HomeMy WebLinkAbout11-448OCTOBER 11, 2011 11 -448 RESOLUTION
(CARRIED 7 -0 LOST LAID OVER WITHDRAWN )
PURPOSE: APPROVE SETTLEMENT AGREEMENT WITH VILLA ST.
THERESA, INC.
INITIATED BY: LEGAL DEPARTMENT
BE IT RESOLVED by the Common Council of the City of Oshkosh that the attached
Settlement Agreement with Villa St. Theresa, Inc. related to the assessment of property
located at 1255 West 18 Avenue, is hereby approved and the proper City officials are
hereby authorized to execute and deliver the agreement in substantially the same form as
attached hereto, any changes in the execution copy being deemed approved by their
respective signatures, and said City officials are authorized and directed to take those
steps necessary to implement the terms and conditions of the Agreement.
Money for this purpose is hereby appropriated from:
Acct. No. 100 - 0908 - 64649 -00000 Tax Refund Account
CITY HALL
215 Church Avenue
PO. Box 1130
Oshkosh , Wisconsin
903 -1130 City of Oshkosh
(4111
O.IHKOJH
TO: Honorable Mayor and Members of the Common Council
FROM: Lynn A. Lorenson, City Attorney
DATE: October 6, 2011
RE: Resolution to Approve Settlement with Villa St. Theresa
BACKGROUND
In 2009 the Wisconsin Legislature passed legislation which specifically exempted low -
income housing from real property taxes. Prior to this legislation, in order to be
considered exempt low- income housing was required to meet the requirements related
to a "benevolent association" which presented a much more difficult burden for low -
income housing projects to meet. Under the new legislation a benevolent nonprofit
entity that uses its property to provide low- income housing is exempt from general
property taxes.
Villa St. Theresa purchased property located at 1255 West 18 Avenue in the City of
Oshkosh in December of 1994. The property consists of just over four acres of land
and is operated as elderly housing.
For tax years 2009 and 2010 Villa St. Theresa filed lawsuits against the City for refund
of unlawful taxes related to property claiming that the property fit one of several
exemptions from property taxes under the Wisconsin Statutes. For 2011 Villa St.
Theresa has filed a Property Tax Exemption Request for the same property.
Based upon the Assessor's initial review of the property, the Assessor was determined
that the information provided did not provide sufficient information to support Villa St.
Theresa's request for a property tax exemption. Through the course of litigation of this
matter, Villa St. Theresa was able to provide additional information and through
discussion between the parties an agreement has been reached that will resolve all of
the outstanding issues related to property taxation for this property.
ANALYSIS
The proposed agreement provides that the City will recognize the property as a low-
income housing project as that term is defined in the Wisconsin Statutes so long as Villa
St. Theresa maintains the current use of the property, provides the City the necessary
information to determine that it continues to meet the statutory requirements, and there
is no amendment to the law which would affect the exemption of this property. Under
this agreement, only those units that are occupied by low- income individuals or are
vacant and may be leased only to low- income individuals will be exempt from property
tax assessment. The property will be taxed in part for any units not occupied or
available for lease only to low- income persons.
Villa St. Theresa will dismiss all claims and lawsuits against the City related to this
matter and will waive any interest on refund amounts due to it.
FISCAL IMPACT
Based upon the classification of a portion of the property as exempt from property taxes,
the City will be required to refund a portion of the property taxes paid for 2009 and 2010.
The refund amount will be approximately $74,997.00 for the two years. Pursuant to the
terms of the Agreement, no interest will be added to this refund amount.
RECOMMENDATION
Staff recommends that the Agreement be approved.
Res•ectfully Submitted, Approved:
% °
. Lorenson Mark A. Rohloff
City Attorney City Manager
SETTLEMENT AGREEMENT SFP a 20
This Settlement Agreement (the "Agreement ") is entered into by and
between the City of Oshkosh (the "City ") and Villa St. Theresa, Inc. ( "Villa ").
RECITALS
A. On January 25, 2010, Villa filed a Claim for Refund of Unlawful
Taxes — Wisconsin Statutes § 74.35 (the "2009 Refund Claim ") with the City for a
refund of 2009 property taxes paid in 2009 for its property located at 1255 West
18th Avenue, Oshkosh, Wisconsin, real estate tax parcel number 1307310300 (the
"Property ").
