Other board officers elected included John Mouat as vice chair, Keith Orr as secretary, and Roger Hewitt as treasurer.

One of Smith’s first challenges leading the board will be to resolve an outstanding issue over the way the DDA administers Chapter 7 of the city code of Ann Arbor – which regulates the DDA’s tax increment finance (TIF) capture. An effort led by Ann Arbor city councilmember Stephen Kunselman (Ward 3) – which has taken different forms over the last year and a half – culminated earlier this spring in initial approval by the council of 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 expressed in Chapter 7. The amendment to the ordinance would return several hundred thousand dollars a year to the 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 two days later, on July 3, outgoing DDA board chair Leah Gunn appointed Bob Guenzel, Roger Hewitt, Joan Lowenstein and Sandi Smith to the DDA’s committee.

Gunn’s current term on the DDA board expires on July 31 this year.

At the board’s July 3 meeting, the board bid farewell to Gunn and Newcombe Clark, whose term is also expiring at the end of July. First appointed in 2009, Clark served one four-year term. He’s making an employment-related move to Chicago.

Gunn served for nearly 22 years on the board starting in 1991. In 2011 she announced she would not to seek re-election in 2012 to a seat on the Washtenaw County board of commissioners. She had first been elected as a county commissioner in 1996. After redistricting of the county board seats, she decided to support fellow Democrat Yousef Rabhi, who was re-elected and now serves as chair of the Washtenaw County board. In her professional life Gunn served as a librarian in the University of Michigan graduate and law libraries.

The second term for Russ Collins is set to expire on July 31, with those of Gunn and Clark. However, Collins was nominated at the city council’s July 1 meeting by mayor John Hieftje for reappointment to the DDA board.

This brief was filed from the DDA offices at 150 S. Fifth Ave., Suite 301 where the DDA board holds its meetings. A more detailed report of the meeting will follow: [link]

The decision came over dissent from two board members – John Mouat and Sandi Smith, who perceived the city council’s changes to the budget as arbitrary. They criticized the process – which is set forth by the state’s enabling legislation for downtown development authorities.

During the council’s debate on the city’s budget, of which the DDA is a component unit, councilmembers had argued about how to handle the additional tax increment finance (TIF) revenue that will be captured by the DDA this year. In the end, they modified the DDA’s budget by adding in the roughly $570,000 in additional TIF revenue – and by transferring $300,000 of that to the DDA’s housing fund. In its May 20 budget resolution, the council also recommended that the DDA spend $300,000 of TIF revenue on the replacement of light poles on Main Street.

Based on the DDA board’s discussion on June 5, little interest appears to exist on the DDA board for covering the difference between the $516,000 total estimated cost of the light pole replacement and the $268,000 left in the TIF fund after the $300,000 transfer to the housing fund. Based on the June 5 discussion, the DDA board feels that the city council should appropriate the difference out of the city’s general fund reserve.

Compared to the FY 2014 budget that the DDA originally submitted to the city, the TIF revenue now anticipated for FY 2014 is roughly $568,000 more – a total of $4,501,347. [.pdf of revised FY 2014 DDA budget]

At its meeting on June 3, 2013, the council passed a resolution encouraging the DDA board to consider allocating some of the discretionary funds in its FY 2014 budget to pay for three police officers to be assigned to the downtown area. Between the DDA’s TIF fund ($100,000) and the DDA’s parking fund ($300,000), the FY 2014 budget includes a total of $400,000 that’s labeled “discretionary.” The council’s resolution asked the DDA board consider that request for police funding at its “next regularly scheduled meeting” – which was June 5, 2013.

The board responded to the council’s request through a referral of the issue by board chair Leah Gunn to the DDA’s operations committee.

Also at its June 5 meeting, the DDA made final revisions to its current year’s budget to square it up with actual expenses and revenues to date. [.pdf of revised FY 2013 budget]

This brief was filed from the DDA offices at 150 S. Fifth Ave., Suite 301, where the DDA board holds its meetings. A more detailed report of the meeting will follow: [link]

The discussion provided some clarity about what’s feasible with respect to the DDA’s role in enforcing parking regulations. And though parking enforcement appeared ready to slide completely off the table at the last committee meeting due to practical concerns, it appears now that the issue could be back in play, at least from the perspective of technical feasibility.

