A special meeting of the Council for the City of Crystal Falls was held in the Council Chamber of the City Hall on Tuesday, December 19, 2006 at 4:00 p.m. Central Time.

Present: Mayor Hendrickson, Councilors Heikkinen, Smokevitch, Valesano, and Bicigo

Absent: None

Also present were City Manager Nordeman, City Attorney Lawrence, and City Clerk/Treasurer Olson.

Visitors in attendance included: Julie Melchiori, Ron Basso, Lynn Perry, Pete Nocerini, Mark Simeoni, and Tim Hunnicutt.

The purpose of this special meeting was to consider the following items:

Meet with prospective developer of the Crystal Manor building (Tim Hunnicutt of Hovey Co.).

Fox Sports Net Contract renewal.

Mayor Hendrickson led the reciting of the Pledge of Allegiance.

Manager Nordeman introduced Tim Hunnicutt of Hovey Co. to the Council and the others in attendance.

Mr. Hunnicutt gave the Council a brief history of the Hovey Co. and explained how their housing projects focused on historic preservation and the needs of the community.

Attorney Ron Basso spoke in support of the Hovey Co. noting that Hunnicutt and the Hovey Co are favorably recognized by MSHDA from projects they have completed in the past.

Attorney Basso reviewed the Crystal Manor Development agreement with the Council, noting some changes that were made from a previous draft.

The Council asked various questions and Tim Hunnicutt responded regarding the process Hovey Co. needs to go through to secure MSHDA funding.

Mayor Hendrickson seconded by Councilor Valesano moved to approve the Crystal Manor Development Agreement with the Hovey Companies as follows:

THIS DEVELOPMENT AGREEMENT, is entered into December 19, 2006 (Effective Date) between the City of Crystal Falls, 401 Superior Avenue, Crystal Falls, Michigan 49920 (City) and the Hovey Companies, 124 East Washington Street, Dewitt, MI 48820 (Developer).

WHEREAS, the City desires the redevelopment of property located at 400 Superior Avenue, Crystal Falls, Michigan (Property); and,

WHEREAS, the Developer desires to use the Crystal Manor to create residential housing as well as to assist in the construction of commercial/retail establishments in a manner to be determined by the parties; and,

WHEREAS, in order for the Developer to initiate a re-use of the Crystal Manor, it may be necessary for the City to be an active participant with the Developer; and,

WHEREAS, Developer desires to actively pursue the re-use of the Crystal Manor; and,

WHEREAS, the parties desire to enter into this Development Agreement in order to:

a) Designate the Developer as the exclusive developer with which the City will work on this project; and,

b) Provide the City the opportunity to establish a Payment in Lieu of Taxes (PILOT) and offer Developer other incentives to rehabilitate the Property.

NOW, THEREFORE, the City and Developer hereby covenant and agree as follows:

1. The Developer, in exchange for being given exclusive development rights of the Property, agrees that construction for rehabilitation of the Property shall commence at a date determined by the Michigan State Housing Development Authority (MSHDA) which date is anticipated to be 18 months after Developer makes application to MSHDA for this project. Commencement of Construction, for purposes of this agreement, shall mean that time when the construction company or other contractor chosen by Developer begins performing work on the site of the Property.

2. The Developer agrees to file its full application with MSHDA no later than April 1, 2007.

3. The Developer shall provide the following to the City immediately following MSHDA feasibility determination:

a written redevelopment plan indicating the proposed re-use of the property including the general nature and extent of the rehabilitation to be undertaken,

a time schedule for such undertaking and completion of the rehabilitation of the Property,

a budget reflecting uses and sources of funding for the project,

the number of jobs anticipated to be created, and

a list of individual investors and a commitment letter from a financial institution indicating that the Developer has funds available to complete the project.

a market study demonstrating the need for affordable housing in the designated geographic area.

4. The Developer shall retain and pay for a Michigan licensed architect to prepare sealed plans for the rehabilitation of the Property and a Michigan licensed contractor to provide construction services. Architectural and construction services shall be contracted by the Developer and commenced at the Developer’s discretion.  Any documents produced by said service providers are the property of the Developer if they have been paid for by the Developer.

