NEGAUNEE — The city of Negaunee and Marquette County are partnering to further economic development in that municipality.

The Negaunee City Council held a public hearing before unanimously approved the first reading of an ordinance to expand the Downtown Development Authority’s tax increment financing district on Oct. 10.

The TIF financing mechanism works by freezing the taxable value of a property at what it was when the DDA was formed and the district established, then collecting or “capturing” any property value tax increases beyond that amount each year.

Officials say the city’s initial 42-acre tax increment financing district, which centers on the Negaunee’s traditional downtown would not yield sufficient revenue, which is why increasing the size of the district is necessary.

“The main purpose of the expansion is to include properties that have the most potential for development in the city…” Negaunee City Manager Nate Heffron told the council. “This little district alone is not going to be able to produce funding to do any significant project, as you saw with the downtown plan. It’s a small amount of money. So if any development happens in the (expanded) area a significant amount of money would be able to be redirected to the downtown as well.”

The proposed expansion consists of properties east of Tobin Street extending to the west city limit and includes properties north of the rail line and U.S. 41 adjacent to the Teal Lake Avenue/U.S. 41 intersection and would include some city property, Negaunee High School and what is commonly known as Cambria Location.

County Administrator Scott Erbisch attended last Thursday’s meeting to express support for the district expansion.

He said the Marquette County Board of Commissioners approved a 15-year tax-sharing plan within the expanded TIF district on Oct 1.

“I think its a great project and the board was very complimentary of all the efforts that the city council and the city manager have been doing to try to enhance this economic base here. You’ve done a really wonderful job here with what you are doing and as part of that plan,” Erbisch said.

Under the tax-sharing agreement, which is expected to be presented to the council in written form at a future meeting, the city would take 100% of any additional tax capture for 10 years, in the final 5 years of the agreement the county would take 50% of its share. Beginning in 2035 under the proposed agreement, the county’s tax capture would return to normal, Heffron said.

The council also approved the first reading of an ordinance that would rezone Cambria Location from Residential 1, which limits development to multi-family residential to Business 2 which would open the area up to a variety of development possibilities.

Lisa Bowers can be reached at 906-228-2500, ext. 242.