Ann Arbor public parking system: monthly permit use by length of stay. An example of the kind of data that’s possible to track for the public parking system. The DDA board has requested that Republic Parking start including additional data in its monthly parking report.

The DDA manages the city’s public parking system, and a report presented to the board for October 2012 – the most recent month for which data is available – showed $1.675 million in revenue, which amounts to an increase in revenue compared to October 2011 of about 15.5%. The increase is at least partly a function of rate increases, changes to the billing method, and an increase in the parking system inventory. The recently completed Library Lane underground parking garage offers more than 700 spaces, which were not available a year ago. The use of the parking system as measured by hourly patrons showed only a 1.8% increase.

At the meeting, DDA board member Roger Hewitt announced that future monthly reports would begin including more detailed information on the length of time patrons park in the system. Currently the board uses revenue levels as a kind of imperfect proxy for system usage.

Also related to the parking system, the stats for November will include the fact that the parking system maxed out – with all spaces in the entire system filled – on the night of the Midnight Madness holiday shopping promotion. That’s an event sponsored by the Main Street Area Association (MSAA), which took place on Nov. 30. Maura Thomson, executive director of the MSAA, relayed her appreciation to the board during public commentary for the DDA’s financial support of the holiday lights strung on trees downtown.

Again related to parking were brief remarks made to the board by local attorney Scott Munzel, who spoke on behalf of the developer of the proposed new residential project at 624 Church St. The DDA board had given its support for around 40 parking spaces to be provided for that 14-story, 81-unit apartment building through the city’s contribution-in-lieu program. Munzel alerted the board that the project was anticipated to be on the city planning commission’s Jan. 15, 2013 agenda. Munzel was hoping the location of the parking spaces in the public parking system could be determined by then.

Ray Detter, speaking for the downtown citizens advisory council, updated the board on another major development – 413 E. Huron. The northeast corner of Huron and Division is the location of a planned residential and retail development with 213 apartments – which does not need any variances in the D1 zoning district. Detter reported the developer’s intention to proceed with the development even through it was strongly criticized by the city’s design review board.

Addressing the board on a non-parking topic was Jim Balmer, president of Dawn Farm, a nonprofit offering both residential and out-patient services supporting recovery for alcoholics and drug addicts. Dawn Farm’s Chapin Street facility has been supported in the past by the DDA, and Balmer addressed the board to thank them for that support and to highlight a future funding request – $150,000 to pay down debt. The grant is intended to help Dawn Farm achieve a target of 200 beds for its residential facilities, up from the current 159 beds.

The board received news that the preliminary draft audit report indicates that the fiscal year 2012, which ended June 30, 2012, will be unqualified – that is, “clean.” The unrestricted net assets held by the DDA at the end of the fiscal year totaled about $8.65 million.

Parking

As usual, parking was a dominant theme of the DDA’s board meeting.

Parking: Profit-Loss

Roger Hewitt gave the parking report. It included a profit-and-loss statement on each facility for the year ending June 30, 2012. [.pdf of profit-loss statements] The second to the bottom line, he noted, reflects whether a particular structure “made money or not.” The key to that is three lines above that bottom line – bond payments.

Four structures still have bond payments being made, he pointed out. The Fourth & Washington and the Fourth & William structures still have the original construction bonds that need paying off, he noted. Two other structures have related bond payments: Maynard and Forest – which both underwent significant renovations. Hewitt pointed out that even after the bond payments are factored in for Maynard and Fourth & William, they’re still making money – unlike Fourth & Washington and Forest.

Hewitt said the more significant point is not to evaluate whether an individual structure is making money but rather whether the parking system as a whole is working. And the net annual income is nearly $800 per space, Hewitt said. So net revenue from the parking system is anticipated to be about $5.6 million for last fiscal year.

Responding to a question from Sandi Smith, Hewitt indicated that the $5.6 million figure was after making the payment due to the city of Ann Arbor, for 17% of gross parking system revenues. The total paid to the city was about $3 million or roughly $300,000 more than was budgeted, Hewitt said. It also includes the rent paid to privately-owned parking lots the DDA uses.

Parking: Midnight Madness

Hewitt also reported on a unique occurrence that, depending on your viewpoint, was either good or bad, he said. The previous Friday night, on Nov. 30, was Midnight Madness – and it maxed out the parking system. At some point during Friday night, every single spot at every structure and surface lot was filled, Hewitt said. That had happened only once before – on the Friday of the art fairs this year. That’s nearly 5,600 spaces, he said. The two structures at Maynard and at Fourth & Washington had parking activity that would be the equivalent of filling and emptying four times, Hewitt reported. If the new Library Lane structure had not been on line, it would have been necessary to shut down the system for 2 hours at the beginning of evening. There were almost 1,500 more parkers entering the system between 5-8 p.m. than last year on Midnight Madness.

John Mouat ventured that more important than the parking numbers were the people who were downtown. Hewitt said: “There were a lot of people downtown Friday night!” He saw that reflected in his restaurant. [Hewitt owns the Red Hawk.] Hewitt thanked the Republic Parking staff for their work in getting people in and out as quickly as possible.

Leah Gunn added that based on a conversation with Maura Thomson, executive director of the Main Street Area Association, “business was booming.” People were not just walking around, Gunn said, they were buying.

Maura Thomson, executive director of the Main Street Area Association.

Thomson also appeared before the board during public commentary time to thank the DDA publicly for the downtown holiday lights display. She felt it contributes to stimulating the downtown economy, and has an impact on the experience people have downtown that can’t be measured. It creates an environment that helps people feel connected to the downtown and makes people want to talk to other people about how great they think this downtown is, she said. As someone who works to promote downtown, she thanked the DDA for making her job easier.

Board member Nader Nassif responded to Thomson’s remarks by noting that he now lives on Fourth Avenue. He’d like to see the holiday lights expanded to other areas of downtown, not just Main Street. Sandi Smith echoed Nassif’s sentiments, calling it an easy piece of low-hanging fruit. Smith also suggested adding some wayfinding directions from the downtown to the Border-to-Border trail and the new Argo Cascades.

Parking: Monthly Report

The monthly parking report – comparing October 2012 against October 2011 – showed a 15.5% increase in revenue, with the number of hourly patrons up 1.8%. Hewitt pointed out that the new underground Library Lane structure showed about $77,500 in revenue, which he called “pretty good for a new structure.”

