TRAVERSE CITY -- The Downtown Development Authority is building its pitch for why Traverse City should keep its most important downtown funding mechanism alive.
TIF 97, the tax increment financing district that has funded the majority of downtown infrastructure and services for nearly three decades, is set to expire in December 2027.
Earlier this year, the DDA weighed four options for its future and settled on pursuing a voter-approved extension as its preferred path forward.
The extension would require voter approval, which the DDA is targeting for this November.
At Thursday’s board meeting, the authority took its next major step, reviewing 30-year revenue projections, debating how to share that money with the city and laying out what downtown stands to lose if the TIF goes away entirely.
TIF 97 currently generates roughly $4.8 million to $5 million per year, funding an array of core downtown services that most residents and visitors encounter daily. That includes the Clean and Green maintenance team, trash and recycling collection, public restrooms, street lighting and holiday lights, the community police officer and the full operation of the Sarah Hardy Farmers Market.
Without TIF revenue, the DDA’s general fund, supported only by a two-mill property tax levy, collects approximately $150,000 a year. Utilities in the general fund, including the meters that power downtown street lamps, account for just over $7,000 of that total.
“There would definitely need to be conversations about what does not get funded, who takes over those responsibilities,” DDA Deputy Director Lauren Bohac told the board. “Because we would have a lot fewer dollars without the transfer from TIF 97 to the general fund.”
Traverse City Mayor Amy Shamore put the gap in blunt terms.
“That’s $1.7 million conservatively estimated that will be gone every year, period,” Shamroe said. “Not go to the general fund, just gone from the city.”
But board members warned the loss would extend beyond basic services. Without TIF funding, downtown projects would revert to bare-minimum city standards.
“The value that we add is not just contributing to these necessary projects, but making them better,” Shamroe said. “The city, if it’s left on its own, it’s going to end up with some very basic ‘improvements’ that we aren’t able to help improve with tif money that won’t be there.”
DDA Executive Director Harry Burkholder presented 30-year projections showing a TIF extension could capture an estimated $213 million in total revenue, with roughly $90 million in the first 15 years.
The DDA would share a portion of that capture with the city and 11 other taxing jurisdictions. Staff presented five revenue-sharing models, from a 50/50 split to 90/10, to illustrate the trade-offs.
Under a 70/30 split, the DDA would retain about $3.6 million annually. After subtracting core services and maintenance, roughly $2.3 million would remain each year for capital projects.
Among the board’s top priorities for a new TIF is the Boardman Ottaway Riverwalk, which would restore and expand public access along the river in the heart of downtown.
The DDA has $400,000 budgeted to complete construction documents. Thousands of residents participated in the public engagement process that shaped the project, and the board has invested heavily in planning and design over several years.
Several board members spoke passionately about the riverwalk, with Mayor Shamore calling it a community obligation.
“We’ve neglected it as a community our entire existence,” Shamroe said. “And so anything that we can do, I think is worth the investment.”
Board Member Pete Kirkwood warned that pulling back now could kill a project that represents years of public input and planning.
“To take our foot off the gas on this thing is going to equal the death of the thing that is tens of thousands of person-hours of effort,” Kirkwood said. “And getting it to this point again, it’s going to be really, really hard.”
Placemaking and retail preservation also emerged as priorities during Thursday’s discussion, drawing some of the meeting’s most pointed commentary from both the board and the public.
Mayor Shamroe noted that Traverse City’s downtown is currently 94 percent locally or independently owned and warned that the trend line is moving in the wrong direction.
Outside investment groups are purchasing legacy buildings held by local families for decades, driving rents higher and threatening to push out the independent shops that have defined the city’s identity.
“I talk everywhere I can about our statistics of our downtown being 94 percent either locally, independently owned or micro chains,” Shamroe said. “We have very few macro chains and I share the same concern. We already see it happening in buildings where transitions are made, that we’re going to get more and more chains. And then we look like, sorry Indianapolis, but we look like Indianapolis versus Traverse City.”
Shamroe asked that retail retention be formally written into the placemaking section of the new TIF plan, even if the language starts broad.
“It has to be, for it to be included in the plan somewhere, even if it’s kind of vague to start, is important,” Shamroe said. “Because that is a key part of who we are and what we are as Traverse City.”
The DDA’s current budget includes a line item for a retail study of the downtown landscape, which the board authorized, but asked that the line item be renamed “retail retention” to better signal the board’s intent, arguing the study should lead to sustained investment in future budget cycles rather than a one-time data collection exercise.
The request echoed public comment earlier in the meeting from Anna Feiger, a social work student at Northwestern Michigan College, who urged the DDA to move beyond data collection and toward direct intervention.
“We’re currently at a crossroads where rising property valuations and building turnover are threatening to price out the very shops that make Traverse City a destination,” Feiger said. “When a local bookstore, a family-run cafe, or a unique boutique are replaced by national chains or empty storefronts, we lose more than revenue. We lose a third place, a site of social cohesion where neighbors meet.”
Feiger proposed three specific policy levers: a legacy business program creating a formal designation and support package for businesses that have anchored downtown for more than ten years, DDA-managed retail incubator space offering low-barrier entry for new local entrepreneurs and tax or grant-based landlord incentives for property owners who commit to long-term, predictable leases with independent retailers.
“If our downtown becomes a seasonal museum affordable only to national brands, we lose the social fabric that keeps community connected,” Feiger said. “The DDA has the power to decide if the next 30 years of development will be for absentee landlords or local residents.”
The full list of capital priorities includes 13 projects, among them the East Front Street reconstruction, district-wide snowmelt infrastructure, additional riverwalk segments and continued stormwater improvements. Board members were asked to submit priority rankings by April 6, ahead of a joint session with the city commission on April 13.
“We want to have as much collaboration and support from the city as possible,” Burkholder said. “So we have to weigh the support of the city, whatever that split might be. But we also still have to be a responsible fiduciary for our funds moving forward to implement these projects.”
The DDA is targeting a June vote to approve the TIF plan. The extension would then go before voters in November.