CONDENSED HISTORY OF WYANDOTTE'S TAX INCREMENT FINANCING AUTHORITY (TIFA)
By: Charles L. Mix - TIFA Chairman
The success of the Tax Increment Finance Authority (TIFA) in Wyandotte is a major factor in the revitalization, rejuvenation and positive turn-around experienced in the City. Provided below is a condensed history of TIFA.
In 1980, the Tax Increment Finance Authority Act (the “TIFA Act”) was enacted by the Michigan Legislature under Public Act 450. Its purpose and goal is to prevent urban deterioration and to encourage neighborhood revitalization and to spur new redevelopment. TIFA is a vehicle by which a portion of a city's tax dollars can remain within a city to help fund redevelopment projects within the TIFA area boundaries.
TIFA came into existence in Wyandotte by acts of the Mayor and City Council in 1986. At that time, the TIFA area boundaries were established, and in 1987, a TIFA Development Plan and Financing Plan were adopted. The Plan boundaries, which are defined in detail in the TIFA Plan on file in the City Clerk’s office, are roughly the eastern two-thirds of the City excluding the downtown area and 25 acres owned by Atofina Chemicals in the southern end of the City.
The downtown Central Business District is under the separate authority of the Downtown Development Authority (DDA). Although both TIFA and the DDA utilize tax increment financing, each has a separate board of directors and they operate independently of each other.
The method of TIFA funding was set at the time of TIFA’s implementation in Wyandotte. Real estate property assessments were "frozen" at their then present levels and the revenue derived from increases in future assessments are "captured" and retained within the City for TIFA funded projects.
TIFA was the logical and progressive outgrowth of earlier attempts at urban renewal development within the City. The South-Central Renewal Plan of 1962 directed its sights on the Biddle and Eureka Area. Under Urban Renewal Director Lloyd Siler, that area was cleared and redeveloped throughout the later 1960's and early 1970's. The results greatly helped revitalize the downtown area.
In 1984, Wyandotte received a $4,000,000 Urban Development Action Grant (UDAG). These funds were used basically in an attempt to help alleviate blight in residential neighborhoods by tearing down old dilapidated housing. TIFA continued this tradition by providing ongoing funding of millions of dollars for this process. The snowball effect on the rejuvenation of residential areas in the City has been dramatic, benefiting the homeowners by significantly raising their property values.
Also in the 1980’s, BASF Corp. and Pennwalt Corp. tore down most of the old heavy industrial chemical plant buildings, especially in the south end of the City. Eliminating these eyesores dramatically improved the Wyandotte waterfront area. The 1974 Master Plan of the City called for the establishment of a second industrial park to be located south of Grove Street between Biddle and the railroad tracks. This new industrial park is now a successful reality due in part to TIFA funding which purchased and demolished most of the existing residential homes in the area, clearing the way for this new development.
The effectiveness of TIFA funding was enhanced in 1987, when Wyandotte enacted a strict building code enforcement ordinance for both residential resale and rental properties. Faced with the heavy expense of bringing old dilapidated homes and rentals up to code, many property owners opted to sell their homes to the City. This greatly aided in the revitalization of many TIFA area neighborhoods, especially the near south end (Eureka to Grove east of the railroad tracks) and the near north end (north of Northline and east of the tracks). Neighborhood Enterprise Zones with property tax reductions also helped spur the construction of new homes in those areas.
In 1993, TIFA sold bonds to help build Wyandotte Shores, a city-owned 9-hole golf course, and to develop the adjacent waterfront park in the former South Renewal Area. This was done on land leased from BASF Corp. on a cleared site where once stood a heavy industrial chemical plant. Both of these projects greatly enhanced the City’s waterfront appeal and encouraged the building of expensive homes in the immediate area.
TIFA in Wyandotte was originally set up as 3 separate districts: the North, Central and South Development Areas. Limited Tax Bonds were sold to help finance projects in those areas. The three areas were merged in 1991 into the current TIFA Consolidated Area.
TIFA is administered by a nine-member independent Board of Directors, who are appointed by the Mayor and approved by the City Council. The premise behind this Board was that the State of Michigan did not want TIFA funds directly administered by local elected officials whom they feared would be tempted to direct the funds to their own general fund projects. The City’s Mayor and Council must, however, approve the TIFA budget. Fortunately, the TIFA Board members, past and present, have taken this responsibility seriously and insured that TIFA funds are used for their intended purposes.
The TIFA Board members also wear two other "hats". They constitute the Board of Directors for the Economic Development Corporation (EDC), a development entity utilized in the 1980s and early 1990s but is now inactive. They also constitute the Board of Directors for the Brownfield Redevelopment Authority (BRA) which was authorized by the State of Michigan and came into existence here by a resolution adopted by the Mayor and City Council in 1997. The BRA's purpose is to assist with redeveloping properties that are obsolete, blighted or that may have environmental issues to resolve, by utilizing Brownfield tax increment financing, State or Federal grants, State tax credits, and other available resources.
In 2001, the TIFA Board and the City entered into a historic agreement by which TIFA would directly share revenues with the City. This revenue can go directly into the City's general fund. This was made possible by an amendment to the TIFA Act by the State. It was necessitated by the fact that the City's general fund had become constrained because of declining state revenues and the fact that TIFA was "capturing" a large portion of the increased tax revenue since the base year of the 1987 TIFA Plan. This much-needed infusion of over $400,000 allowed the City to balance its budget. TIFA may continue to revenue share with the City in the future.
TIFA redevelopment has not only been effective in residential and industrial redevelopment, but has also extended to other areas in the City as well. Improvements have been made to roads, sewers and recreation projects. Commercial developments, such as the funding to help relocate the Department of Public Service and thus make possible the new Daly-Merritt building on Biddle south of Northline, as well as the purchase and demolition of old structures to enable construction of the new medical office on Biddle near Alkali, and other commercial projects have been completed. Another result has been the positive impact on the school system, which has taken place as new families have become homeowners in revitalized neighborhoods, and thus are tied to and committed to the City in a more permanent manner.
The new residential development project west of Biddle near Mulberry and Cedar Streets, known as the Cambridge Pointe Development, has also been made possible because of TIFA funding. Construction of the 15 homes and 60 condominium units will have a strong positive effect on the City's future tax base, adding more than $10,000,000 in value when completed. In addition, over $1,000,000 of TIFA funds were used to construct the new Fire Station on Northline at 11th. Also, plans for a new Police Station and District Court are under discussion for TIFA funding.
In 2003 TIFA revenues provided the funding for the City to purchase the old McCord factory site at St. John's just west of Biddle. The plant will be demolished and the land cleared. A new residential development is tentatively planned for this site of over 6 acres. In July of 2003, the Wyandotte City Council voted to extend the very successful TIFA program from its projected expiration date of 2018 to a longer term expiring in 2034. This action now ensures that TIFA funding will be available in the future to continue to help revitalize and transform our City.
Wyandotte is an old city (1854), with most of its housing stock, prior to TIFA, constructed between 1890 and 1957. Landlocked, with almost no new land available to develop, the City has had to resort to demolishing old structures to make room for new development. Much of this has been made possible by TIFA financing. That is why TIFA has been and will continue to be crucial in the future growth and well-being of the City.
In essence, it is logical to surmise that the very positive and successful impact of TIFA upon the City has been a major factor in turning around the long held, negative image of Wyandotte as an old, industrial, rust belt city. Wyandotte now enjoys a new favorable and positive image as a progressive, attractive, model, waterfront community. This is due in large part to the role TIFA has played in the revitalization and rejuvenation of the City.