From left to right: DDA board members Gary Boren, Roger Hewitt, John Hieftje, and Keith Orr. (Photos by the writer.)

In their one business item, the board approved an amendment to the contract with Village Green to develop a 244-space parking deck as the first two stories of a 9-story, 99-foot-tall building, City Apartments – a 156-unit residential planned unit development (PUD) at First and Washington.

Once the parking deck portion of the building is completed and issued a certificate of occupancy, the city of Ann Arbor has agreed to issue $9 million worth of bonds to purchase the deck, and the DDA has agreed to make the payments on those bonds. The amendment to the contract provides DDA consultants access to the site during construction activities to check that construction methods conform to standards that will ensure a 75-year life for the deck.

On the city council’s agenda for Monday, Feb. 7, 2011 is their own approval of the same amendment to the Village Green contract. The contract amendment is part of a timeline put in place on Aug. 5, 2010, when the city council approved an extension of Village Green’s option to purchase the First and Washington city-owned parcel for $3 million. That timeline calls for Village Green to purchase the land by June 1, 2011.

The $3 million proceeds from the hoped-for Village Green deal were part of the financing plan for the city’s new municipal center, and would have no direct impact on the current general fund’s $2.4 million deficit that’s forecast for the FY 2012 budget. However, during deliberations some DDA board members accepted the point made by their colleague Newcombe Clark – that there are likely indirect connections between the completion of the Village Green transaction and the city’s overall budget picture, at least in terms of cash flow.

In reports and communications entertained by the board, highlights included: (1) a continued interest on the part of the University of Michigan to absorb a segment of Monroe Street into the UM Law School campus; (2) complaints from the property manager at 416 Huron St. about disrepair of an alley and adjoining sidewalks in the area, as well as a lack of maintenance on property owned by the railroad; and (3) an elaboration by the mayor on some remarks about Borders that he’d made and that had been reported in the media.

Village Green

The board considered a resolution to approve an amendment to the contract between Village Green, the DDA and the city of Ann Arbor, under which terms Village Green will build a 244-space parking deck as the first two stories of a 9-story, 99-foot-tall building with 156 dwelling units: City Apartments.  The amendment to the contract, among other items, provides DDA consultants access to the site during construction activities to ensure that construction methods conform to standards that will ensure a 75-year life for the deck.

Village Green: Background

The parking deck under City Apartments would be owned by the city of Ann Arbor and managed by the DDA. Here’s how that would work: Once the parking deck portion of the building is completed and issued a certificate of occupancy, the city of Ann Arbor has agreed to issue $9 million worth of bonds to purchase the deck, and the DDA has agreed to make the payments on those bonds.

The city council authorized the issuance of the bonds at its Oct. 4, 2010 meeting, but the city will not actually issue them until construction of the deck is complete and a certificate of occupancy is issued for it. [After the DDA's bricks and money committee meeting on Jan. 26, 2011, Susan Pollay, executive director of the DDA, clarified for The Chronicle that the certificate of occupancy refers just to the parking deck – it will be completed before the apartments are ready for occupants to move in. Issuing the certificate of occupancy will be contingent on the parking area being safe for motorists to park their cars while construction continues on the upper floors.]

The timing of the bond issuance was part of the council’s deliberations at its Oct. 4, 2010 meeting:

Stephen Kunselman (Ward 3) led off deliberations by expressing his concern about what happens to the bond if the deck does not get built. The city’s CFO, Tom Crawford, explained that the payment is not owed until there is a certificate of occupancy issued for the City Apartments project, and thus the bonds would not be issued until the project was substantively complete. Crawford allowed for some flexibility in that respect, if the city saw that it could get a better interest rate by issuing the bonds a few months before the project is actually complete.

Based on the timeline approved by the council in connection with the extension of the purchase option, Crawford said, the project is supposed to be built by around May 2012.

By way of background, the City Apartments planned unit development (PUD) won city council approval on Dec. 1, 2008. Village Green had an option to purchase the land parcel at First and Washington, where City Apartments is planned, which was good through May 31, 2009, but was extended by the city council at its May 18, 2009 meeting through Dec. 3, 2009 – with the possibility of two three-month extensions that could be authorized by the city administrator. The reason given for the extension was to allow time for Village Green to arrange financing. Both additional extensions were granted by city administrator Roger Fraser, which gave Village Green a purchase option through June 1, 2010 2011.

But at its June 21, 2010 meeting, the city council approved an additional brief extension through Aug. 5, 2010 in order to allow time to establish a specific set of milestones that need to be completed. Then, at its Aug. 5, 2010 meeting, the council approved another extension to the purchase option through June 1, 2011. A detailed set of milestones was included as part of the resolution, which were intended to increase the probability that a purchase took place before the option ran out.

After the city council extended Village Green’s option to purchase the land, DDA board member Newcombe Clark had noted that the milestones that had been developed generally left little time for review by the DDA. From The Chronicle’s Sept. 1, 2010 DDA board meeting report:

Clark picked up on the fact that the turnaround time for DDA activities and involvement were all relatively short – in many cases a day. He suggested that the DDA “politely ask” that it be kept in the loop on those matters.

The amendment to the Village Green contract that was before the DDA board on Wednesday was part of the timeline of milestones. So where on the set of milestones did the amendment fall? It called for the DDA board to vote on the amendment on Nov. 3, 2010 – around three months earlier. The same amendment is on the city council’s agenda for Feb. 7, 2011.

By way of additional background, the $3 million transaction for the land parcel at First and Washington is part of the city’s financing plan for the new municipal center that is very close to completing construction. The city’s contingency strategy for dealing with the possibility that the deal doesn’t go through was discussed at a budget workshop last year:

City Budget: Debt

Sandi Smith (Ward 1) was puzzled by a line in the budget summary that reads “Loan payment for First and Washington – $150,000,” noting that she did not think the city owed any money on the property.

[City administrator Roger] Fraser allowed that Smith was correct – the city does not owe money on the property. However, the city is expecting $3 million from the sale of the property in connection with Village Green’s City Apartments project, which has site plan approval from the city, but has not moved forward yet due to lack of financing.

Fraser described the $150,000 as a contingency of sorts, borrowing some money to “tide us over” if the $3 million from the sale of that First & Washington property does not come through sometime soon. The option to purchase agreement has been extended once by city council through December 2009, with a provision that the city administrator can authorize two 3-month extensions, which he has done. When the second extension runs out at the end of June 2010, the council will need to act if there is to be an additional extension.

At the council’s Monday budget meeting, the city’s CFO, Tom Crawford, indicated that he’d had recent conversations with Village Green and that they were feeling positive.

Mayor John Hieftje asked Crawford to confirm that the city was within its legal limit for debt load – the city cannot have debt in excess of 10% of the total state equalized value of property. Crawford indicated that the city was at 2.6%, and he thus felt comfortable with the city’s debt level. Crawford also cited other cities’ debt load – Grand Rapids, Lansing and Kalamazoo – as comparable. Ann Arbor’s bond rating, said Crawford, was in the top 20 in the state.

This past week, Crawford confirmed by email for The Chronicle that no money had been borrowed as a part of that contingency strategy and that if any were to be borrowed, it would need to receive approval from the city council.

Village Green: Board Deliberations

Roger Hewitt reminded the board of the project’s background, highlighting the fact that the DDA would be purchasing the deck based on a fixed amount per parking space. He noted that the DDA board had already approved a contract and what was before the board was an amendment. The language of the amendment, Hewitt said, was meant to ensure that the 75-year life of the parking deck is reflected in the construction methods. He said there are a number of engineering and construction concerns that are addressed in the contract amendment, helping ensure that the DDA is “getting what we are paying for.”

Hewitt told the board that the language had been reviewed by Carl Walker Inc., the DDA’s engineering consultant for the parking structures it manages for the city, as well as by Jerry Lax, the DDA’s legal counsel. He declared his confidence that the DDA would be getting a deck with a 75-year life.

Susan Pollay, executive director of the DDA, stressed that Village Green’s interest in quality construction is aligned with the DDA’s interest. Village Green’s intent, she said, is not to sell the building but to continue to own and operate the apartment building. So constructing a deck of sufficient quality that will last 75 years is important to Village Green, she said, because the parking deck is effectively the basement of the apartment complex they will own and operate.

[At the DDA's bricks and money committee meeting the week before, Pollay had reported the possibility of increasing the building height by a few feet, to avoid the need to dewater the site during construction of the foundations. She said that Kevin McDonald, in the city attorney's office, was looking at the issue to determine whether that change to the building plan could be made at the administrative level, or if it would need to return to the city council for approval.]

Before the meeting started, Newcombe Clark had said he was not trying to be negative about the Village Green amendment. He did, however, want to draw out a number of points.

In deliberations, he reviewed with Pollay that the DDA would be managing the deck and that the city would own it. Hewitt further clarified that the DDA would manage the City Apartments deck in the same way it manages any other city-owned parking structure. Pollay offered Liberty Square as an example of how the arrangement would be handled – the city owns the deck and the rest of the structure is owned privately. Hewitt noted that the private space and public space are flip-flopped in Liberty Square, as compared to City Apartments – in Liberty Square, the private component is at the bottom of the building.

