. Um, because the sporting events are ticketed events where they're not generally open to the public, you have to pay to get in. Um, there's, there's what's seen as value there for, um, folks who are in the restaurants who are not paying to be in the restaurant. Um, they're paying for the food and drink and things of that nature, but they can still see the action that's going on on the ice or the court or the field. And, um, this sets parameters on how, um, in this case Rad Dads, in the other case Carlisles, makes payments to the sports teams during those events. The reason it's in here is because if it's not and they're not able to come to an agreement between themselves, there has to be a trigger in here where the city can force something as the primary owner of the building and the liquor license. So ideally the way this is is that In the first part, it says that rad dads will either, one, work with the arena's hockey league, soccer league, indoor football league team, collectively the teams to reach agreements for compensation for each game played in the arena. That's the ideal. That's generally what happens now. Those or second options are if there's not able to come to an agreement, we then have a trigger agreement. that we can come in and say you need to do this because you're getting benefit from having a sporting event by having people come into your establishment. For the most part, the first part that I read, that's how it works.

And then what is the campaign?

That's the common area maintenance fee. So that's like utilities and things of that nature. That does not include, there's also a property tax equivalent. bill that goes out every year, that's outside of the CAM fee. So the restaurants pay their rent, the CAM, and the taxes, property taxes. And we also get income taxes and things of that nature.

Okay. Those are all my questions.

Thank you, Commissioner Jackson. Any follow-up, Commissioners?

Just one more thing, maybe. Yeah, I see something in here. We talked about it before in that build-out, possibly. Has there been any renderings or drawings or anything presented by Rad Dad?

So there was. It created some conversations, and so that ended up being removed. That was the Exhibit B that you see noted in Paragraph 27 of the build-out. Um, that, uh, was removed. Um, and so, uh, the compromise there was that they would have the ability to do a build out at their expense and that, uh, they would have to go through the, you know, the planning zoning process, the compromise being a third party could come in to consult, uh, on that. So it's not maybe just if, if there's not able to be an agreement, there's a third party, you can kind of come in and look at it. That was the compromise there. So.

Okay, that's all I have. Thank you, Commissioner German. Thank you, Major.

Could just go to roll call and Vote the way I want to vote. I'm torn on this. I really am. I see all sides of this, and I understand the intent to find, to bring it closer to parity to one of the other tenets. As a matter of fairness, and I understand that. And that is a level of equity. Being equitable. And I appreciate that and broadly I would support that. My dilemma is that I don't think that the other tenant's lease is necessarily fair to the arena or the city. And that is, and so adopting an agreement that brings it to parity with that is double downing is something that I think is fair. That's where I struggle. So there's different levels of fairness and equity involved here. This was mentioned. This undermines the fiscal sustainability of the arena. I mean, it wasn't worded that way, but it doesn't necessarily improve the deficit and could potentially exacerbate it. And not just in the next few years, but potentially for up to 30 years. So that's concerning, the length of that. the inequity of low market rents relative to private enterprise in the area. So it weakens the fiscal sustainability of the arena and the value of the arena itself. But it helps us navigate from other issues and brings resolution I'll say this stand alone I would be no. As the agreement stands alone I would be no. I do appreciate some of the more recent changes that have been made to it. I appreciate legal counsel and our city manager for the considerable amount of time considerable amount of time that has gone into exploring all of these different scenarios, agreements, complexities, implications.

That's why I'm so torn.

I mean, both of you are very intelligent men, and I trust your judgment, and I respect your professional opinion. That's why I'm struggling on this. And I don't think you necessarily are making a bad recommendation, given the totality of the circumstances. But my God is saying no.

Mayor? Yes. Oh, no, go ahead. I see Commissioner Cochran, I think, had a hand as well. I mean, I kind of struggle with it, too. That's the reason for the questions. And from hearing from other commissioners, I think there's some concern also. So I'll make a motion to table this.

COUNTERPARTIES. IF WE MAY, BEFORE ENTERTAINING THAT MOTION, SEE IF ANYONE ELSE SUPPORTS THAT, I WOULD WELCOME THE COUNTERPARTY TO THIS AGREEMENT TO STEP UP AND INTRODUCE YOURSELF.

I APPRECIATE THAT. I JUST WANT TO SAY FIRST I UNDERSTAND THE CONCERNS THAT ARE BEING BROUGHT UP. THEY MAKE SENSE TO ME. I GET IT. I GET THE STRUGGLE. I'M SORRY.

COULD YOU MENTION YOUR NAME, PLEASE? SORRY.

