The Ann Arbor city council declined to exercise its right of first refusal on the Edwards Brothers Malloy property at its special session on Feb. 24, 2014. Chuck Warpehoski (Ward 5) compared the process of reviewing the options over the last few weeks to riding a “see saw.” (“Art” by The Chronicle.)

That’s because the meeting was a special session, dealing with just one substantive issue: a resolution to exercise the city’s right of first refusal to purchase the 16.7 acre Edwards Brothers Malloy property on South State Street, and a closed session to discuss that issue.

The council’s 5-6 vote on the land acquisition fell short of a simple majority, let alone the 8-vote majority it needed. That vote came after the closed session, which lasted an hour and 40 minutes. The council then deliberated for about an hour and 10 minutes.

The council’s decision came four days after the University of Michigan’s board of regents had authorized proceeding with a purchase of the property for $12.8 million. The site is located at 2500-2550 South State Street, immediately adjacent to existing UM athletic facilities. It’s assumed the university would use the land at least in part to support its athletic campus.

Voting to exercise the right of first refusal were: Sabra Briere (Ward 1), Sally Petersen (Ward 2), Jane Lumm (Ward 2), Margie Teall (Ward 4), and mayor John Hieftje.

Voting against exercising the right of first refusal were: Sumi Kailasapathy (Ward 1), Christopher Taylor (Ward 3), Stephen Kunselman (Ward 3), Jack Eaton (Ward 4), Chuck Warpehoski (Ward 5) and Mike Anglin (Ward 5).

Deliberations focused on two main issues: (1) the financial risks and benefits; and (2) the city’s relationship with the university.

The motivation for the city to exercise its right of first refusal on the property was based in large part on a desire to protect the city’s tax base. The property current generates roughly $50,000 in annual real property tax revenue to the city’s general fund. But the city’s total revenue from the parcel is just 28% of the total taxes levied by all jurisdictions. The net present value over the next 25 years of the levy from all jurisdictions is roughly $6 million. That was weighed by the council against a purchase price of $12.8 million that reflected a “premium” over the appraised value of around $8 million.

Also a factor weighed by the council was a $218,000 annual holding cost for the land, which reflected a 1.7% interest rate that Flagstar Bank had offered. That’s about half the rate the council was assuming in its earlier review of its options.

Another piece of the financial equation was that the some of the tax abatement previously granted by the city to Edwards Brothers would be coming back to the taxing jurisdictions. That’s because by selling the property, Edwards Brothers would not be meeting all the terms of the tax abatement. There’s a clawback provision in that case – which returns taxes to jurisdictions amounting to a total of $200,000. Of that total, the city’s portion is $90,000. It’s under the terms of that tax abatement that the city had obtained a right of first refusal on the sale of the property.

The deal would have been financed from the general fund. According to the city’s year-end audited statements for FY 2013, the general fund unassigned balance stood at $14,392,854 as of June 30, 2013.

Councilmembers like Eaton and Kailasapathy were clearly opposed to exercising the city’s right of first refusal, based on the substantial risk they thought the city would be taking. Everything would need to go right, in order for the city to come out ahead, they said. Kailasapathy indicated that the “premium” price to be paid by the city for the real estate was a significant reason to vote against it.

Kunselman, in voting against the resolution, relied on what’s become for him a familiar criticism of “speculative development.” He cited in part what he’d learned taking a course on real estate from local developer Peter Allen, a lecturer at UM.

Councilmembers like Warpehoski and Taylor were less adamant about their no votes. Warpehoski thought the odds were “better than even” that the city would come out ahead long-term. But because the city would be gambling with public funds, he wondered if “better than even” was good enough. “Right now, I’m thinking maybe not,” he concluded. Earlier in the meeting Taylor had offered similar sentiments, saying that he’d “regretfully” vote no. “We could have pulled it off; we had a reasonable shot at pulling it off. In light of our mission, I think a reasonable shot is not good enough,” Taylor said.

The sixth vote against the resolution came from Anglin. He responded to one of the arguments made by those who supported the resolution – that by exercising its right of first refusal, the city could leverage some collaboration with the university on the future of the parcel. For Anglin, the price was too high just to sit at the same table with the university.

Petersen, Briere and Lumm specifically mentioned the ability to leverage some cooperation from the university on the future of the land as one argument for exercising the city’s right of first refusal. Kunselman called that trying to take the parcel hostage and holding a gun to the university’s head. But some who supported the resolution saw the possibility that exercising the right of first refusal could lead to improved city-university relations.

Hieftje ventured that the city-university relationship is as good now as it has ever been, adding: It’s a good relationship as long as things happen the way the university wants them to.

Those voting yes generally felt that the risk to the city posed by exercising the right of first refusal justified the potential benefit to the city’s tax base. They also cited the opportunity to control the future of the parcel, and to influence development in that part of the city. Responding to a remark from Warpehoski earlier in the meeting – that the South State Street corridor did not give him “warm fuzzies” – Teall said: “I like it. It’s my neighborhood.”

Some background information on the possible acquisition of the property by the city was released last week, on Feb. 18, the day of a regular council meeting. [Edwards Brothers chart] [Additional offer for Edwards Brothers] [Feb. 18, 2014 memo to council]

This article provides more background on the council’s handling of the issue, a sketch of the deliberations, and a more detailed presentation of the deliberations.

Background on Prior Council Action

Prior to the Feb. 24 session, the council most recently had voted to postpone the question of using its right of first refusal on the Edwards Brothers property. That happened at its Feb. 18, 2014 meeting – after a closed session that lasted about 25 minutes.

Before that, the council had on Feb. 3 postponed the item “to our next meeting” – which at that time was scheduled for Feb. 18. But subsequently a special meeting was called for Feb. 10 to consider the question. That special meeting was then cancelled.

Earlier, at its Jan. 6, 2014 meeting, the council had directed the city administrator and the city attorney to explore options and gather information about the Edwards Brothers land. The due date for that gathering of information was specified in the council’s resolution as Jan. 30 – the same day that the land-purchase item was added to the Feb. 3 agenda.

At its following meeting, on Jan. 21, 2014, the council approved without discussion a $25,550 contract with Atwell LLC for environmental site assessment services on the property. That assessment included a survey of asbestos-containing materials.

The pending sale of the property to UM was announced in a Nov. 27, 2013 press release. The business – a fourth-generation Ann Arbor publishing and printing firm – had signaled its intent to put the property on the market in late July.

An item authorizing the $12.8 million purchase was approved on Feb. 20, 2014 by the UM board of regents, so that the university could move ahead if the city did not exercise its right of first refusal.

The city’s right of first refusal on the property was a condition of a tax abatement granted by the city council three years ago, on Jan. 18, 2011. Purchase by the university would remove the property from the tax rolls. Washtenaw County records show the taxable value of the property at just over $3 million. In 2013, Edwards Brothers paid a total of $182,213 in real property taxes, not all of which is the city’s levy. The total city levy of 16.45 mills on $3 million of taxable value works out to about $50,000.

According to the tax abatement agreement, the event triggering the city’s right-of-first-refusal window of 60 business days was a formal notification to the city by Edwards Brothers, which was made on Nov. 27, 2013. According to a staff memo from city administrator Steve Powers, the city had until Feb. 26, 2014 to exercise its right of first refusal. If the city decided to exercise that right, it had to close on the purchase by Feb. 28, 2014.

Deliberations: Brief Overview

Stephen Kunselman (Ward 3) had possibly telegraphed his intent to vote no on the question by voting against going into closed session on Feb. 18. Discussion of land acquisition is one of the exceptions in the Michigan Open Meetings Act, which otherwise requires that all parts of a meeting be open to the public. Votes to go into closed session require a roll call vote of the council under the OMA.

At the council’s Feb. 24 special session, Kunselman repeated his no vote on the question of going into a closed session.

Before the meeting, Community Television Network staffer Christopher Maassen explained to city clerk Jackie Beaudry that a new microphone had been provided for her.

So when deliberations opened, a provisional tally would have already had Kunselman in the no column. But the first four councilmembers to speak indicated they’d be supporting the resolution: Sally Petersen (Ward 2), followed by Sabra Briere (Ward 1), then Margie Teall (Ward 4) and Jane Lumm (Ward 2).

Then Jack Eaton (Ward 4) weighed in against the resolution, followed by Sumi Kailasapathy (Ward 1). Another no vote besides Kunselman’s anticipated expression of opposition would at that point have provisionally settled the issue.

That indication of opposition came from Christopher Taylor (Ward 3), which was a surprise to many – including Kunselman. But Taylor’s position was not adamant. In fact, he wound up arguing that the case for voting yes was stronger than other no-voters had let on.

By the time Kunselman weighed in, that brought the tally to four councilmembers who said they’d be opposing the resolution. Mike Anglin (Ward 5) then added sentiments against the resolution, as did Chuck Warpehoski (Ward 5).

Warpehoski and mayor John Hieftje both noted when they spoke that it was already apparent how the vote was going to turn out.

The tally for mayoral candidates on the vote was 2-2: Briere and Petersen voted for the resolution; Kunselman and Taylor voted against it. All of these councilmembers have declared their candidacy for mayor in this year’s Democratic primary.

Deliberations

Sally Petersen (Ward 2) led off deliberations by saying they all had known University of Michigan has been interested in the property, and that it’s a special situation for the city.

From left: Sabra Briere (Ward 1) and Sally Petersen (Ward 2).

They’d heard consistently from UM that on topics of mutual interest, the university would certainly collaborate with the city, she noted. This is a situation where the city and the university literally have common ground and mutual interest, Petersen said. And figuratively, the parcel’s tax base makes a significant contribution to the ability of the city to provide quality of life to its residents. She said that the issue of quality of life was of mutual interest to both UM and the city of Ann Arbor. It’s a pivotal time and a chance to collaborate well with UM – if the city chooses to purchase the land. And collaborating with the UM is just one option available, she said.

So Petersen was prepared to vote yes – because the city’s acquisition of the land could help improve the city-university relationship in precedent-setting ways. If for some reason the university and the city can’t collaborate, she added, then other options are available. The council was not voting that evening on what to do with the property. Rather, the council was just voting on whether to exercise the right of first refusal. Petersen called it a great opportunity for the city that the city doesn’t have very often. That opportunity was the chance to own an asset that could be mutually beneficial for the quality of life for both the city and the university.

Sabra Briere (Ward 1) was up next. She thanked Petersen for her comments, saying they echoed many of her own thoughts over the last day.

Sabra Briere (Ward 1).

Briere reported she’d talked to the most fiscally conservative people she knows – who have advised her to exercise the right of first refusal if given a choice. That surprised her, because those are people who she would have called “risk averse” and people who look askance at government spending. Yet those people have uniformly asked her to exercise the right of first refusal. She had also spoken with University of Michigan representatives about the mutual relationship and about the development the university has engaged in and the university’s expectations of support from the city. Of particular interest to her was a conversation that made it clear that if the city exercised its right of first refusal, then the university would have a reason to talk with the city.

The only reason the university  was even considering thinking about the city’s South State Street corridor plan or how the property could be used to benefit both the city and the university is because city was considering exercising the right of first refusal, Briere said.

So Briere said she’d join Petersen in thinking it could be an opportunity to engage in a productive discussion with the university. It might benefit the city’s fiscal situation as well as benefiting the university’s ambition. And for those who urged her to exercise the right of first refusal not because they were conservative but because they were aggressive, she felt that many people would like the UM to understand its impact on the community.

Margie Teall (Ward 4).

Margie Teall (Ward 4) thanked Briere and Petersen for their comments about collaborating with University of Michigan. She saw it as a positive opportunity for the city as well – something that could be very beneficial to the city. She thanked the city staff who had done a very thorough job of reviewing the information and “looking under every rock,” she said. The due diligence has been great, and the information that’s been shared has been very valuable, Teall said. She’d be joining Briere and Petersen in supporting the resolution.

Jane Lumm (Ward 4) was the fourth voice of support out of the first four councilmembers to speak. She called it a difficult decision. She said she could understand how councilmembers could end up in different places on this issue. As a general rule, the city should not be in the real estate business, she said. But as councilmembers, they should decide when it’s appropriate and should not just avoid any and all risk.

She had reached out to UM, but it became clear that it the university was not interested in talking to the city before now. Even though she’d tried to see if the city and university could have a conversation about what could be mutually beneficial, there was not much interest on the university’s side – unless the city exercised the right of first refusal.

Lumm saw this as an opportunity to work with the university. As Teall pointed out, she said, the city staff has conducted a lot of analysis and due diligence. And that’s helped guide the council. The city would be taking on financial risk, she said, with outcomes ranging from a potential $2.2 million loss to a $1.2 million gain. If the city retained control, that would best serve the city’s long term financial interest, Lumm said. When you consider the value of taxes retained for other taxing jurisdiction – if the city exercised its right of first refusal – the financial equation tilts to the positive side, she said. She allowed that she works for the city – not the other taxing jurisdictions – but retaining taxes for the other jurisdictions is a significant interest, too. Risking tax dollars now, in order to protect the tax base for the city and other jurisdictions, would ultimately serve the taxpayers. On balance, Lumm concluded the benefits of the city purchasing the property warranted the risk.

Jack Eaton (Ward 4) offered the first sentiments against exercising the city’s right of first refusal. At the beginning of the process, he said, he wanted nothing more than to keep the property on the tax rolls. It’s a unique parcel in that if the city purchased it, the University of Michigan can’t just go out and buy another 17 acres that serves the same purpose. As he looked at the numbers, however, he’d become more skeptical. Everything has to go absolutely right, he said, in order for the city to come out on the positive side.

In the meantime, Eaton said, the city would be spending about $218,000 a year on an interest-only loan, which would “dwarf” the city’s general fund reserves. The city would also need to try to obtain a $1.5 million brownfield grant. Every aspect of the acquisition of the property by the city is full of potential, but also full of risk. He couldn’t see “gambling with taxpayers’ money,” when the potential for disaster seems to be equal to that of coming out ahead. So he’d vote against the resolution.

From left: Sumi Kailasapathy (Ward 1) and Sabra Briere (Ward 1).

Sumi Kailasapathy (Ward 1) picked up on Eaton’s thoughts, saying that for her it’s a risk-reward calculus. Everything we do in life is full of risks, she said, but we should weigh that against benefits and rewards.

Her main concerns included the fact that the valuation of the property had come out at about $8 million. The city would be purchasing the property for about $12.8 million. Based on the information the council had been provided, the downside could realize capital loss of up to $4 million. She allowed that would be a worst-case scenario. If the property remains on the tax rolls, 28% of the benefit would accrue to the city. But the city would be taking 100% of the risk. She might have felt differently if all the taxing jurisdictions split the risk.

A third issue was the holding cost of $218,000. That would come out of the general fund, and she wondered what would have to be cut as a result – because nothing is certain. What if the city needed to hold the land for three or four years? That would add up to another $1 million. She did not feel confident enough that there’s a market for commercial development. She hasn’t seen a market study that says an additional mall or apartment complex is needed. The downside could be devastating, she said.

Christopher Taylor (Ward 3) led off his remarks by echoing the thanks that had been expressed to staff. At each and every turn, when he’d had questions, the staff had come through with answers that were as clear as possible in a shifting environment. Along the way he had felt well supported.

City of Ann Arbor chief financial officer Tom Crawford. City staff received praise around the table from councilmembers in connection with the due diligence process.

Like Eaton, when this first came up, Taylor said, he was enthusiastic and quite willing to explore the possibility, because the loss of land and tax base is an important long-term challenge with respect to the university. Great benefits accrue to the city due to UM, Taylor said, but one downside is that when the university expands, it does draw land off the rolls. And that’s a long-term challenge to the city: to maintain services to residents and to improve quality of life for residents. So when this issue first came before the council, he felt it was an exciting opportunity to have some agency over that long-term challenge.

Taylor would have liked the university to have engaged in a conversation with the city before an offer had been made to Edwards Brothers. That would have been a fruitful and collaborative effort, he felt. It didn’t turn out that way, and he understood that the interests of the city and the university are not necessarily at odds, but they are not entirely congruent.

So it comes to the city council to decide whether to exercise the right of first refusal, Taylor said. As others had already said, it could go either way: There could be gain or loss. The city has had conversations with people who are interested in purchasing the property – and the city knew that the university is interested in purchasing the property. All those things suggest there is some market opportunity, he said.

Taylor addressed the issue of asymmetric risk: The city stands to get 28% of the benefit in exchange for bearing 100% of the risk. “That’s pretty big for me,” he said. If he were in the business of purchasing real estate, and selling it to developers, he felt it was a deal that could easily work. “There is plainly demand here,” he said, and he thought that the risk is not as great as other councilmembers had indicated. But there is plainly risk, he allowed.

Jane Lumm (Ward 2) and Christopher Taylor (Ward 3).

So he stepped back and asked: “What is mission here?” For Taylor, the mission is to provide quality of life for residents, and to maintain and improve that quality of life with residents, to provide services and to do “the things that residents demand of us.” That requires money, he noted, and so those things are somewhat at odds.

As Taylor approached his conclusion, he set himself up to express the position opposite to the one he wanted to take: “In the end, however, I don’t think that the risk here is – I framed that wrong. I think that the risk here is greater than the reward, in light of our mission.” The city’s mission is municipal, it’s not economic, he said. “We’re not in the real estate business. We’re in the business of providing services and creating a city where people can live and thrive.” So he said he’d “regretfully vote no.”

“We could have pulled it off; we had a reasonable shot at pulling it off,” Taylor said. “In light of our mission, I think a reasonable shot is not good enough.”

Stephen Kunselman (Ward 3) led off his remarks thanking Taylor, saying, “That was well said,” and adding “actually, I’m surprised.” Kunselman then laid out his own position by saying: “I am risk averse.” [At this point, four votes against the resolution were clear.] He’s consistently been opposed to speculative development using taxpayer dollars, he said, noting that he was one of the first to “jump off the bus” on the former Y lot project.

