This article shall be known and cited as the "City of Fennville Housing Development Authority Tax Exemption Ordinance."
[HISTORY: Adopted by the City Commission of the City of Fennville as indicated in article histories. Amendments noted where applicable.]
[Adopted 10-19-1998 by Ord. No. 195]
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 citizens of low income who are developmentally disabled, physically disabled, or elderly. It is further acknowledged that is a proper public purpose to encourage the development 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, and codified at MCL 125.1401 et seq.) (the "Act"). The Act authorizes the City to establish or change a service charge to be paid in lieu of taxes by any or all classes of housing exempt from taxation under the Act in any amount not to exceed the taxes that would be paid but for the Act. It is further acknowledged that since such housing for the eligible class of housing occupants is a public necessity, and as the City will be benefited and improved by such housing, the City's encouragement of such housing by providing certain real estate tax exemptions 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 taxes during the periods contemplated in this article are essential to the determination of economic feasibility of housing developments which are constructed and financed in reliance on such article and service charge.
B.
The City acknowledges that the Allegan County Supportive Housing Consortium and/or Heritage Homes (the "sponsor") has offered, subject to receipt of a mortgage loan from the Michigan State Housing Development Authority, to erect, own and operate two housing developments on certain property located at Fennville Street and at Walter Street in the City of Fennville (collectively, the "housing developments"). The City further acknowledges that the housing developments are intended to serve the eligible class of housing occupants, and that the sponsor has offered to pay the City on account of these housing developments an annual service charge in lieu of all property taxes.
As used in this article, the following terms shall have the meanings indicated:
The State Housing Development Authority Act, being Public Act 346 of 1966, of the State of Michigan, as amended.[1]
The total collections during an agreed annual period from all occupants of a housing development representing rents or occupancy charges, exclusive of charges for gas, electricity, heat or other utilities furnished to the occupants.
The Michigan State Housing Development Authority.
An individual with a disability as defined in the Americans with Disabilities Act of 1990 (42 U.S.C. § 12101 et seq.).
A single person who is 62 years of age or older, or a family where the head of the household is 62 years of age or older.
Persons of low income who are:
A supportive housing development that contains a significant element of housing for the eligible class of housing occupants, and such elements of other housing, commercial, recreational, industrial, communal, and educational facilities as the Authority determines improve the quality of the development as it relates to housing for the eligible class of housing occupants.
The Department of Housing and Urban Development of the United States Government.
A loan to be made by the Authority to the sponsor for the construction and permanent financing of the housing development, or a loan to be made or insured by HUD.
Persons or families whose yearly income makes them eligible to move into a housing development that is tax exempt, as may be further defined in the rules promulgated by the Authority.
Persons or entities who have applied to either the Authority for a mortgage loan, or to another governmental entity for a federally aided loan, as defined by the Act, to finance a housing development. The Allegan County Supportive Housing Consortium and/or Heritage Homes is presently the sponsor of the housing developments identified in § 364-5 of this article.
Fuel, water, sanitary sewer service and/or electrical service that are paid by the housing development.
[1]
Editor's Note: See MCL 125.1401 et seq.
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 barrier-free dwellings for the developmentally disabled, physically disabled and/or the elderly, and which are financed or assisted by the Authority, or which are federally aided, as defined in the Act.
A.
The housing development identified as "Fennville Street Development" and the property on which it shall be constructed shall be exempt from all property taxes from and after the commencement of construction. The property site is described as: "Lots 3 and 4, Apple Wood Estates, City of Fennville, County of Allegan, according to the recorded plat thereof recorded in Liber 12 of plats on page 57." The City, acknowledging that the sponsor and the Authority (in the case of a sponsor receiving a mortgage loan from 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, will accept payment of an annual service charge for public services in lieu of all property taxes.
B.
The housing development identified as "Walter Street Development" and the property on which it shall be constructed shall be exempt from all property taxes from and after the commencement of construction. The property site is described as: "That part of the East 1/2 of the Northeast 1/4 of the Northwest 1/4 lying South of Capen's Addition to the Village (now City) of Fennville, Section 5, Town 2 North, Range 15 West, except the East 16 rods thereof. Subject to right-of way for ingress and egress over the East 4 rods for land to the East." The City, acknowledging that the sponsor and the Authority (in the case of a sponsor receiving a mortgage loan from 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, will accept payment of an annual service charge for public services in lieu of all property taxes.
C.
Subject to Subsection D, the sponsors of housing developments exempt from taxation pursuant to this article shall pay to the City an annual service charge for public services in lieu of all taxes. The annual service charge shall be an amount equal to the greater of the tax on the property on which the project is located for the tax year before the date when construction or rehabilitation of the project was commenced or 10% of the annual shelter rents obtained by the project.