Hewitt indicated that the operations committee will be looking at the kind of statistics it requests from Republic Parking, the DDA’s subcontractor for parking operations. After adding the new Library Lane underground garage, the committee will be asking that Republic produce more detailed statistics on hourly users and how they affect the system. He said the format of the report would likely be modified to get a better idea of the impact of hourly users on the system.

Ann Arbor public parking system: Revenue. Compared to October 2011, revenue was up again (green trend line) – by 15% after showing about nearly the same revenue year-over-year in September. The revenue increase reflects increased rates, billing by the hour, and 865 additional spaces compared over the 6,955 in the system that were available in October 2011. It’s not clear how much additional usage of the system it reflects.

Ann Arbor public parking system: Patrons. Compared to October a year ago, the number of hourly patrons was up incrementally by 1.8%.

Ann Arbor public parking system: Focus on structures. The new Library Lane structure showed a clear upward trend in revenues per space (black trend line).

Ann Arbor public parking system: Focus on surface lots. The Fifth & William lot (purple trend line), near the newly opened Library Lane structure, may have lost some patrons to the new structure.

Ann Arbor public parking system: Focus on system. Revenue-per-space systemwide continues upward.

The different statistics that will be included in the standard monthly reports reflect an attempt to get a clearer picture of how different patrons are using the parking system. The DDA makes monthly permits available at prices that yield less revenue per space than the DDA would receive, if all spaces were paid at the standard hourly rate. For example, the standard hourly rate for a parking structure is $1.20 per hour. A standard monthly permit in some structures costs $145 per month. So a downtown worker who used a permit for eight hours daily would break just about even after three weeks, compared to paying hourly. [145/(1.2*8)]

The strategy the DDA is using to free up spaces for hourly patrons in structures near the University of Michigan campus has been to offer discounted permits in the new Library Lane structure – for new patrons or for people willing to shift their permits from Liberty Square or Maynard to the new Library Lane structure. That discounted rate is $95 per month. In the first week of December, 260 of the cheaper permits for Library Lane had been sold, with an additional 336 permits sold at the regular rate of $145 – for a total of 596 permits sold for the 738-space structure.

Revenue from permits alone for Library Lane would translate into about $73,000 per month. [336*145 + 260*95] Back in October, with fewer monthly permits sold, and about 8,000 hourly parking patrons using Library Lane, the structure generated $77,500 in revenue.

With additional statistics about how long hourly patrons are staying and how long monthly permit holders are parking, the DDA hopes to get a clearer understanding of the impact that pricing policies have on parking behavior.

Parking: Spaces for Bicycles

Two of the parking spaces in the Maynard structure will be given over to bicycle parking starting in March or April. John Mouat gave an update on the project, which getDowntown director Nancy Shore has suggested be called the “Bike House” – on analogy with the Big House, as University of Michigan’s football stadium is known.

Sketches and preliminary pricing has been done by designer Dan Mooney. At its Oct. 3, 2012 meeting, the DDA board authorized a $30,000 budget for the facility, which is expected to provide room for about 50 bikes.

Similar “cages” in other cities use a chain-link fencing material. However, the DDA hopes that a more aesthetically pleasing option can be identified. The preliminary drawings include a laminated glass half wall, instead of a chain-link design.

The facility is designed for commuters who would pay a rental amount for use of the “cage.” Bicyclists would still be responsible for securing their own bikes in racks inside the cage. [.jpg of rack configuration].

Development

A number of items on the Dec. 5 agenda related to the Ann Arbor DDA’s role as a development authority.

Development: Parking

Under city policy, the public parking system is used as a development tool – and that policy is implemented by the DDA. So local attorney Scott Munzel appeared before the board during public commentary time representing Opus Group of Minnetonka, Minn. – which is developing a residential project at 624 Church St. in downtown Ann Arbor. It will be a 13- or 14-story, 83-unit apartment building with approximately 181 beds. A request had already been made to the DDA by the developer to provide the required 40-42 parking spaces by contracting for them in the public parking system. That’s instead of building the spaces on site as part of the project.

The authorization to work out the parking agreement in the context of the city’s “contribution in lieu of parking” program came on a vote taken at the Oct. 3, 2012 meeting of the DDA board. The DDA manages the city’s public parking system under a contract with the city.

Ann Arbor’s “contribution in lieu of parking” program was authorized by the city council on April 2, 2012. That program allows essentially two options: (1) purchase monthly parking permits in the public parking system for an extra 20% more than the current rate for such permits, with a commitment of 15 years; or (2) make a lump sum payment of $55,000 per space. It’s option (1) that the 624 Church St. project will be pursuing.

At the DDA board’s Dec. 5 meeting, Munzel reported that the site plan for the project had been submitted and is expected to be on the Jan. 15 agenda of the Ann Arbor planning commission. Munzel ventured that the planning commission will want to know where the authorized spaces will be, and he told the board that the size of the building had settled in on a slightly smaller square footage, so that 40 spaces would be needed, not 42.

Munzel reiterated the developer’s request that those spaces be provided in the Forest parking structure, which is the closest one to the development. Munzel said that location would best meet the intent of the payment-in-lieu policy and would help stabilize revenue to the DDA. He offered to sit down and chat about that informally.

Development: Grant Request – Dawn Farm

Jim Balmer, president of Dawn Farm, told the board he guessed they all knew who he was, and that they’d seen the request that had been made for financial assistance to reduce the debt on two of the organization’s existing properties. By way of background, Dawn Farm is a nonprofit offering both residential and out-patient services supporting recovery for alcoholics and drug addicts. In 2001, the DDA had made a $135,000 grant to Dawn Farm to assist with the purchase of the property at 112 Chapin St.

The current request being made to the DDA is for $150,000 to help pay down the debt on two other Dawn Farm properties, at 343 Beakes and 324 Summit. The grant from the DDA would free up cash to expand the existing total 159 beds in Dawn Farm’s residential treatment facilities to 200 by early 2013, according to Dawn Farm.

