DDA Mulls Compromise on Parking Money

At its April 6, 2011 meeting, the Ann Arbor Downtown Development Authority board came to a consensus that it was not ready to comply with the city of Ann Arbor’s financial request in negotiations on the parking contract currently being worked out between the two entities.

Specifically, the DDA board consensus was that it could – as it had previously discussed at a March 30 operations committee meeting – pay the city 16% of gross parking revenues for each year of the contract. But the city would like the DDA to pay 16% in the first two years of the new agreement, and 17.5% in years thereafter. Sandi Smith, who serves on both the city council and the DDA board, floated a proposal that would set the payment in the first five years at 16% and thereafter at 17.5%. But the DDA board did not reach a clear consensus on anything except that they could not meet the city’s 16-16-17.5% request.

The most recent background to the city-DDA negotiations includes a series of Monday morning meetings between the city council and the DDA board’s “mutually beneficial” committees. At a Monday, March 28 meeting, the city council’s team asked their DDA counterparts to convey a request to the full DDA board to reconsider the board’s previous consensus, reached at a full-board retreat. That consensus, as part of renegotiating a parking agreement with the city, was that the DDA would pay the city a percentage-of-gross parking revenues – 14% in the first two years of a future contract, and 15% in years thereafter. The city’s position since January has been that the DDA should pay the city 16% of gross parking revenues in the first two years of the contract and 17.5% in years thereafter.

At a Wednesday, March 30 DDA committee meeting, attended by 10 of 12 DDA board members, they reconsidered the city’s request and reached a consensus that they could live with 16% in the first two years, and for remaining years as well – but not the 17.5% requested by the city. That 1.5% difference translates to $270,000, based on roughly $18 million in revenues projected for fiscal year 2014, which would be the third year of the contract.

At another morning meeting of the mutually beneficial committees on April 4, city councilmembers had asked the DDA committee to take back to their full board a request to reconsider the flat 16% position and to think about increasing the figure to 17.5% in the third year and years thereafter. It was that request that was considered by the DDA board on April 6.

This brief was filed from DDA offices at 150 S. Fifth Ave. A more detailed report of the board meeting will follow: [link]