Traverse City Downtown Development Authority (DDA) board members will vote to approve a new tax increment financing (TIF) plan that would replace TIF 97 at their 9am meeting today (Friday). If adopted, the TIF plan – which Executive Director Harry Burkholder says is a “back-to-basics” approach emphasizing infrastructure investment, day-to-day upkeep, and revenue-sharing with local partners – would go to voters this November for approval.

Board members will also hear several downtown project updates – including a recommendation from the city’s Complete Streets Advisory Committee to keep State Street two-way – and approve funding a retail market study.

New TIF Plan
A new downtown TIF plan could be headed to voters this fall if DDA board members approve it and send it to the ballot.

The board today will review the final version of the new Moving Downtown Forward (MDF) plan, a 20-year plan that would replace TIF 97 when it expires next year. TIF 97 is one of two TIF plans that help fund most downtown programs and projects, along with Old Town TIF. A previous version of MDF, which was put on hold in 2024 when voters approved a ballot proposal requiring a public vote on TIF plans, had a 30-year length and a significantly different list of projects than what’s proposed today.

Burkholder says that’s the result of 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,” he says. Staff are in fact proposing to change the plan’s name from MDF to the Infrastructure First TIF Plan. According to Burkholder, city projections have identified “more than $41 million in ongoing core service and infrastructure maintenance needs” downtown over the next 30 years, while the DDA identified $42 million in “costs associated with maintaining downtown infrastructure, public spaces, and essential services over the same period.”

The plan, Burkholder says, therefore focuses on the “core programs and services that keep downtown Traverse City safe, clean, accessible, functional, and economically strong.” In addition to infrastructure, that includes things like trash removal, holiday lights, wayfinding signage, public restrooms, the farmers market, and a downtown police officer. The plan also commits two percent annually to city-led repair/maintenance projects and two percent annually to stormwater improvements, or about $1.7 million per category over the plan’s lifespan.

Another major revision to the latest draft is the introduction of a new revenue-sharing model with other local entities. TIF districts work by capturing taxes on rising property values within their boundaries to fund public improvement projects. Under the proposed plan, the DDA wouldn’t keep the full TIF tax capture but instead split the revenue with taxing jurisdictions like the city, the county, NMC, and BATA.

The new TIF plan is projected to generate $127.3 million in total revenue over the next two decades, with the plan set to expire in 2047. Under a proposed 70-30 split, $89.1 million of that would go to the DDA. Another $38.2 million would go to the local taxing partners – including over $18 million to the City of Traverse City and $7 million to Grand Traverse County. “This is in response to what we heard about sharing the growth of TIF with our taxing partners,” explains Burkholder.

If approved by the DDA, the Infrastructure First TIF Plan would go to city commissioners to approve the ballot wording in July, with the proposal then to appear on the November 3 ballot. The commission is required under city policy to put the issue to voters. If voters approve the TIF plan, it goes to city commissioners within 60 days of the election results being certified for their approval or rejection. Commissioners are not compelled to approve a TIF plan just because voters did. If it’s rejected by voters first, however, commissioners won’t take it up. There is no limit to the number of times a TIF plan could go to voters, though the DDA would have to help cover costs if a special election was required for any vote.

Also at today’s DDA meeting…
> Board members will receive an update from Burkholder on several downtown projects. Notably, the city’s new Complete Streets Advisory Committee (CSAC) has weighed in on the proposed long-term design for State Street, supporting keeping a two-way traffic pattern in the corridor.

“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 group’s June 2 meeting minutes state. “A two-way street enhances accessibility and connectivity for all users while also providing operational benefits. In addition, it improves traffic circulation and offers greater flexibility for managing vehicle movements during events and street closures on Front Street.”

The DDA board also previously voted to support a two-way design. City commissioners have the final say but held off making a decision until CSAC could weigh in. City Manager Benjamin Marentette says he will bring the issue to commissioners at their July 6 meeting. The city is expected to invest in a series of improvements if State Street remains two-way permanently, which could range from modernizing traffic signals at key intersections to extending two-way operations on Front Street between Pine and Union and Park and Boardman to improve downtown flow. Cost estimates vary depending on improvements but will likely be in the six figures. Converting State Street back to one-way traffic would also have required construction changes at an estimated cost of $62,395.

Burkholder will also share the latest with three major TIF 97 projects underway. Construction on a new farmers market pavilion in Lot B is tentatively scheduled to begin on July 13 and continue through the fall. The Sara Hardy Downtown Farmers Market will relocate to the Old Town parking deck during National Cherry Festival and then move to Rotary Square while the pavilion construction is underway. Work is also continuing on Rotary Square itself, with bid documents on park improvements planned to be released this fall and a groundbreaking planned for next spring. The last project, riverwalk improvements near the J. Smith Walkway, will come before the DDA board in July for approval to proceed with construction drawings. 

> Finally, board members will vote to approve a $32,500 contract with Progressive Urban Management Associates (P.U.M.A.) to complete a downtown market study. The group will update data from a previous 2022 study and evaluate current economic conditions affecting merchants, as well as conduct “research into programs, policies, and best practices being utilized by downtown organizations and municipalities across the country to support and retain local independent businesses and maintain a diverse downtown business mix.”