Stories indexed with the term ‘TIF capture’

County TIF Policy Gets Initial Approval

The Washtenaw County board of commissioners has given initial approval a policy to guide the county’s participation in tax increment financing (TIF) authorities. The action took place at the board’s Aug. 6, 2014 meeting.

At its Oct. 16, 2013 meeting, the board had passed a resolution directing county administrator Verna McDaniel to develop a policy for evaluating future TIF proposals. The resolution stated that the policy would be developed with input from staff of the office of community and economic development, the equalization department, and the brownfield redevelopment authority. The Oct. 16 resolution was passed over dissent by the board’s two Republican commissioners, Dan Smith (R-District 2) and Alicia Ping (R-District 3).

Subsequently, an advisory committee was formed to help develop the … [Full Story]

County Board Debates Taxes, State Laws

Washtenaw County board of commissioners meeting (Oct. 16, 2013): A packed agenda and extensive public commentary resulted in a meeting lasting over six hours, with the majority of discussion focused on three issues: (1) the state’s Stand Your Ground law; (2) an increase to the Act 88 tax, and questions about the legality of such a levy; and (3) the county’s participation in a Pittsfield Township corridor improvement authority for State Street.

Stand Your Ground, Washtenaw County board of commissioners, The Ann Arbor Chronicle

A supporter of Michigan’s Stand Your Ground law brought his gun to the Oct. 16 meeting of the Washtenaw County board of commissioners. (Photos by the writer.)

About three dozen people spoke to the board about the Stand Your Ground resolution, which urged the state legislature to repeal that law. Although there were speakers on both sides of the issue, more than 20 voiced opposition to the resolution, including several who attended the meeting wearing sidearms.

It was after midnight when the board took a 5-to-4 vote to pass the resolution, over dissent from Kent Martinez-Kratz (D-District 1), Dan Smith (R-District 2), Alicia Ping (R-District 3), and Rolland Sizemore Jr. (D-District 5). In support of the resolution were Felicia Brabec (D-District 4), Ronnie Peterson (D-District 6), Andy LaBarre (D-District 7), Yousef Rabhi (D-District 8) and Conan Smith (D-District 9).

The following week, David Raaflaub of Ypsilanti – a former candidate for county commissioner – filed a complaint against the board in the 22nd Circuit Court. The complaint asks the court to determine two issues: (1) what authority the board has that enables it to “draw conclusions of law,” and (2) what authority the board has to represent the county in seeking changes to state law. Dan Smith has indicated that he would bring forward a resolution to rescind the board’s Oct. 16 action, if it’s determined that the county will incur additional costs – such as fees for outside legal counsel – to defend the lawsuit.

Another major debate on Oct. 16 related to an increase in the Act 88 tax levy, which funds economic development and agriculture – including activities of Ann Arbor SPARK. The board ultimately gave initial approval to increase the tax from 0.06 mills to 0.07 mills, following a long discussion and a failed attempt by Conan Smith to increase the tax even more, to 0.09 mills. His proposal for a draft policy to guide the allocation of Act 88 funds did win support from the majority of commissioners, however.

The county’s position is that it’s authorized to collect the Act 88 millage – as well as a levy for veterans relief services – without seeking voter approval. That’s because the state legislation that enables the county to levy these taxes predates Michigan’s Headlee Amendment. During deliberations, Dan Smith raised questions about whether levying this kind of tax is constitutional. He also questions whether the language of the Act 88 statute allows the kind of general interpretation the county is using to define eligible uses of funds generated by the levy.

Dan Smith also proposed amendments for both the Act 88 and veterans relief millages in the future exempt them from capture by tax increment financing (TIF) districts or authorities in the county. Those exemptions, which were approved by the board, would apply to tax capture from a proposed State Street corridor improvement authority (CIA) in Pittsfield Township. After about 90 minutes of debate, the board gave initial approval to participate in that project, with Dan Smith casting the only dissenting vote. He had unsuccessfully proposed postponement, then floated an opt-out resolution that did not secure enough votes to pass. The board is expected to take a final vote on participating in the CIA at its Nov. 6 meeting.

In other action, the board (1) gave initial approval to a proposed brownfield redevelopment plan by the Chelsea Milling Co., makers of Jiffy Mix; (2) appointed Barb Fuller to the county road commission; (3) took an initial vote to extend the coordinated funding approach, which supports local nonprofits; and (4) authorized the annual apportionment report, with details of the 2013 taxable valuations for property in the county.

And in a vote taken after midnight, the board rejected a proposal that would have given notice to eliminate a lump-sum budgeting approach for Washtenaw County’s court system. That vote was 3-6, with support from only Dan Smith (R-District 2), Conan Smith (D-District 9) and Kent Martinez-Kratz (D-District 1). [Full Story]

Ann Arbor DDA TIF: Postponed Again

A revision to the city of Ann Arbor’s ordinance regulating the tax increment finance (TIF) capture of the Ann Arbor Downtown Development Authority has been again postponed – in action taken at the city council’s Oct. 21, 2013 meeting.

Postponement is until Nov. 7 – which is the last meeting of the current composition of the council. City council elections are held Nov. 5.

