(A) Definitions.
ACT. The State Housing Development Authority Act of 1966 (1966 PA 346, as amended; M.C.L.A. § 125.1401, et seq.).
AUTHORITY. The Michigan State Housing Development Authority.
CONTRACT RENTS. The total Contract Rents (as defined by the U.S. Department of Housing and Urban Development in regulations promulgated pursuant to Section 8 of the U.S. Housing Act of 1937, as amended) received in connection with the operation of a housing project during an agreed annual period.
MORTGAGE LOAN. 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, for the construction, rehabilitation, acquisition and/or permanent financing of the project, and secured by a mortgage on the project.
PROJECT. The housing project identified as the Burton Place Apartments and the property on which it is located, described as: the North 383' of NW ¼ of SW ¼ except E 132' Section 22, T7N, R7E, City of Burton, County of Genesee, State of Michigan.
SPONSOR. JRC Burton Preservation Limited Dividend Housing Association, LLC, and any entity that receives or assumes a mortgage loan.
(B) Establishment of Annual Service Charge. The project shall continue to be exempt from all ad valorem property taxes from and after the commencement of construction or rehabilitation. The city acknowledges that the sponsor and the authority have established the economic feasibility of the project in reliance upon the enactment and continuing effect of this ordinance, and the qualification of the project for exemption from all ad valorem property taxes and a payment in lieu of taxes as established in this ordinance. Therefore, in consideration of the sponsor's offer to rehabilitate and operate the project, 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 (i) 4% of 95% of the contract rents actually collected by the project during each operating year less the costs of fuel, electricity and the service charge, or (ii) $30,000, whichever is greater. The annual service charge shall be paid on or before August 15 of each year.
(C) Duration. This ordinance shall remain in effect and shall not terminate so long as a mortgage loan remains outstanding and unpaid.
(D) Contractual Effect of Ordinance. Notwithstanding the provisions of section 15(a)(5) of the Act to the contrary, a contract between the City of Burton 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 described herein, is effectuated by enactment of this ordinance.