DDA Budgets for Transit, Housing, Parking

Ann Arbor Downtown Development Authority board meeting (March 5, 2014): Three main business items were approved by the board: submission of its FY 2015 budget to the city council, award of a $50,000 management incentive to its parking management contractor, and a resolution pledging to maintain or increase DDA funding of transportation programs, if the May 6, 2014 AAATA transit millage is approved by voters.

The proposed budget shows $19.3 million in revenues from the public parking system and $4.8 million in tax increment finance capture. Overall, it shows $24,237,186 in revenues against $26,531,972 in expenses. The use of fund balance to cover the difference leaves the DDA with an estimated fund balance at the end of FY 2015 of about $3.3 million. FY 2015 runs from July 1, 2014 through June 30, 2015. [FY 2015 DDA budget breakdown]

The expenses include $353,344 in salaries and $245,894 in fringe benefits for four staff members, $7,075,571 in payments to Republic Parking for management of the public parking system, and $2.1 million for parking facility maintenance. Accounting for $3.19 million of the expenses is a payment made to the city of Ann Arbor, equal to 17% of the gross revenues to the public parking system.

Included in the budget is a $200,000 grant to the Ann Arbor Housing Commission – as part of a $600,000 request from AAHAC to support improvements to Baker Commons and Miller Manor.

The budget also includes $676,000 for support of the getDowntown program. The board also approved a resolution that pledged to work toward maintaining or increasing the DDA’s support for transportation programs. That resolution came in the context of an approaching May 6, 2014 transit millage ballot question. The 0.7 mill tax was placed on a May 6 ballot by the Ann Arbor Area Transportation Authority board on Feb. 20, 2014. The tax would be levied by the AAATA only if it wins a majority of support among voters across its three member jurisdictions: the city of Ann Arbor, the city of Ypsilanti and Ypsilanti Township. The DDA board resolution came in part as a response to the fact that the DDA will be capturing a portion of the new millage under its tax increment finance (TIF) funding mechanism.

The board also approved the award to Republic Parking of the full $50,000 annual discretionary management incentive. Republic Parking’s contract with the Ann Arbor DDA covers just actual costs, but also includes a $200,000 annual management fee. Of the $200,000 management fee, $50,000 is awarded to Republic on a discretionary basis. It was last year, at the board’s March 6, 2013 meeting, when the DDA board decided for the first time in five years to award the full $50,000 of the incentive. The year before, at its Feb. 1, 2012 meeting, the board determined to award $45,000 of the discretionary amount. That matched the same figure awarded in 2011, 2010 and 2009.

The board also heard the usual range of reports from committees as well as public commentary. A highlight of announcements included the upcoming closure of the surface parking facility at the old Y lot, as the city-owned property is sold to hotelier Dennis Dahlmann. The closing is expected sometime between March 13-15. The lot is located on William Street between Fourth and Fifth avenues, across from the downtown library and south of the Blake Transit Center.

FY 2015 Budget

The board considered a resolution to submit its FY 2015 budget to the city council for approval. The 2015 fiscal year starts July 1, 2014.

The proposed budget shows $19.3 million in revenues from the public parking system and $4.8 million in tax increment finance capture. Overall, it shows $24,237,186 in revenues against $26,531,972 in expenses. The use of fund balance to cover the difference leaves the DDA with an estimated fund balance at the end of FY 2015 of about $3.3 million. FY 2015 runs from July 1, 2014 through June 30, 2015. [FY 2015 DDA budget breakdown]

The expenses include $353,344 in salaries and $245,894 in fringe benefits for four staff members, $7,075,571 in payments to Republic Parking for management of the public parking system, and $2.1 million for parking facility maintenance. Accounting for $3.19 million of the expenses is a payment made to the city of Ann Arbor, equal to 17% of the gross revenues to the public parking system.

The budget also includes $676,000 for support of the getDowntown program, as well as $300,000 in discretionary spending from parking revenues. Included in the budget is a $200,000 grant to the Ann Arbor Housing Commission – as part of a $600,000 request from AAHAC to support improvements to Baker Commons and Miller Manor.

The budget also includes $449,500 for a down payment on a possible elevator replacement at the southwest corner of the parking structure at Fourth & William, as well as possible debt payments on that project.

