[HISTORY: Adopted by the City Commission of the City of Kalamazoo as indicated in article and section histories. Amendments noted where applicable.]
Appointment of City Assessor — See § 11.
City Assessor generally — See § 51.
Taxation generally — See § 77 et seq.
Board of Review — See § 81 et seq.
Special assessments for public improvements — See Ch. 32.
General Property Tax Act — See MCLA § 211.1 et seq.
Assessment role — See MSA § 7.24; MCLA § 211.24.
Completion of review of assessments — See MSA § 7.30(1); MCLA § 211.30a.
Tax exemption for housing project — See MSA § 16.114(15a); MCLA § 125.1415a(5).
[Adm. Code § A207.34]
The "tax day," for the purpose of assessing the value and determining the taxable situs of persons and property, both real and personal, in the City shall be the same as the "tax day" for such purposes as set forth in the General Property Tax Act of the State of Michigan (MSA § 7.1 et seq.; MCLA § 211.1 et seq.).
[Adm. Code § A207.35]
Each year, unless in conflict with law, the City Assessor shall, on or before the first Monday in March, make and complete the assessment roll.
[Adm. Code §§ A207.36, A207.38]
Each year the Board of Review shall meet, for the purpose of reviewing and correcting the assessment roll, at the office of the City Assessor, on the first Tuesday following the first Monday in March, between the hours of 9:00 a.m. and 5:00 p.m., and shall continue in session until the assessment roll shall have been revised, corrected and approved. The review of assessments shall be completed on or before the first Monday in April.
All notices required to be given to the public of the time and place of meeting of the Board of Review shall reflect the dates provided for in this section.
[Adm. Code §§ A502.1A, A502.1B; amended 2-24-1975 by Ord. No. 1045; 12-22-1980 by Ord. No. 1215; 6-3-1985 by Ord. No. 1352; 7-6-1987 by Ord. No. 1418; 2-8-1988 by Ord. No. 1431; 5-31-1988 by Ord. No. 1442; 11-6-1989 by Ord. No. 1477; 10-4-1993 by Ord. No. 1559; 11-6-2001 by Ord. No. 1726; 6-20-2008 by Ord. No. 1842; 7-20-2009 by Ord. No. 1857; 7-21-2014 by Ord. No. 1923; 9-21-2015 by Ord. No. 1935; 9-17-2018 by Ord. No. 1972]
Preamble. It is acknowledged that it is a proper public purpose of the State of Michigan and its political subdivisions to provide housing for low-income persons and families and to encourage the development of such housing by providing for a service charge payment in lieu of property taxes in accordance with the State Housing Development Authority Act. The City 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 the Act at any amount as agreed upon by the City and the sponsor, as allowed by the Act, not to exceed the taxes that would be paid but for the Act. It is further acknowledged that housing for low-income persons and families is a public necessity, and as the City will be benefited and improved by such housing, the encouragement of the same by providing a real estate tax exemption for such housing is a valid public purpose. It is further acknowledged that the continuance of the provisions of this section for tax exemption and the service charge payment in lieu of ad valorem property taxes during the periods contemplated by this section are essential to the determination of economic feasibility of housing developments that are constructed or rehabilitated with financing extended in reliance on such tax exemption.
Definitions. As used in this section, 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, MCLA § 125.1401 et seq.
- ANNUAL SHELTER RENTS
- The total collections during a calendar year or other agreed-upon annual period from or paid on behalf of all occupants of the housing development representing rent or occupancy charges, exclusive of charges for utilities furnished to the occupants. (This definition is not applicable to a housing development project which receives project-based Section 8 rental subsidy.)
- The Michigan State Housing Development Authority.
- CONTRACT RENTS
- The total contract rents (as defined by HUD in regulations promulgated pursuant to Section 8 of the United States Housing Act of 1937, as amended) received in connection with the operation of a housing development during a calendar year or other agreed-upon annual period, exclusive of utilities. (This definition is not applicable to a housing development project that does not receive project-based Section 8 rental subsidy.)
- HOUSING DEVELOPMENT PROJECT
- A development or project which meets the qualifications of and is eligible for a service charge payment in lieu of taxes under the Act and this section.