Clark stated that he was happy the project was now moving forward. He had concerns, however, about how the milestone timeline would be kept. He wondered what the impact would be of not keeping to the schedule and how that relates to the DDA’s 10-year plan. He noted that they were nine weeks behind schedule. [Based on the original Nov. 3, 2010 schedule for the vote, Clark was understating the delay by a few weeks. Queried by email, Clark joked to The Chronicle that this was perhaps the first time he'd ever been accused of understating something.]

Clark said he understood that hard work was being done to make up the time they were behind, but he worried that the bond issuance was scheduled to take place 12 days from then. He said he didn’t think that the DDA was ready for bonds to be issued. Pollay clarified that it’s the city that will be issuing the bonds, and that will not take place until the parking deck’s certificate of occupancy is issued. That’s when it becomes real, she said. And the city council has already authorized issuance of the bonds, she explained.

Clark moved on to the timeline item indicating that the construction documents are supposed to be 100% complete within three weeks. Pollay indicated that this part had been modified – construction specifications would be provided in early March and they would be able to approve any changes through June. Pollay indicated that Village Green is hoping to begin construction in July.

Clark then noted that the closing on the $3 million deal comes very close to the point when the city needs to finalize its annual budget. He expressed concern about the impact of a deal not going through on the city’s current budget. He allowed that the $3 million of proceeds from Village Green’s purchase of the parcel is slated to go into the fund that is paying for the new municipal center, which is nearing completion. But he noted that “money is money,” saying that a $3 million hole somewhere has to be plugged with something, which would leave a hole somewhere else. [The city's eventual strategy, if it becomes necessary due to the Village Green deal not going through, as reviewed in the background above, is to borrow the money in some form.]

Clark reiterated that he supported the project and said he hoped that Village Green would build the project. But he returned to his concern about the timeline not being met. He said the DDA kept moving things around in its 10-year financial plan, so he felt like he’d have a better idea of what the DDA’s 10-year plan will actually be in a month or two from now.

[If the Village Green project does not go through, it means that the DDA would be relieved of a $9 million obligation to make bond payments for the deck purchase. So Clark appeared to be putting the discussion in the general context of the still-unresolved parking contract negotiations between the city and the DDA. The city's budget planning currently assumes a $2 million payment from the DDA to the city that is not part of the current parking contract. As the negotiations have reached a critical point, some DDA board members have begun to express concerns about the DDA's ability to satisfy the city's desire to supplement its general fund. Some board members are also concerned about the DDA's own ability to complete specific projects they view as part of the DDA's mission.]

With respect to the Village Green timeline, Hewitt characterized it as the “city’s negotiating timeline, not the DDA’s timeline.” Any timing issue, Hewitt told Clark, is the city’s issue, not the DDA’s. Clark wondered if it weren’t the same issue. Hewitt ventured that the discussion seemed to be getting into a “larger realm,” and Clark replied that this was exactly his concern – that the larger issues were getting mixed into the discussion due to the compressed timeline.

Hewitt came back to the point that the DDA does not need to make any payments until the parking deck has a certificate of occupancy. That’s several years away, he said. Hewitt said that construction would typically be two years for something like this. As far as the larger issue of the city’s budget, he said, he didn’t feel it was their place to comment.

Russ Collins provided a way out of the conversation between Clark and Hewitt by telling Clark: “Point noted.” But he continued by saying, “The issues you’re raising don’t affect the material facts of this resolution.” It could affect the city’s cash flow, Collins allowed, which could in turn affect indirectly what the DDA was talking about.

Bob Guenzel sought clarification that it was a cash-flow issue and not a budget issue for the city. Clark indicated that it was a one-time payment for the sale of an asset. Guenzel supposed that the city had recorded the transaction as a receivable, but Clark said there was no actual purchase agreement yet. That is, Village Green has not yet executed their option. If there was already an agreement to purchase or Village Green had already purchased the land, Clark said he’d feel more comfortable about possibly needing to change the DDA’s budget, given that the city already has the $3 million budgeted.

Guenzel wrapped up the deliberations by saying, “As Russ said, it’s a point.”

Outcome: The board voted unanimously to approve the Village Green contract amendment. The city council will vote on the same amendment at its Feb. 7, 2011 meeting.

Communications, Committee Reports, Commentary

The board’s meeting included the usual range of reports from its standing committees and the downtown citizens advisory council. Every board meeting includes two opportunities for public commentary – one near the start of the meeting and the other at its conclusion.

Comm/Comm: Bricks

John Splitt reported out from the bricks part of the bricks and money committee, saying that concrete continued to be poured for the underground parking garage under construction on the city-owned Library Lot on South Fifth Avenue. A total of 3,000 cubic yards of concrete had been poured this month, Splitt reported. The largest mass pour of the project, he said, is due to take place in late February and will involve 5,000 cubic yards. The speed ramp on the east side of the garage is 80% complete, he reported, which will ease the construction workers access to the bottom of the construction pit.

The Fifth and Division streetscape improvement project has been shut down for the winter, but wiring of streetlights in connection with that project does continue, Splitt said.

He also announced that immediately following the meeting there would be a tour of potential different space for the DDA offices for anyone who was interested – next door at the City Center building, at the southwest corner of Huron and Fifth.

Comm/Comm: Money

Roger Hewitt reported on the second quarter financial picture for the period ending Dec. 31, 2010 or midway through the fiscal year. Highlights of Hewitt’s remarks included the fact that the DDA had received from the city nearly all of the taxes it captures through the TIF (tax increment financing) district, and those amounts are within 2% of what had been budgeted.

Hewitt also noted that reduced operational costs in the parking fund reflected the efforts of Republic Parking manager Mark Lyons to reduce costs. A drop in parking revenue compared to the budgeted amount, said Hewitt, reflected a delay from July to September in the implementation of a parking fee increase.

Hewitt also pointed out that the transfer into the parking maintenance fund will be less, because the DDA had requested of its parking structure engineering consultant, Carl Walker Inc., that time-sensitive priorities be identified. No critical maintenance would be delayed, he said. Only those activities that were more appearance-related – like painting, for example – would be delayed. Deck-coating or resurfacing, he said, would not be put off.

With respect to the quarterly parking figures, Hewitt concluded that usage continued to appear stable.

Comm/Comm: Partnerships

The partnerships committee meeting report was given by Russ Collins. Part of his report consisted of a report on the status of the DDA’s energy-saving grant program, a two-phase program that allows downtown businesses to conduct an energy audit, paid by the DDA, and to install improvements based on the audit, the cost of which is matched up to a $20,000 cap.

[At the partnerships meeting from the previous month, which The Chronicle attended, DDA executive director Susan Pollay stressed that the DDA had not spent more than was in the budget for the energy grant program – a conclusion that could have erroneously been reached by looking at the total that the DDA would spend, if every participant in the program installed improvements that resulted in the maximum $20,000 match, and if the DDA decided to match the expenditure. At the partnerships meeting, Pollay stressed that it was a "first in" program.]

Collins also reported that the PACE program, which the state legislature passed late last year, could be complementary to the DDA’s energy-saving grant program.

Collins also indicated that the DDA’s mutually beneficial committee had reported to the partnerships committee how the city council had reacted to the outcome of the DDA board retreat – when there’d been a board consensus that the percentage-of-gross figure the board wanted to consider as payment to the city was a few points lower than the city was hoping for. [Chronicle coverage: "Parking Money for City Budget Still Unclear"]

Collins also reported that there’d been discussion of the new role for the DDA in redeveloping downtown city-owned surface parking lots. Wendy Rampson, head of planning for the city of Ann Arbor, will be attending the next partnerships committee meeting – on Wednesday, Feb. 9 at 9 a.m. – to discuss how the new A2D2 design guidelines will be integrated into the city’s planning-related code. City staff has been asked to bring a map showing the specific parcels to be redeveloped. [At the council's Jan. 18, 2011 meeting, councilmembers deliberated on a resolution that would have articulated this DDA role in redevelopment of the surface lots. Some councilmembers mentioned the lack of a map identifying the parcels as one barrier to their adoption of the resolution – which was ultimately postponed. Chronicle coverage: "DDA-City Deal Stalls" and "Ann Arbor Hotel First to Get Design Review?"]

Comm/Comm: Economic Development and Communications – SPARK

Joan Lowenstein gave the report from the economic development and communications committee. At their meeting, Lowenstein reported, they’d reviewed existing communications efforts about the downtown and the DDA. That had established a context, she said, for exploring different kinds of communication that the DDA could pursue in partnership with others, or in identifying gaps that the DDA could fill.

She reported that Newcombe Clark had walked the committee through a plan from his current course of study at the UM business school, that had provided a good jumping off point for the discussion. A goal that the committee identified, said Lowenstein, is to focus communication on the many positive assets that downtown has to offer. So the DDA would need to identify its role in that communication. That could range from communicating about downtown assets to residents, visitors and employees, to communicating about the DDA itself.

Lowenstein said that Jennifer Owens, vice president of business development for Ann Arbor SPARK, would attend the next meeting of the committee on Feb. 23, 2011 to explore how SPARK and the DDA could align their efforts. [Committee meetings are open to the public and posted online on the DDA's calendar.]