In taking the step first to submit the budget for approval by the city council, the DDA board is this year following the state’s enabling legislation for downtown development authorities: “Before the budget may be adopted by the board, it shall be approved by the governing body of the municipality.” In this case, the governing body is the Ann Arbor city council.

This is the first time in several years that the statutory procedure has been followed from the start. Last year, the DDA board first voted at its Feb. 6, 2013 meeting to adopt its FY 2014 budget (for the current fiscal year). That came in advance of the city council’s approval on May 20, 2013 of the city’s FY 2014 budget, which includes the DDA as a component unit.

The pattern followed last year – adoption by the DDA board of its budget in advance of the city council’s approval – had been the prevailing custom for several years. But the council decided at its May 20, 2013 meeting to revise the DDA’s budget in a way that made it significantly different from the one the DDA board had approved three months earlier. In addition to recognizing an additional $568,000 in tax increment finance revenue (TIF), the council’s action transferred an additional $300,000 from the DDA’s TIF fund to the DDA’s housing fund.

Then at the DDA board’s June 5, 2013 meeting, a vote was taken to re-adopt the FY 2014 budget that had been approved by the city council. The council’s $300,000 transfer from the TIF fund into the housing fund was echoed in the revision the council made on Nov. 18, 2013 last year to the local law regulating the Ann Arbor DDA. The following passage was added:

Tax increment financing seed funds for the Housing Fund shall be budgeted effective tax year 2016 at an amount no less than $300,000. Every year thereafter the minimum amount budgeted shall be adjusted at the same rate of increase as the increase in the total TIF capture. …

The 2016 tax year corresponds to the 2017 fiscal year. So the $300,000 figure is not required by law for another two years. At the March 5, 2014 board meeting, however, the budget was amended to add $100,000 to the housing fund expenditure line, at the request of board member Bob Guenzel. He’s long championed the cause of affordable housing and wanted to give the board some additional flexibility to spend additional money on that area, without making a mid-year budget change. Such a mid-year change would, based on remarks at the meeting, require city council approval.

In addition to the $200,000 grant to the AAHC, other housing fund expenditures for FY 2015 include $75,000 for a housing needs assessment.

FY 2015 Budget: Board Discussion

Roger Hewitt, the DDA board treasurer, noted that the operations committee had met the previous week, before the continued board retreat. The committee had come up with a budget proposal for the upcoming fiscal year. The fiscal year runs from July 1 through June 30 each year. Based on the board’s discussion at the retreat, he and DDA executive director Susan Pollay, deputy director Joe Morehouse, and board vice chair John Mouat had frantically crunched some numbers, Hewitt said, trying to figure out how to incorporate the board’s ideas from the retreat into the upcoming budget.

Hewitt noted that some of the ideas would not be incorporated because the timeframe for design and construction would probably not fall within the next fiscal year.

Some capital funds were removed but enough for design and engineering was left to continue with the streetscape effort, Hewitt said. He noted that the budget was formatted according to the requirements of the city of Ann Arbor. [Considerable confusion unfolded subsequently about apparent mismatches between the totals shown in the two versions. The board's review of the budget was based on the kind of breakdown the board has historically used for its budget planning.] Hewitt then reviewed the more detailed breakdown – which is a version that the board has used historically to set its budget.

In addition to the standard budget elements, Hewitt ticked through several other highlights. He indicated that a $114,000 item was a marketing expense including some pedestrian counts and some discretionary funds. He noted that no money has yet been approved for that purpose but these were issues identified at the retreat.

Capital expenditures had been reduced a bit from the initial draft budget – because Hewitt felt it was going to be hard to get everything up and running and under construction for some planned sidewalk construction within one fiscal year. So the board is waiting on the sidewalks until the streetscape framework plan is done, Hewitt said. He indicated that the board wanted to get the results of the streetscape framework study – which would be completed by the end of this year – and then prioritize which sidewalk work should be done first. [The board authorized a $200,000 contract for development of a streetscape framework plan at its Nov. 6, 2013 meeting.]

For bonds and interest payments, Hewitt continued, those figures have been bumped up with the intention of doing the project on the Fourth & William parking structure – to replace the stairway and elevator tower as well as to undertake some pedestrian improvements on that structure. Hewitt noted that the project has not yet been approved, but money is being included in the budget for both the down payment on the bond and increased bond payments.