The revision to Chapter 7 would clarify the existing language of the ordinance. The clarification would disallow the DDA’s preferred interpretation of a restriction on TIF revenue that’s expressed in the ordinance language. This ordinance revision was first considered by the council in February of this year. It received initial approval in April and has been in front … [Full Story]

Oct. 21, 2013 Ann Arbor Council: Final

The Oct. 21, 2013 meeting of the Ann Arbor city council is the last one before the Nov. 5 election. After the election, the current group of councilmembers will have just one more meeting, on Nov. 7, before the new council is seated. The agenda the current council faces on Oct. 21 is relatively heavy.

New sign on door to Ann Arbor city council chamber

The sign on the door to the Ann Arbor city council chamber, installed in the summer of 2013, includes Braille.

It’s possible that the council might be briefed at the meeting on proposals received by the Oct. 18 deadline for the purchase of the city-owned parcel on William Street between Fourth and Fifth avenues (the former Y lot), but that’s not yet clear. The property had been listed for $4.2 million.

Many of the Oct. 21 items already on the agenda can be divided into three main categories: transportation, the Ann Arbor Downtown Development Authority, and the city’s energy commission.

The council held a work session about transportation on Oct. 14, 2013. Transportation-related items on the Oct. 21 agenda include a resolution that would admit Ypsilanti Township as a member of the Ann Arbor Area Transportation Authority. The specific question to be considered is a revision to the AAATA’s articles of incorporation – which would also expand the number of board members from nine to 10.

A second transportation-related agenda item is a city-led initiative to develop a new train station, with the location to be determined. The existing location, as well as one on Fuller Road near the University of Michigan medical campus, would be among the possibilities. On the council’s agenda is a contract with URS Corp. to conduct an environmental review that would include public engagement, site selection and conceptual design. The council’s authorization would be $824,875, an amount that includes a $63,083 contingency. The city would pay 20% of that, or about $165,000, with the rest covered by a federal grant that has already been awarded by the Federal Rail Authority.

To the extent that pedestrian infrastructure is also part of the city’s transportation system, a transportation-related pair of items would alter the definition of “sidewalk” to include cross-lot walkways. Affected by the change, for example, would be walkways that connect streets with parks or school property. The change would allow for use of sidewalk repair millage funds to repair cross-lot walkways, without triggering the winter maintenance requirement for adjacent property owners.

Finally, the city council will be asked to approve an annual resolution related to wintertime transportation – the purchase of ice control salt for city streets.

Related to the Ann Arbor DDA are three items: (1) reconsideration of the appointment of Al McWilliams to the board of that authority – likely to be confirmed on a re-vote, if reconsideration is approved; (2) final consideration of a change to the city ordinance regulating the DDA’s TIF (tax increment financing) capture – likely to be postponed yet again; and (3) a budget allocation of $280,000 to cover costs associated with replacement of downtown ornamental, pedestrian-scale light poles. The DDA is contributing $300,000 to the cost of the $580,000 project. Some councilmembers think the DDA should pay for the full amount, so the eight-vote majority required for the budget amendment might not be achieved.

The specific size of the majority vote required could also be a factor in one of two agenda items related to the city’s energy commission – the re-appointment of Wayne Appleyard to the commission. The confirmation will need a seven-vote majority under the city charter, because he’s not a city resident. The other energy-related item is an energy commission-recommended resolution – which was previously rejected, reconsidered and postponed by the city council. The resolution would call upon the city’s employee retirement board to divest from fossil fuel companies.

This article includes a more detailed preview of each of these agenda items. More details on other meeting agenda items are available on the city’s online Legistar system. Readers can also follow the live meeting proceedings Monday evening on Channel 16, streamed online by Community Television Network.

The Chronicle will be filing live updates from city council chambers during the meeting, published in this article below the preview material. The meeting is scheduled to start at 7 p.m. [Full Story]

Council on DDA: Delay on TIF, OK McWilliams

Ann Arbor city council meeting (Sept. 16, 2013): Of the roughly 3.5-hour session, about an hour was devoted to two separate items that were added to the agenda the day of the Monday meeting.

Mike Anglin (Ward 5), city administrator Steve Powers

From left: city administrator Steve Powers and Mike Anglin (Ward 5). (Photos by the writer.)

One of those late agenda additions was a confirmation vote of Al McWilliams’ appointment to the Ann Arbor Downtown Development Authority (DDA) board. The vote tally was 6-5, which was declared sufficient for confirmation. However, the city attorney is still reviewing the possibility that the confirmation required an eight-vote majority, under the council’s rules.

The debate on that item came late in the meeting, because that’s where nominations and appointments are slotted on the agenda template, based on the council’s current rules. But that will change in the future – due to a change in the council’s rules that was also on the Sept. 16 agenda. The council adopted some revisions to the rules that were three months in the works. Those included: adding an opportunity for public commentary to work sessions; changing the order of the agenda to move nominations and appointments for boards and commissions to a slot toward the start in the meeting; and prohibiting the use of personal electronic communications devices while at the council table.

