Ann Arbor Downtown Development Authority board meeting (May 2, 2012): The one action item on the board’s agenda was a resolution directing its operations committee to start applying demand-management principles to the pricing for permits in Ann Arbor’s public parking system. The resolution, which passed unanimously, notes that the goal of the pricing strategy is to attract patrons to those structures that are located farther away from the University of Michigan campus.
One of those structures farther west of the campus is the new underground parking garage on South Fifth Avenue, which is nearing completion. The garage, which the DDA is currently calling the “Library Lane” parking structure, is now expected to open by the time the art fairs begin, which this year fall on July 18–21. South Fifth Avenue between Liberty and William is expected to re-open by Memorial Day.
A characterization of that timing as “on schedule” was disputed during public commentary by Ali Ramlawi, owner of the Jerusalem Garden restaurant. Jerusalem Garden is adjacent to the construction site. Ramlawi noted that the structure was originally due to be completed by August 2011.
The future use of the top of the underground garage was the subject of public commentary from advocates who’d like to see it used as a green plaza. That suggestion was met with remarks from mayor John Hieftje, who sits on the DDA board, with a description of his expectation that three major parcels would soon be incorporated into the city’s park system – 721 N. Main, 415 W. Washington, and the MichCon property (located between the Amtrak rail station and the Huron River near the Broadway bridges). Hieftje’s point was that the additional financial burden for the maintenance of those parcels as parks might impact the city’s ability to add a downtown green plaza to the park system.
Requests for better information about the parking system and suggestions for disseminating information about the availability of open parking spaces were topics of additional public commentary.
Although it was not an action item, the board discussed a draft policy on supporting “brownfield” projects – a policy prompted by discussions at the board’s partnerships committee over the last few months. [.pdf of draft DDA brownfield policy]
The committee has been discussing a proposal by Dan Ketelaar for support of a proposed development at 618 S. Main, which received a positive recommendation from the Ann Arbor planning commission on Jan. 19, 2012. If the project moves forward, the 7-story building would include 190 units for 231 bedrooms, plus two levels of parking for 121 vehicles. Ketelaar has estimated that the tax on the increment between the current valuation of the property and the final built project would yield around $250,000 a year in TIF (tax increment finance) revenue to the DDA. If adopted as it’s currently worded in the draft, the formula in the policy would translate into up to $625,000 of support for 618 S. Main.
The board also received updates on the third-quarter financial statements for the DDA, as well as an update on the Connection William Street planning project.
The DDA manages the city’s public parking system under a contract with the city of Ann Arbor that ensures the city receives 17% of the gross parking revenues, which amounts to around $3 million annually.
So parking is typically a topic at DDA board meetings that receives a great deal of time and attention. The May 2, 2012 meeting was no different. The construction of the new parking garage on South Fifth Avenue was highlighted at the meeting in three ways: (1) public comment on future planning for the top of the underground parking garage from advocates of a public park to be constructed there; (2) a resolution to help foster usage of the new garage through differential pricing; and (3) and the regular update on construction progress.
Parking Structure Park
A request for proposals (RFP) process that could have led to the selection of a development project on the top of the underground parking structure was terminated by the Ann Arbor city council on April 4, 2011. The structure includes reinforced footings designed to support future development on the site.
Parking Structure Park: Public Comment – Library Green
Will Hathaway told the board that he was speaking on behalf of group of Ann Arborites advocating for a downtown public park – a Library Green on the Library Lot. He allowed that there are other competing views for the future of the Library Lot. He also allowed that there are also concerns about the possible impact of public open space in the downtown.
He reviewed the site plan for the top of the parking structure, given the absence of any future development on the top of the lot. The design includes 40 parking spaces, he said.
Hathaway then reviewed the configuration of the spaces that are currently planned for the top of the structure. He suggested that a public plaza be created now and proposed a configuration that would leave 18 parking spaces, but would allow for a plaza too.
He invited the DDA board to think about an interactive water feature or an ice rink or a piece of public art like The Cube as elements of the plaza. He reported that he’d been on a tour of the underground garage, which is nearing completion, and he allowed that in some ways it’s architecturally beautiful.
