Stories indexed with the term ‘city-DDA relations’

Ann Arbor Downtown Development Authority board meeting (Dec. 4, 2013): At its last regular meeting of the year, the board approved the final funding necessary to replace 81 light poles on Main Street, passed a resolution waiving a claim to reimbursement for the DDA’s costs associated with the former Y lot, and formally accepted its audit report for the fiscal year that ended on June 30, 2013 (FY 2013).

The board also considered a resolution added to the agenda on the day of the meeting, related to the contribution-in-lieu (CIL) parking agreement for the 624 Church St. project – but ultimately decided to table that resolution pending further review at the committee level.

The DDA’s Dec. 4 resolution allocating $280,000 for the Main Street light pole replacement ended the political wrangling over who should pay for those downtown Ann Arbor light poles. Replacement of the deteriorating poles was identified by the city as a need in the first half of 2012. The source of an estimated $600,000 required for the project was specified in the city’s CIP (capital improvements plan) that year as coming from the DDA – though the funds were at that time not authorized by the board.

In the spring of 2013, the city council weighed how it might clarify the city’s ordinance that restricts the DDA TIF (tax increment finance) capture. In that context, DDA executive director Susan Pollay told the council that the DDA might not be able to afford to pay for the Main Street light pole project – if the council changed the ordinance language to clarify the calculations in a way that did not favor the DDA. The question of the DDA’s TIF capture was not ultimately settled until the council’s Nov. 18, 2013 meeting.

In the interim, the city council voted at its May 20, 2013 meeting to request that the DDA allocate at least $300,000 for the $580,000 light pole project. After the council then declined at its Oct. 21, 2013 meeting to approve a budget allocation for the remaining $280,000 that was needed for the project, the DDA board passed its Dec. 4 resolution, citing the urgency of replacing at least 36 of the poles as the reason for its decision.

According to the DDA’s resolution, staff will use the DDA funding to begin now with replacement of those poles most in need of being removed, with the remainder replaced in the summer of 2014.

Also at its Dec. 4 meeting – in connection with the city’s pending sale to Dennis Dahlmann of the former Y lot, at William Street and Fifth Avenue – the DDA board passed a resolution that waived claim to $1,439,959 in reimbursements from the sale that the DDA has calculated it might be owed. The city council adopted a policy on Oct. 15, 2012 that included depositing net proceeds (after reimbursements) from the former Y lot sale into the city’s affordable housing trust fund.

So the DDA board’s action is an attempt to increase the amount that will be deposited into the affordable housing trust fund. The resolution passed by the DDA board also calls on the city council to waive the city’s claim to reimbursements. The city purchased the property in 2003 for $3.5 million and has made interest-only payments for the last 10 years on a loan for that amount. The agreed-upon sale price to Dahlmann is $5.25 million.

In another formal action taken on Dec. 4, the DDA board accepted the audit report from the most recently concluded fiscal year – FY 2013, which ended June 30, 2013. The auditor issued an “unmodified” or clean opinion.

The board also considered a request, which was ultimately tabled, from the developer of the 624 Church St. project. The developer is asking for an extension of the contractual agreement under which parking permits could be purchased using the city’s contribution-in-lieu (CIL) program. The program allows a developer to satisfy certain zoning requirements that parking spaces be provided for a project – by purchasing monthly permits in the public parking system at a premium rate, instead of building the spaces on site. The developer of the 624 Church St. project wants the ability to extend the 15-year minimum to cover a 30-year financing period – based on feedback from firms that would be providing the financing. The DDA board ultimately voted to table the question pending further review by the board’s operations committee.

The board’s newest members introduced themselves at the meeting: city administrator Steve Powers and Main Street retailer Cyndi Clark.

Also at its Dec. 4 meeting, the board heard a range of updates on various projects and public commentary. Highlights included a report from the Main Street BIZ (business improvement zone), which has enough money in its fund balance to handle sidewalk snow removal for the coming winter, without collecting the winter tax assessment to which it is entitled. In a separate update, there’s a possibility that downtown ambassadors could be hired by the DDA as soon as the summer of 2014.

Other topics covered in updates included the effort to save the State Theater, the NHL’s Winter Classic on New Year’s Day, and The Puck Drops Here festivities on New Year’s Eve. [Full Story]

The board of the Ann Arbor Downtown Development Authority has voted to waive any claim to a reimbursement of about $1.4 million it might have had coming from the net proceeds of the pending sale of the city-owned property known as the former Y lot. The property is located on William Street between Fourth and Fifth avenues downtown.

Waiver of that claim could lead to the transfer of the money to the city of Ann Arbor’s affordable housing trust fund, under a policy established by the Ann Arbor city council a year ago. The DDA board’s action came at its Dec. 4, 2013 meeting. [.pdf of unamended Dec. 4, 2013 draft DDA resolution on Y lot proceeds]

The DDA board resolution also … [Full Story]

Political wrangling over who should pay for downtown Ann Arbor Main Street light poles has ended with a resolution passed by the Ann Arbor Downtown Development Authority board to allocate the remaining $280,000 for the project. The DDA board had previously allocated $300,000 for the $580,000 project to replace 81 light poles on downtown Main Street.

DDA board action on the $280,000 was taken at its Dec. 4, 2013 meeting, and came after the Ann Arbor city council had declined to approve an additional $280,000 budget allocation.

Downtown Ann Arbor Main Street … [Full Story]

Back in the spring of 2011, the Ann Arbor city council and the Downtown Development Authority were arguing bitterly about money.

Now two and a half years later, a solid working relationship between the two entities has evolved – unmarred by political machinations, based instead on a clearly understood shared past, and consensus interpretation of relevant statutes and local laws governing tax increment finance capture.

That has led to a joint working session between the entities scheduled for Sept. 9, 2013. The session will offer an opportunity for members of the organizations to exchange appreciation and praise for the positive turn the relationship has taken over the last 30 months.

Heh. That’s a joke, as is the headline – the only accurate part of the preceding two paragraphs is the fact that a Sept. 9 working session is scheduled.

And it’s fair to say that the working session between the two groups would probably not be taking place unless it were contractually obligated – under an agreement ratified in May of 2011. The DDA operates the city’s parking system under that contract. In addition to the convening of a joint working session every fall, the contract stipulates that 17% of the gross parking revenues are to be paid to the city.

Parking money is just one of the two revenue categories over which the city and the DDA have been bickering. The other is the DDA’s tax increment finance capture (TIF), which is regulated by Chapter 7 of the city code. With an initial approval of changes to Chapter 7 already approved by the council on April 1, 2013, a joint DDA-city council committee was tasked on July 1, 2013 with making a recommendation on Chapter 7 changes to the council.

Representing the council on the joint committee are Stephen Kunselman (Ward 3), Christopher Taylor (Ward 3), Jane Lumm (Ward 2) and Sally Petersen (Ward 2). Representing the DDA are Sandi Smith, Roger Hewitt, Bob Guenzel and Joan Lowenstein.

Despite being tasked by council on July 1 to begin meeting immediately, the committee did not meet until eight weeks later, on Aug. 26 – after the Aug. 6 city council primaries. Here’s the political calculus: If Kunselman had lost the Ward 3 Democratic primary to Julie Grand, the balance of votes on the council might have shifted to clarifying Chapter 7 in the DDA’s favor.

Grand ran a campaign that was generally supportive of the DDA. But Kunselman has led the council’s effort to clarify Chapter 7 in a way that favors the city as well as the other taxing jurisdictions whose taxes are captured by the DDA. However, Kunselman prevailed – as did Ward 4 challenger Jack Eaton, who campaigned in part on the idea of limiting the DDA’s TIF capture through clarification of Chapter 7.

Because the committee waited until after the Aug. 6 primary to meet, the DDA members had a clearer idea on Aug. 26 about who they’d be dealing with in the near future. The outcome of the Aug. 6 primary meant that Kunselman brought a certain amount of confidence to the committee meeting on Aug. 26. At one point he stated: “… I don’t really have a lot of trust out in my neighborhoods about what the DDA does downtown, ok? And that’s how I have been able to galvanize my base, so to speak, to stay here and to keep this effort alive, so that we can get this ordinance changed … Some of that money, yes, should be returned to the taxing authorities.”

Now the only question mark on the committee is the independent Lumm, who faces a challenge from Democrat Kirk Westphal in the November election. Lumm has made it clear she supports a Chapter 7 revision that respects the interests of the other taxing jurisdictions. But Lumm’s re-election is not a foregone conclusion.

That’s why the opening gambit from the DDA’s side at the Aug. 26 meeting was to delay further, even though the council is scheduled to take a final vote on the Chapter 7 revisions at its Sept. 16 meeting. A future council that included Westphal, mayor John Hieftje, Chuck Warpehoski (Ward 5), Margie Teall (Ward 4), Christopher Taylor (Ward 3) and Sabra Briere (Ward 1) might have six votes that potentially could support the current approach to TIF calculations. But among those six, I think even Westphal, Warpehoski and Briere are capable of independent and rational thought on the question of TIF capture.

The delaying tactic on Aug. 26 emerges in a fairly obvious way if you read through the meeting transcript. [.pdf of 40-page transcript]. DDA members were more inclined to want to talk about general arguments for the existence of a DDA, professing uncertainty about why they’d even been invited to the table. Kunselman, Lumm and Petersen made it clear they were there to talk about clarifying the TIF calculations, not more general themes. It wasn’t clear whose interests Taylor was upholding, but he aligned himself policy-wise – as well as socio-linguistically – more with other DDA board members than with his city council colleagues.

The Aug. 26 meeting was highlighted by a number of misstatements or incomplete statements of historical fact – some serious enough that I worry about the ability of some of those at the table that day to effectuate good public policy.

Still, I think the meeting offered a glimmer of hope – from a guy whose history with the city of Ann Arbor is approaching an anniversary. On Sept. 15, city administrator Steve Powers will have been on the job exactly two years.

Powers, I think, offers a contrast with the previous city administrator Roger Fraser. On April 16, 2010 Fraser barred me from a meeting of a “working group” of councilmembers and DDA board members. Shielded from public view, the group was sorting out the terms of a new parking agreement. Powers, on the other hand, toward the end of the Aug. 26, 2013 committee meeting, had this to say: “If the committee is done commenting, you should provide for public comment, as it’s a public meeting.”

This column includes a brief outline of some factual points worth remembering – because they were misstated or incompletely stated at the Aug. 26 meeting. But first, a point about words.  [Full Story]

Ann Arbor Downtown Development Authority board meeting (Sept. 4, 2013): The board’s first meeting since early July was attended by the minimum seven members needed for a quorum on the 12-member group. In its one main business item, the group voted to approve a $300,000 grant to Washtenaw County, to support renovations to the county-owned building at 110 N. Fourth in Ann Arbor, which is known as the Annex.

The renovation is part of the county’s overall space plan, approved by the board of commissioners at its July 10, 2013 meeting. The space plan calls for modifications to the Annex so that it can house the county’s Community Support & Treatment Services (CSTS) department. The cost of the renovations at the Annex, which would include a new lobby and “client interaction” space, would be about $1 million, according to the DDA board resolution. [.pdf of DDA resolution on the Annex] The Annex has housed the county’s office of community and economic development, office of infrastructure management, and the public defender’s office. Those offices are being moved to other leased and county-owned space.

Not described at the DDA’s board meeting was the backdrop of the grant award to the county, which evolved from a conversation between county administration and the DDA about ways the DDA could help the county address its budget deficit. A pitch from the county had been to re-open the agreement under which the county purchases monthly parking permits in the city’s public parking system, which the DDA manages. The alternative proposed by the DDA was to make a one-time $300,000 grant  – to help fund a project for which the county had already identified funding.

Also not mentioned among the several updates given during the Sept. 4 DDA board meeting was an Aug. 26 meeting of a joint DDA-council committee. That committee had been established by the Ann Arbor city council at its July 1, 2013 meeting to work out a recommendation on possible legislation to address an ongoing controversy about DDA tax increment finance revenue. Not much forward progress was made at that committee meeting.

The city council has already given initial approval of changes to the ordinance language that would clarify the amount of tax increment finance capture (TIF) revenue received by the DDA . The clarification currently under consideration does not work out in the DDA’s favor. A final vote of approval appeared on the council’s Sept. 3, 2013 agenda – the day before the DDA board met – but the council decided again to postpone a final vote.

At their Sept. 4 meeting, DDA board members also got a look at a draft five-year plan of projects that has now been generated, partly in response to pressure from the city council – dating back to April of this year – asking the DDA to explain what projects would not be undertaken if the DDA didn’t continue to receive TIF revenue based on its preferred interpretation of the city’s ordinance.

Highlights of other updates that were given at the Sept. 4 DDA board meeting included a review of the preliminary end-of-year figures for the public parking system and the rest of the DDA’s funds. Overall, the DDA’s financial picture was better than budgeted. That difference is due to the timing of various capital costs.

For the parking system, the year-end picture was consistent with the trend throughout the year. Revenue generated by the parking system was up by 11.9% ($19.09 million) compared to the previous fiscal year, while the number of hourly patrons was down by 1.96% (2,232,736).

Low attendance at the board’s meeting was partly a function of the fact that two of the seats are currently vacant. One of the seats could potentially have been filled by the city council through confirmation of Al McWilliams’ nomination at its Sept. 3, 2013 meeting. However, as the nine councilmembers present debated his confirmation, mayor John Hieftje withdrew it, at least for the time being.

McWilliams’ confirmation would have needed six votes on the 11-member council – and the outcome was dubious based on conversation among the nine attendees at the council table. Some councilmembers questioned whether McWilliams’ might have a recurring conflict of interest based on the work his advertising firm, Quack!Media, does for the Ann Arbor Area Transportation Authority and the allocations that the DDA makes to the AAATA’s go!pass program. That allocation amounted to $479,000 this year, and was approved at the DDA board’s March 6, 2013 meeting.

The Sept. 4 DDA board meeting was somewhat unusual in that no one from the public chose to address the board during the session at either of the two points on the agenda for public commentary. [Full Story]

A final vote on a revision to the Ann Arbor city code regulating the Ann Arbor Downtown Development Authority’s tax increment finance (TIF) as been postponed again – until Sept. 16.  The postponing action was taken by the city council at its Sept. 3, 2013 meeting. At stake is around $1 million or more a year in tax revenue.

Ann Arbor DDA TIF revenue projections. The vertical line indicates the year when the clarified calculations would be implemented. The red line is the amount of TIF revenue assumed by the DDA in its FY 2014 and FY 2015 … [Full Story]

Ann Arbor Downtown Development Authority monthly board meeting and annual meeting (July 3, 2013): In its voting business, the DDA board allocated a total of $550,000 for capital projects – either planning for future work or actual current projects.

