Fourth & William parking structure viewed from the Fourth Avenue side, where Greyhound buses will likely be staging, when a lease of space in the structure is finalized. Currently that’s where AAATA buses stage, but they’ll be moving when the driveway is poured for the new Blake Transit Center in the next few weeks.

Though the board did not take action on adding circulator bus service to the downtown, the idea was brought up and referred to the operations committee. That was not unexpected, as the board had previously passed a resolution pledging possibly to increase the DDA’s support of transportation, if the Ann Arbor Area Transportation Authority’s new millage were to be approved. One specific idea mentioned at the May 7 meeting was to provide a shuttle on Saturdays between the Ann Ashley parking structure and the Ann Arbor farmers market.

The board did take action on two other transportation-related items: a lease to Greyhound for use of office space to be built out in the Fourth & William parking structure; and the setting of a $5 million project budget for  renovations at that same parking structure.

The Greyhound lease would provide a temporary location for Greyhound over the next two years as the bus company will not be able to remain in its Huron Street location – because the property owner, First Martin Corp., is planning a hotel at that spot. After assessment of operations at AAATA’s new Blake Transit Center (BTC), when construction is complete, Greyhound could eventually find a home at the BTC – if it turns out to be feasible.

Establishing a $5 million project budget for the Fourth & William parking structure renovations will allow the creation of construction drawings, and after that a request from the city council to approve the issuance of bonds to cover the cost of the project. The renovations are prompted by a need to replace the aging elevator in the southwest corner of the building, but will likely include improvements to facades and possibly a build-out of ground-floor area for use as retail space.

The Fourth & William parking structure was also part of the meeting’s energy theme. It already includes two parking spaces that are equipped with chargers for electric cars. During public commentary, the board heard from a monthly permit holder at Fourth & William, who wanted to transfer her monthly parking permit to the Library Lane structure. The two spaces at Fourth & William are often occupied, she reported, and she thinks she might have better luck at Library Lane, which offers six electric vehicle chargers.

In another energy-related action, the board delayed a decision on paying roughly $100,000 for the conversion of DTE-owned streetlights in the downtown area to LED technology. In delaying, board members cited the fact that the roughly $20,000 in energy savings would not be realized by the DDA, but rather by the city of Ann Arbor’s general fund. The resolution could be approved at the board’s June meeting and still meet a DTE deadline.

Among other information reported at the meeting, the DDA has decided that it will not lease the former Y lot back from Dennis Dahlmann so that it can continue to be used as part of the public parking system until Dahlmann develops the property. Under the terms of the purchase agreement between the city of Ann Arbor and Dahlmann a certificate of occupancy for a new building on that site is required by January 2018.

In other business, the board voted to deny an appeal made under Michigan’s Freedom of Information Act.

Transportation: $5M Budget for Fourth & William Renovation

The board considered a resolution establishing a $5 million project budget for renovations at the Fourth & William parking structure in downtown Ann Arbor.

Image from preliminary drawings by the Carl Walker Inc. design team for renovated southwest elevator and stair tower for the Fourth & William parking structure.

The renovations are prompted by a need to replace an aging elevator and stair tower at the southwest corner of the structure. The amount would be covered by issuing bonds, but approval of that step would come later, and would require approval from the city council – because the bonds used by the DDA have historically been issued by the city.

The Fourth & William structure, at 994 spaces, is one of the largest in Ann Arbor’s parking system – but has elevators that are more than 30 years old. [A recent trip from the ground floor to floor 7 was timed by The Chronicle at 45 seconds. The comparable trip at the newer Fourth & Washington parking structure took about 17 seconds.]

In addition to replacing the elevator and stairway tower, the DDA is considering some work on the south and east sides, using some surfaces that are more reflective and perhaps installing some awnings. The resolution also describes the possibility of expanding the pedestrian lobby area, updating parking equipment, adding electrical capacity and additional electric vehicle charging units, and building out some of the first floor area for active uses. The stairway and elevator towers would be glass-enclosed.

The stair tower and elevator portion of the project was estimated to cost on the order of $3 million. The first, very preliminary drawings were provided to the DDA’s operations committee at its Feb. 26 meeting. That preliminary work was authorized by the DDA board at its Jan. 8, 2014 meeting.

By way of background, at that Jan. 8 meeting, the DDA authorized up to $40,000 for Carl Walker Inc. to develop architectural renderings for renovations to the southwest stair tower and elevators of the Fourth & William parking structure.

The DDA was presented with two options for the renovations, based on either a two-phase or a three-phase approach. In both scenarios, the goal is to keep the parking structure open for business during construction.

The two-phase approach would last about a year – from August 2014 through July 2015. The three-phase approach would take five months longer – through about December 2015.

Chronicle chart of potential timeline for renovations to the southwest elevator at the Fourth & William parking structure.

The resolution considered by the board on May 7 authorizes the DDA’s executive director to oversee issuance of bid documents and to sign a contract with Carl Walker Inc. to prepare construction drawings for the project. Those construction drawings are to be limited initially to the stair tower and elevator replacement project. The selection of a contractor for the work would need separate approval by the DDA board.

Transportation: Fourth & William Renovation – Board Deliberations

John Splitt reviewed the content of the resolution. The staff of Carl Walker Inc. – Mike Ortlieb, Josh Rozeboom, and Carl Luckenbach – attended the most recent meeting of the operations committee, Splitt reported. The team had shown the committee renderings of the project, including a new rendering of the lobby. Splitt described the current lobby entry as dingy, small and congested. Committee members were pleased to see how that would look, he said.

The committee wanted to set a project budget of $5 million, before moving onto the next phase – which is the creation of construction drawings. This is a project that the DDA would most likely bond for, he said. Splitt reported that the DDA had met with the Main Street Area Association – and the consensus of that group was that something definitely needed to be done about the stair and elevator towers, even though construction would be disruptive and challenging. The Main Street Area Association also thinks it’s important for the project to be done, he said.

Splitt described how Carl Walker Inc. would also be exploring the feasibility of a first floor buildout onto Fourth Avenue – to be used, for example, as space for residential incubators, saying that a number of ideas have been floated for activating the sidewalk on Fourth Avenue. Discussion would continue about that, along with facade improvements on the south and east sides of the parking structure. The committee was still in the talking phase about those improvements, and those discussions would continue at the next meeting of the operations committee, Splitt concluded.

John Mouat sought some clarification about which aspects of the project the construction drawings would cover. His understanding, which Splitt confirmed was correct, was that the initial construction drawings to be prepared would be confined to the stair and elevator tower in the southwest corner and would not include the other aspects of a future project that Splitt had described.

Outcome: The resolution establishing a project budget of $5 million for renovations to the Fourth & William parking structure was unanimously approved.

Transportation: Greyhound Lease

The board considered a resolution authorizing its executive director to come to terms with Greyhound on a lease for space in the Fourth & William parking structure in downtown Ann Arbor. Greyhound needs to vacate its current facilities on Huron Street between Ashley and Main – because that location will become the site of a hotel when First Martin Corp. gets approval for a hotel project it plans to build there.

The term of the lease would be two years.

The lease would cost Greyhound $1,525 a month, which works out to $36,600 for the two-year period. Buses would not pull into the structure, but would stage on Fourth Avenue. Currently, Ann Arbor Area Transportation Authority buses are using the west side of Fourth Avenue for staging. But in the next few weeks, when the new Blake Transit Center driveway is poured – which runs between Fourth and Fifth avenues – AAATA buses will no longer need the west side of Fourth Avenue for staging.

