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| Ordinance | NO. 15-2024 |
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| | | | | | | | | A Proposed Ordinance, #15-2024, amending Chapter 882 "Real Estate Taxation," by amending Section 23, modifying the terms of a Payment in Lieu of Taxes for the Housing Development to be known as "Station Side Lofts." | | | |
| | | | | | | | | BATTLE CREEK, MICHIGAN - 9/3/2024 | | | |
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The City of Battle Creek Ordains:
That Section 1. A proposed Ordinance, #15-2024, amending Chapter 882 "Real Estate Taxation," by amending Section 23, granting a Payment in Lieu of Taxes (PILOT) to the Housing Development to be known as "Station Side Lofts," as attached hereto and made a part hereof.
Section 2. Should any section, clause or phrase of this Ordinance be declared to be invalid, the same shall not affect the validity of the Ordinance as a whole, or any part thereof, other than the part so declared to be invalid.
Section 3. All ordinances or parts of ordinances, in conflict with any of the provisions of this Ordinance, are hereby repealed, saving any prosecution, criminal or administrative appeal pending on, or violation cited on or before the effective date of this ordinance, which shall remain subject to the ordinance provision existing at the time of the alleged violation.
Section 4. Except as otherwise provided by law, this Ordinance shall take effect ten (10) days from the date of its adoption, in accordance with the provisions of Section 4.3(B) of Chapter 4 of the City Charter.
I, Victoria Houser, City Clerk of the City of Battle Creek, hereby certify the above and foregoing is a true and correct copy of an ordinance introduced by the Battle Creek City Commission at a Regular meeting held on September 3, 2024.
Victoria Houser
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| | | | | | | | | Battle Creek City Commission
9/3/2024
Action Summary | | | |
| | | | | | | | | | Staff Member: | William Y. Kim, City Attorney | | Department: | City Attorney |
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| | | | | | | | | SUMMARY
| A Proposed Ordinance, #15-2024, amending Chapter 882 "Real Estate Taxation," by amending Section 23, modifying the terms of a Payment in Lieu of Taxes for the Housing Development to be known as "Station Side Lofts."
| BUDGETARY CONSIDERATIONS
| The City Commission previously approved a PILOT for the Station Side Lofts housing development on 11/21/2023.
A PILOT is essentially a tax exemption for a housing development, with the Developer/Sponsor being responsible for making an annual payment as compensation for services provided to it, such as police and fire protection and other essential services. Under the ordinance presented here, the property owner would be responsible for annual payments of five percent (5%) of the "contract rents" for all income restricted units in the development for fifty (50) years. "Contract rent" means the total collection of all payments from the occupants of the development representing rents or occupancy charges, exclusive of utilities furnished to the occupants by the Developer or Sponsor. The duration of a PILOT may not exceed fifty (50) years.
This proposed PILOT would last the full 50 years, the length of the mortgage, provided the Sponsor continues to meet the statutory requirements to be eligible for the abatement, as well as the requirements set out in the proposed ordinance. After the PILOT expires, the property would be assessed at a normal value and tax rate. |
HISTORY, BACKGROUND and DISCUSSION
| This proposed development, now called Station Side Lofts, is proposed to take place at the former Dolliver building site at 135 N Washington Avenue, near Fire Station 2. According to the Developer, the approximately $15 million development will comprise up to 60 units in an up to 4-story, elevator served, urban-style building. They indicate the project will have a plethora of modern and desirable amenities and will also feature extensive energy-efficient features, including high-performance housing characteristics, sustainable development characteristics, universal design features, and low-impact construction processes. The Developer also indicates the building will feature extensive accessibility features to enable residents to comfortably and securely live independently as they age.
The City purchased this site with ARPA funds, intending to use the property for housing. The Pivotal group as Developer has put together a plan for financing the project and recently formed a Limited Dividend Housing Association (LDHA) LLC to qualify to apply for the federally financed mortgage. The Project will be developed and financed in multiple phases. Anticipated financing sources include Low Income Housing Tax Credit (LIHTC) and a federally financed mortgage. The City Commission previously approved the initial PILOT ordinance on November 21, 2023.
The proposed amendments extend the commencement and completion dates from December 2024 and March 2026 to February 2026 and December 2027, and authorize the City Manager to extend those dates for up to one year in the sole discretion of the City. Extensions for those dates are needed to provide sufficient time for the developer to secure the necessary approvals and credits from the Michigan State Housing Development Authority (MSHDA) for Phases 2 and 3. In addition, the minimum scope of the development is reduced from 45 to 35 due to the projected availability of credits from MSHDA.
| DISCUSSION OF THE ISSUE
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| POSITIONS
| | The City Manager's Office staff supports this Ordinance Amendment. |
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