Title
Resolution to Approve a Tax Exemption for the Ann Arbor Housing Development Corporation's Affordable Housing Project at 121 E Catherine and Payment of a Service Charge in Lieu of Taxes
Memorandum
The Ann Arbor Housing Commission (AAHC), through its 501(c)(3), the Ann Arbor Housing Development Corporation (AAHDC), is developing the City-owned parcel at 121 E. Catherine as affordable housing. The AAHC selected Avalon Housing as a co-developer, and on-site tenant services provider. The project includes a ~64,000 square foot L-shaped, 6-story mixed-use building that includes approximately 62 1-bedroom apartments and 1 2-bedroom apartment with tenant community space, staff offices, and shared laundry. All the residential units will be affordable to households with incomes at or below 60% of Area Median Income (AMI). Half of the apartments (32) will be targeted as supportive housing for households with incomes at or below 50% AMI.
The primary source of funding for affordable housing development is the Low-Income Housing Tax Credit (LIHTC) Program. The Internal Revenue Service (IRS) requires the AAHDC to form a limited partnership or limited liability company with an equity investor to finance the development of these properties with LIHTC. The AAHDC has requested that City Council approve the transfer of ownership of this property to the AAHDC under a separate resolution. The AAHDC will own the land and the AAHDC will execute a long-term ground lease with the limited partnership or limited liability company for the improvements (buildings).
The AAHDC or an affiliated entity is applying for LIHTC from the Michigan State Housing Development Authority (MSHDA). The property is currently tax-exempt as a publicly-owned property. The City's Tax Exemption for Housing Projects' ordinance (Chapter 19, Section 1:651 of Ann Arbor City Code) applies to all affordable housing projects that meet the requirements of the ordinance. MSHDA requires the adoption of a separat...
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