[Ord. of 5-11-2004]
It is acknowledged that it is a proper public purpose of the
State of Michigan and its political subdivision to provide housing
for its citizens of low and moderate 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, MCLA § 125.1401 et seq.).
The City is authorized by said 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 it chooses, not to
exceed the taxes that would be paid but for the act. It is further
acknowledged that such housing for persons of low and moderate income
is a public necessity; and as the City will be benefited and improved
by such housing, the encouragement of the same by providing certain
real estate tax exemption therefore is a valid public purpose; further,
that the continuance of the provisions of this article for the tax
exemption and the service charge in lieu of taxes during the periods
hereinafter contemplated are essential to the determination of economic
feasibility of housing developments which are constructed and financed
in reliance thereon.
[Ord. of 5-11-2004]
The City acknowledges that Ithaca Senior Housing Partners Limited
Dividend Housing Association Limited Partnership (a sponsor as defined
herein) has offered, subject to allocation of tax credit financing
from the authority, under Section 42 of the Internal Revenue Code,
as amended, to erect or operate and maintain a housing development
identified as Ithaca Senior Apartments, located on the property described
on attached "Exhibit A." [A copy of Exhibit A can be found in the
City's offices.]
[Ord. of 5-11-2004]
The following words, terms and phrases, when used in this article,
shall have the meanings ascribed to them in this section, except where
the context clearly indicates a different meaning:
The State Housing Development Authority Act, being Public
Act 346 of 1966, of the State of Michigan, as amended.
The total collections during an agreed annual period from
all occupants of a housing development representing rent or occupancy
charges, exclusive of charges for gas, electricity, heat, or other
utilities furnished to the occupants.
The Michigan State Housing Development Authority.
Are as defined by the U.S. Department of Housing and Urban
Development in regulated promulgated pursuant to the U.S. Housing
Act of 1947, as amended by the Housing and Community Development Act
of 1947. It is understood that such rents are meant to be the tenants'
rental contribution plus any federal subsidies.
A family wherein the head of the household is 55 years of
age or older or a single person who is 55 years of age or older.
A development which contains a significant element of housing
for low income persons or elderly 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 or elderly persons of low income.
Persons and families eligible to move into a housing development
financed by the authority.
A loan made or to be made by the authority to sponsors for
the construction and/or permanent financing of the housing developments.
Persons or entities which have applied to the authority for,
or previously received from the authority, a mortgage loan to finance
a housing development.
Fuel, water, sanitary sewer and/or electrical service, which
are paid by the development.
[Ord. of 5-11-2004]
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 that portion of a development
which is for elderly persons or low-income persons and which is financed
or assisted pursuant to the Act. It is further determined that Ithaca
Senior Housing Partners Limited Dividend Housing Association Limited
Partnership is of this class.
[Ord. of 5-11-2004]
The housing development identified as Ithaca Senior Apartments
and the property on which it shall be constructed shall be exempt
from all property taxes from and after the commencement of 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 the ordinance from which this
section derives and the qualification of the housing development for
exemption from all property taxes and a payment in lieu of taxes as
established in the ordinance from which this section derives, and
in consideration of the sponsor's offer, subject to receipt of
an allocation of low-income housing tax credits under Section 42 of
the Internal Revenue Code of 1986, as amended, 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 shall be equal to 6% of the annual
shelter rents less utilities.
[Ord. of 5-11-2004]
Notwithstanding the provision of Section 15(a)(5) of the Act,
to the contrary, a contract between the City and the sponsors, with
the authority as third party beneficiary thereunder, to provide tax
exemption and accept payments in lieu thereof as previously described
is effected by enactment of this article.
[Ord. of 5-11-2004]
The amount of the service charge in lieu of taxes for the immediately proceeding year shall be determined by the City of Ithaca. The sponsor shall furnish to said department by March 15, of the calendar year following the calendar year for which the service charge in lieu of taxes is to be determined, all documentation required to make said determination, which shall include but not be limited to the documentation required under § 12-64.
The service charge in lieu of taxes for the immediately preceding
calendar shall be payable to the City except that the annual payment
shall be paid on or before April 15 of the calendar year following
the calendar year for which the service charge in lieu of taxes to
be determined.
[Ord. of 5-11-2004]
This article shall remain in effect and shall not terminate
so long as a mortgage loan made to the sponsor for a development subject
to this article remains outstanding and unpaid or the authority has
any interest in property subject to a service charge under this article,
and so long as the project remains compliant with Section 42 of the
Internal Revenue Code of 1986, as amended, if applicable; provided
that construction of any housing development subject to this article
commences within one year from the effective date of this article
establishing the annual service charge for said development.
