Two of the six proposals to develop the top of the Fifth Avenue underground parking structure – known as Library Lot – have been eliminated from further consideration.
At a Friday morning meeting, members of a committee that’s overseeing the Library Lot development cited insufficient financial benefit to the city as the reason for taking Ann Arbor Town Square and Ann Arbor Community Commons out of play. Both of those projects would put primarily open space on the 1.2-acre lot. Three of the other proposals include a hotel, with the fourth focusing on housing for senior citizens.
Developers of the four remaining proposals will be scheduled for interviews throughout the day on Wednesday, Jan. 20. It’s possible that the field will be thinned even further before then, depending on how developers respond to a list of questions that committee members have formulated about each specific proposal.
The Jan. 20 meetings will be open to the public. The city also plans to hold an evening open house on Jan. 20 for the public to meet with developers and give feedback on the proposals.
In addition, the committee on Friday discussed the possibility of the Ann Arbor Downtown Development Authority paying for a consultant to help evaluate the remaining proposals.
Project Criteria: Financial Benefit
At Friday’s meeting of the RFP advisory committee, Jayne Miller – the city’s community services director – reported on results from a technical review committee that had evaluated six proposals submitted to the city in mid-November. They looked at whether the proposals met three criteria, as described in the city’s Request for Proposals (RFP):
1. Beneficial use of the site. Any proposal for this site must demonstrate a clear benefit to the community and be consistent with the recommendations of the Downtown Plan, and A2D2 initiative. Preference will be given to proposals that incorporate a use (or uses) that provides a publicly available service to the community, for instance, building or open space that may be used for public meetings, recreation, or civic/ cultural events.
2. Environmental benefits. The development proposal should incorporate to the greatest extent possible environmentally sensitive design and energy efficiency features that follow Leadership in Energy and Environmental Design (LEED) standards. In addition, the project should propose innovative and environmentally friendly runoff water management and seek to improve water quality.
3. Financial return. The proposal must provide a positive financial return to the City. In the absence of other considerations, the City has a fiduciary responsibility to obtain fair market value upon the sale of City assets. Long-term lease or other property arrangements will be considered, but must meet this financial return criterion.
Miller said that neither the Ann Arbor Town Center proposal nor the Ann Arbor Community Commons met the criteria of a financial return to the city.
The Ann Arbor Community Commons – proposed by a group of residents that include Alice Ralph and Alan Haber, who attended Friday’s meeting – identified the need for public funds, Miller said. The proposal for Ann Arbor Town Center, submitted by Dahlmann Apartments Ltd., offered to pay the city $2.5 million, but did not identify funds for ongoing maintenance. Miller said it’s also unclear what the actual cost would be to develop the Town Center project – a proposed urban park with a plaza and ice rink.
City councilmember Stephen Rapundalo (Ward 2), who chairs the RFP committee, said that the criteria of financial return was of utmost importance to the council. That sense is heightened by recent developments in the city budget, he said. [See Chronicle coverage: "Ann Arbor City Budget: Cuts Begin Now"]
“There will definitely be no public funds available for this project, should it move forward,” Rapundalo said. Council had been adamant that the project be cash neutral or cash positive, he added. He also noted that Ann Arbor Community Commons and Ann Arbor Town Center didn’t meet some of the other qualifications they were looking for, including ongoing experience with public-private partnerships.
Eric Mahler, a committee member who’s also on the city’s planning commission, said in addition to the financial benefit issue, projects that were exclusively open space brought up safety concerns, especially at night.
Several other committee members voiced agreement, and the group decided to eliminate the Ann Arbor Town Center and Ann Arbor Community Commons proposals.
The remaining proposals are:
- A hotel, meeting space, restaurant/retail complex proposed by Acquest Realty Advisors of Bloomfield Hills.
- “The Fifth a2″ proposed by Jarratt Architecture of Ann Arbor and South Lyon – a mix of hotel, meeting space, condos, and restaurant/retail.
- “All Seasons of Ann Arbor” proposed by Beztak Land Co. of Farmington Hills – a complex of apartments for senior citizens, restaurant/retail and office space.
- “Ann Arbor Town Plaza Hotel & Conference Center” proposed by Valiant Partners of White Plains, N.Y. – a hotel, conference center, condos and restaurant/retail.
Bringing on an Outside Consultant
Susan Pollay, executive director of the Ann Arbor Downtown Development Authority, is a member of the RFP committee that’s reviewing the Library Lot proposals, as is John Splitt, chair of the DDA’s board. At Friday’s meeting, Pollay reported on a discussion that took place at a recent meeting of the DDA’s partnerships committee.
That group – which includes city councilmembers Margie Teall (Ward 4) and Sandi Smith (Ward 1) – talked about the possibility of the DDA paying for a consultant to help evaluate the Library Lot proposals. (Teall also serves on the Library Lot RFP committee, and attended Friday’s meeting. Smith serves on the DDA board, in addition to the city council.)
