CITY OF EAST LANSING ORDINANCE NO. 1173

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Virgil Fowler
5 years ago
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1 CITY OF EAST LANSING ORDINANCE NO AN ORDINANCE TO AMEND ORDINANCE NO. 441, ADOPTED AUGUST 1, 1978, WHICH PROVIDES FOR A SERVICE CHARGE IN LIEU OF TAXES FOR A MULTIPLE FAMILY DWELLING PROJECT FOR ELDERLY AND HANDICAPPED PERSONS OF LOW AND MODERATE INCOME TO BE FINANCED OR ASSISTED PURSUANT TO THE PROVISIONS OF THE STATE HOUSING DEVELOPMENT AUTHORITY ACT OF 1966 (1966 PA 346, AS AMENDED, MCL ) THE CITY OF EAST LANSING ORDAINS: Ordinance No. 441, adopted by the East Lansing City Council on August 1, 1978, is hereby amended to read as follows: SECTION 1. This Ordinance shall be known and cited as the "City of East Lansing East Glen Tax Exemption Ordinance." SECTION 2. Preamble. It is acknowledged that it is a proper public purpose of the State of Michigan and its political subdivisions to provide housing for its elderly and handicapped citizens of low and 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 PA 346, as amended, MCL , et. seq.) for housing developments which are financed with a Federally-aided mortgage loan under Title II, Section 8, of the Housing and Community Development Act of 1974, as amended (Section 8). The City of East Lansing (the "City") is authorized by Act 346 to establish or change the service charge to be paid in lieu of taxes by 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 elderly and handicapped persons of low and moderate income is a public necessity, and as the City will be benefited 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 provisions of this Ordinance for tax exemption and the service charge in lieu of taxes during the extended period contemplated in this Ordinance are essential to the determination of economic feasibility of housing developments which are constructed and financed in reliance on such tax exemption. The City has, pursuant to the Act, granted a property tax exemption for the multiple family housing development located on Hagadorn Road in the city of

2 East Lansing, Tax Parcel No (the "Development") pursuant to Ordinance No. 441 adopted August 1, 1978, for a term of not more than 40 years to assist the construction and operation of the Development to serve elderly and handicapped persons of low and moderate income subject to income and rent restrictions pursuant to Section 8 of the National Housing Act of The City further acknowledges that MASSO Limited Dividend Housing Association, LLC (the "Sponsor"), a Michigan limited liability company, has offered, subject to receipt of a Federally-aided Mortgage Loan under Section 8 to acquire, rehabilitate, and operate the Development to continue to serve elderly and handicapped persons of low and moderate income, and that the Sponsor has offered to continue to pay the City on account of this housing development an annual service charge for public services in lieu of all taxes for the term of the new Mortgage. The Sponsor acknowledges that, as an inducement to the City's approval of the tax exemption and service charge in lieu of taxes, the sponsor has agreed upon closing of its Federally-aided Mortgage Loan to establish a Reserve for Replacement account ("Replacement Reserve") to be initially funded in an amount to be determined by HUD to be expended by the Sponsor exclusively for costs incident to rehabilitation and improvement of the real and personal property of the Development. SECTION 3. Definitions. A. Authority means the Michigan State Housing Development Authority. B. Act means the State Housing Development Authority Act, being Public Act 346 of 1966, of the State of Michigan, as amended. C. Elderly means those persons defined by section 11(O) of the Act. D. 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, industrial, communal, and educational facilities as the Authority determines improve the quality of the development as it relates to housing for persons of low income. E. HUD means the United States Department of Housing and Urban Development. F. Class of Housing Development means a class of housing projects occupied by persons of low or moderate income as defined by Section 11(g) of the Act. G. Mortgage Loan means a Federally-aided Mortgage Loan under Section 8 to be made to the Sponsor for the rehabilitation and/or permanent financing of the

