Aerial view indicating location of 278-280 Collingwood Drive.

The site plan calls for removing the existing second floor on the east side of the office building and constructing a 2,451-square-foot second floor over the entire building for office use. A new staircase will be added at the southwest corner of the building. The second floor will overhang the first floor along the front of the building and along part of the north side. An existing curbcut on the north side of the property will be removed. The current 22 parking spaces on the site will be reduced to 17.

Planning commissioners approved modifications to the city’s landscaping requirements for this site.

Total construction cost for this project is estimated at $300,000. The office building is located in Ward 4. Collingwood Drive is a street off of West Stadium Boulevard, just south of West Stadium’s convergence with South Maple Road. [.pdf of staff memo]

Planning staff had recommended approval of the site plan. It will be forwarded to the city council for consideration.

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

The board approved the 10-year lease of a county-owned Head Start building at 1661 Leforge Ave. in Ypsilanti to the Washtenaw Intermediate School District. [.pdf of lease agreement] The WISD is taking over management of the Head Start program from the county, which has administered it for over four decades. After considerable debate, the board made the decision in late 2011 to relinquish the Head Start program.

The county took out bonds to pay for the construction of the $2.29 million Head Start facility in 2002. Ten years remain on the bond repayment for a total of $1.66 million.

WISD will begin making payments in 2014. Annual payments vary, beginning with $166,862 by Oct. 1, 2014. [.pdf of rent payment schedule] After the final payment, the county would deed the Head Start building and surrounding 11-acre property to the WISD. During the term of the lease, WISD will pay for utilities and basic maintenance, but the county will be liable for structural issues with the building, including roof repairs, broken windows, and other repairs – unless the repairs are caused by WISD action.

In a separate resolution, the board approved a lease with Dahlmann Apartments Ltd. for space in the City Center Building at 220 E. Huron in Ann Arbor.

At its July 10, 2013 meeting, the board approved a broad strategic plan for county facilities. Part of that plan called for relocating the office of community and economic Development (OCED), office of infrastructure management, and the public defender’s office out of their current space in the county Annex building at 110 N. Fourth Ave. The lease approved on Aug. 7 will be for office space on the fifth and second floors of the City Center for the public defender and office of infrastructure management.

The county will pay $333,037 for the first year, with 3% increases each year after that. The term of the lease is nine years and five months, starting Sept. 1, 2013.

This brief was filed from the boardroom of the county administration building at 220 N. Main St. in Ann Arbor. A more detailed report will follow: [link]

The final resolution included a two-part amendment proposed by Andy LaBarre (D-District 7). He called for the creation of a 9-member advisory committee to guide the dispensation of the Platt Road site, which is located in his district. The space plan proposes demolishing the former juvenile center and exploring redevelopment of the site at 2260 and 2270 Platt Road for affordable housing, alternative energy solutions, and county offices. Details of how the advisory committee will be appointed, as well as the committee’s formal mission, will need to be worked out and will require approval from the board at a later date.

The second part of the amendment directed the staff to use the county’s existing vendor pool for work on these projects, whenever feasible. After some discussion, commissioners amended LaBarre’s amendment to designate using the vendor pool for projects under $100,000.

In addition to the Platt Road site, other projects in the plan include:

• At 200 N. Main in Ann Arbor, consolidate the land records from the building’s lower level to the 1st floor, and remodel the lower level to accommodate administrative offices.
• At 220 N. Main in Ann Arbor, repurpose space in the garden level, including redesigning conference room space.
• At 110 N. Fourth in Ann Arbor (known as the Annex), relocate the Office of Community and Economic Development, Office of Infrastructure Management, and the Public Defender’s office to other leased and county-owned space.
• At the county’s service center near Washtenaw and Hogback, redesign the Learning Resource Center (LRC) as a full conference center, providing county-owned space for large and small meetings. Also, make parking improvements, including adding 110 new spaces, rebuilding the lot between the LRC and the courthouse, and resurfacing the entry drive off of Hogback.
• At a location to be determined, develop a specialty vehicle storage facility for the sheriff’s office and other departments.

According to Greg Dill, the county’s infrastructure management director, no general fund dollars will be used for the projects, which are estimated to cost about $5 million. Funding will come from several sources: (1) $1 million from the 1/8th mill fund balance; (2) $650,000 from the facilities operations & maintenance fund balance; (3) $650,000 from the Office of Community & Economic Development reserves; (4) $500,000 from the tech plan fund balance; and (5) $2.2 million from the county’s capital reserves. Dill had briefed commissioners on the plan at a March 20, 2013 working session.

In addition to the projects listed above, other changes will be made to accommodate the county’s Community Support and Treatment Services (CSTS) unit, which provides contract services to the Washtenaw Community Health Organization (WCHO). The WCHO will pay for that facilities work, including moving the entire Adult MI program staff to the Annex at 110 N. Fourth; repurposing vacated space at 2140 Ellsworth for Youth and Family Services; and relocating all “service delivery” units to the 1st floor of the Towner II building at 555 Towner Street in Ypsilanti.

This brief was filed from the boardroom of the county administration building at 220 N. Main St. in Ann Arbor. A more detailed report will follow: [link]

Projects include:

• Demolish the former juvenile center and explore redeveloping the site at 2260 and 2270 Platt Road for affordable housing, alternative energy solutions, and county offices.
• At 200 N. Main in Ann Arbor, consolidate the land records from the building’s lower level to the 1st floor, and remodel the lower level to accommodate administrative offices.
• At 220 N. Main in Ann Arbor, repurpose space in the garden level, including redesigning conference room space.
• At 110 N. Fourth in Ann Arbor (known as the Annex), relocate the Office of Community and Economic Development, Office of Infrastructure Management, and the Public Defender’s office to other leased and county-owned space.
• At the county’s service center near Washtenaw and Hogback, redesign the Learning Resource Center (LRC) as a full conference center, providing county-owned space for large and small meetings. Also, make parking improvements, including adding 110 new spaces, rebuilding the lot between the LRC and the courthouse, and resurfacing the entry drive off of Hogback.
• At a location to be determined, develop a specialty vehicle storage facility for the sheriff’s office and other departments.

According to Greg Dill, the county’s infrastructure management director, no general fund dollars will be used for the projects, which are estimated to cost about $5 million. Funding will come from several sources: (1) $1 million from the 1/8th mill fund balance; (2) $650,000 from the facilities operations & maintenance fund balance; (3) $650,000 from the Office of Community & Economic Development reserves; (4) $500,000 from the tech plan fund balance; and (5) $2.2 million from the county’s capital reserves. Dill had briefed commissioners on the plan at a March 20, 2013 working session.

In addition to the projects listed above, other changes will be made to accommodate the county’s Community Support and Treatment Services (CSTS) unit, which provides contract services to the Washtenaw Community Health Organization (WCHO). The WCHO will pay for that facilities work, including moving the entire Adult MI program staff to the Annex at 110 N. Fourth; repurposing vacated space at 2140 Ellsworth for Youth and Family Services; and relocating all “service delivery” units to the 1st floor of the Towner II building at 555 Towner Street in Ypsilanti.

This brief was filed from the boardroom of the county administration building at 220 N. Main St. in Ann Arbor. A more detailed report will follow: [link]

The County Annex building at 110 N. Fourth was built in 1904 and houses several county units, including the public defender's office, the office of community and economic development, Project Outreach (PORT) and the Washtenaw Housing Alliance. Total annual operating costs were $407,206 in 2010. (Photos by the writer.)

The Washtenaw County board of commissioners were briefed on these plans at their most recent working session by Greg Dill, infrastructure management director. The March 8 briefing included an update on information technology infrastructure, which Dill also oversees.

Washtenaw County owns about 1 million square feet of building space and about 62 miles of fiber network. Building operating costs in 2010 – the most recent data available – totaled $9.979 million, including $1.62 million for utilities and $965,800 for security, primarily at the county courthouses.

Dill told commissioners that the goal is to be more strategic about the use of facilities, in part by maximizing occupancy at county-owned buildings and minimizing the amount of leased space. The county pays about $500,000 annually for two major leases in the city of Ypsilanti, both used for Michigan Works workforce development programs: at the KeyBank building at 301 W. Michigan Ave., and at 300 Harriet St. on the south side of town.

