From left to right: DDA board members Gary Boren, Roger Hewitt, John Hieftje, and Keith Orr. (Photos by the writer.)

In their one business item, the board approved an amendment to the contract with Village Green to develop a 244-space parking deck as the first two stories of a 9-story, 99-foot-tall building, City Apartments – a 156-unit residential planned unit development (PUD) at First and Washington.

Once the parking deck portion of the building is completed and issued a certificate of occupancy, the city of Ann Arbor has agreed to issue $9 million worth of bonds to purchase the deck, and the DDA has agreed to make the payments on those bonds. The amendment to the contract provides DDA consultants access to the site during construction activities to check that construction methods conform to standards that will ensure a 75-year life for the deck.

On the city council’s agenda for Monday, Feb. 7, 2011 is their own approval of the same amendment to the Village Green contract. The contract amendment is part of a timeline put in place on Aug. 5, 2010, when the city council approved an extension of Village Green’s option to purchase the First and Washington city-owned parcel for $3 million. That timeline calls for Village Green to purchase the land by June 1, 2011.

The $3 million proceeds from the hoped-for Village Green deal were part of the financing plan for the city’s new municipal center, and would have no direct impact on the current general fund’s $2.4 million deficit that’s forecast for the FY 2012 budget. However, during deliberations some DDA board members accepted the point made by their colleague Newcombe Clark – that there are likely indirect connections between the completion of the Village Green transaction and the city’s overall budget picture, at least in terms of cash flow.

In reports and communications entertained by the board, highlights included: (1) a continued interest on the part of the University of Michigan to absorb a segment of Monroe Street into the UM Law School campus; (2) complaints from the property manager at 416 Huron St. about disrepair of an alley and adjoining sidewalks in the area, as well as a lack of maintenance on property owned by the railroad; and (3) an elaboration by the mayor on some remarks about Borders that he’d made and that had been reported in the media.

Village Green

The board considered a resolution to approve an amendment to the contract between Village Green, the DDA and the city of Ann Arbor, under which terms Village Green will build a 244-space parking deck as the first two stories of a 9-story, 99-foot-tall building with 156 dwelling units: City Apartments.  The amendment to the contract, among other items, provides DDA consultants access to the site during construction activities to ensure that construction methods conform to standards that will ensure a 75-year life for the deck.

Village Green: Background

The parking deck under City Apartments would be owned by the city of Ann Arbor and managed by the DDA. Here’s how that would work: Once the parking deck portion of the building is completed and issued a certificate of occupancy, the city of Ann Arbor has agreed to issue $9 million worth of bonds to purchase the deck, and the DDA has agreed to make the payments on those bonds.

The city council authorized the issuance of the bonds at its Oct. 4, 2010 meeting, but the city will not actually issue them until construction of the deck is complete and a certificate of occupancy is issued for it. [After the DDA's bricks and money committee meeting on Jan. 26, 2011, Susan Pollay, executive director of the DDA, clarified for The Chronicle that the certificate of occupancy refers just to the parking deck – it will be completed before the apartments are ready for occupants to move in. Issuing the certificate of occupancy will be contingent on the parking area being safe for motorists to park their cars while construction continues on the upper floors.]

The timing of the bond issuance was part of the council’s deliberations at its Oct. 4, 2010 meeting:

Stephen Kunselman (Ward 3) led off deliberations by expressing his concern about what happens to the bond if the deck does not get built. The city’s CFO, Tom Crawford, explained that the payment is not owed until there is a certificate of occupancy issued for the City Apartments project, and thus the bonds would not be issued until the project was substantively complete. Crawford allowed for some flexibility in that respect, if the city saw that it could get a better interest rate by issuing the bonds a few months before the project is actually complete.

Based on the timeline approved by the council in connection with the extension of the purchase option, Crawford said, the project is supposed to be built by around May 2012.

By way of background, the City Apartments planned unit development (PUD) won city council approval on Dec. 1, 2008. Village Green had an option to purchase the land parcel at First and Washington, where City Apartments is planned, which was good through May 31, 2009, but was extended by the city council at its May 18, 2009 meeting through Dec. 3, 2009 – with the possibility of two three-month extensions that could be authorized by the city administrator. The reason given for the extension was to allow time for Village Green to arrange financing. Both additional extensions were granted by city administrator Roger Fraser, which gave Village Green a purchase option through June 1, 2010 2011.

But at its June 21, 2010 meeting, the city council approved an additional brief extension through Aug. 5, 2010 in order to allow time to establish a specific set of milestones that need to be completed. Then, at its Aug. 5, 2010 meeting, the council approved another extension to the purchase option through June 1, 2011. A detailed set of milestones was included as part of the resolution, which were intended to increase the probability that a purchase took place before the option ran out.

After the city council extended Village Green’s option to purchase the land, DDA board member Newcombe Clark had noted that the milestones that had been developed generally left little time for review by the DDA. From The Chronicle’s Sept. 1, 2010 DDA board meeting report:

Clark picked up on the fact that the turnaround time for DDA activities and involvement were all relatively short – in many cases a day. He suggested that the DDA “politely ask” that it be kept in the loop on those matters.

The amendment to the Village Green contract that was before the DDA board on Wednesday was part of the timeline of milestones. So where on the set of milestones did the amendment fall? It called for the DDA board to vote on the amendment on Nov. 3, 2010 – around three months earlier. The same amendment is on the city council’s agenda for Feb. 7, 2011.

By way of additional background, the $3 million transaction for the land parcel at First and Washington is part of the city’s financing plan for the new municipal center that is very close to completing construction. The city’s contingency strategy for dealing with the possibility that the deal doesn’t go through was discussed at a budget workshop last year:

City Budget: Debt

Sandi Smith (Ward 1) was puzzled by a line in the budget summary that reads “Loan payment for First and Washington – $150,000,” noting that she did not think the city owed any money on the property.

[City administrator Roger] Fraser allowed that Smith was correct – the city does not owe money on the property. However, the city is expecting $3 million from the sale of the property in connection with Village Green’s City Apartments project, which has site plan approval from the city, but has not moved forward yet due to lack of financing.

