Hastings - Gencap Hastings - Answer to Petition (3.31.26) final.pdf
Gencap Hastings Limited Dividend Housing Association LLC, Petitioner Vs. City Of Hastings, Respondent · 26-000069-TT
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STATE OF MICHIGAN DEPARTMENT OF LICENSING & REGULATORY AFFAIRS MICHIGAN TAX TRIBUNAL GENCAP HASTINGS LIMITED DIVIDEND HOUSING ASSOCIATION LLC, Petitioner, v CITY OF HASTINGS, Respondent. MTT Docket No. 26-000069 Parcel No. 08-55-001-197-10 / Jackie J. Cook (P68781) Honigman LLP Attorneys for Petitioner 2290 First National Building 660 Woodward Avenue, Suite 101 Bloomfield Hills, MI 48304 (248) 566-8474 jcook@honigman.com Toby Koenig (P72367) Bloom Sluggett, PC Attorneys for Respondent 161 Ottawa Ave NW, Suite 400 Grand Rapids, MI 49503 (616) 965-9340 toby@bloomsluggett.com / RESPONDENT’S ANSWER TO PETITION AND AFFIRMATIVE DEFENSES Respondent, City of Hastings (“Respondent”), by and through its attorneys, answers and alleges its affirmative defenses to the Petitioner’s Petition as follows: 1. Petitioner’s principal office is located at 6938 N. Santa Montica Blvd., Fox Point, Wisconsin 53217. ANSWER: Respondent lacks sufficient knowledge or information to form a belief as to the truthfulness of this allegation and therefore leaves Petitioner to its proofs. 2. The real property tax parcel identified as 08-55-001-197-10 is located at 327 W. Court St., Hastings, in Barry County, Michigan (the “subject property”). ANSWER: Admitted. 3. Petitioner is a party in interest under MCL 205.735a as the owner of subject property and/or taxpayer responsible for property tax assessments on the subject property. ANSWER: This allegation contains a legal conclusion to which no response is required. Respondent otherwise leaves Petitioner to its proofs to establish standing and jurisdiction.
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2 4932-8417-0141, v. 1 4. The subject property is classified commercial. ANSWER: Admitted. 5. The subject property is presently used as a low-income residential apartment complex, the use for which the property was designed. ANSWER: To the extent this allegation requires Respondent to admit to a legal conclusion that the property is used for “low income” housing, Respondent neither admits nor denies as no response is required. Respondent lacks sufficient knowledge or information to form a belief as to the truthfulness regarding the purposes for which the property was designed. 6. The subject property is in the Hastings Area School District and Barry Intermediate School District. ANSWER: Admitted. 7. Respondent, City of Hastings, assesses and collects property taxes on the subject property. ANSWER: Admitted. 8. The Petition is timely filed within 35 days of the December board of review’s decision and determination issued December 9, 2025. ANSWER: This allegation contains a legal conclusion to which no response is required. Respondent leaves Petitioner to its strict proofs to establish jurisdiction. 9. The Tax Tribunal’s jurisdiction is invoked under MCL 205.735a(6). ANSWER: This allegation contains a legal conclusion to which no response is required. Respondent leaves Petitioner to its strict proofs to establish jurisdiction. 10. This matter involves issues relating to: (a) valuation, (b) assessment, (c) taxable value, (d) uniformity, and (e) exemption. ANSWER: This allegation is merely a restatement of Petitioner’s claim to which no response is required; Respondent otherwise denies that the subject property is improperly assessed and denies that Petitioner is entitled to any relief. 11. On information and belief, there was no addition. ANSWER: Respondent lacks sufficient knowledge and/or information sufficient to admit or deny this allegation, and therefore leaves Petitioner to its proofs. 12. For tax year 2025, the subject property’s assessed value and taxable value were
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3 4932-8417-0141, v. 1 $2,756,700. ANSWER: Admitted. 13. Petitioner asserts the subject property should be exempt from ad valorem property tax for tax year 2025 and that the assessed and taxable values accordingly should be $0. ANSWER: This allegation contains a legal conclusion to which no response is required; Respondent otherwise denies that the subject property was improperly assessed and denies that the subject property should be exempt as alleged. 14. The assessed value amount at issue is $2,756,700. ANSWER: Respondent admits that Petitioner contests the assessed value as stated; however, Respondent denies that the subject properly was improperly assessed and further denies that Petitioner is entitled to any relief. 15. The subject property consists of 60 residential low-income apartment units. ANSWER: Petitioner’s assertion regarding whether 60 units are qualified low income apartments constitutes a legal conclusion to which no response is required and therefore Respondent leaves Petitioner to its proofs. 16. On December 12, 2022, Respondent approved the subject property for a property tax exemption by City Ordinance Section 70-144 adopted on December 27, 2022. ANSWER: Denied in the form and fashion stated. Furthermore, the allegation contains a legal conclusion as to Petitioner’s interpretation of a local ordinance to which no response is required. 17. Per the ordinance, the low-income housing project developed by Petitioner would be exempt from ad valorem taxes after the acquisition of the site by Petitioner. ANSWER: Denied in the form and fashion stated. Furthermore, the allegation contains a legal conclusion regarding Petitioner’s interpretation of a local ordinance to which no response is required. 18. Construction was completed in July of 2024. ANSWER: Admitted. 19. 100% of the units were occupied by December 31, 2024. ANSWER: Respondent lacks sufficient knowledge and/or information to form a belief as to the truthfulness of this allegation and therefore leaves Petitioner to its proofs.
