[Adopted 2-23-2022 by Ord. No. 335]
This article shall be known and cited as the "Charter Township
of Pittsfield, Apartments on Clark Limited Dividend Housing Association
Limited Partnership Tax Exemption Ordinance."
An ordinance to provide for a service charge in lieu of taxes
for a housing project for low-income persons and families to be financed
with an Authority-aided and/or federally aided mortgage loan pursuant
to the provisions of the State Housing Development Authority Act of
1966 (1966 PA 346, as amended MCL 125.1401, et seq.) (the "Act").
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 citizens 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 Charter Township of Pittsfield
(the "Township") 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 Township will be benefited
and improved by such housing, the encouragement of the same by providing
certain 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 housing
projects that are constructed or rehabilitated with financing extended
in reliance on such tax exemption.
B.
The Township acknowledges that Lockwood Development, LLC (the "sponsor")
has offered, subject to the adoption of a PILOT by the Township, to
acquire, rehabilitate, own and operate a housing project identified
as Apartments on Clark on certain property located at 4800 and 4840
Clark Rd. in the Township to serve low-income persons and families
(the "housing project"), and that the sponsor has offered to pay the
Township on account of this housing development an annual service
charge for public services in lieu of all ad valorem property taxes.
Apartments on Clark is subject to long-term rent and income restrictions
and is eligible to receive a PILOT having received an allocation under
the LIHTC Program by the Michigan State Housing Development Authority
(the "Authority").
All terms shall be defined as set forth in the State Housing
Development Authority Act of 1966, being Public Act 346 of 1966 of
the State of Michigan, as amended, except as follows:
The State Housing Development Authority Act, 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 a housing development or any amount paid to the sponsor
on behalf of any occupant 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 public
body corporate and politic of the State of Michigan.
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.
A project which contains a significant element of housing
for low-income persons and families and such elements of other housing,
commercial, recreational, industrial, communal, and educational facilities
as the Authority determines improve the quality of the project as
it related to housing for persons and families of low income.
The Low-Income Housing Tax Credit Program administered by
the Authority pursuant to Section 42 of the Internal Revenue Code
of 1986, as amended.
Persons and families whose household income does not exceed
60% of area median income, as determined by the U.S. Department of
Housing and Urban Development, adjusted for family size.
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 project, and secured by a mortgage
on the housing project.
Lockwood Development, LLC and any entity that receives or
assumes a mortgage loan and is an eligible mortgagor under the Act.
Gas, water, sanitary sewer service, electrical service, and
other utilities furnished to the occupants which 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 are financed with a mortgage loan. It is
further determined that Apartments on Clark Limited Dividend Housing
Association Limited Partnership is of this class.
The housing project identified as Apartments on Clark Limited
Dividend Housing Association and the property on which it is located
shall, subject to the limitations and conditions of this article,
be exempt from all property taxes from and after the commencement
of construction of the project. In consideration of the sponsor's
offer to acquire, own and operate the housing project, the Township
agrees to accept payment of an annual service charge for public services
in lieu of all property taxes. The annual service charge shall be
equal to 4% of the difference between the annual sheltered rent actually
collected and utilities.
A.
Notwithstanding § 30-31, the service charge to be paid each year in lieu of taxes for the part of the housing project, which is tax exempt and which is occupied by other than low-income persons or families, if any, 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.
B.
The service charge provided by this article shall not exceed the
taxes that would be paid but for the Act and this article.
Notwithstanding the provisions of Section 15a(5) of the Act,
to the contrary, a contract between the Township 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; provided,
however, that nothing contained in this article shall constitute a
waiver of any rights the Township may possess or exercise under the
provisions of Section 15a(2) of the Act.
The service charge in lieu of taxes as determined under the
Ordinance shall be payable in the same manner as general property
taxes are payable to the Township except that the annual payment shall
be paid on or before December 1 of each year and shall be distributed
to the several units levying the general property tax in the same
proportion as for general property taxes. Failure to pay the service
charge on or before December 1 of each year shall result in the service
charge being subject to 1% interest per month until paid. If any amount
of the annual service charge or accrued interest shall remain unpaid
as of December 31 of each year, the amount unpaid shall be a lien
upon the real property constituting the housing project upon the Township
Treasurer filing a certificate of nonpayment of the service charge,
together with an affidavit of proof of service of the certificate
on nonpayment upon the sponsor with the Washtenaw County Register
of Deeds, and proceedings may then be had to enforce the lien as provided
by law for the foreclosure of tax liens upon real property. Collection
procedures shall be in accordance with the provisions of the General
Property Tax Act (1893 PA 206, as amended; MCL 211.1 et seq.).
On or before April 1 of each year, the sponsor shall file with the Township audited financial statement showing all revenues for the housing project, including, but not limited to, rent or occupancy charges and subsidies received from the housing project and expenses, including utilities. Such audited financial statements shall show revenues and expenses separately for units considered occupied by persons or families of low income, and units occupied by individuals other than persons or families of low income during the previous year. The Township shall determine the applicable service charge in accordance with § 30-31. The Township may require such other or further financial information as may be necessary to accurately determine the service charge due pursuant to this article. The Township shall submit a statement for the service charges for each year by September 1. Failure of the Township to provide such statement or failure of the sponsor to receive such statement shall not invalidate any service charge owed pursuant to this article.
Provided that the sponsor acquires the housing project within
12 months of the effective date of this article, this article shall
remain in effect and shall not terminate for such period as the housing
project is subject to a mortgage loan and remains subject to the income
and rent restrictions of the LIHTC Program.
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 a court of competent jurisdiction to be unconstitutional
or invalid, the same shall not affect the validity of the 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.
All ordinances or parts thereof which are in conflict with the
provisions of this article are, to the extent of such conflict, hereby
repealed, except that terms defined herein for the purpose of interpretation,
administration and enforcement of this article shall not act to modify,
repeal or otherwise change the definition of any such term as used
in other ordinances or laws.
The provisions of this article are hereby declared to be severable.
If any clause, sentence, paragraph, section or subsection is declared
void or inoperable for any reason by any court, it shall not affect
any other part or portion hereof other than the part declared void
or inoperable.
This article shall be published in the manner as required by
law. Except as otherwise provide by law, this article shall be effective
on the day after final publication.
