The Ann Arbor Chronicle » downtown development

Ann Arbor DDA Updates: Budget, TIF Talk

Dave Askins — Sun, 15 Apr 2012 14:52:51 +0000

Ann Arbor Downtown Development Authority board meeting (April 4, 2012): The absence of four out of 12 DDA board members had no effect on any outcomes at the meeting, because the board did not have resolutions on its agenda.

Before the Ann Arbor Downtown Development Authority's April 9 budget presentation to the Ann Arbor city council, DDA executive director Susan Pollay rolls up her sleeves as she chats with councilmember Marcia Higgins (Ward 4). (Photos by the writer.)

The meeting took place against the backdrop of the DDA’s budget presentation to the city council the following week – on April 9 – and various other ongoing projects. So the board’s agenda consisted of a collection of regular committee updates and status reports.

Those included an update on the Connecting William Street project – an initiative to explore alternative uses of a limited set of city-owned parcels currently used for parking. The DDA embarked on the project at the direction of the Ann Arbor city council in a resolution it approved about a year ago – on April 4, 2011. The DDA had wanted the ability to lead that exploration, partly in exchange for renegotiating a contract under which the DDA operates the city’s public parking system. That new contract was finally settled on May 31, 2011, and features a clause that provides the city of Ann Arbor 17% of gross revenues out of the public parking system.

Total parking revenues for fiscal year 2013 are projected at around $18 million in the budget approved by the DDA board at its meeting the previous month, on March 7, 2012. That budget was presented by the DDA at a city council work session on April 9. The budget presentation featured a review of the DDA’s history of infrastructure investment and impact on the downtown district since its formation in 1982 – over $100 million of DDA investment, accompanied by $300 million in private investment and an increase in taxable value from $89 million to $386 million.

Another work session highlight was a series of questions posed by councilmember Stephen Kunselman (Ward 3) about compliance with Ann Arbor’s ordinance that regulates how the tax increment finance (TIF) tax capture works for the DDA district. Last year, the city’s financial staff pointed to Chapter 7 of the city code, which appears to limit the amount of taxes the DDA can “capture” from the other taxing units in the district. The DDA board agreed with the city’s interpretation, and returned $473,000 in combined TIF revenues to the Ann Arbor District Library, Washtenaw Community College and Washtenaw County.

Subsequently, the DDA reversed its position and gave a different interpretation to Chapter 7. Responding to Kunselman at the work session, DDA board chair (and retired Washtenaw County administrator) Bob Guenzel told Kunselman that the DDA had informed other taxing units of the DDA’s revised position, which was not to say they agreed with the DDA, he said.

Also the focus of TIF monies captured by the DDA is 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. The developer of the project, Dan 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 revenue to the DDA.

Ketelaar is was initially asking that in addition to reimbursement of certain costs (at around $1.4 million) within six months of the project’s completion, the DDA pledge 80% of its TIF capture money for six years – an additional $1.3 million – to support certain aspects of the project in connection with the state’s Community Revitalization Program. But subsequently, Ketelaar revised the request to include just the TIF reimbursement. So the total request, over six years, is $1.3 million. The CRP is the successor to the brownfield and historic preservation tax credit program. 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.

Ketelaar has pitched his idea to the DDA board on several occasions now – first at the full board meeting on Feb. 1, 2012, and at three 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.

This report takes a look in more detail at Connecting William Street, the DDA’s April 9 budget presentation to the city council, the lingering TIF capture issue, and the 618 S. Main project, as well as odds and ends from the April 4 DDA board meeting.

April 4, 2012: DDA Board Meeting

The board’s meeting featured its usual updates related to the parking system, as well as one item that involves a project meant to find alternative uses to parcels currently used as parking facilities.

DDA Board Meeting: Parking System Report

An update on the performance of Ann Arbor’s parking system is a point of every DDA board meeting agenda. The DDA operates the public parking system under a contract with the city of Ann Arbor. The following week, on April 9, when Roger Hewitt presented the DDA budget to the Ann Arbor city council, he was asked about the parking system performance. Christopher Taylor (Ward 3) wanted to know the basis of Hewitt’s assertion that there was increasing demand for parking in the public parking system.

Hewitt appealed to the two data points that the DDA tracks for the parking system, and which had been presented at the DDA board meeting the previous week: Revenue is up, and hourly patrons are up. Revenue has increased around 16% ($1,362,989 in February 2012 compared to $1,173,568 in February 2011) and the number of hourly patrons is up around 5% (174,492 in February 2012 compared to 165,778). Hewitt told Taylor that the revenue increase outpaced the parking rate increase. Over the last two and a half years, here’s the data on parking revenues and patrons:

Ann Arbor public parking system revenue. Compared to February 2011, February 2012 showed a 16% increase in revenues. (Charts by The Chronicle from DDA data. Image links to higher resolution file.)

Ann Arbor public parking system hourly patrons in structures. Compared to February 2011, February 2012 showed an increase in the number of hourly patrons of about 5%. Due to leap year, there was one more business day for February 2012. (Charts by The Chronicle from DDA data. Image links to higher resolution file.)

DDA Board Meeting: “Library Lane Parking Structure”

During Hewitt’s presentation to the city council on April 9, he showed a slide referring to the new underground parking garage on Fifth Avenue as the “Library Lane Parking Structure” – picking up on the name for the new mid-block cut-through between Division Street and Fourth Avenue, which has been called “Library Lane” from the beginning of the project.

View from the bottom floor of the underground parking garage on Fifth Avenue in downtown Ann Arbor – the light is sunlight filtering down. The garage is nearly completed and is expected to be open at the end of June or the beginning of July. (Image is from a DDA slide presentation to the Ann Arbor city council on April 9, 2012.)

What’s somewhat new is the extension of that name to the structure. Susan Pollay, executive director of the DDA, told The Chronicle after the work session that for now the DDA will call it the Library Lane Parking Structure, but they would be sensitive to modifying that name depending on what people wind up calling it, after construction is complete and people start to use it.

At the April 4 DDA board meeting, John Splitt led off the regular update on the new underground parking garage with an allusion to the nice weather: “It’s a beautiful day to apply waterproofing.” He said the construction is moving along nicely – the concrete pours for the walls are complete, which means that the structural parts are now done, he said.

The surface waterproofing started a couple of weeks ago, Splitt said, and that’s the next step toward getting the surface concrete poured. Elevators have been installed, and the other mechanicals continue to be installed.

Splitt reported that the target date for re-opening Fifth Avenue is still May 20 – but he’s still saying Memorial Day (May 28). The garage itself is expected to be open by the end of June or the beginning of July.

DDA Board Meeting: Connecting William Street

At the April 4 board meeting, Joan Lowenstein gave an update on the Connecting William Street project – an initiative to explore alternative uses of a limited set of city-owned parcels currently used for parking. The DDA embarked on the project at the direction of the Ann Arbor city council in a resolution it approved about a year ago, on April 4, 2011. The DDA had wanted the ability to lead that exploration, partly in exchange for renegotiating the contract under which the DDA operates the city’s public parking system. That new contract was finally settled on May 31, 2011.

Scenario development process being used by the DDA for the Connecting William Street project. (Image links to larger resolution file.)

Parcels included in the area are: the Kline’s lot (on Ashley, north of William), Palio’s lot (at Main & William), the ground floor of the Fourth & William parking structure, the old Y lot (Fifth & William), and the top of the Fifth Avenue underground parking garage, which is nearing completion.

Lowenstein reported that a survey circulated to solicit input had generated around 2,000 responses whereas only 1,000 had been expected. Lowenstein characterized the clear message from the results as indicating a strong desire for a vibrant sidewalk experience in the William Street area, with attention to good building quality and design. She also said the results indicated a desire for economic development, housing and open plaza space. The full set of responses, including free responses, is available on the DDA website: Connecting William Street survey responses.

[By way of illustrating the responses to the survey (not meant to cover the range or complexity of the answers given) when asked to share additional extremely important goals for the project area, responses included: "MORE FRICKING PARKING!!!!!" and "Provide natural (i.e., 'green') open space as part of a broader design for public activity and use downtown."]

The DDA is partnering with Concentrate to host a speaker series, Lowenstein said, to explore ways to achieve some of the goals of the project. She called the first event a big success. The speaker was Dan Gilmartin, from the Michigan Municipal League, who has authored a book called “The Economics of Place.” She said the event was very well attended, with practically standing room only at Conor O’Neill’s on Main Street. The next speaker event will be on April 19 at 5:30 p.m. also at Conor O’Neill’s, she said, and will focus on activating sidewalk space. [The speakers will be Kirk Westphal, a member of the city of Ann Arbor planning commission, and Bob Gregory, president of the Detroit 300 Conservancy.]

Lowenstein also reported that the DDA’s leadership and outreach committee had worked with land-use economist Todd J. Poole of 4Ward Planning, who has already made a visit to Ann Arbor. Poole’s work is being funded by the grant that the DDA has obtained for the project, as part of a larger federal grant from the U.S. Dept. of Housing and Urban Development (HUD) to Washtenaw County.

Of the $100,000 Connecting William Street project budget, $65,000 will come from a community challenge grant awarded recently as part of a larger $3 million HUD grant received by Washtenaw County. The remaining $35,000 will be made up by DDA cash (no more than $20,000) and DDA in-kind contributions of staff time.

At the DDA’s partnership’s committee meeting on April 11, DDA planning and research specialist Amber Miller indicated that the report from Poole would be received around mid-May. She also described how the steps forward will include focus groups and the use of the survey results to start creating an initial iteration of scenarios. That work will take place in the context of understanding the significance of anchor institutions in the study area – the Ann Arbor District Library and the Ann Arbor Transportation Authority’s Blake Transit Center.

A final recommended scenario is expected sometime in August, Miller said, and that will be forwarded to the city council.

April 9, 2012: DDA at Council Work Session

At the DDA board’s April 4 board meeting, John Splitt noted that DDA board member Roger Hewitt would be delivering a budget presentation to the Ann Arbor city council at a work session the council was holding on April 9. Splitt encouraged other board members to attend.

By way of background, the DDA has in recent years not made such a budget presentation to the council. However, at a March DDA partnerships committee meeting, Ward 2 city councilmember Jane Lumm had asked about a possible presentation by the DDA to the council on its budget. Lumm serves as a city council representative to that committee. There was also support from other councilmembers for having such a presentation from the DDA. The DDA board had already approved its budget for fiscal year 2013 in March.

Council Work Session: DDA Background and Budget

The budget that Roger Hewitt presented to the city council at the work session was the same one that the DDA board had approved over a month earlier, at its March 7, 2012 meeting. It was prefaced by several slides reminding councilmembers of the impact the DDA has had on downtown Ann Arbor since its formation in 1982.

That includes over $100 million in investment by the DDA in various infrastructure, according to the DDA’s presentation. Also since 1982, the private sector has invested more than $300 million in downtown construction, which has added more than 3 million square feet of floor area. The DDA district’s taxable value grew from $89 million to $386 million over that period, Hewitt told the council.

Hewitt highlighted the fact that since the DDA took responsibility for management of the public parking system in 1996, two structures had received major repairs or renovations (Maynard, and Fourth & William) and another two had been demolished and rebuilt (Fourth & Washington, and Forest).

To that list Hewitt added the First and Washington structure, which needed to be demolished because it was failing structurally. The site is currently under construction by the developer Village Green, and will include a parking deck on the bottom floors of the City Apartments residential project – a parking deck the firm is developing in partnership with the DDA.

Highlights of the budget itself include:

FY 2013 DDA Revenues
===========
$ 4 M TIF Capture
$18 M Parking Revenue
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$22 M Total

FY 2013 DDA Expenses
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$ 6.7 M Debt Service
$ 7.5 M Parking Operations
$ 3.6 M Capital Costs
$ 1.5 M Grants & Transfers
$ 0.7 M Administration
$ 0.4 M Professional Services & Insurance
$ 0.5 M City Municipal Center Grant
$ 3.1 M Parking Revenue (17%) to City
-----------
$24 M Total

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That difference in revenues versus expenditures means that the DDA will be tapping its fund balance reserve for around $2 million in the next fiscal year. As Hewitt explained to the council, this was a planned use of the fund balance and reflects the fact that the DDA is a capital-project driven organization. The pattern is to build up a fund balance in preparation for a project, which is then drawn down as projects are built. Hewitt told the council that the long-range planning is accomplished through a 10-year plan, which is updated quarterly.

Factoring in coverage of this year’s (FY 2012) use of fund balance and next year’s planned use of $2 million, the DDA will have a total fund balance of $4.38 million at the end of FY 2013, or an amount equal to about 18.2% of expenses [.pdf of FY 2013 budget]. Asked by Jane Lumm when the “floor” of the fund balance reserve will occur, Hewitt indicated that it would be this year or next.

By way of background, in the context of last year’s renegotiation of the contract under which the DDA operates the city’s public parking system, part of the DDA’s negotiating strategy was to point to its fund balance. The DDA warned that the contract terms the city wanted would lead to a precariously low fund balance in its 10-year forecast. The DDA board only agreed to the final term – a payment to the city of 17% of gross revenue from the public parking system – when the city of Ann Arbor agreed to backstop if the DDA’s fund balance fell below $1 million.

Council Work Session: Other Council Questions

Sabra Briere (Ward 1) wanted to know when the parking demand management, which the DDA had talked so much about, would be implemented. Hewitt told her that to some extent the DDA had begun to implement the pricing-by-demand model, but that it had really taken a backseat while the DDA completed the new underground parking structure on Fifth Avenue.

Briere also expressed her hope that the DDA would transition all the on-street parking meters to the kiosk-style electronic meters. Hewitt told Briere that if it were up to him, it would be done tomorrow. [The DDA had envisioned completing the transition, based on the positive results for the initial rollout of new meters in several locations. However, partly due to terms of the new parking contract with the city, the DDA has indicated that it does not have financial resources to make the upfront capital investment right now.]

Hewitt noted that about 70% of the payments made by new meters is via credit and debit cards.

Stephen Kunselman (Ward 3) expressed some dissatisfaction that the budget forwarded to the city council by the DDA did not include the “actuals” from prior years – like every other component of the overall city budget. Kunselman felt including those actual expenditures and revenues from prior years was a requirement of state law – that everything be in the same format. Ann Arbor’s chief financial officer Tom Crawford came to the podium and provided an assurance that the DDA figures from prior years could be provided.

Council Work Session: TIF Questions

Of the questions put to representatives of the DDA by the city council, those posed by Stephen Kunselman (Ward 3) about TIF capture were the most pointed. The basis of his questions can be traced back to an issue that arose a year ago, when the city of Ann Arbor financial staff pointed out the impact of the city ordinance that lays out how the DDA’s TIF capture is determined.

Council Work Session: TIF Questions – Background

A tax increment finance (TIF) district is a mechanism for “capturing” certain property taxes to be used in a specific geographic district – taxes that would otherwise be received by the entity with the authority to levy the taxes. So in the DDA’s TIF district, the DDA doesn’t levy taxes directly. Rather, a portion of the property taxes that would otherwise be collected by taxing units (like the library, community college and the county) is instead used by the Ann Arbor DDA for improvements within a specific geographic district, covering about 66 city blocks downtown.

