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 income‑tax growth for Detroit. Patel said the city’s annual income‑tax receipts rose from about $250 million in 2014 to $434 million in 2024. DEGC argued that foregoing some property tax to grow payroll and income tax was a deliberate strategy to stabilize city finances after bankruptcy.

- DDA debt and tax capture: CRC recommended paying down DDA debt as quickly as feasible so the district’s initial assessed value can be reset and captured taxes flow back to the city and other taxing jurisdictions. DEGC officials described a 2024 bond restructuring that retired $76 million in Little Caesar Arena bonds, refinanced roughly $198 million of remaining debt and yielded about $58 million in interest savings, and said the DDA is on a path to shorten its repayment horizon.

- Transparency and monitoring: Both CRC and city staff urged better, public post‑abatement monitoring. "We encourage you to direct the departments to create a post abatement monitoring analysis process," Luther said, calling for open data on whether abated projects still meet their job and occupancy promises.

- Geographic distribution and equity: CRC and DEGC presentations acknowledged that most abatement dollars have flowed to downtown and midtown, but DEGC highlighted recent years’ increases in neighborhood projects and said the administration has created a neighborhood economic development team to direct more investment outside downtown.

Questions from council: Committee members raised the high city millage rate (presented as 83.91 mills for Detroit in the presentation, vs. 51.54 in Grand Rapids and 55.15 in Pontiac) and asked how that gap affects development math. Members also pressed how abatements could be phased out, what role state legislative change would play, and whether captured DDA taxes could be shared more broadly across neighborhoods.

Administration response: Hassan Beydoun, group executive for economic development in the mayor’s office, and Amanda Elias, deputy group executive for neighborhood economic development, said the administration supports stronger neighborhood investment and noted programs the city uses to fill development funding gaps. DEGC emphasized that many large projects still require a capital stack (multiple funding sources) even after abatements.

Next steps: CRC and council members urged the council to consider two procedural changes: (1) require periodic public evaluations (sunsets) for abatement authority and (2) create a formal, public post‑abatement monitoring system that tracks jobs, payroll and occupancy against commitments. City staff said the departments and DEGC would work with council on data and reporting.

Ending: Committee members said the Feb. 6 discussion scratched the surface and asked staff to return with more detailed fiscal and operational data. The committee scheduled follow‑up budget and committee hearings to keep the issue on the agenda.

Votes at a glance

(Committee-level procedural and scheduling actions taken during the same meeting) • Remove line item 6.1 (property sale 13326 & 13332 Plymouth Rd.) — motion moved by Council Member Fred Durhall III; outcome: approved by voice (no objections). Note: item removed at administration request.

• Amend Neighborhood Opportunity Fund (NOF) hearing/deliberation calendar (add Thursday, March 6; set deliberation time 2:00 p.m.) — motion approved by voice (no objections).

• Send line item 6.2 (NOF schedule/hearings resolution) to formal with recommendation to approve (as amended) — outcome: approved.

• Receive and file: law department report re rental‑pricing software permissibility (line 7.1) — outcome: received and filed.

• Receive and file: BZA-related memoranda and related items (lines 7.3 and 7.6) — outcome: received and filed.

• Send land‑transfer request for 94 parcels (line 7.4; Detroit Land Bank transfer to America’s Community Council) to formal with recommendation to approve — outcome: moved to formal with recommendation to approve.

• Refer request for comprehensive Detroit Land Bank Authority report (line 7.5) to Legislative Policy Division; bring back in two weeks — outcome: referred.

Speakers (attribution whitelist) - Eric Luther, president, Citizens Research Council of Michigan (organization). First reference: 02:45:35–02:47:02 (approx) in meeting transcript; role: presentation lead for CRC research. - Irv Korny, Legislative Policy Division (LPD) (government staff). First reference: near the start of the CRC presentation introduction. - Derek Head, senior vice president, public policy and operations, DEGC (organization). First reference: introduced at start of DEGC remarks. - Hassan Beydoun, group executive for economic development, mayor’s office (government). First reference: during DEGC/administration remarks. - Amanda Elias, deputy group executive for neighborhood economic development, mayor’s office (government). First reference: during administration remarks. - Nikhil Patel, deputy CFO/treasurer, City of Detroit (government). First reference: during Q&A (presented city revenue/income‑tax figures). - Council President Pro Tem James Tate, chair, Planning & Economic Development Committee (elected official). First reference: roll call/start of meeting. - Council Member Fred Durhall III, vice chair (elected official). First reference: roll call/start of meeting. - Council Member Leticia Johnson (elected official). First reference: roll call/start of meeting.

Authorities (referenced in discussion) - {