D.
The annual service charge to be paid in lieu of taxes for the part of the housing development that is tax exempt and that is occupied by the eligible class of housing occupants shall not exceed an amount equal to the taxes that would be paid but for the tax exemption granted under this article. The annual service charge to be paid in lieu of taxes for the part of the housing development that is tax exempt and that is occupied by persons other than the eligible class of housing occupants shall be equal to the full amount of the taxes that would be paid on that portion of the housing development if the housing development were not tax exempt.
Notwithstanding the provisions of Section 15(a)(5) of the Act[1] 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.
[1]
Editor's Note: See MCL 125.1415a.
A.
The annual service charge determined pursuant to § 364-5 of 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 paid on or before July 1 of each year. On or before May 15 of each year, the sponsor shall file with the City a certification by the Authority showing the number of units in each of the separate housing developments occupied by the eligible class of housing occupants as of December 31 of the previous year. The sponsor shall also provide, on or before May 15 of each year, documentation and accounting records showing the rent or occupancy charges received from those units from the period of January 1 through April 15. The City shall project those revenues over 12 months and compute the service charge payable July 1 based on those projections. The City shall invoice the sponsor no later than June 1 of each year for the service charge due on July 1. On or before January 15 of each year, the sponsor shall file with the City documentation and accounting records showing the rent or occupancy charges received from those units considered to be occupied by the eligible class of housing occupants during the previous year. The City shall then finally determine the service charge for the previous year. Any additional service charge shall be payable by the sponsor on demand. Any overpayment of service charge shall be promptly refunded to the sponsor by the City. In providing the certificate referenced in this section, the Authority shall only be required to verify the income of the unit occupants at the time of initial occupancy.
B.
The annual service charge to be paid in lieu of taxes shall become a lien against the property and the housing development and, if delinquent, shall be subject to the same interest, penalties, collection charges, and enforcement mechanisms as general property taxes, except that an unpaid annual service charge shall not be returned as delinquent to the County Treasurer. Without affecting its rights under this section, the City Treasurer may, in their name, or in the name of the City, institute a civil action against the owner of the housing development in the Allegan County Circuit Court to recover the amount of the unpaid annual service charge and interest, penalties, and collection charges on the annual service charge plus the costs of collecting said amounts, including reasonable attorneys' fees.
A.
In consideration of the tax exemption provided in this article, the sponsor, in addition to paying the annual service charge in lieu of taxes, shall ensure that the following obligations are met. The sponsor shall be responsible for having the developer construct the housing developments in compliance with all City codes and ordinances, and all state and federal laws, rules and regulations. Further, the housing developments shall be individually designed, site built, barrier-free housing units. The sponsor shall also be responsible for all expenses incurred in the course of extending any public streets or utilities up to the property lines of any of the housing developments, as such extensions may be deemed necessary. The sponsor shall also grant the City all easements deemed necessary by the City for purposes of extending such public rights-of-way, public utilities, or any necessary drainage easements.
B.
Specifically, the sponsor shall be responsible for having the developer extend South Street from Walter Street up to the property line of the Walter Street Development. The sponsor shall also be responsible for having the developer extend the public utilities up to the property line of the Walter Street Development. The Fennville Street Development shall be constructed with one garage for each dwelling unit. The sponsor shall grant a twenty-foot drainage easement as may be reasonably requested by the City.
[Amended 7-18-2016 by Ord. No. 16-01]
Provided that construction of each housing development commences within one year from the effective date of this article, this article shall remain in effect and shall not terminate so long as the mortgage loan for such housing development remains outstanding and unpaid.[1]
[1]
Editor's Note: Original Section 10, Limitation of exemptions, of Ord. No. 195, which previously followed this section, was repealed 7-19-1999 by Ord. No. 198 and 7-19-1999 by Ord. No. 199.
[Adopted 2-6-2006 by Ord. No. 218]
This article shall be known and cited as the "City of Fennville Housing Development Authority Tax Exemption Ordinance For Lexington Square Apartments."
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 citizens of low income and to encourage the development 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, and codified at MCL 125.1401 et seq.) (the "Act"). The Act authorizes the City to establish or change a service charge to be paid in lieu of taxes by any or all classes of housing exempt from taxation under the Act. It is further acknowledged that because such housing for persons of low income is a public necessity, and because the City will be benefited and improved by such housing, the City's encouragement of such housing by providing certain real estate tax exemptions 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 taxes during the periods contemplated in this article are essential to the determination of economic feasibility of housing developments which are constructed and financed in reliance on such tax exemption, this article and the service charge.
B.
