Village council also rejects forming advisory committee

By Jim Newell

Review Editor

A proposal to explore questions about the DDA’s operations, including potentially dissolving the Lake Orion Downtown Development Authority, met with a swift rebuke from government officials, downtown business owners and residents during the village council meeting on Monday.

Village Councilmember Michael Lamb gave a presentation on DDA’s tax capture and asked several questions about the money the DDA is collecting.

One of Lamb’s main areas of questioning was the amount of residential property in the DDA district.

“Why is 50 percent of the DDA downtown district residential properties?” Lamb asked. “Review of the zoning maps and DDA maps of the 24 communities in Oakland County that have DDAs show that they do not include nor capture taxes from residential districts, with the exception of small, isolated areas totaling less than one percent.”

Neither the village council nor the DDA addressed why the DDA continues to capture taxes on residential properties.

The DDA captured $840,123 in the past year, he said.

The DDA was formed in 1985 under Public Act and has been renewed by the village council four times, most recently by council vote in January 2020 to approve the DDA Tax Increment Financing capture for an additional 20 years.

With several business and residential developments like the Ehman Center redevelopment, in the works in the village, Lamb said most of the taxes would be captured by the DDA and would not go into village coffers.

“Who will get the tax revenues on the estimated $41 million on the future residential developments in the village?” Lamb asked. “The answer is the DDA will get a majority of the estimated $526,037.40 in tax revenues from the new developments in the village.”

Lamb said the village council could do nothing, kill all or part of the DDA spending activity, dissolve the DDA or “study these matters more openly and in greater depth.”

Lamb proposed creating a committee of three village council members, three planning commission members and three DDA board members to discuss the issues and propose solutions.

Councilmembers Doug Hobbs and Sarah Luchsinger voted to form the committee. Councilmembers Ken Van Portfliet, Jerry Narsh, Teresa Rutt and Brad Mathisen voted against forming the committee.

In voting against forming the committee, Narsh, Van Portfliet and Rutt said they did not believe it was necessary to form another layer of government. They added that attending each other’s meetings could help with communication issues between the village council and the DDA board.

DDA Board of Directors Chairperson Debbie Burgess and DDA Executive Director Molly LaLone spoke at the meeting to rebut Lamb.

The DDA also sent out an email, entitled “Help save our Downtown: Keep the DDA in Lake Orion”, on Sunday afternoon to all downtown businesses and volunteers, marshaling their supporters to attend the meeting and speak in favor of the DDA.

Burgess, who owns Builder’s Custom Flooring in downtown Lake Orion with her husband, said she wanted “to unite, not ignite the relationship between the village council and the DDA. We’ve worked very hard to have unity in our community. And I am offended by the verbiage that was placed on the agenda, the very first time, about dissolving the DDA.”

Burgess thanked the business owners, patrons and residents for supporting downtown Lake Orion and thanked the council for reestablishing the DDA four times in the last 37 years.

“What you see here is a community of people who are very passionate about where we work, where we live, where we play and where we invest our money. And I believe that the benefit that these tax dollars bring to our community, and the way in which they are being used to create greater economic development will far outweigh any of the verbiage that has previously been used, or the misleading of partial truths of information,” Burgess said.

LaLone gave a presentation refuting Lamb’s, saying the DDA district’s total taxable value had increased 331 percent from 1985-2021.

In I985, the base value of the DDA district was $10.23 million. In 2021, the taxable value of the DDA district was $44.055 million, LaLone said.

LaLone added that if the DDA was dissolved, downtown businesses would be responsible for snow removal, tree lighting, hanging floral baskets, beautification, marketing and promotion, a downtown speaker system and events.

The DDA currently does not have a speaker system and only began paying the village DPW to remove snow from sidewalks this winter, and only if there is more than two inches of snow.

LaLone added that five village restaurants received liquor licenses that would not have been eligible to receive those licenses without a DDA development district. She listed the village’s dream of having a parking deck as one of the future projects, as well as improved lighting, dumpster enclosures, upgrading electrical work in performance areas as upcoming projects.

If the DDA were to be dissolved, the village would still have to pay for police, DPW and snow removal services downtown. However, the village would not capture all of the taxes that the DDA captures, because some revenue would go back to other taxing authorities, such as Oakland County and the Orion Township Fire Millage.

“If it were to be dissolved today, $380,748 would be lost and not in the village anymore,” LaLone said. “Of the amount that would go back to the village, we are already giving back $200,000. So, the net would be $224,913. Losing $400,000 per year in revenue directly to the downtown does not make sense. There’s no reason to take any action on this matter tonight or in the future.”

DDA contract services

Another issue that village Manager Joe Young presented during a special DDA board meeting on March 1, was that the village provides administrative, police and DPW services in the DDA district and that the DDA reimburses $90,000 of the police millage capture, and pays $68,000 for administrative services and $43,200 for DPW services, for a total of $201,200.

The village, however, claims that the actual costs of these services is $321,457: $149,324 for police, $89,074 for DPW and $83,059 for administration, for a difference of $120,257.

Both Young and village council President Ken Van Portfliet said during the March 1 presentation that the village was presenting information to the DDA board members and not asking for more money from the DDA.

“We reimburse the village, or provide for contract services, 23 percent of our revenue, right up there with Rochester, and everybody else (in Oakland County) is significantly less,” LaLone said on Monday during the presentation.