The board also approved a $59,200 grant to support the formation of a business improvement zone in the South University area. A “trolley” for the upcoming art fairs also received $10,000 worth of support, in action taken by the board.

The capital projects included $50,000 for repair of sidewalk-related amenities that aren’t covered by the city’s sidewalk millage. In addition, the board allocated $200,000 for a streetscape framework planning project. Board action also included $300,000 for the replacement of light poles on Main Street.

The light pole replacement is one source of current friction between the city and the DDA – as the expectation of the city had been that the entire $516,000 project would be paid for by the DDA. But the result of wrangling over the DDA’s FY 2014 budget – given approval by the council on May 20 – was a transfer of $300,000 from the DDA’s TIF fund to the DDA’s housing fund. So the DDA’s position is that it can’t fund the entire light pole replacement project, because of that transfer to the housing fund.

The light pole question is related to the general issue of DDA finances and the revenue it receives through tax increment finance (TIF) capture of taxes – from entities that levy those taxes in the DDA district. Elected as chair at the annual meeting – which immediately followed the board’s monthly meeting – Sandi Smith will face the resolution of the TIF revenue issue as one of her first challenges.

The outstanding issue concerns the way that the DDA administers Chapter 7 of the city code of Ann Arbor – which regulates the DDA’s TIF capture. This spring the Ann Arbor city council gave initial approval to a revision to Chapter 7. The council’s action, if given final approval, would prevent the DDA from giving the code an interpretation that doesn’t recognize a cap on TIF revenue that is expressed in Chapter 7. The amendment to the ordinance would return several hundred thousand dollars a year to other taxing authorities from which the DDA captures taxes. Those entities include the Ann Arbor District Library, Washtenaw Community College, Washtenaw County and the city of Ann Arbor.

The council has postponed final action on the matter until Sept. 3, 2013. Between now and then, the council’s expectation is that a joint DDA-council committee will meet and make recommendations on the Chapter 7 issue.

At its July 1 meeting, the city council appointed four members to its committee: Christopher Taylor (Ward 3), Stephen Kunselman (Ward 3), Jane Lumm (Ward 2) and Sally Petersen (Ward 2). And at the July 3 monthly meeting, outgoing DDA board chair Leah Gunn appointed the DDA’s committee: Bob Guenzel, Roger Hewitt, Joan Lowenstein and Sandi Smith.

Another point of recent budgetary friction between the city and the DDA was raised briefly at the July 3 board meeting. In a formal resolution, the city council had encouraged the DDA to allocate money to fund downtown beat patrol police officers. For its part, the DDA has for a few years already been mulling the question of some kind of additional security – either in the form of ambassadors, community standards officers or police officers. At the July 3 meeting, DDA board members indicated they would continue to mull that range of options, but seemed disinclined to commit to funding police officers.

The board also heard a range of routine reports on July 3, including the monthly parking revenue report. The DDA manages the city’s public parking system under a contract with the city of Ann Arbor. In the future, it was announced, the report will be delivered only on a quarterly basis. Also related to parking policy, a tentative pilot project was announced that could change the basic approach the DDA takes to selling monthly parking permits. The idea would be to assign permit eligibility only to property owners in a defined geographic area. The number of permits would depend on the number of square feet of property – independent of uses such as office, residential, retail, etc. Currently, the DDA uses a first-come-first-served system for individuals, with a waiting list.

The DDA’s monthly meeting marked a transition on the board, as two board members were bid farewell. Newcombe Clark served one four-year term. He’s making an employment-related move to Chicago. Leah Gunn concluded nearly 22 years of service on the board. She finished out her time on the board as chair. [Full Story]

The Ann Arbor city council has established a four-member committee to sort through issues between the city and the Ann Arbor Downtown Development Authority. The council action came at its July 1, 2013 meeting. The DDA board is expected to establish counterparts at its July 3 monthly meeting.

The council will be represented by Christopher Taylor (Ward 3), Sally Petersen (Ward 2),  Stephen Kunselman (Ward 3) and Jane Lumm (Ward 2). Lumm’s name was added to the mix during the council’s meeting.

The current source of friction between the DDA and the city concerns the interpretation of Chapter 7 of the city code, which regulates the DDA’s tax increment finance (TIF) capture. The DDA has chosen to interpret the Chapter 7 language … [Full Story]

The Ann Arbor Downtown Development Authority has now been encouraged through a formal resolution of the city council to consider paying for three police officers to be assigned to the downtown. The total annual cost would be about $270,000.

The council’s action came at its June 3, 2013 meeting, two weeks after the council set its FY 2014 budget – during a May 20, 2013 debate that ultimately rejected funding for three additional police officers. The proposed budget amendment, which failed on a 5-6 vote, had been brought forward by Jane Lumm (Ward 2). The amendment would have reduced the budget of the 15th District Court by $270,000.

The resolution on June 3 was brought forward by Lumm and Sumi Kailasapathy … [Full Story]

Ann Arbor Downtown Development Authority board meeting (April 3, 2013): The board had no voting business on its agenda, but still dealt with serious business: the city council’s initial approval of changes to the DDA ordinance. The changes are meant to clarify the authority’s tax increment finance (TIF) capture, as well as place restrictions on board composition. [.pdf of Chapter 7 amendments]

The proposed amendments to Chapter 7 of the city code, given initial approval at the council’s April 1, 2013 meeting, would reduce the DDA’s TIF capture by roughly $931,000 for FY 2014 – compared to the amount the DDA would receive based on the DDA’s current interpretation of the ordinance. But in adopting its two-year budget recently, DDA did not factor in recent building projects in the downtown – which add to the increment on which the DDA can capture taxes, starting in FY 2014.

So compared to the amount of TIF revenue in the DDA’s adopted FY 2014 budget, the clarified calculations would result in only about $363,000 less TIF revenue for the DDA. And compared to the DDA’s adopted FY 2015 budget, the clarified calculations would result in about $74,000 less revenue than budgeted. The clarified calculations would result in TIF revenue to the DDA in FY 2014 and FY 2015 of $3.570 and $3.682 million, respectively.

A dispute on the clarity of the existing Chapter 7 language had emerged in May 2011 just as the DDA and the city were poised to sign a newly renegotiated agreement under which the DDA manages the public parking system. At that time, the city’s financial staff reportedly first noticed the implications of an existing Chapter 7 paragraph that appears to place a cap on the DDA’s TIF capture – a cap that’s calibrated to projections in the DDA’s TIF plan. The TIF cap rises each year based on forecast growth in the DDA’s TIF capture district.

Several board members weighed in on the issue during the April 3 meeting. The idea of any kind of cap – let alone one that’s based on estimates contained in the appendix of the DDA’s TIF plan – was sharply criticized by Joan Lowenstein, who characterized the approach as based on “a fallacy.” She also called the idea of a cap poor public policy. However, both the cap and its basis are already in the existing ordinance language that the city council’s ordinance amendment seeks to clarify.

Roger Hewitt took the board’s meeting as an opportunity to question whether the ordinance amendments actually clarify how the calculations are to be done, contending that he’d come up with different results than the city treasurer, starting from the same ordinance language. He cautioned that the DDA’s financial planning and the DDA’s budget would need to be re-evaluated – allowing for no “sacred cows” – if the council gave final approval to the ordinance changes.

