Demolition Moratorium for Two-Block Area

Ann Arbor City Council meeting (Aug. 6, 2009): Two kinds of moratoria were on council’s agenda for Thursday’s meeting – which had been rescheduled to accommodate the Aug. 4 Democratic primary elections in Wards 3 and 5. The first was a moratorium on new development in districts zoned with the classification of R4C (multi-family residential) or R2A (two-family residential). The second was a moratorium on demolition, attached to the creation of a study committee for a possible historic district in a two-block area just south of William Street on Fourth and Fifth avenues.

Council voted down the more general prohibition on new development in R4C/R2A residential districts, but approved the historic district study committee with its attached moratorium on demolition. It’s a case where the vote tally alone doesn’t tell the whole story – or even an accurate one: Counter to what one might expect, Mike Anglin (Ward 5) voted against the R4C/R2A moratorium, while Leigh Greden (Ward 3) voted for it.

A third major agenda item facing council was also related to new development: the Near North planned unit development (PUD) proposed for North Main Street just south of Summit Street, which is an affordable housing project that includes the nonprofit Avalon Housing as a partner. The council voted to move Near North on to a second reading, when a final decision will be made.

But probably the most important matter considered by council on Thursday appeared on the agenda as an “introduction” by the city’s chief financial officer, Tom Crawford, who spent around a half hour telling the city council why the city’s projected financial condition is worse now than it had been when the FY 2010 budget was adopted in the spring. Crawford’s presentation was characterized during commentary from the public later in the meeting as the “first salvo in a PR campaign” for a city income tax.

A bit of breaking news from Crawford’s report: bonds for the Fifth Avenue underground parking garage were issued on Aug. 5.

Revenue Projections: Report from the CFO

The city’s CFO, Tom Crawford, started his update by acknowledging that oftentimes speakers begin their remarks with a joke, but he said, “There is no joke tonight.” He then spent the next half hour not joking.

There are some national-level reports with glimmers of hope that the economy is starting to turn around, Crawford said, like the fact that stocks are starting to climb. But the glimmers are based primarily on the fact that the measurables are not declining as fast, he said.

What we confront locally, Crawford said, is grim: June unemployment figures for Ann Arbor and the state of Michigan are 10.6% and 15.2%, respectively. Part of the impact of high unemployment levels is that people spend less money – that causes state sales tax revenues to decrease. So far this year, state sales tax revenues are down 8%.

Sales Tax and State Revenue Sharing

What does state sales tax have to do with the city of Ann Arbor’s budget? Part of the sales tax collected by the state of Michigan is allocated to municipalities like Ann Arbor through “state revenue sharing.” That state revenue sharing has two components: (i) a constitutional part based on a fixed formula, and (ii) a statutory part over which the state legislature can exercise discretion, depending on state budget needs.

Queried by Carsten Hohnke (Ward 5) about possible changes in the two kinds of state revenue sharing, Crawford clarified that both kinds of state shared revenue would go down as a function of the 8% year-to-date decrease in sales tax revenues. That’s because the total amount of sales tax revenues determines the “size of the bucket” from which both types of shared revenue are taken. The statutory share could go down even further, Crawford explained, because the state legislature showed no signs that the resolution to the state’s budget issues would be addressed – the state currently shows $9 billion in expenses compared to $7 billion in revenues. Part of the $2 billion gap is expected to be covered with state sales tax money that would have otherwise gone to municipalities through state revenue sharing.

How much money are we talking about? And what has been the historical pattern of state shared revenue? In 2002 the city of Ann Arbor received $6.2 million in statutory state shared revenue and $7.5 million in constitutional state shared revenue. In FY 2009 those totals had changed to $2.9 million and $7.9 million, respectively – roughly a $3 million decrease since 2002.

Projections on which the adopted FY 2010 budget were based saw state shared revenue levels as flat compared to last year. Based on the actual 8% drop in sales tax collections, plus a pessimistic assessment of likely action by the state legislature to address its own budget, Crawford is now projecting $1 million to $1.9 million less in state shared revenue in FY 2010.