The City acknowledges that The Hovey Companies, L.L.C. (the "sponsor") has offered, subject to receipt of a mortgage loan or an allocation under the low-income housing tax credit ("LIHTC") from the Michigan State Housing Development Authority, to develop, construct, own and operate a housing development identified as Lexington Square Apartments on certain property located at 325 South Street in the City of Fennville to serve persons of low income. The City further acknowledges that the sponsor has offered to pay the City on account of this housing development an annual service charge for public services in lieu of all property taxes.
As used in this article, the following terms shall have the meanings indicated:
The State Housing Development Authority Act, being Public Act 346 of 1966 of the State of Michigan, as amended.[1]
The total collections during an agreed annual period from all occupants of a housing development representing rents or occupancy charges, exclusive of charges for gas, electricity, heat or other utilities furnished to the occupants as defined in MCL 125.1411(m) for the calendar year.
The Michigan State Housing Development Authority.
A housing 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 determines improve the quality of the development as it relates to housing for persons of low income.
A loan to be made by the Authority to the sponsor for the construction and permanent financing of the housing development, or a loan to be made or insured by HUD.
Persons or families whose yearly income makes them eligible to move into a housing development that is tax exempt, as defined in Section 15a of the Act[2] and as may be further defined in the rules promulgated by the Authority.
Persons or entities who have applied to either the Authority for a mortgage loan or for an allocation under the Low-Income Housing Tax Credit Program, or to another governmental entity for a federally aided loan, as defined by the Act, to finance a housing development. The Hovey Companies, L.L.C. located at 124 E. Washington Street, Suite C, Dewitt, Michigan, 48820 is presently the sponsor of the housing development identified in § 364-14 of this article.
Fuel, water, sanitary sewer service and/or electrical service that are paid by the housing development.
The class of housing developments to which the tax exemption shall apply, and for which a service charge shall be paid in lieu of taxes, shall be family housing for persons of low income, which is financed or assisted pursuant to the Act. It is determined that the housing development identified as "Lexington Square Apartments" is of this class.
A.
The housing development identified as "Lexington Square Apartments" and the property on which it is constructed shall be exempt from all property taxes from and after the commencement of the construction. 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, subject to receipt of a mortgage loan from the Authority, to construct, own and operate the housing development, agrees to accept payment of an annual service charge for public services in lieu of all property taxes. The annual service charge for the housing development identified as "Lexington Square Apartments" shall be equal to 4% of the difference between the annual shelter rents actually collected and utilities, except as provided below.
B.
The annual service charge to be paid in lieu of taxes for the part of the housing development that is tax exempt and that is occupied by persons of low income shall not exceed an amount equal to the taxes that would be paid but for the tax exemption granted under this article. The annual service charge to be paid in lieu of taxes for the part of the housing development that is tax exempt and that is occupied by persons other than persons of low income shall be equal to the full amount of the taxes that would be paid on that portion of the housing development if the housing development were not tax exempt.
Notwithstanding the provisions of Section 15(a)(5) of the Act[1] 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.
[1]
Editor's Note: See MCL 125.1415a.
A.
The annual service charge determined pursuant to § 364-14 of 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 paid on or before July 1 of each year. On or before May 15 of each year, the sponsor shall file with the City a certification by the Authority showing the number of units in Lexington Square Apartments occupied by persons of low income as of December 31 of the previous year. The sponsor shall also provide, on or before May 15 of each year, documentation and accounting records showing the rent or occupancy charges received from those units from the period of January 1 through April 30. The City shall project those revenues over 12 months and compute the service charge payable July 1 based on those projections. The City shall invoice the sponsor no later than June 1 of each year for the service charge due on July 1. On or before January 15 of each year, the sponsor shall file with the City documentation and accounting records showing the rent or occupancy charges received from those units considered to be occupied by persons of low income and number of units occupied by persons other than low income as of December 31 of the previous year. The City shall then finally determine the service charge for the previous year. Any additional service charge shall be payable by the sponsor on demand. Any overpayment of service charge shall be promptly refunded to the sponsor by the City. In providing the certificate referenced in this section, the Authority shall only be required to verify the income of the unit occupants at the time of initial occupancy.
B.
The annual service charge to be paid in lieu of taxes shall become a lien against the property and the housing development and, if delinquent, shall be subject to the same interest, penalties, collection charges, and enforcement mechanisms as general property taxes, except that an unpaid annual service charge shall not be returned as delinquent to the County Treasurer. Without affecting its rights under this section, the City Treasurer may, in their name, or in the name of the City, institute a civil action against the owner of the housing development in the Allegan County Circuit Court to recover the amount of the unpaid annual service charge and interest, penalties, and collection charges on the annual service charge plus the costs of collecting said amounts, including reasonable attorney fees.
Provided that construction of the housing development commences within one year from the effective date of this article, this article shall remain in effect and shall not terminate: