Downtowns & TIF

Definition of a Downtown District

A downtown is the densely settled commercial core of a community that serves as its social and economic center that has intensive commercial or mixed uses with contiguous multiple blocks of zero lot line buildings with adjacent medium density areas that allow for district growth, and these downtowns have intensive public and private capital investment.
Downtowns have the following characteristics:

• Multifunctional with places to shop, work, dine, live, worship, receive governmental services, be entertained, and enjoy a variety of cultural offerings;
• Contain at least one commercial street with majority of spaces devoted to retail and characterized by a predominance of large storefront display windows;
• Concentration of buildings dating from a variety of periods under multiple ownership structures that forms a unique character that has evolved over time and reflects the community's character;
• Compact, walkable, pedestrian-orientated district with buildings located in a manner that creates continuous facades set close to or on the property line with entry to buildings directly from sidewalks; and
• Acts as a key defining feature of the community's overall Sense of Place.

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What is Tax Increment Financing (TIF)?

• Enacted on August 13, 1975, Public Act 197 of 1975, otherwise known as the DDA Act, authorized the use of Tax Increment Finance to correct and prevent the deterioration of downtown areas in the State of Michigan.
• Under P.A. 197, TIF Authorities capture the year-to-year growth in property values, on an annual basis, and reinvest those dollars in public facilities, as defined by the statute, within the TIF district.
• DDAs were created to solve an externality or market failure occurring in downtown areas.
• PA 57 2018, updated PA 197.

Why is TIF needed?
After 40 years of hard work, and tens of million dollars of investment, downtowns are making a come back across the state. This would have never happened if it were not for the diligent downtown management and ongoing programs of Downtown Development Authorities (DDAs). While downtowns are on the rise in popularity, our work is never done in ensuring the long-term prosperity of our historic downtowns and shopping districts as market conditions evolve.

How are TIF funds utilized by DDAs
Since 1975, the State of Michigan has enabled DDAs to utilize Tax Increment Financing (TIF) in downtowns large and small to invest in infrastructure improvements, redevelopment of blighted areas, job creation, and events and promotions that make downtowns relevant, exciting and a key reason why people choose to live in a community.

Educational Materials
For more information about TIF, click on the links below:
The Importance of Tax Increment Financing
Link to the Department of Treasury TIF Reporting Site and DDA Reporting Form
PA 57 2018