City Council

MANISTEE CITY COUNCIL WORK SESSION AGENDA Tuesday, August 14, 2018 - 7:00 p.m. - Council Chambers, City Hall I. Call to Order. II. Work Session Items. a.) PUBLIC COMMENTS ON WORK SESSION RELATED ITEMS. b.) PRESENTATION OF STRATEGIC PLAN QUARTERLY REPORT – City Manager Thad Taylor. c.) JOINT DISCUSSION WITH THE DOWNTOWN DEVELOPMENT AUTHORITY (DDA) ON A DRAFT TAX INCREMENT FINANCING (TIF) PLAN– City Manager Thad Taylor and DDA Director Tyler Leppanen. d.) OTHER. III. Adjourn. TNT:cl Amended and Restated Development Plan and Tax Increment Financing Plan City of Manistee Manistee County, Michigan Manistee Downtown Development Authority Adopted DATE  City of Manistee Manistee County, Michigan Downtown Development Authority AMENDED and RESTATED DEVELOPMENT PLAN and TAX INCREMENT FINANCING PLAN Adopted XX-XX-XXXX City Council James Smith, Mayor Roger Zielinski, Mayor Pro-Tem James Grabowski Lynda Beaton Chip Coodspeed Erin Pontiac Dale Cooper Thad Taylor, City Manager Edward Bradford, Chief Financial Officer Manistee Downtown Development Authority Rachel Brooks, Chair Barry Lind, Vice-Chair Valerie Bergstrom, Treasurer Tamara Deponio T. Eftaxiadis Shari Wild Karen Goodman Todd Mohr James Smith Tyler Leppanen, Executive Director TABLE OF CONTENTS BACKGROUND AND PURPOSE Purpose of the Tax Increment Financing Authority 1 Creation of the Tax Increment Financing Authority 1 Basis for the Development Plan 1 GENERAL DEVELOPMENT PLAN General Development Plan for the Manistee Downtown Development District 2 DEVELOPMENT PLAN 1. Designation of Boundaries of the Development Plan 2 2A. Location and Extent of Existing Streets and other Facilities 3 2B. Existing Public and Private Land Uses within the Development Area 3 3. Location and Extent of Proposed Public and Private Land Uses 4 4. Legal Description of the Development Area 4 5. Location, Extent, Character and Estimated Cost of Improvements 5 6. Parts of the Development to be Left as Open Space 8 7. Portions of the Development Area to Sell, Donate, Exchange or Lease 8 8. Desired Zoning Changes and Changes in Streets 8 9. Estimate of the Cost of Development, Proposed Method of Financing 8 10. Designation of Person(s) To Benefit from Improvements 8 11. Procedures for Bidding Conveyance of Property 9 12. Estimate Number of Persons Residing in the Development Area 9 13. Plan for Establishing Priority for the Relocation of Persons Displaced 9 14. Provision for the Costs of Relocation 9 15. A Plan for Compliance with Act 227 of PA of 1972 9 TAX INCREMENT FINANCING PLAN 1. Definitions as Used in This Plan 10 2. Purpose of the Tax Increment Financing Plan 11 3. Explanation of the Tax Increment Procedure 12 4. Taxing Jurisdictions Agreements 12 5. Property Valuations and Captured Revenue 12 6. Maximum Indebtedness 15 7. Use of Captured Revenues 16 8. Duration of the Program 16 9. Plan Impact on Local Taxing Jurisdictions 16 10. Release of Captured Revenues 17 11. Assumptions of Tax Increment Financing Plan 17 12. Operating Agreement Between DDA and Local Unit of Government 17 13. Relationship of the TIF Plan with Other Funding Programs 17 14. Relationship to Community Master Plan 18 15. Submission of an Annual Reports to the Governing Body and State Tax Commission 18 MAPS/GRAPHIC 1 Manistee Downtown Development Authority District 2 TABLES 1 Forecast Taxable Valuation Growth Rate 13 2 Anticipated Captured Taxable Valuation 14 3 Anticipated Captured Revenue 15 4 Anticipated Millage to Be Captured 16 EXHIBITS and ADOPTION DOCUMENTATION  Notice of Public Hearing Advertisement  Letters to affected Property Owners regarding the Public Hearing  City Council Public Hearing Meeting Minutes XX-XX-2017  City Council Meeting Minutes Adopting Ordinance Amendment XX-XX-2017  DDA Property Owner Listing BACKGROUND AND PURPOSE Purpose Of The Downtown Development Authority Act Act 197 of Public Acts of 1975 of the State of Michigan as amended, commonly referred to as the Downtown Development Authority Act, was created in part to correct and prevent deterioration of business districts; to promote economic growth and revitalization; to encourage historic preservation; to authorize the acquisition and disposal of interests in real and personal property; to authorize the creation of the authority; to authorize the levy and collection of taxes, the issuance of bonds and the use of tax increment financing in the accomplishment of specific downtown development activities contained in locally-adopted development plans. The Act seeks to attack problems of urban decline, strengthen existing areas and encourage new private developments in the downtown districts of Michigan communities. It seeks to accomplish this goal by providing communities with the necessary legal, monetary and organizational tools to revitalize downtown districts either through public-initiated projects or in concert with privately motivated development projects. The manner in which downtown development authorities chose to make use of these tools does, of course, depends on the problems and opportunities facing each particular downtown district and the development priorities sought by the community in the revitalization of its business area. Creation of the Manistee Downtown Development Authority On April 2, 1985, the City of Manistee adopted an ordinance to add Chapter 282 to its Code of Ordinances, which established the Manistee Downtown Development Authority (“DDA”). A copy of this Ordinance is included under Exhibit 1and can be found on the City’s web site under the “Codified Ordinances” Administrative Section – Downtown Development Authority. The Authority was given all of the powers and duties prescribed for a downtown development authority pursuant to the Act. Basis For The Development Plan and Tax Increment Financing Plan Act 197 of Public Acts of 1975, the Downtown Development Authority Act (“Act 197”), provides the legal mechanism for local