City administrator Steve Powers was game enough to don as a hat the “meter moon” he was presented during the April 2, 2014 DDA board meeting by Shary Brown of WonderFool Productions. (Photos by the writer.)

A $674,264 grant to support the Ann Arbor Area Transportation Authority’s getDowntown program will allow employees of participating downtown Ann Arbor businesses to use their go!passes to ride the bus for another year, without themselves paying a fare for any of their bus boardings. That’s a program the DDA has funded out of public parking system revenues for over a decade

In other transportation-related business, the board approved a resolution that expresses notional support, but not does not commit any funding, for the third phase of a study for a high-capacity transportation system – stretching from US-23 and Plymouth southward along Plymouth to State Street, then further south to I-94. The third phase of this connector study will be an environmental review. The resolution of support will be used as part of an application, due April 28, for a U.S. Department of Transportation TIGER 2014 (Transportation Investment Generating Economic Recovery) grant.

A $600,000 grant to the Ann Arbor Housing Commission will be invested in capital improvements to two properties in or near the DDA tax capture district: Baker Commons and Miller Manor. Baker Commons is a 64-unit building located at the southeast corner of Packard and Main, within the DDA district. Miller Manor is a 103-unit building on Miller Avenue outside the DDA district, but within a quarter-mile of the district boundary. That conforms with the DDA’s policy on use of its tax increment finance (TIF) funds for housing. The $600,000 is to be paid in three $200,000 annual installments starting this year.

The board also approved a policy that provides guidelines for defining a “community benefit” – when it comes to evaluating the elimination of on-street parking spaces in downtown Ann Arbor. That policy comes in the context of a related city council-approved policy setting the fee for permanent removal of an on-street metered parking space. If a new development requires the elimination of an on-street parking space, the developer is required to pay $45,000, plus some of the projected future revenue the space would have generated. But an exception can be granted by the DDA – which operates the city’s public parking system under contract with the city – if it’s determined that the parking space removal is a “community benefit.” Exceptions could include new developments that meet or exceed goals laid out in various existing plans or public health and safety codes.

In other business, the DDA board denied the appeal of a request made under the Freedom of Information Act, affirming a decision to redact a portion of a public document that had been available for several years in un-redacted form on the city of Ann Arbor’s website.

The board also held a closed session lasting about a half hour, citing a desire to review the written opinion of legal counsel.

During public commentary, the board heard a pitch from Alan Haber for the DDA to be a partner in creating an Earth Day (April 22) celebration on the surface of the Library Lane underground parking structure. Also during public commentary, the board heard from Shary Brown, thanking the DDA for its past support of FoolMoon and FestiFools. This year’s events, held in downtown Ann Arbor, take place on the first weekend in April.

Among a range of various updates, the board received a presentation from public art commissioners on the status of the East Stadium bridges public art project. It’s a presentation that the art commission is providing to several boards and commissions, including the planning commission at its April 1, 2014 meeting.

Funding for go!pass

The DDA board considered a resolution funding the getDowntown’s go!pass and other programs with a grant of $674,264.

This is a previous edition of the go!pass, subsidized by the Ann Arbor Downtown Development Authority. A swipe through the fare box of an AAATA bus lets its holder ride AAATA buses an unlimited number of times.

A go!pass allows employees of downtown organizations to ride the bus, without themselves paying a fare for any of their bus boardings. The DDA has funded the program – out of parking system revenues – for over a decade.

Fares for go!passes are paid by the Ann Arbor DDA out of a grant from the DDA board to the Ann Arbor Area Transportation Authority’s getDowntown program.

That amount includes operational and administrative overhead as well as reimbursements for fares.

Under the rules of the program, a business or organization located within the DDA’s tax capture district can purchase bus passes for its employees for a nominal $10 apiece.

However, an “all-in” rule of the program requires that passes must be purchased for all employees, whether the passes will be used by every employee or not.

The DDA reimburses the AAATA based on the actual use of go!passes, which has shown steady increases over the last 10 years:

Fixed-route AAATA ridership by year for rides taken under the getDowntown go!pass program (red). (Data from AAATA charted by The Chronicle.)

As a fraction of total rides taken on the AAATA, go!pass rides account for about 10%. The amount reimbursed by the DDA per go!pass use is $0.90. A “use” is a boarding of a bus, not a “connected trip.”

If a go!pass holder has a commute that involves a transfer from one bus route to another, then commuting both ways to work – which would count as just two connected trips – would generate a total of four boardings. The $0.90 go!pass cost per boarding is based on the number of boardings an average holder of the AAATA’s 30-day pass makes – divided into the cost for such a pass. A 30-day pass, with unlimited boardings, is available to anyone and costs $58. A holder of a 30-day pass who commutes both ways to work five days a week, using routes that require a transfer, would effectively be paying $0.64 per boarding [58/(22.667*4)]. Transfers don’t cost any extra on the AAATA system – so compared to the $1.50 full fare, such a rider would be paying $1.30 per trip.

A breakdown of the specific costs the DDA board was asked to fund at its April 2 meeting includes the following, which amounts to $674,264 for FY 2015, compared to $610,662 in FY 2014. The amounts allocated last year for each item are indicated in square brackets. Descriptions are summarized from getDowntown descriptions.

• getDowntown: [$40,488] $40,000. Support for programs, services, outreach and marketing to encourage downtown employers/employees to use transportation alternatives. 2015 Survey of Decision Makers and Employers.
• go!pass: [$479,000] $529,000. Transit incentive for employees. Cost increase due to estimated 5% increase in ridership over FY 2014. Reimbursement is $.90 per ride.
• NightRide improvements and go!pass discount: [$18,233] $20,500. For evening employees who depend on transit to get to work. Increase in amount reflects an increased demand for service and increase in ridership.
• Route #4 Washtenaw enhanced service: [$56,363] $57,772. Bus route with highest downtown employee ridership. The increase reflects a 2.5% cost of living increase due to increase in diesel fuel cost and operator wages.
• Route #5 Packard enhanced service: [$16,578] $16,992. Route used by significant numbers of downtown employees. The increase reflects a 2.5% cost of living increase due to increase in diesel fuel cost and operator wages.
• ExpressRide go!pass discount: [$0] $10,000. Service from Canton and Chelsea to Ann Arbor.

Funding for go!pass: Board Deliberations

Keith Orr introduced the resolution on go!pass funding. He noted that the resolution being considered by the board continues funding that goes back about 12 years. Orr described the getDowntown program as a partnership between several organizations – the DDA, the city of Ann Arbor, and the Ann Arbor Area Transportation Authority. The DDA has always been supportive of getDowntown, because the whole point of the program is to get more people downtown, Orr said.

Orr described the go!pass program as a huge success in alleviating the parking strain on downtown. Orr then ticked through the individual categories of funding making up the $674,264 grant, which he said had been provided by getDowntown on request from the operations committee. He described the overall increase as about a 10% increase.

Director of getDowntown, Nancy Shore, was in the audience to answer any questions. Board members didn’t have any.

Al McWilliams abstained from the vote, noting that getDowntown is a client of his marketing firm, Quack!Media.

Outcome: The board voted to approve the getDowntown funding, with McWilliams abstaining.

Support for Continuing Connector Study

The board considered a resolution, added during the meeting, expressing notional support, without committing any funding, for the third phase of a study for a high-capacity transportation system. The system might be built along a corridor stretching from US-23 and Plymouth southward along Plymouth to State Street, then further south to I-94. The third phase of this connector study will be an environmental review.

The resolution of support will be used as part of an application, due April 28, for a U.S. Department of Transportation TIGER 2014 (Transportation Investment Generating Economic Recovery) grant.

The lead agency for the study, which is now in its second phase, is the Ann Arbor Area Transportation Authority. This second phase is an alternatives analysis. The alternatives analysis phase will result in a preferred choice of transit mode (e.g., bus rapid transit, light rail, etc.) and identification of stations and stops. The study first winnowed down options to six different route alignments. Those six routes had been further reduced to two possibilities. Additional modeling work is being done on those two alternatives.

The first phase of the project – a feasibility study completed in 2011 – concluded that there was sufficient travel demand in the corridor to warrant some kind of high-capacity transit system.

Support for Continuing Connector Study: Board Deliberations

Roger Hewitt introduced the resolution and gave the background on the study. He described the mathematical modeling as using very complex software and data. The modeling generated ridership projections for various route choices, he explained. In the southern part of the route, there were discernible differences in ridership projections for different route choices, he said. In the northern part of the route, different routes did not display as marked a difference.

Out of the six, the technical committee had settled on two preferred routes that come from the north down through the middle of town. Those two routes are now being re-modeled after some revisions were made to those routes. One is a longer route that has more stops, while the other is a shorter route with fewer stops.

Hewitt allowed that the process had drawn out longer than anticipated. He did not think a final report would be ready before the end of the summer. He described the process as under on budget, but over on time. The environmental study phase of the project, Hewitt explained, would start after the completion of the current phase, which will determine a locally-preferred alternative.

There’s the potential for receiving federal funding for the environmental study, he continued. That would come through the TIGER program. The current round of funding applications are due by 28 April, Hewitt said. The advice of representatives on the technical advisory committee – which include representatives from WATS and MDOT – is that it’s probably too early to think that the project would receive a federal award.

But there was some value in putting the project on the federal funding radar so that in the next round of funding, it might increase the chances that the project would receive a grant award, Hewitt indicated. One of the criteria used to evaluate the merits of the federal grant is the number of partners who are involved in the project, he said. Hewitt noted that the project is a partnership between the AAATA, the city of Ann Arbor, the DDA and the University of Michigan.

Outcome: The board unanimously approved the resolution urging the continuation of the connector study to a third phase, which will include an environmental study.

Housing Commission $600K Grant

The board considered approval of a grant to the Ann Arbor Housing Commission for $600,000 for capital improvements to two properties in or near the Ann Arbor Downtown Development Authority tax capture district: Baker Commons and Miller Manor.

Baker Commons is a 64-unit building located at the southeast corner of Packard and Main, within the DDA district. Miller Manor is a 103-unit building on Miller Avenue outside the DDA district, but within a quarter-mile of the district boundary. That conforms with the DDA’s policy on use of its tax increment finance (TIF) funds for housing.

FoolMoon “meter moons” were set at the seats of all DDA board members, including Bob Guenzel.

The $600,000 is to be paid in three $200,000 annual installments starting this year. The grant will support planned capital improvements at the two public housing facilities. [.pdf of Baker Commons plan] [.pdf of Miller Manor plan]

The $600,000 amount pushes the total contribution by the DDA to AAHC – from 2012 through 2016 – to at least $1.16 million. The requested April 2 DDA board action came in addition to a $300,000 grant made by the DDA board to AAHC for Baker Commons a year ago at its March 6, 2013 meeting. That grant was for driveway and sidewalk replacement and repair; installation of energy-efficient lighting; insulation and air sealing; window replacement; adding a second entrance; door replacement; upgrade of fixtures appliances, flooring and cabinetry; replacement of heating and cooling units; generator replacement, elevator replacement, upgrade of common area furniture, and installation of additional security cameras. The DDA board’s April 2 resolution extended the term of the $300,000 grant, as the AAHC has not yet used the funds.

Prior to that, at its Oct. 3, 2012 meeting, the DDA board had granted $260,000 to the AAHC for the replacement of the roof on Baker Commons.

For many DDA board members, the $600,000 grant to AAHC this year was contingent on action by the city council to grant a similar $600,000 request made by AAHC of the city of Ann Arbor. At its March 3, 2014 meeting, the council directed the city administrator to develop a budget amendment that would allocate $600,000 from the city’s affordable housing trust fund to help the AAHC pay for capital improvements.

Approval of that amendment by the city council would be contingent on the closing of the sale of city-owned property at Fifth & William in downtown Ann Arbor – the former Y lot. Net proceeds of the sale, at around $1.4 million, are to be deposited in the affordable housing trust fund. The closing on the property took place on April 2.

Housing Commission $600K Grant: Board Deliberations

Joan Lowenstein introduced the resolution on the grant to the Ann Arbor Housing Commission. The partnerships committee of the DDA had received additional details from AAHC executive director Jennifer Hall, Lowenstein reported. The timing of the allocation would fit in with the DDA budget allocations, she noted, saying that the grant was paid out in three separate years.

Lowenstein also pointed out that the resolution incorporates a clause that extends the term of an existing $300,000 grant from the DDA to the AAHC that was made in 2013. The money had been awarded but has not yet been used by the AAHC, she said. If the grant were not extended, then it would sunset under DDA board policy.

Hall was present at the meeting in the event that board members had any questions, Lowenstein said. They did not.

John Mouat said he wanted to remind people that the Ann Arbor Housing Commission is a long-time client of his architectural firm, Mitchell & Mouat Architects – so he would be abstaining.

Outcome: The $600,000 grant to the Ann Arbor Housing Commission was approved, with Mouat abstaining.

Definition of Community Benefit for On-Street Parking Removal

The DDA board considered a resolution to define “community benefit,” for the purposes of evaluating the elimination of on-street parking spaces in downtown Ann Arbor. The action was taken in response to a city council directive passed earlier this year.

The resolution would set a policy that defines “community benefit” as including new developments that meet or exceed goals laid out in various existing plans or public health and safety codes. The only specific planning documents mentioned in the community-benefit policy are the DDA’s development plan and the city’s non-motorized plan. [.pdf of policy considered at April 2, 2014 DDA board meeting]

If the removal of an on-street parking space does not provide a community benefit, then a developer is required to pay $45,000 per space, as well as the amount of projected revenue the space would generate over the next 10 years. That was the policy adopted by the Ann Arbor city council at its Jan. 6, 2014 meeting. The council left some flexibility in the fee policy, which allowed for some discretion to apply the fee or not, if a community benefit were provided by the removal of a space. The definition of “community benefit” was left for the DDA to determine. It’s in that context that the DDA board’s April 2 action was taken.

The council’s determination of the fee amount came four years after the DDA had made a recommendation on the fee policy:

Thus it is recommended that when developments lead to the removal of on-street parking meter spaces, a cost of $45,000/parking meter space (with annual CPI increases) be assessed and provided to the DDA to set aside in a special fund that will be used to construct future parking spaces or other means to meet the goals above. [.pdf of meeting minutes with complete text of March 4, 2009 DDA resolution]

To press the council to act on the issue, a clause was incorporated into the 2011 extension of the contract under which the DDA manages the city of Ann Arbor’s parking system:

The City shall work collaboratively with the DDA to develop and present for adoption by City Council a City policy regarding the permanent removal of on-street metered parking spaces. The purpose of this policy will be to identify whether a community benefit to the elimination of one or more metered parking spaces specific area(s) of the City exists, and the basis for such a determination. If no community benefit can be identified, it is understood and agreed by the parties that a replacement cost allocation methodology will need to be adopted concurrent with the approval of the City policy; which shall be used to make improvements to the public parking or transportation system.

Under the terms of the 2011 contract, the DDA pays the city of Ann Arbor 17% of gross parking revenues.

Definition of Community Benefit for On-Street Parking Removal: Board Deliberations

DDA board chair Sandi Smith.

Roger Hewitt introduced the resolution on defining public benefit for the removal of on-street metered parking spaces.

He gave a brief history of the topic. When the A2D2 zoning proposal was discussed initially, one of the elements that had been discussed, but not enacted, was a charge to remove metered parking spaces from streets, he said. After several years, the city council had passed an ordinance to put the zoning in place, and adopted a policy of charging $45,000 for every meter removed for private purposes. But there’s an exception when it is done for community benefit, Hewitt said.

The DDA staff and the city staff have worked together to come up with a policy that defines what that community benefit is, Hewitt said. He summarized the policy as saying that the committee benefit has to be a benefit that extends to more than just the specific location or the specific developer.

The resolution would allow the DDA to use the guidelines that had been developed in making a determination on community benefit. There’s also an appeals process that a developer can use if they feel that it has been applied inappropriately.

Sandi Smith quipped, “I like the pace at which this has moved,” venturing that it had taken five years to develop the policy. Hewitt noted that the A2D2 process had started in 2004.

Outcome: The board unanimously approved the policy defining community benefit in connection with removal of on-street meter parking spaces.

Appeal of FOIA Denial

By way of background, The Chronicle had filed a request with the DDA under Michigan’s Freedom of Information Act for a copy of the RFP (request for proposals) issued by the city of Ann Arbor in 2009 for development of the Library Lane site, as well as an email dating from 2012, addressed to DDA board member John Splitt, among others. Splitt’s email address, along with those of board member Roger Hewitt and former board member Leah Gunn, were redacted – on the grounds that to disclose those email addresses would amount to an unwarranted invasion of their privacy.

The RFP in question had been available on the city’s website for several years in unredacted form. The RFP invites readers to contact Splitt, who was in 2009 chair of the DDA board, under the email address jsplitt@comcast.net – the same email address Splitt generally makes available for public use. The DDA’s handling of this issue was similar to the way the city of Ann Arbor handles the redaction of personal email addresses. [For more background on this issue, see "When Lawyers Fool With FOIA."]

DDA board member Bob Guenzel.

At the April 2 meeting, DDA executive director Susan Pollay told the board that as the DDA’s FOIA coordinator, she had handled a request that had come in for two documents. As is her standard practice, she had redacted the “personal” email addresses for three board members, who were included in an email message. Pollay contended that the appeal expressed a disagreement about the practice of redacting “personal” email addresses.

She told the board that two of the email addresses she thought were personal, and one of them was a business address. It had been her practice to do that kind of redaction, she said. The question before the board, Pollay said, was whether to grant the appeal, which would be to provide unredacted copies of the documents. The board could also provide direction to deny the appeal, or the board could also approve some of the appeal redaction.

Bob Guenzel then moved that the action that Pollay had taken to redact the “personal” email addresses be affirmed.

Outcome: The board voted to deny the appeal that would have resulted in the public disclosure of the unredacted RFP regarding the Library Lane site.

