Allegan council requires $150,000 security before building permits for Girl Scout property

Allegan — The City Council on Dec. 22 approved an amendment to the purchase-and-development agreement with Allegan Development Company LLC that requires the developer to deliver a $150,000 security instrument acceptable to the city attorney before the city will issue building permits for work on the 14.55‑acre property commonly called the Girl Scout property.

City manager Joel told the council the change shifts the timing of the security — a performance bond or revocable letter of credit — from closing to the permitting stage. "We recommend that the $150,000 guaranteeing completion of the project . . . be provided as a condition to the issuance of building permits," he said, describing the revision as reviewed by the city attorney and the developer's counsel.

Developer Patrick Kapinga, who was in the audience, told the council his group has funds set aside in a 1031 exchange account and wants to close before year-end. "We have the cash. It's called a 1031. We sold some property, and that cash is in a 1031 account, and we need to use that by the end of the year," Kapinga said. He said that securing a long-term security instrument for the 36‑month term required in the original agreement had been difficult at this early stage of the project.

Resident Matthew Pivovar used the second public-comment period to press the council for more scrutiny. "The developer can come in and clear cut all 14 acres of land," Pivovar said, warning that without pre-permit security the city could be left with a stripped site and no recourse. He added, "A $150,000 performance bond is tiny" for a project of this scale.

Background: earlier in 2025 the council approved sale terms for roughly 14.55 acres to Allegan Development Company for $100,000, and the purchaser deposited $10,000 in earnest money. As part of the closing and development steps the city and developer planned to convey the riverfront portion of the site to a local conservation district to create public riverfront access. To enable that conveyance, the council voted earlier in the meeting to approve the required lot split.

Council members asked staff clarifying questions about timing and protections. Joel said moving the security requirement to the permit stage still protects the city because the city will withhold building permits until it holds a security instrument that staff and the city attorney find acceptable. The approved amendment also preserves the council’s ability to require additional remedies in the purchase agreement if the project does not proceed.

The council approved the amendment by voice vote. The developer indicated readiness to close quickly but noted some insurance and financial institutions were unwilling to offer the requested security instrument for the original 36‑month term while the project remains in early approvals. Next steps: the developer may close per the purchase agreement, but building permits will not be issued until the city receives the $150,000 security in a form acceptable to the city attorney; the city will also continue technical reviews, including any Brownfield or planning-commission steps required before construction.