Because the public hearing on the project’s site plan had been continued from previous meetings, speakers who attempted to speak again were not allowed a second turn. John Floyd, when he approached the mic, was informed that he had spoken at a previous convocation of the same public hearing on Aug. 8. His reply was good-natured: “I’m sorry. I forgot!” Tom Partridge was similarly declined a second speaking turn. Said Partridge, “We wouldn’t want to overdo it on freedom of speech, would we.” When Hieftje admonished Partridge that certain rules had to be followed, and Partridge appeared ready to debate the merits of the rules, Hieftje demanded that Partridge sit down.

Public Hearing on 601 S. Forest Site Plan

Dan Ketelaar: Ketelaar, one of the developers on the project, led things off by saying that a lot had been accomplished over the last two weeks since the reduced site plan (from 25 to 14 stories) had been introduced – by working steadily with planning staff and the city attorney’s office. He summarized the meeting with neighbors held the previous Wednesday, attended by councilmembers Leigh Greden and Stephen Rapundalo, as successful in providing the information that people felt they needed. He concluded by saying that the benefits to the public good outweigh the objections of a few who are not satisfied.

David Fisher: Fisher said he had not originally planned to speak, but found he couldn’t just sit there. He said that he came to Ann Arbor in 1963 and the South University area hasn’t changed very much since then: it’s a two-lane street that is virtually impassable. He questioned why the revised site plan (from 25 to 14 stories) was not sent back to the city’s planning commission.

Patrick Nicholas: Nicholas works at the Village Corner, which is a convenience store housed in a building that would be demolished if the 601 S. Forest project moved forward. Conceding that he might be a little biased, he expressed concern that competition among landlords would drive up prices. He called the Village Corner a “pillar of the community.”

Public Hearing on 601 S. Forest Brownfield Plan

John Byle: Byle is a partner with Warner Norcross & Judd LLP, and has been working on the brownfield aspect of the project with the developer. He thanked city staff Matt Naud (environmental coordinator), Tom Crawford (chief financial officer) and Jill Thatcher (historic preservation coordinator) for their work. Byle said that six months ago the plan had included $13 million in principle and $5 million in interest, compared to the current request for around $10 million. He described the pollution on the site as legacy contamination from dry cleaning plus petroleum from a gas station.

Ellen Ramsburgh: Ramsburgh said there can be no justification for subsidizing a developer. She said that the scaled down version of the project has the same problems as the larger one and characterized the amount of actual pollution as negligible. She said it was disheartening to the South University area for the city to settle for this project and questioned whether council, as good stewards for taxpayers’ money, could award brownfield credits to the project.

Glenn Thompson: Thompson asked council to consider the brownfield request in the context of the original Super Fund legislation – situations like Love Canal in which state and local government would help out only when owners would have to abandon the property otherwise. Thompson said while the clean-up will cost $3 million, the request is for more than that. If you can get that much for this level of contamination, Thompson asked, why would you ever clean up real pollution. Thompson’s concluding remark, that tax-incremented financing borrows from the future, was met with light applause. Hieftje admonished citizens in attendance that applause was not permitted.

Peter Nagourney: Nagourney’s remarks were challenging to hear over the noise of the opening of the room dividers to allow for some much-appreciated air circulation. He said that it is appropriate to hope for wisdom. Saying he understood how the site qualifies as a facility, he also understood how the award of brownfield credits is discretionary. To date, Nagourney said, there’s been a reluctance on the part of the city to use the leverage it has to get the developments it wants. He said that he wanted to see hard bargaining for project features that will serve the interests of the community.

Karen Sidney: Sidney pointed out that in addition to the over $9 million requested as brownfield credits, the developer would be requesting an additional $6 million from the state (Michigan Business Tax credit). She questioned whether the city’s chief financial officer should be spending time structuring real estate deals for developers, and said that he should focus instead on the impact of the coming deep recession on city finances. Sidney said that overbuilding in the 1980s led to a decrease in Ann Arbor property values, and that current overbuilding would have the same effect. She concluded by inveighing against giving away future tax dollars.

Gwen Nystuen: Nystuen traced the history of retail at the building site based on her inspection of the Polk city directories. The Bagel Shop site, she said, was a barbershop in 1947. In 1949 it was a was dry cleaner and laundry. By 1954 it had become Armen’s Cleaners, but no dry cleaning took place on that site – 630 S. Ashley was where they did their dry cleaning. The soil boring in the basement of that building, she said, found no contamination. She concluded by saying that while it qualified as a facility, there was no evidence it’s heavily polluted.

Bob Snyder: Snyder thanked councilmembers Greden and Rapundalo for their work, as well as the developer, Dan Ketelaar. He characterized the previous evening’s caucus as an open exchange. Snyder said that the city should offer the minimum amount of brownfield credits or none at all, saying that he didn’t think the project at any size is inherently worthy of using taxpayer money. It’s time, said Snyder, to be vigilant, tough and demanding, stressing that our homes and tax dollars are at stake.

Barbara Copi: Copi said that as a landlord renting to students for over 30 years, she predicted with 95% certainty that a project of either size (14 stories or 25 stories) was doomed to economic failure. When directed by Hieftje to speak to the issue of the brownfield plan, she declared, “I am!” Copi based her prediction for economic failure on the provision of less than one parking space per resident. She suggested that the $9 million should be saved for some other project.

John Floyd: Floyd pointed out that when the brownfield subcommittee met the previous week, Tom Crawford (the city’s chief financial officer) stated that the project is not viable without brownfield credits. If it’s not viable without a subsidy, said Floyd, it shouldn’t be built. Floyd said that if there’s something that needs to be cleaned up, that’s fine, otherwise that’s not a legitimate use of funds. During the public commentary reserved time at the beginning of the meeting, Floyd had drawn an analogy to a house on First Street he’d looked into buying. It had foundation problems. He said he didn’t ask for brownfield tax-incremented financing, but rather asked for a reduction in purchase price. Until the purchase price is bid down to zero, said Floyd, there’s no reason for the public to fund the cleanup.

