City Apartments, a Village Green residential property under construction on Feb. 4, 2013. (View is at First & Washington looking east) The bottom two floors are a parking deck, which is on track to be turned over to the city and the DDA on March 15, 2013. It will expand the capacity of the public parking system by almost 100 spaces. (Photo by the writer.)

The surplus from FY 2014 would be used in the FY 2015 budget, which calls for $23.8 million in expenditures against $23.5 in revenues, leaving the DDA with about $5.2 million in total fund balance reserve at the end of FY 2015.

DDA revenues come from two main sources – tax increment finance (TIF) capture and Ann Arbor’s public parking system.

Besides operation and capital maintenance of the parking system, revenues to the public parking system are used by the DDA to support the getDowntown program’s go!pass subsidy. So one focus of the Jan. 25 DDA operations committee meeting was budgeting for that program. The go!pass is a bus pass that downtown employees obtain through their employers, who pay $10 annually for passes for each of their employees. In a presentation made to the operations committee, Michael Ford – CEO of the Ann Arbor Transportation Authority – requested a total of $623,662 to support the getDowntown program, including the go!pass subsidy. That compares with $553,488 granted by the DDA last year. For FY 2014, the DDA’s draft budget calls for a $600,000 allocation that could cover most of that request.

This year’s draft budget also calls for $250,000 in parking revenue to be spent on a possible arrangement with the city of Ann Arbor to pay for additional downtown police patrols. Based on the conversation at the operations committee meeting, it’s not a topic on which any recent detailed talks have taken place. But DDA executive director Susan Pollay indicated a strong interest in having those conversations with the city. If that didn’t lead to an agreement with the city, she said, then the DDA board was certainly not obligated to spend the money in that way.

Another $300,000 in the FY 2014 budget that could be used somewhat flexibly is in the TIF fund budget, labeled “capital construction.” It could be used to fund sidewalk improvements between William and Liberty along State Street to facilitate patio dining for restaurants along that strip – or streetscape improvements for William Street, or even alley improvements near the Bell Tower Hotel, Pollay told the committee.

The full DDA board will be asked to approve the FY 2014 and FY 215 budgets at its Feb. 6 meeting. The DDA’s fiscal year is in sync with the city of Ann Arbor’s fiscal year, which begins on July 1. The city council will settle the city’s FY 2014 budget by May 20 – the council’s second meeting in May. While the city uses a two-year planning cycle – which begins fresh this year – the council approves its budget just one year at a time. [.pdf of draft DDA budgets FY 2014-15] [.pdf of FY 2013 six-month financial statements] [.pdf of monthly parking reports]

Parking Fund Budgeting

The Ann Arbor DDA operates the public parking system under a contract with the city of Ann Arbor – an agreement that calls for the city to receive 17.5% of gross revenues to the system. For this year and the following two budget years, that 17% payment to the city is projected to translate to $3.14 million, $3.20 million and $3.24 million.

In the current year, total parking revenues are budgeted for $18.1 million. But according to the financial statements through December 2012, which is mid-way through the fiscal year, actual parking revenues through that period are $9.4 million, or about $300,000 more than the budgeted year-to-date number. Projected parking revenues for the next two fiscal years are $19.3 million and $19.6 million, respectively.

Parking fund revenues pay for the direct expense of contracting with Republic Parking for the day-to-day operations of the system (about $6.5 million), rental for some properties not owned by the city but used for public parking (about $0.5 million), as well as roughly half the DDA staff compensation and administration (about $370,000). The other major allocation from the parking fund is for maintenance of the parking structures. For FY 2014 there’s $4.4 million set aside for parking maintenance.

