ARTICLE II. PROPERTY TAX1

DIVISION 1. GENERALLY

110-26 Tax day designated.

December 31 shall be the tax day in the city. The taxable status of persons and real and personal property shall be determined as of December 31, which day is specified in Act No. 285 of the Public Acts of Michigan of 1949 (MCL 211.2 et seq.), for all cities, villages and townships in the state.

(Code 1985, § 11-1)

110-27 City property taxes; late payment charges.

A sum equal to one percent of the amount of the tax shall be added to all unpaid city property taxes on August 1 of each year and on the first day of each succeeding month during which taxes remain unpaid, until return thereof is made to the county treasurer.

(Code 1985, § 11-1.1)

110-28 Preparation of assessment roll.

The city assessor shall, on or before the first Monday in March, make and complete the assessment roll.

(Code 1985, § 11-2)

110-29 Review of assessment roll by board of review.

The board of review shall meet, for the purpose of reviewing, equalizing and correcting the assessment roll prepared by the city assessor, at the city hall at 450 Wide Track Drive East, at 9:00 a.m. on the first Tuesday after the first Monday in March, and shall continue in session at least two days successively and as much longer as may be necessary to complete the review, and at least six hours in each day during the review. The review of assessments shall be completed on or before the first Monday in April.

(Code 1985, § 11-3)

110-30 Authority of board of review to modify assessment roll.

The board of review shall have like powers and duties as provided for in section 29 of Act No. 206 of the Public Acts of Michigan of 1893 (MCL 211.1 et seq.), as amended. The board of review shall examine the assessment roll and shall have the authority to and shall correct any errors and deficiencies found therein.

(Code 1985, § 11-4)

110-31 Board of review; composition, powers and duties.

(a)    The board of review shall consist of the director of finance, the city attorney, or their designees, and three electors of the city who shall be appointed annually by the council before the first meeting of the board of review. The city assessor shall be clerk for the board of review.

(b)    The board of review shall perform such duties and have such powers as are provided by the Charter of the city and the general laws of the state.

(Code 1985, § 11-5)

Charter reference—Board of review, § 5.402.

110-32110-40 Reserved.

DIVISION 2. TAX EXEMPTION, PAYMENT OF A SERVICE CHARGE IN LIEU OF TAXES.

110-41 Application of state law.

The tax exemption established by subsection (1) of section 15a of Act No. 346 of the Public Acts of Michigan of 1966 (MCL 125.1401 et seq.), as amended, for housing projects financed with federally aided mortgages or for housing projects financed with mortgages aided by the state housing development authority, or an advance or grant from the state housing development authority, shall not apply to all the housing projects within the boundaries of the city, except that such tax exemption shall be granted to housing projects meeting the requirements set forth in this division, and certified by the state housing development authority as eligible for exemption in accordance with subsection (1) of section 15a of Act No. 346 of the Public Acts of Michigan of 1966 (MCL 125.1401 et seq.), as amended.

(Code 1985, § 11-8)

110-42 Mortgage loans to finance housing development for elderly persons of low or moderate income (Phoenix Place Apartments).

(a)    Preamble.

(1)    It is acknowledged that it is a proper public purpose of the state and its political subdivisions to provide housing for its 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 [Act No. 346 of the Public Acts of Michigan of 1966 (MCL 125.1401 et seq.; MSA 16.114(1) et seq., as amended)]. The City is authorized by this Act to establish or change by ordinance 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 but not to exceed the taxes that would be paid but for this Act. It is further acknowledged that such housing for elderly persons of low or 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 exemptions for such housing is a valid public purpose; further, that the continuance of the provisions of this Section for tax exemption and the service charge in lieu of taxes during the period hereinafter contemplated in this Section are essential to the determination of economic feasibility of housing developments which are constructed and financed in reliance on such tax exemption.

(2)    The City acknowledges that the Phoenix Place 2006 Limited Dividend Housing Association Limited Partnership (the “Sponsor”) has offered, subject to and expressly contingent upon receipt of an Authority-aided mortgage or Federally aided mortgage, to improve and continue to own and operate a housing development identified as the Phoenix Place Apartments on certain property commonly known as 47251 Woodward Avenue, City of Pontiac, State of Michigan 48342 to serve elderly persons of low or moderate income, and 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 with the subject premises being more particularly described as follows:

Land situated in the County of Oakland, City of Pontiac, State of Michigan

Part of Lots 7, 32, through 39, 41, 63 and 64 and all of 40, inclusive and part of vacated Perry Street, ASSESSOR’S PLAT NO. 131, according to the plat thereof as recorded in Liber 54-A of Plats, page 65, Oakland County Records, all described as follows: Beginning at a point, said point being distant from the Northeast corner of Lot 26, said ASSESSOR’S PLAT NO. 131, as recorded in Liber 54-A of Plats, page 65, South 01 degree 54 minutes 34 seconds East 20.51 feet to a point on the Southerly line of Water Street and the Westerly line of Wide Track Drive and commencing along said Westerly line of said Wide Track Drive, South 01 degree 54 minutes 34 seconds East 54.68 feet and South 04 degrees 25 minutes 31 seconds West 195.98 feet and South 00 degrees 08 minutes 53 seconds East 27.22 feet from said Northeast corner of Lot 26; thence from said Point of Beginning continuing along said Westerly line of Wide Track Drive, South 00 degrees 08 minutes 53 seconds East 171.54 feet; thence South 04 degrees 25 minutes 31 seconds West 200.00 feet to the Northerly line of Auburn Road; thence along said Northerly line, South 87 degrees 53 minutes 06 seconds West 53.85 feet; thence 125.57 feet along an arc of a curve to the right, said curve having a radius of 365.37 feet, a central angle of 19 degrees 41 minutes 27 seconds, a chord length of 124.95 feet and a chord bearing of North 82 degrees 16 minutes 10 seconds West; thence North 14 degrees 32 minutes 05 seconds West 236.38 feet; thence North 75 degrees 27 minutes 55 seconds East 64.00 feet; thence North 14 degrees 32 minutes 05 seconds West 60.00 feet; thence North 75 degrees 27 minutes 55 seconds East 211.83 feet to the Point of Beginning.

Together with a non-exclusive easement as created, limited and defined in that certain instrument recorded in Liber 8412, page 337, including a non-exclusive easement for Elderly Access, Future Development Access, Emergency Access and Landscaping over the following described Easement Parcel:

A description of a parcel of land being located in part of Lots I through 7, 26 through 32 and 41, inclusive, ASSESSOR’S PLAT NO. 131, according to the plat thereof as recorded in Liber 54-A of Plats, page 65, Oakland County Records all being apart of the Southwest 1/4 of Section 28 and the Southeast 1/4 of Section 29, Town 3 North, Range 10 East, City of Pontiac, Oakland County, Michigan, described as follows:

Beginning at a point, said point being distant from the Northeast corner of Lot 26, ASSESSOR’S PLAT NO. 131, as recorded in Liber 54-A of Plats, page 65, South 01 degree 54 minutes 34 seconds East 20.51 feet to the Point of Beginning, said point also being the Southerly line of Water Street and the Westerly line of Wide Track Drive; thence continuing along said Westerly line of said Wide Track Drive, South 01 degree 54 minutes 34 seconds East 54.68 feet; thence South 04 degrees 25 minutes 31 seconds West 195.98 feet; thence South 00 degrees 08 minutes 53 seconds East 27.22 feet; thence South 75 degrees 27 minutes 55 seconds West 211.83 feet; thence North 34 degrees 21 minutes 32 seconds East 131.30 feet; thence North 13 degrees 24 minutes 53 seconds East 95.34 feet; thence North 06 degrees 00 minutes 00 seconds West 95.00 feet to a point on the said Southerly line of said Water Street; thence along said Southerly line, North 75 degrees 13 minutes 16 seconds East 136.50 feet to the Point of Beginning.

(3)    It is recognized that the supply of low and moderate cost housing available for occupancy by certain elderly persons is being eroded through greatly increasing rental rates, and the conversion of low and moderate cost rental units into condominium units which are then sold at prices and under financing terms which are not affordable to elderly persons.

(b)    Definitions. For purposes of this section, the following definitions shall apply unless the content 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, MCL 125.1401 et seq.; MSA 16.114(1) et seq.

ANNUAL SHELTER RENT. The total collections during an agreed annual period from all occupants of the housing development representing rent or occupancy charges exclusive of charges for natural gas, electricity, heat, sewer and water services or other utilities furnished to the occupants.

AUTHORITY. The Michigan State Housing Development Authority.

AUTHORITY-AIDED MORTGAGE means a mortgage made, held, purchased or assisted by the Authority.

CALENDAR YEAR means the consecutive 12-month period which ends on December 31 of the year immediately preceding the year in which the service charge is to be paid.

CONTRACT RENTS. As defined by the U.S. Department of Housing and Urban Development in regulations promulgated pursuant to the U.S. Housing Act of 1937, as amended by the Housing and Community Development Act of 1974.

ELDERLY means a single person who is 55 years of age or older or a household in which at least 1 member is 55 years of age or older and all other members are 50 years of age or older.

FEDERALLY AIDED MORTGAGE means any of the following:

(i)    A below market interest rate mortgage insured, purchased, or held by the Secretary of the Department of Housing and Urban Development.

(ii)    A market interest rate mortgage insured by the Secretary of the Department of Housing and Urban Development and augmented by a program of rent supplements.

(iii)    A mortgage receiving interest reduction payments provided by the Secretary of the Department of Housing and Urban Development.

(iv)    A mortgage on a housing project to which the Authority allocates low income housing tax credits under Section 22b.

(v)    A mortgage receiving special benefits under other federal law designated specifically to develop low and moderate income housing, consistent with the Act.

HOME LOAN means that certain rehabilitation loan to the Sponsor, from the Authority, the proceeds of which are intended to finance the cost of the improvements.

HOUSING DEVELOPMENT. A development that contains a significant element of housing for elderly persons of low or moderate 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 elderly persons of low or moderate income.

HUD. The United States Department of Housing and Urban Development.

IMPROVEMENTS means the items of construction, services, and furniture, fixtures and equipment for the housing development to be financed with the proceeds of the Authority-aided Mortgage or Federally aided Mortgage.

LIMITED DIVIDEND HOUSING CORPORATION. A corporation incorporated or qualified pursuant to the corporation laws of the State of Michigan and Chapter 6 and a limited dividend housing association organized and qualified pursuant to Chapter 7 of the Act.

LOW OR MODERATE INCOME PERSONS. Families and persons who cannot afford to pay the amounts at which private enterprise, without federally aided mortgages or loans from the Authority, is providing a substantial supply of decent, safe, and sanitary housing and who fall within income limitations set in the Act or by the Authority in its rules. Among low income or moderate income persons, preference shall be given to the elderly and those displaced by urban renewal, slum clearance, or other governmental action.

MORTGAGE LOAN. The loan made by the Authority to the Sponsor for the construction of or improvement to the premises and permanent financing of the housing development, or a mortgage loan insured by HUD or any other type of federally aided or authority-aided mortgage or advance or grant that qualifies for a payment in lieu of taxes pursuant to the Act.

REHABILITATION. All or part of those repairs and improvements necessary to make residential real property safe, sanitary, or adequate.

SPONSOR. Phoenix Place 2006 Limited Dividend Housing Association Limited Partnership which has applied to the Authority and/or HUD for a mortgage to finance improvements to and continued ownership and operation of a housing development at the real property described in Section (a)(2) above.

UTILITIES. Charges for fuel, natural gas, water, sanitary sewer service, and/or electrical service, which are paid by the housing development (and not any of those costs paid by the residents/tenants) during the calendar year or other agreed annual period.

(RESERVED FOR DEFINITION OF CLASS). Family, handicapped, etc., to which this section shall apply.

(c)    Service charge. The City acknowledges that the Sponsor, subject to receipt of the proceeds of a federally aided mortgage or authority-aided mortgage, has offered to cause the construction of the improvements and rehabilitation of the residential real property and continue to own and operate the housing development identified as the Phoenix Place Apartments on certain property described in Paragraph (a)(2) above, located in the City to serve elderly and disabled persons of low or moderate income, and that the Sponsor has offered to pay the City on account of the housing development an annual service charge for public services in lieu of taxes. The City acknowledges that the Phoenix Place Apartments fit within the class as described in Section (e) below. The annual service charge for the housing development shall be assessed as follows during the following years as specified below, it being understood that the first payment under this amended subsection shall be due on July 1, 2011, based on the operations of the housing development for the year ending December 31, 2010:

Calendar Year to Which Payment of the Service Charge Applies (i.e., payment due on July 1 of following year)

Percentage of Annual Shelter Rents

2010 through 2060 or through as long as the Federally aided or Authority-aided Mortgage or advance or grant from the Authority remains outstanding and unpaid, but not beyond 2060.

4%

Notwithstanding the foregoing, however, the service charge shall not exceed taxes which would be paid absent this tax exemption; provided, however, that the subject development will not be entitled to solid waste collection and disposal services and all costs of solid waste collection and disposal shall be the responsibility of the Sponsor.

(d)    Payment of service charge. The service charge in lieu of taxes as determined under this Section shall be payable in the same manner as general property taxes are payable to the City, except that the annual payment shall be made on July 1 of each year. All and any payments in lieu of taxes or portions thereof remaining unpaid after August 1 of the year in which they are due shall have interest of one (1) percent per month, together with a penalty fee of four (4) percent added to them; provided, that the total penalty fee shall not exceed four (4) percent of the total payment in lieu of taxes due and payable on July 1 of each year. The payment in lieu of taxes shall be accompanied by a certified annual audit of the gross rentals and utility costs of the project along with documentation regarding how the Sponsor has calculated the amount of the PILOT payment it is submitting to the City. The Sponsor shall also provide the City with any other audited financial statements or other documentation as required by the City (i.e., utility statements, etc.), which shall be provided for in the contract between the parties.

(e)    Class of housing development. 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 housing developments of multiple dwellings for elderly or disabled persons of low or moderate income:

(i)    Which are financed or assisted pursuant to Act No. 346 of the Public Acts of Michigan of 1966 (MCL 125.1401 et seq.; MSA 16.114(1) et seq.), as amended or by HUD; or

(ii)    Which are located in economically depressed urban renewal project areas; or

(iii)    Which are not economically feasible absent the City’s allowing a service charge in lieu of taxes; or

(iv)    Which the Authority or HUD will not finance absent the City providing this tax benefit; or

(v)    Whose sponsor negotiates a service charge with the City when the housing development is in the planning stage, prior to the start of construction.

(f)    Negotiation and establishment of annual service charge. The housing development described in Section (a)(2) above shall be exempt from all property taxes from and after commencement of construction of the buildings/structures and/or improvements/rehabilitation thereto and subject to the other terms and conditions of this section. The City, acknowledging that the Sponsor and the Authority or HUD have established the economic feasibility of the housing development in reliance upon the enactment and continuing effect of this section and the qualification of the housing development for exemption from all property taxes and payment of a service charge in lieu of taxes as established herein, and in consideration of the Sponsor’s offer, subject to receipt of a authority-aided mortgage or federally aided mortgage to construct improvements or complete Rehabilitation at and continue to own and operate the housing development, hereby agrees to accept payment of an annual service charge for public services in lieu of all property taxes. The annual service charge for the housing development has been negotiated between the City and the Sponsor and has been set at a rate which will make the housing development economically feasible, and the rate is embodied in this section.

(g)    Contractual effect. The tax exemption provided for in this section shall only be effective upon the signing of a contract between the City and the Sponsor who has obtained a mortgage loan or modified mortgage loan as a condition of qualifying the project to receive tax exemption and to make payments in lieu of taxes, subject to the terms of the contract, this section and state and federal law. The contract and any amendment thereof must be approved by the City Council. A housing project which so qualifies shall make a payment in lieu of property taxes as provided in the contract and otherwise be exempted from all property taxes as provided in the contract if all of the requirements of this Section and federal and state law are met; provided, however, that the payment in lieu of taxes shall not be less than that provided for in Section (c), nor more than the taxes that would be paid but for this section. Further documentary evidence must be presented to the City Assessor prior to December 31 of each year to establish that the project so qualifies, whether by making available to tenants a program of rent supplements or housing assistance payments, as established and allocated under the rules and regulations of either HUD or the Authority or both, or the project is being operated in accordance with the requirements of the Housing Development Grant Program, or otherwise qualifies by law; provided, however, that the City shall have the right to repeal this section and the tax exemption provided for in this section and to revoke the contract between the parties if the subject housing development is not operated as a project for elderly or disabled persons of low and moderate income, or if such project is not maintained in compliance with the codes and ordinances of the City including but not limited to Chapter 22 captioned Buildings and Building Regulations; Chapter 26 entitled Businesses; Chapter 58 captioned Environment; Chapter 62 entitled Fire Prevention and Protection; Chapter 102 captioned Streets, Sidewalks and Other Public Places; and Chapter 122 entitled Vegetation. In the event that the project is not maintained in compliance with the codes and ordinances of the City, the City, through its Building and Safety Division or successor or other representative with enforcement authority, shall provide written notice to the Sponsor of the nature of the violation(s) and the Sponsor shall have thirty (30) days in which to take the measures necessary to cure such violation(s) unless the nature of the violation(s) would significantly adversely affect the health, safety or welfare of the residents, in which case the Sponsor shall take whatever steps are necessary to immediately correct the violation(s). 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 lieu of taxes, as previously described, is effectuated by enactment of the ordinance codified in this section.