Steve Bean: Bean suggested that the level of urgency was a useful way to look at the the issue. There’s urgency, he said, if there would be a public health threat if no cleanup took place. Bean stressed that the merits of the brownfield plan should be looked at separately from the merits of the building.

David Fisher: Fisher drew a comparison to the development at Zaragon Place, which required the sinking of pylons 67 feet deep. The greater mass of the 601 S. Forest project would require even deeper excavation anyway as a part of the construction process. On that basis, Fisher concluded that brownfield credits would amount to pork.

Tom Partridge: Partridge proposed that the most important criterion is equal access, saying that upper-income UM students think they’re entitled to live close to campus and entertainment. Partridge said that there are federal and state constitutional principles that speak against the awarding of brownfield credits, if the housing is not open and accessible on an equal basis to families and lower-income residents.

Yousef Rabhi: Rabhi said that his impression of student sentiment was that most students were against the development. He said he was not impressed with the case for brownfield credits. Other environmental concerns in Ann Arbor were more pressing problems, he said. For example, he said, the dioxane plume on the west side of town – that’s a legitimate thing to spend money on.

Council Deliberations on 601 S. Forest Brownfield Plan

Councilmember Joan Lowenstein led things off by saying that a lot of people don’t understand the difference between being nice to homeowners and rewarding investment in the community. It’s not just about tax money, she said. It brings in jobs and people, which is important given the community discussion about having denser development downtown. Lowenstein invited Matt Naud (the city’s environmental coordinator) to the podium to lay out some background on brownfield credits.

Naud stressed that Act 381 is voluntary on all sides. He said that in Michigan, the initial idea was to redevelop contaminated facilities, obsolete or blighted properties, but that it had been broadened to include the goal of overcoming hurdles to infill urban development. Related to that goal, Naud said, one could find brownfield credits applied to sanitary upgrades, footing drain disconnects, storm drain improvements and the like. The idea, said Naud, was to identify elements of a project that – if removed from the project – would result in a failed project. An example, he said would be the parking structure for the Lower Town project.

Naud said that Ann Arbor requires removal of contamination, as opposed to allowing containment of contaminants on site (institutional control).

On the issue of exactly what taxes are involved, Naud explained that brownfield credits allow collection on the increment from all taxing millages, which is currently 56.5 mils: 24 mils for schools and 32.5 for the city. Existing taxes continued to be collected by taxing entities, so there is no reduction in taxes. With respect to schools, Naud said, Proposition A requires all school taxes to go first to the state, which then pays schools on a per-student basis, and that level of payment is guaranteed by the state. The state has the right, through MEGA, to deny the award of brownfield credits by a local brownfield authority.

The security for the city is that brownfield credits are only paid as reimbursements for actual costs paid by the developer, and this is why developers can also ask for brownfield credits to cover interest – in the case of 601 S. Forest, they are not. In response to a later query by Councilmember Margie Teall, Naud would clarify that reimbursement was the rule not just for environmental cleanup, but also for other eligible activities like site preparation.

In response to a query from Councilmember Marcia Higgins about the seriousness of the contamination on the site, Naud said that when there is a contaminant level measured above state standards, then it’s worth investing new tax dollars to clean it up and to determine the full extent of the contamination.

Councilmember Sabra Briere asked Naud to review which previous projects with a brownfield plan had been built in Ann Arbor. Naud said that there had been three approved plans, but none have been built (Lowertown, 200 S. Ashley, William Street Station). Of those, only two are still moving forward – council previously pulled the plug on William Street Station, citing project mismanagement and missed deadlines by the developer.

Councilmember Stephen Kunselman, said that while the state will allow paving over and institutional controls of contamination, the developer is not doing that in this case – he’d be digging a hole and needed some place to dispose of the soil. So what Kunselman wanted to hear from Naud was the separation of costs for disposing of soil that’s contaminated versus disposing of soil that’s not contaminated. Naud stressed that whatever the costs involved were – $5 a cubic yard or $100 a cubic yard – they would only be paid as reimbursements.

Kunselman asked Mark Lloyd (the city’s chief of planning) to come to the podium to confirm that other buildings had been built in the downtown entailing the digging of deep holes, and that had required upgrading of water mains, sanitary sewers and the like, without requiring brownfield credits to support it. Lloyd confirmed that this was the case.

Greden made an effort correct the perception that awarding brownfield credits costs taxapayers money that could be used on something else. That’s false, he said. We’re just reimbursing developers with the new tax dollars. A key assumption, said Greden, was that without the brownfield credits, the developer would build the project anyway. Greden then responded to Briere’s earlier discussion with Naud about the stalling of existing projects with brownfield plans. He took this as evidence that there’s no guarantee of success for a project, even with the award of brownfield credits.

Greden drew an analogy between awarding brownfield credits and the decision some years ago to award Pfizer’s tax abatement. In the case of Pfizer, tax revenues went up, even with the abatement, he said. He continued, saying we don’t approve abatements for situations where tax revenues go down. Greden acknowledged that this project is not a mini-Pfizer, but that economic development goes beyond the creation of jobs. Greden said he was skeptical that the market for upscale student housing existed to the extent that developers believed it did, but concluded that it was not the council’s business to determine that.

Councilmember Mike Anglin called on his colleagues to remember the fundamentals and reminded everyone that we are in dire financial straits in Michigan. He pointed out that the city lost $54 million in its retirement fund last week (out of some $400 million). Echoing the same thoughts that John Floyd had conveyed during the public hearing, Anglin said that if there was serious contamination of the property, it would have been purchased at a depressed price. The fact that it was purchased for over $10 million, which he said was not a depressed price, led him to conclude it was not a site with serious contamination. The original intent of the brownfield legislation has morphed into a fraud, Anglin concluded.