MATTHEW GONGOWSKI, OWNER OF RAD DEADS. SO I APPRECIATE THE STRUGGLE. I'VE BEEN WORKING WITH THE CITY MANAGER. and Mr. Gorman for quite some time to try to resolve a lot of these issues. I kind of have three points, but one thing specifically in regards to where the arena sits today and the deficit that it finds it in. There's a couple thoughts on that. One, this has been an ongoing thing for decades back where the city's been losing money like this, so this isn't necessarily a new problem. I don't think it's fair to try to solve that problem with the tenants necessarily. And that's the answer to that. So you kind of try to solve one with another. I understand that, but I feel like that's a little bit unfair and there's a bigger picture to that. There's also within the arena and the state that it's in right now, I know that there's kind of at a loss on how to solve that problem and how to solve that deficit. But there are professionals out there, experts in the field that, have offered to come forward to help to address these concerns. I've got industry experts that have said, hey, they've come to Muskegon, and I think one thing to really keep in mind, I know you guys know how special and important the arena is, but it's extremely unique to have an arena this size in your downtown on your main strip. That sets us apart from almost every other arena in the country like this. And so when people visit, especially experts that are familiar with this, they are just like blown away in awe of what we have here and the opportunity we have here. So I think we haven't, one of the things that I don't think has been done yet is reaching out to those experts to say, hey, look at this, what can we do? What are we missing the mark on? And that's kind of an important piece of the puzzle before we go to the tenants to try to solve this or before we just say, hey, let's just sell it because this is such a hindrance. And so I understand that maybe at the end of the day, the city's not the best entity to kind of manage that. Maybe there is a better partner out there that has the expertise that could take it off the city's hands. But I think it would be wise to kind of get that information before making any decision on how you move forward with a potential sale or not. So that's kind of one thing with that. You know, I feel like a few years ago leading up to COVID, we had a plan for the arena on how to kind of get out of that deficit. And COVID hit and just kind of dropped a bomb on everything, as we all know. But that plan, also during that time, that plan kind of went out the window. And then there's change in leadership, change in management, change in everyone else. And so I think a piece of the vision was kind of lost during that time and during that transition. You know, in the last several years, to my knowledge right now, and this is no knock on anybody involved, because I think everybody there cares about the building. They're doing the best they can to manage it. Um, but I've asked, there's no business plan. There hasn't been any strategic planning. There hasn't been a gathering of all the, um, uh, what do you call it? Like the, the, um, all the parties involved to say, Hey, what can we do? Or here's the struggle. Are there, are there things that we can do to resolve this? Um, whether it's in lease agreements, you know, it's not just rad dads, but it's all the agreements with all the teams on maybe there's ways to make that better. Um, regards to the rent I know at first glance looking at it you look at the duration which the duration is less than or equal to Carlisle's it's less than what the lumberjacks have right now so it seems like a long time but there's a lot of factors that play into that you look at the square footage right and you might say that this is I think you said it's considerably lower or lower than what the average is in downtown right now but other factors that that are in play that aren't that this makes us unique that isn't the same as any other agreement is We also pay the teams $500 per game for every team for every game. That's not in the rent, but essentially it's a piece of our rent. So that raises it up. On top of that, the sponsorship dollars that the arena gets, and I know that's kind of upside down with what the Lumberjacks get and what the cities get as far as who takes in what and how much. I think there's room to kind of maybe evaluate that as well. But some of those are based directly off of, well, to begin with, Rad Dads before Carlisle's was there, but now Rad Dads on Carlisle's. that's how those numbers are determined. So for an example, one of the beverage sponsorships when before rad dads was right around $20,000 a year is what they were giving immediately after redheads came into the picture, it was $75,000. So we don't get that. The arena and the lumberjacks split that up. Um, you know, all the rebates between Pepsi and their sponsorship money, you know, that goes to you guys. Normally we would get that, that a hundred percent goes to you guys. So when you start to look at all things being equal and kind of compare and looking at all the different items, um, the rent isn't just the rent and isn't, isn't maybe as, um, favorable as it may seem compared to everybody else. Cause it's complex. There's a lot of pieces to the puzzle there. So it's not just a, I don't want you to feel like, Oh, like they're, they're getting such this great deal. It's, it's a, I think it's a fair deal. Um, but there's, there's more to it than just the price per square foot that any other place on the street, you know, wouldn't, wouldn't have those, those layers to it. Um, and It's also, you know, and obviously I don't want to go into all the details right now, but kind of important to remember how we got here, and I think maybe that might be a misunderstanding too. It's not just, oh, they've got this deal, so we want this deal, because that's fair, right? And although I think that is fair, it should be fair and equal, that's not necessarily how we got to this point. You know, early on, when Rad Dads first started, we had what was called a management agreement. And that management agreement wasn't submitted to Liquor Control at the time. They needed to approve that. When Liquor Control was made aware of it, they said, hey, we don't like this management agreement. We want a participation agreement. And this was kind of around the same time that Carlisle was coming on board. So they said, hey, we want you both to have these participation agreements. Get rid of the management agreement. During that time, so we had to negotiate what that would look like. I did with the city, and so did Carlisle's. And so we did that, and I hired somebody to kind of help navigate that with me and negotiate with the city. And during those conversations, it was said, hey, let's just – instead of having these different agreements, let's make them the same. Let's make them equal, and that will be an easy way to just kind of be clean and be done with them. So we had an agreement, which is what Carlisle has today. I was understanding that we would have the same agreement. As part of a penalty that the city received for the issue with the management agreement, They had to put their license in escrow for a week, and so the arena's license was shut down for about a week. And the day before we were supposed to open back up, I was approached and told that I had to meet a city staff member to sign the agreement to finalize it for liquor control. And this agreement was not what we had negotiated. It's the agreement that I have today, which was not similar to the other restaurant at all. And I said I felt very comfortable doing so, but it was told to me that if I didn't sign it, I did not have an opportunity to share it with council or even consider it. It had to be signed before 9 o'clock the next morning that Rad Dads would not be allowed to reopen, Carlisle's would not open, and the arena would not be allowed to reopen with alcohol sales. So that's kind of how we got here. I was told that it was easily to be amended. We can, we meant things all the time. It was just the wrong agreement that was sent to liquor control. So we'll amend it right away afterwards. Well then there was change in leadership. Uh, that individual resigned very quickly and new leadership was unaware of that and just said, well, this is, this is your agreement. This is what you get to live with and deal with. And so if that paints a little bit better picture, that's kind of why it's been a struggle for the last three plus years is it's not just about making it equal. It's like this is what was agreed upon beforehand from my view. Obviously there's other layers to this that you guys are aware of too, at least to some degree, that played into this. And so I don't feel, I still feel a little bit like I'm getting the raw end of the stick here. I know it might not seem that way from you guys, so I'm trying to navigate those thoughts and feelings and learn from all this. But this to me is almost a bare minimum of resolving the overall issues. So if, if we can't move forward or come to an agreement on this, then we have to reevaluate everything. And I really don't want to go through that process again or, or continue down that cause it's been, I know it's exhausting for you guys. It's been exhausting for me. Um, you know, to date over these last three years, I'm about $90,000 deep in lawyer fees that I've had to pay and I can't even begin to share the amount of emotional and financial stress. This has caused me as well. So, um, Looking at it as a single item, I get the concerns. Looking at it as a big picture, I think this is a pretty fair deal for everybody involved to help us move forward. And hopefully I'll pursue good and better things. I think everybody here, although there's been differences and maybe not all on the same page or understanding, my interactions with Mr. Gorman and the city manager and the rest of the city staff have all been great as far as we want. we want resolution, we want resolve. So there's no animosity or anything like that. It's just, how can we get this wrapped up? So I don't know if that helps paint a little bit more picture or not or answer your questions. I think there is work that could be done and opportunities to see how to help the arena out, whether that's through a sale or other things that could be done where it's missing. I'd be happy to help with that or share anything I can. So I don't know. That's my two cents, I guess.

