This chapter shall be known and cited as the "City of Coldwater
Tax Exemption Ordinance for Coldwater Senior Villas Limited Dividend
Housing Association, LLC."
All terms in this chapter shall be defined as set forth in the
Act, except as follows:
ACT
The State Housing Development Authority Act, being Public
Act 346 of 1966, as amended.
ANNUAL SHELTER RENT
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 charges for gas, electricity,
heat, or other utilities furnished to the occupants by the sponsor.
AUTHORITY
The Michigan State Housing Development Authority.
CITY
The City of Coldwater, a home rule municipality organized
pursuant to Public Act 279 of 1909, as amended, and located in Branch
County, Michigan.
DEVELOPMENT
The senior housing development to be located in the City
to be known as "Coldwater Senior Villas Limited Dividend Housing Association,
LLC."
HOUSING DEVELOPMENT
A development that contains a significant element of housing
for persons of low income and such elements of other housing, commercial,
recreational, industrial, communal and educational facilities as the
Authority has determined improve the quality of the development as
it relates to housing for persons of low income.
LIHTC PROGRAM
The Low Income Housing Tax Credit Program administered by
the Authority under Section 42 of the Internal Revenue Code of 1986,
as amended.
MORTGAGE LOAN
A loan that is federally aided (as defined in Section 11
of the Act) or a loan or grant made or to be made by the Authority
to the sponsor for the construction, rehabilitation, acquisition and/or
permanent financing of a housing development, and secured by a mortgage
on the housing development.
SPONSOR
Coldwater Senior Villas Limited Dividend Housing Association,
LLC, which has or intends to apply to the Authority for an allocation
of low-income housing tax credits to finance a housing development.
UTILITIES
Charges for gas, electric, water, sanitary sewer and other
utilities furnished to the occupants that are paid by the housing
development.
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 housing developments used exclusively
by low-income persons and families that are financed with a mortgage
loan. It is further determined that Coldwater Senior Villas Limited
Dividend Housing Association, LLC, is of this class.
The housing project identified as the Coldwater Senior Villas
apartments and the property on which it will be located shall be exempt
from all ad valorem property taxes from and after the issuance of
a certificate of occupancy for the development. The City of Coldwater
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 chapter and the qualification of the
housing development for exemption from all ad valorem property taxes
and a payment in lieu of taxes as established in this chapter. Therefore,
in consideration of the sponsor's offer to construct and operate the
development, 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 3% of the annual shelter rents actually collected by the
development during each operating year. Nothing in this section shall
be construed to exempt the development and the property on which it
is to be constructed from any special assessments for street or other
public improvements or as a result of its location within a business
improvement district authorized by 1999 Public Act 49, as amended.
Notwithstanding the provisions of Section 15(a)(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 chapter.
The annual service charge in lieu of taxes as determined under
this chapter 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 shall be paid on or before September
15 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.). Annual payments in arrears
shall be subject to interest of 1% per month until the 12th month
after their due date, and to interest of 1.5% per month retroactive
to the due date for annual payments in arrears for longer than 12
months. Subject to any limitations imposed by law, the sponsor shall
provide to the City such accounting records, audits, and financial
reports as the City shall reasonably require to verify the computation
of the annual service charge as provided by this section as of December
31 of each year. The sponsor shall maintain such records of rent or
occupancy charges received and the occupancy of units in the development
as will permit the City to verify which of the units in the development
have been occupied by low-income persons or families. Annual service
charges payable pursuant to this section shall be a lien on the development,
and if delinquent, without prejudice to any remedies for arrears of
payment or preceding breach of covenant, shall, at the election of
the City, be collected and enforced in the same manner as general
property taxes.
This chapter shall remain in effect and shall not terminate
so long as a mortgage loan remains outstanding and unpaid and the
housing project remains subject to income and rent restrictions under
the LIHTC Program. If the development is no longer subject to income
and rent restrictions under the LIHTC Program, then the exemption
from all ad valorem property taxes established by this chapter shall
terminate upon the payoff of the mortgage loan or upon the sale of
the development to an unrelated third party.
The various sections and provisions of this chapter shall be
deemed to be severable; and should any section or provision of this
chapter be declared by any court of competent jurisdiction to be unconstitutional
or invalid, the same shall not affect the validity of this chapter
as a whole or any section or provision of this chapter other than
the section or provision so declared to be unconstitutional or invalid.
All ordinances or parts of ordinances inconsistent or in conflict
with the provisions of this chapter are repealed to the extent of
such inconsistency or conflict.
This chapter shall take effect 21 days after its adoption and
publication as prescribed by law.