The houses are on the site of the former Near North affordable housing project. That project, on which the nonprofit Avalon Housing had partnered, ultimately did not go forward. The city must complete the demolition by March 15, 2013.

The vote on the funding came at the council’s Feb. 19, 2013 meeting. The additional $96,000 can only be used for the demolition of structures at 700-724 North Main.

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]

A change to the FEMA flood maps is highlighted in Appel’s letter as a crucial factor in the inability of the project to move forward. The new maps, adopted in 2012, show an expanded floodway, which cuts across the corner of the parcel. That mean that federal funds – part of the project’s financing – could not be used. [1992 FEMA floodway map] [2012 FEMA floodway map]

At the Ann Arbor city council’s Aug. 9, 2012 meeting, city staff indicated that seven existing houses on the proposed building site will be demolished. A fund had been established previously to pay the upfront costs for demolition of nuisance properties, and on Aug. 9 the council authorized contracts with a set of demolition companies to handle such work. Also at the Aug. 9 meeting, community services area administrator Sumedh Bahl said that in 45-60 days from that meeting, the houses would be down – so as soon as Sept. 23.

Appel had addressed the council on Aug. 9 and had already pointed out the FEMA floodmap issue as a major challenge.

The project’s demise will have an (positive) impact on the finances of the Ann Arbor Downtown Development Authority, which had pledged $500,000 to support the project when completed. Of that amount, $100,000 was contingent on the project meeting LEED certification. The DDA board had extended the grant about a year ago at its Sept. 7, 2011 meeting.

It’s now not clear what the future of the site will be. However, Appel’s letter indicates the development team “… will continue to work with local and state government and other partners to explore alternative development options for the site.” The property is owned by Near North Limited Dividend Housing. Avalon Housing had partnered with Three Oaks Group on the project.

Russ Collins (left) shakes hands with former board member Gary Boren, who was recognized for his service at the DDA's Sept. 7, 2011 board meeting. (Photos by the writer.)

The Near North decision came over the objection of three board members, who expressed concern over unanswered questions about the project’s timeline. Avalon had also requested that the intent of the resolution be expressed in the form of a contractual agreement and that the period of the grant be two and a half years, instead of the maximum two years normally attached to DDA grants. The additional time is needed in order to cover a sufficient period to achieve LEED certification.

Representatives of the construction trades, who objected to the selection of the Grand Rapids-based Rockford Construction as the general contractor for the Near North project, as well as a resident spoke against the DDA’s grant award during the time allowed for public participation.

The three votes against the grant renewal came from Newcombe Clark, Roger Hewitt and Russ Collins. With the absence of board members Keith Orr and Bob Guenzel, the 12-member board still achieved the minimum seven votes it needed for approval of the grant.

Despite his absence from Wednesday’s meeting, Guenzel was voted as the new chair of the DDA board, filling a vacancy in that position left when the recently elected chair, Gary Boren, was not nominated for reappointment to the board when his term expired on July 31. Boren was on hand to accept a resolution of appreciation for his service on the board.

In connection to the officer election timing issue, Clark asked for a review of the board’s bylaws by the board’s executive committee. Clark has raised the issue during the July officer elections for the last two years. Because the mayor has been reticent about his intended appointments, DDA board members have elected their officers for the coming year without knowing if all board members with expiring terms will be reappointed. Clark asked that the bylaws possibly be changed so that board officers are elected after appointments are made, so that it’s clear who will be serving on the board.

In other business, the board unanimously passed a resolution of support for the RiverUp! program amid some discussion of the appropriateness of the resolution – in light of the fact that the Huron River does not flow through the DDA tax district.

The board also passed a resolution encouraging the Washtenaw County board of commissioners to enact an economic development tax on county residents. About half of the tax proceeds would go to Ann Arbor SPARK. The resolution came at the request of DDA board member Leah Gunn, who also serves on the Washtenaw County board. The Ann Arbor city council had previously passed a resolution encouraging the county board to enact the tax. The county board gave initial approval to the tax later that evening.

As part of the reports from various board committees, Roger Hewitt stressed that the parking rates and hours of enforcement discussed at the previous week’s operations committee meeting were merely the start of the discussion. The DDA is currently discussing what kind of proposal it will present to the city council at a November joint work session on parking. Under its new contract with the city to manage the public parking system, the DDA’s authority to set rates and hours of enforcement comes with specific requirements on public input.

The city council also has directed the DDA to explore alternate uses for some of the city-owned surface parking lots in the downtown. Board members got an update on the status of the DDA’s effort to plan how to implement that directive. 

Near North Housing Grant

The board was asked to consider renewal of a grant to Avalon Housing that board members had originally approved in early 2010 for the Near North affordable housing project on North Main Street.

The grant is for $400,000, with another $100,000 available if the project achieves certification under the Leadership in Energy and Environmental Design (LEED) – a green building certification system. The grant would be paid when the project receives a certificate of occupancy. Avalon must also have an agreement in place with the city/county office of community development to ensure that income eligibility requirements are met for all residents.

A vacant house on North Main Street on the site of the planned Near North housing project.

The income eligibility requirements for the 39 units in Near North are based on affordability as defined for two categories of apartments. For 25 apartments, rents must be affordable to households with incomes at less than 50% of area median income (AMI). The remaining 14 apartments are for supportive housing and will have Section 8 rent subsidies.

The Near North project is outside the DDA tax district boundary, but is within the quarter-mile radius established by DDA board policy for such housing fund expenditures.

The planned unit development (PUD) for the Near North project was given approval by the Ann Arbor city council on Sept. 21, 2009.

Near North Grant: Public Commentary

Michael Appel, Avalon’s associate director, led off public participation time by describing the request for an extension of a previous grant the board had authorized to Avalon for its Near North affordable housing project. He sketched out the basics of the project: There would be 39 units on North Main Street, the main entryway to downtown. The project will meet the city’s housing goals, he said.

Appel ticked through some of the timeline points for the project. He noted that Avalon was awarded the DDA funds early in 2010.

By way of background, it was at the Jan. 6, 2010 meeting that the DDA board took that vote. By board policy, grants automatically expire at the end of the fiscal year following the year they are awarded. That board policy was established by a vote of the board at its March 4, 2009 meeting.

While the DDA grant period has come to be thought of as a two-year period, two years is actually a maximum in calendar terms. That maximum could occur if a grant were awarded in early July, just after the start of the DDA’s fiscal year – the grant would be good through the end of the fiscal year, ending on June 30 two years later. But if a grant is awarded in early June, the end of the next fiscal year would be only 13 months away.

In a followup email to The Chronicle, Appel clarified some of the dates, which he’d inadvertently misstated in addressing the board. The accurate timeframe for Avalon’s application for tax credits was spring 2010. The tax credits were awarded in the summer of 2010. Appel went on to explain that a key piece of funding – brownfield tax credits from the state of Michigan – were eliminated by the legislature during tax reform legislation after the 2010 elections. By the summer of 2011 new legislation had been passed, which preserved the brownfield funding source.

In addressing the board, Appel stressed that the general contractor Avalon had selected [Rockford Construction] had worked hard to solicit a wide range of bids for subcontractors. Around 1,500 solicitations had been sent out, he said.

Appel concluded with two specific requests of the DDA. He noted that the DDA doesn’t typically sign grant contracts, but rather works off of resolutions. Avalon was requesting that the resolution before the DDA staff include authorization of the DDA staff to draw up a formal contract. The four-minute time limit on public speaking time expired before Appel could get to his second request: to extend the grant period beyond the usual timeframe, which would have ended the grant period on June 30, 2013.

The rationale for the extension was based on the need to have the building in operation for some period of time in order to gather sufficient data to achieve LEED certification. The DDA’s grant makes $100,000 contingent on achievement of LEED certification and the other $400,000 contingent on a certificate of occupancy.

Tom Yax spoke on behalf of U.A. (United Association) Local 190, a union of plumbers, pipefitters, service technicians and gas distribution workers. He told the DDA board the local union basically supports the awarding of the grant.

However, Yax described his union’s opposition to the award of the general construction contract to Rockford Construction, because of Rockford’s location in Grand Rapids and concern that, as general contractor, Rockford would award subcontracts to non-local workers. When you give work to outside contractors, Yax said, they make money, then leave the community, and they don’t do any charity work in the community. Yax described a range of community efforts by the union. He encouraged the use of local businesses and contractors. Every dollar spent locally passes through the economy six times, he said.

So Yax explained that the union was against awarding the grant unless assurance could be given that there would be local contractors. Why spend money on contractors who leave? he asked. Near North is a prevailing wage job, so there’s no reason not to hire local contractors with local workers, he said.

During the time for public participation at the end of the meeting, Margaret Schankler introduced herself as a resident who lived behind the Near North property. She called it unfortunate that the board had extended its usual grant period to December 2013, but that they didn’t have four minutes for additional public participation before the vote.

By way of background on public commentary, the DDA board entertains public participation at the start of its meetings by allowing up to four people to speak – it’s possible to sign up in advance. If fewer than four people sign up, people from the audience who have not signed up are invited to address the board. In no case are more than four people allowed to address the board at the start of the meeting.

Later, at the conclusion of the meeting, an unlimited number of people can address the board. The time limit for all speakers is four minutes. Public bodies like the DDA board are required under the state’s Open Meetings Act to allow any member of the public to address them during their meetings.

Schankler told the board that she’d heard the phrase “closing in a few weeks” more times than she could count. She commended board member Newcombe Clark for asking questions. She noted that the neighborhood had worked with developers and negotiated something they thought the whole neighborhood could live with. That had come after the neighborhood had urged Avalon to build a much smaller project – but they’d been told it needed to be that large to make the numbers work. She criticized the fact that only 14 of the 39 units in Near North are for supportive housing.

She said that the still-unbuilt units of Near North are being counted as replacements for the 15 units that Avalon is eliminating in connection with its project at 1500 Pauline. Considering the 1500 Pauline project and Near North, the two projects together result in no net gain for supportive housing in Ann Arbor, she said.

Schankler also contended that the existing houses (now vacant for two years) previously rented for rates that were half what will be charged for the new units. She also pointed to the high cost of construction for the new units – $378 per square foot. She told the board that’s twice as much as it would cost to build a two-bedroom condo.

Schankler criticized the lack of more publicly documentable progress on the project. She also criticized the fact that the existing houses had been allowed to deteriorate beyond repair, which she contended was intentional in order to ensure brownfield funding.

Now, the DDA had a chance to step back from the project and to redirect scare resources more wisely inside the DDA district. [The Near North project is outside the DDA tax district, but within the quarter-mile radius the DDA board has set as the area in which it's willing to invest housing dollars. In this the DDA has relied on advice from its legal counsel that it is legal to take this approach.]

Also at the end of the meeting, during time allotted for public participation, Ron Motsinger of the International Brotherhood of Electrical Workers (IBEW) Local Union 252 told the board that the local union represented hundreds of building contractors in all trades. He pointed to current levels of unemployment in some trades of over 33%. Local workers are hurting for jobs, he said. He had been excited to see the Near North project come in, but was disappointed that Rockford Construction was chosen as the general contractor.

Motsinger contended that Rockford has a track record of not using local contractors. Hutzel, a 150-year-old local company, had not been notified to bid on the project. He had no confidence Rockford would use local labor. Motsinger said the local had done $100,000 worth of charity and community work, citing specifically that it had bought scoreboards for Skyline High School. It really would have been nice to make sure it’s local people who are hired, he said. There are local general contractors who could have done the job. He said it was disappointing to see the resolution rushed through.

Rob Turner who represents District 1 on the county board of commissioners, also addressed the board at the end of the meeting. He is the owner of Turner Electric Service Inc. in Dexter. He said he was excited when the Near North project was approved – it helped poor people and he was happy for that. It could also help the building trades, he said. But when he heard that Rockford Construction had been selected as the general contractor, he was disappointed. As an alternative, he mentioned O’Neal Construction as a local general contractor who has experience with federally-funded projects.

Turner described Rockford as dealing with “non-responsible bidders.” Non-local firms don’t shop and buy locally, he said. He acknowledged that his firm was asked to bid on the Near North project. However, he’d received the invitation to bid just one week before. He’d tried to get a set of plans online but was unable to obtain them that way. They had been available physically in Grand Rapids and Bloomfield Hills, he said. He asked the board if that kind of bid process sounded conducive to local contractors. Given that the grant contract is not done, he said, he thought some language could be added to ensure that local companies had better access to the work.

Near North Grant: Board Deliberations

When the board took up the issue of the grant renewal, Appel was asked to the podium to clarify the nature of Avalon’s request. Appel explained that Avalon anticipated closing on their deal in the next month or so. The other funders will want written assurance that the $400,000 plus the $100,000 (contingent on LEED certification) is committed from the DDA. When Avalon closes, Appel said, the other funders will want to know that the $500,000 commitment is secured. DDA executive director Susan Pollay had told him, Appel said, that it’s not DDA standard practice to create a grant agreement.

DDA board member Newcombe Clark.

The second part of the request was a longer-than-usual grant period. If renewed now, then June 30, 2013 would be the natural expiration, he said. Appel requested that it be extended through Dec. 31, 2013, because by then the building would be operating long enough to achieve LEED certification.

Joan Lowenstein asked what the potential impact would be if the decision were put off until the operations committee could again review it and bring it back to the board. Appel said he was worried that a delay could affect the closing on the deal. Lowenstein invited Appel to talk about the bidding and the local contracts, which had been raised during public participation time at the start of the meeting.

Appel said that Avalon had looked at a number of issues in selecting a general contractor. Among them were the contractor’s experience in Washtenaw County, the experience building this type of housing, and experience with the Michigan State Housing Development Authority (MSHDA). Avalon had selected Rockford Construction because Rockford brought the most to the table, including experience in Washtenaw County. Before issuing bids, Appel said, Avalon had made sure that local subcontractors were well represented. For the early bid packets, only one-quarter came from western Michigan, where Rockford is located.

Appel said that because the project has federal funding, it brings with it various requirements for oversight – that includes prevailing wage requirements. There’s a highly-regulated open bid process. The bids were widely circulated for anyone to download the specifications, Appel said. He said he understood and respected the desire to support local businesses. Federal regulations make sure that everybody has access to the bidding process, he said.

Appel cautioned that a delay at this point would not allow Avalon to bring a document to the closing that showed the funding is secure.

Board member Newcombe Clark indicated that he thought the urgency was generated by the DDA board’s bylaws, not by Avalon’s timetable.

