DDA Approves Grant for Zingerman’s

New officers elected amid uncertainty on board composition

Ann Arbor Downtown Development Authority board meeting (July 7, 2010): In the main business at its regular monthly meeting, the DDA board approved a grant of up to $407,000 in support of a brownfield application by Zingerman’s Deli, which the deli is making to the state of Michigan. The board’s deliberations focused on the public improvements to sidewalks, curb ramps and signage as contrasted with the funding for LEED certification costs – a question of public versus private benefit.

John Splitt Ann Arbor Downtown Development Authority

At his last meeting as chair of the Ann Arbor Downtown Development Authority board, John Splitt shows off the tchotchke of appreciation he was given by executive director Susan Pollay. The board is a piece of the kind of lumber currently being used for the earth retention system in construction of the Fifth Avenue underground parking garage. To the right of the frame is Joan Lowenstein, who was elected chair of the board for the coming year. (Photo by the writer.)

The board also approved a recommendation for details of a payment-in-lieu-of-parking (PILOP) program that allows developers to build fewer parking spaces than otherwise prescribed by the zoning code. The program recommended by the DDA allows for developers to replace required on-site spaces with monthly permits – plus a 25% surcharge – in parking structures managed by the DDA.

The DDA made the recommendation to the city’s planning department because the department had requested the DDA’s input on PILOP after the city’s new rezoning of downtown A2D2 was approved last year by city council.

The board also approved revisions to the FY 2010 budget so that expenditures do not exceed budgeted amounts.

Immediately following the regular monthly meeting, the board held its annual meeting, during which executive director Susan Pollay ticked through the significant accomplishments of the board over the last year. Officers elected for the next year are: chair, Joan Lowenstein; vice chair, Gary Boren; treasurer, Roger Hewitt; secretary, Russ Collins.

Board member Newcombe Clark pointedly abstained from each of the four officer votes.

Grant to Zingerman’s Deli

A planned expansion to Zingerman’s Deli is currently working its way through the city’s site plan approval process. It has already won approval from the city’s planning commission and will next come before the city council. Because the building is located in a historic district, the city’s historic district commission will need to give final approval. A previous similar proposal by Zingerman’s to expand the deli had started the approval process with the historic district commission, and that body had rejected the proposal in the summer of 2008.

The roughly $6.7 million project calls for tearing down a small fire-damaged house at 322 E. Kingsley – directly behind the brick deli building – and putting up a two-story, 10,340-square-foot addition that would be connected to the 5,107-square-foot deli building via a glass atrium.

The two-story “orange house” located at 420 Detroit, between the deli building and Zingerman’s Next Door, will be worked into the design, according to the proposal. The preservation of the orange house, also known as the Annex, is one key difference between the earlier project rejected by the historic district commission and this one.

Previous Chronicle coverage of the Zingerman’s Deli expansion includes:

Zingerman’s Project Seeks Brownfield Status

Zingerman’s Deli Expansion Moves Ahead

Zingerman’s: Making it Right for the HDC

For its brownfield application, Zingerman’s is requesting $407,000 from the DDA, which is the estimated tax-increment on the improvement to the property over the course of 15 years. The money would be used for improvements to sidewalks, sidewalk ramps, signage as well as for costs associated with LEED certification for the Zingerman’s expansion.

Zingerman’s: The Zingerman’s Deli Request

From a letter sent by Rick Strutz, a managing partner at the deli, the dollar amounts requested by Zingerman’s are:

  • $100,000 to reimburse Zingerman’s for costs associated with LEED certification.
  • $160,000 for costs associated with on-site water detention.
  • $50,000 to install ADA-compliant curb ramps at the Detroit and Kingsley intersection.
  • $45,000 for sidewalk removal and replacement.
  • $10,000 for wayfinding signs pointing to the deli, plus a roof sign on the addition that can be picked up by Google maps.
  • Several other items with a cost to-be-determined, including parking spaces for contractors and a staging area, plus replacement or repair of brick pavers, curbs and water/sewer lines on Detroit Street between Kingsley and Catherine.

Paul Saginaw a co-founder of Zingerman’s, led off public commentary at the DDA board meeting by noting a bit of trivia: both Zingerman’s and the Ann Arbor Downtown Development Authority were founded in 1982. Around that time, he recalled, the Briarwood Mall had just been built and had “knocked the wind out of downtown.”

