Historic Commission: No Approval for Demolition

By the conclusion of its Thursday evening meeting, Ann Arbor’s historic district commission had denied the application by Morningside LLC  for permission to demolish two houses on the Old West Side.

Morningside wanted the option for demolition of the structures to give them more flexibility in the marketing of a 19,000 square foot greenhouse space adjoining the Liberty Lofts condominium project. The plan was to add additional parking spaces, if a tenant requested them.

The commission took three votes on three different motions related to the application for demolition, but was not able to pass any of them. The votes all split 3-3 among the six commissioners who attended the meeting. Given the failure to pass any of the motions, the body had fully considered the application and thus acted on it without approving it, which meant that the application failed.

What were all those motions about?

Review

Jill Thacher, historic preservation coordinator for the city of Ann Arbor, began the Old Business section of the meeting by reviewing what had happened at the last commission meeting, in February, when consideration of the application by Morningside had begun. Morningside had sought permission to demolish three properties on Second Street: a service station and two adjacent houses. [See previous Chronicle coverage.]

This past Thursday, Thacher ticked quickly through the main points of her staff presentation from the previous meeting – almost all of it was material the commission had seen before. The only exceptions were some new photographs, which Thacher had taken at the request of some commissioners to depict the relationship of the two houses (on the east side of Second Street) to the streetscape shared by the houses on the opposite side of the street.

The commission had determined that the service station was a non-contributing resource in the Old West Side historic district and approved a “certificate of appropriateness” for its demolition. The commission had also found that the two adjacent houses were, in contrast, contributing resources to the district. It could therefore not issue a certificate of appropriateness for their demolition – it’s not an option under historic district regulations.

But permission to demolish the houses could be granted in the form of a “notice to proceed.” Under the commission’s bylaws, however, a “notice to proceed” for demolition of a property cannot be granted at the same commission meeting when that property was found to be a contributing resource. For that reason, the application had been postponed from the February meeting.

At their recent March 12 meeting, the commission found itself focused on the question of the two houses, which it had found to be contributing structures at the previous meeting. There were three motions considered:

1. to deny a certificate of appropriateness for demolition
2. to approve a notice to proceed with demolition
3. to issue a certificate of appropriateness for demolition (not technically possible under historic district regulations)

The possibility of considering not just the first two but also the third one was suggested near the end of the meeting by Kevin McDonald, assistant city attorney, who was at the meeting with his colleague Christopher Frost. They had led the commission in a closed session before the meeting started, presumably to follow up on the legal advice that Thacher said would be requested at the previous month’s meeting about the criteria in the city code for a notice to proceed:

8:416. Notice to proceed.
(1) Work within a historic district shall be permitted through the issuance of a notice to proceed by the commission if any of the following conditions prevail and if the proposed work can be demonstrated by a finding of the commission to be necessary to substantially improve or correct any of the following conditions:
(a) The resource constitutes a hazard to the safety of the public or to the structure’s occupants.
(b) The resource is a deterrent to a major improvement program that will be of substantial benefit to the community and the applicant proposing the work has obtained all necessary planning and zoning approvals, financing, and environmental clearances.
(c) Retaining the resource will cause undue financial hardship to the owner when a governmental action, an act of God, or other events beyond the owner’s control created the hardship, and all feasible alternatives to eliminate the financial hardship, which may include offering the resource for sale at its fair market value or moving the resource to a vacant site within the historic district, have been attempted and exhausted by the owner.
(d) Retaining the resource is not in the interest of the majority of the community.

At February’s meeting, Ron Mucha of Morningside had objected to a comment of Thacher’s in connection with the possibilities that would be available at March’s meeting, when she said that a notice to proceed could only be issued for Morningside’s application under criterion (d). Mucha wanted all options open for consideration. Based on that exchange, Thacher had said clarification would be sought from the city attorney’s office.

Who Was Not There

The 3-3 split on the votes the commission took resulted from the absence of the seventh commissioner, Robert White. At the February meeting, White had joined Diane Giannola in voting against the motion declaring the two houses to be contributing resources to the historic district.

The arithmetic of majorities in votes among odd numbers means that White’s presence would have resulted in passing one of the first two motions that was introduced – on the assumption that White voted with one or the other of the 3-person blocks and not “switched sides.” Otherwise put, had White been present and the application considered by a full board, the application would likely have been explicitly decided (approved or denied) through passing of some specific motion.

Mayor John Hieftje’s remarks made at city council’s Feb. 2 meeting had underscored the importance of having a full board consider the application, and he had thus offered to council the appointment of Patrick McCauley in a one-step (i.e., shortened) process, which council confirmed. As it turned out, a missing member of the commission probably had a material effect at least on the mechanism by which the application was decided – through a kind of “default” as opposed to a specific motion that was passed.

