[HISTORY: Adopted by the City Council of the City of Coldwater 9-22-2014 by Ord. No. 781. Amendments noted where applicable.]
This chapter shall be known and cited as the "City of Coldwater
Tax Exemption Ordinance for Anderson Pointe."
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 in lieu of property
taxes in accordance with the Act.[1] The City of Coldwater is authorized by the Act 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 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 City of Coldwater 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 chapter for the tax exemption and the service
charge in lieu of all ad valorem taxes during the period contemplated
in this chapter are essential to the determination of economic feasibility
of the housing development that is to be constructed or rehabilitated
with financing extended in reliance on such tax exemption.
The City of Coldwater acknowledges that the Sponsor (as defined
below) has offered, subject to receipt of an allocation under the
Low Income Housing Tax Credit Program administered by the Michigan
State Housing Development Authority, to construct, own and operate
a housing development identified as Anderson Pointe on certain property
located at 150 Anderson Drive in the City of Coldwater to serve low-income
persons and families, and 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 ad valorem property taxes.
[1]
Editor's Note: See MCLA § 125.1401 et seq.
All terms in this chapter shall be defined as set forth in the
Act, except as follows:
The State Housing Development Authority Act, being Public
Act 346 of 1966, as amended.[1]
The total collections during an agreed annual period from
or paid on behalf of all occupants of a housing project representing
rent or occupancy charges, exclusive of charges for gas, electricity,
heat, or other utilities furnished to the occupants by the Sponsor.
The Michigan State Housing Development Authority.
The City of Coldwater, a home rule municipality organized
pursuant to Public Act 279 of 1909, as amended, and located in Branch
County, Michigan.
The multiple-family housing development to be located in
the City on certain unplatted to be known as "Anderson Pointe, Phase
I."
A 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 has determined improves the quality of the development as
it relates to housing for persons of low income.
The Low Income Housing Tax Credit Program administered by
the Authority under Section 42 of the Internal Revenue Code of 1986,
as amended.
Persons and families eligible to move into a housing development.
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 development, and secured by a mortgage
on the housing development.
Herman & Kittle Properties, Inc., and any entity that
receives or assumes a mortgage loan.
Charges for gas, electric, water, sanitary sewer and other
utilities furnished to the occupants that are paid by the housing
development.
[1]
Editor's Note: See MCLA § 125.1401 et seq.
It is determined that 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 housing developments used exclusively
by low-income persons and families that are financed with a mortgage
loan. It is further determined that Anderson Pointe is of this class.
The housing project identified as Anderson Pointe and the property
on which it will be located shall be exempt from all ad valorem property
taxes from and after the issuance of a certificate of occupancy for
the development. The City of Coldwater 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 chapter, and the qualification of the housing development
for exemption from all ad valorem property taxes and a payment in
lieu of taxes as established in this chapter. Therefore, in consideration
of the Sponsor's offer to construct and operate the development,
the City 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 8% of the annual shelter rents actually collected by the
development during each operating year. Nothing in this section shall
be construed to exempt the development and the property on which it
is to be constructed from any special assessments for street or other
public improvements or as a result of its location within a business
improvement district authorized by 1999 Public Act 49, as amended.
Notwithstanding the provisions of Section 15(a)(5) of the Act
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 chapter.
Notwithstanding § 895-5, 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 annual service charge in lieu of taxes as determined under
this chapter shall be payable in the same manner as general property
taxes are payable to the City and distributed to the several units
levying the general property tax in the same proportion as prevailed
with the general property tax in the previous calendar year. The annual
payment for each operating year shall be paid on or before September
15 of the following year. Collection procedures shall be in accordance
with the provisions of the General Property Tax Act (1893 PA 206,
as amended; MCLA § 211.1 et seq.). Annual payments in arrears
shall be subject to interest of 1% per month until the 12th month
after their due date, and to interest of 1.5% per month retroactive
to the due date for annual payments in arrears for longer than 12
months. Subject to any limitations imposed by law, the Sponsor shall
provide to the City such accounting records, audits, and financial
reports as the City shall reasonably require to verify the computation
of the annual service charge as provided by this section as of December
31 of each year. The Sponsor shall maintain such records of rent or
occupancy charges received and the occupancy of units in the development
as will permit the City to verify which of the units in the development
have been occupied by low-income persons or families. Annual service
charges payable pursuant to this section shall be a lien on the development,
and if delinquent, without prejudice to any remedies for arrears of
payment or preceding breach of covenant, shall, at the election of
the City, be collected and enforced in the same manner as general
property taxes.
This chapter shall remain in effect 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. The exemption from all ad valorem property taxes
established by this chapter shall terminate upon the refinancing or
payoff of the MSHDA mortgage loan or upon the sale of the development.
The various sections and provisions of this chapter shall be
deemed to be severable, and should any section or provision of this
chapter be declared by any court of competent jurisdiction to be unconstitutional
or invalid the same shall not affect the validity of this chapter
as a whole or any section or provision of this chapter, 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 chapter are repealed to the extent of
such inconsistency or conflict.
This chapter shall become effective 21 days after its adoption
and publication as prescribed by law and as provided in the City Charter.