The lease by the DDA to Greyhound would include about 400 square feet of office space in the structure, which would be finished out by the DDA for Greyhound. The lease rate works out to about $40 per square foot. The first year of rent is anticipated to cover the cost of the build out. The space to be built out is located under a speed ramp for exiting the parking structure.

The DDA operates the public parking system on behalf of the city of Ann Arbor using city-owned structures, under a contract with the city of Ann Arbor. In order to lease the city-owned property to a third party, the clause in the contract on which the DDA will apparently rely is this one: “The DDA shall have the right to allocate portions of facilities to third party for long term parking usage and mutually agreed upon [by the city and the DDA] non-parking-related usage. The DDA shall provide an annual report to the City of any allocation identifying the specific facility and the size, nature and term of the allocation.” A traffic control order will need to be obtained from the city to allow the staging of buses in the public right-of-way.

The historic sign that is a feature of Greyhound’s current location will not be moved to the Fourth Avenue site.

Transportation: Greyhound Lease – Board Deliberations

Roger Hewitt noted that Greyhound bus operations are currently located on Huron Street. Greyhound is being “evicted” Hewitt said, because a new hotel is being built on the spot. Hewitt ventured that Greyhound would eventually like to relocate its operations to the AAATA’s Blake Transit Center, but it’s not clear at this time whether there will be space at that facility for Greyhound. So Greyhound is looking for a temporary situation, and perhaps in the longer term, in the general area of Fourth Avenue. The DDA has discussed with Greyhound the possibility of leasing a space along Fourth Avenue inside the Fourth & William parking structure. The office space would be underneath the speed ramp that exits onto Fourth Avenue, he said.

DDA board member Roger Hewitt.

The proposal from Greyhound included a two-year lease with an option to terminate the lease with a 90-day notice. The DDA was not comfortable with such short notice, given that there is a buildout expense for the DDA. So Greyhound has agreed to modify the proposal so that Greyhound would not give notice during the first year of the lease. But they could give a 90-day notice during the second year of the lease. Hewitt described the rate of the lease as “a substantial amount per square foot,” saying it was at the top of the market.

There would be a substantial buildout cost, but Hewitt felt that the two-year lease would exceed the amount of the buildout. He ventured that even just one year of the rental would probably cover the buildout cost. The main advantage, Hewitt said, was that it moved Greyhound bus operations onto Fourth Avenue – so that connections can be made immediately to the Blake Transit Center just across the street. It puts all of the bus operations in the downtown area onto the same block. It would also give some activation and use of the parking structure on the Fourth Avenue side, Hewitt said.

Russ Collins questioned why the phrasing in the resolution described a “temporary lease.” He ventured that it was simply a lease.

Hewitt indicated that the word “temporary” was included because Greyhound did not intend it to be a permanent location. But he allowed that yes, it was a two-year lease. The board agreed to strike the word “temporary.”

Responding to questions from board members, Hewitt indicated that the lease amount worked out to about $40 per square foot. That had been the Greyhound proposal, Hewitt said. Susan Pollay, executive director of the DDA, reported that she’d ask for some input from some local real estate brokers to get a sense of the market for ground-floor leases in that general area. She described it as “not a very lovely space,” so she felt that Greyhound was paying market rate or above for the space.

Hewitt described the lease rate as at the top end of the market. That prompted the response from city administrator Steve Powers: “Well done!” Powers asked about a reference in Greyhound’s request for assistance from the city’s building official. Pollay indicated that the DDA had not wanted to pursue the possibility of a lease, if it turned out that it was not possible to make the space meet the city’s building code. The city building official had spent some time looking at the space, and in his opinion it was possible to make the space meet city code, Pollay reported. Hewitt noted that the space was underneath a speed ramp for exiting the structure, so it’s “not the most wonderful space on the face of the earth.” He stated that he would personally not pay $40 a square foot for that space.

In response to a question about how the bus staging on the street would work, Pollay described how permission would be sought from the city for a traffic control order (TCO). The city’s public services area staff had already indicated that it would be possible for a TCO to be issued for this use. She noted that there is a TCO already in place for the AAATA buses to stage on the west side of Fourth Avenue during the Blake Transit Center construction. Once that traffic control order has ended, a new traffic control order for the Greyhound buses would be implemented, she said. Pollay indicated that the DDA had been asked to pursue this lease option with “all due haste,” so the idea would be that over the next few days the DDA would work with its legal counsel to review the lease, insurance issues, and the like.

Republic Parking, which is the DDA’s subcontractor for operating the city’s public parking system, had obtained several bids for the construction so the work could be pursued fairly quickly, Pollay said. The TCO processes were familiar to the DDA. She noted that Greyhound would not be bringing with it the sign that is affixed to its current facility.

John Splitt noted that the DDA would be spending money for the buildout – so he wondered if that needed explicit board approval. Pollay told him that if he felt that he wanted it to be included in the resolution, the amount would be “somewhere south of $30,000.” If the board wanted to add to the resolution that it was authorizing $30,000 to be spent, that could be added, she said.

Rishi Narayan asked if the built-out space would become wasted space, if Greyhound did not remain in the space: Could someone else use that space? Pollay told him that absolutely someone else could use it. As part of the renovations for the Fourth & William garage, Pollay continued, that could be something for the board to consider: What kind of use for that space would be a productive addition to the downtown? Hewitt noted that it could well be that Greyhound stays for longer than two years. Board chair Sandi Smith asked if Splitt wanted to add a second resolved clause, but Splitt indicated that if other board members were comfortable without specifying the dollar amount, he didn’t feel the need to add it. [Language to approve undertaking any necessary buildouts was added to the resolution, by the end of board deliberations – though not with a dollar amount attached.]

Hewitt indicated that the expenditure could be made within the existing budget, so no additional parking money would need to be allocated to cover the cost of the buildout. Collins felt that the resolution should be left as is, but asked the committee to keep the board informed. The buildout is implied with the lease, but if the lease did not come through for whatever reason, the board would be voting on something that might not even happen, Collins said.

Keith Orr got clarification that on-street parking spaces along Fourth Avenue were removed in order to accommodate the staging of AAATA buses during the Blake Transit Center construction. So the intention would be not to re-install those parking spaces.

Outcome: The resolution on the Greyhound lease was unanimously approved.

Transportation: Circulator, Shuttle

Board chair Sandi Smith noted that the kickoff to the farmers market season was that day. She described how crazy it gets in the neighborhood of Kerrytown where she and DDA board member Keith Orr own businesses. On Saturday mornings, the parking activity is well beyond capacity in that area, she said – and the farmers market is talking about adding even more vendors. It’s exciting, vibrant and fun to be there, but the most common complaint that Smith heard regularly is that people can’t find a place to park.

Smith noted that the large parking structure, at Ann Ashley Street, is very close to the farmers market – but it seems like it’s a ways away, particularly for people who are carrying bags of produce purchased at the market. She wondered if the DDA could undertake a pilot program to operate a shuttle. The shuttle could run between the Ann Ashley parking structure and a designated location at the farmers market. She described it as a “teeny little circulator,” saying that it could even be just a golf cart.

The goal of the circulator would be to begin to brand that parking structure so people realize it is really not all that far away. They might choose to walk, once they see that it is only two blocks away, she ventured. Smith said there’s difference between parking in a structure and street parking, venturing that people will park their car two blocks away, but they won’t park their car in a structure two blocks away.

Smith also suggested that the DDA could provide a reduced entry fee for the parking structure during the farmers market time – but she didn’t know if an additional incentive would be required, if the DDA was running a shuttle. She wanted the operations committee to take a look at it, even though by the time the operations committee reviewed it and any proposal came back to the board, it would already be June.