(h)    Duration. This section shall remain in effect and shall not terminate until (a) Calendar Year 2060, (b) the mortgage loan for the housing development is paid, or (c) the Authority or other governmental entity no longer has any interest in the housing development, whichever should soonest occur; provided, that in order for this section to so remain in effect Sponsor shall obtain approval of an Authority-aided or Federally aided mortgage within six (6) months from the effective date of the ordinance codified in this section as last amended (i.e., August 19, 2010), and construction of the improvements and/or the rehabilitation shall commence within thirty (30) days following the closing of the authority-aided or federally aided mortgage. The annual payment in lieu of taxes may be adjusted by amendment of the contract entered into between the City and the Sponsor; provided, however, if a housing project fails to pay its annual payment in lieu of taxes as specified in Paragraph (d) above, the City Council, by resolution, may revoke the tax-exempt status of the housing project. The City Council shall provide notice to the Sponsor or owners or operators of the housing project, in writing by certified mail, at least ten (10) days prior to the date that it shall consider the revocation of the tax-exempt status of the project. If the tax-exempt status of the housing project is revoked, the housing project shall then be placed on the tax rolls on the next December 31 following the revocation of the tax-exempt status of the project. If a housing project is added to the tax rolls for failing to make its payment in lieu of taxes and the payment remains unpaid at the time the housing project is added to the tax rolls, the city officials in charge of the collection thereof may certify to the tax assessing officer of the City the fact of such delinquency, whereupon such charge, together with any accumulated interest and penalty fees, shall be entered upon the tax rolls as a charge against such premises and shall be collected in the same manner as general City taxes against such premises.

(Ord. No. 2205, § 1, 7-31-2008; Ord. No. 2214, §§ 1—5, 2-18-10)

110-43 Reserved.

Editor’s note—Ord. No. 2328, § 1, adopted August 19, 2015, repealed § 110-43, which pertained to mortgage loans to finance housing development for low or moderate income persons (Woodcrest Commons) and derived from § 11-8.2 of the 1985 Code.

110-44 Same—Low or moderate income multiple-family dwelling project for elderly and elderly handicapped persons (Lakehaven Manor).

(a)    Preamble.

(1)    It is acknowledged that a proper public purpose of the state and its political subdivisions is to provide housing for elderly and/or 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, being Act No. 346 of the Public Acts of Michigan of 1966 (MCL 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 for elderly and elderly handicapped low or moderate income persons 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 section for tax exemption and the service charge in lieu of taxes during the period contemplated in this section is essential to the determination of economic feasibility of housing developments which are constructed and financed in reliance on such tax exemption.

(2)    The city acknowledges that Housing and Finance Associates, Inc. (the “sponsor”) has offered, subject to receipt of a mortgage loan from the state housing development authority, to construct multiple-family dwellings identified as Lakehaven Manor on certain property located on the west side of Baldwin at the northern edge of the city, as a residence to serve elderly and elderly handicapped low and moderate income persons, and 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. As used in this section:

Act means the state housing development authority act, being Act No. 346 of the Public Acts of Michigan of 1966 (MCL 125.1401 et seq.), as amended.

Annual shelter rents means the total collections during an agreed annual period from all occupants of a housing development representing rents or occupancy charges, exclusive of charges for gas, electricity, heat or other utilities furnished to the occupants.

Authority means the state housing development authority.

Elderly persons means a family where the head of household is 55 years of age or older or a single person who is 55 years of age or older.

Handicapped citizen means persons who meet the eligibility criteria set by the authority and/or federal government.

Housing development means a development which contains a significant element of housing for elderly and elderly handicapped persons of low and moderate 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 and moderate income.

Low or moderate income means persons and families eligible to occupy the housing development under the act.

Mortgage loan means a loan to be made by the authority to the sponsor for the construction and/or permanent financing of the housing.

Sponsor and owner means Housing and Finance Associates, Inc.

Utilities means fuel, water, sanitary sewer service and/or electrical service which are paid by the housing development.

(c)    Class of housing developments. It is determined that the class of housing developments to which the tax exemption provided in this section shall apply and for which a service charge shall be paid in lieu of such taxes shall be a three-story frame building with approximately 160 dwelling units, together with parking spaces for 128 vehicles, of which 48 spaces shall be carports. The class of development shall be located on a site of about 7.91 acres, and the building shall be four stories at the rear in order to fit the topography of the site. The development shall include within the same structure: dining rooms for the service of food to all residents, smoking lounge, main lounge with fireplace, little theater (giant screen TV and VCR), arts and crafts center, games arcade, dance floor with mini-stage, convenience store, hobby room, billiards room, automatic bank teller, laundry rooms, outside dining terrace, facilities for boccie ball and croquet, and walking paths. The class of development shall be located on the west side of Baldwin Avenue on the northerly edge of the city.

(d)    Declaration of tax exemption; establishment of annual service charge. Pursuant to Act No. 346 of the Public Acts of Michigan of 1966 (MCL 125.1401 et seq.), as amended, the housing development identified as Lakehaven Manor and the property on which it shall be constructed shall be exempt from all property taxes from and after the commencement of construction, which exception shall continue in effect so long as the project complies with the requirements of subsection (g) of this section, and also only as long as the project, once completed, is operated as a housing project for the benefit of low and moderate income, elderly and elderly handicapped persons, and as long as the benefit of the tax exemption granted by this section is allocated to the residents of the development in the form of lower rents.

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 section and the qualification of the housing development for exemption from all property taxes and a payment in lieu of taxes as established in this section, and in consideration of the sponsor’s 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, with the exception of garbage removal and disposal, in lieu of all property taxes. All expenses for garbage removal and disposal shall be the responsibility of the sponsor. The annual service charge shall be equal to four percent of the annual shelter rent for authority-aided housing developments actually collected.

(e)    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 lieu of taxes, as previously described, is effectuated by enactment of Ordinance No. 1944. The city will not be obligated to continue the tax exemption provided for in this section if the project contemplated in this section is not completed and operated as such, and the exemption may be terminated if construction is abandoned prior to completion of the project.

(f)    Payment of service charge. The service charge in lieu of taxes as determined under this section 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 July 1 of each year.

(g)    Duration. This section shall remain in effect and shall not terminate so long as the mortgage loan remains outstanding and unpaid or the authority has any interest in the property; provided, that construction of the housing development commences within one year from the effective date of Ordinance No. 1944.

(Code 1985, § 11-8.2.1)

110-45 Same—Low and moderate income multiple-family dwelling project (Crystal Lake Apartments).

(a)    Preamble.

(1)    It is acknowledged that a proper public purpose of the state and its political subdivisions is to provide housing for its 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, being Act No. 346 of the Public Acts of Michigan of 1966 (MCL 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 or 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 low or moderate income persons 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 section for tax exemption and the service charge in lieu of taxes during the period contemplated in this section are essential to the determination of economic feasibility of housing developments which are constructed and financed in reliance on such tax exemption.

(2)    The city acknowledges that Crystal Limited Dividend Housing Association Limited Partnership (the “sponsor”) has offered, subject to receipt of a mortgage loan from the state housing development authority, to construct multiple-family dwellings identified as Crystal Lake Apartments on certain property located on the north side of Golf Drive at the southern edge of the city, to serve low and moderate income persons, and 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. As used in this section:

Act means the state housing development authority act, being Act No. 346 of the Public Acts of Michigan of 1966 (MCL 125.1401 et seq.), as amended.

Annual shelter rents means the total collections during an agreed annual period from all occupants of a housing development representing rents or occupancy charges, exclusive of charges for gas, electricity, heat or other utilities furnished to the occupants.

Authority means the state housing development authority.

Family means a household where the head of the household is a single or married person who is an adult and the family is of low or moderate income.

Housing development means a development which contains a significant element of housing for low and moderate 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 and moderate income.

Low or moderate income means persons and families eligible to occupy the housing development under the act.

Mortgage loan means a loan to be made by the authority to the sponsor for the construction and/or permanent financing of the housing.

Sponsor and owner means Crystal Limited Dividend Housing Association Limited Partnership.

Utilities means fuel, water, sanitary sewer service and/or electrical service which are paid by the housing development.

(c)    Class of housing developments. It is determined that the class of housing developments to which the tax exemption provided in this section shall apply and for which a service charge shall be paid in lieu of such taxes shall be made up of six two-story frame buildings with approximately 145 dwelling units, together with parking spaces for 288 vehicles. The class of development shall be located on a site of approximately 15 acres and the buildings shall be three stories at the rear in order to fit the topography of the site. The development and buildings shall also include appropriate storage and laundry facilities. The class of housing development shall be located on the north side of Golf Drive immediately west of the Pontiac Golf Course. The property is located east of Telegraph Road, west of Bagley and south of Crystal Lake in the city.

(d)    Declaration of tax exemption; establishment of annual service charge. Pursuant to Act No. 346 of the Public Acts of Michigan of 1966 (MCL 125.1401 et seq.), as amended, the housing development identified as Crystal Lake Apartments and the property on which it shall be constructed shall be exempt from all property taxes from and after the commencement of construction, which exception shall continue in effect so long as the project complies with the requirements of subsection (g) of this section, and also only so long as the project, once completed, is operated as a housing project for the benefit of low and moderate income persons and as long as the benefit of the tax exemption granted by this section is allocated to the residents of the development in the form of lower rents.

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 section and the qualification of the housing development for exemption from all property taxes and a payment in lieu of taxes as established in this section, and in consideration of the sponsor’s offer, subject to receipt of a mortgage loan from the authority, to construct, own land and operate the housing development, agrees to accept payment of an annual service charge for public services, with the exception of garbage removal and disposal, in lieu of all property taxes. All expenses for garbage removal and disposal shall be the responsibility of the sponsor. The annual service charge shall be equal to four percent of the difference between the amount of annual shelter rents actually collected and the cost of utilities.

(e)    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 lieu of taxes, as previously described, is effectuated by enactment of Ordinance No. 1953. The city will not be obligated to continue the tax exemption provided for in this section if the project contemplated in this section is not completed and operated as such, and the exemption may be terminated if construction is abandoned prior to completion of the project.

(f)    Payment of service charge. The service charge in lieu of taxes as determined under this section 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 July 1 of each year.

(g)    Duration. This section shall remain in effect and shall not terminate so long as the mortgage loan remains outstanding and unpaid or the authority has any interest in the property; provided, that construction of the housing development commences within one year from the effective date of Ordinance No. 1953 and the project is completed and operated as a housing project for low and moderate income persons.

(Code 1985, § 11-8.2.2)

110-46 Same—Rehabilitation of existing project for low to moderate income persons (Auburn Hills Townhouses).

(a)    Preamble.

(1)    It is acknowledged that a proper public purpose of the state and its political subdivisions is to provide housing for its 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 (Act No. 346 of the Public Acts of Michigan of 1966 (MCL 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 or 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 low or moderate income persons 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 exemptions for such housing is a valid public purpose; further, 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 determination of economic feasibility of housing developments which are constructed and financed in reliance on such tax exemption.

(2)    The city acknowledges that The P.M. Group, A Limited Dividend Partnership (the “sponsor”) has offered, subject to receipt of a U.S. Department of Housing and Urban Development subsidized mortgage loan pursuant to section 223(f) of the national housing act, to rehabilitate multiple-family dwellings identified as Auburn Hills Townhouses on property located on the south side of Auburn Road at the eastern edge of the city, to serve low and moderate income persons, and 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. As used in this section:

Act means the state housing development authority act, being Act No. 346 of the Public Acts of Michigan of 1966 (MCL 125.1401 et seq.), as amended.

Annual shelter rents means the total collections during an agreed annual period from all occupants of a housing development representing rents or occupancy charges, exclusive of charges for gas, electricity, heat or other utilities furnished to the occupants.

Family means a household where the head of the household is a single or married person who is an adult and the family is of low or moderate income.

Housing development means a development which contains a significant element of housing for low and moderate income, and such elements of other housing, commercial, recreational, industrial, communal and educational facilities that is determined by HUD to improve the quality of the development as it relates to housing for persons of low and moderate income.

HUD means the U.S. Department of Housing and Urban Development.

Low or moderate income means persons and families eligible to occupy the housing development under the act.

Mortgage loan means a loan to be made by HUD to the sponsor for the rehabilitation and/or permanent financing of the housing.

Sponsor and owner means The P.M. Group, A Limited Dividend Housing Partnership.

Utilities means fuel, water, sanitary sewer service and/or electrical service which are paid by the housing development.

(c)    Class of housing developments. It is determined that the class of housing development to which the tax exemption provided in this section shall apply and for which a service charge shall be paid in lieu of such taxes shall be made up of 28 two-story buildings (22 of the buildings have full basements and six buildings are two-story buildings with one-bedroom garden-style apartments) with approximately 250 dwelling units, together with parking spaces for 425 vehicles. The class of development is located on a site of approximately 16.324 acres. The development also includes the revitalization and restoration of the community building. The class of housing development is located on the south side of Auburn Road on the eastern edge of the city.

(d)    Declaration of tax exemption; establishment of annual service charge. Pursuant to Act No. 346 of the Public Acts of Michigan of 1966 (MCL 125.1401 et seq.), as amended, the housing development identified as Auburn Hills Townhouses and the property on which it shall be constructed shall be exempt from all property taxes from and after the commencement of rehabilitation, which exception shall continue in effect so long as the project complies with the requirements of subsection (g) of this section, and also only as long as the project, once completed, is operated as a housing project for the benefit of low and moderate income persons and as long as the benefit of the tax exemption granted by this section is allocated to the residents of the development in the form of lower rents.

The city, acknowledging that the sponsor has established the economic feasibility of the housing development in reliance upon the enactment and continuing effect of this section and the qualification of the housing development for exemption from all property taxes and a payment in lieu of taxes as established in this section, and in consideration of the sponsor’s offer, subject to receipt of a loan from the U.S. Department of Housing and Urban Development, to purchase, rehabilitate and operate the housing development, agrees to accept payment of an annual service charge for public services, with the exception of garbage removal and disposal, in lieu of all property taxes. All expenses for garbage removal and disposal shall be the responsibility of the sponsor. The annual service charge shall be equal to four percent of the difference between the annual shelter rents actually collected and utilities.

(e)    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 U.S. Department of Housing and Urban Development 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 Ordinance No. 1959. The city will not be obligated to continue the tax exemption provided for in this section if the project contemplated in this section is not completed and operated as such, and the exemption may be terminated if rehabilitation is abandoned prior to completion of the project.

(f)    Payment of service charge. The service charge in lieu of taxes as determined under this section 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 July 1 of each year.

(g)    Duration. The tax exemption provided for in this section shall remain in effect for the duration of the mortgages, but in no event shall the amount paid in lieu of taxes be less than $105,300.00 on the tenth year and thereafter; provided, that construction of the housing development commences within one year from the effective date of Ordinance No. 1959 and the project is completed and operated as a housing project for low and moderate income persons.

(Code 1985, § 11-8.2.3)

110-47 Same—Rehabilitation of multiple-family dwellings for low to moderate income persons (North Hill Farms Apartments).

(a)    Preamble.

(1)    It is acknowledged that a proper public purpose of the state and its political subdivisions is to provide housing for its 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, being Act No. 346 of the Public Acts of Michigan of 1966 (MCL 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 for low or moderate income persons 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 exemptions for such housing is a valid public purpose; further, 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 determination of economic feasibility of housing developments which are constructed and financed in reliance on such tax exemption.

(2)    The city acknowledges that The P.M. Group, A Limited Dividend Partnership (the “sponsor”) has offered, subject to receipt of a U.S. Department of Housing and Urban Development subsidized mortgage loan pursuant to section 223(f) of the national housing act, to rehabilitate multiple-family dwellings identified as North Hill Farms Apartments on property located on Cherry Hill Lane on the north side of Kennett Street in the city, to serve low and moderate income persons, and 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. As used in this section:

Act means the state housing development authority act, being Act No. 346 of the Public Acts of Michigan of 1966 (MCL 125.1401 et seq.), as amended.

Annual shelter rents means the total collections during an agreed annual period from all occupants of a housing development representing rents or occupancy charges, exclusive of charges for gas, electricity, heat or other utilities furnished to the occupants.

Family means a household where the head of the household is a single or married person who is an adult and the family is of low or moderate income.