Saginaw thanked the DDA for their support of downtown, which Zingerman’s had taken advantage of, ticking off a number of specific programs: the go!pass program that some of their employees use for transportation to work, the energy audit program, the wayfinding signs and creation of a handicapped parking spot at Community High School.

Zingerman’s had taken in less than $100 on its first day of business, Saginaw said. But now there were 16 partners in eight different businesses that employ over 600 employees. He described the deli operation as an “anchor” for Kerrytown. There are more than 200 jobs at the deli alone, he said, and the deli attracts more visitors to Ann Arbor than any other for-profit business. Ten percent of profits go to Washtnaw County nonprofits, he said. Zingerman’s founded Food Gatherers and the Delonis Community Kitchen program.

Saginaw said they’d spend the last four years struggling through an attempt to expand the operation. He felt that the expansion is really in the “sweet spot” of the DDA strategy for helping to create a sense of uniqueness and place. It would increase downtown commercial activity and strengthen other Kerrytown businesses. He asked for the DDA to partner on the brownfield application, saying that the board could count on Zingerman’s to follow through. Zingerman’s keeps its promises and will be good stewards of the public money, he concluded.

Saginaw was followed to the podium by Grace Singleton, who is a managing partner of the deli. Singleton told the board she’d been a partner at the deli for eight years. The deli has been at that location for 29 years, she said, and they wanted to stay there another 29 years. Based on the experience of the last few years, she said, they expected that the expansion would create additional jobs over the next few years. They’d started with two employees, but had added 170 staff people in the last five years. They estimated that there would be an additional 40 jobs added over the next five years.

In their first year, they’d made 2,000 sandwiches, compared to an estimated 300,000 sandwiches last year – out of the same little kitchen, Singleton said. She described how they’d expanded the capacity of the kitchen with one-off changes to the equipment line. They had added outdoor seating, but she said that the approach had been somewhat “higgledy piggledy.” They simply couldn’t fit more sandwiches on the grill at this point.

So the expansion is an attempt to make it one beautiful attractive build-out, Singleton said, that would be comprehensive. The idea is to move the bulk of the heavy kitchen production out of  the deli building – that activity was really “beating up” the building, she said. They were also planning to use a lot of green energy design features, she said. Restaurants are high users of water and generate a lot of heat, and they were looking at ways of capturing some of that heat.

To undertake the expansion, she said, they would need to stay open, and that would be a challenge on the tight quarters of the site. It would have to be a “surgical” operation, she said. They’re trying to preserve the Annex [the "orange house"], which adds to the challenge and the difficulty and cost per square foot, Singleton said. But preserving that building, she said, is what they think will allow the project to go forward, and they hope to be able to remain on that site. She hoped the DDA would help them remain on the site.

During his public commentary, Ann Arbor resident Brad Mikus began by observing that the downtown looks really nice – he noted that, because he allowed that he frequently stood before the board and offered criticism. But it could be better, he said, and that’s why he was there.

On the topic of the Zingerman’s expansion, he noted that the resolution indicated that taxes from the part of Zingerman’s property located in the DDA’s TIF (tax increment financing) district were estimated to increase by $407,000 over 15 years. The way it’s written, he said, it seems like the DDA was committing to the $407,000 now. There’s a disconnect there, he said, because $407,000 over the next 15 years is worth far less than $407,000 now.  He observed that Zingerman’s was a successful company and that he suggested cutting support for LEED certification, which is estimated to cost $160,000, but leaving the funding for the other projects in place.

During his report from the Downtown Citizens Advisory Commission, Ray Detter affirmed support by the commission for the project, calling Zingerman’s a special asset to Kerrytown and the downtown area.

Zingerman’s: Board Deliberations

The deliberations led off with Newcombe Clark and Joan Lowenstein recusing themselves, citing conflicts of interest.

Sandi Smith noted that at the state level, they liked to see the local support of brownfield applications come in the form of a TIF waiver, instead of taking the TIF capture and making a grant. So she asked for some clarification about why the DDA was taking the route of awarding a grant.

Roger Hewitt responded to Smith, as the chair of the operations committee, which had reviewed the proposal. He began by noting that the proposal should have probably been reviewed by the DDA’s partnerships committee, not the operations committee, but the operations committee was the only committee with a meeting on its schedule before the meeting of the whole board.

Hewitt said it used to be the case that TIF grants were given by the DDA to stimulate downtown development, but they’d been abolished 3-4 years ago. It became clear, he said, that any grant of TIF funds was a subjective decision. Whether a project was approved, he said, might depend on how strong an advocate there was for a particular project.