Roger Hewitt allowed that the topic could be placed on the agenda for the May committee meeting. He reiterated the point that the parking structure really is just two blocks away from the farmers market. He ventured that it might simply be a signage issue. He noted that based on his discussions with engineers, it would be possible to construct an entrance to the structure on Catherine Street. He was a little skeptical that a shuttle would be used, and doubted that a shuttle would be any quicker than just walking. But he allowed that something could be explored in terms of signage. He was not averse to exploring the signage issue.

Rishi Narayan also ventured that if good signage were in place, a shuttle might not be necessary. Keith Orr liked the idea a lot – because even with all the talk in the world about how near that structure is, there was still a psychological hurdle, due to the fact that it was on the other side of Main Street. He liked the golf cart idea.

In light of the previous day’s successful AAATA millage proposal, Smith said the board ought to be thoughtful about what that would mean in the context of the DDA’s budget – because it would increase the DDA’s tax capture. [The AAATA has estimated that about $119,000 of the 0.7 mill transit tax would be captured each year by the Ann Arbor DDA.] She thought it might be time to look at a small-scale circulator in the downtown. So Smith asked that the operations committee put consideration of such a proposal on its agenda.

Outcome: This was not a voting item.

Energy: LED Streetlight Conversion

The board considered paying $101,733 to DTE for converting 212 mercury vapor and high-pressure sodium streetlights in downtown Ann Arbor to LED technology.

Streetlight locations are mapped in the joint Washtenaw County and city of Ann Arbor GIS system. Data available by clicking on icons includes ownership as well as the lighting technology used. This one is a high pressure sodium light operating at 400 watts.

In 2007, the DDA had previously granted $630,000 for conversion of 1,400 other streetlights in the DDA tax capture district.

The 212 streetlights that haven’t yet been converted are owned by DTE, which would be undertaking the work. Currently, the city pays DTE $72,585 a year for the energy used by the 212 streetlights. After conversion, the annual cost for the 212 lights is expected to drop to $51,895, for an annual savings of $20,690.

After an EO (energy optimization) rebate of $10,224, the $91,509 cost would be recovered in just under 4.5 years.

The project would include converting 100 watt MV (mercury vapor), 175 watt MV and 100 watt HPS (high pressure sodium) lights to 65 watt LED (light emitting diode). Further, 400 watt MV and 250 watt HPS lights would be converted to 135 watt LED. Finally, 1000 watt MV and 400 watt HPS lights would be converted to 280 watt LED.

Energy: LED Streetlight Conversion: Board Discussion

Keith Orr reviewed how the effort dates back to 2007, to replace globe streetlights with LED fixtures. The resolution the board was considering would handle the remaining streetlights – the cobra-head fixtures. It was not optimal from the DDA’s point of view, he said, because the cobra-head streetlights are not at the pedestrian level. But it’s an upgrade that will help with the city’s and the DDA’s sustainability goals, Orr said. He noted that the payback would be just under four and a half years. It also supported the city’s budget, he said. The DDA would be paying for this out of its fiscal year 2015 TIF budget, Orr said.

Roger Hewitt responded to the proposal by saying that he was all in favor of LED lights, noting that he was on the board in 2007 when the DDA approved converting all of the pedestrian street lights to LED fixtures – and he recalled signing the check for $607,000 to do that. But he said he was a little disturbed by the fact that it was a grant to a private entity, when the savings and the financial benefit would then go to the city of Ann Arbor.

The DDA had spent many hours negotiating financial agreements with the city with respect to TIF capture and the parking agreement, Hewitt said. He called this resolution yet another transfer of funds from the DDA that eventually ends up in the city’s budget. It’s not that the amount is huge or is going to have an enormous impact, he allowed, but he’s becoming increasingly concerned as the downtown continues to grow, and there’s an increasing need for infrastructure to support that – whether it’s parking or transportation, or sidewalks. The improvements to be made as a result of implementing the streetscape framework plan would definitely have a big price tag on it, he said. And the parking system is continuing to show growth, and the system is already at a pretty high capacity, he said.

It’s not that this one thing is going to make a lot of difference, Hewitt allowed, but if the DDA continues to spend its money on a lot of small things, it would not have the funds that are necessary to do major infrastructure improvements. If the DDA did not have a fairly robust fund balance, it could not have built the new parking structure that was just built, Hewitt said. [He was referring to the Library Lane underground parking structure.] That had been critical to attracting Barracuda and Prime Research into the downtown and keeping those businesses there.

So Hewitt announced that he would be opposing this resolution. He allowed that LED streetlights are a great thing and he expected the resolution would pass, but he felt that more consideration needed to be given to a focus on major infrastructure costs, rather than the small transfers that ultimately sap the DDA’s fund balances.

John Mouat said he shared Hewitt’s concerns and observed that the letter from DTE had actually been sent to the city: “How did it wind up on our plate?” Susan Pollay, the DDA’s executive director, told Mouat that she worked continually to try to find areas of collaboration between the DDA and the city. In many ongoing conversations, she asks what the DDA can do to help be in alignment with the city. So this proposal had emerged from one of those conversations, she said.

City of Ann Arbor energy program analyst Nate Geisler.

Pollay invited Nate Geisler to the podium. He introduced himself as the energy programs analyst with the city of Ann Arbor. On behalf of the city’s energy commission and the city’s energy office, he acknowledged the past relationship between the DDA and the city on energy projects. He hoped it would continue. This proposal follows up on a project from the previous year, Geisler explained, which targeted high wattage fixtures. DTE can reserve about 200 lights for an energy optimization incentive rebate. Last year, about 200 lights had been identified throughout the city – in connection with a mercury vapor discontinuation campaign. Geisler noted that DTE is obliged to remove mercury vapor lights from its inventory.

This year, he said, in thinking about how to prioritize lights for conversion, the city had considered the DDA district. When an overlay of the streetlight inventory was done with the district, it was noted that it worked out to be about 200 lights. From year to year not much advance notice is given about whether the offering from DTE will happen – so the city doesn’t necessarily have money in its budget set aside for it. The idea was that because the city had worked with the DDA in the past on this type of issue, the city looked to the DDA as a possible source to help fund the conversion. That way, the entire inventory of streetlights within the DDA boundary would be done. That had been the approach the city had taken, Geisler said.

Mouat got confirmation from Geisler that the lights in question are in fact cobra-head lights, which are fairly tall. Mouat wondered if a shift would be made from overhead lights to more pedestrian lights as streetscape renovations are undertaken. He would hate to invest money in infrastructure that would be removed over the short term. Geisler indicated to Mouat that the city staff have been operating for a while under the assumption of the streetlight moratorium. So city staff was focused on the existing inventory and asking what it could do to reduce costs within the existing inventory.

By way of background, the “moratorium” dates from a 2005 city council budget resolution, which has been interpreted by city staff to allow increases in streetlights, if the increase in energy cost can be offset in some way. [.pdf of July 9, 2013 memo on the topic from city administrator Steve Powers.]

Rishi Narayan said his concern was based on the DDA’s long-term vision and the material discussed at the recent retreat. He asked what this project would be replacing. His understanding was that the DDA had a budget, and did not have a ton of excess cash. He felt that the LED conversion was a great idea, but he was operating on the assumption that it was replacing some ideas for projects that the board had previously discussed: “Or do we actually have an extra $100,000?”