B. The City denied the 2009 Refund Claim and, on May 14, 2010, Villa
filed a lawsuit against the City in Winnebago County Circuit Court, Case No 10-
CV -984, challenging the City's denial of the 2009 Refund Claim.
C. On January 28, 2011, Villa filed a Claim for Refund of Unlawful
Taxes — Wisconsin Statutes § 74.35 (the "2010 Refund Claim ") with the City for a
refund of 2010 property taxes paid in 2010 for the Property.
D. The City failed to take action on the 2010 Refund Claim within
ninety days after the 2010 Refund Claim was served such that the 2010 Refund
Claim was deemed disallowed as of April 28, 2011 and, on July 26, 2011, Villa
filed a lawsuit against the City in Winnebago County Circuit Court, Case No. 11-
CV -1173, challenging the City's deemed denial of the 2010 Refund Claim.
E. On February 25, 2011, Villa filed a Property Tax Exemption
Request and a Low - Income Housing Exemption Property Owner's Certification of
Occupancy with the City pursuant to Wisconsin Statutes § 70.11 claiming
exemption from property taxes for the Property for 2011.
F. The parties desire to resolve all current and potential claims against
each other related to the exemption from property taxes of the Property without
the necessity of further proceedings.
G. The parties have agreed to a full and final settlement of all disputed
issues related to, arising out of, or in connection with the claims for exemption
from property taxes of the Property.
AGREEMENT
In consideration of the above recitals, covenants and in exchange for the
release of claims contained herein and solely for purposes of settlement of the
matters identified herein, the parties hereby agree as follows:
1. Incorporation of Recitals. The above Recitals are incorporated and
made part of this Agreement between the parties.
2. Resolution of Disputed Claims.
A. The City agrees to recognize the Property as a low- income
housing project as that term is defined in Wisconsin Statutes
§ 70.11(4a) ( "Low- Income Housing Project ") for the years
2009, 2010 and 2011. The City further agrees to continue to
recognize the Property as a Low - Income Housing Project for
each and all years after 2011, provided that: (i) the Property
satisfies the mathematical requirements to qualify as a Low -
Income Housing Project set forth in Wisconsin Statutes
§ 70.11(4a)(c), as will be confirmed by Villa's annual filing of
a Property Owner's Certification of Occupancy with the City
assessor; (ii) there is no change in the use of the Property by
Villa; and (iii) there is no amendment or revision to the
Wisconsin Statutes or the Wisconsin Property Assessment
Manual regarding the criteria or application of the Low -
Income Housing exemption that would specifically change
the exempt status of the Property. In the event that the
Property does not satisfy said mathematical requirements, or
there is a change in the use of the Property by Villa, or there
is such amendment to the Wisconsin Statutes or Wisconsin
Property Assessment Manual, the City reserves the right to
review the tax exempt status of the Property commencing
with the year in which such event occurs.
B. The City agrees to recognize as exempt from property taxes,
for the years 2009 and 2010, all units in the Property that
were occupied by a low- income individual, as that term is
defined in Wisconsin Statutes § 70.11(4a), ( "Low- Income
Individual ") as of January 1 of each respective year, and all
units in the Property that were vacant as of January I of each
respective year and were rented to a Low - Income Individual
during such respective year, and all common space, and land.
C. The City agrees to pay a refund of taxes to Villa in the
amount of $36,623.01 of the 2009 taxes on the Property paid
by Villa.
D. The City agrees to pay a refund of taxes to Villa in the
amount of $38,373.97 of the 2010 taxes on the Property paid
by Villa.
E. For the year 2011, the City agrees to exempt from property
taxes all units occupied by a Low - Income Individual as of
January 1, 2011, and all units that are vacant as of January 1,
2011 and were only available for rent to Low - Income
Individuals, and all common space, and land. The City agrees
to record on the 2011 assessment roll that the Property is
exempt from taxation as a Low - Income Housing Project. The
parties further agree that the Property will be taxed -in -part for
2011 on a total assessed value of the six taxable units in the
Property of $218,400.
