By By JOHN EBY / Dowagiac Daily News
Vineyard Place apartments wants the same deal given to Eagle's Wood.
The city recently received a petition requesting a similar arrangement granting payments in lieu of taxes (PILOT).
These agreements intended to encourage new community development as a requirement for financing through MSHDA, the Michigan State Housing Development Authority.
"The Vineyard request represents something altogether different," City Manager Bill Nelson apprised City Council Monday night. "In this case, the request is to simply make them tax-exempt and provide them with a PILOT agreement.
"Even if a PILOT agreement is negotiated at the state maximum (of 12 percent of gross rent revenues), this would represent an approximately $80,000 annual reduction in revenues to the city and other taxing jurisdictions," Nelson stated.
City Attorney Mark Westrate, who was not present, had recommended repealing the original ordinance and adopting a new ordinance denying the exemption request of Dowagiac Limited Dividend Housing Association, which owns Vineyard Place, because it was not a condition of construction of the project and because the project has been in place for more than 20 years.
The ordinance given first reading Nov. 27 further specifies that the revision has no impact on existing tax exemptions that have already been granted.
"This development's financing was not conditioned upon (PILOT)," Nelson said. "With that in mind, it's my recommendation, and Mr. Westrate's recommendation, that we adopt an ordinance indicating that in keeping with your discretionary authority under state law, the previous ordinance adopted to develop Eagle's Wood does not apply to Dowagiac Limited Dividend Housing Association.
"We'll have second reading on this at the next meeting (Dec. 11), but that's the crux of the issue," Nelson said. "If they were to initiate new construction and that was a condition of the MSHDA financing, as we have with Eagle's Wood and Eagle's Trace, at that point I think we would recommend that. It's a totally different set of circumstances."
Mayor Pro Tem Wayne Comstock made the motion, supported by First Ward member Donna O'Konski.