Looking east at the former YMCA lot, which has been owned by the city since 2003 and is used as a surface parking lot. The street in the foreground is Fourth Avenue. William Street is on the right. The reddish brown building at the opposite end of the lot – across Fifth Avenue – is the Ann Arbor District Library. To the left is the construction site for the new Blake Transit Center.

Planning manager Wendy Rampson updated commissioners on the city council-mandated review of downtown zoning. Ann Arbor-based ENP & Associates – consultants Erin Perdu and Megan Masson-Minock – are being hired to handle the process under a $24,500 contract with the city.

The primary concern for the council, as reflected in its April 1, 2013 resolution, is the downtown D1 zoning – which provides for the highest density allowed in city, with the tallest possible buildings. The concern was heightened by the controversial 413 E. Huron development, which the council approved on May 13, 2013. That site, located on a major transit corridor, but also next to a residential neighborhood, is zoned D1.

Rampson described the upcoming work as “fast and furious,” with a deadline of Oct. 1 to deliver recommendations to the council. The consultant will work initially with the commission’s ordinance revisions committee, which next meets on Tuesday, July 16 at 5:30 p.m. in the first floor south conference room at city hall, 301 E. Huron.

Zoning was also a point of discussion regarding the former Y site at 350 S. Fifth, across from the downtown Ann Arbor District Library and south of Blake Transit Center. The city council is exploring whether to sell that city-owned property, which was zoned D1 as part of the original A2D2 process. Colliers International and local broker Jim Chaconas have been selected to handle the possible sale, as the city faces a $3.5 million balloon payment this year from the purchase loan it holds on that property.

Bonnie Bona floated the idea of developing recommendations to the council regarding what planning commissioners think the city should require in a sale of that site. “I think we have a responsibility as planning commissioners to give them planning advice,” Bona said. Other commissioners agreed, and the item will likely be on the agenda for the group’s Aug. 13 working session for a fuller discussion.

The 2.5-hour July 9 session also included a presentation by two Ann Arbor public art commissioners – John Kotarski and Bob Miller – about the finalists for artwork at the East Stadium bridges. And commissioners were updated by Rampson about the status of various projects and developments. This report focuses only on the Y lot and A2D2 discussions.

Former Y Lot: Background

The city’s involvement in the former YMCA site dates back to 2003, when the city bought the property at Fifth & William in order to preserve the 100 units of single-residency occupancy (SRO) affordable housing that the building offered. The city council at the time made the move because the YMCA, which relocated to a new building at 400 W. Washington, had no plans to incorporate residential units at its new site. The Ann Arbor Transportation Authority, which had contemplated redeveloping the old Y property as a transit center and office headquarters, also wasn’t interested in providing housing.

The city used a loan to purchase the property from the YMCA for $3.5 million. Then in 2008, the council voted to extend its five-year loan with the Bank of Ann Arbor for another five years, through the end of 2013. The interest rate is 3.89%. The interest-only payments work out to roughly $140,000 a year. By the end of 2013 – when the $3.5 million balloon payment is due – the total interest paid will be around $1.4 million.

Highlighted in yellow is the location of the former YMCA lot, which the city of Ann Arbor is considering selling. A $3.5 million balloon payment on the property is due at the end of 2013.

In December 2004, the city council voted to authorize issuing a request for proposals (RFP) for development of the site, and the following year selected the developer HDC to pursue a project there. The original purchase option agreement with HDC for the land was approved by the council on Sept. 6, 2005. Affordable housing units were part of HDC’s subsequent William Street Station proposal.

That same year, mechanical systems in the old YMCA building failed to such an extent that residents needed to be moved out of the building. City staff led by Jayne Miller, who was community services area administrator at the time, worked over the following few years to find alternate accommodations for the residents. The city maintained a stated commitment to eventually replacing the 100 units, but not necessarily at the site of the old YMCA.

After encountering various difficulties and attempting to modify its project, HDC and the city signed a new purchase option agreement on Oct. 12, 2007 that included specific milestones. One of those milestones included obtaining a demolition permit from the city by Oct. 15, 2007. However, when HDC filed its application with the city for the permit, HDC contends it was informed by city staff that only the owner of a property could be granted a demolition permit – so HDC could not obtain the permit because it was not yet the owner. The city still owned the property. HDC complained that the condition was one that was impossible to meet.

Soon after, a resolution was considered by the city council on Nov. 5, 2007 to extend the purchase option agreement, but it failed on a 5-6 vote. On the side of extending were councilmembers Joan Lowenstein, Leigh Greden, Margie Teall, and Wendy Woods. Against extending the agreement were John Hieftje, Bob Johnson, Ron Suarez, Stephen Rapundalo, Stephen Kunselman, and Christopher Easthope. The failure to extend was the basis of one of the counts alleged in a lawsuit that HDC filed in 2009 – that the city failed to act in good faith and deal fairly with the firm. Ultimately the court ruled against HDC. In broad strokes, the ruling indicated that HDC, as a sophisticated developer, should have known better than to sign an agreement with an impossible condition, and that the city had not breached its contract.

The vacant building on the site was condemned and ultimately demolished. The cost of demolishing it and abating asbestos was around $1.5 million. The Ann Arbor Downtown Development Authority covered the demolition costs and has covered half of the interest payments on the purchase loan. So the total amount of Ann Arbor governmental investment in the property is at least $6.4 million – not including attorney fees.

Since the building was demolished, the site has been used for surface parking and is managed as part of the downtown parking system by the DDA, under contract with the city. Revenue from the surface parking lot on the site – which charges a $1.40 hourly rate – amounts to $105-$140 per space per month for roughly 140 spaces. Through the end of 2012, the lot generated a rough average of around $20,000 per month. But usage has decreased since the opening of the new 711-space Library Lane underground garage, located across the street. And the number of spaces available for parking on the lot has decreased from 140 to 76 spaces – as some of the area has been used for construction staging for the new Blake Transit Center under construction by the Ann Arbor Area Transportation Authority.

That parking revenue from the former Y site is collected by the Ann Arbor DDA. A contract under which the DDA manages the city’s public parking system gives the city 17% of the gross parking system revenues. Also under terms of the contract, the DDA has the option to object to eliminating a facility from the parking system – such as the Y lot – but it must file its objection within 30 days of being notified by the city.

For some, like city councilmember Stephen Kunselman, the evaluation of the financial equation for the parcel needs to include the whole parking system. And that includes the fact that the DDA uses some TIF revenues – taxes captured from the taxing authorities in its district – to make payments on bonds that were issued for improvements and new construction of other parking facilities.

The Y site – located directly across the street from the downtown Ann Arbor District Library – is also one of five parcels that was the focus of the DDA’s Connecting William Street project. That project was undertaken by the DDA based on a directive from the city council given at its April 4, 2011 meeting. The intent was to make recommendations for possible future development, in a cohesive way, on those five sites: (1) the Kline lot (on the east side of Ashley, north of William), (2) the lot next to Palio restaurant (northeast corner of Main & William), (3) the ground floor of the Fourth & William parking structure, (4) the former YMCA lot (on William between Fourth and Fifth), and (5) the top of the Library Lane underground parking garage on South Fifth, north of the downtown library.

In January 2013, the DDA gave a presentation to the council on its Connecting William Street recommendations. The council never took action on that proposal. However, at its March 5, 2013 meeting, the Ann Arbor planning commission voted to adopt the report as a resource document supporting the city’s master plan. Kirk Westphal, the commission’s chair, also served on an advisory board for the Connecting William Street effort.

Former Y Lot: Recommendations to Council?

At the planning commission’s July 9, 2013 working session, Bonnie Bona reported that she’d met with a few members of the Ann Arbor energy commission and city councilmember Sabra Briere, who also serves on the planning commission. They had discussed the city’s sustainability framework and climate action plan, and how they could keep those efforts moving. Some of their discussion touched on the former Y lot and its possible sale.

Planning commissioners Kirk Westphal and Bonnie Bona at the July 9 working session.

At its March 4, 2013 meeting, the city council voted to direct the city administrator to prepare an RFP (request for proposals) for brokerage services to sell the former Y lot. Soon after, the energy commission started talking about what should be incorporated into the sale, as it relates to the climate action plan. Historically, Bona said, the city has used a planned unit development (PUD) for developing city-owned property, so that there’s an element of public benefit built into the project. Energy commissioners wanted to send recommendations to the city council regarding what they felt the city should require in a sale of that property, related to energy efficiency, renewable energy or other issues.

The energy commission asked that the planning commission also consider making recommendations to the council. At the July 9 working session, Bona said she wanted to discuss the possibility of taking some sort of action, either in the form of a memo or resolution to the council. She felt it should be in the broader context of other projects, like the commission’s review of A2D2 zoning. “To just zone [the Y lot] D1, which is what the master plan says, seems a little weak,” she said, “considering what we know now versus when that zoning was created.”

Bona noted that the former Y lot was one of the properties that was the focus of the Connecting William Street project. [.pdf of CWS recommendations for the Y lot]

She also observed that in the past, the city has typically required a higher level of accommodation for land it owns, as a community asset – beyond just zoning and selling it. The last city property that was sold downtown was the former parking structure at First & Washington, where City Apartments is under construction. It was a PUD, with public parking on the lower levels as a public benefit. Bona noted that she was on the selection committee for that project, to review responses to the city’s request for proposals. A PUD was required, but there were no other specific requirements in the RFP, she said.

Bona thought that planning commissioners could “get into the weeds” if they tried to make really specific recommendations, like pursuing LEED Gold certification or requiring a certain amount of green space. Her suggestion was to raise more general issues related to the kinds of things that the city should be looking at – like land uses, sustainability, height and other considerations. She wanted to get feedback from other commissioners about whether this was something they wanted to pursue. “I think we have a responsibility as planning commissioners to give them planning advice,” Bona said.

Paras Parekh wondered how such recommendations would be conveyed to potential developers. The RFP would list a set of goals, Ken Clein explained, and potential proposals would be evaluated in that context. Bona suggested getting a copy of the original RFP for the First & Washington site, to give commissioners an idea of what’s been done in the past.

At this point, Bona noted, the city council hasn’t laid out a process for how a buyer would be selected, beyond selecting a broker. In general, the city struggles with the development process for the sites it owns, she added. She’s heard from some former planning commissioners who believe the commission should make recommendations about how the process should be handled. But Bona said she’s not convinced that’s the commission’s role.

Clein wondered if the council might hand off the process to the Ann Arbor Downtown Development Authority, which managed the Connecting William Street project. Wendy Woods expressed no enthusiasm for that option, saying “hopefully they don’t do that.”

