Parking Rate Hikes Delayed Slightly

Downtown Development Authority Board (Jan. 7, 2009) The Main Street Area Association had hoped for a year-long delay in the parking rate increases that were approved by the DDA board at its Nov. 5 meeting. But after discussing that possibility – and the borrowing of $3.65 million from the TIF fund that the year’s delay would require – the board left their original proposal intact. However, it will not be put before city council for final approval on Jan. 20, as originally planned.

Instead, the rate hike, which is part of the same packet of materials as the Fifth Avenue underground parking garage project, will be placed on the agenda for the second council meeting in February. The board settled on this delay when mayor of the city of Ann Arbor, John Hieftje (who serves on the DDA board in that capacity) announced that the council’s budget and finance committee had indicated a preference to see that packet delayed until February. Hieftje warned that if it were placed on the Jan. 20 agenda, it would simply be postponed by city council.

While the discussion of the parking rate increase and other parking-related matters took the majority of the board’s meeting time, the board dealt with other business as well, including the authorization to purchase recording equipment for broadcast of their meetings. They also heard from the public on the issue of snow removal, and were alerted to a workshop on commuter-related tax benefits to be given by getDowntown on Feb. 3 [confirm date]. This report is organized as follows:

• Parking: resolution to delay a rate increase to 2010 (postponed)
• Parking: resolution to direct proceeds of Fifth & William lot (former YMCA) to the housing fund (tabled)
• Parking: report on parking revenues
• Parking: report on AVI (automatic vehicle identification) card and onstreet pay by space
• Parking: report on status of underground parking garage
• Snow clearing: feedback from the public
• Video of meetings
• Transportation
• Downtown Area Citizens Advisory Council report and the 100 units of affordable housing

Parking: Resolution to Delay Rate Increase

At its November meeting, the DDA board had approved a parking rate increase with the expectation that it would go into effect on Feb. 1, 2009. For hourly parking in structures, the rate was planned to rise from its current 80 cents an hour to $1 this year, then to $1.10 in 2010 and $1.20 in 2011. The yearly progression of increases for standard monthly parking permits would be in $5 increments: from a current $125 to $130 in 2009, $135 in 2010, and $140 in 2011. Hourly parking rates in lots would rise from their current level of $1 to $1.10 in 2009, $1.30 in 2010, and $1.40 in 2011. Finally, on- and off-street parking meter rates would be raised from their current price of $1 to $1.20 in 2009, $1.40 in 2010 and 2011.

DDA board chair Jennifer Hall framed the issue by placing the parking rate increases in the context of the financing plan for the Fifth Avenue underground parking garage. She reported that the Main Street Area Association had made an impassioned plea to the DDA, in light of the overall economy, for a delay in implementation of the schedule of increases until 2010. The operations committee had looked at the possibility of delay, she said, and the committee thought that they could make the delay work. However, they would need to revise the financing plan for the Fifth Avenue parking garage. This revision would entail short-term borrowing of $3.65 million from the TIF (tax increment financing) fund, starting in 2012 and ending in 2014.

Hall said that although she sympathized with the MSAA, she couldn’t support a change in financing. One reason she was not in favor of delaying the rate change was that borrowing from the TIF fund amounts to a subsidy. If they were delaying the Fifth Avenue underground parking garage project, she said, a delay would make sense. But as that project moves forward, it would be financially imprudent to delay the rate hike, she said, adding, “It ties our hands.”

Elaborating on how the board’s hands would be tied, Hall said that the lack of fund balance in the TIF fund would have a negative impact on other kinds of projects that could otherwise be funded with the TIF fund. She then ticked off examples of TIF fund expenditures in the last year: rehab of Sculpture Plaza, alley improvements, fixing curb cuts for ADA compliance, tree installations, bike hoop installation, a grant to Think Local First, the wayfinding project, energy grants, sidewalk containers, demolition of the old YMCA building, grant for the police-courts construction. Hall said that she felt if the board adequately explained the possibility of reduced benefits in other areas, downtown merchants might not want the board to delay the rate increase.

