Traverse City weighs 30-year extension of downtown TIF funding, voter approval needed

A 30-year extension of Traverse City’s downtown tax-increment financing district would push one of the city’s biggest funding decisions deep into the 2050s, locking in how millions of dollars for streets, sidewalks, river work, and downtown services are raised and spent. Because voters approved charter amendments in November 2024 requiring public approval for any TIF creation, amendment, or extension, the question now has to go to the ballot before city leaders can keep TIF 97 alive beyond its 2027 expiration.

TIF 97 has paid for downtown infrastructure since 1997, and city manager Benjamin Marentette has described it as Traverse City’s only regional revenue-sharing mechanism. The district’s taxable value has risen from $36.8 million in 1998 to $209.3 million in 2024, according to the Downtown Development Authority, which says the financing tool has become one of the primary sources for downtown projects and operations.

The DDA approved the Moving Downtown Forward extension concept unanimously in August 2024 after more than two years of public engagement and more than 1,300 points of community feedback. The plan includes a permanent farmers market shed, Rotary Square buildout, Boardman Riverfront improvements, snowmelt and stormwater systems, mobility and streetscape upgrades, downtown police, and trash collection. A proposed third parking deck was not included.

If voters approve an extension, Traverse City would preserve a dedicated stream for downtown capital projects and services while continuing to pull in support from other taxing jurisdictions. If they reject it, the city would have to find another way to cover the same needs without the district’s revenue-sharing structure. The Ticker reported that if TIF 97 expires, about $1.9 million a year would return to regional partners such as Grand Traverse County, BATA, and Northwestern Michigan College, while another $2.6 million would return to the city. That would also shift more responsibility for the district onto the city’s general fund.

The stakes are already visible in existing projects. The South Union Street Bridge cost $4.12 million and was 12 percent funded by TIF, including $243,225 from regional taxing partners. The DDA says that kind of support helps pay for the infrastructure downtown residents and visitors use every day, even if they rarely see the financing behind it.

The city’s implementation policy is blunt: any proposal to create, modify, amend, or extend a TIF plan after Jan. 1, 2024 must be submitted to voters, and any ordinance extending or modifying TIF 97 enacted without voter approval would be void. The policy followed the 2024 charter fight led by Fred Bimber and Karen Nielsen, a dispute that ended with Traverse City voters approving the amendments. Grand Traverse County commissioners are separately weighing whether to opt out of East Bay Township’s new TIF plan, showing that the fight over how much tax growth stays local is spreading well beyond downtown Traverse City.