Development: Update on 413 E. Huron

Reporting from the downtown citizens advisory council, Ray Detter told the board that in recent weeks, representatives of the eight downtown and near-downtown residential neighborhood associations had been negotiating directly with the developer of the project at 413 E. Huron St., which Detter described as a “massive 14-story … student housing building.” It’s located just east of Sloan Plaza and immediately adjacent to the Old Fourth Ward historic district.

Greenfield Partners is a financial backer of the project, Detter said. They have rejected all suggestions and requests from the city’s design review board to improve the design of the building, he reported. The design review board had recognized that context is important, and that the project is part of a specific character area, Detter said. [The city's development process of design review is mandatory, but compliance with the recommendations of the design review board is voluntary.] According to Detter, Greenfield Partners said that any further changes would affect the profitability of the project. The bottom line, Detter continued, is that the developer wants to make the maximum he can. “They call it ‘by right’ and they’re going to build it to make that money…”

Detter expressed some optimism based on the draft recommendations from the Connecting William Street project. A draft indicates that the planning commission would be required to report to the city council about how a project team responded to the recommendations of the design review board. The downtown citizens advisory council will join with other groups to work toward improving the design review process for all buildings, he said, not just those on public property.

Development: Board Retreat

Susan Pollay, executive director of the DDA, summarized the recent board retreat that was held on Nov. 17. The board had talked about the basics and what DDAs are created to do. They’d talked about what the board felt the Ann Arbor DDA did well and what outside stakeholders felt they did well, as well as what they did not do as well. A smaller group of the board had met after the retreat, she reported, and distilled the discussion from the retreat into key tactics:

1. Identity. There’s a lot of information that’s currently captured by the DDA about the downtown. More efforts could be made along these lines, Pollay said.
2. Infrastructure. It’s what the DDA is known for. The walkability and attractiveness of downtown is due in large part to DDA dollars, she said.
3. Transportation and parking. There’s more the DDA could do to merge the two areas. The DDA needs to look at the results of the Connector Study [on the corridor between US-23 and Plymouth, through University of Michigan campus and downtown to I-94 and State].
4. Business encouragement. The DDA should include a focus on “clean and safe” and should make conversations with the Main Street business improvement zone (BIZ) a part of that – which would help tap into the private sector.
5. Housing. It’s a key ingredient of the DDA’s success, Pollay said. The city and Washtenaw County, as well as the nonprofit community, have a role to play, she added. The DDA’s specialized role could be in supporting work-force housing. The DDA is trying to make it possible for people to live and work in the downtown.

Audit

Roger Hewitt reported that the operations committee had received a draft of the audit. The final version hasn’t been received yet, but he said it was completely clean as an accurate reflection of the DDA’s financial condition.

The statements include total net assets of $8,767,926 – nearly a $1 million increase over the previous year. That is primarily held in the balances of the DDA’s four different funds: TIF – tax increment finance ($4.7 million), parking ($2.1 million) and the two combined funds of housing and parking maintenance ($1.7 million). For the formal audit, the housing fund and the parking maintenance funds are lumped together as “non-major governmental funds.”

Bike Share

DDA board member John Mouat briefed his colleagues on a bike-share program that the DDA is being asked to support. A bike-share program would allow members to take a bicycle from a station and use it for a period of time. The concept is that several stations would be placed in a geographic area, so that a bicyclist could, as much as possible, ride from one station to another.

By way of background, a year ago – at the DDA’s Dec. 7, 2011 meeting – Mouat had briefed the board on a request from the Clean Energy Coalition for in-kind support for the bike-sharing program. The bike-sharing program would work on analogy to car-sharing programs like Zipcar. The initial request for only an in-kind contribution from the DDA was based on the hope that a grant award from the Federal Transit Administration’s Congestion Mitigation and Air Quality Improvement (CMAQ) would cover both capital costs and operations. But it turns out that the FTA has limited the program to capital costs only.

At the partnerships committee meeting of June 27, 2012 the grant request by the CEC to the DDA was described as $5,000 in calendar year 2012 and $10,000 annually for the three years from 2013-2015. Other organizations that had been asked to contribute financially include: the Ann Arbor Transportation Authority ($18,000 this year and $40,000 annually for three years); the city of Ann Arbor ($15,000 this year and $40,000 annually for three years; and the University of Michigan ($66,000 this year and $200,000 annually for three years). The university was described as contributing the lion’s share because UM is interested in controlling the advertising component of the program.

At the board’s Dec. 5 meeting, Mouat described the project as having “run into a speed bump.” The CEC is looking to increase the amount of the requests. The question of how to ensure adequate operating expenses is crucial. Mouat indicated that his inclination was to put as much as possible of the responsibility on the University of Michigan. He described it as a complicated issue.

At the operations committee meeting of the DDA the previous week, Mouat had reported that the most recent meeting of the potential partners had become a bit contentious. At that operations committee meeting, DDA executive director Susan Pollay had supported the idea of having the University of Michigan take the lead with a launch that would be confined to the campus. When the program was established, it might be expanded – roughly on analogy with the way that the Zipcar program was rolled out in Ann Arbor.

The city of Ann Arbor is represented in the bike-share discussions by Eli Cooper, the city’s transportation program manager who also serves on the AATA board. In a telephone interview with The Chronicle, he indicated that he hoped the initial deployment would not be confined only to the University of Michigan campus. He pointed out that the concept of a bike-share is actually different from Zipcar.

When a patron of a Zipcar uses a vehicle, then the expectation is that the driver will use the vehicle for some period of time, perhaps driving somewhere and parking it for an hour or two, then returning it to the same Zipcar parking space. A bike-share program, in contrast, depends on the availability of a station near the intended destination, so that a user pays for the time of the travel, not for the entire “outing.” So Cooper hoped that the initial geographic deployment of stations would be as broad as possible. Cooper stressed that one of the challenges is that bike-share as a transportation strategy is relatively new.

Misc. Communications

The DDA board’s meeting included a range of other comments and communications.

Comm/Comm: Calendar

The board decided to move its January 2013 meeting to Jan. 9. Ordinarily it would have fallen on Jan. 2.

Comm/Comm: Thank You

Susan Pollay, executive director of the DDA, addressed the board at the end of the meeting during the public commentary time, saying she was wearing her citizen of Ann Arbor hat. She thanked DDA board member Sandi Smith for her tenure as a city councilmember. This year, Smith chose not to seek another two-year term after serving four years representing Ward 1 on the council.