FY 2015 Budget: Elevator Project

John Splitt described the elevator replacement project in somewhat more detail later in the meeting.

In addition to replacing the elevator and stairway tower, the board is considering doing some work on the south and east sides, using some surfaces that are more reflective and perhaps installing some awnings. The stairway and elevator towers would be glass-enclosed and would open up things significantly, he said. The design team from Carl Walker had been invited back to the next operations committee meeting this month, Splitt reported. He said the committee was expecting to see a more detailed schematic design with proposals on phasing of construction at its next meeting. He was not sure if the presentation would be ready at the April meeting of the full board – but he hoped so.

Mouat added that the current undertaking really is looking at a kind of a “master plan” for renovations to the structure and how they might be phased over time. Splitt ventured that the Fourth & William parking garage had at least 30 years – or possibly 50 – of life left in it. And he did not think it should live out the rest of its life with the current elevator and stair tower.

The project is estimated to cost on the order of $3 million, depending on whether it’s eventually approved by the board and the scope and staging of the improvements (which could include exterior cladding, awnings, and electronic real-time information signs for bus arrivals). Very preliminary drawings were provided to the DDA’s operations committee at its Feb. 26 meeting. That preliminary work was authorized by the DDA board at its Jan. 8, 2014 meeting. The team from Carl Walker Inc. will follow up with more detailed drawings and cost estimates for various options.

FY 2015 Budget: Housing

Roger Hewitt said that $200,000 would be transferred into the housing fund, with the intention of spending approximately $275,000 – including $200,000 as a grant to the Ann Arbor Housing Commission and $75,000 on a housing needs assessment. Hewitt noted that the housing fund balance from the previous year was anticipated at nearly $400,000, so there would be enough money to cover that.

Later in the meeting, reporting out from the partnerships committee, Bob Guenzel reviewed the Ann Arbor Housing Commission’s grant request made to the DDA’s partnerships committee. The request had come from AAHC executive director Jennifer Hall. Guenzel ventured that most DDA board members were aware that the AAHC had made a request of $600,000 to support improvements to AAHC’s Baker Commons and Miller Manor. At the most recent partnerships meeting, Hall had presented additional financial information, he reported. A lot of the focus of the discussion had been on the timing of the payments from the DDA, Guenzel said. Hall had indicated it could be done over three fiscal years – $200,000 per year. No final action had been taken, Guenzel reported, and discussion would continue.

Some back-and-forth among board members unfolded as Guenzel expressed an interest in adding $100,000 in discretionary spending for the housing fund. He indicated that he was not aware of a specific grant request that would tap that money, but he felt it might be useful to go ahead and budget the money to avoid the need for a midyear budget amendment. The back-and-forth between Guenzel and Hewitt indicated that the DDA board believes that such a midyear budget amendment would require approval of the Ann Arbor city council. The board agreed to add $100,000 to the housing fund’s expenditure line under discretionary spending.

FY 2015 Budget: Parking

Parking revenue is based on the current rate structure, Hewitt said. The “miscellaneous” item in the budget is money the DDA gets from the University of Michigan as part of the shared-use agreement for the Forest parking structure, Hewitt explained. He also highlighted the $3.19 million payment to the city of Ann Arbor, which is the 17% of gross revenues from the public parking system. That percentage payment is specified in the contract under which the DDA manages the parking system for the city.

Hewitt explained the difference between the “parking maintenance” line item and the “capital costs” line item in the parking maintenance fund. Parking maintenance is for relatively small items of less than $5,000 apiece. Capital costs are major repairs – like chipping out concrete and replacing it, putting new sealant on, or major painting jobs. These are the sorts of things that are needed in the parking structures to keep them in good shape, Hewitt explained. And the parking structures are in good shape because the DDA has been undertaking this kind of maintenance for a number of years, he said. It’s important to put enough money into the structures to maintain them so that they can live out their entire expected useful life, Hewitt said.

Hewitt noted that the FY 2015 budget reflects a deficit in the parking and the parking maintenance funds. But there are sufficient reserves in those funds to cover that gap, he added. Hewitt floated the possibility of increasing parking rates in the future. “Down the road we may – we are undoubtedly going to have to start looking at some at least inflationary increases in parking rates to cover our costs,” he said.

