[Added 3-15-2017 by Ord.
No. 1686; amended 10-30-2019 by Ord. No. 1775]
This article shall be known and cited as the "City of Holland
Low Income Housing Tax Exemption Ordinance."
[Added 3-15-2017 by Ord.
No. 1686; amended 10-30-2019 by Ord. No. 1775]
It is acknowledged that it is a proper public purpose of the
State of Michigan and its political subdivisions to provide housing
for its elderly and other 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
Holland 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 this Act. It is further
acknowledged that such housing for low income persons and families
is a public necessity, and as the City of Holland will be benefited
and improved by such housing, the encouragement of the same by providing
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 is constructed or rehabilitated with financing
extended in reliance on such tax exemption.
The City of Holland acknowledges that the tax exemption authorized
by this article shall only apply when a sponsor (as defined below)
has offered, subject to receipt of an allocation under the LIHTC Program
by the Michigan State Housing Development Authority, to construct,
acquire or refinance and operate a housing project in the City of
Holland identified by resolution of Council to serve elderly and other
low-income persons and families, and the sponsor has offered to pay
the City on account of this housing project an annual service charge
for public services in lieu of all ad valorem property taxes and otherwise
complied with this article.
[Added 3-15-2017 by Ord.
No. 1686; amended 10-30-2019 by Ord. No. 1775]
The State Housing Development Authority Act, being Public
Act 346 of 1966, of the State of Michigan, as amended, being MCLA
125.1415a.
The total collections during an agreed 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 total contract rents (as defined by the U.S. Department
of Housing and Urban Development in regulations promulgated pursuant
to Section 8 of the U.S. Housing Act of 1937, as amended) received
in connection with the operation of a housing project during an agreed
annual period, exclusive of utilities.
The Low-Income Housing Tax Credit program administered by
the Authority under Section 42 of the Internal Revenue Code of 1986,
as amended.
Persons and families eligible to move into a housing project.
A loan that is federally aided [as defined in Section 11
of the Act (MCLA 125.1411)] or a loan or grant made or to be made
by the Authority for the construction, rehabilitation, acquisition
and/or permanent financing of a housing project and secured by a mortgage
on the housing project.
The real property of a housing project identified in a resolution
adopted by the City Council as eligible for the tax exemption under
this article.
The entity that is identified by a resolution adopted by
the City Council and any successor 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.
[Added 3-15-2017 by Ord.
No. 1686; amended 10-30-2019 by Ord. No. 1775]
It is determined that the class of housing projects to which
the tax exemption under the Act 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 are financed with a mortgage
loan that are designated from time to time by a resolution adopted
by the City Council pursuant to this section.
[Added 3-15-2017 by Ord.
No. 1686; amended 10-30-2019 by Ord. No. 1775]
The property shall be exempt from all ad valorem property taxes from and after the commencement of construction or rehabilitation or as set forth by resolution for the duration set forth in Section 33.1-69. The City of Holland acknowledges that the sponsor and the Authority, in the case of a sponsor receiving an Authority-financed mortgage loan, or the sponsor and the mortgage lender, in the case of a sponsor receiving a federally aided mortgage loan, 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 construct or refinance and upgrade and operate the housing project, the City agrees to accept payment of an annual service charge for public services in lieu of all ad valorem property taxes. Subject to receipt of a mortgage loan, the annual service charge shall be equal to 4% of the annual shelter rents or contract rents actually collected by the housing project during each operating year.
[Added 3-15-2017 by Ord.
No. 1686; amended 10-30-2019 by Ord. No. 1775]
Notwithstanding the provisions of Section 15a(5) of the Act
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.
The tax exemption is contingent upon the sponsor entering into
a development agreement and municipal services agreement with the
City.
[Added 3-15-2017 by Ord.
No. 1686; amended 10-30-2019 by Ord. No. 1775]
Notwithstanding Section 33.1-65, 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.
[Added 3-15-2017 by Ord.
No. 1686; amended 10-30-2019 by Ord. No. 1775]
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 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 and the annual payment due under the
municipal services agreement 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 (1893 P.A. 206, as amended; MCLA § 211.1
et seq. ), 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.
[Added 3-15-2017 by Ord.
No. 1686; amended 10-30-2019 by Ord. No. 1775]
This article shall remain in effect for the lesser of:
[Added 3-15-2017 by Ord.
No. 1686; amended 10-30-2019 by Ord. No. 1775]
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 this article
as a whole or any section or provision of this article, other than
the section or provision so declared to be unconstitutional or invalid.
