Marijuana Issue Lingers; DDA-City Deal Stalls

Ann Arbor City Council meeting (Jan. 18, 2011): At its most recent meeting, scheduled a day after the Martin Luther King Jr. holiday, the council was due to consider, for a second time, a first-reading of a licensing scheme for medical marijuana businesses that has been put forward by city attorney Stephen Postema.

After amending the licensing proposal heavily at its Jan. 3, 2011 meeting, the council had decided to postpone the measure until Tuesday’s meeting. After a relatively brief attempt to undertake further amendments, the council decided to postpone consideration again – until its Feb. 7, 2011 meeting. They also voted to extend the moratorium on opening additional marijuana dispensaries and cultivation facilities through March 31, 2011.

Not relatively brief were Christopher Taylor’s (Ward 3) opening remarks about a resolution that would have authorized the Ann Arbor Downtown Development Authority to design a plan to develop city-owned downtown parking lots.

In the end, the council decided to postpone consideration of the DDA parcel-by-parcel proposal – on a 6-4 vote, with some of those voting against postponement looking to vote it down. The effect of the postponement was likely similar to what outright rejection would have been. The clear message was this: Substantial revision to the proposal would be required to gain the kind of overwhelming support the measure will likely need to persuade DDA board members that the council is in agreement with the proposal.

Another piece of major business, which passed quietly, was approval of an overhaul of the ordinance language defining the city’s retirement system. An additional tax abatement for Edwards Brothers received a lot of discussion, but was ultimately approved.

The city also accepted a grant from the Home Depot Foundation for sustainability work, that earned praise for the city’s environmental coordinator, Matt Naud. In other city environmental action, David Stead was reappointed to the city’s environmental commission, and Steve Bean’s decision was announced that he had not sought reappointment to that commission, after a long tenure.

Th site plan for Lake Trust Credit Union at the southeast corner of West Liberty and West Stadium Boulevard was approved. And two additional parcels were added to the land that is protected by the city’s greenbelt program.

As budget season looms, Stephen Rapundalo (Ward 2), who serves on both the city council’s budget committee and the labor and administration committee, gave a status update on the city’s negotiations with its unions.

DDA-Led Parcel-by-Parcel Surface Lot Plan

Before the council was a resolution that would have authorized the city’s downtown development authority to create a parcel-by-parcel plan for the development of downtown city-owned surface parking lots.

At its Jan. 5 board meeting, the Ann Arbor DDA had passed a resolution urging passage of the council resolution, which had been circulated as early as the city council’s Dec. 20, 2010 meeting – Christopher Taylor (Ward 3) had attached a copy of the draft resolution to the council’s meeting agenda, and alerted his council colleagues to it at that meeting.

The proposal before the council would establish phases:

• Phase I – DDA assembles information and brings in development expertise. This includes information from the city’s relevant boards and commissions, Ann Arbor SPARK, and real estate professionals.
• Phase II – Visioning downtown development. This includes building on previous work done, for example, during the Calthorpe process, and would involve work sessions with city council, the city’s planning commission and public engagement.
• Phase III – Taking these ideas and shaping a strategic plan for city council approval. This phase would yield the draft of a “parcel-by-parcel” plan, with the idea that it be incorporated as an amendment to the city’s Downtown Plan.
• Phase IV – Implement the parcel-by-parcel plan. This would entail selecting a specific parcel and developing a request for proposals (RFP) for that parcel. This process would then be repeated for other parcels.

Two key “Resolved” clauses would require the city administrator to place items on the agenda for the council to consider, and would require the city to reimburse the DDA for expenses, if the council were to decline a specific site plan for any reason other than a failure to meet zoning regulations.

RESOLVED, that for items above requiring City Council approval, the City Administrator shall place such items on the agenda of City Council no later than thirty (30) days after the City Administrator’s receipt thereof and determination that such items comply with City requirements. In the event that such item is not voted upon within thirty (30) days of being placed upon the agenda, then at each subsequent meeting of the City Council where the item does not appear on the agenda, the City Administrator during Communications from the City Administrator shall provide a status report as to reasons for the item’s failure to appear on the agenda.

RESOLVED, that in light of the DDA’s expenditures of Phase IV monies in reliance upon City Council’s approval of the Parcel-by-Parcel Plan, any resulting RFP, and the DDA-proposal recommendation, if City Council declines to approve a Parcel site plan for any reason other than the site plan not complying with applicable zoning regulations, then the City of Ann Arbor shall reimburse the DDA for all direct DDA Phase IV costs related to such Parcel.

DDA-Led Plan: Public Commentary

Alan Haber spoke about the issue by characterizing the resolution as delegating responsibility to the DDA and saying that he hoped the council doesn’t do that, but instead puts the question to the people. Haber contended that the DDA has not been open to people’s views. There needs to be an integrated whole view of the area around the Library Lot that includes the old YMCA lot, he said. When this area gets discussed, he complained, the idea of a central park gets left off the map. The people of Ann Arbor should be consulted, he said, not people who are unaccountable.

Haber criticized the consultant’s report on the Library Lot – prepared by the Roxbury Group – as not a good report. He said that at first the underground parking garage bond payments were said to come just out of parking revenues, but now, it appears that the first five years’ worth of bond payments will come from the TIF fund. With respect to the idea of assigning the DDA the task of developing downtown surface lots, he concluded: “Just don’t do it.”

DDA-Led Plan: Council Deliberations

Christopher Taylor (Ward 3) used his opening deliberations to introduce – with a fair amount of granularity – what the proposal would do. He reminded his colleagues that it had resulted from work that the council’s mutually beneficial committee [Taylor, Carsten Hohnke (Ward 5), and Margie Teall (Ward 4)] had done with the corresponding committee of “our friends at the DDA.”

