TRAVERSE CITY — Voters in Traverse City could get their first chance to decide the future of a downtown tax increment finance district.
But before city leaders commit to putting TIF 97 on the November ballot, they’ll meet with the Downtown Development Authority to answer two key questions. One is whether a future TIF plan should capture city and county taxes as TIF 97 has for nearly 30 years. Another is what projects should that tax capture pay for.
City commissioners and DDA board members will meet Monday for a joint study session to discuss those two points. Authority CEO Harry Burkholder said the two boards will have a collaborative conversation to ensure the DDA’s proposed projects align with the city’s strategic goals
“That’s certainly part of the discussion, is where those alignments are and are there gaps, how do we recognize those gaps and move forward with a collaborative approach to the work that happens downtown,” he said.
Local governments have until late July to decide whether to put questions on the Nov. 2 ballot, with a July 28 deadline for clerks to certify the ballot language, according to the Michigan Secretary of State.
As TIF 97 nears its final year, the DDA has been discussing and revising ideas for a renewed tax increment finance plan over the past few months, Burkholder said. The authority is looking at a list of future downtown projects, with estimates for some in the tens of millions of dollars, focused on everything from mid-block crosswalks to overhauling a block-long stretch of the Boardman-Ottaway River’s banks to a more natural state.
Mayor Amy Shamroe serves on the DDA board and took part in the subcommittee that drafted the project list, she said. She’s looking forward to not only hearing what city commissioners think of the results, but for the public to get a chance to see the proposal.
Tax increment finance paid the local matches for four state-funded bridge projects in the heart of the city, Shamroe said. Projects that an extended or renewed TIF plan could fund include more core infrastructure, like rebuilding East Front Street from State Street to Grandview Parkway, plus aesthetic add-ons like a “gateway” installation.
“I think the public should see that as well, because people can talk about it pro or con, or what it is trying to do or what the tool might be able to be used for,” she said.
Tax increment finance diverts the growth in a district’s taxable value over the base year to spend on projects within that district. That capture includes growth in both city taxes — currently $2.6 million per year — as well as in taxes that Grand Traverse County and various countywide millages would typically collect — $1.9 million per year.
So far, TIF 97 has captured a total of $46,039,015, of which $24,615,763 is from city taxes and $21,423,253 is from the county, according to City Treasurer and Finance Director Heidi Scheppe.
Renewing or extending TIF 97 presents a trade-off. With it, the city could reap millions more for projects in a downtown with a small footprint but a regional draw — Burkholder repeated the longstanding argument that it’s the only revenue-sharing mechanism to build and maintain public infrastructure within the district.
But renewing it would also come at a cost to the county and the services its millages fund, and any city taxes TIF captures are restricted to be spent within the TIF district. Opponents of renewing TIF 97 long argued that focus on the downtown puts the rest of the city at a disadvantage while short-changing veterans, seniors and others served by county millages.
A citywide debate over the future of TIF 97 — since renamed to Moving Downtown Forward — led city voters to adopt two charter amendments in 2024. One requires voter approval for any new, amended or extended TIF plan. The second would have undone any changes to TIF 97 had the city made any prior to the 2024 election.
City Commissioner Ken Funk said he believes TIF can be a useful tool, but isn’t interested in seeing TIF 97 continue in its current form. Instead, he’s much more interested in one of four scenarios city leaders contemplated in past talks on the subject: renew the plan, but split the tax capture.
Agencies and institutions like Northwestern Michigan College and Bay Area Transportation Authority need the money that TIF 97 diverts, Funk said. That’s in part why city leaders promised in 1997 to let TIF 97 expire after its 30-year term.
“So I think that going forward, there should be a mechanism for sharing with those tax jurisdictions and letting them have some of this money back,” he said.
That includes Traverse City, which could see a boost to its general fund through a TIF revenue sharing agreement, Funk said.
Funk said he hopes both the city commission and DDA board are receptive to whatever ideas people bring to Monday’s discussion. It’s on the city and its downtown-focused component to draft a proposal, but it’s up to the voters to decide if they think it’s good enough.
“As a commissioner, I’m going to be part of the process and contribute, hopefully positively, and ultimately have some input on what’s going to go in front of the voters,” he said.
If you go What: Joint Traverse City Commission and Downtown Development Authority study session When: 7 p.m. Monday Where: Governmental Center, 400 Boardman Ave. How to watch: Cable ch. 191 or online at www.tacm.tv/GovTVNow.asp and www.facebook.com/cityoftc