Woods noted that she’d seen coverage regarding the selection of a broker for the site. [Chronicle coverage: "Colliers, Chaconas to Broker City's Y Lot"] Planning manager Wendy Rampson said that the brokerage approach taken by the council seems to indicate that councilmembers simply want to sell the property. The approach that Bona is suggesting is more in line with previous efforts by the city, like the City Apartments at First & Washington, Rampson said. An RFP was also issued in the past for the 415 W. Washington site, Rampson noted, though “it never went anywhere.”

Development on top of the Library Lane underground parking structure is another example of an RFP process that did not move forward, Rampson said. [For a sampling of Chronicle coverage on that RFP process, see: "Hotel/Conference Center Ideas Go Forward" (January 2010); "Column: Library Lot – Bottom to Top" (March 2011); and "Council on Valiant Library Lot Idea: Hail No" (April 2011).

Kirk Westphal, the commission's chair, gave some background on the DDA's Connecting William Street project. Two years ago, the council was reflecting on its difficulty in producing "productive proposals" for 415 W. Washington and the Library Lane sites, he said. So the council directed the DDA board to look at the potential of five city-owned sites in the downtown area, and how those sites might be developed.

Westphal noted that he served on the subcommittee that was responsible for community engagement, and said "it was the most community contact that had ever taken place in any planning project in Ann Arbor history." The project got "a little distracted" because it didn't tackle the issue of open space, he added – that's now being handled by the city's park advisory commission. "In the process of confusion about that, a lot of the recommendations have not been looked at very closely," he said. Bona added that she felt the Connecting William Street recommendations reflected valuable public input.

Planning commissioners Jeremy Peters and Diane Giannola.

Diane Giannola clarified with Rampson that if the city sells the land without an RFP, it would be sold for the price alone, without restrictions. Rampson noted that the property is currently zoned D1 [the highest allowable density]. She explained that when the A2D2 zoning process took place, all parking structures and publicly owned land – with the exception of county property – were zoned to be consistent with the city’s master plan. It’s possible to rezone the property, she added, but at this point the Y lot is D1.

Clein ventured that real estate brokers will advise the city to keep it zoned D1, because that will bring the best price – and in turn the highest fees for the brokers.

Commissioners talked about how the council will need to decide whether to seek the highest price or try to shape the kind of development it wants on that site, and whether to go for short-term or long-term value. “And then there’s politics,” Clein quipped.

Woods pointed to another factor – that a portion of the proceeds from this sale will be put into the city’s affordable housing trust fund, based on direction from the council.

Rampson described the Y lot as “a multi-layered site.” It includes a previous commitment to replace 100 units of affordable housing that had been at the site when it was owned by the YMCA. The council had determined that one way to address that commitment was to put net proceeds from the sale into the affordable housing trust fund, she explained.

Bona returned to the issue of planning commission recommendations. “From my perspective, it should not just be sold,” she said. “There’s an opportunity to provide a public benefit that other property isn’t required to provide.”

Jeremy Peters agreed, saying he felt it was the commission’s duty to provide advice in some way. That might be suggesting a process, or elements of an RFP, or how the site should fit into the overall downtown and entire city.

Clein also supported making recommendations, but cautioned against telling the council what to do. “In my experience, that tends not necessarily to bring the desired results.” He thought that making general suggestions – like providing open space – was a better approach, rather than recommending a specific amount of open space in a specific location.

Woods observed that some people feel certain parameters in previous RFPs issued by the city have caused projects to fail, because those parameters couldn’t be met. Rampson indicated that she’d heard this complaint regarding 415 W. Washington, although she noted that the economic downturn was another factor at that time. But there weren’t any real parameters for the Library Lot RFP, Rampson said. That resulted in a wide array of responses, from senior housing to conference centers, she said.

Clein framed the question this way: Should the city have a say in what gets built on the Y lot, or is the community benefit simply the cash that the city gets from selling the property? “It is much more challenging and much more involved to try to seek development proposals, evaluate those proposals and select one. The city is on the hook much more so financially in doing that, rather than just selling it off,” he said. But Clein felt it was worthwhile to discuss what kind of stake the city might have or influence it should exert on that site.

Peters noted that even if the city council decides just to sell the property, at least there will have been a discussion about potential uses that a developer could take into consideration. Clein suggested that one possibility is to simply make it mandatory for a developer of a city-owned property to follow the suggestions of the design review board. At this point, going through the design review process is mandatory, but compliance with the board’s suggestions is voluntary. Generally, he noted, the board’s comments have been very pragmatic.

Bona suggested focusing on a few important elements, which if implemented could set the stage for better development on other sites. Following the design guidelines might be one example, she said.

Giannola proposed making recommendations that outline what the city doesn’t want. “Sometimes you don’t know what you want until you see it,” she said, but you know what you don’t want.

Westphal noted that often developers face financial pressures and timelines to get a return on their investment. One possibility is for the city to accept a little less money up front, he said, in exchange for insisting on higher quality materials and architecture. That approach recognizes that over the long-term, a higher quality building will bring higher taxable value to the city.

While that approach makes sense, Clein observed, the difficulty is how to make it happen. Proposals are typically “a financial pro forma and a pretty picture,” he said. The trick is knowing what you’ll actually get in the end, and making sure that elements of the project aren’t eliminated along the way through “value engineering.” Rampson noted that “this is happening at City Apartments as we speak. That’s just the nature of things.”

Planning commissioner Wendy Woods.

Woods, who works at the University of Michigan, observed that “as much as people harp about the university, it does put up some pretty buildings.” Clein indicated that UM is willing to spend a lot of money – roughly three times the cost per square foot of a typical development.

“What I’m saying is that it can be done,” Woods replied, “and it can be done here. So let’s look at some mandatory things, and let’s do it!”

The commissioners who were present reached a consensus to move forward on making recommendations. Bona and Giannola agreed to prepare a draft of possible issues to include, which the commission will then discuss at a future working session. Recommendations would be brought to a regular planning commission meeting for a formal vote.

Clein wanted to make sure that someone had “taken the temperature” of the commission’s city councilmember, Sabra Briere, who did not attend the July 9 working session. Bona indicated that Briere had encouraged this approach.

Westphal suggested that Amber Miller of the DDA could be invited to a future working session to review the Connecting William Street recommendations for this parcel.

Rampson indicated that the topic could be placed on the agenda for the commission’s Aug. 13 working session. She offered to provide copies of the RFPs for the William Street Station and First & Washington sites before then. Bona also recommended that commissioners review the city’s master plan as it relates to the site, as well as the Connecting William Street report.

A2D2 Review Process

Also at the July 9 working session, commissioners were updated on the review process for the city’s A2D2 (Ann Arbor Discovering Downtown) zoning. The commission had been scheduled to conduct an earlier review of the overall A2D2 zoning, which had been adopted in 2009. However, until recently – because of the economic downturn – few projects have been built.

At its March 18, 2013 meeting, the city council voted to give the planning commission specific direction regarding the zoning review. And at its next meeting, on April 1, 2013, the council passed this resolution with more details:

RESOLVED, That City Council requests the City Planning Commission to specifically address these issues:
(i) whether D1 zoning is appropriately located on the north side of Huron Street between Division and S. State and the south side of William Street between S. Main and Fourth Avenue;
(ii) whether the D1 residential FAR [floor area ratio] premiums effectively encourage a diverse downtown population; and
(iii) consider a parcel on the south side of Ann St. adjacent to north of city hall that is currently zoned D1 to be rezoned to the appropriate zoning for this neighborhood; and

RESOLVED, That City Council requests that Planning Commission complete its review and report to the City Council by October 1, 2013.

The primary focus on the downtown D1-D2 zoning – the highest density allowed in the city, with the tallest possible building height – was made in light of the controversial 413 E. Huron development, which the council approved on May 13, 2013. That site, located on a major corridor but next to a residential neighborhood, is zoned D1.

At the July 9 working session, planning manager Wendy Rampson reported that the commission’s executive committee and councilmember Sabra Briere, who serves as the city council’s representative on the planning commission, had interviewed two potential consultants to handle the review. The executive committee includes chair Kirk Westphal, vice chair Wendy Woods, and secretary Ken Clein. Bonnie Bona also participated in the interviews.

Rampson said the committee decided to hire a consultant in order to have fresh eyes on the zoning, given that staff and several planning commissioners had been so immersed in developing the A2D2 zoning. Another factor was the speed at which this council-directed review must take place, she said.

Two consultants had responded to the city’s request for proposals, which had been sent out to only southeast Michigan firms: Carlisle/Wortman Associates, and ENP & Associates. Both consultants are based in Ann Arbor. The executive committee had selected ENP & Associates – run by Erin Perdu – for the work. Megan Masson-Minock will also be working on the project for ENP. [Responding to a follow-up query from The Chronicle, Rampson reported that the contract amount is $24,500.]

Ann Arbor planning manager Wendy Rampson.

The consultant’s work will include interviews, focus groups and stakeholder meetings to solicit concerns about the A2D2 zoning. At the end of that process, in consultation with the commission’s ordinance revisions committee (ORC), there will be a list of prioritized items to work on, Rampson said. Those priorities will include items that the city council has identified, she said, “but there’s a whole host of other issues that people have raised” like affordable housing and LEED certification.

The next stage would be to develop recommendations regarding how to address those priorities. Rampson called it a very ambitious schedule. The ORC members – Bonnie Bona, Kirk Westphal, Wendy Woods and Diane Giannola – will meet next week to kick off that process.

Bona noted that it might require going back to the council to ask for more time, but that ENP is confident that the project can be completed by the Oct. 1 deadline.

Rampson reported that ENP & Associates is handling the Shape Ypsilanti project, which is an update of the city of Ypsilanti’s master plan. The consultants put a lot of focus on social media, she said, but also use a lot of face-to-face interactions to get feedback. They also use tools like SketchUp to help people envision things like height and massing.

Rampson clarified that the review will address the council’s directive, but will also be broader to encompass other aspects of A2D2. She noted that there’s a concurrent effort to review the downtown design guidelines, which is being led by councilmember Marcia Higgins. But issues like transportation or historic preservation aren’t part of this review, she said. The review will encompass zoning and design, as it interacts with zoning.

Developing priorities will be the first phase, Rampson noted. From that list, certain items will be worked on further to deliver recommendations to council. However, given the capacity of staff and the planning commission, other priorities will be worked on over a longer period of time, she said.

Paras Parekh asked if there had been public input on the original A2D2 process. Yes, Rampson said – a lot. Bona noted that the original input was based on how things were expected to develop. However, now there have been several completed projects, so people have a better idea of what the zoning actually allows.