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4 4932-8417-0141, v. 1 20. The apartment units operate as low-income rentals that are leased to tenants that meet the applicable household income requirements, consisting of 21 units leased at 80% AMI (Area Median Income) rents, 17 units leased at 60% AMI rents, 8 units at 50% AMI rents, 7 units at 40% AMI rents, and 7 units at 30% AMI rents. ANSWER: To the extent this allegation contains a legal conclusion that the apartment units qualify as “low income” rentals under the applicable statutes, no response is required. Respondent otherwise lacks sufficient knowledge and/or information to form a belief as to the truthfulness of these allegations and therefore leaves Petitioner to its proofs. 21. Although construction was completed in 2024, and the property was fully occupied by December 31, 2024, the exemption was not placed on the tax roll for 2025. ANSWER: Respondent lacks sufficient knowledge and/or information regarding the allegations concerning construction and occupancy and therefore leaves Petitioner to its proofs; Respondent admits that the subject property was not exempt for 2025. 22. On information and belief, the assessor did not place the property on the tax roll as exempt for 2025, because the assessor did not receive certified notification of the exemption before November 1, 2024, under MCL 125.1415a(2). ANSWER: This allegation contains a legal conclusion to which no response is required; Respondent otherwise admits only that the subject property did not qualify for the exemption for the 2025 tax year as alleged by Petitioner. 23. However, the Michigan State Housing Development Authority confirmed that the property was exempt as of December 31, 2024 (tax day for 2025) and that the November 1 deadline is “ministerial” and waivable. ANSWER: This allegation contains a legal conclusion to which no response is required. Respondent otherwise denies the allegations in the form and fashion stated. 24. Importantly, Respondent established a different duration for the exemption than what is provided for by statute under MCL 125.1415a(4)(a). Petitioner was “eligible [for the exemption] as of August of 2024, when the property was purchased by an eligible owner, the federally-aided mortgage was granted, and the requirements for eligibility under the statute were satisfied.” ANSWER: To the extent this allegation contains legal conclusions as to Petitioner’s interpretation of a local ordinance, no response is required; Respondent otherwise denies the allegations. 25. Accordingly, the property was exempt beginning in 2025. ANSWER: This allegation contains a legal conclusion to which no response is required; Respondent otherwise denies that the subject property was improperly assessed, denies that the subject property qualified for an exemption as alleged.