But it needs a better “crown,” Hathaway said, than a surface parking lot.
Eric Lipson introduced himself as a resident of Ann Arbor and former city planning commissioner. He told the board he was also wearing the hat of a Library Green advocate. He explained that as general manager of the Inter-Cooperative Council, he was also representing a stakeholder in the Connecting William Street project. The ICC houses 600 members, and its headquarters is located on East William Street, within the area of study for that project.
Lipson reminded the DDA board of the Calthorpe process that the community had engaged in around 2005. He described it as an extensive process that had included a series of design charettes. One of the ideas that had emerged was the need for a public plaza, or a “town square.” The Calthorpe report mentions a town square over a dozen times, Lipson said, and depicts such a square on the Library Lot.
Lipson called it a perfect time to revisit the question of what to put on top of the underground structure. He told the board it was doing an excellent job on the Connecting William Street project. The DDA’s planning and research specialist, Amber Miller, and executive director Susan Pollay were doing a good job, he said. The speaker series that Concentrate is sponsoring as a part of that is very useful, he said.
Right now the plan for the top of the Library Lot is for it to be a surface parking lot [until some other possible future use is identified]. But surface parking lots are anathema to active downtowns, he said. He encouraged the DDA board to put something on the site that is not a surface parking lot. He acknowledged the concern about crime and panhandlers, but characterized that as a broader issue. The community shouldn’t sacrifice the idea of a plaza because of the issue of the homeless. He said that as he moved through downtown Ann Arbor walking along the sidewalks, he was approached more and more by panhandlers – but no one is suggesting we abolish sidewalks.
Ray Detter, during his report from the downtown citizens advisory council (CAC), said that Lipson and Hathaway had spoken to the advisory council at its meeting the night before. Detter said the CAC agreed with them that a plaza space should be part of the plan. But he said that a plaza space has always been part of the plan. The CAC agreed there should be a clear-cut process for using Library Lane when it was finished. [Library Lane is the mid-block cut-through from Division Street to Fifth Avenue just north of the current location of the downtown district library.] Detter said the CAC had affirmed a long-held commitment to tax-producing private development on top of the parking garage. The CAC has always believed that whatever goes on the top of the parking garage should benefit the library, Detter concluded.
Parking Structure Park: Board Response – Three Other Parks
Responding to the remarks of Library Green advocates about the perceived problem of panhandling as an argument against additional open space in the downtown, mayor John Hieftje noted that panhandling had been the focus of a task force that had done some work on the issue. He mentioned that people would start seeing posters appear that give suggestions for ways to help without giving money to a panhandler.
[By way of background, the city of Ann Arbor previously staffed a downtown beat patrol, which many officers chose to cover by bicycle. With the reduction of the police officer force, that specific patrol assignment has been reduced to the point of elimination. Many people have contended that there's an increased panhandling and other nuisance-type crimes in downtown Ann Arbor and that it can be attributed to the elimination of the downtown beat patrol.]
So in connection with panhandling, Hieftje then took the occasion to point out that later in May, the city council would be likely to approve a budget that does not cut 9 police officers as had been planned last year, but would add one, for a net gain of 10. He also pointed out that some additional personnel would be added as part of a recruitment program.
[In May 2011, the city council approved a budget that eliminated six police officer positions, with a plan to eliminate nine additional positions this year. So compared to 2010 budgeted levels for sworn officers, preserving the nine positions and adding one leaves Ann Arbor police officer staffing at five fewer for next year. That doesn't include the proposed recruitment program, which calls for potential new hires to the department to work under the direction of sworn officers.]
Continuing his remarks on panhandlers, Hieftje noted that most of them are not homeless.
Hieftje then pitched a framework for discussing the future of the top of the underground parking garage – which Library Green advocates are suggesting should become a public park. Hieftje contended that it should be considered in the context of other significant anticipated additions to the city park system.
Hieftje indicated that the city council’s May 7 meeting would include a presentation about a Federal Emergency Management Agency (FEMA) grant for demolition of buildings on the city-owned 721 N. Main property.