Eight projects have been built downtown, including a couple of smaller ones, Rampson added. Commissioners also discussed the process that had gone into developing the A2D2 zoning, including decisions that Bona described as somewhat arbitrary. “In the end, some of it was that council just made a decision,” she said. Now, the city can go back and “adjust the things that turned out wrong,” Bona said.

Bona noted that prior to A2D2, most downtown projects were PUDs (planned unit developments). “That was an indication that our zoning was not working,” Rampson said. Because such projects are considered customized zoning – working around the existing zoning on a site – “PUDs are actually a pretty good indication that there’s something wrong with your zoning,” Rampson added. “I hate to say it, but that’s kind of how it works.”

Kirk Westphal noted that there had been a lot of back-and-forth between the planning commission and the city council regarding A2D2. “Some things changed along the way,” he said, “and now we see the outcome.”

It’s really the developer who shapes a project, Rampson said. The zoning just provides an envelope in which to operate.

Bona referred to the process involving Calthorpe Associates, California-based consultants who were hired by the city to help develop a downtown plan prior to A2D2. That process solicited solid public input, she said, with community-wide design charettes and other opportunities for feedback. Rampson described that process as developing a big-picture vision for downtown, which was followed by the A2D2 zoning that was meant to implement that vision. The A2D2 process had an advisory committee that met for about eight months, she said, then it was taken on by the planning commission. There was also a steering committee that included representatives from the DDA board, the city council and the chair of the planning commission.

Rampson noted that she personally attended 33 meetings throughout that process. “I don’t have Susan Pollay’s record, but … it was a pretty large undertaking.” Pollay is executive director of the Ann Arbor DDA. Rampson indicated that despite significant changes in zoning, there have been relatively few problems with the zoning revisions. Bona noted that some projects – like Zaragon West – resulted in very little public interest, which indicated that the projects were acceptable and that the zoning worked.

One indication that the zoning works, Rampson said, is that at least one former PUD – Kingsley Lane, at Kingsley and Ashley – is likely to return with a project designed for the site’s current zoning, which is D2. Responding to queries from commissioners, Rampson said the Kingsley Lane developers, including local developer Peter Allen, almost lost the property to the bank. But they’ve secured the property now and are expected to submit a site plan for that project soon.

Rampson wrapped up the discussion by describing the upcoming work as “fast and furious,” beginning with the ordinance revisions committee. The ORC meets on Tuesday, July 16 at 5:30 p.m. in the first floor south conference room at city hall, 301 E. Huron.

For additional background on the original A2D2 zoning process, see Chronicle coverage: “Downtown Planning Process Forges Ahead” (November 2009); “Another Draft of Downtown Design Guides” (October 2009); and “Downtown Design Guides: Must vs. Should” (September 2009).

Present: Bonnie Bona, Ken Clein, Diane Giannola, Paras Parekh, Jeremy Peters, Kirk Westphal, Wendy Woods. Also: Planning manager Wendy Rampson.

Absent: Sabra Briere, Eleanore Adenekan.

Next regular meeting: Tuesday, July 16, 2013 at 7 p.m. in the second-floor council chambers at city hall, 301 E. Huron St., Ann Arbor. [Check Chronicle event listings to confirm date]

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Highlighted in yellow is the location of the former YMCA lot, which the city of Ann Arbor is considering selling. A $3.5 million balloon payment on the property is due at the end of 2013.

At its March 4, 2013 meeting, the Ann Arbor city council had voted to direct the city administrator to prepare an RFP (request for proposals) for brokerage services to sell the lot. The only councilmember to dissent on that vote had been Christopher Taylor (Ward 3).

The city had used a loan to purchase the property from the YMCA for $3.5 million in 2003. The council voted in 2008 to extend a five-year loan with the Bank of Ann Arbor for another five years, through the end of 2013. The interest rate is 3.89%. The interest-only payments work out to roughly $140,000 a year. By the end of 2013, the total interest paid will be around $1.4 million.

A building on the site was condemned, and the cost of demolishing it and abating asbestos was around $1.5 million. The Ann Arbor Downtown Development Authority covered the demolition costs and has covered half of the interest payments. So the total amount of Ann Arbor governmental investment in the property is at least $6.4 million.

Revenue from the surface parking lot on the site – which charges a $1.40 hourly rate – amounts to $105-$140 per space per month for roughly 140 spaces. Through the end of 2012, the lot  generated a rough average of around $20,000 per month. But usage has decreased since the opening of the new 711-space Library Lane underground garage, located across the street. And the number of spaces available for parking on the lot has decreased from 140 to 76 spaces – as some of the area has been used for construction staging for the new Blake Transit Center under construction by the Ann Arbor Area Transportation Authority.

That parking revenue from the former Y site is collected by the Ann Arbor DDA, which operates the city’s public parking system under contract with the city. Under terms of that contract, the city receives 17% of the gross parking system revenues. Also under terms of the contract, the DDA has the option to object to eliminating a facility from the parking system, within 30 days of notification by the city.

The Y site is one of five parcels that was the focus of the DDA’s Connecting William Street project. The Connecting William Street project was undertaken by the DDA based on a directive from the city council, on a unanimous vote, given at its April 4, 2011 meeting. And at a Jan. 7, 2013 working session, the DDA gave a presentation to the council on its recommendations for future use of five city-owned parcels in the downtown area – the former Y lot, the Kline’s lot, the Palio lot, the Fourth and William parking structure, and the top of the Library Lane underground parking garage.

The council never took action on the Connecting William Street recommendations. However, at its March 5, 2013 meeting, the Ann Arbor planning commission voted to adopt the report as a resource document supporting the city’s master plan.

Smith’s initial proposal would have directed 85% of the net proceeds from the sale of any city-owned land in the Ann Arbor Downtown Development Authority district to be deposited in the city’s affordable housing trust fund. During the month-long postponement, the council’s budget committee discussed the proposal and made a recommendation that for only one city property – the Fifth & William lot, where the former YMCA building previously stood – the net proceeds from any future sale would be deposited into the city’s affordable housing trust fund.

The budget committee also recommended that any other properties be considered on a case-by-case basis, considering all the needs of the city. And that’s essentially the recommendation that the council’s approved resolution adopted. A nod to affordable housing was included in an amendment added at the council meeting in the form of a statement that all needs of the city would be considered in deciding the use of land sale proceeds – but “especially the need for affordable housing.”

From a parliamentary point of view, Smith’s resolution and the budget committee’s recommendation were two separate agenda items – so the council first voted down Smith’s resolution and then later in the meeting approved the budget committee’s version.

The wording of the approved resolution stipulates that for the Fifth & William site, the net proceeds of any sale “first be utilized to repay the various funds that expended resources on the property, including but not limited to due diligence, closing of the site and relocation and support of its previous tenants, after which any remaining proceeds be allocated and distributed to the Affordable Housing Trust Fund … ”

The relocation costs for previous Y tenants are estimated at around $1.3 million. The property’s purchase price in 2003 was $3.5 million. The council voted in 2008 to extend the five-year loan with the Bank of Ann Arbor for another five years, through the end of 2013. The interest rate is 3.89%. The interest-only payments work out to roughly $140,000 a year, of which the city has paid half. The Ann Arbor DDA has paid the other half of the interest payments. And when the YMCA building was condemned, the DDA also paid for the cost of demolishing it and abating asbestos – around $1.5 million. The total amount of local governmental costs associated with the property since 2003 is $7.7 million.

The kind of city policy approved by the council on Oct. 15 has a long history, dating back to 1996. And a previous policy of directing proceeds of city-owned land sales to the affordable housing trust fund was rescinded by the council in 2007. More detailed background is provided in previous Chronicle coverage: “City Council to Focus on Land Sale Policy.”

Resolutions urging the city council to adopt such a policy were approved by the board of the Ann Arbor DDA at its Sept. 5, 2012 and by the Washtenaw County board of commissioners later that same day.

During initial deliberations at the council’s Sept. 17 meeting, Smith’s resolution appeared to have only mixed support on the council. Stephen Kunselman (Ward 3) indicated he would only support the resolution if the proceeds from land sales were put toward the Ann Arbor Housing Commission specifically. Jane Lumm (Ward 2) said she could not support a percentage as high as 85%. Other councilmembers expressed skepticism at the value of a non-binding council resolution that future councils would not need to honor.

Another concern heard at the council’s budget committee meeting was that groups with other interests besides affordable housing – like greenway advocates – were also interested in “getting a bite at the apple” of city-owned land sale proceeds.

There are no imminent sales of city-owned land, but a current planning process could eventually result in one or more such sales. The DDA has undertaken a study at the previous direction of the city council, under the moniker of Connecting William Street. That process focuses on five city-owned parcels in the area bounded by Ashley, Liberty, Division and William streets. For Chronicle coverage of a recent presentation on the project to the city’s planning commission, see “Planning Group Briefed on William Street Project.

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

The resolution would have directed city administrator Steve Powers to evaluate the parcel at 350 S. Fifth for possible public or corporate use; and if none was found, to report back to the city council with a timeline for the disposition of the property – based on state and city laws and policies. That parcel is more commonly known as the Fifth and William parking lot (because it’s currently used as a surface parking lot in the city’s public parking system) or the Old Y Lot (because it’s the location of the former YMCA building).

The resolution’s sponsor, Stephen Kunselman (Ward 3), has frequently raised the issue of the ongoing interest payments associated with the loan used by the city to purchase the property from the YMCA for $3.5 million back in 2003. The council voted in 2008 to extend the five-year loan with the Bank of Ann Arbor for another five years, through the end of 2013. The interest rate is 3.89%. The interest-only payments work out to roughly $140,000 a year. By 2013, the total interest paid will be around $1.4 million. When it was condemned, the cost of demolishing the old YMCA building and abating asbestos was around $1.5 million. The DDA covered the demolition costs and has covered half the interest payments. So the total amount of Ann Arbor governmental investment in the property is at least $6.4 million.

Part of the reason the resolution did not generate enough traction on the city council to pass is that it stipulated that the city administrator’s efforts were to be independent of the DDA’s Connecting William Street planning effort, which includes the 350 S. Fifth parcel. It received support only from Kunselman, Mike Anglin (Ward 5) and Jane Lumm (Ward 2).

The Connecting William Street project was undertaken by the DDA based on a directive from the city council, on a unanimous vote, given at its April 4, 2011 meeting. Kunselman voted for that planning effort to take place – but was also vocal at the time, as well as before, about his view that the Old Y lot should simply be put up for sale one way or another.

