Catching Up on TC News

It’s becoming more and more difficult to keep up with local goings on. Not everybody is thrilled with the directions being taken.

Traverse City officials reacted with shock and surprise when the Grand Traverse County board voted 8-1 to oppose the extension of the city’s Downtown Development Authority (DDA) TIF 97, or, as they initially called it, the Moving Downtown Forward TIF that has now been renamed to Infrastructure Only TIF. (One assumes the word “infrastructure” spiked during polling.)

TIF, or tax increment financing, establishes a property tax baseline then “captures” the taxes above that baseline over a predetermined length of time. That money is then used for projects specific to the previously established TIF district. The majority of the tax money being captured would have gone to the city’s general fund and smaller shares to the county, BATA, the library district, and NMC. Over the course of a TIF’s lifetime, which can be as long as 30 years, millions of dollars are captured.

While the current TIF extension proposal includes some form of give-back of some of the money captured from entities other than the city, the county would prefer to receive their money directly, not in the form of a rebate or refund, but up front where it can be accounted for and budgeted.

The county also pointed out a promise was made in 1997 that TIF 97 would be a one-and-done and there would be no efforts to extend it. But that was then, and no one who made that promise is still making decisions.

The city now claims they were “blindsided” by the county’s negative vote, that they had no conversations and had no inkling there was significant county opposition. The county leadership begs to differ and says they, in fact, had multiple meetings expressing their skepticism about supporting decades more of lost tax revenue. In fact, county leaders had been publicly expressing less than warm and fuzzy feelings about the TIF for some time, so it’s a bit of a mystery why the city is claiming shock and surprise.

The good citizens of Traverse City will have their say in November when Proposition 1 shows up on their ballots. A “Yes” vote extends TIF 97 for 20 more years, a “No” vote ends it, but the property tax money would keep flowing to the city and the other taxing entities.

Other naming conventions are changing too. There used to be low-income housing, but that was apparently too inelegant, so now we have affordable housing, workforce housing, and our latest entry, attainable housing. It would be much more honest if we called it what it actually is, which is subsidized housing.

It would appear virtually any multi-family residences will be subsidized either through reduced rents for the tenants or the now nearly ubiquitous PILOT (payment in lieu of taxes) program in which the property owner pays a flat fee, typically less than the actual property tax, every year instead of the increasing property taxes. The latest of these was just approved by the city commission for 45 years because they know the need for property and tax breaks will still exist nearly half a century down the road.

Developers would be foolish not to seek these tax breaks, as Traverse City appears to have free money for everybody. Let’s hope the loss of millions in tax dollars for TIF and PILOT programs isn’t needed someplace else in the city.

If we aren’t subsidizing, we are hiring consultants. This must be the promised land for consultants, because we believe we need them for almost everything. The latest is the city is going to hire consultants to help us figure out how many employees we’ll need and where in the future. In the private sector, this is something we expect managers to do as a normal part of their job: project staffing and budget needs for next year, for the next three or five years. (Ten years is foolish given how fast things now change.) Maybe the consultants will tell us to hire people who know how to project future needs to match the goals they should be expressing.

Much like every other community in the country, we continue to grapple with homelessness. Safe Harbor, our main shelter, expanded their hours once we closed the Pines, but they cannot serve everybody in need, and no level of housing is going to help some of these folks unless it’s rent free and we also provide some source of income. In the meantime, too many are now using Hull Park as a safe haven (sometimes for unsafe behavior), and that is not so good for the families wanting to enjoy it.

So, we have a little tiff over TIF, yet another level of subsidized housing, consultants to help us decide if we need more consultants, and a homelessness problem still searching for a solution.

Catching Up on TC News

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