Residents Ponder Idea of Forming DDA
Cedarville Group Seeks Economic Boost for Downtown Area
By Amy Polk

At least six empty storefronts and "for sale" signs around Cedarville's downtown area create a dismal appearance where there was once a vibrant business district. Forming a downtown development authority (DDA) may be one way to reverse the effects of a struggling economy and the migration of businesses to the M-134 highway corridor, a block away from Cedarville's traditional downtown area.

"A DDA is an economic development tool," said Leslie Sickterman, speaking to a group of residents Monday night, August 6, at Clark Township's first discussion about DDAs. "It is one of the few tools a municipality has to effect change, and to create economic development."

Interested residents joined Clark Township Board of Trustees and Planning Commission to hear more about DDAs, acting on a proposal by a grassroots organization formed to improve Cedarville's downtown.

"Tonight was not to do everything. It was to provide information so we can have a discussion about whether this is something we even want to do," said Rick Shapero, a member of the organization.

The advantage of a DDA is that it can collect a portion of property taxes on properties within the district established by the township. That tax money would provide a revenue stream for improvements within the district, and match money for grants. Grants available to DDAs typically require only a 25% to 50% match from the DDA, said Michelle Walk, Michigan State University Extension director.

A DDA can receive a portion of tax money created from increasing taxable value. If the taxable value of all the properties in a DDA district is $1 million in 2008, and the value increases by $30,000 the following year, the DDA would get $300, Ms Sickterman estimated. Over time, as the taxable value continues to increase, the DDA's revenue would also increase.

New construction, inflation, and property tax uncapping when property is purchased by a new owner are some of the reasons taxes increase every year. ADDAwill not raise taxes, Ms. Sickterman said, only give it the right to collect the taxes created by increasing value. School tax cannot go to a DDA.

Some of the other things a Downtown Development Authority can do include:

• correct and prevent deterioration in business districts

• encourage historic preservation

• authorize the creation and implementation of development plans within a district

• promote economic growth in the district

• raise money for physical improvements

• apply for grants and qualify for more state and federal assistance programs than a municipality without one

• hire a DDA director to write grant applications, promote and market, and plan events

• connect new and relocating businesses with available space

• create business retention plans for existing businesses

• market the area and host promotional events and festivals to attract people to the downtown area

Ms. Sickterman is a planner with the firm Gourdie-Fraser of Traverse City, which is working on updating Clark Township's master plan and zoning ordinances. She has extensive experience with researching and setting up DDAs in other communities, and was hired by Clark Township to provide the community with DDA information. Les Cheneaux Community Foundation paid for the Monday night program as an economic development initiative. Members of the citizens organization originally started to investigate buying the old Bon Air building on Hodeck Street in Cedarville abandoned those plans in favor of considering the possibilities offered by a DDA, said Ken Drenth of Cedarville, one of its members.

Once it became clear that community improvement and economic growth does not hinge on just one building, the committee started looking at a bigger picture. Mr. Drenth said committee members recommended Clark Township consider a DDA after months of considering options and surveying the community about its wishes for the Bon Air building, a privately owned building that has been on the market for more than 10 years after its former ice cream and gift shop closed.

"Through the process, we identified several other vacant storefronts and buildings in need of repair," Mr. Drenth said. "Our recommendation is that rather than just trying to identify one parcel downtown, let's look at the area as a whole and do something that incorporates a number of these properties, and make a plan. We researched several options for what we can do in this community, and it appears a DDA is probably the best option available for us."

He added that committee members asked people if they would be willing to finance the purchase and development of the Bon Air building, but "it was clear that private funding was not going to be available," he said. Many of those surveyed (48%) said they believe the building should remain privately owned, while 36% thought it should be publicly owned, and 10% thought it should be owned by a nonprofit organization.

Having a DDA will make the district eligible for state and federal grants, such as facade improvement for storefronts within the district. Communities with DDAs also can qualify for a program to buy important buildings that are being underused, fix them up, and rent, lease, or sell them.

Regardless of whether Clark Township decides to establish a DDA, Ms. Sickterman recommended the community hammer out a plan for what it wants the business district to look like, and create clear goals. When she polled the audience Monday night about issues and concerns they had about the downtown area, residents listed a need for more parking and boater access to the downtown areas of Cedarville and Hessel, vacant buildings, and wishes to have a downtown where people can walk from business to business. Longtime residents pointed to the character of historic Cedarville, when its post office, grocery store, fuel station, and other anchor businesses were all on Hodeck Street, but the construction of M-134 changed that. Now its grocery and gasoline stations are on the highway, giving people fewer reasons to go downtown. Low water levels and limited boat launching sites were other concerns. The master plan update process will help better define goals for economic improvement, Ms. Sickterman said.

Michigan lawmakers adopted the DDA act in 1975 as a tool to fight deterioration in downtown areas. Michigan now has approximately 300 DDAs, Ms. Sickterman said, even in towns as small as Ontonagon in the west end of the Upper Peninsula. There, the community of 1,800 has built a commercial building that offers "very attractive," low lease rates as incentive to businesses for locating there, she said. The DDA has also funded marina improvements, among other community upgrades, and the village has a Web site listing the community's statistics, resources, and a description of the area's workforce.

"One of the big things we hear about around the state is that there are few communities with marketing plans," she added.

New and relocating businesses often want to know statistics and information about a potential market, she said, and a DDA can be in charge of marketing the area to potential businesses.

"They want to know things like how many homes are in the area? How many workers are there? Who's the competition?" she said.

Many DDAs have Web sites that describe everything a business needs to know about locating in that community, including financial assistance. The Ontonagon Web site links to lending sources, economic development corporations, and real estate companies, for instance.

If Clark Township decides the establish a DDA, the board would create the district, appoint a DDA board, approve a DDA plan, and approve its budget annually. Ms. Sickterman estimated it would take 15 months to establish a DDA in Clark Township, with adoption no earlier than December 2008. Formation of a DDA would be subject to public hearings. Some properties and taxing entities will have a limited time to "opt out" of the district before it is established. DDAs can choose not to collect revenue and serve only as an advisory group. Ms. Sickterman said there are DDAs in Michigan that host bake sales and other fundraising activities to create revenue for landscaping, signage, and other small improvements, rather than collecting tax money.

There can only be one DDA district in Clark Township, but Ms. Sickterman said the district can be drawn to include both villages of Cedarville and Hessel, and the highway corridor between them. This does not mean all the properties in the district are slated for economic development or improvement, Supervisor Linda Hudson said.

"Retaining residential homes, open space, and public land are very important to the character of a downtown district," Mrs. Hudson said.

Ms. Sickterman also sees potential for a DDA to unite many projects happening in Clark Township under one coordinated effort.