(A) The housing project identified as the Bronson Senior Apartments 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 Bronson 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 subchapter, 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 subchapter. 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 8.25% of the annual shelter rents actually collected by the development during each operating year. In no event, will the PILOT service charge collected be less than $10,000 annually. 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.
(B) In addition to the annual service charge of 8.25% the sponsor as outlined below, will include an additional payment deemed an inflationary increase to the normal service charge collected annually. This inflationary increase will consist of an additional 2.5% payment of the annual PILOT charge to the city. It is intended that the inflationary increase is an additional lump sum payment computed upon the base pilot charge at the end of the previous five year term and not an increase computed upon the base pilot percentage. An example that illustrates the additional payment to the pilot charge is included here as Exhibit 1 and 1a.
Exhibit 1. Inflationary PILOT Charge Payment Schedule
Year(s) | PILOT Percentage | Inflationary Increase to Annual PILOT Charge |
1-5 | 8.25% | n/a |
6-10 | 8.25% | 2.5% added to Year 5 charge |
11-15 | 8.25% | 2.5% added to Year 10 charge |
16-20 | 8.25% | 2.5% added to Year 15 charge |
Exhibit 1a. Projected PILOT Charge Amounts
Year(s) | PILOT Charge | Inflationary Increase to Annual PILOT Charge |
5-10 | $10,419.99 | 2.5% increase |
11-15 | $10,680.49 | 2.5% increase |
16-20 | $10,947.51 | 2.5% increase |
Year 20 | $11,221.19 | 2.5% increase |
(Ord. 204, passed 2-12-2018)