Housing development means a development which contains a significant element of housing for low and moderate income, and such elements of other housing, commercial, recreational, industrial, communal and educational facilities that is determined by HUD to improve the quality of the development as it relates to housing for persons of low and moderate income.

HUD means the U.S. Department of Housing and Urban Development.

Low or moderate income means persons and families eligible to occupy the housing development under the act.

Mortgage loan means a loan to be made by HUD to the sponsor for the rehabilitation and/or permanent financing of the housing.

Sponsor and owner means The P.M. Group, A Limited Dividend Housing Partnership.

Utilities means fuel, water, sanitary sewer service and/or electrical service which are paid by the housing development.

(c)    Class of housing developments. It is determined that the class of housing development to which the tax exemption provided in this section shall apply and for which a service charge shall be paid in lieu of such taxes shall be made up of 74 buildings (156 efficiency units, 264 one-bedroom units and 105 two-bedroom units) with approximately 525 dwelling units, together with parking spaces for 1075 vehicles. The class of development is located on a site of approximately 37.37 acres. The development also includes the revitalization and restoration of the community building. The class of housing development is located on Cherry Hill Lane on the north side of Kennett Street in the city.

(d)    Declaration of tax exemption; establishment of annual service charge. Pursuant to Act No. 346 of the Public Acts of Michigan of 1966 (MCL 125.1401 et seq.), as amended, the housing development identified as North Hill Farms Townhouses and the property on which it shall be constructed shall be exempt from all property taxes from and after the commencement of rehabilitation, which exception shall continue in effect so long as the project complies with the requirements of subsection (g) of this section, and also only as long as the project, once completed, is operated as a housing project for the benefit of low and moderate income persons and as long as the benefit of the tax exemption granted by this section is allocated to the residents of the development in the form of lower rents.

The city, acknowledging that the sponsor has established the economic feasibility of the housing development in reliance upon the enactment and continuing effect of this section and the qualification of the housing development for exemption from all property taxes and a payment in lieu of taxes as established in this section, and in consideration of the sponsor’s offer, subject to receipt of a loan from the U.S. Department of Housing and Urban Development, to purchase, rehabilitate, and operate the housing development, agrees to accept payment of an annual service charge for public services, with the exception of garbage removal and disposal, in lieu of all property taxes. All expenses for garbage removal and disposal shall be the responsibility of the sponsor. The annual service charge shall be equal to four percent of the difference between the annual shelter rents actually collected and utilities.

(e)    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 U.S. Department of Housing and Urban Development 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 section. The city will not be obligated to continue the tax exemption provided for in this section if the project contemplated in this section is not completed and operated as such, and the exemption may be terminated if rehabilitation is abandoned prior to completion of the project.

(f)    Payment of service charge. The service charge in lieu of taxes as determined under this section 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 July 1 of each year.

(g)    Duration. The tax exemption provided for in this section shall remain in effect for the duration of the mortgage, but in no event shall the amount paid in lieu of taxes be less than $207,400.00 on the 16th year and thereafter; provided, that construction of the housing development commences within one year from the effective date of Ordinance No. 1961, and the project is completed and operated as a housing project for low and moderate income persons.

(Code 1985, § 11-8.2.4)

110-48 Same—Mortgage loans to finance housing development for elderly persons of low or moderate income (Colonial Meadows).

(a)    Preamble.

(1)    It is acknowledged that it is a proper public purpose of the state and its political subdivisions to provide housing for its 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 [Act No. 346 of the Public Acts of Michigan of 1966 (MCLA 125.1401 et seq.)]. 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 as agreed upon by the city and the sponsor, as allowed by the Act, and not to exceed the taxes that would be paid but for this Act. It is further acknowledged that such housing for elderly persons of low or 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 exemptions for such housing is a valid public purpose; further, that the continuance of the provisions of this section for tax exemption and the service charge in lieu of taxes during the period hereinafter contemplated in this section are essential to the determination of economic feasibility of housing developments which are constructed and financed in reliance on such tax exemption.

(2)    The city acknowledges that the Colonial Meadows Limited Dividend Housing Association Limited Partnership (the “sponsor”) has offered, subject to and expressly contingent upon receipt of a mortgage loan modification, HOME Loan and/or low income housing tax credits from the Michigan State Housing Development Authority, to improve and, continue to own and operate a housing development identified as Colonial Meadows on certain property located on Property Identification No.: 14-15-226-056 and commonly known as 1246 E. Walton, City of Pontiac, State of Michigan 48340 (See attached exhibit “A”) to serve elderly persons of low or moderate income, and 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.

(3)    It is recognized that the supply of low and moderate cost housing available for occupancy by certain elderly persons is being eroded through greatly increasing rental rates, and the conversion of low and moderate cost rental units into condominium units which are then sold at prices and under financing terms which are not affordable to elderly persons.

Note—Exhibit “A” is not set out herein, but is on file and available for inspection in the city offices.

(b)    Definitions. For purposes of section 110-48 hereof, the following definitions shall apply unless the content clearly indicates or requires a different meaning.

Act means the State Housing Development Act, being Public Act 346 of 1966, of the State of Michigan, MCLA 125.1401 et seq.

Annual shelter rents means the total collections during the calendar year immediately preceding July 1 of the year the payment in lieu of taxes is due from all occupants of the housing development representing rents or occupancy charges less utilities.

Authority means the Michigan State Housing Development Authority.

Authority-aided mortgage means a mortgage made, held, purchased or assisted by the authority.

Calendar year means the consecutive 12-month period, which ends on December 31 of the year immediately preceding the year in which the service charge is to be paid.

Contract rents as defined by the U.S. Department of Housing and Urban Development in regulations promulgated pursuant to the U.S. Housing Act of 1937, as amended by the Housing and Community Development Act of 1974.

Elderly means a single person who is 55 years of age or older or a household in which at least one member is 55 years of age or older and all other members are 50 years of age or older.

Federally aided mortgage means any of the following:

(1)    A below market interest rate mortgage insured, purchased, or held by the secretary of HUD.

(2)    A market interest rate mortgage insured by the secretary of HUD and augmented by a program of rent supplements.

(3)    A mortgage receiving interest reduction payments provided by the secretary of HUD.

(4)    A mortgage on a housing project to which the authority allocates low income housing tax credits under section 22b.

(5)    A mortgage receiving special benefits under other federal law designated specifically to develop low and moderate income housing, consistent with the Act.

HOME loan means that certain “Housing Opportunities Made Equal” rehabilitation mortgage loan to the sponsor, from the authority, the proceeds of which are intended to finance the cost of the improvements.

Housing development means a development which contains a significant element of housing for elderly persons of low or moderate 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 or moderate income.

HUD means the United States Department of Housing and Urban Development.

Improvements means the items of construction, services, and furniture, fixtures and equipment for the housing development to be financed with the proceeds of the HOME loan.

Low or moderate income persons means families and persons who cannot afford to pay the amounts at which private enterprise, without federally aided mortgages or loans from the authority, is providing a substantial supply of decent, safe, and sanitary housing and who fall within income limitations set in the Act or by the authority in its rules.

Mortgage loan means the loan made by the authority to the sponsor for the construction of or improvement to the premises and permanent financing of the housing development, or a mortgage loan insured by HUD or any other type of federally-aided or authority-aided mortgage or advance or grant that qualifies for a payment in lieu of taxes pursuant to the Act.

Rent reduction means the reduction in the per unit monthly rents paid by residents of the housing development, effective as of January 1, 2005, in the amount of $50.00.

Sponsor means Colonial Meadows Limited Dividend Housing Association Limited Partnership which has applied to the authority for a mortgage loan modification, HOME loan, low income housing tax credits or contract rents to finance improvements to and continued ownership and operation of a housing development at the real property described in section (a)(2) above.

Utilities means charges for fuel, natural gas, water, sanitary sewer service and/or electrical service, which are paid by the housing development during the calendar year immediately preceding July 1 of the year the payment in lieu of taxes is due and not any of those costs paid by the residents/tenants.

(Reserved for definition of class). Family, handicapped, etc. to which section 110-48 hereof shall apply.

(c)    Service charge. The city acknowledges that the Sponsor subject to receipt of the proceeds of a modified federally aided mortgage, HOME loan, and/or a modified authority-aided mortgage and/or the authority providing low income housing tax credits, has offered to commence and complete construction of the improvements with commencement of the improvements to occur within 30 days from the closing of the HOME loan and completion of the improvements to be within two years of the commencement of the improvements and to continue to own and operate the housing development identified as Colonial Meadows on certain property described in paragraph (a)(2) above, located in the city to serve elderly persons of low or moderate income and that the sponsor has offered to pay the city on account of the housing development an annual service charge for public services in lieu of taxes. The city acknowledges that Colonial Meadows fits within the class as described in section (e) below. The annual service charge for the Colonial Meadows Housing Development shall be assessed as follows during the operating years as specified below, it being expressly understood that the first payment under this section shall be on July 1, 2005, based on the operations of the housing development for the year ending December 31, 2004:

Years to which Payment of the Service Charge Applies

Percentage of Annual Shelter Rents

2004, 2005 and 2006

7%

2007 through 2011

8

2012 through 2016

9

2017 through 2021

10

However, the service charge shall not exceed taxes, which would be paid absent this tax exemption. Further provided, however, that the subject development will not be entitled to solid waste collection and disposal services and all costs of solid waste collection and disposal shall be the responsibility of the sponsor. Commencing with the year ended December 31, 2022 (i.e. taxes due July 1, 2023) and continuing thereafter the Colonial Meadows Housing Development shall pay 100 percent of all real and personal property taxes assessed against the housing development.

(d)    Payment of service charge. The service charge in lieu of taxes as determined under this section shall be payable in the same manner as general property taxes are payable to the city, except that the annual payment shall be made on July 1 of each year. All and any payments in lieu of taxes or portions thereof remaining unpaid after August 1 of the year in which they are due shall have interest of one percent per month, together with a penalty fee of four percent added to them; provided that the total penalty fee shall not exceed four percent of the total payment in lieu of taxes due and payable on July 1 of each year. The payment in lieu of taxes shall be accompanied by a certified annual audit of the gross rentals and utility costs of the project along with documentation regarding how the sponsor has calculated the amount of the PILOT payment it is submitting to the city. The sponsor shall also provide the city with any other audited financial statements or other documentation as required by the city (i.e. utility statements, etc.), which shall be provided for in the contract between the parties.

(e)    Class of housing development. 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 housing developments of multiple dwellings for elderly persons of low or moderate income:

(1)    Which are financed or assisted pursuant to Act No. 346 of the Public Acts of Michigan of 1966 (MCLA 125.1401 et seq.), as amended or by HUD.

(2)    Which are located in economically depressed urban renewal project areas;

(3)    Which are not economically feasible absent the city’s allowing a service charge in lieu of taxes;

(4)    Which the authority or HUD will not finance absent the city providing this tax benefit; and

(5)    Whose sponsor negotiates a service charge with the city when the housing development is in the planning stage, prior to the start of construction.

(f)    Negotiation and establishment of annual service charge. The housing development described in section (a)(2) above shall be exempt from all property taxes from and after commencement of construction of the buildings/structures and or improvements thereto and subject to the other terms and conditions of this section. The city, acknowledging that the sponsor and the authority or HUD have established the economic feasibility of the housing development in reliance upon the enactment and continuing effect of section 110-48 hereof and the qualification of the housing development for exemption from all property taxes and payment of a service charge in lieu of taxes as established herein, and in consideration of the sponsor’s offer, subject to receipt of a mortgage loan modification from the authority, HOME loan and/or low income housing tax credits and/or a federally aided mortgage to construct improvements at and continue to own and operate the housing development, hereby agrees to accept payment of an annual service charge for public services in lieu of all property taxes. The annual service charge for the housing development has been negotiated between the city and the sponsor and has been set at a rate, which will make the housing development economically feasible, and the rate is embodied in this section.

(g)    Contractual effect. The tax exemption provided for in this section shall only be effective upon the signing of a contract between the city and the sponsor who has obtained a mortgage loan or modified mortgage loan as a condition of qualifying the project to receive tax exemption and to make payments in lieu of taxes, subject to the terms of the contract, this section and state and federal law. The authority shall be a third party beneficiary to the contract and any amendment thereof. The contract and any amendment thereof must be approved by the city council. A housing project which so qualifies shall make a payment in lieu of property taxes as provided in the contract and otherwise be exempted from all property taxes as provided in the contract if all of the requirements of this section and federal and state law are met. Provided, however, that the payment in lieu of taxes shall not be less than seven percent of annual shelter rents. Further documentary evidence must be presented to the city assessor prior to December 31 of each year to establish that the project so qualifies, whether by making available to tenants a program of rent supplements or housing assistance payments, as established and allocated under the rules and regulations of either HUD or the authority or both, or the project is being operated in accordance with the requirements of the housing development grant program, or otherwise qualifies by law. Provided, however, that the city shall have the right to repeal section 110-48 and the tax exemption provided for in section 110-48 and to revoke the contract between the parties if the subject housing development is not operated as a project for elderly persons of low and moderate income, or if such project is not maintained in compliance with the codes and ordinances of the city including but not limited to chapter 22, buildings and building regulations; chapter 26, businesses; chapter 58, environment; chapter 62, fire prevention and protection; chapter 102, streets, sidewalks and other public places; and chapter 122, vegetation. In the event that the project is not maintained in compliance with the codes and ordinances of the city, the city, through its building and safety division or successor or other representative with enforcement authority, shall provide written notice to the sponsor of the nature of the violation(s) and the sponsor shall have 30 days in which to take the measures necessary to cure such violation(s) unless the nature of the violation(s) would significantly adversely affect the health, safety or welfare of the residents, in which case the sponsor shall take whatever steps are necessary to immediately correct the violation(s). A contract between the city and the sponsor with the authority as a 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 section.

(h)    Duration. Section 110-48 hereof shall remain in effect and shall not terminate until (a) Calendar year 2022, (b) the mortgage loan for the housing development is paid, or (c) the authority or other governmental entity no longer has any interest in the housing development; whichever should soonest occur; provided, that the sponsor obtains approval of a mortgage modification within six months from the effective date of section 110-48 (i.e. December 29, 2004) and construction of the improvements at the property described in paragraph (a)(2) above commences within 30 days following the closing of the HOME Loan and completion of the improvements is accomplished within two years of the commencement of the improvements and further provided that beginning in 2023 and continuing thereafter the Colonial Meadows housing development shall pay 100 percent of all real and personal property taxes assessed against the housing development. The annual payment in lieu of taxes may be adjusted by amendment of the contract entered into between the city and the sponsor. Provided, however, if a housing project fails to pay its annual payment in lieu of taxes as specified in Paragraph (d) above, the city council, by resolution, may revoke the tax exempt status of the housing project. The city council shall provide notice to the sponsor or owners or operators of the housing project, in writing by certified mail, at least ten days prior to the date that it shall consider the revocation of the tax-exempt status of the project. If the tax-exempt status of the housing project is revoked, the housing project shall then be placed on the tax rolls on the next December 31 following the revocation of the tax-exempt status of the project. If a housing project is added to the tax rolls for failing to make its payment in lieu of taxes and the payment remains unpaid at the time the housing project is added to the tax rolls, the city officials in charge of the collection thereof may certify to the tax assessing officer of the city the fact of such delinquency, whereupon such charge, together with any accumulated interest and penalty fees, shall be entered upon the tax rolls as a charge against such premises and shall be collected in the same manner as general city taxes against such premises.

(i)    Rent reduction. In consideration of the adoption of this amendment, the sponsor agrees that it will implement the rent reduction, effective January 1, 2005. Following the rent reduction, in subsequent years during the term of this section, the sponsor agrees that it will not increase the annual aggregate per unit rents to be paid by the residents of the housing development by an amount in excess of the aggregate of projected increases (over the previous year) in annual (i) operating expenses (including, without limitation, those costs and expenses of the housing development for advertising/marketing; management fee; accounting and legal services; management salaries; payroll taxes and benefits; office supplies/postage; telephone; vehicle expense and travel; resident services; utilities [including garbage and trash removal] alarm/security system monitoring; elevator maintenance; maintenance salaries, payroll taxes and benefits; decorating; repairs; exterminating; grounds expense; taxes and PILOT payments; and insurance), (ii) reserves required by the authority or other lender financing the housing development, and (iii) debt service on the mortgage loan (and any and all replacements, additions and modifications thereto).

(Ord. No. 1995, § 1(11-8.2.5), 6-8-92; Ord. No. 2176, § 1, 12-29-04)

110-49 Same—Mortgage loans to finance housing development for low to moderate income persons (Sanford Arms Apartments).

(a)    Preamble.

(1)    It is acknowledged that it is a proper public purpose of the state and its political subdivisions to provide housing for its 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 (Act No. 346 of the Public Acts of Michigan of 1966 (MCLA 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 for low or moderate income persons 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 exemptions for such housing is a valid public purpose; further, 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 determination of economic feasibility of housing developments which are constructed and financed in reliance on such tax exemption.