Pollay responded by saying that there is never enough and the needs are always greater than resources. Pollay described the prioritization that the DDA did as involving the assignment of dollars so that they were available in particular areas. But this project had not been compared to other items on the project list, to see if there were other projects that the DDA wanted to do instead. The proposal had emerged from staff consultation, Pollay said. This had not been brought forward in the context of the other projects.

Narayan felt that if the DDA had spent a lot of time and energy on that list, and it should be used as a guide. This LED project was worthy of consideration, but it should be compared to other items on that list, he said. Al McWilliams noted that this allocation would be coming from the DDA, but the city would be realizing the savings from it.

DDA board member Al McWilliams.

He wanted to evaluate the $100,000 as an expense to the DDA. The DDA is not seeing the savings, so the DDA should be evaluating this proposal in terms of a $100,000 expense, not something on which the DDA would be realizing savings. He was more concerned about “getting our results that we want,” but he wondered if this project was really in the plan that the board had developed a couple of months ago. “Do we have that somewhere? Did somebody write that down?” McWilliams quipped.

Pollay suggested that the proposal could be reviewed by the operations committee later in May. Mouat commented on the city’s moratorium, saying that he did not think it was terribly well conceived when it was implemented seven years ago. He questioned whether the moratorium made sense in terms of the streetscape framework plan that the DDA was working on. He ventured that the DDA could ask the city to reconsider the moratorium. The DDA should be able to get at least something from the city in exchange for funding the LED conversion, and a revision to the moratorium might be that something.

Board chair Sandi Smith asked if a delay of one month would have an impact. Geisler explained that DTE is looking for a signed agreement by June 30. He pointed out that the actual cost to the DDA would be around $90,000, because the rebate would go to the DDA. Smith noted that the next board meeting would fall on June 4. Smith said that the DDA’s typical grant guidelines were to look for a match, and to ask in what way the DDA would be acknowledged for its contribution.

Outcome: The board voted unanimously to postpone consideration of the DTE grant.

Energy: Charging Stations

During public commentary at the start of the meeting, Nancy Cavanaugh introduced herself as a seven-year Ann Arbor resident. A couple of years ago she purchased an electric car and she has been using the electric charging station at the Fourth & William parking structure. Recently she’s had the experience that both of the charging stations at that parking structure were occupied when she has arrived. She noted that there is a waiting list for monthly permits. She said that based on her research, one to two of the six charging stations at the Library Lane parking structure are not being used. She allowed that she had not done extensive historical research on the question. She told the board that she would like to have the opportunity to park at the Library Lane parking structure.

Board chair Sandi Smith asked that the operations committee put the issue on their agenda. She noted that parking patrons at the Forest parking structure had created a self-organized rotating schedule – so that when someone parks at a charging station, they charge for a while and when the charge is complete, they move their vehicle. They’ve established an email group for communicating information about the occupancy of spaces, Smith said.

Russ Collins said that as an electric car driver, he’d observed that the Library Lane charging stations were also full during the second semester of University of Michigan classes. After the semester ended, he continued, the spots were less full. Collins ventured that a whole management system would be required, pointing out that it only takes about four hours to charge a car that is completely depleted. And most of the cars, when they are parked at a spot with a charging station, are not completely depleted, so they are charged within an hour or so.

Outcome: This was not a voting item.

FOIA Appeal

Under Michigan’s Freedom of Information Act, appeals of denials or redaction of records that are produced in response to a FOIA request are properly made to the head of the body. The DDA considers its board to be the head of the DDA as a public body. [.pdf of text of appeal made for redaction of email addresses] The board handled an appeal made by The Ann Arbor Chronicle.

Image of redactions made for email addresses of DDA board members on the grounds that to disclose them would be a clearly unwarranted invasion of privacy.

As she did at the board’s previous meeting, DDA executive director Susan Pollay presented to the board an appeal of a denial of records under Michigan’s FOIA. She told the board that it was her practice to redact email addresses that she understood to be personal email addresses to protect privacy. She noted that the appeal also asked that a felt tip pen not be used for redaction because that makes it difficult for OCR technology to process text. She asked the board for direction on the appeal.

Roger Hewitt moved that the appeal be denied. Al McWilliams asked if it was the same appeal as had been made at the previous meeting. Pollay explained that it was not the same appeal, though it dealt with a similar issue. Rishi Narayan noted that he had not attended the previous meeting, when the board had held had a closed session on the topic. He wondered if there was a need for a closed session.

Pollay explained to Narayan that the board had considered the written opinion of legal counsel, but not deliberated. Sandi Smith asked Pollay for clarification about the nature of the information that had been redacted, and Pollay contended that it’s personal information about people that is being redacted, not their names. Keith Orr implicitly rejected the argument in the language of the appeal that there was an interest on the part of a requestor in being able to contact individuals who sought to influence members of a public body – using in the same way those people were using to contact the members of the public body.

Orr contended that it’s not the DDA’s responsibility to provide contact information and there are other ways to find out how to contact people. Orr also contended that the DDA is not unlawfully redacting the information. Orr said that when he tries to do things in Adobe [as opposed to using a Sharpie] it takes longer, so the DDA would have to take a look at passing along additional costs to requestors.

Outcome: The board voted to deny the appeal.

Communications, Committee Reports

The board’s May 7 meeting included the usual range of reports from its standing committees and the downtown citizens advisory council.

Comm/Comm: Former Y Lot Lease

Roger Hewitt gave an update on the DDA’s response to Dennis Dahlmann, who has purchased the former Y site along William, between Fourth and Fifth avenues. Dahlmann has made a request from the DDA to continue to operate that site as a service parking lot as part of the public parking system for a period of two years. Dahlmann had offered to split the proceeds of the revenue, which he had estimated at about $90,000 apiece for the DDA and Dahlmann. Hewitt said he did not know how Dahlmann arrived at that estimate. [For additional background, see "Old Y Lot: 2 More Years of Surface Parking?"]

The question had been referred to Republic Parking, the DDA subcontractor for parking operations, and to DDA deputy director Joe Morehouse, to analyze whether there is a need in that area and whether it made financial sense for the DDA to continue to operate that lot. Republic had pointed out that the DDA has two parking structures near the surface lot – one on each side, with a combined total of over 1,700 spots. [Those are the Fourth & William structure and the Library Lane underground parking structure.]

Those are also the only two parking structures that generally are not at their highest capacity, whereas the rest of the system is essentially at capacity, Hewitt said. So Hewitt said there was excess capacity at those structures. The conclusion was that whatever revenue the DDA realized from continuing to operate the surface lot as part of the public parking system would reflect revenue the DDA would otherwise receive from people parking at other facilities. Hewitt said that the conclusion was that it did not make any sense financially or from the point of parking operations.

If Dahlmann wants to continue to pursue the option of using the lot for parking, he could ask for a special exception use to allow parking on that lot. In any case, there was a route the Dahlmann could take in order to operate a private lot at that location, Hewitt said. He added that the DDA had been operating the site as a surface parking lot only at the request of the city after the YMCA building had been demolished.

Responding to a question from board chair Sandi Smith, Hewitt said that excess capacity was determined by how often a parking structure hit 85%. Those two structures do occasionally hit 85%, he allowed, but rarely do they go above 90% or 95%. As far as the wait list goes, the DDA feels an obligation to reserve a significant portion in the structures for hourly users, Hewitt said. If the DDA sold additional monthly parking permits in those structures, it would impact the ability of hourly patrons to use the structures, Hewitt said. The DDA had been very clear about its intention – when it constructed the Library Lane parking structure – to maintain a certain number of spaces for hourly patrons so people would have spaces to park.