officials to address the need for economic development in the central business district. In the City of Manistee, the DDA district incorporates the commercial and residential properties on both side of the Manistee River between the railroad swing bridge just east of US-31 to the Maple Street Drawbridge. Refer to Map 1: Downtown Development Authority District for a more detailed depiction of the properties within the DDA district. The initial Development Plan and Tax Increment Financing Plan was adopted on April 2, 1985 (unnumbered ordinance), and amended on March 30, 1989 (unnumbered ordinance) and September 16, 2008 (Ordinance 08- 07). For purposes of designating a development plan district and for establishing a tax increment financing plan, the Act refers to a "downtown district" as being in a business district that is specifically designated by ordinance of the governing body of the municipality and a "business district" as being an area in the downtown of a municipality zoned and used principally for business. Tax increment financing can be used to provide the necessary funds for project implementation. By definition, a tax increment financing plan seeks to capitalize on and make use of the increased tax base created by economic development within the boundaries of a downtown district. The legal basis of support for the Development and Tax Increment Financing Plan is identified in Act 197 . Since 1985, the Manistee DDA has utilized tax increment financing to implement variety of capital improvement projects within the downtown development district. 1. GENERAL DEVELOPMENT PLAN FOR THE MANISTEE DDA The need for establishing the Manistee Downtown Development Authority District (referred to as "DDA District") is founded on the basis that the future success of Manistee's efforts to revitalize its commercial area will depend, in large measure, on the readiness and ability of its public corporate entity to initiate public improvements that strengthen the commercial area, and to encourage and participate where feasible in the development of new private uses that clearly demonstrate the creation of new jobs, the attraction of new business, and the generation of additional tax revenues. Map 1 shows the geographic limits of the Manistee Downtown Development Authority effective as of April 2, 1985. The development area and tax increment financing plan boundary is equal to the geographic limits of the Downtown Development Authority District Map 1 City of Manistee DOWNTOWN DEVELOPMENT AUTHORITY DISTRICT 2A. Location and Extent of Existing Streets and other Public Facilities within the Development Area; Location, Character and Extent of Existing Public and Private Land Uses. Due to the Manistee River the two primary north-south corridors through the DDA Development Area are US-31 (Cypress Street) and Washington (north of the river) / Maple (south of the river). Both of these streets have drawbridges to allow Great Lakes freighters access to Manistee Lake and Lake Michigan. East – west corridors through the Development Area include River Street (downtown’s main street) and 1st Street due to offsetting streets through the commercial and residential neighborhoods south of the Manistee River. The development area is fully serviced with municipal water, sanitary sewer and storm sewer facilities, as well as electrical and gas services. Existing land uses within the Development Area are comprised of public and private uses. These land uses include retail businesses, offices, parking, churches, and residential properties. Collectively, these land uses create a mixed-use and walkable downtown and business district. 2B. Existing Public and Private Land Uses within the Development Area. Public Land Uses City of Manistee City Hall, Manistee County Library and U.S. Post Office are within the boundaries of the Manistee DDA District. Veterans Park which is along the north bank of the Manistee River between US-31 and Washington Street provides an open pavilion for summer entertainment venues and the Manistee Municipal Marina is located on River Street just west of Oak Street. Lastly, there are number of public parking lots in the DDA Development Area with many located on the south side of the district behind buildings on the south side of River Street. Private Land Uses A. Residential – There are various residential, primarily single family homes, located within the DDA district. B. Commercial - The majority of property within the DDA district and Development Area consists of commercial property. These commercial uses include professional, retail, banking, and service businesses. C. Industrial - There are no current industrial uses within the Downtown Development Authority district or Development Area boundaries, however, there are several sites that may have contained industrial-related businesses at one time and would be considered “brownfields.” Recreational Uses Recreational uses within the development area consist of the Veteran Park located along Memorial Drive on the north side of the Manistee River and Manistee Municipal Marina located on River Street on the south side of the Manistee River. Although not considered a recreational park the Manistee River riverwalk along the south bank of the Manistee River provides pedestrian access to the river, as well as, adjacent businesses. Quasi-Public Uses Quasi-public uses within the DDA District, DDA Development and TIF Plan Boundary include the Council on Aging. Educational Uses There are currently no educational uses in the Development Area. Vacant Land There are several parcels of property that may be classified as vacant or underutilized along Mason Street, and on the block bordered by Fifth Avenue to the South, Third Avenue to the North, Short Street to the West and Washinton to the East, 3. Location and Extent of Proposed Public and Private Land Uses. Proposed public projects include modifications to Veteran’s Park and a future North Riverwalk. Private uses which are dependent on real estate market conditions include redevelopment of the parcels from above. 