From left: Julie Grand (Ward 3 challenger), Stephen Kunselman (Ward 3 incumbent), Jack Eaton (Ward 4 challenger), Mike Anglin (Ward 5 incumbent), Kirk Westphal (Ward 2 candidate), and Sabra Briere (Ward 1 incumbent).

In the Aug. 6 Democratic primary, only two wards offer contested races. In Ward 3, Democratic voters will choose between incumbent Stephen Kunselman and Julie Grand. Ward 4 voters will have a choice between incumbent Marcia Higgins and Jack Eaton. Higgins was reported to have been sick and was unable to attend.

The format of the event eventually allowed other candidates who are unopposed in the Democratic primary to participate: Mike Anglin (Ward 5 incumbent), Sabra Briere (Ward 1 incumbent), and Kirk Westphal, who’s challenging incumbent Jane Lumm in Ward 2. Lumm, who was elected to the council as an independent, was in the audience at the forum but didn’t participate. The event was held at the Ann Arbor Community Center on North Main Street. The Chronicle’s coverage is presented in a multiple-part series, based on common threads that formed directly in response to questions posed to the candidates, or that cut across multiple responses.

More than one question posed to candidates was explicitly designed to elicit views on downtown Ann Arbor. Taken as a group, the questions prompted responses that formed several discrete subtopics related to land use and planning: planning in general; planning specifically for city-owned properties; and planning for a hotel/conference center.

Another general theme covered the role of the downtown in the life of the city of Ann Arbor, with additional subtopics that included: the appropriate balance of investment between downtown and non-downtown neighborhoods; who should and does benefit from the downtown; and the role of the Ann Arbor Downtown Development Authority.

This report includes candidate responses on these issues.

Part 1 of this series focused on the candidates’ concept of and connection to Ann Arbor, while Part 2 looked at their personal styles of engagement and views of how the council interacts. Part 3 reported on the theme of connections, including physical connections like transportation, as well as how people are connected to local government. Chronicle election coverage is tagged with “2013 primary election.”

Planning

Several of the candidates’ remarks related to themes that could be grouped together under the notion of planning.

Planning: Zoning, Density

Julie Grand noted that people have concerns about changes in the downtown landscape. And the 413 E. Huron development really seems to be the building that represents those concerns the best, she said – due to its proximity to a residential neighborhood. She attributed part of the concern to a sense that this change has been very rapid, and “very jarring.” “We wanted density in the downtown,” she said, but it wasn’t anticipated that it would involve adding mostly students in the downtown. “Those who supported density didn’t think it was going to be blocky buildings and students,” she said. Rather, they thought density was going to bring boomers and young professionals – and they were going to live in architecturally interesting buildings.

Grand indicated she was pleased that the city’s planning commission is now reviewing the D1-zoned properties – especially those parcels that are close to residential neighborhoods. [D1 is the zoning that allows for the highest density development.] She remains in favor of density in the downtown, and feels that there are now some opportunities, especially with the city-owned properties downtown, to “get it right” and to build buildings that are really consistent with what the community wants.

Jack Eaton thought the 413 E. Huron project needs to be considered in the broader perspective of the A2D2 (Ann Arbor Discovering Downtown) zoning. Radical, broad changes to downtown zoning were made, he contended, that didn’t comply with the city’s master plan. He agreed with the idea of creating an area in the core of the city that is dense. But the master plan calls for buffers – between that density and the nearby neighborhoods. And on that, he continued, “we failed miserably.” He had opposed the A2D2 plan at the time for that reason. When the 413 E. Huron site plan came forward, there was a proposal to impose a moratorium so that the city could go back and make the zoning compliant with the master plan requirement for buffer zones.

Eaton characterized his opponent in the Ward 4 race, Marcia Higgins, as one of the driving forces behind the A2D2 zoning that was flawed with respect to its incorporation of buffers, he said.

Stephen Kunselman said the 413 E. Huron project had resulted in a distrust of the whole planning process. He’d participated in the Calthorpe process back in 2004 when mayor John Hieftje appointed him to the planning commission, he said. He was very supportive of downtown density and efforts to bring residential living downtown. But he said it’s been a little discouraging that recent projects had all been geared toward student housing. He added, “You know, we’ll see how it plays out.” Kunselman called for cleaning up the periphery so that the example of 413 E. Huron is not repeated.

Mike Anglin said the hardest topic the council has addressed has been development. Every time a big, contentious development has come before the council, it’s taken an “inordinate amount of time,” Anglin said. He indicated some frustration about the fact that planning staff and the city attorney’s office should be directing the council on zoning issues. He characterized the long A2D2 zoning process as not being very effective. He observed that the council obviously was not unanimous about the 413 E. Huron building. [The project had been approved on a 6-5 vote at the council's May 13, 2013 session.]

Planning: Hotel/Conference Center

Jack Eaton stated that he’s not opposed to a downtown hotel or a downtown conference center. But he’s opposed to the city subsidizing either of those kinds of projects. He thought if there’s a market for a downtown hotel, a hotel company will come in and build one. As for a downtown conference center, he expressed confidence that there is no market for one. And any community that has engaged in subsidizing a downtown conference center has found itself throwing money into a hole for decades, Eaton contended: “It just doesn’t work.”

The Valiant Partners, who had proposed a downtown hotel and conference center, expected the city to pay for building it and expected the city to operate it forever, Eaton contended. He said we shouldn’t spend our tax money in that fashion. If there’s a market for those things, we should let it happen, he allowed. Certainly in the D1 zoning district downtown, somebody can come downtown and buy a parcel and do those things. But the city government should not involve itself financially in those opportunities, he concluded.

Julie Grand agreed that if there is going to be a downtown hotel and convention center, then the city should not pay for it. When the city had solicited proposals, it had been “a learning process,” she said. But she felt the city council had heard loud and clear from residents that they did not want to pay for a downtown conference center. If there is such a center, and it’s successful, then that’s great, she said. Grand was definitely not opposed to a new hotel space being built downtown. She’d heard over and over again that there’s a lack of hotel space downtown. A downtown hotel could bring more people to the downtown and help with positive activation of downtown space.

Grand said she’s interested in the question: How do we make our downtown spaces more active, safer, and in line with the community needs? If there is a hotel and conference center that someone wants to build, then she thought that needed to be considered carefully – adding that the city should not be using tax dollars to pay for it.

Stephen Kunselman said it’s great to know that other candidates at the forum agreed that public subsidies shouldn’t be used to promote a downtown conference center or hotel. He counted himself in the same camp. He pointed out that during all the discussions of the last couple of years, two new hotels have been built out at Briarwood. That showed that the private sector knows when it needs to build a hotel and knows where to put it. Briarwood had been chosen because that’s where parking is available, he said, and it provides easy access to the expressways.

“We can pontificate all we want about the need for a hotel downtown, but those of us who grew up in Ann Arbor remember the story of the Ann Arbor Inn which sat empty for many, many years,” Kunselman cautioned. If there was truly a market for it, somebody else would have taken that risk. And obviously they are not choosing to do so at this time, he concluded.

Planning: City-Owned Properties

On the subject of balancing development, Julie Grand questioned the idea that people want development throughout the city. That’s not necessarily what she’s hearing out in the neighborhoods, she said. There are some very dense neighborhoods in Ward 3, where she lives. Residents don’t want dense development – they feel it’s already dense enough as it is, she said. Grand noted that it’s important to build density in those places where people want density. And one of the ways that can be done – an approach over which the city council has a lot of control – is by using the downtown city-owned properties as an example.

By way of background, five of those downtown city-owned properties were the subject of the Ann Arbor DDA’s Connecting William Street project: (1) the Kline parking lot (on the east side of Ashley, north of William), (2) the parking lot next to Palio restaurant (northeast corner of Main & William), (3) the ground floor of the Fourth & William parking structure, (4) the former YMCA lot (on William between Fourth and Fifth), which is now a surface parking lot, and (5) the top of the Library Lane underground parking garage on South Fifth, north of the downtown library.

Grand described herself as a big believer in education through success, saying, “success breeds success.” If the city wants to show a good example of successful development – one that’s consistent with the values of this community – then the city-owned properties are a place where the city has to take charge and make sure that happens. If we want a building that’s not boxy, she said, that might mean we have to be “a little forward thinking as leaders in this community and not just necessarily accept the highest bid for a city property.” But Grand cautioned that it’s important to make sure that the debt is covered.

Commenting on the redevelopment of city-owned properties downtown, Stephen Kunselman said, “we have a horrible, horrible track record of participating in the development arena.” The former Y project [an allusion to William Street Station] was a good example of failure by a local government that came about because it was trying to do something it wasn’t capable of doing, he said. A local government is supposed to provide for public safety, health and welfare. When you engage in speculative development, by partnering with a developer, all they want to do is “suck on that public dollar,” Kunselman said. That’s not going to work.

Kunselman gave the previously proposed Lower Town development as one where the city started participating in that project – but now it’s going to be a blight on the community for years, he said, because it is so over-leveraged in debt that the owners aren’t going to be able to sell it. He ventured that nothing would happen to that property unless the University of Michigan bought the land, which he hoped would not happen. He said the city needs to do everything it can to prevent the university from purchasing it, but he wasn’t sure that was possible.

“We need to step back and understand what the limits are of what we can do as a local government, and focus on those core issues and on those core services and on public safety, health and welfare – and let the private sector take care of development,” Kunselman said. Good development can be encouraged by having a good site plan process and a good planning commission, he said, and by adhering to the city’s master plans and enforcing the city’s zoning ordinances. That’s what our neighbors expect of the city council, Kunselman added, and that’s what he thought would breed a better community and redevelopment in our community.

Grand responded to Kunselman’s negative assessment of the city’s past involvement in development projects. Just because the city council made mistakes in the past about how to spur successful development, doesn’t mean that they can’t get it right in the future, she ventured. She didn’t think that city councilmembers have been perfect in the past, but thought, “we can actually learn from our mistakes.” One of the things she thought she’d done fairly well as chair of the park advisory commission was to work toward public engagement. It’s something that she does as a volunteer, it’s part of what she teaches, and she thinks we can learn from the mistakes of the past.

For the city-owned properties, Grand said, the community should not be left out of those decisions, but “we just have to be smarter about how we involve the community.”

About the old Y site, Kunselman said it’s obvious that it would not be sold until the prospective buyer has a site plan approved by the city council. Nobody’s going to buy on speculation – not with that kind of money involved, he concluded.

Role of Downtown

Another theme that emerged during the candidate forum could be grouped under the notion of the role of the downtown in the community.

Role of Downtown: Balance with Neighborhoods

Stephen Kunselman allowed that investment in the downtown is great. And downtown Ann Arbor is the wealthiest area in the community, he said. But out in the deeper areas of Ward 3, property values have decreased by 30%. There is no investment, and those areas are not getting the kind of needed investments it takes to raise the value of those neighborhoods. How important is that? To illustrate the kind of positive impact that city investments can have, Kunselman gave the example of a Ward 3 neighborhood – Arbor Oaks. When you look at their brand-new roads and brand-new water mains and sidewalks – their neighborhood looks fine, Kunselman said. And if you talk to the people out there, crime is down and the perception of their neighborhood has improved dramatically. And that’s what the city needs to do for all neighborhoods, Kunselman said. He’s tired of walking along the street with potholes and listening to people complain that they are not getting services, when the local government talks about cutting services.

Julie Grand said she wanted to point out that she does care about investment in the city’s neighborhoods. She felt that she and Kunselman disagreed about whether there’s more of a symbiotic relationship between downtown and the neighborhoods. She believes that development in the city’s neighborhoods actually does contribute to the downtown. She acknowledged the fact that property values went down in some neighborhoods. But she didn’t think that has anything to do with the DDA, or a focus on the downtown. She thinks that people want to come to the city and want to move into the neighborhoods, because they want to have a downtown. A downtown actually supports core services and the value of our neighborhoods, she concluded.

Kunselman stressed the idea that infrastructure is what keeps property values stable and improving. But there’s been a lack of infrastructure improvements over the last decades, he said – because the city had been saving money for the East Stadium bridge, or the DDA is capturing tax revenue that could also be used to spread out to the neighborhoods. That’s the kind of thing he’s been talking about. It’s his purpose as a representative of Ward 3 on the city council to distribute the wealth to those that are more in need, he said.

In its neighborhoods, Ward 3 has some of the highest concentrations of low-to-moderate-income families, Kunselman said. There are abandoned homes, he said, giving as an example Platt Road, where there are at least three homes where the properties aren’t being mowed, and it looks bad. That translates into no investment, he said. Property values are not coming up, and there’s no infill development. A lot of housing is being built downtown, Kunselman said. But there aren’t single-family homes being built in the neighborhoods. And that’s what we need, he contended. That would be his purpose for the next two years, Kunselman stated – to help reestablish priority back on our neighborhoods and not downtown.

Jack Eaton allowed that the roads in Ward 4 are a mess. But in the Lawton neighborhood and in some of the Dicken neighborhoods – and everywhere downstream, apparently – there have been significant flooding problems. Eaton attributed that to the fact that the city’s stormwater system has been neglected for decades. Fifteen years ago, the city had hired a consultant to study the flooding problems, he noted. The city received a report but did not act upon it – because it was simply too expensive, Eaton said. Another study process has been started, which is going to take a year and a half or more just to come to some recommendations.

So Eaton didn’t really think that the most pressing issue in Ward 4 could be resolved in the next two years. But he would certainly try to push it along – to get some relief for the people who live in neighborhoods that get flooded every time a heavy rain falls. One of the things that the current study is not addressing is the harm that the city has done in houses through its requirement that they disconnect footing drains and install sump pumps, he said. In houses where there’s never been a problem before, they now flood every time it rains, Eaton said. While the city is studying its water systems, nothing is being done to alleviate the harm that has already been done to the homeowners – and he thought that’s just outrageous.

Eaton pointed out that the DDA received about $4 million in TIF (tax increment finance) revenues last year, but it also receives several million dollars from the public parking system. So there’s a lot of money in the downtown area that could be used for other purposes – additional police, additional attention to the city’s infrastructure. But because it’s the DDA that is contracting with Republic Parking rather than the city, the money first goes to the DDA, he said, and then the city gets a little bit of a return on that. [The city receives 17% of gross parking revenues.] Eaton thought more of the money that the DDA takes in should be spent on the general welfare of the whole city, especially the neighborhoods. At every door he knocks on, people complain about the city’s roads. At every door he knocks on, people are concerned about safety services. Those are appropriate spending priorities, Eaton said, and if it means that the DDA’s revenues need to be constrained, that’s fine with him.

