Council’s Meeting Dominated by Downtown

Ann Arbor city council meeting (March 4, 2013): The council had five items on its agenda related geographically to downtown Ann Arbor – but delayed voting on two of them.

On one of those items, the council voted to postpone its initial consideration of changes to Chapter 7 of the city code, which governs the way the tax increment finance (TIF) capture is calculated for Ann Arbor’s downtown development authority. The revisions to Chapter 7 would also affect the composition of the DDA board, excluding elected officials from service.

The council also postponed until its next meeting, on March 18, a possible moratorium on site plan review for projects in the downtown. The possible moratorium previously had been postponed from the council’s Feb. 19 meeting. After hearing extensive public commentary on the topic on March 4 – from residents and representatives of the developer of a proposed 14-story residential project at 413 E. Huron – the council went into closed session.

On emerging from the closed session, the council voted, without deliberation, to postpone the item. The wording in the resolution provides an exemption from the moratorium for site plans that already have a recommendation for approval from the city planning commission. If enacted, the moratorium as worded would still apply to the 413 E. Huron project, because the planning commission’s 5-3 vote for approval fell short of the six it needed for a positive recommendation. The 413 E. Huron site plan is now expected to be on the same March 18 meeting agenda when the moratorium will be re-visited.

Eluding the impact of the proposed moratorium’s wording was another downtown project, which appeared on the March 4 meeting agenda. The site plan for a 14-story apartment building at 624 Church St. was approved at the council’s meeting – but that project would not have been impacted by the moratorium as it’s currently proposed. That’s because it had received a recommendation of approval from the city planning commission.

The council also voted to reconstitute a task force to re-evaluate the downtown design guidelines, which supplement the city’s zoning regulations.

In the final downtown-related item, the council voted to direct the city administrator to issue a request for proposals for brokerage services to possibly sell the city-owned parcel at Fifth and William streets – the location of the former Y building. It’s currently used as a surface parking lot in the city’s public parking system.

While the city is contemplating the sale of that site, which it purchased for $3.5 million, the council voted to buy a much less expensive parcel outside the downtown, near the Bluffs Nature Area. The council approved a purchase price of $115,000 for the parcel, which is located off Orkney Street.

The council also approved two other site plans for projects not in the downtown – although the four-unit project at 515 N. Fifth is near the downtown. The council also approved the Blue Heron Pond development, a 64-unit project on the western side of town, located at Liberty and Maple.

In other business, the council approved receipt of a federal grant to demolish two of the buildings on the city-owned property at 721 N. Main. The buildings are in the floodway. A third building, in the flood fringe, is being studied by the city for possible reuse.

The property at 721 N. Main is a former maintenance yard. So none of the 44 vehicles authorized for purchase by the council at the March 4 meeting will be maintained there. Total cost of the vehicles was $928,499.

None of the vehicles authorized for purchase was a plug-in electric vehicle. However, the council passed a resolution in support of preparing city infrastructure for plug-in vehicles. Two-other energy-related agenda items included one supporting the city’s participation in Earth Hour, and another one supporting use of the city’s energy fund for energy improvements in connection with community projects.

An item that drew considerable discussion before approval related to street closings associated with the June 9, 2013 Ann Arbor marathon.

D1 Site Plan Moratorium

The council was asked to consider a resolution it had postponed from its Feb. 19 meeting, which would enact a six-month moratorium on the acceptance of new site plans for downtown Ann Arbor developments.

The resolution gives specific direction to the planning commission during the moratorium to review the D1 zoning code and to make recommendations to the city council on possible revisions to the code.

Impacted by the moratorium would be a project at 413 E. Huron, located on the northeast corner of Huron and Division streets. It’s a proposed 14-story apartment building that would include 216 units totaling 533 bedrooms, with underground parking for 132 vehicles.

Not impacted by the moratorium is a proposed project at 624 Church Street – a 14-story building with 75 apartments and a total of about 175 bedrooms. The council gave the site plan for 624 Church Street unanimous approval at its March 4 meeting.

Even if the council had delayed a vote on the 624 Church Street project, the wording of the resolution provides for exemptions for site plans that have already received the planning commission’s recommendation of approval. So the 624 Church Street project would not have been encompassed by the proposed moratorium, because it received a recommendation of approval from the city planning commission on Jan. 15, 2013.

The moratorium was initially postponed from the council’s Feb. 19, 2013 meeting. That was the first council meeting after the 413 E. Huron project failed to achieve a recommendation of approval from the city planning commission. Under the proposed moratorium, the 413 E. Huron project would not be allowed to move forward, because its site plan did not receive that recommendation of approval.

The outcome of the planning commission’s vote on Feb. 4, 2013 was not a recommendation for approval of 413 E. Huron, because the 5-3 tally in favor did not give the project the required six-vote majority. But even without a planning commission recommendation, a developer has the option of bringing a site plan proposal for consideration by the city council, which the 413 E. Huron developer intends to do. It’s the 413 E. Huron developer’s intent to bring the site plan to the council on March 18, the same date when the council will again consider the moratorium.

In a related item at the March 4 meeting, the council was asked to consider a resolution that called for reconvening the downtown design guidelines task force. The task force will review and make recommendations to city council regarding improvements to the design review process. Currently, developers must follow a mandatory process of review for downtown projects, but are not required to comply with the board’s recommendations.

The resolution on the design guidelines task force had also been postponed from the council’s Feb. 19 meeting. Members of the task force mentioned in the resolution are: Marcia Higgins (Ward 4 city council), Tamara Burns (architect), Dick Mitchell (architect), Bill Kinley (construction contractor), Norm Tyler (architect), Kirk Westphal (planning commission chair), and Doug Kelbaugh (University of Michigan professor of architecture and urban planning).

As they had at the council’s Feb. 19 meeting, supporters and opponents of the moratorium addressed the city council during the public commentary period at the March 4 meeting. Attorneys for the developer of 413 E. Huron also addressed the council again, intimating possible legal action if the council were to enact the moratorium. [.pdf of Feb. 28, 2013 letter from Pat Lennon] [.pdf of March 4, 2013 letter from Susan Friedlaender]

D1 Site Plan Moratorium: Public Commentary

All 10 reserved public commentary slots were taken by people who wanted to address the moratorium issue.

Hugh Sonk ventured that councilmembers have been inundated with information about the topic. He told the council he wouldn’t be rehashing all of it that evening. But he reminded the city council that a review of the zoning and the design guidelines had been promised when they were enacted – back in 2009. As the economy continues to improve, he continued, it will get increasingly difficult to find a window of time when a moratorium could be imposed to conduct the promised review. So the time to undertake the study is now, he concluded.

Sonk told the council that local independent legal experts had chimed in with the view that the U.S. Supreme Court has upheld the authority of a municipality to impose a moratorium to allow time to study zoning. He also told the council that the principle of fairness is important in imposing a moratorium – and exempting a particular project would work against that principle of fairness. That could expose the city to a lawsuit by those who were not exempted, he cautioned. He concluded that the safest path was to impose a moratorium on all projects in the pipeline.

Responding to the idea that the city council could be accused of acting in bad faith by imposing a moratorium, Sonk ventured that the council has heard from nearly every neighborhood in the city in support of a moratorium and a study of the zoning and design review process. He concluded that it’s not a sentiment that’s coming from one neighborhood or that is aimed at a single project. He told the council that they’d be hearing from the owner of a project in the South University area, who is concerned about the application of the moratorium to his project – so the moratorium clearly was not aimed at one particular project, he contended.

“We live in a very special community,” Sonk said. “There’s an energy and a buzz in this town that you don’t find in other Michigan cities,” he added. Ann Arbor consistently makes every list of best places to live, and cities like Flint, Lansing, Battle Creek, and Jackson don’t receive these kinds of accolades. The special nature of Ann Arbor must be protected, he said. No one opposes growth, he contended, but that growth must be compatible with the existing neighborhoods, and have a positive impact on the community. A few bad projects, he contended, would destroy the very fabric of the community that we enjoy. So we can’t afford to have any more projects go forward without review and a possible revision of the process and the regulations. He urged the council to “have the courage” to do what is right, and take on the promised review of the zoning and design guidelines, before any other projects go forward in the community.

Susan Morrison of the law firm Rentrop & Morrison addressed the council on behalf of her clients Norm and Ilene Tyler, who could not attend the meeting. She noted that the Tylers’ property abuts the 413 E. Huron project. She mentioned she previously had sent a letter to the city council, dated Feb. 19, 2013, and she hoped councilmembers had had a chance to review it. That letter had provided citations to law and a copy of a Michigan case related to moratorium, she said.

