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County should support DDA through TIF

A good portion of the money that funds the Alpena Downtown Development Authority’s great and important work comes through what’s known as tax increment financing, also called TIF.

Through TIF, a small portion of property taxes collected by local governments on properties within the DDA district go to the DDA instead of the local governments.

Now, the DDA wants to expand its boundaries to cover more of Alpena, making more parts of the city eligible for DDA-backed events and DDA promotion and more businesses eligible for DDA-aided grants for facade improvements and the like.

To fund that expansion, the DDA wants to simply extend the TIF agreements with the local taxing authorities — in this case, Alpena, Alpena County, and Alpena Community College — to cover the properties within the expansion area. In that way, the expanded DDA would be funded the same way the current DDA is funded.

Alpena’s on board. So is ACC.

Alpena County has balked.

Some county commissioners have worried about the 30-year commitment to TIF and about diverting to the DDA tax money the county needs (the county’s cash savings has shrunk 8.5% in the last four years as officials tapped savings to cover bills).

Instead, commissioners have floated to DDA officials the possibility of a service agreement through which the county would pay the DDA separate from TIF.

This week, commissioners pondered using a portion of the money the federal government paid the county through the American Rescue Plan Act to cover the entire 30 years’ cost up front. So, instead of paying about $375,000 through TIF over 30 years, the county would pay $375,000 of its ARPA funds in one payment.

The county received about $5.5 million from ARPA and has about $1.6 million left. It has largely used those funds to fill holes in the county budget.

County Administrator Mary Catherine Hannah was tasked with figuring out if ARPA funds could be used in that way.

The county should just keep it simple and continue to participate in TIF the way Alpena and ACC have vowed to do and the way DDAs are meant to be funded.

That would help provide the DDA with a steady, reliable revenue stream and allow DDA officials to do their work. It would also allow the county to keep its ARPA funds for other uses.

The DDA expansion would be a good thing for the city (six business owners came out in support of the plan this week), and the county’s reluctance to get on board seems to be the only thing holding it up.

Let’s make this happen, Alpena County.

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