Stephen Kunselman (Ward 3).

At one of the first council meetings after Kunselman was elected, the city was partnering on the Broadway Village, he said – and that’s still vacant land. He thought the city was going to get a parking structure out of it. In considering what other communities have done with speculative development, he looked at Sylvan Township and the added tax cost to that community. None of the Sylvan elected officials are still there, he said, but the community is paying for it.

Kunselman looked at Ypsilanti and the Water Street project. He could only imagine the conversations that officials were having when that project was proposed – but he ventured that they were similar to those the Ann Arbor city council had just had in closed session. “How great it would be, how unique, how thoughtful and foresighted … that the community would spend lots and lots of money for future development that nobody had any idea of what they were doing.”

He looked at the city of Troy, which had partnered with a developer. They got a new train station but can’t figure out who owns the land, so that’s going to end up in court, Kunselman ventured. He also pointed out that the city of Ann Arbor borrowed millions of dollars in connection with the Library Lane underground parking structure, to put in infrastructure [stronger foundations, among other elements] to support future development, but “we have no idea what we’re doing there.”

“No, I’m not into speculative development,” Kunselman continued. That’s out of the realm of health, safety and welfare, he said. About the holding cost for the land, he characterized $218,000 annually as three FTEs [full-time equivalent employees]. If the city has that much money to put toward interest-only payments, then the city had money it could put toward three beat cops downtown, he ventured. “What’s our priority? Beat cops or speculative development?” he asked.

As far as working with the university, “that bus left the station a while ago,” Kunselman said. What is being talked about now is “holding the property hostage and putting a gun to the university’s head” and saying, “come talk to us now.” That’s not a great way to start a relationship, Kunselman said. But he agreed with Taylor: If UM keeps buying property, Ann Arbor’s quality of life is going to go down. He hoped UM at some point understands, that at some point it’s going to “kill the goose that lays the golden egg” that provides quality of life for students.

All the students who come from around the world to this community will be isolated downtown, “while the rest of us are trying to fill potholes out in our neighborhoods,” Kunselman said. Speculative development is always based on assumptions, and as Eaton had pointed out, every piece has to work, and if one piece misses, then it fails, Kunselman said. If it winds up in court, the city would lose, he ventured. Local government doesn’t have governmental immunity when it comes to speculative development, he said. So he would not be supporting this.

Petersen took a second turn to reiterate something Kunselman had said: If UM continues to buy up property, the quality of life is going to go down. That’s what would be prevented by exercising the city’s right of first refusal, she contended. When she heard Eaton say that everything has to go right, and when Kunselman says that he doesn’t support speculative development, she wanted to stress that the council was not voting on speculative development that night. The council was not voting on a purchase agreement with a developer. So not everything has to go right, she said.

The council would be buying itself an opportunity to “make things more right,” Petersen said. The downside of not exercising the right of first refusal is a $6 million net present value hit to all the taxing authorities over 25 years, she noted. That was significant to her. She allowed that the city is not in the business of speculative development, but the city is in the business of protecting revenue streams for the city. If the right of first refusal is not exercised, then there will be a significant loss to the city’s revenue stream. If the city does exercise that right, the city has a better chance of increased revenue, Petersen concluded.

Mike Anglin (Ward 5) thanked other councilmembers and staff. He said that when the property on State Street came on the market, the right of first refusal looked like a great opportunity. But when you think about it, he said, it seems speculative. It might be a way to have a conversation with the university, he said, nothing that there’s going to be a new administration at UM. [UM president Mary Sue Coleman is retiring this year, to be replaced by Mark Schlissel.]

Purchasing land and holding it as a “gift” to the university would distract the city from its focus on serving the citizens, Anglin said. There are many things that are not being done that should be done, he noted, and this purchase would make the city potentially vulnerable. About the idea that the land could be used to leverage a conversation with the university, Anglin said, “That’s too high a price to sit at the table with the university.”

Chuck Warpehoski (Ward 5).

Chuck Warpehoski (Ward 5) began by saying that for him, the process has been a see saw: He’s been for it, then against it, for it, then against it. Counting the votes expressed in the deliberations up to that point, Warpehoski ventured that it doesn’t matter what he thinks, so that gave him some freedom to “do whatever I want! I think we should open up a Chuck E. Cheese’s there! ”

He rejected Kunselman’s comparison that acquiring the property was a way to put a gun to the head of the university. That’s just not accurate, Warpehoski said. There’s a lot of detailed collaboration between the city and the university on issues of infrastructure, he said. But sometimes on larger issues it’s difficult to get traction for an agreement. The only way to have a successful negotiation is when you have something the negotiating partner wants or fears. When it comes to the university, he said, the city typically has neither.

Some of the council’s conversation up to that point had been about risk and reward, Warpehoski noted. And that is a big question as the council has looked at the issue from the financial side of things. If the city declines to exercise its option, the city would have a guaranteed loss to the general fund of $50,000 over 25 years. If the city does exercise its right of first refusal, there’s a possible loss or possible gain – but it’s a roll of the dice, he said.

Warpehoski felt the odds were better than even, but it’s still a roll of the dice. Another element is the quality of life piece. The city had been approached by people who develop housing and by people who develop retail. When he thinks of that stretch of South State Street, he doesn’t “get warm fuzzies.” It’s not his favorite part of the city. He was not confident that if UM bought it or the city bought, that his attitude toward that stretch would change. But that quality of life component is a part of the risk-reward calculation.

The conversations at the table reminded Warpehoski of the three questions of Rabbi Hillel. The first question is: “If I am not for myself, who will be for me?” That cuts both ways, Warpehoski said: If the city is for itself, there’s the risk of losing tax revenues or incurring a loss to the general fund. But there’s a potential gain of taxable value. Rabbi Hillel’s second question was: “If I am only for myself, what am I?” There are other people this conversation affects, Warpehoski said. Hillel’s third question: “If not now, when?” On the third question, Warpehoski said, “Well, we’re out of time so that one is easy.” He thought the city’s odds are better than even, he said, but it’s public funds he’d be gambling with, so he wondered if better than even is good enough. “Right now, I’m thinking maybe not,” he concluded.

Lumm allowed that it was an academic argument at this point [given the nose count of councilmembers who'd expressed opposition]. But she followed up on a point Petersen had made: that the other taxing jurisdictions stood to lose $6 million in tax revenue over the next 25 years, if the city did not exercise its right of first refusal.

Jane Lumm (Ward 2) and city attorney Stephen Postema.

She called protecting the tax base a “share responsibility,” allowing that it was unfortunate that the city would be bearing all the risk. There’s an upside to controlling a major parcel, she said. It’s a once-in-a-lifetime opportunity on one of the city’s busiest corridors, she said. It could be a potential catalyst to redevelopment of the corridor and realizing master plan goals. It would not only protect the tax base, it would increase it. She’d done her best to reach out to the university. She commended city administrator Steve Powers for extending an olive branch many times to the university.

It’s unfortunate when she heard from the university that if the city exercised its right of first refusal, it would have a chilling effect on the city-university relationship: “What does that say?” Lumm asked. That’s not something that partners say to each other, she said. Powers has put forth a superb effort and tried “valiantly” to reach out to the university, Lumm said. The city needs the university to understand that the city is serious about protecting its tax base. Because of the lack of interest up to now, the city didn’t have negotiating leverage, she said.

Kunselman followed up on some of the commentary about the city-university relationship. “Everyone knows I work for the university,” he said. He pointed out that this was the first year that the council has not had an invitation to a regent-council dinner or cocktail hour. “So our relationship is obviously not doing very well,” he ventured. Last year, the event was canceled because of the UM basketball team made the Final Four. In prior years, the council and regents had some social interaction around this time of year, Kunselman noted. He didn’t think that purchasing the property would be a nice way to say that the city wants to restore its relationship.

Ann Arbor city administrator Steve Powers.

Everything has unintended consequences, Kunselman said, and that why it’s called speculative. It’s an admirable goal to try to protect the tax base. But the city could not be able to outbid the university on every piece of land it wants over the coming years. And the city knows which property the university wants: It’s next to the land they already own. That’s strategic planning on their part, he said. The university has an “institutional patience” that the city council does not have, Kunselman said. The university can plan ahead for decades.

The question is whether the city can establish a better relationship with UM and encourage the university to start building “up instead of out.” Kunselman ventured that when UM bought the Pfizer property, “none of us were complaining then. We looked at it as a good thing.” [Across the table from Kunselman, Teall was visibly exasperated at Kunselman's remarks about Pfizer, expressing some incredulity.] Kunselman responded to Teall, saying he remembered being happy about it. There were people talking about how good it was that the property was being “backfilled with people,” Kunselman said. At least, he said, the city was not trying to outbid the university. He didn’t think it was the greatest thing either, because the acquisition of the Pfizer property by UM resulted in the city losing 4% of its tax base. But the buildings were at least not sitting empty. [The former Pfizer campus is now the UM North Campus Research Complex (NCRC).]

As a real estate deal, the city would be buying high so it was priced at a premium, Kunselman said. That’s not good real estate business sense to flip this and think you’re going to make some money, Kunselman said: He’d learned in that in Peter Allen’s real estate class. The idea that the city will protect the tax base by buying high, hoping to sell at a greater profit, doesn’t make a great argument, he said. Public health, safety and welfare – that is the city’s mission, Kunselman said. When the city’s quality of life is higher than other communities, that creates a strong tax base.

About the zoning in the area, Kunselman said that the master plan for South State Street doesn’t call for C3 (commercial) zoning. So he was not about to throw all the master planning documents out just to speculate. The planning documents reflect what the community wants in that part of the city, he said. He urged councilmembers to vote down the resolution, encouraging those who’d expressed support to change their minds.

Briere responded to Kunselman. The city didn’t exercise a right of first refusal on the Pfizer property, she said, because the city didn’t have one. And to suggest that the might have had such a right she found “a little distracting.” She recalled how many residents suggest that when someone proposes a use for a piece of property they oppose, that the city should simply purchase the land. She allowed there are no arguments to say that exercising the right of first refusal on the Edwards Brothers property is a safe risk.

But the question the council was considering was land acquisition, not zoning or a particular project, Briere stressed. The discussion was about being in control of how a piece of property was used in the future. She called that a rare situation for the city. Making the conversation about the University of Michigan is the “lowest hanging fruit” argument, she said. She didn’t look at it as being about the university. She ventured that the council would have had some of the same discussions about the land, if Edwards Brothers had chosen to sell it to a different party. In some cases, the university is a distraction. She understood both sides of the risk argument. “To me this is an acceptable risk,” she said, because she believed it was short-term.

Kailasapathy reiterated the fact that the $8 million appraisal compared to the $12 million purchase price reflected a 50% premium. The city would be paying a premium, and the clock was ticking. That 50% premium made the city vulnerable, she said. The city’s options would be narrowed by agreeing to pay that premium.

Taylor used his second turn to “defend the yes voters,” even though he was voting no. The argument based on the premium purchase price was not as strong as it was portrayed, because the terms of the deal include a rental payment and cell tower revenue. The city is also in a position that is distinct from an ordinary purchaser, Taylor said. The city’s economic return is influenced by the purchase price, but is not solely dependent on it. It’s not required that the city buy the property at $X and sell it as $(X + Y) – because the city can make it up on the back end. So the case for voting yes is stronger than what some councilmembers had portrayed, he said.

Taylor also thought that the council’s decision on this matter was not an “existential question” on the university-city relationship. Generally, the city and the university get along, he said. The university’s mission is distinct from the city’s, he said. He characterized the existing relationship as “cordial.” He said that an initial conversation between the university and the city would have been good at the point when the university was thinking about buying the property. But that didn’t happen and that was a disappointment.

Responding to a point Petersen had made that the loss was guaranteed, if the city did not exercise its right of first refusal, Taylor allowed that if the city did act, there was a chance to eliminate the loss and to achieve a benefit. But he concluded that the chance was not sufficient and the risk was off-mission.

From left: city attorney Stephen Postema and mayor John Hieftje.

Mayor John Hieftje ventured that the outcome was pretty clear at this point. He got clarification that some of the tax abatement granted by the city would be coming back to the other taxing jurisdictions. That’s because by selling the property, Edwards Brothers would not be living up to the terms of the tax abatement. City CFO Tom Crawford explained that there’s a clawback provision in that case. It returns taxes to jurisdictions amounting to a total of $200,000. The city’s portion of that is $90,000.

Hieftje called the opportunity to exercise the city’s right of first refusal as a very good thing to investigate. It was something that needed to be investigated thoroughly. He commended city staff for making that happen. Due diligence was indeed performed, he said. That had been necessary to satisfy the council and the public that everything had been looked into.

Hieftje ventured that the city-university relationship is as good now as it has ever been, adding: It’s a good relationship as long as things happen the way the university wants them to. He continued by saying that when university representatives produce their standard list of benefits that the university brings to the community, it’s as if UM is pretty much responsible for anything good that happens. But the items on the list are just what a state-financed university should be doing, he said.

Hieftje wished the university had reached out to the city before it got to this point. He’d made a call, and the city administrator had made efforts. It would have been be a perfect time to say: Let’s talk about this. But that didn’t happen, he said. At some point, Hieftje added, the university’s continued expansion will severely impact the quality of life in the city. He also pointed out the impact on other taxing jurisdictions, saying at some point, “They’re [UM] going to wear us all out.”

Hieftje responded to Kunselman’s earlier comments about the Library Lane parking structure as including speculative development. That had opened up the ability of downtown to have high tech jobs, Hieftje said, and the only way to build it smartly was to put it underground, with extra strong foundations.

Hieftje felt like the exercise of the right of first refusal would be going out on a little bit of a limb, not a big limb. He ventured that it could go either way – plus or minus $1 million.

Teall concluded by expressing disappointment about how the vote was going to turn out. She was also disappointed in the “over the top language” and the “posturing” that she’d heard around the table. She responded to Warpehoski’s remarks about the State Street corridor not being his favorite part of town: “I like it – it’s my neighborhood.” Lots of wonderful businesses are located along there, she said.

She ventured somewhat sardonically that perhaps the University of Michigan would put up a giant electronic billboard on the Edwards Brothers property. She expressed disappointment that the university would likely not extend Oakbrook to connect State Street and South Main, as it’s envisioned in the city’s corridor plan. She indicated that the university probably did not plan on making it a public road.

Teall concluded that it was a disappointing decision for her.

Outcome: On a 5-6 vote, the council rejected a resolution to exercise its right of first refusal to buy the Edwards Brothers property. Voting to support exercising the right of first refusal were: Sabra Briere (Ward 1), Sally Petersen (Ward 2), Jane Lumm (Ward 2), Margie Teall (Ward 4), and mayor John Hieftje. Voting against the resolution were: Sumi Kailasapathy (Ward 1), Christopher Taylor (Ward 3), Stephen Kunselman (Ward 3), Jack Eaton (Ward 4), Chuck Warpehoski (Ward 5) and Mike Anglin (Ward 5).

Present: Jane Lumm, Mike Anglin, Margie Teall, Sabra Briere, Sumi Kailasapathy, Sally Petersen, Stephen Kunselman, Jack Eaton, John Hieftje, Christopher Taylor, Chuck Warpehoski.

Next regular council meeting: March 3, 2014 at 7 p.m. in the council chambers at 301 E. Huron. [Check Chronicle event listings to confirm date.]

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The city council voted down a resolution that would have authorized Ann Arbor’s right of first refusal on the Edwards Brothers Malloy property, at a special session of the council on Feb. 24, 2014. That will allow the University of Michigan to purchase the property unimpeded.

The site is located at 2500-2550 South State Street, immediately adjacent to existing UM athletic facilities. It’s assumed the university would use the land at least in part to support its athletic campus.

The resolution in front of the council, which needed an eight-vote majority on the 11-member council, was defeated on a 5-6 vote. It would have approved the exercise of the city’s right of first refusal, appropriated necessary funds, and directed the city administrator to notify Edward Brothers Malloy about the exercise of the city’s right.

The vote came after a closed session lasting an hour and 40 minutes. The council then deliberated for about an hour and 10 minutes.

Some background information on the possible acquisition of the property by the city was released last week, on Feb. 18, the day of a regular council meeting. [Edwards Brothers chart][Additional offer for Edwards Brothers 2-18-14] [Feb. 18, 2018 memo to council]

Voting to exercise the right of first refusal were:  Sabra Briere (Ward 1), Sally Petersen (Ward 2), Jane Lumm (Ward 2), Margie Teall (Ward 4), and mayor John Hieftje.

Voting against exercising the right of first refusal were: Sumi Kailasapathy (Ward 1), Christopher Taylor (Ward 3), Stephen Kunselman (Ward 3), Jack Eaton (Ward 4), Chuck Warpehoski (Ward 5) and Mike Anglin (Ward 5).

In their remarks, most councilmembers cited the overall risk to the general fund that remained in most scenarios that might play out. Those that voted in support of the resolution indicated that their understanding was that the University of Michigan would not be interested in collaborating on the future of the property, unless the city exercised its right of first refusal.

Most recently, the council had voted to postpone the question at its Feb. 18, 2014 meeting after a closed session that lasted about 25 minutes.

Before that, the council had on Feb. 3 postponed the item “to our next meeting” – which was scheduled for Feb. 18. But subsequently a special meeting was called for Feb. 10 to consider the question. That special meeting was then cancelled.

Earlier, at its Jan. 6, 2014 meeting, the council had directed the city administrator and the city attorney to explore options and gather information about the Edwards Brothers land. The due date for that gathering of information was specified in the council’s resolution as Jan. 30 – the same day that the land-purchase item was added to the Feb. 3 agenda.

