(a)

In accordance with section 15a of Act 346 of the Public Acts of 1966 of the State of Michigan, MSA 16.114(1) et seq., as amended, the property developed by the Madison Senior Citizens Ltd. Development Housing Association on Dequindre Road at 11½ Mile Road, known as the Madison Towers, which development has been financed with a mortgage loan made by the Michigan State Housing Development Authority, is hereby exempt from all property taxes as long as the mortgage loan remains outstanding and unpaid or as long as the authority has any interest in the property, whichever is longest.

(b)

In consideration of the foregoing and in consideration of the offer of North Cranbrook Associates, a Michigan partnership, subject to receipt of a mortgage loan from the authority to erect, own, and operate a housing development within the city known as MSHDA Development No. 535, the city council hereby agrees to accept payment of an annual service charge for public services in lieu of all property taxes to be paid by the mortgagor to the city on or before February 15 ^th of each year, an amount in the sum of $11,750.00 for the proceeding calendar year.

(Code 1958, § 2-1100; Ord. No. 506, § 1, 7-9-73; Ord. No. 585, § 1, 9-27-76; Ord. No. 600, § 1, 6-6-77)

(a)

This section shall hereafter be known and cited as the "City Senior Citizen Tax Exemption Ordinance."

(b)

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 citizens of low 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 Public Act 346, as amended. The city 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 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 persons of low income is a public necessity, and as the city will be benefited and improved by such housing, the encouragement of the same by providing certain real estate tax exemption therefore 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 are essential to the determination of economic feasibility of housing developments which are constructed and financed thereon. The city acknowledges that North Cranbrook Associates, a Michigan limited partnership, hereinafter referred to as the "sponsor," has offered on behalf of a Limited Dividend Housing Association to be formed as a mortgagor and subject to receipt of a mortgage loan from the authority, to erect, own and operate a housing development including a senior citizen service area (hereinafter referred to as "service area") identified as being MSHDA No. 535, on a portion of the property included in a companion Ordinance Number 600 (section 25-1), and on certain other property located in the City of Madison Heights, Oakland County, Michigan, and described as follows:

A parcel of land in the S.E. ¼ of Section 13, T.1N., R.11E, City of Madison Heights, Oakland County, Michigan, described as follows:

Commencing at the E. ¼ corner of Section 13, T.1N., R.11E., and proceeding thence along the E. and W. ¼ line of said Section 13, N. 87° 55'30", 700.00' to the point of beginning of the parcel herein described; thence S. 1° 20'00" W., 485.77'; thence N. 86°41'02" W., 652.08' to a point on the E. line of Mount Royal Sub. "N" (recorded in Liber 35, Plats, Page 5, Oakland County Records); thence along said line, N. 0°54'45" E., 471.71' to a point on the E. and W. ¼ line of said Section 13; thence along said line, S. 87°55'30" E., 655.21' to the point of beginning, containing 7.1806 acres, and being subject to any easements of record;

to serve persons of low income, 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 taxes.

(c)

Definitions, as used in this section:

(1)

Authority means the Michigan State Housing Development Authority.

(2)

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

(3)

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.

(4)

Elderly means elderly and handicapped persons eligible to reside in a development designated as "housing for the elderly," financed or assisted pursuant to Public Act 346 of 1966.

(5)

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

(6)

Sponsor means persons or entities who have applied to the authority for a mortgage loan to finance a housing development.

(d)

Class of housing developments. 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 for elderly persons whose income is substandard, which developments are financed or assisted pursuant to the act. It is further determined that the senior citizen housing development and service area is of this class.

(e)

Establishment of annual service charge. The housing development identified as the senior citizen housing development and service area, and the property on which it shall be constructed shall be exempt from all property taxes from and after the commencement of construction. The city, acknowledging that the sponsor and the authority have established the economic feasibility of the housing development in reliance upon the enactment and continuing effect of this section and the qualification of the housing development for exemption from all property taxes and a payment 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, to construct, own and operate said housing development, hereby agrees to accept payment of an annual service charge for public services in lieu of all property taxes to be assessed from the commencement of amortization of said mortgage loan. The annual service charge shall be equal to $11,750.00.

(f)

Contractual effect of section. 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 thereunder to provide tax exemption and accept payments in lieu thereof, as previously described, is effected by enactment of this section.

(g)

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, except that the annual payment shall be paid on or before February 15th of each year for the proceeding calendar year.

(h)

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 this section [June 6, 1977].

(Ord. No. 601, §§ 1—8, 6-6-77)

Editor's note— Ord. No. 601, §§ 1—8, adopted June 6, 1977, did not expressly amend the Code; inclusion was at the specific request of the city. Codification as § 25-2 was at the discretion of the editor.

