Editorial

City doesn’t need a Trojan horse among leaders

November 8, 2013
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The Business Journal is increasingly curious regarding operations of Downtown Grand Rapids Inc. The new entity is an umbrella organization with authority over four important tax-supported boards or authorities with very separate and specific lines of funding and activity and added “user groups” for guidance: Downtown Development Authority, Downtown Improvement District, Monroe North Tax Increment Financing Authority and Grand Rapids Office of Special Events — although the latter does not collect property tax revenue. DGRI has no revenue source or budget.

What has admittedly been motivation to create “one-stop” authority appears more to be a Trojan horse of a government within government.

During its last scheduled meeting Oct. 28, DGRI President and CEO Kristopher Larson, who also is the DDA’s executive director, said, “DGRI does not have revenue to support its share of costs. We need to split that accurately across organizations.” The office rent for the new authority over authorities alone is $5,195 monthly for seven years.

The city was allocated nearly 14 percent of DGRI’s payroll and operating expenses, the total of which, at this point, are unknown. Mayor George Heartwell and City Manager Greg Sundstrom both called the allocation into question, but even without receiving an answer at the end of discussion, they approved the “budget” and appropriation. Sundstrom, noting the city pays the salary of the city special events staffer, even inquired, “So our allocation provides him with a desk?” One week later Sundstrom said the comment was inconsequential. The city representatives were assured the DGRI board would revisit the allocations again (and maybe even have a full budget to review?) before the fiscal year ends June 30.

One could question the order of city business and the tax funds streaming to each agency, however.

The “ambassador” program (see Comment, Sept. 20) is one example of what the Business Journal expects will become the norm: solutions looking for problems. Taxpayers have the bill, especially the downtown property owners who pay the assessments and requested to do so, creating the entity. At its creation, downtown marketing was not an objective; it is and was handled by other tax-supported organizations.

The Framework to Guide Future Planning and Investment report put together by a Denver-based consultant for the DDA is questionable, even with homegrown user groups involved. Does Grand Rapids still need to see advice from those who do not live in Grand Rapids but try to become familiar with the “neighborhood”?

Perhaps the true balance of worth for the DGRI is its ROI. But after start-up expenses, add-on programs and user groups (including those with no money on the line in real dollar investment), the lesson may already be so expensive local “users” are not “computed” and the stakeholders and taxpayers have another inside government bill to pay.

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