[Adopted 4-25-2005 by Ord. No. 504]
Editor's Note: This ordinance also repealed former Art. I, Elderly Housing Tax Exemption, adopted 10-24-1977 by Ord. No. 253.
This article shall hereafter be known and cited as the "City of Grand Ledge Clinton Street Senior Limited Dividend Housing Association Payment In Lieu Of Taxes Ordinance."
It is acknowledged that it is a proper public purpose of the State of Michigan and its political subdivisions to provide housing for its citizens of low income and to encourage the development of such housing by providing for a service charge in lieu of property taxes in accordance with the State Housing Development Authority Act of 1966 (1966 PA 346, as amended, MCLA 125.1401 et seq.). The City is authorized by this Act to establish or change the service charge to be paid in lieu of taxes by any and all classes of housing exempt from taxation under this Act at any amount it chooses, not to exceed the taxes that would be paid but for this Act. It is further acknowledged that such housing for persons of low income is a public necessity and, as the City will be benefited and improved by such housing, the encouragement of the same by providing certain real estate tax exemption for such housing is a valid public purpose; further, that the continuance of the provisions of this article for tax exemptions and the service charge in lieu of taxes during the period contemplated in this article are essential to the determination of economic feasibility of housing developments which are constructed and financed in reliance on such tax exemption.
The City acknowledges that Clinton Street Senior Limited Dividend Housing Association Limited Partnership (the "Sponsor") has offered, subject to receipt of a mortgage loan from the Michigan State Housing Development Authority to erect, own and operate a housing development identified as the "Clinton Street Senior Apartments" on certain property located in the City of Grand Ledge, County of Eaton, State of Michigan, which is legally described in Exhibit A, to serve persons of low income, and that the Sponsor has offered to the City, on account of the housing development, an annual service charge for public services in lieu of taxes.
Editor's Note: Exhibit A is on file in the City offices.
The City desires to enact this article, establishing availability of a tax exemption to developments as described by the Act, it being expressly understood that the City shall consider any and all future tax abatement for low-income or elderly housing under Act 346 of the Public Acts of 1966, as amended, only by adoption of a resolution or ordinance relating to such housing development.
As used in this chapter, the following terms shall have the meanings indicated:
- The State Housing Development Authority Act, being Public Act 346 of 1966 of the State of Michigan, as amended.
- ANNUAL SHELTER RENT
- The total collections during each calendar year, or portion thereof, from all occupants of the housing development representing rent or occupancy charges, less such amounts as are paid by the Sponsor for gas, electricity, heat, water and/or sanitary sewer service furnished for the housing development.
- The Michigan State Housing Development Authority.
- AUTHORITY-ASSISTED MORTGAGE
- A mortgage loan on a housing project made by the Authority or to which the Authority allocates low-income housing tax credits under Section 22b of the Act.
- The housing development known as the "Clinton Street Senior Apartments" for low- and moderate-income seniors.
- HOUSING DEVELOPMENT
- The low-income elderly housing project to be located at 300 – 400 Clinton Street, City of Grand Ledge, a development which contains a significant element of housing for elderly persons and persons of low income and such elements of other housing, commercial, recreational, industrial, communal and educational facilities as the Authority determines shall improve the quality of the development as it relates to housing for elderly persons and persons of low income.
- MORTGAGE LOAN
- A loan to be made by the Authority to the Sponsor for the construction and/or permanent financing of the housing development.
- The Clinton Street Senior Limited Dividend Housing Association Limited Partnership, a Michigan limited dividend housing association under Chapter 7 of the Act and a limited partnership under state law, which has applied or is applying to the Michigan State Housing Development Authority for an Authority-assisted mortgage to finance the housing development.
- Fuel, water, sanitary sewer service and/or electrical service, which are paid by the housing development.
It is determined that the class of housing development to which the tax exemption shall apply and for which a service charge shall be paid in lieu of such taxes shall be for low- and moderate-income housing for seniors which are financed or assisted pursuant to the Act. It is further determined that the Clinton Street Senior Apartments is of this class.
[Amended 2-21-2006 by Ord. No. 509]
The housing development to be owned, constructed and operated by the Sponsor and the property on which it shall be constructed shall be exempt from all property taxes from and after the commencement of construction. The City, acknowledging that the Sponsor and the Authority have established the economic feasibility of the housing development in reliance upon the enactment and continuing effect of this article, and the qualification of the housing development for exemption from all property taxes and a payment in lieu of taxes as established herein, and in consideration of the Sponsor's offer, subject to receipt of a mortgage loan from the Michigan State Housing Development Authority to construct, own and operate said housing development, hereby agrees to accept payment of an annual service charge for public services in lieu of all property taxes. The annual service charge in lieu of property taxes shall be 5.9% of the annual shelter rent.
Notwithstanding the provisions of Section 15(a)(5) of the Act to the contrary, a contract between the City and the Sponsor, with the Authority as third-party beneficiary hereunder, to provide tax exemption and accept payments in lieu thereof as previously described, is created by enactment of this article. Failure of the Sponsor or its successor in interest to operate and maintain said project so as to be eligible for a payment in lieu of taxes as provided in this article or a judicial determination of a material violation of the Act or regulations of the Authority shall be deemed to be a violation of this article and default hereunder. Notice of such violation shall be provided to the Sponsor and the Authority and, if not cured within 30 days after the date of notice, the City may revoke this article pursuant to Section 8 below.
Editor's Note: See MCLA 125.1415a(5).
The service charge in lieu of taxes as determined hereunder shall be payable in the same manner as general property taxes are payable to the City, except that the annual payment shall be made on or before March 1 of each year following the year for which said payment is applicable.
[Amended 2-21-2006 by Ord. No. 509; 10-23-2006 by Ord. No. 514]
Subject to the right of the City to revoke this article as provided in § 187-6, this article, and the annual service charge specified in § 187-5, shall remain in effect for as long as an Authority-assisted mortgage for the housing development remains outstanding and for so long as the Authority has any interest in the property pursuant to said mortgage or regulatory agreements, or otherwise; provided, however, that the duration of this article shall not exceed 35 years from the date of final Michigan State Housing Development Authority closing.