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HomeMy WebLinkAboutCOM 0072.027 2004-2006 07/07/05 THC 0816 F.A3 80F- 326 5863 ~ OOr f Habfl4a4 for Ilerrnanity I:oeBa P.Q. Iiox 46I9, ICailua I~r~na, HI 96`745 f6q$-329-$f3ggJ habitatkorra_ac~hiplo6a.r~et 'f'e~tim®ny of Joel Gimpel ' 73-4886 Mina Lani Street ~ I4aitaa-Kona, HI 96740 t3ilt 11t9 Juty 7, x(1115 Thanks for your carefeil attention to, and understanding of the issues I raised in"_ my testimony regarding Bill i09 at your June 15 meeting. !believe that your agreement to postpone firaa4 consideration of the Bill to allow time for careful analysis of the issues was tFae right thing to do, despite the fact that quick passage might have benefitted Habitat For Humanity and the community in gereral. As I stated, one principal concern was the absence zaf specific control over 4hE: passibility that a developer would donate land to a "related"' non-profit corporation, in effect, donating land to himself and qualifying for the housing credits. Related to that rx~ncern was the need to assure than the non-profit corporation was empowered to construct housing. As currently worded, any nor+profit corporation, including the Chamber of G~mrnerce, HMSA, the Reaitar's Association, arzi the Bar Association, all worthy entities but probably not appropriate donees for the pwpases of this ordinance, could qualify. Please keep in mind that not all non-profit corporations are charities described in Sec. 501(c}(3), ar+d that contributions to non-charitable corporations will not k;e deductible by ttre deva~loper. I therefore believe that 501 {c)(3) status should be a requirement. As councilman Hoffman requested, I developed some ideas for consideration and shared them with him and councilman Pilago, co-chairs of the Planning Committee. I suggested adding the following sectionl1-S(a)(11): The County Housing P~uthority shell, in considering the developer's proposal 20 donate land to a nonprofit corporation: (i) Asscare that the corporation is cyrganixc<t as a charitable corporation quaUfred under 5actinn 5010}{3) of the Internal Revenue Gode as now or hereafter amended, and that i",. is permitted by its charter to cArstnic:t housing; and Comm. No. . 2 Ref. To: frbuala/ ' Ref. Uate J~~ 7 9(1(15 07/07/05 THI7 08:17 FAS 808 326 5663 [~01,; (ii) Assure that the nonprofit corprsration and the develapsar are nut related entities. Although there is a level of detail in this pr~nposFd amendrrrent that is restrictive, I believe that the above language provides some important and needed guidance to the CH/4 administrator and the council far evaluating d©veloper proposals. For example, concern was expressed that anon-profit organization like a chun;h or land trust, willing to develop a pan.et of land and operate it as rental affordable housing, would be roreclosed from being a donee. That., however, is not the case. A church or other nonprofit charitable organization, though not organix_aei sp,scifically to build tuomes, could well do sa under a charter prevision that permits it to Gamy on lawful activities consistent with its charter and that are calculated directly or indirectly to promote the interests of the corporation and '~he community. Such a provision 1s found, far example, in the charter of Congregation Kona Beth Shalom. We recognize, of course, that the atlministrafar and the council have the final say in any event. But that foal say is most effective if guided by a set of defsnitive standards. 1'o merely require that the donee be nonprofit leaves toa much roo ar, and 'sf that is the only statutory requirement, a disappointed developer might h;~ve grounds to chaNenge a denial. Finally, the problem with allowing donation to a related entity is that it isn"t reayly a donation. The developer would be giving the land to himself, and gaffing credit for it. Thank you for your attention and consideration, I'II be happy to respond tp your questions.