Parking Fund: Alternative Transportation

One focus of the Jan. 25 DDA operations committee meeting was budgeting for the getDowntown‘s go!pass program, which is also funded from parking revenues. Downtown employers can purchase a go!pass at a cost of $10 per employee – with the condition that the business must purchase a pass for all their employees. Beyond that, rides taken with the go!pass are free to the pass holder or their employer. The cost of the rides has been subsidized historically by the DDA, using revenues from the parking system. The getDowntown program is administratively a part of the AATA. Through the AATA’s fiscal year FY 2012, which concluded at the end of September 2012, here’s how go!pass ridership has trended:

go!pass total rides by year. The number of rides taken with go!passes has roughly doubled since 2004. This past year reflected a dip, which appears to be related to a reduced number of cards in circulation: 6,591 compared to 7,226. (Data from AATA; chart by The Chronicle.)

go!pass rides by month, year over year. The red trend line is the most recent year, 2012. The previous year is shown in black. (Data from AATA; chart by The Chronicle.)

While the total number of rides dipped slightly, the number of rides per card continued its upward trend. Since 2004, the number of rides per card has increased from about 60 to about 90. (Data from getDowntown program; chart by The Chronicle.)

In a presentation made to the operations committee on Jan. 25, AATA chief executive officer Michael Ford requested a total of $623,662 to support the getDowntown program, including the go!pass subsidy. That compares with $553,488 granted by the DDA last year. In the DDA’s budget summary for FY 2014, the getDowntown subsidy falls under the line item for “alternative transportation” – for which $615,000 is allocated this year.

The detailed breakout for the parking fund, which the DDA uses to support getDowntown – indicates that $15,000 of the $615,000 is allocated for the “connector study.” That’s a study meant to determine a locally-preferred alternative mode for a high-capacity transit system along the corridor that arcs from US-23 and Plymouth southward along Plymouth to State Street and farther south to I-94. In the fall of 2012, the DDA approved that $15,000 as part of a total $30,000 commitment over two years. Other funding partners for the $1.5 million project – which is supported by a $1.2 million federal grant – include the city of Ann Arbor, the AATA and the University of Michigan.

Compared to the DDA’s $600,000 budgeted amount, Ford’s request is $23,662 more. As one way to cover that difference, DDA executive director Susan Pollay pointed committee members to $300,000 of discretionary grant funding from the parking fund that’s in the draft FY 2014 budget. Of that amount, $50,000 could be used to cover the gap between the budgeted amount and Ford’s request.

By way of additional background, in the past the AATA has essentially agreed to absorb the cost of go!pass rides that might be taken in excess of the funded amount. So, at the AATA board’s Aug 24, 2011 meeting, a decision was made to accommodate the DDA’s financial circumstances and to set the amount charged for go!passes in 2013 at the amount the DDA had already allocated – $475,571.

At the Jan. 25 DDA operations committee meeting, getDowntown director Nancy Shore put the cost-per-ride figure used to calculate the request at about $0.90 per ride. In negotiating the cost-per-ride for similar arrangements – like the University of Michigan MRide program – AATA uses as a benchmark the amount that bus riders would pay if they paid the full fare under a regular 30-day pass. The 30-day pass is the cheapest full-fare option. Full adult cash fare on boarding would be $1.50.

At the AATA board’s most recent meeting, on Jan. 17, 2013, the relationship between rides taken and fares collected was highlighted. The treasurer’s report included a note that despite greater ridership numbers, the fares collected were not keeping pace. One theory floated was that this disparity could be attributed to go!pass ridership in excess of the projected funding need.

The request from AATA this year is based on the projected ridership. In the chart below, presented by Ford at the Jan. 25 meeting, the decreased request in the first line, for getDowntown program operations, is explained by the fact that this year the program will not incur the cost of an evaluation survey. The projections based on ridership originating east of US-23 are made possible by the swipe-able go!pass cards and fare-box technology, which allow the AATA to analyze where riders are boarding the bus.

YEAR                 2013       2014
getDowntown       $52,488    $35,488   
go!pass          $475,000   $479,000   
NightRide 
go!pass discount   $5,000    $18,233   
ExpressRide 
go!pass Discount   $7,000    $18,000   
Route 4 
East of US-23     $14,000    $56,363   
Route 5 
East of US-23          $0    $16,578   
====================================
Total            $553,488   $623,662

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The $14,000 provided last year to help subsidize improved service to and from Ypsilanti on Route #4 was actually authorized by the DDA board on Dec. 1, 2010, as a “challenge grant” – which was made hoping to prod other entities to join in supporting the increased service.