The cases showed that the use of a moratorium is a widely-accepted tool used in planning, she said. Based on the facts of the current case, and on 30 years of representing clients in matters of municipal law, Morrison continued, she firmly believed that a court would uphold the proposed moratorium resolution that was before the council. It would be upheld for several reasons: it’s for a reasonable period of time; it has a waiver provision; it applies to more than one property; it doesn’t affect any vested rights; and it has a specific and undeniably long-overdue purpose. That purpose was to bring the zoning ordinance into conformity with the adopted master plan, she said, and to fulfill a promise made to the public more than three years ago, to revisit the D1/D2 zoning regulations.

She said it was difficult for her to imagine any court invalidating the resolution, or finding anything other than good faith on the part of the city. She told the council it was also important to remember that there is no harm to the city that could come from voting for the moratorium. The council was only voting that night on whether to temporarily “push the pause button” to give time for the serious study that issue deserves. The council was not making a final decision about what the result of a study would be, she said.

If the city is later sued by owners who are affected by the moratorium, the council could always decide then the policy question of whether the cost of litigation should outweigh the strong public interest in reviewing the zoning regulations, Morrison said. She hoped that the council would not be intimidated by threats of litigation costs – to give up prematurely on what she called a “worthy moratorium.” She concluded by urging the council to adopt the moratorium resolution as it was currently written.

Peter Nagourney addressed the topic of faith. He began by saying that faith has a legal definition, a commonsense understanding, and a religious connotation. The legal issue is easy, he said. In Michigan law, he contended, bad faith can only exist when a government obstructs a developer’s vested rights. He contended that no rights had been vested by the developer of the proposed project – so bad faith on the part of the city was not a question.

Nagourney then moved to the common understanding of bad faith. If a developer meets with neighbors and says that he’s gathering ideas for the building design, and the very next day presents completed drawings for the project, was that conversation with future neighbors in good or bad faith? he asked. If the developer says he wants to enhance the city’s future, but doesn’t talk with the city’s planning department and then misidentifies the character district in which he thinks the project will be built, is that good or bad faith? And if the design guidelines review board input is ignored in the final building design, does that indicate good or bad faith?

The city has to show good faith with respect to its actions on any project, Nagourney continued. But the city also has obligations to maintain good faith to its own processes and promises to its citizens. Starting in 2009, when the north side of Huron Street was designated as D1 zoning, the need to examine the effect of rezoning the property was clearly established, he said. The D1 designation was controversial, and the potential negative impact on the adjacent historic district was clearly anticipated. So a moratorium seeking to re-examine the zoning is only following through on what was specified in 2009 and in subsequent documents, he said. If the city did not examine the D1 zoning designation, that would be a clear act of bad faith and would be unfair to the citizens, who expect the city to follow its own directives, he contended.

Nagourney then turned to the religious connotation of faith. That concerns a belief that acting in good faith guarantees someone a more pleasant hereafter. Enacting the moratorium also involves the hereafter, he said. He indicated that allowing the city of Ann Arbor to maintain its neighborhoods and to contain oversized buildings to where they belong in the designated downtown is one vision of the hereafter. He indicated another possible hereafter – the possibility that 150- and 180-foot buildings “sprout” in the only area of the city that lacks step-down protection from massive structures. He allowed that what’s at stake is not eternity, but said that we are talking about tens of decades – a legacy that current and future residents of Ann Arbor will have to live with. That’s a significant enough hereafter that it justifies good-faith decisions about the moratorium, he concluded.

Norman Hyman began by saying that after a considerable amount of discussion and a considerable amount of uncertainty, the council had several years ago enacted the D1/D2 regulations. The council had done that with trepidation, he said, and the council had not been sure about the regulations and how they would work. The council anticipated that experience – that is, subsequent events – would influence how the ordinance was working. That was no secret, he contended. The public knew it, and the owners of 413 E. Huron knew it. They knew that they were going to be subjected to a review of the ordinance after subsequent events gave the council the experience with which to make a fair judgment.

It took a little while to get that experience, Hyman said – but we now have it. And he contended that we now know that the regulations have not been working as hoped. It was obvious that the council was going to be influenced by “precipitating” events. There’s been at least two recent precipitating events, he contended: The Varsity building on E. Washington, and the 413 E. Huron project. But he drew a distinction between a “precipitating event” and a “motivating event.” The fact that the council understood and foresaw the possibility of coming back and reviewing the zoning ordinance does not mean that any one property is going to be singled out, he said.

Hyman noted that the council had received several letters from attorneys, and he ventured that they had read all of them. One of the developer’s attorneys, Susan Friedlaender, had referred to a U.S. Supreme Court case in her letter – apparently in support of her position. He said he was sure that the case she was referring to was the Tahoe-Sierra Preservation Council, Inc. V. Tahoe Regional Planning Agency case. He ventured that the city attorney’s office had made the council aware of that case as well. In fact, what the court had stated in that case, he said, was that the courts will not “mess with” a reasonable moratorium for a reasonable period.

Pat Lennon introduced himself as an attorney with the Honigman law firm. He reminded the council that he’d appeared before the body a few weeks ago – so he hoped he did not sound like too much of a broken record. He was there to oppose the proposed moratorium and to urge all the councilmembers to vote against it. As he’d mentioned at the previous city council meeting, the moratorium was being proposed under circumstances that would be unfair and improper and subject to legal challenge.

First, he contended, the moratorium is clearly targeted at one project and one applicant – the owner of the 413 E. Huron project. The moratorium language goes to great lengths to exclude other “apparently more favored projects” while continuing to include 413 E. Huron, he contended. He did not disagree that it would be appropriate at some point to review the ordinance – but the moratorium should not apply to pending applications, particularly “by right” applications. If the moratorium were to be enacted, then it should exclude “by right” applications like the one for 413 E. Huron. His client had had no notice of this before the project began, and before his client had made substantial investments.

If the moratorium were imposed, the rezoning that could ensue would discard the lengthy A2D2 (Ann Arbor Discovering Downtown) process that produced the D1 zoning of the East Huron property. There’s no reason, need, or basis, he contended, for such extreme action in response to one project, which is opposed by “essentially a handful of influential citizens and leaders.” That kind of political and legislative activism, he ventured, would undermine the city’s credibility, and chill development in Ann Arbor – even development that might be popular.

The suggestion that the owner of 413 E. Huron lacks a vested property right is without merit, he continued. That point is thoroughly discussed in Susan Friedlaender’s letter, he noted, which was sent to the city council. He hoped that they would not have to make those legal arguments, but indicated he and his client were prepared to do that if they had to. The suggestion that his client would be damaged by the moratorium ignores the reality of how development works, he said. His client had made investments in acquisition costs, months of development costs, construction timelines and due diligence and drawings. Lennon said that those investments cannot just be discarded at the “whim” of some who don’t like the way a project looks.

At the end of the day, Lennon said, the moratorium should be denied. The developer relied on the D1 zoning category and invested in the site with a reasonable expectation that if he followed the rules in the ordinance, he would be able to build his “by right” project. Lennon compared a moratorium to changing the rules in a football game – late in the fourth quarter when the offense is about to score, by saying that a touchdown is no longer worth six points. “We don’t think that would be fair to a football game, and we don’t think it would be fair to our client in this case.” So he urged the council to vote against the moratorium.

Carl Hueter introduced himself as a lifelong resident of Ann Arbor and a practicing architect in Ann Arbor for the last 37 years. He’s processed about 100 site plan submissions with the city of Ann Arbor. Over the last 10 or 15 years, he’s found the site plan review process to be more and more contentious and “toxic.”

The city council’s Jan. 14, 2013 work session – on Connecting William Street – had included remarks from a consultant [land-use economist Todd Poole], Hueter reminded councilmembers. Poole had told the council that the city faces a challenge when marketing to well-financed development talent – because Ann Arbor is gaining a reputation for being “radioactive” to new development. [At the work session, Poole's remark about radioactivity had drawn cheers from some in the audience.] Large properties require significant investment, he said. Those investors require certainty in their efforts. The recent toxic site plan review processes, Hueter contended, have shown that a small vocal minority of intelligent, influential citizens can rise up to influence the legal approval process and subvert the law – overriding the will of the majority that created it.

As elected city councilmembers, Hueter continued, they owed their constituents their ear, but they should not allow constituents to own their minds. Rational, fair-minded review and actions for the majority should be the rule of the day in city council chambers, he said. The A2D2 process had been created, and subsequent D1/D2 zoning had been crafted, to provide a clear path for where the community wanted density to occur, he said, and to establish the certainty that development groups need in order to achieve that density.