Pollay explained that the Avalon grant had sun-setted on June 30, 2011. The renewal had been discussed at the previous week’s operations committee meeting, Pollay said.

Clark said he had supported the Near North project and that he still supported it. He wanted to see it “come out of the ground,” he said. But Clark he said he also wanted to see his questions answered. He felt the DDA board was being rushed into creating closing documents, and the extension was for longer than the DDA’s usual grant period – it was for a 2.5 year extension. He’d wanted to explore several questions. Clark concluded that he could not support the project, based only on the information he had.

Responding to a question from board member Leah Gunn, Appel explained that the overall Near North project is relying on the DDA grant money – other funders need to know that the DDA’s commitment is there. Clark chimed in, “We’re free equity.”

Appel continued by saying that a copy of a DDA board resolution is not what real estate attorneys are accustomed to seeing at a closing. He said Avalon needed something that third parties would understand in the context of a real estate closing. Board member Roger Hewitt observed that the board was being asked to support the resolution when the document doesn’t exist yet.

Mayor John Hieftje said that the DDA’s offer of a grant was very sincere and he didn’t have a problem putting it in writing. He said he trusted the executive committee of the DDA board to do that. [According to DDA board bylaws, the executive committee consists of the chair, vice chair, treasurer and recording secretary. The last former chair is a non-voting member, and the executive director is a non-voting ex-officio member of the executive committee.]

Hieftje said that Avalon has to balance a lot of different factors with other entities that are larger than the DDA. Timing issues are hard. He said the DDA had committed to the Near North project a long time ago. Board member John Splitt also indicated that he had no problem with voting for the resolution. Board member John Mouat also supported the project. He noted that an incredible amount of time and work has been put in to make the project work. He said the DDA board owed it to the community to support it.

Responding to the concerns raised by representatives of trade unions, Gunn explained that the board doesn’t have the ability to say who gets a contract. She also noted that new state legislation forbids CUB (Construction Unity Board) agreements – it’s not for the DDA to decide. [CUB agreements are negotiated between local trade unions and contractors, and require that contractors who sign the agreement abide by terms of collective bargaining agreements for the duration of the construction project. In return, the trade unions agree that they will not strike, engage in work slow-downs, set up separate work entrances at the job site or take any other adverse action against the contractor.]

Comments from Hieftje and Gunn established that the city of Ann Arbor and Washtenaw County both needed to take action to revise policies to make them conform to the new state legislation on CUB agreements.

Clark asked for information on the site plan and whether it needed to be renewed with the city. Lacking other information, he said, he had to default to his own expertise. Clark said he did not want to go through the winter with vacant houses sitting on the site. He lamented the fact that the board did not have more time to consider the resolution.

Board member Sandi Smith said she’d been trying for seven years since she’d been appointed to the DDA board to spend the housing fund balance. It’s been difficult to add even a single unit of affordable housing, she said. If the DDA were to pull its commitment from the Near North project, it’s not as simple as picking another project that comes along. It would take a lot of time to develop another project. The DDA has been familiar with the Near North project for a long time, Smith said. She echoed Clark’s sentiment, however, that the houses need to come down. There’d been problems with people squatting inside them, she said.

Clark then suggested that out of the $500,000 grant, $100,000 be slated specifically for demolition and be paid upfront, not made contingent on a certificate of occupancy or LEED certification. If the project meets the DDA’s goals and the board is already willing to spend the money, then “Let’s have lots, not squatter places.” Lowenstein, who was chairing the meeting, noted that Clark’s suggestion would need to come in the form of an amendment to the resolution.

Smith seconded Clark’s suggestion that the DDA would front the $100,000 to Avalon to carry out the demolition of the houses. Hewitt said he was supportive of the project, but still had the same concern that the board would simply be trusting that everything will be worked out. The board needs better documentation, he said.

Smith asked if the demolition could be incorporated into the terms of the grant contract. Mouat felt it would further complicate what is already very complicated. He felt the board needs to be supportive of the project and make it happen as soon as possible. Adding a condition on the demolition would be another hindrance, he said.

Board member Russ Collins “called the question” on the amendment earmarking $100,000 for demolition of the existing housing on the Near North site.

Outcome on amendment: Clark’s amendment earmarking $100,000 for Avalon to demolish the houses on North Main received support only from one other board member, Russ Collins.

Almost immediately after the vote on the amendment, Gunn called the question on the main resolution.

Outcome on resolution: The board approved the $500,000 grant extension to Avalon, with dissent from Clark, Collins and Hewitt.

Near North Grant: Coda on Calling the Question

At the conclusion of the board meeting, Hieftje asked that the board bylaws be reviewed with respect to the parliamentary procedure of “calling the question,” to ensure that everyone has a chance to speak twice before the question has been called. He said he’d had his hand raised to speak on the Near North question and didn’t get to say something.

By way of background, under Robert’s Rules, the parliamentary move to close debate is actually called “moving the previous question.” More colloquially it’s referred to as “calling the question.” The motion needs a second, then requires a vote with 2/3 majority. The motion itself is not debatable, however.

At Wednesday’s meeting, the calling of the question on both occasions did not receive a vote. When something like this happens, contrary to the rules of procedure, it’s always in order for someone to raise a point of order to insist on the proper administration of the rules. Had Hieftje done so, it’s possible that his desire to speak might have been recognized at that point.

Parking Rates, Enforcement

At the meeting of the DDA board’s operations committee meeting the week before, on Aug. 30, 2011, the committee meeting packet included a set of items proposed to be included as part of the agenda for a joint city council/DDA board working session scheduled for  Nov. 14. The board did not have an item on its Sept. 7 agenda concerning parking rates.

Parking Rates, Enforcement: Background

A recent report in AnnArbor.com left the impression with some readers that a set of items in the Aug. 30 committee materials was already a recommendation of the DDA board. The article did not include the context of the DDA’s April 2010 Parking Report, which is referenced in the committee meeting materials.

That parking report had been produced by the DDA in response to a city council directive, given in late 2009. The city council directive had stemmed directly from a resolution considered by the city council, but not passed at that time, calling for the extension of parking meter enforcement hours.

The city council’s idea to extend evening enforcement hours was part of a strategy to replace revenue that the city had projected for new parking meters the city had wanted to install in areas near the downtown – against the advice of the DDA. The city wound up not installing most of the meters.

The city council’s revenue replacement strategy was put together by Sandi Smith, who is both a city councilmember (representing Ward 1) and a DDA board member. Included as part of Smith’s revenue replacement strategy was the assignment of revenue from two city-owned lots – 415 W. Washington and Fifth & William – directly to the city of Ann Arbor.

Additional context includes a planned joint working session with the city council. At its Aug. 30 meeting, the operations committee discussed items to be proposed to the council at that joint working session. The session, scheduled for Nov. 14, is contractually required as the result of a new agreement struck in May of 2011 under which the DDA manages the city’s public parking system. From the contract:

Joint Working Session. As part of the annual established calendar for City Council Working Sessions, City Council shall designate one working session in the fall of each calendar year as a joint working session with the DDA. The agenda for the working session shall be prepared by the City Administrator in accordance with Council Rules and in consultation with the Executive Director of the DDA. It is recommended that a portion of such agenda be dedicated to a discussion of operations under this Agreement and the utility of creating a joint study committee to address areas of mutual interest.

The timeline for rate increases stipulated in the contract requires three DDA board meetings, over the span of at least two months. The contract calls for announcing and indicating in writing the intent to increase rates at a DDA board meeting. At the next subsequent board meeting, members of the public must have an opportunity to address the board on that issue. And the board is contractually bound not to vote on the rate increase until the board meeting after that.

Based on the assumption that the DDA would not formally proceed with the contractually-stipulated changes to rates or enforcement hours before the council/DDA joint working session on Nov. 14, the DDA board could not take a vote on those changes until its February board meeting. On that scenario, the announcement of intent would come at the board’s December meeting, the public hearing would take place at the January meeting, and a vote could take place at the February meeting.

Parking Rates, Enforcement: Possible Agenda Items

In broad strokes, on Aug. 30 the operations committee was presented with possible items for the Nov. 14 joint working session that fell into two broad categories: hours of enforcement and parking fees. The note on hours of enforcement indicates that a possible item on the working session agenda could be a recommendation to extend the current on-street meter enforcement hours (currently from 8 a.m. to 6 p.m.) to 10 p.m.

The possible agenda items for parking rate changes include: increases in monthly permit parking for some structures and lots; increases in entrance fees to some structures; and increases in miscellaneous categories like art fair and meter bags.

Possible agenda items for rate changes also include adjustment downward of some parking fees, as part of a proposal to set rates based on demand. On-street spaces in highest demand would have a higher rate ($1.80/hour); on-street spaces in lowest demand would have a lower rate ($1.00/hour); and on-street spaces in the middle of the demand range would not have their rates changed.

Demand is defined in terms of the amount of revenue currently brought in by each meter. The pilot program described in the committee’s packet would be implemented in a rectangle bounded by State Street on the east and First Street on the west. Huron and William streets would be the respective north and south boundaries of the pilot program to set meter rates based on demand.

Parking Rates, Enforcement: Public Commentary

Maura Thomson, executive director of the Main Street Area Association (MSAA), addressed some recent talk about proposed changes to parking rates and enforcement hours. Back in late 2009, a resolution was considered by the city council that contemplated evening enforcement hours. [Chronicle reporting from that timeframe includes "City-DDA Parking Deal Possible" and "Most Aspects of Parking Deal Approved"] Thomson reminded the DDA board that in 2009, merchants were vocal in opposition to evening enforcement. [Within hours of the appearance on the city council's agenda of the resolution calling for evening enforcement, the Ann Arbor Area chamber of commerce had fired off a memo in opposition.]

In the wake of that city council discussion [which ultimately did not result in a formal call for evening enforcement], the DDA was then asked to come up with a plan. Thomson said that the MSAA was involved in that work through participation in focus groups. The MSAA had also surveyed its membership, Thomson said. She indicated that there was overwhelming opposition to extending enforcement hours. There was also a sentiment that some kind of free parking component needs to be included. She said it feels like “we’re back to where we started.” Part of the balance of higher rates and longer enforcement hours outlined in the April 2010 parking report produced by the DDA is a free parking component as part of the demand management strategy, Thomson said.

Thompson was alluding specifically to a passage from the April 2010 report that reads:

Free structure parking is being used in other Michigan cities with mixed use downtowns, as the offer of free is very attractive and easily understood. The DDA believes that every parking space has value, but if used correctly, using this pricing strategy may lessen demand at the meters and extend parking more broadly throughout the system.

Thomson asked the DDA board to consider that aspect of the plan – it allows for a positive communications strategy. She was dismissive of a free parking component based on the hours of enforcement early in the morning [also discussed in the report]. If we’re all being honest, she said, the free component from 8-9 a.m. has no correlation to evening enforcement. She compared that strategy to saying that enforcement of meters from 6-8 a.m. would have a positive impact on parking revenue. So she asked that “truly free” parking be tied into any plan to extend hours of enforcement.

Tom Murray introduced himself as a member of the MSAA and owner of Conor O’Neill’s on Main Street. He warned that if the DDA enacts the plan as currently discussed, people will go elsewhere for entertainment. Addressing the issue of employee parking in the evening, Murray said that the DDA was directed to provide a plan to communicate specific options for evening employees. But the discussion from the last committee meeting the previous week didn’t indicate any specific options, Murray said.

Murray ventured that his staff would continue to find a way to get outside and feed the meters. Customers, on the other hand, won’t go outside and they’ll receive tickets – that will become a problem. Murray said that when we read about employees, we forget that employees are also customers. We need to incentivize employees, not punish them. A truly free parking component needs to be explored, Murray said.

Murray encouraged the DDA to find creative ways to reach out to employees. Employees would take advantage of alternatives if they are safe and affordable, he said. He also suggested that the entire program should be on a pilot basis, not just the meter rate schedule. The plan current under consideration hurts downtown, Murray concluded.

Addressing the board at the time for public commentary at the end of the meeting, Jessica Johnston of Falling Water on Main Street asked the board to reconsider any decision to extend hours of parking enforcement. Based on face-to-face interaction with her customers, she told the board there would be a negative reaction to it. The downtown economy is already fragile, she cautioned, and she ventured that the dinner crowd could be eliminated by the proposal.

As part of his report from the Downtown Citizens Advisory Council, Ray Detter said the advisory council continues to support the DDA’s effort to implement parking/transportation demand management. He said some of the things in the media he’d read were not terribly accurate. He stated that the advisory council had always assumed that the possibility of extending hours would include a free component.

At the start of public commentary, Joan Lowenstein, who was chairing the meeting, had stressed that public commentary is not the occasion for a back-and-forth kind of thing. However, board members do sometimes use their own time at the board table to respond to concerns raised during public commentary.

And in response to the public commentary, board member Roger Hewitt stressed that the operations committee meeting had been the start of a discussion – he appreciated the input from the public. Hewitt said he felt the way the proposal had been characterized in media reports was unfortunate.

Naming Guenzel Chair, Thanking Boren

On the agenda were resolutions to name Bob Guenzel as board chair and Leah Gunn as vice chair, and to thank Gary Boren for his service on the board. [Guenzel did not attend the board's meeting.]

Naming Guenzel, Thanking Boren: Background

The board had been without a chair because board member Gary Boren, who had been elected to that post by his board colleagues at their July 6, 2011 meeting, was not nominated by mayor John Hieftje for reappointment. Boren’s term expired on July 31. Boren was replaced on the board by local attorney Nader Nassif.

Guenzel, who retired last year as Washtenaw County administrator, was elected vice chair of the board at the July meeting. Gunn’s other public service currently includes representing District 9 on the Washtenaw County board of commissioners.

The evening before the DDA’s board meeting, at the Sept. 6 city council meeting, three nominations to the DDA board were on the agenda for confirmation: Joan Lowenstein (reappointment), John Mouat (reappointment), and Nader Nassif (new appointment replacing Boren). The nominations had been announced at the council’s previous meeting, on Aug. 15.

At the council’s Sept. 6 meeting, Stephen Kunselman (Ward 3) made the rare request that the council’s confirmation of the mayoral nominations be done separately on roll call votes for each nominee. The votes on the appointments of Mouat and Nassif were unanimous. However, Kunselman voted against the reappointment of Lowenstein. All other councilmembers present voted for her.