At its following meeting, on Jan. 21, 2014, the council approved without discussion a $25,550 contract with Atwell LLC for environmental site assessment services on the property. That assessment included a survey of asbestos-containing materials.

The pending sale of the property to UM was announced in a Nov. 27, 2013 press release. The business – a fourth-generation Ann Arbor publishing and printing firm – had signaled its intent to put the property on the market in late July.

An item authorizing the $12.8 million purchase was approved on Feb. 20, 2014 by the UM board of regents, so that the university could move ahead if the city did not exercise its right of first refusal.

The city’s right of first refusal on the property was a condition of a tax abatement granted by the city council three years ago, on Jan. 18, 2011. Purchase by the university would remove the property from the tax rolls. Washtenaw County records show the taxable value of the property at just over $3 million. In 2013, Edwards Brothers paid a total of $182,213 in real property taxes, not all of which is the city’s levy. The total city levy of 16.45 mills on $3 million of taxable value works out to about $50,000.

According to the tax abatement agreement, the event triggering the city’s right-of-first-refusal window of 60 business days is a formal notification to the city by Edwards Brothers, which was made on Nov. 27, 2013. According to a staff memo from city administrator Steve Powers, the city has until Feb. 26, 2014 to exercise its right of first refusal. If the city decides to exercise that right, it must close on the purchase by Feb. 28, 2014.

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 council will next take up the question at a special session on Feb. 24, 2014, which will also possibly feature a closed session.

The council voted to postpone the question at its Feb. 18, 2014 meeting after a closed session that lasted about 25 minutes. The resolution delayed by the council would approve the exercise of the city’s right of first refusal, appropriate necessary funds, and direct the city administrator to notify Edward Brothers Malloy about the exercise of the city’s right. Some background information on the possible acquisition of the property by the city was released earlier in the day. [Edwards Brothers chart][Additional offer for Edwards Brothers 2-18-14] [Memo to council]

The council had on Feb. 3 postponed the item “to our next meeting” – which was scheduled for Feb. 18. But subsequently a special meeting was called for Feb. 10 to consider the question. That special meeting was then cancelled.

Earlier, at its Jan. 6, 2014 meeting, the council had directed the city administrator and the city attorney to explore options and gather information about the Edwards Brothers land. The due date for that gathering of information was specified in the council’s resolution as Jan. 30 – the same day that the land-purchase item was added to the Feb. 3 agenda.

At its following meeting, on Jan. 21, 2014, the council approved without discussion a $25,550 contract with Atwell LLC for environmental site assessment services on the property. That assessment included a survey of asbestos-containing materials.

The pending sale of the property to UM was announced in a Nov. 27, 2013 press release. The business – a fourth-generation Ann Arbor publishing and printing firm – had signaled its intent to put the property on the market in late July.

An item authorizing the $12.8 million purchase is on the Feb. 20 UM board of regents agenda, based on the assumption so that the university can move ahead if the city doesn’t exercise its right of first refusal.

The city’s right of first refusal on the property was a condition of a tax abatement granted by the city council three years ago, on Jan. 18, 2011. Purchase by the university would remove the property from the tax rolls. Washtenaw County records show the taxable value of the property at just over $3 million. In 2013, Edwards Brothers paid a total of $182,213 in real property taxes, not all of which is the city’s levy. The total city levy of 16.45 mills on $3 million of taxable value works out to about $50,000.

According to the tax abatement agreement, the event triggering the city’s right-of-first-refusal window of 60 business days is a formal notification to the city by Edwards Brothers, which was made on Nov. 27, 2013. According to a staff memo from city administrator Steve Powers, the city has until Feb. 26, 2014 to exercise its right of first refusal. If the city decides to exercise that right, it must close on the purchase by Feb. 28, 2014.

This brief was filed from the city council’s chambers on the second floor of city hall located at 301 E. Huron.

The vote was postponed until the council’s next regular meeting on Feb. 18. The vote to postpone was unanimous, and came after a roughly hour-and-forty-minute closed session. The council did not discuss the item before voting to postpone.

The resolution would approve the exercise of the city’s right of first refusal, appropriate necessary funds, and direct the city administrator to notify Edward Brothers Malloy about the exercise of the city’s right. The agenda item contained no other background information.

At its Jan. 6, 2014 meeting, the council had directed the city administrator and the city attorney to explore options and gather information about the Edwards Brothers land. The due date for that gathering of information was specified in the council’s resolution as Jan. 30 – the same day that the land-purchase item was added to the Feb. 3 agenda.

At its following meeting, on Jan. 21, 2014, the council approved without discussion a $25,550 contract with Atwell LLC for environmental site assessment services on the property. That assessment included a survey of asbestos-containing materials.

By way of background, the pending sale of the property to UM was announced in a Nov. 27, 2013 press release. The business – a fourth-generation Ann Arbor publishing and printing firm – had signaled its intent to put the property on the market in late July.

The city’s right of first refusal on the property was a condition of a tax abatement granted by the city council three years ago, on Jan. 18, 2011. Purchase by the university would remove the property from the tax rolls. Washtenaw County records show the taxable value of the property at just over $3 million. In 2013, Edwards Brothers paid a total of $182,213 in real property taxes, not all of which is the city’s levy. The total city levy of 16.45 mills on $3 million of taxable value works out to about $50,000.

According to the tax abatement agreement, the event triggering the city’s 60-day right-of-first-refusal window is a formal notification to the city by Edwards Brothers, which was made on Nov. 27, 2013. The council will still be within the 60-day window when it votes at its Feb. 18 meeting.

The resolution the council will be taking up again at its Feb. 18 meeting requires an eight-vote majority on the 11-member council – because the resolution changes the city budget and involves a purchase of real estate. Stephen Kunselman (Ward 3) was absent from the council’s Feb. 3 meeting – because he was attending a professional conference of the Association of Physical Plant Administrators (APPA). He works in the University of Michigan’s energy office as Planet Blue energy conservation liaison.

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron.

In action taken at the council’s Jan. 21, 2014 meeting, councilmembers approved a $25,550 contract with Atwell LLC for environmental site assessment services to evaluate the property. The University of Michigan has made an offer to Edwards Brothers to purchase the property for $12.8 million, but the city has a right of first refusal.

At its Jan. 6, 2014 meeting, the council directed the city administrator and the city attorney to explore options and gather information. So the site assessment by Atwell is part of that effort. The council is working within a 60-business-day window that began Nov. 27, 2013.

By way of background, the pending sale of the property to UM was announced in a Nov. 27, 2013 press release. The business – a fourth-generation Ann Arbor publishing and printing firm – had signaled its intent to put the property on the market in late July.

The city’s right of first refusal on the property was a condition of a tax abatement granted by the city council almost three years ago, on Jan. 18, 2011. Purchase by the university would remove the property from the tax rolls. Washtenaw County records show the taxable value of the property at just over $3 million.

According to the tax abatement agreement, the event triggering the city’s 60-day right-of-first-refusal window is a formal notification to the city by Edwards Brothers, which was made on Nov. 27, 2013.

Discussion at the city council’s Sunday night caucus on Jan. 19 indicated that conversations are taking place between city officials and the university about UM’s needs and how the Edwards Brothers property meets those needs – with an eye towards the possibility of the city and the university arriving at a mutually agreeable outcome where the city acquired only a portion of the property.

Caucus discussion also indicated that talks are taking place between the city and developers who might have an interest in purchasing the property from the city. One obstacle in those conversations is the fact that the university could still eventually exercise its right of eminent domain to acquire the property from a developer, even after purchasing it from the city. But that would require convincing a court that the expansion of the university’s athletic campus at that location would be in the public interest.

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 direction came after the city council met in a closed session for about half an hour during its Jan. 6, 2014 meeting, and then emerged to pass the resolution. [amended Edwards Brothers resolution on Jan. 6, 2014]

The resolution provides direction to explore options to make the purchase financially feasible. That means finding a way to finance a $12.8 million deal. The sale of the Edwards Brothers property on South State Street is currently pending to the University of Michigan for $12.8 million, in a deal that was announced in a Nov. 27, 2013 press release. The business – a fourth-generation Ann Arbor publishing and printing firm – had signaled its intent to put the property on the market in late July.

But a right of first refusal on the property is held by the city of Ann Arbor as a condition of a tax abatement granted by the city council almost three years ago, on Jan. 18, 2011. Purchase by the university would remove the property from the tax rolls. Washtenaw County records show the taxable value of the property at just over $3 million. In his remarks on the resolution made at Monday’s meeting, mayor John Hieftje cited the city’s clear interest in maintaining the property on the city’s tax rolls.

According to the tax abatement agreement, the event triggering the city’s 60-day right-of-first-refusal window is a formal notification to the city by Edwards Brothers. Some people not affiliated with the city reportedly believe that this took place on Nov. 26 – but as of early December, there was not consensus on the city’s side that notification had taken place on that date. The 60 days in question are 60 business days, so if the council acted by its second meeting in February, that issue would be in any case moot.

Updated at 2:27 p.m. Jan. 9, 2014: According to city administrator Steve Powers: “The City is operating on a timeline to provide notice to Edwards Brothers prior to February 25, 2014. This calculation is made from Nov. 27th, 2013.”

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 Ann Arbor city council’s Dec. 2, 2013 agenda is comparatively light, but might not lead to an especially short meeting.

The sign on the door to the Ann Arbor city council chamber, installed in the summer of 2013, includes Braille.

Items that could result in considerable council discussion include final approval of a repeal of the city’s crosswalk ordinance. A scheduled public hearing on that issue could also draw a number of speakers. The council gave initial approval to the repeal at its Nov. 18, 2013 meeting – on a 9-2 vote.

The tally could be closer for the final vote, as mayor John Hieftje, Sabra Briere (Ward 1) and Chuck Warpehoski (Ward 5) could join Christopher Taylor (Ward 3) and Margie Teall (Ward 4), who had dissented on the initial approval. Also a possibility is that a compromise approach could be worked out. The possible compromise would leave intact the language about motorists stopping, but still limit the right-of-way to just pedestrians within a crosswalk – that is, it would not afford the right-of-way to those standing at the curb.

Some of the public’s perspective and council discussion on the crosswalk issue was aired out during the council’s Sunday caucus, held in council chambers at city hall. This week the caucus was rescheduled for 1 p.m. instead of its usual evening start time, to accommodate more discussion of the local crosswalk law. The caucus drew six councilmembers and a dozen members of the public, and lasted three hours.

Another topic that could extend the Dec. 2 meeting is related to the pending sale of the Edwards Brothers property on South State Street to the University of Michigan for $12.8 million, which was announced in a press release last week. A right of first refusal on the property is held by the city of Ann Arbor as a condition of a tax abatement granted by the city council almost three years ago, on Jan. 18, 2011.

There’s some interest on the council in holding a closed session on Dec. 2 to review the options and the impact of those options. Any interest on the council in acquiring the land, which seems somewhat scant, would be based on a desire eventually to put the land back on the tax rolls. The topic of land acquisition is one of the legal exceptions to the Michigan Open Meetings Act, which requires all deliberations of a public body to be open to the public. If the council holds a closed session on that topic, it could extend the Dec. 2 meeting.

One reason the council may have little appetite for acquiring the Edwards Brothers property is that the city has just now managed to sell a downtown property the city acquired 10 years ago – the old Y lot on William Street, between Fourth and Fifth avenues. Approval of the $5.25 million sale to Dennis Dahlmann came at the council’s Nov. 18 meeting. But it’s possible that not all the due diligence will be completed before Dec. 16, when the city owes the $3.5 million principal it used to purchase the property. As a hedge against that possibility, the council will be asked on Dec. 2 to approve a six-month extension on the installment purchase agreement with Bank of Ann Arbor for the $3.5 million.

In the meantime, the minutes of the Ann Arbor Downtown Development Authority’s most recent operations committee meeting reflect the DDA’s expectation that all of the equipment used to operate the public surface parking facility at the old Y lot will need to be removed by Dec. 31, 2013.

The city’s right of first refusal on the Edwards Brothers property is linked to a tax abatement. And on the council’s Dec. 2 agenda is an item that would establish an industrial development district (IDD) for a different property, at 1901 E. Ellsworth, where Extang Corp. and GSG Fasteners are located. Creating an IDD is a step in the process for granting a tax abatement.

Land control and use is a predominant theme among other Dec. 2 agenda items as well.

The council will be asked to give initial approval to a rezoning request for the Traverwood Apartments project – from ORL (office, research and light industrial district) to R4D (multiple-family district). The First Martin Corp. project would include 16 two-story buildings for a total of 216 one- and two-bedroom units – or 280 total bedrooms. The site plan and final rezoning approval would come before the city council at a future meeting. The Dec. 2 meeting will also include council’s consideration of a donation of 2.2 acres to the city from Bill Martin just north of the Traverwood Apartments project site. The acreage to be donated is next to the city’s Stapp Nature Area and the Leslie Park golf course.

At its Dec. 2 meeting, the council will also be asked to approve the site plan for a three-story addition to the Running Fit store at the northwest corner of Fourth Avenue and Liberty Street in downtown Ann Arbor. The first floor will be retained as retail space, but six residential units would be built on the upper three floors – one two-bedroom and five one-bedroom units.

The city council will also be asked to place a value on land currently used as on-street parking spaces – $45,000 per space. By formally adopting that figure, any future development that causes the removal of on-street parking could be charged that amount. It would be paid to the Ann Arbor DDA, which manages the city’s public parking system. In this matter, the council would be acting on a four-year-old recommendation, approved by the Ann Arbor DDA in 2009.

In non-land issues, the council will be introduced to newly hired firefighters at its Dec. 2 meeting. The budgeted staffing level for the fire department is 85. However, the statistical section from the city’s most recent comprehensive annual financial report (CAFR) shows 82 AAFD staff in fiscal year 2013. That’s because the council approved the hiring of additional firefighters after the fiscal year began, bringing the total to 85.

The CAFR itself is indirectly included in the council’s agenda – as part of a presentation that will be given by chief financial officer Tom Crawford on the result of this year’s audit. It was a clean audit that showed the general fund doing about $2.4 million better than budgeted.

Among the other myriad statistics in the CAFR are the number of parking violations recorded by the city – which are again down in the range of 90,000, as they’ve been for the last three years. That’s about half what they were in 2006 and 2007. Those numbers in the CAFR don’t include University of Michigan parking tickets – although the city and the UM have an agreement under which the city processes tickets and hears appeals for the university. A renewal of that agreement is on the council’s agenda for Dec. 2.

On Dec. 2 the council also has a fair amount of its own internal business to wrap up, associated with the seating of the new council, which took place on Nov. 18. That includes adoption of the council rules. Based on a less than 10-minute meeting of the council’s rules committee on Nov. 29, no changes to the rules would be put forward at this time. Based on that meeting, it appears that Sally Petersen (Ward 2) will replace Stephen Kunselman (Ward 3) on that council committee. The rest of the new council committee assignments are also supposed to be made at the Dec. 2 meeting.

The council’s calendar of regular meetings and work sessions will also be adopted at the Dec. 2 meeting. The basic pattern is first and third Mondays for regular meetings, except when there’s a holiday or an election during the week of the meeting.

This article includes a more detailed look of many of these agenda items. More details on other meeting agenda items are available on the city’s online Legistar system. Readers can also follow the live meeting proceedings Monday evening on Channel 16, streamed online by Community Television Network.

The Chronicle will be filing live updates from city council chambers during the Dec. 2 meeting, published in this article below the preview material. Click here to skip the preview section and go directly to the live updates. The meeting is scheduled to start at 7 p.m. Updates might begin somewhat sooner.

Crosswalk Law

The council will be asked to give final approval of a repeal of the city’s crosswalk ordinance. The council gave initial approval to the repeal at its Nov. 18, 2013 meeting – on a 9-2 vote.

Current Ann Arbor local law differs in two ways from the state’s Uniform Traffic Code. First, under current local law, motorists in Ann Arbor are supposed to yield the right-of-way to those pedestrians not just “within a crosswalk” but also to those who are “stopped at the curb, curb line or ramp leading to a crosswalk.” Second, when driving toward a crosswalk, motorists in Ann Arbor don’t have the option to yield to a pedestrian by merely slowing down; instead, they’re required to yield by stopping.

Here’s what the current law says (as a result of amendment on Dec. 19, 2011):

10:148. Pedestrians crossing streets

(a) When traffic-control signals are not in place or are not in operation, the driver of a vehicle shall stop before entering a crosswalk and yield the right-of-way to any pedestrian stopped at the curb, curb line or ramp leading to a crosswalk and to every pedestrian within a crosswalk when the pedestrian is on the half of the roadway on which the vehicle is traveling or when the pedestrian is approaching so closely from the opposite half of the roadway as to be in danger.

(b) A pedestrian shall not suddenly leave a curb or other place of safety and walk or run into a path of a vehicle that is so close that it is impossible for the driver to yield.

(c) Every pedestrian crossing a roadway at any point other than within a marked crosswalk or within an unmarked crosswalk at an intersection shall yield the right-of-way to all vehicles upon the roadway. (Corresponds to UTC rule 706)

For more detail on the evolution of the local law, see “Column: Why Did the Turkey Cross the Road?”

A possible compromise the council might consider would leave intact the language about motorists stopping, but still limit the right-of-way to just pedestrians within a crosswalk – that is, it would exclude those standing at the curb.

The compromise could be based on the wording of the ordinance used by Traverse City:

When traffic-control signals are not in place or not in operation, the driver of a vehicle shall stop and yield the right-of-way to every pedestrian within a marked crosswalk.

