ARTICLE V. SERVICE CHARGES IN LIEU OF TAXES FOR CERTAIN LOW INCOME HOUSING1
12-107—12-125. Reserved.
12-126. Purpose.
(a) It is acknowledged that it is a proper public purpose of the state and its political subdivisions to provide housing for its citizens of low 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, Public Act No. 346 of 1966 (MCL 125.1401 et seq.). The township is authorized by this 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 persons of low income is a public necessity, and as the township will be benefited and improved by such housing is a valid public purpose; further that the continuance of the provisions of this division for tax exemption and the service charge in lieu of taxes during the period contemplated in this division are essential to the determination of economic feasibility of the proposed housing development (development), which is to be constructed and financed in reliance on such tax exemption ordinance.
(b) The township acknowledges that the sponsor of the development has offered, subject to receipt of an allocation under the low income housing tax credit (LIHTC) laws, to erect, own and operate a housing development on certain property located in the township to serve persons of low and moderate income and that the sponsor has offered to pay the township on account of this housing development an annual service charge for public services in lieu of all taxes. In addition to units set aside for low and moderate income persons, the development may also contain units which shall be reserved for tenants who shall pay market rent. That portion of the development attributable to market rate units would pay its percentage of those taxes that would have been payable but for this division.
(Ord. No. 191, § 2, 1-19-1998)
12-127. Definitions.
The following words, terms and phrases, when used in this division, shall have the meanings ascribed to them as set forth in the Act or in this section, except where the context clearly indicates a different meaning:
Act means the state housing development authority act, Public Act No. 346 of 1966 (MCL 125.1401 et seq.).
Annual shelter rent for rent-restricted units means the total collections during an agreed annual period from all low income occupants, as provided for in this section, from the development representing rent or occupancy charges, exclusive of the portion of said charges attributable to gas, electricity, heat or other utilities furnished to the occupants by the sponsor.
Authority means the state housing development authority.
Development means the proposed multiple-family housing development located in the township on land more particularly described on exhibit "A" and made a part hereof by reference and kept on file in the office of the township clerk, to be known as Brookstone Place.
Housing development means a development which contains a significant element of housing for persons of low income and such elements of other housing, commercial, recreational, 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.
Low income persons or families means those persons and families whose income is 60 percent or less of the area median income as adjusted for family size and who are determined to be eligible to move into the development under the provisions of section 42, the units of whom shall be rent-restricted.
Market rate persons or families means those persons who shall be eligible to occupy units within the development irrespective of income and the units of who shall neither be rent-restricted nor eligible for benefits of the reduction in taxes otherwise brought about by this division.
Section 42 means section 42 of the Internal Revenue Code of 1986, as amended.
Sponsor means Brookstone Place limited dividend housing association limited partnership.
Township resident means anyone currently residing in the township or anyone currently working or notified that they are hired to work in the township.
Utilities means fuel, water, sanitary sewer service and/or electrical service which are paid by the sponsor.
(Ord. No. 191, § 3, 1-19-1998)
12-128. Class of housing developments.
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 section 42 housing developments which have received an LIHTC allocation from the authority pursuant to section 42. Based on representations and warranties of the sponsor, it is determined that the development is a housing development eligible for tax exemption provided by section 15a of the Act (MCL 125.1415).
(Ord. No. 191, § 4, 1-19-1998)
12-129. Establishment of annual service charge.
(a) The development and the property on which it will be constructed shall be exempt from all property taxes commencing with the first January 1 following: the commencement of construction; or compliance by the sponsor with all requirements imposed on the owner by subsection (I) of section 15a of the Act (MCL 125.1415a), whichever is later. The township, acknowledging that the sponsor and the authority have established the economic feasibility of the development in reliance upon the enactment and continuing effect of this division and the qualification of the development for exemption from all property taxes and a payment in lieu of taxes as established in this division, and in consideration of the sponsor’s offer, subject to receipt of a mortgage loan and a LIHTC allocation from the authority, agrees to accept payment of an annual service charge for public services in lieu of all property taxes.
(b) For 1997 and 1998 the annual service charge shall be the total real estate taxes which would otherwise be assessed against the lands and premises on which the development is to be built if they remained in an unimproved condition. Thereafter, the annual service charge shall consist of two components:
(1) The sum of seven percent of the collections from the total annual shelter rent attributable to the rent-restricted units during the period from January 1 through December 31 of each year (rent-restricted component); and
(2) The full amount of taxes which would be paid if the development were not tax exempt on that portion of the development occupied by other than low income families as provided for in section 12-127 (market rate component).