What is the portion of the property taxes that is captured by the DDA? The captured tax is only that which applies to the difference between (1) the baseline value of the property when the district was first formed, and (2) the value of the property after new construction or improvements to the property. That difference is the “increment” in “tax increment finance.” Subsequent appreciation of property value due to inflation, after it’s been constructed or improved, is not included in the Ann Arbor DDA’s TIF capture.

Chapter 7 of the city of Ann Arbor’s city code lays out how the tax capture of the Ann Arbor DDA is limited, or capped. The mechanism used to cap the amount of tax that can be captured by the Ann Arbor DDA is the projected value of the increment in the TIF district, as laid out in the TIF plan – a required document under the state enabling legislation for DDAs (Act 197 of 1975). From Chapter 7 [emphasis added]:

If the captured assessed valuation derived from new construction, and increase in value of property newly constructed or existing property improved subsequent thereto, grows at a rate faster than that anticipated in the tax increment plan, at least 50% of such additional amounts shall be divided among the taxing units in relation to their proportion of the current tax levies. If the captured assessed valuation derived from new construction grows at a rate of over twice that anticipated in the plan, all of such excess amounts over twice that anticipated shall be divided among the taxing units. Only after approval of the governmental units may these restrictions be removed. [.pdf of Ann Arbor city ordinance establishing the DDA]

The TIF plan includes a table that lays out the projected valuation of the increment in the district, starting in 2003. The table includes three scenarios for the projected valuation: “realistic,” “optimistic” and “pessimistic.” They’re each based on a constant percentage increase each year. So the three different scenarios are generated from three different estimates of the percentage increase each year. [.pdf of DDA TIF plan appendix]

In May 2011, the DDA initially agreed that based on Chapter 7, the excess TIF money needs to be reimbursed to taxing authorities in its district, for excess TIF that had been captured since 2003. Those taxing authorities include the Ann Arbor District Library, Washtenaw County and Washtenaw Community College, and they were reimbursed a total of $473,000. The city of Ann Arbor was due to be reimbursed for $712,000, but the city council waived that amount.

Ann Arbor Downtown Development Authority: Bond payments and TIF capture. (Image links to higher resolution file.)

Subsequently, the DDA reversed its legal position, and currently contends that Chapter 7 does not indicate a clear limit on its TIF capture and that the money it returned last year need not have been returned.

The DDA’s position on the Chapter 7 issue is reflected in a chart included in Roger Hewitt’s budget presentation to the city council.

The chart plots the DDA’s bond payments against its TIF revenues. The DDA contends that as long as its revenues from TIF capture (unlimited by Chapter 7) do not exceed its bond payments, it’s not required to apply the calculations in the ordinance – which last year were interpreted to place a limit on the amount of TIF money the DDA captured in the first place.

The DDA’s position relies on a subsequent portion of the ordinance, which reads [emphasis added]:

Tax funds that are paid to the downtown development authority due to the captured assessed value shall first be used to pay the required amounts into the bond and interest redemption funds and the required reserves thereto. Thereafter, the funds shall be distributed as set forth above or shall be divided among the taxing units in relation to their proportion of the current tax levies.

Complicating the issue is the fact that the bonds the DDA has historically used to finance parking structure construction and renovation have relied on revenue from the parking system – not TIF capture – to ensure that the debt service can be covered. [Editor's note: But see Comment 3 below] And it’s not the DDA that issues the bonds, but rather the city of Ann Arbor, which issues the bonds on behalf of the DDA. So in the DDA’s accounting system, the DDA itself does not maintain bond reserves. The DDA’s annual reports consistently show $0 for “bond reserve.” [.pdf of DDA annual reports from past years]

If Chapter 7 is interpreted to mean that any bond payments are first in line to be paid – before any other use can be made of TIF revenues – that could have an unintended impact on the DDA’s payment of roughly $500,000 a year to the city to support the new police/courts building, now called the Justice Center. The city uses that contribution from the DDA to help make payments on bonds it issued to build the Justice Center.

When Newcombe Clark was appointed to the DDA board in 2009, one of the first things he insisted on was to classify that police/courts payment to the city as a “grant” and not a “bond payment.” If it’s not a bond payment, then on the DDA’s current interpretation of Chapter 7, it’s not clear how the DDA could make that payment to the city out of its TIF revenues – because there would be other, outstanding debt that would have to be paid first, and there would not be any left over to make the $500,000 police/courts payment out of the TIF fund. However, the DDA could conceivably make the police/courts contribution from parking system revenues.

At the city council’s April 2, 2012 meeting, Kunselman had brought forward a resolution – which he could not persuade enough of his colleagues to pass. It would have directed the city financial staff to analyze the TIF capture according to Chapter 7, based on last year’s interpretation of the ordinance.

Council Work Session: TIF Questions – How Does this Work?

With that as background, Kunselman led off by asking whose responsibility it is to calculate the TIF. Hewitt told Kunselman that the DDA does not calculate the TIF capture.

Before the start of the April 9 DDA budget presentation to the Ann Arbor city council. Foreground: DDA board member Bob Guenzel talks with Ward 4 councilmember Margie Teall. Background: Ward 3 city councilmember Stephen Kunselman talks with assistant city attorney Kevin McDonald.

Kunselman ventured that he had a different understanding, based on conversations with the city treasurer’s office. Hewitt deferred to Bob Guenzel, who is now chair of the DDA board. Guenzel served many years as Washtenaw County administrator until he retired in May of 2010.

In broad strokes, Guenzel explained that the DDA receives a check from the city of Ann Arbor treasurer’s office. Joe Morehouse, deputy director of the DDA, confirmed that’s how it works, from the DDA’s vantage point. Kunselman went on to raise the possibility that the DDA might need to be prepared to receive a different amount than the full TIF capture it had used to plan its FY 2013 budget – if the city treasurer were to reach a different conclusion than the DDA about how Chapter 7 applies.

Guenzel responded to Kunselman by summarizing the DDA’s legal position. As a legal matter, he said, the DDA believes that as long as there’s outstanding debt that exceeds the amount of the full TIF capture [as in the "DDA TIF and Bond Payments" chart], there’s no obligation to distribute TIF back to the other taxing units. Guenzel noted that the DDA had advised the taxing units in the district of the DDA’s position, which was not to say that those taxing units agreed with it.

618 S. Main Street

Related to TIF capture is the 618 S. Main project. Developer Dan Ketelaar is asking that the DDA use part of the TIF capture that would come from the new project to pay for certain elements of the project that he contends have a public benefit.

618 S. Main Street: Background, Proposal

The 618 S. Main project is a 7-story building, which would include 190 units for 231 bedrooms, plus two levels of parking for 121 vehicles. It received a unanimously positive recommendation from the Ann Arbor planning commission on Jan. 19, 2012. The developer of the project, Dan 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 revenue to the DDA.

Ketelaar has pitched the idea to the DDA board on several occasions now – first at the full board meeting on Feb. 1, 2012, and at three subsequent DDA partnerships committee meetings. Two of those committee meetings took place in March. Ketelaar and his team also discussed his proposal at the April 11 meeting of the partnerships committee. Ketelaar has a purchase option on the land through July, so he has an interest in seeing the financing for the project come together in the next few months. Based on partnerships committee discussions, the city council would prefer not to vote on the project until the issue of the state tax credits is finalized.

At the DDA’s April 4 board meeting, in reporting out from the downtown citizens advisory council (CAC), Ray Detter expressed support for the project, noting that both the CAC and the Old West Side Association strongly supported it. He said they wanted the project to be built. However, he cautioned that the CAC also supported consistent and careful planning. And he expressed caution about the DDA offering its support in the form that Ketelaar is requesting.

Detter pointed out that the CAC had been involved in creating the partnership process that the DDA has used in the past – for the first time in 1999. That had included support to Syndeco Realty, the development arm of DTE Energy, for the Ashley Mews project on Main Street. In all of the cases when the DDA had provided support, Detter said, the DDA had made sure to follow rules and procedures that were consistent and applied equally to all applicants. All those projects also involved some public benefit that might not otherwise have been achieved. So Detter stressed that the DDA should continue to insist that all DDA decisions on supporting 618 S. Main should be made based on the principles that the DDA has always supported. He wanted to make sure that no unfair precedent was set.

618 S. Main: History of DDA Project Support

By way of background, the board approved a $589,800 grant for the construction of pedestrian improvements associated with the Ashley Mews project, located at Main and Packard streets. The grant was for streetscape improvements along South Ashley and South Main streets, as well as on the pedestrian walk-through from Main to Ashley. The board also approved a $75,000 grant from its housing fund, to support affordable housing as a part of the project. [.pdf of Oct. 6, 1999 board minutes]

In his remarks to the DDA board at the April 4 meeting, Detter recalled the DDA’s support of the Ashley Mews project as well as other projects. Those include some that were eventually built, as well as some that were not ever built, he said. He mentioned the Village Green City Apartments project [which just recently started construction at First and Washington], Liberty Lofts [which completed construction in 2006 at First and Liberty] and Kingsley Lane [which was never built]. From a handout provided at a March DDA partnerships committee meeting, here’s a quick overview of the history of support to different developments made under the DDA’s partnerships program:

1999: Ashley Mews – $589,800 and $75,000. Reason: affordable housing/help the city of Ann Arbor sell Main & Packard.
2004: Kingsley Lane [not built] – 20% of the TIF for 10 years. Reason: first downtown residential project after greenbelt millage approval.
2005: Liberty Lofts – $600,000 ($300,000 for stormwater management, $250,000 for pedestrian improvements, $50,000 for parks). Reason: historic preservation/dense residential.
2006: William Street Station [not built] – 20% of the TIF generated over 10 years (maximum $500,000), waive meter bag fees (up to $100,000). Reason: help to preserve 100 very affordable housing units.
2007: Tierra on Ashley [not built] – 25% of the TIF generated over 10 years waive meter bag fees (up to $18,000). Reason: Platinum LEED construction.

In 2008, the DDA discontinued the partnerships grant program, because the board believed that development interest in downtown Ann Arbor was strong enough that such grants were no longer needed to help spur investment. [.pdf of March 5, 2008 DDA board resolution] From the board’s resolution:

Whereas, Development interest in the downtown is currently very strong, and the Partnerships Committee no longer believes that DDA Partnerships Grants are needed to foster development;
RESOLVED, The DDA resolves to eliminate its DDA Partnerships Grant Program, but will retain its other economic development tools to support downtown development including its facade loan program, provision of parking contracts, provision of parking assistance to lessen pedestrian impacts during construction and support for public infrastructure expansions.

Before discontinuing the grant program, the DDA has offered some support to two other projects, but not through that partnerships grant. And since the discontinuation of the program, the DDA has offered substantial support to one project – the Zingerman’s Deli expansion project at Detroit and Kingsley. The DDA voted on July 7, 2010 to support that project with an amount equal to the estimated amount of taxes on the increased value of Zingerman’s property, that the DDA would receive through its TIF capture for the first 15 years after the project is completed. That amount is $407,000.

The board approved the request from Zingerman’s by passing a resolution that specified “improvements to sidewalks and sidewalk curb ramps in the area near the Deli, providing additional wayfinding, providing funding for actual LEED certification costs, and providing contractor parking and staging …”

Here’s a summary of non-partnerships grant support to downtown projects:

2005: Denali/322 E. Liberty – 11 spaces in the South Fifth Ave. lot for 1 year (~$50,000).
2007: Mayer Shairer – reimbursement of $40,000 (fire hydrant).
2010: Zingerman’s Deli brownfield – $407,000 (for sidewalks, wayfinding, etc.). Reason: Jobs, anchor business, national attention.

618 S. Main: Review of DDA Board Discussion

At the DDA board’s April 4 meeting, Sandi Smith (co-chair of the partnerships committee and a Ward 1 city councilmember) reviewed the request that Ketelaar was making. She reported that there’d been a need to clarify how the DDA TIF capture works for Ketelaar’s project team. In calculating the total dollar amounts of TIF capture that the DDA would be pledging, the project team had factored in inflationary increases as a part of the increment on which the DDA could capture tax. The Ann Arbor DDA, in contrast to many other downtown development authorities, captures taxes only on the initial increment between the property value before improvements and the value after improvements. The DDA does not capture taxes on the additional value the property might accrue through inflationary pressures of the real estate market.

At the March 14 meeting of the DDA partnerships committee, Dan Ketelaar pitches his proposal for the DDA to support his 618. S. Main project.

Smith noted that the committee had reviewed the history of support that the DDA had given to projects and discussed whether 618 S. Main was an “extraordinary” project that the city needed and offered a specific public benefit. That discussion would continue, Smith said, at the next partnerships committee meeting. Part of the discussion, she noted, involves the project’s location in the South Main Street corridor.

At the partnerships committee meetings in March, as well as the committee meeting on April 11, after the board meeting, Ketelaar has stressed the location of the project as a key reason that the DDA should support it. It anchors the edge of the DDA district, could serve as a gateway to downtown, and has the potential to spur the revitalization of Main Street between Mosley and William along Main, Ketelaar says.

At the March 28 partnerships committee meeting – convened as a special meeting just to discuss Ketelaar’s proposal for 618 S. Main – Smith noted that the part of the proposal that resonated with her was the idea that the strip between Ashley Mews southward to the 618 S. Main location would become more attractive through making streetscape improvements. However, she expressed some hesitation about the timing, saying that she wished the DDA could take the time to make a plan for what that road should look like, so that it doesn’t get “piecemealed” together.

Also at that meeting, Newcombe Clark expressed concern that the “urgency” of the issue was being placed upon the DDA by the fact that Ketelaar’s purchase option for the land went only through July. He said he’d feel differently about it, if the land had already been acquired. Given that the land had not yet been purchased, Clark was concerned that the DDA’s support of the project could translate to artificially increasing the cost of real estate in downtown Ann Arbor. If Ketelaar’s project did not go forward, Clark wondered if there could be other developers lined up behind Ketelaar who’d be willing to purchase the land – perhaps for less than Ketelaar was offering – and to build a different project that did not require the kind of support Ketelaar was requesting.

There’d been some question about whether streetscape improvements for the entire stretch between Mosley and just south of William would be considered as a “local match” from the perspective of the state’s Community Revitalization Program. At their April 11 meeting, Nathan Voght, of the Washtenaw County office of community and economic development, indicated to the DDA partnerships committee that based on a conversation with a state official, he believed that the streetscape improvements would count for local match purposes.

Also at the April 11 partnerships committee meeting, DDA board members concluded they’d need to schedule another special meeting to continue the discussion of the 618 S. Main proposal. It will take place on April 25 at 9 a.m. The April 25 meeting will mark the fourth partnerships committee meeting that has featured the 618 S. Main proposal on its agenda.

Present (April 4 board meeting): Nader Nassif, Bob Guenzel, John Splitt, Sandi Smith, Leah Gunn, Keith Orr, Joan Lowenstein, John Mouat.

Absent: Newcombe Clark, Russ Collins, John Hieftje, Roger Hewitt.

Next board meeting: Noon on Wednesday, May 2, 2012, at the DDA offices, 150 S. Fifth Ave., Suite 301. [confirm date]

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Downtown Parcel Planning Gets Budget

Chronicle Staff — Wed, 07 Mar 2012 18:07:28 +0000

At its March 7, 2012 meeting, the Ann Arbor Downtown Development Authority board voted to establish a budget of $100,000 for its Connecting William Street project, which it’s undertaking at the direction of the Ann Arbor city council. The council passed a resolution on April 4, 2011 that gave the DDA direction to explore alternative uses of city-owned parcels – currently used for surface parking – in a limited area of downtown. The area is bounded by Ashley, Division, Liberty and William streets.

