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(A) 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 to 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), Public Act 346 of 1966, being M.C.L.A. §§ 125.1401 et seq., as amended. The city is authorized by this 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 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 is a public necessity, and as the city will be benefitted and improved by such housing, the encouragement of the same by providing certain real estate tax exemption for such housing is a valid public purpose; further, that the continuance of the provision of this article, for tax exemption and the service charge in lieu of taxes during the period contemplated in this article, are essential to the determination of economic feasibility of housing developments which are constructed and financed in reliance on such tax exemption.
(B) The city acknowledges that Sugar Mill Limited Dividend Housing Association, Michigan Limited Partnership, ("the sponsor") has offered subject to receipt of a mortgage loan from the Michigan State Housing Development Authority, to erect, own and operate a housing development identified as Sugar Mill Apartments (the "housing development") on certain property located on the 100 Block of Maynard Street in the city to serve senior citizens of low to moderate 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 taxes.
(1993 Code, § 64-2) (Ord. passed 8-12-2002(2); Ord. 2017-01, passed 2-27-2017; Ord. 2020-09, passed 12-14-2020)
For the purpose of this article, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
ACT. The State Housing Development Authority Act, being Public Act 346 of 1966 of the State of Michigan, being M.C.L.A. §§ 125.1401 et seq., as amended.
ANNUAL SHELTER RENT. 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.
AUTHORITY. The Michigan State Housing Development Authority.
ELDERLY PERSONS. A family where the head of household is 62 years of age or older or a single person who is 62 years of age or older. Also includes persons of any age who are handicapped or disabled.
HOUSING DEVELOPMENT. A development which contains a significant element of housing for persons of low to moderate income and such elements of other housing, commercial, recreational, industrial, communal and educational facilities as the Authority determines improves the quality of the development as it relates to housing for persons of low to moderate income.
MORTGAGE LOAN. A loan to be made by the Authority to the sponsor for the construction and/or permanent financing of the housing development.
SPONSOR. Person(s) or entities which have applied to the Authority for a mortgage loan to finance a housing development.
UTILITIES. Fuel, water, sanitary sewer service and/or electrical service, which are paid by the housing development.
(1993 Code, § 64-3) (Ord. passed 8-12-2002(2); Ord. 2017-01, passed 2-27-2017; Ord. 2020-09, passed 12-14-2020)
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 senior housing which is financed or assisted pursuant to the Act. It is further determined that Sugar Mills Apartments is of this class.
(1993 Code, § 64-4) (Ord. passed 8-12-2002(2); Ord. 2017-01, passed 2-27-2017; Ord. 2020-09, passed 12-14-2020)
(A) The housing development identified as Sugar Mills 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 this article, the qualification of the housing development for exemption from all property taxes and a payment in lieu of taxes as established in this article in consideration of the sponsors offer, subject to receipt of a mortgage loan from the Authority, 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.
(B) The annual service charge shall be the greater of the following:
(1) Fourteen percent (14%) of the difference between the annual shelter rents actually collected and utilities; or
(2) A minimum payment determined as follows. In the first year of operation, the minimum payment shall be $35,900, prorated on a daily basis from the date the final occupancy permit is issued through the next August 31. Each year thereafter, this payment shall be adjusted annually by the lesser of: 5%; or the increase or decrease in the general price level for the preceding year, as defined in the Michigan Constitution, § 33. The general price level is also the same percentage used to calculate the taxable property value by the City Tax Assessor.
(1993 Code, § 64-5) (Ord. passed 8-12-2002(2); Ord. 2017-01, passed 2-27-2017; Ord. 2017-09, passed 9-25-2017; Ord. 2020-09, passed 12-14-2020)
(A) Notwithstanding § 64-5, the service charge to be paid each year in lieu of taxes for the part of the housing development which is tax exempt and which is occupied by other than low to moderate income persons or families shall be equal to the full amount of the taxes which would be paid on that portion of the housing development if the housing development were not tax exempt.
(B) The term LOW TO MODERATE PERSONS as used herein means, with respect to any housing development that is tax-exempt, senior persons are eligible to move into that development.
(1993 Code, § 64-6) (Ord. passed 8-12-2002(2); Ord. 2017-01, passed 2-27-2017; Ord. 2020-09, passed 12-14-2020)
Notwithstanding the provisions of § 15(a)(5) of the Act, to the contrary, a contract between the city 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 article.
(1993 Code, § 64-7) (Ord. passed 8-12-2002(2); Ord. 2017-01, passed 2-27-2017; Ord. 2020-09, passed 12-14-2020)
The service charge in lieu of taxes as determined under this article shall be payable in the same manner as general property taxes are payable to the city except that the annual payment will be paid on or before August 31 each year.
(1993 Code, § 64-8) (Ord. passed 8-12-2002(2); Ord. 2017-01, passed 2-27-2017; Ord. 2020-09, passed 12-14-2020)
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