New Report Identifies Recommended Downtown Expansion, Projects, TIF Extension
By Beth Milligan | Oct. 29, 2022
A new report focused on the current and future needs of downtown Traverse City – including how the TC Downtown Development Authority (DDA) should be funded and governed – calls for better inclusion of “edge districts” like West Front Street and East Eighth Street into downtown, focusing on bonding and completing key infrastructure projects like the planned West Front Street parking deck and new civic square, and extending the TIF 97 district for another 30 years. DDA board members and city commissioners will review the report in a special joint meeting Wednesday at 7pm in Rooms 106 and 107 at NMC’s Timothy J. Nelson Innovation Center, followed by two public open houses Thursday from 12pm-1:15pm and 5:30pm-6:45pm at the Delamar Hotel.
Consulting firm Progressive Urban Management Associates (P.U.M.A.) has been leading a planning project called Moving Downtown Forward, the goal of which is to analyze the DDA’s organizational structure and funding mechanisms, compare downtown Traverse City to other downtowns across the country, and look at national trends and best practices to make recommendations on how the DDA can position both itself and downtown in general to thrive in the coming years. After capturing input from more than 1,300 local residents and stakeholders – plus completing a market assessment of the opportunities and challenges facing downtown Traverse City – P.U.M.A. will present its final draft report to city leaders and the public next week.
The report identifies several “key takeaways” from the community engagement survey and market assessment. While downtown has “emerged as a strong economic engine and gathering place for the region” – particularly compared to 25 years ago, when it faced empty storefronts, polluted parcels, and a lack of private investment – it still has vulnerabilities today, according to P.U.M.A. “Vulnerabilities facing downtown include retaining and supporting small, independent, and distinctive businesses; availability of housing affordable to the workforce, lower income, and younger populations; determining how new infrastructure and investment in downtown can support sustainability in all of its dimensions (economic, environmental, and equity); and protecting and preserving a vital downtown in the uncertain times ahead,” the firm states.
Regional prosperity is tied to having a “vital” downtown Traverse City, P.U.M.A continues, noting that downtown “serves as the economic anchor not only for the city, but for the region.” Accordingly, “downtown isn’t ‘done,’ and the community has clear priorities for downtown moving forward.” Top identified community priorities include improving stormwater and wastewater management downtown, increasing parking supply by adding more parking structures, making downtown more pedestrian-friendly and accessible, and increasing downtown housing options. P.U.M.A. flags five “guiding principles” the DDA should use to prioritize investment going forward, including: “Design a Great Place for All Ages and for Future Generations,” “Advance Environmental Sustainability and Stewardship,” “Protect and Preserve Small Local Independent Businesses,” “Champion the Development of Attainable and Workforce Housing,” and “Support Job Growth and Varied Career Opportunities.”
The report also contains key recommendations for DDA funding and governance. P.U.M.A. notes there are “limited options” in Michigan for raising funds for public infrastructure projects, including the capital improvement program (CIP) in local government budgets, competitive state or federal grants, and tax increment financing (TIF) through a DDA. “TIF is the only mechanism in the state that enables regional cost-sharing of localized improvements,” P.U.M.A. writes. “In the case of a downtown, the logic follows that downtowns typically provide economic benefits beyond the boundaries of a local government, and that downtowns are often utilized by residents and visitors from outside of a local government boundary. Therefore, it is fair and reasonable to ask regional beneficiaries to share in the cost of downtown improvements.”
Given the “absence of other financial tools and resources” and the number of major infrastructure projects still needed downtown, P.U.M.A. argues “that the smart, cost-efficient, and fair option to fund additional public infrastructure projects in downtown Traverse City is with a 30-year extension of TIF 97 through a revised tax increment financing plan.” With TIF 97 set to expire at the end of 2027, extending it would generate approximately $4 million in the first year (2028). P.U.M.A. recommends the DDA split up that annual revenue into three buckets: 70-80 percent ($2.8-$3.2 million) bonding for transformative projects like the West Front parking deck, civic square, and riverfront improvements; 15-20 percent ($600,000-$800,000) for DDA operations and services; and 10 percent ($400,000) for revenue share with other taxing jurisdictions. P.U.M.A. cautions that “If the DDA and TIF go away, City of Traverse City taxpayers will bear 100 percent of the financial burden of implementing the region’s priority physical improvements and services for downtown.”
The report outlines other ways the DDA can generate more revenue, including recruiting more sponsors for downtown festivals and events, contracting with the city for certain downtown services (like trash clean-up and park maintenance), and seeking more charitable contributions through a DDA-affiliated 501(c)(3). On the governance front, P.U.M.A, recommends “stronger definition of (DDA) board seats…to ensure that downtown stakeholders are directly represented,” including a mix of property and business owners/use types and a seat for a downtown resident. The Downtown Traverse City Association (DTCA) – downtown’s merchant association – should also “amend its bylaws to broaden its ability to create a conduit to diversify funding for downtown projects; offer board and committee involvement options that are inclusive of a variety of downtown stakeholders; and be an advocate for downtown by providing education and analysis on issues impacting downtown,” according to P.U.M.A.
The report highlights the importance of focusing on “edge districts” on the DDA outskirts, as well as new community and management partnerships that may be needed going forward. P.U.M.A. specifically calls out West Front Street and East Eighth Street as areas where streetscape improvements and business growth have increased activity. “While TIF boundaries are firm, DDA district boundaries are more flexible and adaptable,” P.U.M.A. notes. “Therefore, there are opportunities to bridge the borders of downtown’s varied subdistricts moving forward, creating a more seamless experience throughout the greater downtown area…there are several options for bringing DDA services to these districts, including expansion of the DDA district.” The DDA could also offer an “opt-in” option for edge district businesses to pay the same 2 mill levy as other downtown businesses in exchange for services and support, and/or create a Downtown Improvement District or Business Improvement District in those neighborhoods.
“Importantly, the DDA should also consider organizational options and opportunities that might not be able to be envisioned today,” P.U.M.A. concludes in its report. “Additional affiliates may be needed over time to accommodate a new improvement district (i.e., Eighth Street), management of a new public space (i.e., civic square), or perhaps a joint venture development and management opportunity with a community and/or civic partner.”
After residents and city and DDA leaders have a chance to review the report and weigh in next week, the DDA is next expected to start working on a plan to implement its findings and recommendations, according to DDA CEO Jean Derenzy.
Pictured: Excerpt from the P.U.M.A. Moving Downtown Forward reportComment