Parcels included in the area are: the Kline’s lot, Palio’s lot, Fourth & William parking structure (ground floor), the old Y lot (Fifth & William), and the top of the Fifth Avenue underground parking garage, which is nearing completion.

Of the budgeted amount, $65,000 will come from a community challenge grant awarded recently as part of a larger $3 million grant awarded to Washtenaw County by the U.S. Dept. of Housing and Urban Development. The remaining $35,000 will be made up by DDA cash (no more than $20,000) and DDA in-kind contributions of staff time.

The committee that has been shepherding the project along since the summer of 2011 recently released an online survey to solicit initial community feedback. At the meeting, it was reported that the survey has so far received around 1,500 responses.

This brief was filed from the DDA offices at 150 S. Fifth Ave., Suite 301, where the board holds its meetings. A more detailed report will follow: [link]

Rezoning Denial Recommended on South U.

Chronicle Staff — Wed, 08 Feb 2012 02:02:07 +0000

At its Feb. 7, 2012 meeting, the Ann Arbor planning commission voted unanimously to recommend denial of a rezoning request for 1320 S. University Ave., where the three-story Park Plaza apartment building is located. The property – on the south side of South University, between Forest and Washtenaw avenues – is owned by Philip Sotiroff, who hoped to build a mixed-use (retail and residential) building as high as 145 feet. That height would allow for a structure of between 10-14 stories on the 0.82-acre site. The current zoning – D2 (downtown interface) – does not allow for a structure taller than 60 feet. The city’s planning staff had also recommended denial of the rezoning request.

Fifteen people spoke during a public hearing about the rezoning. Most of them were residents and neighborhood leaders who objected to the proposed rezoning. They noted the long A2D2 process that the city underwent to develop the existing zoning, which was adopted in late 2009. Commissioners concurred, and after a brief discussion the commission voted unanimously against the proposal. [For a timeline overview of the A2D2 and design guidelines process, with links to previous Chronicle coverage, see "Ann Arbor Hotel First to Get Design Review?"]

This brief was filed from the city council chambers on the second floor of city hall, located at 301 E. Huron. A more detailed report will follow: [link]

618 S. Main Project Gets Planning Support

Mary Morgan — Fri, 27 Jan 2012 18:41:25 +0000

Ann Arbor planning commission meeting (Jan. 19, 2012): A major development on the south edge of downtown Ann Arbor – between Main and Ashley, north of Mosley – was generally praised by planning commissioners at their most recent meeting, and unanimously recommended for approval.

Looking north from Mosley at the site of the proposed 618 S. Main apartment complex. The former Fox Tent & Awning building will be demolished. Ashley Street runs to the left of this photo, and borders the Old West Side historic district. (Photos by the writer.)

The 618 S. Main project is an apartment complex geared toward young professionals, according to developer Dan Ketelaar. The 7-story building would include 190 units for 231 bedrooms, plus two levels of parking for 121 vehicles.

The project borders the Old West Side historic district – the board of the Old West Side Association submitted a letter of support for the development. Parking and traffic concerns were raised by some commissioners, but the project received praise for its design and its potential to enliven that part of the city. The planning staff had recommended approval.

Two other projects gained approval from commissioners at their Jan. 19 meeting. Rezoning and a site plan for a small addition to the Habe Mills Pine Lodge – owned by the Society of Les Voyageurs – will move forward to the city council with a recommendation of approval. The lodge is adjacent to city parkland near Argo Pond, and had been erroneously zoned as public land.

The commission also signed off on a special exception use at 3645 Waldenwood, which would allow an accessory apartment to be added to the single-family house there. It’s located in the Earhart Estates neighborhood, west of Earhart and south of Glazier Way, in the city’s northwest side.

Several commissioners expressed support of this project and for accessory units in general. “Accessory dwelling units can be an asset to our community and I hope we see more in the future,” said commissioner Erica Briggs.

618 S. Main Apartments

The main item on the Jan. 19 agenda was a resolution to approve the site plan and development agreement for 618 S. Main – a major new residential project near downtown Ann Arbor.

The planned project is located at the site of the former Fox Tent & Awning building, north of Mosley between Main and Ashley. It borders properties in the Old West Side historic district, but is not in the district itself. The proposal calls for demolishing two existing structures and erecting a 7-story, 153,133-square-foot apartment building with 190 units for 231 bedrooms.

The building would contain 70 studio apartments, 70 one-bedroom units, 42 two-bedroom units, and 7 duplex units with 1 bedroom each. The proposal is slightly modified from details discussed at a Nov. 11, 2011 neighborhood meeting about the project, hosted by the developer, Dan Ketelaar, and his design team – one of several public forums regarding the project.

618 South Main facade, facing west from Main Street. (Links to larger image)

Underground parking would include 121 vehicle spaces – including two spaces for a car-sharing service like Zipcar – and 89 bicycle parking spaces. Other proposed features include solar panels installed on the roof to help heat water for the building, and a private open space on the west side of the building with an outdoor pool and pool deck, a pool house/rental room, two fire pits, three rain garden/bio-retention areas, landscaping areas and patio areas made of porous pavement. The developer has agreed to make a $117,800 contribution to the city’s parks system, in lieu of providing dedicated parkland on the site.

The building as proposed would be 85-feet tall – 25 feet higher than permitted in the D2 zoning district in which the site is located. Planned projects allow for some flexibility in height or setbacks, in exchange for public benefits. They don’t allow as much flexibility, however, as a planned unit development (PUD).

The project was evaluated by the city’s design review board. According to a staff report, the board found that the design generally adhered to the downtown design guidelines. Some modifications were made to the design in response to the board’s suggestions – for example, the portion of the building along South Main Street was stepped back five feet above the third floor and 10 feet above the sixth floor, to enhance the pedestrian experience along the west side of South Main.

618 S. Main Apartments: Public Hearing

Six people spoke during a public hearing on the project, including developer Dan Ketelaar and two representatives from his design team. Another speaker weighed in on the project at the meeting’s final public commentary slot.

Andrew Lineberry said he lived nearby on Hoover and walked by the 618 S. Main site frequently. He told commissioners that he’d originally planned to go to a talk that night at the Gerald R. Ford Library, but instead decided to attend this meeting to express his dismay over yet another tall building being constructed downtown. It will cast shadows and block the sky for others in the neighborhood, he said. Lineberry said he doesn’t believe people want more tall buildings. He hasn’t spoken out against other projects, because they haven’t been in his neighborhood, he said. But now, he felt he needed to let people know that it bothered him.

Barbara Murphy introduced herself as vice president of the board for the Old West Side Association. She referred to a letter that had been sent to the commission, signed by all board members. Their opinion is quite positive, she said. It’s a project that will bring life to the neighborhood by adding residents. It will clean up a brownfield area, and install rain gardens to deal with stormwater runoff. The increased density in that area is a good thing, Murphy said, and could lead to more retail. The association is also pleased at the amount of parking that will be part of the development, so that residents of 618 S. Main won’t be parking along the streets.

The association regretted that the project would displace existing businesses at that location. [Three businesses – Delux Drapery, Overture Audio and Ivory Photo – are located in buildings that will be demolished.] Murphy strongly encouraged the city to come up with a plan for the Main Street corridor between this site and Ashley Mews, at Main and Packard. The 618 S. Main project would provide an anchor, she said, and there’s potential to work with the Ann Arbor Downtown Development Authority on streetscape improvements. A large tech company is moving into the former Leopold Brothers location that’s nearby, she noted, and this new apartment complex could help lead to a revitalization the entire South Main corridor.

This is a case in which the city’s development process worked, Murphy said. The developer held more than the required number of citizen participation meetings, including one for the Old West Side Association that was attended by about 40 people, she said. There have been a few negative comments, Murphy concluded, but overall the feeling is that the project will be good for the neighborhood.

Ray Detter said he represented the Downtown Citizens Advisory Council and a coalition of eight neighborhood groups in the city. He said he’d attended four public meetings about the project, and had watched it take shape based on feedback from the public and from the design review board. It’s a well-designed gateway building that will replace a blighted site, Detter said, giving 20- to 30-year-olds a place to live downtown. Detter pointed to a range of other benefits, including more open space, parking, and stormwater treatment. He noted that the project’s design team added a major entryway to reinforce the urban corner at Mosley and Main. The Main Street corridor along that stretch could be improved using a portion of the tax increment financing (TIF) funds that will be collected by the DDA, he suggested. Overall, the community will benefit from this development, Detter said.

Detter also reflected on the city’s design review process. When the Varsity project was going through the city’s planning approval process, he said, planning commissioners seemed uncertain about whether they could comment on the building’s design. “We feel strongly that you can,” Detter said. Otherwise, he added, what’s the point? [The Varsity is another planned project, which was approved by city council in November 2011 despite criticism by Detter and others regarding its design. It consists of a 13-story apartment building with 181 units at 425 E. Washington, between 411 Lofts and the First Baptist Church.]

The process for 618. S. Main was better than it was for the Varsity, Detter said, and he hoped the process would continue to get better. He also hoped the commission and then city council would approve 618 S. Main.

Three representatives of the 618 S. Main project also addressed the commission. Developer Dan Ketelaar said his office has been located on South Ashley for more than 20 years. This development is literally two blocks from downtown – that has allowed his team to create something that’s difficult to do elsewhere, he said. On the east side of the site is commercial, on the west is a residential historic district. Washtenaw Dairy, which is well known and loved, is just down the street, he noted. Ketelaar described how the project’s original design – which conformed to the site’s D2 zoning – didn’t fit within this context. It overwhelmed the area.

Ketelaar went on to describe some of the attributes of the proposed design, and how the building’s features – such as a large common “living room” area on the main level – are designed with the young professional in mind. He and his team have been working on the project for over a year, Ketelaar said, and have gotten input from many people, including neighbors. It was an elaborate design process with several public forums, in addition to the design review board. They tried to be as sensitive as they could, he said.

Ketelaar also highlighted aspects of sustainability on the site, such as the proposed rain gardens. He noted that sustainable design is no longer just an add-on. Overall, he said he’s asking to do a planned project for only one reason – the height limit.

From left: Matt Kowalski and Alexis DiLeo of the city's planning staff; planning commissioners Bonnie Bona and Eleanore Adenekan; Ann Arbor resident Andrew Lineberry, who spoke during public commentary at the Jan. 19 meeting.

Mike Siegel of VOA Associates – the Chicago-based architecture firm that’s working on this project – described several key differences between the original design and the current proposal. [For details, see previous Chronicle coverage: "Public Gets View of 618 S. Main Proposal"] He talked about the public benefit that the project brings, citing the large open space courtyard off of Ashley, the wide landscape buffer on the Main Street side, and almost double the amount of required parking. Siegel also noted that the design was changed in response to feedback from the design review board. An entry tower was added on Main Street, and the corner of the building at Main and Mosley was strengthened. The changes reflect how the design evolved through collaboration with the review board, the community and planning staff, he said.

Shannan Gibb-Randall – a landscape architect with Insite Design Studio, the Ann Arbor firm that also built the new rain garden in front of city hall – reviewed details of the site’s landscaping and stormwater treatment. The open space off of Ashley will have fire pits, a place for raised vegetable beds and other amenities, she said: “This is going to be the backyard for people who live here.” She noted that the site is designed to take 100% of the runoff water from the site and direct it into the ground – that’s 990,000 gallons of water that won’t be flowing into the Allen Creek drain and on toward the Huron River, she said.

In the public commentary time at the end of the meeting, Don Wortman of Carlisle/Wortman Associates – which is co-owner of South Main Market across the street from the proposed project – said he welcomed the development but had concerns over its height, as well as traffic and parking issues. He noted that his office is located across the street from the project, in the South Main Market complex. In the context of the neighborhood, the development is too tall, he said. The next tallest building in that area is only three stories high – you have to go all the way to Ashley Mews, at Main and Packard, to find a similarly tall structure, he said.

Regarding traffic, Wortman said he observes numerous accidents along that part of Main Street. A left turn from northbound Main into the building’s underground parking would be a problem, and he hoped the traffic engineers examined that. It becomes a real choke point, and cars travel fast along that stretch.

The final issue Wortman raised was parking. There are problems with parking at South Main Market, he said – some University of Michigan employees use the lot instead of paying for parking, and there’s insufficient parking for the market’s tenants and customers. They’ve had to lease parking spaces at a nearby Fingerle Lumber lot, he said. Wortman said he’s worried that students living at 618 S. Main will park at South Main Market – it’s a serious issue, he said, and he hoped that the city council would address it.

Dan Ketelaar responded to Wortman’s commentary. Regarding the issue of turning off of Main Street, he noted that the same concern could be stated for southbound vehicles turning into South Main Market. As for parking, people generally just need to be told that they can’t park there, and they won’t do it, he said. Ketelaar told commissioners that his team would work with South Main Market to make sure that parking isn’t a problem.

618 S. Main Apartments: Commission Discussion

Questions from commissioners covered a range of topics, with many of their comments focused on design, parking and traffic issues. This report organizes their discussion thematically.

618 S. Main Apartments: Commission Discussion – Design

Bonnie Bona began the discussion by responding to Ray Detter’s concerns over the planning commission’s stance on design review. Having a public conversation about a project’s design is important, she said. The commission absolutely should talk about design, Bona said. But she was confident that the commission has no authority to deny a project based on its design.

Bona said she was glad that the architect had shown drawings of the original design, which conformed to D2 zoning. When considering whether to approve a planned project with a building taller than zoning allows, the question is whether the design fits the site better. The project is at the southern edge of the D2 zoning district, but most of the building height is along the northern and northeast part of the site. So the height doesn’t bother her from that perspective, Bona said.

Bona asked about the streetwall along Ashley. In some of the drawings it looks like a gated community, she observed, adding that she didn’t think that was the intent of the design.

Shannan Gibb-Randall, the project’s landscape architect, said that Jeff Kahan of the city’s planning staff had raised the same concern, so they’ll revisit that design. She described the grade change there as strange – it rises very quickly, and the level of the courtyard is quite a bit higher than the sidewalk. When they designed the streetwall, they were thinking of it from the perspective of the residents, not the pedestrians, she said. They can change it, though there are certain height requirements necessary to contain the rainwater, Gibb-Randall noted.

Evan Pratt said he still wasn’t sure he understood what the streetwall would look like, saying it sounds goofy. But that’s good for Ann Arbor, he added – the city needs more goofy things.

Kirk Westphal asked what the distance is between the building’s Main Street tower entrance and the building’s northern edge. The entire side that fronts Main Street is about 290 feet, said Mike Siegel, the project’s architect. The tower is located at about the midpoint on that facade. Westphal pointed out that D2 zoning requires articulation every 60 feet. This proposed design includes a section with more than 100 feet that’s non-articulated, he said. There are worse examples in downtown buildings, Westphal noted, but he wondered how this design passed muster in that regard.

Kahan noted that Chapter 55 of the city code now includes design provisions related to articulation. [Table 5:20:10 in Chapter 55 addresses this issue – it's a chart of building "massing standards" in the downtown character overlay zoning districts.] The maximum “modular length” for an non-articulated facade is 66 feet, he said, but the code is less clear about what “modular” means.

