Traverse City News and Events

DDA Eyes More TIF Projects

By Beth Milligan | March 17, 2025

While the future remains uncertain for one of downtown Traverse City’s main funding sources – the tax increment financing (TIF) 97 fund, scheduled to end in 2027 – its Old Town TIF fund still has 16 years left. TC Downtown Development Authority (DDA) board members are eyeing potential projects in Old Town using that funding – ranging from intersection repairs to workforce housing to riverwalk upgrades – at the same time they tackle a list of projects prioritized for the remaining TIF 97 dollars.

Board members continued discussions Friday from previous recent meetings about how best to use both TIF funds as they prepare to create the DDA’s 2025-26 budget. Like the city’s, the DDA’s budget year runs from July 1 to June 30. The DDA will host a public hearing on its new draft budget on May 16, followed by a city commission hearing on May 19 and budget approval by both boards in June. The DDA has three main funding sources: the TIF 97 fund, the Old Town TIF fund, and the general fund. The TIF funds capture taxes on rising property values within their districts to pay for public improvement projects and downtown operations, while the general fund collects a two-mill levy from all properties in the DDA district.

With TIF 97 set to soon expire – barring residents’ approval of its extension under a required public vote – board members have named a handful of projects they want to tackle with approximately $9.3 million left for capital improvements. Priorities include the new Rotary Square, the Boardman/Ottaway riverwalk and J. Smith Walkway, a new farmers market pavilion, and East Front Street improvements.

DDA Executive Director Harry Burkholder gave updates on those projects Friday, noting that a “very successful” public input process is underway to create a new design for Rotary Square. Nearly 500 people responded to a recent public survey about desired improvements, while others participated in a public open house and series of stakeholder meetings. More pop-ups are planned this spring. Survey responses show live music, public events, and small markets top the list of the desired experiences so far in Rotary Square, with desired amenities including seating, shade, and outdoor event space. Respondents cited connecting with friends and family, sustainability/environmental care, and festivals/events among their priorities for the property. They were least interested in active recreation or private events, wanting to ensure the space remains reliably open for public gathering.

Board members last month approved a not-to-exceed contract of $486,419.50 for schematic design and design development services related to the Boardman/Ottaway riverwalk area. Burkholder said Friday that the DDA’s attorney and consulting firm INFORM Studio are finalizing that contract so the firm can start designing plans for the J. Smith Walkway, a new bridge to replace the existing bridge over the river between the J. Smith Walkway and farmers’ market lot, pedestrian amenities in the surrounding alley and parking lot, and environmental improvements. Other TIF 97 priorities – including a long-discussed farmers market shed and East Front Street improvements – will require a harder look, Burkholder said, including revisting past designs and determining how much the DDA is willing to commit of its remaining funds to those projects. Board members have said they want to produce tangible results with the last of the TIF 97 dollars and ideally not leave projects half-completed or in limbo.

Board members have the luxury of more time – but a smaller budget – with the Old Town TIF. That plan, reset in 2016 for another 25 years, doesn’t expire until the end of 2041. Its previous iteration, the TIF 2 plan, helped redevelop the former Iron Works site – home today to River’s Edge and Hagerty. “All of this private development increased the value of the district nearly 13 times over the life of the plan,” Burkholder wrote in a memo.

However, because of the reset, the amount of annual tax revenue captured by the Old Town TIF is less than $1 million. Revenue in 2023-24 was just over $790,000, while this year it came to nearly $830,000. The plan is not projected to generate over $1 million annually until 2028. The Old Town TIF has a fund balance of just under $800,000. “In many instances, due to the high costs of implementing public infrastructure projects, we often have to save funding for a few years within the Old Town TIF before we can implement large infrastructure projects in the district,” Burkholder explained. “For example, the recent reconstruction of the Eighth and Cass and Eighth and Union intersections totaled just over $900,000.”

Board members discussed several such projects they could potentially tackle in Old Town in the coming years. Options include reconstructing the Union and Seventh intersection, which Burkholder noted was in “rough condition.” New streetscaping along Lake Avenue (between Eighth and Oryana) and a plaza near Lake/Tenth were also envisioned in the Old Town TIF plan. Another stated purpose for plan revenues is for housing “contributions made to qualified nonprofits, public agencies, or third-party administrators for the purpose of constructing workforce housing within one half mile of the development area boundary.” Burkholder pointed to a proposed workforce housing project at the corner of Lake/Eighth as an example of something Old Town TIF could potentially support.

Improvements around the Union Street Dam/FishPass site are also on the table. Burkholder said Friday that “tremendous progress” is being made on FishPass, which is scheduled for a spring 2026 completion for in-water work followed by a year of upland improvements in the surrounding park. Old Town TIF was originally envisioned as a major funding source for the dam project, but a variety of state and federal grants are primarily covering those costs now. Old Town TIF could instead help pay for park improvements, Burkholder said, such as upgrading the boardwalk in front of River’s Edge as well as one proposed to connect under Union Street to Hannah Park. TIF funding could help improve the decking material – making it closer to the material used on the Boardman Lake Loop Trail than the rubberized decking initially planned – and to install a railing system along the riverwalk.

“These kinds of small amenities are a great opportunity for us to contribute to the larger project,” Burkholder said.

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