This article shall be known and cited as the "Village of Bellevue PILOT Tax Exemption Ordinance-Bellevue Place and Rivervue Apartments."
[HISTORY: Adopted by the Village Council of the Village of Bellevue as indicated in article histories. Amendments noted where applicable.]
[Adopted 9-13-2022 by Ord. No. 2022-003]
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 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.[1] The Village 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 Village 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.
[1]
Editor's Note: See MCLA 125.1401 et seq.
B.
The Village acknowledges that the sponsor has offered, subject to receipt of an allocation under the Low Income Housing Tax Credit ("LIHTC") Program by the Michigan State Housing Development Authority, to construct and rehabilitate, own and operate a housing project identified as Bellevue Place and Rivervue Apartments on certain property located at: See attached Exhibit A.[2] in the Village to serve low-income persons and families, and that the sponsor has offered to pay the Village on account of this housing project an annual service charge for public services in lieu of all ad valorem property taxes.
[2]
Editor's Note: Exhibit A is included as an attachment to this chapter.
Means the total collections during a calendar year from all occupants of the housing development representing rent, plus any subsidy paid on behalf of the occupant, and plus any occupancy charges. Annual shelter rents shall be reduced by charges for gas, electricity, heat or other utilities furnished to the occupants.
Means the Michigan State Housing Development Authority.
Means the LIHTC program administered by the Authority under Section 42 of the Internal Revenue Code of 1986, as amended.[1]
Means persons and families eligible to move into a housing project.
Means 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.
Means GL Bellevue Limited Dividend Housing Association Limited Partnership and any entity that receives or assumes a mortgage loan.
Means charges for gas, electric, water, sanitary sewer and other utilities furnished to the occupants that are paid by the housing project.
[1]
Editor's Note: See 26 U.S.C. § 42.
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 Bellevue Place and Rivervue Apartments is of this class.
The housing project identified as Bellevue Place and Rivervue Apartments and the property on which it will be located shall be exempt from all ad valorem property taxes from and after the commencement of construction or rehabilitation. The Village 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 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 to the specifications as approved by the Village Planning Commission and operate the housing project, the Village 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 9% of the annual shelter rents actually collected by the housing project during each operating year.
Notwithstanding the provisions of Section 15(a)(5) of the Act to the contrary, a contract between the Village 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.
Notwithstanding § 137-5, 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.
The sponsor shall report the annual shelter rent for the housing project to the Village within 45 days of the end of the prior calendar year. The Village shall have the right to inspect the sponsor's records for the housing project and the right to audit and recompute any amounts determined to be annual shelter rents.
The service charge in lieu of taxes as determined under this section shall be paid on or before the 30th day of June, each year (beginning in the first year of the service charge as defined in § 131-5) based upon annual shelter rents collected during the preceding calendar year from the residential units of the development; the portion of the service charge that is equivalent to the amount that would be equal to what the ad valorem taxes would be on the commercial portion of the development if it were taxed separately shall also be paid each year at this time. Calculations of the annual shelter rents which in the sole opinion of the Village, are sufficiently detailed to document the service charge, as based upon annual shelter rents collected during the preceding calendar year shall be provided with the payment. 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.).
Annually the sponsor shall provide the Village's Assessor with a copy of any independent audit furnished to the Authority that covers the prior year's operation of the housing project within 30 days of the sponsor's receipt of the audit. If the audit discloses that the service charge paid in the prior year for the portion of the housing project occupied by qualified persons and families was greater or less than the percent of annual shelter rent to be paid under this article, the sponsor shall pay any shortfall or receive a credit against the current years' service charge as appropriate.
Notwithstanding anything contained herein to the contrary, should the sponsor fail to pay the final adjusted service charge in lieu of taxes granted hereunder, or fail to provide the verification of the calculations used to make a payment, the Village may determine that the sponsor has violated the Ordinance and may then follow the collection procedures pursuant to the provisions of the General Property Tax Act (1893 PA 206, as amended; MCL 211.1 et seq.) in order to collect the service charge.
In the event the sponsor sells the housing project to a new owner, that new owner shall agree to abide by the terms of this article. Otherwise, the tax-exempt status of the housing project under the Act shall terminate.
This article shall remain in effect for 20 years 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 including the LIHTC Regulatory Agreement.
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.
All ordinances or parts of ordinances inconsistent or in conflict with the provisions of this article are repealed to the extent of such inconsistency or conflict.
The sponsor shall supply a copy annually of its most recently supplied audited, reviewed, or compiled financial statements to the Village.
This article shall become effective on 10 days after publication as provided for in the Village Charter.
This article shall automatically be repealed should the sponsor not commence actual site construction within three years from the effective date of this article.