Pollay also thanked DDA board member Leah Gunn, who was going to attend her final session of the Washtenaw County board of commissioners that night.

Comm/Comm: Adopting a Theme

Addressing the board at the conclusion of the meeting was Thomas Partridge. He encouraged the board to adopt a freedom theme for the 21st century. He called for the Ann Arbor Transportation Authority to provide transportation under the theme of Freedom Rides. Ann Arbor hasn’t adopted a theme and has been scooped by other cities like Atlanta, San Francisco, Chicago, New York, and Boston, he said. He criticized what he described as the Caucasian dominance of elected and appointed boards in Ann Arbor.

Present: Nader Nassif, Bob Guenzel, Roger Hewitt, John Hieftje, John Splitt, Sandi Smith, Leah Gunn, Russ Collins, Keith Orr, Joan Lowenstein, John Mouat.

Absent: Newcombe Clark.

Next board meeting: Noon on Wednesday, Jan. 9, 2013, at the DDA offices, 150 S. Fifth Ave., Suite 301. [Check Chronicle event listings to confirm date]

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Left to right: DDA board member Sandi Smith, Ann Arbor Housing Commission executive director Jennifer L. Hall, and DDA board chair Leah Gunn. (Photos by the writer.)

And board members voted unanimously to support the resolution, which DDA board member Sandi Smith had brought forward. Smith, who also represents Ward 1 on the Ann Arbor city council, is planning to bring the policy resolution to the council for consideration at its Sept. 17 meeting.

DDA board members were positively inclined toward their own resolution, but sought to clarify that the “proceeds” meant net proceeds – that is, whatever is left after any debt associated with city-owned land is paid off. The loan for the city’s acquisition of the former YMCA lot, for example, still has a principal of $3.5 million associated with it. Smith indicated at the meeting that the resolution she brings to the council might involve the DDA forgoing the repayment on investments it has made in city-owned property – like interest payments on the former YMCA lot or the demolition costs associated with that property.

The board also made an amendment to the resolution during the meeting, adding the phrase “a percentage of [proceeds].” The change gives the council flexibility to adopt a policy that doesn’t require the entire amount of the net proceeds to be directed to the affordable housing trust fund.

At the Sept. 5 meeting, the board also heard a request from the executive director of the Ann Arbor Housing Commission, Jennifer L. Hall, for a $260,000 allocation from the DDA’s own housing fund. The DDA has a housing fund that’s not necessarily dedicated to affordable housing. But the request Hall was making was for Baker Commons, a public housing project located within the DDA’s geographic district, at Packard and Main. The money would primarily go toward replacing the roof with one made of metal.

The board also got its regular update on the parking system. The basic message: revenue is up, and usage is up. The board also had a look at the unaudited financial figures for the end of fiscal year 2012, which concluded on June 30. Except for capital expenses, which were less than budgeted, most categories were on target. The DDA had budgeted all expenses for the new Library Lane parking structure for that fiscal year, but not all invoices have come in yet.

The board was also updated on a possible change to the way that transportation planning and funding takes place in Washtenaw County. Discussions by the policy board of the Washtenaw Area Transportation Study (WATS) suggest the  possibility that Washtenaw County could form its own metropolitan planning organization (MPO). Currently, the Southeast Michigan Council of Governments (SEMCOG), which includes a total of seven counties, serves as the MPO  for Washtenaw County. The change would affect how federal transportation funding is administered locally.

Affordable Housing Trust Fund Policy

The board was asked to consider a resolution encouraging the Ann Arbor city council to adopt a policy on proceeds from the sale of city-owned land – one that would allocate such proceeds into the city’s affordable housing trust fund. The city council’s resolution will be considered at that body’s Sept. 17 meeting. It’s being brought forward by Sandi Smith, who serves on both the city council and the DDA board.

The policy has a long history dating back to 1996. The policy of directing proceeds of city-owned land sales to the affordable housing trust fund was rescinded by the council in 2007. More detailed background is provided in previous Chronicle coverage: “City Council to Focus on Land Sale Policy.”

Affordable Housing Trust Fund: Commentary

Reporting from the downtown citizens advisory council, Ray Detter told the board that the CAC had also discussed the DDA’s resolution on using proceeds from city-owned land sales to support affordable housing. Members of the CAC have always supported affordable housing, he said.

But Detter cautioned the DDA and the city council that the CAC is committed to maintaining and improving the existing low-income housing in the downtown – whether it’s in the form of the Delonis Center homeless shelter, the housing commission’s Baker Commons, or the privately-owned Courthouse Square. The CAC supports rehabbing existing units rather than tearing down existing affordable housing to build new units, Detter said.

Affordable Housing Trust Fund: Board Discussion

Sandi Smith introduced her resolution by telling her DDA board colleagues that on Sept. 17 she would be bringing forward a resolution to city council that would direct the proceeds of the sale of city-owned property into the city’s affordable housing trust fund.

She observed that, “We have not had a tremendous amount of success in building affordable housing.” It’s something she has watched the community struggle with, she said, during her time serving on the DDA board and on the city council.

The funds need to come from somewhere, she stressed. She contended that insufficient affordable housing units are being provided in downtown and near downtown. The recent failure of the Near North project hammers the point home, she said. So she wanted to ask for the DDA board’s support in bringing the city council’s resolution forward. She allowed that the city council resolution was not yet in final draft form, so there is some ambiguity about it.

The details are not 100% clear, Smith allowed, but the request for the DDA’s part is to say that the DDA agrees with the overall concept – and that the DDA is willing to forgo some payback on some investments that the DDA has made in city-owned properties. As an example, Smith gave the portion of the ongoing interest payments the DDA has made on the loan used to purchase the old YMCA building. The DDA would be forgoing repayment of that interest. [Those payments total about $140,000 annually, half of which have been paid by the DDA and half by the city of Ann Arbor. The property was purchased in late 2003, and the building was subsequently demolished. It's now a surface parking lot.]

Roger Hewitt wanted clarification that the “proceeds” of any sale would be considered after the payment of any debt attached to the property. Smith pointed out it’s not a benefit to the city to leave a debt unpaid with nothing behind it – saying that would not make a lot of sense. Proceeds would be construed as “net” proceeds, she said. Hewitt indicated that he was comfortable with that. He also pointed out that the DDA’s resolution was an advisory resolution only – because it’s ultimately a city council decision.