Kunselman took the liberty of rephrasing one of the questions from the moderator as follows: What can we do as a local government to encourage redevelopment in our neighborhoods? The first thing, Kunselman said, is that we need to start pushing back on some of the policies that were put in place by [former city administrator] Roger Fraser and [former public services area administrator] Sue McCormick – which raised the cost of utilities, improvement charges and connection charges. Some of these things were just outrageous, he said. Those polices stymie and stifle infill development in our neighborhoods. A new house won’t get built in a vacant lot in his neighborhood when the lot itself costs less than $20,000, but the improvement charge is $40,000. “It’s not going to happen – the economics don’t work,” he said.

So those kinds of policies have created a stifling effect on neighborhood development, Kunselman said. But downtown is seeing lots of development, he noted. That’s why there’s such a disparity between downtown wealth and the lack of wealth in the city’s neighborhoods. So the council is now taking a new direction by starting to repeal some of those policies that Sue McCormick and Roger Fraser had put in place, he said. Those policies would never have been imposed in a place like Detroit, Kunselman ventured. But it had been assumed that Ann Arbor is so wealthy that people would be able to pay those $40,000 improvement charges. That had been an attempt to use the utility system to generate revenue – which was the wrong direction to go and we need to repeal that, Kunselman said.

Jack Eaton said that when there’s talk about expanding the tax base, it’s important to consider where development is taking place. If it takes place in the DDA TIF capture district, then the tax base is not actually adding to the municipal tax base by an appreciable amount. TIF districts capture taxes and divert them from the local government, Eaton said. The increased population will create new demands for police and other services, but the new tax revenues are diverted to the DDA, he said. So Eaton would take a close look at how much money is diverted to the DDA. Eaton said he would be especially skeptical about forming new TIF districts on the State Street corridor, on the North Main corridor, or the Washtenaw Corridor. [This is an allusion to the possibility of forming a corridor improvement authority (CIA), made possible by relatively new legislation.] We shouldn’t be skimming money off the general tax revenues, Eaton said, when we are trying to improve the city at large, and not just these districts.

About the idea of a corridor improvement authority (CIA), Grand didn’t want to comment on State Street. But she noted that she serves on the North Main Huron River corridor task force. And a CIA is something that the task force has considered as a way to develop properties along the river. But she characterized that as a long-term approach. She also stated that new development does contribute to the tax base, even if some of the additional taxes go to a TIF authority. All of that money goes toward schools, she contended, and a lot of that money goes to pay for core services.

Role of Downtown: Who’s the Downtown For?

The question that prompted comments along the lines of who the downtown is for seemed to include the premise that downtown Ann Arbor had become a tourist trap. Julie Grand began by saying she disagreed with the premise of the question. Ann Arbor has for a long time had events that have brought people to the community. Part of providing amenities for residents is having places that draw people from the outside, too, she said. “That’s what successful cities do, and what successful downtowns do,” she said. Grand reported spending a lot of Saturdays with a lot of people “in a big bowl” – at football games. When 112,000 attend a football game, they are coming from the outside, and it’s nice to be able to recapture those dollars and have them stay at hotels and have places to eat – that provide jobs and taxes, and that fund core services in our community.

So Grand doesn’t mind that Ann Arbor has a vibrant downtown that attracts people from the outside. She attributed that to the fact that the DDA is doing its job. She hears that some residents feel that “the downtown is not for me.” She didn’t agree with that perspective, but she did hear people who have that perspective. She felt it was important to talk about development in downtown that is for the people who live in the downtown. The downtown park subcommittee of the park advisory commission had taken a walk recently, to look at some of the development as well as existing parks and open space, she reported. And the idea had been discussed that maybe Main Street is for people who come from the outside. But there are some really great things that are happening in other parts of downtown – like South Ashley – that might be described as a “townie corridor.” Grand liked the fact that “people want to come in from the outside and see what a great community we have.”

Stephen Kunselman gave his perspective on Ann Arbor, having grown up here. He’s seen the changes to the downtown from the 1970s. In the 1960s, as a toddler, he and his mom lived where Liberty Plaza is today, at Liberty and Division. In the 1970s, as a young teenager, he came downtown frequently because that’s where everybody used to come and hang out. There’s been a significant change, he said. Retail businesses have gone out to Briarwood, and it seems like nothing but restaurants are back-filling those spaces. Borders bookstore has been lost, along with all kinds of flagship stores that previously brought the older residents into the downtown. That’s not happening as much anymore, he ventured.

About himself, Kunselman said, he’s not coming into downtown to hang out with a bunch of 20-year-olds anymore. He just turned 50 and – as much as he wanted to maintain his youth – he indicated he wasn’t going to be visiting downtown in the way he did when he was younger. He didn’t think we should be trying to change the downtown back to the way it used to be, with department stores like Jacobson’s: “I don’t think that’s within our ability and I don’t think that’s something we should worry about.”

The dynamic of downtown is bringing in outside dollars, Kunselman said, and it is supporting our economy. And people are coming to town to cultural events, primarily that the university provides. He thinks that’s great – as Ann Arbor does have an older citizenry that still loves culture. It’s those people who are going to come downtown in the evenings to go to Hill Auditorium and go to Michigan Theater, and to go to the Power Center and then go to some restaurants.

But if downtown Ann Arbor becomes nothing but a food court, that’s not going to be sustainable, he cautioned. Kunselman pointed out there’s always been a tension between residents and outsiders. Back in the 1980s, there had been a banner on Division Street on somebody’s front porch during the art fairs, which stated: “U.S. suburbanites out of Ann Arbor.” That tension between townies and those that come in and participate in Ann Arbor’s great cultural events has been there for a long time, and we are not going to solve that, Kunselman concluded.

As far as Ann Arbor being a tourist trap, Jack Eaton allowed that it might seem that way – because there are a lot of restaurants and bars. But he felt that’s part of any college town. About the DDA’s possible role in that, he thought the DDA does have the intent to diversify downtown, by bringing in empty-nesters and young professionals to live there. They want to attract new businesses downtown so that the downtown area has jobs. But Eaton expressed some doubt about whether the DDA had been successful at that yet. Still, the goals of the DDA are pointed in the right direction, Eaton said. We should be making efforts toward a good diverse economy downtown – so that it isn’t just a series of coffee shops, bars and restaurants.

Unfortunately, Eaton said, a lot of that effort has resulted in student high-rises, which he characterized as counter to the purpose of the goal. If you get too many students living in a neighborhood, Eaton cautioned, you’re not getting the empty-nester or young professional to live there, too. Eaton didn’t think there’s anything the DDA has done right or wrong to cause downtown to just be bars and restaurants. It’s a reflection of where the economy is right now. As retail has moved out, other things replace it. Because rents are so high in the downtown, Eaton ventured, the replacements will be chain stores like CVS or expensive coffee shops with high prices. If we can develop some new office buildings, and if new residents can be added to downtown, we might see some other changes, Eaton concluded.

Role of Downtown: Downtown Development Authority

Jack Eaton said he believes Ann Arbor has a good downtown development authority, and the DDA serves an important function. But the parameters for funding the DDA are laid out in the city’s ordinance. What disappoints him about the Ann Arbor DDA, Easton said, is that the DDA has interpreted the city ordinance related to TIF capture that is at odds with the interpretation that the city had provided. And the city council has just allowed a subordinate body to tell the city council how to interpret its own ordinance, Eaton said. “I think that’s outrageous.” He attributed the unusual assertion of that kind of authority to the fact that people have been allowed to serve for so long on the DDA board that they believe they know better about public policy than the city council does. Eaton would support Stephen Kunselman’s effort to rein in the amount of TIF capture the DDA receives and to impose reasonable term limits on service on the DDA board.

Julie Grand allowed that she’s heard concerns about the DDA out in the community. But regardless of your opinion about the DDA or the downtown, “we all benefit from what the DDA does,” she said. Everyone benefits from a vibrant downtown that attracts new residents – that supports our local businesses and helps our economy, Grand said. As someone who grew up in a small town that witnessed emptying storefronts, and as someone who has witnessed efforts that have not always been successful because that town didn’t have a strong organization like the DDA to rebuild the downtown, she appreciated the DDA’s efforts.

Grand feels that the current system of funding actually works pretty well. The fact that the DDA is receiving more money is a reflection of the DDA’s success, she said. The DDA’s purpose is to encourage investment in the downtown, and the fact that more money is being generated shows that the DDA is doing its job. She thought the council had exercised its right to ask questions of and communicate with the DDA about how some of that additional money is spent. Overall, Grand appreciated the DDA’s efforts that contributed to the city’s tax base.

Acknowledging that there were a number of DDA board members in the forum audience, Kunselman ventured that everybody knows there’s been some tension between himself and the DDA board over the interpretation of the city ordinances – about how the DDA operates and its responsiveness to the community as a whole, not just downtown. That had been a big issue in his 2011 election. He’d heard from the neighborhoods – the voters that put him in office – that there needs to be accountability. And Kunselman contended that there’s been a significant change in how the DDA operates since he’d raised those issues over the years.

As an example of that, he gave the fact that this year the DDA had adopted its budget after the city council had approved it [with changes made by the city council, compared to the budget previously adopted by the DDA board] – according to state law. That had never happened before, he said. He felt that the DDA provides a significant benefit to the community. But he also contended that because of the leadership he’d shown on DDA-related issues – despite the political intimidation, he said, and the character assassination that the DDA orchestrates against him – it was apparent that the DDA board members are not the leaders of this community: “We, the elected officials, are [the leaders].” Kunselman said it’s important that the relationship between the city and the DDA works for the community as a whole.

In discussing improvements of infrastructure in the neighborhoods, Kunselman took the opportunity to criticize the DDA – by saying the DDA doesn’t know how to spend its money. He pointed out that the DDA is not contributing to the Fourth Avenue project downtown, which includes installing new water mains and a new road surface. Now the DDA is talking about replacing light poles on Main Street, Kunselman said – which the DDA had the whole past year to plan for, but didn’t. He stressed that no one has ever called for the dissolution of the DDA. Kunselman ventured that the DDA is now being responsive to the community needs, whether they like it or not.

Grand said the city is fortunate to have volunteers in the community [DDA board members] who help formulate policy on downtown issues. As someone who serves on a commission herself as a volunteer [the park advisory commission] and who spends a lot of time at that, she appreciated the efforts of those volunteers who are working to better our community and who are doing it because they really care about the community. That’s why she serves on the park advisory commission.

Responding to Grand’s description of the DDA as successful, Kunselman allowed that since its establishment in the 1980s, the DDA has been tremendously successful. Our downtown is thriving, he said. He stressed that he’s not talking about dissolving the DDA. But the intent of the law that was drafted in 1981 was that when you’re successful, when the time is up, then dissolve the DDA and move on. That’s never happened, he said. Out of the roughly 200 TIF districts across the state, only four have been dissolved, he thought. So he was not calling for the dissolution of the Ann Arbor DDA.

However, he was saying that the DDA really needs to focus. The 2003 TIF plan gives the DDA a lot of different directions to choose from – and the DDA is “all over the place.” Kunselman pointed out that the city council had changed the DDA’s budget to put more money in the DDA’s housing fund, but the DDA was now complaining there are no affordable housing projects it can support with that money. He said that Miller Manor – an Ann Arbor Housing Commission property – would be a good project. “We’re trying to get the DDA to be more focused.” Any project the DDA wants to undertake should be in the city’s capital improvement plan (CIP), Kunselman said. That way, the community would also get to participate in that discussion.

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Highlighted in yellow is the location of the former YMCA lot, which the city of Ann Arbor is considering selling. A $3.5 million balloon payment on the property is due at the end of 2013.

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 was co-sponsored by mayor John Hieftje and the vote was nearly unanimous. The lone vote of dissent came from Christopher Taylor (Ward 3).

What’s changed since August 2012 also relates to a project the Ann Arbor Downtown Development Authority has been working on for almost two years, the Connecting William Street project, 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 17.5% 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.

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

The partially dismantled Sun Dragon sculpture at Fuller Pool – it's the colored plastic on the roof that extends (in red) toward the pool. Previously, it extended to the end of the beam that juts out over the pool. City maintenance workers took it apart to repair the beam, which had rotted, and some parts of the sculpture broke. (Photo by the writer.)

The group discussed another sculpture – the Sun Dragon, designed by AAPAC chair Margaret Parker and located at Fuller Pool – which was damaged during recent repair work. The hope is to restore the piece before the pool opens on May 29.

Parker reported that Herbert Dreiseitl was in town last month and used bamboo poles to build a temporary full-scale mock-up of the large water sculpture that’s commissioned for the exterior of the new police/courts building on Fifth and Huron. But the German artist still hasn’t provided additional information regarding two interior pieces for the building, prompting one commissioner to ask, “He’s lost interest, maybe?”

And in reporting on a potential new member to the commission – Lee Doyle, who’s director of the UM Film Office – commissioner Elaine Sims noted that Pierce Brosnan will be making art in public (shooting a film) outside the Law Quad on the afternoon of May 18. The actor is part of the cast for Salvation Boulevard, which is already in town shooting at various sites on campus.

Much of the meeting dealt with more prosaic topics, however: governance, planning and PR.

Planning Issues: Won’t Someone Please Be Chair?

As head of the planning committee, Cheryl Zuellig reminded commissioners of the annual planning meeting they’d be having the following evening, to review their work for the past year and look ahead to fiscal 2011.

AAPAC is still seeking nominations for new commissioners. AAPAC will make recommendations to the mayor, who is responsible for nominating commissioners, who must then be confirmed by the city council.

Elaine Sims said she’s talked with Lee Doyle, who is chief of staff for the University of Michigan Office of the Vice President for Communications and a member of the President’s Advisory Committee for Public Art. Doyle is also a founder of the university’s Arts on Earth program, and oversees the UM Film Office. “I think she’s a strong candidate,” Sims said. [Doyle was featured in a recent Concentrate article about film industry activity in this area.]

Connie Brown asked how they would handle a situation if there were too many nominations. Marsha Chamberlin suggested getting people involved at the committee level.

Jim Curtis pointed to the lengthy period between discussing the candidates and selecting them, noting that it takes several months. He wondered if that process could be accelerated. Margaret Parker, saying it was often difficult to reach people, added “we’re doing the best we can.”

Zuellig also discussed a proposal to add two new positions to the board’s leadership structure. In addition to the board chair, the positions of chair-elect and past chair would “help spread the joy of those responsibilities,” she said. Parker, who’s served as board chair since AAPAC was formed and has been pushing for someone else to take on that role, also suggested having the chair’s term limited to one year, “so it wouldn’t be like a life …”

“… sentence?” joked Cathy Gendron.

Chamberlin, who’s also president of the Ann Arbor Art Center, said the board of that nonprofit has found that one-year terms are too short. She also said it would be helpful to know exactly what the board chair’s duties are. Parker said she was compiling a list.