Communications, Committee Reports

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

Comm/Comm: Abstentions

At the April 2 meeting, two board members abstained from votes taken at the meeting. John Mouat abstained from the vote on the Ann Arbor Housing Commission grant, citing the fact that the AAHC was a client of his architectural firm, Mitchell & Mouat Architects. And Al McWilliams abstained from the vote on the getDowntown funding, noting that getDowntown is a client of his marketing firm, Quack!Media.

But during the routine approval of the previous meeting’s minutes, McWilliams asked that the minutes from the board’s March 5, 2014 meeting be amended. Those minutes showed the vote on the DDA’s resolution on increased transportation funding. His vote was recorded as an “aye.” He contended that he abstained from the vote. He indicated that he had just stayed quiet. “I will be more vocal about that in the future,” he said.

Board chair Sandi Smith told McWilliams that saying nothing counted as abstention, but it would be helpful for the record keeper to say something. The board agreed to amend the minutes as requested by McWilliams.

Comm/Comm: FoolMoon

During public commentary at the start of the meeting, Shary Brown addressed the board on the topic of FoolMoon.

Shary Brown of WonderFool Productions addressed the board during public commentary at the start of its April 2, 2014 meeting.

She told the board that this weekend, WonderFool Productions would present FoolMoon on Friday evening and FestiFools on Sunday afternoon, April 6. She told board members that the “meter moons” that had been placed on the board table were meant for them, the board members. They have been through their “full orbit cycle of three years,” she told them. They are being retired and donated to the DDA, she said, explaining that the DDA was receiving the meter moons because the DDA had believed in the “foolishness” by providing support to the event.

Brown said there would come a year when the DDA was no longer entertaining fee waivers for bagged meters for special events. [There's a $15 a day charge per meter to reserve parking meters by placing bags over them.] For her very tiny organization, when it was in its second year of presenting the FoolMoon event, it was a “make or break deal,” she said. The DDA had recognized the value of cultural events downtown, Brown added. “We were the new kid, but we thought we were special,” she told the board. She felt that the DDA also recognized that specialness and had commissioned the “meter moons.” The moons have been placed atop parking meters for which the DDA had waived the meter bag fee. It was small for the DDA but big for FestiFools, she said.

Brown thanked the DDA board for recognizing the cultural value of the events that get put on in downtown Ann Arbor. Brown then presented city administrator Steve Powers with a “meter moon,” saying she wanted to make sure that the city of Ann Arbor also had such a moon. Powers donned the “meter moon” as a hat. Brown told the board that FoolMoon started at 6 p.m. in front of Grizzly Peak restaurant. Brown told the board that Grizzly Peak had been a big supporter of the event and brewed a beer in honor of FoolMoon called “Fool Brew.”

Brown told the board that there would also be live music at the FoolMoon event. She described the event as including hundreds of luminaries that members of the community have built over the last several months. People with luminaries would be starting at Slauson Middle School, Kerrytown and the University of Michigan Museum of Art and would begin meandering their way through town and come down to Washington and Ashley streets. City Apartments would serve as a backdrop for the event, she continued, and there would be a special laser show.

Comm/Comm: Earth Day

During public commentary at the start of the meeting, Alan Haber introduced himself as a long-time champion of the Library Lane site becoming an Ann Arbor civic center, developed for public use. Based on recent action of the city council, Haber said, some of that land would ultimately become a city park. In the meantime, Haber said, the surface of the lot should be made available for public events and activities.

The next opportunity for that, he said, would be on Earth Day on April 22. There were a lot of people who would like to see a festival for Earth Day on that weekend, Haber said, which starts on April 19. So he was putting together a permit application for special events. He reminded the board of a proposal to set up a temporary skating rink on top of the Library Lane underground parking structure, but that project never came to fruition. The city attorney had never managed to get back to his group on the questions they had about that proposal, Haber said.

Haber said it would be very nice if the DDA would, as it had on July 14, 2012, be encouraging of an Earth Day event on the Library Lane site. He hoped that the whole surface parking area on top of the structure would be made available for the Earth Day event. He hoped that the DDA would be a partner in putting on the event. Such an event could become an annual Ann Arbor spring party, he ventured. He wanted the DDA board to participate and to make it as easy as possible.

Comm/Comm: TiniLite

During public commentary, Changmin Fan told the board that he was excited and nervous, quipping that FoolMoon was another competitor to his TiniLite company. He reminded the board that in 2005, Ann Arbor had installed LED streetlights. He described his company’s technology as connecting the community digitally. He wanted to help small businesses and retailers downtown as well as the general public. He described how there could be a new democratic movement and the public could have a new voice using his company’s technology, referring to the technology as smart social signs. He hoped that sometime this year a light could be installed that was 100 feet high that would display information.

Comm/Comm: Former Y Lot

Reporting out from the operations committee, Roger Hewitt noted that the committee had received a presentation from Ben Dahlmann to lease the former Y back to the DDA, after the purchase of the property by Dahlmann from the city. [That purchase was completed the same day as the April 2 board meeting.] The proposal was for the DDA to continue to operate the parcel as a surface parking lot. Hewitt reported that the DDA had removed all of its equipment from the parking lot – as requested by the city of Ann Arbor, which had owned the property.

Hewitt noted that the operations committee members had several concerns about Dahlmann’s proposal. Some of the concerns involved the current condition of the lot, which was in need of some repair. Another concern was the financial consideration related to revenues that the DDA might be unnecessarily foregoing. He noted that there was a significant amount of additional public parking available adjacent to the former Y parking lot. The committee had asked deputy director of the DDA, Joe Morehouse, and Republic Parking manager Art Low to do a financial analysis and come back to the next operations committee meeting to see if there’s a proposal that could make any financial sense to the DDA.

Board chair Sandi Smith inquired about the condition of the surface lot, noting that it had been installed as permeable asphalt. She asked if the current poor condition was a consequence of the permeable asphalt or damage from the Blake Transit Center construction.

Hewitt said both issues were a factor. He said that the permeable asphalt did not have a very long life span, because it gets filled up with grime. There was also some excessive wear and tear on the surface where the AAATA had done construction staging for the Blake Transit Center, he said. If the DDA was going to operate the lot as a surface parking lot for the long-term, the surface would need to be replaced, he said.

Hewitt said that the city of Ann Arbor had requested that the DDA operate a surface parking lot there after the old YMCA building had been demolished. [For additional background see "Old Y Lot: 2 More Years of Surface Parking?"]

Comm/Comm: Downtown Ambassadors

By way of background, for several years the Ann Arbor DDA has had an interest in maintaining some kind of additional patrol presence in the downtown. In the mid-2000s, the DDA entered into a contract with the city of Ann Arbor with the implicit hope that the city would maintain its dedicated downtown beat cops. That contract was structured at that time to pay the city $1 million a year for 10 years, with the city able to request up to $2 million a year for a maximum of $10 million.

That hope was not realized, and the DDA has since discussed the idea of providing additional funding for police or for ambassadors. The idea of “ambassadors” was explored in the context of subsequent 2011 renegotiations of the contract between the city and the DDA under which the DDA operates the parking system. The DDA wanted to be assigned responsibility for parking enforcement – a function performed by the city’s community standards officers. Board members imagined that this activity could be performed in an ambassador-like fashion.

At its June 3, 2013 meeting, the city council approved a resolution encouraging the DDA to provide funding for three police officers (a total of $270,000 annually) to be deployed in the DDA district. The DDA also continues to pursue the idea of ambassadors. Several DDA board members made a trip to visit Grand Rapids last year, a city that had recently launched an ambassador program.

On April 2, Roger Hewitt noted that the DDA has discussed a possible ambassador program. The operations committee has assembled quite a bit of information, he said, including a list of cities that have such ambassador programs. The cities range geographically from Akron, Ohio to Yakima, Washington, Hewitt said. In size, they range from New York City to Eaton, Pennsylvania, which has a population of 27,000.

Every ambassador program seems to be crafted to the city where it is located, Hewitt said. Some of the ambassadors do “clean and safe” programs. Others do customer relations, while other programs do outreach to people with substance abuse and mental health issues. There are a whole range of activities that ambassador programs can undertake, Hewitt said.

The problem with issuing a request for proposals is that you pretty much have to know what you are looking for when you start it, Hewitt said. On the other hand, a request for qualifications would give the DDA an opportunity to gather information and to ask questions without committing itself to a particular program, he noted. So issuing a request for qualifications was deemed to be a prudent way to gather more information from experts in the field to run such programs to help the DDA make its decision on whether to go forward – and if so, what it should look like and what it should cost.

There is no financial implication for the DDA at this point in the process, Hewitt explained. There would be a time commitment on the part of DDA staff and board members, however, to review the information provided by respondents to the RFQ.

Comm/Comm: Fourth & William

By way of background, at the its Jan. 8, 2014 meeting, the DDA authorized up to $40,000 for Carl Walker Inc. to develop architectural renderings for renovations to the southwest stair tower and elevators of the Fourth & William parking structure.

The Fourth & William structure, at 994 spaces, is one of the largest in Ann Arbor’s parking system – but has elevators that are more than 30 years old. [A recent trip from the ground floor to floor 7 was timed by The Chronicle at 45 seconds. The comparable trip at the newer Washington & Fourth parking structure took about 17 seconds.]

At the March 26 DDA operations committee meeting, Mike Ortlieb of Carl Walker Inc. presented two possible timelines, based on either a two-phase or three-phase approach to the construction. The basic cost was estimated at $2.45 million. Pursuing the three-phase approach would cost an additional $150,000.

The two-phase approach would last about a year – from August 2014 through July 2015. The three-phase approach would take five months longer – through about December 2015. In both scenarios, the goal is to keep the parking structure open for business.

Chronicle chart of potential timeline for renovations to the southwest elevator at the Fourth & William parking structure, based on Carl Walker estimates.

Reporting out from the operations committee at the board’s April 2 meeting, John Splitt gave an update on the Fourth & William elevator project. Mike Ortlieb and Josh Rozeboom from Carl Walker Inc. had attended the operations committee meeting, he reported. Renderings will be shown to adjoining merchants in the Main Street area. And their input on possible construction timelines will be solicited, Splitt reported.

Comm/Comm: Housing Needs

Reporting out from the partnerships committee, Joan Lowenstein said they’d heard from Washtenaw County staff [Stephen Wade and Brett Lenart] about a needs assessment for affordable housing. There is no specific proposal made to the committee, but the committee was generally supportive of the notion, she reported. The DDA would be able to use a result of that study as it considers how to allocate its funds, Lowenstein said.

Comm/Comm: Partnerships Grants

Reporting out from the partnerships committee, Joan Lowenstein said the committee had a discussion about restarting a program of partnerships grants, which are different from grants to brownfield projects like Zingerman’s Deli or the 618 S. Main project. The committee is considering adapting the criteria for brownfield grants to develop a more general grant policy.

Comm/Comm: Downtown Area Citizens Advisory Council

Reporting out from the downtown area citizens advisory council, Ray Detter told the board that the CAC had a potential new member, who is a resident of City Apartments. He told the board that if they knew of anyone who lived in the DDA district, they should let that person know that the downtown citizens advisory council welcomed their participation. The group meets on the first Tuesday of the month at 7 p.m. in the city council workroom.

The group had reviewed at its meeting on the previous evening some of its positions on developments in the downtown, Detter said. The group unanimously supports the expansion of public transit services, Detter said – and the group supported passing the May 6 transit tax proposal. The tax would fund better service on nights and weekends, he noted, plus redesigned routes reaching more destinations and making more frequent trips. The CAC believes that the improvements would result in improved quality of life for everyone. It would relieve traffic congestion, protect the environment, and spark economic opportunity. It might also mean that no additional large parking structures would need to be built in the downtown, Detter said.

Detter also told the board that the CAC supports the council’s action to pursue revisions to the D1 zoning downtown to address past mistakes that had been made.

Detter told the DDA board that the downtown citizens advisory council had spent a lot of time discussing recent city council decisions that would reduce the ability of the Ann Arbor public art commission to carry out its mission. The public art program was undergoing change and reshaping, he allowed. The CAC appreciated the public art commission’s efforts over the years. [Marsha Chamberlin, a CAC member, also serves on the public art commission.]

Detter said the group continued to support the development of a significantly sized public plaza on the Fifth Avenue side of the Library Lane parking structure. The group also supported development of a public plaza that is sensitive to the needs of the adjacent Ann Arbor District Library. Any planning for the surface of the Library Lane parking structure, he continued, should include a tax-producing development on the major part of the property. Any future development should be encouraged to work cooperatively to integrate itself with and complement the adjoining public plaza, Detter said.

Present: Al McWilliams, Cyndi Clark, Bob Guenzel, Roger Hewitt, Steve Powers, John Splitt, Sandi Smith, Keith Orr, Joan Lowenstein, John Mouat. Powers did not return to the meeting after the closed session.

Absent: Rishi Narayan, Russ Collins.

Next board meeting: Noon on Wednesday, May 7, 2014, at the DDA offices, 150 S. Fifth Ave., Suite 301. [Check Chronicle event listings to confirm date.]

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Roger Hewitt, DDA board treasurer. (Photos by the writer.)

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

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

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

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

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

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

FY 2015 Budget

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

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

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

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

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

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

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

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

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

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

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

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

FY 2015 Budget: Board Discussion

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

DDA board member Russ Collins, who is executive director of the Michigan Theater. In the foreground is board member Al McWilliams.

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

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

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

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

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

FY 2015 Budget: Elevator Project

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

Image from preliminary drawings by the Carl Walker design team for renovated southwest elevator and stair tower for the Fourth & William parking structure.

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

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

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

FY 2015 Budget: Housing

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

DDA board member Bob Guenzel.

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

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

FY 2015 Budget: Parking

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

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

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

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

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

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

FY 2015 Budget: Transportation

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

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

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

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

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

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

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

Transportation Resolution

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

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

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

PUBLIC TRANSPORTATION IMPROVEMENT MILLAGE

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

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

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

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

Transportation: Public Commentary

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

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

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

Transportation: Board Discussion

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

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

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

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

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

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

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

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

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

City administrator Steve Powers, who also serves on the DDA board.

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

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

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

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

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

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

Republic Parking Management Incentive

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

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

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

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

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

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

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

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

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

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

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

Republic Parking Management Incentive: Board Discussion

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

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

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

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

Communications, Committee Reports

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

Comm/Comm: Fifth & William Parking Lot

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

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

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

Comm/Comm: 120 W. Huron Hotel

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

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

Comm/Comm: Footing Drain Lawsuit

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

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

Comm/Comm: Courthouse Square

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

Comm/Comm: Connector Study

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

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

Comm/Comm: TiniLite

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

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

Comm/Comm: Puddles

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

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

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

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

Comm/Comm: Public Art

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

Comm/Comm: Library Lot

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

Comm/Comm: Welcome to New UM President

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

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

Absent: Cyndi Clark, Joan Lowenstein, Sandi Smith.

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

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

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

PUBLIC TRANSPORTATION IMPROVEMENT MILLAGE

To improve public bus, van, and paratransit services – including expanded service hours, routes, destinations, and services for seniors and people who have disabilities – shall the Ann Arbor Area Transportation Authority levy a new annual tax of 0.7 mills ($0.70 per $1000 of taxable value) on all taxable property within the City of Ann Arbor, the City of Ypsilanti, and the Charter Township of Ypsilanti for the years 2014-2018 inclusive? The estimate of revenue if this millage is approved is $4,368,847.00 for 2014. This revenue will be disbursed to the Ann Arbor Area Transportation Authority and, as required by law, a portion may be subject to capture by the downtown development authorities of the Cities of Ann Arbor and Ypsilanti, the Washtenaw County Brownfield Redevelopment Authority, and the local development finance authority of the Charter Township of Ypsilanti.

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

The DDA board’s resolution approved on March 5, 2014 included a single resolved clause, which was amended at the meeting to add the phrase “maintain or”:

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

The TIF revenue estimate of $4.8 million was part of a draft FY 2015 budget reviewed by the DDA operations committee at its Feb. 26 meeting and approved for submission to the city of Ann Arbor by the full board at its March 5 meeting.

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

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

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

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

This brief was filed from the DDA boardroom at the DDA offices, located at 150 S. Fifth Ave., Suite 301. A more detailed report will follow: [link]

Ann Arbor Downtown Development Authority board member Keith Orr delivered extended remarks in response to a proposal currently being weighed by the Ann Arbor city council that would amend the city’s ordinance governing the DDA. (Photos by the writer.)

The grant award had come at the request of AAHC executive director Jennifer L. Hall, who’s proposing a major change to the way the 360 units of public housing are administered. The approach involves privatization and project-based vouchers.

The DDA’s support for public housing also surfaced at the meeting as a talking point for board members in the context of a proposal being considered by the Ann Arbor city council – which would amend the city ordinance regulating how the DDA’s tax increment finance (TIF) capture works. The amendments would clarify existing language in the city ordinance in a way that would favor the other taxing authorities, whose taxes are captured as a part of the DDA’s TIF. The council postponed action on that proposal at its March 4, 2013 meeting. In that context, at the DDA’s March 6 meeting, board member Sandi Smith raised the specter that the DDA would in the future not be able to support affordable housing in the same way it has done in the past.

In addition to clarifying the question of how TIF is calculated, the amendments would prevent elected officials from serving on the board and would impose term limits for board service. Board members took turns at the start of the meeting arguing that the DDA had been a good steward of public dollars and that the amendments to the ordinance are not warranted. Board members indicated that they didn’t think their service as volunteer members of a board was being afforded adequate respect by the city council.

The board comments followed a turn at public commentary at the start of the meeting from Brendan Cavendar of Colliers International, a commercial real estate services firm. His commentary departed from the typical pattern of someone signing up to address the board for up to four minutes. Instead, Cavendar had been invited to appear, and responded to prompts from board members to deliver a range of positive responses, including: future tenancy of the former Borders location; rising rents in the downtown area; and affirmation of the importance of the downtown public parking system.

