Mar. 15—TRAVERSE CITY — An indefinite postponement of the city’s “Moving Downtown Forward” tax increment financing plan is being recommended by the chair and vice-chair of the Downtown Development Authority Board.

A memo sent this week to the DDA Board from board Chair Gabe Schneider and Vice-chair Scott Hardy proposed delaying action on the revised TIF plan — slated for a vote at this morning’s DDA Board meeting — to help the organization generate more public support for the plan while the DDA completes its search for a new CEO.

The DDA’s proposed schedule was to submit the plan to the City Commission next month, with a public hearing and potential vote on the plan by city commissioners in early May.

“As the Traverse City DDA looks to the future of our downtown and our city, we must think beyond our boundaries and prioritize what is best for the collective good of our region. This means building the community’s confidence in our organization and providing clarity on our work,” the memo states. “If our community cannot fully realize the value of the DDA and the TIF tool, then the Moving Downtown Forward TIF plan will not be actionable.”

Other factors cited by Schneider and Hardy included recent changes to the TIF plan — which included the removal of a $32 million parking deck to serve the west end of downtown — which they felt are eroding public confidence in the plan.

“In continuing to change and tweak the plan to reflect the perceived public sentiment of a few, we have jeopardized the support of many, including downtown property owners and the business community,” the memo states.

The current TIF Plan, formerly known as TIF ’97, expires in 2027. The amended plan, which would extend it another 30 years through 2054, has been developed over the past two years and includes tens of millions in proposed projects and millions more for maintenance of downtown infrastructure. Some of those include the West End mixed-use development — minus the parking deck — at an estimated $33.4 million, along with the riverfront improvement project along the Lower Boardman Ottaway River at more than $57 million. Other items include up to $7 million in improvements to Rotary Square along Union Street, $20 million in streetscape work throughout the downtown, and another $15 million for installation of heated sidewalks. It allows for up to $90 million in city bond debt for downtown projects specified in the plan.

Schneider said in an interview Thursday said that a proposed city charter amendment to require voter approval of tax increment financing plans that will go before city voters in November is also complicating the DDA’s review of the plan.

A petition drive last fall led by city residents Fred Bimber and Karen Nielsen collected more than 870 verified signatures to put the question on the ballot.

Opponents of the TIF plan are critical of the tax increment financing process that diverts money from other taxing units — including the city’s general fund, Grand Traverse County, Northwestern Michigan College and others — for DDA projects and downtown maintenance. The city’s two TIF districts took in more than $2.7 million in local revenue last year.

DDA officials and TIF supporters counter that it’s the only legislative mechanism available to generate regional tax revenue for downtown, which serves as the economic hub of the Grand Traverse region. The updated plan also includes a new revenue-sharing mechanism to return some of those captured tax dollars — more than $1.4 million annually — to the regional taxing partners subject to the DDA’s tax capture.

If the City Commission were to approve the TIF plan and that’s also challenged by citizen petition, the city could be looking at a pair of local referendums this fall on the TIF plan — a potential scenario that Schneider wants to avoid. Schneider and Hardy said it’s “paramount” for the DDA to continue building support for TIF as an economic and community development tool for the region.

“We must ensure that this tool remains viable in the context of our representative democracy where accountability is held by the people and their elected officials rather than a charter amendment referendum,” they wrote. “This means focusing our collective attention on opposing the city charter amendment referendum that undermines TIF for the DDA, Brownfields and Corridors.”

Schneider and Hardy also urged the board to focus on the DDA leadership transition following the departure this month of former CEO Jean Derenzy, and give three newly seated DDA Board members an opportunity to familiarize themselves with the plan. Today’s meeting is the first for members Gary Howe, Mike Powers and Shelley Spencer following their recent appointments by the city commission to fill three vacancies on the DDA Board.

“To set our next CEO, and organization up for success, that person deserves to be part of the Moving Downtown Forward TIF roll-out (versus) inheriting a process that is uncertain and disorganized,” the officials said.