Stories indexed with the term ‘SPARK’

Ann Arbor LDFA Looks to Extend Its Life

Ann Arbor Local Development Finance Authority board meeting (June 17, 2014): The LDFA board’s meeting convened around 8:20 a.m. – about seven hours after the city council’s meeting adjourned the previous evening. And the council’s meeting was the topic of small talk among LDFA board members as they waited for their meeting to convene.

Carrie Leahy is chair of the LDFA board.

Carrie Leahy is chair of the LDFA board.

The council’s meeting was of more than just passing interest to the LDFA board members – because the council voted at that meeting to table a $75,000 contract for business development services with Ann Arbor SPARK, a local nonprofit economic development agency. Ann Arbor SPARK is also the LDFA’s contractor – but not for the same kind of services that SPARK delivers under its contract with the city. The council will likely take up its contract with SPARK again at a future meeting, possibly as soon as July 7.

The city’s annual contract with SPARK, which is paid for with general fund money, is meant to cover the attraction and retention of mature companies to the Ann Arbor area. In contrast, the LDFA contracts with SPARK for entrepreneurial support services – for companies that are in some phase of starting up.

On the LDFA board’s June 17 agenda was the annual contract with Ann Arbor SPARK for entrepreneurial support services – which the board voted to approve. This year that contract is worth nearly $2 million – $1,891,000 to be exact.

An unsuccessful bid by councilmembers made during the city’s FY 2015 budget deliberations would have reduced the total LDFA expenditures by $165,379. The goal of that expenditure reduction would have been to increase the fund balance that was available for infrastructure improvements in the LDFA district – specifically, for high-speed telecommunications. At the LDFA’s June 17 meeting, city CFO Tom Crawford indicated that sometime in the FY 2015 fiscal year, the city would be making a proposal to install fiber throughout Ann Arbor.

The contract between the LDFA and SPARK covers a range of items, with the top two line items consisting of staffing for the business incubator ($420,000) and provision of services to start-up companies in Phase III of their development ($550,000). SPARK classifies its engagement with companies in terms of phases: preliminary screenings (Phase I); due diligence (Phase II); intensive advising (Phase III); and accelerating opportunities (Phase IV). [.pdf of FY 2015 budget line items] [.pdf of LDFA-SPARK FY 2015 contract]

At its June 17 meeting, the LDFA board also approved a routine annual $42,600 contract with the city of Ann Arbor – for administrative support services. Those include items like the preparation of meeting minutes, stewardship of public documents, and preparation of budgetary analyses. [.pdf of FY 2015 LDFA contract with city of Ann Arbor]

The final voting item for the board was approval of its meeting schedule for the next fiscal year. The LDFA board meets in eight out of 12 months, with the next meeting taking place on July 15, 2014, starting at 8:15 a.m. in the city council chambers. [.pdf of 2014-2015 meeting schedule]

These voting items did not, however, generate the majority of the board’s discussion at its June 17 meeting.

The board focused most of its discussion on issues surrounding its application for an extension of the LDFA past its current 15-year lifespan, which ends in 2018. Legislation passed in 2012 allowed for either a 5-year or a 15-year extension – with different criteria for those time periods. The 15-year extension requires an agreement with a satellite LDFA, with two communities currently under consideration to partner with Ann Arbor’s LDFA: Brighton and Adrian. Flint had also been a possibility, but is no longer on the table.

With an extension, the LDFA would continue to capture school operating millage money, which would otherwise go to the state’s School Aid Fund. At least some of the school taxes subject to capture by LDFAs statewide are required to be reimbursed to the School Aid Fund by the state. Questions about how that applies to Ann Arbor’s LDFA have been raised – and a review of the state statute appears to support the conclusion that the key clause requiring reimbursement is inapplicable to the Ann Arbor SmartZone LDFA. That understanding was confirmed to The Chronicle by the Michigan Dept. of Treasury communications staff in a telephone interview on June 23.

The exact nature of that tax capture arrangement and possible reimbursement was also the subject of LDFA board discussion on June 17 – because the LDFA board is being pressed by city councilmembers to account for how the LDFA tax capture impacts the state’s School Aid Fund. Board member Stephen Rapundalo expressed some frustration about that – based on his perception that this material had been well explained in the past: “What’s it take – for them to understand unambiguously how that works? I mean, we have told them. Why is the onus on the LDFA to have to show them that?”

Besides the tax capture mechanism, two other issues raised by city councilmembers are factoring into the LDFA board’s approach to seeking an extension of its term. Board chair Carrie Leahy told her colleagues that she took away two main messages from recent appearances in front of the Ann Arbor city council. Some councilmembers, she said, would like to see: (1) an independent audit of job creation numbers; and (2) a provision for infrastructure investments as part of an LDFA extension.