And committee members on Jan. 25 wanted to know what kind of requests were being made by the AATA municipalities and entities other than the DDA. Ford responded by indicating that other communities that are a part of the “urban core” will also be asked to help fund the Route 4 improvements as part of conversations that have continued since the abandonment of the Act 196 countywide authority, which was newly incorporated in the fall of 2012.

By way of background, part of the Ann Arbor city council resolution on Nov. 8, 2012 – which withdrew the city from the new transit authority the council – also gave direction to the AATA to continue conversations with immediately neighboring communities about options for improving local transit. And the AATA has engaged in talks with communities about a smaller-than-countywide transit authority with possible members to include the cities of Ann Arbor, Ypsilanti, and Saline, as well as the townships of Pittsfield and Ypsilanti. Involvement with the townships of Superior and Ann Arbor is also a possibility.

In addition to expressing an interest that the Ann Arbor DDA not be the only entity providing additional support, committee members indicated they’d also like to see even better service provided on Route #4 – in the form of an “express” route that had no stops between downtown Ypsilanti and Ann Arbor. Ford seemed receptive to the idea in concept, and suggested it might be necessary to think about using I-94 to provide that service. DDA board member Roger Hewitt indicated that he felt one obstacle in the way of Ypsilanti becoming an even more vibrant community is the amount of time it takes to ride the bus between Ypsilanti and Ann Arbor.

Some committee members also questioned the structure of the “all-in” go!pass program requirement – which means an employer must purchase passes for all employees of the company at a cost of $10, even for those who might not ever use the card. It’s part of the reason that the cost per card to employers is relatively low – and until two years ago was even lower ($5).

Part of getDowntown director Nancy Shore’s presentation to the committee included an anecdote about a lost wallet and the holder of a go!pass saying the pass was the most valuable item in their wallet. Hewitt responded to that part of the Shore’s presentation by observing that even though the card holder contended that the go!pass was valuable, that person was not being asked to contribute to its cost – because it’s provided through the employer. Shore’s presentation indicated that many downtown employers see the go!pass as one of the only benefits they’re able to offer to their employees besides salary.

Parking Fund: Beat Cops

After subtracting $50,000 for possible alternative transportation, the remaining $250,000 of discretionary funding in the parking fund budget could be used to pay for downtown beat patrols by the Ann Arbor police department. Based on the conversation at the operations committee meeting on Jan. 25, it’s not a topic on which any recent detailed talks have taken place – but DDA executive director Susan Pollay indicated a strong interest in having those conversations with the city. If that didn’t lead to an agreement with the city, she said, then the board was certainly not obligated to spend the money in that way.

Conversation among committee members was mixed on the idea. Bob Guenzel wondered how much downtown policing $250,000 would buy. [Guenzel was Washtenaw County administrator during the time that some townships litigated over the amount they were being charged by the county for sheriff's road patrols.] John Mouat wondered if the $250,000 might not be spent more wisely on “ambassadors” for the downtown. Of the committee members, Hewitt seemed more enthusiastic about the idea, pointing to ongoing issues in the South University area, where he owns a business.

Hewitt expressed skepticism, at least in the near term, that the relatively new Main Street Business Improvement Zone could eventually be expanded beyond its current geographic boundaries – along a few blocks of Main Street – to include a significant part of the rest of downtown Ann Arbor. In any case,  the Main Street BIZ was, he said, more focused on the “clean” part of the slogan “clean and safe.” So, while the self-assessment used to finance the BIZ might support snow removal and handbill removal, it would not be capable financially of hiring personnel to address the “safe” part of the slogan.