Added with $1 million less than projected in investment income, $0.2 million less in traffic citations, and $0.2 million less in development review fees, Crawford sketched a picture for councilmembers of a $2.4 million to $3.3 million shortfall for FY 2010, which is the current budget year. For next year, continued decreases in state shared revenue, traffic citations, and development review fees, together with a yet-to-be renegotiated parking agreement that assumes $1.7 million to be paid to the city by the Downtown Development Authority, led to a possible projected shortfall of $4 million to $5.8 million, said Crawford.

In terms of percentage of the budget, those shortfalls translate into 3-4% and 5-7% deficits for FY 2010 and FY 2011 respectively. In terms of people, it translates into 24-40 full-time employees for the first year, and 50-70 in the second year, whose salaries would not be covered.

New Reality

Declining property tax revenues did not factor into the slides Crawford showed councilmembers explaining why the forecast had become more grim since they had adopted their budget for FY 2010 in May. Why not? While property tax revenues continued to decline, Crawford said, so far this year they were tracking as they’d been forecast.

Still, factors other than property taxes had led to Crawford’s conclusion that, “We’re looking at a new reality.” Part of that reality was, said Crawford, that the city would be facing the prospect of service reductions. Whereas in the last decade, the reduction in staffing levels – from around 1,000 in 2001 to around 800 in 2009 – had been achieved through greater efficiencies, without reducing services, this next cycle could be different.

Councilmember Questions

Mike Anglin (Ward 5) wanted to know what the impact of the early-out police retirement incentive had been, which the council had authorized in the spring. [There had been 34 officers who qualified for the program and based on a June 30, 2009 memo from Crawford, 26 of them had elected to accept the incentive, with the possibility that two additional officers might also accept because they'd been given a deadline extension for the decision.] In responding to Anglin, Crawford indicated that the cost of the buyout had been around $5 million, which had been paid out of the city’s reserve.

Anglin wanted to know what the effect the reduction of the reserve from around 17% of expenditures to around 10% had had on the city’s bond rating. Crawford indicated that the city’s 10-11% reserve fell within the policy range of 8-12%. Further, Crawford said, the city had been given a rating of Aa2 the previous day, when they had issued the bonds for the Fifth Avenue underground parking structure.

Tony Derezinski (Ward 2) asked what other programs might exist at the federal level to help cities. Crawford said that he was not aware of any that might be relevant, and stressed that to date the federal stimulus package dollars that had been approved did not address needs that are related to recurring operations.

Derezinski inquired to what extent collaboration with other government entities was being explored – Ypsilanti and the Ann Arbor Public Schools, for example. Crawford said that in the IT department there were three different projects he was working on in collaboration with Washtenaw County. As a matter of philosophy, Crawford explained, whenever any issue comes up, possible collaborations are considered. City administrator Roger Fraser stressed that no two public sector organizations do business the same way, which meant that a desired collaboration might not happen today, but rather could be realized one to two years down the road. Fraser pointed to the new sheriff, Jerry Clayton, as “a major turn for the positive” in terms of the potential for collaboration with the county.

Christopher Taylor (Ward 3) asked when council might be provided with “some species of articulation” for the kind of decreases in services they might be looking at. Crawford deferred to Fraser on the question. Fraser stressed that the forecast reflected a “probable case.” He said he continued to stress that managers of departments needed to make cost reductions a priority. In September, Fraser said, the exact picture would be clearer.

Moratorium on New Development in R4C/R2A

The proposed moratorium on new development in R4C/R2A areas had been brought forward by Mike Anglin (Ward 5) at the previous council meeting, when it had been postponed. The key resolved clause of the resolution submitted by Anglin read: “That City Council hereby imposes a moratorium on all new development that requires site plan approval, expansion of existing development that requires site plan approval, zoning changes, special exception uses, or other comparable zoning items, in the R4C and R2A zoning districts … ”

The idea of a moratorium had been mooted at planning commission at least as far back as April 2009. [See previous Chronicle coverage.] Several speakers at public commentary voiced their support for a moratorium.

