Margie Teall (Ward 4) with Heritage Row and City Place developer Jeff Helminski. (Photos by the writer.)

At the time of their votes – on the matter-of-right City Place and the planned unit development Heritage Row – councilmembers knew that one set of actions would become moot. Only one of the projects, located on the same site, would be built. A few days after the meeting, news emerged that Heritage Row is now off the table and that City Place will move forward, with construction planned to start sometime this fall.

That meant that the council’s action last Monday, to give initial approval to the Heritage Row project, will ultimately have no effect. Developer Jeff Helminski requested that the item be pulled from the council’s Oct. 24 meeting – a meeting that had been added to the council’s calendar specifically to take a second and final vote on the Heritage Row project.

At their Oct. 17 meeting, the council took two actions on the already-approved City Place project – one to allow flexible application of the city’s new landscape ordinance, and a second to approve additional windows on the upper stories and to change the siding. That added to an Oct. 3 decision by the council to allow greater flexibility in the sequencing of City Place construction.

Also on Monday, the council confirmed two appointments to the city’s zoning board of appeals. The ZBA is a body that has purview to hear any challenges to city decisions about the correct application of city ordinances and the appropriateness of administrative decisions, including those associated with matter-of-right projects like City Place.

In other real estate development news out of Monday’s meeting, the council approved changes to the elevations for City Apartments, a residential project at First and Washington scheduled to start construction yet this season. The council is expected to authorize the sale of the city-owned parcel at its Nov. 10 meeting.

The council approved the annexation into the city of a township parcel where Biercamp Artisan Sausage & Jerky has set up shop. A tax abatement for Arbor Networks, a computer network security firm, was also approved by the council.

Another significant item on the council’s agenda was the appropriation of $25,000 from the city’s general fund reserve to keep the warming center open this year, which is operated by the Shelter Association of Washtenaw County in the Delonis Center on Huron Street.

The council also approved a resolution of intent on the use of sidewalk and street millage funds, which voters will be asked to approve at the polls on Nov. 8. The resolution was amended to clarify how funding will work for sidewalk repair adjacent to commercial properties inside the Ann Arbor Downtown Development Authority district.

City Place, Heritage Row

On Monday’s agenda were three items related to two different proposed developments at the same site on South Fifth Avenue just south of William Street: City Place and Heritage Row.

The council was asked to give initial approval for the Heritage Row proposal, which was to receive a second and final vote at a council meeting scheduled for Oct. 24. Later in the week, however, the developer withdrew the item from the agenda for Oct. 24.

The plan for the matter-of-right project called City Place would demolish seven houses and construct two apartment buildings separated by a parking lot. The two City Place buildings would comprise 144 bedrooms in 24 6-bedroom units.

As revised from an earlier proposal rejected by the council 14 months ago, the planned unit development (PUD) Heritage Row project would provide for some manner of reconstruction of the seven existing houses, and construct three additional buildings behind the houses. The project, as revised, would not be required to provide any on-site parking for a total of 85 dwelling units containing up to 180 bedrooms on the 1.23-acre property. The previous proposal would have constructed underground parking, for a total of 60 spaces on site.

For City Place, at their Oct. 17 meeting, the council was asked to approve a request from the developer to waive a landscape buffer requirement that was introduced through an ordinance change made after the project was initially approved in 2009. Also for City Place, the council was asked to approve a request for changes to the buildings that included a new window on the upper floors of the north and south-facing sides, and a change from horizontal siding to simulated shingle siding on the dormer.

The Heritage Row project has a long and controversial history dating back four years. The city council voted at its Oct. 3 meeting to reconsider the project, which it had previously rejected around 14 months ago. The council then voted to postpone a decision on the project so that negotiations could take place between the developer, city staff and councilmembers about  possible revisions. By offering concessions that could make the project more financially viable, the council hoped to induce the developer to divert from his imminent intent to construct City Place. City Place is regarded by most observers as an inferior project to Heritage Row.

At the council’s Oct. 3 meeting, a letter was discussed which councilmembers had received from the developer, Jeff Helminski. That letter outlined his requirements for concessions that he would need in order to build Heritage Row instead of City Place. At the Oct. 3 meeting, councilmembers expressed clear dissatisfaction with elements of Helminski’s letter. However, the key points from the letter appeared to have been incorporated into the revised proposal.

[.pdf of marked up Heritage Row supplemental regulations as presented on Oct. 17][.pdf of comparison chart between original Heritage Row and revised proposal as presented on Oct. 17] [.pdf of Oct. 3 letter from developer]

Heritage Row: Council Deliberations

Carsten Hohnke (Ward 5) led off deliberations by acknowledging the accelerated timeline and the unusual action. He reminded the council that the last version of the Heritage Row project (which the council rejected) was not felt by the current developer to be financially viable. [The project ownership changed hands.] So the council was continuing to look for alternatives to the matter-of-right City Place project. Appealing to a baseball analogy, Hohnke said they hadn’t seen the last out – that’s a positive and they were still on the field.

From left: Sandi Smith (Ward 1), Carsten Hohnke (Ward 5) and Margie Teall (Ward 4) during a recess in the Oct. 17 meeting.

Hohnke said the proposal before the council was not a perfect solution to the problem. He’d like to see less density, stronger commitment to rehabilitation of the existing seven houses, and a unit mix that doesn’t have as many 4-5 bedroom units. It’s worth noting, he said, that the physical characteristics of the project have changed changed very little – the setback, height and streetscape is proposed to be maintained.

Hohnke described the affordable housing component as a significant public benefit. He said that was a serious point of negotiation and a tough negotiating point. [Compared to the June 2010 version of Heritage Row, the Oct. 17, 2011 version offered percentage-wise less affordable housing benefit. The June 2010 version required 18% of 82 units (14.76) while the Oct. 17 version required 17% of 85 units (14.45). An earlier, Oct. 3 version would have required just 15% of 85 units (12.75).]

Sabra Briere (Ward 1) asked the city attorney if the initial vote needed eight votes or if only the second and final vote needed eight. Assistant city attorney Kevin McDonald indicated it was the second vote that required the eight-vote majority.

