Grand Rapids DDA will look at restructuring

January 14, 2011
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The Grand Rapids Downtown Development Authority formally adopted a plan last week that could change the longstanding organization into a very different, restructured entity, if board members follow the recommendations presented to them by the Denver-based consultant that headed their six-month-long Framing the Future effort.

Progressive Urban Management Associates President Brad Segal told board members last week that the DDA should reorganize into a downtown holding company. He also said the new organization should include the Downtown Alliance and, possibly, the Downtown Improvement District under its umbrella.

“The idea of a holding company is you would have all of your tools in one tool box,” said Segal. “We think there will be some cost efficiencies from having everything in one place.”

Segal said eliminating duplicate efforts and creating a more unified and influential partnership to steer the direction of downtown developments were two more advantages the DDA would likely gain from operating as a holding company.

Segal also suggested that the board reorganize internally as well, by establishing three action groups that would separately oversee the district’s economy, environment and experience. Each group would be led by a board member. “The purpose of these action groups is to review projects as these come to the board,” he said.

At the same time, Segal suggested the DDA reform its annual budget into a spending plan that reflects the action groups, meaning the budget would be split into three categories, and separate allocations would be made for each action group. Launching incubator districts for business start-ups and creating a venture capital fund would be two primary components of the economic budget. 

Segal suggested the DDA invest $150,000 in the next fiscal year to begin the incubator units, which he felt should first be located on Monroe Center and Division Avenue, with a few on Fulton Street. Then, he said, the incubators could be expanded into other areas in the district once the first ones are open. He also said the board should commit $500,000 next year as seed money for a $2.5 million venture capital fund that would hopefully draw private philanthropic support.

“We think that is a short-term activity,” said Segal of the fund. He also suggested investing $50,000 next year into a retail marketing plan. “Some resources should go into public safety, especially along South Division Avenue.”

DDA Chairwoman Kayem Dunn said the board’s task force would go through the 45-page final report with a fine-tooth comb and devise ways to implement as many of the recommendations as possible. The task force is chaired by DDA member Brian Harris.

“I think the implications are pretty significant,” said Harris. “We commissioned a lot of money to get this done. If someone asked me if it was worthwhile, I’d say it was.”

The DDA appropriated $135,000 for the work, with $100,000 going to PUMA. The remainder was split between Nederveld Inc. and Clark Communications, two local firms that assisted PUMA on the project that began last August.

Despite a possible new direction in the works for the DDA, board member John Bultema said the panel wouldn’t turn its back on what it traditionally has done. Member John Canepa pointed out that a new direction would “represent a diversion of dollars” for the DDA. Canepa noted that street construction accounted for the board’s top eight funded projects last year; the DDA took on more of that responsibility at the request of the city.

DDA member Jim Talen said he sensed a reorganizing effort would put more of an emphasis on the DDA’s non-tax revenue fund, a much smaller fund than its property-tax fund. He said members would need to keep a close eye on that account, which gets most of its dollars from parking revenues. Mayor George Heartwell felt the DDA task force should review the state statute that empowers the board. The mayor also felt the board might want to speak with the other DDAs in the county about its plan.

Segal said three things impressed him and his associates about downtown. He felt much of it was well designed and said that design element could be extended to the Grand River. He said the public-private partnerships that have revitalized the district were an uncommon characteristic because most downtowns in the country don’t have that level of cooperation. He also said that the enthusiasm that has been expressed by the area’s young people for downtown is unique to the city.

“Our process was extensive in its outreach. Retail was the top priority. Retail was the top priority throughout the process,” said Segal of the public’s response. “I do think we’re providing you with a skeleton, and you can put the meat on the bones.”

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