Hueter allowed that it is fair to expect a review of an ordinance once it has “acquired its legs” – but to date, he contended, there’s not been a significant enough sample on which to base rational reactions. To impose a moratorium on the 413 E. Huron project would send a “frightening message” to the property owners and potential developers of downtown sites. The 413 E. Huron project, he pointed out, is already nine months into the site plan review process, through the planning commission with a majority vote [though not with a recommendation for approval], and it’s now just two weeks before it’s supposed to come before the city council

“We define ourselves by our laws,” Hueter said. Zoning ordinances are laws that tell a property owner how a community would like its property to be developed. By this direction and invitation, he continued, people move forward with developing their sites and with the expectation that these laws will be honored. To use a moratorium to halt this development at this time subverts the community’s legal obligations to these property owners. “The Ann Arbor I know is one where diversity is accepted,” he said. Looking different is not an affront, and coming from out of town is embraced, as a positive addition to a tolerant community. That diversity makes us a richer and more vibrant community, he said. We all know why this moratorium is on the agenda tonight, he said. And we all know which specific property it’s supposed to affect, he said. To allow a minority to direct and influence the vote is simply wrong, he concluded.

Tom Stulberg told the council that he lives in and owns property in historic districts. So he wanted to focus on that aspect of things. He thanked the council and the people in the audience who had worked very hard on the process to come up with the A2D2 zoning ordinance. A lot of effort had been put in by a lot of people on that. He allowed that it’s not always working – but said that’s not a criticism as much as it is a recognition of the iterative process of planning and zoning.

Ann Arbor has historic districts that immediately abut high-density zoning, he noted. That doesn’t necessarily work, he contended, giving as an example The Varsity building, which “looms over” nearby historic structures. It’s important to recognize that we owe it to all citizens living in our city and historic districts and who own property in historic districts, to honor Chapter 103 of the city code [on historic districts] as highly as we honor the other sections of the city code, he said.

Susan Friedlaender told the council that she represents the owner of the 413 E. Huron project. She responded to some things that she’d heard that night. With respect to the historic district question that Stulberg had just discussed, she noted that almost every parcel within that district is either designated historic or adjacent to a historic district. If development were limited on properties adjacent to historic districts, that would not leave much left over, she said. There are lots of properties that are protected and should be protected, she allowed. But when that protection starts “spilling over,” then it becomes over-broad, she said.

On the legal questions, she told the council that they’d heard a lot of general propositions, but reminded them that they are not a court. She didn’t want to make legal arguments to a court. She allowed that generally a moratorium might be reasonable, but she reminded the council that you have to look at the specific facts of the case. She contended that if you look at the specific facts of a particular case, then under the specific facts of that case, a court could find that there’d been bad faith. Courts can also find that protected property rights have been invaded, she said. And courts can find that a moratorium is invalid.

Friedlaender referred to the U.S. Supreme Court case that Hyman had brought up – mentioning that she and Norm had been old colleagues and practiced law together for many years. In the Tahoe-Sierra case, the court said that it was not making general propositions, she said. The court was not saying that a moratorium could never constitute an improper taking or that it is always an improper taking. Rather, the court had said that it depends on the facts.

Friedlaender told the council that she really did not want to debate the moratorium that evening and whether it was valid or not, but she felt that the line that was drawn – with respect to which projects are included and which are not included – is arbitrary. It’s arbitrary, because it is not a legitimate distinction to make between a site plan that’s been recommended for approval by the planning commission and one that’s been “technically” denied. The 413 E. Huron project had been technically denied, she said, but a majority of the planning commissioners had said that the 413 E. Huron project meets the terms of the ordinance. The professional city planning staff also said that the project meets the terms of the ordinance, she noted. And those planning commissioners who voted against the project had honestly said that they understood that it technically met the requirements of the ordinance, she contended, but nevertheless had voted against it.

Ray Detter spoke on behalf of the downtown area citizens advisory council, saying that the CAC strongly supported the moratorium resolution. It would deliver a long-promised review of the D1/D2 zoning ordinance. The CAC also supported the resolution to reconvene the design guidelines task force, he said. The zoning moratorium, he said, was crafted so well that he hesitated to elaborate on it. In 2009, he said, the city council had adopted the D1/D2 zoning after considerable discussion and uncertainty. The council had expressly stated at different times that it would revisit the zoning and the design guidelines process after a year or more. He contended that it was apparent now that the zoning was not working well, characterizing it as “flawed.” Out-of-town developers come and say that their projects are by right, Detter said. They produce buildings that ignore the suggestions of the design guidelines review board and the policy directions in the city’s adopted master plan.

Detter invited the city council to consider The Varsity – which he characterized as a student high-rise – and its negative impact on the neighboring First Baptist Church, which is a historic property to the east. That project had alerted the community to the dangers of the existing zoning, Detter contended. Another example of the failure of the zoning and design guidelines, Detter said, is the “massive student high-rise” proposed at 413 E. Huron. Both projects are massive, unfriendly structures, he said, that conflict with the city’s adopted master plan. In support of that contention he cited elements of the downtown plan related to sensitivity to context.

Detter noted that the city’s historic district commission had passed a resolution stating that the 413 E. Huron project “threatens the preservation of significant historic resources in the adjacent Division Street historic district.” He contended that the project stretched the floor area to the maximum – using what he called inappropriate residential premiums. It created a pedestrian-unfriendly experience, and ignored the advice of the design review board. But the developer insisted that the project was “by right,” he said. Detter also called for re-examining the appropriate zoning for the parcel now used by the University of Michigan Credit Union, formally a parking lot for the Ann Arbor News.

Bruce Thomson noted that the three parcels at North Division and Huron – site of the proposed 413 E. Huron project – have been the subject of much attention lately. In all the public discussion one key point has been sadly missing, he said: All three parcels have always been zoned for dense, high-rise construction. Prior to the new master plan and downtown zoning ordinance that was enacted in 2009, the land was all zoned C2AR. That zoning allowed for 660% floor area ratio (FAR), a 30-foot rear setback, no side setbacks and no height restrictions. “Let me repeat that: there were no height restrictions on this land,” Thomson said.

People who contend that some new zoning gift was granted to the land are misinformed, he contended. Under the new D1 zoning designation enacted in 2009, the land allows 700% floor area ratio, no side setbacks, and a height restriction of 180 feet. The character overlay district imposes a further limitation of a 150-foot height, and through setback requirements pulls any building on the parcels toward Huron Street – away from the historic district. The net effect of the new zoning, he said, was to allow an additional 6% of density.

His family had owned the land for almost 80 years, Thomson said. The zoning had always been for dense commercial development. When his grandfather bought the property, it was home to the Haunted Tavern – a commercial enterprise. His grandfather then built the A&P building – a commercial enterprise. The same is true for the Zahn family, which owned the corner parcel for 80 years. For all these decades, the owners had been subject to the rules and requirements of commercial land. The owners had paid the taxes that are commensurate with dense, high-rise commercial land.

The key point is that every homeowner who bought property adjacent to these properties did so with the fully available knowledge that they were zoned for dense commercial high-rise construction, Thomson said. If there was any doubt about the zoning and its possible effect, you only have to look at what’s already built farther up the block. On the same block is Sloan Plaza. Its eight extra-tall floors reach closer to 10 stories in height, he said. Next to that is Campus Inn, which is 14 stories tall, he said. It was obvious, he continued, that the zoning allowed for large, tall buildings. In 2009 the city council had rejected the concept of downzoning the corner of Huron and Division streets, because that would create a “special little pocket” surrounded by different zoning on three sides, which would not have been equitable. It would’ve looked strange, he said, to pick a small slice of the street to limit it to 40% of the height and floor area ratio [as in D2 zoning] allowed on the rest of the street. That would have been bad planning in 2009 and it would be bad planning today, he said.

A lot of time and energy had been spent crafting a compromise solution for the site, which he characterized as unique and challenging. The site borders residential homes on one side and the busiest road in the downtown on the other. The result of that compromise was that the site was treated with special limitations on height and setback – which still allow for the dense, tall construction that the land was entitled to, he concluded.

Outcome: The council voted to hold a closed session on the issue. After emerging from their closed session, the council voted without deliberation to postpone consideration of the moratorium for two weeks, until March 18.

On the reconvening of the design guidelines task force, Sabra Briere (Ward 1) noted that the design review board had requested the review process. A brief discussion resulted in a decision to specify Sept. 17, 2013 as the date by which a recommendation on any revised process should be given to the council.

Outcome: The council voted unanimously to reconstitute the design guidelines task force.

