Title
Resolution to Approve a Payment in Lieu of Taxes (PILOT) for the Affordable Housing Project at 350 South Fifth Avenue
Memorandum
The Ann Arbor Housing Commission (AAHC), through its 501(c)(3), the Ann Arbor Housing Development Corporation (AAHDC), is developing the previously City-owned parcel at 350 S. Fifth Ave. as affordable housing.
The AAHC selected Related Midwest through a Request for Proposal (RFP) process, as a co-developer. The project includes a 329,242 square foot 20-story mixed-use building that includes approximately 330 1- and 2-bedroom apartments with tenant community space and staff offices, and approximately 6,500 square feet of commercial space. 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. At least 110 of the 330 units (33%) will be targeted at households earning less than 30% of the Area Median Income and will be directly supported by the Ann Arbor Housing Commission ("AAHC") through both project-based rental vouchers and supportive services.
The primary source of funding for affordable housing development is the Low-Income Housing Tax Credit (LIHTC) Program. 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. In order to monetize the LIHTC for development of the project, AAHDC must form 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.
The AAHDC will own the land and will execute a long-term ground lease with Fifth Avenue MI Limited Dividend Housing Association LLC; the limited liability company created for the improvements (buildings). The AAHDC formed a single-asset entity called AAHDC Fifth Avenue LLC that will ...
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