Frank, 

Thank you for this edition of the Voice. 

 

I do want to clarify some issues about this tax rebate for Emagine, and about DDAs, because I want the information to be clear. 

 

The Royal Oak DDA acted properly in granting a tax rebate to Emagine.  City Staff did its homework, the Authority considered its options, and they voted in favor of a project that had been approved by our Planning Commission, and our City Commission (CITCOM). 

 

The DDA did not vote to give Emagine DDA money for construction of the project.  This is not a $300,000.00 “gift” to Paul Glantz, Emagine’s owner.   This is a $300,000.00 tax rebate to Emagine, ONLY when they complete their project, and ONLY from the DDA portion of the tax revenue that Emagine will be paying.    Indeed, the money will come from Emagine’s tax payments, and will reimburse Emagine for improvements to the public right of way---streetscape, benches, trash barrel, bike racks, streetlights---that the DDA would have had to have paid for if Emagine did not do the project.  After the $300,000.00 is rebated, DDA then collects its full amount of tax every year, like clockwork, from Emagine.

 

In a nutshell, the extra tax money that the project brings after it is completed goes back to pay for DDA improvements that the project built.  The DDA is not rebating money to pay for theater seats or bowling pins.  This type of financing is commonly used by DDAs.    L.A. Fitness received DDA tax rebates to do their project, and so did Lockhart’s.   

 

Importantly, this proposal was not made in secret hours before the DDA meeting. It was published on their Agenda on March 19^th, for their meeting on March 24^th, five days later.  If some members of  the community didn’t know it was happening, it’s because they weren’t paying attention, not because it was being hidden from the public.

 

Also, it bears mentioning that this type of rebate is EXACTLY what DDAs are charged to do pursuant to state law.  Their job is to facilitate this downtown development.  People that urge the abolition of the DDA don’t realize that tax dollars that the DDA collects from the downtown would NOT go to the General Fund if there was no DDA.  They would go to the County, the Zoo, the Community College, and all other taxing authorities, but not the City.  Without a DDA, downtown property would receive a tax decrease of 2%, which is the EXTRA that downtown building owners pay for having a DDA. 

 

Also, a DDA rebate does not affect City tax revenue from the project.  Nor will it affect the $250,000.00 in building permits that the City has budgeted this year in income from the project.  Unless of course the project doesn’t happen, which in that case the General Fund will be down a quarter million, plus the City’s share of tax revenue from the project.  We can’t afford another $250,000.00+ downturn in our General Fund budget!

 

Finally, I hate to think of the docket congestion at CITCOM once we get into debates over the types of trees to plant, parking structure colors, brick colors, flower types, and all the other lovely downtown issues that this bad legislation will occasion.  Not only are we going to be micromanaging every decision from this Authority, but we are going to be distracted from the real issues---crucial core issues which affect everyone in the City---that only CITCOM can address. 

 

This isn’t about DDA oversight or accountability.  They are responsible volunteers, and CITCOM currently approves their yearly budget.   It’s about CITCOM’s desire to micromanage other Boards, and CITCOM’s desire to balance its budget on the back of earmarked DDA revenue.  It’s a stopgap to avoid dealing with the necessary structural change in our City Hall to balance our expenditures with our income in a time of fiscal crisis.  It's avoiding the hard decisions, the “right sizing” we have to do, and work with our labor to make changes which benefit all of us in Royal Oak.

 

I’d encourage anyone who is interested in this issue to let their opinion be known to the elected officials of CITCOM via the City Website at http://www.ci.royal-oak.mi.us/portal/contact or at Public Comment at the City Commission meeting on Monday, April 19, 2010 at 7:30 p.m. at City Hall, 3^rd Floor.