Comm/Comm: Third-Quarter Financial Statements

Roger Hewitt gave an update on DDA financial statements for the third quarter of the current fiscal year – the three months from Jan. 1 to March 31, 2014. TIF (tax increment finance) revenue is approximately $65,000 under budget, which is 1.44%, within an acceptable variance, Hewitt said. The reason operating system expenses are different for the year-to-date versus budgeted amount is that the DDA had a large bond payment that was due, he said. Capital expenses are a fair amount under budget, although it’s expected by the end of the fiscal year – on June 30 – that the capital expenses figure will be very close to what was budgeted or perhaps slightly under. Construction season is starting, so some work on capital repairs would be done before the end of the fiscal year. Parking income is right where it was projected, Hewitt said.

Operating expenses would be significantly higher, and a budget amendment would be required. So Hewitt reviewed the reason for that: In the previous fiscal year, the DDA had budgeted a payment for the First & Washington parking garage – which was constructed as part of Village Green’s City Apartments project. Payment was due from the DDA upon issuance of a certificate of occupancy by the city for the parking garage portion of the project. The payment would be about $1.3 million. The DDA could not make that payment until the garage received its certificate of occupancy. That didn’t happen by the end of the 2013 fiscal year, Hewitt explained, so that payment could not be made at that time. [Fiscal 2013 ended on June 30, 2013.] So that payment is being made this fiscal year, and that’s why operating expenses are $1.3 million over budget, he said. It’s basically spending money this year that had been budgeted in the previous fiscal year.

Direct parking expenses are a bit less than budgeted, Hewitt said – because Republic Parking manager Art Lowe had done a good job in controlling costs. Automation has increased and a very efficient system is being run. About the parking maintenance fund, Hewitt said that income to that fund is controlled, because it is simply transferred from the parking fund.

Even though the DDA spent under the budgeted amount for maintenance, by the end of the fiscal year that would be fairly close to the budgeted amount, Hewitt said, because construction season was starting up. Operating expenses out of the housing fund would be significant higher, Hewitt said, due to the $300,000 grant that the board had approved for the Ann Arbor Housing Commission, which was not in the budget. A budget resolution would be needed at the DDA’s June meeting – for the First & Washington bond payment and for the Ann Arbor Housing Commission grant, Hewitt said.

Hewitt gave a quick rundown of the fund balances for the four funds that the DDA maintains. The housing fund has approximately $700,000 – although most of that is already committed. In the parking fund, the balance is about $3.6 million. The parking maintenance fund has a balance of about $800,000 and the TIF fund balance is about $450,000.

Comm/Comm: Parking Report

In reporting out the parking numbers for the third quarter and the fiscal year to date, Roger Hewitt noted that weather information was included in the reports, saying that anyone who has a business in the downtown has experienced some drop-off during the last quarter – January, February, and March – which had the worst weather in memory. The average temperature was below the previous year’s average and more snow fell then in the previous year.

Hewitt complimented Republic Parking manager Art Lowe for doing a good job in keeping the system operating, moving the snow and keeping the sidewalks clear. Even with the bad weather, revenue was still up by about $7,500, Hewitt said. There are a number of hourly patron drops in some of the structures, but overall revenue still was up. That speaks well to the healthiness of downtown, Hewitt said.

In the Forest parking structure, activity had dropped because a University of Michigan construction project had ended – and construction workers who previously used the structure for parking were no longer using it. For the first three quarters of the fiscal year, Hewitt noted that total revenues were up about $400,000, while hourly patrons were flat. Hewitt stated that this “generally indicates that the people who are coming down and paying by the hour are staying longer.”

John Mouat asked if construction of the new dormitory by the University of Michigan at Packard and Division had caused a bump in parking activity anywhere in the system. Hewitt did not think so. The closest structure to that site is Maynard – and Maynard is pretty full anyway, Hewitt said. Sandi Smith asked that the number of spaces per structure be included in the reports as they had previously been.

Deputy DDA director Joe Morehouse explained that the number of spaces had previously been included in monthly reports, but the DDA was no longer generating monthly reports. He said he could add them into the quarterly reports.

Overall Parking System Revenue: Revenue has actually been essentially flat – compared to the same period in the previous year – for the most recent six-month period. (Chart by The Chronicle with data from the Ann Arbor DDA.)

For several years, the number of hourly patrons has been flat or slightly lower than the previous year. (Chart by The Chronicle with data from the Ann Arbor DDA.)

Comm/Comm: Downtown Ambassadors

Roger Hewitt described how a request for qualifications (RFQ) had been issued for the downtown ambassador program. Three separate responses to that request had been received, he reported. Those had been reviewed, and one of those appeared to be non-qualifying. The other two, Hewitt said, were very strong responses from very qualified operations.

The next step would be to have discussions with appropriate people in the community who would be interacting with ambassadors – the chief of police, the head of Project Outreach Team (PORT), the Ann Arbor Convention and Visitors Bureau and people who deal with social services in the area – to discuss with them how an ambassador program would integrate with the services they currently provide. That meeting will be scheduled for about two or three weeks from now, Hewitt said. After that, interviews with the two qualifying respondents would be held.

After that, the DDA would decide whether it wanted to proceed with a request for proposals. The request for qualifications, Hewitt explained, was really an educational process for the DDA.

Comm/Comm: Bike Racks

Keith Orr noted that a sign of spring is that the in-street bike racks are being placed. Amber Miller told Orr that about three quarters of the racks have been placed this year.

Comm/Comm: TiniLite

During public commentary at the start of the meeting, Changming Fan introduced himself as the inventor of TiniLite. His company was formed in Ann Arbor in 1996, he said: TiniLite World. The whole world should be using this kind of lighting technology to benefit society, he said. Ann Arbor was the first city to install LED streetlights, starting in 2007. Since then, however, he said he’d seen little market utilization of LED technology, for display. Lighting for illumination is different from lighting for display, he continued.

Applications for LED lighting technology for use in display includes messages, advertising, and public safety announcements. His company had never stopped pursuing scientific advancements in the field, he said, even during the economic downturn, during which he lost his house, he told the board. He hoped that his company could contribute its technology to the city of Ann Arbor. He had attended the previous evening’s meeting of the city planning commission, he said, and had suggested that the city’s master plan be revised. The master plan should incorporate intangible infrastructure, he said – which includes public communication. He hoped that he would have a chance to present his company’s technology.

Comm/Comm: Spring Party

Ray Detter invited everyone to the annual downtown neighbors spring party, which is taking place on Thursday, June 5 starting at 6:40 p.m. Those who attended previously, he ventured, knew that it was a great party. There would be tents out in back with “lots of food and lots of booze,” he said. People are welcome to bring a dish but are not required to and they can stay as long as they like – and sometimes people do that, he added. [The party is held at Detter's home on North Division.]

Comm/Comm: Streetscape Framework

Ray Detter reported that at the downtown area citizens advisory council meeting the previous evening, Susan Pollay, executive director of the DDA, had given the group an update on the streetscape framework plan. He described it as a comprehensive effort to coordinate all city planning in the DDA district in the right-of-way – from one building face on one side of the street to the building face on the opposite side of the street. Sustainability of the streetscape and the stewardship of the streetscape affects everyone, Detter said.

Comm/Comm: Historical Street Exhibit

As a part of his report from the downtown area citizens advisory council, Ray Detter recounted how 20 years ago the historical street exhibit program had been started. That had been assisted by the DDA, he said. He said it was important to bring young people, adults and visitors to the downtown area to make people aware of the historical identity of the community.

Ray Detter passed out invitations to his annual spring party.