The city’s public parking system is managed by the Ann Arbor DDA under a contract with the city of Ann Arbor. The monthly parking usage report is featured at every board meeting. But the March 6 meeting featured the parking system in an additional way. The board decided to award the full $50,000 of a discretionary management incentive to the DDA’s subcontractor – Republic Parking – for operation of the public parking system. It’s an annual decision, but it’s the first time in the last five years that the full amount has been awarded. The decision was based on good performance on metrics tracked by the DDA, according to the board.

In a third voting item, the board authorized $610,662 in support of getDowntown’s go!pass program, which provides a subsidy to cover the cost of rides taken on Ann Arbor Transportation Authority buses by employees of participating downtown businesses. To participate, a business must purchase a go!pass for all employees, at an annual cost of $10 per employee. Roughly 6,500 downtown employees are provided with go!passes through the program.

Baker Commons Grant

The DDA board was asked to consider a $300,000 grant to the Ann Arbor Housing Commission for repairs and renovation of the Baker Commons building, located in downtown Ann Arbor at Packard and Main.

The $300,000 will be used for a range of capital improvements to the 64-unit building: driveway and sidewalk replacement and repair; installation of energy-efficient lighting; insulation and air sealing; window replacement; adding a second entrance; door replacement; upgrade of fixtures appliances, flooring and cabinetry; replacement of heating and cooling units; generator replacement, elevator replacement, upgrade of common area furniture, and installation of additional security cameras.

This grant for $300,000 to Baker Commons comes in addition to a recent $260,000 grant from the DDA – authorized by the board at its Oct. 3, 2012 meeting – primarily for the replacement of the Baker Commons roof.

Jennifer Hall, executive director of the housing commission, was unable to attend the board’s March 6 meeting due to illness, according to DDA board chair Leah Gunn. Hall estimates that Baker Commons needs about $3 million in capital investments. She made the request of the DDA in conjunction with a request to the city of Ann Arbor – for $500,000. The DDA’s contribution taps its housing fund, which gets its revenue from the DDA’s tax increment finance capture (TIF) fund.

The city of Ann Arbor is being asked to tap the fund balance in the city’s affordable housing trust fund for half the $500,000. That use of the city’s affordable housing trust fund has been recommended by the city’s housing and human service advisory board (HHSAB). The other half is hoped to come from federal community development block grant (CDBG) funding, allocated through the Washtenaw Urban County.

The redevelopment of Baker Commons comes in the context of a broader effort Hall is undertaking to redevelop all of the Ann Arbor Housing Commission’s 360 units, distributed across the city. Baker Commons is the only AAHC housing complex in the downtown area. The overall redevelopment effort being pursued by Hall would privatize Ann Arbor’s public housing, converting the properties to project-based vouchers, which would make them eligible for low-income housing tax credit financing. For detailed coverage of this effort, see: “Round 3 FY 2014: Housing Commission.”

Baker Commons Grant: Board Deliberations

Board member John Mouat alerted his colleagues to the fact that his firm, Mitchell and Mouat Architects, is working with the housing commission on the rehabilitation of its properties, so he’d need to abstain from the vote.

Board chair Leah Gunn observed that the grant directly affects city-owned infrastructure. [The housing commission properties are owned by the city of Ann Arbor, unlike the property of most housing commissions. It's a factor affecting the AAHC's ability to convert its public housing units to project-based vouchers – because the city council will need to approve a deed transfer.] Mayor John Hieftje took the opportunity of the vote to note that the city of Ann Arbor contributes money to support human services. He continued by saying he didn’t think there was any organization that contributes as much to affordable housing as the DDA does. [Julie Steiner, executive director of the Ann Arbor Housing Alliance, has circulated a letter outlining the DDA's history of support for affordable housing (.pdf of March 7, 2013 letter)] Hieftje also noted that the AAHC has turned things around recently. [The organization has emerged from "troubled status."]

Keith Orr noted that the DDA grant would help the AAHC comply with requirements of the federal project-based voucher program, to which Hall wants to transition. [Orr was alluding to the fact that the transition to project-based vouchers requires that all the AAHC be brought up to minimum standards – which can be accomplished partly through an infusion of low-income tax credit financing, or by any other means. Hall has indicated that she'll be pursuing several options, including grants. The request to the DDA was one example of that.]

Outcome: The board voted unanimously to approve the $300,000 grant for renovation of Baker Commons.

DDA Ordinance Changes

The DDA’s support of affordable housing factored into DDA board remarks on proposed ordinance changes affecting the DDA. The remarks came before the vote on the Baker Commons grant.

At its March 4, 2013 meeting, two days before the DDA board meeting, the Ann Arbor city council considered several revisions to a city ordinance governing the Ann Arbor Downtown Development Authority (DDA). The city ordinance on the DDA is in Chapter 7. DDA board members did not embrace the proposed changes at their March 6 meeting. This report first presents some background, followed by DDA board member comments.

DDA Ordinance Changes: Background

Among the revisions to Chapter 7 that are being considered by the council are: a new prohibition against elected officials serving on the DDA board; term limits on DDA board members; a new requirement that the DDA submit its annual report to the city in early January; and a requirement that all taxes captured by the DDA be spent on projects that directly benefit property in the DDA tax increment finance (TIF) district.

But most significant of the revisions would be those that clarify how the DDA’s TIF capture is calculated. The “increment” in a tax increment finance district refers to the difference between the initial value of a property and the value of a property after development. The Ann Arbor DDA captures the taxes – just on that initial increment – of some other taxing authorities in the district. Those are the city of Ann Arbor, Washtenaw County, Washtenaw Community College and the Ann Arbor District Library. For FY 2013, the DDA will capture roughly $3.9 million in taxes.

The proposed ordinance revision would clarify existing ordinance language, which includes a paragraph that appears to limit the amount of TIF that can be captured. The limit is defined relative to the projections for the valuation of the increment in the TIF plan, which is a foundational document for the DDA.

If the actual rate of growth outpaces that anticipated in the TIF plan, then at least half the excess amount is supposed to be redistributed to the other taxing authorities in the DDA district.

City of Ann Arbor financial staff chart showing Ann Arbor DDA TIF revenue under various methods of calculation.

What the proposed ordinance revisions clarify is which estimates in the TIF plan are the standard of comparison – the “realistic” projections, not the “optimistic” or “pessimistic” estimates. However, the ordinance revisions as currently formulated do not clarify whether a “cumulative” method of performing the calculations should be used or if a year-to-year method should be used. It’s anticipated that an amendment to the ordinance revisions will be made that clarifies in favor of the “cumulative” method, which would have a negative financial impact on the DDA.

Use of the cumulative method has an impact on whether the redistribution of excess TIF is made on a one-time or recurring basis. Under the cumulative method, other taxing authorities in the Ann Arbor DDA TIF district would see a total on the order of $1 million in additional tax revenue, compared to the way the DDA currently calculates the TIF capture. The city of Ann Arbor’s annual share would be more than half of that amount, around $600,000.

Method: Year-to-Year                   
Refunds                                                         
       City       County      WCC       AADL      Total Ref    DDA TIF
FY14   $429,409   $149,392    $94,257   $40,163   $713,221     $3,964,457
FY15    $11,958     $4,160     $2,625    $1,118    $19,862     $4,774,758

===============================

Method: Cumulative                     
Refunds                                                      
       City       County     WCC        AADL      Total Ref    DDA TIF
FY14   $613,919   $213,583   $134,757   $57,421   $1,019,680   $3,657,998
FY15   $635,108   $211,673   $139,195   $58,539   $1,044,515   $3,773,043

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The clarification of the ordinance crucially strikes two paragraphs related to bond and debt payments. One of the two paragraphs was key to the DDA’s current legal position – which is that no redistribution of TIF is required under the ordinance, given the DDA’s financial position. The DDA interprets the stricken paragraphs to mean that no redistribution to other taxing authorities needs to be made, until the total amount of the DDA’s debt payments falls below the amount of its TIF capture. In the FY 2014 budget, adopted by the DDA board at its Feb. 6, 2013 meeting, about $6.5 million is slated for bond payments and interest.

That clearly exceeds the amount of anticipated TIF capture in the FY 2014 budget – about $3.9 million. The DDA is able to make those debt payments because about half of that $6.5 million is covered by revenues from the public parking system. The DDA administers the public parking system under contract with the city of Ann Arbor.

This issue first arose back in the spring of 2011. The context was the year-long hard negotiations between the DDA and the city over terms of a new contract under which the DDA would manage the city’s parking system. The Chapter 7 issue emerged just as the DDA board was set to vote on the parking system contract at its May 2, 2011 meeting.

When the issue was identified by the city’s financial staff, the DDA board postponed voting on the new contract. The period of the postponement was used to analyze whether the DDA’s Chapter 7 obligations could be met – at the same time the DDA was ratifying a new parking system contract, which required the DDA to pay the city of Ann Arbor 17.5% of gross parking revenues.

Initially, the DDA agreed that money was owed to other taxing authorities, not just for that year, but for previous years as well. And the DDA paid a combined roughly $473,000 to the Ann Arbor District Library, Washtenaw Community College and Washtenaw County in 2011. The city of Ann Arbor chose to waive its $712,000 share of the calculated excess.

Subsequently, the DDA reversed its legal position, and contended that no money should have been returned at all. That decision came at a July 27, 2011 DDA board meeting.

The following spring, during the May 21, 2012 budget deliberations, city councilmember Stephen Kunselman (Ward 3) proposed an amendment to the city’s FY 2013 budget that stipulated specific interpretations of Chapter 7, with a recurring positive impact to the city of Ann Arbor’s general fund of about $200,000 a year. Kunselman wanted to use that general fund money to pay for additional firefighters. That year, the budget amendment got support from just two other councilmembers: Jane Lumm (Ward 2) and Mike Anglin (Ward 5).

Kunselman also is putting forward the currently proposed changes to the ordinance. For a Chronicle op-ed on this topic, see: “Column: Let’s Get DDA TIF Capture Right.”

DDA Ordinance Changes: Board Reaction

Members of the board took turns near the beginning of the meeting, after public commentary and reports from other boards and commissions, and responded to the proposed changes. In largest part, they reacted to the changes as a political attack.

Keith Orr led off the comments by indicating he’d paraphrase a city councilmember [Stephen Kunselman], saying he wasn’t going to “vilify the city council.” Instead, Orr said, he wanted to express his concern about the “shot across the bow” that he’d witnessed at the March 4 city council meeting. That shot might be politically motivated, he ventured, in the same sense of the “ideologue-driven politics” that has ground the federal government to a stop. Or the council’s consideration might be related to a lack of understanding of the nature of the DDA.

Orr allowed that the relationship between the city council and the DDA board is occasionally strained, but he attributed this to the different nature of the entities and the culture of the organizations. On the whole, the relationship between the DDA board and the city council has been mutually beneficial, he said. [The choice of the phrase "mutually beneficial" was almost certainly not accidental, as it was the label given to the committees appointed by the respective bodies in 2010-2011 to negotiate the new contract under which the DDA manages the public parking system.] More importantly, the relationship was beneficial to the downtown and to the residents of Ann Arbor, Orr said.

From left: DDA board members Joan Lowenstein, mayor John Hieftje, and Nader Nassif.

“First I want to say how proud I am to be a part of the Ann Arbor Downtown Development Authority, serving as a volunteer on this board,” Orr stated. He noted that he’s been a downtown businessman for over 20 years and a resident of the city since 1976. [Orr is co-owner of the \aut\ BAR and Common Language Bookstore.] His pride is based on the fact that the DDA is doing something that very few other government entities are doing – focusing on infrastructure. We hear about crumbling infrastructure across the nation, Orr noted, but very few entities are doing anything about it. The reason for that, he contended, is that an elected body is mainly concerned with reelection. If the elected body owns an asset, then the elected body will take everything possible out of the asset and spend as little money as possible on the upkeep of that asset.

That’s the reason the DDA is the de facto parking authority, he contended. The city council had historically abdicated its responsibility to maintain the parking system that they owned and operated many years ago. The city still owns the parking system, he allowed, but now it is maintained and operated in a manner that would be the envy of most cities. He then quoted “his friend Howard Dean.” [Orr worked on Dean's Democratic presidential campaign and met him more than once.] Orr, quoting Dean: “The problem with our government is that we keep trying to come up with two-year solutions to problems which have five- and ten-year solutions. In the case of prisons they are 20-year solutions. In the case of the environment they are hundred-year solutions.”

The DDA’s spending of public money has benefited the city, Orr said. He noted that the DDA pays around $500,000 of the city’s bond on the new Justice Center building. And he contended that the DDA would do so for the rest of his lifetime. [The DDA authorized an $8 million grant in May 2008, to be paid in installments of roughly $500,000 per year – or 16 years of payments. Orr is possibly underestimating his longevity.] And that was to benefit the city of Ann Arbor, he said.

The city council needed to replace courtrooms and police headquarters, and the DDA helped the city do that, Orr said. Ann Arbor sidewalk curbs were not ADA-compliant, he continued, and compliance with that federal law costs millions of dollars. When the DDA undertook those curb ramp improvements in the downtown area, it saved the city’s general fund from having to pay for it, he contended. The DDA’s actions had improved the parking infrastructure, public and alternative transportation infrastructure, energy efficiency of downtown buildings, residential infrastructure – and so much more, Orr stated.

Orr then responded to criticism of the DDA’s handling of the Connecting William Street planning project – which entailed looking at the future use of five city-owned parcels in the downtown area. Orr noted that the city council had asked the Ann Arbor DDA to examine and propose a plan for the development of several parcels of land on or near William Street – called the Connecting William Street planning project. The DDA’s job was not to create its own ideas, he said, but rather to consult experts and engage the public. The DDA had proceeded in a variety ways – including symposiums on urban planning and development, and a “vigorous” series of community meetings. “If you accuse the resulting ideas of being stale, you are accusing the citizens of Ann Arbor of having stale ideas, not the DDA,” he said. The DDA had truly engaged the public by going out to the public, he said, not expecting them to come to the DDA.

Orr said he was proud to serve on a body that was collaborating with itself and with the residents and businesses in Ann Arbor. He felt that many members of the city council appreciate the odd but viable relationship between the DDA and the city council, concluding with: “I hope that calmer heads prevail.”

Bob Guenzel followed Orr by saying that he did not think he could be as eloquent as Orr, and characterized himself as a fairly new member of the DDA board. [Guenzel was appointed on Aug. 16, 2010.] Guenzel wanted to say how impressed he was by the success of the DDA. He didn’t take any credit for that, as a relatively new member, because what he’d observed is a very strong commitment to fiscal stability. “It’s now proposed that we change the rules about that, about how we can capture the TIF and the like,” Guenzel said, indicating he’d heard no reason for doing that. The DDA has a 10-year fiscal plan, he said, and he contended that the DDA manages the dollars very well. Guenzel maintained that he can see evidence of the good management through the success and the commitment to the downtown, the commitment to housing, the commitment to infrastructure, and through a very viable parking system – which helps support the city and is also very customer friendly.

Guenzel characterized the DDA’s relationship with the city as a “real partnership.” The DDA has had a very successful run, he continued, and he didn’t see a reason to change how the TIF capture is calculated. “Frankly, we are on the hook for some bond payments. Whether they are ours or the city’s, we’ve committed to those. And in my mind that should always be paid first.” He stated that he disagreed with the need for the changes, saying that he didn’t understand the reason.

Guenzel continued by saying that he was especially concerned about the proposed changes to the board composition. The idea that the DDA board could not have elected officials from other jurisdictions, he felt, would unfairly limit participation in board service. To have term limits, he felt, is a mistake. What the DDA gets in its board is a nice mix of new people – and also people who have a longer-term commitment, who were there at the beginning of some of the DDA’s projects. Whenever you put limits on who can serve and how long they can serve, that’s a mistake, Guenzel said. He felt that it’s up to the governing body to determine how long any of the DDA board members should serve – whether it’s one term or two or three, or even more. If you look around the room, he continued, some of the biggest contributions have come from board members who have served for several years.

The DDA can continue to improve how it does its work, Guenzel allowed, but he didn’t agree with changing the rules – to his mind, without any reason stated. Guenzel hoped the city council would reject the proposed changes. He encouraged the city council instead to come to the DDA board and identify problems they saw. He allowed that the board had received the courtesy of the city communicating the proposed changes. Guenzel concluded by coming back to how impressed he had been by the effort of the volunteer DDA board. He said he felt that Ann Arbor has the best downtown in Michigan – and he felt that the DDA deserves a lot of credit for that.

Board member Russ Collins, executive director of the Michigan Theater, picked up on the theme of volunteerism that both Orr and Guenzel had mentioned. He then went on to characterize the volunteer board’s work as not very exciting. When you’re dealing with prudent financial management, he said, and when you’re dealing with infrastructure issues, it seems to be “necessarily boring.” Construction is always difficult, Collins said. But to oversee a project like the DDA had with the new Library Lane underground parking structure – and to have that very good result, all things considered – is quite amazing, he concluded. Collins attributed the good results the DDA has achieved to solid management, the annual operating of the system, and the quality of the maintenance. A core piece of what any city board needs to do is prudent management of resources, he said, and the volunteers on the DDA board had taken that idea very seriously.

Collins then shifted gears a bit: “Is everything perfect? I don’t think so. I get mad at parking meters. I get mad at ice and snow being where you might not want it to be. I get frustrated with some of the aspirational nature of what we might like to do with the DDA, but we can’t do.” But measured by whether good use of taxpayer dollars is made by volunteers who are committed to the city of Ann Arbor, who work and live in the downtown, and who care – that’s what you have on the DDA board, Collins concluded. To have the DDA become “a political punching bag” for the sake of political aspirations, Collins said, didn’t seem to be a good use of the volunteers who serve on the DDA board. The members of the DDA board serve because of their bottom-line concern for a place that they love and a place they want to commit time, Collins said.

DDA board member Sandi Smith.

