City committee hears CRC report urging oversight, monitoring of DDA tax capture and abatements

The Detroit Planning and Economic Development Standing Committee on Feb. 6 heard a multi-hour presentation on tax abatements and Downtown Development Authority (DDA) tax captures from the Citizens Research Council of Michigan and response comments from the Detroit Economic Growth Corporation and the mayor’s economic development team.

The Citizens Research Council’s president, Eric Luther, said the central concern is that downtown’s rebound has not translated into restored property‑tax benefits for the city or overlapping jurisdictions and recommended resetting the DDA district’s initial assessed value once outstanding debt is cleared. "The number 1 issue is that the significant rebirth of the Central Business District has neither benefited the Detroit property tax," Luther said, and he warned that a reset cannot occur while DDA debt remains outstanding.

Why it matters: Downtown growth has produced income‑tax revenue that benefits the city but has not restored property‑tax revenue to the city and other taxing jurisdictions. CRC and staff presentations quantified how abatements and tax‑increment capture have been used and urged systematic monitoring so council and the public can evaluate whether incentives deliver promised job, wage and occupancy outcomes.

Key findings and discussion points

- Scope of abatements: CRC reported 171 tax‑abatement projects from 2017–2023, totaling about $843 million in abated property taxes. Nine large projects account for roughly 60% of the abated value, CRC told the committee. Luther recommended establishing sunsets and periodic evaluations of abatement programs to force regular reassessment.

- Income‑tax vs. property‑tax tradeoff: Derek Head, senior vice president at DEGC, and Nikhil Patel, deputy CFO for the city, said increased downtown employment has driven…