Stephen Kunselman (Ward 3) wondered how it was possible for the council to be considering issues involving two different projects on the same parcel – is that legal? McDonald allowed that the city does not usually entertain multiple petitions for approval on the same parcel. But he said that City Place is an already-approved project. So the items on the council’s agenda for City Place are for an already-approved project. What was right then in front of the council was the Heritage Row PUD. If the City Place items were approved and Heritage Row is approved later, the City Place items would be moot, McDonald said.

Marcia Higgins (Ward 4) wanted to know if there was a reason why the City Place amendment was not put on the agenda for the following week, given that the council had added an extra meeting for Oct. 24. McDonald deferred to planning manager Wendy Rampson, who said that the timing was requested by the developer. He’s working on parallel tracks to prepare for construction planning, and putting it off to Oct. 24 would mean a delay of one week.

Higgins wanted to know how much movement there’d been on the part of the developer since the Oct. 3 letter. Was the version before the council the final offer, or was there room for negotiation? Rampson said the developer was still evaluating the costs and this was the closest he could come. By Friday, Rampson said, the developer was hoping to have it costed out to make sure it’s feasible.

Assistant city attorney Kevin McDonald, left, and chief financial officer Tom Crawford.

Higgins asked Helminski if there were changes from the Oct. 3 proposal. Helminski said there were changes – some had to do with affordable housing. He asked for Rampson’s help in enumerating other changes. [Substantive changes included the ability to place solar panels on the new construction and the incremental increase in affordable housing units.] Higgins said she wanted to see a third column in the chart of comparisons, so that she could see the June 2010 proposal compared against the Oct. 3 and the Oct. 17, 2011 proposals.

Higgins asked when the council would know the final offer the developer was making that he felt was feasible. Helminski said he had a call scheduled on Friday with the whole team. Helminski said the mutual commitment he’s made to the council and the staff was that if at any point there’s a deal killer, both sides would communicate that immediately.

[At the Oct. 3 council meeting, it was indicated that the final best offer would be on the table at the Oct. 17 meeting. The fact that it apparently was not ready by then and the fact that an attorney for the development team, Scott Munzel, did not appear for the slot he'd reserved during public commentary on Oct. 17, may have foreshadowed the announcement later in the week that the project would be withdrawn. Scott Munzel, an attorney for the former owner of the Fifth Avenue property where one of the two projects will be built, did not arrive at the meeting in time for the slot he'd reserved for his public commentary on his own behalf on Oct. 17.]

Sandi Smith (Ward 1) asked about the Society of Environmentally Responsible Facilities. That organization is specified as providing the environmental standards that the new construction would meet – the previous proposal would have met the Leadership in Energy and Environmental Design (LEED) standard. Helminski described SERF as a relatively new organization. With LEED, he contended that the certification process has become more important than the building components. Administratively, he said, SERF is a better experience. Smith asked if there was a SERF rating system of levels similar to LEED. Helminski said no, it’s either SERF-certified or not.

Mike Anglin (Ward 5) thanked Helminski for negotiating again with the city on the project. He described the project as unique because of its location. He wanted to know how Helminski wanted to receive additional suggestions. Helminski suggested the usual communication channels: over coffee, texting, email or phone calls.

Kunselman noted that the revised proposal has no off-street on-site parking requirement – would the developer be seeking to create an agreement with the Ann Arbor Downtown Development Authority to obtain parking permits at city parking structures? Helminski described the conversations with DDA executive director Susan Pollay as going well, but no agreement had yet been reached.

Kunselman asked if the spaces would be provided for free. Helminski quipped that he did not think that’s the way it’ll shake out in the end – tenants would pay market rate. Kunselman told Helminski that he was getting a significant break and would realize a significant savings by not having to construct underground parking.

Kunselman then addressed the issue of affordable housing. Affordable housing had not actually been built in the city as part of a PUD since Ashley Mews, a development located at Main & Packard. Since that time developers had made payments in lieu, he said. Kunselman contended that it would be primarily students who lived in Heritage Row and that a payment in lieu was the most likely scenario – that puts the burden on the city to construct the affordable housing. Helminski replied that he wouldn’t expect Heritage Row tenants to be primarily students. He said he was meeting with the county/city office of community development housing manager Jennifer L. Hall to discuss whether it’s better to build affordable housing on site or do payments in lieu. Sometimes the city prefers payments in lieu, he said.

Stephen Rapundalo (Ward 2) said he appreciated the fact that the issue of parking had been brought up – that had been a concern of his. He was worried about the overall capacity of the parking system. He’d assumed that Helminski would primarily be pursuing parking in the new underground garage for his residents, but it sounded like that might not be absolute. Rapundalo said he’d be interested to see the impact of Heritage Row tenant parking on availability of public parking.

Hohnke responded to some of his colleagues’ comments by saying that parking spaces will be a part of the development agreement. He also pointed out that the revised version of the proposal sets a date certain for reconstruction of the houses on Fifth Avenue. [The revised proposal allowed the project to be constructed in two phases, which essentially meant that the new construction of the three buildings could receive certificates of occupancy, before the seven existing houses were reconstructed.]

Hohnke then asked Jennifer L. Hall to the podium to discuss Kunselman’s question about the benefit to the city of payments in lieu versus construction of affordable units as a part of a development. Hall traced the history from the early 2000s when the city’s policy view was that including affordable units on site was the best option. Over time, she said, she and others have come to believe that inclusion of affordable units as part of a development that includes market rate units doesn’t necessarily result in the kind of units the city is looking for. [Hall was recently selected to head the Ann Arbor Housing Commission.]

As an example, Hall gave Corner House Lofts – three affordable units were constructed there. The building is occupied completely with students. The city can’t guarantee that the student occupants of the affordable units are from historically low-income households. But Hall said that 90% of students are eligible to rent the affordable units and they can’t be excluded. Hall described how money that’s paid in lieu of construction of affordable housing can then be leveraged as matching funds for federal and state grants. Hohnke was satisfied that a payment in lieu for affordable housing would provide a public benefit.