The space plan Dill and his staff are developing includes making better use of the county’s Zeeb Road facility, which has been partially vacant. In the short term, offices of the Washtenaw Community Health Organization will move there, freeing up space in their current location – at 555 Towner in Ypsilanti – for possible use by the workforce development programs. In the long term, the Zeeb Road site might be the future home for 911 dispatch operations, which the county recently consolidated with the city of Ann Arbor.

Two other properties are being evaluated for possible sale: (1) the vacant building and land on Platt Road, site of the former juvenile justice center; and (2) the Head Start building at 1661 Leforge in Ypsilanti. The county is relinquishing the administration of Head Start later this year.

Dill also talked about his goal of cutting annual operational costs by $1 million, through a combination of eliminating leases and creating energy efficiencies – migrating to LED lights, for example. Efforts to cut energy expenses were supported by several commissioners, as was the plan to hire an energy manager for the county. Commissioner Leah Gunn noted that several years ago the county had invested heavily in what’s known as the Chevron project, a multi-year contract aimed at cutting energy costs. She asked for an update on the effectiveness of that effort, which Dill said he’d provide.

County Infrastructure: An Overview

Greg Dill, infrastructure management director, has been working with his staff for several months on a space plan for  county operations. The March 8 briefing was his first formal report to the board since he was appointed to this position in September of 2011, overseeing the county’s facilities and information technology infrastructure. Dill is also part of a recently approved cross-lateral team of four top managers who report directly to county administrator Verna McDaniel and handle responsibilities previously assigned to the deputy administrator, a currently unfilled position.

Washtenaw County owns about 1 million square feet of building space and about 62 miles of fiber network. Dill told the board that since the early 2000s, the county has focused on adding capacity. Their building infrastructure has grown 25% since then. Now there’s more space than the county needs, he said. [link to .pdf map of county-owned and leased facilities][link to .pdf of detailed building inventory]

Dill also noted that facility considerations haven’t been part of the budget planning process, and the commissioners – as policymakers – haven’t received much feedback about that part of the county’s operations. “We hope to change that,” he said, with a charge to align the county’s infrastructure with the board’s policy direction, with internal and external stakeholders, and with declining financial resources.

The county needs to take a strategic approach to its infrastructure planning, Dill said, using a data-driven process that’s in line with the county’s broader goals. The approach needs to look at all infrastructure, including technology like computers, software, and both the wired and wireless networks.

There are opportunities for cost savings, he noted. Building operating costs in 2010 totaled $9.979 million, including $1.62 million for utilities and $965,800 for security, primarily at the county courthouses. The ability to find savings – in cutting energy costs, for example – will free up those financial resources to be used elsewhere, Dill noted. The county will be hiring an energy manager to focus on that effort, he said.

Dill outlined several initiatives for 2012, including a comprehensive building space plan; completing renovations at the downtown Ann Arbor courthouse; determining the future of the former juvenile justice center on Platt Road, which has been vacated; and enhancing security for the county’s technology systems, which is becoming a “nightmare,” Dill said.

There are several goals in developing a comprehensive building space plan, Dill said. He hopes to maximize occupancy at county-owned buildings, and minimize the amount of leased space. The county has two major leases in the city of Ypsilanti, both used for Michigan Works workforce development programs: at the KeyBank building at 301 W. Michigan Ave., and at 300 Harriet St. on the south side of town.

Other goals include finding cost savings, taking advantage of departmental consolidations or collaborations to make changes in infrastructure, and improving the delivery of county services to residents.

Greg Dill, standing, is Washtenaw County's infrastructure management director. Other staff members (seated, from left): Dave Shirley, operations and maintenance manager; Andy Brush, IT director; and Tom Fielder, technical operations supervisor.

The space plan under development focuses on four county “campuses,” Dill said: (1) the eastern campus, primarily 555 Towner, (2) the downtown Ann Arbor campus, including the Annex building at 110 N. Fourth, (3) the western campus, including the 705 Zeeb Road service center, and (4) the southern campus, including the former juvenile justice center at 2270 Platt.

There are two major leases on the eastern campus, he said, which are significant in terms of contract price. [Dill did not name those locations and did not mention the lease amount in his presentation. The building inventory report identifies the leased space as the KeyBank building at 301 W. Michigan Ave. and the 300 Harriet St. facility. Respond to a follow-up query from The Chronicle, corporation counsel Curtis Hedger provided more details about the leases. The KeyBank lease is $285,000 annually, and ends July 30, 2012. The Harriet Street lease runs through Oct. 31, 2014 at $150,000 annually, plus an $80,000 annual charge to cover taxes, trash, janitorial, utilities and other expenses.]

Dill told commissioners that he hopes to find space for programs within existing county-owned facilities – there are buildings that are under-utilized at this point. Ideally, he said, vacancy should be at about 80%, which would allow for sufficient flexibility to accommodate growth and restructuring.

In 2012, the space plan will include relocating the office of community and economic development (OCED), which was recently formed as the consolidation of three separate departments. Decisions will also be made about the former juvenile justice facility at 2270 and 2260 Platt Road, which includes a vacant 42,320-square-foot building on 10 acres of land.

In addition, staff of the sheriff’s office will be moving from the correctional facility at 2201 Hogback to the nearby 4101 Washtenaw facility, where offices for the sheriff’s Community Corrections division are located.

Major changes will also occur this year at the Zeeb Road building in Scio Township, Dill said. The office of the water resources commissioner – Janis Bobrin and her staff – will move from the second floor to the first level. That will allow the Washtenaw Community Health Organization (WCHO) to move into the second floor.

The Zeeb Road building would also be a perfect place for combined dispatch services and emergency services, because of the I-94 freeway access, Dill said. And there’s space available for special vehicle storage at that site as well, he said. Those possibilities will be explored in 2013 and beyond.

Also in the intermediate term is the status of the county-owned Head Start building at 1661 Leforge in Ypsilanti. Built in 2003, the 17,500-square-foot building on 10 acres of land is tied to the early childhood program, which the county has managed for four decades but is relinquishing later this year. Dill said the county needs to start making plans for the disposal of that asset, in case that’s the decision that the administration and board make.

Looking even further ahead to 2015 and beyond, Dill said he plans to take a strategic look at the county’s parking needs, the 14A District Court in Saline, and energy/sustainability issues, among other things.

Dill also reviewed goals for the county’s technology plan, which includes reducing long-term operating costs, and increasing reliability. Network security will remain an important priority. He noted that the county’s 62 miles of fiber network, connecting all of the county’s major campuses, also creates opportunities for collaboration and possible revenue, with other entities leasing the network. Dill estimated the county would see a return on its tech infrastructure investment within nine years.

Dill concluded by noting that the next steps for the space plan include incorporating the board’s feedback, and continuing to address identified priorities. He told commissioners that he plans to return to give regular updates at future working sessions.

County Infrastructure: Board Discussion

Commissioners asked a range of questions regarding the county’s infrastructure. This report organizes the discussion by topic.

County Infrastructure: Board Discussion – Departmental Moves

Conan Smith asked for more details about departmental moves that are already in the works. Dill explained that at the 705 Zeeb Road building, the staff of the water resources commissioner will move from the second to the first floor. The Washtenaw Community Health Organization (WCHO) will move into the second floor, relocating from their current offices at 555 Towner in Ypsilanti.

The Washtenaw Area Transportation Study (WATS) will relocate from the Zeeb Road building, where it leases space from the county, into another county facility – most likely the Annex building at 110 N. Fourth in downtown Ann Arbor. Administrative staff for the office of community and economic development (OCED) will likely move out of the Annex to the Learning Resource Center at 4135 Washtenaw.

With WCHO leaving the 555 Towner building, it frees up space there for the possibility of the workforce development staff to move out of leased offices and into Towner, Dill said.

Smith asked whether these relocations took employees into consideration, in terms of their travel to work. Dill replied that his staff works in partnership with other departments in looking at these space options, trying to take a holistic approach. If the moves are as strategic as possible, he said, that will minimize the need for future relocations.