So the DDA had decided it would be appropriate to spend its public monies on public projects, Hewitt said. And that was why, Hewitt explained, that they were looking for ways to spend TIF revenue on public improvements, rather than in a way that benefited a private entity. Hewitt said that approving a grant directly to a private entity potentially opened up the DDA to requests for every new project downtown. And that’s why they’d taken the approach of looking at a grant to support public improvements around Zingerman’s.

Jennifer S. Hall indicated that she felt there was a difference between this grant and those grants awarded by the partnerships committee – the brownfield grant would require environmental remediation, which was a public benefit. Hall picked up on the note in the resolution that indicated both the city of Ann Arbor and the DDA would be making a contribution. Hall wanted to know if the city had approved the brownfield plan. Smith responded to Hall, saying that the brownfield review committee had recommended approval, but it had not yet been approved by the city council. [Smith serves on the city council and the brownfield review committee.]

A Zingerman’s representative and Matt Naud, the city of Ann Arbor’s environmental coordinator, answered Hall’s question by saying that the total TIF capture of city millages for the parcel over the course of 15 years is estimated to be $400,000.

[The site of the expansion includes areas both inside and outside the DDA TIF district. The brownfield plan will include a TIF capture of its own, but the DDA TIF is first in line for capture. The brownfield TIF outside the DDA district is the portion that the city will be contributing.]

Hall asked if the DDA had supported other brownfield projects, and Susan Pollay told her that the DDA supported a brownfield application for a project at Ashley and Washington, called Tierra on Ashley. Tierra is trying to achieve platinum LEED certification [the highest level of certification], but due to market conditions, Pollay said, the project has not yet been constructed. Pollay said that the DDA contribution to Tierra had come in the form of parking and other public improvements, similar to what was proposed for Zingerman’s.

Hall wanted to know some details about the wayfinding signs that were specified as part of the public improvements. She’d recalled that when the new wayfinding signs were installed, there’d been discussion about adding Zingerman’s because so many visitors asked for directions to the deli. But they’d decided not to add private entities to the signs, because that would open the door to other private entities as well.

Hewitt indicated that the new wayfinding signs indicated in the resolution would not specify Zingerman’s specifically, but rather would point to Kerrytown. Hall pointed out that a letter from Zingerman’s to the DDA making the request specifically asked for wayfinding signs to Zingerman’s, in addition to a logo on the roof so that GoogleMaps could pick it up. Hewitt assured Hall that the intent was to stick with the kind of wayfinding signs that are already in place.

Gary Boren said he strongly supported the application and pointed out that one of the “quirks” of the brownfield program is that it does not necessarily entail that there is remediation of toxic pollutants. In the case of Zingerman’s application, Boren explained, two of the buildings – the burned-out building on Kingsley and the Annex – had been declared “functionally obsolete” by the city assessor. Boren stressed that addressing functionally obsolete buildings is an above-board stated purpose of the brownfield program.

Ann Arbor resident Brad Mikus chats with Paul Saginaw, co-founder of Zingerman's. Mikus had suggested during public commentary that the DDA not fund the cost for the LEED certification requested by Zingerman's.

Boren said he never really understood why the DDA no longer used the strategy of forgoing TIF capture as opposed to estimating a dollar amount and awarding grants. But partly in response to a the question from Brad Mikus during public commentary, Boren clarified that the $407,000 was a good-faith estimate of how much the TIF capture would yield over 15 years, due to the improvements on the property.

Boren allowed that no rigorous time-value cost of money had been performed, but said if you took  what an actual TIF capture would yield – if it were to be granted in perpetuity, not just 15 years – and added 5% interest, the $407,000 figure was what you get.

Boren said he strongly supported the project, because Zingerman’s – like the Michigan Theater – is one of the identifying jewels of Ann Arbor. Zingerman’s is “not holding the project hostage,” making its completion contingent on getting the grant, he said.

John Mouat said he also supported the project, and confirmed with Smith that the work proposed was considered a local match for the brownfield application and not just a contribution. Naud clarified that the DDA’s grant, plus the city’s brownfield TIF, would all be considered local matches for Zingerman’s application to the state for Michigan Business Tax credits. The state wanted to make sure that the locals had as much “skin in the game” as the state.