By way of additional background, Jerry Hancock, the city’s floodplain manager, provided some explanation about the grant, which has been awarded but still awaits some steps on the city’s part. One of those steps is updating the city’s All-Hazard Plan, which had expired, delaying the award of the grant by FEMA.
From The Chronicle’s March 5, 2012 city council meeting report:
Hancock responded by saying there’s only one other site on which the city has moved forward with FEMA applications: 721 N. Main St., a city-owned property.
The city had received approval of a grant to remove two storage structures in the floodway on the 721 N. Main site, but that grant has been delayed because the city’s All-Hazard Plan has expired. The city’s emergency manager, along with the city attorney’s office, is updating that, Hancock explained. Once that All-Hazard Plan is complete, the city will be able to move ahead with that grant. However, no other sites besides the two storage structures at 721 N. Main have been identified for FEMA applications, Hancock said.
At the DDA board meeting on May 2, Hieftje also said there was a real push being made to get the area across Main Street from the 721 N. Main property cleaned up – it’s the site of Avalon Housing‘s Near North affordable housing project, which currently has several vacant houses on it. Hieftje indicated that the city would be pursuing a state Natural Resources Trust Fund grant to make the 721 N. Main site the first of the greenway parks. It would have a linkage across Main Street under the railroad tracks to the countywide Border-to-Border Trail, he said. City staff would be investing time in planning for that, he said. Washtenaw County [parks and recreation], Hieftje reported, had agreed tentatively to participate in the project by making a match for the Natural Resources Trust Fund grant.
[Hieftje appears to have somewhat overstated the currently expected level of participation by the county's park and recreation program. In a phone interview, Bob Tetens – director of Washtenaw County parks and recreation – told The Chronicle that there was not anything yet on the table in front of the parks and recreation commission. He indicated that there'd been conversations with the city about the project, and that the idea of connecting the 721 N. Main property would be a good fit with the Connecting Communities grant program – a $600,000 annual program over five years, for a total of $3 million. Tetens also said that a project that's already partly funded through another source (like the state's Natural Resources Trust Fund) would enhance a project's application. However, there are more applications for various projects every year than Washtenaw County parks and recreation can fund through the Connecting Communities program, Tetens said.]
Hieftje characterized the land at 721 N. Main as something that the city needs to do something with – because the city doesn’t want to contribute to blight. [The property was previously the city's fleet maintenance yard, but was closed when the Wheeler Service Center opened in 2007.] He also reported that he’d been working with community members on the city-owned 415 W. Washington property. He said that not much progress has been made because of the condition of the old building. By council resolution, he said, that parcel will be a greenway park. [The council resolutions to which Hieftje is referring don't appear to commit the entire parcel to becoming a greenway park.]
Environmental cleanup work is being done on the MichCon property, located between the Amtrak rail station and the Huron River, near the Broadway bridges. Hieftje stated he hoped that would also become a park – across from the new whitewater features to be constructed in connection with the Argo Dam bypass, now called the Argo Cascades.
So as people start to think about adding parks, he said, people need to think about how to maintain them. According to the park advisory commission, Hieftje said, the city is at the limit of being able to maintain parks. Because the city already owns the 721 N. Main site, and because the MichCon property is one the city has wanted for 40 years to be cleaned up and added to the park system, those would be “first in line,” he stated. The capacity to care for another park will stretched, Hieftje said. He recommended to people who are working on the Library Green to take that into account: How will we maintain the park? Also, Hieftje invited Library Green advocates to think about how that fit into the competing interests of three large new parks that will need planning, development and maintenance.
Hieftje also said that he’d be recommending to the park advisory commission that they take up the issue of how to re-design Liberty Plaza [at Division and Liberty streets] so that it becomes a more active center and not something that people avoid. It’s fortunate that First Martin cares for the park, Hieftje said. [First Martin is an Ann Arbor firm that owns the building adjacent to Liberty Plaza.]
Picking up on Hieftje’s comments, Sandi Smith noted that the Connecting William Street committee members would have the future of the top of the underground parking garage on their radar as well, and noted that Liberty Plaza is within the boundary of the study area. Trying to maintain and activate two parks within the same block seems to be a difficult chore, she said.