Smith noted that at the Zeeb Road building, WATS is located next to the Washtenaw County Road Commission, which has a facility next door at 555 Zeeb. He was concerned that WATS would be moving away from its core function. He also wondered about the impact of OCED’s move out of downtown Ann Arbor.

Dill said the WATS move will actually assist them in meeting their federal mandates. Commissioner Yousef Rabhi elaborated, saying that the WATS director has been concerned about public accessibility, because the Zeeb location isn’t on a bus line. That issue will be resolved when WATS moves to downtown Ann Arbor, which is accessible via public transit.

Conan Smith responded to Rabhi saying that it seemed to him like a weak reason. He said he was more interested in the 300 hours that the staff spends on operational issues, not the three hours they spend in public meetings.

County Infrastructure: Board Discussion – Technology

Alicia Ping thanked Dill for the briefing – as a relatively new commissioner, she said, it was great information to have. She also praised the idea of merging the building and IT infrastructure into one department, calling the move “genius.”

Andy Brush, the county's IT director.

Dan Smith, who works in the software industry, asked if the county operates all 62 miles of fiber network mentioned in the report.

Andy Brush, the county’s IT director, said that county staff operates and monitors the entire network. It’s connected to the Merit Network – an Ann Arbor-based nonprofit that operates a statewide computer network – as well as to the city of Ann Arbor’s fiber network. Other governmental entities are interested in possibly leasing capacity from the county’s network, Brush said, including Livingston County and the state of Michigan.

In a follow-up email to The Chronicle, Brush elaborated on the leasing possibilities. The county is in conversations with the state about leasing fiber that would allow the state’s network to provide internet connections to state offices in Washtenaw County. It would allow the state potentially to lower costs and access higher bandwidth, Brush said.

Livingston County is also looking to connect its fiber network to the county’s network, Brush wrote. This would create opportunities for IT partnerships that aren’t possible now, and would allow Livingston County to connect to Lansing through a connection on Merit’s network.

At the March 8 briefing, Dill noted that in addition to managing the fiber network, the county’s IT staff also supports over 240 server-based applications, and about 1,600 computers.

Conan Smith said it’s important to understand that IT infrastructure isn’t any different than road infrastructure. It deserves the same kind of attention as other facilities.

County Infrastructure: Board Discussion – Energy

Dan Smith noted that with about $10 million in annual operating costs, finding just 10% in efficiencies would equate to $1 million in savings. Dill said he hopes to achieve that goal in 2013. [He indicated that some of the savings would come through eliminating leases – a cost not calculated into the operating expense total that was provided to the board.] D. Smith noted that although there are often upfront costs involved, the return on investment (ROI) is worth it. He asked how many years it would take to realize the ROI for some of these energy efficiency moves. Dill said it runs the gamut, and they’ll be measuring those savings.

Yousef Rabhi said the topic of energy touches at the heartstrings of his beliefs. The county needs to be at the forefront of energy efficiency and alternative energy as much as it can, he said, and he was glad to hear that Dill is on board with that. He also supported hiring an energy manager, noting that the city of Ann Arbor has someone in that position. [Andrew Brix is program manager for the city's energy office. Update: Brix left that position earlier this month. The city plans to hire a replacement.]

Dill replied that in the next update he plans to give, commissioners will hear more about the county’s energy initiatives. Plans are in the works to “green” the county’s infrastructure, he said. That might include installing solar panels on buildings with flat roofs, for example, or switching to LED lights. There are many ways to reduce the county’s carbon footprint as well as cut operating costs, Dill said. The county can also be a leader in helping other local government with these efforts, he added.

Rolland Sizemore Jr. observed that flat roofs at the Annex and circuit court buildings could also be made available for employees to take breaks outside. He said he’d like to get employee input on that.

Leah Gunn noted that several years ago, the county invested in what’s known as the Chevron project – a multi-year, multimillion-dollar effort to cut energy usage in county facilities. It would be good to know how that’s paying off, she said.

By way of background, the board was last briefed on the Chevron project at a May 20, 2010 working session. In the summer of 2004, the board authorized a $6.088 million long-term contract with Chevron Energy Solutions. The company’s efforts under the contract, financed by a 20-year bond, consisted of 26 energy-efficiency projects at 18 county facilities. The projects included replacing boilers and chillers, installing new controls for HVAC equipment, replacing air handlers and rooftop units, upgrading lighting and adding insulation, among other things. Chevron also agreed to track energy usage for four years after their work was completed – that tracking period ended in July 2010.

At the March 8 working session, Rob Turner noted that he works as an electrical contractor, and energy savings is one of the biggest aspects of his job. But there needs to be balance, he said. Alternative energy doesn’t provide the biggest return on investment, he said. The biggest savings come from energy conservation. He noted that the Chelsea school system, where he served on the school board for nine years, took out a bond to invest in conservation measures, including lighting systems and window replacements. In 2010, the district spent the same amount on energy as it did in 2004 – despite significant increases in the cost of energy.

Commissioner Yousef Rabhi chaired the March 8, 2012 working session. Rabhi, a Democrat, apologized for wearing his "Rick Santorum memorial sweatervest."

Turner also supported hiring a county energy manager, saying that the position will pay for itself through savings in energy costs.

Later in the meeting Rabhi responded to Turner’s remarks. he noted that the dollar return on energy investment is important, but it’s also important to recognize the value of reducing the county’s carbon footprint. It might not be of immediate importance in terms of finances, but it’s of long-term value for the future of Earth, he said.

In response to a query from Rabhi, Conan Smith noted that the board had created an energy committee. [The committee was created in December 2011, to provide direction in developing a county energy policy. Having such a policy is a condition to receive federal Energy Efficiency and Conservation Block Grants. The board appointed commissioners Rob Turner, Alicia Ping, Wes Prater and Yousef Rabhi to the committee, but it has not yet met.]

Rabhi suggested that the committee work with the new energy manager and give input on efforts in that area. Dill indicated that he’s working closely with Tony VanDerworp, who has overseen the county’s energy programs.

County Infrastructure: Board Discussion – Leases

Alluding to a comment made earlier in the meeting by Alicia Ping, Leah Gunn told Dill that old commissioners like her also find this information valuable – the remark drew laughter from her colleagues. Gunn then said she wanted the county to get out of leased space. The county should only lease a facility if it’s absolutely necessary, she said.

Ping also voiced her support for eliminating leases – she said she thought it went without saying. Dan Smith echoed that sentiment, saying he was glad the county is moving in that direction.

Rob Turner serves with Rolland Sizemore Jr. on the space plan committee that’s been working with Dill and his staff. Turner said that he and Sizemore have been clear about the desire to reduce the number of leases, but that it needs to be handled in a wise way so that residents maintain access to services.

Felicia Brabec agreed with the goal of eliminating leases, but wanted to make sure that residents who use the services at these locations won’t be impacted. Dill said the main thing is to make sure that any new location is also located on a bus line. Programming aspects are key in making decisions about any of these moves, he said. In almost all cases, access will be improved.

County Infrastructure: Board Discussion – Dispatch

Felicia Brabac asked for more information about 911 dispatch moves. Didn’t the county dispatchers relocate recently? she asked. [By way of background, county dispatchers co-located to a joint dispatch operation at the city of Ann Arbor's #1 Fire Station in 2010. Last year, both the city council and the county board approved consolidation of those operations – the city is contracting with the county, which will manage dispatch for both entities.]

Dill said the long-range plan has always been to move into county-owned space, and the Zeeb Road facility is the most logical location. There wasn’t a specific timeline associated with this move, he said. It’s something that needs to be discussed in greater detail.

Dan Smith recalled that new equipment would be needed for the combined dispatch operations, and clarified with Dill that a future move to Zeeb Road would likely be keyed to bringing that new equipment online.

Dill confirmed that a key decision point will come when the dispatch operations, managed by the sheriff’s office, will replace their phone system. It’s important to coordinate the financial resources for a move, he said, working with the sheriff’s office and the city of Ann Arbor.