(2)    The city acknowledges that the Sanford Arms Limited Dividend Housing Association Limited Partnership (the “sponsor”) has offered, subject to receipt of a mortgage loan and/or low income housing tax credits from the Michigan State Housing Development Authority, to acquire, rehabilitate, reconstruct, improve, and own and operate a housing development identified as the Sanford Arms Apartments on certain property located in Assessor’s Plat No. 16, Part of Lots 8 and 24 and Assessor’s Plat No. 17, Part of Lots 16 and 17 commonly known as 100—167 Fiddis, 1—139 Leonard Court and 121—129 N. Sanford, Pontiac, Michigan 48342 to serve low or moderate income persons, 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.

(3)    It is further recognized that the area described in paragraph (a)(2) above is presently in an extremely blighted condition, and in its present condition has a detrimental effect on the nearby neighborhoods and on the city as a whole, and that there is an intense need in the city for said area to be rehabilitated, and that it does not appear possible for such area to be rehabilitated unless a tax exemption is provided pursuant to the statute set forth above, in order to enable the area to be redeveloped pursuant to the proposal made by the sponsor.

(b)    Definitions. For purposes of section 110-49 hereof, the following definitions shall apply unless the context clearly indicates or requires a different meaning.

Act means the State Housing Development Act, being Public Act 346 of 1966, of the State of Michigan, MCLA 125.1401 et seq.

Authority means the Michigan State Housing Development Authority.

Contract rents as defined by the U.S. Department of Housing and Urban Development in regulations promulgated pursuant to the U.S. Housing Act of 1937, as amended by the Housing and Community Development Act of 1974.

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.

HUD means the United States Department of Housing and Urban Development.

Sponsor means person or entities which have applied to the authority or HUD for a mortgage loan, low income housing tax credits or contract rents to finance a housing development.

Utilities means fuel, water, sanitary sewer service, and/or electrical service, which are paid by the development.

(Reserved for definition of class). Elderly, family, handicapped, etc. to which section 110-49 hereof shall apply.

(c)    The city acknowledges that the Sanford Arms Limited Dividend Housing Association Limited Partnership subject to receipt of a federal aided mortgage and/or the authority providing low income housing tax credits, will duly organize a limited dividend housing association limited dividend partnership (“limited partnership”) to purchase, own, rehabilitate and operate a housing development identified as the Sanford Arms Apartments on certain property located at 100—167 Fiddis, 1—139 Leonard Court and 121—129 N. Sanford, located in the city to serve persons of low income and that the limited partnership has offered to pay the city on account of the housing development an annual service charge for public services in lieu of taxes. The city acknowledges that the Sanford Arms Apartments fit within the class as described in subsection (e) below. The annual service charge for the class of persons of low income shall be equal to:

Year

Percentage

1 through 20

6%

21

10

22

10

23

20

24

20

25

30

26

30

27

50

28

50

29

70

30

100

of the difference between the contract rents actually collected and utilities; however, the service charge shall not exceed taxes, which would be paid absent this tax exemption. Provided, however, that the subject development will not be entitled to solid waste collection and disposal services and all costs of solid waste collection and disposal shall be the responsibility of the sponsor.

(d)    Payment of service charge. The service charge in lieu of taxes as determined under this section shall be payable in the same manner as general property taxes are payable to the city, except that the annual payment shall be made on July 1 of each year.

(e)    Class of housing development. 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 housing developments of multiple dwellings for elderly persons of low income and persons of low income:

(1)    Which are financed or assisted pursuant to Act No. 346 of the Public Acts of Michigan of 1966 (MCLA 125.1401 et seq.), as amended or by HUD.

(2)    Which are located in economically depressed urban renewal project areas;

(3)    Which are not economically feasible absent the city’s allowing a service charge in lieu of taxes;

(4)    Which the authority or HUD will not finance absent the city providing this tax benefit;

(5)    Which will not provide new jobs; and

(6)    Whose sponsor negotiates a service charge with the city when the housing development is in the planning stage, prior to the start of construction.

(f)    Negotiation and establishment of annual service charge. The housing development described in subsection (a)(2) above shall be exempt from all property taxes from and after commencement of construction/rehabilitation of the buildings/structures. The city, acknowledging that the sponsor and the authority or HUD have established the economic feasibility of the housing development in reliance upon the enactment and continuing effect of section 110-49 hereof and the qualification of the housing development for exemption from all property taxes and payment of a service charge in lieu of taxes as established herein, and in consideration of the sponsor’s offer, subject to receipt of a mortgage loan from the authority and/or low income housing tax credits and/or a federally aided mortgage to construct, own and operate the housing development, hereby agrees to accept payment of an annual service charge for public services in lieu of all property taxes. The annual service charge for the housing development has been negotiated between the city and the sponsor and has been set at a rate, which will make the housing development economically feasible, and the rate is embodied in this section.

(g)    Contractual effect. 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 or HUD, as third party beneficiary thereunder, to provide tax exemption and accept payments in lieu thereof as previously described is in effect by enactment of section 110-49 hereof. Provided, however, the city shall have the right to repeal section 110-49 and the tax exemption provided for in section 110-49 if the subject housing development is not operated as a project for low and moderate income citizens, or if such project is not maintained in compliance with the codes and ordinances of the city.

(h)    Duration. Section 110-49 hereof shall remain in effect and shall not terminate so long as the mortgage loan remains outstanding and unpaid or HUD mortgage insurance is still operative or the authority or HUD have any interest in the property; provided, that construction/rehabilitation of the Sanford Arms Apartments commences within one year from the effective date of section 110-49 (i.e., ____________, 200____________). This tax exemption and acceptance of payments in lieu thereof is personal to the Sanford Arms Limited Dividend Housing Association Limited Partnership and may not otherwise be assigned by the limited partnership. Any purported assignment shall be void, shall terminate the limited partnership’s right to the tax exemption and the city’s acceptance of payments in lieu thereof. In addition, should the limited partnership, assign, convey, sell or transfer ownership of the housing development and/or real property described in subsection (a)(2) above the tax exemption and acceptance of payments in lieu thereof shall automatically terminate and no longer be of any effect.

(Code 1985, § 11-8.3; Ord. No. 2110, § 1, 6-29-00)

110-50 Same—Mortgage loans to finance housing development for low to moderate income senior persons (Paddock Manor).

(a)    Preamble.

(1)    It is acknowledged that it is a proper public purpose of the state and its political subdivisions to provide housing for its senior 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 (Act No. 346 of the Public Acts of Michigan of 1966 (MCLA 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 for low or moderate income senior persons 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 exemptions for such housing is a valid public purpose; further, 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 determination of economic feasibility of housing developments which are constructed and financed in reliance on such tax exemption.

(2)    The city acknowledges that the Paddock Manor Limited Dividend Housing Association Limited Partnership (the “sponsor”) has offered, subject to receipt of a mortgage loan and/or low income housing tax credits from the Michigan State Housing Development Authority, to construct, own and operate a housing development identified as Paddock Manor on certain property located in the McConnell Addition, Lots 107 to 116, Lots 1 and 75 to 80 of the Industrial Addition and Assessor’s Plat No. 60, Lot 8 commonly known as 245 S. Paddock, Pontiac, Michigan 48341 to serve low or moderate income senior persons, 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.

(3)    It is further recognized that the area described in paragraph (a)(2) above is presently in an extremely blighted condition, and in its present condition has a detrimental effect on the nearby neighborhoods and on the city as a whole, and that there is an intense need in the city for said area to be rehabilitated, and that it does not appear possible for such area to be rehabilitated unless a tax exemption is provided pursuant to the statute set forth above, in order to enable the area to be redeveloped pursuant to the proposal made by the sponsor.

(b)    Definitions. For purposes of section 110-50 hereof, the following definitions shall apply unless the context clearly indicates or requires a different meaning.

Act means the State Housing Development Act, being Public Act 346 of 1966, of the State of Michigan, MCLA 125.1401 et seq.

Authority means the Michigan State Housing Development Authority.

Contract rents as defined by the U.S. Department of Housing and Urban Development in regulations promulgated pursuant to the U.S. Housing Act of 1937, as amended by the Housing and Community Development Act of 1974.

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.

HUD means the United States Department of Housing and Urban Development.

Senior citizen means a person 55 years of age or older.

Sponsor means person or entities which have applied to the authority or HUD for a mortgage loan, low income housing tax credits or contract rents to finance a housing development.

Utilities means fuel, water, sanitary sewer service, and/or electrical service, which are paid by the development.

(Reserved for definition of class). Elderly, family, handicapped, etc. to which section 110-50 hereof shall apply.

(c)    The city acknowledges that the Paddock Manor Limited Dividend Housing Association Limited Partnership subject to receipt of a federal aided mortgage and/or the authority providing low income housing tax credits, will duly organize a limited dividend housing association limited dividend partnership (“limited partnership”) to construct, own and operate a housing development identified as Paddock Manor on certain property located at 245 S. Paddock in the city to serve senior persons of low income and that the limited partnership has offered to pay the city on account of the housing development an annual service charge for public services in lieu of taxes. The city acknowledges that Paddock Manor fits within the class as described in Section (e) below. The annual service charge for the class of persons of low income shall be equal to:

Year

Percentage

1 through 20

4%

21 through 25

6

26 through 30

8

of the difference between the contract rents actually collected and utilities; however, the service charge shall not exceed taxes, which would be paid absent this tax exemption. Provided, however, that the subject development will not be entitled to solid waste collection and disposal services and all costs of solid waste collection and disposal shall be the responsibility of the sponsor.

(d)    Payment of service charge. The service charge in lieu of taxes as determined under this section shall be payable in the same manner as general property taxes are payable to the city, except that the annual payment shall be made on July 1 of each year.

(e)    Class of housing development. 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 housing developments of multiple dwellings for elderly persons of low income and persons of low income:

(1)    Which are financed or assisted pursuant to Act No. 346 of the Public Acts of Michigan of 1966 (MCLA 125.1401 et seq.), as amended or by HUD.

(2)    Which are located in economically depressed urban renewal project areas;

(3)    Which are not economically feasible absent the city’s allowing a service charge in lieu of taxes;

(4)    Which the authority or HUD will not finance absent the city providing this tax benefit;

(5)    Which will not provide new jobs; and

(6)    Whose sponsor negotiates a service charge with the city when the housing development is in the planning stage, prior to the start of construction.

(f)    Negotiation and establishment of annual service charge. The housing development described in subsection (a)(2) above shall be exempt from all property taxes from and after commencement of construction/rehabilitation of the buildings/structures. The city, acknowledging that the sponsor and the authority or HUD have established the economic feasibility of the housing development in reliance upon the enactment and continuing effect of section 110-50 hereof and the qualification of the housing development for exemption from all property taxes and payment of a service charge in lieu of taxes as established herein, and in consideration of the sponsor’s offer, subject to receipt of a mortgage loan from the authority and/or low income housing tax credits and/or a federally aided mortgage to construct, own and operate the housing development, hereby agrees to accept payment of an annual service charge for public services in lieu of all property taxes. The annual service charge for the housing development has been negotiated between the city and the sponsor and has been set at a rate, which will make the housing development economically feasible, and the rate is embodied in this section.

(g)    Contractual effect. 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 or HUD, as third party beneficiary thereunder, to provide tax exemption and accept payments in lieu thereof as previously described is in effect by enactment of section 110-50 hereof. Provided, however, the city shall have the right to repeal section 110-50 and the tax exemption provided for in section 110-50 if the subject housing development is not operated as a project for low and moderate income senior citizens, or if such project is not maintained in compliance with the codes and ordinances of the city. The sponsor has agreed that resident heads of households, having executed a lease for occupancy at Paddock Manor, shall be 55 years of age or older and no one under the age of 55 years of age shall be permitted to occupy or use the premises as their residence and should anyone under 55 years of age occupy or use as their residence any portion of Paddock Manor except for the resident manager and/or their family members, the city shall have the right to repeal section 110-50 and the tax exemption provided therein.

(h)    Duration. Section 110-50 hereof shall remain in effect and shall not terminate so long as the mortgage loan remains outstanding and unpaid or HUD mortgage insurance is still operative or the authority or HUD have any interest in the property; provided, that construction/rehabilitation of the Paddock Manor commences within one year from the effective date of section 110-50 (i.e., ____________, 200____________). This tax exemption and acceptance of payments in lieu thereof is personal to the Paddock Manor Limited Dividend Housing Association Limited Partnership and may not otherwise be assigned by the limited partnership. Any purported assignment shall be void, shall terminate the limited partnership’s right to the tax exemption and the city’s acceptance of payments in lieu thereof. In addition, should the limited partnership, assign, convey, sell or transfer ownership of the housing development and/or real property described in subsection (a)(2) above the tax exemption and acceptance of payments in lieu thereof shall automatically terminate and no longer be of any effect.

(Ord. No. 2110, § 1, 6-29-00; Ord. No. 2113, § 1, 7-13-00)

110-51 Same—Mortgage loans to finance housing development for low to moderate income persons (Presbyterian Village North).

(a)    Preamble.

(1)    It is acknowledged that it is a proper public purpose of the state and its political subdivisions to provide housing for its 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 (Act No. 346 of the Public Acts of Michigan of 1966 (MCLA 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 for low or moderate income persons 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 exemptions for such housing is a valid public purpose; further, 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 determination of economic feasibility of housing developments which are constructed and financed in reliance on such tax exemption.

(2)    The city acknowledges that the Presbyterian Village North Limited Dividend Housing Association Limited Partnership (the “sponsor”) has offered, subject to and expressly contingent upon receipt of a mortgage loan and/or low income housing tax credits from the Michigan State Housing Development Authority, to acquire, rehabilitate, reconstruct, improve, and own and operate a housing development identified as the Presbyterian Village North on certain property located on that portion of Assessor’s Plat No. 141, Part of Lot 1, all of Lot 7 and Part of Vacated Reed Road (property identification no.: 14-34-201-004) on which the existing Village buildings are dedicated (approximately 19.4 acres of the entire approximately 88 acre parcel) located on Opdyke Road in the City of Pontiac, State of Michigan to serve low or moderate income persons, 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.

(3)    It is further recognized that the area described in paragraph (a)(2) above is presently in an extremely blighted condition, and in its present condition has a detrimental effect on the nearby neighborhoods and on the city as a whole, and that there is an intense need in the city for said area to be rehabilitated, and that it does not appear possible for such area to be rehabilitated unless a tax exemption is provided pursuant to the statute set forth above, in order to enable the area to be redeveloped pursuant to the proposal made by the sponsor.

(b)    Definitions. For purposes of section 110-51 hereof, the following definitions shall apply unless the context clearly indicates or requires a different meaning:

Act means the State Housing Development Act, being Public Act 346 of 1966, of the State of Michigan, MCLA 125.1401 et seq.

Authority means the Michigan State Housing Development Authority.

Contract rents as defined by the U.S. Department of Housing and Urban Development in regulations promulgated pursuant to the U.S. Housing Act of 1937, as amended by the Housing and Community Development Act of 1974.

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.

HUD means the United States Department of Housing and Urban Development.

Sponsor means person or entities which have applied to the authority or HUD for a mortgage loan, low income housing tax credits or contract rents to finance a housing development.

Utilities means fuel, water, sanitary sewer service, and/or electrical service, which are paid by the development.

(Reserved for definition of class). Elderly, family, handicapped, etc. to which section 110-51 hereof shall apply.

(c)    The city acknowledges that the Presbyterian Village North Limited Dividend Housing Association Limited Partnership subject to receipt of a federal aided mortgage and/or the authority providing low income housing tax credits, will duly organize a limited dividend housing association limited dividend partnership (“limited partnership”) to purchase, own, rehabilitate and operate a housing development identified as Presbyterian Village North on certain property described in paragraph (a)(2) above, located in the city to serve persons of low income and that the limited partnership has offered to pay the city on account of the housing development an annual service charge for public services in lieu of taxes. The city acknowledges that Presbyterian Village North fits within the class as described in section (e) below. The annual service charge for the class of persons of low income shall be equal to:

Year

Percentage

1 through 30

3%

of the difference between the contract rents actually collected and utilities or $20,500.00 whichever is greater; however, the service charge shall not exceed taxes, which would be paid absent this tax exemption. Provided, however, that the subject development will not be entitled to solid waste collection and disposal services and all costs of solid waste collection and disposal shall be the responsibility of the sponsor.

(d)    Payment of service charge. The service charge in lieu of taxes as determined under this section shall be payable in the same manner as general property taxes are payable to the city, except that the annual payment shall be made on July 1 of each year.

(e)    Class of housing development. 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 housing developments of multiple dwellings for elderly persons of low income and persons of low income:

(1)    Which are financed or assisted pursuant to Act No. 346 of the Public Acts of Michigan of 1966 (MCLA 125.1401 et seq.), as amended or by HUD.

