DDA-City Development Ideas

On Monday morning, the respective “mutually beneficial” committees (MBCs) of the city council and the Ann Arbor Downtown Development Authority continued their work on renegotiating the parking agreement under which the DDA manages the city’s parking system.

The discussion provided some clarity about what’s feasible with respect to the DDA’s role in enforcing parking regulations. And though parking enforcement appeared ready to slide completely off the table at the last committee meeting due to practical concerns, it appears now that the issue could be back in play, at least from the perspective of technical feasibility.

Concerns of Main Street merchants were also aired at the meeting, with Maura Thomson, executive director of the Main Street Area Association, addressing the two committees to suggest that any additional payment by the DDA to the city be partially earmarked for downtown public safety – that is, downtown police patrols.

But the highlight of the meeting was a more fleshed-out version of an outline that DDA executive director Susan Pollay provided, which describes a process by which the DDA would lead the community in comprehensive site-planning for the downtown’s city-owned surface parking lots, based on work that’s been done over the last half-decade – including the Calthorpe process, the A2D2 rezoning process, and the downtown plan.

DDA board member Russ Collins wanted to know if the process addressed any specifics regarding payments from the DDA to the city. Pollay responded to Collins by acknowledging that DDA board member Newcombe Clark – who does not serve on the DDA’s MBC – was keen to see the DDA purchase land from the city as part of the process. She indicated that would be a topic addressed by the DDA at its retreat, scheduled for Sept. 22.

However, the focus for Monday morning’s meeting, said Pollay, was not on the idea of land purchases, but rather on a comprehensive site-planning process: If the process feels like it resonates, she said, then the discussion could move on later to include land purchases. City councilmember Carsten Hohnke then zeroed in on a crucial question: “How do we come to a conclusion it’s resonating?”

DDA-Led Development Process of City-Owned Lots

DDA board member Gary Boren followed up Hohnke’s question – about how to conclude that the process described by Pollay was resonating – with a more specific one: With whom is it resonating? For his part, Hohnke said, “It’s resonating with me!” Hohnke went on to say that he felt it was resonating with councilmember Christopher Taylor, who’d left the meeting shortly before it adjourned. Before he left, Taylor had said that “Broadly speaking, I’m pleased with the direction.” Margie Teall, the third member of the council’s committee, was absent.

What was it that was resonating with Hohnke and Taylor about the proposed DDA-led development process for city-owned surface parking lots? Many of the key features of the plan were provided in outline form at the two committees’ last meeting, on Aug. 23.

One basic theme of the proposal is to start not from scratch, but rather to build on the discussions that have taken place over the last five years in connection with initiatives like the Calthorpe process, the A2D2 rezoning process, and the downtown plan. Another basic theme is a focus on a comprehensive approach to downtown – not every parcel must provide all amenities. The process also stresses the integration of professional expertise.

Pollay walked the two committees through the four-page document.

DDA-Led Development: Overview of Current City-Run Process

The first page of the document is devoted to a sketch of the city’s approach to development of city-owned property downtown, illustrated by examples drawn from the last decade:

• Ashley Mews, a project approved at Main & Packard in 2000 and constructed in 2001.
• A project at First & Washington with Liberty First that was terminated in 2003 despite an approved development agreement.
• William Street Station at Fifth & William, which had a site plan approved and a purchase agreement negotiated, but ended in a lawsuit against the city.
• City Apartments at First & Washington, which is a Village Green project receiving site plan approval in 2008, with a purchase agreement recently extended by the city council to spring 2011.

The two most recent efforts to develop city-owned parcels using an RFP (request for proposals) process are: 415 W. Washington, which generated three local responses, none of which were selected; and the Library Lot on top of the underground parking garage being built along Fifth Avenue – a review committee has winnowed six proposals down to two, with those two currently being evaluated by a consultant.

As described in the document that Pollay provided, the city’s current process begins with city council direction to issue an RFP for city-owned property. The RFP is drafted by city staff, then disseminated via the city’s website or by email. An advisory committee is established by the city council to oversee review, interviews are held, a recommendation is made, and city staff oversee negotiations with the developer.

DDA-Led Development: Background Research – Expertise/Information

The first step the DDA would undertake would be to assemble information and expertise about the whole downtown area, and to integrate it with the city’s existing planning documents: the downtown plan, the central area plan, and the the new A2D2 zoning regulations.

Some of the work would take the form of developing an inventory of sites with detailed physical information about those sites – from square footage to soil conditions. The inventory would also include a breakdown by the city’s planning staff of all the specific zoning requirements for each site – the basic zoning, plus the character district overlays, adjacent historic districts, and the like.