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 view from Division Street to the Library Lot work site, where the Christman Company is managing the construction of the underground parking garage. The drilling is part of the earth retention work. (Photos by the writer.)

The second resolution amended the DDA bylaws. The change eliminates the ability of the executive committee to act on behalf of the board between regular board meetings, and clarifies the role of the executive director in relationship with the board. Efforts to change the bylaws have accumulated over two years worth of history, and still need the approval of the Ann Arbor city council to take effect.

Another main theme of Wednesday’s meeting was finances – from parking revenues to tax increment finance (TIF) capture, to the housing fund.

And in a nod to the Bill Murray film “Groundhog Day,” we note that The Chronicle’s report of the DDA board’s February meeting from last year also featured a big drill as lead art. Both drills are related to the construction of the underground parking garage along Fifth Avenue. The board received updates on that and other construction projects, as well as on planning and development downtown.

DDA Bylaws

The DDA board considered and passed a resolution revising its bylaws, which will now need to be forwarded to Ann Arbor city council and approved by that body in order to take effect. This is the second time in two years that the DDA board has attempted to change its bylaws.

Recent History of Attempt to Change DDA Bylaws

DDA board minutes from October 2007 show a report out from a subcommittee about bylaws changes to come before the full board in the future. The following month, the board discussed but postponed the bylaws changes. The next month, on Dec. 5, 2007, the board approved a set of bylaws changes and forwarded them to the Ann Arbor city council.

However, at its Jan. 7, 2008 meeting, the Ann Arbor city council postponed indefinitely the DDA board’s bylaws changes. [From a parliamentary point of view, the move to "postpone indefinitely" is a way to kill a measure, without actually voting it down.]

In the summer of 2009, as she was finishing her service on the DDA board, Rene Greff sent an email sent to the city council that put the blame for the council’s failure to approve the bylaws changes on then-councilmember Leigh Greden. [The Ward 3 councilmember was defeated in the 2009 August primary by Stephen Kunselman and no longer serves on the city council.] From Greff’s email:

We spent months in committee drafting language that accomplished these goals and this language was passed by our full board and sent to council for approval. Then for purely political reasons Leigh Greden managed to get council to table the resolution by convincing people that it was somehow a power grab by [DDA executive director] Susan Pollay, when in fact, it was in response to a power grab by one of our board members who made an unreasonable and bad judgment call based on his personal agenda, declared that there was no time to inform the executive committee of his request, made a statement to the press in his role as chair committing the DDA to this course of action, and then assured the director that failure to comply immediately with his request would be considered another example of obstructionist behavior.

Following the city council’s refusal to approve the bylaws changes in January 2008, the DDA minutes from March 5, 2008  show that it was Greden who followed up with the DDA board with proposed language changes: “Mr. Collins stated that Council Member Greden has provided proposed language changes to the DDA ByLaws and the revision will be reviewed at the next meeting.”

Impetus Behind the Bylaws Changes

Greff’s email actually alludes to two occasions – without specifying details – when she contends that a board member overstepped their authority in providing direction to the DDA’s executive director:

We were prompted to make this clarification after the second incident of a DDA chair taking it upon himself to instruct the executive director to undertake an expensive project without the consent of the board …

One of those occasions is traceable to a 2007 discussion of the possible installation of security cameras in Ann Arbor’s downtown parking structures. Roger Hewitt was chair of the DDA board at the time. The disagreement between Hewitt and Greff over procedure and board member authority was reported this way in an article by reporter Tom Gantert, published in the July 25, 2007 edition of The Ann Arbor News:

Those decisions were made Wednesday during a sometimes heated DDA meeting, in which Chairman Roger Hewitt and board member Rene Greff argued over Hewitt’s July 13 directive for 24-hour surveillance at the structures. Following a stabbing on the third floor of the Maynard Street parking structure, Hewitt told Republic Parking – which manages the structures – to prepare for around-the-clock surveillance.

Greff accused Hewitt of overstepping his authority by not seeking feedback from other DDA members before directing the change. Hewitt said he conferred with DDA Executive Director Susan Pollay, who told him he didn’t need a vote to make that decision.

In a phone interview this week with The Chronicle, Greff said that the other occasion came a few years earlier, when then-DDA board member Ed Shaffran undertook action to get snow removed from the downtown area – a move Greff said she thought was the right step to take, but which had not been consistent with the right process. [The snow removal is described by Shaffran in a 2006 interview.]

Language Proposed to Address Concerns

In the 2008 draft of the bylaws amendments, the change that was intended to clarify the roles of board members and officers in their relationship with the executive director was the addition of the following section:

Section 7 – Officer Authority. The statements of officer authority in this section represent the full authority of the officers. Except as set forth in this section, officers have no additional authority to act on behalf of the Authority. No officer has the authority to act unilaterally or direct the staff on behalf of the Authority.

That section did not survive in the version of the bylaws approved by the board last Wednesday. Instead, the issue is addressed from the angle of the executive director’s authority. A new section on executive director authorities, which had been added to the 2008 draft, survives in the version approved last week, and also includes the following sentence, which has been added to the current draft:

The Executive Director acts on the authority of the Board of  Directors as set forward in this document.

Also addressed in the 2008 version are the appointment of committee chairs – it’s clarified that if more than one board member volunteers to serve as the chair of a subcommittee, then it’s settled through election, not by decision by the board chair. That, too, survived in the version approved by the board last week.

DDA board member Gary Boren talks with Susan Pollay, DDA executive director, before the start of the Feb. 3 meeting. In the background: Russ Collins.

Also at last week’s meeting, a suggestion was made by board member Gary Boren to clarify the powers of the executive committee. The bylaws had historically been interpreted to mean that the board’s executive committee could act on behalf of the entire board between meetings.

That power has only been used one time in the history of the Ann Arbor DDA. In December 2003, the DDA executive committee voted to approve the city of Ann Arbor’s request for a loan for the purpose of buying the former YMCA property at 350 S. Fifth Ave.

[The city made the move in part to prevent the parcel's acquisition and development by the Ann Arbor Transportation Authority].

Gary Boren said that in discussion with other board members, he’d reached the conclusion that it had never been the intent to give the executive committee that kind of power, and suggested that the language in the bylaws providing that power be struck as follows:

Article V – Executive Committee: The officers of the Board, including Chair, Vice Chair, Treasurer and Recording Secretary shall constitute the executive committee. The last former Chair shall be a non-voting member and the Executive Director shall be a non-voting ex officio member of this committee. The executive committee shall have general supervision of the affairs of the Board of Directors of the Authority between its business meetings, fix the hours and place of meetings, make recommendations to the Board, and shall perform such other duties as specified in these By-Laws or as may be specified by the Board.

Outcome: Boren’s suggestion was accepted as a friendly amendment and the board voted unanimously to adopt the bylaws and to send them to the city council for approval. In response to a request from board member Jennifer Hall to Sandi Smith and Mayor Hieftje for their assistance in getting the item placed on the council’s agenda, Smith indicated she would help.

Republic Parking Administration Fee

The DDA board considered a resolution to award a “bonus” for Republic Parking for administration of the parking system – the “bonus” is a contractual mechanism.

Under contract with the DDA, the system is managed at cost by Republic with an additional $200,000 management fee. The management fee is paid in two parts – $150,000 that is fixed, and $50,000 based on performance criteria. The operations committee brought forward a recommendation to the board that $45,000 be specified as the amount that Republic had earned under the criteria. Roger Hewitt, who chairs the operations committee, pointed to customer surveys that showed improvement.

Describing the performance of Mark Lyons, general manager of Republic Parking, Hewitt said that he was the best operator the DDA had had since Hewitt had been on the board. Within the first year, Lyons had overseen the installation of the new electronic parking meters and that had been implemented “without a hitch,” Hewitt said. He said he would have awarded the entire $50,000 but that staff was recommending $45,000.

John Hieftje, Ann Arbor’s mayor, said that he had described often before why he did not support the awarding of the management fee, and voted against the measure. From last year’s Feb. 4, 2009 DDA board meeting when the annual issue arose:

After hearing praise from around the table for Republic Parking, Hieftje reiterated that he wasn’t saying anything negative about Republic Parking. But he said that this is a bonus to management, and it doesn’t filter down. He pointed out that city employees are also asked to do more and more as a part of their jobs and that in the current economic climate, he didn’t think bonuses were appropriate.

Outcome: The board approved the $45,000 administration fee, with dissent from Hieftje.

DDA Finances

-

Public Comment on DDA Finances

Brad Mikus introduced himself as a local accountant, and noted that he had been attending various public meetings in the last few months. [Editor's note: Based on The Chronicle's observations, these include, at least, meetings of the Ann Arbor city council, the DDA operations committee, the city's planning commission and the public art commission.] He thanked the board for videotaping their meetings and having them broadcast on CTN.

He asked the board to focus their attention on some specific aspects of the operations committee report on the DDA’s finances. The first was the apparent disconnect between an increase in revenues compared to the percentage increase in hourly patrons reflected in the parking report. The second point of concern was the large variance between projected parking revenues in the budget compared with the actual revenues collected so far this year. And finally, Mikus told the board that the calculation for the return on capital investment would be useful to include in the report.

Board Deliberations on DDA Finances: TIF and Parking

Roger Hewitt began the discussion of the finance figures by noting that this year had been particularly unusual because bonds have been sold in order to finance the underground parking garage on Fifth Avenue. However, they are using cash reserves to pay for some items in order for the bond money to accrue interest from investments.

The reason that parking revenues had not met budget estimates so far this year, Hewitt said, had to do with the fact that the budgeted numbers reflected a rate increase scenario that had not actually materialized. The DDA board had originally put forward a plan that would have seen somewhat higher and sooner rate increases than the one that was eventually proved by Ann Arbor’s city council.

Mayor John Hieftje suggested that the budget estimates be revised to reflect the parking rate increase that had actually been implemented, not the one that had originally been proposed.

In board discussion, Jennifer Hall drew out the fact that the parking reports don’t indicate the number of monthly permits associated with a particular structure. [This explains, at least in part, the mismatch noted by Mikus between percentage increases in hourly patrons at a structure and percentage increases in revenues at the structures. Percentage revenue increases are not as high as hourly patron increases.]

Board member Newcombe Clark was interested in seeing a breakdown of the tax increment financing (TIF) income from the largest contributors in the district – the larger buildings. Clark was concerned that reassessment, which he felt that many property owners would seek, would result in declines of TIF revenue of greater than the 5% that had already been seen.

In looking at parking and TIF revenue, Hewitt and board chair John Splitt both stressed that the 10-year budget was a more accurate gauge of how things looked.