John Mouat wondered what the impact on SPARK would be with key personnel departing for Lansing. He was referring Gov. Rick Snyder’s recent appointment of SPARK’s CEO Michael Finney and SPARK’s director of marketing and communications Elizabeth Parkinson to positions in the Michigan Economic Development Corp. (MEDC). Amy Cell SPARK’s vice president for talent enhancement, is also joining the MEDC.

Lowenstein said she felt that the SPARK positions would be replaced, and that it reflected greater interest in collaboration between the MEDC and SPARK, with perhaps some kind of “satellite MEDCs” being established. If anything, she concluded, SPARK’s role will increase rather than decrease. Bob Guenzel, who serves on SPARK’s board of directors, said that his understanding was that SPARK would be moving forward as before. Mayor John Hieftje, who also serves on SPARK’s board of directors, said there is an evolving discussion of the relationship between MEDC and various economic development groups like SPARK, and it was somewhat “in flux.” He said he had a lot of faith in Finney.

Comm/Comm: Transportation

Reporting out from the transportation committee was John Mouat, who said they’d spent their last meeting selecting items from the transportation demand management plan for discussion: (1) providing transportation and evening parking information for evening employees; (2) adding moped/motorcycle parking downtown; and (3) thinking of parking spaces as serving a variety of different uses, from electric vehicle spaces to taxi service.

Mouat also called the board’s attention to the committee’s work as it relates to the Ann Arbor Transportation Authority: the AATA’s 30-year transportation master planning effort; the Plymouth-State connector study; the possibility of making the downtown Blake Transit Center (BTC) on Fourth Avenue more of a multi-modal facility; and encouraging the use of the BTC as a hub for MegaBus, University of Michigan blue buses, Michigan Flyer, and Greyhound.

On a lighthearted note, Mouat reported on a conversation that an alternative transportation option, given the snowfall, might be dog sleds, which could, according to Susan Pollay, result in a need for barking structures. Collins ventured that the whole notion was a howling success.

Comm/Comm: Alley on the Edge

Bill Gross, property manager for 416 W. Huron, addressed the board during public commentary about a range of concerns related to the property – which sits just west of the railroad bridge and just east of the new HAWK traffic signal, across the street from the new YMCA building.

Huron Street runs east and west. This is the western edge of the DDA tax capture district. The view here is to the northeast, just west of the railroad tracks. From left to right: Ann Arbor School of Yoga, 416 W. Huron property, Delonis Center.

Some Chronicle readers may recognize Gross and the Huron Street property from the Art in the Barn holiday art show that Gross organizes in the yellow barn, located behind the painted gray brick building that fronts Huron Street.

Gross advised the board that he took care of the the property along the railroad tracks, which is actually the railroad’s responsibility – picking up trash and mowing the grass, he said. If he didn’t do it, nobody would, he told them. Referring to the walk-arounds in the downtown area that the board sometimes did, he asked them to tell him when they were coming – he’d make sure not to mow, so that they could see what it would look like if he didn’t take care of the property.

Gross also pointed out that the sidewalks along the street are in disrepair – they are tilted and exacerbate the standing water problems that are prevalent in the public alley between the 416 W. Huron building and the Ann Arbor School of Yoga building located just to the west.

Gross also raised concerns about behavior issues with people he said were residents of the Delonis Center homeless shelter, located slightly up the hill from the 416 W. Huron property, past the railroad bridge. He described an incident when someone was standing on the railroad track yelling and the response he received from the police when he called was that he was asked to keep an eye on that person.

[In a followup phone interview after the board meeting, Susan Pollay told The Chronicle that the alley was one of those that the DDA had not yet repaired – they'd done an inventory of alleys in the downtown area and had undertaken improvements in many of them to ensure that stormwater drains were reconstructed and that the downspouts from buildings fed properly into the stormwater drain system. The sidewalks, she said, had been slated to be repaired as part of Huron Street improvements that had been planned by the DDA.

Those improvements had originally been conceived after the "decade of parking structure repair" in the 1990s, when the DDA board had identified three key corridors as a next priority to focus on: Huron Street, Fifth Avenue and Division Street. Because Huron Street is a state trunk line, which requires coordination with the Michigan Dept. of Transportation (MDOT), it was treated separately, she said. The Fifth and Division streetscape improvement project – much of which was done this past summer, and which will be completed next spring – is the result of that strategy.

Where do the street and alley improvements stand as DDA projects? Huron Street improvements are still on the list of possible projects for the DDA to undertake. At the DDA's most recent retreat, board member Newcombe Clark ensured that Huron Street was one of the items board members could vote for during their dot-voting exercise. As part of that exercise, finishing the alley improvements received two board members' votes as short-term priorities.]

When board members began a back-and-forth with Gross, board chair Joan Lowenstein noted that it was not the board’s practice to engage in that kind of discussion, but she felt that some leeway was warranted.

Mayor John Hieftje suggested that Gross take up the behavior issues with the Delonis Center staff. Gross said he’d gotten only lip service from the shelter, but also that it’s difficult for shelter staff to see down the hill past the railroad bridge to the property he manages.

Russ Collins suggested that it was the DDA staff – not the board – that would be in a better position to address Gross’ concerns.

Clark then stated that he was biased because his mother owns the Ann Arbor School of Yoga, immediately adjacent to the 416 W. Huron property – the two buildings share the alley in question. But he went on to point out that the behavioral issues are difficult to address without officers assigned to a particular beat – Clark has often advocated for exploring the possibility of bringing back police beat patrols to the downtown area. He described how the alley flooding and the sidewalk improvements were part of projects that the DDA had planned for its district. “It’s still our district,” he pointed out. Board approval was necessary in order to finish those projects, he observed.

And that is the reason Gross was there before the board, Clark said: Gross had come to him and Clark had told him to come address the board. “The buck has stopped with us at this point. … We can choose in our priorities whether or not we want to address this.”

Comm/Comm: Downtown Citizens Advisory Council – Monroe Street

Ray Detter reported out from the previous evening’s downtown citizens advisory council meeting that Richard DeVarti, owner of Dominick’s on Monroe Street, had attended the meeting along with his brother Dave, a former DDA board member. They were again concerned about the possibility of the city allowing the University of Michigan to absorb a section of Monroe Street into the law school campus. Detter said the CAC saw no benefit to the city in allowing that move, citing the loss of street parking, not just for Dominick’s but also for the multi-family residential units in the area. Detter said it would be a disaster for Dominick’s business. [Previous Chronicle coverage: "UM Pitches Plan to Close Monroe Street" and "Expansion of Campus onto Monroe Street?"]

Comm/Comm: Streetlight Outage Reporting, Greenway

Ray Fullerton addressed the board on the subject of reporting streetlight outages. He noted that it is important for residents to report them, because the city itself only does an annual inspection and it could take as long as a year for a streetlight to get replaced.

Fullerton also noted that in connection with the current Parks & Recreation Open Space (PROS) plan adoption process, it had been reported that the DDA felt the possibilities for extending a greenway southward towards the UM athletic campus were not as great as in the other direction. He said that there was definitely the possibility of pathways to the south.

Comm/Comm: Downtown Marketing Task Force

Mayor John Hieftje said the downtown marketing task force, which had been meeting for a number of years, is currently on hiatus. The task force meetings are an opportunity to bring together members of the downtown business associations, he said, along with councilmembers. He noted that Margie Teall (Ward 4), Tony Derezinski (Ward 2) as well as Carsten Hohnke (Ward 5) had attended the task force meetings regularly along with him, the mayor – Hieftje pointed out that the name of the task force is actually the Mayor’s Downtown Marketing Task Force and has been around for a very long time.

They’d been thinking about how to recast the task force, possibly reducing the frequency of meetings to a quarterly basis. He made a pitch to DDA board members to attend the task force meetings, saying that there are interesting conversations that take place between people who are actually doing things. Hieftje said that while Susan Pollay, the DDA’s executive director, was nearly always present at the task force meetings, he felt the task force’s effectiveness was limited due to the lack of attendance from board members. It could be an enlightening conversation, he concluded.

Comm/Comm: Comments on Borders Clarified

Mayor John Hieftje announced that he had been quoted in the media a couple of weeks ago when he’d been asked by a couple of different news outlets about Borders Group, the Ann Arbor-based bookstore chain. Borders, he continued, was a concern due to reports of a possible bankruptcy and what might happen in the wake of that. [The mayor was quoted in a Jan. 9, 2011 Crain's Detroit Business article by Daniel Duggan as follows: "If the company were to fold altogether, the biggest blow to the city would be the big hole in the downtown," Hieftje said. "While it would be disappointing, the downtown market has been hot and I wouldn't be surprised to see that retail space snapped up."]

After he was quoted, the mayor reported, he had an appointment with the person who handled Borders’ real estate, and they had both acknowledged that it was unlikely that Borders would close its stores. If Borders did close stores, then the downtown Ann Arbor store would be one of the last to close, Hieftje ventured. Hieftje continued by saying that the person he’d talked with was opening up channels to explore ways to fill the retail space if the need came up.

