Marquette extends downtown TIF to 2054 and approves 5% revenue sharing with DDA

The Marquette City Commission on Aug. 11 approved an extension of the Downtown Development Authority (DDA) tax increment financing plan through Feb. 2054 and authorized a revenue-sharing agreement that will return 5% of the DDA's gross TIF revenue to the city. Both motions passed unanimously, 7-0.

The measures, tied to ordinance 25-08 and DDA TIF plan number 5, were presented at a public hearing and a subsequent new-business item. Tara, director of the Marquette DDA, described the plan as primarily a term extension with “minor housekeeping items such as corrections to property descriptions” and outlined priority capital projects she said the DDA plans to pursue if the extension is adopted.

Why it matters: The 30-year extension (an 18-year addition to the prior plan, which ran to 2036) is intended to give the DDA time to bond for and complete multi-phase capital projects, leverage grants and partnerships, and maintain operations. In return the city will receive an ongoing share of incremental tax revenue; staff estimated that 5% of DDA gross TIF revenue would equal about $63,000 in year one and projected roughly $2,893,580 over the life of the agreement under conservative growth assumptions.

DDA priorities and costs Tara told commissioners the DDA’s objectives come from the 2020 downtown plan and from stakeholder input. She listed several priority projects and rough cost estimates: a Beraga (Baraga) Street improvement plan estimated about $7,500,000; Third Street improvements estimated about $2,800,000; Market Commons enhancements at about $3,000,000; and a parking redevelopment program with an aggregated planning estimate near $15,000,000.

Tara said the total of the listed projects, including routine operations, came to roughly $42,000,000 and that the longer term would allow the DDA to seek bonding and grants. She also noted the DDA’s operational role and said the organization works to “prevent deterioration in business districts, encourage historic preservation, increase property tax valuation, and to promote economic growth.”

Fiscal concerns and debate Several commissioners supported the extension for providing long-term stability for bonding and planning. Commissioner Davis, while voting in favor, raised concerns about the length of the extension and the effect on other taxing jurisdictions. Davis noted that “approximately 60% of the financing that's coming from TIF is going to the operating cost of the DDA,” meaning wages and benefits, and argued the city and other taxing entities have not seen promised returns in past TIF cycles.

Davis proposed amending the revenue-sharing agreement to require a review in three years instead of five; she later rescinded the amendment after discussion. The city manager and deputy city manager clarified that the draft agreement includes a mandatory review every five years and that the agreement can be renegotiated at any time by mutual consent of the parties. The deputy city manager also said the operational portion of TIF revenue is “just over a million” dollars and that, without the DDA, the city would need to supplement roughly $1.1 million of services with about $650,000 in expected city revenue.

Revenue-sharing terms and vote City staff described the proposed revenue-sharing agreement as providing the city with 5% of the DDA’s gross annual TIF revenue in five-year increments through 2054, with a five-year mandatory review. Staff estimated the first-year city share at $63,000 and projected the final-year share at about $148,110 under conservative assumptions. Pro Tem Schlegel moved to approve the revenue-sharing agreement; the motion was seconded by Commissioner Mayer and passed 7-0.

The commission then moved on the TIF plan itself. Commissioner Ottaway moved to approve DDA TIF plan number 5 and adopt ordinance 25-08; Commissioner Gottlieb seconded. The motion passed 7-0.

Public comment and next steps One member of the public, Geraldine Nault of North McClellan Avenue, spoke during the second public comment period to express concern that TIF districts can continue indefinitely and that residents on fixed incomes may not perceive benefits from the captured increment.

Because the public hearing served as a second reading of ordinance 25-08, the commission’s vote adopted the ordinance as presented. City staff will implement the revenue-sharing agreement according to its terms and continue DDA coordination on capital projects and grant/bonding strategies.

Votes at a glance - Approve DDA TIF plan number 5 and adopt ordinance 25-08: Motion by Commissioner Ottaway; second by Commissioner Gottlieb; outcome: approved, 7-0. - Approve revenue-sharing agreement with Marquette Downtown Development Authority (5% gross TIF revenue, five-year review): Motion by Mayor Pro Tem Schlegel; second by Commissioner Mayer; outcome: approved, 7-0.