Construction, Economic Development, and Government

County opts in to DDA tax capture districts

DDA executive director expects gain share rebates to equal more than $10 million over a 30-year term.

February 3, 2017
| By Pat Evans |
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Kent County has opted in to the Grand Rapids Downtown Development Authority tax capture districts.

County commissioners approved the decision at the Jan. 26 board meeting, following approvals by the DDA and Grand Rapids city commissioners. The decision not to opt out of the 10 percent gain-sharing opportunity is the first time in more than 20 years county commissioners have opted in.

“We are sincerely appreciative and thankful for the Kent County Board's action today approving an agreement that establishes a new era of collaboration between the County and the DDA,” DDA Executive Director Kris Larson said in a statement. “The Board's action strengthens the County-DDA partnership at a time of significant opportunity and change for Downtown Grand Rapids and the broader Kent County community.”

The gain share rebates are expected to equal more than $10 million over a 30-year term, according to Larson.

Part of Michigan’s development strategy since 1974, the county didn’t have an option of taking part in tax capture districts before 1995, which resulted in the bleeding of revenue. State policy changed in 1995 to allow for entities to opt out of tax capture districts.

There have been some districts since 1995 the county could not opt out of because of certain requirements.

The county opted out of two prior opportunities, in 1995 and 2007, and the county missed out on $146,000 in revenue in the 2016-17 fiscal year by not taking part in those portions of the district. The DDA’s tax increment financing districts earmark property tax value increases and, in turn, use them to foster redevelopment and community improvement projects.

Until this offer from the DDA, special millages passed by county residents also would have been included in the captures of the districts.

“That’s a different ball game all together,” Kent County Administrator/Controller Darryl Delabbio told the Business Journal in January. “What they’ve done is say they’re not collecting the zoo and museum millage, and once the bonds are retired at Van Andel Arena (in 2024), they will no longer capture the veterans or senior services millages.”

Once the bonds are retired, the county will receive an additional estimated $3.9 million and $390,000 for senior and veteran’s services in the 30-year term.

“The DDA board and staff are hopeful these good government innovations serve as a new model to inform the ongoing conversations about DDA reform in Kent County and the state of Michigan,” Larson said.

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