§ 890.02. HOUSING TAX EXEMPTION.

(a)

Title. This section shall be known and cited as the "City of Coopersville 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 (Act No. 346 of the Public Acts of 1966, as amended) ("Act 346"). The City is authorized by Act 346 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 Act 346 by any amount it chooses not to exceed the taxes that would be paid but for Act 346. It is further acknowledged that such housing for persons of low income (as defined in this section) is a public necessity, and as the City will be benefitted and improved by such housing, the encouragement of the same by providing certain ad valorem 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.

The City acknowledges that P.S. Equities, Inc., and/or a limited dividend housing association limited partnership to be formed (each, individually, the "Sponsor") has offered subject to receipt of satisfactory financing, including low-income housing tax credits, administered by the Michigan State Housing Development Authority (the "Authority") to erect, own and operate a low income housing development within the City to serve persons of low income on property owned by the Sponsor, 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 ad valorem taxes.

(c)

Definitions. As used herein, the following words and phrases shall have the following meanings:

(1)

"Authority" means the Michigan State Housing Development Authority.

(2)

"Act 346" means the State Housing Development Authority Act of 1966, being Act No. 346 of the Public Acts of 1966, as amended.

(3)

"Annual shelter rent" means the actual rents collected for the preceding calendar year from all occupants of a housing development representing rent or occupancy charges, exclusive of charges for gas, electricity, heat, water or sewer furnished to the occupants.

(4)

"Housing development" means a development or project which contains a significant element of housing for 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.

(5)

"Low-income" means people eligible to live in the Housing Development as defined in Section 15a of Act 346.

(6)

"Mortgage loan" means financing or low-income tax credits administered by the Authority for the construction of a housing development.

(7)

"Sponsor" means person(s) or entities referenced in subsection (b) and which own a qualified housing development.

(8)

"Utilities" mean fuel, water, sanitary sewer service and/or electric service, which are paid by the housing development for common areas.

(d)

Class of Housing Development. It is determined that the class of housing developments for which the tax exemption shall apply and for which a service charge shall be paid in lieu of ad valorem property taxes shall be of a nature as described in subsection (b) and as otherwise qualified under Act 346.

(e)

Establishment of Annual Service Charge. As provided herein, a housing development shall be exempt from all ad valorem property taxes as provided in Act 346 provided the Sponsor is current with all annual service charges and assessments on the housing development, and has annually filed with the City Assessor before August 1 an audited financial statement for each previous calendar year. 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 qualifications of the housing development for exemption from all ad valorem 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, shall receive payment of an annual service charge for public services in lieu of all ad valorem property taxes for those units occupied by low income persons only. The annual service charge to be paid for that part of a housing development that is occupied by other than low income persons or families shall be equal to the portion of the housing development if the housing development were not tax exempt. The annual service charge for an elderly low income housing development shall be equal to four percent of the annual shelter rents and for other qualified housing developments shall be equal to eight percent of the annual shelter rents.

(f)

Contractual Effect of Section. Notwithstanding the provisions of Section 15(a) of Act 346, 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.

(g)

Payment of Service Charge. The service charge in lieu of taxes as authorized by 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 August 1 of each year. On or before June 15 of each year the Sponsor shall file with the City a certification showing the number of units in the housing development occupied by low-income persons as of December 31 of the previous year. The Sponsor shall also provide, on or before June 15 of each year, documentation and accounting records showing the rent or occupancy charges received from those units from the period of January 1 through April 30. The City shall project those revenues over twelve months and compute the annual service charge payable August 1 based on these projections. The City shall invoice the Sponsor no later that June 1 of each year for the annual service charge due on August 1. On or before January 15 of each year the Sponsor shall file with the City documentation and accounting records showing the rent or occupancy charges received from those units considered to be occupied by low-income persons during the previous year. The City shall then finally determine the annual service charge for the previous year, any additional annual service charge shall be payable by the Sponsor on demand. Any overpayment of service charge shall be promptly refunded to the sponsor by the City.

(h)

Duration. This section shall remain in effect and shall not terminate so long as the Authority has an interest in the property owned by the Sponsor or its successor; provided, that construction of the housing development commences within eighteen months from the effective date of this section and, provided further, the exemption under any circumstances shall not exceed fifty years from the effective date of this section.

(i)

Nonapplication of Tax Exemption. Except as otherwise provided in this section, the property tax exemption available pursuant to Act 346 shall not apply to housing projects financed with a federally-aided, or Authority-aided, mortgages, advances or grants owned by a nonprofit housing corporation, consumer housing cooperative, limited dividend housing corporation, mobile home park corporation or mobile home park association.

(j)

Contractual Effect. Notwithstanding Section 15a of Act 346, a contract between the City and the Sponsor, with the Authority as a third-party beneficiary, to provide tax exemption and accept payment sin lieu of taxes, as previously described is effectuated by enactment of this section.

(k)

Lien. An annual service charge payable pursuant to this section shall be a lien on the property on which the housing development is located and, if delinquent, shall be collected and enforced in the same manner as general property taxes.

(Ord. 284. Passed 12-9-96; Ord. 303. Passed 8-11-97; Ord. 318. Passed 3-22-99; Ord. 335. Passed 4-24-00.)