Responding to Hieftje’s comments during the second opportunity for public comment at the end of the meeting, Jerusalem Garden owner Ali Ramlawi suggested that one idea of funding the maintenance for a public park plaza on top of the parking garage would be to take a fraction of a percent of the parking revenues collected from the structure.
Parking Demand Management
Parking demand management is basically a strategy of differential pricing – higher for higher demand areas and lower for lower demand areas – to try to optimize the available parking spaces in the system. At an April 9, 2012 city council work session, Ward 1 city councilmember Sabra Briere had asked DDA board member Roger Hewitt when residents could expect to see demand-management strategies implemented. At that work session, Hewitt had been presenting the DDA annual budget to the council.
Parking Demand Management: Resolution on Permits
At their May 2 meeting, the DDA board considered a resolution authorizing its operations committee (aka bricks & money and transportation committee) to use demand-management strategies to price monthly parking permits in Ann Arbor’s public parking system. The goal of adjusting monthly parking permit rates is to expand campus-area parking to structures other than those immediately adjacent to the University of Michigan campus. In broad strokes, “demand-management strategies” means pricing the most desirable parking options higher than those that are less desirable.
The move comes as the opening of the new underground parking structure on South Fifth Avenue, offering around 700 total spaces, is set to open by the start of the Ann Arbor art fairs, which this year run from July 18-21. Monthly permits for some of the spaces will be offered at the new structure, which will add to the five public parking structures where permits are available: Ann & Ashley, Forest Avenue, Fourth & William, Liberty Square (Tally Hall), and Maynard.
Under a demand-management strategy, prices of monthly permits at the underground parking structure are likely to be lower than at other structures.
Hewitt noted that the DDA has been focusing on the completion of the new underground parking garage and has not had time to pay as much attention to parking demand-management initiatives.
As the DDA gets closer to opening the new underground garage, Hewitt said, the idea is to look at carrots and sticks for evening out the usage in the system. Rather than forcing people to move their permits from structures in high demand to those that are in lower demand, the idea is to offer incentives. There’s a number of ideas to relieve the pressure on the structures closest to campus – Forest, Maynard and Liberty Square. The idea is to move those folks into the new underground structure or the Fourth & William structure, he said.
The resolution authorized the operations committee to use parking demand management to alter rates to even out the demand in the system, he said.
Newcombe Clark questioned why there was an explicit mention of “two blocks west” in one of the “whereas” clauses. Hewitt assured him that the intent was to explore parking demand management for monthly permits throughout the system, without any particular boundary.
Outcome: The DDA board unanimously approved the resolution authorizing the operations committee to use parking demand management strategies to alter monthly parking permit rates.
Parking Demand Management: DDA-City Contract
The Ann Arbor Downtown Development Authority manages Ann Arbor’s public parking system under contract with the city. The DDA has the unilateral ability to set parking rates. To implement an increase, the DDA is required under the contract to complete a series of steps designed to ensure adequate notice and public input before implementation of a rate increase. From the contract [emphasis]:
Notwithstanding the foregoing, DDA shall not implement any increase in the Municipal Parking System’s hours of meter operation or parking rates intended to persist for more than three (3) months without first: (i) announcing, and providing written communication regarding, the details of such increase at a meeting of the DDA Board; (ii) providing all members of the public an opportunity to speak in a manner similar to a public hearing before the DDA Board at its next regularly scheduled meeting on the subject of the proposed increase (“Public Hearing”); and (iii) postponing any vote on the proposed increase until at least the regularly scheduled meeting of the DDA Board after the Public Hearing
The changes to the monthly permit system, which Hewitt characterized as “incentives,” do not appear to involve rate increases, but perhaps only decreases. So the various steps outlined in that contract clause would not apply.
Parking Demand Management: Public Comment
Edward Vielmetti addressed the board during the second opportunity for public commentary, and focused on the topic of demand management pricing. He ventured that sometimes people don’t have much of a choice as to where they can park and they pay whatever price they have to pay – because they don’t know much about what their alternatives are.
In addition to improved communication about availability of spaces, Vielmetti asked for better communication about information on the parking system performance – as opposed to simple pronouncements about the parking system being at full capacity.