The total fund balance across all funds, Hewitt concluded, is about $3.3 million. That’s approximately 14% of expenditures, he said. Ideally, the DDA would like to be in the 18-20% range. But Hewitt called 14% reasonable, given that the major construction project of the Library Lane underground parking structure had been completed and the desire of the DDA to maintain some kind of momentum going into the future.

Board member Rishi Narayan asked if the percentage of operating expenses that should be held in reserve was evaluated across all funds or by each fund. Some back-and-forth between Hewitt and DDA deputy director Joe Morehouse established that the auditor looks at fund balances in each individual fund.

Morehouse was also called on to explain the difference between fiscal year and tax year in the context of a new ordinance requirement, approved by the city council late last year, that the DDA budget a minimum of $300,000 per year for the housing fund. The ordinance refers to tax year 2016, which corresponds to fiscal year 2017, Morehouse explained. [The assessor assesses values on Dec. 31 of a particular year. That sets the basis for the taxes collected the following July, which is the next fiscal year.]

FY 2015 Budget: Transportation

In reviewing the budget, Hewitt also noted that the alternative transportation line item of $676,000 is for the go!pass program, which has not yet been approved.

Reporting out from the operations committee, Keith Orr reviewed the getDowntown program’s funding request. The operations committee had some questions and had asked getDowntown director Nancy Shore to break down some of the categories of requests into more specific items. Shore was going to return for the March committee meeting so that the funding request can be considered at the next DDA board meeting in April.

That budget includes enough to cover a transportation funding request for the AAATA’s getDowntown program, which the board will consider at its April meeting. The bulk of DDA’s getDowntown funding supports the go!pass, a program in which downtown employers can participate to allow employees to take unlimited bus rides at no cost to the employee. Employers pay $10 per employee per year for the passes. An “all-in” clause requires employers to purchase go!passes for all employees.

The fares for rides taken with a go!pass are covered in smaller part by the employer payment and in larger part by an annual grant from the DDA. The total grant request this year reflects an 11% increase from last year:

                         FY 2014    FY 2015
getDowntown             $ 40,488   $ 43,000
go!pass                 $479,000   $529,000
Transportation Options  $ 91,174   $105,264
TOTAL                   $610,662   $677,264

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The board is expected to vote on the go!pass request at its April board meeting.

Outcome: The council unanimously approved submission of its FY 2015 budget to the city council for approval.

Transportation Resolution

The board considered a resolution that pledged to work toward increasing the DDA’s support for transportation programs.

The resolution came in the context of an approaching May 6, 2014 transit millage ballot question. The 0.7 mill tax was placed on a May 6 ballot by the Ann Arbor Area Transportation Authority board on Feb. 20, 2014. The tax would be levied by the AAATA only if it wins a majority of support among voters across its three member jurisdictions: the city of Ann Arbor, the city of Ypsilanti and Ypsilanti Township.

The DDA board resolution came in part as a response to the fact that the DDA will be capturing a portion of the new millage under its tax increment finance (TIF) funding mechanism. The ballot language itself highlights DDA tax capture among other TIF authority capture:

PUBLIC TRANSPORTATION IMPROVEMENT MILLAGE

To improve public bus, van, and paratransit services – including expanded service hours, routes, destinations, and services for seniors and people who have disabilities – shall the Ann Arbor Area Transportation Authority levy a new annual tax of 0.7 mills ($0.70 per $1,000 of taxable value) on all taxable property within the City of Ann Arbor, the City of Ypsilanti, and the Charter Township of Ypsilanti for the years 2014-2018 inclusive? The estimate of revenue if this millage is approved is $4,368,847.00 for 2014. This revenue will be disbursed to the Ann Arbor Area Transportation Authority and, as required by law, a portion may be subject to capture by the downtown development authorities of the Cities of Ann Arbor and Ypsilanti, the Washtenaw County Brownfield Redevelopment Authority, and the local development finance authority of the Charter Township of Ypsilanti.

The city of Ann Arbor’s financial staff are currently projecting the DDA’s TIF revenue for fiscal year 2015 to be about $4.8 million. Given the roughly 28 mills of tax on which the DDA captures taxes, that works out to a 0.7 mill equivalent of $120,000 (4,800,000/28)*0.7=120,000]. That’s consistent with the AAATA’s estimates of about $119,000 that would be captured from the 0.7 mill transit tax by the Ann Arbor DDA.

