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GRDadof3

DDA looks to expand its boundaries

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At yesterday's DDA meeting, a proposal was put forward for the DDA to expand its boundaries:

http://www.ci.grand-rapids.mi.us/download_...b24ce3f30f3.pdf

(page 18)

Chris covered the story in the Press today:

http://www.mlive.com/business/grpress/inde....xml&coll=6

This will give the DDA the ability to provide development and street upgrade support for a wider area of downtown, especially for areas East of Division that are not covered now, like that badly neglected area by the vacant Kendall Bldg and Children's Museum, but is not within the DDA's jurisdiction currently. Personally, I'd say with the DDA's track record of success, such as helping to get the arena, convention center and art musuem built, streetscape improvements all over downtown, street repavings in much of downtown, areaway fill grants for businesses (so that sidewalks can be rebuilt and trees planted), upgrades and expansions of the riverwalk, Tax Increment Financing for development projects, the successful DASH system, renovation of both the Gillette and Blue Bridges into pedestrian bridges, Rosa Parks Circle, and much more you can see HERE, that they should be allowed to expand. A hearing will be forthcoming with the city commission, since it will require the city to give up certain tax revenues in hopes of spurring development (as I understand it).

Also covered in the DDA agenda this week was a rundown of development projects underway, recently completed or in planning stages. A summary:

Since 2006, 32 significant construction projects have been completed within the

downtown area. Of the 32 projects, the DDA has provided support to 19 of the 32

projects.

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I did read that the city's computer system is obsolete and needs to be replaced. :whistling:

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The computer system is pretty much state of the art...

It's more like they don't have money to pay for IT people, thus no new development...just enough to keep the boat afloat.

They are in the middle of more "reorganization"...I hear more tremors...I am sure we'll all hear soon...

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I just read the article for the first time...wow.

Pretty much BS in my opinion.

There are some older legacy systems but I believe this is over-exaggerating.

I worked at the City of GR IT for over 5 years...

The problem is internal politics and the 20% turnover rate...which is the result of something else they don't seem to be addressing.

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Anyone smell anything fishy? Former GR IT guy goes to a consulting company and promises great savings by reorganizing the dept. Convinces the City Manager to get rid of the top 3 employees (the only actual city employees in the dept by the way -the rest are contract employees with Martin Marietta) and now "oh you need $6 million for equipment upgrades". Something rotten in Denmark IMHO :whistling:

Internal politics? Not there :whistling: I wouldn't work there for any amount of money.

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Anyone smell anything fishy? Former GR IT guy goes to a consulting company and promises great savings by reorganizing the dept. Convinces the City Manager to get rid of the top 3 employees (the only actual city employees in the dept by the way -the rest are contract employees with Martin Marietta) and now "oh you need $6 million for equipment upgrades". Something rotten in Denmark IMHO :whistling:

Internal politics? Not there :whistling: I wouldn't work there for any amount of money.

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Back to the topic of the DDA expanded boundaries for a minute, here's a map that the Press has showing the new boundaries. The dotted lines are the new boundaries of the DDA's reach, while the orange blocked areas are the new Tax Increment Financing districts (the DDA captures the increased property taxes on those properties that would normally go straight to the city, and uses them for infrastructure upgrades, streetscape enhancements and other projects).

1552244360_3be6ff0138_o.jpg

What I don't understand is why the Rowe Hotel property, the GR Press, and the Michigan Street development are all being exempted from the tax capture, while being added to the DDA's boundaries? Other exempted properties are the entire area around 201 Market (which much of it is city-owned with no taxes paid anyway), and the area around GR Spring & Stamping in Monroe North.

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...

1552244360_3be6ff0138_o.jpg

What I don't understand is why the Rowe Hotel property, the GR Press, and the Michigan Street development are all being exempted from the tax capture, while being added to the DDA's boundaries? Other exempted properties are the entire area around 201 Market (which much of it is city-owned with no taxes paid anyway), and the area around GR Spring & Stamping in Monroe North.

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I had the same concern upon viewing the map (which did not seem to be part of the agenda packet). If the DDA intends to take care of a parcel, it should be able to capture the TIF revenue from the business located therein. (At least that's what I'm remembering from my DDA course in 2001.)

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Exactly. Here was Jay's response when Chris asked the same question:

Only a handful of properties planned for the DDA would be excluded from the TIF district.

Fowler said their inclusion in the DDA's boundaries while excluding them from the TIF will avail potential developers of more incentives under the state's brownfield redevelopment program.

Are Brownfield Tax Credits not available in TIF zones? Or maybe because the Brownfield Credits exempt businesses from paying the taxes on the improvements in the first place?

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I believe it's the "red" reason above.

However, as far as I can tell, the Press is a money-making business and has no immediate plans to make use of Brownfield credits. Seems like adding whatever TIF can be captured from them would be a nice increase for the DDA.

Likewise, the Health Hill locations don't seem to be in need of tax shelters or alleviation strategies. (My EMU prof did not cover Brownfield overlays in that class.)

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A little more clarification of the expanded boundaries from Chris this morning:

DDA plan could fund public projects

I also received this response from Jay as to how Brownfield Tax Credits (from the Brownfield Redevelopment Authority) and TIF zones can conflict with each other.

