The Traverse City Downtown Development Authority (DDA) voted unanimously Friday to take the next step towards extending downtown’s tax increment financing (TIF) 97 plan for another 30 years – sending it to a citizen council for review before it returns for formal DDA and city commission approval this spring. As part of the extension, the plan would be renamed Moving Downtown Forward and include a new list of projects that could be funded through TIF over the next three decades.

DDA CEO Jean Derenzy said the plan reflects approximately two years of work and engagement with the public, business owners, property owners, and other stakeholders. “We have done exhaustive outreach on this TIF plan,” she said. The DDA is looking to rename and extend the 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.

Moving Downtown Forward contains new projects and projects that were envisioned but never completed in the existing TIF 97 plan, like a new civic square (Rotary Square) and a third downtown public parking deck (now called the West End Mixed Use Development). Other infrastructure projects include a permanent farmers market facility, mobility improvements, Open Space improvements, heated sidewalks throughout downtown, and upgrades to the Lower Boardman River/Ottaway riverwalk. The plan has a maximum bond debt of $70 million over its 30-year timeline. Cost estimates are still being gathered for some projects, like the West End Mixed Use Development; those should be in this week, Derenzy said.

Another category of improvements is related to maintenance and placemaking. Those include items like sidewalk and street maintenance, bridge improvements, wayfinding signage, streetscaping, maintenance operations and cleaning, trash removal, holiday lights, planters and landscaping, and a dedicated downtown police officer. The TIF plan also includes other projects and activities eligible under state law, including utility and alley improvements, public art, renewable energy and energy efficiency projects, a downtown retail incubator (now underway), and housing.

Derenzy previously said housing was a key example of a use missing in the current TIF 97 plan that could be added to Moving Downtown Forward. The DDA’s other TIF plan – the Old Town TIF – allows for dollars to be used toward housing projects within a half-mile radius of the district’s boundaries. But TIF 97 funds can’t be spent on housing projects until the plan is updated to include that use, Derenzy said.

Moving Downtown Forward has another notable component absent from TIF 97: revenue-sharing with other local taxing partners. Due in part to the debate over whether TIF 97 should end and captured tax dollars return to partners like the City of Traverse City and Grand Traverse County, the plan proposes to return approximately $1.4 million annually – roughly 30 percent of the expected TIF intake – to those taxing partners. That figure represents the first seven years (1997 to 2004) of DDA-captured revenue in TIF 97. In addition to that annual payment, the DDA would also pay taxing partners 50 percent of the inflationary growth each year over the 30-year lifespan of Moving Downtown Forward.

Derenzy said Moving Downtown Forward will not capture any city millages passed after January 1, 2023. That means, for example, dollars won’t be captured on the millage approved by voters in November to support the Traverse City Fire Department expanding and becoming the city’s primary ambulance provider. DDA Board Member Ed Slosky pointed out that a citizen raised the question of an exemption at a joint DDA and city commission meeting on extending TIF. “We are taking citizen input very seriously into this plan,” Slosky said.

While the DDA is sometimes seen as separate from the city, Derenzy said Moving Downtown Forward is a collaboration between the city and DDA. The DDA is a component unit of government of the city – like Traverse City Light & Power – and downtown infrastructure is owned by the city, Derenzy noted. She said TIF was a “mechanism” to support that infrastructure through regional cost-sharing, an important tool since over 50,000 people from throughout the region come through downtown Traverse City on a daily basis.

Under state law, a Development Area Citizen Council – consisting of nine residents who reside within the TIF district – must review the new plan. DDA board members voted unanimously Friday to send Moving Downtown Forward to the council for review. Once formed, the council will likely review and make a recommendation on the plan in February. Moving Downtown Forward would then come back to the DDA board for formal approval in March, go to the city commission for a first look in April, and then be scheduled for a public hearing and city commission vote in May.

Slosky noted that a group of citizens recently submitted a ballot petition to amend the city charter to require a public vote on TIF plans. He questioned whether the DDA and city commission should move ahead with approving Moving Downtown Forward this spring while that ballot proposal looms. But Mayor Amy Shamroe said the DDA is following the legal process in place now for extending a TIF plan and is following a timeline that’s been publicized for months. The ballot petition likely won’t be voted on until next November, and “what’s proposed on the ballot or may not even pass,” Shamroe pointed out. In the meantime, residents will have “a lot of opportunity” to weigh in on Moving Downtown Forward over the next several months, DDA Chair Gabe Schneider said, as meetings of the DDA, city commission, and Development Area Citizen Council will all be public.

The next step is for an ad hoc committee of DDA board members and city commissioners to appoint the members of the Development Area Citizen Council. Those members must live within the TIF district under state law. DDA board members agreed Friday to have Slosky, Pete Kirkwood, and Scott Hardy serve as DDA representatives, joining Commissioners Mi Stanley, Mitch Treadwell, and Jackie Anderson on the ad hoc committee.