DETROIT (Michigan News Source) – The city of Detroit should reconsider whether it still needs its Downtown Development Authority, but the DDA’s pile of debt will keep it around until at least 2053.
That’s the recommendation of the Citizens Research Council of Michigan, a nonpartisan think tank that was picked by the city to look into the effectiveness of its DDA. City Council President Mary Sheffield requested the evaluation of the DDA’s effectiveness.
The rejuvenation and success of the downtown is proving “only marginal benefits to the city government and little direct benefit to the overlapping jurisdictions,” which include the Detroit Library, Wayne County and the Wayne County Educational Service Agency, the Citizens Research Council’s Feb. 6 report stated.
The DDA had $2.9 million in revenues in 2023. The DDA’s revenue stream includes grants, contracts, interest on loans and increases in property taxes on new developments that are diverted to the DDA.
“The city has multiple reasons to end the Downtown Development Authority and resume distribution of the collected property tax revenue to the taxing jurisdiction,” the report stated. “All of those reasons are negated by the fact that the DDA anticipates needing more than $571 million to finance bonds pledged against tax capture. This suggests that the DDA could not cease operations until at least 2053 at the earliest.”
The DDA’s tax capture is being used to pay off debt, and the city should put a moratorium on issuing and new debt and then focus on paying off the remainder of it, according to the report.
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