Vielmetti also addressed the board at the start of the meeting on the topic of relatively low-tech ways to get parking space availability information to people who need it – people who are looking for a place to park.
He shared an experience he had visiting Toledo to watch the Toledo Mud Hens play. It’s usually easy to find a place to park, he said, and if the lots near the stadium are full, there are usually other lots that are easy enough to find. But on the occasion of the visit he described to the DDA board, the Detroit Tigers were playing, and all the lots were filled up. So he had to navigate using his wits and found the farmer’s market, which offered free parking.
Part of the challenge of parking in an unfamiliar place, he said, is not knowing the lay of the land. You have to figure out if the place you want to park is legal, and you might not know if the structure you know exists is already full. He said that what was fascinating about Toledo was not any kind of fancy smart phone application that anyone had running, but rather a sign at the border that advised people to tune their radios to AM 1640. That’s a station that tells you how much traffic was on the roads to get to the stadium, or to get to downtown Toledo from the Michigan border.
The radio station, Vielmetti said, would give estimated travel times to different places, on a constant loop. Every few minutes the information would be updated. It’s a low-power AM station that you can only hear in Toledo, he said. He suggested that setting up such a station would be within the means of any municipality or a public body like the DDA, and the radio station could tell people a little bit about what they need to do in the downtown. The DDA already has realtime parking information available, so potentially that information could be broadcast every three minutes and listeners could hear something like “All the lots have spaces available,” or if the Fourth and Washington structure is full, then it could advise people to use the underground garage.
Vielmetti said he wanted to revisit the realtime parking information issue that he’d raised with the DDA back in 2009. This time around, he said, he didn’t want to look at “fancy things” that only people with fancy phones could use, but something that people could tune into from their car radio.
Parking Demand Management: Parking Report
A report of the monthly parking figures are a standard part of every DDA board meeting. Generally, the message conveyed by Roger Hewitt is that revenues are up in excess of the rate increase, which he interprets as an indicator that demand for parking is increasing.
For the past few months, The Chronicle has charted out revenues and hourly patrons in the system as reflected in the DDA’s monthly reports over the last couple of years. Hourly patrons don’t include people who park at on-street meters, but rather those who pay hourly at a parking structure – as opposed to parking there using a monthly permit.
Parking Garage Construction
At its monthly meetings, the DDA board typically receives a report on the progress toward completion of the new underground parking garage on South Fifth Avenue. It will offer around 700 spaces underground. The surface lot that existed there previously offered 192 spaces.
Parking Garage Construction – Public Comment
Ali Ramlawi introduced himself as the owner of the Jerusalem Garden and a resident of Ward 5 – but he allowed that board members already knew who he was. [Ramlawi has addressed the board previously to raise essentially the same issues he did at the May 2 meeting.]
He described the construction of the underground parking structure as stretching now into its fourth calendar year, but was not yet complete. [The ceremonial groundbreaking took place in October 2009.] He reviewed some of the issues he’s raised before – loss of income, disruption in deliveries, forced evacuation [due to the emergence of a sinkhole]. He questioned how the construction contract was awarded to the Christman Company and contended that the choice of subcontractors by Christman had raised some eyebrows. He contended that the original contract with Christman had no penalties for being late and no reward for finishing on time. No one is held accountable, he complained. With the powers and budget the DDA board members have, they need to do a better job of awarding contacts, he said. If this were the private sector, he contended, someone would have been fired. Where are the penalties for the lateness? he asked.
He told the board that when they have the ceremonial opening celebration he would not be around for it because he didn’t want to “puke over [himself].”
Parking Garage Construction – Board Report
John Splitt gave the update on the construction of the underground garage. Work continues on the mechanicals. The most exciting part of things, he said, is that the backfilling on the plaza level is going along nicely and the waterproofing is almost complete. Backfilling on the “bridge” section, which will allow the re-opening of South Fifth Avenue, is almost complete, he said. Curbs are beginning to be formed on South Fifth Avenue. It’s on schedule to reopen by the end of May, and it’s anticipated that the underground garage will be open by the time that the art fairs start, he said. The fairs run from July 18-21 this year.
