The Library Lane parking deck is highlighted in yellow. The name “Library Lane” is based only on the proximity of the structure to the downtown location of the Ann Arbor District Library. The library does not own the structure or the mid-block cut-through. (Base image from Washtenaw County and City of Ann Arbor GIS services.)

From the resolution: “Resolved, That City Council direct the City Administrator to allocate 50% of any and all proceeds, after fees and closing costs, from the sale of development rights at 319 S. Fifth Avenue [the Library Lane lot] to the affordable housing fund.” Use of money in the city’s affordable housing trust fund is subject to recommendations by the housing and human services advisory board (HHSAB).

Based on a ballpark estimated value for the property of $6-7 million dollars – given by Jim Chaconas of Colliers International at the council’s March 17, 2014 meeting – the resolution would translate to somewhere in the neighborhood of $3 million to support affordable housing, depending on fees and closing costs.

No specific deal appears to be in the offing to develop the top of the structure. But the council voted at its March 17, 2014 meeting to hire a brokerage service to list the development rights to the top of the underground parking garage for sale. At the same meeting, the council passed a separate resolution that reserved 6,500-12,000 square feet on the Library Lane site for a publicly owned urban park.

The resolution allocating 50% of proceeds of a Library Lane sale to support affordable housing is sponsored by four councilmembers: Sabra Briere (Ward 1), Christopher Taylor (Ward 3), Chuck Warpehoski (Ward 5) and mayor John Hieftje.

The strategy of channeling at least some of the proceeds of land sales to support affordable housing efforts has been a consistent part of city policy dating back several years. However, the council has not always agreed on the portion of a sale that should be allocated to support affordable housing. At the March 16 Sunday night caucus, Briere indicated one reason she might be reluctant at the following evening’s council meeting to support the hiring of a broker to list the Library Lane development rights for sale: She did not at this time want to take on the fight with other councilmembers about what to do with the proceeds. But Briere voted with seven of her colleagues on the 8-1 vote that saw only Sumi Kailasapathy (Ward 1) dissenting. Sally Petersen (Ward 2) and Margie Teall (Ward 4) were not present for that vote.

The pending sale of the former Y lot in downtown Ann Arbor – on William between Fourth and Fifth avenues, across the street from the Library Lane site – is expected to generate roughly $1.4 million in net proceeds from the $5.25 million purchase price. That sale to hotelier Dennis Dahlmann has a closing date on April 2, 2014. The council voted at its Dec. 16, 2013 meeting to allocate all of those net proceeds to the affordable housing trust fund. More recently, at its March 3, 2014 meeting, the council directed the city administrator to prepare a budget resolution that would – upon completion of the former Y lot sale – allocate $600,000 from the affordable housing trust fund to the Ann Arbor Housing Commission, to support major capital improvements to its properties.

More than a year ago, at its Oct. 15, 2012 meeting, the council adopted a general policy on proceeds of land sales that was based on a budget committee recommendation. Essentially the policy is to consider land sales on a case-by-case basis, considering all the needs of the city. A nod to affordable housing was included in an amendment added at the council meeting in the form of a statement that all needs of the city would be considered in deciding the use of land sale proceeds – but “especially the need for affordable housing.”

The draft resolution to be considered at the April 7, 2014 council meeting cites the budget committee’s recommendation, which was adopted in the Oct. 15, 2012 council resolution, that “no less than 10% of net proceeds of any sale will be allocated and distributed to the affordable housing trust fund …”

Affordable housing fund activity. Recommendations on the use of the monies in the city of Ann Arbor’s affordable housing trust fund come from the city’s housing and human services advisory board.

The dollar figure of $1,384,300 million reflects the $1.75 million in gross proceeds, less brokerage fees and seller’s costs, from the sale of a downtown city-owned parcel known as the old Y lot. The city paid $3.5 million for the property in 2003.

The council approved the sale of the property to Dennis Dahlmann for $5.25 million at its Nov. 18, 2013 meeting. The city has made interest-only payments on a $3.5 million loan for the last 10 years.

The city purchased the property in 2003, exercising a right of first refusal, in part to prevent its acquisition by the Ann Arbor Area Transportation Authority.

The Dec. 16 council decision reflects a departure from the council’s policy established on Oct. 15, 2012 – which would have first reimbursed the city and the Ann Arbor Downtown Development Authority for various other costs, including interest payments, and relocation of the residents of the YMCA building that previously stood on the site. In October 2005, two years after the city purchased the property, the mechanical systems in the building failed, and the building eventually was demolished. It was converted to a surface lot in the public parking system.