Also related to the DDA on the Sept. 16 council agenda was the final approval of revisions to the city ordinance regulating the DDA’s tax increment finance (TIF) capture. The council again put off a vote on the question, which was given initial approval five and a half months ago – on April 1. The question was put off this time until Oct. 21.

The initially-approved amendments to Chapter 7 of the city code include various changes to governance, including term limits for board members, as well as clarifications to the existing language on TIF capture. The initially-approved amendments would enforce the existing language of the ordinance in a manner that would impact the DDA’s TIF revenue in a way roughly matching the DDA’s projected revenues in its 10-year planning document.

At the council’s Sept. 16 meeting, Stephen Kunselman (Ward 3) sketched out a different conceptual approach to the way the TIF capture is constrained. It’s an approach being developed by a joint committee of councilmembers and DDA board members as a “dual track” to the ordinance revisions currently under consideration.

Under the existing ordinance language, the amount of DDA TIF capture is calibrated to projections in the DDA TIF plan, which is a foundational document for the DDA. The different conceptual approach would establish a basis level for the maximum captured taxable value in the DDA district – a “cap” on TIF revenue – and then set some clearly defined annual increase, keyed to a specific percentage or some variant of a consumer price index (CPI).

A working document used by the joint committee at its Sept. 10 meeting showed two basic scenarios, one of which could roughly mimic the TIF revenue levels that would be provided under the current proposal, while the other might not provide any practical cap.

The second item added to the Sept. 16 agenda on the same day as the meeting was reconsideration of a vote on fossil fuel divestment taken by the council at its previous meeting, on Sept. 3. At that meeting, the council had voted 5-4 on a resolution calling on its employee retirement system to divest from fossil fuel companies. That tally defeated the resolution because it failed to achieve the necessary six votes on the 11-member council.

However, Margie Teall (Ward 4) voted with the prevailing side – one of the votes against it – giving her the right to bring a motion for reconsideration, which the council passed at its Sept. 16 meeting. But on the fossil fuel divestment resolution itself, after about 45 minutes of debate, the council voted to postpone the matter – until its Oct. 21 meeting.

In other business, the council approved the site plan for an expansion of a Honda testing facility, north of Ellsworth on Research Park Drive. The council also approved the rental of 8 extra trucks to supplement the city’s fleet during fall leaf collection season, at a cost of $117,200. It’s an annual expenditure.

Also on Sept. 16, the council formally accepted the final report of the North Main Huron River corridor task force.

The council also heard an update from Ann Arbor police chief John Seto on the preliminary assessment of newly implemented street closures for University of Michigan home football games. That preliminary assessment did not include any major problems, but Seto indicated that he wouldn’t draw conclusions until after a community meeting that’s being held to get additional feedback. That meeting takes place on Tuesday, Sept. 24 at 6 p.m. at Pioneer High School. [Full Story]

Library View on DDA TIF Capture: Unchanged

At its most recent meeting on Sept. 16, 2013, the Ann Arbor city council again considered a revision to the ordinance regulating the tax increment finance (TIF) of the Ann Arbor Downtown Development Authority (DDA). The council had given initial approval to the Chapter 7 changes nearly six months ago, on April 1, 2013. But at the Sept 16 meeting, the council again postponed a final vote on the revisions, this time until Oct. 21.

Downtown location of the Ann Arbor District Library

Downtown location of the Ann Arbor District Library (Photo by the writer, Sept. 21, 2013)

Other taxing jurisdictions besides the city of Ann Arbor – entities that also have a portion of their levied taxes captured by the DDA – have something at stake.  Those units are Washtenaw County, Washtenaw Community College and the Ann Arbor District Library. The topic of other taxing jurisdictions’ interest in the Chapter 7 revisions has been raised at three public meetings since late August: (1) at an Aug. 26 meeting of a joint city council and DDA board committee; (2) at the Sept. 15 city council Sunday night caucus; and (3) at the Sept. 16 city council meeting.

Some councilmembers have speculated about the current view held by one of the other taxing jurisdictions in particular – the Ann Arbor District Library. AADL director Josie Parker wrote a letter to mayor John Hieftje in January 2012 outlining the library’s position on the matter at the time, something that has been widely reported. The Chronicle only recently became aware that a similar letter had been sent by Parker to the Ann Arbor DDA in August 2011.

Those letters articulate a view that’s consistent with op-eds published in The Chronicle on the topic – that the DDA owes more in repayments to the taxing jurisdictions than the DDA agreed it needed to pay back in May 2011. Further, the AADL’s position, as expressed in the two letters from Parker, is to reject the DDA’s most recent and current interpretation of the city ordinance  – which was stated only after the DDA had already made repayments of excess TIF capture in 2011. Those repayments had been made to cover several prior years, because the required repayment had been “overlooked.”

The DDA’s subsequent interpretation was that the DDA did not owe the money it had returned in 2011. DDA officials maintain that as long as the DDA had debt obligations, it would also not owe any return of excess TIF to the other taxing jurisdictions in the future. Based on calculations by The Chronicle, the DDA’s current interpretation probably deprives AADL of roughly $55,000-$60,000 annually, compared to the kind of interpretation AADL gives the ordinance. That amount could increase, or decrease, in the future.

