For the Future Impact of Downtown Cleveland's Shore to Core TIF, Detroit Offers Some Clues

When Cleveland approved the new Shore-to-Core-to-Shore TIF overlay district, which will capture tax revenue usually bound for other uses and instead funnel it into downtown development, it marked the first time the city used the financial instrument for a broad neighborhood rather than a specific project.

In order to finally develop the lake and riverfront, Mayor Justin Bibb argued, it would take a big bet to get projects moving.

Councilman Kerry McCormack, whose ward includes downtown, saw Shore-to-Core as necessary for City Hall being able to actually fund projects.

“Finally,” he said late last year, before Shore-to-Core was passed by City Council in May, promising . “Our residents will have high quality access to our greatest natural resource—our river and our lake.”

As for Midwestern benchmarks, Cleveland may be a little bit behind. Cincinnati had previously used one. Columbus used it for its luxury Easton neighborhood. Even Independence, Ohio, had its own TIF.

While Shore-to-Core went into action this spring, cities like Detroit have had such economic engines working behind the background of city rebounds and development for years. And almost a half decade, in our Michigan neighbor’s case, as the Downtown Development Authority, which generates the majority of its revenue through TIFs, was created in 1976

With projects like Bedrock’s $2-billion riverfront neighborhood on the Cuyahoga, the North Coast lakefront plans, the Erieview Tower conversion and more, City Hall has gotten into the overlay TIF game, capturing revenues that will go toward public infrastructure and subsidies to private companies.

In Detroit’s case, there’s little debate that it served as a catalyst and driving force behind the rejuvenation of downtown.

Jennifer Kanalos, vice president of the Detroit Economic Growth Corporation, framed the Downtown Development Authority as a kind of safeguard for the 77-acre space that comprises downtown—from the Detroit River to the northern edge of Wayne State University. It helped steer Detroit’s downtown after retail departures four decades ago. It led to development after Detroit’s bankruptcy in 2013.

“Our downtown has changed significantly since then,” Kanalos told Scene in a call.

“We brought the Pistons back downtown,” she added. “We got Comerica Park. Ford Field. We have Campus Martius Park. Little Caesar’s Arena. All four major teams playing within a stone’s throw of each other. We have a great skating rink. A lot more housing. A lot more restaurants.”

“So,” she said, “it’s really, really thriving.”

But one of the lingering questions is whether the overlay TIF in Cleveland will deliver on Bibb’s promise that it will be more than a handout to developers, more than a way to drive growth in the city center.

In Detroit, that hasn’t been the case, despite the success of downtown.

In a recent report commissioned by Detroit’s City Council, The Citizens Research Council of Michigan found the DDA delivered “marginal benefits” to the rest of the city.

“It is clear that investments in the downtown have not lifted the city to share in any levels of prosperity,” the report states. “Hopes that investments in downtown would lead to housing nearby and throughout the city have not been experienced except for anecdotal recent developments.”

Detroiters for Tax Justice, a nonprofit group which has long been an opponent of the DDA, estimated since 2014 it has taken $22 million away from Detroit Public Library and $83 million in funds from the Detroit Public Schools.

“$1 billion for wealthy developers,” a PSA on the website of Detroiters for Tax Justice reads. “$0—nothing paid back to our community.” (DTJ did not respond to a request for comment by Scene.)

Bibb has promised that the Shore-to-Core-to-Shore TIF will deliver funds to neighborhoods, and while Council President Blain Griffin initially proposed half of the TIF funds — estimated to be $3 to $7 billion over the next 40 years — be delivered to areas outside of downtown, neither side has committed to a firm number.

In order to kickstart development, Griffin and council passed the TIF without any specifics, though Bibb and Griffin appeared to reach a compromise that would see “35% of excess funds” dedicated to neighborhoods. But, because of the pressing needs of downtown, “large sums of the funding will not be available until the latter years of the TIF District” to actually do so, and because exact revenue numbers won’t be known for many years, no one knows exactly what “35% of the excess funds” will be.

“The TIF District will only work if we make upfront investments to transform our waterfronts and grow our downtown, which means we need to preserve flexibility to access all funding sources,” Bibb said at the time.

Detroit saw similar promises, though the DDA has no specific obligation to fund neighborhood projects.

But the recent report found that there was little to no trickle-down benefit, and as Detroit’s City Council weighs whether the wind down the DDA, or to redefine it to include other geographic areas, critics reiterate that while that city’s downtown has prospered, other areas continue to see neglect.

The Detroit Citizens Research Council found that Detroit’s TIF collected $65 million last year for downtown investments. And, from 2017 to 2023, 171 development projects were built—from renovating Bedrock’s Book Tower to the Whitney Building—with the help of abating $843 million in property taxation. Detroit’s Riverfront Park got a redo, apartment conversions continue, medians have been improved.

“I mean, [the TIF] really does a whole host of things,” Kanalos said. ‘We do facade improvements. We’ve done business support programs. We do out Downtown Winter Blast during the holidays. You name it.”

But, as Bridge Detroit reported, there remain many opponents who see the endless TIF, with endless development always waiting to be tackled, as public policy worth reconsidering.

“It’s like taking money out of your back pocket and putting it in the front pocket,” Greg LeRoy, director of Good Jobs First, told Bridge. “It’s not benefiting public safety or education in neighborhoods. Disinvesting in public education in the name of economic development is wrong. The best thing a place can do to improve long-term living standards and personal income is to have people become more educated.”

Kanalos said anti-TIF thinking is misguided.

“And so if it weren’t for the DDA TIF plan and the work that the DDA’s partners are doing, there would be no revenue for the library anyway,” she argued.

“It’s like if there was no DDA and downtown was not thriving, the library wouldn’t be receiving those taxes anyway.”