The DDA has calculated $1,493,959 in reimbursements that it thinks it could claim – for interest payments and cost of demolition, among other items. But the DDA board voted at its Dec. 4, 2013 to waive that claim. And the city has calculated, for example, that $365,651 that the city itself paid in interest could be reimbursed, as well as $488,646 for the relocation of residents of the former Y building.

It’s not clear if the DDA can waive all of its claim in light of the fact that the DDA used at least some TIF (tax increment finance) funds to pay for items like demolition and some of the interest payments on the loan. [.pdf of DDA records produced in response to a Freedom of Information Act request by The Chronicle] If that were analyzed as a distribution of TIF to the city of Ann Arbor, then under state statute the DDA would need to distribute a proportional amount to the other jurisdictions whose taxes are captured in the DDA district.

The history of the city’s policy on the proceeds of city-owned land and the connection to the city’s affordable housing trust fund goes back at least 20 years.

The specific connection between the affordable housing trust fund and the former Y lot is the 100 units of single-resident occupancy housing that previously were a part of the YMCA building on the site.

Various efforts have been made to replace those units over the years. [See, for example: "The 100 Units of Affordable Housing."] Recently, the Ann Arbor housing commission and its properties have started to receive more attention from the council as an integral part of the city’s approach to providing housing to the lowest income residents. The council approved a series of resolutions in the summer of 2013 that will allow the AAHC to convert many of its properties to project-based vouchers.

At the Dec. 16 meeting, several advocates of affordable housing spoke to the council during public commentary, urging councilmembers to allocate funds from the proceeds of the Y lot sale to support affordable housing.

For details about the council’s deliberations on this item, see The Chronicle’s live updates from the Dec. 16 meeting.

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

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

The DDA board resolution also calls on the city council to waive the city’s own reimbursement, so that the entire net proceeds of the sale could be transferred to the city’s affordable housing trust fund. The fund has been essentially depleted over the last several years. The DDA board’s resolution was amended slightly at the Dec. 4 meeting to include a specific amount to be waived ($1,439,959) and to highlight a request that the city council follow the DDA’s example.

The gross proceeds of the sale are defined by the $3.5 million paid by the city in 2003 for the property and a recent agreement to sell the property to hotelier Dennis Dahlmann for $5.25 million. That purchase agreement was approved by the city council at its Nov. 18, 2013 meeting. [.pdf of rider] [.pdf of sales agreement] The city originally purchased the property by exercising a right of first refusal, to prevent the acquisition of the site by the Ann Arbor Area Transportation Authority. The AAATA’s Blake Transit Center is located just north of the property, and the AAATA has a continued interest in using some portion of the property for staging buses, so that space on Fourth Avenue is not taken up with bus boarding areas.

The city of Ann Arbor has financed the $3.5 million under an arrangement with the Bank of Ann Arbor to make interest-only payments on that amount for the last decade – with the DDA shouldering roughly half of those interest payments. A balloon payment is due on Dec. 16, 2013. The DDA’s share of the interest payments has amounted to a total of $600,426 since 2004, according to a document provided at the board’s Dec. 4 meeting.

The DDA also incurred the costs of demolishing the former Y building and installing the equipment necessary to convert the lot for use as surface parking ($1,469,804). But the DDA has received a total of $1,043,277 in parking revenue from the lot since 2009, when it was converted. That’s balanced by parking operating expenses of $342,006. In sum, the DDA calculates that it might be able to claim reimbursement of $1,439,959. The DDA manages the public parking system under a contract with the city of Ann Arbor.

The former Y building offered 100 units of single resident occupancy low-income housing that the city council of a decade ago expressed a desire to see preserved in the downtown area, if not on that specific parcel. A year ago at the council’s Oct. 15, 2012 meeting, the council adopted a resolution that indicated the proceeds of the sale would:

“… first be utilized to repay the various funds that expended resources on the property, including but not limited to due diligence, closing of the site and relocation and support of its previous tenants, after which any remaining proceeds be allocated and distributed to the Affordable Housing Trust Fund …

Possibly relevant to the question of whether the DDA can simply waive any required repayment by the city to the DDA is the source of funds used by the DDA to make those payments. In recent years, the DDA has used parking funds to make the interest payments. To the extent that in earlier years, funds captured under the DDA’s tax increment finance (TIF) may have been used to make interest payments, it’s not clear if the DDA could simply allow the city to retain those funds as part of the proceeds of the Y lot sale. This issue was not addressed during the Dec. 4 board meeting.