Chapter 55 describes three ways to create distinct spaces on a facade – that is, to provide articulation: (1) by altering the surface plane – with setbacks, for example; (2) by changing materials; and (3) by changing textures. When staff looked at the 618 S. Main design, Kahan said, they determined that the building included materials to delineate spaces – windows between columns on the building served that purpose, and broke up the facade. Regardless of this project, he added, the code needs to be clearer.

Westphal said he personally enjoys the building’s industrial aesthetic, but it seems that the city is giving the developer a pass simply because bricks are being used. He was concerned about setting a precedent.

Pratt felt that the building’s inset along that Main Street facade provided variation, as did the large windows. If the windows had been small, he added, he wouldn’t have felt the same way. He agreed that they should clarify the city code.

In general regarding the project’s design aesthetics, Pratt said he was glad to see the changes between the original design and the proposed project. The process that the design had been through was appropriate, he said. Pratt noted that not many people were attending the meeting that night, “and that’s a good sign” – a reference to the fact that if a project is controversial, people turn up to speak during public commentary. If the city had 10 projects that worked this well, it might be possible to say that mandatory compliance isn’t needed, he said. [Currently, it's mandatory for projects to go through a design review process, but compliance with suggested design changes is voluntary.]

Wendy Woods asked if the entrance off of Ashley would be open to the public. She also questioned whether the pool in the courtyard would be accessible, indicating some concern for the safety of children in the neighborhood. Ketelaar replied that the courtyard will serve as a backyard for the building’s residents – it’s not open to the public. The area will be walled off, which will act as a deterrent to keep people out who don’t live there, he said. But for residents, the Ashley entrance will be a main one. He said he wasn’t sure how the entrance would be accessed – perhaps by a swipeable key card.

618 S. Main Apartments: Commission Discussion – Parking

Kirk Westphal noted that some people have cited the amount of parking – about double the number of required spaces – as a public benefit. He indicated that he and others might not share that view. Will a parking space be included in the rent for each unit? he asked. Mike Siegel, the project’s architect, said there would be an additional charge for parking.

Westphal asked Jeff Kahan of the city’s planning staff whether that parking rental arrangement has ever been written into the development agreement. Not to his knowledge, Kahan replied.

Developer Dan Ketelaar weighed in, saying that if it were up to the design team, there wouldn’t be any parking in the project. But there’s demand for parking, and it’s what the neighbors want too, he said. The plan calls for including spaces for a couple of Zipcars, he said. It’s very expensive to build underground parking, he added. Surface parking could have been designed in place of the courtyard, he said, but that wouldn’t be the best design.

Westphal acknowledged that it’s always a struggle between providing parking, especially underground, or having lower rents and no parking. Parking is being subsidized, one way or another, he said, and that’s legal.

Wendy Woods noted that sometimes when residents of an apartment building are charged for parking, they look for free parking in the neighborhood. Are there any restrictions on that? Kahan replied that there are some restrictions, but residents of the neighborhood can get residential parking permits. He wasn’t sure if residents of 618 S. Main would be able to purchase such permits, however – he said he’d look into that.

Diane Giannola said she was concerned about guest parking. Is there any accommodation for that – if someone has weekend guests, for example? No, Ketelaar said. That’s something the design team didn’t consider.

Giannola cautioned that if the rental of parking for the building is too high, residents will buy residential parking permits instead – if the city allows that. It will force people into parking in the neighborhoods, especially for younger residents of the building, she said.

Ketelaar replied that this will be a learning experience for everyone. There’s always a concern about charging too much or too little for parking, he said. The cost of owning a car is about $5,000 to $7,000 a year, he said, so it’s much cheaper to just walk downtown, or use a Zipcar or public transportation. Ketelaar said he hopes to encourage that.

Giannola wondered if one of the parking levels could be converted into something else, if the demand for parking doesn’t materialize. Ketelaar noted that the parking spaces will be available for community members to lease too – the spaces are not just for residents of the building.

Evan Pratt noted that if this were a by-right project, no parking would be required at all. In this case, it’s included as a premium as part of the planned project. Because there are far fewer parking spaces than one per unit, he noted, in some ways the developer is taking a risk, in light of market forces. Pratt said the developer is trying to respond to community concerns, and Pratt hoped it would work out.

Bonnie Bona said she hoped that residents of 618 S. Main would not be allowed to purchase residential parking permits. The building is located in a D2 zoning district, not a residential district, she said.

Woods disagreed with Bona. When you move into a neighborhood, you become part of its fabric, she said. Referring to the letter of support from the Old West Side Association, Woods noted that the association is viewing this project as an anchor to the neighborhood. She didn’t think the city should make a distinction based on the zoning district.

Responding to a question from Woods, Ketelaar explained that there will be two entrances to the parking levels – one entrance off of Main, another off of Ashley, going to an underground level. The two garages aren’t connected, he said.

618 S. Main Apartments: Commission Discussion – Traffic

Dan Ketelaar clarified for Wendy Woods that vehicles exiting onto Main Street won’t be able to turn left onto Main – the vehicles will only be allowed to make righthand turns onto southbound Main. Woods asked Jeff Kahan if a traffic study had been completed.

Returning from president Barack Obama's speech on the morning of Jan. 27, The Chronicle encountered the aftermath of a two-car auto accident on South Main at the intersection with Mosley – one car has rear-ended the other. The site for the 618 S. Main project is in the background. Concerns were raised at the Jan. 19 planning commission meeting about possible traffic problems in this area.

It had, Kahan said. The only proposed modification would be to change slightly the traffic signal timing at the intersection of Madison and Main, north of the apartment building. Woods said she could imagine traffic backing up there. Backups could also be an issue along northbound Main, as people wait to turn left into the building’s parking entrance.

Eric Mahler echoed Woods’ concerns. He asked Kahan for more information about the traffic study.

Kahan noted that it’s not the planning staff who evaluated traffic issues – the city’s traffic engineers did that. The traffic engineers looked at the major corridors and intersections that are near this development. There will only be about 60 vehicles on each parking level, he said – so only 60 vehicles using the Main Street entrance, and 60 vehicles going in and out of the Ashley entrance.

The traffic study determined that even at peak hours, the volume could be accommodated – assuming that only righthand turns are allowed onto Main Street. All along the Main Street corridor people are making lefthand turns from northbound Main, he noted. The engineers didn’t feel the additional 60 vehicles would make a significant impact.

618 S. Main Apartments: Commission Discussion – Stormwater, Brownfield

Evan Pratt clarified with Shannan Gibb-Randall that there was capacity on the site to absorb the stormwater through infiltration into the ground. Not having runoff is a great public benefit, Pratt said. In general, the public benefits with this project are strong, he said, adding that it hasn’t always been so clear with other projects.

Kirk Westphal said the water runoff is being handled “elegantly,” and that it could also be of educational value for residents.

Tony Derezinski noted that the site includes contaminated soil and that there’s the potential for getting a brownfield designation. Is the project contingent on that?

Dan Ketelaar said that getting the site declared a brownfield – making it eligible for certain tax credits or TIF financing – is an important component of the financing. Armen Cleaners, located across the street at the northwest corner of Ashley & Mosley, is one of the most contaminated sites in the city, Ketelaar said. City staff have asked that Ketelaar look at possibly including the Armen Cleaners site as part of a brownfield plan for 618 S. Main – that’s why he hasn’t yet submitted a brownfield plan, Ketelaar said. His team is working on it with Matt Naud, the city’s environmental coordinator.

618 S. Main Apartments: Commission Discussion – Streetscape Improvements

Bonnie Bona raised the issue of the developer’s $117,800 contribution to the parks system, in lieu of providing dedicated public parkland. Dan Ketelaar has requested that the funds be used for street improvements on Main Street, between Mosley and William. Noting that the pedestrian experience along that stretch isn’t pleasant, Bona said she’d like to stipulate that the funds would be used for streetscape improvements, and she wondered if that could be written into the development agreement.

Jeff Kahan said that staff has been discussing the possible use of this type of contribution for purposes other than parks. The argument is that recreation in urban settings is different – recreation might involve going to cafes more than tennis courts. But no decision has been made yet regarding how to handle Ketelaar’s request, he said.

Bona endorsed spending the money on streetscape improvements, or putting it toward the proposed Allen Creek greenway. She asked that her comments be forwarded to city council.

Erica Briggs supported Bona’s suggestion. For downtown developments, the city needs to get creative about how the parks contributions are used. Ideas might include pedestrian improvements or public art, she said. It would go a long way toward improving the downtown.

Evan Pratt also agreed with Bona, but said he’d feel more comfortable consulting with the parks staff before making a recommendation. The attitude should be “Let’s make Main Street more park-like,” he said, but the parks system might have other needs.

Eric Mahler said he supports streetscape improvements, but cautioned that there might be unintended consequences. For example, if more pedestrians start using that stretch of Main Street, there will be more conflicts with vehicles going in and out of the parking garage. He hoped there would be sufficient warnings and signals to alert pedestrians – when people are in a hurry, it could be a dangerous situation.

618 S. Main Apartments: Commission Discussion – General Comments

Several commissioners praised the development. Tony Derezinski said it’s unusual to have near unanimity on a proposal like this. The design is creative, he said, and he thanked the developer and staff for their work. Kirk Westphal described the planned project as nearly ideal for this site, and he commended the developer for it.

Directing her comments toward Ray Detter, who was sitting in the audience, Wendy Woods said his statement during the public hearing had been refreshing. It was the first time she could recall him supporting a project.

Outcome: Commissioners unanimously recommended approval of the site plan and development agreement for 618 S. Main. The project now will be forwarded to the city council for consideration.

Rezoning for Society of Les Voyageurs

The commission was asked to consider rezoning of property and a site plan for an addition to the Habe Mills Pine Lodge, owned by the Society of Les Voyageurs. The property owned by the society, at 411 Longshore Drive near Argo Pond, is zoned public land, even though it’s owned by a private entity. The society is asking that the land be rezoned as a planned unit development (PUD), which would allow the group to build a a 220-square-foot, one-story addition to the rear of the existing lodge, on its east side.

Lodge for the Society of Les Voyageurs on Longshore Drive. The lodge faces Argo Pond.

The nonprofit society is a University of Michigan student and alumni club, focused on nature and the outdoors. Named for French-Canadian voyageurs of the Great Lakes fur trade, it was founded in 1907 and is one of the university’s oldest fraternal student groups.

The lodge was built in 1925 – about the same time as the city’s first zoning ordinance and zoning map. Five student members live at the lodge, and society alumni gather there for potluck Sunday dinners from September to April.

Three members of the society spoke briefly during the proposal’s public hearing in support of the changes. The city’s planning staff had recommended approval of the zoning change and site plan.

Rezoning for Society of Les Voyageurs: Public Hearing

Three people spoke during the public hearing for the project. Jim McNair and Mark Doman introduced themselves as members of the society. They both thanked the city planning staff – specifically citing Alexis DiLeo – for walking them through this complicated process and helping to resolve the issues that arose. McNair said it had been helpful to meet with commissioners last year at a working session to informally discuss the project – that’s a great process, he said.

John Russell also identified himself as a member of Les Voyageurs, and said he had purchased his home on Longshore Drive so that he could be close to the lodge. He fully supported the proposed changes.

Rezoning for Society of Les Voyageurs: Commission Discussion

Evan Pratt pointed to a section of the draft development agreement that specifically stated the permitted principal uses of the site: “The headquarters of the Society of Les Voyageurs, an organization of men and women who share a love of nature and the outdoors, and a dwelling for up to six occupants.” Citing a specific organization didn’t seem like the best long-term approach, he said, because the way this document reads now, no one else could buy or use the property.

Alexis DiLeo of the city’s planning staff said that if the society wanted to sell the property, a zoning amendment to the PUD would be required.

Erica Briggs apologized for missing the working session when this project had been discussed. She said it makes sense to find a way to allow Les Voyageurs to remodel, but she wasn’t sure why a PUD was the best option. She understood the desire to keep the society at that location. But to say that the project provided a benefit to the city – one of the requirements of a PUD – seemed to undermine the purpose of this type of zoning, she said.

DiLeo said she had prepared a memo for the society describing the requirements of two or three different zoning options that they might pursue, both residential and office. Variances and other modifications would have been required, she said – it was like trying to shoehorn a square peg into a round hole. Ultimately, it seemed that custom zoning would make the most sense.

Tony Derezinski noted that the addition is quite small, and that it gets too complicated to apply other types of zoning to a project this size. He described it as a creative use of the PUD. Derezinski also noted that over 1,000 invitations were sent out for a public meeting on this project, and only one person showed up. “That’s kind of convincing,” he said.

Kirk Westphal said that to him, it was an issue of fairness. It was the city’s “goof” that this site wasn’t zoned properly, he said. So to ask the owners to go through the expensive process of developing a site plan seems onerous, especially since it’s a use that doesn’t offend the neighbors.

Outcome: Planning commissioners unanimously recommended approval of rezoning and a site plan for Les Voyageurs. The project will now be forwarded to the city council for its consideration.

Accessory Apartment on Waldenwood

On the Jan. 19 agenda was a resolution to approve a special exception use at 3645 Waldenwood, which would allow an accessory apartment to be added to the single-family house there. It’s located in the Earhart Estates neighborhood, west of Earhart and south of Glazier Way, in the city’s northwest side.

According to planning staff, this is only the second time a special exception use has been requested for an accessory unit since the accessory dwelling ordinance was crafted in the early 1980s.

The apartment would be used by parents of the home’s owner, Laura Damschroder. No rent would be charged. The addition would include a one-car garage and a 596-square-foot one-bedroom apartment with a kitchen, living room and bathroom. It would attach to the existing 3,608-square-foot house.

Planning staff recommended approval.

Accessory Apartment on Waldenwood: Public Hearing

Only two people spoke briefly at the public hearing: the owner, Laura Damschroder, and the project’s architect, Mike Nicklowitz of Adrian Design Group. Damschroder said the motivation for the project is so that her parents can live at the home. Nicklowitz indicated he was there to answer any questions.

Accessory Apartment on Waldenwood: Commission Discussion

Wendy Woods asked whether the accessory unit would have its own utilities – a furnace and separate water source. Mike Nicklowitz of Adrian Design Group said the water supply will be pulled from the main house, and the apartment will be hooked up to the same gas line. However, it will have a separate furnace, as well as an electric subpanel.

Eleanore Adenekan confirmed with planning staff that the main house was about 3,000 square feet, and the addition would add roughly 600 square feet of floor space. She wondered if this size was in line with other houses in that neighborhood. City planner Matt Kowalski replied that it was a comparable size, even with the addition.

Kirk Westphal asked when the ordinance was crafted that allowed accessory units. That happened around 1983, explained Wendy Rampson, head of the city’s planning staff. This would be only the second application the city has processed since then, she said.

Westphal wondered how many accessory units have been built without seeking a special exception use from the city. Kowalski ventured that there weren’t many, but Rampson disagreed. When she worked on revisions to the ordinance about 10 years ago – changes that ultimately did not get enacted – city staff discovered quite a few unauthorized accessory dwellings, especially in older neighborhoods.

Westphal indicated that this was simply a long way for him to say that he appreciated the homeowner going through this process – though he said he wasn’t sure this type of project should require a separate process.

Erica Briggs also expressed appreciation. ”Accessory dwelling units can be an asset to our community and I hope we see more in the future,” she said.