- The Department of Housing and Urban Development of the United States government.
- LOW-INCOME PERSONS AND FAMILIES
- Persons and families qualified pursuant to applicable HUD or Authority regulations, rules, or adopted program guidelines as being eligible to move into a housing development project governed by this section.
- 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, for the construction, rehabilitation, acquisition and/or permanent financing of a housing development project, that qualifies for a payment in lieu of taxes pursuant to the Act and this section and is secured by a mortgage on the housing project.
- Any persons or entities that receive or assume a mortgage loan.
- Charges for gas, electric, water, sanitary sewer and other utilities furnished to the occupants of a housing development governed by this section and which are paid by a housing development project sponsor.
Class of eligible housing development projects. It is determined that the class of housing development projects to which the tax exemption shall apply and for which a service charge shall be paid in lieu of such taxes shall be those housing development projects that are for persons and families of low income and which are financed with a mortgage loan. Prior to being eligible for tax exemption under this section, each housing development project shall be presented to the City Commission, which shall make a determination by resolution as to whether the proposed project qualifies for exemption and, if so, shall set forth the service charge payment in lieu of taxes to be made for that project. The service charge payment in lieu of taxes for the project set by the City Commission shall be reflective of the mix of dwelling units intended to be occupied by low-income individuals and families and dwelling units intended to be occupied by other than low-income individuals and families. Projects in which at least 80% of the dwelling units are for persons and families of low income are eligible for a tax exemption and the payment of a service charge in lieu of ad valorem taxes on all dwelling units. Projects in which less than 80% of units are reserved for low-income persons and families are eligible to pay a service charge on the income-restricted units only; for the remaining units, the developer may choose to pay a service charge equivalent to ad valorem taxes on those noneligible units or create a condominium to separate the non-eligible units from the eligible income-restricted tax-exempt units. Documentary evidence must be presented to the City Commission to establish that the project so qualifies for exemption, whether by making available to tenants a program of rent supplements or housing assistance payments, as established and allocated under the rules and regulations of either HUD or the Authority, or both, or the project is being operated in accordance with the requirements of the Housing Development Grant Program, or otherwise qualifies by law.
Establishment of annual service charges. The housing development projects and the property on which they are or will be located that are within the class of housing development projects for tax exemption pursuant to this section shall be eligible for exemption from all ad valorem property taxes. The City acknowledges that the sponsor, and the Authority, in the case of a sponsor receiving an Authority-financed mortgage loan, or the sponsor and the mortgage lender, in the case of a sponsor receiving a federally aided mortgage loan, have conditioned the economic feasibility of the housing development project in reliance upon the enactment and continuing effect of this section, as from time to time amended, and the qualification of the housing development project for exemption from all ad valorem property taxes and a service charge payment in lieu of taxes as established in this section. Therefore, the City, in consideration of the sponsor's offer, subject to receipt of a mortgage loan to construct or rehabilitate, own and operate said housing development project, agrees to accept payment of an annual service charge for public services in lieu of all ad valorem property taxes. The annual service charge payment shall be in an amount equal to a City Commission determined percentage of the annual shelter rents and contract rents actually collected by the housing development project sponsor during each calendar year or other agreed-upon annual period as determined by the City Commission in a resolution to be adopted pursuant to this section for each project.
Limitation on the payment of annual service charge. Except as otherwise provided in this section, the service charge to be paid each year in lieu of taxes for the part of an otherwise tax-exempt housing development which is occupied as commercial (nonresidential) space or 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 development if the project were not tax-exempt.
Manner of payment in lieu of taxes. Except as otherwise provided in this section, the annual service charge payment in lieu of taxes shall be based on the annual shelter rents or contract rents for the preceding calendar year or other agreed-upon annual period based on the audited financial report for that year as provided by the sponsor to the City. The annual service charge payment in lieu of taxes shall be paid to the City on or before 120 days after the close of the owner's fiscal year. Any annual service charge payment in lieu of taxes or any portion of the annual service charge payment remaining unpaid after 120 days after the close of the owner's fiscal year shall have interest of 1% per month, together with a penalty fee of 4%, added to it, provided that the total penalty fee shall not exceed 4% of the total service charge payment in lieu of taxes due and payable. The annual service charge payment in lieu of taxes shall be accompanied by an estimate of the shelter rents or contract rents for the current calendar year and a certified annual audit of the gross rentals and utility costs of the project for the preceding calendar year along with documentation regarding how the sponsor has calculated the amount of the annual service charge payment it is submitting to the City. The sponsor shall also provide the City with any other audited financial statements or other documentation as may be necessary to establish compliance with this section.
