County Commissioners Debate Aerotropolis

Washtenaw County Board of Commissioners administrative briefing (March 11, 2009): During their informal administrative briefing, county commissioners engaged in a spirited debate on Wednesday about the value of joining a regional economic development effort focused on a corridor of airports. The item is on the agenda for the March 18 Ways & Means Committee, which consists of all commissioners and meets immediately prior to the regular board meeting.

The Aerotropolis Development Corp. is an economic development project targeting growth in the corridor between Willow Run Airport on the county’s east side and Detroit Metro Airport. In early November 2008, Wayne County executive Bob Ficano made a presentation at a board working session about the project, but the proposal never was brought up for a vote. At the time, several commissioners expressed concern at the cost of joining – a $150,000 annual fee.

Since then, the fee has been lowered to $50,000 for the county, and two local governments – Ypsilanti city council and the Ypsilanti Township board of trustees – have voted to join the project independently. The cost for those municipalities is $25,000 per year.

Rolland Sizemore Jr., the board’s chairman, began the discussion by saying he felt that with the lower fee, the county would be able to see a return on its investment. The board is being asked to make a two-year commitment to the project, for a total of $100,000. The return would come through tax revenues on new development.

Commissioner Conan Smith countered by saying he’d be shocked if the county could recoup that amount. He said he had asked for information quantifying a return on investment, but hadn’t gotten it. “I’ll be voting no,” he said.

When queried by commissioner Kristin Judge about how much the county had already invested in this project, county administrator Bob Guenzel said they’d paid $50,000 last year for a feasibility study, and had contributed staff time to the project as well. Guenzel, who serves on the aerotropolis task force, said the argument for joining is that the entity would provide marketing for the area, particularly of properties in Ypsilanti and Ypsilanti Township.

Saying he was very skeptical of the project, Smith raised several concerns. The county would need to see $50 million in development over two years in order to recoup its costs – he doubted that would happen. He said he’s seen no investment from Wayne County in developing the east-west rail project, and he believes rail transit would be the fastest way to bring more economic development to the east side of the county. (This point prompted commissioner Jeff Irwin to ask, “Would you be happier if it was named AeRailtropolis?”)

Smith also pointed out that the state legislation needed to make the project financially viable still hadn’t passed. The legislation is needed to allow the aerotropolis to set up a Local Development Finance Authority, which would allow it to capture tax revenues. “I’m worried that 10 years from now we’ll say it’s the worst half-million we’ve spent,” Smith said.

Several commissioners defended the project, and said they’d be voting to join. Sizemore said he thought that joining would provide opportunities to partner with Wayne County, and that Washtenaw could benefit from having someone on the aerotropolis board to give this area’s interests a stronger voice.

Commissioner Wes Prater, noting that the project in some form had been around for years, said it was worth giving it a try. He said that Willow Run Airport was underutilized, and that there were opportunities for growth there since the project’s initial focus would be on the freight and logistics industries. He later noted that the real value for the project would come from job creation, not the tax revenue that would flow into the county.

Ken Schwartz also said he planned to support the project.

Some commissioners were hesitant. Judge wondered about timing. In the current economic climate when the county is facing budget deficits, she asked, is it the right time to do long-term projects like this? Commissioner Jessica Ping asked whether they could table the decision until next year, saying it would be hard to support the expenditure while they’re also making budget cuts.

Guenzel said that if they joined now, the $50,000 entry fee would be waived. He also noted that there was a six-month opt-out clause in the agreement. Sizemore said he was reluctant to table the vote, adding that he wanted to have a decision one way or another.

Irwin said he was on the fence. He shared some of Smith’s concerns, but said it was meaningful that the local communities on the county’s east side had opted in. He said he was fairly certain they wouldn’t get their investment back quickly, but noted that the lower annual fee made a return on investment more attainable, and that if a developer decides to locate a project here, it would very likely be a sizeable one. He later said that another concern he had related to zoning – there’s been no action to streamline zoning in the aerotropolis district, and at this point local governments hadn’t given up their zoning rights, which could lead to a “free for all.”

Some of the discussion focused on where the funds would come from, if the county decided to join. Smith proposed asking the Ann Arbor and Ypsilanti convention & visitors bureaus to pay, noting that the county had recently approved raising the accommodations tax that funds those entities. The tax increase is expected to add $3 million to the Ann Arbor CVB’s revenues annually, Smith said. “They’ve got a lot of extra money coming into their coffers. We don’t.”

Smith later suggested another alternative: Paying for the fee out of the amount allocated for the Eastern Leaders Group, a partnership of the county, Eastern Michigan University, Ann Arbor Spark and several other governmental, business and educational groups. He said that would make sense, since the eastern side of the county would benefit most from the aerotropolis project. Irwin noted that the ELG didn’t spend the money that the county had budgeted for them last year, and that it reverted to the general fund. There is $300,000 in the county budget allocated for that effort, in addition to staff support time.

Guenzel said they’d planned to pay for it out of the funds for the county Employment Training & Community Services department. When asked by Kristin Judge what ETCS would otherwise spend the money on, Guenzel said the department was expecting several million dollars in federal stimulus funding, the implication being they’d have sufficient resources to support their programs.

Mark Ouimet, who had earlier commented that the board would need to view the project as a long-term commitment, said it was important to listen to Smith’s concerns about where the funding would come from.

Toward the end of the discussion, Ping said she thought they should leave it on the agenda for a vote. Smith then asked whether they really wanted to have this kind of discussion on TV, where Wayne County will be “paying attention.” The board meetings, unlike these administrative briefings, are broadcast on Community Television Network. [Editor's note: Smith did acknowledge that The Chronicle would be reporting on this debate, though it seems clear he's betting that Wayne County officials won't pay attention to this particular article.]

Commissioners present: Jeff Irwin, Kristin Judge, Mark Ouimet, Jessica Ping, Wes Prater, Ken Schwartz, Rolland Sizemore Jr., Conan Smith