Sandi Smith, a former city councilmember, began her remarks by saying said she had a couple of concerns. Over the last decade, the DDA has been able to invest about $3 million in affordable housing in and near the downtown. That’s something the DDA had pulled back on a little bit when it embarked on construction of the underground parking structure. [Smith was alluding to the fact that the DDA historically transferred money from the TIF fund to its housing fund.] Smith indicated that the transfer into the housing fund is something that’s very easily eliminated from the budget – but this year, the transfer is back in the DDA’s budget [in the amount of $100,000]. Smith raised the specter that the fund transfer from TIF to housing could again be eliminated “if there’s a significant hit,” to the DDA’s TIF revenue.

Downtown Ann Arbor has a lack of diversity in housing options, Smith said. More opportunities are needed for people who work downtown – for example, at Barracuda Networks – and who want to live downtown, she said. It’s important to her that there is a broad range of opportunity for people to live downtown.

Smith also expressed concerned by contending that the “attack” is not grounded in a way that reflects an understanding of how tax increment finance actual works. The investments the DDA makes in infrastructure “brings the whole downtown up,” she said. It brings more money to the general funds of the taxing authorities. So the increase in the value of downtown properties helps everybody, she said. [Smith was in part alluding to the following feature of the Ann Arbor DDA's TIF capture: Capture is made only on the initial increment – not on the market appreciation of a property subsequent to an improvement, and not on the appreciation on an unimproved property. Not all DDA TIF districts in the state of Michigan work that way.] The proposed changes would undermine a system that seems to be working pretty well right now, she said. She called the changes “cutting the neck off the golden goose.”

Nader Nassif echoed what Guenzel had said. In his short time serving on the board, Nassif said he’d seen there is a real commitment by the board to do what is right. [Nassif was appointed on Sept. 6, 2011.] And there’s a real commitment to keep going forward with what is best for the city. He pointed out that he’s not an Ann Arbor native – noting that he was not born here, but had moved here. He’s lived here now for four or five years and he made himself move downtown. He said he would not live anywhere else in the state of Michigan. He allowed that the board received its share of criticism, but the board took that criticism and continued to move forward. He noted also that it was a volunteer position, and he also didn’t see a need for a change.

From left: DDA executive director Susan Pollay and board chair Leah Gunn before the March 6 meeting started.

Leah Gunn, who serves as chair of the board, wrapped up the board’s reaction to the proposed changes, saying that she agreed with her colleagues – that “we really ought not to mess with” something that works really well. She said that the DDA had been very good stewards of the city’s infrastructure. When she first joined the board – saying she was the one who had been here the longest and there’s been criticism about that – the city’s parking structures were in a state of poor repair. [Gunn was first appointed on Aug. 19, 1991.] When the DDA took over management of the parking system, the DDA had proceeded with a plan of repair and replacement of the city-owned parking structures – paid for by the parking system because the DDA was managing it in a far more efficient manner, she said. The DDA had torn down and built two new parking structures and done major repair on all the others, she said. The parking system is now customer friendly, she added, and safe. Because the city’s parking structures were in such poor condition, all of the money that had been spent during the first phase, she said, had not caused any new parking spaces to be added to the system. But finally, with the construction of the Library Lane underground garage, 711 spaces had been added. Her feeling is that the DDA has been careful and prudent, and that the DDA has been beneficial to the city.

DDA Ordinance Changes: Public Comment

Odile Hugonot Haber addressed the board at the conclusion of the meeting during public commentary, rebuking the board members for their remarks about the DDA’s successes. She criticized them for celebrating and making superfluous comments, rather than looking seriously at the reasons people criticize them. She told them she was grateful for the DDA’s support of affordable housing. But she disagreed with their vision for the city, which she characterized as growing buildings instead of beauty.

Colliers International Update

Brendan Cavendar from Colliers International appeared before the board during the time allotted for public commentary at the start of the meeting. He indicated that he’d been asked to appear at the board meeting in order to answer any questions board members might have about what’s going on with real estate in downtown Ann Arbor right now. He offered to comment from his perspective, as someone who’s involved in a lot of leases and sales.

Mayor John Hieftje, who also sits on the DDA board, asked Cavendar to describe what’s going on at the former Borders location on East Liberty and Maynard. Cavendar noted that Colliers had announced one of the tenants, which represents about 30-40% of the overall building: PRIME Research. The company is relocating from Ashley Street, he said. PRIME Research is hiring “a ton of people,” Cavendar reported, so they’re transitioning from about 5,000 square feet to 70,000 square feet. What’s significant about that move, he continued, is that it mimics some of the other changes in that area – comparing it to other tech company moves.

Last year, Barracuda Networks had moved into the same area, he noted. And Menlo Innovations had also moved into the area. The area of Liberty, Maynard and Washington has really become a “tech hub,” Cavendar said. He noted that tech companies are very high-density tenants – not four employees per 1,000 square feet, but rather six or seven employees per 1,000 square feet. Their employees are also very well-paid, he continued. They all go out to eat, they all drink, they all shop – and the restaurants are filling up, he said. So there’s been a real transition and movement toward downtown Ann Arbor by tech companies, he concluded.

Hieftje interjected that this was something the city had started several years ago when Google had chosen to establish a location in Ann Arbor. Hieftje indicated he felt that the “tech campus” had worked out pretty well. “Absolutely,” Cavendar agreed. Cavendar felt that in the next 2-3 years, the block of Liberty, Maynard and Washington would have around 1,400 young tech employees. As Cavendar was set to name the factor that really helped get those companies to move down there, and the only reason Barracuda Networks was able to move to downtown Ann Arbor, Russ Collins playfully interjected: “The Michigan Theater!” [Collins is executive director of the theater, located on East Liberty.]

Collins’ remark drew laughs, but Cavendar reported that the key ingredient was, in fact, parking. He said that Barracuda been a day away from signing a lease at a different location in south Ann Arbor. It’s great to think that everybody can ride a bike or take the bus, he allowed, but not everyone can. Hieftje ventured that the new Library Lane underground structure was the key. “Absolutely,” Cavendar agreed. Parking was also an incentive for PRIME Research to move to the downtown area, Cavendar said. PRIME Research will eventually have 150-250 employees, he said, and Barracuda Networks is looking to grow to about 450 people or more. That helps the whole area, he said.

Leah Gunn asked Cavendar to comment on limitations. Is there an amount of square footage that doesn’t exist, but that is a need? Cavendar said Colliers is looking at that question. Right now, they estimate that in the downtown area – the DDA district and nearby – there’s about 150,000 square feet of office space. There are only a few large floor plates greater than 10,000 square feet. But right now, he said, not that many companies are looking for those large floor plates. That’s what Colliers has been seeing, in any case, Cavendar reported.

In the last three years, Colliers has seen the leasing rates start to drift upward – to $24, $25, and $26 per square foot. Gunn ventured that’s more than the rates were fairly recently. And Cavendar allowed that the rates had been down to around $18, $19, and $20 a square foot. Eventually the leasing rates could get to the point where it might be feasible to build new construction of office space. But he felt that leasing rates would need to get to $29 or $30 a square foot before new construction would be justified. Roger Hewitt asked roughly what percent of available space is vacant. Cavendar estimated it at around 9%.

Cavendar then returned to the topic of the former Borders location. On the first floor, he reported, there are more offers than there is space available. He characterized it as a jigsaw puzzle – trying to find the best mix of local and national, retail and restaurants. Restaurants, he said, are doing better than they ever have. Some downtown restaurants are reporting that they’re doing between $3.5 million and $6 million in sales. Even with the high rents, that works, Cavendar said. The restaurants are doing well, and they’re making money, and that means that they’re signing longer leases, he continued. They’re not signing three-, four-, or five-year leases, but rather 10- or 15-year leases. He felt that would reduce the turnover of tenants and would be fueled by the office tenancy.

Hieftje asked when Cavendar thought the old Borders location would be occupied, venturing that it could be next summer. Cavendar felt that depending on how long the build-out took, by the end of this year all the new tenants would be open for business.

John Mouat asked Cavendar to estimate how much of the growth in tech companies was local, compared to being driven by other factors. Cavendar attributed much of the growth to the availability of recent graduates of the University of Michigan. Employers don’t have to fight for employees like they would on the West Coast, he said, and Ann Arbor has a great community. Companies want to be close to the university because they use students as interns, and the day those interns graduate, they are hired full-time, Cavendar reported. Mouat clarified that he actually wanted to know how much the population of people downtown is growing due to people who are already in the area, compared to people coming from outside. Cavendar felt that it’s a mix, but the majority of new employees are from Ann Arbor. It’s the students who are currently in school or workers who are employed by other companies in the area who are taking the downtown jobs.

Hieftje asked Cavendar to address the topic of the possibility of a grocery store downtown. Cavendar said he’d talked to one larger unnamed company that gave as a rule of thumb that a downtown grocery would need about 10,000 full-time residents downtown. And currently Ann Arbor has around 4,000-5,000 downtown residents – about half of what’s required even to consider locating downtown. Also, parking would need to be provided onsite, Cavendar stressed. Parking in a public parking structure and paying for that in addition to groceries would just not be an option, Cavendar said – stressing that this wasn’t his personal opinion, but rather feedback straight from the unnamed company.

Hieftje asked Cavendar to characterize generally how the downtown is doing. Cavendar responded with “improving strongly.” He noted that there’s been big transition in the Liberty/State area, but there is virtually no office space left in that area, he said.

Summing up, Cavendar felt that they’d continue to see vacant spaces fill up and see their rates improve. The rates had already improved over the last 2-3 years, he said, and retail is as healthy as ever. He noted that Colliers tracks other cities in Michigan, and there is no other city that’s doing as well as Ann Arbor. He joked that he was not just saying that because he was born here and was educated here. The rental rates in Ann Arbor are some of the strongest in the entire state of Michigan, he said. We should be grateful for that, he concluded.

Republic Parking Management Incentive

The history of the parking system factored into board remarks on proposed ordinance changes, and was mentioned by Brendan Cavendar of Colliers International, as a reason that Barracuda Networks was able to locate downtown. The parking system’s monthly usage report is also a regular feature the board’s monthly meetings.

But at the March 6, 2013 meeting, the board had an voting item on its agenda directly affecting the parking system. The board was asked to award the full $50,000 amount of a discretionary management incentive to Republic Parking – the DDA’s contractor for day-to-day operations. Republic Parking’s contract with the Ann Arbor DDA covers actual costs, but also includes a $200,000 management fee. Of the $200,000 management fee, $50,000 is awarded to Republic on a discretionary basis.

For the first time in the last five years, the DDA board was considering a recommendation to award the full $50,000 of the incentive. Last year, at its Feb. 1, 2012 meeting, the board determined to award $45,000 of the discretionary amount. That matched the same figure awarded in 2011, 2010 and 2009.

The direct costs for Republic Parking budgeted for FY 2013 – the current fiscal year ending June 30 – are $6,298,423 out of about $18.1 million in budgeted gross revenue for the parking system.

Part of the difference this year leading to the recommendation to award the full $50,000 was improvement in bi-monthly customer surveys over the year – as 72% of customers rated the parking system as at least 4 on a 5-point scale. That compared with 63% of parking patrons who rated the parking system at least a 4 last year.

The DDA’s independent inspector for the parking system completed 48 written reports in the course of the year that evaluated cleanliness of structures and lots. Those ratings averaged 91.71% – an increase over last year’s score of 90.48%. Also counting in Republic’s favor was the fact that the Dec. 31, 2012 accounts receivable balance for parking permit accounts was $7,898.26, which is 1.5% of the amount that is billed on an average monthly basis. The DDA’s target for that figure is 5%.

Dead tickets averaged 1.01% for the year, a decrease from last year’s 2.54%. That came in under the DDA’s target of 1.75%.

At the DDA’s operations committee meeting on March 1, 2013, Republic’s operations manager Art Low asked that other management staff be called out for praise by name – including Stephen Smith, Michael Bandy, Edward Wheeler and Judy Comstock.

A staff memo accompanying the resolution to award the $50,000 incentive cited other factors, besides improvement in the metrics used to evaluate the amount of the management incentive. The memo highlighted Republic’s performance in connection with the opening of the new 711-space Library Lane underground parking garage and the installation of automated payment equipment.

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

Republic Parking Management Incentive: Board Deliberations

Roger Hewitt reviewed the terms of the DDA’s contract with Republic Parking and how the management fee is structured – with a $50,000 component that’s discretionary.

He said that for the first time since he’s served on the board, the full amount of the incentive was being recommended by the staff and the operations committee. That recommendation had Hewitt’s enthusiastic support. He characterized the metrics used to evaluate Republic as including objective as well subjective criteria. Hewitt reviewed the criteria in the staff memo. In describing Republic’s efforts in opening the new parking structure and installing automated ticketing equipment in other structures, he said that Republic had taken on more responsibilities in the last year than in any year he’s been on the board. He wholeheartedly endorsed the recommendation of the full amount of the discretionary part of the management fee.

Russ Collins quipped that because Hewitt is generally a curmudgeon, Collins saw Hewitt’s remarks as a huge compliment.

Board chair Leah Gunn related that in her personal experience parking in the system, Republic Parking employees are “right there on the ball.” She gave great praise to Republic Parking and their employees on the front lines.

Outcome: The board voted unanimously to approve the award of the $50,000 discretionary component of Republic Parking’s management fee.

Monthly Parking Report

Roger Hewitt delivered the monthly parking usage report, covering the month of January. He noted that the reports start to include some narrative providing a little rationale for the month-to-month fluctuations to help understand what’s different.

University of Michigan classes didn’t start until Jan. 9 this year, compared to last year’s Jan. 4 start.  That effectively reduced the number of business days this year by three, a negative influence, according to commentary in the report. New Year’s Day fell on Tuesday this year instead of Sunday last year. That also had a negative impact.

Hewitt indicated that the report was intended to include not just additional narrative information, but also additional numerical data. [In this context, a preliminary report based on percentage of hours sold had been generated as far back as the summer of 2011.]

Hewitt characterized the report as indicating that there’s still clearly solid demand for parking in the system.

Chart by chart, here’s how the system looked [Chronicle charts based on DDA data]:

Ann Arbor Public Parking System: Hourly Patrons. The number of hourly patrons has not shown as much growth as revenue.

Ann Arbor Public Parking System Revenue. Revenue continues to increase, due at least in part to an increase in total inventory of spaces as well as increases in rates.

Ann Arbor Public Parking System: Revenue per Space – Focus on Structures.

Ann Arbor Public Parking System Revenue Per Space – Focus on Surface Lots.

Ann Arbor Public Parking System Revenue per Space: Total System.

go!pass Funding for Downtown Employees

The board considered a resolution to approve a $610,662 grant to support the getDowntown program and the go!pass, which it provides to employees of participating downtown companies.

go!pass Funding for Downtown Employees: Background

Holders of a go!pass do not themselves pay a fare to board the bus. Rides are subsidized by the DDA and to a much lesser extent by employers.

The total grant to the getDowntown program breaks out as follows:

YEAR                    2014
getDowntown          $40,488    
go!pass             $479,000   
NightRide 
go!pass discount     $18,233     
Route 4 
East of US-23        $56,363   
Route 5 
East of US-23        $16,578   
============================
Total               $610,662

-

Compared to a request made at the previous month’s board meeting, on Feb. 6, 2013, a revised request made at the operations committee meeting on March 1, 2013 increased the line item for the getDowntown program by $5,000 – for marketing, outreach and operations. That increase was from $35,488 to $40,488. At that operations committee meeting, members resisted the $18,000 that had been requested to support the AATA’s Express Ride service from Chelsea and Canton, and did not include it in the recommendation to the board.

The go!pass program requires a participating downtown employer to purchase a go!pass for all employees in the company – at a cost of $10 a year per employee. That translated to a peak of 7,226 go!passes in circulation for FY 2011. That number dropped to 6,591 in FY 2012 – or $65,910 to offset the cost of rides taken with the go!pass. The current requested funding was based on projections of the estimated number of rides taken. Last year around 601,000 rides were taken using the go!pass by around 4,130 employees. The combination of go!pass funding is meant to work out to $0.90 per ride.

Administratively, the getDowntown program is part of the Ann Arbor Transportation Authority.

Through the AATA’s fiscal year 2012, which concluded at the end of September 2012, here’s how go!pass ridership has trended:

go!pass total rides by year. The number of rides taken with go!passes has roughly doubled since 2004. This past year reflected a dip, which appears to be related to a reduced number of cards in circulation: 6,591 compared to 7,226. (Data from AATA; chart by The Chronicle.)

go!pass rides by month, year over year. The red trend line is the most recent year, 2012. The previous year is shown in black. (Data from AATA; chart by The Chronicle.)

While the total number of rides dipped slightly, the number of rides per card continued its upward trend. Since 2004, the number of rides per card has increased from about 60 to about 90. (Data from getDowntown program; chart by The Chronicle.)

Full adult fare for AATA regular bus service is $1.50. According to the most recent AATA treasurer’s report, current operating costs for the AATA regular bus service work out to about $3.18 per rider. On average, a rider pays 22.1% of that cost and the local transit tax covers 34.6%. The remainder is covered with state and federal operating assistance.

go!pass Funding for Downtown Employees: Board Deliberations

John Mouat introduced the resolution. He noted that getDowntown executive director Nancy Shore was in the audience and was available to answer questions. Mouat reviewed how the proposal had been discussed at the last couple of operations committee meetings. The AATA’s CEO, Michael Ford, had attended the operations committee meeting and the previous board meeting to discuss the proposal.

Mouat walked through the breakout of the funding request, including the portions for NightRide and Routes #4/#5.  The operations committee supported enhancing the connection to Ypsilanti, Mouat said, but had “qualms” about a request to support express commuter service from Canton and Chelsea to Ann Arbor. The committee’s discussion at its March 1 meeting had included discomfort with the fact that the funding would benefit only 15 riders. Mouat also cited some caution as the DDA’s financial picture possibly changes – an allusion to consideration that the city council is giving to clarifying TIF capture calculations. The subsidy of the express commuter service from Canton and Chelsea was a category where the committee felt the DDA could withhold the requested $18,000.