On the infrastructure side, the LDFA board’s discussion focused on the existing TIF (tax increment finance)/development plan, which provides for investments in high-speed telecommunications (fiber) networks, but not for projects like street construction, sewer construction and streetlight installation. The question was raised as to whether the LDFA could use its school tax capture to pay for a fiber network in the whole geographic district of the LDFA – or if school taxes could only be used to fund a fiber network to an business incubator.

The Ann Arbor LDFA’s district covers the geographic areas of the Ann Arbor and Ypsilanti downtown development authorities – although Ypsilanti’s DDA area does not generate any LDFA tax capture. As a consequence, money captured by the LDFA is not spent in the Ypsilanti portion of the district. But that could change under an extension of the LDFA – based on board discussion at the June 17 meeting.

On the job creation numbers audit, the June 17 board discussion indicated that the LDFA will now be looking possibly to incorporate a job numbers audit as part of an upcoming financial audit. The financial auditing firm will be asked to provide some explanation of how it might be able to incorporate a jobs audit as part of its scope of work for the upcoming financial audit. The board appears to understand that some type of jobs audit would be important for winning ultimate city council support for a 15-year extension of the LDFA.

The city council’s representative to the LDFA board, Sally Petersen, made that explicit more than once during the June 17 meeting, saying that “taking the lead on establishing an independent audit would go a long way towards getting city council support for an extension.”

The LDFA’s deliberations and other agenda items are reported in more detail below. [Full Story]

Council Gives Support to LDFA Extension

Ann Arbor city councilmembers have given their support to the local development finance authority’s application to the Michigan Economic Development Corp. to extend the life of the LDFA’s tax capture arrangement for up to 15 years. Without an extension, the LDFA would end in 2018.

Action came at the council’s June 2, 2014 meeting after about 20 minutes of deliberation that concluded just before 11 p.m. Carrie Leahy, chair of the LDFA board, and Ann Arbor SPARK CEO Paul Krutko were on hand to answer councilmember questions. The voice vote by the council passed over dissent from Sumi Kailasapathy (Ward 1).

Ann Arbor’s local development finance authority is funded through a tax increment finance (TIF) district, as a “certified technology park” described … [Full Story]

Ann Arbor OKs SPARK, Lobbyist Funding

Among the several items on the Ann Arbor city council’s June 20, 2011 meeting consent agenda, were two involving city contractors: Ann Arbor SPARK for $75,000, and Governmental Consultant Services Inc. (GCSI) for $48,000.

Items on the consent agenda are considered routine, and include contracts for less than $100,000.

The contact with the economic development agency Ann Arbor SPARK is one that has been renewed annually since the Washtenaw Development Council and Ann Arbor SPARK merged in 2006. Previously, Ann Arbor had contracted with the WDC for the business support services for which it now contracts with SPARK. On June 20, 2005, the city council authorized that one-year contract with WDC for $40,000. This year’s $75,000 contract with SPARK describes the organization’s focus as “building our innovation-focused community through continual proactive support of entrepreneurs, regional businesses, university tech transfer offices, and networking organizations.”

Ann Arbor SPARK is also the contractor hired by the city’s local development finance authority (LDFA), to operate a business accelerator for the city’s SmartZone, one of 11 such districts established in the early 2000s by the Michigan Economic Development Corp. (MEDC). The SmartZone is funded by a tax increment finance (TIF) mechanism, which in the current fiscal year captured around $1.4 million in taxes from a TIF district (which is the union of the Ann Arbor and Ypsilanti Downtown Development Authority districts, though revenue is generated only in Ann Arbor’s district.) The specific taxes on which the increment since 2002 is captured are the school operating and state education taxes, which would otherwise be sent to the state and then redistributed back to local school districts.

GCSI’s Kirk Profit, a former member of the state House of Representatives, typically makes an annual presentation to the council with an update on state-level legislative issues relevant to the city’s budget situation. Written updates to councilmembers on legislative activity are sent on a weekly or daily basis.

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

Washtenaw Natural Areas Tweaked for Ballot

Washtenaw County Board of Commissioners working session (April 22, 2010): At their Thursday meeting, commissioners were briefed on proposed changes to the county’s Natural Areas Preservation Program, which would help the county protect more land that’s being used for farming.

Bob Tetens, Susan Lackey

Susan Lackey, executive director of the Legacy Land Conservancy, confers with Bob Tetens, director of Washtenaw County Parks & Recreation, before the start of Thursday's working session of the county board of commissioners. (Photo by the writer.)

The proposal comes as the board prepares to place a renewal of the 10-year NAPP millage on the November ballot. The current millage, which raises about $3 million annually to preserve natural areas in the county, expires at the end of 2010.

Also at Thursday’s meeting, commissioners heard a report on internal controls used within the county government, both in finance and other areas. This has been topic that commissioner Wes Prater has pushed the board to address for several months.

Highlights from a draft report were presented by staff of the county’s new energy and economic development department. The report includes data on job losses, education, housing, transit and other factors, and presents four strategies for improving the county’s economy. Tony VanDerworp, who leads the department, explained that the report is required by the U.S. Dept. of Commerce’s Economic Development Administration so that the county can apply for grants from the EDA.