Hall reported that she’d talked to 16 friends and neighbors – acknowledging that it was anecdotal information, not scientific. She said she hadn’t asked specifically about whether parking rates should be increased, but that no one had identified prevailing parking prices as an issue. Instead, they had come up with 30 different ideas about downtown issues unrelated to parking prices. She did acknowledge that two people suggested free parking on Saturday. Hall said that she did not feel that parking prices were a barrier to people visiting downtown, and concluded that she couldn’t support the delay

Board member Gary Boren said he probably couldn’t support the delay, either. He asked if there was information available on business revenue versus parking rates. Susan Pollay, the DDA’s executive director, said that based on sidewalk interviews the conclusion was that price sensitivity is not as important a factor as availability. Boren said that TIF fund expenditures go into efforts that makes downtown a draw. So even if raising rates had a negative impact on visitors, there are intangibles that go the other way, he said.

Ann Arbor mayor John Hieftje talked about perceived lack of parking from merchants: “We hear this over and over again.” He said that he did not think people make a decision to not come downtown based on parking rates. Hieftje asked how Ann Arbor’s rates compared to other communities. Pollay answered by characterizing Ann Arbor’s rates as higher in monthly permit costs, but that the city is well within the market range for hourly rates.

Board member Keith Orr said he didn’t feel a dime was going to be an issue. But it’s an emotional topic, he said, one that he could relate to as a downtown business owner. Board member Rene Greff asked for a clearer understanding of the financial difference between implementing the rate increase now versus later. She expressed skepticism that nine months at 10 cents less than planned would result in a shortfall of $3.65 million. The explanation was rooted in the fact that the shortfall accumulated over the entire period of scheduled increase, not just the initial year. This led Boren is briefly speculate on the possibility of delaying now but accelerating the increase when it’s implemented so that, in fact, it would be just one year’s impact.

January is a horrible time for retailers, Greff said, and if the rate increase happened in September, nobody would think twice. Pollay stressed that the projections were a best-guess scenario and emphasized that even though the TIF fund balance would be diminished, there would still be cash flow.

Board member Russ Collins asked if the board needed to act on the issue that day. Board member Roger Hewitt indicated that it would be going to city council for approval on Jan. 20. Hieftje then announced that the council’s budget committeee had indicated it would like another month before it comes to council. Board member John Mouat talked about the the psychological aspect of the issue that Greff had alluded to, and related the general mood of “holding tight” for a while to the overall economic climate and the fact that a new administration (Obama’s) would be taking over. The idea of announcing a rate increase, said Mouat, is maybe not what people need: it’s a matter of timing.

Collins’ take on the issue and the discussion to that point was that these are not rational decisions, they’re emotional ones. He said that merchant associations are emotional, but that Hall’s contention that everything else funded by TIF disappears if $3.65 million is borrowed from the fund was also emotional. Board member Joan Lowenstein warned that she did not want the board to adopt a Scarlett O’Hara frame of mind: I’ll think about that tomorrow. So she was interested to find out when “tomorrow” would come for this issue. Hieftje indicated it would be postponed until the second meeting in February if it’s on the agenda for Jan. 20. Lowenstein said that seeing it delayed for a month was a better alternative than some indefinite timeframe.

Hall said that the board could take the resolution (to delay the rate increase) off the table today and the board still had a packet ready to go to council for February – they didn’t need to pass some other resolution. The second issue, she said, is how they respond to MSAA, because the association had in effect said to the DDA, “We’re hurting. What can you do to help us?”

Responding to Hall, Collins said, “I must say that I think what you said about the downtown businesses is not true. They asked us to delay the rate increases. Don’t put meaning into something that they didn’t say with their rate request.” Hewitt expressed agreement with Joan, that a one-month delay is not a problem. He pointed out that the increase would go into effect 60 days after city council approved it, which would mean May 1, 2009 if it’s delayed until their second February meeting. Orr said that if rates were increase mid-summer after art fair time, without delays after that, they would be talking about much less than a $3.6 million shortfall. That would satisfy the financial aspects of the issue, and well as the emotional, which are, he said, real, too. For her part, Hall, was content that if the delay in the rate increase was lock-step with a delay in the underground parking garage project, then she didn’t see a problem. The problem, she said, would have arisen if the parking garage project is out ahead of the increase.

The board voted unanimously to postpone voting on the resolution.