DDA Ordinance Revisions

The council was asked to consider several revisions to a city ordinance governing the Ann Arbor Downtown Development Authority (DDA). Some of the proposed revisions would have an impact of several million dollars over the next two decades, affecting several jurisdictions besides Ann Arbor.

Among the revisions to Chapter 7 that are being considered by the council are: a new prohibition against elected officials serving on the DDA board; term limits on DDA board members; a new requirement that the DDA submit its annual report to the city in early January; and a requirement that all taxes captured by the DDA be spent on projects that directly benefit property in the DDA tax increment finance (TIF) district.

But most significant of the revisions would be those that clarify how the DDA’s TIF tax capture is calculated. The “increment” in a tax increment finance (TIF) district refers to the difference between the initial value of a property and the value of a property after development. The Ann Arbor DDA captures the taxes – just on that initial increment – of some other taxing authorities in the district. Those are the city of Ann Arbor, Washtenaw County, Washtenaw Community College and the Ann Arbor District Library. For FY 2013, the DDA will capture roughly $3.9 million in taxes.

The proposed ordinance revision would clarify existing ordinance language, which includes a paragraph that appears to limit the amount of TIF that can be captured. The limit is defined relative to the projections for the valuation of the increment in the TIF plan, which is a foundational document for the DDA.

If the actual rate of growth outpaces what was anticipated in the TIF plan, then at least half the excess amount is supposed to be redistributed to the other taxing authorities in the DDA district.

What the proposed ordinance revisions clarify is which estimates in the TIF plan are the standard of comparison – the “realistic” projections, not the “optimistic” or “pessimistic” estimates. However, the ordinance revisions as currently formulated do not clarify whether a “cumulative” method of performing the calculations should be used or if a year-to-year method should be used. It’s anticipated that a further revision will be introduced specifying the “cumulative” method.

Use of the cumulative method has an impact on whether the redistribution of excess TIF is made on a one-time or recurring basis. Under the cumulative method, other taxing authorities in the Ann Arbor DDA TIF district would see a total on the order of $1 million in additional tax revenue, compared to the way the DDA currently calculates the TIF capture. The city of Ann Arbor’s annual share would be more than half of that amount, around $600,000.

Method: Year-to-Year                   
Refunds                                                         
       City       County      WCC       AADL      Total Ref    DDA TIF
FY14   $429,409   $149,392    $94,257   $40,163   $713,221     $3,964,457
FY15    $11,958     $4,160     $2,625    $1,118    $19,862     $4,774,758

===============================

Method: Cumulative                     
Refunds                                                      
       City       County     WCC        AADL      Total Ref    DDA TIF
FY14   $613,919   $213,583   $134,757   $57,421   $1,019,680   $3,657,998
FY15   $635,108   $211,673   $139,195   $58,539   $1,044,515   $3,773,043

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The clarification of the ordinance crucially strikes two paragraphs related to bond and debt payments. One of the two paragraphs was key to the DDA’s current legal position – which is that no redistribution of TIF is required under the ordinance, given the DDA’s financial position. The DDA interprets the stricken paragraphs to mean that no redistribution to other taxing authorities needs to be made, until the total amount of the DDA’s debt payments falls below the amount of its TIF capture. In the FY 2014 budget, adopted by the DDA board at its Feb. 6, 2013 meeting, about $6.5 million is slated for bond payments and interest.

That clearly exceeds the amount of anticipated TIF capture in the FY 2014 budget – about $3.9 million. The DDA is able to make those debt payments because about half of that $6.5 million is covered by revenues from the public parking system. The DDA administers the public parking system under contract with the city of Ann Arbor.

This issue first arose back in the spring of 2011. The context was the year-long hard negotiations between the DDA and the city over terms of a new contract under which the DDA would manage the city’s parking system. The Chapter 7 issue emerged just as the DDA board was set to vote on the parking system contract at its May 2, 2011 meeting.

When the issue was identified by the city’s financial staff, the DDA board postponed voting on the new contract. The period of the postponement was used to analyze whether the DDA’s Chapter 7 obligations could be met – at the same time the DDA was ratifying a new parking system contract, which required the DDA to pay the city of Ann Arbor 17.5% of gross parking revenues.

Initially, the DDA agreed that money was owed to other taxing authorities, not just for that year, but for previous years as well. And the DDA paid a combined roughly $473,000 to the Ann Arbor District Library, Washtenaw Community College and Washtenaw County in 2011. The city of Ann Arbor chose to waive its $712,000 share of the calculated excess.

Subsequently, the DDA reversed its legal position, and contended that no money should have been returned at all. That decision came at a July 27, 2011 DDA board meeting.

The following spring, during the May 21, 2012 budget deliberations, Stephen Kunselman (Ward 3) proposed an amendment to the city’s FY 2013 budget that stipulated specific interpretations of Chapter 7, with a recurring positive impact to the city of Ann Arbor’s general fund of about $200,000 a year. Kunselman wanted to use that general fund money to pay for additional firefighters. That year the budget amendment got support from just two other councilmembers: Jane Lumm (Ward 2) and Mike Anglin (Ward 5).

The proposed changes to the ordinance on the March 4, 2013 agenda were put forward by Stephen Kunselman (Ward 3) and Sumi Kailasapathy (Ward 1).

For a Chronicle op-ed on this topic, see: “Column: Let’s Get DDA TIF Capture Right.”

DDA Ordinance Revisions: Council Deliberations

Stephen Kunselman (Ward 3) introduced the ordinance amendments by saying that he’d be looking to postpone the question. He was inclined to postpone in light of additional information that the city council had received on the topic. The city council, he said, controls the budget, and the DDA’s TIF capture is regulated by the city ordinance on the DDA. Kunselman observed that the DDA is the only city agency that has been increasing its budget since 2002 – while the rest of the city’s units have been decreasing. If no action is taken, he said, in fiscal year 2014 the DDA’s budget stands to go up to $4.9 million – which is a significant jump. That jump is due to the new downtown buildings that have been constructed, he noted.

In addition to the ordinance amendments on the TIF calculation, Kunselman noted that there were also some amendments concerning DDA board membership – on term limits and the prohibition of elected officials serving on the board. He indicated he was open to changes to the language. His purpose was not to vilify the DDA, he said, but rather to improve the institution.

It’s easy to vilify the DDA when you have people on both sides of the negotiating table, Kunselman said. [This was an allusion to the fact that in the past as the city and the DDA negotiated a contract under which the DDA operates the city's public parking system, mayor John Hieftje and then-city councilmember Sandi Smith simultaneously served on the city council and the DDA board.] The purpose of the amendments was not to target any official, he contended. Kunselman observed that one member of the DDA board [Leah Gunn] had been serving for over 20 years. He indicated that the DDA board members are getting “set in their ways. He called for “new blood” on the DDA board.

Chuck Warpehoski (Ward 5) – whose wife Nancy Shore serves as executive director of the getDowntown program, which receives funding from the DDA – described his wife’s employment circumstances. He said his wife’s salary is funded by a federal CMAQ [Congestion Mitigation and Air Quality Improvement] grant and that her direct employment is not tied to DDA funding. He also said that your spouse’s financial interests are not inherently your own. Some back-and-forth by Marcia Higgins (Ward 4) and city attorney Stephen Postema established that no vote on Warpehoski’s participation in deliberations on this matter was required. However, if someone objected to his participation, a vote could be taken. No one objected.

Sabra Briere (Ward 1) indicated that during a recess to the meeting that night and before the meeting started, she’d tried to go through the detailed answers provided by the financial services staff to written questions the council had submitted before the meeting. The response “TBD” to one of the questions made it clear to her that the council doesn’t have the information that might satisfy its curiosity. She also wanted to run these questions past the DDA’s own financial manager [deputy DDA director Joe Morehouse]. She supported a postponement.

A brief back-and-forth established a belief that the city’s financial staff and the DDA could answer any questions by the council’s March 18 meeting.

Outcome: The council voted unanimously to postpone the item until March 18.

624 Church St. Site Plan

The council was asked to approve the site plan of a 14-story apartment building at 624 Church St. The planning commission had given the project a unanimous recommendation of approval at its Jan. 15, 2013 meeting.

The requested action by the council came in the context of objections from representatives of the adjacent Zaragon Place apartments, who had previously raised concerns about how Zaragon – located at 619 E. University – will be impacted by construction at 624 Church. Zaragon opened a few years ago and is marketed to University of Michigan students. The developers of 624 Church intend to market their apartments to the same demographic. [.pdf of Feb. 28, 2013 letter from Zaragon attorney] [.pdf of Jan. 7, 2013 letter from Zaragon attorney] [.pdf of Jan. 10, 2013 response from 624 Church developers]

At the planning commission’s public hearing, residents had raised concerns about parking and the building’s size. There were also residents who supported the project.

