The mid-January and early February rate changes are estimated to generate a total of $133,000 in additional revenue annually. Increases and anticipated revenues are: raise meter bag rates by $5/day ($68,800); increase the premium parking rate by $5/month ($3,300); increase Ann & Ashley and Liberty Square structure evening/Saturday rates by $1/entry ($41,500); increase 415 W. Washington lot entry by $1 and increase permit rates by $5/month ($14,400); increase First & William lot permits by $10/month ($5,000). The change of the effective start date for the early-year rate changes (to Jan. 21 instead of Feb. 1) will apply only to the meter bag rates. The other set of early-year changes will be implemented starting Feb. 1.

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

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

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

[.jpg of Ann Arbor public parking system revenues since Aug 2009][.jpg of Ann Arbor public parking system hourly patrons since August 2009]

This brief was filed from DDA offices at 150 S. Fifth Ave. A more detailed report of the board meeting will follow: [link]

Occupy UM protesters walking toward the Fleming administration building prior to the Dec. 15 regents meeting, where they protested against the high cost of public education. Flyers taped to The Cube repeated the same theme. (Photos by the writer.)

As UM president Mary Sue Coleman began her opening remarks to start Thursday’s meeting, about two dozen “Occupy UM” protesters, who’d been sitting in the boardroom, stood up and shouted, “Mic check!” For the next five minutes, in a call-and-response delivery, protesters outlined their grievances against the university’s leadership – primarily, that once-affordable public education has been turned into an expensive commodity. [A video of the protest is posted on YouTube.]

When the group finished, they left the boardroom chanting “Instruction, not construction!” Neither the regents nor Coleman responded to them or alluded to the protest during the rest of the meeting.

Another group of students gave a decidedly different performance just minutes later. The a cappella group Amazin’ Blue sang five holiday songs, prompting board chair Denise Ilitch to don a blue Santa’s hat – embroidered with “Michigan” – and sing along.

The meeting included two issues related to the Ann Arbor community and parking. During public commentary, Chip Smith of the Near Westside Neighborhood Association highlighted problems with a UM parking lot that’s surrounded by homes on the Old West Side. And in a staff memo accompanying a resolution to issue bonds for capital projects, Fuller Road Station was on the list in the category of projects that would require final approval by regents prior to being funded with bond proceeds. The regents had approved the controversial project – a joint UM/city of Ann Arbor parking structure, bus depot and possible train station – in January 2010, but a formal agreement between the city and university has not yet been finalized.

Other items on the Dec. 15 agenda included: (1) presentations by three UM faculty who were named MacArthur Fellows this year; (2) approval of the Michigan Investment in New Technology Startups (MINTS) initiative; and (3) approval of several renovation projects, including work on the Law School’s historic Charles T. Munger Residences in the Lawyers’ Club and the John P. Cook Building.

Occupy UM “Mic Check”

Occupy UM is one of several local groups formed since the Occupy Wall Street movement started earlier this year. [Other groups include Occupy Ann Arbor and Occupy For All – described on its website as a "merry band of roving peaceniks based in Ann Arbor."]

This Occupy UM protester read a statement to the regents that was repeated in unison by other protesters in the boardroom.

Before the regents meeting, Occupy UM held a rally at The Cube, located in the plaza next to the Fleming administration building, where the regents meet. After the rally, Occupy UM supporters entered Fleming and took seats throughout the boardroom before the start of the meeting.

The agenda begins with remarks from UM president Mary Sue Coleman, and as soon as she began speaking the protesters stood and shouted “Mic check!” – which launched the start of a technique used by Occupy protesters nationwide to propagate a message to a crowd without the aid of a microphone.

The five-minute call-and-response recitation – shouted by a leader in short phrases, and repeated in unison by the other two dozen or so protesters – sharply criticized the regents and university leaders for a range of actions and inactions that have resulted in a cost of education that’s inaccessible for many. They referred to the meeting’s agenda, saying it reflected the values of funding start-up businesses and construction projects rather than accessible education.

An excerpt:

There was once affordable public education. / Today / there is only an expensive commodity. / You sell this commodity to wealthy students. / To the rest of us you offer / a more ominous exchange: / an education / for a lifetime of student debt.

…

You endeavor to attract the richest and whitest / not the best and brightest. / You support construction not instruction. / We have another vision. / Job security and intellectual freedom / for faculty and staff; / a student body without student debt; / and a community that shatters race and class divisions / instead of reproducing them./

This university claims to be / an institution of inclusion and equality. / Our vision works for the future / when this may be true. / Your vision ensures / a public forever divided. / We reject your vision! [.pdf of full Occupy UM statement]

When they finished, the protesters continued chanting “Instruction, not construction!” as they left the room. Their chants could be heard as Coleman resumed her opening remarks, which highlighted the Dec. 18 winter commencement on Sunday, where New York Times executive editor Jill Abramson would give the keynote speech. Coleman also noted several faculty achievements, and gave well wishes for students during finals and for the UM football team at the Sugar Bowl. The meeting continued without any mention of the protesters by regents or UM executives.

However, the following day – Friday, Dec. 16 – a letter from Coleman to President Barack Obama was released, addressing the same issue of affordable education. The letter was tied to Obama’s recent meeting with university presidents at the White House, which Coleman did not attend. From the letter:

By bringing together higher education leaders to discuss college affordability, you have elevated a thorny issue that demands a national conversation because of its impact on all sectors of society. The cost of attending college is one of the most serious matters facing a country that seeks to strengthen its global competitiveness. How we resolve this dilemma requires collaboration, sacrifice and hard choices.

…

Higher education is a public good currently lacking public support. There is no stronger trigger for rising costs at public universities and colleges than declining state support. The University of Michigan and our state’s 14 other public institutions have been ground zero for funding cuts. The state’s significant disinvestment in higher education has been challenging: a 15 percent cut in the last year alone, and a reduction of more than 30 percent over the last decade.

We have worked extremely hard to mitigate the impact of these cuts on students and families. We must and will do more, but also offer recommendations that may benefit all of higher education.

Recommendations in the letter included: urging states to reinvest in public colleges and universities, asking the business community to lobby for increased government funding of higher education, increasing private support, and cutting costs.

Student, Faculty Awards

Provost Phil Hanlon gave a presentation about the various awards and other honors that UM’s faculty have received, as well as introducing and congratulating Alex Carney, a UM senior who recently was named a Marshall Scholar – one of only 36 students in the U.S. awarded the scholarship to study in Oxford and Cambridge. Carney – a mathematician, violinist and cross-country runner – received a round of applause.

Tiya Miles, chair of UM's department of Afroamerican and African studies and a 2011 MacArthur Fellow.

After cataloguing the range of honors for UM faculty – including Guggenheim Fellowships, the Carnegie Foundation’s U.S. professors of the year, and election to the American Academy of Arts and Sciences, among others – Hanlon introduced three faculty members who had been named MacArthur Fellows this year: Tiya Miles, Melanie Sanford, and Yukiko Yamashita.

Each of the three professors spoke to the regents, describing their work and the support they’ve received at UM. Miles, chair of UM’s department of Afroamerican and African studies, talked about the interdisciplinary nature of her research, working in the program in American culture, the department of Afroamerican and African studies, the department of history, and the Native American studies program. She recalled a challenge several years ago when she was pregnant with twins and needed to take medical leave. A book she’d been working on wasn’t completed, and she said she could imagine a scenario in which she’d be left to fail. But she had wonderful department chairs, Miles said, and senior women faculty who reached out to her. Thanks to that support, her book was eventually published and received awards, and her daughters are now eight years old.

Sanford, an Arthur F. Thurnau professor of chemistry, described her work as developing new ways to make common chemicals in a more environmentally friendly fashion, with less waste. The research has potential to impact a range of industries, from pharmaceuticals to beauty products. She said she couldn’t do the work without the amazing undergraduate and graduate students that UM attracts. “That is really the strength of this university,” Sanford said. She also praised UM’s efforts to recruit and retain women in traditionally underrepresented fields, like chemistry. There’s tremendous diversity in the chemistry department, she said, making it a dynamic and exciting place to work, with fantastic research being conducted.

After Sanford’s remarks, regent Andy Richner asked how to make a plastic cup out of corn. “That’s easy,” Sanford quipped, and quickly described how to do it. She said her lab is working on ways to do this kind of thing more efficiently, with less energy.

Yamashita spoke next, saying that she’s a stem cell biologist but “that’s not as controversial as it sounds.” That is, her work uses adult – not embryonic – stem cells. The research is very, very basic, Yamashita said, using fruit flies. But it lays the foundation to find cures for degenerative diseases, for example, or cancer. She described basic research as like a baby: You don’t get rid of a baby because it can’t yet walk or talk. The university is very supportive of her work, Yamashita said. There are great mentors, she said, who know just the right amount of leash to use on junior faculty – not too much, nor too little.

Start-Up Tech Investment

A new initiative – the Michigan Investment in New Technology Startups (MINTS) was on the agenda for approval by regents at the Dec. 15 meeting. Plans for the initiative had been announced in early October by UM president Mary Sue Coleman in her annual address to campus.

Managed by UM’s investment office as well as the technology transfer office, the program involves investing in start-up companies formed using UM technology. It’s estimated that over 10 years, the program will invest about $25 million from the university’s long-term portfolio. According to a staff memo, the investments would be part of the portfolio’s venture capital sub-portfolio. A limit of up to $500,000 would be made in any single round of financing.

In addition to approval for the overall program, regents also were asked to approve guidelines for MINTS. [.pdf of MINTS guidelines]

Tim Slottow, UM’s chief financial officer, praised Erik Lundberg, the university’s chief investment officer, and Ken Nisbet, executive director of UM’s tech transfer office, for their work in putting together this program. Slottow described it as a breakthrough type of funding that doesn’t exist at any other university. With regental approval, the university will begin investing “as soon as we can,” Slottow said.

Outcome: Regents unanimously approved the MINTS initiative and guidelines.

Building & Renovation Projects

Regents were asked to approve several items related to building and renovation projects on the Ann Arbor campus, including renovations of the law school residences, an overhaul of the University Hospital’s Trauma Burn Unit, and issuance of bids for an addition to the G.G. Brown building on north campus.

Building & Renovation Projects: Law School Residences

Regents were asked to approve the schematic design for a renovation of the Law School’s historic Charles T. Munger Residences in the Lawyers’ Club and the John P. Cook Building. The residences house about 260 students and were built in the early 1920s.

Lee Becker of Hartman-Cox Architects describes the schematic design for the UM Law School residences.

Regents had previously authorized the overall project at their March 2011 meeting. That meeting had included  a unanimous vote to name The Lawyers Club dormitory in honor of Charles T. Munger, who gave the university $20 million toward renovations of the building. The March 2011 meeting also included a vote to approve a $39 million renovation of The Lawyers Club and the John P. Cook buildings – part of a larger expansion and renovation effort at UM’s law school.

Washington, D.C.-based Hartman-Cox Architects, working with SmithGroup, is handling the project’s design. Lee Becker of Hartman-Cox attended the Dec. 15 meeting and showed regents examples of the renovation work they’ve planned. Most of the work will be interior changes to the residences – such as opening up connections between the townhouse-style dorms so that hallways will run through all the units. One of the main goals is to build better community among the law school students, he said.

Becker noted that the renovations will allow the university to skip roughly $30 million in maintenance it would otherwise need to perform in the dorms. Other work will include removing the fireplaces, adding air conditioning, installing elevators, replacing the roof, restoring masonry and refurbishing leaded glass windows.

Tim Slottow, UM’s chief financial officer, mentioned that the renovations would bring the buildings up to the same energy efficiency standards as other UM facilities. Examples of specific changes addressing energy efficiency include low-flow fixtures to conserve water, insulation, energy-efficient light fixtures and thermostat setback controls in each room.

Regent Libby Maynard asked where the students will live during the renovations, which will take about 18 months and be finished in mid-2013. Hank Baier, UM’s associate vice president for facilities and operations, reported that the university is leasing space in several apartment complexes that are close to central campus.

Regent Andy Richner noted that he had lived there when he went to law school, and he supported the project. Mary Sue Coleman said she couldn’t be more pleased with the new design, calling it one of the most precious buildings in the country.

 Outcome: Regents voted to approved the renovations at the Law School dorms.

Building & Renovation Projects: Trauma Burn Unit

A $3.33 million renovation for the University Hospital’s Trauma Burn Unit was on the agenda for approval. Renovations of the roughly 6,600-square-foot facility include improved lighting for care within the patient rooms, improved treatment rooms, creation of a dedicated physical therapy and occupational therapy room, and creation of a faculty on-call room.

Project and Design Management LLC, an architectural firm based in Ferndale, will design the project. According to a staff memo, a phased construction schedule is planned to minimize disruption to operations and patient care, with construction to be completed in the fall of 2012.

Outcome: Regents approved the trauma burn unit renovations.

Building & Renovation Projects: G.G. Brown

On the agenda was an item that would authorize university staff to issue bids and award construction contracts for a $46 million addition to the  G.G. Brown Memorial Laboratories Mechanical Engineering building on UM’s north campus.

A schematic design for the 62,500-square-foot addition was approved by regents a year ago, at the board’s Dec. 17, 2010 meeting. Construction is expected to be complete by mid-2014. The addition will house research labs, and faculty and graduate student offices for emerging research areas, including bio-systems, energy systems, and nano-systems.

Outcome: The board voted to authorize the issuance of bids and the awarding of construction contracts for the G.G. Brown addition.