At the committee meeting on Jan. 25, Pollay alluded to the idea that the DDA had harbored an expectation that downtown beat patrols would continue to be provided – as a result of the DDA’s willingness to support the city’s municipal center project. By way of background, the DDA agreed to make an $8 million grant to the city – in the form of roughly $0.5 million in annual installments – to help pay for the city’s police/courts project, known called the Justice Center. That grant to the city comes out of the roughly $4 million in TIF capture that the DDA receives annually. The DDA board’s decision to allocate that grant came at the DDA board’s May 8, 2008 meeting.

In this AAPD officer activity report, 22 minutes were logged on downtown foot patrol.

However, the downtown beat patrols, which some officers chose to do on bicycle, were discontinued, as the total sworn officers in the AAPD decreased through the late 2000s. The strategy used by then-police chief Barnett Jones was to encourage officers to spend their “out of car time” in the downtown area. [For some coverage on that issue from the 2010 budget season, see: "Budget Round 6: Bridges, Safety Services."]

A new digital system for logging officer activity reports rolled out at the start of 2013 and could allow for a realistic assessment of the current level of downtown police coverage.

Parking Fund: Revenue Trends

Parking revenue totals are reported monthly to the DDA operations committee. The most recent month for which data was provided was December 2012. Those numbers show an increase in revenues of about 7.2% compared with December 2011, and a drop in the number of hourly patrons by 8.5%. Those numbers come in the context of a 13% increase in the number of spaces in the system – from 6,870 to 7,805. Mitigating factors cited by Republic Parking manager Art Lowe at the Jan. 25 committee meeting included the fact that Midnight Madness fell this year in November, not December, and that in 2011 Christmas and New Year’s fell on the weekend.

Lowe also indicated that some of the decrease in the number of hourly patrons is attributable to the conversion of parking patrons from hourly parking patrons to monthly permit parkers. Above a certain threshold, for the same amount of parking activity, a monthly permit holder would be paying less for their parking. Based on numbers provided by Lowe at the meeting, and subsequent clarification with DDA staff, it appears that around 3,600 monthly permits were in play for December 2012, compared with around 3,100 for the previous year.

Lowe also said that the Fourth and William structure was likely seeing some incremental erosion of its previous patrons, as a result of the new nearby Library Lane underground garage.

Another highlight evident in the charts is the fact that the Library Lane underground structure, completed in the summer of 2012, has now reached the same revenue-per-space numbers as the on-street metered parking spaces.

And in a month and a half, capacity of the public parking system will be getting an additional 95 spaces. At the operations committee meeting, executive director Susan Pollay told the board that Village Green was still on track to hand over the parking deck component of the City Apartments project to the city and DDA on March 15, 2013. The building included a 244-space parking deck on those first two floors, 95 of which are to be available for public parking. The rest of the spaces will be used by residents of the 146-unit project, when the construction is completed.

That announcement of a March 15 handover was met with some skepticism on the operations committee – because the structure will still need a certificate of occupancy from the city before the transfer can take place. However, it was generally understood that the intent was for the parking deck to be open before construction of the entire project was completed. The building is on track for fall 2013 move-in, based on remarks from Pollay to committee members.

Ann Arbor Public Parking System: Total Revenue

Ann Arbor Public Parking System: Patrons

Ann Arbor Public Parking System: Structures

Ann Arbor Public Parking System: Surface Lots

Ann Arbor Public Parking System: Whole System

TIF Fund Budgeting

While the DDA’s budget is dominated by its administration of the parking system, that’s not a function assigned to the DDA by state statute. But it’s a function the DDA has performed for the city since the early 1990s.

The part of the DDA’s revenue budget that’s enabled by state statute comes from tax increment financing (TIF). Under a TIF arrangement, an entity “captures” a portion of the property taxes in a specific geographic area that would otherwise be collected by taxing authorities in the district. In the case of the Ann Arbor DDA, taxes captured include those of the Ann Arbor District Library, Washtenaw County, Washtenaw Community College, and the city of Ann Arbor. The tax capture for the Ann Arbor DDA is only on the initial increment in valuation – the difference between the value of property when the district was established, and the value resulting from improvements made to the property. In other words, the Ann Arbor DDA’s TIF doesn’t capture increases due to inflation.