The position articulated in Parker’s August 2011 letter includes the statement: “The Library fully intends to enforce its rights for all past and future amounts owed to the Library as a result of excess TIF capture. However, the Library would prefer to resolve these issues without court involvement.”

Responding to a question in a telephone interview with The Chronicle on Sept. 19, 2013, Parker stated: “The position of the Ann Arbor District Library is still accurately reflected in those letters.”

That statement appears to resolve any uncertainty that might exist about the AADL’s current position. At the Sept. 15 Sunday night caucus, for example, Sabra Briere (Ward 1) had ventured that Parker’s letter to Hieftje might be appropriately regarded as a “snapshot in time” and might not reflect the AADL’s current position. And Christopher Taylor (Ward 3), during the Aug. 26 joint committee meeting, appeared to discount the current relevance of the letter to Hieftje by asking what year it had been sent.

However, about the AADL’s position on the DDA TIF capture taken in 2011, Parker stated this week: “It has not changed.” [Full Story]

Sept. 3, 2013 Ann Arbor Council: Final

The council’s post-holiday meeting agenda signals the end of summer and a reminder of work the council left unfinished several weeks earlier. Two items on the agenda were postponed until the Sept. 3, 2013 meeting at least seven weeks ago. The first is a revision to the ordinance regulating the Ann Arbor Downtown Development Authority. The second is a revision to the council’s own internal rules, which could have an immediate impact on the way conversations between the council and the DDA take place.

New sign on door to Ann Arbor city council chamber

The sign on the door to the Ann Arbor city council chamber, installed in the summer of 2013, includes Braille.

For both agenda items, the expectation was that council committees would work during the interim period to hammer out a clarified proposal and recommendation for the full council to consider on Sept. 3. In neither case was that committee work accomplished.

After voting at its May 6, 2013 session to postpone a final vote on DDA ordinance revisions until Sept. 3, the council attempted to ensure that the deliberations at the first meeting of the fall would be productive. The council voted on July 1, 2013 to establish a joint council-DDA committee to work out a recommendation on possible legislation. The main point of controversy involves the definition of the DDA’s tax increment finance (TIF) capture.

Already given initial approval by the council is a proposal that would essentially enforce the existing ordinance language. The revision to the ordinance would have an arguably inconsequential impact on TIF revenue received by the DDA – when compared to its most recent 10-year planning document. What makes that comparison controversial, and unwelcome to the DDA staff and board, is the fact that its most recent planning document doesn’t include tax revenue from very recent new downtown construction. The revised ordinance would have a roughly $1 million per year negative impact on DDA TIF revenues – when compared to the amount the DDA would receive if the DDA were allowed to give the existing ordinance language its preferred interpretation.

The charge to the joint committee on July 1 was to begin meeting immediately, but the group did not convene until eight weeks later, on Aug. 26 – after the Aug. 6 Democratic primary election. The outcome of that election left a key vote in place for an ordinance revision that doesn’t favor the DDA – that of Stephen Kunselman (Ward 3), who defeated challenger Julie Grand. Still, DDA board members at the Aug. 26 meeting seemed keen to continue a delaying gambit. That’s because a failure by Jane Lumm (Ward 2) to win re-election in November could tip the balance in the DDA’s favor – even factoring in the addition of Jack Eaton in Ward 4. Eaton, who prevailed on Aug. 6 over incumbent Marcia Higgins, supports the idea of constraining the DDA’s TIF capture.

At the one committee meeting held so far, the only substantive concept that was batted around briefly was the idea of defining some kind of fixed cap on TIF revenue. This approach would replace the existing ordinance language, which calibrates the DDA’s TIF capture with the projections in the TIF plan. But the discussion never went as far as to include dollar amounts for the fixed cap. After about an hour and a half of political squabbling and sometimes inaccurate recitation of historical facts, the general mood among councilmembers seemed to be reflected in a remark by Sally Petersen (Ward 2): “I don’t think we can be there by next week.” So the item looks likely be postponed on Sept. 3. However, the council is free to vote the proposal up or down at this meeting.

The one session of the joint DDA-council committee still exceeded, by one meeting, the council rules committee’s effort over the summer. The rules committee did not meet at all between July 15, 2013 and Sept. 3. On July 15, the council had postponed a vote on new rules, but not before rejecting one of the proposed rule changes, which the committee had first presented on June 17, 2013. The council as a whole was not keen to shorten public commentary speaking turns. So the proposal currently in front of the council would maintain the existing three-minute time limit.

But as the council’s July 15 deliberations on other proposed rules changes threatened to bog down that meeting, Marcia Higgins (Ward 4), chair of the rules committee, encouraged a postponement until Sept. 3. In the interim, the committee – consisting of Higgins, Sabra Briere (Ward 1), Stephen Kunselman (Ward 3), Christopher Taylor (Ward 3), and mayor John Hieftje – was supposed to meet to consolidate input from other councilmembers and perhaps present a clean slate of proposed revisions.

