With two proposals on the ballot that could affect the future of tax increment financing (TIF) in Traverse City, officials at the Traverse City Downtown Development Authority (DDA) are undertaking a tricky balancing act – continuing operations to keep downtown running as usual while preparing for a potential existential upheaval if TIF 97 isn’t extended beyond its planned 2027 expiration.

That challenging reality was on display at the DDA’s board meeting last week, where members weighed whether to fund certain projects in light of the organization’s unknown future. The upcoming election could determine whether the DDA’s plans to extend TIF 97 – one of two TIF districts downtown and a primary funding mechanism for downtown improvements and projects – must go to a public vote. Proposal 1 on the ballot seeks to make the creation, amendment, or extension of any TIF plan in Traverse City – including not just DDA but brownfield TIF plans – subject to a public vote.

Supporters of the proposal have said it adds transparency and accountability to the process of using TIF and gives voters a direct voice in approving TIF plans. Critics have said it’ll render TIF unusable as a tool in Traverse City – including the ability to use brownfield for affordable housing, a new use recently approved by the state – due to the cost and time constraints involved with elections and grant funding cycles. Another ballot measure, Proposal 2, would undo any action taken by city officials on TIF 97 after January 1, 2024 unless that action was submitted to voters first.

While the DDA board already approved extending TIF 97 – as part of a new plan called Moving Downtown Forward – city commissioners have not taken up the plan. They recently determined they wouldn’t do so until after the election, given the proposals on the ballot. The passage of either ballot proposal would require the city to submit the TIF 97 extension to voters for approval first. According to City Clerk Benjamin Marentette, the next scheduled city election isn’t until November 2025. Holding a special election in May or August would cost approximately $45,000-$50,000, Marentette says – a cost that would likely be passed onto any entity wanting to put a TIF question to voters sooner than next November.

That means that should the proposals pass, the DDA isn’t likely to have answers anytime soon on the future of TIF 97. Though the Michigan Attorney General’s Office has opined that Proposal 1 conflicts with state law – setting up a potential legal challenge if it passes – any court proceedings would also take months or years to resolve. Given the unknowns, DDA board members agreed Friday to have the board’s executive committee analyze a list of upcoming projects and make recommendations on which ones should be prioritized for the next three budget cycles, considering the possibility TIF 97 could end in 2027.

“We now have a completely new budgetary scenario that says all of these expenses could come to an end in three years...we're in a new day, and we need to look at things with a different lens,” said Chair Scott Hardy. He said that could include putting projects on hold that may have been in the works for years, as board members decided to do Friday with a staircase leading down from the West Front Street bridge to the Boardman River riverwalk.

The developer of the 309 West Front Street project has granted an easement in front of that building for a pathway, and the DDA has long sought to build more pedestrian connections along the Boardman with the goal of eventually having a continuous riverwalk throughout downtown. However, bids for the connecting staircase down from the bridge came in significantly higher than expected – just over $246,000, compared to a $100,000 budget. The DDA is also in ongoing talks with the Traverse City Housing Commission about securing an easement to continue the path in front of Riverview Terrace, but hasn’t yet reached an agreement. Without that easement – and with a potentially limited pool of TIF 97 funding to work with – board members decided to put the staircase connection on hold.

“If you were inclined to look for stones to throw at the DDA, wasting money spending a quarter of a million dollars on a stair that goes to a pathway that is a dead end is a perfect projectile,” said board member Pete Kirkwood. He added he still wants to see a connected riverwalk system downtown, but that the remaining TIF 97 funds could likely be “better spent on some projects that are teed up and ready to be successful.” Hardy said the board is “going to run into any number of projects where we're going to have to say the same thing” in the next few years.

The executive committee is expected to narrow the list of planned downtown projects to approximately a half dozen that the full board could weigh in on and prioritize by the end of the year. Potential projects range from Rotary Square improvements to a new farmers market shed to Boardman riverfront upgrades to East Front Street renovations. The DDA has a projected $9.3 million to spend on capital improvements over the next three years in the TIF 97 district, which covers the core of downtown.

In the meantime, the DDA is working to continue operations as normal. The organization announced the hiring of a new deputy director Wednesday: Lauren Bohac, who previously worked in Lansing as chief of staff for State Senator Mary Cavanagh. Bohac will begin in her new role Monday. Some projects are also moving ahead downtown, with the board voting Friday to approve a $6,500 contract with Gosling Czubak to develop a landscaping plan for the J. Smith Walkway. DDA Executive Director Harry Burkholder said the city park is “not an inviting space” right now, with the goal of beautifying it next spring with various natural plantings. Board members also heard an update Friday on a new downtown restaurant composting program, a pilot project that already has five businesses enrolled with the goal of expanding to 10 or more.

Downtown events are also proceeding as planned for now. DDA Director of Events & Engagement Sara Klebba outlined several of those events Friday, including a new Haunts & Harvest Window Walk event taking place now through Halloween, the Downtown Halloween Walk Saturday, Shop Your Community Day November 9, the Light Parade/Tree Lighting/Santa’s Arrival November 23 (with Santa’s House moving back to City Center Plaza this year at the corner of State/Cass), and Ladies’s Night and Men’s Night (December 5 and 12 respectively). Traverse City Restaurant Week is also planned to return February 23-March 1, Klebba said.