The 83,807-square-foot, $17 million project is located next to Pizza House restaurant, on the west side of Church between South University and Willard. The building would include 75 apartments with a total of about 175 bedrooms, ranging in size from 490 to 1,100 square feet. About 70% of the units are to be 1-2 bedroom units. Other features include an enclosed room to store up to 60 bikes and a rooftop plaza with benches and a grilling area. It is located in the D1 zoning district, which allows for the highest level of density of any zoning district in the city.

For buildings with floor area ratios (FARs) up to 400% in D1 areas, the zoning code does not impose any parking requirements. But under the system of by-right premiums available in the zoning code, a building can have an FAR up to 700%. That’s a premium based on residential use: For each square foot of floor area that is used for multiple-family dwellings, an additional 0.75 square foot of floor area is allowed. For buildings that are larger due to this residential use, the zoning code does impose a parking requirement.

However, there will be no vehicle parking spaces on site at 624 Church St. The Ann Arbor Downtown Development Authority, at its Oct. 3, 2012 meeting, authorized the project to purchase up to 42 monthly parking permits as part of the city’s contribution in lieu (CIL) program. The CIL provides an option to purchase monthly permits to fulfill the city’s parking requirement for a project, but the cost is at a rate 20% higher than standard pricing.

The developer hoped that those permits would be for spaces located at the nearby Forest Avenue parking structure. The DDA board has struggled with that decision on location, as an operations committee meeting on Dec. 19, 2012 was inconclusive. However, at a March 1, 2013 meeting of that committee, a clear indication of support came from the committee for all 40 requested permits to be provided in the Forest Avenue structure. Local attorney Scott Munzel, who represents the developer Opus, attended that committee meeting.

624 Church St. Site Plan: Public Hearing

Architect Brad Moore reviewed some of the history of the project, including the fact that a previous expansion of Pizza House had included foundations that would allow construction on top of the existing structure that could go up to 17 stories. He observed that the D1 height limit meant that it wasn’t possible to build 17 stories. Moore reported that the conclusion of the city’s design review board had been that the project is harmonious with the context. Panels used in the construction would be prefabricated off site, and would minimize the amount of construction noise and debris. Changes to the project had been made as a result of the design review board’s recommendations and input from the citizens participation meeting, he said. Those changes included changing the unit mix so that the building would have predominantly 1-2 bedroom units – 74% of the units. Texture had been added to the cladding, Moore said. And the height of the project had been reduced by one story. Moore also noted that the project had received a unanimous recommendation of approval from the city’s planning commission

Dennis Tice told the council he was representing the Tice family, the owners of Pizza House, and was available to answer any questions.

Mark Bell spoke on behalf of The Opus Group, which is working with the Tices as the developer. He described Opus as a vertically-integrated design-build firm that developed projects in all asset classes: commercial, residential, multi-family, office, industrial, retail, government, and higher education. Since 1953, Opus has developed about 2,600 projects. Three main principles guide Opus, he said: integrity, safety and professional expertise. He thanked the Tice family for working closely with Opus to design a project that the city of Ann Arbor will be proud of. Like Moore, he noted that the project had been modified to include predominantly 1-2 bedroom units – 74% of them. That was meant to attract a broader demographic, he said. He also pointed out that the building would be certified by LEED.

Ethel Potts spoke against the project, saying it had several remaining issues. As an example she noted that the building goes up to the rear lot line, and the owner of the adjoining property had raised a legal objection – the issue was trespassing. Without trespassing on its neighbor’s property, she didn’t know how the project could be built.

Alluding to satisfaction of the parking requirement for the project through the contribution in lieu (CIL) program, she hoped some of the parking in the Forest Avenue structure would still be available to the public.

Eleanor Linn told the council that she supported the letter from the attorney for Zaragon Place, which called for additional study of light and safety issues.

Thomas Partridge wanted assurance that the apartments to be constructed are affordable and have sufficient parking. He noted that there are very few college students – the anticipated target market for these apartments – who don’t want to have their own vehicle.

Sandra Sorini Elser introduced herself as legal counsel for the owner of Zaragon Place, which backs up to the proposed 624 Church St. project. The owner is not opposed in concept to the project. But a couple of elements of the site plan give the Zaragon Place owners great concern, she said – including concerns about the health, safety and welfare of Zaragon Place student residents. The western wall of the 624 Church St. project will be right at the lot line, she said. During construction, Zaragon residents using the backyard of Zaragon could be endangered by the installation of heavy concrete panels and other construction activities. She told councilmembers they’d been sent letters raising those concerns. She added that – despite statements by the developer of 624 Church St. – there is no easement available for 624 Church St. to use. So the developer of 624 Church St. could not use the Zaragon ground or airspace to construct its building. She reminded the council that the city’s site plan review standard requires a finding that there be no danger to health, safety and welfare – and she hoped the council would consider the construction safety concerns in that context.

Jim Caesar introduced himself as senior vice president for Opus. He pointed to the safety track record of the company, citing an experience modification ratio (EMR) that has been in the top 5% for the last 12 years. He indicated that Opus would not be using the Zaragon Place backyard as a construction staging area or a swinging area. Opus had eliminated any need to swing anything over the Zaragon property, or to have any air rights. He said that’s not the way Opus wanted to do the construction, but they would do it that way. He’d met with crane experts as well as with the city’s top building official, Ralph Welton, to review the safety plan.

Caesar said he kept hearing about things Opus didn’t plan to do – like trespassing on the Zaragon Place property. They’d met with experts to develop the crane system for the zero-lot-line construction at 624 Church St. Opus had two projects – one recently completed and another being built – that were being built with zero lot lines. He said it was not new technology.

Local attorney Scott Munzel spoke as the representative of Opus. The first and most important point, he said, is that the 624 Church St. site plan meets the zoning rules and related goals of the city’s downtown plan, which encourages dense land uses. He wanted also to touch briefly on the parking issue. This is the first time the CIL program would be used, he said. Opus had worked with Ann Arbor’s downtown development authority, which manages the city’s public parking system, to determine that there’s adequate space in the Forest Avenue structure for the 40 permits the project needs. He noted that the monthly permits in the CIL program are priced at a 20% premium over the normal rate. Opus is comfortable with the safety of the proposed construction technique, Munzel said.

Alan Haber began by saying he was not fully familiar with this project. He had trouble understanding why the council would be considering approval of a building at the same time it was considering a moratorium.

624 Church St. Site Plan: Council Deliberations

Christopher Taylor (Ward 3) asked for confirmation of the roughly 70% figure for 1-2 bedroom units – because there was an apparent discrepancy with the information the council had been provided in their packets. City planner Alexis DiLeo indicated that the 70% figure was confirmed, but it depended to some extent on whether a variance, for which the developer had applied, was granted. If it’s not granted, some units might need to combine bedrooms internally.

Taylor said he thought it was important that the developer had been willing to work with the feedback they’d heard from citizens participation meeting – by weighting the unit mix more heavily toward 1-2 bedroom units.

Responding to a question from Jane Lumm (Ward 2), DiLeo explained that the DDA had approved the 40 monthly parking permits through the CIL program at a March 1, 2013 meeting [of the operations committee].

Sally Petersen (Ward 2) asked for a description of the mechanics of building the west wall – without trespassing on the Zaragon Place property. The basic answer from Jim Caesar was that they wouldn’t be using a tower crane that spins in a circle. Instead, they’d be using a crawler crane with articulating jib. The jib lowers or raises without crossing the property line, he explained. It has a modified jib tip, with a GPS locator, which provides feedback to the operator. The crane slows down when it approaches the property line. Opus doesn’t plan on trespassing: “If we do, we’ll have an angry neighbor.”

Sabra Briere (Ward 1) said she’d heard concerns about small debris falling down. The explanation she was given was that a tarping system would be used, so any debris would hit the tarp system.

Briere also asked about maintenance on the west side. The answer was that precast tiles will be used as shingles and the construction wouldn’t rely on caulk. Briere said she appreciated that the design had been altered to identify the entrance to the building more clearly.

Marcia Higgins (Ward 4) thanked the development team for being interested “in what our community had to say.”