Russ Collins contrasted the amount of net revenue received by the city from the geographic area of the DDA district before the DDA was established back in 1982, compared to today. The net proceeds from taxes and the public parking system (which lost about $250,000 a year during that era) came to about $1.25 million 30 years ago, according to Collins. Today, the city receives nearly $8 million annually – around $4 million in taxes, $3 million in parking revenue, and a grant to the city of roughly $0.5 million a year toward debt on the city’s new Justice Center building.

Bob Guenzel focused his remarks less on the financial side and more on the aspects of the ordinance change that would restrict future board membership. He saw no benefit to the proposed DDA term limits, noting that the city council has an opportunity to end a DDA board member’s service by deciding not to re-appoint someone to the board. John Mouat was critical of the proposed ordinance changes that would prevent elected officials of taxing jurisdictions from serving on the board, saying he’d found the participation of politically-connected people to be beneficial to the board.

The extended remarks by board members on the topic came in the context of a 7-3 vote by the city council on April 1, giving initial approval of the ordinance changes. [Christopher Taylor (Ward 3) was absent from the meeting of the 11-member council.] A second vote, expected at the council’s April 15 meeting, would be required to enact the changes. Based on their remarks made at the council table, two of the seven votes in support of the changes – by Marcia Higgins (Ward 4) and Sabra Briere (Ward 1) – were widely read as likely to change at the second vote. Ordinance changes require a six-vote majority.

In addition to discussion of the possible ordinance changes, the DDA heard its usual range of committee reports, including the monthly parking update. Public commentary related to a possible artificial ice-skating rink atop the Library Lane underground parking garage. [Full Story]

Ann Arbor Downtown Development Authority board meeting (March 6, 2013): In a main agenda item, the DDA board authorized a $300,000 grant to the Ann Arbor Housing Commission – for renovations to the 64-unit Baker Commons public housing facility. It added to the $280,000 grant made late last year for the replacement of the Baker Commons roof.

The grant award had come at the request of AAHC executive director Jennifer L. Hall, who’s proposing a major change to the way the 360 units of public housing are administered. The approach involves privatization and project-based vouchers.

The DDA’s support for public housing also surfaced at the meeting as a talking point for board members in the context of a proposal being considered by the Ann Arbor city council – which would amend the city ordinance regulating how the DDA’s tax increment finance (TIF) capture works. The amendments would clarify existing language in the city ordinance in a way that would favor the other taxing authorities, whose taxes are captured as a part of the DDA’s TIF. The council postponed action on that proposal at its March 4, 2013 meeting. In that context, at the DDA’s March 6 meeting, board member Sandi Smith raised the specter that the DDA would in the future not be able to support affordable housing in the same way it has done in the past.

In addition to clarifying the question of how TIF is calculated, the amendments would prevent elected officials from serving on the board and would impose term limits for board service. Board members took turns at the start of the meeting arguing that the DDA had been a good steward of public dollars and that the amendments to the ordinance are not warranted. Board members indicated that they didn’t think their service as volunteer members of a board was being afforded adequate respect by the city council.

The board comments followed a turn at public commentary at the start of the meeting from Brendan Cavendar of Colliers International, a commercial real estate services firm. His commentary departed from the typical pattern of someone signing up to address the board for up to four minutes. Instead, Cavendar had been invited to appear, and responded to prompts from board members to deliver a range of positive responses, including: future tenancy of the former Borders location; rising rents in the downtown area; and affirmation of the importance of the downtown public parking system.

The city’s public parking system is managed by the Ann Arbor DDA under a contract with the city of Ann Arbor. The monthly parking usage report is featured at every board meeting. But the March 6 meeting featured the parking system in an additional way. The board decided to award the full $50,000 of a discretionary management incentive to the DDA’s subcontractor – Republic Parking – for operation of the public parking system. It’s an annual decision, but it’s the first time in the last five years that the full amount has been awarded. The decision was based on good performance on metrics tracked by the DDA, according to the board.

In a third voting item, the board authorized $610,662 in support of getDowntown’s go!pass program, which provides a subsidy to cover the cost of rides taken on Ann Arbor Transportation Authority buses by employees of participating downtown businesses. To participate, a business must purchase a go!pass for all employees, at an annual cost of $10 per employee. Roughly 6,500 downtown employees are provided with go!passes through the program. [Full Story]

A bit more than a month ago, the Ann Arbor Downtown Development Authority board was poised to ratify a new contract with the city of Ann Arbor, under which it would continue to manage the city’s public parking system. But at noon on May 2, when board members met, they were greeted with some news that caused them to postpone their vote on that 11-year deal, which called for 17% of gross parking revenues to be transfered to the city of Ann Arbor.

That news had been conveyed to DDA staff by the city of Ann Arbor’s finance department just that morning: Some of the taxes captured in the DDA’s tax increment finance (TIF) district since 2003 might be owed to local taxing units, including the city. With an uncertain financial obligation to return TIF monies that had already been captured from taxing units in the district, the DDA board understandably balked at approving the new parking contract on May 2.

The postponement of the DDA’s vote on that contract ultimately led to a delay in the Ann Arbor city council’s adoption of the city’s fiscal year 2012 budget – as the council stretched its May 16 meeting to May 23 and then on to May 31. But by the end of May, the issue of excess TIF capture had been settled to the DDA board’s satisfaction, and the parking contract was ratified – first by the DDA, and then by the city council.

The Ann Arbor city council was also content with the DDA’s proposed solution to the excess TIF capture. That solution included returning a total of roughly $473,000 to the Ann Arbor District Library, the Washtenaw Community College and Washtenaw County. The city of Ann Arbor chose to waive its $712,000 share of the calculated excess.

Those three other taxing units no doubt welcomed the news that their budgets would get an unexpected boost. But the governing bodies of those taxing units should take a closer look at how the excess TIF was calculated. If they do, they will discover that the amount actually due to be returned to them (and divided proportionately as required under the city’s of Ann Arbor’s DDA ordinance) may not be $473,000, but more than twice that: $1.27 million. In ballpark numbers, for the Ann Arbor District Library that translates to the difference between about $75,000 and $200,000. For Washtenaw County, it’s the difference between $242,000 and $648,000. And for Washtenaw Community College, it’s the difference between $157,000 and $419,000. [Full Story]

At the May 31, 2011 session of its meeting that had begun two week before, on May 16, resumed briefly on May 23, only to be immediately recessed, the Ann Arbor city council agreed to accept prior contributions of the Ann Arbor Downtown Development Authority toward city of Ann Arbor projects as payment for the city’s share of excess tax increment finance (TIF) capture that the DDA has received since 2003.

At a special meeting on Friday, May 20, the DDA had calculated that a total of $1,185,132 should be returned to taxing authorities that levy property taxes in the downtown district. The city’s share of that is $711,767. The council’s resolution states that the acceptance of prior contributions to city … [Full Story]

Ann Arbor Downtown Development Authority special board meeting (May 27, 2011): At a special DDA board meeting held at noon on Friday, board members voted to give final approval to a contract under which the DDA would continue to manage the city’s public parking system. The vote was unanimous among the 10 board members who attended. Absent were Gary Boren and Newcombe Clark.

The financial part of the contract calls for the city to receive 17% of gross revenues from the public parking system, and would have an initial term of 11 years, with one renewal option for another 11 years. That would end the contract in 2033, which coincides with the DDA’s currently established endpoint.