Naming Guenzel, Thanking Boren: Board Deliberations

At the DDA board’s Sept. 7 meeting, Newcombe Clark noted that the board is tasked by its bylaws to elect officers at the July annual meeting. [That has historically come before the mayor has chosen to announce whether he would be reappointing board members whose terms were expiring later in the month.] Clark reminded board members that he’d raised the issue at the last two annual meetings. From The Chronicle’s report of the 2011 annual meeting:

Roger Hewitt nominated current vice chair Gary Boren to serve as chair.

Newcombe Clark asked if Boren’s term was being renewed – that is, would he be reappointed by the mayor to serve on the board? By way of background, outgoing chair Joan Lowenstein’s term on the board ends on July 31, 2011, as do the terms for Gary Boren and John Mouat. Boren has been a vocal proponent of the idea that the DDA is an independent corporate body and not an arm of the city of Ann Arbor.

Last year, Clark had pointedly abstained from voting in the officer elections over the lack of information about reappointments to the board. From Chronicle coverage of the July 7, 2010 DDA annual meeting:

Abstaining from each of the officer votes was board member Newcombe Clark.

Clark explained to The Chronicle after the meeting that there’d been no indication from the mayor whether the two board members whose appointments are expiring July 31 – Jennifer S. Hall and John Splitt – would be reappointed. Clark said he could thus not be certain of the full range of choices for board officers.

Splitt was reappointed; Hall was not. Bob Guenzel was appointed instead of Hall.

In response to Clark’s question this year, Lowenstein said they did not know that yet. Mayor John Hieftje, sitting at the board table, did not offer any statement about whether he planned to nominate Boren for the city council’s approval for reappointment.

At Wednesday’s meeting, Clark stated that he would like to see the bylaws adjusted so that officer elections are not held until after the status of reappointments is known. Otherwise, he said, board members are being asked to vote for chair and vice chair without knowing if they’ll continue on the board. Nothing is lost and a lot is gained by making the change, Clark said. He stated that he wanted formally to ask the executive committee to look into it: “We owe each other more than this.”

Outcome: The board unanimously approved the resolution thanking Gary Boren for his service, as well as the resolution naming Bob Guenzel chair of the board. Boren, who attended the meeting to receive the recognition from his colleagues, made his way around the table and shook hands with the board members.

County Economic Development Tax

The board was asked to consider a resolution urging the Washtenaw County board of commissioners to use Act 88 of 1913 to levy a tax in support of economic development in the county. A public hearing on the tax was scheduled for the county board’s meeting later that evening.

At its Aug. 15 meeting, the Ann Arbor city council passed a similar measure urging county commissioners to levy the tax.

For the last two years, the county board has levied the tax. It has previously used a rate of 0.043 mill. (One mill is $1 for every $1,000 of a property’s taxable value.) This year, the county board is contemplating a millage rate of 0.05 mills. Because Act 88 predates the state’s Headlee legislation, the county board does not need to put the issue before voters in order to levy the tax. The county board could, by the Act 88 statute, levy such a tax up to 0.5 mills, or 10 times the amount it is considering for next year.

The Act 88 tax received initial approval by a 7-3 vote at the county board’s Sept. 7 meeting. The three commissioners voting against it were Alicia Ping (R-District 3), Wes Prater (D-District 4) and Dan Smith (R-District 2). Commissioner Ronnie Peterson was absent. A final vote is expected on Sept. 21.

The anticipated $688,913 in millage proceeds will be allocated to several local entities: Ann Arbor SPARK ($230,000), SPARK East business incubator ($50,000), the county’s dept. of community & economic development ($131,149), Eastern Leaders Group ($100,000), promotion of heritage tourism ($65,264), Food System Economic Partnership (FSEP – $15,000), Washtenaw 4-H, operated by the Michigan State University Extension program ($82,500) and Washtenaw Farm Council 4-H Youth Show ($15,000).

During the brief DDA board deliberations on the resolution, Leah Gunn, who also serves as a county commissioner, indicated that it was “very small millage,” that would cost $5.38/year for the average homeowner. It supports important economic development efforts like Ann Arbor SPARK and agriculture, she said. Gunn told her DDA board colleagues that she would appreciate them voting for it, so that she could take it to the county board of commissioners meeting later that evening.

Outcome: The DDA board voted unanimously in favor of the resolution urging the county board to levy the economic development tax.

RiverUp!

Before the board was a resolution expressing support of RiverUp!, a collaborative effort among several organizations – including the Huron River Watershed Council, the National Wildlife Federation, and the Michigan League of Conservation Voters – to improve the Huron River corridor.

The resolution states that the DDA will assist in wayfinding efforts that would help connect the river with visitors to the downtown, but it does not specify a budget for that effort. [For background on the RiverUp! initiative, see Chronicle coverage: "RiverUp! Focuses on Revitalizing Huron River"]

During board deliberations, mayor John Hieftje stressed that he’s been involved with the RiverUp! project since the beginning and expressed his support for the resolution.

John Mouat questioned the project’s relevance to the DDA. He said as much as he wished it did, the Huron River doesn’t flow through Ann Arbor’s DDA district. What caused him concern, he said, is when something becomes “a bit of a stretch” and he wanted to voice that as a general concern. He wanted to know specifically how support of the DDA board adds to the project.

Sandi Smith pointed out the focus on wayfinding in the DDA’s resolution. She said her thought in bringing forward the resolution is that a University of Michigan freshman might be standing on campus and not know about the recreation amenity just 3/4 mile to the north. She allowed that the DDA can’t relocate the downtown to the river, but it’s also important not to forget that it’s there.

Outcome: The DDA board voted unanimously in favor of the resolution expressing support of RiverUp!

Communications, Committee Reports

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

Comm/Comm: The Varsity, Alleys

Ray Detter reported out from the Downtown Citizens Advisory Council, which meets monthly on the evening just before the DDA board meetings. He noted that The Varsity at Ann Arbor would be coming before the planning commission on Sept. 20. [The Varsity is a proposed 13-story, 173-unit, 178,380-square-foot apartment building for approximately 418 students. It would include 77 parking spaces, and would replace the two-story office building and parking lot currently on the site, located on Washington Street, just west of the First Baptist Church.]

Detter said that the advisory council would continue to support the city’s newly enacted downtown design guidelines – the advisory council doesn’t oppose The Varsity. He reported that members of the advisory council had attended the design board review meeting for The Varsity, as well as the citizen participation meeting, and offered their suggestions. Detter said that in response to feedback, the developer had made some changes, but had not really addressed the issue of the view from East Huron Street.

Detter praised the work that the developer had done with the First Baptist Church, which had resulted in plans for a walkway connecting East Huron and Washington Street.

Detter said the hope was that the south entrance to that walkway on Washington would connect to the alley that runs between Washington and Liberty. That alley, Detter said, has been allowed to turn into a place for smelly dumpsters and urinating panhandlers. Detter reported that the advisory council had met with DDA executive director Susan Pollay, assistant city attorney Kevin McDonald, interim city administrator Tom Crawford and mayor John Hieftje.

As a result, Detter reported, that group has moved ahead to form a committee to develop a plan for the alley. Some of the goals are to get better placement of the dumpsters, add awnings, and install better lighting. He expressed the hope that it could be turned from a dangerous, dirty, disgraceful alley into an asset.

Comm/Comm: Downtown Parcels

As part of the report from the board’s partnerships committee, Sandi Smith reported that the committee continues to discuss how the DDA will implement a city council directive to explore alternate uses of some city-owned parcels in the downtown. Smith stressed that the idea is to build on all the work that’s come before, not to recreate everything.

Amber Miller, the DDA’s planning and research specialist, had sketched out a draft of a process, to which committee members had responded favorably. It involved two parallel tracks – a technical component and a community outreach component. Doug Kelbaugh, former dean of the University of Michigan’s college of architecture and urban planning, and Kit McCullough, who teaches at the college, attended the partnerships committee meeting. They’d previously pitched their services to the DDA to facilitate a public engagement process.

The two UM architecture faculty were receptive to Miller’s sketch and suggested that they could develop a “road show” as a presentation that could be delivered by DDA staff or some other person on multiple occasions to different community groups. The conversation about the alternative use of downtown parcels was to continue at the committee’s next meeting on Sept. 14.

Comm/Comm: Regular Parking Report

Roger Hewitt delivered highlights from the monthly parking report from July: hourly patrons were down 5%, revenues up 2%. Art fair revenue was down about $5,000 (2%) compared to last year. Hewitt said the weather had an impact, but the horrible, hot temperatures had put a smaller dent in revenues than he’d been anticipating. Responding to a question from John Mouat, Hewitt said the revenue from art fair parking is not budgeted separately. Russ Collins called the $5,000 variance not significant. Hewitt agreed that it’s “a drop in the bucket.”

Comm/Comm: Unaudited FY 2011 Budget Numbers

Roger Hewitt pointed to the unaudited financial statements from the end of the 2011 fiscal year. He noted that by state law the DDA has to amend its budget every year to reflect the best estimate of where the organization stands financially. The audit is in process now, and the DDA expects that the numbers will be the same at the end of the audit.

Of the items that Hewitt ticked through, the scaling back of expenditures on parking maintenance drew scrutiny from board member Newcombe Clark. He wanted to know if the amount reflected an additional revised downward expenditure on maintenance. Yes, answered Hewitt, but the reduced maintenance activity was still within the DDA’s engineering consultant’s recommendations.

Clark noted that painting is cosmetic unless you don’t do it for several years – then it becomes structural. Hewitt assured Clark that over a 10-year period, the DDA would spend the same amount it had originally planned. Hewitt described the DDA’s approach to maintenance as “fanatical,” so felt like the DDA was in very good shape with respect to the maintenance issue.

Hewitt noted that the fund balance had decreased considerably from a high of around $20 million several years ago and the DDA had spent down a good deal of it. Those numbers would continue to go down, he said.

Comm/Comm: go!pass

John Mouat reported that the getDowntown advisory board had advised increasing the cost of go!passes to employers from $5 to $10. With the popularity of the program, all of the funds had been expended, he said. However, the Ann Arbor Transportation Authority (AATA) had passed a resolution at its last meeting adjusting the price it charges for go!pass rides over the next two years to calibrate it to the amount already pledged by the DDA for that period. That led Mouat to conclude that: “We’re covered for go!passes.” [For detailed Chronicle coverage of the go!pass AATA funding decision, see "AATA Reduces Charge for go!pass Rides"]

Comm/Comm: Bicycle Parking

John Mouat gave an update on information about bicycle parking downtown, provided by a DDA summer intern. Highlights included: 1,000 bike parking spaces downtown; 83% of bikes parked are locked to hoops instead of lampposts; the bicycle map has been updated; the last of new vegetable-shaped hoops have been installed at the farmers market.

Comm/Comm: Construction Updates

John Splitt reported that the Fifth and Division streetscape improvement project is mostly complete, except for the 300 block of South Fifth Avenue – that section will need to wait until construction of the underground parking structure on South Fifth is further along. On the 200 block of South Fifth, just some lampposts remain to be installed.

The underground parking structure site along Fifth Avenue is now is getting very busy, Splitt reported. Waterproofing work is being done on the east dog-leg side of the project. Columns and slabs are getting poured in the other two phases – the middle and the Fifth Avenue side. [The project is being built from east to west.]

Comm/Comm: State of the Downtown Report

At the board meeting, the previous release of the DDA’s State of the Downtown Report was acknowledged. The report features a raft of statistical information about the DDA district, including acreage, building square footage by category, population trends, real estate occupancy rates, crime trends, and the like. Interspersed through the text are photos, including a cover photo by Seth McCubbin.

Present: Nader Nassif, Newcombe Clark, Roger Hewitt, John Hieftje, John Splitt, Sandi Smith, Leah Gunn, Russ Collins, Joan Lowenstein, John Mouat

Absent: Keith Orr, Bob Guenzel

Next board meeting: Noon on Wednesday, Oct. 5, at the DDA offices, 150 S. Fifth Ave., Suite 301. [confirm date]

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The grant is for $400,000, with another $100,000 available if the project achieves LEED certification. The grant would be paid when the project receives a certificate of occupancy, and a waiver of all liens. Avalon must also have an agreement in place with the city/county office of community development to ensure that income eligibility requirements are met for all residents.

The income eligibility requirements for the 39 units in Near North are based on affordability as defined for two categories of apartments. For 25 apartments, rents must be affordable to households with incomes at less than 50% of area median income (AMI). The remaining 14 apartment are for supportive housing and will have Section 8 rent subsidies.

The Near North project is outside the DDA tax district boundary, but is within the quarter-mile radius established by DDA board policy for such housing fund expenditures.

The grant was renewed for a period of 2.5 years, instead of the typical two-year period for DDA grants, in order to facilitate LEED certification. The grant was renewed over the dissent of three board members: Newcombe Clark, Russ Collins and Roger Hewitt.

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

Key elements of the policy: at least one city or county lien will be maintained on the property; liens with federal affordability restrictions will be in the highest lien position possible; liens that do not have federal affordability restrictions will be discharged if needed to facilitate reinvestment of outside funding; the city administrator is authorized to approve lien subordinations and lien discharges.

The city council had discussed a specific case related to the forgiveness of loans and subordination of liens at its May 16, 2011 meeting. The context there was the appropriation of funds for the demolition of houses to prepare for construction of the Near North affordable housing project, located on the east side of North Main Street between Kingsley and Summit.

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 addition to the NSP budget came from a reimbursement. The owner of a house paid back NSP money to the city, previously expended to demolish the owner’s property. That reimbursement amounted to $24,135. NSP funds come originally from federal grants allocated through the Michigan State Housing Development Authority (MSHDA).

In addition, city staff identified an NSP homeowner acquisition and rehabilitation project that was completed under budget by $11,750. Combined, the additional revenue to the NSP budget and the savings on the rehabilitation project amount to $35,885. Of that amount, $33,292 will be used to pay for the demolition of 718, 722, and 724 N. Main St., with the remaining $2,593 going to administration costs in the office of community development. The money will be allocated to the nonprofit Avalon Housing, which is developing the Near North project with Three Oaks.

The city council originally approved rezoning for the project – a four-story, 39-unit mixed use residential building on a 1.19-acre site – on Sept. 21, 2009

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]

Donald Staebler, who'll turn 100 later this month, was honored at Wednesday's county board meeting. He has lived on Staebler Farm, which is now owned by the county, for 98 years.

One item, however, yielded lengthy debate: A resolution that would remove the “felony box” from county job applications, and eliminate background checks for all jobs except those deemed sensitive. Several commissioners were uneasy with even partial elimination of background checks. The resolution was ultimately amended to deal with only the felony box, which asks applicants if they’ve ever been convicted of a felony. Commissioners ended up unanimously approving the removal of that question from job applications.

