DDA puts school pledge For revenue in writing

November 12, 2010
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The Grand Rapids Downtown Development Authority formalized an agreement last week that it made with the city’s public school system four years ago, and continued one that it made with the Interurban Transit Partnership in 2000. Both contracts involve tax-increment revenue the DDA captures.

In 2006, the DDA promised to return all the unused revenue it captures from school millages to Grand Rapids Public Schools, the Kent Intermediate School District and the State Education Tax fund. The state treasurer approved the board’s return policy in 2006, and the pledge the DDA made then to GRPS was put into writing last week.

The DDA captures a portion of the school-millage revenues within its district to pay the debt service for projects it supported with bond packages before 1995, such as Van Andel Arena. Debt is the only item for which the board can use those funds, and the ability to use those dollars in that manner was eliminated in 1995 when voters approved Proposal A and changed the way public school systems were funded.

Any tax revenue that is captured above the DDA’s debt service has been returned to the respective school systems, with about two-thirds of that amount going to GRPS, which uses those funds to pay its debt. DDA Treasurer Jana Wallace said the board would likely return about $3 million to the city, county and state systems by the end of this fiscal year. The DDA is expected to capture roughly $8 million from those millages by June 30.

The debt payment for the arena’s construction this year is about $3.5 million, and that payment will continue until 2024. Another $270,000 this year will go to servicing the debt for the public museum’s parking ramp. The ramp payment ends in 2014. “We can only use that (capture) to pay debt service,” said DDA counsel Dick Wendt.

When the DDA began capturing a portion of the ITP millage in 2000, it agreed to spend those dollars on transit-related improvements, such as The Rapid’s Central Station. DDA Executive Director Jay Fowler said the board has spent at least $1.4 million just over the past few years on those items, and last week the board committed $850,000 to help ITP build a new Amtrak station that will be built across Wealthy Street from Central Station, making it a true transit hub.

Most of the DDA funds — $800,000 — will go to the actual construction of the station, while $50,000 will be spent on a parking lot for Amtrak riders. “This is part of the grand plan ITP had all the way back in 2000,” said Taiwo Jaiyeoba, director of planning and program development for ITP.

ITP recently received a $3.8 million grant from the Federal Railroad Administration, but that money can only be used to move the existing Amtrak rail from the corner of Market Avenue and Wealthy Street to the station’s new location. The DDA money will go toward buying two properties owned by Norfolk Rail and for the design and construction of the station. The total project will cost about $4.6 million. ITP will own the Amtrak station.

“We’re looking at 12 to 18 months, provided we get consultants aboard,” said Jaiyeoba of the project’s timeline.

The DDA expects to capture about $317,000 this fiscal year from the ITP millage.

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