At the most recent Rochester city council meeting, during an update on the city's Downtown Development Authority (DDA), it was announced that the DDA board was hiring a new marketing coordinator, to take over for Nancy Voges, who is retiring. This new marketing coordinator will likely begin work this summer, and will eventually answer to the Principal Shopping District (PSD) board, which increasingly is handling the city's marketing and events.
Some council members were confused, less about the qualifications of the new hire, but over who the new marketer would answer to and who would be paying for her salary. That is because once upon a time the DDA and PSD held the exact same boundaries, boards and staff, and basically functioned as one. Today, there are clearer lines of demarcation between the two, with separate boards of directors for the most part and clearly defined and distinct responsibilities, although they continue to share staff and office space.
A DDA is funded on property tax captures in a defined area, which can include residential property. DDAs first came about in Michigan under Public Act 197 of 1975, when lawmakers designed them to be catalysts in the development of downtown districts. It provides for a variety of funding options, including a tax increment funding mechanism, which can be used to fund public improvements in a downtown district and the ability to levy a limited millage, special assessment, revenue bonds, or contributions from the local government. DDAs allow a community to finance large improvement projects.
Through Public Act of 1961, a business improvement district (BID) or principal shopping district (PSD) is designed to promote economic development within the business community, and is done through special assessments on businesses to finance activities.
According to Kristi Trevarrow, who is the DDA director and the chairman of the PSD, the DDA and PSD for many years shared the same downtown Rochester boundaries, the same board and staff, "and the DDA did everything." About five years ago, she said, the boundaries were changed a little bit, when a few outlying businesses requested to opt out of the PSD. That activated a provision in the law for the PSD to have its own separate board. While there is a DDA liaison on the the PSD board, and PSD liaison on the DDA board (and a city council liaison on each board), the PSD has its own board of directors, representing business owners, property owners and a resident representative.
The transfer of responsibilities has been occurring, gradually at times, and more actively at other times. This July, the Rochester PSD comes up for renewal with the city council. Based on current assessments from property owners, which may or may not be passed on to leaseholders, the PSD's current budget (part of a three-year budget), is $222,868, and according to Nik Banda, director of economic and community development for Rochester, is likely to stay constant and be approved for another three-year cycle. Trevarrow said that by this July, the transition of responsibilities between the two entities will be more complete.
"The DDA is transitioning to all bricks and mortar business development, and we're having the PSD take over all of the promotional, marketing work and events," she said, for Fire & Ice, Big Bright Light Show, Farmer's Market, Holiday Expo, Festival of Lights, Kris Kringle Market, and other events, while she continues as director. "Put them all together and you have a strong downtown management organization."
That also means that while the DDA is in the process of hiring the new marketing coordinator, that person will actually be part of the PSD's budget, which should alleviate concerns of some city council members, who were worried about the DDA needing more funding for that position.
Defining the lines of authority and responsibilities between the DDA and PSD, while confusing to those looking in, is actually progressing. There may still be some stumbles, and uncertainty as the soup is being made, but the end result is destined to be just right. And within the financial parameters of this fiscally responsible community.