Finally, Verna McDaniel, incoming county administrator, said she plans to hold a meet-and-greet for candidates of the deputy administrator job on May 5 before that evening’s board meeting, to get commissioners’ feedback on a potential hire. [Full Story]

Budget Round 5: Economic Development

Last Monday night, the Ann Arbor city council held its fifth and possibly final meeting devoted exclusively to the city’s financial planning, before it adopts the city’s FY 2011 budget on May 17, 2010. The budget will be formally presented to the city council by city administrator Roger Fraser at its Monday, April 19 meeting.

Stephen Rapundalo (Ward 2) sets up his presentation on the LDFA.

Stephen Rapundalo (Ward 2) sets up his presentation on the Local Development Finance Authority (LDFA) before the start of the April 12 council budget meeting. Rapundalo sits on the LDFA board as the Ann Arbor city council’s representative, and currently chairs the board.

At the April 12 budget meeting, the council heard presentations on two related entities: the Local Development Finance Authority (LDFA) and Ann Arbor SPARK. The LDFA contracts with Ann Arbor SPARK for various business development services.

The two key themes that emerged from the LDFA presentation were consistent with the overall topic of the city’s budget: (i) Where does the LDFA get its money? and (ii) What does the LDFA spend its money on?

Part of the LDFA’s revenue goes towards economic development activities – a business accelerator – for which it contracts with Ann Arbor SPARK. The presentation to the council from SPARK’s CEO, Michael Finney, was followed by testimonials of companies who said they had benefited from SPARK’s efforts.

Development activities are just one kind of investment that the LDFA could make under its TIF (tax-increment financing) plan. It could also make investments in physical infrastructure. During question time, Sandi Smith (Ward 1) drew out from Stephen Rapundalo (Ward 2) the possibility that the LDFA could contemplate an investment in a fiber-optic network. Rapundalo, who serves on the LDFA board, indicated that such an LDFA investment might be possible, even if Google does not select Ann Arbor as a test community for its current fiber-optic initiative.

The council also heard from the economic development community about how the name “Ann Arbor” is perceived in the rest of the world.

The part of the council’s meeting dedicated to deliberations on its own budget was comparatively brief. Councilmembers were keen to portray in a positive light a couple of different issues, among them a potential increase in the city’s debt load resulting from a failure to complete a $3 million sale of property at First & Washington, as well as proposed increases in water rates. [Full Story]

Dam Questions Dominate Caucus

Ann Arbor City Council Sunday night caucus (June 14, 2009): At least 20 people attended the Ann Arbor city council’s Sunday night caucus to provide arguments for keeping the Argo Dam in place. The city council will have a work session on the topic starting at 6 p.m. tonight, before its regularly scheduled meeting, which starts at 7 p.m.

Other topics addressed to the councilmembers who attended caucus included the status of the East Stadium bridge repair, the proposed installation of parking meters in residential areas near the downtown area, and foliage obscuring sight lines along Glazier Way.  The allocation of $75,000 to SPARK, which is on the agenda for Monday, received some discussion in response to a query from The Chronicle.

The three councilmembers remaining at the caucus at its conclusion (Sabra Briere, Mike Anglin and John Hieftje) had little to discuss as far as formulation of questions among themselves. Briere briefly mentioned to Hieftje that she’d had some conversations with councilmembers who were interested in exploring some revisions to council rules – to address emailing policies, among other things. [Full Story]

A2: Geeks Camp

On Dug Song thanks SPARK for providing space at SPARK Central to host Arbcamp 2008 on Thursday, December 18, 7:00 – 9:00 p.m. According to the organizing page, “We hope to have [Arbcamp] feed the a2geeks conference in Spring 2009, and test the waters for an Ignite event, perhaps at the Michigan Theater, next year.” [Source]

Live at PJ’s: It’s HealthMedia!

HealthMedia got a boost in its nascent stages from a handshake deal.

HealthMedia got a boost in its nascent stages from a handshake understanding.

If you’ve just described your company as “the coolest damn company in the world,” how do you announce to your 150 employees – 95% of whom are shareholders – that the company has been acquired by Johnson & Johnson? If you’re Ted Dacko, president of HealthMedia, you take advantage of the venue you’ve selected for the mid-afternoon announcement. You’re at a nightclub with an excellent AV system (Live at PJ’s), so you cue up the company movie.

As the fast-paced … [Full Story]

HD’s Totter Watch: SPARK


Conan Smith tottered with me the day after Christmas in 2005 and at the time he was the County Board of Commissioners’ representative to the Washtenaw Development Council, which was then merging with SPARK, another economic development entity. Because I figured Conan might have some clout on this issue, I suggested to him on the totter that the name SPARK could be changed to SPARQ. I think pretty much anything with a “K” or a “C” sound could be improved by replacement with a “Q”. [Full Story]