The Iron Mountain Downtown Development Authority (DDA) is in the process of preparing a “downtown plan and tax increment financing plan” (downtown/TIF plan) for the future of the downtown area. That area is defined by the boundary of the currently adopted “downtown district” as shown in the map below. The DDA anticipates completing the plan in late 2025 or early 2026. The process of plan preparation will involve a series of public meetings with community stakeholders (residents, businesses, property owners) interested in the future of Downtown Iron Mountain. The effort will culminate in presentation of the downtown plan to the City Council for adoption, and as an update to the City’s Master Plan. The fundamental purpose of the downtown/TIF plan is to shape the future of Downtown Iron Mountain by design rather than by default.
What is a downtown development authority (DDA)? Municipalities can create downtown development authorities to take proactive steps to reverse declining property values and address other challenges facing downtowns. For roughly the past 50 or 60 years, downtowns throughout the United States have experienced negative effects of population and economic change, aging housing and commercial buildings, and other unique challenges. The Michigan legislature authorized municipalities to create DDAs in the mid-1970s, and the City of Iron Mountain established the City’s DDA in 1978. The Michigan law pertaining to DDAs was amended in 2018, and the current version is PA 57 of 2018. The Iron Mountain Downtown Development Authority is governed by a 9-member Board of Directors appointed by the City Council.
What is a downtown plan? A downtown plan is a policy document that sets forth recommendations to shape future land use, public facilities and spaces, building forms and character, and economic development for Downtown Iron Mountain. Planning documents in general usually contain 3 key components. Those are: 1) background information on the past and present of the area; 2) a record of various forms of public involvement and input specific to the planning effort; and 3) general recommendations and specific actionable projects. The purpose of the plan is to approach the future intentionally and provide a basis for thoughtful, strategic decisions that align with the goals of a more prosperous Downtown. The plan is ultimately adopted by the City Council as an action plan for improving the downtown area.
Background information for the first component of the plan is presented in the form of written descriptions, along with tables, maps, illustrations, and analysis. The idea behind presenting such information is to provide a common knowledge base to everyone in the community, and to provide some rationale for how the plan recommendations and projects are developed. Public involvement and input – the second component of the plan – are essential to ensuring that the downtown plan reflects issues and concerns deemed important by community stakeholders. The actionable recommendations set forth in the third component of the plan must be realistic and attainable, which is another reason why background information and public participation are necessary.
To be somewhat more specific, the Michigan law (PA 57 of 2018) pertaining to downtown plans indicates that the plan must contain, among other items:
- A boundary map and description of the “development area” or the DDA boundary.
- A land use map and information describing existing public facilities, private land uses, and a legal description of the development area boundary.
- A description of facilities and structures proposed to be demolished, repaired, or altered; a description of repairs or alterations and their estimated costs and time to complete; parts of the development area to be left as open space; any zoning changes and changes to public facilities such as streets and utilities; an estimate of the proposed method of financing for projects.
- A description of the parties to whom any portion of the development area is to be leased, sold, or conveyed and for whose benefit projects are being undertaken. Also, a description of the procedures for bidding for such leasing, purchase, or conveyance.
To provide a better understanding of downtown plans, we have done some research and identified a few standout contemporary examples from Michigan and elsewhere. Please click on the links below.
What is tax increment financing (TIF)? TIF is a financing mechanism utilized by municipalities in Michigan and many other states to help pay for improvements to public facilities and to rehabilitate buildings. Basically with TIF, a municipality is allowed to capture a portion of local property tax revenues – particularly the revenues associated with property value increases – for specific purposes as set forth in a plan. In addition, the area within which this occurs must be specifically defined, and TIF is active for a long time frame, generally 15-25 years, as specified in the local TIF plan.
TIF is intended as a powerful financial tool to equip the City and the DDA to help solve downtown-related problems, as noted in PA 57 of 2018:
- Property value deterioration is detrimental to the local and state economy.
- Government programs are desirable and necessary to eliminate the causes of property value deterioration, and to strengthen the tax base upon which local units of government rely.
- Tax increment financing (TIF) facilitates economic growth and development by enabling improvements to public facilities and structures.
- Halting property value deterioration and promoting economic growth are essential governmental functions and constitute essential public purposes.
- Tax increment financing provides a means for local units of government to eliminate property value deterioration and to promote economic growth.
These statements set forth the purpose of downtown plans and tax increment financing, and indicate that local governments are key drivers of positive change for downtowns. The video and graphic below provide a brief explanation of TIF.
- A detailed explanation of the tax increment procedure, the maximum amount of bonded indebtedness to be incurred, and the duration of the program.
- A statement of the estimated impact of tax increment financing on the assessed values of all taxing jurisdictions in which the development area is located. The portion intended to be used by the authority must be clearly stated.
Thus, the downtown/TIF plan must provide a detailed financial analysis of the revenue anticipated to be generated by tax increment financing, and how those funds relate or compare to plan recommendations and proposed projects.
For more information on this important planning effort stay tuned to this web page. As the planning effort progresses and evolves, we will be updating this page and creating additional content. Also, please follow Downtown Iron Mountain on Facebook and Instagram. If you have further questions / concerns, or are interested in being involved, please contact DDA Program Coordinator Tim McCauley at 906-774-8534 or programs@downtownironmountain.com.