RESOLUTION NO. RS2016-148
A Resolution authorizing the Metropolitan Development and Housing Agency to negotiate and enter into a PILOT Agreement and accept payments in lieu of ad valorem taxes with respect to a multi-family housing project located at 930 Industrial Drive, known as Old Hickory Towers.
WHEREAS, Tennessee Code Annotated 13-20-104 (“the Act”) authorizes a Metropolitan Government for which a housing authority is created to delegate to such housing authority the authority to negotiate and accept payments in lieu of ad valorem taxes (“In Lieu of Tax Payments”) from the housing authority’s lessees operating low-income housing tax credit property (“LIHTC Property”) upon a finding that such payments are deemed to be in furtherance of the housing authority's public purposes; and
WHEREAS, the Metropolitan Development and Housing Agency (“MDHA”) was created pursuant to state law and is the housing authority for the Metropolitan Government; and
WHEREAS, by Ordinance No. BL2015-1281 (the “LIHTC Ordinance”), the Metropolitan Council (i) authorized MDHA to negotiate and accept In Lieu of Tax Payments from qualified lessees of LIHTC Property owned by MDHA and (ii) approved MDHA’s program for determining qualifications and eligibility for such In Lieu of Tax Payments, a copy of which was attached to the LIHTC Ordinance (the “PILOT Program”); and
WHEREAS, Old Hickory Towers TN, L.P. (“Owner”) has proposed to acquire an existing 217 unit high-rise apartment building known as Old Hickory Towers, located at 930 Industrial Drive (the “Project Site”); and
WHEREAS, Owner has proposed that the Project Site be renovated by Owner and operated as a LIHTC Property (the “Project”); and
WHEREAS, at a meeting held on February 2, 2016, the Board of Commissioners of MDHA approved MDHA’s purchase of the Project Site and authorized the Executive Director of MDHA to take all actions on behalf of MDHA to (i) acquire the Project from Owner, (ii) lease the Project Site and the Project to Owner, (iii) enter into an in lieu of tax agreement with the Owner, a copy of which is attached hereto as Exhibit A (the “PILOT Agreement”), and (iv) submit the PILOT Agreement to the Metropolitan Council for approval as required by the Act and the PILOT Ordinance; and
WHEREAS, those portions of the Project and the Project Site owned by MDHA will be exempt from ad valorem taxation pursuant to Tennessee Code Annotated 67 5-206; and
WHEREAS, the Owner has agreed to make annual PILOT payments payable to the Metropolitan Government in accordance with the attached PILOT Agreement; and
WHEREAS, the value of the project when completed is estimated to be $13,990,003 based on the income of the Project;
WHEREAS, for the purpose of the $2,000,000 annual cap set forth in the PILOT Ordinance, the difference between the annual in lieu of tax payment payable under the PILOT Agreement and the projected real property ad valorem taxes that would otherwise be payable with respect to the Project in the first tax year after completion of the Project is $79,220; and
WHEREAS, MDHA’s entering into the PILOT Agreement to facilitate the Project is in the interest and welfare of the citizens of the Metropolitan Government and will further MDHA’s public purposes by providing financial incentives for construction of affordable housing units through the federally sponsored low income housing tax credit program resulting in a positive impact on the supply of affordable housing in Davidson County; and
WHEREAS, MDHA has submitted the PILOT Agreement to the Metropolitan Council for approval as required by the Act and the PILOT Ordinance.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:
Section 1: That the Council of the Metropolitan Government finds that MDHA’s entering into the PILOT Agreement and acceptance of payments in lieu of ad valorem taxes with respect to the Project Site and the Project is in furtherance of the MDHA’s public purpose of providing for and facilitating an adequate supply affordable housing and in furtherance of the other public purposes described above.
Section 2: That the PILOT Agreement and the Project comply with the PILOT Ordinance and the PILOT Program.
Section 3: The Council of the Metropolitan Government finds that for the purpose of the $2,000,000 annual cap set forth in the PILOT Ordinance, the difference between the annual in lieu of tax payment payable under the attached PILOT Agreement and the projected real property ad valorem taxes that would otherwise be payable with respect to the Project in the first tax year after completion of the Project is $79,220.
Section 4: That the Council of the Metropolitan Government hereby approves the terms of MDHA’s PILOT Agreement with the Owner in the form attached as Exhibit A.
Section 5: That this Resolution shall take effect from and after its adoption, the welfare of The Metropolitan Government of Nashville and Davidson County requiring it.
Sponsored by: Larry Hagar
|Referred to:||Budget & Finance Committee|
|Introduced:||March 15, 2016|
|Adopted:||March 15, 2016|
|Approved:||March 16, 2016|
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