[Adopted 4-11-2016 by Ord. No. 2016-04]
This affordable housing tax abatement ordinance is enacted to
encourage the development of affordable housing as defined in MGL
c. 60, § 1, as the same may be amended from time to time.
Qualifying sites which may be the subject of a tax abatement
agreement under this article shall:
A. Be a site or portion of a site for which the Commissioner of the
Department of Revenue has approved in writing a request made by the
Town of Palmer to grant an abatement; and
[Amended at time of adoption of Code (see Ch. 1, General
Provisions, Art. I)]
B. Be owned by a new owner (eligible owner) who is an affordable housing
developer who would be acquiring the property as a court-appointed
receiver under the Attorney General's Office's Abandoned
Housing Initiative and who is not liable for any of the outstanding
charges secured by the Town of Palmer's lien and who owes no
delinquent taxes to the Town of Palmer; and
C. Be available for affordable housing or affordable housing and commercial
uses under the Town of Palmer Zoning Ordinances, including any special
permits or variances.
Affordable housing tax agreements must meet the minimum requirements
described in this section.
A. Property.
(1) Current use. The site covered by the agreement may contain one or
more taxable parcels. The parcels may be vacant or improved.
(2) Developed use. The site must be developed for 1) affordable housing
use only or 2) mixed affordable housing and commercial use.
(a)
Affordable housing.
[1]
Affordable housing is housing:
[a] Owned by or rented to families or individuals with
household income at time of initial occupancy that meets certain income
standards; and
[b] Subject to a recorded affordable housing restriction
of at least 45 years, including resale restrictions imposed to maintain
its affordability on a long-term basis as defined in MGL c. 60, § 1,
as the same may be amended from time to time.
[2]
Household income cannot exceed 120% of the area-wide median
income determined by the United States Department of Housing and Urban
Development (HUD) as adjusted for family size. Subsequent owners and
renters must also meet that income standard at initial occupancy.
(b)
Mixed-use.
[1]
Primary use. Affordable housing must be the primary use of any
mixed-use development. The site may include commercial uses, but not
market-rate housing. "Primary use" means that more than 50% of the
floor space of the improvements on the site must be devoted to affordable
housing. This condition and definition of primary use must be included
in the agreement, along with plans showing the percentage of floor
space devoted to affordable housing use. Common areas, such as floor
space used for heating, air conditioning or storage, are to be prorated
and allocated to the affordable housing and other uses.
[2]
Compliance. No agreements covering a mixed-use development may
be made unless:
[a] The agreement provides that no building permits
or certificates of occupancy may be issued unless the Building Inspector
determines that the development of the site conforms to the primary
use requirement set forth in these guidelines.
[b] The agreement provides, at a minimum, that if the
development later becomes nonconforming during the period covered
by the agreement, or within 20 years of its effective date, whichever
period is shorter, the certificates of occupancy for the commercial
space shall be revoked unless the amount of real estate taxes abated
pursuant to the agreement are repaid.
B. Developer.
(1) The agreement is with the person or entity planning to develop the
site as affordable housing or for affordable housing and commercial
purposes, i.e., the developer. The developer may or may not own the
site at the time the agreement is made, but cannot be personally liable
for any of the outstanding real estate taxes that are the subject
matter of the agreement, i.e., cannot be the owner assessed the taxes.
(2) The developer must also meet the same standards that apply to purchasers
of tax possession property under MGL c. 60, § 77B. This
means the developer cannot be delinquent on any property taxes, or
have had any arson or insurance fraud convictions, and must submit
an affidavit of compliance with these standards at the time the agreement
is made.
(3) The developer must be an affordable housing developer who would be
acquiring the property as a court-appointed receiver under the Attorney
General's Office's Abandoned Housing Initiative or through
the Massachusetts Housing Court.
C. Scope.
(1) Outstanding taxes.
(a)
The agreement may cover the payment and abatement of municipal
real estate taxes outstanding at the time the agreement is made or
at the time the developer acquires title, whichever occurs first.
This means unpaid installment payments of the Town of Palmer's
real estate tax assessed for any fiscal year that are overdue, i.e.,
installments on which interest has accrued by law. It also includes
all accrued interest and collection costs (such as demand charges
and recording and advertising costs for tax takings) on those taxes
as of the agreement or acquisition date, whichever applies.
(b)
The agreement may not apply to the payment and abatement of
unpaid:
[1]
Municipal real estate tax installment payments that first accrue
interest after the agreement or acquisition date, whichever applies,
and interest and collection costs that accrue on those taxes.
[a] Where the developer has acquired the site before the agreement is made, the developer must have timely paid all post-acquisition installment payments. If not, the developer is considered delinquent on property taxes and, therefore, is not eligible to enter into an agreement. See Subsection
B above.
[b] Where the developer is acquiring the site after the agreement is made, the developer must pay any post-agreement installment payments, including accrued interest and collection costs, at the time the property is acquired. No abatement may be granted unless and until these post-agreement taxes have been paid. See §
125-4A(2) below.
[2]
District real estate taxes.
[3]
Municipal and district charges that are liens on the site, e.g.,
unpaid water or sewer betterments or user charges.
(2) Minimum terms. The agreement must specify at a minimum:
(a)
The number of affordable housing units to be developed, including
the percentage of floor space devoted to affordable housing in any
mixed-use development.
(b)
The amount owed by fiscal year and by taxes, interest and collection
costs.
(c)
The amount to be abated by fiscal year and by taxes, interest
and collection costs.
(d)
The balance to be paid by the developer.
(e)
The monthly or other schedule for paying the balance.
(g)
The rate of interest that will accrue, if any, on the unpaid
balance.
(h)
The penalty for late payments, if any.
(3) Proposed abatement. The agreement must expressly provide that any
abatement is subject to the approval of the Department of Revenue
(DOR) in accordance with MGL c. 58, § 8C. If the developer
does not own the site at the time the agreement is made, it must also
provide that any abatement is subject to the developer's acquisition
in compliance with the terms and conditions of the agreement.
D. Signature.
(1) The agreement must be signed by the Town Manager and the developer
and be notarized. The Town Clerk must attest that the official(s)
signing on behalf of the municipality is the signatory designated
by the bylaw or ordinance.
(2) A copy of the signed agreement must be provided to the:
(c) Community Development (DHCD); and
In the event that any phrase, clause, sentence, paragraph or
section of this article shall be declared unconstitutional or invalid
by the judgment or decree of any court of competent jurisdiction,
such unconstitutionality or invalidity shall not affect any of the
remaining phrases, clauses, sentences, paragraphs and sections of
this article.