For the last four years, the program has been bringing hundreds of high school students to the downtown area to share that experience, he said. Tours would be taking place the following Monday, May 12, Detter continued. Two different sets of tours will be taking place, he said, and 160 high school students would be participating in 13 different tours of the downtown. The students are enrolled at Community High School, and they would be accompanied by “little buddies” from elementary schools – which is a feature of the CHS educational program, Detter explained.

Every year, Detter continued, an attempt is made to increase the number of resource people on the tours. The 90-year-old Rosemarion Blake is one example, Detter said. [The Blake Transit Center is named for her husband, Richard D. Blake.] She helps out on the tour by sitting at the corner at Detroit and Fifth streets. She is there to talk about her role growing up black in the Kerrytown area in Ann Arbor. The kids love her, Detter said.

Alan Haber is another resource person, Detter said. He would be on the corner of South University and East University talking about his role in the social changes of the 1960s and 1970s. Karl Pohrt had served as a resource person on that topic in previous years, Detter said. [Pohrt, who owned Shaman Drum Bookshop on South State, died in 2013.] Other resource people included: former Ann Arbor mayor Ingrid Sheldon, former Washtenaw County water resources commissioner Janis Bobrin and county clerk Larry Kestenbaum.

Detter invited the public, as they saw the tours moving around downtown Ann Arbor, to join in on the tours.

Comm/Comm: City Budget

City administrator Steve Powers updated the board on the status of the city budget process. Fiscal year 2015 starts July 1, he noted. Powers reported that he’d already presented his recommended budget to the city council. The council will be considering the adoption of that budget on May 19. The city’s financial condition is improving, Powers said, and the overall economy of the city is improving. Property tax revenues are up about 2.4%.

City administrator Steve Powers.

The state economy is also improving, and the city is seeing more state shared revenue. That has allowed for a recommendation that includes additional city staff positions, Powers said. Those include three additional police officers, two of which would be assigned to the community engagement unit – a new unit that engages the neighborhoods and communities within the city, including the downtown. An additional officer would be assigned to traffic enforcement. Along with that, Powers continued, an additional firefighter position is being recommended. Because of the additional rental units that have been constructed in the city, he said, an additional rental housing inspector was being recommended. That would help with tenant safety and monitoring of those additional rental units.

There’s also a recommendation to use $1 million from the fund balance to get caught up on some much needed maintenance of the city’s street trees, Powers said. Street trees are very important for helping to manage the city stormwater, Powers pointed out, as well as for improving the aesthetics of the community.

There’s also funding in the recommended budget for additional zoning work in the downtown, as well as money for a sign inventory.

Board chair Sandi Smith asked Powers if the street tree work was prioritized in any way by geographic considerations. She wondered what percentage of the work would be done inside the DDA district. Powers told Smith that he did not have that level of detail, but the funding amount was consistent with the final draft of the urban forestry management plan. Powers told Smith he would look into that to see what specifically the impact would be for the DDA area. The prioritization, he continued, is based on the condition of the trees: The highest need would be done first. If there was a safety risk associated with the tree, those trees would be prioritized for first removal.

Present: Al McWilliams, Bob Guenzel, Roger Hewitt, Steve Powers, John Splitt, Sandi Smith, Rishi Narayan, Russ Collins, Keith Orr, Joan Lowenstein, John Mouat.

Absent: Cyndi Clark.

Next board meeting: Noon on Wednesday, June 4, 2014, at the DDA offices, 150 S. Fifth Ave., Suite 301. [Check Chronicle event listings to confirm date]

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View to the east from the Fourth & William parking structure, overlooking the former Y lot on March 30, 2014. The lot had been closed off to any vehicle access.

For the parcel to remain in use as part of the city’s public parking system, the pending purchaser of the property, Dennis Dahlmann, would need to reach an agreement on a leasing arrangement with the Ann Arbor Downtown Development Authority. The DDA manages the city’s public parking system under a contract with the city.

Eventually, Dahlmann intends to build a mixed-used development on the parcel, but wants to provide surface parking while the project is in the planning stages. A site plan could easily take a year to design, and to obtain necessary approvals from the planning commission and city council. The city council approved the sale of the land to Dahlmann last year at its Nov. 18, 2013 meeting.

Ben Dahlmann, senior vice president with Dahlmann Properties, attended the March 26, 2014 meeting of the DDA’s operations committee to present a revision to the leasing proposal that Dahlmann had made in January. The original proposal had been for the DDA to lease the property back from Dahlmann for $150,000 a year.

The revised proposal would be for Dahlmann and the DDA to split the net income (after expenses) from the parking lot for the next two years. Dahlmann ballparked that number at around $180,000, which would translate to a $90,000 share for Dahlmann – less than the $160,000 per year that Dahlmann figured he’d owe in property taxes.

The final sale of the property by the city to Dahlmann – at a purchase price of $5.25 million – is scheduled for April 2. No agreement on Dahlmann’s offer to lease property to the DDA was reached at the March 26 meeting. But the committee will be taking up the issue again at its April meeting.

On March 26, DDA board members received Dahlmann’s new proposal with the same lack of enthusiasm they’d shown at their Jan. 29 committee meeting, when they discussed the original pitch of a $150,000 annual lease. In January, board members expressed concern that by leasing the property back from Dahlmann, the DDA would be providing an incentive not to develop the property. Dahlmann did not attend that January committee meeting. At the March 26 meeting, however, Ben Dahlmann pointed out that the rider agreement to the sales contract requires a certificate of occupancy by January 2018 for the new building on that site. [.pdf of rider agreement]

If Dahlmann does not develop the property, the city has the right to purchase the property back for $4.2 million, the asking price for the property. And that would translate to a $1 million loss for Dahlmann: “That, coupled with the $160,000 of annual taxes, is more than enough incentive for us to develop a project that I think we all will be proud of,” Dahlmann said.

Banner at the former Y lot on March 26, 2014.

At the March 26 meeting, members of the operations committee focused on their concern that the DDA would still lose money on the deal. They feared that by continuing to operate the former Y lot as a parking lot, the DDA would be decreasing parking activity at other facilities, where the DDA would receive 100% of the net income, not just 50% of it. They also wondered if Dahlmann would be willing to help pay for the cost of repairs to the lot that are currently needed. Further, they felt that there was adequate parking inventory in the immediate vicinity of the surface lot – roughly 1,700 spaces at the nearby Fourth & William and Library Lane structures, as well as 160 on-street metered spaces within a two-block radius.

Dahlmann countered by pointing out that a planned renovation to the Fourth & William parking structure – which could start in August 2014 – could have a negative impact on parking activity at that structure. He also noted that many people prefer surface parking to parking in a structure, and that it would be a convenience to the public that the DDA would be offering.

Dahlmann could not operate a parking facility himself, even if he charged nothing for people to park – without obtaining a special exception use from the city planning commission. Planning manager Wendy Rampson responded to an emailed query from The Chronicle with this explanation: “If there is a principal use of parking on the site – whether paid parking or free – it would require special exception use from the planning commission, unless it was owned or operated by an entity exempt from the zoning ordinance (e.g., the DDA).”

The DDA operations committee will take up the issue again at its April meeting, which is scheduled for April 30. In the meantime, the lot will not be available for parking. Based on committee discussion, it’s at least a possibility that some kind of agreement with Dahlmann might be reached, at which point motorists would again be able to park on the lot.

Motorists looking for parking in downtown Ann Arbor have already been given inconsistent messages about the former Y lot, as the DDA first announced that the lot would be closed around March 15. The DDA subsequently placed signs at the lot indicating that it would be closed on March 29.