Outcome: The council gave initial approval to the revised Heritage Row proposal, with dissent from Briere, Kunselman and Higgins. The expected second and final vote would have taken place on Oct. 24. However, on Oct. 21 the developer pulled the project from that meeting’s agenda.

City Place: Landscape Buffer – Council Deliberations

Tony Derezinski (Ward 2) asked city planning manager Wendy Rampson to explain the issue before the council. After the new area, height and placement (AHP) revisions were put in place, Rampson explained, the planning commission had been asked to look at additional buffering requirements between multiple-family buildings. That resulted in a change to the landscape ordinance. And that had an unintended consequence in areas zoned R4C (multi-family residential). It’s problematic to apply the ordinance, she said, because often the setback is smaller than the buffer requirement – R4C areas are also largely already developed, she said. Rampson supported the modification to City Place and is working on it with the planning commission’s ordinance revision committee to revise the ordinance to accommodate existing conditions in R4C areas.

In the meantime, the landscape ordinance provides for flexible application. [The planning commission handled three such cases of flexible application of that ordinance at its Oct. 18 meeting.]

Chapter 62
5:608 Modifications
(2) Flexibility in the application of the landscaping or screening requirements of Sections 5:602, 5:603, 5:604 or 5:606 may be allowed if each of the following conditions are met:
(a) The modifications are consistent with the intent of this chapter (Section 5:600(1)); and
(b) The modifications are included on a site plan and in a motion approved by City Planning Commission or City Council; and
(c) The modifications are associated with 1 or more of the following site conditions:
…
(vii)
Landscape elements which are a part of a previously approved site plan may be maintained and continued as nonconforming provided no alterations of the existing landscape elements are proposed.

Marcia Higgins (Ward 4) noted that City Place was approved before the area, height and placement work was done – before the landscape ordinance was revised. She wanted to know if the council normally went back and applied a revised ordinance to a project that had already been approved. Rampson confirmed that because the developer is making minor administrative changes, that triggers the application of the new code. Higgins wondered if the request could go before the zoning board of appeals. Rampson confirmed it could.

Sabra Briere (Ward 1) questioned why the change was not postponed until the council’s Oct. 24 meeting. She said she recognized the parallel tracks on which the developer was proceeding – the developer would like to break ground at a specific time. But neither of the City Place requests before the council that night required a change to be made before groundbreaking, she contended. Either the landscaping requirements or the revised elevations could be dealt with after Heritage Row is defeated, she said, if it’s in fact defeated. Briere then moved to postpone the measure.

Developer Jeff Helminski.

Margie Teall (Ward 4) asked developer Jeff Helminski to speak to the issue. Helminski said there was a tremendous amount of effort going into both City Place and Heritage Row simultaneously. If Heritage Row doesn’t work out, he said, his team needs all elements of City Place in place. It’s not an easy task to move Heritage Row forward, he said. His continued desire to do that is based on seeing good faith efforts by the city. If the City Place requests were postponed, he said, it would send a clear message to his team and it would impact the future of Heritage Row. Based on Helminski’s remarks, Teall said she wouldn’t support postponement.

Higgins said that before the council had started its conversation about Heritage Row, she was very concerned. However, she could understand the developer’s viewpoint. Next week, she continued, the council will make a decision one way or another. Even though she’d heard the city attorney’s office say that actions related to City Place would be moot, if Heritage Row were approved, Higgins still wanted to see City Place resolutions rescinded. She said she wouldn’t support postponement.

Tony Derezinski (Ward 2) agreed with Higgins’ unwillingness to postpone. Stephen Kunselman (Ward 3) said he supported postponement. Approving the resolution would send the wrong message about the city council. The City Place project has been approved for two years, he said. He did not know why the developer couldn’t wait a week.

Christopher Taylor (Ward 3) said he was opposed to postponement, because the council needed to match the good faith effort of the developer. However he shared his colleagues’ view that it makes more logical sense to look at City Place after voting up or down on Heritage Row.

Teall said she was having a tough time with Kunselman’s description of “bending over backwards” for the developer. It was the council that had gone back to the development team and asked them to look at Heritage Row again.

Outcome on postponement: The motion to postpone the landscaping issue for City Place failed, with only Briere and Kunselman voting for it.

Outcome on City Place landscaping: The council approved the resolution over dissent from Briere.

City Place: Revised Elevations – Council Deliberations

Tony Derezinski (Ward 2) introduced the resolution by saying that it was the second of the pair of resolutions that had been requested by the developer. Planning manager Wendy Rampson described how the changes included additional windows on gable ends and new materials on upper parts of the building. She said that planning staff recommended approval, because the changes are relatively minor and provide additional architectural interest.

Noting the additional windows are on the fourth floor, Stephen Kunselman (Ward 3) asked if that floor was for tenant occupancy. Rampson explained that it would be a common area or loft area for third-floor units. Kunselman wanted to know how fire escape is being addressed. Developer Jeff Helminski said that the architect Brad Moore had addressed those issues appropriately.

Back-and-forth between Kunselman and Helminski revealed that the intent is to treat the third-level units in parallel fashion with the other units of the building, which are two-level units. Namely, they’d all have two different, separated common areas. With six people sharing a unit, Helminski said, two common areas would allow residents to engage in different activities – say, watching TV and playing games.

Responding to a request from Briere for additional clarity about the internal configuration of the units, Helminski described a spiral staircase and a vaulted ceiling configured in a townhome style.

Outcome: The council voted unanimously to approve the changes to the City Place elevations.

Zoning Board of Appeals Appointments

The council was asked to consider confirmation of the reappointments of Wendy Carman and David Gregorka for three-year terms to the city’s zoning board of appeals (ZBA). The nine-member ZBA enjoys fairly broad authority, including the power [from the city code]: “To hear and decide appeals where it is alleged by the appellant that there is error in any order, requirement, permit, decision, or refusal made by the Building Official or any other administrative official in enforcing any provision of this Chapter.”

Outcome: The council voted to confirm the reappointments to the ZBA.

