Grand Traverse County commissioners voted 8-1 Wednesday to support a resolution asking Traverse City commissioners to reject extending the downtown tax increment financing (TIF) 97 plan – even if city voters approve it. The request drew condemnation from some city and TC Downtown Development Authority (DDA) leaders. Municipal tensions also arose when county commissioners approved nearly $387,000 in Governmental Center repairs and criticized the city for not paying its perceived fair share of the cost.

The county’s resolution opposing TIF 97 came after a closed-session discussion among commissioners on September 2. The resolution was included on their consent agenda Wednesday but pulled for discussion. The resolution said that while Grand Traverse County “values its longstanding partnership with Traverse City and remains committed to collaboration on shared goals and priorities…maintaining the long-term fiscal stability of the county must be the priority.”

The TIF extension, which would rename TIF 97 to the Infrastructure First TIF Plan and fund a new list of public improvement projects downtown over the next 20 years, heads to city voters on November 3. Because it’s a continuation of an existing plan, other taxing jurisdictions – such as the county, NMC, and BATA – can’t opt out of participating. However, the plan includes a new revenue split in which 70 percent of funds would remain downtown and the other 30 percent would be returned to jurisdictions, including the county.

Even with that arrangement, millions of dollars would still be diverted to the downtown area that “would otherwise be available to fund essential county services,” the commission resolution states. Vice Chair TJ Andrews said commissioners “don’t have any say in what these funds are being used for” and that there are bigger needs elsewhere in the county, like addressing homelessness and aging infrastructure. Commissioner Rob Hentschel said the county could still choose to partner with the city on funding certain projects if it wanted, saying TIF 97 was “meant to be one and done” and suggesting the DDA explore other funding tools.

However, Commissioner Ashlea Walter – whose district covers the city – said TIF is one of the only available “tools in our toolbox” to cover downtown maintenance costs. The plan is “one small way the rest of the county” contributes to upkeep in the city core, which is used by residents countywide, she said. “We have huge infrastructure needs downtown that are very expensive,” she said, calling the TIF plan “a well-balanced” proposal. Walter was the sole ‘no’ vote against the resolution, saying the issue should be “up to the taxpayers to decide.”

That sentiment was echoed by city leaders, who were particularly critical of a provision encouraging electors to reject the proposal and city commissioners to reject the plan even if voters do approve it. DDA Chair Ed Slosky said the county should focus on collaborating with its local partners, not “work against them by proclamation,” and “let the electorate of Traverse City decide this issue as they have self-determined through their city charter.”

Traverse City Mayor Amy Shamroe tells The Ticker the resolution was an “overreach,” calling it “entirely inappropriate” for county commissioners to tell city residents or leaders how to vote. She said county commissioners had “ample opportunity” to share their thoughts on TIF prior to the plan going on the ballot, including at dozens of public meetings.

“This has been a very open and transparent process, and if officials had concerns, they had an obligation to approach us rather than not being engaged in the process and then crying foul once the process is over,” she says. CEO Harry Burkholder notes the DDA had discussions with the staff of every taxing jurisdiction about the new TIF plan as it was being created. Community feedback was what generated the 70-30 revenue split, he cites as an example, adding the DDA has had a “working relationship with the county and city for almost 30 years of TIF infrastructure that serves the entire county.”

County-city tensions flared up during another agenda item Wednesday. Commissioners approved spending just shy of $387,000 for urgent repair work to the Governmental Center. The work – which is “necessary to maintain the structural integrity of the building” and current occupancy levels, said County Director of Parks and Facilities John Chase – will address corroded beams, decking, exterior joints, and concrete. Water infiltration has been a challenge at the site, with a future phase of work – which would address several other major repairs and extend the building’s life by two decades – estimated at $7-8 million.

A building operating agreement states that the county and city will split repair costs along 74-26 percent lines. Commissioners have long desired to update that decades-old agreement, which used to reflect county/city usage of the building but no longer does, said County Administrator Nate Alger. He called the city a “tenant in common,” pointing out that if the Governmental Center were sold, the county and city would each get 50 percent of the proceeds. If that’s the case, “the city should be responsible for 50 percent of the capital improvements to the building,” he said.

However, discussions on updating the agreement have dragged on for years. In the meantime, County Finance Director Dean Bott said he can only bill the city for 26 percent of the upcoming repair work under the agreement. “I can tell you we are frustrated about this process,” Alger said. He added that one option would be to “terminate the agreement.” Commissioners could do so with 60 days’ notice prior to October 1 each year, meaning they couldn’t in 2026 but could in 2027, he said. “That leaves us in a pickle, but that’s the nuclear option,” he said. “This is going to come to push very soon.”

Commissioners voted to have their legal counsel review all options, up to and “including termination.” County attorney Matt Nordfjord said he had thoughts on the issue, though “some of them may not be ripe for public consumption” yet and would require closed-session discussion. Shamroe says that talk about splitting building proceeds are “premature” given the extensive process city and county leaders are still going through to determine the future of the Governmental Center. She says the city-county building committee has been “meeting regularly” and will continue to discuss operating terms and shared expenses.

“I understand the desire to revisit an old agreement,” she says. “Nobody’s closing the door on any conversations.”