Even though the rules committee didn’t meet, based on comments by Briere and Sumi Kailasapathy (Ward 1) at the Sunday night caucus on Sept. 1, they might push to eliminate all proposed revisions to the rules except for the one that had prompted the rules committee to consider some changes in the first place. The rules changes were prompted by a desire to allow for public commentary at council work sessions – to eliminate any question about whether councilmembers were engaged in deliberative interactions at those sessions. By allowing for public commentary at work sessions, the council would ensure compliance with Michigan’s Open Meetings Act. By enacting that rule change on Sept. 3, the council would be set for a fully deliberative work session on Sept. 9 – which is scheduled to be a joint session with the board of the DDA.

Three other significant items on the Sept. 3 agenda are tied together with an environmental thread. The council will be considering a resolution directing city staff to explore options with the Michigan Dept. of Environmental Quality and with the U.S. Environmental Protection Agency to help to set the clean-up requirements for 1,4-dioxane so that the Pall-Gelman plume is cleaned up to appropriate standards. The council will also be asked to act on a resolution urging the city’s employee retirement system to divest from fossil fuel companies. And finally, the council will consider a resolution directing staff to work with DTE on a pilot program for a “community solar” initiative.

More detail on other meeting agenda items is available on the city’s Legistar system. Readers can also follow the live meeting proceedings on Channel 16, streamed online by Community Television Network. The Chronicle will be filing live updates from city council chambers during the meeting, published in this article “below the fold.” The meeting is scheduled to start at 7 p.m. [Full Story]

Column: Math Is Hard, But This Ain’t Math

Even in a smaller-sized city like Ann Arbor, governmental issues can be fairly complex. Still, our local issues are typically simple enough that they can be mastered even by an ordinary citizen who can read words on a page.

Bezonki is terrible at math, which could explain why stuff is always exploding.

This panel is from The Chronicle’s monthly comic, Bezonki, which is drawn by local artist Alvey Jones, a partner at the WSG Gallery. Bezonki is really terrible at math, which could explain why stuff is always exploding during his adventures. (This image links to a listing of all of the Bezonki panels.)

However, over the last several weeks, a significant issue has been brought forward for debate that’s been portrayed by some local officials as far more complex than that.

For now, let’s not even think about what the issue might be. It could be zoning. Or dog parks. Or parking rates. Or police staffing levels. Or public art. Or express bus service. Or outdoor signs. Or none of those. Call it Issue X.

As I’ve chronicled the workings of Ann Arbor’s local governance recently, I’ve watched as two local representatives – one elected and one appointed – have seemed to portray Issue X as too mathematically challenging to grasp. I chalk that up to politics: If the math can be set aside, then the conversation can more easily move to pure politics – the strong suit of elected and appointed officials.

To be clear, Issue X is fraught with politics. But I don’t think that focusing on the politics of Issue X serves the interests of Ann Arbor residents.

Issue X is also fraught with mathematical calculations. But not everyone is comfortable with equations.

So in this column I’ll sketch out an analogy that I think, on a purely conceptual level, accurately captures the essence of Issue X – in non-mathematical, non-political terms. [Full Story]

Column: Let’s Get DDA Tax Capture Right

The Ann Arbor city council’s March 4, 2013 agenda includes a proposed change to the city ordinance (Chapter 7) governing the Ann Arbor Downtown Development Authority. I think most of those ordinance amendments have considerable merit, and warrant the council’s consideration. But it’s possible that the amendments themselves won’t receive their due consideration, because they’ll be dismissed as politically motivated.

Ann Arbor DDA TIF capture: Actual valuation (green line) of the increment compared to projected valuation in the TIF plan (blue bars corresponding to one of three estimates – pessimistic, realistic, optimistic.

Ann Arbor DDA tax increment finance (TIF) capture: Actual valuation (green line) of the increment compared to projected valuation in the DDA TIF plan (blue bars correspond to one of three estimates – pessimistic, realistic, and optimistic).

The Chapter 7 amendments are being proposed by Stephen Kunselman (Ward 3), who’s been joined by Sumi Kailasapathy (Ward 1) in sponsoring them. Kailasapathy’s co-sponsorship might help only incrementally to buffer the proposal against criticism that they’re motivated by Kunselman’s personal political aspirations.

On that theory, Kunselman is proposing revisions to Chapter 7 in an effort to raise his profile – in anticipation of a possible mayoral candidacy in 2014, and to shore up support for his Ward 3 re-election campaign his year. Given that he took out petitions for the 2013 Democratic primary on Nov. 3, 2012 – before the Nov. 6 general election – and collected signatures outside the polls, it’s pretty clear that he’s eager to seek re-election to his council seat. And last time around, in 2011, he campaigned as much against the DDA as he did against either of his two opponents. Kunselman is quoted in the February 2013 issue of the Ann Arbor Observer saying that if mayor John Hieftje runs for re-election next year, he’ll run against Hieftje.

However, on the theory that these proposed amendments are all about Stephen Kunselman and not about good public policy, I figure it’s also reasonable to toss in another possibility. Perhaps Kunselman is trying to raise his profile enough to win local blog Damn Arbor’s current poll as “most attractive councilmember.” The poll includes Kunselman as one of just four nominated councilmembers. It’s not clear to me if the voting is meant to include sartorial choices, but if it does, Kunselman could objectively be considered a natty dresser.