4. Legal Description of the Development Area The DDA shall exercise its powers and duties within the downtown development district, being specifically described as follows: Filer and Tyson's Addition, Block 7, except Lots 5, 6 and 7. Delo's Filer Subdivision, Block 6. All of Green and Milmoe's Addition. All of George Willard Addition. Holden and Green Addition, Block 1, 2, 3, 6 and 7. Filer and Smith Addition, Block 7 and 8, Lots 3, 4, 5, 6, 7, 8, 9, 12 and 13, except Lots 9, 10, 11 and 12, Block 13. Filer and Smith Addition, Blocks 11, Lots 3, 4, 5, 6, 12, 11, 10 and part of Lot 9. Metes and bounds, part of gov't. Lot 2, Sec. 12. Filer and Smith Addition, Block 6, Lots 1, 2, 3, 4, 5 and 6. M. S. Tyson and Co. New Addition, Lots 1 through 7. Filer and Smith Addition, Block 1. Filer and Smith Addition, Block 14, Lots 5, 6, 11 and 12 and part of Lots 4, 10, 9 and Lot 8. Englemann's Addition, Block 8, Lots 1 and 19. Englemann's Addition, Block 9, except Lots 9 through 14. Englemann's Addition, Blocks 10 and 16. Englemann's Addition, Block 14, Lots 1, 2, 3 and 4. Englemann's Addition, Block 15, Lots 1, 2, 3 and 4. Metes and bounds, Lot 5, Sec. 12. Ramsdell and Benedicts Addition, Block 3, Lots 1, 2, and 3. Ramsdell and Benedicts Addition, Block 5. Filer and Smith Addition, part of Res., Lots 7, 6 and 8. Smith St. to Division St. and River St. to the middle of River. Metes and bounds, Section 12. Metes and bounds, part of gov't. Lot 1, Sec. 11, between Short St. and Washington St. and Fifth Ave. and River St. M. S. Tyson's Addition, Lot 1, Block 3; excepting therefrom Lot 1, Block 14, and Lots 3 and 4, Block 15, Englemann's Addition, to the City. 1 5. The Location, Extent, Character and Estimated Cost of Improvements including Rehabilitation for the Development Area. The section below outlines the project name, description and estimated cost for those projects identified by the DDA Board. Description of Projects and Cost Estimates: Riverwalk The Riverwalk is not currently meeting its capacity to draw visitors to the area. The Riverwalk could be a destination and driving factor for the business district with the scenic walks near the Manistee River leading to Lake Michigan. In order for the Riverwalk to become a destination feature, businesses on the Northside of River St must have a riverside orientation. More activities and business orientation to the river will draw on the natural resources of the area to make Downtown Manistee more desirable. It is assumed that maintenance and repair of the Riverwalk are functions of the City. Description Sources DDA Other/Private A study and conceptual plans for the riverside of businesses $15,000 Façade and Deck grants (Based on $30,000 for each building with River $510,000 $1,530,000 frontage. Connections, lighting and signage to Riverwalk $100,000 Dock creation or repairs $100,000 $300,000 Sub-Total $725,000 $1,830,000 Total $2,555,000 Improve Gateway to Downtown According to MDOT 2015 Annual Average Daily Traffic report, nearly 16,000 people pass through this intersection every day. The image that this intersection portrays greatly affects the impression people have of Manistee. It is vital to the future success of the business district to improve this intersection. Description Sources DDA Other/Private Feasibility Study $25,000 283/285 River St (American Cleaners) $160,000 $2,833,333 21 Cypress (Gas Station) $160,000 $2,833,333 284 River St (House of Flavors) $160,000 $2,833,333 Sub-Total $505,000 $8,500,000 Total $9,005,000 Streetscape The streetscape needs to be improved and enhanced to last an additional 20 years. Improving pedestrian traffic flows, aesthetics, providing 21st century amenities, and managing parking, specifically on River St is important to offering a quality environment for businesses to be successful. Description Sources DDA Other Improve and enhance sidewalks, add bump outs and accentuate crosswalks. Repair deteriorated sidewalks, paint garbage cans, light posts, etc. Conversion of lamp luminaires and ballast from high pressure sodium (HPS) to light emitting diode (LED). Add sound system to downtown Add public wifi to downtown Add trees to the streetscape Provide parking management Total $1,950,000 Continuation of amount allocated for hanging baskets and holiday $800,000(Based decorations on current annual costs with adjustments for inflation) Landscaping and Maintenance $360,000 Flower, Boxes, Snow Removal of sidewalks $440,000 Sub-Total $3,550,000 $0 Total $3,550,000 Other Redevelopment Projects Over the course of this development plan there are a number of large properties that will take significant resources to redevelop. Additionally, the east side of the district contains most of the available parking. By creating parking on Water St on the west end of the district that would effectively address parking concerns and eliminate blight. Description Sources DDA Other North Corridor Village Feasibility Study $15,000 Construction Implementation $70,000 $22,000,000 Westside Parking Lot Acquire and create parking west of Maple $200,000 Street. 