City commission renews PILT agreements for Pine Ridge, Lake Superior Village
MARQUETTE — The Marquette City Commission at its meeting Nov. 25 voted 4-1 to reaffirm payment in lieu of taxes, or PILT, agreements with the Marquette Housing Commission in regards to the Pine Ridge Apartments and Lake Superior Village.
The agreements allow the city to receive 4% of rents collected at each property, according to city officials.
The PILT agreement does not impact the amount of rent that residents pay to the housing commission, as rents are set based on a resident’s income, regardless of expenses incurred by the housing commission, said Sharon Maki, executive director for the Marquette Housing Commission.
City Commissioner Andrew Lorinser cast the dissenting vote, saying he hopes to eventually pursue a lower PILT rate for the properties in an effort to give the housing commission more funds to spend on amenities, services and maintenance at the properties.
“A 4% PILT is very fair, it’s equitable; 85% of municipalities across the state do have PILTs with their low-income housing. I, however, think we can go further,” he said. “I’ve been advocating for a 1% PILT and then a 0% PILT. I did want to amend it here, but I don’t think that would get a lot of support. So I do just want to start a narrative of how we’re funding amenities and who we’re taxing and who we’re asking to pay for services in Marquette … In my ideal world, I would hope that this would come back to us as a 0% option. That’s something that I could support.”
However, commissioners and city officials emphasized the PILT dollars from the housing commission are needed, as much of the roughly $31,000 collected from the two agreements would be lost should a 1% PILT be pursued for the properties, said Gary Simpson, the city of Marquette’s chief financial officer.
“If that were the case, the city would lose just short of $24,000 total in the PILT collection,” Simpson said.
City Commissioner Paul Schloegel said: “I appreciate where you’re going with that, Andrew, it’s a very nice gesture. But at the same time, every penny we have is accounted for and very necessary. We’re scrambling to make up tax dollars that we’re losing from different entities, whether we’re talking about power plants and everything else. I do appreciate your sentiment, but I think it’s a very fair assessment.”
Furthermore, the housing commission is currently in the early stages of pursuing a change to its funding structure that will allow it easier access to financing and funding, Maki and City Commissioner Jenn Hill said.
The funding structure to be pursued is Rental Assistance Demonstration, or RAD, which was “created in order to give public housing authorities a powerful tool to preserve and improve public housing properties and address the $26 billion nationwide backlog of deferred maintenance,” according to the U.S. Department of Housing and Urban Development.
Changing the structure to RAD would allow the housing commission to “leverage public and private debt and equity in order to reinvest in the public housing stock,” according to HUD.
It will change the program’s status from a Public Housing Section 9 program to the Section 8 Voucher program, which “allows more accessible financing, addresses capital projects and provides predictable rental subsidies that will never decrease and many other benefits that will improve the living conditions of residents,” city notes state.
“This RAD process — which is going to take quite some time, years really — is going to have the end result of allowing the housing commission to have access to funds that it doesn’t have access to now. And that will allow them to significantly renovate the properties and eventually be able to provide more services and improve the conditions and the services offered by the housing commission,” Hill said. “This is one legal step along the way to make sure that this happens, so an absolutely necessary step as it goes through this transformation. And not only will this housing be renovated and improved, but it will also mean that folks will also be able to access housing outside of the housing commission with vouchers.”
Cecilia Brown can be reached at 906-228-2500, ext. 248.