Local Development Finance Authority (LDFA)

On September 3, 2014, Holland City Council adopted Resolution of Intent R2014.51 to create a Satellite SmartZone Local Development Finance Authority and schedule a public hearing for October 1, 2014, to consider the establishment of the Authority and the designation of the District.

Summary

Discussions and presentations regarding this issue have taken place over the past few weeks and are on an accelerated pace to obtain approvals by October 8, 2014, as state law only allows three additional SmartZone satellites that can capture School Tax and there are four (4) proposed areas currently considered.  Two (2) of those appear to be either finalized or very close which has created the urgency.

The basic concept in the creation of a SmartZone/LDFA is to “capture” the revenues from growth in taxable value over the current year base amount, to be utilized for priorities identified in a plan.  The plan to be developed in the near future will include a strategy to increase technology-related jobs and an environment to attract technology professionals.

It is the intent of the plan to allow for future tax increment financing (TIF) capture in the event a new Brownfield or DDA TIF plan is proposed.  An analysis would be completed to ensure the maximum benefit to the districts.

The Board would consist of twelve (12) members.  Seven (7) would be appointed from the City of Holland and Holland Charter Township, four (4) from the school districts (two from Holland and two from West Ottawa), and one (1) from Ottawa County.

Boundaries continue to be subject of discussion and a final version will be presented to City Council at the meeting.  Holland Township has presented a district that includes about $20 million of Taxable Value.  The City of Holland has presented alternatives that include about $5 million, about $28 million and about $79 million in Taxable Value.  All of the DDA is included in the $79 million alternate. Maps are attached.

Two (2) options for the amount of tax capture have been discussed.  The first would protect certain taxing entities (such as the Library, MAX, DDA, etc).  The second would capture 50% of all entities (excluded voted debt).  This allows for an equal share of impact on the operating budgets of each taxing entity.

In the first scenario where certain entities would be protected, staff has estimated that the LDFA would retain about 33 mills with the City of Holland contributing about 13 mills of that 33.  In the second scenario, the LDFA is expected to retain about 26.8 mills with the City contributing about 6.8.  In either situation, the LDFA would capture about 20 mills coming from sources other than the City of Holland operating budgets.

By including the entire DDA in the LDFA district and having all entities share equally at 50% of the capture, all have a stake in the success/failure of the SmartZone, and a much larger amount of mills could be leveraged from the State (12 mills on $100 million Taxable Value vs. 12 mills on $50 million (or on $25 million).  The LDFA has the ability to contract with the DDA or other entities for services that could allow for replacement of some losses in captured revenues from growth in the tax base.

In addition to incubators, accelerators and other economic development assistance to develop high tech jobs in our region, TIF capture can be used for infrastructure and improvements to the Lake Macatawa waterfront.  With the larger potential tax capture much more could be done much more quickly.

If you have any additional questions, please do not hesitate to contact:

Keith Van Beek, City Manager, at 616.355.1310 or by email at k.vanbeek@cityofholland.com

Tim Vagle, Finance Director, at 616.355.1377 or by email at t.vagle@cityofholland.com

Related Documents

  1. 2021.04.29 LDFA Board Meeting Packet - Virtual Meeting
  2. 2021.02.24 LDFA Strategic Planning Agenda - Virtual Meeting
  3. FY 2020 SmartZone Audit
  4. 2020.12.16 LDFA Board Meeting Packet - Virtual Meeting
  5. 2020.10.07 LDFA Special Agenda Packet - Virtual Meeting.pdf
  6. 2020.09.23 LDFA Meeting Agenda Packet - Virtual Meeting
  7. 2020.06.24 LDFA Meeting Agenda - Virtual Meeting
  8. 2020.06.05 LDFA Information Meeting Agenda - Virtual Meeting.pdf
  9. 2020.03.25 LDFA Meeting Agenda - Cancelled
  10. 2020.03.25 LDFA Meeting Agenda.pdf
  11. 2020 Meeting Schedule.pdf
  12. 2019.12.18 LDFA Meeting Agenda.pdf
  13. FY 2019 SmartZone Audit
  14. 2019.09.25 LDFA Meeting Agenda
  15. 2019.03.27 Meeting Packet
  16. 2019 Meeting Schedule (Approved at their 2018.12.19 Meeting)
  17. 2018.12.19 Meeting Packet
  18. 2018.12.19 Meeting Minutes
  19. 2018.06.27 Meeting Packet
  20. 2017.03.08 Meeting Packet
  21. 2017.01.24 Board Members
  22. 2016.05.18 Meeting Packet
  23. 2016.04.20 Meeting Packet
  24. 2016.01.06 Meeting Packet
  25. 2016.01.06 Meeting Minutes
  26. 2014.11.19 Meeting Packet
  27. 2015 Board Members
  28. 2015 Board Members & Meeting Schedule
  29. 2015.03.18 Meeting Packet
  30. 2015.09.16 Meeting Minutes
  31. 2015.09.16 Meeting Packet
  32. 2015.10.21 Meeting Minutes
  33. 2015.10.21 Meeting Packet
  34. 2015.11.18 Meeting Minutes
  35. 2015.12.16 Meeting Packet
  36. 2017 Meeting Schedule
  37. SmartZone - Holland City (Exuberant Plus) and Holland Charter Township Boundary Map
  38. SmartZone - Holland City Manager Report 2014.09.03
  39. SmartZone - Overview
  40. SmartZone - Resolution of Intent R2014.51
  41. Updated Timeline for Tax Increment Financing (TIF) Approval
  42. Holland Satellite SmartZone Project Application 2019
  43. Smartzone PA57 Annual Report 2020