Commissioners agreed to discuss it at an upcoming organizational session, which will be facilitated by Connie Pulcipher of the city’s systems planning staff. Pulcipher attended Tuesday’s AAPAC meeting, and explained that she’d be interviewing each commissioner privately in preparation for the session, which will likely be held in late June or July.

Pulcipher said she’d be collecting information about what commissioners see as issues or opportunities for AAPAC, what works well, what could be improved, and how AAPAC works with city staff and the public, among other things. She said her report will be a summary of responses, and that comments won’t be attributed.

Projects: West Park, Fuller Road Station, Ann Arbor Skatepark

From the projects committee, Connie Brown updated commissioners on the status of several efforts. The design hasn’t been finalized for the West Park public art project, being done in conjunction with major renovations underway there by the city’s parks staff. A contract with the artist – Traven Pelletier of Lotus Gardenscapes – was recently signed.

The general concept for the work had been described at AAPAC’s March 9, 2010 meeting:

The artist’s conceptual proposal for the site includes creating two metal “trees” at each end of the top tier of the concrete seating area. Each tree would have a circular trunk made from recycled metal, about 8-10 inches at its base and standing about 10 feet tall. Branches near the top of the trunks would also be made from recycled metal. The trees would either be painted or left natural to weather. In addition, large boulders would be incorporated into the seat walls, as well as around the base of each tree. The artist would also help the parks staff place additional fieldstone boulders in the area between the seats and the bandshell, for seating and aesthetic purposes.

Brown also reported that the projects committee is forming a task force to work on the proposed Fuller Road Station. The group would help select public art for the building, which will initially be a large parking structure and bus station on the south side of Fuller Road, just east of East Medical Center Drive.

And as she reported at last month’s AAPAC meeting, they aren’t currently working on a public art component for the Ann Arbor Skatepark, since it’s not a city-funded project. Brown went to the group’s public design workshop in April, where skatepark designer Wally Hollyday presented several conceptual designs. Marsha Chamberlin said the final conceptual design for the skatepark will be unveiled on May 22 at an event held at the Ann Arbor Art Center.

Unresolved Questions in Working with the DDA

As they’ve done at other meetings over the past several months, commissioners discussed AAPAC’s working relationship with the Ann Arbor Downtown Development Authority, which also funds public art. Connie Brown reported that she and Jim Curtis have drafted a letter outlining what tasks AAPAC can do for the DDA. They haven’t sent the letter yet, she said.

Curtis said they’re still waiting to hear back from DDA executive director Susan Pollay, whom they’d met with several months ago. She was going to talk to her board members, he said, but he’s unsure if that’s happened. So he and Brown decided to come up with a list of items to send to the DDA, outlining how they might work together.

Margaret Parker expressed concern over who would pay for some of these tasks, or who would provide the volunteer time. There was also the issue of the DDA “pre-selecting” a project, she said. At Hanover Park, on the northwest corner of Packard and Division, the DDA has built a a circular dais that’s about 25 feet in diameter, enclosed by a seat wall, with an empty center that’s suitable for a sculpture or plantings. They’ve asked AAPAC to help select a piece of public art for that site.

Curtis explained that the DDA wants AAPAC to take the lead – that’s why he and Brown made a list of what tasks AAPAC can do. He said he didn’t think it should take as long as it has to move forward.

Several commissioners said they thought there should be more clarity regarding who pays for administrative work, which tasks will be handled by volunteers, and whether those volunteers would be commissioners or others from the community. They agreed to discuss it further at a planning session the following night.

Gift Selection Panel: Thanks, But No Thanks

Jim Curtis reported that about 14 months ago, AAPAC was approached by an artist who wanted to donate a sculpture to the city. Over the past year, commissioners have debated what to do, he said. [Though during Tuesday's meeting the sculptor was not mentioned by name, in previous meetings he was identified as Garo Kazan, who proposed donating a large bronze sculpture of a horse.]

A peer review committee was formed earlier this year, Curtis said, which included two University of Michigan representatives, one private sector designer, a community advocate and a city employee who’s an engineer. They were given AAPAC’s gift selection guidelines and went to view the sculpture. On April 29, the committee met and discussed the gift. Ultimately, Curtis said, the committee was appreciative of the offer, but decided unanimously not to accept the gift. He noted that although he and Katherine Talcott, the city’s public art administrator, facilitated the group, neither of them voted.

The committee’s concerns centered on aesthetics, maintenance and liability, Curtis reported. They were worried that the piece might be vandalized, and that liability would be an issue if people climbed on it.

Cheryl Zuellig cautioned that there needed to be a public record of the reasons for rejecting the artwork, and those reasons should be tied to AAPAC’s bylaws. They need to be consistent and transparent in making these decisions. She also wondered whether maintenance and vandalism issues for this piece would differ from any other – all public art would have those concerns, to some extent, she noted. If those were always a concern, then you could end up rejecting everything. She and other commissioners thanked Curtis for his work on the project.

Fuller Pool’s “Sun Dragon” Damaged

Margaret Parker reported that maintenance workers at Fuller Pool had damaged the Sun Dragon – an outdoor sculpture attached to the pool’s shower, which uses water that’s heated with solar energy. A wooden beam, which supported both the sculpture and a pipe carrying the heated water, had rotted. When maintenance workers removed part of the sculpture to repair the beam, parts of the artwork were broken. “They chopped the head right off,” said Parker, the artist who designed the Sun Dragon in 2003.

The pool manager, Dan McGuire, wasn’t aware that AAPAC should be contacted before doing any repair work that involves public art, Parker said. The situation highlights the need to coordinate with city staff, she said, and to come up with an overall maintenance plan for the city’s public art works.

Cathy Gendron asked where the funding for repairs would come from. There’s not yet an estimate from the fabricator, Parker said. It could be paid for out of a maintenance fund for public art that’s held by the Ann Arbor Area Community Foundation, she said – there’s a balance of about $18,000 in that. Or it could be paid for from the parks budget. “The funding question is something that has to be answered,” Parker said.

The pool is still closed for the winter season – it reopens May 29. The staff hopes to complete repairs before then.

Dreiseitl Update

Margaret Parker reported that Herbert Dreiseitl came to Ann Arbor on April 16-17 and worked with staff of Quinn Evans Architects, the Ann Arbor firm that the city has contracted to be project manager for the police/courts building, also known as the municipal center. They did a full-size mock-up of the large water sculpture that the city has commissioned the German artist to create – the mock-up was made of bamboo poles, Parker said, adding that the sculpture as mocked up seemed larger than it did in Dreiseitl’s drawings.

There are still unanswered questions regarding two interior pieces, she said – they still don’t have a new pricing estimate, for example. That prompted commissioner Cheryl Zuellig to observe, “He’s lost interest, maybe?” Parker replied that they chose someone who has an international reputation, so of course he’s very busy. They expect to have answers in early June.

Jim Curtis said he’s starting to feel a little uncomfortable about it, but Connie Brown noted that they hadn’t accepted the proposal for the interior pieces. Parker pointed out that Dreiseitl is communicating more with Quinn Evans at this stage. “Many questions are being answered,” she said.

Public Relations: Survey, Open House, Website

An online survey soliciting input on public art had yielded 236 responses as of Tuesday, reported Marsha Chamberlin, a member of the public relations committee. She’s working on other ways to promote it before they close it at the end of May.

There are seven nominations for the annual Golden Paintbrush awards, which recognize contributions to public art. Cathy Gendron, who’s also on the PR committee, asked that commissioners look at the nominations and vote by May 21st. They’ll plan to give out a maximum of five awards, but could give fewer, she said. Winners will be presented with the awards at a June meeting of the Ann Arbor city council.

An open house is scheduled for Wednesday, June 23, to highlight the commission’s work and seek public input. There was some discussion about the time of the event – a room in the library is reserved for 7-9 p.m., but several commissioners thought that was too late. Margaret Parker said she’d try to move the time to 6-8 p.m.

The event will be organized around a speaker, Gendron said. Commissioner Jeff Meyers, who didn’t attend Tuesday’s meeting, is trying to confirm Chrisstina Hamilton, director of visitors’ programs for the UM School of Art & Design, as the speaker.

Gendron described the event as a time for networking, and said she wants it to be fun and engaging, giving people the opportunity to talk with commissioners and ask questions. They plan to use the map that was posted at last year’s open house – people used it to indicate locations where they’d like to see public art. AAPAC also plans to convey results of its online survey at the event. Cheryl Zuellig suggested providing a way for people who attend the open house to take the survey, if they haven’t already.

Gendron gave an update on AAPAC’s website and Facebook page. The Facebook page hasn’t launched yet, and commissioners discussed what kind of information to include and how to update it. For Facebook posts, Chamberlin described how they handle it at the Ann Arbor Art Center. Each day is assigned to a different person on staff, who is responsible for posting on that day. It works well, she said, and doesn’t burden any one individual.

After AAPAC is set up on Facebook, Gendron said, she’ll start working on their presence on the new Arts Alliance website. They’ll also be moving ahead with changes to AAPAC’s page on the city’s website, and will eventually be taking down their secondary site, which was designed by Annie Wolock of Keystone Media. Wolock attended Tuesday’s meeting and was introduced as a new member of the PR committee.

Commissioners present: Connie Brown, Marsha Chamberlin, Jim Curtis, Cathy Gendron, Margaret Parker, Elaine Sims, Cheryl Zuellig.

Absent: Jeff Meyers

Next regular meeting: Tuesday, June 8 at 4:30 p.m., 7th floor conference room of the City Center Building, 220 E. Huron St. [confirm date]

A draft of the resolution with the recommendation was to be sent to all board members for review late Wednesday. If the full DDA board approves the resolution at its next meeting on May 5, city councilmembers who are up for re-election this year may not have to campaign under the shadow of police and firefighter layoffs. The $2 million from the DDA would allow the city council some flexibility in amending the FY 2011 city budget, before it is adopted at the council’s second meeting in May. That budget was formally introduced at the council’s April 19 meeting and showed a roughly $1.5 million deficit. It also included some police and firefighter layoffs.

But how much of the $2 million will be put towards avoiding layoffs versus offsetting the deficit is far from clear. Two city councilmembers attended the DDA operations committee meeting: Sandi Smith, who also serves on the DDA board; and Margie Teall, who serves on the council’s sub-committee appointed for the purpose of renegotiating the parking agreement between the city and the DDA. Last year, the city council and the DDA board each appointed a committee for the purpose of renegotiating that agreement.

At Wednesday’s meeting, Smith said it was not certain whether layoffs could be avoided with the $2 million payment or if so, how many could be avoided. Smith’s contention that there was no guarantee the $2 million would avert layoffs came in response to one of several sharp questions put to his fellow DDA board members by Newcombe Clark. Clark began the discussion by asking if the $2 million was tied to anything.

In the course of the discussion, it was made clear that the $2 million would be tied neither to a promise of no layoffs at the city, nor made contingent in any way on specific progress towards a renegotiation of the parking agreement between the DDA and the city.  It would also not be tied to the implementation of any part of a “term sheet” that will form the basis of the city-DDA discussions in the coming months.

Key aspects of that “term sheet” are the idea that regular payments will be made to the city, that the DDA will assume some responsibility for parking enforcement, and that the city will be “held harmless” in any revenue loss associated with cessation of its enforcement activities.

But by the end of the discussion, Clark had eked out a victory of sorts: a provision in the draft resolution that ties the $2 million to a public process, from this point forward, for the city-DDA negotiations. They have been going on a few months now out of public view. In that regard, the resolution can be fairly be analyzed as a fresh commitment to the committee structure, with its associated expectations of public process, that the two bodies had already adopted, but not implemented for discussing the parking agreement.

Background: The Parking Agreement of 2005

We begin with the basic background on the parking agreement between the city and the DDA, which was a $10 million deal struck in 2005, extending through 2015. It’s that deal that underpins the current discussion on the $2 million payment the DDA is now contemplating.

Since 1992, the DDA has administered the city’s parking system on properties owned or leased by the city of Ann Arbor. Set to expire in 2012, the agreement was extended in 2005 through 2015 – in light of the financial challenges the city faced in that year – to provide additional revenue to the city. In broad strokes, it was a $1 million-per-year deal, with the added wrinkle that the city could request up to $2 million from the DDA in any given year, provided the total over 10 years did not exceed $10 million. From the DDA board’s 2005 resolution:

Whereas, The City is facing a funding crisis and has asked the DDA to significantly increase its payments under this Agreement in order to help the City address this crisis;
Whereas, The City and the DDA agree that the DDA can afford this increase only if the City and DDA cooperate to increase revenues into the DDA;
Whereas, Both the City and the DDA agree that the DDA is a separate governmental entity that has a statutory responsibility to support and expand community values and services in the City’s downtown and near downtown neighborhoods;
[...]
3. Increase the annual rental fee paid to the City for use of City parking facilities to $1,000,000.00/year beginning with the 2005/06 fiscal year, for a total of $10,000,000.00 during the ten year period of the Agreement.
4. During the period of July 1, 2005 to June 30, 2015, provide the City the opportunity to draw an advance on future rent not to exceed one full year’s rent, thus providing for up to two year’s rent on any year. Any request by the City for pre-payment must be made to the DDA by December 1st of the preceding year so as to be included in the DDA’s annual budget.

The situation now confronting the city is one anticipated by DDA board member Rob Aldrich in 2005: What happens if the city requests $2 million each of the first five years? From the board minutes of the March 2, 2005 meeting:

Mr. Aldrich asked if it would be possible for the City to draw the full $10 million in the first 5 years; Mr. Solo said yes. Mr. Aldrich asked what would happen in year six, which is to say, would the City be satisfied to receive no further rent for the remaining five years. There was no response to this question.

In the city’s fiscal year terms, FY 2011 is “year six.” At that March 2, 2005 meeting, representing the city was councilmember Leigh Greden (Ward 3) who was filling in for mayor John Hieftje, who sits on the DDA board as mayor.

Other members of the DDA at the time were: Ron Dankert, Bob Gillett, Rene Greff, Roger Hewitt, John Hieftje, Sandi Smith, Dave Solo, Rob Aldrich, Fred Beal, Gary Boren, Dave DeVarti, Leah Gunn. Of those, remaining now in 2010 are Hewitt, Hieftje, Smith, Boren and Gunn.