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5 4932-8417-0141, v. 1 26. On December 1, 2025, Petitioner submitted a protest to Respondent’s December board of review, requesting that the taxable status of the property be corrected from taxable to exempt for tax year 2025. Appendix A. ANSWER: Admitted. 27. The December board of review was required to correct the subject property’s taxable status to exempt under MCL 211.53b(6)(f) which requires the correction of a qualified error “regarding the correct taxable status of the real property being assessed.” ANSWER: This allegation contains a legal conclusion to which no response is required; Respondent otherwise denies that the subject property was improperly assessed and further denies that the December Board of Review erred in denying Petitioner’s protest. 28. On December 9, 2025, the December board denied Petitioner’s request to correct the subject property’s taxable status to exempt. Appendix B. ANSWER: Admitted. 29. The December board erred in not correcting the status of the subject property from taxable to exempt. ANSWER: Denied. 30. The Tax Tribunal has “exclusive and original” jurisdiction over “a proceeding for direct review of a final decision, finding, ruling, determination, or order of an agency relating to assessment, valuation, rates, special assessments, allocation, or equalization, under the property tax laws of this state.” MCL 205.731(a). ANSWER: This allegation contains a legal conclusion to which no response is required. 31. The Tribunal may review the subject property’s taxable status de novo. ANSWER: This allegation contains a legal conclusion to which no response is required. 32. The Tribunal has the power to reverse the December board’s decision and enter an order that the subject property is exempt for tax year 2024. MCL 205.732(a). ANSWER: This allegation contains a legal conclusion to which no response is required; Respondent denies that the property was improperly assessed and further denies that the subject property qualifies for the alleged exemption. 33. We respectfully request that the Tax Tribunal reverse the December board’s decision and correct the subject property’s taxable status to exempt under MCL 211.53b(6)(f)
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6 4932-8417-0141, v. 1 for tax year 2025. ANSWER: This allegation contains a request for relief to which no response is required. Respondent denies that the property was improperly assessed and denies that the subject property qualifies the for the alleged exemption. 34. Additionally, Petitioner was assessed and paid tax in excess of the correct and lawful amount due because of a clerical error or mutual mistake of fact; accordingly, the Tribunal should correct the property’s taxable status to exempt under MCL 211.53a. ANSWER: This allegation contains a request for relief to which no response is required. Respondent denies that the property was improperly assessed and denies that the subject property qualifies for the alleged exemption. 35. The 2025 assessment, including state equalized value and taxable value, imposed on the subject property, and the taxes to be levied and collected thereon, are invalid and unlawful because: (a) The 2025 assessment, including state equalized value and/or taxable value, exceeds the amount permitted by the Michigan Constitution and applicable statutes; ANSWER: This allegation contains a legal conclusion to which no response is required; Respondent otherwise denies that the subject property was improperly assessed and denies that Petitioner is entitled to relief. (b) The 2025 assessment, including state equalized value and/or taxable value, is at a higher percentage of true cash value than permissible under the Michigan Constitution and applicable statutes; ANSWER: This allegation contains a legal conclusion to which no response is required; Respondent otherwise denies that the subject property was improperly assessed and denies that Petitioner is entitled to relief. (c) The 2025 assessment, including taxable value and/or state equalized value, is based upon an erroneous determination of the true cash value of that portion of the subject property that is taxable under Michigan law, and is based upon the application of wrong principles; and ANSWER: This allegation contains a legal conclusion to which no response is required; Respondent otherwise denies that the subject property was improperly assessed and denies that Petitioner is entitled to relief. (d) The 2025 assessment, including state equalized value and/or taxable value, and the mode of assessment adopted by Respondent, discriminate against Petitioner and deny Petitioner its constitutional rights to uniformity, equal protection, and due process of law.
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7 4932-8417-0141, v. 1 ANSWER: This allegation contains a legal conclusion to which no response is required; Respondent otherwise denies that the subject property was improperly assessed and denies that petitioner is entitled to relief. AFFIRMATIVE DEFENSES 1. Petitioner has failed to state a claim upon which relief can be granted. 2. Petitioner’s claims against Respondent are barred because the valuation methods used by Respondent comply with the Constitution, state law, and prevailing State Tax Commission procedures. 3. Respondent’s assessment reflects 50% of the subject property’s true cash value and the values on the roll, including the taxable value, comply with MCL 211.27a. 4. Petitioner’s’ claims may be barred in whole or in part because the Subject Property did not qualify for the exemption requested by Petitioner. 5. Petitioner may not be a party in interest capable of bringing this appeal as to the parcel at issue in this matter. 6. Petitioner’s claims may be barred in whole or in part for failing to allege sufficient facts to invoke the Tax Tribunal’s jurisdiction. 7. Respondent reserves the right to identify further affirmative defenses as may become known through discovery. WHEREFORE, Respondent requests that the Tribunal dismiss Petitioners’ appeal with prejudice and award Respondent its costs, attorney fees, and all such further and additional relief as this Tribunal may deem appropriate.
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8 4932-8417-0141, v. 1 Dated: April 2, 2026 Respectfully submitted by, BLOOM SLUGGETT, PC /s/ Toby Koenig Toby Koenig (P72367) Attorneys for Respondents City of Hastings PROOF OF SERVICE Tonya Voakes, being duly sworn, deposes and says that she is employed by Bloom Sluggett, PC, and that on April 2, 2026, she served a copy of Respondent’s Answer to Petition and Affirmative Defenses by First Class mail and e-mail upon attorney for Petitioner at: Jackie J. Cook, Honigman LLP, 2290 First National Building, 660 Woodward Avenue, Suite 101, Bloomfield Hills, MI 48304, jcook@honigman.com /s/ Tonya Voakes Tonya Voakes