In addition, as an item of information, regents were presented with UM’s annual capital outlay request to the state for fiscal 2013. For the Ann Arbor campus, that request included funding for renovations of the existing G.G. Brown building – a separate project from the planned addition. At previous meetings, Tim Slottow – UM’s chief financial officer – has said that UM expects to receive $30 million in funding for the renovation as part of the state capital outlay bill. At the Dec. 15 meeting, he didn’t specify any anticipated dollar amount, but said he hopes the state will help with this project and two others at UM’s Flint and Dearborn campuses.

Long-Term Bonds

Regents were asked to authorize the issuance of up to $280 million in general revenue bonds to fund a variety of capital projects. Tim Slottow, UM’s chief financial officer, briefly introduced the item, saying that UM needs to refinance some of its existing $200 million in commercial paper and provide longer-term financing for authorized capital projects.

A staff memo included a list of projects that require financing:

• Alice Crocker Lloyd Hall renovation
• Crisler Arena expansion and renovation
• C.S. Mott Children’s and Von Voigtlander Women’s Hospitals, and related projects
• Institute for Social Research addition
• Vera B. Baits Houses II renewal
• Seven projects for the UM Hospitals and Health Centers: (1) Simpson Circle parking structure improvements; (2) University Hospital accelerator replacement; (3) University Hospital computed tomography angiography; (4) University Hospital kitchen renovations for room service protocol; (5) University Hospital medical procedure unit expansion; (6) University Hospital radiation oncology simulator replacement; and (7) University Hospital Trauma Burn Unit renovations.

In a separate category, three projects were listed as requiring final approval by regents prior to being funded with bond proceeds:

• Fuller Road Station
• UM  Hospitals and Health Centers – A. Alfred Taubman Health Care Center internal medicine renovations
• UM Hospitals and Health Centers – A. Alfred Taubman Health Care Center Levels 1 and 2 backfill renovations

Regents had approved the Fuller Road Station project at their January 2010 meeting, when they had also authorized appointing an architect. From the staff memo provided to the regents at that 2010 meeting:

The first phase of the development of this major intermodal transportation complex is the Fuller Road Station project which includes site preparation and construction of an intermodal facility that includes: four covered bus loading/unloading zones and waiting areas; a covered area for bike hoops and lockers; parking for 1,000 vehicles (78 percent for university and 22 percent for city use); improvements to Fuller Road immediately adjacent to the site for vehicle access; and upgrades to the multi-use path along Fuller Road.

The university will manage the construction of the Fuller Road Station project. That includes building the facility on city property, following city code review and inspection, and collaborating with the city for their approval of design. This project is unique since we would be constructing the facility on city-owned property and following city building codes. We will also need approval for the lease on city-owned land since it would be for a period of greater than ten years. We will seek approval of the lease at a later date, but prior to seeking bids or awarding construction contracts for the project. A parking structure operation and maintenance agreement will be developed concurrently with design of the project. The City of Ann Arbor will manage the site preparation at an estimated cost of $3,000,000. In addition, at the City’s expense, they will undertake an environmental assessment of the property. Although there will be a temporary loss of some leased parking spaces during construction, there will be an increase of approximately 780 university parking spaces as a result of this project.

The estimated cost of the project is $46,550,000. Costs will be shared between the University of Michigan and the City of Ann Arbor in proportion to the number of parking spaces available to each (78 percent and 22 percent respectively). Total university funding, not to exceed $36,309,000 (78 percent), will be provided from Parking resources. The construction cash flow may be provided, all or in part, by increasing the commercial paper issuance under the commercial paper program, secured by a pledge of General Revenues, and authorized by the Board of Regents. The parking structure consulting firm of Walker Parking Consultants will design the project. Design is scheduled to begin immediately, and we will return with a construction schedule when we seek approval of schematic design.

At that January 2010 meeting, James D’Amour – a member of the executive committee for the Huron Valley Group of the Sierra Club – spoke out against the project, objecting to it being built on city-owned property that had been designated as parkland. He and other community members have been vocal in their objections to the structure, primarily at public meetings of the Ann Arbor city council and the Ann Arbor park advisory commission – most recently at PAC’s November 2011 meeting. [See Chronicle coverage: "More Concerns Aired on Fuller Road Station"] Regents have not discussed the project at their board meetings since the January 2010 vote.

Outcome: Without discussion, regents authorized the issuance of general revenue bonds. 

Annual Lease Report

As an item of information, regents were provided with an annual report on leases held by the university that exceed 50,000 square feet. Tim Slottow, UM’s chief financial officer, noted that there was very little change from the 2010 report, made at the regents’ Dec. 17, 2010 meeting.

There are currently five leases for space over 50,000 square feet:

• 222,775 square feet at the Domino’s Farms complex, used by various UM Health System departments.
• 125,815 square feet at the KMS Building on South State Street, used by UMHS and leased from Kosmos Associates.
• 65,693 square feet at 325 East Eisenhower Parkway leased from Burlington Property LLC for use by Physical Medicine and Rehabilitation, Spine Rehabilitation and the Dental School.
• 63,920 square feet at 2301 Commonwealth Boulevard, for use by UMHS and leased from First Properties Associates.
• 51,534 square feet at 1051 North Canton Center Road in Canton, leased from Saltz Center for the UMHS Canton Health Center.

Appointment of UMHS Development Officer

As a supplemental agenda item, regents were asked to approve the appointment of Brian Lally to a newly created position: associate vice president for medical development and alumni relations for the UM Health System. Jerry May, UM’s vice president for development, told the regents that the university had been doing a search to fill this new position for more than a year, with the goal of dramatically increasing fundraising for UMHS. Lally will report jointly to May and Ora Pescovitz, UM’s executive vice president for medical affairs.

Lally most recently has served as vice president of development and alumni relations for Dartmouth-Hitchcock Medical Center and Dartmouth Medical School.

Outcome: Regents unanimously approved Lally’s appointment.

Conflict-of-Interest Items

At each monthly meeting, regents are asked to authorize items that require disclosure under the state’s Conflict of Interest statute. The law requires that regents vote on potential conflict-of-interest disclosures related to university staff, faculty or students.

The items often involve technology licensing agreements or leases. This month, the eight separate items included four research agreements, one subcontract agreement, one licensing agreement, one licensing option agreement, and one business transaction. Companies involved are: ONL Therapeutics; Emerging Micro Systems Inc.; CytoPherx Inc.; CSquared Innovations; Arbor Ultrasound Technologies; ISSYS Inc.; and Red Poppy Floral Design.

Outcome: Without comment, regents unanimously authorized the conflict-of-interest disclosures.

Student Government Report

In his regular report to the board, DeAndree Watson – president of the Michigan Student Assembly – explained the reasoning behind the organization’s upcoming name change. As of Jan. 1, the MSA will be called the Central Student Government. In 2010, students had voted to change the constitution of their student government, creating three separate branches that mirrored the federal system: executive, legislative and judicial. The legislative branch is known as the Assembly, and the overall government name was changed to distinguish itself from that branch. The name will also serve to distinguish the central student government, which represents students campuswide, with the various student governments for each school or college within UM.

Regent Andrea Fischer Newman asked Watson if he’d considered possible confusion with Central Michigan University. Watson replied that he had been part of the group that had rewritten the constitution, and that had settled on the new name. The word “Central” had been meant to signify a “central voice” for all students, he said. The only concern they’d heard about it was from one student who felt it might disenfranchise students on UM’s north campus. The official name will be the University of Michigan Central Student Government, he said.

Misc. Communications

Stephen Forrest, UM’s vice president for research, told regents that the university’s formal policies and procedures had been completed for the return of Native American human remains and associated materials in UM’s collections under the Native American Graves Protection and Repatriation Act (NAGPRA). Responding to a follow-up query from The Chronicle, David Lampe – executive director of research communications – reported that the 75-page document formally specifies details of all of the policies and procedures that UM has adopted to handle the requirements of the act. It has been submitted to UM’s Office of the General Counsel for final approval – it will eventually be posted online.

Public Commentary

During public commentary at the end of the meeting, Chip Smith introduced himself as a UM alum and donor, and a representative of the Near Westside Neighborhood Association. The association consists of 24 historic homes – all built in 1930 or earlier – that border a UM parking lot off of Krause Street, known as Lot W11, between West Washington and West Liberty. [.jpg of map showing location of the NWNA and the lot] The neighborhood group was recently formed in response to construction at the lot, which has caused issues related to noise, lighting and stormwater runoff, among other things.

Chip Smith spoke to regents about problems in a UM parking lot off of Krause Street affecting neighboring homes. He represents the recently formed Near Westside Neighborhood Association.

Smith thanked Jim Kosteva – UM’s community  relations director – for his help, and provided a handout to regents that included a Nov. 23 letter that the association had sent Kosteva about Lot W11 issues.

A packet of materials distributed to regents by Smith listed several issues related to the parking lot, including the impact of construction activities, traffic, vandalism, and a lack of communication with neighbors. One of the handouts stated that “UM Lot W11 has been a bad neighbor for 20+ years.”

During his remarks, Smith focused on two main concerns: (1) implementing best management practices for stormwater control, and (2) lighting at the lot, which is outdated and intrusive for surrounding homes.

He praised UM’s sustainability initiative, and asked regents and the administration to hold the project group’s feet to the fire in terms of implementing stormwater best management practices that the university has adopted. [Among the sustainability goals outlined by Coleman in September was this one related to stormwater: "Protect the Huron River through best-in-class stormwater control strategies and by applying 40 percent fewer chemicals to campus landscapes, and ensure that at least 30 percent of stormwater runoff does not flow into the Huron River."]

Referring to construction on the lot that’s planned in 2012, Smith said the main issue is lighting. It’s unclear whether the current lights – which Smith said are extremely bright – will be replaced, but he asked that UM staff work with representatives of the neighborhood to find an acceptable solution.

In addition to these specific issues, the problem is the way in which the residents are treated, Smith said. Of the 24 houses surrounding the lot, 21 are owner-occupied. “This is our neighborhood,” he said, adding that he looked forward to working with UM to minimize the impact of future construction. He thanked regents for the opportunity to address the board.

After Smith’s remarks, regent Larry Deitch called the presentation “refreshing” – presumably because the tone had not been combative, as is often the case with remarks made during public commentary. Regent Andrea Fischer Newman said it would be helpful if Smith could bring a map. [A map of the lot, as well as photos of that location and other UM parking lots, were part of a packet of materials distributed to regents at the start of Smith's remarks.]

Present: Mary Sue Coleman (ex officio), Julia Darlow, Larry Deitch, Denise Ilitch, Olivia (Libby) Maynard, Andrea Fischer Newman, Andy Richner, Kathy White.

Absent: Martin Taylor.

Next board meeting: Thursday, Jan. 19, 2012 at 3 p.m. at the Fleming administration building on UM’s central campus. [confirm date]

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A Santa sock worn by regent Libby Maynard at the final board meeting of 2011 was a subtle reflection of the holiday season.

Students from the Amazin' Blue a cappella group sang Christmas carols at the Dec. 15 regents meeting.

Board chair Denise Ilitch wore a UM Santa's hat during the performance by Amazin' Blue. The front of the hat was embroidered with "Michigan."

The proposal calls for building a new 25-space parking lot in front of the retail building at the southwest corner of the site at 2601 Plymouth Road. Other changes include removing 14,021 square feet of parking and driveway at the northwest corner of the site, near Huron Parkway, and restoring lawn area there, and adding covered bicycle parking throughout the center. The proposal includes a request for a landscape ordinance modification to retain crushed brick mulch in landscape islands on the 16.98-acre site.

This brief was filed from the planning commission’s Dec. 6, 2011 meeting in the second-floor council chambers at city hall, 301 E. Huron.

The changes include increasing the height of the structure from 94 to 104 feet, adding an entrance on First Street, modifying the window type and size on the residential portion of the building, and adding ventilation screens on the east side (alley) of the building.

The City Apartments project was given PUD zoning and site plan approval by the council on Nov. 6, 2008. The nine-story building will include 156 dwelling units and 244 parking spaces on the first two floors. The site is currently a city-owned property functioning as a surface parking lot with 64 spaces, after the parking structure there had to be demolished due to its poor structural condition. The new parking deck, which will offer spaces to the general public as well as to residents, is being financed by the Ann Arbor Downtown Development Authority.

The sale of the property, for a little over $3 million, is part of the city of Ann Arbor’s financing plan for construction of the new municipal center, which houses the police department and the 15th District Court. The council has extended the purchase option on the First and Washington property several times, most recently on Aug. 4, 2011.

At one of the DDA board’s late August committee meetings, news of a pending deal and imminent construction was relayed to committee members. The council is expected to authorize the closing on the deal at its Nov. 10, 2011 meeting. Signs at the First and Washington parking lot warn patrons of the lot’s imminent closure.

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

Bob Guenzel chaired his first meeting of the Ann Arbor Downtown Development Authority board on Wednesday. (Photos by the writer.)

Those included the monthly parking report, which showed use of the city’s public parking trending upward compared to last year, as well as an annual report on the structure-by-structure breakdown of the parking system.

The reports presented to the DDA board at their meeting – together with a recent report delivered to the city’s environmental commission about parking trends dating back to the mid-2000s – provide reason for some cautious optimism. The number of people getting access to downtown Ann Arbor by driving there and parking suggests an overall slight upward trend, despite a reduced number of number of hourly patrons earlier this year.