The DDA “resolved” clause of the resolution as amended at the meeting read:

Resolved, If the voters support approval of a new five-year transit millage, the DDA, which has been a long-time supporter of transit as a key strategy to meet its mission, will work to maintain or increase its support for transportation-related programs and projects.

Transportation: Public Commentary

Martha Valadez spoke to the board on behalf of Partners for Transit during public commentary at the start of the meeting, reminding the board that she’d also spoken at board’s Feb. 5, 2014 meeting. She was there to tell the board about the importance of the campaign to support the Ann Arbor Area Transportation Authority’s millage proposal, saying she hoped to get the DDA’s support for the millage proposal that will be on the May 6 ballot. She reviewed how the millage would be 0.7 mills for taxpayers in the city of Ann Arbor, the city of Ypsilanti and Ypsilanti Township. [For detailed background, see "Tax Question Focus of Transit Board Meeting."]

Valadez talked about how one of the goals of the millage is to create a better connected urban core in Washtenaw County. She described how the volunteers who are working on the campaign are very committed to the work that they are doing, saying that the increased service would change a lot of people’s lives. She described how a volunteer at a meeting the previous night who lived in Ypsilanti Township would be able to work more hours in Ann Arbor and not have to worry about getting home late in the evening. She asked for the DDA board’s support for the five-year plan that this millage would support. She asked for the board to endorse the millage proposal or for individual board members to make endorsements on behalf of their businesses. She offered to set up appointments one-on-one with board members after the meeting to talk about the millage.

Ray Detter reported out from the previous night’s downtown area citizens advisory council meeting, saying that the CAC would support voter approval on May 6, 2014 of the Ann Arbor Area Transportation Authority’s request for a 0.7 mill tax to improve transportation service. The five-year service improvement plan, Detter continued, would provide an additional 90,000 service hours for the greater Ann Arbor area.

Transportation: Board Discussion

Keith Orr introduced the item by saying that it was largely in response to the fact that a millage was being proposed by the Ann Arbor Area Transportation Authority. The last two “whereas” clauses are important, he said, because those clauses note that the DDA has a keen interest in supporting transportation:

Whereas, The Ann Arbor DDA has a keen interest in using these new millage funds for transportation-related purposes in support of the DDA’s Renewal Plan;

Whereas, These purposes may include and are not limited to such projects and programs as a future downtown circulator, repairs and enhancements to bus stops and bus shelters, the connector, bicycle facilities including bicycle parking, and other transportation-related facilities and services;

Orr explained that a certain portion of the new millage would be captured by the DDA. The resolution assures people that the DDA’s dedication to transportation would continue, he said, “recognizing that additional revenues would be coming our way.”

Russ Collins asked: “Why are we working to increase?” He ventured that the purpose of the resolution was to assure voters that the DDA would sustain its commitment, and that the DDA would not be withdrawing any funding. Orr responded to Collins by saying that about $90,000 of tax capture would come to the DDA – which he said coincidently was about the amount of support that the DDA had contributed to the LINK.

[The AAATA is estimating the DDA's capture of the millage at about $119,000. The city of Ann Arbor’s financial staff are currently projecting the DDA’s TIF revenue for fiscal year 2015 to be about $4.8 million. Given the roughly 28 mills of tax on which the DDA captures taxes, that works out to a 0.7 mill equivalent of $120,000 (4,800,000/28)*0.7=120,000], which is consistent with the AAATA’s estimate.]

By way of additional background, the DDA ended its support of the downtown circulator called the LINK in 2009 at its June 3, 2009 meeting. A breakdown of the cost of service funding for the LINK circulator from September 2008 to April 2009 was as follows:

$145,385  University of Michigan
$131,267  State operating assistance
$ 10,000  AAATA advertising revenues
$ 71,023  AAATA operating subsidy
$ 71,023  Downtown Development Authority

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Orr stressed that the resolution was not a quid pro quo – that if the voters approve the millage that the DDA would undertake a particular action.

Rather, Orr explained, the resolution was to make clear that the DDA understood that if voters passed the millage, then their expectation was that the millage would be used on transportation. John Mouat said Collins’ point was a good one, wondering if the DDA should commit to an increase.

The back-and-forth that ensued resulted ultimately in the addition of “maintaining” as an option along with increasing support.