John Mouat indicated his support for the notion, saying it was a terrific idea. But obviously, he said, the “devil is in the details.” From his perspective, he would prefer to see the proceeds from city-owned land sales not simply go into the general fund.

Mouat also wanted to see some consideration given to the fact that the DDA is still working on the Connecting William Street project – looking at five city-owned parcels and what uses would eventually be made of those parcels. [Recent Chronicle coverage of a DDA presentation to the planning commission: "Planning Group Briefed on William Street Project."]

Some of the things that people have said they want out of those parcels, Mouat continued, include performance space, parks, good architecture, sustainability. So the community vision for those parcels still needs to be determined, he said. [For response to Connecting William Street from the city's park advisory commission, see Chronicle coverage: "Park Commissioners: More Green, Please."]

Mouat also pointed out there might be some things the city needs to provide as incentives – to help realize the community’s vision for those parcels. So he liked the concept of reinvesting the proceeds of the sale in those parcels themselves or putting proceeds into the affordable housing trust fund.

Mayor John Hieftje pointed out that the city council resolution will only be as strong as the six councilmembers [a simple majority on the 11-member body] who sit around the table at the time. He also pointed out that there are other capital needs that might come along. In that context, he suggested an amendment to include the phrase “a percentage of [the proceeds].”

The amendment was approved unanimously.

Outcome: With no further discussion, the DDA board approved the resolution encouraging the city council to adopt a policy directing a percentage of the proceeds of city-owned land sales to the affordable housing trust fund.

Ann Arbor Housing Commission: New Roof

During public commentary at the start of the DDA board’s meeting, Jennifer L. Hall – executive director of the Ann Arbor Housing Commission – addressed the board. She discussed a request for $260,000 from the DDA’s housing fund, the bulk of which would be put toward the replacement of the roof of Baker Commons.

By way of background, the DDA’s housing fund is not the same fund as the city’s affordable housing trust fund. The DDA’s housing fund receives money through transfers from the DDA’s tax increment finance (TIF) fund. It currently has a balance of about $1 million – $400,000 of which is committed to Village Green’s City Apartments project, and another $500,000 of which had been committed to Avalon Housing’s Near North project. It was recently announced that Near North will not go forward.

Baker Commons roof. View is looking to the south, across the intersection of Packard and Main streets.

Hall noted that the Ann Arbor Housing Commission is the public housing authority for the city of Ann Arbor, which has jurisdiction for about 360 city-owned units. The housing commission also administers about 1,400 federal housing vouchers for the entire Washtenaw County.

Ninety percent or more of the population served by the Ann Arbor Housing Commission are extremely low-income residents, Hall said. Most of the people who live in housing commission units are disabled or elderly and many of them do not have jobs. So it’s really the lowest income folks in the community who are served by the Ann Arbor Housing Commission, Hall said.

The housing commission has only one property within the Ann Arbor Downtown Development Authority district, Hall explained – Baker Commons, on the corner of Packard and Main streets. So she wanted to make a request to fund a current urgent need: a roof for Baker Commons.

The roof has had ongoing leaking problems, and the housing commission has undertaken periodic patches. However, in the last year or so it is gotten much worse, Hall reported. There has been leakage into housing units and damage to the roof trusses, she explained. For all of the housing units, the commission is trying to move towards doing more long-term cost savings – so rather than replacing the Baker Commons roof with an asphalt roof, they explored using a product that would last longer and realize long-term savings.

So the housing commission went out and got a bid for a steel roof, which came back at $246,000. There are many advantages to a steel roof, Hall said. The only real disadvantage is the increased upfront cost, she explained – which is about three times more than an asphalt roof. On the other hand, she said such a roof can last forever – as long as you keep repainting it. The original guarantee is 20 years for the roof, and as long as you keep repainting it, you should never have to take it down to replace it.

From left: Jennifer Hall appears to be showing Leah Gunn how steep the Baker Commons roof is.

Hall noted that the roof of the building has an extremely steep pitch, so it is a very expensive project to replace the roof no matter what kind of roof is put on – because it’s a high-rise building with such a steep pitch. The commission would like to replace it once, and then have it last for a very, very long time, she said. Some of the benefits for the steel roof include: no off-gas; resistance to wind, fire, mildew, insects and rot; extended life for air-conditioning units; decrease in attic temperatures; and decreased energy use overall. It decreases the heat-island effect. Hall also pointed out that the product that the housing commission has chosen was made in Michigan.

A few additional items, for which Hall requested funding, fell into the category of energy-saving devices – programmable thermostats and occupancy sensors for interior lighting in common areas. The programmable thermostats are estimated to save $50 per year for each of the one-bedroom units in Baker Commons. The sensors would be estimated to save around $770 a year.

Ann Arbor Housing Commission: Board Response

Mayor John Hieftje made remarks generally supportive of Hall’s to request on behalf of the Ann Arbor Housing Commission. He said the 30-year funding trend across the nation for housing commissions was downward.

Board chair Leah Gunn suggested referring Hall’s proposal to the DDA’s partnerships committee.

Outcome: This was not an action item, and no vote was taken.

FY 2012 Financial Statements

Roger Hewitt gave an update on the financial reports for the end of the fiscal year, which concluded on June 30, 2012. The figures are as yet not audited, but the DDA is ready for the audit to take place, Hewitt said. There was not too much variation between the budget as amended in May 2012 and the final figures, Hewitt reported. The one area where a considerable difference appears is in capital expenses.

It’s a legal requirement that the DDA show positive budget numbers for the year, Hewitt explained. So for that reason, all conceivable capital expenses related to the new underground parking structure were included in the past fiscal year’s budget, even though the DDA did not expect that they would all need to be paid that year. That way, the DDA made sure that it remained within the letter of the law. [Last year, the DDA's auditor had noted an overage as a violation of Michigan's Uniform Budgeting and Accounting Act, which was due to a construction invoice submitted late in the year.]