For each of the next two years, the DDA is projecting around $4 million of revenue from its TIF capture. Big-ticket expenditures from the TIF fund include $3.4 million for bond payments and interest, as well as $508,608 as an annual contribution toward the city’s police/courts building.

The TIF fund budget also includes $440,631 for approximately half of the salaries, fringe benefits and administrative costs of the DDA. [The DDA splits these costs roughly evenly between the TIF fund and the parking fund. The DDA has four employees.] For the next year, the DDA is planning to spend about $1.3 million more from the TIF fund than the revenues it will receive, drawing down the TIF fund balance by that amount. That would leave about $800,000 in the TIF fund balance.

Included in the FY 2014 TIF budget is $300,000 that could be used somewhat flexibly – which is labeled “capital construction.” At the Jan. 25 operations committee meeting, DDA executive director Susan Pollay told members that the money could be used to fund sidewalk improvements between William and Liberty along State Street to facilitate patio dining for restaurants along that strip – or streetscape improvements for William Street, or even alley improvements near the Bell Tower Hotel.

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The location of the 624 Church St. project is indicated with a red pushpin. Locations of structures in Ann Arbor’s public parking system are indicated with blue Ps.

Most recently, at the Dec. 19 meeting of the DDA’s operations committee, the discussion focused on location: For which of the six public parking structures would monthly permits be sold? The developer of the 624 Church St. project would prefer that the project be allowed to buy permits in the Forest parking structure.

The Forest facility, a joint venture of the DDA and the University of Michigan, is the structure closest to the proposed residential development. According to the developer’s Nov. 28 submittal to the city, the 13-story project would include more than 80,000 square feet of new floor area with the following configuration of apartments: 11 one-bedroom; 21 two-bedroom; 33 three-bedroom; and 11 four-bedroom units. That’s a total of 76 apartments, with 196 bedrooms.

The developer, Opus Development Corp., has already won approval from the DDA’s board to satisfy the project’s parking requirement without providing onsite spaces – by instead using the contribution in lieu (CIL) program. The CIL provides an option to purchase monthly permits, but the cost is at a rate 20% higher than standard pricing.

Discussion by the DDA operations committee on Dec. 19 centered around the issue of fairness: Would allowing the purchase of permits in the Forest structure give the developer of the 624 Church St. project an unfair competitive advantage in the South University area rental market? Raising the fairness issue was DDA board member Roger Hewitt, who owns Revive + Replenish, which is a tenant in the ground floor of the Zaragon Place on East University. Zaragon is a nine-story apartment building with almost 250 bedrooms, catering to the student rental market.

Other board members did not perceive the issue to be problematic, from the perspective of fairness to already-existing projects. And Susan Pollay, executive director of the DDA, pointed out that the decision to allow a project to purchase monthly parking permits is a tool that’s available to the DDA to help make a private development possible that otherwise would not be. In the case of 624 Church St., building parking spaces on that site isn’t feasible. Hewitt was concerned that the strategy – if the DDA allowed permits to be purchased at a structure very near to projects – might result in an incentive for developers in the future not to build any onsite parking.

The committee’s discussion was inconclusive, but committee members indicated they wanted to develop a formal policy on which parking structures would be chosen for monthly permits sold under the CIL program. The 624 Church St. project is due to come before the city planning commission on Jan. 15, so the developer would prefer to have the issue settled by then. But given the DDA’s desire first to establish a policy that would guide this and future decisions, it’s unlikely it will be finalized as early as mid-January.

Based on the committee’s discussion, capacity in the parking system does not appear currently to be a limiting factor on selling CIL permits. The committee also reviewed the latest monthly parking data, which shows continued increased usage of the new underground garage, Library Lane.

Revenues per space in the Library Lane structure are now beginning to approach those of on-street parking spaces, but are still the lowest of any facility in the system. That’s due in part to a discounted rate offered to induce holders of permits in other structures to move to Library Lane.

Also of interest at the operations committee meeting was a draft policy for holding events on top of the Library Lane structure, including the closure of the mid-block cut-through, Library Lane itself.