Councilmember Chris Easthope said he understood that people think it’s a giveaway, but that what’s being given away is a portion of the increase. He said that by insisting on a higher standard for cleanup (removal as opposed to on-site containment) we are giving our community more protection in cleanup. On the question of whether the award of brownfield credits amounted to a subsidy, Easthope said that we already have city services in that area, our infrastructure exists there, and that’s where new development belongs. Easthope stressed that the normal tax base will exist for the city, and that taxpayers don’t stand to lose money on this project.

Kunselman said that comparing the three different brownfield plans on the evening’s agenda – the others being Maple Shoppes and MichiGinns – the 601 S. Forest plan was pure pork. If the brownfield plan were for affordable housing, he’d be more inclined to help it out. Kunselman said he had a problem helping to support luxury student housing,

Briere focused on the fact that other projects have somehow managed to get built without getting support to help make them more fiscally sound. She felt that the developer should not include storm sewers, water mains and foundation walls in the brownfield plan. Most developers, she said, pay for this themselves.

Teall based her intended support of the plan on a commitment to invest in and encourage increased residential development and to clean up contaminated sites as well as the city can.

Rapundalo said that there is a non-negotiable environmental problem and that there’s an obligation to mitigate it to the highest standard possible. He objected to calling the award of brownfield credits a subsidy and said it’s an incentive – otherwise there would not be a development there. Rapundalo said he was appalled that a number of his colleagues continued to make misstatements in the interest of delivering a great soundbite. He continued by saying he thought it bordered on being irresponsible in this day and age to not promote economic development with every possible tool to ensure that the community grows economically. He noted that the Oxbridge Neighborhood Association supported the current proposal.

Hieftje began by acknowledging the differences around the table, but said awarding brownfield credits is not akin to opening a checkbook and paying out money – it’s using future new taxes. He said that on a walk with Peter Calthorpe and Doug Kelbaugh through the area of South University, they recognized underutilization of the area. Hieftje stressed the same point that he had emphasized at the previous evening’s caucus: the developer would likely revert to the original 25-story proposal if brownfield credits were not approved.

Then, in a move for which many key players in the room were unprepared, Hieftje asked that an amendment be added to the resolution that would put a cap on the brownfield credits at $3.5 million, to be used only for environmental cleanup and not for site preparation.

Higgins and Greden pressed for details about what exactly the activities were that would be covered, with Higgins weighing in on behalf of including the asbestos remediation. Tom Crawford went to the podium to remind council that there was a revolving fund that should be factored into the mix. Greden then appealed to Matt Naud and Jeremy McCallion, brownfield planner for the Washtenaw County Brownfield Redevelopment Authority, to step forward to make sure that appropriate attention was paid to the county’s administration fees. As Naud and McCallion worked through the calculations with the various TIF tables, Hieftje hurried them along: “Would you please give us a number?”

Analytical Interlude

Given that the developer had made clear to all parties that if no requested brownfield credits were approved, he would revert to the original 25-story project, it’s a fair question to ask: so what impact would approval of a partial amount of those credits have on the developer’s plans?

Council Deliberations (continued)

To get the answer to that question, Teall called the developers to the podium. Ron Hughes was fairly clear: “We have spent time to make compromises. We can go back up to 25 stories.”

Hieftje forged ahead, making the case for the reduced award of brownfield credits, saying that if it were passed, it would put 601 S. Forest on a level playing field with other sites like Zaragon Place. Kunselman joined the mayor in making the case, raising the specter of practically every future development asking for brownfield credits, without a legitimate environmental basis. There’s bound to be a little asbestos in nearly every old building, he said. Kunselman added that LEED certification is not a public benefit – it’s a benefit to the developer.

Briere pointed out that the developer would be applying for additional state tax credits for its Michigan Business Tax above and beyond the brownfield credits.

On this point concerning the MBT credits, John Byle provided the view that based on his experience working on 40-50 different brownfield plans, the failure of “full local participation” put the MBT tax credit in jeopardy. Without approving the site preparation portion of the brownfield credits, local participation would not be seen as “full.” In a comment directed at Kunselman, Byle sought to dispel the notion that asbestos in a building was sufficient to qualify as a facility under brownfield legislation.

The vote on the amendment was as follows. Yes: Hieftje, Briere, Greden, Kunselman, Anglin. No: Lowenstein, Rapundalo, Teall, Higgins, Easthope. Absent: Suarez. The 5-5 tie resulted in a failed motion.

The vote on the the un-amended resolution for brownfield credits covering both environmental and site preparation activities in the amount of $9.4 million differed from the result on the amendment only by Greden’s vote. No: Hieftje, Briere, Kunselman, Anglin. Yes: Lowenstein, Rapundalo, Greden, Teall, Higgins, Easthope. Absent: Suarez.

And with that 6-4 vote, the brownfield credits were approved. The site plan was also approved.

What’s next: The county board of commissioners needs to set a public hearing on the brownfield plan, which they will likely do on Nov. 5. The date they will set will likely be Nov. 19. If the plan is approved by the board of commissioners, it will then be sent to the state.

Present: Mike Anglin, Sabra Briere, Chris Easthope, Leigh Greden, John Hieftje, Marcia Higgins, Stephen Kunselman, Joan Lowenstein, Stephen Rapundalo, Margie Teall.

Absent: Ron Suarez

Next council meeting: Thursday, Nov. 6 at 7 p.m. in council chambers, 2nd floor of the Guy C. Larcom, Jr. Municipal Building, 100 N. Fifth Ave.

601 S. Forest

By way of background, the $10 million corresponds to brownfield redevelopment credits, which city council can either approve or not at Monday evening’s meeting (Oct. 20). At an August 2008 caucus meeting, Marcia Higgins indicated that the city had communicated to the developer that only brownfield credits for pollution remediation, but not for site preparation, would be considered. At that time the developer’s proposal was to build a 25-story building on the site. In the last three weeks, the developer made what could be analyzed as a bid to receive the full range of brownfield credits allowed, by suggesting an alternate proposal involving a 14-story building. The developer met with residents Wednesday (Oct. 15) in council chambers to discuss the 14-story scenario after unveiling conceptual sketches at the council meeting the week before.

