At its June 6, 2012 meeting, the Ann Arbor Downtown Development Authority authorized a grant to the 618 S. Main project, totaling $650,000 over four years. The vote was unanimous.
The grant assumes that the amount of additional tax increment finance (TIF) revenue that the DDA would capture as a result of completed construction of the project would be $250,000 a year. The money is granted to pay for streetscape improvements on Main and Mosley streets, and the upsizing of the water main under Ashley Street to a 12-inch main. The originally-proposed grant totaled $725,000, but that amount was reduced through amendments made at the board meeting, which eliminated bank carrying costs as an expense to be covered. Another amendment reduced the amount allowed for sidewalk improvements.
The rationale provided by the DDA’s resolution for making the grant includes the DDA’s conclusion that: (1) The project addresses an underserved gap in the marketplace; (2) The project may act as a catalyst for additional revitalization of the South Main Street area; (3) The project will add to the downtown’s residential density; and (4) The environmental design of the project appears to exceed city requirements.
The project’s developer, Dan Ketelaar, had requested that the DDA pledge 80% of its TIF capture money for six years – around $1.3 million – to support certain aspects of the project in connection with the state’s Community Revitalization Program. So the amount of the grant works out to be about half of what Ketelaar had asked for.
The grant was authorized under a new brownfield policy the DDA board adopted, also at the same June 6, 2012 meeting. An earlier draft of the policy had included a cap on the amount of grants, based on a percentage of the tax increment finance (TIF) capture. The final version adopted by the board does not include a percentage cap, but does stipulate that “the amount released will at no point be greater than the amount of new TIF paid by the developer of the new project.” [.pdf of brownfield policy]
The 618 S. Main project includes a 7-story building, which would include 190 units for 231 bedrooms, plus two levels of parking for 121 vehicles. It received a unanimously positive recommendation from the Ann Arbor planning commission on Jan. 19, 2012. The project will next be considered by the Ann Arbor city council.
This brief was filed from the DDA offices at 150 S. Fifth Ave., Suite 301, where the board holds its meetings. A detailed report of the meeting will follow: [link]