Stories indexed with the term ‘tax credits’

Round 3 FY 2014: Housing Commission

After a Feb. 11, 2013 budget work session that included separate presentations on the city’s capital improvements plan (CIP) and the Ann Arbor Housing Commission (AAHC), both of these topics came up again briefly at the city council’s most recent regular meeting.

During communications time for the council’s meeting on Feb. 19, 2013, Stephen Kunselman (Ward 3) expressed his view that the CIP should start including the 360 units of public housing managed by the AAHC.

Ann Arbor Housing Commission Properties

Ann Arbor Housing Commission properties. The size of the dot is proportional to the number of units in the location. (Map by The Chronicle. Image links to interactive map.)

Kunselman’s argument for future inclusion of AAHC properties in the city’s CIP is based in part on the fact that the city of Ann Arbor currently holds the deeds to those properties. But his broader point is that he’s opposed to the city relinquishing title to the properties – as part of a proposal made to the council by AAHC executive director Jennifer L. Hall. Hall has served in that capacity for about a year, and began her Feb. 11 presentation at the council work session with an overview of improvements that AAHC has achieved since she took the post.

Hall’s proposal stems from a need to cover an estimated $500,000 per year funding gap for needed capital investments, coupled with a perceived shift in priorities by the U.S. Dept. of Housing and Urban Development (HUD) in its funding strategy. That shift is somewhat away from subsidized public housing, where rent is subsidized in units owned by a housing commission. [Ann Arbor's situation is apparently unique – because the city, not the AAHC, holds the deeds.] While HUD still allocates several billion dollars nationally for public housing, it subsidizes even more in programs that are based on vouchers. And based on the last three years, the trend is toward more funding on the federal level for vouchers than for public housing.

Some HUD vouchers are tied to a tenant – a person. A potential tenant can take that voucher to a private landlord – and it’s the tenant who receives the rent subsidy, wherever that tenant is able to rent a place to live. Other HUD vouchers are tied instead to privately-owned property, and whoever lives in that private project receives the rent subsidy.

The strategy that Hall will be asking the council to authorize is one that converts AAHC properties to part private ownership, in order to take advantage of project-based HUD vouchers. The private ownership of the AAHC properties will also allow the possible use of tax credit financing to pay for needed capital investments – roofs, boilers, plumbing and the like.

The conversion to project-based vouchers would take place under HUD’s Rental Assistance Demonstration (RAD) program. To set the stage for that, the board of the AAHC selected a co-developer at its Jan. 10, 2013 meeting: Norstar Development USA.

The council would need to take two specific steps in order to proceed with the RAD: (1) approve the contingent transfer of the city-owned AAHC properties to the AAHC; and (2) approve a payment in lieu of taxes (PILOT) for the properties so that they’d owe just $1/unit in property tax per year. As city-owned properties, no property tax is currently owed. Without the PILOT provision, taxes would be owed. Requests to take those steps are expected to come to the council in March. March will also be a period during which public hearings will take place on this issue.

Although Kunselman expressed clear opposition to the idea of transferring the deeds, and Mike Anglin (Ward 5) joined him in expressing significant skepticism, other councilmembers were more positive. They still had several questions about the complexities and the risks associated with the RAD program. [For more background on the AAHC’s efforts to prepare for the RAD program, see Chronicle coverage: “Housing Commission Eyes Major Transition.”]

The Feb. 11 budget work session included the 15th District Court and the capital improvements plan (CIP). A session held on Feb. 25 covered the fund-by-fund budget picture for the next two years. Presentations on those topics are covered in separate Chronicle reports. The council’s discussion of its budget priorities – identified at a planning retreat late last year – is expected to begin at a March 11 work session. [Full Story]

Packard Square Brownfield Project Debated

Washtenaw County board of commissioners working session (May 5, 2011): Continuing a debate that began at their regular board meeting the previous day, county commissioners spent part of their most recent working session getting more information about a brownfield proposal for the Packard Square project in Ann Arbor.

Tony VanDerworp, Conan Smith, Dan Smith

Tony VanDerworp, left, talks with Washtenaw County commissioners Conan Smith and Dan Smith before a May 5, 2011 working session. VanDerworp is director of the economic development & energy department, which manages the county's brownfield program.

The board had been asked at its May 4 meeting to give initial approval of a $1 million grant application and $1 million loan from the Michigan Dept. of Natural Resources and Environment, for brownfield cleanup at the proposed Packard Square development. The board was also asked to authorize designation of the county’s full faith and credit as a guarantee for any loan that might be awarded, up to $1 million.

It was that guarantee that raised concerns among some commissioners, who were uncomfortable putting the county potentially on the hook for a private developer – especially as the county faces a $17.5 million deficit over the next two years.