Moratorium: Public Commentary

Mozhagn Savabiesfahani: Savabiesfahani was signed up under public commentary reserve time to speak to the issue of the moratorium on new development in R4C districts. She began by thanking the city’s CFO, Tom Crawford, for the grim presentation on the city’s economic outlook. If the state of Michigan needed $2 billion dollars to make up a budget shortfall, she suggested, then the U.S. should think about getting back the $300 billion in aid that it had given to Israel. She then called on the council to stop the demolition of the seven houses on South Fifth Avenue where the City Place project is proposed to be built. She said that her response to a friend who asked her why she cared about those houses was this: If you destroy history anywhere, you’re destroying history everywhere. So she was opposed to the erasure of history locally, just the same as she was opposed to it in the Middle East.

Susan Morrison: Morrison introduced herself as a resident and an attorney speaking on behalf of several individuals who are members of the Germantown Neighborhood Association. She urged the adoption of the temporary moratorium on new development in R4C zoning districts. She noted that courts have upheld the validity of moratoria, and contended that the need for a moratorium is evident, given that the goals and recommendations of the Central Area Plan had not yet been implemented in the zoning code. As a legal matter, she said, there is no question that the moratorium would be considered a reasonable one. No one could argue that it’s been a sudden or rash decision, she said, given the long history of discussion throughout the community.

Marvin Bartlett: Bartlett urged the council to adopt the moratorium on new development in R4C districts. He read aloud a poetic effort, that went by too quickly for The Chronicle to capture in any significant part. It included the line, “Disarm the developers, please!”

Claudius Vincenz: Vincenz offered council a compliment for their rapid turnout on consideration of the moratorium. He asked that the moratorium include a prohibition against demolition, because it’s easy to “create facts on the ground.” He also asked that the council not exempt PUD site plans from the moratorium, saying that such an exemption would introduce new dynamics in the play and counter-play between developers and residents. Such an exemption, he said, would change the dynamic from “little league” matter-of-right developments to “big league” PUDs. He drew an analogy of having a flat tire while driving on the highway – instead of stopping and fixing the problem, an exemption would be like deciding to slow down to 10 mph but keep going. Addressing the historic district study committee, he argued that the boundaries should not be defined by artificial lines on a map, but should be based on the natural topography. That meant that the area should go down to Madison Street, which is the beginning of the flood plain, and not stop at Packard Street.

Moratorium: Council Deliberations

Mike Anglin (Ward 5) began by emphasizing that the resolution provided protections for people who wanted to do work on their homes – only those projects requiring site plan approval would be subject to the moratorium. Referring to the R4C/R2A study committee, which would be appointed the same night, he said that the moratorium would allow time to “get our house in order.” The study committee will provide the city council with a report and recommendations for potential ordinance changes in R4C/R2A zoning districts.

One basic premise of the moratorium is that while revisions to the zoning are being considered, no development should take place, to prevent a rush of proposals that aim to avoid compliance with any new changes that might be proposed.

Christopher Taylor (Ward 3) indicated that he was supportive of the notion of a moratorium, but wanted to propose a total of four amendments. We’ve indicated those amendments by red-lining strikethroughs and blue-facing additions:

RESOLVED, That City Council hereby imposes a moratorium on all new development that requires site plan approval, expansion of existing development that requires site plan approval, [Amendment 3; see also below] zoning changes, special exception uses, or other comparable zoning items, in the R4C and R2A zoning districts [Amendment 1] within the Central Planning Area, and that any petitions or permits for such items be deferred for a period of [Amendment 2] 180 365 days from the date of this resolution in conjunction with the study and revision of the zoning ordinances pertaining to these districts, with the following exceptions:

• Approval of development, redevelopment, or the issuance of building permits for projects that do not require an approved site plan, including but not limited to construction of or addition to one single or two-family dwelling or accessory structure on a parcel;
• [Amendment 3] Petitions for Planned Unit Developments (PUDs) and PUD site plans;
• [Amendment 4] The following petitions that have been accepted by the City for review prior to the date of this resolution and are under review by the City:
  
  1. City Place Site Plan
  2. Casa Dominick’s Revised and Expanded PUD Zoning District
  3. The Moravian PUD Zoning District and PUD Site Plan;

Anglin accepted the first two amendments as friendly to his resolution, saying they dealt with timing and geographic scope and were thus “non-substantive.” The third and fourth prompted a longer council discussion.

Council first handled Amendment 3.