If you have any other questions, I'd be happy to try to answer them, too. So, thank you. We appreciate you sharing those insights, that background, and more of the complexities of the situation in the historical context. There's definitely complexities involved here. Good perspective of context to understand, too, that it's not an apples-to-apples comparison between your situation and, say, another restaurant down the street in a completely private facility that they've got a lease agreement. There are some unique factors that play into the cost incurred by yourself. I wholeheartedly agree with you on the benefit of doing strategic plan. With regard to the arena, that's been part of my frustration, and I've had conversations with our city manager about that. moving the arena into a more physically sustainable position. It is something that has been bedeviling our city for many years. I've been on this commission, this is my 13th year. When I first joined the commission, there was talks of demolishing the arena and being done with it. And the commission said, no, we're going to invest in it. with the intent to not only make it an amenity for our community, but also invest in it to the point that we can get it to a more fiscally sustainable, revenue neutral point. And part of that was creating retail and food and restaurant and bar space, not only to activate that section of Western Avenue, which was important for our Main Street, But as another revenue generator for the arena, although I do not, I agree with you, I do not think that we need to be looking to only our tenants to get us to a revenue neutral or a more fiscally sustainable. I don't think that onus is only on the tenants of our arena. There are things we need to do. And that's why I do think a strategic plan to understand whether it is, what can we do with the existing operations? What can we do to change operations? Do we need to seriously entertain a sale? Do we need to... bring in additional programming. How can we get it to be more revenue? That's the thing, because we've been spending hundreds upon hundreds upon hundreds of thousands of dollars subsidizing this facility for many years. I remember one year it was over $800,000. Now that I think was the pandemic year or the year after one of the pandemics here. I think that might have been 21, 2021. Yeah. Over $800,000 paid to subsidize this arena. And it's pretty regularly $400,000 plus. And That's a challenge, because that's money being taken away from so many other different programs and services and infrastructure investments, capital improvements that can be made across our city. And that's why we really need to get a handle on the arena. And that's just my reservation here. That's my reservation here, locking us into something that could potentially undermine that for decades. I don't know how to square it right now. I know Commissioner Cochin had something she wanted to say. I know Commissioner Germant had a motion on the table. Before we entertain, can we hear from Commissioner Cochin? Oh, sure, definitely. Commissioner Cochin.

Yeah, I've got two things. So the first question is, if the arena is sold, how would that change the liquor license agreement?

So I think, I guess the... The arena being sold is a theoretical thing.

Right. I know, but I'm asking because that's part of the process here.

Anytime that you sell a building with a liquor license, that's an asset as well. So that would most likely be sold with it.

Would be sold with it. Okay. So would they have to go through the hoops? That's a question for... I saw your last name, Gonski, had mentioned. Is that...

So I would understand the expectation if we sold the arena... whoever the party would be would likely be interested in the liquor license. And I would expect that as a part of that process, we would require assignments of the participation agreements. These are participating management agreements to go with the liquor license so that the new liquor licensee, whoever that buyer is, would then carry over the two businesses in the same capacity. So effectively, whoever the buyer is would take the place of the city within these agreements.

Okay, so the agreements would effectively stay the same.

Unless otherwise negotiated between the parties, which would then be their discretion. Right.

Okay.

All right. And just also for clear information, we also have non-liquor participation subleases in this building as well.

Okay. Yeah.

So it's not just the two restaurants. There are others. Yeah.

Okay. So feel free to grab me by the collar if I go too far off place here. But when I talked to the city manager the other day, we were discussing this issue and I was not fully aware of the, the length of term. So that's why I was bringing that up tonight. Cause I was like, Ooh, that's, that is a long time. Um, but we talked at length about what that could look like, what that would mean. And while I do feel that this agreement is not necessarily the best deal I think that we don't have anything on paper from anybody saying that they are going to purchase the arena at this time and unless we have something on paper I don't want to make decisions necessarily fully based off of that so in my mind I don't know if we can come to a better agreement than what we have here, because we've been doing this for a couple of years now. I don't necessarily know if tabling it would help, but I would not be opposed to it per se. But I just wanted to share kind of my thought process with the conversation that I had with the city manager, where I said, this is not ideal. I don't love it by any shape of the imagination, but I think this is probably the route that we would want to go.

Thank you, Commissioner Kochen. Commissioner Kilgore.

Thank you. Before you move to the motion, under Section 20 of this agreement, there are many protections in this agreement for the city. So I don't see them doing so. They've been a good tenant. But if Red Dead's defaulted on certain parts of this agreement, then that wouldn't necessarily... this has to be 30 years, no matter what, like there are a lot of protections in here for the city. Also on top of that in business, in situations like this, a 30 year agreement with renewal periods throughout the agreement are pretty consistent in commercial agreements or commercial real estate. So, um, and I also agree that tabling this won't, change this agreement that has been worked on for quite some time so i personally would like us to call for the question and vote on what we have in front of us this evening all right i'm going to entertain this motion first uh because it's made i just want to ask is there any support for commissioner german's uh motion to table

And if not, then we'll consider the call to question. Hearing no support for Commissioner German's motion to table, we have a motion to call to question. Do we have support?

Yes. Support.

We have support from Commissioner St. Clair. There's no debate or discussion on this motion. It does require two-thirds support to move forward. Madam Clerk, roll call, please.

Commissioner Kilgall?

Yes.

Vice Mayor Keener? Yes.

Oh, I hate to do this.

So right now, this is a motion to end debate. Just want to clarify, not a motion on the agreement itself. Okay, okay, yes. It's a motion to end debate.

Yes, yes, okay, yes.

So your vote is yes? Yes. Okay.

Commissioner German?

He said a motion to end the debate. This is a motion to end debate and move forward with the question, voting on the underlying motion. I'm going to say no.

I think there's still more to talk about.

Mr. Jackson? Yes. Commissioner Cochin? No. Commissioner St. Clair? Yes. Mayor Johnson?

