01-3495 Bloomer Housing Ltd. Partnership v. City of Bloomer (57784)

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Taxpayer’s apartment buildings are federally subsidized under § 515 of the 1949 Housing Act; in exchange for the low initial investment and interest credit, the apartments are subject to conditions and restrictions, including (1) tenants are limited to persons making less than 80% of Chippewa County’s average monthly income, and they may not pay more than 30% of their income for rent; (2) if the apartments generate a profit, landlord is limited to a maximum 8% annual return on its initial investment, and any excess is used to reduce the subsidy; (3) landlord is required to put 1% of the rental income into a reserve fund for maintenance costs until the fund’s balance equals 10% of the loan value; (4) landlord may not prepay the note; (5) landlord may only sell the buildings to a nonprofit organization and, if one is unavailable, it must obtain government approval of any other buyer; and (6) all restrictions pass to any subsequent owners for the term of the note and mortgage.

The City valued the apartments at over $1. million; we find that the trial court properly accounted for the restrictions by setting the value at $455,000, and ordering the City to refund a portion of the taxes paid by landlord.

Affirmed.

Recommended for publication in the official reports.

Dist III, Chippewa County, Sazama, J., Cane, C.J.

Attorneys:

For Appellant: Thomas J. Graham Jr., Eau Claire; William G. Thiel, Eau Claire

For Respondent: Lawrence E. Bechler, Madison