In response to a question from Margie Teall (Ward 4) about why the PUD site plans would be exempted, Taylor argued that the rationale for the moratorium was to give the city an opportunity to align the zoning with the master plan, and that affected specifically “matter-of-right” projects. PUDs inherently did not follow existing zoning, and their approval “rises and falls not by right,” said Taylor, but by a separate ordinance – an ordinance that is not currently under review by any study committee.

Taylor did allow that a PUD was in a way tied to the nature of the prevailing zoning where a PUD was proposed – the prevailing zoning acted as a foil to establish whether or not a proposal required a PUD rezoning.

Sabra Briere (Ward 1) contrasted the experience of councilmembers in reviewing PUD proposals with that of neighborhoods who opposed them. For councilmembers, she said, it was always intriguing to see how well planning commission, planning staff, the developer and the public had done their respective jobs, and that it was an enlightening and rewarding experience. For the neighborhoods, however, she felt like it was merely frustrating. She compared the idea of imposing a moratorium, but exempting PUDs, with offering a carrot but hitting the neighborhoods with a stick, too.

Carsten Hohnke (Ward 5) indicated that he’d gotten to a place where he was not inclined to be supportive of a moratorium – the downside was the perception that the city was changing the rules in the middle of the game. But he said that he’d support the amendments because they would lessen the city’s legal exposure. Responding to Briere’s comments, he said he appreciated her concern about the neighborhoods feeling threatened, but said that a moratorium wouldn’t have an effect on what could eventually wind up being built.

Tony Derezinski (Ward 2) echoed some of the same sentiment as Hohnke in not supporting the overall idea of a moratorium, but supporting the amendments. This was consistent, he explained, with the legislative role of “making something bad less bad.”

Stephen Rapundalo (Ward 2) said he supported the sound logic that Taylor had used, saying that a PUD is a customized form of zoning that gave the council great discretion.

Anglin weighed in against excluding PUDs from the moratorium, saying that they reflected a radical change to a neighborhood. Rapundalo objected to the way that Anglin had characterized PUDs, saying that Anglin implied that PUDs were inherently bad and negative. It does a disservice to the PUD designation, said Rapundalo, to suggest they’re all bad.

Mayor John Hieftje posed a hypothetical: What if the study committee finished its work in two weeks? Then anyone would still be free to bring a PUD proposal forward next week. [This seemed to be a different way of making the same point that Hohnke had made earlier – for a PUD, there'd be no material effect on what could eventually be proposed.]

A discussion ensued about whether amendment 4 was in part redundant – if amendment 3 meant that all PUDs were exempt from the moratorium. The city attorney and staff were called on to interpret. Marcia Higgins (Ward 4) asked if it might not be possible to find wording that didn’t require the interpretation of the city attorney. The word “all” was inserted into amendment 3, with councilmembers indicating that they would delete the specific reference to Casa Dominick’s and The Moravian when amendment 4 was considered.

While the wording change and the plan to delete specific reference to two PUDs in amendment 4 seemed like a technicality, it appeared to change Briere’s mind about her vote. She said that the discussion had provided some clarity – it would be all PUDs that would be exempted, not just two specific projects.

Outcome: Taylor’s amendment 3 passed on a roll call vote, with dissent from Anglin.

With the change to amendment 4 to reflect only exemption of the City Place project (the other projects being subsumed under amendment 3 as PUDs), councilmembers focused their deliberations on that project. Hieftje led off by saying that a moratorium on development was not the best mechanism to apply to the City Place project, if the intent was to protect the houses there. Why not? The moratorium on new development did not include a prohibition against demolition. Plus, said Hieftje, a failure to exempt City Place provided some legal exposure for the city.

Briere prefaced her argument for exempting the project from the moratorium by saying, “I don’t think there are many people who think I love this project.” Briere then articulated a view that was echoed by many others: In postponing the City Place matter-of-right project at its previous meeting, the city council had made a commitment to the developer that he could bring it back with 35 days notice. If it were included in the moratorium, then that would reflect a failure to honor that commitment.

Sandi Smith (Ward 1) and Rapundalo echoed much the same sentiment. Smith stressed that it was dangerous to deviate from the predictability of the regulatory process when someone goes down a path in good faith. Rapundalo noted, “There are such things as property rights,” adding, “Let’s be honest – it’s an attempt to stop a development.” Rapundalo cautioned that it would send a very chilling message to the broader community that Ann Arbor is closed for development.