All kidding aside, it would be easy and convenient to dismiss the Chapter 7 amendments as a political ploy, and save the work of understanding some gnarly tax calculations. [You'll have a head start on this if you've read my previous column on the issue: "Tax Capture is a Varsity Sport."]

But I think at least some of the proposed changes to Chapter 7 have considerable merit, independent of Kunselman’s political ambitions. Millions of dollars are at stake. As councilmembers give this proposal initial consideration on March 4, I hope they focus on the tax-related amendments. [Full Story]

DDA to Mull Brownfield Policy

At its May 2, 2012 meeting, the DDA board was presented with a draft policy on supporting “brownfield” projects – a policy prompted by discussions at the board’s partnerships committee over the last few months. [.pdf of draft DDA brownfield policy] The board was not expected to act on the policy, and did not vote.

The committee has been discussing a proposal by Dan Ketelaar for support of a proposed development at 618 S. Main, which received a positive recommendation from the Ann Arbor planning commission on Jan. 19, 2012. The 7-story building would include 190 units for 231 bedrooms, plus two levels of parking for 121 vehicles. Ketelaar has estimated that the tax on the increment between the current valuation … [Full Story]

City Council on Art, DDA: Status Quo Is OK

Ann Arbor city council meeting (April 2, 2012) Part 2: At a long meeting that stretched until midnight, the council handled multiple items involving direction to city staff – one of which was related to enforcement of medical marijuana laws. All medical marijuana issues from the meeting are covered in Part 1 of The Chronicle’s meeting report.

Tony Derezinski (Ward 2) and Jane Lumm (Ward 2)

Ann Arbor city councilmembers Tony Derezinski (Ward 2) and Jane Lumm (Ward 2). (Photos by the writer.)

Neither of the other two resolutions involving direction to staff got much support on the council. Failing on a 3-7 vote was a resolution that would have directed the city attorney to provide a written opinion on the transfer of funds from the city’s street millage fund to the public art fund. The resolution got support only from its sponsors, Stephen Kunselman (Ward 3) and Sabra Briere (Ward 1), who were joined by Mike Anglin (Ward 5). The council postponed a separate item that would have authorized $150,000 for a piece of art that the public art commission has recommended for the lobby of the new Justice Center.

Failing on a 4-6 vote was a resolution related to the Ann Arbor Downtown Development Authority. It directed city staff to “to review, analyze, and report on the compliance of the DDA provided TIF calculation and capture amount” – an issue that relates to excess capture of taxes identified last year. The three who supported the resolution requesting an opinion on public art were joined by Jane Lumm (Ward 2) in supporting the TIF resolution. Only 10 councilmembers attended the meeting – Marcia Higgins (Ward 4) was absent. But even if Higgins had voted for the two resolutions, they still would have failed.

Generating some controversy were two items involving automobiles. The council gave final approval to changes in parking regulations that include a provision allowing the developer of a downtown project to meet minimum parking requirements without building parking spaces on site. The alternative is to make a payment in lieu of building parking spaces, or to sign a long-term contract to purchase monthly parking permits in the public parking system. Anglin voted against the ordinance change as well as the specific policy governing the payments in lieu of parking.

On another automobile-related item, Anglin was joined by Lumm in opposing a resolution that made a formal request to the Michigan Dept. of Transportation to convert a segment of Jackson Road between Maple Road and South Revena from four traffic lanes to three. That request will move forward. In another road-related item, the council unanimously approved a $3,647,344 construction contract for the first set of streets to be repaired in the 2012 program. That will be followed at the council’s next meeting, on April 16, by a second contract for an additional set of streets.

The council also gave approval to three different site plans – for Arbor Hills Crossing on Washtenaw Avenue, Les Voyageurs near Argo Pond, and Noodles & Co. on West Stadium Boulevard.

Public commentary at the end of the meeting featured several speakers who called the council’s attention to April as Sexual Assault Awareness Month. [Full Story]

Council Preview: Marijuana, Art, TIF

The Ann Arbor city council’s April 2, 2012 agenda will touch on three areas that have previously generated substantial debate on the council and throughout the community: (1) medical marijuana; (2) funding of public art; and (3) calculation of the tax increment finance (TIF) capture by the Ann Arbor Downtown Development Authority.

Ann Arbor city council agenda screenshot

Screen shot excerpt for April 2, 2012 Ann Arbor city council's online agenda. Image links to online agenda.

Medical marijuana is the subject of three different agenda items. The first has previously been postponed twice – at the council’s March 19 and March 5 meetings. It would direct the city attorney to delay enforcement of the Michigan Medical Marijuana Act, as well as the city’s licensing and zoning ordinances (with one exception), until the city council has acted on possible amendments to the city’s local ordinances on medical marijuana.

Amendments to those ordinances, as recommended by the city’s medical marijuana licensing board at its Jan. 31, 2012 meeting, are covered in two other items on the April 2 agenda. One item includes a series of amendments to the licensing ordinance, which in part help clarify the role of city staff, as compared to the licensing board, in the licensing process. The council will be considering the amendments for the first time at the April 2 meeting. If approved, the amendments would require a second and final approval by the council at a subsequent meeting before taking effect.