400 River St (Former Glik’s) $350,000 $8,000,000 147 Washington (Hotel $85,000 $2,000,000 Northern) 453 River St $65,000 $1,500,000 Sub-Total $785,000 $33,500,000 Total $34,285,000 Programs The façade program enhances the streetscape by incentivizing property owners to invest in their buildings. A future program to incentivize property owners to create and improve residential units in the upper stories of buildings will improve the cash flow in properties and allow the owners to continue maintenance and investment in their properties. Both programs provide a great rate of return on investment into the district. Description Sources DDA Other Façade (Based on $50,000 annual allocation) $1,000,000 $2,000,000 Local Rental Rehab (Based on average cost of $100,000 per unit with DDA $500,000 $5,000,000 contributing 10% and the potential creation of 50 units). Sub-Total $1,500,000 $7,000,000 Total $8,500,000 Administrative and Operational Description Sources DDA Other Staffing $1,600,000 Office $480,000 Marketing & Promotions (The DDA plans to continue the practice of obtaining $150,000 sponsors for events and marketing) Sub-Total $2,230,000 Total $2,230,000 Other Description Sources DDA Other Branding and Market Study $50,000 Improve Farmers Market $200,000 Parking Management $100,000 Sub-Total $350,000 Total $350,000 Note: The scope and cost of the project may vary depending on the final design of each component. Project descriptions reflect the overall scope of the projects envisioned by the Manistee DDA. The DDA recognizes that market forces, private investment, future public-private partnerships, and legislative amendments may result in changes to the final design and cost, consistent with overall concepts embodied in this Development Plan and Tax Increment Financing Plan. 6. Parts of the Development Area to be Left as Open Space and Contemplated Use. In reference to the public improvements outlined, open space within the DDA district and Development Area will be confined to right-of-ways, plazas, and parks within the District. Existing park property in the DDA district and Development Area will remain as open space. 7. Portions of the Development Area which the Authority Desires to Sell, Donate, Exchange, or Lease to or From the Municipality and the Proposed Terms. 8. Desired Zoning Changes and Changes in Streets, Street Levels, Intersections and Utilities. The Development Plan proposes no zoning changes proposed within the Development Area. The current zoning of commercial and office accommodates existing and future land uses in the subject area. 9. An Estimate of the Cost of the Development, Proposed Method of Financing and Ability of the Authority to Arrange the Financing. Financing for the public improvement projects outlined in Section 5 would be provided through funds generated by the Tax Increment Financing Plan induced by annual increases in property valuations within the Development Area. The amount of the funding will be predicated on the stability of the taxable valuation base of the downtown area and the extent of new future redevelopment and rehabilitation projects. Sources of funding may include tax increment revenues on a “pay-as-you-go” basis, the issuance of bonds by the DDA or City and other sources approved by the City in accordance with the Act 197. 10. Designation of Person or Persons, Natural or Corporate, to whom all or a portion of the Development is to be Leased, Sold, or Conveyed in any manner and for whose benefit the Project is being undertaken if that information is available to the Authority. The public improvements undertaken pursuant to this Development Plan will remain in public ownership for the public benefit. 11. The Procedures for Bidding for the Leasing, Purchasing, or Conveying of all or a portion of the Development upon its completion, if there is no expressed or implied Agreement between the Authority and Persons, Natural or Corporate, that all or a portion of the Development will be Leased, Sold, or Conveyed to those Persons. At present there are no agreements for property conveyance between the City of Manistee, Manistee DDA or any person(s), natural or corporation. The Development Plan utilizes a voluntary acquisition strategy to acquire property within the Development Area. Acquisition of such property would be on a negotiated basis between the Downtown Development Authority and the interested party. Any such sale, lease or exchange shall be conducted by the DDA pursuant to requirements specified in Act 197 with the consent of the City Council. If needed, more detailed procedures will be developed prior to the transactions, in accordance with applicable city policy and Michigan state law. 12. Estimates of the Number of Persons residing in the Development Area and the Number of Families and Individuals to be Displaced. Based upon a review of the properties within the DDA district and Development Area in it is estimated that there are more than 100 individuals who reside within the Development Area. The Development Plan does not require the acquisition and clearance of occupied residential property or the displacement of individuals and families within the DDA district and Development Area. 13. A Plan for Establishing Priority for the Relocation of Persons Displaced by the Development in any New Housing in the Development Area. The Development Plan does not require the acquisition and clearance of occupied residential property or the displacement of individuals and families. As a result, a plan for compliance Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 is not addressed. 14. Provision for the Costs of Relocating Persons Displaced by the Development, and Financial Assistance and Reimbursement of Expenses, including Litigation expenses and expenses incident to the Transfer of Title in accordance with the Standards and Provisions of the Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970. The Development Plan does not require the acquisition and clearance of occupied residential property or the displacement of individuals and families. As a result, a plan for compliance Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 is not addressed. 