Fifth & William Lot in Context

One of the concerns expressed by DDA committee members at their March 26 meeting was that patrons who might continue to park at the former Y lot would otherwise park at other nearby facilities in the system – where there is sufficient capacity, and where the DDA would receive 100% of the revenue from their parking fees.

Aerial photo of former Y lot from Washtenaw County and city of Ann Arbor GIS mapping services. Numbering by The Chronicle.

The Chronicle reviewed historical revenue data for parking facilities in the Fourth Avenue and Fifth Avenue area. Based on that review, there is some merit to the idea that when a facility closes, the result is increased parking use at neighboring facilities. [See Chart 1 below.] For several years, The Chronicle has used data provided by the DDA to track revenue by facility and to calculate revenue-per-space statistics.

But a recent review by The Chronicle of the data provided by the DDA on the Fifth & William surface lot (the former Y lot) showed it’s been inconsistent with respect to the number of spaces available at the lot. In several instances, the number of spaces was reported at 141.

In fact, the lot offers 87-88 spaces. But in the DDA’s analysis of Dahlmann’s original proposal, the number of spaces is recorded as 141 for fiscal year 2012 and 87 for fiscal year 2013. The 54-space difference was portrayed in the DDA’s analysis as the result of spaces used by the Ann Arbor Area Transportation Authority for staging of materials during the construction of the new Blake Transit Center (BTC). The BTC is sited just to the north of the lot. [.pdf of DDA financial analysis of Dahlmann's proposal]

However, in other DDA records, the number of spaces allotted initially for the BTC construction – which broke ground in November 2012 – is shown as 11. Toward the end of the construction, starting in November 2013, the AAATA was given permission to park two temporary trailers on the west side of the lot – when the old transit building was demolished. Those two trailers took up at least another eight spaces in the parking lot. For purposes of this analysis, The Chronicle has adjusted the number of spaces in the data based on 87 spaces at full capacity, 11 spaces lost during initial construction, and another 8 spaces lost during the final construction period.

In Chart 1 below, no adjustments have been made for parking rate increases, so the overall upward trend is at least in part due to increases in those rates.

Highlights from Chart 1 below include the two highest-performing facilities in the public parking system (in terms of revenue per space), both of which are surface lots: the Brown Block in red (bounded by Huron, First, Washington and Ashley) and the Kline Lot in blue (on Ashley, north of William). The Library Lane underground facility off of South Fifth is represented in black. It was previously just a surface lot, until construction started on the underground facility. The gap reflects the construction period for the underground structure. On the left side of the gap, the black line represents Library Lane as just a surface lot. On the right side of the gap, it has re-opened as an underground structure. The former Y lot surface parking is shown in purple.

Chart 1: Surface parking in Ann Arbor’s public parking system. (Data from the DDA, adjusted and charted by The Chronicle.)

The circled numbers in the chart correspond to the following descriptive observations:

1. From October 2008 through September 2009, the library lot surface parking facility (black) clearly outperformed the former Y lot surface parking lot (purple), but did not approach the performance of the Brown Block or the Kline Lot. During that period, the revenue per space generated by the Library Lane surface parking facility was roughly the same as in the Maynard structure, which is located one block east of the Library Lane lot.
2. When the Library Lane surface parking lot closed, to begin construction of the underground structure, starting in October 2009, the revenue per space generated in the former Y lot (purple) – located just across the street – dramatically increased. Performance at the former Y lot  approached that of the two highest-performing facilities.
3. When South Fifth Avenue was closed down during a later phase of the Library Lane construction project, in August 2010, revenue per space dropped for the former Y lot – and stayed roughly flat for the next two years. During that period, revenue per space roughly mirrored the performance of the Maynard structure.
4. When the new Library Lane structure opened in the summer of 2012, revenues per space started to decline at the former Y lot.
5. The downward trend at the former Y lot continued when the Blake Transit Center started construction in November 2012.
6. Likely unrelated to any issues in the Fourth and Fifth Avenue area of downtown is the increase in the difference between the Brown Block surface lot’s performance compared to the Kline Lot. In the first two years of data shown in Chart 1, the Brown Block performed 7-9% better than the Kline Lot, as measured by revenue per space. In the last year, however, that gap had grown to 27%.

Fourth & William Structure

One of the arguments that Ben Dahlmann made at the March 26 DDA operations committee meeting was that upcoming renovations to the southeast elevator tower of the Fourth & William parking structure could have a negative impact on parking activity at that facility. It’s just across the street from the former Y lot. He reasoned that the former Y lot, if it continued to be used as a surface parking lot under a lease arrangement, could serve as a kind of “overflow parking.”

The background to Dahlmann’s point began at the DDA board’s Jan. 8, 2014 meeting, when it authorized up to $40,000 for Carl Walker Inc. to develop architectural renderings for renovations to the southwest stair tower and elevators.

The Fourth & William parking structure, at 994 spaces, is one of the largest in Ann Arbor’s parking system – but has elevators that are more than 30 years old. [A recent trip from the ground floor to floor 7 was timed by The Chronicle at 45 seconds. The comparable trip at the newer Washington & Fourth parking structure took about 17 seconds.]

Also at the March 26 operations committee meeting, Mike Ortlieb, of Carl Walker Inc., presented two possible timelines, based on either a two-phase or three-phase approach to the construction. The basic cost was estimated at $2.45 million. Pursuing the three-phase approach would cost an additional $150,000. The two-phase approach would last about a year – from August 2014 through July 2015. The three-phase approach would take five months longer – through about December 2015. In both scenarios, the goal is to keep the parking structure open for business.

Chronicle chart of potential timeline for renovations to the southwest elevator at the Fourth & William parking structure based on Carl Walker estimates.

The operations committee will take up the Fourth & William renovation again at its April meeting.

March 26, 2014 Operations Committee Deliberations

When the DDA operations committee reached the former Y lot on its March 26 agenda, board members and Ben Dahlmann began with basic introductions. DDA members at the meeting included Roger Hewitt, Keith Orr, John Splitt, John Mouat, Joan Lowenstein and Bob Guenzel.

Dahlmann complimented a large clock that stands in the corner of the DDA boardroom, which is actually designed for outdoor use and looks more or less like a lamp post, but with a large clock face at the top. He quipped that it might be a hint that he should be brief.

Dahlmann first updated board members on the status of the sale: Closing is scheduled for April 2. There had been some delays, he explained, due in part to the need to conduct an environmental study. There are portions of the old YMCA building that are still underground on the parcel. He reminded the board that Dahlmann had agreed to pay $5.25 million for the property – which was about $1 million above the asking price. Alluding to the rider to the sales agreement, Dahlmann noted: “We have three years and nine months to develop it. And if we don’t do that, the city has the option to buy back for $1 million less than what we paid for it. That, coupled with the $160,000 of annual taxes, is more than enough incentive for us to develop a project that I think we all will be proud of.”

At the March 26 operations committee meeting. From left: DDA board member Roger Hewitt and Ben Dahlmann.

Dahlmann told the board it was his understanding that roughly 30,000 cars parked on the former Y lot on an annual basis. He described the surface lot as having a nice central location, and ventured that above-ground parking was more convenient. That convenience, he said, would be a true benefit to the citizens of Ann Arbor and to those who work and dine and shop in the area.

Dahlmann also pointed out that keeping the former Y lot open would help with issues associated with the Fourth and William elevator renovation. It could be an “overflow lot,” he suggested. Based on the information he had, it was his understanding that the former Y lot generates about $250,000 of revenue annually, and that there are roughly $70,000 worth of expenses. Dahlmann’s proposal was to take that $180,000 of net profit and split it between the DDA and Dahlmann. “That is it in a nutshell,” he concluded, and thanked the committee for listening.