In response to a follow-up from Mouat, Naud said that the state was not necessarily looking for a dollar-for-dollar match, but that they were looking to see that the locals were providing as much as they could.

Mouat said he did have some concern about the funding for the LEED certification that Zingerman’s is requesting. To him, he said, it did cross a bit of a line. The other items were more clearly public improvements, as opposed to a benefit specifically for Zingerman’s. LEED certification is also a large dollar amount, Mouat noted.

Mayor John Hieftje inquired about the level of LEED certification that Zingerman’s is seeking. Singleton explained that one challenge is the cost, but she believed that without changing the basic plan they would achieve the LEED silver standard, and gold might be within reach. Hieftje said he was certain that Zingerman’s would follow through, but wanted to make the reimbursement of the LEED certification costs contingent on actual achievement of at least silver level LEED certification. An amendment to that effect was accepted as friendly to the original resolution.

Smith also offered a friendly amendment that was accepted that specified the amount of the grant would be “up to” $407,000. Smith stressed that the amount of the grant for the work was roughly equivalent to the cost of renovating the Annex ["orange house"], which would entail picking it up, moving it off  the foundation, rebuilding the foundation, moving the house to its original location, and renovating the house. Because the work was being undertaken in a historic district, Smith said, the estimated cost would be around $500,000.

Keith Orr indicated that his concerns had been addressed and he felt like it fit well within the mission of the DDA.

Hall said she supported the project as well, but wondered how compatible the public sidewalk and ramp work proposed as part of the Zingerman’s project is physically in the scope of the Fifth and Division street improvements currently underway. Pollay said that an eventual Phase II part of the Fifth and Division project would include the area. That Phase II of the project, Pollay said, is very much about all the brick in the area. The conceptual plan for Phase II, which has been approved by the board, Pollay said, is to repair the bricked streets and to restore brick in places that have been paved over with asphalt.

Hall was concerned that the sidewalk improvements undertaken as part of the Zingerman’s brownfield application be compatible with eventual work done in Phase II of the Fifth and Division project. She didn’t want the work to be re-done. Pollay indicated that the work would be planned with Phase II in mind – any challenges were related to the brick streets, she said.

Hall got some clarification about how the LEED certification costs for Zingerman’s would be handled under the board’s policy that rescinds grants after two years if they’re not spent. Pollay explained that the board policy was not made explicit in the language of every resolution, but it would apply in this case, meaning that if the money was not spent by July 2012, the grant would expire.

With that, Leah Gunn called the question and the board voted.

Outcome: The DDA board voted unanimously to approve the grant requested by Zingerman’s.

At the conclusion of the meeting, Hieftje indicated he wanted to make clear that he supported the project because of Zingerman’s record in the community and that he would not support such a request for just anybody.

Payment in Lieu of Parking (PILOP)

Last year’s passage of the A2D2 rezoning of the downtown area by the Ann Arbor city council included a provision that allowed for developers to make a payment instead of actually constructing required parking on site. The relevant part of the city code comes from Chapter 59 [emphasis added]:

5:169.  Special parking districts. Lots located in the D1 or D2 downtown zoning districts are considered a special parking district and are subject to the following standards:

(1) No off-street motor vehicle parking is required in the special parking district for structures which do not exceed the normal maximum permitted usable floor area or for structures zoned PUD with usable floor area which does not exceed 300 percent of the lot area. Structures which exceed the normal maximum usable floor area by providing floor area premiums, or PUD-zoned structures that exceed 300 percent of lot area, shall provide parking spaces for the usable floor area in excess of the normal maximum permitted. This parking shall be provided at a rate of 1 off-street parking space for each 1,000 square feet of usable floor area. Each parking space reserved, signed and enforced for a car-sharing service may count as four (4) required motor vehicle parking spaces.
(3) The required bicycle or motor vehicle parking shall be provided on-site, off-site as described in this section, or by the payment of a contribution in lieu of required parking consistent with the formula adopted by City Council, or any combination thereof, consistent with the requirements of this section. The per-space payment shall be that required by Council resolution at the time of payment.

Wendy Rampson, head of the city’s planning staff, had asked the DDA to provide a recommendation on the formula for the payment in lieu.

Before the DDA board as a resolution was a recommendation to the city council to implement a PILOP program that has its main feature a 25% surcharge on a monthly parking permit in a DDA-managed parking structure. That is, instead of building N spaces of required parking as part of a downtown development project, a developer could instead purchase N monthly permits – with an added surcharge – in a DDA-managed parking structure.

