Traverse City Downtown Development Authority (DDA) board members will get an overview of the proposed 2021-22 budget Friday, a plan that includes numerous downtown projects including a potential retail incubator to help businesses launch or expand post-pandemic, continued tree planting and beautification efforts, ongoing support for a downtown police officer, and studies on possible changes to State Street and the Sara Hardy Downtown Farmers Market. While parking revenues took a significant hit during the pandemic, they are starting to rebound this year, with rate and meter changes underway aimed at increasing funds.

DDA CEO Jean Derenzy will present the proposed 2021-22 downtown budget Friday, with a public hearing slated for May 21 and final adoption scheduled for June 18. The DDA budget largely consists of four main sections: the tax increment financing (TIF) 97 district, the Old Town TIF district, the general fund, and the parking fund. In TIF 97 – which covers the main part of downtown, including Front Street and the Warehouse District – the taxable value of the district is estimated at $155.6 million, with $3.1 million in captured taxes expected to come into the fund this year. Among other TIF 97 projects, Derenzy proposes to continue funding a community police officer dedicated to the downtown area, a position that was created in 2019 and still has two years left on a contract with the Traverse City Police Department.

Derenzy also wants to budget funds for what she describes as a “retail start-up program,” a type of incubator that is permitted under DDA legislation in Michigan and has been used by cities like Grand Rapids, Ann Arbor, and Sparta to help new businesses launch or expand in downtown cores. “As we begin to cautiously exit the pandemic, it is important to provide the opportunity for people wanting to start or expand their business, and to assist them in getting off to a good start and become self-sufficient and successful within our downtown,” Derenzy wrote to board members.

Other TIF 97 priorities include beautification – such as increasing funding for heavily used amenities like sidewalks and benches to keep “downtown looking fresh, clean, and cared for,” according to Derenzy – and infrastructure. A new downtown tree management plan is expected to result in replacing a “significant” number of trees next budget cycle, while new studies could update plans to improve the Farmers Market and determine costs to permanently convert State Street to a two-way street. Major looming questions that still need to be addressed are plans for a new West Front Street parking deck – Derenzy says the timing and costs of that project need to be “clearly identified and discussed” so the city and DDA can move forward – and the final price tag for downtown bridge projects. Repairs on the South Cass, Eight, and Park Street bridges were scheduled to start this spring, but bids just returned from the state came in higher than expected, so staff are working to recalibrate budgets.

In the Old Town TIF District – formerly TIF 2, which covers Old Town, River’s Edge, and Midtown – the district’s taxable value is $68.4 million, with projected revenues of $565,959 coming into the fund this year. The Old Town TIF district was recently “reset,” meaning captured taxes there are lower than in the older TIF 97 district but will increase over time. Among planned projects in Old Town is replacing the Midtown Riverwalk, which is over 20 years old and nearing the end of its lifespan.

In the DDA general fund, Derenzy recommends continuing a contract with Traverse Connect for economic development services. She also suggests the board begin “planning for the future” by looking at a “possible new administrative and funding structure for the DDA.” Derenzy tells The Ticker strategic planning could not only look at how the DDA is organized and funded, but at the DDA’s partnerships and service area (such as ongoing discussions to incorporate Eighth Street into downtown). “We’ve been in this structure for years…it’s time to really look at a new vision. Maybe there’s a different approach,” she says.

Parking, the last major area of the DDA budget, took a significant hit in revenues during the pandemic due to decreased traffic – including downtown employees working remotely – and several months where staff stopped enforcing meters. Parking losses were estimated at $1 million in the 2019-20 budget and $1.4 million in the 2020-21 budget (city budget cycles start in July and run through June). The DDA had to use surplus funds from prior years to balance the budget for two years to cover parking structure expenses. “We do not anticipate the Hardy or Old Town revenues to meet minimum operational expenses until employees begin to return to downtown offices,” Derenzy says.

Rate and technology changes are expected to help increase revenues, notably the upcoming installation of smart parking meters downtown. DDA Transportation Mobility Director Nicole VanNess says smart meters will be installed in May in the 100-400 blocks of East Front, 100-200 blocks of East State, 100 blocks of North and South Union, 100 block of North Cass, 100-200 blocks of South Cass, 100 block of Park, and 100 block of South Boardman. The new meters can take coins and debit/credit cards right at the parking spot, with new Parkmobile stickers coming later this summer that have a QR code and allow smartphone users to make a one-time payment without setting up an account. Meters in the 100-200 blocks of East Front will also have sensors, which detect when a parking space is vacated and zero out unused time at the space. Minor seasonal rate increases will be implemented when the meters are installed; along with the removal of free-time buttons downtown, the collective changes are expected to increase both parking efficiencies and revenues.