Downtown Traverse City’s boundaries could expand to include the Eighth Street corridor and portions of Lake and Woodmere avenues under a proposal set to be discussed by Downtown Development Authority (DDA) board members at their 8am meeting today (Friday).

The North Boardman Lake District (NBLD) – a group of business owners, employees, and residents along Eighth Street and north Boardman Lake – are petitioning the city to officially become part of downtown Traverse City. The group sent a memo to Derenzy outlining their goal of expanding downtown’s boundaries to include Lake Avenue up to Oryana Natural Food Co-op and Eighth Street down to Barlow Street, as well as a small section of Woodmere Avenue encompassing the Traverse Area District Library and Depot neighborhood. Business owners from Commonplace, Twin Bay Glass, JenTees Custom Logo Gear, Traverse Community Music, The Filling Station Microbrewery, Raduno, Oryana, and new planned Eighth Street development Commongrounds Cooperative all signed the petition.

According to NBLD members, expanding downtown’s boundaries would provide several benefits to businesses, the DDA, and the city. “Marketing and branding of the NBLD would be coordinated with other downtown districts, by the most experienced staff and resources in the area, without creating a new organization or committee to administer,” the group wrote. “The current DDA boundaries (will) expand to an area ripe for well-intentioned development that includes a committed group with resources, insights, and energy.”

Expanding the DDA would also allow Eighth Street business owners to qualify for redevelopment liquor licenses, significantly cheaper liquor licenses than traditional licenses that are currently only available to downtown business owners – providing “incentive for lively, mixed-use development along (the) corridor,” according to the proposal. The NBLD also pointed out that becoming part of the DDA would provide business owners “access to grant and loan opportunities for corridor improvements.”

NBLD is only seeking to expand downtown’s boundaries, not become part of a DDA tax increment financing (TIF) district. “We do not propose an expansion of the DDA TIF district and would instead consider an addition of a millage to our district’s property owners and other funding tools to finance NBLD corridor improvements,” the group wrote.

However, Derenzy is seeking board approval to explore the feasibility of expanding the DDA’s TIF 2 district to encompass the Eighth Street corridor. In a memo to the board, Derenzy wrote that it was “important to review not just the expansion and impact, but how economic tools would/can be utilized to assist in the growth of the corridor.” Expanding the TIF 2 district would allow tax growth to be captured on businesses along Eighth Street and used to fund public improvement projects in the district, such as the reconstruction of the road. Derenzy tells The Ticker she’s not advocating for any particular approach yet, but rather wants to “put everything on the table” so the DDA can explore the pros and cons of various scenarios, including expanding the boundaries – and looking at what those boundaries should be – as well as possibly expanding TIF 2.

Expanding TIF 2 would require the cooperation of other local taxing jurisdictions, including Grand Traverse County, the Bay Area Transportation Authority (BATA), Northwestern Michigan College, and the library – any of whom could opt out if the plan’s boundaries were expanded. The TIF 2 district, which covers Old Town, Rivers Edge, Midtown, and Riverine Apartments, was first created in 1985 and froze the taxable values of all parcels in its boundaries as a "base" for the 30-year lifespan of the plan. Any tax increases from growing property values above the baseline were captured to pay for public improvements.

In her memo to the board, Derenzy noted that TIF 2 recently “reset” its base, a move that re-calculated the base at today's property values and will now capture new tax increases going forward. The move provided a fresh injection of cash to local taxing jurisdictions; the City of Traverse City receives $610,354 annually in new general fund taxes because of the reset, for example, while the county receives $253,550. Derenzy says it’s important to look to the DDA’s “largest partnership” group – local taxing jurisdictions – for input on expanding TIF 2 and whether such a move could bring new economic development to Eighth Street.

If DDA board members authorize Derenzy to explore expanding the TIF 2 district, the CEO outlined a process she will follow to investigate the feasibility of the plan. Steps include meeting with property owners in the district, reviewing how the expanded boundaries would fit within the city’s master plan, meeting with other taxing jurisdictions, completing a cost overview and draft scope of public projects that could be completed through tax capture, and identifying “advantages and disadvantages” of expanding TIF 2, according to Derenzy. She estimates it will take at least three to four months before she returns to the DDA board with a recommendation on Eighth Street. “It’s going to take time to reach out to the taxing jurisdictions, the property owners, and the constituents to get input,” she says.