Fraser described the $150,000 as a contingency of sorts, borrowing some money to “tide us over” if the $3 million from the sale of that First & Washington property does not come through sometime soon. The option to purchase agreement has been extended once by city council through December 2009, with a provision that the city administrator can authorize two 3-month extensions, which he has done. When the second extension runs out at the end of June 2010, the council will need to act if there is to be an additional extension.

At the council’s Monday budget meeting, the city’s CFO, Tom Crawford, indicated that he’d had recent conversations with Village Green and that they were feeling positive.

Mayor John Hieftje asked Crawford to confirm that the city was within its legal limit for debt load – the city cannot have debt in excess of 10% of the total state equalized value of property. Crawford indicated that the city was at 2.6%, and he thus felt comfortable with the city’s debt level. Crawford also cited other cities’ debt load – Grand Rapids, Lansing and Kalamazoo – as comparable. Ann Arbor’s bond rating, said Crawford, was in the top 20 in the state.

This past week, Crawford confirmed by email for The Chronicle that no money had been borrowed as a part of that contingency strategy and that if any were to be borrowed, it would need to receive approval from the city council.

Village Green: Board Deliberations

Roger Hewitt reminded the board of the project’s background, highlighting the fact that the DDA would be purchasing the deck based on a fixed amount per parking space. He noted that the DDA board had already approved a contract and what was before the board was an amendment. The language of the amendment, Hewitt said, was meant to ensure that the 75-year life of the parking deck is reflected in the construction methods. He said there are a number of engineering and construction concerns that are addressed in the contract amendment, helping ensure that the DDA is “getting what we are paying for.”

Hewitt told the board that the language had been reviewed by Carl Walker Inc., the DDA’s engineering consultant for the parking structures it manages for the city, as well as by Jerry Lax, the DDA’s legal counsel. He declared his confidence that the DDA would be getting a deck with a 75-year life.

Susan Pollay, executive director of the DDA, stressed that Village Green’s interest in quality construction is aligned with the DDA’s interest. Village Green’s intent, she said, is not to sell the building but to continue to own and operate the apartment building. So constructing a deck of sufficient quality that will last 75 years is important to Village Green, she said, because the parking deck is effectively the basement of the apartment complex they will own and operate.

[At the DDA's bricks and money committee meeting the week before, Pollay had reported the possibility of increasing the building height by a few feet, to avoid the need to dewater the site during construction of the foundations. She said that Kevin McDonald, in the city attorney's office, was looking at the issue to determine whether that change to the building plan could be made at the administrative level, or if it would need to return to the city council for approval.]

Before the meeting started, Newcombe Clark had said he was not trying to be negative about the Village Green amendment. He did, however, want to draw out a number of points.

In deliberations, he reviewed with Pollay that the DDA would be managing the deck and that the city would own it. Hewitt further clarified that the DDA would manage the City Apartments deck in the same way it manages any other city-owned parking structure. Pollay offered Liberty Square as an example of how the arrangement would be handled – the city owns the deck and the rest of the structure is owned privately. Hewitt noted that the private space and public space are flip-flopped in Liberty Square, as compared to City Apartments – in Liberty Square, the private component is at the bottom of the building.

Clark stated that he was happy the project was now moving forward. He had concerns, however, about how the milestone timeline would be kept. He wondered what the impact would be of not keeping to the schedule and how that relates to the DDA’s 10-year plan. He noted that they were nine weeks behind schedule. [Based on the original Nov. 3, 2010 schedule for the vote, Clark was understating the delay by a few weeks. Queried by email, Clark joked to The Chronicle that this was perhaps the first time he'd ever been accused of understating something.]

Clark said he understood that hard work was being done to make up the time they were behind, but he worried that the bond issuance was scheduled to take place 12 days from then. He said he didn’t think that the DDA was ready for bonds to be issued. Pollay clarified that it’s the city that will be issuing the bonds, and that will not take place until the parking deck’s certificate of occupancy is issued. That’s when it becomes real, she said. And the city council has already authorized issuance of the bonds, she explained.

Clark moved on to the timeline item indicating that the construction documents are supposed to be 100% complete within three weeks. Pollay indicated that this part had been modified – construction specifications would be provided in early March and they would be able to approve any changes through June. Pollay indicated that Village Green is hoping to begin construction in July.

Clark then noted that the closing on the $3 million deal comes very close to the point when the city needs to finalize its annual budget. He expressed concern about the impact of a deal not going through on the city’s current budget. He allowed that the $3 million of proceeds from Village Green’s purchase of the parcel is slated to go into the fund that is paying for the new municipal center, which is nearing completion. But he noted that “money is money,” saying that a $3 million hole somewhere has to be plugged with something, which would leave a hole somewhere else. [The city's eventual strategy, if it becomes necessary due to the Village Green deal not going through, as reviewed in the background above, is to borrow the money in some form.]

Clark reiterated that he supported the project and said he hoped that Village Green would build the project. But he returned to his concern about the timeline not being met. He said the DDA kept moving things around in its 10-year financial plan, so he felt like he’d have a better idea of what the DDA’s 10-year plan will actually be in a month or two from now.

[If the Village Green project does not go through, it means that the DDA would be relieved of a $9 million obligation to make bond payments for the deck purchase. So Clark appeared to be putting the discussion in the general context of the still-unresolved parking contract negotiations between the city and the DDA. The city's budget planning currently assumes a $2 million payment from the DDA to the city that is not part of the current parking contract. As the negotiations have reached a critical point, some DDA board members have begun to express concerns about the DDA's ability to satisfy the city's desire to supplement its general fund. Some board members are also concerned about the DDA's own ability to complete specific projects they view as part of the DDA's mission.]

With respect to the Village Green timeline, Hewitt characterized it as the “city’s negotiating timeline, not the DDA’s timeline.” Any timing issue, Hewitt told Clark, is the city’s issue, not the DDA’s. Clark wondered if it weren’t the same issue. Hewitt ventured that the discussion seemed to be getting into a “larger realm,” and Clark replied that this was exactly his concern – that the larger issues were getting mixed into the discussion due to the compressed timeline.

Hewitt came back to the point that the DDA does not need to make any payments until the parking deck has a certificate of occupancy. That’s several years away, he said. Hewitt said that construction would typically be two years for something like this. As far as the larger issue of the city’s budget, he said, he didn’t feel it was their place to comment.