6. The City shall immediately commence procedures to establish a PILOT, pursuant to section 15a of Public Act 346 of 1966, being MCL 125.1415a. The City agrees to exempt real property taxes on the Property for a period to be mutually agreed upon by the parties. The amount of the PILOT shall also be mutually agreed upon by the parties. All procedures enumerated in Public Act 346 of 1966 to establish a PILOT shall be followed by both parties.

7. The City agrees to pay the costs for the appraisal of the Property up to a cost of $3,000 and the costs for a Phase I and Phase II Baseline Environmental Assessment up to a cost of $5000.

8. The Iron County Brownfield Redevelopment Authority is in the process of establishing a Brownfield Plan for the Property and the City agrees to work with Iron County to pursue Brownfield dollars from the Michigan Department of Environmental Quality if the Property is determined to require remediation under Michigan law.

9. The Developer also understands that there may be a Federal Historic Tax Credit available as well as a State Historic Tax Credit available. The City agrees to assist the Developer with the Part II Historic Preservation Certification Application to be filed with the State Historic Preservation Office.

10. The City agrees to assist Developer in applying to the Michigan Economic Development Corporation and the Michigan State Housing Development Authority to seek funding based upon job creation pursuant to the rehabilitation of the Property.

11. The City agrees to utilize $75,000 received from the County to leverage matching funds for infrastructure improvements to the Property.

12. The City also agrees that it has committed an additional $100,000 of matching funds/ in-kind services which shall be in the form of a grant to the project. An individual chosen by the City shall be responsible for administering the grant. The parties agree that services provided as assistance by the City, either enumerated in this agreement, or later agreed upon in writing by the parties, or as determined necessary by the grant administrator, shall be included in the grant award of $100,000. Any funds expended under this section which result in documents being produced for the project shall be the property of the City. The City shall allow Developer the right to use said documents in developing the property. Further, if the project is terminated for any reason, all of the work product and support material shall be immediately turned over to the City without any charges being incurred. The Developer also agrees not to release any work product produced as a result of monies expended under this section and shall keep such information confidential.

13. The parties agree that the property shall be purchased by Developer at a time and price to be determined. Before purchase by Developer, the City agrees to allow Developer access to the property for purposes of performing activities in developing the property pursuant to this agreement. The Developer agrees to obtain liability insurance, at its own expense, to insure the City against liability for injury to or death of persons or damage to property occurring in or about the property. The liability under such insurance shall not be less than $500,000 for any person killed or injured; $1,000,000 for any accident; and $1,000,000 for any property damage. The above referenced policy of insurance shall be maintained in force until the property is purchased by Developer. The Developer releases, waives, discharges, and covenants to hold harmless the City, its officers, employees and agents from any and all liability arising out of this agreement

14. This is the entire agreement between the parties and as such may only be amended by written amendment executed by both parties.

15. This agreement shall be subject to the laws of the State of Michigan.

16. This agreement shall inure to the benefit of, and shall be binding upon, the parties and their permitted successors and assigns.

17. This agreement shall automatically terminate if the Developer fails to commence construction for rehabilitation of the Property, as described herein, at the date determined by the MSHDA in paragraph 1 above, unless otherwise agreed upon in writing by both parties.

18. Any communications in writing shall be delivered to the parties at the address described above.

Ayes: Mayor Hendrickson, Councilors Heikkinen, Smokevitch, Valesano, and Bicigo. Nays: None.

Motion carried.

Mayor Hendrickson asked Mr. Hunnicutt to attend the January 8, 2007 meeting of the City Council. Due to another commitment Hunnicutt indicated that he could attend if the Council met earlier in the day. Mayor Hendrickson moved up the meeting starting time to 4:00 p.m. for the January 8, 2007 meeting and directed Clerk Olson to post the change.

A discussion regarding the Fox Sports Net contract renewal was held. Manager Nordeman explained the option of appointing the National Cable Television Cooperative, Inc. (NCTC) to serve as collective bargaining agent for the renewal of the Fox Regional Sports Network contract rather than entering into a new contract with Fox Sports Net.

Councilor Bicigo seconded by Councilor Heikkinen moved to enter into an agreement to appoint NCTC as the City’s collective bargaining agent for the Fox Sports Net contract.

Motion carried.

Councilor Heikkinen seconded by Mayor Hendrickson moved to adjourn this special meeting of the City Council.

Motion carried.

Meeting adjourned at 5:10 p.m.