County Infrastructure: Board Discussion – Head Start

Felicia Brabec asked for more information about the Head Start building. By way of background, the county is turning over the Washtenaw Head Start program to federal officials, a move that commissioners had approved last year as part of the budget process. The county will end its 46-year affiliation with Head Start on July 31. The county owns the Head Start building at 1661 Leforge Road in Ypsilanti. It owes about $2.6 million on the bond and makes $167,000 in bond payments annually at the building. The bond payment schedule runs through 2022.

Dill said his staff is looking at several options for the building. The county needs to be able to respond to a variety of scenarios – that might mean selling the building, he said. [Federal officials are handling the process of finding another entity to manage Head Start – possibly the Washtenaw Intermediate School District.] The county administrator has been provided with information that would allow the county to market the building, if that decision is made. Dill’s staff is also prepared to continue operating the building, if it is leased to the next entity that runs Head Start.

Yousef Rabhi said he hoped the Head Start program could stay at its current location. It’s important for children and parents to come to that same spot as though nothing has changed, he said. Brabec agreed with Rabhi’s comments. Anything the county can do to lessen the anxiety for Head Start parents and children is important. ”They already have to manage a lot,” she said.

County Infrastructure: Board Discussion – Chelsea Courthouse

Wes Prater wondered if there was still the possibility of moving the Chelsea courthouse, located at 112 S. Main in Chelsea, into the Zeeb Road facility. The courthouse houses operations for the 14A-3 District Court. Rob Turner, the commissioner whose district includes Chelsea and much of western Washtenaw, said he would be meeting with Chelsea’s mayor and city administrator to discuss that subject. It would be a big savings, he said.

The court really serves all of the county, Turner noted. If the county were to move the court, they’d save money by eliminating an operating expense, and would get proceeds from the sale. The city of Chelsea would benefit because the property would return to the tax rolls, assuming it would be bought by a private entity. [The historic building was constructed in 1901 and has an insured value of $2.56 million, according to the county's building inventory report.] It would be a win-win situation for both governments, Turner said.

County Infrastructure: Board Discussion – Preventive Maintenance

Dan Smith said he appreciated the notes in the building inventory report, which included information about how each building is used, as well as its condition. [link to .pdf of detailed building inventory report] He noted that when he served on the Northfield Township board, the township had dealt with a building that had fallen into disrepair. It can happen more quickly than people expect, Smith said, and he wondered about the county’s preventative maintenance plan.

Dill said that many public agencies like to build a structure, use it, then tear it down and rebuild another one. The average life of a building is 40-50 years, but there’s value in extending it to 60-70 years, he said. The staff is structured around that goal, he said, and preventive maintenance is important for that.

Dave Shirley, operations and maintenance manager, said that there’s a program to “touch” each county asset multiple times a year. That approach has saved tremendously in operational costs, he said. IT manager Andy Brush said a similar program is in place for the computer equipment.

Dan Smith said he was glad to hear it. Capital costs can be huge, so it’s good not to incur those expenses, if possible.

County Infrastructure: Board Discussion – Platt Road Property

Dill mentioned that one way to keep pressure off of the general fund is to dispose of the property at Platt Road, the vacant building and 10 acres of land south of Washtenaw Avenue where the juvenile justice center was previously located. Money from that sale could be used to fund infrastructure moves, he said.

Yousef Rabhi noted that the Platt Road property is in District 11, which he represents. He said he’s spoken to residents about what they’d like to see there. He’d held a public forum at that location that had a good turnout. It seems like the county is talking about the sale of that property as a fait accompli, he said. But there needs to be a robust discussion about it and look at all the options.

The overwhelming majority of residents are in favor of keeping the property as public land and greenspace, Rabhi said. It would be a good fit with the nearby County Farm Park at Platt and Washtenaw. In his ideal world, the land would be retained by the county and used for alternative energy projects or agricultural demonstrations. He said he realized the county doesn’t have financial resources to do something like that at this point, but at minimum he’d like to see the county keep the land, possibly managed by the parks department.

Dill said the county administrator has asked for recommendations about the property, and community input would be part of any decision. Conan Smith, the board’s chair, asked that any decision about the property be brought to the board for approval.

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While the city and the DDA have achieved much agreement on the non-monetary details of the arrangement, Wednesday’s board meeting left the financial piece still unclear.

Keith Orr pores over the figures under various scenarios for the new contract under which the DDA would operate the public parking system. (Photos by the writer.)

The board discussion included a focus on the contrast between the combined fund reserve of the DDA – which includes those funds it collects as a tax-increment finance authority – and the reserves of just the public parking fund. Sandi Smith, who’s a DDA board member and an Ann Arbor city councilmember, stressed throughout the conversation that it’s not just the overall fund balance, but the public parking fund balance itself that needs to be monitored.

Last week, the board had come to a consensus that the public parking system could absorb a payment to the city equal to 16% of gross parking revenues in every year of a 10-year contract, which represented a revision upward from its previous position of 14% in the first two years, followed by 15% in subsequent years.

After lengthy back-and-forth, the only consensus reached by DDA board members was that they were not prepared to revise their position upward (again) to meet the city’s request that the city be paid 16% of the public parking gross revenues in the first two years of the contract, but 17.5% in remaining years. Mayor John Hieftje, who serves on the DDA board, was the lone voice of support for that position.

The mayor also found himself somewhat isolated on another issue in front of the board at its Wednesday meeting – the only action item on the agenda. The board voted to sign a new, more favorable lease agreement for its roughly 3,000 feet of office space at 150 S. Fifth Ave. for a term of five years.

Although the mayor voted with the rest of the board in authorizing the lease agreement, he had announced at the city council’s Monday, April 4 meeting that he would be asking his fellow DDA members to consider moving into space that’s currently being renovated in the city hall building. Two days later, at Wednesday’s DDA board meeting, the mayor appeared to understand that there was little enthusiasm on the board for the move, based partly on the fact that it would cost the DDA more in the short term.

At the meeting, the board also heard its usual range of reports and communications, including an update from DTE on the addition of a new substation near the Broadway bridge, to meet increased demand for electricity.

City-DDA Parking Contract: History

The current 10-year contract, under which the DDA operates the city’s public parking system, expires in 2015 – with an option for the DDA to renew through 2018. That contract calls for the city to be paid $1 million in “rent” per year out of the public parking system, plus additional money into the street repair and maintenance fund totaling roughly $850,000.

A provision in the contract allows for the city to request that a double payment of $2 million be made in any one year out of the parking system, provided that the total amount in rent paid over the contract period does not exceed $10 million. When the contract was signed in 2005, then-city councilmember Leigh Greden told the DDA that it was only due to the dire financial condition of the city that year that the double payment was being requested in the first year of the contract – the double payment was not assumed to extend beyond that first year.

However, the city has requested the double payment of $2 million over each of the first five years of the contract. And last year, the DDA board authorized an additional double payment of $2 million not required by the contract, bringing the total rent paid to the city out of the public parking system since 2005 to $12 million. [See Chronicle coverage: "DDA OKs $2 million Over Strong Dissent"]

Newcombe Clark (far left) and Roger Hewitt (far right) point at a list of different payments made out of the public parking fund to the city. Turned in their seats looking at Hewitt are John Splitt and Gary Boren.

In addition to that money, over the last two years the DDA has agreed – outside the context of that contract – to donate proceeds from the 415 W. Washington and Fifth & William (the old YMCA) parking lots to the city. That move was motivated by a desire of the DDA to forestall the installation of parking meters by the city of Ann Arbor in residential neighborhoods to generate direct revenue to the city’s general fund budget. The city made that move as a part of its FY 2009 budget, approved in May of that year. By providing revenues that would at least partially replace money the city thought it could generate through meter installation, the DDA reduced the pressure to install the meters.

The DDA opposed meter installation at those locations, partly due to skepticism that they would actually generate very much revenue for the city, partly based on the fact that the DDA believed the city did not have the authority to install such meters, and also that the residential locations were unsuitable for parking meters.

[More background on the meter installation in previous Chronicle coverage: "City-DDA Parking Deal Possible"]

City-DDA Parking Contract: Negotiations, Outline

The negotiations between the city and the DDA are being handled by two “mutually beneficial” committees – one composed of Ann Arbor DDA board members and the other made up of city councilmembers. On the council’s committee are councilmembers Carsten Hohnke, Margie Teall and Christopher Taylor. Serving on the DDA committee are Gary Boren, Russ Collins, Roger Hewitt and Sandi Smith. The committees began meeting in public view in June 2010, after a “work group” had met privately starting in January of that year.