This brief was filed from the DDA offices at 150 S. Fifth Ave., Suite 301. A more detailed report will follow: [link]

The amount of the transfer was keyed to the cost of a piece of city-owned property that the city sold recently to the Ann Arbor Transportation Authority. And the justification for the transfer was based on the council’s recent enactment of a formal policy on the use of the proceeds of city-owned land sales.

The $90,000 piece of land is a six-foot-wide strip on the former Y lot at Fifth and William, immediately to the south of the location for the AATA’s planned new Blake Transit Center in downtown Ann Arbor. The $90,000 price was based on an independent appraisal. The AATA board approved its side of that deal this spring at its April 26, 2012 meeting. The city council approved the land sale over a year ago, at its Sept. 19, 2011 meeting. The total parcel area was 792 square feet.

The land sale policy approved by the council on Oct. 15, 2012 had begun as a proposal from Sandi Smith (Ward 1) to allocate 85% of the net proceeds of city-owned land to the city’s affordable housing trust fund. The council originally considered the item at its Sept. 17, 2012 meeting but delayed action. The council eventually opted to adopt a policy that treated land sales on a case-by-case basis – except for the former Y lot at Fifth and William streets, of which the six-foot-wide strip was a part. The enacted policy called for net proceeds from that parcel to be placed in the affordable housing trust fund.

For additional background, see: “City Council to Focus on Land Sale Policy.”

Because the $90,000 piece of property had been a portion of the former Y lot, it was considered by the council in its Nov. 8 action as appropriate in effect to retroactively apply the policy on use of land sale proceeds – by transferring $90,000 to the affordable housing trust fund. The portion of the policy that requires the city to recover its costs associated with the property was not applied – as the city purchased the land for $3.5 million.

The resolution was sponsored by Sandi Smith (Ward 1), Marcia Higgins (Ward 4), and mayor John Hieftje – although Smith was not able to attend the Nov. 8 meeting.

The six-foot-wide strip of land, and its $90,000 price, has been highlighted in recent council deliberations for a different reason – as a funding source for a transportation connector study. The city of Ann Arbor had been asked to contribute $60,000 to an alternatives analysis study of the Plymouth/State corridor, from US-23 and Plymouth southward along Plymouth to State Street, extending south to I-94. The local match was needed for a $1.2 million federal grant that had been awarded to the AATA for the study.

During deliberations on the $60,000 connector study allocation at the Sept. 4, 2012 meeting, Stephen Kunselman (Ward 3) had objected to one of the “whereas” clauses in the resolution. The clause mentioned the availability of $90,000 in the general fund from the land sale, which was more than enough to cover the requested $60,000 local match. So the allocation was essentially pitched as a “return” to the AATA of a portion of the land sale price. Kunselman objected that once the $90,000 was in the general fund reserve, it was no longer earmarked as funds to be used for any particular purpose.

When the council eventually reconsidered the decision on Oct. 15, 2012 and wound up approving $30,000 for the study – because the Ann Arbor DDA had in the meantime agreed to contribute $30,000 – it was Higgins who raised the objection about the “whereas” clause. And the clause was amended out before the council’s approval.

The groundbreaking for the AATA’s new Blake Transit Center – which had occasioned the sale of the six-foot strip of land on the southwestern edge of the AATA’s property – is scheduled for Nov. 19. The AATA board gave final approval of a roughly $8 million budget for the transit center at its Oct. 18, 2012 meeting.

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

The resolution had been added by Anglin to the agenda of the council’s previous meeting on Sept. 17, 2012, but was postponed until the Oct. 1 meeting. Anglin’s resolution called for establishing a committee of 10 residents – two from each ward, to be selected by councilmembers from each ward – plus other city officials to address the issue of city-owned parcels in downtown Ann Arbor.

Anglin’s resolution was somewhat vague about how the committee was supposed to address the issue or in what timeframe, and was met with questions at the Sept. 17 meeting about the scope of the committee’s intended purview or its deliverables.

At the Sept. 17 meeting, Anglin’s resolution was one of two resolutions the city council had been asked to consider. The other one had been brought forward by Sandi Smith (Ward 1), who first outlined the idea to other councilmembers in an email written three weeks prior to their Sept. 17 meeting. It involved directing the proceeds from city-owned land sales to the city’s affordable housing trust fund. That resolution was postponed at the Sept. 17 meeting until Oct. 15.

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