Stopgap Funding to Warming Center

On the agenda was a resolution to authorize $25,000 to support the Shelter Association of Washtenaw County‘s warming center. The money will come from the city’s general fund reserve balance. It will make up the gap between the roughly $56,000 in private donations that SAWC has been able to raise for the warming center and its $81,000 annual operating budget.

Of that operating budget, $600 is spent on utilities for laundry, and the rest compensates shift workers paid $12.57 per hour, and a half-time case worker, who is paid $15.96 per hour.

The warming center, located in the Delonis Center on Huron Street on the western edge of downtown Ann Arbor, can accommodate up to 50 individuals. It is open December through April, or any time the temperature (or wind chill) falls below 35 F degrees.

Closure of the warming center was part of the Shelter Association’s strategy to remain financially solvent in the face of funding cuts from Washtenaw County, the state and federal government.

A number of specific negative impacts have been cited by Shelter Association staff that would result from a closure of the warming center: more police calls; increasing frustration among business owners; increased vandalism; backlash against homeless people; increased crime by desperate people; untreated mental health problems; increased use of emergency rooms for non-emergency care; and overcrowding of jails and the court system.

The $25,000 allocated this year could be analyzed as follow-through on recent previous investments made by the Ann Arbor city council in the specific mission of the warming center.

For example, at its Nov. 5, 2009 meeting, the council passed a resolution that awarded a $30,500 contract with the Shelter Association and a $129,000 contract with Interfaith Hospitality Network, which operates a family shelter. The money was to provide case management and staff support for 25 additional beds at the Delonis Center and 25 additional beds in the rotating shelter program, as well as housing vouchers for eight families.

The council had received a presentation on the homelessness crisis at its Oct. 19, 2009 meeting from Mary Jo Callan, head of the county/city office of community development. She had alerted them to the likelihood that a funding request would be coming to them at a subsequent meeting.

The Ann Arbor Downtown Development Authority, at its Nov. 4, 2009 meeting, had authorized $20,000 to cover the “hard costs” – i.e., the actual beds – in connection with the initiative, which was seen as a short-term solution in the face of approaching winter weather.

Although it was not earmarked specifically for the warming center, on Oct. 6, 2010 the DDA authorized a $218,050 grant from its housing fund to the Shelter Association for improvements at the Delonis Center. The money paid for new washers and dryers, lockers and chairs, an emergency generator, energy conservation measures, medical equipment and software.

Warming Center: Update

At the beginning of the Oct. 17 meeting, Ellen Schulmeister, executive director of the Shelter Association of Washtenaw County, and Washtenaw Housing Alliance executive director Julie Steiner gave the council an update on the funding situation.

Schulmeister thanked the council for current and past support. The shelter and the city had been partners for a long time, she said. Now is a very hard time – both for people who need help and those organizations who support them.

The shelter had lost $400,000 in funding while costs continue go up, she said.

The shelter has had to cut staffing to two vital programs: the warming center and the rotating shelter. The shelter had tried to use volunteers for the warming center, but was unable to get volunteers who could be awake all night. The Washtenaw Housing Alliance asked the Shelter Association to operate the warming center one more year, so later in the evening, the council would be asked to provide some support so that the warming center can continue through the winter of 2011-12. She said that over the next year the Shelter Association would work diligently to identify longer-term solutions.

Tony Derezinski (Ward 2) and executive director of the Washtenaw Housing Alliance Julie Steiner get on the same page before the meeting.

Steiner told the council that the shelter’s warming center and rotating shelter are doing the community a huge favor. In Washtenaw County, she said, they work hard to make sure that shelters are not just mission shelters – “three hots and a cot.” The goal has been to provide case managers and services too.

As the Shelter Association looks at how to address the funding problems over the next couple of months, Steiner hoped councilmembers would help. She told them they’d been leaders around this issue. She noted that a copy of the Blueprint to End Homelessness Progress Report had been distributed to councilmembers. [.pdf of progress report] It traces progress from the creation of the blueprint in 2004. Steiner noted that the world is different from the way it was in 2004. She said the Washtenaw Housing Alliance will sponsor a series of community conversations to address the situation – as a whole, not just the warming center – in a world of shrinking resources.

Sandi Smith (Ward 1) wanted to know if Washtenaw County was matching any of the $25,000 that the city was being asked to contribute. Schulmeister told Smith that no funding for the warming center’s current need was coming from the county general fund. The other private funding – from an unnamed organization that Schulmeister expected would provide it – has not yet been approved by that organization’s board, she said. It’s an organization that involves the county but is not the county.

Mayor John Hieftje noted that Washtenaw County is proposing deep cuts in human services funding as part of its proposed 2012-2013 budget. Hieftje said the city looks at the Delonis Center as a partnership with the county. The city has been holding up its end of the partnership and the city is asking the county to hold up their end, he said. [Chronicle coverage: "Proposed County Budget Brings Cuts." The proposed county budget, if unchanged, would cut funding to the Shelter Association from $160,000 in 2011 to $25,000 in 2012 and 2013. On Oct. 19, the county board voted to reallocate another $26,230 to the Shelter Association in both 2012 and 2013, though it was not earmarked for the warming center.]

Hieftje invited councilmembers to ask any questions immediately following the remarks by Schulmeister and Steiner at the beginning of the meeting, so that they did not have to stay until the council reached the item on the agenda. Schulmeister told the mayor she was planning to stay anyway.

Warming Center: Public Comment

Lily Au expressed concern about the amount of administrative costs for the office of community development and the United Way. She noted the county’s proposed reduction in support for the Delonis Center from $160,000 to $25,000. She told the council that if they approve the money that’s asked of them, next month people will come again, saying the homeless are cold and hungry. The whole community needs to wake up and donate directly to organizations they want to help, she said.

Warming Center: Council Deliberations

Sabra Briere (Ward 1) led off council deliberations by giving some context for the request being made to the council for the $25,000. She’d heard news earlier in the year about the impact that reduced funds from the federal, state and county level would have on the Delonis Center’s ability to perform services.