Russ Collins provided a way out of the conversation between Clark and Hewitt by telling Clark: “Point noted.” But he continued by saying, “The issues you’re raising don’t affect the material facts of this resolution.” It could affect the city’s cash flow, Collins allowed, which could in turn affect indirectly what the DDA was talking about.

Bob Guenzel sought clarification that it was a cash-flow issue and not a budget issue for the city. Clark indicated that it was a one-time payment for the sale of an asset. Guenzel supposed that the city had recorded the transaction as a receivable, but Clark said there was no actual purchase agreement yet. That is, Village Green has not yet executed their option. If there was already an agreement to purchase or Village Green had already purchased the land, Clark said he’d feel more comfortable about possibly needing to change the DDA’s budget, given that the city already has the $3 million budgeted.

Guenzel wrapped up the deliberations by saying, “As Russ said, it’s a point.”

Outcome: The board voted unanimously to approve the Village Green contract amendment. The city council will vote on the same amendment at its Feb. 7, 2011 meeting.

Communications, Committee Reports, Commentary

The board’s meeting included the usual range of reports from its standing committees and the downtown citizens advisory council. Every board meeting includes two opportunities for public commentary – one near the start of the meeting and the other at its conclusion.

Comm/Comm: Bricks

John Splitt reported out from the bricks part of the bricks and money committee, saying that concrete continued to be poured for the underground parking garage under construction on the city-owned Library Lot on South Fifth Avenue. A total of 3,000 cubic yards of concrete had been poured this month, Splitt reported. The largest mass pour of the project, he said, is due to take place in late February and will involve 5,000 cubic yards. The speed ramp on the east side of the garage is 80% complete, he reported, which will ease the construction workers access to the bottom of the construction pit.

The Fifth and Division streetscape improvement project has been shut down for the winter, but wiring of streetlights in connection with that project does continue, Splitt said.

He also announced that immediately following the meeting there would be a tour of potential different space for the DDA offices for anyone who was interested – next door at the City Center building, at the southwest corner of Huron and Fifth.

Comm/Comm: Money

Roger Hewitt reported on the second quarter financial picture for the period ending Dec. 31, 2010 or midway through the fiscal year. Highlights of Hewitt’s remarks included the fact that the DDA had received from the city nearly all of the taxes it captures through the TIF (tax increment financing) district, and those amounts are within 2% of what had been budgeted.

Hewitt also noted that reduced operational costs in the parking fund reflected the efforts of Republic Parking manager Mark Lyons to reduce costs. A drop in parking revenue compared to the budgeted amount, said Hewitt, reflected a delay from July to September in the implementation of a parking fee increase.

Hewitt also pointed out that the transfer into the parking maintenance fund will be less, because the DDA had requested of its parking structure engineering consultant, Carl Walker Inc., that time-sensitive priorities be identified. No critical maintenance would be delayed, he said. Only those activities that were more appearance-related – like painting, for example – would be delayed. Deck-coating or resurfacing, he said, would not be put off.

With respect to the quarterly parking figures, Hewitt concluded that usage continued to appear stable.

Comm/Comm: Partnerships

The partnerships committee meeting report was given by Russ Collins. Part of his report consisted of a report on the status of the DDA’s energy-saving grant program, a two-phase program that allows downtown businesses to conduct an energy audit, paid by the DDA, and to install improvements based on the audit, the cost of which is matched up to a $20,000 cap.

[At the partnerships meeting from the previous month, which The Chronicle attended, DDA executive director Susan Pollay stressed that the DDA had not spent more than was in the budget for the energy grant program – a conclusion that could have erroneously been reached by looking at the total that the DDA would spend, if every participant in the program installed improvements that resulted in the maximum $20,000 match, and if the DDA decided to match the expenditure. At the partnerships meeting, Pollay stressed that it was a "first in" program.]

Collins also reported that the PACE program, which the state legislature passed late last year, could be complementary to the DDA’s energy-saving grant program.

Collins also indicated that the DDA’s mutually beneficial committee had reported to the partnerships committee how the city council had reacted to the outcome of the DDA board retreat – when there’d been a board consensus that the percentage-of-gross figure the board wanted to consider as payment to the city was a few points lower than the city was hoping for. [Chronicle coverage: "Parking Money for City Budget Still Unclear"]

Collins also reported that there’d been discussion of the new role for the DDA in redeveloping downtown city-owned surface parking lots. Wendy Rampson, head of planning for the city of Ann Arbor, will be attending the next partnerships committee meeting – on Wednesday, Feb. 9 at 9 a.m. – to discuss how the new A2D2 design guidelines will be integrated into the city’s planning-related code. City staff has been asked to bring a map showing the specific parcels to be redeveloped. [At the council's Jan. 18, 2011 meeting, councilmembers deliberated on a resolution that would have articulated this DDA role in redevelopment of the surface lots. Some councilmembers mentioned the lack of a map identifying the parcels as one barrier to their adoption of the resolution – which was ultimately postponed. Chronicle coverage: "DDA-City Deal Stalls" and "Ann Arbor Hotel First to Get Design Review?"]

Comm/Comm: Economic Development and Communications – SPARK

Joan Lowenstein gave the report from the economic development and communications committee. At their meeting, Lowenstein reported, they’d reviewed existing communications efforts about the downtown and the DDA. That had established a context, she said, for exploring different kinds of communication that the DDA could pursue in partnership with others, or in identifying gaps that the DDA could fill.

She reported that Newcombe Clark had walked the committee through a plan from his current course of study at the UM business school, that had provided a good jumping off point for the discussion. A goal that the committee identified, said Lowenstein, is to focus communication on the many positive assets that downtown has to offer. So the DDA would need to identify its role in that communication. That could range from communicating about downtown assets to residents, visitors and employees, to communicating about the DDA itself.

Lowenstein said that Jennifer Owens, vice president of business development for Ann Arbor SPARK, would attend the next meeting of the committee on Feb. 23, 2011 to explore how SPARK and the DDA could align their efforts. [Committee meetings are open to the public and posted online on the DDA's calendar.]

John Mouat wondered what the impact on SPARK would be with key personnel departing for Lansing. He was referring Gov. Rick Snyder’s recent appointment of SPARK’s CEO Michael Finney and SPARK’s director of marketing and communications Elizabeth Parkinson to positions in the Michigan Economic Development Corp. (MEDC). Amy Cell SPARK’s vice president for talent enhancement, is also joining the MEDC.