Board Deliberations on DDA Finances: Housing Fund

During the operations committee report, Leah Gunn commented on the housing fund, noting that the board had had a chance to spend some money and that they had taken it – there was still $1 million in the fund balance. Joan Lowenstein added that it is money that is meant to be spent.

Following up during her report out from the partnerships committee, Sandi Smith, who co-chairs that committee, reported that the award of $400,000 with a possible additional $100,000 for the Near North housing project at the board’s last meeting had generated quite a bit of subsequent discussion in the community. It had prompted her to request a compilation of some statistics about the DDA board’s housing grant activity over the last 10 years.

The fund had been created in 1997, Smith reported, to support the city’s housing goal – to enhance the diversity of the population and housing stock in the downtown area. Really, Smith said, it’s not affordable housing, it’s just housing. Historically, though, it’s been interpreted always as affordable housing, she said.

Smith reported that in the last 10 years, 23 grants had been awarded and that the average amount of those grants had been around $80,000. Of the 23 grants, 11 had gone to one nonprofit – Avalon Housing. A total of $1.1 million from the housing fund had been obligated, Smith said. The breakdown of those dollars: (i) $400,000 for Village Green’s City Apartments project at First & Washington, contingent on issuance of a certificate of occupancy; (ii) $207,000 for the third year of a grant to Avalon; and (iii) $400,000 to $500,000 for Near North.

The annual contribution to the housing fund that the DDA has made historically has been $200,000.

Board member John Mouat wanted to know how much of the DDA’s housing fund had gone to the Ann Arbor Housing Commission. At the board table, Smith looked up the number and reported that Baker Commons, an Ann Arbor Housing Commission property, had received $93,445.

DDA Deliberations on DDA Finances: Delinquent Accounts

Discussing some of the information provided in connection with the Republic Parking performance review – but not among the actual criteria used for evaluation – Jennifer Hall noted that two parking accounts had been late, and that they accounted for 45% of revenues.

Joe Morehouse, deputy executive director of the DDA, told Hall that those accounts now had been paid – it took a couple of personal phone calls, he said. Asked by Hall who the delinquent accounts belonged to, Roger Hewitt said one is a private entity that he would rather not disclose and that the other was a public entity that he would rather not disclose. It emerged in discussion that the public entity was the city of Ann Arbor.

Newcombe Clark expressed his assumption that the DDA assessed late fees for late payments such as these – but the DDA apparently does not assess such fees.

Transportation and Trees

Reporting out for the transportation committee, John Mouatt covered the discussion the committee was starting to have about the Fourth Avenue corridor. [Chronicle coverage: "DDA Floats Idea for Fourth Avenue"]

He also reported that city forester Kerry Gray had attended the last committee meeting to provide information about trees in the downtown area. There were 1,400 trees, 46% of which were small and recently planted. The city’s goal was to broaden the diversity of species in the downtown. Mouatt described the ongoing efforts of the committee to achieve a more pedestrian friendly downtown.

Those efforts included looking at a proposed sandwich sign ordinance – the city council approved that ordinance on its first reading at its Feb. 1, 2010 meeting. At the transportation committee meeting, Keith Orr had noted that such sandwich signs were generally regarded as a positive thing, but also posed a potential hazard.

Commenting on the issue of trees in the downtown, Russ Collins encouraged the transportation committee to think about trees in the context of the downtown area. In Ann Arbor, which is essentially a suburban community, Collins said, it’s easy to think about amenities from the point of view of a suburban community. Instead, he suggested that a downtown reflected a fundamentally different lifestyle than a neighborhood – which had to do with street vitality and extended hours. Residents of Ann Arbor in general, Collins said, had a hard time visualizing how downtown could be and should be different from the neighborhoods.

Something that trees did in the context of an urban center, Collins said, was to cover architectural details that helped make an urban center different, interactive and vital, someplace you can go … “when you’re alone” … and then Collins trailed off. [Editor's note: Despite the resemblance, The Chronicle is confident that Collins is not the tuxedo-ed young gentleman to Petula Clark's left in this BBC video of the "Downtown" song, to which Collins was alluding.]

Gary Boren said he agreed with Collins, except for the idea that it was necessarily the transportation committee’s responsibility to achieve the effective communication of what an urban center could be. Boren noted that the reason the transportation committee wound up dealing with the issue was that walking is transportation, and that street trees are related to the pedestrian experience.

But conveying the distinction between a suburban environment as contrasted with an urban environment, Boren said, was a marketing challenge and that would most naturally fall to the partnerships committee – Collins is one of the two co-chairs of the partnerships committee. Collins responded to Boren’s observation by saying: “Point taken.”

In his remarks, John Hieftje commented that it was a huge challenge to grow trees downtown, and in the neighborhoods some of the street trees now block streetlights, so that it was a complicated business to grow trees. He reminded DDA board members that the city had a plan to plant about 1,000 trees a year and that so far this year they had planted 700.

Jennifer Hall responded by saying that she would like to refocus the discussion on what the transportation committee had been talking about. Trees had come up, she said, because of the role in defining the pedestrian experience which included shade, aesthetics, and visual diversity. Besides trees, the transportation committee had looked at elements like awnings, sandwich boards, vertical plantings and a variety of other elements, she said.

Newcombe Clark commented that the idea of “ripping out parking” on the first floor of the Fourth and William parking deck would have seemed like sacrilege a few years ago. He called it progressive to think about limiting parking and suggested that the move could be “game changing” – independent of what happened to future development of the YMCA lot or at the Library Lot. Those city-owned parcels were not under the DDA’s control, he noted, but the parking structure was more in the DDA’s hands.

Leah Gunn reiterated the point that she’d made before about the possibility of establishing retail incubator space on the ground floor of the Fourth and William parking structure, saying that the board needed to be respectful of merchants who had already made a commitment to the downtown area. At the transportation committee meeting, Gunn had expressed her concern that the DDA might wind up subsidizing commercial enterprises that would be in competition with already established businesses.

Library Lot Update

In his report from the downtown citizens advisory commission, Ray Detter had discussed the development of the Library Lot and the area surrounding it. Sandi Smith picked up on that thread, saying she felt the partnerships committee should look at higher level planning of a four- to five-block area around the Library Lot, and she wanted it put on the agenda.

In his report, Detter also mentioned that they had been visited by Alan Haber and Alice Ralph – the two Ann Arbor residents who had submitted a proposal on behalf of the Committee for the Commons, in response to the city of Ann Arbor’s request for proposals for development of the Library Lot. Detter said the downtown citizens advisory commission did not support the idea of a community commons, but that they also did not necessarily support a hotel/conference center. What they did support was some kind of mixed-used development that integrated with the surrounding area.

When he reported out from the Library Lot RFP advisory committee, John Splitt described the two days of interviews that had been conducted with five of the proposers in January. He reported that two of them, both for hotel/conference centers, would be given further consideration by the committee. [See Chronicle coverage: "Hotel/Conference Center Ideas Go Forward"]

The Library Lot was also part of the update on construction projects from the capital improvements committee, also given by John Splitt. Two holes had been drilled so far for the underground parking garage project, he said. A greater number of large and small rocks than anticipated been encountered in the two holes and the construction team was putting together a “bigger and more powerful drilling rig.”

The Jan. 17 switchover of DTE utilities had gone smoothly, Splitt reported. One of the largest bid packages associated with the project – for concrete – will go out next week, he said. Those bids would be opened in early March.

In the same geographic vicinity as the Library Lot, the Fifth and Division street improvements project will restart in April, with a plan to complete work on Division Street before starting on Fifth Avenue, Splitt said.

415 W. Washington

Also as part of his report out from the downtown citizens advisory commission, Ray Detter reported that Marsha Chamberlain, who is head of the Ann Arbor Art Center, and Ray Fullerton, who serves on the Allen Creek Greenway Conservancy board, had expressed surprise that the topic of the 415 W. Washington parcel was being opened up again.  [Chronicle coverage: "City Restarts 415 W. Washington Process"] Even though they felt it was in some ways a diversion from the Library Lot development, they still supported it. Detter referred to the previous RFP process connected with the 415 W. Washington parcel as a “murky mess.”

John Hieftje reported to the DDA board on the city council’s deliberations on the 415 W. Washington resolution that council had passed on Monday.

Regarding the 415 W. Washington lot and city council’s Monday decision to restart a committee process to explore a vision involving an arts center and greenway park at the location, board member Jennifer Hall noted that it was currently a temporary parking lot – which generated revenues to the city budget. She suggested that the city consider the possibility of putting that money into a specific fund where it would accumulate until such time as it was ready for use.

A2D2 Rezoning

In reporting out from the A2D2 oversight committee on which he serves, Roger Hewitt stated that the last meeting had been canceled and so he had nothing to report.

Later in the meeting, John Hieftje told Hewitt that the A2D2 oversight committee had actually been dissolved. This seemed to come as news to Hewitt, who said simply, “Oh!”

[The A2D2 process was a major rezoning initiative for downtown Ann Arbor, which recently received final approval from city council. Remaining work on the project involves establishing design guidelines. See Chronicle coverage of the Jan. 31, 2010 city council caucus. At its Feb. 1 meeting, the city council established a task force to complete the design guidelines part of the project. The council, at its Jan. 19 meeting, had dissolved the A2D2 oversight committee.]

Courthouse Square

Ray Detter, in his report on the meeting of the downtown citizens advisory commission, said they had focused some conversation on the situation at Courthouse Square –  a senior housing development located at the southwest corner of Huron and Fourth Avenue. Detter said that they had heard from a new tenant at Courthouse Square, who had just moved in – the new tenant said that something needed to be done about the management. [At the February DDA board meeting a year ago, conditions at Courthouse Square were also included in Detter's report.]

Regarding the situation at Courthouse Square, John Hieftje commented that he had spoken with Sandi Smith and Sabra Briere [city councilmembers representing Ward 1] and that they, along with county commissioner and DDA board member Leah Gunn, had met and were well aware of the situation. He said that several inspections had been done of the facility, beyond what would normally be required, and that as far as they understood, the building was up to code.

Thanks

During public commentary at the beginning of the meeting, Deanne Relyea spoke on behalf of the Kerrytown District Association. She thanked the board for grants that they had awarded to the KDA for various activities and projects. She noted that the Kerrytown District Association is the smallest of the merchant associations in downtown Ann Arbor, but that it was a good one. She said that it offered something different from the others, citing the Nash Bash in August and KindleFest in December as examples.