The contract includes a new underwriting clause for the DDA’s fund balance. Key features of that clause are: (1) it’s applicable only through 2016; (2) it’s triggered if combined DDA fund balance fall below $1 million; (3) the trigger is evaluated based on the annual audit of DDA books in September or October, for the previous fiscal year; (4) if underwriting were triggered, it would take the form of reducing existing payments that the DDA makes to the city; (5) the city’s liability is limited to $1 million annually and $2 million cumulatively; and (6) any money the city is deprived of through this underwriting would be restored to the city, at whatever point the DDA’s cumulative fund balance reaches $4 million.

After brief deliberations, the DDA board voted unanimously to ratify the contract, which now includes the underwriting clause. [.pdf of ratified draft contract]

With that vote, the DDA board also approved a new contract clause that specifies how the DDA board and city council will handle a contractually required consultation between the two groups, in conjunction with parking rate changes. The consultation by the DDA will now be a required agenda item at annual joint working sessions between the DDA board and the city council. Currently, the DDA proposes rate changes, which are automatically enacted, unless the city council vetoes them. The new contract stipulates that the DDA would have sole authority to set rates.

The city council may now ratify the parking contract on Monday, May 31, which would help settle part of the city’s revenue issues in its fiscal year 2012 budget. It would allow the council to finalize its budget on that same evening. [For additional background, see Chronicle coverage: "Ann Arbor Council Defers Action Again"]

Councilmembers Sabra Briere (Ward 1) and Stephen Kunselman (Ward 3) sat in the audience of the DDA’s May 27 meeting. On May 31, the contract could face stiff opposition from at least those two, and possibly other councilmembers. After the DDA’s May 27 board meeting, Kunselman characterized the underwriting clause to The Chronicle as a “no-layoff clause for the DDA.”

Another lingering DDA issue that could result in discussion not just by the Ann Arbor city council – but also by the Washtenaw Community College board of trustees, the Washtenaw County board of commissioners, and the Ann Arbor District Library board – is the return of excess TIF capture by the DDA. [Full Story]

At a special board meeting of the Ann Arbor Downtown Development Authority, held at noon on May 27, 2011, the DDA board voted to give final ratification to a contract under which the DDA would continue to manage the city’s public parking system. The vote was unanimous among the 10 board members who attended. Absent were Gary Boren and Newcombe Clark.

At a special meeting held last week on May 20, the DDA board had initially ratified the contract, with a contingency that the city of Ann Arbor would provide an amendment that adequately underwrites DDA fund balances. Then at a Wednesday, May 25 meeting of two “mutually beneficial” committees – one from the city council and one from the … [Full Story]

At a Wednesday, May 25, 2011 joint meeting of the “mutually beneficial” committees – one from the Ann Arbor city council and the other consisting of Ann Arbor Downtown Development Authority board members – committee members agreed on language that would serve to “underwrite” the DDA’s combined fund balances for the next five years. A special DDA board meeting has been set for Friday, May 27 to ratify the agreement.

The underwriting was a necessary condition of the DDA’s ratification of a new contract with the city, under which the DDA would continue to operate the city’s public parking system. At a special meeting last Friday, May 20, the full DDA board had approved a contract that would transfer 17% … [Full Story]

At the May 23, 2011 session of its meeting that had begun the week before on May 16, the Ann Arbor city council did not address two issues it was expected to settle so that it could adopt its fiscal 2012 budget: (1) ratification of a new contract under which the Ann Arbor Downtown Development Authority would continue to manage the city’s public parking system; and (2) acceptance of prior contributions by the DDA to city projects, as payment for excess tax increment finance (TIF) revenues that have been captured in the DDA’s TIF district since 2003.

Instead of addressing those issues or any other budget issues, the council voted at the very start of the meeting to recess the meeting and continue it on May 31, 2011.

Per Ann Arbor’s city charter, the city council needs to adopt the city administrator’s proposed budget with any amendments no later than the second meeting in May. Failure to adopt the budget results in adoption of the administrator’s proposed budget by default. The city council is hoping to avoid some of the cuts to police and firefighters that are a part of that budget.

For a preview of the council meeting, see Chronicle coverage: “To Be Continued: Ann Arbor Council”

The vote to recess, taken before any other item was considered or could be introduced, could be seen as a move to prevent Stephen Kunselman (Ward 3) from proposing a resolution to take back responsibility for managing the city’s public parking system from the DDA. The Ann Arbor DDA has a current contract with the city that runs through 2015.

However, Kunselman’s proposed budget amendment would have essentially ignored that contract, and restored oversight of the city’s parking system to the city’s public services unit, by transferring all of the DDA’s parking funds to the city and eliminating two full-time employees at the DDA. [.pdf of Kunselman's resolution as proposed]

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. [Full Story]

The gathering of Ann Arbor city council members tonight – May 23 – counts not as a separate meeting, but rather as a continuation of the same meeting the council began on May 16. Because of issues that could remain unresolved, councilmembers are likely to recess tonight’s meeting as well, to be continued on Tuesday, May 31 – after the Memorial Day holiday.

This is a preview of the council’s continued meeting, which starts at 7 p.m. in council chambers at city hall. Topics that council might address include excess TIF (tax increment finance) capture in the Ann Arbor Downtown Development Authority district, a new parking contract with the DDA, and possible amendments to the FY 2012 budget. Factors that might play a role in council’s deliberations include alternative calculations of the excess TIF capture, and issues of control regarding components of the proposed parking contract – such as giving the DDA sole authority to set parking rates. [Full Story]

Ann Arbor Downtown Development Authority special board meeting (May 20, 2011): A special meeting held by the board of the DDA on Friday was meant to give some final resolution to the DDA’s side of a new contract under which it would continue to operate the city’s public parking system.

It was also intended to settle the matter of excess capture of TIF (tax increment finance) revenue in the DDA district – an issue raised by the city of Ann Arbor just before the DDA board had originally planned to vote on the new parking contract on May 2.

The board did vote on Friday to affirm a calculation by DDA staff that roughly $473,000 of excess TIF capture since 2004 would be divided among the following taxing authorities, which have a portion of their tax revenues captured in the DDA TIF district: Washtenaw County; Washtenaw Community College; and the Ann Arbor District Library.

Based on a representation at the special meeting by mayor John Hieftje – who has a statutory seat on the DDA board – the city of Ann Arbor is likely to agree to “forgive” the $711,767 in excess TIF capture that would be due to the city. More than that amount has effectively already been returned to the city, in the form of a roughly $0.5 million annual grant to the city to help make bond payments on its new municipal center, and a $1 million expenditure to demolish the old YMCA building, as well as other grants. In total, around $7.5 million has gone to the city, according to the DDA.

At Friday’s special meeting, the DDA board also voted to ratify its side of a new contract under which it would continue to operate the city’s public parking system. Among other features, the new contract would obligate the city of Ann Arbor to report regularly on how it is using public parking system revenues for street repair in the downtown, and how it is enforcing parking regulations downtown.

More controversially, the new contract would allow the DDA to set parking rates. Currently, the DDA forwards proposed rate changes to the city council, which can then veto the DDA’s proposal if it acts within 60 days. If the council does not act to block the rate change, the change is enacted. Although Hieftje said at the DDA board meeting he felt there was adequate support on the council to approve such a contract, there are currently at least five likely no votes on the 11-member council.

