How We Are Funded

The DDA has an Operational Budget and two Tax Increment Financing budgets (TIF 97 Budget and Old Town TIF Budget) to accomplish goals. 

Operational Budget

The Traverse City DDA Operational Budget is funded through a 2 mill levy on property owners within the DDA District. Additional funding comes from intergovernmental contracts, fees, and the Downtown Traverse City Association. The DDA Operational Budget supports administration, office supplies (i.e. computers, phones, email accounts, etc.), related items, community promotional items (i.e. flower baskets), and professional services (i.e. IT services, web services, etc.)

Parking Administrative Fee

The DDA has an intergovernmental agreement with the City of Traverse City to manage Traverse City Parking Services (TCPS) a City enterprise. The administrative fee to manage parking is taken straight from the Parking Fund and covers the cost of administration for the parking department, nearly 20 employees. Therefore, TCPS is self sustaining. No City General Fund dollars are provided to the DDA for staffing of the organization or the parking department. 

TCPS then operates with a separate annual budget that is generated through parking revenues. The City of Traverse City General fund receives 10% of parking revenues. For example, in Fiscal Year 2017-2018, TCPS contributed over $330,000 to the the City General Fund.

Downtown Traverse City Association Fee

The DDA has an agreement to manage the Downtown Traverse City Association (DTCA), a non-profit organization that is responsible for the marketing and promotion of Downtown Traverse City. The DTCA is funded through merchant dues, program revenues, and sponsorships. Special events, the Downtown Gift Certificate Program, and the overall promotion of Downtown is funded by the DTCA budget. The DTCA provides nearly $70,000 annually to the DDA for administration.

Traverse City Arts Commission Fee

As of July 1, 2019, the DDA has an intergovernmental agreement with the City of Traverse City to manage the Traverse City Arts Commission. The fee for services is $15,000. However, the DDA also contributed $15,000 to the Public Art Trust Fund in Fiscal Year 19-20.

Tax Increment Financing

The DDA has two Tax Increment Financing (TIF) plans, TIF 97 and Old Town TIF. Revenues are used to fund public infrastructure improvement in the DDA District.  The two TIFs are charged an administrative fee that serves as revenue for the Operational Budget. Annually, the City of Traverse City receives a percentage TIF revenues from TIF 97 and Old Town TIF. 

What is this TIF that you talk about?

Tax Increment Financing (TIF) is a funding tool for DDA’s to promote economic development by earmarking property tax revenue from increases in assessed values within a designated TIF district. A “plan” is put in place to develop strategies for growth in the local economies. Strategies focus on job creation, increased economic activity, and ultimately a broader economic base that can support needed government services.

How does it work?….in simple terms

TIF is a capture on taxes in the defined district after the base has been set. For example, TIF 97 was set in 1997 and any increase in property values, the tax base increases. The increased taxes are captured by the DDA and utilized for public improvement projects in the defined district. 

Who participates?

Since the DDA captures the increase on taxes, all other jurisdiction’s (i.e. Grand Traverse County, BATA, NMC, etc.) taxes are captured as well. So…think tax revenue sharing. When TIF is used to repair a bridge in Downtown Traverse City, that bridge is used by residents and visitors from all over the region and beyond. TIF is a unique tool that supports such projects.

Large infrastructure projects such as the Hardy and Old Town Parking Garages would not have been possible without TIF as a funding tool.  The City General Fund would not be able to support such projects of this magnitude on its own should TIF not be utilized. 

Traverse City, along with other communities in the state of Michigan such as Ann Arbor and Grand Rapids, has been credited for effectively and responsibly using TIF as an economic development tool with sound financial management that promotes economic growth and contributes toward a vibrant downtown. 

How is TIF Funding Spent?

Major projects include the Hardy and Old Town Parking Garages, Pine Street Pedestrian Bridge, Streetscapes (sidewalks and street trees), bridge replacement/repairs (all bridges in Traverse City are in the DDA District) and Riverwalks. TIF has also funded park improvements at Clinch Park, Jay Smith Walkway, and Lay Park.

What are the benefits?

Investing in the City center and utilizing tools such as TIF increases the tax base. In fact, Downtown TC generates three times more taxes per acre than the rest of the City. A vibrant downtown increases property values not only in the district, but beyond. Ultimately, Downtown TC serves as a revenue generator for the City and the County.

TIF dollars are utilized to leverage other funds. For example, when bridge work takes place, TIF is used as the required match for MDOT and federal funding. 

TIF is also used to increase the tax base, levy funds for environmental clean up, and serve as a catalyst for private investment. The Iron Works property in the Old Town District was one of the first TIF projects. TIF dollars were utilized for public improvements while a private investment was made to redevelop the property. 

Interesting fact!

No City General Fund dollars were used for several DDA projects such as the bond repayment for the Old Town and Hardy Parking Garages, bridge repair, Pine Street Pedestrian Bridge, Park Street reconstruction, Garland Street, etc. 


The DDA provides an Annual Report to review the past year’s accomplishments. Wearing many hats, it is not always easy to communicate what we do, because we are busy doing it! So, do us a big favor, check out our Annual Reports and see what we have been up to for the greater good of Downtown TC! 


2019 DDA Financial Audit

2016 Downtown & Corridor Market Analysis

Farmers Market Vision

2016 Sara Hardy Farmers Market Metrics

University of Michigan Boardman River Plan

Healthy 8th Street

TIF 97 Stormwater Management Plan

AECOM Stormwater Presentation to DDA Board