Background: Foundations of Good and Bad Faith

Based on the March 2, 2005 DDA board meeting minutes, then-councilmember Leigh Greden, who was filling in for mayor John Hieftje at the board meeting, gave an assurance on the part of the city that it was not the intent to ask for $2 million beyond the first year of the agreement [emphasis added]:

Mr. Solo said that approving this resolution does not preclude renegotiations at any time, by either the City or the DDA. Mr. Greden commented that the City would have to agree to renegotiate in the future, and that it was important to note that it was not the intent of City Council to rely on this money more than to get them through the next few years. City Administration and Council have put in place short- and long-term strategies to solve the structural budget deficit, and have budgeted for $2 million only in the first year.

The fact that the city ultimately did request $2 million each of the first five years is one possible reason for a perception by some DDA board members of poor faith on the part of the city.

Another reason some DDA board members might perceive a historical lack of good faith on the city’s part can be traced to a DDA development plan for three different downtown parcels that was in the works back in 2005, in the same time frame as the parking agreement was renegotiated. It was known as the “3-Site Plan.”

The 3-Site Plan was an effort to develop city surface parking lots, including lots at First & William, First & Washington and the Kline’s lot – on the east side of Ashley Street, between William and Liberty. The concept underpinning of the 3-Site Plan was that parking could be decoupled from development – build a parking structure at First & William and free up the other two sites for development without the constraint of building on-site parking.

But instead of pursuing the 3-Site Plan in 2005, Ann Arbor’s city council opted to create a Greenway Taskforce to explore the possibility of incorporating the First & William lot into a greenway along the Allen Creek creekshed. And in July 2009, the city council passed a resolution  expressing the desire to see the lot become a park, when money for environmental cleanup could be identified. [Chronicle coverage "First & William to Become Greenway?"]

The First & Washington site now has an approved site plan for City Apartments – a combined residential/parking development by Village Green. Nothing has been built because of a lack of financing for the developer. Its site approval has been extended by the city administrator until June 30, 2010, after which additional city council action will be required to allow more time for the project to move forward. No similar progress has been made on the Kline’s lot.

The reporting of Tom Gantert of The Ann Arbor News during 2005 chronicles the struggle between supporters of a greenway and supporters of the 3-Site Plan, which was championed by the DDA, through the better part of the year. [Ann Arbor News archives from 2003 until it closed last year are available from the Ann Arbor District Library's online research portal.]

The friction that year between greenway and 3-Site Plan supporters was reflected in friction between DDA board members and city councilmembers, as well as between the city’s planning commission and the city council. At the time, mayor John Hieftje was accused of trying to prevent the city’s planning commission from holding its own public hearing on the matter, in part by preventing CTN coverage of their planned hearing.

The attitude of some at the DDA towards the idea of decoupling the First & William parcel from the 3-Site Plan was essentially that it would be better to start from scratch: From a June 28, 2005 Ann Arbor News article by Gantert:

[DDA executive director Susan] Pollay did show the DDA’s commitment to its plan when she said was asked about “unhitching” First and William from the proposal.

“Unhitching a piece of it?” Pollay asked, repeating the question. “You may as well start afresh.”

Hieftje said that was the first time he’d heard Pollay say it’d be better to scrap the plan than break up what has been pitched as a “three-site plan.”

But by the end of 2005, a 2-Site Plan compromise had evolved. It involved development just of the Kline’s lot and the First & Washington lot.

Do some at the DDA have lingering ill feelings because the outcome of the political process didn’t go their way on the 3-Site Plan? Yes – but it’s about more than a lost political battle.

It’s the fact that when the parking agreement was negotiated in 2005, there was a conscious expectation on the part of the DDA that if the $10 million parking agreement was approved, the city council would approve the 3-Site Plan. In an April 28, 2010 email sent to all members of the current DDA board, plus current city councilmembers, former DDA board member Rene Greff put in writing what she’d told The Chronicle a couple weeks earlier in a telephone interview. [Though she no longer serves on the DDA board, Greff attended Wednesday's operations committee meeting.]

Specifically, Greff writes that in 2005 the DDA’s negotiating team saw a link between the parking deal and the 3-Site Plan:

But the council members on our committee cautioned that we couldn’t link the increased rent with the 3 site plan in writing because that would make it look like the DDA was bribing council for passage of the three site plan. And besides, we were all working in good faith and knew that the city was going to approve the 3 site plan.

But those 2005 negotiations were conducted out of public view. Greff told The Chronicle that numbers of councilmembers and DDA board members present were consciously chosen to be fewer than a quorum to avoid Open Meetings Act requirements, and that the committee had chosen meeting locations to avoid being discovered by Gantert. In her April 28, 2010 email, Greff calls the meetings “clandestine.”

In her phone interview with The Chronicle, Greff allowed that she’d been complicit in keeping the meetings out of public view. She said that as a relatively new member of the DDA board, she’d relied on Leigh Greden’s assurance that “this is how things are done,” with things worked out in private before they’re made public.

The lesson she drew, she said, was that to protect the interests of the DDA, keeping the process public was important.

Committees, Expectations of Public Process

Although the process that began in January 2009 to renegotiate the parking agreement between the city and the DDA began with the expectation of a public process, up to now it has been shielded from public view. And Wednesday’s operations committee found DDA board members attributing that shielding to the lingering hurt feelings from 2005.

How did the renegotiation process start? It can be traced to the fact that the city of Ann Arbor plans in two-year financial cycles, even though it adopts budgets one year at a time. Back in January 2009, councilmember Sandi Smith (Ward 1) noticed that for the FY 2011 plan, which was the second year in the 2010-11 two-year cycle, the city had “penciled in” a $2 million payment from the DDA – despite the fact that the existing parking agreement did not require such a payment.

Smith brought forward a resolution to the city council, which it passed, asking the DDA to begin a discussion. The DDA responded by appointing a committee tasked to negotiate the parking agreement with a corresponding committee of the city council. The council was not swift in appointing its own committee, with some councilmembers expressing reservations about the membership on the DDA’s committee.

At Wednesday’s operations committee meeting, DDA board member Newcombe Clark observed that for 15-months, the city council had been unwilling to engage in dialog, partly because they didn’t like who would be sitting across the table from them.

Russ Collins responded to Clark, contending that he did not know that was the case, saying he had not heard that or read that, allowing that perhaps he should read other things.

Reading a timeline overview of the relevant history, which summarizes material The Chronicle has published twice previously, confirms Clark’s claim [See Chronicle coverage: "Parking Report Portends DDA-City Tension" and "DDA Retreat: Who's On the Committee?"]:

• Jan. 20, 2009: City council passes a resolution asking the DDA to begin discussions of renegotiating the parking agreement between the city and the DDA in a mutually beneficial way.
• March 4, 2009: DDA board establishes a “mutually beneficial” committee to begin discussions of the parking agreement between the city and the DDA. On the committee: Roger Hewitt, Gary Boren, Jennifer S. Hall, and Rene Greff. The DDA’s resolution establishing their committee calls on the city council to form its own committee.
• May 20, 2009: During the mid-year DDA retreat, mayor John Hieftje states publicly that city councilmembers object to the membership of Jennifer S. Hall and Rene Greff on the DDA’s “mutually beneficial” committee.
• June 3, 2009: DDA board chair Jennifer S. Hall removes herself from DDA’s “mutually beneficial” committee, replacing herself with Russ Collins.
• June 15, 2009: Mayor John Hieftje nominates councilmembers Margie Teall (Ward 4), Leigh Greden (Ward 3) and Carsten Hohnke (Ward 5) to serve on the city council’s “mutually beneficial” committee, and they’re confirmed at the city council’s July 20 meeting.
• July 1, 2009: DDA board chair Jennifer S. Hall appoints Sandi Smith to replace outgoing DDA board member Rene Greff (whose position is filled with Newcombe Clark) on the DDA’s “mutually beneficial” committee. Smith is also a city councilmember, representing Ward 1.
• August 2009: Leigh Greden is defeated in the Democratic primary by Stephen Kunselman.
• August-December 2009: Sandi Smith, the chair of the DDA’s “mutually beneficial” committee, reports at each monthly DDA board meeting that there is nothing new to report.
• Dec. 5, 2009: Dissolution of the DDA is included in an “everything is on the table” list for discussion at the city council’s budget retreat.
• January-April 2010: Roger Hewitt reports at monthly DDA board meetings that only informal discussions are taking place.

As The Chronicle has reported previously, the expectation that the two committees would meet publicly rests on a 1991 city council resolution stipulating that even sub-committees of public bodies that do not constitute a quorum are expected, to the best of their abilities, to conform with the Open Meetings Act:

R-642-11-91

RESOLUTION REGARDING OPEN MEETINGS FOR CITY
COMMITTEES, COMMISSIONS, BOARDS AND TASK FORCES

Whereas, The City Council desires that all meetings of City boards, task forces, commissions and committees conform to the spirit of the Open Meetings Act;

RESOLVED, That all City boards, task forces, commissions, committees and their subcommittees hold their meetings open to the public to the best of their abilities in the spirit of Section 3 of the Open Meetings Act; and

RESOLVED, That closed meetings of such bodies be held only under situations where a closed meeting would be authorized in the spirit of the Open Meetings Act.

Expectations of Public Process Not Met

No meetings of their respective “mutually beneficial” committees have ever been acknowledged by either the city council or the DDA board at any of those bodies’ regular meetings. However, starting in early January of this year, members of the committees – with the addition of councilmember Christopher Taylor, who was not appointed as part of the council’s committee – began the work of renegotiating the parking agreement in the guise of a “working group.” From the “term sheet” memo that was circulated at Wednesday’s operations committee meeting:

MEMORANDUM
To: DDA Board
From: Gary Boren
Russ Collins
Roger Hewitt
Carsten Hohnke
Sandi Smith
Christopher Taylor
Margie Teall
CC: Roger Fraser
Susan Pollay
Re: City of Ann Arbor – DDA Operations
Date: April 28, 2010

In conversations beginning after the New Year, Roger Hewitt approached a number of us in order to discuss additional areas of possible cooperation and resource allocation between the DDA and the City of Ann Arbor. As a result of these conversations, this working group formed to sketch the framework of what could be a new relationship between the DDA and the City. That general framework is described below.

The term “working group” in this context was first encountered by The Chronicle in conversation with Christopher Taylor, when he arrived on the third floor of the Larcom Building on Friday afternoon, April 16 to attend a meeting of the “working group.” Taylor seemed visibly surprised to see The Chronicle waiting there. We had learned of the scheduled meeting the previous Wednesday, when Russ Collins mentioned it at the DDA board’s partnerships committee meeting.

Asked if he was also there to attend the meeting of the “mutually beneficial” committees, Taylor rejected the idea that the committees were going to meet, saying that it was “more of a working group.” He’d been asked to participate by Roger Hewitt, Taylor said.

As The Chronicle previously reported, city administrator Roger Fraser then refused to allow The Chronicle to attend. In barring The Chronicle from the meeting, Fraser rejected the applicability of the 1991 council resolution that requires the meetings of city sub-committees to comply with the Open Meetings Act, contending it was not a sub-committee of the council that was meeting.

Present in addition to Fraser were six others: Susan Pollay, executive director of the DDA; DDA board members Roger Hewitt, Sandi Smith and Russ Collins – all members of the DDA’s committee established to discuss the parking deal; and city councilmembers Christopher Taylor (Ward 3) and Carsten Hohnke (Ward 5). Hohnke is on the council’s committee, while Taylor is not. Missing from the DDA’s “mutually beneficial” committee at the meeting was Gary Boren.

In rejecting the applicability of the 1991 resolution, Fraser may have been relying on the idea that Smith, Taylor and Hohnke – though a committee-like subset of councilmembers that were part of a “working group” –  did not constitute the appointed sub-committee of the council. The DDA’s committee, however, had three of its four members present, constituting a quorum of its members.

Following Wednesday’s DDA operations committee meeting, Sandi Smith told The Chronicle that a meeting that included the city’s committee did take place in the fall of 2009. However, that meeting didn’t go anywhere, she said, attributing it to Leigh Greden’s defeat in the August primary.

The work of producing the “term sheet,” Smith said, was accomplished largely through rotating one-to-one meetings, not group meetings. In explaining why the process had been kept out of the public view up to that point, Smith echoed a sentiment that Russ Collins had expressed during the meeting, when he said that the parties needed the initial privacy to get to a place where they could have a dialogue – otherwise they’d just be throwing spitballs across the table, Collins said. Collins described the “term sheet”  as a “beachhead” for communication, and the conversation needs to unfold now publicly.

Hearing the phrase “beachhead” from Collins more than once prompted Smith to kid him: “Define that for me, Russ.”

In her post-meeting conversation with The Chronicle, Smith attributed that initial barrier to communication between the city and the DDA to a “culture clash” and lingering resentment about the failure of the city council to approve the 3-Site Plan back in 2005.

Why the DDA Operations Committee Met

To set the context of Wednesday’s DDA operations committee meeting, where the recommendation to pay $2 million to the city of Ann Arbor was discussed, it’s worth reflecting on why the committee met.

The short answer is that the operations committee of the DDA always meets on the last Wednesday of the month, which works out to be the week before the meeting of the full board.

The topic of the $2 million payment may have turned up on the operations committee’s agenda in any case. But the thing that virtually guaranteed it would be discussed on Wednesday was a conversation at the end of the partnerships committee meeting two weeks earlier.

At that meeting, Newcombe Clark had questioned why the partnerships committee had not considered  a resolution to bring before the full board on the $2 million question. He noted that timing of the city’s budget process – adoption by the city council before the end of May – meant that the full DDA board would need to vote at its next monthly meeting  (May 5) on converting the $2 million contingency in the DDA’s budget to a payment to the city.

At the partnerships committee meeting, Clark questioned whether the resolution could be brought to the board without recommendation by a DDA board committee. And when it was suggested that the “mutually beneficial” committee could make the recommendation to the full board, Clark questioned whether it could do that as an ad hoc committee.

At issue was adherence to the DDA bylaws. The city of Ann Arbor’s need for the $2 million could be analyzed as a “request for funding” under the DDA bylaws:

Section 10 – Requests for Funding. The Board may not act upon a request for funding unless the request has been referred to a committee of the Board for review and recommendation. In the event that a committee has not made a recommendation to the Board within 60 days from the time that the request was first presented to the Board, the Board may, by majority vote, bring the proposal to the Board for consideration without benefit of the committee recommendation.

[Approval of amendments to the DDA bylaws, which have been approved by the DDA board, are on the city council agenda for its May 3 meeting. Section 10 does not contain any proposed revisions.]

At the partnerships committee meeting, the issue was settled when Clark asked for and received from the rest of the partnerships committee an assurance that there would be at least a seven-day notice of any resolution on the $2 million question. Said Clark: “I think that it’s reasonable to have seven days notice before we have an item that’s going to make the board meeting crazy.”

The seven-day assurance meant that the last opportunity for a standing committee to review the $2 million resolution before the May 5 board meeting was at the operations committee meeting.