Also controversial is the exact percentage of gross revenues the city would receive from the public parking system. Before the issue of the excess TIF capture arose, the DDA board was poised to ratify a parking contract that would transfer 17% of gross parking revenues to the city of Ann Arbor’s general fund. At Friday’s special meeting, the resolution before the board dropped that number to 16%. Hieftje proposed an amendment to raise the figure to 17%. That amendment was attached to a contingency that the city council would provide a plan amendable to the DDA in which the city would “underwrite” the DDA’s fund balances. It was the 17% with a contingency that the DDA board passed.

So the special DDA board meeting did not settle with finality either the issue of the excess TIF capture or the DDA’s side of the parking contract. For the TIF capture issue, the relevant taxing authorities – especially the city of Ann Arbor – will need to affirm the solution that the DDA board approved.

For the parking contract issue, the DDA’s contingency means that the city council’s Monday, May 23 meeting – which is a continuation of its May 16 meeting, when it was supposed to approve the FY 2012 budget – will likely be recessed and continued again on May 31.

One possibility for how events would unfold is this: (1) May 23 – the city council ratifies the city’s side of the parking contract and provides the plan for underwriting DDA fund balances; city council also deliberates and amends FY 2012 budget but does not take a final vote on it; (2) May 24-27 – DDA schedules a special meeting to accept the parking contract contingency; and (3) May 31 – city council resumes the meeting started May 16 and previously continued on May 23, and approves FY 2012 budget. [.pdf of draft parking contract] [Full Story]

At a special meeting held at noon on Friday, May 20, the board of the Ann Arbor Downtown Development Authority voted to return $473,365 in taxes previously captured as part of the DDA’s tax increment finance (TIF) district. The money will be divided among three taxing authorities: Washtenaw County ($242,179); Washtenaw Community College ($156,520); and the Ann Arbor District Library ($74,666).

The decision was prompted by questions raised on Friday, April 29 by the city of Ann Arbor about the implementation of the city’s ordinance governing TIF capture for the DDA district. The ordinance includes a clause stipulating that if the growth rate in the TIF capture exceeds what is anticipated in the formal TIF plan, at least half of the excess must be divided proportionately among the taxing authorities that had some of their taxes captured in the TIF district.

The total amount of excess TIF capture that has accumulated since 2004 in the Ann Arbor DDA district is $1,185,132. The difference between that total and the combined $473,365 to be paid to Washtenaw County, WCC and AADL is $711,767. That difference is the proportionate share that would be due to the city of Ann Arbor (including the Ann Arbor Transportation Authority), which also has some of its taxes captured in the DDA TIF district. In fact, around 60% of the taxes captured in the TIF district are due to city of Ann Arbor millages.

However, Friday’s resolution included a “whereas” clause indicating that the city of Ann Arbor is likely to recognize that the $711,767 in excess TIF capture has effectively already been returned to the city, in the form of (1) a roughly $0.5 million annual grant to the city to help make bond payments on its new municipal center, and (2) a $1 million expenditure to demolish the old YMCA building, as well as other grants.

The determination of the excess was based on: (1) the “optimistic” projections in the TIF plan; (2) the combined real and personal property valuations in the district; and (3) excess growth calculated by comparing the actual growth rate between successive years against the forecast growth rate in the TIF plan between those years.

The payments to the other three taxing entities are planned to be made before June 30, making them a part of the 2011 fiscal year, which ends June 30. That will require the board to amend the FY 2011 budget.

The financial impact of the payments on the DDA led the board on Friday to review the financial component to the new contract currently being negotiated with the city under which the DDA operates Ann Arbor’s public parking system.

Before the excess TIF issue came to light, the DDA board had been prepared on May 2 to agree to a contract that would have transferred 17% of gross parking revenues to the city each year. Gross parking revenues are projected to be around $16 million in the next year.

At Friday’s meeting, the DDA board ratified its side of an agreement that would transfer 17% of gross parking revenues to the city, but added a contingency that would require the city of Ann Arbor to formalize a plan proposed by mayor John Hieftje to backstop fund balances for the DDA.

The contingency means that the city council’s May 16 budget meeting, which is continuing on May 23, will likely continue past that Monday to resume again on Tuesday, May 31. Hieftje, who also sits on the DDA board, said he felt there would be sufficient support on the council on May 23 to ratify the parking contract and formalize the backstopping plan.

The DDA will need to schedule another special meeting the week of May 23 after the council meets to resolve the contingency. The council would then be able to finalize its budget on May 31.

This brief was filed from the DDA’s offices at 150 S. Fifth Ave., where the special meeting took place. A more detailed report will follow: [link] [Full Story]

Ann Arbor Downtown Development Authority board meeting (May 2, 2011): At its Monday meeting, the DDA board was expected to ratify its side of a new contract under which the DDA would continue to operate the city of Ann Arbor’s public parking system.

Instead, the board received this news from the chair of its bricks and money committee: The city has raised the possibility that the DDA might need to return money to various taxing entities – including the city of Ann Arbor – from the taxes captured through the DDA’s tax increment finance district. The city communicated its concern to the DDA on Monday morning, the day of the noon meeting.

The issue concerns the DDA’s TIF plan, which was renewed in 2003, and language in the city’s ordinance establishing the DDA under the state’s enabling legislation. The TIF plan contains projections for the growth in taxable value of property (both real and personal) in the district. The city’s ordinance stipulates that if the actual “captured assessed valuation” grows at a rate faster than the expectation expressed in the TIF plan, then at least 50% of the additional amount must be returned proportionately to the taxing authorities from which the taxes were captured.

The vagueness of the ordinance language leaves several open questions that will require further review by the city attorney’s office and the DDA’s own legal counsel, as well as the financial staff from both organizations.

Those questions include: (1) What’s the relevant time period? (2) Which set of TIF plan estimates are applicable – the one labeled pessimistic, optimistic or realistic? (3) Who is the responsible party for adherence to the ordinance? (4) Does the ordinance language refer to real property only or also to personal property? (5) Do payments already made by the DDA to the city of Ann Arbor out of the TIF for the new municipal center count towards any sum that might need to be returned?

After hearing the news, the board decided to table the resolution on its agenda that would have ratified the DDA’s side of a new parking contract under which it would continue to manage the city’s parking system. [Previous Chronicle coverage: "Column: Ann Arbor Parking – Share THIS!"]

Board members recognized that it would likely be necessary to convene a special meeting of the board, given the city’s need to approve its budget on May 16. Later the same day, on the evening of May 2, the city council struck from its agenda the item that would have ratified the city’s side of the new parking contract. The city council has not yet weighed in on the text of the contract, but did express its view on the financial terms at its April 19 meeting.

As DDA board members absorbed the news about the TIF question, they heard their usual set of reports from their committees and wrapped up the meeting is less than an hour – they had no further business to transact. Board member Russ Collins, who was prepared to call in to the meeting from Detroit, where he’d been summoned for federal jury duty, did not need to do that.  [Full Story]

At its May 2, 2011 meeting, the Ann Arbor Downtown Development Authority board delayed voting on the new parking contract under which the DDA would continue to operate the city’s public parking system.

An issue identified by the city of Ann Arbor late Friday raised questions about whether some of the tax increment financing (TIF) revenue captured since 2002 by the DDA should, in fact, be returned to the taxing authorities from which it was collected. So the board wanted additional time to clarify the issue before voting on the contract.

