[Ord. No. 1476, 5-2-2007]
This article shall hereinafter be known and cited as the "Windscape
Apartments Tax Exemption Ordinance".
[Ord. No. 1476, 5-2-2007]
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 "Act")]. The City is authorized by this Act to establish or charge
the service charge to be paid in lieu of taxes by any or 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 the 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 exemption and the service charge in lieu of taxes during the period
contemplated in this article are essential to the determination of
the economic feasibility of the housing development which is constructed
and financed in reliance on such tax exemption.
The City acknowledges that the Windscape Limited Dividend Housing
Association Limited Partnership of 30100 Telegraph Road, Suite #426
Bingham Farms, MI 48025 (the "sponsor") has offered, subject to receipt
of a federally aided mortgage (as defined below), to acquire, rehabilitate
and operate a housing development identified as Windscape Apartments
to serve persons or families of low income, and that the sponsor has
offered to pay the City on account of this housing development an
annual service charge for public services in lieu of all taxes.
The City further acknowledges that the sponsor proposes to acquire
Windscape Apartments; rehabilitate and reconstruct substantial improvements
to Windscape Apartments; seek to maintain and preserve Section 8 rental
benefits; and provide for the affordable housing stock for the benefit
of the residents of the City of Holland. Based upon these public purposes,
the City of Holland adopts this article.
[Ord. No. 1476, 5-2-2007]
All terms shall be defined as set forth in the State Housing
Development Authority Act of 1966, being Public Act 346 of 1966, of
the State of Michigan, as amended, except as follows:
The State Development Authority Act, being Public Act 346
of 1966, of the State of Michigan, as amended.
The total collections during an agreed annual period from
all occupants of a housing development representing rent or occupancy
charges, exclusive of charges for gas, electricity, heat or other
utilities furnished to the occupants, including the portion of the
rent payable under any governmental subsidy.
The Michigan State Housing Development Authority.
The consecutive twelve-month period which ends on December
31 of the year immediately preceding the year in which the service
charge is to be paid.
Any of the following:
A below-market interest rate mortgage insured, purchased, or
held by the Secretary of the Department of Housing and Urban Development.
A market interest rate mortgage insured by the Secretary of
Housing and Urban Development and augmented by a program of rent subsidies.
A mortgage receiving interest rate reduction payments provided
by the Secretary of the Department of Housing and Urban Development.
A mortgage on a housing development to which the Authority allocates
low-income housing tax credits under Section 22b of the Act.[1]
A mortgage receiving special benefits under other federal law
designated specifically to develop low and moderate-income housing,
consistent with the Act.
A development which contains a significant element of housing
for persons or families of low income and such elements of other housing,
commercial, recreational, industrial, communal and educational facilities
as the Authority determines improve the quality of the development
as it relates to housing for persons or families of low income.
Shall have the same meaning as found in Section 15(a)(7)
of the Act.[2]
A loan to be made by the Authority to the sponsor for the
construction and/or permanent financing of the housing development.
Windscape Limited Dividend Housing Association Limited Partnership,
30100 Telegraph Road, Suite #426, Bingham Farms, MI 48025, its successors
in interest, which has applied to the Authority for a mortgage loan
and an allocation of low-income housing tax credits to finance the
housing development.
Fuel, water, sanitary sewer service and/or electrical service
which are paid by the housing development.
[Ord. No. 1476, 5-2-2007]
It is determined that the class of housing developments to which the tax exemption shall apply and for which a service charge shall be paid in lieu of such taxes shall those housing developments be acquired, rehabilitated and operated for the benefit of low-income persons or families, which are financed or assisted pursuant to the Act. It is further determined that Windscape Apartments is of this class, and this Article IV shall relate solely to the sponsor of this housing development.
Article IV of this chapter shall only apply to housing developments that are rehabilitations of existing properties and shall not apply to new construction. The sponsor of rehabilitation projects must contribute a significant amount of capital in the rehabilitation process and must meet the goals and objectives set forth in Section 33.1-40.
[Ord. No. 1476, 5-2-2007]
Subject to the receipt of a federally aided mortgage, the housing
development identified as Windscape Apartments exclusively and specially
designated for low-income persons and families shall be exempt from
all property taxation beginning in the year following the commencement
of rehabilitation construction and continuing as long as the mortgage
loan insured by HUD or assisted or financed by the Authority remains
outstanding and unpaid and as long as HUD or the Authority has any
interest in such property. Notwithstanding the foregoing, Windscape
Apartments shall be subject to a service charge in lieu of property
taxes in the amount hereinafter set forth which shall be applied against
annual shelter rents of the preceding calendar year, exclusive of
utility charges paid by tenants or by the sponsor, equal to 4% for
the entire life of the federally aided mortgage.
Notwithstanding the foregoing, in no event shall the service
charge, at any time, be less than the property taxes upon the land
only (without improvements) of the housing development for the tax
year prior to the date when rehabilitation was commenced.
[Ord. No. 1476, 5-2-2007]
Notwithstanding Section 33.1-43, the service charge to be paid each year in lieu of taxes for the part of the housing development which is tax exempt and which is occupied by other than low-income persons or families shall be equal to the full amount of the taxes which would be paid on that portion of the housing development if the housing development were not tax exempt.
[Ord. No. 1476, 5-2-2007]
Notwithstanding the provisions of Section 15(a)(5) of the Act[1] to the contrary, a contract between the City and the sponsor
with the Authority as third party beneficiary under the contract,
to provide tax exemption and accept payments in lieu of taxes, as
previously described, is effectuated by enactment of this article.
[1]
Editor's Note: See MCLA § 125.1415a(5).
[Ord. No. 1476, 5-2-2007]
The service charge in lieu of taxes as determined hereunder
shall be payable in the same manner as general property taxes are
payable in the City of Holland; except that the annual payment shall
be paid on or before July 1 of each year. The entire tax collection
procedure including the lien status for nonpayment provided by the
General Property Tax Act of the State of Michigan, including applicable
provisions of the Charter of the City of Holland, shall be effective
with respect to such payment, including, but not by way of limitation,
the provisions providing for interest and penalties on late payments,
return of delinquent taxes, and the sale of lands for delinquent taxes.
[Ord. No. 1476, 5-2-2007]
This article shall remain in effect and shall not terminate
so long as the federally aided mortgage remains outstanding and unpaid
or the Authority has any interest in the property provided, that the
rehabilitation construction of the housing development commences within
one year from the effective date of this article.
[Ord. No. 1476, 5-2-2007]
The various sections and provisions of this article shall be
deemed to be severable, and should any section or provision of this
article be declared by any court of competent jurisdiction to be unconstitutional
or invalid the same shall not affect the validity of the article as
a whole or the section or provision of this article other than the
section or provision so declared to be unconstitutional or invalid.
[Ord. No. 1476, 5-2-2007]
This article shall become effective upon the adoption by the
Council of the City of Holland, and within 21 days after adoption
and publication in accordance with the Charter of the City of Holland.
