This article shall be known and cited as the "Blackman Township Workforce Housing PILOT Ordinance."
[Adopted 12-16-2024 by Ord. No. 122.1.2024]
It is a proper public purpose for Blackman Township to encourage the development or rehabilitation of workforce housing for persons and families whose household income is not greater than 120% of area median income by exempting such housing from all ad valorem property taxes imposed by any taxing jurisdiction and providing for payment of an annual service charge for public services in lieu of all such taxes. A PILOT, or service charge payment in lieu of taxes, is an effective means of incentivizing the construction, rehabilitation and/or preservation of workforce housing. A stable and predictable service charge paid in lieu of all ad valorem property taxes for a fixed period is essential to the determination of the economic feasibility of workforce housing projects developed or rehabilitated in reliance on such tax exemption. Blackman Township is authorized by section 15a of Public Act 346 of 1966, as amended, MCL 125.1415a, to establish, or change by any amount it chooses, the service charge to be paid in lieu of all ad valorem taxes in accordance with section 15a with respect to new or rehabilitated workforce housing, but not an amount that exceeds the taxes that would be paid but for this authorization or the other limitations imposed by that section. Because workforce housing for individuals and families whose household income is not greater than 120% of area median income is a public necessity, and because Blackman Township will be benefited and improved by such housing, encouraging the same through an ad valorem property tax exemption is a valid public purpose.
Means an amount equal to the difference between the following:
The millage rate levied for operating purposes by the County multiplied by the current Taxable Value of a workforce housing project for which a PILOT Resolution has been adopted, and
The amount of the annual service charge paid in lieu of ad valorem property taxes by the housing project under § 105-94C that is distributed to the County pursuant to MCL 125.1415a(5).
Means the total collections during an agreed annual period from or paid on behalf of the occupants of a housing project representing rent or occupancy charges, exclusive of charges for gas, electricity, heat, or other utilities furnished to the occupants and paid for by the housing project.
Means the Michigan State Housing Development Authority.
Means the County of Jackson.
Means a project-specific resolution adopted by the Blackman Township Board that approves a housing project for exemption under this article.
Means a recorded agreement between Sponsor and Blackman Township running with the land that restricts the use of the housing project to workforce housing, as defined in this Ordinance, for a period not to exceed 15 years, or such greater or lesser period of time as may be authorized by state law and as may be required by the PILOT Resolution.
Means any person or entity applying for a workforce housing exemption under this Ordinance, and includes any person or entity who subsequently owns the housing project.
Means taxable value as calculated under section 27a of the general property tax act, 1893 PA 206, MCL 211.27a.
Means rental units or other housing options that are reasonably affordable to, and occupied by, a household whose total household income is not greater than 120% of the area median income published by the United States Department of Housing and Urban Development.
A.
The class of housing projects to which the tax exemption shall apply and for which a service charge may be paid in lieu of all ad valorem property taxes are housing projects being developed or rehabilitated for workforce housing.
B.
Subject to the recording of a Restrictive Covenant, workforce housing and the property on which such housing is or will be located shall be exempt from all ad valorem property taxes as of December 31 of the year in which (a) the housing project is occupied as workforce housing, as defined in the Workforce Housing Ordinance and the Act, or (b) the construction or rehabilitation of the housing project begins, whichever occurs first. Construction must start or occupancy of the housing project as workforce housing must occur within one year of the date of the Authority's notification of exemption or such longer period of time as may be provided by the PILOT Resolution.
C.
Blackman Township will accept payment of an annual service charge in lieu of all ad valorem property taxes for public services from the owner of a housing project for which Blackman Township has received a certified notification of exemption from the Authority in accordance with the following:
(1)
Subject to Subsections D, E and F, for a new construction project, an amount that is the greater of the tax on the property on which the project is located for the tax year proceeding the date on which the construction is commenced or 10% of the Annual Shelter Rent obtained from the project, or such lower percentage as may be set forth in a PILOT Resolution.
(2)
Subject to Subsections D, E and F, for a rehabilitation project, an amount that is the lesser of the tax on the property on which the project is located for the tax year proceeding the date on which rehabilitation is commenced or 10% of the annual shelter rent obtained from the project, or such lower percentage as may be set forth in a PILOT Resolution.
(3)
The service charge paid in lieu of taxes shall not exceed the amount in ad valorem taxes that the Sponsor would have otherwise paid if the workforce housing project were not tax exempt.