One of the principle concerns that had been expressed, Hieftje said, was a perceived lack of parking. What they’d heard from other retailers is that it’s a great spot, but they wondered if there was sufficient parking. Hieftje went on to say that he’d pointed out that the new underground parking garage under construction on South Fifth Avenue would provide additional spaces, and that the person he’d spoken with was happy to hear that. The last thing he’d like to see, concluded Hieftje, is for Borders to move.

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

Absent: Sandi Smith, Leah Gunn

Next board meeting: Noon on Wednesday, March 2, 2011 at the DDA offices, 150 S. Fifth Ave., Suite 301. [confirm date]

Renee Wolf, who suffers from multiple sclerosis, spoke against the proposed medical marijuana moratorium: "Please don't take away my medicine – that's all I ask." (Photos by the writer.)

The measure as initially drafted by city attorney Stephen Postema would have halted all dispensing and growing of medical marijuana in the city. The moratorium came in response to the operation of some dispensaries and cultivation of marijuana in the city after the Michigan Medical Marijuana Act of 2008 was approved by Michigan voters.

In 2004, Postema had argued that the city’s charter amendment, which allows medical uses of marijuana and was approved by voters that year, was not enforceable, and said that people would continue to be prosecuted as before.

Several of the attendees addressed the council during public commentary, all opposing the moratorium. During deliberations, councilmembers made significant amendments to Postema’s proposal that took off some of its harsher edges. Amendments to Postema’s moratorium included a specific exemption for patients and caregivers, a grandfathering-in of existing facilities in the city and a reduction in the length of moratorium from 180 to 120 days. The milder version of the measure, when unanimously approved, was met with applause from the audience.

In other significant business, the council: approved the site plan for a new downtown residential development, Zaragon Place 2; authorized an extension on Village Green’s purchase option agreement for the First and Washington parcel where the City Apartments PUD is planned; gave initial first-reading approval to a ban on placement of couches on porches and other outdoor environments; and approved a change to the site plan approval process that replaces definite deadlines with a standard of “reasonable time.”

Mayor John Hieftje also placed recently-retired county administrator Bob Guenzel’s name before the council as a nomination to the Ann Arbor Downtown Development Authority board. He clarified that Guenzel would be replacing Jennifer S. Hall, whose term expired on July 31.

Council typically meets on Mondays, but moved its meeting to Thursday to accommodate the Aug. 3 primary election. All council incumbents who were running for reelection won their races.

Historical Reflection on Couches and Medical Marijuana

As a prelude to this meeting report, we pause to reflect on what kind of business the Ann Arbor city council handled six years ago. The look back into recent history is prompted in part by the remarks of Bob Snyder during public commentary at Thursday’s council meeting. Snyder spoke in favor of the “couch ban” ordinance considered by the council.

As Snyder pointed out, the council had considered a similar ordinance back in August 2004. But they’d tabled it, which meant that after six months, with no councilmember willing to take it up off the table for action, the measure died. Snyder had also spoken in favor of the ordinance at the city council’s Aug. 16, 2004 meeting. At that meeting, he was joined in his support by Lou Glorie, who lost the Ward 5 Democratic primary last Tuesday to incumbent Carsten Hohnke.

The Aug. 16, 2004 tabling had come after a postponement of the measure from the July 19, 2004 meeting. At the earlier July meeting, when the council postponed the “couch ban” ordinance, the council had also considered and approved some language for the Nov. 2, 2004 ballot. That ballot language was for the city charter amendment on medical marijuana:

Shall Section 16.2 of the Charter be amended to require waiver of fines and costs upon proof that the defendant has a recommendation of a physician, practitioner or other qualified health professional to use or provide marijuana or cannabis for medical treatment; to prohibit Ann Arbor police officers from complaining, and the city attorney from referring any complaint, of the possession, use, giving away, sale or cultivation of marijuana upon proof of such recommendation; to prohibit other punitive or rehabilitative measures; to establish an affirmative defense; and to set the fine for third and subsequent such offenses at $100.00?

That ballot proposal amending the city charter to include the medical marijuana provision passed three months later with 74% of the vote.

On Thursday, the topics of porch couches and medical marijuana were juxtaposed in the same meeting just as they’d been six years earlier.

Medical Marijuana Moratorium

Added on Aug. 4, 2010 to the council’s Thursday, Aug. 5 agenda was a resolution drafted by city attorney Stephen Postema, which called for a citywide moratorium on the use of facilities in the city for growing or dispensing medical marijuana.

The council usually meets on Mondays, but due to the Tuesday primary, the meeting had been shifted to Thursday. The measure was sponsored by Marcia Higgins (Ward 4), Margie Teall (Ward 4), Stephen Rapundalo (Ward 2) and Christopher Taylor (Ward 3).

Marijuana: Brief Ann Arbor Overview

In September 1972, the Ann Arbor city council enacted an ordinance that reduced the penalty for possession of less than two ounces of marijuana to a $5 fine. The ensuing controversy ultimately resulted in the repeal of the ordinance by the city council in  June 1973.

But voters then passed a charter amendment in April 1974 that restored the $5 fine. In addition, the new section 16.2 of the city charter stipulated that no city police officer “shall complain of the possession, control, use, giving away, or sale of marijuana or cannabis to any other authority except the Ann Arbor city attorney; and the city attorney shall not refer any said complaint to any other authority for prosecution.”

In 1983, voters rejected an attempted repeal of the charter section. However, in 1990 voters approved an increase in the fine amount from $5 to $25 for a first offense, $50 for a second offense, and $100 for more offenses.

Then in 2004, a city charter amendment – added to section 16.2 – was approved by a 74% margin that allowed growing and use of marijuana for medical purposes.

In August 2010, the city’s charter section 16.2 reads as follows:

Restrictions of Marijuana
SECTION 16.2.
(a) No person shall possess, control, use, give away, or sell marijuana or cannabis, which is defined as all parts of the plant cannabis sativa L., whether growing or not; its seeds or resin; and every compound, manufacture, salt, derivative, mixture, or preparation of the above, unless such possession, control, use, or sale is pursuant to a license or prescription as provided in Public Act 196 of 1971, as amended. This definition does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compounds, manufacture, sale, derivative, mixture or preparation of the mature stalks, except the resin extracted therefrom, fiber, oil or cake, or the sterilized seed of the plant which is incapable of germination.

(b) Violations of this section shall be civil infractions. Persons convicted of violating this section shall be fined $25.00 for the first offense, $50.00 for the second offense, $100.00 for the third or subsequent offense and no incarceration, probation, nor any other punitive or rehabilitative measure shall be imposed. Fines and all other costs shall be waived upon proof that the defendant is recommended by a physician, practitioner or other qualified health professional to use or provide the marijuana or cannabis for medical treatment. The court may waive all or part of the fine upon proof that the defendant attended a substance abuse program. It is an affirmative defense to a prosecution under this section that the use or intended use of the marijuana or cannabis relieves, or has the potential to relieve, the pain, disability, discomfort or other adverse symptoms of illness or medical treatment, or restores, maintains or improves, or has the potential to restore, maintain or improve, the health or medical quality of life of the user or intended user or users of the marijuana or cannabis. Requirements of this subjection shall not be construed to exclude the assertion of other defenses. (Amended by election of April 2, 1990 and November 2, 2004)

(c) In all arrests and prosecutions for violations of this section, appearance tickets and the relevant procedures set forth in Public Act 147 of 1968, as amended, shall be used.

(d) No Ann Arbor police officer, or his or her agent, shall complain of the possession, control, use, giving away, or sale of marijuana or cannabis to any other authority except the Ann Arbor city attorney; and the city attorney shall not refer any said complaint to any other authority for prosecution.

(e) No Ann Arbor police officer, or his or her agent, shall complain and the city attorney shall not refer for prosecution any complaint, of the possession, control, use, giving away, sale or cultivation of marijuana or cannabis upon proof that the defendant is recommended by a physician, practitioner or other qualified health professional to use or provide the marijuana or cannabis for medical treatment. (Amended by election of November 2, 2004)

(f) Should the State of Michigan enact lesser penalties than that set forth in subsection (b) above, or entirely repeal penalties for the possession, control, use, giving away, or sale of marijuana or cannabis, then this section, or the relevant portions thereof, shall be null and void. (Amended by election of November 2, 2004)

(g) The people of the City of Ann Arbor specifically determine that the provisions herein contained concerning marijuana or cannabis are necessary to serve the local purposes of providing just and equitable legal treatment of the citizens of this community, and in particular of the youth of this community present as university students or otherwise; and to provide for the public peace and safety by preserving the respect of such citizens for the law and law enforcement agencies of the City. (Amended by election of November 2, 2004)
(Section 16.2 added by election of April 2, 1974)

Marijuana: City Attorney Postema’s Anti-Pot Stance (2004)

In 2004, when the city’s voters approved the medical marijuana charter provision, Ann Arbor city attorney Stephen Postema was vocal about his view that the provision approved by the voters was not valid. In a Nov. 4 2004 Ann Arbor News article, Tracy Davis reported:

Although the initiative was legally and appropriately placed on the ballot after a petition drive, [Stephen] Postema said 27-year-old case law dictates that city officials can refer complaints for prosecution under state law even though it would be contrary to the city’s new charter language.

