Downtown Development Authority seeks council direction on boundary, proposes 70/30 TIF gain‑share

The Downtown Development Authority (DDA) presented its long‑range development plan and asked City Council for direction at a work session next Thursday. The DDA’s executive director summarized the agency’s planning process, explained the boundary and finance tradeoffs under consideration, and previewed a proposed change to how tax increment financing (TIF) capture is shared among taxing units.

According to the presentation, the DDA’s existing boundary covers 67 downtown blocks and has not changed in 43 years. The DDA reviewed development happening adjacent to the boundary, underground utility needs, and future land use to propose an expansion that would add several north and south areas to the DDA map. The director noted that any expansion would be subject to the approval of affected taxing units, which could opt out and reduce revenue available to the DDA.

On finance, the DDA explained Ann Arbor’s existing TIF capture model (in which the DDA does not capture inflation and faces a 3.5% cap on growth imposed earlier) and compared it to a “gain‑share” approach used in Grand Rapids. Under the gain‑share concept the DDA presented, the DDA would receive 70% of TIF capture and other taxing units 30% for the life of the plan (the presentation noted the current FY26 projection would send about 28% back to other taxing units in current modeling). The DDA said varying scenarios will be shared at next Thursday’s work session, ranging from status quo to boundary expansion plus a TIF cap adjustment.

The DDA director emphasized that the boundary and TIF capture together determine the DDA’s investment capacity and that projects and program lists will be presented for council consideration in August. Council members were invited to provide direction at next week’s work session.