The board also agreed to put a 10-year millage renewal on the November ballot for the county’s natural areas preservation program, and approved brownfield plans for the Near North housing project and an expansion of Zingerman’s Deli. Both of the brownfield projects are located in Ann Arbor – brownfield status enables them to seek Michigan business tax credits and, in the case of Zingerman’s, to use tax increment financing (TIF) to get reimbursed for project-related expenses.

Commissioners got a second-quarter budget update, which revealed few surprises. However, projections indicate that the budget surplus they need to carry over into 2011 will fall short of their goal by about $987,000. Next year will be a challenging one.

The board had been expected to act on re-establishing a land bank for the county, but ended up tabling resolutions related to that effort until next month, citing the need to gather additional information.

The meeting also included time to honor two people from the community: Joseph N. Cousin Sr., pastor of Bethel AME Church in Ann Arbor, and Donald Staebler, a local farmer whose land is being turned into a county park – and who’ll turn 100 later this month. Both men received standing ovations for their work.

Felony Box, Background Checks

A resolution that proposed altering some aspects of county job applications received the most discussion of any other item on Wednesday’s agenda.

Currently, applicants for jobs with the county government must indicate on their job applications whether they’ve been convicted of a felony. Commissioners considered a resolution to remove the so-called “felony box” from county job applications. The resolution also proposed that the county eliminate background checks for certain jobs. Currently a background check is conducted on anyone who receives a conditional offer of employment from the county.

[For background and one person's perspective on the issue, see a column written by Jason Smith and published by The Chronicle in January 2010: "Ban the Box, Hire Fairly."]

Felony Box: Public Commentary

Theresa Finney Dumais, development director for Habitat for Humanity of Huron Valley, spoke in favor of removing the box. She said that the Habitat has an excellent partnership with the Michigan Prisoner ReEntry Initiative (MPRI), which led to a paid day laborer program that’s been very successful. MPRI workers tend to have above-average skills and are very reliable. She also praised the MPRI staff, saying they were great to work with.

Terril Cotton also spoke in favor of banning the felony box, saying it would give ex-felons a fair chance of competing for jobs. Since June of 2007, Cotton said he submitted 170 applications and got nine interviews, but no one would hire him because of his felony conviction. Now, “I have a job,” he said, “but it was hard – very hard.”

A job is essential to surviving after you get out of prison, he said. You can go to school and get training, but it doesn’t matter because you still get the door shut in your face. Cotton said he understood that there were certain sensitive jobs which would require background checks. He said he knows that ex-felons must accept responsibility – they did something wrong, he said, but they paid their debt to society by serving their prison sentence.

Felony Box: Commissioner Comments and Questions

Jessica Ping clarified that the changes would apply to county government jobs only – not to businesses or organizations in the county. Rolland Sizemore Jr. said he’d support the resolution, and that it could serve as a model for businesses.

Barbara Bergman wanted to take an additional step in the future, at some point requiring businesses that do work for the county also to ban the box – at least for positions that result from their contracts with the county. She reasoned that contractors were being paid with county money, so the same rules should apply, and all citizens should have a chance at those jobs.

Wes Prater then raised some concerns. Saying he had no problem banning the felony box, he said he didn’t think the policy about eliminating background checks had been well thought out. Employees are paid with tax dollars, he said, and the organization needs to know whether there are former felons working there. In some cases, for more serious crimes, Prater said he didn’t think they should be employed by the county at all.

There was then some discussion – and confusion – about whether the new policy would continue to require background checks for all people offered jobs. Diane Heidt, the county’s human resources and labor relations director, clarified that her staff was working with department heads to come up with a list of positions that would require background checks after a conditional offer of employment was made. The list would include those jobs that require the handling of money, working in the sheriff’s department or with children, for example. For all other positions, there would be no background checks, if the new policy were to be adopted.

Ken Schwartz suggested tabling the resolution, adding that he was generally in favor of it. In Michigan, he noted, some crimes are felonies that in other states would only be misdemeanors.

Leah Gunn noted that they’d worked very closely with Mary King, community coordinator for the MPRI in Washtenaw County, to craft this resolution. It helped level the playing field for people who were having an especially tough time finding work in this economy.

Kristin Judge said her concern was not only for positions dealing with children and handling money, but also for the employees of Washtenaw County. She didn’t know why the county would do away with all background checks. What if they hired someone who had a history of violent criminal sexual assault – would other employees be safe?

Jeff Irwin asked whether the list of jobs that would require background checks was available. Heidt told him it was still being compiled, but she hoped to have it finished by September. He then suggested moving the resolution through their Ways & Means Committee that night, but not taking the final vote until their next regular board meeting on Sept. 1.

Irwin also asked how much it cost to do a background check. Heidt said it varied, depending on how extensive it was. Overall, the county spent about $28,000 in total last year on background checks, she said. That doesn’t include the sheriff’s department, which has its own procedures. Irwin noted that since the county wasn’t doing a lot of hiring, that’s probably on the low end of what it would cost, in any given year. So there’s a financial savings, albeit a small one, to eliminating some background checks, he said.

Barbara Bergman asked for examples of positions that might not require a background check. Heidt said that an administrative position for the water resources commissioner’s office wouldn’t likely require one. Bergman then asked if there was anyone who could speak to the legal distinctions among various types of criminal sexual conduct. There are nuances that are important to consider, she said.

Conan Smith noted that there was a judge in the room – 14th District Court judge Cedrid Simpson – as well as someone from the public defender’s office, Delphia Simpson. Judge Simpson, who with his sister Delphia Simpson was attending the meeting to honor the pastor of their church, agreed to come to the podium and respond to Bergman’s query. He said there was a distinction between different types of criminal sexual conduct, but he said he didn’t want to give any indication that those distinctions make some less serious than others. CSC 4 – criminal sexual conduct, 4th degree – is the lowest in terms of penalties, for example, but the trauma on the victim might be just as great as with other CSC levels, he said.

Bergman said that obviously she’s not in favor of sexual misconduct, but that it’s important to consider the circumstances – like when kids go on a date and act stupidly, and the parents get mad. It’s important not to paint felonies with a broad brush, she said.

Prater restated that he didn’t object to eliminating the felony box. But eliminating background checks is a problem. The county has 17 different bargaining units, he noted. What if someone is hired into a job that doesn’t require a background check, then joins a bargaining unit and becomes eligible for a transfer – how is that situation handled? In addition, he again stated that there are certain people that the county just shouldn’t hire, like people who’ve committed violent crimes or sexual assault on children.

Heidt said that the county’s policy is to conduct background checks as part of a transfer or promotion – that’s standard practice, she said. Prater asked whether it was written into the labor contracts. When told by Heidt that it isn’t, Prater said the county then had no way to compel a background check. The way the resolution is written, it’s bad policy, he said.

Schwartz pointed out that they disagreed on how to implement the policy, and that they needed more time to analyze it. He asked Curtis Hedger, the county’s corporation counsel, whether there had been any legal analysis done on the county’s liability, in the event that something happened and the county knew – or should have known – about an employee’s criminal history. Hedger said that no analysis had been done on that issue.

Saying he was happy with the end, Schwartz said they needed to clean up the means. He moved to table the resolution until the board’s Sept. 1 meeting.

Outcome: The motion to table the felony box resolution failed on a 5-5 vote, with dissent from Bergman, Irwin, Gunn, Sizemore and Smith. Ronnie Peterson was out of the room when the vote was taken.

As a point of order, Judge noted that board rules require that if a commissioner is present when attendance is taken, they are required to vote. [This is a rule that's not vigorously enforced, based on The Chronicle's observation during the past two years of board meetings.]

Peterson then returned to his seat – when told it was a 5-5 vote and he was needed to break the tie, he smiled ruefully and put his head in his hands. He then voted no, and the motion to table failed.

Discussion continued. Judge asked Heidt to explain the rationale behind the county’s current practice of doing background checks on all hires. Heidt said that it began in 2002, after a study of best practices within the state and at other organizations. Judge wondered whether the county would be liable if someone who didn’t get a background check committed workplace violence. Heidt pointed out that the county has a separate workplace violence policy, but she deferred to Hedger on the question of liability. Hedger said it was impossible to say, given that each case is fact-sensitive. There’s the potential for liability, he said, but it would depend on the situation.

Smith said that Prater’s point – making a distinction between the felony box and background checks – is valid. In the hopes of reaching consensus that evening, he suggested striking the portions of the resolution that would eliminate background checks. The resolution would simply remove the felony box from county job applications. He told Heidt that in this case, it would be incumbent on the HR staff to ensure that the process is fair, and to make clear that getting a background check – and uncovering a criminal history – would not necessarily exclude the applicant from consideration.

Heidt said that currently, results from a background check are considered, but they’re just one factor.

Peterson agreed with Smith, then noted that over the years, the county has hired ex-felons a number of times – he said he could think of 10, off the top of his head. They’ve been active and contributing members of the organization, he said. The board wasn’t planning to torpedo this initiative, he said – they needed to be a model for the community. Peterson also noted that the county has had issues with workplace violence by people who haven’t had a previous criminal history.

Gunn then proposed amending the resolution by deleting references that called for eliminating background checks. She said the resolution would just remove the felony box, but keep the rest of their employment practices the same.

At this point, Irwin observed that the board had done “a complete 180.” They’d taken a resolution that made meaningful change in the way the county operated, and turned it into something that “is more symbolic than substantive.” He was disappointed in that, and moved to reinstate the original resolution. The motion was not seconded, and died for lack of support.

Schwartz thanked Peterson for not voting to table the resolution, saying he thought they’d made progress. The board still needed to give the county’s HR staff some guidance about the policy, he said, at a later date.

Smith concluded the discussion, saying that the presence of the felony box makes the hiring process highly prejudicial. By removing it, people will be judged by the merits of their abilities. If a background check later uncovers something that gives the HR staff pause, he said, they have a process to see if that history warrants not hiring the applicant. By taking away the box, the board is putting a weight on HR to ensure that if they don’t hire an ex-felon, there’s a reason for it.

Outcome: The board unanimously approved the revised resolution, eliminating the felony box from county job applications. Background checks will continue to be made for all job applicants who receive a conditional job offer.

Brownfield Plans Approved: Near North, Zingerman’s

At Wednesday’s meeting, there were public hearings for two brownfield plans: The Near North housing project on North Main in Ann Arbor, and an expansion of Zingerman’s Deli in Ann Arbor’s Kerrytown district. No one spoke during the public hearing on Near North. The only speaker for the Zingerman’s public hearing was Grace Singleton, a managing partner at the deli, who said she and others working on the project were there to answer questions, if commissioners had any. She thanked them for considering the plan.

Commissioners did not discuss either of the plans before voting. At the June 28 administrative briefing – an informal meeting to review the upcoming agenda – commissioner Barbara Bergman had raised concerns about the plans in the context of an article written by Judy McGovern and published in the August Ann Arbor Observer. The article reported that Broadway Village, a proposed development in Ann Arbor’s Lower Town area, had received a large incentive package from the state, and that the state’s pension fund had made a $20 million equity investment in the project. Much of that investment will be lost, according to the report.

At the briefing, Bergman wondered whether Zingerman’s or Near North would be receiving any money in advance, as part of its brownfield plan. She was assured that they would not.

The brownfield plans enable the Near North project and Zingerman’s to seek Michigan business tax credits – $720,000 and $1.003 million, respectively. In addition, Zingerman’s will use tax increment financing (TIF) to be reimbursed for up to $817,265 in expenses related to its expansion.

Outcome: Brownfield plans for both Near North and Zingerman’s Deli were approved unanimously, without discussion.

Natural Areas Preservation Program

Ten years ago, voters approved a countywide 0.25-mill tax to form the natural areas preservation program, known as NAPP. Since then, the county has acquired over 1,800 acres of land and established 17 new nature preserves. The millage will have generated about $27.5 million by the time it expires.

The millage is administered by the county’s parks & recreation commission, which is seeking a 10-year renewal of the millage, beginning in December 2011. Because of Headlee rollbacks, the renewal rate will be slightly lower – 0.2409 mill – and is expected to raise roughly $3 million in annual revenues if it passes. The county board is required to authorize adding the millage renewal to the ballot.

NAPP: Public Commentary

Spaulding Clark, Scio Township supervisor, urged the board to put the NAPP millage renewal on the November ballot. He noted that Bruce Manny, chair of the board for the Scio Township Land Preservation Commission, was also in the audience, and supported the millage. The county has been a great partner in Scio’s own preservation efforts, Clark said, adding that township voters approved their own 10-year land preservation millage in 2004.

Clark cited several properties that have been protected in the township, including the Burns-Stokes Preserve, the Fox Science Preserve and the Scio Woods Preserve. Many efforts are done in partnership with the county and Ann Arbor’s greenbelt program. [.pdf map of protected property in Scio Township] The township continues to receive applications from landowners who are interested in protecting high-quality natural areas, Clark said. He hoped the commissioners would let voters decide in November to continue the program.

Suzanne Goodrich introduced herself by saying that in 2006 she sold about 10 acres to the county. It’s located in Ann Arbor Township, along Dixboro Road – other property has been added to it over the years, and it’s now called the Goodrich Preserve. She and her husband wanted to preserve the land in its natural state. You can go there and find wildflowers, deer, lots of birds and a nature walk, she said, and it’s all been supported by NAPP. Land preservation is important for the health of the environment and the education of our children, she said. Goodrich asked commissioners to put the NAPP millage renewal on the November ballot, to continue funding of this important program.

Susan Lackey, executive director of the Legacy Land Conservancy, attended Wednesday’s meeting but did not speak during public commentary. She had previously addressed the board at an April 2010 working session on issues related to moving ahead with the millage renewal. Barry Lonik, a conservation consultant who has advocated for NAPP, also attended the meeting, but did not formally address the board.

NAPP: Commissioner Comments

Ken Schwartz said that every day he drives past the Burns-Stokes Preserve, which stretches along the Huron River, off of Huron River Drive. There are often hundreds of tubists and canoers there, he said – people “with better bodies than me” having fun. He encouraged residents to visit the preserve.

Kristin Judge also praised NAPP, saying that she was proud of the program and that residents appreciated it. It was just a renewal, she noted, not a new tax. Preserving land helps keep everyone’s property values higher, Judge said, and she felt like the program had a lot of support in the community.

Conan Smith, one of the board’s representatives to the Washtenaw County parks & recreation commission, noted that the NAPP program has been nationally recognized and provides an extraordinary service to the community. It’s one of the few science-based programs in the country, he said, adding that he was excited about the opportunity to extend its funding for another 10 years.

