Jul. 3—TRAVERSE CITY — Efforts to give entrepreneurs a place to hatch new downtown businesses in Traverse City could end soon.
The city Downtown Development Authority finance committee recommended Tuesday that the authority board terminate the retail incubator project, DDA Executive Director Harry Burkholder said. While the authority originally believed a U.S. Department of Agriculture grant would help support the project for a few years, that turned out to not be the case.
On top of that, the DDA is reassessing its priorities in light of the unclear future of TIF 97, a tax increment finance plan that expires in 2027, Burkholder said.
City residents opposed to its renewal petitioned ask voters to approve a city charter amendment that would force a referendum on any TIF plan creation, amendment or extension. They submitted signatures for a second ballot question that would undo any decision to extend TIF 97 unless city voters say so.
"One of the things the DDA is going to have to consider is funding projects with TIF," Burkholder said. "The uncertainty of TIF extension is figuring out what projects we can do within the time that we have left, and if TIF is extended then that opens up other opportunities."
Staffing the retail incubator is another concern, Burkholder said. Previous pop-up events proved the DDA would need to hire a manager for day-to-day operations.
Burkholder praised the various project partners, including landlord Keen Technical Solutions and the retailers who took part in those pop-ups.
"I think this is a worthwhile project to pursue, just not at this time," he said. "So this might be something that the DDA board will come back to if TIF 97 is extended, but at this time that was the recommendation of the finance committee."
So far the DDA hasn't spent any of its $80,000 USDA grant, Burkholder said. The authority is asking whether it can use some of it to reimburse what's been spent so far, and the DDA might have to give back some or all of the money.
Those expenses thus far include $87,000 the DDA paid to Keen Technical Solutions to build out the space, plus $58,500 in total in rent, documents show.
The DDA also paid $10,000 to Commonplace to launch the project and for entrepreneurial training, and spent $5,729.69 for pop-up and consulting expenses, according to past reporting and authority documents.
Burkholder said he has assurances from the USDA that it wouldn't hurt the DDA's chances in applying for future grants.
Authority board Chairman Gabe Schneider said he couldn't comment on the finance committee's recommendations before seeing their report.