The other piece of the conversation the two committees have been conducting in public view since early summer 2010 has been a renegotiation of the parking contract under which the DDA manages the city’s public parking system.

Before launching into details of the proposal, he began his bid to win support for the proposal by outlining five core principles:

1. It’s good to maximize the utility of downtown parcels of land.
2. City of Ann Arbor staff is burdened by other work priorities.
3. DDA has the expertise and the energy.
4. City assets are under control of the city and will remain under city control.
5. The process has no utility unless there is full-bore public buy in.

Taylor described the recent smoothness of the Zaragon Place II proposal – a residential development being built at William and Thompson – as resulting from the fact that it was deemed to be the right project at the right place. The goal of the parcel-by-parcel plan, he said, is to describe the community’s purpose for the parcels in the plan. Key to the design of the parcel-by-parcel plan, he said, is the idea that it would build on the consensus achieved to date – the work that had been done previously would not be thrown away.

In the proposal, Taylor identified four checkpoints where the city council would have the ability to revise, approve or reject something: (1) issuance of the RFP; (2) selection of a DDA-recommended bidder; (3) ratification of an agreement for redevelopment of a parcel; and (4) approval of the site plan.

In describing the two “Resolved” clauses, Taylor called them “the least we can do” for people that the city wants to work with in good faith.

Adding to Taylor’s remarks was another member of the council’s mutually beneficial committee, Carsten Hohnke (Ward 5). [The third councilmember on that committee is Margie Teall (Ward 4), who could not attend the council meeting due to illness.]

Hohnke noted that one of the primary goals of the proposal is to maximize the resources of the community. He reiterated Taylor’s points that the DDA has the expertise and capacity to do this kind of work. He said it is not a matter of delegating decision-making authority to the DDA – the proposal has a lot of moving parts. He indicated that if his colleagues wanted to postpone their vote, he would support that. But he wanted to make sure there was a thorough conversation.

Sabra Briere (Ward 1) expressed her thanks to Hohnke, Taylor and Teall for their work on the committee. She lamented the fact that the parcels to which the proposal referred – downtown city-owned surface parking lots – had not been identified with the inclusion of a map. She wanted to know exactly what they were talking about before voting. Specifically, she wanted to understand if the resolution before them that night applied to the Library Lot RFP process, which is still pending. Her assumption, she said, was that passing the resolution would mean the DDA would take over a new process for development of the Library Lot – that is, the top of the underground parking garage currently under construction. She said she was not prepared to vote that night.

Tony Derezinski (Ward 2) said that the many checkpoints built into the system gave him confidence. In looking at Phase II of the proposal, which involves a vision for the downtown, he said he wanted to include the effect on the entire region. He said he had some of the same questions as Briere.

Mayor John Hieftje said he thought the city already had a good downtown plan, which was the result of seven years of work, and would be brought to completion with design guidelines that will soon be coming before the city council. Hieftje, who also serves on the DDA board, noted he’d predicted at the DDA board meeting that the parcel-by-parcel resolution would perhaps take a while to work its way through the council. He said he would like some upward bound on the monetary liability for the city expressed in the “Resolved” clauses, and that he would be in favor of a 30-day postponement.

[Hieftje's prediction, made at the DDA's January 2011 board meeting, was reported this way by The Chronicle: "Mayor John Hieftje concurred with Mouat's sentiments, but cautioned that the city council might take a couple of meetings to work through it."]

Stephen Rapundalo (Ward 2) said he had contemplated making a motion to postpone. But that based on the deliberations to that point, plus the questions of his own he’d come with, he was not sure if he wanted to make that motion. [He seemed inclined to vote on it, and to vote against it.] He said by approving the proposal, the council would be placing a priority on planning for downtown parcels. He said he felt that the city already had a pretty darn good idea of what they’d like to put in the downtown, and where – concurring with the mayor’s remarks on the work that had gone into the downtown plan. Rapundalo said he was not sure how the priority of planning in the downtown fit into other planning priorities.

Rapundalo noted that city planning staff time is valuable, and said it’s ironic under the proposal that it’s the DDA’s costs that would be reimbursed. Who’s going to pay our staff costs? he wondered. Rapundalo characterized the DDA as having been an excellent partner on the Library Lot RFP review process – they weren’t comprehensive, but they’d certainly aided the process. [Rapundalo chairs the RFP review committee.] He said that he felt there were a lot of unanswered questions.

Marcia Higgins (Ward 4) said she was not in favor of postponement. The city had already spent seven years looking at the downtown parcels. She noted that the DDA was not saying that it had the expertise to undertake the design of the parcel-by-parcel plan, but rather that they would hire consultants. She said she would just as soon have the city council decide which parcels they felt would be good to develop.

Higgins said there are still several projects on which the city and the DDA had partnered, which are still not finished. She stated her objection to both “Resolved” clauses – she felt she was being “strong-armed.” Regarding the “Resolved” clause that calls on the city administrator to place an item on the agenda, she said it’s not the city administrator’s agenda: “It’s our agenda.” She did not want to put the city administrator in that position, she said.

If the DDA is looking to be put in a developer’s position, Higgins said, they should be treated like other developers. At a city council work session on the topic, she said, DDA representatives said they had the dollars to spend on this. The city council does not reimburse other developers, so why would they reimburse the DDA?