Stephen Kunselman (Ward 3) said his impression was that the project would cater to students, because it’s located in a student district. But given the precast construction, he wanted to know what the flexibility was for accommodating a new market. He based his question on a document he’d received from his employer, the University of Michigan, and read aloud from a portion of it:

In 2008-09, Michigan stood at the cusp of a sharp, long-term contraction in its production of high school graduates. Only California is projected to lose more graduates than Michigan, and only Vermont will shrink faster. After peaking in 2007-08 at 123,576 graduates, the state will see substantial contraction beginning in 2009-10. By 2019-20, high school graduates will fall 20% to below 99,000 and the decline is projected to continue indefinitely beyond that. Michigan’s nonpublic schools are projected to produce about 30% fewer graduates in 2019-20 compared to 2008-09. But unlike many other states, nonpublic graduates will retain close to a 7% share in Michigan because of the commensurate contraction in public graduates.

Kunselman ventured that the student housing market would be under stress.

Caesar told Kunselman that the building construction is based on four quadrants that are rigid. But within those four quadrants, he said, there was almost total flexibility to relocate kitchens, bathrooms, walls – or anything.

Outcome: The council voted unanimously to approve the 624 Church St. site plan.

Prepping to Sell Former Y Lot

The council was asked to take a step toward putting the former YMCA parcel up for sale. The roughly 0.8 acre parcel in downtown Ann Arbor on the north side of William, between Fourth and Fifth, is currently used as a surface parking lot in the city’s public parking system. The city purchased the property nearly 10 years ago, in 2003. The council was asked at its March 4, 2013 meeting to direct the city administrator to prepare an RFP (request for proposals) for brokerage services to sell the lot.

A similar proposal to start the process for selling the lot was considered at the council’s Aug. 20, 2012 meeting, but received the support of only three representatives on the 11-member council: Mike Anglin (Ward 5), Jane Lumm (Ward 2) and Stephen Kunselman (Ward 3). Some councilmembers were generally in favor of selling the lot, but called the effort premature, given a planning effort that was then underway. This time around the resolution from Kunselman was co-sponsored by mayor John Hieftje.

What’s changed since August 2012 relates to a project that the Ann Arbor Downtown Development Authority has been working on for about two years – Connecting William Street, a planning effort that includes the former Y lot. The Connecting William Street project was undertaken by the DDA based on a directive from the city council, on a unanimous vote, given at its April 4, 2011 meeting. And at a Jan. 7, 2013 working session, the DDA gave a presentation to the council on its recommendations for future use of five city-owned parcels in the downtown area – the former Y lot, the Kline’s lot, the Palio lot, the Fourth and William parking structure, and the top of the Library Lane underground parking garage.

The city had used a loan to purchase the property from the YMCA for $3.5 million in 2003. The council voted in 2008 to extend a five-year loan with the Bank of Ann Arbor for another five years, through the end of 2013. The interest rate is 3.89%. The interest-only payments work out to roughly $140,000 a year. By the end of 2013, the total interest paid will be around $1.4 million.

A building on the site was condemned, and the cost of demolishing it and abating asbestos was around $1.5 million. The Ann Arbor DDA covered the demolition costs and has covered half of the interest payments. So the total amount of Ann Arbor governmental investment in the property is at least $6.4 million.

Revenue from the surface parking lot on the site – which charges a $1.40 hourly rate – amounts to $105-$140 per space per month for roughly 140 spaces. Over the last year, the lot has generated a rough average of around $20,000 per month. But usage has decreased since the opening of the new 711-space Library Lane underground garage, located across the street.

That parking revenue from the former Y site is collected by the Ann Arbor DDA, which operates the city’s public parking system under contract with the city. Under terms of that contract, the city receives 17% of the gross parking system revenues. Also under terms of the contract, the DDA has the option to object to eliminating a facility from the parking system, within 30 days of notification by the city.

Prepping to Sell Former Y Lot: Council Deliberations

Stephen Kunselman (Ward 3) led off deliberations by observing that a significant balloon payment was due in December. He thought the resolution was a good first step.

Jane Lumm (Ward 2) felt that selling the property “as is” is an option. The resolution doesn’t commit the city to sell the property, only to issue an RFP to engage a broker. If no actual deal results, then the risk to the city would be measured in terms of possible brokerage fees, and the amount of those fees isn’t known. She felt it was worth the small potential risk.

Mayor John Hieftje indicated that he had been hesitant to consider engaging a broker before the Connecting William Street (CWS) project recommendations came back. He ventured that some people argue against proceeding with this step, because the interest rate on the city’s loan is low and the surface parking lot currently generates revenue. He also noted that the DDA is “a good partner” by covering half the cost of the interest payment. He felt it was a good idea to explore the sale now and possibly have money left over from the sale to deposit into the city’s affordable housing trust fund. He asked for the council to support the resolution.

Chuck Warpehoski (Ward 5) said he’d support the resolution. He observed that the council had delayed a decision on the moratorium, which might affect the potential sale price. Whatever people thought about the CWS project, part of the reason to take the approach of issuing an RFP for parcels was to set higher standards for design. He stated that the city should have high standards for the design of what gets built there – something that is “worthy of the city.”

Sabra Briere (Ward 1) indicated agreement with Warpehoski’s comments. She picked up on Hieftje’s allusion to the affordable housing trust fund. By way of background, the council voted on Oct. 15, 2012, to deposit the “net proceeds” of the sale of the former Y lot into the affordable housing trust fund. Briere indicated that she wanted to be generous about how the net proceeds are calculated – because they could be defined in a way that diminished the amount that would go to the affordable housing trust fund.

Christopher Taylor (Ward 3) indicated that he was still up in the air on how to vote, saying he recognized there’s a force in what people were saying. But the council had asked the DDA to take a long look at the five parcels. And the DDA had returned to the council with the idea of linking the former Y lot and the top of the Library Lane underground parking garage. That linkage, he allowed, reduced the possibility of movement anytime soon. But he felt there’s more value in the parcels if they were combined.

Taylor did not feel it was a threat that the balloon payment is due – because the loan could be refinanced. He indicated he was inclined to continue with the recommendation of the CWS process. In large part, Margie Teall (Ward 4) echoed Taylor’s sentiments. The work the DDA put into CWS deserves more thought and recognition, she felt. One concern she had was the city might lose control over design and use, if the lot were just sold off. That concern was mitigated by the fact that the resolution was only about engaging a broker, not committing to a sale.

Sally Petersen (Ward 2) responded to the concern about losing control over the future of the lot, by suggesting it might be appropriate to try loosening control. When she heard the climate for development described as “radioactive,” she felt it might be a good challenge “to see how flexible we can be.”

Outcome: The council voted to direct the city administrator to issue an RFP for brokerage services to sell the former Y lot. The lone dissent was from Christopher Taylor (Ward 3).

Orkney Parcel Near Bluffs Nature Area

The council was asked to approve the purchase of a parcel located on the west side of the Bluffs Nature Area. The cost of the roughly 0.357-acre piece of vacant land located at 1240 Orkney – with a current SEV (state equalized value) of $49,200 – was $115,000. [SEV is based on 50% of market value.]

The parcel is located immediately adjacent to the Bluffs Nature Area – in the north part of the city, near the confluence of North Main, M-14 and Huron River Drive. The parcel is intended to provide an additional access point to the nature area, from the west.

The total proposed appropriation of $128,000 in open space millage funds for purchasing the Orkney parcel included $3,000 in closing costs and $10,000 in due diligence. An environmental assessment would be done before the closing.

The vote on the Orkney parcel had been postponed from the council’s Feb. 19, 2013 meeting. Postponement came in the context of objections from Stephen Kunselman (Ward 3) on the cost of the land, and questions from other councilmembers about the need for access from the west side of the nature area.

Orkney Parcel Near Bluffs: Council Deliberations

As he had at the council’s previous meeting, Stephen Kunselman (Ward 3) questioned the purchase price. The information he’d requested on the required utility connection charges had been provided: $34,500. That would add to the cost of the land acquisition, if it were being sold as developable land. The $115,000 price the city was offering would translate to a total cost of $149,500, he said. If the land didn’t sell on the open market at that $115,000 price, why was the city paying that price? Kunselman blamed an inability of landowners to sell vacant property on the utility connection charges. He understood there was sentiment in the neighborhood in support of the city’s purchase of the land, but he had a really hard time paying full market value. He felt the market value of the land was probably more like $80,000.

Kunselman allowed he’d probably wind up voting for the purchase, but he felt the council should be looking at repealing those utility connection charges, because they were really hamstringing new infill development. Related to that, he said that he’d received his own property assessment recently – and it was down by $15,000. That put him “under water,” he said.