The original target date for a completed new parking agreement was Oct. 31, 2010. The two mutually beneficial committees had begun meeting on a once-monthly schedule, but at the urging of Susan Pollary, executive director of the DDA, they increased their meeting frequency to twice monthly, beginning in late summer 2010. And over the last several weeks, the two committees have been meeting at 7:30 a.m. every Monday morning trying to finalize details of the contract.

The work group that had met out of public view in the early part of 2010 produced a term sheet in spring 2010 to serve as an outline to the negotiations. It was on the basis of that term sheet that the DDA agreed to the extra double payment of $2 million last year. [See Chronicle coverage: "DDA OKs $2 Million Over Strong Dissent"].

A key concept of the term sheet was that the city would be held harmless financially. Other main points of the term sheet included [.pdf of complete term sheet]:

Parking Enforcement [...]
Throughout the City, the DDA will have primary, but non-exclusive, responsibility for enforcement of public-parking-related rules and regulations, including without limitation, expired meters, parking structure rule compliance, loading zones, and established residential parking permit zones (“Parking Codes”). [...]
Community Standards Code Enforcement in the DDA [...]
Within the DDA, the DDA will have primary, but non-exclusive, responsibility for enforcement of City ordinances now generally enforced by community standards officers, including without limitation, ordinances related to sidewalk clearance, debris, graffiti, and alley upkeep (“Community Codes”). [...]
Services in the DDA [...]
Within the DDA boundaries, the DDA will have primary, but non-exclusive, responsibility for delivering the preliminary list of services identified on “Exhibit 1”, attached. The DDA will deliver the identified services with at [sic] the identified service levels and frequencies. Generally, these are all services delivered currently delivered [sic] by the City within the DDA boundaries, excluding public safety, street clearing, and other services as identified in “Exhibit 1”. [...]
Development of City-owned Property Within the DDA District [...]
The working group envisions that the DDA would serve as a visioning, initiation and implementation engine for development of City-owned property within the DDA district. The nature and extent of this role will be discussed, considered and, if approved, implemented in parallel to any omnibus agreement, but would not be part of that agreement. [...]

The final point of the term sheet was, to some extent, addressed with the passage of a city council resolution on April 4, which tasked the DDA with leading a process to explore the future use of four parcels located in a rectangle bounded by Ashley, Division, Liberty, and William streets.

The middle two term sheet points – non-parking code enforcement done by the DDA and additional service enhancement to be performed by the DDA – were shed from the discussion fairly early in the negotiations.

The first term sheet point – that the DDA would enforce parking rules and write tickets – also did not make it into the draft contract. But vestiges of that idea remain in different places in the draft. The basic idea was that the DDA would like to have more direct influence on setting the parking policy – rates and hours of enforcement – and would like to maintain a more systematic communication with the city about parking policies. This basic notion was expressed at a city council meeting on April 19, 2010 when the DDA delivered a parking report to the city council. That parking report had been prompted by a Dec. 21, 2009 city council resolution that had contemplated, among other things, extending hours of parking meter enforcement past 6 p.m. – the evening enforcement provision did not pass on that occasion.

Some key features of the new draft contract include:

• Parking rates/hours to be set by DDA. The city council would not have a veto. [Currently the city council holds a veto on rate changes.] The contract stipulates that rates won’t be changed permanently without first: (1) announcing and providing written communication regarding details of the increase at a DDA board meeting; (2) at a subsequent board meeting, providing all members of the public a chance to speak before the DDA board on the matter – a public hearing; and (3) delaying any vote on the rate change until the board meeting following the public hearing.
• DDA to assist with directing parking enforcement. The contract calls for a Standing Committee to be formed that will meet for regular consultation about parking enforcement. The committee will consist of the executive director of the DDA, the parking manager, deputy police chief, community standards supervisor, and the city’s public services area administrator. This addresses the concern expressed by the DDA that while it already had the authority to set hours of enforcement (for example, for later in the evening), it could not actually schedule community standards officers to do the enforcement. [Currently, many downtown parkers pay for meters past 6 p.m. even though the meters aren't currently enforced that late.]
• City to report information to the DDA. The contract would call for the city to provide regular reports on its enforcement activity – data like how many citations have been issued and in which zones. The contract would also call for the city to provide reports to the DDA on its street maintenance activity in the downtown.
• Parking area defined. The contract provides a map designating exactly which areas the DDA has authority to decide placement of parking meters. Not included in the DDA parking area are any of the residential parking permit areas – a program over which the city will maintain its current control.

Leaving aside the financial aspects, the two mutually beneficial committees appear content that the new contract as drafted provides a level of clarity and communication for the operation of the public parking system that is a great improvement over the old contract.

City-DDA Parking Contract: How Much Money?

The two committees reached early agreement about the structure of the financial arrangement by which the city takes money out of the public parking system: It should be a percentage-of-gross formula that would aggregate all of the payments currently made to the city out of the public parking system. They disagree about how large the percentage should be. [Not included in the percentage-of-gross is a $500,000 payment the city receives from the DDA's TIF capture, which pays for part of the bonds issued to finance the city's new municipal center.]

On any of the percentage-of-gross scenarios, the city could essentially allocate its share of the public parking system revenues to whatever expenses it deems appropriate – its general fund, for example. But the city would presumably spend some fraction of the money on street maintenance in the downtown district – as a condition of the new contract, the city would be required to provide reports on its maintenance of streets where on-street metered parking is available. The term of the agreement has been discussed at varying lengths, but appears to have settled at around 10 years.

A fleeting part of the discussion in October 2010 were percentage-of-gross figures as high as 20% per year and as low as 10%. Fairly quickly, the city council’s committee settled into a position of 17.5%, except for the first two years of the contract, for which it was content with 16% – the 16-16-17.5 position.

The DDA’s committee consulted its full board at a Jan. 5, 2011 retreat, during which the board modeled the different percentage scenarios against its 10-year plan – a spreadsheet it uses to make financial projections. As part of any scenario, the DDA will be deferring some maintenance on the parking structures, in order to accommodate the city’s request for a new contract. The specific items to be deferred have been reviewed by the DDA’s engineering consultant.

All scenarios also assume that at least part of the down payment and bond payments for the underground parking structure currently under construction will be paid out of the DDA’s tax capture fund – its TIF fund. [During his campaign for reelection in 2010, mayor John Hieftje defended himself against criticism over the use of bonds to pay for the underground parking structure, saying the bonds would be paid from parking revenues. For discussion of the use of TIF in connection with payments to the city out of the parking fund, see "Column: Impact of City-DDA Parking Deal"]

At its Jan. 5 retreat, the board came to a consensus that the public parking system could absorb a percentage-of-gross figure of 14% for the first two years of the contract and 15% for the years thereafter – the 14-14-15 position. At the Monday morning mutually beneficial committee meeting on March 28, the council’s committee members told their DDA counterparts that they wanted the full DDA board to reconsider its view – the city was still committed to the 16-16-17.5 position.

So at an operations committee meeting two days later on March 30 – attended by 10 of 12 board members – the DDA board considered the city’s request and came to a consensus that the public parking system could absorb a payment to the city in each year of the contract equal to 16% of the gross parking revenues – a flat-16 scenario.

The following Monday, April 4, when presented with the flat-16 offer by the DDA committee, the city council committee insisted on its 16-16-17.5 position, and asked that the committee take its request back to the full board again.

So at its Wednesday, April 6 regular board meeting, the DDA board informally entertained that request, conveyed through the council’s committee, to rethink its earlier consensus compromise flat-16 position.

City-DDA Parking Contract: April 6 DDA Board – Taxes, Parking

At the April 6 board meeting, Sandi Smith – who serves on both the DDA board and the Ann Arbor city council – added to the mix of alternatives a proposal that would split a 10-year contract period in half: 16% of gross parking system revenues would be paid to the city for the first five years of the contract, and 17.5% would be paid in each of the five remaining years. It’s a half-and-half scenario.