Sandi Smith (Ward 1), who also serves on the DDA board, said there are a lot of advantages to the proposed arrangement. There was a shared vision already for the form, shape, and design of what should be built, she said. But the piece that the community had not yet talked about is function. It is easier to talk about function in the context of multiple lots, she said. It could turn out to be a 20-year process. She cautioned against placing too many functional demands on a single parcel. She characterized the proposal as the next step in developing a shared vision dating back to the recommendations of the residential downtown task force, the Calthorpe study, A2D2 zoning revisions, and design guidelines.

Smith observed that the “penalty phase” of the proposal – the requirement that the DDA be reimbursed – would apply only if the city council rejected a proposal for reasons other than a failure to meet zoning regulations. She called upon Wendy Rampson, head of planning for the city, to clarify that city-owned surface parking lots are zoned D-1 or D-2 and the existing parking structures are zoned D-1. Existing parking structures, Rampson ventured, would likely not be redeveloped, but they might be adapted to additional ground-floor uses.

Smith asked the city’s CFO, Tom Crawford, to explain the financial benefit to the city as new development takes place in the downtown tax increment finance (TIF) district. He clarified that the property taxes on the increment between what a property was worth before redevelopment and after redevelopment is captured by the DDA’s TIF. However, the appreciation on the added value over time is not captured by the TIF – the city, along with other taxing authorities, would get its share of that additional, appreciated value.

Smith indicated that she’d support a 30-day postponement.

Stephen Kunselman (Ward 3) likely did not surprise anyone when he stated his opposition to the proposal – he has expressed his opposition to it from the earliest discussions. Kunselman favors development of city-owned land through sale of the land and attaching deed restrictions. Last summer, during deliberations on extending the purchase option agreement to Village Green for the First and Washington property, The Chronicle reported his comments this way:

[Kunselman] suggested that new direction was to take the design specifications for the project and put them into a deed restriction on the city-owned property, then put it up for sale with those restrictions. Now is the time to try that, Kunselman said.

The approach of public-private partnership doesn’t work, he said, and hasn’t worked for years. He ticked through examples of parcels where he felt that approach had failed, including: 415 W. Washington; the old YMCA lot; and First and Washington.

Kunselman characterized the two “Resolved” clauses as “poison pills.” He said he did not want to tie the city administrator’s hands the way the clauses sought to do.  He said that picking specific uses for parcels – like grocery stores and affordable housing – is not in the purview of elected officials. The proposal would need dramatic changes to win his support, he said.

Mike Anglin (Ward 5) expressed concern about delegating authority to another agency. He noted that the city has its own planning staff. He characterized past experience as the city not having “picked the right horse.” He said he was interested in improving that process. The DDA could serve as an ally, he said, but he hesitated to give them the “whole show.” He said there was not enough public input in the plan early on.

Taylor then made an effort to address the points that his colleagues had cited, calling them “well-raised.” He said it would be useful to contemplate possible costs due to Phase IV monies, and observed that the city would not consider reimbursing a similarly-situated developer – thus acknowledging Higgins’ point. However, he said that would be an odd way to look at it, because there are no similarly situated developers. No developer would go through such a process from beginning to end. Still, he called it a fair point, and said that some articulation of the costs would be in order. He also said that it’s important to identify the specific parcels addressed in the resolution.

With respect to the track record of the city’s RFP process, he said he felt the reason for a lack of success was that the RFPs had not been sufficiently specific. And the proposal before the council was a way to help remedy that by generating RFPs that are cleaner, more specific and reflective of the community’s desires for a particular parcel. Rather than review all the points, he said he felt it would be useful to move for a postponement. He moved a postponement until the March 7, 2011 city council meeting.

Hieftje said he appreciated the possibility of a postponement – the issue could be re-visited by the two mutually beneficial committees.

Higgins said she was not in favor of a postponement. She wanted the council to make clear that it did not agree with what the proposal currently said. The resolution would need to be so re-worked that it would be completely different.

Hohnke asked for support of a postponement. He told Higgins he disagreed with her assessment of the width of the gap in their positions. He didn’t think they were that far apart and respectfully requested that the council give him and the other committee members a chance to recraft the proposal.

Derezinski concurred with Hohnke. He noted that the area, height and placement zoning amendments had required multiple meetings to work through and to get it right. He said it would be workable and they could come to a conclusion.

Rapundalo agreed with Higgins, telling Hohnke that “with all due respect, the gap is there.” He said he saw no point in postponing.

Briere said that Derezinski sometimes called postponing “kicking the can down the road.” She warned that if the council rejected it, instead of postponing it, they need to make clear whether they never wanted to see it again, or if they wanted to see it again, just in amended form.

Higgins said it should go back to the drawing table. The approval on this, she said, should not be a 6-5 vote. She wanted to send a message that it was not acceptable. She added that she had a problem not seeing the development proposal at the same time as the renegotiated parking contract.

Kunselman said he wouldn’t support the postponement. He noted that the DDA could undertake most of the activities outlined in the resolution without any particular city council authorization. He argued for voting on the resolution without postponing, and letting the DDA get on with their business.

In urging his colleagues to support the postponement, Taylor alluded to Kunselman’s phrase “their business” and said that one of the goals is to step aside from that way of thinking. He did not want to make this “their business” but rather wanted the DDA to do this thing “with us.” Taylor ventured that Teall was at home watching the local cable CTN broadcast and hanging on every word.