D.
Notwithstanding the provisions of MCL 125.1415a(3)(b) and 125.1415a(7) to the contrary, upon the adoption of a PILOT Resolution and receipt of a certified notification of exemption from the Authority, a contract shall be deemed effected between Blackman Township and the sponsor, to provide a tax exemption and accept service charge payments in lieu of taxes as previously described by this section.
E.
Notwithstanding Subsection C, the service charge paid each year in lieu of taxes for that part of a workforce housing project that is tax exempt under this article but not used for workforce housing must be equal to the full amount of the taxes that would be paid on that portion of the project as if the project were not tax exempt. The owner of the project shall allocate the benefits of any tax exemption granted pursuant to this article exclusively to workforce housing or to the maintenance and preservation of the housing project as a safe, decent, and sanitary workforce housing.
F.
The annual service charge under Subsection C for a workforce housing project for which a PILOT Resolution has been adopted must be increased by the additional amount if both of the following requirements are met:
(1)
Not later than 45 days after the county treasurer's receipt of the certified notification of exemption, the County Board of Commissioners passes a resolution, by majority vote, that provides that the additional amount must be paid.
A.
Following adoption of the PILOT Resolution, the sponsor must submit an affidavit to the Authority in the form required by the Authority for certification by the Authority that the project is eligible for the workforce housing exemption.
B.
Upon receipt of notification from the Authority that the project is eligible for a workforce housing exemption, the sponsor or the Authority must file the certified notification of exemption with the Blackman Township assessor before November 1 of the year preceding the tax year in which the exemption is to be effective.
C.
Not later than five business days after receipt of the certified notification of exemption, the assessor shall provide a copy of the certified notification of exemption to the County treasurer.
A.
The sponsor shall remit the annual PILOT payment to the Blackman Township treasurer no later than June 1 of each year, or such other date provided for in the PILOT Resolution. The PILOT payment shall be accompanied by a statement certified by the owner, showing the actual annual shelter rent obtained for the preceding calendar year.
B.
Except as otherwise provided in this section and § 105-94, any payments for public services under this article shall be distributed to the governmental units levying the general property tax in the same proportion as prevailed with the general property tax in the previous calendar year. The distribution to those governmental units shall be made as if the number of mills levied for local school district operating purposes were equal to the number of mills levied for the purposes in 1993 minus the number of mills levied under the state education tax act, 1993 PA 331, MCL 211.901 to 211.906, for the year for which the distribution is calculated. The amount of payments in lieu of taxes to be distributed to a local school district for operating purposes under this subsection must not be distributed to the local school district but instead must be paid to the state treasury and credited to the state school aid fund established by section 11 of article IX of the state constitution of 1963.
C.
Any PILOT payment or portion of PILOT payment remaining unpaid as of the due date shall bear interest at 1% per month and require payment of a 3% penalty fee. The collection of past due PILOT payments shall otherwise be in accordance with the provisions of Chapter 211 of the General Property Tax Act, Act 206 of 1893, as amended; MCL 211.44 et seq.
A.
A workforce housing project approved for an exemption by a PILOT Resolution shall be encumbered by a Restrictive Covenant recorded in the office of the register of deeds for the County.
B.
The Restrictive Covenant shall acknowledge (i) that the economic feasibility of the workforce housing project depends on the approval and continuing effect of the payment in lieu of all ad valorem taxes as approved by the PILOT resolution; (ii) the Township's agreement to accept payment of an annual service charge in lieu of all ad valorem taxes in consideration of the sponsor's offer to construct or rehabilitate workforce housing; and (iii) the amount of the annual service charge to be paid for each operating year.
C.
The Restrictive Covenant shall also provide (a) that the Restrictive Covenant may be enforced by Blackman Township and any tenants to be benefitted; (b) for the reporting and monitoring of the sponsor's compliance with the Restrictive Covenant, this article and the PILOT Resolution; (c) other remedies available to Blackman Township for non-compliance, including termination of the exemption; and (d) that the Restrictive Covenant cannot be modified or terminated except in a written instrument executed by the sponsor or then current owner and Blackman Township.
The provisions of this article shall be deemed to be severable, and should any provision 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 provision of this article, other than the 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 necessary to give this ordinance full force and effect.
This article shall become effective on January 1, 2026.