624 Church: Additional Background on CIL

The D1 zoning for the 624 Church St. project doesn’t actually include any parking requirements – as long as the total floor area does not exceed 400% FAR (floor area ratio). But as proposed, the project comes in at 665% FAR. And to get the extra 265% FAR as a by-right premium, the city’s requirement of 1 parking space for each 1,000 square feet of additional floor area works out to 40 parking spaces.

The DDA board had already voted, on Oct. 3, 2012, to authorize the parking spaces – somewhere in the system. It’s the first time the policy has been applied. It’s not the same mechanism that was used to provide Google an incentive to locate some of its offices in downtown Ann Arbor. Parking spaces were offered to Google on a subsidized basis. What’s at issue for 624 Church St. is the ability to purchase monthly permits by paying a premium rate.

A mechanism for new developments in downtown Ann Arbor to meet minimum parking requirements – without providing onsite spaces – has been part of the city’s downtown planning and development policy for a little more than three years. The city council adopted new zoning for the downtown on Nov. 18, 2009.

And the Ann Arbor DDA, which operates the public parking system under contract with the city, had approved its recommendation of a specific CIL policy more than two years ago, at its July 7, 2010 board meeting.

The city council then formally adopted the DDA’s recommended policy, at its April 2, 2012 meeting, with the policy’s two options: (1) purchase monthly parking permits in the public parking system for an extra 20% of the current rate for such permits, with a commitment of 15 years; or (2) make a lump sum payment of $55,000 per space. It’s option (1) that the 624 Church St. project is exercising.

Current standard pricing of permits at Forest is $145 a month. At the CIL rate, the cost would be $174 a month.

624 Church: Committee Discussion on Location

Roger Hewitt raised two issues of concern to him – fairness and the unintended consequence of giving an incentive to developers not to provide onsite parking spaces. He also felt there could potentially be a legal liability for the DDA.

On the fairness question, Susan Pollay – executive director of the DDA – indicated that the kind of judgments involved were already being made in the context of the DDA’s regular monthly parking permits program. She wondered what the legal liability could be. Hewitt responded by saying that if a developer spends millions of extra dollars to add parking spaces to a project, and a different developer in the future simply asks the DDA to purchase monthly permits, the project that’s been granted the right to satisfy parking requirements by purchasing permits could become a more profitable project.

Hewitt feared the DDA would be incentivizing developers not to build onsite parking spaces. So he floated the idea that if N spaces were required, then only some percentage of N would be provided in a structure located close to the project. For example, he said, if the project needs 40 spaces, then perhaps 10% – or four spaces – would be provided in a location close to the project, with the rest provided elsewhere in the system.

Pollay again questioned whether there was any actual legal liability. DDA board member Joan Lowenstein, an attorney, indicated she didn’t think there was a legal problem – and the matter of fairness was one that’s to be addressed through an administrative process.

Hewitt reiterated his position – he was worried that in the future, because of the availability of the monthly permit options, “nobody builds parking.” DDA board member John Splitt ventured that it’s not completely clear whether a project that satisfies its parking requirement through the purchase of monthly permits would be more profitable than one that builds onsite spaces. He said the DDA doesn’t know what the return on the investment for a private developer is – one who charges residents for the use of an onsite parking space – to build those spaces. Hewitt ventured that the return is less than building “student dorm space.”

Pollay noted that the DDA was established to encourage new development, to increase TIF (tax increment financing), and that the contribution in lieu (CIL) of parking is specifically designed to encourage residential development. She stated that the only way the 624 Church St. project could be built – due to constraints of the site configuration – is if the CIL program were available.

DDA board member Leah Gunn noted that the only open question is the location of the monthly permits – because the board had already voted to allow 624 Church St. to purchase monthly permits somewhere in the system. She wondered if it were possible to sell some of the permits in the Forest structure and some elsewhere.