15. A Plan for compliance with Act 227 of the Public Acts of 1972. Act 227 of Public Acts of 1972 is an Act to provide financial assistance; advisory services and reimbursement of certain expenses to persons displaced from real property or deprived of certain rights in real property. This Act requires procedures and policies comparable to the Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970. Because the Development Plan does not require the acquisition of property and displacement of persons a plan for compliance with Act 227 is not addressed. TAX INCREMENT FINANCING PLAN 1. Definitions as Used in This Plan. a. "Captured assessed value" means the amount in any 1 year by which the current assessed value of the project area, including the assessed value of property for which specific local taxes are paid in lieu of property taxes as determined in subdivision (c), exceeds the initial assessed value. The state tax commission shall prescribe the method for calculating captured assessed value. b. "Assessed value" means the assessed value, as equalized, as follows: (i) For valuations made before January 1, 1995, the state equalized valuation as determined under the general property tax act, 1893 PA 206, MCL 211.1 to 211.155. (ii) For valuations made after December 31, 1994, the taxable value as determined under section 27a of the general property tax 15 act, 1893 PA 206, MCL 211.27a. c. "Initial assessed value" means the assessed value, as equalized, of all the taxable property within the boundaries of the development area at the time the ordinance establishing the tax increment financing plan is approved, as shown by the most recent assessment roll of the municipality for which equalization has been completed at the time the resolution is adopted. Property exempt from taxation at the time of the determination of the initial assessed value shall be included as zero. For the purpose of determining initial assessed value, property for which a specific local tax is paid in lieu of a property tax shall not be considered 5 to be property that is exempt from taxation. The initial assessed value of property for which a specific local tax was paid in lieu of a property tax shall be determined as provided in subdivision d. d. "Specific local tax" means a tax levied under 1974 PA 198, MCL 207.551 to 207.572, the commercial redevelopment act, 1978 PA 255, MCL 207.651 to 207.668, the technology park development act, 1984 PA 385, MCL 207.701 To 207.718, Section 5 of the State Essential Services Assessment Act, 2014 PA 92, MCL 14 211.1055, Section 5 Of The Alternative State Essential Services 15 Assessment Act, 2014 PA 93, MCL 211.1075, and 1953 PA 189, MCL 211.181 to 211.182.. The initial assessed value or current assessed value of property subject to a specific local tax shall be the quotient of the specific local tax paid divided by the ad valorem millage rate. However, after 1993, the state tax commission shall prescribe the method for calculating the initial assessed value and current assessed value of property for which a specific local tax was paid in lieu of a property tax. d. "Tax increment revenues" means the amount of ad valorem property taxes and specific local taxes attributable to the application of the levy of all taxing jurisdictions upon the captured assessed value of real and personal property in the development area, subject to the following requirements: (i) Tax increment revenues include ad valorem property taxes and specific local taxes attributable to the application of the levy of all taxing jurisdictions other than the state pursuant to the state education tax act, 1993 PA 331, MCL 211.901 to 211.906, and local or intermediate school districts upon the captured assessed value of real and personal property in the development area for any purpose authorized by this act. (ii) Tax increment revenues include ad valorem property taxes and specific local taxes attributable to the application of the levy of the state pursuant to the state education tax act, 1993 PA 331, MCL 211.901 to 211.906, and local or intermediate school districts upon the captured assessed value of real and personal property in the development area in an amount equal to the amount necessary, without regard to subparagraph (i), to repay eligible advances, eligible obligations, and other protected obligations. (iii) Tax increment revenues do not include any of the following: (A) Ad valorem property taxes attributable either to a portion of the captured assessed value shared with taxing jurisdictions within the jurisdictional area of the authority or to a portion  of value of property that may be excluded from captured assessed value or specific local taxes attributable to such ad valorem property taxes. (B) Ad valorem property taxes excluded by the tax increment financing plan of the authority from the determination of the amount of tax increment revenues to be transmitted to the authority or specific local taxes attributable to such ad valorem property taxes. (C) Ad valorem property taxes exempted from capture under section 3(3) or specific local taxes attributable to such ad valorem property taxes. (D) Ad valorem property taxes levied under 1 or more of the following or specific local taxes attributable to those ad valorem property taxes: ) The zoological authorities act, 2008 PA 49, MCL 123.1161 to 123.1183, and the Art Institute Authorities Act, 2010 PA 296, MCL 123.1201 to 123.1229. (iv) The amount of tax increment revenues authorized to be included under subparagraph (ii) or (v), and required to be transmitted to the authority under section 14(1), from ad valorem property taxes and specific local taxes attributable to the application of the levy of the state education tax act, 1993 PA 331, MCL 211.901 to 211.906, a local school district or an intermediate school district upon the captured assessed value of real and personal property in a development area shall be determined separately for the levy by the state, each school district, and each intermediate school district as the product of sub-subparagraphs (A) and (B): (A) The percentage that the total ad valorem taxes and specific local taxes available for distribution by law to the state, local school district, or intermediate school district, respectively, bears to the aggregate amount of ad valorem millage taxes and specific taxes available for distribution by law to the state, each local school district, and each intermediate school district. (B) The maximum amount of ad valorem property taxes and specific local taxes considered tax increment revenues under subparagraph (ii) or (v). 