Taxes Diverted in Hopes of Greater Economic Development in EL’s Downtown
At Thursday’s in-person meeting of the Downtown Development Authority, economic development emerged as the main topic of discussion.
That discussion on Aug. 26 was driven in part by the DDA’s unanimous decision to allocate $40,000 from its tax-capture revenue to expand the City’s economic development staff. The DDA’s allocation of $40,000 will be added to $103,550 allocated from the City budget and $11,160 from the Downtown Management Board (DMB) for a total of $154,710.
With those funds, the City administration plans to expand the current single “Community Development Analyst” position to two full-time positions, with the titles of “Community and Economic Development Specialist.” Those positions will pay about $46,000 each plus almost $18,000 in benefits for a total cost of about $64,000 per person annually.
Meanwhile, the “Arts Programming Specialist” that had been paid via a one-time $6,000 allocation from the DDA will become a half-time position at a total cost of just under $27,000 per year.
While the DDA was discussing this staffing expansion, DDA member Jeff Smith suggested the Authority should consider hiring someone to be a DDA Director, something DDA Chair Mike Krueger said he thought was worth considering down the line.
Smith clarified that his idea wasn’t an either-or proposition, suggesting that the City and DDA could pursue staff expansion along all these lines.
DDA member and City Manager George Lahanas, while not opposed to the DDA hiring a dedicated staff person, said he thought the collaborative, group approach from having multiple City staff members work with the DDA is most beneficial. Krueger also suggested that this build up of City staff could cut down on overlap between the work being done by the DDA and DMB.
In addition to the DDA and City expanding their economic development work, Smith announced at the end of the meeting that the Michigan State University Foundation (his employer) is hiring a dedicated “placemaking coordinator.” Smith said this person will be expected to help the downtowns of East Lansing as well as Meridian Township and Lansing.
Additionally, Smith and DDA Vice Chair Luke Hackney noted that the Local Development Finance Authority (LDFA) will be hiring a full-time economic development coordinator.
The LDFA is a regional group and draws participation from the City of East Lansing, the City of Lansing, Ingham County, MSU, and the MSU Foundation. It aims to “to foster the creation, attraction and retention of technology-based businesses, jobs and investment within the Lansing region.”
According to Hackney, because the money paid into the LDFA is coming from East Lansing’s tax base, the bulk of the economic development work occurring can be expected to be directed at East Lansing.
The Fiscal Year 2022 Budget for the LDFA, as approved by East Lansing City Council in May, includes $406,000 annually for LDFA activities.
That revenue of over $400,000 per year is coming from a 15-year East Lansing school tax capture under a special Tax Increment Financing (TIF) plan to fund the LDFA. According to City staff, the school district is being reimbursed by State of Michigan taxes for those diverted funds.
City staff told Council in May that, “Due to economic factors, the tax increment revenues created in the LDFA [tax capture] district was insignificant for many years.” But then, “In Fiscal Year 2021, due to growth in downtown East Lansing, revenues from the East Lansing portion of the TIF plan have reached over $400,000” per year. By contrast, “no tax increment revenues have been created by the Lansing portion of the district.”
The sort of economic development work these new hires at the City, MSU Foundation, and LDFA will do hasn’t been perfectly spelled out, but it will likely include a spectrum of initiatives and programs. There will likely be more downtown placemaking, like the recently-ended Albert EL Fresco and the “parklets” popping up east of there on Albert Avenue.
Beyond that, there seems to be a desire from some DDA members to stop treating the various downtowns in the Ingham County region as “islands,” as Mayor Jessy Gregg said at Thursday’s meeting. Gregg is a member of the DDA by virtue of her office.
Dylan Lees for ELi
Mayor Jessy Gregg at her last Council meeting as Mayor Pro Tem on Aug. 10, 2021.Gregg, who is also a downtown business owner in East Lansing, said she hopes this expanded staffing will mean fostering better connections and communication with and within the business community in East Lansing. She also hopes to see encouragement of connections between the various municipalities and that business owners will focus on the bigger picture project of drawing consumers to the area.
“[I have] seen a tendency of businesses down here to have their eyes forward, [a kind of] tunnel vision, to focus on their own things,” Gregg said. She hopes to shift that approach.
Correction, Aug. 30, 11:45 a.m.: We changed the sentence about the MSU Foundation hire to specify that the position will be for a dedicated “placemaking coordinator.”