Also related to parking, the board received a presentation on a communications plan that the DDA is developing, targeted at downtown evening employees. That communications plan is meant to make sure those employees are aware of low cost alternatives to using on-street parking spaces. The communications strategy would be part of a possible plan to extend enforcement hours for on-street parking meetings past 6 p.m. The DDA will present its tentative proposal for revisions to parking policies to the city council at a joint working session of the board and the council to be held on Nov. 14.

In response to some of the individual success stories that were presented in connection with parking alternatives, DDA board member Russ Collins said, “I wonder how this positive message will play in the media.”

Collins’ remark could have applied to much of the rest of the meeting as well. The board took the report on the basic current financial health of the parking system as an occasion to talk about the overall economic strength of the downtown. Despite the recent closing of some smaller stores, board members gave reports of strong performances by other businesses.

That positive report contrasted with public commentary about ongoing problems with aggressive panhandling and drug dealing and other fringe behavior exhibited downtown. Mayor John Hieftje, who sits on the DDA board, described how some response is being developed by the Ann Arbor police department.

The construction updates on the Fifth and Division streetscape improvement project and the underground parking garage on Fifth Avenue converged on the Ann Arbor District Library. The projects will result in modifying the downtown library building’s front porch, to facilitate access from the new east-west mid-block street – Library Lane – into the library.

As the underground parking garage nears expected completion in the spring of 2012, brief discussion unfolded among DDA board members on the near-term use of the top of that garage. Also related to potential development in the “midtown area” was a report from the partnerships committee. A steering committee comprising DDA board members and community members will be leading the effort to explore alternative uses of specific city-owned parcels downtown, including the top of the underground parking structure (aka the Library Lot).

It was the first board meeting chaired by Bob Guenzel, who was elected to that position at the DDA’s last meeting, which he was unable to attend.

Parking

Roger Hewitt gave the regular report on the parking system. [.pdf of monthly parking report and annual structure-by-structure analysis] He highlighted the annual profit-and-loss statements for each structure for the past year.

Hewitt noted that those parking structures that have paid off their debt service are profitable, and those that still have outstanding debt are less profitable. For example, he said, Liberty Square has no debt service as well as less labor expense, because it’s unattended. Liberty Square has an annual net income of $1,852/space.

From the report, the structures with bond payments still associated with them have the lowest net annual income: Fourth & Washington (-$610/space), Fourth & William ($53/space) and Maynard ($517/space). Last year, the public parking system as a whole showed a net annual income of $3,452,389, which worked out to $508/per space.

Hewitt note that the new underground parking structure is planned to be unattended – but that doesn’t mean there will be no staff on site. There’ll be maintenance people on site, for example, he said. For a parking structure to be “unattended” means that there won’t be cashiers, he explained.

Hewitt said the DDA is also looking at converting other specific parking structures to operation without cashiers. The DDA is looking at various ways to decrease operating expenses. Hewitt noted that on-street meters are profitable because there is no labor attached to them. Overall, Hewitt said, the revenue is quite good.

Although revenues in the public parking system have continued to show increases since the national economic downturn in 2008, Hewitt has often noted on the occasion of his regular updates to the board over the last couple of years, and in a presentation to the city council, that the increase in revenue is either steady or only sightly more than what would be expected, given the rate increases that have been implemented with city council approval over the last three years.

In August 2011, revenues were up by 11.93% and the number of hourly patrons (as contrasted with those who have monthly permits) were up 4.86% as compared to August 2010. That was a bright point for board members at the Oct. 5 meeting.

In August 2010, the basic rates for structures, surface lots and meters were: $0.90, $1.10 and $1.20 respectively. In August 2011, the rates were $1.00, $1.20, and $1.20, respectively. So the August increase of nearly 12% in revenues outpaced the rate increase.

By way of background on the rate increases, the DDA sent the proposed rate increase to the city council in February 2009, which the city council did not choose to veto. That schedule has been implemented starting in September of each year, after the start of the fiscal year, which begins in July.

             STRUC                  LOT
YEAR          HRLY    PERMIT       HRLY      METER
FY 2009      $0.80      $125      $1.00      $1.00
FY 2010      $0.90      $130      $1.10      $1.20
FY 2011      $1.00      $135      $1.20      $1.20
FY 2012      $1.10      $140      $1.30      $1.40

-

To provide additional perspective on demand for access to downtown Ann Arbor, as measured by use of the parking system, a compilation of monthly year-over-year comparisons from last year’s DDA board meeting information packets yields the following charts:

DDA parking revenue. The red revenue line for the most recent year shows an overall pattern of slight increases compared to the blue bars of the previous year. (Image links to higher resolution file. Any errors are the responsibility of The Chronicle.)

DDA hourly parking patrons. The red parking patrons line for the most recent year shows an early pattern of slight decreases with slight increases more recently, compared to the blue bars of the previous year. (Image links to higher resolution file. Any errors are the responsibility of The Chronicle.)

In addition to the last two years’ worth of DDA revenue and hourly patron data, it’s useful to look at a report that city environmental coordinator Matt Naud recently completed and presented to the city’s environmental commission. The report was conducted as a condition of the settlement of an environmental lawsuit filed against the city in connection with the underground parking garage on Fifth Avenue, which is currently under construction. ["City Settles Lawsuit, Must Conduct Study"]

It’s important to note that the report compiled by Naud focuses on “garage parking events,” which are not the same as the statistic the DDA tracks called “hourly patrons.” Naud’s study was confined to parking structures, and counted the entry into a garage by a permit holder as a “parking event.” Use of a surface lot was not counted in Naud’s study as a “parking event.” The focus of that study was on the question of how the construction of additional parking structures impact the number of parking events.

The result of the study on its central question could fairly be described as indeterminate. However, the report shows a steady increase from 2005 to 2009 of parking events in downtown Ann Arbor, despite any number of mitigating factors, such as increased bus ridership:

Parking events in downtown Ann Arbor. (Image links to higher resolution .pdf file)

The demand for access to downtown Ann Arbor as measured by the use of the public parking system is likely to be a point of discussion in connection with two current development projects in and near downtown: The Varsity Ann Arbor and Heritage Row.

Heritage Row is a planned unit development (PUD) located one block south of the underground parking garage on Fifth Avenue and outside the DDA district. In connection with Heritage Row, one possibility the city council may be asked to contemplate – at its Oct. 17 meeting – is approval of that project without any on-site parking requirement.

At the Oct. 5 meeting of the DDA board, Roger Hewitt noted that bond costs for the new underground garage will change the revenue and expenditure picture. The underground parking garage on Fifth Avenue between Liberty and William is one of two major construction projects currently managed by the DDA.

Construction Convergence: Library Lane

John Splitt reported on the two major construction projects currently being managed by the DDA: Fifth and Division streetscape improvements; and the underground parking garage. Light poles have been installed on the 200 block of South Fifth, Splitt said. That finishes everything connected to the streetscape improvements except for the block of Fifth Avenue between William and Liberty. That will need to wait until the underground parking garage is complete, he said.

For the parking garage, the east leg is now waterproofed and back-filled with pea gravel. For that east leg section, form work is starting for the surface concrete pouring. [The deck is being constructed from east to west.] For the middle of the garage, more concrete will be poured next week. Splitt said that for the phase under Fifth Avenue, it was hoped to be done as soon as possible. The DDA is pushing Christman Company, the construction manager for the parking garage, to complete that phase by Dec. 31 to get the street opened back up, but Splitt said it could be into January.

John Mouat said he felt that the new Library Lane (a newly constructed east-west mid-block connector between Division Street and Fifth Avenue) always gets forgotten in all of the discussion about the parking garage. He noted that the DDA is now involved in a discussion with the Ann Arbor District Library about the connection from the library to Library Lane. Russ Collins quipped that it should be called “Parker Place,” alluding to AADL director Josie Parker, who was in the audience.

Josie Parker, director of the Ann Arbor District Library, and DDA board chair Bob Guenzel before the Oct. 5 meeting of the Downtown Development Authority.

Parker was asked to come to the podium to update the board on the Library Lane and library building connection. For the moment, she said, because there’s not a new library being built, they’re simply working on redesigning the existing front of the building – which has its public entrance on Fifth Avenue – to get patrons easily from Library Lane to the existing entrance of the building as it is currently located. Part of the plan includes tearing off some elements at the front of the building and redoing them, Parker said. The idea is to reconfigure some of the existing porch area, she said.

When people talk about the Fifth and Division streetscape improvements and finishing up the 300 block of South Fifth Avenue, the library frontage is included in that, Parker said. [The DDA's streetscape project will be paying for this work.] She expressed that the library appreciated very much the library’s inclusion in the planning. The library was grateful for the attention that’s been given, and the effort to accomodate the libary has been tremendous, she said.

The construction work has had a great impact on library workers and patrons, Parker said, but she added that use of the library has not declined during construction on the underground parking garage. Alluding to the downturn in business suffered by nearby businesses like Earthen Jar and Jerusalem Garden – about which their owners have been vocal – Parker allowed that other neighbors have had a different impact.

John Splitt noted that it might not be possible to finish the sidewalk on both sides of Fifth Avenue before spring, but completion of the east side first – the library side – is the goal.

During the discussion of the underground parking structure, Sandi Smith asked what the plan was currently for the surface of the deck. Would it be surface parking? Splitt clarified that surface parking on top of the underground garage would be located primarily in the center section of the deck [viewed from east to west, not top to bottom] and that section would not be finished until the spring.

The top of the underground parking garage is one of five city-owned parcels that the DDA is currently considering for alternative uses – under the direction of the city council given in April 2011. The others are the former YMCA lot, the Palio lot, the Kline lot, and the bottom floor of the parking structure at Fourth and William.

Future Use of Midtown City-Owned Parcels

Joan Lowenstein reported on the the planning process to frame the redevelopment of five city-owned parcels in the downtown that the DDA will be considering.

The partnerships committee had worked on a goals statement for the midtown planning project, she said. [Midtown is the name of one of downtown's zoning overlay character districts, which includes Fifth Avenue as a civic corridor.] Committee members had discussed the idea of forming a leadership steering committee to shepherd the project. That committee would work directly with DDA staff.

Members of the committee who’d agreed to serve in that capacity include: Brittany Affolter-Caine (Ann Arbor SPARK director of talent enhancement); Ron Dankert (former DDA board member and broker with Swisher Commercial); Bob Galardi (retired Ann Arbor Public Schools administrator); Stas’ Kazmierski (managing parter at ZingTrain); Kirk Westphal (film producer, founder of Westphal Associates and member of the Ann Arbor planning commission); Tony Lupo (formerly director of sales and marketing at Salon Vox, now brand manager at New York-based Oribe Hair Care); Nancy Shore (director of Ann Arbor’s getDowntown program); Hillary Murt (member of Michigan Theater board, and former owner of Pen in Hand); and Bonnie Valentine (director of sales and marketing with the Whole Brain Group).

The first meeting of the steering committee will take place on Tuesday, Oct. 11 at 3 p.m. at the DDA’s offices, 150 S. Fifth Ave. Lowenstein said the meeting will be open to the public. Serving on the committee for the DDA will be Lowenstein, Sandi Smith and John Mouat.

Lowenstein described how the partnerships committee had discussed what the deliverables will be for the planning project, which included a defined role for the area, a framework plan and a set of future goals, and a decision-making matrix, all in one document. The idea is also to look at alternative scenarios for achieving development, Lowenstein said – RFPs (requests for proposals) in addition to other options.

Lowenstein also reported that a communications subcommittee of the partnerships committee had been created, consisting of Russ Collins and Newcombe Clark. The goal of the communications subcommittee is to develop a toolbox of resources to communicate with the public and with each other.

Clark reported out that the communications subcommittee will aim to increase DDA visibility and public awareness of what the DDA does and how it adds value. The approach will be both reactive and proactive, he said. The plan is to involve professionals who know how to do public relations and communications. The initial work plan will be to bring in professionals and see what they think the DDA should do. The subcommittee will report out every month. Once the subcommittee has created a toolbox, staff will use it, he said. Collins said he felt that the subcommittee could make good progress for the benefit of the board and the downtown.

Commenting on the midtown development plan, Sandi Smith allowed that it seemed like it was taking a long time, but she saw no reason to rush. [Previous Chronicle coverage: "Downtown Planning Poised to Pause"]

Downtown Behavioral Issues

During public commentary John Teeter, manager at First Martin Corp., introduced himself by saying that First Martin managed 10 different properties in the DDA district. He wanted to share with the board some of issues the real estate company has been suffering thorough with respect to crime and panhandling. He stressed the importance of separating perceptions from the reality – perception is actually a separate issue from the actual problem, he said. The problem, he said, is not homelessness. It’s things like urinating and defecating in elevators. He said that compared to the past 13 years, the problem is worse now than it’s ever been.

The problem is not the local homeless population, Teeter said. Rather, the problem is aggressive panhandling and drug dealing. He described the Ann Arbor community as having been generous with its resources for this part of the population. But just because the community offers more robust support services, he cautioned, doesn’t mean this behavior should be tolerated downtown. He said that one solution would be to apply pressure with police, but he recognized the challenge of doing that in the current fiscal climate. The police force needed to be given sufficient tools and manpower. He ventured that maybe some stronger ordinance language would help.

Teeter told the board that he was not there just to complain. First Martin is trying to help things, he said. First Martin takes care of picking up trash at Liberty Plaza six days a week. [The park is immediately adjacent to a First Martin property]. He said that First Martin also takes care of some upkeep at Wheeler Park and the corner at Depot and Main. Because much of the problem is drug- and alcohol-related, Teeter said, First Martin will be donating $1,000 to the Dawn Farm outreach program.

