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Michigan Street Corridor plan complete
The Michigan Street Corridor officially has a plan for future development within its district.
Less than a year after formally establishing the Michigan Street Corridor Improvement District and the Corridor Improvement Authority in May 2015, Grand Rapids city commissioners have approved the goals, priorities and funding plans outlined in the Michigan Street CID Development Plan and Tax Increment Financing Plan.
The plan was submitted by the Michigan Street CIA and prepared by Neighborhood Ventures. It outlines proposed improvement projects for the Michigan Street Corridor and details a 30-year TIF plan beginning in 2016 and ending in 2045 to leverage tax revenues from increasing property values to reinvest within the district.
Max Benedict, chair of the Michigan Street CID board and principal at Third Coast Development, said work on the plan began once the CID was created and is the first plan for the corridor that will allow for funding.
“This is the vehicle by which our Corridor Improvement Authority gets funded and then is able to spend those monies,” said Benedict.
The Michigan Street CIA was established to develop a plan for the CID and uses a portion of the increase in annual property tax revenue as one form of financing for infrastructure improvements and facility enhancements within the defined boundaries of the district.
The CIA determined “in order to finance the activities and projects set forth in the Development Plan, a tax increment financing plan must be adopted,” according to the plan.
The 30-year TIF plan is based on 2015 taxable value of approximately $51,640 for the nearly 295 real properties located within the district. Beginning in 2016, the Michigan Street CIA expects to capture tax revenues of about $3,957 based on a 0.5 percent annual growth. By 2045, the CIA is projecting a TIF capture of more than $127,753 and an overall total capture of $1.93 million for the 30-year period.
“By the City Commission approving the plan, that, in a sense, sets the baseline of property taxes for our corridor, and that means increases in property taxes moving forward will be able to be captured from our corridor and spent locally … determined by the residents and business owners who work along the corridor,” said Benedict.
“Our improvement district plan that we put in place outlines every specific eligible activity for anything from park benches to garbage cans.”
Mark Lewis, president and CEO of Neighborhood Ventures, said some of the projects along the Michigan Street Corridor are pretty significant, and the captured TIF estimates are somewhat conservative.
“The 616 (Development) project on the corner on Diamond and Eastern is probably going to have more than 0.5 percent growth. We want to use very conservative growth numbers,” said Lewis. “Property values are not always going to increase, but we do need to show impact.”
As part of the TIF plan, the Michigan Street CIA will submit an annual report to each of the entities for which taxes are captured to show how the funds were used and the implementation status of the work outlined in the plan.
The Michigan Street CID Development Plan and TIF Plan also lists a number of proposed projects for the corridor and arranges the initiatives in four categories: design, economic restructuring, organization, and promotions and marketing.
Design projects are intended to enhance the “character of the corridor through physical change” and include innovative forms of transport and parking, greenery and public gathering spaces, and improved walkability for pedestrians.
Economic restructuring projects are meant to support the business district corridor as a commercial core, such as: business recruitment and retention initiatives; developing a revolving business micro-loan fund; and converting vacant properties for commercial or mixed-use purposes.
Organization-based projects range from coordinating activities with hospitals, and implementing a community watch team program, to long-term projects of site demolition and abatement support. Promotions and marketing initiatives focus on strengthening the corridor’s image and establishing it as a social center for residential neighborhoods.
“The Michigan Street Corridor Association had a large involvement in the Michigan Street Corridor Plan, which really outlines the look and the feel of the mixed-use and density for the district,” said Benedict. “Any opportunity to explain what we were going for, we really wanted to mimic kind of what our community already put input for, which is outlined in the Michigan Street Corridor Plan.”
Some of the short-term projects proposed are: install seasonal elements estimated at a cost of $9,000 and completed by 2017; market commercial real estate opportunities, anticipated to cost $2,000 and be completed between 2017 and 2018; and create a general marketing and promotion strategy, estimated to be completed between 2016 and 2018 for nearly $5,000.
Longer-term projects such as site demolition and abatement support are estimated to approach $150,000 and be completed between 2031 and 2044; while commercial property acquisition and leasing is expected to be completed during the same timeframe for approximately $500,000.
Other than the TIF plan, possible financing sources include interest on investments, donations received by the Authority, proceeds from state and federal grants, and public and private foundation grants.
The plan is a culmination of nearly three years of work involving stakeholders who supported the Michigan Street Corridor Plan, including: the city of Grand Rapids, Frey Foundation, Grand Rapids Community College, Grand Rapids Community Foundation, Grand Rapids Smart Zone Authority, Grand Valley Metropolitan Council, Grand Valley State University, Michigan State University, Spectrum Health, North Monroe Business District and HUD Sustainable Communities.
Benedict indicated about 50 individuals spent close to 500 hours developing the plan for the corridor, with input from business owners and residents.
“This is going to be, I believe, the fifth Corridor Improvement District out of the city of Grand Rapids,” said Benedict. “The projects that go along Michigan Street are on such a large scale in nature — when you look at the hotel that just went up, which the tax incremental will be captured after the developers are reimbursed. You are looking at a $52 million apartment complex with 300 apartments in it. It is a very grand scale.”
Benedict added: “I think the Michigan Street Corridor is really going to stand alone as far as the amount of investment it is able to direct with its own citizens, residents and business owners on the corridor.”