[Ord. No. 1538, 9-16-2009[1]]
This article shall hereinafter be known and cited as the "Greenbriar
Apartments Tax Exemption Ordinance."
[1]
Editor's Note: This ordinance also rescinded former Art. V,
Greenbriar Apartments Tax Exemption, adopted by Ord. No. 1515.
[Ord. No. 1538, 9-16-2009]
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 elderly persons of low and moderate
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 346 of 1966, 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 and elderly persons of low and moderate
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 KBJ Greenbriar Limited Dividend
Housing Association Limited Partnership of 1822 W. Milham, Suite 1-A,
Portage, Michigan 49024 (the "sponsor") has offered, subject to receipt
of a "federally aided mortgage" (as defined below), to acquire, rehabilitate
and operate 126 apartment units in a housing development identified
as Greenbriar Apartments, which is legally described in Exhibit A
[attached to Ord. No. 1538], (the "Greenbriar Units") to serve persons
or families of low-income and elderly persons of low or moderate 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 sponsor acknowledges and represents that 66
of the 126 [apartment units] will be leased to elderly persons of
low or moderate income.
The City further acknowledges that the sponsor proposes to acquire
Greenbriar Units; rehabilitate and reconstruct substantial improvements
to Greenbriar 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. 1538, 9-16-2009]
All terms shall be defined as set forth in the Act, 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 or on
behalf of 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 program.
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.
A single person who is 55 years of age or older or a household
in which at least one member is 55 years of age or older and all other
members are 50 years of age or older.
Any of the following:
A below-market interest rate mortgage insured, purchased, or
held by the Secretary of the Department of HUD.
A market interest rate mortgage insured by the Secretary of
HUD and augmented by a program of rent subsidies.
A mortgage receiving interest rate reduction payments provided
by the Secretary of the Department of HUD.
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 low-income persons or families or elderly persons of low or moderate
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
low-income persons or families or elderly persons of low or moderate
income.
Shall have the same meaning as found in Section 11(g) of
the Act.[2]
Shall have the same meaning as found in Section 15(a)(7)
of the Act.[3]
A loan to be made by the Authority to the sponsor for the
construction and/or permanent financing of the housing development.
KBJ Greenbriar Limited Dividend Housing Association Limited
Partnership, 1822 W. Milham, Suite 1-A, Portage, Michigan 49024, 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 a housing development.
[Ord. No. 1538, 9-16-2009]
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 be those housing developments acquired, rehabilitated, and operated for the benefit of low-income persons and elderly persons of low income or moderate income, which are financed or assisted pursuant to the Act. It is further determined that Greenbriar Apartments is of this class, and this Article V shall relate solely to the sponsor of this housing development.
Article V 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 33.1-51.
[Ord. No. 1538, 9-16-2009]
Subject to the receipt of a federally aided mortgage, the housing
development identified as Greenbriar Apartments exclusively and specially
designated for low-income persons or elderly persons of low or moderate
income shall be exempt from all property taxation beginning in the
year following the commencement of rehabilitation 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, Greenbriar 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. 1538, 9-16-2009]
Notwithstanding Section 33.1-54, 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 or elderly persons of low or moderate income 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. 1538, 9-16-2009]
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 ordinance
[article].
[1]
Editor's Note: See MCLA § 125.1415a(5).
[Ord. No. 1538, 9-16-2009]
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. 1538, 9-16-2009]
This article shall remain in effect and shall not terminate
so long as the federally aided mortgage remains outstanding and unpaid
and the Authority or HUD has an 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. 1538, 9-16-2009]
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. 1538, 9-16-2009]
This article shall become effective upon the adoption by the Council of the City of Holland, and is declared to be an emergency ordinance pursuant to Section 5.5 of the Holland City Charter authorizing the Council of the City of Holland to adopt an ordinance upon declaration of emergency.