Deliberations seemed to be covering much of the same ground when Higgins called the question – a parliamentary move that forces councilmembers to vote immediately on whether to continue discussion of the current motion, which in this case was amendment 4. Hieftje at first mistakenly asked for discussion on the calling of the question – and had to appeal to the city attorney for help. There is no discussion that’s attached to the calling of the question, and councilmembers voted on whether to continue deliberations. Hieftje, Hohnke, and Anglin voted against cutting off deliberations, with their colleagues forcing a vote on amendment 4.

Outcome: Taylor’s amendment 4 passed with dissent only from Anglin.

For the resolution on the moratorium, even as amended, there turned out to be little support. So the first part of Smith’s statement as she opened deliberations seemed mistaken in hindsight: “I sense I may be in the minority, but I can’t in good conscience send a message to the rest of the world that we’re not interested in growth in our city.” She noted that as the other aspects of the city’s zoning had been reviewed, no moratoria had been needed. This last point later was echoed by Higgins and Hohnke.

Derezinski also echoed Smith’s view, adding that he was concerned about potential litigation. If the moratorium did, in fact, pass muster, he said, then it would be in a court – and that would be expensive. He recalled that when he practiced law he had “a wonderful hourly rate.” He then described the amended resolution as an attempt to “put lipstick on a pig.”

Anglin said that by amending the resolution, council had said to residents that if they came forward with cogent arguments then they didn’t really count and their rights weren’t protected. As amended, Anglin said, he was not going to vote for the resolution, either.

Rapundalo said that his concern with the resolution was: What is the specific protection for people that needed to be put in place? The amendments, he said, gave him some comfort that the risk of legal exposure was diminished and he was thus willing to support it.

Taylor said that there were some other areas of R4C/R2A zoning districts besides the one where City Place was sited that should be considered – on Church, Tappan, and Hill streets.

Teall said the amendments went a long way but not all the way. For her, the moratorium was too broad.

Hohnke also characterized the moratorium as too broad a tool, and the concern being addressed – the incompatibility of master planning with zoning ordinances – did not rise to the level of health, safety and welfare. In any case, Hohnke said, it would not prevent demolition.

Briere, for her part, said that the moratorium applied to a much wider area than what had been the focus, namely Germantown. The area of the moratorium, she warned, was large enough that the decision should not be made based on the emotion of City Place in Germantown. A moratorium was the wrong tool, she said.

Outcome: The moratorium failed with only Rapundalo, Taylor and Leigh Greden voting yes.

Historic District Study Committee

A resolution sponsored by Carsten Hohnke (Ward 5) and Marcia Higgins (Ward 4) to establish a historic district study committee was added to the agenda on the day of the council’s meeting. The council had considered a similar resolution in December 2008. One difference between the resolution the council considered on Thursday and the one it rejected in December was the inclusion Thursday for a moratorium on demolition in the study area.

Another difference was that the study area was considerably smaller:

… the area encompassing properties that abut the east and west sides of South Fourth Avenue and South Fifth Avenue, bounded by the East William Historic District on the north, and Packard Street on the south, and also including 209, 215, and 219 Packard Street;

Hohnke led off deliberations by reminding his colleagues that they’d considered something similar before, and that this time the area was smaller. The study committee could extend the boundaries for a recommended historic district, he said, if they thought it was appropriate to do so.

Tony Derezinski (Ward 2) said that the proposal raised a lot of intriguing issues, but given that it had just been added to the agenda that day, he had not had a chance to look at it. He thus moved to postpone the decision. Stephen Rapundalo (Ward 2) and Leigh Greden (Ward 3) supported Derezinski’s effort to postpone. Greden said he’d like to see a map. His colleagues pointed out that a map was included in the meeting packet.

Marica Higgins (Ward 4) said she was not in favor of a postponement. She noted that they’d said back in December 2008 they’d bring back a resolution if the proposed study area was smaller – it was smaller.

Margie Teall (Ward 4) and Honhke got clarification that the study committee had to be established first and then, at a separate meeting, the members appointed.