Notwithstanding the provisions of the immediately preceding sentences, for all years during which this section is operative, the annual service charge shall be no less than the total real estate taxes which would otherwise be assessed against the lands and premises on which the development is to be built if they remained in an unimproved condition.
(c) Notwithstanding any other provision in this section, the annual service charge shall be not less than $25,000.00 per year, consisting of the rent-restricted component and the market rate component.
(d) The determination of when each housing unit in the development is occupied by low income persons or families shall be made for each year as of December 31 of the immediately preceding year.
(Ord. No. 191, § 5, 1-19-1998)
12-130. Contractual effect of ordinance.
Notwithstanding the provisions of section 15a of the Act (MCL 125.1415a) to the contrary, a contract between the township 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 division.
(Ord. No. 191, § 6, 1-19-1998)
12-131. Payment of service charge.
The annual service charge in lieu of taxes as determined under the ordinance shall be payable in the same manner as general property taxes are payable to the township except that the annual payment shall be paid on or before July 1 of each year. On or before May 15 of each year, the sponsor shall file with the township a certification by the sponsor showing the number of units in the development occupied by persons who are not low income persons or families pursuant to section 12-127. The township shall compute the real estate taxes and invoice the sponsor no later than June 1 for the total service charge due July 1.
(Ord. No. 191, § 7, 1-19-1998)
12-132. Preference to township residents.
To the extent permissible under federal, state or local fair housing laws, the sponsor shall give preference for occupancy of the development to qualified applicants who are township residents.
(Ord. No. 191, § 8, 1-19-1998)
12-133. Benefits.
The benefits of the tax exemption granted pursuant to this division shall be allocated by the sponsor exclusively to the low income persons or families of the development in the form of reduced rent. Such benefits shall not be allocated to the market rate persons or families. The sponsor shall, at the request of the township, submit to the township such evidence and documentation as may be reasonably necessary to verify the sponsor’s compliance with this requirement.
(Ord. No. 191, § 9, 1-19-1998)
12-134. Duration.
Commencing with the tax year 1999 and ending with the tax year 2029, this division shall remain in effect and shall not terminate from the effective date hereof, provided:
(1) That the development remains subject to income and rent restrictions pursuant to section 42; and
(2) That construction of development commences on or before September 1, 1998.
(Ord. No. 191, § 10, 1-19-1998)
12-135. Audits; inspection of records.
Subject to any limitations imposed by law, the sponsor shall provide to the township such accounting records, audits and financial reports as the township shall reasonably require to verify the computation of the annual service charge as provided by this division. The sponsor shall maintain such records of rent or occupancy charges received and the occupancy of units in the development as will permit the township to verify which of the units in the development have been occupied by low income persons or families. Subject to any limitations imposed by law, the books and records of the sponsor pertaining to the development shall be available for review and audit by the township at all reasonable times.
(Ord. No. 191, § 11, 1-19-1998)
12-136. Lien.
Annual service charges payable pursuant to this division shall be a lien on the development, and, if delinquent, shall be collected and enforced in the same manner as general property taxes.
(Ord. No. 191, § 12, 1-19-1998)
12-137—12-155. Reserved.
12-156. Purpose.
(a) It is acknowledged that it is a proper public purpose of the state and its political subdivisions to provide housing for its citizens of low 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, Public Act No. 346 of 1966 (MCL 125.1401 et seq.). The township is authorized by this 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 persons of low income is a public necessity, and as the township will be benefited and improved by such housing is a valid public purpose; further, that the continuance of the provisions of this division for tax exemption and the service charge in lieu of taxes during the period contemplated in this division are essential to the determination of economic feasibility of the proposed housing development (development), which is to be constructed and financed in reliance on such tax exemption ordinance.
(b) The township acknowledges that the sponsor of the development has offered, subject to receipt of an allocation under the low income housing tax credit (LIHTC) laws, to erect, own and operate a housing development on certain property located in the township to serve persons of low and moderate income and that the sponsor has offered to pay the township on account of this housing development an annual service charge for public services in lieu of all taxes. In addition to units set aside for low and moderate income persons, the development may also contain units which shall be reserved for tenants who shall pay market rent. That portion of the development attributable to market rate units would pay its percentage of those taxes that would have been payable but for this division.
(Ord. No. 195, § 2, 2-7-2000)
12-157. Definitions.
The following words, terms and phrases, when used in this division, shall have the meanings ascribed to them as set forth in the Act or in this section, except where the context clearly indicates a different meaning:
Act means the state housing development authority act, Public Act No. 346 of 1966 (MCL 125.1401 et seq.).
