The Development of Authority, Part One: An Introduction

[XLFD]

(This is the first of a series about the Ludington Downtown Development Authority, a progressive instrument for revitalizing the downtown.  The author admits a libertarian bias, and a low IQ when it comes to justifying a composite entity made out of businesses and government bodies, but struggles to be fair to DDAs, and tries to set up the background for future parts of this series investigating the appearance of corrupt practices in Ludington.)

 

WHAT IS A DDA?

 

Most people either do not know or are vague on this concept.  In 1975, the Michigan Legislature created Act 197, which allows communities to establish a Downtown Development Authority. According to the Act, the purpose of a DDA includes:

 

1) Correcting and preventing deterioration in business districts.
2) Encouraging historic preservation.
3) Authorizing the creation and implementation of development plans in the districts.
4) Promoting the economic growth of the districts.
5) Creating a Downtown Development Authority Board.
6) DDAs may raise revenue for physical improvements through several methods, including: tax increment financing, issuing revenue bonds, tax levy, and grants.

 

A BRIEF HISTORY OF LUDINGTON'S DDA AND ISSUES: 

 

 

 

In Ludington, The Downtown Development Authority was created by Ordinance 794 on November 12, 1984.  It was amended in 1988 to expand; in 1989 it was once again amended and a TIF plan (to be explained in pt. 2)) was introduced.  In 2004,its existence was renewed for 15 more years.  In 2008, a new TIF plan was introduced.  According to the DDA's 2008 TIF Plan the issues downtown Ludington faced was as follows:

 

"Significant growth had taken place outside of the City of Ludington in Mason County since 1970. The increased traffic resulting from greater population, improved roads and a more mobile society had
accelerated the pressure for commercial growth which continued to occur to the east of the city limits-- finding there ample development space locations and receptive local government. ( note 1) The addition of sewer and water to Pere Marquette and Amber Townships had provided significant impetus to commercial expansion outside of the city limits.

 

Ludington's downtown area experienced some investment during this same period. A substantial obstacle to the downtown area's viability was overcome by the establishment of a parking authority in the early 1970's. This authority enabled the city to acquire and develop ample parking to serve the majority of the downtown's existing business locations. (note 2)

 

The last few years have witnessed a growing vacancy rate in the area identified as the Central Business District as the mix of commercial business has continued to decline. The central business district lost several major general line retailers, including Montgomery Ward & Company and JC Penny. While other retailers now occupy such buildings, no major retailer replaced these lost businesses.

 

Many existing businesses moved from Ludington's downtown to the Pere Marquette Township
and Amber Township US 10 corridor to capture the business associated with the higher
volume traffic at that location. Many downtown businesses were unable to compete with
the Big Box store developments in this area.

 

Many replacement businesses in the Central Business District have been
aimed at and have catered to only a seasonal market for tourist and summer residents.
There are presently several vacant business units within the DDA district. "(note 3)

 

NOTES: 

 

1) A 'receptive local government' refers to 2 townships (Amber and PM) whose leaders took a mostly 'hands-off' approach to incoming businesses (neither had or have DDAs and were less regulative than the city).  Perhaps showing that businesses like it that way.

 

2)  This was accomplished before the DDA's creation, as was the investments in the area.  One could say the business owners were making reasonable adjustments that seemed to have stalled during the late 80's, coinciding with the advent of the DDA-- but not necessarily the cause for its continued decline.

 

3)  In relating the recent history of the downtown, nothing is said about the accomplishments of the DDA since 1984, a 24 year period, but then goes on to explain why we need to put more money into it (about $120,000 coming from TIF and 2 mils of property tax this year, growing to nearly $200,000 by 2018).

 

SYNOPSIS:

 

Before the Ludington DDA, merchants and the local Chamber of Commerce made decisions in their interest.  The Freedom Parade followed by the fireworks on July 4th is an excellent example of what they have done since long, long ago to attract people to downtown Ludington using private funds.  Recent attempts over the last 25 years to attract people to the downtown by a governmentally-dictated DDA using up to over $120,000 of the taxpayers money per year have had some limited success, but has ruined the downtown business' competitiveness and their autonomy (When was the last time you seen a Shopper's Guide insert be from a downtown Ludington business?). 

 

Entrepreneurs don't like this either, unless they hold the reins of power.  The 2008 TIF Plan states Ludington's Progressive Government is a distinct advantage Ludington has going for it.  Progressive governments and capitalism, throughout history,are like oil and water, and mixtures of the two wind up diluting the capitalism and fortifying the government at its expense.

 

(NEXT: part 2, Funding and Function)

[Susan Rose]

I don’t know for sure about the expansions. My first reaction was that it seemed very compact. I must admit I am very naive about the structure and allocation of funds. I don’t know to what bylaws or rules they are operating from. This was merely a perception as I explore and expand my understanding of this Authority. It may also be a means of limiting the pool of available recipients able to access the funds. I have trust issues.

From Wikipedia- In government, authority is often used interchangeably with "power". However, their meanings differ: while "power" is defined as "the ability to influence somebody to do something that he/she would not have done", "authority" refers to a claim of legitimacy, the justification and right to exercise that power.

[XLFD]

I was totally oblivious about the DDA concept until the last couple of years myself, and you have a better understanding now, than me back then.  The DDA concept is noble and well-meaning, but so are many other government programs that wind-up aggravating the problems they are supposed to solve.  At the very least, it merits a critical look, especially after 26 years, and I will be posting part 2 after the weekend that looks beyond the what and why of the Ludington DDA.

[Susan Rose]

Looking forward to Part -2!