Traverse City News and Events

City Approves TIF 2 Plan, Sets January Vote On Darga Development

Dec. 20, 2016

Traverse City commissioners narrowly approved a new tax increment financing (TIF) 2 plan for the Old Town district and agreed to schedule a January 17 vote on a proposed mixed-used development by Thom Darga at their Monday night meeting.

Commissioners voted 4-3 to approve the new TIF 2 plan covering the area including Old Town, River’s Edge, Midtown, Riverine Apartments and Hannah and Lay parks. The plan describes nearly $39 million in public improvement projects in the area over its 25-year lifespan, which would be paid for through taxes captured on rising property values in the district. Commissioners Michele Howard, Richard Lewis and Jim Carruthers opposed the plan, citing reasons including TIF 2 having exhausted its useful purpose and not wanting to capture funds from millages and other local taxing authorities, such as the Traverse Area District Library and Bay Area Transportation Authority.

"I feel that taking money from those other taxing authorities takes money from our actual citizens," Howard said, saying downtown projects should "get in line" with other area projects for funding. But other commissioners countered that the city core provides infrastructure and services used by residents throughout the entire region, and that TIF capture was one of the only tools that "allows the region to bear the burden of those infrastructure improvements," in the words of Commissioner Tim Werner. Commissioner Brian Haas also said that "when you look at the taxes that commercial corridors generate, it really does a lot to subsidize the rest of the community and the neighborhoods in between them."

Commissioners Monday also agreed to schedule an amendment to the city's zoning code - which would allow developer Thom Darga to build a taller mixed-used development in the Warehouse District - for possible enactment on January 17. Darga is seeking to build up to 60 feet instead of the 45 feet allowed by right at the former Fifth-Third Bank property on Union Street. He plans to build a new four-story development called Warehouse Flats between the Boardman River and Garland Street offering retail/restaurant/office space on the ground floor and workforce rental apartments ranging from 550 to 1,200 square feet on the top three floors. 

Planning commissioners had previously struggled with the project and ultimately forwarded it to the city commission without taking a stance on the proposal because "we like the project, it is really what the city needs," said Commissioner Gary Howe, who sits on both boards. "But the conditional rezone is a specific tool typically that we don’t see for such a large project." Howe said officials struggled with balancing the private benefit of "adding 30 percent value to this project" for Darga against the public benefits the development would offer, including parking, rental apartments and access to and protection of the Boardman River waterfront.

Howe and other commissioners cautioned Darga their unanimous support for moving the project ahead for possible enactment did not guarantee a 'yes' vote on January 17. Werner said he hoped to "have a really thorough discussion" about rezoning properties on a piecemeal basis and other concerns expressed by city staff, while Howe encouraged Darga to sweeten the terms of his offer to the city. "I’m looking for an offer that equals the good that we’re giving the private developer…in terms of what is the public good we’re getting from it," he said.

Commissioners Monday also:

> Approved a special land use permit for a new $12 million Immaculate Conception elementary school;
> Passed a resolution of support for city facilities to get 100 percent of their electricity from renewable energy sources by 2020, to reduce the city's greenhouse emissions by pursuing renewable energy and sustainability projects and implementing at least two such projects each year until 2027, and creating an advisory "Green Team" to develop a plan for Traverse City to become carbon neutral before mid-century and advise the city on renewable energy projects;
> Approved the $800,000 purchase of a membrane for the city's wastewater treatment plant, with a plan to buy another four membranes over the next four years at the same price;
> And appointed Rusty Jones to a term on the Brown Bridge Advisory Committee and Janet Fleshman to a term on the city planning commission.

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