(a) Purpose, City Authority and Findings of Fact. It is acknowledged that it is a proper public purpose of the State of Michigan 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 State law. The City of Battle Creek is authorized to establish or change a service charge to be paid in lieu of taxes by any or all classes of housing exempt for taxation under the Michigan State Housing Development Authority Act of 1966, as amended, at any amount it chooses, but not to exceed the taxes that would be paid but for the Act. It is further found that housing for persons of low income is a public necessity and as the City will be benefitted and improved by such housing, the encouragement of same by providing certain real estate tax exemption for such housing is a valid public purpose. It is further found that the continuance of the provisions of this section for tax exemption and the service charge in lieu of taxes during the period contemplated in this section are essential to the development and economic feasibility of the proposed housing development which is to be constructed and financed in reliance on such tax exemption. The City acknowledges that the sponsor, Heritage Place at Hillside Limited Dividend Housing Association, Limited Partnership, has offered, subject to receipt of an allocation under the low income housing tax credit laws, to erect, own and operate a qualifying housing development on certain property located in the City to serve persons of low income 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 taxes.
(b) Definitions. All terms in this section shall be defined as set forth in the Act, except as follows:
(1) "Act" means the State Housing Development Authority Act, being Public Act 346 of 1966, as amended.
(2) "Annual shelter rent" means the total collections during an agreed annual period from all low income person or family occupants of 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.
(3) "Authority" means the Michigan State Housing Development Authority.
(4) "City" means the City of Battle Creek, a home rule municipality organized pursuant to Public Act 279 of 1909, as amended, and located in Calhoun County, Michigan.
(5) "Development" means the proposed senior citizen multiple family housing development located in the City of Battle Creek on certain unplatted land in the vacancy of Dickman Road bounded by Magner Street and Carl Terrace with access to Spring Street and to be known as Heritage Place at Hillside Senior Citizen Apartments.
(6) "Housing development" means the development which 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.
(7) "Low income person or family", or the plural thereof, 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 of the Internal Revenue Code of 1986, as amended, the units of whom shall be rent restricted.
(8) "Senior citizen" means a household composed of one or more persons at least one of whom is 55 years of age or more at the time of initial occupancy and all other members of the household are 50 years of age or older.
(9) "Sponsor" means Heritage Place at Hillside Limited Dividend Housing Association Limited Partnership.
(10) "Utilities" means fuel, water, sanitary sewer service and/or electrical service which are paid by the sponsor.
(11) "Section 42" means 26 U.S.C. 42 of the Internal Revenue Code of 1986, as amended.
(c) Applicable Class of Housing Developments. It is determined that the class of housing development 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 a low income housing tax credit 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.
(d) 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 City except the annual payment shall be paid on or before July 1 of each year for which this section is operative.
(e) Duration. Commencing with the tax year 2002, and ending with the tax year 2037, this section 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, and that construction of development commences on or before December 31, 2003.
(f) Benefits. The benefits of the tax exemption granted pursuant to this section 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 City, submit to the City such evidence and documentation as may be reasonably necessary to verify the sponsor's compliance with this requirement.
(g) Audit and Inspection of Records. 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. 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. 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 City at all times.
(h) Lien. Annual service charges payable pursuant to this section shall be a lien on the development, and, if delinquent, shall be collected and enforced in the same manner as general property taxes.
(Ord. 5-02. Passed 7-9-02.)