F. For 2012 and subsequent years, subject to paragraph 2A of
this Agreement, the City agrees to record on the property tax
roll that the Property is exempt -in -part from property taxes as
a Low - Income Housing Project and agrees to only assess the
Property as taxed -in -part as follows:
(i) The City will exempt all units that are occupied by
Low - Income Individuals on January 1 of the relevant
tax year, and all units that are vacant on January 1 of
the relevant tax year and are available for rent solely to
Low- Income Individuals, and all common space, and
land.
(ii) The City will tax all units that are occupied by
individuals who do not qualify as Low - Income
Individuals on January 1 of the relevant year, or if
vacant on January 1 of the relevant year, are not
available for rent solely to Low - Income Individuals.
(iii) The City will calculate a value for each unit in the
Property that is subject to tax as provided in the
Wisconsin Property Assessment Manual. Villa
reserves the right to challenge the City's determination
of the value of the taxable units as provided in
paragraph 3 of this Agreement.
3
(iv) To establish that vacant units are only available to
Low - Income Individuals, Villa agrees to enter into a
Low - Income Housing Certification Agreement with
the City in the form attached hereto as Exhibit A.
(v) Villa agrees to obtain and make available to the City
upon request certifications of the annual income of the
tenants of the Property in the form of the Tenant
Income Certification attached hereto as Exhibit A -1.
G. Villa agrees to accept the refund of taxes as provided in this
Agreement in full settlement of all of its claims against the
City related to the exemption from property taxes for the
years 2009, 2010 and 2011, as well as its 2009 Refund Claim
and 2010 Refund Claim.
H. Villa agrees to waive its claims for interest on the tax refund
to which it would be entitled under Wisconsin Statutes
§ 74.35 for its 2009 Refund Claim and 2010 Refund Claim.
I. Villa agrees to dismiss its Complaint in Winnebago County
Circuit Court, Case No. 10 -CV -984, with prejudice.
J. Villa agrees to dismiss its Complaint in Winnebago County
Circuit Court, Case No. 11 -CV -1173, with prejudice.
K. The City agrees to pay all refund amounts due to Villa
pursuant to this Agreement within thirty (30) days of
execution of this Agreement by all of the parties.
Notwithstanding paragraph 211 of this Agreement, if the City
does not make timely payment of the refund amounts due to
Villa pursuant to this Agreement, the City agrees to pay
interest as provided in Wisconsin Statutes § 74.35
commencing with the date the 2009 Refund Claim or the
2010 Refund Claim, as the case may be, was filed with the
City and ending on the date the refund amounts are paid to
Villa. Time is of the essence as to the payment of the refund
amounts.
3. Notification and Right to Challenge Value of Taxable Units.
Commencing for the year 2012 and all subsequent years in which the
City determines a value of taxable units in the Property, the City
shall give notice to Villa of its determination of the assessed value of
the taxable units for such year no later than the date on which the
City notifies property owners of assessed values under Wisconsin
Statutes § 70.365. In the event that Villa does not agree with the
City's determination of the assessed value of the taxable units, Villa
shall have the same rights to contest the City Assessor's assessed
value as an owner of fully taxable property has to challenge assessed
values under Wisconsin law.
4. Retained Rights. The parties agree that Villa retains the right to
apply for exemption from property taxes for the years 2012 and
thereafter under any provision of the Wisconsin Statutes for which it
may qualify for exemption. This Agreement shall not be construed
in any way to limit Villa's right to claim an exemption solely as a
Low - Income Housing Project. In the event that Villa files for such
other or additional exemption, the City retains its rights to review
such application for exemption as provided in Wisconsin law.
5. Mutual Covenant Not to Sue. The parties represent that, other than
the complaints and claims identified in this Agreement, they have
not filed any complaints or claims with any governmental agency or
court relating to the 2009, 2010 or 2011 property taxes on the
Property. The parties agree not to file any additional claim or
lawsuit with any court or governmental agency asserting any claim
against the other party arising out of the 2009, 2010 or 2011
exemption from property taxes of the Property that may have
occurred prior to the date this Agreement is executed.
6. Dismissal of Lawsuits. Upon payment of the refund amounts
identified in paragraphs 2C and 2D, the parties agree to execute a
Stipulation and Order for Dismissal of Winnebago County Circuit
Court Case Nos. 10 -CV -984 and 11 -CV -1173, with prejudice and
without costs to either party.