Parking: Resolution to Direct Parking Proceeds to Housing

This resolution considered by the board called for allocating revenues generated from the Fifth & William surface parking lot (location of the old YMCA, which previously housed 100 single-resident-occupant rooms) to the DDA housing fund. Hewitt said he thought that it was a laudable idea, but that the board had just had a lengthy debate about keeping funds separate. Parking rates for the system are designed so that it supports itself, said Hewitt. He noted that $250,000 a year from TIF already goes to the housing fund. Moving funds around to make symbolic statements, he said, is not good practice.

Mouat agreed that keeping it “clean and neat” with respect to separation of funds is a good thing. But he noted that the lot in question is temporary, and wondered if it should really be considered a part of the “system.” He felt there was a reasonable justification for treating it separately.

Greff, responding to Mouat, said the lot really is a part of the system: there was equipment [payment kiosk, gates] that was necessary to convert the space to a parking lot and that it wasn’t free. She didn’t like the idea of “raiding that fund” but entertained the idea of matching with TIF funds the amount of revenue generated from that lot. Hieftje floated the idea of a sign in that parking lot that says proceeds from the lot help the DDA support affordable housing.

Boren characterized the revenue from that lot as “really gravy.” He thought that one way or another, whether they do it with an accounting trick or directly, the message would be: We don’t want to make money off this space, it’s temporary. Collins echoed Greff’s point that the DDA had already incurred costs, and pointed out that there are ongoing operational costs. In that light he wanted to clarify whether the amount to go into the housing fund would be net revenue or gross revenue and how much of the initial capital outlay would go into a calcualtion of net revenue. Pollay said she’d get net versus gross calculations if the board wanted to postpone the matter to the next DDA meeting. A postponement was passed. Only Keith Orr demurred.

Parking: Report on Parking Revenues

Hewitt gave a report on parking revenues for the month of November 2008. There were slight decreases in the numbers of hourly patrons compared to November 2007. Hewitt attributed this slight drop to the fact that there was one fewer business day in November 2008.

[Editor's note: In light of the discussion of possibly diverting parking revenues from the Fifth & William lot to the housing fund, it's worth noting that in November 2008 that lot took in $5,215 from 2,177 patrons.]

Parking: Report on AVI Card, Other Programs

Hewitt reported that there are now 10 AVI (automatic vehicle identification) cards in circulation as a part of a pilot program. He sketched out how the system works: a card on the windshield is scanned as it enters and exits a parking structure or lot. The user’s credit card is then billed monthly for actual parking usage. Boad member John Splitt is one of the pilot program participants, but reported that no charges have shown up on his credit card, yet. Hewitt noted that gates to parking facilities must be down all the time in order to scan in and out for AVI cards. This will have an impact on churches, whose congregations use the free parking in structures and lots on Sundays. He noted that they had no intention of instituting Sunday charges, but need the gates down to keep track. Communication with those churches about how they would be able to continue to use the free parking would be important, said Hewitt.

Hewitt also reported that parking validation stamps will be replaced with parking cards like those currently dispensed at parking facility gates. They will be set up with free time or reduced charge.

Hewitt reported on the valet service pilot program in place at the Maynard Street structure. The advantage is that you can put more cars in the same space compared with self-parking – 30-40% more, if everything was valet-parked. He promised monthly reporting on how it’s doing.

Forty locations for pay-by-space kiosks have been identified, said Hewitt, and staff have been directed to use their best judgment to get from 40 down to 25 for installation of units starting in March. Hewitt said that no rate changes were planned initially. After expansion, Hewitt said, demand-management features would be rolled out, which would adjust rates based on geography, time of day, and day of week.

Report on Fifth Avenue Underground Parking Garage

John Splitt gave an update on the project based on a meeting with the design team, which had provided images of the above-ground part, including Library Lane. Splitt said he thought it was very attractive. Issues discussed included environmental concerns (where does the dirt from the hole go?). The project was originally scheduled to go before council on Jan. 20, but now it will be the second meeting in February. Conversations continue with Tom Crawford, chief financial officer of the city of Ann Arbor. A fire hydrant placement problem has been solved, and discussions with DTE and AT&T will begin, because they can take a long time.