Lowenstein said she felt that the SPARK positions would be replaced, and that it reflected greater interest in collaboration between the MEDC and SPARK, with perhaps some kind of “satellite MEDCs” being established. If anything, she concluded, SPARK’s role will increase rather than decrease. Bob Guenzel, who serves on SPARK’s board of directors, said that his understanding was that SPARK would be moving forward as before. Mayor John Hieftje, who also serves on SPARK’s board of directors, said there is an evolving discussion of the relationship between MEDC and various economic development groups like SPARK, and it was somewhat “in flux.” He said he had a lot of faith in Finney.

Comm/Comm: Transportation

Reporting out from the transportation committee was John Mouat, who said they’d spent their last meeting selecting items from the transportation demand management plan for discussion: (1) providing transportation and evening parking information for evening employees; (2) adding moped/motorcycle parking downtown; and (3) thinking of parking spaces as serving a variety of different uses, from electric vehicle spaces to taxi service.

Mouat also called the board’s attention to the committee’s work as it relates to the Ann Arbor Transportation Authority: the AATA’s 30-year transportation master planning effort; the Plymouth-State connector study; the possibility of making the downtown Blake Transit Center (BTC) on Fourth Avenue more of a multi-modal facility; and encouraging the use of the BTC as a hub for MegaBus, University of Michigan blue buses, Michigan Flyer, and Greyhound.

On a lighthearted note, Mouat reported on a conversation that an alternative transportation option, given the snowfall, might be dog sleds, which could, according to Susan Pollay, result in a need for barking structures. Collins ventured that the whole notion was a howling success.

Comm/Comm: Alley on the Edge

Bill Gross, property manager for 416 W. Huron, addressed the board during public commentary about a range of concerns related to the property – which sits just west of the railroad bridge and just east of the new HAWK traffic signal, across the street from the new YMCA building.

Huron Street runs east and west. This is the western edge of the DDA tax capture district. The view here is to the northeast, just west of the railroad tracks. From left to right: Ann Arbor School of Yoga, 416 W. Huron property, Delonis Center.

Some Chronicle readers may recognize Gross and the Huron Street property from the Art in the Barn holiday art show that Gross organizes in the yellow barn, located behind the painted gray brick building that fronts Huron Street.

Gross advised the board that he took care of the the property along the railroad tracks, which is actually the railroad’s responsibility – picking up trash and mowing the grass, he said. If he didn’t do it, nobody would, he told them. Referring to the walk-arounds in the downtown area that the board sometimes did, he asked them to tell him when they were coming – he’d make sure not to mow, so that they could see what it would look like if he didn’t take care of the property.

Gross also pointed out that the sidewalks along the street are in disrepair – they are tilted and exacerbate the standing water problems that are prevalent in the public alley between the 416 W. Huron building and the Ann Arbor School of Yoga building located just to the west.

Gross also raised concerns about behavior issues with people he said were residents of the Delonis Center homeless shelter, located slightly up the hill from the 416 W. Huron property, past the railroad bridge. He described an incident when someone was standing on the railroad track yelling and the response he received from the police when he called was that he was asked to keep an eye on that person.

[In a followup phone interview after the board meeting, Susan Pollay told The Chronicle that the alley was one of those that the DDA had not yet repaired – they'd done an inventory of alleys in the downtown area and had undertaken improvements in many of them to ensure that stormwater drains were reconstructed and that the downspouts from buildings fed properly into the stormwater drain system. The sidewalks, she said, had been slated to be repaired as part of Huron Street improvements that had been planned by the DDA.

Those improvements had originally been conceived after the "decade of parking structure repair" in the 1990s, when the DDA board had identified three key corridors as a next priority to focus on: Huron Street, Fifth Avenue and Division Street. Because Huron Street is a state trunk line, which requires coordination with the Michigan Dept. of Transportation (MDOT), it was treated separately, she said. The Fifth and Division streetscape improvement project – much of which was done this past summer, and which will be completed next spring – is the result of that strategy.

Where do the street and alley improvements stand as DDA projects? Huron Street improvements are still on the list of possible projects for the DDA to undertake. At the DDA's most recent retreat, board member Newcombe Clark ensured that Huron Street was one of the items board members could vote for during their dot-voting exercise. As part of that exercise, finishing the alley improvements received two board members' votes as short-term priorities.]

When board members began a back-and-forth with Gross, board chair Joan Lowenstein noted that it was not the board’s practice to engage in that kind of discussion, but she felt that some leeway was warranted.

Mayor John Hieftje suggested that Gross take up the behavior issues with the Delonis Center staff. Gross said he’d gotten only lip service from the shelter, but also that it’s difficult for shelter staff to see down the hill past the railroad bridge to the property he manages.

Russ Collins suggested that it was the DDA staff – not the board – that would be in a better position to address Gross’ concerns.

Clark then stated that he was biased because his mother owns the Ann Arbor School of Yoga, immediately adjacent to the 416 W. Huron property – the two buildings share the alley in question. But he went on to point out that the behavioral issues are difficult to address without officers assigned to a particular beat – Clark has often advocated for exploring the possibility of bringing back police beat patrols to the downtown area. He described how the alley flooding and the sidewalk improvements were part of projects that the DDA had planned for its district. “It’s still our district,” he pointed out. Board approval was necessary in order to finish those projects, he observed.

And that is the reason Gross was there before the board, Clark said: Gross had come to him and Clark had told him to come address the board. “The buck has stopped with us at this point. … We can choose in our priorities whether or not we want to address this.”

Comm/Comm: Downtown Citizens Advisory Council – Monroe Street

Ray Detter reported out from the previous evening’s downtown citizens advisory council meeting that Richard DeVarti, owner of Dominick’s on Monroe Street, had attended the meeting along with his brother Dave, a former DDA board member. They were again concerned about the possibility of the city allowing the University of Michigan to absorb a section of Monroe Street into the law school campus. Detter said the CAC saw no benefit to the city in allowing that move, citing the loss of street parking, not just for Dominick’s but also for the multi-family residential units in the area. Detter said it would be a disaster for Dominick’s business. [Previous Chronicle coverage: "UM Pitches Plan to Close Monroe Street" and "Expansion of Campus onto Monroe Street?"]