Outcome: The postponement was accomplished on a 6-4 vote – Margie Teall (Ward 4) was absent. Voting against postponement were: Stephen Kunselman (Ward 3); Marcia Higgins (Ward 4); Stephen Rapundalo (Ward 2); and Sabra Briere (Ward 1). Kunselman, Higgins, and Rapundalo were clear that they were prepared to vote against the resolution, if the motion to postpone had not passed. Voting for postponement were: mayor John Hieftje; Sandi Smith (Ward 1); Tony Derezinski (Ward 2); Christopher Taylor (Ward 3); Carsten Hohnke (Ward 5); and Mike Anglin (Ward 5).

DDA-Led Plan: Coda

After a few other agenda items, including a recess, Anglin brought back the plan for reconsideration – he may have originally intended to vote against the postponement. Had the postponement vote ended in a 5-5 tie, it would have failed, which would have led to a vote on the main motion, which would have also likely failed on the same 5-5 split. The reconsideration vote, which is not a debatable motion, took two tries to get right, when Kunselman and Derezinski apparently voted in the opposite way they intended on the first try, but canceled each other out.

Outcome: The postponement was not reconsidered – it failed to achieve a 6-vote majority. Voting for reconsideration were Kunselman, Higgins, Anglin, Briere and Rapundalo. Voting against reconsideration were Taylor, Hohnke, Hietje, Smith and Derezinski.

Medical Marijuana Licensing

The council was set to consider initial approval of a licensing ordinance for medical marijuana. At its Jan. 3, 2011 meeting, the council had heavily amended the original licensing proposal, which was drafted by the city attorney’s office. Among the key amendments made at the first meeting in January was one that stripped “home occupation” businesses out of the proposal. At the Jan. 3 meeting, the council also increased the cap on the total number of licenses available to 20 for dispensaries and 10 for cultivation facilities. Another major amendment made on Jan. 3 was the creation of a board to govern the issuance of licenses. However, the council delayed voting on the first reading of the proposal. [.pdf of licensing ordinance language at the start of the Jan. 18, 2011 meeting]

Medical Marijuana Licensing: Public Commentary

Dennis Hayes addressed the council by first apologizing for sending them a copy of an uncorrected letter and for forgetting to add a file attachment. He spoke against the proposed marijuana licensing, expressing concerns that it would not help and assist patients and caregivers. The licensing would compel patients and caregivers to surrender their Constitutional rights, he said, due to the various levels of record-keeping required. Licensing would be totally contrary to the city’s history and tradition with respect to medical marijuana, he said. We don’t even know, he continued, how many people are being served with access to medical marijuana. He asked the council to keep foremost in their minds that the disclosure of information by patients and caregivers would incriminate people, when the point of the law should be to help people.

Chuck Ream told the council that he was happy about the progress that had been made, saying there were only a few steps left. He cited a requirement that contact information be conspicuously displayed for the owners and managers of dispensaries and cultivation facilities. He suggested that there was no need to have everyone’s contact information included, and said it would suffice to have just one person listed as the contact person. He also said there is no need to have all members of a corporation listed on the license application.

Ream also contended that the council had agreed to amend the licensing scheme at its last meeting by striking the requirement on labeling packages [6:419.4], but it was still included in the draft. [While the council did deliberate on an amendment to strike some of that language at its previous meeting, the amendment was withdrawn.] Ream also said that the introductory language of the ordinance points to the Michigan Marijuana Act as acknowledging that the federal government does not consider marijuana to be legal, but Ream pointed out that the MMA also says that it’s not legal to ask patients and caregivers to give up their confidentiality. Ream pointed out that the feds are already going after the state of Michigan’s lists of registered patients and caregivers.

Gersh Avery picked up on Ream’s discussion of lists, saying that they are an attractive pool for law enforcement. He wondered if the city of Ann Arbor could have the same quality of resistance as Lansing in deflecting demands by the feds for the names on the lists. Avery stressed that there needs to be an ability to have medical marijuana tested for purity. That includes generating the cannabinoid profile of the product. Testing facilities, said Avery, need to be protected so that they know they won’t be arrested for incidental amounts of medical marijuana that might be found at their facilities. He also call on the exploration of industrial hemp as an additional alternative.

Renee Wolf spoke from her wheelchair. She thanked the council for considering the issue. She told them that if she did not have her medicine she would not be able to manage her medical condition. She told the council that she had multiple sclerosis and was supposed to already be dead. She thanked the council for doing the work they do and wished them a good day.

Medical Marijuana Licensing: Council Deliberations

Council deliberations led off with Sabra Briere (Ward 1) handing around a printed list of proposed amendments.

As they were passed around, Christopher Taylor (Ward 3) sought to clarify what the status of the proposal was for the purposes of friendly amendments, given that it had been postponed from the previous meeting. Amendments are treated by many public bodies as “friendly” – thus not requiring a vote to be implemented – if the amendment is agreeable to the mover and seconder of a motion. The nature of Taylor’s inquiry seemed to get at the question of whether the original mover and second from the previous meeting would determine whether an amendment would be friendly. City attorney Stephen Postema offered that the motion could be re-moved and seconded, if that’s what Taylor wanted to do.

[In recent comments made at a county board of commissioners meeting, Curtis Hedger, corporation counsel for Washtenaw County, indicated this is a non-issue – according to Robert’s Rules of Order, once a resolution is on the floor, it properly belongs to the entire body. If any member of the body objects to an amendment being incorporated as friendly, then it must be voted on. Who moved and seconded the original motion at the previous meeting or at the current meeting is thus immaterial to how friendly amendments are handled.]