Some of the discussion on the design focused on the geothermal potential. A geothermal system might be used to ice-proof Library Lane, which is planned as a private street at this point.

[Editor's note: Ann Arbor does not currently have heated streets or sidewalks; snow and ice are cleared mechanically. Cf. next section.]

Public Comment: Snow Clearing

Ed Vielmetti: During the time afforded citizens to address the DDA board, Ed Vielmetti spoke, referencing last month’s meeting when he’d appeared to complain about bus schedules, and understood the board’s advice that his complaints should be directed to the Ann Arbor Transportation Authority (AATA). He’d made his own schedule, he said. He’d thought about talking about parking, having read Rob Goodspeed’s recent treatment of parking usage in downtown Ann Arbor, which indicated that the structures are “half-empty all the time.” Before Vielmetti could segue to his chosen topic, board member Rene Greff interjected, “They’re not half emply all the time!” Vielmetti clarified that there are about 15 minutes when the busiest structures are full, but other than that there’s a lot of empty spaces. Greff and Vielmetti agreed they might talk about it after the meeting.

What Vielmetti was there to talk about was sidewalks, reasoning that the DDA had some actual responsibility for them. His observation that it sometimes snows in Ann Arbor earned a few chuckles from the board. When it snows, or we have an ice storm, Vielmetti said, the sidewalks get slippery and sometimes people can fall. And when they fall, he continued, they sometimes break the third metatarsal in their foot [an allusion to his own experience]. Vielmetti said that he thought the DDA could do a better job addressing downtown transportation options for pedestrians when it snows.

Vielmetti noted that it’s a complex issue because of the jurisdictional division: roads are the responsibility of one organization [the city], while the sidewalks are the responsibility of another organization [businesses or residents]. The big slush puddle that accumulates at the interface between the road and the sidewalk appears to be nobody’s responsibility, he said. It means that pedestrians – however they get downtown (by driving or riding the bus) – have to navigate through big slush puddles. Vielmetti said he didn’t have a specific suggestion, noting that he was not in the snow-clearing business. “But,” he said, “you guys are!” He showed the board his Christmas present from this year, YakTrax, which are rubber shoe pull-overs, with metal coils for traction.

Steve Bean: Bean said he was there to speak to the same topic as Vielmetti. We have a snow problem downtown, he declared, and referenced a comment thread on The Ann Arbor Chronicle. He sressed the importance of making the experience of being downtown as positive as possible for employees, residents and visitors. Bean said he notices the problem with snow removal walking around downtown, which he does almost daily. As his wife owns a business on Main Street, he said, he’s aware of the impact on retail. It’s a negative impact, Bean said, when parking spaces are unavailable because of snow extending into the street two weeks after the initial snow and there are puddles at intersections.

We have an opportunity to look at this and try to find a solution, he said, and he felt it was doable. He urged that it be thought of in terms of a strategy to get people to stay after graduating from the university. If they don’t have a good experience downtown in the winter, that could be the last straw against a decision to stay. Bean also pointed out that clear sidewalks were of particular importance to seniors and empty nesters, groups that had been identified as groups the downtown hoped to attract as residents.

Purchase of Video Equipment

The main highlight from the partnerships committee was a resolution to approve $43,800 to purchase and install cameras for broadcast of board meetings from the room where meetings are currently held. The resolution passed unanimously. Collins, who co-chairs the partnership committee, credited board chair Jennifer Hall with providing the impetus over the last six months to get to this point. Hieftje also expressed his appreciation, saying it’s overdue, and that he was impressed that the cost was not higher.

Hall thanked Collins for shepherding the issue even during meetings she had not been able to attend. One of the benefits to broadcasting from the existing space is that it’s configured so that the board and the audience are physically at the same level [as contrasted with city council chambers]. Collins indulged in one of the few remaining opportunities to kid around off camera by directing towards Hieftje a paraphrase of a line made famous by Bill Murray Dan Aykroyd on Saturday Night Live.

What they will buy: 4 cameras, 4 wall mount kits, 4 microphones, audio mixer, tricaster video system, toggle controller, cables, web archive interface, installation and labor.

Transportation

John Mouat, chair of the transportation committee, summarized the last meeting. The next guest to present to the transportation committee will be Sue Gott, a planner with the University of Michigan.