During the second opportunity for public commentary near the end of the meeting, Ali Ramlawi objected to Splitt’s use of the phrase “on schedule to open,” saying that the project is a year behind schedule. He contended that saying it was on schedule undermined the DDA’s credibility.
Following up on Splitt’s construction summary, Newcombe Clark asked that the depiction of the Lincoln Continental on the meeting room’s wall be explained, so that people did not think the DDA was getting into the sponsorship business. Splitt explained that it’s part of the underground garage wayfinding system – which will use both colors and four different automobiles to identify floors. The car is a mockup of a wayfinding sign.
“Brownfield” Policy Draft
The DDA board considered a draft policy on supporting “brownfield” projects – a policy prompted by discussions at the board’s partnerships committee over the last few months. [.pdf of draft DDA brownfield policy] The board was not expected to act on the policy, and did not vote.
“Brownfield” Policy Draft: Background
The DDA’s partnerships committee has been discussing a proposal by Dan Ketelaar for support of a proposed development at 618 S. Main, which received a positive recommendation from the Ann Arbor planning commission on Jan. 19, 2012. The 7-story building would include 190 units for 231 bedrooms, plus two levels of parking for 121 vehicles. Ketelaar has estimated that the tax on the increment between the current valuation of the property and the final built project would yield around $250,000 a year in TIF (tax increment finance) revenue to the DDA.
Ketelaar is asking that the DDA pledge 80% of its TIF capture money for six years – about $1.3 million – to support certain aspects of the project in connection with the state’s Community Revitalization Program. The CRP is the successor to the brownfield and historic preservation tax credit programs. In order to approve the tax credit, the state would like to see a commensurate commitment from local units – and Ketelaar is proposing that it take the form of the DDA’s support.
At the April 11, 2012 DDA partnerships committee meeting, one of the points that resonated strongest with some board members in favor of supporting the 618 S. Main project was the ability of the contribution to leverage state money that would otherwise not be invested in Ann Arbor. The amount of money from the state that could be leveraged is in the range of $3 million.
Under Ketelaar’s proposal, taxes on the property would still need to be paid. In other words, the DDA would not simply waive its tax capture on the property. The 618 S. Main project would be reimbursed for a portion of those taxes it would normally owe. In the draft policy, that’s reflected in the following passage: “The DDA will not forgo its TIF capture from a project; the DDA may elect to provide a grant to a project utilizing its funds, or it may elect to provide all or some of its support using such in-kind elements as access to parking for contractors or construction staging.”
The maximum amount of a possible grant described in the draft policy is “calculated by estimating 25% of the total TIF captured by a project over ten years.” In the case of the 618 S. Main project, that amounts to .25*(10*$250,000) = $625,000. That’s about half what the 618 S. Main project is requesting.
The DDA board has heard about the proposal on several occasions – first at the full board meeting on Feb. 1, 2012, and at four subsequent DDA partnerships committee meetings. DDA board members are cautious about the precedent that such a pledge might set, and the appropriateness of the DDA’s role at this early stage in the project. (Ketelaar has not yet acquired the land.) At the March 28 partnerships committee meeting, DDA board member Newcombe Clark expressed concern that, depending on the precise role defined for the DDA’s participation, the DDA could effectively be artificially inflating land values.
“Brownfield” Policy Draft: Board Discussion
Sandi Smith introduced the draft policy. Looking at the 618 S. Main project caused the partnerships committee to take a really hard look at the reasons why the DDA would participate in the project at all, some or a lot, she said. The committee felt that it was struggling with the idea of creating a precedent. So the committee wanted to make a strong policy statement that the DDA would be able to honor for the 618 S. Main project, as well as for projects that came after it.
She walked the board through some of the highlights of the draft policy. She said she was looking for board-wide feedback for further work by the partnerships committee.
Roger Hewitt said that a lot of his concerns were addressed by the draft policy – about the subjectivity of picking projects. He liked the idea of getting rid of as much subjectivity as possible. The idea of a state match was good, he said, as well as the idea that the only costs to be reimbursed would be public infrastructure, not parts of the development itself. He also wanted to make sure that the DDA would not be paying out more than the DDA would receive in TIF capture.