Sabra Briere (Ward 1) indicated that her biggest concern is how the land will be used, so she had questions about parking and bicycle access. She noted that residents have been using it informally as an entrance to the Bluffs Nature Area. Residents were concerned that people would park their cars on the street or the land. Sumedh Bahl, the city’s community services area administrator, told Briere that when the parcel is acquired, staff would look at it, and ensure that it doesn’t become a parking lot – but the staff haven’t yet considered all the details. The parcel is meant for walking and trail access, Bahl said. He indicated it’d be possible to place some signs directing people where to park.

Jane Lumm (Ward 2) reported that she’d driven past the property. From her perspective, it’s not the right spot for parking, characterizing it as a beautiful lot. She wanted to know if an easement had been considered instead of a purchase. Bahl indicated an easement had not been considered.

Chuck Warpehoski (Ward 5) gave his perspective as a runner using the parks system – saying that when he ran, the trails made access better, and multiple points of access would increase the utility of the nature area. He agreed with Kunselman’s points that the council should consider how connection charges impact infill development. He didn’t think it means the city is paying too much for the Orkney parcel, just that the council should review the connection fees.

Margie Teall (Ward 4) reported the view of a neighbor that increased traffic through the nature area would help prevent encampments from being established there.

Sabra Briere (Ward 1) described the nature area as a very rough natural area, with one of the best views of the Huron River from anywhere in city. But in the last few years complaints had been heard about people living in the woods. The more people use it, the less of a wilderness area it is, so the extra entrance is a positive thing, she concluded.

Outcome: The council voted to authorize purchase of the Orkney parcel over the lone dissent of Marcia Higgins (Ward 4).

Townhomes on South Maple

The council was asked to approve the site plan of a large townhome development at the northwest corner of West Liberty and South Maple. The project had received a unanimous recommendation of approval from the city planning commission at the Dec. 18, 2012 meeting of that body.

Blue Heron Pond is a planned project of 64 units on a 7.8-acre site that’s zoned R4B (multi-family dwelling). It’s the site of a development formerly called West Towne Condominiums that was started in 2005 but never completed. A building with 11 units has been constructed on the site, although the original developer – the Concannon Company – had planned to build 87 units.

The new owner, Norfolk Development, bought the property in the spring of 2012. The new $4.2 million project calls for constructing nine buildings in two phases. The first phase will include construction of four buildings along West Liberty, with the five other buildings in the site’s interior to be constructed at a later date. The complex will have a mix of two- and three-bedroom rental units ranging in size from 980 to 2,577 square feet, each with an attached one-car garage. Rents are expected to be in the $900 to $1,800 range.

The proposal is a planned project – rather than a by-right development – because a modification is being requested to the zoning requirements. Rather than the 20 feet between buildings that’s required in R4B zoning, the developer wants to reduce that amount to 15.7 feet between two of the buildings along West Liberty.

A large wetland in the center of the site will not be disturbed. A contribution of $26,000 to the city’s parks system has already been made, with the funds used for improvements at South Maple Park.

Townhomes on South Maple: Public Hearing

Brad Moore – having spoken at the public hearing on 624 Church St. as that project’s architect – drew a laugh by telling the council he was “still Brad Moore.” Moore noted that the project had been started by a previous owner and developer, but it had been a casualty of the economic collapse of 2008. The project is being reconstituted with improvements, using the existing infrastructure. The development will preserve the existing pond and nature area. The buildings will be downsized, reducing the number of dwelling units. Guest parking would be increased. The building form was changed to townhomes from stacked flats.

Thomas Partridge told the council he was there as an advocate of all residents of Ann Arbor, Washtenaw County, and the state of Michigan who can’t afford housing. He was concerned that the planning commission has not attached a requirement to the project that would result in the apartments being marketed or leased to residents who can afford them.

Townhomes on South Maple: Council Deliberations

Mike Anglin (Ward 5) asked about the affordability of the apartments. Brad Moore indicated that they’re not affordable in the sense of “affordable” that might qualify them as a public benefit for a planned unit development. But he indicated that he would not consider the apartments to be high-end or luxury. Responding to a question from Sumi Kailasapathy (Ward 1), Moore said rents would range from $900-$1,600 a month.

Chuck Warpehoski (Ward 5) thanked the developer for taking up the project, with its improvements in design.

Outcome: The council voted unanimously to approve the Blue Heron Pond site plan.

515 N. Fifth Ave. Site Plan

The council was asked to approve the site plan of a residential building at 515 N. Fifth Ave., between Kingsley and Beakes on the west side of North Fifth. The project is a three-story, 8,404-square-foot building with four two-bedroom units: two condominiums and two apartments. The project had received a unanimous recommendation for approval from the city planning commission at that body’s Jan. 3, 2013 meeting.

The apartments would be on the second and third floors, while the condos would be on the first floor, with entrances from the north and south sides. Parking would be provided in an attached four-car garage in the front of the structure, though the garage openings are located on the side, near the front of the building. [.pdf of site plan] The site is zoned R4C (multi-family residential district) and the existing house on the site, with three apartments, would be demolished. It was built in 1901. Construction is estimated to cost $925,500.

The project had been postponed at the planning commission’s Dec. 4, 2012 meeting, as planning staff recommended giving the owners more time to address a range of issues related to utility, landscaping and natural features analysis. At that meeting, Christine Crockett, who’s president of the Old Fourth Ward Association, and Ray Detter of the downtown citizens advisory council spoke in opposition to the project. They had cited a range of objections, including their view that the design did not fit with the neighborhood.

515 N. Fifth Ave. Site Plan: Public Hearing

Thomas Partridge introduced himself as an advocate for those who need and deserve affordable housing. He asked how the council could approve such a limited number condos for this property, when there’s such a great need for housing. He called it a matter of civil and human rights.

Scott Bowers, the project’s architect, addressed the council, asking for approval. He described the physical parameters of the project and the prospective tenants.

515 N. Fifth Ave. Site Plan: Council Deliberations

Chuck Warpehoski (Ward 5) noted that the project is right down the street from where he drops off his daughter for preschool. He got some reassurance that access to the neighborhood wouldn’t be negatively impacted during construction.

Sabra Briere (Ward 1) lamented the fact that the porch is on the driveway side of the building instead of the street. Porches not facing the street were starting to be seen in other projects as well. That’s beginning to become a concern of the planning commission, she reported. [Briere is the city council's appointee to the planning commission.] She’s heard it mentioned at two separate planning commission meetings. She simply wanted to note the issue as a concern.

Outcome: The council voted unanimously to approve the 515 N. Fifth site plan.

FEMA Grant on 721 N. Main Demolition

The council was asked to approve the receipt of $87,704 in funds from the Federal Emergency Management Agency (FEMA). The grant money is to go toward demolishing two buildings on the city-owned 721 N. Main property near downtown Ann Arbor.

The 721 N. Main site is a former city maintenance yard, and is part of a broader area being studied by a task force. That area includes the North Main corridor and extends to the Huron River, covering the MichCon site near Broadway.

The cost of the demolition will be $116,939, with the remaining $29,235 to be paid by the city. The city’s portion will be drawn from a combination of funds – fleet services, major streets, local streets, and stormwater utility.

The two buildings are being demolished because they’re in the FEMA floodway. A third building – not in the floodway, but still in the flood fringe – is being studied for possible re-use. On a recommendation from the task force, the council approved $30,000 for the physical testing of that building at its Feb. 19, 2013 meeting.

The task force recommendation for the use of the 721 N. Main site has already been delivered to the city council, and is consistent with a previous council resolution that the floodway portion of the site would be incorporated into an Allen Creek greenway. The site-specific recommendation for 721 N. Main was delivered to meet deadlines for grant applications. The recommendation for a broader area on the 721 N. Main site is due at the end of July 2013. The city is applying for $300,000 in funding from the Washtenaw County parks and recreation commission’s Connecting Communities program, which had a December 2012 deadline. The city also plans to apply for a Michigan Natural Resources Trust Fund grant, which has an April 1, 2013 deadline.

FEMA Grant on 721 N. Main: Council Deliberations

Sabra Briere (Ward 1) noted that the issue has been previously discussed. Because they’re in the floodway, the buildings have to be removed, she said. The demolition of the buildings moves things closer to turning the property into a public amenity. She mentioned the work of the North Main task force, and expressed her hope that a link could be made between North Main Street and the Huron River.

Mayor John Hieftje said he was excited about taking another step toward establishing a greenway park.

Outcome: The council voted unanimously to receive the FEMA grant funds for demolition of the two 721 N. Main buildings.

Vehicle Purchases

The council was asked to consider six separate resolutions, authorizing the purchase of 44 new vehicles, with a total cost of $928,499. The vehicles include police patrol cars (7), 15-passenger vans (3), 4×4 pickup trucks (6) and compact cars (6), as well as several other vehicle types, used in different city service units.