DDA board member John Mouat.

Russ Collins noted that there are some people whose business is located outside downtown, but perhaps still near downtown, who conduct business downtown – like journalists or lawyers. He wondered about the possibility of making such businesses also eligible for the go!pass program. Shore explained that the getDowntown program has a policy under which workers who are temporarily contracting for a company that’s located downtown can purchase go!passes. She also pointed to institutions like the Workantile, whose members are eligible for go!passes. The key is that there must be some entity downtown that anchors the go!passes.

Collins wondered if exceptions were ever made. Shore responded by saying that the go!pass program is as much the DDA’s program as it is the AATA’s, and that the possibility of exceptions could be considered. Sandi Smith mentioned that one of the proposed changes to the DDA ordinance involved the use of funds outside the DDA’s TIF district. Nader Nassif gave his perspective as an attorney, who didn’t imagine there were a lot of attorneys with offices just outside downtown who’d likely be interested in being eligible.

Mayor John Hieftje said he was always very happy to support the go!pass funding, saying it was one of the best things being done by any organization. It helps those who can’t afford transportation, and reduces congestion and pollution. Board members also offered praise for Shore’s performance.

Outcome: The board unanimously approved the $610,662 funding request for go!passes.

At the conclusion of the meeting, during the time available for public commentary, Shore was effusive in her appreciation for the allocation of the grant. Brendan Cavendar of Colliers International also took a brief turn at the public commentary podium at the end of the meeting to add to his remarks made at the start of the meeting. He cited the go!pass as crucial to the decision of PRIME Research to locate downtown.

Communications, Committee Reports

The board’s meeting included the usual range of reports from its standing committees and the downtown citizens advisory council, as well as public commentary.

Comm/Comm: Connector Study

Roger Hewitt gave the board an update on the connector study.

By way of background, the corridor being studied runs from US-23 and Plymouth southward along Plymouth to State Street and farther south to I-94. The Ann Arbor city council approved its share of the local funding match for the $1.5 million study at its Oct. 15, 2012 meeting, which followed a commitment of DDA support. The current study is an alternatives analysis phase, which will result in identifying a preferred mode (e.g., bus rapid transit, light rail, etc.) and the location of stations and stops. A feasibility study for the corridor costing $640,000 has already been completed. That initial study concluded that some type of improved high-capacity transit system would be feasible – which could take the form of bus rapid transit, light rail transit, or elevated automated guideway transit.

Here’s the breakdown of the $300,000 in local funding sources for the $1.5 million study: $150,000 from the University of Michigan; $90,000 from the Ann Arbor Transportation Authority; $30,000 from the Ann Arbor DDA; and $30,000 from the city of Ann Arbor. The $300,000 satisfies a 20% matching requirement for a $1.2 million federal grant the AATA has received to complete the $1.5 million project.

At the DDA board’s March 6 meeting, Hewitt indicated that possible routes for the connector are now being considered. He characterized it as a high-capacity transit line that would run in a rough boomerang from northeast Ann Arbor through UM’s north campus medical center, and central campus, the continue downtown and south to the Briarwood Mall area. Hewitt noted that the alternatives analysis phase is necessary to qualify for federal matching funds for eventual construction of such a project.

Coming up with potential alternative routes is a challenging task, Hewitt said, because there are no obvious ways to get through some of the tighter areas of the city. But as soon as some possible alternatives are actually put together, he continued, the study group will conduct some public outreach to get feedback that would lead to the end result of the study: the locally-preferred alternative. Those outreach efforts would probably be taking place at the end of April or the beginning of May, he said.

The initial study data collected by URS Corporation – the consultant hired to do the alternatives analysis study – showed, as expected, that the medical center and the central campus area had a high “density of trips.” But Main Street in downtown area has as great a density of trips as the campus area, Hewitt reported. It’s encouraging to see that the activity level is not centered only at the University Michigan, he said.

One of the questions that had been raised, Hewitt allowed, is whether Ann Arbor is large enough for this kind of high-capacity corridor. The consultant was asked to look at comparable cities that have high-capacity transit in some form. The list of cities included: Cleveland, Eugene, Little Rock, New Orleans, Norfolk, Portland, Salt Lake City, Tacoma and Jacksonville. Lansing, Grand Rapids and Fort Collins were also included – because they have systems in the planning stages right now.

With the possible exception of Lansing, he said, all of the cities are population-wise larger, or even quite a bit larger than Ann Arbor. But if you look a little deeper, he said, at the population per square mile – the population density – Ann Arbor ranks fourth on the list. And if you look at employment density – how many people are employed per square mile – Ann Arbor is first on the list. There are 3,800 people per square mile employed in the city of Ann Arbor, Hewitt reported. The next-closest city on the list is Cleveland at about 3,300. Then it drops down to about 2,500 and lower.

So although Ann Arbor is small geographically, it’s pretty dense in population, and very dense in jobs. That’s the answer to why you need a transportation connector like this, Hewitt concluded. He ventured that moving people around and finding places for people to park is going to become increasingly difficult.

Comm/Comm: Connecting William Street

In reporting out from the downtown citizens advisory council (CAC), Ray Detter said the CAC continues to support the DDA’s leadership of the careful planning of the downtown – in the form of the Connecting William Street (CWS) planning project. That’s a planning effort the DDA undertook as the result of an April 2011 city council directive to consider alternative uses for five city-owned parcels in the downtown William Street corridor.

The CWS project was also mentioned at the board meeting during Joan Lowenstein’s report from the board’s partnerships committee. She described how the city’s planning commission, on its own initiative, had accepted the CWS project as a supporting resource document to the city’s master plan. [That action came the previous evening, on March 5, 2013.]

Sandi Smith asked how the CWS plan might factor in a city council action taken the day before the planning commission’s meeting, on March 4, 2013. At that meeting, the council had voted to direct the city administrator to issue an RFP (request for proposals) for brokerage services to sell the former Y lot at Fifth and William. The lot is currently used as a surface parking lot in the city’s public parking system, and is one of the five lots in the CWS plan.

Mayor John Hieftje, who had co-sponsored the council’s resolution with Stephen Kunselman (Ward 3), told Smith there’d been some discussion about the resolution, stressing that no final decision had been made. Hieftje allowed that the CWS recommendation from the DDA had been to consider packaging the old Y lot together with the top of the Library Lane underground parking garage. But he felt that the Y lot was a special case, because of the interest-only payments the city was making on a 10-year-old $3.5 million loan. Responding to a query from Smith, Hieftje indicated it would still be possible to incorporate public opinion into the future of the old Y lot.

In his remarks reporting from the CAC, Detter provided implicit commentary on the council’s Y lot resolution by saying the CAC didn’t think that downtown city-owned property should be for sale to the highest bidder.

The fact that the city is, for now at least, not packaging the Y lot with the top of the Library Lane underground parking garage means there’s possibly even more additional time to explore temporary interim uses for the top of Library Lane. During public commentary at the conclusion of the meeting, Alan Haber spoke in support of an artificial ice-skating rink at that location. He indicated that his group would be making a presentation on that topic at the next meeting of the DDA’s partnerships committee, on March 13 at 9 a.m.

Comm/Comm: Beat Cops

Roger Hewitt briefly addressed the possibility that the DDA might fund community policing in the form of contracting with the Ann Arbor police department for downtown police beat patrols. The board has money for the patrols in the FY 2014 budget, which it adopted at its Feb. 6, 2013 meeting. A lot more information is needed before pursuing that possibility, Hewitt indicated. And if the financial picture changes – an allusion to the possibility that the city council clarifies the DDA’s TIF capture in a way that negatively impacts the DDA – the downtown police patrols won’t go anywhere.

Comm/Comm: Aging Population

Joan Lowenstein reported from a day-long seminar that the AARP had sponsored on the University of Michigan campus – about aging communities and how municipalities can respond to aging communities. She noted that councilmember Sabra Briere, who represents Ward 1, was also in attendance at the seminar. [Briere also attended the March 6 DDA board meeting.] Ann Arbor leans more heavily than the national average toward the baby boomer age, Lowenstein noted, and leans less heavily toward those who are under 40 years old. It might be surprising – but it’s because Ann Arbor is not retaining young people, she said. At the seminar there were lots of national experts on urban planning, and walkability and services for older people. They said that if you focus on walkability, transit, and livability improvements, then that benefits the aging population and helps to retain the younger population. Lowenstein concluded that the DDA had been focusing on the right kind of infrastructure improvements.

Comm/Comm: Public Art

The city of Ann Arbor’s public art administrator, Aaron Seagraves, briefed the board on the Detroit Institute of Arts’ Inside|Out project, which involves installing framed reproductions from the DIA’s collection at outdoor locations on building facades or in parks. Two private Ann Arbor businesses – Zingerman’s Deli and the downtown Borders store – were part of the program in 2010, and since then the DIA has been talking periodically with AAPAC and city staff about expanded participation.

The works will be hung from late March through June at several downtown locations: the Justice Center (Fifth & Huron); downtown fire station (Fifth & Ann); Lena restaurant (Main & Liberty); Kerrytown Market & Shops (Fourth & Kingsley); Sculpture Plaza (Fourth & Catherine); Zingerman’s Deli (Detroit & Kingsley); and the Liberty Street alley near Main Street.

Comm/Comm: AirRide

During public commentary time, three Skyline High School students – who are part of the school’s communications, media, and public policy magnet program – addressed the board on the topic of the AATA’s AirRide service. By contracting with Michigan Flyer, the AATA provides hourly service between downtown Ann Arbor and Detroit Metro airport. The students’ remarks came in support of the service – and they ticked through the various environmental benefits, economic advantages, as well as the amenities offered on the buses, like free wifi. [The DDA's role in the AirRide is that it provides subsidized parking in the Fourth and William parking structure for those who use the AirRide service.]

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

Absent: Newcombe Clark.

Next board meeting: Noon on Wednesday, April 3, 2013, at the DDA offices, 150 S. Fifth Ave., Suite 301. [Check Chronicle listings to confirm date]

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This go!pass, subsidized by the Ann Arbor Downtown Development Authority, lets its holder ride AATA buses an unlimited number of times.

If I rode the AATA buses to and from work every day and paid the full $1.50 fare each way, the cash value of that card would be about $750 per year. Of course if I were actually riding the bus that frequently, I’d be somewhat better off purchasing a 30-day pass for $58 a month, which would come out to just a bit under $700 annually.

What I actually paid for that card this year was $10 – just a bit over 1% of its potential cash value.

So what sort of dark magic subsidizes my potential rides on AATA buses? And why do I have access to this magical go!pass card, when you, dear Chronicle reader, likely do not?

Along the road to answering these questions, I’d also like to make a proposal. It’s a vision for broadening the program, getting more transit passes into the hands of Ann Arbor residents, and expanding the possible uses for the go!pass – including (shudder) the ability to use a transit pass to pay for parking.

Policy Choices Already Made: Charge More for Parking

A cynical explanation of my public transportation subsidy would go like this: On average, the unwitting motorists who park their cars in Ann Arbor’s public parking system pay prices set 3% higher than necessary; and this 3% “surcharge” is used to subsidize the bus rides of go!pass holders.

The percentage is basically right – because Ann Arbor’s public parking system generates about $15 million in revenue annually, and the annual subsidy required to pay for the rides taken by go!pass holders is about $500,000. And that $500,000 is, in fact, allocated from the fund that receives parking revenues.

But before you conclude that bus riders are benefiting at the expense of motorists, it’s worth considering the benefit to motorists from this subsidy: fewer cars on the road, which means better traffic flow for motorists; less competition among motorists for parking spaces; and reduced need to reserve for capital replacement and new construction of parking structures, which relieves some upward pressure on parking prices.

And if you’d like to argue against the go!pass transportation subsidy on the grounds that this “surcharge” on parking prices is effectively a tax – one that we voters never approved – then it’s worth considering that the total “surcharge” applied by the Ann Arbor public parking system is actually closer to 20%, of which only 3% goes to subsidize transportation. The other 17% is baked right into the contract with the city of Ann Arbor, under which the Ann Arbor Downtown Development Authority operates the city’s public parking system.

Under the terms of that contract, the city receives 17% of gross parking revenues, which the city uses to “subsidize” various general fund activities – like the salaries of police officers, firefighters, city planners, and allocations to human services nonprofits.

So when mayor John Hieftje talks about how he wouldn’t trade Ann Arbor’s budget situation for that of any other city in Michigan, it’s easy to understand why: Dealing with tight financial times is easier when you can cover the first 2% or so of your general fund budget with revenues from your public parking system. Other cities in Michigan don’t necessarily have the option to cover a general fund budget gap through increased parking prices.

In any case, I think it’s sound public policy to analyze the subsidy provided for go!passes as an investment in the city’s transportation infrastructure. I think it’s less sound to treat the public parking system as a way to backstop the general fund.

But my point in writing is not to argue the merits of either policy choice. Those policy choices are already currently in place. What I’m suggesting is that now is a good time to reflect on the specifics of how the transportation subsidy is allocated.

How Is the Transportation Subsidy Allocated?

The go!pass program is administered by getDowntown, but the entity that makes the policy choice on allocation of the go!pass subsidy is the board of the Ann Arbor DDA. That’s a function of the fact that the DDA manages Ann Arbor’s public parking system under contract with the city. And in broad strokes, as long as the city gets its contractually obligated 17% of gross revenues, the DDA has latitude to expend parking system revenues according to the collective wisdom of its board.

For around 10 years, a transportation subsidy has supported the go!pass program, which is available only to Ann Arbor downtown employees. I get my go!pass card through the Workantile, a downtown coworking community.

At its June 2, 2010 meeting, the DDA board made a three-year allocation from the parking fund for the go!pass subsidy: $445,672 for FY 2011; $488,054 for FY 2012; and $540,060 for FY 2013, the current year. This money is paid to the AATA to cover the cost of rides that go!pass holders take. The size of that subsidy is a function of at least two factors.

First, go!pass holders take a lot of rides on AATA buses. During the 12 months between Oct 1, 2011 and Sept. 30, 2012, they took about 604,000 rides. That reflected a slight dip in go!pass ridership, down from 634,000 rides in the previous year.

go!pass total rides by year. The number of rides taken with go!passes has roughly doubled since 2004. This past year reflected a dip, which appears to be related to a reduced number of cards in circulation: 6,591 compared to 7,226. (Data from AATA; chart by The Chronicle.)

go!pass rides by month, year over year. The red trend line is the most recent year, 2012. The previous year is shown in black. (Data from AATA; chart by The Chronicle.)

While the total number of rides dipped slightly, the number of rides per card continued its upward trend. Since 2004, the number of rides per card has increased from about 60 to about 90. (Data from getDowntown program; chart by The Chronicle.)

The size of the needed subsidy is also partly a function of AATA policy. At its Aug. 24, 2011 meeting, the AATA board voted essentially to calibrate the cost of the go!pass rides to the amount of money the DDA had already allocated, instead of calculating the actual cost, which would likely have been more.

The size of the subsidy that’s needed to support bus rides taken through the go!pass program is also reduced somewhat by the $10 cost that’s charged to a company for each employee’s go!pass. And a go!pass program rule further amplifies the effect of the $10 cost per go!pass. That rule requires participating downtown employers to purchase passes for all their employees – at a cost of $10 a year. So companies are required to be “all-in” with the go!pass program.

Say a 20-person company participates in the program, but only five employees think they’ll ever want to ride the bus, for whatever reason. That 20-person company is still required to purchase 20 go!passes at $10 apiece. The $150 collected for those 15 go!passes – which will likely never be used – helps offset the cost of the rides taken with the five other cards, which could be heavily used.

From presentations I’ve seen getDowntown executive director Nancy Shore give, the Workantile’s pattern of go!pass usage is typical. A few card holders take a relative large number of rides, while the “long tail” of cards shows relatively little use:

Workantile go!pass usage.

So the financial effect of the “all-in” requirement is to reduce somewhat the amount of additional subsidy that is needed, with the cost of little-used cards partly offsetting the cost of the rides taken with heavily-used cards.

But the “all-in” requirement is not financially motivated. Instead, it’s seen mainly as a way to put a bus pass in the hand of someone who might otherwise never even consider using the bus to get somewhere. And that person might wind up taking a couple rides, and might even add the bus as an occasional option to satisfy their travel needs.

That makes sense to me – putting a convenient, economical tool for accessing public transportation in as many hands as possible, on the theory that it might help win some converts. Some of those converts might add to the nice meaty head of the “long tail,” but others might help shorten and thicken up that tail.

With that in mind, why do those hands we’re putting these bus passes in have to be attached the ends of arms belonging to downtown employees?

Bus Passes for Everyone

I would make two observations. First, the go!pass program is a success measured in terms of participation and ridership. But I think the subsidy is greater than it needs to be to achieve the goals of the program. I think there’s a lot of room to increase the $10-per-card cost, without diminishing the fact that these go!passes would still be an incredible bargain to a cardholder or to a company. But some revision to the “all-in” requirement for downtown businesses might be required.

Second, ordinary Ann Arbor folks who own property and pay the 2 mill transit tax are susceptible to the same incentives and influences that downtown employees are. If you put a convenient, economical tool for accessing public transportation in all of their hands, you might make converts to public transportation out of them as well.

The DDA board will, between now and April 2012, weigh the question of continuing to support the go!pass program – because the three-year allocation goes only through this fiscal year, which ends on June 30, 2013. If the board were to maintain the public transportation go!pass subsidy at roughly current levels – around a half million dollars a year – but reduce the public transportation subsidy just for downtown employees, that subsidy could be extended to a broader group of people.

So here’s what I’d like the DDA board to consider: Begin a transition from the DDA’s historical approach to the go!pass subsidy, which is downtown-employee centric, to one that is more broadly inclusive of Ann Arbor. I’m not suggesting that we pull the rug out from under the go!pass program all in one go. But eventually, I’d like to see the following kind of program replace the current go!pass.

