TRAVERSE CITY- The Traverse City Downtown Development Authority took questions Monday night on its proposed Infrastructure First TIF plan, which goes before city voters Nov. 3.
The open house at the Traverse Area District Library drew residents on more than one side of the issue. Among them were an opponent of the plan and a voter still making up his mind.
The plan would modify and extend TIF 97 for 20 years. TIF 97 is the tax increment financing plan that has funded downtown infrastructure and services since 1997. Under tax increment financing, growth in property tax revenue within the downtown district is captured and reinvested there. TIF 97 expires Dec. 31, 2027.
DDA Executive Director Harry Burkholder said the plan has been several years in the making. “We’re just really glad that we’re able to provide information about what that plan includes and what the value of TIF is for Traverse City,” he said.
Burkholder said the most common misunderstanding he hears is that TIF is a new tax. “People think that TIF is a tax and it’s not a tax, right? These are taxes that are already being collected, and it’s just within the downtown area,” he said. “And it’s just how they’re distributed.”
He also said the money cannot go to private developers. “Statutorily it cannot,” Burkholder said. “This can only be used again for public infrastructure and public services within the downtown district.”
Burkholder said downtown draws some of the heaviest use in the region and has some of the highest demands for public infrastructure. “And so the value of TIF is that this provides a dedicated funding source to maintain and improve those facilities over time, and that’s beneficial to the entire community,” he said.
Grant Parsons, a Traverse City resident, said the existing plan should end on schedule.
“The old TIF 97 did its job. We don’t need another one,” Parsons said. “It’s supposed to expire at the end of next year. I’d like to keep the promise.”
His biggest objection is the tax revenue the district captures from other taxing authorities. “The main thing that bothers me is they’re taken from county agencies that need that money,” he said. He named millages voters approved for the Commission on Aging, NMC students, veterans, BATA and county programs. “The millages ought to stay right there,” he said.
Asked whether anything at the open house had changed his mind, Parsons said no. “I was just wondering how they’re trying to sell it,” he said.
Under the Infrastructure First plan, 30% of the captured revenue each year would go to Grand Traverse County and other taxing jurisdictions, something TIF 97 does not do.
The plan would also exempt from capture any special city or county millage approved by voters on or after Jan. 1, 2023, according to the plan the DDA board approved in June.
A 2024 amendment to the city charter requires voter approval for any TIF plan. If voters approve this one, it returns to the City Commission, which must take it up within 60 days.
Joel Taylor came to the open house to learn more. He said he had not heard much about the plan beforehand. “I’m a fence sitter. That’s why I’m here,” he said.
Taylor said one feature caught his attention: using the funds to leverage state grants. “I think that’s a great idea,” he said.
He said he still wants to weigh the costs and benefits before deciding. “I’m still reading through,” Taylor said. “I don’t have a strong opinion yet.”
Voters can read the full Infrastructure First TIF Plan on the city’s website or send questions to the Traverse City Downtown Development Authority