Diana Neering, chief development officer at the Shelter Association of Washtenaw County, addressed the board to present the DDA with the annual Robert J. Delonis Community Service award. Neering thanked the DDA for its recent support in the form of a grant. [At the DDA board's Oct. 6, 2010 meeting, a year earlier, a $218,050 grant from the DDA's housing fund was awarded for improvements at the association's Delonis Center on Huron Street. The money was to pay for new washers and dryers, lockers and chairs, an emergency generator, energy conservation measures, medical equipment and software.]

Neering then shared a shelter success story about a man who had come to the Delonis Center shelter and how the shelter staff had helped him.

Also realated to the shelter, in his report out from the Downtown Citizens Advisory Council, Ray Detter began by saying that the construction of the Delonis Center would not have happened without Bob Guenzel (then Washtenaw County administrator and now chair of the DDA board) and the strong support of Leah Gunn (currently a Washtenaw County commissioner and DDA board member).

As newly elected chair, Guenzel was prepared to proceed with the agenda after public commentary. But mayor John Hieftje interjected that he’d previously suggested adding an agenda item to allow board members to respond to public commentary, and he felt that this was very good time to do that. With Guenzel’s indulgence, Hieftje then reviewed a meeting the day before held by the downtown marketing task force, when Teeter had expressed many of the same sentiments he’d expressed during public commentary.

Chief of police Barnett Jones had been there, Hieftje said, as well as representatives of the downtown merchant associations. He had then met later with the chief and deputy chief of police, and he felt that they’d come up with some good ideas. He indicated that some new things will be announced in the next few weeks.

One strategy will be that community standards officers will be issuing tickets in alleys for dumpster violations. They’ve sent out notice to merchants saying that they’ll be looking for violations starting in November. Also being considered is stepped up enforcement of the city’s graffiti ordinance. Hieftje said he figured that businesses will push back, but that the merchant associations have said they’ll support the city’s efforts at enforcement. Hieftje said he wanted to make sure everybody gets adequate warning of the stepped up enforcement.

Hieftje said the perception is worse than the problem itself, but is equally meaningful. He went on to describe Ann Arbor’s issues as relatively minor compared with other cities. Other than the unsolved sexual assaults, it’s been a good year with respect to crime stats, Hieftje contended.

Guenzel asked Hieftje if the downtown marketing task force was again meeting monthly. Hieftje indicated it was and that they had a schedule of nine times a year with no meetings in the months of July, August, and December. He said it was nice to have city council members (Sandi Smith and Sabra Briere) and DDA members present for the most recent meeting.

Business Climate Downtown

Russ Collins offered a comment on the relative downtown vitality in Liberty-State area. [Collins is executive director of the Michigan Theater, located near the intersection of Liberty and State.] In August, Collins noted, systemwide parking use was up significantly over a year ago – revenue was up 12% and the number of hourly patrons was up 5%. Collins added that the Michigan Theater had had an unusually strong August. Roger Hewitt, who owns the Red Hawk Bar & Grill and Revive + Replenish downtown, said his two businesses had also had a strong September. He allowed that five University of Michigan home football games can affect things – positively.

Adding to the positive message, Hieftje reported that during the downtown marketing task force meeting the previous day, South State Area Association president Tom Heywood had said that despite the challenges faced by some smaller establishments, business is booming. Hieftje said Heywood had contended at the meeting that the new CVS pharmacy on South State had generated the highest amount of sales per square foot in that chain.

Collins continued with the theme that the right business can succeed in downtown Ann Arbor, by noting that when the John Leidy Shop closed, the Michigan Theater had looked to put a penny candy store in the space – as an extension of something the theater already did, which is to sell concessions. But his organization’s business and market analysis found that such an enterprise was not supportable. He was therefore not surprised when the candy store that set up shop there found it difficult – the Michigan Theater’s business planning would have forecast that outcome, concluded Collins.

Sidewalk, Street Repair Millage

Guenzel asked DDA executive director Susan Pollay if there was an update on the situation with the sidewalk millage. Pollay reviewed how there’d been a general discussion at the operations committee meeting about the two millages on the November ballot: 2 mills for street, and 0.125 mills for sidewalk repair. The DDA’s understanding is that the city will take over repairs previously assigned to property owners, except inside the DDA district, where there will be restrictions. Millage money would be spent on sidewalks inside the DDA district, only if they are adjacent to single-family houses or duplexes. Guenzel confirmed with Pollay that the city’s expectations of the DDA are still being checked out.

Hieftje then commented that he did not feel city councilmembers are out in the community saying that the city absolutely needs the millage or that it’s essential. The sidewalk millage merely offers residents a choice, he contended, of having the city take over the responsibility for sidewalk repair. Everybody who was given notice under the last five-year cycle of the sidewalk repair program will have to pay, Hieftje contended – no one gets a free ride. He reported that the city council’s resolution of intent on the use of the sidewalk and street repair millage funds was still pending before the council.

Public Art, Design

The previous night’s meeting of the Downtown Citizens Advisory Council, said Detter, had begun with the group’s attendance at the dedication of the new fountain designed by German artist Herbert Dreiseitl. Detter described how more than 200 people attended to celebrate the water sculpture, where mayor John Hieftje gave a speech. Former chair of the city’s public art commission, Margaret Parker, as well as the current chair, Marsha Chamberlin, had also made remarks, he said. He said the CAC had for years supported the city’s Percent for Art program.

Detter recounted how in the 1990s, three CAC members had worked with Jan Onder and Parker on the downtown public art committee. With guidance from local architect Dick Mitchell, they had injected art into the Fourth and Washington parking structure, he said. Detter described how one of the meetings took place in Espresso Royale, and how a man who’d overheard their conversation about what they wanted to do had come over to say he wanted to give the group $25,000. Detter identified the man as the owner of the Amadeus building. When former DDA chair Reuben Bergman had passed away, Detter said, another $13,000 had been donated. Within a matter of a few month, Detter said, Onder had raised another $85,000.

After the dedication ceremony for the fountain on the municipal center plaza, Detter said, the CAC discussed The Varsity at Ann Arbor project. [The same evening as the dedication, the city planning commission voted to recommend approval of The Varsity; it will now be forwarded to the city council. Detter spoke during public commentary at that meeting.] Detter noted that it was the first project to be reviewed by the newly-established design guidelines board. The board had identified design elements that were present and lacking in the project. The board did a good job, he said. He noted that the review by the design guidelines board is mandatory, but compliance is voluntary. He said the developer did a good job in making improvements to the design.

Detter concluded by saying that the city’s commitment to good building design and public art will make the pedestrian experience better.

New Chair

Bob Guenzel, former Washtenaw County administrator, opened the meeting by saying, “I went away and got elected chair of this group!” He was absent from the board’s Sept. 7, 2011 meeting. Roger Hewitt responded to Guenzel by saying, “That’s how it works, Bob!”

The board had been without a chair because board member Gary Boren, who had been elected to that post by his board colleagues at their July 6, 2011 meeting, was not nominated by mayor John Hieftje for reappointment to the board after his term expired on July 31. Boren was replaced on the board by local attorney Nader Nassif.

Adopting a more serious tone, Guenzel said it’s a great honor to chair the DDA board and said he felt it would be a good year.

On the Horizon

The board’s Oct. 5 meeting included a presentation from DDA planning and research specialist Amber Miller and getDowntown director Nancy Shore on low cost alternatives for evening employees to use on-street parking spaces. At a Nov. 14 joint working session with the Ann Arbor city council, the DDA board will be presenting a proposal to the council for changes to parking rates and policies, which could include extension of enforcement hours past 6 p.m.

The board also received an update on the status of the getDowntown program and the go!pass, which had been presented to the DDA’s transportation, operations and communications committe the previous week. [See Chronicle coverage: "Also Discussed by DDA: getDowntown, Parking"]

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

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

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The proposal would increase the number of allowable employees from 50 to 59 at the bank’s headquarters and add a new parking lot on the site, with a setback of 24 feet from the eastern property line. A continuous six-foot-high wall is proposed along the eastern and southeastern property lines, to screen the parking lot from 2021 Washtenaw Ave. and 2107-2109 Tuomy. The changes require amending the supplemental regulations of the site’s planned unit development (PUD) zoning district, which was originally approved in 1978.

The planning commission tabled a similar proposal at its Oct. 19, 2010 meeting, asking planning staff to work with bank officials to come up with an alternative proposal for locating new parking. At the time, planning staff had recommended denial of the request, stating that the project impacted natural features and didn’t offer an overall benefit to the city. Although a consensus on changes appeared to have been reached by the Sept. 8 meeting – among planning staff, neighbors and bank officials – the commission was reluctant to make a recommendation, because the final site plan had not yet been submitted.

At Tuesday’s meeting, there was some discussion about requiring a minimum of two “No Parking” signs along the property’s driveway – a request made by owners of an adjacent home, who are concerned about possible parking near the entrance to their driveway. Tony Derezinski initially proposed an amendment to the supplemental regulations, requiring that those signs be added. He later withdrew that amendment, saying that it seemed to be quibbling over a small thing.

This brief was filed from the second-floor city council chambers at city hall, 301 E. Huron, where the planning commission meets. 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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Walt Hansen, co-owner of Biercamp Artisan Sausage and Jerky, retrieves a copy of the agenda before the start of the Sept. 8 planning commission meeting. (Photos by the writer.)

The commission put off a decision on a proposal from University Bank to increase the number of allowable employees from 50 to 59 at its headquarters on Washtenaw Avenue and to add 14 parking spaces to a new lot on the site. The headquarters is located in what’s known as the Hoover Mansion.

In October 2010, the commission had put off a decision on University Bank’s proposal as well, faced with a recommendation against approval from city planning staff and opposition from some neighbors. This time around, a consensus appeared to have been reached – among planning staff, neighbors and bank officials – to accommodate neighbors’ concerns. However, the commission was reluctant to make a recommendation, because the final site plan had not yet been submitted. The consensus had been achieved only a week ago, on Sept. 1. The vote to postpone, likely until the commission’s next meeting on Sept. 20, was unanimous.

The commission did make a recommendation on a proposal from Walt Hansen and Hannah Cheadle – the owners of Biercamp Artisan Sausage and Jerky – to rezone the property at 1643 and 1645 S. State St., south of Stimson and next to the Produce Station. The parcels currently house the couple’s sausage business as well as an auto repair shop and furniture manufacturer. The commission found the proposed rezoning inconsistent with the city’s master plan and recommended against it.

In connection with the property’s annexation into the city from Ann Arbor Township, the Biercamp owners had wanted to rezone the property to C3 (fringe commercial district). That zoning designation would allow their business to sell a wider variety of merchandise, in addition to the sausage and jerky products they make on site. The recommendation against approval will be forwarded to the city council.

Commissioners offered a glimmer of possibility that commercial zoning for the Biercamp parcel could result from a study of the entire State Street corridor and a revision to the city’s master plan.

At the meeting, commissioners also got an update on future planning-connected events, including a Grand Rapids planning conference that commissioners might want to attend, and visitors from Indonesia that the city is hosting through an International City/County Management Association (ICMA) sustainability fellows program.

The commission also received a heads up that on their Sept. 20 agenda would be a proposal for The Varsity at Ann Arbor, a proposed 13-story, 173-unit, 178,380-square-foot apartment building for approximately 418 students. It would include 77 parking spaces, and would replace the two-story office building and parking lot currently on the site.

University Bank Parking Reconfiguration

The commission was asked to consider a University Bank proposal to increase the number of allowable employees from 50 to 59 at its headquarters on Washtenaw Avenue, and to add 14 parking spaces to a new lot on the site. The headquarters is located in what’s known as the Hoover Mansion.

The change requires amending the supplemental regulations of the site’s planned unit development (PUD) zoning district, which was originally approved in 1978.

The commission did not accept a similar proposal at its Oct. 19, 2010 meeting. They instead tabled it and asked planning staff to work with bank officials to come up with an alternative proposal for locating new parking. At the time, planning staff had recommended denial of the request, stating that the project impacted natural features and didn’t offer an overall benefit to the city.

The current request was initially recommended for approval by staff, but that advice was changed to postponement when the final site plan was not submitted in time for the meeting.

The bank has made several changes based on feedback, according to staff. For example, the new parking lot has been shifted an additional seven feet away from the east property line to reduce the disturbance of woodland in that area. The height of a three-foot-tall masonry screening wall around the parking lot will be increased to six feet, to screen the lot from homes to the east. New bicycle parking spaces are proposed for the southeast corner of the bank building, and a new five-foot-wide walkway connecting Washtenaw Avenue to the bank is proposed for the western part of the site.

The University Bank proposal has been discussed for nearly a year since it was last heard by the commission. Although the planning process sometimes moves slowly, city planner Chris Cheng demonstrates in this photo that planners can move quickly when necessary. Cheng is the blur in the left of the frame. Behind Cheng is local attorney Dan Dever. Seated to Cheng's left are planning commissioners Wendy Woods and Diane Giannola.

At the meeting, city planner Chris Cheng gave the staff report on the University Bank request. He reviewed how it was tabled at the Oct. 19, 2010 planning commission meeting. The staff had recommended that the request be denied back then.

Cheng described how the site plan slide he was projecting on the screen was from last year – due to technical difficulties in getting the current revised site plan, it had not been included in the commission’s packet of materials.