Comm/Comm: Streetlight Outage Reporting, Greenway

Ray Fullerton addressed the board on the subject of reporting streetlight outages. He noted that it is important for residents to report them, because the city itself only does an annual inspection and it could take as long as a year for a streetlight to get replaced.

Fullerton also noted that in connection with the current Parks & Recreation Open Space (PROS) plan adoption process, it had been reported that the DDA felt the possibilities for extending a greenway southward towards the UM athletic campus were not as great as in the other direction. He said that there was definitely the possibility of pathways to the south.

Comm/Comm: Downtown Marketing Task Force

Mayor John Hieftje said the downtown marketing task force, which had been meeting for a number of years, is currently on hiatus. The task force meetings are an opportunity to bring together members of the downtown business associations, he said, along with councilmembers. He noted that Margie Teall (Ward 4), Tony Derezinski (Ward 2) as well as Carsten Hohnke (Ward 5) had attended the task force meetings regularly along with him, the mayor – Hieftje pointed out that the name of the task force is actually the Mayor’s Downtown Marketing Task Force and has been around for a very long time.

They’d been thinking about how to recast the task force, possibly reducing the frequency of meetings to a quarterly basis. He made a pitch to DDA board members to attend the task force meetings, saying that there are interesting conversations that take place between people who are actually doing things. Hieftje said that while Susan Pollay, the DDA’s executive director, was nearly always present at the task force meetings, he felt the task force’s effectiveness was limited due to the lack of attendance from board members. It could be an enlightening conversation, he concluded.

Comm/Comm: Comments on Borders Clarified

Mayor John Hieftje announced that he had been quoted in the media a couple of weeks ago when he’d been asked by a couple of different news outlets about Borders Group, the Ann Arbor-based bookstore chain. Borders, he continued, was a concern due to reports of a possible bankruptcy and what might happen in the wake of that. [The mayor was quoted in a Jan. 9, 2011 Crain's Detroit Business article by Daniel Duggan as follows: "If the company were to fold altogether, the biggest blow to the city would be the big hole in the downtown," Hieftje said. "While it would be disappointing, the downtown market has been hot and I wouldn't be surprised to see that retail space snapped up."]

After he was quoted, the mayor reported, he had an appointment with the person who handled Borders’ real estate, and they had both acknowledged that it was unlikely that Borders would close its stores. If Borders did close stores, then the downtown Ann Arbor store would be one of the last to close, Hieftje ventured. Hieftje continued by saying that the person he’d talked with was opening up channels to explore ways to fill the retail space if the need came up.

One of the principle concerns that had been expressed, Hieftje said, was a perceived lack of parking. What they’d heard from other retailers is that it’s a great spot, but they wondered if there was sufficient parking. Hieftje went on to say that he’d pointed out that the new underground parking garage under construction on South Fifth Avenue would provide additional spaces, and that the person he’d spoken with was happy to hear that. The last thing he’d like to see, concluded Hieftje, is for Borders to move.

Present: Gary Boren, Newcombe Clark, Bob Guenzel, Roger Hewitt, John Hieftje, John Splitt, Russ Collins, Keith Orr, Joan Lowenstein, John Mouat

Absent: Sandi Smith, Leah Gunn

Next board meeting: Noon on Wednesday, March 2, 2011 at the DDA offices, 150 S. Fifth Ave., Suite 301. [confirm date]

Proposed Germantown Historic District Study Committee

Public Commentary – Germantown: Seven of 10 speakers during the reserved time for public commentary spoke to the issue of the proposed study committee for a new historic district. The proposed area of study is bounded by William Street on the north, Fourth Avenue on the west, Madison Street on the south, and Division Street on the east.

Alex de Parry: [De Parry is the developer of a project proposed along South Fifth Avenue, called City Place, which currently has a PUD application that has been advanced to a second reading before council.] De Parry said that he owned several of the properties within the area of proposed study, which includes 161 total properties. He noted that the eight property owners who supported appointment of a study committee were very vocal, but said that 10 times that number opposed the appointment of a committee. He characterized the proposal’s late addition to the agenda on the previous Friday as a “last-minute end-around” to prevent densification.

Scott Munzel: [Munzel is legal counsel for de Parry's City Place project.] Munzel identified himself as a resident of Ward 5 [He does not live within the area of proposed study.] He said that he supported the notion of historic districts in general. However, he said that in order to establish a new district, a high degree of consensus in the community is required, and that the time frame of Friday to Monday was not adequate to establish that consensus. He concluded that more community input is warranted.

Julie Stadelman: Stadelman said that she’d recently accepted an award for historic preservation of her home, but said that she was opposed to the establishment of a historic district in that area. She focused her remarks on the parcel where a project on Madison Street had been proposed and rejected by planning commission in late October 2008, called The Madison, which is proposed as a 12-story development aimed to provide work-force housing. She said that the houses on the proposed footprint of The Madison are not historic. She concluded that the historic district is requested by those who opposed development. In brief conversation with The Chronicle after she spoke, Stadelman said that her view that the properties on the proposed site of The Madison did not merit historic designation extended to the whole area of proposed study for the district.

Caudius Claudius Vincenz: Vincenz said he lived on South Fifth Avenue just up the hill from Fingerle Lumber, and that his choice to live in an area where there are older houses stemmed from an appreciation for historic houses that he traced to having grown up in a 500-year-old house in Switzerland. He stressed that he is not an architectural historian, but noted that his own home was an arts and crafts home. He suggested that with further study, “a lot of gems” would be found. What’s great about the houses in the area of proposed study, he said, is that each one has its own quirkiness, and that there is a diversity of houses. He suggested that the study committee not focus too much on window sills and the like, but rather consider the human diversity of the neighborhood. He noted that redevelopment in general was driven by the economics of scale and that this accounted for the massiveness of projects proposed in place of the older houses.

Beverly Strassmann: Strassmann stated that she supported the formation of a study committee. She related her experience living in a small village in Africa, where there was a strong sense of community. The older houses where the elders lived were revered, she said, and everyone looked out for everyone else. That, she said, was the kind of neighborhood the area of proposed study is. She noted that she’d invested in her house, as had others, and that level of investment ranged from $100,000 to $200,000. She said that those investments were not just investments in individual homes, but in the whole city, noting that a recent decision by a film production company to shoot on location in Ann Arbor was driven by the fact that in Ann Arbor there are a lot of “old houses that look like they could be in New England.” A neighborhood of attractive, well-maintained houses benefits the aesthetics and stability of the city, she said, characterizing such houses as “public works of art.”