Briere’s first amendment dealt with Section 6:417.(2)(d), which handles the kind of contact information required on the proposed licensing application form. The original language, with text proposed by Briere’s first amendment in italics:

6:417.(2)(d) Name, street address, and other contact information of all owners of the dispensary or cultivation facility who are not also patients or caregivers under the Michigan Medical Marijuana Law and, if the owner is a corporation, limited liability company, partnership, or sole proprietor with an assumed name, of all directors, officers, members, partners, and individuals, all of whom are considered collectively to be the applicant for the license.

Briere explained that the purpose was so that patients could retain their anonymity under the Michigan Marijuana Law. Carsten Hohnke (Ward 5) wanted clarification on whether the word “members” would remain. Briere confirmed that it would and that she did not believe it referred to members of the public, or patients and caregivers in a cooperative. Rather, it refers to the part of the ownership of a corporation. Hohnke confirmed this is the case with city attorney Stephen Postema.

Stephen Rapundalo (Ward 2) asked Postema to explain the rationale for the original language. Postema said the rationale was to identify the individuals who are actually the owners. He went on to say that his understanding was that the owners of such businesses would most often be either patients or caregivers. And the practical consequence of Briere’s amendment could be that the city would not have knowledge of the ownership of the business. Postema said that affording anonymity to business owners goes beyond what is set forth in terms of anonymity for patients and caregivers, as set forth in the state statute.

Briere asked Postema if there were any way to guarantee that the information collection on the application forms is protected. Postema indicated that there would be no guarantee. It could be protected against a request under the Freedom of Information Act, he said, but it could not be necessarily be protected from the federal government. He said that some clarity on that situation could be given from a case currently being heard in federal district court by District Court Judge Gordon Quist in Grand Rapids.

Sandi Smith (Ward 1) suggested that if all members of a dispensary are a patient or a caregiver, it might be possible to designate a “responsible party” for purposes of the license application, without identifying their status as a caregiver or patient.

Stephen Kunselman (Ward 3) indicated that he assumed some information for the business would be on other business documents as public information, which Postema confirmed. Postema went on to say that the application form itself did not require anyone to indicate their status as a caregiver or patient. He continued by pointing out that the purpose is more than to collect contact information – it’s to establish a point of responsibility.

Kunselman wanted to know if city staff would be doing background checks on everyone. Postema allowed that it could be cumbersome.

Rapundalo said that if the business information is publicly available on other documents, it negates the argument that the information needs to be protected. He appealed to the similarity of the situation with liquor licenses. [Rapundalo chairs the council's liquor license review committee.] He described how the reason for having all the information is to prevent businesses from playing games about who the responsible party is. He concluded that he saw no problem with the collection of information and characterized the rationale for the requirement as completely appropriate.

Briere said she was looking for a way to protect the rights of the few people who as individuals might own a dispensary or a cultivation facility. She noted that the council was undertaking the creation of licensing from the ground up, and that it is not parallel to liquor licenses, as Rapundalo had contended.

Rapundalo noted that for liquor licenses, anyone who has even the smallest business interest is required to be included in the information that is submitted. Briere wanted to know what level of background check was done for liquor licenses. Rapundalo explained that at the very least a criminal background check is done. He questioned the need for anonymity. Anonymity from what? he wondered. What are they trying to hide? Some of these medical marijuana businesses, he said, are located next to schools and childcare centers. Neighbors, he said, have no problem with the existence of the businesses, but they “sure as hell want to know who’s doing it.” He also contended that public safety officers want to know.

If it’s meant to be legitimate and above board, Rapundalo said, they should be treated like any other medical dispensary. He concluded that it really would be better to wait and let it be sorted out at the state level. The city was essentially “opening up a can of worms” by trying to undertake this effort. He warned of a “quagmire.”

Briere allowed that it would be nice if the state had set forth the regulations. It had come as a surprise to many people to discover that there were medical marijuana businesses operating locally. Now, she said, the city is trying to “close the barn door.” Briere described how she was trying to find a way to reconcile disparate rights: (1) the right to know who runs a business, (2) the right to be protected as a patient, and (3) the right to anonymity.

Some back and forth continued covering points similar to those already raised. Christopher Taylor (Ward 3) weighed in, saying that the language in question had an appropriate purpose. He drew a distinction between a person’s status as a caregiver or patient, which one is in some sense compelled to be, compared to operating a business, which he characterized as a choice.

Outcome on amendment: Support for Briere’s amendment failed, with support only from Smith and Briere.

As it was apparent that the council would be setting itself up for a long and tedious set of deliberations on the amendments, which many councilmembers had only just received, mayor John Hieftje suggested that the measure again be postponed. The council did not clamor to continue deliberating.

Outcome: The medical marijuana licensing proposal was unanimously postponed. The licensing proposal will now be taken up for initial approval again on Feb. 7, 2011. The moratorium on additional facilities in the city to be used as medical marijuana dispensaries and cultivation facilities was extended by the council through March 31, 2011. Final approval of zoning regulations on medical marijuana facilities was rescheduled for Feb. 21, 2011.

Retirement System Language

Before the council was final approval to revisions in the city’s ordinance language that spells out how the retirement system works. The changes were administrative, aimed to ensure compliance of the plan with tax-qualification requirements of the Internal Revenue Code and to improve exactness and clarity of language. Other changes were made at the suggestion of the city retirement system’s board of trustees. [.pdf of ordinance as revised] [.pdf of changes and reasons].

The ordinance change does not change the city’s basic retirement plan from a defined benefit plan to a defined contribution plan. The language changes also do not change the composition of the retirement system’s board of trustees. In 2005, a “blue ribbon” commission – tasked to make recommendations about the city’s retirement board and the city’s pension plan – had called for a change in the board’s composition to be a majority of trustees who are not beneficiaries of the retirement plan and, in particular, to remove the city administrator’s position from the board.

