The Hillsdale City Council voted 5 – 3 to approve a loan on Monday night that will help the general contractor complete renovations on the Dawn Theater.
The loan will be granted to the Tax Increment Finance Authority and will come from the Hillsdale Board of Public Utilities’ budget.
The purpose of the five-year loan is to alleviate potential problems with receiving grant money from the Michigan Economic Development Corporation and to pay Foulke Construction for completing the project.
TIFA members spoke at the meeting, saying the city would be paid back within the five-year time period and that the loan is only necessary to finance the deal with Foulke Construction.
Councilman Ray Briner agreed that there was little risk with the investment.
“TIFA has the funds to pay for the project with the money that they will receive,” he said. “This is just kind of insurance if they need the money, so there’s no risk involved whatsoever.”
Councilman Bill Zeiser proposed shortening the term to less than five years to get the money paid back quicker.
The council discussed shortening the term but agreed to keep the five-year due date because many of the TIFA board members are business owners who they trust to be financially responsible.
Mayor Adam Stockford addressed the concerns of some citizens and expressed his hesitation with “looking at the government as a banking tool.”
Stockford said he is critical of government agencies but sees benefits to TIFA.
“I haven’t always liked the way the TIFA system has worked, but I’ve come to peace with it,” Stockford said. “I really like that they capture tax revenue that the city wouldn’t normally get to keep.”
Stockford acknowledged that while he isn’t on the board, he appreciates its members’ commitment to improving the city.
“The ball is in our court to use money which is for public utility,” he said. “I’ve been asking for years for the Board of Public Utilities pilot payment to be raised another percent to be used on the roads, and have been told they don’t have the operating money to do that.
But here’s a couple hundred thousand dollars that we have that could go someplace else.”
Stockford said citizens have other needs and it’s hard to justify the Dawn Theater as his top priority.
“It’s really, really difficult for me to talk to residents of this city and tell them that we’re putting money into this project,” he said. “And we’re not putting it in roads or fire trucks.”
After 30 minutes of discussion, the council voted on the five-year loan. Stockford, Zeiser, and councilwoman Cynthia Pratt opposed the funding.