Representatives of the Washtenaw Bicycling and Walking Coalition, who are advocating against repealing the crosswalk ordinance, contend that Traverse City police enforce “within a crosswalk” by including the curb. When The Chronicle interviewed Traverse City code enforcement officer Lloyd Morris by telephone, he indicated that a pedestrian merely standing at the curb, not in the roadway, would not be considered to be “within a crosswalk.” But he allowed that Traverse City enforces the language to mean that a pedestrian who is not in the roadway but approaching the crosswalk with a clear intent to enter the roadway should be given the right-of-way. But at the council’s Nov. 18 meeting, assistant city attorney Bob West indicated that he didn’t interpret “within a crosswalk” to mean anything except being in the roadway.

At least some of the community debate on the topic has included the question of whether Ann Arbor’s ordinance is unique. On a national level, the ordinance language used in Boulder, Colorado includes more than just those pedestrians within a crosswalk:

A driver shall yield the right of way to every pedestrian on a sidewalk or approaching or within a crosswalk.“

And in Seattle, a similar effect is achieved by defining the crosswalk to extend from the roadway through the curb to the opposite edge of the sidewalk:

‘Crosswalk’ means the portion of the roadway between the intersection area and a prolongation or connection of the farthest sidewalk line or in the event there are no sidewalks then between the intersection area and a line ten feet therefrom, except as modified by a marked crosswalk.

Edwards Brothers Land

A pending sale of the Edwards Brothers property on South State Street to the University of Michigan for $12.8 million was announced in a press release last week. A right of first refusal on the property is held by the city of Ann Arbor as a condition of a tax abatement granted by the city council almost three years ago, on Jan. 18, 2011.

The topic of land acquisition is one of the legal exceptions to the Michigan Open Meetings Act, which requires all deliberations of a public body to be open to the public.

The council’s deliberations on granting the tax abatement nearly three years ago contemplated the possibility that the council could be faced with a decision about whether to act on the right of first refusal, which was associated with the tax abatement. At the time, city assessor David Petrak pegged the value of the land at anywhere between $1 million and $50 million. From The Chronicle’s report of that Jan. 18, 2011 meeting:

The cover memo also indicates that the Edwards Brothers real property is located immediately adjacent to a University of Michigan park-and-ride lot, and it’s felt that UM may have some interest in purchasing the property, which would remove it from the city’s tax rolls. In that light, the city staff built a stipulation into the tax abatement that would give the city the right of first refusal on any future land sale. So if UM offered to purchase the property, the city would have an opportunity to make an offer – presumably with the idea that the city would then sell the land to some other private entity, thereby returning the land to the tax rolls.

City assessor David Petrak briefly introduced some of the background on the request to the council.

Sandi Smith (Ward 1) pressed for some additional explanation. Without additional information, she said, she could not support it. Why was the city considering the application? The answer was that by statute it must be considered.

Stephen Rapundalo (Ward 2) reminded the council that Edwards Brothers has been in Ann Arbor for over 100 years. When the previous abatement was granted, he said, the company was “this close” to moving the operation to North Carolina. Instead, due to the abatement, the company decided to remain in Ann Arbor and preserved around 400 jobs in this community.

With respect to Edwards Brothers not meeting the employment numbers required by the first tax abatement, Rapundalo cited the dire economic times, noting in particular that the book business has not exactly been thriving. So he did not want to hold the job losses against the company. He called Edwards Brothers a long-standing corporate citizen. He also said that if the company left, he would not doubt for a second that UM would pick up the property.

From the city’s CFO, Tom Crawford, Sabra Briere (Ward 1) elicited the fact that the tax abatement would apply to a new press – a typical economic requirement in a very competitive industry, he said. Petrak went on to explain the right of first refusal on the possible sale of the real estate, if Edwards Brothers decided eventually to leave anyway.

City administrator Roger Fraser elaborated in more detail on Crawford’s description of the press to be acquired. It’s particularly suited to quick turnaround on small printing jobs, and offers an opportunity to pick up some additional business for the company. The right of first refusal on the land sale, he said, was an attempt to extract some additional public benefit from the agreement.

Smith pressed for information about what the approximate cost of the land would be, if the city found itself having to contemplate whether to exercise its right of first refusal. Petrak didn’t have that information, but when continued to be pressed by Smith, he allowed that it was between $1 million and $50 million.

Mayor John Hieftje established with Crawford that there’d been no negative impact to the city’s revenues due to job losses at the company. Hieftje said the right of first refusal did not matter to him at all, but the 400 jobs at the company represented good, if not fancy, jobs. They might not earn the average $80,000 salaries that Pfizer workers earned, but they were good jobs. Hieftje also noted that the percentage of property that is abated in the city is minuscule.

…

Tony Derezinski (Ward 2) observed that 415 jobs is a lot of jobs. The fact that there’d been only a 13% drop he characterized as a “great feat.” If it were a new company, he said, they would all be out helping to cut the ribbon.

Carsten Hohnke (Ward 5) expressed his support for the abatement.

As that report from 2011 indicates, the abatement applies to “personal property” that’s used in book production. If that equipment is moved to the Edwards Brothers Jackson Road plant, as part of the company’s effort to consolidate operations, then that equipment would no longer qualify for the tax abatement. That’s because it will have been moved outside of the industrial development district (IDD) where the 2011 abatement was granted.

Bank of Ann Arbor Loan

An agreement to sell the old Y lot on William Street between Fourth and Fifth avenues downtown – to hotelier Dennis Dahlmann for $5.25 million – was approved by the council at its Nov. 18, 2013 meeting. [.pdf of rider] [.pdf of sales agreement]

But it’s possible that not all the due diligence will be completed before Dec. 16, when the city owes the $3.5 million principal it used to purchase the property. As a hedge against that possibility, the council will be asked on Dec. 2 to approve a six-month extension on the installment purchase agreement with Bank of Ann Arbor for the $3.5 million. The interest rate would be the same as the interest rate at which the city is currently borrowing the money – 3.89% with no penalty for pre-payment.

If additional interest is owed due to the extension of the loan, presumably the Ann Arbor Downtown Development Authority would also continue with its share of the payments. That was an arrangement agreed to in 2003 through action by the DDA’s executive committee, not the full DDA board. The DDA’s portion of the interest payments could factor into the calculation of the net proceeds from the former Y lot sale. A year ago at the council’s Oct. 15, 2012 meeting, the council adopted a resolution that indicated the proceeds of the sale would:

“… 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 …

However, two days after the council meets on Dec. 2, the board of the Ann Arbor DDA will be considering a resolution that would waive any need to repay the DDA for those interest payments or for the expenditures by the DDA to demolish the old Y building in 2008. [.pdf of Dec. 4, 2013 draft DDA resolution on Y lot proceeds]

Possibly relevant to the question of whether the DDA can simply waive any required repayment by the city to the DDA is the source of funds used by the DDA to make those payments. In recent years, the DDA has used parking funds to make the interest payments. To the extent that in earlier years, funds captured under the DDA’s tax increment finance (TIF) may have been used to make interest payments, it’s not clear if the DDA could simply allow the city to retain those funds as part of the proceeds of the Y lot sale.

Traverwood Apartments

On the council’s Dec. 2 agenda is a project proposed by First Martin Corp. that would construct a complex of 16 two-story buildings on the west side of Traverwood Drive, north of Plymouth Road. The development is called Traverwood Apartments.

Aerial view of proposed Traverwood Apartments at 2225 Traverwood Drive, north of Plymouth Road.

Only the initial vote on the zoning is being considered on Dec. 2. The final vote on the zoning and the site plan will appear on a future council agenda.

The project, estimated to cost $30 million, would include 16 two-story buildings for a total of 216 one- and two-bedroom units – or 280 total bedrooms. Eight of the buildings would each have 15 units and 11 single-car garages. An additional eight buildings would each have 12 units and 8 single-car garages.

The city’s planning commission recommended approval of the site plan and the required rezoning at its Nov. 6, 2013 meeting. The site is made up of two parcels: a nearly 16-acre lot that’s zoned R4D (multi-family residential), and an adjacent 3.88-acre lot to the south that’s currently zoned ORL (office, research and light industrial). It’s the smaller lot that needs to be rezoned R4D.

Land to be donated by Bill Martin to the city of Ann Arbor indicated in red outline.

The Dec. 2 agenda includes the council’s consideration of a donation of 2.2 acres to the city from Bill Martin just north of the project site. The donated acreage is next to the Stapp Nature Area and the Leslie Park golf course.

Running Fit Addition

At its Dec. 2 meeting, the council will be asked to approve the site plan for a three-story addition to the Running Fit store at the northwest corner of Fourth Avenue and Liberty Street in downtown Ann Arbor.

Aerial view of the Running Fit building, at the northwest corner of East Liberty and South Fourth.

The first floor will be retained as retail space, but six residential units would be built on the upper three floors – one two-bedroom and five one-bedroom units.

The city planning commission recommended approval of the site plan at its Oct. 15, 2013 meeting.

The location in Ward 1 is zoned D1, which allows for the highest density development in the city. It’s also located in the Main Street Historic District.

The city’s historic district commission issued a certificate of appropriateness on Aug. 15, 2013.

The project is expected to cost about $900,000.

Cost of In-Street Parking Spaces

The city council will also be asked to place a value on portions of the public right-of-way currently used as on-street parking spaces – $45,000 per space. By formally adopting that figure, any future development that causes the removal of on-street parking spaces could be charged that amount.

In this matter, the council would be acting on a four-year-old recommendation approved by the Ann Arbor Downtown Development Authority in 2009:

Thus it is recommended that when developments lead to the removal of on-street parking meter spaces, a cost of $45,000/parking meter space (with annual CPI increases) be assessed and provided to the DDA to set aside in a special fund that will be used to construct future parking spaces or other means to meet the goals above. [.pdf of meeting minutes with complete text of March 4, 2009 DDA resolution]

The contract under which the DDA manages the public parking system for the city was revised to restructure the financial arrangement, which now pays the city 17% of the gross parking revenues. But it also included a clause meant to prompt the city to act on the on-street space cost recommendation. From the May 2011 parking agreement:

The City shall work collaboratively with the DDA to develop and present for adoption by City Council a City policy regarding the permanent removal of on-street metered parking spaces. The purpose of this policy will be to identify whether a community benefit to the elimination of one or more metered parking spaces specific area(s) of the City exists, and the basis for such a determination. If no community benefit can be identified, it is understood and agreed by the parties that a replacement cost allocation methodology will need to be adopted concurrent with the approval of the City policy; which shall be used to make improvements to the public parking or transportation system.

Subject to administrative approval by the city, it’s the DDA that has sole authority to determine the addition or removal of meters, loading zones, or other curbside parking uses.

It’s not clear what the specific impetus is to act on the issue now, other than the fact that action is simply long overdue. In 2011, the University of Michigan’s Institute for Social Research expansion was expected to result in the net removal of one on-street parking space. [For more background, see: "Column: Ann Arbor's Monroe (Street) Doctrine."]

The $45,000 proposed amount is based on an average of the estimated construction cost for an above-ground space of $40,000, and $55,000 for a below-ground parking space, as estimated in 2009. By way of background the Ann Arbor DDA’s most recent financial records show that last year, on-street parking spaces generated $2,000 in gross revenue per space or $1,347 in net income per space annually. The contract with the city under which the DDA operates the public parking system stipulates that the city receives 17% of the gross parking revenues. So the city’s revenue associated with an on-street parking space corresponds to $340 per space annually.

The resolution on the council’s Dec. 2 agenda is sponsored by Christopher Taylor (Ward 3). Taylor participated in recent meetings of a joint council and DDA board committee that negotiated a resolution to the question about how the DDA’s TIF revenue is regulated. In that context, Taylor had argued adamantly that any cap on the DDA’s TIF should be escalated by a construction industry CPI, or roughly 5%. Taylor’s reasoning was that the DDA’s mission is to undertake capital projects and therefore should have revenue that escalates in accordance with increases in the costs to undertake capital projects. Based on that reasoning, and the explicit 2009 recommendation by the DDA to increase the estimated $45,000 figure in that year by an inflationary index, the recommended amount now, four years later, could be closer to $55,000, assuming a 5% figure for construction cost inflation.

The actual cost of building an underground space in the recently completed (2012) underground Library Lane parking structure could provide a more current estimate, but the DDA has not made public a breakdown of how that project’s actual costs lined up with its project budget.

The last two month’s minutes from the DDA’s committee meetings don’t reflect any discussion of the on-street parking space replacement cost. Nor has the issue been discussed at any recent DDA board meeting.

Audit, Firefighters, Other Stats

In non-land issues, the council will be introduced to newly hired firefighters at its Dec. 2 meeting.

The statistical section from the city’s most recent comprehensive annual financial report (CAFR) shows a budgeted staffing level for the fire department of 82, in fiscal year 2013. But the council approved the hiring of additional firefighters after the fiscal year began, bringing the total to 85.

The CAFR is indirectly included in the council’s agenda – as part of a presentation that will be given by chief financial officer Tom Crawford on the result of this year’s audit. It was a clean audit that showed the general fund doing about $2.4 million better than budgeted.

Highlights from that FY 2013 audit report, which has now been issued in final form to the city, include an increase to the general fund balance from about $15.4 million to about $16.2 million. The $800,000 increase contrasts to the planned use of roughly $1.6 million from the general fund balance in the FY 2013 budget. About $200,000 of the increase was in the “unassigned” fund balance.

The result of the audit, in the new GASB terminology, was an “unmodified” opinion – which corresponds to the older “unqualified” opinion. In sum, that means it was a “clean” audit. The concerns identified last year had been addressed to the auditor’s satisfaction.

Members of the council’s audit committee met on Oct. 24. 2013 to review the draft audit report, and were enthusiastic about the $2.4 million better-than-budget performance for the city’s general fund, which had expenditures budgeted for $74,548,522 in FY 2013.

Challenges facing the city this coming year include the implementation of the new GASB 68 accounting standard starting in FY 2015, which begins July 1, 2014. That standard requires that most changes to the net pension liability will be included immediately on the balance sheet – instead of being amortized over a long time period. The GASB 68 standard must be implemented for an organization’s financial statements for fiscal years beginning after June 15, 2014.

Two of the city’s funds were highlighted by Crawford at the Oct. 24 meeting as having potential difficulties associated with the GASB 68 standard – solid waste and the public market (farmers market). For the public market fund, Crawford floated the idea to the audit committee that it could be folded back into the city’s general fund, on analogy with the golf fund. Starting this year (FY 2014), the golf fund has been returned to general fund accounting.

Among the other myriad statistics in the CAFR are the number of parking violations recorded by the city – which are again down in the range of 90,000 as they’ve been for the last three years. That’s about half what they were in 2006 and 2007. Those numbers in the CAFR don’t include University of Michigan parking tickets – although the city and the UM have an agreement under which the city processes tickets and hears appeals for the university. A renewal of that agreement is on the council’s agenda for Dec. 2.

Here’s a sampling of the kind of data available in the statistical section of the FY 2013 CAFR, which includes data from previous CAFRs as well. [.pdf of final audit report released on Nov. 15, 2013]

Ann Arbor parking violations. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor traffic violations. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor physical arrests. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor police services data. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor fires extinguished. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor fire inspections. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor emergency responses by fire department. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor fire services data. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor police department staff strength. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor total city employees. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor water main breaks. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor taxable value. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Internal Council Business

On its Dec. 2 meeting agenda, the council also has a fair amount of its own internal business to wrap up, associated with the seating of the new council, which took place on Nov. 18.

That internal business includes adopting the council rules. Based on a less than 10-minute meeting of the council’s rules committee on Nov. 29, no changes to the rules were planned to be put forward at this time. The council’s rules committee – established by last year’s council – currently consists of Sabra Briere (Ward 1), Stephen Kunselman (Ward 3), Christopher Taylor (Ward 3) and mayor John Hieftje.

However, the .pdf file attached to the council’s online agenda – which reflects the council’s rules to be considered for adoption – includes a revision that was explicitly discussed and, for the time being, rejected at the committee’s Nov. 29 meeting. [.pdf of city council rules]

That change replaces “personality” (an archaic usage meaning a disparaging remark about a person) with “personal attack” in the following rule: “The member shall confine comments to the question at hand and avoid personality.” At the council’s Nov. 18 regular meeting, when the council voted to delay adoption of the rules pending a review by the rules committee, Chuck Warpehoski (Ward 5) had asked that the rules committee look at the rule requiring that councilmembers “avoid personality” during deliberations.

At the Nov. 29 committee meeting, Kunselman weighed in specifically for retaining the more archaic wording as reflective of history and tradition. The outcome of that committee discussion was that no changes would be recommended at this time, as any changes should be reviewed by the rules committee with its new membership. But based on the inclusion of the change in the Legistar document, it’s not clear what the status of that proposed change is meant to be.

A consensus on the committee at the Nov. 29 meeting seemed to be that the new membership of the rules committee should include Sally Petersen (Ward 2) in place of Kunselman, as Kunselman did not wish to continue on the rules committee. In addition, Petersen’s ethics initiative, which was approved at the council’s Nov. 18, 2013 meeting, tasks the rules committee with a certain amount of work – so the rules committee consensus on Nov. 29 appeared to be that the committee would be well-served by her membership.

The rest of the new council committee assignments are also supposed to be made at the Dec. 2 meeting.

The council’s calendar of regular meetings and work sessions will also be adopted on Dec. 2. The basic pattern is first and third Mondays for regular meetings, except when there’s a holiday or an election during the week of the meeting.

5:48 p.m. Washtenaw Bicycling and Walking Coalition board chair Erica Briggs has forwarded to the city council three documents – including a letter of support, and names of more than 600 people who’ve signed an online petition supporting the existing crosswalk ordinance. [.pdf of comments from supporters] [.pdf of WBWC letter to mayor and council] [.pdf of names of 668 people supporting existing crosswalk law]

6:35 p.m. Pre-meeting activity. The scheduled meeting start is 7 p.m. Most evenings the actual starting time is between 7:10 p.m. and 7:15 p.m.