Who Was There

The commissioners who split 3-3 on the application seeking permission to demolish the two houses were Sarah Shotwell, Ellen Ramsburgh, Patrick McCauley, Diane Giannola, Jim Henrichs and Kristina Glusac. In each vote, the votes of Shotwell, Ramsburgh and McCauley reflected a position against granting the application, while the votes of Giannola, Henrichs and Glusac reflected a position in favor of it.

Who Else Was There

Those in the audience who had a public point of view on the application were, like the commissioners, split 3-3. On the developer’s side there were Ron Mucha and David Strosberg of Morningside, and Greg Jones, who’s the architect on the project. From the public were Ray Detter, speaking on behalf of the Downtown Area Citizens Advisory Council, Christine Crockett, who spoke on behalf of the Historic Preservation Alliance as well as the Old Fourth Ward Association, and Lis Knibbe, who represented herself.

From the point of view of the commission’s rules for speaking slots, however, it was not a 3-3 split. In a unanimous vote at the start of the meeting, the commissioners determined to re-open the public hearing to hear additional public comments, which meant that anyone present could address the commission for three minutes. For the developer, one three-minute slot was also allotted, which came before the public hearing.

Shotwell explained to Mucha, Strosberg and Jones that one of them would need to be chosen to speak for three minutes. At this, Mucha said that they’d each prepared to speak for three minutes, and on different specific points. He made a bid for a compromise by suggesting that two of them be allowed to speak for three minutes apiece. Shotwell granted Mucha’s proposal that two of the developer’s team be allowed to speak, but held firm on the three-minute time limit for total speaking time that was allotted to the developer’s team.

Jones and Mucha wound up sharing the single slot. Then came the public hearing during which Detter, Crockett and Knibbe spoke for three minutes apiece. At the conclusion of the public hearing, Shotwell explained to the developer that one of the prior speakers could speak for their unused time from the first turn, plus the member of the team who had not spoken would have the opportunity to rebut commentary from the public. Henrichs moved for a brief recess to sort out who would speak for the developer and for how long. McDonald, from the city attorney’s office, provided counsel to the commissioners and clarification for the developer during the recess.

What the Developer and the Public Had to Say

Greg Jones: Jones emphasized that the possibilities for development on the property was limited, because of its location in the floodway and the floodplain. Some of the historic character of the houses had been compromised, he said. Further, he pointed out that historic district regulations permit modifications to accommodate new uses. He proposed that the character-defining feature of the block is its industrial scale.

Ron Mucha: Mucha stressed that they believed the application for notice to proceed met both criteria (b) and (d) [see above] and that they met both criteria equally. Mucha stressed that the same people who had appeared at the previous meeting in favor of the project would not be appearing to speak, because they had already done so. Further, said Mucha, 80 people had already expressed their support for the project in writing and were on the record with that support. Noting that Detter and Crockett were in the audience, he said that he imagined that they would still be against the project. No one in the actual neighborhood, said Mucha, came out against it.

Christine Crockett: Crockett said that based on her own experience, houses can be restored. She described the Second Street area as the celebration of a working-class neighborhood that was a part of the built fabric of the community. She pointed out to the commissioners that they did not have a site plan before them, and therefore did not have anything concrete that they could consider as a “public good” in the context of the criteria (a)-(d) for issuance of a notice to proceed. All they had, Crockett said, was a wish and a prayer that something might happen. She stressed that it’s not a popularity contest.

Ray Detter: Detter said he’d just left a meeting [about the project formerly known as The Madison] and suggested that everyone at that meeting would have attended if they had known there was going to be a public hearing. He referenced several letters that the commission had received, including one from the Old West Side Association, all opposed to the project. He contended that the Liberty Lofts residents had simply said they would not oppose the project, but he said they don’t support it. [In his turn to rebut, Mucha would later read aloud from the Liberty Lofts Condominium Association letter sent to the commission indicating that the association supported the project.]

Lis Knibbe: Knibbe spoke specifically to the criteria (a)-(d) for issuing a notice to proceed. She said that the most salient one was (b), which talks about structures being in the way of a major improvement program that will be of substantial benefit to the community. The question, she said, had to do with the alternatives. In this case, it meant alternatives to creating parking in place of the two houses. She suggested the parking lot across Liberty at 415 W. Washington as an existing alternative and suggested some kind of expansion that could provide housing and parking. Knibbe allowed that it’s conceivable that with an agreement in hand with someone willing to rent the greenhouse space, one could imagine making a case under (b) for a notice to proceed with demolition. But without a user in place, she said, the developer hadn’t met the standard.

