City of Monroe, MI
Monroe County
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Table of Contents
Table of Contents
[HISTORY: Adopted by the Mayor and City Council of the City of Monroe as indicated in article histories. Amendments noted where applicable.]
[Adopted 6-16-2014 by Ord. No. 14-003]
A. 
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 and rehabilitation 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 or all classes of housing exempt from taxation under this Act by 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 benefitted and improved by such housing, the encouragement of the same by providing certain property tax exemption for such housing is a valid public purpose; further, that the continuance of the provisions of this section for tax exemption and the service charge in lieu of taxes during the period contemplated in this section are essential to the determination of economic feasibility of housing developments which are constructed and financed in reliance on such tax exemption.
B. 
The City acknowledges that Lutheran Social Services of Michigan (the "sponsor") has offered, subject to receipt of a commitment for low-income housing tax credits from the Michigan State Housing Development Authority, to own, through Lutheran Housing Corporation—Monroe, rehabilitate and operate the one-hundred-ninety-unit apartment housing development identified as Village Pines of Monroe located at 1600 Park Court in the City, and identified on the assessment roll as parcel number 58-55-69-00659-040, to serve persons of low income, and that the sponsor has requested to pay the City on account of this housing development an annual service charge for public services in lieu of all taxes.
As used in this article the following terms shall have the meaning indicated:
ACT
The State Housing Development Authority Act of 1966, being Public Act 346 of 1966 of the State of Michigan, as amended.
ANNUAL SHELTER RENT
The total collections during an agreed annual period from all occupants of the housing development representing rent or occupancy charges, exclusive of charges for gas, electricity, heat, or other utilities furnished to the occupants.
AUTHORITY
The Michigan State Housing Development Authority.
COMMITMENT FOR LOW INCOME HOUSING TAX CREDITS
A commitment for those tax credits allocated by the Authority provided pursuant to Section 42 of the Internal Revenue Code of the United States.
HOUSING DEVELOPMENT
A development which contains a significant element of housing for persons of low income and such elements of other housing, commercial, recreational, communal, and educational facilities as the Authority determines improve the quality of the development as it relates to housing for persons of low income.
LOW-INCOME PERSONS OR FAMILIES
As used herein, shall be the same meaning as found in Section 15(a)(7) of the Act.
SPONSOR
The entity which has applied for low-income housing tax credits or other financial assistance from the Authority for the housing development.
UTILITIES
Fuel, water, sanitary sewer service and/or electrical service which are paid by the housing development owner.
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 housing for low-income families or persons sponsored by a nonprofit organization which has received an allocation of low-income housing tax credits, as provided in the Act. It is determined that Village Pines of Monroe is of this class.
A. 
Exemption from property taxes. Village Pines of Monroe shall be exempt from all property taxes as of December 31 immediately following placement of the rehabilitated housing development into service with eligibility for the low-income housing tax credits. 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 in this article, and in consideration of the sponsor's offer and request, subject to receipt of low-income housing tax credits from the Authority, to participate in the sponsorship of a housing development, agrees to accept payment of an annual service charge for public services in lieu of all property taxes.
B. 
Annual service charge. The annual service charge shall be as prescribed in Subsection B(1) and (2) below, provided that such charge shall not exceed the amount of taxes which would otherwise have been paid on the housing development if the housing development were not tax exempt.
(1) 
In any given year where no transfer of ownership of the housing development has occurred during the immediately preceding year, the established annual service charge shall be the greater of the following:
(a) 
Nine percent of the annual shelter rent; or
(b) 
One hundred thousand dollars for the first tax year of applicability, and for every tax year thereafter, $100,000 multiplied by the lesser of the cumulative Michigan inflation rate multiplier as utilized in MCLA § 211.27a(2)(a), or an annual two-percent increase.
(2) 
In all years following a year where a transfer of ownership of the housing development has occurred, the established annual service charge shall be the amount of taxes which would be paid on the housing development if the housing development were not tax exempt.
C. 
Administrative fee. The annual service charge shall be subject to a one-percent administrative fee, which shall be calculated as a percentage of the established annual service charge and included with the annual payment.
D. 
All payments received by the City, with the exception of the one-percent administrative fee to be retained by the City, shall be distributed by the City to the taxing jurisdictions in the same proportion that the general property taxes would have been distributed in the previous calendar year.
In addition to the provisions of Section 15(a)(5) of the Act, 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 section, provided that in the event the annual service charge is not fully paid as provided in the following paragraph, the contract shall have no further effect and shall terminate; and provided further, that the unpaid annual service charge shall remain a debt due the City, and shall be recoverable by direct action of assumpsit.
The annual service charge in lieu of taxes as determined under this article shall be payable in the same manner as general property taxes are payable to the City except that the annual payment shall be due and payable on December 1 of each year, and paid on or before February 14 of each year.
This article shall remain in effect and shall not terminate so long as the restriction on rents and incomes under the low-income housing tax credit program remains in effect or the Authority has any interest in the housing development; provided, however, that the term of this article shall not exceed 20 years from the date the housing development is placed into service with eligibility for the low-income housing tax credits.
