This is one of the most heated debates in recent Traverse City history. Should TIF 97 be amended and extended for another 30 years? Or should the tax increment funding program that funds major downtown infrastructure projects be eliminated? The answer to that question lies in the City Commission's decision. It will likely be revealed later this year, either in the form of a referendum or referendum. But how did TIF 97 come about? ticker We looked back three decades to get the origin story told in oral history form below.
cast of characters
Rick Korndorfer: Local real estate agents and downtown business owners. At the start of TIF 97, Traverse City, he also served on the board of the Downtown Development Authority (DDA).
Richard Lewis: City Manager of Traverse City when TIF 97 was created. He later served as mayor.
Scott Hardy: Current DDA Director.is also the son of larry hardyserved as city commissioner and later mayor during the infancy of TIF 97.
Jean Derenzi: Current CEO of DDA (but scheduled to retire soon).
Brian Clough: Derenzy's predecessor at the helm of DDA and the main architect of TIF 97.
history
Kohndorfer: I was a partner in an office supplies and office furniture company that operated downtown in the '80s and '90s. Chuck Judson, a downtown attorney, was on his DDA board and he approached me and asked if I was interested in serving. So I finally got on board. One of the first things he did after I joined his DDA was hire Brian Clough as his CEO.
Lewis: Brian became DDA Director six months before I arrived in Traverse City. I came here in July of 1991. So Brian and I partnered together and worked on a number of initiatives to move the city forward.
Kohndorfer: One of downtown's biggest problems at the time was parking. There was not enough parking. So we thought we should build a parking deck. Instead of spreading the cars across the creation, you can also stack them four to five stories high. But, of course, parking decks are very expensive and we didn't have the money to buy something like that.
Lewis: We thought, “If we're going to do something different, that's fine.'' [with parking], what would it look like? And it came back and basically said, “Look, if we're going to do something.” [in terms of growing downtown]Three parking decks will be required. The report recommends one deck on the east side of downtown, where the current Hardy deck is located. The second one is on the western edge of town. And the third is where Old Town Deck is now. And we said: “There's only one way to make this happen: He has to fund the construction with a TIF plan.” The city can't do it alone.
Kohndorfer: TIF is taxed. So, for example, the school system and Northwestern Michigan University (NMC) receive tax dollars from all property owners. And they still receive that tax. do not stop. What is blocked is a gradual increase in tax revenue due to rising property values. They are captured to TIF.
Lewis: Plans for TIF, called TIF 2, already existed, but it was all taking place in the current Old Town TIF space. That wasn't the case downtown. There used to be a TIF for downtown, but it was abolished at some point. It didn't work, or they just didn't go through with it.
Beyond parking issues, downtown Traverse City is struggling, with many major retailers leaving downtown in favor of the newly constructed Grand Traverse Mall.
Lewis: I came here in 1991 and the mall opened four months later. Everyone thought, “Oh my god, what's going to happen downtown?” There was a JC Penney (now Horizon Books), but they moved to the mall. There was a lot of anxiety about what would happen next.
Derengee: I was working in the prefectural government. [in 1997], the city and county were considering creating a brownfield redevelopment authority. So I wasn't really involved in the production of his TIF 97. But I remember downtown. Back then, downtown wasn't where people went to eat lunch or shop. I was out at the shopping mall. I remember when J.C. Penney went out, I felt like we really needed to focus on investing in the downtown community.
Hardy: My father served on the City Commission in 1997 and became mayor in 1998 when TIF 97 was approved by the City Commission. I remember from conversations with him and Brian Clough that we were trying to use this new local tax tool to revitalize downtown Traverse City, which was pretty moribund. Both movie theaters were closed, the J.C. Penney store was vacant, as were several other stores, and 101 Park Street was home to a Firestone tire store.
Lewis: DDA, with support from the City, worked to develop the entire TIF 97 plan.
Hardy: My understanding is that Brian talked with state legislators. [TIF] We used the tool and received approval from the tax jurisdiction to use it to revitalize downtown and its tax base.
Kohndorfer: Brian Clough was a dynamo. I think what he brought was energy and enthusiasm. And with them he was at the forefront of many. He wasn't afraid to get on with things, introduce himself to every property owner, every tradesman, and get everyone involved. He was truly the person who brought everyone together to think, “We can do this.''
Derengee: I worked with Brian for many years, and he always asked me, “How do we encourage investment downtown?”
Clough passed away suddenly in 2013 at the age of 59. After his death, then-city manager Ben Bifos called him “the man who built downtown Traverse City,” and the State Theater honored him with the following sign: Clough – Look down this street and I'll see you any time.”
Lewis: I remember the night the new TIF was adopted in 1997. It was November or early December, and a meeting was held in the old dome in Park Place. There was a large and very interested audience. And I remember that particular night, Larry Hardy asked me a question. “Richard, what do you think about this, this is going to take revenue out of the city's general fund?'' And I said, “As a city manager, who doesn't want to lose revenue?'' “But we have to think bigger about what happens to our downtown.'' Because the city couldn't build the parking deck on its own.
Hardy: I don't remember that [TIF 97] This was a tough sell for both the City Commission and Traverse City residents.
Kohndorfer: I think people were pretty amenable to that. I don't remember much negative things.
Lewis: I think for the most part, everyone knew that was what needed to happen. There was some controversy, but DDA made a pretty good case. This is all about parking and the fact that downtown is the heart of the community in this area. The only way to get other government agencies to help pay for items was through TIF. So, the county administration and his NMC people all recognized the need and supported it.
After the City Commission approved TIF 97, it took some time for its impact to be felt.
Korndfer: The first big thing we did was [with TIF money] It was like a cityscape. On Front Street, he installed new sidewalks and lighting on the 100 and 200 block streets, and then extended the work to other blocks, beyond Union and into Old Town.
Derengee: I didn't even remember that the main focus of why TIF was needed was parking. I remember that we needed to focus on investing in downtown infrastructure: sidewalks, lighting, street grids, trees. I remember that that was the focus of the discussion at the time.
Lewis: When it came time to build the first parking deck, it was a referendum. Fortunately, the public said, “Come on, let's build.”
That first parking deck is now known as the Larry C. Hardy Parking Lot (pictured) and is bordered by Front Street to the north and the 300 block of State Street to the south. Voters approved his use of TIF funds for the garage and its construction in 2002. It opened the following year.
Kohndorfer: The idea behind the parking deck was actually to put your car or truck into the parking deck but not use it. Put it on the deck, get out of the car, and walk anywhere downtown. It was all about pedestrians. Cars and trucks don't spend money, but pedestrians do. And our reasoning was that if we could get people downtown, give them a place to park, and get them out of their cars, they would have a good experience. I think that has proven to be true in downtown Traverse City.