In weighing how to give direction to Roger Hewitt – who was going to be meeting with the city council’s mutually beneficial committee on Friday, April 8 – the Wednesday board meeting discussion wound through familiar issues: (1) appropriate levels for fund balances; (2) the relationship of the DDA to the city; and (3) which fund balances matter.

Lodged firmly in the memory of DDA board members are remarks made by the city’s chief financial officer, Tom Crawford, at the Jan. 5, 2009 city council meeting, when the size of the Fifth Avenue underground parking garage was trimmed back by 100 spaces, so that it no longer extended down to William Street. [The reduced project means that additional construction would need to take place to achieve an underground connection to any future building on the old Y Lot or to the new Blake Transit Center, which is currently being designed.]

From The Chronicle’s report of the Feb. 17, 2009 Ann Arbor city council meeting:

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

The 15-20% figure appears to be more of an ideal, whereas the practical recommended minimum range – used, for example, in the city’s own budget planning – is 8-12%. [More detail on the fund balance question in previous Chronicle coverage: "Ann Arbor DDA Barely Passes Budget"]

On the 16-16-17.5 scenario, the overall combined reserve balance across all of the DDA’s funds would dip to 7.4% of expenses in 2016, which is less than the lower limit of the 8-12% recommended range used by Crawford. On the flat-16 scenario, the lowest overall fund balance would be 10.9%.

At Wednesday’s board meeting, mayor John Hieftje responded to concerns about the DDA’s overall fund balance by reiterating his position that the DDA is part of the city. [This position was also apparent in his expressed interest in having the DDA move its offices into newly renovated space in city hall.]

Hieftje said the city is responsible for backing up the DDA. He compared the city’s role to that of a parent – the DDA is “like a child,” he said, whose debt the city must ultimately cover. He felt comfortable with the overall fund balances on the 16-16-17.5 scenario. Hieftje was also critical of the DDA’s conservative estimates of the growth of the TIF, citing the additional tax revenue the DDA would be capturing due to two specific projects – 601 S. Forest and Zaragon Place II.

Countering the mayor’s emphasis on TIF as a means by which the DDA could shore up its overall fund balances was Sandi Smith. At Wednesday’s board meeting she drew out a contrast between the overall fund balance, which she allowed was important to watch, and the parking fund itself. She’d made the same point a week before at the DDA’s operations committee meeting. The 16-16-17.5 scenario, she contended, made it impossible to use the public parking system as an economic development tool.

On any of the scenarios that begin with a 16% payment, the parking fund reserves would dip to zero in the first two years of the contract. In the city’s preferred 16-16-17.5 scenario, the parking fund reserves would stay below 8% from 2014-2018, with a low of 4.2% in 2015.

[Note: The DDA leases some private lots for public parking from owners other than the city; revenues from those lots are not included in the gross to which the percentage-of-gross would apply in the new contract. In spreadsheets compiled by The Chronicle using DDA data, this difference is reflected in two separate revenue totals – one for total revenues, and the other for revenues that don't include rent paid by the DDA to lease privately-owned parking lots.] [.pdf of flat-16 scenario] [.pdf of 16-16-17.5 scenario][.pdf of half-and-half scenario] [Google Spreadsheet]

Not a prominent part of the DDA board’s discussion on Wednesday was the idea – from the term sheet produced by the working group a year ago – that the city should be held harmless compared to the way it has withdrawn money from the public parking fund in the past. It has been a frequent point made by city council committee members in their discussions with their DDA counterparts over the last several weeks.

For the council’s part, of crucial interest are the first two years of the contract, because the city does its budget planning in two-year cycles – 2012 is the first year of a two-year cycle, and the budget for that fiscal year, which begins July 1, 2011, is now being prepared. Councilmembers point out that compared to previous practice, the roughly $2.5 million the city would receive in the first year (based on percentage-of-gross payment of 16%) reflects a difference of about $300,000 compared to what the city has historically received. That’s part of the reason they are keen to see that difference made up in the third year of the contract.

By The Chronicle’s calculation, for the nine years from 2012-2020, the city would receive about $26.5 million based on past habit and practice. That’s based on $2 million of rent plus an escalating payment into the city’s street repair fund, starting with $835,000 in the first year. That compares with $27.4 million the city would receive over the same period, based on the flat-16 scenario.

At Wednesday’s meeting, DDA board members did raise the question of the city’s need after the second year. Newcombe Clark asked on Wednesday why the city felt it would necessarily have a need for public parking dollars in 2020.

The week before, at the DDA operations committee meeting, Hieftje assured other DDA board members that he felt the recession could be over in four years time. Joan Lowenstein pointed out that this same argument, which he was using to assure the DDA board that their fund balances would be adequate, could be used to question whether the city would have a need for the parking dollars.

As Roger Hewitt expressed some urgency that he needed direction for the next meeting of the mutually beneficial committees, a straw poll was suggested. Hieftje was resistant to the idea, saying that Hewitt should glean his conclusions from the board’s conversation.

John Splitt, John Mouat, and Sandi Smith seemed to indicate they’d support a half-and-half scenario – 16% in the first five years and 17.5% in the remaining five years. Bob Guenzel said he felt that the flat-16 already reflected a lot of movement by the DDA from its previous position of 14-14-15, but wanted to give Hewitt some flexibility. Keith Orr also indicated he felt that in the spirit of mutual sacrifice, the DDA had come a long way to the flat-16 scenario. [Orr has for the last year consistently referred to the mutual sacrifice as opposed to the mutual benefit.]

Gary Boren –  who was running the meeting because Lowenstein, the board chair, was participating only by speaker phone – suggested that there was at least a clear consensus that board members were not prepared to meet the city’s request of a 16-16-17.5 scenario. With the exception of the mayor, all board members agreed that they were a part of that consensus.

City-DDA Parking Contract: Coda – Friday Morning MBC Meeting

Early Friday morning, April 8, the two mutually beneficial committees met again. It was intended as a replacement for the meeting the following Monday. Councilmembers Christopher Taylor, Margie Teall and Carsten Hohnke were greeted with the news that the DDA board members had reached a consensus that they were not prepared to meet the council’s request for the 16-16-17.5 scenario. So the Monday, April 11 meeting was put back on the calendar. [Later on the evening of April 11, the council is due to receive a presentation on the city administrator's proposed budget for fiscal year 2012, which starts July 1, 2011.]

Roger Hewitt stressed that he’d already gone back to his full board twice with the council’s request – in fully public settings – after first consulting with his full board publicly at a retreat. He urged the council committee members to do the same with their council colleagues. For her part, Teall said that the lower the percentage-of-gross revenues in the contract was, the more likely it was that the city would come back to the DDA and ask for additional money. Hohnke, who was participating by speaker phone, seemed piqued that Sandi Smith’s position was not supportive of the council committee’s position – she serves on both the DDA board and the city council. He asked pointedly asked what “councilmember Smith” thought.

Smith reiterated the same point that she’d made at the DDA board meeting, saying that the parking fund balance on the 16-16-17.5 scenario was too precarious, and that on her half-and-half compromise – 16% in the first five years and 17.5% in the second five years – the parking fund balance was able to eke out enough of a cushion that she felt more comfortable with.

At the next mutually beneficial committee meeting on Monday morning, April 11, the committees are expected to settle on a percentage-of-gross figure to present to the city council, which could see a vote as early as the council’s April 19 meeting.

DDA Lease Renewal

At its April 6 board meeting, the DDA’s only action item was an authorization to sign a new lease for its office space.

Under terms of its current lease, which expires on June 30, 2011, the DDA pays $26 per square foot for 3,189 square feet of office space located at 150 S. Fifth Ave. Under terms of the new lease, the DDA would pay $16.75 per square foot in the first year of the five-year deal, for a total of $53,415. After the first year, the amount would increase to $17.25, $18, $18.75 and $19.50 per square foot. There’s an option for an additional five-year term.