Public services city staff – led by public services area administrator Sue McCormick – would be called upon to provide information on stormwater and sanitary sewage systems, with estimates on upgrades that could be required if parcels were  developed to their maximum density. At Monday’s meeting, McCormick weighed in for the comprehensive approach that’s called for, saying it could allow for costs for infrastructure upgrades to be spread across developments, instead of saddling a single “first-in” development with all the costs. Detroit Edison would be asked to provide information on electric capacity, and Ann Arbor SPARK would be tapped for information on any state and federal grants that could be used for downtown redevelopment.

Expertise from other communities where successful downtown development has occurred – elected officials, developers and others – would be invited to Ann Arbor to explain how that successful development happened.

A real estate consultant would be hired to assist in the process by identifying what current real estate development looks like, what kind of lease rates are prevalent and what prices land is selling for. The real estate consultant would help identify for each specific site the exact set of information that would need to be assembled.

DDA-Led Development: Community Work – Goals Plan

The second section in the development document focuses on integrating previous work done in and by the community with the process of more comprehensive, but detailed, planning of individual sites. At Monday’s meeting, Pollay stressed that “this is not just another planning exercise.” This kind of planning would go beyond the Calthorpe community engagement process done five years ago, which explicitly avoided specific suggestions for individual sites.  It would involve a level of detail far greater than the new A2D2 zoning, character district overlays and design guidelines.

One key part of that community work would be done in the context of a city council work session, in which the council would prioritize its downtown development goals: Optimal purchase price? Catalyst projects? Iconic projects? Projects that maximize pedestrian activity?

Focus groups and other larger community meetings, plus online surveys, would provide additional input. University of Michigan and Eastern Michigan University faculty would be looped into the discussion depending on their area of expertise. UM planning staff would be consulted to provide the perspective of future UM projects and goals for the campus.

The outcome of this community activity is to be a detailed “goals plan” for the downtown that is meant to provide for everything that’s needed in the downtown, without insisting that every site provide for each specific need.

DDA-Led Development: How an Individual Site Would Get Developed

How does the DDA envision getting from an assembly of information, expertise and site goals to the development of any one specific site?

Step one would be for the DDA to make specific recommendations for each development site in the downtown that would underpin the expectations and goals for any future requests for proposals (RFPs). The DDA’s recommendations for the sites would be presented to the city council.

By way of background, the Ann Arbor city council has had general conversations over the last few years focused on the future of city-owned real estate in downtown Ann Arbor – beyond the development of the city-owned Library Lot on top of the underground parking garage currently under construction on Fifth Avenue.

For example, at the Dec. 1, 2008 city council meeting, the council authorized continued interest payments for the property the city had purchased from the YMCA at Fifth and William, the Old Y lot [emphasis added]:

In deliberations, councilmember Sandi Smith said that she would support the continued financing of the property, because they had no other choice, but that she urged her colleagues to begin thinking of master planning the area so that the city could divest itself of the property as soon as possible.

Or, at a February 2010 budget work session, one chunk of the conversation was devoted to downtown real estate, including the lot at Main and William next to Palios restaurant. From The Chronicle’s account of that work session:

An additional land parcel downtown that [Stephen] Rapundalo thought warranted some focus was the parking lot at Main & William, next to Palios restaurant. He noted that there were just 21 parking spaces at the lot, but it was possibly ripe for investment. He wanted to know if it was on the list somewhere. [City administrator, Roger] Fraser told him it was on a list, but not near the top.

Part of the process now being proposed is a systematic way of assembling information about items on the “list” and identifying which site will be the first one to focus on.

So with city council approval, the DDA would then pursue development on that first site, Site #1. The DDA would need to approve incentives funded by the DDA tax increment finance (TIF) capture – like parking, affordable housing or pedestrian improvements.

The RFP for the site would be extremely detailed and specific, with a draft site plan included in the request, that would have undergone the city’s site plan approval process. Here’s how that would evolve: The initial version of the RFP would be drafted by the DDA, with all the information previously assembled attached to it. The RFP would be reviewed by a professional real estate consultant and improved based on their feedback. An architect would then be hired to develop a draft site plan. This draft plan would be submitted to city staff, the city planning commission and the city council for review and approval. The RFP would specify that the draft site plan is not a mandated plan, but that potential developers should be challenged to design and implement a project even better than the draft site plan imagines.

Once the RFP is created, it would then be aggressively disseminated – with the help of the real estate consultant. A pre-proposal meeting would include a tour of the site. At Monday’s meeting, Pollay gave one example of the way the RFP could be marketed: She felt that if potential developers understood how much investment the university made in the community, it would help provide a case to developers to make a response to the proposal.

Once responses are received, they would be reviewed by an advisory committee assembled by the DDA, which will include people who have experience financing successful development projects or who have constructed downtown projects. After an interview process, the advisory committee would make a recommendation, which would then need to be approved by the DDA. The recommendation would be forwarded to the city council. If approved by the city council, the DDA would then proceed with negotiations on land purchase by the developer from the city and other project details, as the developer completes the site plan. The developer’s site plan would then be submitted to the city’s site plan approval process. And on approval, the project would then be constructed.