Concerns of Main Street merchants were also aired at the meeting, with Maura Thomson, executive director of the Main Street Area Association, addressing the two committees to suggest that any additional payment by the DDA to the city be partially earmarked for downtown public safety – that is, downtown police patrols.

But the highlight of the meeting was a more fleshed-out version of an outline that DDA executive director Susan Pollay provided, which describes a process by which the DDA would lead the community in comprehensive site-planning for the downtown’s city-owned surface parking lots, based on work that’s been done over the last half-decade – including the Calthorpe process, the A2D2 rezoning process, and the downtown plan.

DDA board member Russ Collins wanted to know if the process addressed any specifics regarding payments from the DDA to the city. Pollay responded to Collins by acknowledging that DDA board member Newcombe Clark – who does not serve on the DDA’s MBC – was keen to see the DDA purchase land from the city as part of the process. She indicated that would be a topic addressed by the DDA at its retreat, scheduled for Sept. 22.

However, the focus for Monday morning’s meeting, said Pollay, was not on the idea of land purchases, but rather on a comprehensive site-planning process: If the process feels like it resonates, she said, then the discussion could move on later to include land purchases. City councilmember Carsten Hohnke then zeroed in on a crucial question: “How do we come to a conclusion it’s resonating?”

DDA-Led Development Process of City-Owned Lots

DDA board member Gary Boren followed up Hohnke’s question – about how to conclude that the process described by Pollay was resonating – with a more specific one: With whom is it resonating? For his part, Hohnke said, “It’s resonating with me!” Hohnke went on to say that he felt it was resonating with councilmember Christopher Taylor, who’d left the meeting shortly before it adjourned. Before he left, Taylor had said that “Broadly speaking, I’m pleased with the direction.” Margie Teall, the third member of the council’s committee, was absent.

What was it that was resonating with Hohnke and Taylor about the proposed DDA-led development process for city-owned surface parking lots? Many of the key features of the plan were provided in outline form at the two committees’ last meeting, on Aug. 23.

One basic theme of the proposal is to start not from scratch, but rather to build on the discussions that have taken place over the last five years in connection with initiatives like the Calthorpe process, the A2D2 rezoning process, and the downtown plan. Another basic theme is a focus on a comprehensive approach to downtown – not every parcel must provide all amenities. The process also stresses the integration of professional expertise.

Pollay walked the two committees through the four-page document.

DDA-Led Development: Overview of Current City-Run Process

The first page of the document is devoted to a sketch of the city’s approach to development of city-owned property downtown, illustrated by examples drawn from the last decade:

• Ashley Mews, a project approved at Main & Packard in 2000 and constructed in 2001.
• A project at First & Washington with Liberty First that was terminated in 2003 despite an approved development agreement.
• William Street Station at Fifth & William, which had a site plan approved and a purchase agreement negotiated, but ended in a lawsuit against the city.
• City Apartments at First & Washington, which is a Village Green project receiving site plan approval in 2008, with a purchase agreement recently extended by the city council to spring 2011.

The two most recent efforts to develop city-owned parcels using an RFP (request for proposals) process are: 415 W. Washington, which generated three local responses, none of which were selected; and the Library Lot on top of the underground parking garage being built along Fifth Avenue – a review committee has winnowed six proposals down to two, with those two currently being evaluated by a consultant.

As described in the document that Pollay provided, the city’s current process begins with city council direction to issue an RFP for city-owned property. The RFP is drafted by city staff, then disseminated via the city’s website or by email. An advisory committee is established by the city council to oversee review, interviews are held, a recommendation is made, and city staff oversee negotiations with the developer.

DDA-Led Development: Background Research – Expertise/Information

The first step the DDA would undertake would be to assemble information and expertise about the whole downtown area, and to integrate it with the city’s existing planning documents: the downtown plan, the central area plan, and the the new A2D2 zoning regulations.