Woods asked what would happen when the property changes ownership. Kowalski said a note about the accessory unit would be added to the city’s property tracking database. But the city’s planning staff doesn’t monitor property sales closely, he said, so enforcement would likely depend on neighbors reporting any problems. He said he felt confident that it wouldn’t turn into a rental unit, and that it would remain occupied by someone closely connected to owners of the main house – even if ownership changed hands.

Bonnie Bona asked Kowalski to clarify for the general public the differences between a duplex and an accessory apartment. The main difference, he said, is that you can’t charge rent for an accessory unit. It also has to be occupied by someone related to the owner, he said.

That’s a key difference, Bona said, and it might make people feel more comfortable with having this type of unit in their neighborhood.

Outcome: Planning commissioners unanimously approved the special exception use for an accessory apartment at 3645 Waldenwood.

Present: Bonnie Bona, Eleanore Adenekan, Erica Briggs, Tony Derezinski, Diane Giannola, Eric Mahler, Evan Pratt, Kirk Westphal, Wendy Woods.

Next regular meeting: The planning commission next meets on Tuesday, Feb. 7 at 7 p.m. in the second-floor council chambers at city hall, 301 E. Huron St., Ann Arbor. [confirm date]

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618 S. Main Project Moves to City Council

Chronicle Staff — Fri, 20 Jan 2012 03:36:31 +0000

The site plan and development agreement for 618 S. Main – a major new residential project in downtown Ann Arbor – received a unanimous recommendation of approval from the Ann Arbor planning commission at its Jan. 19, 2012 meeting. The project now will be forwarded to the city council for consideration.

The building as proposed would be 85-feet tall – 25 feet higher than permitted in the D2 zoning district, where the site is located. Planned projects allow for some flexibility in height or setbacks, in exchange for public benefits. They don’t allow as much flexibility, however, as a planned unit development (PUD).

Six people spoke during a public hearing on the project, including Ketelaar and two representatives from his design team. In addition, Barbara Murphy spoke on behalf of the Old West Side Association in support of the project, as did Ray Detter, who said he represented the Downtown Citizens’ Advisory Council and the design guidelines neighborhood group – a coalition of eight neighborhood groups in the city. One neighbor opposed the project because of its height.

In the public commentary time at the end of the meeting, Don Wortman of Carlisle/Wortman Associates – which owns South Main Market across the street from the proposed project – said he welcomed the development but had concerns over its height, as well as traffic and parking issues.

Parking and traffic concerns were also raised by some commissioners, but the project generally received praise for its design and its potential to enliven that part of the city. The planning staff had recommended approval.

This brief was filed from the second-floor city council chambers at city hall, 301 E. Huron St. A more detailed report will follow: [link]

DDA Lifts Parking Rates, Sets 2012 Calendar

Dave Askins — Fri, 06 Jan 2012 22:51:27 +0000

Ann Arbor Downtown Development Authority board meeting (Jan 4, 2012): The DDA board dispatched with its January meeting in just under a half hour. The discussion by the board and the public about its main agenda item – parking rate increases – had already taken place at previous meetings.

Ann Arbor Downtown Development Authority board member Roger Hewitt cleans his spectacles before the start of the DDA's Jan. 4 meeting. (Photos by the writer.)

The parking rate increases that will affect many downtown visitors will not take effect until Sept. 1. Among the increases to take effect eight months from now are an increase in on-street metered parking from $1.40/hour to $1.50/hour and an increase in the hourly rate for parking structures from $1.10/hour to $1.20/hour.

Other increases are set to take effect on Feb. 1: an increase in the premium permit parking rate by $5/month (from $175 to $180); an increase in the Ann & Ashley and Liberty Square structure evening/Saturday rates by $1/entry (from $2 to $3); a $1 increase in the 415 W. Washington lot entry (from $3 to $4) and a $5 increase in monthly permit rates (from $80 to $90/month) there; and an increase in First & William lot permits by $10/month (from $105 to $115).

A change of the effective start date – from Feb. 1 to Jan. 21 – will apply only to the meter bag rates. They’re set to increase by $5/day (from $15 to $20).

Also at Wednesday’s meeting, the board approved its 2012 calendar. Board meetings are set for the first Wednesday of the month, when they’ve typically been held, except for July 4. That meeting date was shifted to Monday, July 2.

The board also heard the usual set of reports from various subcommittees covering a range of topics, from the future of the midtown area – which includes the AATA’s Blake Transit Center and the Ann Arbor District Library building – to electric charging stations.

During his regular report from the downtown area citizens advisory council, Ray Detter remembered Ray Fullerton, a former member of that body, who passed away on Dec. 18.

DDA Meeting Calendar

The board considered a resolution establishing its annual meeting schedule. The usual meeting time is the first Wednesday of the month. Board chair Bob Guenzel noted that in July, the first Wednesday of the month is July 4. He suggested moving the meeting to Monday, July 2, and board members were amenable to that.

Outcome: The board voted unanimously to adopt its 2012 meeting schedule.

Parking: Rates

The DDA board considered a set of parking rate increases – some effective starting Jan. 21 and Feb. 1, 2012, with others starting Sept. 1. The new contract under which the DDA operates the public parking system for the city of Ann Arbor gives the DDA the sole authority to set rates, but also requires the DDA to hold an annual joint working session with the city council on the subject of its parking plan. The working session took place on Nov. 14.

Another key feature of the contract is that 17% of gross parking revenues are paid directly to the city of Ann Arbor.

The mid-January and early February rate changes are estimated to generate a total of $133,000 in additional revenue annually. Increases and anticipated revenues are: raise meter bag rates by $5/day ($68,800); increase the premium permit parking rate by $5/month ($3,300); increase Ann & Ashley and Liberty Square structure evening/Saturday rates by $1/entry ($41,500); increase 415 W. Washington lot entry by $1 and increase permit rates by $5/month ($14,400); and increase First & William lot permits by $10/month ($5,000).

The change of the effective start date for the early-year rate changes (to Jan. 21 instead of Feb. 1) will apply only to the meter bag rates. The other set of early-year changes will be implemented starting Feb. 1.

Highlights of the more significant changes – to be enacted in September 2012 – include predominantly $.10/hour increases: hourly parking structure rates would increase from $1.10/hour to $1.20/hour; hourly parking lot rates would increase from $1.30 ($1.50 after 3 hours) to $1.40 ($1.60 after 3 hours); hourly parking meter rates would increase from $1.40/hour to $1.50/hour; and monthly parking permit rates would increase from $140/month to $145/month.

Of the categories of parking, monthly permits will increase percentage-wise the least (3.57%), while hourly structure rates will increase the most (8.33%).

The rate increases were the subject of a public hearing that started at the DDA board’s Nov. 2, 2011 meeting and continued through its Dec. 7, 2011 meeting.

At the Jan. 4 board meeting, it was Roger Hewitt who introduced the resolution to increase parking rates. He noted that the specific increases were laid out in the resolution. The increases had been previously discussed in committee and by the board, and had also been presented to the city council. A public hearing had been held on the subject that spanned two board meetings. He noted all four merchant associations in the downtown support the increases, and he described the rate increases as having been “thoroughly examined” by the public.

Prompted by a question from board member Nader Nassif, the clarification was provided that “hourly” parking does not refer to meters, but rather to the hourly rate charged at lots and structures.

Outcome: The DDA board unanimously approved the parking rate increases.

Parking: Monthly Report

Roger Hewitt gave the monthly parking report for November 2011 – the report is a standard part of every DDA board meeting. He noted that the revenues for the First & Washington lot were down to almost zero – it’s been closed because the land has been sold to Village Green to develop the City Apartments project. Overall revenues compared to November 2010 were up almost 11%, he reported. There had been a rate increase in the range of 6%, so revenues were up significantly above the rate increase.

The number of hourly patrons was also up, he said. Meter bag revenue was down because of construction being complete, he said. [Meter bags can be purchased to place over meters when spaces are needed for construction projects, for example.] Demand for parking remains strong, even in an economy that is not booming, Hewitt said. In the last 5 years, the number of hourly parkers increased by a total of around 500,000 people. So despite the sluggish economy, Hewitt said, a lot more people are coming to downtown Ann Arbor, and there’s a lot more activity downtown. Hewitt concluded that the new underground parking garage would be needed when it comes on line later this year.

Year-over-year comparisons of the number of Ann Arbor public parking system hourly patrons since 2009. (Image links to higher resolution file.)

Year-over-year comparison of Ann Arbor public parking system revenue since 2009. (Image links to higher resolution file.)

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: New Members of Downtown Area Citizens Advisory Council

Ray Detter gave the report from the DACAC, which typically meets the evening before DDA board meetings. Detter described how the DACAC is looking for additional members. By way of background, the enabling statute for downtown development authorities provides for the establishment of such a group:

125.1672 Development area citizens council; advisory body.
Sec. 22. A development area citizens council established pursuant to this act shall act an advisory body to the authority and the governing body in the adoption of the development or tax increment financing plans.

A city council resolution passed on Feb. 22, 2005 gave the DACAC its current definition, which includes a maximum of 15 members, all of whom need to be residents of the downtown area. Detter reviewed the membership requirement and said that the body had developed a list of 10 possible new members. At this point, Detter said, the DACAC needs three new members. Detter invited board members to convey any suggestions to city councilmembers, the mayor or to him.

Comm/Comm: Future of Midtown, Underground Garage

Reporting out from the downtown area citizens advisory council, Ray Detter noted that three students from Skyline High School and three from Huron High School had attended DACAC’s meeting. They’d gotten a lesson in downtown streets and geography, he said. Detter noted that the high school students were aware of the significance of the AATA’s Blake Transit Center and the downtown branch of the Ann Arbor District Library, and said they agreed that those two locations were central to downtown vitality.

Detter questioned the idea of putting 38 parking spaces on top of the new South Fifth Avenue underground structure as the process of determining the future of the structure’s top moves forward. Detter said he felt there should be some kind of “bow” to the desire that had been expressed in the community to have some kind of patio on top of the space.

During his report on the construction update for the underground parking garage, DDA board member John Splitt noted that the tower crane had been taken down. Street lights were being installed in front of the library. Work on the mechanical systems is proceeding inside the garage – a permanent electrical line will be installed sometime this month. Concrete will continue to be poured in the walls, but surface work will not continue until the spring.

Board member Sandi Smith reported out from the Midtown Discovery project – that’s the name given to the process the DDA is facilitating to find alternative uses for city-owned surface parking lots, including the top of the underground parking garage. Smith reported that the DDA’s leadership and outreach committee had done the groundwork of assembling all the different previous plans for downtown, including the Calthorpe report and the A2D2 rezoning project. The committee has reviewed those, and the next step is to think about how to engage the public.

Smith reported a presentation from the Ann Arbor Transportation Authority to the DDA partnerships committee about the reconstruction of the Blake Transit Center and the connection across Fifth Avenue to Library Lane, a new east/west street that will be located between Fifth and Division, just north of the library building. She noted that the newly configured Blake Transit Center was planned to include a mid-block pedestrian connection of Fifth and Fourth avenues, running between the AATA parcel and the federal building to the north. Smith reported that the AATA is keeping its eye on potential for a new building on the former YMCA lot – north of William and south of the Blake Transit Center site – and is building the new transit center to anticipate future development there.

The partnerships committee had also heard from AATA board chair Jesse Bernstein about the AATA’s countywide plan, Smith reported. Bernstein told the partnerships committee that the Blake Transit Center would remain a center of activity for the AATA. [For Chronicle coverage of the new Blake Transit Center design, see "AATA Preps Stage for Future Transit Choice"]

Smith also noted that the committee had heard from Ann Arbor District Library director Josie Parker, who noted that AADL continues to have a tremendous amount of visitors for lectures and entertainment – not just checking out books. Smith also told her board colleagues that the AADL board had voted to begin looking again at the question of the downtown building. When the economic situation had changed a few years back, the board had paused the plan to replace the building. [For Chronicle coverage see: "Library to Restart Downtown Facility Review"]

Comm/Comm: Huron River

Reporting out from the downtown area citizens advisory council, Ray Detter said the DACAC had discussed the idea of connecting the consciousness of the downtown to the Huron River. A mechanism for achieving that would be to use the wayfinding signs already in place in the downtown. Detter mentioned the idea of pointing people to the new bypass around the Argo Dam. Detter said the bypass would be a “dramatic addition.”

Comm/Comm: Recharging Stations

DDA board member John Mouat inquired about the status of the plan to install recharging stations for electric cars in some of the city’s parking structures. Susan Pollay, executive director of the DDA, said that technology is evolving very quickly. Dave Konkle, retired energy coordinator for the city of Ann Arbor (who works as a consultant to the DDA for its energy saving grant program), had held an interview session with four different companies that could supply charging hardware, Pollay reported. Some charge faster, but use more energy. Some charge slower, and are designed for overnight use. She and Konkle are working with Republic Parking, the DDA’s parking manager, and will have a recommendation on charging equipment next week.

Pollay said the University of Michigan is working on the same issue and the DDA would like to use the same technology so that people have a uniform experience if they visit downtown. She said the new underground garage is designed so that as many as 300 cars could plug in. However, the DDA is not going to purchase the hardware to service nearly that many cars initially, she said.

Comm/Comm: Ray Fullerton

In his summary from the DACAC, Detter reported the death of Ray Fullerton, one of the DACAC’s former members. Fullerton passed away a few weeks ago [on Dec. 18], Detter reported.

At a Feb. 8, 2011 meeting, Ray Fullerton passed out a letter to Ann Arbor city planning commissioners that made suggestions for revising the city's Parks and Recreation Open Space (PROS) plan. (Chronicle file photo)

Services will be held on Saturday, Jan. 7, at 11 a.m. at the First Baptist Church, 517 E. Washington St. in downtown Ann Arbor.

Detter described Fullerton as an advocate for open space, bicycling and walking. Fullerton would be very hard to replace, said Detter.

The Chronicle archive has recorded Fullerton’s remarks during public meetings – delivered to the DDA board, the Ann Arbor city council, the park advisory commission, and the city planning commission.

Fullerton was a board member of the Allen Creek Greenway Conservancy. His remarks in support of a city council resolution on the Allen Creek greenway, made on Aug. 4, 2011, were summarized in that meeting report this way:

The greenway concept has been around for 30 years, [Fullerton] said. The conservancy was not asking for money, he noted, just a statement of support. Fullerton said that he and Jennifer S. Hall, another conservancy board member, had started in January to put all the bits of the resolution together. [Hall is a former Downtown Development Authority board member as well as former member of the city's planning commission and greenbelt advisory commission.]

In March, the resolution had been presented to their board. Fullerton stated he hoped that in the council’s wisdom it would see fit to go forward. He asked the council to trust the conservancy. A big question is which side of the railroad to put the greenway on. Fullerton said he looked forward to the good times that families can have walking and biking along the greenway.

Comm/Comm: Warming Center

Orian Zakai addressed the board on behalf of a group that’s been discussing an all-day winter community center. She described how the idea evolved from conversations in the Occupy Ann Arbor camp at Liberty Plaza at Division and Liberty streets. That conversation took place between people who have a warm space to go to and people who spend their time on the streets, she said. A space is needed where people can support and empower each other and where they can teach and learn from each other, she said. The energy and enthusiasm for the idea comes from conversations that have taken place at Liberty Plaza, at the breakfast at St. Andrews, and at the downtown district library, Zakai said.

