11283-26 Ordinance Authorizing Payments in Lieu of Taxes for Western Avenue I, LLC

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SUBSTITUTE BILL NO. 31-26 ORDINANCE NO. 11283-26 AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING PAYMENTS IN LIEU OF TAXES FOR WESTERN AVENUE I, LLC STATEMENT OF PURPOSE AND INTENT The City of South Bend, Indiana(the"City")is a duly organized municipal corporation and political subdivision under the laws of the State of Indiana, and the Common Council of the City is the legislative body of the City (the"Common Council"). Western Avenue I,LLC,an Indiana limited liability company(the"Owner")has confirmed to the City that the Owner will develop, own, and operate an affordable rental apartment facility on the+/- 8.81 acre site located at 628 West Western Avenue, South Bend, Indiana and identified as Parcel Number 71-08-11-426-001.000-026 in the St. Joseph County Assessor's records which real estate is legally described on Exhibit A attached hereto (the "Property"), and known as the Western Avenue Transformation District (the"Project"). The Project will be developed, constructed, and operated for the purpose of providing housing to income eligible persons under the federal low-income housing tax credit program in 26 U.S.C. § 42 and will be subject to an extended use agreement under 26 U.S.C. § 42 (the"Extended Use Agreement")as administered by the Indiana Housing and Community Development Authority ("IHCDA") for a period of at least fifteen(15)years. Pursuant to the Extended Use Agreement, the Project will have 110 units available for rent to residents whose incomes will be at 60% or less of the applicable area median income and 46 unrestricted units. Additionally, pursuant to the Extended Use Agreement, the affordable units within the Project will be limited to charging rents as determined in accordance with the IHCDA Extended Use Agreement and, from-time to time, by the United States Department of Housing and Urban Development(the "Restricted Rents"). The Owner qualifies as a "property owner" under I.C. 36-1-8-14.3(d) and the Owner has agreed to make certain payments in lieu of taxes (each payment, a"PILOT", and collectively, the "PILOTs"), and the City and Owner desire to document that agreement in a written agreement(the "PILOT Agreement"). The City is authorized to enter into the PILOT Agreement pursuant to I.C. 36-1-8-14.3 et seq.,and pursuant to I.C. 36-1-8-14.3(e),subject to the approval of a property owner,the governing body of a political subdivision may adopt an ordinance to require the property owner to pay PILOTs at times set forth in the ordinance with respect to property that is subject to an exemption under I.C. 6-1.1-10-16.7. Pursuant to I.C. 6-1.1-10-16.7, for assessment dates after December 31, 2021, all or part of a property is exempt from property taxation if the owner of the property has entered into an agreement to make payments in lieu of taxes under I.C. 36-1-8-14.3. The PILOTs must be calculated so that the PILOTs are in an amount that is: (1) agreed upon by the property owner and the governing body of the political subdivision; (2) a percentage of the property taxes that would have been levied by the governing body for the political subdivision upon the property if the property were not subject to an exemption from property taxation; and (3) not more than the amount of property taxes that would have been levied by the governing body for the political subdivision upon the property if the property were not subject to an exemption from property taxation.