Added information after original publication: [At issue is the proper interpretation of the following paragraph of the city's ordinance establishing the DDA: "If the captured assessed valuation derived from new construction, and increase in value of property newly constructed or existing property improved subsequent thereto, grows at a rate faster than that anticipated in the tax increment plan, at least 50% of such additional amounts shall be divided among the taxing units in relation to their proportion of the current tax levies. If the captured assessed valuation derived from new construction grows at a rate of over twice that anticipated in the plan, all of such excess amounts over twice that anticipated shall be divided among the taxing units. Only after approval of the governmental units may these restrictions be removed."] [.pdf of Ann Arbor city ordinance establishing DDA]

The resolution to ratify the contract with the city was tabled by the board, and board members recognized that it would likely be necessary to convene a special meeting of the board, given the city’s need to approve its budget on May 16. [Previous Chronicle coverage: "Column: Ann Arbor Parking – Share THIS!"]

This brief was filed from the DDA offices at 150 S. Fifth Ave., where the board meets. A more detailed report will follow: [link] [Full Story]

It’s budget season for the city of Ann Arbor.

Over the last half decade, Ann Arbor’s annual spring budget conversation has evolved to include a discussion of public parking system revenues.

This year is no exception. The city council’s public hearing on the budget takes place at its May 2 meeting, with a vote on the 2012 fiscal year’s budget scheduled for May 16. At that May 2 meeting you’ll also hear the city council discuss revenues from the public parking system. The board of the Ann Arbor Downtown Development Authority – which manages the city’s public parking system – will meet at noon the same day to ratify its side of a contract renewal.

As likely as any other scenario is an offer from the DDA for the city to receive 17% of gross revenues from the public parking system for each year of an 11-year term. But that offer stands a decent chance of getting rejected by the city council. The city’s last bargaining position was 18% for a 10-year term and multiple three-year renewals.

Public parking revenues were already part of council deliberations at a city council budget work session on April 11, when city administrator Roger Fraser had given a dress rehearsal of his budget proposal. At the work session, councilmembers and Fraser played out a scene, in which councilmembers offered up questions to Fraser to elicit this conclusion: If the city does not extract enough revenue from the city’s public parking system, the city will need to lay off additional police or firefighters – four this year and two the following year.

The scene was reprised on April 19, when the city’s budget was formally premiered. The budget did not appear to depart in significant ways from the department-by-department budget impacts that city managers have presented to the council at a series of work sessions since the beginning of the year.

On April 19, it was the city’s CFO Tom Crawford (later in the meeting to be appointed interim city administrator) who played the role of the “numbers guy.” So it was Crawford who gave the recommendation in response to councilmember prompts: Without sufficient revenue from the public parking system, he would recommend laying off an additional four public safety officers. That’s in addition to the five police officers, three other non-officer positions in the police department, and five firefighters who are already slated for layoff.

Councilmembers Christopher Taylor, Carsten Hohnke, Marcia Higgins, Stephen Kunselman and mayor John Hieftje played starring roles in their portrayal of elected officials that evening. But more to the point of this column, I wonder who the city council’s imagined audience is for this sort of theater? Presumably it’s for an audience that pays the price of admission. But in Ann Arbor, it’s an audience that typically doesn’t pay much attention: the city’s shareholders.

Yes, that’s exactly the word I want. Shareholders. [Full Story]

Ann Arbor city council meeting (April 19, 2011): The city council delayed a second and final vote on two local laws that involve regulation of medical marijuana businesses in the city – one on zoning and the other on licenses.

After public hearings on the two medical marijuana laws, the council did not deliberate long in deciding to postpone both votes until its next meeting, on May 2. Substantive amendments that had been presented to councilmembers late that day for consideration made them reluctant to attempt grappling with the amendments in detail. The May 2 vote on the two laws will likely count only as their initial approval, assuming the amendments are adopted at that meeting. The laws would then need an additional final reading after May 2 before they are enacted.

A tweak to the city’s panhandling ordinance was given its second and final approval at the April 19 meeting. That change to the existing ordinance had come as a recommendation from a task force that worked for six months on the issue, following up on a longer effort in the early 2000s that had led to adopting the language in the existing ordinance.

The longest deliberations of the night involved a resolution of instruction to the council’s “mutually beneficial” committee, which is currently negotiating a new contract under which the Ann Arbor Downtown Development Authority would continue to manage the city’s public parking system. The direction given to the committee was not to stay firm with its previous bargaining position, but rather to escalate the city’s expectations for revenues from the public parking system.

Previously, the city’s committee had taken the position that the city should receive 16% of gross parking revenues in the first two years of a 10-year contract, and 17.5% in remaining years. That compared with the DDA’s position that the city should receive a flat 16% across all years. But at the meeting, the council voted to direct its committee to take the position that the city should receive a flat 18%. The council’s deliberations included comments directed towards the DDA that could fairly be described as inflammatory.

Called to the podium to comment on the parking revenue figures and the DDA’s overall financial health was the city’s chief financial officer, Tom Crawford. Later in the meeting, Crawford was appointed interim city administrator, effective April 28. Current administrator Roger Fraser is leaving the post to take a job as a deputy treasurer for the state of Michigan.

Although councilmembers did not comment on it, Fraser was attending his last meeting of the council as city administrator. And in his final major act, he gave a formal presentation to the council of his proposed fiscal year 2012 budget, as required by the city charter. The charter stipulates that the council will need to amend and approve the budget by May 16, its second meeting that month. [Full Story]

At its April 19, 2011 meeting, the Ann Arbor city council instructed its “mutually beneficial” committee – which is currently renegotiating a new contract under which the Ann Arbor Downtown Development Authority would continue to operate the city’s public parking system – to change its position, by escalating its request for additional parking revenues. The council voted to direct the committee to now ask the DDA for 18% of gross parking revenues in each year of a 10-year contract. The vote was 9-2, with dissent from Christopher Taylor (Ward 3) and Sandi Smith (Ward 1).

The city’s negotiating team had previously been insisting that in the first two years of a 10-year contract, 16% of gross revenues to the public parking system would be allocated for use by the city at its discretion, with that amount rising to 17.5% of gross revenues in remaining years.

The DDA’s position had been consistent with the city’s previous request for the first two years of the contract, which would have the city withdrawing 16% of gross revenues from the public parking system in each of those years. But the DDA’s position is that for remaining years of the contract, the city’s share of gross parking revenues should remain at 16% instead of rising to 17.5%.

The city’s chief financial officer, Tom Crawford, said on the flat-16% scenario, he would recommend cutting four police or firefighters this year and two additional police or firefighters next year – the first two years of the proposed parking contract.

The decision to bring a resolution of instruction to the council had come at a meeting between the respective mutually beneficial committees of the city council and the DDA on Monday morning, April 11. [For detailed previous coverage: "City, DDA Continue to Talk Parking, Taxes"]

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

At a 7:30 a.m. Monday, April 11, 2011 meeting of two “mutually beneficial” committees – one composed of Ann Arbor Downtown Development Authority board members and the other made up of city councilmembers – a consensus was reached that the full city council should now give some direction on the new contract under which the DDA would continue to operate the city’s public parking system. The two committees agreed that a “resolution of instruction” should be put to a city council vote at the council’s April 19 meeting.

The contract will call for the city of Ann Arbor to be paid a percentage of the public parking system’s gross revenues. The two committees have been unable to reach a consensus on that percentage. So on April 19, the council will be presented with two options: (1) 16% in each of the first two years of a 10-year deal, and 17.5% in the remaining years – the 16-16-17.5 scenario, which is advocated by the city’s committee; (2) 16% in every year of a 10-year deal – a flat-16 scenario reflecting a compromise from an earlier DDA board position.