So the major variations between the end-of-year figures in the budget were capital expenses that were budgeted but not actually expended. Those expenses will come due in the current fiscal year, Hewitt pointed out. [.pdf of end-of-year FY 2012 statements]

TIF (tax increment finance) fund income was very close to what had been budgeted, Hewitt said, as were TIF operating expenses. TIF capital expenses were about $2.4 million less than budgeted. But that money will be spent in the current fiscal year, he cautioned. The parking fund showed a similar situation, he continued. Parking revenue was very close to what had been budgeted. But about $800,000 was not spent, which had been in the parking fund budget – it will be spent in the current fiscal year. For the parking maintenance fund, about $1.4 million was not spent, but will be spent in the current fiscal year. For the housing fund, interest rates were a little bit higher than expected, so there was a bit more income than budgeted.

Hewitt then ticked through the fund balances for four funds in the DDA’s budget. The TIF fund has a little over $3.6 million. The housing fund has a little over $1 million. The parking fund balance is about $2.1 million. And the parking maintenance stands at about $1.6 million. Some additional money will be spent on the completion of the Library Lane underground parking structure, he allowed, but the total fund balance is such that it could comfortably take care of those additional expenses.

Parking Report

The DDA manages the city’s public parking system under a contract with the city of Ann Arbor. That contract pays the city 17% of gross revenues. The DDA in turn subcontracts out the day-to-day operations of the system to Republic Parking. So the monthly parking report is part of every DDA board meeting.

Parking Report: Monthly, Quarterly Numbers

The update on the parking system was delivered by board member Roger Hewitt. The trend that the DDA has seen for the last 12 months – and increasingly so in the last six months – Hewitt said, has been significantly higher revenues. That’s attributable to increased usage and also partly due to rate increases, he said. But the majority of the increase in revenue, he contended, was a function of greater usage of the parking system.

In June 2012, revenues were up 19% over June 2012 June 2011, while the number of hourly patrons for the same period was up 2.65%. Hewitt concluded that the hourly patrons are staying longer. Of the 19%, Hewitt estimated 6-8% is the amount of the rate increase. So he concluded there was a 10% increase in revenue attributable to increased usage. Hewitt concluded that it’s fortunate that the new Library Lane underground structure is open, because there is clearly demand for parking.

For the fourth quarter, Hewitt continued, revenue in the parking system was up 14% – with hourly patrons just about level. For the last 12 months revenues are up 12% – two-thirds of which was due to rate increases and the balance of which was increase in usage, Hewitt said. Hourly patron numbers for that period were up only about 2%, so the hourly patrons are staying longer, he concluded.

Hewitt concluded that demand and the financial condition of the parking system are very strong. The initial numbers for the first 10 days that the new structure had been open, Hewitt said, were 4,000 hourly patrons in the first week, which meant $45,000 of revenue.

By way of background on rate increases, the DDA board approved additional rate increases on Jan. 4, 2012. Some of those increases were just recently implemented, starting in September 2012. Rate increases implemented starting in September include those at parking structures and lots, where rates climbed from $1.10 per hour to $1.20 per hour.

But other changes were implemented starting Feb. 1, including a change in the billing method at parking structures and hourly lots – from half-hourly to hourly.

To compare the hour-increment billing method to the half-hour billing method, assume that parking times are evenly distributed among those people who parked between N and (N + 0.5) hours and those who parked between (N + 0.5) and (N + 1) hours, where N is some whole number.

On the hour-increment billing method – for the current hourly rate of $1.10 – the first group would pay for N + 1 hours, or roughly $0.55 more than under the half-hour-increment method, when they’d pay just for N + 0.5 hours. The second group would pay for N + 1 hours under either billing method. So by changing from half-hourly to hourly increments, half of the roughly 2 million annual hourly patrons would pay $0.55 more – generating roughly $550,000 more revenue annually.

Parking Report: Parking Management

Hewitt complimented Republic Parking manager Art Low on the management of the system during the art fairs in July. On the Friday of art fairs, for the first time in the history of the parking system, every single parking structure was full at one time – and that had never happened before, Hewitt said. Of course, Hewitt pointed out, it was during the art fairs. But that included three levels of the underground parking structure that were open to the public. [It has four levels, which are now all open.] So it was a very, very busy day, he concluded. Art fair revenues were up 30% over last year. Part of that is having extra capacity and part of that is having very good management of getting people into the structures, he said.

Hewitt also gave an update on the new automated payment equipment that’s being installed in the Liberty Square parking structure and the Fourth and Washington structure. The new equipment allows people to pay for their parking before getting into their cars to exit the structure, and then use their validated ticket to raise the gate arm so that they can leave – instead of paying an attendant sitting in a booth. [The new automated equipment is being paid for by Republic Parking under a $1.3 million lending arrangement with the DDA.]

Attendants will still be available in the structure, Hewitt explained, but they won’t be sitting in a booth working exclusively as cashiers. A lot of parking systems across the country are moving in that direction, he said. It makes for shorter lines when exiting and a more efficient operation, he said.

Hewitt emphasized that parking personnel are not being removed entirely from the structures. They are being used more efficiently and effectively, he said, because they are also providing light maintenance, and walking through the structures providing assistance as needed. [Republic parking manager Art Low previously had explained to the DDA's operations committee that the personnel change had required creating a new job classification for collective bargaining – one that is slightly higher-paid than booth cashiering. He allowed that the total number of staff will eventually decrease over time.]

The Fourth and Washington structure is in the process of having the equipment installed. And the equipment has already been installed at Liberty Square. Up to now, Liberty Square had been designated strictly for monthly parking permits during the day. Now, over 100 monthly permit holders had moved into the underground parking garage, so some hourly spaces are opening up at Liberty Square, Hewitt said – and the hourly patrons are using the automated payment system.

Parking Report: Charts and Graphs

Ann Arbor Public Parking System: Hourly Patrons. The yellow line shows patrons for the recently-concluded fiscal year 2012. The number of hourly patrons was in most months very slightly more than the same month the previous year. But in some months, the number was less. FY 2013 (green) is off to a slow start for hourly patrons compared to previous years.

Ann Arbor Public Parking System: Revenue. The yellow line shows revenue for the recently-concluded fiscal year 2012.  It reflects substantial increases in every month compared to the same month in the previous years. FY 2013 (green) continues that trend.