Mike Anglin (Ward 5) initially said that he was in favor of a postponement to expand the scope of the study area, but when it was clarified that the committee could recommend a wider area for establishment of a historic district than the study area, he was content to vote on it that night.

The clarification on the boundary issue came from Sabra Briere (Ward 1), who said she could not support a postponement based on the boundary issue.

Derezinski said that while he was glad that some councilmembers had had a chance to consider the proposal, he had not, because it had been sprung the same night. He contrasted the process for the moratorium on development in R4C areas, which had stretched over four meetings. Here, the council was being asked to make a decision in 10 minutes. He said he wanted to hear staff input. “I’m asking for 12 days [until the next meeting],” he said. Derezinski noted that while it was a similar proposal to the one council had considered in December 2008, it was not the same one.

Christopher Taylor (Ward 3), responding in part to Derezinski, weighed in against postponement. He noted there’d been a great deal of discussion on the point and that he considered it to be a subset of the previous proposal and thus felt adequately prepared to vote.

Mayor John Hieftje then reduced the talk to a very practical level: How long does it take to issue a demolition permit? The implication here was that a property owner who wanted to demolish a building within the study area might have enough time to accomplish that, if the council were to postpone the decision until its next meeting. Wendy Rampson, with the city’s systems planning unit, estimated that for a residential building it would probably take around two weeks, including the utility shutoffs.

Hohnke got clarification from the city attorney’s staff that a site plan is not tied to demolition. So the commitment the council made to the City Place developer to bring back the matter-of-right site plan with 35 days notice could still be honored.

Assessing the 12 days they’d have to wait until next council meeting and the estimated two weeks it would take to get a demolition permit, Taylor concluded: “That’s pretty close.”

Outcome: The motion to postpone consideration of the historic district study committee failed, with Smith, Derezinski, Rapundalo, and Greden voting for it.

Faced with the need to vote that night on the study committee, Smith criticized the proposal with its accompanying moratorium on demolition as “punitive.” She said that the council had set aside the City Place matter-of-right project, with the expectation that the PUD version of the project would be worked on as a part of the regulatory process – an expectation that would not be met with the creation of a historic district study committee.

Derezinski agreed with Smith, saying that it sends a “bad message.” He said it was “aimed at one project.”

Taylor Hohnke argued for the resolution he’d sponsored, saying, “This is within the rules of the game. It’s within our arsenal of options.” While he allowed that he was not sure if he would ultimately support a historic district for the area, Taylor Hohnke said he was eager to learn what the study committee had to say.

Hieftje was blunt in saying that the matter-of-right project was a “lever” in order to achieve a PUD down the road. The developer, Hieftje contended, was using every tool in the toolbox, and the establishment of a historic district study committee was a tool in council’s tool box.

Outcome: The establishment of a historic district study committee passed, with dissent from Smith and Derezinski.

Near North PUD

Near North is a planned unit development – as contrasted with a “matter-of-right” project. As such it does not conform to the existing zoning, and the city council’s role will be to assess whether the public benefit offered by the project is adequate to justify a rezoning so that it can be built.

The building, proposed for the east side of North Main Street just south of Summit Street, comprises 40 residential units (44 bedrooms total) to be built in a five-story apartment building with 2,950 square feet of commercial space and 1,645 square feet of office space attached to the building. Forty parking spaces would be provided below the building, with an additional 10 spaces not under the building.

All of the units are proposed to be affordable under Michigan State Housing Development Authority (MSHDA) standards, which target rents for income levels at or below 50% of area median income (AMI). In addition, 14 of the units are designated as “supportive housing” for individuals having no more than 30% of AMI.

Several people spoke during the public commentary reserved time at the start of the meeting – this was not the official public hearing on the matter. That will be scheduled when the proposal comes before council for a second and final reading.

Near North Public Comment Reserved Time

Bill Godfrey: Godfrey is a partner in Three Oaks Group, the team that is developing the Near North project. He stressed that the project consists of 100% affordable housing units. He also emphasized that the public engagement process had been extensive, which had included three design charettes and three planning commission meetings. That process he characterized as constructive and collaborative – one that had resulted in many changes to the design. He allowed that the 5-2 vote for the project by the planning commission was a recommendation for denial, but said that commissioner Craig Borum, who’d been absent for the vote, had indicated via email that he would have voted for the project, had he been present. Later, during council deliberations, Tony Derezinski (Ward 2) – who is the city council’s representative to planning commission and was also absent from the Near North vote – said he, too, would have voted for the project.