6:38 p.m. Here in council chambers, the partitions are already pulled back in anticipation of a large crowd on the crosswalk ordinance. Folding chairs are set up to provide additional seating. Carolyn Grawi of the Center for Independent Living is here. Three members of the city’s commission on disability issues attended yesterday’s council caucus: Larry Keeler, Lloyd Shelton, Linda Evans.

6:49 p.m. Erica Briggs has arrived, as has Lloyd Shelton. Jack Eaton (Ward 4) is the first councilmember to arrive. City administrator Steve Powers is now here. Assistant city attorneys Mary Fales and Abigail Elias are also in council chambers.

6:49 p.m. Firefighters to be introduced have also now arrived.

6:52 p.m. Sally Petersen (Ward 2) has now arrived. Chambers are beginning to fill up.

6:55 p.m. Sumi Kailasapathy (Ward 1) and Chuck Warpehoski (Ward 5) are now here.

7:07 p.m. Chambers are now packed. We’re shoulder-to-shoulder. Much of the supplementary seating is now occupied. It will still be standing-room-only despite the additional seats.

7:12 p.m. Professor Jonathan Levine is here, as are several others who could be counted as public transportation and non-motorized advocates.

7:12 p.m. We appear to be nearly ready to begin.

7:14 p.m. And we’re off.

7:15 p.m. Call to order, moment of silence, pledge of allegiance, roll call of council. All except for Margie Teall (Ward 4) are present.

7:15 p.m. Teall’s absence might affect the council’s ability to achieve a political compromise on the crosswalk ordinance.

7:15 p.m. Approval of agenda.

7:17 p.m. Christopher Taylor (Ward 3) wants to swap the order of public hearings so that the crosswalk ordinance has its public hearing after the others. Sabra Briere (Ward 1) wants to move C1 before B1. That’s Traverwood Apartments rezoning before the crosswalk ordinance.

7:17 p.m. Outcome: The council has voted to approve the agenda as amended.

7:18 p.m. INT-1: Introduction of new firefighters. The current authorized staffing level for the AAFD is 85. After the FY 2013 was approved last year authorizing staffing at 82, the council approved a subsequent increase to 85, based on the receipt of some grant funding.

7:20 p.m. Assistant fire chief Ellen Taylor is introducing the new firefighters. She’s describing the one-year probationary period. She’s introducing five of the seven new firefighters in the city. They get a round of applause.

7:20 p.m. INT-2: FY 2013 audit results. The 2013 fiscal year ended June 30, 2013. The council’s audit committee reviewed the draft report on Oct. 24, 2013. It was a clean audit that showed the general fund doing about $2.4 million better than budgeted. Highlights from that FY 2013 audit report, which has now been issued in final form to the city, include an increase to the general fund balance from about $15.4 million to about $16.2 million. The $800,000 increase contrasts to the planned use of roughly $1.6 million from the general fund balance in the FY 2013 budget. About $200,000 of the increase was in the “unassigned” fund balance.

The result of the audit, in the new GASB terminology, was an “unmodified” opinion – which corresponds to the older “unqualified” opinion. In sum, that means it was a “clean” audit. The concerns identified last year had been addressed to the auditor’s satisfaction. Challenges facing the city this coming year include the implementation of the new GASB 68 accounting standard starting in FY 2015, which begins July 1, 2014. That standard requires that most changes to the net pension liability will be included immediately on the balance sheet – instead of being amortized over a long time period.

7:26 p.m. Tom Crawford leads with some light humor: “I’m sure the crowd has come to hear this report.” He gets the intended laugh. Now he’s into a discussion of net assets of the city – over a billion dollars. But that’s mostly buildings and roads, not much of which can be used to pay for things, he notes. There’s $82 million that’s actually available. The general fund has a balance of about $14 million. Street repair millage had $18 million in it. Minimum balance for that fund is $9 million. Crawford explains that the apparent excess is partly due to timing of when road repair takes place. He’s talking about the potential liabilities of various funds. He highlights the public market fund – which has an adequate fund balance, but is actually weak in the context of GASB 68 requirements.

7:27 p.m. The pension system is 80% funded. VEBA is 39% funded. Their return achieved 11% last year, Crawford reports. He characterizes the general fund last year as doing about $2.4 million better than budgeted. It was a good year for the general fund, he says.

7:27 p.m. INT-3: Volunteer appreciation. Phillip Delekta is being honored with a mayoral proclamation for his volunteer work with the Ann Arbor police department.

7:29 p.m. Delekta is now explaining his work with the citizens emergency response team. He’s thanking the police and fire department personnel who’ve helped. Football games, the Ann Arbor marathon and the art fairs are some events they help with. He gets a round of applause.

7:29 p.m. Public commentary reserved time. This portion of the meeting offers 10 three-minute slots that can be reserved in advance. Preference is given to speakers who want to address the council on an agenda item. [Public commentary general time, with no sign-up required in advance, is offered at the end of the meeting.]

Tonight’s lineup for reserved time speaking includes just two speakers: Thomas Partridge and Henry Herskovitz. Partridge is speaking on ending discrimination. Herskovitz will be talking about the council’s 2014 meeting calendar, which will be set tonight.

7:33 p.m. Thomas Partridge is now addressing the council. He’s using the hand-held microphone. It doesn’t seem to be working. He says he’s an advocate for all residents of the city, county and state who need advocacy due to various challenges. Sound of kids in the audience makes this tough to hear. He calls for an end to discrimination. He contends that red-lining is practiced in Ann Arbor – with respect to housing and transportation. He says the council needs to be reformed. The council should see the world through the eyes of the most unfortunate among us, he says.

7:37 p.m. Henry Herskovitz says he’s speaking about the establishment of the council’s 2014 calendar. He wants the council reconsider a decision made 10 years ago to give preference to those commenters who want to talk about items on the agenda. That was based on a desire to prevent people from talking about Palestine and Israel, he says. He’d not been able to talk to the council at its previous meeting about “blacklisting of companies by MasterCard” – because it wasn’t an agenda item.

7:37 p.m. Communications from council. This is the first of three slots on the agenda for council communications. It’s a time when councilmembers can report out from boards, commissions and task forces on which they serve. They can also alert their colleagues to proposals they might be bringing forward in the near future.

7:39 p.m. Stephen Kunselman (Ward 3) leads off by announcing he’ll be putting forward a compromise amendment on the crosswalk ordinance. “That will be my first order of business,” he says. “We will not be repealing the pedestrian ordinance,” he says. Sabra Briere (Ward 1) says that Kunselman means that he hopes a repeal will not happen. Added late to the agenda, she notes, are the city council committee appointments, including resolutions on the environmental commission and greenbelt commission.

7:41 p.m. Christopher Taylor (Ward 3) is speaking about the crosswalk ordinance. Kunselman’s compromise would strip out language that requires motorists to stop for pedestrians at the curb or curbline, Taylor stresses. Mayor John Hieftje is clarifying that the compromise would still not require motorists to stop for motorists at the curb. Kunselman reads aloud the language.

7:43 p.m. Taylor quips “with summer just around the corner” that a resolution will be brought forward in the near future (not at this meeting) about the art fairs. The council provides financial support for the Ann Arbor Summer Festival, and Taylor is indicating that the art fairs should also be supported.

7:44 p.m. Mike Anglin (Ward 5) thanks several people who are present: Matt Grocoff, Chris Hewett and Erica Briggs. A meeting will take place on Dec. 11 at Bach School at 6:30 p.m. on pedestrian safety and traffic calming. Screaming children in the audience.

7:45 p.m. Briere is calling the public’s attention to a meeting to be held on Dec. 4 at 6:30 p.m. on a presentation of results of the Allen Creek berm opening feasibility study.

7:47 p.m. CC-1 Appointment of 2014 city council committees. [.pdf of committee assignments]

7:47 p.m. Chuck Warpehoski (Ward 5) ventures that nobody wants to spend time with him on the University of Michigan student relations committee.

7:48 p.m. Hieftje says that Jack Eaton (Ward 4) was going to be asked to serve. Eaton asks when it meets. Hieftje explains that it’s not regular. Eaton accepts the assignment.

7:48 p.m. Outcome: The council has voted to confirm all the committee assignments.

7:50 p.m. Local Development Finance Authority (LDFA) appointment. Sally Petersen (Ward 2) to LDFA.

Outcome: The council has voted to appoint Petersen to the LDFA.

7:51 p.m. Planning commission, greenbelt advisory commission. Briere is returned to the planning commission and Taylor to the greenbelt advisory commission by a unanimous vote.

7:52 p.m. Environmental commission. Anglin and Briere are appointed to the environmental commission.

7:52 p.m. Commission on disabilities. The council has established a position for a councilmember and appointed Petersen to that spot.

7:52 p.m. CC-2 Approval of 2014 city council rules. Internal business tonight includes adopting the council rules. Based on a less than 10-minute meeting of the council’s rules committee on Nov. 29, no changes to the rules were planned to be put forward at this time. The council’s rules committee – established by last year’s council – currently consists of Sabra Briere (Ward 1), Stephen Kunselman (Ward 3), Christopher Taylor (Ward 3) and mayor John Hieftje. However, the .pdf file attached to the council’s online agenda – which reflects the council’s rules to be considered for adoption – includes a revision that was explicitly discussed and, for the time being, rejected at the committee’s Nov. 29 meeting. [.pdf of city council rules] That change replaces “personality” (an archaic usage meaning a disparaging remark about a person) with “personal attack” in the following rule: “The member shall confine comments to the question at hand and avoid personality.”

At the council’s Nov. 18 regular meeting, when the council voted to delay adoption of the rules pending a review of the rules, Chuck Warpehoski (Ward 5) had asked that the rules committee look at the rule requiring that councilmembers “avoid personality” during deliberations. [For additional background see Internal Council Business above.]

7:52 p.m. Outcome: The council has voted to adopt its rules for the year.

7:53 p.m. Communications from the mayor. Mayoral communications fall typically into two categories: (1) nominations to boards and commissions that will be voted on at a subsequent meeting; and (2) requests for confirmation of nominations that have been made at a previous meeting.

7:53 p.m. MC-1 Appointments. The council is being asked to confirm the nomination of David Blanchard, put forward at the council’s Nov. 18 meeting, to the housing and human services advisory board.

7:53 p.m. Outcome: The council has voted to confirm David Blanchard’s appointment to the housing and human services board. It runs through June 4, 2016.

7:53 p.m. MC-2 Nomination. Elizabeth Bletcher is being nominated to replace Al Gallup on the Elizabeth Dean Fund committee. For some historical background on the Elizabeth Dean Fund, see “Dean Tree Fund Committee Changed.” That nomination will be voted on at a future meeting.

7:53 p.m. Public hearings. All the public hearings are grouped together during this section of the meeting. Action on the related items comes later in the meeting. Tonight three public hearings appear on the agenda. The first is on the repeal of the crosswalk law. The second is on establishing an industrial development district (to facilitate granting a tax abatement) at 1901 E. Ellsworth. The third is on a site plan to build a three-story addition to Running Fit at the corner of Liberty Street and Fourth Avenue downtown. The order of the hearings was changed at the beginning of the meeting, so that the crosswalk law public hearing will come last.

7:56 p.m. PH-2 Establish Industrial Development District at 1901 E. Ellsworth. Luke Bonner, vice president of business development for Ann Arbor SPARK, is addressing the council. The petition was initiated by the property owner, he says. The establishment of a district will allow a tenant there, Mahindra Genze, to then apply for a tax abatement.

7:58 p.m. Alan Clark is addressing the council as a Ward 3 resident working at a start-up, called Mahindra Genze. It was started in the basement of the chief engineer. The location at Phoenix Drive has “max-ed out,” he says. Another new hire came in today, Clark says, and there’s around 25 employees there. Clark moved to Ann Arbor from Washington D.C. to become the seventh employee. He’s describing the product: an electric scooter. They’ll sell the product nationally, he says. There’s international interest in the product as well.

7:59 p.m. Clark says the company is looking to hire another 34 employees and wants to start production early next summer.

8:01 p.m. Thomas Partridge is now addressing the council. He says he’s usually conservative with respect to such requests. But he’s endorsing this request. He calls for the establishment of a larger district, he says, which was the point of the state’s enabling legislation.

8:02 p.m. Here are the names of the firefighters who were introduced earlier: Brian Schotthoefer; George Allard; Nicholas Kaczor; Christopher McGlothin; John Crowell; Ryan Newkirk; and Christopher Brown.

8:03 p.m. That’s all for this public hearing.

8:04 p.m. PH-3 Running Fit addition site plan. Architect Brad Moore is addressing the council. The expansion will add more stories for residential units. He notes that there were previously more stories before it burned back in the 1950s. He notes that the city’s historic district commission gave it a unanimous approval, as did the planning commission.

8:05 p.m. Thomas Partridge contends that there’s been a history of discrimination involved in zoning and site plan approvals. The site plan should be re-examined with respect to accessibility issues, he contends. Affordable housing is needed, he says.

8:07 p.m. That’s all for this public hearing.

8:07 p.m. PH-1 Crosswalk ordinance change. Hieftje asks people to line up and be ready to speak.

8:08 p.m. Hieftje advises that it’s not required to use the whole three minutes, but people can do so. Erica Briggs, chair of the Washtenaw Bicycling and Walking Coalition, leads off.

8:11 p.m. Briggs urges the council not to repeal the ordinance. She says that the Kunselman compromise really does amount to a repeal. She’s ticking through familiar points. She’s citing pedestrian crashes so far this year – 36, and  she contends that this reflects a 16% decrease since the ordinance was passed. She cites the community-wide support for the ordinance. She invites people to stand who are against the repeal. The vast majority of people here are standing.

8:15 p.m. James Briggs addresses the council from his wheelchair. City clerk Jackie Beaudry then reads aloud his statement on his behalf. “It boils my blood,” says the statement, to see the ordinance repealed. He calls the approach that some councilmembers are taking one that asks people to “check your brains at the door.”

8:15 p.m. Katie Brion tells the council that she walks to school with her kids crossing Madison to get to Bach Elementary School. After the ordinance passed, she’s seen a huge improvement, she says. Enforcement should be the focus, she says.

8:18 p.m. Judy Stone speaks in favor of retaining the ordinance. She’s relating her experience almost hitting someone. She’s paid more attention to pedestrian crossings, since the installation of flashing lights, she says. The response to say “get rid of this system” goes in the wrong direction. It’s her own responsibility to modify her behavior, she says. Elderly people or people with children in tow shouldn’t have to put themselves in harm’s way, she says. Stone calls for a strong and ongoing educational campaign. “We need to keep at it,” she says. It would be shortsighted to repeal the ordinance, she says.

8:20 p.m. Matt Grocoff introduces himself as a resident of Seventh Street. He relates his experience taking his daughter back home and attempting to cross the street. The traffic was heavy and fast. He waited at the crosswalk with his daughter in his arms. Cars didn’t stop. Then an Ann Arbor Public Schools bus went through the crosswalk as he was already standing there with his child in his arms, he reports. He’s posted a video of the encounter on Safety on Seventh. He calls for a sober, thoughtful process.

8:24 p.m. Cory Snavely supports the ordinance as it stands. The point of contention, he says, is which pedestrians have the right-of-way, so Kunselman’s compromise doesn’t really do anything for that. He applauds the installation of the HAWK signal and pedestrian islands. He noticed a difference, he says, when the ordinance was passed. The only safe street to step into is one with no cars or cars that are stopped, he says.

8:26 p.m. Charles recalls spending a year in the hospital after being struck by a car. “When a car hits you, it wins, no question,” he says. He was proud that the ordinance had been passed and calls it a demonstration that Ann Arbor is a progressive town. He talks about how M.A.D.D. had changed culture with respect to drunk driving. And he calls for a similar cultural change for pedestrian safety.

8:28 p.m. Lloyd Shelton leads off by saying that the setup for addressing the council is not accessible. He’s astounded and disappointed that the city council would leave him out of the equation. “To put the onus on me is wrong. I would wag my finger at you if I could,” he says. Kunselman’s amendment is “exclusionary,” he says.

8:31 p.m. Annie Wolock tells the council she’s lived in Ann Arbor for 35 years. She wonders if repealing or changing the law is the right way to approach citizen safety. She calls for more law enforcement and education. Changing the law now will lead to more confusion, she says. “We need to stay the course,” she says and reevaluate after 10 years. She calls for tabling the issue.

8:34 p.m. Marissa Arnold has been a bus driver at UM for 15 years. She’s noticed a shift in culture for pedestrians. On a daily basis, pedestrians don’t do what their mothers taught them, she says – they just go out into the street. She says that pedestrians think that because they have an ordinance to back them up, they can just walk across the street without checking traffic. She calls for balance. She calls for more education. “Everyone has somewhere they need to go and be,” she says. So she supports the amendment of the ordinance as Kunselman is proposing. It’s too difficult to assess the intent of someone standing at the curb, she says.

8:37 p.m. Jeff Hayner urges the council to increase education, engineering and enforcement of the current ordinance. Failing that, he’s in favor of repealing it. He’s spoken to thousands of people, he says. [He ran for Ward 1 city council earlier this year.] He heard from a lot of people who wanted to see the crosswalk ordinance repealed. But he’s not sure that’s the right thing to do. He says that the lack of engineering leads to people not knowing what to do – giving the example of three crosswalks in succession that are marked in different ways. He calls education of pedestrians and their responsibilities an important priority.

8:39 p.m. Another UM blue bus operator [Kwajalynn Burks] is addressing the council. She wants more HAWK signals. Other drivers are always trying to beat her somewhere, she says. Pedestrians feel entitled, she says, which could lead to a fatality. At some intersections near campus, there’s no end to the pedestrian flow, she says. The “pedestrian rules” type of marketing has pushed pedestrians to adopt that mindset, she says.