Ann Arbor Public Parking System Revenue Per Space – Surface Lots. The top two facilities in the system, measured by revenue per space, are the Huron/Ashley/First (bright red) lot and Kline’s lot on Ashley (bright blue). They generate significantly more revenue per space than a heavily-used structure like Maynard Street (light blue). The most erratic performance of any lot appears to be the Fifth & William lot. The dramatic increases starting in late 2009 reflect the closing of the neighboring lot where the new Library Lane parking structure was built.

Ann Arbor Public Parking System Revenue Per Space– Structures. The highest revenue-per-space structures (Fourth & Washington and Maynard Street) are still considerably lower than a surface lot like Huron/Ashley/First (light red). Considered as a facility unto itself, on-street meters generate less revenue per space than most other facilities in the public parking system. That’s due in part to the fact that enforcement of the meters does not extend past 6 p.m.

Ann Arbor Public Parking System: Number of Spaces by Fiscal Year. The number of spaces available shows some fluctuation month to month. But the increases in revenue clearly can’t be attributed to an increase in the parking space inventory.

Washtenaw: Separate from Seven-County Region?

During routine reports, John Mouat mentioned that he is the Ann Arbor DDA’s representative to the Washtenaw Transportation Study (WATS) – a group made up of county and township officials, a city council member and other “various folks” whose job it is to help guide the direction of transportation spending in the county. The world of transportation is a exoteric world of acronyms and other strange things, he said. The organizing body for determining federal funding is the Southeast Michigan Council of Governments (SEMCOG), which is a seven-county organization – dominated by Wayne, Oakland, and Macomb counties, Mouat said.

Mouat wanted people to be aware of a discussion going on right now – about whether Washtenaw County should form its own metropolitan planning organization (MPO). The logic for bringing it forward is the idea that currently it’s a long and complex process to get initiatives done that WATS would like to see implemented. [.pdf of chart showing average additional time of 77 days due to SEMCOG's involvement] [.pdf of comparison by WATS of current arrangement and separate MPO]

The other point is that for some people, Washtenaw County is seen as unique and different from other counties, he said. Washtenaw County’s interests might be different from the interests of other counties. Other counties might be more interested in roads and bridges and not as much in nonmotorized projects, transit projects and so forth. So it might be possible for Washtenaw County to represent itself better as a separate entity than through SEMCOG.

But it’s not a simple matter, Mouat cautioned. For one thing, SEMCOG is against it. Also the Michigan Dept. of Transportation (MDOT) has expressed considerable concern about it. [.pdf of MDOT letter] [.pdf of SEMCOG letter] He himself also has some concerns. He said it’s easy to be attracted to the idea of the county having control over our own destiny, but he feared the potential repercussions of breaking away from SEMCOG. He reported that there has been a bit of tension in trying to get meetings to happen with MDOT. He hoped that in the next couple of months some headway will be made on the topic.

Mouat thanked board chair Lee Gunn for attending the most recent WATS meeting in his absence. Gunn reported that not a lot happened at the meeting she had attended. But Mouat had been right about there being tension in the room, she said. Mouat call it a “very tough issue,” pointing out that the idea of Washtenaw County forming its own metropolitan planning organization is counter to the idea of regional planning. So it’s a balance between that and our own interests, he said.

Communications, Committee Reports

The board’s Sept 5. meeting included the usual range of reports from its standing committees and the downtown citizens advisory council.

Comm/Comm: DDA Board Retreat

Board chair Leah Gunn announced that there would be a DDA retreat on the afternoon of Nov. 16. More details will be forthcoming.

Comm/Comm: Construction Update

John Splitt gave an update on the completion of the Library Lane underground parking garage. He indicated that the punch lists are still being worked on. He hoped to have them finished very soon. But he confirmed that now all four levels of the parking structure are open.

Comm/Comm: Downtown Parks, Planning

Joan Lowenstein gave an update on the Connecting William Street project. The team is now presenting the draft scenarios to various groups. In the month of August, she reported, the project team had met with 11 different citizen groups, area associations and commissions. More such meetings will take place in September. She also described an upcoming webinar that same evening to introduce the Connecting William Street scenarios.

Another public meeting will take place on Sept. 10 at noon at the downtown branch of the Ann Arbor District Library, 343 S. Fifth. That would be a much more traditional meeting, compared to the webinar format. Lowenstein indicated the result the DDA wanted was a somewhat generalized idea of a consensus for massing and density on the sites. Really specific uses are not being proposed – although Lowenstein noted that generally described uses like residential, office, retail, hotel, lodging, and those kinds of things are a part of the different scenarios.

Mayor John Hieftje reported that he had addressed the Ann Arbor park advisory commission about the possibility of redesigning Liberty Plaza at the corner of Division and Liberty streets. The idea would be to make it into a better park than it is – although he contended it had come a long way since it was first built. He stressed the need to prioritize park initiatives, pointing to the greenway and the future of the 415 W. Washington and 721 N. Main Street properties. [For a detailed report of Hieftje's remarks to PAC and commissioners' response, see "Park Commission Focuses on Downtown, Dogs."]

During public commentary at the conclusion of the meeting, former planning commissioner Eric Lipson addressed the board.

Lipson introduced himself as the general manager of the Inter-Cooperative Council of the University Michigan, with headquarters 337 E. William St. He indicated the ICC was very interested in the Connecting William Street planning process. He thanked DDA planning specialist Amber Miller and DDA executive director Susan Pollay for coming to the ICC to present the Connecting William Street scenarios and to have ICC representatives take the survey.

Lipson said he was also there addressing the board as a member of the Library Green Conservancy to keep alive the concept of a plaza on top of the Library Lane underground parking structure. People who have passed by the location, since the completion of the underground parking structure, have probably seen what he has seen, Lipson ventured – namely, that the space between Fifth Avenue and the elevator structure is highly underutilized for parking. The Fifth and William street surface parking lot was full when he’d walked past it that day, but there were only three or four cars on top of the Library Lane structure, he said. That portion of the lot is so obviously a plaza, he said.

He pointed out that mayor John Hieftje had suggested that his group form a private conservancy, and he reported that the group had in fact formed a conservancy. He also noted that Roger Hewitt had told his group that ultimately this will be a city council decision. So he reported that the Library Green Conservancy is still pressing ahead, because his group did not want the topic to go “off the radar.”