3 Housing Development. H. Sponsor means person(s) or entities which have applied to the Authority for approval of a Mortgage Loan to finance a Housing Development. SECTION 4. Class of Housing Developments. It is determined that East Glen Apartments is of the Class of Housing Developments to which the tax exemption provided under the Act shall apply and for which a service charge shall be paid in lieu of such taxes. SECTION 5. Establishment of Annual Service Charge. The Development identified as East Glen Apartments and the property on which it is 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 acquiring, rehabilitating, and operating the Development in reliance upon the enactment and continuing effect of this Ordinance and the qualification of the Development for exemption from all property taxes and a payment in lieu of taxes as established in this Ordinance, and in consideration of the Sponsor's offer, subject to receipt of a Federally-aided Mortgage Loan, to acquire, rehabilitate, own and operate the Development, agrees to accept payment of an annual service charge for public services in lieu of all property taxes. The annual service charge shall be equal to 4% of the total rental or occupancy charges collected or to be collected by the Sponsor, including utility charges, as to each of the living units within the Development during the calendar year of closing on the Federally-aided Mortgage Loan and for the next four years. Thereafter, the rate of the annual service charge shall be 5% for the next five years and 6% for the remaining term. SECTION 6. Limitation on the Payment of Annual Service Charge. Notwithstanding Section 5, the service charge to be paid each year in lieu of taxes for the part of the Development which is tax exempt and which is occupied by other than elderly or handicapped persons or families of low and moderate income shall equal the full amount of the taxes which would be paid on that portion of the Development if the Development were not tax exempt. The term "low and moderate income" as used herein shall be the same as found in Section 15(a)(7) of the Act and the rules promulgated by the Authority thereunder. SECTION 7. Contractual Effect of Ordinance. Notwithstanding the provisions of Section 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

4 lieu of taxes, as previously described, is effectuated by enactment of this Ordinance. However, nothing contained in this Ordinance shall constitute a waiver of any rights the City of East Lansing may possess or exercise under the provisions of Section 15(a)(2) of the Act, provided the exercise of such rights does not, in the opinion of the Authority, impair the economic feasibility of the project or the Mortgage Loan. Notwithstanding the contractual effect of this Ordinance, this Ordinance may be repealed by further ordinance of the East Lansing City council in the event that payment of the service charge in lieu of taxes, including all accrued interest, shall remain delinquent for more than two (2) years. SECTION 8. Payment of Service Charge. The 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 that the annual payment shall be paid on or before August 15th of each year and shall be distributed to the several units levying the general property tax in the same proportion as for general property taxes. Failure to pay the service charge on or before August 15th of each year shall result in the service charge being subject to one (1 %) percent interest per month until paid. If any amount of the annual service charge or accrued interest shall remain unpaid as of December 31 of each year, the amount unpaid shall be a lien upon the real property constituting the East Glen Apartments Housing Development upon the City Treasurer filing a certificate of non-payment of the service charge, together with an affidavit of proof of service of the certificate of non-payment upon the Sponsor with the lngham County Register of Deeds, and proceedings may then be had to enforce the lien as provided by law for the foreclosure of tax liens upon real property. SECTION 9. Duration. This Ordinance shall remain in effect and shall not terminate so long as the Federally-aided Mortgage Loan remains outstanding and unpaid or the Authority has any interest in the property; but in no event shall this Ordinance remain in effect for the longer of (1) August 31, 2018; or (2) December 31, 2047, in the event the Sponsor acquires the Development, closed its Federally-aided Mortgage Loan, establishes the Replacement Reserves in an amount approved by HUD with an initial deposit as determined by HUD, and provides certification thereof to the City Clerk on or before July 1, 2008, and the Development remains subject to income and rent restrictions pursuant to Section 8 of the National Housing Act of SECTION 10. Severability. The various sections and provisions of this Ordinance shall be deemed to be severable, and should any section or provision of this Ordinance be declared by

5 any court of competent jurisdiction to be unconstitutional or invalid the same shall not affect the validity of the Ordinance as a whole or any section or provision of this Ordinance other than the section or provision so declared to be unconstitutional or invalid. SECTION 11. Effective Date. This Ordinance shall become effective on the date of its adoption and publication as provided in the East Lansing City Charter. All ordinances or parts of ordinances in conflict with this Ordinance are repealed to the extent of such conflict.

SUPERIOR CHARTER TOWNSHIP WASHTENAW COUNTY, MICHIGAN ORDINANCE NO. 159 AMENDED AND RESTATED TAX EXEMPTION ORDINANCE An Ordinance to provide for a

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