(2)    Which are located in economically depressed urban renewal project areas;

(3)    Which are not economically feasible absent the city’s allowing a service charge in lieu of taxes;

(4)    Which the authority or HUD will not finance absent the city providing this tax benefit;

(5)    Which will not provide new jobs; and

(6)    Whose sponsor negotiates a service charge with the city when the housing development is in the planning stage, prior to the start of construction.

(f)    Negotiation and establishment of annual service charge. The housing development described in section (a)(2) above shall be exempt from all property taxes from and after commencement of construction/rehabilitation of the buildings/structures. The city, acknowledging that the sponsor and the authority or HUD have established the economic feasibility of the housing development in reliance upon the enactment and continuing effect of section 110-51 hereof and the qualification of the housing development for exemption from all property taxes and payment of a service charge in lieu of taxes as established herein, and in consideration of the sponsor’s offer, subject to receipt of a mortgage loan from the authority and/or low income housing tax credits and/or a federally aided mortgage to construct, own and operate the housing development, hereby agrees to accept payment of an annual service charge for public services in lieu of all property taxes. The annual service charge for the housing development has been negotiated between the city and the sponsor and has been set at a rate, which will make the housing development economically feasible, and the rate is embodied in this section.

(g)    Contractual effect. 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 or HUD, as third party beneficiary thereunder, to provide tax exemption and accept payments in lieu thereof as previously described is in effect by enactment of section 110-51 hereof. Provided, however, the city shall have the right to repeal section 110-51 and the tax exemption provided for in section 110-51 if the subject housing development is not operated as a project for low and moderate income citizens, or if such project is not maintained in compliance with the codes and ordinances of the city.

(h)    Duration. Section 110-51 hereof shall remain in effect and shall not terminate so long as the mortgage loan remains outstanding and unpaid or HUD mortgage insurance is still operative or the authority or HUD have any interest in the property; provided, that construction/rehabilitation of Presbyterian Village North commences within one year from the effective date of section 110-51 (i.e., March 24, 2002). This tax exemption and acceptance of payments in lieu thereof is personal to the Presbyterian Village North Limited Dividend Housing Association Limited Partnership and may not otherwise be assigned by the limited partnership. Any purported assignment shall be void, shall terminate the limited partnership’s right to the tax exemption and the city’s acceptance of payments in lieu thereof. In addition, should the limited partnership, assign, convey, sell or transfer ownership of the housing development and/or real property described in

section (a)(2) above the tax exemption and acceptance of payments in lieu thereof shall automatically terminate and no longer be of any effect.

(Ord. No. 2127, § 1, 3-14-02)

Editor’s note—Ord. No. 2127, § 1, adopted March 14, 2002, amended the Code by adding provisions designated as § 110-50. Inasmuch as there already exist provisions so designated, the provisions of Ord. No. 2127 have been included herein as a new § 110-51 at the discretion of the editor.

110-52 Reserved.

Editor’s note—Ord. No. 2193, § 1, adopted Nov. 16, 2006, repealed § 110-52, which pertained to projects, terms specified—Mortgage loans to finance housing development for low to moderate income persons (The Casa Del Ray Apartments) and derived from Ord. No. 2143, § 1, adopted June 27, 2002; Ord. No. 2152, § 1, adopted Nov. 21, 2002.

110-53 Same—Mortgage loans to finance housing development for low to moderate income persons (The Renaissance Court Apartments).

(a)    Preamble.

(1)    It is acknowledged that it is a proper public purpose of the state and its political subdivisions to provide housing for its 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 (Act No. 346 of the Public Acts of Michigan of 1966 (MCLA 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 for low or moderate income persons 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 exemptions for such housing is a valid public purpose; further, 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 determination of economic feasibility of housing developments which are constructed and financed in reliance on such tax exemption.

(2)    The city acknowledges that the Finlay Interests 48 Limited Dividend Housing Association Limited Partnership (the “sponsor”) has offered, subject to and expressly contingent upon receipt of a mortgage loan and/or low income housing tax credits from the Michigan State Housing Development Authority, to acquire, rehabilitate, reconstruct, improve, and own and operate a housing development identified as the Renaissance Court Apartments on certain property located on T3N, R10E, SEC 33, Assessor’s Plat No. 51, Lot 1 Except the West 45 of the North 156.70, Also Except Beginning at the Southeast Corner of Lot 19 of Osmun Gardens No. 2 (property identification no.: 14-33-226-023) and commonly known as 128 South Edith, in the City of Pontiac, State of Michigan to serve low or moderate income persons, 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.

(3)    It is further recognized that the area described in paragraph (a)(2) above is presently in an extremely blighted condition, and in its present condition has a detrimental effect on the nearby neighborhoods and on the city as a whole, and that there is an intense need in the city for said area to be rehabilitated, and that it does not appear possible for such area to be rehabilitated unless a tax exemption is provided pursuant to the statute set forth above, in order to enable the area to be redeveloped pursuant to the proposal made by the sponsor.

(b)    Definitions. For purposes of section 110-53 hereof, the following definitions shall apply unless the context clearly indicates or requires a different meaning:

Act means the State Housing Development Act, being Public Act 346 of 1966, of the State of Michigan, MCLA 125.1401 et seq.

Authority means the Michigan State Housing Development Authority.

Contract rents as defined by the U.S. Department of Housing and Urban Development in regulations promulgated pursuant to the U.S. Housing Act of 1937, as amended by the Housing and Community Development Act of 1974.

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.

HUD means the United States Department of Housing and Urban Development.

Low income or moderate income persons means families and persons who cannot afford to pay the amounts at which private enterprise, without federally aided mortgages or loans from the authority, is providing a substantial supply of decent, safe, and sanitary housing and who fall within income limitations set in the act or by the authority in its rules. Among low income or moderate income persons, preference shall be given to the elderly and those displaced by urban renewal, slum clearance or other governmental action.

Sponsor means person or entities which have applied to the authority or HUD for a mortgage loan, low income housing tax credits or contract rents to finance a housing development.

Utilities means fuel, water, sanitary sewer service, and/or electrical service, which are paid by the development.

(Reserved for definition of class). Elderly, family, handicapped, etc. to which section 110-53 hereof shall apply.

(c)    Service charge. The city acknowledges that the Finlay Interests 48 Limited Dividend Housing Association Limited Partnership subject to receipt of a federal aided mortgage and/or an authority aided mortgage and/or the authority providing low income housing tax credits, will duly organize a limited dividend housing association limited dividend partnership (“limited partnership”) to purchase, own, rehabilitate and operate a housing development identified as the Renaissance Court Apartments on certain property described in paragraph (a)(2) above, located in the city to serve persons of low income and that the limited partnership has offered to pay the city on account of the housing development an annual service charge for public services in lieu of taxes. The city acknowledges that the Renaissance Court Apartments fit within the class as described in section (e) below. The annual service charge for the class of persons of low income shall be equal to:

Year

Percentage

1 through 5

4%

6 through 30

5%

of the difference between the contract rents actually collected and utilities; however, the service charge shall not exceed taxes, which would be paid absent this tax exemption. Provided, however, that the subject development will not be entitled to solid waste collection and disposal services and all costs of solid waste collection and disposal shall be the responsibility of the sponsor.

(d)    Payment of service charge. The service charge in lieu of taxes as determined under this section shall be payable in the same manner as general property taxes are payable to the city, except that the annual payment shall be made on July 1 of each year.

(e)    Class of housing development. 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 housing developments of multiple dwellings for elderly persons of low income and/or persons of low income:

(1)    Which are financed or assisted pursuant to Act No. 346 of the Public Acts of Michigan of 1966 (MCLA 125.1401 et seq.), as amended or by HUD.

(2)    Which are located in economically depressed urban renewal project areas;

(3)    Which are not economically feasible absent the city’s allowing a service charge in lieu of taxes;

(4)    Which the authority or HUD will not finance absent the city providing this tax benefit;

(5)    Which will not provide new jobs; and

(6)    Whose sponsor negotiates a service charge with the city when the housing development is in the planning stage, prior to the start of construction.

(f)    Negotiation and establishment of annual service charge. The housing development described in section (a)(2) above shall be exempt from all property taxes from and after commencement of construction/rehabilitation of the buildings/structures. The city, acknowledging that the sponsor and the authority or HUD have established the economic feasibility of the housing development in reliance upon the enactment and continuing effect of section 110-53 hereof and the qualification of the housing development for exemption from all property taxes and payment of a service charge in lieu of taxes as established herein, and in consideration of the sponsor’s offer, subject to receipt of a mortgage loan from the authority and/or low income housing tax credits and/or a federally aided mortgage to construct, own and operate the housing development, hereby agrees to accept payment of an annual service charge for public services in lieu of all property taxes. The annual service charge for the housing development has been negotiated between the city and the sponsor and has been set at a rate, which will make the housing development economically feasible, and the rate is embodied in this section.

(g)    Contractual effect. 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 or HUD, as third party beneficiary thereunder, to provide tax exemption and accept payments in lieu thereof as previously described is in effect by enactment of section 110-53 hereof. Provided, however, the city shall have the right to repeal section 110-53 and the tax exemption provided for in section 110-53 if the subject housing development is not operated as a project for low and moderate income citizens, or if such project is not maintained in compliance with the codes and ordinances of the city. In the event that the project is not maintained in compliance with the codes and ordinances of the city, the city, through its building and safety division or successor, shall provide written notice to the sponsor of the nature of the violation(s) and the sponsor shall have 30 days to cure such violation(s) unless the nature of the violation(s) would significantly adversely affect the health, safety or welfare of the residents, in which case the sponsor shall take whatever steps are necessary to immediately correct the violation(s).

(h)    Duration. section 110-53 hereof shall remain in effect and shall not terminate so long as the mortgage loan remains outstanding and unpaid or HUD mortgage insurance is still operative or the authority or HUD have any interest in the property or the development remains subject to income and rent restrictions pursuant to section 42 of the Internal Revenue Code of 1986, as amended; provided, that construction/rehabilitation of the Renaissance Court Apartments commences within one year from the effective date of section 110-53 (i.e., December 1, 2002).

(Ord. No. 2144, § 1, 6-27-02; Ord. No. 2151, § 1, 11-21-02)

Editor’s note—Ord. No. 2144, § 1, adopted June 27, 2002, amended the Code by adding provisions designated as a new § 110-52. Inasmuch as there already exist provisions so designated, the provisions of Ord. No. 2144 have been included herein as a new § 110-53 at the discretion of the editor. Subsequently, amendatory Ord. No. 2151, adopted Nov. 21, 2002 was renumbered as well. See the Code Comparative Table.

110-54 Same—Mortgage loans to finance housing development for elderly persons of low or moderate income (Elmhaven Manor).

(a)    Preamble.

(1)    It is acknowledged that it is a proper public purpose of the state and its political subdivisions to provide housing for its 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 [Act No 346 of the Public Acts of Michigan of 1966 (MCLA 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 for elderly persons of low or 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 exemptions for such housing is a valid public purpose; further, 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 determination of economic feasibility of housing developments which are constructed and financed in reliance on such tax exemption.

(2)    The city acknowledges that the Elmhaven Limited Dividend Housing Association Limited Partnership (the “sponsor”) has offered, subject to and expressly contingent upon receipt of a mortgage loan and/or low income housing tax credits from the Michigan State Housing Development Authority, to construct, improve, own and operate a housing development identified as Elmhaven Manor on certain property located on Property Identification No.: 14-07-326-014 and commonly known as 600 W. Walton, City of Pontiac, State of Michigan (see attached exhibit “A”) to serve elderly persons of low or moderate income, and 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.

Note—Exhibit “A” is not set out herein, but it is on file and available for inspection in the offices of the city.

(3)    It is recognized that the supply of low and moderate cost housing available for occupancy by certain elderly persons is being eroded through greatly increasing rental rates, and the conversion of low and moderate cost rental units into condominium units which are then sold at prices and under financing terms which are not affordable to elderly persons.

(b)    Definitions. For purposes of section 110-54 hereof, the following definitions shall apply unless the content clearly indicates or requires a different meaning.

Act means the State Housing Development Act, being Public Act 346 of 1966, of the State of Michigan, MCLA 125.1401 et seq.

Authority means the Michigan State Housing Development Authority.

Contract rents as defined by the U.S. Department of Housing and Urban Development in regulations promulgated pursuant to the U.S. Housing Act of 1937, as amended by the Housing and Community Development Act of 1974.

Elderly means a single person who is 55 years of age or older or a household in which at least one member is 55 years of age or older and all other members are 50 years of age or older.

Housing development means a development which contains a significant element of housing for elderly persons of low or moderate 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 or moderate income.

HUD means the United States Department of Housing and Urban Development.

Low or moderate income persons means families and persons who cannot afford to pay the amounts at which private enterprise, without federally aided mortgages or loans from the authority, is providing a substantial supply of decent, safe, and sanitary housing and who fall within income limitations set in the Act or by the authority in its rules.

Sponsor means Elmhaven Limited Dividend Housing Association Limited Partnership which has applied to the authority or HUD for a mortgage loan, low income housing tax credits or contract rents to finance a housing development at the real property described in section (a)(2) above.

Utilities means fuel, water, sanitary sewer service, and/or electrical service, which are paid by the development.

(Reserved for definition of class). Family, handicapped, etc. to which section 110-54 hereof shall apply.

(c)    Service charge. The city acknowledges that the Elmhaven Manor Limited Dividend Housing Association Limited Partnership (“limited partnership”) subject to receipt of a federally aided mortgage and/or an authority aided mortgage and/or the authority providing low income housing tax credits, has offered to construct and operate a housing development identified as Elmhaven Manor on certain property described in subsection (a)(2) above, located in the city to serve elderly persons of low or moderate income and that the limited partnership has offered to pay the city on account of the housing development an annual service charge for public services in lieu of taxes. The city acknowledges that Elmhaven Manor fits within the class as described in subsection (e) below. The annual service charge for the class of persons of low income shall be equal to:

Year

Percentage

1 through 10

4%

11 through 20

4.5%

21 through 35

5%

of the difference between the contract rents actually collected and utilities; however, the service charge shall not exceed taxes, which would be paid absent this tax exemption. Provided, however, that the subject development will not be entitled to solid waste collection and disposal services and all costs of solid waste collection and disposal shall be the responsibility of the sponsor.

(d)    Payment of service charge. The service charge in lieu of taxes as determined under this section shall be payable in the same manner as general property taxes are payable to the city, except that the annual payment shall be made on July 1 of each year.

(e)    Class of housing development. 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 housing developments of multiple dwellings for elderly persons of low or moderate income:

(1)    Which are financed or assisted pursuant to Act No. 346 of the Public Acts of Michigan of 1966 (MCLA 125.1401 et seq.), as amended or by HUD.

(2)    Which are located in economically depressed urban renewal project areas;

(3)    Which are not economically feasible absent the city’s allowing a service charge in lieu of taxes;

(4)    Which the authority or HUD will not finance absent the city providing this tax benefit; and

(5)    Whose sponsor negotiates a service charge with the city when the housing development is in the planning stage, prior to the start of construction.

(f)    Negotiation and establishment of annual service charge. The housing development described in subsection (a)(2) above shall be exempt from all property taxes from and after commencement of construction of the buildings/structures. The city, acknowledging that the sponsor and the authority or HUD have established the economic feasibility of the housing development in reliance upon the enactment and continuing effect of section 110-54 hereof and the qualification of the housing development for exemption from all property taxes and payment of a service charge in lieu of taxes as established herein, and in consideration of the sponsor’s offer, subject to receipt of a mortgage loan from the authority and/or low income housing tax credits and/or a federally aided mortgage to construct, own and operate the housing development, hereby agrees to accept payment of an annual service charge for public services in lieu of all property taxes. The annual service charge for the housing development has been negotiated between the city and the sponsor and has been set at a rate, which will make the housing development economically feasible, and the rate is embodied in this section.

(g)    Contractual effect. 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 or HUD, as third party beneficiary thereunder, to provide tax exemption and accept payments in lieu thereof as previously described is in effect by enactment of section 110-54 hereof. Provided, however, the city shall have the right to repeal section 110-54 and the tax exemption provided for in section 110-54 if the subject housing development is not operated as a project for low and moderate income citizens, or if such project is not maintained in compliance with the codes and ordinances of the city. In the event that the project is not maintained in compliance with the codes and ordinances of the city, the city, through its building and safety division or successor, shall provide written notice to the sponsor of the nature of the violation(s) and the sponsor shall have 30 days in which to take the measures necessary to cure such violation(s) unless the nature of the violation(s) would significantly adversely affect the health, safety or welfare of the residents, in which case the sponsor shall take whatever steps are necessary to immediately correct the violation(s).

(h)    Duration. Section 110-54 hereof shall remain in effect and shall not terminate so long as the mortgage loan remains outstanding and unpaid or HUD mortgage insurance is still operative or the authority or HUD have any interest in the property or the development remains subject to income and rent restrictions pursuant to section 42 of the Internal Revenue Code of 1986, as amended; provided, that construction of Elmhaven Manor commences within one year from the effective date of section 110-54 (i.e, January 30, 2003).

