Downtown district gets new governance body

June 18, 2012
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Apparently the fourth time is the charm.

The Grand Rapids Downtown Development Authority gave its blessing last week to creating and being an integral component of a new governance structure for the district called Downtown Grand Rapids Inc.

DDA Executive Director Jay Fowler said it was the fourth time such a governance entity had come across his desk in the nine-plus years he has served in the post. DGRI also includes the Downtown Alliance and the Downtown Improvement District. Both approved the new entity earlier.

“This, I think, is an excellent platform,” said DDA Chairman Brian Harris. “We’ll figure out the details later. What you approved here is a concept.”

DGRI is expected to provide communication and direction to the organizations. It will be headed by a CEO — most likely the DDA executive director — and a COO. Sharon Evoy, executive director of the Downtown Alliance for the past dozen years, is a leading candidate for that position.

Once city commissioners give DGRI their OK, Harris said work on the entity’s by-laws would begin. Grand Rapids Mayor George Heartwell thought the new governance structure was a good idea and felt DGRI helps set the future for the DDA, which he said is already a good organization.

DDA Vice Chairwoman Kayem Dunn gave credit to GR City Manager Greg Sundstrom and Deputy City Manager Eric DeLong for putting the effort together. A partnership committee, consisting of members from the three downtown groups and the city commission, reviewed four potential options and then recommended the organizational change. The idea for the new structure came from the Framework Plan done by Progressive Urban Management Associates of Denver for the DDA.

From that same plan, the DDA created a trio of action groups last year that oversee specific functions of the board and then recommend what steps should be taken on matters in their respective areas. The DDA has been pleased with that type of committee format, which has 29 individuals serving on the three, and the board last week extended the advisory groups for another year.

“This is certainly a recognition of their commitment,” said Harris of those individuals. “I think this is an interesting mechanism that has a bright future.”

Another DDA group, the executive search committee, unanimously recommended a replacement for the retiring Fowler. The board acted on it last week by choosing Kristopher Larson to be the DDA’s new executive director. Harris and Dunn will officially offer the position to Larson and negotiate what is likely to be a compensation package worth about $160,000.

Larson has served as vice president of the Downtown Long Beach (Calif.) Associates for the past three-plus years; before that he was a senior planner at the Raleigh Urban Design Center and deputy director for the Downtown Raleigh Alliance. He attended North Carolina State University, where he earned a bachelor’s degree in applied sociology and a master’s in urban management, planning and economic development. Larson was chosen from a field of more than 40 applicants.

“I’ve never seen reference reports like these. They were truly amazing. He has a range of experiences and scores well in communicating with others. He does have the budgeting and management experience we were looking for,” said Dunn.

“This is the right guy at the right time,” added Harris.

If the DDA and Larson agree on a contract, city commissioners will have to approve his hiring. “We’re going to make the offer, and I think he is going to accept it,” said Harris.

The DDA also adopted its five-year priority plan and fiscal year 2013 budget last week.

“The very good news here is the stability of the downtown tax base, overall,” said Fowler of the five-year outlook. “I have a list of 13 development projects on my wall. So it’s an exciting time.”

The five-year forecast for the local tax-increment portion of the DDA’s budget shows $24.7 million in total revenue from 2013-2017 and $22.1 million in total expenditures, leaving the board with a surplus of $2.6 million at the end of FY17. This portion of the board’s budget is vital for downtown development; its major revenue source, the district’s property taxes, covers much of the DDA’s economic incentives and physical improvements.

The DDA’s non-tax portion of the budget isn’t as stable. It projects $1.9 million in revenue over the five years, but expenditures are listed at $2.6 million through 2017. The fund’s major source of revenue is the parking receipts the board gets from its downtown lots, and Fowler said not all of the expenditures are sustainable for the five-year period. “But we have enough in the fund to sustain it for a few years,” he said.

The fund covers such varied items as public safety costs, support for Restaurant Week and maintenance of the Riverwalk.

The board’s final portion of its budget is the revenue it receives from the school tax and uses to pay the annual debt on the Van Andel Arena and the public museum parking ramp. The five-year forecast has $38.9 million in revenue and $38.8 million in expenditures. The excess revenue, estimated at $100,000, will be returned to the local schools.

So from 2013-2017, the DDA expects to see total revenue from its three funds of $65.5 million with total expenditures of $63.5 million. For FY13, which begins July 1, the three funds will give the DDA $14.6 million in total revenue, but total expenditures are expected to be $16.3 million and the board will likely have to dip into two of the fund balances, or reserve accounts, to make up the $1.7 million difference.

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