Smith assured Hewitt that nothing would be paid until the taxes have been paid. The DDA would never be in a position of being ahead of the taxes it had received. Hewitt said his concern was that the amount of the grant could become a larger percentage of the TIF, if the value of the project actually went down. He wanted some way to protect against that. Keith Orr suggested some kind of clause that states that while the grant amount would be based on the estimated value of the TIF capture, the payout would be capped by the actual value.
Russ Collins noted that the scenario that Hewitt was describing involved possibly paying out more than anticipated, but not more than the DDA was capturing. John Splitt noted that there could be flexibility to pay out sooner than the actual TIF capture was received, so that’s where the issue could arise – if it were paid out on a schedule sooner than the 10 years.
Splitt wondered if 25% was enough to make a difference in the project. Bob Guenzel clarified that “enough” meant whether it was enough to actually provide the matching leverage for state funds. Smith responded by saying that for past projects, the Liberty Lofts project [a residential development at Liberty and First] had been the most significant one – and that had amounted to 17% of the TIF over 10 years. Taking all that into account, she wondered if 25% was too high or too low.
Keith Orr agreed with the idea of making it as objective as possible and focusing on public infrastructure.
Newcombe Clark said he was happy that the DDA has continued to be creative even when the organization doesn’t have a lot of money. He appreciated the patience of Ketelaar, watching the “sausage making.” Clark said he’d enjoyed the process. Maybe the DDA didn’t make everyone happy or didn’t get it right the first time, he said – that’s always possible. He knew it was not perfect, but he felt that as a group the DDA board could pick it back up and shine it up some more. He said he’d had the fear that for a few years there’d be nothing the DDA would be able to do [because of diminished financial capacity] and he’d been proven wrong.
Collins quipped that he found Clark’s positive and optimistic attitude completely inappropriate, which drew laughs around the table. On a more serious note, Collins said that the DDA had structured itself as an organization that tends to assets. That causes a certain amount of fiscal conservatism. The draft brownfield policy, therefore, is very conservative, he said. But by being conservative, the DDA could miss the chance to be a stimulus to other private investment, which is the core of the DDA’s mission, he said. That’s the constant tension a DDA has, he ventured.
Clark suggested that based on past experience, once the DDA creates policies, it lays down the rules of engagement, and then people will line up with proposals. Collins continued with his friendly ribbing of Clark, saying that Clark’s unmitigated optimism was completely out of character.
During his report from the downtown citizens advisory council (CAC), Ray Detter congratulated the DDA on the formulation of the draft policy. He said the CAC supports the project and is confident the DDA is developing a consistent policy that will be fair to everyone.
Outcome: The draft policy was not before the board for a vote. It will be subjected to further discussion by the partnerships committee.
Third Quarter Financials
Roger Hewitt reviewed the financial statements for third quarter, through March 31, 2012. The DDA’s accounting system includes four funds: the TIF (tax increment finance) fund, which gets its revenue from tax capture; the parking fund, which receives revenue from the public parking system; the parking maintenance fund, which gets revenue through transfers from the parking fund; and the housing fund, which gets revenue through transfers from the TIF fund. [.pdf of DDA financial picture through March 31, 2012]
The tax increment finance (TIF) income is anticipated to be $200,000 below budgeted – $3.7 million instead of $3.9 million, Hewitt reported. The drop, he said, is primarily due to changes in personal property, not changes to real property. Personal property depreciates quickly, he said. Operating expenses will be about $250,000 below budget, primarily from less use of consultants and lower administrative expenses. Only about $45,000 in capital expenses are shown so far, he said, but he anticipated that number would be right around $1 million at the end of the fiscal year.
That figure will come from the Fifth and Division streetscape improvements project and a portion of the “Library Lane” parking structure. Overall, he said, the DDA had budgeted for around a $1.5 million use of fund balance. Now, said Hewitt, it looks like it would be around $1.44 million of fund reserves that would need to be used. Hewitt pointed out that the use of fund balance was planned, and the natural consequence of accruing capital funds to pay for major construction projects and then using the money.