In remarks made at Sunday’s caucus, Ann Arbor Mayor John Hieftje said that if the $10 million in brownfield redevelopment credits were not approved, the developer had indicated he would not revise the originally planned 25-story building to the shorter height of 14-stories as discussed at the last city council meeting.

Stew Nelson led off residents’ comments by scrutinizing the merits of the case that 601 S. Forest was polluted enough to qualify as a brownfield. He joked that the terms “burnt amber field” or a “sepia field” could be invoked to describe better the situation on the site. Nelson questioned whether levels of contaminants that were “higher than generic drinking water” were sufficiently high to warrant the conclusion that this site was polluted – unless the plan included a proposal to sink wells for drinking water. A subsequent speaker traced the history of businesses in the area, emphasizing that sampling in the basement of the Bagel Shop – where a dry cleaner had been – revealed no contamination due to dry cleaning fluid. She said that where there was contamination found, it was only between 6 inches and 4 feet deep. A different resident expressed general skepticism of the classification of sites as “facilities,” saying that “if you spill some kerosene on the ground, it’s a facility.”

Nelson cited examples of successful brownfield redevelopments: (i) The Toyota Technical Center and (ii) the Globe Building in Detroit. He gave examples of the extensive pollution at both of the sites and the specific economic benefit (900 jobs in the case of the TTC) that redevelopment provided and contrasted these with the 601 S. Forest proposal. Councilmembers also heard from resident Steve Bean, who said that even if brownfield credits for cleaning up the pollution might be justified, that those involved with site preparation should not be awarded.

Hieftje cautioned that if the brownfield credits were not awarded, the developer would simply revert to the originally proposed 25-story building. Hieftje said that he was concerned residents would insist that council vote against the 25-story building, which would almost certainly lead to a lawsuit against the city. One resident suggested that $10 million would be better spent on a lawsuit than on subsidizing development counter to the city’s interests. However, Nelson and others felt the developer was bluffing: approve the 25-story building, they said – the developer can’t get financing for the project without the brownfield credits and will simply walk away without building anything.

412 E. Huron

A resolution currently on the agenda for council’s Monday evening meeting calls for an appointment of a study committee to examine the possibility of removing 416 412 E. Huron from the Old Fourth Ward Historic District. John Hieftje described how Kurt Berggren, who owns a unit at the property, approached him and Joan Lowenstein with an inquiry. Lowenstein had forwarded the matter to Kristine Kidorf, historic preservation consultant for the city, and that the language of the resulting resolution had come from Kidorf.

Residents Ray Detter and Chris Crockett weighed in giving the history of the formation of the Old Fourth Ward and of the particular property in question. Detter emphasized that Huron Street from the Firestone station eastward to State was a character district in the sense of the A2D2 guidelines and that it was distinctive – even if one of Ann Arbor’s own city planners was blind to the nuances of that distinction. At the mention of the Firestone station, Hieftje took occasion to express his view that it was “an eyesore.” Crockett talked about the psychological damage done to the community by disconnecting it from its history. When she concluded, her remarks drew applause.

During Detter and Crockett’s comments, Lowenstein looked up the recently revised ordinance making the standards across Ann Arbor’s various historic districts uniform, and concluded that she didn’t think a provision to excise boundary properties from districts had survived the ordinances’ revision. She said that she would ask Kidorf to review the matter and possibly strike the item from the agenda.

Human Rights Commission request

Councilmembers heard from Leslie Stambaugh and Victor Turner, chair and co-chair respectively of the Ann Arbor Human Rights Commission. After summarizing some of the HRC’s work (education on race, monitoring of hiring procedures, AATA restroom policies), Stambaugh urged council to pass a resolution supporting House Bill 6341 and Senate Bill 1455, which clarifies and strengthens a law on hate crimes. Stambaugh noted that Michigan is ranked third out of 50 states in the number of hate crimes committed, and that in 2005, 14 hate crimes were tallied in Ann Arbor.

Turner asked councilmembers to consider the language in the human rights ordinance 112, which references a “director” – which seems ambiguous in light of the reorganization of the department. Lowenstein said that the online version of the ordinance might not reflect the revision undertaken to change the language to “Human Resources Director.”

Ann Street one-way configuration

A resolution on the agenda for council’s Monday meeting calls for the conversion of Ann Street between 5th Avenue and Division Street to one-way east bound.

Councilmembers at caucus heard from resident Eppie Potts, who asked them to reflect on whether police cars would need access to Ann Street from Division and how much the circling of the block that would result from residents who typically now use Ann Street westbound along that block. Further, she expressed skepticism that the number of parking spaces gained from the angled street parking to be installed along Ann Street would adequately address the overall loss of public parking at the Larcom building when the police-courts renovation is completed.

The angled parking spaces along the one-way configuration are not incorrectly angled. Cars are meant to back into the spaces.

Councilmember Sabra Briere said that there would be 10 fewer spaces, joking that the reduction was just enough to keep the 10 council members from being able to park.

Detailed discussion of the one-way Ann Street proposal, which includes a higher resolution of the image above, can be found in the documents: Back-in Angle Parking and Bike Lanes [.pdf file] and Ann Street One-way Conceptual Plan [.pdf file].

Fluoride

Steve Bean noted that council’s agenda contained an item approving $70,000 for the purchase of hydrofluorosilicic acid for water treatment and asked why the cost had risen so dramatically from $12,000 when the last purchase had been made. Bean also asked that council use the opportunity to consider the moratorium on adding fluoride to drinking water that is recommended by the EPA’s unions of scientists in light of possible links to increased bone cancer rates and uncertainly about overall health effects.

Present: Mike Anglin, Sabra Briere, John Hieftje, Joan Lowenstein, Margie Teall.