(Rebuttal) Ron Mucha: Mucha took exception to Detter’s suggestion that the residents of Liberty Lofts didn’t actually support the project, but rather simply didn’t oppose it. Mucha read aloud a brief section of a letter of support from the Liberty Lofts Condominium Association: “The board of the Liberty Lofts Condominium Association supports the proposal by Morningside dot dot dot.” He said that he believed that the Downtown Citizens Advisory Commission, on whose behalf Detter spoke, included a couple of residents of Liberty Lofts.

Mucha stressed that for his part, the removal of the structures was contingent on finding a user for the adjoining greenhouse space (more than 19,000 square feet of retail area). If there were a client who wanted the space “as is,” he said, Morningside would not have any interest in demolishing the houses. As far as the alternatives for parking elsewhere, he said that the various alternatives had been explained to any potential tenant but that so far, none of them had found it to be adequate.

(Rebuttal) David Strosberg: Strosberg described how the greenhouse property for which parking was now being sought had been acquired in 2003. He said that Morningside had been marketing the property to the world since that time. In the course of that diligent marketing, he said, a couple of potential tenants had expressed interest and the most serious of those wanted to make a contingency of making more parking available.

On investigation of the process for doing so [demolition of structures in a historic district], Strosberg said, they went away. The thought behind the current application was to be proactive after five years of not finding a user. He said he understood the sentiment against building more parking, but said that the realities of the marketplace are different. He described the greenhouse space as the largest single space in downtown Ann Arbor. Any potential tenant would look to a market well beyond walking and bicycling distance. He said that his company specializes in historic rehabilitation and that it’s best when such rehabilitation serves contemporary needs. That’s what Morningside had done with Liberty Lofts, he said.

Deliberations and Motions by the Commission

Motion – Deny Certificate of Appropriateness: The first motion, put forward by commissioner Ramsburgh, was to deny a certificate of appropriateness.

Commissioner Giannola invited her colleagues to approach this as a “sacrifice” of the two houses for the benefit of the Liberty Lofts project, and for historic preservation in general. Historic preservation, she said, is not just to rehabilitate specific structures. She described Liberty Lofts as a “shining star” of historic rehabilitation, with the residential side a viable enterprise, but the commercial side [the greenhouse space] not yet viable.

Even though the two houses are “contributing resources,” Giannola continued, it’s not like they are the only two such houses. The more important goal is the rehabilitation of an adjacent structure [the greenhouse space]. If the commercial side of the property were to fail, she said it would deter other developers from trying to rehabilitate historic properties, and that affects the goal of historic preservation in general. The houses are a deterrent, she contended, not to just this project, but to other projects.

Sarah Shotwell, chair of the commission, described herself as the the biggest fan of rehab and reuse. But in this particular case, she said, the reason she felt strongly about retaining the houses did not have to do with the houses themselves, but the fact that they are characteristic of so many of the houses in Ann Arbor. They are, she said, one of the artifacts of residential homes being on the same block as industrial structures. It’s about preserving the character and context of the neighborhood, she said. She said she’d love to see a viable building on the commercial side, but couldn’t be in favor of removing the houses.

Shotwell rejected Giannola’s argument that the denial of permission to demolish the houses could have a negative impact on historic preservation in general. Even though the property had sat vacant for some time, she did not think it would be indefinite. Based on what she’d seen in other cities, she concluded, she did not think that this denial would ruin all other Ann Arbor efforts at rehabilitation and reuse of historic buildings.

Commissioner Henrichs stressed that maintaining vitality is a key component to rehabilitation projects. There has to be an economic vitality to neighborhoods and communities, he said. Henrichs also asked that the criteria (b) and (d) be reviewed and be read into the record.

Giannola returned to her point that historic preservation is about more than just preserving buildings –  there is an economic benefit to the community. She suggested that buildings which are of ordinary quality could be sacrificed to provide for new development. But the new development, she said, is not to make a 7-11, it’s to make another historic building [the greenhouse space] more viable. Giannola also pointed out that the developer had said he was not going to demolish the houses unless he had a tenant who insisted on the additional parking spaces.

Commissioner McCauley suggested that parking might not be the exclusive reason the space is not being rented and characterized the need for parking as hypothetical. If the commission determined that it was a substantial benefit to the community to add parking spaces, then pretty much any business that had a vacancy could bring the same argument, he said. There’s a consensus that less surface parking is better and that a surface parking lot is not in the public interest. [Editor's note: The parking garage recently authorized downtown is to be built underground.]