• A physical swipe-able transportation card would be sent to every Ann Arbor address that pays property taxes – because the card would be included in the tax bill. Any registered voters who were missed in that mailing would also receive a card. Having such a card would simply be part and parcel of living in Ann Arbor. They’d be as ubiquitous as library cards. Such cards could also be obtained by any non-resident for, say $10.
• The transportation cards would be issued in a “pre-loaded” state with, for example, 20 bus rides or 10 hours of parking. You could swipe it to board a bus, or to pay for your downtown parking. So this subsidy would be available broadly, not just to downtown employees. But it wouldn’t be as generous as the current subsidy to downtown employees.
• Additional value could be loaded onto the cards though online purchase or at automated kiosks at the downtown AATA transit center, which is being rebuilt. To make the kiosks a reality, though, the AATA would need to re-think some choices on that new transit center building it’s starting to build. At its Oct. 18, 2012 meeting, the AATA board opted to add the cost of LEED certification to the budget of the new transit station, but not to include the cost of automated ticketing kiosks.

The DDA board will be holding a retreat on Nov. 16. That would be a good occasion to engage in the higher-level policy discussion that could lead to such a transit pass program, funded with public parking revenues.

Other Ridership

Though it’s unrelated to my specific proposal, this column seems like a good repository for some additional data on other subsets of AATA ridership (University of Michigan affiliates) and other modes of transportation (Amtrak). So here it is:

University of Michigan ridership on AATA buses by month from 2005-2012. The most recent year is the red trend line. The previous year is the black trend line.  (Data from AATA; chart by The Chronicle.)

University of Michigan ridership on AATA buses – yearly totals: 2005-2012.  (Data from AATA; chart by The Chronicle.)

Total ridership on AATA fixed route service by month from 2004-2012. The most recent year is the red trend line. The previous year is the black trend line. (Data from AATA; chart by The Chronicle.)

Total ridership on AATA fixed route service yearly totals from 2004-2012. (Data from AATA; chart by The Chronicle.)

Total boardings and deboardings at the Ann Arbor Amtrak station, located on Depot Street. The most recent year is the red trend line. The previous year is the black trend line. Last year the monthly totals showed Amtrak on pace to set a record through May, but numbers dropped from May through the rest of the year, when compared to the previous year’s highs. This year tracked about the same as last year through March, dropped, but recovered in June and July and was back to previous years’ highs in August and September. (Data from MDOT; chart by The Chronicle.)

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The authorization of $30,000 from the DDA’s parking fund – for design, fabrication and installation of the bicycle storage facility – was given at the board’s Oct. 3, 2012 meeting. Similar “cages” in other cities use a chain-link fencing material. However, the DDA hopes that a more aesthetically pleasing option can be identified.

The facility is designed for commuters who would pay a rental amount for use of the “cage.” Bicyclists would still be responsible for securing their own bikes in racks inside the cage. [.jpg of rack configuration] The revenue from the rentals would go to the DDA to compensate for the lost revenue from the automobile parking spaces. The getDowntown program, which is formally a creature of the Ann Arbor Transportation Authority, would receive a yet-to-be negotiated portion of that revenue in exchange for managing the program. The getDowntown program already manages some downtown bicycle lockers.

Based on discussion by DDA and getDowntown staff at a Sept. 26 DDA operations committee meeting, the current intent is to make the cage available only to holders of the go!pass – a bus pass that downtown employers can purchase for their employees at a cost of $10 per year. The cost of the go!pass rides is subsidized by the DDA.

Also at the Sept. 26 committee meeting, it was reported that Barracuda Networks believes that as many as 25 of its employees are potential users of the bike cage facility. Barracuda was recently granted a tax abatement by the Ann Arbor city council in connection with its move from Depot Street to a downtown location immediately adjacent to the Maynard Street parking structure, where the cage is to be located.

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

Part of the discussion at the DDA transportation, operations and construction committee meeting included the “two-inch” rule on vertical sidewalk displacement. A law working its way through the state legislature would establish that a city is presumed to have maintained a sidewalk properly, but that can be rebutted by evidence showing that the proximate cause of an injury was a “vertical discontinuity” defect of 2 inches or more in the sidewalk. (Photo by the writer.)

Members of the DDA’s transportation, operations and construction committee were briefed on that and a number of other issues at its regular monthly meeting on Wednesday, Sept. 28. (The committee has a combined function for what were at different times in the past three separate committees.)

The committee was also briefed on: (1) the status of the getDowntown program; (2) a parking communications plan aimed at evening employees; (3) the financial picture for the city’s public parking system; and (4) the results of a parking customer satisfaction survey.

Committee members were somewhat surprised and disappointed to learn that the city council’s policy on the use of proceeds from the proposed sidewalk millage would place restrictions on using millage money inside the boundaries of the DDA’s TIF district.

The city council’s Aug. 4 resolution authorizing ballot language for the proposed 0.125 mill tax places a limitation on the use of funds inside the TIF district, though the wording on the ballot does not include the limitation. The resolution states that inside the DDA district, only those sidewalks adjacent to single- and two-family houses (but not other commercial properties) would be included in a millage-supported sidewalk repair program.

A resolution of intent on the use of the sidewalk millage, which includes the restriction inside the DDA TIF district, was postponed from the council’s Sept. 19 meeting, and will be taken up by the council again on Oct. 3.

At their Wednesday meeting, DDA committee members were also apprised that the getDowntown program, which draws the majority of its funding from the DDA, will not be folded into the DDA as had previously been planned. Instead, the program’s two staff members will remain employees of the Ann Arbor Transportation Authority. The getDowntown program’s status has been a question since the Ann Arbor Area Chamber of Commerce (now the Ann Arbor/Ypsilanti Regional Chamber) two years ago pulled out of the four-way partnership that supported getDowntown. The remaining three partners are the city of Ann Arbor, the DDA and the AATA.

The committee was also briefed on elements of the DDA’s communications plan that’s aimed at downtown evening employees, in connection with possibly extending parking meter enforcement hours past 6 p.m. Other parking-related issues on the committee’s agenda included a structure-by-structure breakdown of the financial performance of the city’s parking garages, as well as an overview of the results of a regular parking system survey used to evaluate Republic Parking, the DDA’s parking contractor.

This report focuses on sidewalks and getDowntown.

Sidewalks

On the Nov. 8 ballot are two questions for Ann Arbor voters. The first is the renewal of an existing street repair millage. The city is asking voters to approve the levy of a 2.0 mill tax for resurfacing and reconstructing streets and bridges. A mill is $1 for every $1,000 of taxable value of a property.

Also on the ballot is a proposal that asks voter to authorize an additional 0.125 mills for sidewalk repair. The sidewalk repair levy would be contingent on the street repair millage also receiving approval. Currently, the city’s ordinance on sidewalk repair places responsibility for maintenance and repair of sidewalks on the owner of the adjacent property. That ordinance would be amended, if the millage is approved.

The city council resolution authorizing the ballot language for the sidewalk millage – approved at the council’s Aug. 4 meeting – directs the city attorney to prepare an ordinance revision, in the event the sidewalk repair millage wins voter approval.

Sidewalks: Restriction on Use in the DDA District

At Wednesday’s meeting, deputy DDA director Joe Morehouse apprised the committee of the policy associated with the proposed sidewalk repair tax levy, which restricts its use inside the DDA district. The staff memo accompanying the city council resolution reads [emphasis added]:

The sidewalk repair millage, if approved, will be used only for the sidewalks adjacent to properties that are on the City’s tax roll, which excludes schools, churches and city owned properties as well as those owned by the University of Michigan. The excluded properties would be responsible for their own sidewalk repairs as they are now. For the first year FY 2013, the estimated net revenue for the sidewalk repairs is $563,000.00 after deductions for the DDA. Properties other than single- and two-family homes within the DDA district will continue to be responsible for their own sidewalk repairs as before.

The Aug. 4 resolution authorizing the ballot language included a separate resolved clause reflecting the restriction mentioned in the staff memo [emphasis added]:

RESOLVED, That the proposed City managed sidewalk trip hazard repair program include the sidewalks adjacent to all properties on the city’s tax roll, but excluding those properties within the DDA district that are not single- and two-family because those properties can benefit from the tax dollars deducted from the proceeds of the new millage and given to the DDA; and …

A resolution of intent on millage expenditures, considered by the council at its Sept. 19 meeting, also reflects the exclusion of some properties in the DDA district from eligibility for sidewalk millage expenditures:

To the extent the 2012 Street and Bridge Resurfacing and Reconstruction and Sidewalk Repair Millage is used for the repair of individual sidewalks slabs, it will be used only for sidewalks adjacent to all properties outside the Downtown Development District against which the City levies property taxes and adjacent to single- and two-family houses within the Downtown Development District against which the City levies property taxes.

A vote on the resolution of intent was postponed by the council until Oct. 3. However, the DDA exclusion drew a query from councilmember Christopher Taylor (Ward 3), who appeared puzzled about the motivation behind the exclusion. From the Sept. 19 Chronicle meeting report:

Taylor then asked what the rationale was for the restrictions on spending within the DDA for properties that are not single- or two-family houses. [Homayoon Pirooz, head of project management for the city] noted that it’s part of the ballot language the council had approved in August. The rationale, he said, was that the DDA receives a share of the street repair millage [through its tax increment finance capture district] so it makes sense for the DDA to cover the costs within its geographic district.

[While the DDA exclusion is not part of the ballot language, it is a part of the city council resolution authorizing the ballot language.]

Sidewalks:  TIF and the Sidewalk Millage

As Pirooz explained to Taylor, the rationale for excluding some properties inside the DDA district from a millage-funded city sidewalk repair program is that the TIF capture inside the DDA’s district would provide a portion of those millage revenues to the DDA.

By way of background, it’s worth noting that not the entire millage is captured. Only the difference between the baseline property value in the district and the increase in property value due to improvements (the “increment” in tax increment finance district) is captured by the DDA’s TIF.

For fiscal year 2012 (the current fiscal year, which started July 1), the valuation of the increment in the DDA district is $137,800,186. So the DDA’s capture is roughly $17,500 (.125*137,800,186/1000). The city of Ann Arbor’s baseline tax revenue inside the district due to the sidewalk repair millage would be around $31,500. So, of the $49,000 the DDA district would generate through the sidewalk millage levy, the DDA would receive about 36% of it.

At one point during Wednesday’s committee meeting, DDA executive director Susan Pollay ventured that it would not be possible to fix every qualifying sidewalk in the DDA district for $17,500.

Sidewalks: Committee Member Discussion

As one measure of the lack of communication between the city and the DDA on this issue, the committee began their meeting on Wednesday under the impression that the ballot language was still an open question. [Ballots are already being mailed to those voters who've requested to vote absentee.]

John Mouat said he felt it was “pretty outrageous” that the council proceeded with that policy without talking to the DDA. It doesn’t seem unreasonable to be “a little peeved” about it, he said. Roger Hewitt indicated agreement with Mouat, but said he couldn’t say he was surprised about the lack of communication.

(Image links to higher resolution image) This screenshot from Washtenaw County’s mapping system shows the nearly 30-foot distance between the sidewalk edge and the parcel edge along South University Avenue. DDA executive director Susan Pollay brought up this distance during the Sept. 28 committee meeting.

Leah Gunn summed up the policy by noting that there are commercial property owners who will have to pay the tax, but won’t get the benefit of the millage.

DDA executive director Susan Pollay raised a question about University of Michigan property mentioned in the staff memo – there’s a lot of UM property in the DDA TIF district. [UM does not pay property taxes, so there are no taxes from the UM for the DDA's TIF district to capture.] Pollay noted that the city’s right-of-way extends well past sidewalks next to UM property in many instances.

Bob Guenzel wondered if there were an implicit obligation that the DDA would incur to repair the sidewalks in the DDA district that are not single- or two-family houses. Guenzel clarified with Morehouse that it would still be a commercial property owner’s responsibility to keep up the sidewalk.

Sidewalks: Liability, Open Questions

Pollay indicated that she had a meeting scheduled with city staff so that she could get a better understanding what the city’s expects of the DDA.

For example, she said, she wanted to know if the city was assigning trip-and-fall liability to the DDA. Gunn ventured that liability would end up being decided in a court case.

Nader Nassif, a local attorney and newest member of the DDA board, said it was not his specialty, but ventured that most slip and falls for sidewalks come under the “open and obvious danger” rule. [On that doctrine, the open and obvious character of a situation can be used to argue that the situation itself serves as adequate warning to a reasonable person that a danger is present and can reasonably be expected to protect himself against it.]

Joan Lowenstein mentioned a rule-of-thumb that there needs to be more than a 2-inch height differential in order to create liability. But she said there’d been a recent change in the law, and she hadn’t kept up with it.

Lowenstein summarized her understanding by saying that if a sidewalk is unsafe, the city is ultimately responsible. But if the city points it out to the property owner, then it’s clearly the property owner’s responsibility. [That is consistent with the city's current approach: Property owners are required by ordinance to maintain and repair sidewalks abutting their property, and the city has systematically pointed out sidewalk problems to property owners.]

Sidewalks: Two-Inch Rule

The two-inch rule to which Lowenstein referred is under consideration by the state legislature. A bill passed by the state House of Representatives in the summer of 2011 clarifies that the presumed governmental immunity extends explicitly to cities and not just counties. The Michigan Supreme Court, in Robinson v. City of Lansing, had reached the conclusion that the existing rule only applied to sidewalks adjacent to county roads. [.pdf of analysis of the bill including the court case.] The state Senate has approved a similar bill, but neither chamber has yet taken up the other’s bill.

The intent of the legislature is to write a law that would extend the presumption of immunity and the two-inch rule to other municipalities, including cities. The legislation would make it more difficult for a plaintiff to prevail in a lawsuit against a municipality. Ann Arbor city attorney Stephen Postema and assistant city attorney Bob West lobbied the House judiciary committee in favor of the bill.

In relevant part, House Bill 4089 reads, with revisions from an initial version indicated in italics and strikethrough:

(3) In a civil action, a municipal corporation that has a duty to maintain a sidewalk under subsection (1) is presumed to have maintained the sidewalk in reasonable repair. This presumption may only be rebutted by evidence of specific facts showing that the a proximate cause of the injury was 1 of the following:
(a) a vertical discontinuity defect of 2 inches or more in the sidewalk.
(b) a dangerous condition in the sidewalk itself of a particular character other than a vertical discontinuity.

State Rep. Jeff  Irwin (D-District 53), who sits on the House judiciary committee, represents a district that includes most of the city of Ann Arbor. In an interview with The Chronicle in the summer of 2011, shortly after the bill passed the House, Irwin said he supported it after some initial concerns were addressed.

Among those concerns was the initial wording that indicated “the proximate cause” – which was eventually amended to read “a proximate cause.” Irwin said that to show something was “the proximate cause” would require showing not only that it was a proximate cause, but also that there were no other proximate causes – a burden he felt was not appropriate.

A second revision Irwin wanted and achieved was the deletion of the word “specific” in the phrase “specific facts.” He told The Chronicle that the phrase seemed to create two species of facts – specific facts, and other kinds of facts. He did not know what the possible difference was between those two kinds of facts.

getDowntown Program

By way of basic background, the getDowntown program is a partnership among the DDA, the Ann Arbor Transportation Authority and the city of Ann Arbor. The program acts as a commuter consultancy for downtown employees, promoting alternatives to driving a single-occupancy vehicle to work. As part of a three-year funding plan approved in June 2010 for fiscal years 2011-13, the getDowntown program will receive roughly $500,000 each year from the DDA for FY 2012 and FY 2013. The bulk of the funding is to subsidize the cost of rides for holders of a go!pass.

The go!pass is a card that allows employees of downtown businesses to board AATA buses on an unlimited basis without paying a fare on boarding. Their rides are paid by the DDA out of public parking revenue it receives under its contract with the city of Ann Arbor for managing the public parking system. Employers purchase go!passes for their employees for a cost of $10 per year.

getDowntown Program: Finding a Home – DDA

At its July 6, 2011 meeting, the DDA board was briefed on the status of the getDowntown program. At that point, a tentative decision appeared to have been made to absorb the two getDowntown staff members into the DDA. From that meeting report:

… the getDowntown program was previously funded in a four-way partnership with the Ann Arbor Transportation Authority, the city of Ann Arbor, the DDA and the Ann Arbor Area Chamber of Commerce (now the Ann Arbor/Ypsilanti Regional Chamber). In 2009, the chamber essentially withdrew from the partnership, which meant that the getDowntown program needed to find alternate quarters – part of the contribution made by the chamber had been to provide office space. The getDowntown program then moved to offices at 518 E. Washington, with the financial support of the DDA. Brief coverage of the issue is included in The Chronicle’s report on the Dec. 2, 2009 DDA board meeting.

At the Oct. 7, 2009 meeting, Mouat had mentioned the issue as part of his regular monthly committee report to the board. And it came up again at the board’s May 7, 2010 meeting.

A question from DDA board member Leah Gunn clarified that the issue being considered is not the physical location of getDowntown’s offices, but rather the administrative payroll issue: Which organization will formally employ the getDowntown program’s two staff?

Mouat explained that currently the two staff are employees of the AATA. The transportation committee is looking at the possibility of transferring the responsibility to the DDA. Mouat characterized it as a “nice fit” from a funding perspective – both getDowntown and the DDA have a focus on the downtown. The mission of getDowntown is also connected to the planned implementation of transportation demand management in the parking system, Mouat said.

Another advantage is that AATA’s contribution via a federal Congestion Mitigation Air Quality (CMAQ) grant is administratively easier, if getDowntown is separate from the AATA, Mouat said.

The impact on the DDA, Mouat said, would be that deputy DDA director Joe Morehouse would do the books, executive director Susan Pollay would do the employee evaluations, and the two staff would become employees of the DDA.

getDowntown Program: Finding a Home – AATA

But at the Sept. 28 DDA committee meeting, getDowntown director Nancy Shore told committee members that it now appeared that getDowntown staff would remain employees of the AATA.