Next caucus: Sunday, Nov. 2 at 7 p.m. in council chambers, 2nd floor of the Guy C. Larcom, Jr. Municipal Building, 100 N. Fifth Ave

To briefly summarize the outcome of the meeting, all three projects are being moved forward for consideration by city council at its Oct. 20 meeting, after which they’ll be reviewed by the county board of commissioners. The expected timeline includes final brownfield plans that are in place by Nov. 5, when the board of commissioners meets and can set a date for a public hearing on the plans. That hearing is expected to be on Nov. 19. The brownfield plan for the 601 S. Forest site will be made available on the city of Ann Arbor’s brownfield website as soon as it’s available, (a couple of days) as well as a part of the council meeting agenda packet for its Oct. 20 meeting.

"If you borrow chairs from desk/offices, PLEASE ..." We figure the rest was smudged by people standing against the white board ... because they had nowhere to sit.

Washtenaw County’s brownfield website provides a useful glossary of brownfield terms [.pdf file]

By the time the meeting started, a few more residents had trickled in to join the three city council members who constitute the brownfield subcommittee: Marcia Higgins, Mike Anglin, and Leigh Greden. Also at the table were Matt Naud (city environmental coordinator), Jeremy McCallion (brownfield planner for the county), Tom Crawford (city CFO), Mark Lloyd (city planning head), and Kevin McDonald (assistant city attorney), plus the developer’s team for the 601 S. Forest project, plus some people The Chronicle could not immediately identify.

It was necessary to borrow chairs from adjoining offices and cubicles to seat everyone. The smudged note scrawled on the meeting room’s white board admonishes borrowers of chairs to return them to where they were found. It probably serves as some kind of metaphor for the way brownfield financing is supposed to work: if you take money in the form of a brownfield credit, it’s supposed to be ultimately returned to taxpayers in some form or other – perhaps not in the form of a chair.

Marcia Higgins got things rolling by advising the assembled interested parties that there would be no opportunity for public speaking or questions – because the brownfield subcommittee had no decision-making authority and there would be a public hearing on the matters it was considering at the Oct. 20 council meeting. She announced that the 610 S. Forest project would be considered first, in order to accommodate anyone who was interested only in that project.

601 S. Forest

The brownfield redevelopment plan can be divided into two categories of activities, which total $9.4 million: (i) $3.5 million for environmental remediation of perchloroethylene, a chemical used in dry cleaning, and (ii) $5.9 million for public infrastructure improvements associated with site preparation – demolition of existing buildings.

The brownfield credits are paid out of the increment between the tax revenue currently generated by the properties and the future (increased) taxes paid on the properties due to the improvements undertaken through development. In the case of the 601 S. Forest plan, funding of the brownfield credits through tax-increment financing (TIF) requires sorting out the already-existing TIF districts: the Downtown Development authority (DDA) and a SmartZone administered by the Local Development Finance Authority (LDFA). In response to Higgins, who asked for specifics on how that would work, Tom Crawford characterized the challenge as a normal part of the assessor’s job.

Crawford focused his questions for Jeremy McCallion on the question of the 15% contingency that is built in to the plan. The idea behind the contingency is that when it comes to environmental cleanup, there’s a certain potential for unpredictability, so the contingency is there to account for unforeseen costs that can be covered without requiring a developer to go through an additional application process. It was stressed throughout, however, that all of the brownfield credits are paid only for work actually completed, and costs actually incurred.

Crawford pressed for details about whether there was flexibility at the line-item level with respect to contingencies. That is, if there’s a built-in contingency for every line item, why does there need to be an overall lump sum as a contingency as well? McCallion alluded to a state requirement that a 15% overall contingency be included. Crawford then changed tack, suggesting that if there’s a required 15% overall contingency, then the contingencies in each line item could then be eliminated. The developer team agreed to make those necessary revisions to the plan, which would reduce the maximum amount of brownfield credits by $1.2 million.

In response to Leigh Greden’s question about the broader financial implications for the project if the requested brownfield credits were not given, Crawford said that denial of brownfield credits would have a “significant impact” on it to the point of jeopardizing the success of the project.

Michigan Inn

McCallion summarized the history of the property located on Jackson Road west of I-94 as a public safety hazard dating back 15-20 years. The current plan for brownfield credits reflects a revision from a previous version dating back to April-May of 2008 in a variety of details: (i) the plan makes the case that the property is a public safety hazard, (ii) the plan includes a full 15% contingency, (iii) the calculations for tax capture include interest previously not included, and (iv) capture of state school taxes are included to lessen the impact on other local entities.

Higgins expressed concern that the city has imposed a requirement for demolition by Dec. 1, but the proposed timeline for appproval of brownfield credits seems to be impossible to bring to an end before that date. City council approval at its Oct. 20 meeting would lead to the setting of a public hearing by the county board of commissioners on Nov. 5, with the public hearing held at its Nov. 19 meeting, which would lead to a board of commissioners final approval at its Dec. 3 meeting, with the Michigan Economic Growth Authority (MEGA) projected to give its final approval on Dec. 19. In expressing her hope that the county board of commissioners would find a way to accelerate its process, Higgins said, “The last time I checked, their constituents are still our constituents.”

Maple Shoppes

The site is located on the northeast corner of Maple and Dexter-Ann Arbor Roads. Leigh Greden sought clarity over whether Aldi’s desire to have a sign presence on Maple Road is holding up the project. Answer: it’s not. McCallion floated the idea of departing from current practice of doing the brownfield redevelopment authority capture at the end of the project life and instead “front-end loading” some of it for this project. Higgins said that this would amount to policy change without having had the requisite policy discussion.

Tom Partridge. Partridge described himself as a “proud and determined Democrat,” stressing the importance of electing Democrats in general and specifically Mark Schauer to replace Tim Wahlberg in the 7th Congressional District. He said that he is running as a write-candidate for state representative in the 52nd District because he’s not convinced that any of the other candidates, including the incumbent Democrat, are running on truly progressive platforms.

Jim Mogensen. Mogensen reiterated his remarks made at the previous night’s caucus about student occupancy at The Courtyards. The situation is reflected in a document that was included in the “communications to council” section of the agenda packet, which is a letter from the University of Michigan to the developer.