PILOP: Public Commentary

During his public commentary, Brad Mikus questioned whether the recommendation for the PILOP that would use a 25% surcharge on monthly permits was adequate, if the DDA needed to actually use the proceeds from the program to build additional parking spaces. His math went like this: a 25% surcharge on a $130/month permit translates into about $160 a month, or $2,000 a year in round numbers. For the new underground parking structure, he said, the budget was $59 million for 677 spots, or roughly $90,000 per spot.

The $2,000 per year would come nowhere close to the cost of actually constructing parking spaces, Mikus concluded.

PILOP: Board Discussion

Roger Hewitt emphasized that the resolution being considered was just a recommendation – the city council would need to make the final decision.

Jennifer S. Hall wanted to know how the details of the PILOP became city policy. Would it be written into the city’s ordinances? Hall was also concerned about the adequacy of the surcharge to fund actual construction of parking spaces, if that were needed.

Hewitt responded to the concern about the adequacy of revenues from the PILOP to fund new construction of parking spaces by pointing out that the entire parking system funds new construction. Hall returned to her point that the challenge is to set a rate so that it’s not so much of a bargain that every developer takes the PILOP option.

Hewitt then addressed the “bargain” part of Hall’s point by pointing out that there’s a disincentive to developers to pay whatever the market rate is for a monthly permit – one alternative is to construct parking on-site and to charge whatever residents of a project are willing to pay, with all revenues going to the developer.

Newcombe Clark asked whether the DDA could be compelled to enter into a PILOP agreement. He was concerned about a possibility that such an agreement could be compelled, when the DDA on its own did not have the ability to build a parking deck – that would require city council approval. The DDA can’t add to the supply without city council approval, he said.

Hewitt acknowledged that there might be a market demand for DDA parking spaces that it did not have. Hewitt suggested that language be added to the recommendation to the effect that the DDA would enter into a PILOP agreement “if it is able to do so.”

Hall worried that if the PILOP were included in the zoning regulations, the DDA might not have an actual say about a PILOP for a project, because the process runs through the city planning commission and the city council.

John Splitt emphasized that the resolution was a recommendation to the city council and that it was not going to be “on a stone tablet.”

A question from John Hieftje to Susan Pollay addressed one of the points raised by Brad Mikus during public commentary: What is the actual cost per parking space in the new underground garage? Pollay explained that 1/4 to 1/3 of the cost of the project is unrelated to parking per se. Much of the project relates to utilities improvements, and she ventured an estimate that for the parking itself, it worked out to $57,000 to $59,000 per space. By way of comparison to above-ground spaces, she said that the recent Fourth & William addition that the DDA had undertaken had worked out to be “in the high 30s” – that had been pure parking, with no additional footings or elevators, she said. Russ Collins ventured a rule of thumb he’d used, that above-ground spaces cost $45,000 apiece, while underground spaces cost $55,000 apiece to construct.

John Mouat pointed out that revenues from the PILOP program might be an attractive source of revenue to fund alternative transportation.

Outcome: The board unanimously approved the recommendation that the PILOP program be based on a monthly permit with a 25% surcharge.

Budget Adjustment

Before the board was a resolution that modified the 2009-10 budget, whcih ended June 30, to account for items that had cost more than they’d originally been budgeted for. Hewitt explained that the budget modifications are required by state statute so that expenditures don’t exceed the budgeted amounts.

Most of the items receiving adjustment were relatively small dollar amounts. But one was fairly significant, which Hewitt indicated they should have caught when the budget was modified earlier in the year. Costs associated with the wayfinding signage project had been anticipated to be only $15,000 for the 2009-10 budget year, but the timing of the project had resulted in $850,00o being spent.

Another adjusted line item with a significant dollar amount was a $400,000 grant to Avalon Housing for rehabilitation of properties. Questions from John Splitt and Sandi Smith clarified that the $400,000 was not for the Near North project.

Outcome: Adjustments to the 2009-10 budget were unanimously approved.

Parking Demand

A standard feature of DDA board meetings is a report out from the operations committee meeting on the most recent parking report. During his public commentary, Brad Mikus noted that the May 2010 numbers showed that for the third month in a row, hourly patrons had decreased compared to the previous year. [In May 2009 – which had the same number of business days as May 2010 – 184,821 hourly patrons used the parking system, as compared to the 169,466 hourly patrons who parked in May 2010.]

