What is a Downtown Development Authority and what does it do?

‘…create an environment where businesses, organizations and people can thrive’

By Megan Kelley

Review Writer

With recent conflicts between the village and the township after questions were raised about Lake Orion’s Downtown Development Authority’s (DDA) fire millage capture, some residents have been vocal about their lack of knowledge about the DDA.

A DDA is a type of tax increment finance (TIF) authority. Simply put, this means that a DDA captures a defined portion of the property tax revenues in a designated area, or DDA district.

In Lake Orion, that area spans roughly from Heights Road at the south end of the district, to just south of Eva’s and encompasses the downtown (including some residential) and a portion of houses on Lake Orion.

The DDA “captures” tax growth from businesses and residents in the DDA district, as well as a portion of the millages from entities like Oakland Community College, County Parks, the North Oakland Transportation Authority, the Lake Orion Police millage, the Orion Township fire millage and several more.

The Detroit Zoo, Detroit Institute of Arts and libraries are the only entities with the ability to opt-out of the DDA tax capture.

“The agreement with the village is that for the list of properties that are in the downtown development authority, the growth taxes after the authority is formed, all of the growth income goes to the DDA for the purpose of downtown development,” said Lake Orion’s DDA Executive Director Molly LaLone.

Michigan legislature states that “a municipality can create a DDA by resolution in order ‘to halt property value deterioration and increase property tax valuation where possible in its business district, to halt the causes of that deterioration, and to promote economic growth.’”

In Oakland County alone there are 25 DDA entities including the Lake Orion DDA, which formed in 1982.

“The purpose of the Downtown Development Authority is to create an environment in which business, organizations and people can thrive,” LaLone said. “We operate with the Mainstreet philosophy, it’s kind of a way that we manage our projects in our organization. The Mainstreet philosophy is that grassroots change is going to have the longest long-term effect.”

The notion of “grassroots” in relation to how the DDA operates involves input and help from the community, business owners, property owners, etc.

“We focus on four different aspects of downtown: design, organization, promotion and economic vitality,” said LaLone. “Right now, the priority of the downtown; the downtown development authority board, every year they review the TIF amendment plan that we just updated, they look at the development plan in there and look at our existing projects and kind of decide what our focus is going to be.”

Currently, the DDA’s priorities for 2021 include parking, events (music, winter activities) and pedestrian safety.

“Coming out of the pandemic, it’s been very important that we are strongly supporting our businesses and providing them what they need,” said LaLone.

The idea behind DDA tax captures is that the monies collected would then be reinvested into downtown areas.

“The theory is if you are focusing attention, organization and dollars on downtown development, you will reap better economic development, you will reap higher property values in the surrounding area, there will be benefits that are directly due to that time and attention and dollars that are collected from the authority being used for downtown development,” LaLone said.

“The idea, when it was formed, their theory was if you’re doing a good job, the property values will go up and therefore the DDA budget will increase and when the budget increases that means that you can do more downtown development.”

According to LaLone, a government study done in the 1970s confirmed this theory, finding that downtowns that receive adequate funding are more likely to do well economically and if a downtown is doing well then the community surrounding it will also do well.

“When you have a successful and thriving downtown, statistics show that the surrounding area also is successful and thriving,” said LaLone.

 

One Response to "What is a Downtown Development Authority and what does it do?"

  1. Roy   July 21, 2021 at 10:56 am

    The DDA and the VILLAGE FATHER’S, do VERY little to inprove things in this VILLAGE like H.C. access to parking, shopping, a/i hc parking at the WORST PARKING in the village (located at the end of each block ) FLOATING PATIOS, take up three parking spots and the 15mi time parking, BIG,BIG joke, “NO PARKING LOADING ZONE” used for store owners PVT PARKING SPACE or get a $40 TK, delive made to back door. the only reasons to STOP in the VILLAGE are the STOP LIGHTS at M24/FLINT, FLINT/ BROADWAY, and ATWATER / M24, a FOUR STORY without ENOUGH PARKING for the people that WORK,LIVE,and VISIT this bld to shop. A POUND is a POUND the US AROUND, and you CAN’T put 5 POUNDS of SUGAR in a 1 POUND BAG, try as hard as you might, it just can’t happen.

    Reply

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