The Courtyards is a residential development at Plymouth and Broadway, which required an easement through university property for access. The condition the university placed on the granting of the easement was that 70% of the residents must at all times be UM students. Mogensen pointed out that if the percentage of students fell below 70%, The Courtyards could not legally discriminate against non-students in order to meet the 70% threshold. But if The Courtyards did not discriminate against non-students in order to meet the 70% threshold, they risked losing the easement. Without the easement, there was not the necessary access into and out of the site to ensure public safety. Said Mogensen, the university is effectively using its considerable economic and political clout to have other parties violate our city’s non-discrimination ordinances on its behalf.

Mogensen stressed that the university’s requirement on the developer’s property puts it at odds with the city’s non-discrimination ordinance contained in Chapter 112:

9:155. Other prohibited practices.
…
(5) No person shall conspire with, assist, coerce or request another person to discriminate in any manner prohibited by this chapter.

Mogensen concluded: “Laws apply when it is convenient for the university.”

Henry Herskovitz. Herskovitz noted the passing last month of the 5-year milestone for vigils held by demonstrators outside the Beth Israel synagogue. He characterized the invasion of Iraq as not a war for oil, but rather a war for Israel that was prosecuted at the urging of supporters of Israel. Herksovitz described the origin of the vigils as resulting from the travels in 2002 by some members of the group to Palestine, where they observed “apartheid conditions” and their return to find that their witness was not welcomed by the Jewish community in Ann Arbor. Herskovitz concluded by saying that the ratio of dead Palestineans to dead Israelis is 48 to 1.

Michael Benson. Benson, treasurer of the Michigan Student assembly, reported a successful homecoming with the theme, “Go Blue, Live Green,” which included a voter registration drive that culminated in the registration of over 350 new voters on the last day it was possible, thanking the city clerk’s office for the use of drop boxes. Benson thanked council for last year’s street closure for homecoming as well as the 650 reusable water bottles this year. Benson then presented T-shirts in an assortment of sizes as well as pens as a token of appreciation.

John Floyd. Floyd, who is a Republican candidate for city council’s Ward 5 seat, outlined the effect of new development on tax revenue, contrasting the impact on revenue of a homeowner putting an addition on their home in a residential area, with the impact of any improvement to property inside the district of the Downtown Development Authority. While all of the the additional tax revenue generated from the increased value of the improved home accrues to the general fund of the city, the same increment in tax revenue for an improvement inside the downtown district is captured by the DDA, instead of going to the general fund. On a scenario where downtown improvements are undertaken to increase downtown population – by 5,000 or 10,000 or 15,000, or 20,000 additional residents – who, asked Floyd, pays for the additional city services that all those people need (police, street repair, solid waste, elections, etc.)? Floyd’s answer: all the people who don’t live in downtown.

Agenda Items

601 S. Forest Site Plan

Developer Dan Ketelaar presented at the start of the meeting a revised site plan, in conceptual form, that is reduced from the 25-story proposal previously submitted.

Conceptual drawings of the revision depict a reduced frontage along South University and an overall reduction in height to 14 stories (12 stories above a base of two stories). In terms of feet above grade, the change reflects a reduction from 263 feet 4 inches to 162 feet 8 inches. In what appeared to be an intended laugh line, Ketelaar said he assumed that with the height reduction all those who previously opposed the plan would jump on board and support it fully. There was no audible laughter. At the podium, Ketelaar offered no further details, but made himself available for any questions from councilmembers. Councilmembers had no questions for Ketelaar. Conceptual drawings of the revisions are available here.

The public hearing on 601 S. Forest will be continued on Oct. 20. Those who spoke at the hearing on Oct. 6 will not be able to speak again at the continuation. They included the following:

Karen Sidney. Sidney said that while she doesn’t live near the 601 S. Forest project, she judged her Ward 5 councilmembers by their performance on all projects, and she criticized Ward 5 councilmember Chris Easthope for helping push through the zoning change (inclusion of the parcel in a downtown zone) that allowed the parcel to be developed under the floor-area ratios that had resulted in a 25-story “matter of right” project. Sidney’s main focus, however, was her objection to funding of the project through brownfield credits, which she characterized as a way for developers to get taxpayers to provide the risk capital, which in this case she projected could be around $9-10 million.

Stewart Nelson. Nelson echoed Sidney’s objections to funding the project through brownfield credits, after first expressing his appreciation to councilmember Stephen Rapundalo for helping achieve a good compromise, as it seemed to set aside the threat of litigation, and he characterized the reduced project as a “handsome building.” Nelson expressed his skepticism that the reduced version of the project was motivated by taking to heart the feedback from the community or “civic pride,” and suggested it had more to do with current financial conditions. Nelson stressed that brownfield credits are designed to give incentive to developers to develop blighted and polluted parcels instead of building out in a cornfield somewhere, and that it was appropriate to grant such credits when the parcel would not otherwise be attractive to any developer – which he did not believe was the case here.

Brian Russell. Russell, who is listed as a “Campus Legend” in the UM online directory, stated that he had lived off campus on State Street for three years. He noted the recent zoning change to the Burns Park area as reflective of community sentiment against student encroachment into neighborhoods and said that the 601 S. Forest project would mitigate against such encroachment by providing an alternative to the substandard housing alternatives near single-family neighborhoods. Compared to other Big Ten institutions, Russell characterized some UM off-campus housing options as “slum housing.” He stated that the improvement of student housing is the responsibility of both city council and student government, and suggested that current student government might not necessarily be mindful of the support among many students for the project.

Jim Mogensen. Mogensen’s theme was process – the process that a project typically goes through, from a meeting between developers and planning staff, to planning commission, to council, to first reading and second reading. Noting that with the 601 S. Forest project a substantial revision had been introduced, Mogensen framed the current challenge as how “to integrate it back into the process.” While conceding that starting from the very beginning was probably not necessary, he stressed that citizens have a right to have the process be an orderly one, so that everyone knows what is going on.