8:42 p.m. Helen Aminoff says she’s lived here since 1960. The push to repeal the crosswalk law was prompted by the tragedy of a death in a Plymouth Road crosswalk, she says. That incident was not a result of the crosswalk ordinance, she points out. The driver had passed a car that had been stopped at the crosswalk and struck the pedestrian, she says. There’s room for improvement and tweaking, she allows, but she doesn’t want to throw the baby out with the bathwater.

8:44 p.m. Ted Reynolds relates an experience from 10 years ago. He was in the middle of a crosswalk when he saw a car come through a red light. He dodged the car, but fell and struck his head on the pavement. His brain had lost the connection to his right foot. He has not driven since then. He says he didn’t want to become an old geezer who rams into people in a crosswalk. He’s against anything that makes it easier for drivers to go through crosswalks and strike pedestrians.

8:45 p.m. Emma Wendt is advocating for the current crosswalk ordinance. She says she wants more of her peers to move to Ann Arbor. It’s a walkable, liveable, progressive city, she says. But her friends on the coast find it odd that she likes living in the Midwest. When they hear that Ann Arbor is planning to repeal the crosswalk ordinance, they’re aghast, she says.

8:47 p.m. Chris reports that he was hit in 1980 by a car. He was on the sidewalk on a ramp and the person turned left. A good buddy of his, a “little person” in a wheelchair, was crossing Stone School, he says, and was killed. An apparatus needs to be set up to make cars slow down, he says.

8:48 p.m. The gentleman now addressing the council supports the current ordinance. Before he moved to Ann Arbor, he says, he was director of disability resources for a university in Illinois. Each of you will have a disability if you don’t die first, he tells the council.

8:51 p.m. John Weir is a Ward 4 resident. He walks where he goes – by choice. It matters a lot to him to live in a place where he feels safe and doesn’t need to own a car. That matters to a lot of his peers, he says. The other towns and cities of Michigan are not the only places that compete with Ann Arbor. The norm for Boston, where he’s from, he says, is better education and enforcement than Ann Arbor. “We can do better,” he says.

8:53 p.m. Don Whitaker has lived in Ann Arbor for 28 years and he supports the current ordinance. He’s an automotive engineer and commutes to Detroit every day. He was proud of the council when the council passed the ordinance originally, calling it a progressive move. Walkable cities are good for property values, he says. The main reason we should have the ordinance is safety, but a vision of a better community for everybody is also important. We need to work on education of pedestrians and motorists alike, he says.

8:56 p.m. Carolyn Grawi, of the Center for Independent Living, speaks in favor of keeping the current ordinance. She says there’s a lot of work to be done on engineering and education. She points out that in 1978, the law changed so that you’re supposed to stop for people with white canes. Before the ordinance, it took 35 minutes for someone with a white cane to cross, she says, which is not acceptable. She agreed with the UM bus drivers that pedestrians also need education.

8:58 p.m. Steven Kronenberg cautions against the idea that it should be an issue of motorists versus pedestrians. He points out the link between the amount of traffic on the roads and the number of parents who drive their children to school. He urges the council to preserve the ordinance.

9:02 p.m. Tricia Jones introduces herself as a Ward 5 resident. She feels for the UM bus drivers who spoke, but says that students have behaved that way forever. The recent data at non-signalized intersections, she says, show that incidents have decreased from 34 to 11 – but she allows that it’s just for 10 months of the year. She urges the council to preserve the ordinance.

9:03 p.m. Andrew Peters is a student at UM law school. He and his wife chose Ann Arbor over Boulder and Manhattan. They didn’t know about the crosswalk ordinance before they moved here. But when they visited they noticed that people were able to walk around the city. He was concerned that before something is changed – about something that makes Ann Arbor what it is – more thought should be given to it.

9:05 p.m. Julie Grand says that she visited some personal websites of councilmembers. She’s quoting their own sentiments at them to argue for waiting for a recommendation from the pedestrian safety task force.

9:08 p.m. Jonathan Levine said he’s relieved that Kunselman is bringing forward an amendment that would still require motorists to stop. A number of states are updating their laws from “yield” laws to “stop” laws, he says. If Ann Arbor is going to be different from the rest of Michigan, it’s important to think about how it should be different. He argues from the point of view of how to treat the negligent pedestrian versus the patient pedestrian. A law requiring motorists to stop for pedestrians standing at the curb rewards patient pedestrianism, he says.

9:11 p.m. Ken Clark notes that Michigan actually doesn’t have a law on crosswalks. He reviewed all the 2012 pedestrian crashes. 77% of the crashes last year were assessed by the police as the fault of drivers, he says.

9:14 p.m. Jeff Gaynor, a teacher at Clague Middle School who’s on the school’s Safe Routes to School committee, explains how the group had applied for a grant. Three of the engineered crosswalks had been installed on Green Road with that money, he says. In his 35 years of teaching, he’d taken his students on hundreds of field trips and taught them how to cross the street. There has been an increase in the number of cars that stop, he says, but the behavior is not yet universal.

9:15 p.m. Gaynor says that he can’t tell his students to step off the curb and hope that cars will stop.

9:17 p.m. Mike Miller says he logs 30-35 miles a week walking different routes. He thinks that the ordinance has made things better. He thinks Kunselman’s amendment is a step backwards. He calls for more engineering and education. He thinks that stoplights might be put in on certain streets. Through enforcement we could get a more effective law, he says.

9:19 p.m. Julia Roberts is speaking as a resident (she’s an AAATA transit planner). She’s lived in Ann Arbor for eight years – having moved here from Chicago. She’s proud of the ordinance that was passed. The crosswalk law isn’t responsible for reckless driving or walking. She asks for the council to wait for a recommendation by the pedestrian safety task force.

9:20 p.m. Tony Pinnell, a translator for European companies, advises the council that repealing the ordinance would send a bad message – and would be bad business.

9:21 p.m. Chip Smith says he lives in Ann Arbor to give his daughter a chance to walk to school. In the 18 years he’s lived here, the city has made progress but it’s still not a walkable city. He calls for the council to wait until the pedestrian safety task force can make a recommendation.

9:23 p.m. Mary Benson describes the situation as “Russian Roulette.” She thinks the issue isn’t addressed in either version of the ordinance. “I think we need more red lights,” she says. That’s universally understood. People don’t know what the flashing beacons mean. “We can educate until hell freezes over,” she says. There will still be 10,000 new drivers every year, she says. She also calls for enforcement of jaywalking laws.

9:24 p.m. Larry Deck says that he doesn’t see how Kunselman’s amendment gets to the heart of the matter. He encourages the council to wait for the recommendation of the pedestrian safety task force. He calls for a culture of mutual respect.

9:26 p.m. Ed Vielmetti says he started looking at maps of pedestrian crashes. Many of them happen near UM campus and downtown. There are two problems. One is main arteries along big long stretches. The other problem is downtown pedestrian safety, where cars are turning. He cites State Street as a particularly difficult area.

9:30 p.m. Kathy Griswold says that almost 10 years ago she spoke to the council and asked why Ann Arbor couldn’t be more like some other cities. But Ann Arbor doesn’t want to do the work, she said, to enforce existing ordinances. She contends that the crosswalk ordinance was borne out of a desire to help Ann Arbor win awards. Ann Arbor’s crosswalk ordinance isn’t consistent with AAPS school safety rules, she says, or with the state’s UTC. She contends that a professional engineer hasn’t been heard from. She asks if the city wants to work hard or just have an ordinance.

9:31 p.m. Robert Gordon addresses the council as a Ward 3 resident. He says this is a “rush” to repeal. He calls for waiting for the pedestrian safety task force to make its recommendation.

9:34 p.m. Thomas Partridge recounts his various candidacies for public office. He calls for using scientific data and for enacting ordinances to make a better community. Councilmembers come to meetings having made decisions before the meetings, no matter how many people come to the podium to make reasoned, logical arguments, he contends. He’d attended his first caucus meeting yesterday, when they had spoken in emotionally committed ways to the repeal. He calls the language of the ordinance “muddled.” He tells councilmembers to put themselves in a wheelchair and then try to cross Huron Street.

9:36 p.m. Karen Moorhead asks the council to move carefully and slowly. She hopes that the council might reconsider how much the ordinance means. Think about enforcement, engineering, and education, she says.

9:37 p.m. Recess. The public hearing on the crosswalk ordinance is done. We’re now in recess.

9:49 p.m. And we’re back.

9:50 p.m. Approval of minutes from previous meeting.

9:51 p.m. Outcome: The council has voted to approve the minutes of the previous meeting.

9:51 p.m. Consent agenda. This is a group of items that are deemed to be routine and are voted on “all in one go.” Contracts for less than $100,000 can be placed on the consent agenda. This meeting’s consent agenda includes just one item: a resolution to approve purchase order for Environmental Systems Research Institute (ESRI) for annual geographic information system (GIS) software maintenance and license agreement ($58,900).

9:51 p.m. Councilmembers can opt to select out any items for separate consideration, but no one moves to separate out the one item from itself.

9:51 p.m. Outcome: The council has voted to approve the consent agenda.

9:51 p.m. C-1 Approve rezoning for Traverwood Apartments. The council is being asked to give initial approval for rezoning of a 3.88 acre parcel for the Traverwood Apartments project – from ORL (office research light industrial district) to R4D (multiple-family district). The site plan for this project, being developed by First Martin Corp., is not being considered by the council tonight. But the $30 million project would include 16 two-story buildings for a total of 216 one- and two-bedroom units – or 280 total bedrooms. [For additional background, see Traverwood Apartments above.]

9:52 p.m. Outcome: The council has voted without discussion to give initial approval of the rezoning necessary for the Traverwood Apartments project. A final vote will come at a future council meeting after a public hearing.

9:52 p.m. B-1 Crosswalk ordinance. The council will be asked to give final approval of a repeal of the city’s crosswalk ordinance. The council gave initial approval to the repeal at its Nov. 18, 2013 meeting – on a 9-2 vote. Current Ann Arbor local law differs in two ways from the state’s Uniform Traffic Code. First, under current local law, motorists in Ann Arbor are supposed to yield the right-of-way to those pedestrians not just “within a crosswalk” but also to those who are “stopped at the curb, curb line or ramp leading to a crosswalk.” Second, when driving toward a crosswalk, motorists in Ann Arbor don’t have the option to yield to a pedestrian by merely slowing down; instead, they’re required to yield by stopping. Here’s what the current law says (as a result of amendment on Dec. 19, 2011):

10:148. Pedestrians crossing streets (a) When traffic-control signals are not in place or are not in operation, the driver of a vehicle shall stop before entering a crosswalk and yield the right-of-way to any pedestrian stopped at the curb, curb line or ramp leading to a crosswalk and to every pedestrian within a crosswalk when the pedestrian is on the half of the roadway on which the vehicle is traveling or when the pedestrian is approaching so closely from the opposite half of the roadway as to be in danger. …

For more detail on the evolution of the local law, see “Column: Why Did the Turkey Cross the Road?” [For additional background in the preview above: Crosswalk Law]

9:53 p.m. Kunselman leads off by calling it a great discussion with the citizenry. That had led to the effort not to repeal but to amend the ordinance, he says. It would also make it more consistent with the language on the city’s signs, he says. He now reads forth the ordinance in its entirety.

9:54 p.m. The key part is “shall stop and yield the right of way to every pedestrian within a crosswalk …”

9:55 p.m. Hieftje says that Kunselman can just substitute the amendment in place of the previous repeal, without a vote.

9:57 p.m. Kunselman says that the issue has been talked about for several months. The death on Plymouth Road was very emotional, he says. Whether that death resulted from the words in the ordinance, it was a situation to be taken seriously, he says. Kunselman complains that Erica Briggs of WBWC had taken the conversation he’d had with her and used it as “propaganda.”

9:58 p.m. Kunselman reviews the Traverse City ordinance, which requires stopping, but doesn’t talk about pedestrians anywhere except within a crosswalk.

10:01 p.m. Kunselman argues from the point of view of uniformity. We don’t want to have confusion among drivers trying to guess how to operate, he says. About the crash data, he says, any decrease can’t be attributed to the crosswalk language. He says that the citizenry has called for more enforcement and education. So at the next council meeting, “by golly” he’s going to propose a budget amendment to fund more traffic enforcement.

10:03 p.m. Kailasapathy says that it’s not the case that councilmembers were asking pedestrians to step into traffic. And it’s not acceptable to have to wait a long time to cross the street, she says. “We’re telling you to wait and find a gap,” she says. She calls for HAWK and other signals and infrastructure. She supports any amendments to the budget to support this – like hiring more police, or spending money on infrastructure. The marginal rate of return on pedestrian infrastructure is greater than investing in something like a rail station, she says.

10:06 p.m. Lumm agrees with investing in infrastructure and enforcement capability as budget priorities. She appreciates everyone coming out to speak. She’s talking about the crash data. She says it can’t be used as a definitive argument either way. She’s reviewing the history of the crosswalk ordinance changes.

10:07 p.m. Lumm says she tried back in 2011 to get the crosswalk ordinance language revised to refer only to “within a crosswalk.”

10:10 p.m. Briere says that Lumm is correct that the data doesn’t support a particular conclusion. November and December – for which 2013 data is not available – are months when accidents have historically been higher, she says. Briere says the question is what problem they’re trying to fix. The public has said more education, enforcement and engineering is necessary. So she doesn’t see how changing the ordinance helps. She says that accidents happening with pedestrians are in the crosswalk, not when cars are stopping for pedestrians stopping on the curb.

10:11 p.m. Briere clarifies what a “traffic signal” is: a red-yellow-green light. So it doesn’t include flashing beacons or stop signs, she explains.

10:11 p.m. Briere notes that the ordinance doesn’t apply to most downtown locations.

10:13 p.m. Briere says she’s going to reflect more on this issue. But she says she’ll paraphrase Jeff Hayner, who ran against her this last election – he had called for education, enforcement, and engineering, not repealing the ordinance.

10:14 p.m. Anglin is for spending the money on education and engineering. Right now there are too many irregularities, he says. He notes that many of the drivers are parents driving their kids to school. He says he’ll support the Kunselman amendment, and says it’s important to follow through and support it.

10:15 p.m. We’re in a state of confusion, Anglin says. And until that confusion is removed, we won’t have a safe community.

10:18 p.m. Warpehoski says he doesn’t see how the Kunselman amendment lines up with the rhetoric of uniformity. He likes his irony like he likes his coffee: bitter. Tomorrow is the International Day for Persons with Disabilities, he points out.

10:19 p.m. Warpehoski talks about his goals for the pedestrian safety task force. He’s not convinced that an inappropriate sense of pedestrian empowerment exists. He doesn’t buy that argument – but allows that that’s a data question. That data could be collected, he says, or the council could take a fire-ready-aim approach.

10:21 p.m. Warpehoski says that he walks a lot, with his kids. And he says he’s noticed that things have improved since the ordinance was passed. He says he feels safer as a pedestrian since the ordinance was passed. He says he’ll vote no on Kunselman’s proposal.

10:23 p.m. Taylor says he rejects the idea that Kunselman’s proposal is a compromise. He’s ok with Ann Arbor being different with its crosswalk law. No ordinance can protect drivers or pedestrians from negligence, he says. He repeats an argument from the Nov. 18 meeting – that the ordinance can’t be so powerful to embolden pedestrians but too weak to compel motorists to stop. He calls the budgetary amendments that others have talked about “chest thumping.”

10:24 p.m. Taylor says that the alleged confusion and fear has been “sown” and is not real, because the ordinance is very simple.

10:28 p.m. Eaton thanks everyone who showed up to speak. But he also says his vote is informed by those he talked to during his council campaign. The small numbers in the data, he says, mean that conclusions can’t be drawn. Eaton calls for a real education program and a real enforcement regime. “Here were are again tinkering with the ordinance,” he says. Ultimately, the money will have to be spent, like Griswold said, Eaton says.

10:31 p.m. Petersen says that she’s struggled with the logic of the ordinance. She says the data doesn’t show that increasing the right-of-way for pedestrians has increased safety. Petersen is skeptical that enforcement of the current ordinance would actually work. And she’s skeptical that effective education is possible in a transient community. Pedestrians should take full responsibility for their own safety, she says.

10:31 p.m. Petersen puts her faith in engineering. She says she’ll support an ADA compliant pedestrian bridge over Plymouth Road.

10:35 p.m. Warpehoski says he can count votes and realizes that he’s not going to win this one. But some comments of colleagues have gotten under his skin. He responds to Eaton’s characterization of the engineering efforts to date by saying the staff should be applauded for their efforts. Warpehoski explains that Petersen’s characterization of how a pedestrian claims the right-of-way is not correct. He agrees that pedestrians need to take responsibility for their own safety, but argues that pedestrians can best do that when they’re standing on the curb and can expect that motorists can stop.

10:36 p.m. Petersen responds to Warpehoski by saying that what he’s describing is ideal and that there’s not adequate enforcement to get to the point where motorists will actually stop.

10:39 p.m. Taylor says there’s are those who are unable to make the judgment as to whether it’s safe to enter the roadway. Under the current ordinance, it’s proper for the motorist to stop for someone just standing at the curb. Taylor says that the public speaker who talked about the culture change associated with drunk driving made a good analogy. That casts interesting light on where we are as a culture, he says.

10:42 p.m. Briere says that Petersen wants better enforcement, engineering and education and thinks there’s no way to achieve those goals, and thinks that the ordinance needs to be changed. She ticks through a paraphrase of positions taken by Eaton and Kailasapathy. Briere says that as more cars stop for pedestrians, more and more cars will stop for pedestrians. When drivers are not prepared to see a pedestrian – because they don’t have to stop for pedestrians – then they’re not prepared to stop for a person with a white cane or a person in a wheelchair, she says.