Some of the work would take the form of developing an inventory of sites with detailed physical information about those sites – from square footage to soil conditions. The inventory would also include a breakdown by the city’s planning staff of all the specific zoning requirements for each site – the basic zoning, plus the character district overlays, adjacent historic districts, and the like.

Public services city staff – led by public services area administrator Sue McCormick – would be called upon to provide information on stormwater and sanitary sewage systems, with estimates on upgrades that could be required if parcels were  developed to their maximum density. At Monday’s meeting, McCormick weighed in for the comprehensive approach that’s called for, saying it could allow for costs for infrastructure upgrades to be spread across developments, instead of saddling a single “first-in” development with all the costs. Detroit Edison would be asked to provide information on electric capacity, and Ann Arbor SPARK would be tapped for information on any state and federal grants that could be used for downtown redevelopment.

Expertise from other communities where successful downtown development has occurred – elected officials, developers and others – would be invited to Ann Arbor to explain how that successful development happened.

A real estate consultant would be hired to assist in the process by identifying what current real estate development looks like, what kind of lease rates are prevalent and what prices land is selling for. The real estate consultant would help identify for each specific site the exact set of information that would need to be assembled.

DDA-Led Development: Community Work – Goals Plan

The second section in the development document focuses on integrating previous work done in and by the community with the process of more comprehensive, but detailed, planning of individual sites. At Monday’s meeting, Pollay stressed that “this is not just another planning exercise.” This kind of planning would go beyond the Calthorpe community engagement process done five years ago, which explicitly avoided specific suggestions for individual sites.  It would involve a level of detail far greater than the new A2D2 zoning, character district overlays and design guidelines.

One key part of that community work would be done in the context of a city council work session, in which the council would prioritize its downtown development goals: Optimal purchase price? Catalyst projects? Iconic projects? Projects that maximize pedestrian activity?

Focus groups and other larger community meetings, plus online surveys, would provide additional input. University of Michigan and Eastern Michigan University faculty would be looped into the discussion depending on their area of expertise. UM planning staff would be consulted to provide the perspective of future UM projects and goals for the campus.

The outcome of this community activity is to be a detailed “goals plan” for the downtown that is meant to provide for everything that’s needed in the downtown, without insisting that every site provide for each specific need.

DDA-Led Development: How an Individual Site Would Get Developed

How does the DDA envision getting from an assembly of information, expertise and site goals to the development of any one specific site?

Step one would be for the DDA to make specific recommendations for each development site in the downtown that would underpin the expectations and goals for any future requests for proposals (RFPs). The DDA’s recommendations for the sites would be presented to the city council.

By way of background, the Ann Arbor city council has had general conversations over the last few years focused on the future of city-owned real estate in downtown Ann Arbor – beyond the development of the city-owned Library Lot on top of the underground parking garage currently under construction on Fifth Avenue.

For example, at the Dec. 1, 2008 city council meeting, the council authorized continued interest payments for the property the city had purchased from the YMCA at Fifth and William, the Old Y lot [emphasis added]:

In deliberations, councilmember Sandi Smith said that she would support the continued financing of the property, because they had no other choice, but that she urged her colleagues to begin thinking of master planning the area so that the city could divest itself of the property as soon as possible.

Or, at a February 2010 budget work session, one chunk of the conversation was devoted to downtown real estate, including the lot at Main and William next to Palios restaurant. From The Chronicle’s account of that work session:

An additional land parcel downtown that [Stephen] Rapundalo thought warranted some focus was the parking lot at Main & William, next to Palios restaurant. He noted that there were just 21 parking spaces at the lot, but it was possibly ripe for investment. He wanted to know if it was on the list somewhere. [City administrator, Roger] Fraser told him it was on a list, but not near the top.

Part of the process now being proposed is a systematic way of assembling information about items on the “list” and identifying which site will be the first one to focus on.

So with city council approval, the DDA would then pursue development on that first site, Site #1. The DDA would need to approve incentives funded by the DDA tax increment finance (TIF) capture – like parking, affordable housing or pedestrian improvements.