On the topic of the north-south connector, Hieftje confirmed sentiments that had been expressed at the committee meeting. He said that he’d met with Jim Kosteva (UM community relations director), Roger Fraser (city of Ann Arbor administrator), and Eli Cooper (transportation program manager with the city of Ann Arbor) and expressed to UM that they should not be considering the city and the DDA as separate entities.

The university, said Hieftje, will have to carry the freight if the project gets built, because most of the benefit accrue to UM. If they are unwilling to step up at this point, he wondered, then what will they do when it comes time to construct it? They will need to step up to the plate, he said: UM resources are much deeper.

Hieftje stressed, howver, that the city’s overall condition is strong: they had just received word that the city’s bond rating has been upgraded. But in the current economic climate, throwing $160,000 at a study could affect the ability to fund a police officer or two.

Downtown Area Citizens Advisory Council: Report on Meeting and the 100 Units of Affordable Housing

Ray Detter: Detter reported on the previous evening’s Downtown Area Citizens Advisory Council meeting. He said that the meetings were open to anyone who lived downtown and that this was really the only criterion. But, he said, two guys showed up who didn’t live downtown – they lived just outside the downtown. And it reminded him of an issue that has come up again and again recently in the context of planning documents that distinguish between the downtown defined by the DDA area, and the areas surrounding downtown. So the guys who showed up to the meeting were disappointed about not being able to be members, but Detter said they were invited to attend again and to participate as well, even though they wouldn’t be members.

Detter ticked through the substantive matters discussed by the advisory council, including the 415 W. Washington redevelopment process. That project has been returned to council for a revision of the RFP (request for proposal), in the hope that all proposers will consult and come up with a proposal that includes some housing. Detter said that the advisory council was committed to the Art Center’s proposal to turn the area in part into a cultural center. In a different part of the meeting (in his report from his participation on the 415 W. Washington review committee), John Mouat related that he’d begun to hear discussion of a performing arts component [cf. this caucus report]. Mouat also speculated that another possibility is the nearby YMCA on West Washington, which needs office space, and wondered if the YMCA could be the party who does the matchmaking.

Detter said that the advisory council had conveyed a list of their positions on the A2D2 rezoning initiative to the planning commission, which is reconsidering the matter, before it is eventually put before city council.

With respect to the recently introduced three possible sites to locate 100 units of supportive housing, Detter
said that the advisory council was still committed to a different site – namely, the first choice of the Housing and Human Services Advisory Board resolution. That resolution was to locate the housing on the old YMCA site, unless it was really clear that one of the other sites might be better. He said he felt that attention had turned away from that former YMCA lot as a possible site for location of the housing due to pressure from the Main Street Area Association and the Ann Arbor District Library.

He summarized the advisory council’s position on the siting of supportive housing by saying they’d support the proposal that had the best promise of working.

Mayor John Hieftje used time in the meeting alotted at the end to address the issue of where to site the housing that the YMCA previously offered. He stressed that what’s being proposed is much different from what existed at the YMCA, which was not a “front desk” model. Hieftje said that funding was in place to be able to do case management. The impact of residents on the surrounding area, Hieftje said, would be invisible. Responding to Detter’s earlier comments, he said that it was not a matter of resistance from Main Street merchants or the library that led the city to consider alternative sites, but rather economics: “It’d be free land.” Hieftje argued that the old YMCA site would throw off more money than the city had paid for it, and the profit could be put into supportive housing.

There is time at the end of the meeting to afford citizens additional time to participate, which Ray Detter took advantage of to briefly counter the mayor’s remarks. He pointed out that there was never any intention of using the old YMCA lot exclusively for supportive housing [Editor's note: William Street Station, a project that city council pulled the plug on, included market rate housing among other elements.]

Present: Gary Boren, Russ Collins, Rene Greff, Jennifer Hall, Roger Hewitt, John Hieftje, Joan Lowenstein, John Mouat, Keith Orr, John Splitt

Absent: Sandi Smith, Leah Gunn

Next meeting: noon on Wednesday, Feb. 4 at the DDA offices, 150 S. Fifth Ave., Suite 301. [confirm date]