Present: Gary Boren, Newcombe Clark, Jennifer S. Hall, Roger Hewitt, John Hieftje, John Splitt, Sandi Smith, Leah Gunn, Russ Collins, Joan Lowenstein, John Mouat, Keith Orr.

Absent: Keith Orr.

Next board meeting: Noon on Wednesday, March 3, 2010 at the DDA offices, 150 S. Fifth Ave., Suite 301. [confirm date]

Sites A, B, C, identified as possible locations to build affordable housing units. The image is linked to a higher resolution file in which dimensions are legible.

Ann Arbor City Council Working Session (Dec. 8, 2008) At a council working session on Monday evening, attended by all councilmembers including the mayor, one option (consisting of three different sites) was presented for how to replace the 100 units of affordable housing previously provided by the YMCA building at Fifth and William streets.

The three sites that were offered by city staff to council for consideration have some different constraints, but the proposed construction on each site is similar. All three sites are located along a roughly one-block long stretch of Fourth Avenue from the south side of Ann Street to the north side of Catherine Street.

Based on official council action to date, this set of three sites can be fairly seen as one option of three still under conceptual consideration for a replacement location for the 100 affordable units: (i) the old YMCA site, (ii) an alternate downtown location, and (iii) a location outside of downtown.

We begin with some brief background of the history of these 100 units before December 2007, trace the interaction between council and the Housing and Human Services Advisory Board between December 2007 and May 2008, and finally summarize the presentation and council discussion from the council’s working session on Monday in customary Chronicle meeting-watch style.

Brief background

In connection with the construction of the new YMCA building located at 2nd and Washington streets, the city acquired the old YMCA building in 2003 in order to preserve the 100 units of affordable housing that the building offered. The YMCA had no plans to incorporate residential units at its new site, and neither did the Ann Arbor Transportation Authority, which had contemplated redeveloping the old building as a transit center and office headquarters.

In 2005 mechanical systems in the old YMCA building failed to such an extent that residents needed to be moved out of the building. City staff led by Jayne Miller, community services area administrator, worked over the following few years to find alternate accommodations for them, which they did. The city maintained a stated commitment to eventually replacing the 100 units, but not necessarily at the site of the old YMCA. A private development at that site, William Street Station, was to include some affordable units, but city council pulled the plug on that project, when the developer failed to meet various deadlines.

Seeing no immediate prospects for re-development of the property, the city (in coordination with the DDA) took the first step that any re-development would require: demolition of the building. Since summer 2008 the site has served as a surface parking lot. At its last meeting on Dec. 1, city council refinanced the property at the site of the old YMCA, which it purchased for $3.5 million dollars.

December 2007 to May 2008

At its Dec. 3, 2007 meeting a little over a year ago, city council passed a resolution directing the Housing and Human Services Advisory Board (HHSAB) to research and study the question of where to develop 100 units of affordable housing to replace those at the former YMCA site at Fifth and William streets and to report back to council no later than May 31, 2008 with a recommendation. The directive from council was specific with the issues to be addressed. From the language of the resolution (in which “the Site” means the old YMCA site):

RESOLVED, That the HHSAB’s Report shall address, at a minimum, the following issues:

• Whether the 100 units of affordable housing should be located on the Site or elsewhere;
• Whether the 100 units of affordable housing should be developed on one site or dispersed in a variety of locations;
• Whether the 100 units of affordable housing should be located in the downtown area, outside the downtown area, or dispersed both inside and outside the downtown area;
• Likely requirements and possible sources of funding for development of the 100 units of affordable housing, including provisions of social services for the housing residents;
• Whether non-profit developers, for-profit developers, and social service providers in the community have sufficient capacity to develop and provide services for 100 units of affordable housing within the next four (4) years; and
• Any other challenges or opportunities related to the development of 100 units of affordable housing for low-income residents.

HHSAB returned its recommendation on May 1, 2008 in a memo to council that identified the old YMCA site as the best location for development of the 100 units of affordable housing, and recommended that city council direct the city administrator to issue an RFP (request for proposals) for the site:

Recommendation: Based on the information provided above, the HHSAB recommends that City Council charge the City Administrator with re-issuing an RFP to develop 100 units of permanent supportive housing on the former YMCA site.

However, in the same memo, HHSAB provided alternatives to that recommendation for city council to consider as well.

The HHSAB recognizes that Council’s decision to accept, reject, or amend this recommendation will be based on a complex array of issues that includes financial and neighborhood considerations. Alternative options are presented below for Council’s reference and consideration.
Alternatives:

1. Council directs the City Administrator to research and recommend an alternative downtown or near downtown location (within ½ mile of the DDA district) for 100 units of permanent supportive housing by October 2008.
   a. PROS
   i. Accessibility to public transportation and many support services
   ii. The City and County both own surface parking lots that could be developed as affordable housing, with underground public parking
   iii. A stand-alone facility would make the financing less complicated than a mixed-use development
   iv. Proceeds, after paying off debts, from the sale of the YMCA site could be used to provide support service to these units
   b. CONS
   i. Potential neighborhood opposition
   ii. The City will need to secure the site if it is not currently owned by the City
2. Council directs the City Administrator to issue a Request for Qualification to select a developer to work with the Office of Community Development to develop 100 units of permanent supportive housing on one or two sites anywhere in the City, including the downtown. Council directs the OCD to work with the HHSAB to draft an RFQ for Council by October 2008.

City council took no formal action based on the recommendation of HHSAB or its alternatives that resulted in the analysis of sites it heard on Monday evening. However, the presentation made by staff is consistent with the first of the two alternatives referenced by HHSAB.

Presentation by Staff to Working Session

[.pdf containing materials provided to council is here.]

Jayne Miller introduced the presentation by saying that she wouldn’t be delving into the history of the 100 units. The focus of the presentation, she said, would be the scenarios associated with constructing units on three different publicly-owned sites. She introduced staff who had been working on the analysis: Mary Jo Callan, community development director; Jennifer L. Hall, housing program analyst for community development; Pete Perala, with systems planning in the city; and Alexis DiLeo with the planning department.

Callan led off with a description of the population that the new units of affordable housing would serve: individuals (as contrasted with families) who have a history of struggling to achieve and maintain housing. It is a very low-income population that struggles to maintain housing, she said, which might have co-occurring challenges related to substance abuse, mental illness, or physical disability. It’s a population that requires intensive services to help them maintain housing. Success in providing housing for this population, Callan said, is contingent on wrapping supports around them, such as social services (including mental health), life skills, and a variety of other supports. To increase the stability and safety of this population, the approach being explored is a “front-desk model” which provides controlled access and a 24-hour desk for check-in.

DiLeo laid out the zoning issues connected with each of the three sites. Site A is at the southwest corner of Fourth Avenue and Ann Street. Site B is on the southwest corner of Fourth and Catherine. Catherine and Ann streets. And site C is at the northwest corner of Fourth and Catherine Fourth Avenue and Ann Street. Two of the sites, A and B, are surface parking facilities owned by the county. Site A includes underground parking as well. Site C is a surface parking lot owned by the city. The existing zoning for site A is PL, public land, which has no maximum or minimum setbacks, maximum or minimum heights, no floor area requirements. Sites B and C are currently zoned C2B/R (commercial business district with residential), which reverts to R4C standards (multiple family dwelling district) if developed for residential use.

Under current zoning, DiLeo said, anyone could build eight dwelling units on those sites. So under current zoning, she said, they would not be suitable for development as housing where economies of scale would be required, as is the case with affordable housing. But sites B and C are already slated to be rezoned as a part of the A2D2 rezoning effort, DiLeo continued, and no additional action would be needed for that rezoning to take place. Under A2D2, the parcels would be zoned as D2, which allows a 200% floor area ratio, with up to 400% with the affordable housing premium.

DiLeo explained that the 55-foot wide building design recommended for each parcel was a function of industry standards for a straightforward plain vanilla development: a double-loaded corridor – a hallway down the center with units on each side. The square footage of the buildings reflect individual unit sizes of around 450 square feet, whether that is a 1-bedroom apartment or an efficiency. All three sites, DiLeo said, could support 100 or more units. Four stories, she explained, is the threshold between stick-built construction (wood construction) and steel frame. Because steel comes from China, and steel is bought by China as well, she said that the initial construction costs for steel frame building would be significantly higher. That meant, she said, that to achieve economy of scale, a steel frame building would need to be built much taller than just five stories.

Their scenarios for the three sites would focus therefore on four-story stick-built options. DiLeo described how site A would really have only three stories of usable space, because the bottom story would be largely open, in order to preserve access to the ramp to the underground parking garage at that site. Sites B and C would have usable space starting from ground level. So all three sites, DiLeo said, could support 60 units on a stick-built scenario. The footprint of the buildings on all three sites would be in the 9,000-square-foot range.

Perala offered a description of the utilities infrastructure for the three sites. He said there were storm water pipes already in place that could move water from the sites. All three sites would require roughly similar investments to address storm water, probably in the $40,000-$50,000 range for onsite detention, and around $120,000 for installation of water quality improvements – swirl concentrators, for example. A green roof on any of the sites would cost in the range of $250,000, he said.

As for drinking water, Perala said that there are a lot of 6-inch and 8-inch pipes in the area, and that they would look to improve the grid system with 12-inch pipes, in order to ensure proper flow for fire protection. As you go from site A to B to C, heading north, the cost goes incrementally up, he said, to establish that grid. On the sanitary sewer side, he described how all three sites could use the following flow route: a southern route starting between B and C and heading east, turning south, then heading back west along Ann Street. On that route, some infrastructure improvement would be required. Site C has a second option, to flow straight north up Fourth Avenue, with no infrastructure improvements required. Footing drain disconnects for the three sites would cost in the range of $90,000-$100,000.

Hall explained why staff had looked at the three sites being presented. They had considered sites all around the city on acquisition and rehab scenarios both inside and outside of downtown. Citing the recommendation of HHSAB, she said that they had focused on downtown sites. There was already community support for a high number of low-income residents in one location downtown. In that environment, she said, they can more easily blend in to the surrounding community. She noted the difference in impact of 100 units of housing on a single-family neighborhood versus the downtown. Availability of services, like the Blake Transit Center, was another factor she cited.

One of the criteria for the land was that it be publicly owned, because the city or county cannot issue an RFP on a property that they do not own. Other sites the city owns (on Washington and Main streets) did not come into consideration because they are in a flood plain and thus did not meet basic environmental requirements. Two types of scenarios were considered: (i) a minimum of 60 units, which is the minimum to achieve the economies of scale for a secured front door and services, and (ii) a 100-unit scenario, which is more expensive from the point of view of construction (steel frame), but is less expensive in terms of the cost per resident to provide supportive services.

