What public body can acquire
and dispose of property, create and implement development planning, promote
economic growth, authorize and collect taxes, issue bonds, borrow money, and
use Tax Increment Financing (TIF)? What public body can do all that while not being
accountable to voters? The answer is a Downtown Development Authority (DDA). The DDA Act 197 of 1975 was another government intervention in the natural
evolution of business and our communities. The stated objective was “to correct
and prevent deterioration in business districts” and “to encourage historic
preservation”. That objective has been manipulated and convoluted too often by well
meaning DDA Boards all over the state that have ignored the stated objective of
the act.
I remember when virtually every retail business excluding a
few gas stations, motels, and corner stores were “downtown”. Although my
childhood “Main Street” will always be Mitchell St in Petoskey, Cheboygan’s main
street seemed grander perhaps because the less familiar Woolworths waited to
tempt me to spend my 25¢ allowance. In my lifetime I’ve watched as brick and
mortar retailers evolved into standalone stores, strip malls, indoor malls, and
now commercial power centers. Most of our “downtowns” have not died, but have instead
stayed the same while the rest of the world evolved. Downtowns are bastions of independent
specialty retailers and gift shops, dining and nightlife venues while retaining
many financial, professional, medical practitioner, and other office based professional
businesses. Cheboygan outdoes most small
cities with a downtown that includes car dealers, a lumberyard, motel, convenience
store with gas and even a car wash.
The City of Cheboygan DDA was
established back in 1985 and is majority funded by Tax Increment Financing. The
Cheboygan DDA/TIF District encompasses most of what we call the downtown from
just north of Court St and about a block west of Main St and east across
Cheboygan River and then north on both sides of the river to Lake Huron. In
1985 this “downtown” area was assessed or valued at $6,317,755. Over the last
30 years, as property values increased due to inflation or market influence, TIF
allowed the DDA to collect the increased taxes that would otherwise go to the
City of Cheboygan, Cheboygan County, Cheboygan Library, Senior Citizens and
other real needs. From 1985 thru 2007, the DDA skimmed $2,478,329 in new tax
dollars off the top. In 2007 the DDA forecast another $2,470,900 in captured
tax dollars thru 2017. The big recession, unforeseen by the DDA, probably
slowed that TIF revenue growth. Until I see different, I‘ll assume that about
$250,000 is annually be diverted to DDA accounts. Think of it as robbing the
poor to pay the rich.
Unarguably there have
been many small and incremental public improvements done by the DDA including park
improvements, wayfinding signs, and enhancements that have created a more
pleasant environment. The 2009 Main
Street reconstruction included new curb, gutters and sidewalk, storm sewer and
water main system replacements and traffic signals. That was an MDOT project and included the City’s actions to replace and
resize utilities as part of the project. A Transportation Enhancement grant was
used to improve the downtown streetscape and barrier- free facilities. This
project was not solely, or even majority funded by the DDA, and would have
proceeded in some form with or without a DDA.
Arguably, some of the DDA “projects”
are gift horses that should not have been accepted by the city. The pedestrian
bridge will give headaches and cost city taxpayers for decades to come. That
bridge to troubles was funded in large part by a $500,000 Vibrant Small Cities
Grant apparently administered by the Michigan State Housing Development Authority. The MSHDA
stated mission “provides financial and technical assistance through public and
private partnerships to create and preserve safe and decent affordable housing”.
Are our homeless staying in the heated elevators?
The Michigan
Economic Development Corporation says a DDA is “is
designed to be a catalyst in the development of a community’s
downtown district.” The difference between theory and practice is
the fact that DDA projects like Cheboygan’s pedestrian bridge
are not catalysts to growth
but are instead little used and impractical embellishments that will
continue to waste your tax dollars for generations.
There have been many issues with
the pavilion before and after construction. The former Woolworth store was allowed
to deteriorate beyond saving; but how could it cost the MEDC Grant of $439,440 the plus a $107,360 local match to tear down one building? Replacing downtown buildings
with publicly owned entertainment venues is ill-conceived. It forever
eliminated one or more storefronts, property tax revenues, and the jobs that
retailers or offices would have created. How much did the pavilion cost before
the known problems, liability, and costs were handed off to the City?? The total
figure was reported as $1 million dollars.
The
Cheboygan Downtown Blueprint 2004 and other input were documented by the DDA in
2007 naming dozens of pie-in-the-sky projects. These dream projects, including
another bridge and pavilion, conservatively total more than $36 million
dollars. Does the Cheboygan DDA just go on forever or will taxpayers get angry
and stop this madness?