Mayor John Hieftje had announced at the April 4 city council meeting that he’d be inviting the DDA board to consider moving the DDA offices to newly renovated space in the city hall building. But at the Wednesday DDA board meeting, he indicated that he’d discussed the lease with DDA board member Roger Hewitt and understood that securing just a one-year renewal of the lease would mean agreeing to the less favorable terms of the current lease for that year.

In introducing the item to the board, Roger Hewitt noted that the DDA staff had reviewed alternative spaces, using the services of a broker, but had ultimately been able to negotiate a new lease with the current landlord, Weinmann Block LLC. Alluding to the mayor’s offer announced at the city council meeting on Monday, Hewitt noted that if there was a desire to move out of the space before five years is up, they had the right under the terms of the new lease to sublet the space.

Gary Boren chaired the meeting, because the board’s chair, Joan Lowenstein, was joining the meeting by conference call. And Boren held off on taking a vote on the matter until the mayor could return to the table – he’d left the meeting to take a phone call.

On his return, Hieftje indicated that he understood the circumstances and was willing to support the five-year lease at the DDA’s current location.

Outcome: Hieftje voted for the five-year lease extension, along with the rest of the board. Newcombe Clark recused himself.

Communications, Committee Reports, Commentary

The board’s meeting included the usual range of reports from its standing committees and the Downtown Citizens Advisory Council. Every board meeting also includes two opportunities for public commentary – one near the start of the meeting and the other at its conclusion.

Comm/Comm: Library Lot, Development Process

Ray Detter, reporting out from the Downtown Citizens Advisory Council, and John Splitt, reporting out from the board’s bricks and money committee, both noted the termination of the RFP process for the future use of the Library Lot, which the city council had voted on at its meeting two days earlier on April 4. [Chronicle coverage: "Column: Library Lot from Bottom to Top" and "Ann Arbor Council Focuses on Downtown"]

Detter said that “no tears were shed” when the CAC discussed the issue at their meeting the previous evening, which was attended by Ward 1 city councilmember Sabra Briere. [Briere also attended the DDA board meeting on Wednesday.] Detter said that the CAC supported the idea that the DDA would lead the planning process for the rectangle bounded by Ashley, Division, Liberty and William streets, which includes the Library Lot. That planning process was authorized by a city council resolution also passed at the council’s April 4 meeting.

The rectangle identified as the area of focus for the planning process reflected an amendment undertaken by the council at its Monday meeting. In reporting news of the unanimously-passed city council resolution, Roger Hewitt expressed encouragement that it was something to be referred to the DDA’s partnerships committee and that it had been an important point of the mutually beneficial committee negotiations. Mayor John Hieftje said it was a matter of prioritizing which parcels would get addressed first.

But board member Newcombe Clark questioned the narrowing of the focus – the original intent had been to take a comprehensive look at all of the city-owned parcels in the DDA district. He wanted to know why the specific area had been chosen.

Sandi Smith told him that it was about getting a council consensus. She noted that on the same evening, the city council had received a presentation on another downtown parcel, 415 W. Washington, which has its own process already. The sense of the city council, Smith said, was that it did not want to have the DDA start coming up with ideas for parcels that had processes that were already in place. She also said she felt that the rectangle of focus contained the greatest possibilities for development.

Clark wondered if there had been any discussion on “viability.” As an example, he said that given the zoning, size, geometry, cost of construction, demand, and rents in the area of the Fourth and Catherine lot, that might turn out to the most viable lot with respect to the goal of adding property to the tax base. He compared that with the Palio Lot, which is cramped, or the old Y Lot, where it might be difficult to reach an agreement on price – given that the city wants to recoup the money it paid for the property. He asked if any thought was given to the opportunities of all 16 of the city-owned downtown parcels, beyond the political consideration.

Clark said from what he understood of the situation, the only difference between this proposal and the 3-Site Plan is that it includes more sites. [The 3-Site Plan was a DDA effort in 2005 to develop city surface parking lots, including lots at First & William, First & Washington and the Kline’s Lot on the east side of Ashley Street, between William and Liberty. The concept underpinning the 3-Site Plan was that parking could be decoupled from development – build a parking structure at First & William and free up the other two sites for development without the constraint of building on-site parking. The 3-Site Plan was opposed by advocates for a greenway, and ultimately never received a vote by the city council.]

Smith said it is the DDA’s job to communicate the fact that none of this is happening in a vacuum and that whatever they undertake, they can’t ignore what is outside the rectangle. Clark wondered if he’d get his hand slapped if he began discussing in committee the forces that were operating outside the rectangle.

Hieftje assured him that he would not get his hand slapped for suggesting opportunities outside the box. He described the narrowing and prioritization of focus as the product of a legislative compromise. Clark quipped that he didn’t feel like he was doing anything if he didn’t get his hand slapped. Keith Orr noted that he felt like that the rectangle was the area that the DDA was focusing on anyway. Splitt said he appreciated the narrower focus.

Comm/Comm: DTE to Build New Substation

Paul Ganz, a DTE regional manager for an area that includes Ann Arbor, along with Michael Witkowski, a DTE engineer, presented the electric utility’s plans to invest $10 million in building a new substation in Ann Arbor, to meet increased demand for electricity. It will serve parts of downtown Ann Arbor. [Ganz last appeared before the DDA board on Sept. 1, 2010 to present them each with a commemorative cross-sectional slice of an old electrical cable that had been replaced as part of the construction of the new underground parking garage.]

Ganz described how a new substation needs to meet three criteria: (1) it must be in the center of the load; (2) land must be available; and (3) the land must be acquirable at a market price. He said that DTE had been working on it behind the scenes for a few years, and was now ready to roll out the plan.

Witkowski told the board that the area of focus for the new substation would be the Ann Arbor service center located at Huron River and Broadway. Currently, he said, the downtown Ann Arbor area is served by three substations – Argo, Burton and Hoover. He noted that the University of Michigan was always growing and that new projects like Zaragon Place II and 601 S. Forest meant that demand for electricity continued to grow.

Witkowski listed out a number of new projects that have been built or are expected to be built that would add around 20 MVA (megavolt amperes) of new load. The existing three substations have 4.8 kV circuits and are typically limited to 4 MVA of load. Other substations outside the central area, Wikkowski said, have 13.2 kV circuits, which can handle around 9 MVA of load. The idea is to add another 13.2 kV substation – the Buckler substation, which will be located at the Ann Arbor service center just north of the Huron River, and south of Canal Street, near the Broadway bridge.

DTE began internal planning in 2008, plans to break ground in the fall of 2011, and hopes to have the new substation up and energized by the spring of 2013. It will come before the Ann Arbor city planning commission sometime in May 2011. In 2013, he said, 601 S. Forest will come online, and DTE wants to be ready for that. The new substation will give DTE more flexibility, he said, and will allow the jumping of circuits during outages, so that coverage can continue to be provided.

In response to a question from Sandi Smith, Witkowski explained that a developer may have to share part of the cost of upgrades of electrical service. But Zaragon II, for example, did not result in a payment by the developer. The project was just under the amount of additional load that would have required a developer share.

Comm/Comm: Underground Parking Garage Construction Update

John Splitt reported on the recent incidents at the construction site of the underground parking site on South Fifth Avenue. [One was a breach in the earth retention system and the other was a sinkhole on the opposite side of the site. See Chronicle coverage: Column:Library Lot from Bottom to Top]. Splitt said that the construction management company, The Christman Company, had taken action and determined that there was no immediate danger, and the site is structurally sound.

Splitt said that the designer of the earth retention system, Soil and Materials Engineers Inc., and the installer of the system, Hardman Construction, had both inspected the structure. The safety fence surrounding the site has been moved back an extra 10 feet, Splitt reported, to give an additional measure of safety for pedestrians. Ground-penetrating radar had been used to determine if any other sinkholes exist.

The Christman Company will be using swing stages – similar to what window washers use – to allow SME Inc. to get up close and visually inspect each structural column. The investigation will continue at least another week, Splitt said. When the investigation is complete, Christman will allow its workers back in the main hole – meanwhile, work has been continuing on the east dog-leg.

Comm/Comm: Commuter Challenge

Director of the getDowntown program, Nancy Shore, addressed the board to alert them to this year’s commuter challenge, which takes place every May – it’s a way to encourage employees of downtown businesses to think about how they get to work.