Of the reduced services, Briere said she was particularly concerned that the warming center would be closed, because of the potential impact on the city of its closing. She cited the various expenses that would accrue across various parts of the community – from law enforcement to medical care providers – if people had no place to stay warm. The city would be wiser to spend money on prevention than reaction, Briere said. She said she’d spoken with the mayor and then the mayor had spoken with Schulmeister. In their conversations, the city had said they would not provide 100% of support and that the Shelter Association would need to find other support to match the city’s contribution. She encouraged her council colleagues to support the contribution.

Sandi Smith (Ward 1) noted that the program the city was providing money for is something that the city had asked the Shelter Association to provide, citing a contract from 2009. It’s important that the warming center continue, she said, and the need is even greater now. Hiefjte then described how back in the 1970s there were people living on the street. This is this generation’s depression, he said.

Hieftje reiterated remarks he’d made immediately following Schulmeister’s comments at the start of the meeting, saying that Washtenaw County is a partner in the Delonis Center. However, the county has proposed a budget that dramatically decreases funding to the center. The city needs to watch that closely, Hiefjte said. The county has some tough budget hurdles and the county board will have to make some tough decisions, he said. Those decisions will impact Ann Arbor, Hieftje concluded.

Outcome: The council voted unanimously to authorize funding for the warming center.

City Apartments Elevation Revisions

The council was asked to approved modifications to Village Green’s already-approved City Apartments planned unit development (PUD) at First and Washington. [This should not be confused with the similarly named City Place matter-of-right proposal by a different developer on South Fifth Avenue].

The changes include increasing the height of the structure from 94 to 104 feet (to lift the base of the building out of the water table), adding an entrance on First Street, modifying the window type and size on the residential portion of the building, and adding ventilation screens on the east side (alley) of the building.

The City Apartments project was given PUD zoning and site plan approval by the council on Nov. 6, 2008. The nine-story building will include 156 dwelling units and 244 parking spaces on the first two floors. The site is currently a city-owned property functioning as a surface parking lot with 64 spaces, after the parking structure there had to be demolished due to its poor structural condition. The new parking deck, which will offer spaces to the general public as well as to residents, is being financed by the Ann Arbor Downtown Development Authority.

The sale of the property, for a little over $3 million, is part of the city of Ann Arbor’s financing plan for construction of the new municipal center, which houses the police department and the 15th District Court. The council has extended the purchase option on the First and Washington property several times, most recently on Aug. 4, 2011.

At one of the DDA board’s late August committee meetings, news of a pending deal and imminent construction was relayed to committee members. The council is expected to authorize the closing on the deal at its Nov. 10, 2011 meeting. Signs at the First and Washington parking lot warn patrons of the lot’s imminent closure.

During his communications to the council, Mike Anglin (Ward 5) reminded his colleagues that he’d brought up the issue up a few months ago of environmental studies in connection with the First and Washington site. The foundation had been elevated another 10 feet, he said, which is an accomplishment. But there were other environmental engineering studies that could be of value.

So Anglin has requested in an open letter to staff that any studies related to this property be made available. When a different parcel (at First and William) was being considered as the site of a parking structure, there were studies done and soil samples taken, he said. So he requested that if there is information out there, that it be made available to the council.

Outcome: The council voted without discussion to approve the change in elevations for City Apartments.

Biercamp Parcel Annexation

On the council’s agenda was an item regarding the annexation 1643 and 1645 S. State St. into the city of Ann Arbor from Ann Arbor Township. A new business, Biercamp Artisan Sausage and Jerky, is located on one of the parcels.

During the public hearing on annexation, Thomas Partridge complained that the resolution has no language about a requirement for affordable housing. The council should table the resolution and consider it in detail, he said. The council should consider the impact on the township and the loss of taxes to the township.

Outcome: The council voted without discussion to approve the annexation of the 1643-45 S. State St. parcels.

Now that the annexation has been approved, action by the city council on a rezoning request will be scheduled. The owners of Biercamp would like for the city to approve the parcel for C3 (fringe commercial district) zoning. It would allow the business to sell a greater variety of products beyond those that it produces on the premises.

The planning commission voted unanimously to deny C3 zoning for the parcels at its Sept. 8, 2011 meeting. The rezoning request will be the second one considered recently in the general area of State Street and Stimson. On Oct. 3, 2011 the council rejected a request to rezone the parcel where Treecity Health Collective is located – from O (office) to C1 (local business).

The two rezoning requests have prompted discussion by the planning commission and the city council about the need for a study of the South State Street corridor, so that the parcels in question can be considered in a larger context. At an Oct. 11 working session, the planning commission was updated on city planning staff’s in-house effort to conduct a study of the State Street corridor. Previously, the intent was to hire a consultant to do that work.

Arbor Networks Tax Abatement

Before the council for its consideration was a tax abatement for Arbor Networks, a computer network security company. The abatement is on $883,527 of real property improvements and $7,790,454 of new personal property and equipment.

Lon Lowen of Arbor Networks.

According to a staff memo accompanying the resolution, Arbor Networks was granted a tax abatement in 2008. The abatement agreement in 2008 required Arbor Networks to move 74 jobs to their Ann Arbor facility and add at least eight jobs. However, as of December of 2010 there were only 74 jobs at this location.

The staff memo on the current request for a tax abatement states that the digital information business is continually changing with new and faster technology. Arbor Networks needs new test equipment and digital equipment, and according to the memo, anticipates adding 20 new employees to the Ann Arbor facility.

During the public hearing, Lon Lowen, quality assurance director with Arbor Networks, introduced the council to the company, which was founded in 2000 and has maintained a research and development facility in this area since its founding. The company makes software to fend off threats to computer network security, he said. The equipment on which the tax abatement is requested, he explained, is needed to expand the research and development facility. It reflects an investment of over $8 million by December 2012. As a result of that investment, the company expects to add 20 new jobs by December 2013, he said.

Thomas Partridge also spoke at the public hearing, and called on the council to fully inform the public on the resolution as to the details and rationale for placing the item on the agenda. He complained that these questions are decided in advance and usually passed unanimously by voice vote without discussion of the reasoning. He questioned the need for this resolution without requirements of equal opportunity employment. He questioned whether the company had exhausted other financing options.