The RFP for the site would be extremely detailed and specific, with a draft site plan included in the request, that would have undergone the city’s site plan approval process. Here’s how that would evolve: The initial version of the RFP would be drafted by the DDA, with all the information previously assembled attached to it. The RFP would be reviewed by a professional real estate consultant and improved based on their feedback. An architect would then be hired to develop a draft site plan. This draft plan would be submitted to city staff, the city planning commission and the city council for review and approval. The RFP would specify that the draft site plan is not a mandated plan, but that potential developers should be challenged to design and implement a project even better than the draft site plan imagines.

Once the RFP is created, it would then be aggressively disseminated – with the help of the real estate consultant. A pre-proposal meeting would include a tour of the site. At Monday’s meeting, Pollay gave one example of the way the RFP could be marketed: She felt that if potential developers understood how much investment the university made in the community, it would help provide a case to developers to make a response to the proposal.

Once responses are received, they would be reviewed by an advisory committee assembled by the DDA, which will include people who have experience financing successful development projects or who have constructed downtown projects. After an interview process, the advisory committee would make a recommendation, which would then need to be approved by the DDA. The recommendation would be forwarded to the city council. If approved by the city council, the DDA would then proceed with negotiations on land purchase by the developer from the city and other project details, as the developer completes the site plan. The developer’s site plan would then be submitted to the city’s site plan approval process. And on approval, the project would then be constructed.

Reaction to Proposed DDA Process: Land Purchase?

Susan Pollay wrapped up her synopsis of the draft process document by noting that it assigned a lot of responsibility to the DDA, but she said the DDA is set up to take on that kind of responsibility.

Carsten Hohnke’s reaction to the process description was: “It’s fantastic!” He did wish for a presentation that visually contrasts the current timeline of the city’s strategy to develop a parcel side-by-side with the proposed DDA strategy.  He alluded to the fact that councilmember Sandi Smith had pushed the council to have a conversation about more than just the question of what goes on top of the new underground parking garage – other parcels downtown also need to be addressed.

Before departing from the meeting, councilmember Christopher Taylor indicated broad agreement with the basic proposal. However, he also indicated that he’d like to see a more detailed description of where the public conversation fit into the picture, as well as more clarity about the specific points in the process at which a collection of information is reduced to the form of a specific document.

DDA board member Russ Collins raised the money question: Does the process address any specifics of money transfers between the DDA and the city? The short answer is no. But Pollay acknowledged that DDA board member Newcombe Clark – who does not serve on the DDA’s MBC – was keen to see the DDA purchase land from the city as a part of the development process. She indicated that would be a topic addressed by the DDA at its retreat, scheduled for Sept. 22.

The question of money transfers from the DDA to the city is what prompted the city and the DDA to begin the talks about the parking agreement, under which the DDA operates the city’s parking system. The 2005 parking contract calls for $10 million to be paid by the DDA to the city over the course of 10 years – a commitment which the DDA had fulfilled by fiscal year 2010, which ended June 30. Earlier in 2010, the DDA then authorized an additional $2 million for FY 2011, and the city is expecting the DDA to continue $2 million annual payments.

At Monday morning’s meeting, Pollay deflected the question of land purchase by the DDA as part of the development process, suggesting that it would be more suitable for the DDA board to take up the issue at its Sept. 22 retreat. However, she indicated that as she’d consulted with various community members about putting together a proposed process for DDA-led development, what she’d heard was: “You’d be a fool to go through all this without possession [of the land].” Pollay indicated that the 3-Site Plan from 2005 had been thrown at her as an example.

The 3-Site Plan was an attempt by the DDA to develop three sites downtown in a coordinated fashion, in a similar spirit for what is being proposed for all the city-owned surface lots downtown. From The Chronicle’s report of the April 2010 DDA operations committee meeting:

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

The 3-Site Plan was never voted on by the city council: The site at First & William provoked controversy that continued through most of 2005 when supporters of an Allen Creek greenway objected to the use of that parcel for a parking deck.