Walter Spiller: Spiller said he owned five rentals across from his own house in the area of proposed study. He related how he had lived there his entire working life. [At council's caucus the previous evening, he described how part of that working life was as a mail carrier ... for the very neighborhood in which he lived.] Spiller focused his remarks on the notion of diversity. He noted that while the city was diverse when evaluated as a whole, generally that diversity did not extend to the level of neighborhoods. We know where the students live, we know where the rich people live, we know where the professionals live, he said. But he said what was different about the area of proposed study was the diversity that existed on the neighborhood level. In that area, he said, there are old people, really old people, babies, and students. He said that he’d just rented a unit to his barber. He described the neighborhood as housing the unemployed, minimum wage workers, as well as professionals. But he also characterized this diverse mix as a “fragile tapestry,” like tissue paper. He said that he was speaking from two different perspectives: that of an owner and taxpayer, and that of an investor in rental properties. He said that while his name had initially appeared five times on a petition circulated by Alex de Parry opposing the study committee, he said that it had been presented to him as something that the city was deciding to do without input. “I didn’t want something rammed down my throat,” he said. He said that he supported a study to explore whether a historic district was an appropriate mechanism for preserving the diversity of the neighborhood.

Deanna Relyea: Relyea said that she’d lived in her house for 20 years and that because they also owned the house next to it, they were developing “our own little dynasty.” She characterized the area of proposed study as a full-service neighborhood, which included a funeral parlor, a doctor’s office, a dentist’s office, and a church – the oldest German church in the state. She said that the neighborhood was diverse, and it was also fragile. She said she felt she had assurances from various planning documents that there was a commitment to preserve and protect historically significant areas that adjoin the DDA district and that this amounted to a pact between the city and its citizens. She therefore felt it was appropriate that citizens request staff time and resources to explore the question of a possible historic district. She said that the study would serve to determine if a historic district was the vehicle by which the stability of the neighborhood could be achieved.

Council Deliberations – Germantown

Councilmember Mike Anglin, co-sponsor of the resolution with Sabra Briere, led off council discussion by thanking the people who had stepped forward to speak. He noted that the proposal to appoint a study committee seemed quick, but that the idea went back years. He stressed that it was only a study committee. He said that his own familiarity with the neighborhood was his use of it as a cut-through on his way from home to the university. He said he wanted to see some parity for citizens as compared to developers who proposed projects. If developers have a claim on staff time, he said, then so do citizens.

Councilmember Sabra Briere listed out some reasons for authorizing the appointment of a study committee:

• appointing a committee doesn’t guarantee we’ll establish a historic district;
• research from the study committee will yield a greater understanding of our cultural heritage, even if no district is established;
• appointment of a committee does not in itself restrict development during the study period;
• the decision to establish a historic district or not rests with city council, not the study committee.

She said some questions that many of her colleagues on council might have were good ones: Why wait so long? Why now? She responded by reflecting on her own experience living in a neighborhood that was only recently established as a historic district (Lowertown). She enumerated some of the reasons people have waited until now:

• people trust that things won’t change – we don’t need a historic district to keep things the same;
• people see efforts to establish districts start and fail, and people don’t like failure;
• now is a time when they see change coming, and they want to control it.

Briere said she was pleased that people in the neighborhood had appeared to share with council why they liked living where they lived and had expressed a willingness to work for their neighborhood. She said she’d love to see a study committee given time to study, but “if change comes to this neighborhood during the study period, then change comes.”

When it appeared that the topic would receive no further discussion from council beyond the comments of the two sponsors of the resolution, Anglin remarked, “I thought we would have some discussion.” He then offered some prepared comments directed to the public as much as to his colleagues: “Listen carefully to council’s response to a citizen request.” He described the area of proposed study as a “remaining jewel in our crown” and said that good government consisted in part of responding positively to reasonable requests of citizens. He urged his fellow councilmembers to vote yes so that the question could be analyzed.

Councilmember Margie Teall expressed her agreement with the notion of parity for citizens when compared to developers’ claims on staff time and said that she thought they should give it a chance.

For his part, councilmember Carsten Hohnke said that he loved the proposed name of a possible historic district (Germantown), because he grew up in a family of recent German emigrants. Whatever happened, he said, he hoped that the name would stick, and expressed some optimism that it would, based on conversations with the county clerk (Larry Kestenbaum, who served for a time on the city’s historic district commission, and who in August 2008, commenting on the blog ArborUpdate, had proposed a historic district with boundaries similar to the area of proposed study). Hohnke said he agreed with the desire to preserve the character of the neighborhood, and that the city’s central area plan reflects that concern. That is why, he continued, he had expressed strong reservations about the City Place project during the council meeting when that PUD application had been moved to a second reading and public hearing. Referring to the comments of Walter Spiller during public commentary, Hohnke said that we don’t know the best way to preserve the character of the neighborhood. He noted that appointment of a study committee is “not trivial,” but noted that while it represented demands on city staff, he didn’t have a problem with that. What concerned him was that it wasn’t clear to him what the rush was. He said it was important to do the “messy work” of getting more input, and suggested that the time be taken to have a larger discussion on the matter. He concluded that he felt the matter should be postponed, but stood ready to work together with neighbors to preserve the neighborhood.

Councilmember Marcia Higgins said that what struck her about the previous night’s caucus discussion was the sincerity of the neighbors who had spoken. However, she was not sure that they had a clear understanding of the ramifications of living in a historic district. She wondered if the investments that some neighbors had talked about making in their houses would have been approved by the historic district commission. She also noted that the supporters of the study committee came from a two-block square, much smaller than the area of proposed study. She said she would like to see a bigger dialogue.

Councilmember Tony Derezinski reiterated Higgins points. He also said that in his work as the council’s representative to the planning commission that there was a lot of comprehensive planning work going on citywide, and that this neighborhood needed to be considered in that context. He expressed concern about the short time frame from Friday to Monday that council had for consideration of the resolution. He also expressed concern about the possibility that the appointment of a study committee would result in a “self-fulfilling prophecy.”