In a 1977 decision involving a case in Ypsilanti, the state appeals court ruled that city officials weren’t prohibited from referring marijuana cases for prosecution under state law, despite a city ordinance that said they couldn’t refer such cases to the Washtenaw County prosecutor.

Based on that case, Postema said, his office and police can’t be bound by charter amendment prohibitions that conflict with state and federal law. Those laws, he said, will continue to govern marijuana arrests in Ann Arbor.

Postema’s stance resulted in a dispute with one of the initiators of the ballot measure, Chuck Ream, who was then also Scio Township trustee. The dispute was resolved when Postema acknowledged in writing that the attorney’s office understood the compassionate concerns underlying the voter-approved charter amendment. Wrote Davis in a April 1, 2005 News article:

Chuck Ream, a Scio Township trustee, was angered by Postema ‘s comments after the amendment to decriminalize marijuana use when recommended by a physician passed with 74 percent of the vote, but said he was happy with the outcome of a January meeting with Postema and other city officials.

“My quarrel with him is over,” said Ream this week.

After the election, Postema said 27-year-old case law dictates that city officials can refer complaints for prosecution under state law even though it would be contrary to the city’s new charter language. Police Chief Dan Oates also said in a written statement he had directed his officers to continue enforcement of all marijuana sale and possession offenses as they did before the vote.

Ream praised what he called compromise language written by Postema after the January meeting about the city’s stance on medical marijuana.

The language, which was in a letter to a reporter for a local publication, said that city police and the city attorney’s office retain some discretion in prosecuting marijuana cases.

“The very nature of this discretion is that each case is decided on its own facts,” wrote Postema. “However, the compassionate concerns underlying the charter amendment are concerns that are certainly understood by the police and the city attorney’s office as this discretion is exercised.”

Marijuana: Michigan Medical Marijuana Act (2008)

In 2008, Michigan voters approved the Michigan Medical Marijuana Initiative with 63% of the vote. In Ann Arbor, support was significantly higher, at 71%. The Michigan Medical Marijuana Act (MMMA) provides for a registry system for patients and caregivers for the cultivation and possession of medical marijuana.

In February 2010, Chuck Ream – who’d disputed city attorney Stephen Postema’s view of the 2004 city charter amendment – appeared before the city council to suggest that they take a proactive approach to regulating marijuana dispensaries in the city, which would emerge, he cautioned, as a consequence of the MMMA. From The Chronicle’s report of the city council’s Feb. 1, 2010 meeting:

Chuck Ream: Ream spoke to the council about therapeutic cannabis. He reminded them that in 2004, more than 74% of Ann Arbor voters had voted for medical marijuana. He described it not as a victory or a mandate but as “clear marching orders.” He suggested that six centers be established as dispensaries and noted that the city charter already enabled it. He said that he had a formal legal opinion written by a lawyer that stated it was legal. He had a draft law that they could adopt, he said. Ream suggested that establishing six large centers that would be well run was a better alternative to dispensaries showing up on every street corner.

Marijuana: Public Commentary

The public commentary session at Thursday’s meeting was one of the more animated in The Chronicle’s memory. Speakers’ remarks were met with long and enthusiastic applause – tolerated by the council during public commentary, but not during public hearings.

Just before The Chronicle clicked the shutter, Chuck Ream folded up his sign indicating in red the number 74, which is the percentage of Ann Arbor voters who supported the medical marijuana city charter amendment.

Chuck Ream was also on hand Thursday night to address the city council on Postema’s proposed moratorium, which came after several facilities for growing and dispensing marijuana had appeared in the city. Ream alluded to his previous appearance before the council several months earlier, when he’d made a specific suggestion that would have regulated dispensaries. He characterized the proposed moratorium as a “direct assault on democracy.”

Gershom Avery asked who the city attorney was, then said, “Do you get elected?” When the indication was no, city attorney Postema is not elected to his post, Avery told the council, “He’s not your friend.” Avery explained that Postema was setting the councilmembers up to be the “fall guys” – they would be the ones who would suffer the consequences of voter discontent with their actions. He called the decision to consider the moratorium a violation of the Michigan Open Meetings Act and said that the measure violated the Right to Farm Act. The only way a moratorium could exist, he said, was in a context of fraud. He alluded to a possible lawsuit against the federal government by Americans for Safe Access.

Kirk Reid declared that he wished he could say it was an honor to address the council, but it was not. He ticked through a number of different statistics on deaths attributable to alcohol, cigarettes and other pharmaceuticals. Marijuana, he contended, has not killed anyone. He noted that there are 102 bars in Ann Arbor and 24 pharmacies – CVS, RiteAid, Kroger and the like. There are 24 places in Ann Arbor to buy OxyContin, he said, and he wants 24 places where he can buy medical marijuana. He stressed that they were patients: “We’re not dirty hippies – we’re the community that voted you in; we’ll vote you out.”

Reid also pointed out the positive economic impact of marijuana dispensaries, addressing his remarks to Stephen Rapundalo (Ward 2), and giving the Ward 2 councilmember’s name a novel pronunciation – with apology: /rap-a-dun-del/.

Anthony Fried began by alluding to the boisterous applause that had met the previous speaker’s remarks, saying “Wow. I bet you guys feel like you opened a can of worms.” He said he’d helped many people open dispensaries, and warned that lawsuits would come as a result of the moratorium. He told the council that they would all get sick sometime, too, and that he hoped they never had to see a sick child suffer. He concluded by saying, “Shame on every single one of you. This is not the way this country works, and it’s not the way the city works.”

Renee Wolf, who told the council she’d had multiple sclerosis for 32 years, was helped to the microphone by several others. But she stood unassisted at the podium. She said she’d been told she’d need to rely on a wheelchair, but she was not in a wheelchair – because she used medical marijuana. She said she’d had to fight for her life and said that life was too short to sweat the small stuff. “Please don’t take away my medicine – that’s all I ask. And god bless all of you.”

At the podium is Brandy Zink, who spoke in opposition to the moratorium on medical marijuana growing and dispensing. Around 75 people filled the council chambers on Thursday.

Brandy Zink identified herself as a legal medical marijuana patient – she’s an epilepsy patient and an ovarian cancer survivor. Her doctor recommends medical marijuana, she said, and that’s the therapy that works for her. She suggested that instead of enacting a moratorium, the council should establish legislation to permit and license medical cannabis dispensing collectives. She also identified herself as an ambassador of Americans for Safe Access.

She noted Ann Arbor’s long history of tolerance towards marijuana use and suggested that there was surely not some new threat to health, safety and welfare. It places undue burden on the sick, she said. She argued against enacting stricter legislation on medical marijuana than regulations on gun vendors, adult entertainment vendors, or pharmacies. She pointed to the economic benefit of marijuana dispensaries, and asked why the council would enact a moratorium in the midst of a recession.

Although Matthew Abel was signed up to speak, a colleague of his attempted to address the council in his place, but that is not permitted under the council’s rules. The mayor then invited the first alternate on the list, who was Michael Mcleod, a medical marijuana patient holding a master’s degree from the University of Michigan School of Public Health. He said he is one of the founders of the Ann Arbor Medical Marijuana Patients Collective – they hold public meetings once a month. He said they had approached the city on numerous occasions, but the city had not responded or worked with them. He said he was embarrassed to be a resident of a city that would pass a moratorium that would deny patients their right to obtain or grow their medicine. On behalf of the collective, he asked that the council reject the moratorium as an attack against patients.

Marijuana: Theme of Council Deliberations – Lack of Notice, Open Meetings

Some of the speakers alluded explicitly or implicitly to the lack of prior public notification that the council would be considering the moratorium. For example, Chuck Ream stated that there were city councilmembers who didn’t know it was going to be on the agenda until a few days ago. Gershom Avery went as far as to contend that there had been an Open Meetings Act violation.

During deliberations, Carsten Hohnke (Ward 5) confirmed Ream’s contention, by saying that he’d not been aware the measure would be coming forward. Stephen Rapundalo (Ward 2) responded to Hohnke’s statement by saying that at a council meeting, the city attorney had been given a clear directive to develop the moratorium language and that everyone had been in the room and heard it. Margie Teall (Ward 4) indicated some awareness that something would be coming forward, but said that she’d not been aware it would be that soon.

The late addition to the agenda was the basis of an attempt by Sabra Briere (Ward 2) to get the measure postponed, citing a council rule that stipulates that councilmembers may add agenda items at any time, but “will use best efforts to do so prior to the Friday before the next Council meeting.” The item appeared on Wednesday – four business days, or six calendar days, later than the council rules contemplate as reflecting best efforts.

With no recollection of any discussion by councilmembers at any of their regular meetings, work sessions, or caucus gatherings, The Chronicle asked Rapundalo after the moratorium vote, during a break in the meeting, which meeting he had meant when he indicated the city attorney had been given direction on the matter. He indicated that the direction had come during the council’s closed session during the July 19, 2010 meeting.

The Chronicle has learned that the justification for that closed session was not based on discussion of a legislative strategy for handling marijuana dispensaries, but rather on settlement strategies for pending litigation on an entirely separate matter. [Note: While The Chronicle reported the basis for the closed session in good faith based on a credible source inside city hall, that source subsequently has indicated uncertainty about the veracity of the claim.]