In his report to the board, Roger Hewitt attributed the decrease in hourly patrons to the loss of all the spots on the Library Lot, where an underground parking structure is being built. Total revenues, however, continue to show slight increases: $1,145,740 compared to $1,064,284. The revenue increase, Hewitt explained, was due to the parking rate increase.

Partnerships Committee

Russ Collins gave the report out from the partnerships committee.

Partnerships: Energy Saving Grants

Highlights included the fact that the energy saving grant program would start its third year in 2010-11. In 2009-10, Collins said, 13 audits had been completed, with four owners now contemplating renovations based on those audits. The program is structured with two phases, Collins explained, with the DDA helping to fund an energy audit in the first phase and also a portion of actual improvements in the second phase.

In the 2008-09 fiscal year, 32 audits had been completed and energy improvements had been implemented in 17 buildings, Collins said, costing $84,000. The improvements are projected to save $32,000 a year, for a payback on the investment of around 2.5 years.

Partnerships: Shelter Association Grant Request

Collins reported that the Shelter Association of Washtenaw County had asked for a significant grant, as the organization began to transition from a reliance on state and city funding, because that funding had started to dry up. The idea is to provide two years worth of transitional funding, said Collins, as the association began efforts at private fundraising. Although there was no resolution before the board at the meeting, Collins indicated that he strongly supported the idea.

Partnerships: Downtown Beat Patrols

Collins said that continuing to receive some discussion was Newcombe Clark’s suggestion to reallocate funding for the WALLY project – a Howell-Ann Arbor commuter rail proposal – to fund downtown police. They’d requested information on crime statistics for the downtown area and learned that downtown crime is at “very low” levels, but there are still questions about perceptions of crime. While 86% of residents report feeling safe at night in the downtown area, he wondered if the 14% who don’t feel safe are significant to consider.

Clark suggested the potential of a nighttime board retreat to tour the downtown at night.

Partnerships: City-DDA Parking Agreement Negotiations

Collins also reported out on the activity of the board’s “mutually beneficial” committee, which is charged with the responsibility of renegotiating a parking agreement with the city council’s corresponding committee. Collins indicated that possible code enforcement by the DDA – other than parking violations – had been taken off the table for further consideration. [A new agreement is hoped to be in place by Oct. 31, 2010. Most recent Chronicle coverage: "Parking Deal Talks Open Between City, DDA"]

Earlier in the meeting, Roger Hewitt reported out on the mutually beneficial committee as well, saying that Susan Pollay would be working on a plan for what it would mean for the DDA to take responsibility for development of the city-owned surface parking lots in the downtown area.

At the work session held prior to the city council’s July 6 meeting, Hewitt said, Stephen Kunselman (Ward 3) had expressed opposition to the idea of the DDA enforcing parking regulations outside the DDA boundaries. Hewitt said he’d assured the city council at the work session that the DDA understood that any process led by the DDA would be subject to step-by-step approval by the city council.

Partnerships: Art Fairs

Collins also noted that Susan Pollay, executive director of the DDA, had exercised her authority to make grants up to $10,000 to award a grant to promote the combined Ann Arbor art fairs as a single event.

Transportation Committee

Reporting out from the transportation committee, John Mouat said that the Commuter Challenge organized by getDowntown in May had gone well. There’d been more people and more companies participating, he said. Later during public commentary at the conclusion of the meeting, Nancy Shore, director of getDowntown, thanked the board for their continued support, saying that in May there had been 41,000 go!pass rides.

Mouat also gave an update on the connector feasibility study currently underway. The $640,000 study is taking a look at the Plymouth and State street corridors. [Chronicle coverage: "Transit Connector Study: Initial Analysis"] From the initial results of the study, Mouat highlighted the fact that the number of trips between the University of Michigan central campus and north campus would support a light rail system.

A proposal to sponsor an annual bike rack contest, he said, has been paused, while the getDowntown program and DDA staff undertake an inventory of all the bike racks in the downtown.

Talks continue with the Ann Arbor Transportation Authority about the reconstruction of Blake Transit Center and Ypsilanti-Ann Arbor commuting.

Russ Collins noted that the University of Michigan was interested in mass-transit growth. He wanted to know who the contact person was at the university for that. Mouat indicated that there’d been a change of leadership with David Miller’s retirement as head of UM transportation. Pollay acknowledged that Collins was right about UM having an interest in mass transit, pointing to the forum that had been hosted on the north campus back in March.