Councilmember Sandi Smith echoed Derezinski’s thought on the need to consider the context of current rezoning work that is underway. She noted that the area of proposed study is a true interface zone (The narrow strip on the south side of William is proposed under the new downtown zoning to be D2). She said that she would like the A2D2 process to look closely at this fringe area.

Picking up on the A2D2 reference from Smith, Higgins – who serves on the A2D2 steering committee along with Evan Pratt of the planning commission and Roger Hewitt of the DDA – said that their recent evaluation of a recent round of public input solicited through multiple presentations to the community had made clear that the interface of downtown with neighborhoods was an important concern. Hearing from an additional 300 people through this most recent round of public input, she said, had been eye-opening.

Councilmember Stephen Rapundalo noted that a number of previous comments pointed to the fact that the balance between growth/development and preservation is not simple. He said he had many questions concerning the proposed study committee, including (i) the breadth of area included, (ii) the timing of the resolution – why has it taken seven years after removal of historic designations of individual properties in a court case, (iii) the timing of the resolution in the context of two recently proposed projects in the area of proposed study (City Place and The Madison, and (iv) the actual historical purity of the structures involved – acknowledging his layman’s point of view. Rapundalo said that he was concerned if this was a thinly-veiled attempt to put roadblocks where we need some re-development. But he concluded by noting that council as a body was not anti-historic-district, citing a recent decision by council to deny a property owner’s request to establish a study committee to exclude his property from an existing historic district.

Following up on Rapundalo’s point about council’s recent decision to affirm the existing boundaries of the Old Fourth Ward, councilmember Leigh Greden said that the reasoning he applied for that case applied here as well: if he was nearly certain that he was going to vote against the establishment of the district, then he was going to vote against the study committee. (In the case of the Old Fourth Ward, he’d said that he couldn’t imagine he would vote to reduce its size, whatever the result of the study committee was, so therefore voted against the study committee in the interest of preserving everyone’s time). Greden said that staff research had indicated that it was only 11 properties in the area of proposed study that had lost their historic designations as a result of a court case, and that the expansion to 166 properties for the area of proposed study was dramatic. Greden said that he felt that downzoning, as opposed to a historic district, was a better option for preventing undesirable development.

Because Anglin wished to speak again, having already exhausted his two speaking turns, council accommodated him by voting to suspend its rules on speaking turns. Anglin wanted to make clear that the boundary area of the study committee did not necessarily correspond to the boundary area of an eventually proposed historic district. He also addressed Higgins’ concern that residents didn’t fully understand the ramifications of living in a historic district, by saying that “these people know what they’re getting into.”

Following up on Anglin’s point about the geographic scope of the study, Briere noted that the area of study for the Lowertown Historic District was an extremely wide swath going from Barton Drive to Longshore to Maiden Lane to Broadway. She said that the area of proposed study for German town was actually not all that big at roughly six square blocks, and that when she formulated the resolution, she did not feel it was up to her to pre-determine where the structures of historical significance stood. She also addressed the issue of Friday-to-Monday timing, by pointing out that everyone on council had received the resolution in draft form last Monday, and that the delay in getting the resolution to the city clerk was something she took responsibility for. Alluding to Higgins’ point, she allowed that it was possible that residents were getting in over their heads, but said that education about what it means to live in a historic district was part of the function of study committee.

Councilmember Christopher Taylor said he felt that the creation of a study committee needed a larger pile of data to support it. He said he was not ready to support the issue with the kind of formalism and momentum that appointing a study committee would give it.

Teall reminded her colleagues that it was just a study committee.

In concluding council discussion the mayor of the city of Ann Arbor, John Hieftje, said that a study committee creates a momentum for the establishment of a historic district. He said he wished that it were possible to maintain the historic designations of individual properties that were lost as a result of an early 2000s court case. He said he was concerned that appointing a study committee took a large swath of area and “put the area in question.” He said that in his own observations, there were many properties in the area that he couldn’t figure out why anybody would want to preserve them. Referring to the fact that some of the houses’ historic significance had been attributed to the fact that former mayors of Ann Arbor had lived in them, he said that he himself had lived in six different houses in Ann Arbor. And mutliplying six times the 50 mayors in Ann Arbor’s history, Hieftje said that amounted to potentially 300 houses that could be considered historic, and therefore questioned its use as a criterion.

Outcome: The resolution failed, with votes for it from Anglin, Briere, and Teall.

Anti-Graffiti Ordinance

Councilmember Teall introduced discussion of the ordinance by giving some background. It evolved, she said, from discussions on the downtown marketing task force. Merchants had noticed a sharp uptick in graffiti, and the consensus was that a strategy for curbing it was to “nip it in the bud.” Acknowledging that there was a cost associated with cleanup (which is enforced by the proposed ordinance), Teall said she hoped it would not be as costly when incidence of graffiti starts to decline, which rapid removal is intended to achieve.

Councilmember Higgins asked city attorney Stephen Postema to look into the question of how this ordinance fit into the rest of the city code and to look at the wording of the ordinance in that light. Postema indicated that his office had looked at the ordinance already, and would look at it again between first and second readings with a special eye to the issue Higgins mentioned. Councilmember Taylor indicated that there would be technical revisions between first and second readings (due for the second council meeting in Janaury) but that the substance of the ordinance would remain.

Councilmember Smith said she understood the motivation behind the oridnance, but worried about imposing a fine on a small business owner ranging from $250 to $1,000. She thus encouraged council to find easy remedies for business owners for dealing with graffiti. She reminded her fellow councilmembers that business owners who were required to clean up graffiti were victims of a crime.

Councilmember Greden said that Smith brought the good perspective of a realtor and that the way she had phrased the issue was something he hadn’t previously considered. He noted there would be a public hearing on the ordinance, and encouraged the public to come speak or to send email on ideas of how to tweak the ordinance. But he said that he hoped that council would support the idea of getting rid of graffiti downtown.

Councilmember Derezinski asked if parental responsibility statutes could be brought to bear on the situation – if the graffiti offense were committed by a minor. He suggested that the parents could be found liable and that could be a resource for cleanup compensation.

Councilmember Hohnke thanked Smith for her comments and said that council should be sensitive to small businesses in considering what the ordinance should require. He also thanked Teall for shepherding the issue through the process. He said that there were tools available for graffiti removal that should be extended to businesses outside the DDA boundaries.