Annual shelter rent for rent-restricted units means the total collections during an agreed annual period from all low income occupants, as provided for in this section, from the development representing rent or occupancy charges, exclusive of the portion of said charges attributable to gas, electricity, heat or other utilities furnished to the occupants by the sponsor.
Authority means the state housing development authority.
Development means the proposed multiple-family housing development located in the township, on land more particularly described on exhibit "A" and made a part hereof by reference and kept on file in the office of the township clerk, to be known as Brookstone Place II.
Housing development means a development which contains a significant element of housing for persons of low income and such elements of other housing, commercial, recreational, 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.
Low income persons or families means those persons and families whose income is 60 percent or less of the area median income as adjusted for family size and who are determined to be eligible to move into the development under the provisions of section 42, the units of whom shall be rent-restricted.
Market rate persons or families means those persons who shall be eligible to occupy units within the development irrespective of income and the units of who shall neither be rent-restricted nor eligible for benefits of the reduction in taxes otherwise brought about by this division.
Section 42 means section 42 of the Internal Revenue Code of 1986, as amended.
Sponsor means Brookstone Place II limited dividend housing association limited partnership.
Township resident means anyone currently residing in the township or anyone currently working or notified that they are hired to work in the township.
Utilities means fuel, water, sanitary sewer service and/or electrical service which are paid by the sponsor.
(Ord. No. 195, § 3, 2-7-2000)
12-158. Class of housing developments.
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 section 42 housing developments which have received an LIHTC allocation from the authority pursuant to section 42. Based on representations and warranties of the sponsor, it is determined that the development is a housing development eligible for tax exemption provided by section 15a of the Act (MCL 125.1415a).
(Ord. No. 195, § 4, 2-7-2000)
12-159. Establishment of annual service charge.
(a) The development and the property on which it will be constructed shall be exempt from all property taxes commencing with the first January 1 following:
(1) The commencement of construction; or
(2) Compliance by the sponsor with all requirements imposed on the owner by subsection (I) of section 15(a) of the Act, whichever is later.
The township, acknowledging that the sponsor and the authority have established the economic feasibility of the development in reliance upon the enactment and continuing effect of this division and the qualification of the development for exemption from all property taxes and a payment in lieu of taxes as established in this division, and in consideration of the sponsor’s offer, subject to receipt of a mortgage loan and a LIHTC allocation from the authority, agrees to accept payment of an annual service charge for public services in lieu of all property taxes.
(b) For 2000 and 2001 the annual service charge shall be the total real estate taxes which would otherwise be assessed against the lands and premises on which the development is to be built if they remained in an unimproved condition. Thereafter, the annual service charge shall consist of two components:
(1) The sum of seven percent of the collections from the total annual shelter rent attributable to the rent-restricted units during the period from January 1 through December 31 of each year (rent-restricted component); and
(2) The full amount of taxes which would be paid if the development were not tax exempt on that portion of the development occupied by other than low income families as provided for in section 12-157 (market rate component).
Notwithstanding the provisions of the immediately preceding sentences, for all years during which this section is operative, the annual service charge shall be no less than the total real estate taxes which would otherwise be assessed against the lands and premises on which the development is to be built if they remained in an unimproved condition.
(c) Notwithstanding any other provision in this section, the annual service charge shall be not less than $25,000.00 per year, consisting of the rent-restricted component and the market rate component.
(d) The determination of when each housing unit in the development is occupied by low income persons or families shall be made for each year as of December 31 of the immediately preceding year.
(Ord. No. 195, § 5, 2-7-2000)
12-160. Contractual effect of ordinance.
Notwithstanding the provisions of section 15a of the Act (MCL 125.1415a) to the contrary, a contract between the township 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 division.
(Ord. No. 195, § 6, 2-7-2000)
12-161. Payment of service charge.
The annual service charge in lieu of taxes as determined under the ordinance shall be payable in the same manner as general property taxes are payable to the township except that the annual payment shall be paid on or before July 1 of each year. On or before May 15 of each year, the sponsor shall file with the township a certification by the sponsor showing the number of units in the development occupied by persons who are not low income persons or families pursuant to section 12-157. The township shall compute the real estate taxes and invoice the sponsor no later than June 1 for the total service charge due July 1.
(Ord. No. 195, § 7, 2-7-2000)
12-162. Preference to township residents.
To the extent permissible under federal, state or local fair housing laws, the sponsor shall give preference for occupancy of the development to qualified applicants who are township residents.