10:44 p.m. Briere also says that for “foreigners,” the more they see people stop for pedestrians, the more those “foreigners” will stop for pedestrians.

10:46 p.m. Hieftje says that in light of the closed session that’s scheduled, he would like to have the council suspend the council rule that requires a closed session to begin before 11 p.m. That rule is now suspended. Now back to the crosswalk ordinance.

10:48 p.m. Lumm is arguing against tabling. She says there’s been a lot of debate about the ordinance. Lumm is now holding forth with prepared comments.

10:50 p.m. Lumm’s comments are based essentially on an argument for uniformity across Michigan.

10:53 p.m. Hieftje corrects Anglin’s previous statement that “most bicyclists get hit” saying that some do but most don’t. Hieftje says he doesn’t think there’s a case in the data for changing the ordinance.

10:55 p.m. Hieftje talks about a video that the council had been shown years ago that showed pedestrians not using a pedestrian bridge. That’s a response to Petersen’s expression of support to build a pedestrian bridge on Plymouth Road.

10:56 p.m. Hieftje says that education, better signage, and engineering will help. But he doesn’t see how changing the ordinance will help. He doesn’t see the logic of requiring a person in a wheelchair to roll out into the road to see if cars are going to stop.

10:59 p.m. Outcome: The council has voted 6-4 to change the ordinance. But Hieftje says he will veto the change.

11:00 p.m. DC-1 Establish 2014 city council calendar. In this item, the council is complying with a charter requirement: “The Council shall fix the time and place of its regular meetings and shall hold at least two regular meetings in each month.” The pattern of the council’s regular meetings is: First and third Monday of the month with a work session on the second Monday.

11:00 p.m. Briere raises the question of a conflict with Passover.

11:00 p.m. Outcome: The council has voted to confirm its calendar of regular meetings.

11:00 p.m. DC-2 Approve city policy regarding removal of on-street metered public parking spaces. The council is considering establishing a value for on-street parking spaces, in situations where the builder of a project makes a proposal that results in the loss of an on-street metered parking space. The $45,000 proposed amount is based an average of an estimated construction cost for an above-ground space of $40,000, and $55,000 for a below-ground parking space.

By way of background the Ann Arbor Downtown Development Authority’s most recent financial records show that last year on-street parking spaces generated $2,000 in gross revenue per space or $1,347 in net income per space annually. The contract with the city under which the DDA operates the public parking system stipulates that the city receives 17% of the gross parking revenues. So the city’s revenue associated with an on-street parking space corresponds to $340 annually. [For additional background, see Cost of In-Street Parking Spaces above.]

11:01 p.m. Taylor says he’s going to ask for a postponement. A public hearing is recommended, he says, for any kind of fee. So he moves to have it postponed until Dec. 16.

11:01 p.m. Briere asks if there’s sufficient time to give notice or a public hearing. There is.

11:02 p.m. Lumm thanks Taylor for bringing it forward. She agrees with the concept. She thanks staff for their answers to questions.

11:03 p.m. Outcome: The council has voted to postpone the question of how much it should cost to remove an on-street parking space.

11:03 p.m. DB-1 Approve Running Fit addition site plan. The site plan entails a three-story addition to the Running Fit store at the northwest corner of Fourth Avenue and Liberty Street in downtown Ann Arbor. The first floor will be retained as retail space, but six residential units would be built on the upper three floors – one two-bedroom and five one-bedroom units. [For additional background, see Running Fit Addition above.]

11:03 p.m. Hieftje says he supports the project.

11:03 p.m. Outcome: The council has voted unanimously to approve the Running Fit addition.

11:03 p.m. DB-2 Accept donation of 2.2 acres from W. Martin. The council is being asked to consider of a donation of 2.2 acres to the city from Bill Martin just north of the project site for Traverwood Apartments. Earlier in the meeting, the council gave initial approval to a zoning change related to the project. The donated acreage is next to the Stapp Nature Area and the Leslie Park golf course. [image of map showing location]

11:05 p.m. Briere says she wants to make sure the official record reflects the correct size of the donation.

11:05 p.m. She thanks Martin for the donation.

11:05 p.m. Outcome: The council has voted unanimously to accept the acreage as a donation from Bill Martin to the city.

11:05 p.m. DS-1 Approve contract with Emergency Restoration Company ($729,000). The contract is for asbestos abatement in city hall. The council is being asked appropriate $400,000 in funds for the contract.

11:06 p.m. Outcome: The council has voted to approve the contract for asbestos abatement in city hall.

11:06 p.m. DS-2 Approve contract with Nova Environmental Inc. ($35,600). This is a contract for an air monitoring project during the city hall asbestos abatement project.

11:08 p.m. Anglin wants to know why this contract would not be included in the one for the work itself. Matt Kulhanek explains that this contractor would be overseeing the work of the other contractor. That’s why the items are separate.

11:08 p.m. Outcome: The council has voted to approve the air monitoring contract.

11:08 p.m. DS-3 Establishing a tax abatement district at 1901 E. Ellsworth. Once an industrial development district (IDD) is established, the property owner can apply for a tax abatement. The consideration of the tax abatement is a separate vote, which will be taken at a future meeting.

11:12 p.m. Kailasapathy asks for CFO Tom Crawford. She gets confirmation that the point is eventually to allow for application for a tax abatement. Crawford says that abatements can be requested for any new investment, not just personal property. She wants to know how much the value of the tax abatement would be. She notes that the company, Mahindra Genze, is a large company in India, like GE here. So it’s not really a small start-up. The amount of the investment would be $1.6 million. That’s $25,000 in total tax and the general fund portion of the city would be less, he says.

11:13 p.m. Crawford responds to Kailasapathy by explaining that the question for the council to weigh is whether the company has alternative locations. Kailasapathy wonders if this isn’t just a “race to the bottom” among various communities vying to attract the company.

11:16 p.m. City administrator Steve Powers notes that another consideration was that it would be a manufacturing operation, which is underrepresented in Ann Arbor. The fact that it’s located in an identified important corridor is also important. Kailasapathy gets confirmation that the tax abatement would likely be around three years, but could be up to 12 years.

11:18 p.m. Eaton reports that he’d had the opportunity to sit down with Luke Bonner of Ann Arbor SPARK and Alan Clark of Mahindra Genze. But he’s skeptical about tax abatements. He gets confirmation that the district is attached to the property, not the tenant. Crawford notes that Ann Arbor’s practice is to close the district after the original intent is fulfilled.

11:21 p.m. Eaton says when he looked up the city’s policy, it has a sunset clause. Crawford says that the policy is supposed to be reviewed. Eaton quotes the policy that makes clear that it does end and has already expired. Crawford: “I stand corrected.” Crawford notes that the prior city policy reflects the state’s criteria, so it’s not as if there’s no guidance.

11:23 p.m. Hieftje says that if the investment weren’t made by this company, the city wouldn’t get any tax revenue. Crawford says there’s a history of neighboring jurisdictions aggressively pursuing companies. Hieftje agrees with Kailasapathy’s characterization of the process as a “race to the bottom.” But these are the rules that the state of Michigan has set up, he says.

11:27 p.m. Petersen asks Crawford how common tax abatement is as an economic development tool. Crawford says that very few are done in Ann Arbor – in his nine years, it’s been done for around nine companies, he thinks. Ann Arbor SPARK’s Luke Bonner clarifies that it was a multi-state competition for the location. There were internal forces within Mahindra Genze that would have preferred the manufacturing location to be in a southern state. Previously, Bonner worked in Sterling Heights, where the personal property tax revenue was about $10 million, which he describes as about what all of Washtenaw County generates. That was a function of a policy to grant tax abatements.

11:31 p.m. Petersen supports this as important for economic development, which is a council priority. “I just think this makes sense for us,” she says.

11:31 p.m. Taylor says he’s delighted to support this, echoing Hieftje’s comments about these being the rules of the game. Lumm says she’s also not crazy about tax abatements because they pit one community against another. But she thinks the addition of jobs and the particular technology is a good fit for Ann Arbor. Kunselman also says he met with the representatives of the company, and he’s excited about the product. It’s located in one of the poorest parts of the city, he says, and he hopes that some of those jobs go to locals.

11:31 p.m. Outcome: The council has voted to establish the IDD at 1901 E. Ellsworth.

11:31 p.m. DS-4 Approve agreement University Of Michigan for municipal parking citation processing, collections and record management services. This is the renewal of an agreement with the University for processing parking tickets.

11:32 p.m. Hieftje says that last Saturday, UM was clocking speeders on Huron Street. He points out that UM does write tickets on city streets.

11:32 p.m. Outcome: The council has voted unanimously to approve the agreement with UM for parking ticket processing.

11:32 p.m. DS-5 Approve six-month extension of installment purchase agreement with Bank of Ann Arbor to finance purchase of former Y lot. ($3,500,000). In the event that completion of due diligence on the pending sale of the old Y lot is not done by Dec. 16 – the date on which the city’s $3.5 million balloon payment is due – this approval will allow the city to continue the financing arrangement it has with Bank of Ann Arbor for six months. [For additional background, see Bank of Ann Arbor Loan.]

11:34 p.m. Briere says, “It’s my hope we never use this.” City administrator Steve Powers says that next week might be ambitious, but by the end of the year, the sale would almost certainly be completed. Lumm thanks the Bank of Ann Arbor for the terms, which include no prepayment penalty.

11:34 p.m. Outcome: The council has voted to approve the extension of the financing arrangement with Bank of Ann Arbor on the former Y lot.

11:37 p.m. Communications from council. Warpehoski follows up on Lloyd Shelton’s comment during the crosswalk public hearing. He says that Shelton is right about the accessibility of the council chambers. “We should be doing better as a seat of government for people with disabilities,” he says. People should not face an undue burden to address the council or be employed, he says. The configuration would not allow for a mayor or city administrator who uses a wheelchair. Briere points out that the chambers was built to serve as a courtroom.

11:37 p.m. Public commentary. There’s no requirement to sign up in advance for this slot for public commentary.

11:40 p.m. Ed Vielmetti is addressing the council. He reminds the council of the commitment to put items on the agenda in time for people to read them in advance and be able to comment on those items. The council appointments had not been added in a timely way, he points out. He also points out that the amendment on the crosswalk ordinance was not added until just minutes before the discussion. People would like to see the agenda settled on Friday, he notes.

11:41 p.m. Kathy Griswold says it was a major omission to not have a professional engineer recommendation for the original ordinance change. Having one person veto the revision puts a great burden on that one person, she says.

11:42 p.m. Closed session. The council is asked to go into closed session. The purpose is to discuss a privileged attorney-client memo that will be in writing, says assistant city attorney Abigail Elias.

11:45 p.m. Outcome: The council has voted unanimously to go into closed session.

12:05 a.m. We’re back.

12:05 a.m. Adjournment. We are now adjourned. That’s all from the hard benches.

A sign on the door to the Ann Arbor city council chambers gives instructions for post-meeting clean-up.

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Screenshot of Legistar – the city of Ann Arbor’s online agenda management system. Image links to the Dec. 2 meeting agenda.

Items that could result in considerable council discussion include final approval of a repeal of the city’s crosswalk ordinance. A scheduled public hearing on that issue could also draw a number of speakers. The council gave initial approval to the repeal at its Nov. 18, 2013 meeting – on a 9-2 vote.

The tally could be closer for the final vote, as mayor John Hieftje, Sabra Briere (Ward 1) and Chuck Warpehoski (Ward 5) could join Christopher Taylor (Ward 3) and Margie Teall (Ward 4), who had dissented on the initial approval. Also a possibility is that a compromise approach could be worked out. The possible compromise would leave intact the language about motorists stopping, but still limit the right-of-way to just pedestrians within a crosswalk – that is, it would not afford the right-of-way to those standing at the curb.

Some of the public’s perspective and council discussion on the crosswalk issue might be aired out during the council’s Sunday caucus, held in council chambers at city hall. This week the caucus has been rescheduled for 1 p.m. instead of its usual evening start time, in part to accommodate more discussion of the local crosswalk law.

Another topic that could extend the meeting is related to the pending sale of the Edwards Brothers property on South State Street to the University of Michigan for $12.8 million, which was announced in a press release last week. A right of first refusal on the property is held by the city of Ann Arbor as a condition of a tax abatement granted by the city council almost three years ago, on Jan. 18, 2011.

There’s some interest on the council in holding a closed session on Dec. 2 to review the options and the impact of those options. Any interest on the council in acquiring the land, which seems somewhat scant, would be based on a desire eventually to put the land back on the tax rolls. The topic of land acquisition is one of the legal exceptions to the Michigan Open Meetings Act, which requires all deliberations of a public body to be open to the public. If the council holds a closed session on that topic, it could extend the Dec. 2 meeting.

One reason the council may have little appetite for acquiring the Edwards Brothers property is that the city has just now managed to sell a downtown property the city acquired 10 years ago – the old Y lot on William Street, between Fourth and Fifth avenues. Approval of the $5.25 million sale to Dennis Dahlmann came at the council’s Nov. 18 meeting. But it’s possible that not all the due diligence will be completed before Dec. 16, when the city owes the $3.5 million principal it used to purchase the property. As a hedge against that possibility, the council will be asked on Dec. 2 to approve a six-month extension on the installment purchase agreement with Bank of Ann Arbor for the $3.5 million.

In the meantime, the minutes of the Ann Arbor Downtown Development Authority’s most recent operations committee meeting reflect the DDA’s expectation that all of the equipment used to operate the public surface parking facility at the old Y lot will need to be removed by Dec. 31, 2013.

The city’s right of first refusal on the Edwards Brothers property is linked to a tax abatement. And on the council’s Dec. 2 agenda is an item that would establish an industrial development district (IDD) for a different property, at 1901 E. Ellsworth, where Extang Corp. and GSG Fasteners are located. Creating an IDD is a step in the process for granting a tax abatement.

Land control and use is a predominant theme among other Dec. 2 agenda items as well.

The council will be asked to give initial approval to a rezoning request for the Traverwood Apartments project – from ORL (office, research and light industrial district) to R4D (multiple-family district). The First Martin Corp. project would include 16 two-story buildings for a total of 216 one- and two-bedroom units – or 280 total bedrooms. The site plan and final rezoning approval would come before the city council at a future meeting. The Dec. 2 meeting will also include council’s consideration of a donation of 2.2 acres to the city from Bill Martin just north of the Traverwood Apartments project site. The acreage to be donated is next to the city’s Stapp Nature Area and the Leslie Park golf course.

At its Dec. 2 meeting, the council will also be asked to approve the site plan for a three-story addition to the Running Fit store at the corner of Fourth Avenue and Liberty Street in downtown Ann Arbor. The first floor will be retained as retail space, but six residential units would be built on the upper three floors – one two-bedroom and five one-bedroom units.

The city council will also be asked to place a value on land currently used as on-street parking spaces – $45,000 per space. By formally adopting that figure, any future development that causes the removal of on-street parking could be charged that amount. It would be paid to the Ann Arbor DDA, which manages the city’s public parking system. In this matter, the council would be acting on a four-year-old recommendation, approved by the Ann Arbor DDA in 2009.

In non-land issues, the council will be introduced to newly hired firefighters at its Dec. 2 meeting. The budgeted staffing level for the fire department is 85. However, the statistical section from the most recent comprehensive annual financial report (CAFR) for the city shows 82 AAFD staff in fiscal year 2013. That’s because the council approved the hiring of additional firefighters after the fiscal year began, bringing the total to 85.

The CAFR itself is indirectly included in the council’s agenda – as part of a presentation that will be given by chief financial officer Tom Crawford on the result of this year’s audit. It was a clean audit that showed the general fund doing about $2.4 million better than budgeted.

Among the other myriad statistics in the CAFR are the number of parking violations recorded by the city – which are again down in the range of 90,000, as they’ve been for the last three years. That’s about half what they were in 2006 and 2007. Those numbers in the CAFR don’t include University of Michigan parking tickets –  although the city and the UM have an agreement under which the city processes tickets and hears appeals for the university. A renewal of that agreement is on the council’s agenda for Dec. 2.

On Dec. 2 council also has a fair amount of its own internal business to wrap up, associated with the seating of the new council, which took place at the council’s Nov. 18 meeting. That includes adoption of the council rules. Based on a less than 10-minute meeting of the council’s rules committee on Nov. 29, no changes to the rules will be put forward at this time. Based on that meeting, it appears that Sally Petersen (Ward 2) will replace Stephen Kunselman (Ward 3) on that council committee. The rest of the new council committee assignments are also supposed to be made at the Dec. 2 meeting.

The council’s calendar of regular meetings and work sessions will also be adopted at the Dec. 2 meeting. The basic pattern is first and third Mondays for regular meetings, except when there’s a holiday or an election during the week of the meeting.

This article includes a more detailed preview of many of these agenda items. More details on other agenda items are available on the city’s online Legistar system. The meeting proceedings can be followed Monday evening live on Channel 16, streamed online by Community Television Network.

Crosswalk Law

The council will be asked to give final approval of a repeal of the city’s crosswalk ordinance. The council gave initial approval to the repeal at its Nov. 18, 2013 meeting – on a 9-2 vote.

Current Ann Arbor local law differs in two ways from the state’s Uniform Traffic Code. First, under current local law, motorists in Ann Arbor are supposed to yield the right-of-way to those pedestrians not just “within a crosswalk” but also to those who are “stopped at the curb, curb line or ramp leading to a crosswalk.” Second, when driving toward a crosswalk, motorists in Ann Arbor don’t have the option to yield to a pedestrian by merely slowing down; instead, they’re required to yield by stopping.