Lipson also pointed out that the Calthorpe study, commissioned by the city in the mid-2000s, had mentioned in several places a public space and a public plaza. And the Calthorpe study had indicated that the spot where the top of the underground parking garage is located would be a perfect place for such a public plaza, he said. In that report, public plazas and a gathering space are mentioned dozens of times, but there had been no mention of a conference center or hotel space. Why did we have all those charrettes and all that public process associated with the Calthorpe study, Lipson wondered, if it wasn’t going to be used?

So Lipson told the board that the Library Green Conservancy was not going to go away, and would continue to advocate for a public plaza at that location – recognizing that there were many other people advocating for other things.

Comm/Comm: Bicycle Issues – Cages, Sidewalks

John Mouat reported from the operations committee on a concept for establishing a “bicycle cage” at the Maynard Street parking structure – a place where bicyclists could have their bicycles secured inside a fenced-off area accessible with a swipable pass. There would be some costs associated to the bicyclists to access the spaces. He said it might be used by people who have high-end bikes or who have concerns about the security of their bicycles. They would be under a cover. The next steps would be getting cost estimates. Mayor John Hieftje indicated his support for the idea.

If the program were successful at the Maynard Street location, Mouat said, it could be extended to other locations. But one of the questions is: How far will people walk? Where would you like to park your bike in relation to where you’re trying to get to? It would help reduce the number of bikes that are parked on the streets, he pointed out.

There has also been some ongoing discussion about what to do with abandoned bikes, Mouat said. He reminded the board that the DDA had previously had a role in helping to tag bikes that were abandoned, but that has been deemed “inappropriate.” Nader Nassif pointed out that each of these cages can hold about 50 bikes, so he felt it was a good use of the space.

Hieftje tacked onto the discussion of the bike cages an idea he’s floated before to the DDA board – that he believes bicycle riding on downtown sidewalks should be prohibited. He imagined that such a move would generate a lot of public discussion. The Washtenaw Bicycling and Walking Coalition has done some work on the issue, he said. As the number of pedestrians increases, Hieftje said, it’s something he thinks the DDA board should pursue to foster a good pedestrian environment.

He contended there is really no problem riding a bicycle on the streets in downtown Ann Arbor. He felt that anybody who can ride a bike can also master riding in downtown Ann Arbor. He noted that a concern that had been raised against such a prohibition in the past involves families who want to bring their kids downtown. But Hieftje felt there would be ways to make allowances for that type of activity within the ordinance – for example, by exempting people of a certain age, or exempting people who are riding with their children.

Comm/Comm: Student Housing

Jim Mogensen told the board he wanted to make some observations about student housing. He noted that a lot of student housing projects are being built. He observed that there is no zoning for student housing. He noted that the state legislature has discussed the idea of not allowing local governments to have non-discrimination ordinances, but he pointed out that Ann Arbor’s non-discrimination ordinance says that you cannot discriminate against people based on their student status. It doesn’t say that you can’t discriminate against students, just that you can’t discriminate against people based on their student status, he stressed.

He emphasized to the board that the large student housing developments downtown are not temporary. That contrasts with the relatively temporary student housing projects built in “residential for cash” zoning districts. ["Residential for cash" is Mogensen's standard word play for R4C multi-unit zoning.] But the current projects that are being built would be much harder to redevelop, he cautioned. So the projects are going to be there, and they would probably have to be reused. He pointed to Courthouse Square as an example. That matters to the DDA for a couple of reasons, he said. When the numbers stop working, or if there has been over-development, the DDA board might find that people come ask them for some of the TIF money.

The other thing is that some of the residential projects have been created with some assumptions about behavior – more walking and pedestrian use, for example. If these units are redeveloped for young professionals, no matter what we might hope will happen, Mogensen said, there will be a greater demand for cars, and that’ll be something that has to be incorporated into planning. He encouraged the board to incorporate that kind of thinking as a footnote to their planning.

Comm/Comm: Building Boom

Ray Detter reported from the downtown area citizens advisory council (CAC). The group had discussed a large packet of written material, part of which fell into the general category of “building boom and tight rental market.” Detter then listed out a number of projects: the Library Lane underground parking garage, Blake Transit Center, the Ann Arbor District Library, The Varsity, 618 South Main, The Landmark, Zaragon West, City Apartments, the former St. Nicholas Church property, Ed Shaffran’s plans to put condos on top of the Goodyear Building, Howard Frehsee’s building on South State Street and his plans perhaps to put a high-rise on the back of that building, plans for the former Borders building, the Zingerman’s Deli addition, and the closing of White Market.

Also included in the discussion were some unannounced developments that have not yet been reported in the news media, he said. Detter described a purchase by Ed Shaffran of the old Brauer building at Catherine Street and North Fifth Avenue, and a plan to put apartments in that location. [Responding to an emailed query from The Chronicle, Shaffran indicated that while a purchase agreement had been signed, there are a number of contingencies to work through before a sale would take place. One of the future uses being considered, wrote Shaffran, is residential. But that would require a rezoning of the property, which is currently a planned unit development (PUD), restricted to office-only use.]

Also discussed was an upcoming purchase of the Papa John’s Pizza property at Huron and Division – by the Connecticut firm Greenfield Partners. Detter noted that the firm had already purchased the neighboring property just west of Sloan Plaza. A project could now be extended all the way to Division Street, and Detter expressed his hope with the addition of the neighboring property, a better-designed building would result, and there would be better protection for the residents of Sloan Plaza.

The CAC was supportive of these developments, Detter said, in the same way that the group has been supportive of projects in the past – by making suggestions for improvements and monitoring the review of projects as they go through the process, including the city’s design review board.

Detter also described a range of different projects outside the downtown on which the CAC tended not to take positions. But because such projects would ultimately have an impact on the downtown, the CAC wanted to be involved in the ongoing discussion. Among the examples Detter gave were the location of a possible new rail station and the construction of a greenway.

Present: Nader Nassif, Roger Hewitt, John Hieftje, John Splitt, Sandi Smith, Leah Gunn, Keith Orr, Joan Lowenstein, John Mouat.

Absent: Newcombe Clark, Bob Guenzel, Russ Collins.

Next board meeting: Noon on Wednesday, Oct. 3, 2012, at the DDA offices, 150 S. Fifth Ave., Suite 301. [confirm date]

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