However, Zakai reported that officials they’ve approached have been discouraging. She noted that the Delonis Center –a homeless shelter on West Huron Street – is not a day-time warming center. Second, she said, the overall attitude of some of the people that the Delonis Center might serve could be summarized by someone who explained why they did not want use the Delonis Center. That person asked and answered a question: Do you want to live in an institution? Neither do I.

Zakai reported that another person described the shelter as similar to a prison or a hospital. Zakai described speaking with officials of the Delonis Center who said they don’t want a community of homeless people – they want people to be placed in housing, with jobs. But Zakai contended that when people wind up in places where they are clearly unwanted, it erodes their self-esteem and leaves them with little self-confidence and little energy for finding jobs or housing.

Zakai said that organizers of the all-day warming shelter have a plan and have volunteers to implement it. She said their biggest concern is locating a site. She described prejudice and fear of change as the greatest obstacles. She asked the board for help in locating a space that could be donated or leased for the project.

Present: Nader Nassif, Newcombe Clark, Bob Guenzel, Roger Hewitt, John Hieftje, John Splitt, Sandi Smith, Leah Gunn, Russ Collins, Keith Orr, Joan Lowenstein, John Mouat

Next board meeting: Noon on Wednesday, Feb. 1, 2012, at the DDA offices, 150 S. Fifth Ave., Suite 301. [confirm date]

Library to Restart Downtown Facility Review

Mary Morgan — Sat, 26 Nov 2011 21:27:45 +0000

Ann Arbor District Library board meeting (Nov. 22, 2011): After pausing a project to redevelop the library’s downtown building three years ago, the AADL board voted at their November meeting to provide funds for consultants to help resume the process.

The Ann Arbor District Library's four-story downtown building, located on the northeast corner of Fifth and William. The crane on the left is part of the construction of the underground parking structure to the north of the library. (Photos by the writer.)

A transfer of $45,000 from the library’s fund balance to the administration’s consulting budget will be used to start the process for determining the future of the AADL’s downtown location, director Josie Parker told the board. In late 2008, economic conditions had prompted the board to call off plans to construct a new downtown building – a process that had been well underway. It’s time to start that discussion again, Parker said.

The downtown library is adjacent to several other projects that will impact its future, including the large underground parking structure – and whatever is eventually chosen to be built on top of it – being constructed immediately to the north of the library.

In other business, the board approved a one-year lease extension of the office space that houses the Ann Arbor News archives. The library took possession of the archives in January 2010. AADL is digitizing and posting the archives online, as part of the library’s Old News project.

The board also was briefed about an audit for its 2010-2011 fiscal year, which ended June 30. The auditor – Dave Fisher of the accounting firm Rehmann – described it as a clean audit. He suggested that the board consider implementing a fund balance policy in response to a new reporting standard issued by the Governmental Accounting Standards Board (GASB). The board’s finance committee plans to take on that issue.

In her director’s report, Parker noted that AADL had again received the Library Journal’s five-star rating. It’s the highest rating awarded to libraries, and AADL was the only library in Michigan to achieve five stars.

Later in the meeting, Eli Neiburger – AADL’s associate director of IT and product development – gave a presentation about the library’s popular summer game, which this year had added an online component and achieved an unprecedented level of participation. He noted that although the game is AADL’s version of the traditional summer reading program, the word “reading” isn’t used to promote it. Feedback from previous years indicated that reading seems too much like homework, and discourages participation. ”Take the word reading out of the game, and people will read a lot more,” he said.

Restarting Review of Downtown Building

On the agenda was a resolution to transfer $45,000 out of AADL’s fund balance and into the administration’s consulting budget.

AADL director Josie Parker told the board that she’d asked the finance committee to introduce the resolution. She noted that in late 2006, the library had started exploring options for the future of the downtown building on South Fifth Avenue. They had convened focus groups, and hired architects to develop possible plans for the site.

In late 2008, the board voted to suspend that process, because of the economic crisis, Parker said. [See Chronicle coverage: "Citing Economy, Board Halts Library Project." The issue has been addressed at subsequent AADL board meetings as well: "New Downtown Library? If, When and Where," and "Board Renews Library Building Discussion"]

It’s now been three years, Parker said, and her administration is recommending that they pick up the discussion again. That effort would include looking at the process for determining how to provide public library services at the downtown location into the future. They’ll need to have some studies done in order to start up that conversation again, both internally and externally, she said. While much of the previous work is still relevant, enough time has passed so that fresh information is needed.

By way of background, the downtown library site, at the northeast corner of William and South Fifth, is in an area that’s undergoing transformation in several ways. Directly to the north, a large city-owned underground parking structure is being built, and is expected to be open next year. No decision has been made about what, if anything, will be built on top of that site, but that decision would have a direct impact on the library.

Across Fifth Avenue, the Ann Arbor Transportation Authority will be rebuilding its Blake Transit Center, the hub for AATA’s bus routes. Adjacent to BTC, the city-owned surface parking lot at the northwest corner of Fifth and William is one of the sites being analyzed by the Ann Arbor Downtown Development Authority for possible redevelopment.

At AADL’s Nov. 22 board meeting, Jan Barney Newman asked Parker if the library will be entertaining bids for this consulting work. That’s not required, Parker said. Depending on the work that she and her staff determine is necessary, they’ll likely ask specific firms to make proposals.

Outcome: The board unanimously approved the transfer of $45,000 to the administration’s consulting budget.

Extension of Lease for Archives

Added to the agenda at the start of Tuesday’s meeting was a resolution to renew the lease with Green Road Associates for one year, beginning Jan. 1, 2012. The annual rate of $38,000 is unchanged from the library’s current lease at that location, according to AADL director Josie Parker.

The location at Plymouth Park – an office park owned by First Martin Corp. off of Green Road, north of Plymouth Road – houses the Ann Arbor News archives. The library took possession of the archives in January 2010, a few months after the newspaper’s owners shut down the business. The library’s two-year lease at that site is coming to a close, Parker said.

She noted that a provision in the lease allows either party to end it with six months’ notice. Those terms are acceptable to the library, Parker said, giving them plenty of time to find other space and move, if necessary. Other tenants in the building include companies that are growing and that might need the space to expand, she said. “No one can not want a business in Ann Arbor to expand and grow,” Parker added, in explaining why AADL was willing to accommodate that possibility.

Parker did not cite any specific companies during her remarks. Firms that are located at Plymouth Park include NanoBio Corp. and Unival Inc., among others For more information about AADL’s newspaper digitization project, see Chronicle coverage: “Ann Arbor Library Set to Publish ‘Old News.’”

Outcome: The board voted unanimously to extend the lease for the Green Road facility.

Financial Report, Audit

Ken Nieman, AADL associate director of finance, HR and operations, gave a brief financial update to the board. The library ended October with an unrestricted cash balance of $14.7 million, he reported. The four line items that are currently over budget – purchased services, communications, software licenses and postage – are all expected to come back in line later during the fiscal year.

Nieman highlighted one item in the report’s listing of assets – $6.8 million in short-term certificates of deposit (CDs). He noted that these are invested through a program managed by the Bank of Ann Arbor, which invests the money in a variety of other financial institutions at $250,000 per institution. That amount – $250,o00 – is the limit that’s insured by the Federal Deposit Insurance Corp. (FDIC), Nieman explained. It’s a strategy to protect the library’s assets, he said. He told the board that he also intends to lower the amount kept in savings, currently at $2.8 million.

Dave Fisher of the accounting firm Rehmann gave the AADL board an overview of their audit for the fiscal year that ended June 30, 2011.

Later in the meeting, Dave Fisher of the accounting firm Rehmann gave a report on the audit that the firm conducted on financial statements for AADL’s 2010-11 fiscal year, which ended June 30, 2011. He noted that he and Sherry Brubaker of Rehmann’s Ann Arbor office had met with the AADL board’s finance committee on Oct. 31 and gone over the audit in more detail.

The audit gives a clean opinion of AADL’s financial statements, Fisher said. The audit also looked at AADL’s internal controls for systems like payroll and cash receipts.

Out of the library’s $7.5 million fund balance, $7.2 million of that is unassigned. If you divide that amount by AADL’s $12 million in annual expenditures, you’ll see that the $7.2 million equates to about 60% of expenditures – representing about 7 months of operating expenses, he said. “That is very good,” he said.

Total expenditures for the year were $12.034 million, with revenues of $12.249 million. That left a surplus of $214,746 for the year. Property tax revenues of $11.163 million accounted for about 91% of total revenues for the year, Fisher noted.

Fisher pointed out that three line items relating to personnel – salaries and wages ($5.669 million), employee benefits ($1.545 million) and employment taxes ($426,729) – account for 63.9% of total expenditures. That’s in the same range as other libraries audited by Rehmann, he said.

The library wasn’t required to make any adjusting entries, Fisher said, and its books are in good shape.

Fisher highlighted two additional issues for the board. As he had during his November 2010 audit report, Fisher noted that it’s important for the library to continue to monitor its compliance with IRS rules related to independent contractors, and to obtain W-9 forms when required. In the past, the IRS left nonprofits and government entities alone, he said, but the agency has started to audit and levy significant penalties in this area.

He also suggested that the board consider implementing a fund balance policy. This is in response to a new reporting standard issued by the Governmental Accounting Standards Board (GASB) – Statement No. 54. The new standard makes significant changes to the reporting of fund balances and to the financial statement classification of funds. Fisher said he’d discussed this issue with the board’s finance committee, and had sent Nieman some samples of possible policies the board could adopt.

There were no questions from board members regarding the audit. Earlier in the meeting, during her report from the finance committee, Nancy Kaplan had said the committee will be taking up the issue of developing a fund balance policy. She praised Nieman, thanking him for excellent management of the library’s investments and for controlling AADL’s exposure to risk.

Jan Barney Newman said that after working with Rehmann for several years, the library staff could anticipate what the auditors would require and she hoped that made the library easier to audit. Board president Margaret Leary expressed pleasure and pride to Nieman and Parker for the outcome of the library’s audit.

Outcome: The board voted unanimously to accept the audit report for fiscal 2010-11.

Director’s Report

Josie Parker, AADL’s director, reported that the library has received the Library Journal’s five-star rating again this year. Based on 2009 data, the Library Journal 2011 America’s Star Libraries recognized 262 public libraries this year out of 7,513 that were reviewed. It’s the fourth time that AADL has received five stars, the highest possible rating. In its category – libraries with budgets between $10 million to $29.99 million – AADL ranked fourth out of 10 libraries, and was the only Michigan library to achieve five stars.

AADL director Josie Parker

Parker said she wanted to recognize two other Michigan libraries that were ranked: Kent District Library in Comstock, and Benzie Shores District Library in Frankfort. Both received a three-star rating. Last year, Kent had also been rated at five stars, but they had decided to leave a co-op program and their circulation dropped. It was a wise financial decision for them, she said, but because of the data used to evaluate libraries in this rating system, it hurt them in the ratings.

This system looks at how a library is used, not what it spends money on, Parker noted. It’s also important to understand how policies impact the way that people use the library, and how data is recorded. AADL has a high circulation per capita – 58.9, the highest by far of any other five-star library (the next highest is 32.3). But AADL’s public Internet terminal use per capita, at 1.7, is tied with another library as the lowest in that category.

Parker explained that many other libraries require users to log off every hour. If no one else is waiting to use the terminal, that person can log back on again. But each time, it counts in the library’s statistics as another user. In contrast, at AADL someone can stay on the computer as long as they want, if no one else is in line to use it. So even though in each instance one person is using the computer for the same amount of time, it would result in different statistics, depending on the policy.

Parker also noted that she had attended the Friends of the Ann Arbor District Library meeting earlier this month. FAADL has received its fourth consecutive audit without any concerns or the need to make modifications, “which was a great moment for them,” she said.

Parker said she wanted to publicly acknowledge FAADL’s hard work, and noted that Sally Allen has served as treasurer for that entire four-year period and has done a magnificent job. Allen is now stepping down from that role, Parker said.

By way of background, FAADL operates a bookstore in the lower level of the downtown library, and gives proceeds to the library. In 2006, the shop was temporarily closed when it was discovered that the group had lost its nonprofit status in 2003 and hadn’t been audited in several years. According to an Ann Arbor News report at the time, there was no indication that the 53-year-old organization had misspent money or mismanaged its finances.

Play @AADL

At the board’s June 2011 meeting, Eli Neiburger – AADL’s associate director of IT and product development – had given a brief presentation on the library’s new online component of its standard summer reading program, which the library has set up as a game. On Nov. 22, Neiburger gave an update on the outcome of the summer game, noting one key to its success: Reading is never mentioned in the program’s description.

AADL director Josie Parker introduced Neiburger’s talk by saying that the summer game is an indication of how library service will change in the future, and why space for a 21st century library is imperative in this community. She said it would start a conversation with people in the community who might ask “Why have a library?”

Neiburger told the board that the summer game had an unprecedented level of participation, and a huge growth in adult participation. You could play by texting, in paper format, or online, he noted, and there was a great deal of overlap in modes of participation. Just over 1,000 people played online only, while nearly 7,000 people registered for the print version of the game. But there was an overlap of nearly 4,200 people who played both in print and online. Neiburger said he suspects that reflects how patrons use the library, too – although the amount of overlap would be even greater.

Screenshot of Play.AADL.org (Image links to AADL's Play website)

The game provided a variety of ways to earn points by completing tasks like checking out a book or other item (10 points), tagging an item in the AADL catalog (10 points), downloading music (10 points per track), writing reviews (200 points), or posting a comment (50 points). Between 200-500 points were awarded each time you attended an AADL event, where a code was announced that allowed you to redeem the points. Codes were also tied to locations within library branches, or to finding answers by searching the AADL website.

One point was awarded per page or per minute spent with media – either an item from the library, or from another source. You also got 100 points for completing a book or other item. Neiburger noted that nearly 8 million points were recorded in this category for books.

A total of 11,217,459 media points were awarded during the summer game, including almost 9 million points related to print. That shows this community still loves to read print in a big way, he said.

Points were also awarded when people earned badges for finding codes based on certain clues. Some clues pointed to information on AADL’s website. Others, like the AA Streets Sweeper series, combined online information with real-world sites – in this case, partnering with the Downtown Ann Arbor Historical Street Exhibit Program. For example, to earn the AA Streets Sweeper #3 badge, players followed this clue: ”Courthouse Square holds a lot of history! See if you can find the panel with the codes on it and learn something along the way. Visit the glass panel on the street and the online version to find both codes!”

Some students reported that searching for information to get the AA Streets Sweeper badges brought them to downtown Ann Arbor for the first time ever, Neiburger said.

In total, 155 different badges were available to earn, and 32,201 badges were awarded – about half of them to adults.

The points could be exchanged for items at the AADL summer game shop, like T-shirts, caps or totebags.

Neiburger also noted that the library took the word “reading” out of the game. The feedback they’d received in previous years was that reading seemed too much like homework. By making it open-ended, with an unlimited amount of points for a variety of tasks – all involving literacy skills – it became more popular. “Take the word reading out of the game, and people will read a lot more,” he said.

Throughout the game, the AADL posted a leaderboard showing point rankings for the top players. Neiburger said that one of the leaders in the top 20 for the entire game was a six-year-old boy. It’s a way for kids to see success in a way that’s not always possible in school, where recognition is more often given for athletic ability in sports.