I'm deciding vote on this. You are. Because saying yes means we can't make any additional motions to amend. And it goes voting on the original motion. And so, no.

Motion fails.

So the reason why I said no on that is because potential consideration of modifying the proposed agreement. And we couldn't entertain that if we move forward. I'm wondering... I have a feeling that if this was forced to vote on the original motion, it would be shut down. It would not get the four votes to move this forward. What I'm wondering is the prospect of reducing the term. For those that may be inclined to vote no on this and are opposed to it, would they... Would they position move or evolve to support it if the term were to be shortened? Let's say we did five years with two optional renewals. Would that change the equation for anybody that's on the fence or inclined to vote no on this agreement?

For me, it would.

For me, it probably wouldn't because negotiating at this juncture now, I think tabling it would be probably the best way to just look at everything and come back with a clear and understandable agreement or to sort out any Discrepancies or anything like that because what I'm hearing and what I've heard from some of the commissioners tonight there were some uncertainties and what ifs and If the arena would be sold I made it clear before I'm opposed of selling the arena I think the gentleman that read it has some excellent points that the city has not Really looked at getting more people involved. I know our staff and legal counsel are sitting at the table when we're having these discussions, but commissioners aren't there, so we don't get the full scope of things also. Not to say that you don't bring back valuable information, but I think it would be better We were involved and sat down and had a conversation and listened to the interesting parties to get a better understanding and maybe even ask questions then and there instead of at this juncture where we're here and we have to vote on things that's presented to us. I know that's how business is done, but in certain cases I think we can make adjustments and probably do things a little different because we want to make both parties happy. you want to sustain the arena and get out of that deficit talked about a strategic plan I mean there's ways we can do this and I've been on the commission 14-15 years now and we've had these issues and selling the arena I don't think is the way out but who's to say that if we sell it we may not get the best bargain that we should. So, I mean, there's a lot of what ifs, me too, and concerns. So, I would be in favor of tabling this and coming back with a straightforward agreement where all issues and discrepancies are sorted out, hearing from the different parties and That's just my perspective and my thought. I think it makes more sense to me.

Thank you, Commissioner German. I think I saw Commissioner Coachman. I know Mr. Manager, you had something to weigh in. I meant to share the study you were talking about, potentially shortening the term. I would be more comfortable for that longer term if it came with a stipulation of an investment of a certain amount. Because you're talking about an expansion, typically. sometimes there's a trade-off. Like you get a longer period of time, you make a significant investment in this. So that could change the equation for me. But Mr. Manager, do you want to chime in before we go to Commissioner Kochen?

Yeah, as far as on the tabling, if their staff would want clarity on what topics that you would want to address, because we did it. got removed a couple weeks ago. We went back and had discussions with various different parties that were involved. Five different parties weighed in on this that made tweaks to the agreement. It seems like the term is the part that's the most, at least from what I'm hearing now, concern. Obviously the fiscal impact on the arena is part of it too. But looking at the bigger picture, of what was talked about and how all these things weigh together. Um, you know, understanding exactly what it is because the, you know, staff and, uh, and rad dads have had extensive conversations on this and really trying to line things up. Um, and without really knowing exactly what that is, um, it would be hard to just table and not know what the changes would be. But also I think that, I'm trying to think if technically if it's tabled, it has to be the same thing that comes back, I believe. Couldn't amend it. Okay. Yeah, I guess we could amend it. Refer it back. Refer it back to staff.

It would be the same motion that would come back for future consideration. At that time, we could choose to amend it.

We don't have another July meeting.

Yeah, we don't have another July meeting. So the next meeting is April. We'll do a special meeting, but we do not have an August schedule.

Sorry.

Yeah. Yes, August 11th. Okay. So our next regularly scheduled meeting will be August 11th. Yeah. Commissioner Cochran, did you have something?

Yes. You had asked, you know, about if people would be more willing, given, you know, that the term was shorter. And I think I would be, you know, I'd be way more comfortable if the term was shorter, obviously. You know, you had mentioned, you know, five years, I think I'd even be comfortable at 15. So, like, I just wanted to throw that out there, but I don't know if anybody else is thinking about that.

Just to clarify, because I said five years with the option to renew for two terms, so it would be 15 years. Oh, okay, sorry. Yeah, 15 versus the 30, yeah. Gotcha. If they were to exercise the renewals, it'd be for 15 years. Now, as I was mentioning, if there was a, at that 15-year mark, if they've invested a certain dollar amount, as they expect to, but this is a trigger, like, if you invest a certain dollar amount, then it you know, allows additional renewals. That could be one way to approach it. But I feel like I'm getting into negotiating now. And so I'd rather either vote on it, amend it, or refer it back to the staff for consideration of what has been discussed.

And I would be remiss if I didn't at least point out again that the other agreements are for 30 years or longer. And so there is... precedent that the commission has set, now granted, different members of the dais, for 30 years. So I just want to make sure that that's known.

Web question?

Yes, Commissioner Jackson.

When was that decided for the other term?

The Carlisle's agreement was done in 2022. There was no one before that. That was an updated one. Yes, well, it was done in... It was the participation agreement. Yeah, 2020. Oh, gosh. Well, March of 22, I think, was the first for Carlisle, and it was updated in the fall. Oh, there was one before that? Okay. And then, I don't know when the lumberjacks was. It's been amended many times.

So for the teens, is it just lumberjacks, or do we have individual agreements with the risers and...

We do have individual agreements with the Risers and the Ironmen, although using the Ironmen as an example, they have a year-to-year contract that only spans typically their season and budgets in time for their playoffs, so it's not an ongoing contract. I believe since the season's over, they wouldn't have a contract right now, but the expectation would be in the fall as they get their schedule set, that's usually when we would negotiate the terms of that agreement.

Okay. And so it would be similar... It's similar now for rad dads where they could come back in a year and say that they no longer want to be participants, correct? Like they could end their lease agreement?