The conversation circled back to the question of fairness. Pollay asked if Hewitt was worried about fairness with respect to future projects or current projects? Hewitt seemed to indicate that fairness would dictate that existing projects should also have the option to obtain permits under the CIL program. Pollay stated that projects like Landmark and Zaragon Place are already built – so she didn’t see it as a fairness problem.

Landmark and Zaragon have onsite parking spaces, and those developments are renting the spaces to their tenants, Pollay noted. So Pollay said it seemed to her like those projects built parking spaces onsite because they chose to. Lowenstein ventured that it’s a competitive market, so the availability of onsite parking could be an advantage.

On the issue of fairness, Gunn asked if it was fair for Google’s parking permits to be subsidized initially, but not the parking spaces for Barracuda Networks. She allowed that employees of Barracuda are still getting a deal, because of the discount that the DDA has applied (for anyone, not just for Barracuda) to the cost of permits in the new underground Library Lane structure.

Gunn came back to her point that the DDA had already determined that the public parking system had adequate capacity to sell 40 permits to the 624 Church St. project. The only question is where, she said. Responding to concerns voiced again by Hewitt, Splitt suggested that the question of location could require “a bit more of a deeper dive.” Splitt didn’t want the choice of location for the permits to translate into a disincentive to construct onsite parking spaces.

Pollay suggested putting off a decision and asking city planning staff for their input. She suggested forming a subcommittee. Gunn wanted clarification: Would the subcommittee focus just on the 40 permits for 624 Church St.? Hewitt stated that the subcommittee should work on a general policy on location, saying, “We need a policy to defend in public.” Splitt wondered if it might not be possible to approve the 40 spaces for 624 Church St. in a particular location without the general policy. Pollay suggested that it might be worth hearing from the DDA’s legal counsel.

Local attorney Scott Munzel, who represents the developer, attended the operations committee meeting. He told committee members that it was an interesting conversation. He felt that developers prefer to build parking spaces on site, if they can, and suspected they make money on those spaces. He felt that allowing the purchase of monthly permits in a nearby structure would not be a disincentive to build spaces on site. He pointed out that the CIL program requires the payment of a premium – 20% more than the prevailing standard cost. That 20% was not huge, he allowed, but it’s real.

Munzel suggested an approach where the DDA could agree to sell 40 permits now in the Forest structure, but reserve the right “to boot them out” to a different structure in the future. That might be a way to make people feel more comfortable, he ventured.

A question from DDA board member Keith Orr drew out the fact that the parking permit contract under the CIL program was for 15 years. Pollay indicated that the idea was that in 15 years, it was hoped that the transit system of the future would be so robust that parking requirements for new developments would be zero.

Gunn then asked Joe Morehouse, deputy director of the DDA, where he’d choose to sell the permits. Economically, Morehouse said, it would be better to sell the permits for the Forest structure – compared to the Maynard and Liberty Square structures. The $29 added to the $145 for a standard monthly permit at Forest would yield more in a year than hourly parking typically does at Forest, he said. But the location where the permits would benefit the system most would be at Fourth and William, he said.

By way of additional background, there are currently 101 monthly permits for the Forest structure assigned by the DDA. But the University of Michigan has access to one-third of the 854 spaces there. UM affiliates with an appropriate parking pass can enter the structure until the one-third limit is reached.

Munzel noted that the city planning commission would have the 624 Church St. project on its agenda on Jan. 15, 2013. The parking requirement, met through the CIL program, would be part of the development agreement, which will be part of the site plan approval process, he noted. Munzel felt that Opus Development Corp. wouldn’t necessarily “have heartburn” if the location was not settled by the Jan. 15 planning commission meeting. Munzel felt it wouldn’t be a problem to say, “The DDA is still considering it.” It would, however, be easier to say, “This is what’s been decided,” Munzel said. It would need to be decided by the time a final approval is given by the city council, he said.

Varsity: Also Asking for CIL

At the Dec. 19 meeting of the DDA operations committee, it was noted that the Varsity development is also looking for four monthly permits under the CIL program. The project, located on East Washington Street, is a 13-story, 173-unit, 178,380-square-foot apartment building for approximately 418 persons with 77 parking spaces. Construction on the project is well underway.