In terms of logistics for operating the game, the only thing that was harder about this summer compared to previous years, Neiburger said, was order fulfillment of prizes that were redeemed with points. To handle that, once a week teen volunteers came to the library and filled orders, getting 200 points for each order they filled. Prizes could be picked up at any branch – the process mirrored the service of reserving a book online and picking it up at the branch most convenient for the patron. Many people hadn’t used this service before, Neiburger said, so picking up their prizes introduced them to it.

Eli Neiburger, AADL’s associate director of IT and product development.

The library filled about 2,700 orders during the summer game, and awarded 4,685 prizes – just for the online portion of the game.

The game also significantly increased site traffic to AADL’s website, as measured by page views – up 124% in July compared to last year, and up 139% in August. And even though the traffic has slowed since the game ended, it was still 49% higher in September compared to 2010.

As the game came to a close in August, Neiburger said the staff started hearing something they hadn’t heard before – people didn’t want it to end. So there are now two games that are ongoing: (1) Points-O-Matic Click-a-Tron, where people can earn points for selecting the best reviews of items in AADL’s catalog, indicating whether a review is helpful, or tagging a photo; and (2) Treasure Quest, a complex game that involves following clues to find keys that unlock “gates” hidden online.

Over 200,000 points have been awarded in these two games so far, Neiburger noted, even though the library hasn’t said anything about awarding prizes for these points.

In response to a board member’s question about whether other library systems are doing this kind of thing, Neiburger said he’s not aware of anything quite like AADL’s game. The software was written by AADL staff using open source code that’s available to any library “that has the chops for it,” he said. Parker added that AADL can’t provide the staff support to other libraries, but if other libraries have the expertise on staff, they can replicate the program using AADL’s code.

Several board members congratulated Neiburger and AADL staff for the work. Jan Barney Newman, who founded an educational game company called Aristoplay, said the point of games she designed was to learn, which is the point of the AADL’s games too. She said she hadn’t been a player this year, but planned to do it next summer.

Closed Session Scheduled

At the end of the meeting, the board intended to vote on setting a closed session for its Dec. 15 meeting for the purpose of discussing labor negotiations and the written opinion of its legal counsel.

Before the vote, however, AADL director Josie Parker noted that because a vote to discuss the opinion of legal counsel required a two-thirds majority of board members – and because only four of the board’s seven members were present – they could not authorize that purpose for going into a closed session, under the state’s Open Meetings Act. The vote for labor negotiations required only a simple majority.

Outcome: The board unanimously voted to set a closed session on Dec. 15 for the purpose of discussing labor negotiations.

Present: Rebecca Head, Nancy Kaplan, Margaret Leary, Jan Barney Newman. Also AADL director Josie Parker.

Absent: Barbara Murphy, Prue Rosenthal, Ed Surovell.

Next meeting: Thursday, Dec. 15, 2011 at 7 p.m. in the library’s fourth floor meeting room, 343 S. Fifth Ave. [confirm date] Update: At a special meeting held on Dec. 8, the AADL board cancelled its Dec. 15 meeting. The board’s next meeting is on Monday, Jan. 16, 2012.

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Public Gets View of 618 S. Main Proposal

Mary Morgan — Mon, 14 Nov 2011 13:21:30 +0000

Residents gathered in the sewing room of the former Fox Tent & Awning building on Friday night for the first public meeting about 618 S. Main – a proposed apartment building that fronts Main, Mosley and Ashley streets.

That part of town is perhaps best known for the local landmark Washtenaw Dairy, located less than a block away from the proposed development. At Friday’s meeting, donuts from the shop were offered as refreshment, next to a wall of drawings and maps of the project. Washtenaw Dairy owner Doug Raab was among the 50 or so residents who attended.

This architectural rendering of the 618 S. Main project was posted on a wall at the Nov. 11 neighborhood meeting about the project. This view is from the perspective facing northeast, from the intersection of Ashley and Mosley streets. (Photos by the writer.)

The building – a six-story structure, with additional apartments on a penthouse level – will consist of about 180 studio, one-bedroom and two-bedroom apartments, with rents likely in the $950 to $1,400 range. Two levels of underground parking are planned, with about 140 spaces. The project targets young professionals in their mid-20s to mid-30s, developer Dan Ketelaar told the group on Friday – people who are interested in an urban lifestyle, within walking distance of the downtown and University of Michigan campus.

Ketelaar hopes the project will transform that section of Main Street and perhaps encourage the Ann Arbor Downtown Development Authority to make improvements in that area, as it’s doing now along Fifth and Division.

Because the project as designed is about 80 feet at its highest point – 20 feet taller than what zoning would allow – it will be submitted to the city as a “planned project.” Planned projects allow for some flexibility in height or setbacks, in exchange for public benefits. They don’t allow as much flexibility, however, as a planned unit development (PUD). Ketelaar cited a large courtyard along Ashley as a benefit to the neighborhood. Another benefit he cited was the provision on site of double the amount of required parking.

Parking was among several concerns mentioned by residents during a Q&A on Friday with Ketelaar and his project team, which includes a landscape architect who also helped design the new plaza and rain garden in front of city hall. Several residents said parking and traffic are already an issue in that neighborhood.

City councilmember Mike Anglin – who represents Ward 5, where the project is located – urged Ketelaar to work toward narrowing Main Street south of Packard from four to two lanes, to slow speeds along that stretch. Ketelaar had mentioned the idea of improving that part of Main Street earlier in the meeting. He said he could suggest narrowing the road, but noted that it’s up to the city to make that decision.

Other issues discussed at the meeting include the need to integrate the development with the neighborhood, the project’s financing, and details of the building’s design. Environmental issues covered at the meeting included: the site’s brownfield status; stormwater management; and relation to the floodplain.

This is the second project to go through the city’s new design review process. The first project to be reviewed in this way – The Varsity Ann Arbor – had been approved by city council the previous night. The design review board will meet at 3 p.m. on Wednesday, Nov. 16 at the former Fox Tent & Awning building at 618 S. Main. That meeting, which is open to the public, will be followed by another community forum on Tuesday, Nov. 22 from 5-7 p.m. at the same location. Ketelaar has previously met with local business owners and members of the Old West Side Association board to discuss the project.

The project is expected to be formally submitted to the city later this month. After review by the city planning staff, it will be considered by the planning commission, which will make a recommendation to the city council. Construction could begin in the fall of 2012.

618 S. Main: Background & Presentation

Dan Ketelaar began by noting that the site sits on about an acre of land – roughly 44,000 square feet – bounded by Main Street and Ashley to the east and west, respectively, and by Mosley to the south. The property’s northern edge falls midblock, south of the Happy’s Pizza lot on Main and Affordable Vet Services on Ashley. Single-family houses line Ashley Street across from the site; all other sides face commercial property – South Main Market is across the street on Main.

The neighborhood meeting was held in the building of the former Fox Tent & Awning, which closed in late 2010. Other buildings on the site house Ivory Photo, Deluxe Drapery and Overture Audio. These commercial buildings – which were constructed in the 1930s – would be demolished to make way for the project.

Dan Ketelaar, president of Urban Group Development Co., the developer of the 618 S. Main project.

Ketelaar said his team began working on the project in March, looking for examples of the style they wanted to reflect. He pointed to photos posted on the wall of the room – images of Bach Elementary School, the old Argus building, Liberty Lofts – that evoke the character he says he wants to bring to this project. The buildings he cited are older, with brick facades. Liberty Lofts, at First and Liberty, is a former manufacturing plant that was converted to condos a few years ago.

The site is zoned D2, a designation for areas that transition between the densest zoning allowed (D1) and residential areas. For this site, D2 zoning allows for a maximum 400% FAR (floor-area ratio). FAR, a measure of density, is the ratio of the square footage of a building divided by the size of the lot. A one-story structure built lot-line-to-lot-line with no setbacks corresponds to an FAR of 100%. A similar structure built two-stories tall would result in an FAR of 200%.

With a 400% FAR, a building could be constructed up to 60 feet tall with 170,000 square feet of floor space, and still meet the zoning requirements.

Ketelaar noted that the site is in the southern part of the Ann Arbor Downtown Development Authority district, and he hoped his development would encourage the DDA to improve the Main Street section south of Packard – perhaps in a similar way to the DDA’s current Fifth and Division streetscape project.

He also contrasted his vision with that of Ashley Mews, a condo development up the street at Main and Packard. Ketelaar described that building as a “hardscape,” saying he’d like his project to have a “soft streetscape” by comparison. He pointed to photos of a residential urban development in Portland, Oregon, which converted old railroad cars into housing, with a stepped-back front entry of greenery. Ketelaar also hopes to evoke the ambiance of Portland’s Hotel Modera, which features outdoor gathering spaces with fire pits and other amenities. [Ketelaar's daughter lives in Portland.]

Mike Siegel of VOA Associates – the Chicago-based architecture firm that’s working on this project – reviewed previous designs that had been considered by Ketelaar for the site. The team had begun by conceptually envisioning what a building would look like as permitted by zoning. When he described it as a glass block that’s 60 stories tall, he was quickly corrected to 60 feet. “It’s been a long week,” he quipped.

The team initially considered putting in two buildings, with a narrow courtyard in the center. The structure facing Main Street would have been apartments, while the building on Ashley would have included townhouses and duplexes. Both would have been six stories tall. However, “we didn’t feel it was very sensitive to the neighborhood,” Siegel said.

A second version was designed, with a smaller building on Ashley. But that version didn’t create enough density to cover the cost of construction, Ketelaar said. He noted that it’s true with any business – if you’re making donuts, but you sell the donuts for less than it costs you to make them, you won’t stay in business very long. “It’s a reality of business,” he said, “and that’s what we all need to deal with.”

Residents and representatives of the developer look at drawings for a proposed six-story apartment building on 618 S. Main during a Nov. 11 neighborhood meeting, held in the sewing room of the former Fox Tent & Awning building.

Siegel said the development team worked with Ann Arbor’s planning staff and came up with the design they’re proposing. The intent is to soften the edge facing the neighborhood on Ashley, which is lined with single-family homes. The main massing of the structure faces Main and Mosley, with a large courtyard area off of Ashley.

The development team also knew that the project needed more than the minimum amount of required parking, Siegel said, “or the neighbors are going to scream.”

Ketelaar noted that the site requires only about 70 parking spaces. They could have designed a surface parking lot, like Liberty Lofts, but “that didn’t seem right,” he said. Their current proposal calls for building two parking levels underground, with between 130-140 parking spaces.

One issue is that the water table in this area is high, he said. They hit saturated soil about 10-12 feet below ground. So while one level of parking will be completely underground, the second level will be about halfway above ground – and that drives up the height of the building, he said.

At the tallest point – the top of the elevator shaft – the building is about 80 feet high, as currently designed. That’s about 20 feet taller than the D2 zoning would allow. So the development will be submitted as a “planned project,” a designation that allows for flexibility in height and setback requirements, in exchange for public benefits.

A “planned project” allows modifications of the area, height, and placement requirements related to permanent open space preservation, if the project would result in “the preservation of natural features, additional open space, greater building or parking setback, energy conserving design, preservation of historic or architectural features, expansion of the supply of affordable housing for lower income households or a beneficial arrangement of buildings.” However, all other zoning code requirements must still be met – including the permitted uses, maximum density, and maximum floor area.

Ketelaar pointed to the additional parking and greenspace in the courtyard as among the public benefits of the project.

Shannan Gibb-Randall – a landscape architect with Insite Design Studio, the Ann Arbor firm that also built the new rain garden in front of city hall – described the landscaping and other exterior features of the project. On the Main Street side, the 9-foot width between the street and the property line seemed too narrow, so the building will be set back an additional 5 feet from the property line, she said. Gibb-Randall also cited the Portland railroad car project as a model, with the intent to create layers of greenscape and richness to soften the front of the building. Balconies will also create a recess on the side facing Main Street, she said.

Ideally, the city and DDA would eventually allow parking along that stretch of Main Street, she said, which would help to calm the traffic. Vehicles tend to pick up speed along that part of Main Street, she noted, as the road widens to four lanes south of Packard.

For stormwater management, the project will use surface infiltration rather than underground detention, Gibb-Randall said. Large planters and porous pavement are among the strategies they’ll use – much like the design of the plaza and rain garden in front of city hall, she said.

Siegel concluded the presentation by noting that the project will use sustainable building techniques and aim for LEED Silver certification.

618 S. Main: Questions from Residents

The meeting was attended by about 50 people, including nearby neighbors as well as people who are active in development issues citywide. Among others, they included Ray Detter of the Downtown Citizens Advisory Council; former planning commissioner Eppie Potts; Christine Crockett, president of the Old Fourth Ward Association; Alan Haber, who’s spearheading an effort to create a community commons on top of the South Fifth Avenue underground parking structure; Ann Arbor Ward 5 councilmember Mike Anglin; and Barbara Murphy, vice president of the Old West Side Association.

For this report, questions and responses are summarized and organized thematically.

618 S. Main: Questions from Residents – Traffic, Parking

A woman identified herself as the owner of a house on Ashley, between Madison and Jefferson, that was built in the 1800s. Often, there’s no parking along Ashley now, she said, and traffic is heavy. She said she can’t imagine what it will be like with this new development. It will likely be worse, she noted, “and I don’t want that.”

Ketelaar said he didn’t think they could solve that problem – any development would have the same issues. Siegel noted the project will have about 140 parking spaces, double the number of required parking spaces. The development team also plans to have some vehicles on site from the Zipcar car-sharing service, as well as bike storage areas to encourage the use of alternative transportation.

Mike Siegel of VOA Associates, a Chicago architecture firm, points to a detail in the courtyard of the proposed 618 S. Main apartment complex.

In response to another concern raised about parking, Ketelaar said that the site is part of downtown, and the project is intended to attract young professionals in their mid-20s to mid-30s. About three-quarters of the apartments will be studios or one-bedroom units, he said. The apartments will be attractive to people who work in the growing high-tech sector, he said, like Barracuda Networks, which earlier this year announced plans to add several hundred employees here. These young professionals are active, he said, and the reason they live downtown is so that they can walk.

One resident said the 25-35 age range might be low – the apartments would also appeal to people in their 40s or older, she said. Ketelaar agreed, observing that people his age often had the same kind of desires, in terms of urban living, that young professionals had.

Another resident pointed out that the area is in a transition. The reality is that there’s no grocery within walking distance, for example, so most tenants would use their cars for that kind of trip. Someone asked whether the Ashley Mews condo development was fully occupied – that complex didn’t seem to have much impact on parking. It is full, Ketelaar said, and each unit has its own parking space within the structure.

Siegel noted that if a “by-right” project were built on the 618 S. Main site, it could have about 200 units and 70 parking spaces, which would be allowed based on the D2 zoning. The project that they’re proposing would have fewer units – about 180 – but double the parking (about 140 spaces).

Another resident noted that he lived on South Main and walked in that area frequently. From Jefferson to Hoover, parking in the neighborhood is already full, he said, adding that he didn’t there would be much difference in parking caused by the new development.

Siegel asked whether neighborhood parking permits might be a solution. A resident noted that in some areas of the neighborhood, residential parking permits are already required.

One resident asked whether the DDA is helping finance parking for the project. No, Ketelaar said, but he hoped the DDA would consider making improvements along Main Street south of Packard, including possibly adding onstreet parking to that stretch.