For additional details and history of the negotiations, see previous Chronicle coverage: “City, DDA Continue to Talk Parking, Taxes”

On the council’s committee are councilmembers Carsten Hohnke, Margie Teall and Christopher Taylor. Serving on the DDA committee are Gary Boren, Russ Collins, Roger Hewitt and Sandi Smith. Monday’s April 11 meeting was attended by Smith and Teall in person, with Hewitt, Taylor and Hohnke joining by conference phone. Sue McCormick, public services area administrator for the city, also attended the meeting. [Full Story]

Ann Arbor Downtown Development Authority board meeting (April 6, 2011): Since June 2010, the city of Ann Arbor and the Ann Arbor DDA have been negotiating a new contract under which the DDA would continue to operate the city’s public parking system.

While the city and the DDA have achieved much agreement on the non-monetary details of the arrangement, Wednesday’s board meeting left the financial piece still unclear.

The board discussion included a focus on the contrast between the combined fund reserve of the DDA – which includes those funds it collects as a tax-increment finance authority – and the reserves of just the public parking fund. Sandi Smith, who’s a DDA board member and an Ann Arbor city councilmember, stressed throughout the conversation that it’s not just the overall fund balance, but the public parking fund balance itself that needs to be monitored.

Last week, the board had come to a consensus that the public parking system could absorb a payment to the city equal to 16% of gross parking revenues in every year of a 10-year contract, which represented a revision upward from its previous position of 14% in the first two years, followed by 15% in subsequent years.

After lengthy back-and-forth, the only consensus reached by DDA board members was that they were not prepared to revise their position upward (again) to meet the city’s request that the city be paid 16% of the public parking gross revenues in the first two years of the contract, but 17.5% in remaining years. Mayor John Hieftje, who serves on the DDA board, was the lone voice of support for that position.

The mayor also found himself somewhat isolated on another issue in front of the board at its Wednesday meeting – the only action item on the agenda. The board voted to sign a new, more favorable lease agreement for its roughly 3,000 feet of office space at 150 S. Fifth Ave. for a term of five years.

Although the mayor voted with the rest of the board in authorizing the lease agreement, he had announced at the city council’s Monday, April 4 meeting that he would be asking his fellow DDA members to consider moving into space that’s currently being renovated in the city hall building. Two days later, at Wednesday’s DDA board meeting, the mayor appeared to understand that there was little enthusiasm on the board for the move, based partly on the fact that it would cost the DDA more in the short term.

At the meeting, the board also heard its usual range of reports and communications, including an update from DTE on the addition of a new substation near the Broadway bridge, to meet increased demand for electricity. [Full Story]

At its April 6, 2011 meeting, the Ann Arbor Downtown Development Authority board authorized signing a new five-year lease for its office space at 150 S. Fifth Ave.

Under terms of its current lease, which expires on June 30, 2011, the DDA pays $26 per square foot for 3,189 square feet of office space. Under terms of the new lease, the DDA would pay $16.75 per square foot in the first year of the five-year deal, for a total of $53,415. After the first year, the amount would increase to $17.25, $18, $18.75 and $19.50 per square foot.

The decision to renew the lease came in the context of mayor John Hieftje’s announcement at the April 4 city council meeting that he’d be inviting the DDA board to consider moving the DDA offices to newly renovated space in the city hall building. But at the Wednesday DDA board meeting, he indicated that he’d discussed the lease with DDA board member Roger Hewitt and understood that securing just a one-year renewal of the lease would mean agreeing to the less favorable terms of the current lease. Hieftje voted for the five-year lease extension, along with the rest of the board.

This brief was filed from DDA offices at 150 S. Fifth Ave. A more detailed report of the board meeting will follow: [link]
[Full Story]

Ann Arbor City Council meeting (April 4, 2011): At its Monday meeting, the council focused much of its time discussing the future of downtown Ann Arbor.

Councilmembers voted on two major downtown-related agenda items – one affecting the immediate future of an individual parcel, the city-owned Library Lot. The other item involves a process by which the Ann Arbor Downtown Development Authority would lead the planning of development for multiple downtown parcels, including the Library Lot.

The council voted, over dissent from two of its members, to end the RFP process for the Library Lot and to reject a draft letter of intent they’d discussed at a March 14 work session, which would have called for the city to work with Valiant Partners to craft a development agreement for construction of a conference center and hotel on the lot. The Ann Arbor DDA is currently building a roughly 640-space underground parking garage on that parcel.

Based on a separate resolution passed by the council, the future use of the Library Lot could emerge from a process to be led by the DDA. The council required lengthy deliberations before narrowly approving an amendment that reduced the area of focus for the DDA-led process. The amendment limited the area to the square bounded by Ashley, Division, Liberty and William streets, which would include the Library Lot on South Fifth Avenue, the Kline Lot on Ashley, the old YMCA Lot at Fifth and William, and the Palio Lot at Main and William.

The resolution on the DDA-led process is part of a broader ongoing negotiation between the city and the DDA, related to the contract under which the DDA operates the city’s public parking system. That contract is being renegotiated, and since January, the city has not budged from its position that the DDA should pay the city a percentage-of-gross parking revenue of 16% in the contract’s first two years and 17.5% in years thereafter. It appears that the DDA board is gradually conceding to the city’s bargaining position. That will become clearer at the DDA board meeting on Wednesday, April 6.

The city’s negotiating position is based in part on the idea that the DDA is, as mayor John Hieftje has described it, “an arm of the city.” Hieftje’s view of the DDA as part of the city was further accentuated on Monday, when he announced at the end of the council’s meeting that he would be inviting the DDA to move its offices into newly-renovated space in the city hall building. The DDA currently leases space about a block south of city hall.

Also a part of Monday’s downtown-themed meeting was initial approval the council gave to a revision to the city’s ordinance on panhandling. That ordinance revision – which added some areas where panhandling is prohibited – will require a second reading and a public hearing in front of the council before it can be enacted.

An additional part of the downtown discussion came at the start of the council’s meeting, with a presentation on work being done to plan and study the 415 W. Washington parcel for future use as a center for artists and as a greenway park.

In non-downtown business, the council accepted a series of easements that will set the stage for TIGER II grant funds – already awarded by the federal government – to be formally obligated to the city. At stake is $13.1 million, which is currently still part of a continuing resolution for the federal budget. But that continuing resolution expires April 8, so the council was acting with some urgency.

The council also gave necessary approvals for a bus pullout to be constructed on Washtenaw Avenue, and authorized emergency purchase orders for furniture. And the council heard a presentation from Andrew Brix, the city’s energy programs manager, about efforts to increase the percentage of renewable energy that the city uses. [Full Story]

During his communications period at the conclusion of the Ann Arbor city council’s April 4, 2011 meeting, mayor John Hieftje announced that he and councilmember Sandi Smith (Ward 1) would be presenting the Ann Arbor Downtown Development Authority with an invitation to move its offices into newly renovated space on the lower level of city hall. That invitation will be made at the DDA’s Wednesday, April 6 board meeting. The DDA is currently contemplating signing a lease renewal for its existing space at 150 S. Fifth Ave.

This brief was filed from the city council’s chambers on the second floor of city hall, located at 100 N. Fifth Ave. A more detailed report will follow: [link] [Full Story]