[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.Â
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.Â
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:
The State Housing Development Authority Act of 1966, 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 the housing development representing rent or occupancy
charges, exclusive of charges for gas, electricity, heat, or other
utilities furnished to the occupants.
The Michigan State Housing Development Authority.
A commitment for those tax credits allocated by the Authority
provided pursuant to Section 42 of the Internal Revenue Code of the
United States.
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.
As used herein, shall be the same meaning as found in Section
15(a)(7) of the Act.
The entity which has applied for low-income housing tax credits
or other financial assistance from the Authority for the housing development.
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.Â
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.Â
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)Â
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)Â
Nine percent of the annual shelter rent; or
(b)Â
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)Â
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.Â
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.Â
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.Â
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.Â
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:
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.
The Michigan State Housing Development Authority.
The Low-Income Housing Tax Credit program administered by
the Authority under § 42 of the Internal Revenue Code of
1986, as amended.
Persons and families eligible to move into a housing project.
Building Blocks Non-profit Housing Corporation and any entity
that receives or assumes a mortgage loan.
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.Â
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)Â
Ten percent of the annual shelter rent; or
(2)Â
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.Â
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.