Cheng described how a week before, on Sept. 1, city staff had met with a neighbor and the petitioner and reached a consensus on some additional conditions for the request. Among those were shifting the access drive to be nine feet (instead of one foot) off the property line of the neighboring property at 2021 Washtenaw Ave. The access driveway width has been reduced from 22 feet to 20 feet. The height of the screening wall along the driveway and on the eastern edge of the new parking lot was increased from three feet (specified in the city’s ordinance) to six feet.

Cheng described how University Bank had agreed to put up “no parking” signs at the driveway, as also required by the fire department. Cheng also described how a new five-foot walkway from Washtenaw Avenue up to the Hoover Mansion would encourage alternative transportation as a public benefit. The stormwater detention proposed for the site meets the city’s 100-year storm requirements, he said. Cheng stated that he believed all the neighbors’ concerns had been covered. Staff is waiting for the final site plan submittal in order to do calculations on the impact to the woodland area to determine how many trees would be required as mitigation.

Cheng noted that one of the alternatives analyzed previously showed 14 parking spaces along the drive – city planning staff previously felt like that was a possible alternative. However, the need to provide an access easement prohibits parking, and the fire code requires posting signs that a fire lane must be maintained for half the drive. And in talking to neighbors, Cheng said they don’t prefer parking along the drive. He described the neighbors as willing to live with the parking lot as proposed, as long as the proposed additional screening is put in place.

The staff report had originally recommended that the commission vote for approval, Cheng noted, but now they recommended tabling the item, waiting for the final site plan submission.

University Bank Parking/Employee Expansion: Public Participation

Dan Dever, an attorney for one of neighbors of the Hoover Mansion property, told the commission he was strongly in favor of the staff’s recommendation to postpone. Physical signs are needed indicating that no parking will be allowed along the drive, and he would like to see that assurance in writing. Dever allowed that the process had taken a long time, but said it will need to take a little bit longer.

Ken Sprinkles of University Bank offered his thanks to city planner Chris Cheng for his efforts working on the project. He called Cheng’s attention to the fact that the revisions to the supplemental regulations specify 53 spaces for vehicles and 10 Class C bicycle parking spaces. Sprinkles noted that the number of bicycle spaces should be five. Cheng clarified that it’s five hoops, two bikes on each side, for a total of 10 spaces.

Sprinkles noted that the reason the plans were not submitted in time for that evening’s planning commission meeting was that the consensus had been hashed out in a meeting on Thursday just a week before.

Stephen Ranzini, president of University Bank, told the commission that he appreciated the fact that it seemed like a consensus had been reached. The bank’s conversations had included 19 neighbors, he said. The decision had been postponed a year ago because three people came forward late, he said, and prior to that time had made no attempt to communicate with the bank. Ranzini observed that yet again the project would be delayed two weeks.

By way of background, at the Oct. 19, 2010 meeting, when the project had been put off, Ranzini had warned that the bank might need to relocate elsewhere as it expanded and grew, if the proposal it sought did not gain eventual approval. From The Chronicle’s meeting report:

During a public hearing on the project, bank president Stephen Ranzini told commissioners that if the bank can’t get the additional parking, it could trigger a decision to leave that location and expand elsewhere.

At Thursday’s meeting, Ranzini reiterated the same theme, telling commissioners that there are consequences to delays. He said he hoped that the project could start before the construction season ends. He noted that the reason for the requested parking is because the bank is growing, and currently it cannot house all its divisions at the Hoover Mansion site. Because of the delays up to now, University Islamic Financial [a division of University Bank providing financial services to the Muslim community], had to be relocated out of the Hoover Mansion to Farmington Hills, permanently eliminating seven jobs in Ann Arbor. He told the commissioners that he would not be able to attend their meeting scheduled for Sept. 20, so if they had questions, he asked that they pose them to him that evening.

Gerald Serwer introduced himself as the owner of 2021 Washtenaw Ave., located next to the access road. He described how he’d worked with the bank to eliminate some objections. He said he was grateful for the cooperation. He simply wanted to make sure that the access road has screening of the view so that it doesn’t negatively impact enjoyment of his property – the side yard. That could have a negative impact on the property’s value. To that end, he said, details are important and need to be spelled out before approval. If the details are how he thinks they’ll be, it’ll be okay, he said, but he still wants to see it in writing first. He stressed that there should be no parking along the access road, because it would be an impediment to getting service trucks to his home.

University Bank Parking/Employee Expansion: Commissioner Deliberations

Tony Derezinski, who’s the city council’s representative to the planning commission, began deliberations by saying, “We’re so close.” He characterized the whole process as coming out pretty well. What’s causing the delay, he continued, is the failure of the site plan to be delivered. He said the approval will be accelerated as much as possible, but then cited the old saying: “Trust but verify.” [It's a phrase associated most prominently with Ronald Reagan in connection with treaty negotiations with the Soviet Union on nuclear weapons.] The agreement needs to be written and understood so there’s no ambiguity later on, Derezinski said. He allowed that Ranzini made good points – time is money, especially at the end of the construction season.

Derezinki moved to table the issue until the documents have been submitted and the city planning staff has had a chance to review them. That would be a just outcome, he concluded.

Outcome: The commission voted unanimously to postpone the issue, likely until the Sept. 20 meeting. Those who attended the meeting were encouraged to leave their contact information, so that they could be notified directly when that timing became more definite.

Biercamp Parcel Rezoning

On the agenda was a rezoning request for the property at 1643 and 1645 S. State St., south of Stimson and next to the Produce Station. The parcels, which are owned by Stefan Hofmann, currently house a new business – Biercamp Artisan Sausage and Jerky – as well as an auto repair shop and furniture manufacturer.

Biercamp owners Walt Hansen and Hannah Cheadle want to rezone the property to C3 (fringe commercial district), which would allow their business to sell a wider variety of merchandise, including products not made on site.

The Biercamp parcel is in Site 5 in this map of the city master plan. (Image links to .pdf with higher resolution, complete map.)

The commission first considered this request at its Aug. 16, 2011 meeting, along with a request to annex the land from Ann Arbor Township. The annexation request was approved. However, at that time planning staff recommended postponing the zoning request until Biercamp received a certificate of occupancy from the township, which would grandfather in the business under light industrial zoning that allows it to sell items produced on site. That certificate has been received.

City planner Chris Cheng noted that the background information material would be familiar to commissioners, because they’d considered it three weeks ago. He reminded them that the annexation from Ann Arbor Township to the city of Ann Arbor was approved.

Since that time Biercamp has coordinated with the township and received its certificate of occupancy. The township M1 zoning, under which they would be grandfathered-in, will allow selling for products manufactured on site, Cheng said. The requested C3 or C2B zoning designation would allow for the store to sell products that were not manufactured on site, Cheng said.

Cheng indicated that the city planning staff recommended M1 zoning for the parcel.

The city’s master plan was referenced by several people during the meeting. In relevant part, from the land use section of the city’s master plan, pages 111-113 [emphasis added]:

Site 5. Both sides of State Street to the south end of the U of M Golf Course, and the north end of South Industrial. As sites are annexed into the City, uses consistent with the light industrial district should be encouraged. Residential and commercial uses should be discouraged, except for the parcels adjacent to the Stimson and South Industrial commercial area. This area could serve as a location for a City garage facility since it is zoned or master planned appropriately and is centrally located. Sites on the west side of State Street should be office use. If ORL zoning is desired in this vicinity, the area zoned M1 and M2 south of the proposed deKoning Drive has large parcels and land uses that fit the intent of the district.

Biercamp Parcel Rezoning: Public Participation

David Diephuis introduced himself as a resident with a State Street address near the parcel that Biercamp wants to rezone. He stated that he was opposed to the proposed rezoning for four reasons. First, he said, rezoning to commercial use is contrary to the city’s master plan. That plan only supports commercial zoning “adjacent to” Stimson Street and South Industrial, which in the master plan’s context does not mean simply “nearby.” Second, he said, the commercial C3 or C2B zoning would allow for almost any future use of the land – auto sales, drive-through restaurants or dry cleaners. Auto-centric commercial zoning there could cause crippling congestion in the corridor, he warned. Third, the kind of ad hoc zoning being proposed, without a study, would be contrary to Ann Arbor’s efforts to achieve a sustainable future. Fourth, the light industrial zoning that the parcel would inherit from the township will allow the business to continue as it has for the six weeks since it opened. And that, Diephuis concluded, showed that commercial zoning was not necessary for the business.

Walt Hansen and Hannah Cheadle introduced themselves as the owners of Biercamp. They said the master plan should be followed. But they noted that commercial uses are encouraged adjacent to Stimson and South Industrial. They allowed they could operate their current business as it is. They suggested that the building at 1645 S. State could have its zoning left as is, and that it would be feasible to have only 1643 S. State rezoned as C2B – no drive-throughs would be possible under that zoning configuration.

They hoped their situation could be treated as a special case because of its annexation to the city from the township. They suggested that if the parcel were rezoned as a commercial designation and another business came after them, that business would need a re-occupancy permit, and the city could deny it, if the city did not think the business would be a good fit.

Responding to the criticism they’d heard that the location was good for them as owners but not for customers, they noted that it’s within biking and walking distance of offices near Eisenhower. They noted that when the neighboring Produce Station’s parcel was rezoned from M1 to C3, it was looked at as that store’s potential to serve the community as opposed to the site’s potential to be a McDonald’s. They stressed that the reason they want to be able to sell products not manufactured on site stems from a desire to sell additional products that are made in Michigan.

Biercamp Parcel Rezoning: Commissioner Deliberations

Diane Giannola said she essentially had to repeat some things she’d said at the planning commission’s last meeting about the request. She had trouble finding justification for C3 or C2B zoning in that area. The real problem is the Biercamp owners had leased a place with the wrong zoning, she said, and they hadn’t done due diligence to find that out. There are many other places they could have leased. Biercamp’s proposed rezoning, she said, just doesn’t fit into the master plan.

Giannola allowed that she would like to see the South State Street corridor studied and possibly rezoned as an outcome to that study, but said the commission is not ready to do that yet. Right now, she said, someone could point to this as a case of favoritism and base a lawsuit on that.

Kirk Westphal said he also had similar comments to those he’d made at the commission’s last meeting. If it were up to him, and the commission could attach the rezoning just to the business, that would be okay. But zoning goes with the land, not the business, he said.

Westphal echoed Giannola’s sentiments about consideration of the entire corridor. It’s good to keep in mind, he said, that it’s a high priority on the commission’s work plan to take a look at the State Street corridor. Maybe it turns out that the corridor gets recommended for up-zoning and other uses, he ventured.

Evan Pratt noted that he was not present at the commission’s previous meeting, but echoed Westphal’s thoughts. There’s a need for change in the entire corridor, he said. He said he was thinking along the lines of what the petitioner would like. But it’s not up to the planning commission to change the city’s master plan. That’s something that’s done with public process. He suggested that maybe Biercamp could wait it out a little bit.

In response to a query from Pratt about the possibility that a PUD could be a device to achieve Biercamp’s goals, city planner Chris Cheng noted the need of a PUD to demonstrate a public benefit. In addition, Cheng said, Biercamp’s owners didn’t indicate they wanted to go down that road.

Pratt concluded that he was left with M1 zoning as the best option to allow the business to continue. He ventured that maybe there won’t be labels on every product sold in the Biercamp store. [Pratt meant this apparently in a humorful way, inasmuch as Biercamp could contemplate selling products manufactured elsewhere but not labeled as such, which would be contrary to their zoning.] Pratt noted that the study of the corridor can’t be done quickly. He encouraged Biercamp’s owners to talk to their elected officials. [The site is located in Ward 4, represented by councilmembers Marcia Higgins and Margie Teall.]

Wendy Woods said she agreed with the comments from other commissioners. Responding to the talk of a PUD, she said that if there’s a public benefit, it’s important to come forward with that. She noted there are folks out there who are not crazy about PUDs in general. Regardless of the age of the master plan, Woods said, it serves a purpose. Having the master plan in place means that neighbors don’t have to guess about what’s going to happen next. She said she hoped that funding would be available to look at the State Street corridor.

Tony Derezinski said it boiled down to the source of things being sold. Once a decision is made to rezone, he cautioned, you can’t “un-ring the bell.” The staff recommendation is to deny the rezoning request, but be open to change as the city studies the corridor, he noted. Derezinski allowed that he’s eaten some Biercamp product, and it’s a great business. He suggested that if the State Street corridor study is delayed, the planning commission should think about revisiting the rezoning request. He said that he would encourage his city council colleagues to study the State Street corridor.

Planning commission chair Eric Mahler said he had the same concerns with the “spot zoning” that others had voiced. He noted that the commission has been talking about the State Street corridor for a while. He said that his own vision would be to up-zone the entire corridor.

Outcome: The commission voted unanimously not to recommend the requested commercial zoning for the parcel. On a separate vote, the commission agreed unanimously to waive the requirement that Biercamp submit an area plan, because they are using the property “as is” with no additional improvements. Those recommendations will be forwarded to city council.

Commission Updates

Planning commission meetings typically include a variety of updates from staff and planning commissioners.

Comm/Comm: Near North, Washtenaw Non-Motorized Path

As part of his summary of city council activity, Tony Derezinski, the council’s representative to the planning commission, noted that Avalon Housing‘s Near North project appeared to be moving ahead. [The previous day, the Ann Arbor Downtown Development Authority renewed a $500,000 grant to the nonprofit for that affordable housing project, to be located on North Main Street.]

Derezinski also noted that the Washtenaw Avenue non-motorized path had enjoyed its grand opening on a day when it had been raining cats and dogs. He noted the old expression that people can “vote with their feet,” which people had been doing by using the path already – it’s been substantively complete for a month and a half.

