Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Tax Exemption Lihtc topic
No spam. Unsubscribe anytime.
Developers, nonprofit and assessor dispute tax-exemption eligibility for two low-income housing projects
Summary
Counsel for two affordable housing developments argued the projects qualify for charitable-property tax exemptions under the Oklahoma Constitution and state statute; the assessor—s office questioned the ownership and leaseback structure and whether net income inures to private parties. The board took testimony and will decide next Friday.
Attorneys for two low-income rental developments told the Oklahoma County Board of Equalization on May 6 that the projects meet the statutory and constitutional standards for a charitable-property tax exemption, while assessor staff said the ownership and leaseback structure raises questions about whether the properties are owned and used exclusively by an Oklahoma-chartered nonprofit.
Lisa Harden, counsel for the owner of Hillcrest 2 Apartments, told the board the properties are affordable-housing projects for seniors and low-income tenants, that 100% of units are income-restricted under the federal Low Income Housing Tax Credit (LIHTC) program, and that recorded land-use restrictions preserve affordability for at least 30 years. Harden cited "article 10, section c, the Oklahoma Constitution" and "section 2887, subsection 8" as governing authority and referenced IRS Revenue Procedure 96-32 and Title 68 provisions the firm relied on when seeking exemption.
Assessor counsel and staff objected to the applicants— characterization of ownership. The assessor—s representative put documents from the developer TWG (a private out-of-state development concern) and related limited partnerships on the record and said the structure showed the private entity as the owner/operator under a long-term ground lease. The assessor—s presenter said the nonprofit Oklahoma LLC that holds title executed a 99-year ground lease back to a private partnership and that, under the lease terms, the private tenant is the building—s operator, manager and payor of taxes on the leasehold — a structure the assessor said points to private ownership and control.
Applicant counsel replied that recitals do not govern lease terms, that the ground lease and recorded land-use restrictions bind the limited partnership to operate the project consistent with the nonprofit—s charitable mission, and that the nonprofit LLC—s organizing documents require any surplus to be devoted to the charitable purpose. Counsel pointed to earlier matters the board had seen, including a 2017 Meadowcliff Apartments matter that ultimately resolved with findings that a similar project satisfied charitable-use standards.
The board took testimony, reviewed submitted organizational documents, ground leases and OHFA (Oklahoma Housing Finance Authority) filings, and asked for more detail about income and expense statements and occupancy. Applicant counsel said they would supplement financial statements if useful; assessor staff said some OHFA materials the office obtained applied to a neighboring parcel and are not dispositive for the two properties now under appeal.
The board did not rule May 6 and the chair said the board will meet next Friday to render decisions. The board instructed staff to send the decision to the applicant when issued.