2. Purpose of the Tax Increment Financing Plan The Manistee Downtown Development District, was created on April 2, 1985, and was established because the downtown area experienced notable property value deterioration. In order to halt property tax value deterioration, increase property tax valuations and facilitate the overall economic growth of its business district, it is deemed to be beneficial and necessary to create and provide for the operation of a downtown development authority in the City under the provisions of Act 197 Public Acts of Michigan, 1975 as amended (the "Act"). On March 30, 1989, March 30, 1989, and September 16, 2008 there were amendments to Downtown Development District as well as the Development Plan and Tax Increment Financing Plan. The Authority has determined that the extension, or amended and restated tax increment financing plan, is necessary for the achievement of the purposes of the Act and it is authorized to prepare and submit said plan to the governing body. The Tax Increment Financing Plan (the "Plan"), set forth herein includes the Development Plan, a detailed explanation of the tax increment procedure, the maximum amount of bonded indebtedness to be incurred, the duration of the program, the impact of tax increment financing on the assessed values of all taxing jurisdictions in which the development area is located and a statement of the portion of the captured assessed value to be used by the Authority. April 2, 1985 March 30, 1989 DDA September 16, 2008 Amended Unnumbered Ordinance DDA Established DDA Development Plan and Tax Unnumbered Increment Plan Approved Ordinance Ordinance 08-07 Month Day, Year DDA Development Plan and Tax Increment Plan Approved Ordinance ##‐## 3. Explanation of the Tax Increment Procedure The theory of tax increment financing holds that investment in necessary capital improvements in a designated area within a municipality will result in greater property tax revenues from that area than would otherwise occur if no special development were undertaken. This section is intended to explain the tax increment procedure. a. In order to provide a Downtown Development Authority with the means of financing development proposals, the Act affords the opportunity to undertake tax increment financing of development programs. These programs must be identified in a tax increment financing plan, which has been approved by the governing body of a municipality. Tax increment financing permits the Authority to capture incremental tax revenues attributable to increases in value of real and personal property located within an approved development area. The increases in property value may be attributable to new construction, rehabilitation, remodeling, alterations, additions or any other factors that cause growth in value. b. At the time the resolution or ordinance establishing a tax increment financing plan is adopted, the sum of the most recently taxable values, as equalized, of those taxable properties located within the development area is established as the "Initial Taxable Value" (the "ITV). Property exempt from taxation at the time of determination of the Initial Taxable value is included as zero. In each subsequent year, the total real and personal property within the district, including abated property on separate rolls, is established as the "Current Taxable value." c. The amount by which the total taxable value exceeds the ITV is the Captured Taxable Value (the "CTV"). During the period in which a tax increment financing plan is in effect, local taxing jurisdictions continue to receive ad valorem taxes based on the ITV. Property taxes paid on a predetermined portion of the CTV in years subsequent to the adoption of tax increment financing plan, however, are payable to an authority for the purposes established in the tax increment financing plan. 4. Taxing Jurisdiction Agreements. Tax increment revenues for the Downtown Development Authority result from the application of the general tax rates of the incorporated municipalities and all other political subdivisions which levy taxes in the development area to the captured assessed value. Since the Plan may provide for the use of all or part of the captured tax increment revenue, the DDA may enter into agreements with any of the taxing units to share a portion of the revenue of the District. Should the Authority find it necessary to use all of the captured revenue, it shall be clearly stated in this plan. The Authority intends to utilize all captured revenue as referenced in Table 3, from the District until the projects addressed in the Development Plan are completed and until any bonded indebtedness is paid. 5. Property Valuations and Captured Revenue. The property valuation on which tax increment revenues will be captured is the difference between the Initial Taxable Valuation and the Current Taxable Valuation. The purpose of this section is to set forth the Initial Taxable Valuation, the projected Captured Taxable Valuation and the anticipated increment revenues to be received by the Authority from the local taxing jurisdictions including the City of Manistee, Manistee County, Manistee County Library, West Shore Community College, and any other authorities or special tax districts that may be eligible to levy property taxes within the boundaries of the Downtown Development Authority, herein collectively referred to as the "Local Taxing Jurisdictions." a. The Initial Taxable Valuation is established based on the 1985 state equalized valuations on real and personal property and on all non-exempt parcels within that portion of the Development Area as of