The DDA partnerships committee identified several ways that a consultant could help, Pollay said: 1) evaluating whether the Library Lot proposals make financial sense, including whether it’s likely that the developer could get financing for the project; 2) assessing whether the developers are financially solvent, including what other projects they might be committed to already; 3) helping city council understand the timing of the project, and to make choices about a realistic timeline for developing the site; and 4) researching similar projects in similarly-sized communities. Some of the proposals cited comparisons to Chicago’s Millennium Park or San Antonio’s River Walk, Pollay said, which would not be realistic comparisons to a town the size of Ann Arbor.
If the RFP committee agreed, Pollay said they could bring a grant request to the DDA’s next board meeting. The DDA board meets at noon on the first Wednesday of each month – its next meeting is on Jan. 6.
Stephen Rapundalo said that in looking at the proposals, he realized that at a certain point, assessing them sufficiently goes beyond his expertise. He also wondered whether a consultant would be useful to help the developers flesh out certain aspects of the proposals that the RFP committee might identify, such as the public benefit component.
Committee member Sam Offen asked whether the city had anyone on its staff that might serve the same purpose. City administrator Roger Fraser said the city doesn’t have anyone with the kind of private sector experience they’d need. It would be useful to have someone with that kind of expertise representing the city’s interests, he said, considering what’s at stake.
Offen expressed concern over giving the DDA more power, if it financed a consultant. He wanted to make sure the DDA didn’t get “an additional vote at the table.” Pollay likened it to the grant that the DDA provided to help pay for the Calthorpe report – the city managed that initiative, but the DDA helped pay for the consultants that worked on it. [The DDA provided $175,000 for that project.]
Rapundalo suggested getting a firm or a team that could draw on expertise in several areas, from finance to architecture to real estate development. He also wanted someone who could help the city with a public engagement process. When Offen said it might be better to have someone locally handle that aspect, Fraser said that the city was short-staffed and could use someone to help manage the process.
Pollay said she also assumed that to avoid the appearance of a conflict of interest, they’d want to look for someone outside of this area and who wasn’t connected in any way to the developers making proposals for the Library Lot.
Eric Mahler said he was growing skeptical of finding a firm with all of these qualities. “If we do find that under one roof,” he said, “it ain’t gonna be cheap.” No dollar amount for the consultant was floated at Friday’s meeting.
The group discussed when to bring in a consultant, assuming that the DDA approved the funding. They agreed that Pollay and Miller would work up a request for qualifications (RFQ), and ask for candidates to respond by Jan. 5. The information would be forwarded to the RFP committee members before their next meeting on Jan. 8.
Also at the Friday meeting, the RFP committee decided to schedule presentations for the four remaining proposals on Wednesday, Jan. 20 – tentatively to be held at the Community Television Network (CTN) studios on South Industrial. The plan is to give each developer 90 minutes, including 30 minutes for a presentation, 30 minutes for questions from committee members, and 30 minutes for questions from the general public.
In addition, an open house for the public to meet with developers of the four proposals is tentatively planned for the evening of Jan. 20 at the downtown library, 343 S. Fifth Ave.
What about the Library?
Stephen Rapundalo asked if anyone had talked with leaders of the Ann Arbor District Library to get feedback on the proposals. The library’s downtown building is located adjacent to the proposed development, where the DDA is currently building an underground parking structure.
John Splitt reported that the library board planned to discuss the proposals at their meeting on Monday, Dec. 21. Jayne Miller asked if the board planned to share their feedback formally with the city. Saying she didn’t know the answer to that question, Susan Pollay noted that the library is the most significant property that faces the site, and that whatever development goes there will likely affect future plans that the library might have to rebuild its facility.
The agenda for Monday’s library board meeting allots an hour to the discussion of Library Lot proposals. The board packet includes a list of questions that Pollay provided to library director Josie Parker, from a discussion the two of them had earlier this month. In a note to board members, Parker wrote that the board might find the questions useful as they review the Library Lot proposals. Here’s a summary of the questions:
What are your thoughts about proposals that would bring restaurant or retail uses on the first floor? Design considerations? Kinds of businesses to be considered that would complement the library? Hours of operation?
What are your thoughts about proposals that would bring hotel rooms and conference/meeting space to the library lot? Peak activity hour conflicts with the library? Types of users? Potential benefits or negative impacts to the library?
What are your thoughts about proposals that would use the entire site as open space? Active versus passive uses? Maintenance/management? Potential benefits or negative impacts to the library?
The city established that at least part of the site should be used as a public plaza. What are your thoughts about how this portion of various projects should be developed? Do you have design concerns/ideas? Programming concerns/ideas?
At Friday’s meeting of the RFP committee, Sam Offen reported that he had attended a University of Michigan Ross School of Business class on Monday taught by local developer Peter Allen. Students had made presentations of proposed developments that they’d worked on during the semester – including two teams who designed developments for the Library Lot. He said he’d been impressed by those presentations, and said he hoped that the developers’ presentations would be as impressive.
Allen’s students also made presentations to the library board on Thursday evening. The Chronicle attended that meeting, as well as Monday’s class, and will be reporting on those presentations in a future article.