The Downtown Development Authority was created in December, 1985 by action of the Village Council at the urging of the Downtown Development Committee of the Chelsea Chamber of Commerce. The Public Act of the State of Michigan under which the DDA was created (P.A. 197 of 1975), provided an “additional tool for use by municipal officials and business men of a city, village or township for revitalization and economic development of the downtown district of the community.”
The Articles of Incorporation of the Chelsea DDA stated that it is organized “for the purpose of correcting and preventing deterioration in the downtown business district.” The proposal to establish the DDA was the result of a study by the planning firm of Johnson, Johnson & Roy, Inc. commissioned by the Chamber of Commerce and paid for by local businesses who donated $3,900 in February, 1984.
There are two sources of funds. The first is a levy of up to 2 mils on all the property in the district, which is generally used for operations as allowed under P.A. 197. The second comes from the Tax Increment Financing Authority (TIFA) which allows the DDA to collect a large portion of taxes generated by an increase in State Equalized Valuation from the base year (1987).
For example: Property A was assessed at $100,000 in 1987. Today it is valued at $150,000. DDA collects taxes on the $50,000 increase.
The State of Michigan passed Public Act 197 in 1975 and amended it in 1983 and several times since. Chelsea adopted DDA Ordinance #97 in 1985 and TIFA in 1987, establishing the base year.
DDA Tax Increment Financing and Development Plan - Amended 2017