Revenue for the public parking system is anticipated to be around $17 million, or about $800,000 more than anticipated. The rate increases had been budgeted into the anticipated revenue, he said, so he attributed the additional revenue to increased demand. He stated that the DDA continues to see strong growth in demand for parking. It’s fortunate that the “Library Lane” parking structure is coming on line when it is, because the system is at capacity, he said, at least in the campus area and at the Ann Ashley parking structure.
Direct operating expenses are expected to be $800,000 less than expected. That has to do with the fact that Republic Parking – the DDA’s contractor for day-to-day parking operations – is doing a good job at belt-tightening and is efficient in its operations, Hewitt said. He commended Art Lowe, Republic Parking manager, and his staff for keeping costs in line. Overall, it looks like the parking fund will be around $1 million to the positive.
Parking maintenance has received around $2 million, he said, which is right where the DDA anticipated being. The DDA has not spent money on maintenance that it would have ordinarily done, but the DDA is so far ahead on preventive maintenance that it was able to scale back without any concern about the structural integrity or long-term durability of the structures, he said. So parking structure maintenance has been conservative. There’s been about $1.6 million less spent on maintenance than what had been budgeted. That money will be there for future years as needed, Hewitt said.
The only income into the housing fund was due to interest. About $500,000 had been budgeted for Avalon Housing’s Near North project, but that project has not gone forward. The $500,000 is not due to be paid until Avalon has a certificate of occupancy, and that shows as under budget on the expense side for the housing fund.
Summarizing the financial picture in terms of fund balances, Hewitt gave the following round figures: TIF fund – $6.5 million; housing fund – $1 million; parking fund – $2 million; and parking maintenance – $1.8 million. Total fund balance is $11,444,000, he said. That will certainly be drawn lower as the Fifth and Division streetscape and the “Library Lane” parking structure projects are paid off, he said, but the DDA still has adequate cash.
Communications, Committee Reports
The board’s meeting included a usual range of miscellaneous reports from its standing committees and the downtown citizens advisory council, as well as public commentary. To the extent that significant issues are not already included in the other parts of the meeting report, we include them here.
Comm/Comm: Connecting William Street
Joan Lowenstein gave an update on the Connecting William Street project – an effort the DDA is making under the direction of the city council to find alternate uses for city-owned parcels currently used for surface parking. Lowenstein said that the DDA’s leadership and outreach committee is continuing and increasing efforts to bring different “scenarios” to the public. The scenarios won’t be exact building drawings, but there would be more detail in them, she said. In mid- to late June there’d be something concrete to bring to the public.
Focus group meetings will continue in an effort to shape scenarios. A meeting with members of the city’s park advisory commission had taken place. On May 16, the committee would hear the market analysis findings that will shape the scenarios, based on survey feedback and the market analysis. Throughout the month of June, the committee was moving ahead to have something to show people and get feedback.
The next event in the Concentrate speaker series, focusing on land-use economics, will take place on May 17 at 5 p.m. at Conor O’Neill’s, Lowenstein said.
Comm/Comm: Commuter Challenge
Comm/Comm: Girl Scouts
Board members were given a Girl Scout badge that’s been created in connection with the parks cleanup day, Spring Blooms. Girl Scouts can earn the badge by participating in the event, DDA executive director Susan Pollay said.
Pollay noted that the DDA name was hidden within the badge design.
This year, the event falls on Saturday, May 19. The assembly point is Liberty Plaza at Division and Liberty. Said Pollay: “We will go forth and clean up the downtown!”
Present: Nader Nassif, Newcombe Clark, Bob Guenzel, Roger Hewitt, John Hieftje, John Splitt, Sandi Smith, Russ Collins, Keith Orr, Joan Lowenstein.
Absent: John Mouat, Leah Gunn.
Next board meeting: Noon on Wednesday, June 6, 2012, at the DDA offices, 150 S. Fifth Ave., Suite 301. [confirm date]
The Chronicle could not survive without regular voluntary subscriptions to support our coverage of public bodies like the Ann Arbor Downtown Development Authority. While you’re parked in front of your computer screen, please click this link for details: Subscribe to The Chronicle. And if you’re already supporting us, please encourage your friends, neighbors and colleagues to help support The Chronicle, too!