Comm/Comm: Medical Marijuana

Also as a part of Derezinski’s update to the planning commission from the city council, he noted that the city’s medical marijuana ordinance had been discussed at that week’s meeting, on Sept. 6. He said that dispensaries in the city are now all closed in the wake of a court of appeals ruling. The council’s specific issue at the Sept. 6 meeting was whether to go ahead with appointing members to the city’s medical marijuana licensing board – the council had decided to go ahead with that.

Wendy Rampson, head of planning for the city, noted that from a staff standpoint, they continue to get questions about whether people should go ahead and apply for one of the medical marijuana licenses specified in the recently enacted city ordinance. Rampson said that staff are not currently going to continue making any determinations about compliance with zoning or not. However, they’ll accept information if people want to bring it in. Right now, however, the city staff are not acting on any medical marijuana licensing requirements.

Comm/Comm: Public Art

Derezinski also told his fellow commissioners that an issue discussed at the last meeting was the city’s public art program, which sets aside one percent of all capital project budgets for public art. Derezinski indicated that the city attorney’s office “initial review” of the public art ordinance [enacted in 2007] showed that from a legal point of view it was fine. Derezinski said that one of the councilmembers at the last meeting had given his own opinion that the public art program was illegal. [That councilmember was Stephen Kunselman (Ward 3), though Derezinski did not name him.] Derezinski reported that he himself had been appointed to replace Jeff Meyers on the Ann Arbor public art commission and had attended just one meeting so far. [The commission has met just once since Derezinski's appointment.]

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

Absent: Erica Briggs.

Next regular meeting: Tuesday, Sept. 20, 2011 at 7 p.m. in the city hall second-floor council chambers, 301 N. Huron St., Ann Arbor. [confirm date]

Although a consensus appeared to have been reached – among planning staff, neighbors and bank officials – the commission was reluctant to make a recommendation, because the final site plan had not yet been submitted. The consensus had been achieved only a week ago, last Thursday, Sept. 1. The vote to postpone, likely until the commission’s next meeting on Sept. 20, was unanimous.

The change requires amending the supplemental regulations of the site’s planned unit development (PUD) zoning district, which was originally approved in 1978.

The commission had rejected did not accept a similar proposal at its Oct. 19, 2010 meeting, tabling it and asking planning staff to work with bank officials to come up with an alternative proposal for locating new parking. At the time, planning staff had recommended denial of the request, stating that the project impacted natural features and didn’t offer an overall benefit to the city.

The current request was initially recommended for approval by staff, but that advice was changed to postponement when the final site plan was not submitted.

The bank has made several changes based on feedback, according to staff. For example, the new parking lot has been shifted an additional seven feet away from the east property line to reduce the disturbance of woodland in that area. The height of a three-foot-tall masonry screening wall around the parking lot will be increased to six feet, to screen the lot from homes to the east. New bicycle parking spaces are proposed for the southeast corner of the bank building, and a new five-foot-wide walkway connecting Washtenaw Avenue to the bank is proposed for the western part of the site.

During public participation time, president of University Bank, Stephen Ranzini, cautioned the commission against further delays. He told them that the bank had already needed to move some of its operations out of the Ann Arbor location, meaning a permanent loss of those jobs for the city of Ann Arbor.

When it’s voted on, the planning commission’s recommendation will be forwarded to the city council for final approval.

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

Left to right: DDA board members Bob Guenzel, John Mouat, Sandi Smith, and Russ Collins at the May 20 DDA special board meeting. Obscured from view between Guenzel and Mouat is John Hieftje. They were distributing the paper handouts with calculations of excess TIF revenues. (Photos by the writer.)

It was also intended to settle the matter of excess capture of TIF (tax increment finance) revenue in the DDA district – an issue raised by the city of Ann Arbor just before the DDA board had originally planned to vote on the new parking contract on May 2.

The board did vote on Friday to affirm a calculation by DDA staff that roughly $473,000 of excess TIF capture since 2004 would be divided among the following taxing authorities, which have a portion of their tax revenues captured in the DDA TIF district: Washtenaw County; Washtenaw Community College; and the Ann Arbor District Library.

Based on a representation at the special meeting by mayor John Hieftje – who has a statutory seat on the DDA board – the city of Ann Arbor is likely to agree to “forgive” the $711,767 in excess TIF capture that would be due to the city. More than that amount has effectively already been returned to the city, in the form of a roughly $0.5 million annual grant to the city to help make bond payments on its new municipal center, and a $1 million expenditure to demolish the old YMCA building, as well as other grants. In total, around $7.5 million has gone to the city, according to the DDA.

At Friday’s special meeting, the DDA board also voted to ratify its side of a new contract under which it would continue to operate the city’s public parking system. Among other features, the new contract would obligate the city of Ann Arbor to report regularly on how it is using public parking system revenues for street repair in the downtown, and how it is enforcing parking regulations downtown.

More controversially, the new contract would allow the DDA to set parking rates. Currently, the DDA forwards proposed rate changes to the city council, which can then veto the DDA’s proposal if it acts within 60 days. If the council does not act to block the rate change, the change is enacted. Although Hieftje said at the DDA board meeting he felt there was adequate support on the council to approve such a contract, there are currently at least five likely no votes on the 11-member council.

Also controversial is the exact percentage of gross revenues the city would receive from the public parking system. Before the issue of the excess TIF capture arose, the DDA board was poised to ratify a parking contract that would transfer 17% of gross parking revenues to the city of Ann Arbor’s general fund. At Friday’s special meeting, the resolution before the board dropped that number to 16%. Hieftje proposed an amendment to raise the figure to 17%. That amendment was attached to a contingency that the city council would provide a plan amendable to the DDA in which the city would “underwrite” the DDA’s fund balances. It was the 17% with a contingency that the DDA board passed.

So the special DDA board meeting did not settle with finality either the issue of the excess TIF capture or the DDA’s side of the parking contract. For the TIF capture issue, the relevant taxing authorities – especially the city of Ann Arbor – will need to affirm the solution that the DDA board approved.

For the parking contract issue, the DDA’s contingency means that the city council’s Monday, May 23 meeting – which is a continuation of its May 16 meeting, when it was supposed to approve the FY 2012 budget – will likely be recessed and continued again on May 31.

One possibility for how events would unfold is this: (1) May 23 – the city council ratifies the city’s side of the parking contract and provides the plan for underwriting DDA fund balances; city council also deliberates and amends FY 2012 budget but does not take a final vote on it; (2) May 24-27 – DDA schedules a special meeting to accept the parking contract contingency; and (3) May 31 – city council resumes the meeting started May 16 and previously continued on May 23, and approves FY 2012 budget. [.pdf of draft parking contract]

Historical Background: May 2, 2011

Board chair Joan Lowenstein led off with a confirmation from Joe Morehouse, the DDA’s deputy director, that the special meeting had been properly noticed to the public under the Open Meetings Act. Morehouse indicated that a paper notice had been posted at city hall, and the meeting had been added to the city’s online Legistar scheduling system, and posted to the DDA’s website calendar.

Lowenstein began by reviewing where things had stood before the May 2, 2011 DDA board meeting. The DDA board had been poised to ratify its side of a new parking contract under which it would continue to operate the city’s public parking system.

By way of background, the DDA has already transferred $2 million more to the city from the public parking revenue than the current contract with the city requires. The decision last year to transfer an additional $2 million of parking revenue to the city was made at a board meeting last April, over strong objections of some board members. [Chronicle coverage: "DDA OKs $2 Million Over Strong Dissent"]

The details of the new parking contract have been negotiated at public meetings between so-called “mutually beneficial” committees of the city council and the DDA board for nearly a year, starting in June 2010. Before that, a “working group” of councilmembers and DDA board members had worked out of public view since early 2010 to establish a term sheet as the basis of the negotiations.

Last summer, as the two committees finally emerged into public view to start the negotiations, their stated goal was a ratified new contract by Oct. 31, 2010. That goal was not met.

Key Features of New Parking Contract

Key new elements of the new parking agreement include a requirement that the city report to the DDA on its street maintenance activity in the downtown area, as well as its parking regulation enforcement activity. A standing committee composed of DDA and city staff would help ensure communication on enforcement issues. The term of the proposed contract would be 11 years, with a one-time renewal through 2033, which is the end of the DDA’s lifetime. [First established in 1982 for 30 years, and set to expire in 2012, the DDA was renewed by a city council resolution in 2003.]

More significantly, however, would be a new authority for the DDA to set parking rates independently of the city council. Currently, the DDA forwards proposed rate changes to the council, and those changes automatically take effect unless the council acts to veto them. The new contract would eliminate the city council veto power.

The financial component of the new parking contract reflects a significant conceptual change – moving from multiple categories of fixed payments to a percentage-of-gross approach. One example of a fixed payment in the current contract is for roughly $840,000 to be transferred from public parking revenue to the city’s street repair fund – an amount that is keyed to an inflationary escalator.

Another example of a fixed payment is the DDA’s payment of up to $2 million in “meter rent” – the current contract stipulates $1 million, with an option for the city of Ann Arbor to request $2 million in any one year, as long as the total amount of meter rent over the 10-year life of the contract (ending in 2015) does not exceed $10 million. Through the 2010 fiscal year, $10 million in meter rent had already been transferred to the city under the contract – which is why the additional $2 million transferred last year, for FY 2011, was controversial.

The exact figure for the percentage-of-gross payment had been a contentious issue, but on May 2 the DDA board was poised to ratify the contract at 17%.

At Friday’s special board meeting, Lowenstein reminded board members how on the morning of May 2, they’d been informed of the clause in the city’s ordinance on the DDA – contained in Chapter 7 – that limits the amount of TIF capture.

Briefly put, the mechanism of a tax increment finance (TIF) district allows an entity like the Ann Arbor DDA to “capture” a portion of the property taxes in a specific geographic area that would otherwise be collected by taxing authorities in the district.

Lowenstein set up the parking contract discussion by explaining how the DDA had an unexpected obligation to return $473,000 in excess TIF capture to taxing authorities in the district.

Deliberations: Parking Contract Percentage – The Case for 16%

Board deliberations on the financial conditions of the parking contract were intermingled with discussion of the return of excess TIF revenue, because of the impact on DDA fund balances of the one-time $473,000 payment to taxing authorities in the DDA’s TIF district.

Board chair Joan Lowenstein began the deliberations on the contract by saying that the whole point is to continue to partner with the city on management of the parking system. The reason the DDA board was considering re-opening the contract at all is that the city of Ann Arbor needs additional money, she said, and there will be a continuing need.

At the same time, Lowenstein cautioned, the DDA has a responsibility to maintain the city’s parking infrastructure, and a responsibility to maintain a fund balance. If projections for parking revenues are off by 1 or 2 percentage points, she said, that completely changes the DDA’s budget. If there’s a cost overrun for the Fifth Avenue underground parking structure that’s currently under construction, there needs to be a fund balance that could handle those eventualities and handle them quickly.

The return of $473,000 in excess TIF capture to taxing authorities in the district, Lowenstein said, had resulted in the resolution that the board was considering: a percentage-of-gross figure of 16% for the parking agreement, instead of the previously contemplated 17%. Even on a 16% scenario, she continued, there would be low combined fund balances for the DDA: FY 2012 – $3.08 million; FY 2013 – $2.17 million; FY 2014 – $2.33 million; FY 2015 $2.04 million; and a low in FY 2016 – $1.93 million. The $1.93 million was very low, she said, but the DDA was willing to endure that, in order to provide a fair parking revenue to the city.

DDA board member Russ Collins wanted to know what the future impact might be on DDA TIF revenues, as compared to the DDA’s 10-year plan, given that TIF capture would now be calculated correctly. Joe Morehouse, DDA deputy director, explained that in the next year, the TIF valuation is expected to drop. And the DDA’s 10-year plan uses an average projection of a 2% increase in TIF revenue per year, so the impact of the correct calculations in the future would be zero, Morehouse explained.

Board member Bob Guenzel asked for clarification of why the DDA fund balance will be less than previously anticipated. Morehouse explained that it’s due to the one-time payment the DDA will need to make to return excess TIF capture to the taxing authorities in the DDA TIF district.

Deliberations: Parking Contract Percentage – Reverting to 17%

Mayor John Hieftje asked Morehouse to provide the fund balance figures for the 17% scenario.

Year by year, here’s what those numbers looked like [the fund balance is expressed as a percentage of reserves in parens]: FY 2012 – $2.9 million (14.5%); FY 2013 – $1.8 million (8.7%); FY 2014 $1.8 million (8.2%); FY 2015 – $1.34 million (5.7%); FY 2016 – $1.03 million (4.3%); FY 2017 – $1.94 million (8%).

Hieftje said he wanted to ask the DDA to consider that the city is ultimately responsible if the DDA defaults on its obligations. And the city would be willing to “backstop” the DDA for the years when the DDA was concerned about the fund balance being low. It was much more important to put the parking contract in place so that the city would have the yearly income, he said. He felt the DDA could live with those fund balances. He did not think it made sense to plan a long-term agreement on the basis of just avoiding a low fund balance in a specific year.

DDA board member John Mouat noted that the DDA had not been in negotiation mode for a while – the resolution before them was the DDA’s “best take” on the situation, and then it would go to the city council. Lowenstein confirmed that back on May 2, the DDA had effectively concluded negotiations through its mutually beneficial committee. The only change to the situation has been the impact of returning excess TIF.