If there was mutual, yes. But that's not... The comparison to the... Iron Men to Rad Dads isn't a good one for one. It's a very different type of contract altogether. Their agreement allows them to use the space, operate a certain way, whereas the participation agreement is a lot more involved because of the liquor control considerations. And the usage agreement that the Iron Men has allows them to operate on our premises as a third party entity, so they just get to operate themselves. Whereas because of the liquor license consideration, both Carlisle's and Rad Dad's effectively operates a piece of the city. And so there's a lot more detail that goes into this agreement because of that type of a relationship.

Okay, that makes sense. Thank you.

All right. Well, first of all, did anyone have questions for Mr. Gronkowski? Because he offered to answer questions. Did anyone have questions for Mr. Gronkowski? Hold up.

I want to hear from Commissioner Kilgore first. Commissioner Kilgore. Thank you. It's not that I don't have questions for Mr. Gronkowski. I just were teetering on. negotiating here at the dais and let's say that we don't pass this agree to this this evening and we want shorter terms or we want this and that we just have to understand that the other party might not agree to anything that we want and then we're back to square one and with the majority of the communication going through certain channels up until this point they could continue to go through those channels and that's that's a chance we would be taking by saying we want X, but the other party still wants Y. So it's to my understanding right now that the other party is in agreement with this and we could move forward with other things we need to do as a city. So if we vote and we vote no and no wins, it's going to go back for different stuff anyway. If we vote and we vote yes, then we have an agreement. Is that correct? If we vote no, it's not like it's going to go away.

I mean, if we voted no, then Rad Dads, Mr. Gengalski, and I would have to have a conversation on what happens next. And then we would figure out if there's, you know, Changes that can be made or things of that nature, but yes, what's before us tonight was agreeable to the other party.

Thank you.

Thank you, Commissioner Pilgrim.

Commissioner Germani. Yes, thank you, Mayor. With the back-and-forth discussion that's going on now, it's almost like we're negotiating or trying to figure out how to resolve this issue. That was the whole reason for making a motion for tabling, to try to get a better understanding so we don't have to go through this. Now, whether the other party, RADDAS, decide or disagrees, that's just part of bargaining and negotiations. Most of the people that have dealt with unions and things like that, that's what you do. But I'm optimistic that you've made it this far that some type of agreement, um, could be, um, agreed to, um, because I think that it's been a lot of progress from, from where we were to this point. I just think at this juncture, we just really need to just fine tune it. And when it comes back in front of the commission, um, I think there's an agreeable, um, consensus where we could all vote in favor of it, instead of just it's in pieces and trying to negotiate and cherry pick and talk about things, you know, at this point.

Thank you, Commissioner Chairman. Commissioner Cushion?

Yeah, I just wanted clarification on one thing. I'm so sorry, sir. Mr. Gungowski had mentioned wanting, you know, equity with Carlisle's due to some promises that were made previously. When is their current agreement up?

2057. Carlisle's or Reddats? No, Reddats. Oh, um... Do you know? Oh, um... Oh, sorry, that's a different section. I got too many agreements up in front of me. Do you have a follow-up question while I look for that, Commissioner? Well, I'll share my thinking. 2042, thank you.

So my thinking is that Mr. Gonskowski wants to make things right and whole, and based on promises that he was made at that time, And there was a contract that was put in place for Carlisle's. And I understand that he wants this reduced rent to make things a little bit more equitable. The thing that I'm struggling a little bit with in my mind is... If Rad Dads is able to renegotiate while they're in the middle of their agreement, why couldn't Carlisle's do that? And so I think that where I struggle with the timeline is that he's able to do that and Carlisle's is not. And so if it was more in line with where it was already set, as far as the timeline goes, I think I'd be more... amenable to that. So that's just kind of what I'm thinking. Cause I don't want Carlisle's to come in here and go, well, wait a second. Rad dad's got to do that. Why can't I renegotiate now? That's just what my thought is.

Yeah. Um, so I think a couple of things. Um, so I have had conversations with Carlisle's, um, so they understand, you know, what we're doing. They did have questions about it. Obviously, uh, the, the terms of the agreement, um, are, uh, are very, very similar. So some examples, in RADDAD's current agreement, their CAM fee is lower than Carlisle's. This increases their CAM fee to be equal to Carlisle's. It lines up the expiration of the agreement. I wouldn't anticipate Carlisle's coming back and asking for amendments to the agreement. they did have their agreement amended in November of 2022, which is one of the reasons that we are having the conversation now the way that we are, or because of some of the changes there. Right. Okay.

Thank you.

Did I answer? Yeah. 2042. Okay. Sorry. I wrote that down.

All right. Commissioners, unless I hear any other motions. I'm going to go to roll call.

Should we repeat the motion? Oh. Since it's been so long in the discussion.

Oh, I'm sorry. Mr. Gungoski, yes. If you'd like to, final remarks before. All right. Yeah, just real quick. Sorry about that. Welcome back.