Editor's note— Ord. No. 2155, § 1, adopted May 26, 2020, repealed § 25-3, which pertained to purpose; definitions; property tax exemption for Cypress Partners, LLC; annual service charge for public services in lieu of taxes; boundaries and derived from Ord. No. 2142, § 1, adopted August 12, 2019.

(a)

[Purpose.] It is acknowledged that it is a proper public purpose of the State of Michigan and its political subdivisions to provide housing for its citizens of low income persons and families to encourage the development of such housing by providing for a service charge or payment in lieu of property taxes ("PILOT") in accordance with the State Housing Development Authority Act of 1966, MCL 125.1401 et seq., as amended (the "Act"). The city 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 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 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 certain a real estate tax exemption and is therefore, a valid public purpose; further, that the continuance of the provisions of this section for tax exemption and the PILOT during the period hereinafter contemplated are essential to the determination of economic feasibility of housing developments which are constructed and financed thereon. The city acknowledges that National Church Residences, an Ohio non-profit corporation, on behalf of a Michigan Limited Dividend Housing Association to be formed, and any successor in title that receives or assumes a mortgage loan or an allocation under the LIHTC program, referred to as the "sponsor," has offered to renovate, own and operate a housing development including a senior citizen service area (hereinafter referred to as "service area") on property located in the City of Madison Heights, Oakland County, Michigan, which is representative of the parcel identified as Parcel Nos. 44-25-13-426-032 to be known as Madison Manor, 27795 Dequidre Road, Madison Heights, MI, 48071, the legal description of which is described as follows:

T1N, R11E, SEC 13, PART OF SE 1/4 BEG AT PT DIST N 87-55-30 W 785.20 FT FROM E 1/4 COR, TH S 02-04-30 W 58.09 FT, TH ALG CURVE TO LEFT, RAD 179 FT, CHORD BEARS S 50-32-34 W 75.02 FT, DIST OF 75.58 FT, TH N 65-59-14 W 184.64 FT, TH S 24-00-46 W 40 FT, TH N 65-59-14 W 60 FT, TH S 24-00-46 W 110 FT, TH S 65-59-14 E 60.74 FT, TH S 24-00-46 W 60.02 FT, TH S 03-18-58 W 98.14 FT, TH S 86-41-02 E 35 FT, TH S 03-18-58 W 145 FT, TH N 86-41-02 W 255 FT, TH N 00-54-45 E 472.36 FT, TH S 87-55-30 E 540 FT TO BEG 3.09 A 9/19/91 FR 024

(b)

Definitions.

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.

Authority means the Michigan State Housing Development Authority created by the State Housing Development Authority Act of 1966, MCL 125.1401 et seq., as amended.

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.

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.

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

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 for the construction, rehabilitation, acquisition and/or permanent financing of a housing project, and secured by a mortgage on the housing project.

Sponsor means National Church Residences, on behalf of a Michigan Limited Dividend Housing Association to be formed, and any successor in title that receives or assumes a mortgage loan.

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. In accordance with Section 15a of the Act, it is determined that the housing project to be renovated by the sponsor, and the land on which it will be located, which development shall be known as Madison Manor, shall be for low income persons and families that are Elderly and shall be financed by a mortgage loan or assisted by an allocation under the LIHTC program, are hereby exempt from all ad valorem property taxes.

(d)

Establishment of annual service charge. In consideration of the sponsor's offer to renovate, own, and operate a housing project within the city to be known as Madison Manor, subject to receipt of a mortgage loan or an allocation under the LIHTC program, the city hereby agrees to accept payment of an annual service charge for public services, or PILOT, from the sponsor in lieu of all ad valorem property taxes. Subject to receipt of a mortgage loan, the PILOT shall be equal to four percent of the annual shelter rent actually collected during each calendar year.

(e)

Payment of service charge. The annual PILOT as determined hereunder 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 previous calendar year. The annual payment shall be paid on or before April 15th of each year for the preceding calendar 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.).

(f)

Duration. This section will take effect upon receipt of a certification of exemption from the authority, but not until at least 50 percent of the units in the housing project are occupied by persons or families that are elderly and whose household income does not exceed 60 percent of area median income, as determined by HUD. The section shall remain in effect so long as the housing project is subject to the income and rent restrictions of the LIHTC program, or so long as a mortgage loan remains outstanding, whichever is longer. However, notwithstanding the duration of income and rent restrictions of the LIHTC program or any outstanding mortgage loan, the term of this section shall not to exceed 40 years.

(g)

Limitation on the payment of annual service charge. Notwithstanding MCL 125.1415a(5), 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 that are elderly 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.

(h)

Contractual effect of section. Notwithstanding the provisions of MCL 125.1415a(5) to the contrary, a contract between the city and the sponsor with the authority as third party beneficiary under the contract, to provide tax exemption and accept payments in lieu of taxes, as previously described, is effectuated by enactment of this section.

(Ord. No. 2151, §§ 1—8, 3-23-20)