City to solicit real-estate proposals for historic Nelson House after repairs; reserve price set, staff seek market feedback

Jake Eckholm, director of development services for Muskegon City, told commissioners on June 9 that staff will issue a request for proposals (RFP) for a professional real‑estate firm to market and broker sale or redevelopment of the Nelson House, a large historic property the city acquired and relocated for preservation.

Eckholm said staff completed foundation replacement and roof repairs on part of the building and that total city investment on the project will be between $2.5 million and $2.6 million once outstanding roof work is paid. He said the RFP, which closes July 10, requests firms’ qualifications, fee schedules, comparative market analyses and proposed marketing scopes. Staff received few comparables during preliminary outreach and asked for broker expertise to identify appropriate buyers for the unique property.

Why it matters: The city acquired and stabilized the property to preserve a significant historic structure and return it to the tax rolls. Staff said a lower sale price than the city’s total investment is possible because the brownfield/infill restoration plan includes tax‑capture reimbursement over time.

Key details discussed

- Reserve price and comps: Staff indicated a proposed reserve price of $100,000 in the RFP package. Eckholm and commissioners noted one received comparative-market analysis ranged between $70,000 and $100,000; several commissioners said on‑the‑ground market observation indicates the structure and lot have substantially higher material value but that renovation costs and marketability of an extensive restoration are limiting factors.

- Renovation scope and marketability: Eckholm told the commission that full historic restoration estimates collected earlier ranged from roughly $800,000 to $1.1 million for a full historic-grade restoration; interior mechanical/electrical/plumbing and asbestos abatement work drive costs. The city plans to require proof of financing for redevelopment and will evaluate offers for owner-occupiers and redevelopers. The Historic District Commission regulates exterior design and materials; interior modernization would not be prohibited by HDC rules.

- Fiscal rationale: Staff described a tax-recapture brownfield mechanism that would reimburse the city over time as the property’s taxable value grows, with an estimated multi‑year horizon to recoup the city’s upfront investment.

Next steps and commission direction

Eckholm said staff will distribute the RFP to major brokerages and local realtor associations, accept proposals by July 10, and return to the commission with a recommendation if contract thresholds require commission approval. Commissioners asked staff to ensure broad MLS exposure and to bring back any offers that materially affect the city’s investment or the community’s preservation goals.

Commissioners reiterated support for preserving the structure but acknowledged the tradeoff between a lower immediate sale price and long‑term tax and community benefits if the house is restored and returned to productive use.