(Ord. No. 2153, § 1, 11-21-02; Ord. No. 2157, § 1, 1-30-03)

Editor’s note—Ord. No. 2153, § 1, adopted Nov. 21, 2002, amended the Code by adding provisions designated as a new § 110-53. Inasmuch as there already exist provisions so designated, the provisions of Ord. No. 2153 have been included herein as a new § 110-54 at the discretion of the editor. See the Code Comparative Table.

110-55 Mortgage loans to finance housing development for elderly persons of low or moderate income (Village of Oakland Woods II).

(a)    Preamble.

(1)    It is acknowledged that it is a proper public purpose of the state and its political subdivisions to provide housing for its 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 [Act No. 346 of the Public Acts of Michigan of 1966 (MCLA 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 for elderly persons of low or 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 exemptions for such housing is a valid public purpose; further, 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 determination of economic feasibility of housing developments which are constructed and financed in reliance on such tax exemption.

(2)    The city acknowledges that the Oakland Woods Limited Dividend Housing Association Limited Partnership (the “sponsor”) has offered, subject to and expressly contingent upon receipt of a mortgage loan and/or Low Income Housing Tax Credits from the Michigan State Housing Development Authority, to construct, improve, own and operate a housing development currently identified as the Village of Oakland Woods II on certain property located on Property Identification No.: 14-34-202-001/Part of 14-34-202-004 located in the City of Pontiac, County of Oakland, State of Michigan (and legally described as set forth on the attached exhibit “A”) to serve elderly persons of low or moderate income, and 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.

Note—Exhibit “A” is not set out herein, but it is on file and available for inspection in the offices of the city.

(3)    It is recognized that the supply of low and moderate cost housing available for occupancy by certain elderly persons is being eroded through greatly increasing rental rates, and the conversion of low and moderate cost rental units into condominium units which are then sold at prices and under financing terms which are not affordable to elderly persons.

(b)    Definitions. For purposes of section 110-55 hereof, the following definitions shall apply unless the content clearly indicates or requires a different meaning.

Act means the State Housing Development Act, being Public Act 346 of 1966, of the State of Michigan, MCLA 125.1401 et seq.

Annual shelter rents means the total collections during the calendar year immediately preceding July 1 of the year the payment in lieu of taxes is due from all occupants of the housing development representing rents or occupancy charges exclusive of charges for natural gas, electricity, heat or other utilities furnished to the occupants.

Authority means the Michigan State Housing Development Authority.

Authority-aided mortgage means a mortgage made, held, purchased or assisted by the authority.

Calendar year means the consecutive 12-month period, which ends on December 31 of the year immediately preceding the year in which the service charge is to be paid.

Contract rents as defined by the U.S. Department of Housing and Urban Development in regulations promulgated pursuant to the U.S. Housing Act of 1937, as amended by the Housing and Community Development Act of 1974.

Elderly means a single person who is 55 years of age or older or a household in which at least one member is 55 years of age or older and all other members are 50 years of age or older.

Federally aided mortgage means the following:

(1)    A below market interest rate mortgage insured, purchased, or held by the Secretary of the United States Department of Housing and Urban Development.

(2)    A market interest rate mortgage insured by the Secretary of the United States Department of Housing and Urban Development and augmented by a program of rent supplements.

(3)    A mortgage receiving interest reduction payments provided by the Secretary of the United States Department of Housing and Urban Development.

(4)    A mortgage on a housing project to which the authority allocates low income housing tax credits.

(5)    A mortgage receiving special benefits under other federal law designated specifically to develop low and moderate income housing, consistent with the Act.

Housing development means a development which contains a significant element of housing for elderly persons of low or moderate 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 or moderate income.

HUD means the United States Department of Housing and Urban Development.

Low or moderate income persons means families and persons who cannot afford to pay the amounts at which private enterprise, without federally aided mortgages or loans from the authority, is providing a substantial supply of decent, safe, and sanitary housing and who fall within income limitations set in the Act or by the authority in its rules.

Sponsor means Oakland Woods Limited Dividend Housing Association Limited Partnership which has applied to the authority or HUD for a mortgage loan, low income housing tax credits or contract rents to finance a housing development at the real property described in subsection (a)(2) above.

Utilities means charges for fuel, natural gas, water, sanitary sewer service, and/or electrical service, which are paid by the housing development during the calendar year immediately preceding July 1 of the year the payment in lieu of taxes is due and not any of those costs paid by the residents/tenants.

(Reserved for definition of class). Family, handicapped, etc. to which section 110-55 hereof shall apply.

(c)    Service charge. The city acknowledges that the sponsor subject to receipt of a federally aided mortgage and/or an authority aided mortgage and/or the authority providing low income housing tax credits, has offered to construct and operate a housing development identified as the Village of Oakland Woods II on certain property described in subsection (a)(2) above, located in the city to serve elderly persons of low or moderate income and that the limited partnership has offered to pay the city on account of the housing development an annual service charge for public services in lieu of taxes. The city acknowledges that the Village of Oakland Woods II fits within

the class as described in subsection (e) below. The annual service charge for the class of persons of low income shall be equal to:

Years

Percentage

1 through 35

4%

of annual shelter rents; however, the service charge shall not exceed taxes, which would be paid absent this tax exemption. Provided, however, that the subject development will not be entitled to solid waste collection and disposal services and all costs of solid waste collection and disposal shall be the responsibility of the sponsor.

(d)    Payment of service charge. The service charge in lieu of taxes as determined under this section shall be payable in the same manner as general property taxes are payable to the city, except that the annual payment shall be made on July 1 of each year. All and any payments in lieu of taxes or portions thereof remaining unpaid after August 1 of the year in which they are due shall have interest of one percent per month, together with a penalty fee of four percent added to them; provided that the total penalty fee shall not exceed four percent of the total payment in lieu of taxes due and payable on July 1 of each year. The payment in lieu of taxes shall be accompanied by a certified annual audit of the gross rentals and utility costs of the project along with documentation regarding how the sponsor has calculated the amount of the PILOT payment it is submitting to the city. The sponsor shall also provide the city with any other audited financial statements or other documentation as required by the city (i.e. utility statements, etc.), which shall be provided for in the contract between the parties.

(e)    Class of housing development. 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 housing developments of multiple dwellings for elderly persons of low or moderate income:

(1)    Which are financed or assisted pursuant to Act No. 346 of the Public Acts of Michigan of 1966 (MCLA 125.1401 et seq.), as amended or by HUD.

(2)    Which are located in economically depressed urban renewal project areas;

(3)    Which are not economically feasible absent the city’s allowing a service charge in lieu of taxes;

(4)    Which the authority or HUD will not finance absent the city providing this tax benefit; and

(5)    Whose sponsor negotiates a service charge with the city when the housing development is in the planning stage, prior to the start of construction.

(f)    Negotiation and establishment of annual service charge. The housing development described in subsection (a)(2) above shall be exempt from all property taxes from and after commencement of construction of the buildings/structures. The city, acknowledging that the sponsor and the authority or HUD have established the economic feasibility of the housing development in reliance upon the enactment and continuing effect of section 110-55 hereof and the qualification of the housing development for exemption from all property taxes and payment of a service charge in lieu of taxes as established herein, and in consideration of the sponsor’s offer, subject to receipt of a mortgage loan from the authority and/or low income housing tax credits and/or a federally aided mortgage to construct, own and operate the housing development, hereby agrees to accept payment of an annual service charge for public services in lieu of all property taxes. The annual service charge for the housing development has been negotiated between the city and the sponsor and has been set at a rate, which will make the housing development economically feasible, and the rate is embodied in this section.

(g)    Contractual effect. The tax exemption provided for in this section shall only be effective upon the signing of a contract between the city and sponsor who will obtain either an authority-aided mortgage or a federally aided mortgage as a condition of qualifying the project to receive tax exemption and to make payments in lieu of taxes, subject to the terms of the contract, this section and federal and state law. While the sponsor is subject to an authority-aided mortgage, the authority shall be a third party beneficiary to the contract and any amendment thereof. The contract and any amendment thereof must be approved by the city council. A housing project which so qualifies shall make a payment in lieu of property taxes as provided in the contract and otherwise be exempted from all property taxes as provided in the contract if all of the requirements of this section and federal and state law are met. Provided, however, that the payment in lieu of taxes shall not be less than four percent of annual shelter rents. Further, documentary evidence must be presented to the city assessor or their designee prior to December 31 of each year to establish that the project so qualifies, whether by making available to tenants a program of rent supplements or housing assistance payments, as established and allocated under the rules and regulations of HUD or the authority or both, or the project is being operated in accordance with the requirements of the housing development grant program, or otherwise qualifies by law. Provided however, that the city shall have the right to repeal section 110-55 and the tax exemption provided for in section 110-55 and to revoke the contract between the parties if the subject housing development is not operated as a project for elderly persons of low and moderate income, or if such project is not maintained in compliance with the codes and ordinances of the city including but not limited to chapter 22, Buildings and Building Regulations; chapter 26, Businesses; chapter 58, Environment; chapter 62, Fire Prevention and Protection; chapter 102, Streets, Sidewalks and Other Public Places; and chapter 122, Vegetation. In the event that the project is not maintained in compliance with the codes and ordinances of the city, the city, through its building and safety division or successor or other representative with enforcement authority, shall provide written notice to the sponsor of the nature of the violation(s) and the sponsor shall have 30 days in which to take the measures necessary to cure such violation(s) unless the nature of the violation(s) would significantly adversely affect the health, safety or welfare of the residents, in which case the sponsor shall take whatever steps are necessary to immediately correct the violation(s).

(h)    Duration. Section 110-55 hereof shall remain in effect and shall not terminate so long as the mortgage loan remains outstanding and unpaid or HUD mortgage insurance is still operative or the Authority or HUD have any interest in the property or the development remains subject to income and rent restrictions pursuant to Section 42 of the Internal Revenue Code of 1986, as amended; provided, that construction of the Village of Oakland Woods II commences within one year from the effective date of section 110-55 (i.e, March 10, 2005).

(Ord. No. 2178, § 1, 3-10-05)

110-56 Rehabilitation of existing project for low to moderate income persons (Spring Lake Village Apartments).

(a)    Preamble.

(1)    It is acknowledged that it is a proper public purpose of the state and its political subdivisions to provide housing for its 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 (Act No. 346 of the Public Acts of Michigan of 1966 (MCL 125.1401 et seq.)), as amended. The city of Pontiac is authorized by this Act to establish or charge 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 for low or moderate income persons 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 exemptions for such housing is a valid public purpose; further, 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 determination of economic feasibility of housing developments which are constructed and financed in reliance on such tax exemption.

(2)    The City acknowledges that the Spring Lake Village 2008 Limited Dividend Housing Association L.L.C. (the “Sponsor”) has offered, subject to and expressly contingent upon receipt of a federally aided mortgage or authority-aided mortgage loan, financing or assistance and/or Low Income Housing Tax Credits from the Michigan State Housing Development Authority, to acquire, rehabilitate, reconstruct, improve, and own and operate a housing development identified as the Spring Lake Village Apartments on certain property commonly known as 252 Carriage Circle, Pontiac, MI 48342 (property Identification Nos.: 64-14-34-126-002 and 64-14-34-176-001) in the City of Pontiac, State of Michigan to serve low or moderate income persons, 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.

(3)    It is further recognized that the area described in Paragraph (a)(2) above is presently in an extremely blighted condition, and in its present condition has a detrimental effect on the nearby neighborhoods and on the city as a whole, and that there is an intense need in the city for said area to be rehabilitated, and that it does not appear possible for such area to be rehabilitated unless a tax exemption is provided pursuant to the statute set forth above, in order to enable the area to be redeveloped pursuant to the proposal made by the Sponsor.

(b)    Definitions. For purposes of this section, the following definitions shall apply unless the context clearly indicates or requires a different meaning:

Act means the State Housing Development Authority Act of 1966, being Public Act 346 of 1966, of the State of Michigan, MCL 125.1401 et seq.

Annual shelter rent means the total collections during an agreed annual period from all occupants of a housing project representing rent or occupancy charges, exclusive of charges for natural gas, electricity, heat, sewer and water services, or other utilities furnished to the occupants.

Authority means the Michigan State Housing Development Authority.

Authority-aided mortgage means a mortgage made, held, purchased or assisted by the Authority.

Contract rents means as defined by the U.S. Department of Housing and Urban Development in regulations promulgated pursuant to the U.S. Housing Act of 1937, as amended by the Housing and Community Development Act of 1974.

Federally aided mortgage means any of the following:

(i)    A below market interest rate mortgage insured, purchased, or held by the Secretary of HUD.

(ii)    A market interest rate mortgage insured by the Secretary of HUD and augmented by a program of rent supplements.

(iii)    A mortgage receiving interest reduction payments provided by the Secretary of HUD.

(iv)    A mortgage on a housing project to which the Authority allocates low income housing tax credits under Section 22b.

(v)    A mortgage receiving special benefits under other federal law designated specifically to develop low and moderate income housing, consistent with the Act.

Housing development means a development that contains a significant element of housing for persons of low or moderate income and 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 or moderate income.

HUD means the United States Department of Housing and Urban Development.

Low income or moderate income persons means families and persons who cannot afford to pay the amounts at which private enterprise, without federally aided mortgages or loans from the authority, is providing a substantial supply of decent, safe, and sanitary housing and who fall within income limitations set in the Act or by the Authority in its rules.

Mortgage loan means a loan to be made by the Authority or insured by the U.S. Department of Housing and Urban Development to the Sponsor for the rehabilitation and permanent financing of the housing development.

Sponsor means Spring Lake Village 2008 Limited Dividend Housing Association L.L.C., which has applied to the Authority or HUD for a mortgage loan, financing, assistance or low income housing tax credits or contract rents to finance a housing development.

Utilities means charges for fuel, natural gas, water, sanitary sewer, trash, recycling, Internet services and/or electrical service, which are paid by the Sponsor/Development.

(c)    Establishment of annual service charge. The Housing Development, Spring Lake Village Apartments identified as that which will be owned, operated and rehabilitated by the Sponsor, for low and moderate income housing commonly known as 252 Carriage Circle, Pontiac, MI 48342, subject to and expressly contingent upon receipt of a Federally Aided or Authority Aided Mortgage loan, financing or assistance and/or Low Income Housing Tax Credits from the Michigan State Housing Development Authority, to acquire, rehabilitate, reconstruct, improve, and own and operate the housing development shall be exempt from all ad valorem property taxes from and after sale of such aforementioned property to the Sponsor. The City acknowledges that the Sponsor and the Authority and/or HUD have established the economic feasibility of the housing development in reliance upon the enactment and the continuing effect of this ordinance and the qualification of the housing development from exemption from all ad valorem property taxes and a payment in lieu of taxes established herein, and in consideration of the Sponsor’s offer, subject to the receipt of a Federally Aided or Authority-Aided Mortgage loan, financing or assistance and/or Low Income Housing Tax Credits from the Michigan State Housing Development Authority to rehabilitate, own and operate said housing development, hereby agrees to accept payment of an annual service charge for the public services in lieu of all ad valorem property taxes. The annual service charge shall be equal to four (4%) percent of the difference between the Annual Shelter Rents actually collected and Utilities.

(d)    Payment of service charge. The service charge in lieu of taxes as determined hereunder shall be payable in the same manner as general property taxes are payable to the City of Pontiac and the annual payment shall be paid on or before the first day of July of each year, and upon collection by the City, shall be distributed to the several units levying ad valorem taxes in the City of Pontiac in the same proportions as prevail for the general property tax, or in accordance with any tax increment financing plan duly adopted and effective pursuant to Act 197 of 1975, as amended.

(e)    Class of housing development. 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 housing developments of multiple family dwellings for persons of low or moderate income:

(i)    Which are financed or assisted pursuant to Act No. 346 of the Public Acts of Michigan of 1966 (MCL 125.1401 et seq.), as amended or by HUD;

(ii)    Which are located in economically depressed urban renewal project areas;

(iii)    Which are not economically feasible absent the City’s allowing a service charge in lieu of taxes;

(iv)    Which the Authority or HUD will not finance absent the City providing this tax benefit;

(v)    Which will not provide new jobs; and

(vi)    Those sponsor negotiates a service charge with the City when the housing development is in the planning stage, prior to the start of construction.

(f)    Contractual effect. 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 or HUD, as third party beneficiary thereunder, to provide tax exemption and accept payments in lieu thereof as previously described is in effect by enactment of this section hereof. Provided, however, the City shall have the right to repeal this section and the tax exemption provided for in this section if the subject housing development is not operated as a project for low and moderate income citizens, or if such project is not maintained in compliance with the codes and ordinances of the City.

