HomeMy WebLinkAboutDCI Presentation Bills 11-26 and 26-10Filed in Clerk's OHice MAR 2 4 2026 Bianca Tirado City Clerk, South Bend, IN
Bill No. 11-26 Ordinance Authorizing PILOT for Heritage Trails South Bend, LP (Substitute) Bill No. 26-10 Resolution Establishing a Local Fund (Affordable Housing Fund) for Receiving PILOT Payments .,lC::~. City of South Bend k.·~1-I d. <-"'-:t· • n zana
Bill No. 11-26 PILOT Ordinance & Agreement Indiana Code 36-1-8-14.3 et seq. • Enables a political subdivision (e.g., the City) to adopt an ordinance requiring payments in lieu of taxes (PILOTs) from qualifying property owners, with the property owner's approval through a PILOT agreement o PILOT amounts are negotiated o PILOTs are administered and billed directly by the political subdivision, not by the county tax system o All PILOT revenue must be deposited into an Affordable Housing Fund and used for eligible housing-related purposes ,!,;_)} Cit~ of South Bend ,zy,~_..:;-",i Indzana • ·,,;g-;;i
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Bill No. 11-26 PILOT Ordinance & Agreement Features of a PILOT • Property owner pays the City a negotiated amount instead of paying traditional property taxes • Similar to a tax abatement except that a PILOT agreement clearly defines the amount of "taxes" the owner will pay; provides certainty to the property owner o The amount of taxes for a tax abatement is not determined until after the assessed value of the property is determined • Supports affordable housing while still ensuring the City receives revenue during the property's LIHTC period • Revenues from a PILOT must be deposited into an Affordable Housing Fund i~'t City of South Bend ti'-£}, I d. '}.,:. --"· n rana ~-~
Bill No. 11-26 PILOT Ordinance & Agreement Project Summary • Affordable residential development on the south side of Chippewa Avenue, west of Main Street • 180 units, income-qualified for households at or below 60% AMI o 1-person household: $36,960 income; 2-person household: $42,240 o 3-person household: $47,520; 4-person household: $52,800 o 5-person household: $57,060; 6-person household: $61,260 • $47.5 million project • Awarded Low-Income Housing Tax Credits by the IHCDA in November 2025 About the Developer • Birge & Held is a national real estate investment, construction, development, and management firm headquartered in Indianapolis City of South Bend Indiana
Bill No. 11-26 PILOT Ordinance & Agreement PILOT Ordinance Summary • Establishes the amounts that the property owner is to pay the City in lieu of traditional property taxes; establishes a 15-year payment schedule aligned with the requirements associated with the LIHTC award • Authorizes and approves the form of PILOT agreement with Heritage Trails, LP (Exhibit B of the ordinance) • Directs the property owner to file the recorded Ordinance and PILOT Agreement with the City Clerk' s Office, the County Assessor' s Office, the Auditor' s Office, and County Treasurer's Office • Authorizes City staff to sign agreements and take other actions related to the PILOT ,g.~ttt,, .. City of South Bend '"'~f ,,~':-,}t?~ Indiana 11;11(•
Bill No. 11-26 PILOT Ordinance & Agreement PILOT Agreement Summary • Establishes that the apartment units are dedicated for households at or below 60% AMI • Requires the property owner to enter into an Extended Use Agreement with the IHCDA • Asserts the PILOT Agreement does not preclude the owner from other statutory obligations • Establishes the PILOT schedule: the amount paid each year over 15 years (due in May and November each year) • City bills the property owner, not the County; funds are held in the Affordable Housing Fund • PILOT payments are treated the same as normal property tax payments o City has full legal authority to pursue collection (Indiana Code 6-1.1-22-1 et seq.) o State code preserves the City's authority to issue penalties and charge interest for late payments, charge collection costs, and employ other enforcement mechanisms similar to standard property taxes (Indiana Code 6-1.1-37-1 et seq.} (!~\ Ci~ of South Bend ~·•t,li' I ndzana l'l.'t;~-~~P
Bill No. 11-26 PILOT Ordinance & Agreement :~$) Ci~ of South Bend :---,.,:,.,, Indzana ~ Pl LOT Agreement Tax Summary: Current • Current assessed value: $173,600 • Current tax liability (Pay 2026): $5,828 Tax Summary: During PILOT • Annual tax liability following completion of the project is approximately $330,000 o Indiana Code 6-1.1-4-41 establishes how LIHTC properties are assessed • Taxes to be paid during the 15-year PILOT: $669,560 • Taxes paid with PILOT o After 10 years: $412,700 ($58,280 with no project) o After 15 years: $669,560 ($87,420 with no project) o After 20 years: Estimated $2,307,700 ($116,560 with no project)
Bill No. 11-26 PILOT Ordinance & Agreement Year Tax Year/Pay Estimated Tax PILOT Estimated Tax Year Liability Payment Savings D28 / Po 2029 $ 332,058 $ 36,000 $ 296,058 2 2029 I Pay 2030 332,735 37,080 295,655 3 2030 I Pay 2031 334,24-r 38,192 296,055 4 2031 / Pay 2032 337,590 39,338 298,252 5 2032 I Pay 2033 340,966 40,518 300,448 6 2033 I Pay 2034 344,375 41,734 302,641 7 2034 I Pay 2035 347,819 42,986 304,833 8 2035 I Pay 2036 351,297 44,276 307,021 9 2036 I Pay 2037 354,810 45,604 309,206 10 2037 I Pay 2038 358,358 46,972 311,386 11 2038 / Pay 2039 361,942 48,381 313,561 12 2039 I Pay 2040 365,561 49,832 315,729 13 2040 I Pay 2041 369,217 51,327 317,890 14 2041 / Pay 2042 372,909 52,867 320,042 15 2042 I Pay 2043 376,638 54,453 322,185 (i~i1i City of South Bend -----·-..... -----·--~ -,,-s-,.;ff-:?1 Indiana ❖-,,~,':'..,¢
Bill No. 11-26 PILOT Ordinance & Agreement ,,i~1l City of South Bend la,·.,..:.~, I d" -:-.__,,,:/-:" n rana --Heritage Trails and City Support • Pl LOT Agreement and SOC waiver • 10% of the total project cost • No other City support
Bill No. 26-10 Affordable Housing Fund • Bill No. 26-10 would establish an Affordable Housing Fund o State Code establishes that PILOT payments muse be deposited into an Affordable Housing Fund • Department of Community Investment would administer the fund • Indiana Code 5-20-5-15.5: Establishes the statutory guidelines for a local Affordable Housing Fund, including the use of funds o Housing support for households at or below 80% of the county median income. o Financial assistance, includes support for residents and/or for the development of affordable housing for income-eligible households o Technical assistance to nonprofit affordable-housing developers o Administrative expenses associated with operating the Affordable Housing Fund t~\i City of South Bend '¾~A Indiana ....... Jf:jf..""<?•'