Here’s what the current law says (as a result of amendment on Dec. 19, 2011):

10:148. Pedestrians crossing streets

(a) When traffic-control signals are not in place or are not in operation, the driver of a vehicle shall stop before entering a crosswalk and yield the right-of-way to any pedestrian stopped at the curb, curb line or ramp leading to a crosswalk and to every pedestrian within a crosswalk when the pedestrian is on the half of the roadway on which the vehicle is traveling or when the pedestrian is approaching so closely from the opposite half of the roadway as to be in danger.

(b) A pedestrian shall not suddenly leave a curb or other place of safety and walk or run into a path of a vehicle that is so close that it is impossible for the driver to yield.

(c) Every pedestrian crossing a roadway at any point other than within a marked crosswalk or within an unmarked crosswalk at an intersection shall yield the right-of-way to all vehicles upon the roadway. (Corresponds to UTC rule 706)

For more detail on the evolution of the local law, see “Column: Why did the Turkey Cross the Road?”

A possible compromise the council might consider would leave intact the language about motorists stopping, but still limit the right-of-way to just pedestrians within a crosswalk – that is, it would exclude those standing at the curb.

The compromise could be based on the wording of the ordinance used by Traverse City:

When traffic-control signals are not in place or not in operation, the driver of a vehicle shall stop and yield the right-of-way to every pedestrian within a marked crosswalk.

Representatives of the Washtenaw Bicycling and Walking Coalition, who are advocating against repealing the crosswalk ordinance, contend that Traverse City police enforce “within a crosswalk” by including the curb. But at the council’s Nov. 18 meeting, assistant city attorney Bob West indicated that he didn’t interpret “within a crosswalk” to mean anything except the roadway.

At least some of the community debate on the topic has included the question of whether Ann Arbor’s ordinance is unique. On a national level, the ordinance language used in Boulder, Colorado includes more than just those pedestrians within a crosswalk:

A driver shall yield the right of way to every pedestrian on a sidewalk or approaching or within a crosswalk.“

And in Seattle, a similar effect is achieved by defining the crosswalk to extend from the roadway through the curb to the opposite edge of the sidewalk:

‘Crosswalk’ means the portion of the roadway between the intersection area and a prolongation or connection of the farthest sidewalk line or in the event there are no sidewalks then between the intersection area and a line ten feet therefrom, except as modified by a marked crosswalk.

Edwards Brothers Land

A pending sale of the Edwards Brothers property on South State Street to the University of Michigan for $12.8 million was announced in a press release last week. A right of first refusal on the property is held by the city of Ann Arbor as a condition of a tax abatement granted by the city council almost three years ago, on Jan. 18, 2011.

The topic of land acquisition is one of the legal exceptions to the Michigan Open Meetings Act, which requires all deliberations of a public body to be open to the public.

The council’s deliberations on granting the tax abatement nearly three years ago contemplated the possibility that the council could be faced with a decision about whether to act on the right of first refusal, which was associated with the tax abatement. At the time, city assessor David Petrak pegged the value of the land at anywhere between $1 million and $50 million. From The Chronicle’s report of that Jan. 18, 2011 meeting:

The cover memo also indicates that the Edwards Brothers real property is located immediately adjacent to a University of Michigan park-and-ride lot, and it’s felt that UM may have some interest in purchasing the property, which would remove it from the city’s tax rolls. In that light, the city staff built a stipulation into the tax abatement that would give the city the right of first refusal on any future land sale. So if UM offered to purchase the property, the city would have an opportunity to make an offer – presumably with the idea that the city would then sell the land to some other private entity, thereby returning the land to the tax rolls.

City assessor David Petrak briefly introduced some of the background on the request to the council.

Sandi Smith (Ward 1) pressed for some additional explanation. Without additional information, she said, she could not support it. Why was the city considering the application? The answer was that by statute it must be considered.

Stephen Rapundalo (Ward 2) reminded the council that Edwards Brothers has been in Ann Arbor for over 100 years. When the previous abatement was granted, he said, the company was “this close” to moving the operation to North Carolina. Instead, due to the abatement, the company decided to remain in Ann Arbor and preserved around 400 jobs in this community.

With respect to Edwards Brothers not meeting the employment numbers required by the first tax abatement, Rapundalo cited the dire economic times, noting in particular that the book business has not exactly been thriving. So he did not want to hold the job losses against the company. He called Edwards Brothers a long-standing corporate citizen. He also said that if the company left, he would not doubt for a second that UM would pick up the property.

From the city’s CFO, Tom Crawford, Sabra Briere (Ward 1) elicited the fact that the tax abatement would apply to a new press – a typical economic requirement in a very competitive industry, he said. Petrak went on to explain the right of first refusal on the possible sale of the real estate, if Edwards Brothers decided eventually to leave anyway.

City administrator Roger Fraser elaborated in more detail on Crawford’s description of the press to be acquired. It’s particularly suited to quick turnaround on small printing jobs, and offers an opportunity to pick up some additional business for the company. The right of first refusal on the land sale, he said, was an attempt to extract some additional public benefit from the agreement.

Smith pressed for information about what the approximate cost of the land would be, if the city found itself having to contemplate whether to exercise its right of first refusal. Petrak didn’t have that information, but when continued to be pressed by Smith, he allowed that it was between $1 million and $50 million.

Mayor John Hieftje established with Crawford that there’d been no negative impact to the city’s revenues due to job losses at the company. Hieftje said the right of first refusal did not matter to him at all, but the 400 jobs at the company represented good, if not fancy, jobs. They might not earn the average $80,000 salaries that Pfizer workers earned, but they were good jobs. Hieftje also noted that the percentage of property that is abated in the city is minuscule.

…

Tony Derezinski (Ward 2) observed that 415 jobs is a lot of jobs. The fact that there’d been only a 13% drop he characterized as a “great feat.” If it were a new company, he said, they would all be out helping to cut the ribbon.

Carsten Hohnke (Ward 5) expressed his support for the abatement.

Bank of Ann Arbor Loan

An agreement to sell the old Y lot on William Street between Fourth and Fifth avenues downtown – to hotelier Dennis Dahlmann for $5.25 million – was approved by the council at its Nov. 18, 2013 meeting. [.pdf of rider] [.pdf of sales agreement]

But it’s possible that not all the due diligence will be completed before Dec. 16, when the city owes the $3.5 million principal it used to purchase the property. As a hedge against that possibility, the council will be asked on Dec. 2 to approve a six-month extension on the installment purchase agreement with Bank of Ann Arbor for the $3.5 million. The interest rate would be the same as the interest rate at which the city is currently borrowing the money – 3.89% with no penalty for pre-payment.

If additional interest is owed due to the extension of the loan, presumably the Ann Arbor Downtown Development Authority would also continue with its share of the payments. That was an arrangement agreed to in 2003 through action by the DDA’s executive committee, not the full DDA board. The DDA’s portion of the interest payments could factor into the calculation of the net proceeds from the former Y lot sale. A year ago at the council’s Oct. 15, 2012 meeting, the council adopted a resolution that indicated the proceeds of the sale would:

“… 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 …

However, two days after the council meets on Dec. 2, the board of the Ann Arbor DDA will be considering a resolution that would waive any need to repay the DDA for those interest payments or for the expenditures by the DDA to demolish the old Y building in 2008. [.pdf of Dec. 4, 2013 draft DDA resolution on Y lot proceeds]

Possibly relevant to the question of whether the DDA can simply waive any required repayment by the city to the DDA is the source of funds used by the DDA to make those payments. In recent years, the DDA has used parking funds to make the interest payments. To the extent that in earlier years, funds captured under the DDA’s tax increment finance (TIF) may have been used to make interest payments, it’s not clear if the DDA could simply allow the city to retain those funds as part of the proceeds of the Y lot sale.

Traverwood Apartments

On the council’s Dec. 2 agenda is a project proposed by First Martin Corp. that would construct a complex of 16 two-story buildings on the west side of Traverwood Drive, north of Plymouth Road. The development is called Traverwood Apartments.

Aerial view of proposed Traverwood Apartments at 2225 Traverwood Drive, north of Plymouth Road.

Only the initial vote on the zoning is being considered on Dec. 2. The final vote on the zoning and the site plan will appear on a future council agenda.

The project, estimated to cost $30 million, would include 16 two-story buildings for a total of 216 one- and two-bedroom units – or 280 total bedrooms. Eight of the buildings would each have 15 units and 11 single-car garages. An additional eight buildings would each have 12 units and 8 single-car garages.

The city’s planning commission recommended approval of the site plan and the required rezoning at its Nov. 6, 2013 meeting. The site is made up of two parcels: a nearly 16-acre lot that’s zoned R4D (multi-family residential), and an adjacent 3.88-acre lot to the south that’s currently zoned ORL (office, research and light industrial). It’s the smaller lot that needs to be rezoned R4D.

Land to be donated by Bill Martin to the city of Ann Arbor indicated in red outline.

The Dec. 2 agenda includes the council’s consideration of a donation of 2.2 acres to the city from Bill Martin just north of the project site. The donated acreage is next to the Stapp Nature Area and the Leslie Park golf course.

Running Fit Addition

At its Dec. 2 meeting, the council will be asked to approve the site plan for a three-story addition to the Running Fit store at the northwest corner of Fourth Avenue and Liberty Street in downtown Ann Arbor.

Aerial view of the Running Fit building, at the northwest corner of East Liberty and South Fourth.

The first floor will be retained as retail space, but six residential units would be built on the upper three floors – one two-bedroom and five one-bedroom units.

The city planning commission recommended approval of the site plan at its Oct. 15, 2013 meeting.

The location in Ward 1 is zoned D1, which allows for the highest density development in the city. It’s also located in the Main Street Historic District.

The city’s historic district commission issued a certificate of appropriateness on Aug. 15, 2013.

The project is expected to cost about $900,000.

Cost of In-Street Parking Spaces

The city council will also be asked to place a value on portions of the public right-of-way currently used as on-street parking spaces – $45,000 per space. By formally adopting that figure, any future development that causes the removal of on-street parking spaces could be charged that amount.

In this matter, the council would be acting on a four-year-old recommendation approved by the Ann Arbor Downtown Development Authority in 2009:

Thus it is recommended that when developments lead to the removal of on-street parking meter spaces, a cost of $45,000/parking meter space (with annual CPI increases) be assessed and provided to the DDA to set aside in a special fund that will be used to construct future parking spaces or other means to meet the goals above. [.pdf of meeting minutes with complete text of March 4, 2009 DDA resolution]

The contract under which the DDA manages the public parking system for the city was revised to restructure the financial arrangement (which now pays the city 17% of the gross revenues), but also included a clause meant to prompt the city to act on the on-street space cost recommendation. From the May 2011 parking agreement:

The City shall work collaboratively with the DDA to develop and present for adoption by City Council a City policy regarding the permanent removal of on-street metered parking spaces. The purpose of this policy will be to identify whether a community benefit to the elimination of one or more metered parking spaces specific area(s) of the City exists, and the basis for such a determination. If no community benefit can be identified, it is understood and agreed by the parties that a replacement cost allocation methodology will need to be adopted concurrent with the approval of the City policy; which shall be used to make improvements to the public parking or transportation system.

Subject to administrative approval by the city, it’s the DDA that has sole authority to determine the addition or removal of meters, loading zones, or other curbside parking uses.

The $45,000 figure is based on an average construction cost to build a new parking space in a structure, either above ground or below ground – as estimated in 2009. It’s not clear what the specific impetus is to act on the issue now, other than the fact that action is simply long overdue. In 2011, the University of Michigan’s Institute for Social research expansion was expected to result in the net removal of one on-street parking space. [For more background, see: "Column: Ann Arbor's Monroe (Street) Doctrine."]

The resolution on the council’s Dec. 2 agenda is sponsored by Christopher Taylor (Ward 3). Taylor participated in recent meetings of a joint council and DDA board committee that negotiated a resolution to the question about how the DDA’s TIF revenue is regulated. In that context, Taylor had argued adamantly that any cap on the DDA’s TIF should be escalated by a construction industry CPI, or roughly 5%. Taylor’s reasoning was that the DDA’s mission is to undertake capital projects and therefore should have revenue that escalates in accordance with increases in the costs to undertake capital projects. Based on that reasoning, and the explicit 2009 recommendation by the DDA to increase the estimated $45,000 figure in that year by an inflationary index, the recommended amount now, four years later, could be closer to $55,000, assuming a 5% figure for construction cost inflation.

The actual cost of building an underground space in the recently completed (2012) underground Library Lane parking structure could provide a more current estimate, but the DDA has not made public a breakdown of how that project’s actual costs lined up with its project budget.

The last two month’s minutes from the DDA’s committee meetings don’t reflect any discussion of the on-street parking space replacement cost. Nor has the issue been discussed at any recent DDA board meeting.

Audit, Firefighters, Other Stats

In non-land issues, the council will be introduced to newly hired firefighters at its Dec. 2 meeting.

The statistical section from the city’s most recent comprehensive annual financial report (CAFR) shows a budgeted staffing level for the fire department of 82, in fiscal year 2013. But the council approved the hiring of additional firefighters after the fiscal year began, bringing the total to 85.

The CAFR is indirectly included in the council’s agenda – as part of a presentation that will be given by chief financial officer Tom Crawford on the result of this year’s audit. It was a clean audit that showed the general fund doing about $2.4 million better than budgeted.

Highlights from that FY 2013 audit report, which has now been issued in final form to the city, include an increase to the general fund balance from about $15.4 million to about $16.2 million. The $800,000 increase contrasts to the planned use of roughly $1.6 million from the general fund balance in the FY 2013 budget. About $200,000 of the increase was in the “unassigned” fund balance.

The result of the audit, in the new GASB terminology, was an “unmodified” opinion – which corresponds to the older “unqualified” opinion. In sum, that means it was a “clean” audit. The concerns identified last year had been addressed to the auditor’s satisfaction.

Members of the council’s audit committee, which met on Oct. 24. 2013 to review the draft audit report, were enthusiastic about the $2.4 million better-than-budget performance for the city’s general fund, which had expenditures budgeted for $74,548,522 in FY 2013.

Challenges facing the city this coming year include the implementation of the new GASB 68 accounting standard starting in FY 2015, which begins July 1, 2014. That standard requires that most changes to the net pension liability will be included immediately on the balance sheet – instead of being amortized over a long time period. The GASB 68 standard must be implemented for an organization’s financial statements for fiscal years beginning after June 15, 2014.

Two of the city’s funds were highlighted by Crawford at the Oct. 24 meeting as having potential difficulties associated with the GASB 68 standard – solid waste and the public market (farmers market). For the public market fund, Crawford floated the idea to the audit committee that it could be folded back into the city’s general fund, on analogy with the golf fund. Starting this year (FY 2014), the golf fund has been returned to general fund accounting.

Among the other myriad statistics in the CAFR are the number of parking violations recorded by the city – which are again down in the range of 90,000 as they’ve been for the last three years. That’s about half what they were in 2006 and 2007. Those numbers in the CAFR don’t include University of Michigan parking tickets – although the city and the UM have an agreement under which the city processes tickets and hears appeals for the university. A renewal of that agreement is on the council’s agenda for Dec. 2.

Here’s a sampling of the kind of data available in the statistical section of the FY 2013 CAFR, which includes data from previous CAFRs as well. [.pdf of final audit report released on Nov. 15, 2013]

Ann Arbor parking violations. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor traffic violations. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor physical arrests. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor police services data. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor fires extinguished. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor fire inspections. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor emergency responses by fire department. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor fire services data. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor police department staff strength. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor total city employees. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor water main breaks. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Ann Arbor taxable value. (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

Internal Council Business

On its Dec. 2 meeting agenda, the council also has a fair amount of its own internal business to wrap up, associated with the seating of the new council, which took place at the council’s Nov. 18 meeting.

That internal business includes adopting the council rules. Based on a less than 10-minute meeting of the council’s rules committee on Nov. 29, no changes to the rules were planned to be put forward at this time. The council’s rules committee – established by last year’s council – currently consists of Sabra Briere (Ward 1), Stephen Kunselman (Ward 3), Christopher Taylor (Ward 3) and mayor John Hieftje.

However, the .pdf file attached to the council’s online agenda – which reflects the council’s rules to be considered for adoption – includes a revision that was explicitly discussed and, for the time being, rejected at the committee’s Nov. 29 meeting. [.pdf of city council rules]

That change replaces “personality” (an archaic usage meaning a disparaging remark about a person) with “personal attack” in the following rule: “The member shall confine comments to the question at hand and avoid personality.” At the council’s Nov. 18 regular meeting, when the council voted to delay adoption of the rules pending a review of the rules, Chuck Warpehoski (Ward 5) had asked that the rules committee look at the rule requiring that councilmembers “avoid personality” during deliberations.

At the Nov. 29 committee meeting, Stephen Kunselman weighed in specifically for retaining the more archaic wording as reflective of history and tradition. The outcome of that committee discussion was that no changes would be recommended at this time, as any changes should be reviewed by the rules committee with its new membership. But based on the inclusion of the change in the Legistar document, it’s not clear what the status of that proposed change is meant to be.

A consensus on the committee at the Nov. 29 meeting seemed to be that the new membership of the rules committee should include Sally Petersen (Ward 2) in place of Kunselman, as Kunselman did not wish to continue on the rules committee. In addition, Petersen’s ethics initiative, which was approved at the council’s Nov. 18, 2013 meeting, tasks the rules committee with a certain amount of work – so the rules committee consensus on Nov. 29 appeared to be that the committee would be well-served by her membership.

The rest of the new council committee assignments are also supposed to be made at the Dec. 2 meeting.

The council’s calendar of regular meetings and work sessions will also be adopted at the Dec. 2 meeting. The basic pattern is first and third Mondays for regular meetings, except when there’s a holiday or an election during the week of the meeting.

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