Marquette approves 30-year extension of downtown TIF and 5% revenue-sharing with DDA

The Marquette City Commission voted 7-0 on Aug. 11 to approve Downtown Development Authority (DDA) Tax Increment Financing Plan No. 5 — extending the DDA's TIF district expiration to Feb. 2054 — and to authorize a companion revenue-sharing agreement that gives the city 5% of the DDA’s gross TIF revenue each year.

The revenue-sharing agreement requires a mandatory review every five years; the city staff estimated the city's share in the first year at about $63,000 and projected a conservative total value of roughly $2,893,580 over the life of the agreement. The approvals passed by roll call votes of all seven commissioners.

City staff introduced the TIF extension as a tool to provide time and bonding capacity for a long list of downtown capital projects identified in the downtown plan adopted in November 2020. Tara, the DDA director, told commissioners the DDA’s project list totals about $42,000,000 and said, “Being able to actually, you know, see those come to fruition, we do need a sizable amount of time to be able to do that.” She described priority projects including the Berghast Street improvement (estimated about $7.5 million), Third Street connections (about $2.8 million), Market Commons enhancements (about $3.0 million) and a parking redevelopment program (an estimated $15 million across multiple projects).

In background remarks read to the commission, city staff said the DDA originally sought an extension to 2054 and that the proposed revenue-sharing arrangement would provide the city 5% of the DDA’s gross TIF revenues in five-year contract increments. The staff background also noted statutory and local procedural requirements: state law requires a 20-day notice and city code prevents adoption of an ordinance at the same meeting it is introduced; the ordinance implementing the TIF plan is numbered 25-08.

During discussion, several commissioners expressed support for the DDA’s mission and for the uses of TIF money to preserve and improve downtown, while also raising concerns about the duration of the extension and the distribution of tax growth. Commissioner Ottaway, who moved adoption of the ordinance, framed the extension as “an investment in our future” and noted that about 60% of the TIF revenue goes to DDA operating costs — wages, benefits and running the authority — a portion the city would otherwise need to assume. The city manager later explained that the DDA’s operations budget funded by TIF is “just over a million” dollars and that without the DDA the city would have to supplement roughly $1.1 million of those services with approximately $650,000 in direct city revenues.

Commissioner Davis urged more frequent reviews and asked whether residential parcels in the DDA district could be separated or whether the commission could sooner recover taxable value for essential city services. Davis said, “The question hasn't been answered,” referring to an outstanding request for a clear accounting of how much of the district’s increased taxable value derives from residential conversions since the DDA’s original baseline. Davis moved an amendment to require a three-year review of the revenue-sharing agreement; after discussion she rescinded the amendment and withdrew it. Commissioners noted that, under the drafted agreement, the commission may direct staff to pursue renegotiation with the DDA at any time, though changing the mandatory review interval in the contract would require DDA board approval.

Commissioners and staff emphasized that the revenue-share was negotiated to balance DDA stability and city fiscal needs. Mayor Pro Tem Schlegel, who moved approval of the revenue-sharing agreement, said the five-year review window provides “a long enough time period for us to realize what our next step is going to be.” Several commissioners suggested including regular annual updates from the DDA to preserve institutional knowledge between reviews.

A single member of the public spoke during the final public-comment period to express frustration with TIF mechanisms and concern that the TIF “will never end,” saying that property owners do not realize some tax increases are captured by the DDA rather than restoring revenue to city services.

The commission recorded two formal actions related to this topic: the adoption of DDA TIF Plan No. 5 via ordinance 25-08 (approved 7-0) and approval of the Marquette–DDA revenue-sharing agreement (approved 7-0). Both motions were presented with staff recommendations and supporting fiscal estimates. The record shows the commission directed staff to continue monitoring the arrangement and to return for the mandatory five-year review; commissioners also discussed the option of returning sooner if conditions or the parties agree.