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| Ordinance | NO. 16-2024 |
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| | | | | | | | | A Proposed Ordinance, #16-2024, amending Chapter 882 "Real Estate Taxation," by amending Section 22, modifying the terms of a Payment in Lieu of Taxes to Northern Pines Apartments previously approved on October 17, 2023. | | | |
| | | | | | | | | BATTLE CREEK, MICHIGAN - 9/3/2024 | | | |
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The City of Battle Creek Ordains:
That Section 1. A proposed Ordinance amending Chapter 882 "Real Estate Taxation" by amending section 22 entitled "Exemption for Northern Pines Apartments" 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 All ordinances or parts of ordinances, in conflict with any of the provisions of this Ordinance, are hereby repealed, saving any prosecution, criminal or administrative appeal pending on, or violation cited on or before the effective date of this ordinance, which shall remain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, #16-2024, amending Chapter 882 "Real Estate Taxation," by amending Section 22, modifying the terms of a Payment in Lieu of Taxes to Northern Pines Apartments previously approved on October 17, 2023.
| BUDGETARY CONSIDERATIONS
| The City Commission previously approved a PILOT for the Northern Pines development on October 17, 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 two percent (2%) of the contract rents for all income restricted units, which is anticipated to be all 62 units in the development for fifteen (15) 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 fifteen (15) years, 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
| Please see the attached request to amend the PILOT for Northern Pines Apartments, which proposes construction of a 56-unit Permanent Supportive Housing Community.
Permanent Supportive Housing (PSH) is an intervention that combines affordable housing assistance with voluntary support services to address the needs of people experiencing homelessness. PSH is long-term assistance meant for the most vulnerable homeless populations.
The Michigan Department of Health and Human Services Housing and Homeless Services Division administers various PSH programs throughout the state via contracts with local non-profit organizations.
The Developer/Sponsor, UP Holdings, LLC, proposes to build the Housing Development at an address anticipated to be 240 E Michigan Avenue. The request is for a 2% PILOT, which will be for fifteen years.
The proposed amendments extend the commencement and completion dates from December 2024 and March 2026 to November 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).
The owners anticipate applying for the Low Income Housing Tax Credit (LIHTC) program administered by the Authority under Section 42 of the Internal Revenue Code of 1986, as amended, at the October 1, 2024 rounds. If approved for the LIHTC, the developer anticipates beginning construction in the Fall of 2025 and substantial completion by late 2026 or early 2027.
| DISCUSSION OF THE ISSUE
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| POSITIONS
| | The City Manager and Assistant City Manager support this Ordinance Amendment. |
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