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KALAMAZOO, MI — A tax-capture proposal coming before Kalamazoo city commissioners is being described as a way to pay for a list of projects on Kalamazoo’s Northside.
Those projects could include an African American museum, a boxing and fitness center, streetscaping, and more, totaling an estimated $34 million.
The Kalamazoo City Commission will conduct a public hearing regarding the proposed adoption of the Northside Cultural Business District Authority at the 7 p.m. commission meeting on May 16 at city hall.
“What can it do for the Northside?” Northside Association for Community Development Executive Director Mattie Jordan-Woods said during an interview with MLive. “The same thing it’s done for downtown Kalamazoo,” though on a smaller scale.
The proposed Tax Increment Financing plan would capture the growth of the future tax base in the designated area to reinvest those tax funds back into the area, Deputy City Manager Jeff Chamberlain told MLive.
Downtown Kalamazoo has had a TIF for years that helps inject tax capture funds back into the area, Jordan-Woods said.
Jordan-Woods said it would be positive for the neighborhood, and it is meant to allow local residents to take advantage of some of the same benefits that have more often been offered to rich developers. She said she isn’t against the developers getting the benefits, but said residents should be able to access them as well.
“This is about spreading the wealth around,” she said.
City of Kalamazoo Development Project Coordinator Paul Thuringer said the projects in the document represent a “wish list” for development within the district. The proposal is a tool in the toolbox to help revitalize the Northside, he said.
The proposal shows $900,000 for the development of an African American museum on Ransom Street, with estimated completion by 2026 or sooner.
It describes using $750,000 to establish a boxing and fitness training center.
It includes $3 million proposed to beautify and improve streetscape and lighting along Ransom Street.
Another $3 million would go toward improvements to walkability and accessibility district-wide through the improvement of sidewalks and pedestrian infrastructure.
Those projects and several others are classified as higher priority short-term projects, with a timeline of up to five years. New gateway signage, bike racks, public benches, lighting, green infrastructure, a commercial façade program, improving walkability, adding emergency call boxes, and increasing access to nature are also mentioned in the plan, under the heading of short term projects.
The proposed TIF plan includes four different categories of expenditures. These are projects in the category labeled “design.”
The proposal also includes longer-term projects with a timeline between 11 and 30 years of restoring and/or repaving designated streets throughout the district with historic paving materials such as brick, and building public restrooms.
Thuringer said that the TIF’s approval would not trigger the construction of the listed projects. He said the projects represent things the TIF is intended to fund, though many of the projects are still in progress or still must be planned before they could be built, and in many cases that means partnering with developers and other stakeholders.
The plan states the costs and completion dates are estimates only and are subject to change. “These dates and estimates may vary because of private investment decisions, financing opportunities, market shifts or other factors,” the plan states.
If the TIF and Development Plan are approved, the Northside Cultural Business District Authority will be allowed to capture the increase in property tax levies above and beyond the year in which the authority is established.
However, property owners within the Authority District are not directly impacted by the TIF plan, according to a recommendation on the plan sent to the city commission in March.
Property taxes are paid as usual, the recommendation states. The only difference is that a portion of the revenues raised from any increase in property values is captured and diverted to the authority for economic development purposes, instead of flowing to the other local taxing jurisdictions.
Tax Increment Finance (TIF) districts allow local units of government to capture funds from taxing governmental units including the city.
Generally speaking, Chamberlain said, if home values and property values rise over time, this creates new wealth and equity for the property owners in that area.
The number of vacant lots increased in the neighborhood after the 2008 housing market crash, Jordan-Woods said.
The TIF aims to increase the number of owner-occupied homes, including single family owner-occupied homes, she said. One of the main ways to increase wealth is through home ownership, she said.
Tiny homes, safe haven apartments for young people, and other homes are envisioned within the area, she said. One of the projects is the Tiny Houses of HOPE development, consisting of three tiny homes.
Jordan-Woods sees the TIF helping to encourage different businesses, including ones owned by residents, with examples like gift shops, shoe repair shops, a candle place and other smaller shops, she said.
“At one time the neighborhood was flourishing with all types of businesses,” she said. “You didn’t have to leave the neighborhood to get different things.”
That’s why she is in favor of taking the tax money generated from the additional economic development in the designated area, and forming the plan so they are spent within that area.
The formation of the district would also allow them to seek other grant funding for the area, she said.
If the plan comes to fruition, taxes will be generated on lots that once sat vacant, she said. It would benefit residents and the city, she said. It’s about bringing people together to live and work together, she said.
Jordan-Woods envisions the impact the proposal could have on the community. She and others have worked toward the effort for years, she said.
Development of Northside Cultural Business District Authority and a TIF district are included in the 2018 Northside Neighborhood Plan, as part of a strategy to increase the number of resident-owned businesses, especially those owned by African Americans and low income residents. The plan was created by the Northside Association for Community Development.
In 2018, the city commission established the Northside Cultural Business District Authority and Development Area. In 2019, the city commission appointed members to the Northside Cultural Business District Authority.
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