Teall added that the ordinance would be implemented 90 days after its second reading, which would give business owners a chance to address their properties before enforcement.

Councilmember Anglin said that he thought applying the standards of the proposed ordinance was good, but that he felt there were much more glaring situations involving entire buildings that were falling apart, which were much more disturbing to him than graffiti. Greden said that he shared Anglin’s concern, but noted that the city attorney’s office was enthusiastic about cleaning up any such situations and had a track record of doing so.

Outcome: The ordinance was passed on first reading. Smith demurred, but did not request a roll call vote.

[Editor's note: Of possible additional graffiti-related interest are the following two Stopped. Watched. items: Obama for Truth 1 and Obama for Truth 2. The case of an Ypsilanti businessman who considered some stenciled graffiti on his place of business to be art and left it in place also bears some relevance to the topic: graffiti or art]

Bonds for Parking Structure Component of City Apartments

Jon Frank, vice president of development for Village Green, the developer of the residential project to be built at the First and Washington site, was in attendance at the council meeting, as was Susan Pollay, executive director of the DDA. The DDA and Village Green are working together on the parking structure component of the development.

Council considered two separate resolutions on the issuance of $9 million in bonds to fund the parking structure portion of the City Apartments project. There was no council discussion of them, but councilmember Greden clarified the purpose of each resolution. The first one gave a 45-day notice of intent to issue the bonds, while the second one authorized the issuance of the bonds. Greden explained that by having authorization to issue bonds immediately upon expiration of the 45-day period gave staff maximum flexibility to issue bonds (or not) based on market conditions.

Human Services Funding Priorities

Several members of the public spoke during the public hearing on spending priorities for fiscal years 2010 and 2011.

Ellen Schulmeister (Shelter Association of Washtenaw County): Schulmeister asked council to approve the priorities. She also thanked council for pursuing the replacement of the 100-units of affordable housing lost at the site of the old YMCA. She said that the day’s weather was a mirror of the economy: temperatures had gone from 50 F to 26 F and were forecast to hit 16 F overnight. From July 1 through the end of November this year, Schulmeister said, demand for services at the Delonis Center was up 20%. She concluded that people who need our help need our help now more than ever.

Joan Doughty (Community Action Network): Doughty said that she was pleased to see that Youth at Risk was included in the priorities.

Jim Mogensen: Mogensen said that the “conventional thinking” was that people in Ann Arbor spend all kinds of money on human services, but that to his unconventional way of thinking, it didn’t amount to a great amount of money. He described a presentation he sometimes gave involving a physical red ribbon representing all of the other spending besides human services, which would stretch across the room to the corner where the city attorney sat. Mogensen said that in establishing priorities, it amounted to studying how the pie should be sliced, when the pie was too small in the first place.

Tom Partridge: Partridge called for uniting the city, the county, southeast Michigan, and the rest of the state in providing needed services. He said such services should be a part of an integrated program of transportation, housing, health, and education.

Councilmember Rapundalo led off council deliberations by explaining one difference in this year’s package of priorities as compared to previous years. Rather than try to allocate in advance the percentages of spending on particular areas, the idea was simply to fund the best programs, whatever area they might address. The thinking behind this strategy was that all of the various categories were so interconnected that it was difficult to tease them apart in any meaningful sense. Councilmember Teall invited community development director Mary Jo Callan to the podium to comment. She echoed what Rapundalo had said, saying that arbitrary designation of dollars before applications had been submitted didn’t result in the strongest programs getting funded. Councilmember Greden, responding to Mogensen’s suggestion that the city was not spending enough on human services, noted that Ann Arbor as a community was very generous with general fund dollars and elicited from Callan the view that yes, we can be proud of our spending on a per capita basis.

Outcome: The spending priorities were passed unanimously.

Additional Public Comment – Reserved and General Time

Alan Haber (Human Rights): [Haber had a chance to speak because one of the people who had signed up for public commentary reserved time to speak to the issue of the Germantown study committee did not appear. A maximum of 10 speakers can reserve a three-minute speaking slot, with first preference given to those who wish to address an item on that night's agenda.] Haber gave a nod to previous speakers who had talked about Germantown. He said that he didn’t know it was called Germantown, but loved the idea of preserving the area. He was there, however, to report back on the candlelight vigil he’d announced at a previous council meeting, which commemorated the 60th anniversary of the Universal Declaration of Human Rights. He said that for the vigil they had “33 bright lights.” Haber indicated that they would be continuing the endeavor to bring human rights to the forefront. As a part of that continuing effort, he said that there would be a follow-up meeting at Wed., Dec. 17, at 210 S. 4th Ave. from 6-9 p.m. to which everyone was invited.

Tom Partridge (Affordable Services): Partridge began by criticizing the three-minute time limit for public commentary, as it was uniformly applied across age and or disability. He also criticized the requirement that one’s name, address, phone number and topic be given in advance, as an infringement on freedom of expression. He called on the council to pass a resolution that addressed provision of affordable transportation, housing, and health care and to back that resolution with definite goals and plans. During general time afforded to citizens at the end of the meeting, Partridge noted that he’d run as a write-in candidate for county commission on a platform of protecting our most vulnerable residents. To date, he said, these goals had not been addressed by council. He singled out the reduction in scope of para-transit services provided by the Ann Arbor Transportation Authority to his own housing development as one example that should be addressed.

Scott Rosencrans (Liaison to Council from PAC): Rosencrans introduced himself as liaison to council from the park advisory commission and asked council to let him know if they thought it would be useful for him to be at any particular council meeting.

Jim Mogensen (Replacement of Affordable Housing Units): Mogensen said that while doing other research he’d come across information that put the current effort to replace the affordable housing units lost at the old YMCA site in at least a 25-year historical context. That context dates back to an effort to create “minimum wage housing,” and included the co-signing of a loan by the city for the YMCA. The urgency on the part of the YMCA to sell the old building was driven, he said, by the need for cash in order to construct their new building. He characterized much of the past history of affordable housing as “the folly continues,” but said that the currently analyzed three sites represented a step in the right direction, concluding by saying, “Please don’t give up!”

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

Next meeting: Monday, Jan. 5 at 7 p.m. in council chambers, 2nd floor of the Guy C. Larcom, Jr. Municipal Building, 100 N. Fifth Ave.