Outcome: The council voted unanimously, without discussion, to approve the tax abatement.

Local Development Finance Authority

The council was asked to appoint Ned Staebler to fill an open four-year term on the local development finance authority (LDFA) board. The term will end June 30, 2015. The position previously was held by Michael Korybalski. That term expired on June 30, 2011 but had not yet been filled.

The LDFA is funded through TIF (tax increment financing) capture in a geographic district comprising the Ann Arbor Downtown Development Authority and the Ypsilanti Downtown Development Authority districts. However, TIF revenue for the LDFA is generated only in the Ann Arbor DDA district. The principal activity of the LDFA is a business accelerator. The LDFA contracts with Ann Arbor SPARK to manage the accelerator.

Staebler took a position starting in the summer of 2011 as vice president of economic development for Wayne State University, after previously serving with the Michigan Economic Development Corp.

Staebler currently serves on the city’s Housing and Human Services Advisory Board, which was established in 2007 to replace two other bodies: the Community Development Block Grant (CDBG) executive committee and the city’s housing policy board. The function of the HHSAB is to make recommendations on policies and programs to address the needs of low-income residents, to monitor the implementation of Ann Arbor’s housing policy and the creation of a city housing coordinator.

Staebler lost a close Democratic primary race for District 53 state representative against Jeff Irwin, who was elected to that position in November 2010.

During the brief city council deliberations, Stephen Rapundalo (Ward 2), who serves as the city council’s representative to the LDFA board, noted that Staebler is known to the council and has familiarity with economic development. He had also held an ex officio position on the board when he worked for the Michigan Economic Development Corp. Staebler is a perfect fit for the LDFA board, Rapundalo concluded.

Outcome: The council voted unanimously to approve Staebler’s appointment to the LDFA board.

Intent on Street/Sidewalk Tax Use

At the Oct. 17 meeting, the council considered a resolution of intent for the use of proceeds from a street/sidewalk repair millage that will be on the Nov. 8 ballot. The council had considered the resolution of intent at its Oct. 3 meeting and before that at its Sept. 19 meeting.

Voters will be asked to approve two separate proposals: (1) a 5-year renewal of a 2.0 mill tax to support street repair projects; and (2) a 0.125 mill tax to pay for sidewalk repair.

The resolution of intent specifies that the street repair millage will pay for the following activities: resurfacing or reconstruction of existing paved city streets and bridges, including on-street bicycle lanes and street intersections; construction of pedestrian refuge islands; reconstruction and construction of accessible street crossings and corner ramps; and preventive pavement maintenance (PPM) measures, including pavement crack sealing. [.pdf of unamended Oct 3, 2011 version of resolution of intent]

At its Oct. 3 meeting, councilmembers had questions about the need to have any resolution of intent, as well as the status of millage revenue use inside the geographic area of the Ann Arbor Downtown Development Authority.

The resolution of intent had originally stipulated that sidewalk repairs inside the Ann Arbor DDA district would not be funded by the sidewalk repair millage, except when the sidewalks are adjacent to single- and two-family houses. A recent meeting of the DDA’s operations committee revealed a measure of discontent on the DDA’s part about the intended restriction inside the DDA district and the lack of communication from the city of Ann Arbor to the DDA about that issue.

Mike Anglin (Ward 5) and Stephen Kunselman (Ward 3) have stated in the course of their re-election campaigns that they only reluctantly support the sidewalk repair millage. Stephen Rapundalo (Ward 2) has characterized the sidewalk millage as simply offering voters a choice. Though not up for re-election this year, mayor John Hieftje stated at the DDA’s Oct. 5 board meeting that he did not think councilmembers are out in the community saying that the city absolutely needs the sidewalk millage or that it’s essential. Like Rapundalo, the mayor characterizes the sidewalk millage as offering residents a choice of having the city take over the responsibility for sidewalk repair.

Intent on Street/Sidewalk Tax Use: Public Commentary

Karen Sidney stated that the resolution has many unanswered questions. There’s $30 million currently in the street millage fund, she said. [This appears to be based on the FY 2010 Comprehensive Annual Financial Report of the city, which gives a snapshot of the fund balance on June 30, 2010.] Of that, $7 million is needed for the East Stadium bridge project, Sidney said. [Although the city has received federal and state funding for a large part of the project, the city still has a local share.] What streets will be fixed with the remaining $23 million? she asked.

What streets will be fixed with the $45-50 million the millage will generate over its 5-year lifetime? So far, Sidney said, she’s seen only five streets named – surely there would be more? [The fact sheet prepared by the city specifies these five projects for 2012 constructions: Packard (Platt to US-23), Hill St. (Forest to Washtenaw), E. Stadium (Packard to Washtenaw), Pontiac Trail (Skydale to M-14), and Dexter Road (Maple to Huron)] Sidney also wanted to know if priority would be given to roads that serve new building projects, like the proposed Fuller Road Station.

With respect to the $500,000 that the sidewalk repair millage is expected to generate, Sidney wanted to know how much will be consumed through administration costs. The city has estimated that those administration costs will be $160,000. That’s 27% of the additional tax, she noted. She also wanted to know why the city is saying it can repair sidewalks cheaper than residents can, when five years ago the city said that residents could have the work performed for 40% less than it would cost the city.

Residents along her street, Sidney said, had paid to fix their sidewalks, but now those same slabs are being replaced as a part of a street resurfacing project. She wanted to know what steps will be taken to improve coordination. She noted that the city is taking over the cost of sidewalk repair now, “when there’s nothing left to do,” after administering a sidewalk replacement program for five years. What happens after five more years, she wondered. Will residents be asked to pay again?