What’s Tied to the $2 Million, If Anything?

Deliberations at the operations committee meeting began with the distribution of the “term sheet.” Several minutes went by as those who were seeing the document for the first time read through the text. It features in most significant part the idea of unifying the administration of the parking program and the enforcement of parking fines with a single entity – the DDA. That’s consistent with The Chronicle’s previous analysis of the DDA’s recent parking plan as an implicit pitch by the DDA to the city to assume responsibility for enforcement of parking rules downtown. [Chronicle coverage: "Parking Report Portends City-DDA Tension"]

The “term sheet” envisions signing an actual contract by Oct. 31, 2010, which is just before the general election in the fall.

DDA board member Russ Collins called the “term sheet” document a “beachhead” that was established to begin a dialog, one that members of the DDA’s mutually beneficial committee felt would ultimately be fruitful and beneficial. At that point, Newcombe Clark sought to clarify if the idea was to pay the $2 million because of the start to the dialog.

If it was something else besides the start to the dialog that was to result in the $2 million payment, Clark wanted to know what that was. If there was nothing else, he wanted to know what the urgency was about the timing. Collins answered that it had to do with the timing of the city’ budget cycle. Clark observed that the current city budget as proposed by the city administrator, if enacted, would include layoffs. So he asked if the idea was to make the $2 million payment in order to guarantee no layoffs.

Sandi Smith, speaking from the perspective of a city councilmember, indicated that the outcome of the community conversation over the next two weeks would affect whether there are layoffs or not – it was unsure whether the $2 million would avert layoffs, and if so, how many, she said.

If the $2 million was to be paid just because the city was now talking to the DDA, wondered Clark, what would happen in November if no progress had been made towards working out the contract?

Smith allowed that there was “an element of faith” involved. Margie Teall, who represents Ward 4 on the city council and who was also present at the table for Wednesday’s DDA operations committee meeting, indicated that the faith was based on more than just the fact that there is a great conversation going on. There was an intent, said Teall, to keep working on the plan.

Collins noted that one reason it had been important to involve the staff of the city and the DDA in the process was to ensure the continuity of work on the plan. And the idea, said Collins, was to establish a longer-term, multi-year contract – something echoed by Hewitt.

Clark then picked up the contrast between the staffs of the two organizations and the members of the two public bodies. Clark noted that there are three people involved on the city’s side who might no longer be involved after the Democratic primary election, held in August. He meant Teall, Smith, and Carsten Hohnke, all of whom will face primary challenges. [Christopher Taylor does not currently face a primary challenge; however, the deadline to submit petitions is not until May 11.] In that context, Clark wondered if there would be follow-through from new councilmembers replacing those who could potentially lose. Speaking to Smith and Teall, Clark said: “I trust your ability to follow through on these agreements, because you are there. But if you are not there …”

Clark himself has taken out petitions to run as a Ward 5 candidate, challenging Hohnke for his seat. It’s a point to which Clark would eventually return as the discussion unfolded to focus on the nature of the future meetings that would be held between representatives of the DDA and the city. Clark secured an assurance that those meetings could be attended by anyone on the DDA board, “even if we don’t like certain people or even if certain people are running against certain people.”

As Russ Collins clarified, the DDA’s working practice for the committee in the future would be consistent with the way that the DDA’s committees work in general. In particular, DDA committee meetings are noticed, open to the public and open to any DDA board member, whether they’re a member of the committee or not.

Before the operations committee reached a point of committing to a public process from this point forward, Clark floated a different idea: staggering out the payments to the city. He suggested a contingent payment schedule of, for example, $100,000 a month based on the city’s ongoing good faith efforts to negotiate the details of the contract. He went as far as to say the conversation could end right then if everyone agreed that the city would get the $2 million only on a contingent, staggered basis – that would satisfy his concerns.

Teall rejected the idea of a contingent payment, as did Smith, Leah Gunn and Hewitt, saying that the city could not budget based on that kind of contingency.

Clark then changed tack slightly, pointing out that the good faith discussions up to that point had been accessible to only some of the DDA board members and not to the public. Clark expressed his concern that the city would opt to have discussions only when they want to, and it would be closed, it wouldn’t be announced, some people would be invited, some people wouldn’t. Concluded Clark, “That is a ridiculous way to talk in good faith, in my mind.” He pitched the idea that the meetings should be open.

As the conversation seemed to stall, Collins told Clark that he sensed there was nothing that could be said to allow Clark to get past his anxiety about the $2 million. As examples of what would help him get past his anxiety, Clark then appealed to the two specific suggestions he’d made: (i) to make the $2 million payment in a contingent, staggered fashion; and (ii) to make the meetings open and public.

Collins indicated that he didn’t think anyone had a problem with future meetings being public. Teall echoed that sentiment. Clark declared that for $2 million he’d be willing to buy 12 above-board meetings that are held publicly and that will take the DDA and the city toward an agreement. Collins said he thought there was no problem with that at all. Replied Clark: “I think that there has been a big problem up to this point.”

The operations committee eventually set about sketching the language of the resolution that it would bring before the full board. Collins noted that nobody had brought a resolution to the meeting and that it had depended on the dialog of the committee. Gunn focused the committee’s attention on two “resolved” clauses that needed to be written – one to allocate the $2 million and one to establish the monthly meetings. [.txt file of the draft resolution circulated later that evening by Susan Pollay, executive director of the DDA].

The resolved clauses from the draft resolution:

RESOLVED, The DDA authorizes providing the City with $2 million in fiscal year 2010/11 with the following expectations:

• The DDA and City representatives who have developed the preliminary terms will continue to meet at least once a month to complete work on an agreement that will go to the DDA and City Council for approval, and these meetings will be open to the public, but not subject to the Open Meetings Act.
• The DDA and City representatives will aim to conclude their work by October 31, 2010, but certainly no later than the end of the fiscal year 2010/11.
• The DDA will provide the City with $2 million by providing half on July 1, 2010 and the second half no later than January 1, 2011.

The DDA’s tie of the $2 million to the public process in that draft does not bind the city council to the public meetings beyond the expectation expressed in the 1991 resolution.

Coda: Beat Cops

As the operations committee discussion of the $2 million resolution wound down, Newcombe Clark brought up the issue of downtown beat cops.

By way of background, as a part of the FY 2010 budget process – which involved early retirement incentives for police officers – dedicated downtown beat patrols were eliminated in favor of an approach where police officers would spend their “out-of-the-car” time walking downtown. Officers are supposed to spend an hour out of the car for each shift anyway, and the change was to ask them to spend it downtown. Previously, there’d been dedicated patrols for downtown – often done by bicycle-mounted police officers.

Back in 2005, besides the expectation that the city council would approve the 3-Site Plan, there was an expectation that the beat patrols downtown would also be preserved – if the DDA accepted the $10 million parking agreement. From Greff’s April 28, 2010 email cited earlier:

Just so the record is clear this journey began in 2004 when the City threatened the DDA with beat officer layoffs if we did not provide financial assistance. [...]

We would increase our rent to the City by $1 million a year. The City would not have to lay off any beat cops, and the City would pass the DDA’s 3 site plan which would add to the DDA TIF capture and ensure that we could afford to make the increased payments to the city without raising parking rates or foregoing our other priorities.

At the operations committee meeting, Clark asked whether discussing the question of downtown beat patrols was considered to be inconsistent with good faith for the future conversation of the “term sheet.” He’d been told recently at the city staff level that it was counter to good faith, and said that he’d been denied some information he needed to formulate a proposal on downtown beat patrols. Clark was assured that it was not counter to good faith, and when asked by Clark, Teall indicated that she’d weigh in with city staff to get Clark the numbers he needed.

The resolution that Clark may bring to the full board next week would call for the DDA to begin reserving $60,000 a month to fund beat patrols. Initially, the money would be sourced from the $335,000 already allocated by the DDA for the north-south Howell-Ann Arbor commuter rail project (WALLY). As the resolution draft notes, the rail project has shown little progress.

Jim Curtis shows other art commissioners the location for a potential public art installation in Hanover Park, at the northwest corner of Packard and Division. (Photo by the writer.)

There’s still no word from Herbert Dreiseitl, the German artist who’s been commissioned to construct a water sculpture in front of the new municipal center at Huron and Fifth. The city has been trying to contact him about two interior pieces for the building. Katherine Talcott, the city’s public art administrator, reported that he might be coming to town in mid-April to work on the larger project, which is budgeted for nearly $740,000.

In other business, commissioners approved a set of AAPAC guidelines that have been under review – mostly by the city attorney’s office – for nearly two years.

The group also hashed out some issues related to a partnership with the Ann Arbor Downtown Development Authority. As part of its Fifth and Division street improvements, the DDA has set aside about $60,000 to spend on public art at Hanover Park, at the corner of Packard and Division. They’re asking the art commission to take the lead on that project.

Artist Selected for West Park Project

As part of major renovations taking place at West Park, AAPAC was enlisted by the city parks staff to incorporate a public art component for new “seat walls” being installed in a hill facing the bandshell. [See Chronicle coverage: "Artists Sought for West Park Project"]

At Tuesday’s meeting, Jim Curtis gave a report on the artist selection process. Thirteen artists responded to a request for qualifications (RFQ). Of those, four were interviewed by a review committee. Members of the committee are Curtis and Connie Brown of AAPAC; Amy Kuras, a city parks planner; Karen Levine, a member of the city’s park advisory commission; Shannon Gibb-Randall, a landscape artist and resident of the area; and Katherine Talcott, the city’s public art administrator.

This image is from an installation done by the artist selected to do a public art project in West Park. The selection committee has not revealed the artist's name.

Though all four artists were exceptional, Curtis said, one in particular stood out during the March 4 interviews at Gallup Park. Curtis referred to the artist as “T.R.” – the commission is not yet releasing his name, but said that he is local. The artist has extensive experience with past projects, Curtis said, adding that his artwork is unique. Talcott noted that “he’s really about creating place.”

The artist’s conceptual proposal for the site includes creating two metal “trees” at each end of the top tier of the concrete seating area. Each tree would have a circular trunk made from recycled metal, about 8-10 inches at its base and standing about 10 feet tall. Branches near the top of the trunks would also be made from recycled metal. The trees would either be painted or left natural to weather. In addition, large boulders would be incorporated into the seat walls, as well as around the base of each tree. The artist would also help the parks staff place additional fieldstone boulders in the area between the seats and the bandshell, for seating and aesthetic purposes.

The review panel will meet with the artist next week and set a timeline for meeting other milestones in the project, with the goal of having a completed design and budget – of up to $10,000 – by May 3. Curtis characterized the next phase as “we’re on the dance floor,” meaning that they’ll be working with the artist to talk about formalizing the agreement.

Elaine Sims asked if there would be give and take about the design. “We didn’t have that with Dreiseitl,” she said. Curtis assured her that there would be room for negotiation. At Sims’ suggestion, commissioners agreed that the contract would specify the first step as having the artist submit a proposal, and that he would be compensated for that work at between $500 to $1,000 – even if AAPAC decided not to move ahead with the full project.

Outcome: Commissioners approved the selection of artist “T.R.” to proceed with the West Park public art project, with no dissent.

DDA: Sculpture in Hanover Park?

Jim Curtis and Marsha Chamberlin had previously met with Susan Pollay, executive director of the Ann Arbor Downtown Development Authority. The DDA is eager to work with AAPAC, Curtis said, to install public art in Hanover Park as part of the Fifth and Division street improvement project. The DDA has already constructed a circular dais in the park. It’s about 25 feet in diameter, enclosed by a seat wall, with an empty center that’s suitable for a sculpture or plantings.

Curtis reported that a meeting he’d set up with Chamberlin and the DDA’s  project manager and architect had been postponed – that’s their next step, to get more details about what’s possible at that site. The dais could be wired for electricity, for example.

Curtis said that Pollay has asked the commission to bring a proposal, including a budget, back to the DDA board. The DDA has suggested a budget of $60,000 – including $10,000 set aside for administrative costs. Curtis said there’s flexibility in that amount, noting that the DDA has earmarked about $300,000 for public art in total for the street improvement project and the Library Lot underground parking structure. This amount is separate from the city’s Percent for Art program.

Margaret Parker, AAPAC’s chair, said there are some questions that need to be answered. For example, if Katherine Talcott writes the RFP for the project, who’s paying for her time to do that? Who would pay for someone to administer the selection process? Parker also said they need to form a task force that includes members of the public, because the sculpture will be “a very public piece.”

Chamberlin asked her colleagues what their understanding is about how AAPAC will work with the DDA. “That’s the big question,” Parker replied. “That’s the big question.”

Chamberlin likened it to the expertise of AAPAC being on loan to the DDA for this project. The DDA expects to pay for that, she said. But does the project also have to go through AAPAC’s usual vetting process? She said that she and Curtis don’t think that it should.

The DDA wants AAPAC to come up with a proposal and budget that the DDA board can vote on, Curtis said. “They want to work with us, and they want us to lead the way.”

Parker said that everything needs to be written down, to clarify the process. She wanted to know how much time and energy AAPAC members would be putting into this project, because that’s time and energy they won’t be able to put into other efforts.

Curtis said his vote would be to charge forward with the project. “How many times in life do you have a partner willing to pay for something wonderful?” he asked. It’s also a project that offers more latitude, since it’s not constrained in the same way that Percent for Art funding is. [The artwork from the Percent for Art program must relate thematically to the fund which is paying for the project. Artwork funded from the street millage, for example, would need to relate to transportation.]

Curtis also noted that this is the first project in what will likely be a long partnership with the DDA – it’s another reason to move ahead, he said.

Parker clarified that it wasn’t the first time they’d partnered with the DDA. AAPAC took the lead on a $30,000 renovation project of the Arch in the Kerrytown Sculpture Park, funded by the DDA. AAPAC got no credit for that, she said, despite the number of hours that she and Curtis invested. Before AAPAC took on a project for the DDA, she said, commissioners needed to know if it was something they were capable of doing, given their other obligations.

Dreiseitl, Other Municipal Center Artwork

In giving an update on Herbert Dreiseitl’s work for the municipal center, Katherine Talcott said there was nothing new to report – the German artist hadn’t yet responded to queries about two interior pieces, and “time is running close,” she said, as construction of the center moves ahead.

Though Dreisetl had originally been asked to propose three art installations – a large outdoor water sculpture, and two wall pieces – his budget for the design work (at $77,000) and the sculpture alone (nearly $740,000) exceeded the entire original amount of $750,000 designated by AAPAC for all three pieces. However, AAPAC asked for some design modifications and a revised budget for the two interior pieces – that’s the information that hasn’t been forthcoming.

