Weed, Projects, and Greed

Spectator

By Stephen Tuttle | March 11, 2023

A scant four and half years after Michigan voters approved the sale of recreational marijuana to adults, Traverse City is finally about to approve those businesses.

The law, passed in 2018, allowed communities to opt out, as many did, or opt in as many more did. Traverse City chose a different strategy: studying and studying and forming a committee and debating and studying some more, neither in nor out, just lingering in some kind of recreational marijuana purgatory. It cost the city and the county significant tax income.

The state recently distributed checks of nearly $52,000 to the city/town/village and their county for every weed establishment in their jurisdiction. Kalkaska received some money, as did Northport and others, but not the City of Traverse City, which left hundreds of thousands of dollars on the table while dawdling.

The decision made by the city to finally allow recreational marijuana businesses could have just as easily been made years ago. One does wonder how many liquor licenses the city routinely issued during that same four years plus.

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There is something that begins to feel seriously amiss about the downtown Traverse City development model that seems both unsustainable and unfair to much of the rest of the city. In the rush to feed the obsession with both downtown housing and density, we’ve created a development paradigm almost totally dependent on taxpayer subsidies with the notion of creating even more.

There’s the payment in lieu of taxes (PILOT) program that allows a developer to pay a flat rate tax that is usually a small percentage of what actual property taxes would be, sometimes as small as 10 percent. Then there’s brownfield money that’s used for all manner of environmental clean-up on property to be developed and for which nearly all of downtown Traverse City qualifies because there is coal dust from the old power plant and other pollutants from the days the city had a more industrial downtown.

Now the city is also considering creating neighborhood enterprise zones (NEZ) that could provide even more tax breaks.

The result of all this is a handful of developers reap the subsidy rewards while creating housing for a small portion of our population. Nobody else gets much benefit, and the city loses tons of tax revenue. It’s hard to blame the developers, who would be foolish to ignore the availability of the tax breaks being offered. The real question is whether the city is being foolish making the offers.

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The Downtown Development Authority (DDA) now has two proposed projects that together will approach $100 million. The third parking deck we’ve known about for a long time, and depending on which set of numbers are being used, it will cost as much as $30 million when completed. Add to that the just-proposed plans to dramatically redo the lower Boardman River area for a whopping $63.5 million.

The need for another parking deck when one of the existing decks is seriously underutilized is up for debate. But the lower Boardman with its alley and the backs of businesses and its concrete wall is an eyesore in desperate need of beautification.

Even assuming finishing the two projects will take multiple years, that is a huge amount of money. By way of an apples to oranges comparison, the annual operating budget of the entire county is less than half what the DDA plans to spend on just those two projects.

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Thanks to reporting by Ted Wendling writing in The BOC Beacon, we know some county commissioners are heavily feeding at the taxpayer money trough. (The BOC Beacon is a newsletter about Grand Traverse Board of Commissioners activities produced by the GT County Democratic Party so it is, by nature, partisan. Bruce Moore, a former commission candidate, obtained the data, subsequently reported by Wendling, through a Freedom of Information request.)

You might recall the county commissioners gave themselves a raise of 73 percent not that long ago and nearly doubled their per diem pay from $35 to $65. Commissioners Brad Jewett, Daryl Nelson, and commission chair Rob Hentschel all claimed five-figure per diem reimbursements over the last several years. That includes payments for activities specifically prohibited in their own rules like meeting with constituents, taking phone calls, or even meeting with each other.

Nelson even suggested he should charge for phone calls because doctors and lawyers do. Except there are some major differences in those professions; lawyers and doctors are not public servants, and they aren’t paid exclusively with taxpayer money.

The per diems should not be handed out every time a commissioner says “hi” to a constituent. Thanks to Mr. Moore and Mr. Wendling for exposing the greedy per diem abuses inflicted on Grand Traverse County taxpayers.