Intent on Street/Sidewalk Tax Use: Council Deliberations

Council deliberations were led off by an amendment offered by Stephen Rapundalo (Ward 2) concerning how the millage would be used in the DDA district. He said the amendment would address an inequity identified by commercial property owners under the original language – they’d be included in the repair millage but excluded from the benefits. Rapundalo’s amendment added the following language

3. Notwithstanding the provisions of Paragraph II.2, if the City and the Downtown Development Authority (“DDA”) execute an agreement whereby (i) the DDA agrees to perform sidewalk repair within the Downtown Development District (“DDD”) adjacent to all properties against which the City levies property taxes; and (ii) the City agrees to transmit to the DDA annually 1/8th mill for parcels located within the DDD and not otherwise captured by the DDA; then the 2012 Street and Bridge Resurfacing and Reconstruction and Sidewalk Repair millage may be used for sidewalk repair within the Downtown Development District adjacent to all properties against which the City levies property taxes. The 1/8th mill shall be subject to the Headlee rollback. [.pdf of complete resolution of intent as amended on Oct. 17, 2011]

The original version of the resolution of intent had assumed that the DDA would repair the sidewalks within the district that are adjacent to commercial properties, based on the incremental tax capture in the DDA district for the millage. The impact of the amendment is to provide the entire millage amount to the DDA (not just the captured increment), but only if the DDA agrees to take responsibility for sidewalk repair inside the DDA district.

Tony Derezinski (Ward 2) questioned the inclusion of the phrase “shall be subject to the Headlee rollback.” He wondered if that is a restatement of the law. City attorney Stephen Postema indicated that assistant city attorney Abigail Elias had prepared the language, and that he assumed it’s a restatement.

Sabra Briere (Ward 1) confirmed with Postema that the entire millage is subject to the Headlee rollback. Sandi Smith (Ward 1) said she absolutely supported the amendment. She was glad the council took the time to pause and come up with a healthy solution.

Christopher Taylor (Ward 3) said it’s a fair and fine balancing of two competing interests.

Homayoon Pirooz, head of project management for the city, was asked to respond to comments made by Karen Sidney during public commentary about the amount of money in the fund balance for street repair. The fund balance does not distinguish committed funds for contracts on projects that were previously done, he said. As an example, he gave a West Liberty Street construction project from 10 years ago. As another example, for the West Stadium Boulevard project, he said, the city also still owes money to the state, that will need to be paid when the city is invoiced.

The fund balance also does not distinguish money that is earmarked for all the projects the city is planning to do, like Dexter-Ann Arbor Road and Packard Road next year – those projects will need a large sum of local dollars that are not labeled in the fund balance. Once you subtract the committed dollars and planned-for dollars, he said, the amount in the fund balance is much smaller. Without the new millage, he said, the funds will be used up by the end of 2012.

Discussion related to the sidewalk repair millage also arose earlier in the meeting as a part of the consent agenda, when the council approved moving delinquent water utility, board up, clean up, vacant property and housing inspection fees to the December 2011 city tax roll.

The current sidewalk repair program was supposed to result in residents being charged a fee for replacing sidewalk slabs, if they are cited by the city and decline to have the work performed themselves. Stephen Kunselman (Ward 3) said that in two years nothing has come through as delinquent charges. City treasurer Matt Horning confirmed for Kunselman that in this current tax roll there aren’t any delinquent sidewalk repair charges.

Kunselman wanted an explanation – in the past he’d seen those charges come through. Sue McCormick, public services area administrator, indicated that this year the city has been working with a contractor completing outstanding sidewalk repairs. Those bills will go out and the council would see them in the next round, she said.

Outcome: The council voted unanimously to approve the resolution of intent on use of the sidewalk/street millage.

Stadium Bridges Project

The council was asked to authorize the execution of a standard contract between the city and the Michigan Dept. of Transportation (MDOT) for the East Stadium Boulevard bridges reconstruction project. The project will result in the closure of East Stadium Boulevard in both directions for about a year, starting around Nov. 28, just after the University of Michigan’s last home football game of the year.

Dan’s Excavating Inc. was awarded the bid – at $13,910,334.77, it was the lowest qualified construction bid. The staff memo accompanying the council resolution put the current estimate for the total project cost – including all prior expenses, but excluding contingencies for the future construction – at $22,776,700. The city received a total of $13.9 million in TIGER II federal grant funding to pay for the project, as well as $2.87 million in state funds.

The project website, which includes detour maps and timelines, is annarborbridges.org.

During council deliberations, Margie Teall (Ward 4) and Sabra Briere (Ward 1) elicited from city staff some of the planned architectural details related to the stairways from Stadium Boulevard down to South State Street. They’ll have bicycle grooves to allow cyclists to walk their bicycles up and down the stairs more easily. And snow clearance will be achieved through radiant heating built into the steps, powered by the same circuit as streetlights, which in this case are owned by the city, not DTE.

Outcome: The council voted to authorize execution of the MDOT contract.

Labor Union Benefits

The council was asked to give initial approval to revisions to the ordinances that govern the retirement and health care plans for two of its unions: the Ann Arbor Police Officers Association (AAPOA) and the American Federation of State, County and Municipal Employees (AFSCME).

The revisions to the ordinances resulted from a collective bargaining agreement with AFSCME and a binding arbitration under Act 312 with AAPOA. The changes are similar to ordinance changes already enacted for non-union city workers.

The pension contribution for AAPOA and AFSCME workers will rise from 5% on a post-tax basis to 6% on a pre-tax basis. The vesting period for new hires will increase from 5 years to 10 years. Also for new hires, the final average compensation (FAC) calculation will be increased to a five-year period. The previous FAC was based on a three-year period.

On the health care side, the AFSCME and AAPOA employees would have the same access-only retiree health plan as non-union employees have. Like all ordinance changes, the city council will need to give these revisions a second and final approval no sooner than its next regular meeting.

Outcome: The council voted without discussion to approve the union labor pension and retirement health benefits.

Taxicab Law

Before the council for its consideration was initial approval of changes in the taxicab ordinance. The changes make explicit how long a taxicab company license is valid (10 years) and spell out some additional conditions on revocation or suspension of the company license.

The revisions also add reasons that can be used for suspending an individual taxicab driver’s license, which include a city administrator’s view that a driver “has acted in an unprofessional, harassing or threatening manner to passengers, or others.”