Hall contrasted the type of units proposed for any of the three sites with those in the old YMCA, which were 10×10-foot living spaces, with a common bathroom and kitchenette. In addition to not being a best-practice model, Hall said that such a project would result in funding challenges, because investors in tax-credits (the likely funding model) would be looking for a hedge, in case the project did not succeed for its originally intended purpose. Such investors, she said, don’t look at the fact that in the community we intend for the project to serve a low-income population, but rather at whether it’s at least possible to convert the building to market-rate housing. And the dorm-style accommodations of the old YMCA would not be convertible in that way.

Of the costs that were factored into the scenarios for each of the three sites, Hall said that land cost was not one of them. Donated land, she explained, enhanced the application for tax credits. It’s not an eligible cost to be paid by tax-credit funding, so if the land were not donated, the funding for land acquisition would need to come from elsewhere, perhaps federal funds.

The cost scenarios being presented, stressed Hall, were not estimates based on hiring architects and engineers, but rather on conversations with them, in order to get a rough idea. The rent to be charged for each unit would likely be $200-$300 per unit, depending on the person’s income. That means that annual revenue in rent would amount to around $3,000 per unit. Based on projects funded through other nonprofits, the cost of maintaining a facility is closer to $4,500 to $5,500 per unit per year. As a consequence, she said, it would be necessary to find a way to establish project-based vouchers to make up the gap. She’d had conversations with Michigan State Housing Development Authority (MSHDA) and the Ann Arbor Housing Commission to establish project-based vouchers, because otherwise, “it will not work.”

But Hall concluded by pointing to the financial summary in the materials provided to council and saying, “it appears to be do-able.”

Callan concluded the presentation by discussing the operational costs after construction. She said that the per-unit cost for services would be around $2,700 per year on a 100-unit scenario, versus $3,800 on a 60-unit scenario.

Council Discussion

Leigh Greden led off council questions by asking Callan how the $3,800 figure had been achieved, when previously the number $5,000 had been discussed. Callan stressed that the higher number did not include “mainstream” funding sources. Greden followed up with a question about the “city cash” required, an amount that is referenced in the tables provided in the council packet (the lowest amount for any scenario is $141,870 and the highest amount is $368,117). He got clarification that this could include various types of city funds (including HOME funds), not just General Fund dollars. In that light, he characterized the amounts as “reasonable.”

Councilmember Tony Derezinski asked about the percentage of potential clientele that would be veterans, and whether any outreach to veterans organizations had taken place. Callan said that she would be guessing about percentages but could provide that information. Hall also responded to the question by stressing that they tried to not predetermine the population. She said that while the developer is putting the proposal together, they would access various funding as set-asides for VA units, for example, and that the developer would pull funding from a range of sources in order to fund a mix of people. Derezinski also asked whether the population to be served would include families. Hall said that the idea was to serve individuals and not families, citing the individual units that were lost at the old YMCA as the gap that had been created in the housing inventory. Mixing the two populations, she said, would also be more challenging.

Derezinski also inquired about how the possible mix of retail on ground floors of the development would work. Hall clarified that on the 4-story stick-built scenarios (60 units), there would not be room for retail. On the 100-unit scenario, which would mean 8-9 stories, retail on the ground floor would be possible on sites B and C, but not on A, due to the need to keep access open for the underground parking ramp.

Councilmember Carsten Hohnke asked what other units had been created since the original 100 units from the YMCA had been lost. He also asked staff to speak to the overall need for this type of housing in the community. Hall cited the Blueprint to End Homelessness, which calls for creation of 500 units of supportive housing – a step beyond affordable housing. She described a 20-unit development by Avalon Housing, of which six were set aside for chronically homeless people. She also described other projects that would add between 20 to 40 units of supportive housing, which were not under development yet, but which had realistic prospects.

Councilmember Sabra Briere noted that the three locations cited are across the street from the Farmers Market, and across the street from the Fourth Avenue business district, which she described as “burgeoning business districts.” She said that a number of people would be concerned about the impact of construction, in an area that will be affected by other construction projects in the near future (an allusion to Fifth and Division street improvements as well as Farmers Market renovation). She also said that a number of people would be concerned about the population of people who would be coming in. She asked staff how they would address those concerns. Hall and Callan asked Jayne Miller to handle the question. Miller stressed that their intent was to take the presentation to the public and get feedback from the public on it about the three sites and to take feedback into consideration as decisions were made about moving forward.

Councilmember Sandi Smith got clarification that the parking at site A was not secured parking and that there were 85 spaces underground.

Councilmember Mike Anglin characterized the plan as “well-thought-out” and asked for examples of similar operations like the ones proposed, citing one in New York that he had seen, where residents seemed to fit into the community. Hall said that the model of supportive housing was used widely across the country and said she would send along examples by email. (Some of those are now attached to the working session agenda.) Locally, Callan suggested that an example of “fears that didn’t pan out” about the influx of the population into the neighborhood was the former YMCA residents who were relocated to Tuscan Creek.

Councilmember Christopher Taylor followed up on Briere’s question by asking whether there had been participation of the business community to date in connection with the formulation of the project. Hall said that the HHSAB in taking its charge from council (to make a recommendation about where to locate the replacement units) held two public hearings and had input from the business community, citing Jesse Berstein Bernstein, who is the president of the Ann Arbor Area Chamber of Commerce. She said that it was a project on which they would continue to seek input from the public, including the business community.

Taylor then asked whether Hall would characterize it more as “a beginning proposal” than “a semi-formulated” proposal, which Hall said she would.

Greden followed up on comments by Briere and Anglin by saying that council and community needed to approach the issue “without the initial assumption that this population consists of troublemakers.”

With respect to the long-term operating costs, Greden noted that vouchers seemed to be key to making it work and asked how they could be obtained. Hall said that a main source of project-based vouchers was MSHDA, which likes to see the local housing commission match them. Hall said that this would require an administratively intensive effort on the part of the local housing commission, but that they had begun discussion to make sure there was capacity to do that. Greden said that the council’s new liaison to the housing commission, Tony Derezinski, would look forward to working with staff and the commission to help the process.

Clarifications and Reactions

One point that took some time for The Chronicle to clarify was the fact that the presentation heard at their working session was not the result of a council directive. In particular, there was no directive from council as a body to staff to remove the old Y site from consideration for development of replacement units. Thanks to councilmembers Margie Teall, Leigh Greden, Sabra Briere, director of community services Jayne Miller, and Anissa Bowden in the city clerk’s office, who all helped us establish that – either by email or by phone. Thanks also to Jennifer L. Hall for insight into why tax-credit investors care about unit size in a development like this.

After the presentation, Ray Detter (Downtown Citizens Advisory Council) and Christine Crockett (Old Fourth Ward Association) spoke briefly with The Chronicle. They indicated that they still thought of the old YMCA site as “on the table” as far as where to build replacement units for those lost there. They also talked about the fact that the business district along Fourth Avenue was gaining strength but was “still fragile,” a sentiment addressed by Briere during the council discussion.

Speaking by phone with councilmember Briere, she said she saw the sites partly from the historical perspective of a decision-making process regarding location selection for the police-courts facility now to be built on the site of the Larcom building. With respect to the county parking lot, she wondered: “Why is the city willing to house homeless people there but not judges?”

Addendum: After this article was first published, we gained some insight into a natural question that might have arisen in some readers’ minds: if the city is contemplating some scenarios that would require the sale/donation of county properties, has anyone at the county been consulted? Leigh Greden provided this insight: “Roger Fraser organized a meeting of me, [Bob] Guenzel, and [Dick] Soble as a follow-up to the HHSAB report which recommended that alternative sites to the old Y would be OK. At that meeting, we agreed we should look at alternative sites, including County-owned sites. Roger then directed City staff to begin planning, which led to the report.” Guenzel is the Washtenaw County administrator, and Soble is chair of the Washtenaw Housing Alliance.

Editor’s note: The Chronicle did not cover other discussions at Monday’s working session, including discussion of the Community Success plan and the golf course finances.

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

Absent: None

Old YMCA site at Fifth and William streets, looking northwest.

Site A: Fourth & Ann streets, looking southwest.

Site B: Fourth & Catherine streets, looking southwest.

Site C: Fourth & Catherine streets, looking northwest.

Public Commentary

Tom Partridge: The meeting was bookended, as it often is, with commentary from Tom Partridge. In his turn at the beginning of the meeting he reiterated a challenge he’d made at the last council meeting: for city council to pass a resolution addressed to state- and national-level elected representatives to “protect and save existing jobs in Michigan,” arguing that the economy of Michigan, the midwest, and the entire nation hangs in the balance. Partridge also called on citizens to write, email, call, and demonstrate, saying that the future of the nation is at stake.

In his second turn at the end of the meeting, Partridge responded to news from city administrator Roger Fraser that at next Monday’s (Dec. 8) working session, there would be possible approaches introduced for building 100 units of affordable housing to replace the units that were lost when the YMCA building at the corner of Fifth and William was purchased by the city of Ann Arbor some five years ago. Soon thereafter the building suffered failure in its mechanical systems that required relocation of its residents. Saying that the election of Barack Obama heralded a time of change comparable to that ushered in by Franklin Roosevelt and John F. Kennedy, Partridge said that council had been sidestepping its responsibility to those less fortunate, and that the 100 units of affordable housing that were to be replaced were not enough.

Andrea Clyne: Clyne updated council on the result of a teen summer program at the Community Action Network that had a focus on developing entrepreneurial skills: production of a calendar featuring local politicians and their pets. Clyne presented councilmembers with calendars and stressed that sale of the calendars is a fundraiser for CAN, a nonprofit that provides support services for local public housing communities, as well as the Humane Society of Huron Valley. Note: Current councilmember Stephen Rapundalo and Ann Arbor mayor John Hieftje are included in the calendar.

Henry Herskovitz: Herskovitz organized his comments by sharing some recent stories from the news, some less recent history, and a Christmas wish. The recent news stories included food trucks and a boat turned away from Gaza by Israeli military, the closure of half the bakeries in Gaza, and the suggestion of a Likud Party member that Palestinean prisoners be used as shields. Herskovitz said the U.S. was responsible for the situation in Gaza: “It is a crime to starve children. And yet, we do it.” The historical perspective introduced by Herskovitz was that outlined in the book The Ethnic Cleansing of Palestine by Ilan Pappe, with Herskovitz highlighting the book’s indictment of David Ben-Gurion. The Christmas wish that Herskovitz expressed was that somehow the content of Pappe’s book would reach the minds of everyone listening. It was further his wish that this might allow them, when they heard a person say that Israel was attacked as soon as statehood was declared, to tell that person they were wrong.