(Ord. No. 195, § 8, 2-7-2000)
12-163. Benefits.
The benefits of the tax exemption granted pursuant to this division shall be allocated by the sponsor exclusively to the low income persons or families of the development in the form of reduced rent. Such benefits shall not be allocated to the market rate persons or families. The sponsor shall, at the request of the township, submit to the township such evidence and documentation as may be reasonably necessary to verify the sponsor’s compliance with this requirement.
(Ord. No. 195, § 9, 2-7-2000)
12-164. Duration.
Commencing with the tax year 2001 and ending with the tax year 2031, this division shall remain in effect and shall not terminate from the effective date hereof, provided:
(1) That the development remains subject to income and rent restrictions pursuant to section 42; and
(2) That construction of development commences on or before December 31, 2000.
(Ord. No. 195, § 10, 2-7-2000)
12-165. Audits; inspection of records.
Subject to any limitations imposed by law, the sponsor shall provide to the township such accounting records, audits and financial reports as the township shall reasonably require to verify the computation of the annual service charge as provided by this division. The sponsor shall maintain such records of rent or occupancy charges received and the occupancy of units in the development as will permit the township to verify which of the units in the development have been occupied by low income persons or families. Subject to any limitations imposed by law, the books and records of the sponsor pertaining to the development shall be available for review and audit by the township at all reasonable times.
(Ord. No. 195, § 11, 2-7-2000)
12-166. Lien.
Annual service charges payable pursuant to this division shall be a lien on the development and, if delinquent, shall be collected and enforced in the same manner as general property taxes.
(Ord. No. 195, § 12, 2-7-2000)
12-167—12-185. Reserved.
12-186. Purpose.
(a) It is acknowledged that it is a proper public purpose of the state and its political subdivisions to provide housing for its citizens of low 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, Public Act No. 346 of 1966 (MCL 125.1401 et seq.). The township is authorized by this 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 persons of low income is a public necessity, and as the township will be benefited and improved by such housing is a valid public purpose; further; that the continuance of the provisions of this division for tax exemption and the service charge in lieu of taxes during the period contemplated in this division are essential to the determination of economic feasibility of the proposed housing development (development), which is to be constructed and financed in reliance on such tax exemption ordinance.
(b) The township acknowledges that the sponsor of the development has offered, subject to receipt of an allocation under the low income housing tax credit (LIHTC) laws, to erect, own and operate a housing development on certain property located in the township to serve persons of low and moderate income and that the sponsor has offered to pay the township on account of this housing development an annual service charge for public services in lieu of all taxes.
(Ord. No. 196, § 2, 7-10-2000)
12-187. Definitions.
The following words, terms and phrases, when used in this division, shall have the meanings ascribed to them as set forth in the Act or in this section, except where the context clearly indicates a different meaning:
Act means the state housing development authority act, Public Act No. 346 of 1966 (MCL 125.1401 et seq.).
Annual shelter rent for rent-restricted units means the total collections during an agreed annual period from all low income occupants, as provided for herein in this section, from the development representing rent or occupancy charges, exclusive of the portion of said charges attributable to gas, electricity, heat or other utilities furnished to the occupants by the sponsor.
Authority means the state housing development authority.
Development means the proposed multiple-family housing development located in the township on land more particularly described on exhibit "A" and made a part hereof by reference and kept on file in the office of the township clerk, to be known as Dorchester Court.
Housing development means a development which contains a significant element of housing for persons of low income and such elements of other housing, commercial, recreational, 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.
Low income persons or families means those persons and families whose income is 60 percent or less of the area median income as adjusted for family size and who are determined to be eligible to move into the development under the provisions of section 42, the units of whom shall be rent-restricted.
Market rate persons or families means those persons who shall be eligible to occupy units within the development irrespective of income and the units of who shall neither be rent-restricted nor eligible for benefits of the reduction in taxes otherwise brought about by this division.
Section 42 means section 42 of the Internal Revenue Code of 1986, as amended.
Sponsor means Dorchester Court limited divided housing association limited partnership.
Township resident means anyone currently residing in the township or anyone currently working or notified that they are hired to work in the township.
Utilities means fuel, water, sanitary sewer service and/or electrical service which are paid by the sponsor.
(Ord. No. 196, § 3, 7-10-2000)
12-188. Class of housing developments.
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 section 42 housing developments which have received an LIHTC allocation from the authority pursuant to section 42. Based on representations and warranties of the sponsor, it is determined that the development is a housing development eligible for tax exemption provided by section 15a of the Act (MCL 125.1415a).