The city’s vehicles are managed through the fleet services fund, not by each individual service unit. Replacement of a vehicle is determined through a scoring system that includes age, miles/hours of service, type of service, reliability (measured by number of repair work orders), maintenance cost, and supervisor review.

The supervisor’s rating is weighted so that vehicles that have been in service for a long time or that have had one exceedingly high repair charge – but are otherwise in very good condition – are not replaced.

Vehicle Purchases: Council Deliberations

The resolutions on the vehicle purchases were moved and voted on “all in one go.”

Jane Lumm (Ward 2) appreciated that the review process for vehicle replacement is robust and thorough. Police vehicles were being replaced in a way that’s consistent with the union contract. It should be reassuring to the public that there’s a robust process, she said.

Outcome: The council voted to approve all the vehicle purchases.

Energy Agenda Items

The council was asked to act on three energy-related items. First, the council was asked to authorize the expanded use of its energy fund to support community energy efficiency programs – not just programs to improve municipal energy efficiency. The resolution effecting the change to the fund’s use limits its use for community programs to 20% of the existing fund balance. That balance, according to environmental coordinator Matt Naud, stands at around $400,000. The kind of support the energy fund is intended to provide includes establishing future loan loss reserve funds, providing low-interest loans, and buying down interest rates.

A second energy-related item was a resolution to prepare the city’s infrastructure systematically to support plug-in electric vehicles. That included direction to the city staff to review permit processing and zoning codes to ensure that barriers don’t exist to creating plug-in infrastructure. It also included direction to the fleet services unit to weigh the possibility of making plug-in vehicles a part of the city’s fleet. The resolution also directed that the city collaborate with other organizations like the University of Michigan. The resolution included a six-month deadline for reporting back to the council on any actions the council needs to take to remove barriers to plug-in readiness.

A third energy-related item on the council’s agenda was a resolution of support for Earth Hour, which takes place this year on March 23. The resolution included encouragement of city employees to turn off or dim all non-essential lighting in city buildings between 8:30-9:30 p.m. on March 23. The resolution encourages residents to do the same.

Energy Agenda Items: Council Deliberations

On the energy fund item, some questions were raised about the impact of sequestration on the city’s federal energy grant. The city’s environmental coordinator, Matt Naud, indicated that the strategy had been to draw down every dollar from the grant the city could and not to give any of it back.

On the plug-in item, Jane Lumm (Ward 2) was impressed by the availability of online information about electric charging stations in the city’s public parking system. Sabra Briere (Ward 1) added that drivers have figured out that they can share a charging station, by communicating with each other through the course of a day – so a single charging station can be used by two or three vehicles during the day.

On the Earth Hour item, Chuck Warpehoski (Ward 5) said that he’d co-sponsored the resolution in response to feedback from constituents. He described the dimming of lights for one hour as a symbolic action, but the goal of that one hour is for it to be a catalyst for changing our energy culture. He said he hoped it didn’t have the negative press that surrounded it the last time around, quipping that you didn’t need to be a “dim bulb” to support it. [This was an allusion to a city council scandal a few years ago, when it came to light that some councilmembers were exchanging emails during meetings that included disparaging remarks about each other and others. One of the emails included an apparent reference to Ward 5 residents as "dim."]

Sabra Briere (Ward 1) observed that between 8:30-9:30 p.m. on March 23 is twilight – just after the equinox. It will still be relatively light. She’d seen a lot of neighbors outside last year.

Outcome: The council took separate unanimous votes approving all the energy-related items.

Ann Arbor Marathon Street Closing

Before the council for its consideration was approval of the necessary street closings for the 26.2 looping course through Ann Arbor for the second edition of the Ann Arbor Marathon.

Last year’s race, held on June 17, 2012, drew harsh criticism – as some residents were surprised to have their morning routes to church cut off and their Father’s Day plans disrupted.

As part of his city administrator’s report at the city council meeting the day after the marathon, Steve Powers noted a number of complaints had been received about disruption caused by the race. Powers asked councilmembers to forward complaints from constituents to him, saying the city staff would review the event and would appreciate hearing from councilmembers’ constituents.

The staff memo accompanying the council’s March 4, 2013 agenda item included a description of several changes to this year’s event, meant to address some of the complaints.

The date of the event in 2013 is Sunday, June 9 – not Father’s Day. Washtenaw Avenue was eliminated from the course, which is meant to diminish the impact to the Ann Arbor Transportation Authority’s bus service.

Improved efforts are also supposed to be made by Champions for Charity, the event sponsor, to notify neighborhood associations, churches, apartment complexes and other relevant organizations about the event. Course marshals will also get better training about alternative routes to recommend to the public, when people are confronted with an unexpected street closure.

Ann Arbor Marathon Street Closing: Council Deliberations

The item came late on the council’s original agenda, but the agenda was changed at the meeting so that the item could be considered earlier. Mike Highfield – president and CEO of Champions for Charity, the race sponsor – was asked to the podium to answer questions from councilmembers, which covered much of the same ground in the staff memo accompanying the resolution.

Responding to a question from Chuck Warpehoski (Ward 5), Highfield said that even if nothing were changed from last year, he expected that this year’s race would be smoother than last year, which was the first year of the race. In a city with no daily newspaper, he said, a significant portion of the community didn’t know about the race. But several changes had been made, he said. The most significant of the changes involved removing Washtenaw Avenue from the course – because most of the complaints last year were off Washtenaw Avenue. So six churches are no longer affected, he said. Another major change is to make the southern leg – down to the Briarwood Mall area – an out-and-back loop. That’s despite the fact that many runners don’t like out-and-back style courses, Highfield said. But that avoids going past five apartment complexes. The course this year doesn’t venture off into new parts of town.

Warpehoski followed up with specific questions about how notification would take place. Warpehoski also complained that registration had been taking place for the race since December last year – before council action on street closings. He said that process “leaves a little bit to be desired.” Highfield noted that if there were any risk, then it was his, and he explained a range of factors that had led to the item not being on the city council’s agenda earlier.

Mike Anglin (Ward 5) complained about the blaring music early in the morning. He wondered what the purpose of the loud music was during the run.

Sally Petersen (Ward 2) responded to Anglin’s question about the music by inviting him to put on his running shoes on June 9, saying the music helps get you out the door. Petersen applauded Highfield for getting the inaugural marathon off the ground last year. She characterized it as no small feat. She’d run the half marathon last year. She’d heard some concerns about street closings but hadn’t heard the noise complaints that Anglin had mentioned.

Sabra Briere (Ward 1) suggested that Highfield make sure all the churches are contacted. Marcia Higgins (Ward 4) wanted to make sure that residents of Hidden Valley Apartments on South State were given adequate notice.

Outcome: The council voted unanimously to approve the street closings for the June 9, 2013 Ann Arbor marathon.

Communications and Comment

Every city council agenda contains multiple slots for city councilmembers and the city administrator to give updates or make announcements about important issues that are coming before the city council. And every meeting typically includes public commentary on subjects not necessarily on the agenda. Here are some highlights.

Comm/Comm: About Public Speaking

During the time allowed for public commentary at the conclusion of the meeting, Thomas Partridge told the council he was an advocate for all those who need and deserve government services the most, including homeless people and people who can’t buy or rent a place to live. He complained that he’d called in at 8 a.m. that day, to reserve one of the 10 slots to speak at the start of the meeting. [All of the slots were taken by people who were speaking to the item on the agenda about the moratorium.] Partridge believed he should have been one of the 10 people.

Also during the time allowed for public commentary at the conclusion of the meeting, Michael Benson reflected on the council meeting two weeks ago, saying he’d been dismayed by the lack of courtesy expressed during public commentary – and he thanked councilmembers for sitting through it. He ventured that the public commentary rules might be amended to encourage people to be civil.

Comm/Comm: Ice Skating Rink

During the time allowed for public commentary at the conclusion of the meeting, Alan Haber updated the council on efforts to create a recreational skating rink on top of the Library Lane underground parking garage. He hoped that his group would be able to make a presentation to the next meeting of the DDA’s partnerships committee.

Present: Jane Lumm, Mike Anglin, Margie Teall, Sabra Briere, Sumi Kailasapathy, Sally Petersen, Stephen Kunselman, Marcia Higgins, John Hieftje, Christopher Taylor, Chuck Warpehoski.

Next council meeting: Monday, March 18, 2013 at 7 p.m. in the council chambers at 301 E. Huron. [Check Chronicle event listings to confirm date]

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