HomeMy WebLinkAbout07. 17-593 DECEMBER 12, 2017 17-593 RESOLUTION
(CARRIED 6-0 LOST LAID OVER WITHDRAWN )
PURPOSE: APPROVE AMENDED PAYMENT IN LIEU OF TAXES (PILOT)
AGREEMENT WITH OSHKOSH HOUSING AUTHORITY AND
WAITE RUG HOUSING, LLC FOR PROPERTY LOCATED AT 300
EAST CUSTER AVENUE
INITIATED BY: LEGAL DEPARTMENT
WHEREAS, the Oshkosh Housing Authority owns property located at 300 East
Custer Avenue; and
WHEREAS,Wisconsin statutes allow municipalities to enter into payment in lieu of
taxes (PILOT) agreements with Housing Authorities to pay for services,improvements,or
facilities furnished to properties owned by Housing Authorities; and
WHEREAS, the Housing Authority is renovating this property and has asked the
City to enter into a PILOT agreement for this project; and
WHEREAS, the PILOT agreement will allow the Housing Authority to make a
payment to the City for the services,improvements, and facilities that the City provides to
the property.
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of
Oshkosh that the proper City officials are hereby authorized and directed to enter into a
payment in lieu of taxes (PILOT) agreement with Waite Rug Housing, LLC and the
Oshkosh Housing Authority for property located 300 East Custer Avenue in the City of
Oshkosh substantially in the same form as attached, any changes in the execution copy
being deemed approved by their respective signatures.
TO: Mayor and Members of the Common Council
FROM: Lynn A. Lorenson, City Attorney
DATE: December 5, 2017
RE: Approve Amended Payment in Lieu of Taxes (PILOT) Agreement with Oshkosh
Housing Authority and Waite Rug Housing, LLC for Property Located in the 300
Block of East Custer Avenue
BACKGROUND
The Oshkosh Housing Authority purchased property located at 300 East Custer Avenue and is
renovating the property to operate 56 units of subsidized housing. In order to raise capital for
the renovation of the property the Housing Authority will transfer federal income tax ownership
of a portion of the property to Waite Rug Housing, LLC, a separate legal entity. The Housing
Authority will be the sole managing member of the LLC and will remain the property manager
for the project. Wisconsin statutes recognize that housing authority properties are essential for
public and governmental purposes and so grant those properties tax exempt status. The statutes
also allow municipalities to fix a sum to be paid annually in lieu of taxes for the services,
improvements or facilities furnished to the property by the city in which they are located. The
payment in lieu of taxes may not exceed the amount that would be levied as the annual tax of
the city on the property.
At its June 13, 2017 meeting the Council approved a payment in lieu of taxes agreement (PILOT)
with the Housing Authority and Waite Rug Housing LLC for the property located in the 300
block of East Custer Avenue in the City of Oshkosh. The Housing Authority planned renovation
of the property into low income housing and pursuant to Section 66.1211 of the Wisconsin
Statutes proposed to enter into a PILOT agreement with the City providing for payment of an
amount equal to tenant rent revenue minus utilities times 10%. This formula was anticipated to
generate approximately $14,000 per year as payment to the City.
City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5000 http://www.ci.oshkosh.wi.us
The Project was reconfigured to split the project into 50% public housing and 50% straight tax
credit housing which resulted in a higher estimated amount of tenant rent being generated.
Because the Project budget did not allow for higher PILOT payments, in August the Council
approved an amended PILOT agreement which maintained the base level of payment initially
and increased that amount over time to reach full payment to the City. WHEDA has not
approved the inclusion of the straight tax credit housing and the Project has been reconfigured
to 50% public housing and 50% project based vouchers. The Winnebago County Housing
Authority Board of Commissioners have committed 28 vouchers to the Project. As the Project
will now be configured it will be a general population project with a preference for low income
elderly and disabled families.
Because of the changes to the Project the changes to the typical PILOT agreement allowing for a
gradual increase in payments to the City over time are no longer necessary and the Housing
Authority is requesting the City enter into the original PILOT agreement for the Project.
ANALYSIS
Wisconsin statutes allow municipalities to enter into PILOT agreements with Housing
Authorities to pay for services, improvements or facilities furnished to those properties. Other
properties held by the Housing Authority have existing PILOT agreements and the proposed
PILOT agreement in this case is consistent with the state statutes and those other existing PILOT
agreements.
The agreement will allow the City to recoup some of the costs it expends for services to this
property.
FISCAL IMPACT
The PILOT agreement will allow the Housing Authority to make a payment to the City for the
services, improvements and facilities that the City provides to the property. The amount to be
paid annually is equal to 10% of the difference between the amount collected from tenant paid
portion of rent for the residential units and the sum of the electrical, water, sewer and fuel bills
for the property.
City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5000 http://www.ci.oshkosh.wi.us
RECOMMENDATION
Staff recommends approval of the agreement.
Approved:
Mark A. Rohloff
City Manager
City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5000 http://www.ci.oshkosh.wi.us