It's Deja Vu All Over Again

February 23, 2008
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GRAND RAPIDS — City commissioners agreed for the second time last week to approve the Downtown Development Authority’s expansion plan, which adds 371 acres to the panel’s boundary and broadens the board’s reach to 676 acres in the central business district.

The first time commissioners voted to expand the DDA was on Dec. 18, just minutes after they closed the second of two public hearings they held on the plan. But the DDA Act of 1975 requires a governing body to wait at least 60 days after closing a hearing before it can amend a city ordinance that changes the physical size of a district.

At least, that is the opinion the state Department of Treasury gave the Business Journal when it asked if commissioners had voted too soon.

“According to the statute, if a DDA is expanding its actual boundary, then it would, per statute, have to wait 60 days (to vote),” said Treasury spokesman Terry Stanton last month.

“That’s how the statute reads,” he added.

Stanton also said the Department of Treasury wouldn’t act on the city’s action unless a complaint was filed with either the State Tax Commission or the Kent County Prosecutor’s Office.

The city, though, maintained last week that its first vote in December was proper, and the required 60-day waiting period wasn’t relevant.

“Our counsel feels it does not apply in this case,” said DDA Executive Director Jay Fowler last week.

The city also said it was only taking a second vote last week, which happened on the 61st day after the hearing closed, as an effort to “avoid any future question as to whether the city commission’s action was valid and to avoid the need for future legal action to defend the commission’s action.”

Although last week’s vote was the commission’s second on the expansion plan, it actually was the first for two of the board members. Neither 1st Ward Commissioner Walt Gutowski nor 2nd Ward Commissioner David LaGrand was on the board in December when the first vote was taken, as their four-year terms began in January.

Not all of the expanded acres are tax-increment financing areas for the DDA as the board preferred to make those blocks available for future brownfield designations.

But Kent County and Grand Rapids Community College held separate votes that resulted in both taxing jurisdictions not letting the DDA capture a portion of their property taxes in the new blocks that qualify for tax-increment financing.

The Interurban Transit Partnership and the city, though, agreed to let the DDA collect shares of their property taxes in the new areas, and both will begin receiving a 5 percent rebate from the DDA on their respective tax captures this year.

State law entitles the DDA to capture the improved portion of the other jurisdictions’ property taxes within its district for as long as its term lasts. The Grand Rapids DDA term currently runs until 2034.

The DDA approved the expansion plan in November. The Business Journal nominated the plan as one of the top 10 local news stories for 2007.

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