Shore began by describing how getDowntown had been part of the Ann Arbor chamber for its first 10 years. When that organization had financial difficulties, she said, getDowntown staff were absorbed by the AATA. The advisory board for getDowntown had a 1.5-2 year discussion and had made a decision that getDowntown would become a part of the DDA.

[The getDowntown advisory board incudes: Andrew Brix, energy coordinator for the city of Ann Arbor; Eli Cooper, transportation program manager for the city of Ann Arbor; Susan Pollay, executive director of the DDA; Mary Stasiak, manager of community relations for AATA; and Ken Anderson, community relations coordinator for the AATA.]

Absorption into the DDA would have made getDowntown staff into city employees, Shore told the committee. The DDA would have done the bookkeeping and administered the payroll for getDowntown.

But two months ago, Shore said, with the fluxuation in municipal governments and with the situation with the DDA, a decision was made to maintain the current arrangement, with getDowntown a part of the AATA. As another point in favor of remaining with the AATA, Shore pointed to the possibility of the program’s physical housing on the second floor of the newly reconstructed Blake Transit Center [to be started in the spring of 2102].

getDowntown: Committee Discussion – Program Status

Leah Gunn wanted to know if staying with the AATA would change how Shore did her job: “Are you comfortable with this?” Gunn asked Shore. Shore told Gunn she was comfortable with the arrangement. She said she was trying to keep the program sustainable. For businesses who participate in the go!pass program, it will feel the same, she said. Gunn praised Shore, by telling her that when Shore had come on board at the getDowntown program, she “took it to a whole new level.”

Bob Guenzel confirmed with Shore that it’s currently the AATA that signs checks for the getDowntown program. Shore also confirmed for Guenzel that it was likely that getDowntown could be housed at a newly-reconstructed Blake Transit Center, using second-floor office space.

Gunn noted that the city of Ann Arbor had sold AATA the strip of land that AATA had wanted to facilitate their desired new transit center design. John Mouat asked Shore if she felt comfortable about the longer term at the AATA, on a horizon for, say, five years. Shore noted that the AATA is subject to the same financial constraints as other organizations. She also pointed out that the AATA is looking at a structural reorganization. Shore noted that getDowntown serves as a bridge between the DDA, AATA and the city of Ann Arbor.

Guenzel confirmed with Shore that getDowntown’s advisory board, along with the city of Ann Arbor, is fine with the proposed continuation of getDowntown as part of the AATA. Guenzel got clarification that the DDA board would not be required to take a particular action – the conversation was an informational point.

getDowntown: Committee Discussion – go!pass Status

Shore then gave the committee an update on the go!pass pricing structure. She noted that the price of the pass to employers has been increased from $5 to $10 for an entire year. Shore said negative feedback has been minimal – employers are still getting a year’s worth of transportation for $10. She’s not seeing a dip in participation.

Shore noted that the DDA is a huge reason the go!pass exists, because the rides used under the go!pass system are paid out of revenue from the public parking system – which the DDA manages for the city. [Additional Chronicle reporting on the go!pass price increase from $5 to $10 for employers, and the reduction in the price per ride charged by the AATA: "AATA Reduces Price for go!pass Rides"]

Shore noted that August 2011 had been a record-breaking month. More rides were taken in that month than in the history of the program, including the first year, when go!passes were distributed free. Guenzel scrutinized a point on the handout that spelled out a policy on part-time and volunteer eligibility for go!passes. He wanted to know if that was new. Shore said it’s always existed as part of the policy, but it’s been slightly revised. She said that in order for a position to be considered a contribution to downtown, it made sense to require at least two days a week of work.

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The change authorized by the board might go unnoticed for holders of the passes, who do not pay fares to board the bus, but will include an increase from $5 to $10 for the annual fee paid by employers. That’s an increase that will be implemented by the getDowntown program, which administers the go!pass program. However, in the action taken on Aug. 24, the AATA is actually lowering the price per go!pass ride.

Here’s why. Holders of the go!pass card can board the bus without paying a fare, and there are no limits on the number of rides that can be taken with the card. The cost of such rides is funded in small part by the $5/card fee paid by employers, but in largest part by revenues from the city’s public parking system provided through the Ann Arbor Downtown Development Authority. At its June 2, 2010 meeting, the DDA authorized three years worth of funding for the go!pass program. For the second two fiscal years of that funding, approval amounted to $438,565 (FY 2012) and  $475,571 (FY 2013).

The number of rides taken using the go!pass has increased each year for the last decade, but has jumped significantly during the last year. [.jpg graph of go!pass ridership] In the past, the AATA has priced go!pass rides in a way that matches the revenue per go!pass ride to the amount that bus riders would pay if they paid the full fare under a regular 30-day pass – the cheapest full-fare option. So, as go!pass ridership has increased, the total amount charged by the AATA for the rides has also increased.

In the past, the DDA has increased its level of support to match what the AATA has charged. As the DDA is under increasing financial pressure due to the new public parking system management contract recently signed with the city of Ann Arbor, as well as a possible need to return excess tax increment finance (TIF) that was collected, it’s not anticipated that the DDA will be able to increase the amount it contributes to the go!pass program.

Given the levels of funding now pledged by the DDA, the price that employers would need to be charged per go!pass per year would be $26 – if the same policy is maintained of charging for go!pass rides so that their cost matches what the cheapest full-fare option would be.

In recent presentations to the DDA, Nancy Shore, the director of the getDowntown program, has recommended an increase from $5 to $10, not to $26. The advisory board of getDowntown has approved the increase to $10.

The action taken by the AATA board on Aug. 24 essentially sets the charge for go!pass rides at a flat rate – equal to the DDA’s current level of pledged support, plus an estimate that the total employer contribution (at $10/pass/year) would be $71,000 per year, based on the roughly 7,100 go!passes sold to employers so far this year. That is, the price charged for go!pass rides for the next two fiscal years will be $509,565 and $546,571, respectively – independently of the number of rides taken by go!pass holders.

The board’s action translates to a decision to accept a $16/pass/year shortfall in revenues from go!pass rides, compared to what the previous pricing policy has been, or roughly $113,600 (16*7,100).

This brief was filed from the downtown location of the Ann Arbor District Library, where the AATA board holds its meetings. A more detailed report will follow: [link]

To honor her past year of service as chair of the Ann Arbor Downtown Development Authority board, Joan Lowenstein was presented with a plastic bag full of gravel. (That was only part of the token of appreciation.) To Lowenstein's left is Gary Boren, who was elected chair for the next year. (Photos by the writer.)

But during the meeting, parking issues were a focus, as they usually are.

First, board member Roger Hewitt reported to the board that additional data on usage of the city’s public parking system will now be available from Republic Parking. The DDA manages the city’s public parking system under a contract with the city of Ann Arbor – the DDA subcontracts out the day-to-day operations to Republic Parking. The new kind of data measures the number of total parking hours used by parkers against the total number of parking hours that are available in the system. Based on that measure, the parking system has seen a 1.72% increase in usage over the first five months of 2011, compared with the same five months of 2010.

Second, one of the major allocations of public parking revenue the DDA makes is to the getDowntown program, a partnership among the DDA, the Ann Arbor Transportation Authority and the city of Ann Arbor. As part of a three-year funding plan for the getDowntown program approved in June 2010 for fiscal years 2011-13, the program will receive roughly $500,000 from the DDA for FY 2012 and FY 2013, the bulk of which is to subsidize the cost of rides for holders of a go!pass. The go!pass is a card that allows employees of downtown businesses to board AATA buses on an unlimited basis without paying a fare.

The getDowntown program employs two people, including director Nancy Shore. At Wednesday’s meeting, Shore gave the full board the same presentation she’d given the board’s transportation committee earlier in the month. Part of the board discussion involved which of the three funding partners – the DDA, the city of Ann Arbor or the AATA – would employ the two getDowntown staffers in the future. One possibility, which based on Wednesday’s meeting seemed likely, would be for the DDA to add the two getDowntown staffers to its administrative payroll.

At its annual meeting, convened just after the monthly board meeting, the board elected new officers for the coming year, all with unanimous consent: Gary Boren, chair; Bob Guenzel, vice chair; Keith Orr, secretary; and Roger Hewitt, treasurer.

In recognition of her service, outgoing chair Joan Lowenstein was presented with a token of appreciation by the DDA staff: a plastic bag of gravel, and a necklace featuring a lump of gravel as its centerpiece.

The connection to gravel in Lowenstein’s gift was the underground parking structure on Fifth Avenue, which is currently under construction. The board got its regular update on the status of that project, as well as commentary from the owners of two immediately adjacent restaurants – Jerusalem Garden and Earthen Jar – which have seen their business drop by 30-50% during the construction. 

Underground Parking Garage

The ongoing construction on the underground parking garage on Fifth Avenue was a highlight during public commentary. The project also received its usual update out of the bricks and money committee.

Underground Parking Garage: Impact of  Construction on Businesses

Owners of two restaurants along Fifth Avenue, immediately north of the construction site of the new underground parking structure, addressed the board. Ali Ramlawi of Jerusalem Garden and Pushpinder Sethi from Earthen Jar expressed their frustration about the impact the project has had on their businesses.

Ali Ramlawi of Jerusalem Garden (left) and Pushpinder Sethi of Earthen Jar (right) listened to the rest of the board meeting after taking their turns during public commentary.

Ramlawi introduced himself as a resident of Ward 5 and reminded them that he’d addressed the DDA board previously [in October 2010]. He said that the four-minute time allotted for public commentary goes by fast, so he wanted to add to his previous comments.

He noted that his restaurant is located right next door to the construction site and the construction [which broke ground in late September 2009] had been going on for almost two years. He was not coming to the board for a handout, he said. He simply wanted to state a case. He said he did not feel that the DDA board fully considered the ramifications of its decisions on people and businesses.

Fifth Avenue has been closed for nearly a year and would be closed for another six months. The arrangement had not been fully explained at the outset, he said. [Ramlawi was one of the parties to a lawsuit over the parking garage, which was ultimately settled.] He’d been doing business for 18 years in Ann Arbor and the last 12 months have been the hardest. He reported that his customers often ask him about the construction: What is going on? And their followup question is this: What is the city doing for you? People are amazed, he said, that the answer is: nothing.

Ramlawi said he’s been told that it’s like any other project, like a bridge replacement. But it’s not the same, he said. As the DDA considers the future use of other city lots, he said, the DDA needs to take into account the impact of future projects on small businesses. His business has been down 30% for over a year. He pointed to other businesses besides his own in the immediate vicinity, like the Earthen Jar, Herb David’s Guitar Studio, and the Bead Gallery, and ventured that the community might lose one of them.

Ramlawi said when he hears about tax abatements being offered to companies to attract or retain them, he thinks it’s “fine and dandy” but also feels like the city needs to take care of mom-and-pop businesses – like Drake’s Sandwich Shop or The Del Rio. Those businesses disappeared and nobody replaced them. His own utilities – water, phone system, electricity – have been cut off at times due to the project and that has driven up the cost of doing business. He told the board he was upset with the “inaction of the DDA.”

Sethi said he didn’t need to repeat what Ramlawi had said. But he added that his own business was down more like 50% – it’s located immediately next to the project. The slump in business is not due to the recession, he said – that was 2008-2010. He said that the city should help by providing something like tax breaks.

Underground Parking Garage: Construction Update

John Splitt gave the update out of the bricks and money committee on the underground parking garage, which included the fact that mechanical work is starting on the dogleg of the east part of the structure. Some finishing work is also starting on the dogleg, and the top 2-3 feet of the earth retention system is being removed, as it’s no longer needed. In the middle portion, deck slabs are being poured and the structure is almost up to ground level on those pours.

For the third section of the garage, nearest to Fifth Avenue, the final foundation pours have been completed, Splitt said, with two pours of 2,200 cubic yards of concrete. That work has allowed Christman Company  – the contractor for the underground parking garage – to turn off the dewatering system.

The northeast corner of Liberty and Fifth as concrete work progresses on the Fifth & Division streetscape project.

John Mouat said that with the “shell” now done, he wondered if Christman is now looking at being able to “advance the schedule.” Splitt said that he meets weekly for breakfast with the Christman team, and he’s constantly trying to push the schedule. So it’s a weekly if not daily point of emphasis, he said. Obviously, he said, concrete only cures so fast.

Splitt also gave the report on the Fifth and Division streetscape improvement project. Eastlund Concrete Construction has done some work on Division Street, pouring some crosswalks. They are still doing some brick work too.

Work is progressing on the 200 block of Fifth Avenue – Eastlund was pouring curbs on the east side, and after the art fairs, which runs from July 20-23, they would move to the west side of street.

That will finish Eastlund’s part of the project, Splitt said. Christman will do the streetscape work on the 300 block of Fifth Avenue, after the underground parking garage – which is on that block – has finished construction.

Parking Revenue: go!pass Program

The DDA allocates revenue from the public parking system to support various projects. Some of those revenues support the go!pass program, which is administered by the getDowntown program.

Nancy Shore, director of the getDowntown program, was invited to give the same presentation to the full board on Wednesday that she’d made to the transportation committee at its June 8 meeting. The getDowntown program employs two people, including Shore.

By way of basic background, the getDowntown program is a partnership among the DDA, the Ann Arbor Transportation Authority and the city of Ann Arbor. As part of a three-year funding plan for the getDowntown program approved in June 2010 for fiscal years 2011-13, the program will receive roughly $500,000 from the DDA for FY 2012 and FY 2013, the bulk of which is to subsidize the cost of rides for holders of a go!pass.

The go!pass is a card that allows employees of downtown businesses to board AATA buses on an unlimited basis without paying a fare on boarding. Their rides are paid by the DDA out of public parking revenue it receives under its contract with the city of Ann Arbor for managing the public parking system.

By way of technical background, since early February 2009, the AATA has used fare boxes on its buses that allow for riders to swipe different kinds of cards as a way to validate their rides. Two kinds of cards that are now swiped are University of Michigan M-Cards and go!pass cards. Before the new fare boxes were installed, AATA drivers would record those rides with a button press, so some data was being collected about the total number of rides taken by University of Michigan affiliates or by holders of go!passes.

It’s possible, for example, to look at overall ridership on the AATA regular bus system as compared with the ridership of those two affiliate programs dating back at least to 2004. In Chart 1, the top group of lines are overall ridership numbers, the middle band are UM affiliate ridership numbers and the lower band reflect go!pass numbers.

Chart 1. Overall ridership on AATA buses, broken down by UM and go!pass rides by year. (Image links to higher resolution file.)

Within each band in Chart 1, separate lines correspond to different years. Generally, ridership across all categories has gone up year over year.

Statistical highlights of Shore’s presentation included the continuing increase in the number of go!passes purchased by downtown employers for their employees, and the number of employers who participate in the program. In 2001-02, 3,913 go!passes were purchased by a total of 239 companies. That compares to 7,157 passes purchased by 506 companies so far this year.

The total number of rides also continues to climb each year, as Chart 2 shows.

Chart 2. go!pass rides by month, charted year by year. (Image links to higher resolution image.)

In the course of the board discussion after Shore’s presentation, board member Newcombe Clark drew out the fact that employers must purchase go!passes for all of their full-time employees in order to participate. The cost to the employer per pass is currently only $5, but Shore is recommending that it be increased to $10 next year.

Clark also drew out the fact that based on the new swipable cards, it’s possible to track the usage of individual cards, not just count the rides taken.

Keith Orr wanted to know if there are people who have go!passes who haven’t used them – yes, said Shore. Summarizing Shore’s data in ballpark form, Russ Collins said it looks like half the people who are given cards by their employers don’t use them at all, and about one-third use them actively. He felt that the cards warranted a larger charge to the consumer – those who use it clearly see the value, he said, and even if you quadrupled the price to $20, it would still be a great benefit to them.

[The cost charged to employers for purchasing the cards, even though many employees do not use the cards, still does not nearly cover the cost of the rides taken. That's why the DDA will be subsidizing the go!pass rides with payments to the AATA of $438,565 for FY 2012 and for $475,571 in FY 2013.]

At Collins’ suggestion to hike the per card cost to employers, Clark hesitated, noting the requirement that cards must be purchased for all full-time employees. That might discourage an employer who had a large number of employees: “I don’t want to knock an employer out who couldn’t afford it,” Clark said.

Orr noted that part of the success of the program is the requirement that you have to buy a card for all full-time employees. In the course of her presentation, Shore explained that the focus on employees [as opposed to other visitors to the downtown] was driven by the fact that employees have the most consistent patterns and when that pattern can be changed, then it changes consistently.

Another highlight of Shore’s presentation was the breakdown by company type for card usage. In terms of number of rides taken, restaurant employees took 46% of the go!pass rides, government workers took 9% of rides and retail employees took 8% of rides.

go!pass usage by industry (Image links to higher resolution file)

Board members were complimentary of the program and of Shore’s work. Mayor John Hieftje noted that the program had won an international award a few years ago and he encouraged Shore to apply for that award again. He pointed to the connection to the city’s affordable housing goals. Not owning a car puts $500 per month back into someone’s budget that they can spend on something else, he said.

Leah Gunn said that since Shore had taken over the getDowntown program, it had really started to soar. Joan Lowenstein said the program was good evidence of how the DDA works in partnership with other organizations.

Roger Hewitt noted that out of 7,000 passes, about 2,400 are used on a regular basis. He wondered if it was possible to find out what percentage of those cardholders who are heavy users also own cars. Shore indicated that she would work on getting that information.

• Google Spreadsheet for data used to display overall AATA ridership broken down by UM affiliates, go!pass rides, by year
• Google Spreadsheet for data used to display breakdown of go!pass rides by weekday
• Google Spreadsheet for data used to display breakdown of go!pass rides by month, charted by year

Parking Revenues: Status of getDowntown Staff

As part of his report from the transportation committee, John Mouat noted that the getDowntown program needs to “find a home.” That’s still an ongoing conversation, he said.