Kate Warner: Warner introduced herself as a retired University of Michigan urban planning professor, who’d previously served on the housing policy board, the affordable housing commission and co-directed the Washtenaw Affordable Housing Corporation. She said that in her 35 years of study and work to increase the supply of affordable housing, she’d rarely seen factors of land use and economics so well aligned as with Near North. Its moderate density, she said, made it appropriate for alocation in an “interface zone” between the neighborhoods and downtown, which is proximate to the pool of service jobs in the downtown that could employ residents. Its mixed commercial use component strengthened its economics, she said.

Mary Browning: Browning introduced herself as speaking on behalf of the Religious Action for Affordable Housing (RAAH). She reported that her son has an efficiency apartment with Avalon Housing and expressed her hope that the council would approved the Near North project, in which Avalon is a partner. She pointed out that the Delonis Center – the downtown homeless shelter – can only be successful if there is housing to which shelter residents can eventually move.

Michael Appel: Appel is the executive director of Avalon Housing. He emphasized that the 100% affordable nature of the project set an unprecedented high standard for affordable housing in PUD projects. The design with a mixture of uses and its density, he contended, were right for the location. The moderate density, he said, was not as high as the proposed D2 zoning district closer to downtown and not as low as the residential areas further from downtown. He concluded by saying that he knew they had not achieved the support for the project from the immediate neighbors, but that they would continue to listen and participate in dialogue.

Lisa Marra: Marra spoke in favor of Near North, saying that there was no doubt about the quality of services that Avalon would offer. Addressing concerns about the scale of the project, she noted that the neighborhood shows a variety of different scales and that the new building would have a positive impact on that mix of scales. Damian Farrell, the architect for the project, would not site the building poorly, she said. The North Main corridor, she continued, does not currently convey the spirit of the town, which has historic homes coexisting with green new buildings. The Near North project, she said, would serve as a symbol that the community is serious about its goals.

Thomas Partridge: Partridge introduced himself as a progressive, Christian-guided Democrat. He called on the council, the residents of Ann Arbor, Washtenaw County and southeast Michigan, to recognize the need for enlightened development. He encouraged the council to invite expert economists and leaders of local economic institutions to study the situation. We cannot wait, he said, to begin addressing the need for affordable housing and transportation. He suggested that the council begin with a reform of site plan requirements for new developments that would include a human rights amendment.

Near North: Council Deliberations

Tony Derezinski (Ward 2) led off deliberations by characterizing the project as “not new to us.” He’d had a chance to see the project in a fair amount of detail already, as the city council’s representative to the planning commission, which had recommended denial of the project on a 5-2 vote for it. Even though it had a majority of votes for it, the failure to reach a 6-vote majority from the 9-member body meant that it had been recommended for denial. Derezinski said he “pled guilty” to being absent for that vote, but would have voted for it.

Derezinski said he felt that better than 90% agreement had been achieved on the project among all parties and that it was a case of being willing to accept a three-quarter loaf.

Leigh Greden (Ward 3) indicated that he’d support the project at this first reading, but wanted to continue to listen to the public and the developer. Sabra Briere (Ward 1) said she agreed with Greden’s sentiments, but said that she did not think a three-quarter loaf was enough – she’d prefer nine-tenths of a loaf.

Mike Anglin (Ward 5) said that the success of Avalon Housing depended on its integration into the neighborhood. He noted that there were two Avalon houses in his own neighborhood that were not noticeable as low-income supportive housing. He said that the kind of harmony and agreement expressed by the developer was not true, saying that there was still disagreement with the project from residents.

Anglin said that even though an alternate proposal had been brought forward at the 11th hour, he hoped that it would be considered by the developer. [In The Chronicle's caucus report, we noted that North Central Property Owners Association representatives at that meeting indicated that they had developed an alternative proposal that would have roughly 30 units at around the same size (750 sq ft) as the developer’s version. A key difference would be that it would have a maximum of three stories, as contrasted with Near North, which includes a section of the structure that is five stories tall.]