Roger Hewitt’s reaction to the news that the Varsity was requesting four CIL spaces was: “How’d they get almost done and then find out they needed spaces?” Amber Miller, the DDA’s planning specialist, explained that the Varsity thought it had a viable agreement with Zipcar to contract for spaces, to satisfy part of the parking requirement.

In response to an emailed query, Ann Arbor city planning manager Wendy Rampson essentially confirmed that understanding, writing that the Varsity had proposed to locate two car share spaces (Zipcar) in a surface parking lot on the property it owns west of the Varsity. One car share space is equal to four required parking spaces.

That would add eight spaces to the total provided by the Varsity, even though the Varsity only needs to provide an additional six spaces. Rampson believed that because the Varsity was not able to reach an agreement with Zipcar, the developer is now requesting four monthly permits from the DDA under the CIL program. The four permits, with the two spaces on the west parcel, add up to the six additional spaces that the Varsity needs to fulfill its additional parking requirement.

Monthly Parking Data

At its Dec. 19 meeting, the DDA operations committee received the regular report of parking revenues broken down by facility. At the Dec. 5, 2012 meeting of the full board, DDA board member Roger Hewitt indicated that the format of monthly parking reports would be changed to include more detailed data. That change has not yet been implemented. Currently, the DDA uses revenue and total numbers of hourly patrons as an imperfect proxy to gauge use of the system.

Ann Arbor public parking system: Hourly patrons in November 2012 (green trend line) showed a slight increase over November 2011, after showing a four-year low in September and mid-range numbers in October, compared to the last three years. Compared to last year, the number of parking spaces in the system has increased from 6,995 to 7,806, mostly due to the construction of the Library Lane structure, with its 700+ spaces.

Ann Arbor public parking system: Revenue continues to show higher levels than last year in the same month – due at least in part to higher rates, hourly billing instead of half-hourly, and around 800 additional spaces in the system compared to last year. Revenues from October to November this year showed a slight downward trend, as they have in each of the last three years.

Ann Arbor public parking system: Revenue per space in structures. The Forest structure (yellow trend line) is historically somewhat volatile, as it’s subject to the rhythms of the University of Michigan academic schedule. That’s the structure where the 624 Church St. project would like to purchase 40 monthly parking permits, instead of building the spaces on site. Library Lane (black trend line) showed continued increases in usage, with revenues per space approaching those of the on-street parking spaces (gray trend line).

Ann Arbor public parking system: Revenues per space in surface lots. Revenues at the old Y lot at Fifth and William (purple trend line) reflect the onset of Library Lane construction, which removed the surface parking there, and later, the opening of the new Library Lane parking structure.

Ann Arbor public parking system: Revenues per space. Systemwide (heavy black trend line) the system showed a slight decline from October to November in revenues per space, as it has in past years.

Events on Top of Library Lane

At its Dec. 19 meeting, the operations committee was also provided with a draft of ideas for a policy on special events at the Library Lane mid-block cut-through and the top of the Library Lane parking garage.

The preamble to the draft includes the expectation that the site would eventually include a building with public open space:

The structural component of the underground Library Lane structure was designed to anticipate the construction of a future building and a future public open space area. In the meanwhile, until such time as these elements are designed and constructed, the DDA is supportive of community groups using the Library Lane surface parking lot and the adjoining Library Lane for events, public gatherings and meetings.

In the draft, the main bureaucratic requirement is approval by the city of Ann Arbor for a special events permit, which currently costs $34. There would also be an insurance requirement and the need to agree in advance to pay for any damages. Event organizers would not be allowed to drive stakes into the surface of the site. Trash is required to be removed from the site after an event. No water is available, and the use of power generators would not be allowed.

In some of the smattering of conversation on the issue, DDA board member Keith Orr ventured that he thought it’d be interesting to see a Bottom of the Park-type event, hosted on the lowest level of the underground garage – a play on the name of the Ann Arbor Summer Festival‘s “Top of the Park.”

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