Commissioner Glusac described the space in the greenhouse as unique, with its almost 20,000 square feet of retail space. There’s not another space like it in downtown Ann Arbor, she said, so the commission should look at it in that fashion.

Commissioner Ramsburgh cautioned that they were steering away from their responsibilities as historic district commissioners. The district was set up, she reminded her colleagues, to preserve and protect. It was the first working-class district in the country, and the context of worker housing juxtaposed with the places where they worked was important, she said. It’s not appropriate, she said, to disregard the houses because they’re ordinary. That would be to disregard the importance of the whole district.

Rambsurgh said that if the developer came back with a concrete proposal, with all the site plans in order [as specified under condition (b)] she would consider it. To demolish historic resources without a proposal is a travesty, she said. Responding in part to Glusac’s contention that the space was unique, she offered South Main Market as a similar space with only 60 parking spaces, no other auxilliary spaces, but was very viable. There were similar situations that have tenants in them, she said, and she did not believe Morningside wouldn’t be able to find a tenant. The commission’s  jurisdiction, concluded Ramsburgh, is to preserve the resources.

Outcome: The motion failed on the  3-3 split already described

Motion – Issue a Notice to Proceed: Giannola moved the issuance of a notice to proceed. Shotwell asked her to specify a subsection. Including both (b) and (d), Shotwell said, meant that the project would need to satisfy both subsections, but it clearly did not satisfy (b). At that Ramsburgh suggested that (b) be included in the motion. Shotwell cautioned that this wouldn’t be “a fair motion.”  The commissioners settled on (d) for the motion.

There was much back and forth on the motion, but it covered much of the same ground as the previous deliberations.

Outcome: The motion failed on the  3-3 split already described.

Motion – Issue a Certificate of Appropriateness: Shotwell declared the commission at an impasse and queried Kevin McDonald of the city attorney’s office about what the implications for the status of the application were. McDonald suggested that to clarify the record, the commission could consider a motion to issue a certificate of appropriateness. Shotwell initially resisted the idea, saying that it was not possible to issue a certificate of appropriateness for the demolition of a structure. [Editor's note: This was the same understanding of the situation The Chronicle had, based on the description from February's meeting.]

However, Kristine Kidorf, who consults for the city on historic preservation matters, pointed out that there were no rules about what motions could be made. The commission then went through the exercise of entertaining the motion.

Outcome: The motion failed on the 3-3 split already described.

What Did it Mean

There was then uncertainty among of the commissioners about the overall status of the application, given the various votes. Given that it was Day 51 of the 60 days the commission had to act on the application, there seemed to be an interest in making sure that the commission had “acted.”

Commissioner Henrichs seemed to briefly moot the possibility of passing a motion issuing a notice to proceed that would be contingent on the developer having a tenant for the greenhouse space who required additional parking. However, the possibility was not pursued by him or other commissioners – it wasn’t clear from the brief mention by Henrichs whether the option was technically possible.

McDonald clarified that by entertaining the motion to issue the certificate of appropriateness, the body had entertained the possible positive motions and had thereby fully considered the application. Otherwise put, we conclude, it would not be possible to claim that the body had failed to act on the application within the required time period.

The Question of Contingent Demoliton

One of the issues left unclarified for The Chronicle after the meeting concluded was the question of what tools are available for preventing “needless demolition.”

Mucha had assured the commission that the permission to demolish the two houses would be used only if necessary, and had alluded at the commission’s February meeting to the economic barriers to doing so: cost of land acquisition (only an option is held to purchase some of the land) and construction of the parking area itself. Further, Mucha had pointed out, the construction of the parking lot would entail a site plan review by city planning staff. The votes and deliberations of some  commissioners seemed to indicate that they were not convinced by the barriers on Morningside’s side to demolition. We thus considered what tools are available for the city to control demolition, even if a notice to proceed with demolition is approved.

Site Plan Review: The Chronicle looked into whether the possibility that the “needless” demolition could be prevented on the city’s side by planning staff. Could a site plan for the parking lot be denied, based on the developer’s failure to have a tenant in the greenhouse space? Answer: no. As long as the site plan meets code, it’s not possible to deny the plan on the basis of whether some contractual arrangement with a third party exists.

The demolition itself could be undertaken without a site plan review, although the site could not be used for parking until a site plan specifying that use had been approved.

Contingent Notice to Proceed: Henrichs’ briefly-entertained idea to make the issuance of a notice to proceed with demolition contingent on Morningside’s identification of a tenant for the greenhouse space is, in fact, a tool available to the historic district commission.