(g)    Duration. This section shall remain in effect and shall not terminate so long as a Federally Aided Mortgage or Authority-Aided Mortgage loan remains outstanding and unpaid or HUD mortgage insurance is still operative or the Authority or HUD have any interest in the property; provided, that construction/rehabilitation of the Spring Lake Village Apartments commences and is completed by September 30, 2011. This tax exemption and acceptance of payments in lieu thereof are personal to the Spring Lake Village 2008 Limited Dividend Housing Association L.L.C. and may not otherwise be assigned by the Sponsor without the prior consent of the City, which shall not be unreasonably withheld. In addition, without the prior consent of the City, which shall not be unreasonably withheld, any purported assignment shall be void and shall terminate the Sponsor’s right to the tax exemption and the City’s acceptance of payments in lieu thereof. Finally, without the prior consent of the City, which shall not be unreasonably withheld, should the Sponsor assign, convey, sell or transfer ownership of the housing development and/or real property described in Section (a)(2) above the tax exemption and acceptance of payments in lieu thereof shall automatically terminate and no longer be of any effect.

(Ord. No. 2209, § 1, 6-4-09; Ord. No. 2218, 9-30-10)

110-57 Taxation of housing projects.

The tax exemption established by Subsection (1) of Sec. 15a of Act 346 of 1966, as amended, for housing projects financed with Federally aided mortgages or housing projects financed with mortgages aided by the Michigan State Housing Development Authority, or an advance or grant from the Michigan State Housing Development Authority, shall not apply to all the housing projects within the boundaries of the City, except that said tax exemption shall be granted to housing projects meeting the requirements set forth in Sec. 11-8.1 of this Division 3, and certified by the Michigan State Housing Development Authority as eligible for exemption in accordance with said Subsection (1) of Sec. 15a of Act 346 of 1966, as amended [M.S.A. Section 16.114(15a)].

(Ord. No. 2204, § 1, 7-31-08)

110-58 Certain low to moderate income citizen housing projects exempt from taxation and subject to payment of a service charge.

A.    Preamble. It is acknowledged that it is a proper public purpose in the State of Michigan to make special provisions to encourage that construction of housing for low to moderate income citizens where such housing does not exist in adequate supply, and that the City Council of the City of Pontiac is aware that a supply of low to moderate income citizen housing exists in the City of Pontiac.

It is therefore acknowledged that is a proper public purpose of the City of Pontiac to provide housing for its low to moderate income citizens in the above referred to location, and to encourage the development of such housing therein, by providing for a service charge in lieu of ad valorem property taxes in accordance with the State Housing Development Authority Act of 1966 (1966 PA 346, as amended, MCLA Section 125.1401 et seq., MSA Section 16.114(1) et seq.). The City of Pontiac is authorized by said Act to establish or change the service charge to be paid in lieu of taxes by any or all classes of housing exempt from said taxation under the Act at any amount it chooses not to exceed the taxes that would be paid but for the Act. It is further acknowledged that such housing for low to moderate income citizens in the above referred to location is a public necessity, and as the City of Pontiac will be benefited and improved by such housing, the encouragement of the same by providing certain ad valorem property tax exemption therefor is a valid public purpose; further, that the continuance of the provisions of this section for tax exemption and the service charge in lieu of taxes during the periods hereinafter contemplated are essential to the determination of economic feasibility of low to moderate income citizen housing developments which are constructed and financed in reliance thereon.

The City of Pontiac acknowledges that Beacon Housing II LDHALP (Lighthouse Community Development) has offered, subject to receipt of a mortgage loan from either the State Housing Development Authority or the U.S. Department of Housing and Urban Development and an allocation of Low Income Housing Tax Credits from the State Housing Development Authority, to conduct a substantial rehabilitation of nine (9) parcels and to complete construction on seven (7), own and operate a housing development located in the Unity Park neighborhood of the City of Pontiac to serve low to moderate income persons, and that the Sponsor has offered to pay the City on account of said development an annual service charge for public services in lieu of all ad valorem property taxes.

B.    Definitions.

1.    Act means the State Housing Development Authority Act, being Public Act 346 of 1966, of the State of Michigan, as amended.

2.    Authority means the Michigan State Housing Development Authority.

3.    Contract rents are defined by the U.S. Department of Housing and Urban Development (HUD) in regulations promulgated pursuant to the U.S. Housing Act of 1937, as amended by the Housing and Community Development Act of 1974.

4.    Elderly means a family where the head of the household is 62 years of age or older or a single person who is 62 years of age or older.

5.    Housing development means a development which contains a significant element of housing for elderly persons and such elements of other housing, commercial, recreational, industrial, communal, ad educational facilities as the Authority determines improve the quality of the development as it relates to housing for elderly persons.

6.    Mortgage loan means a loan to be made by the Authority or the U.S. Department of Housing and Urban Development to the Sponsor for the rehabilitation and permanent financing of the housing development.

7.    Sponsor means Beacon Housing II LDHALP (Lighthouse Community Development) Limited Dividend Housing Development Association Limited Partnership.

8.    Utilities means fuel, water, sanitary sewer, trash, recycling, Internet services and/or electrical service which are paid by the Development.

C.    Class of housing development. It is hereby determined that the class of housing developments to which the tax exemption shall apply and for which a service charge shall be paid in lieu of such taxes shall be multiple family housing for low to moderate income persons located on a parcel of former urban renewal land in the Central Business District on the northwest Corner of Auburn Road and Woodward Avenue, and which are compatible with the Downtown Development Authority Development Plans, and which are financed or assisted pursuant to the Act or by HUD. It is further determined that the low to moderate income citizens housing development to be owned, operated and rehabilitated by Beacon Housing II LDHALP (Lighthouse Community Development) Limited Dividend Housing Development Association Limited Partnership is of this class.

D.    Establishment of Annual Service Charge. The housing development identified as that which will be owned, operated and rehabilitated by the Sponsor, for low to moderate income citizen housing, located in the Unity Park neighborhood, shall be exempt from all ad valorem property taxes from and after sale of such aforementioned property to the Sponsor. The Sponsor has established a Memorandum of Understanding with Job Link services to provide employment and economic opportunities to individuals and business in the City of Pontiac, Michigan. The City acknowledges that the Sponsor has established the economic feasibility of the housing development in reliance upon the enactment and the continuing effect of this section and the qualification of the housing development from exemption from all ad valorem property taxes and a payment in lieu of taxes established herein, and in consideration of the Sponsor’s offer, subject to the receipt of a mortgage loan from the Authority or HUD, to rehabilitate, own and operate said housing development, hereby agrees to accept payment of an annual service charge for the public services in lieu of all ad valorem property taxes. The annual service charge shall be for years one through ten (1—10) equal to four (4%) percent of the difference between the contract rents actually collected and utilities, for years eleven through twenty (11—20) equal to five (5%) percent of the difference between the contract rents actually collected and utilities and thereafter shall be equal to six (6%) percent of the difference between the contract rents actually collected and utilities.

E.    Contractual Effect of Ordinance. Notwithstanding the provisions of Sec. 15(a)(5) of the Act, to the contrary, a contract between the City of Pontiac and the Sponsor with the Authority as a third party beneficiary thereunder, to provide tax exemption and accept payments in lieu of taxes as previously described is effected by enactment of the ordinance codified in this section.

F.    Payment of Service Charge. The service charge in lieu of taxes as determined hereunder shall be payable in the same manner as general property taxes are payable to the City of Pontiac and the annual payment shall be paid on or before the first day of July of each year, and upon collection by the City, shall be distributed to the several units levying ad valorem taxes in the City of Pontiac in the same proportions as prevail for the general property tax, or in accordance with any tax increment financing plan duly adopted and effective pursuant to Act 197 of 1975, as amended.

G.    Duration. This section shall remain in effect and shall not terminate so long as the Authority’s or HUD’s mortgage loan remains outstanding and unpaid or Authority or HUD maintain any interest in the property or 30 years, whichever event is sooner.

(Ord. No. 2204, § 1, 7-31-2008)

110-59 No tax exemption for all or any class of housing projects within the boundaries of the City of Pontiac.

(a)     Preamble. In accordance with the State Housing Development Authority Act of 1966 (Act No. 346 of the Public Acts of Michigan of 1966 (MCLA 125.1401 et seq.; MSA 16.114(1) et seq.), as amended, the city is authorized to provide by ordinance that the tax exemption established in Section 125.1415a(1) of the Act shall not apply to all or any class of housing projects within the city’s boundaries to which Section 125.1415a(1) applies. If the municipality makes that provision, the tax exemption established in Section 125.1415a(1) shall not apply to the class of housing projects designated in the ordinance.

(b)    Definitions. For purposes of this section hereof, 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, MCLA 125.1401 et seq.; MSA 16.114(1) et seq.

AUTHORITY. The Michigan State Housing Development Authority.

AUTHORITY-AIDED MORTGAGE means a mortgage made, held, purchased or assisted by the Authority.

FEDERALLY AIDED MORTGAGE means any of the following:

(i)    A below market interest rate mortgage insured, purchased, or held by the Secretary of the Department of Housing and Urban Development.

(ii)    A market interest rate mortgage insured by the Secretary of the Department of Housing and Urban Development and augmented by a program of rent supplements.

(iii)    A mortgage receiving interest reduction payments provided by the Secretary of the Department of Housing and Urban Development.

(iv)    A mortgage on a housing project to which the Authority allocates low income housing tax credits under Section 22b.

(v)    A mortgage receiving special benefits under other federal law designated specifically to develop low and moderate income housing, consistent with the Act.

HUD. The United States Department of Housing and Urban Development.

MORTGAGE LOAN. The loan made by the Authority to the Sponsor for the construction of or improvement to the premises and permanent financing of the housing development, or a mortgage loan insured by HUD or any other type of federally aided or authority-aided mortgage and/or low income housing tax credits or advance or grant that qualifies for a payment in lieu of taxes pursuant to the Act.

(c)    No exemption from ad valorem property taxes for all or any class of housing projects within the boundaries of the City of Pontiac. The exemption from all ad valorem property taxes imposed by the State of Michigan or by any political subdivision, public body, or taxing district for any housing project owned by a nonprofit housing corporation, consumer housing cooperative, limited dividend housing corporation, mobile home park corporation, or mobile home park association financed with a federally-aided or authority-aided mortgage or advance or grant from the authority as provided in MCLA 125.1415a(1) shall not apply to all or any of those classes of housing projects within the boundaries of the City of Pontiac.

(d)    This section shall not be effective with respect to housing projects for which an exemption has already been granted and a payment in lieu of taxes ordinance was previously adopted by the Pontiac City Council. This section shall not be effective with respect to housing projects for which an exemption has already been granted and a payment in lieu of taxes ordinance was previously adopted by the Pontiac City Council as contained in the Municipal Code of Pontiac, Michigan, Chapter 110 captioned Taxation, Article II entitled Property Tax, Division 2 captioned Tax Exemption, Payment of a Service Charge in Lieu of Taxes.

(e)    This section shall not be effective with respect to annual service fees or payments in lieu of taxes to be paid by the Municipal (Pontiac) Housing Commission or the United States. This section shall not be effective with respect to annual service fees or payments in lieu of taxes to be paid by the Municipal (Pontiac) Housing Commission pursuant to MCLA 125.661a captioned Municipal housing commission; exemption from taxation; annual service fee, payment in lieu of taxes; qualified entity; defined or the United States pursuant to P.A. 1941, No. 318 (see 31 U.S.C.A. § 6901 et seq.)—An Act to provide for the consummation of agreements for and on behalf of the political subdivisions of the state of Michigan, for payments of sums in lieu of taxes by the United States.

(Ord. No. 2223, § 1, 9-20-11)

110-60 Severability.

The sections comprising this division shall be deemed to be severable, and should any section or provision of this division be declared by any court of competent jurisdiction to be unconstitutional or invalid, the same shall not effect the validity of any section or provision of this division other than the section or provision so declared to be unconstitutional or invalid.

(Ord. No. 2113, § 2, 7-13-00; Ord. No. 2127, § 2, 3-14-02; Ord. No. 2143, § 2, 6-27-02; Ord. N0. 2152, § 2, 11-12-02; Ord. No. 2153, § 2, 11-21-02; Ord. No. 2176, § 1, 12-29-04; Ord. No. 2178, § 1, 3-10-05; Ord. No. 2209, § 2, 6-4-09; Ord. No. 2223, § 2, 9-20-11)

110-61 Mortgage loans to finance housing development for low income persons (Colonial Meadows Apartments).

(a)    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 low income persons and families and to encourage the development of such housing by providing for a service charge in lieu of property taxes in accordance with the Act. 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 for low income persons and families is a public necessity, and as the City will be benefited and improved by such housing, the encouragement of the same by providing real estate tax exemption for such housing is a valid public purpose. It is further acknowledged that the continuance of the provisions of this section for tax exemption and the service charge in lieu of all ad valorem taxes during the period contemplated in this section are essential to the determination of economic feasibility of the housing projects that are constructed or rehabilitated with financing extended in reliance on such tax exemption.

The City acknowledges that the sponsor (as defined below) has previously received an allocation under the LIHTC Program by the Michigan State Housing Development Authority to acquire and rehabilitate, own and operate a housing project identified as Colonial Meadows Apartments on certain property located at 1246 E. Walton Blvd. in the City of Pontiac to serve low income persons and families, and that the sponsor has been paying to the City on account of this housing project an annual service charge for public services in lieu of all ad valorem property taxes is outlined in Ordinance No. 1995 and the agreement titled Payment in Lieu of Taxes Agreement between the City of Pontiac Colonial Meadows Limited Dividend Housing Association Limited Partnership (hereinafter “PILOT Agreement”) dated March 9, 2005.

(b)    Definitions.

(1)    Authority means the Michigan State Housing Development Authority.

(2)    Annual shelter rent means the total collections during an agreed annual period from or paid on behalf of all occupants of a housing project representing rent or occupancy charges, exclusive of utilities.

(3)    LIHTC Program means the Low-Income Housing Tax Credit program administered by the Authority under Section 42 of the Internal Revenue Code of 1986, as amended.

(4)    Low income persons and families means persons and families eligible to move into a housing project.

(5)    Mortgage loan means 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 to the sponsor for the construction, rehabilitation, acquisition and/or permanent financing of a housing project, and secured by a mortgage on the housing project.

(6)    Sponsor means Colonial Meadows Limited Dividend Housing Association, Limited Partnership and any entity that receives or assumes a mortgage loan.

(7)    Utilities means charges for gas, electric, water, sanitary sewer and other utilities furnished to the occupants that are paid by the housing project.

(c)    Class of housing projects. It is determined that the class of housing projects to which the tax exemption shall apply and for which a service charge shall be paid in lieu of such taxes shall be housing projects for low income persons and families that are financed with a mortgage loan. It is further determined that Colonial Meadows Apartments is of this class.

(d)    Establishment of annual service charge. The housing project identified as Colonial Meadows Apartments and the property on which it is located is currently exempt from all ad valorem property taxes pursuant to Ordinance No. 1995 and PILOT Agreement. The City 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 the ordinance codified in this section, and the qualification of the housing project for exemption from all ad valorem property taxes and a payment in lieu of taxes as established in this section. Therefore, in consideration of the sponsor’s operation of the housing project, the City agrees to accept payment of an annual service charge for public services in lieu of all ad valorem property taxes. Effective immediately the annual service charge shall be equal to 10 percent of the contract rents actually collected by the housing project during each operating year. This section will replace the PILOT Agreement. If for any reason this section is found to be invalid then the PILOT Agreement would continue to remain in effect.

(e)    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 lieu of taxes, as previously described, is effectuated by enactment of the ordinance codified in this section.

(f)    Limitation on the payment of annual service charge. Notwithstanding subsection (d) of this section, the service charge to be paid each year in lieu of taxes for the part of the housing project that is tax exempt but which is occupied by other than low income persons or families shall be equal to the full amount of the taxes which would be paid on that portion of the housing project if the housing project were not tax exempt.

(g)    Payment of service charge. The annual service charge in lieu of taxes as determined under this section shall be payable in the same manner as general property taxes are payable to the City/Township and distributed to the several units levying the general property tax in the same proportion as prevailed with the general property tax in the previous calendar year. The annual payment for each operating year shall be paid on or before May 31 of the following year. Collection procedures shall be in accordance with the provisions of the General Property Tax Act (1893 PA 206, as amended; MCL 211.1, et seq).

(h)    Duration. This section shall remain in effect and shall not terminate so long as a mortgage loan remains outstanding and unpaid and the housing project remains subject to income and rent restrictions under the LIHTC Program.

(Ord. No. 2342, §§ 2—9, 2-23-17)

110-62 Mortgage loans to finance housing development for low income persons (Newman Court Apartments).