Elaine Sims asked Talcott whether it reflected a lack of interest on Dreiseitl’s part. Talcott said she really couldn’t say.

Meanwhile, Talcott said, the contract for the sculpture is being finalized – it’s a contract with Quinn Evans, the Ann Arbor architectural firm that’s handling the project and working with Dreiseitl.

Margaret Parker reported that the municipal center task force for public art is now focused on artwork for the north courtyard of the site, and she’s working with Talcott to draft requests for proposals for two works in that location. One of the requirements will be that the artists must reside full-time in Michigan.

Marsha Chamberlin asked what had been decided about the mosaics by Gerry Kamrowski, which had previously been installed at city hall. They’ve been removed as part of the construction currently underway at that site.

Parker said the task force was still looking for a place to install the artwork within the new municipal center site, but if they can’t, they’ll take steps to decide where it should go. Chamberlin suggested it might be a good fit for the north courtyard, along Ann Street. When Parker pointed out that it would need to be in a place protected from the elements, Chamberlin replied that it would be cheaper to construct a shield for an existing piece of art than to commission a new piece.

Elaine Sims noted that Kamrowski fit the requirement of being a full-time Michigan resident. “He’s dead!” Chamberlin said. Yes, Sims said, he is.

Public Art Survey

Marsha Chamberlin presented a draft of an online survey, which will be used to gauge awareness of public art and to get feedback. The survey asks whether respondents have seen existing public art in this region, including the Wave Field on the University of Michigan’s north campus and the Heidelberg Project in Detroit, among others. It asks for feedback on statements like “Public art helps define our community” and “Michigan artists should get preference in public art projects.”

The link to the survey, when completed, will be posted on the city’s website and emailed to groups like the Arts Alliance.

Discussion of the survey led to another topic that has been unsettled for several months: When to hold a public forum, and what kind of event that should be.

Margaret Parker, AAPAC’s chair, wanted to include a date in the survey for a public forum. Other commissioners said they weren’t ready to commit to a date at this point, since they hadn’t yet determined what kind of event they will hold.

Parker also pointed out that there was nothing in the survey to get public input on AAPAC’s annual plan. Chamberlin said the intent of the survey was to guide the commission regarding what they’ll do next – to let people tell AAPAC what they want. Curtis agreed, saying the survey was another way to communicate and connect with the community.

Parker said she thought that the survey was being planned in conjunction with an event, where the survey results would be revealed. She pointed out that they’d been talking about projects for over two hours during Tuesday’s meeting, and that these were the kinds of things that people wanted to know about.

Talcott noted that Herbert Dreiseitl might be in town on April 13, 14 and 15. Though she stressed that it wasn’t confirmed and that even if he did come, he might not have time for a public event, it might be possible, she said, to plan an event related to his visit. The other option would be to feature the West Park artist, Talcott said.

Annual Plan

Elaine Sims gave a report of the planning committee, focused on AAPAC’s annual plan. There was some confusion over whether the annual plan meant the commission’s organizational plan for the year, or whether it referred to the annual art plan that AAPAC must submit to city council in April as a requirement under the Percent for Art ordinance.

Sims clarified that the plan she was presenting was a list of things that AAPAC needed to do in order to make its annual public art plan. She noted that action items were top-heavy at the beginning of the calendar year, but light from October through December. It might be worth shifting things around, she said.

Margaret Parker said that some things can’t be shifted, such as the report to city council. She noted that it was already March, but they haven’t taken any of the steps required for the annual art plan, which is due in April.

Jeff Meyers suggested that Sims identify which items could be moved to other times during the year, and which ones needed to occur at a specific time. That would help in reviewing their options.

Sims said the planning committee would make revisions and bring it back to AAPAC at a future meeting.

Gifts of Art

Garo Kazan, a local artist, offered to give the city a bronze horse sculpture that he made – he raised this possibility more than a year ago. Katherine Talcott reported that she’s putting together a gift review panel to evaluate the sculpture. So far, confirmed members of the panel include Ellie Serras, as a community representative; Lou Marinaro, a local sculptor; and Cresson Slotten, a city engineer and project manager.

Talcott also presented commissioners with a draft worksheet for prospective donors who offer gifts of art to the city. Items requested from the donor include a current appraisal of the artwork’s value, as well as a maintenance budget; a letter of authentication from the artist; and background on the artist’s significance, among other things.

The commissioners were asked to review the worksheet and give feedback at a future meeting.

Commissioners present: Marsha Chamberlin, Jim Curtis, Jeff Meyers, Margaret Parker, Elaine Sims. Others: Katherine Talcott, Jean Borger, Shary Brown, Brad Mikus

Absent: Connie Brown, Cathy Gendron, Cheryl Zuellig

Next regular meeting: Tuesday, April 13 at 4:30 p.m., 7th floor conference room of the City Center Building, 220 E. Huron St. [confirm date]

The DDA board talked about more than just the budget. Who was that map man? As the nameplate says, it's DDA board member Keith Orr, who was introducing a draft of a bicycle map that the DDA is working on. (Photos by the writer).

Deliberations covered a range of issues. First, the budget needs to accommodate two major DDA capital projects: the underground parking garage currently under construction; and the Fifth Avenue and Division Street improvements, which are also underway.

Second, there’s a contingency written into the budget for $2 million. The contingency is there in case renegotiation of the parking agreement between the city and the DDA results in a continuation of the $2 million payments made by the DDA to the city for each of the last five years. Continuation of the payments is not legally required under terms of the current agreement, which assigns responsibility for administration of the city’s parking system to the DDA through 2015.

Third, the fund balances of the DDA – which reflect the DDA’s reserves – face a dramatic reduction. That’s an issue that city of Ann Arbor CFO Tom Crawford flagged back in the spring of 2009 during discussions about the construction of the underground parking garage. The concern caused the city council to scale back the size of the garage by 100 parking spaces.

And finally, decisions made by the DDA board over the last year have resulted in re-direction of revenues from two surface parking lots – 415 W. Washington and the old YMCA lot at Fifth and William – to the city of Ann Arbor. That has resulted in the elimination of line items for DDA programs for next year that were in this year’s budget.

Besides the budget, the board also discussed a number of other topics, including development of the Library Lot and results from two parking surveys.

We begin with background on the four funds that make up the DDA budget, and a discussion of reserve levels.

DDA Budget: The Four Funds

The DDA’s budget is divided into four funds: TIF (tax-increment finance), housing, parking, and parking maintenance.

DDA Budget: TIF Fund

Desposits to the TIF fund come from property taxes collected within the DDA district. It’s a tax-increment finance (TIF) district, which means that property taxes are collected on the difference between the baseline value of a property when the district was established and the value of a property after improvements. The Ann Arbor DDA TIF “capture” is on the value of the improvements at the point they are made, and does not include subsequent increases in property value due purely to market forces.

To illustrate how TIF works, consider a property that has a taxable value of $100,000 to start. Suppose the owner builds on the property so that its taxable value is $1,000,000. That $900,000 increment is the amount on which the DDA’s tax capture is based. Now suppose the property adds value at $10,000 a year for 10 years due to ordinary real estate market conditions. So after a decade, it has a taxable value of $1,100,000. Each year, the Ann Arbor DDA’s tax capture is based on the same $900,000. So in the 10th year, the basis of the DDA’s tax capture would not include the first $100,000 or the $100,000 by which the property had increased over the years.

DDA Budget: Housing Fund

The housing fund gets its deposits through transfers from the TIF fund. It was created in 1997, and historically the amount of the annual transfer has been $200,000. At the board’s February 2010 meeting, Sandi Smith summarized activity in the housing fund over the last decade:

Smith reported that in the last 10 years, 23 grants had been awarded and that the average amount of those grants had been around $80,000. Of the 23 grants, 11 had gone to one nonprofit – Avalon Housing. A total of $1.1 million from the housing fund had been obligated, Smith said. The breakdown of those dollars: (i) $400,000 for Village Green’s City Apartments project at First & Washington, contingent on issuance of a certificate of occupancy; (ii) $207,000 for the third year of a grant to Avalon; and (iii) $400,000 to $500,000 for Near North.

The Village Green project Smith mentioned in that summary is a planned unit development (PUD) proposal by Village Green Residential Properties LLC at the corner of First and Washington, across from the Blind Pig, which includes 156 dwelling units and 244 public parking spaces. The city council approved the project on Dec. 1, 2008.

At its May 18, 2009 meeting, the council authorized an extension of terms in order to give Village Green more time to arrange financing. From the cover memo accompanying the resolution:

In order to complete this project the Developer has requested an extension of the term of the Option Agreement until December 30, 2009. Staff recommends approving this extension plus authorization for two three-month extensions at the City Administrator’s discretion. We expect this amendment to provide the developer sufficient time to complete their financing arrangements and close on the sale of the property.

The extension is now covered under the first of the three-month extensions that can be made at the city administrator’s discretion. The city has already factored $3 million of proceeds from the land sale into its financing plan for the new municipal center under construction at Fifth and Huron.

If the City Apartments project were not to go forward, the $400,000 in the DDA housing fund that’s committed to the the project would be freed up, along with the projected $9 million it would take to build the parking deck component of the project.

DDA Budget: Parking Fund

The parking fund gets its deposits from the city’s parking system, which the DDA administers under an agreement with the city. The agreement was revised most recently in 2005, extending 10 years, through 2015. The DDA contracts out the management of the system to Republic Parking. The terms of the city-DDA agreement on parking provide for a $1 million payment by the DDA to the city per year, including an option for the city to ask for up to $2 million in any given year – with the condition that the total amount of payments through 10 years not exceed $10 million.

Rob Aldrich, who was a DDA board member in 2005 when the parking agreement was struck, raised a concern about the possibility that the city would ask for $2 million in each of the first five years of the agreement. From the board minutes of the March 2, 2005 meeting:

Mr. Aldrich asked if it would be possible for the City to draw the full $10 million in the first 5 years; Mr. Solo said yes. Mr. Aldrich asked what would happen in year six, which is to say, would the City be satisfied to receive no further rent for the remaining five years. There was no response to this question.

As it turns out, the city asked for and received $2 million from the DDA for the first five years covered by the agreement. The current status of the negotiations between the city and the DDA to revise the parking agreement has been an ongoing topic for the last year at DDA board meetings, and factored significantly into deliberations on the DDA budget on Wednesday.

DDA Budget: Parking Maintenance Fund

The parking maintenance fund gets its deposits through transfers from the parking fund. The amount of those deposits per year is based on an inspection of the parking structures by an engineering firm, which estimates required maintenance over the next 20 years. That includes fixing rips in protective coatings, and repair of cracks to prevent seepage.

DDA Budget: Fund Balances (Reserves)

The DDA’s 2010-11 budget shows total fund balances dropping from $8,865,473 at the start of the year to $3,414,486 by the end. At Wednesday’s meeting, Roger Hewitt, who chairs the operations committee, attributed the bulk of the drop to down payments on two major capital projects: the underground parking garage at the Library Lot site, and the Fifth and Division streetscape improvements, which are both now underway.

In the 2010-11 budget, those expenditures are listed under “capital costs” in the amount of $2,796,507 from the parking fund and $2,020,753 from the TIF fund.

The DDA 10-year plan forecasts reserve levels dropping to their lowest point of $1,130,000 in the 2012-13 budget year, which is 5.65% of annual recurring expenses. After that, they’re projected to increase, as the new parking spaces being built start to generate revenue and rate increases begin to take effect.

The appropriate level of reserves for the DDA budget was a topic that drove city council discussion when the underground parking garage was approved last year, and ultimately led to the elimination of 100 spaces from the design.

From the Feb. 17, 2009 Ann Arbor city council meeting:

Crawford reported that on looking at the DDA’s financial picture, he noticed that they don’t have a minimum reserve policy. He said he generally used 15-20% as a minimum reserve. In light of the need to maintain adequate reserves, he said that in his view the project is “not affordable with the plans they have.”

The proposed structure would occupy area under Fifth Avenue. But [councilmember Carsten] Hohnke expressed concern that the cost of an extension along Fifth Avenue southward past the southern edge of the library lot all the way to William Street (part of the current plans) didn’t offer commensurate value for the investment. He was concerned that the cost would constrain the DDA in making other needed investments. He said that while there’s no doubt more space is required, he thought that the roughly 770 spaces to be built exceeded what’s required.

Hohnke then proposed an amendment that would slightly reduce the scope of the project, by whittling around 100 spaces off the total through eliminating the Fifth Avenue extension all the way to William Street. Even the reduced number of spaces would represent roughly a 10% increase in the 5,000 spaces currently in the city’s off-street parking inventory, Hohnke said.

Queried by Mayor John Hieftje, Hohnke said that cost savings of removing the 100 spaces would be around $6 million.

At the time, DDA board members were reluctant to accept Crawford’s assessment of appropriate reserve levels – reasoning in part that the city itself had no set policy specifying a reserve amount at that level. From The Chronicle’s coverage of the DDA board’s March 4, 2009 meeting:

[DDA board member, Leah] Gunn recounted how at council’s Feb. 17 meeting Tom Crawford, Ann Arbor’s chief financial officer, had expressed concern about the DDA’s fund balances. She said that the city of Ann Arbor had no policy on fund balances and that she thought the DDA’s finances were perfectly healthy.

However, on the fund balance issue, then-councilmember Leigh Greden wrote in an email sent on March 7, 2009 to Susan Pollay, executive director of the DDA, as well as to DDA board members Jennifer S. Hall and Leah Gunn:

I understand there has been some discussion at the DDA that the City does not have a minimum reserve policy similar to the one Tom Crawford has been recommending for the DDA. In fact, the City DOES have a minimum reserve policy, and has had such a policy – in writing – for years. The policy has been printed in the City’s Budget for years, and reads as follows:

The City shall “maintain an undesignated General Fund balance with a minimum range of 8% to 12%; provided that when necessary use of these funds occurs, subsequent budgets will be planned for additions to fund balance to maintain this standard over a rolling five-year average.”

Tom Crawford has repeatedly urged the City to exceed this policy by maintaining an undesignated General Fund reserve of 15%. Consistent with Tom’s recommendations, the City has exceeded our policy by maintaining an undesignated General Fund reserve of 15-20%. The existence of this policy and our success in exceeding the policy is one of the reasons that TWO ratings agencies upgraded the City’s bond ratings in late 2008. These higher bond ratings result in lower interest rates for bonds issued for City projects – including DDA projects. This is the background for Tom Crawford’s request that the DDA adopt a similar policy requiring a fund balance of 15%.

The policy that Greden cited is No. 7 on a list of 10 short-term financial goals in the city’s FY 2010 budget book.

Budget Discussion

With that background, then, here’s how the budget deliberations unfolded. The topic was broached first during public commentary.