Outcome: The board unanimously approved a resolution authorizing that the 10-year, 0.2409-mill NAPP millage renewal be added to the November ballot.

Land Bank Tabled Again

The board had formed a county land bank authority last year, but dissolved the entity in March 2010 after several commissioners questioned how it would be funded and governed. The county didn’t receive federal funding it had originally intended to use for the land bank.

Yousef Rabhi, left, is congratulated by commissioners Conan Smith and Barbara Bergman on his victory – by one vote – over Democratic rivals in the Aug. 3 primary election to represent District 11 on the county board. Ann Arbor city councilmember Sabra Briere, with her back to the camera, attended Wednesday's meeting because of the land bank agenda item. Before the land bank was dissolved, Briere had been Ann Arbor's representative on the land bank authority.

A land bank allows the county to acquire tax- or mortgage-foreclosed property and work to put it back into productive use. For several months, commissioner Ronnie Peterson has been urging his colleagues to re-establish the land bank, with increasing frustration. At last month’s meeting, commissioners took an initial vote to approve a revised intergovernmental agreement, which lays out how the land bank will be governed – Barbara Bergman and Leah Gunn cast dissenting votes.

On Wednesday, the board was expected to take a final vote on both that agreement as well as a resolution to rescind their previous dissolution of the land bank.

The proposed intergovernmental agreement called for the board to consist of seven members: the county treasurer, two county commissioners, the mayor or councilmember from the city of Ann Arbor, the mayor or councilmember from the city of Ypsilanti, the supervisor of Ypsilanti Township, and a supervisor representing townships in the western part of the county. However, Bergman began the discussion by proposing an amendment to the intergovernmental agreement, to alter the composition of the land bank authority board. Her amendment would eliminate the requirement to have the Ypsilanti Township supervisor and a supervisor from western Washtenaw serve on the authority’s board.

In their place, Bergman proposed adding five other spots: 1) a representative from the banking industry, 2) a representative the local real estate industry, 3) a representative from local townships, recommended by the Michigan Townships Association, 4) an attorney recommended by the Washtenaw County Bar Association, and 5) a representative recommended by the Washtenaw County Home Builders Association. Her amendment required that all positions get final approval by the county board before being appointed.

Kristin Judge expressed concern about Bergman’s amendment, saying it seemed a little off balance to give spots on the board to Ann Arbor and Ypsilanti, but not to individual townships or the city of Saline. [The townships of Ypsilanti and Pittsfield both have larger populations than Ypsilanti.]

Rolland Sizemore Jr. said he had talked with Pat Lockwood, a Genesee County commissioner. She would be willing to come to a future board meeting, he said, to discuss the land bank issue. [Genesee County, where Flint is located, was the first county in Michigan to establish a land bank. Dan Kildee, a former Genesee County treasurer who helped write the enabling legislation for these land bank entities, had attended the Washtenaw County board of commissioners July 2009 meeting to answer questions about setting up a land bank authority. The Genesee land bank has recently come under fire for not maintaining the properties it owns – a concern voiced by some Washtenaw County commissioners.]

Sizemore proposed tabling the land bank resolutions until Lockwood could speak to the board. Peterson asked that Sizemore confirm as early as possible that Lockwood could attend next month’s meeting. He noted that they’d talked about the land bank at several meetings, but hadn’t moved forward. Sizemore acknowledged that the process was moving slowly, but said they were getting the answers they needed.

Outcome: The land bank resolutions were tabled until the Sept. 1, 2010 board meeting.

Second Quarter Budget Update

Jennifer Watson, the county’s budget manager, gave an update on the 2010-11 budget. [She gave a first-quarter update at the board's May 5 meeting, looking at the first three months of the year.] Now that two quarters of the year have passed, they have more solid data with which to make projections for the rest of the year, she said.

The great news, she said, is that property tax revenues are projected to show a $1.77 million surplus compared to what was originally budgeted. But there are other areas that are seeing lower-than-projected revenues. The district court is now projecting a $465,000 revenue decline, due to reductions in local law enforcement and collections, she said. Court officials are trying to identify potential new revenue, but it’s unlikely that will occur in 2010. In addition, the decision by Ypsilanti Township to cut the number of sheriff’s deputies that it pays for to patrol the township resulted in a revenue loss to the county of $1.07 million this year. That’s been partially offset by about $700,000 in expense reductions, but there’s still a $370,000 shortfall, Watson said.

Washtenaw County second-quarter budget chart. (Links to larger image)

Interest income is also down, she said – there’s a roughly $540,000 shortfall from projections in 2010.

Overall, Watson is projecting a $392,000 general fund revenue surplus for the year.

On the expenditure side, there will be a delay in some of the hiring of the new jail staff, which could result in savings for 2010, Watson said. In general, the administration is working hard with all department heads and other elected officials to ensure that projected savings actually materialize, she added. In some areas, it won’t happen. The district court, for example, had agreed to a 10% lump sum reduction, but that now looks unlikely to occur this year. District court security costs are about $220,000 higher than budgeted, primarily because of increased use of part-time staff at the Saline court.

One fairly significant uncertainty is the impact of tax appeals that are being made, Watson said. Appeals continue to increase – the county has just over $4 million in potential liability from those appeals, but it’s unclear how much of that amount will actually be awarded, or when.

With expense cuts and a revenue surplus, they’re projecting a total net surplus of $4.3 million for the year. However, the budget called for carrying over a surplus of $5.289 million into 2011 – they’re still $986,664 short of that. That’s a higher shortfall than the $918,000 they’d projected earlier this year, Watson noted.

Watson also mentioned that from March through May, the number of youth cases handled by the county’s department of human services has increased dramatically. They’re trying to determine if this is just a spike, or whether it’s a longer trend that they’ll have to budget for accordingly. In the worst case scenario, it will result in about a $400,000 net cost to the county, she said.

Budget Update: Commissioner Comments and Questions

Jeff Irwin began by pointing to the implications of Ypsilanti Township’s decision to cut the number of contracted sheriff deputy patrols. [See Chronicle coverage: "County Board OKs Ypsi Twp. Deputy Cuts"] In addition to the direct revenue loss to the county, it also means that overhead costs associated with sheriff deputy patrols must now be spread among a smaller number of deputies – those overhead costs per deputy will now be higher.

Washtenaw County commissioners Mark Ouimet, left, and Jeff Irwin. Both won their primary races on Aug. 3 for state representative – Oumet as a Republican in District 52, and Irwin as a Democrat in District 53.

The financial issue comes in addition to the public safety threat of having fewer deputies on patrol, Irwin said. He hoped to see the county’s larger communities, like Ypsilanti Township, increase their investment in police services.

Mark Ouimet urged the administration to prepare for the fourth quarter, when the variance between actual and budgeted amounts are typically greatest, he said. County administrator Verna McDaniel said that in general, they are being very conservative in their projections.

Kristin Judge had several questions for Watson. Among them, she asked for clarification about the increase in youth services at the department of human services. Watson said there’s been an increase in the number of neglect and abuse cases handled by DHS.

House By the Side of the Road

On Wednesday’s agenda was a resolution to rescind all prior board resolutions that allowed the nonprofit called House By the Side of the Road to operate on county property at no cost. Since 1970, the nonprofit has been distributing clothes to the needy from the premises of the county service center, off of Washtenaw just east of US-23. It built a shed there, and in 1996 struck an agreement with the county, stating that if the county ever asked the nonprofit to leave, the county would reimburse the House for the cost of the shed.

As part of the jail expansion, located in the same area, the county is widening its Washtenaw Avenue entrance to the corrections campus, and has asked the House to leave. The resolution considered by commissioners on Wednesday authorized the county to reimburse the nonprofit.

Jeff Irwin asked what the cost would be. Verna McDaniel, the county administrator, said it wouldn’t be substantial – she estimated less than $7,000. She said the county was storing all the items from the shed until they learned where the nonprofit would be located next.

Finance Director Approved

The board unanimously approved the appointment of Kelly Belknap as finance director for the county, with a starting salary of $110,000. Belknap has worked for the county for nearly 23 years in several departments, most recently serving as health service finance administrator with Washtenaw County Health Services. She was one of six candidates interviewed for the job to replace Pete Ballios, who retired last year after roughly 38 years with the county.

Belknap thanked commissioners for their support, saying “I look forward to some challenging budget years, that’s for sure.” She clarified that the challenge stemmed from the economy, not from working with commissioners.

Recognitions and Honors

Two men were honored by the board at the start of Wednesday’s meeting.

Joseph Cousin Sr., pastor of Bethel AME Church in Ann Arbor, with his wife Carisalyn and daughter Miriam. Cousin was honored by the board of commissioners for his six years of service at Bethel AME.

Joseph N. Cousin Sr., pastor of Bethel AME Church in Ann Arbor, was recognized for his six years of service leading the oldest, largely African American congregation in this area. Many members of the church attended the meeting, and gave Cousin a standing ovation when he received a framed copy of the resolution from county administrator Verna McDaniel.

Standing at the podium with his wife Carisalyn and his young children, Miriam and Joe, Cousin said that he felt blessed to be part of this community and that he prays to be here for many years to come.

McDaniel then presented a resolution honoring Donald Staebler, a Superior Township farmer whose property was known as “Crick-in-th’-Back Farm.” Washtenaw County parks & recreation acquired the farm in 2001, and is investing more than $2 million to turn it into a park. Staebler still lives in the farmhouse there, under a life lease with the county. He has lived there since he was two – he turns 100 later this month.

Staebler received a standing ovation from people attending the meeting. He spoke briefly, saying his family has worked hard to keep the farm going, “and now the county is doing that. Thank you very much.”

Coda: Road Commission Expansion

At the board’s July 7 meeting, commissioners held a public hearing on the possibility of expanding the Washtenaw County Road Commission board from three members to five – the county board appoints those positions. After the hearing and some discussion, commissioner Wes Prater made a motion to terminate the process of expanding the road commission. The motion passed, with dissent from Conan Smith and Jeff Irwin, who argued that it wasn’t something the board could stop in that way.

At the July meeting, Irwin said he planned to bring a resolution on the expansion to the board’s Aug. 4 meeting. However, no such resolution was on the agenda, and the issue wasn’t discussed at Wednesday’s meeting.

In a follow-up phone interview this week with The Chronicle, Irwin said he still might bring a resolution about the expansion to a board meeting later this year. Prater’s resolution had been symbolic, he said. There’s a specific legal process for the expansion, which includes a vote on the issue. Politically, he said, based on the board’s discussion in July and the outcome of Prater’s resolution, it seems unlikely that a vote on the expansion would be successful. However, Irwin said plans to talk with his board colleagues about it in the coming weeks, to see if he can gain support.

Public Commentary: Misc.

Thomas Partridge congratulated the winners of the Aug. 3 primary. He called for commissioners to put the expansion of affordable housing front and center on every one of their meeting agendas. The expansion of affordable housing shouldn’t just be for Ann Arbor and Ypsilanti, he said, but for every quadrant of Washtenaw County. There is no more important item to put on the agenda.

Jim Mogensen spoke twice. A month or two ago, he said, he attended a program at the Ann Arbor District Library about how to navigate around the city if you’re disabled. During the program, construction workers closed off the sidewalk in front of the library, making access to the building difficult – they were preparing to install a new ADA ramp. Noting the temporary ADA ramp that the county had recently installed in the front of its building at 220 N. Main, he suggested that they have a plan for safe egress.

In a follow-up to his commentary, commissioner Barbara Bergman said that when she was walking up the wooden ramp that night to come to the meeting, she wondered what would happen if it caught fire – it was a little too high for her to jump off of it. “That ramp got me just a little on the queasy side,” she said.

Taking another turn during a time for public commentary later in the meeting, Mogensen raised concerns about accepting nearly $44,000 in federal funds under the Edward Byrne Memorial Justice Assistance Grant, administered through the U.S. Dept. of Justice. The funds will be used by the sheriff’s staff for community outreach. Mogensen said he worried that there could be strings attached. He could imagine scenarios in which the federal government might require any entity that had accepted grants like this to help enforce federal immigration laws. This could also result in the need for additional jail space. It was something to think about and prepare a response for, he said.

Present: Barbara Levin Bergman, Leah Gunn, Kristin Judge, Jeff Irwin, Mark Ouimet, Ronnie Peterson, Jessica Ping, Wes Prater, Ken Schwartz, Rolland Sizemore Jr., Conan Smith.

Next board meeting: The next regular meeting is Wednesday, Sept. 1, 2010 at 6:30 p.m. at the County Administration Building, 220 N. Main St. The Ways & Means Committee meets first, followed immediately by the regular board meeting. (Though the agenda states that the regular board meeting begins at 6:45 p.m., it usually starts much later – times vary depending on what’s on the agenda.) Public comment sessions are held at the beginning and end of each meeting. [confirm date]

A van for Avalon Housing, parked at the nonprofit's headquarters in the Northern Brewery building on Jones Drive. Avalon recently received a $250,000 federal "green" grant for its Near North affordable housing development on North Main.

In addition to the grant for Near North – a proposed 39-unit affordable housing development on Main Street just north of downtown – the Urban County also received nearly $180,000 more than anticipated in federal funding through the Community Development Block Grant program for the coming fiscal year.

The board voted to divvy up those additional funds to projects in the Urban County’s three largest jurisdictions – Ann Arbor, Ypsilanti and Ypsilanti Township. They also approved setting aside nearly $27,000 for as-yet-unspecified human services support, in light of possible cuts in city of Ann Arbor funding to local nonprofits.

The focus on allocations at Tuesday’s meeting prompted this comment from Ypsilanti mayor Paul Schreiber: “It’s a pleasure to sit on a board that has money to spend!”

Revising the Urban County Annual Plan

The Urban County is a consortium of Washtenaw County, Ann Arbor, Ypsilanti and 9 townships, responsible for allocating federal funding for low-income housing and other community development projects. The funds are managed by staff of the joint county/city of Ann Arbor office of community development. [For background on the Urban County, see Chronicle coverage: "Urban County Allocates Housing Funds"]

Damon Thompson, OCD’s operations manager, began Tuesday’s meeting by noting that May 3 would be the final public hearing for the Urban County’s annual plan. The hearing will be held during the Ann Arbor city council meeting.

Leah Gunn, a Washtenaw County commissioner who chairs the Urban County board, reported that the county board had held a public hearing on the annual plan at its April 21 meeting. No one spoke at the hearing, she said. When asked by a fellow board member whether that was a surprise, Gunn replied, “No, it’s not.”

