Traverse City residents may face a critical decision about the financial future of their downtown this fall. The Downtown Development Authority (DDA) is set to vote on a new tax increment financing (TIF) plan that would replace the existing TIF 97 district when it expires next year.

If approved by the board, the proposal goes to voters on the November 3 ballot.

A Shift to Infrastructure

DDA Executive Director Harry Burkholder described the new proposal as a "back-to-basics" approach. The plan, currently named Moving Downtown Forward, is being rebranded as the Infrastructure First TIF Plan following community feedback over the last two years.

"One thing we heard loud and clear was an emphasis on returning to the basics of infrastructure: streets, alleys, sidewalks, utilities, trails, stormwater," Burkholder said.

City projections identify more than $41 million in ongoing core service and infrastructure maintenance needs downtown over the next 30 years. The DDA identified an additional $42 million in costs for maintaining public spaces and essential services during that same period.

The 20-year plan focuses on:

  • Core infrastructure repairs
  • Trash removal and public restrooms
  • Holiday lights and wayfinding signage
  • The farmers market and a dedicated downtown police officer
  • Annual commitments of 2 percent to city-led repair projects and 2 percent to stormwater improvements

Revenue Sharing With Local Partners

A major revision in the latest draft introduces a revenue-sharing model. TIF districts capture taxes on rising property values to fund public improvements. Under the current structure, the DDA retains most of that capture. The new plan proposes splitting the revenue with other taxing jurisdictions.

The plan projects $127.3 million in total revenue over two decades. Under a proposed 70-30 split:

  • $89.1 million would go to the DDA
  • $38.2 million would go to local partners

More than $18 million* to the City of Traverse City

$7 million* to Grand Traverse County

* Shares for Northwestern Michigan College and the Benton Harbor Area Transportation Authority

"This is in response to what we heard about sharing the growth of TIF with our taxing partners," Burkholder said.

The Road to November

The DDA board votes on the plan at its 9 a.m. meeting Friday. If adopted, the proposal moves to city commissioners to approve ballot wording in July. City policy requires the commission to put the issue to voters.

If voters approve the plan, commissioners have 60 days after certification to approve or reject it. Commissioners are not compelled to approve a TIF plan simply because voters did. If voters reject it, commissioners cannot take it up again without a new vote.

State Street and Other Updates

The DDA board also heard recommendations regarding the long-term design of State Street. The city’s Complete Streets Advisory Committee supports keeping State Street as a two-way traffic pattern.

"It is the committee's opinion that a two-way configuration on State Street better aligns with Complete Streets principles than a one-way configuration," the committee stated in its June 2 meeting minutes.

City Manager Benjamin Marentette will bring the issue to commissioners at their July 6 meeting. Keeping State Street two-way could require six-figure investments in traffic signal modernization and other improvements. Converting it back to one-way would cost an estimated $62,395 in construction changes.

The board also received updates on three major projects:

  • A new farmers market pavilion in Lot B, with construction tentatively starting July 13
  • Improvements to Rotary Square, with bid documents planned for this fall
  • Riverwalk improvements near the J. Smith Walkway, coming before the board in July