(a)    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 low income persons and families and to encourage the development of such housing by providing for a service charge in lieu of property taxes in accordance with the Act. 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 for low income persons and families is a public necessity, and as the City will be benefited and improved by such housing, the encouragement of the same by providing real estate tax exemption for such housing is a valid public purpose. It is further acknowledged that the continuance of the provisions of this section for tax exemption and the service charge in lieu of all ad valorem taxes during the period contemplated in this section are essential to the determination of economic feasibility of the housing projects that are constructed or rehabilitated with financing extended in reliance on such tax exemption.

The City acknowledges that the sponsor (as defined below) has offered, subject to receipt of an allocation under the LIHTC Program by the Michigan State Housing Development Authority, to acquire and rehabilitate, own and operate a housing project identified as Newman Court Apartments on certain property located at 630 Kettering in the City of Pontiac to serve low income persons and families, and that the sponsor has offered to pay the City on account of this housing project an annual service charge for public services in lieu of all ad valorem property taxes.

(b)    Definitions.

(1)    Authority means the Michigan State Housing Development Authority.

(2)    Contract rents means 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, exclusive of utilities.

(3)    LIHTC Program means the Low-Income Housing Tax Credit program administered by the Authority under Section 42 of the Internal Revenue Code of 1986, as amended.

(4)    Low income persons and families means persons and families eligible to move into a housing project.

(5)    Mortgage loan means 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 to the sponsor for the construction, rehabilitation, acquisition and/or permanent financing of a housing project including LIHTCs, and secured by a mortgage on the housing project.

(6)    Managing member means an entity owned or controlled by MHT Housing, Inc.

(7)    Sponsor means Newman Court Apartments II Limited Dividend Housing Association, LLC and any entity that receives or assumes a mortgage loan.

(8)    Utilities means charges for gas, electric, water, sanitary sewer and other utilities furnished to the occupants that are paid by the housing project.

(c)    Class of housing projects. It is determined that the class of housing projects to which the tax exemption shall apply and for which a service charge shall be paid in lieu of such taxes shall be housing projects for low income persons and families that are financed with a mortgage loan. It is further determined that Newman Court Apartments is of this class.

(d)    Establishment of annual service charge. The housing project identified as Newman Court Apartments and the property on which it is located shall 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 housing project in reliance upon the enactment and continuing effect of the ordinance codified in this section, and the qualification of the housing project for exemption from all ad valorem property taxes and a payment in lieu of taxes as established in this section. Therefore, in consideration of the sponsor’s offer to rehabilitate and operate the housing 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 seven percent of the contract rents actually collected by the housing project during each operating year.

(e)    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 lieu of taxes, as previously described, is effectuated by enactment of the ordinance codified in this section.

(f)    Limitation on the payment of annual service charge. Notwithstanding subsection (d) of this section, the service charge to be paid each year in lieu of taxes for the part of the housing project that is tax exempt but which is occupied by other than low income persons or families shall be equal to the full amount of the taxes which would be paid on that portion of the housing project if the housing project were not tax exempt.

(g)    Payment of service charge. The annual service charge in lieu of taxes as determined under this section shall be payable in the same manner as general property taxes are payable to the City/Township and distributed to the several units levying the general property tax in the same proportion as prevailed with the general property tax in the previous calendar year. The annual payment for each operating year shall be paid on or before May 31 of the following year. Collection procedures shall be in accordance with the provisions of the General Property Tax Act (1893 PA 206, as amended; MCL 211.1, et seq).

(h)    Duration. This section shall remain in effect and shall not terminate so long as a mortgage loan remains outstanding and unpaid or the housing project remains subject to income and rent restrictions under the LIHTC Program. In addition, this section shall expire if the following conditions are not met or corrected within 90 days of written notice of default:

(1)    Managing member sells or ceases to control the property.

(2)    Payment of yearly City registration fees of $25.00 per unit.

(3)    Biennial inspection of the property.

(4)    Creation of a resident council.

(Ord. No. 2343, §§ 2—9, 2-23-17)

110-63 Mortgage loans to finance housing development for low income persons (Oneida Limited Dividend Housing Association, LLC).

(a)    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 low income persons and families and to encourage the development of such housing by providing for a service charge in lieu of property taxes in accordance with the Act. 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 for low income persons and families is a public necessity, and as the City will be benefited and improved by such housing, the encouragement of the same by providing real estate tax exemption for such housing is a valid public purpose. It is further acknowledged that the continuance of the provisions of this section for tax exemption and the service charge in lieu of all ad valorem taxes during the period contemplated in this section are essential to the determination of economic feasibility of the housing projects that are constructed or rehabilitated with financing extended in reliance on such tax exemption.

The City acknowledges that the sponsor (as defined below) has offered, subject to receipt of an allocation under the LIHTC Program by the Michigan State Housing Development Authority, to construct and rehabilitate, own and operate a housing project identified as Oneida Limited Dividend Housing Association, LLC, a Michigan limited liability company on certain property located at 111 Oneida, Pontiac, MI, 48341 in the City to serve low income persons and families, and that the sponsor has offered to pay the City on account of this housing project an annual service charge for public services in lieu of all ad valorem property taxes.

(b)    Definitions.

(1)    Authority means the Michigan State Housing Development Authority.

(2)    Contract rents means 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, exclusive of utilities.

(3)    LIHTC Program means the Low-Income Housing Tax Credit Program administered by the Authority under Section 42 of the Internal Revenue Code of 1986, as amended.

(4)    Low income persons and families means persons and families eligible to move into a housing project.

(5)    Mortgage loan means 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 to the sponsor for the construction, rehabilitation, acquisition and/or permanent financing of a housing project and secured by a mortgage on the housing project.

(6)    Sponsor means Robert Beale, Oneida Limited Dividend Housing Association, LLC, a Michigan limited liability company and/or any entity that receives or assumes a mortgage loan.

(7)    Utilities means charges for gas, electric, water, sanitary sewer and other utilities furnished to the occupants that are paid by the housing project.

(c)    Class of housing projects. It is determined that the class of housing projects to which the tax exemption shall apply and for which a service charge shall be paid in lieu of such taxes shall be housing projects for low income persons and families that are financed with a mortgage loan or low income housing tax credits. It is further determined that Oneida Limited Dividend Housing Association, LLC, a Michigan limited liability company, is of this class.

(d)    Establishment of annual service charge. The housing project identified as Oneida Limited Dividend Housing Association, LLC, a Michigan limited liability company, and the property on which it is located shall 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 housing project in reliance upon the enactment and continuing effect of this section, and the qualification of the housing project for exemption from all ad valorem property taxes and a payment in lieu of taxes as established in this section. Therefore, in consideration of the sponsor’s offer to rehabilitate and operate the housing 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 six percent of the contract rents actually collected by the housing project during each operating year.

(e)    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 lieu of taxes, as previously described, is effectuated by enactment of the ordinance codified in this section.

(f)    Limitation on the payment of annual service charge. Notwithstanding subsection (d) of this section, the service charge to be paid each year in lieu of taxes for the part of the housing project that is tax exempt, but which is occupied by other than low income persons or families, shall be equal to the full amount of the taxes which would be paid on that portion of the housing project if the housing project were not tax exempt.

(g)    Payment of service charge. The annual service charge in lieu of taxes as determined under this section shall be payable in the same manner as general property taxes are payable to the City and distributed to the several units levying the general property tax in the same proportion as prevailed with the general property tax in the same calendar year. The annual payment for each operating year shall be paid on or before July 1 of the same operating year. Collection procedures shall be in accordance with the provisions of the General Property Tax Act (1893 PA 206, as amended; MCL 211.1 et seq.).

(h)    Duration. This section shall remain in effect and shall not terminate so long as a mortgage loan remains outstanding and unpaid and the housing project remains subject to income and rent restrictions under the LIHTC Program.

(Ord. No. 2351, §§ 2—9, 3-27-18)

110-64 Mortgage loans to finance housing development for low income persons (Venture Washington Limited Dividend Housing Association Limited Partnership).

(a)    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 low income persons and families and to encourage the development of such housing by providing for a service charge in lieu of property taxes in accordance with the Act. 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 for low income persons and families is a public necessity, and as the City will be benefited and improved by such housing, the encouragement of the same by providing real estate tax exemption for such housing is a valid public purpose. It is further acknowledged that the continuance of the provisions of this section for tax exemption and the service charge in lieu of all ad valorem taxes during the period contemplated in this section are essential to the determination of economic feasibility of the housing projects that are constructed or rehabilitated with financing extended in reliance on such tax exemption.

The City acknowledges that the sponsor (as defined below) has offered, subject to receipt of an Authority-aided mortgage from the Michigan State Housing Development Authority, to construct, own and operate a housing project identified as Washington Square Apartments on certain property located at: 710 Menominee, Pontiac, Michigan, in the City to serve low income persons and families, and that the sponsor has offered to pay the City on account of this housing project an annual service charge for public services in lieu of all ad valorem property taxes.

(b)    Definitions.

(1)    Authority means the Michigan State Housing Development Authority.

(2)    Annual shelter rent means the total collections during an agreed annual period from or paid on behalf of all occupants of a housing project representing rent or occupancy charges, exclusive of utilities.

(3)    Authority-aided mortgage means any of the following: (a) a mortgage insured, purchased or held by the Secretary of the Department of Housing and Urban Development (“HUD”); (b) a mortgage receiving interest credit reduction payments provided by HUD; (c) a housing development to which the Authority allocates low income housing tax credits under Section 22b of the Act; or (d) a mortgage receiving special benefits under other federal law designated specifically to develop low and moderate income housing, consistent with the Act.

(4)    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 to improve the quality of the development as it relates to housing for persons of low income. For the purposes of this section, housing development means Washington Square Apartments located at 710 Menominee, Pontiac, Michigan, which will occupy the previous Washington Middle School building on the north side of Menominee between Genesee and Chippewa Streets and is included in the current parcel ID number: 14-31-127-001. This description will be further supported by survey information as an attachment when available.

(5)    Low income persons and families means persons and families eligible to move into a housing development.

(6)    Sponsor means Venture Washington Limited Dividend Housing Association Limited Partnership and any entity that receives or assumes an Authority-aided mortgage loan.

(7)    Tax credits means the low income housing tax credits made available by the Authority to the sponsor for rehabilitation of the housing development by the sponsor in accordance with the Low-Income Housing Tax Credit Program administered by the Authority under Section 42 of the Internal Revenue Code of 1986, as amended.

(8)    Utilities means charges for gas, electric, water, sanitary sewer and other utilities furnished to the occupants that are paid by the housing project.

(c)    Class of housing projects. It is determined that the class of housing projects to which the tax exemption shall apply and for which a service charge shall be paid in lieu of such taxes shall be housing projects for low income persons and families that are financed with a federally aided mortgage by the Authority. It is further determined that Washington Square Apartments is of this class.

(d)    Establishment of annual service charge. The housing project identified as Washington Square Apartments and the property on which it is located shall 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 housing project in reliance upon the enactment and continuing effect of this section, and the qualification of the housing project for exemption from all ad valorem property taxes and a payment in lieu of taxes as established in this section. Therefore, in consideration of the sponsor’s offer to construct/rehabilitate and operate the housing 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 federally aided mortgage loan, the annual service charge shall be the greater of $10,000.00 or ten percent of the annual shelter rents actually collected by the housing project during each operating year.

(e)    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 lieu of taxes, as previously described, is effectuated by enactment of the ordinance codified in this section.

(f)    Limitation on the payment of annual service charge. Notwithstanding subsection (d) of this section, the service charge to be paid each year in lieu of taxes for the part of the housing project that is tax exempt but which is occupied by other than low income persons or families shall be equal to the full amount of the taxes which would be paid on that portion of the housing project if the housing project were not tax exempt.

(g)    Payment of service charge. The annual service charge in lieu of taxes as determined under this section shall be payable in the same manner as general property taxes are payable to the City and distributed to the several units levying the general property tax in the same proportion as prevailed with the general property tax in the current calendar year. The annual payment for each operating year shall be paid on or before July 1 of the then current operating year. Collection procedures shall be in accordance with the provisions of the General Properly Tax Act (1893 PA 206, as amended; MCL 211.1 et seq.).

(h)    Duration. This section shall remain in effect for a period of 30 years from the effective date of the ordinance codified in this section.

(Ord. No. 2352, §§ 2—9, 3-27-18)

110-65 Mortgage loans to finance housing development for low income persons (Sanford Arms Apartments).

(a)    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 low income persons and families and to encourage the development of such housing by providing for a service charge in lieu of property taxes in accordance with the Act. 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 for low income persons and families is a public necessity, and as the City will be benefited and improved by such housing, the encouragement of the same by providing real estate tax exemption for such housing is a valid public purpose. It is further acknowledged that the continuance of the provisions of this section for tax exemption and the service charge in lieu of all ad valorem taxes during the period contemplated in this section are essential to the determination of economic feasibility of the housing projects that are constructed or rehabilitated with financing extended in reliance on such tax exemption.

The City acknowledges that the sponsor, Sanford Arms Limited Dividend Housing Association Limited Partnership (as defined below), has previously received an allocation under the LIHTC Program by the Michigan State Housing Development Authority, to acquire and rehabilitate, own and operate a housing project identified as Sanford Arms Apartments on certain property located at: 100-187 Fiddis; 1-139 Leonard Court; and 121-129 N. Sanford in the City of Pontiac to serve low income persons and families, and that the sponsor has been paying to the City on account of this housing project an annual service charge for public services in lieu of all ad valorem property taxes as outlined in Ordinance No. 2110 codified at sections 110-49 and 110-50 and the agreement titled “Payment in Lieu of Taxes Agreement between the City of Pontiac and Sanford Arms Limited Dividend Housing Association Limited Partnership” (hereinafter “PILOT Agreement”) dated July 9, 2000.

(b)    Definitions.

(1)    Authority means the Michigan State Housing Development Authority.

(2)    Annual shelter rent means the total collections during an agreed annual period from or paid on behalf of all occupants of a housing project representing rent or occupancy charges, exclusive of utilities.

(3)    LIHTC Program means the Low-Income Housing Tax Credit Program administered by the Authority under Section 42 of the Internal Revenue Code of 1986, as amended.

(4)    Low income persons and families means persons and families eligible to move into a housing project as defined in the Act.

(5)    Mortgage loan means 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 to the sponsor for the construction, rehabilitation, acquisition and/or permanent financing of a housing project, and secured by a mortgage on the housing project.

(6)    Sponsor means Sanford Arms Limited Dividend Housing Association, Limited Partnership, a Michigan limited partnership, and any successor entity that receives or assumes a mortgage loan, or initiates or assumes the property restrictions under a LIHTC Program regulatory agreement.

(7)    Utilities means charges for gas, electric, water, sanitary sewer and other utilities furnished to the occupants that are paid by the housing project.

(c)    Class of housing projects. It is determined that the class of housing projects to which the tax exemption shall apply and for which a service charge shall be paid in lieu of such taxes shall be housing projects for low income persons and families that are financed with a mortgage loan or regulated in accordance with the LIHTC Program. It is further determined that Sanford Arms Apartments is of this class.

(d)    Establishment of annual service charge. The housing project identified as Sanford Arms Apartments and the property on which it is located is currently exempt from all ad valorem property taxes pursuant to Ordinance 2110 and PILOT Agreement. The City 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 section, and the qualification of the housing project for exemption from all ad valorem property taxes and a payment in lieu of taxes as established in this section. The City agrees to accept payment of an annual service charge for public services in lieu of all ad valorem property taxes. Effective immediately the annual service charge shall be equal to six percent of the contract rents actually collected by the housing project during each operating year. This section will replace the PILOT Agreement. If for any reason this section is found to be invalid then the PILOT Agreement would continue to remain in effect.

(e)    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 lieu of taxes, as previously described, is effectuated by enactment of the ordinance codified in this section.

(f)    Limitation on the payment of annual service charge. Notwithstanding subsection (d) of this section, the service charge to be paid each year in lieu of taxes for the part of the housing project that is tax exempt but which is occupied by other than low income persons or families shall be equal to the full amount of the taxes which would be paid on that portion of the housing project if the housing project were not tax exempt.

(g)    Payment of service charge. The annual service charge in lieu of taxes as determined under this section shall be payable in the same manner as general property taxes are payable to the City/Township and distributed to the several units levying the general property tax in the same proportion as prevailed with the general property tax in the same calendar year. The annual payment for each operating year shall be paid on or before July 1 of the same operating year. Collection procedures shall be in accordance with the provisions of the General Property Tax Act (1893 PA 206, as amended; MCL 211.1 et seq.).

(h)    Duration. This section shall remain in effect and shall not terminate so long as a mortgage loan remains outstanding and unpaid or the housing project remains subject to income and rent restrictions under the LIHTC Program.

(Ord. No. 2353, §§ 2—9, 3-27-18)

110-66110-70 Reserved.


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Charter reference—Tax assessment, § 5.201 et seq.

State law reference—General property tax law, MCL 211.1 et seq.; power of city to provide for taxes, MCL 117.3; city finance generally, MCL 131.1 et seq.