In response to a concern about the visibility of the first-level parking, Ketelaar said it will be enclosed so that passers-by wouldn’t be able to see it. There might be some kind of greenery screen used as well. The two parking levels won’t be connected – one will have an entrance off of Ashley, with the other accessed from Main Street. There will be some guest parking available, possibly as surface spots in the courtyard area.

618 S. Main: Questions from Residents – Building Structure

A resident asked how tall the building would be, and why it would be allowed to go higher than 60 feet. The proposal calls for six stories plus a penthouse level: The first three stories would form a “street wall,” with three additional stories above that set back a few feet. A penthouse level on the roof would be set back even further, allowing the units there to have verandas.

Ketelaar explained that a “planned project” designation allows for variances in height or setback. This project will ask for a height variance, he said. The public benefits that the project offers in exchange for that variance include a 17,000-square-foot courtyard and additional parking. He allowed that not everyone might agree that these are public benefits, but he thinks they are.

He also noted plans to install solar panels on the roof, to reduce the building’s energy costs. When asked whether the use of large windows throughout the building will contribute to energy loss, Siegel said the building will use insulated, high-performance windows, possibly tinted. Residents will be able to open the windows, he said.

One resident asked whether the mechanicals on the roof would be enclosed – does LEED certification address sound requirements? No, but the city’s building and zoning codes do, Ketelaar said. Siegel added that the mechanical systems will be surrounded by walls, but open on top.

In response to a query about more details regarding the units, Siegel said there will be three sizes for two of the apartment types – studio and one-bedroom units – and five different sizes for the two-bedroom units. Rents will likely range from $950 to $1,400 per month.

Another resident asked where the garbage and recycling would be located. There will be an area for trash and recycling on each floor, Siegel explained. Building staff will then empty the trash and recycling into a dumpster and containers on the north side of the building. The developer is negotiating an easement with the property owner on that north side to allow for trash and recycling trucks to make pickups from Ashley.

In response to another question, Siegel said the public entrance to the building will be off of Ashley Street. Residents will have another entrance off of Main.

How committed are the designers to the use of brick masonry? a resident asked. A decision on materials hasn’t been made yet, Ketelaar said. Siegel added that they’re very committed to using brick with steel detailing on the first three stories. He indicated a range of other architectural detailing that he hopes to include, including cornices at the street level and other ornamental touches.

618 S. Main: Questions from Residents – Neighborhood

One resident said he’d like to see the first floor be retail, adding that it would be “great for the neighborhood.” Ketelaar said he’d thought about it, but couldn’t figure out what might work.

Ketelaar said that when he first came to town in the late 1960s, there were a lot of businesses to serve downtown residents, such as drug stores and groceries. Though there aren’t that many now, he acknowledged, the idea is that with growth of developments to bring more residents, the services will follow.

Doug Raab, owner of Washtenaw Dairy, talks with Ann Arbor city councilmember Mike Anglin at the neighborhood meeting for the 618 S. Main apartment project. Washtenaw Dairy is located a block away from the proposed development.

A resident asked whether Ketelaar had considered putting his building on the empty lot where the Glen Ann project had been proposed. Glen Ann was a 9-story residential project that another developer had proposed and that the city approved, but it was never built. The vacant parcel is at the corner of Glen and Catherine streets, across town near the University of Michigan medical center.

Ketelaar said he hadn’t considered that. The 618 S. Main property is in a unique location, he added, close to downtown and the UM campus.

The same resident noted that neighbors are concerned about the impact of the development on the neighborhood, in part because apartment dwellers aren’t as invested in the neighborhood as condo owners, who would be less inclined to trash the neighborhood.

Ketelaar noted that condos aren’t selling now, and that apartments appeal both to young professionals as well as to older people like him, who have the same interests in finding places to live where you can walk downtown, and that require far less maintenance than a house. One of his goals is to create a community, he said – that’s why they’re designing the courtyard space with seating, a small pool (though not one for swimming), and an indoor common living room on the first level, where people can hang out.

When asked about public access, Gibb-Randall clarified that the courtyard isn’t a public park. It’s intended for use by residents. Ketelaar described it as the equivalent of someone’s back yard.

A resident noted that the neighborhood already is a community. How will residents of the development interact with the existing neighborhood? They’ll become part of it, Ketelaar replied. Just because people are new to the area doesn’t mean they’ll be bad, he said.

When asked about putting in a coffee shop as a way to help integrate the neighborhood, Ketelaar said he was concerned about competing with the existing coffee shop – presumably referencing Washtenaw Dairy, located less than a block away at Madison and Ashley. Doug Raab, an owner of Washtenaw Dairy, was sitting across from Ketelaar at Friday’s meeting. One of the residents responded by saying that with 200 more people in the neighborhood, they could use more than one coffee shop.

Ketelaar was asked about other projects he’s been involved with, and what the impact was like on the neighborhoods for those. He said he hasn’t done a lot of development in Ann Arbor recently. He had been a principal in the 601 S. Forest project, but was bought out. That residential development is being constructed now and was controversial when it went through the city’s approval process – Ketelaar noted that some people who had been vocal about that project were also at the current meeting. He also cited Ridgewood condos, on West Liberty east of Stadium, as another project he’d developed.

618 S. Main: Questions from Residents – Environmental Issues

In response to a question about the floodplain, Ketelaar said the site isn’t located in the floodplain – it’s a few hundred feet from the edge of the floodplain, which is to the south, he said. One resident commented that in the flood of 1968, waters covered that area, and that while new federal floodplain maps will be released in April 2012, he wasn’t convinced they’ll be accurate. Bob Wanty of Washtenaw Engineering, who is also working on this project, said they have to use the maps that are available.

Alan Haber, top center, asks a question while Julie Weatherbee raises her hand with another query. Dan Ketelaar, developer of the 618 S. Main project, is seated at the far left. Behind him is Shannan Gibb-Randall, a landscape architect for the project.

A resident asked how the stormwater system will work, given the building’s large footprint on the site, and the fact that there will be two levels of underground parking. Gibb-Randall said they plan to “max out” the courtyard in terms of greenspace to absorb the water. When asked if this approach will work in the winter, Gibb-Randall said yes. Her firm has done over 70 rain gardens in Ann Arbor, she said, and while there is a limited palette of plants that can handle the seasonal changes, it’s possible to do. She described how when plants put down roots, about a third of those roots eventually die – creating channels underground that allow water to flow through. She plans to use as many native plants as possible.

Mike Anglin – one of two Ann Arbor city councilmembers representing Ward 5, where this project is located – asked Ketelaar about the project’s brownfield status. The site is considered a brownfield because it includes an underground fuel tank. The site across the street – Armen Cleaners, at the northwest corner of Mosley and Ashley – is also a brownfield, and there are monitoring wells in the area because of contamination there.

The 618 S. Main project is developing a brownfield plan, which will be submitted to the city along with the site plan. Ketelaar said they’ll apply for tax increment financing (TIF) to help remediate the site, but he wasn’t sure what amount they’d seek at this point. Anglin said it would be useful for the community to have results from any environmental testing that’s done on the site. Ketelaar noted that those tests would be submitted as part of the brownfield plan.

The city had approved brownfield credits for 601 S. Forest in 2008, when Ketelaar was still involved in that project.

618 S. Main: Questions from Residents – Financing

In response to a query about taxes, Ketelaar said that the owners of Fox Tent & Awning were paying about $18,000 in taxes each year, because they had owned the property since the 1930s. After the new development is built, he said the taxes will increase to over $500,000 annually.

Ketelaar was asked if he is confident he can build the development, from a financial perspective. He explained that typically, a project like this is 65% debt financed, with 35% equity. In this case, he said, the project is eligible for financing from the U.S. Dept. of Housing and Urban Development (HUD), through a 40-year loan – that will be part of the financing package. He noted that even now, many banks aren’t lending.

Next Steps

When asked what would happen if the city didn’t approve a planned project for the site, Siegel replied that they would still want to develop a site that will improve the community. If all goes according to plan and the planned project is approved, construction could begin in the fall of 2012. However, Siegel added, sometimes it’s hard to predict what Ann Arbor’s city council will do or how long the process will take. It was a line that drew laughs from many of the residents, but Ketelaar called out to councilmember Mike Anglin, “Mike, you weren’t laughing!”

[Anglin perhaps found no humor in the situation because of recent developments in the saga of a project on South Fifth Avenue. Demolition of seven homes occurred earlier in the week as the start of City Place, a by-right residential project that many people see as inferior to another project – Heritage Row – previously proposed as a planned unit development on that same site. Anglin was one of four councilmembers who voted against Heritage Row. Most recently, he attempted to forestall City Place from moving ahead by proposing a second time to form a historic district study committee for that area, but did not get enough support from other councilmembers. For additional background, see Chronicle coverage: "Chapter Added to Fifth Ave. Historic Saga"]

Following Ketelaar’s quip, Anglin said he wanted to encourage Ketelaar to think about working to make Main Street a two-lane road along the section south of Packard. There’s no reason why it shouldn’t be just one lane in each direction, Anglin said, and it would help the community for Ketelaar to make that happen.

Ketelaar responded by noting that “all we can do is suggest it.” [Changes to city roads would involve the city government and, for trunk lines, the Michigan Dept. of Transportation.] He said he’d had a brief conversation about it with Susan Pollay, executive director of the DDA, but that the DDA and city council would make any decision regarding Main Street traffic lanes.

Anglin asked whether at least the group could leave the meeting that night with the idea that a traffic study will be done. Ketelaar replied that a traffic study will be done as part of the required site plan submission. He also said he’d be happy to talk with Anglin about making a presentation on this issue to the DDA.

Describing the meeting as wonderful, Ray Detter noted that this is the second project that will go through the city’s new design review process. The first project to be reviewed in this way – The Varsity Ann Arbor – had just been approved by city council the previous night, he observed.

The city of Ann Arbor adopted design guidelines in February 2011. New developments must be evaluated by the design review board, but compliance with the board’s feedback is voluntary.

Detter urged people to attend the design review board meeting at 3 p.m. on Wednesday, Nov. 16 in the same location, at 618 S. Main. That meeting will be followed by another community forum on Tuesday, Nov. 22 from 5-7 p.m. Ketelaar has previously met with some local business owners and members of the Old West Side Association board to discuss the project.

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City Place: ZBA Appeal Filed

Chronicle Staff — Fri, 04 Nov 2011 23:00:52 +0000

This past week, the block of Fifth Avenue south of William Street received renewed attention from city of Ann Arbor planning and development officials.

On Friday, Nov. 4, the developer of the City Place residential project filed demolition permit applications for seven addresses: 407, 411, 415, 419, 427, 433 and 437 S. Fifth Ave. The demolition permit applications will undergo flood plain review, grading review, historic review, plan review, and zoning review.

Submission of those seven demolition permit applications came after a filing with the city’s Zoning Board of Appeals earlier in the week (on Nov. 1) by owners of nearby properties. The three-point appeal challenges two decisions made by the city council and one made by the city planning manager in connection with the City Place project. The residential project would construct two apartment buildings separated by a parking lot, offering a total of 24 units and 144 bedrooms.

The council decisions challenged in the appeal were made at the Oct. 17, 2011 meeting and were subsequently reconsidered with the same outcome at the Oct. 24, 2011 meeting. One council decision involved the waiver of a landscaping buffer requirement. The other decision involved approval of revised site-plan elevation drawings.

Also the subject of the appeal is a decision by the city planning manager to consider revisions of the City Place site plan as “minor revisions,” which can be handled administratively.

The site of City Place has a long and contentious history. An alternative project called Heritage Row had been proposed – but twice rejected – by the city council in the summer of 2010. Heritage Row would have retained the seven houses in some form and constructed three apartment buildings behind them. The city council also rejected a recommendation from a historic district study committee that a historic district be established for the area. A recent attempt to revive a version of the Heritage Row project failed, when the new owner of the City Place project concluded it was not financially viable.

The zoning board of appeals (ZBA) is provided with broad powers by state statute. From the Michigan Zoning Enabling Act 110 of 2006: “It [the ZBA] shall hear and decide appeals from and review any administrative order, requirement, decision, or determination made by an administrative official or body charged with enforcement of a zoning ordinance adopted under this act.”

Under the rules of the ZBA, the most likely date on which the appeal would be heard is Dec. 14. (The next regular meeting of the ZBA is scheduled for Nov. 16, 2011.) The nine-member body consists of Candice Briere, Wendy Carman, David Gregorka, Carol A. Kuhnke, Sabra Briere, Erica Briggs, Alex Milshteyn, Jason Boggs and Perry Zielak.

The ZBA is chaired by Kuhnke, an attorney with the firm Davis & Kuhke, P.C.

Candice Briere (no relation to Sabra Briere) works for ~~Atwell-Hicks~~ Atwell, a real estate consulting firm. Wendy Carman serves on a city committee that has been reviewing zoning regulations for the R4C districts. David Gregorka is vice president of operations at HealthMedia Inc. Sabra Briere is one of a maximum of two city councilmembers who can serve on the board. Erica Briggs also serves on the city planning commission. Alex Milshteyn is a real estate broker, as is Jason Boggs. Perry Zielak works at the University of Michigan’s Ford School of Public Policy.

Heritage Row Proposal Withdrawn

Chronicle Staff — Fri, 21 Oct 2011 15:52:07 +0000

According to a city council source, developer Jeff Helminski has withdrawn the revised proposal for Heritage Row, a planned unit development on South Fifth Avenue. A different project, City Place, is now expected to be built on the same site by the same developer, though some possibility exists to contest the City Place project via the city’s zoning board of appeals.

The plan for the matter-of-right City Place would demolish seven houses and construct two apartment buildings separated by a parking lot. The two City Place buildings would comprise 144 bedrooms in 24 6-bedroom units. By contrast, Heritage Row would have constructed three buildings behind the row of seven houses and either rehabilitated or reconstructed the seven houses. That project would have included up to 85 units with 180 bedrooms.

At its Oct. 17 meeting, the city council gave initial approval to a version of the Heritage Row PUD that was considerably revised from a version it had rejected in June 2010. The second and final vote on the revised Heritage Row project would have been taken place at an extra meeting scheduled for Oct. 24. That meeting is still scheduled to take place. The vote on Oct. 17 was 8-3. Voting against the proposal were Marcia Higgins (Ward 4), Sabra Briere (Ward 1) and Stephen Kunselman (Ward 3).

The project has a long and controversial history dating back four years. The city council voted at its Oct. 3 meeting to reconsider the Heritage Row, which it had previously rejected about 14 months ago. The council then voted to postpone a decision on the project so that negotiations could take place between the developer, city staff and councilmembers about possible revisions. By offering concessions that could make the project more financially viable, the council hoped to induce the developer to divert from his imminent intention to construct City Place.

At the council’s Oct. 3 meeting, a letter was discussed which councilmembers had received from the developer, Jeff Helminski. That letter outlined his requirements for concessions that he would need in order to build Heritage Row instead of City Place. At the Oct. 3 meeting, councilmembers expressed clear dissatisfaction with elements of Helminski’s letter. However, all the key points from the letter, including the elimination of any on-site parking requirement, appeared to have been incorporated into the revised proposal considered at the council’s Oct. 17 meeting.

[.pdf of marked up Heritage Row supplemental regulations as presented on Oct. 17][.pdf of comparison chart between original Heritage Row and revised proposal as presented on Oct. 17] [.pdf of Oct. 3 letter from developer]