Arvind Sohoni. Sohoni, vice president of the University of Michigan Student Assembly, first apologized for being underdressed after attending the Bruce Springsteen concert in Ypsilanti just prior. Sohoni said that, contrary to the statement by Brian Russell, an earlier speaker, the MSA was actively engaged on the 601 S. Forest issue. He related how the MSA had devoted an entire meeting to the project (consulting with a member of city council) even while planning for homecoming weekend. Sohoni said he appreciated compromise on both sides that resulted in the revised proposal and said it reflected solid stewardship of the community. Sohoni concluded by stressing to members of council that students are their constituents as well, and that while some conceptions of students might be true – they’re transient and fairly lazy – it’s not true that they just don’t care. They simply don’t necessarily know the avenues of conveying their concerns – which he described as part of his job to address.

Result: Postponed to Oct. 20 meeting with public hearing to be continued.

African American Cultural and Historical Museum PUD Rezoning

At the public hearing, Tom Partridge commended the planning commission for its role in pushing the proposal for the museum forward, but called upon the commission and council to explore the rezoning of properties adjacent to it, and the requirement that those parcels, as well as other parcels across the city, provide affordable housing. Architect Dick Mitchell, of Mitchell & Mouat Architects, made himself and other members of the design team, plus representatives of the African American Cultural and Historical Museum, available for any questions.

Result: The PUD rezoning was approved unanimously.

Ordinance on Private Street Standards and Accessibility

During the public hearing, Mark Davis, speaking on behalf of the Arbor Hills Condominium Association, expressed concern that the new regulations on how lots can be divided and the required dimensions of private streets that give access to the new lots would cause established communities to be non-conforming. Davis asked how an existing community within the city would be protected.

Councilmember Rapundalo asked for explanation regarding Davis’ concern from the city attorney’s office and it was clarified that the provisions governing Arbor Hills in particular would be those associated with its status as a PUD. In general, existing private streets are grandfathered in, but if someone were to undertake lot divisions on an existing private street, the lot divisions would have to meet the new code.

After clarifications by councilmembers Sabra Briere and Stephen Kunselman, Kunselman characterized it as a good ordinance that had been a long time coming and that it was important for the creation of orderly development of property divisions.

Result: Unanimously approved.

Liquor License for the Blue Tractor

Councilmember Rapundalo asked that the request for a liquor license and dance permit be separated out from the consent agenda and when it was so separated, then asked for a postponement on the grounds that it had just landed on the doorstep of the liquor committee. He also described how every application was being given appropriate scrutiny in light of the new redevelopment licenses that have been added to the “portfolio” to make sure everything is evaluated in a uniform manner. The liquor committee is leading up to a new component in its work to perform annual reviews that align with the state-mandated annual review.

Result: Postponed.

Ordinance Prohibiting Plastic Carry Out Bags

After a postponement from the July 21 agenda, Rapundalo asked for a further postponement to the first meeting in March 2009 in order to give adequate opportunity for outreach to the retail community. Rapundalo said he hoped for an informal, ad hoc kind of outreach that could solicit the desired input rather than formalizing it as a taskforce.

Result: Postponed

Fire Protection Grant Program

Councilmember Leigh Greden explained that the Fire Protection Grant Program is the means by which the state of Michigan compensates municipalities for the fire protection they’re required to provide to state institutions in their midst. Examples of such institutions are state parks, prisons, and universities like UM. Historically, the state has never funded the program at 100%. The resolution before council called on the state to provide full compensation to municipalities.

Result: Passed unanimously.

Purchase of Ice Control Salt

This item, which authorized purchase of salt from North American Salt Company ($211,800) and Morton International, Inc. ($155,200), resulted in more discussion among councilmembers than might have been expected. Councilmember Greden invited Sue McCormick to the podium to explain that Ann Arbor is avoiding what other cities in Michigan have faced: running out of salt, and paying exorbitant prices. Councilmember Easthope, who is leaving council in November after eight years of service, said that he would miss the angry phone calls about lack of plowing. He suggested that the 4-inch rule – where streets are only plowed if snow accumulates more than 4 inches – might not be the best thing. McCormick said the problem was not with the rule, but that it required looking at the long-range forecast. A single snowfall with a warming trend behind it is one thing, but when you have a few inches and choose not to plow, it gets pounded down to ice, doesn’t thaw and the next snowfall collects on that – you can’t go back and change your mind and plow it off.

Result: Passed unanimously.

Cable Commission and Zoning Board of Appeals Appointments

Anthony Ramirez, who is replacing R. Thomas Bray, was appointed to the Cable Communications Commission.

Jean Carlberg, who is replacing Ron Emaus, was appointed to the Zoning Board of Appeals. Carlberg currently serves on the planning commission and formerly served on city council.

City Place PUD Rezoning

This item, concerning a project that developer Alex de Parry is bringing forward to city council despite a 2-6 planning commission vote against it, was stricken from the agenda. Newcombe Clark, who was originally signed up to address the project during public commentary, did not appear.

Communications from Council

Easthope reported that the free breath tests offered by the Arrive Alive Foundation on Main Street after the Michigan-Wisconsin football game resulted in 300-400 breath tests. Easthope reported that some people changed their mind about driving home as a result of taking the test.

Rapundalo expressed his thanks to Sgt. Fox of the Ann Arbor Police Department for his time in allowing him to ride along on “party patrol” on a couple of recent Saturday evenings and said that the AAPD was doing a magnificent job in making sure our young folks are going about their evenings in a respectful and mature way.

Margie Teall alerted council colleagues to the resolution at the upcoming Oct. 20 council meeting to appoint Valerie Strassberg in a one-step process to serve on the environmental commission.

Present: Mike Anglin, Sabra Briere, Chris Easthope, Leigh Greden, John Hieftje, Marcia Higgins, Stephen Kunselman, Joan Lowenstein, Stephen Rapundalo, Ron Suarez, Margie Teall.

Absent: None.

Next meeting: Monday, Oct. 20 at 7 p.m. in council chambers, 2nd floor of the Guy C. Larcom, Jr. Municipal Building, 100 N. Fifth Ave.