City administrator Steve Powers indicated that the resolution was consistent with what the DDA has done with other taxing jurisdictions as far as investing the DDA’s tax capture back into facilities.

It’s also consistent with the discussion that’s going on now in Lansing, Powers said, involving DDA reforms.

This is the direction that the DDA might be forced to go in any case by the legislature, Powers ventured. He described pending legislation in Lansing as “an active possibility.”

Outcome: The board unanimously approved the resolution on maintaining or increasing support for transportation.

Republic Parking Management Incentive

The board considered a resolution awarding Republic Parking the full $50,000 of its annual discretionary management incentive. Republic Parking’s contract with the Ann Arbor DDA covers just actual costs, but also includes a $200,000 annual management fee. Of the $200,000 management fee, $50,000 is awarded to Republic on a discretionary basis. [.pdf of DDA staff memo on Republic Parking management incentive]

It was last year, at the board’s March 6, 2013 meeting, when the DDA board decided for the first time in five years to award the full $50,000 of the incentive. The year before, at its Feb. 1, 2012 meeting, the board determined to award $45,000 of the discretionary amount. That matched the same figure awarded in 2011, 2010 and 2009.

The direct costs for Republic Parking budgeted by the DDA for FY 2014 – the current fiscal year ending June 30 – are $6,569,316 out of about $19,348,016 in budgeted gross revenue for the parking system.

Part of the basis this year leading to the recommendation to award the full $50,000 was improvement in bi-monthly customer surveys over the year:

2013
5-Excellent 42.8%
4 31.6%
3 13.3%
2 3.3%
1-Poor 2.8%
Non-Responsive 6.2%

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The staff memo on the incentive notes that the DDA’s independent inspector’s cleanliness rates were 92.3% for the entire system, compared to 91.71% for last year.

The Dec. 31, 2013 accounts receivable balance for parking permit accounts was $22,920. That’s 4.4% of the average monthly billing, which is below the DDA’s target of 5%.

The memo also notes that the dead ticket average was 1.75% for the year, which is an increase from last year’s 1.01%. The target maximum for that statistic is 1.75%.

A staff memo accompanying the resolution awarding the $50,000 incentive cited additional factors:

• Completion and opening of the First and Washington parking structure, including overseeing the installation of equipment, managing final construction-related maintenance, coordination of opening operations with the final construction in the garage.
• Modernization of the parking equipment at two parking facilities.
• Completion of a Library Lane parking structure office.
• Implementation of reservation parking for Art Fair and the 1st NHL Winter Classic.
• Outstanding success with the first time events of New Year’s Eve “Puck Drops Here” and NHL Winter Classic, despite the weather obstacles presented.
• Maintaining of the parking facilities during the past extreme weather, which included removing large amounts of snow from the facilities and from parking meter areas in sub zero temperatures.

The Ann Arbor DDA manages the city’s public parking system under contract with the city of Ann Arbor. The contract calls for 17% of gross parking revenues to be paid to the city of Ann Arbor.

Republic Parking Management Incentive: Board Discussion

Roger Hewitt introduced the item by describing how the contract with Republic parking works: Republic’s costs are covered, but the contract also includes a management fee worth potentially $200,000 per year. Of that, $150,000 is guaranteed. The additional $50,000 can be awarded at the discretion of the board, based on performance. Hewitt directed everyone to the staff memo, which describes some of the objective and subjective criteria used for evaluating performance. Hewitt then reviewed the points of the memo in detail.

Hewitt noted that the surplus this past year was over $1 million, which he attributed in large part to the work of Republic Parking manager Art Low, working with new technology to make the operations as efficient as possible. Hewitt said he strongly endorsed awarding the full amount of the management incentive. “I cannot be happier with the job that Republic Parking has been doing on our system,” Hewitt said. He described Ann Arbor’s public parking system as one of the best maintained parking systems in the country.

Russ Collins added that a strict look at the statistics indicates that the parking system is generally on a very high level, and slightly above last year. Based on previous performance and current performance, Collins felt that the award of the full amount of the incentive was completely warranted.

Outcome: The board voted unanimously to award the full $50,000 management incentive to Republic Parking.

Communications, Committee Reports

The DDA board’s meeting included the usual range of reports from its standing committees and the downtown area citizens advisory council.