Thompson said that the deadline for public comments on the plan is May 10. The plan – for the fiscal year beginning July 1, 2010 – must be submitted to the U.S. Dept. of Housing and Urban Development (HUD), in order to secure federal funding. [.pdf of annual plan draft]

At its March 23 meeting, the Urban County board had approved proposed projects included in the plan and funded by the federal HOME Investment Partnerships and the Community Development Block Grant (CDBG) programs. At the time, they weren’t yet sure how much CDBG funding they would receive, and based the plan on an anticipated $2.22 million.

On Tuesday, staff informed the board that the actual CDBG funding for fiscal 2010 is $2.4 million. [The HOME funding allocation remained as expected, at $1.665 million.]

Much of the meeting was spent sorting through exactly how the extra CDBG dollars would be allocated. Board members found the staff report confusing, and Leah Gunn asked whether they could table it until next month, when staff would have a chance to clarify the proposed changes. Thompson said that wasn’t possible – he needed to submit the allocations as part of the annual plan for HUD, which was due before the board’s next meeting. So they thrashed through the numbers – and concluded that it was the presentation that was confusing, not a mistake in calculations. Apologizing, OCD director Mary Jo Callan at one point declared, “I’m on the verge of a stroke.”

Ultimately, the allocation changes were approved unanimously, and included:

• $26,978 for human services, with specific projects to be determined. Callan noted that the proposed city of Ann Arbor budget calls for a $260,000 cut to human services funding – it’s up to city council to determine the final amount, she said, but there will almost surely be cuts of some kind. The $26,978 won’t cover the cuts, she added, but it will help.
• An additional $20,000 to Ypsilanti Township for road improvement projects, bringing the total for that line item to $205,000.
• An additional $25,000 to Pittsfield Township for sidewalk repair, for a total of $125,000.
• $20,000 to the city of Ypsilanti, for projects to be determined.
• An additional $51,906 to Ann Arbor for public facilities projects, for a total of $101,905.
• Administrative costs account for 20% of the total amount awarded, or $480,019 – an increase of $35,971.

[.pdf file of final CDBG allocation for FY10]

During the discussion, Paul Schreiber reminded his fellow board members that they are a policy-making body, and that staff are responsible for managing the funds. If staff needs to make changes, he said, the board can vote to amend the plan at a later date.

Other Changes to Funding Allocations: Near North

At their March 23, 2010 meeting, the Urban County board had approved $500,000 in funding for the Near North affordable housing project, to be built on North Main between Kingsley and Summit. The original amount came from three funding sources: $315,536 from the federal HOME program; $154,464 from Ann Arbor’s sewer funds; and $30,000 from Neighborhood Stabilization Program (NSP) awarded to Ann Arbor.

Then earlier this month, the office of community development learned that a grant it had applied for two years ago on behalf of Avalon’s Near North project had been awarded, Callan said. The $250,000 is a HUD community housing development organization (CHDO) grant aimed at increasing the supply of energy efficient and environmentally-friendly housing.

Near North qualifies because it will be built to LEED standards, Callan said.

The original $500,000 funding level for Near North will remain unchanged, but the new grant allowed the board to shift $250,000 previously earmarked for Near North to other projects. A large chunk was allocated for rehab and refinancing of existing properties owned by Avalon, with other funding going to Community Housing Alternatives and Habitat for Humanity Huron Valley.

The funding sources for Near North are now: $250,000 from HUD’s “green” grant; $96,389 from the federal HOME program, and $153,611 from Ann Arbor’s sewer funds.

In addition to the Near North funding, at its March meeting the Urban County board had also granted Avalon a total of $695,467 in funds for the rehabilitation and refinancing of existing properties owned by the nonprofit . Sources for that were $617,404 from the federal HOME program; and $78,063 from the federal Community Development Block Grant (CDBG) funds.

Avalon had originally requested $814,800 for rehab and refinancing of existing properties. With funds freed up because of the “green” grant, staff of the office of community development recommended that Avalon now be funded to the full amount of its request. At its April 27 meeting, the board agreed – funding from the federal HOME program was raised to $736,737, with the $78,063 from CDBG funds unchanged.

In addition, funding for Community Housing Alternatives was bumped up from $420,000 to $480,000, and Habitat for Humanity Huron Valley’s homebuyer education program, which wasn’t previously funded, is now receiving $22,528.

Board members had few questions regarding the staff recommendations to the funding changes. Mike Moran, supervisor for Ann Arbor Township, asked whether the city of Ann Arbor’s sewer fund contributions were cash or a reduction in connection fees. “Why? Are they increasing yours,” asked Bill McFarlane, Superior Township’s supervisor. Moran laughed: “I don’t know – that’s why I asked.”

After the meeting, Callan clarified for The Chronicle that the sewer funds are specifically from the Walnut Ridge fund, managed by City of Ann Arbor public services unit. In 2000, the city reached an agreement with the developer of the Walnut Ridge residential development in Scio Township – in exchange for hooking up to the city’s sanitary sewer system, the developer agreed to pay $350,000 for use in affordable housing projects. Callan said that Carrot Way – another affordable housing project developed by Avalon Housing – has used some of these funds. When architectural drawings and engineering estimates are completed for Near North, Callan said, the office of community development will send a request to city council to approve the use of the sewer funds for that project.

At Tuesday’s meeting, Moran also asked whether the funded projects required compliance with the Davis Bacon Act, which mandates that public works projects pay prevailing wages. Thompson said that they were compliant. And any projects that received federal stimulus dollars were also required to comply with the “Buy American” clause of the American Recovery and Reinvestment Act, he said. So materials like drywall and cement would need to be purchased from American firms.

Administrative Costs: An Analysis

At the board’s March meeting, Barb Fuller – deputy supervisor of Pittsfield Township – had asked for more details about costs related to administering federal grants received by the Urban County. On Tuesday, Callan gave board members an analysis for administrative costs in the calendar years 2008 and 2009.

Different federal programs have different caps on the amount that can be used for administration, she said. CDBG allows for 20% of a grant to be used for administration, for example, while the HOME program allows for 10%. In 2008, administrative costs of $784,861 accounted for 12.03% of the total $6.357 million in funding managed by the office of community development. Last year, administrative costs totaled $1.007 million, or 14.82% of the $6.796 million in total project funding.

The increase in administrative costs in 2009 was due to ramping up projects funded by the federal Neighborhood Stabilization Act, Callan said. Other major efforts for the year included bringing the city of Ann Arbor into the Urban County – the city previously managed its own CDGB and HOME funds – and developing the model for integrated human services funding between Washtenaw County and city of Ann Arbor. The office also manages the county’s Barrier Busters program, which helps coordinate efforts of human services agencies.

“We’re working hard to manage these funds,” Callan told the board. “We don’t have a lot of fluff.”

Mary Jo Callan, director of the Office of Community Development, discusses proposed funding for housing projects at the Washtenaw Urban County meeting on Tuesday. At left are Ann Arbor city councilmember Margie Teall and county commissioner Leah Gunn, who chairs the Urban County executive committee. At right is Damon Thompson, OCD's operations manager. (Photos by the writer.)

The group also had a frank discussion about problems with struggling Gateway Apartments in Ypsilanti Township – the complex is operating at a loss and is putting strains on the nonprofit Avalon Housing, which took over management from the nearly-defunct Washtenaw Affordable Housing Corp.

In addition, Urban County members reallocated federal funds that had previously been earmarked to support a county land bank. The county’s board of commissioners voted to dissolve the land bank earlier this month.

Also approved during Tuesday’s meeting was the draft of an annual plan for July 1, 2010 through June 30, 2011. The plan outlines projects and a nearly $4 million budget from two federal programs for low-income neighborhoods. Avalon Housing’s Near North apartment complex, the Delonis Center homeless shelter, and an owner-occupied housing rehab program are among the projects being funded.

Staff of the Office of Community Development, a joint county/city of Ann Arbor department which among other things manages the Urban County projects, also reported on efforts to recruit more local governments to join the Urban County. OCD director Mary Jo Callan joked that there were two perception problems in marketing the Urban County: urban and county.

Background: What’s an Urban County?

It’s unlikely the group will change its name. “Urban County” is a designation of the U.S. Dept. of Housing and Urban Development, identifying a county with more than 200,000 people. With that designation, individual governments within the Urban County can become members, making them entitled to an allotment of funding through a variety of HUD programs, including the Community Development Block Grant (CDBG) and HOME Investment Partnerships. Those two programs provide funding for projects to benefit low- and moderate-income residents, focused on housing, human services and other community development efforts.

Washtenaw County and the townships of Ann Arbor, Ypsilanti, Pittsfield, Superior, Northfield, Salem, and Bridgewater got the Urban County designation in 2002. Later, the city of Ypsilanti and Scio Township joined, and just last year the city of Ann Arbor – which previously received HUD funding directly – joined as well, roughly doubling the amount of money available in the Urban County’s funding pool.

This map highlights the cities and townships that are members of the Washtenaw Urban County. (Links to larger image)

The funding comes with certain restrictions, and can only be used in certain low-income neighborhoods – as specified by HUD – or for residents who fall below a certain income level. Funds are allocated to specific projects by an Urban County executive committee, which meets monthly, with voting members from each participating local government. The group acts on recommendations made by the Office of Community Development, a joint county/city of Ann Arbor department.

The projects tend to be focused in the county’s urban areas, which have the largest clusters of low-income residents. But Leah Gunn, chair of Urban County executive committee and a county commissioner representing Ann Arbor, notes that since the group formed, all votes have been unanimous, gaining support from communities that don’t necessarily see direct benefit from the majority of allocations.

Gateway Apartments

At Tuesday’s meeting, the group was briefed by Jennifer L. Hall, housing manager for the Office of Community Development, about the situation at Gateway Apartments, a complex on West Michigan Avenue in Ypsilanti Township. It was the first and largest rental project undertaken by the Urban County, which allocated $310,000 in 2002-03 to the Washtenaw Affordable Housing Corp. WAHC, which owns Gateway Apartments, had used the Urban County money to rehab the 43-unit property.

WAHC had taken out a $1 million loan to buy the property, but now the nonprofit is “essentially out of business,” Hall told the Urban County executive committee. Avalon Housing, an Ann Arbor nonprofit, has taken over WAHC’s operations, including management of Gateway. WAHC’s board will be deciding how to dispose of its properties, Hall said. And if Avalon isn’t interested in buying Gateway or continuing to manage it, another buyer or property manager will need to be found.

The loan to WAHC is held by three banks: National City, Michigan Commerce Bank and the Bank of Ann Arbor. If a sale is made, the bank loan would be paid first. And if the sale to a party other than Avalon isn’t sufficient to cover the remaining loan balance plus the $310,000 Urban County grant, then the county would be on the hook for repaying that amount to HUD.

Why would HUD need to be repaid? Because the HUD funding stipulates that all of the apartments must be offered at affordable housing rates through December 2012. If not, the Urban County would be considered out of compliance, and would have repay the entire $310,000 to HUD, according to Hall.

Avalon estimated that it would need roughly $3 million to buy, rehab and operate the complex with supportive services, Hall told the executive committee. To achieve that, OCD staff had originally recommended putting another $740,000 of HUD funds – from its Neighborhood Stabilization Program (NSP) – into the complex, which would trigger an additional five-year HUD-mandated affordability period.

Avalon had planned to kick in another $430,000 from the Federal Home Loan Bank, Hall said. But that left roughly $2 million to find from other sources. When they first got involved with the project, it seemed likely that the Michigan State Housing Development Authority (MSHDA) would contribute the remaining funds. But given the economic downturn, MSHDA has prioritized investments for properties in which it already has a stake – and that doesn’t include Gateway.

Another possibility had been to seek funds from the second phase of grants with the federal Neighborhood Stabilization Program. The county applied, but didn’t receive an NSP2 award, Hall said.

For these reasons, Hall said they were withdrawing OCD’s $740,000 funding recommendation, not wanting to make a long-term commitment to what has become an even more problematic property that might soon face foreclosure.

There are several issues that make the property problematic. The buildings are in bad condition, Hall said, and Avalon – which provides supportive services to residents – isn’t generating enough revenue on it in rent to cover their expenses.

OCD director Mary Jo Callan said the current economy has added to Gateway’s problems – though not necessarily in a bad way for low-income residents. Rents in the local housing market are lower, in general, because of the economic downtown, which gives low-income renters more options, she said. In that context, Gateway is a less desirable option than others in the market, she said.

One factor making it less desirable are the many security problems at the complex, Hall said. The front building runs parallel to Michigan Avenue and shields a courtyard behind it, creating a security risk. Ideally there would be sufficient on-site staff to help avert crime, but the rents won’t support that expense.

At the March 23 meeting of the Urban County executive committee, Jennifer L. Hall, housing manager for the Office of Community Development, explains the status of funding for the Gateway Apartments complex in Ypsilanti Township.

Hall outlined several options for the executive committee to consider. One option is to find a new property manager who’ll take on the complex for the next 18-20 months, until the HUD-mandated affordability period ends. At that point, the property could be sold and the county wouldn’t be obligated to repay the HUD funds. OCD staff is talking with a potential property manager who might be able to minimize losses, while keeping rents in the affordable-housing range.

Mike Moran, Ann Arbor Township supervisor and an Urban County executive committee member, asked why Avalon Housing couldn’t just agree to manage the complex without offering supportive services.

Callan said that Gateway is one of three major properties that Avalon took over from WAHC, and all are problematic. [The other two major WAHC properties now managed by Avalon are in Ann Arbor, at 1500 Pauline and 701 Miller.]

Callan described Avalon’s approach as property management “with a social work touch.” For Avalon, she added, the Gateway property has become a drain on their day-to-day operations, as well as creating stress about their own identity. Avalon’s mission as a nonprofit supports extremely low-income residents by offering a range of services, such as help in managing substance abuse or mental health issues. Avalon doesn’t feel they can do that at Gateway in a financially viable way, and that’s why the nonprofit isn’t interested in taking on the property long-term.

If no solution can be found and the HUD funds need to be repaid, Hall said it would come out of the county’s general fund. But Leah Gunn, a county commissioner, noted that the county isn’t really in a position to provide those dollars, given its own budget challenges.

Moran later questioned why the $300,000 previously set aside for the land bank couldn’t be used to repay HUD for Gateway. [For details on the land bank, see Chronicle coverage: "A Night of Transitions at County Board."] Hall said those land bank funds, from a Phase 1 NSP award, must be used for revitalization projects – and they can’t use funds from one HUD program to pay back another HUD-funded program.