Yeah, it's not the. Can you just please reintroduce yourself for anyone that's just tuning in? Yeah, from Red Dead. Yeah, the terms aren't. aren't that much longer. He said 2042 or whatever to 2057. So that's what currently exists. So it's not that much longer of an increase that's abnormal to this type of deal. Even though it seems long from today, it's not when you're just extending it from 2020 or 2042 to 2057. So that's kind of one piece, but also the bigger piece is just to try to keep in mind, like as commissioner Kogo stated, I think earlier that, you know, you guys entrusted Mr. Gorman and Mr. Seifert to kind of help navigate and negotiate those things. And we've, had more conversations than what would be, what time would allow here or might be appropriate here in this time to do. So I would hope that you would kind of trust their judgment and where they're at and knowing that if this is what they're bringing forward, you, we've worked through all of the nuances and all of the questions and all of the negotiating back and forth. So from my perspective, you know, there's not really any more room to negotiate cause we've exhausted that to no end. Um, If we were to take off, hypothetically, you want to look at reducing the terms, well, changing a section over here affects a section over here. Then it's like, well, how are we reconciling this? So it's part of a complete picture, not just this one document right here. Without going into all of it, but we weren't allowed to be a part of the social district. The only restaurant on the street that wasn't allowed to be a part of the social district because of issues the city had with liquor control. Nothing to do with us for two years. By the city's numbers, we lost roughly $300,000 worth of revenue over those two years. There were other layers to this is where I performed work for the city that I was told I would be paid for. I was never paid a dime for that. So over years, rough numbers were roughly $300,000 for that. There could be some discrepancy on the amount of work that was qualified or what that number is, but work was performed that wasn't paid for. this collectively as a whole settles a lot of things. So it's not just the extension of this or the rent and this, it's part of a much larger picture that I think we would spend hours and hours going through. And even if we all got together, it would probably still be confusing for everyone in a room. I would have loved the opportunity to be able to share my accounts and my perspective with you guys as a group. From my understanding, you know, I kind of feel like Maybe the system's broken a little bit in a way to settle these issues. The fact that it's taken well over three years and that I, as a person who's invested heavily into downtown, I don't even like saying all the things, but we've given over $250,000. We were just going over it with the accountant the other day since we've opened back to this community. That's a substantial amount of money for a restaurant. We're not a big developer or have all these resources to do, but we care about the city. We give back tremendously. We try to play an important role here, but losing my train of thought here. But all that being said is please keep in mind that this is part of a larger picture. If there's a delay or we have to go back to the drawing board, then I feel that we're at a point where we're just too far apart that we would have to let courts decide what we're going to do, and I don't think anybody wants that. And that's not being said in any sort of threatening way. I don't want you guys to make a decision out of fear of that or anything like that at all. It's just we've done everything else we can do at that point. I feel like, okay, when I said earlier this is a bare minimum, I feel like there's nothing left for me to negotiate, that I would have to kind of go that route to be able to settle things. And I'm hoping that's not the case. But I guess that's all I can say with that. So thank you, guys.

Thank you, Ms. Gungalski. I do want to acknowledge there were a few different numbers thrown out there and assertions made about what should or should not happen in the past. And I just want to acknowledge that that is – Mr. Galsky's opinion or perspective on that. We are not acknowledging or conceding any of those things here. And essentially, there's a number of things that happened in the previous administration that is causing consternation that's continuing. And we're here trying to resolve and rectify those things. Coincidentally, you know, we heard that it would be extending from 2042 to 2057, which is 15, or no, yeah, 15 years, which, you know, goes back to my suggestion of potentially doing five years with two optional renewals. But unless anyone wishes to make that motion, then I'm going to proceed with roll call.

Commissioner Singh? We have it.

to approve the agreement as presented contingent upon Red Dead's approval of the settlement agreement.

Thank you. Commissioner St. Clair? Yes.

Mayor Johnson? Thank you.

I'm sorry. I usually don't like doing this, but I am so torn on this.

No.

Ensign Kilgo?

Yes.

Vice Mayor Keener?

I strongly appreciate everything Red Dead has done, came in, when it was nothing down there. This does not settle well with me right now. And so, no.

Commissioner German?

No.

Commissioner Jackson?

Yes.

Commissioner Cochin? No. Yes. Motion passes.

Thank you. Next item. Unfinished business. Nelson House Purchase Offers. So they may proceed.

Do we have a motion? I move to endorse the recommendation of staff and authorize the realtor and the city staff to negotiate and execute a purchase agreement of the Nelson House with Tobin Bailey and And Jesus G. Paz Sato. Support.

All right.

We have a motion by Commissioner Akiko, supported by, I think it was Vice Mayor Keener. What was that, Commissioner Jack? Vice Mayor Keener. All right. Welcome. Kindly introduce yourself and please report out on the site.

My name is Jamie Pesch with the City of Mesquite Planning Department. So, the last place we were at the previous meeting was for identical offers of $150,000, the reserve price for the house. At that time, the commission requested that staff go back and request the highest and best offer from all of them. We are glad to report that all four potential buyers did submit offers again. Two of them increased their offers, and two of them remained the same. One of them didn't really make any changes to their offer. And at this time, staff is remaining with their original suggestion, recommendation of Bailey and Pasoto for the purchase offer. This is not the highest purchase price offered. It's actually 10,000 lower and follows an escalation clause. But this is what staff is suggesting or recommending. A buyer's agent was used for that as well. So the... 5% fee will go up to 6% and staff Saw this offer. It seemed to be the most complete offer of all of the four received they went through the house with contractors for various parts of the improvements needed to obtain a certificate of occupancy and They have the highest value assigned to the renovation costs and I would say based on what we were provided the most accurate and They had quotes from multiple trades on what would be needed. They prioritize the interior renovations basically needed to occupy the house, but obviously do not forget the exterior changes. They plan to start immediately with the work and start making improvements both to the grounds around the house and the house itself to make it more presentable to the passersby. And they plan to do this work and complete it to get a CFO in a year's time. I'm happy to elaborate on any of the other offers that we received, but that sums up more or less why the first offer presented before you is staff recommendation.

Thank you, Mr. Pesch. Commissioner Kugel. Thank you. Mr. Pesch, thank you. I know at our last meeting I asked you to go back and kind of give us a summary. You did a very good job of breaking down all four offers. A lot easier for us to digest and see. The estimated renovations is a critical part of this house, A, being in the historic district and being a historic home. It's not everyday renovations on these type of homes. And you showing that set apart that offer from the other. So at this time, I'm willing to concur with staff recommendations and accept the first offer. Thank you.

Thank you, Commissioner Kilgore. Vice Mayor Keener, anything to ask or add? I don't. All right. Commissioners? Commissioner Cochin.

Yes, I do have a few questions. Thank you very much for taking the time to go back over this with everybody. The first question I have was in regards to the staff recommendation. When you were telling us how long it was going to take them to get their C of A, did you say one year or eight years?

One.

Okay.

Yeah.

That's helpful. Um, then the other question, uh, is in regards to the offer here, it says an escalation clause up to one 65. So when we're looking at the one 51, five 50, that's not the number that is being offered. Is that correct?

It was being offered unless there was a counter offer that was higher and they would raise it by $1,500 more than what was counter offered up to a value of 165. Um, Because the counter offer is at $175, staff recommends that $165 be obtained for the purchase price.

Would be the purchase price. Okay. I've got you. And then this one does not mention – is that a cash offer or is that financing? Yes.

All four were cash.