Comm/Comm: Fifth & William Parking Lot

DDA executive director Susan Pollay announced that the Fifth & William parking lot (the former Y lot) would be closed starting sometime between March 13-15, 2014. That’s because the city-owned property is being sold to downtown hotelier Dennis Dahlmann. Pollay said it’s very exciting and the DDA is looking forward to the new project being built there.

By way of background, a project has yet to be submitted to the city, and will take several months to make its way through the approval process. The Ann Arbor city council approved a purchase agreement with Dahlmann for the city-owned land, for $5.25 million, at its Nov. 18, 2013 meeting. One of the terms of the agreement is that Dahlmann must complete construction and receive a certificate of occupancy for the project on the site by Jan. 1, 2018.

Dahlmann made a proposal for the DDA to lease the property from him for $150,000 a year – so that the DDA could continue to provide public parking spaces there until construction of Dahlmann’s project could begin. The response from DDA operations committee members on Jan. 29 was unenthusiastic. They felt it would provide an incentive for Dahlmann to delay developing the land. They also felt that in the immediate vicinity of that lot, there was adequate parking – at the Fourth & William and the Library Lane structures. Finally, the DDA had calculated that with the $150,000 rent payment to Dahlmann, the net annual income to the parking system – assuming all 141 spaces in use – would be just $12,333 a year. [.pdf of DDA financial analysis of Dahlmann's proposal]

Comm/Comm: 120 W. Huron Hotel

Reporting out from the partnerships committee, Bob Guenzel described a request from First Martin Corp. Mike Martin had attended the partnerships committee meeting to make a request on behalf of the 120 W. Huron project – which Guenzel ventured most people knew was for a hotel. Martin had made a specific request for a DDA grant to support project elements that benefit the public – streetscape, additional lighting, LEED certification, historic preservation of the bus facade.

The committee had decided to defer the request while it considers whether it should create a new DDA partnership grant policy that would support projects like this, Guenzel reported. Guenzel indicated that a draft policy would likely be considered at the next committee meeting. A brownfield grant policy that had previously been generated – in response to the 618 S. Main project – was circulated as a possible template to use for the new policy.

Comm/Comm: Footing Drain Lawsuit

Ray Detter reported out from the previous night’s downtown area citizens advisory council meeting. He reported how there had been discussion of the recently filed lawsuit against the city of Ann Arbor, which challenges the legal foundation of the city’s footing drain disconnection ordinance. He reviewed how the ordinance was enacted in 2001, which established a program under which property owners can be required to disconnect their footing drains from the sanitary sewer system. The intent of the ordinance, he continued, is to diminish the risk of sanitary sewer overflows into the Huron River and sanitary sewage backups in homeowners’ basements.

Detter pointed DDA board members to the Feb.28 Ann Arbor Chronicle coverage of the issue. [See "Lawsuit Filed on City Footing Drain Program."] Detter noted that a motion for a preliminary injunction had also been filed in connection with the lawsuit, asking the court to order the city to stop enforcement of the footing drain disconnection ordinance. Among the lawsuit’s many claims, Detter continued, is that it violates the U.S. Constitution. Detter called it a very serious lawsuit. If the preliminary injunction were granted, he contended, it would have the immediate effect on downtown development as well as the development plans of the University of Michigan.

Comm/Comm: Courthouse Square

Ray Detter also reported that the CAC supports age diversity in the downtown. Courthouse Square – an apartment building for senior citizens at the southwest corner of Huron and Fourth – has been sold to Wickfield Properties, he said. The CAC was urging Wickfield, the DDA, the city council, and the entire community to help support housing projects that can help further age diversity in central Ann Arbor. He ventured that it’s not known yet what will happen with Courthouse Square.

Comm/Comm: Connector Study

An alternatives analysis is currently being conducted by the AAATA for the corridor running from US-23 and Plymouth southward along Plymouth to State Street, then further south to I-94. The alternatives analysis phase will result in a preferred choice of transit mode (e.g., bus rapid transit, light rail, etc.) and identification of stations and stops. The study has winnowed down options to six different route alignments.