Closed sessions under the Michigan Open Meeting Act are allowed only in very narrow circumstances. Based on preliminary Chronicle analysis of relevant case law on closed sessions, it appears that the council’s deliberations on a course of action for legislative action on the medical marijuana question should have taken place in an open session of the council, lending credence to Avery’s claim of an OMA violation. Had that discussion taken place during the open session of the meeting, the public at large would have had more than one day’s notice that the council was contemplating action on the subject.

In his remarks on the lack of public notice and timing, Postema contended that the resolution served the purpose of kicking off the discussion. He contended that he had spent a lot of time sitting down and talking with people, in particular the legal representatives of some of the people in the room. Therefore, Postema claimed, there had been no “end around” the public.

He contended that the attorneys he’d spoken with, naming John Shea specifically, recognized the legal issues that were the basis of the moratorium.

Marijuana: Theme of Council Deliberations – Zoning/Safety as Legal Basis

The resolution outlining the moratorium cites the city’s zoning code as a basis for contemplating the regulation of marijuana dispensing and cultivation facilities. The city’s zoning code generally prohibits uses of land that are not listed out explicitly in a particular zoning classification [emphasis added]:

Chapter 55 Article 2
5:6.  Establishment of use regulations.
(1)   No structure or land shall be used or occupied and no structure shall be erected, constructed, moved or altered, except in conformity with the regulations specified for the zoning district in which it is located. Uses not expressly permitted are prohibited.

Postema’s position, as reflected in the “Whereas” clauses of the resolution he authored, is first that marijuana cultivation and dispensing is a specific land use, and second that this land use was not contemplated when the zoning classifications were developed. If these activities are, in fact, a separate land use, then by dint of not being expressly permitted anywhere in the zoning code, they are not permitted anywhere in the city. But if these otherwise legal activities are not permitted anywhere in the city due to zoning restrictions, then the city would violate the Michigan Zoning Enabling Act 110 of 2006 [emphasis added].

125.3207 Zoning ordinance or decision; effect as prohibiting establishment of land use.
Sec. 207. A zoning ordinance or zoning decision shall not have the effect of totally prohibiting the establishment of a land use within a local unit of government in the presence of a demonstrated need for that land use within either that local unit of government or the surrounding area within the state, unless a location within the local unit of government does not exist where the use may be appropriately located or the use is unlawful.

The moratorium proposed by Postema includes a direction to city planning staff to address the activity of dispensing and cultivating marijuana with appropriate zoning regulations, including how far apart dispensing facilities can be located [emphasis added]:

RESOLVED, That City Council directs City staff and the Planning Commission to study and make specific recommendations for ordinance amendments that restrict facilities for dispensing marihuana to appropriate zoning districts along with spacing requirements, and to also regulate such use in residential districts;

Spacing requirements on land use in urban settings are typically associated with adult entertainment facilities – strip clubs and the like. For example, the city of Ann Arbor’s regulation prohibits the clustering of adult entertainment businesses as follows:

(2) Locations of adult entertainment businesses.  An adult entertainment business may be located in the City only in accordance with the following restrictions:

[...]

(c) No such business shall be established within 700 feet of another adult entertainment business.

This clustering of medical marijuana was mentioned by Postema in the context of threats to health, safety and welfare. When asked point blank by Carsten Hohnke (Ward 5) what the specific concern was with health, safety and welfare that motivated the moratorium, Postema offered only the issue of dispensaries – as opposed to patients and caregivers – with their potential to cluster in a single location. Postema identified the issue as involving a determination about where such businesses should be located.

In light of Postema’s response, which did not identify a specific threat to the public’s health, safety and welfare, Hohnke asked one of the resolution’s sponsors to respond to his question. Stephen Rapundalo (Ward 2) said that the question was this: Do we want these facilities in single-family neighborhoods? Margie Teall (Ward 4) also confirmed that this was her concern as well, saying that the impetus for getting the discussion going was activity in the Packard/Iroquois area, near a residential neighborhood.

Sandi Smith (Ward 1) and Hohnke drew out the fact that dispensaries are commercial activities and are therefore subject to commercial zoning. As far as their operation in residential neighborhoods, they would be regulated by the same zoning regulations that govern home businesses. For example, Ann Arbor’s residential zoning provides for restrictions on home businesses:

[...] 5.   The nature of the home occupation shall not generate more than 10 business-related vehicle trips in any 1 day in the vicinity of the home occupation, and any need for parking generated by the conduct of such home occupation shall be provided offstreet in accordance with the offstreet parking requirements.

6.   No equipment or process shall be used in such home occupation which creates noise, dust, vibration, glare, fumes, odors or electrical interference detectable to the normal senses beyond the property boundary.

7.   The following are typical examples of uses which often can be conducted within the limits of these restrictions and thereby qualify as home occupations. Uses which may qualify as “home occupations” are not limited to those named in this paragraph (nor does the listing of a use in this paragraph automatically qualify it as a home occupation); accountant, architect, artist, author, consultant, dressmaking, individual stringed instrument instruction, individual tutoring, millinery, preserving and home cooking.

8.   The following uses are not permitted as home occupations if conducted as a person’s principal occupation and the person’s dwelling is used as the principal place of business: vehicle repair or painting, dental office and medical office.

At one point, chief of police Barnett Jones was called to the podium to comment on safety concerns. He indicated that there had been no complaints reported to his department.

Marijuana: Council Deliberations – 120-day Amendment

The initial moratorium had a duration of 180 days. During deliberations, Sandi Smith (Ward 1) noted that the MMA had been passed in 2008, and that the city had had the opportunity to consider how how to proceed. She indicated that she was troubled that the city was using a moratorium, when Traverse City had been able to go further and faster. She suggested moving to a 90-day time frame.

City attorney Stephen Postema objected to that short a period, contending that a full discussion takes more than 90 days. Stephen Rapundalo (Ward 2) focused on the practical consideration of who would be doing the work and wondered if the city’s planning staff could do the job in 90 days. Smith responded by saying that there were a number of different models the city could use, so it was not as if the staff would be starting with a blank slate. She said she felt that 90 days was doable.

Asked by mayor John Hieftje to comment as the city council’s representative to the planning commission, Tony Derezinski (Ward 2) said that currently the commission is working on the R4C study as well as the Washtenaw Avenue corridor study.

When Rapundalo asked his question about planning staff work load, city administrator Roger Fraser left the table to confer with planning staff seated in the audience – Jill Thacher and Alexis DiLeo, as well as community services area administrator Sumedh Bahl. Their assessment, based on the fact that a specific procedure is used to handle projects like this – which includes the ordinance review committee – was that 90 days was not doable, but that 120 days would be. The 120-day change was accepted as a friendly amendment.

Jill Thacher will head up the effort on a staff level.

Marijuana: Council Deliberations – Amendment Excluding Patients/Caregivers

An amendment offered by Christopher Taylor (Ward 3) made clear that the moratorium would allow individual patients and caregivers to continue to use and provide medical marijuana:

RESOLVED, That this moratorium does not apply to the following:

A dwelling unit (as defined by the Zoning Ordinance) where a qualifying patient under the Act resides and is cultivating up to the maximum number of marihuana plants permitted by the Act for personal use or possesses up to the maximum amount of marihuana permitted by the Act for personal use.

A building or structure (as defined by the Zoning Ordinance) other than a dwelling unit where no more than one qualifying patient under the Act is cultivating up to the maximum number of marihuana plants permitted by the Act for personal use or possesses up to the maximum amount of marihuana permitted by the Act for personal use.

A dwelling unit or other building or structure where no more than one primary caregiver under the Act is cultivating up to the maximum number of marihuana plants permitted by the Act for assisting a qualifying patient or possesses up to the maximum amount of marihuana permitted by the Act for assisting a qualifying patient.

The amendment was accepted as friendly to the original resolution.

Marijuana: Council Deliberations – Amendment Grandfathering-In

Sabra Briere (Ward 1) focused throughout the deliberations on who would be affected by the moratorium. She noted that moratoria did not typically look backward at businesses already established. She was concerned, she said, that patients that had come to rely on dispensaries would be able to continue. Her remarks were met with applause from the audience.

City attorney Stephen Postema objected to the idea that existing businesses should be excluded from the moratorium, saying that they could be argued to be non-conforming with existing zoning – the city council needs to provide direction, he said.

Briere stated that it’s “not about druggies or stoners” but rather about medical care. Putting people in limbo is not acceptable, she said.

Christopher Taylor (Ward 3) indicated that he felt the larger conversation about zoning that would take place during the moratorium might put facilities that are currently in place in peril, because they would no longer be authorized to continue at their present location.

The amendment that the council eventually approved inserted language that for the purposes of the moratorium allows existing facilities to continue [added language in italics]:

RESOLVED, That City Council hereby imposes a temporary moratorium prohibiting the initiation or expansion of the use of any property in the City as a facility for dispensing marihuana for medical and any other purpose and for cultivating marihuana plants, …

Taylor cautioned against the expectation that there is going to be a grandfathering-in of existing operations once the moratorium is over and the city has settled on an approach to the issue.

