Folks interested in learning about or commenting on a proposal by a nonprofit organization to use tax-exempt bonds to buy Oxford Township’s largest senior living community are invited to attend a public hearing next week.

The hearing will occur during the township board’s Wednesday, Feb. 13 meeting. It begins at 6:30 p.m. and will be held at 300 Dunlap Rd., just north of Seymour Lake Rd.

Great Lakes Senior Living Communities (GLSLC), LLC is planning to purchase and operate Independence Village of Waterstone,  a 145-unit facility at 701 Market St., west of M-24.

The Oxford facility is one of eight that GLSLC plans to acquire in Michigan and Ohio, according to a Dec. 12, 2018 memo from attorneys Craig Hammond and Eric McGlothlin, of the law firm Dickinson Wright.

GLSLC is planning to finance the acquisitions using up to $400 million in tax-exempt private activity bonds. The organization has requested they be issued by the Arizona Industrial Development Authority (AZIDA).

AZIDA is a nonprofit corporation that’s designated as a political subdivision of the State of Arizona. It issues both taxable and tax-exempt private activity bonds. The latter are used by private borrowers to lower their financing costs as the bond interest is exempt from federal income tax.

“Repayment of the bonds is an obligation of the private user, not of the issuing authority,” according to AZIDA’s website.

Of the $400 million being requested by GLSLC, up to $47.3 million would be used to buy Independence Village of Waterstone, which opened in June 2002.

“There are no new facilities to be constructed in connection with this financing,” wrote Hammond and McGlothlin.

In order for the interest to be tax-exempt, federal law mandates issuance of the bonds must be approved by not only AZIDA, but all of the local government units in which the various senior living facilities are located.

Prior to approval, each local governing body must conduct a public hearing.

“The purpose of the public notice and hearing is to give the local officials and residents an opportunity to provide input, support or raise objections to the bonds and the proposed uses of the bond proceeds,” wrote Hammond and McGlothlin.

The memo stressed that if township officials approved these bonds, the debt would not be the responsibility of Oxford’s government or its taxpayers.

“(It) would not obligate the township to pay any portion of the debt service . . . or in any way pledge the township’s credit as security for the bonds or otherwise cause the township to incur any liability relating to the financing,”  the attorneys wrote. “The bonds would solely be an obligation of AZIDA payable from loan payments to be made by GLSLC.”

This reporter contacted McGlothlin in an attempt to learn more about GLSLC’s plans, but he said, “I haven’t been authorized to talk to you . . . I don’t have any authority to talk about the matter.”

Township Treasurer Joe Ferrari isn’t concerned about the proposed bonds, but he is worried about the possibility of Oxford losing a great deal of revenue should GLSLC decide to seek a property tax exemption due to its status as a nonprofit organization.

“It (would be) a huge loss to the township,” he said. “And Independence Village consumes a lot of township services.”

Independence Village’s 2018 summer and winter tax bills for its real property, which includes land and buildings, amounted to $244,904. Its personal property tax bills totalled $4,581.

Those amounts represent state, regional, county, school district and township property taxes combined.

Independence Village pays a total of $51,151 to the township in real and personal property taxes for municipal operations, police and fire services, the parks and recreation department, the public library and the North Oakland Transportation Authority.

Ferrari noted Independence Village is the township’s ninth largest taxpayer. “That would be a lot of money to lose,” he said.

Independence Village also pays a significant amount in taxes to Oxford Community Schools. The 2018 bills totalled $124,097 for operating millage, debt service and the sinking fund.

A GLSLC representative assured township officials the nonprofit will not seek a property tax exemption.

“Notwithstanding the potential qualification for property tax exemption, the purpose of this letter is to confirm that GLSLC (including any affiliate, subsidiary, or a to-be-formed limited liability company related thereto) will not apply for or otherwise claim an exemption from the collection of property taxes . . . with respect to (Independence Village of Waterstone),” wrote GLSLC representative Steve E. Hicks, chief executive officer of Provident Resources Group, in a Jan. 11 letter to the township.

But that isn’t good enough for Ferrari, who said he’s “lived through too many” informal agreements between the township and other parties that didn’t pan out because ownership or partners changed.

That’s why the treasurer drafted a four-page agreement that will be considered by the township board at the Feb. 13 meeting.

“A gentleman’s agreement can be changed,” he said. “When you have something formally agreed (to) by both parties, it’s a little bit more difficult to change.”

Independence Village is ineligible for a property tax exemption under its current ownership. Ferrari’s proposed agreement would require GLSLC to maintain that status going forward.

It goes on to state that “if there is a future change in law or use of (Independence Village) that would afford GLSLC an exemption,” the nonprofit “would make payments in lieu of taxes, so that the township received the same yearly tax revenue as it would have received . . .  if (Independence Village) had no property tax exemption.”

“The main thing is just to make the township whole,” Ferrari said.

According to the proposed agreement, “the township’s approval of the issuance of tax-exempt private activity bonds by AZIDA” would be “conditioned upon GLSLC entering into this agreement.”

“They go hand in hand,” Ferrari said.

Ferrari is against a potential tax exemption in this case for the same reason he has firmly opposed all requests for tax abatements in the past.

“If they’re not paying, somebody else is paying (to make up for it),” he said. “Everybody needs to pay their fair share for a community to run efficiently. When one segment doesn’t pay, another segment picks it up.”