All four were cash offers. Okay. Okay. And I know you, you sit on the HDC with me, and we talk a lot about all kinds of renovations, as Commissioner Kilgo noted. I know that you have a keen understanding for what it takes to renovate one of these homes. The only thing that gave me pause, and I kind of want to hear what your thoughts were on it, was the information where they were talking about wanting to replace the windows?

Right, yeah, that... Obviously the condition of them has not been thoroughly assessed. I don't think with any of these offers, just because you can't really dive into the house and do that. We had stipulations since the house was moved that any tours wouldn't allow for like exploratory demolition or anything like that. So it's kind of hard to assess it completely. The documentation that was provided with the offer stated that the intent would be to repair the windows first. and it would be likely that some of them would require a replacement. I don't think that any definitive statement could be made one way or the other about repair or replacement at this time, but just, As you know, the Historic District Commission reviews everything on a case-by-case basis. It's not out of the realm of possibility that proper replacement windows could be approved by that board. It's just a matter of getting to that point of deciding, does it make financial sense to replace? Are there physical reasons that you would replace or repair?

But there's a lot to be determined. And I bring that up because we do have that conversation quite frequently. And I wanted to make sure that we had the conversation that We're not going to be entertaining vinyl windows on that home.

Yeah, separate discussion with the Historic District Commission, but the offer was familiar with the HDC and the role that they play in reviewing exterior work.

Okay, I appreciate that. And then the second offer, the offer from Pavlik, that one was a cash offer for $175. Obviously, it's $10,000 higher. Is it because they didn't walk through it with the contractors and they didn't have kind of the same elaborate notes?

That was a part of it. Staff was more comfortable with knowing that contractors had reviewed work. And then when looking at the cost breakdown that's provided, some of the larger projects that would be needed to obtain a CFO for the house were significantly lower in terms of what they were priced at to a point where it was borderline concerning that the estimate maybe didn't line up with what one might hear from a contractor. And yes, the lack of walking through the house of the contractor implied to us some level of uncertainty with exactly what's needed to be done for the house. That offer also prioritized exterior improvements. Some of the higher ticket items that they proposed were exterior and appearance related, not so much getting down into the utilities needed at the house and the improvements that are needed for occupancy.

Okay. And then I think I caught Hill and Vorpagel after the meeting at the previous session, and I had talked with them about the work. Now, you had said that in here the staff was concerned about the limited budget not allowing the work to be completed. I know when I talked to them, they had intended to do this work over a long period of time versus immediately to be able to flip it, basically. They wouldn't want to do that. They would want to live in the home and continually work on it over time. Did you have that conversation with them?

I didn't speak with any of the potential buyers directly.

Gotcha. Because, yeah, they were quite interested in restoring the historic nature of the building, especially with the exterior. But I do see that that cash offer is lower than the two that we're looking at right now. And then the fourth offer... Nothing looks like anything changed down there in that fourth one.

Nothing changed in the fourth offer.

Okay. The... For transparency's sake, I just want to say this. So before the meeting, I was asking Commissioner Kilgo, because he's a realtor, about what the preference would be as far as being able to get the most amount of money from the home... whether it be a cash offer or a mortgage offer, because I was trying to understand the differences. So I just wanted to say that out there publicly, if anyone's like, why are they talking to each other? That's why, because I wanted to find out, you know, why we're looking at the 165 versus the 175 versus the 150. So thank you very much, sir.

Thank you, Commissioner Cochin. Commissioners, anything else to ask or add? Nope. All right. Thank you, Mr. Pash. Roll call, please.

Vice Mayor Keener? Yes. Commissioner German? Yes. Commissioner Jackson? Yes. Commissioner Cochin? No. Commissioner St. Clair? Yes. Mayor Johnson? Yes. Commissioner Kilgore?

Yes.

Motion passes.

Thank you.

Thank you, sir. When did Mr. Pash... When did we get started with this? This was relocating the house and everything. That was three years ago.

A number of years ago was the first conversations we had about it. And I think I first walked through it back in 2021 when it was at its old site. And I think we're coming right up on the two year anniversary of the move. So it's great to finally somebody's hands that's ready to do what needs to be done at the house. Absolutely. They seem to be good stewards of it and do it justice.

Thank you. And hallelujah. All right. I see Commissioner Kugel's hands up.

So are we under any other business? Commissioner Kilgall. Thank you. For those that are still around watching us, please don't forget, if you heard earlier, this is our only meeting for the month of July. The primary election date is August 4th, Tuesday, August 4th, but we have 10 days of early voting. Early voting opens July 25th, am I correct?

Nine days. Nine days of early voting.

We still start on July 25th. Yes, that's correct. Awesome. So early voting opens July 25th. So please make sure to vote. And for those that are coming to visit our city this weekend, bike time starts this week. And please be aware and watch out for bikers. Bikers, please ride safely. And then I would like staff to look into the flag in the front of City Hall. It is starting to tatter. I would love for us to replace that flag, please. Thank you.

We should have some in reserve. On the note of bike time abroad, I saw a communication shared with regard to adjustments to the social district this year. Mr. Manager or Ms. Sweet, if one of you wish to, or Mrs. Sweet.

So this year the social district will close at 10 o'clock on Friday and Saturday night rather than 11 o'clock. This is just for during bike time. Last call for social district restaurants is 930. So the goal is, and this was an idea of the restaurants, by the way, the goal is to step down activities on Western Avenue. We also communicated to the restaurants and to actually all the businesses on Western Avenue and throughout the DDA that even during Rebel Road and bike time that the city's quiet hour ordinance is still in place, which means at 11 o'clock all outdoor, um, amplified music, whether that's a DJ, a live band, radio, whatever it is, um, needs to stop. Um, you can still have activities inside, just can't have the sound carrying outside. Um, and again, the goal is to step down activities throughout the night. So, right.

Um, so that's, uh, ending, uh, last call at nine 30 and, uh, No social district outside drinks after 10 p.m. But any of the restaurants and bars that are continuing to open will continue to serve inside, as well as any beverage tents serving inside, specifically with regard to the social district.

Yes, and Director Sweet did go... door-to-door the other day and hand out new social district signs that are specific to the Rebel Road week, so that way the signage is updated. They have to put those signs up. I went into a couple of restaurants over the weekend. Most of them already had them up, so that's great. So there's notifications there.