Margie Teall (Ward 4) said that she would support the project at this first reading because of the extent of the affordability offered by the housing units.

Marcia Higgins (Ward 4) advised that the minutes from the planning commission meeting when Derezinski had been absent from the vote indicated that only Derezinksi had been absent – which was not consistent with the statement made by Michael Appel that commissioner Craig Borum had also been absent, but would have voted for Near North. She asked the city administrator, Roger Fraser, to follow up to see that the minutes were corrected.

Higgins also emphasized that whether someone would have voted for the project or not did not change the fact that the project had failed to win the planning commission’s recommendation. Still, she said that the levels of affordable housing offered by the project made her more than willing to move the proposal to a second reading.

Sandi Smith (Ward 1) noted the importance of the continued dialog between the developer and the neighborhood group. She characterized the issue as not the affordability of the housing, but rather the massing of the building.

Mayor John Hieftje reported that he’d met with representatives of NCPOA and had appreciated ttheir alternate proposal. He said he found the levels of affordability very attractive.

Outcome: The Near North PUD approved at first reading. Final approval will not come until its second reading before council, which will be accompanied by a public hearing.

Exemption Certificate for AVL Inc.

There was a public hearing on the receipt of the application for an exemption certificate, but the council did not have an action item on its agenda.

Karen Sidney: Sidney noted that while the city’s CFO, Tom Crawford, had just given a presentation on the doom and gloom of the city’s financial picture, the exemption certificate was a tax break, which “the rest of us pay for.” Sidney pointed to the $38 million in Single Business Tax abatement provided by the state to Google, as well as the free parking spaces provided by the city of Ann Arbor, but asked what Google had provided. [The internet company had said it expected to hire 1,000 people over five years, but in the first three years, they've only brought around 250 on board at its Ann Arbor location.]

Thomas Partridge: Partridge asked that all such certificates have a return on investment clause attached.

During his communications from council turn, Stephen Rapundalo (Ward 2), objected to what he said was a characterization by Sidney of the certificate as writing a check and handing it over. He said there’s a prescribed procedure and that the step to be considered by the council that night was simply the acceptance of the application. When the details of the certificate were worked out, he explained, they would reflect the city’s policy of what community elements are expected.

Communications from Council: Driving and Cell Phones

Stephen Rapundalo (Ward 2) reported that he and his Ward 2 colleague, Tony Derezinski, had asked the city attorney’s office to draft an ordinance to prohibit cell phone usage and texting while driving. He owned up to currently being an offender, but said that New York City had passed a similar ordinance and that it was a public safety issue. It will likely come before council at its Aug. 17 meeting.

Sandi Smith (Ward 1) noted that the council’s agenda was now time-stamped, which meant that it was easier to distinguish different versions of that document.

Mike Anglin (Ward 5) reported on a “wonderful thing” that had happened in Ward 5, namely the Michigan Inn on Jackson near I-94 had been demolished. “Let’s hope something good goes up,” he concluded.

Marcia Higgins (Ward 4) reported that the rules committee had been meeting over the last several months and that there would be a need for the council as a whole to have a work session to have a dialogue on rules changes.

Higgins also advised that the council’s administrative committee was asking that councilmembers fill out their surveys on the performance review of the city administrator (Roger Fraser) and the city attorney (Stephen Postema), as it was time for their annual assessments. [Both of these positions report to the city council.]

Mayor John Hieftje explained his rationale for objecting to the unison choral singing that had taken place at the previous council meeting: It could not be tolerated, he contended, because enforcing a rule against multiple people speaking at the same time was the only way catcalls and heckling could be prevented.

Present: Stephen Rapundalo, Mike Anglin, Margie Teall, Sabra Briere, Sandi Smith, Tony Derezinski, Leigh Greden, Christopher Taylor, Marcia Higgins, Carsten Hohnke, John Hieftje.

Absent: none.

Next Council Meeting: Monday, Aug. 17, 2009 at 7 p.m. in council chambers, 2nd floor of the Guy C. Larcom, Jr. Municipal Building, 100 N. Fifth Ave. [confirm date]