Budget Discussion: Public Comment

Brad Mikus addressed the board about the proposed 2010-11 budget and noted several concerns that led him to conclude that “it’s a tight budget.” Among those concerns was a budgeted total revenue of over $16 million for the parking system, when revenues over the last 12 months had been only $14 million. In addition, Mikus pointed out that the budget relied on an increase in tax-increment finance (TIF) district revenues from $3.54 million to nearly $3.8 million, or by 7%. He told the board that it appeared the budget would only be met if things “worked out exactly right.” He thus encouraged the board over the next 12-18 months to look closely at the actual revenues as they came in.

Board Budget Deliberations: Part 1

Hewitt led off by noting the budgeted drop in fund balance from $8,865,473 at the start of the year to $3,414,486 was due to the two major capital projects started this year: the underground parking garage at the Library Lot and the Fifth and Division streetscape improvements. In the 2010-11 budget, those expenditures are listed under “capital costs” in the amount of $2,796,507 from the parking fund and $2,020,753 from the TIF fund.

Responding to Mikus on the question of TIF  and parking revenue, Hewitt said that the TIF estimates came from the city of Ann Arbor. The increase in parking revenues, Hewitt said, would come as a result of a rate increase that will go into effect on July 1, 2010. [Those increases are part of a series of already-approved incremented rate increases that started in July 2009 and will ultimately see hourly rates in parking structures of $1.10 by 2012.]

Hewitt described how the total reserves over the next three years would be relatively low, reaching their low point in 2012-13. That low is based on the projections of the 10-year plan putting the total fund balance at $1.13 million  – a number that does not include the housing fund balance. After that low in 2012-13, the 10-year projections show total fund balances (minus the housing fund balance) of $2.8 million in 2013-14, $4.5 million in 2014-15, and $10 million in 2015-16. [The housing fund balance is not considered available for other use and is thus not counted in the reserve.]

Hewitt noted that they would be cutting back on some programs, given the “relative tightness” of the fund balances. First, he said, for the next year and possibly for the next two years, transfers to the housing fund out of the TIF fund would be reduced from $200,000 to $100,000. The balances in the housing fund, said Hewitt, would be made up following that three-year period.

The housing fund balance, observed Hewitt, would be about $1.3 million, even with the reduced transfer. Hewitt also observed that historically, the DDA had found it difficult to find places to invest housing fund dollars. Board member Russ Collins noted that it was a way of being “prudent with funds,” as Brad Mikus had suggested during public commentary.

Sandi Smith, a board member who also represents Ward 1 on city council, objected to the strategy on the grounds that there was no mechanism for ensuring that the housing fund balances would be restored as Hewitt had described. She suggested a separate resolution laying out how that would happen. She noted that most of the money in the housing fund was already encumbered in different ways, even though it hadn’t been spent. The unencumbered fund balance, said Smith, was only $200,000. She allowed that it had been difficult to find ways to spend housing fund dollars, but said that it was also important to restore it.

Board member Leah Gunn weighed in, saying that the board could always restore the funding if there were a project where it was needed, if someone brought a proposal to the board. The next couple of years, however, they would need to be “on a diet” in terms of spending discretionary income. For the next couple of years, though, Gunn said she felt it should stay the way it was – reduced to $100,000.

Hewitt, picking up on Smith’s point about the housing funds being encumbered, said that around $400,000 of that was encumbered by Village Green’s City Apartments project at First & Washington, which had no clear indication of when it would be started or completed – the housing fund payment will not be required until certificates of occupancy are issued. Hewitt felt like the board would be past the tight period by the time that $400,000 would need to be paid.

Responding to a query from board member Newcombe Clark via speaker phone, Hewitt said that the DDA’s responsibility was to pay for a 250-space parking structure that will be built on the bottom floors – $9 million upon certificate of occupancy. Hewitt said that for budgeting purposes that money would be needed 2.5 years from now – the time it would take if it were to start immediately.

Besides the $100,000 reductions in the housing fund transfer, other programs would be reduced, said Hewitt, including: Phase II of the energy grant program would be reduced from $250,000 to $0; grants to the four merchant associations would be reduced from $75,000 to $0; travel to the International Downtown Association conference would be reduced by $15,000.

Board member Jennifer S. Hall asked whether those items had been assumed to remain constant, when the DDA board approved the budget for the underground parking garage.

The conversation with Hewitt and Russ Collins yielded some uncertainty about what had been forecast in conjunction with the parking garage, but Hall returned to the idea that promises had been made about what would remain constant. What was it that had changed, she asked, that had resulted in the reductions?

Joe Morehouse, deputy director of the DDA, allowed that one unexpected shift in revenue had been from the 415 W. Washington parking lot, as well as revenues from the old YMCA lot at Fifth and William. [The city council requested and received approval from the DDA board to direct net revenues from those lots to the city. The council's action on 415 W. Washington came at its June 15, 2009 meeting, and action on the Fifth and William lot came at its Dec. 21, 2009 meeting. The ballpark numbers for revenues to the city from those two lots are $100,000 from the Fifth and William lot and $70,000 from the 415 W. Washington lot.]

Hall characterized the DDA’s actions, agreeing to direct those additional revenues to the city, as confirming it “after they asked for it.” She stressed that she wanted everyone to understand why the DDA board was forced to reduce its programs in the coming year.

For her part, Sandi Smith said that the energy grant and the housing fund reductions gave her pause. The $350,000, she said, did not make that big of a difference. She said she did understand that if a proposal came up, money could be moved into the housing fund. With respect to the energy grants, however, she felt it was an essential program. She noted that for Phase II of the program last year, the program had required only $58,000. [Phase I is an energy audit phase, while Phase II is implementation of recommendations from the audit.] Fifteen buildings had installed $138,000 worth of improvements – of which the DDA had paid just $58,000 – which would save $25,000 a year, she said. She emphasized that it was “direct dollars stimulating private investment in the downtown,” and that was core to the mission of the DDA. For that reason, she said, she was reluctant to see that disappear.

Board Budget Deliberations: Restoration of Phase II Energy Grants

Smith thus moved a resolution to restore $100,000 for Phase II of the energy grant program. The motion was seconded by Keith Orr. Weighing in by speaker phone, Newcombe Clark seemed to be in favor of putting all the funds back, including the merchant association allocations. Clark pointed out in the interest of full disclosure that he was no longer president of Main Street Area Association board.

John Mouat drew out from Hewitt the fact that concern for the minimum fund balance had driven the decision, and that all areas of the budget had been examined.

Orr weighed in for reductions in amounts as opposed to outright elimination of the items from the budget. He agreed with Smith that the energy grants were part of the DDA’s  core mission. He also acknowledged his ongoing association with Kerrytown District Association, which is one of the merchant associations that the DDA has historically funded.

Leah Gunn noted that the $9 million for the parking deck in connection with Village Green’s City Apartments project would not be spent for a very long time, as well as the $400,000 for the affordable housing grant. Hewitt cautioned that tomorrow they could announce that they’re going “full blast” and the DDA would need to meet those commitments.

Russ Collins said he supported his partnerships committee co-chair 100% – that’s Sandi Smith. From a practical point of view, said Collins, the DDA could make good use of the energy grant money. On procedural grounds, Collins objected to the fact that the operations committee had effectively made a policy decision on behalf of the partnerships committee. A reduction would have had a budget impact, Collins said, but the elimination amounted to a policy impact. About seeing the budget, Collin said, “It’s terrible to be surprised, and that’s a surprise.” Collins characterized adding another $100,000 to the deficit is “not extremely imprudent.” But picking up on Gunn’s comment, he said that assuming the $9 million won’t be spent was imprudent.

Collins allowed that the elimination of funds supporting the merchant associations had received a lot of discussion over the years, so the elimination of those didn’t bother him at all. He didn’t want to be “looped into” the sentiments in favor of keeping financial support for the merchant associations.

Jennifer S. Hall said she supported Smith’s amendment, but wanted to contemplate another one that would restore the other funds after voting on Smith’s proposal.

Mouat returned the conversation to the fund balance, expressed as a percentage of annual recurring operating expenses. Hewitt said the city wanted to see 15%, while Morehouse said he was looking to preserve 5%.

Smith echoed Collins’ sentiments that there could have been better communication from the operations committee. Board chair John Splitt clarified that when the operations committee had discussed the energy grants, they’d talked  about whether the money would actually be spent. They did not feel it would affect what would happen “on the ground,” Splitt said. At that point, Gunn called the question.

Outcome: The amendment to restore $100,000 to Phase II energy grants was approved, with Clark and Hewitt dissenting.

Board Budget Deliberations: Reduction of $2 million Contingency for the City

In following up on the intention she’d expressed to bring an additional amendment forward, Jennifer S. Hall proposed that the $2 million budgeted as a contingency for the city of Ann Arbor should be reduced to $1.65 million, with the balance of $350,000 allocated to the DDA programs that had been slated for elimination. The amendment was seconded by Newcombe Clark.

Hall noted that Joe Morehouse had indicated the change in the financial picture necessitating those eliminations had been the re-direction of parking lot revenues – from 415 W. Washington and Fifth and William – to the city of Ann Arbor. The $2 million contingency was there, she said, in order to accommodate a revenue request from the city. The revenue from those parking lots, she said, should be credited towards that $2 million.

Russ Collins cautioned that just because a line item has existed in a budget in the past does not mean it should exist in the future. Collins noted that the DDA’s “mutually beneficial” committee was in a good faith process with some good work already done, and that the resolution, he felt, would undermine that work. Leah Gunn told Collins that she did not want to see the negotiating position of the “mutually beneficial” committee weakened.

Hall recounted how the DDA had made a good faith effort to negotiate and how the city council had not followed up.  From a December 2009 Chronicle article: “City-DDA Parking Deal Possible“:

• Jan. 20, 2009: City council passes a resolution asking the DDA to begin discussions of renegotiating the parking agreement between the city and the DDA in a mutually beneficial way.
• March 4, 2009: DDA board establishes a “mutually beneficial” committee to begin discussions of the parking agreement between the city and the DDA. On the committee: Roger Hewitt, Gary Boren, Jennifer S. Hall, and Rene Greff. The DDA’s resolution establishing their committee calls on the city council to form its own committee.
• May 20, 2009: During the mid-year DDA retreat, mayor John Hieftje states publicly that city councilmembers object to Jennifer S. Hall and Rene Greff’s membership on the DDA’s “mutually beneficial” committee.
• June 3, 2009: DDA board chair Jennifer S. Hall removes herself from DDA’s “mutually beneficial” committee, replacing herself with Russ Collins.
• June 15, 2009: Mayor John Hieftje nominates councilmembers Margie Teall (Ward 4), Leigh Greden (Ward 3) and Carsten Hohnke (Ward 5) to serve on the city council’s “mutually beneficial” committee, and they’re confirmed at the city council’s July 20 meeting.
• July 1, 2009: DDA board chair Jennifer S. Hall appoints Sandi Smith to replace outgoing DDA board member Rene Greff (whose position is filled with Newcombe Clark) on the DDA’s “mutually beneficial” committee. Smith is also a city councilmember, representing Ward 1.
• August-December 2009: Sandi Smith, the chair of the DDA’s “mutually beneficial” committee, reports at each monthly DDA board meeting that there is nothing new to report.
• Dec. 5, 2009: Dissolution of the DDA is included in an “everything is on the table” list for discussion at the city council’s budget retreat.

Her position all along, said Hall, was that the arrangement needed to be mutually beneficial.

For his part, Clark noted that the contingency was simply there as a tool. “We’re not removing anything. It’s arbitrary.” Clark said he was not going to be in favor of cutting programs until the board understood exactly what the city was requesting: “It needs to be off the table until it’s on the table.”

Joan Lowenstein noted that the $2 million is not an arbitrary amount – it is the amount that has been paid under the parking agreement for the last five years. Lowenstein rejected Hall’s contention that the revenues from the 415 W. Washington and Fifth and William lots should count towards the $2 million, saying that those were”separate pools” and not a part of the same negotiation. Separate decisions were made on a separate basis, she said. The resolution, Lowenstein feared, would show that the DDA board was trying to “play games” with the city council.

Gary Boren, who also serves on the DDA’s “mutually beneficial” committee, said he was sympathetic to Russ Collins’ point of view about the resolution potentially undermining the committee’s work. However, it hurt the DDA when they had to cut programs that were working, he said. Boren noted that the DDA did not need to back off of the $2 million, but that the resolution would make clear to the city council that “this will take some skin out of us.”

Gunn expressed disappointment that the merchant associations did not report back about how they’d spent their money. Keith Orr responded by noting that a representative from the Kerrytown District Association had addressed the DDA board [at its Feb. 3, 2010 meeting] on that subject. Orr also suggested that the idea of “mutual benefit” could be replaced by “mutual sacrifice.”

Smith said she appreciated the spirit of the resolution, noting that the window display contest money was an example of a small amount of dollars that could go a long way.

Russ Collins called the question.

Outcome: Hall’s resolution to reduce the $2 million contingency by $350,000 failed, getting support only from Hall, Clark, and Boren.

Overall outcome: The budget was approved with support from Boren, Collins, Gunn, Hewitt, Lowenstein, Mouat, and Orr. Voting against it were: Hall, Clark, Smith, and Splitt.

Development Issues

The DDA board meeting included a variety of issues related to new development in the downtown area.

Library Lot

In August of 2009, the city of Ann Arbor issued an RFP for development proposals for the top of an underground parking garage currently under construction on the city-owned Library Lot, between Fifth Avenue and Division Street just north of the Ann Arbor District Library. At its Wednesday meeting, the DDA board got updates on construction and planning for the top of the structure.

Reporting out from the capital improvements committee, John Splitt gave an update on the construction of the underground parking structure along Fifth Avenue. Earth retention preparation work was nearly complete on the “dogleg” – the section of the lot abutting Division Street. [The work consists in part of drilling large holes deep into the ground and inserting steel beams into those holes.] That means people will start to see “real digging” as soon as next week, Splitt said. [As of Thursday, March 4, digging in earnest seems to have commenced, based on Chronicle observation.]

Bid package #3, Splitt reported, which is for the concrete and steel work, would be opened publicly at 2 p.m. in DDA offices the following day. [The bids will first be reviewed for numerical accuracy. Then any conditions specified by the contractors checked, and interviews will be held with the lowest three bidders to review the scope of work – a meeting for that is scheduled on Tues., March 9.]

In his report out from the Downtown Citizens Advisory Council, Ray Detter said that the DCAC opposed the placement of a large park on top of the Library Lot, where the underground parking garage is being constructed. [The two open space proposals submitted in response to the city's RFP have since been set aside for further consideration by the committee: "Two Library Lot Proposals Eliminated"] The DCAC did, however, support the idea of taking the next two years to plan that entire area of the downtown, said Detter.