(Ord. No. 196, § 4, 7-10-2000)
12-189. Establishment of annual service charge.
(a) The development and the property on which it will be constructed shall be exempt from all property taxes commencing with the first January 1 following:
(1) The commencement of construction; or
(2) Compliance by the sponsor with all requirements imposed on the owner by subsection (I) of section 15a of the Act (MCL 125.1415a), whichever is later.
The township, acknowledging that the sponsor and the authority have established the economic feasibility of the development in reliance upon the enactment and continuing effect of this division and the qualification of the development for exemption from all property taxes and a payment in lieu of taxes as established in this division, and in consideration of the sponsor’s offer, subject to receipt of a mortgage loan and a LIHTC allocation from the authority, agrees to accept payment of an annual service charge for public services in lieu of all property taxes.
(b) For 2000 and 2001 the annual service charge shall be the total real estate taxes which would otherwise be assessed against the lands and premises on which the development is to be built if they remained in an unimproved condition. Thereafter, the annual service charge shall consist of two components:
(1) The sum of seven percent of the collections from the total annual shelter rent attributable to the rent-restricted units during the period from January 1 through December 31 of each year (rent-restricted component); and
(2) The full amount of taxes which would be paid if the development were not tax exempt on that portion of the development occupied by other than low income families as provided for in section 12-187 (market rate component).
Notwithstanding the provisions of the immediately preceding sentences, for all years during which this section is operative, the annual service charge shall be no less than the total real estate taxes which would otherwise be assessed against the lands and premises on which the development is to be built if they remained in an unimproved condition.
(c) Notwithstanding any other provision in this section, the annual service charge shall be not less than $25,000.00 per year, consisting of the rent-restricted component and the market rate component.
(d) The determination of when each housing unit in the development is occupied by low income persons or families shall be made for each year as of December 31 of the immediately preceding year.
(Ord. No. 196, § 5, 7-10-2000)
12-190. Contractual effect of ordinance.
Notwithstanding the provisions of section 15a of the Act (MCL 125.1415a) to the contrary, a contract between the township 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 division.
(Ord. No. 196, § 6, 7-10-2000)
12-191. Payment of service charge.
The annual service charge in lieu of taxes as determined under the ordinance shall be payable in the same manner as general property taxes are payable to the township except that the annual payment shall be paid on or before July 1 of each year. On or before May 15 of each year, the sponsor shall file with the township a certification by the sponsor showing the number of units in the development occupied by persons who are not low income persons or families pursuant to section 12-187. The township shall compute the real estate taxes and invoice the sponsor no later than June 1 for the total service charge due July 1.
(Ord. No. 196, § 7, 7-10-2000)
12-192. Preference to township residents.
To the extent permissible under federal, state or local fair housing laws, the sponsor shall give preference for occupancy of the development to qualified applicants who are township residents.
(Ord. No. 196, § 8, 7-10-2000)
12-193. Benefits.
The benefits of the tax exemption granted pursuant to this division shall be allocated by the sponsor exclusively to the low income persons or families of the development in the form of reduced rent. Such benefits shall not be allocated to the market rate persons or families. The sponsor shall, at the request of the township, submit to the township such evidence and documentation as may be reasonably necessary to verify the sponsor’s compliance with this requirement.
(Ord. No. 196, § 9, 7-10-2000)
12-194. Duration.
Commencing with the tax year 2001 and ending with the tax year 2031, this division shall remain in effect and shall not terminate from the effective date hereof, provided that the development remains subject to income and rent restrictions pursuant to section 42.
(Ord. No. 196, § 10, 7-10-2000)
12-195. Audits; inspection of records.
Subject to any limitations imposed by law, the sponsor shall provide to the township such accounting records, audits and financial reports as the township shall reasonably require to verify the computation of the annual service charge as provided by this division. The sponsor shall maintain such records of rent or occupancy charges received and the occupancy of units in the development as will permit the township to verify which of the units in the development have been occupied by low income persons or families. Subject to any limitations imposed by law, the books and records of the sponsor pertaining to the development shall be available for review and audit by the township at all reasonable times.
(Ord. No. 196, § 11, 7-10-2000)
12-196. Lien.
Annual service charges payable pursuant to this division shall be a lien on the development, and, if delinquent, shall be collected and enforced in the same manner as general property taxes.
(Ord. No. 196, § 12, 7-10-2000)
State Law reference—State housing development authority act of 1966, MCL 125.1401 et seq.