In 2008, a member of the retirement system’s board of trustees, Robert N. Pollack, Jr., resigned from the board in part due to the city’s failure to enact recommendations of the blue ribbon panel. The change in composition of the pension board would require a city charter amendment, which the city council could decide to place before voters. [.pdf of blue ribbon panel report] [.pdf of Pollack's resignation letter]

The city’s retirement program is supported in part by the levy of a retirement benefits millage [labeled CITY BENEFITS on tax bills], currently at a rate of 2.056 mills, which is the same rate as the city’s transit millage. A mill is equal to $1 for every $1,000 of taxable value of a property.

Retirement System: Public Commentary

Thomas Partridge complained that the reasons for the changes in the retirement system language had not been made clear to the public. If the reason for the changes had been to cheapen the value of the retirement benefits, he said, he opposed the change.

Retirement System: Council Deliberations

Council deliberations on the retirement system changes were limited to some remarks by Sabra Briere (Ward 1), who clarified that the impetus behind the changes were motivated by a desire to resolve tax code issues. She stressed that the changes did not affect the rights or responsibilities of participants in the retirement system or the city.

In conversation with The Chronicle before the council meeting, the city’s CFO, Tom Crawford, said that the effort to undertake the revisions to the language had reflected a collaboration between his office, the city attorney’s office and human resources that stretched back 18 months, and had been a major item for the last six months.

Outcome: The city council unanimously approved the changes in the language of the city’s retirement system.

Tax Abatement for Edwards Brothers

The council considered a request for a personal property tax abatement for Edwards Brothers – a book manufacturing company located on South State Street – on almost $4 million worth of new printing equipment. Granting the tax abatement does not mean that Edwards Brothers would be receiving a $4 million tax break, but rather that the new equipment would not be subject to taxation until 2023.

This would not be the first tax abatement that Edwards Brothers has requested and received from the city. The staff cover memo that accompanied the request included the following explanation:

City Council did approve a prior abatement to Edwards Brothers on 11/5/2007. It should be noted that Edwards Brothers was not able to sustain the employments levels identified in the previous abatement in this economy. Edwards Brothers had 480 jobs at this location in 2007. The agreement stated they would retain 95% of the jobs during the abatement. The abatement request filed on October 11, 2010 shows 415 jobs at this facility or a 13.5% decrease in jobs.

In addition to not being in compliance with the terms of the previously granted abatement, Edwards Brothers has started a legal action against the city – in the form of appealing its current real property tax assessment to Michigan Tax Tribunal. If the reassessment were granted, Edwards Brothers would be in noncompliance with the abatement on that ground as well.

The cover memo also indicates that the Edwards Brothers real property is located immediately adjacent to a University of Michigan park-and-ride lot, and it’s felt that UM may have some interest in purchasing the property, which would remove it from the city’s tax rolls. In that light, the city staff built a stipulation into the tax abatement that would give the city the right of first refusal on any future land sale. So if UM offered to purchase the property, the city would have an opportunity to make an offer – presumably with the idea that the city would then sell the land to some other private entity, thereby returning the land to the tax rolls.

City assessor David Petrak briefly introduced some of the background on the request to the council.

Sandi Smith (Ward 1) pressed for some additional explanation. Without additional information, she said, she could not support it. Why was the city considering the application? The answer was that by statute it must be considered.

Stephen Rapundalo (Ward 2) reminded the council that Edwards Brothers has been in Ann Arbor for over 100 years. When the previous abatement was granted, he said, the company was “this close” to moving the operation to North Carolina. Instead, due to the abatement, the company decided to remain in Ann Arbor and preserved around 400 jobs in this community.

With respect to Edwards Brothers not meeting the employment numbers required by the first tax abatement, Rapundalo cited the dire economic times, noting in particular that the book business has not exactly been thriving. So he did not want to hold the job losses against the company. He called Edwards Brothers a long-standing corporate citizen. He also said that if the company left, he would not doubt for a second that UM would pick up the property.

From the city’s CFO, Tom Crawford, Sabra Briere (Ward 1) elicited the fact that the tax abatement would apply to a new press – a typical economic requirement in a very competitive industry, he said. Petrak went on to explain the right of first refusal on the possible sale of the real estate, if Edwards Brothers decided eventually to leave anyway.

City administrator Roger Fraser elaborated in more detail on Crawford’s description of the press to be acquired. It’s particularly suited to quick turnaround on small printing jobs, and offers an opportunity to pick up some additional business for the company. The right of first refusal on the land sale, he said, was an attempt to extract some additional public benefit from the agreement.

Smith pressed for information about what the approximate cost of the land would be, if the city found itself having to contemplate whether to exercise its right of first refusal. Petrak didn’t have that information, but when continued to be pressed by Smith, he allowed that it was between $1 million and $50 million.

Mayor John Hieftje established with Crawford that there’d been no negative impact to the city’s revenues due to job losses at the company. Hieftje said the right of first refusal did not matter to him at all, but the 400 jobs at the company represented good, if not fancy, jobs. They might not earn the average $80,000 salaries that Pfizer workers earned, but they were good jobs. Hieftje also noted that the percentage of property that is abated in the city is minuscule.

[By state statute, the total  assessed value of tax-abated property can't exceed 5% of the assessed value of all the property in the city. When the city council granted a tax abatement to NanoBio in September 2010, the relevant figures were presented as follows: The total state equalized value of all property in the city is $5,286,396,700; the total of abated property is $7,021,729, or 0.133% of the total. The city is thus comfortably under the 5% total abatement allowed by law.]