Thank you much. Commissioner, is there anything else to bring into any of the business? Commissioner German.

Yes, sir. Thank you, Mayor. I would just like to personally say thank you to staff, city commission here, for sending a sympathy card to me. I lost my mother on Father's Day last month and I really appreciate the card and the prayers that you all did and sent our family. It's greatly appreciated. Today also is my mother's birthday. She would have been 82 today. So I just want to say thank you and everyone that You know, prayed and also sold to Vice Mayor for your service with your catering service. That was greatly appreciated. And all the other services. This is one of the hardest things that I've had to do in my life. And I've done a lot of hard things. And our family is still mourning. But this is something that we all have to go through. And it just reminds me of a prayer, a scripture in Exodus 20. 12 where it says honor thy mother and thy father that thy days will be long on this earth and anyone that has a mother here and a father they should definitely honor them and appreciate them and give them their flowers while they're still alive because even though my mother's gone and passed on and today is a heavenly birthday for her I will be going to her grave shortly after this meeting to give her flowers because that's something that I've always done on a birthday so I'm grateful to have her, well, 63 years of my life, but she lived to be 81 years. So thank you much. Thank you, Commissioner German.

And you and your family will remain in our hearts and prayers. Commissioner Cochin.

Yes, just a couple things. So there was an email that I'd received regarding the disability pride flag. We had unfortunately gotten the incorrect size flag, but the correct size flag is up right now. And then I also wanted to note and say thank you to All of the staff and the board of the Silversides and any of the commission that was able to show up yesterday to see the Silversides ship towed to Sturgeon Bay over there in Wisconsin to dry dock. It was an amazing sight to see our community come together to see the ship off. And I'm really looking forward to seeing it come back in October. Then lastly, I wanted to say thank you to our clerk for assisting with the lighthouse mascot voting. It was a great opportunity for her to get involved and teach our youth about the importance of voting and how it works. And I think it was a great way to do outreach in the community. So I wanted to thank her as well.

Thank you, Commissioner Gretchen. Anything else, commissioners, to raise?

No?

Okay. We're going to go to public comment. Do you have any forms, Senator Clark?

I do not.

I do not have any. Anyone in the audience wish to give public comment? Our audience has cleared out, pretty much. All right. We're going to go to the phones. That's 231-724-6721. This is an opportunity to give public comment on anything you wish to share with the commission. You're speaking directly with the city commission. There's not enough time for back-and-forth Q&A. or dialogue. We can arrange that if that's so desired at a separate time. When you're calling in, please turn down any audio in the background. That phone number is 231-724-6721.

I do have a call.

Good evening. You're with the City of Muskegon City Commission.

Yes, hello. My name is Dave Duggan. I'm a bicyclist. I really enjoy our Muskegon Lakeshore Trail, whether I go to head to the nature preserve or out to the beach, which I've done here recently a few times. Unfortunately, once you get out to the beach, it's not really bicycle friendly. The boardwalks are nice. You've actually got two choices when you get off of Lakeshore Drive, I believe it is. I can ride my bike on the Muskegon Lakeshore Trail, and then at some point I have to pop onto Lakeshore Drive, which is no problem. That's totally safe. And then I continue to head towards the beach area. And when I get out to Bluffton, I have the option of hanging a left and going above, what is that, the water treatment facility there? And then I can pop down through a really beautiful forested area. I don't know the name of that forest. And then ultimately you pop down into a little neighborhood area and then continue on and finally you're at the beach. When you get at that point, you get to some really nice boardwalks, okay? But those boardwalks only go so long and then you have to get down to street level to go over to the beach areas, that's where it becomes bicycle unfriendly. It's as if the whole plan wasn't totally brought into being. It ends who's ever had the vision, that vision ended, in my opinion, at the end of the boardwalks. Now, some people might make the argument, oh, hey, there's paved bike trails on both sides. Well, yes and no. On the side with the boardwalks, those trails are very limited. They don't go very far. On the beach side, those boardwalks are fairly narrow. And in my opinion, those are more for the pedestrians, the people that park there and get out and walk those trails. Now, I just want to say that I see that there's a huge opportunity for the city to have a marquee experience for people to be able to bike out at the beach. It would have to be planned out by someone who's, you know, obviously by engineers that have experience doing that type of planning. But, you know, interestingly enough, because I've rode my bike several times, all the way out, not just to the lighthouses, but also to the submarines. That's as far as I've gone with the submarines.

Mr. Duggan. That is your time.

I'm sorry.

That's okay.

But we appreciate you calling in and sharing your spectrum from the Jackson Hill neighborhood. And I look forward to seeing you again in future office hours. That's how I know what neighborhood he's from. I was like, I didn't realize he said that. Do we have any other callers?

No, Mayor.

Okay. Just another few moments. I didn't hear anyone trying to call in. No. All right, does it sound like we have any additional callers? So commissioners, we actually have something.

Yes, so well, we've got the city manager evaluation on there, but we're gonna, we have to add a second closed session, which we're gonna do first. And this will be for an update. So I'm gonna read this motion and then we will go into closed session. Well, I need a motion and a second from what I read. I move to go into closed session to consult with our attorney regarding trial and settlement strategy concerning in regards to Leitzman Management LLC, Adelaide Point QOZB LLC, Adelaide Point Voter Services LLC, Adelaide Point Building 1 LLC. Waterland Battle Creek LLC case numbers 826BK02696-CED, 826BK02698-CED, 826BK02699-CED, 826BK02700-CED, and 826BK02701-CED because a discussion in an open meeting would have a detrimental effect on the litigation or settlement position of the City of Muskegon.

So moved. Support. All right. We have a motion by Commissioner St. Clair, supported by Commissioner Kogel. Requires five votes to go into closed session. Roll call, please.

Mr. Kochan. Yes. Commissioner St. Clair? Yes. Mayor Johnson? Yes. Commissioner Kelgo? Yes. Vice Mayor Keener?

Yeah.

Commissioner German? Yes. Commissioner Jackson? Yes. The motion passes. All right. In closed session we go.