Remember that there are ordinarily two benefits to developing a designated brownfield site. One is the Brownfield MBT tax credits; the other is TIF reimbursement for eligible expenses. While the DDA also has offers TIF reimbursement for eligible expenses, there is a big difference between the BRA and DDA in terms of what is eligible for reimbursement (established by state law) and also how quickly the developer can be reimbursed. In most cases, it

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I guess what I'm not understanding is: how a building or parcel be included within the DDA but not be expected to contribute.

Let's say there's a building being held by a speculator. It could possibly be eligible for Brownfield or Ren Zone tax credits in future, but for now it's a boarded-up vacant eyesore. How come its tax payments can't be added to the revenue stream for the DDA?

If it becomes eligible for future tax credits, the DDA would incur a loss. However, the DDA seems to be pretty good at finding creative funding sources, and a few years hence (when the recalcitrant owner finally decides to act) there will be additional revenue available from other projects.

Seems odd to expand the umbrella without asking/expecting compensation. Lots of white spaces on that map.

(as mentioned before, my planning prof at Eastern was a theorist...I got an A in the course partly by proposing a DT flagpole cell tower)

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I guess what I'm not understanding is: how a building or parcel be included within the DDA but not be expected to contribute.

Let's say there's a building being held by a speculator. It could possibly be eligible for Brownfield or Ren Zone tax credits in future, but for now it's a boarded-up vacant eyesore. How come its tax payments can't be added to the revenue stream for the DDA?

If it becomes eligible for future tax credits, the DDA would incur a loss. However, the DDA seems to be pretty good at finding creative funding sources, and a few years hence (when the recalcitrant owner finally decides to act) there will be additional revenue available from other projects.

Seems odd to expand the umbrella without asking/expecting compensation. Lots of white spaces on that map.

(as mentioned before, my planning prof at Eastern was a theorist...I got an A in the course partly by proposing a DT flagpole cell tower)

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hmm, wonder why they didnt gerrymander it to include the future vacant Davenport campus..

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I guess what I'm not understanding is: how a building or parcel be included within the DDA but not be expected to contribute.

Let's say there's a building being held by a speculator. It could possibly be eligible for Brownfield or Ren Zone tax credits in future, but for now it's a boarded-up vacant eyesore. How come its tax payments can't be added to the revenue stream for the DDA?

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A dumpy building doesn't pay much in taxes, so it doesn't seem like there is a good reason to include it in the TIF district. If excluding the property from the TIF district provides a greater chance to get developed using Brownfield tax credits or whatever, then that is the way to go. If that property gets developed, would the DDA then amend the TIF district map to include it, so the DDA gets the larger capture?

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A dumpy building doesn't pay much in taxes, so it doesn't seem like there is a good reason to include it in the TIF district. If excluding the property from the TIF district provides a greater chance to get developed using Brownfield tax credits or whatever, then that is the way to go. If that property gets developed, would the DDA then amend the TIF district map to include it, so the DDA gets the larger capture?

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Well if the vacant boarded up building were redeveloped, and received Brownfield Tax Credits, then what would there BE to collect from TIF? The improvements are basically tax-free, aren't they?

For instance, let's say I find a building and land in the DDA Zone/Non-TIF zone that I want to redevelop. I buy for $2,000,000 and it has $15,000 in taxes currently. I plan to invest $8,000,000 (in my own money and financing), and I can get reimbursed up to $800,000 in Brownfield Tax Credits to pump back into the project to offset the equity I need and the cleanup of the site. Now the project is worth $10,000,000, with taxes of let's say $120,000/year. If I were in the DDA TIF zone, that $120,000 would be captured by the DDA (?). If not in the DDA TIF zone, those taxes would go where? (I'm not sure, the city?) Are there even taxes due, because of the Brownfield, for a certain period of time?

And why would the DDA want to turn around and collect taxes from me? Doesn't that discourage me from redeveloping the site in the first place?

I need the 6th grade explanation of all this. :)

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Well if the vacant boarded up building were redeveloped, and received Brownfield Tax Credits, then what would there BE to collect from TIF? The improvements are basically tax-free, aren't they?

For instance, let's say I find a building and land in the DDA Zone/Non-TIF zone that I want to redevelop. I buy for $2,000,000 and it has $15,000 in taxes currently. I plan to invest $8,000,000 (in my own money and financing), and I can get reimbursed up to $800,000 in Brownfield Tax Credits to pump back into the project to offset the equity I need and the cleanup of the site. Now the project is worth $10,000,000, with taxes of let's say $120,000/year. If I were in the DDA TIF zone, that $120,000 would be captured by the DDA (?). If not in the DDA TIF zone, those taxes would go where? (I'm not sure, the city?) Are there even taxes due, because of the Brownfield, for a certain period of time?

And why would the DDA want to turn around and collect taxes from me? Doesn't that discourage me from redeveloping the site in the first place?

I need the 6th grade explanation of all this. :)

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hmm, wonder why they didnt gerrymander it to include the future vacant Davenport campus..

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