Like all ordinance revisions, the taxicab licensing revision will need a second and final approval from the council in order to take effect.

Stephen Kunselman (Ward 3) told the council that as the council’s representative to the taxicab board, ordinance amendments are needed. He asked chief financial officer Tom Crawford, who also sits on the taxicab board, to explain the changes and the concerns that are addressed by the changes.

Crawford characterized the changes as falling in three areas. In the first area, related to licensing, Crawford said that in the past the city had seasonal operators who would want to come in and work the football season and then disappear. The ordinance is being changed so that if a company ceases operation for 45 days, the city can revoke the license. Crawford explained that a healthy taxicab industry needs stability and this is a mechanism to help guard against companies frequently coming in and out of the market.

Another area of change has to do with solicitations and how the companies represent themselves. Several companies advertise themselves as taxis, but they’re in fact limousines. Crawford characterized it as a safety issue for someone who believes a vehicle is a taxi, but it’s in fact a limo. [A taxi is per code "... accepting passengers for hire within the boundaries of the city as directed by the passenger." A limousine is pre-booked.] If a company they hold itself out as a taxi, they have to be licensed as a taxicab, Crawford said. [The city's taxicab code already prohibits advertising in the reverse direction – it prohibits taxicabs from holding themselves out as limousines.]

Outcome: The council voted to give the taxicab ordinance initial approval.

Communications and Comment

Every city council agenda contains multiple slots for city councilmembers and the city administrator to give updates or make announcements about issues that are coming before the city council. And every meeting typically includes public commentary on subjects not necessarily on the agenda.

Comm/Comm: Crime

Christopher Taylor (Ward 3) said that he’d attended a neighborhood meeting recently where many people had expressed a perception that there’s a crime problem in Ann Arbor. He said it was perhaps fueled by increased access to information about crime data that a perception had resulted that crime was on the uptick. He asked deputy chief Greg Bazick how the police see things.

City clerk Jackie Beaudry and deputy chief of police Greg Bazick before the start of the Oct. 17, 2011 city council meeting.

Bazick said they’re not seeing an upswing in reported crime. He noted that crimmapping.com allows for real-time access to what’s reported on a daily basis. There have certainly been incidents that have raised concern in the community [including a series of sexual assaults]. But there’s nothing to indicate an upswing or a crime wave, he said.

Mayor John Hieftje said he gets the stats on crime every week before he meets with the police chief and that this year crime has shown a double-digit decrease.

Among the points Bazick made was the size of a law enforcement agency is never the sole indicator of crime. He also cautioned that the crimes categorized as “Part 1″ by the FBI are the kind of crimes that are almost always reported by victims and are not typically identified as a result of police-initiated enforcement activity. On the other hand, “Part 2″ crimes might show an increase based just on a police-initiated enforcement effort.

Comm/Comm: Police Hiring

Hieftje reminded the council that on the last day of May, when the council had approved the budget, he’d said the goal should be that there would be no further cuts in the police department. He said he’d been working with staff and with councilmember Stephen Rapundalo (Ward 2) on that issue. Hieftje said the department will see some retirements, and the Ann Arbor Police Officers Association also has new contract. Cuts are projected to be necessary at part of the FY 2013 forecast, but he felt that some replacements could be hired starting on Jan. 1, 2013.

Rapundalo commented that all along the council has repeatedly talked about its commitment to public safety. The council had to make a difficult decision last year [to lay off some police officers], but now that the city has an agreement with AAPOA, he said, there are opportunities to sustain and increase the police officer ranks.

[Rapundalo is facing a strong re-election challenge in Ward 2 from independent Jane Lumm, whose campaign includes criticism of the reduced numbers of police officers employed by the city of Ann Arbor.]

Comm/Comm: Energy Farms

Kermit Schlansker described the potential benefits of energy farms, which can include gasifiers that turn hard biomass into fuel. He also described solar arrays that could be used to concentrate the sun’s energy to create solar steam.

Alan Haber (left) and councilmember Mike Anglin (Ward 5).

Comm/Comm: Library Lot

Alan Haber said he was glad to hear about Schlansker’s energy farm. He told the council he was there again to talk about the space above the underground parking garage on South Fifth Avenue. He noted there’s a process going on to invite as much of the public as possible to figure out what to do there. He contended the land can be used maximally as a public gathering space. Citizens would adopt the library green without the use of city funds, he said, and they could program the space. Citizens need the opportunity to do that.

Is the city going to pave the surface, or will the council give citizens the opportunity to develop the surface? Haber wondered. It’s counterintuitive to have a surface lot above the underground lot, Haber said, if you want to encourage people to use the underground parking lot. Ann Arbor needs a heart in the center of town, and the space above the underground parking garage could serve that function, he said. It could be combined with a building as a practical solution, he said.

Stefan Trendov told the council he’d done some drawings to illustrate what Haber was describing – the building would be light and see-through and inviting. He said he’d recently designed a project for the Sultan of Oman. He wanted cranes to come in and start building in Ann Arbor – we need to see more cranes, he said.

Comm/Comm: End Discrimination

Thomas Partridge told the council he was there to address them about the importance of ending discrimination of all forms and working to stop government corruption of all forms, including corrupt acts by Ann Arbor government employees, police officers and businesses in the entire region. They need to bring about a true democratic party, attitudes, mindset and practices, he said, and he called on voters to recall regressive Republicans.

At the public comment period at the end of the meeting, Partridge also spoke. He described himself as an advocate for those who can’t attend public meetings, and those who are the most worthy of services. He called for public access to polling places through public transportation and transportation for the disabled, polling stations that actually work for handicapped people, and better-trained poll workers.

Present: Stephen Rapundalo, Mike Anglin, Margie Teall, Sabra Briere, Sandi Smith, Tony Derezinski, Stephen Kunselman, Marcia Higgins, John Hieftje, Christopher Taylor, Carsten Hohnke.

Next council meeting: Oct. 24, 2011 at 7 p.m. in the council chambers at 301 E. Huron. [confirm date]

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