Changes in fundamental DDA structure merit sharp scrutiny

January 14, 2011
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Grand Rapids Downtown Development Authority is looking at 2011 as a year to remodel, based to some degree on recommendations from a Denver-based planning agency using models from other parts of the country to establish a restructured entity. To the DDA’s credit, it is walking bravely into what could become a new economy model for such agencies, and one that is also expected to be controversial.

Progressive Urban Management Associates of Denver, which spent six months crafting an outline for a restructured entity and holding community-based public meetings, has advised the DDA to restructure as a downtown holding company using three distinct structural avenues. To what degree the public forums were led to give all manner of hopeful projects for the downtown that fit in preconceived “departments” by the self-described “real estate economic planning group” is a noteworthy question but several other important considerations are likely to set fire to governmental discussion, chiefly by the Kent County Board of Commissioners, which counts Commissioner Jim Talen as its representative on the DDA board. The city’s representative, Mayor George Heartwell, was right to question first the legal authority and state statue by which the authority is operated.  DDA Chairwoman Kayem Dunn assured the Business Journal during an editorial board meeting that the entity would stay within the state statute guidelines, but
is excited about the possibilities of working within a new framework. We encourage those invited by Dunn to now form a task force for discussion, though we caution that such a group is wholly planned to include other government or quasi-government agencies.

Among the recommendations to frame all of the DDA’s work are:

  • The “economy,” which would include “incubator districts” for business start-ups with $150,000 in DDA funds.

  • Creation of a $2.5 million venture capital fund with $500,000 in seed money to attract philanthropic support.

  • $50,000 in DDA funding for a retail marketing plan.

DDA member Brian Harris, who has chaired the “Framing the Future” plan task force, said the new plan is a framework, not a “master plan” and likened the building of the past 20 years (such as the Van Andel Arena) to icons. Downtown now needs to “fill in” he said, and the DDA is focused on the best projects and processes to do that.

One could consider the “incubator districts” to be a 2011 form of Renaissance or Brownfield funding for the “right” projects and businesses, but therein lies lessons from past experience with government “subsidies” and government agencies that would pick winners and losers. This is especially true if the DDA is not including in its task force or structure the “creative class” of entrepreneurs and builders who have framed the downtown to date. Further, caution must be advised as the “incubator properties” are primarily targeted for Monroe Center — prime downtown real estate — for which plans should be driven by market forces rather than governments. A venture capital fund using public dollars and which might be a duplication of other efforts also is cautioned.

While many questions await answers, the DDA has indeed moved boldly forward and should be commended for future thinking rather than plodding. Full public discussion is necessary before the DDA independently adopts such wholesale changes.

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