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How Should The Ypsilanti Downtown Tax (TIF) Funds Be Spent?

Oct 1, 2015

The conversation on funding for the Ypsilanti Downtown Development Authority will soon come to conclusion. Ypsilanti City Council next week, is expected to make a decision on how to spend an expected surplus in property taxes from businesses in Depot Town. 

 On this afternoon in early fall, Depot Town is bustling with people. Most are headed to one of the handful of restaurants on Cross Street. According to Jessica French, it wasn’t always like this.

French co-owns the Sidetrack Bar and Grille. She’s also a member of the Ypsilanti Downtown Development Authority. She says support from residents and businesses have helped turn Depot Town around. That and tax money.   “For a long time Depot Town wasn’t always the most savory place to visit or to raise a family or to build a business. A lot of that has been made possible because of improvement projects funded by the Depot Town TIF.” 

TIF stands for tax incremental financing.  It’s been an ongoing topic of debate for several months in Ypsilanti. More precisely: the debate is over how the money should be spent. 

 “This is probably the most successful business area in the city of Ypsilanti as of now.” Ypsilanti City Councilman Pete Murdock.

Murdock is leading the charge in city hall to change how much money can be collected through the TIF and how much Ypsilanti’s Downtown Development Authority can spend on improvement projects in the area. Murdoch tells me, “So once these projects are completed, the idea is to increase the area’s taxable value and to generate more income for the city, for the library, for the ATA.”

Murdock and a few others on the city council want the DDA to hand a portion of the funding over to the city, to go back into the general fund for city services. 

The Downtown Development Authority, however, wants to keep most of the funding the TIF collects intact. They say there’s more benefits to Ypsilanti as a whole, by maintaining an economically strong downtown.  

Depending on who you talk to, the impact the money from the TIF will have is debatable.

Councilman Murdock explains:

“You count dollars one at a time and if it’s not enough money to do anything for the city, it’s not enough money for the DDA to do anything particular with, so the argument I think doesn’t make any sense. What we’re talking about is fairness here,” Murdoch explained.

 Tim Colbeck is the Director of the Ypsilanti Downtown Development Authority. He says it’s not quite that simple. 

“A. The work’s not done. There’s still a need for us. There’s important things that still need to be done, in particular the potential for a train stop, which is looking like more and more of a possibility. Well the city’s not in a position financially to pay for the things that they’re gonna need to pay for. They won’t be able to bond because they’re extended at their point with their bonding. It would be up to the DDA.” 

 Colbeck says for every dollar the DDA spends in Depot Town, roughly  $2-$3 in private investment is returned to the city in the form of sales taxes and property taxes. He says, if the city ends Depot Town’s TIF, or even reduces the amount the DDA may collect, it will most certainly impact future development in the area. And that, he says, will hurt Ypsilanti as a whole.

 “The net gain that the city would get on these these proposals that’s been on the table from councilman Murdock are really minimal in benefit to the city. Particularly when you’re thinking about how much money that they need to get. What they would actually get from us, it’s minimal. Then when you look at the benefit of what we’re doing with this small amount of money, there’s much more value to the community in keeping us going in whole.” 

 There is room for negotiation, Colbeck says. He says the DDA is willing to compromise with the city on how much revenue goes back to Ypsilanti,  but that depends on whether the city council will continue to leave most of the TIF’s revenue in the downtown development authority’s control. 

 City council members will hear the DDA’s proposal, as well as Councilman Murdock’s, at council’s next meeting on Tuesday,  October 6th. Depot Town TIF. But the TIFA  is set to expire at the end of the 2015.

 

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- Amanda LeClaire is an assignment reporter, and anchor for 89.1 WEMU News. Contact her at 734.487.3363 or email her: aleclair@emich.edu