If the DDA owned the land, then in concert with a developer-partner, the DDA could submit a site plan to the city’s approval process and assure itself that it would at least come to the city council for a vote. And if the site plan conformed to the zoning, the city council would have limited discretion to deny the project. So land ownership is one means by which the DDA could guard against wasted effort.

One possible concern that could be raised about the purchase of city land by the DDA is a passage from page 23 of the DDA’s Renewal Plan, approved in 2003:

At this time the Authority has no plans to sell, exchange or donate property to or from the City. The DDA leases seven parking structures and several parking lots from the City under a management agreement, which will expire in 2012.

Downtown Police Patrols

While a money-for-land deal is one idea that could receive discussion during the Sept. 22 DDA retreat, another idea was floated at Monday’s meeting by executive director of the Main Street Area Association, Maura Thomson. The MSAA is keen to see part of any payment by the DDA to the city earmarked for public safety – that is, police patrols. Thomson heaped praise on the Ann Arbor police and fire departments, saying that they are second to none. She stressed that the downtown is the hub of the city and that there’s relationship between a healthy downtown and a healthy community.

Thomson acknowledged that when measured by statistics, a greater police presence might not be be warranted, but she encouraged the DDA board members and city councilmembers to think about issues that aren’t measured in statistics:

In early August my daughter found a man deceased in a planter bed on Main Street. Later in August I happened upon a man passed out on the sidewalk on the corner of Main and Liberty. Incidents such as these certainly jade the downtown experience. The impact of having dedicated officers in the downtown neighborhoods can not be measured by reported crimes alone – neither of the examples noted were crimes. The lack of police presence in our downtown neighborhoods is contributing to non-crime related issues and if left unchecked, this type of activity will lead to the downfall of our downtown as we know it.

Related to downtown public safety, at the city council’s Sept. 7, 2010 meeting, Sabra Briere (Ward 1) updated her council colleagues on her intention to bring forward a proposal to re-form a task force on panhandling in the downtown.

Parking Enforcement

At the previous meeting of the two mutually-beneficial committees, the discussion of a role for the DDA in parking regulation enforcement appeared to have been pushed to the edge, if not completely off the table as part of the negotiations. The number of logistical and legal hurdles seemed to be accumulating to the point where it appeared that little enthusiasm was left for pursuing the topic. [Chronicle coverage: "DDA Parking Enforcement Prospects Dim"]

At Monday’s meeting, however, a case was made by DDA staff for the technical feasibility of the DDA’s role in enforcement.

Amber Miller, planning and research specialist for the DDA, had compiled research from other cities in Michigan where the DDA in those cities either enforces parking directly or contracts for it: Traverse City, Petoskey and Kalamazoo. The DDAs in those cities write tickets for violations in the Michigan Vehicle Code, but do not have a direct reporting relationship to the chief of police. The lack of a reporting relationship to the police chief had been cited by the Ann Arbor city attorney’s office as a reason that the DDA could not enforce MVC infractions.

Access to information from the Michigan Law Enforcement Information Network (LEIN), which provides vehicle owner information, is achieved in these other three cities via application by the city to the Michigan Secretary of State on behalf of the DDA, so that the DDA can be granted access to the information. Access to repeat-offender information for a subset of certain kinds of parking infractions is key to the Ann Arbor DDA’s intended strategy of having graduated fines based on prior offenses, or forgiveness of first offenses. The ability to filter data for DDA-contracted parking enforcement staff – so that they can view only authorized data – could be managed with the handheld devices used by ticketing officers.

That technological capability here in Ann Arbor was confirmed by Susan Pollay in her description of a meeting she’d had with Sue McCormick and a representative from Complus Data Innovations, the manufacturer of the handhelds used by the city. The CDI representative confirmed that data could be filtered by user login.

Pollay also made a case that the DDA was able to enforce parking regulations outside its tax district by citing local precedent for the city council authorizing the Ann Arbor DDA to act outside its boundary – the original parking agreement and the language of the DDA Renewal Plan – plus the state enabling legislation, which reads in relevant part:

An Authority possesses all the powers necessary to carry out the purpose of its incorporation. The enumeration of a power in this act shall not be construed as a limitation upon the general powers of an authority.