Roger Hewitt reported out on the connector study, for which he serves on an advisory group. The group had reviewed some very preliminary cost estimates, and received a status report on the modeling project. The modeling project took a lot of demographic and transportation data to try to determine what ridership would be, based on placement of stations at different locations, Hewitt explained. It’s a very complex modeling that is used in the analysis, he said. The group is using the modeling techniques of the Washtenaw Area Area Transportation Study (WATS). The modeling project should be done by the middle of March, he said, and the information would be available by the end of March – as the group tried to determine what the final alignment of routes would look like. “We’re kind of slogging through the technical part now,” he concluded.

Comm/Comm: TiniLite

During public commentary at the end of the meeting, Changming Fan introduced himself as president of TiniLite World Inc., which been registered in Ann Arbor since 1996. He said he appreciated being in a democratic country and felt like he wanted to stand up and say something because he felt like he had the freedom to do that.

He told the board he was a graduate of the University of Michigan. He described himself as an entrepreneur and an inventor. He also said he loves the politics involved with public art and public safety. He wanted to contribute what he learned in China and at the University of Michigan to the city of Ann Arbor. He has developed the LED technology made by TiniLite since 1996, he said. There are a lot of things that we should do to make Ann Arbor be the best town it can be, he said. In 2005, Ann Arbor had become the first city to install LED streetlights. He said that Ann Arbor should continue that legacy by using LED lights to create art, using his technology. He wanted to make a positive impact in that way, he said.

Comm/Comm: Puddles

During public commentary at the conclusion of the meeting, Ed Vielmetti told the board he wanted to talk to them about snow. [He was reprising his remarks made at the Jan. 7, 2009 DDA board meeting.] He pointed out that there’s a lot of it and at some point it’s going to melt, and it would try to drain into the catch basins downtown. Some of the basins are currently blocked by snow and ice, he noted. There also are large and small piles of snow blocking pedestrian paths downtown. He said he’s tried to figure out who’s responsible for dealing with this issue and it’s hard to figure out. At that point DDA board member Russ Collins joked: “Engineers!”

Vielmetti said that sidewalk clearance is the responsibility of property owners, and clearing the street is the responsibility of the city. But Vielmetti said he wasn’t sure who is responsible for dealing with the puddles in the street that people have to walk around or not come downtown because it’s hard to cross the street. He thought that the DDA has a role in that.

As far as the narrow question of who should clear the catch basin, Vielmetti proposed that the DDA look into possibly partnering with the Huron River Watershed Council, which has an adopt-a-storm-drain program administered by Jason Frenzel. [Frenzel recruited volunteers for the program at last year's Green Fair.] Vielmetti described the HRWC’s program as for residential areas right now, but ventured that HRWC would be a point of contact for the DDA.

Vielmetti mentioned the intersection of Church Street and South University as one that had been bad in the past. It’s not a situation that can be looked at with pride, he said, and where we can say that all of Ann Arbor citizens can easily cross the street. He said he did not know who is responsible for it but he ventured that a better job can be done. And he figured that the dollar amounts involved would be small, compared to the benefit.

Comm/Comm: Public Art

In his report from the previous night’s downtown area citizens advisory council meeting, Ray Detter said the CAC wanted to state it supports continued efforts of the city – despite recent actions of the city council – or other groups and individuals to make sure that additional public art installations remain an important city goal.

Comm/Comm: Library Lot

Ray Detter also reported that the CAC reaffirmed its support for a public plaza, with a walkway to Liberty Plaza, as part of a plan to create tax-producing private development on a major part of surface of the Library Lane parking structure. The CAC also believes that any future private development should be pursued cooperatively, and should be integrated with an adjoining plaza, the Ann Arbor District Library, the Ann Arbor Area Transportation Authority and all nearby public and private spaces.

Comm/Comm: Welcome to New UM President

Ray Detter said the CAC wanted to welcome the new University of Michigan president Mark Schlissel to downtown Ann Arbor. He said the Schlissel family would be “inhabitants of Sloan Plaza.” His family would live there while the university president’s historic home on South University Avenue is being renovated.

Present: Al McWilliams, Bob Guenzel, Roger Hewitt, Steve Powers, John Splitt, Rishi Narayan, Russ Collins, Keith Orr, John Mouat.

Absent: Cyndi Clark, Joan Lowenstein, Sandi Smith.

Next board meeting: Noon on Wednesday, April 2, 2014, at the DDA offices, 150 S. Fifth Ave., Suite 301. [Check Chronicle event listings to confirm date]

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