Tony Derezinski (Ward 2) observed that 415 jobs is a lot of jobs. The fact that there’d been only a 13% drop he characterized as a “great feat.” If it were a new company, he said, they would all be out helping to cut the ribbon.

Carsten Hohnke (Ward 5) expressed his support for the abatement.

Rapundalo said, “We need to pass this one.”

Outcome: The Edwards Brothers tax abatement was approved, over the dissent of Sandi Smith.

Environmental Commission Reappointment

Before the council was the reappointment of David Stead to the city’s environmental commission (EC) for another three-year term. His previous term had expired in August 2010. While the majority of city boards and commission appointments are nominated by the mayor, environmental commission nominations are made by the city council.

In response to an emailed inquiry from The Chronicle, Steve Bean – whose term also expired in August 2010 – wrote that the city council was prepared to include his reappointment in the resolution reappointing Stead.

But Bean informed the council, as well as his colleagues on the commission, of his decision made last week to end his work on the EC. Bean served on the EC for a decade, starting with his appointment in 2000, when the EC was established by a city council resolution. His service on the EC included most recently a turn as chair. Before serving on the environmental commission, Bean served on the city’s energy commission from 1992-2000.

From the city code, the purpose of the EC is “To advise and make recommendations to the city council and city administrator on environmental policy, environmental issues and environmental implications of all city programs and proposals on the air, water, land and public health. Duties include holding public hearings on environmental issues and concerns, and publishing and presenting an annual report on the city’s ‘State of the Environment.’”

Environmental Commission: Council Deliberations

When Carsten Hohnke (Ward 5) introduced the resolution to reappoint David Stead, he confirmed what Bean had earlier emailed to The Chronicle – that he’d decided to step down. Hohnke noted that this meant there is a vacancy on the environmental commission and he invited people to apply. Hohnke reminded his council colleagues of Bean’s record of public service dating back to the energy commission starting in 1992.

Marcia Higgins (Ward 4) recalled that she’d served on the environmental commission with Bean in 2000. Added to the praise of Bean was Stephen Kunselman (Ward 3), who recalled attending graduate school together and playing soccer on the field at Fuller Park.

Outcome: Stead’s reappointment to the environmental commission was unanimously approved.

Home Depot Grant

Before the council was the acceptance of a $95,000 grant from the Home Depot Foundation to (1) create a sustainability framework, and (2) develop a sustainability action plan based on the sustainability framework. The goal of the project – which will include the funding of a temporary employee to provide technical assistance – is to develop a framework of goals, objectives, and indicators, and will include the release of a State of Our Sustainability Report. The city’s environmental commission already produces a State of Our Environment report.

Application for the grant was discussed at the planning commission’s Nov. 9, 2010 working session by city environmental coordinator Matt Naud. In early September 2010, the city of Ann Arbor was one of the finalist cities for a $1 million, three-year sustainability project funded by the Home Depot Foundation. Ann Arbor didn’t make the final cut for that grant – Charleston, South Carolina and Fayetteville, Arkansas were selected.

As part of the site visit conducted by the Home Depot Foundation last year to evaluate the city’s application, The Chronicle was asked by Home Depot representatives to meet with the foundation to discuss the city’s proposal. One issue identified by the foundation representative was the lack of an initiative that wrapped the various city initiatives into a single sustainability plan that would include environmental, energy and planning issues. The Chronicle pointed the foundation to the three-way joint working session of the environmental, energy and planning commissions that had taken place earlier in the year.

Mayor John Hieftje remarked that it was nice to receive grants.

Outcome: The council unanimously approved the resolution accepting the grant.

Greenbelt Acreage

Before the council was the approval of recommendations of the city’s greenbelt advisory commission to purchase development rights on two properties totaling more than $1 million.

The first was a transaction for the development rights on 218 acres, located along Pontiac Trail and Five Mile Road in Salem Township, owned by the Nancy M. Geiger Revocable Living Trust and Rose Ann Geiger Contingent Trust. The city’s cost for the Geiger property will be $728,412.

The second transaction was for land owned by the Lee A. Maulbetsch Trust and Lori M. Maulbetsch Trust, which is 128 acres located along Northfield Church Road in Northfield Township. The city’s cost for the Maulbetsch property will be $521,642.

During the brief deliberations, Stephen Rapundalo (Ward 2) asked Carsten Hohnke (Ward 5) for the rationale behind selection of the properties. One of them seemed rather isolated. He wanted to know what the “grand plan” is. Hohnke, who serves as the city council representative to the city’s greenbelt advisory commission, explained that the strategy is to acquire large blocks. Mayor John Hieftje added that when building a larger block, you have to start somewhere.

Outcome: The council unanimously approved the resolutions authorizing the expenditures of greenbelt funds.

Lake Trust Credit Union Site Plan

Before the council was approval of a site plan request from Lake Trust Credit Union. The credit union plans to construct a new building at the southeast corner of West Liberty and West Stadium Boulevard.

The project had previously won site plan approval at the planning commission’s Sept. 21, 2010 meeting. The project includes demolishing the existing structure and constructing a new one-story, 3,686-square-foot building. The planning staff recommended approval of the site plan. No one spoke during the planning commission’s public hearing on the proposal. On that occasion, the project received two dissenting votes from the planning commission, from commissioners Bonnie Bona and Erica Briggs.

Lake Trust: Public Commentary

Thomas Partridge introduced himself as a consistent advocate for affordable housing and called upon the city to enact zoning regulations to support it.

Lake Trust: Council Deliberations

Outcome: The council unanimously approved the Lake Trust Credit Union site plan.