Guenzel then asked Hieftje if he thought he had enough support on the council for the new parking contract, if the percentage of gross were set at 17%. Hieftje replied that he felt there would be sufficient votes. Guenzel noted that there’s no way to predict for sure. Hieftje allowed that there is discomfort among some councilmembers about the provision in the contract that would allow the DDA to set parking rates. He characterized their concern as not wanting to be seen as using the DDA as a buffer between themselves and voters.

Hieftje went on to say that the city’s CFO and acting interim administrator, Tom Crawford, had said that if the percentage of gross is 16%, then the city would need to make an additional $250,000-300,000 reduction to its general fund budget this year and next. The city was currently doing everything it could to save police and fire positions. He noted that some on the DDA board had asked why that’s the DDA’s problem. [Newcombe Clark, who was absent from Friday's special meeting, has articulated that sentiment, for example.] Hieftje said that it’s all of our problem.

Mayor John Hieftje drafts language of the amendment to the parking contract resolution that ultimately was passed by the board.

Hieftje then offered an amendment to the resolution, changing the amount to 17%. Guenzel seconded the amendment. Leading off discussion of the amendment, Sandi Smith, who sits on the city council as well as the DDA board, said that if it’s important to maintain a fund balance, then there are other strategies the DDA can explore. In the DDA’s 10-year plan, for example, a contribution to the housing fund, which has been paused this year, resumes in 2013. Eliminating that would start to change the picture. Smith also pointed out that the DDA had set aside $500,000 to support the go!pass program, which subsidizes bus passes for downtown employees. If there’s a concern not to drop the fund balance down to 4.3%, then there are ways to change that. Smith said none of the decisions are easy.

Smith went on to say that the city of Ann Arbor is planning to dip into the general fund reserve balance for around $1 million, which is not a position the city wants to be in. But back when the DDA was planning to build the underground parking garage currently under construction, the city’s CFO, Tom Crawford, had cautioned the DDA about maintaining a fund balance of around 15%, and she had taken that to heart. She said she was “tormented” about the issue, but was willing to hear the arguments of others on the board.

Gary Boren clarified that they were currently debating just the amendment to change the number from 16% to 17%. With all due respect, he said – responding to Smith’s suggestion of cutting housing fund transfers or alternative transportation grants – those are elements of the DDA’s core mission. Those go to the heart of what the DDA does, and affects what the DDA will be able to do in the future.

Lowenstein added that in order to accommodate the city of Ann Arbor’s need for additional revenue, the DDA’s budget already includes deferring some maintenance on the parking structures.

Hieftje said that what he’d heard for a while reported back from the city’s negotiating committee was a concern about the DDA’s fund balance, based on Crawford’s comments. He contended that Crawford remembered his remarks about fund balances a little differently from what Smith had portrayed.

Hieftje suggested an additional meeting of the two negotiating committees to give the DDA some comfort with respect to the city’s assurance that it would backstop the DDA’s fund balances. That way, if there were a problem with a construction overrun or a drop-off in parking demand, the DDA would have some assurance that the city would step in and fill the gap. It’s certainly not in the city’s interest to see the DDA fail to meet its financial obligations, Hieftje said. “We can make that good,” he told his DDA board colleagues. He pointed out that it’s the city’s general fund reserve that matters for bond ratings. If the DDA needed the money, Hieftje said, it would be there.

Board member Russ Collins asked if the sentiment that Hieftje had expressed could be added to the amendment adjusting the amount from 16% to 17%. Hieftje then suggested that he’d asked councilmembers to add time on May 31 to their calendars for another meeting. The two negotiating committees could meet, then let the city council make a decision on the parking contract on May 23, when council’s meeting – begun on May 16 – resumed.

Smith asked Hieftje to provide some information about what was happening in the state legislature with respect to health care benefits for public employees. Hieftje allowed that the legislation had the potential to have a good impact on local governments because it would require some public employees to contribute 20% of their health care costs. But he said that would be too far down the road for it to have an immediate impact.

Lowenstein clarified that if it were to be necessary that the DDA required support from the city to meet its obligations, then any expenditure over a certain amount would need city council approval. Hieftje allowed that he couldn’t guarantee that the council would approve such an expenditure, but he thinks there would be strong support for it. It’s not in the interest of the city to see the DDA default on its obligations, Hieftje said.

Guenzel said the issue with percentages is really tough. Having worked in an organization where the goal was an 8-12% reserve, it’s very important. [Before retiring in May 2010, Guenzel had served as Washtenaw County administrator.] He said he might disagree with Crawford that 15-20% should be a goal, but said that 8-12% is necessary. He had a concern that with 16% and 17% as a percentage of gross in the parking contract, there’s a difference in the fund balance levels. He noted that the future could look better than what the DDA was forecasting – these are projections.

Guenzel said he liked the idea of the city stepping up and making a statement. The question is whether it could bind a future council. He stressed that the DDA did not want the city to take over its assets – the DDA is a separate entity. But if they were talking about a partnership, then if the city is willing to consider making some kind of an assurance on the DDA’s fund balances, he’d vote for 17%.

Roger Hewitt expressed concern about the fund balance – it would not be above $2 million again until 2017, he observed. He said he was interested in seeing what the city would be willing to offer in the way of an assurance. But on the 17% scenario, it left the DDA with a pretty slim balance, he said, especially with a $50-million construction project currently being built. The DDA’s deputy director, Joe Morehouse, who handles financial matters for the DDA, had suggested $3.5 million as the cash balance needed for the organization, Hewitt said.

Hewitt said he was willing to attend one more negotiating committee meeting, but without some assurance from the city to guarantee the DDA’s fund balances, he was not comfortable with 17%.

DDA board member Roger Hewitt gazes at the wall of fund balance numbers projected on the screen during deliberations on the parking contract.

Picking up on Hewitt’s point about ongoing construction projects, Smith pointed out that soon the amount would reach $60 million, because of the construction on the parking deck that’s part of the City Apartments project to be built by Village Green at the First and Washington lot. The DDA is committed to supporting that parking deck with $9 million in bonds, when the project is completed.

Collins said he’s likely to follow Guenzel’s analysis. To be blunt, he said, when you’re talking about several million dollars, the difference between $1 million and $2 million in reserves isn’t much. He said the committees had worked hard to come up with something that is “equally annoying” to both the city and the DDA, and he felt they’d arrived at that point. [Collins is a member of the DDA's negotiating committee, along with Smith, Hewitt and Boren.] He said he shared an interest in seeing the city chime in with something that would provide some underpinning.

Collins then expressed some general frustration about how the DDA is perceived in the broader community. He said he served on the DDA board to try to do good things for the city, and the downtown in particular. But the word on the street is that the DDA is “up to something.” He said as the DDA tries to accomplish something good for the city, that’s not the word on the street – it’s not in the media that way, and it’s not accepted that way in the hearts and minds of the city council.

Collins said he hoped the new parking contract would help change that perception. He noted that people who sit on the board to try to do something positive are volunteers. He said he would support the 17% contract with that positive tone, even though some people might call him foolish for doing so.

Russ Collins lamented the fact that the DDA board is trying to do good things for the city, but that it's not perceived that way by some people in the community.

Mouat said his concern is that despite two years of conversation, the city and the DDA are still negotiating. He said he tended to agree with Hewitt, that they are not done yet. His tendency would be to put out the 16% offer and then look for the city to provide something to give the DDA more confidence. He was more comfortable with the resolution at 16%.

Smith said that without having a specific “trigger” identified, she could not vote for a contract with 17%. She wanted to either vote down the amendment, or table the resolution. The more she looked at the numbers, the 4.3% fund balance is pretty slim, she said.

Lowenstein said she felt it’s cumbersome and difficult to think about having an additional committee meeting, having the committees make a recommendation, coming back to the DDA for a special meeting, and then having the matter go back to the city council. She also observed that the DDA had been negotiating against itself for a long time. In principle, she’d be in favor of 17% as Hieftje had represented it. One scenario would be to approve the contract at 16%. And if the council is serious about making some kind of pledge in exchange for 17%, then the DDA would only need one more special meeting in order to approve that. That would limit the number of times they have to get a whole bunch of people together, Lowenstein suggested.

Deliberations: Parking Contract Percentage – City Guarantee

Hieftje then offered an additional phrase to his amendment changing the percentage of gross to 17%. The alteration of the amendment made the DDA approval “contingent” on city council approval of a plan acceptable to the DDA to backstop the DDA fund balance in certain years. Collins suggested the word “underwrite” instead of “backstop,” and with that, the altered amendment was under discussion.

DDA board member John Splitt said that with the additional language about the city’s guarantee, he would support 17% as the percentage of gross figure.

Smith said that one concern she had with this scenario is that a future city council would be making decisions about whether the DDA needed to do maintenance on parking structures. She did not want it to be the case that a future city council might choose not to do some preventative maintenance on parking structures, in order to keep the fund balance high.

Hieftje reiterated the sentiment that it’s certainly not in the city’s interest to see the DDA struggle to pay bills or do maintenance. Mouat said it felt to him like board members were hovering around the same concept – they could ponder and ponder, but the devil is in the details. He wondered at what point it would not be the DDA board that would be overseeing DDA funds, but rather the city council. The DDA really needs the city council to be more clear, he said. It’s hard to pass a resolution without knowing exactly how it’s going to work.

Hewitt said he shared the same sentiment as Mouat – he did not want the city council to be performing the function of the DDA board. He said he could support the resolution as amended, but would look very critically as the language eventually proposed by the city council.

Splitt asked Hewitt if the two negotiating committees could work out such language. Collins noted that the DDA’s legal counsel, Jerry Lax is available again – he’s “walking around now.” [Lax underwent a knee replacement.] Hieftje said he could appreciate the discomfort of board members. But he said if the contract with the amendment is not approved by the city council, “the same thing will happen at 16%.” In any event, he suggested that the DDA keep a meeting slot open. He’d told councilmembers to reserve a time on May 31 to which the council could continue its budget meeting – the one already begun on May 16.

Smith asked to review some of the hybrid solutions she’d proposed in the past – scenarios where the percentage-of-gross parking revenues to be transferred would change after a certain number of years. Although Morehouse adjusted the parameters to show DDA board members onscreen what those solutions would look like, there seemed to be little traction on the board for pursuing any of them.

Collins said the DDA needs to remember that some folks at the city were initially looking for 20%. So it’s important to recognize the difficulty of negotiation from the city’s point of view. What they want to do is get this resolved and move on, Collins said. He said the DDA would have the opportunity to manage itself toward better fund balances. Politics is the “art of the possible,” he said. The 17% is hard from the city’s point of view.

Collins allowed that it’s a tremendously small fund balance for a large value of capital assets. As executive director of the Michigan Theater, he said, their aspirations are to have $1-2 million in reserve for a $2.5 million annual budget and a capital asset worth around $10 million. Collins said that $100,000 one way or another isn’t important, but the city’s backing is important.

Guenzel said that under either scenario it’s not enough, so the city’s promise is important. There is a mutual benefit in the new contract, he contended, because it clears up ambiguities. The board needs to get the thing done, he said. He was willing to live with the amendment and pass it that way. He reported that a friend of his had asked him why the DDA is not just turning over all the money to the city. Downtown Ann Arbor is dependent on a thriving city government, he said.

Mouat noted that the DDA was going at the issue yet again at a board meeting – “It’s a hell of a way to do this,” he said. It felt like they were doing the same thing they’d done before. He asked Hewitt and Hieftje if would it make any sense to see if there’s any other key folks on the city council who might participate in drafting the specific language of the city’s underwriting assurance.

Collins stressed that he felt the DDA was already at a decision point. Responding to Mouat’s frustration that the DDA was engaged in the same exercise, he said that progress had been made in the last six months. The board is at the decision point now. It feels the same, but it isn’t, he concluded.

Hieftje asked for confirmation that the projections for future DDA fund balances included TIF revenue from the 601 S. Forest and Zaragon II projects. Morehouse confirmed that the projections did include those amounts. Hieftje said he could not tell the DDA board for sure that council would approve the contract, but he could assure them that he would take it to council. Ultimately, he said, it is a partnership. Responding to comments about the community’s perception of the DDA, there are some pretty staunch defenders of the DDA on the city council, Hieftje assured them.

Splitt said he did not want to delay. He felt that a deal could be made at 17% but not at 16%.

Outcome on amendment: The DDA board voted 8-1 to approve the amendment to change the percentage to 17%, which included a contingency that the city would provide some kind of underwriting language that is satisfactory to the DDA. Dissenting was Gary Boren.

Deliberations: Parking Contract – DDA Rate Setting

Smith proposed an amendment to the contract that addressed the ability of the city to establish parking areas for its employees. The amended language, which was unanimously approved, made it clear that those facilities might also be used for public parking.

But the main concern in the non-financial aspect of the parking contract was for the provision that allowed the DDA to exercise final authority on parking rate changes.

Hieftje noted that some councilmembers have discomfort with the idea that the DDA would have sole authority to set parking rates. He thought there were a majority who would support the contract with that provision, but he felt that a larger majority could be achieved. If there were an annual review one year later after a rate change, where the council could decide if it wanted to take action, that would provide a lot of comfort for some councilmembers, he said.

Smith felt that would undermine a fair amount of what she found mutually beneficial about the contract. Hewitt noted that the DDA is undertaking some fairly dramatic financial commitments, and without the ability to set rates, the DDA couldn’t be confident it can meet those commitments. It’s one of the only things in the contract that the DDA doesn’t already have, he said. With the implementation of a program of transportation demand management, there’ll be a number of different rates, varying with geographic area, time of day, and day of week. He did not want to try to get into a discussion with the city council about some specific rate in a particular location.