Karen Lovejoy Roe, Ypsilanti Township’s supervisor, said township officials have approached a few landlords, including McKinley, about taking over the property. There’s also the possibility that the township would condemn it, she said.

While the OCD staff and Avalon continue to work toward a solution, Hall said they were asking that the Urban County executive committee reallocate the $740,000 in Phase 1 NSP funds that had originally been earmarked for Gateway. Of that total, $640,000 would go to Habitat for Humanity of Huron Valley for housing purchases and rehabilitation, and $100,000 would be awarded to the Ypsilanti Housing Commission for Parkview Apartments, a 144-unit complex.

Later in the meeting, as part of its larger housing allocation vote, the executive committee unanimously approved the reallocation of Gateway funds as recommended by OCD staff. The vote also reallocated $300,000 previously set aside for the county land bank, directing $180,000 to Community Housing Alternatives for down-payment assistance and housing rehab. Another $10,000 will be allocated to Habitat for Humanity, and the remaining $110,000 will be split between Ypsilanti and Ypsilanti Township to pay for the demolition of blighted properties.

Also, $50,000 previously earmarked for the demolition of a house in Superior Township will now be used for demolition of property in Ypsilanti and Ypsilanti Township. Bill McFarlane, Superior Township supervisor, joked that it looked like his township, in this case, would be a “donor” – it’s a term that York Township supervisor Joe Zurawski has previously used, referring to members of the Urban County who have few projects in their jurisdictions that are eligible for Urban County funding.

Funding of CDBG and HOME Projects

Jennifer L. Hall, housing manager for the Office of Community Development, also presented funding recommendations for six affordable housing projects eligible for money from two federal programs: HOME Investment Partnerships and the Community Development Block Grant (CDBG). Both are administered through the U.S. Dept. of Housing and Urban Development (HUD).

Hall explained that the OCD staff had issued a request for proposals (RFP) in January and had received about a dozen responses. [.pdf file of the affordable housing RFP] A review committee had rated the applications on a range of criteria, including access to other reliable funding sources, a feasible timeline for the project, and evidence of collaboration with other agencies. Projects also needed to serve a certain number of low-income households within the jurisdictions of Urban County members, and compare favorably with other bidders based on cost per unit or level of services.

At Tuesday’s meeting, Hall reviewed the results of the review committee ratings. Funding was recommended for these projects:

• Habitat for Humanity of Huron Valley: $650,000 for acquisition and rehab of 13 units within the Urban County area. (Using $640,000 in funds reallocated from Gateway Apartments and $10,000 formerly earmarked for the land bank.)
• Community Housing Alternatives: $420,000 for homebuyer purchase and rehab of 15 units in the Urban County area. (Including $180,000 formerly allocated to the land bank.)
• Avalon Housing: $695,467 for refinancing and rehab of existing properties in Ann Arbor, totaling 46 units on Stimson, Ashley, Summit, Huron and Allen streets.
• Avalon Housing: $500,000 for construction of the Near North project on North Main in Ann Arbor.
• Arrowwood Hills Cooperative: $60,000 for down-payment assistance.
• Ypsilanti Housing Commission: $300,000 for acquisition and rehab of Parkview Apartments at 596 S. Hamilton in Ypsilanti, totaling 144 units. (Includes $100,000 formerly allocated to Gateway.)

Darrell Fecho, manager of Scio Township, raised concerns about the viability of the Near North project, given what the executive committee had just discussed regarding problems at Gateway Apartments. Damon Thompson, OCD operations manager, said that the $500,000 to Avalon Housing for its Near North project is contingent on results of a market study.

Fecho asked who would choose the firm to do the market study. Hall reported that the Michigan State Housing Development Authority (MSHDA) would make that decision, because it is also investing in the Near North project. Hall said Near North was very different from Gateway, in part because of its location in Ann Arbor. But if the market study doesn’t support the project, they won’t invest in it, she said.

Annual Project Plan

Damon Thompson, operations manager for the Office of Community Development, gave an overview of proposed projects for the coming fiscal year, beginning July 1, 2010, for the HOME Investment Partnerships and the Community Development Block Grant (CDBG) programs. The estimated allocation is $2,220,241 from CDBG grants and $1,685,812 from HOME.

Thompson cautioned that this was just a draft, and would likely be modified depending on actual allocations from these federal programs. The plan includes some of the projects that were awarded funding earlier in the meeting.

Proposed CDBG projects include:

• $673,494 for owner-occupied housing rehab provided by the OCD throughout the Urban County area.
• $333,036 for human services grants to the Ozone House (for transitional housing), SOS Community Services (for housing crisis services), Northfield Township‘s human services (for transportation) and the Shelter Association of Washtenaw County (for its Delonis Center night shelter).
• $401,600 for public improvement projects in Ann Arbor, Ypsilanti, Pittsfield Township, Ypsilanti Township, Superior Township and Northfield Township.
• $78,063 to Avalon Housing for multi-family housing acquisition and rehab.
• $20,000 to Ypsilanti for a neighborhood assessment of the Harriet Street corridor.
• $30,000 for demolition of three blighted residential properties in Ypsilanti.
• $180,000 for revitalization projects in Arbor Oaks, Arrowwood, Near North and the Maple corridor neighborhoods of Ann Arbor.
• $60,000 for rental code enforcement in several Ypsilanti Township neighborhoods, including West Willow, Grove Road, West Michigan and Ecorse Road.

Proposed HOME projects are:

• $60,000 in down-payment assistance in the Arrowwood Hills Cooperative of Ann Arbor.
• $200,000 in rental assistance for the Parkview Apartments in Ypsilanti, administered by the Ypsilanti Housing Commission.
• $19,674 to the Community Housing Alternatives of Ypsilanti for operating expenses.
• $50,000 to Avalon Housing of Ann Arbor for operating expenses.
• $14,616 to Michigan Ability Partners of Ann Arbor for operating expenses.
• $240,000 to Community Housing Alternatives for home-ownership assistance.
• $617,404 to Avalon Housing for rental rehab projects in Ann Arbor.
• $315,536 to Avalon Housing for construction of the Near North housing complex.

Barb Fuller, deputy supervisor of Pittsfield Township, asked about the administrative fees included in the budget. Of the estimated funding, 20% of the $2.2 million from CDBG and 10% of the $1.68 million from HOME – $444,048 and $168,581 respectively – will be allocated to the Office of Community Development for administrative costs.

Fuller asked what portion of OCD’s administrative budget this represented. Callan said she’d report back with exact numbers at a later date, adding that administrative costs for the office are roughly $1 million, or about 10% of their total budget.

Expanding Urban County Membership

Staff from the Office of Community Development are recruiting other municipalities in Washtenaw County to join the group, which currently consists of 11 units of government. Leah Gunn, who chairs the Urban County executive committee, reported that the Webster Township board has voted to join. When she added that their membership won’t take effect until July 1, 2012, Ann Arbor Township supervisor Mike Moran quipped, “Well, I guess it’s a little early to celebrate.”

Damon Thompson, OCD’s operations manager, clarified that they’re recruiting now in order to have all the documentation required by the U.S. Dept. of Housing and Urban Development done by June of 2011. HUD will process those documents, allowing new members to join the Washtenaw Urban County at the start of the following fiscal year: July 1, 2012. He reported that Augusta Township has said they’re interested, too.

Other eligible municipalities that aren’t yet members include Chelsea, Dexter, Saline, Manchester and Milan, and the townships of Dexter, Freedom, Lima, Lodi, Lyndon, Manchester, Saline, Sharon and Sylvan. Mike Moran asked, jokingly, whether there really was a Saline Township – he’d never seen officials show up at any of the meetings he attends. Saline Township does exist, Gunn confirmed – someone from the township had attended a county board of commissioners meeting last year to urge them to pass a millage supporting the MSU Extension program.

Thompson said the OCD sent out letters to all officials in non-participating governments about two weeks ago. They planned to follow up in the coming weeks, he said. Gunn urged other members to help recruit. “Talk it up among your fellow supervisors,” she said. “Tell them what a great group we are!”

OCD director Mary Jo Callan said that in large part, it’s a marketing issue. When people understand what the Urban County is, they are overwhelmingly positive, she said. “So it’s really a matter of perception – that’s why we’re starting two years in advance.”

Barb Fuller, Pittsfield Township’s deputy supervisor, suggested that OCD staff attend one of the monthly meetings of the county’s township supervisors, known as the CEO group. The next meeting is on April 1 at Scio Township Hall.

Gunn said it was clear that there was confusion over what the Urban County does, adding that her fellow commissioner, Jessica Ping, had asked how much it costs to join. [The interaction took place at the county board of commissioners March 17, 2010 meeting, where it was clarified that there is no cost to join.]

Hall noted that when a municipality joins, they get an automatic allocation of funds from the HOME Investment Partnerships and the Community Development Block Grant (CDBG) programs. All funds awarded to Urban County members are pooled, then allocated to specific projects by the executive committee, based on OCD staff recommendations. The disadvantage of joining, Hall noted, is that members can’t apply directly to the state for larger projects that use the same HUD funding sources – Chelsea has cited this as a reason for not joining.

During public commentary, local developer Peter Allen addressed the DDA board on the topic of the Library Lot consultancy. Visible in the background is mayor John Hieftje. (Photos by the writer.)

Biggest on the list of one-time expenditures was $2.28 million spread over three years for 150 additional multi-space pay stations to replace on-street parking meters. Twenty-five such pay stations were already installed over the summer.

Next-largest was $600,000 for water main replacement, timed to coincide with the Fifth and Division street improvements. That was followed by as much as $500,000 for the Near North affordable housing project. Near North has won site plan approval from the city council and now faces the challenge of obtaining tax-credit financing.

Smallest on the list of authorized one-time money was up to $50,000 for consultant support for the Library Lot RFP review process.

Also in the mix was the authorization to redirect revenue from the 350 S. Fifth Ave. (former YMCA) surface parking lot to the city of Ann Arbor. On Dec. 21, 2009 the city council voted to request the DDA take that action. What the DDA board actually authorized is a payment to the city per year of whichever amount is greater: (i) $100,000 or (ii) the net revenue from the lot, after installation and operational costs are recovered by the DDA.

The meeting also included the precursors of some eventual conversation about the role of the DDA’s executive committee and its ability to act on behalf of the whole board. That recalled a related issue still left over from last summer: Can the mayoral line of succession be invoked to fill the mayor’s spot at a DDA board meeting? 

Near North Affordable Housing: $500,000

The allocation of up to $500,000 from the DDA’s affordable housing fund to the Near North affordable housing project was a request that had worked its way through the DDA’s partnerships committee. From The Chronicle’s report on the DDA’s Dec. 2, 2009 board meeting:

Reporting out from the partnerships committee, Sandi Smith said that the Near North affordable housing development had asked the DDA for $500,000. Near North, which was approved as a PUD (planned unit development) by the city council at its Sept. 21 meeting, would include 39 total units – with 25 targeting incomes at less than 50% of the area median income (AMI), and 14 units of supportive housing targeting incomes at less than 30% of AMI.

Smith noted that the Near North development was within 1/4 mile of the DDA district, which was within the area where the DDA’s policy supports affordable housing. This was a policy adopted at the DDA board’s March 4, 2009 meeting. It was during meeting that former board member Dave Devarti was “channeled” in support of the idea of not limiting the range to just 1/4 mile – an idea that ultimately did not win the day.

The resolution before the board actually allocated $400,000 from the DDA’s housing fund, with an additional $50,000 to be awarded contingent on achievement of Silver LEED certification, with another $50,000 beyond that for achievement of Gold LEED certification. The money will be awarded only upon issuance of a certificate of occupancy.

The linking of DDA support to the achievement of the LEED standard, which reflects the energy efficiency of the building, was somewhat unsurprising.

Sandi Smith and Russ Collins co-chair the partnerships committee, which brought forward the recommendation to support Near North with up to $500,000 of funding from the DDA's affordable housing fund.

Why? Sandi Smith serves on the city council as well as the DDA board. And during city council deliberations on the Near North project, Smith had focused some of her questions on the energy efficiency of the building.

Its energy efficiency was presented as one of the public benefits needed to justify the variance in zoning required by the project. [Near North was brought to the council as a planned unit development (PUD) and faced considerable neighborhood opposition based on its size.]

Smith’s interest in supporting energy efficiency of buildings was also reflected Wednesday in her report to the board on the DDA’s energy saving grant program. In the second year of the program, 52 businesses had won approval for their applications, and so far all but four had selected an energy auditor.

The DDA’s affordable housing fund, out of which the grant to Near North will be funded, was established in 1997. In recent years, the DDA has allocated $200,000 per year to the fund. In the course of board deliberations, Smith would recall some frustration that depositing money into the fund did not itself necessarily equate to doing something for affordable housing – it was nice to have a project towards which the money could contribute.

DDA board member John Mouat quipped that the good news was that the DDA was spending the money for the next two years – and the bad news was that the DDA was spending the money for the next two years. But noting that he did not see some alternative project on the horizon, Mouat was content to support the allocation to Near North.

At Wednesday’s meeting, Michael Appel, executive director of Avalon Housing, the nonprofit organization that has partnered with Three Oaks Group on the Near North project, was on hand to answer questions from DDA board members.

Appel gave a brief description of why the federal tax-credit market – the mechanism through which Near North would be financed – was depressed. The whole market, he said, depended on buyers of tax credits. Historically, the buyers of large amounts of federal tax credits are entities that expect to have considerable federal tax liabilities (i.e., expect to earn large profits) for the period of compliance, which is 15 years. The number of such entities has dwindled since the economic downturn, he explained.

Still, Appel was optimistic that the location of Near North was a selling point. The worst case scenario, he said, was that the investor would be part owner of an apartment building in Ann Arbor. He reported that he’d spoken with three or four different investors in the last month.

The tax-credit market depends on the credits distributed by the federal government to the states, which then further allocate the credits to particular projects. In Michigan they’re awarded through the Michigan State Housing Development Authority (MSHDA, pronounced /mish-da/).

During deliberations, mayor John Hieftje cautioned that Ann Arbor’s location could be seen by MSHDA  somewhat negatively, because the cost of land acquisition and construction was relatively high compared to other locations in the state. That is why, he said, MSHDA would see additional local support, in this case from the DDA, in a positive light.

Appel described a timeline in which the city of Ann Arbor would be issuing an RFP for allocation of HOME funds in mid-February, for which Avalon will be applying. That would set them up for their tax-credit application at the end of February, he said.