The other agenda item regarding the city’s ordinances on medical marijuana is not itself a proposed amendment. Instead, the council resolution would give direction to the city planning commission to review the recommended revision to the zoning regulations for medical marijuana businesses. That’s because it’s the purview of the city planning commission to review changes to the zoning code. The planning commission would then forward its recommendation to the city council.

Added to the agenda on Friday were two items that Stephen Kunselman (Ward 3) had announced at the council’s previous meeting, on March 19, that he would be bringing forward. The first is a resolution that would direct the city attorney to prepare a written opinion on the transfer of funds from the street millage fund to the city’s public art fund. It’s a point of contention that has a history going back at least two and a half years. Kunselman’s resolution refers to the context of the fiscal year 2013 budget, which the council will be presented by the city administrator on April 16. The council will need to act on that budget by the end of May.

Another item on the agenda that’s related to public art is the approval of a $150,000 sculpture for the interior of the new municipal center, in the Justice Center building. And finally, the report from the public art commission’s planning retreat, held on Feb. 26, 2012, is attached to the council’s agenda as a communication.

The second item added to the agenda by Kunselman on Friday directs the city staff to analyze the compliance of the Ann Arbor DDA with Chapter 7 of the city’s code, which is the legislation that established the DDA in 1982. Kunselman’s resolution asks for an analysis by Ann Arbor city staff of the DDA’s capture of taxes in its tax increment finance (TIF) district. The DDA is slated on April 9 to present its board-approved FY 2013 budget at a city council working session.

Chapter 7 appears to impose a limit on the amount of TIF capture, based on the rate of growth of property valuation inside the DDA district. Last year, when the relevance of the ordinance was pointed out by city financial staff, the DDA returned over $400,000 to other taxing authorities in the district. The city of Ann Arbor waived its share of over $700,000.

However, the DDA subsequently has contended that the money it reimbursed to other taxing authorities was not required. The DDA claims that Chapter 7 does not impose a limit on TIF capture, but rather addresses how money would be returned to other taxing authorities, if the DDA did not use the money. At stake this year and in future years is several hundred thousand dollars, depending on how the calculations are done. The Ann Arbor District Library, one of the taxing authorities whose taxes are subject to DDA capture, has publicly stated that it has not changed its original legal position – which interprets Chapter 7 as a limit on TIF capture and questions the methodology used by the DDA to calculate the excess.

The April 2 Ann Arbor city council meeting begins at 7 p.m. in city council chambers on the second floor of city hall, located at 301 E. Huron. The meetings are broadcast live on Channel 16 of the Community Television Network. The Channel 16 broadcast is also streamed live on the Internet. [Full Story]

Committee Briefed on Downtown Sidewalks

As the Nov. 8, 2011 general election approaches, the Ann Arbor Downtown Development Authority is considering the implications that a ballot question might have on the DDA’s tax increment finance (TIF) district. The ballot question asks voters to approve a sidewalk repair millage that would levy a new tax of 0.125 mills. A mill is $1 for every $1,000 of a property’s taxable value.


Part of the discussion at the DDA transportation, operations and construction committee meeting included the “two-inch” rule on vertical sidewalk displacement. A law working its way through the state legislature would establish that a city is presumed to have maintained a sidewalk properly, but that can be rebutted by evidence showing that the proximate cause of an injury was a “vertical discontinuity” defect of 2 inches or more in the sidewalk. (Photo by the writer.)

Members of the DDA’s transportation, operations and construction committee were briefed on that and a number of other issues at its regular monthly meeting on Wednesday, Sept. 28. (The committee has a combined function for what were at different times in the past three separate committees.)

The committee was also briefed on: (1) the status of the getDowntown program; (2) a parking communications plan aimed at evening employees; (3) the financial picture for the city’s public parking system; and (4) the results of a parking customer satisfaction survey.

Committee members were somewhat surprised and disappointed to learn that the city council’s policy on the use of proceeds from the proposed sidewalk millage would place restrictions on using millage money inside the boundaries of the DDA’s TIF district.

The city council’s Aug. 4 resolution authorizing ballot language for the proposed 0.125 mill tax places a limitation on the use of funds inside the TIF district, though the wording on the ballot does not include the limitation. The resolution states that inside the DDA district, only those sidewalks adjacent to single- and two-family houses (but not other commercial properties) would be included in a millage-supported sidewalk repair program.

A resolution of intent on the use of the sidewalk millage, which includes the restriction inside the DDA TIF district, was postponed from the council’s Sept. 19 meeting, and will be taken up by the council again on Oct. 3.

At their Wednesday meeting, DDA committee members were also apprised that the getDowntown program, which draws the majority of its funding from the DDA, will not be folded into the DDA as had previously been planned. Instead, the program’s two staff members will remain employees of the Ann Arbor Transportation Authority. The getDowntown program’s status has been a question since the Ann Arbor Area Chamber of Commerce (now the Ann Arbor/Ypsilanti Regional Chamber) two years ago pulled out of the four-way partnership that supported getDowntown. The remaining three partners are the city of Ann Arbor, the DDA and the AATA.

