Lower revenue projections in downtown Kzoo force reorganization

Kalamazoo County

KALAMAZOO, Mich. (WOOD) — Changes are coming to how the city of Kalamazoo and its partners work to redevelop the downtown area.

It applies to the city’s tax increment financing district, also known as the TIF district — an area where companies and businesses are subsidized by refunding or diverting a portion of their taxes to help fund development. Kalamazoo’s was formed in 2018. It includes the Downtown Economic Growth Authority, Downtown Development Authority, the city and Kalamazoo Downtown Partnership.

Since 2018, however, DDA and DEGA Chairman Grant Fletcher says, growth for the TIF district was lower than projected because of revenue shortfalls and mounting debt.

“They were projections like we do with all budgets,” Fletcher said. “We take a guess, hopefully an educated and informed guess. Sometimes we’re right. Sometimes we’re wrong. Any number of forces can impact it.”

According to city leaders, those forces include site demolitions, including that of the Upjohn building; assessment appeals and property exemptions, like for nonprofits taking up space.

City leaders say TIF revenue projections over the course of 30 years appear to be less than $10 million rather than the $70 million originally forecasted.

In turn, Fletcher says a restructuring over who provides resources and services in the TIF district is necessary.

“It’s an opportunity for us to all step back together, reevaluate what our downtown needs to thrive and be successful so that everyone who visits and lives and works in Kalamazoo can enjoy the downtown,” he said, “and move forward with a system and a set of processes and relationships that make the best use of the dollars that we have available.”

The Kalamazoo Downtown Partnership is one of the agencies depending on DDA and DEGA funding. Despite the forthcoming changes, its board chairman Derek Nofz emphasizes that no services, programs or events — including craft beverage week, restaurant week and the chili cookoff — will be canceled because of the reorganization.

“We are still open for business. We are still planning to deliver on all of those events and programming that we ordinarily do,” Nofz said. “We sit down with our partners at the DDA, the DEGA, the city of Kalamazoo and think about the future.”

The city of Kalamazoo will also be more hands-on during the reorganization through its Community Planning and Economic Development Department.

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