Title
Resolution to Approve a Payment in Lieu of Taxes (PILOT) for the Ann Arbor Housing Commission for the Properties at 106 Packard Road, 727 Miller, 1701 to 1747 Green Road, 2742 Packard, and 800 to 890 South Maple
Memorandum
The Ann Arbor Housing Commission (Commission) is redeveloping the public housing units at 106 Packard Road, 727 Miller, 1701 to 1747 Green Road, 2742 Packard (which is also known as 2702 to 2760 Hikone), and 800 to 890 South Maple under the Federal Housing and Urban Development’s (HUD) Rental Assistance Demonstration (RAD) program. The primary source of funding for affordable housing redevelopment is the Low Income Housing Tax Credit (LIHTC) Program.
After the Commission is approved for LIHTC for each of the properties the Commission applies for, the Commission will find an investor to purchase the tax credits. The Internal Revenue Service (IRS) requires the Commission or an affiliated entity to form a limited partnership or limited liability company with this equity investor in order to finance the redevelopment of these properties with LIHTC. The Commission has requested that City Council approve the transfer of ownership of these properties to the Commission under a separate resolution. The Commission will own the land and the Commission will execute a long-term land lease with the limited partnership or limited liability company for the improvements (buildings).
The Commission or an affiliated entity is applying for LIHTC from the Michigan State Housing Development Authority (MSHDA). These properties are currently tax-exempt and may lose their tax-exempt status when the City transfers ownership of the property to the Commission. However, the City has a PILOT ordinance (Chapter 19, Section 1:651 of Ann Arbor City Code) that applies to all affordable housing projects that meet the requirements of the ordinance. The PILOT is a service charge equal to One Dollar ($1.00) for the assisted units as provided by the Michigan State Housing ...
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