Outcome: The amendment was approved, with dissent from Rapundalo

Marijuana: Council Deliberations – Amendment Striking Council Hearings

One of the clauses in the resolution established a process by which the city council would hear grievances from parties who felt that they were economically harmed by the moratorium. The council could grant such parties relief from the moratorium.

Sandi Smith (Ward 1) feared that the process held a danger of getting bogged down. After the existing facilities were amended out of the resolution, Christopher Taylor (Ward 3) suggested that it made sense to remove the clause, as it no longer served any purpose. Stephen Postema, the city attorney, argued against its removal, saying that one could not anticipate the range of various grievances that people might have.

Mayor John Hieftje agreed that there were no standards included by which the council was supposed to judge those cases. Sabra Briere (Ward 1) agreed that it could place an undue burden on the council. Tony Derezinski (Ward 2) said he liked the clause as a “catch-all contingency.”

The stricken clause was as follows:

RESOLVED, That any aggrieved person shall be entitled to receive a hearing by the City Council to show that the temporary moratorium pronounced in this resolution will result in the preclusion of any viable economic use of their property, or will otherwise violate applicable provisions of State or Federal law, and if the City Council finds that an aggrieved petitioner or applicant makes such a showing, the City Council may grant relief from the moratorium to the degree necessary to cure the violation; and

Outcome: The amendment was approved, with dissent from Derezinski.

Marijuana: Council Deliberations – Postponement

Carsten Hohnke (Ward 5) indicated he wanted to postpone the resolution because of the late agenda addition. He rejected the idea that the process had been nefarious, but that there had been little awareness that the item would be coming before the council. He said that while he was aware of the discussion among staff, he didn’t think the item would appear on the agenda one day before.

By way of explaining why the item had appeared late on the agenda, city attorney Stephen Postema shifted responsibility to the sponsoring councilmembers, saying that after it was drafted, they had wanted it to appear on the agenda as soon as possible.

Margie Teall (Ward 4) agreed with Hohnke’s sentiments, saying that she’d thought about moving for a postponement herself. She said she did not think it would be appearing on the agenda that late. Now that it had been discussed, she said, she didn’t feel like she wanted to push it beyond 120 days – she wanted to get through the 120 days as soon as possible. She said, however, that she was on the fence about a postponement.

Sandi Smith (Ward 1) agreed with the sentiments of one of the speakers, saying that the council had opened up a can of worms and she’d prefer to finish the matter that night. Christopher Taylor (Ward 3) argued against a postponement, saying that it might have utility if the moratorium affected individuals. Tony Derezinski (Ward 2) characterized a postponement as “kicking the can down the road.” Stephen Rapundalo (Ward 2) indicated that it had been discussed at the last council meeting and that everyone should have known it was coming. Sabra Briere (Ward 1) said that by rights, according to council’s rules on agenda additions, it should be postponed.

Outcome: The council voted against postponement. Those in favor of postponement were Hohnke, Anglin, Hieftje, Briere. Voting against postponement were Teall, Smith, Derezinski, Rapundalo and Taylor.

Marijuana: Council Deliberations – Merits of Main Motion

The council’s discussion ranged over a variety of concerns, some reflected in the deliberations on specific amendments. Other concerns were of a more general nature.

In trying to explain concerns he had about the way that medical marijuana facilities might evolve in the city, Christopher Taylor (Ward 3) suggested a scenario where a collective purchased a property with a lot next door and established that as their growing field. [Note: The state law requires growing facilities to be closed and locked.] Though he seemed to recognize that the scenario he’d sketched was unlikely, Taylor contended that the city regulates a great number of things as a community and they need an appropriate structure to regulate medical marijuana.

Carsten Hohnke (Ward 5) cautioned that a moratorium was a significant action to take. He said that his sense was that it was simply a matter of people not wanting to see this activity in their neighborhood, an activity that is permitted by state law.

At that, Taylor claimed that it’s not clear that the activity is permitted by state law. Larger commercial enterprises are not contemplated by the state law, Taylor said, and that is our problem, he concluded. “Where is that our problem?” Hohnke shot back.

Taylor tried to respond by saying that the question is whether the city provides some structure to the activity, as it does with pharmacies and bars, which are regulated. We organize our community, he said, with a great mix of values and we have to somehow live together.

City attorney Stephen Postema indicated that he’d been advised of a 20,000-square-foot facility that might begin operations in the city.

Sabra Briere (Ward 1) indicated that there were a whole host of unknowns. She said she could understand someone setting up grow lights in a bedroom. But she said she doesn’t know what a facility is. She doesn’t know what business model they follow.

Margie Teall (Ward 4) indicated that she understood the concerns that people had and that the community would get answers to those concerns through the process that the resolution mandated. Stephen Rapundalo (Ward 2) said he agreed with Teall. The point of the moratorium, he said, is that they don’t have answers, and they should take the time to do due diligence.

Mike Anglin (Ward 5) wondered if going through the planning commission and the planning staff was the right process to follow. Postema indicated that the zoning aspect of the problem would go through planning commission, but said that zoning might not be enough.

Mayor John Hieftje raised the specter of reverting to previous federal policies two years from now. Postema indicated that that could well happen and that might make people unhappy. But he said that he was not there to enforce federal law. Tony Derezinski (Ward 2) indicated that at a recent meeting of the State Bar Association, the medical marijuana issue was among four or five subjects that were pressing matters in the state.

One member of the local press produced this doodle late in the discussion of the medical marijuana moratorium. Quiz: Does this depict (a) a cloud of equine flatulence, (b) a lit marijuana cigarette easing a pony's pain, (c) disapproval of The Chronicle's overuse of a draft horse metaphor, (d) the idea that city council deliberations were like beating a dead horse?

Sabra Briere tried calling the question, a procedural move to end the discussion, which had already enjoyed a suspension of council rules on a limit of two speaking turns. Her bid to wrap things up failed, however, when only Teall, Smith, Derezinski, and Rapundalo supported it.

Hieftje wrapped up things up shortly after that, however, with some remarks about the history of marijuana laws in Ann Arbor, saying he thought that 120 days was a reasonable amount of time to work things out. [.pdf of moratorium language as approved]

Outcome: The council unanimously approved the modified moratorium on marijuana dispensing and cultivation of medical marijuana.

Couch Ban

Before the council for its first reading on Thursday was a revision to Chapter 106 of the city code, which handles nuisances. The ordinance had initially appeared on the council’s July 19 agenda, but was stricken from the agenda before the meeting. The proposed new ordinance reads in relevant part:

[Proposed Aug. 5, 2010] Chapter 106 9:7. Outdoor Storage. No responsible person [a property owner, tenant, occupant, lessee] shall place, or permit to remain, furniture which is not intended or designed for outdoor use on exterior balconies, porches, decks, landings, or other areas exposed to the weather.

The council considered an ordinance revision in 2004 intended to have a similar effect, but approached the topic from a fire-prevention perspective. The modification to the code had been proposed as an amendment to Chapter 111, which handles fire prevention.

[Proposed but tabled Aug. 16, 2004] Chapter 111 of Title IX of the Ann Arbor City Code

9:119 UPHOLSTERED FURNITURE PROHIBITED

Upholstered or other furniture designed or manufactured primarily for indoor use shall not be used or left:

1. On residential unenclosed, exterior porches or balconies
2. In an exposed open area of private property

Exceptions:

1. Wood, metal or plastic furniture.
2. Outdoor patio furniture with weather resistant cushions
3. Upholstered furniture designated for pre-paid special pick-up by public or private haulers complying with sections 2:7 and 2:12 of Chapter 26 of this Code.

Couch Ban: Public Commentary

Appearing before the council during public commentary reserved time to speak in support of the proposed ban on the outdoor use of indoor furniture was Bob Snyder. Snyder spoke on behalf of the South University Neighborhood Association, lending his “whole-hearted” support of the proposed ordinance revision.

Snyder lamented the fact that the council had not taken action back in 2004, which he said could have prevented the death earlier this year of Renden LeMasters, who died in a fire on South State Street. [Based on the fire marshal's preliminary report, the fire apparently began in a waste container on a porch in the early morning hours of April 3, spread to a couch and then to the house. Though some occupants were able to flee the house, LeMasters was difficult to awaken and suffered burns which caused his death.] Snyder was reiterating comments he made at the April 5, 2010 city council meeting, and the April 18, 2010 city council caucus.

Kim LeMasters, mother of Renden, also appeared on Thursday before the council to ask for their support of the proposed ordinance. She had also addressed the council at its June 7, 2010 meeting asking for consideration of a ban on porch couches. She said she realized that the student population would likely not be in favor of the ordinance, but said that does not absolve the council of its responsibility to make the city as safe as possible.

[Editor's note: The assumption that the student population would universally oppose a porch couch ordinance might not be warranted. At the April 5, 2010 council meeting, Michael Benson, a representative to the Michigan Student Assembly and as well as a member of the council-student relations committee, had addressed the council saying he thought it was perhaps time to revisit the issue of a couch ordinance.]

Couch Ban: Council Deliberations

Christopher Taylor (Ward 3), who sponsored the resolution, led off deliberations by saying that it was a change whose time is largely overdue. He said there would be a presentation made at the second reading of the ordinance on the safety merits of the proposal. He asked that the second reading of the ordinance, with its public hearing, not be scheduled until the council’s first meeting in September, which falls on Sept. 6.