After the vote, he told The Chronicle that they hoped for something in the same ballpark in HOME funds as they had been allocated by the DDA.

Outcome: The allocation of up to $500,000 from the DDA’s affordable housing fund to the Near North project was unanimously approved.

Library Lot RFP Consultant: $50,000

The resolution before the board allocated up to $50,000 for a consultant to help evaluate the merits of proposals for development of the city-owned Library Lot. A consultant would look at projects recommended for analysis by a committee that’s reviewing responses to the city’s RPF (request for proposals) at that site, where the DDA is building an underground parking structure.

Public Commentary on Library Lot Consultant

Two people spoke on the subject of the Library Lot during public commentary at the start of the meeting. The DDA would put together a request for qualifications (RFQ) for hiring a consultant, as well as provide the money to pay for it.

Peter Allen, a local developer, began by asking the board how many of them had ever attended a meeting of the International Downtown Association – several board members raised their hands. Allen is also an adjunct instructor for the University of Michigan’s Ross School of Business and Taubman College of Architecture and Urban Planning – for a recent class, some of his students developed proposals for the area around that site. [Chronicle coverage of those proposals: "Column: Visions for the Library Lot"]

Allen continued by saying that the best “course” he ever had was at an IDA conference at a session run by former urban planning professor Norbert Gorwic. He asked the DDA to consider three points as they select the Library Lot consultant. First, he said, consider that the development decisions on the Library Lot are 50-100 year decisions. He sketched one possible vision, which included the space becoming “the downtown Diag, the place you take your guests.”

He said it would be important to take infrastructure into consideration as the background. Among those infrastructure considerations, he said, was the possibility of building a north-south trolley to connect the Plymouth Road corridor to downtown and further south to State Street. The DDA is currently helping to fund a study of high-capacity transit on that corridor. He also stressed the impact of decisions by the AATA regarding its Blake Transit Center downtown – what if AATA elected to go with a dual spoke-and-hub system, with an additional hub near the medical center? [The additional hub that Allen was referring to is the yet-to-be-built Fuller Road Station.]

The second main consideration stressed by Allen for the Library Lot was the need for world-class architecture. It would have to be “the most extraordinary piece of design Ann Arbor has contemplated,” he said. He noted the plaza component of Library Lot need not be 100% of the area –  the 1,200-square-foot sculpture park in front of the People’s Food Co-op, he said, was very successful.

The third point mentioned by Allen as essential to consider was an inclusiveness of process. Every legitimate stakeholder needed to be talked to and listened to, he said.

Also speaking to the DDA on the issue of the Library Lot was Alan Haber, who helped craft one of the six proposals for the Library Lot. The proposal that Haber helped write, along with one other proposal, has been eliminated from further consideration by the RFP review committee. However, at the city council’s last meeting, the two council representatives to the review committee – Stephen Rapundalo (Ward 2) and Margie Teall (Ward 4) – indicated that they’d bring the suggestion to the committee to re-include the two eliminated proposals in the interview process. [Chronicle coverage: "Mixed Message from Council on Library Lot"] The two eliminated proposals envision the Library Lot primarily as open space.

Haber told the board that the minutes from the DDA’s November board meeting did not accurately reflect his public commentary. The board’s minutes, which they’d approved at their December meeting, read:

Mr. Haber introduced himself as a member of the Ann Arbor Committee for the Commons, and said that the group is interested in building a small community center on top of the new underground parking structure.

It was not a small community center, Haber said, but a large one that the Ann Arbor Committee for the Commons wanted to establish there. He said that he’d communicated with the executive director of the DDA, Susan Pollay, and that she’d shown him where the complete video of the meeting could be viewed on the DDA’s website.

[On the video, Haber says that the Committee for the Commons imagined the space "not for a big building, but for a small-scale development ... ," and then describes how the space would be a focal point for community gathering.  It's apparent that Haber's intent was to describe a community center encompassing the entire space, and that any smallness in size likely referred to actual buildings – artists studios, for example – that might be constructed.]

Haber told the board that he was expressing the view of the public, and that they wanted a public process for keeping public ownership of the parcel, which should remain primarily open and green space. He contended that if you ask people what they want, most everyone will say: a park. The commons concept of self-governance, Haber said, was an age-old and worthy one. He invited board members to become members of the Ann Arbor Committee for the Commons.

Board Deliberations on Library Lot Consultant

Board chair John Splitt, who serves as the board’s representative on the Library Lot RFP review committee, reported to the board the current status of the committee’s work – their elimination of two proposals. He also reported the suggestion that will come from the city council’s representatives to the committee at its next meeting to re-include those proposals in the interview process.

Board member Sandi Smith clarified with Splitt that the money being allocated for a consultant would not be applied to support the public process scheduled for Jan. 20. That’s the date set for interviews with developers and a public reception.

Board member Gary Boren emphasized that any consultant who might be selected “will not have any skin in the game.” Board member Joan Lowenstein offered that in the past some very good projects in the city had foundered on the financial ability of the developer to actually build the project. The consultant, she said, was meant to help analyze the financial component.

Board member Russ Collins emphasized that the decision about what went on top of the underground parking garage was not a DDA decision. He noted that the DDA had been encouraged to take a thoughtful approach, and that funding the consultant was their contribution to that approach.

John Mouat voted against the allocation of funding for a consultant on the Library Lot proposals. At right is mayor John Hieftje.

The question of who was making what decision was echoed in board member John Mouat’s comments. He said that he was generally “not enamored of the city’s RFP process.” While he supported the idea of the due diligence that a consultant would help provide, he was concerned that the DDA’s funding would contribute to a “muddying of the waters” with respect to the city and the DDA’s responsibility for the decisions.

Mayor John Hieftje said he also had some reluctance about the process. However, he said that the outcome of the 415 W. Washington RFP process – which he assumed Mouat was referencing – was acceptable. No one proposal had risen to the top, said Hieftje, and the review committee had had difficulty trying to get the three different proposers to work with each other. [Mouat served on the 415 W. Washington RFP review committee.]

There was brief discussion about how much of the $50,000 was likely to be spent. Splitt said it would depend on how many of the proposals the consultant was asked  to analyze – that number would fall between zero and six.  At one point, board member Keith Orr quipped, “So no more than $50,000 and no less than zero!”

From the DDA’s description of the consultant’s recommended tasks:

Determine if the projects submitted to the City are financially feasible and make economic sense in the Ann Arbor marketplace.

Determine if the developers who submitted proposals to the City are financially stable and have the capacity to construct and complete their projects as proposed.

Determine what the likely timing for each proposed project might be following selection by Ann Arbor City Council, including design development, securing financing, and construction.

Help the City determine which project will provide the maximum financial return to the City.

Help the City determine which project will provide the greatest community benefits.

Help the City determine which project will provide the greatest benefit to downtown.

Help the City create and deliver a public process that encourages community input and involvement.

Provide information on the impact of similarly scaled projects in similarly sized communities.

Assist the City as needed in negotiations with the selected project team.

Outcome: The board approved the funding for the consultant, with dissent from Mouat.

Parking Lot Revenues to City: $100,000 per year

At its Dec. 21 meeting, city council passed a resolution that requested the DDA to redirect net revenues from the 350 S. Fifth Ave. surface parking lot (the former YMCA site) to the city of Ann Arbor. Parking system revenues ordinarily flow to the DDA, with payments by the DDA to the city governed by a 10-year parking agreement struck in 2005. That agreement calls for the DDA to pay the city up to $10 million through 2015, and the DDA has already paid the city the full amount of that agreement.

The resolution before the board was different from what had been requested by the city council. Because the DDA calculated that the installation costs for the surface parking lot were around $400,000, there would effectively be no net revenue for many years. Because the intent of the council’s resolution was to start generating revenue for the city, the DDA’s resolution called for the DDA to pay the city the greater of two numbers per year: (i) $100,000 or (ii) net revenues, i.e.,  revenues minus installation and operating costs.

Available photographic evidence suggests that this board member is Keith Orr.

The DDA’s monthly parking report for November 2009 shows that the old YMCA lot generated about $25,000 in revenue, versus $5,000 for the same period in 2008. The jump in usage is due to the recent closure of the Library Lot as a surface parking lot to begin construction on the underground parking garage.

[In giving a status report on the progress of the underground garage construction, John Splitt – chair of the capital improvements committee – said that delays in getting utilities moved had delayed the start of earth retention work. But around Jan. 25 people could expect to see "the big drill."]

Board member Sandi Smith, who had initiated the proposal in her role as a city councilmember, said she appreciated that the goal of generating revenue to the city remained in the substitute resolution. Board member Keith Orr characterized the arrangement as the DDA simply taking longer to repay itself for the installation costs.

Outcome: The board unanimously approved the redirection of revenues from the former YMCA surface parking lot to the city of Ann Arbor.

Water Mains: $600,000

Timed to coincide with the Fifth and Division street improvements were the replacement of water mains under those streets, as well as behind the library off of William Street. The DDA had approved $226,000 for the work in August 2009. But when the work was bid, the actual costs for the Fifth and Division water mains exceeded estimates, and an alternative to replacement of the water main behind the library was developed. Under the new plan, the third water main will be placed under the planned Library Lane, which will be a mid-block cut-through between Fifth and Division streets.

[In giving an update on the Fifth and Division improvements, John Splitt said that work on Division was not yet complete but had wrapped up for the year. It would be finished in the spring, when work on Fifth Street would commence. Traffic lanes on Division, he said, would be reopened, likely in the next few days as soon as signage was installed telling people where they could park.]

Outcome: The board unanimously approved $600,000 for water mains without discussion.

Parking Pay Stations: $2.28 Million

In Roger Hewitt’s absence, Leah Gunn introduced the resolution out of the operations committee to purchase additional multi-space parking pay stations. Twenty-five of the ePark stations have already been purchased and installed in the downtown area. The resolution before the board called for an additional 150 stations to be installed over the course of the next three years – 37 in FY 2010, 75 in FY 2011, and 38 in FY 2012 at a total cost of $2.28 million.

Gunn described the public’s reception of the new pay stations this way: “We’ve found that everybody likes them.” Sandi Smith’s characterization was somewhat less sanguine, saying that she’d heard some complaints from people in the disabled community about difficulty in navigating to the stations.

Smith queried Joe Morehouse, deputy director of the DDA, about possible ways to address those concerns. He described how it was possible to pay using a cell phone, while still in the vehicle, without going to the pay stations at all.

DDA chair John Splitt holds a copy of a recent issue of "The Parking Professional," in which an article written by DDA deputy director Joe Morehouse is featured. At right is DDA board member Joan Lowenstein.

Later in the meeting, Morehouse’s work on parking demand management would be called out for special mention by board chair John Splitt. An article written by Morehouse had been featured in the December 2009 issue of “The Parking Professional,” Splitt reported, a publication of the International Parking Association. The lighthearted query from one board member about whether there’d been a centerfold was met with a response from another one: “No, it was just a spreadsheet.”

Board member John Mouat said he noticed that snow had been cleared from around the pay stations and asked who had been doing that. Mark Lyons, general manager of Republic Parking, confirmed that it was Republic Parking who did snow clearing around the pay stations.

Outcome: The board unanimously approved the purchase of additional parking pay stations.

Other Communications

There were several other briefings not related specifically to resolutions considered by the board.

Bylaws

A draft of the DDA’s bylaws came up for initial discussion only. The board focused on the role of the executive committee and its ability to act on behalf of the entire board between meetings. The executive committee had only acted in that capacity one time in the history of the organization, said executive director Susan Pollay – in connection with a loan to the city for acquisition of the old YMCA property.

Board member Gary Boren expressed concern about whether the executive committee could, in fact, be given that authority by the board – he wondered if that was permissible under the state enabling legislation for creation of the DDA. Further, he said, if a subset of the board’s membership was able to act on behalf of the entire board, then he thought the Open Meetings Act would likely apply to its meetings.

During the opportunity for public commentary available at the end of the meeting, Brad Mikus inquired as to whether the issue of a vote by an acting mayor had ever been resolved. Earlier in the summer, the question had arisen about whether Leigh Greden, then a councilmember representing Ward 3 and fourth in the line of mayoral succession, could cast a vote at the meeting. [Chronicle coverage: "Split DDA Board Agrees on Splitt"]

The response given Mikus was that it was not a bylaws issue, but that it was still unresolved and being looked at.

Downtown Citizens’ Advisory Council

Ray Detter gave his usual report from the Downtown Citizens’ Advisory Council, which typically meets the evening prior to DDA board meetings. He said that the council had talked a bit about the six proposals for the Library Lot, and had contemplated what might happen if all six proposals were rejected. In that case, Detter said, it would make sense to think of a more comprehensive approach to planning the entire area around the Library Lot.

Detter reported, however, that they’d spent the majority of their time talking about Courthouse Square, a housing development for seniors at Fourth and Huron. There have been numerous complaints from residents about security and conditions there. Detter called for the creation of a task force, including membership from the city council, the city attorney’s office, residents of Ward 1, residents of the building, the DDA, and the city/county community development office.

Detter said there were 10 residents of the building who suffered from mental illness, whose needs were being addressed and supported. However, he expressed concern that as more tenants were directed to Courthouse Square from the county’s shelter, they might need more support than could be provided.

Pedestrian Friendliness

Reporting out for the transportation committee, John Mouat said the committee had narrowed its focus on three items in trying to find low-cost, high-impact projects for enhancing the pedestrian experience downtown. The three projects are (i) minimizing sidewalk obstructions and getting bikes off sidewalks, (ii) trees and planter boxes/urban gardening, and (iii) trip hazard mitigation.

Mayor John Hieftje requested that board members consider having the transportation committee bring forward a recommendation for the DDA board to take a position on bicyclists riding on sidewalks. At the city council meeting on Monday, two councilmembers – Marcia Higgins (Ward 4) and Margie Teall (Ward 4) – had expressed their concern about bicyclist behavior, in particular on sidewalks.

Building Tour

Some of the board members had been on a tour of the municipal building addition currently under construction next to city hall. Joan Lowenstein reported that it was impressive how much was being accomplished on the reduced budget. As one example of some of the cost engineering, she cited the polished concrete that’s being used on some of the upper floors.

Present: Gary Boren, John Hieftje, John Splitt, Sandi Smith, Leah Gunn, Russ Collins, Keith Orr, Joan Lowenstein, John Mouat.

Absent: Newcombe Clark, Jennifer S. Hall, Roger Hewitt.

Next board meeting: Noon on Wednesday, Feb. 3, at the DDA offices, 150 S. Fifth Ave., Suite 301. [confirm date]