Pollay also indicated that Miller’s replacement had been hired. [Stephen Dolen was appointed executive director of Parking and Transportation Services, effective July 12.]

Capital Improvements Committee

Reporting out from the capital improvements committee was John Splitt. He reported that on June 26, there’d been a massive pouring of concrete for the underground parking garage on Fifth Avenue. The pour was over 1,400 cubic yards of concrete, which required 150 trucks, he said.

The water main installation at Fifth and Liberty is now complete, Splitt said.

The Fifth and Division streetscape improvements are continuing on course, Splitt said.

Local Sourcing: Food and T-Shirts

During public commentary, Lindsay-Jean Hard, whose previous work for the DDA as a special projects manager earned her a “Welcome back!” from Russ Collins, gave the board a presentation on Real Time Farms. The live local food guide is a new company, Hard said, which has a flagship operation in Ann Arbor. From the RTF mission:

To excite and educate people about where they can find fresh local sources of food, bringing transparency to the food web.

Hard described how the website allowed food consumers to keep up to date on the fresh foods that are available currently in farmers markets, by giving people a way to upload current pictures of the actual produce available at farmers markets.

Visiting the DDA board meeting from North Carolina, but not addressing the board, was Eric Henry, who’s been in town visiting Paul Saginaw of Zingerman’s. Henry described to The Chronicle how his T-shirt company, TS Designs, sources the cotton for its T-shirts from local growers.

Annual Meeting: Officer Elections

Immediately following the July monthly meeting, the DDA board held its annual meeting and elected its officers for the coming year.

The officer elections for the next year offered little of the overt drama that had unfolded at last year’s officer elections. [Chronicle coverage: "Split Board Agrees on Splitt"]

Officers elected for the next year are: chair, Joan Lowenstein; vice chair, Gary Boren; treasurer, Roger Hewitt; secretary, Russ Collins.

Abstaining from each of the officer votes was board member Newcombe Clark.

Clark explained to The Chronicle after the meeting that there’d been no indication from the mayor whether the two board members whose appointments are expiring July 31 – Jennifer S. Hall and John Splitt – would be re-appointed. Clark said he could thus not be certain of the full range of choices for board officers.

Susan Pollay, executive director of the DDA for the last 14 years, summarized for the board highlights of DDA activities over the last year: (i) the parking and transportation strategies report to the city council; (ii) the energy grant program; (iii) the start of construction on the underground parking garage and the associated utility upgrades; (iv) the start of construction on the Fifth and Division streetscape improvements; and (v) the transfer of $2 million to the city as well as diversion of revenues from the 415 W. Washington and Fifth & William parking lots to the city.

Pollay presented outgoing board chair, John Splitt, with a tchotchke of appreciation – a commemorative plaque mounted on the kind of lumber used as part of the earth retention system for the underground parking garage currently under construction along Fifth Avenue.

Present: Gary Boren, Newcombe Clark, Jennifer S. Hall, Roger Hewitt, John Hieftje, John Splitt, Sandi Smith, Leah Gunn, Russ Collins, Joan Lowenstein, John Mouat, Keith Orr.

Next board meeting: Noon on Wednesday, Sept. 1, 2010, at the DDA offices, 150 S. Fifth Ave., Suite 301. [confirm date]


  1. By Brad Mikus
    July 14, 2010 at 7:10 am | permalink

    I apologize for the length of this post, but I have some interesting additions to the article which highlight the lack of critical thinking by DDA board members regarding parking.

    Three statements by the chair of Operations Subcommittee, Roger Hewitt, made me scratch my head. In reference to PILOP, he claimed there was an issue with the board packet, and consequently, the surcharge is only 20%, not the 25% as stated in the packet and this article (at 1:00:00 from CTN video-on-demand). Since no board member demanded clarification on how this would affect DDA parking revenue, I guess they don’t really care. Maybe they don’t understand, or more likely, they’re just satisfied with the free lunch and the conversations they can lead at cocktail parties that their membership provides. Maybe that’s too harsh, but seriously, if they’re not providing oversight, why are they there?

    Second, he argued, that parking volume has not decreased. “Overall, there are no signs of slacking of demand. There’s certainly probably leveling of demand right now. There’s nothing we can see that looks like any decline in usage.” (at 1:25:00). From their own reports, total patrons over Mar-May (the last three months reported) have declined by 68,000 or 11% when compared year-over-year. To clarify, “total patrons” are only people who pay hourly at structures or surface lots; it doesn’t include monthly contracts or meter usage. Granted, the largest decline was in March, but the 8% decline in May shouldn’t be ignored. Again, nobody asked for an explanation, so I question their ability to think critically.