At Monday’s meeting, fresher parking enforcement data was also provided than had been available at the previous meeting. The five-year trend for monthly tickets issued is decidedly downward. Almost five years ago, 11,000 tickets were issued in a month, but in the last year around 6,000 tickets have been issued per month. In the most recent month for which data was available at the meeting, January 2010, only 4,647 tickets were issued.

Fewer tickets means less revenue: In FY 2006 around $2.1 million was collected in parking ticket revenue, but in FY 2010 that fell to around $1.1 million. Commented Russ Collins: “It’s hard to see the business case for the DDA taking this over.” However, Sue McCormick indicated that the lower numbers are due in part to lower staffing levels for community standards officers, who write parking tickets. The city currently has two community standards vacancies, she said.

Next Steps

Towards the conclusion of the meeting, Carsten Hohnke sought to summarize the committee work to date and to identify specific next steps:

• Parking Enforcement: Points made about feasibility of parking enforcement by the DDA at Monday’s meeting will be reviewed by the city attorney’s staff, hopefully by the time the committees meet again, on Sept. 27.
• DDA-led Development of Surface Lots: City council will schedule a working session to discuss the proposal that Pollay had presented to them.
• Affirmation of DDA’s Parking Role: In the new parking agreement, DDA’s role will be based largely on its current, existing role.
• Non-Parking Code Enforcement: This is now off the table – from the start there was little enthusiasm on the part of the DDA for this.
• DDA-Provided Services: This appears now to be practically off the table. It’s received little attention since the very first meetings. Although there was initially some interest on the part of the DDA, that interest was expressed mainly by DDA board member Roger Hewitt, who could not attend Monday’s meeting. Gary Boren suggested that there was real potential for the new Main Street Business Improvement Zone to address the issue of services, if it can be expanded beyond the current, limited area between William and Huron along Main Street.

On Sept. 22, the DDA board will hold a retreat focused on the city-DDA talks. The target date for the signing of a new parking agreement between the city and the DDA is Oct. 31, 2010.

Although they were clearly kidding around, the following exchange could be analyzed by some as an accurate reflection of the reality of the talks:

Russ Collins: “We’re getting nothing of what we wanted and you’re getting everything that you wanted!”

Carsten Hohnke: “So it’s going exactly according to plan!”

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

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

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

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

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

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

Background: The Parking Agreement of 2005

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

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

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

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

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

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

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

Background: Foundations of Good and Bad Faith

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Committees, Expectations of Public Process

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

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

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

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

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

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

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

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

R-642-11-91

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

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

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

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

Expectations of Public Process Not Met

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

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

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

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

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

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

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

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

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

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

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

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

Why the DDA Operations Committee Met

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The resolved clauses from the draft resolution:

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

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

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

Coda: Beat Cops

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

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

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

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

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

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

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

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

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

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

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

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

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

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

DDA Budget: The Four Funds

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

DDA Budget: TIF Fund

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

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

DDA Budget: Housing Fund

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

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

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

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

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

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

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

DDA Budget: Parking Fund

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

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

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

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

DDA Budget: Parking Maintenance Fund

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

DDA Budget: Fund Balances (Reserves)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Budget Discussion

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

Budget Discussion: Public Comment

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

Board Budget Deliberations: Part 1

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Board Budget Deliberations: Restoration of Phase II Energy Grants

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Russ Collins called the question.

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

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

Development Issues

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

Library Lot

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

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

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

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

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

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

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

Zingerman’s Expansion

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

Downtown Zoning and Design Guidelines

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

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

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

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

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

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

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

Parking Surveys

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

Online Parking Survey: Principles and Implementation

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

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

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

On-Street Parking Survey: e-park

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

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

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

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

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Other Business

The board heard a number of other reports and comments.

Wireless Washtenaw

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

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

DDA Board Retreat

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

Sandwich Sign Boards

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

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

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

Bicycle Hoop Requests, Maps

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

Downtown Citizens Advisory Council

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

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

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

Absent: John Hieftje.

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