By way of background, the getDowntown program was previously funded in a four-way partnership with the Ann Arbor Transportation Authority, the city of Ann Arbor, the DDA and the Ann Arbor Area Chamber of Commerce (now the Ann Arbor/Ypsilanti Regional Chamber). In 2009, the chamber essentially withdrew from the partnership, which meant that the getDowntown program needed to find alternate quarters – part of the contribution made by the chamber had been to provide office space. The getDowntown program then moved to offices at 518 E. Washington, with the financial support of the DDA. Brief coverage of the issue is included in The Chronicle’s report on the Dec. 2, 2009 DDA board meeting.

At the Oct. 7, 2009 meeting, Mouat had mentioned the issue as part of his regular monthly committee report to the board. And it came up again at the board’s May 7, 2010 meeting.

A question from DDA board member Leah Gunn clarified that the issue being considered is not the physical location of getDowntown’s offices, but rather the administrative payroll issue: Which organization will formally employ the getDowntown program’s two staff?

Mouat explained that currently the two staff are employees of the AATA. The transportation committee is looking at the possibility of transferring the responsibility to the DDA. Mouat characterized it as a “nice fit” from a funding perspective – both getDowntown and the DDA have a focus on the downtown. The mission of getDowntown is also connected to the planned implementation of transportation demand management in the parking system, Mouat said.

Another advantage is that AATA’s contribution via a federal Congestion Mitigation Air Quality (CMAQ) grant is administratively easier, if getDowntown is separate from the AATA, Mouat said.

The impact on the DDA, Mouat said, would be that deputy DDA director Joe Morehouse would do the books, executive director Susan Pollay would do the employee evaluations, and the two staff would become employees of the DDA.

Shore indicated that there was no hard and fast deadline, but it would be preferable to have a decision made by year’s end. Bob Guenzel asked what the position of the getDowntown funding partners is on the question of merging getDowntown with the DDA. Citing the views of the getDowntown board, Shore said that everybody is comfortable with it.

Regular Parking Report

Roger Hewitt summarized the regular monthly parking report for his board colleagues.

Total public parking revenues for May 2011 were $1,218,442, based on permit holder fees plus fees paid by 170,471 hourly parkers in structures. That’s an increase from May 2010, which had $1,145,740 in total revenues and 169,466 hourly parkers.

Percentage-wise that’s a 6.35% increase in revenue and an 0.59% increase in the number of hourly parkers, with a total system parking space inventory of 19 additional spaces: 7,149 in May 2011 compared with 7,130 in May 2010.

The board has recognized for some time that this kind of measure for parking demand is somewhat coarse. The number of hourly parkers gives some insight, as does the total revenue, but these data do not provide a direct measure of how much of the system’s capacity is being used.

At the DDA board’s bricks and money committee meeting on Wednesday, June 29, Joe Morehouse – deputy director of the DDA – presented committee members with data showing the percentage of total parking hours sold for parking structures, with 100% corresponding to the (practically impossible) scenario of every spot in every space filled with a car 24/6 (structures are free on Sunday) and no time lost when one car pulls out and another pulls in. Like the standard parking report, the comparison for May 2011 against May 2010 using that metric also showed an increase in demand: 33.22% in May 2010 compared to 34.94% in May 2011. [Ann Arbor public parking efficiency chart]

At Wednesday’s board meeting, Hewitt said that the DDA spent a lot of effort and resources to upgrade software and IT with new equipment, which can now capture enormous amount of data. The board had asked Morehouse and Republic Parking staff to get an idea of total occupancy – the total “car hours.” To generate the percentages, they’d taken as the denominator all the spaces in attended structures and lots for the entire time they charge for spaces. Hewitt said the data was currently only for about a year and a half, but they were working on getting more. At the June 29 committee meeting, Hewitt had described part of the problem as related to a corrupted database.

By way of some additional background, parking data and its accessibility to the public has a contentious recent history. In early 2009, a demonstration application was developed by independent programmers, to use real-time parking space availability provided on the DDA’s website to develop a software application where a phone number could be called and the caller would hear an automated voice give the number of spaces available in a given structure. That led, for a time, to the blocking of access to the DDA website by automated applications, a move that was met with strenuous objections by the local IT community, some members of which attended DDA board meetings to express their concerns.

Objections to the blocking of the parking usage data were amplified by the fact that around that time, the city council was considering approval of bonds for the construction of a new 640-space underground parking garage. The council approved the bonds and the garage is currently under construction along Fifth Avenue, with completion now anticipated in early 2012.

Another part of the context of that time period was the DDA’s recommended series of parking rate increases, which were in part due to the construction of the new garage.

At Wednesday’s board meeting, Hewitt noted that the next parking rate increase is due to take effect Sept. 1, 2011. He characterized it as being in the range of 5%. [For metered spaces, it's an increase from $1.10 to $1.20 per hour. The hourly rate for parking in a structure will be increased from $1.30 to $1.40] That was part of a series of annual increases approved in connection with the construction of the underground parking structure, he said.

In the fall of 2011, Hewitt noted, the DDA will need to make a presentation to the city council on parking rates and will need to have some idea of what they plan to do with parking rates a year from now.

The Varsity at Ann Arbor

Ray Detter reported to the board with a summary of the previous night’s meeting of the Downtown Area Citizens’ Advisory Council. Board chair Joan Lowenstein invited Detter to the podium by teasing him to spiff up, because the cameras were back on. [The videotaping system had a glitch at the start of the meeting and were not recording, but they were restored to service.]

Detter said that the advisory council had devoted their entire discussion to The Varsity at Ann Arbor, a proposed residential project planned for 425 E. Washington St., next to the 411 Lofts building. [The site is currently the location of an office building, which formerly housed the Prescription Shop. The Varsity is planned to be a 13-story apartment building with 173 units that would house 418 people. It would include 77 parking spaces.]

Detter said the advisory council felt the project would be a learning experience – with respect to a newly established design review board. Detter noted that in addition to the developer’s meeting with the design review board, which had already taken place, a second required meeting – a citizen engagement meeting – would be held on July 7.

Detter said the design review board had provided feedback and that the advisory council agrees with its suggestions. But the project has a long way to go if it’s going to voluntarily comply with the design guidelines, he said. The building as proposed now is 143 feet tall now, but he would encourage the developer to go higher, if necessary, if it would allow the building to step back more from the property lines.

Detter told the DDA board that his group supported a project now under construction, Zaragon West, because the developer considered the design guidelines as they were emerging, but before they were given final approval by the city council. Fortunately, Detter said, The Varsity’s developer had hired a local architect [Bradley Moore]. The first principle of the design guidelines, Detter said, was to identify and reinforce characteristics of adjacent sites. But The Varsity doesn’t doesn’t do that, he contended. There was no consideration to east or west where two smaller historic properties are located.

Detter also noted the two entrances to parking garages under the building – one on Huron Street and the other off Washington Street. Both of them pose problems for pedestrians and traffic, he said. One possibility is combine them so that only one entrance would be used. The east side of the building, which faces the First Baptist Church, is difficult, he said. One person had described it as a “slab,” Detter said, and another as a “tsunami of uninteresting brick.” That wall could be improved, he said, by reshaping it. The developer has started consulting with stakeholders, like the First Baptist Church, and as a result has added a walkway. Now it’s only five feet wide, but Detter hoped it could be made wider.

Lowenstein indicated she was glad the city council had reduced the proposed design board review fee from $1,000 to $500.

Communications, Committee Reports

In addition to Detter’s report from the citizens’ advisory council, the board’s meeting included the usual range of reports from its standing committees, as well as public commentary.

Comm/Comm: Retail Recruitment

Joan Lowenstein reported for the economic development committee that they’d explored the possibility of a role for the DDA in retail recruitment by inviting Ed Shaffran [a former DDA board member and head of Shaffran Companies Ltd., which owns several downtown Ann Arbor properties] and Mike Giraud of Swisher Commercial.

Lowenstein reported that the committee learned the DDA has done a lot already: infrastructure improvements have an impact on the ability to recruit retail. However, as far as going out and helping with recruitment directly, she said, they’d heard from Shaffran and Giraud that there’s not a lot you can do without “stepping on toes.” Knowledgeable brokers are already involved, and offering incentives can be slippery slope, she reported.

Where the DDA could help is with the promotion of the downtown and getting Ann Arbor onto the broker map nationally. Shaffran and Giraud also mentioned the need for larger floorplates – something the committee had also heard from representatives of Ann Arbor SPARK, the local economic development agency. Another theme the committee had heard mentioned before, Lowenstein said, was that regulatory processes are an impediment for developers to get projects approved.

Lowenstein mentioned that the DDA’s annual report is forthcoming for the current year. She characterized it as a statistical analysis and also a promotional document for the downtown.

Comm/Comm: Energy Grants

Russ Collins reported out for the partnerships committee on the DDA’s energy saving grant program. Through the program, downtown business owners can get an energy audit paid for, with matching funds for any recommended improvements that are actually implemented, up to a cap. These steps of the program – audit and implementation – are referred to as Phase 1 and Phase 2 by the DDA. In the past, the per-project cap for Phase 2 has been $20,000 per project. But Collins said that cap has now been reduced to $5,000.

The total project budget for the coming year will be $100,000, compared with $200,000 in previous years, Collins said. A total of $20,000 will be for Phase 1 assessments – they’ll target larger buildings as a part of an attempt to coordinate with the city’s PACE program, which provides a funding mechanism for making energy improvements. The remaining $80,000 will be focused on improvements that are directed toward smaller projects, he said.

Comm/Comm: Future Use of City-Owned Lots

Reporting out from the partnerships committee, Russ Collins said the majority of the committee’s last meeting had been spent addressing how to meet the city council’s directive to establish a public process to figure out what to do with some of the city-owned parcels in the downtown: the Library Lot, the former YMCA Lot, Palio’s Lot and Kline’s Lot.

Collins summarized the contributions of several guests at the partnerships committee meeting, including local developer Peter Allen, real estate developer Albert Berriz, AATA board chair Jesse Bernstein, and two University of Michigan faculty members in the college of architecture and urban design – Doug Kelbaugh and Kit McCullough.

Collins’ summary was consistent with The Chronicle’s report from that meeting: “DDA Continues Planning Prep.”

At that meeting, Kelbaugh and McCullough pitched their services to lead the public engagement process that would begin this fall – they were looking for a decision from the DDA about that in July or August. But Collins said the committee had decided to take a step back.

The upcoming partnerships committee meeting on July 13 will be devoted exclusively to how to move forward with that process. Collins noted that Sandi Smith, who co-chairs the committee with Collins and who was absent from Wednesday’s board meeting, is unavailable. Collins added that he would be out of town for the July 13 meeting. However, board member John Mouat, who is an architect, would be there to run the meeting, Collins said.

Comm/Comm: Fruit, Vegetable Bike Racks

As part of his report from the transportation committee, John Mouat said that carrot, apple and cherry bike racks were currently being painted to get them ready for installation at the Farmers Market.

Comm/Comm: LED Lighting Company

Ted Williams and Jaspreet Sawhney, with Falcon Innovations Inc., attended the meeting and addressed the board by way of introducing their company to the board. Sawhney, alluding to Pushpinder Sethi’s turn at the podium just before his own, said he was amazed that two people wearing turbans were addressing the DDA that day.

Jaspreet Sawhney of Falcon Innovations talks with Susan Pollay, the DDA's executive director.

Falcon is an LED lighting manufacturer. They had decided to come address the board when mayor John Hieftje stopped by their booth at the recent Green Fair held on Main Street downtown. Sawhney said that he’d previously met Susan Pollay, executive director of the DDA, and Dave Konkle, former energy coordinator with the city of Ann Arbor and now consultant with the DDA. Sawhney demonstrated two different products for the board. He told them that the firm’s manufacturing facility is not in Michigan but they are looking to change that.

Board member Russ Collins wanted to know if the lights were dimmable – yes. Board member Newcombe Clark pointed out that Falcon’s offices are located on Main Street, above Conor O’Neill’s.

Annual Meeting: Officer Elections

The main task for the DDA board at its annual meeting was to elect its officers for the next year. Standard practice is for the current vice chair to be elected chair, with the expectation that whoever is elected vice chair will serve as chair the following year.

Gary Boren, newly elected chair of the DDA board.

Roger Hewitt nominated current vice chair Gary Boren to serve as chair.

Newcombe Clark asked if Boren’s term was being renewed – that is, would he be reappointed by the mayor to serve on the board? By way of background, outgoing chair Joan Lowenstein’s term on the board ends on July 31, 2011, as do the terms for Gary Boren and John Mouat. Boren has been a vocal proponent of the idea that the DDA is an independent corporate body and not an arm of the city of Ann Arbor.

Last year, Clark had pointedly abstained from voting in the officer elections over the lack of information about reappointments to the board. From Chronicle coverage of the July 7, 2010 DDA annual meeting:

Abstaining from each of the officer votes was board member Newcombe Clark.

Clark explained to The Chronicle after the meeting that there’d been no indication from the mayor whether the two board members whose appointments are expiring July 31 – Jennifer S. Hall and John Splitt – would be reappointed. Clark said he could thus not be certain of the full range of choices for board officers.

Splitt was reappointed; Hall was not. Bob Guenzel was appointed instead of Hall.

In response to Clark’s question this year, Lowenstein said they did not know that yet. Mayor John Hieftje, sitting at the board table, did not offer any statement about whether he planned to nominate Boren for the city council’s approval for reappointment.

With little further discussion, the remaining officers were nominated and voted on. Leah Gunn, who serves on the Washtenaw County board of commissioners, nominated former Washtenaw County administrator Bob Guenzel as vice chair. That vote was unanimous. John Splitt nominated Keith Orr as secretary, and that vote, too, was unanimous. Splitt then nominated Roger Hewitt to stay on as treasurer.

In sum, the officer election featured none of the drama of two years ago, when the board initially could not find a consensus about who the next chair would be.

Outcome: All officers were elected by unanimous voice votes: chair, Gary Boren; vice chair, Bob Guenzel; secretary, Keith Orr; treasurer, Roger Hewitt.

Annual Meeting: Committee Mergers

At last year’s annual meeting, the DDA merged its capital improvements and operations committee into a single “bricks and money” committee. At that time, the DDA also had two other committees: the partnerships committee and the transportation committee. The partnerships committee handles issues related to the collaboration of the DDA with other entities like the city council, which appoints two of its members to the DDA’s partnerships committee. Currently those council members are Tony Derezinski (Ward 2) and Margie Teall (Ward 4).

The transportation committee, formed two years ago, is a relatively new committee. At last year’s annual meeting, the board decided to add a new committee – the economic development and communications committee.

At Wednesday’s annual meeting, John Splitt led off discussion of the constitution of committees by suggesting that transportation be merged with the bricks and money committee. He reasoned that transportation would be dealing with issues like go!passes and with transportation demand management, which are both ultimately related to parking issues –the domain of the bricks and money committee. He suggested the merger based on overlapping subject matter.

John Mouat, who chairs the transportation committee, agreed that it was a good suggestion. The general consensus was that a new name for the committee was needed. Russ Collins suggested: “Let’s not find a name now, because that’s how we came up with ‘bricks and money.’” Keith Orr offered that the first task of the newly constituted committee should be to find a new name.

Outcome: The board voted unanimously to merge the transportation committee with the bricks and money committee.

Mayor John Hieftje then suggested combining the partnerships with the economic development and communications committee. Leah Gunn supported that idea. Newcombe Clark cautioned that that intent of having a communications committee was to recognize that communications is not getting done effectively. It had been as a deficiency, he said, so he didn’t want to fold the subject matter back into another committee, just because it was a new committee.

It was briefly discussed that the motion to merge the committees formally needed a second before Clark could weigh in. With the motion officially seconded, Russ Collins quipped that, even though Clark’s comments were “totally rogue,” having been made before the motion received a second, he agreed with Clark.

Splitt agreed with the point made by Clark and Collins, but noted that participation was a bit lacking. Hieftje stressed that the intention was not that the issues would fall away. The question was whether communications needed a free-standing committee. Joan Lowenstein allowed that there has been sparse attendance at the committee’s meetings and it would be nice to bring everyone together.

Mouat asked for executive director Susan Pollay’s thoughts. Pollay agreed with everything the board was saying. She noted that the board members are volunteers. Having more people attend committee meetings is better, she said, but they can’t drop communications as a topic of concern, even if it’s not a separate committee. Keith Orr indicated he would like to leave it as is for the time being to see if reducing the number of committees from four to three will help improve attendance.

Outcome: The board voted to merge the partnerships committee with the economic development and communications committee, with dissent from Clark, Collins and Orr.

Annual Meeting: Tokens of Appreciation

Susan Pollay, executive director of the DDA, presented outgoing board chair Joan Lowenstein with a token of appreciation.

Joan Lowenstein, outgoing chair of the DDA board, admires the token of appreciation she received from the DDA staff: a necklace featuring a construction pit piece of gravel.

Last year, outgoing chair John Splitt had been presented with a plaque that was fashioned from a piece of the earth retention system lagging. This year Lowenstein’s gift also consisted of artifacts from the construction site of the Fifth Avenue underground parking garage: a plastic bag of gravel. The serious part of the gift was a custom piece of jewelry crafted by Schlanderer & Sons and featuring a piece of construction site gravel in a sterling silver setting.

[According the staff of Schlanderer & Sons, it was one of the more unusual requests they've ever received, and they completed the piece with a budget of less than $200.]

Present: Gary Boren, Newcombe Clark, Bob Guenzel, Roger Hewitt, John Hieftje, John Splitt, Leah Gunn, Russ Collins, Keith Orr, Joan Lowenstein, John Mouat.

Absent: Sandi Smith.

Next board meeting: Noon on Wednesday, Sept. 7, 2011, at the DDA offices, 150 S. Fifth Ave., Suite 301. [confirm date]

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