County appeals to public
MANISTIQUE – The Schoolcraft County Board of Commissioners has taken their objection to the possible amendment of the Manistique Downtown Development Authority’s TIF (tax increment financing) plan to the people. The board recently approved a letter be distributed to county residents, as well as a select few organizations, including the DDA.
The DDA’s current TIF plan dates back to 1988 and outlines projects and goals the DDA had in order to improve the area within its boundaries. That plan, along with the DDA, is set to expire in 2018. Now, its members are looking to amend the original plan to include their new goals and projects and also to extend the Authority’s life.
One project in particular – an estimated $4 million renovation to the city’s marina – makes the extension a necessity. The DDA received a nearly $2 million grant from the Michigan State Waterway’s Commission to fund half of the project. The other half will be covered by DDA.
According to DDA Chairman Rick Demers, the Authority won’t be able to bond to cover their match portion if the DDA is not extended, since the repayment plan will exceed the current life span of the Authority.
The DDA has been working since January to put forth its new TIF plan, which will be presented for approval by the Manistique City Council following a public hearing on April 22.
Over the past 25 years, Demers said the DDA has completed or participated in projects within its boundaries totaling nearly $6.5 million, including the construction of the boardwalk, various street projects, the construction of Triangle and Five Points Park, the placement and maintenance of lighting downtown, as well as the first phase of the marina dredging.
The DDA uses money captured from increases in the taxable value of properties within its boundaries since 1988, amounting to just over $500,000 per year, 80% of which comes from the city.
According to Commissioner Dan LaFoille, the commissioners are using a letter distributed to the DDA, residents and other entities to formally request the DDA to enter into a “tax sharing agreement” with the county.
In the letter, commissioners state,
“The diversion of property tax revenues for the building of desirable but ‘non-critical’ projects is questionable when it comes at the expense of constitutionally mandates functions and other functions that could provide safety to the community.”
The commissioners go on to explain that the amount the DDA intends to collect, if extended, is “extreme”. Their estimates place that figure over $31 million in the next 30 years.
Following the county meeting Tuesday, Demers he said the DDA acknowledges the letter and understand the county board’s decision, but that its board has made the recommendation to city council to proceed with the plan amendment as is.
“At this point, we are in no position to enter into a tax sharing agreement with any agency,” he said. “We (the DDA board) strongly feel if Schoolcraft County is going to continue to grow and prosper this action is necessary at this time. That said, it does not mean that we can’t consider their request at a future date.”
Demers went on to say that there are a number of reasons why the tax sharing agreement cannot happen at this time. First, he noted the city is being asked to obligate itself to secure the funds needed to reconstruct the marina – a debt that will have to be repaid with DDA revenue. Second, he said the DDA is not comfortable with the current and anticipated devaluation of properties within the district. If devaluation continues, it, coupled with a proposed elimination of personal property tax assessments by the state, could leave the DDA with much less revenue than the county indicated in their open letter to residents. Demers added it would be “irresponsible” of the DDA to enter into any agreement that would potentially limit the ability to repay its debt.