She gave the board several reasons why she thinks the commuter challenge is important: (1) location – downtown is an important part of Ann Arbor; (2) jobs – the jobs of the future will be held by people who want to work in a downtown area where they can use public transportation to get to their work; (3) money – over 100 prizes are donated by downtown employers, plus gas prices are high now; (4) fun – there are a lot of different events associated with the challenge.

Comm/Comm: Liberty Square

Reporting out from the Downtown Citizens Advisory Council, Ray Detter said that every residential unit of Courthouse Square, located at Huron and Fourth, had now been inspected and that there were some signs of improvement in the performance of the management company.

Comm/Comm: Field Guide Downtown

As part of his Downtown Citizens Advisory Council report, Ray Detter said that a committee had been established to update the printed booklet “The Handbook: A Field Guide to Living in Downtown Ann Arbor.” He said that seven years ago the DDA had paid for the production of the booklets, but this time around, they would not be asking the DDA for any money. The updated version will become a part of the DDA’s website.

Present: Gary Boren, Newcombe Clark, Bob Guenzel, Roger Hewitt, John Hieftje, John Splitt, Sandi Smith, Keith Orr, Joan Lowenstein (by speaker phone), John Mouat.

Absent: Leah Gunn, Russ Collins

Next board meeting: Noon on Wednesday, May 4, 2011 at the DDA offices, 150 S. Fifth Ave., Suite 301. [confirm date] It’s anticipated that the board meeting will be rescheduled for a different day the same week.

Under terms of its current lease, which expires on June 30, 2011, the DDA pays $26 per square foot for 3,189 square feet of office space. Under terms of the new lease, the DDA would pay $16.75 per square foot in the first year of the five-year deal, for a total of $53,415. After the first year, the amount would increase to $17.25, $18, $18.75 and $19.50 per square foot.

The decision to renew the lease came in the context of mayor John Hieftje’s announcement at the April 4 city council meeting that he’d be inviting the DDA board to consider moving the DDA offices to newly renovated space in the city hall building. But at the Wednesday DDA board meeting, he indicated that he’d discussed the lease with DDA board member Roger Hewitt and understood that securing just a one-year renewal of the lease would mean agreeing to the less favorable terms of the current lease. Hieftje voted for the five-year lease extension, along with the rest of the board.

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

This brief was filed from the city council’s chambers on the second floor of city hall, located at 100 N. Fifth Ave. A more detailed report will follow: [link]

John Hansen talks to the media – in this case, both The Chronicle (in the room) and Paula Gardner of AnnArbor.com (on the phone).

John Hansen’s title on his business card is “Transitionist” – and he isn’t kidding. Hansen has been on the job only a few days as interim president of the Ann Arbor Area Chamber of Commerce, but he’ll be shepherding what could be a significant physical transition too: A possible move out of the business group’s third-floor offices at 115 W. Huron St.

On Monday, the chamber announced plans to sublet all or part of its 6,300-square-foot warren of offices. There’s too much space for the 10 or so people who work there, Hansen said, and they’re paying too much for it. He declined to say how much, noting only that “it’s very expensive” – the biggest cost after payroll in a roughly $1 million budget.

The Chronicle talked to Hansen on Monday about both transitions: The possible move, and the process of choosing a new leader for the 1,200-member group. Along the way, we learned a few things about what it’s like to be a state legislator and school superintendent, too.

No, Really – He’s Interim

Hansen doesn’t blame people who might think “interim” means “trial run before taking the job full-time.” That was the trajectory of Jesse Bernstein, who was brought on as interim in the spring of 2006 after former president Sabrina Keeley’s departure. Bernstein was hired permanently that fall, but resigned in June of this year.

Over the past few years, Hansen has made a career out of being the go-to interim guy. His first career was in education – he served as superintendent of Dexter Community Schools from 1984-1998. In 1998 he ran and won a race for state representative from District 52, an office he held until 2002. In the 1998 Democratic primary race for that seat, he defeated Larry Kestenbaum, Pam Byrnes and Rebekah Warren.  All three of them now hold elected office – in contrast to himself, Hansen notes wryly.

Hansen took his first interim job in 2003 after leaving the legislature, as superintendent for Willow Run Community Schools in Ypsilanti Township. He’s had several more gigs since then, mostly – but not all – in education. The chamber is his seventh interim job – and he’s clear about not changing his “Transitionist” title.

The end date for him is Jan. 1, 2010 – assuming the chamber’s board has found a replacement by then. They’re forming a “vision committee” co-chaired by Debra Power and John Petz, who both serve on the board’s six-member executive committee.

That group will meet in September and focus on big-picture questions, looking at what kind of organization the chamber should be in the future. The answers will shape the eventual job posting for a permanent president, Hansen said, and they’ll serve as the standard they use to screen applicants “so we’re not just evaluating people on their warm smile.” A not-yet-formed search committee will handle that part of the process.

The issue of office space could also be informed by the answer to “What will be chamber be?”

This room at the chamber offices, with five workstations or "hotels," is available for members to use as temporary office space. (Photo by the writer.)

What Does the Chamber Need?

When The Chronicle spoke to Bernstein upon his departure in June, he cited the chamber’s move into new offices – they were formerly located in the DTE building, at the corner of South Main and William – as one of his accomplishments. He felt the new space presented a more inviting, professional image for the chamber – and it does, Hansen says. “I would have been proud of that, too.”

But conditions have changed since 2007. The economy tanked, for one thing. Chamber membership is down, but the lease expense is locked in until 2017. In fact, the conversation about how to address this problem pre-dates Hansen. For the past six to 12 months, the board and staff have been looking at whether the amount and cost of the office space they have matches their needs, said Newcombe Clark, a chamber board member and local real estate agent who’s taking the lead on finding a sub-lessor.

The chamber’s asking rate of $18.75 per square foot, plus utilities, is close to what the chamber itself is paying, Clark said.  [Based on the 6,300 square feet of space, that would put the chamber's costs at close to $118,000.] There’s typically a 15-20% gap between the asking rate and the final deal, Clark added, but that gap has been ballooning. Landlords are cutting great deals because there’s so much vacant space on the market. Rates are especially low on the south side of Ann Arbor, Clark said – that’s why it’s unlikely that the chamber will find someone to sublet the entire space. That, plus the fact that “there’s not a lot of 6,300-square-foot tenants out there,” he said.

So how much space does the chamber itself need? They’ve enlisted architects to do some space configuration analysis, to get a better idea of the square footage they’d need. In addition to the chamber’s own people, staff from the getDowntown program and SCORE (Service Corps of Retired Executives) work out of the current space. There’s also a room with five workstations – or “hotels” – that are available for chamber members to use on a temporary basis.

John Hansen points out an August 2009 Ann Arbor Observer article about the Workantile Exchange, which prompted him to ask, "Why aren't we them?" (Photo by the writer.)

In fact, the hoteling and co-office concept is an intriguing one for Hansen. As part of his outreach to get to know board members, he’s been meeting them one-on-one at their offices. He met Clark at the bare-bones offices of Ghostly International on Maynard Street. The office condo is owned by Clark, and in addition to housing Ghostly, it’s used as temporary office space for freelancers and others working on collaborative projects – essentially, there are tables and places to plug in your laptop. Until recently, Clark has worked out of there, too, though Hansen jokes that “his place of business seems to be on his feet.”

Then Hansen read an Ann Arbor Observer article that Kyle Mazurek, the chamber’s vice president of government affairs, had flagged for him – about the Workantile Exchange, a co-working space just around the corner on South Main Street. When Hansen read the description of the Workantile, he thought, “Why aren’t we them?”

The organization has been around for 90 years, Hansen said, and back in the early 1900s, its membership and services were very different than what they became a few decades later, when large corporations dominated. There’s yet another transition taking place, he said, with the “1099s” – the self-employed – making up a larger part of the business landscape. “I happen to be one of those,” Hansen added.

It will be up to the chamber board, in part through the newly formed vision committee, to figure out if the organization needs to adapt in ways small or dramatic. Hansen says he’ll have the “elderly statesman-y role” in this transition – but then, of course, he’ll be moving on.