7. Terms of the Agreement Survive. The mutual release of claims and
waiver of rights herein does not include any claim or right that may
arise after the date of this Agreement nor does it include a release or
waiver of the right to institute and pursue legal action for the sole
purpose of enforcing the provisions of this Agreement. This
Agreement shall not be interpreted in any way to preclude the parties
from enforcing the terms of this Agreement. If any party breaches
this Agreement, the breaching party shall pay all costs incurred by
the other party, including all expenses and reasonable attorneys' fees,
in enforcing the terms of this Agreement.
5
8. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties and their respective successors, and
assigns. The parties' signatures below affirm that they have read and
understood the provisions of this Agreement and the parties agree to
comply with all terms hereof.
9. Authorized Signatories. Villa represents and warrants to the City
that the undersigned individual is authorized to enter into and
execute this Agreement on behalf of Villa. The City represents and
warrants to Villa that the undersigned officials are authorized to
enter into and to execute this Agreement on behalf of the City.
10. Entire Agreement. This Agreement constitutes the entire agreement -
between the parties and contains all the agreements between them
with respect to the subject matter hereof. It supersedes any and all
other agreements, representations or contracts, either oral or written,
between the parties with respect to the subject matter hereof.
11. Governing Law. This Agreement shall be construed and governed
by the laws of the State of Wisconsin.
12. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original and all of which shall be
deemed one and the same instrument. Signatures sent via facsimile
or electronic transmission shall be deemed original signatures for
purposes of creating a binding agreement.
CITY OF OSHKOSH VILLA ST. THERESA, INC.
BY: 13Y:
Mark A. Rohloff Barrett S. Zuckerman
Its: City Manager Its: President
Date:
BY:
Pamela R. Ubrig
Its: City Clerk
BY:
Lynn A. Lorenson
Its: City Attorney
Date:
RE1NHART46770122 2
EXHIBIT A
LOW - INCOME HOUSING CERTIFICATION AGREEMENT
LOW INCOME HOUSING CERTIFICATION AGREEMENT
This Low Income Housing Certification Agreement (the "Certification
Agreement ") is made and entered into by and between the City of Oshkosh (the
"City ") and Villa St. Theresa, Inc. ( "Villa ") effective , 2011.
RECITALS
A. The City and Villa have entered into an agreement (the "Settlement
Agreement ") dated , 2011 in full and final settlement of all disputed
issues related to, arising out of, or in connection with the exemption from property
taxes of Villa's property located at 1255 West 18th Avenue, Oshkosh, Wisconsin,
tax parcel number 1307310300 (the "Property ").
B. Villa's mission as a tax exempt organization is to provide housing
for low- income elderly persons in the City and Villa has determined that it will
adopt a formal written policy to put forth its best efforts to restrict rentals of units
in the Property solely to "low- income individuals" as such term is defined in
Wisconsin Statutes § 70.11(4a) ( "Low- Income Individuals ").
C. As provided in said Settlement Agreement, and as a supplement to
said Settlement Agreement, Villa and the City have agreed to enter into this
Certification Agreement whereby Villa will certify to the City that it has adopted a
written policy and is providing housing solely to Low - Income Individuals at the
Property.
AGREEMENT
In consideration of the above recitals, the terms and conditions of the
Settlement Agreement between the parties and the mutual covenants below, the
parties hereby agree as follows:
1. Incorporation of Recitals. The above Recitals are incorporated and
made part of this Agreement between the parties.
2. Board of Directors Resolution. Villa shall adopt a Resolution
wherein Villa's Board of Directors sets forth its policy to provide affordable
housing by holding for rental units at the Property solely for Low- Income
Individuals and to restrict the rental of any units at the Property that are vacant or
become vacant beginning with the date of this Agreement and thereafter solely to
Low- Income Individuals. Villa further agrees to provide a certified copy of said
Resolution to the City within 15 days of the date of this Agreement. In the event
that Villa modifies its policy, Villa agrees to promptly notify the City in writing
of any modification of its policy.
