Ann Arbor Council OKs SPARK Contract

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At its June 18, 2012 meeting, the Ann Arbor city council approved a $75,000 contract with the economic development agency Ann Arbor SPARK.

The contract has been renewed annually since the Washtenaw Development Council and Ann Arbor SPARK merged in 2006. Previously, Ann Arbor had contracted with the WDC for the business support services for which it now contracts with SPARK. On June 20, 2005, the city council authorized that one-year contract with WDC for $40,000. This year’s $75,000 contract with SPARK describes the organization’s focus the same way it did last year, as “building our innovation-focused community through continual proactive support of entrepreneurs, regional businesses, university tech transfer offices, and networking organizations.”

Ann Arbor SPARK is also the contractor hired by the city’s local development finance authority (LDFA) to operate a business accelerator for the city’s SmartZone, one of 11 such districts established in the early 2000s by the Michigan Economic Development Corp. (MEDC). The SmartZone is funded by a tax increment finance (TIF) mechanism, which in the current fiscal year captured around $1.5 million in taxes from a TIF district (which is the union of the Ann Arbor and Ypsilanti Downtown Development Authority districts, though revenue is generated only in Ann Arbor’s district.) The specific taxes on which the increment since 2002 is captured are the school operating and state education taxes, which would otherwise be sent to the state and then redistributed back to local school districts.

SPARK’s contract was included on the city council’s consent agenda, which are items involving less than $100,000. Consent agenda items are considered routine, and are voted on as a set. Any councilmember can pull out an individual item for separate discussion, which Sabra Briere (Ward 1) chose to do for the SPARK contract. The discussion did not result in much controversy and the vote was unanimous.

For recent Chronicle reporting on the LDFA and its relationship with SPARK, see: “SmartZone Group OKs SPARK Contract.”

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron. A more detailed report will follow: [link]