Title
Resolution to Approve a Payment in Lieu of Taxes (PILOT) for the Affordable Housing Project at 2810 Boardwalk
Memorandum
The Ann Arbor Housing Commission (AAHC), through its 501(c)(3), the Ann Arbor Housing Development Corporation (AAHDC), is developing the site at 2810 Boardwalk as affordable housing. The property will be known as The Blondeen, named after local resident and activist Blondeen Munson.
Eisenhower State Land Development Company, LLC (ESLDC) is the co-developer, which is also developing the market-rate portion of the site, known as Arbor South. The affordable housing includes a 183,289 square foot 6-story building that includes approximately 200 1-, 2-, and 3-bedroom apartments with tenant community space and staff offices. All residential units will be affordable to households with incomes at or below 80% of Area Median Income (AMI) with an income average of no more than 60% AMI, as restricted by Low Income Housing Tax Credits (LIHTC) and the City’s PILOT ordinance.
The primary source of funding for affordable housing development is the Low-Income Housing Tax Credit (LIHTC) Program. The Blondeen has received the highest gap financing score by the Michigan State Housing Development Authority (MSHDA) for Round 20, and is preparing the LIHTC application for a firm commitment. LIHTC provides the owner with tax credits that can be claimed annually over the course of ten years in exchange for a minimum of a 30-year commitment of affordability. The AAHC will place a restrictive covenant on the property requiring the property to provide affordable housing.
In order to monetize the LIHTC for development of the project, AAHDC must form a limited dividend housing association, which can be either a limited partnership or limited liability company with an equity investor that will invest capital in exchange for the right to claim the future LIHTC, as required by the IRS. The AAHDC will own the land and will execute a long-term ground lease with Bl...
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