    Patrons in thousands 2010 2009 y-y M(L)
    May 170 185 (15) or (8%)
    Apr 206 209 (3) or (1%)
    Mar 159 204 (45) or (22%)
    Total 535 598 (68) or (11%)

    Last, his explanation that May’s volume decline is due to the Library Lot closure is ludicrous (1:24:00). If there is extra parking capacity, the parkers would use other spaces. To use an analogy, if you’re at a grocery store and they shut down a lane, you go to another line; you don’t cease shopping, so if there is extra capacity, volume will remain the same. His analysis only makes sense if these parkers switched to parking meters (DDA can’t count the volume on the old machines), if they used free spaces in the neighborhoods, or more concerning, if they decided not to go downtown because of the construction. The truth is the DDA doesn’t know, and apparently they don’t feel the need to investigate why demand is down 11% over the last three months.

    Unfortunately, I won’t be able to follow the DDA after August, so somebody needs to follow these fools. For data, I have the last two or three years of parking data on a spreadsheet, and I’ve estimated a few analysis items, such as separating hourly vs contract revenue and price-volume variances. If anyone is interested in continuing this analysis, please respond, and we can exchange emails.

    Brad Mikus
    Ann Arbor resident and juice enthusiast

  2. July 14, 2010 at 8:00 am | permalink

    “Hewitt responded to the concern about the adequacy of revenues from the PILOP to fund new construction of parking spaces by pointing out that the entire parking system funds new construction.”

    I’d be interested to see a recent full accounting of the parking system finances. The DDA has been paying huge amounts out of this fund to prop up city government and has also committed future revenues to pay for the full cost of the new underground structure on the Library Lot (bond payments). Surely there are limits.

  3. By Joan Lowenstein
    July 14, 2010 at 12:46 pm | permalink

    I can’t think of any accounting in the City that is more available than the parking system finances. The reports in detail are attached to each month’s board packet and those are accessible on the a2dda.org website.

  4. July 14, 2010 at 2:31 pm | permalink

    Re (3): Yes, thank you, it takes a few clicks but I found the board packet here: [link]

    The Parking Fund budget shows that actual expenditures exceeded revenues in 2008/2009 by $1,189,721. The page shows that the revised budget for 2009/2010 had a deficit projected of $4,698,167. However the actual deficit for the first 6 months was $2,420,672, which if doubled would exceed the budgeted deficit. The Parking Maintenance Fund shows a nearly $1 million deficit for the first 6 months of this fiscal year.

    These figures seem to support my point, that the Parking Fund cannot be relied upon indefinitely to pay for new parking construction, contrary to Roger Hewitt’s statement.

    The full picture however would depend on an assessment of future repair needs for aging structures, the length of time that payment must be made on various bonds, and other projections over time. I know that the DDA’s excellent staff probably have those projections sitting on a computer somewhere right now. (The DDA financial statements have always been a thing of joy to those of us who like clear unambiguous spreadsheets.)

  5. By Rod Johnson
    July 14, 2010 at 6:23 pm | permalink

    A lot to process here, but a detail: In 1982, Briarwood was nearly 10 years old, and to say it had knocked the wind out of downtown (with the implication that Zingermans and the DDA had been instrumental in saving it) is too strong. Briarwood certainly began the change of downtown from an old-fashioned small town business district to its current banks-boutiques-n-bistros style–but in 1982 I remember it as being was again a vibrant place after a few uncertain years.

  6. By Max
    July 14, 2010 at 10:05 pm | permalink

    Corporate welfare – pure and simple.

  7. By LiberalNIMBY
    July 15, 2010 at 4:00 pm | permalink

    Mr. Mikus,

    Your presence and thoughtful comments at many city meetings is much appreciated. Thank you (and many other commenters here) for doing the thankless job of poring over data. I do not know enough to know whether your argument is a sound one, but I do know that many of the folks on the DDA board and staff are neither foolish nor resistant to scrutiny. I hope you’ve at least asked for an audience with Susan Pollay to discuss some of your concerns?

    If you’re leaving town, please publish your e-mail address here (and on other newspaper websites) so fellow board-watchers may get in touch with you and profit from your insights.