December 31, 1984 finalized in May 1985. The Initial Taxable Valuation of the Authority for the 1985 district is outlined below: Base Taxable Real and Personal Property Valuations City of Manistee 1986 Taxable (12-31-1985) Base State Equalized Valuation Used in Forecast $6,062,379 b. The anticipated Captured Assessed Value is equivalent to the annual total assessed value within the Development Area boundaries less the Initial Assessed Value as described above. The tax increment revenues are then the product of all millages levied by all taxing units in the Development Area on the CAV. The CAV is projected based on a number of factors including historical growth patterns, recent construction trends, economic indicators and the impact of certain development projects anticipated to be undertaken by the Downtown Development Authority. Since the enactment of Proposal A in 1994 the Consumers Price Index (CPI), which is the basis for taxable valuation adjustments, has averaged 2.4%. For projection purposes, the taxable growth is estimated to grow by 0.68% in 2018-19 and then stabilize at fairly low growth increases with flat rate of 1 .00% for years 2019-2040. These rates are less than the average CPI increase of 2.4% since the enactment of Proposal A in 1994. Growth rates do not include taxable valuation resulting from new construction, redevelopment, or the conversion of tax- exempt properties to taxable parcels. In addition, the forecast does not include personal property taxes which may be subject to capture by the DDA but the amount will be dependent on the implementation of the state wide ballot initiative passed in August 2014. Table 1 Forecast Taxable Valuation Growth Rate growth rates Fiscal Year District 2018 - 19 .68% - 2019 - 20 1.00% 2020 - 21 1.00% 2021 - 22 1.00% 2022 - 23 1.00% 2023 - 39 1.00% A more detailed depiction of the Captured Taxable Valuations can be found in Table 2. c. The Authority will receive that portion of the tax levy of all taxing jurisdictions paid each year on the Captured Assessed Value of the eligible property included in the Development Area. The Authority may use the revenues for any legal purpose as is established under the Act including the payment of principal and interest on bonds. Table 2 Anticipated Captured Taxable Valuation Fiscal Year Jan- Tax Roll Initial Adjusted Annual Taxable Captured Dec Date Base Valuation growth growth value 87-88 12/31/1986 $6,062,379 18-19 12/31/2017 $15,669,335.00 0.68% $106,551.48 $8,547,053.00 19-20 12/31/2018 $15,826,028.35 1.00% $156,693.35 $8,632,523.53 20-21 12/31/2019 $15,984,288.63 1.00% $158,260.28 $8,718,848.77 21-22 12/31/2020 $16,144,131.52 1.00% $159,842.89 $8,806,037.25 22-23 12/31/2021 $16,305,572.84 1.00% $161,441.32 $8,894,097.63 23-24 12/31/2022 $16,468,628.56 1.00% $163,055.73 $8,983,038.60 24-25 12/31/2023 $16,633,314.85 1.00% $164,686.29 $9,072,868.99 25-26 12/31/2024 $16,799,648.00 1.00% $166,333.15 $9,163,597.68 26-27 12/31/2025 $16,967,644.48 1.00% $167,996.48 $9,255,233.65 27-28 12/31/2026 $17,137,320.92 1.00% $169,676.44 $9,347,785.99 28-29 12/31/2027 $17,308,694.13 1.00% $171,373.21 $9,441,263.85 29-30 12/31/2028 $17,481,781.07 1.00% $173,086.94 $9,535,676.49 30-31 12/31/2029 $17,656,598.88 1.00% $174,817.81 $9,631,033.25 31-32 12/31/2030 $17,833,164.87 1.00% $176,565.99 $9,727,343.59 32-33 12/31/2031 $18,011,496.52 1.00% $178,331.65 $9,824,617.02 33-34 12/31/2032 $18,191,611.49 1.00% $180,114.97 $9,922,863.19 34-35 12/31/2033 $18,373,527.60 1.00% $181,916.11 $10,022,091.82 35-36 12/31/2034 $18,557,262.88 1.00% $183,735.28 $10,122,312.74 36-37 12/31/2035 $18,742,835.51 1.00% $185,572.63 $10,223,535.87 37-38 12/31/2036 $18,930,263.86 1.00% $187,428.36 $10,325,771.23 38-39 12/31/2037 $19,119,566.50 1.00% $189,302.64 $10,429,028.94 39-40 12/31/2038 $19,310,762.16 1.00% $191,195.66 $10,533,319.23 The Treasurer will collect the general property taxes from property owners in the DDA. After taxes are collected, the Treasurer will deduct that portion of the total tax revenues that is derived from captured assessed value of the DDA and distribute them to the DDA to use for purposes outlined in the development plan. Table 4 outlines the 2018 millage rates for all Local Taxing Jurisdictions in the DDA taken from the Manistee County Millage Report which are then used to create the revenue forecast enumerated in Table 3 below. Table 3 Anticipated Captured Revenue West Shore Fiscal Captured City of Manistee Community Year Valuation Manistee County College Total Jan-Dec 18.9112 8.73 3.0907 30.7319 18-19 $8,547,053.00 $162,853.54 $73,546.76 $26,266.70 $262,667.00 19-20 $8,632,523.53 $164,482.08 $74,282.23 $26,529.37 $265,293.67 20-21 $8,718,848.77 $166,126.90 $75,025.05 $26,794.66 $267,946.61 21-22 $8,806,037.25 $167,788.17 $75,775.30 $27,062.61 $270,626.07 22-23 $8,894,097.63 $169,466.05 $76,533.05 $27,333.23 $273,332.33 23-24 $8,983,038.60 $171,160.71 $77,298.38 $27,606.57 $276,065.66 24-25 $9,072,868.99 $172,872.31 $78,071.37 $27,882.63 $278,826.31 25-26 $9,163,597.68 $174,601.04 $78,852.08 $28,161.46 $281,614.58 26-27 $9,255,233.65 $176,347.05 $79,640.60 $28,443.07 $284,430.72 27-28 $9,347,785.99 $178,110.52 $80,437.01 $28,727.50 $287,275.03 28-29 $9,441,263.85 $179,891.62 $81,241.38 $29,014.78 $290,147.78 29-30 $9,535,676.49 $181,690.54 $82,053.79 $29,304.93 $293,049.26 30-31 $9,631,033.25 $183,507.45 $82,874.33 $29,597.98 $295,979.75 31-32 $9,727,343.59 $185,342.52 $83,703.07 $29,893.95 $298,939.55 32-33 $9,824,617.02 $187,195.94 $84,540.10 $30,192.89 $301,928.94 33-34 $9,922,863.19 $189,067.90 $85,385.51 $30,494.82 $304,948.23 34-35 $10,022,091.82 $190,958.58 $86,239.36 $30,799.77 $307,997.71 35-36 $10,122,312.74 $192,868.17 $87,101.75 $31,107.77 $311,077.69 36-37 $10,223,535.87 $194,796.85 $87,972.77 $31,418.85 $314,188.47 37-38 $10,325,771.23 $196,744.82 $88,852.50 $31,733.04 $317,330.35 38-39 $10,429,028.94 $198,712.27 $89,741.02 $32,050.37 $320,503.66 39-40 $10,533,319.23 $200,699.39 $90,638.43 $32,370.87 $323,708.69 $3,985,284.41 $1,799,805.86 $642,787.81 $6,427,878.07 62% 28% 10% 100% 6. Maximum Indebtedness. It is anticipated that the maximum amount of indebtedness to be incurred, if any, based on 2017 costs will not exceed $4,000,000 for projects identified in the Development Plan. A description of the various projects and the actual amounts expected to be financed are as set forth in Section 5 of the Development Plan. Revenues captured will be used to leverage other funding sources and accomplish projects in the Development Area. 7. Use of Captured Revenues Revenues captured through this Tax Increment Plan will be used to finance those improvements and projects outlined in Table 1 and Table 2 of the Development Plan in accordance with procedures specified in this Plan. Further, captured revenues can be used for the following:  Finance current financial obligations of DDA;  Pay for costs incurred by the City/DDA in implementing both the Development Plan and the Tax Increment Financing Plan;  Funding for DDA administrative staff and associated office expenses;  Marketing, promotions and events costs;  Special purpose grant and loan programs; and  Pay for costs associated with the administration and operation of the Development and Tax Increment Plan and its associated projects and programs. In addition, the Development Plan encourages the use of Tax Increment Financing Plan revenues to support public improvements associated with private redevelopment and new development projects. Table 1 enumerates the forecasted “uses” of the tax increment revenue and the amount available for capital projects. 8. Duration of the Program The Development Plan and Tax Increment Financing Plan shall extend through December 31, 2039, or the completion of the projects described in the Development Plan, whichever is earlier. Table 4 Anticipated Millage to Be Captured Local Unit of Government City of Manistee 18.9112 Operating 17.7612 Refuse 1.1500 Manistee County 8.73 Operating 5.5000 Medical Care Voted 0.5000 911 Voted 1.0000 Dial-A-Ride Voted 0.3300 Council of Aging 0.3000 Conserv District 0.1000 Manistee County Library 1.000 West Shore Community College 3.0907 3.0907 Operating 30.7319 9. Plan Impact on Local Taxing Jurisdictions The Authority recognizes that future development in the City's business district will not be likely in the absence of tax increment financing. The Authority also recognizes that enhancement of the value of nearby property will indirectly benefit all local governmental units included in this plan. It is expected that the effected local taxing jurisdictions will not experience a gain in property tax revenues from the Development Area during the duration of the plan and should realize increased property tax revenues thereafter as a result of activities financed by the plan. Further, tax increment revenues captured from this plan will not be used to offset normal City operations. 10. Release of Captured Revenues When the Development and Financing Plans have been accomplished, the captured revenue is released and the local taxing jurisdictions receive all the taxes levied on it from that point on. 11. Assumptions of Tax Increment Financing Plan. The following assumptions were considered in the formulation of the Tax Increment Financing Plan for the Roscommon Downtown Development Authority: A. Property valuations are based on the following taxable valuation assumptions: growth rates Fiscal Year District 2018 - 19 0.68% 2019 - 20 1.00% 2020 - 21 1.00% 2021 - 22 1.00% 2022 - 23 1.00% 2023 - 40 1.00% B. Costs provided for the various DDA projects and programs enumerated in Section 5 are estimated costs in 2017 dollars. Final costs are determined after final design and the acceptance of bids at the time of construction. The effects of inflation may also have an undetermined amount of influence on these cost figures. 12. Operating Agreement between Downtown Development Authority and Local Unit of Government Regarding Use of Tax Increment Revenues. The Downtown Development Authority will not spend any funds outside of those annually approved through the budget process and shall not commit to any loans, leases, or purchases without sufficient evidence of adequate revenue source to support the proposal. The Manistee Downtown Development Authority has entered into an agreement with the City of Manistee Brownfield Redevelopment Authority to exclude from DDA TIF capture revenues generated by the South Washington Area project.. 13. Relationship of the Tax Increment Financing Plan with Other Funding Programs. As discussed in the Development Plan, the revitalization of the downtown business district will include tax increment financing and other forms of intergovernmental financing such as grants, special assessments, and loans. It is strongly recommended that tax increment financing revenues be used to leverage public funds and private financing in order to implement the planned program. 14. Relationship to Community Master Plan The Development Plan indicates the need to revitalize the business areas of the community, which is an integral component of the community’s redevelopment program and master plan. If it is determined that any portions of the Master Plan conflict with the provisions of the Downtown Development Plan, then the Development Plan shall be adopted as a component of the Master Plan pursuant to Section 39 of Act 33 of 2008; the Michigan Planning Enabling Act. 15. Submission of an Annual Report to Governing Body and State Tax Commission. Annually the Authority shall submit to the City of Manistee and the State Tax Commission a report on the status of the tax increment financing account. The report shall include those items enumerated in Section 15 (3) of Act 197 of 1975 (MCL 125.1665). Further, the report shall be published in a newspaper of general circulation.