In addition to key projects like Rotary Square, a new farmers market pavilion, and riverwalk improvements, a new budget for the Traverse City Downtown Development Authority (DDA) includes funds for Union Street bridge and intersection repairs, expanded downtown cleaning and trash removal, a retail study, and Carnegie Building upgrades.

DDA board members met Friday to review the draft 2026-27 budget. The DDA’s fiscal year runs from July 1-June 30; the budget is typically approved each June along with the larger city budget. Deputy Director Lauren Bohac noted the DDA budget has three main funds: the tax increment financing (TIF) 97 fund, the Old Town TIF fund, and the general fund. General fund revenues come from a two-mill levy collected on all properties in the DDA district.

While the general fund is expected to have just over $2.4 million in revenues next year, about $1.4 million of that is coming from three grants. Those include a state grant for environmental cleanup on city property along State Street, a federal grant for Boardman/Ottaway River restoration work, and remaining Rotary Charities funding for Rotary Square. The general fund covers most of the administrative costs for running the DDA, from staff salaries to office expenses to professional services.

Both TIF funds capture taxes on rising property values within their districts over time to pay for public improvement projects and downtown operations. The Old Town TIF budget is about $1.4 million next year, which will leave a remaining fund balance of just over $1.5 million. One project is slated to take up half of the 2026-27 Old Town budget: the reconstruction of the Union and Seventh intersection in spring 2027. Though a city project with separate city funding attached, the DDA will contribute approximately $700,000 toward the work, according to Bohac.

Another $200,000 is rolling over from this year’s budget to next year’s for riverwalk improvements near FishPass. The DDA has also budgeted $25,000 to contribute to Carnegie Building repairs. The city sought that support since the facility is in the Old Town district. City commissioners in December received a report estimating needed repairs at Carnegie at nearly $600,000. The city is likely to tackle those repairs over multiple years and to seek grant support for doing so.

The DDA’s TIF 97 budget is approximately $7.8 million for 2026-27. The expenses are significant because the plan is nearing its expiration, with several major projects planned. DDA Executive Director Harry Burkholder gave updates on those projects Friday. Just over $3 million is included in the budget for the new farmers market pavilion, which will be built in parking Lot B starting this summer after the National Cherry Festival. The project is out to bid right now, with proposals due April 8. The DDA board will likely approve contracts at their April 17 meeting, which would then go to city commissioners for approval.

Once the pavilion is under construction, the farmers market will temporarily relocate to Rotary Square. Burkholder said that means improvements to Rotary Square, also included in the upcoming budget, likely won’t start until spring 2027. However, the bid package could be prepared and put out this fall so that “we’re approved and ready to start” as soon as weather allows next year, Burkholder said. City commissioners recently discussed the Rotary Square design and expressed support for using part of the alley to create a connection from Rotary Square to FishPass with an overlook, a move that would eliminate 14 parking spaces. The commission still needs to formally approve that change.

The TIF 97 budget also includes $400,000 to complete construction documents for a proposed redesign of the Lower Boardman/Ottaway riverwalk area near the J. Smith Walkway. A design approved by the board in January has an estimated $5.7 million price tag. Those costs would be refined through a bid process, with the DDA still to decide if it can tackle all or some of the improvements based on remaining funds. TIF 97 is expected to have about $5.2 million in its final year. The capture will be lower in the 2027-28 budget because its ends next December, meaning winter taxes won’t be captured.

The upcoming TIF 97 budget also includes $200,000 for improvements to State Street. While city commissioners still need to vote on whether they will keep State Street two-way, Burkholder said there will be costs attached regardless.  The DDA will partner with the city on another project in 2026-27, contributing approximately $150,000 toward repairing the North Union Street Bridge.

Both TIF funds contribute to a variety of other downtown programs and services, Bohac said. That list ranges from holiday lights to a downtown police officer to wayfinding signage to trash removal/recycling. The DDA plans to expand its “Clean and Green Team” program in 2026-27, working not only with SEEDS but a company called Bin Ninjas on downtown beautification. Bohac said the top issue they receive feedback on from residents and merchants is “cleaning up downtown.” Work will include more frequent cleaning and sanitizing of downtown trash receptacles – particularly during summer months, Bohac said.

The DDA has also budgeted $50,000 for a retail study this upcoming year. Burkholder said at the board’s February meeting that given the changing landscape of downtown – including market pressures on small local businesses, such as rising rental rates – that determining “what the future of retail looks like” and how the DDA can best support merchants is crucial. Maintaining a mix of small, independent retail stores and restaurants downtown is “something we all want,” he said.