TIF 2 Stays, Tax Baseline To Be "Reset"
June 2, 2015
Traverse City commissioners have voiced support for keeping the city's tax increment financing (TIF) 2 district in place and to "reset the base," a move which re-calculates the baseline at today's property values and captures the new tax increase going forward.
The district, which covers Old Town, Rivers Edge, Midtown and Riverine Apartments, is set to expire in 2016. Creation of the district in 1985 froze taxable values of all parcels in its boundaries at 1985 rates as a "base" for the 30-year lifespan of the plan. As property values have increased over time, taxes on the difference between those base rates and the actual property values have been captured by the Downtown Development Authority (DDA) to pay for public improvements to the area, spurring more private investment. It has been celebrated by many community leaders, including the Traverse City Area Chamber of Commerce, as an economic development success story.
The discussion at City Commission's regular meeting last night did not require a formal vote but is the first step in creating a new plan for the TIF 2 district going forward.