Also was a concern that the developer – Bloomfield Hills-based Harbor Companies – had not paid off back taxes owed on the site.

Commissioners discussed having county staff talk with representatives of the city of Ann Arbor, to ask whether the city would be willing to back the loan, rather than the county. The site plan and brownfield plan for Packard Square had been approved by the Ann Arbor city council on Monday, May 2.

Subsequent to the May 5 working session, the county board announced that it will hold a special working session on Tuesday, May 17 to continue discussion of the Packard Square project and a possible change to the county’s full faith and credit policy. That meeting is set to begin at 6:30 p.m. at the Washtenaw County administration building, 220 N. Main St. in Ann Arbor.

In addition, the Packard Square grant and loan application, along with the project’s brownfield plan, is on the agenda for initial approval at the board’s May 18 meeting. A public hearing on the brownfield plan is also scheduled that night. [Full Story]

Greenbelt Commission Terms Revised

Ann Arbor greenbelt advisory commission meeting (May 11, 2011): Wednesday was the last regular meeting for two greenbelt commissioners – terms end on June 30 for chair Jennifer S. Hall and Gil Omenn, who were both active in efforts to launch the program. Both have reached the term limits for serving on GAC.

Jennifer S. Hall

Jennifer S. Hall, chair of the Ann Arbor greenbelt advisory commission, presided over her last regular meeting on May 11. Her term ends on June 30; GAC's June meeting will be a joint session with the city's park advisory commission.

Instead of holding their regular meetings in June, the greenbelt and park advisory commissions have scheduled a joint working session to discuss common goals and priorities – they last met jointly in April 2010.

Term limits were raised in another context during Wednesday’s meeting, when commissioners were asked to recommend that city council restate current GAC membership terms. Mary Fales of the city attorney’s office has been working on the revisions, after inconsistencies were discovered for current appointments. For example, a term for Ecology Center director Mike Garfield ended on June 30, 2009. Though he continued to serve, he was not officially reappointed to another three-year term until Sept. 21, 2010. Under the resolution recommended by GAC, all terms would end on June 30, over staggered years.

Also at Wednesday’s meeting, commissioners got an update about Michigan budget-related legislation that would cut tax credits for farmers. They were also briefed by staff about changes to the federal Farm and Ranchland Protection Program – the city has received millions of dollars worth of FRPP grants over the years to offset the cost of development rights purchased in the greenbelt.

Ginny Trocchio, support staff for the greenbelt program, told commissioners that June 16 is the date for a greenbelt celebration, starting at 5:30 p.m. at the Braun farm in Ann Arbor Township, which was added to the greenbelt in 2010. The event will be open to the public, and will include a presentation to highlight the program’s accomplishments.

Dan Ezekiel, GAC’s vice chair, reported that the subcommittee he’s leading to look at possible changes in the greenbelt boundary will be making a proposal at the commission’s July 13 meeting.

And in its final action of the meeting, commissioners emerged from a closed session and voted to recommend that Ann Arbor city council make a $127,200 offer for the purchase of development rights on a property within the greenbelt. Before appearing on the city council’s agenda, details of these greenbelt acquisitions are not made public – parcels are identified only by their application number. [Full Story]

Zingerman’s Project Seeks Brownfield Status

The major renovation and expansion in the works for Zingerman’s Deli cleared its most recent major hurdle in May, gaining site plan approval from the Ann Arbor planning commission. While the site plan now moves on to city council, the business is taking action on another front as well: Applying for support from the local and state brownfield program.

Grace Singleton

Grace Singleton, a managing partner with Zingerman's Deli, talks about plans to apply to the local and state brownfield program as part of the deli's renovation plans. The business hosted a public meeting about the plans on June 21. (Photos by the writer.)

On June 21, Zingerman’s hosted a public meeting to answer questions about their plans for the brownfield application. Matt Naud, the city’s environmental coordinator, was on hand as well, and distinguished between this project and those that are typically associated with the term “brownfield.” In the case of Zingerman’s Deli, “it’s economic development,” he said, “It’s not about environmental cleanup.”

Specifically, brownfield status would allow Zingerman’s to be eligible for tax increment financing (TIF), a mechanism that would let the business recoup certain qualified expenses related to the project – possibly as much as $817,000 over 15 years.

It’s a different approach than the brownfield application most recently approved by city council for the Near North affordable housing project on North Main. In that case, the site’s need for environmental cleanup qualifies it for a brownfield status. Zingerman’s application also differs from Near North’s in that Near North isn’t seeking reimbursement through TIF. Both projects plan to apply for Michigan Business Tax credits. [Full Story]