County Likely To Support CID Plan

December 10, 2007
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GRAND RAPIDS — County commissioners probably will ratify a tax-sharing agreement this week with two townships that have created a Corridor Improvement District.

And chances are the county will take the same approach with the proposed expansion of the Grand Rapids Downtown Development Authority that it recently took with Grand Rapids and Plainfield townships over their CID.

Back in March the county chose not to participate in the Plainfield Avenue CID and that decision meant the townships couldn’t capture any portion of the county’s property tax in the designated Plainfield Avenue commercial sector, which runs from Lamberton Lake to Airway Drive and has 152 properties on the northeast side of the county.

At the same time though, county officials said they were willing to negotiate a tax-sharing agreement with the townships so the corridor board could collect some of that revenue for improvements and the county also could keep a portion for its general fund.

County Chairman Roger Morgan said last spring he was more concerned about losing tax revenue from the corrections and senior services millages than the revenue that goes into the general fund. He also said the ability of tax-increment financing authorities, such as a CID or DDA, to capture for as long as it exists concerned him, too.

TIFAs, unlike Renaissance Zones or abatements, don’t have an expiration date.

County Administrator and Controller Daryl Delabbio said he recently reached an accord with Grand Rapids Township Supervisor Michael DeVries and Plainfield Township Manager Robert Homan. The county’s Finance Committee approved the pact last week, county commissioners will vote on it Thursday, and the township boards are expected to vote on the agreement soon. The Plainfield board meets next Monday, while the GR board gets together again on Jan. 8.

“We’re only sharing with them a portion of the general operating levy and it’s on a matching basis,” said County Fiscal Services Director Robert White of the CID contract.

The agreement is for 10 years and can be renewed for another 10 years. The county will match the amount of revenue the corridor will capture, but not the full 4.3 mills the county levies for its general fund. So if the townships agree to make, say, 2 mills available for that corridor capture, the county will let 2 of its 4.3 mills be captured within the district.

But the revenue dedicated to the corrections and senior services millages are off limits from that capture, and any existing TIFA within the townships that currently collects that revenue has to stop doing so. There aren’t any TIFAs in Grand Rapids Township and the Comstock Park DDA is the only one in Plainfield Township.

Comstock Park doesn’t capture revenue from the senior services millage, and DDA officials have told the county they would stop capturing the corrections revenue.

“They’re also giving something up to get this agreement,” said White.

Another provision in the agreement allows the county to freeze the amount of revenue captured by the CID to the previous year’s level, if total property-tax receipts to the county that year fail to rise by 3 percent.

The agreement comes from the economic development participation policy the county enacted in March. It’s likely the county will adhere to it again when it comes time for the commission to decide whether to participate in the expansion of the Grand Rapids DDA.

The GR DDA wants to extend its boundary by 370 acres and is offering jurisdictions that would give up tax revenue to the board an incentive to go along with the expansion. For the county, that incentive would result in an additional $72,000 of revenue coming back to it in the first year the expansion takes effect. The revenue amount would rise in future years by 5 percent every five years until 25 percent of the capture is returned to the county.

But so far, the county hasn’t been all that impressed with the offer.

“They’re proposing to gives us our money back,” said Delabbio.

Most of the issues the county is facing with the DDA are like the ones it faced with the Plainfield Avenue CID. The duration of the capture, which has no end date, and the capture of revenue from the two millages are two vital concerns to the county. Only the amount of the revenue the DDA would capture is clearer.

City commissioners held a public hearing on the expansion last week and are set to hold another one next week. Once the hearing is closed, taxing jurisdictions that will be affected by the expansion have 60 days to decide whether to opt in, not respond, or opt out. Not responding has the same effect of opting in, as it means a jurisdiction is participating.

For the county to enter into negotiations with the DDA, it has to choose not to participate, or opt out, like it did with the Plainfield CID last March.

Kent County said it lost $1.35 million to tax-capturing districts and authorities in Grand Rapids last year and a total of $6 million countywide.

Delabbio said he will make his recommendation on the DDA expansion plan to commissioners next month.

“The proposal by the city has to be analyzed,” he said. “It’s not something to be tossed aside lightly.”

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