Roger Hewitt said that when the DDA first installed equipment to create a surface parking lot at that location, the Library Lane parking structure was not in existence. The surface lot parking equipment had been installed at the request of the Ann Arbor city council, Hewitt said. And since then, the DDA had built and opened the Library Lane underground parking structure.

Hewitt asked Republic Parking manager Art Low: In that immediate neighborhood, how many parking spaces are there without that YMCA lot? Low broke down the parking inventory into two categories: on-street metered parking and off-street parking.

There are about 161 metered spaces within a two-block radius of the old Y lot, Low reported. He said that the numbers he was going to present on usage were not hard numbers, but were pretty accurate. Between 8 a.m. and 6 p.m. those meters are about 70- 75% occupied. Between noon and 6 p.m. they are about 80% occupied. So there’s still a pretty good flow in terms of availability and turnover, he concluded. Low said there was a good turnover in the on-street part of the system.

Within a two-block radius there are just over 2,100 off-street parking spots, Low said. The Fourth & William parking structure is generally about 75% occupied between 10 a.m. and 9 p.m. From Wednesday through Saturday that picks up, he said, to be a lot higher. The Library Lane structure has hit a good threshold at about 72% occupied, he said, noting that Library Lane is not as busy at nighttime as it is during the daytime. The Library Lane underground garage is more of a daytime garage, Low said. You have to keep in mind too, Low continued, that the Library Lane facility also has 33 surface parking spaces. There are also 12 on-street spots on the Library Lane the mid-block cut-through between Fifth and Division.

A little farther to the north, the Fourth & Washington garage has high occupancy levels, but is still at something like an 85% threshold, Low said. The South Ashley lot Kline lot is also very busy and is about 85-87% occupied, Low said. The numbers he was giving, Low reiterated, were general numbers through the day, but he felt they were pretty accurate. There are 87 spaces in the old Y lot, Low said – without considering spaces that had been taken up by the Blake Transit Center construction. Through the last eight months, Low said they’ve only had a portion of those 87 spots available. Through “natural progression,” Low felt, people have found other places to park.

Looking at the dollars-and-cents issue, Hewitt said, if the lot were now operated at its original size of 87 spaces, it would probably be full – because it is a surface lot. But people would be parking there, drawing from other facilities where they are already paying the DDA for parking. It seemed to him that although the DDA would make money on the former Y lot, the DDA would then lose money on surrounding facilities. He asked Low if that would be a fair statement. Yes, Low replied. Low allowed that this kind of debate goes on quite a bit. The system overall is getting more and more full – but in that specific area, the system has a lot of parking availability. There are other areas in the system that could use more parking – but that is a different discussion, Low said.

Hewitt also ventured that the porous asphalt surface at the Y lot might need some repair. Low responded by indicating that Republic Parking would be inspecting the surface more closely in the next few days and make a determination. He said there were definitely some repairs that need to be done – including some curb stops that have been smashed over the winter. And there are certain issues with the surface itself that need to be addressed, but he could not offer a view on the cost at this point.

DDA executive director Susan Pollay then reviewed some of the logistical considerations. The sale closing is set for April 2. She asked Dahlmann what he was looking for in terms of a timeline for the lease. Dahlmann said he was thinking two years. Pollay asked Dahlmann if his proposal to the board included paying for repairs – as the owner of the lot. Dahlmann told Pollay that he had walked past the lot on his way to the meeting and that there were definitely some issues with the surface of the pavement in some areas and there’s still a fair amount of construction debris, he said. He wondered what kind of responsibility the AAATA’s contractor has for putting a lot back into the same condition it was when construction started. Pollay said that no conditions were set, because the lot was already starting to deteriorate.

Dahlmann asked if the AAATA was responsible for repairing any of the damage. Pollay responded: “Nothing specific, no.” If the ownership were not changing, Pollay explained, the DDA itself would be taking on the repairs to the lot.

Dahlmann ventured that from his observations walking around the pavement, although there were issues, they didn’t seem problematical. “We would be open to figuring that out, for sure,” he said. Pollay asked if Dahlmann was proposing that he first fix the lot and then the DDA would operate the repaired lot for Dahlmann. He said he was not sure – because he was not sure what was included in the $70,000 worth of expenditures. “What we’re saying basically here is, look, here is the gross profit and here’s the expenses – let’s split the net profit 50-50.” That would come nowhere near to even covering the taxes on the property, he ventured.

Keith Orr said he looked at the issue in two ways. First, whatever would be split should be the net profit. All expenses would come out first before anything was split. The other concern Orr had was that if it’s a 50-50 split, then the DDA would still be “competing with itself” with its other facilities. At other facilities, the DDA would be receiving 100% of the revenue. That would mean trading a spot where they were getting 100% of revenue for one where they were only getting 50%.

Hewitt said he first wanted an estimate of what it would take to repair the lot sufficiently to operate the lot for two years. He also did not feel that the lot should be looked at in isolation – because there’s so much parking capacity on either side of the lot. He wanted to factor in the revenues from the Library Lane structure and the Fourth & William parking structure. The DDA would need to consider what the profitability is of all of its parking facilities, Hewitt said.

Dahlmann asked if the DDA knew how often the lots in the vicinity were 100% full. Republic Parking manager Art Low told Dahlmann that information was absolutely available, but he did not have it off the top of his head. When the peaks are reached, it tends to be Wednesday through Saturday or the evening hours, Low offered. DDA deputy director Joe Morehouse said he did not think that 100% capacity had been reached since New Year’s Day – adding that it did not happen all that frequently.

Photo taken March 30, 2014 – the first day the former Y lot was closed to the public. The view is looking north. The new Blake Transit Center is on the far side of the lot.

Morehouse pointed out how the Library Lane doesn’t have the evening traffic that Fourth & William does. Hewitt said that the DDA had a fiduciary responsibility that if it entered into an agreement, it would not be one that risked taking a loss. He ventured that it would be kind of a complex deal to put together. So Hewitt wanted first to get some idea of the cost that it would take to make the lot operational for two years. Hewitt wanted Morehouse and Low to put something together that made financial sense.

Dahlmann ventured that it might not be a large factor, but he felt that convenience would be a factor. He felt that the data probably suggest that when the former Y lot is fully operational, people would prefer to park there. As a consumer, he said, he would not eat dinner on Main Street if he knew that he was going to have to park on an upper floor in a parking structure. There has to be some value in that, he said, although he did not know how much.

Pollay stated her understanding that the DDA was supposed to provide the property “free and clear” at the closing of the sale. She said that meant that the parking equipment would be taken off the lot – but she would ask Republic Parking how easy it would be to reinstall it. She did not think it would be that difficult.

Republic would be told that equipment can be removed, but it might be the case that it needed to be reinstalled. That was the direction that Pollay had received from the city, she said. Hewitt added that “it’s the city’s choice on that.” Pollay said that even though the DDA was operating the lot, it was officially city property. That’s why she needed to be respectful of the direction that she was receiving from the city, Pollay said. She understood her direction from the city to be a clean, unencumbered provision of the lot.

Dahlmann countered that if the purchaser feels it’s fine to leave the equipment there, that should mean something. Pollay said she would follow up with the city and let everyone know what direction she received.

Next Steps

The DDA operations committee is expected to take up the issue of possibly leasing the former Y lot again at its April 30 meeting. It’s not currently an agenda item for the DDA board’s April 2, 2014 meeting.

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