The committee was also briefed on elements of the DDA’s communications plan that’s aimed at downtown evening employees, in connection with possibly extending parking meter enforcement hours past 6 p.m. Other parking-related issues on the committee’s agenda included a structure-by-structure breakdown of the financial performance of the city’s parking garages, as well as an overview of the results of a regular parking system survey used to evaluate Republic Parking, the DDA’s parking contractor.

This report focuses on sidewalks and getDowntown. [Full Story]

Library Weighs DDA Excess Tax Decision

During her written director’s report for the Ann Arbor District Library’s Aug. 15, 2011 board meeting, AADL director Josie Parker noted that the library is considering the legal and financial implications of the Ann Arbor Downtown Development Authority’s decision regarding “excess” taxes captured in the DDA’s tax increment finance (TIF) district. The AADL board began its meeting with a closed session to discuss the opinion of its legal counsel, as well as for labor negotiations. The board did not discuss the issue during the public portion of its meeting, but scheduled another closed session to hear the opinion of legal counsel at its Sept. 19 meeting.

At issue is the interpretation of a city ordinance about TIF capture in the DDA’s downtown district, … [Full Story]

Ann Arbor DDA: No Redistribution Required

Ann Arbor Downtown Development Authority special board meeting (July 27, 2011): At a special meeting, the Ann Arbor Downtown Development Authority board passed a resolution stating that it was accepting the general guidance of its legal counsel, Jerry Lax: The DDA does not believe that any redistribution of captured taxes to relevant taxing authorities is required.

At issue is the interpretation of a city ordinance about tax increment finance (TIF) capture in the DDA’s downtown district.

The decision at the special meeting, which was unanimously approved by the nine board members present, came after a closed session with Lax that lasted nearly an hour. The language of the resolution is somewhat vague, citing the city’s ordinance only in general terms and stating that “no redistribution to relevant taxing authorities is required.”

In separate phone interviews with The Chronicle following the meeting, three board members confirmed that the DDA’s position, as expressed in the resolution, is that the city’s ordinance does not require the DDA to redistribute TIF money to other taxing authorities. The DDA’s interpretation would render moot any argument about the method used in calculating that redistribution.

Earlier this year, the DDA had calculated that the city of Ann Arbor – as one of the taxing authorities – was owed $711,767, but the city waived payment of that amount. The DDA did return a total of $473,000 to Washtenaw County, Washtenaw Community College, and the Ann Arbor District Library. The resolution passed at Wednesday’s special meeting is consistent with the DDA’s position that the return of that money was not actually required.

Executives from the library and WCC, in phone interviews with The Chronicle following Wednesday’s meeting, indicated that they’ll be following up with a response to the DDA board’s decision. [Full Story]

DDA: No TIF Recalculation

At a special meeting held on July 27, 2011, the Ann Arbor Downtown Development Authority board passed a resolution stating that it was accepting the general guidance of its legal counsel, Jerry Lax: The DDA will not be changing the calculations on which it based the return (earlier this year) of excess taxes captured through its tax increment finance (TIF) district. The decision came after a closed session with Lax that lasted nearly an hour. The language of the resolution is somewhat vague, stating that “no redistribution to relevant taxing authorities is required.”

Some background: At its May 2, 2011 meeting, as it was poised to ratify a new contract with the city of Ann Arbor, under which it … [Full Story]

Column: Tax Capture Is a Varsity Sport

On July 7, 2011 at the Michigan League on the University of Michigan campus, representatives of “The Varsity at Ann Arbor” hosted a gathering of citizens to introduce them to the planned 13-story building. The project is proposed for Washington Street, between the 411 Lofts building and the First Baptist Church, and will be purpose-built to house 418 students in 173 rental units.

Graph on a football

When you drop the ball, even if it's shaped more like a rugby ball than a football, you still have a chance to recover the fumble.

To me, the highlight of that meeting had nothing to do with the site plan or the building design – which has evolved somewhat since The Varsity’s review on June 22 by the city’s newly created design review board.

Instead, I think the most exciting play of the citizen participation game was a kind of Hail Mary forward pass flung down the field by John Floyd, a former candidate for city council. The ball was snagged out of the air, just before it hit the turf, by Tom Heywood, executive director of the State Street Area Association.

I don’t think Floyd and Heywood play for the same team – nobody was wearing numbered jerseys at the meeting – so that might count as an interception, not a completed forward pass.

Floyd’s Hail Mary was this question: What is the benefit to Ann Arbor’s bottom line, if the new taxable value from The Varsity is subject to “capture” through the Ann Arbor Downtown Development Authority’s TIF district? [Full Story]

City Accepts Prior Payment for Excess TIF

At the May 31, 2011 session of its meeting that had begun two week before, on May 16, resumed briefly on May 23, only to be immediately recessed, the Ann Arbor city council agreed to accept prior contributions of the Ann Arbor Downtown Development Authority toward city of Ann Arbor projects as payment for the city’s share of excess tax increment finance (TIF) capture that the DDA has received since 2003.

At a special meeting on Friday, May 20, the DDA had calculated that a total of $1,185,132 should be returned to taxing authorities that levy property taxes in the downtown district. The city’s share of that is $711,767. The council’s resolution states that the acceptance of prior contributions to city … [Full Story]