[Adopted 3-21-2016 by Ord. No. 16-001]
This article shall be known and cited as the "City of Monroe Tax Exemption Ordinance-Norman Towers."
A. 
It is acknowledged that it is a proper public purpose of the State of Michigan and its political subdivisions to provide housing for its low-income persons and families and to encourage the development of such housing by providing for a service charge in lieu of property taxes in accordance with the Act. The City of Monroe is authorized by this Act to establish or change 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 this Act. It is further acknowledged that such housing for low-income persons and families is a public necessity, and as the City of Monroe will be benefited and improved by such housing, the encouragement of the same by providing a real estate tax exemption for such housing is a valid public purpose. It is further acknowledged that the continuance of the provisions of this article for tax exemption and the service charge in lieu of all ad valorem taxes during the period contemplated in this article are essential to the determination of economic feasibility of the housing projects that are constructed or rehabilitated with financing extended in reliance on such tax exemption.
B. 
The City of Monroe acknowledges that the sponsor (Building Blocks Non-profit Housing Corporation) has offered, subject to receipt of an allocation under the LIHTC Program by the Michigan State Housing Development Authority ("MSHDA"), to acquire and rehabilitate, own and operate a housing project identified as "Norman Towers" on certain property located at 810 West Elm Avenue, Monroe, MI 48162, in the City of Monroe, Michigan, to serve low-income persons and families, and that the sponsor has offered to pay the City/Township on account of this housing project an annual service charge for public services in lieu of all ad valorem property taxes.
As used in this article, the following terms shall have the meanings indicated:
ANNUAL SHELTER RENT
The total collections during an agreed-upon annual period from or paid on behalf of all occupants of a housing project representing rent or occupancy charges, exclusive of utilities.
AUTHORITY
The Michigan State Housing Development Authority.
LIHTC PROGRAM
The Low-Income Housing Tax Credit program administered by the Authority under § 42 of the Internal Revenue Code of 1986, as amended.
LOW-INCOME PERSONS AND FAMILIES
Persons and families eligible to move into a housing project.
SPONSOR
Building Blocks Non-profit Housing Corporation and any entity that receives or assumes a mortgage loan.
UTILITIES
Charges for gas, electric, water, sanitary sewer and other utilities furnished to the occupants that are paid by the housing project.
It is determined that the class of housing projects to which the tax exemption shall apply and for which a service charge shall be paid in lieu of such taxes shall be housing projects for low-income persons and families that will benefit from the LIHTC program. It is further determined that Norman Towers will be of this class if such a LIHTC allocation is awarded by MSHDA.
A. 
The housing project identified as "Norman Towers" and the property on which it is located at 810 West Elm Avenue shall be exempt from all ad valorem property taxes in accordance with the Michigan General Property Tax Act[1] from and following placement of the completed rehabilitated housing development into service with eligibility for the low-income housing tax credits. The City of Monroe acknowledges that the sponsor and the Authority have established the economic feasibility of the housing project in reliance upon the enactment and continuing effect of this article, and the qualification of the housing project for exemption from all ad valorem property taxes and a payment in lieu of taxes as established in this article. Therefore, in consideration of the sponsor's offer to rehabilitate Norman Towers and operate the housing project, the City of Monroe agrees to accept payment of an annual service charge for public services in lieu of all ad valorem property taxes. Subject to receipt of an allocation of LIHTC, the annual service charge shall be the greater of the following:
(1) 
Ten percent of the annual shelter rent; or
(2) 
For the first tax year of applicability, $43,784.78, and for every tax year thereafter, $43,784.78 multiplied by the lesser of the cumulative Michigan inflation rate multiplier as utilized in MCLA § 211.27a(2)(a), or an annual two-percent increase.
[1]
Editor's Note: See MCLA § 211.1 et seq.
B. 
Such charge shall not exceed the amount of taxes which would otherwise have been paid on the housing development if the housing development were not tax exempt.
Notwithstanding the provisions of § 15(a)(5) of the Act to the contrary, a contract between the City of Monroe 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 and shall start upon the ownership transfer to the sponsor or its affiliate entities upon completion of the rehabilitation work from the LIHTC.
Notwithstanding § 528-12, the service charge to be paid each year in lieu of taxes for the part of the housing project that is tax exempt but 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 project if the housing project were not tax exempt.
The annual service charge in lieu of taxes as determined under this article shall be payable in the same manner as general property taxes are payable to the City of Monroe and distributed to the several units levying the general property tax in the same proportion as prevailed with the general property tax in the previous calendar year. The annual payment for each operating year shall be paid on or before April 30 of the following year. Collection procedures shall be in accordance with the provisions of the General Property Tax Act (1893 PA 206, as amended; MCLA § 211.1, et seq.)
This article shall remain in effect and shall not terminate so long as the housing project remains subject to income and rent restrictions under the LIHTC program, but not more than 50 years.