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Ann Arbor Downtown Development Authority board meeting (April 6, 2011): Since June 2010, the city of Ann Arbor and the Ann Arbor DDA have been negotiating a new contract under which the DDA would continue to operate the city’s public parking system.

While the city and the DDA have achieved much agreement on the non-monetary details of the arrangement, Wednesday’s board meeting left the financial piece still unclear.

The board discussion included a focus on the contrast between the combined fund reserve of the DDA – which includes those funds it collects as a tax-increment finance authority – and the reserves of just the public parking fund. Sandi Smith, who’s a DDA board member and an Ann Arbor city councilmember, stressed throughout the conversation that it’s not just the overall fund balance, but the public parking fund balance itself that needs to be monitored.

Last week, the board had come to a consensus that the public parking system could absorb a payment to the city equal to 16% of gross parking revenues in every year of a 10-year contract, which represented a revision upward from its previous position of 14% in the first two years, followed by 15% in subsequent years.

After lengthy back-and-forth, the only consensus reached by DDA board members was that they were not prepared to revise their position upward (again) to meet the city’s request that the city be paid 16% of the public parking gross revenues in the first two years of the contract, but 17.5% in remaining years. Mayor John Hieftje, who serves on the DDA board, was the lone voice of support for that position.

The mayor also found himself somewhat isolated on another issue in front of the board at its Wednesday meeting – the only action item on the agenda. The board voted to sign a new, more favorable lease agreement for its roughly 3,000 feet of office space at 150 S. Fifth Ave. for a term of five years.

Although the mayor voted with the rest of the board in authorizing the lease agreement, he had announced at the city council’s Monday, April 4 meeting that he would be asking his fellow DDA members to consider moving into space that’s currently being renovated in the city hall building. Two days later, at Wednesday’s DDA board meeting, the mayor appeared to understand that there was little enthusiasm on the board for the move, based partly on the fact that it would cost the DDA more in the short term.

At the meeting, the board also heard its usual range of reports and communications, including an update from DTE on the addition of a new substation near the Broadway bridge, to meet increased demand for electricity. [Full Story]