City Apartments

Jon Frank, vice president of development for Village Green, spoke to council about the project to be built on the southeast corner of First and Washington Streets. He reiterated many of the same themes from the previous night’s caucus and the Nov. 6 city council meeting. These included a focus on the involvement of the community in the design process: the DDA, the Old West Side Association, the Downtown Citizens Advisory Council. Ray Detter, of the Downtown Citizens Advisory Council, spoke in favor of the project, citing the fact that it met all the requirements of the RFP, increased public parking capacity (a total of 244 spaces) and increased the diversity of housing with 10 percent of the housing units for people earning 50-80% of the annual median income.

Tom Partridge spoke at the public hearings both for the PUD and the site plan, criticizing the 10 percent affordable housing as too low and the 50-80% of AMI figure as too high. He called on council to become an example for other city councils across the country by building into the city charter a requirement that any rezoning (as with the PUD) include a requirement for affordable housing and to establish accessibility requirements for residents with physical challenges.

Barabara Hall, of the Old West Side Association board, spoke in support of the project, confirming the claim of Jon Frank that Village Green had worked constructively with the community. She alluded to a letter of support from the Old West Side Association.

Mark Hodesh, owner of Downtown Home & Garden, which is situated across the alley from the proposed City Apartments project, began his comments by saying, “I come as a friend!” He said that in the last 24 hours, a lot of issues had come together. The four issues he’d identified had been, he felt, largely resolved: (i) snow removal had been addressed with Mike Bergren, assistant field operations manager with the city of Ann Arbor, who has elevated the alley to the first of three levels of priority assigned to streets for snow clearing, (ii) the DDA, via its executive director, Susan Pollay (also in attendance at the council meeting), would assure the adequacy of the lighting in the alley as a pedestrian walkway, (iii) traffic would be addressed by moving the loading and unloading signage to the south end of the structure, and (iv) he was content with the four-hour window for trash pick up. Based on conversation with councilmember Christopher Taylor after the meeting, The Chronicle understands that this four-hour window was a part of the construction agreement. We were not successful in locating the electronic version of that document on the city’s website.

On this last point about trash pickup, Frank had expressed some dissatisfaction, saying that this window was a requirement not imposed anywhere else in the city.

Council’s deliberations were mostly congratulatory for the long and hard effort of collaboration that had resulted in the final plan. Councilmember Sabra Briere said that even though she’d not been a part of the effort, which she described as “amazing,” she’d observed it closely and would be supporting it. Councilmember Margie Teall said that she’d seen the project from the perspective of someone who had been involved and that she was impressed with the willingness of the developer to work cooperatively with the community as well as the track record of the developer elsewhere in the country.

Councilmember Christopher Taylor echoed the sentiments of his colleagues, commending the co-working that the developer had done with the community. He proposed two amendments to the development agreement that would address the concerns of Hodesh with respect to the traffic and the lighting. The first amendment would move signage from the north end of the alley to the south. The second one addressed the lighting issues. Both amendments passed unanimously, with councilmember Leigh Greden first confirming that both Hodesh and Frank were amenable to them.

Outcome: passed unanimously

City Place

This was the first reading for the PUD rezoning after it had failed to win the recommendation of the planning commission. Councilmember Carsten Hohnke noted that the City Place development offered some of the same kind of benefits that City Apartments did, but with a key difference: the location of City Place along South Fifth Avenue falls outside the core of downtown.

Hohnke said he felt that the public benefit from the project did not rise to the level that would justify the granting of the PUD re-zoning, but that he wanted to hear from the public, so was willing to move it along to a second reading and public hearing, though he had “significant reservations.”

Councilmember Briere echoed the sentiments of Hohnke and made a point of complimenting the city staff who had prepared the packet, because the write-up on the history of the project and the history of the area made very clear what she was looking at. She expressed the same significant reservations as Hohnke.

Outcome: passed unanimously to second reading

Police-Courts Facility

At the beginning of the meeting, council received a briefing from Kenneth Clein of the Quinn Evans design team on the status of the police-courts project, also known as the municipal center. It’s currently in a phase where bid packages are being developed, with the first of them being issued the following day (Dec. 2). Pending council approval, construction on the project is due to start in March 2009, with a closed building shell for the new addition due by November 2009. Clein walked council through several drawings of the project, including highlights of the north and south courtyard areas.

Council later considered an amendment to the agreement with Quinn Evans in the amount of $411,003.

Councilmember Briere had questions for Bill Wheeler – who is major projects manager for the city of Ann Arbor – related to the $212,790 specified in the amendment for audio visual, telecommunications, and building security.

Where will the audio visual equipment go and what is its scope? Wheeler gave as an example police interview rooms where there is a need to have equipment to fully document conversations, as well as courtrooms where there is a need to have adequate AV support to display evidence such as video shot from a dashboard camera of a police vehicle. Briere got clarification from Wheeler that the dollars for building security were for the Larcom rennovation as well as for the new addition. Councilmember Teall got clarification from Wheeler that the building security included such items as door locks and video monitoring.

Briere noted that the drawings for the public meeting space that would also be the new council meeting space seemed “fully realized.” She asked what would happen if council did not appropriate the money for the additional public meeting area. Wheeler said that the money had already been appropriated and that it was simply a question of whether the guaranteed maximum price of the building – which would be determined when bids came back in January 2009 – is low enough for the city to afford it. If it is low enough, Wheeler, said, then it will become a reality.

This prompted councilmember Greden to clarify that the authorization for construction of the public meeting room, as well as the main part of the new addition, would still need council authorization to move forward. Wheeler acknowledged this was the case, and that the intent was to bring the resolution before council on Feb. 2, 2009 to authorize the construction.

Greden also emphasized that the amendment to the agreement with the architect that council was considering that night did not represent an increase in the size of the project budget and that the funds for that had already been appropriated. Greden also responded to councilmember Mike Anglin’s fiscal concerns that the $144,145 for LEED certification might simply buy the building a plaque to attest to building features that the city was going to implement anyway. Greden stressed that “our friends at the DDA” would be funding that. The substantive part of Anglin’s concern (what does the LEED certification actually buy?) had been addressed by Wheeler, who said the measurement study to confirm that the building was actually using energy in the way that was intended could last a year after completion of construction.

Outcome: passed with one vote against, from Briere, who did not request a roll call vote

Skatepark

The council chambers were almost at capacity due to the large number of supporters of the skatepark proposed for Veterans Park. Trevor Staples and Dug Song, of the Skatepark Action Committee, had front row seats and allowed The Chronicle to squeeze in amongst them because we arrived only minutes before the meeting started. Council passed the memorandum of intent and fund agreement for development of the park. The memorandum does not seem to be included in the electronic council packet available online or anywhere else on the city’s website, but we’re working on tracking that down.

Outcome: passed unanimously without discussion

Continued Financing of Old YMCA Property

The item on the agenda was to approve a continued financing of the property on the corner of Fifth and William through interest-only payments. The Bank of Ann Arbor, which will provide the financing, was one of two out of seven institutions that reponded to the request for bids. The other one was Chase Equipment Leasing, whose bid of a 6.14% interest rate did not compare favorably with the 3.89% offered by the Bank of Ann Arbor.

In deliberations, councilmember Sandi Smith said that she would support the continued financing of the property, because they had no other choice, but that she urged her colleagues to begin thinking of master planning the area so that the city could divest itself of the property as soon as possible. Smith noted that given the $5,000 cost of supporting a homeless person, the interest-only payments could be used to support 27 people. The math goes like this: ($3,500,000)*(.0389)/5,000.

Although Smith introduced her comments by acknowledging that the situation had a long history, predating the service on council of many who were currently at the table, Hieftje began his turn by reminding Smith that she was “not here” when the decision was made to acquire the property, and pointing out that it was only her second council meeting.

Hieftje then said that it was widely acknowledged that the property was worth more than the city had paid for it, and that it would be better to sell it in a more favorable real estate market. Councilmember Greden echoed the mayor’s sentiments, saying that master planning would be difficult now, when it was hard to imagine what might be possible given a different economic climate. Greden also pointed out that the city was getting a very favorable interest rate from the Bank of Ann Arbor.

Hieftje said he was reluctant to part with the property until some arrangement had been made to replace the 100 affordable housing units formerly at the site – either at the same location or some other location. And he indicated that “very soon” there would be a proposal along those lines coming forward.

Outcome: passed unanimously

Main Street Lane Closures

Jim Kosteva from UM thanked council for granting intermittent closures of the eastern-most northbound lane on Main Street between Keech and Stadium. The closures – to allow installation of pre-cast arches on Michigan Stadium – will occur over the next three weeks no earlier than 9 a.m. and no later than 3 p.m., he said, to avoid disrupting rush hour traffic. Councilmember Marcia Higgins expressed hope that the university could figure out a better way to move trucks in and out of the area without backing up – which causes extra noise due to warning beeps that the trucks emit when backing. This will be important to the neighborhood, especially if the city grants a pending request from UM to permanently close that lane in 2010, from March until Art Fairs, held in July.

Communications

The proposal to replace the 100 units of affordable housing at the old YMCA site, to which Hieftje had alluded earlier, took a slightly more concrete form when city administrator Roger Fraser announced that the Dec. 8 council work session would include such a proposal. Also on the agenda will be a discussion of the financials from the past golf season.

Councilmember Hohnke shared with the community the information that Alan Haber had conveyed at caucus the previous evening about an event to commemorate the 60th anniversary of the proclamation of the Universal Declaration of Human Rights. A candelight vigil will be held at Liberty and Main streets in downtown Ann Arbor on Dec. 10 starting at 5 p.m. The vigil will be followed with a teach-in at 7 p.m. in the Anderson Room at the UM Student Union on State Street.

Councilmember Tony Derezinski congratulated Hohnke on the birth of his first child, a boy, Oscar. In response to Hieftje’s light-hearted expression of surprise that Hohnke was even at the council meeting, Hohnke joked that his wife had asked him to get out of the house.

Editorial aside: The Chronicle echoes Derezinski’s well wishes for Carsten and his family.

Present: Sandi Smith, Sabra Briere, Tony Derezinski, Leigh Greden (arrived around 8 p.m.), Christopher Taylor, Margie Teall, Marcia Higgins, Carsten Hohnke, Mike Anglin, John Hieftje.

Absent: Stephen Rapundalo

Next meeting: Monday, Dec. 15 at 7 p.m. in council chambers, 2nd floor of the Guy C. Larcom, Jr. Municipal Building, 100 N. Fifth Ave.