Reporting out from the Library Lot RFP review committee, John Splitt said that Ann Arbor city administrator Roger Fraser had not yet hired a consultant who would be examining the financial aspects connected with the two proposals that are being given further consideration by the committee.

Sandi Smith noted that the RFP schedule was designed so that if a decision were made to move ahead with a particular proposal for development, changes in the design of the underground structure could be undertaken. She noted that the window of opportunity seemed to have been missed by now, and wondered if that did not perhaps remove some of the timing pressure to get to a decision. Susan Pollay, executive director of the DDA, confirmed that the parking garage was “on its way” now as designed. However, she pointed out that the design teams of the two remaining proposals under consideration were very familiar with the underground parking garage design, and that they would be able to accommodate their projects to its design.

Jennifer S. Hall inquired about the possibility that the extra supports designed into the underground garage – so that something could be built on the top of the underground garage – could be stripped out. [Proposers of a public gathering space, the Ann Arbor Community Commons, have called for such a strategy in order to free up money to pay for implementation of their commons.] Pollay told Hall that stripping out those supports would actually entail re-engineering the design of the garage and would, in fact, add cost.

Zingerman’s Expansion

In his report out from the Downtown Citizens Advisory Council, Ray Detter called the board’s attention to a public participation meeting for a proposed expansion of Zingerman’s Deli operations scheduled for March 8 at the deli, 422 Detroit St., starting at 5 p.m. Zingerman’s plan generated “heated discussion” at DCAC, said Detter. The deli is located in the Old Fourth Ward historic district. He said they agreed that Zingerman’s is an essential part of the community, but that they needed to make sure there’s not a precedent set that would undermine planning. The decision needed to be oriented around the city’s planning documents: the downtown plan, the central area plan, and the historic district.

Downtown Zoning and Design Guidelines

In remarks made at the end of the meeting during a time allotted to bring up other DDA business matters, Roger Hewitt expressed some frustration about the city council’s appointment of a task force charged with the responsibility of establishing design guidelines for downtown zoning. By way of background, Hewitt had served on the A2D2 steering committee that oversaw a years-long rezoning process, along with city councilmember Marcia Higgins, and Evan Pratt, of the planning commission.

City council ultimately approved the downtown zoning amendments, but did not enact the design guidelines, pending completion of a design guideline package that would include some kind of mandatory process with voluntary compliance. [See Chronicle coverage: "Downtown Planning Process Forges Ahead: New zoning approved, design guides will take longer"]

At the February 2010 DDA board meeting, Hewitt’s remarks showed that he had not been kept apprised of the fact that the A2D2 committee had been dissolved, after the city council had approved the rezoning component but before the design guidelines were completed:

In reporting out from the A2D2 oversight committee on which he serves, Roger Hewitt stated that the last meeting had been canceled and so he had nothing to report.

Later in the meeting, John Hieftje told Hewitt that the A2D2 oversight committee had actually been dissolved. This seemed to come as news to Hewitt, who said simply, “Oh!”

Said Hewitt about the design guidelines: “Apparently we’re going to revisit the entire process.” He noted that there was no representation from the DDA on the design guidelines task force, even though it would have a “profound impact” on the downtown area. Russ Collins wondered how that might be best addressed. Hewitt responded with humor, suggesting that he might talk to any councilmembers that Collins might know, who might be sitting next to him – the allusion was to Sandi Smith, who serves on the city council, representing Ward 1, in addition to serving on the DDA board. Smith and Collins co-chair the DDA partnerships committee.

In his report out from the Downtown Citizens Advisory Council earlier in the meeting, Detter said that they were glad to see the city council appointment of a task force to look at the design guidelines that will accompany the A2D2 rezoning of the downtown. That task force would be led by councilmember Marcia Higgins, he said, with Wendy Rampson (the city’s head of planning), Kevin McDonald (senior assistant city attorney), Kirk Westphal (planning commissioner), as well as Norm Tyler, Peter Pollack, and Tamara Burns. Detter said that out of the task force’s work they expected to get a system of required compliance with a process, including a review by a design board, and voluntary compliance with the outcome of that process.

Parking Surveys

Roger Hewitt reported on two surveys – one conducted online as part of the DDA’s effort to gauge public opinion about parking issues in preparation of a report it will make to the city council in April.

Online Parking Survey: Principles and Implementation

The online survey ran for 10 days between Feb. 9, 2010 and Feb. 19, 2010 and received 1,283 responses. Of those respondents, 73% reported being Ann Arbor residents, while 27% reported being non-residents. Almost an equal number of residents – 41% and 40%, respectively – reported being 51-71 years old and 31-50 years old.

Hewitt said there was “strong alignment” with the basic principles the DDA used, but more divided opinion about the specific implementation of those principles. For example, there was a 17-17 split between positive and negative comments on the investment in the underground parking structure. And support for some specific policies depended on respondents’ use of parking services: 59% of parking permit holders supported improving bicycling infrastructure, while low-frequency parkers supported it at an 81% rate.

Of the 54 respondents who weighed in on extended evening meter hours, 85% wanted evening parking to remain free. About the new e-park system, 61 respondents commented on the machines, and the written summary indicates that frustration was expressed about the “speed of the machines, screen visibility and reduced convenience and ease.”

On-Street Parking Survey: e-park

A second, on-street survey described by Hewitt at Wednesday’s meeting targeted e-park users specifically. Users of e-park stations on State, Liberty, Detroit, and Main streets were surveyed between Feb. 19 and Feb. 25 – 95 people responded. Hewitt characterized those responses to the survey as “pretty overwhelming” on the positive side, with 91.4% of respondents characterizing the machines as very easy, easy, or somewhat easy to use.

Hewitt also mentioned that paying by phone was not described by respondents as useful, perhaps because many of them indicated that they did not know it was an option. Hewitt suggested that some marketing work could be done on that. [.pdf of e-park survey results]

How useful are the following e-park features:
                                                   Don't Know,  Response
                    Very useful Useful Not useful  Never Used   Count           

Pay by credit card    61.1%     29.5%     0.0%       9.5%        95
Pay with coin         38.7%     53.8%     1.1%       6.5%        93
Add time at any epark 57.0%     24.7%     4.3%      14.0%        93
Pay by cell phone     20.4%     10.8%     8.6%      60.2%        93

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Other Business

The board heard a number of other reports and comments.

Wireless Washtenaw

Reporting out from the partnerships committee, Sandi Smith told the board they’d received a presentation on Wireless Washtenaw from Tom Crawford, the city of Ann Arbor’s CFO. Smith said that Crawford had explained that the priority for the rollout of wireless high-speed Internet access had been in rural areas, where there was currently no access at all. [James McFarlane, who manages Washtenaw County's information technology operations, gave county commissioners an update recently on the status of the Wireless Washtenaw project.]

Smith also reported that Crawford had told them about another possibility for wireless access. There’s potential that the bandwidth made available by TV stations previously used to broadcast an analog signal could eventually be available for wireless Internet connectivity.

DDA Board Retreat

Roger Hewitt announced that the DDA retreat had been scheduled for March 16 with the gathering for lunch starting around “noonish.” The retreat will be held at the offices of Bodman LLP in Suite 400 at 201 S. Division. One main topic of the retreat will be urban versus suburban identity, as well as the comprehensive parking plan.

Sandwich Sign Boards

Reporting out from the transportation committee, Keith Orr gave an update on the status of the sandwich sign board ordinance that the city council had considered, which would have made the signs legal, but put a permitting system in place. Susan Pollay, executive director of the DDA, had appeared before the council at its Feb. 16, 2010 meeting to ask the council to adopt the new ordinance, minus the permitting system:

Also during the public hearing, Susan Pollay, executive director of the Downtown Development Authority, read a brief statement on behalf of the DDA, saying that sandwich board signs are part of what makes for a vibrant downtown experience. She suggested that the system be adopted without permits and then reviewed after one year to determine if there was adequate compliance.

Orr reported that the city council had voted down the ordinance – which Sandi Smith then stressed meant only the demise of the current attempt to make the sandwich boards legal and to regulate them somehow. The fact that the sandwich sign boards remain illegal was, said Orr, “perhaps not the desired result.” Russ Collins kidded Orr as to whether he was recommending that merchants commit acts of civil disobedience.

Bicycle Hoop Requests, Maps

Reporting out from the transportation committee, Orr called attention to a feature on the DDA website that allowed people to request installation of bicycle hoops. He also indicated that DDA intern Amber Miller was working on a bicycle map for downtown.

Downtown Citizens Advisory Council

Ray Detter gave his report from the Downtown Citizens Advisory Council, which meets the evening before the DDA board holds its regular Wednesday noon meeting. [The majority of Detter's comments during his update are reflected in previous parts of this meeting report.]

He said that DDA board member (and Ann Arbor city council member) Sandi Smith had attended the meeting. The DCAC had covered a number of topics, Detter said, including efforts to improve maintenance and safety at Courthouse Square – a housing complex for seniors at the southwest corner of Huron and Fourth Avenue. Detter told the board that the DCAC continued to support the DDA’s efforts at transportation demand management.

Present: Gary Boren, Newcombe Clark (via phone), Jennifer S. Hall, Roger Hewitt, John Splitt, Sandi Smith, Leah Gunn, Russ Collins, Keith Orr, Joan Lowenstein, John Mouat.

Absent: John Hieftje.

Board retreat and next regular board meeting: A retreat will be held on Tuesday, March 16 at the offices of Bodman LLP, Suite 400, 201 S. Division, starting at noon. The next regular board meeting is at noon on Wednesday, April 7, 2010, at the DDA offices, 150 S. Fifth Ave., Suite 301. [confirm date]

Backround trio from left to right: Kathy Ciesinski with Think Local First; Andrew Cluley, who was covering the event for WEMU radio; and Bob Van Bemmelen, proponent of the Unity model. Foreground trio: Ingrid Ault, executive director of Think Local First; Samantha Nielsen Misiak and Krissa Rumsey, both facilitators for TLF. (Photos by the writer.)

On Tuesday evening at the downtown Ann Arbor District Library’s lower level multipurpose room, Think Local First held the first of three meetings designed to gauge interest and support for the idea of a local currency. Ingrid Ault, Think Local First’s executive director, said she was hoping that more than the 10 people who dropped by would attend.

But there’ll be two additional meetings with the same content, both from 6-8 p.m.: Thurs., Feb. 25 at the Ypsilanti Senior Center; and Wed., March 3 at Vitosha Guest Haus Inn.

One couple, Larry An and Eileen Ho, dropped by the Tuesday event, even though that wasn’t the reason they were visiting the library. They’d come with their fourth- and six-grade kids, who were looking for their artwork – the lower level of the library is regularly updated with exhibits of art created by students in Ann Arbor’s local schools.

What piqued An and Ho’s curiosity was the idea of adding a local currency as a tool in their cohousing development – Sunward Cohousing – to aid the distribution of the work. Currently, members of the development are supposed to work four hours a month on tasks that are determined by the development’s work committee. For example, An said he’d put in some time shoveling snow in the wake of the storm that hit Ann Arbor earlier in the week.

Larry An, who dropped by the Think Local First event on Tuesday, is pointed in the right direction by Kathy Ciesinski, who was volunteering for the nonprofit.

An’s effort at snow shoveling didn’t match another resident’s, he said, who spent the entire day shoveling – that exceeded the four-hour monthly requirement in short order. But there’s no way to store that extra labor. And as the residents of the development get older, An said, people might not be able to contribute to the kind of work they did when they were younger.

The idea of using a currency primarily as a way of banking time was one of four basic approaches to local currency presented on poster printouts at different “stations” in the multipurpose room on Tuesday night. A parade example of such an approach receiving national attention is Ithaca Hours.

Closer to home, a time-centered approach to local currency has been implemented by the Dexter Miller Community Co-op, a neighborhood cooperative on the city’s west side. [Chronicle coverage: "Another Day, Another Dex-Mil"] On payment of the membership fee and dues for the Dexter Miller community, members are issued 16 DexMills – each note is worth 15 minutes, for a total of four hours.

How you get your hands on the “money” is one way to distinguish among various approaches to local currency. A second main approach presented at Tuesday’s meeting was basically to conceive of a local currency as an alternative to ordinary U.S. federal currency. The local currency can be purchased with those federal dollars at some agreed rate of exchange. In Traverse City, Mich., Bay Bucks are an example of that approach.

Also visiting the Think Local First event on Tuesday was Stephen Ranzini, president of University Bank, who had spoken to the DDA at their October 2009 meeting about his experience with the paper currency model of local currency. From The Chronicle’s report of that meeting:

DDA board members were alerted to some existing experience with local currencies in the Ann Arbor banking community, when Stephen Ranzini addressed them during public commentary at the conclusion of the meeting. Ranzini is president of University Bank. He described how he’d begun his banking career in Newberry, Mich., near Sault Ste. Marie, and how he’d developed a local currency there. In the first year, they’d circulated around $0.5 million of local scrip, and found that it had increased local shopping. So it was an idea he thought was worth looking at.

The Traverse Area Community Currency Corporation, which issues Bay Bucks, describes on its website how most businesses that accept Bay Bucks don’t accept them for 100% of payment. The idea is to keep the Bucks in circulation and circulating –  to achieve that goal, businesses can’t accept more Bucks in payment than they can reasonably expect to spend themselves.

The idea of using local currency for only partial payment for goods and services is key to the coupon model, which was the third main approach presented at the Think Local First event. At the meeting was a proponent of the coupon, or Unity model, Bob Van Bemmelen.

Samantha Nielsen Misiak talks with Bob Van Bemmelen about the coupon model of local currency.

Van Bemmelen is a pharmacist, and he appealed to a medical model to explain part of his enthusiasm for this approach. Money is like blood, essential for getting goods and services (nutrients and oxygen) to the people who need them (cells of the body). While a newborn baby might have a few ounces of blood, he said, as the baby grows, it generates a sufficient amount of blood to deliver nourishment to the rest of the body.

One advantage of the coupon model, Van Bemmelen said, is that you can easily inject money into the system – you simply give it to people.

The fourth and final approach to local currency presented on posters was a barter system with “trade dollars” used as an accounting tool. An example of such a system is the Michigan Barter Marketplace.

Participants in the event Tuesday evening were asked to visit each station where the different currency models were explained on posters, and then fill out a sheet indicating their level of support for each approach.

The next two meetings will have the same format: Thurs., Feb. 25 at the Ypsilanti Senior Center; and Wed., March 3 at Vitosha Guest Haus Inn. More input will be eventually be solicited through an online survey, said Ault.