Reaction to Proposed DDA Process: Land Purchase?

Susan Pollay wrapped up her synopsis of the draft process document by noting that it assigned a lot of responsibility to the DDA, but she said the DDA is set up to take on that kind of responsibility.

Carsten Hohnke’s reaction to the process description was: “It’s fantastic!” He did wish for a presentation that visually contrasts the current timeline of the city’s strategy to develop a parcel side-by-side with the proposed DDA strategy.  He alluded to the fact that councilmember Sandi Smith had pushed the council to have a conversation about more than just the question of what goes on top of the new underground parking garage – other parcels downtown also need to be addressed.

Before departing from the meeting, councilmember Christopher Taylor indicated broad agreement with the basic proposal. However, he also indicated that he’d like to see a more detailed description of where the public conversation fit into the picture, as well as more clarity about the specific points in the process at which a collection of information is reduced to the form of a specific document.

DDA board member Russ Collins raised the money question: Does the process address any specifics of money transfers between the DDA and the city? The short answer is no. But Pollay acknowledged that DDA board member Newcombe Clark – who does not serve on the DDA’s MBC – was keen to see the DDA purchase land from the city as a part of the development process. She indicated that would be a topic addressed by the DDA at its retreat, scheduled for Sept. 22.

The question of money transfers from the DDA to the city is what prompted the city and the DDA to begin the talks about the parking agreement, under which the DDA operates the city’s parking system. The 2005 parking contract calls for $10 million to be paid by the DDA to the city over the course of 10 years – a commitment which the DDA had fulfilled by fiscal year 2010, which ended June 30. Earlier in 2010, the DDA then authorized an additional $2 million for FY 2011, and the city is expecting the DDA to continue $2 million annual payments.

At Monday morning’s meeting, Pollay deflected the question of land purchase by the DDA as part of the development process, suggesting that it would be more suitable for the DDA board to take up the issue at its Sept. 22 retreat. However, she indicated that as she’d consulted with various community members about putting together a proposed process for DDA-led development, what she’d heard was: “You’d be a fool to go through all this without possession [of the land].” Pollay indicated that the 3-Site Plan from 2005 had been thrown at her as an example.

The 3-Site Plan was an attempt by the DDA to develop three sites downtown in a coordinated fashion, in a similar spirit for what is being proposed for all the city-owned surface lots downtown. From The Chronicle’s report of the April 2010 DDA operations committee meeting:

The 3-Site Plan was an effort to develop city surface parking lots, including lots at First & William, First & Washington and the Kline’s lot – on the east side of Ashley Street, between William and Liberty. The concept underpinning of the 3-Site Plan was that parking could be decoupled from development – build a parking structure at First & William and free up the other two sites for development without the constraint of building on-site parking.

The 3-Site Plan was never voted on by the city council: The site at First & William provoked controversy that continued through most of 2005 when supporters of an Allen Creek greenway objected to the use of that parcel for a parking deck.

If the DDA owned the land, then in concert with a developer-partner, the DDA could submit a site plan to the city’s approval process and assure itself that it would at least come to the city council for a vote. And if the site plan conformed to the zoning, the city council would have limited discretion to deny the project. So land ownership is one means by which the DDA could guard against wasted effort.

One possible concern that could be raised about the purchase of city land by the DDA is a passage from page 23 of the DDA’s Renewal Plan, approved in 2003:

At this time the Authority has no plans to sell, exchange or donate property to or from the City. The DDA leases seven parking structures and several parking lots from the City under a management agreement, which will expire in 2012.

Downtown Police Patrols

While a money-for-land deal is one idea that could receive discussion during the Sept. 22 DDA retreat, another idea was floated at Monday’s meeting by executive director of the Main Street Area Association, Maura Thomson. The MSAA is keen to see part of any payment by the DDA to the city earmarked for public safety – that is, police patrols. Thomson heaped praise on the Ann Arbor police and fire departments, saying that they are second to none. She stressed that the downtown is the hub of the city and that there’s relationship between a healthy downtown and a healthy community.

Thomson acknowledged that when measured by statistics, a greater police presence might not be be warranted, but she encouraged the DDA board members and city councilmembers to think about issues that aren’t measured in statistics:

In early August my daughter found a man deceased in a planter bed on Main Street. Later in August I happened upon a man passed out on the sidewalk on the corner of Main and Liberty. Incidents such as these certainly jade the downtown experience. The impact of having dedicated officers in the downtown neighborhoods can not be measured by reported crimes alone – neither of the examples noted were crimes. The lack of police presence in our downtown neighborhoods is contributing to non-crime related issues and if left unchecked, this type of activity will lead to the downfall of our downtown as we know it.