Mouat wondered if there were a risk of politicizing rates in different areas, depending on the council ward. Hewitt explained that the idea of transportation demand management is based on where the demand is, not based on what the DDA would like to charge. It’s about what you’re trying to achieve, he said: Do you want someone to park there for two hours or eight hours?

Collins said he thought the DDA could invite the city council to review and comment, just as the DDA invited review and comment from the public. That kind of language could be added. Boren noted that kind of language was already included. The board then agreed to add “city council” explicitly to the list of entities to be consulted before undertaking rate changes [inserted text in italics]:

2. Operational Powers and Responsibilities Within DDA Parking Area.

k. Subject to Article 8, applicable law, and City permitting regulations, and after consultation with the City Administrator, city council and downtown stakeholders, which may from time to time be identified by either the City or the DDA, the DDA shall determine the rates and hours of parking in the Municipal Parking System and file such rates and hours with the City Clerk and otherwise publish such rates in the same manner as City ordinances, which rates and hours shall take effect thirty (30) days after said filing.

Hieftje said he thought the amendment moved in a good direction. Lowenstein pointed out that the council also has representation on the DDA board. [Hieftje and Smith serve on both the city council and DDA board.]

Outcome on amendment: The board voted unanimously to add the city council as one of the entities with which the DDA needed to consult before enacting parking rate changes.

Deliberations: Parking Contract – Parking Rates as Tax

Boren began the deliberations on the main motion to approve the contract by saying, “We don’t have to put our ear to the rail to figure out the direction the train is moving in.” He said there are two issues. One of those is a misperception of what the DDA is all about. A big problem is that the DDA is like Rodney Dangerfield – it gets no respect.

Board chair Joan Lowenstein confers with Gary Boren before the start of the May 20 meeting. Boren was the lone voice of dissent on the parking contract vote.

A second issue, Boren said, is that the city was taking a public service like parking and turning it in to a for-profit venture. That approach is at least marginally going to cause business and residential tenants to try Briarwood Mall instead, he cautioned. Some shoppers will decide to buy shoes at Arborland instead of downtown. When you charge people more to park than it takes to provide the service, he said, it’s effectively a tax. And that pushes people out of downtown. Boren said he sees that as directly in opposition to the DDA’s mission. In the future, he said, the DDA needs to make clearer to the city council the benefits of supporting the downtown. The parking agreement puts downtown money in the neighborhoods, so he’d be opposing it, Boren concluded.

Mouat said he’d struggled for a while with the issue. It’s a tough situation, he said. DDA board members aren’t elected officials, but their job is to represent downtown, and they’re looking out for the community as a whole. If the community is not healthy, then downtown isn’t healthy. He said he was hopeful that when the DDA and the city get past the contract, they can have some fruitful conversations. He said he’d support the contract, but with a little bit of a bad taste in his mouth. He agreed with a lot of what Boren had said.

Collins said he’d support the contract. He recalled the history of the DDA’s stewardship of the parking system. The DDA had taken a negative amenity, and turned it into a much more positive amenity. The DDA had made a decision that the parking infrastructure is a key way it wants to enhance the downtown – that’s the DDA’s legacy, he said. However, he said no positive karma comes from operating a parking system. That’s because you’re charging a fee for something that some people think should be free.

The DDA had tried its best to turn parking into a positive, Collins continued – it’s a burden the DDA carries for the city. In the future, as the DDA considers how it wants to affect the downtown positively, other projects may get lost in the dialogue about parking.

Boren said there were ways the parking contract could have been structured that could have gotten his support: pegging the parking revenues to downtown services. Instead, he said, last year the DDA had given the city $2 million for the right to negotiate, and it was not pegged to the benefit of the downtown. If the DDA must consume itself for the benefit of the city, he said, then it’s not a symbiotic relationship, but rather a a parasitic relationship. The DDA needs to be true to its mission, he said.

As a benefit to the contract, Lowenstein pointed to the reporting that would be required on how the street maintenance money is being spent. Previously, the DDA had been transferring close to $1 million to the city for street maintenance in the downtown, with absolutely no accountability about how it was being spent. In the new contract, there’s a reporting system for what’s being done. There’s also a standing committee on enforcement of parking regulations.

Hewitt said he also agreed with Boren – the contract is far from perfect, from the DDA’s standpoint. There are a few advantages in the new contract, but also some significant disadvantages. He was “not real happy with it.” Looking at the parking system, he said, the DDA was the victim of its own success. For him, Hewitt said, the issue reduces to whether it’s better to run the parking system under this agreement or give system back to the city. His personal conclusion is that it’s better to have the agreement.

Outcome: The board voted 8-1 to approve the new parking contract, with the contingency on a city council assurance on fund balances. Gary Boren voted against the contract.

Return of Excess TIF: Background

The DDA’s tax increment finance district (TIF) by definition captures a portion of taxes in a specific geographic region in downtown Ann Arbor – taxes that would otherwise go to taxing authorities like the city of Ann Arbor (including the Ann Arbor Transportation Authority), Washtenaw County, Washtenaw Community College, and the Ann Arbor District Library.

Only a portion of the taxes are subject to capture – namely, the difference (i.e., the increment) between the baseline property value when the DDA was formed, and the value of improvements made to the property. Increased value of property due to inflation/appreciation after an improvement is made is not subject to capture under the Ann Arbor DDA’s TIF plan. In principle, if no improvements are made to a property within a TIF district that result in an increase in value, no taxes are captured. An example of that is Manchester’s DDA, which was formed fairly recently, in 2005, and there has been no tax capture since then.

The combination of the Ann Arbor DDA’s TIF plan and the Ann Arbor DDA ordinance effectively limit the amount of taxes that can be captured.

The complete Ann Arbor DDA TIF plan is available on the DDA’s website. The TIF plan includes estimates of the year-to-year increase in new taxable value in the district.

Here’s how the DDA’s TIF capture is limited by the TIF plan: If the growth rate of the TIF capture exceeds the amount estimated in the plan, then the excess is supposed to be returned to the various taxing authorities. From the city’s DDA ordinance:

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

It’s worth noting that the excess TIF capture to be returned to taxing authorities under the Ann Arbor ordinance appears to apply independently of the state statutory requirement that any “surplus” TIF that’s not expended according to the TIF plan be returned to the taxing authorities from which it was captured:

125.1665 Transmitting and expending tax increments revenues; reversion of surplus funds; abolition of tax increment financing plan; conditions; annual report on status of tax increment financing account; contents; publication. Sec. 15. … (2) The authority shall expend the tax increment revenues received for the development program only pursuant to the tax increment financing plan. Surplus funds shall revert proportionately to the respective taxing bodies. …

In previous reporting, The Chronicle identified several questions that would need to be answered in order to calculate the excess TIF capture. Here we add the answers on which DDA calculations of excess were based, from the board discussion on Friday [.pdf of table showing calculations in detail]:

1. What’s the relevant time period? The ordinance identifies the “rate” of growth, which entails comparing valuations over some period of time. Interpretation A would be that each year when the tax rolls are closed (after the Board of Review has handled all appeals), that year’s valuation is compared with the previous year’s, and the percentage difference is calculated. That percentage is compared with the percentage growth forecast by the TIF plan between those two years. Interpretation B would compare a given year’s valuation against the valuation in the first year of the plan (not the previous year) and compute the percentage difference between them. That percentage difference would then be compared against the percentage growth forecast by the TIF plan from the beginning of the plan to the current year. DDA answer: Interpretation A. Note that the span of time in question is since 2003, when the DDA was renewed. Before that, according to board chair Joan Lowenstein, the TIF plan estimates were “wildly optimistic” and the conditions of the ordinance were not met.
2. Which set of TIF plan estimates are applicable – the one labeled pessimistic, optimistic or realistic? The ordinance language refers to “anticipated” growth, without specifying whether that means the “realistic,” “optimistic,” or “pessimistic” estimates. Arguments for either the “optimistic” estimate or the “pessimistic” estimate would be susceptible to the criticism it is not “realistic.” Initial ballpark calculations done by the city have been based on the “realistic” estimates. DDA answer: Use the optimistic forecast.
3. Who is the responsible party for adherence to the ordinance?The taxes captured by the DDA’s TIF district are administered not by the DDA staff, but rather by the city assessor’s office, just as they are for all taxing entities. The city receives an administrative fee for this work equal to 1% of the tax bill – it’s labeled ADMIN FEE on the bill. [When the city council passed last year's budget, Stephen Kunselman (Ward 3) proposed a budget amendment to reduce the administrative fee, but it received little traction and did not pass.] So it’s the city that transfers the DDA’s TIF taxes to the DDA. For other taxing entities, like the Ann Arbor District Library, it’s not completely clear what their avenue of complaint is, if they are owed money that was erroneously captured – through the city of Ann Arbor or through the DDA? DDA answer: Here the calculations do not appear to be affected, but at Friday’s meeting, board chair Lowenstein was not eager to assign blame to any particular person or entity, saying that no one had paid appropriate attention and that it was an “honest mistake.”
4. Does the ordinance language refer to real property only, or also to personal property? The valuations included in this article lump together valuations of real property and personal property. Real property refers to building and land. Personal property refers to pieces of equipment. A specific example of personal property [but from outside the DDA TIF district] would be the planned acquisition by Sakti3 of battery cycling equipment and thermal chambers as part of the firm’s expanded operations. Based on the DDA TIF plan, through 2003 personal property in the DDA district accounted for roughly 25% of TIF capture. DDA answer: The language refers both to personal and to real property.
5. Do payments already made by the DDA to the city of Ann Arbor out of the TIF for the new municipal center count towards any sum that might need to be returned? In May 2008, the DDA board pledged up to $540,000 annually from its TIF capture to help finance the city’s new municipal center. [.pdf of May 7, 2008 DDA board meeting minutes] If it’s determined that too much money has been transferred to the DDA for its TIF capture, then the DDA might point to the money pledged as part of the municipal center finance plan as covering any amount owed to the city of Ann Arbor. DDA answer: Yes, the money previously granted to the city of Ann Arbor out of the TIF fund for various projects – which totals around $7.5 million, according the DDA – should count as already returned under the ordinance.

Return of Excess TIF: Deliberations

During deliberations on the parking contract, DDA board member Gary Boren noted that in the calculation of the excess TIF capture to be returned to taxing authorities in the district, the city of Ann Arbor was anticipated to be willing to “offset” the amount that would have otherwise been returned to the city as a taxing authority in the district – around $712,000. That offset was due to the amount of TIF revenue that had been granted back to the city since 2003.

Boren wanted clarification about by how much the $712,000 had been “overshot.” Board member Roger Hewitt reviewed the figure from the PowerPoint slide Lowenstein had presented in her introduction: $7.5 million. The $7.5 million in TIF that the city of Ann Arbor has received from the DDA since 2003 came in the form of funding for: the Calthorpe project; interest payments on the old YMCA lot; LED streetlights; a sanitary sewer study; municipal center LEED certification; and a municipal center bond payment of $500,000 per year.

So Boren suggested that if an excess in TIF capture were ever to happen again, the DDA would have leverage to justify not returning excess to the city of Ann Arbor – because it had already been returned.

When the board arrived at the second item on the special meeting agenda – the TIF excess capture – it was Bob Guezel who led off the discussion.

He asked DDA deputy director Joe Morehouse if he’d verified the numbers. Morehouse indicated that he had, and they’d been forwarded to the taxing units to which the excess would be returned. The DDA had not received a response from them, however. Guenzel ventured that if they disagree, they’ll let the DDA know. Lowenstein said she’d talked to Josie Parker, director of the Ann Arbor District Library, and they’d agreed to sit down and go over it. Lowenstein said the resolution states that this is the DDA’s calculation. The DDA is willing to go over the figures, she said.

John Hieftje asked that the language in one of the “whereas” clauses be modified – he did not want anyone to be alarmed, but he said that it could not yet be said that the city has agreed to waive the return of the excess that would be due to the city. He suggested that instead it should say something like “is likely to forgive.”

Boren clarified that this is an obligation the DDA has to return the excess – the board is approving the calculation, not the obligation. Russ Collins wondered if it would be more appropriate to check the calculations with the different taxing units, before passing the resolution.

Morehouse suggested that what the resolution was doing is affirming the method the DDA is using to interpret the city’s DDA ordinance.

Boren noted that it was only in the DDA’s interest that board members be aware of the issue of the excess TIF capture issue before they had voted on the parking contract, so he thanked the mayor for bringing it to the DDA’s attention, because it was the right thing to do. Hieftje contended that it was “a head-scratching moment” when the city’s financial staff realized that the clause of the DDA ordinance existed.

Lowenstein ventured that the situation shows you should go back and read your ordinances, and maintained that there was nothing underhanded or nefarious about it.

Outcome: The board voted unanimously to approve the calculations on return of excess TIF.

Present: Gary Boren, Bob Guenzel, Roger Hewitt, John Hieftje, John Splitt, Sandi Smith, Russ Collins, Joan Lowenstein, John Mouat

Absent: Newcombe Clark, Keith Orr, Leah Gunn

Next regular board meeting: Noon on Wednesday, June 1, 2011 at the DDA offices, 150 S. Fifth Ave., Suite 301. [confirm date]

Special meeting: TBD at the DDA offices, 150 S. Fifth Ave., Suite 301. [confirm date]