A Tip Of The Cap To TIF 2
Mistrust in government can sometimes skew perception into reality – to the point where it’s getting harder to even acknowledge much less appreciate things the government is doing exceedingly well.
A significant anniversary of sorts is coming up in Traverse City, both worth celebration and contemplation over how our state and community view public investment. The 30-year lifespan of the city’s “TIF 2” tax increment financing district – which covers Old Town, the River’s Edge/Hagerty complex and Midtown in downtown Traverse City – expires next year. City officials will have to decide this summer the future of TIF 2, which captures increases in property values from new development to pay for public improvements within the district.
Regardless of what happens down the road, TIF 2 has been a tremendous economic and community success by nearly any measuring stick. Established in 1986 to help revive an abandoned iron plant site at Seventh and Lake streets, today the TIF 2 district is lined with state-of-the-art office space, eclectic dining and entertainment, upscale housing, modern public parking, retail stores and more. It didn’t happen in a vacuum and involved millions of dollars in private investment. Some developers lost money along the way.
There were plenty of questions and criticisms over the decades. But city leaders stayed the course, as did the Traverse City Area Chamber which consistently advocated for public and private projects within TIF 2.
The results speak for themselves. Property values in the TIF 2 district have soared to nearly $80 million – more than double the original projections. The value of TIF 2 properties have increased more than 1,000 percent over the life of the district – who wouldn’t want that kind of return on investment for their portfoilo? Those soaring land values, and other revenues including state brownfield dollars, have generated more than $15 million in TIF 2 revenues used for street paving, streetscapes, riverwalks, bridge replacement, the Old Town parking deck and even public Wi-Fi for downtown.
These are almost too-good-to-be true results that exceed even the rosiest of early expectations for TIF 2. But as its future comes back to the table for consideration, the criticism is already mounting for the community to close up shop on TIF 2. Some see a vibrant and thriving downtown and ask why tax increment financing needs to continue. But that viewpoint is short-sighted and fails to put on a lens that captures a broader view. A thorough evaluation would consider the TIF 2 district from where it started to where it is today. That’s something that would be useful to those who may not even know what our downtown looked like 30 years ago. Believe me – some of it wasn’t pretty.
City leaders have some important decisions to make about TIF 2 in the near future. They are decisions that need proper context, historical perspective and an eye toward the future of downtown. It would also be wise to avoid putting too much stock in views that don’t come from that broad lens.
Laura Oblinger is the Executive Director of the Traverse City Area Chamber of Commerce. Contact her by email at firstname.lastname@example.org