3. Annual Tenant Certification. Villa agrees to obtain from each
tenant of the Property a certification of the tenant's annual income commencing as
of January 1, 2012 and as of January 1 of each year thereafter. The Tenant
Certifications shall be in the form attached hereto as Exhibit A -1 (the "Tenant
Certification ") and are in addition to all other documents required by statute be
filed by Villa with the City Assessor. Villa shall retain the annual Tenant
Certifications for a minimum period of three years and shall allow the City
Assessor or the City Attorney to inspect said Tenant Certifications upon
reasonable written notice to Villa by the City Assessor or the City Attorney.
4. Termination of Agreement. This Agreement shall terminate on the
earliest of the December 31 immediately preceding the year during which any of
the following events occurs:
(a) Enactment of an amendment to or repeal of Wisconsin
Statutes § 70.11(4a) (2009 — 10) after the effective date of this Agreement which
has the effect of changing the status of the Property from exempt to taxable, in
whole or in part.
(b) A determination by the City or a court of competent
jurisdiction that the Property qualifies for exemption from property tax under
any provision of law other than exemption as low - income housing pursuant to
Wisconsin Statutes § 70.11(4a).
(c) Ten years after the effective date of this Agreement.
(d) In the event that Villa fails to comply with the terms of this
Agreement, the City shall have the right to determine that any vacant units at the
Property as of the immediately prior January 1 and on January 1st of each year
thereafter are subject to property taxation under Wisconsin Statutes § 70.11(4a).
5. Amendment to Agreement. This Agreement may be amended only
by a written agreement executed by both parties.
6. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties and their respective successors and assigns.
7. Governing Law. This Agreement shall be construed and governed
by the laws of the State of Wisconsin.
8. Entire Agreement. This Agreement and the Settlement Agreement
constitute the entire agreement between the parties. There are no other
agreements, written or oral, except as set forth herein.
2
9. Authorized Signatures. Villa represents and warrants to the City
that the undersigned individual is authorized to enter into and execute this
Agreement on behalf of Villa. The City represents and warrants to Villa that the
undersigned officials are authorized to enter into and execute this Agreement on
behalf of the City.
10. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original and all of which shall be deemed one
and the same instrument. Signatures sent via facsimile or electronic transmission
shall be deemed original signatures for purposes of creating a binding agreement.
CITY OF OSHKOSH VILLA ST. THERESA, INC.:
BY: BY:
Mark A. Rohloff Barrett S. Zuckerman
Its: City Manager Its: President
BY:
Pamela R. Ubrig
Its: City Clerk
BY:
Lynn A. Lorenson
Its: City Attorney
REIN HART17204811_2
3
EXHIBIT A -1
TENANT INCOME CERTIFICATION
TENANT INCOME CERTIFICATION
Villa St. Theresa, Inc. ( "Villa ") has adopted a policy and has entered into an agreement with the
City of Oshkosh ( "Agreement ") that Villa will rent units at the property known as Glynn Park solely to
"low- income individuals ", as that term is defined in Wisconsin Statutes § 70.11(4a). The information
below is being provided in accordance with said Agreement.
PART I — PROPERTY INFORMATION
Property Name: Glynn Park
Address: 1255 West 18th Avenue, Oshkosh, Wisconsin
Real Estate Parcel No. 1307310300
Unit #:
PART II — HOUSEHOLD MEMBERS
Relationship to Head of
Names of All Household Members Date of Birth Household
1.
2.
3.
PART III — ANNUAL INCOME:
Annual Income as of January 1, 20_
(A) (B) (C)
Household Annual Employment Social Security and Other Income (Interest,
Member Salary or Wages Pensions Dividends, Public Assistance,
etc.)
1.
2.
3.
Totals
Total Household Income (totals of columns A, B & C) S
PART IV - INCOME CERTIFICATION
I understand that the information on this form will be used to determine income eligibility for
Low Income Housing in accordance with the Agreement between Villa St. Theresa, Inc. and the City of
Oshkosh. I/we have provided for each person(s) set forth in Part II above, verification of their annual
income. Uwe agree to notify the landlord immediately upon any member of the household moving out of
the unit or any new member moving in. I/we further understand that providing false, misleading or
incomplete information may result in the immediate termination of the lease agreement at the sole
discretion of the landlord. Accordingly, Uwe hereby certify that the information presented in this
certification is true and accurate to the best of my /our knowledge and belief.
Tenant Signature Tenant Signature
[Print Name] [Print Name]
Date Date