Sandi Smith (Ward 1) asked that in the presentation on the safety merits, statistics be included on the number of fires caused by upholstered furniture indoors versus outdoors. She also wanted to know what the language “other areas exposed to the weather” contributed to the issue. Fire chief Dominick Lanza deferred to the fire marshal, Kathleen Chamberlain. She indicated that the specific statistics requested by Smith would need to be assembled.

In addressing Smith’s question about “weather,” Chamberlain first contrasted typical indoor furniture with outdoor furniture in terms of the volume of the upholstered material. Smith indicated that she meant to be asking what the significance of the term “weather” was in the ordinance.

Mike Anglin (Ward 5) asked Chamberlain simply to share her thoughts on the issue. She said that in her opinion, based on her personal experience, large pieces of furniture represented a lot of fuel with a lot of oxygen available. That meant that a fire in a large piece of furniture would quickly build up a lot of heat and escalate rapidly in outdoor areas where there are no early warning devices. That meant there were perfect conditions for a fire to spread to a structure, she said.

Mayor John Hieftje indicated that he did not want to regulate people’s choice in porch furniture, but wanted to know at the second reading presentation on Sept. 6 how the ordinance would be enforced, whose job it would be, and how long it would take.

Outcome: The council unanimously approved the couch ban ordinance at its first reading. To be enacted, the ordinance would need to be approved at its second reading.

Zaragon Place 2

Zaragon Place 2 is a proposed 14-story, 96,685-square-foot residential building located on the southwest corner of Thompson and William – now an empty lot next to Cottage Inn restaurant. The building meets the site’s D1 zoning, and is therefore a “by-right” project – no rezoning is required. It is the first project to move forward under the city’s new A2D2 zoning regulations, and would include 99 units, 40 parking spaces on levels two and three, 40 spots for bike storage, and ground floor retail space facing William Street. Chronicle coverage: “Zaragon, Heritage Row and The Moravian” and “Moving Ahead on Zaragon Place 2.”

Zaragon: Public Commentary

During the public hearing on Zaragon Place 2, Thomas Partridge addressed the council, noting that he was a former university student himself. He called for the property owner to provide a significant number of affordable leases for units in the project.

Jim Mogensen asked the council to reflect on two issues that hadn’t been discussed: (i) What happens when someone buys Cottage Inn and decides to redevelop the property? Issues like the blocking of windows and access to the property need to be thought through, he said; and (ii) What about parking for tenants? He noted that at the sister project on East University, Zaragon Place, there was a waiting list for onsite parking spots.

Scott Bonney, the designer of the Zaragon Place 2 project, handed around some drawings to councilmembers.

Scott Bonney introduced himself as the “project designer of this caper.” He gave a description of the project, highlighting the fact that the building would use almost all the same materials as the sister project, Zaragon Place, on East University. Some differences include the use of clear as opposed to opaque glass on the ground floor retail. He also noted that all the bedrooms for the project would have operable windows in the bedrooms. [The sister project, Zaragon Place, was criticized during its approval process for including bedrooms that did not have windows to the outside.]

Tom Heywood of the State Street Area Association said that three previously blighted properties had been identified that were now being redeveloped – Olga’s, McDonald’s and now the site where Zaragon Place 2 was proposed. He said he supported the project.

Roger Hewitt introduced himself as a local business owner. [He is also a board member of the Ann Arbor Downtown Development Authority.] He stated that it was obvious 10 years ago that if the downtown area was going to be viable, it needs more people living downtown. The Zaragon Place 2 project increases residential density, he said. It was needed 10 years ago – during the last decade, the area as lost a lot of independent retail operations, he said.

Brad Mikus said he supported the project, but wanted to point out that the incremental increase in property taxes would not go to the city’s general fund, but rather to the Ann Arbor Downtown Development Authority, which had an agenda that is not necessarily identical with the city’s.

Zaragon: Council Deliberations

Leading off council deliberations on Zaragon Place 2 was Carsten Hohnke (Ward 5). He said he was really excited by the project. He pointed out that the council had approved 100 stories of development in the last five years. He said that the project demonstrated what can be done in the D1 zoning district.

Sabra Briere (Ward 1) noted that the council had experienced a lot of drama with other projects, but there’d been no drama with this one, because it “exactly fits” the zoning.

Sandi Smith (Ward 1) asked for some clarity about a blank space on the drawing. Bonney clarified that it had resulted from a cut-away view of some kind.

Mike Anglin (Ward 5) asked the fire marshal, Kathleen Chamberlain, to comment on the similarity of the names of the original Zaragon Place and Zaragon Place 2. Chamberlain indicated that the fire marshal’s responsibility was to review the name and the addresses of new developments to ensure that there was no duplication. It’s important that first responders not go the wrong location, she said. There should not be a significant delay in response given the similarity of the two names, she said, but that even a few seconds could make a large difference, given the number of people who would be living in the building.

Mayor John Hieftje asked what the difference was between having multiple McDonald’s or Stucchi’s and two buildings with the Zaragon name. Chamberlain said the key difference was in the fact that those establishments are not residential. Those are different types of occupancies, she said. People don’t sleep at McDonald’s or Stucchi’s.

Stephen Rapundalo (Ward 2) asked if the project team was absolutely wedded to the name. Scott Betzoldt of Midwestern Consulting approached the podium and declared, “Yeah, we are! We’re quite fond of the name.” He went on to explain that the first project had been successful and that they had now developed a certain brand awareness around the name. He concluded by saying that they were respectfully requesting to use the name.

Tony Derezinski (Ward 2), who is the council’s representative to the city planning commission, said that there’d been discussion about the naming issue at the planning commission’s meeting, but that they’d concluded it was not a big enough deal to require a change.

Hieftje said he felt there was a community consensus in support of the project, noting that no one had come to speak against it.

Outcome: The city council unanimously approved the site plan for Zaragon Place 2.

Site Plan Timing Changes

At its June 1, 2010 meeting, the city planning commission had considered and recommended a change to time parameters in the site plan approval process as well as other projects. By way of example, for site plans, language that’s deleted is indicated with a strike-through. Language proposed to be added is in italics.

Chapter 57 – 5:122. Site plans.
(3) Site plans for City Council approval. Except as otherwise provided in this section, City Council shall review and approve or reject a site plan after receiving a report and recommendation from the Planning Commission. The Planning Commission shall submit its report and recommendation to the City Council within 60 days of receiving a report and recommendation from the planning and development services manager or designee. The City Council shall approve or reject the site plan within 30 days of the recommendation by the Planning Commission. Within a reasonable time following the close of the public hearing, the Planning Commission shall make a recommendation to the City Council to approve or deny the planned project. Upon receipt of the Planning Commission’s recommendation, the City Council shall approve or reject the planned project within a reasonable time following the close of the public hearing. If approval is conditioned on changes to the site plan, the petitioner shall submit revised drawings with the necessary changes to the planning and development services manager or designee within 30 days of approval by the City Council or the site plan approval shall lapse. Any changes to a condition placed on the site plan by City Council shall require City Council approval.

The planning commission’s June meeting featured ample public commentary and thorough discussion by planning commissioners. A lone dissent on the planning commission for the change had come from Evan Pratt.

Outcome: Without discussion, the city council unanimously approved the timing change.

Village Green Purchase Option Agreement

Before the council was another extension of a $3 million purchase option agreement with Village Green for the city-owned property at First and Washington. The parcel is currently used as a surface parking lot, following demolition of an aging parking structure. Village Green has an approved PUD (planned unit development) site plan on the parcel for a project called City Apartments – a combined residential building that includes 156 dwelling units and 244 public parking spaces. The council-approved extension includes a requirement that the closing on the deal take place by June 1, 2011.

The initial extension was granted through Dec. 31, 2009, with the city administrator having discretion to extend two times for three-month periods, which he did, bringing the option forward to June 30, 2010. The council granted another short extension at its June 21, 2010 meeting to provide some additional time to develop specific project milestones.

Outcome: Without discussion, the  council unanimously approved the Village Green purchase option extension.

DDA Board Nomination

Mayor John Hieftje nominated Bob Guenzel to serve on the Ann Arbor Downtown Development Authority board. Guenzel retired as Washtenaw County administrator in May 2010. Hieftje inidicated that Guenzel would replace Jennifer S. Hall on the board, whose term expired July 31, and he thanked Hall for her services. Hieftje did not indicate at the council meeting if he would be re-appointing John Splitt, whose term on the DDA board also expired.  Guenzel’s nomination will need to be confirmed by the city council at its Aug. 16 meeting.

Present: Stephen Rapundalo, Mike Anglin, Margie Teall, Sabra Briere, Sandi Smith, Tony Derezinski, John Hieftje, Christopher Taylor, Carsten Hohnke.

Absent: Marcia Higgins, Stephen Kunselman.

Next council meeting: Aug. 16, 2010 at 7 p.m. in council chambers, 2nd floor of the Guy C. Larcom, Jr. Municipal Building, 100 N. Fifth Ave. [confirm date]