The proposed Downtown Development Authority “Infrastructure First” TIF Plan (IF-TIF) would capture $140 million in downtown taxes over the next 20 years.
The plan proposes $59 million for a Boardman/Ottaway River infrastructure project which would slope the river banks down to the water, plus add boardwalks and amenities – like San Antonio, Texas – even though it would only be usable part of the year.
The plan also includes $15 million for a downtown snowmelt system and $7 million for East Front Street streetscaping, including a gateway feature. These are all DDA “wants,” not “needs.”
Do we really want these things more than investments in our city roads, water and sewer systems as well as the many pressing county/city needs (jail, courthouse, 911, government center, housing, homeless) and funding the city pension fund obligations?
Do we want them more than giving Northwestern Michigan College, BATA, Commission on Aging, Senior Center, veterans, and Road Commission their full funding from voter-approved millages? I think not.
Let’s look at the history of TIF-97:
By 2027, the DDA will have captured more than $50 million of downtown property taxes. TIF-97 proposed more than $66 million of public improvement projects, including four parking decks for $42+ million. But only $21 million of TIF-97 funds have so far been spent on infrastructure – the vast majority ($16 million) has gone to pay off a Hardy Parking Deck bond. Most of the remaining funds have gone to DDA salaries, benefits, administration, and professional services (studies, planners, designers, engineers).
For example, during the 2024/2025 fiscal year, the DDA spent $2.3 million on professional services. This is because the DDA lacks the expertise to undertake and manage infrastructure projects. The city has that expertise and should be directly responsible for downtown infrastructure. Given this history, one can expect that a substantial share of the $140 million will go to the DDA bureaucracy – along with studies and consultants.
If TIF-97 were given a grade, it would be a “C” at best – or an incomplete.
There are other ways to fund downtown infrastructure besides TIF. Those projects can compete for – and be funded in – the city budget, like all other city projects. Special assessments could be used, for example, if businesses really want a snowmelt system. Grants can also be used. (Grants funded the majority of five downtown bridge projects.)
Lastly, the county has a revenue sharing policy, and several county commissioners indicated a willingness to share costs of specific city projects if TIF ends.
The Infrastructure First Plan proposes to annually fund the DDA at its current level ($4.5 million), with steadily increasing revenue for 20 years. As Milton Friedman said: “There is nothing so permanent as a temporary government program.”
Downtown Traverse City is not blighted, which was an original requisite for TIF plans. Our downtown is vibrant and successful. And we all love downtown TC!
But it is time to let TIF-97 end, and return downtown-captured property taxes to the city, county and voter-approved millages.
Please vote No on City Proposal One.