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| Ordinance | NO. 17-2024 |
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| | | | | | | | | A Proposed Ordinance, #17-2024, amending Chapter 882 "Real Estate Taxation," by amending Section 24, modifying the terms of a Payment in Lieu of Taxes for the Housing Development to be known as "Manchester Place." | | | |
| | | | | | | | | BATTLE CREEK, MICHIGAN - 9/3/2024 | | | |
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The City of Battle Creek Ordains:
That Section 1. An Ordinance amending Chapter 882 "Real Estate Taxation," by amending Section 24, modifying the terms of a Payment in Lieu of Taxes (PILOT) for the Housing Development to be known as "Manchester Place" 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 All ordinances or parts of ordinances, in conflict with any of the provisions of this Ordinance, are hereby repealed, saving any prosecution, criminal or administrative appeal pending on, or violation cited on or before the effective date of this ordinance, which shall remain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, #17-2024, amending Chapter 882 "Real Estate Taxation," by amending Section 24, modifying the terms of a Payment in Lieu of Taxes for the Housing Development to be known as "Manchester Place."
| BUDGETARY CONSIDERATIONS
| 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, "Manchester Place," is planned to take place at the former Bronson Behavioral Health Facility, commonly referred to as the "Fieldstone Site" at 165 N Washington Avenue. The subject site consists of 8.81 acres. According to the Developer, the development will consist of three, 20-unit, two-story walk up apartment buildings that are non-age restricted. The residential units will include a mixture of one, two, and three-bedroom unit types that range in size from approximately 800 - 1,385 square feet.
Other site features include shared open spaces, a leasing office, central parcel pickup, a community clubroom, and a fitness center. The overall objective is to expand the affordable housing stock in the City of Battle Creek while also aiding in the growth of the Washington Heights neighborhood.
This parcel is currently owned by Bronson Battle Creek Hospital, and the Developer is planning to purchase the property from them.
The Horizon group as Developer has put together a plan to develop and finance it through the use of Low Income Housing Tax Credit (LIHTC) through the Michigan State Housing Development Authority (MSHDA). It will be financed using 9% LIHTC, conventional debt and the PILOT.
The Project will be developed and financed in multiple phases. The Developer is applying for the LIHTC in the October 1, 2024 application round. If awarded LIHTC, the goal is to commence construction in the fall of 2025, and they anticipate construction will last for 12 months. At the time of submitting the PILOT request, the Limited Dividend Housing Association (LDHA) LLC had not been formed. The request letter is attached.
The proposed amendments extend the commencement and completion dates from November 2024 and December 2025 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 MSHDA.
| DISCUSSION OF THE ISSUE
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| POSITIONS
| | City Manager's Office staff supports the Introduction of this Ordinance Amendment. |
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