Communications and Comment

There are multiple slots on every agenda for city councilmembers and the city administrator to give updates or make announcements about important issues that are coming before the city council. And every meeting typically includes public commentary on subjects not necessarily on the agenda.

Comm/Comm: Labor Negotiations

Stephen Rapundalo (Ward 2) gave an update on the status of union negotiations. At the city council budget retreats in December and January, Rapundalo has lamented what he’s called the failure of some of the unions to recognize economic reality. But some of the bargaining units have been cooperative in offering concessions, he said. At the Jan. 18 council meeting, Rapundalo indicated he’d be giving a series of updates – as chair of the council’s labor committee – on the status of negotiations.

Rapundalo began by reviewing how in July 2010 the Teamsters police deputy chiefs unit, the Teamsters civilian supervisors, and Teamsters police professionals had all struck new contract agreements with the city that included concessions like: (1) participation in a new health care plan requiring higher contributions from employees; (2) increases in the employee pension contribution; and (3) a wage freeze. [Chronicle coverage of the July 6, 2010 city council meeting; and the July 19, 2010 city council meeting].

Non-union employees, said Rapundalo, had also taken similar concessions.

The city has been negotiating with its firefighters since February 2010, Rapundalo said, and has used the services of a state mediator on three occasions. The contract with the firefighters expired on June 30, 2010.

A year earlier, on June 30, 2009, the contract with its police officers expired. In that negotiation, Rapundalo said that a request for binding arbitration has been filed under Michigan’s Act 312. Rapundalo reminded his colleagues that the last round of negotiations with the police officers union had also resulted in Act 312 binding arbitration. [The outcome of that arbitration wound up costing the city $1.6 million. Chronicle coverage of that is included in the May 4, 2009 city council meeting report, when the council authorized the funds to pay for the settlement.]

Also expiring on June 30, 2009 was the city’s contract with the police sergeants and lieutenants, reported Rapundalo. The assistance of a state mediator has been requested for those negotiations. The city is also negotiating with its police service specialists – their contract also expired in June 30, 2009.

The contract with its AFSCME union will expire on June 30, 2011, Rapundalo reported. The city has requested to begin negotiations, but has not yet received a reply from that union, he said.

Rapundalo then ticked through at least a half dozen communities where unions have in the last year made concessions on salary, health care and other benefits, and use of furlough days – communities like Royal Oak, Mt. Clemens, Sheldon Township, Canton, Macomb County, and Novi.

Rapundalo concluded by saying that the city continues to negotiate in good faith with all the bargaining units and that he will give updates on progress.

Comm/Comm: Neglected Property

Stephen Kunselman (Ward 3) called attention to the property at 3680 Platt Road, which he said was neglected, as were a number of properties on the east side of the city. Residents are frustrated, he said. The address on Platt Road involved an absentee landlord – such properties have a blighting influence on the community, he said, and he asked the community for patience and support.

Comm/Comm: Budget, Transportation

David Sponseller addressed the council on the issue of budget challenges, and focused on the transportation millage. He said that when he was half as old as he is now, he’d asked the city to launch and operate a “basic bus service.” At the time, he said, a cab owner named A.J. Lalonde had suggested that the city would be better served by simply subsidizing cab rides for residents. Sponseller reported that Lalonde had died in November. Sponseller said he disagreed with Lalonde at the time, but he was beginning to think that Lalonde was right. Sponseller noted that the operating budget had grown by 5,000 times in the last 40 years, compared to the $50,000 initial grant. But despite the comfortable buses, with a well run system, he said, almost nobody rides the bus. None of his neighbors ride the bus, he said. He suggested that enough empty buses had run to give every person in the Western Hemisphere a three-mile ride.

Referring to the city’s transportation program manager, Eli Cooper, Sponseller said that all the Eli Coopers in the world would not be enough to break up people’s love affairs with their cars. People’s reaction to higher gas prices and global warming was to purchase more fuel-efficient cars, not to opt for the bus. Rather than continue to spend money – $700 million so far – on a failed experiment, he suggested, the AATA should abandon the development of its current county-wide plan, face up to reality, and focus on a very basic system: (1) one that serves the Ypsilanti-UM connection during rush hour; (2) a circulator between public housing units in Ann Arbor and Ypsilanti; and (3) a dial-a-ride service that would use cross-over, fuel-efficient vehicles.

Sponseller concluded by suggesting a charter amendment that would cut the transit millage in half and apportion the rest of the millage to the city’s general fund. [The city's transit tax is currently levied at a rate of just a little over 2 mills. Each mill of tax levied in Ann Arbor brings in roughly $4.5 million. Without regard to the impact on the transportation system, Sponseller's proposal would thus net the city's general fund around $4.5 million.]

Comm/Comm: NAP Volunteer

William Price was recognized with a mayoral proclamation for his work using a chainsaw to help clear pathways in the Argo Nature Area. Price is a volunteer with the city’s natural area preservation program, or NAP.

Comm/Comm: Honoring Martin Luther King’s Legacy

Thomas Partridge introduced himself as a recent candidate in the Democratic primary election for the 18th District of the state senate. He called this a critical time in the history of the nation, the state, and the city, and called for leaders – on the day after Martin Luther King Jr. Day – to put forward an agenda that would support the most vulnerable in our society. He called on the council to pass a resolution asking the state to stop cuts to revenue sharing.

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

Absent: Margie Teall

Next regular council meeting: Feb. 7, 2011 at 7 p.m. in the Washtenaw County administration building, 220 N. Main St. [confirm date]