601 S. Forest

Councilmember Stephen Rapundalo first gave residents an update on discussions that he and Councilmember Joan Lowenstein had been having with the project developers, which dated back to August of this year. As of late Friday (Oct. 3) evening, Rapundalo’s understanding is that the developer intends to alter significantly the proposal and will be afforded time at the beginning of Monday’s (Oct. 6) public hearing during the city council meeting to present the revised proposal. Some key features of the revised proposal:

• The parcel will be sliced in half, with a phased development, the first phase of which would have a footprint identical to the current proposal – an L-shaped building.
• Though having the same footprint, the height of the building would be 12 stories above a 2-story base for a total of 14 stories. The number of beds would be in the 500-600 range, though this number has not been fully modeled.
• Parking spaces would remain, with something around 90 spots and two levels underground.
• The project would remain a “by right” development.
• The second phase of the development on the second parcel (if any) would start “from scratch” with the planning commission and be subject to full site plan review.

The plan for the current phase is to continue the public hearing to the Oct. 20 council meeting, at which time city council could decide whether to approve the site plan. Rapundalo cited the city’s charter as granting authority to city council to approve site plan revisions and said that a preliminary communication from the city attorney’s office indicated that it is not necessary to put the revisions before the planning commission. However, Rapundalo said, all the revisions would require sign-off from the relevant planning staff.

Councilmember Sabra Briere got clarification from Councilmember Marcia Higgins on the question of whether the zoning board of appeals would need to be re-engaged, given that a variance had been granted for the project. Higgins explained that a variance was associated with land, not a project, and therefore whatever variance had been granted would still apply.

Citizens expressed their appreciation for the work of Rapundalo and Lowenstein in carrying forward the discussions (Rapundalo stressed that these were not “negotiations” because they were in no position to offer any kind of quid pro quo – they had nothing to offer). But citizens had many remaining concerns. Among them:

• Given that planning staff had recently rejected a request for administrative review of revisions to the Metro 202 project, thus requiring full review by planning commission, why was the planning commission being skipped here? Response: Metro 202 is not necessarily a good standard of comparison, because it had already been approved, and was a planned project (not a “by right” development). In any case, the initial communication from the city attorney’s office was not the final verdict.
• What opportunities beyond the public hearing on Oct. 6, to be continued on Oct. 20, would be afforded the public to engage the developer in discussion about the revisions to the project? Response: Councilmember Leigh Greden is setting up a meeting with interested neighbors and the developer has expressed a willingness to be present and available to answer questions.
• What is the status of the brownfield request, and was this used in the discussions as leverage? Response: The brownfield committee will be meeting on Oct. 13 to consider whatever request the developer makes, but at this time it’s unknown what that specific request will be. The brownfield request will be considered independently of the site plan.
• If the developer were to pursue a second project on the second parcel that is a “mirror image” to the current phase, it would be even worse than a 25-story building. So, what is the potential for development on the second parcel? Response: It’s impossible to say except that it will be subject to whatever zoning is in place at the time.

The developer’s presentation at council should provide more detail on the revised site plan. And more clarity on the procedural sequence should also be available.

Fourth Avenue Alley

A resident of a six-condo downtown building (with residential units having their sole entrances off a walkway/alley with an opening onto Fourth Avenue) weighed in on two issues. The first was the new installation by the future Blue Tractor restaurant of an HVAC unit on a raised platform in the alley. It had degraded quality of life on account of its noise as well as its visual impact. Second, there is an intent to provide dancing at the venue, which the resident feels will exacerbate the public sanitation issue associated with vomiting, urinating and defecating already attested in the alley on a regular basis. The lack of a water faucet in the alley limits clean-up efforts to throwing a bucket full hot sudsy water on the problem.

Councilmember Rapundalo noted that the Blue Tractor’s application for a liquor permit is coming before the liquor commitee, on which he serves, and asked the resident to state their concerns in writing and send them to the city clerk with attention to the liquor committee.

Left are residential entrances. Right are the newly installed HVAC units. According to the speaker, the DDA had made the "alley" more like a "walkway" by installing cobbled strips into the pavement (one of which is visible just before the blurred out vehicle).

The Courtyards Easement

Jim Mogensen, a regular commenter at public meetings who often notices the connections between apparently separate issues, called council’s attention to a recent communication from the University of Michigan to the owner of a local development – a communication which has now been filed with the city clerk. The Courtyards is a residential development at Plymouth and Broadway, which required an easement through university property for access. The condition the university placed on the granting of the easement was that 70% of the residents must at all times be UM students. Mogensen pointed out that if the percentage of students fell below 70%, the Courtyards could not legally discriminate against non-students in order to meet the 70% threshold. But if the Courtyards did not discriminate against non-students in order to meet the 70% threshold, they risked losing the easement. Without the easement, there was not the necessary access into and out of the site to ensure public safety. Said Mogensen, the university is effectively using its considerable economic and political clout to have other parties violate our city’s non-discrimination ordinances on its behalf.

What’s the connection to anything else? The connection is to 42 North, 133 Hill, 601 S. Forest, among other developments targeting a student rental market. Mogensen contends that planning must necessarily include a provision for the maximum occupancy and the associated infrastructure demands, not just the hoped-for demands associated with student occupancy – because we cannot legally require that only students live in a project.

Parks Ballot Language and Fiscal Concerns

Stew Nelson asked council to confirm that the ballot language printed on the ballots matched the resolution passed by council, which is intended to place restrictions on the sale of city park land. Nelson also called on council to start examining every expense in light of the current economic climate. He noted that municipal bond sales had dramatically slowed and that it’s not going to be business as usual with respect to large capital expenditures.

Present: Mike Anglin, Sabra Briere, John Hieftje, Marcia Higgins, Joan Lowenstein, Stephen Rapundalo, Ron Suarez.

Next caucus: Sunday, Oct. 19 at 7 p.m. in council chambers, 2nd floor of the Guy C. Larcom, Jr. Municipal Building, 100 N. Fifth Ave