Contractual effect of section. Notwithstanding the provisions of Section 15(a)(5) of the Act to the contrary, a contract shall be deemed effected between the City of Kalamazoo and the sponsor, with the Authority as third-party beneficiary, to provide a tax exemption and accept service charge payments in lieu of taxes as previously described by this section upon the adoption of a project-specific resolution as provided by this section.
Duration. Unless indicated otherwise in the resolution adopted by the City Commission, the property tax exemption provided under this section shall commence at the beginning of the tax year immediately after the property has satisfied all the requirements under the Act. If, at the inception of the exemption provided by this section, the property does not generate any annual shelter rents during one or more calendar years or other agreed-upon annual period, the service charge payment shall equal the amount of regular ad valorem taxes that would have been paid for the property until the property begins to generate annual shelter rents or contract rents. Unless indicated otherwise in the resolution adopted by the City Commission, the duration of the property tax exemption provided under this section shall continue so long as the Authority-aided or federally aided mortgage loan remains outstanding and unpaid, provided that construction or rehabilitation of the housing development commences within one year from the effective date of the resolution. In the event that the housing development project sponsor fails to timely pay the annual service charge in lieu of taxes, the City Commission, by resolution, may, in addition to any other means available under law, elect to: 1) employ collection procedures that are in accordance with the provisions of the General Property Tax Act (1893 Public Act 206, as amended, MCLA § 211.1 et seq.); or 2) direct the City Attorney to commence an action in a Kalamazoo County court of competent jurisdiction to collect any outstanding past-due service charge payments and/or seek an order terminating the contract and revoking the tax-exempt status of the project due to the breach of the acknowledged contract between the City and sponsor created pursuant to the provisions of this section. If the tax-exempt status of the housing project is revoked, the housing development project shall then be placed on the tax rolls on the next December 31 following the revocation of the tax-exempt status of the project. If a housing development project is added to the tax rolls and any service charge payment remains unpaid at the time the housing development project is added to the tax rolls, the City officials in charge of the collection thereof shall certify to the tax assessing officer of the City the fact of such delinquency, whereupon such charge, together with any accumulated interest and penalty fees, shall be entered upon the tax rolls as a charge against such premises and shall be collected and the lien thereof enforced in the same manner as general City taxes against such premises.
Severability. Should any section, clause or provision of this section be declared by any court to be invalid, the same shall not affect the validity of this section as a whole or any part thereof other than the part so declared to be invalid.
Inconsistent ordinances. All ordinances or parts of ordinances inconsistent or in conflict with the provisions of this section are repealed to the extent of such inconsistency or conflict.
Savings clause. The adoption of amendments to this section shall not repeal or revoke the tax-exempt status and payment in lieu of taxes previously established for any other housing development by the City Commission.
[Added 12-26-1979 by Ord. No. 1182; amended 4-7-1980 by Ord. No. 1194]
Pursuant to § 87 of the City Charter, all taxes due and remaining unpaid after the last of the month in which such installment shall be payable shall have a penalty of 1% per month, together with a collection fee of 4% added to them; provided that the total collection fee shall not exceed 4% of the total tax due and payable on the first day of July next preceding.
Editor's Note: Former Art. II, Kalamazoo Downtown Development Authority Tax Increment Financing Plan and Development Plan, adopted 12-5-1988 by Ord. No. 1450, as amended, which immediately followed, was repealed 5-20-2019 by Ord. No. 1987. Ordinance No. 1987 also stated that Ord. No. 1679, which amended Ord. No. 1450, was repealed except to the extent that the legal description and boundaries of the Downtown Development Area (identified as Exhibits 1 and 2, respectively, in the Restated Plan that was attached as Exhibit A to Ord. No. 1679) remain full force and effect.