DDA Board to Consider Delaying TIF Plan

Traverse City Downtown Development Authority (DDA) board members – who were scheduled to vote today (Friday) on approving a new TIF plan called Moving Downtown Forward – will instead consider delaying the plan. Chair Gabe Schneider and Vice Chair Scott Hardy sent a memo to board members recommending postponement, saying a delay would give new board members and a future new CEO more time to work on the plan and allow the DDA to build more community support for TIF. Not all members agree with postponing, however, preferring to stick to a published timeline that would put Moving Downtown Forward before city commissioners for approval in May.

The DDA is looking to rename and extend the existing tax increment financing (TIF) 97 plan – which covers the core of downtown Traverse City and is set to expire at the end of 2027 – by another 30 years. TIF districts capture taxes on rising property values within their boundaries to fund public improvement projects. However, those projects must be named in the plan in order to be funded. The DDA has spent at least two years narrowing down the project list for the new TIF plan and following a required public process that included submitting the plan to a citizen advisory council, which recently approved it.

Next steps were supposed to include a DDA board vote on the plan today (Friday), followed by an introductory presentation to city commissioners on April 1 and a public hearing and possible city commission vote on May 6. However, Schneider and Hardy sent a memo Wednesday recommending a delay as “a responsible course of action.” The memo outlines four key reasons for postponing action. For one, Schneider and Hardy wrote, “the changing scope of the plan does not instill confidence in the DDA.” The DDA board recently decided, for example, to scrap a long-discussed third downtown parking deck from Moving Downtown Forward due to a perceived lack of support for the project.

“In continuing to change and tweak the plan to reflect the perceived public sentiment of a few, we have jeopardized the support of many, including downtown property owners and the business community,” Schneider and Hardy wrote. The memo also calls for giving new DDA board members more time to consider the plan. “With a quarter of our board having only just been seated within the last week, and half within the last year, it would be irresponsible to ask for their sign-off on an effort that the rest of the board has considered for more than a year,” the duo wrote.

Schneider and Hardy also said the DDA board needs to focus on hiring a new CEO as its top priority. “To set our next CEO and organization up for success, that person deserves to be a part of the Moving Downtown Forward rollout, versus inheriting a process that is uncertain and disorganized,” they wrote. Following the retirement of former CEO Jean Derenzy, the DDA board last month appointed Harry Burkholder as interim CEO and hired Double Haul Solutions – led by former Interim City Manager Nate Geinzer – to lead the search process for a new CEO. It’s expected to take three to four months to complete the search. Schneider tells The Ticker work has already begun on interviewing board members, stakeholders, and community members about what they hope to see in a new CEO in order to craft the job description and post the opening.

Finally, Schneider and Hardy said that building “support for TIF as an economic and community development tool is paramount.” A citizen ballot initiative is set for a November vote that would require a public vote on any proposals to create, modify, amend, or extend TIF plans. Those would include not just DDA TIF plans, but brownfield and any other local TIF plans. “We must ensure that this tool (TIF) remains viable in the context of our representative democracy where accountability is held by the people and their elected officials rather than by a charter amendment referendum,” Schneider and Hardy wrote. “This means focusing our collective attention on opposing the city charter amendment referendum that undermines TIF for the DDA, brownfields, and corridors.”

Schneider and Hardy concluded their memo by saying that postponing action on Moving Downtown Forward “will ensure that the DDA board can focus on regaining the trust and confidence of the community.” Schneider tells The Ticker the goal is not to shelve the new TIF plan or abandon any of the extensive work that has gone into Moving Downtown Forward. Rather, the aim is a short-term delay to make sure the plan is right and to “get more confidence from the public” in Moving Downtown Forward – and in TIF overall – before proceeding, Schneider says.

A delay beyond November would put Moving Downtown Forward on a more difficult approval path if the fall ballot initiative passes, as the plan would then be subject to a public vote. However, even if the DDA board and city commission approved the plan this spring, it could still be subject to a public referendum if enough signatures were collected to force the plan onto the ballot. While Schneider can’t say whether Moving Downtown Forward would be taken up again before November – that’s up to the board, he says, as is the decision today to postpone at all – he’d rather build more public support first than force the issue now and “risk jeopardizing our financial future in the long term.”

Traverse City Mayor Amy Shamroe, who sits on the DDA board, says she was “disappointed” in the recommendation to postpone. Having served on the ad hoc committee that interviewed several recent additions to the DDA board, Shamroe says those candidates were knowledgeable about TIF and Moving Downtown Forward. She also thinks it’d be better for a new CEO to come in with the DDA board and city commission having already voted on the new plan, rather than being put in charge of spearheading its approval. “That doesn’t seem like a very enticing scenario for a good leader who would potentially be interested in the job to have to walk into,” she says.

Shamroe is particularly concerned about the DDA taking on an advocacy role when it comes to the November ballot initiative. “We’re not a special interest group or a political action committee,” she says. “We’re not running a campaign. Our job is to put together a plan that is thoroughly vetted, which this one has been with a lot of earnest public engagement, and vote on it to move it forward in the process.” Shamroe says that recent changes to the proposed TIF plan, like removing the parking deck, are a good and not a bad thing, as they’ve shown that public input is being considered throughout the process.

Delaying is also not a guarantee that plan approval would be more successful in the future, Shamroe says. Postponing could put the city’s “back against the wall” the closer the timing gets to 2027 and the expiration of TIF 97. Even if Moving Downtown Forward failed in its first go-round now – either because of city commission rejection or a forced ballot measure that was rejected by voters at the polls – DDA and city leaders would still have time to regroup and submit another proposal to the community, Shamroe says.

The decision to delay will ultimately be up to the entire DDA board – but Shamroe hopes to see the DDA and city stick to the previously publicized approval timeline this spring. “This isn’t anything new, and there’s a process in place for a reason,” she says. “I respect the process, and Traverse City is a better place because of it. There comes a point where you just have to put forward the idea and see what happens.”