Related to downtown public safety, at the city council’s Sept. 7, 2010 meeting, Sabra Briere (Ward 1) updated her council colleagues on her intention to bring forward a proposal to re-form a task force on panhandling in the downtown.

Parking Enforcement

At the previous meeting of the two mutually-beneficial committees, the discussion of a role for the DDA in parking regulation enforcement appeared to have been pushed to the edge, if not completely off the table as part of the negotiations. The number of logistical and legal hurdles seemed to be accumulating to the point where it appeared that little enthusiasm was left for pursuing the topic. [Chronicle coverage: "DDA Parking Enforcement Prospects Dim"]

At Monday’s meeting, however, a case was made by DDA staff for the technical feasibility of the DDA’s role in enforcement.

Amber Miller, planning and research specialist for the DDA, had compiled research from other cities in Michigan where the DDA in those cities either enforces parking directly or contracts for it: Traverse City, Petoskey and Kalamazoo. The DDAs in those cities write tickets for violations in the Michigan Vehicle Code, but do not have a direct reporting relationship to the chief of police. The lack of a reporting relationship to the police chief had been cited by the Ann Arbor city attorney’s office as a reason that the DDA could not enforce MVC infractions.

Access to information from the Michigan Law Enforcement Information Network (LEIN), which provides vehicle owner information, is achieved in these other three cities via application by the city to the Michigan Secretary of State on behalf of the DDA, so that the DDA can be granted access to the information. Access to repeat-offender information for a subset of certain kinds of parking infractions is key to the Ann Arbor DDA’s intended strategy of having graduated fines based on prior offenses, or forgiveness of first offenses. The ability to filter data for DDA-contracted parking enforcement staff – so that they can view only authorized data – could be managed with the handheld devices used by ticketing officers.

That technological capability here in Ann Arbor was confirmed by Susan Pollay in her description of a meeting she’d had with Sue McCormick and a representative from Complus Data Innovations, the manufacturer of the handhelds used by the city. The CDI representative confirmed that data could be filtered by user login.

Pollay also made a case that the DDA was able to enforce parking regulations outside its tax district by citing local precedent for the city council authorizing the Ann Arbor DDA to act outside its boundary – the original parking agreement and the language of the DDA Renewal Plan – plus the state enabling legislation, which reads in relevant part:

An Authority possesses all the powers necessary to carry out the purpose of its incorporation. The enumeration of a power in this act shall not be construed as a limitation upon the general powers of an authority.

At Monday’s meeting, fresher parking enforcement data was also provided than had been available at the previous meeting. The five-year trend for monthly tickets issued is decidedly downward. Almost five years ago, 11,000 tickets were issued in a month, but in the last year around 6,000 tickets have been issued per month. In the most recent month for which data was available at the meeting, January 2010, only 4,647 tickets were issued.

Fewer tickets means less revenue: In FY 2006 around $2.1 million was collected in parking ticket revenue, but in FY 2010 that fell to around $1.1 million. Commented Russ Collins: “It’s hard to see the business case for the DDA taking this over.” However, Sue McCormick indicated that the lower numbers are due in part to lower staffing levels for community standards officers, who write parking tickets. The city currently has two community standards vacancies, she said.

Next Steps

Towards the conclusion of the meeting, Carsten Hohnke sought to summarize the committee work to date and to identify specific next steps:

• Parking Enforcement: Points made about feasibility of parking enforcement by the DDA at Monday’s meeting will be reviewed by the city attorney’s staff, hopefully by the time the committees meet again, on Sept. 27.
• DDA-led Development of Surface Lots: City council will schedule a working session to discuss the proposal that Pollay had presented to them.
• Affirmation of DDA’s Parking Role: In the new parking agreement, DDA’s role will be based largely on its current, existing role.
• Non-Parking Code Enforcement: This is now off the table – from the start there was little enthusiasm on the part of the DDA for this.
• DDA-Provided Services: This appears now to be practically off the table. It’s received little attention since the very first meetings. Although there was initially some interest on the part of the DDA, that interest was expressed mainly by DDA board member Roger Hewitt, who could not attend Monday’s meeting. Gary Boren suggested that there was real potential for the new Main Street Business Improvement Zone to address the issue of services, if it can be expanded beyond the current, limited area between William and Huron along Main Street.

On Sept. 22, the DDA board will hold a retreat focused on the city-DDA talks. The target date for the signing of a new parking agreement between the city and the DDA is Oct. 31, 2010.

Although they were clearly kidding around, the following exchange could be analyzed by some as an accurate reflection of the reality of the talks:

Russ Collins: “We’re getting nothing of what we wanted and you’re getting everything that you wanted!”

Carsten Hohnke: “So it’s going exactly according to plan!”